Fed's QE Unwind Reaches $374 Billion - The Federal Reserve shed $54 billion in assets over the five weekly balance sheet periods that encompass the calendar month of November. This reduced the assets on its balance sheet to $4,086 billion, the lowest since January 15, 2014, according to the Fed's balance sheet for the week ended December 5, released this afternoon. Since the beginning of the QE unwind - or "balance sheet normalization," as the Fed calls it - in October 2017, the Fed has now shed $374 billion: The Fed holds a variety of assets, including the Treasury securities and mortgage-backed securities (MBS) that it had acquired as part of QE. Between the end of QE in late 2014 and the beginning of the QE unwind in October 2017, the Fed replaced maturing securities with new securities to keep their levels roughly the same. Starting in October 2017, the Fed has been shedding Treasury securities and MBS. The Fed held about $910 billion in assets in the summer of 2008, before the whole mess started. Over the prior decades, the amount of assets on its balance sheet had roughly grown in line with nominal GDP (not inflation adjusted); and this trend would have continued. In other words, there is zero chance the assets on the balance sheet will ever revert to $910 billion. At the average growth rate of the past few years, nominal GDP in 2023 will have grown by 72% since Q4 2008. If the Financial Crisis had never happened and if therefore the Fed had continued expanding its balance sheet in line with nominal GDP, the balance sheet would have reached about $1,570 billion by 2023.This marks the absolute lowest point for the assets on the Fed's balance sheet by the time the QE unwind is finished - but more likely, the balance sheet won't drop quite that far.
DiMartino Booth- The Fraying Of The Fed's Fragile Narrative - Former Dallas Fed official Danielle DiMartino Booth joins the show just as Chairman Jay Powell faces his first major challenge: will he keep raising rates as promised now that autos, housing, employment, and even tech stocks look soft? And if not, will he effectively signal that the US economy is in big trouble?"I'm most concerned about the bottom line evaluations in the corporate debt market…these bring back memories of the sub-prime credit crisis..." "The corporate bond market has doubled since 2007. It is over 9 $trillion. Subprime loans were 3 trillion... The Fed should be calling out potential financial stability risks. That is the unspoken third mandate." "Apparently in six weeks we have come "worlds apart from neutral" to "Just under" and that is when markets really, really took off.""The Fed could engineer a soft landing, but it is a rare occurrence and as Powell is learning, there is a lagged effect in terms of when those interest rate hikes are put in and when they show up in the economy.""Powell is trying to broadcast that he is truly data dependent…'if the data change, I'm going to change with the data.'""...look across energy, manufacturing, real estate & construction, leisure & hospitality states…jobless claims across all of these sectors have turned up. It is a weakening economy...""If the economy is truly slowing, then top line growth will slow, earnings expectations will be ratcheted down going into 2019. Those are things that the stock market will not like." DiMartino Booth and Jeff Deist discuss Powell's performance to date, the credulity of the financial press, the ugly ticking time bomb of US corporate debt, and whether Austrians and permabears overestimate the Fed's influence on the economy.
Fed's Beige Book: Economic Growth "modest or moderate", Labor Market "Tightened further" - Fed's Beige Book "This report was prepared at the Federal Reserve Bank of Philadelphia based on information collected on or before November 26, 2018." Most of the twelve Federal Reserve Districts reported that their economies expanded at a modest or moderate pace from mid-October through late November, though both Dallas and Philadelphia noted slower growth compared with the prior Beige Book period. St. Louis and Kansas City noted just slight growth. On balance, consumer spending held steady – District reports on growth of nonauto retail sales appeared somewhat weaker while auto sales tended to improve, particularly for used cars. Tourism reports varied but generally kept pace with the economy. Tariffs remained a concern for manufacturers, but a majority of Districts continued to report moderate growth in the sector. All Districts reported growth in nonfinancial services – ranging from slight to strong. New home construction and existing home sales tended to decline or hold steady, while construction and leasing of nonresidential structures tended to rise or remain flat. Overall, lending volumes grew modestly, although a few Districts noted some slowing. Agricultural conditions and farm incomes were mixed; some Districts noted impacts from excessive rainfall and from tariffs, which have constrained demand. Most energy sectors saw little change or modest growth. Most Districts reported that firms remained positive; however, optimism has waned in some as contacts cited increased uncertainty from impacts of tariffs, rising interest rates, and labor market constraints. Labor markets tightened further across a broad range of occupations. Over half of the Districts cited firms for which employment, production, and sometimes capacity expansion had been constrained by an inability to attract and retain qualified workers. In fact, several Chicago firms reported that some employees have simply quit – with no notice nor means of contact. Partly as a consequence of labor shortages, most Districts reported that employment growth leaned to the slower side of a modest to moderate pace. Conversely, most Districts reported that wage growth tended to the higher side of a modest to moderate pace. In addition to raising wages, most Districts noted examples of firms enhancing nonwage benefits, including health benefits, profit-sharing, bonuses, and paid vacation days.
The Flattening Yield Curve Just Produced Its First Inversions - A section of the U.S. Treasuries yield curve just inverted for the first time in more than a decade. The spread between 3- and 5-year yields fell to negative 1.4 basis points Monday, dropping below zero for the first time since 2007, and the 2- to 5-year gap soon followed. The 2- to 10-year is more closely watched as a potential indicator of pending recessions. But Monday’s move could be the first signal that the market is putting the Federal Reserve on notice that the end of its tightening cycle is approaching. Some analysts attributed the short-end underperformance to demand for riskier assets as global trade tensions eased following this weekend’s tariff truce between U.S. President Donald Trump and China’s Xi Jinping. Others pinned it to modestly higher expectations for Fed hikes next year after the summit between the two leaders. Either way, the five-year is faring better because investors anticipate the end of the central bank’s hiking path beyond next year. “The outright inversion could be reflective of the market pricing in some cuts starting in 2020, which may be helping the 5-year tenor outperform slightly,” The spread between December 2018 and December 2019 eurodollar futures -- a measure of how much tightening traders expect next year -- reached 27 basis points Monday, meaning just more than one quarter-point Fed hike. It was last at 22.5 basis points.
A one day bond inversion does not a recession make -- You are going to read a lot about a yield curve inversion in the US Treasury market over the next 24 hours. (As of 5:30 PM eastern time, both the 3 year and 5 year bond yield slightly less interest than the 2 year bond.) Most of the commentary will probably boil down to "WE'RE DOOOMED!!! (in the next 12 to 24 months). Maybe. But consider that, several times, an inversion somewhere along the yield curve has been a signal for the bond market to reverse (see, 1994 and early 1998). Further, consider that the Fed and its economists can understand this matter as well. And if this material should happen to form a segment on "Fox and Friends" tomorrow morning, a Tweetstorm threatening the job of Fed Chairman Powell might ensue. Most importantly, consider that the Fed is an actor. The Fed has agency. The Fed can react to this news and affect its future course, maybe by deciding to pause its assumed rate hike later this month. In short, a one day bond market inversion does not a recession make
Q4 GDP Forecasts -- From Merrill Lynch: Disappointing construction data sliced 0.2pp from our 4Q GDP tracking down to 2.5%, and a tenth off 3Q GDP down to 3.5%. [Dec 7 estimate]. And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 is 2.4 percent on December 7, down from 2.7 percent on December 6. The nowcast of fourth-quarter real final sales of domestic product growth decreased from 2.9 percent to 2.7 percent after this morning’s employment report from the U.S. Bureau of Labor Statistics. The nowcast of the contribution of inventory investment to fourth-quarter real GDP growth decreased from -0.23 percentage points to -0.33 percentage points after the employment report and this morning’s wholesale trade release from the U.S. Census Bureau. [Dec 7 estimate]From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.4% for both 2018:Q4 and 2019:Q1 [Dec 7 estimate] CR Note: These early estimates suggest GDP in the mid 2s for Q4.
Trump On Coming Debt Crisis: I Won’t Be Here When It Blows Up - Since the 2016 presidential campaign, Donald Trump’s aides and advisers have tried to convince him of the importance of tackling the national debt. Sources close to the president say he has repeatedly shrugged it off, implying that he doesn’t have to worry about the money owed to America’s creditors—currently about $21 trillion—because he won’t be around to shoulder the blame when it becomes even more untenable. The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the national debt in the not-too-distant future. In response, Trump noted that the data suggested the debt would reach a critical mass only after his possible second term in office. “Yeah, but I won’t be here,” the president bluntly said, according to a source who was in the room when Trump made this comment during discussions on the debt.
Congress approves short-term spending bill to avert government shutdown (Reuters) - The U.S. Congress on Thursday approved a two-week stopgap spending bill to avert a government shutdown, setting up a potential showdown over President Donald Trump’s proposed border wall later this month. Without action by Congress, funding for several federal agencies, including the Department of Agriculture, State Department and Department of Homeland Security, had been set to expire this week. The stopgap bill extends funding through Dec. 21. Before the stopgap bill expires, the Republican-led Congress is expected to consider a $450 billion bill to fund the departments through the fiscal year that ends next Sept. 30. Trump has demanded $5 billion this year as part of his plan to build a wall on the border with Mexico that Democrats argue would be ineffective at keeping out illegal immigrants and illicit drugs. Instead, Democrats want to continue improving less costly fencing and employing high-tech instruments to detect illegal border crossings. They have agreed to include $1.6 billion for additional border security. “Let me be clear: the $1.6 billion cannot be used to construct any part of President Trump’s 30-foot-tall concrete border wall. It can only be used for fencing, using technology currently deployed at the border, and only where the experts say fencing is appropriate and makes sense,” Senate Minority Leader Chuck Schumer said on Thursday. Trump has threatened to force a partial government shutdown if Congress does not give him the money he wants for the wall.
U.S. to Give Russia Two-Month Deadline Over Nuclear Treaty, Sources Say - The U.S. will give Russia two months to get back in compliance with a 1987 treaty on nuclear weapons before carrying out President Donald Trump’s threat to withdraw from the accord, according to three people familiar with the decision. Secretary of State Michael Pompeo will announce the U.S. plan at a conference in Brussels on Tuesday, according to the three people, who asked not to be identified because the decision isn’t public. It wasn’t immediately clear if the allies will support the specific deadline even as they agree that Russia isn’t complying with the accord. “Russia has violated the Intermediate-Range Nuclear Forces Treaty for many years,” Pompeo said earlier on Tuesday at an event organized by the German Marshall Fund in Brussels. He said he would detail the alleged Russian violations at the NATO meeting later on Tuesday. Pompeo’s effort builds on increasing frustration in Europe over Russian behavior following its firing on Ukrainian ships in the Sea of Azov near Crimea last week, which resulted in the capture of Ukrainian sailors who the U.S. said must be freed. It would also be another sign of the deterioration in Russian relations with the West following Moscow’s interference in the 2016 U.S. presidential election and its poisoning of a former spy with a nerve agent in the U.K. Trump said in October that he would pull out of the Intermediate-Range Nuclear Forces Treaty, claiming Russia has deployed missiles in violation of the accord. National Security Adviser John Bolton later said the INF is an outdated agreement that doesn’t address the rising Chinese military threat. In Europe, however, there’s been less support for abandoning the agreement altogether.. Trump’s announcement in October raised “difficult questions for Europe,” German Foreign Minister Heiko Maas said in a statement at the time. While Russia has failed to resolve allegations of treaty breaches, the U.S. should “reflect on the possible consequences” of a pullout, he added.
US Ultimatum Given to Russia: Comply With Nuclear Treaty in 60 Days or Else — After years of claiming Russia is violating the 1987 Intermediate Nuclear Forces (INF) treaty, Secretary of State Mike Pompeo announced on Tuesday that the US is giving Russia 60 days to comply with the deal.The big obstacle to this is, despite the US making such allegations for several years, and getting NATO to endorse their narrative, Russia has denied ever violating the deal in the first place, and insists the missile in question, the 9m729, is not banned by the treaty.The question is based on the missile’s range, with INF banning everything from 500 km to 5,500 km. Russia has only tested the missile to about 400 km, and it is intended to replace a missile that itself was only 400 km. US officials, however, have speculated that the missile has a much longer range.This makes any deal unlikely, as Russia would not only have to admit the missile has a longer range than it was tested to actually have, but also agree to get rid of the system, which would severely limit their short-range capabilities until they are able to roll out something else that the US would accept. US officials have been keen to pull out of the INF for awhile anyhow, and this ultimatum is mostly meant to serve as a legal pretext to do so. The withdrawal would allow the US to deploy nuclear missiles into Europe.
Yemen Be Damned, Pompeo Doubles Down on US Support for Saudi Arabia — Secretary of State Mike Pompeo doubled down on continued U.S. support for Saudi Arabia to continue its devastating war on Yemen. Pompeo’s to CNN on Saturday come days after the U.S. Senate advanced legislation to bring an end to U.S. involvement in the 3-year war, as a United Nations official warned that “Yemen is on the brink of a major catastrophe,” and as the Wall Street Journal reports on a CIA assessment strongly implicating Saudi Crown Prince Mohammed bin Salman in the killing of journalist Jamal Khashoggi. Speaking to Wolf Blitzer on the sidelines of the G20 summit, Pompeo said the administration was intent on keeping “the strategic relationship with the Kingdom of Saudi Arabia.”Asked by Blitzer about dwindling support within Congress for participation in the war and whether the U.S. would continue to support the kingdom’s bombing campaign of Yemen, Pompeo replied, “The program that we’re involved in today we intend to continue.”The heads of prominent aid humanitarian organizations, however, this week pleaded for a cessation of that “program.” They urged the United States to back up its recent call for a cessation of hostilities with genuine diplomatic pressure, and to halt all military support for the Saudi/UAE coalition in Yemen in order to save millions of lives. It pains us to write these words, but we cannot escape the truth: if the U.S. does not cease its military support for the Saudi/UAE coalition, it too, will bear responsibility for what may be the largest famine in decades. Writing at the Guardian Friday, Mark Weisbrot, co-director of the Center for Economic and Policy Research and the president of Just Foreign Policy, expressed hope that that military support finally has an expiration date thanks to the procedural vote on the War Powers Resolution.
Senate headed for clash over Saudi Arabia -- The Senate is barreling toward a floor brawl over how to respond to Saudi Arabia's role in the slaying of Washington Post journalist Jamal Khashoggi. Senators took a significant step this week advancing a bipartisan resolution to end U.S. support for the Saudi-led military campaign in Yemen, marking a sharp break from President Trump, who has stood by Riyadh and Crown Prince Mohammed bin Salman, even in the face of reports that the prince personally ordered Khashoggi’s death. But now, lawmakers need to figure out what a final bill will look like as they prepare to take a next step of bringing the resolution up for debate — and a potentially raucous floor drama. The war powers fight is uncharted waters for a Senate that has repeatedly rejected attempts to challenge the White House’s war authority. “This is new territory, I mean this hasn’t been done in the past, and I want to do everything I can to ensure that this is handled in a dignified manner,” said Sen. Bob Corker (R-Tenn.), the chairman of the Senate Foreign Relations Committee. First, senators will need to agree to proceed to the resolution — sponsored by Sens. Chris Murphy(D-Conn.), Bernie Sanders (I-Vt.) andMike Lee (R-Utah) — that requires Trump to remove any troops in or “affecting” Yemen within 30 days. But supporters are confident that they’ll easily overcome that procedural hurdle, which requires only a simple majority, after already securing 63 votes to advance it. It’s what comes after that is causing heartburn for advocates of the resolution and leadership alike, who are hoping to get an agreement that would prevent an unwieldy debate that could otherwise derail the bill.
CIA Intercept Reveals Saudi Crown Prince Sent 11 Messages To Head Of Khashoggi Hit Team Hours Before Murder - It has been nearly two months to the day since Jamal Khashoggi walked into the Saudi consulate in Istanbul hoping to retrieve papers needed to marry his Turkish fiance - only to be killed and butchered by a 15-man Saudi murder squad. In the intervening weeks, the Saudis have suffered remarkably little blowback (considering that the uproar elicited by Khashoggi's murder nearly triggered a global diplomatic crisis): a handful of countries who don't sell arms to Saudi Arabia have said they will stop selling arms to Saudi Arabia. Meanwhile, both Canada and the US have balked at similar measures because they would inevitably kill jobs. Clearly concerned about the flagging interest in holding Saudi Crown Prince Mohammed bin Salman accountable for his suspected role in ordering the killing, the CIA has decided to pick up where Turkey left off. Last week, somebody inside the agency leaked a preliminary report to the Washington Post detailing the agency's determition that MbS had ordered the killing. And on Saturday morning, the Wall Street Journal published the latest (illegal) intelligence agency leak when it reported on the contents of intercepts revealing that during the hours after and immediately before the killing, MbS had exchanged 11 messages with Saud al-Qahtani, a close aide to the prince who is believed to have supervised the murder squad. Notably, the WSJ report followed a vote in the Senate earlier this week to open debate on a measure to withdraw US support for Saudi Arabia's proxy war in Yemen (the kingdom's brutal bombing campaigns have reportedly resulted in the deaths of tens of thousands of innocents and created one of the worst humanitarian crises in the world). The Trump Administration has opposed the bill, arguing that it would damage its relationship with a crucial geopolitical ally while also killing jobs in the Military-Industrial Complex. While we wouldn't go as far as to suggest that the CIA is deliberately trying to undermine the administration, the timing of this leak is certainly curious. According to the CIA intercepts, MbS also discussed taking steps to silence Khashoggi if he continued to speak out (with talk of "making arrangements" to lure him somewhere outside Saudi Arabia).
CIA’s Haspel to brief senators on Khashoggi death - CIA Director Gina Haspel will brief Senate leaders on the death of Saudi dissident journalist Jamal Khashoggi, after senators criticized her absence from a briefing last week. Haspel will brief members of the Foreign Relations, Armed Services and Appropriations committees on Tuesday, multiple sources confirmed to The Hill. The news was first reported by The Wall Street Journal. Last week, Defense Secretary James Mattis and Secretary of State Mike Pompeo briefed the whole Senate on U.S.-Saudi relations and the Yemen civil war in an effort to head off a resolution that would end U.S. military support for the Saudis. The briefing, however, backfired for the administration, as senators found the presentation unconvincing and voted 63-37 to advance the resolution. Lawmakers were also upset at Haspel’s absence, as they wanted to hear the CIA’s assessment on the death of Khashoggi directly from her. Democratic senators blamed the White House for her absence, while the CIA denied that anyone told her not to attend.The CIA has reportedly concluded that Saudi Crown Prince Mohammed bin Salman ordered the killing, which happened in October at the Saudi Consulate in Istanbul. But Trump administration officials have publicly pushed back on those reports. After the Senate briefing, Pompeo told reporters that there is no “direct reporting” connecting Crown Prince Mohammed to the killing, while Mattis said there is no “smoking gun.” Haspel’s briefing comes ahead of another expected floor showdown on the Yemen resolution.
GOP senators rip Saudi prince after briefing: 'There's a smoking saw' - Senators emerged from a briefing with CIA Director Gina Haspel blaming Saudi Crown Prince Mohammed bin Salman for the death of U.S.-based journalist Jamal Khashoggi and promising further action. “There’s not a smoking gun, there’s a smoking saw,” Sen. Lindsey Graham (R-S.C.) said, referencing Trump administration comments that there is no “smoking gun” linking the crown prince to the order to kill Khashoggi. “You have to be willfully blind not to come to the conclusion that this was orchestrated and organized by people under the command of MBS and that he was intricately involved in the demise of Mr. Khashoggi,” Graham added, using the crown prince’s initials. Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.), meanwhile, said there was “zero question” Crown Prince Mohammed he had Khashoggi killed. "I have zero question in my mind that the crown prince directed the murder and was kept apprised of the situation all the way through. I have zero question in my mind," said Corker, who is retiring in January. Haspel briefed senators who lead national security-related committees roughly a week after Defense Secretary James Mattis and Secretary of State Mike Pompeo similarly failed to stall Senate action with a briefing on U.S.-Saudi relations and the Yemen civil war. Senators were unconvinced by the administration's arguments and angry at Haspel’s absence last week. They followed last week’s briefing by advancing 63-37 a resolution to end U.S. military support for the Saudis in Yemen. But Haspel didn’t sway lawmakers in the briefing from wanting to take action targeting the crown prince, as well as the Saudi-led military campaign in Yemen. In an apparent shift, Sen. Richard Shelby (R-Ala.), who voted against the resolution last week, wouldn’t rule out supporting it after speaking with Haspel. “All evidence points to that all this leads back to the crown prince,” Shelby said, adding that Khashoggi’s death was “reprehensible conduct.”
Republican senators say “zero question” Saudi prince ordered Khashoggi assassination -- US senators, including leading Republicans otherwise loyal to President Donald Trump, emerged from a closed-door briefing by CIA Director Gina Haspel on Tuesday expressing their strengthened conviction that Saudi Arabia’s crown prince and de facto ruler Mohammed bin Salman was responsible for the October 2 assassination of self-exiled journalist and former regime insider Jamal Khashoggi at the Saudi consulate in Istanbul.Senator Bob Corker, the Tennessee Republican head of the Senate Committee on Foreign Relations, told reporters that if bin Salman were brought before a jury on murder charges, “he would be convicted in 30 minutes.”“I have zero question in my mind that the crown prince directed the murder and was kept appraised of the situation all the way through it,” Corker said.“There’s not a smoking gun, there’s a smoking saw,” Republican Senator Lindsey Graham of South Carolina told the media, referring to the bone saw brought to Istanbul by the 15-member death squad dispatched from Saudi Arabia for the purpose of dismembering Khashoggi’s body.“This just confirmed what I thought all along. This all leads up to the crown prince,” declared Senator Richard Shelby, the Alabama Republican. “It would defy logic” to believe otherwise, he added, noting that members of the prince’s own royal guard were part of the assassination team. The testimony by Haspel, who traveled to Turkey in the wake of the murder and reviewed evidence of the crime, including an audiotape of the brutal murder, came one week after Secretary of State Mike Pompeo and Defense Secretary Gen. James Mattis testified before the Senate. Both insisted that there was no “smoking gun” proving bin Salman’s responsibility and warned that proposed legislation halting US backing for the near-genocidal Saudi-led war against Yemen or any other significant sanctions against Riyadh would undermine US national security.
Rand Paul Rages- The Deep State Is Trying To Run Congress - CIA Director Gina Haspel briefed leaders of multiple Senate committees Tuesday about the October murder of Jamal Khashoggi.While I will not discuss the content of the Haspel briefing, it reinforced the need for a strong response to the murder of Jamal Khashoggi. CIA Director Haspel should brief the full Senate without delay.— Chuck Schumer (@SenSchumer) December 4, 2018 But Senator Rand Paul believes Haspel should share the CIA's findings with all members of Congress. Paul, a member of the Senate Foreign Relations Committee, exclaimed:“To my mind this is the very definition of the deep state..." “The deep state is that the intelligence agencies do things, conclude things, make conclusions but then the elected officials are prevented from knowing about this.” Paul argued that if lawmakers aren't allowed to have access to the intelligence community's conclusions, then they can't provide oversight. “If we aren’t told about this and I’m not allowed to know about these conclusions, then I can’t have oversight,” he said.“And so then state grows, the intelligence, the deep state grows and has more and more power.” “I’ve read in the media that the CIA has said with high confidence that the crown prince was involved with killing Khashoggi,” Paul continued. “I have not seen that intelligence nor have I even seen the conclusions. And today there’s yet another briefing and I’m being excluded. So really, this is the deep state at work … that your representatives don’t know what is going on in the intelligence agencies.”.
Meet the Senators Who Took Saudi Money - In the wake of the brutal murder of Jamal Khashoggi, the Senate voted last week to advance a resolution ending U.S. involvement in the Saudi-led coalition’s war in Yemen. While the measure passed, opposition from the Saudi lobby was fierce and strongly reflected in the vote. In fact, of the 37 senators who voted against the measure, 30 have received campaign contributions from lobbying firms working for the Saudis. The top recipient of Saudi lobbying firm contributions among senators who voted against the measure was Dean Heller, Republican of Nevada, who received $27,150. Heller’s vote against the resolution on Wednesday was notable given that he had previously voted against an arms sale to Saudi Arabia and was a co-sponsor of legislation that would have prohibited the U.S. military from refueling Saudi warplanes. Heller’s haul from Saudi lobbyists was closely followed by Roger Wicker, Ted Cruz, and Roy Blunt, Republicans all, who have received $25,550, $23,000, and $19,250, respectively, from Saudi lobbyists over the past two years. On the campaign trail, Cruz called the possibility of the Saudi government ordering the murder of Jamal Khashoggi “troubling” and said “there should be real consequences for that.” His vote Wednesday was to block one of those consequences. Blunt, unlike Cruz, has been largely uncritical of the Saudis’ role in Khashoggi’s death. Recently, he rejected the Central Intelligence Agency’s reportedly “high confidence” assessment that Saudi Crown Prince Mohammed bin Salman had ordered the killing of Khashoggi, saying, “we don’t quite have all the information we’d like to have.” Several of the senators who voted against the resolution received contributions from lobbyists on the same day they or their offices were contacted on behalf of the Saudis: Mike Crapo, John Boozman, Richard Burr, and Tim Scott.
Street at Saudi Arabia’s US Embassy May Soon Be Renamed ‘Jamal Khashoggi Way’ — Local officials in a Washington, DC, neighbourhood have unanimously voted to rename a street outside Saudi Arabia’s embassy in honour of slain Saudi journalist Jamal Khashoggi.The measure now goes to Washington’s city council, which will decide on the advisory commission’s measure to rename a stretch of road going past the expansive embassy building in the upscale Foggy Bottom neighbourhood as “Jamal Khashoggi Way”.A city council vote is expected to take place several months from now and is subject to Congressional approval.Khashoggi, a US resident, was murdered in the Saudi consulate in Istanbul in early October.Saudi officials have repeatedly denied that Crown Prince Mohammed bin Salman had any knowledge of the plan to murder Khashoggi or cover up the crime, but human rights groups, journalists, UN experts and others have pointed the finger at bin Salman, also known as MBS, saying it is impossible he was not involved.Turkish media reported last week that the CIA is in possession of a recording of a phone call in which MBS gave instructions to “silence Jamal Khashoggi as soon as possible”. Top officials from the administration of President Donald Trump have said they have seen no direct evidence linking the murder to MBS, but the CIA reportedly has concluded he was involved.
Why Bernie’s Yemen Bill Won’t Actually End US Role in War — Last week, many celebrated the advancement of Senate Joint Resolution (SJR) 54, which had been introduced by Senator Bernie Sanders (I-VT), as a sign that the U.S. Congress was finally willing to act to reduce the U.S.’ culpability for the situation in Yemen, currently the world’s worst humanitarian crisis. The bill, which will be voted on by the Senate this week, has been praised by many within the anti-war movement for its bid to “end” U.S. military involvement in Yemen. Passage of the bill would, however, do no such thing. Bit by bit we will end this bloody war in #Yemen. Much of the media coverage of the bill has noted that the resolution invokes the 1973 War Powers Resolution, which prohibits the president from deploying U.S. troops into armed conflicts without congressional approval. Though that resolution has been ignored many times since its passage, particularly since the War on Terror began in 2001, SJR 54 has been promoted as a “progressive” effort to bring the U.S.’ military adventurism to heel at a time when Saudi Arabia — one of the two countries leading the war against Yemen – is under increased scrutiny.Yet, the text of the bill itself reveals that SJR 54 invokes the War Powers Resolution in name only. Indeed, while the bill claims to be aimed at achieving “the removal of United State Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress,” it contains a major loophole that will allow the majority of U.S. troops in Yemen – if not all – to stay. As the bill states, it will require the president to remove troops “except United States Armed Forces engaged in operations directed at al Qaeda or associated forces.” Notably though, the only U.S. troops “on the ground” in Yemen that are involved in “hostilities” (i.e., combat operations) are those that are allegedly involved in operations targeting Al Qaeda — operations that the U.S. frequently conducts jointly with the countries waging war against western Yemen, such as the United Arab Emirates.
Trump to announce Nauert as new UN ambassador Friday: report - President Trump will reportedly announce Friday that he has selected State Department spokeswoman Heather Nauert to succeed Nikki Haley as the the U.S. ambassador to the United Nations.Fox News reports that Trump will make the announcement Friday morning in a tweet. Nauert was reported last month to have been offered the job, but no official announcement has yet been made about Haley's replacement.Nauert's appointment to the top ambassadorship would follow Haley's surprise resignation in October.The former South Carolina governor said at the time that she had no plans to run for political office in 2020.“It’s been eight years of intense time and I’m a big believer in term limits,” Haley said at the time. “You have to be selfless enough to know when you step aside and allow someone else to do the job.”"I will not be running for the office in 2020. I will be campaigning for Trump," she added.Nauert, previously a reporter and anchor at Fox News, was long rumored to be on Trump's shortlist to succeed Haley, a list which also included former deputy national security adviser Dina Powell. Powell dropped out of consideration for the role in October. Ivanka Trump, the president's daughter and White House adviser, was also touted by Trump as an "incredible" choice for the position, though Trump also said that he would be criticized for nepotism if Ivanka was selected.
Tariffs on Chinese rare-earth minerals create a sticky problem for US competitors - A hedge fund recently bought Mountain Pass out of bankruptcy after several companies attempted to turn a profit from it. Six months later, the WSJ wrote, Trump announced tariffs that should have helped the mine supply more domestic rare-earths at a higher price. However, most of the world's rare-earth processing facilities are in China, which also produces more than 90 percent of the world's rare-earth minerals. To develop its metals as cheaply as possible, Mountain Pass has first been shipping its ore to China, where the processed metals are then sold on the world market to makers of smartphones, laptops, and magnets that go into electric car motors and giant wind turbines.But in September, President Trump placed a 25 percent tariff on Chinese goods entering the US, and China reacted by placing a tariff on US goods entering China. That means Mountain Pass is paying much more to have its ore made into useable products.Now, the WSJ writes, the tariffs are eating into Mountain Pass' profit margins. "And that eats into the money Mountain Pass would be reinvesting into upgrading the facility so that it can actually process the rare earths itself, the only way to lessen dependence on the Chinese processors."For years, China's dominance in rare-earth has been concerning for countries like Japan and the US, whose economies depend on products that depend on rare-earths. In 2014, China exercised its market power and restricted rare-earths trade, sending prices skyrocketing. Australia has recently been edging into the rare-earths market, with some significant finds suggesting that it might play a bigger role in the years to come. But until then, China holds the keys to minerals that make much of the technology we use today possible.
Gen. Dunford Slams Google's Inexplicable Deepened Ties With China As It Cuts Pentagon Projects - "We are the good guys" — America's top general said this week while arguing Google should work directly with the Pentagon instead of making controversial inroads into China, bringing the US tech giant into increasing closeness with Beijing. Marine General Joseph Dunford, chairman of the Joint Chiefs of Staff, said during a speaking engagement Thursday that it was "inexplicable" that Google would seek out business in a country with vastly less freedoms than the United States. Dunford argued: We are the good guys and it’s inexplicable to me that we would make compromises in order to advance our business interests in China where we know that freedoms are restrained, where we know that China will take intellectual property from companies.Gen. Dunford's words come at a time when Google has actually pulled out of prior Defense Department projects, including failing to renew a contract which helps the military analyze aerial drone imagery. The defense program, called Project Maven, set off controversy inside Google's ranks as employees refused to develop programs related to warfare and battlefield applications, citing ethical concerns. Over 3100 employees had signed a petition demanding that Google leave the Pentagon partnership, which further included a number of employees resigning over the issue. Google then announced it would not continue Project Maven in June in an attempt to quell the internal dissent over the deal.Separately, Google announced earlier this year that it would not bid on a a $10 billion cloud computing contract with the DoD, citing the company's "new ethical guidelines" which bans weapons projects and provides ethical li mitations for work on military A.I. And yet Google continues to work on internet tools that would allow China's Communist government to censor and crackdown on its citizens' online speech even while finding Pentagon related contracts too controversial.
Donald Trump, Xi Jinping agree to ceasefire in tariff war after G20 dinner date, as US goes it alone on climate change - The White House says US President Donald Trump and Chinese President Xi Jinping have reached a 90-day ceasefire agreement on new economic tariffs to allow for continuing trade negotiations. The two met for dinner in Buenos Aires, Argentina at the end of the G20 meeting. White House press secretary Sarah Sanders said Mr Trump had agreed not to raise US tariffs on Chinese imports as scheduled on January 1. "China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries," Ms Sanders said. She added that the two countries would "immediately begin negotiations on structural changes" around intellectual property protections, cybertheft and other US priorities. Chinese state television reported "no additional tariffs will be imposed after January 1, and negotiations between the two sides will continue". "This was an amazing and productive meeting with unlimited possibilities for both the United States and China," Mr Trump said in a statement. "It is my great honour to be working with President Xi." Tariffs on $US200 billion in Chinese goods were set to rise from 10 per cent to 25 per cent in the new year, and Mr Trump was considering duties on even more Chinese goods. The White House said Mr Trump would impose the tariffs if the two sides did not reach agreement within 90 days.
China, U.S. agree to avoid escalation of trade restrictive measures - (Xinhua) -- China and the United States on Saturday reached consensus on economic and trade issues and agreed to avoid escalation of trade restrictive measures.Chinese President Xi Jinping and his U.S. counterpart, Donald Trump, held a meeting in the Argentine capital, Buenos Aires, on Saturday evening.After the meeting, officials in charge of the Chinese economic team told Xinhua that the two sides held discussions on China-U.S. economic and trade issues and reached consensus.The two heads of state spoke highly of positive and effective consultations held recently by the economic and trade teams of both sides.The two sides recognized that their healthy and stable economic and trade relations conform to common interests of the two countries and the whole world.The two sides decided to avoid escalation of trade restrictive measures, without further raising existing tariffs imposed on each other and slapping new additional tariffs on other products.The two sides agreed to take immediate efforts to address issues of mutual concern based on mutual respect, equality and mutual benefit.As required by the 19th National Congress of the Communist Party of China, Beijing is committed to deepening reform and furthering opening-up. In the process, some economic and trade issues that are of Washington's concern will be solved. Meanwhile, the U.S. side will actively address China's concerns on economic and trade issues. Xi and Trump have instructed the economic and trade teams of both sides to intensify consultation to reach an agreement, so as to lift the additional tariffs imposed this year and bring the bilateral economic and trade relations back to a normal track as soon as possible with a win-win outcome.
‘A big leap forward’: Donald Trump praises talks with Xi Jinping as China readies for trade mission - China and the United States took a big step forward in relations to reach a trade war truce, US President Donald Trump said on Monday, as China prepared to send a big delegation to America for further talks. In a series of tweets, Trump said his meeting with Chinese President Xi Jinping in Buenos Aires on the weekend was “an extraordinary one”. “Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!” Trump said in the tweet, adding that he and Xi had “a very strong and personal relationship”. “He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations. A solution for North Korea is a great thing for China and ALL!” Trump also said US farmers would benefit from China’s agreement to buy more American agricultural products, and Beijing had agreed to “reduce and remove” tariffs on US cars. Beijing raised tariffs on American cars to 40 per cent over the summer as the tit-for-tat trade war escalated. But the Chinese ministries of foreign affairs, commerce and finance offered no comment on whether China had agreed to cut the duties. Trump’s tweets followed an agreement between the US and China on the weekend to hold off on imposing new tariffs for 90 days. A source familiar with the trade talks said China was expected to send about 30 officials to Washington for discussions next but it was not known who would be in the delegation. US news outlet NPR also reported that White House adviser Peter Navarro said US Trade Representative Robert Lighthizer would be in charge of negotiations with China over the next 90 days.
The art of the G-20, by Donald Trump - After two years of pugnacious foreign relations, the president is finding new ways to claim dealmaking prowess in an international arena. President Donald Trump said his trade agreement with China was “one of the largest deals ever made.” He dubbed his new accord with Canada and Mexico the “most significant, modern and balanced trade agreement in history.” And he insisted that the world leaders he’s lambasted on the world stage had become great friends. As he crisscrossed Buenos Aires, posing for photos with dignitaries and boasting about his accomplishments, Trump left behind a trail of exaggerations meant to paper over the fractious first half of his term and rebrand himself as a globe-trotting statesman. ..It’s the Art of the G-20, by Donald Trump. The 45th president is writing his own rulebook on how to claim credit and respect on an international stage where many leaders have looked down on him for years. But just as his famous 1987 book counseled, Trump’s global deal-making was as much about style as substance, with grandiose talk the most important ingredient of all. The president arrived back in Washington on Sunday feeling triumphant, believing his latest international trip to be a resounding success. During his overnight flight on Air Force One, Trump seemed vindicated after dealing with a long buildup of pressure to the summit in Argentina. “It’s an incredible deal,” he told reporters of his agreement with China to temporarily pause new tariffs. “It goes down, certainly — if it happens, it goes down as one of the largest deals ever made.”
China has agreed only to import more of what it doesn't want to make at home --China and the US aren’t fighting over what China exports now — assembled electronics, toys, socks, furniture. They’re fighting over what China wants to make at home in the future. China has a plan to become self sufficient in electric cars, aerospace, bio-medicine and farming equipment. These things are hard to make. They require decades to figure out, and a well-educated, productive, high-wage workforce. Xi Jinping didn’t compromise on this goal in Argentina. It’s hard to see that he ever will.Mr Xi met with Donald Trump over Malbec and grilled sirloin at the G20 summit in Buenos Aires this weekend. He agreed to talk for three months about intellectual property transfers and state support of industry. As an immediate good-faith gesture, he will also punish Fentanyl exporters more severely. Also, according to the White House:China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately.First, China is explicitly conceding that it's a command economy. In an open market, China's companies and hog farmers should buy oil and soyabeans from wherever they're cheapest on the global market. Mr Xi shouldn't have the power to compel them to buy from Texas and Iowa. That he can is in fact the definition of the problem the world's free-market economies have with China. The US and China didn't remove any structural or tariff-based market distortions in Buenos Aires. Rather, Mr Trump jawboned Mr Xi to command some changes at home. That's diplomacy, but it's not really commerce.Second, China has explicitly agreed to import more of exactly those things that it doesn't care to make itself, now or in the future. Below, China's top ten imports by value from the US. The most recent full-year data comes from 2017, before any tariffs: China imports US products that are hard to make and require skilled workers and years of capital investment: airplanes, cars and industrial machines. It also imports commodities: soyabeans, crude oil, plastic materials. In Buenos Aires, according to the White House, Xi Jinping agreed to increase imports only of commodities. These are the imports that China doesn't care about, the imports that don't threaten its plans. The concession costs Xi nothing.
Mnuchin Says China Agrees to Lower Auto Tariffs; Beijing Silent - Treasury Secretary Steven Mnuchin said China has agreed to eliminate tariffs on imported automobiles but declined to give details after PresidentDonald Trump jolted car stocks by announcing a deal had been reached. Trump said in a tweet late Sunday that China agreed to “reduce and remove” tariffs on American-made vehicles, raising more questions about the outcome of his meeting with counterpart Xi Jinping during the Group of 20 meeting in Argentina this weekend.“The first part was to reduce the surcharge, but yes there have been specific discussions on where auto tariffs will come down to, but I’m not prepared to talk about the specifics,” Mnuchin later told reporters outside the White House.Larry Kudlow, Trump’s top White House economic adviser, later told reporters that the Chinese are “going to roll back their auto tariffs,” adding “That’s got to be part of the deal.”Mnuchin said the two leaders “exchanged specifics on 142 different structural items” and that those included protecting intellectual property, eliminating forced joint ventures and ensuring that the Chinese don’t depreciate their currency and harm U.S. workers. Trump gave no other details in his tweet, which came shortly after he agreed with Xi to a truce in the trade war during a meeting at the G-20. It’s unclear whether China would reduce its car tariffs immediately or as a result of a broader deal. In a briefing in Beijing a few hours after the tweet, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.
The China trade reality show - For at least a month, there has been no doubt that Presidents Donald Trump and Xi Jinping would agree to agree at the Buenos Aires summit. The threats, remonstrations and hints of high officials were for the most part scripted. Buenos Aires was less negotiation than reality show. When the dust settles, America and China will have a deal that allows Trump to claim victory and allows China to become the world’s dominant economy. Two things changed to bring America and China back to negotiations. First, Trump learned that he was in the position of the Lord High Executioner in Gilbert and Sullivan’s “Mikado,” that is, “he can’t cut off another’s head until he’s cut his own off.” Trade war with China contributed to the correction in the S&P 500, which lost 10% peak-to-trough through last Wednesday. It also produced so much uncertainty about the future of supply chains that capital investment plunged around the world, as I reported November 30. If Trump made good on his threat to impose tariffs on all Chinese imports, including most of American purchases of consumer electronics, the impact on household budgets would have been severe. Trump wants a second term, and trade war risked a recession just before the 2020 elections. Second, China concluded that Trump wants to look like a winner, and decided to give him what he wanted. Senior advisers to the Chinese government explained this to me last October. The new Chinese consensus holds that the world’s largest country can afford to be patient, concentrate on raising productivity and per capita income, and forego bragging rights about its growing economic power. What the US and China actually will negotiate during the next 90 days will include the following:
- 1) More US exports to China, especially LNG. China might invest in LNG facilities on the US West Coast to increase capacity.
- 2) An intellectual property agreement dictated by the United States. China will crack down on technology theft, at least where official institutions are concerned, and leave Apple and Qualcomm to sue each other over patent infringement.
- 3) Further opening of the Chinese market to US trade and investment.
- 4) The abandonment of the “Made in China 2025” slogan, although the same investments will proceed with less fanfare.
Trump’s Advisers Struggle to Explain Deal He Says He Cut With Xi - President Donald Trump’s advisers are scrambling to explain a trade deal he claimed he’d struck with China to reduce tariffs on U.S. cars exported to the country -- an agreement that doesn’t exist on paper and still hasn’t been confirmed in Beijing. In the day after Trump announced the deal in a two-sentence Twitter post, the White House provided no additional information. Meanwhile, China hasn’t formulated its response because bureaucrats are awaiting the return home of President Xi Jinping, according to three officials who were briefed but declined to be named as the matter isn’t public. Questioned about the agreement on Monday, Treasury Secretary Steven Mnuchin and Trump’s top economic adviser, Larry Kudlow, dialed back expectations and added qualifiers. Xi is scheduled to visit Portugal on Tuesday and Wednesday before heading back to Beijing. Monday’s global stock market rally showed signs of fading on Tuesday as uncertainty over the status of the deal set in. Still, the onshore yuan extended its biggest advance in more than two years. “I’ll call them ‘commitments’ at this point, which are -- commitments are not necessarily a trade deal, but it’s stuff that they’re going to look at and presumably implement,” Kudlow told reporters at an official White House briefing on Monday that followed TV interviews and informal briefings by him and Mnuchin earlier in the day. The apparent move on auto tariffs was part of a broader trade truce struck by Trump and the Chinese president during a dinner in Buenos Aires on Saturday night. As part of that the U.S. said it had agreed to hold off on raising tariffs Jan. 1 while negotiations took place. Kudlow initially said that the Chinese had 90 days from Jan. 1 to come up with "structural changes" regarding intellectual property protections, forced technology transfer and other issues. The White House later corrected him to say that the 90 days actually began on Dec. 1, Saturday. Trump’s tweet, which moved stocks of automobile companies across the globe, followed the dinner at the Group of 20 summit in Argentina. There, all sides agree, the American president consented to postpone an increase in tariffs on Chinese imports to 25 percent from 10 percent, which was scheduled to take effect Jan. 1, in exchange for negotiations on broader economic disputes.
Mystery Of Chinese Auto Tariffs Deepens As Kudlow, Mnuchin Only Add To Confusion - One of the catalysts bolstering the overnight rally, which sent auto stocks surging both in the US and across the Atlantic, was a late night tweet by Donald Trump according to which "China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%" without giving any further details.This however prompted even more questions about the outcome of his meeting with counterpart Xi Jinping as this was the first time that this aspect of the US-China trade agreement had been unveiled.On Monday morning, Treasury Secretary Steven Mnuchin confirmed Trump's tweet, saying that China has agreed to eliminate tariffs on imported automobiles but declined to give details."The first part was to reduce the surcharge, but yes there have been specific discussions on where auto tariffs will come down to, but I’m not prepared to talk about the specifics," Mnuchin told reporters outside the White House, leaving the mystery intact.A little later, Trump's chief economic advisor, Larry Kudlow, told reporters that the Chinese are “going to roll back their auto tariffs,” adding “that’s got to be part of the deal" talking back Trump's definitive assessment that China had agreed to "reduce and remove" (which is it?) auto tariffs.Speaking later, Kudlow added some more confusion when he said that he "assumes" China will put car tariffs on the table right away, a statement that certainly does not imply China had "agreed" to anything. Finally, confirming that there was - in fact - no agreement, speaking to NPR earlier today, Peter Navarro refused to confirm that China had cut auto tariffs, instead saying only that that topic "certainly came up" in Buenos Aires. Meanwhile, from the Chinese side, there was little mention of car tariffs being part of a deal. In fact, there was no mention at all: in a briefing in Beijing a few hours after the tweet, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.
US and China put divergent spin on outcome of trade talks - Stock markets around the world rose on Monday following the temporary ceasefire in the US-China trade war announced after the G20 summit meeting over the weekend, with Wall Street’s Dow index finishing up almost 300 points. However, the phrase “fog of war” comes to mind upon an examination of the statements by the two sides on the outcome of the talks between President Trump and Chinese President Xi Jinping. No official statement was signed, and the differences in the accounts of what took place and what was agreed give the appearance that the two leaders were at different meetings. Both sides claimed progress had been made in the talks, described as “highly successful” in the US version and “very successful” in the Chinese account. But after that they diverge considerably, as, in absence of a statement of record, each side puts its own spin on the outcome. The most important difference centres on the key demand by Washington that China make far-reaching “structural” changes to its economy in the area of high-tech development, which the US regards as a threat to its dominant economic position. The Chinese statement made no mention of what the US calls “structural” changes or the raising of the tariff rate after 90 days if an agreement cannot be reached on this issue. It said only that both sides had reached an agreement to “step up negotiations toward the removal of all additional tariffs and reach a concrete agreement that would result in win-win results.” There were other divergences. The US statement said China “will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance,” and that China had agreed to “start purchasing agricultural product from our farmers immediately.” The Chinese statement said only that China would import more US goods. There was also a difference on two key political issues. The Chinese statement said Xi had reiterated China’s stance on the issue of Taiwan and “the US side pledged to continue to adhere to the one-China policy.” This was not mentioned in the US account. According to the Chinese statement, Trump had said the US “welcomes Chinese students to study in his country.” But this was not mentioned in the US version. This issue is significant because of a growing campaign in the US to brand Chinese students and researchers, especially in high-tech areas, as spies for the Chinese government. The Chinese statement also included a sentence that points to a major obstacle in the way of any lasting agreement. It said that a “concrete agreement featuring mutually beneficial and win-win results is the foundation of any positive moves from the Chinese side directed towards the US side.”
Goldman Pours Cold Water On Trade War Truce- “The Odds Of A Comprehensive Deal In 3 Months Are 20%” - Heading into this weekend's historic Trump-Xi dinner date, Goldman was skeptical, stating that it was "too soon for a deal" and while it said the odds of a truce were just under 40%, it gave better than even odds of further escalation stating that "it is slightly more likely that the talks end with an optimistic tone but that there is no immediate commitment to delay the step-up in the tariff rate to 25%." Goldman did hedge, however, saying that "we view this as a reasonably close call." So what does Goldman think happens next? Perhaps not surprisingly, the bank retains its overall pessimism and in its post-mortem writes that "this outcome is closest to the “pause” scenario we outlined in recent comments although the length of the pause is fairly short" and notes that while "the result shows the willingness of the two sides to reach a deal" Goldman still thinks that "finding a mutually agreeable compromise that leads to a comprehensive rollback of tariffs will be challenging." As part of its hot take, Goldman lists the tentative agreements that were reached on a "few less controversial issues" including:
- Chinese purchases of US products. The US press release stated “China is to purchase a very substantial amount of agricultural, industrial and energy products” from the US. The White House appears to expect purchases of agricultural products to start immediately. No quantity or specific commodities were mentioned, but purchases are likely to involve more meat, especially pork, products, given there has been an ongoing swine flu outbreak in China which led to the slaughtering of large amount of pigs and higher demand for alternative protein sources. Soybean purchases also seem likely, as they have been among the most politically important aspects of China’s retaliatory tariffs on US exports. This could also signal a partial unwinding of China’s retaliatory tariffs, which targeted agricultural products in earlier rounds.
- China will make fentanyl a controlled substance. China’s drug control is concentrated in traditional substances and awareness of use of such substances as drugs among the general public and officials is low. Traders have been arbitraging this regulatory gap and exporting this substance to the US. This is not viewed as a big issue in China and given the US focus it is easy to understand that President Xi agreed make this move.
- The US press release quoted President Xi as saying that, should the Qualcomm NXP merger request be presented to him, he is open to approving it. Official Chinese media reports did not mention this issue.
- Reporting from Xinhua suggests that the US agreed to continue to welcome Chinese students in the US. This comes following recent reporting in the US media that the White House could soon announce new restrictions. The US statement does not mention this. Xinhua also states that the US has pledged to continue to respect the “One China” policy regarding Taiwan as part of this understanding, though the US statement does not mention this.
That said, Goldman echoes our own take from Sunday, specifying that there appears to have been no concrete progress on the other important issues of market access, IPR protection, cyber attacks, and forced technology transfer (the latter two US concerns have always been denied by Chinese policymakers) which are left for working level officials to work out in the next 90 days. So, as Goldman's political analyst Alec Phillips summarizes, "the actual amount of concrete progress made at this meeting appears to have been quite limited, as expected."
China vows quick trade deal as Trump sends mixed signals - US President Donald Trump sowed confusion on Tuesday over the trade-truce with China, as he said negotiations could extend beyond an agreed 90-day timeframe. The three-month period halted the addition of new tariffs by both countries and was aimed at resolving the ongoing trade dispute. Trump and his Chinese counterpart Xi Jingping agreed to the truce on the sidelines of the G20 summit in Argentina.Trump took to Twitter to discuss the talks, first expressing positive feelings and later leveling threats."President Xi and I want this deal to happen, and it probably will," Trump tweeted. "But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so," he added.China, on the other hand, has kept quiet on the details since the meeting in Argentina, but released an optimistic statement on Wednesday.The Chinese Commerce Ministry said Beijing would seek to quickly implement specific issues already agreed upon, as both sides "actively promote the work of negotiations within 90 days in accordance with a clear timetable and road map.""We are confident in implementation," the Commerce ministry statement read, calling the latest bilateral talks "very successful." US officials have struggled to provide concrete details of what the two countries agreed on at the dinner between Trump and Xi. The White House has alleged that China pledged to purchase a "very substantial" amount of agricultural, energy, industrial and other products from the US, to help narrow the current trade deficit. Additionally, China was said to be beginning to buy products from US farmers "immediately." Beijing, however, has not yet confirmed what, if any, concessions it has made to the Trump administration.
The Trump-Xi Truce Questions That Are Leaving Markets Flummoxed - President Donald Trump’s dinner with Chinese leader Xi Jinping yielded acease-fire in the trade war between the world’s two biggest economies, though the details are proving less than satisfying to those hungering for a lasting truce. Global stocks slumped Tuesday as investors grew skeptical that the U.S. and China made a meaningful breakthrough Saturday. Trump administration officials struggled to explain the deal, while Beijing has yet to confirm the terms. “It remains unclear for the market whether the trade war will escalate or deescalate from here.” Here are some of the unanswered questions from the agreement:
- What exactly will China buy? It’s not clear. In its statement announcing the deal, the White House said China agreed to purchase a “not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product,” and will start buying “agricultural product” from American farmers immediately. Treasury Secretary Steven Mnuchin, on Fox Business Network Tuesday, put China’s trade commitments at $1.2 trillion, but said they need to be put “on paper” But the Chinese statement on this weekend’s meeting only said Beijing agreed to buy more U.S. goods. Even if that happens, there’s no guarantee it would reduce the $336-billion U.S. trade deficit with the Asian nation, as Trump hopes to do.
- What ‘structural changes’ is China willing to make? The two sides have given themselves 90 days to negotiate “structural changes” in the way China handles technology transfer, intellectual-property protection, cyber-theft and other issues. That’s a narrow window in which to solve some of their thorniest differences. The U.S. alleges China forces American companies to cough up sensitive technologies and steals IP in order to modernize its economy. Trump officials are putting pressure on Beijing to tone down its ambitions to lead in emerging industries such as artificial intelligence, a compromise for which Xi has shown no appetite. White House economic adviser Larry Kudlow said Monday the U.S. and China are “pretty close" to an agreement on stopping IP theft, though he didn’t give any details on the progress.
- What are the next steps in the talks? According to Trump, the 90-day clock started ticking following his “wonderful and very warm dinner” with Xi. Even before the dinner, there were preparations under way for Chinese Vice Premier Liu He to lead a follow-up round of negotiations, possibly this month in Washington. The U.S. point man will be Trade Representative Robert Lighthizer. Lighthizer is a longstanding critic of China, which he argues hasn’t delivered on the pro-market reforms it promised when it joined the World Trade Organization in 2001. But he has shown a pragmatic streak, striking deals with South Korea as well as Mexico and Canada that were less restrictive than business leaders feared.
Yuan could become next battleground for Trump-Xi - The spin-meisters around Donald Trump and Xi Jinping are still speaking different languages about trade. Listening to Larry Kudlow, Trump’s top economic advisor, you get the impression détente with Beijing is a done deal, whereas US Treasury Secretary Steve Mnuchin gives out the message that the process is just beginning. Given the uncertainty, it’s best to focus on what may decide whether the ceasefire is real or a mere lull in a broader trade war: the yuan. Monday, the first trading day since Buenos Aires, saw the biggest one-day jump in the yuan since early 2016. That must be music to the ears of a protectionist US leader who has long claimed Beijing’s exchange-rate policies are “killing us.” Can Trump’s post-Argentina high be sustained? It’s doubtful, given events on the ground in China. Thanks largely to Trump’s tariffs on $250 billion of Chinese goods and threats of more to come, exports, industrial production, purchasing manager’s orders and fixed-asset investment are experiencing downshifts. “China faces a Faustian choice between growth or deleveraging,” Standard & Poor’s argues. “Planned stimulus to boost output and business sentiment in China could undermine the country’s deleveraging push.” That, S&P concluded, “leaves policymakers with a tough choice between missing targets on growth or on reducing financial risks.” The toughest choice of all, though, may be taking a sliding exchange rate off the table. Here, too, Xi faces a test of his 2013 pledge to let market forces play a “decisive role” in China. If not for his boss, free-market folks like Kudlow would surely counsel at laissez-faire approach. Traders, after all, have every reason to look at China’s debt-heavy, highly imbalanced and slowing economy and sell yuan. Yet two problems complicate letting markets drive the yuan lower. One, default risk. A falling yuan makes offshore debt payments harder to make. Nomura warned last month that the amount of dollar-denominated debt that mainland companies have outstanding has more than doubled since 2015. At the end of the third quarter, Nomura estimates, China Inc’s corporate dollar debt hit $751 billion. Two, Trump’s wrath. Nothing would get Trump to raise the quantity of Chinese goods he’s targeting to $500 billion faster than a falling yuan. Trump doesn’t grasp the mechanics of trade. He believes a deficit means Xi’s government is stealing from American workers. Nor does he understand that currencies generally are a price based on economic fundamentals.
Huawei CFO, Daughter of Founder and Possible Heir Apparent, Arrested in Canada on a US Extradition Request on Charges of Transfer of US Technology to Iran - Yves Smith - The arrest of of Huawei CFO Wanzhou Meng on December 1 in Vancouver on a US extradition request is a major geopolitical and news event. Reuters reports Meng was intercepted while changing flights. So much for Xi and Trump trying to a reset so as to prevent the imposition of US tariffs on Chinese goods. Mr. Market is not happy at all. S&P futures are down 1.4% as of this writing. As an aside, it’s odd that word of the arrest has gotten out only now. It took place the last day of the G20 summit. Was actual or US anticipated wrangling over the arrest one of the reasons for the apparent confusion over what Xi and Trump had agreed? Meng has a bail hearing set for Friday. We are in the “nobody knows much” phase of this story, and are likely to remain there for a while, although the Chinese government is having hissy fits over the arrest. The US has been investigating Huawei since 2016 over suspected transfers of US technology to Iran in violation of US sanctions. Bloomberg reports that the Department of Justice launched a new probe in April on whether Huawei had been selling equipment to Iran in violation of US sanctions. The fact that Canada, which is not on the best of terms with the Trump Administration and where there is no political upside to playing ball, arrested Meng and extradited her suggests that there is some meat to the allegations. As readers likely know well, the US has been trying to restrict Huawei sales in the US and Western countries, particularly of its smartphones and routers alleging that they have backdoors that allow for data to be passed to the Chinese government. While entirely plausible, this also smacks of the pot calling the kettle black. From the Financial Times: US telecoms networks are banned from using Huawei equipment. Australia and New Zealand — members of the Five Eyes intelligence sharing network with the US, UK and Canada — have blocked Huawei and other Chinese suppliers on security grounds.. Huawei said Ms Meng — also known as Sabrina Meng — was detained by Canadian authorities on behalf of the US, which sought her extradition over “unspecified charges” in the Eastern District of New York. The arrest took place shortly on the heels of intelligence service noisemaking about Huawei. Again from the Financial Times: David Vigneault, head of the Canadian Security Intelligence Service, warned that his agency had seen a “trend of state-sponsored espionage” targeting Canada’s advanced technology, including 5G networks.
How the Arrest of a High-Profile Huawei Executive Could Upend President Trump’s Truce with China—On the same day Donald Trump and Xi Jinping struck a trade war truce in Argentina, some 7,000 miles away Canadian authorities made an arrest that now threatens to make the U.S.-China conflict much worse.The U.S. is seeking the extradition of Wanzhou Meng, chief financial officer of Huawei Technologies Co., after convincing Canada to arrest her on Dec. 1. Canada confirmed she was in custody shortly after the Globe and Mail reported she had been arrested in connection with violating sanctions against Iran.China promptly reacted with outrage after the news broke, demanding that both countries move to free Meng. Later, the foreign ministry said it was waiting for details on why she was arrested, and said trade talks should continue.It’s hard to overstate the significance of her arrest in Beijing: Meng is the daughter of the founder of Huawei, a national champion at the forefront of Xi’s efforts for China to be self-sufficient in strategic technologies. While the U.S. routinely asks allies to extradite drug lords, arms dealers and other criminals, arresting a major Chinese executive like this is rare — if not unprecedented. “The timing and manner of this is shocking,” Andrew Gilholm, director of North Asia analysis at Control Risks Group, said by phone. “It’s not often the phrase OMG appears in our internal email discussions. ” Right now it’s unclear what role Trump played in Meng’s arrest, or if he will intervene at some point. The U.S. leader has spent the past few days seeking to convince the world — and skeptical equity investors — that China has agreed to major concessions, including reducing or removing tariffs on U.S. cars. Stocks fell across Asia on Thursday.
Trump Reportedly Unaware Of Huawei Extradition Request Before Xi Dinner Even As Trudeau Knew - As questions swirl over who knew what, when before, during and after the historic Trump-Xi dinner, we previously learned that National Security Advisor John Bolton revealed that he knew in advance that Canadian police were preparing to arrest Huawei CFO Wanzhou Meng, meaning that Bolton knew that Meng was being taken into custody when he sat down alongside President Trump for Saturday's dinner trade talks with Chinese President Xi Jinping. The timing is important of course, because if the US knew in ahead of the dinner of an imminent "material adverse event" that could spoil the trade ceasefire, it would be seen as very politically embarrassing to Xi, and as Deutsche Bank explained earlier, would be considered a major escalation.Huawei has been widely recognized as one of the most successful technology companies in China. This news pushed policy makers in Beijing into an awkward position. Public opinion in China will likely become more negative in respect to the trade war, and potentially against US companies. The government may find it difficult to tell the public that they have offered significant concessions to the US. The trade talk has just been resumed at the G20 meeting; now its outlook has darkened.Now, according to Reuters, and rather inexplicably, even as Bolton knew about Meng's imminent arrest, President Donald Trump was reportedly unaware the U.S. had requested Meng’s extradition from Canada before he joined Chinese President Xi Jinping for dinner on Saturday, a White House official said.The news, which emerged shortly before the close, was seen by traders as bullish - facilitating the dramatic surge in the last hour of trading - as it would imply that the U.S. administration wasn't intending to use the arrest of Huawei CFO as part of a "hostage" negotiation strategy in trade talks with China.Maybe, maybe not. Because as we also learned earlier, while Trump reportedly did not know about the DOJ's extradition request, Canada's PM Trudeau did, something he revealed during a meeting with reported in which he distanced himself from Meng's arrest: “We are a country of an independent judiciary and the appropriate authorities took the decisions in this case without any political involvement or interference,” he told reporters during a press conference in Montreal. “We were advised by them with a few days’ notice that this was in the works." So Trudeau knew a few days in advance, yet Trump somehow had no idea what was going on?
Huawei’s Meng Snagged Due to US Bank Sanctions - Yves Smith - The arrest of Huawei CFO Meng Wanzhou produced a market meltdown in the morning, with the Dow down over 700 points, with stock retracing to only small losses for the major indices by the end of the session. However, the US extradition request, which presumably will lead to her being prosecuted, will continue to be a flashpoint between the US and China. US bank sanctions caught Huawei in their dragnet. Even though the Wall Street Journal and other reported that Meng’s executive and board roles in 2007 through 2009 with a Huawei operation that did business with Iran was one of the areas the Department of Justice had looked into. But a South China Morning Post was leaked an internal Huawei memo from October 29 where Meng and her father, founder Ren Zhengfei, were discussing costs of compliance and setting limits on them. Key section:Meng spoke of the different types of external regulatory compliance, dividing them into “red” and “yellow” lines. She did not specify any markets when describing the different scenarios…“Of course, beyond the yellow and red lines, there may still be another scenario, and that is where the external rules are clear-cut and there’s no contention, but the company is totally unable to comply with in actual operations. In such cases, after a reasonable decision-making process, one may accept the risk of temporary non-compliance,” she said…. “We must not bind ourselves up just because the US is attacking us,” Ren said in response to a question. “If our hands and feet are bound, then we will not be able to continue producing, then what’s the point of compliance?” “The US has very strict compliance policies, but American companies are used to it,” Ren said. “Nobody dares to flout the law, it has become a habit, and they can still achieve high speeds. Our company has not yet formed this habit, that is why communication costs are too high.” And if that is already in the public domain, what else is out there? Now one might ask, how could the US establish that Huawei was violating US sanctions on Iran? It appears that the US has more current evidence that that of the subsidiary mentioned above. From the Financial Times: The US justice department has been conducting an investigation for at least two years into whether Huawei breached sanctions against Iran and has requested information on the company from its bankers, according to people familiar with the investigation. A federally appointed monitor working inside HSBC, the UK-based bank, also flagged concerns that Huawei was breaching US sanctions on Iran, one person said, although the lender was also co-operating with federal prosecutors of its own accord.
Mr. Tariff Ups The Ante On China - Donald Trump just jumped the shark calling himself, “Mr. Tariff.” He believes a trade deficit is akin to stealing the wealth of a nation. It isn’t. Under normal conditions a trade deficit is simply a reflection of the difference in comparative advantage of one country’s workers over anothers. And the value of the currency is supposed to rise and fall to offset that state of affairs over time. Donald Trump has, in the words of David Stockman, “A 17th century view on global trade.” It is one born of a complete misunderstanding of how and why trade imbalances occur, why they will re-balance if allowed and why, ultimately, they are irrelevant. But, Trump can’t or won’t see it that way. He refuses to accept that we are the creators of our persistent trade deficit with China. That the trade deficit stems from running budget deficits and applying Keynesian counter-cyclical monetary policy or, worse, QE to protect domestic asset prices. It also stems from our being the world’s reserve currency which places an insane demand on the Fed to keep the flow of dollars rising to liquefy global trade. He complains that international tariffs regimes are unfair. But, as Stockman has consistently pointed out tariff levels globally are nearly non-existent running at around 3% on average. This is the period of freest trade we’ve seen in the era of the modern nation state, but Trump looks at these niggling things, these small things and can’t see the forest for them.
Farm Bust, Trade Wars, US About To Lose Top Global Soybean Exporter Status - Last week, Americans learned depressed commodity prices and the escalating China-US trade war had sparked a farm bust across the Midwest region, sending farm bankruptcies to levels not seen since the great financial crisis.Farmers fear China will never return to US soybean markets, as they have now explored new sources in South America.According to Hellenic Shipping News, new evidence shows the US is "about to lose its leading position in global soybean exports to South American countries in 2019 as China seeks new import sources" because of President Trump's trade disputes with China. Argentina, a significant global soybean producer, will dramatically boost its soy exports to China from an average of 7-8 million tons in the last several years, up to 10-15 million tons in 2019, Nicolas Pawlusiak, a spokesperson with the Rosario Board of Trade, which is based in Argentina, told the Global Times last week.Pawlusiak said the growth in soybean exports from South American countries is directly due to the decline in US exports to China. "China, normally the destination for 60% of all US soybean exports, slashed imports after raising tariffs on US shipments on July 06," reported Reuters. “Total soybean production in Argentina in 2019 is expected to be more than 50 million tons, of which 15 million tons are for the export market, most of which will be sold to China. It’s twice the average of the past five years,” Pawlusiak said.Zou Yesheng, deputy general manager of COFCO International Argentina, said that China’s soybean imports from Argentina would be around 10-12 million ton next year. The US exported about 30 million tons to China annually in past years, he added.Brazil, another winner in the trade war, is expected to produce record amounts of soybean in the 2019 growing year and will increase its exports to China. The difference between US exports prices for soybeans and Brazilian exports remains wide:
Analysis | Trump's two favorite economic metrics — the stock market and the trade deficit — are failing him - President Trump has made it clear that he wants the stock market to rise and the trade deficit to fall, and that his policies will make that happen. But this year, he has been getting the opposite result: The trade deficit is soaring while the market is careening down. The U.S. trade deficit is at its highest level in a decade, the U.S. Commerce Department reported Thursday, and the trade deficit with China is at a record high. Trump’s trade war appears to be making the trade deficit worse as Americans continue to import a lot of foreign goods but have struggled to sell products such as soybeans abroad Trump’s trade feud with China is also causing tremors on Wall Street. The stock market has had an especially ugly week, with the Dow Jones industrial average shedding close to 1,300 points (5 percent). The Dow and Standard & Poor’s 500, two of the most closely watched metrics of U.S. stock market performance, are now negative for the year. “The stock market couldn’t be any more disapproving of the president and his economics team,” Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in an email. “This administration has to tone down its war with the world, from European automakers to China importers, or this stock market will completely collapse and make a 2019 recession forecast a reality.” The president has repeatedly pointed to the stock market’s rise as proof that his economic policies are working, but with all gains wiped out for 2018, he has turned to blaming others for the market’s spiral. The last time he tweeted in praise of market gains was on Oct. 30, when he sought to remind people that “the stock market is up massively since the Election.” Since then, he has blamed Democrats and the Federal Reserve for the market declines. Investors agree that the Fed’s push to raise interest rates and make borrowing costs higher is part of the reason stocks are sliding, but they also point to Trump’s ongoing feud with China. Trump has been putting hefty tariffs on a number of foreign products this year to try to encourage people to “buy American” and make more goods in the United States. But the strategy doesn’t appear to be working. Soybean exports decreased by $800 billion in October and are down more than 40 percent from last year as China countered Trump’s tariffs with hefty taxes on U.S. agricultural products. Although many economists expected the trade deficit to widen this fall, the numbers are even bigger than anticipated because of Trump’s trade war and the fact that the European and Chinese economies are weakening and were widely expected to go easy on purchases of U.S. goods
Trump is reportedly 'glued' to the stock market's fluctuations and worried he's causing them --President Donald Trump has been consulting with his advisors to see if his trade policies are responsible for the volatility that has hammered markets in recent weeks, according to The Wall Street Journal.The president still sees the Dow Jones Industrial Average as a significant benchmark for his performance, the report said, citing sources close to Trump. The blue chip index is up about 23 percent since Trump's inauguration but turned negative for the year during another rough market session Friday. One person close to the White House told the WSJ that the president is "glued" to the stock market.Stocks took their latest downturn after the president declared himself "a Tariff Man" in a tweet Tuesday. The White House has been embroiled in a trade dispute with China, and Trump has pledged to take a hard line in negotiations.The Journal report and a number of tweets from the president suggest that he still blames the Federal Reserve's rate hikes for the market issues. However, stocks have continued to slide this week even amid expectations that the Fed may ease up on its rate-hiking cycle. Read the full Journal report here.
Trump to notify Congress in ‘near future’ he will terminate NAFTA (Reuters) - U.S. President Donald Trump said on Saturday he will give formal notice to the U.S. Congress in the near future to terminate the North American Free Trade Agreement (NAFTA), giving six months for lawmakers to approve a new trade deal signed on Friday. “I will be formally terminating NAFTA shortly,” Trump told reporters aboard Air Force One on his way home from Argentina. “Just so you understand, when I do that - if for any reason we’re unable to make a deal because of Congress then Congress will have a choice” of the new deal or returning to trade rules from before 1994 when NAFTA took effect, he said. Trump told reporters the trade rules before NAFTA “work very well.” NAFTA allows any country to formally withdraw with six months notice. Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto signed a new trade agreement on Friday known as the United States-Mexico-Canada Agreement (USMCA). Trump’s decision to set in motion a possible end to largely free trade in North America comes amid some skepticism from Democrats about the new trade deal. The U.S. landscape will shift significantly in January when Democrats take control of the House of Representatives, after winning mid-term elections in November. Presumptive incoming Speaker of the House Nancy Pelosi described the deal as a “work in progress” that lacks worker and environment protections. “This is not something where we have a piece of paper we can say yes or no to,” she said at a news conference on Friday, noting that Mexico had yet to pass a law on wages and working conditions. Other Democrats, backed by unions that oppose the pact, have called for stronger enforcement provisions for new labor and environmental standards, arguing that USMCA’s state-to-state dispute settlement mechanism is too weak. Trump had vowed to revamp NAFTA during his 2016 presidential election campaign. He threatened to tear it up and withdraw the United States completely at times during the negotiation, which would have left trade between the three neighbors in disarray. The three were still bickering over the finer points of the deal just hours before officials were due to sit down and sign it.
Ongoing metals tariffs cloud newly signed US, Canada, Mexico free trade pact — Canadian Prime Minister Justin Trudeau urged the US Friday to lift tariffs on imports of steel and aluminum that are affecting cross-border oil and natural gas projects, in a reminder of the trade tensions that still remain even as the two countries and Mexico signed a pact that overhauled the North American Free Trade Agreement. The metals are inputs in the fabrication of pipelines, liquefaction terminals, and the casing in drilling wells, making duties on the materials an extra cost for developers that can harm their ability to be competitive with similar projects in other parts of the world. During the Group of 20 leaders' summit in Argentina, Trudeau said the new free trade agreement that replaces NAFTA eases uncertainty that would have worsened had the deal not been reached, protecting jobs that rely on good relationships between the US, Canada and Mexico. But, he said, much work remains to be done to remove barriers, and he prodded US President Donald Trump to come to the table on metals tariffs. "The recent plant closures by General Motors, which affects thousands of Canadian and American workers and their families, are a heavy blow," Trudeau said at the summit. "And, Donald, it's all the more reason why we need to keep working to remove the tariffs on steel and aluminum between our countries. With hard work, good will, and determination, I'm confident we will get there. Our shared interests, prosperity, and security demand it." Currently, the US imposes 25% tariffs on imports of steel from Mexico and Canada and any quotas imposed on steel imports would likely replace those tariffs. The issues of steel import quotas and tariffs were not addressed in the discussions over the free trade pact that the three countries signed. Trump has dubbed the pact the United States-Mexico-Canada Agreement, a name Canada has pointedly not endorsed in its messaging. Trudeau referred to it in his remarks at the signing as the new NAFTA. For his part, Trump did not mention the steel and aluminum tariffs during his prepared remarks at the summit. Instead, he focused on the manufacturing jobs that he said will be created in the US from raising wages and implementing intellectual property protections. Officials of some energy industry trade associations have said the new pact should benefit the sector in the long run, but they are concerned about lingering trade issues, including the metals tariffs.
When Mexico’s new president hits the ground running, he’ll smack into Trump — The honeymoon for incoming President Andres Manuel Lopez Obrador, who will be sworn in Saturday, will be sweet and short, if it happens at all. Awaiting him are a host of urgent issues, from a growing number of Central American migrants encamped at the U.S. border and the threat of a border shutdown to skyrocketing violence around the country, jittery foreign investors and energy policy issues. He'll also need to address his people's seemingly impossible expectations, such as eradicating centuries of corruption and poverty during his single six-year presidential term. But among his greatest challenges will be his unpredictable counterpart across the border — President Donald Trump. Despite talk of mutual admiration and shared traits — two stubborn, forceful leaders with a populist bent and a keen ability to ignite passions among their base supporters — chances of their getting along are overrated, analysts say. Lopez Obrador, popularly known as AMLO, is a skilled, pragmatic politician who's expected to seek solutions, analysts say. The real question, experts add, is whether Trump has the political will to meet AMLO halfway. Already in the backdrop of Lopez Obrador's swearing-in is a dicey situation on the border, where thousands of Central Americans are gathering in Tijuana, waiting to get a chance at asylum in the U.S. With winter looming, the situation could turn into a humanitarian crisis, even as Trump threatens to shut down the border and presses for congressional funding for his border wall. "I think, in many ways, the crisis on the border represents a solution for Trump," said Carlos Bravo Regidor, a political analyst and associate professor at CIDE, the Center for Research and Economics Education in Mexico City. "He wants this. He needs this. He thrives on this." The U.S. has already floated the idea that the incoming Lopez Obrador administration plans to implement a "Remain in Mexico" policy aimed at keeping asylum seekers in Mexico for long periods until the U.S. can process them. But Mexican officials say such an agreement is nowhere near being finalized, and likely may never be. This puts Mexico in a tough spot, which may be exactly where Trump wants Mexico and Lopez Obrador to be.
Mexico's New President Signs Deal To Halt Flow Of Migrants - As one of his first acts in office, Mexican President Andres Manuel Lopez Obrador and his counterparts from three Central American countries have signed an agreement to formulate a plan which will stop the flow of migrants seeking asylum in the United States. The plan will include a fund to generate jobs in the region, while attacking the "structural causes of migration from El Salvador, Guatemala and Honduras," reports AP, citing a Saturday statement from Mexico's Foreign Ministry. Thousands of mostly Honduran migrants have banded together in caravans over the last two months, making the northward journey through Mexico towards the southern US border. The majority of the most recent Central American migrant caravan has gathered in Tijuana, where authorities just cleared around 6,000 asylum-seekers out of an outdoor sports complex close to the US border - moving them to a former concert venue around 14 miles away from the San Ysidro border crossing. The first shelter was closed due to sanitation issues according to the city. Experts had expressed concerns about unsanitary conditions that had developed at the partly flooded sports complex, where the migrants had been packed into a space adequate for half their numbers. Mud, lice infestations and respiratory infections were rampant. -Washington Times Tijuana authorities had previously said nobody would be forced to move to the new facility, however they warned that they would not longer provide free food and medical services at the Benito Juarez sports complex. The move comes one week after approximately 500 migrants broke off from a peaceful protest over long wait times for asylum applications, and made a run towards the US border, resulting in the deployment of tear gas by US border officials.
Risking Certain Detention , Caravan Migrants Breach US Border - For weeks now, members of one of the migrant caravans that traveled from Honduras all the way to the southern border of the US have been stuck in a squalid camp in Tijuana as they await their chance to declare asylum, or otherwise cross the border. But after weeks of waiting - a period that has been marred by violent attacks on border patrol agents and skirmishes with US forces - some have decided that crossing the border to declare asylum in defiance of President Trump's orders is probably the best course of action, according to Reuters. These migrants risk "almost certain detention." Still, many hope that crossing into the US will allow them to declare asylum, even if they are rounded up by some of the thousands of additional troops to the border by President Trump. In recent weeks Trump has championed a policy - "Remain in Mexico" - that would force asylum applicants in the US to stay on the US side of the border until the Court is ready to hear their case. So far, the policy has been blocked by US courts. Still, Trump has clearly articulated his intentions to tighten immigration restrictions, and it appears migrants on the Mexico side of the border are hoping to find a way to cross into the US before an influx of new resources makes it even more difficult. To wit, a team of Reuters reporters witnessed groups of migrants bum rushing the border during the pre-dawn hours, hoping to slip past the intense border fortifications and escape into the US under the cover of darkness.So a number opted to eschew legal procedures and attempt an illegal entry from Tijuana as dusk fell on Monday at a spot about 1,500 feet (450 meters) away from the Pacific Ocean.In less than an hour, Reuters reporters observed roughly two dozen people climb the approximately 10-foot (3-meter) fence made of thick sheets and pillars of metal. They chose a place in a large overgrown ditch where the fence is slightly lower.Just before dusk, three thin people squeezed through the fence on the beach and were quickly picked up by the U.S. Border Patrol, witnesses said.But along the border inland as darkness descended, more and more migrants followed, many bringing children.Some used a blanket as a rope to help loved ones get over.
How the Mainstream Media Helps Weaponize Conspiracy Theories — Once an anti-Semitic rumor moved from fringe to the mainstream, it took less than two weeks for violence to erupt. The false allegation that liberal philanthropist George Soros was funding or supporting a caravan of Honduran refugees heading to the U.S. spread wildly from a single tweet posted on Oct. 14.Along with far-right memes, that allegation helped motivate both an alleged mail-bomber and a mass shooter at a Pittsburgh synagogue. The way these messages traveled across the internet in this short time span is just one example of how extremist messages and memes circulate with incredible speed across mainstream social media platforms.From our vantage point as researchers of visual and digital communication, memes – short, often image-based forms of communication – are powerful engines of persuasion, even though they can appear innocuous or even humorous. Perhaps the best known examples are LOLCats memes, pairing funny pictures of cats with customizable phrases or sentences. Memes can disseminate information quickly because they invite people to share or remix content with little effort required, making widespread dispersal more likely.Memes need not be humorous or factual to be functional. All they need to do is attract attention online, which often translates into mainstream media coverage. That makes memes potent tools for distributing disinformation. Moreover, the online and mainstream platforms that amplify memes’ circulation can weaponize false claims and encourage conspiracy theorists – sometimes toward violence. Understanding how these messages embolden anti-Semitism and other forms of terrorism involves grappling with how white supremacists use digital media. As we detail in our forthcoming book “Make America Meme Again,” messages and memes weaponized in far-right networks are deft political tools that move swiftly across social and traditional media. Because memes are stealthy political messages that usually offer rebellious or irreverent humor, they can be easily retweeted, shared or even pasted to the side of a van.
A Mysterious Imposter Account Was Used On Facebook To Drum Up Support For The Migrant Caravan - Just days before the migrant caravan set out from Honduras, an imposter stole the identity of a prominent early supporter on Facebook, using a fake account to try to boost the caravan’s numbers. Bartolo Fuentes, a Honduran activist, journalist, and former lawmaker told BuzzFeed News that someone used the phony account to send Facebook messages falsely claiming that established migrant groups were organizing the effort. News like that — coming from a well-known public figure in Honduras, such as Fuentes — could go a long way to convincing people to join the group of migrants traveling to the US. The caravan, which threaded north through Guatemala and Mexico, eventually ballooned in size to more than 7,000 people. It also became a political flashpoint in the lead-up to last month’s US midterm elections.In response to a query from BuzzFeed News, a Facebook spokesperson said the phony account “was removed for violating [the company’s] misrepresentation policy,” but declined to share any further information, such as what country it originated from, what email address was used to open it, or any other details that might reveal who was behind it. Facebook added that, barring a subpoena or request from law enforcement, it does not share such information out of respect for the privacy of its users. Fuentes said he believes it’s important to find out who was behind the rogue account — but hasn’t gotten any answers from Facebook. “Who knows how many messages could have been sent and who received them?” The use of an imposter account to bolster the caravan, which has not been previously reported, comes as Facebook faces increasing scrutiny for the pervasive use of its platform to interfere in US politics through false accounts, many of them linked to Russia. Two days before the midterms, the FBI informed Facebook of activity it “believed was linked to foreign entities,” leading the company to remove 36 Facebook accounts and 99 Instagram accounts “that may be engaged in coordinated inauthentic behavior” and operated in English, French, and Russian.
New US rules make it harder for Indians to secure H-1B visas - There could be some bad news in the offing for Indian software engineers looking to land a job in the US. The Trump administration, already well-known for its hard-line anti-immigration stance, recently proposed to further tweak rules for the H-1B visas. And that's a worrying development for Indians, who typically garner more than 60% of these visas. The US Department of Homeland Security's (DHS) proposal to introduce electronic registration for H-1B visa petitions for the filing season for the 2020 fiscal, which kicks off on April 1, 2019 along with a reverse selection process to include US master's or advanced degree holders within the 65,000-cap will tighten movement for Indian IT services sector, The Economic Times reported.The H1B visa is a popular non-immigrant work visa that allows US companies to employ foreign workers in speciality occupations, and American tech companies have long depended on it to hire highly-skilled employees from countries like India and China.According to NASSCOM , the Indian IT services sector - a major beneficiary of the H-1B visas - sees this as a fresh concern, adding that it may lead to "uncertainties" and could put US jobs at risk. However, the software body made it clear in a statement yesterday that it will carefully review the 139-page proposal and evaluate its implications for US companies and the economy before forming an opinion. "That said, there is not much time between now and when the next H-1B lottery season opens in April 2019. Companies have already begun assessing their needs and planning their submissions for next year, so we are concerned about the uncertainties that could arise as the government seeks to implement another major change in the H-1B process during that timeframe," said NASSCOM. The industry body further pointed out that contrary to what is intended, this action could put US jobs at risk and create pressure to send more IT work abroad, rather than performing it in the US. "To the extent US policy makes it more difficult and costlier for global IT service companies to provide their expertise in the United States, it will weaken US companies that depend on them to help fill their skills gap," read the statement. NASSCOM added that its members are already investing billions of dollars in the US, employing more than 1.5 lakh people, and spending millions of dollars on upskilling programmes. "It is important that they and others continue to have access to the necessary talent," it explained.
Trump’s New Immigration Rule Could Threaten Health Care for 6.8 Million Children Who Are U.S. Citizens - With less than a week left in the public comment period for a new immigration rule, a study released on Tuesday calculated the number of immigrant children who could lose their health insurance if their parents opt out as a result of the new policy.The Trump administration in October proposed a new "public charge" rule that would penalize legal immigrants for using government aid -- even when they qualify for it. If enacted, the rule will make it harder for legal immigrants to obtain green cards or permanent residency status if they have used certain government benefits, including Medicaid, food stamps and housing subsidies. Currently, legal immigrants are only considered a public charge for using long-term care or cash welfare. According to the Urban Institute's study, 6.8 million children on Medicaid or CHIP (the Children's Health Insurance Program) are citizens but have noncitizen parents. That represents one-fifth of all children in those programs. The study also shows that Medicaid and CHIP participation increased by 15.5 percent among citizen children with noncitizen parents from 2008 to 2016.Jenny Haley, a researcher who worked on the report, says these numbers show that “losses in coverage could be quite large. Some communities are already seeing a reduction in food assistance programs.”Though these children, who are citizens but have immigrant parents, would not be directly impacted by this rule, the Urban Institute study notes that “policy changes can have broad ‘chilling effects’ that lead to immigrant families opting out of public benefits and avoiding interactions with government authorities.”The number of U.S. children without health insurance rose for the first time in nearly a decade last year, according to a recent report from Georgetown University. Researchers partially attributed the rise to anti-immigration rhetoric from the Trump administration; in such an environment, they said, some immigrant parents opted not to sign up their kids for health care. The White House began discussions about updating the public charge rule shortly after Donald Trump took office in 2017. Backers of the Trump administration's new public charge rule argue it is a modernization of a Clinton-era definition of what welfare is and who is allowed to access it.
Trump Administration Gives States New Ways to Rewrite Obamacare - The Trump administration released new guidance for states on Thursday that would undermine major tenets of the Affordable Care Act (ACA), or so-called Obamacare, President Obama's signature health reform law.Most notably, the new "State Empowerment and Relief Waiver Concepts" urge states to start offering federal subsidies to people buying plans that don’t comply with the ACA. It would be a boost to short-term and association health plans, which offer fewer benefits and consumer protections but at a lower cost. By introducing these concepts, the Trump administration is accomplishing some of the same goals -- and in some instances, taking them further -- that Congressional Republicans had in mind when trying to repeal and replace the ACA in 2017, Larry Levitt, senior vice president of the nonprofit Kaiser Family Foundation, told The Washington Post.The Centers for Medicare and Medicaid Services (CMS) is also giving states the option to put subsidies into a “consumer-driven” account that people could use for health-care costs other than monthly premiums. It’s a similar approach that CMS Administrator Seema Verma took in Indiana, where she helped redesign the state's Medicaid program.States will now also have some freedom to decide who is eligible for subsidies. Under the ACA, anyone with an income 400 percent of the federal poverty line is eligible for subsidies on the insurance marketplace. This new guidance would allow states to tweak or add to that regulation, perhaps prioritizing younger, healthier populations over lower-income residents. Finally, states will have more flexibility to establish reinsurance programs, which use government funds to protect insurance companies from the most expensive patients and bring down premiums for everyone. Reinsurance has been used in several states since the beginning of the ACA to hold down costs.
Trump Admin Targets Amazon And Other E-Commerce Sites With Postal Reforms - President Trump has followed through on a July promise to reform the US Postal Service (USPS), which he referred to as Amazon's "Delivery Boy." On Tuesday, the Trump administration released a report that recommends a series of measures that the Trump's USPS task force says are needed to bring in more revenue for the profit-challenged Postal Service, which reported $3.9 billion in losses during fiscal year 2018, according to The Hill. "Although the USPS does have pricing flexibility within its package delivery segment, packages have not been priced with profitability in mind," the report's executive summary states. "The USPS should have the authority to charge market-based prices for both mail and package items that are not deemed ‘essential services.’" The report recommends that the USPS divide its mail and package shipments into essential and commercial service categories. Many e-commerce shipments would fall into the latter category, which would not be protected by existing price caps and thus be subject to rate increases. Senior administration officials say the Postal Service would be able to change package rates without an act of Congress. But such a move would likely require re-working negotiated service agreements with Amazon and other companies. -The HillWhile the move is clearly aimed at Amazon - which Trump warned in July over unfair business practices, administration officials have pushed back at the idea that the measures were specifically aimed at the company. "None of our findings or recommendations relate to any one customer or competitor of the Postal Service," said one senior administration official in an anonymous statement to The Hill. The official added that "all companies" dealing in e-commerce, "including Amazon," would "be impacted by those suggested reforms." -The Hill
Stockman To Trump - Tear Down That Deep State Wall...Of Secrecy - When the Donald promised to "drain the swamp" during the 2016 election campaign, it did sound vaguely like an attack on Big Government, and at least a directional desire to shrink the state and let free market capitalism breathe. After 22 months in office, however, the truth is patently obvious: The only Swamp that Donald Trump wants to drain is one filled with his political enemies and policy adversaries at any given moment in time. Even then, you have to consult his tweetstorm ledger to know exactly who the swamp creatures de jure actually are. Still, the Donald's daily Twitter assaults on the Deep State are a wondrous thing. They surely do undermine public confidence in rogue institutions like the FBI, CIA and NSA, which profoundly threaten America's constitutional liberties and fiscal solvency. Likewise, his frequently unhinged tweets also lather their congressional sponsors and beltway poo-bahs with well-deserved mud and opprobrium. And the Donald's increasingly acrimonious public feuding with Deep State criminals like James Comey and John Brennan is just what the doctor ordered. The Deep State thrives and milks the public treasury so successfully in large part because the Imperial City's corps of permanent policy apparatchiks like Comey and Brennan (and thousands more) pretend to be performing god's work. So doing, they preen sanctimoniously to the adoration of their sycophants in the mainstream media, claiming to be above any governance or sanction from the unwashed electorate. Attacking this rotten perversion of democracy, therefore, is the Donald's real calling. While he lacks both the temperament and ideas to solve the nation's metastasizing economic and social challenges and has no hope whatsoever to make MAGA, he is more than suited for his "Great Disrupter" mission. That is, the existing order needs to be discredited and brought down first, and on that score his primitive economic populism will more than do its part.
Comey Strikes Deal For Congressional Testimony After Being Slapped With Subpoena - Fired FBI director James Comey tweeted on Sunday that he has reached a deal with GOP lawmakers regarding his upcoming testimony before congress regarding allegations of political bias at the FBI and DOJ. Comey had previously rejected an October request by the House Judiciary Committee to appear at a closed door hearing - stating instead that he would only testify in public. After a Thanksgiving subpoena, the former FBI director vowed to "resist" unless the testimony was in an open setting - tweeting that he had "seen enough of their selective leaking and distortion," in reference to the Judiciary Committee - and filed a motion to quash the subpoena. On Sunday, it appeared that an acceptable arrangement had been reached, as Comey tweeted: "Grateful for a fair hearing from judge. Hard to protect my rights without being in contempt, which I don’t believe in. So will sit in the dark, but Republicans agree I’m free to talk when done and transcript released in 24 hours. This is the closest I can get to public testimony."Grateful for a fair hearing from judge. Hard to protect my rights without being in contempt, which I don’t believe in. So will sit in the dark, but Republicans agree I’m free to talk when done and transcript released in 24 hours. This is the closest I can get to public testimony.— James Comey (@Comey) December 2, 2018 House Judiciary Chairman Bob Goodlatte (R-VA) made the offer last week, tweeting: "I have just offered to Director Comey that the Committees will publicly release the transcript of his testimony following the interview for our investigation. This ensures both transparency and access for the American people to all the facts."
Trump’s Timidity is Letting Comey Off the Hook -- Because President Donald Trump has again pulled the rug out from under them, House Republicans face Mission Impossible on Friday when they try to hold ex-FBI Director James Comey accountable for his highly dubious authorization of surveillance on erstwhile Trump campaign adviser Carter Page. Comey let go his unprecedented legal maneuver to have a court quash a subpoena for him to appear behind closed doors before the Republican-led House Judiciary Committee before the Democrats take over the committee in January. The current committee chair, Rep. Bob Goodlatte (R-VA), decried Comey’s use of “baseless litigation” in an “attempt to run out the clock on this Congress.” The Judiciary Committee has jurisdiction over the Foreign Intelligence Surveillance Act (FISA); so the still secret FISA application “justifying” surveillance of Page is almost sure to come up.Comey had wanted a public hearing so he could pull the ruse of refusing to respond because his answers would be classified. He has now agreed to a closed-door meeting on Friday, with a transcript, likely to be redacted, to appear soon after. In an interview with The New York Post last Wednesday, Trump acknowledged that he could declassify Comey’s damning Foreign Intelligence Surveillance Act warrant request to show how devastating those pages likely are, but said he would not do so “until they were needed,” namely, if a Democratic House starts going after him. “If they go down the presidential harassment track, if they want go and harass the president and the administration, I think that would be the best thing that would happen to me. I’m a counter-puncher and I will hit them so hard they’d never been hit like that,” Trump told the paper.
Read: Mueller’s sentencing memo for Michael Flynn - Special counsel Robert Mueller filed his sentencing memo for former National Security Adviser Michael Flynn Tuesday.Last December, Flynn pleaded guilty to lying to the FBI about his contacts with Russian Ambassador Sergey Kislyak. Back then, he was the second former Trump adviser, after George Papadopoulos, to cut a deal with Mueller’s team. And as part of that deal, Flynn committed to cooperate with the probe.In the sentencing memo, Mueller assessed Flynn’s cooperation as “substantial,” and wrote that “a sentence at the low end of the guideline range—including a sentence that does not impose a term of incarceration—is appropriate and warranted.” Flynn will be sentenced by a Washington, DC, judge on December 18. You can read the main memo below, or at this link.
Special Counsel sentencing memo on Flynn increases pressure on Trump -- On Tuesday night, Special Counsel Robert Mueller released a memorandum filed with the US district court in Washington DC laying out his office’s recommendation on the sentencing of Michael Flynn.Repeating several times in the course of the 13-page filing that Flynn had provided “substantial assistance to the government,” Mueller recommended a sentence with no jail time. Judge Emmet Sullivan is slated to hand down the sentence for Flynn on December 18.Flynn is the retired Army lieutenant general and former director of the Defense Intelligence Agency who served for 24 days as President Donald Trump’s national security advisor before he was fired in February 2017 for lying to Vice President Mike Pence about his contacts with then-Russian Ambassador to the US Sergey Kislyak.Flynn pleaded guilty last December to one count of lying to the FBI in connection with the special counsel’s investigation into alleged Russian meddling in the 2016 elections and possible collusion by the Trump election campaign. He admitted to having given false information about his discussions with Kislyak concerning sanctions imposed by Barack Obama against Russia in the final days of his administration, when Flynn was part of the Trump transition team. He also acknowledged lying about talks with Kislyak urging the Putin government to oppose a UN resolution against Israeli settlements in the West Bank.In pleading guilty to the single count, Flynn agreed to cooperate with Mueller’s investigation.
Mueller says Manafort lied about contacts with Trump officials - Former Trump campaign chairman Paul Manafort lied to prosecutors about his contacts with the White House and an associate with suspected ties to Russian intelligence, special counsel Robert Mueller's office said in a filing Friday. The heavily redacted report filed in the criminal case against Manafort in Washington, D.C., comes more than a week after prosecutors accused the one-time Trump campaign chief of “committing federal crimes by lying to the Federal Bureau of Investigation and the special counsel’s office on a variety of subject matters” in breach of his plea agreement. The report released Friday detailing those claims had been highly anticipated for its potential to shed light on Mueller’s investigation into Russian interference in the 2016 presidential election and possible collusion with the Trump campaign, an investigation that has been kept tightly under wraps. Mueller said in the filing that after signing the plea agreement, Manafort stated he had no direct or indirect communications with anyone in the administration, but evidence demonstrates that Manafort authorized a person to speak on his behalf. “Separately, according to another Manafort colleague, Manafort said in February 2018 that Manafort had been in communication with a senior administration official up through February 2018,” the special counsel wrote in the 10-page report. The filing details four topics on which Manafort is alleged to have misled prosecutors. These also include his interactions with Konstantin Kilimnik, a Russian who ran the offshoot of Manafort’s firm in Ukraine and who was charged alongside Manafort with witness tampering earlier this year. An earlier filing from Mueller suggested the FBI believes Konstantin had ties to Russian intelligence in 2016. Kilimnik has remained out of reach of U.S. prosecutors. In a heavily redacted passage, Mueller’s prosecutors wrote Friday that Manafort lied about an unknown topic that the two discussed. The filing suggests Mueller has electronic evidence and travel records to disprove Manafort’s claims. Additionally, prosecutors say Manafort lied about meeting with Kilimnik and about his role in the alleged conspiracy to tamper with witnesses. The filing also says that Manafort made “inconsistent statements” to investigators about a $125,000 payment he made to an unnamed firm working for him in 2017. Finally, prosecutors allege that Manafort misled Justice Department officials working on a separate investigation, that is not described, by providing different versions of events about a subject relevant to the probe before and after his plea agreement.
Mueller Says Manafort Told Multiple Lies About Contacts With Trump Officials, Russian Intel Operatives - One week after a "stunning turnaround" in the special counsel's probe of Russian collusion, in which Mueller accused Trump's former campaign chairman Manafort of lying and violating his plea agreement, late on Friday a filing by special counsel Robert Mueller's office detailed that Manafort lied to prosecutors about his contacts with an associate who has Russian intelligence ties and his contacts with the White House while he was under investigation. According to the heavily redacted report filed in the criminal case against Manafort in Washington, D.C., Manafort lied during debriefings in recent weeks about communications and a meeting with his longtime translator and fixer, Konstantin Kilimnik, who is alleged to have ties to Russian intelligence, and who was charged along with Manafort earlier this year with conspiracy and obstruction of justice in an alleged attempt to influence other testimonies in the investigation. Manafort at first denied that Kilimnik was involved in witness tampering, but later conceded that he was.Manafort also allegedly lied to investigators when he told prosecutors that he never tried to communicate a message to anyone in the Trump administration. In fact, prosecutors wrote, Manafort authorized someone to speak to an administration official on his behalf on May 26.“Manafort told multiple discernible lies - these were not instances of mere memory lapses,” Mueller’s prosecutors wrote. The report detailing those lies on Friday had been highly anticipated for its potential to shed light on Mueller’s investigation into Russian interference in the 2016 presidential election and possible collusion with the Trump campaign, a investigation has been kept tightly under wraps.According to the filing, Manfort's principal lies relate to:
- Manafort's interactions with Konstantin Klimnik
- a $125,000 wire-transfer to a firm that was working for Manafort
- information pertinent to another DOJ investigation
- Manafort's contact with administration officials.
On the last point, Mueller alleges that despite claiming the contrary, Manafort had contacts with Administration officials, including a text from May 26, 2018 which authorized a person to speak with an Administration official on Manafort's behalf. Separately, quoting another Manafort colleague, Manafort said in February 2018 that he had been in communication with a senior Admin official up through February 2018. Additional contacts with admin officials were also recovered from a search of Manafort's electronic documents. Additionally, Mueller’s prosecutors filed a portion of the document under seal - arguably the parts that are directly related to the ongoing probe of Trump's "Russian collusion", and redacted other key points from view.
Trump Demands Cohen Serve "Full Prison Sentence" For "Lying And Making Up Stories - Clearly excited after his trade deal detente triumph, President Trump has been spraying out tweets at a breakneck pace Monday morning, veering from hints about the forthcoming US-China trade accord (China will reverse some of its auto tariffs, Trump says) to his hopes for ending the US-China-Russia arms race. But by mid-morning, Trump had circled back to domestic issues - specifically his ongoing feud with Special Counsel Robert Mueller and his former personal attorney Michael Cohen, who pleaded guilty last week to one count of lying to Congress. Reports last week suggested that Cohen is asking to be spared jail time in exchange for his testimony against the president, which supports Trump's claim that Cohen is lying about the president to save himself, Trump tweeted to demand that his former attorney be made to serve "the full sentence." Trump seethed that Cohen could avoid punishment for his many crimes unrelated to the Trump campaign by "making up stories to get a GREAT & ALREADY reduced deal for himself and his wife and father-in-law (who has the money?) off Scott Free." "He lied for this outcome and should, in my opinion, serve a full and complete sentence."
Cohen Said Russian Vowed ‘Political Synergy’ for Trump in 2015 Michael Cohen spoke with a Russian national who repeatedly proposed a meeting between Donald Trump and Russian President Vladimir Putin in the early months of Trump’s presidential bid, and offered “political synergy” for the campaign, according to a filing by Special Counsel Robert Mueller’s office. Trump tweeted early Saturday that there had been “NO COLLUSION!” The unidentified Russian, claiming to be a “trusted person” in the country, told Cohen that a meeting between Trump and Putin could have a “phenomenal” impact politically and for Trump’s business aspirations to build a skyscraper in Moscow, according to the filing. There is “no bigger warranty in any project than consent of [the president of Russia],” the person told Cohen, according to Mueller’s filing. That November 2015 exchange suggests that outreach between Trump’s campaign and Russia was broader and possibly earlier than previously known. It was disclosed in a slim document that described Cohen’s conversations with Mueller’s office after he pleaded guilty and agreed to provide information to prosecutors who are investigating Russian interference in the 2016 election. The filing accomplished two things. It provided information to the judge in Manhattan who will sentence Cohen next week. But like previous court filings by Mueller, it also offered a window into Mueller’s probe, in this case displaying the breadth of his knowledge about interactions between Russians and people close to Trump. The president pushed back in Twitter messages on Friday -- when he said the filing “totally clears the President” and again early Saturday.
Cohen To Get "Substantial Prison Time" For "Serious" Crimes Despite Cooperation With Mueller It turns out that being a rat may not pay off after all. Just a few days after Special Counsel Robert Mueller recommended as little as no prison time for Trump's former National Security Advisor, Michael Flynn, who pled guilty to lying to the FBI and had agreed to cooperate with the FBI, moments ago US prosecutors issued a statement in which they announced that Michael Cohen, who infamously flipped on the president (for whom Cohen once said he "would take a bullet") deserves "substantial prison time", despite his cooperation. While Flynn pled guilty to just one count, whereas Cohen had pled guilty to 8 federal crimes, what is remarkable is that despite his allegedly extensive cooperation with the Special Counsel culminating in over 70 hours of testimony, prosecutors with the U.S. attorney’s office in the Southern District of New York recognized Cohen’s cooperation with law enforcement in “ongoing matters” but argued the seriousness of his crimes warrant a “substantial term of imprisonment.” As a result, they do "not ask for special leniency for Cohen", calling his lies to Congress and the people "serious", requesting a "modest downward variance" from the applicable sentencing range which is in the range of 51-63 months, and thus recommending "a sentence of 42 months' imprisonment." Here are the key sections from the Preliminary Statement: Cohen, an attorney and businessman, committed four distinct federal crimes over a period of several years. He was motivated to do so by personal greed, and repeatedly used his power and influence for deceptive ends. Now he seeks extraordinary leniency – a sentence of no jail time – based principally on his rose-colored view of the seriousness of the crimes; his claims to a sympathetic personal history; and his provision of certain information to law enforcement. But the crimes committed by Cohen were more serious than his submission allows and were marked by a pattern of deception that permeated his professional life (and was evidently hidden from the friends and family members who wrote on his behalf). While prosecutors concede that Cohen did provide information to law enforcement, "including information that assisted the Special Counsel’s Office in ongoing matters" -which they agree is a factor to be considered by the Court, they add that "Cohen’s description of those efforts is overstated in some respects and incomplete in others."
"I Know Where All The Bodies Are Buried": Clinton Foundation CFO Spills Beans To Investigators - The CFO of the Clinton Foundation, thinking he was "meeting an old professional acquaintance," admitted to investigators that the charity had widespread problems with governance, accounting and conflicts of interest, and that Bill Clinton has been commingling business and personal expenses for a long time, reports The Hill's John Solomon. Clinton Foundation CFO Andrew Kessel made the admissions to investigators from MDA Analytics LLC - a firm run by "accomplished ex-federal criminal investigators," who have been probing the Clinton Foundation for some time. Kessel told MDA "There is no controlling Bill Clinton. He does whatever he wants and runs up incredible expenses with foundation funds, according to MDA's account of the interview. "Bill Clinton mixes and matches his personal business with that of the foundation. Many people within the foundation have tried to caution him about this but he does not listen, and there really is no talking to him." MDA compiled Kessel's statements, as well as over 6,000 pages of evidence from a whistleblower they had been working with separately, and which they filed secretly over a year ago with the FBI and IRS. MDA has alleged that the Clinton Foundation engaged in illegal activities, and may owe millions in unpaid taxes and penalties.In addition to the IRS, the firm’s partners have had contact with prosecutors in the main Justice Department in Washington and FBI agents in Little Rock, Ark. And last week, a federal prosecutor suddenly asked for documents from their private investigation....The memo also claims Kessel confirmed to the private investigators that private lawyers reviewed the foundation’s practices — once in 2008 and the other in 2011 — and each found widespread problems with governance, accounting and conflicts of interest.“I have addressed it before and, let me tell you, I know where all the bodies are buried in this place,” the memo alleges Kessel said....The 48-page submission, dated Aug. 11, 2017, supports its claims with 95 exhibits, including internal legal reviews that the foundation conducted on itself in 2008 and 2011. -The Hill " "There is probable cause that the Clinton Foundation has run afoul of IRS rules regarding tax-exempt charitable organizations and has acted inconsistently with its stated purpose," MDA alleged in its memo, adding "The Foundation should be investigated for all of the above-mentioned improprieties. The tax rules, codes, statutes and the rule of law should and must be applied in this case."
Leaked Google Emails Reveal Internal Discussion On Burying Articles From Conservative Outlets -- Google - which was exposed trying to help Hillary Clinton win the 2016 election, and who were beside themselves after she lost - discussed whether to bury conservative media outlets in the company's search function after Donald Trump became president, according to the Daily Caller News Foundation's Peter Hasson. Internal communications obtained by the Caller reveal that The Daily Caller and Breitbart were specifically singled out for potential censorship. Communications obtained by TheDCNF show that internal Google discussions went beyond expressing remorse over Clinton’s loss to actually discussing ways Google could prevent Trump from winning again.“This was an election of false equivalencies, and Google, sadly, had a hand in it,” Google engineer Scott Byer wrote in a Nov. 9, 2016, post reviewed by TheDCNF.Byer falsely labeled The Daily Caller and Breitbart as “opinion blogs” and urged his coworkers to reduce their visibility in search results.“How many times did you see the Election now card with items from opinion blogs (Breitbart, Daily Caller) elevated next to legitimate news organizations? That’s something that can and should be fixed,” Byer wrote.“I think we have a responsibility to expose the quality and truthfulness of sources – because not doing so hides real information under loud noises,” he continued. “Beyond that, let’s concentrate on teaching critical thinking. A little bit of that would go a long way. Let’s make sure that we reverse things in four years – demographics will be on our side.” –DCNF
Alex Acosta, Jeffrey Epstein, and the Real Dirt on Trump -- Trump’s Labor Secretary, Alex Acosta, gave serial pedophile Jeffrey Epstein a sweetheart deal that protected all co-conspirators (one of which was Donald Trump).(SCG) — Ten years before Alex Acosta was nominated as Trump’s Labor Secretary, he served as federal prosecutor on a case which implicated Donald Trump, Bill Clinton and a vast network of rich and powerful men in an underage prostitution ring run by billionaire hedge fund manager Jeffrey Epstein.Though Epstein’s had systematically abused 40 minors, and would have likely served a life sentence if charged for all counts, Acosta opted to let Epstein off with with a slap on the wrist. Under the agreement, Epstein would plead guilty to 2 counts of prostitution and serve just 13 months in a county jail.The deal — called a non-prosecution agreement — also explicitly prevented any co-conspirators from being charged. This shut down an ongoing FBI investigation into other powerful people implicated. Both Donald Trump and Bill Clinton had been specifically called out as frequent flyers on Epstein’s Lolita Express, and were named in related suits.Consider the statement Trump made regarding his relationship with Epstein in 2002:“He’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it – Jeffrey enjoys his social life.”Trump in 2002 “On the younger side” meant children. Most between the ages of 13 and 16.
Billionaire Pedophile Jeffrey Epstein Settles Out of Court to Avoid Releasing New Info -- Jeffrey Epstein has agreed to a financial settlement and issued an apology to Bradley Edwards, the attorney representing several of Epstein’s victims. West Palm Beach, Florida — Jeffrey Epstein has apologized for filing a malicious lawsuit against attorney Bradley Edwards. The apology and a confidential financial settlement officially bring an end to the lawsuit which was peripheral to the larger fight to hold Jeffrey Epstein accountable for the dozens of young girls he molested. Edwards has been representing three female victims of Epstein for nearly a decade.The settlement relates to an ongoing legal battle between Epstein and Edwards. In 2008, Edwards successfully sued Epstein on behalf of women who claimed he abused them. All of the women were teenagers at the time. Epstein would later counter sue claiming that Edwards was bringing Epstein to court as part of some type of ponzi scheme. The suit would eventually be dropped, but Edwards returned the gesture by suing Epstein for defamation of character. The following statement was released by Epstein via his lawyers:“While Mr. Edwards was representing clients against me, I filed a lawsuit against him in which I made allegations about him that the evidence conclusively proves were absolutely false. The truth is that his aggressive investigation and litigation style was highly effective and therefore troublesome for me. The lawsuit I filed was my unreasonable attempt to damage his business reputation and cause Mr. Edwards to stop pursuing cases against me. It did not work. Despite my best efforts, he continued to do an excellent job for his clients and, through his relentless pursuit, held me responsible. I am now admitting that I was wrong and that the things I said to try to harm Mr. Edwards’s reputation as a trial lawyer were false. I sincerely apologize for the false and hurtful allegations I made and hope some forgiveness for my acknowledgement of wrongdoing.”
Jeffrey Epstein, the convicted sex offender who is friends with Donald Trump and Bill Clinton, explained - Jeffrey Epstein could have gone to prison for life. The money manager was accused of sexually abusing dozens of underage girls at his Palm Beach mansion between 2001 and 2006. But as Julie K. Brown reports at the Miami Herald, he ultimately got just 13 months in a county jail, thanks to a deal signed by Alexander Acosta, then the US Attorney for Miami and now President Trump’s secretary of labor. On Tuesday, Epstein settled a lawsuit in which some of his accusers were expected to testify, avoiding yet again the prospect of facing the women in court. The story of how Epstein got such a light sentence — and who was involved — is a master class in the power dynamics that have been exposed by the #MeToo movement but have yet to truly change. When authorities began investigating Epstein, he assembled a team of private investigators to dig up dirt on the girls who accused him and the police and prosecutors working the case. Then he and his team of powerful lawyers — including Alan Dershowitz and Kenneth Starr — were able to convince prosecutors to go easy on him despite disturbing allegations by a growing number of women and girls. (According to Axios, Dershowitz is still advising Epstein, saying, “He has called me a couple of times about legal issues, because I’m still technically his lawyer.”) Epstein was proud of his “collection” of famous friends, which included Bill Clinton and Donald Trump, and there’s long been speculation that some of these friends may have participated in his abuses. But because he has been able to avoid harsh punishment and minimize publicity around the details of his case, he’s also been able to keep details about anyone else who may have been involved out of the public eye. The fact that Epstein is free today is a reminder that the American justice system has long been all too willing to ignore the words of girls and women, especially when they accuse a wealthy and influential man. It’s a reminder that those with enough money and connections, from Epstein to Harvey Weinstein, can often manipulate the legal system to serve their own ends. And it shows how one powerful person can protect not just himself but anyone who might be connected to him, all while exploiting those who are powerless.
Bill Black- Deutsche Bank Crimes Could Trigger Next Global Crisis - The International Monetary Fund (IMF) previously deemed Deutsche Bank as the most systemically dangerous bank in the world. Professor of Economics and Law, William Black, knows why and contends: “Deutsche Bank (DB) poses as what is called a ‘National Champion’ bank and the largest bank by far in Germany, but it’s actually the largest criminal enterprise in Germany. This is quite a statement because VW is such a massive fraud... It is insane that we allow Deutsche Bank to go from fraud to fraud to fraud...They cheat on everything else you can possibly imagine and, typically, they are getting caught, which is also not a very good sign in terms of their competence even as thieves. Even in the United States, there has been reluctance to crack down on Deutsche Bank...When the New York Commissioner tried to crack down, the Office of the Comptroller of the Currency, the premier banking regulator, actually sought to impede that. He disparaged the New York folks and said there really wasn’t that big of problems and such, and all of that proved to be lies.” Deutsche Bank was raided by German regulators last week on more allegations of fraud and money laundering. DB is the epitome of “Too Big To Fail.”So, it will never be allowed to fail, and regulators will not be allowed to regulate them properly. Professor Black s ays, “Why you should care is Deutsche Bank impedes effective regulation everywhere and because God only knows the next thing they are going to do...""This is going to continue until something dramatic changes. Eventually, they can cause the next crisis...There will be a bailout in these circumstances, but that could help trigger another economic crisis. When the largest bank in the third largest economy in the world is completely dysfunctional, then the German economy is more likely to go into recession as well. That is one of the potential sources of the next recession, and you can see lots of people warning that there are signs that a serious recession is pretty likely relatively soon. Relatively could be two years.”Professor Black, who was a top regulator in the S&L crisis, says, “The whole system weakens itself because it gets caught in this big lie that says we have to pretend that Deutsche Bank is a bank instead of a criminal enterprise.” Join Greg Hunter as he goes One-on-One with Dr. William Black, Professor of Economics and Law at University of Missouri Kansas City.
US Regulators Have Essentially Become Do-Nothing Institutions --Something has gone terribly, terribly wrong with American capitalism. This argument, put forth by Jonathan Tepper and Denise Hearn, lies at the heart of their explosive new book The Myth of Capitalism: Monopolies and the Death of Competition. Instead of delivering on its stated promise to provide more opportunity, prosperity and choice, they argue, Americans today are subjected to a system that encourages and rewards predatory behavior, in which corporate monopolists and oligopolists are allowed to bleed consumers dry (and sometimes literally make them bleed) with impunity because the government has been “captured to rig the rules of the game for the strong at the expense of the weak.” How does a self-professed fan of markets end up writing a book titled “The Myth of Capitalism”? For one, argues Tepper, what is often called capitalism today is not, in fact, capitalism: competition is the essence of capitalism, and there is almost no competition in the American economy today. “Capitalism,” write Tepper and Hearn, “has been the greatest system in history to lift people out of poverty and create wealth, but the ‘capitalism’ we see today in the United States is a far cry from competitive markets.” Instead, the US economy has been overtaken by a “fake version of capitalism,” with government officials allowing (even cultivating) the concentration of economic and political power in the hands of few powerful monopolists who “cozy up to regulators to get the kind of rules they want and donate to get the laws they desire.” A clear and incisive indictment of the United States’ increasingly monopolized economy, where rising market power has led to less competition, lower productivity, lower wages and staggering inequality, The Myth of Capitalism is also an urgent call to action for both the left and the right to support the restoration of America’s antimonopoly ideals. [We published an excerpt from the book last week. Read it here.] In a recent interview with ProMarket, Tepper talked about the rise of America’s oligopoly problem, explained why he believes antimonopoly is not a left-right issue, and called on those who believe in free markets to support meaningful reforms. “If the people who love capitalism and competition don’t reform markets,” he warns, “people who don’t like capitalism are going to do it, and I think that we’ll all be worse off.” [Note: the following conversation has been edited and condensed for clarity and length.]
Big-bank capital buffer has advantages in current market: Fed's Brainard — With risks building in the financial system, it may make sense soon to employ for the first time a special capital buffer on the big banks meant to respond to market excesses, a top Federal Reserve Board official said Friday. Federal Reserve Gov. Lael Brainard said there would be “several potential advantages to building additional resilience” gained from imposing the Fed’s countercyclical capital buffer in the near future. The buffer would require the largest U.S. banks to hold additional capital while economic conditions are robust to counteract the elevated potential for riskier lending and to offset the potential losses that might come from those riskier activities. “History suggests that we should not expect the market to provide incentives for banks to build the necessary buffers when times are good; the essence of the cycle is that market sentiment become overconfident precisely when risk is actually highest,” Brainard said in a speech at the Peterson Institute for International Economics. “One of the roles for independent regulatory bodies such as the Federal Reserve is to serve as a counterweight.” Brainard added that the Fed's rule establishing the buffer suggested that the Fed should begin requiring more capital when financial vulnerabilities are only beginning to emerge, rather than when there are clear and present dangers to the economy. “As a rough rule of thumb, the criteria for implementing the CCyB described in the Board’s framework of September 2016 are calibrated so that the CCyB will be above its minimum value of zero about one-third of the time — when financial vulnerabilities are assessed to be in the upper one-third of their historical distribution,” Brianard said. And the Fed’s most recent financial stability report detailed the potential for precisely the kinds of risky losses that the CCyB was intended to counteract. The investment-grade corporate bond market seems to be heavily weighted on the lower end of the rating spectrum, Brainard said, meaning that a sudden downgrade from investment-grade to speculative-grade could spark a sell-off that might trigger broader economic stress.
Congress may have accidentally freed nearly all banks from the Volcker Rule -- A few double negatives buried in legislative text may have inadvertently freed nearly all U.S. banks from a regulation known as the Volcker Rule, which sought to curb risky behavior in response to the 2008 financial crisis. The text in question comes from a package bill passed in May that pared back portions of the Dodd-Frank post-crisis financial regulatory framework. One of the many provisions of the bill offered an exemption from the Volcker Rule to smaller community banks that policymakers felt were burdened by the regulation, which limited banks’ proprietary trading, or trading for their own accounts.But sources tell Yahoo Finance that some of the largest U.S. banks are now thinking about challenging the interpretation of that May legislation in court, arguing that the bill could be read as also extending regulatory relief to banks far above $10 billion in assets. If they succeed, this alternative interpretation could free nearly all U.S. banks from a heavily scrutinized post-crisis regulation that some see as an important safeguard against excessive risk-taking but one that opponents criticize as poorly designed and unduly burdensome. In the spring of 2018, a number of moderate Senate Democrats teamed up with Senate Banking Committee Chair Mike Crapo (R-Idaho) and the Republican majority to pass a package bill paring back portions of Dodd-Frank, arguing that some of the rules placed an undue burden on smaller financial institutions.One of those provisions exempted smaller banks from the Volcker Rule. A summary of the bill promises “community bank relief” to banking entities that have “(1) less than $10 billion in total consolidated assets, and (2) total trading assets and trading liabilities that are not more than five percent of total consolidated assets.” That would already exempt about 97% of the 5,473 U.S. banks and thrifts from the Volcker rule, S&P Global Market Intelligence reported in March.
November 2018: Unofficial Problem Bank list increased to 78 Institutions --Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for November 2018. Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List for November 2018. During the month, the list increased by three institutions to 78 banks. Aggregate assets declined from $56.3 billion to $53.9 billion, with most of the change coming from a $2.8 reduction because of a move to updated third quarter financials. A year ago, the list held 108 institutions with assets of $25.5 billion. Additions this month include Eastern National Bank, Miami, FL ($414 million); The Morris County National Bank of Naples, Naples, TX ($100 million); and Columbia Savings and Loan Association, Milwaukee, WI ($24 million). Columbia Savings originally debuted on the list in July 2011 and was removed in August 2017. Perhaps the removal in 2017 was premature.On November 20th, the FDIC released industry results for the third quarter of 2018 and disclosed that the Official Problem Bank List held 71 banks with assets of $53.3 billion.
Swelling corporate debt could come back to bite banks: OCC — Banks' heavy involvement in the corporate debt markets could make them more vulnerable in a sudden downturn, the Office of the Comptroller of the Currency said Monday. The agency's semiannual report on looming risks in the industry placed a heavy focus on the high volume of commercial loans as well as banks' exposure to nonfinancial corporate debt, which is near a record share of GDP. The OCC also repeated concerns about the growth of lending to highly leveraged companies. In a conference call accompanying the release of the Semiannual Risk Perspective, Comptroller Joseph Otting said a bigger risk with leveraged lending is occurring outside the banking industry, but he said banks should be vigilant about underwriting commercial borrowers. “I think that in this environment where there are very high and elevated leverage levels being done outside the banking industry, that it’s important for banks to look at a company’s suppliers or a company’s distribution network and understanding the leverage levels that are important partners in executing their business plan,” Otting said. About 60% of banks’ outstanding loans are in commercial loans, marking the highest level in 30 years, the report noted. Commercial and industrial loans, which includes corporate loans made to nonbanks, make up 43% of the total commercial portfolios. The current report reflects industry data as of June 30. “A deterioration in corporate bond and loan markets may affect supervised institutions more profoundly than in previous periods,” the OCC said in its report. “Favorable markets can turn quickly and unpredictably.” The report included a special section on corporate debt as well as a supplement on credit underwriting. The OCC said it is still seeing a loosening of credit standards, especially in leverage lending.
Pathbreaking Fiduciary Duty Suit Against KKR/Prisma, Blackstone, PAAMCO, and Others to Proceed -- Yves Smith - An important suit, Mayberry v. KKR, alleging breaches of fiduciary duty by certain trustees and executives of the Kentucky Retirement System, along with three famous fund managers, KKR/Prisma, Blackrock, and PAAMCO, who set up customized hedge funds that were sold as providing stellar performance at low risk and turned out to be turkeys, beat a raft of Motions to Dismiss and can now proceed to discovery. The plaintiffs scored an overwhelming victory despite having the defendants, which included Henry Kravis and George Roberts of KKR, and Steve Schwarzman and J. Tomilson Hill pf Blackrock, who are being sued personally, throw their biggest legal guns at them. The plaintiffs prevailed on every issue, save the inclusion of the Government Finance Office Association, which certified the Kentucky Retirement Systems financial reports, as a defendant. Government Finance Office Association was removed from the case, and all other Motions to Dismiss were denied. We’ve embedded Judge Phillip Shepherd’s terse order at the end of this post. One of the reasons it took so long to get to this point wasn’t simply that the plaintiffs are suing a large number of defendants, which meant that their distinct circumstances meant that among them, they could muster a lot of arguments as to why they should not be sued. The defendants filed a Consolidated Motion to Dismiss as well as additional Motions to Dismiss by particular parties. It was also that the defendants effectively ignored the order of battle and submitted voluminous pleadings that made extensive factual as well as legal arguments. As you can see from Judge Shepherd’s ruling, he analyzed the arguments, as is required at this phase of the litigation, taking the factual claims made by the plaintiffs in their most favorable light. Not only did the strategy of trying to plead the case prematurely fail, it backfired, since the defense has already exposed a considerable amount of its case prior to discovery. On top of that, some of the specific arguments on which the defendants lost bode ill for private equity and hedge fund managers generally if the plaintiffs ultimately prevail.
A “fintech sandbox” might sound like a harmless idea. It's not - Last week Kuwait became the latest sandy territory to announce it was setting up a regulatory "sandbox" for fintech companies (following in the footsteps of similarly arenaceous Bahrain, Abu Dhabi, and Arizona, which earlier this year became the first place in the US to set one up).A regulatory sandbox is a bit like a regular sandbox, except with no sand, no children, and no discernible fun. Instead, it is essentially a programme — normally running for several months — that allows early-stage fintech start-ups to test out their offerings in a limited market environment, under regulatory supervision, but without having to be fully licensed.That might sound pretty harmless. In practice, it's not. Regulators' primary role is to protect consumers — often, ironically, precisely from the kind of "financial innovation" the companies in the sandbox are offering — and to safeguard financial stability. It is not regulators' job to provide start-ups with free marketing or any kind of stamp of approval, which is how they are often being used (more on that later). Worryingly, there now appears to be a kind of race to the bottom among global regulators to set up the most "light-touch" possible regimes so as to attract start-ups to their jurisdictions — whether or not they are offering consumers and investors anything useful. Sandboxes are a part of that.Consider, for example, the title of this email about the Arizona sandbox, sent to us back in September (if this is what they're sending to journalists, what are they sending to industry?) :Arizona State Offering Regulation-free Access for UK Companies"Regulation-free access"! What could possibly go wrong? Arizona has so far only signed up three participants in its regime. One of these is listed on the official website as "a financial service platform implementing an array of avante garde [sic] technologies". Some are born great, some achieve greatness, and some get accepted into a fintech sandbox
U.S. Treasury Sanctions Bitcoin Wallets For First Time --Last week, the U.S. Treasury Department of Foreign Assets Control (OFAC) targeted two bitcoin addresses, announcing that the wallets associated Iranian citizens Ali Khorashadizadeh and Mohammad Ghorbaniyan had been added to the Specially Designated Nationals sanctions list.The sanctions, which are the first of their kind, are part of a wider move to track and restrict movements in the digital space involving money laundering and cybercrime.Additionally, the OFAC noted that the agency would be looking into exchanges who facilitated transactions by these individuals, stating “We are publishing digital currency addresses to identify illicit actors operating in the digital currency space. Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and AML/CFT safeguards to further their nefarious objectives.”The cause for the sanctions, according to the OFAC, was that Khorashadizadeh and Ghorbaniyan were involved in malicious SamSam ransomware attacks.In addition to the sanctions placed on Khorashadizadeh and Ghorbaniyan, it is noted that two others, Faramarz Shahi Savandi, and Mohammad Mehdi Shah Mansouri had been officially charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit fraud related to computers, and other counts accusing them of intentionally damaging protected computers and illegally transmitting demands related to protected computers. The SamSam ransomeware has impacted over 200 victims to date, including hospitals, corporations, universities and government facilities.
Bitcoin falls 10% as bad news descends like ‘cockroaches coming out of a hole’ Cryptocurrency prices fell sharply on Friday, as another bout of selling took digital currencies to fresh lows. Bitcoin, the world’s No. 1 digital currency, crashed through support at $3,500, falling more than 10% to a 15-month low at $3,230 on the Kraken exchange. A minor bounce has a single bitcoin currently fetching $3265.00, down 9.3% since 5 p.m. Thursday. “The price of bitcoin has crippled on the back of this and I think it is likely that the price may not only drop below the $2K mark, but with this kind of momentum behind it, the price can test the 1500 level,” said Naeem Aslam, chief market analysts at Think Markets U.K. in a research note. “Simply put, the bad news keeps coming just like cockroaches coming out of a hole.” But Aslam said the rout has to stop somewhere, which presents a golden opportunity for crypto believers. “This is a crypto market which has the ability to blow your mind and the downside is limited and the price at its current level represents an opportunity of a lifetime,” he said. Bitcoin has now fallen 84% from its all-time high above $19,000.
Wall Street Rule for the #MeToo Era: Avoid Women at All Cost - No more dinners with female colleagues. Don’t sit next to them on flights. Book hotel rooms on different floors. Avoid one-on-one meetings.In fact, as a wealth adviser put it, just hiring a woman these days is “an unknown risk.” What if she took something he said the wrong way?Across Wall Street, men are adopting controversial strategies for the #MeToo era and, in the process, making life even harder for women.Call it the Pence Effect, after U.S. Vice President Mike Pence, who has said he avoids dining alone with any woman other than his wife. In finance, the overarching impact can be, in essence, gender segregation.Interviews with more than 30 senior executives suggest many are spooked by #MeToo and struggling to cope. “It’s creating a sense of walking on eggshells,” said David Bahnsen, a former managing director at Morgan Stanley who’s now an independent adviser overseeing more than $1.5 billion.This is hardly a single-industry phenomenon, as men across the countrycheck their behavior at work, to protect themselves in the face of what they consider unreasonable political correctness -- or to simply do the right thing. The upshot is forceful on Wall Street, where women are scarce in the upper ranks. The industry has also long nurtured a culture that keeps harassment complaints out of the courts and public eye, and has so far avoided a mega-scandal like the one that has engulfed Harvey Weinstein. Now, more than a year into the #MeToo movement -- with its devastating revelations of harassment and abuse in Hollywood, Silicon Valley and beyond -- Wall Street risks becoming more of a boy’s club, rather than less of one.While the new personal codes for dealing with #MeToo have only just begun to ripple, the shift is already palpable, according to the people interviewed, who declined to be named. They work for hedge funds, law firms, banks, private equity firms and investment-management firms.
Occupy Jamie Dimon: Activists Are Chasing the Billionaire Across the U.S. -- Jamie Dimon was on stage at a community college in Ohio in November, telling students not to get scared by the snakes and alligators they’ll see in life. A few feet away, an activist named Ruth Breech reminded herself to stay calm: “I need to be ready.” When JPMorgan Chase & Co.’s leader paused a moment and looked to his left, Breech, at 5-foot-2, was standing beside his chair. “It’s so good to see you again,” she said. She and another protester raised a banner: “Chase: Stop profiting off dirty energy.” Dimon adjusted his tie. Dimon had just become the only remaining Wall Street boss who led a global bank before the financial crisis. JPMorgan is so big and profitable, and the billionaire has won so much influence, that he’s being followed around the U.S. by a growing crew of critics who want the bank to join their fights against climate change, human-rights abuses, and private prisons. They’ve tried to get his attention by scaling Park Avenue flagpoles, blocking Seattle traffic with tepees, bursting into conferences, and blasting audio of crying children outside his apartment.They’ve gotten louder since Donald Trump became president, turning to corporate behemoths and their celebrity executives to help solve problems that Washington creates or ignores. Years after Occupy Wall Street was driven out of Lower Manhattan, Dimon’s critics add up to one of the biggest protest movements in finance. It’s a preview of what might happen if he were ever to run for office. Even though Dimon swats down speculation that he’ll run for president, he said in September that he could beat Trump in an election.“When government actors are ignoring their responsibility to listen to regular people who don’t have lots of money, these other avenues, like corporate actors, are all the more important,” says Moira Birss, an environmentalist who interpreted for Spanish-speaking activists at the bank’s shareholder meeting in May. “People like Jamie Dimon should welcome those opportunities.” Protesters have targeted Wall Street for years, but criticism at the annual conclave has shifted from the traditional corporate complaints about pay and risk-taking. The CEO is annoyed by the activism that now overshadows the event. “The shareholder meeting has become a farce,” Dimon told clients and employees in Washington in October. “I’m not against social groups,” he said, but the meetings “get hijacked.” A JPMorgan spokesman declined to comment.
Lenders Charging 'Mafia-Style' Interest Rates Facing NY State Investigation - Five months after the "godfather of payday lending" was sentenced to a 14-year prison term and stripped of $64 million in assets after a jury found him guilty of effectively extorting and exploiting nearly 1.5 million low-income borrowers, and just days after Bloomberg published the final installment in a series of investigative reports describing how small-business cash advance lenders transformed New York Courts into a debt collection machine - and widely engaged in fraud and abuse, including inventing loan defaults out of thin air to seize exorbitant sums from their unsuspecting customers - the New York State Attorney General is launching a civil probe into abuses by pay day lenders targeting contractors, truck drivers and other small businesses in the state. According to Bloomberg, Attorney General Barbara Underwood is investigating merchant cash-advance companies who engage in fraud or have abused the state court system. Underwood office kicked off their investigation last week by subpoenaeing one of the state's largest cash-advance companies, Yellowstone Capital. Underwood accused Yellowstone - which refused a Bloomberg request for comment - of defrauding and deceiving small business owners by using deceptive fine print that effectively robbed the company's borrowers of their right to legal recourse. "It’s reprehensible to defraud, deceive and harass small-business owners through predatory debt-collection practices and the abuse of our court system," Underwood said in a statement to Bloomberg News that didn’t provide details. "If a company is engaging in fraudulent and deceptive conduct, we want to know." Underwood said her office has been monitoring the industry "for some time" but only decided to act after Bloomberg published its investigation. The civil probe is still in its early stages. Some of these lenders charge usurious interest rates as high as 400% annually - higher than the rates charged by Mafia loansharks. Companies get around restrictions on lenders by categorizing their "loans" as cash advances on future business receipts - a technicality that courts have largely protected.
CFPB orders State Farm Bank to improve credit reporting practices -- The Consumer Financial Protection Bureau on Thursday ordered State Farm's banking subsidiary in Bloomington, Ill., to stop providing inaccurate information to credit bureaus and to cease obtaining credit reports for no permissible purpose other than to solicit consumers for auto loans. State Farm Bank’s President and CEO, Joe R. Monk Jr., signed the stipulation and consent order with the CFPB on Nov. 29 without admitting or denying any wrongdoing. The CFPB did not impose a fine on State Farm for violations of the Fair Credit Reporting Act such as furnishing inaccurate information to credit reporting agencies. The bureau said from 2012 to September 2016, State Farm had no specific guidance for complying with the FCRA, nor did the bank have processes in place on the accuracy and integrity of information furnished to the major credit bureaus, in violation of Regulation V. The CFPB also did not specify how many consumers were harmed by State Farm’s alleged practices of obtaining credit reports on consumers without a “permissible purpose.” The CFPB alleged that “in certain instances when the consumer had neither applied for a loan nor authorized Respondent to obtain a consumer credit report, Agents and Team Members initiated vehicle-loan applications for consumers for the purpose of soliciting those consumers, thereby triggering a credit inquiry.” Last year, State Farm developed and implemented a consent management system to reduce the likelihood of obtaining or using a consumer report without a permissible purpose, the agency said. The CFPB did not specify whether any consumers had had their credit damaged by State Farm's allegedly providing inaccurate information to credit reporting agencies or taking months to correct inaccurate information after consumers had complained.
CFPB catches flak from banks, credit unions on risks of AI - The Consumer Financial Protection Bureau on Thursday got an earful on the use of artificial intelligence from members of three advisory boards who said traditional financial institutions are at a competitive disadvantage against nonbank fintech firms. Federal financial regulators have pushed banks and credit unions to adopt new innovation such as AI, most recently in a statement related to anti-money-laundering procedures. But bank executives and other members of the panels warned that AI poses risks, and companies that present a concern are not regulated. They urged the CFPB to conduct more oversight and research. “One of the reasons [banks] sometimes take a bad rap at not being innovative is because we do have regulators that do come in and look at our vendor management, but what’s missing is [oversight] of those companies currently outside of the financial services industry,” said Bryan Bruns, president and CEO of the $150 million-asset Lake Central Bank in Annandale, Minn. “How are you going to beef up the regulatory enforcement?” The CFPB invited the feedback at a joint meeting of the Consumer Advisory Board, Community Bank Advisory Council and Credit Union Advisory Council. The advisory panels, which are statutorily required to meet twice a year, were recently reconstituted after acting CFPB Director Mick Mulvaney fired the prior members of the boards and reduced the size of the new Consumer Advisory Board. Banks and credit unions are required to examine third-party vendors but many are overwhelmed by the sheer amount of regulation required to bring in an AI vendor, council members said. With fintech companies not required to perform the same level of validation, they said, there is an unlevel playing field.
Mulvaney's misfire: CFPB name change could cost industry millions of dollars - From the beginning, acting Consumer Financial Protection Bureau Director Mick Mulvaney’s desire to change the name of the agency he runs was a strange one. Insisting that the "Consumer Financial Protection Bureau does not exist" because the Dodd-Frank Act that created it referred instead to the Bureau of Consumer Financial Protection, he changed the agency’s logo to BCFP and recommended the financial services industry follow suit. But here's the thing: Dodd-Frank referred to both the CFPB and BCFP in its statutory language and changing the bureau’s name (and its abbreviation) didn’t accomplish anything other than to confuse the industry it supervises and consumers it protects.Then again, maybe that's the point. Critics were quick to accuse Mulvaney of changing the name precisely to lower the CFPB’s brand recognition with consumers, particularly given that the former South Carolina congressman was an outspoken opponent of the agency’s creation. After all, CFPB gets 3.4 million monthly searches on Google. BCFP doesn't really register. It’s hard for consumers to turn to an agency for which they don’t even know the name.Still, the financial services industry mostly shrugged at the name change. Banks, credit unions and their trade groups appear largely to be going along with Mulvaney’s plan.But based on a surprising new internal agency analysis, they may want to rethink that — and fast.According to The Hill, the internal analysis shows the financial services industry would pay approximately $300 million if the CFPB goes through with forcing a name change. As the paper reported:“The CFPB enforces dozens of financial regulations meant to protect and inform consumers who have purchased loans or lines of credit. The agency’s analysis found that firms would be forced to spend roughly $300 million total to update internal databases, regulatory filings and disclosure forms with the new name in order to comply with those rules. An agency analysis estimated that the changes necessary to comply with the Fair Credit Reporting Act, the Electronic Fund Transfer Act and certain mortgage regulations would cost firms $100 million for each rule.” In addition, the name change would cost the government between $9 million to $19 million, The Hill said.
Senate barely confirms Kathy Kraninger as new CFPB director — Kathy Kraninger, a senior official at the Office of Management and Budget, was confirmed by the Senate Thursday to serve as director of the Consumer Financial Protection Bureau, following a tumultuous year for the agency under acting Director Mick Mulvaney. The nomination was barely approved, passing the chamber 50-49 after Democrats strongly opposed Kraninger due to concerns she lacked any experience in consumer finance. Progressive lawmakers also argue Kraninger was partly responsible for the Trump administration's "zero tolerance" policy of separating migrant children from their families at the border. (Sen. Tom Tillis, R-N.C., was the sole senator not to vote.) Republicans, on the other hand, cited her management experience in their support of the nomination. “Ms. Kraninger brings a wealth of experience to an agency in need of a renewed, consumer-focused mission,” said Senate Majority Leader Mitch McConnell, R-Ky., in a press release before the vote. CFPB Director-designate Kathy “Kraninger has no track record at all of consumer protection, or of standing up for vulnerable people," said one consumer advocacy group. A banking group said she believes in appropriately tailoring regulation. Mulvaney, who also serves as head of OMB where Kraninger works, applauded the nomination. "Kathy is going to be an absolutely tremendous leader here," Mulvaney said during a conference call Thursday with the bureau's consumer advisory boards. "The transition will be about as seamless as it could possibly be. While she has a different style than I do and different priorities ... the transition will be seamless."
Dow closes down 800 points as U.S.-China trade, flattening yield curve spook investors - U.S. stocks finished sharply lower Tuesday, logging their worst day in nearly a month, as skepticism mounted over the significance of an agreement reached by the U.S. and China to postpone new tariffs and as the market digested a flattening yield curve in U.S. government debt. The Dow Jones Industrial Average sank 799.36 points, or 3.1%, to 25,027.07, while the S&P 500 index SPX, -3.24% dropped 90.31 points, or 3.2%, to 2,700.06. The Nasdaq Composite Index tumbled 283.09 points, or 3.8%, to 7,158.43. The financial and industrial sectors were the biggest losers while utilities were the sole gainer in the S&P 500. All three benchmarks had their worst day since Oct. 10.Doubts surrounding the U.S. and China’s ability to achieve a concrete deal to avoid new, or expanded, bilateral tariffs are rising, as investors focused on the lack of specific concessions made by China at last weekend’s G-20 meeting in Argentina, where President Donald Trump and Chinese President Xi Jinping met. While the U.S. agreed to a 90-day moratorium on threats to raise tariffs on more than $200 billion in imports to 25% from 10%, a comparison of official statements from Chinese and U.S. officials suggests there may be a long way to go before the two camps are able to come to an agreement that can ease tensions more permanently. The flattening of the U.S. yield curve is also weighing on sentiment as yields on government debt continue to fall. On Monday, the yield on five-year government debt slid below the yield on three-year debt, a phenomenon which has preceded previous recessions, and a sign that investors are more confident about current than future economic growth as the Federal Reserve raises rates. A more widely followed spread between the two-year yieldand the 10-year rate tightened to its narrowest in 11 years. This ratio is a popular gauge of future economic growth, and if the 10-year yield falls below the two-year, it will raise significant concerns of an impending recession.New York Fed President John Williams said that the U.S. economy is “in really good shape,” during a panel discussion with Fed economists in New York on Wednesday.
Dow extends deep losses, triggered by uncertainty on U.S.-China trade deal - After a reprieve for a national day of mourning, U.S. stock markets on Thursday extended an across-the-board rout triggered by signs that the prospect of a U.S.-China trade deal was in jeopardy. Investor angst was fueled by the arrest of a Chinese executive that further threatened progress on trade, coupled with omens of a recession in the bond market and a steep drop in oil prices. In morning trading, the Dow Jones industrial average fell more than 750 points, or 3.1 percent. The tech-heavy Nasdaq was down 2.4 percent, pushing deeper into correction territory. Correction is a drop of at least 10 percent from the high. The Standard & Poor’s 500-stock index was off 2.9 percent. By the early afternoon, the losses had eased.The Dow and S&P 500 have both given up all gains for the year — and are having their worst quarter in seven years. The energy and technology sectors were the biggest drag on the S&P as trading opened.The Organization of Petroleum Exporting Countries began a crucial meeting Thursday in Vienna in hopes of agreeing on a production cut of 1 million barrels per day. Oil prices are down 30 percent in the fourth quarter on overproduction across world producers. Prices slipped further Thursday on fears that Saudi Arabia will not cut production enough to stabilize prices. Anything short of 1 million barrels per day would likely be disappointing for producers.
Corporate America's Next Crisis- The $1.6 Trillion Debt Tsunami Of Worry -- Much has been said about the threat that some $3 trillion in BBB-rated bonds (out of a total investment grade universe of $6.4 trillion)present to the credit market, with growing fears that the next economic slowdown will see over $1 trillion in "fallen angel" credit swamp the junk bond market, sending yields and spreads sprinting higher. Less has been said about the risk of higher-rated A and AA bonds being downgraded to BBB on their way to junk (although we touched on this threat too last Friday in "A Record $90 Billion A-Rated Bonds Downgraded To BBB In Q4"). But while the risk of a wholesale downgrade of the investment grade market is increasingly being priced in by the market - even if the timing remains suspect and might even be postponed if the Fed were to cut rates in 2019 as JPM observed overnight when noting the inversion in the front-end (2Y-1Y forwards spreads) of the US curve, a new big concern for the credit market is emerging, and here the timing of the imminent threat is all too urgent. Because while some may be tempted to ignore the BBB downgrade "wall of worry", corporate America is now facing a "maturity tsunami of worry" that is some 1.6 trillion dollars high. As the following chart from BNP Paribas shows, a wall of maturing debt is about to slam head on into S&P 500 companies. Commenting on the chart, BNP understandable writes that it is "concerned by the maturity wall of bonds that need to be refinance over the next few years." And, as Bloomberg's Sebastian Boyd observes, said maturity wall is made even scarier by adding the amount available in untapped revolvers, which is money that in theory doesn't need to be paid back and splits the counterparty risk with the company's bank lenders (see GE). More than a wall, the debt coming due is a wave that has been building for a decade. Or, as we called it above, a tsunami, which will hit both viable and "zombie" companies with billions in higher interest expense costs once the wave finally breaks, some time in 2019.That said, nothing shown in the chart above should come as a surprise as the amount of newly issued debt (and also debt coming due) has been growing at an exponential rate over the past decade. Indeed, a historical chart looks truly impressive - or terrifying - considering that the amount of investment-grade bonds coming due in 1-3 years in June 2007 was only $360 million. Back then the spread on the overall index was in the mid-90s, roughly where it was in the first months of this year. However, as Boyd notes, the market cap of the Bloomberg Barclays 1-3 Year Credit index reached a record high of $1.4 trillion at the end of September, or roughly three times what it was before the crisis. Finally, just as troubling is this chart from SRP which in addition to IG, also incorporates the amount of junk bond maturities in the coming decade.
It Feels Like 2006 - Subprime Auto Loan Issuance Soars Amid Record Investor Interest - As the market continues to show signs of topping, euphoric investors apparently now believe that it's a great time to pile into the riskiest of subprime auto loans, according to a new Wall Street Journal article. Investors this year have been buying record amounts of subprime auto securitization deals that have single-B credit rating components to them. These are deals that are easily considered to be "junk" and are "the lowest grade offered when such bonds are sold". According to data from Finsight, lenders have already issued $318 million in single-B rated debt in 2018, which is more than "all prior years combined". The appeal of these deals is the high yield, which comes as a result of the additional risk that investors bear with loans to borrowers who have FICO scores below the mid 600 level. These deals are layered with different tiers, each with a different level of risk and return based on how and when they receive payments. Single B tranches are generally the last in line for bondholders, which sometimes result in these deals paying rates of more than 6%, or about twice what the 10-year pays. In exchange, they are the first to bear risk. But not everybody is willing to bear this risk. Evan Shay, an asset-backed securities analyst at money manager T. Rowe Price, told the Journal: “It would be one thing if it was year two of the recovery and performance was rock solid and we were off to the races. The issuance late in the economic cycle appears to be raising some eyebrows.”
CMBS loan delinquency rates fall for fifth quarter in a row- MBA - The performance of loans included in commercial mortgage-backed securities improved for the fifth consecutive quarter, with delinquencies down 179 basis points over the time frame, according to the Mortgage Bankers Association. CMBS loans that are at least 30 days late or real estate owned fell 47 basis points to 3.05% in the third quarter. In the second quarter, CMBS loans had a 3.52% delinquency rate, while in the third quarter last year the rate was 4.6%. At its most recent peak in the second quarter of 2017, the delinquency rate was 4.84%. The MBA report compiles delinquency rates across five investor types and used the measurement standard each group established. As a result, comparisons across investor types is not possible. "Loans held in CMBS have a higher 'headline' delinquency rate because of the way the industry reports on those loans," Jamie Woodwell, vice president for commercial real estate research, said in a press release. "However, when excluding loans in foreclosure or REO — which are generally omitted from the calculations for the other groups — the CMBS delinquency rate is just 45 basis points, the same level as December 2005." Among banks and thrifts, where the measurement is loans that are 90 days or more late or in non-accrual status, the delinquency rate set a new series low at 0.48%, Woodwell said. This was down 2 basis points from the second quarter and 5 basis points from one year prior. The only investor type that saw an increase in its delinquency rate was life insurers, where 0.04% of mortgage investments were 60 days or more late, up 1 basis point from the prior quarter and 2 basis points year-over-year. For Fannie Mae multifamily loans, the 60-day delinquency rate fell 3 basis points from the second quarter to 0.07%, but this was 4 basis points higher than one year ago. Freddie Mac's 60-day delinquency rate of 0.01% was unchanged from the second quarter and down 1 basis point from the third quarter of 2017.
Waters likely to raise affordable housing’s profile in GSE debate — One particular difference between a House Financial Services Committee likely led by Rep. Maxine Waters, D-Calif., and her GOP predecessor could be a newfound focus on affordable housing issues. Expanding housing opportunities through government trust funds and other assistance programs has received little attention under current Chair Jeb Hensarling, R-Texas. But with the change in House control and Waters' focus on the issue throughout her career, observers expect the committee to have a new emphasis on affordable housing as part of discussions on reforming Fannie Mae and Freddie, as well as scrutiny of Department of Housing and Urban Development programs and broader efforts to reduce homelessness. “She’s championed the National Housing Trust Fund program, and she’s a big champion of the public housing program and of protecting residents in public housing, so I would expect her to use her chairing of the committee, if she becomes the chair, to really advance those issues,” said Diane Yentel, the president and CEO of the National Low Income Housing Coalition. Affordable housing has often been a sticking point in plans to reform the government-sponsored enterprises. Hensarling’s bipartisan GSE reform proposal was met with criticism from some Democrats who felt that the plan did not do enough to address housing affordability. But under Waters, many expect the National Housing Trust Fund to be back in the spotlight. The fund, along with the Capital Magnet Fund, is supposed to receive financing from Fannie and Freddie. The NHTF was a prominent piece of Waters' 2014 GSE reform proposal. Her bill would have directed 10 basis points per covered mortgage-backed security to three trust funds, with 75% going to the National Housing Trust Fund. Waters' signaled her interest in shining a spotlight on affordable housing issues last month. Following the midterm elections, she listed "expanding and supporting affordable housing opportunities and tackling the homelessness crisis" among her priorities if selected to chair the committee. In a letter to colleagues after the election, Waters highlighted a bill she introduced in June 2017 to provide one-for-one replacement of public housing units and fund public housing capital and operating funds. "Unfortunately, this country is experiencing a rental housing crisis and homelessness is on the rise," she wrote.
CFPB fines mortgage lender over claims it deceived veterans - The Consumer Financial Protection Bureau ordered Village Capital & Investment, a nonbank mortgage lender in Henderson, Nev., to issue refunds and pay a fine for allegedly misleading veterans about refinancing their mortgages. The CFPB filed a federal lawsuit Tuesday in the U.S. District Court for the District of Nevada, alleging Village Capital loan officers misrepresented the cost savings to veterans when pitching so-called interest rate reduction refinancing loans. The nonbank lender made in-home sales presentations to veterans in San Antonio to induce them to refinance loans that were guaranteed by the Department of Veterans Affairs, the CFPB said. The loan officers inflated the amount of principal that veterans owed on their existing mortgages, underestimated the future monthly payments to be paid on refinanced loans, and overestimated the total monthly benefit of refinancing, according to the agency. Village Capital has 100 employees and operates 10 branches in 10 states. Allen Knudson, Village Capital's president, said the company cooperated with the CFPB, verified that disclosures were "timely and accurate," and that every veteran received "a significant benefit from their refinance." "We volunteered to help in any way possible to make sure our Veterans were treated with the respect they deserve," Knudson said in an emailed statement. The CFPB said Village Capital engaged in deceptive sales practices from March 2017 to August 2018, yet the bureau did not state how many veterans had been deceived or had obtained loans from the lender during that period. The bureau filed a proposed stipulated final judgment that requires Village Capital to pay $268,869 in redress to consumers and a $260,000 penalty. The enforcement action is the 10th brought by the agency this year under acting CFPB Director Mick Mulvaney. Such actions have declined significantly under his watch compared with the level under his predecessor, Richard Cordray. Subsc
Wells Fargo computer glitch blamed as hundreds lose their homes - Wells Fargo says a computer glitch is partly to blame for an error affecting an estimated 545 customers who lost their homes. The giant bank filed papers with the Securities and Exchange Commission last month, revealing it incorrectly denied 870 loan modification requests. About 60 percent of those homeowners went into foreclosure. Legislators, housing advocates, regulators and most importantly, the people who lost their homes – people like Jose Aguilar – are asking how this happened. "It's been very hard for me. It's something I wouldn't wish upon anybody," Aguilar told CBS News correspondent Anna Werner. These days, Aguilar can only drive by the home he and his family lost to foreclosure three years ago, the small ranch house in upstate New York where they wanted to raise their children. "I used to look there and see how many times my kids and I used to run up and down, ride our bikes," Aguilar said. "At first they told me, 'OK, you know, you might be able to qualify for a loan modification,'" Aguilar said. But he said then came the delays – weeks, then months – waiting for a decision. "Then the whole process just started all over again. And then it got to the point we were a year behind," Aguilar said. Finally, Wells Fargo turned them down.He and his wife split up. The house went into foreclosure. With the hit to his credit, Aguilar said he found no one would rent to him. "At that point my son and I had to move to the basement of a friend's house and we stayed there for three months, and we had nothing. We had a couch and my son had a bed," Aguilar said, choking up with emotion. "I felt worthless. I felt like I had let my family down." Then in September this year, nearly three years later, he got a letter from Wells Fargo. "Dear Jose Aguilar," it read, "We made a mistake… we're sorry." It said the decision on his loan modification was based "on a faulty calculation" and his loan "should have been" approved.
12 housing markets where foreclosures are spiking - Foreclosure activity is down nationwide from a year ago, but certain local housing markets tell a different story. Overall, there were 66,401 properties with foreclosure filings in October, a jump of 21% from the previous month's all-time low, but still a 4% decrease from the same period last year, according to Attom Data Solutions. Despite this annual decline, some cities are seeing alarming leaps in foreclosure activity — with filings increasing around 350% in certain local markets. For example, many Gulf Coast markets are just now seeing an uptick in foreclosures from natural disasters in 2017. Servicers offered forbearances and foreclosure moratoriums in the initial aftermath of Hurricanes Harvey and Irma and are now starting to resume normal default servicing operations."We saw an initial foreclosure moratorium in those markets, to give people relief who had been affected by the hurricanes, but now lenders are playing catch-up and actually filing some of those deferred foreclosures," said Attom Senior Vice President Daren Blomquist."The effects have masked that there are more widespread increases in foreclosure activity," he added.Here's a look at 12 housing markets where foreclosure filings are surging. The October foreclosure data, from Attom, is ranked by the largest annual gains in foreclosure filings for Metropolitan Statistical Areas with at least 100,000 housing units. The filing totals include preforeclosure notices; public foreclosure auctions; and completed foreclosure actions.
California's mortgage defect risk elevated following wildfires - There was an 8% year-over-year increase in mortgage loan application defect risk in California during October and that should rise further because of the wildfires that devastated the state, First American said.The overall defect risk index increased by 1.3% to 79 in October from 78 in September, the third month-to-month increase in a row. However, the index is down by 4.8% from 83 in October 2017.In California, the index rose to 80 from 79 in September and 74 in October 2017. The year-over-year increase is the third largest among the 50 states on a percentage basis. Past trends have shown that natural disasters and increased loan application defect risk go hand-in-hand, said First American Chief Economist Mark Fleming in a press release."In the aftermath of the December 2017 Thomas Fire in Ventura and Santa Barbara counties, mortgage defect, fraud and misrepresentation risk increased 10% in one month in the Oxnard-Thousand Oaks-Ventura metropolitan area," said Fleming. "Fraud and misrepresentation risk remained elevated for five months after the wildfire, before trending down again. Defect, fraud and misrepresentation risk in the Oxnard metropolitan area, which had been declining prior to the Thomas Fire, has yet to return to pre-wildfire levels."Rebuilding homes damaged in the two fires could cost as much as $18 billion, a CoreLogic analysis said. Application defect risk in California increased each month from November until April, before trending down until July. In the last two months, defect risk was back on the rise. While in the short term application defect risk in the affected markets is likely to remain elevated, in areas affected by last year's hurricanes, the situation has improved. In Florida, where the defect risk rose nine points last year between August and November because of Hurricane Irma, October's 86 was the lowest index value since February 2017.In Texas, where Hurricane Harvey devastated the Houston area, the index of 79 tied for the lowest since January 2017. In the states affected by Hurricane Florence earlier this year, the defect index for North Carolina rose three points from September to 84, while in South Carolina, it also rose three points to 82.The other states with the largest year-over-year percentage increases in defect risk were Alaska, up 17%; Hawaii, up 10%; Wyoming, up 7%; and Maine, up 7%.San Diego led all metro areas with a 16% increase, followed by Los Angeles, up 13%.
Insurance company overwhelmed by cost of California wildfire, goes out of business - The devastating California Camp Fire has caused such widespread damage that it has put at least one insurance company out of business. The local Merced County Insurance Company — whose client base is overwhelmingly located in the wildfire-prone Sacramento Central Valley area — announced this week that it was closing shop because it can’t pay out the expected fire-related insurance claims. The Camp Fire is the state’s most deadly and destructive fire on record, having destroyed almost as many structures as the subsequent 10 other worst fires in California’s history combined; thousands are without homes. A judge on December 3 approved the company’s liquidation proceedings. Documents filed by the company show it expected $64 million in outstanding liabilities in Paradise — the town effectively wiped out by the Camp Fire. The insurance company’s assets, however, sit at just $23 million. Individuals who need to file claims due to the fire shouldn’t be affected though — the California Insurance Guarantee Association (CIGA) will assume any outstanding claims. The CIGA was created by state law to protect policy holders in such a situation.
Gen X bought the most homes, but debt killed their American Dream - When Generation X was the age of millennials, they had significantly more financial assets — more even than the Boomer generation before them, according to a new report by the Federal Reserve Bank.If any generation could be called "entitled," it might have been Gen Xers — if it weren't for the typically large debt that ultimately crushed their chances of wealth. The economic environment in the years immediately before the financial crash made it easy for young adults at the time — members of Generation X, born from 1965 to 1980 — to buy homes, cars and other properties, and to invest in stocks. But when you subtract the average Gen Xer's debt — mostly the easy-to-obtain mortgages — they weren't much better off than young Boomers before them, Bill Emmons, assistant vice president at the Fed in St. Louis, tells Axios. More than half of Gen Xers owned homes when they were 21 to 36, around the age of millennials today. Just 33.9% of the same age group in 2016 owned homes, the Fed said.Young Gen Xers were also more likely to own stock at that age than millennials or boomers, at 28%, compared with 15% and 14%, respectively. Millennials lacked the same financial opportunity to buy homes as Gen Xers at their age, and "as house prices have grown, they haven't been able to cash into that in the same way," said Lowell Rickets, of the St. Louis Fed's Center for Household Financial Stability. But even with the student debt crisis, millennial median and average debt is less than that of the generation before them when they were the same age, according to the report..The bottom line: With the financial crash, the investments that Gen Xers made when they were young still haven't really paid off, according to Emmons, and ultimately left them worse off.
CoreLogic: 2.2 million Homes still in negative equity at end of Q3 2018 -- From CoreLogic: CoreLogic Reports Homeowners with Negative Equity Declines by Only 81,000 in the Third Quarter of 2018 CoreLogic … today released the Home Equity Report for the third quarter of 2018. The report shows that U.S. homeowners with mortgages (which account for roughly 63 percent of all properties) have seen their equity increase by 9.4 percent year over year, representing a gain of nearly $775.2 billion since the third quarter of 2017.Additionally, the average homeowner gained $12,400 in home equity between the third quarter of 2017 and the third quarter of 2018. While home equity grew in almost every state in the nation, western states experienced the most significant increases. California homeowners gained an average of approximately $36,500 in home equity, and Nevada homeowners experienced an average increase of approximately $32,600 in home equity. From the second quarter of 2018 to the third quarter of 2018, the total number of mortgaged homes in negative equity decreased 4 percent to 2.2 million homes or 4.1 percent of all mortgaged properties. Year over year, the number of mortgaged properties in negative equity fell 16 percent from 2.6 million homes – or 5 percent of all mortgaged properties – in the third quarter of 2018. The national aggregate value of negative equity was approximately $281.6 billion at the end of the third quarter of 2018. This is down quarter over quarter by approximately $1.1 billion, from $280.5 billion in the second quarter of 2018 and down year over year by approximately $2.7 billion, from $279 billion in the third quarter of 2017. “The number of homes in a negative equity position have remained around 2.2 million for two consecutive quarters this year,” said Frank Martell, president and CEO of CoreLogic. “Without equity, those homeowners are unable to sell their homes and are more likely to transition from delinquency to foreclosure if they face financial distress.” CR Note: A year ago, in Q3 2017, there were 2.6 million properties with negative equity - now there are 2.2 million.
Regulations could allow US homes to be bought and sold through electronic valuations - Federal regulators may allow the majority of homes to be bought and sold in the US without being evaluated by a licensed human appraiser. The proposal would increase the value of homes that can be bought and sold without a tape-measure-toting appraiser visiting a property from $250,000 to $400,000, according to The Wall Street Journal. The suggestion was made earlier this month by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Federal Reserve. The majority of US homes to be bought and sold through electronic valuations rather than human appraisers, according to new proposals Instead, house appraisals could be done by agents using computer algorithms instead of a licences human appraiser which could speed up the house buying process and make it cheaper. About 214,000 additional home sales, or some $68 billion worth, could have been made without an appraisal if the proposed change was made last year. More than two-thirds of US homes sell for $400,000 or less, according to US Census data and the National Association of Realtors. Regulators say the immediate effect of dropping the value requirements on appraisals would be limited because a vast majority of home loans in the price category are bought by mortgage giants or guaranteed by other federal agencies. Those properties typically require appraisals regardless of home value, a document written by the Federal Reserve states. It is thought that if the proposal came to fruition, it would lead to the creation of more property valuation companies, like HouseCanary Inc, which use artificial intelligence, algorithms and sometimes even drones to value homes.
CoreLogic: House Prices up 5.4% Year-over-year in October -- The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).From CoreLogic: CoreLogic Reports October Home Prices Increased by 5.4 Percent Year Over Year CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for October 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 5.4 percent year over year from October 2017. On a month-over-month basis, prices increased by 0.5 percent in October 2018. (September 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.)Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.8 percent on a year-over-year basis from October 2018 to October 2019. On a month-over-month basis, home prices are expected to decrease by 0.7 percent from October to November 2018. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.“Rising prices and interest rates have reduced home buyer activity and led to a gradual slowing in appreciation,” said Dr. Frank Nothaft, chief economist for CoreLogic. “October’s mortgage rates were the highest in seven and a half years, eroding buyer affordability. Despite higher interest rates, many renters view a home purchase as a way to build wealth through home-equity growth, especially in areas where rents are rising quickly. These include the Phoenix, Las Vegas and Orlando metro areas, where the CoreLogic Single-Family Rent Index rose 6 percent or more during the last 12 months.” CR Note: The CoreLogic YoY increase has been in the 5% to 7% range for the last few years. This is near the bottom of that range. The year-over-year comparison has been positive for over six consecutive years since turning positive year-over-year in February 2012.
The Housing Boom Is Already Gigantic. How Long Can It Last- - Robert Shiller - We are, once again, experiencing one of the greatest housing booms in United States history.How long this will last and where it is heading next are impossible to know now.But it is time to take notice: My data shows that this is the United States’ third biggest housing boom in the modern era.Since February 2012, when the price declines associated with the last financial crisis ended, prices for existing homes in the United States have been rising steadily and enormously. According to theS&P/CoreLogic/Case-Shiller National Home Price Index (which I helped to create) as of September, the prices were 53 percent higher than they were at the bottom of the market in 2012.That means, on average, a house that sold for, say, $200,000 in 2012 would bring over $300,000 in September. Even after factoring in Consumer Price Index inflation, real existing home prices were up almost 40 percent during that period. That is a substantial increase in less than seven years.In fact, based on my data, it amounts to the third strongest national boom in real terms since the Consumer Price Index began in 1913, behind only the explosive run-up in prices that led to the great financial crisis of a decade ago, and one connected with World War II and the great postwar Baby Boom. The No. 1 boom occurred from February 1997 to October 2006, when real prices of existing United States homes rose 74 percent. This was a period of intense speculative enthusiasm — for houses and for financial instruments based on mortgages as investments — and it was also a time of great regulatory complacency. The term “flipping houses” became popular then. People exploited the boom by buying homes and selling them only months later at a huge profit. That boom ended disastrously. Soaring valuations collapsed with a 35 percent drop in real prices for existing homes, ushering in the financial crisis that enveloped the world in 2008 and 2009.The second greatest boom, from 1942 to 1947, had more benign consequences. Over this five-year interval, real prices of existing homes rose 60 percent.
MBA: Mortgage Applications Increased in Latest Weekly Survey -- From the MBA: Mortgage Applications Rise in Latest MBA Weekly Survey:Mortgage applications increased 2.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 30, 2018. The results for the week ending November 23, 2018, included an adjustment for the Thanksgiving holiday.... The Refinance Index increased 6 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 36 percent compared with the previous week and was 0.2 percent higher than the same week one year ago....“Treasury rates continued to slide last week, driven mainly by concerns over slowing global economic growth and U.S. and China trade uncertainty. The 30-year fixed-rate fell for the third week in a row to 5.08 percent and has declined a total of nine basis points over this span,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Application activity increased over the week for both purchase and refinance loans, and were 10 percent and 7 percent higher, respectively, than the week before the Thanksgiving holiday. Additionally, we saw a decrease in the average loan size for purchase applications to the lowest since December 2017 ($298,000 from $313,000). This is perhaps an indication that there are fewer jumbo borrowers, or maybe first-time buyers are having better success reaching the market as we close out the year.”..The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 5.08 percent from 5.12 percent, with points decreasing to 0.44 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall 50 bps or more from the recent level.
Average mortgage rates drop as investors flee stocks for bonds - Mortgage rates dropped this past week as investors pulled money from the stock market over global trade worries and instead purchased bonds, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.75% for the week ending Dec. 6, down from last week when it averaged 4.81%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.94%. . Mortgage rates are at their lowest levels in two months because of the uncertainty over global trade and the U.S.-China relationship in particular, added Aaron Terrazas, Zillow's senior economist. "Investors rapidly retreated to safe haven assets in a move reminiscent of previous global scares over the past three years that have repeatedly held long-term lending rates down even as short-term rates have increased," Yields on the benchmark 10-year Treasury, which had been above 3% since mid-September, broke below that barrier on Dec. 3 and fell to 2.85% as of 11 a.m. on Dec. 6. The 15-year fixed-rate mortgage this week averaged 4.21%, down from last week when it averaged 4.25%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.36%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.07% with an average 0.3 point, down from last week when it averaged 4.12%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.36%.
Lawler: Excerpt from Toll Brothers Earnings Press Release: Via housing economist Tom Lawler: Excerpt from Toll Brothers Earnings Press Release “In our fourth quarter, despite a healthy economy, we saw a moderation in demand. Fourth quarter contracts declined 15% in dollars and 13% in units compared to a difficult comp from one year ago. Fourth quarter demand slowed to a per community pace more consistent with FY 2016’s fourth quarter, which was still strong. “In November, we saw the market soften further, which we attribute to the cumulative impact of rising interest rates and the effect on buyer sentiment of well-publicized reports of a housing slowdown. We saw similar consumer behavior beginning in late 2013, when a rapid rise in interest rates temporarily tempered buyer demand before the market regained momentum. “California has seen the biggest decline. Significant price appreciation over the past few years, fewer foreign buyers in certain communities, and the impact of rising interest rates all contributed to this slowdown. But California is the world’s fifth largest economy with diverse, job-creating industries, including vibrant technology companies, a large concentration of wealth, and desirable lifestyle options. With our attractive coastal California land, our leading brand, and the state’s constrained supply of housing, we continue to believe in our long-term position in the California market.” Lawler adds: Toll Brothers’ fiscal fourth quarter (and fiscal year) ended October 31, 2018. For the three months ending 10/31/18 Toll Brothers’ net contracts in California totaled 226 (at an average contract price of $1,815,800), down 39.4% from the comparable quarter of 2017 (when the average contract price was $1,624,400).
San Diego County wants to build 10,000 new homes in fire-prone areas - The San Diego region has no shortage of homes next to fire-prone hillsides covered in highly flammable chaparral and grasslands. The undulating, arid topography has carried flames at mind-boggling speeds in some of the state's most destructive blazes. Now elected officials in the county want to add another roughly 10,000 homes in areas largely labeled by Cal Fire as posing a "very-high" fire hazard. Those units would come in the form of eight new sprawling housing projects, which have drawn widespread opposition and even lawsuits. While the development, county supervisors have said the housing is badly needed and that, in each case, developers have laid out exhaustive fire-prevention blueprints. Elected officials have stressed that those plans are reviewed and approved by local fire districts or Cal Fire. "I take every decision I make very seriously and always rely heavily on the feedback provided by our fire experts, the firefighters," said board chair Kristin Gaspar in an email. Environmental groups, who have opposed the projects on a number of grounds, renewed their attacks in November following what became the state's most deadly and destructive blaze, Northern California's Camp Fire. "It's a huge risk putting thousands of live in these areas where we know fire is going to happen," said Tiffany Yap, an advocate with the Center for Biological Diversity, which estimates the projects would put as many as 40,000 people in danger of wildfire. County staff declined several requests for interviews on the topic, citing ongoing litigation against the projects that have already received needed amendments to the county's 2011 general plan -- Newland Sierra, Valiano, Harmony Grove Village South and Otay 250 Sunroad. Supervisor Dianne Jacob, being absent for the votes in question, is the only member of the board not to vote to approve the projects. She said that changes to established zoning rules must be weighed against wildfire risk.
Construction Spending decreased slightly in October - From the Census Bureau reported that overall construction spending decreased slightly in October:Construction spending during October 2018 was estimated at a seasonally adjusted annual rate of $1,308.8 billion, 0.1 percent below the revised September estimate of $1,310.8 billion. The October figure is 4.9 percent above the October 2017 estimate of $1,247.5 billion. Private spending decreased and public spending increased: Spending on private construction was at a seasonally adjusted annual rate of $998.7 billion, 0.4 percent below the revised September estimate of $1,003.0 billion. ... In October, the estimated seasonally adjusted annual rate of public construction spending was $310.2 billion, 0.8 percent above the revised September estimate of $307.8 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.Private residential spending had been increasing - although has declined recently - and is still 21% below the bubble peak.Non-residential spending is 11% above the previous peak in January 2008 (nominal dollars). Public construction spending is now 5% below the peak in March 2009, and 19% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending. On a year-over-year basis, private residential construction spending is up 2%. Non-residential spending is up 6% year-over-year. Public spending is up 8% year-over-year. This was below consensus expectations, and spending for August and September were revised down. A weak report.
Update: Framing Lumber Prices Down Year-over-year --Here is another monthly update on framing lumber prices. Lumber prices declined from the record highs earlier in 2018, and are now down over 20% year-over-year.This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through November 9, 2018 (via NAHB), and 2) CME framing futures. Right now Random Lengths prices are down 22% from a year ago, and CME futures are down 29% year-over-year. There is a seasonal pattern for lumber prices. Prices frequently peak around May, and bottom around October or November - although there is quite a bit of seasonal variability.
Fed's Flow of Funds: Household Net Worth increased in Q3 -- The Federal Reserve released the Q3 2018 Flow of Funds report today: Flow of Funds.According to the Fed, household net worth increased in Q3 2018 to $109.0 Trillion, for $106.9 Trillion in Q2 2018: The net worth of households and nonprofits rose to $109.0 trillion during the third quarter of 2018. The value of directly and indirectly held corporate equities increased $1.2 trillion and the value of real estate increased $0.2 trillion. The Fed estimated that the value of household real estate increased to $25.4 trillion in Q3. The value of household real estate is now above the bubble peak in early 2006 - but not adjusted for inflation, and this also includes new construction.The first graph shows Households and Nonprofit net worth as a percent of GDP. Household net worth, as a percent of GDP, is higher than the peak in 2006 (housing bubble), and above the stock bubble peak.This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations. This graph shows homeowner percent equity since 1952. Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008.In Q3 2018, household percent equity (of household real estate) was at 59.9% - up from Q2, and the highest since 2002. This was because of an increase in house prices in Q3 (the Fed uses CoreLogic). Note: about 30.3% of owner occupied households had no mortgage debt as of April 2010. So the approximately 50+ million households with mortgages have far less than 59.9% equity - and about 2.2 million homeowners still have negative equity.The third graph shows household real estate assets and mortgage debt as a percent of GDP.Mortgage debt increased by $91 billion in Q3. Mortgage debt has declined by $0.43 trillion from the peak. Studies suggest most of the decline in debt has been because of foreclosures (or short sales), but some of the decline is from homeowners paying down debt (sometimes so they can refinance at better rates).
Household Wealth Hits A Record $109 Trillion... There Is Just One Catch --In the Fed's latest Flow of Funds report released at noon today, the US central bank released the latest snapshot of the US "household" sector as of Sept 30, 2018. What it revealed is that with $124.9 trillion in assets and a modest $15.9 trillion in liabilities, the net worth of US households rose to an all time high $109 trillion, increasing for 12 consecutive quarters and up $2.1 trillion as a result of an estimated $245 billion increase in real estate values, as well as a $1.9 trillion increase in various financial assets like corporate equities, mutual and pension funds, and deposits as the market soared to just shy of new all time highs in the second quarter, even if it needed some time in Q3 to reach a new record just days before the quarter ended.Total household assets in Q2 rose $2.3 trillion to $122.7 trillion, while at the same time total liabilities, i.e., household borrowings, rose by only $132 billion from $15.6 trillion to $15.7 trillion, the bulk of which was $10.2 trillion in home mortgages.Homeowners’ real estate holdings minus the change in mortgage debt rose by $320.1 billion (a positive number means that the value of real estate is growing at a faster pace than household mortgage debt).The breakdown of the total household balance sheet as of Q3 is shown below. And the historical change of the US household balance sheet: And while it would be great news if wealth across all of America had indeed risen as much as the chart above shows, the reality is that there is a big catch: as shown previously, virtually all of the net worth - most of it in the form of financial assets - and associated increase thereof, has only benefited a handful of the wealthiest Americans. As the following chart from Deutsche Bank shows, the wealth inequality in the US is now as bad as it just during the Great Depression, with the top 0.1% of the US population owning as many assets as the bottom 90%.
Just Released- A Closer Look at Recent Tightening in Consumer Credit - The Federal Reserve Bank of New York released results today from its October 2018 SCE Credit Access Survey, which provides information on consumers' experiences with and expectations about credit demand and credit access. The survey is fielded every four months and was previously fielded in June. The latest survey shows a decline in application rates for credit over the previous twelve months, and an increase in rejection rates in 2018, compared with 2017. Consistent with a decline in demand due to higher mortgage interest rates, the share of respondents who applied for a mortgage refinance during the past year was lower in 2018 than in 2017. Rejection rates reported during 2018 rose for credit card applications and credit card limit extension requests, and also increased notably for mortgage refinance applications. Another interesting development revealed by the survey is that, while there was no appreciable change in borrower-initiated account closings between 2017 and 2018, there was a sharp increase in the proportion of respondents who reported that a lender closed one of their accounts (most commonly a credit or store retail card) during the past twelve months. In October, 7.2 percent of those surveyed reported such a lender-initiated event, compared with 5.7 percent in October 2017 and 4.2 percent in October 2016. In fact, the 2018 figure is the highest rate reported since the start of our survey in 2013. Looking ahead, the proportion of respondents who reported that they are somewhat or very likely to apply for credit over the next twelve months remained stable overall, with the exception of mortgage refinances for which fewer respondents expect to apply, when compared with expectations reported in 2017, and even more so compared with 2016. Survey participants also expressed more pessimism in 2018 about the chances of future credit card limit extension requests being accepted compared with 2017. Additional results from the survey are available in the press release.
Economic Downturn- Credit Cards Aren't Being Paid, Accounts Are Being Closed - A new report is shining some light on an indicator that the economy is about to take a major downturn. Credit card accounts are not being paid and some accounts are being closed in anticipation for an upcoming recession. Credit-card delinquencies, application rejections, and involuntary account closures are all on the upswing, according to a report from the Federal Reserve Bank of New York. According to Business Insider, The Fed says these developments reported are “potentially concerning” given the strength of the economy and comparatively low interest rates. Does the Fed not remember that they themselves have been jacking up the interest rates for months now? Sure, they are still relatively low, but that’s little consolation for the person who lives paycheck to paycheck and just saw another rate hike. The Fed released the results of this report this week. It’s called the “Credit Access Survey” which is a quarterly report on United States borrowers. It brought to the surface a couple of alarming trends that suggest credit-card issuers are getting skittish and paring back risk: Both credit-card rejection rates and involuntary account closures are on the rise. A separate New York Fed report released last month, the “Quarterly Report on Household Debt and Credit,” produced a similar finding. The report, which mines Equifax consumer credit reports for data, showed an uptick in the past year and a half in account closures, again primarily from credit cards. The reason credit card companies may be closing accounts and rejecting borrowing increases is that they may be spooked by the increasing number of people who already aren’t paying off their cards. Credit-card delinquency rates began to climb sharply toward the end of 2016, a trend that hasn’t reversed in 2018, according to Fed data. And it’s a trend that will more than likely continue to get worse as the cost to service those loan increases (interest rates rise.) It also could mean that many card companies issued debt too freely and to less-trustworthy borrowers in preceding years and are now trying to reverse course knowing that many will be put in a position of being unable to pay back what they have borrowed.
US Consumer Credit Hits All Time High As Credit Card Usage Soars - After a surprising slump in the use of revolving debt in September, when US consumers unexpectedly paid down a total of $310 million on their credit cards, moments ago, the Fed reported that in October, consumer credit posted a huge rebound, rising by $25.4 billion, above the $15.0 billion expected, the highest one month jump since last November. The surge in borrowing in October brought the total to $3.963 trillion, a 7.7% annualized increase from a year ago, and a new all time high, largely on the back of a newfound love with credit cards. After a one-month dormancy in using credit cards, American consumers returned to doing what they do best - spending money they don't have - with revolving credit jumping by $9.2 billion, the highest monthly increase since last November, and one of the highest monthly increases on record. The monthly increase brought the total to a new all time high of $1.037 trillion. At the same time, growth in nonrevolving credit, i.e. student and auto loans, was stable and in line with recent months, increasing by $16.2 billion, and also bringing the nonrevolving total to a new all time high of $2.926 trillion. In other words, while Americans continued to spend on cars and "college", they once again rediscovered their enthusiasm to buy every day items on credit.And while the rebound in revolving credit use will silence any questions about the resilience of the US consumer heading into the fall, the recent dramatic upward revision to personal savings notwithstanding, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers were at fresh all time highs, with a record $1.564 trillion in student loans outstanding, an impressive increase of $33 billion in the quarter, while auto debt also hit a new all time high of $1.143 trillion, an increase of $19 billion in the quarter.
Rich Americans Rank Financial Security Over Love in Relationships -- When looking for a partner, 56 percent of affluent Americans want someone who provides financial security, versus 44 percent who want to be “head over heels” in love, according to more than 1,000 respondents surveyed by Bank of America Corp.’s Merrill Edge. Of those polled, 63 percent said they preferred a career-focused partner over a socially conscious mate.“There’s a level of realism” for couples who face economic uncertainty and a lack of financial planning, said Aron Levine, head of consumer banking and Merrill Edge, which offers online investing. “How do you keep the love of your life if you can’t pay for a vacation?” he said in an interview in New York.While respondents placed a high priority on the finances of potential mates, most were more tight-lipped about their own, rarely discussing debt, salary, investments and spending habits with significant others, the survey showed. Other findings in the report by Merrill Edge, which has about $204 billion in assets under management:
- Affluent Americans are willing to put aside an average of $18,000 a year on saving and investing, more than they want to spend on rent or mortgage payments, their children’s education or travel.
- The majority of respondents has no monetary goal in mind for milestones such as getting married or having a baby.
- Almost three-quarters of respondents expect to get their investment guidance primarily through digital channels within five years.
Respondents in the survey, conducted from Sept. 27 to Oct. 13, were 18 to 40 years old with investable assets of $50,000 to $250,000, or investable assets of $20,000 to $50,000 and annual income of at least $50,000. For those older than 40, respondents had investable assets of $50,000 to $250,000.
Trump administration recommends postal reforms that could raise rates, setting up fight with Amazon- The Trump administration on Tuesday released a report that recommends the U.S. Postal Service (USPS) enact reforms that could raise shipping rates for certain packages, a move that could inflame tensions with Amazon and other online retailers. The administration's USPS task force says the changes are needed to bring in more revenue for the cash-strapped Postal Service, which reported $3.9 billion in losses in fiscal 2018. “Although the USPS does have pricing flexibility within its package delivery segment, packages have not been priced with profitability in mind,” reads an executive summary of the report. “The USPS should have the authority to charge market-based prices for both mail and package items that are not deemed ‘essential services.’ ” The report recommends that the USPS divide its mail and package shipments into essential and commercial service categories. Many e-commerce shipments would fall into the latter category, which would not be protected by existing price caps and thus be subject to rate increases. Senior administration officials say the Postal Service would be able to change package rates without an act of Congress. But such a move would likely require reworking negotiated service agreements with Amazon and other companies. Officials pushed back on the notion the proposal was aimed at Amazon, a company that President Trump has repeatedly criticized. "None of our findings or recommendations relate to any one customer or competitor of the Postal Service," said one senior administration official, who requested anonymity to discuss the report before its release. The official added that "all companies" dealing in e-commerce, "including Amazon," would "be impacted by those suggested reforms."
Payless Opens Fake Luxury Shoe Shop Where They Trick Influencers By Selling $20 Shoes For $640 - Recently the budget-friendly shoe company Payless pulled a savage prank on fashion influencers in California. ‘Payless’ took over a former Armani store in Santa Monica, stocked the shelves with their shoes and opened the doors of the pop-up store to influencers under the fake brand name Palessi. The fashion enthusiasts were made to believe they are shopping from high-end fashion collections, when in fact the store was filled with disguised Payless shoes, with only one alteration – the price. The biggest offer the store scored was a pair of sneakers worth $19.99 which was sold for $640. Within a few hours after opening the store made $3,000. Although fashionistas were tricked into believing they are buying designer goods, in the end, the customers lost nothing. Payless refunded the money they spent and let them keep the shoes for free. Palessi turned out to be a big hit, with fashionistas complimenting the quality and style of the footwear. In a brilliant marketing move, Payless used the hilarious ‘gotcha moments’ of their shoe reveals into an ad campaign. According to ADWEEK Payless CMO Sarah Couch said. “The campaign plays off of the enormous discrepancy and aims to remind consumers we are still a relevant place to shop for affordable fashion”. With the hilarious stunt, the shoe company proved a high price doesn’t always mean high quality, so why not buy cheaper fashion? Watch the Payless experiment below
Motor Vehicle Sales December 4, 2018 - Unit vehicle sales in November came in on the high end of expectations but, at a 17.4 million annualized rate, still fell just short of October's 17.5 million rate. The results do not point to a back-to-back monthly gain for motor vehicles which make up about 1/5 of total retail sales and which in October ended two months of declines. Yet November did come in at a very healthy rate with strength concentrated in light trucks which typically have high sticker prices and which help dollar totals of the retail sales report.
Trade Deficit increased to $55.5 Billion in October --From the Department of Commerce reported:The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $55.5 billion in October, up $0.9 billion from $54.6 billion in September, revised.October exports were $211.0 billion, $0.3 billion less than September exports. October imports were $266.5 billion, $0.6 billion more than September imports. Exports decreased and imports increased in October. Exports are 28% above the pre-recession peak and up 6% compared to October 2017; imports are 15% above the pre-recession peak, and up 9% compared to October 2017. In general, trade has been picking up. The second graph shows the U.S. trade deficit, with and without petroleum. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products. Oil imports averaged $61.23 in October, down from $61.35 in September, and up from $47.27 in October 2017. The trade deficit with China increased to $43.1 billion in October, from $35.2 billion in October 2017.
Trade deficit hits 10-year high as Americans snap up imports and China shuns soybeans - The trade deficit rose in October to a 10-year high amid a record shortfall with China, keeping the U.S. on pace to record the largest annual gap in a decade. The deficit edged up 1.7% to $55.5 billion from a revised $54.6 billion in September, the Commerce Department said Thursday. That’s the biggest shortfall since October 2008, and ironically, it stems in part from tariffs imposed by President Trump in an effort to reduce the deficit. Economists polled by MarketWatch had forecast a $55.1 billion gap. What happened: Imports rose 0.2% to a record $266.5 billion in October. The U.S. imported more autos, drugs and other consumer goods Part of the recent surge in imports reflects American companies stocking up on Chinese goods ahead of the holidays to get ahead of another increase in U.S. tariffs that was supposed to kick in on Jan. 1. The U.S. tariff increase has been temporarily been postponed until March. Exports slipped 0.1% to $211 billion, largely because of a big drop in soybean shipments. Retaliatory tariffs by China has curbed U.S. exports of big sellers such as soybeans. The trade deficit with China in goods, meanwhile, rose again to a fresh all-time high of $43.1 billion. Exports to China are running slightly behind last year’s pace. The trade gap has continued to widen despite punitive Trump administration tariffs meant to reduce Chinese imports and force the Asian giant to alter what the White House considers unfair trade practices. The U.S. agreed last week to postpone another round of tariff increases to give the two countries 90 days to make progress in resolving trade conflicts, but the arrest on Wednesday of senior Chinese business executive in Canada could throw a kink into negotiations. The U.S. trade deficit added up to almost $503 billion in the first 10 months of 2018. That compared to about $451 billion in the same span in 2017. The last time the U.S. trade deficit was higher was in 2008, when it topped $700 billion.
U.S. oil exports are rising. So is the trade deficit. — The United States exported more oil and fuel than it imported last week for the first time in 75 years, a significant milestone in the resurgence of domestic energy production that comes as the Trump administration pushes to increase energy exports even further. To President Trump, increased sales of oil and gas are a way to rebalance trade and close the gap between what the United States buys from foreign countries and what it sells. So far, however, that strategy is not working.The rise in oil exports is not reducing the trade deficit. Instead, as Americans buy less foreign oil, they are buying more of other foreign goods and services. In October, the monthly deficit hit $55.5 billion, the highest monthly level in 10 years.The United States surpassed Russia this year as the world’s largest oil producer. Domestic production has more than doubled over the past decade as technological improvements facilitated the extraction of oil from shale formations. Natural gas production also has increased drastically. As domestic production increased, the federal government lifted a longstanding ban in 2015 on crude oil exports, allowing American oil to flow outside its borders. Those sales — combined with the existing ability to sell refined products such as gasoline — has helped to shift the balance of energy imports and exports. A decade ago, net energy imports still equaled more than a quarter of domestic energy consumption. This year, that figure has fallen below 5 percent. The Energy Department projects the United States will become a net energy exporter by 2022.In theory, the rise of domestic energy production was supposed to help narrow the trade gap. Edward L. Morse, a prominent energy economist at Citigroup, predicted in 2012 that the annual trade deficit would be reduced by 60 percent by 2020. “The energy sector in the next few decades could drive an extraordinary and timely revitalization and reindustrialization of the U.S. economy, creating jobs and bringing prosperity to millions of Americans,” he wrote. Instead, the size of the trade deficit has continued to grow. The basic explanation is that the United States’ appetite for foreign investment, including the financing of the federal debt, is driving the country’s consumption of imports. The dollars that the United States borrows from foreign countries are the dollars that the United States spends on foreign products.
US factory orders post largest drop in more than a year - New orders for U.S.-made goods recorded their biggest drop in more than a year in October and business spending on equipment appeared to be softening, suggesting a slowdown in activity in the manufacturing sector. Factory goods orders fell 2.1 percent amid a decline in demand for a range of goods, the Commerce Department said on Thursday. That was the largest decrease in orders since July 2017. Data for September was revised lower to show factory orders rising only 0.2 percent instead of the previously reported 0.7 percent increase. Economists polled by Reuters had forecast factory orders declining 2.0 percent in October. Orders increased 8.3 percent on a year-on-year basis in October. An Institute for Supply Management survey of manufacturers published on Monday showed an improvement in business conditions in November. Manufacturers across nearly all industries, however, complained that worker shortages and the Trump administration's import tariffs were disrupting operations. In October, orders for transportation equipment tumbled 12 percent, the biggest drop since October 2017, reflecting a 59.3 percent plunge in orders for defense aircraft and parts. Transportation equipment orders rose 0.9 percent in September. Orders for civilian aircraft and parts dropped 22.2 percent in October. Orders for motor vehicles slipped 0.1 percent. There were also declines in orders for primary metals and machinery. But orders for computers and electronic products rose, as did those for fabricated metal products and electronic equipment, appliances and components. The Commerce Department also said October orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, were unchanged, as reported last month. Orders for these so-called core capital goods dropped 0.6 percent in September. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, rose 0.3 percent in October, as reported last month. Core capital goods shipments fell 0.3 percent in September. Business spending on equipment has slowed since the second quarter after strong growth in 2017 and early 2018. This is despite the White House's $1.5 trillion tax cut.
U.S. Wholesale Inventories Climb Slightly More Than Expected In October -- Wholesale inventories in the U.S. increased by slightly more than anticipated in the month of October, according to a report released by the Commerce Department on Friday. The Commerce Department said wholesale inventories advanced by 0.8 percent in October after climbing by an upwardly revised 0.7 percent in September. Economists had expected inventories to rise by 0.7 percent compared to the 0.4 percent increase originally reported for the previous month. The report said inventories of durable goods surged up by 1.7 percent during the month, more than offsetting a 0.6 percent drop in inventories of non-durable goods. Meanwhile, the Commerce Department said wholesales dipped by 0.2 percent in October after inching up by 0.1 percent in September. The modest decrease came as wholesale sales of durable and non-durable goods edged down by 0.1 percent and 0.3 percent, respectively. With inventories rising and sales falling, the inventories/sales ratio for merchant wholesalers ticked up to 1.28 in October from 1.27 in September. The ratio was unchanged from a year ago.
ISM Manufacturing index increased to 59.3 in November -- The ISM manufacturing index indicated expansion in November. The PMI was at 59.3% in November, up from 57.7% in October. The employment index was at 58.4%, up from 56.8% last month, and the new orders index was at 62.1%, up from 57.4%. From the Institute for Supply Management: November 2018 Manufacturing ISM® Report On Business® “The November PMI® registered 59.3 percent, an increase of 1.6 percentage points from the October reading of 57.7 percent. The New Orders Index registered 62.1 percent, an increase of 4.7 percentage points from the October reading of 57.4 percent. The Production Index registered 60.6 percent, a 0.7 percentage-point increase compared to the October reading of 59.9 percent. The Employment Index registered 58.4 percent, an increase of 1.6 percentage points from the October reading of 56.8 percent. The Supplier Deliveries Index registered 62.5 percent, a 1.3-percentage point decrease from the October reading of 63.8 percent. The Inventories Index registered 52.9 percent, an increase of 2.2 percentage points from the October reading of 50.7 percent. The Prices Index registered 60.7 percent, a 10.9-percentage point decrease from the October reading of 71.6 percent, indicating higher raw materials prices for the 33rd consecutive month. Here is a long term graph of the ISM manufacturing index. This was above expectations of 57.2%, and suggests manufacturing expanded at a faster pace in November than in October.
November Markit Manufacturing PMI: Solid Month Despite Small Decline - The November US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.3, down 0.4 from the 557 final October figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release: "Despite the headline PMI slipping to a three-month low, November saw manufacturers enjoy another encouragingly solid month of improving business conditions.Dig deeper behind the headline number and the picture brightens further. New orders rose at the fastest rate for six months, prompting manufacturers to continue to expand capacity to meet demand. The pace of job creation remained among the highest seen over the past decade." [Press Release] Here is a snapshot of the series since mid-2012.
Strong manufacturers new orders in November ISM report --One of the reasons I do my Weekly Indicators piece is that it forces me to mark my forecasts to market each week. If a forecast doesn't work out, I want to undertake a post mortem and understand why. I certainly don't have to do that today, but yesterday one piece of evidence did move against my thesis of a slowdown next year: ISM new orders for November.As I reiterated in today's piece at Seeking Alpha on yesterday's yield curve inversion, the long leading indicators have pretty much been deteriorating all year long, to the point where for the last three weeks they have been negative. So there is simply a lot of evidence to suspect that the economy is going to follow suit after a year or so.In the meantime, I've started to focus on whether the short leading indicators are also beginning to show signs of weakness. One such measure is manufacturers' new orders. On a semi-weekly basis, I track that via the regional Fed indexes. On a monthly basis, the ISM new orders index is the go-to metric.Well, one month ago the ISM new orders subindex declined to nearly a 2 year low. Then, during November, the average of the five Fed regional indexes declined further. So far, looking pretty good for my hypothesis.Then, at the last minute, the Chicago PMI Index completely blew out to the upside, including a very strong new orders index. And yesterday, the ISM report's new orders subindex for November rose back strongly. Here's the graph, from Briefing.com: So, fair is fair. Yesterday's ISM report is contra my thesis.
Ford To Announce 25,000 Job Cuts: Morgan Stanley - On a day when US and European auto stocks rallied (at the expense of shares of their Chinese competitors) following President Trump's tweet (since complicated by comments from Kudlow and Mnuchin) that China might soon agree to reverse its tariffs on US-made cars, Morgan Stanley has published a report that further justifies the short-term bull case for autos while possibly infuriating President Trump.After Ford successfully spun its latest "restructuring" as a jobs-neutral, union-endorsed shifting of employees from one factory to another, one analyst at Morgan Stanley is calling "bulls***", writing in a report published Monday that the Detroit automaker could soon announce an even larger round of job cuts than rival GM, which famously incurred the wrath of President Trump last week when it announced that it planned to shutter five North American factories and fire 14,700 US workers (the job cuts would affect both hourly blue-collar workers as well as white-collar salaried workers).MS analyst Adam Jonas said that as part of Ford's $11 billion 'restructuring', Morgan Stanley expects the car maker could cut as many as 25,000 jobs (though the bulk of the cuts would likely focus on its profit-draining European operations). "We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion," Jonas wrote. "But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers."
ISM Non-Manufacturing Index increased to 60.7% in November - The November ISM Non-manufacturing index was at 60.7%, up from 60.3% in October. The employment index decreased in November to 58.4%, from 59.7%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: November 2018 Non-Manufacturing ISM Report On Business® “The NMI® registered 60.7 percent, which is 0.4 percentage point higher than the October reading of 60.3 percent. This represents continued growth in the non-manufacturing sector, at a slightly faster rate. The Non-Manufacturing Business Activity Index increased to 65.2 percent, 2.7 percentage points higher than the October reading of 62.5 percent, reflecting growth for the 112th consecutive month, at a faster rate in November. The New Orders Index registered 62.5 percent, 1 percentage point higher than the reading of 61.5 percent in October. The Employment Index decreased 1.3 percentage points in November to 58.4 percent from the October reading of 59.7 percent. The Prices Index rose 2.6 percentage points from the October reading of 61.7 percent to 64.3 percent, indicating that prices increased in November for the 33rd consecutive month. According to the NMI®, 17 non-manufacturing industries reported growth. The non-manufacturing sector continued to reflect strong growth in November. However, concerns persist about employment resources and the impact of tariffs. Respondents remain positive about current business conditions and the direction of the economy.”
Markit Services PMI: "Slowest new business growth since October 2017" - The November US Services Purchasing Managers' Index conducted by Markit came in at 54.7 percent, down 0.1 from the final October estimate of 54.8. The Investing.com consensus was for 54.7 percent. The Investing.com consensus was for 54.4 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is the opening from the latest press release:Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The PMI surveys paint a picture of an economy growing at a solid annual rate of 2.5% so far in the fourth quarter, and continuing to add jobs in impressive numbers. Although some cooling in the rate of job creation was seen in November, the surveys are still pointing to payrolls growing at monthly rate of around 185,000.“The surveys therefore add to evidence that the domestic economy remains in good health, generating balanced growth across both manufacturing and services and increasingly outperforming other major economies.“However, while new business growth remained encouragingly resilient, it has eased to the lowest in over a year as demand showed some signs of softening, linked partly to growing concerns over trade wars, slower global demand growth, rising political uncertainty and tighter financial conditions. Such concerns have also dampened business expectations about the year ahead, adding to signs that growth may have peaked, though any slowing in growth looks likely to be only modest.” [Press Release] Here is a snapshot of the series since mid-2012.
Weekly Initial Unemployment Claims decreased to 231,000 - The DOL reported: In the week ending December 1, the advance figure for seasonally adjusted initial claims was 231,000, a decrease of 4,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 234,000 to 235,000. The 4-week moving average was 228,000, an increase of 4,250 from the previous week's revised average. The previous week's average was revised up by 500 from 223,250 to 223,750. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
2018 November Job Cut Report- Cuts Hit 53073, YTD Up 28 Percent - Companies around the globe are beginning to announce large-scale layoff plans, possibly signaling an upcoming downturn. The number of planned layoffs announced by U.S.-based employers totaled 53,073 in November, according to a report released Thursday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.In November, Japanese tech and energy conglomerate Toshiba announced plans to cut roughly 7,000 workers, while German pharmaceutical giant Bayer announced 12,000 cuts following its merger with Monsanto. It remains to be seen how these announcements will impact the U.S. workforce. Challenger tracks job cut announcements by U.S.-based companies or those that occur in the U.S., as specified by the company.The big story in the U.S. last month, however, was the announcement by General Motors that it would cut 15 percent of its workforce, or up to 14,000 employees, after offering 18,000 buyouts to workers in an effort to save over $6 billion. Challenger counted 14,000 cuts due to cost-cutting. GM’s announcement is the 7th largest single job cut announcement by an Automotive company since 2001, according to Challenger’s tracking. “Announcements like GM’s will not be the last, as companies adapt to shifting consumer behavior. We’ve already seen major plans in the U.S. from Verizon, Wells Fargo, and Toys“R”Us for exactly those reasons,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc. Last month’s job cut total is 29.8 percent lower than the 75,644 cuts announced in October and 51.5 percent higher than the 35,038 cuts announced in the same month last year. So far this year, employers have announced 494,775 cuts, 28 percent higher than the 386,347 announced through this point last year. This is the highest 11-month total since 2015, when 574,888 cuts were tracked through November. “Monthly job cut announcements averaged under 35,000 in all of 2017 and just under 44,000 in 2016. In 2018, cuts are averaging nearly 45,000 per month, with the last four months averaging over 55,000. This upward trend is indicative of a potential economic shift and could spell a downturn,” said Challenger.
ADP: Private Employment increased 179,000 in November -- From ADP: Private sector employment increased by 179,000 jobs from October to November according to the November ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. ... “Although the labor market performed well, job growth decelerated slightly,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. ”Midsized businesses added nearly 70 percent of all jobs this month. This growth points to the midsized businesses’ ability to provide stronger wages and benefits. It also suggests they could be more insulated from the global challenges large enterprises face.” Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth is strong, but has likely peaked. This month’s report is free of significant weather effects and suggests slowing underlying job creation. With very tight labor markets, and record unfilled positions, businesses will have an increasingly tough time adding to payrolls.” This was close to the consensus forecast for 175,000 private sector jobs added in the ADP report.
November Employment Report: 155,000 Jobs Added, 3.7% Unemployment Rate -From the BLS:Total nonfarm payroll employment increased by 155,000 in November, and the unemployment rate remained unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, and in transportation and warehousing....The change in total nonfarm payroll employment for October was revised down from +250,000 to +237,000, and the change for September was revised up from +118,000 to +119,000. With these revisions, employment gains in September and October combined were 12,000 less than previously reported.... In November, average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $27.35. Over the year, average hourly earnings have increased by 81 cents, or 3.1 percent.The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes). Total payrolls increased by 155 thousand in November (private payrolls increased 161 thousand). Payrolls for September and October were revised down 12 thousand combined. Year-over-year change employmentThis graph shows the year-over-year change in total non-farm employment since 1968. In November the year-over-year change was 2.443 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate was unchanged in November at 62.9%. This is the percentage of the working age population in the labor force. A large portion of the recent decline in the participation rate is due to demographics and long term trends. The Employment-Population ratio was unchanged at 60.6% (black line). The fourth graph shows the unemployment rate. The unemployment rate was unchanged in November at 3.7%. This was below the consensus expectations of 190,000 jobs added, and September and October were revised down, combined. Still a decent report.
November jobs report: another good report with some signs of deceleration - HEADLINES:
- +155,000 jobs added
- U3 unemployment rate unchanged at 3.7%
- U6 underemployment rate rose 0.2% from 7.4% to 7.6%
- Not in Labor Force, but Want a Job Now: rose +88,000 from 5.309 million to 5.397 million
- Part time for economic reasons: rose +181,000 from 4.621 million to 4.802 million
- Employment/population ratio ages 25-54: unchanged at 79.7%
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.07 from $22.89 to $22.95, up +3.1% YoY. (I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
- Manufacturing jobs rose +27,000 for an average of +20.000/month in the past year vs. the last seven years of Obama's presidency in which an average of +10,300 manufacturing jobs were added each month.
- Coal mining jobs rose +400 for an average of +75/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
- September was revised downward by -13,000. October was revised upward by +1,000, for a net change of -12,000.
- the average manufacturing workweek was unchanged at 40.8 hours. This is one of the 10 components of the LEI.
- construction jobs rose by +6300. YoY construction jobs are up +71,400.
- temporary jobs rose by +8300. This is positive, but marks continued deceleration from its 12 month average of +15,000.
- the number of people unemployed for 5 weeks or less rose by +69,000 from 2,057,000 to 2,126,000. The post-recession low was set six months ago at 2,034,000.
- Overtime was unchanged at 3.5 hours.
- Professional and business employment (generally higher-paying jobs) increased by +32,000 and is up +563,000 YoY.
- the index of aggregate hours worked for non-managerial workers rose by +0.1%.
- the index of aggregate payrolls for non-managerial workers rose by +0.7%.
SUMMARY: This was another good report. The worst that can be said is that it is a deceleration from last month's excellent report, which I described as overall the best of this entire expansion. Perhaps the most positive aspect of this report was the nice pop in aggregate payrolls, up 0.7%, and that nominal wages for average workers continued to increase more than 3% YoY.
November Payrolls Rise A Disappointing 155K As Wage Growth Misses - With whispers that the November jobs report would disappoint to various factors such as winter storms and rising jobless claims, moments ago the BLS reported that November payrolls indeed disappointed expectations, printing at 155K, below the 198K expectations, with the October number revised lower from 250K to 237K. The change in total nonfarm payroll employment for October was revised down from +250,000 to +237,000, and the change for September was revised up from +118,000 to +119,000. With these revisions, employment gains in September and October combined were 12,000 less than previously reported. However, confirming that this number too was weather affected, the BLS reported that "workers unable to work due to bad weather" came at a substantial 129K, well above prior November months (2017 was 84K, 2016 was 19K, 2015 was 97K). As Southbay Research notes, one can blame the weather for today's miss: Supply Chain (ex retail) Strong, Weather-Sensitive Sectors Hit
- Manufacturing: +27K (3rd highest for the year)
- Transportation: +25K (a 3 year high)
- Wholesale: +10K (3rd highest for the year)
- Retail: +18K (vs 27K November 2017)
- Leisure & Hospitality: +15K (vs. 20K November 2017)
- Construction: +5K (vs. 42K November 2017)
- Mining: -3K (vs. +6K November 2017)
Meanwhile,the Household survey saw a 233K increase in employment, a sharp drop from the 600k increase in October. The unemployment rate remained unchanged, as expected at 3.7%, already the lowest since 1968. Meanwhile, while the U-6 gauge of underemployment has been falling for years, it's showing some signs of stabilizing and in November, it actually ticked up modestly, from 7.4% to 7.6%. The overall labor force participation rate continued to hover near a four-year high of 62.9, if still well below its historical average. And while hourly earnings rose at a hottish 3.1% year over year, and as consensus expected, on a monthly basis, the increase was 0.2%, below the 0.3% expected, with October also revised down from 0.2% to 0.1% M/M, and adding fuel to any dovish reversal by the Fed.Another notably negative aspect to the report: the average workweek declined from 34.5 hours to 34.4, below the 34.5 expected, which provided an artificial boost to "average" hourly earnings. On the flipside, and a fact which will likely be used by Trump, black unemployment dropped to a new record low. Looking at specific job sectors:
- Manufacturing payrolls rose 27k after rising 26k in the prior month (economists estimated 18k)
- Oil and gas extraction payrolls rose 7,400 from a year earlier.
- Gasoline stations payrolls rose 2,400 in Nov. after falling 2,200 in Oct.
- Pipeline transport payrolls fell 500 in Nov. after rising 100 in Oct.
- Petroleum and coal payrolls fell 1,500 in Nov. after falling 600 in Oct.
So while both the headline jobs print and wages came in weaker than expected, a big reason for this was weather. The question, however, is whether the market will focus on the one-time factors impacting the November print, or whether it will instead see this as "bad data" which will then be interpreted as good news for stocks, as it means a Fed pause is even more likely.
Another solid jobs report, even with a slightly slower trend in payrolls – Jared Bernstein - Payrolls were up 155,000 last month, and the unemployment rate held steady at 3.7 percent, close to a 50-year low. Hourly wages were up by 3.1 percent over the past year, the same rate as last month and tied for a cyclical high. Though another in a string of solid job reports, the pace of job gains downshifted a bit compared to last month’s report, average weekly hours ticked down slightly, and both the job and wage numbers came in below market expectations. That said, monthly noise, weather and other one-off effects (winter storms, fires) can influence monthly data, and the underlying trend remains that of a labor market closing in on full employment. To better glean the underlying trend of job growth, our monthly smoother looks at 3, 6, and 12-month averages of monthly job growth. The 3-month average of 170,000 is slightly below that of the 6- and 12 -month averages, suggestive of a slower trend in monthly payroll gains. However, this pattern is to be expected as the labor market closes in on full-capacity. In fact, the 3-month pace (170K), if sustained, is easily strong enough to put further downward pressure on the unemployment rate and thus, upward pressure on wage growth. Moreover, as I note below, I suspect real (inflation-adjusted) wage growth will soon accelerate due to declining oil prices. Wage growth held at its cyclical high reached last month of 3.1 percent, year-over-year, a sign that tight labor markets are giving workers a bit more bargaining clout. The figures plot nominal gains for all private sector workers and for middle-wage workers (blue-collar factory workers and non-managers in services). The six-month moving average shows the recent acceleration from about 2.5 percent through 2017 to around 3 percent this year. But what about real wage growth? Over the near term, real wages and the price of oil tend to be highly correlated. That is, falling oil and gas prices lead to slower overall price growth, which raises real wage growth. That means we now have two factors helping to boost real wage growth: the tight labor market is generating faster nominal wage gains, and cheap oil is pushing up real gains. Though we do not yet know CPI inflation for November, my guess is that the price index is up about 2.2% over the past year. If that’s correct, it means real hourly wages grew at a yearly rate of about 1 percent, the fastest pace of real wage gains since late 2016. Other highlights from today’s report:
- –The closely watched “prime-age” (25-54) employment rate was unchanged at 79.7 percent. However, it was up 0.2 points for men and down slightly for women. Abstracting from the monthly blips, this series, especially for men, shows potential available labor supply, as the men’s rate is still 1.6 points below its pre-recession peak (prime-age women have surpassed their peak).
- –The black unemployment rate fell to 5.9 percent, tied for an all-time low, but the decline was accompanied by lower labor force participation, so it’s not unequivocal good news. Also, these data are particularly noisy, month-to-month.
- –Construction employment was up only slightly (5,000), possibly reflecting the slowdown in the interest-rate-sensitive building sector.
- –Government employment has been flat in recent months, driven largely by state-level declines, possibly reflect state budget constraints, particularly in education.
Finally, turning to the Fed, according to recent news reports, the central bank is considering downshifting its “normalization” campaign, meaning pausing between rate hikes more than they’ve heretofore been signaling. Today’s report constitutes a supportive data point in that regard. Wage growth is growing but not quickly accelerating, and the trend pace of job gains is off its peak, as shown in the smoother. Most importantly, as the figure below reveals, even while unemployment remains well below the Fed’s “natural rate” and wage growth has picked up, their key inflation gauge remains not merely well-anchored but, in its most recent print, slightly below target.
Growth Rate For US Payrolls Continued To Slow In November -- The pace of hiring at companies slowed in November, according to this morning’s monthly update from the Labor Department. The softer-than-projected gain pared the year-over-year trend to a three month low. The economy’s still creating a healthy number of jobs, but today’s results reaffirm the view that US growth has peaked. Economists were looking for a 183,000 rise in private payrolls, according to Econoday.com. The reported number was a moderately softer increase of 161,000. As a result, the year-over-year change in private employment slipped to 1.9%, matching The Capital Spectator’s projection based on a set of combination forecasts.The slowdown in job creation aligns with expectations that fourth-quarter GDP growth is on track to slow. Although recession risk remains low for the US, based on recent data, the incoming numbers are supporting the case for expecting that the acceleration in economic output in the first half of 2018 will fade to a degree in the new year.“It’s not like [November’s total (government and private) monthly employment gain of] 155,000 is a terrible number, but it’s below what people were looking for,” says Michael Feroli, chief U.S. economist at JPMorgan Chase. In the wake of strong growth in this year’s first half, “we’re looking for growth to step down this quarter and you should probably also expect to see the labor market cool off some. It’s consistent with the economy coming off what people call a sugar rush.” In any case, the outlook remains positive, if somewhat softer vs. this year’s stronger Q1 profile, notes Paul Ashworth, chief economist at Capital Economics. “This is still a solid gain that suggests economic growth is gradually slowing back towards its potential pace,” says of November’s employment report. He adds that “there is nothing here to suggest the economy is suffering a more sudden downturn.”
Did the Job Market Slow in November? Here’s How It Compares -- (graphs) U.S. employers added 155,000 jobs, the unemployment rate held at a 49-year low and hourly wage gains remained near a postrecession high in November. The number of jobs has grown by 1.7% over the past year. Despite a somewhat slower month for job growth in November, the figure has mostly held steady in recent months. . Wage growth has been slowly trending upward, but weekly pay took a step back in this month's report. In October, weekly wage gains had been up at a 3.4% rate from a year earlier. This month that gain fell back to 2.8%. . The share of Americans who are working or looking for work has changed little over the past five years. That trend continued in this month's report with the labor-force participation rate unchanged at 62.9%. The employment-to-population ratio was also unchanged in November. . For workers age 25 to 54, when education or retirement aren't as big of an influence on decisions to work, labor-force participation and employment-to-population rates are much higher. The figures were little changed, though, in November. . The unemployment rate held steady at 3.7% and broader measures of unemployment were mixed. The rate that includes discouraged workers who have stopped looking for work declined slightly, but the broadest measure of underemployment, which includes part-time workers who want full-time jobs, rose in November. . Unemployment rates rose slightly in November for workers with at least some college education, and fell slightly for workers without. During the recession, college-educated workers faced far lower unemployment rates, but as the economy has improved the gap has narrowed. . Unemployment rates have trended downward across race and gender groups. The unemployment rate for black men matched its lowest reading on record. . The median duration of unemployment lasted 8.9 weeks, matching the lowest reading since 2008. . This year is on course to be the third-best for job growth of the current expansion. In the first 11 months, 2018 has added fewer jobs than in 2014 and 2015, but is ahead of all other years dating back to 2006.
Where The Jobs Were In November- Who's Hiring And Who Isn't - - After an unexpectedly strong October payrolls report (which was since revised slightly downward to 237K jobs from 250K mostly to reflect the payback from jobs lost to "hurricanes" in September), November came in disappointingly low, with only 155K jobs added, 33K below the 198K expected. However, like last month, it appears that weather - this time the abnormal cold during the survey week - again impacted the seasonally-adjusted job count, with "workers unable to work due to bad weather" printing at a substantial 129K, well above recent prior Novembers (2017 was 84K, 2016 was 19K, 2015 was 97K). Furthermore, as Southbay Research confirms, it indeed appears that one can blame the weather for today's miss, as follows:
- Manufacturing: +27K (3rd highest for the year)
- Transportation: +25K (a 3 year high)
- Wholesale: +10K (3rd highest for the year)
- Retail: +18K (vs 27K November 2017)
- Leisure & Hospitality: +15K (vs. 20K November 2017)
- Construction: +5K (vs. 42K November 2017)
- Mining: -3K (vs. +6K November 2017)
Of note here, the surprisingly strong increase in manufacturing jobs (+27,000) suggests the payrolls miss this month was not about tariffs. While weather may have affected jobs, it was not immediately clear if it also hit wages, which also disappointed, and while printing 3.1% Y/Y, the November average hourly earnings came in at 0.2%, below the 0.3% expected, while October was revised lower to 0.1%, even as the average November workweek declined fractionally by 0.1 hour to 34.4 hours. Still, wage pressures appear to be abating. Average hourly earnings for total private industry have risen 0.18% per month so far in Q4, compared to +0.32% in Q3, +0.24% in Q2, and +0.20% in Q1. Heavy cooling in wages for the mining and logging, wholesale trade and utilities industries.Weather and wages aside, the job market continues to grow at a pace that will continue pressuring the unemployment rate, reflected in the number of job openings which have been greater than the number of unemployed workers for 5 months in a row.Of course, much of this overheating in the US labor market is the result of Trump's fiscal stimulus, whose impact will soon begin to fade at a rapid pace as payback time comes, which has prompted many to ask if we have hit "peak jobs." Until we get the answer, however, the labor market remains strong with the following sectors especially hot:
- Manufacturing workers added 27,000 jobs, with increases in chemicals (+6,000) and primary metals (+3,000).
- Employment in transportation and warehousing rose by 25,000 in November, with job gains in couriers and messengers (+10,000) and in warehousing and storage (+6,000).
- Professional and business service jobs added +32,000 jobs, with temp help workers adding a solid 8,300 jobs.
- Retail trade employment changed little in November (+18,000). Job growth occurred in general merchandise stores (+39,000) and miscellaneous store retailers (+10,000); this growth was offset by declines in clothing and clothing accessories stores (-14,000); electronics and appliance stores(-11,000); and sporting goods, hobby, and book stores (-11,000).
Comments on November Employment Report - Bill Mcbride - The headline jobs number at 155 thousand for November was below consensus expectations of 190 thousand, and the previous two months were revised down 12 thousand, combined. The unemployment rate was unchanged at 3.7%. Still this was a decent report. November Employment Report: 155,000 Jobs Added, 3.7% Unemployment Rate In November, the year-over-year employment change was 2.443 million jobs. This is solid year-over-year growth. Typically retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year.This graph really shows the collapse in retail hiring in 2008. Since then seasonal hiring has increased back close to more normal levels. Note: I expect the long term trend will be down with more and more internet holiday shopping. Retailers hired 464 thousand workers (NSA) net in November. Note: this is NSA (Not Seasonally Adjusted). Just like last year, there was a surge in seasonal hiring in November. Wage growth was close to expectations in November. From the BLS: "In November, average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $27.35. Over the year, average hourly earnings have increased by 81 cents, or 3.1 percent." The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees. Nominal wage growth was at 3.1% YoY in November. Wage growth has generally been trending up. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. In the earlier period the participation rate for this group was trending up as women joined the labor force. Since the early '90s, the participation rate moved more sideways, with a downward drift starting around '00 - and with ups and downs related to the business cycle. The 25 to 54 participation rate decreased in November to 82.2%, and the 25 to 54 employment population ratio was unchanged at 79.7%.The number of persons working part time for economic reasons has been generally trending down. The number increased in November. The number working part time for economic reasons suggests there is still a little slack in the labor market.These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.6% in November. This is the highest level for U-6 since June. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.253 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.373 million in October. Summary: The headline jobs number was below expectations. The headline unemployment rate was unchanged at 3.7%, tying the previous two month for the lowest rate since 1969. And wage growth was at expectations, and above 3% YoY for the second consecutive month. Overall, this was a decent report. For the first eleven months of 2018, job growth has been solid, averaging 206 thousand per month.
Productivity and Costs December 6th 2018 - The second estimate is little changed from the first as nonfarm productivity grew at an annualized and respectable 2.3 percent rate in third quarter. Output, at a strong 4.1 percent growth pace, and hours worked at only a moderate 1.8 percent increase are unchanged from the first estimate. Unit labor costs grew at a slightly more subdued rate in the second estimate, at 0.9 percent for a 3 tenths decline from the first estimate. This reflects a 4 tenths downgrade in compensation to a growth rate of 3.1 percent. Real compensation, which adjusts for inflation, is now 3 tenths lower at a 1.1 percent annualized growth rate during the quarter. But in year-on-year terms, that is the third quarter this year compared with the third quarter last year, real compensation is down 0.4 percent. This is a mixed report showing a positive gain for output but stubborn weakness in real compensation.
"There are three kinds of lies: lies, damned lies, and statistics." by Harlan Easley - I have a different view of the economy than the rose-colored glass narrative now dominating our political discourse Please refer to this link https://data.bls.gov/timeseries/CES3000000001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true You can see from the Bureau of Labor Statistics that the United States had 13,725,000 manufacturing jobs as of January 2008. Currently we have 12,785,000 manufacturing jobs. So simple math shows we have 1,000,000 less manufacturing jobs than 11 years ago. How does that jive with the narrative that “our economy has never been better?”It doesn’t. It has never been better for the most wealthy due to their extraordinary gains in the stock market but for the average man/gal the economy is mostly a hard grind of survival. But it is really worse. Since the above graph is just comparing the last 11 years. Please look at this graph https://data.bls.gov/pdq/SurveyOutputServlet You can see the United States at the height of its domestic manufacturing output almost employed 20,000,000 people in the sector. So we have lost approximately 7,500,000 manufacturing jobs due to outsourcing/free trade. In 1979, we had close to 20,000,000 manufacturing jobs with a population of 227,000,000. As of today we have 12,750,000 manufacturing jobs with a population of 327,000,000. The United states has added 100,000,000 million more people while our manufacturing base declined 40%. The math just doesn’t add up for a Goldilocks economy. Neoclassical economists will argue all kinds of nonsense such as a service-based economy. Tell that to the Rust Belt that was hollowed out. Manufacturing jobs support service jobs. It’s that simple. When a community loses their manufacturing base the community declines swiftly. Leading to drug abuse, crime, despair, suicide, public services declining like the water supply in Flint, Michigan. It’s so obvious that I no longer see economist being interviewed by the press arguing the benefits of outsourcing or what they call “Free Trade”.
Robot Accidentally Sets Off Bear Spray, Sending 24 Amazon Workers to Hospital — At least one person was in critical condition and 24 were hospitalized after a robot accidentally punctured a 9oz. aerosol can of bear repellent at an Amazon warehouse in Robbinsville Township, New Jersey on Wednesday, causing dozens of employees to experience trouble breathing. All told, 54 Amazon employees received medical attention because of the incident, according to multiple reports, which follow global strikes and demands from workers, advocates, and even lawmakers such as Sen. Bernie Sanders (I-Vt.) for the company—which is run by the richest man in the world, Jeff Bezos—to improve workplace conditions, including warehouse safety. “Amazon’s automated robots put humans in life-threatening danger,” declared Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. “This is another outrageous example of the company putting profits over the health and safety of their workers, and we cannot stand for this,” he added, emphasizing that as one of the world’s biggest companies, Amazon “cannot continue to be let off the hook for putting hard working people’s lives at risk.”
Michigan GOP starts gutting $12 per hour minimum wage, paid sick time laws In a gift to the state's corporations and rich, Michigan Republicans on Wednesday started the process of gutting new, separate laws that would raise Michigan's minimum wage to $12 per hour and mandate paid sick time for the state's workers. The GOP-led Senate this afternoon approved significant changes to the citizen-initiated laws in a party-line vote. The House will likely take up the issue next week. What makes the changes extra dirty is the manner in which Republicans are going about it. Throughout 2018, citizen-led groups gathered signatures to put proposals for paid sick time and increased minimum wage on the Nov. 6 ballot. The proposals are popular with state's residents and were likely to pass. But Republicans made them law in September, which kept them off the Nov. 6 ballot. However, the GOP made sure that the laws didn't go into effect until March so they could gut them during the lame duck session, which started today. There's nothing that the Democratic minority in the state legislature can do to stop Republicans, however, the move may violate the state's constitution. It's also worth noting that the GOP lost the popular vote in the state House in 2014 and 2018, and only won by 3,000 votes in 2016. Still, it currently holds a 63-47 majority, because Republicans gerrymandered the state's legislative districts. So, arguably, a government that the majority of people didn't want is killing a raise and paid sick time for low income Michiganders.
With Trump’s Justice Department Retreating, Who Will Now Police the Police? -- Last month, a video was released of two police officers in Elkhart, Indiana, repeatedly punching a handcuffed man in the face. The episode was just the latest in a long-troubled Police Department where nearly all of its supervisors have disciplinary records.This is the sort of problem that Congress sought to address in 1994 when it authorized the Justice Department to overhaul troubled local police agencies under court-monitored consent decrees. These agreements lay out a reform plan negotiated by federal law enforcement officials and the local government. After seeing the videotaped beating, Elkhart’s mayor, Tim Neese, asked the Indiana State Police for a “very thorough and far-reaching” investigation of his Police Department. But the state police turned him down, so he asked the Justice Department for help. His timing could hardly have been worse. Less than three weeks earlier, Jeff Sessions, who was then the attorney general, had sharply limited the Justice Department’s ability to use court-ordered agreements to address abuses by local police departments. It was one of his last actions before he stepped down. Sessions was a longtime opponent of these agreements, complaining that they damaged police morale and smacked of federal overreach. But his critics say his last-minute move is likely to further the Trump administration’s efforts to impede police reforms nationally.
Native American Women Are Being Sold into the Sex Trade on Ships Along Lake Superior - Native women, children, and even babies are being trafficked in the sex trade on freighters crossing the Canada-US border on Lake Superior between Thunder Bay, Ontario, and Duluth, Minnesota. Next month, Christine Stark—a student with the University of Minnesota-Duluth, who is completing her master’s degree in social work—will complete an examination of the sex trade in Minnesota, in which she compiles anecdotal, firsthand accounts of Native women, particularly from northern reservations, being trafficked across state, provincial, and international lines to be forced into servitude in the sex industry on both sides of the border. Stark’s paper stems from a report she co-wrote, published by the Indian Women’s Sexual Assault Coalition in Duluth in 2011, entitled, “The Garden of Truth: The Prostitution and Trafficking of Native Women in Minnesota.”Through the process of researching and writing this report, Stark kept hearing stories of trafficking in the harbors and on the freighters of Duluth and Thunder Bay. The numerous stories and the gradual realization that this was an issue decades, perhaps centuries, in the making, compelled Stark to delve further into what exactly was taking place. “Hearing from so many Native women over generations talking about the ‘boat whores,’ prostitution on the ships or the ‘parties on the ships,’ this is something that… was really entrenched in the Native community and we wanted to collect more specific information about it.” Stark interviewed hundreds of Native women who have been through the trauma of the Lake Superior sex trade. The stories she’s compiled are evidence of an underground industry that’s thriving on the suffering of First Nations women, which is seemingly going unchecked and underreported. In an article written for the Minneapolis Star Tribune, Stark describes one disturbing anecdote of an Anishinaabe woman who had just left a shelter after being beaten by her pimp—who was a wealthy, white family man. He paid her bills, rent, and the essentials for her children, but on weekends, “brought up other white men from the cities for prostitution with Native women… he had her role play the racist 'Indian maiden and European colonizer' myth with him during sex.”
How America's Homeless Population Has Changed Over The Last Decade - Though the crisis of homelessness across the US has eased somewhat over the past decade, there are still some 550,000 homeless people in the US, equivalent to roughly one-fifth of one percent of the population. Data from the Department of Housing and Urban Development cited by Business Insider shows that the US homeless population decreased by 14.4% between 2007 - when there were roughly 650,000 homeless in the US - and 2017. The fluctuations in the homeless population weren't even across the US. Michigan led the country by decreasing its homeless population by 68% between 2007 and 2017. New Jersey and Kentucky also saw decreases of more than 50% over that time period. But while some states in saw meaningful reductions, there were 14 states (including Washington, DC) where homeless populations rose from 2007 to 2017. North Dakota, one of the most sparsely populated states in the US, saw a staggering increase of 71.2%. South Dakota and Wyoming also saw sizable increases of 60%. But as property values in some of the largest and trendiest urban centers have risen since the crisis, the state level figures mask crises in the cities. In a recent piece, Bloomberg chronicled the homelessness crisis in Los Angeles. The city made record progress over the past year placing homeless people in housing. But the overall rate remains high nearly 60,000 people in a city of 4 million, that's an increase of 47% since 2012. The number of people becoming homeless for the first time increased by 16% to nearly 10,000. That being said, the face of homelessness is changing. There are more professional workers living in their cars in parking lots. Research by Zillow recently found that every 5% increase in rents in LA resulted in another 2,000 people becoming homeless, one of the highest correlations in the US. And with Amazon moving into Queens, the backlash by the working class, who are the most vulnerable segment of the population has already begun.
Let's see the research before reversing school lunch standards - After years of effort to strengthen nutrition standards, based on scientific reports from the National Academies and others, leading to the Healthy Hunger-Free Kids Act of 2010, USDA yesterday published a final rule that rolled back the proposed standards in three ways: (1) delaying implementation of interim standards for sodium, and giving up on the eventual more ambitious standards; (2) allowing sweetened flavored low-fat milk, and (3) relaxing rules to encourage whole grain content. It is good to base major child nutrition policy decisions on the best and most recent research. Every few years, USDA publishes a major School Nutrition Dietary Assessment (SNDA) and a school meals cost study. The last SNDA, in 2012, found that many school meals fell short of targets for whole grains and sodium, for example. For the most recent such research, USDA funded a major study by Mathematica Policy Research that for the first time would combine the previously separate studies into a single more coherent School Nutrition and Meal Cost Study (SNMCS). The Mathematica website lists the study as running from 2013-2017. The study has long been awaiting clearance at USDA. For sound science-based policy-making, an appealing option for USDA could have been to first publish this important study and then afterwards publish the final rule on school meals standards. However, this week the order was reversed, with policy decision first. We will read the scientific report with great interest when it is published.
A High School Descended Into Utter Chaos After Students Were Told A Fake Active Shooter Drill Was Real -- A “code red” drill at Lake Brantley High School in Altamonte Springs, Florida, caused a hysterical and chaotic scene at the school on Thursday as students, faculty, and parents were led to believe there was an active shooter on campus. Multiple students and parents told BuzzFeed News that students were crying, running for their lives, and suffered panic attacks during the drill. Some said they knew of students who were trampled and left physically injured. Students and parents are now infuriated with how the drill was handled — and claim school officials are deflecting any blame. Students are also posting on social media to show the mess it caused, and for the principal of Lake Brantley to take responsibility. At about 10:30 a.m. on Thursday, students and teachers were alerted to an announcement made over the intercom that the school was on “code red” and that it was not a drill. Joelle Wittig, a 17-year-old senior at the school, told BuzzFeed News her teacher received an alert on her phone that there was an active shooter on school grounds and that “panic” began to spread through her class and the rest of the student body. “She shared [the alert] with the class because she started to panic a bit, and the rest of the class started panicking,” Wittig said. “We waited for a long time. It was pretty distressing.” After about 30 minutes, she said teachers were then finally alerted that it was an unannounced code red drill. “We were confused why they didn’t just say it was a drill,” said Wittig. The confusion quickly turned into chaos when a follow-up intercom announcement made during a lunch hour — trying to clarify that the code red was a drill and not real — couldn’t be deciphered because of poor speaker sound quality. Students continued to believe there was an active shooter on the premises.
Oakland Schools face $60 million in cuts, state takeover - Oakland Unified School District (OUSD), California’s 11th largest, serving over 50,000 students, is facing demands for $60 million in budget cuts over two years from the state’s Fiscal Crisis Management and Assistance Team (FCMAT) and the Alameda County Superintendent of Public Schools, Karen Monroe.The district is in an education crisis, with decades of budget cuts and deteriorating conditions driving larger class sizes, understaffing, a high turnover rate among teachers, and regularly failing to meet federally mandated special education services. Cutting any more from the already thin budget threatens a complete collapse. Last year, the school board cut $9 million and so far, the school board has proposed $16.5 million in cuts for the next school year, including removing up to 340 positions. If those cuts are not deepened, the government is threatening the district with direct receivership. In an e-mail to OUSD staff and student families explaining the report, Kyla Johnson-Trammell, the Superintendent of OUSD, demanded a shift towards charter schools stating that “OUSD operates too many district-run schools for the number of students we serve” and “the District must work together with charter schools to make every public school option a quality option.” . Johnson-Trammell was at pains to defuse popular backlash by emphasizing that this report was preliminary and that a final decision on how many schools to close and which they would be, is coming in February. She was adamant that some schools had to be closed and the district had to develop charter schools. According to the preliminary report OUSD only expects to serve 57.6 percent of school-age children in Oakland by 2023. The rest will be in charter or private schools. Currently, over 30 percent of OUSD students are in Oakland’s 45 charter schools, the highest concentration in the state, and that number will likely increase as the district closes its own schools and sells or leases more property to charters. Study after study has shown that charter schools, on average, produce no improvement in a student’s educational outcome, but they do open up enormous amounts of public school funding to private profit and corruption by shifting money currently going to teacher compensation and student programs into the pockets of the private operators of charter schools.
Corporate tax breaks cost U.S. schools billions of lost revenue: report (Reuters) - Corporate tax subsidies, in the spotlight again after Amazon.com Inc’s (AMZN.O) secretive quest to find a site for its second headquarters, are costing American public schools big money, according to a report issued on Tuesday. In fiscal 2017, U.S. public schools lost $1.8 billion across 28 states through corporate tax incentives over which most schools themselves had little or no control. The 10 most affected states could hire more than 28,000 new teachers if they were able to use the lost revenues, according to the report released by Good Jobs First, a left-leaning Washington think tank. The report comes amid increased taxpayer scrutiny of such deals following Amazon’s nationwide, yearlong search for its “HQ2” site. Amazon decided last month to build two new headquarters at $5 billion each in New York City and Arlington, Virginia, saying it will hire up to 50,000 people altogether. Though conducted mostly in secret, the search was still a public spectacle, pitting state against state in a bidding war and raising questions about transparency and the need for such subsidies for a company run by Jeff Bezos, the richest man in the world. States and cities have long used abatements, subsidies and other tax incentives to lure companies, keep them from leaving or encourage them to expand. Such deals are meant to boost development and investment, and proponents say the lost tax revenue is worth it because they grow local economies. But it can be hard to know whether the benefits outweigh the burdens. And until recently it has been difficult to discern how much one entity may have lost because of another entity’s tax breaks. However, a governmental accounting rule issued in August 2015 now requires local U.S. governments to report how much money they lose on corporate tax breaks for development projects - their own, or another nearby governmental entity.
Chicago charter teachers strike for increased pay, lower class sizes --Teachers at fifteen Acero Charter Schools, one of more than 34 charter school operators in Chicago, went on strike Tuesday morning in the first strike against a US charter school operator. The teachers are demanding a reduction in class sizes, which are reported to be above 30 students; increased special education resources; and pay increases to bring charter teachers and paraprofessionals (called “apprentices”) closer to what Chicago Public School district teachers receive. Clerks and support staff at Acero do not have a pay schedule and are asking for one. Teachers are also asking for some assurance that Acero students and families will not be turned over to ICE without a court order. Tuesday afternoon in Chicago. “We charter teachers work much longer hours and days and teach hundreds of students a day.”Charter school teachers receive 15 percent lower pay and work longer days and school years than CPS teachers, who are themselves underpaid and overworked. Other charter school teachers have authorized strikes in recent weeks, including at Chicago International Charter Schools, Civitas Education Partners and Quest Management.The Acero network has 550 teachers and 7,500 students. It is formerly known as UNO, named for the United Neighborhood Organization that began it. UNO/Acero has intimate ties to the Illinois Democratic Party and business interests. The schools’ name change was the result of a major fraud scandal that took down former CEO Juan Rangel, who chaired Chicago Mayor Rahm Emanuel’s election campaign.The charter operators’ practice of taking in public funds and giving lush packages to their executives, but not paying their educators, is a major issue at Acero and other charter schools. Only yesterday, Acero released financial statements that are reported to show a multi-million-dollar budget surplus and expected classroom cuts.Acero teachers have been in bargaining for six months. The charter teachers’ union, United Educators for Justice, merged with the Chicago Teachers Union (CTU) earlier this year. CTU is now led by International Socialist Organization (ISO) member Jesse Sharkey.
'We Are All Here Together': Demanding Charter Network Use Vast Resources for Better Pay, First of Its Kind Teacher Strike in Chicago - Days after learning that their charter school network's refusal to give cost-of-living raises comes amid a cash windfall for the organization, about 550 teachers and staff members from Chicago's Acero Charter Schools went on strike Tuesday, forming picket lines and demanding fair wages and resources in the country's first charter school walkout. Classes were canceled for the network's 15 schools after contract negotiations, led by the Chicago Teachers Union (CTU), stalled just after midnight. Acero's teachers are demanding cost-of-living wages for paraprofessionals, reduced class sizes, and more special education teachers to support the network's 7,500 students. Teachers and supporters held signs reading "I'd rather be teaching but this is important" and "On strike for a fair contract" in both English and Spanish, in picket lines outside their schools.Teachers at Acero Marquez on the picket line. #FAIRCONTRACTNOW #ctuactsstrike pic.twitter.com/rDIpmN0rYV — AFT (@AFTunion) December 4, 2018 On Friday, Acero released an audit of its finances showing that in the midst of its stingy treatment of its teachers, it currently has $24 million in unrestricted cash on hand—$10 million more than it had at the end of 2017—and brought in $89 million in revenue this past year. "Yet they remain unwilling to provide a penny more in compensation to paraprofessionals, their lowest wage workers," said Chris Geovanis, CTU's communications director, in a statement. "Management has also refused to move on a host of other critical issues that would improve the quality of education for students and reduce staff turnover rates, which are currently averaging over 30 percent in a two-year cycle." The network spent $1 million less on staff and teacher salaries this year than it did in 2017, giving a small raise to educators which were found to be "paltry" and "laughable" according to the union, and giving no wage increases to paraprofessionals including teachers' aides, IT workers, and other staff.
Democrats, union tops seek to isolate Chicago charter teachers’ strike - Teachers at 15 Acero Charter Schools in Chicago, one of more than 34 charter school operators in the city, walked out Tuesday morning in the first ever strike against a US charter school operator. Pickets resumed Wednesday morning.Some 500 teachers in the suburb of Geneva, Illinois also remained on strike Wednesday.The Acero teachers are demanding a reduction in class sizes, increased classroom resources and pay increases. Clerks and support staff do not have a pay schedule and are asking for one. Teachers are also asking for some assurance that Acero students and families will not be turned over to Immigration and Customs Enforcement (ICE) without a court order.After six months of bargaining and two days on strike, few concrete details are being released by the Chicago Teachers Union (CTU) on its negotiations with Acero.Charter school teachers are even more exploited than Chicago Public Schools (CPS) teachers, who have suffered years of deteriorating conditions due to the collusion of the CTU with the Democratic-controlled city government. Charter teachers receive 15 percent lower pay than CPS educators and work longer school days and school years. Other charter school teachers have authorized strikes in recent weeks, including those at Chicago International Charter Schools, Civitas Education Partners and Quest Management, but they have not been mobilized by the union to back the strike at Acero and broaden the struggle.
Chicago charter teacher strike continues, as unions announce backing for Democratic machine politician - Teachers at fifteen Acero Charter Schools, one of more than 34 charter school operators in the city of Chicago, completed their third day on strike Thursday. Pickets are scheduled to resume early Friday morning.About 500 suburban Geneva, Illinois teachers have also completed their third day on strike. A large rally of teachers, parents and students was held on Wednesday.The Acero Charter School teachers in Chicago are demanding a reduction in class sizes, increased classroom resources and pay increases to bring their compensation and conditions closer to teachers and paraprofessionals in Chicago Public Schools (CPS)—who are themselves underpaid and overworked. Clerks and support staff at Acero do not have scheduled pay increases and are demanding them. Teachers are also asking for assurance that Acero students and families will not be turned over to ICE without a court order.Other charter school teachers have authorized strikes in recent weeks, including those at Chicago International Charter Schools, Civitas Education Partners, and Quest Management. The United Educators for Justice union, which merged this year with the CTU, is keeping teachers in the dark about negotiations, is limiting demands to paltry changes, and is isolating the Acero teachers from other teachers throughout the city. On Wednesday, the CTU announced its endorsement of Toni Preckwinkle, the longtime president of the Cook County Board of Commissioners and fixture of the Democratic Party establishment in the city, which has overseen the attack on public education.
Alyssa Milano mocks new DeVos policies on campus sexual assault with Dr. Seuss spoof - Actress and activist Alyssa Milano on Wednesday tore into Education Secretary Betsy DeVos’s new guidelines for how schools handle sexual misconduct allegations by spoofing a Dr. Seuss tale. “One ShIXtty Gift” was unveiled by It’s On Us, an anti-sexual assault organization founded during the Obama administration, to protest the Department of Education’s (DOE) proposed changes to Title IX. The fake holiday tale reads like a Dr. Seuss book and tells the story of DeVos concocting the new rules changes.“Late one evening at the Department of Ed, thoughts were bouncing around Betsy DeVos’s head,” Milano reads in a video. “ ‘She needed a gift,’ she started to think. ‘A gift for the people that would really stink.’ ”DeVos stayed up all night with her “shitty ideas pouring onto the page,” Milano reads.“No more investigation for off-campus rape — bars and house parties would totally be safe,” she continues. “The meaning of harassment, she would remove, squeeze and twist 'til it was hard to prove. Live hearings where attackers defend their own violence sounded like a good way to keep victims silent.”The proposed plan from the DOE would requires schools to investigate allegations of sexual assault and harassment only if the alleged incident took place in areas under the jurisdiction of the school and was reported to campus officials.It would also allow for those accused of wrongdoing to question their accusers in campus hearings.Rape statistics would go down because of DeVos policies, Milano read.“Not because things got better but because fewer would count,” she added.
Columbia University Promotes Letting Students Grade Themselves - Fresh on the heels of UC Berkeley saying they cannot trust kids to grade teachers, comes an even sillier Columbia idea.. According to a Columbia University PowerPoint presentation Trusting Students to Assess Themselves, inclusive grading starts by “trusting students to assess themselves.”I picked that link up from Columbia University Seminar to Promote ‘Inclusive Grading’. Rationale for Self-Grading: Teachers don't know how to grade or don't want to take the time. Not to worry. Columbia university will ask students to sign a pledge card so they won't cheat. That's sure to fix everything. 86% of Students Like It: "It was nice to know your grade right away and not torture yourself over a bad exam for a whole weekend.” Two days ago I noted The University of California, Berkeley is very unhappy with how students grade teachers.Students Say They Prefer White Male Professors: We Cannot Allow That, Can We?A Berkeley professor wants to nix student evaluations of teachers because students are biased.Over the next few weeks, students will get the chance to evaluate their professors and TAs. They're going to get it wrong. They'll be harder on women and people of color than on white men. Tenured white male faculty, in particular, should help their students understand this. 1/8— Brian DeLay (@BrianDeLay) November 25, 2018There you have it. Let's not ask students to rank teachers because "I, Brian DeLay, know the students will get it wrong."It is the height of arrogance for DeLay to tell students that he knows they are biased and wrong. Ironically, we are supposed to believe students will display bias when grading teachers but the students will have absolutely no bias when grading themselves
Four Out Of Five Racist Notes Were Fake At An Iowa University- School Officials -- Officials at an Iowa university said an 18-year-old student is facing criminal charges after being believed to have written four out of five racist notes on campus.The Drake University student, who has not been identified, admitted to writing one of the notes and also allegedly received one of the notes, the Des Moines Register reported Friday. The student reported four racist notes, which officials believe to be hoaxes. “The fact that the actions of the student who has admitted guilt were propelled by motives other than hate does not minimize the worry and emotional harm they caused, but should temper fears,” Drake University President Marty Martin wrote in a statement to students and staff, according to the Register.Martin added the notes reported on Nov. 13, Nov. 15 and on Nov. 28 are “copycat hoaxes of an initial campus incident. The initial note is not linked to the four fake notes, the Register reported. Des Moines police spokesman Paul Parizek said the female student faces harassment charges. She could also face expulsion from the university, Drake spokesman Jarad Bernstein said, according to the Register. More than 3,000 students along with other people hosted a rally as a result of the reported notes. A student speaker at the rally believed her life was in danger at the school. Students also covered a street that is typically filled with colorful artwork with black paint.“To demonstrate shared commitment to Drake University’s students of color, the campus community will join together to paint the Painted Street black, a powerful statement of solidarity and anti-racism,” a Paint It Black: Street Painting event on Facebook said. The investigation is ongoing at the university.
New York University faculty defends academic freedom against NYU’s ties to UAE --Dozens of New York University faculty gathered December 3 in a forum to voice their concerns over the NYU administration’s response to the case of Matthew Hedges, a British academic who was imprisoned for months in the United Arab Emirates (UAE) on trumped-up charges. Despite an open letter —presently signed by 224 faculty, staff and PhD students—demanding NYU President Andrew Hamilton condemn Hedges’s arrest and take measures to secure academic freedom, NYU continues to cover for the UAE government.Given NYU’s role in the UAE, where it has a degree-granting campus in Abu Dhabi (NYUAD), the silence of the administration amounts to complicity. The UAE gave $50 million to the construction of the NYUAD campus, and a high-ranking member of the UAE government sits on the NYU Board of Trustees. His fellow board members are an ignominious group of New York City multimillionaires and billionaires, including several who sit on the boards of imperialist think tanks like the Center for Strategic and International Studies.After an international outcry, including the NYU faculty letter, Hedges was hastily pardoned and allowed to the leave the UAE. He has since explained to the Telegraph that after he was sentenced, he was interrogated yet again, prompting suicidal ideation. While he was imprisoned, his captors administered both tranquilizers and stimulants to him without proper medical supervision, leaving Hedges suffering from withdrawal symptoms in the UK. At the faculty forum, titled “NYU, UAE, & Academic Freedom,” three faculty members who had experience with NYUAD and the UAE government spoke, followed by contributions from the floor. The common theme was that academic freedom was anything but sacrosanct in both the UAE and at NYUAD, and that the NYU administration is fully aware yet continues to claim otherwise.
Not-So-Funhouse Mirrors - A fraudulent university that is also a fraudulent publishing empire and a fraudulent shopping network is an unsettling example of what can happen when the reality replicator gets gummed up. So, a for-profit "Christian" “university” founded by an evangelical pastor that is being investigated for fraud is connected to some 140 LLCs that, among other things, run Amazon storefronts selling cheap goods at high prices as well as a publishing empire (also being investigated for fraud) that purchased Newsweek magazine at a bargain-bin price (firing Newsweek journalists who began to investigate their owners) and, incidentally, also runs storefronts including a bookstore that isn’t exactly running like a bookstore (you want to buy a book? Are you sure?) . . . it’s a wild story. Art history professor and sometime-journalist Jenny Odell has pulled all the threads and ended up with a big ball of “what the heck is going on here?” for which she has no answer. It’s as if someone created an artificial intelligence bot and trained it on a mix of Amazon shopping habits, money laundering practices, and prosperity gospel evangelism before setting it loose to whir and spin off fraudulent businesses, a web of simulated reality that somehow is profitable. This kind of unanticipated use of platform capitalism isn’t entirely new. Remember when, just after Amazon launched its self-publishing platform, weird books started showing up for sale that were random compilations of Wikipedia articles? Perfectly legal, because Wikipedia articles are in the public domain, but the packaging was designed to defraud people, and it often worked. I suppose we could go back to the early days of printing and the ways printers jumbled together stuff and sold it before the concept of copyright vested power in authors to control their work so it couldn’t scamper away and reproduce in unexpected places. Or we could contemplate machine-generated academic papers (so much more efficient than writing them!)* and automated essay graders (so much more efficient than reading them or, you know, teaching students anything). It’s not without precedent. But there is something disturbing about the complexity and sheer weirdness of this scheme, as if it pulled some bits of modern life together into a shell company game where they began to replicate feverishly – website after website, company upon company, a simulation of contemporary commerce, all of it . . . melted into air, thin air. It’s fitting that one connecting thread Odell found among all of these businesses and websites is the word “dream.” This web of enterprises is made of such stuff as entrepreneurial dreams are made of. Great globalization shall dissolve, their cloud capped towers and gorgeous palaces made of baseless fabric, an insubstantial pageant.
Sudden closure of for-profit Education Corporation of America leaves 20,000 students without an education --The Education Corporation of America, (ECA) one of the largest for-profit colleges in the United States which operated across over 70 campuses and managed an online school, abruptly announced this week that they would shut down operations at almost all locations, following their disaccreditation on Tuesday. Several thousand staff and the 20,000 students who attended their schools have been left to an uncertain future. No real provisions were made for the students who were suddenly left without an education for the next year. Students were sent an email on Tuesday telling them that their school would close after finals ended on Friday and were simply told “we encourage you to continue your career training by requesting your transcript and contacting local schools to determine transferability." They were linked a webpage that is still in development to access unofficial transcripts. Whether or not other schools will give credit for class taken at ECA schools is also an open question, since the ECA is no longer accredited. Following the closure of the majority of their campuses, the ECA will, in all likelihood, begin laying off a significant number of its employees. It has said that intends to keep only a bare-bones workforce until the summer of next year, when it says it will shut down permanently. High tuition and burdensome student loans are a reality for those in the US seeking an education beyond high school. This is even true for most students at public universities. There are 44.5 million Americans saddled with student load debt, totaling about $1.5 trillion. It is consequently one of the most lucrative businesses to be in. While the ECA has told students that they can apply for debt forgiveness, it is likely that the company will only make token concessions, if they are themselves even in a position to make those decisions in the coming years. This is not the first time a large private for profit education company has faced financial trouble and left its students to fend for themselves. Some recent history reveals how the student loan debt of former ECA students will be treated by the corporations and by the government…
“Education Corporation of America, Virginia College, and Brightwood College Turn Out the Lights”: Important Advice to ECA students from Steve Rhode -- “Just got reports (from several campuses) that ECA has decided to close down all schools (teach out and go forward) effective immediately. Apparently, ACICS pulled their accreditation. Current employees are being let go immediately with no severance or insurance after Friday, 12/7. Don’t know all details yet as its only been a few hours and the media and news outlets have not picked up the story. I wanted to let you know since you have reported the most accurate coverage on ECA’s unraveling. It’s very sad to see ECA end like this. Many people that worked for the colleges truly cared about the students and making a difference in their life. There will be many students that will not be able to finish their education and many remaining employees that will be without a job right before Christmas. This is all so very sad.” It does appear that ECA and Virginia College are turning out the lights. WRDW 12 in Georgia said yesterday, “A news photographer on the scene spoke with at least two people who say employees were called into a meeting this morning and told the College was being closed. Workers were reportedly told to go home and that they will not be receiving further paychecks. People we spoke to also say they were told this is occurring at locations in other states.” – Source Students who owe federal student loans should immediately talk to their loan servicer regarding the process for a full discharge of their federal student loans if there is no available teach-out program offered by ECA. By receiving a closed school loan discharge,
- you have no further obligation to repay the loan,
- you will receive reimbursement of payments made voluntarily or through forced collection, and
- the record of the loan and all repayment history associated with the loan, including any adverse history, will be deleted from your credit report.
To be eligible for a full discharge of your student loans, your loans must have been “William D. Ford Federal Direct Loan (Direct Loan) Program loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans.” Loans most easily eligible for forgiveness are ones if:
- you were enrolled when your school closed;
- you were on an approved leave of absence when your school closed; or
- your school closed within 120 days after you withdrew.
For more information on obtaining a closed school discharge, click here.
Graduate School Can Have Terrible Effects on People’s Mental Health --The doctoral-degree experience often consists of intense labor expectations for little pay and a resulting lack of sleep and social life. In addition, there is the notorious hierarchy of academia, which often promotes power struggles and tribalism. To make matters worse, the payoff for all that stress may be wanting: A 2014 report found that nearly 40 percent of the doctoral students surveyed hadn’t secured a job at the time of graduation. What’s more, roughly 13 percent of Ph.D. recipients graduate with more than $70,000 in education-related debt, though in the humanities the percentage is about twice that. And for those who do secure an academic post, census data suggest that close to a third of part-time university faculty—many of whom are graduate students—live near or below the poverty line.A new study by a team of Harvard-affiliated researchers highlights one of the consequences of these realities: Graduate students are disproportionately likely to struggle with mental-health issues. The researchers surveyed roughly 500 economics Ph.D. candidates at eight elite universities, and found that 18 percent of them experienced moderate or severe symptoms of depression and anxiety. That’s more than three times the national average, according to the study. Roughly one in 10 students in the Harvard survey also reported having suicidal thoughts on at least several days within the prior two weeks. (Other recent studies have had similar findings, including one published earlier this year that described graduate-student mental health as a “crisis.”) The study’s results, which also include survey responses from nearly 200 faculty members, indicate that many Ph.D. students’ mental-health troubles are exacerbated, if not caused, by their graduate-education experiences. Roughly half of the respondents in the Harvard study with anxiety and/or depression had been diagnosed sometime after starting their graduate studies. And students toward the end of their programs were far more likely than those who were just embarking on their graduate journeys to report severe symptoms of anxiety or depression.
More people with mental illnesses seeking treatment from US emergency rooms --The lack of appropriate mental health services in the United States has led patients to increasingly seek care in hospital emergency rooms—a practice known as “psychiatric boarding.” Others only receive mental healthcare within the confines of jails and prisons, often incarcerated for crimes associated with their mental illness.The bleak situation faced by millions of Americans with mental health problems was highlighted in a recentarticle by Dr. Anne Zink, published by STAT, an online health publication produced by Boston Globe Media. Dr. Zink is the medical director for emergency medicine at Mat-Su Regional Medical Center in Palmer, Alaska. According to the article, nearly 1 in 5 adults, some 44 million people, experience mental illness every year, a figure that is projected to increase in the coming years. Every year approximately 1 in 25 adults, 9.8 million people, experience a serious mental illness that severely interferes with their major life activities.Homeless people make up one of the largest populations suffering serious mental health problems. According to the National Alliance on Mental Health, an estimated 26 percent of homeless adults who stay in shelters have a serious mental illness. Forty-six percent of the homeless live with severe mental illness and/or drug use disorders.The United States’ homeless population expanded in the aftermath of the 2008 financial crisis, with the population increasing in 2016 for the first time since 2010. Rent prices soared beyond what the average worker could pay, while mental health services became less affordable and accessible. There is no doubt that the growth of underemployment and unemployment has contributed significantly to the psychological distress among workers and youth. The annual rise in mental illness has created an atmosphere where, according to Zink, “the demand for mental health professionals is outstripping supply.” A 2017 report from the National Council for Behavioral Health estimated that the psychiatric deficit will be between 6,100 and 15,600 by 2025.
Without Obamacare Penalty, Think It’ll Be Nice To Drop Your Health Insurance? Better Think Twice --Dana Farrell’s car insurance is due. So is her homeowner’s insurance — plus her property taxes. “I’ve been retired two years and my savings is gone. I’m at my wit’s end,” So Farrell plans — reluctantly — to drop her health coverage next year because the Affordable Care Act tax penalty for not having insurance is going away. That penalty — which can reach thousands of dollars annually — was a key reason that Farrell, who considers herself healthy, kept her coverage. Farrell is among millions of people likely to dump their health insurance because of a provision in last year’s Republican tax bill that repeals the Obamacare tax penalty, starting in 2019, by zeroing out the fines. The Congressional Budget Office estimated that the repeal of the penalty would move 4 million people to drop their health insurance next year — or not buy it in the first place — and 13 million in 2027. Some people who hated Obamacare from the start will drop their coverage as a political statement. For people like Farrell, it’s simply an issue of affordability. Instead, she plans to pay cash for her doctor visits at about $80 a pop, and for any medications she might use — all the while praying that she doesn’t get into a car accident or have a medical emergency.“It’s a situation that a lot of people find themselves in,” says Miranda Dietz, lead author of a new study that projects how ending the penalty will affect California.People like Farrell whose incomes are too high to qualify for tax credits are especially vulnerable, says Dietz, a research and policy associate at the University of California-Berkeley Center for Labor Research and Education. They must pay the entire premium themselves. Premiums, even for a bronze plan with a deductible of more than $6,000, are enormous in some cases, she says. “The state’s done a great job of implementing the ACA,” she says, “but there are still Californians who just find insurance out of reach.”
Millions of Americans Could Face Surprise Emergency Room Bills in January --A flood of surprise hospital bills could start arriving in U.S. mailboxes as early as January unless two giant for-profit health care companies resolve a dispute over whether thousands of doctors remain in patients’ insurance networks. America’s biggest health insurer, UnitedHealthcare, is pitted against one of the country’s largest employers of doctors, Envision Healthcare, in a massive contract fight over prices that Envision’s 25,000 emergency doctors, anesthesiologists and other hospital-based clinicians charge. A contract impasse would mean that UnitedHealthcare’s 27 million privately insured patients could face expensive, unexpected doctor bills as of Jan. 1 when Envision doctors would become out-of-network. Envision has already been criticized for its billing practices in situations where its doctors don’t participate in patients’ health plans. A Florida man got a bill for $2,255 from an Envision subsidiary after being treated by an out-of-network emergency doctor in 2014 for a facial injury, according to a lawsuit he filed earlier this year. In another case, a California woman went to an in-network hospital for abdominal pain and found she needed emergency gallbladder surgery. The operation was covered, but she faced $4,447 in bills from Envision for two trips to the emergency department.
Lawler: US Death Rate Up, Life Expectancy Down in 2017 - CR Note: The summary paragraph is key. Demographics are worse than they appeared a few years ago. From housing economist Tom Lawler: US Death Rate Up, Life Expectancy Down in 2017…The National Center for Health Statistics (NCHS) reported that there were 2,813,503 US deaths in 2017, 69,255 higher than in 2016. The “age-adjusted” death rate (per 100,000) increased to 731,9 in 2017 from 728.8 in 2016, while the estimated life expectancy at birth declined to 78.6 in 2017 from 78.7 in 2016. Below is a table showing some historical death rates for selected age groups. What is especially striking about this table is the sharp increase in death rates among 25-44 year old over the last five years. The NCHS also reported that there were 70,237 drug overdose deaths in 2017, up from 63,632 in 2016. Here is a table showing some historical drug overdose deaths for selected age groups. The NCHS did note that provisional data for the first four months of 2018 suggest that drug overdose death rates declined very slightly from last year’s alarmingly high rates. According to the NCHS, there were 47,143 suicides in the US last year, up from 44,965 in 2016. The NCHS death data highlight some serious issues facing the US. They also highlight the serious issues associated with the latest medium- and long-term population projections from Census. Below is a table comparing the so-called “Census 2017” Population Projections for deaths compared to the NCHS data.
Why Hospitals Should Let You Sleep - If part of a hospital stay is to recover from a procedure or illness, why is it so hard to get any rest? There is more noise and light than is conducive for sleep. And nurses and others visit frequently to give medications, take vitals, draw blood or perform tests and checkups — in many cases waking patients to do so.Some monitoring is necessary, of course. Medication must be given; some vital signs do need to be checked. And frequent monitoring is warranted for some patients — such as those in intensive care units. But others are best left mostly alone. Yet many hospitals don’t distinguish between the two, disrupting everyone on a predefined schedule.Peter Ubel understands the problem as both a physician and patient. When he spent a night in the hospital recovering from surgery in 2013, he was interrupted multiple times by blood draws, vital sign checks, other lab tests, as well as by the beeping of machines. “Not an hour went by without some kind of disruption,” said Dr. Ubel, a physician with Duke University. “It’s a terrible way to start recovery.” It’s more than annoying — such disruptions can harm patients. Short sleep durations are associated with reduced immune function, delirium, hypertension and mood disorders. Hospital conditions, including sleep disruptions, may contribute to “posthospital syndrome” — the period of vulnerability to a host of health problems after hospitalization that are not related to the reason for that hospitalization. “In addressing a patient’s acute illness, we may inadvertently be causing harm by ignoring the important restorative powers of a healing environment,” said Harlan Krumholz, a Yale University physician who has been calling attention to posthospital syndrome for several years. “The key to a successful recovery after illness may be a less stressful, more supportive, more humane experience during the hospitalization.” It’s an environment that, all too often, seems set up for everyone else’s convenience but the patient’s. To help patients deal with the stresses of hospitalization, sedatives are often prescribed. These medications, including opioids, carry their own risks, such as addiction.“Instead, we could make the environment more conducive to rest and reduce the use of sedatives,” Dr. Ubel said.
More than 5,500 women came to Illinois to have an abortion last year amid growing restrictions in the Midwest -- More women are crossing state lines to have abortions in Illinois, according to the latest statistics from the Illinois Department of Public Health, which were released earlier this week. Last year, 5,528 women traveled to Illinois from other states to terminate pregnancies, almost a thousand more than the 4,543 women who came from out of state in 2016. The total number of abortions statewide during the same period increased slightly, from 38,382 in 2016 to 39,329 in 2017, according to annual state reports. Of those, about 1,000 abortions each year were provided to women whose home states were marked “unknown.” While the data doesn’t indicate the reason for out-of-state travel, Illinois is generally considered a reproductive rights haven amid the more restrictive Midwest, where women often face waiting periods, gestational limits, fewer clinics and other hurdles.
We Are Losing Too Many Americans - Drug Overdose Deaths Spike, Life-Expectancy Tumbles -- American drug overdose deaths surged above 70,000 in 2017, a 10% jump to a new record as life expectancy across the country plunged for the second time in three years, according to a government report out Thursday.CDC Director Robert Redfield said the data was deeply "troubling.""Life expectancy gives us a snapshot of the Nation's overall health and these sobering statistics are a wakeup call that we are losing too many Americans, too early and too often, to conditions that are preventable," Redfield said in a statement Thursday, adding that the decline in overall life expectancy is linked to the accelerated rise in deaths from drug overdose and suicide.Suicide rates moved higher, by about 3.7%. Together, these two causes of death decreased US life expectancy for the second year in a row, the CDC reported. As shown in the graphic below, most of the drug overdoses are occurring in deindustrialized regions of the country, including Rust Belt states and parts of the Mid Atlantic and North East.Age-adjusted drug overdose death rates, by state: US, 2017 Overall life expectancy for Americans was 78.6 years in 2017, a reduction of 0.1 years. While the drop might not seem like much, life expectancy tends to rise, not reverse, which suggests the continuation of decay within the middle class.The death rates are driven by a 9.6% jump in drug overdose deaths, from 63,632 in 2016, to 70,237 in 2017. Most of the overdoses involved opioids and or opioid analogs.Age-adjusted drug overdose rates: US, 1999-2007:
This Opioid Antidote Was Hiked 600% To Exploit Crisis An American drug company hiked the price of its opioid-overdose antidote by 600% since going to market in 2014, has cost Medicare and Medicaid health programs $142 million, according to a new Senate subcommittee report, which called the company's actions a way of taking advantage of the worst drug overdose crisis in US history. Senators Rob Portman of Ohio and Tom Carper of Delaware said in the report, published last week, that Kaleo, Inc. "exploited the opioid crisis by increasing the price of its naloxone drug EVZIO by more than 600 percent (from an initial price of $575 per unit to $3,750 and then $4,100 eleven months later)." Portman, a Republican, and Carper, a Democrat, head the Senate Homeland Security and Governmental Affairs investigative subcommittee, determined the Virginia-based company advise doctors’ offices to sign documents establishing that Evzio, which administers the opioid antidote naloxone, was medically necessary for overdoses - guaranteeing government health programs would cover costs.“Naloxone is a critically important overdose reversal drug that our first responders have used to save tens of thousands of lives,” Portman said in a statement.“The fact that one company dramatically raised the price of its naloxone drug and cost taxpayers tens of millions of dollars in increased drug costs, all during a national opioid crisis no less, is simply outrageous.” Kaleo justified its pricing strategy in a statement and said it was strategizing with insurers to lower prices.
Dark web dealers voluntarily ban deadly fentanyl - Major dark web drug suppliers have started to voluntarily ban the synthetic opioid fentanyl because it is too dangerous, the National Crime Agency has said. They are “delisting” the high-strength painkiller, effectively classifying it alongside mass-casualty firearms and explosives as commodities that are considered too high-risk to trade. Fentanyl can be up to 100 times stronger than heroin and can easily cause accidental overdoses, particularly when mixed with heroin. Vince O’Brien, one of the NCA’s leads on drugs, told the Observer that dark web marketplace operators appeared to have made a commercial decision, because selling a drug that could lead to fatalities was more likely to prompt attention from police. It is the first known instance of these types of operators moving to effectively ban a drug. O’Brien said: “If they’ve got people selling very high-risk commodities then it’s going to increase the risk to them. There are marketplaces that will not accept listings for weapons and explosives – those are the ones that will not accept listings for fentanyl. Clearly, law enforcement would prioritise the supply of weapons, explosives and fentanyl over, for example, class C drugs – and that might well be why they do this. “There are also drug users on the dark web who say on forums that they don’t think it’s right that people are selling fentanyl because it is dangerous and kills a lot of people.”
Stress eats holes in your brain -- According to a recently released Yale University study, stress causes the brain to shrink. So next time you're stressed to the gills and cannot focus, think or remember the ingredients for the meatloaf you make every week, you can legitimately blame stress. "It's a short, easy story, actually," said neuroscientist and author David Eagleman. "Stress is underpinned by particular hormones that circulate through the body and the brain. Those stress hormones are very bad for brain tissue. They eat away at brain tissue. "What's new to be stressed about is that stress is literally chewing miniature holes in your brain." Not all stress poses a problem; our bodies are designed to combat stress by releasing the hormone cortisol. That response grew out of stresses such as, say, being chased by a tiger. "The general story is that we evolved to have stress systems that are useful when you need a fast response," said Eagleman, director of the Laboratory for Perception and Action at the Baylor College of Medicine in Houston. "What we did not evolve for is chronic stress, that 21st-century stress that man and woman lives with." Instead of a burst of a stress hormone, most people have chronically elevated levels, he said. "The body is simply not built to have high levels of stress for long periods," he said. "That's where the stuff eats away at your brain tissue." The frontal lobe has been identified as "the most critical to everyday functionality," Chapman said. "When you have the impact of stress, things that allow you to be successful will be impaired. You can't figure out how to juggle things, to set priorities." That's one of four areas of the brain affected by stress. Robert Sapolsky of Stanford University calls the hippocampus "ground zero for stress doing
Visualizing Eastern Europe's Deadly HIV Problem - Saturday marked World AIDS Day which aims to promote awareness of the disease and mourn those who have died from it.As Statista's Niall McCarthy notes, the event came into existence in 1988 and it has been widely observed by health officials, governments and non-governmental organizations since then.One aspect of HIV which needs to be highlighted more frequently is its growing infection rate across Eastern Europe and Russia in particular. According to new data from the European Centre for Disease Prevention and Control and World Health Organization, there were 71 new HIV diagnoses per 100,000 people in Russia last year.Ukraine came a distant second with 37 while third-placed Belarus had 26. The lowest rates of new diagnoses per 100,000 people were recorded in Bosnia and Herzegovina (0.3), Slovakia (1.3) and Slovenia (1.9). (graphic map)
Goldman Sachs asks in biotech research report- 'Is curing patients a sustainable business model?’ - Goldman Sachs analysts attempted to address a touchy subject for biotech companies, especially those involved in the pioneering "gene therapy" treatment: cures could be bad for business in the long run."Is curing patients a sustainable business model?" analysts ask in an April 10 report entitled "The Genome Revolution.""The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies," analyst Salveen Richter wrote in the note to clients Tuesday. "While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow." Richter cited Gilead Sciences' treatments for hepatitis C, which achieved cure rates of more than 90 percent. The company's U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report."GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients," the analyst wrote. "In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise." The analyst didn't immediately respond to a request for comment.
Reports out of China suggest first human gene-edited babies have been born - On Sunday, news reports indicated that the first gene-edited human babies had been born in China. As of right now, the information on what, exactly, has been accomplished is confusing. The scientist behind the announcement has made a variety of claims but has not submitted his data to the community in order for his claims to be verified. But even in its current state, the announcement has set off a firestorm of criticism within the scientific and ethics communities. Most scientists feel that the technology isn't ready for use in humans and that there are better ways to deal with the problem the work was addressing: HIV infection. The most complete report we currently have comes from the Associated Press. Its reporters talked to the researcher behind the announcement, He Jiankui of Shenzhen, China, in advance of his public announcement. That public announcement came at the start of the Second International Summit on Human Genome Editing, taking place this week in Hong Kong. The summit is intended to help work out the "science, application, ethics, and governance of human genome editing," but He apparently chose to go ahead in advance of those being settled.He is expected to present more details of his work on Wednesday, but it's clear that he used biotechnology called CRISPR to perform the gene editing. CRISPR is a system that evolved in bacteria to protect them from viruses by allowing them to recognize and cut viral DNA. By changing part of the CRISPR system, it's possible to direct it to cut an arbitrary DNA sequence. That can include sequences within the human genome.Cells interpret the resulting break in their DNA as damage and attempt to repair it. In many cases, this repair is inexact and results in the deletion of a handful of individual base pairs within the targeted sequence. Depending on the precise details of this deletion, this can disable a targeted gene. (There are also means of replacing the targeted sequence, but those weren't needed for the work described here.)This is where the first ethical issue of the work comes in. The frequency of successful editing in early work on human cells was only about five percent. And just this year, a study involving human cells showed that CRISPR editing can also make arbitrarily large deletions that affect neighboring genes or trigger complex rearrangements of the genome that can be difficult to detect if they aren't specifically looked for. All of this suggests that accurate editing of a single targeted gene isn't guaranteed, and we're still working out how to screen for it.
Chinese scientist who claimed gene-editing success now missing: report - The Chinese scientist who claimed to have created the world's first gene-edited babies, He Jiankui, is missing after his former employers denied that he was detained over the weekend, the South China Morning Post reports. A spokeswoman for his former workplace, the Southern University of Science and Technology in Shenzhen, denied reports that He was being detained. “Right now nobody’s information is accurate, only the official channels are," the spokeswoman told the newspaper, while also declining to elaborate. He apparently hasn't been seen publicly since making an appearance at a scientific summit on Wednesday. He said last week that he hadaltered embryos for seven couplesduring fertility treatments.Two of the embryos were those of twin baby girls, whose DNA he altered to helped them resist AIDS. He said that the girls were born "normal and healthy."The controversial work has earned He the nickname of "Chinese Frankenstein," according to South China Morning Post, and many scientists have expressed worry about his reported work.He's university said it would hire investigators to look into He's claims and, if they are true, that He would have "seriously violated academic ethics and standards."Local authorities also began investigating He's work. He is also being investigated by China's National Health Commission on the experiment and a top Ministry of Science and Technology official told state media He's work was "extremely abominable," according to Time magazine.
Despite CRISPR baby controversy, Harvard University will begin gene-editing sperm MIT Technology Review - In the wild uproar around an experiment in China that claimed to have created twin girls whose genes were altered to protect them from HIV, there’s something worth knowing—research to improve the next generation of humans is happening in the US, too. In fact, it’s about to happen at Harvard University.At the school’s Stem Cell Institute, IVF doctor and scientist Werner Neuhausser says he plans to begin using CRISPR, the gene-editing tool, to change the DNA code inside sperm cells. The objective: to show whether it is possible to create IVF babies with a greatly reduced risk of Alzheimer’s disease later in life. To be clear, there are no embryos involved—no attempt to make a baby. Not yet. Instead, the researchers are practicing how to change the DNA in sperm collected from Boston IVF, a large national fertility-clinic network. This is still very basic, and unpublished, research.Yet in its purpose the project is similar to the work undertaken in China and raises the same fundamental question: does society want children with genes tailored to prevent disease?Since Sunday, when the CRISPR babies claims was made public, medical bodies and experts have ferociously condemned He Jiankui, the Chinese scientist responsible. There is evidence his experiments—now halted—were carried forward in an unethical, deceptive manner that may have endangered the children he created. China’s vice minister of science and technology, Xu Nanping, said the effort “crossed the line of morality and ethics and was shocking and unacceptable.” Amid the condemnation, though, it was easy to lose track of what the key experts were saying. Technology to alter heredity is for real. It is improving very quickly, it has features that will make it safe, and much wider exploratory use to create children could be justified soon.
Scientists, ethicists slam decisions behind gene-edited twins -As more details regarding the first gene-edited humans are released, things continue to look worse. The researcher who claimed the advance, He Jiankui, has now given a public talk that includes many details on the changes made at the DNA level. The details make a couple of things clear: we don't know whether the editing will protect the two children from HIV infections, and we can't tell whether any areas of the genome have been damaged by the procedure. All of that raises even further questions as to whether He followed ethical guidelines when performing the work and getting consent from the parents. And, more generally, nobody is sure why He chose to ignore a strong consensus that the procedure wasn't yet ready for use in humans. In response to the outcry, the Chinese government has shut down all further research by He, even as it was revealed that a third gene-edited baby may be on the way. While the US already has rules in place that are intended to keep research like He's from happening, a legal scholar Ars spoke with suggested there may be a loophole that could allow something similar here. In light of that, it's important to understand the big picture He has potentially altered. What exactly happened in China and why does it concern so many in the scientific community? Prior to this work, a strong consensus existed among the scientific community that, although technology for editing the human genome was available, we didn't know enough yet about how to check its safety and effectiveness to determine how to ethically use it. And, as it turns out, He's work appears to provide a demonstration of nearly everything that had the research community concerned.The fact that one of the two twins has different deletions also points to another worrisome aspect to this work: not every cell in the embryo was edited at the same time and in the same manner, even though the editing machinery was injected when the embryo was a single cell. The resulting embryos could be a mosaic of unedited cells and cells with different types of damage to the intended gene. In fact, we now know that one of the twins also has some cells where one copy of the gene wasn't edited at all, meaning this twin has thus taken on the risks of gene editing without the supposed benefit of HIV protection. This also means we don't know which of these changes (if any) will be inherited by any kids the twins have.
The US Military Is Genetically Engineering New Life Forms To Detect Enemy Subs -- Via: Defense One: How do you detect submarines in an expanse as large as the ocean? The U.S. military hopes that common marine microorganisms might be genetically engineered into living tripwires to signal the passage of enemy subs, underwater vessels, or even divers.It’s one of many potential military applications for so-called engineered organisms, a field that promises living camouflage that reacts to its surroundings to better avoid detection, new drugs and medicines to help deployed forces survive in harsh conditions, and more. But the research is in its very early stages, military officials said. The Naval Research Laboratory, or NRL, is supporting the research. Here’s how it would work: You take an abundant sea organism, like Marinobacter, and change its genetic makeup to react to certain substances left by enemy vessels, divers, or equipment. These could be metals, fuel exhaust, human DNA, or some molecule that’s not found naturally in the ocean but is associated with, say, diesel-powered submarines. The reaction could take the form of electron loss, which could be detectable to friendly sub drones.
Global food system is broken, say world’s science academies - The global food system is broken, leaving billions of people either underfed or overweight and driving the planet towards climate catastrophe, according to 130 national academies of science and medicine across the world. Providing a healthy, affordable, and environmentally friendly diet for all people will require a radical transformation of the system, says the report by the InterAcademy Partnership (IAP). This will depend on better farming methods, wealthy nations consuming less meat and countries valuing food which is nutritious rather than cheap. The report, which was peer reviewed and took three years to compile, sets out the scale of the problems as well as evidence-driven solutions. The global food system is responsible for a third of all greenhouse gas emissions, which is more than all emissions from transport, heating, lighting and air conditioning combined. The global warming this is causing is now damaging food production through extreme weather events such as floods and droughts. The food system also fails to properly nourish billions of people. More than 820 million people went hungry last year, according to the UN Food and Agriculture Organisation, while a third of all people did not get enough vitamins. At the same time, 600 million people were classed as obese and 2 billion overweight, with serious consequences for their health. On top of this, more than 1bn tonnes of food is wasted every year, a third of the total produced. “The global food system is broken,” said Tim Benton, professor of population ecology, at the University of Leeds, who is a member of one of the expert editorial groups which produced the report. He said the cost of the damage to human health and the environment was much greater than the profits made by the farming industry.
One in six pints of milk thrown away each year, study shows - One in six pints of milk produced around the world is lost or wasted, according to research conducted at Edinburgh University for the Guardian. Sixteen percent of dairy products – 116m tonnes – is lost or discarded globally each year, according to Prof Peter Alexander, a member of the newly formed Global Academy of Agriculture and Food Security. He calculated that retailers, distributors and consumers are responsible for half of this waste, throwing away roughly 60m tonnes of dairy a year. About 55m tonnes are lost before they even reach a store – during production and distribution – due to spoilage and waste at the farm, or while the milk is being distributed and exported abroad. However, some analysts believe dairy waste figures could be as high as 30% if further inefficiencies such as flooding foreign markets, using milk as animal feed and overconsumption, are taken into account. “To achieve a more efficient system, and reduce the environmental impacts from our food production, we need to consider ways to reduce all these sources of loss,” said Alexander. In many developing countries, the percentage of milk lost from farm to store is much higher than in more economically developed countries, due to difficulties in storing and transporting products. For example, 15% of Oman’s milk is lost at the farm level, compared with 0% in Sweden, according to the UN’s Food and Agriculture Organisation (FAO). In more developed countries, such as the UK, milk and dairy tend to get thrown away at the retailer and consumer level. According to Wrap, the UK government’s waste reduction body, a fifth of all food waste in the UK is dairy. Despite this, dairy production has been growing rapidly around the world over the past four years, rising by 6% between 2014 and 2018, according to the US Department of Agriculture (USDA). The biggest production increases were seen in India, Canada, the Netherlands and Ireland.
Waste Not, Want Not - No one condones trashing edible food, especially when 12 percent of U.S. households don’t know where their next meal is coming from. And it has serious environmental consequences: Agriculture generates a third of U.S. greenhouse gas emissions, and roughly a fifth of the nation’s pesticide, water, and fertilizer usage goes into growing food that will nourish no one. It’s also a waste of money. Researchers estimate that 40 percent of the American food supply isn’t eaten, a shopping cart worth $218 billion. Schools are a big part of the problem. The USDA’s National School Lunch Program serves 30 million kids every school day, a point of justifiable pride. But the program also wastes about $5 million worth of edible food every school day. That’s $1.2 billion in losses per school year. The price tag is bad enough, but tacitly teaching children that it’s OK to throw out untouched portions of cheese ravioli and chicken tenders may be even worse. Why do schools waste so much? The quality of food can be questionable, given the lack of on-site cooking facilities and minimal USDA funding. And many students end up with food that they don’t want, thanks to a USDA reimbursement requirement that students take lunch items from at least three out of five categories — vegetable, fruit, protein, grains, and milk. At least one of those choices must be a fruit or vegetable. In theory, having food choices reduces waste, but students aren’t allowed to take just one or two items they know they’ll eat. Aiming for the federal government to cover a “reimbursable meal,” staff often push students to take more.
Sustainable palm oil doesn’t make the grade - From food and biofuels to cosmetics and detergents, palm oil is found in countless products these days. Demand for the oil has surged in the last decade—global usage went from 37 million metric tons in 2006 to 64.2 million in 2016—in part because it is cheap and, for a time, enjoyed a good-for-you reputation. But what sounds good for us isn't good for the forests where oil palms (Elaeis guineensis) are harvested. According to a Purdue University study, deforestation is rising in major oil palm-producing countries. And it's happening even faster in areas certified as "sustainable." "Oil palms are grown in some of the most sensitive and ecologically important forests in the world. Protecting them is important," said Roberto Cazzolla Gatti, research associate at the Forest Advanced Computing and Artificial Intelligence Lab of the Department of Forestry and Natural Resources at Purdue University. "But we've seen that even when operations are certified as sustainable, there is still significant forest loss. It seems that there is no way to sustainably produce palm oil to meet today's global demand." The Roundtable on Sustainable Palm Oil (RSPO), formed by retailers, banks, investors and environmental advocates in 2004, and the Palm Oil Innovation Group, a similar organization founded in 2013, developed guidelines that allow for sale of palm oil as sustainable. That label means ensuring that forest conservation value is assessed and steering clear of high-carbon stock areas. Those efforts, according to Gatti's research, are not effective. In areas where certified sustainable palm oil is being harvested, deforestation is rapidly increasing.
Bees Get Stung by Decision to Scale Back National Monument - One year after President Trump slashed the Grand Staircase-Escalante National Monument in half, new research shows that at least 80 species could be harmed. And that’s just the bees.Trump’s proclamation noted President Clinton had declared the Utah wilderness “one of the richest floristic regions in the Intermountain West.” But it asserted that Clinton identified “only a few” species worth protecting—and those few species would still do fine after Trump fractured the monument and shrunk it by 870,000 acres.As the courts decide whether Trump’s move was legal, bees could face new problems from human disturbances made worse by climate change (though some may ultimately benefit).Researchers have spent years studying all the bee species—660, they believe—that live within the national monument’s 1.7 million acres. Much remains a mystery. There’s almost as many bee species in Grand Staircase-Escalante as there are east of the Mississippi, said Olivia Messinger Carril, one of the study’s authors. The findings were published in the journal PeerJ.They include highly specialized creatures whose range is the size of a living room. Some live off a single kind of cactus or venture into the open air for a few weeks each year. Others are as small as George Washington’s nose on the quarter, she said. Trump split the monument into three pieces while removing protections from about half the area, at the recommendation of Interior Secretary Ryan Zinke. He did the same with another Utah national monument, Bears Ears. Environmentalists have sued to stop it, arguing that presidents don’t have the power to undo monument protections (E&E News PM, Dec. 4, 2017).The move could bring more grazing and motor vehicles. And the newly unprotected areas include some bees known only in the Mojave Desert.“These are ‘edge’ populations,” study author Joseph Wilson, a Utah State University professor, said in a statement. “That is, in the face of climate change, they could be the first to go extinct as the region gets hotter and drier, or the area could provide a refuge for populations of the same species now inhabiting the Mojave Desert,” he said.
Farmers’ Dilemma: Save Bees or Save Themselves - Saving the bee — an indispensable pollinator for many crops — is one of the most pressing challenges facing agriculture today. Yet farmers are being paid government subsidies to plant crops in ways that are harmful to bees.Many US farmers have to decide whether they want to reverse the decline of bee populations through sustainable practices, or risk devastating their own livelihoods — and the future of some major food crops — through the pursuit of short-term profits. The key to avoiding mass extinction of species like the honey bee and preventing ecosystem collapse — suggests a UC Berkeley study — may be enhancing biodiversity in working lands: farmland, rangeland, and forests. “Sustainability is a real issue, and in order to create systems that are truly sustainable, it’s important to take care of the biodiversity that provides critical ecological services underlying sustainability,” Promoting diversity on working lands could be as simple as adding trees, hedgerows, or different flowering plants along the edges of fields, or as complex as using crop rotations and keeping livestock on a single farm. Farms that grow only a single crop remove biodiversity from vast amounts of land; the process degrades habitats for bees and other organisms. One sustainable practice that could make a big difference is the use of cover crops, which help to improve soil quality and enhance wildlife and pollinator habitat.Many pollinators are habitat-specific, and much pollinator habitat has been lost to agriculture, resource extraction, and urban and suburban development. Cover crops, like clover and alfalfa, provide highly nutritious food for bees. While beekeepers in the United States have been attempting to stabilize the number of honeybee colonies, it’s not a permanent solution. There are not enough habitats to allow bees to survive without the help of beekeepers.
Monarch butterflies disappearing from western North America —Monarch butterfly populations from western North America have declined far more dramatically than was previously known and face a greater risk of extinction than eastern monarchs, according to a new study in the journal Biological Conservation.“Western monarchs are faring worse than their eastern counterparts,” said Cheryl Schultz, an associate professor at Washington State University Vancouver and lead author of the study. “In the 1980s, 10 million monarchs spent the winter in coastal California. Today there are barely 300,000.”Schultz adds, “This study doesn’t just show that there are fewer monarchs now than 35 years ago. It also tells us that, if things stay the same, western monarchs probably won’t be around as we know them in another 35 years.”Migratory monarchs in the west could disappear in the next few decades if steps aren’t taken to recover the population, Schultz said.Like eastern monarchs, which overwinter in Mexico, western monarchs have a spectacular migration. They overwinter in forested groves along coastal California, then fan out in the spring to lay their eggs on milkweed and drink nectar from flowers in Arizona, California, Nevada, Oregon, Washington, Idaho and Utah. They return to their coastal overwintering sites in the fall.In the 1990s, residents of coastal California became alarmed that a once common butterfly seemed to be disappearing. The Biological Conservation study indicates that those concerns were justified. The researchers combined data from hundreds of volunteers who have participated in the Xerces Society’s Western Monarch Thanksgiving Count since 1997 with earlier monarch counts conducted by amateur and professional butterfly enthusiasts in the 1980’s and early 1990’s. They then predicted the monarch population’s risk of extinction over the next several decades.
Birds Dying at Alarming Rates in Collier County - Sick birds are flocking to a Collier County Animal Hospital. People are pulling up to the Von Arx Wildlife Hospital Florida after finding sick, weakened birds along the shores in Marco Island. Joanna Metzger, an animal lover who lives in Marco Island says it’s a horrible sight at Residents Beach. She saw a bird fall right out of the sky Friday morning. “It’s heartbreaking; the other day I sat in the car and cried because I brought two that were alive when I left Marco Island and halfway here they died trying to save them,” said Metzger. Over the past three weeks, people have brought in about 10 birds a day. They were shorebirds known as Sandwich terns and Common terns. Director of the Von Arx Wildlife Hospital Joanna Fitzgerald says that at least six or seven of them are still recovering. “Most of them are dying within an hour or so,” said Fitzgerald. “Many of them are passing away very quickly after they arrive.” The birds are carried into the hospital weak and barely able to stand, many of them don’t make it. “Whatever is happening is hitting them hard and taking them out hard,” said Fitzgerald. As soon as the birds arrive, veterinarians, hop into action. “Immediately getting them on oxygen is the main thing because they are in respiratory distress,” said Fitzgerald. And then provide them with fluids and other types of medication, so that they can live to fly another day. “We have to fix this; we have to do something,” said Metzger. “It’s been going on too long, and it’s frustrating.” The cause is unknown. Staff at the Conservancy sent a few birds to a University in Georgia for testing. They are waiting for the results.
Lost lands? The American wilderness at risk in the Trump Era -When Trump took office in 2016, he promised the energy industry a new era of “American energy dominance”. This would only be possible by exploiting America’s 640m acres of public land: mountains, deserts, forests and sites of Native American history that cover more than a quarter of the country. Under Trump, environmental advocates fear a shift to the extreme: land offered indiscriminately for mining and drilling, with disregard for other potential uses.Two years after Trump came to power, a new study produced by the Wilderness Society, a not-for-profit organization advocating for the protection of public lands, and shared exclusively with the Guardian, reveals the full extent of his government’s efforts. Key findings include:
- 13.6m acres onshore have been made available for leasing by the Trump administration, far more than in any two-year period under the Obama administration.
- More than 153m acres of ecologically sensitive habitats – from the California desert to the Arctic national wildlife refuge – have seen conservation protections rolled back in some form.
- More than 280m acres have been made available for offshore leasing in the Gulf of Mexico and along nearly 90% of the US coastline.
For Hoyt, the prospect of mining on formerly protected lands is a scenario almost too painful to contemplate. On a recent August afternoon, as temperatures climbed to 95F, he bumped and shuddered down a winding road at the wheel of his expedition vehicle. His destination: a lookout point, from which the Circle Cliffs, an almost incomprehensibly vast segment removed from the Grand Staircase-Escalante national monument, could be viewed. Motoring through the auburn hills, he became visibly emotional. “This is where the mining trucks would be driving in and out.” The Guardian profiled three affected communities in the American west – in the Utah desert, the southern Rockies, and valleys of western Colorado – to see three different responses to this shift toward energy development.
Lake Erie faces dire future, per new climate change report - Cleveland Plain-Dealer – The landmark National Climate Assessment report released last week predicts a dire future for the Great Lakes, and Lake Erie in particular.Much of the harm already is underway, according to the study.It foresees more severe storms, more lake-effect snow and rain, expansion of invasive species that threaten local wildlife, larger “dead zones” in Lake Erie, and worsening of the algal blooms that can close beaches and threaten drinking water.The study “shows that the impacts of climate change already are, and will continue to be, deep and widespread in our region," said Jenna Jorns, an author of the report and a program manager of the Great Lakes Integrated Sciences and Assessments based at the University of Michigan.The report, issued by 13 federal agencies within the Trump Administration, has been called the most comprehensive research on climate change in history. President Trump, however, said on Tuesday, “I don’t believe it.”White House spokeswoman Sarah Sanders said the report “is not based on facts. We'd like to see something that is more data-driven. It's based on modeling, which is extremely hard to do when you're talking about the climate.”The report said changes already are visible in the Great Lakes. Local experts agreed. Extreme weather events are causing increased erosion from agricultural fields, sending fertilizer runoff rushing into the Maumee River watershed and eventually the Western Basin where the nitrogen and phosphorus feed algal blooms. Conservation practices reduce impact of heavy rains Integrating strips of native prairie vegetation into row crops has been shown to reduce sediment and nutrient loss from fields during heavy rain events, according to studies at Iowa State University.Joe Cornely of the Ohio Farm Bureau said there’s not much the Maumee River Valley farmers can do to prevent it. "Ten or 15 years ago, we didn't have these 4-inch rainfalls in a 2-hour window, but they're becoming more common,” Cornely said in an interview with The Plain Dealer last month. “We're trying to figure out what needs to be done on the farms to mitigate those occurrences."
West Coast fishermen are suing oil companies for climate change damages - Fishermen are still waiting for permission to catch Dungeness crabs off California’s northernmost coast this season — and they want oil companies to pay for the delay. State officials have postponed the start of the commercial Dungeness crab season because of high levels of a neurotoxin called domoic acid. Similar closures have wreaked economic havoc on the industry in recent years. The neurotoxin’s presence in the prized crabs has been linked to warming ocean waters, one of the many effects of human-caused climate change. That’s why the West Coast’s largest organization of commercial fishermen is suing more than a dozen oil companies, arguing they have knowingly peddled a product that threatens ocean life and the people whose economic fortunes depend on it. The oil companies “engaged in a coordinated, multi-front effort to conceal and deny their own knowledge of those threats, discredit the growing body of publicly available scientific evidence, and persistently create doubt,” the Pacific Coast Federation of Fishermen’s Assns. said in its lawsuit, filed last month. “Families and businesses that depend on the health and productivity of the Dungeness crab fishery to earn their livings suffer the consequences,” the federation said. The fishermen’s group joins cities from California to New York that have sued the fossil fuel industry over its role in causing climate change. The lawsuits have been compared to legal actions brought against the tobacco industry in the 1990s, seeking damages to treat lung cancer and other health consequences of smoking.
Crab fishermen and environmentalists square off over whale entanglements - Climate change is bringing migrating whales closer to the shores of Northern California, and subsequently a record number of marine mammals have died or been injured because of fishing gear — especially California’s Dungeness crab pots.The issue has pitted two local interest groups against each other: Those who depend on the $68 million California Dungeness crab fishery for their livelihood, and those who advocate shutting down areas to crabbing to protect humpback whales and other endangered species. Caught in between are everyday shoppers who love having Dungeness crab on their tables, but probably wouldn’t want marine mammals hurt in the process.“I’m frankly very scared of what the upcoming season could mean for whales,” said Kristen Monsell, senior attorney at the Center for Biological Diversity, an Oakland environmental group that sued the state over the issue last year. The case is due to go before a judge in February. From 2000 to 2014, there were an average of 10 whale entanglements per year on the West Coast, according to the National Oceanic and Atmospheric Administration. However, in the midst of the El Niño weather pattern and a marine heat wave (sometimes known as the “warm blob”) that started in 2014, the number went up to 30 in 2014, to 62 in 2015 and then another 71 in 2016. The main species affected were humpback whales. Dungeness crab fishing gear, which has lines that run from buoys on the surface down to crab traps as deep as the sea floor, was the main culprit.
100% of Sea Turtles in Global Study Found With Plastics in Their Bellies - A new study of sea turtles in three oceans and seas drove home the point, green campaigners said Wednesday, that the world's governments and corporations are not doing enough to reduce plastic pollution—and marine life is suffering as a result.One hundred and two sea turtles inhabiting the Atlantic and Pacific oceans and the Mediterranean Sea were the subject of the study by the University of Exeter and Plymouth Marine Laboratory in the United Kingdom—and all 102 of the creatures were found with plastics, microplastics and other synthetics in their digestive systems."From our work over the years we have found microplastic in nearly all the species of marine animals we have looked at; from tiny zooplankton at the base of the marine food web to fish larvae, dolphins and now turtles," said Penelope Lindeque, who co-authored the report. "This study provides more evidence that we all need to help reduce the amount of plastic waste released to our seas and maintain clean, healthy and productive oceans for future generations."A total of about 800 particles less than half a centimeter long were found in the turtles' guts, with scientists finding an average of 150 pieces of plastic in each animal. The Mediterranean was found to be the most polluted body of water the scientists studied, with some turtles' bodies containing 500 plastics."How many more studies like this do we need for corporations to take strong action to curb the production of throwaway plastic which is predicted to quadruple by 2050?" said Graham Forbes, global plastic project leader for Greenpeace USA. "This global environmental crisis must be tackled at the source for the sake of marine life, the world's oceans, our health and our communities."
Scallops Absorb Billions of Microplastics in Just 6 Hours - One of the biggest concerns surrounding the proliferation of microplastics in the world's oceans is how they might move up the food web from smaller to larger marine life, eventually ending up in our stomachs.Now, a first-of-its-kind study has shown just how quickly the tiny particles can accumulate in the bodies of shellfish under current levels of marine plastic pollution. The answer? Billions in just six hours.Researchers led by a team at the University of Plymouth exposed the commonly sold great scallop (Pecten maximus) in the laboratory to concentrations of plastic nanoparticles equivalent to those found in the marine environment. After six hours, billions of 250 nanometer (nm) particles had spread through the scallops' intestines, while even more tiny 20 nm particles had lodge themselves in the mollusks' other organs including their kidneys, gills and muscles."The results of the study show for the first time that nanoparticles can be rapidly taken up by a marine organism, and that in just a few hours they become distributed across most of the major organs," research leader Dr. Maya Al Sid Cheikh of the University of Plymouth said in a press release. Researchers exposed the scallops to nanopolystyrene that had been radio labeled with carbon. This allowed the researchers to locate the plastic particles in the scallops after exposure. Further, it allowed them to determine how long the plastic pieces lasted in the scallops' system. The 20 nm particles took 14 days to disappear, whereas the 250 nm particles lasted 48 days.The study, which was published Nov. 20 in Environmental Science & Technology.
This town is like thousands that are vulnerable to contaminated water, with no fix in sight - It's what Virginia Tech engineering Professor Marc Edwards calls America's "dirty little secret." He explains it this way: That often times towns like Enterprise are stuck with aging infrastructure that they can't fix, leaving few options for them to deal with complaints about dirty or contaminated water. The US Environmental Protection Agency says the nation needs $743 billion to fix America's water system. Edwards says he makes long drives to small towns that are hurt by dwindling populations, and slowly being forgotten. Edwards has spent nearly two decades testing water and challenging federal, state, and local governments on water quality. His work helped to reveal high levels of lead in the water in Flint, Michigan.Edwards says Virginia Tech, where he is a professor, supports his work, as long as he can afford to pay for his travel, which he has done for years. The EPA told CNN that more than 300 million Americans depend on 50,000 community water systems across the country for safe, reliable water every day. Over 92% of the population supplied by community water systems receives drinking water that meets all health-based standards all of the time. But, a 2018 EPA report found that nationwide, nearly one-third of the nation's public water systems had at least one violation of the Safe Drinking Water Act. Those systems serve more than 87 million Americans.In 2016, the EPA reported nearly 8% had violations of health-based standards. About 3% of public water systems were serious violators, typically with multiple violations over a sustained period.But, multiple government reports over the years show that the water quality issue may possibly be much worse, especially in rural America, because local communities may not always be accurately reporting their data. In a May EPA report, the agency's inspector general said, "This situation can lead to conditions where the EPA and public may not know if water arriving at taps meets national drinking water standards."
Total of 79 Chinese cities trigger air pollution alerts: Xinhua (Reuters) - A total of 79 Chinese cities have triggered air pollution alerts as severe winter smog covers wide swaths of the country, the official Xinhua news agency reported on Saturday. As of Nov. 30, five cities had issued red pollution warnings, the most severe in China’s pollution warning system, 73 had issued orange warnings, the second-most severe, and one city had issued a yellow warning, triggering the implementation of emergency management and control measures, Xinhua reported. The affected cities lie in and around the Beijing-Tianjin-Hebei region that includes China’s capital, as well as in the Fenwei plains area of Shanxi, Shaanxi and Henan provinces, and in the northern Yangtze River delta region, home to Jiangsu province, China’s second-largest steelmaking hub. China’s capital issued its first air pollution alert for the winter season on Nov. 23, and Jiangu province issued orange smog alerts in late November, forcing factories and utilities to slash output. Northern China often sees heavy smog over the winter, which runs from mid-November to mid-March, as homes and power utilities burn more coal for power and heating. On Saturday evening, the concentration of small particulate matter, known as PM2.5, at Beijing’s Temple of Heaven was 193 micrograms per cubic meter, according to data from China’s National Environmental Monitoring Centre, five-and-a-half times the state standard of 35 micrograms per cubic meter. China has taken steps to broaden its campaign against air pollution, including extending a monthly air quality ranking to 169 cities from 74 to pressure local authorities to clean up dirty skies.
Do you know what you’re breathing? - The hottest new apocalypse preparation choice for 2019 is not a bunker or a gun or a lifeboat. And it’s not moving to New Zealand. It’s a small gadget that measures the air pollution around you.As climate change reports become increasingly dire, and as wildfires tear across the American West, and as trust in the federal government’s air quality oversight fades, thousands of people around the country are taking air measurements into their own hands. Installed on a porch, a console table or hooked to a backpack, these small, sleek and increasingly inexpensive devices measure hyper-local air quality. They are marketed to the discerning and alarmed consumer. Some have begun to self-identify as “breathers.” Fans of the new pollution monitors tend to also be skeptical of government efforts to keep air clean and say they are wary of the air quality data that the government provides. “At some points,” Ms. Kozyr said, “you can’t trust the government.” The Trump administration has urged the Environmental Protection Agency to ease air quality rules. New E.P.A. leadership seems to be on board with this plan. The administration is working to overhaul restrictions on coal, which by its own estimates could lead to as many as 1,400 more premature deaths annually by 2030 from an increase in the airborne particulate matter. President Trump claimed in October that the United States has the cleanest air in the world, which is inaccurate. The administration in August unveiled plans to freeze antipollution and fuel-efficiency standards for cars. Outlining the effort, the E.P.A. acting administrator, Andrew Wheeler, and the secretary of transportation, Elaine L. Chao, published an opinion piece in The Wall Street Journal called “Make Cars Great Again.” Mr. Wheeler announced in October that next year the E.P.A. would be disbanding a key scientific review panel on clean air and pollution. Tony Cox, who sits on the E.P.A. committee on clean air, has said that the benefits of clean air are exaggerated and, in a paper sponsored by the American Petroleum Institute, that it cannot be shown that particulate matter in the air leads to deaths; this is contradicted by information provided by the E.P.A. Robert Phalen, a researcher who joined the E.P.A.’s board of science advisers to work on air quality issues, has said that air has gotten too clean.“People don’t necessarily want to know where air quality is bad in some cases.” “Of about 3,000 counties” in the United States, Ms. Nolen said, “only eight or nine hundred have air quality monitors at all.”Having so few monitors means that something like the downwind effects of a wildfire can be hard to detect.
SpaceX Capsules May Be Contaminating International Space Station - Capsules from Musk's SpaceX, containing spare food and parts that are being delivered to the International Space Station on the company's Falcon 9 rockets, may be doing far more harm than good, according to a new report from Wired. These deliveries - called Dragon capsules - may be contaminating the space station by outgassing the second that they arrive.At the ISS, an onboard piece of scientific equipment called the SAGE III, used to measure ozone molecules and aerosols in the Earth's atmosphere, has seen its contamination sensors, generally used to measure how its environment could influence its readings, show spikes after three Dragon capsules docked at the ISS.Something in the docking Dragon capsules has been outgassing, according to the article. Outgassing is when molecules from construction wind up being released into the atmosphere. It is what gives new cars their "new car smell" (you're smelling PVC emanating from parts and components, i.e. the dashboard, etc.) and was the basis behind Whitney Tilson‘s formaldehyde-based Lumber Liquidators short some years back. Preliminary reports indicated that a Dragon capsule may have deposited up to 21 times the allowed amount of contamination on one sensor on the ISS. The sensors perked up yet again when the next Dragon capsule docked, with reports estimating that it may have left behind up to 32 times the limit of extra matter on another sensor.
Weak El Nino conditions developing in the Pacific this winter: IMD -- There is a strong possibility of weak El Nino conditions developing during the current winter season as equatorial sea surface temperatures across most the Pacific Ocean show an increasing trend, according to a forecast by the India Meteorological Department (IMD). “There is a definite mild El Nino -- above 0.5 degree warming -- in the western Pacific Ocean. But, the atmosphere has so far not started responding to the sea temperature changes yet. However, we have to see how these conditions will develop post-February,” IMD director general K J Ramesh told BusinessLine on Monday. “We all will be closely watching how the situation develops. In fact the global community is concerned about the development as different countries get impacted differently by the abnormal warming in the Pacific Ocean,” he said. In India, a strong El Nino is linked to abnormal dry spells in the following monsoon season. The IMD also forecast that the ongoing winter season would be slightly warmer than usual in most parts of the country barring a few hilly regions. “The forecast suggests that above normal minimum temperatures (above 0.5 degree Celsius) are most likely over most of subdivisions of the country except Jammu & Kashmir, Himachal Pradesh and Uttarakhand in the north, Sub-Himalayan West Bengal, Sikkim and Arunachal Pradesh in the north east, Odisha in the east and Chhattisgarh in Central India where normal (between 0.5 and -0.5 degree Celsius) seasonal minimum temperatures are most likely to prevail,” IMD said in a statement. “It is not expected to have any impact on rabi crop as the anomaly is not crossing one degree Celsius,” said the IMD DG. Higher warmer weather during winter months is a concern as wheat, the mainstay of the rabi season, is highly vulnerable to a rise in temperature.
Two power plants in Norfolk, Nebraska caused several inches of snow to fall in parts of the state on Monday. --Nebraskans are being dusted in snow generated by the steam from power plants right now.The National Weather Service reported on Monday that two plants in Norfolk are responsible for snow in Seward and Lincoln, located downwind of the power facilities. The phenomenon of industrial snow is “not super common in this area,” Brian Barjenbruch, a meteorologist with the National Weather Service in Valley, Nebraska told Motherboard.“What’s causing the snow to develop today is the addition of moisture,” Barjenbruch explained. “The atmosphere is currently at the perfect temperature for snow product,” and as the steam escapes—instead of evaporating—it adds moisture and warmth to the ice crystal-laden clouds, giving them a boost at producing snow. It’s similar to lake-effect snow, which occurs when cold air moves across relatively warmer water, accumulating moisture which then falls as snow, usually over land. Earlier this year, a power plant near the Kentucky-Indiana border created light flurries. And the Beaver Valley Nuclear Power Plant in Pennsylvania caused a “freak storm” in 2013. The National Weather Service said it didn’t know which plants were responsible for the flakes. “Meteorologically speaking, it looks like the winds are going to decrease and temperatures are going to cool off this evening, putting an end it,” Barjenbruch predicted. Up to two inches have fallen in some areas.
Dozens injured as 22 tornadoes reported in central Illinois - ABC News - A rash of tornadoes broke out Saturday afternoon and evening across central Illinois, injuring at least 30 people and turning homes into piles of splintered wood. There were 22 tornadoes reported to the National Weather Service on Saturday, all in central Illinois. The offices in Lincoln, Illinois, and St. Louis, Missouri, will conduct storm surveys on Sunday to confirm the intensity and track of the tornadoes. At least 30 people were injured in Christian County, Illinois, just southeast of Springfield, where many of the storms hit. Amity Food Mart in Taylorville, Ill., was severely damaged in a suspected tornado on Saturday, Dec. 1, 2018. Mike Crews, emergency manager for Christian County, said there were no more than 30 people transported to hospitals. There are still task forces out with ambulances to make sure there are no more people injured or trapped. No fatalities have been reported. Officials said 21 people were taken to Taylorville Memorial Hospital with one injury considered critical. Crews also said at a press conference Saturday night that emergency officials responded to about 12 to 15 homes that had people trapped inside. All of them were safely evacuated. Stephanie PorterA home was ripped apart by a suspect tornado in Taylorsville, Ill., on Saturday, Dec. 1, 2018. The homeowners were able to escape. A box truck with chemicals was also overturned, officials said, and a hazmat crew was working to clean it up. Further assessment of the damage will be done starting at 7 a.m. Sunday. One person was killed during a severe storm in southwestern Missouri on Friday. Scott Lakin in the Lawrence County Coroner’s Office confirmed to ABC News that a man was found dead with debris on top of him in Aurora, Missouri.
In the millions of dollars’- Earthquake damage assessments continue amid aftershocks - A collapsed section of road on the Glenn Highway north of Anchorage is set to snarl traffic for days as Southcentral Alaska pivoted from crisis response to cleanup in the area’s most significant earthquake in a half-century.The 7.0 earthquake jolted Anchorage and the rest of Southcentral Alaska on Friday morning, cracking and collapsing roads and highways, damaging buildings, knocking out power and sending people scrambling outside and under furniture. The violent shaking left many homes a mess, and aftershocks continued through the night and through the day Saturday. Schools in Anchorage will be closed until Dec. 10, and many schools in the Mat-Su Borough will be closed until at least Wednesday.Seismologists called the earthquake the most significant in Anchorage since the 1964 Good Friday earthquake, in terms of how strong the ground itself shook and severity of impact. The size of the quake and a risk of underwater landslides in Cook Inlet triggered an unusual localized tsunami warning. The day after, people all over Southcentral Alaska were rattled and anxious. But relief was tangible as Anchorage officials reported that there were no deaths, and generally minor injuries — a broken arm, cuts from glass. And despite widespread reports of varying degrees of structural damage, no buildings entirely collapsed, which officials credited to Anchorage’s strict building codes. Hospitals and airports were fully functional Saturday and businesses were beginning to reopen. The shifting earth did wreak havoc on transportation networks north of Anchorage. Major damage was reported on state roads in at least eight areas, and cracks and shifting earth indefinitely halted train service between Anchorage and Fairbanks. Aftershocks and ground settling caused even more damage Saturday, said Shannon McCarthy, a spokeswoman with the Alaska Department of Transportation and Public Facilities.
Nearly 1,400 Aftershocks Rattle Alaska After 7.0 Earthquake - Roughly 1,400 aftershocks have followed after Friday's monster 7.0 magnitude earthquake struck near Anchorage, Alaska, Anchorage Daily News reported.The aftershocks all surrounded the original temblor that was centered about 7 miles north of Alaska's largest city.Of the 1,400 aftershocks recorded since Sunday, 593 measured greater than a magnitude 2.0, 17 were at least a 4.0, and five were at least a 5.0, the report said.In all, up to 2,200 aftershocks greater than a magnitude 3 are possible, according to a post from Ian Dickson of the Alaska Earthquake Center on Sunday, citing the U.S. Geological Survey aftershock forecast.Friday's quake was described by state seismologist Mike West as the "most significant" to strike the city since the magnitude 9.2 Great Alaska Earthquake of 1964—the most powerful ever recorded in the U.S. It was also the largest since the 7.1 that struck near Anchorage in 2016."I'm not aware of large-scale building collapses, but I think it's safe to say there are thousands of homes and businesses and buildings that were damaged in some fashion, be it a deck that slid downhill, a cracked foundation, a gas line disconnected from the house," he said during a Facebook Live interview, as quoted byUSA TODAY.Miraculously, no deaths were reported. However, "hospitals reported receiving two patients with life-threatening injuries and dozens of less serious cases, including broken bones, injuries from falls, and lacerations from broken glass," Dickson wrote. Although the seismic activity has been nerve-racking to the area's residents, earthquakes are not new to Southcentral Alaska. In the last century, 14 other earthquakes greater than a magnitude 6.0 have occurred within 150 kilometers (approximately 93 miles) of Friday's temblor, according to USGS. The state itself averages about 40,000 earthquakes per year. USGS reported that the Nov. 30 quake was "the result of normal faulting at a depth of about 40 km."
Greenland Melting Is ‘Off the Charts’ - The first continuous, multi-century study of surface melt from the Greenland ice sheet was published inNature Wednesday, and the results are clear: the ice sheet is now melting at rates unseen within at least the last 350 years."Melting of the Greenland Ice Sheet has gone into overdrive. As a result, Greenland melt is adding to sea level more than any time during the last three and a half centuries, if not thousands of years," lead study author and Rowan University School of Earth & Environment glaciologist Luke Trusel said in a press release from the Woods Hole Oceanographic Institution (WHOI), one of the institutions involved in the research. Greenland is Melting Faster than Ever – YouTube The researchers found that melting first increased on the ice sheet in the 1800s, when the Arctic began to warm as the process of industrialization started pumping greenhouse gasses into the atmosphere. However, it is only in recent decades that the melting has increased beyond the point of natural variability. There is now 50 percent more meltwater runoff entering the oceans from the sheet since the start of the industrial era, and 30 percent more since the 20th century. "From a historical perspective, today's melt rates are off the charts, and this study provides the evidence to prove this," WHOI glaciologist and study author Sarah Das said.
PIOMAS December 2018 - Arctic Sea Ice by Neven - Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center. November has been an excellent month for Arctic sea ice. With 4226 km3, it recorded the highest volume increase for November in the 2007-2018 period, well above the average of 3491 km3. The reasons for this are obvious: rapid growth in ice extent and relatively low temperatures (more on that below). This means that 2018 has dropped from 4th lowest to 6th lowest, and the gap with leader 2016 has grown by a whopping 1322 km3! Here's how the differences with previous years have evolved from last month: Because all the trend lines go up fast around this time of year, I'm posting another Wipneus graph that visualises PIOMAS volume anomaly, showing 2018's massive increase more clearly: On the PIOMAS volume anomaly graph we see a massive surge towards 2 standard deviation territory: As for average thickness (crudely calculated by dividing PIOMAS volume numbers with JAXA extent), it hasn't increased as spectacularly, which means that that the spectacular increases in both volume and extent cancelled each other out. This may seem counter-intuitive, but thickness only changes radically if one of the two parameters does so as well, while the other doesn't change as fast. And so the 2018 trend line goes up, more or less in tandem with the other trend lines: The Polar Science Centre version basically shows the same, as it often does: And now for temperatures and ice extent. As Zack Labe's excellent monthly air temperature ranks (north of 70°) show, this past November was 12th lowest on record:Of course, the Arctic wouldn't be the Arctic, if it didn't let one radical swing get followed by another radical swing. While November also saw the largest increase in sea ice extent in the 2005-2018 period, with 2018 at one point almost taking the second highest position, the trend line on the JAXA graph has effectively flatlined into December and may very well be second lowest tomorrow:
Planet-warming carbon emissions are rising in wealthy nations for the first time in five years - Carbon dioxide emissions from advanced economies will rise in 2018 for the first time in five years, the International Energy Agency reports, marking a setback for the global campaign to fend off the worst effects of climate change.Energy-related carbon emissions from North America, Europe and developed nations in the Asia-Pacific region are set to rise by about a half a percent this year, according to a preliminary assessment from the IEA. Over the past five years, the group saw its emissions fall by 3 percent.The increase is being driven by higher energy use as the global economy grows at a brisk pace. While wealthy nations continue to move away from burning coal, rising oil and natural gas consumption in those economies is increasing carbon emissions, the agency says.The report comes as the nations of the world gather in Katowice, Poland, for a United Nations meeting to assess their progress cutting greenhouse gas emissions since the 2015 Paris Agreement on climate change. The accord aims to prevent global temperatures from rising by more than 2 degrees Celsius above pre-industrial levels."This turnaround should be another warning to governments as they meet in Katowice this week," IEA Executive Director Fatih Birol said in a statement. "Increasing efforts are needed to encourage even more renewables, greater energy efficiency, more nuclear, and more innovation for technologies such as carbon capture, utilisation and storage and hydrogen, for instance." In October, the U.N.'s Intergovernmental Panel on Climate Change reported that the path to staving off catastrophic impacts from climate change is quickly narrowing. Global temperatures could rise by 1.5 degree Celsius as soon as 2030, the climate change panel warned, requiring unprecedented global action to halt the increase.
California wildfires' carbon emissions equal to a year of power pollution — Wildfires in California in 2018 released the rough equivalent of about 68 million tons of heat-trapping carbon dioxide — about the same amount of carbon emissions as are produced in a year to provide electricity to the state, U.S. Interior Secretary Ryan Zinke said Friday. The carbon dioxide figure — based on data analyzed by the U.S. Geological Survey — is more than 15 percent of all emissions produced by California in a year, according to Zinke."We know that wildfires can be deadly and cost billions of dollars, but this analysis from the U.S. Geological Survey also shows just how bad catastrophic fires are for the environment and for the public's health," Zinke said in a statement.This year included California's deadliest and most destructive wildfire — a blaze in November that took out nearly 14,000 homes in a rural Northern California county and killed at least 88 people. Another fire that started the same day in Southern California killed three people and destroyed 1,500 structures, including the homes of celebrities in tony Malibu.Those two fires produced emissions equivalent to roughly 5.5 million tons of carbon dioxide, Zinke said. The 2018 emissions figure for California wildfires is "strikingly high, significant in the context of overall statewide emissions, and likely a record value for single-year direct carbon emissions from wildfires in California history," said Daniel Swain, a climate scientist at the University of California, Los Angeles."It is an alarming number, but we live in a fire-prone state," said Dick Cameron, director of science for land programs at the California chapter of the Nature Conservancy.Zinke used the carbon figure he released Friday to continue to push for the thinning of forests. Cameron said that would help but that climate and home construction were also significant factors in the destructiveness of the fires.
California wildfires accelerated climate change as much as a whole year of power use - California’s 2018 fire season, including the largest fire in state history, released nearly as much climate-warming and air-polluting emissions as a year’s worth of electricity use there.The wildfires released 68 million tons of carbon dioxide in 2018, according to the US Geological Survey, or 15% of the state’s total emissions. For comparison, all electricity use in California in 2016 produced roughly 76 million tons in emissions.Those figures were the highlights of a Nov. 30 statement from the Interior Department that blamed the wildfires largely on forest-management practices. The statement echoed a tweet from US president Donald Trump that there is “no reason” for the fires except “poor” forest management.“There’s too much dead and dying timber in the forest, which fuels these catastrophic fires,” Interior secretary Ryan Zinke wrote in the statement. “Proper management of our forests, to include small prescribed burns, mechanical thinning, and other techniques, will improve forest health and reduce the risk of wildfires, while also helping curb the carbon emissions. The intensity and range of these fires indicate we can no longer ignore proper forest management.” Fire officials, scientists, and California government officials have all rebuked this sentiment. Fire officials note that it also mischaracterizes the problem: Many of the burns were not in forests at all.
Decades of Denial and Stalling Have Created a Climate Crunch -- In a 1965 speech to members, American Petroleum Institute president Frank Ikard outlined the findings of a report by then-president Lyndon Johnson’s Science Advisory Committee, based in part on research the institute conducted in the 1950s. “The substance of the report is that there is still time to save the world’s peoples from the catastrophic consequence of pollution, but time is running out,” Ikard said, adding, “One of the most important predictions of the report is that carbon dioxide is being added to the earth’s atmosphere by the burning of coal, oil, and natural gas at such a rate that by the year 2000 the heat balance will be so modified as possibly to cause marked changes in climate beyond local or even national efforts.” Many scientists were reaching similar conclusions, based on a body of evidence that had been growing at least since French mathematician Joseph Fourier described the greenhouse effect in 1824. In the 1950s, Russian climatologist Mikhail Budyko examined how feedback loops amplify human influences on the climate. He published two books, in 1961 and 1962, warning that growing energy use will warm the planet and cause Arctic ice to disappear, creating feedback cycles that would accelerate warming. The predictions have proven to be accurate, and evidence for human-caused global warming has since become indisputable. What happened? Over the ensuing decades, the fossil fuel industry didn’t try to resolve what it knew would become a crisis. Instead, it worked to downplay and often deny the reality of climate change and to sow doubt and confusion. Knowingly putting humanity — and countless other species — at risk for the sake of profit is an intergenerational crime against humanity, but it’s unlikely any perpetrators will face justice.
Fact-checking the second volume of the U.S. National Climate Assessment - This recently-issued study (the “Assessment”) was seized on by the media as proof of the massive damage the US will suffer if nothing is done about climate change. The Assessment’s conclusions are based largely on speculative model projections that aren’t amenable to checking, but it also claims that the US is already experiencing some of the impacts of man-made climate change, and these claims can be checked. This post accordingly evaluates them claim-by-claim and finds that they are rarely backed up by any hard data, that in some cases they are contradicted by disclaimers buried in the text, and that in no case is there any hard evidence that conclusively relates the impacts to man-made climate change. The credibility of the Assessment’s predictions can be judged accordingly. The Assessment is 1,600 pages long and I doubt that anyone has read it from cover to cover – I certainly haven’t. I have obtained my information from the Summary Findings, Overview, Report Chapters and Downloads sections in the boxes that clicking on this link leads to. These sections themselves contain several hundred pages of text, much of it repetitive, but there is always the possibility that I’ve missed some critical graphic or piece of text. On the other hand, if I’ve missed it the media, who will have read the introductory sections only, will have too. And how did the media report the Assessment’s results? Here are some excerpts: […] And what are the climate change impacts that the Assessment claims are “happening here and now”, which are the only ones we can verify, or not verify as the case may be, against observations? These excerpts identify them either explicitly or implicitly: […] After eliminating repetition and sorting the individual impacts into something resembling order we are left with droughts; floods; heavy precipitation; heat waves; wildfires; Atlantic hurricanes; tornadoes; winter storms; sea level rise; glaciers and snowpack; injuries, illnesses and death. We will review these in order of appearance: The Assessment begins by claiming that climate-change-induced droughts are intensifying in the US. Then later in the text it shoots itself in the foot: While there are a number of ways to measure drought, there is currently no detectable change in long-term U.S. drought statistics using the Palmer Drought Severity Index… And adds a graphic to prove it, reproduced below as Figure 1:
Global carbon emissions set to rise further this year: study (Reuters) - Global carbon dioxide emissions are set to rise nearly 3 percent this year due to continued fossil fuel use, scientists said on Wednesday, dashing hopes that an increase in 2017 was temporary after two years of slowdown. World emissions grew by 1.6 percent last year and will increase even more this year due to the sustained use of coal, oil and natural gas, an annual report by the Global Carbon Project showed, a group of 76 scientists in 15 countries. Carbon dioxide (CO2) emissions were roughly flat from 2014-16, which led to hopes that emissions had peaked in 2013. The data, presented during talks among around 190 nations in Poland on implementing the 2015 Paris Agreement climate accord, are a setback for a global goal of curbing emissions to avert more floods, heat waves, and rising sea levels. The world is on track for a 3-5 degrees Celsius rise in global average temperature this century and if all known fossil fuel resources are used the rise will be even bigger, the U.N. World Meteorological Organization warned last week. “The projected growth in carbon dioxide emissions from fossil fuels and industry is 2.7 percent in 2018, but uncertainties persist and growth rates between 1.8-3.7 percent remain possible,” the Global Carbon Project report said. CO2 emissions from fossil fuels, cement and industry, which make up the bulk of manmade greenhouse gases, are on track to rise to a record high of around 37.1 billion tonnes this year. CO2 emissions from all human activities, including fossil fuels, industry and land-use change, will reach around 41.5 billion tonnes, the report said.
We are in trouble.’ Global carbon emissions reached a record high in 2018. - Global emissions of carbon dioxide are reaching the highest levels on record, scientists projected Wednesday, in the latest evidence of the chasm between international goals for combating climate change and what countries are doing. Between 2014 and 2016, emissions remained largely flat, leading to hopes that the world was beginning to turn a corner. Those hopes appear to have been dashed. In 2017, global emissions grew 1.6 percent. The rise in 2018 is projected to be 2.7 percent. The expected increase, which would bring fossil fuel and industrial emissions to a record high of 37.1 billion tons of carbon dioxide per year, is being driven by a nearly 5 percent growth of emissions in China and more than 6 percent in India, researchers estimated, along with growth in many other nations. Emissions by the United States grew 2.5 percent, while those of the European Union declined by just under 1 percent. As nations continue climate talks in Poland, the message of Wednesday’s report was unambiguous: When it comes to promises to begin cutting the greenhouse gas emissions that fuel climate change, the world is well off target. “We are in trouble. We are in deep trouble with climate change,” United Nations Secretary General António Guterres said this week at the opening of the 24th annual U.N. climate conference, where countries will wrestle with the ambitious goals they need to meet to sharply reduce carbon emissions in the coming years. “It is hard to overstate the urgency of our situation,” he said. “Even as we witness devastating climate impacts causing havoc across the world, we are still not doing enough, nor moving fast enough, to prevent irreversible and catastrophic climate disruption.”
Naomi Klein on the Urgency of a ‘Green New Deal’ for Everyone - Progressive journalist and activist Naomi Klein urged sweeping change that tackles the climate crisis, capitalism, racism and economic inequality in tandem on Friday in Burlington, Vt. If that seems challenging, add the fact that the clock is ticking and there might not be another chance. “We need to have started yesterday,” Klein said at the three-day Sanders Institute Gathering on a panel moderated by environmental activist Bill McKibben. “What all of us who follow the science know is that we just can’t lose these four years,” she said, referring to the presidency of climate change denier Donald Trump. The conference, organized by the think tank founded by Vermont Sen. Bernie Sanders’ wife, Jane, is aimed at forming bold progressive agendas for the future. Progressives are looking to incoming Democratic New York Rep. Alexandria Ocasio-Cortez for leadership as she galvanizes a grassroots effort by the youth-led climate change group Sunrise Movement to reduce fossil fuel dependence. Eighteen members of Congress support the idea of creating a House select committee to look at making a realistic plan by January 2020.“This is not just about a Green New Deal, this is about a New Deal for the United States of America,” Ocasio-Cortez said at a press conference in Washington, D.C., on Friday. “Because in every moment when our country has reached the depths of darkness, in every moment when we were at the brink, at the cusp of an abyss and we did not know if we would be capable of saving ourselves, we have.”The United Nations’ Intergovernmental Panel on Climate Change’s (IPCC) recent report outlined what Klein called “a terrifying 12 years” to cut fossil fuel use nearly in half by 2030. The climate crisis is embedded in nearly every aspect of the issues you seeon the front page of the newspaper, but it is rarely framed that way. Mass migration is often fueled by climate instability and food insecurity, while experts predict rising sea levels will leave even more people unrooted in the future. Politicians who take campaign donations from oil and gas companiesare more likely to push policies that support them. The sweeping military-industrial complex has a dependence on fossil fuels. And poor people, as we saw most recently in the devastating California fires, are less likely to be able to protect themselves from disaster or recover afterward.
'We Have Not Come Here to Beg World Leaders to Care,' 15-Year-Old Greta Thunberg Tells COP24. 'We Have Come to Let Them Know Change Is Coming' - Striking her mark at the COP24 climate talks taking place this week and next in Poland, fifteen-year-old Greta Thunberg of Sweden issued a stern rebuke on behalf of the world's youth climate movement to the adult diplomats, executives, and elected leaders gathered by telling them she was not there asking for help or demanding they comply with demands but to let them know that new political realities and a renewable energy transformation are coming whether they like it or not. "Since our leaders are behaving like children, we will have to take the responsibility they should have taken long ago," said Thunberg, who has garnered international notoriety for weekly climate strikes outside her school in Sweden, during a speech on Monday. Thunberg said that she was not asking anything of the gathered leaders—even as she sat next to UN Secretary General António Guterres—but only asking the people of the world "to realize that our political leaders have failed us, because we are facing an existential threat and there's no time to continue down this road of madness." Thunberg explained that while the world consumes an estimated 100 million barrels of oil each day, "there are no politics to change that. There are no politics to keep that oil in the ground. So we can no longer save the world by playing by the rules, because the rules have to be changed." "So we have not come here to beg the world leaders to care for our future," she declared. "They have ignored us in the past and they will ignore us again. We have come here to let them know that change is coming whether they like it or not. The people will rise to the challenge."
David Attenborough- collapse of civilisation is on the horizon - The collapse of civilisation and the natural world is on the horizon, Sir David Attenborough has told the UN climate change summit in Poland.The naturalist was chosen to represent the world’s people in addressing delegates of almost 200 nations who are in Katowice to negotiate how to turn pledges made in the 2015 Paris climate deal into reality.As part of the UN’s people’s seat initiative, messages were gathered from all over the world to inform Attenborough’s address on Monday. “Right now we are facing a manmade disaster of global scale, our greatest threat in thousands of years: climate change,” he said. “If we don’t take action, the collapse of our civilisations and the extinction of much of the natural world is on the horizon.” “Do you not see what is going on around you?” asks one young man in a video message played as part of a montage to the delegates. “We are already seeing increased impacts of climate change in China,” says a young woman. Another woman, standing outside a building burned down by a wildfire, says: “This used to be my home.”Attenborough said: “The world’s people have spoken. Time is running out. They want you, the decision-makers, to act now. Leaders of the world, you must lead. The continuation of civilisations and the natural world upon which we depend is in your hands.”Attenborough urged everyone to use the UN’s new ActNow chatbot, designed to give people the power and knowledge to take personal action against climate change.Recent studies show the 20 warmest years on record have been in the past 22 years, and the top four in the past four years. Climate action must be increased fivefold to limit warming to the 1.5C scientists advise, according to the UN. The COP24 summit was also addressed by António Guterres, the UN secretary general. “Climate change is running faster than we are and we must catch up sooner rather than later before it is too late,” he said. “For many, people, regions and even countries this is already a matter of life or death.”
Why “Green Growth” Is an Illusion -- If the Paris climate agreement of December 2015—the so-called COP21 —provided cause for optimism that, after years of fruitless diplomatic squabbling, coordinated global action to avoid dangerous climate change and ensure manageable warming of less than 2° Celsius, would finally happen, recent publications by climate scientists are loudly sounding the alarm bells. Specifically, Earth systems scientists (Steffen et al. 2018) and the Intergovernmental Panel on Climate Change (IPCC 2018) warn that even if global emissions are drastically reduced in line with the 66% below 2°C goal of COP21, a series of self-reinforcing bio-geophysical feedbacks and tipping cascades—from melting sea ice to deforestation—could still lock the planet into a cycle of continued warming and a pathway to final destination: “Hothouse Earth.” Allowing warming to reach 2°C would create risks that any reasonable person—if not, perhaps, Donald Trump—would regard as deeply dangerous. To avoid those risks and keep warming below 1.5°C, humanity will have to reduce emissions of greenhouse gases (GHGs) to net zero by 2050. The early optimism about the Paris agreement is giving way to widespread pessimism that COP21 will not be working soon enough. Climate scientists and Earth systems scientists attempt to counter the growing pessimism by showing that limiting the global mean temperature increase to 1.5°C is neither a geophysical impossibility, nor a technical fantasy. The engineering solutions to bring about deep de-carbonization—including quick fixes and negative-emissions technologies—are available and are beginning to work. The real problem is that available solutions go against the economic logic and the corresponding value system that have dominated the world economy for the last half decade—a logic aimed at scaling back (environmental) regulations, pampering the oligopolies of big fossil-fuel corporations, powering companies and the automotive industry, giving free rein to financial markets and prioritizing short-run shareholder returns. Hence, as Steffen et al. (2018) write, the biggest barrier to averting going down the path to “Hothouse Earth” is the present dominant socioeconomic system, based as it is on high-carbon economic growth and exploitative resource use. We will only be able to phase out greenhouse gas emissions before mid-century if we shift our societies and economies to a “wartime footing,” suggests Will Steffen, one of the authors of the “Hothouse Earth” paper in an interview with Kate Aronoff (Aronoff 2018).
Mind The Chemtrails: New Study Calls For Global "Stratospheric Aerosol Injection" By 2030s - A fleet of aircraft injecting sulfates into the lower stratosphere could help protect the world from climate change. Well, that is according to a peer-reviewed paper published Nov. 23 in the journal Environmental Research Letters by researchers from Harvard and Yale universities. It sounds like rhetoric from the tinfoil-hat chemtrail conspiracy community. Large commercial airliners spraying sulfate microparticles into the stratosphere, anywhere from 8 to 30 miles high. The purpose is to help shield the Earth from sunlight to maintain lower temperatures. The report is one of the most in-depth and modern study yet of "stratospheric aerosol injection" (also known as "solar dimming" or "solar engineering" and or in the conspiracy community - "chemtrails"). Researchers examined how effective and expensive a solar geoengineering project would be beginning in the early 2030s. The goal of the program would be to halve the temperature increase caused by heat-trapping greenhouse gases, sort of like the global cooling effects of volcanic eruptions. Gernot Wagner, a research associate at Harvard’s School of Engineering and Applied Sciences, is the lead author of the paper. He said their study shows this type of geoengineering "would be technically possible strictly from an engineering perspective. It would also be remarkably inexpensive, at an average of around $2 to $2.5 billion per year over the first 15 years." The study's co-author of the paper and lecturer at Yale, Wake Smith, explained that an entirely new aircraft needs to be designed for the chemtrail program. "No existing aircraft has the combination of altitude and payload capabilities required." Researchers investigated what it would cost to develop an aircraft they call he SAI Lofter (SAIL). The report indicates the fuselage would have a stubby design and the wing area, as well as the thrust, would need to be twice as large. The estimated cost of the plane, a whopping $2 billion and $350 million to modify existing engines.
Trump mocks Macron, blames French riots on Paris climate accord - US President Donald Trump has criticised his French counterpart Emmanuel Macron in the wake of the recent large-scale anti-government protests over high taxes. Trump posted several messages about the demonstrations on his Twitter account, claiming the protests were a direct result of the Paris climate agreement of which France is a signatory, but the United States is not. "I am glad that my friend @EmmanuelMacron and the protestors in Paris have agreed with the conclusion I reached two years ago. The Paris Agreement is fatally flawed because it raises the price of energy for responsible countries while whitewashing some of the worst polluters in the world," Trump wrote in the tweets. ....in the world. I want clean air and clean water and have been making great strides in improving America’s environment. But American taxpayers – and American workers – shouldn’t pay to clean up others countries’ pollution. — Donald J. Trump (@realDonaldTrump) December 4, 2018 The US president also retweeted conservative pundit Charlie Kirk, who falsely claimed France is a socialist country, the riots in the country did not receive any media attention and that protesters shouted: "we want Trump". Trump's tweets come as the French government mulls changes to a wealth tax that partially led to massive protests across the country over the last weeks. Government spokesperson Benjamin Griveaux told local media on Wednesday that the changes to the wealth tax could be turned back if not successful. "If a measure that we have taken, which is costing the public money, turns out not to be working, if it's not going well, we're not stupid - we would change it," Griveaux said. The protests, which started November 17, were mostly about record prices at the pump, with the cost of diesel increasing by about 20 percent in the past year to an average of 1.49 euros ($1.68) a litre.Despite the protests, President Macron then announced further taxes on fuel, set to take effect on January 1, 2019, in a move he said was necessary to combat climate change and protect the environment. The decision sparked the so-called yellow vest protest movement, which takes its name from the high-visibility jackets participants adopted as a symbol of their complaint.
France’s fuel tax retreat dismays COP24 climate talks - France’s sudden U-turn over an unpopular fuel tax in the face of violent anti-government protests sent shivers through the COP24 climate summit. That’s because the sight of one of Europe’s most climate ambitious countries beating a hasty retreat over a proposal that would have hiked gasoline tax by 4 cents, or just under 3 percent, highlighted the difficulty of imposing any economic pain in the name of tackling climate change. The tax proposal sparked weeks of riots that devastated Paris, blocked highways across the country and left four people dead. France’s troubles were seized upon by climate skeptics to underline the unpopularity of costly decarbonization efforts.
France’s Gas Tax Disaster Shows We Can’t Save Earth by Screwing Over Poor People -- France has turned into a bubbling cauldron of unrest over the past month as the so-called yellow vest movement has put up roadblocks and taken to the streets to protest a gas tax. Last week’s protests turned violent and facing a crisis, the government of Emmanuel Macron announced on Tuesday it would put a six-month moratorium on the tax.The tax was meant to combat climate change and reduce carbon pollution. While it likely would’ve done that, it would’ve done so on the backs of France’s rural low and middle class. The mass revolt against it doesn’t mean those groups oppose climate action. It means that Macron needs to include them in discussions about the best way to address climate change as part of a just transition, something the world at-large is grappling with as it aims to get a handle on carbon emissions.More than 280,000 protesters donned yellow safety vests that motorists are required to keep in their cars and took to the streets across France last weekend. The protests have arisen organically through Facebook and other social media platforms, and span the ideological divide. Their focus has largely been on the unfairness of Macron’s proposed gas tax, which would’ve raised prices by €0.029 per liter ($0.12 a gallon) on unleaded gas and €0.065 per liter ($0.24 a gallon) on diesel. Rising oil prices have pushed fuel prices higher still now was among the worst times to propose such a tax.The French government has spent years promoting diesel, and the tax would’ve left many already struggling to make ends meet with higher fuel bills on vehicles they’ve been encouraged to buy. The money it raised would also have been used to combat the national deficit, which has been made worse in part by the Macron government’s policies, like lifting portions of a wealth tax. In short, the gas tax was a technocratic fix without any real constituency and the benefits were poorly explained, leaving it open to criticism and protest. The yellow vests enjoy a broad base of support with a recent poll showing that 72 percent of the French public is sympathetic to the cause. The fight against the tax is not a fight against climate policy, however. “We are not against the ecology, on the contrary,” Benoit Julou, a spokesperson for the yellow vest movement, said on a France 3 talk show last week. Rather it shows that any policies that only consider climate benefits and are made top-down are destined to fail.
US plans to 'showcase ways to use fossil fuels' at a UN climate conference - The world's nations are gathering this week for the second time since President Trump took office to discuss how they will try to stop runaway climate change. Despite a vow from Trump to pull out of the Paris climate agreement, the United States is again sending a delegation to the U.N. conference, which is being held in Poland. But the Trump administration is not attending the two-week meeting without making its policy preferences known. The U.S. government is planning to hold a side event promoting fossil fuels as part of the solution to global warming. The Trump administration plans to reinsert its voice at the climate conference in Katowice, in southern Poland's coal country. There the U.S. government will hold a panel titled “U.S. Innovative Technologies Spur Economic Dynamism.” The event is meant to “showcase ways to use fossil fuels as cleanly and efficiently as possible, as well as the use of emission-free nuclear energy,” the State Department said in a statement. “These job-creating innovations have contributed to reducing U.S. emissions while also growing our economy and providing reliable and affordable access to energy,” the statement continued. “Fossil fuels will continue to be used across the globe for decades to come.” Numerous analyses suggest capturing carbon for coal-fired power will be necessary to simultaneously meet energy needs and climate goals since renewable sources such as wind and solar power cannot ramp up fast enough. “This is obviously not a popular message" at a climate conference, former Trump White House energy policy advisor George David Banks said in an interview. Banks made the administration's presentation in Germany last year.
EPA plans to ease carbon emissions rules for new coal-fired power plants --The Environment Protection Agency on Thursday announced plans to ease rules for new coal plants, marking the Trump administration's latest effort to roll back Obama-era climate regulations.The EPA's proposal would allow newly built power plants to pump more planet-warming carbon dioxide into the atmosphere. It would scrap a 2015 provision that requires coal-burning plants to capture carbon emissions and store the greenhouse gas underground, a technology that has not been proven at commercial scale. "By replacing onerous regulations with high, yet achievable, standards, we can continue America's historic energy production, keep energy prices affordable, and encourage new investments in cutting-edge technology that can then be exported around the world," acting EPA administrator Andrew Wheeler said in a statement. Wheeler, a former coal lobbyist, said the Obama Administration's determination was "disingenuous" because it "knew that the technology was not adequately demonstrated." The move is largely symbolic. There are currently no plans to build new coal-fired power plants in the United States. The facilities not only faced higher regulatory burdens during the Obama administration, but stiff competition from cheap, cleaner-burning natural gas and renewable energy sources like wind and solar power.This year, U.S. coal consumption fell to its lowest in 39 years. Between 2007 and 2017, the United States retired 55 gigawatts of its total capacity of 313 gigawatts of coal-fired power. In 2018 alone, another 14 gigawatts are scheduled to come offline. "Today's proposal is nothing more than another thoughtless attempt by the Trump Administration to prop up their backwards and false narrative about reviving coal at the expense of science, public safety, and reality," Mary Anne Hitt, senior director of Sierra Club's Beyond Coal campaign, said in a statement.
Making Manchin the Ranking Member of Energy Committee Might Be a Compromise Too Far - Senator Joe Manchin of West Virginia, like most coal-state Democrats, is a friend of coal. Manchin’s tolerance for the industry is at odds with his party’s public commitment to clean energy, however, and that incongruity may soon become newly salient. As Politico reported on Thursday, Manchin is expected to become the Democrat’s ranking member of the Senate’s Energy and Natural Resources Committee. That promotion would give him a role in shaping the Senate’s climate-change policy, even though coal made Manchin a wealthy man. As the New York Times reported in 2011, Manchin earned over $1.3 million from a coal brokerage Enersystems, Inc., in the 19 months before he first entered the U.S. Senate. At the time, Manchin said the income would not influence his votes, and that his earnings were in a blind trust. But as Emily Atkin noted early on Thursday in The New Republic, Manchin has been a pro-coal senator. During his 2010 Senate run, Manchin infamously filmed himself shooting a copy of the cap-and-trade bill, which established a cap on greenhouse emissions. In 2013, Manchin slammed President Barack Obama for allegedly declaring a “war on coal” via environmental regulatory reforms. “After Pope Francis released an encyclical on the need to fight climate change, Manchin responded with a statement about the importance of coal for America’s future,” Atkin wrote. Manchin has also earned a mediocre 45 percent lifetime score from the League of Conservation Voters, and while the senator has steadfastly maintained that climate change is real, he also voted in favor of a 2015 “resolution of disapproval” that would, as Vice put it, “nullify the Environmental Protection Agency’s Clean Power Plan — the first nation-wide limit on greenhouse gas emissions from power plants, and key climate change policy.”
Poland’s Coal Habit Draws New Fire as UN Climate Talks Begin -Greenpeace has threatened to sue Poland’s biggest energy company if it does not take concrete action to reduce its climate impacts. Greenpeace Poland sent a letter last week demanding that state-owned Polska Grupa Energetyczna (PGE) stop investing in new coal plants and develop a plan to completely cut its carbon dioxide emissions by 2030. The campaign group said it would take PGE to court if the company does not respond.The threat adds more pressure to Poland as it hosts the latest United Nations climate conference, COP24, in Katowice this week. Last month, another Polish energy company, Enea, was sued by environmental law group ClientEarth for green-lighting a new coal power plant.The Polish government has been unapologetic about its support for coal, which currently supplies around 80 percent of the country’s energy, and the industry is politically influential. It sparked a controversy by naming several state-owned fossil fuel firms as sponsors of the climate talks, including PGE and coal mining company Jastrzębska Spółka Węglowa. Katowice itself is a key coal mining centre.Poland has promised to reduce its coal use by 50 percent by 2040, but this is far behind other European countries that have goals to phase it out completely within the next decade including the UK, France and Italy . The latest report from the Intergovernmental Panel on Climate Change (IPCC), which issued dire warningsabout a climate crisis looming in the next few decades, said that to avoid catastrophic climate impacts, coal use must drop from providing 40 percent of the world’s electricity currently to between 1 and 7 percent by 2050.
China’s unbridled export of coal power imperils climate goals - Even as China struggles to curb domestic coal-fired power and the deadly pollution it produces, the world’s top carbon emitter is aggressively exporting the same troubled technology to Asia, Africa and the Middle East, an investigation by AFP has shown. “China is a world leader in terms of embracing the policy and investment needs to progressively decarbonise its economy,” said Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis (IEEFA). “But internationally, China continues to invest in a range of coal project in direct contradiction to its domestic energy strategy.” A quarter of coal plants in the planning stage or under construction outside China are backed by Chinese state-owned financial institutions and corporations, according to research by IEEFA, an energy finance think-tank.
Coal's lingering role complicates climate change efforts: Kemp (Reuters) - Global coal consumption is set to remain steady in absolute terms through the middle of the century, even as its relative share of total energy consumption declines in favour of oil, gas and renewables.The persistence of coal consumption is consistent with the experience of earlier energy transitions and is one of the central challenges for policymakers concerned about climate change.Continued coal combustion is one reason why policymakers are not on track to achieve their target of limiting the rise in global temperatures to well below 2 degrees above pre-industrial levels.Coal is projected to be the slowest growing primary energy source over the next three decades, with its share of total primary energy consumption expected to decline to just 20 percent by 2050 from 27 percent in 2015.But in absolute terms, global coal consumption is still projected to be around 165 quadrillion British thermal units (BTUs) in 2050 up from 158 quadrillion BTUs in 2015, according to the U.S. Energy Information Administration.Rising consumption in India and other developing economies is expected to offset reduced combustion in the United States and China ("International Energy Outlook", U.S. Energy Information Administration, 2017).Long-term projections have proved notoriously inaccurate in the past because they are sensitive to small changes in the assumptions underlying the model, so any effort at future-gazing should be treated with caution. But the projections show how the impact of rising populations and prosperity in developing economies is likely to drive an enormous increase in total energy demand which will continue to support absolute coal consumption.
TVA to keep cutting carbon with natgas, nuclear power plants: CEO (Reuters) - The chief executive of Tennessee Valley Authority said on Thursday the U.S.-owned power generator will keep cutting carbon emissions in future years after replacing much of its coal-fired fleet with plants run on natural gas, nuclear and renewables. Since Bill Johnson took the reigns as CEO in 2013, TVA has spent $15 billion to modernize its generating fleet, reduced carbon emissions by retiring coal units, and cut debt by $3.5 billion, all while keeping consumer electric prices basically flat for six years. “Carbon emissions are now down to 50 percent below 2005 levels. I predict CO2 will fall to 60 percent below 2005 levels by 2020/2021 and 70 percent by the end of the next decade,” Johnson told Reuters in an interview. Johnson, who announced his retirement in November, said he will continue as CEO until the board finds a replacement. The company continued to shut coal-fired units over the past two years despite efforts by U.S. President Donald Trump to prop up the coal industry by sweeping away former President Barack Obama’s climate change regulations, like the Clean Power Plan. Johnson said TVA shut old coal plants for economic reasons. “We have reduced carbon emissions simply by doing what is the most efficient and effective way to serve our customers,” Johnson said, noting the low cost of gas in recent years has made it more economic for TVA to build a new gas-fired power plant than refurbish a 60-year old coal unit. Over Johnson’s tenure, TVA’s generating mix transitioned from 41 percent coal and 12 percent gas in 2012, the year before he became CEO, to 19 percent coal and 20 percent gas in 2018, according to TVA’s federal filings. And TVA may not be done retiring coal plants. In November, the company said it is seeking public comment on potential environmental and socioeconomic impacts of closing the 870-megawatt (MW) Bull Run coal plant in Tennessee and the last 971-MW coal unit at the Paradise plant in Kentucky. One megawatt can power about 1,000 U.S. homes.
A Coal Ash Spill Made These Workers Sick. Now, They're Fighting for Compensation. - For dozens of Tennessee workers who cleaned up the nation's worst coal ash spill and claimed it made them sick, the recent jury verdict against their employer was a major victory after a five-year slog through the federal courts. The jury found Jacobs Engineering failed to protect the workers, and it concluded that their exposure to toxic heavy metals and radiation in the coal ash could be responsible for their illnesses, from skin rashes to lung disease to cancer. Now, their attorneys will need to link each plaintiff's coal ash exposure to their illness or death to determine financial damages, and legal experts say this step will be more difficult. The outcome is likely to be closely watched by others around the country who live near coal ash sites, and by companies that produce and dispose of coal ash waste. The human toll from the coal ash spill has been devastating. Some 30 people who cleaned up the ash at the power plant near Kingston have died with ailments that can be linked to exposure to toxic elements of coal ash, and more than 250 are sick or dying, according to an investigation by the Knoxville News Sentinel and the USA Today Network in Tennessee. Lead can cause hypertension or peripheral neuropathy, for example. Arsenic, cadmium and fine particulates can cause coronary artery disease. Cadmium and fine particulates can cause chronic obstructive pulmonary disease. Ionizing radiation can cause leukemia. This first lawsuit involves an initial group of 70 plaintiffs. The incoming congressman for the Knoxville area, Republican Tim Burchett, has called for federal agencies or Congress to investigate the illnesses and deaths. "Those affected deserve answers and anyone at fault should be held accountable," he said.
Toxic waste from 22 coal plants in Illinois puts drinking water for nearby communities at risk, reports show - Toxic waste contaminates water sources near all but two of the coal-fired power plants in Illinois, according to a new analysis based largely on testing conducted by energy companies.The compilation of industry-supplied reports from 24 coal plants highlights how federal and state officials have failed for decades to hold corporations accountable for the millions of tons of ash and other harmful byproducts created by the burning of coal to generate electricity.Most of the waste in Illinois has been mixed with water and pumped into unlined pits, where testing shows harmful levels of arsenic, chromium, lead and other heavy metals are steadily oozing through the ground toward lakes and rivers, including the state’s only national scenic river. One of the sites is the Waukegan Generating Station on Lake Michigan, a former ComEd coal plant now owned by NRG Energy that is ringed by two unlined ash ponds and an unlicensed landfill. Another is a Joliet quarry where ComEd and other companies dumped coal ash until NRG overhauled a nearby coal plant in 2016 to burn natural gas.Ten of the sites pose a danger to the drinking water supplies of nearby communities, according to the Illinois Environmental Protection Agency, including the Joliet dump and ash pits surrounding another NRG coal plant along the Des Plaines River in Romeoville. “We're reaching a turning point as energy companies are proposing to leave coal ash in floodplains of rivers and exposed to groundwater,” said Andrew Rehn, water resources engineer at the Prairie Rivers Network, another group that worked on the report. “We need stronger rules that provide permanent protection with a financial guarantee, and give the public a voice in these decisions.” Because the state’s energy system is deregulated and companies sell electricity generated in Illinois on the open market, shareholders, rather than ratepayers, would be forced to pay the tab for cleaning up the coal ash dumps. Faced with an intense lobbying effort by energy lobbyists, a state rule-making panel dominated by members appointed by Republican Gov. Bruce Rauner has repeatedly delayed action on the proposal. Federal officials also have been slow to act.
Clean coal’s dirty secret: More pollution, not less -- Champions of coal say the superabundant fossil fuel can be made environmentally friendlier by refining it with chemicals – a “clean coal” technology backed by a billion dollars in U.S. government tax subsidies annually.,But refined coal has a dirty secret. It regularly fails to deliver on its environmental promises, as electric giant Duke Energy Corp found.Duke began using refined coal at two of its North Carolina power plants in August 2012. The decision let the company tap a lucrative federal subsidy designed to help the American coal industry reduce emissions of nitrogen oxides – also known as NOx, the main contributor to smog and acid rain – along with other pollutants. In nearly three years of burning the treated coal, the Duke power plants collected several million dollars in federal subsidies. But the plants also pumped out more NOx, not less, according to data from the U.S. Environmental Protection Agency analyzed by Reuters.The NOx emission rate at Duke’s Marshall Steam Station power plant in Sherrills Ford, North Carolina, for example, was between 33 percent and 76 percent higher in the three years from 2012 to 2014 than in 2011, the year before Marshall started burning refined coal, the EPA data shows.The utility also discovered that one of the chemicals used to refine the coal, calcium bromide, had reached a nearby river and lakes – raising levels of carcinogens in the water supply for more than a million people in greater Charlotte.Duke stopped using refined coal at the plants in May 2015 because of the water pollution problems, said spokeswoman Erin Culbert. Bromide levels in the region’s drinking water dropped sharply several months later, said Barry Gullett, the city’s water director, in a 2015 memo.Duke’s experience reflects a fundamental problem with the U.S. clean coal incentive program, a Reuters examination has found. Refined coal shows few signs of reducing NOx emissions as lawmakers intended, according to regulatory documents, a Reuters analysis of EPA emissions data, and interviews with power plant owners, scientists and state environmental regulators.
U.S. coal consumption in 2018 expected to be the lowest in 39 years -- EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U.S. coal consumption has been falling since its peak in 2007, and EIA forecasts that 2018 coal consumption will be 437 MMst (44%) lower than 2007 levels, mainly driven by declines in coal use in the electric power sector. The electric power sector is the nation’s largest consumer of coal, accounting for 93% of total U.S. coal consumption between 2007 and 2018. The decline in coal consumption since 2007 is the result of both the retirements of coal-fired power plants and the decreases in the capacity factors, or utilization, of coal plants as increased competition from natural gas and renewable sources have reduced coal’s market share. In 2007, coal-fired capacity in the United States totaled 313 gigawatts (GW) across 1,470 generators. By the end of 2017, 529 of those generators, with a total capacity of 55 GW, had retired. So far in 2018, 11 GW of coal-fired generating capacity has retired through September, and another 3 GW are expected to retire in the final three months of the year, based on data reported to EIA by plant owners and operators. If these plants retire as planned, 2018 will be the second-highest year for coal retirements. Another 4 GW of capacity are planning to retire by the end of 2019. One of the main drivers of coal retirements is the price of coal relative to natural gas. Natural gas prices have stayed relatively low since domestic natural gas production began to grow in 2007. This period of sustained, low natural gas prices has kept the cost of generating electricity with natural gas competitive with generation from coal. Other factors such as the age of generators, changes in regional electricity demand, and increased competition from renewables have led to decreasing coal capacity.
Trump's EPA Wants to Build More Coal Plants as U.S. Consumption Falls to Lowest Level in 39 Years - The U.S. Environmental Protection Agency (EPA), which is currently overseen by ex-coal lobbyist Andrew Wheeler, is expected to announce a plan to end a climate regulation on coal-fired power plants on Thursday, the New York Times reported, citing four unnamed sources.The move would lift an Obama-era rule that required newly built coal-fired plants to use carbon capture and storage (CCS) technology, ultimately removing a hurdle to build new plants, the publication said.That mandate, finalized in 2015, has previously faced legal challenges from coal companies and conservative lawmakers who argue that CCS is too costly and not commercially available, as Utility Dive noted."We are supportive of EPA's decision to revise the standards for new coal plants," Michelle Bloodworth, president and CEO of the American Coalition for Clean Coal Electricity, told the Washington Examiner in a report published Tuesday. "We do not feel like the practicality of CCS has been adequately demonstrated or economically feasible. If we are ever going to build new coal plants in the country again, we will need reasonable standards."The Trump administration's latest environmental rollback is not expected to immediately jumpstart investments and construction of new coal plants, which are not financially viable because of cheap natural gas and environmental regulations, the Times said. Rather, it's a yet another signal from the Trump administration that it is ignoring dire climate warnings and embracing the polluting fossil fuel industry instead.
EPA lifting greenhouse gas limits on US coal power plants -The Environmental Protection Agency, now led by acting Administrator Andrew Wheeler, a former coal lobbyist, has announced more rollbacks regulations on coal-fired power plants. It’s a striking move for two big reasons: No new coal plants are being built in the US, and the EPA itself (along with 12 other federal agencies) recently put out a sweeping report detailing the need to reduce emissions from fossil fuels because of the grave threat of climate change. The new proposal involves loosening an Obama-era restriction on how much carbon dioxide new coal power plants can emit. Known as the New Source Performance Standards, a provision under the Clean Air Act, the rule established in 2015 said coal plants couldn’t emit more than 1,400 pounds of carbon dioxide per megawatt-hour. This would have likely required new coal plants to install carbon capture technologies to limit some of their emissions. But the coal industry argued in court that these technologies are too expensive and immature to deploy at scale. The EPA now wants to relax the limit to 1,900 pounds of CO2 per MWh. “Consistent with President Trump’s executive order promoting energy independence, EPA’s proposal would rescind excessive burdens on America’s energy providers and level the playing field so that new energy technologies can be a part of America’s future,” said Wheeler in a press release.
U.S. Utilities Set To Retire Coal Capacity At Double The 2017 Rate - Domestic coal-fired power plants are set to shut down at double the rate of last year. The retirements would remove about 6 percent of all coal-generated capacity in the U.S. This comes despite the Trump administration's promise to extend a lifeline to the coal industry.The utilities that coal once relied on have wandering eyes. Natural gas and renewable energy are increasingly competitive and efficient resources. S & P Global Market Intelligence calculated the impending capacity retirement. Coal reporter and co-author Taylor Kuykendall said the downward trend is clear."In the meantime, these power plants that are already existing are only getting older; they're only gonna get less efficient, and they're only going to get closer to retirement age. None of these plants are gonna suddenly become brand new coal plants," he said. Kuykendall wrote it's clear utilities see a benefit to moving away from coal. "Whether because of climate risk or some other concern about coal, they're not seeing those customers or investors wanting to be involved in the new coal plants or even keeping older coal plants around anymore," Kuykendall said. Ashleigh Cotting, a commodites data journalist a S & P Global Market Intelligence and co-author of the same report said, "in our analysis, we found that the retirement slated for 2019 through 2024, only represented about 9 percent of operating coal capacity." That's an additional 9 percent. Exports have kept the coal market going, according to Kuykendall. It's worth noting there's still a lot of coal capacity in the country. Of 245.6 gigawatts of power, 14.3 are scheduled to come offline. Still, that's the highest level since 2015.
Oakland Faces Lawsuit Over Obstruction of Coal Shipping- – A developer fighting to export coal from a planned marine shipping terminal in Oakland sued the city in state court Tuesday, accusing local officials of obstructing the project.It’s the second lawsuit against the city over the Oakland Bulk & Oversized Terminal (OBOT). In May, a federal judge overturned a ban prohibiting the storage and handling of coal at bulk-goods facilities in Oakland, suggesting it was enacted to kill the terminal project.Now, OBOT’s developers claim in a complaint filed in Alameda County Superior Court that the city has renewed efforts to obstruct the project, this time by falsely asserting OBOT defaulted on its lease at the former Oakland Army Base and giving it 72 hours to vacate the property.“In one egregious omission or act after another, the city has failed to perform its material obligations under the lease and [development agreement], and has aggressively taken steps to prevent OBOT’s performance under the lease and receipt of its benefit of the bargain thereunder,” the developers’ lawyer, Barry Lee of Manatt, Phelps & Phillips, wrote in the 50-page complaint. OBOT’s developers – including Phil Tagami, a friend of Gov. Jerry Brown – want to haul coal by train from nearly 1,000 miles away in Utah and ship it to Asia through the $250 million facility. The terminal is being built next to the Port of Oakland and would be capable of exporting up to 10 million tons of coal annually, making it the largest coal export terminal on the West Coast.But in June 2016, the Oakland City Council passed two measures prohibiting the storage and handling of coal and petroleum coke at any bulk-materials facility in the city after multiple studies found coal dust blowing off trains can cause asthma or cancer, and that emissions from the terminal would worsen air quality in West Oakland, a community primarily composed of low-income people of color that already suffers from some of the worst air quality in California due to its proximity to major freeways and the port.The new regulations brought the project to a halt. Tagami sued in federal court to reverse the ban the following December, claiming it violated a 2013 development agreement between OBOT and the city.Tagami, whose Oakland-based real estate firm California Capital and Investment Group owns OBOT, argued the city knew before signing the development agreement the terminal might handle coal and didn’t object, but caved to political pressure from e environmental groups after four Utah counties announced plans to invest $53 million in the terminal to export their coal.
Monumental Disaster at the Department of the Interior - This is a tough time to be a federal scientist—or any civil servant in the federal government. The Trump administration is clamping down on science, denying dangerous climate change and hollowing out the workforces of the agencies charged with protecting American health, safety and natural resources.At the Department of the Interior (DOI), with its mission to conserve and manage America’s natural and cultural resources, the Trump administration’s political appointees are stumbling over one another to earn accolades for disabling agency operations. I should know; I was one of dozens of senior executives targeted by Interior Secretary Ryan Zinke for reassignment in a staff purge just six months into the new administration. From that day onward, Zinke and his political staff have consistently sidelined scientists and experts while handing the agency’s keys over to oil, gas and mining interests. The only saving grace is that Zinke and his colleagues are not very good at it, and in many cases the courts are stopping them in their tracks. The effects on science, scientists and the federal workforce, however, will be long-lasting.In a new report, Science Under Siege at the Department of the Interior, the Union of Concerned Scientists (UCS) has documented some of the most egregious and anti-science policies and practices at the DOI under Secretary Zinke. The report describes suppression of science, denial of climate change, the silencing and intimidation of agency staff, and attacks on science-based laws that help protect our nation’s world-class wildlife and habitats. It is a damning report and required reading for anyone who values public lands, wildlife, cultural heritage, and health and safety. It would be impossible to cover everything this clumsy political wrecking crew is up to, but the report provides details on the most prominent actions that deserve greater scrutiny, such as: the largest reduction in public lands protection in our nation’s history; a systematic failure to acknowledge or act on climate change; unprecedented constraints on the funding and communication of science; and a blatant disregard for public health and safety. Why is this administration so scared of science? Because, while science provides the best evidence we have for making policy decisions that serve the broader public, Ryan Zinke has been very clear that he is in office to serve the oil, gas and mining industries, not the general public.
Shell Ties New Climate Targets to Exec Pay - Royal Dutch Shell plc is introducing short-term carbon emission targets that will be directly tied to executive pay, the company announced Monday.The new Net Carbon Footprint targets will be set for periods of three to five years and will begin in 2020 and run to 2050 – by when Shell hopes to reduce its carbon emissions by half. The company is aiming for 20 percent reduction by 2035.Shell said it plans to link the new targets to executives’ remuneration (pay) policy, which will be subject to a shareholder vote at the 2020 Annual General Meeting.The company said the announcement is part of a drive to increase transparency around the topic of climate change, and to create clear benchmarks for performance.“Meeting the challenge of tackling climate change requires unprecedented collaboration and this is demonstrated by our engagements with investors,” Shell CEO Ben van Beurden said in a company statement. “We are taking important steps towards turning our Net Carbon Footprint ambition into reality by setting shorter-term targets. This ambition positions the company well for the future and seeks to ensure we thrive as the world works to meet the goals of the Paris Agreement on climate change.” Shell’s decision to adopt new climate targets comes just months after the company’s CEO said it would rather stick to broader ambitions than set specific climate targets. Van Beurden said this in light of the threat of additional legal action after Shell and other Big Oil companies were slapped with lawsuits by U.S. states and municipalities around climate change, Bloomberg reported.
California Becomes First State to Require Solar Panels on New Homes - California has taken the final step to be the first state in the nation to require solar panels on new homes. The California Building Standards Commission on Wednesday unanimously upheld a May 9 decision to require solar panels on homes up to three stories. The requirement goes into effect Jan. 1, 2020. Currently, just 9% of single-family detached homes in California have solar panels. But as the state pushes toward decreasing greenhouse gas emissions—and with a 2045 goal to transition to a fully renewable energy grid devoid of fossil fuels—this rule will help accelerate that progress. Aside from energy efficiency, solar panels reduce ozone-damaging household emissions, most of which come from natural gas-generated electricity.In the long-term, solar panels benefit homeowners. While the upfront cost for building a home will increase—by as much as $10,000, according to the California Energy Commission, or as much as $25,000-30,000, according to home construction company Meritage Homes—long-term energy bill savings will be considerable.
Aroostook wind power backers see opportunity if western Maine transmission line fails - Amid opposition to an overhead powerline that would bring Quebec hydro electricity to Massachusetts through western Maine, a group of companies behind a wind power proposal in Aroostook County are hoping their project will become a viable alternative. Amid opposition to an overhead powerline that would bring Quebec hydro electricity to Massachusetts through western Maine, a group of companies behind a wind power proposal in Aroostook County are hoping their project will become a viable alternative. Under a renewable energy procurement program by Massachusetts, Central Maine Power is seeking to build a 145-mile high-voltage transmission line carrying hydro power from Quebec through western Maine and into New England’s energy grid. The $1 billion proposed transmission line is facing significant opposition from western Maine communities and a host of environmental and outdoors groups, as did the initial proposed transmission line, the Northern Pass, that New Hampshire authorities rejected in March. The Maine proposal now needs several permits and approval from the Maine Public Utilities Commission, which is set to make a decision in March 2019. Maine Power Express proposes bringing electricity to Massachusetts from new wind farms in Aroostook County via underground transmission lines from the southern Aroostook area to Searsport and then through underwater transmission cables from Searsport to Boston. The transmission lines would total approximately 300 miles and would cost $1 billion or more, Gahagan said. Massachusetts ultimately selected Hydro-Quebec’s proposal to supply more than 1,000 megawatts of hydro-electricity. That proposal had the Northern Pass as its first choice for transmitting the power and the western Maine transmission line as its second. If Central Maine Power’s transmission line fails to gain approval, Gahagan said that the backers of the Maine Power Express proposal want to get fresh consideration from Massachusetts, such as through a reopened procurement process.
Kudlow calls for end to subsidies for electric cars, renewables -- White House chief economic adviser Larry Kudlow said on Monday the Trump administration will seek to end subsidies for electric cars and renewable energy sources, according to reports. Kudlow said he expected subsidies for electric cars would end by 2020 or 2021. “We want to end, we will end those subsidies and others of the Obama administration,” he said, according to Bloomberg. It’s unclear how the administration plans to cut the tax credits, since Congress enacted them and would have to act to end them. Electric car buyers currently get tax credits of $7,500 per vehicle. But that phases out as each company sells 200,000 cars — a level that a handful of companies, including General Motors, are approaching. Utilities also get tax credits for producing wind power and for installing solar power equipment. Those incentives, enacted before former President Obama took office, are on track to phase out in the coming years. The remarks were made in response to a question about what the administration would do about GM’s plans to layoff 15,000 people and shutter five plants across North America. The company's plans have sparked outrage in Washington from both parties. President Trump last week floated cutting GM's subsidies for electric vehicles and raising auto tariffs to punish the company if it cuts jobs in the U.S. Conservatives have pushed back against subsidies and other policies meant to promote renewables over traditional sources. Democrats, though, are calling for a Green New Deal that would transition the country to 100 percent renewable energy for electricity to deal with climate change.
Will Koch Pull the Plug on Electric Cars? - When multibillionaire industrialist Charles Koch perceives a potential threat to his fossil fuel empire, he doesn't mess around.To undercut the burgeoning wind industry, Koch's network of advocacy groups, think tanks and Capitol Hill friends fought to terminate the federal production tax credit, and Congress ultimately agreed in 2015 to phase it out over the following four years.To slow the exponential growth of solar power, his network has been lobbying state legislatures to curtail the practice of net metering, which gives solar panel owners credit for the excess energy they generate and send back to the grid.Now Koch wants to kill a federal income tax credit of up to $7,500 for electric vehicle (EV) buyers for the first 200,000 EVs each automaker sells. Although EVs make up less than 2 percent of total vehicle sales nationally, 123,000 of them were snapped up in the first six months of this year, more than twice the amount sold in all of 2015, and more carmakers are expected to introduce new EV models over the next few months. Alarm bells are going off at Koch Industries headquarters.Last year, the initial draft of the House Republican tax reform bill included a provision ending the EV tax credit, but it survived in the final, end-of-the-year tax package President Trump signed in December. This year's tax-break-extenders bill finds the Koch network back at work to block the EV tax credit, and it got a boost this week from White House chief economic adviser Larry Kudlow, who said the Trump administration wants to end EV subsidies. The rationale behind the tax credit, which Congress passed in 2009, is to create a stable market for EVs much in the same way government policies helped the gasoline-hybrid market grow. Congress has a long history of providing tax breaks to help emerging and established industries alike, and EVs are a natural candidate because auto industry entry barriers are steep, and electrifying the U.S. transportation sector is one of the most important steps the country can take to address global warming.
Congo declares cobalt 'strategic', nearly tripling royalty rate (Reuters) - Democratic Republic of Congo has declared cobalt a “strategic” substance, a government decree showed on Monday, nearly tripling the royalty rate miners will pay on the key component in electric batteries to 10 percent. Prime Minister Bruno Tshibala signed the decree, which is dated Nov. 24, despite fierce opposition from leading investors including Glencore and China Molybdenum, who have lobbied against tax hikes under a new mining code adopted earlier this year. The 10 percent royalty rate will also apply to coltan, which is used to power electronic devices, and germanium, which is used to make transistors. Before they were designated “strategic”, the minerals were all subject to a royalty rate of 3.5 percent. That was already an increase over the 2 percent rate in Congo’s previous mining code, which was in effect until June. Congo is Africa’s top copper producer and mines more than 60 percent of the world’s cobalt. Foreign investors say the tax hikes under the new code will deter further investment and have threatened to challenge some parts of the regulation in arbitration. Cobalt prices surged over the past two years, due largely to demand for electric cars, but have fallen more than 40 percent since March due to a surplus of cobalt chemicals.
Connecticut state regulators clear Millstone nuclear plants to compete in zero-emission energy auctions - Owners of the Millstone nuclear power plants will now be able to compete against wind and solar to sell power in “zero emission” state energy auctions as a result of a final decision issued Wednesday by Connecticut regulators. The final decision by the state Public Utilities Regulatory Authority found that the Waterford facilities are “at risk of retirement” if Dominion isn’t allowed to participate in those zero emission energy auctions. Dominion officials repeatedly warned that it might be forced to close the nuclear plants if it wasn’t given access to those energy markets. State and regional officials say the Waterford plants are a critical part of Connecticut’s and New England’s power grid and loss of the facilities would create serious problems.
PJM completes Ohio Valley Electric Corp. integration — The PJM Interconnection integrated the Ohio Valley Electric Corporation as a new transmission zone within PJM at midnight Saturday, which includes 2,200 MW of coal-fired generation capacity along with 705 miles of 345-kilovolt transmission lines, the grid operator said Monday. "PJM determined that OVEC met the membership requirements outlined in the PJM Operating Agreement and that its integration would not cause any reliability challenges for PJM," the grid operator said in a statement Monday. PJM also notified stakeholders Monday about "an issue" with posting the OVEC Residual Aggregate locational marginal price component of its posted day-ahead clearing prices for December 2, according to an email. The issue from Saturday has been resolved, PJM spokesman Jeff Fields said in an email. PJM is still investigating the cause of the problem and will have additional information to post tomorrow, Shields said. OVEC and its subsidiary Indiana-Kentucky Electric were formed in 1952 to provide power to uranium enrichment facilities near Portsmouth, Ohio, owned by the Atomic Energy Commission, a US Department of Energy predecessor. OVEC owns and operates two coal-fired power plants, the 1,300-MW Clifty Creek Generating Station located along the Ohio River in Jefferson County, Indiana; and the 1,086-MW Kyger Creek Generating Station located on the Ohio River in Gallia County, Ohio. Brian Chisling, OVEC's corporate attorney said during a November 2017 PJM Markets and Reliability Committee meeting that the company has no plans to retire the units.
Norwalk Reflector: Local wind energy project faces opposition — The debate surrounding local wind energy pits neighbor against neighbor. That’s what Chris Bauer, a Bellevue resident who is part of the Seneca Anti-Wind Union, said about the proposed plans for the Emerson Creek Wind Project in Erie and Huron counties.“We moved up here two and half years ago and found out we had wind turbines going through our neighborhood … We got prepared, got educated and now we are here fighting the Emerson Creek Project in Huron County,” Bauer said.The project, if approved, would see the construction of between 65 to 85 wind turbines in Erie and Huron counties. Proponents of wind power recently held at meeting at Ernsthausen Community Center in Norwalk. According to data provided by Apex Clean Energy, the developer for the project, the Emerson Creek Wind Project would provide:
- • $51.3 million in landowner payments
- • $54 million in school payments
- • $27 million in county and township payments
- • 130 construction jobs
- • 30 long-term jobs
Seneca Anti-Wind Union — an activist group opposing wind turbines in western Ohio — hosted its meeting Monday at the Bellevue VFW about possible negative effects. “We all have one enemy in common, and it’s wind,” said Chris Zeman, one of the founders of the anti-wind group, to a packed room. Zeman claimed people are left with land they can’t use after neighbors agreed to have a turbine placed on the edge of their property, away from their home. “Now they are reaping all the money while you’re stuck with land you can’t do anything with,” Zeman said. “I’m all for property rights, but if it takes away my right for what I want to do with my land, then that becomes a property rights issue.” But Natasha Montague, an Apex spokeswoman, said turbines stopping a home from being built on a nonparticipating property is a myth. “Any setback (required distance between a turbine and a home) is on the developer, a non-participating landowner is free to do whatever they want with their land,” Montague said. “Ohio has one of the largest setbacks in the country for nonparticipating houses. A turbine’s tip has to be at about a quarter mile from the property line.”
Ohio excess profits case reflects ripples from FirstEnergy’s challenged credit rider -- Consumer advocates say a proposed deal involving FirstEnergy’s earnings in Ohio ignores the interests of most ratepayers. The Office of the Ohio Consumers’ Counsel says regulators should have included revenue from a credit support rider when calculating Ohio Edison’s allowable earnings last year. A deal struck between its parent company, FirstEnergy, along with state regulatory staff and a group of energy-intensive industrial companies could let the company keep $42 million in “significantly excessive earnings” from last year, according to the state’s consumer advocate. The Public Utilities Commission of Ohio held a hearing on the proposed “settlement” on Nov. 29. The Office of the Ohio Consumers’ Counsel presented evidence and arguments against the plan. “The PUCO’s settlement process is contributing to the electric utilities’ subsidy culture to the detriment of the consumers who pay for it,” said spokesperson J.P. Blackwood at the Office of the Ohio Consumers’ Counsel.The case reflects a deeper problem with the way the PUCO rules on “settlements” agreed to by only a limited number of intervenors, said Rep. Mark Romanchuk, R-Ontario. “I don’t think that’s the way we should be making policy in the state,” he said. The settlement in FirstEnergy’s excessive earnings case is a stipulation agreed to by FirstEnergy’s Ohio utilities, the staff of the PUCO, and the Ohio Energy Group, which describes itself as a group of 27 large companies in energy-intensive industries. Approval by the commission would basically let FirstEnergy’s Ohio utilities keep all their earnings for 2017, without having to adjust future bills for refunds or credits.According to the stipulation, FirstEnergy’s Cleveland Electric Illuminating Company earned a 4 percent return on equity in 2017, its Toledo Edison utility earned 6.4 percent, and Ohio Edison had an 11.8 percent return on equity. The stipulating parties then agree that none of the three utilities had “significantly excessive earnings” that year. However, the calculations don’t account for a challenged credit support rider collected by the utility in 2017, and that money should have been included in the calculations, said regulatory economist Daniel Duann of the Office of the Ohio Consumers’ Counsel, in testimony filed with the regulators before last week’s hearing. By his calculations, including those earnings would push Ohio Edison’s rate of return up to 17.39 percent, with $42 million constituting “significantly excessive earnings.”
Shale well drilling still strong in Ohio and Pa. — The Pennsylvania Department of Environmental Protection issued 269 permits across the state for drilling and operating an unconventional well in October and November 2018. In western Pennsylvania, there were 58 permits issued in Washington County; 31 permits issued in Greene County; 21 permits in Westmoreland County; 15 permits issued in Allegheny and Butler counties; and two permits issued in Beaver County.In the first 11 months of this year, there have been a total of 1,687 permits issued across the commonwealth. Of those, there were 301 permits issued in Greene County.Other top counties for drilling/operating permits in western Pennsylvania were: Washington, 282; Westmoreland County, 132; Butler, 88; Allegheny, 73; Beaver, 60; Fayette, 41; and Armstrong, 32. Drilling also remains active in the northcentral region of Pennsylvania, where there are 5,421 active horizontal wells drilled since the beginning of 2008. Statewide, there are 10,817 active horizontal wells.As of Nov. 17, there were 2,081 deep horizontal wells producing in the Utica or Point Pleasant shale plays in Ohio. Another 376 have been drilled, but are not producing at this time, according to the Ohio Department of Natural Resources. Of the 36 horizontal wells drilled in the Marcellus Shale in Ohio, 23 are producing wells. Eighteen of those 23 are in Monroe County, primarily in Ohio Township. Another three are in Belmont County, and there are single wells producing in Carroll and Jefferson counties in the Marcellus play. The ODNR issued 22 permits in the Utica/Point Pleasant shale plays in October, and 11 permits in November, as of Nov. 17.
- Guernsey County. There were seven permits issued in October and 0 in November in Guernsey County. Of the October permits, six are being drilled, four on the Fineran site in Wills Township and two on the Posey site in Oxford Township. The remaining permit was also issued for a well on the Posey site. All were issued to Eclipse Resources.
- Jefferson County. Ascent Resources Utica received eight new permits in Jefferson County in October, four for the Faldowski site and four on the Lori sites, all in Smithfield Township. Ascent is drilling on six of the sites. Another permit was issued on the Lori site in Smithfield Township in November.
- Monroe County. Equinor USA Onshore Properties (formerly Statoil) received two permits in October for horizontal wells in Green Township, and in November, Eclipse Resources received four permits in Switzerland Township. Three were for the Craig Miller wells, and the fourth on the Pittman site.
- Harrison County. Four permits were issued in October in Harrison County’s Archer Township to Chesapeake Exploration. One of the four, all issued for the Davis Trust wells, is being drilled. Chesapeake received another three permits in November 2018, all for the Wunnenberg wells in Cadiz Township. Also in November, Ascent Resources Utica received three permits for the Ellen well in Moorefield Township.
- Noble County. Triad Hunter LLC received a permit for drilling in Noble County’s Jefferson Township for a site dubbed “Woodchopper.”
The companies with the most Ohio Utica shale permits, as of Nov. 17, are:
- Chesapeake Exploration, with 886 (719 producing)
- Ascent Resources Utica, 485 (367 producing)
- Gulfport Energy Corporation, 406 (299 producing)
- Antero Resources Corporation, 260 (215 producing)
New law allows ODNR to plug more wells - The Ohio Department of Natural Resources is revving up its program to plug oil and gas wells that were left behind by their owners. State lawmakers more than doubled the plugging program’s budget earlier this year to $15 million. ODNR plans to plug 173 wells this fiscal year, and has entered contracts to plug 55 of those wells at a cost of $3.6 million since July 1. ODNR spent $6 million to plug 83 wells last fiscal year, a price tag and number of wells that were records for the plugging program, which has been around since the mid-1970s. The new funding has allowed the program to put together a robust plugging plan, said Steve Irwin, spokesman for ODNR’s Division of Oil and Gas Resources Management. “It’s exponential growth headed in the right direction,” Irwin said. Orphan wells are oil and gas wells that haven’t been plugged properly and don’t have an owner who could pay to do that work. Orphan wells leak oil, natural gas and brine into surrounding water and soil and can cause explosions when natural gas collects in any nearby buildings. ODNR has identified nearly 750 orphan wells in 61 counties across the state, but the true number is unknown. Some 250,000 wells have been drilled in the state since 1860 and just 61,000 are producing. The rest are potential orphans depending on if and how they were plugged, and whether the owners are still around. The cost to plug a well can range from $20,000 to nearly $200,000, depending on the well’s depth, location and the difficulty of the job. State lawmakers passed House Bill 225 earlier this year to beef up ODNR’s plugging program and the law took effect in late September. Ohio already earmarked a percentage of the Oil and Gas Well Fund, which collects a tax on oil and gas production and fees paid by drillers, for the plugging program. Shale drilling ballooned the fund from $8.2 million in 2013 to $75.7 million last fiscal year. The final version of House Bill 225 increased the plugging program’s share of the fund from 14 percent to 30 percent of the previous fiscal year’s collection. The bill also streamlined the steps ODNR must take to locate well owners before plugging a well and allows landowners to hire contractors who are then paid directly by ODNR. Previously, ODNR reimbursed landowners who hired contractors, creating a tax liability for the landowners. Irwin said ODNR has adopted changes to the scope of well-owner searches and notifications and in how it prioritizes which wells get plugged. ODNR also is working on a new contract for the landowner grant program.
Ohio House OKs use of oil and gas brine for road de-icing - cleveland.com - —The Ohio House of Representatives on Thursday passed legislation allowing brine from vertical oil and gas drilling to be used for road de-icing, despite concerns that the salty liquid contains dangerous and radioactive chemicals.House Bill 393, which heads to the Senate after passing the House 52-31, is touted by supporters as a way to promote the use of a product that is a safer and less corrosive alternative to rock salt to keep roads ice-free.State Rep. Anthony DeVitis noted that for more than a decade, the Ohio Department of Transportation used brine from drilling operations.However, in 2014, state lawmakers imposed restrictions on the sale of fracking byproducts that inadvertently applied to vertical wells too. DeVitis said this bill, which would not apply to brine used in horizontal “fracking” drilling operations, would rectify that move. “It encourages recycling. It encourages protecting our environment. It encourages small businesses to invest, do research and establish business in Ohio,” said DeVitis, a Republican from Green. No one spoke on the House floor on Thursday against the legislation.
Ohio EPA Looks to Update Air Quality Rules at Fracking Sites - WKSU News - The Ohio EPA is considering changes to its regulations on air quality at fracking and natural gas transmissions sites. The state Environmental Protection Agencyis doing what deputy director Heidi Griesmer calls a periodic rules review. One thing it is considering has to do with changes in regulations. Normally they’re applied to new shale wells or compressor stations coming on line. The agency may make them applicable to established sites too. “This would cover air pollution emissions from existing non-conventional oil and gas facilities that aren’t covered by our most current regulations.”As part of the review the sate EPA is also gathering input from interested parties. “It’s just an extra step we take to involve stakeholders before we begin drafting rules.” The open period for ideas is underway through December 19th.
OU student produces documentary about fracking - An Athens County mother turned activist is the subject of a new documentary produced by an Ohio University student about the controversial practice of hydraulic fracturing for oil and gas. “Injection and Outrage” is a 15-minute look at one woman’s fight against drilling-waste injection wells in her community as she strives to protect her own land and that of her mother’s, according to an OU news release. Honors Tutorial College junior Winter Rey Wilson, who’s from Athens, produced the film as part of an honors tutorial class about environmental documentary with professor Nerissa Young. “I’m doing a documentary series about the human dimensions of climate change for my HTC thesis, so this is my debut in the environmental filmmaking world,” Wilson said. The film will premiere at 7 p.m. Monday, Dec. 10, at the Athena Cinema on South Court Street. Admission is free for the event, which will include a Q&A with Wilson after the screening. In the release, Wilson explained, “I grew up in Athens learning about a lot of very important environmental justice issues happening in my own community – injection-well waste being one that’s especially prevalent.” She met the title character on a class field trip and was inspired to tell her story. In turn, Wilson said in the release, she hopes the story will inspire OU students and the community to get informed and take action. “Often students on campus don’t realize that there are significant environmental justice issues that are happening in the broader Athens community,” she said.
Lawsuits allege damage from Nexus pipeline - Several landowners along the Nexus pipeline have sued the pipeline’s owner and its construction contractor, saying the companies broke agreements to protect and restore properties affected by the project. Michael Thompson, the Jackson Township attorney representing the landowners, has filed a dozen lawsuits in Stark, Summit, Wayne and Columbiana counties in the last couple of weeks against Nexus Gas Transmission and Michels Corp. Nexus is a $2.1 billion pipeline backed by Detroit-based DTE Energy and Enbridge, a Canadian company. Michels Corp. is a construction firm in Wisconsin. The 36-inch diameter pipeline can carry up to 1.5 billion cubic feet of natural gas a day from the Utica and Marcellus shales to users in Ohio, Michigan and Canada. Thompson said he anticipated filing more lawsuits in the coming weeks, and Tuesday he added Michels to a lawsuit filed against Nexus in July. Thompson said the goals of the lawsuits are twofold: “One, to hold [Nexus and Michels] accountable for specific damages that they’ve caused, and, two, so that in the future, a message is given to them that they can’t just do what they want and trample on the rights of the property owners.” Nexus spokesman Adam Parker said in an email that the company “doesn’t comment on pending lawsuits, but project representatives have been communicating with landowners for four years.
Two pipelines in Pennsylvania,Ohio rack up more than 800 violations - Two projects stretching across Pennsylvania and Ohio have been racing to build the largest natural gas pipelines in the world. But along the way, they have racked up over 800 state and federal permit violations, according to an analysis released by Reuters on Wednesday. Energy Transfer's Rover and Sunoco's Mariner East 2 pipelines will carry natural gas and gas liquids from Pennsylvania, Ohio and West Virginia — an area that accounts for more than a third of U.S. gas production, Reuters reports. However, these problems with the pipelines have state officials scrutinizing future projects and considering new laws. Problems with the Mariner recently inspired Pennsylvania legislators to craft bills to tighten construction regulations. “Any pipeline going through this area is going to face resistance which it would not have faced before,” said Pennsylvania State Senator Andy Dinniman, a Democrat, during an interview with Reuters. The Rover and Mariner violations included:
- Spills of drilling fluid, a clay-and-water mixture that lubricates equipment for drilling under rivers and highways;
- Sinkholes in backyards;
- Improper disposal of hazardous waste and other trash.
The Rover alone accumulated 681 federal violations and fines topped $15 million — a more exact breakdown of the Rover's violations can be found here.Reuters compared violations accumulated by the Rover and Mariner to four similar projects, and found that those projects averaged 19 violations each during construction. The pace of both projects have far exceeded industry norms and expenses. Construction of the 713-mile, $4.2 billion Rover started in March 2017, while work on the 350-mile, $2.5 billion Mariner East 2 started in February 2017.
Fracking's Next Boom? Petrochemical Plants Fuel Debate Over Jobs, Pollution - More than 100 people braved freezing temperatures to both listen and have their say in front of Ohio environmental officials at a recent hearing in Belmont County, Ohio. For the three dozen or so people who testified, the stakes were high. The hearing at Shadyside High School focused on a nearly 300-page, densely technical, draft air quality permit. The permit is one more step towards a massive, multi-billion dollar petrochemical plant proposed for the banks of the Ohio River just a few miles away from the auditorium. Like many at the hearing, Glenn Giffin, president of IBEW Local 141 in Wheeling, West Virginia, used his three minutes to voice a position not merely on the permit at hand, but what this facility could mean for the region. “It is a project such as this that will revitalize the Ohio Valley,” he said. Giffin and other supporters see a potential economic boom in the plant, called an ethane “cracker.” Its natural gas furnaces literally crack apart ethane — which is brought up during natural gas fracking — into smaller molecules used in plastics and chemical manufacturing. But Belmont County resident Jill Hunkler sees this plant as the beginning of something else: an environmental nightmare. “We want better options than a massive petrochemical plant,” Hunkler told the audience. Officially, the hearing was about a permit. But everyone gathered understood that much more is at stake. The growing abundance of natural gas could fuel a new petrochemical industry in the upper Ohio Valley, with all the economic gains and environmental risks that might bring. The decision on the cracker plant permit presents a crossroads moment for those who live here. A few years ago, Thailand-based PTT Global Chemical began scouting the Ohio Valley for a location to place a cracker plant. JobsOhio, a private economic development corporation created by Ohio Gov. John Kasich (R) in 2011 to help woo jobs to the state, worked closely with the company. Matt Cybulski, sector director of energy and chemicals for JobsOhio, said the group helped PTTG select the Belmont County location and put together an incentive package. That included remediation on the site of FirstEnergy’s old R.E. Burger coal-fired power plant that once stood at the proposed cracker’s location. Cybulski said incentives offered by JobsOhio did not use state tax dollars, but there are tax credits that “can and often are offered to projects like this.”
Perry, US DOE lend support to creation of petrochemical complex in Appalachia - — The US Department of Energy projects Appalachian Basin ethane production will surge to 640,000 b/d by 2025, more than 20 times 2013 levels, leading Energy Secretary Rick Perry to push for a petrochemical storage hub in the region. A 91-page report to Congress, which DOE published Tuesday, highlights the potential for the development of an ethane storage hub in the region to take advantage of the low-cost natural gas and natural gas liquids produced from the Marcellus and Utica shales. In comments made to the National Petroleum Council in Washington, Perry said the US needs to diversify its petrochemical infrastructure beyond Texas and Louisiana. He said an Appalachian ethane storage hub would complement, not compete with, Gulf Coast producers. "If the Appalachian region were its own country, it would be the third-largest gas producer in the world," Perry said. "The potential raw product is there, and they have particularly wet NGLs that can be separated, value added." The establishment of an Appalachian Basin ethane storage and distribution hub in the heart of the Marcellus and Utica plays "could provide benefits to the broader petrochemical and plastics industries along the lines of supply diversity," the report says. "The present-day geographic concentration along the Gulf Coast of petrochemical infrastructure and supply may pose a strategic risk, where severe weather events limit the availability of key feedstocks." According to the report, US NGL production is expected to nearly double between 2017 and 2050, supported by an increase in global petrochemical industry demand. The largest increases are expected to occur over the next 10 years, driven by crude oil and gas production from the Marcellus and Utica plays in the northeastern US and from the Permian Basin in the Southwest. By 2050, the two regions are forecast to account for more than 60% of total NGL production in the US, the report says.
Rick Perry: Appalachia will seize major share of global petrochemical market — Energy Secretary Rick Perry said Tuesday that Appalachia will help the U.S. gain a sizable share of the global petrochemical market because of the near-exponential growth in natural gas production the region has experienced in the past decade. “We have done good work in developing the abundance of the Permian Basin and the Gulf of Mexico — and there’s still much more we can do — but we also have a special opportunity in the Appalachian region,” Perry said in a speech at the annual National Petroleum Council Meeting. Perry said that, because of the low-cost resources in the Marcellus and Utica shales in West Virginia, Eastern Ohio, and Western Pennsylvania, the Trump administration would support an ethane storage hub located in the region. Perry quipped that, were Appalachia an independent country, “[it] would be the third-largest national gas producer in the world,” he said. Without a hub in the region, all of the natural gas liquids extracted from the shales are shipped elsewhere or burnt off, which removes potential economic profits or literally burns them in the air. Last summer, West Virginia, Ohio, and Pennsylvania officials formed an agreement, called the Tri-State Shale Coalition, to work together to collaborate to promote the region for shale gas-related investment first while still conducting a healthy competition for the location of the Appalachian Storage and Trading Hub that Perry’s report suggests should be built.
It's time to build an Appalachia energy hub - Rick Perry -- We can use Appalachia’s natural gas to propel progress even further. Appalachian gas contains additional valuable resources in the form of natural-gas liquids (NGLs). NGLs can be separated into familiar products like propane for heating or grilling, or less familiar commodities like ethane, which is a key feedstock for the petrochemical and plastics industries that make products we use every day. But we are not taking full advantage of the ethane in Appalachian natural gas, which is among the cheapest in the world. And in some cases, we actually are sending that advantage up in smoke by burning off “excess” ethane through a process called “rejection.” We should fully harness ethane and other byproducts of gas production to greatly expand value-added manufacturing in Appalachia. This would drive job creation and economic growth in an area that sorely needs it. There now are increasingly efficient ways to deliver these valuable material to a growing global market. Shell is building a $6 billon plant in Beaver County to “crack” ethane into useful building blocks. It will produce hundreds of jobs. This is just the beginning, for the region contains sufficient energy reserves to support additional crackers and provide thousands more petrochemical-related jobs. Doing so would necessitate creating a “hub” for processing and storage as well as the infrastructure to transport NGLs. Fortunately, nearly one-third of U.S. activity in petrochemicals now occurs within 300 miles of Pittsburgh, so the Appalachian region is strategically located. A hub in Appalachia would increase our national ethane supply and petrochemical production capacity in the coming years, increasing the economic vitality of the region and the resilience of the entire U.S. petrochemical complex.
Is This The Next Big Petrochemical Hub In The US? - The U.S. government wants to help build a petrochemical hub in Appalachia, one that could rival, or complement, the concentration of petrochemical facilities on the Gulf Coast. The shale gas bonanza over the past decade has led to a tidal wave of cheap natural gas, which has resulted in shuttered coal-fired power plants, new gas-fired generation and even LNG export terminals. It has also led to a proliferation of pipelines, processing facilities and chemical complexes.Much of the gas is coming from the Marcellus and Utica Shales, located in Pennsylvania, West Virginia and Ohio. While a lot of the gas is burned in the region for heating and electricity, the thousands of shale wells in the region are located far from the downstream facilities on the Gulf Coast that turn gas into plastics and fertilizers.However, that is set to change. Royal Dutch Shell gave the greenlight to a massive $6 billion ethane cracker facility just outside of Pittsburgh, one of a slew of planned petrochemical facilities for the region. Taken together, the chemical and petrochemical boom could turn Appalachia into a new “hub” of sorts of plastics and other petrochemical products. The federal government is hoping to egg this on. The Department of Energy just published a report for the U.S. Congress trumpeting the case for a new petrochemical hub. Shale gas production is growing so quickly that the industry essentially needs more uses for their product. Much of the gas in the Appalachian region is “wet gas,” which means that it comes with a relatively higher concentration of natural gas liquids such as ethane. All of that ethane can be a feedstock for plastics. To date, a few companies have built pipelines to transport natural gas liquids to the Gulf Coast and to Canada. Nevertheless, ongoing increases in both natural gas (methane) and NGL production (ethane and other liquids) has meant that “the amount of ethane contained in raw natural gas production streams has exceeded domestic demand or the ability to export it abroad,” the EIA wrote in a report earlier this year. “This situation has led producers to leave some of the ethane in the natural gas stream, up to allowable limits set by natural gas pipelines and distribution systems, and to sell it as natural gas, rather than recover and market ethane as a separate product.”
DEP reaches agreement over company’s 17,000 aging wells — A company that has bought up 17,000 aging oil and gas wells in West Virginia has reached an agreement with a state agency to monitor and plug many of them.The big question is whether that’s enough.Diversified Gas & Oil Corporation has received scrutiny in Appalachia’s gas-rich states for its business strategy of buying hundreds of aging wells from other companies.The concern has been that the many aging wells could strain Diversified, leaving it with enormous liabilities and, possibly, resulting in abandoned wells across the region.Pennsylvania regulators ordered three companies selling wells to Diversified to plug more than 1,000 of them.In West Virginia, Diversified announced a consent order with the Department of Environmental Protection on Tuesday.The state and the company agreed that of the wells Diversified has taken over, many are already considered non-producing and abandoned.But those wells haven’t yet been identified.The consent agreement concludes it’s in the best interest of the state to identify them and either placed back into production or plugged.“West Virginia has fostered a healthy environment for both Diversified and the natural gas industry,” stated the company’s chief executive officer, Rusty Hutson.West Virginia’s Surface Owners Rights Organization says the agreement doesn’t go far enough. “I have never been so disappointed in the DEP,” stated lawyer David McMahon, representing the organization. “Weak laws and unsuccessful enforcement policies have already led to 4,000 orphaned wells on farmers and surface owners across the state because the drillers of those wells have gone out of business.
More & More- Drilling Here, Fracking There, Crushing the Roads Overthere - Antero Resources Corp. has been issued permits for three Shiloh-Wick Field-Marcellus Shale ventures in Tyler County, W.Va. The permitted wells will be drilled from a drillpad on a 317-acre lease in Centerville District, Middlebourne 7.5 Quad. The Heintzman Unit 1H well has a planned depth of 17,800 ft and will be drilled to the south. The Heintzman Unit 2H well has a planned depth of 17,500 ft and will be drilled to the southeast. The Heintzman Unit 3H well has a planned depth of 17,400 ft and will be drilled to the east-southeast. Nearby production in the Shiloh-Wick Field is at an Antero Utica producer, Rymer Unit 4HD. It was completed in 2016 flowing 20 MMcf/d of gas. Ascent Resources LLC has received permits for four Utica Shale-Colerain Field wells in Jefferson County, Ohio. The wells will be drilled from a drillpad in Section 34, Mount Pleasant Township. The Ruth E MTP 2H well has a planned depth of 22,000 ft, and the Ruth E MTP 4H well has a planned depth of 22,000 ft. The Ruth E MTP 6H well has a planned depth of 22,500 ft, and the Ruth E MTP 8H well has a planned depth of 23,000 ft. Ascent Resources LLC is underway at two Jewett Consolidated Field wells in Jefferson County, Ohio. The Utica Shell wells are on a 378-acre lease in Section 18-8n 3w. The Geno E SMF JF 5H well has a planned depth of 24,300 ft and will be drilled to the northwest. The offsetting Geno W SMF JF 1H well has a planned depth of 26,000 ft, and it will be drilled to the north. Nearby production is at an American Energy Partners completion in Section 27 in the Dillonvale 7.5 Quad at the Smithfi eld A 1H-27 well. The Smithfield pad discovery was drilled to 18,525 ft (9,631 ft true vertical depth), and it was tested flowing 18.1 MMcf/d of gas. Southwestern Energy Co. has received permits to drill two Marcellus Shale tests from a drillpad in Ohio County, W.Va. The Roy Riggle OHI 6H well has a projected depth of 12,429 ft and a projected true vertical depth of 6,542 ft. It will be drilled to the northeast. The offsetting Roy Riggle OHI 206H well has a planned depth of 15,325 ft and a planned true vertical depth of 6,519 ft. It will be drilled to the southeast. The company also has received permits to drill Marcellus ventures in nearby Brooke County, W.Va., at the Worthley Brk 1H, Worthley 201H, Worthley Brk 210H and Worthley Brk 5H wells.
Man Alleges Fracking Company Considered Him Unmasculine --A West Virginia man filed a federal lawsuit against a fracking company, alleging his co-workers and supervisors verbally, physically and sexually harassed him because they did not believe he was masculine enough. George Keaton, of Clendenin, named two supervisors and Keane Group Inc., a Texas company, as defendants in the case filed in U.S. Western District Court of Pennsylvania in Pittsburgh. Keaton was employed through Keane’s Mount Pleasant, Westmoreland County, Pennsylvania, office, but traveled with a crew of men as an equipment operator for the company starting in October 2017. From the time he started through February 2018, when he quit, Keaton was subjected to harassment his lawyer called “egregious” and “well-below all measures of civility.” “Keaton was stripped of his dignity and threatened repeatedly with violence by his co-workers and superiors at Keane,” attorney Nicholas Pahuta wrote. “When he finally reached out to Keane administrators, he was told that he was lucky to still have a job.” “Explicitly,” Pahuta wrote, “he was singled out for this treatment because his co-workers did not think that he lived up their ideals of masculinity.” The suit alleged two supervisors and other crew members regularly used profanity and slurs toward him, threatened him with physical violence and repeatedly tried to punch him in the genitals. On one instance, a supervisor exposed his genitals to Keaton and tried to make him touch them, Pahuta wrote. That same man also allegedly threatened to sexually assault Keaton, according to the suit. Because the men were required to travel together, staying in the same hotel after working 15-hour days, Keaton was unable to get away from the harassment and began to suffer from depression, the suit alleged. When he tried to report the harassment to the Mount Pleasant office, Keaton’s calls went unreturned, the suit stated. He eventually made a report to the corporate office and after a meeting with human resources, was told that he was fortunate to have a job, Pahuta alleged.
He is West Virginia's Speaker of the House — and a lawyer for natural gas companies - Toward the end of this year’s legislative session, a little-noticed bill was moving through the West Virginia House of Delegates to limit legal challenges that had slowed new natural gas-fired power plants in the state.Delegate Roger Hanshaw, a Republican lawyer from Clay County who was serving as vice chairman of the Judiciary Committee, took to the floor to explain the legislation. “This bill is a little inside baseball to practitioners of environmental law in West Virginia,” explained Hanshaw, a supporter of the bill.It wasn’t the first time that Hanshaw engaged in some pretty effective legislative inside baseball on energy bills. Last year, Hanshaw engineered passage of a bill that gave natural gas companies a broad exemption from chemical tank safety standards that West Virginia put in place after a 2014 spill that contaminated drinking water for 300,000 people.Hanshaw was elected speaker in late August, succeeding Tim Armstead, who is now a justice on the West Virginia Supreme Court. Hanshaw is expected to be re-elected speaker in January. In the position, Hanshaw wields significant control over which bills are called up for votes and which are sent to committees to effectively die. When he’s not in the state Capitol, Hanshaw makes his living as an attorney with the Charleston-based firm Bowles Rice, where his clients have included natural gas companies and gas industry lobby groups. Over the last three years, he has represented the operator of a Fayette County natural gas waste disposal site in legal battles with state regulators and nearby landowners. He argued its case before the state Environmental Quality Board and the state Supreme Court. Then, he filed a brief on behalf of two industry groups when the case went to a federal appeals court.
Company Building West Virginia Pipeline Fined $122K for Environmental Violations - A company building a natural gas pipeline in West Virginia has agreed to pay $122,350 for environmental violations. The Charleston Gazette-Mail cited a consent order made public Monday in reporting that Columbia Gas Transmission agreed to pay the amount to the West Virginia Department of Environmental Protection for 16 violations while building the Mountaineer Xpress Pipeline. Columbia Gas Transmission is a subsidiary of TransCanada and will operate the Mountaineer Xpress Pipeline when it’s completed. TransCanada spokesman Scott Castleman said the company implemented measures to address each environmental issue as it arose and has accepted the draft consent order. The pipeline is one of many being built in the region and would run 170 miles (274 kilometers) from Marshall County to Wayne County.
Mountain Valley Pipeline protests continue - — Another pipeline protester in Monroe County was found attached to a piece of heavy equipment at a work site on the Mountain Valley Pipeline (MVP). A protester climbed and locked themself to a boom tractor, about 20 feet in the air, as supporters gathered nearby, according to Appalachians Against Pipelines. Hanging from the equipment was a banner reading “ANTIPATRIARCHY, ANTIPIPELINE.” The protest was staged on Ellison Ridge, north of Lindside and West Virginia State Police troopers were on the scene working to get the protester down. On Nov. 19, a protester was perched on top of an excavator at an MVP work site on Rt. 219 in Lindside all day. West Virginia State Police eventually removed the protester, identified as Steffi Alexandra Klosterman, 25, of Morgantown. The Monroe County’s Magistrate Office in Lindside said she was charged with obstructing an officer, trespassing, injuring or tampering with a vehicle, and littering. Klosterman was released on a $3,500 bond the same day. A series of protests against the 300-mile MVP, which is operated by Pittsburgh-based energy company EQT Midstream Partners and slated to transport natural gas through a 42-inch diameter pipe from north central West Virginia to Chatham, Va., has been ongoing since construction started last year. Three people fastened themselves to equipment at the same site of last week’s protest where the pipeline crosses underneath Rt. 219 in Lindside. A few miles south on Peters Mountain, two tree sitters were perched in makeshift tree stands in the path of the pipeline for weeks earlier this year, leaving only after food and water supplies were cut off.
Congress considers changing law for pipeline crossing of Appalachian Trail, Blue Ridge Parkway -- Legislation is pending in Congress that would give the National Park Service clear authority to allow construction of the Atlantic Coast Pipeline beneath the Appalachian Trail and Blue Ridge Parkway, both potentially critical obstacles under litigation pending in the 4th U.S. Circuit Court of Appeals. Dominion Energy, lead partner in the $7 billion project, confirmed the legislative proposal, which first surfaced in a blog post from an Alabama group that suggested aid for the 600-mile natural gas pipeline is “tucked into the omnibus spending bill” being negotiated by Sen. Richard Shelby, R-Ala., chairman of the Senate Appropriations Committee. “Congress is considering a legislative amendment that would explicitly authorize the park service to grant a permit for such a crossing,” Dominion spokesman Aaron Ruby said in an emailed statement to the Richmond Times-Dispatch. The park service has twice issued permits for the pipeline to cross the parkway, the second one after the 4th Circuit vacated the original permit in early August as an “arbitrary and capricious” exercise of the agency’s powers. The 4th Circuit has issued a stay of the permit the U.S. Forest Service issued for the pipeline to cross the Appalachian Trail on land within the George Washington National Forest, which is under appeal in the Richmond-based court. “It’s disappointing but not surprising that Dominion would try to bend the law to its will,” said Austin “DJ” Gerken, an attorney for the Southern Environmental Law Center, which has appealed both federal permits for the Sierra Club and other environmental organizations opposed to the pipeline. “It’s already tried to bend the agencies to its will.” Few details about the legislative proposal emerged Monday, but a spokeswoman for Sen. Tim Kaine, D-Va., doubted its chances. “We are aware of the proposal, but Senator Kaine does not support it,” “We have no indication Senate Democrats would agree to this going in the omnibus.”
Atlantic Coast Pipeline hits another speed bump in Nelson County - Dominion Energy’s Atlantic Coast Pipeline project hit a speed bump after the Nelson County Board of Zoning Appeals voted Monday to deny four variance requests needed to construct part of the 600-mile Atlantic Coast Pipeline through designated floodplain areas in Nelson County. The board’s denial in a 3-2 vote Monday means construction of the pipeline in certain areas of Nelson County will be on hold until ACP can gain the necessary approval to build through designated floodplain areas. The four floodplain areas discussed included Muddy Creek, an unnamed tributary of Rockfish River, Falls Run and Dutch Creek. ACP has not started full construction in Virginia yet and is awaiting approval from the Federal Energy Regulatory Commission. Felix Sarfo-Kantanka, Jr., external affairs manager for the Dominion, lead partner of the ACP, said it plans on starting construction in early 2019. Sandy Shackelford, director of planning and zoning in Nelson County, said ACP now has two options to move forward with the variance requests. “They can appeal the decision through the circuit court or go through the federal court to determine if the county’s decisions would be preempted by federal regulatory decision makers,” Shackelford said Wednesday. Karl Neddenien, media relations manager for Dominion Energy, said in an email he could not comment on the company’s specific next steps after the decision by the BZA. “We are disappointed with the board’s decision and we are evaluating our next steps,” Neddenien said. In Nelson County, securing the variances is a necessary step before the pipeline can be constructed in designated floodplain areas. The ACP sought variances from the BZA because according to a Nelson County zoning ordinance passed in September 2017, the pipeline would qualify as a “critical facility” that normally would not be allowed to be constructed in a floodplain.
Citizen group's challenge of Murrysville's fracking ordinance to stretch into 2019 - A fight over fracking in Murrysville — a battle already approaching a decade in the making — will continue into 2019, as a group of residents challenged the validity of a local ordinance pertaining to unconventional gas drilling in the well-heeled Westmoreland County community. “This ordinance was not drafted to serve the interests of Murrysville residents,” said John Smith, a Pittsburgh attorney representing the Murrysville Watch Committee, the group opposing the ordinance municipal officials approved in May 2017. “It was not done to ensure the public’s health, safety and welfare. It was done so that Murrysville wouldn’t get sued by the drillers.”The resident committee outlined its challenge before the Murrysville zoning hearing board on Nov. 29. Hearings will continue Jan. 24. Multiple attorneys for the municipality, landowners who support fracking and a regional driller explained why the ordinance should be left as-is. Murrysville council members voted 6-1 last year to approve their fracking ordinance,which they fine-tuned, re-examined and tweaked over seven years. Monroeville drillers Huntley & Huntley soon after requested state permits to drill a 4-acre well pad and access road on 71 acres in eastern Murrysville. In developing the ordinance, Murrysville officials created an overlay district where drilling could take place. It was added to rules governing existing rural-residential zoned land and encompasses a little more than a third of the municipality. Setbacks and other restrictions, however, shrink drilling opportunities to 6 percent of properties within Murrysville’s boundaries. Smith’s argument centered on drilling as an industrial activity, questioning why it would be permitted anywhere in a rural-residential district. “Apartments are not permitted in a rural-residential district … a senior nursing-care home is not permitted,” Smith said. “So a driller couldn’t have an apartment there, but could have an industrial drill rig.”
Allegheny Township property owners taking fracking fight to Pa. Supreme Court - Allegheny Township property owners are asking the Pennsylvania Supreme Court to appeal a ruling that allows unconventional gas drilling in all of the township’s zoning districts. The plaintiffs are asking the Supreme Court to review a Commonwealth Court ruling that they believe infringed on their “fundamental and constitutionally-protected property and environmental rights.” The appeal was filed Nov. 26 by the plaintiffs and Willowbrook Road residents Dolores Frederick, Patricia Hagaman and Beverly Taylor. The defendants include Allegheny Township, its zoning hearing board, CNX Gas Co. and other township residents. They have been challenging a series of court rulings stemming from CNX Gas Co. in October 2014 winning approval to install an unconventional natural gas well pad, which is used in fracking, within 1,200 feet of township homes. The gas well pad site is on the property of a neighboring farm owned by John and Anne Slike and Northmoreland Farms LP, who are among the defendants in the case. Specifically, the plaintiffs take issue with Allegheny Township’s enactment in 2010 of a zoning ordinance amendment providing for oil and gas drilling operations in all of the township’s zoning districts. They have argued that the intensive hydraulic fracturing process — fracking — and horizontal drilling used to tap deep gas reserves constitute an industrial use.
Homeowners along gas pipelines in Lebanon, Berks counties shocked to find threats of liens in mail - Fallout from the bankruptcy of Welded Construction, the main contractor in two local gas pipeline projects, has ensnared landowners in Berks and Lebanon counties with the threat of liens on their properties.Lancaster County residents are wondering if they could be next.Three homeowner couples and the Twin Valley School District near Morgantown, Berks County, were astounded to find legal letters in their mailboxes recently.The letters were from United Piping Inc., a Minnesota-based subcontractor that says it has not been paid by Welded for work on the controversial Sunoco Mariner East natural gas liquids pipeline that runs through their properties.United Piping was giving the property owners formal notice of the company’s intent to go to Berks County court within 30 days to file “mechanics liens” on their land. “When I saw I was on the hook for a half-million dollars, my stomach was on the floor,” recalls David W. Anspach III, a Caernarvon Township, Berks County, resident who grudgingly granted a right of way for the pipeline near his home. In Lebanon County, meanwhile, Dykon Blasting Corp. — an Oklahoma subcontractor that worked on the Atlantic Sunrise gas pipeline and says it has not been paid by Welded — has mailed similar legal letters to landowners. Sent by McNees Wallace & Nurick, the Lancaster law firm representing Dykon, the letters note that every property owner along the pipeline’s path in Lebanon County is facing liens. The legal action to pursue liens against property owners has its roots in the October decisions by the two pipelines’ builders to sue their main contractor, Ohio-based Welded Construction. Atlantic Sunrise builder Williams Partners of Oklahoma withheld $23 million in payments to Welded, alleging overcharges, accounting failures and contract breaches.Sunoco, owner of the Mariner East pipeline, also terminated its contract with Welded, alleging the company failed to comply with environmental regulations. Weeks later, Welded declared bankruptcy. That left some of its own suppliers and subcontractors — including United Piping and Dykon Blasting — unpaid.
Mariner East pipelines: Judge reviews request for immediate shutdown - An administrative law judge for the state Public Utility Commission heard testimony this week on whether Sunoco can operate its controversial Mariner East pipelines — a set of export lines moving natural gas liquids across Pennsylvania — while the judge reviews a request to permanently shut down the lines.Seven residents of Chester and Delaware counties filed a petition for emergency relief last week, arguing Sunoco has failed to address public concern around what would happen in the case of an emergency leak. The petitioners also filed a “Notice to Defend,” which asks the PUC for a permanent shutdown.The Mariner East project has faced numerous technical, legal, and environmental problems. It is made up of three parallel natural gas liquids lines — the Mariner East 1, the Mariner East 2, and the Mariner East 2X. The PUC temporarily stopped service on the Mariner East 1 line earlier this year, citing safety concerns related to sinkholes, and saying that a pipeline leak could have a “catastrophic” effect on public safety.PUC administrative law judge Elizabeth Barnes said she intends to render a decision on the residents’ emergency relief petition by Dec. 10 or 11. The residents’ attorney, Michael Bomstein, said a leak in the heavily populated areas in southeastern Pennsylvania could be devastating, and the company’s public notices have been “inadequate, misleading and contradictory.”“They make the assumption people can evacuate on foot, when there are a lot of people who are just unable to do that,” he said. “They also tell people to proceed to a safe location, without telling them what’s safe.” Under cross examination by Bomstein, Zurcher said in the event of a leak, it’s impossible for a pipeline operator to dictate a set distance away from the pipeline that is safe, given the complexities that could be presented by scenarios such as weather conditions, topography and the size of the leak. Instead, he said, it’s the role of emergency responders to direct people what to do in the event of an incident.
Adelphia wants to build 2 compressor stations in eastern Pa. - Adelphia Pipeline Co. is seeking approval to build two compressor stations in eastern Pennsylvania as part of its Adelphia Gateway project, Kallanish Energy reports. The compressor stations are planned in Delaware and Bucks counties. The company also wants to convert 50 miles of an old 84-mile oil pipeline to move natural gas. A total of 34 miles of the line were converted to natural gas in 1996, and that section of the pipeline furnishes natural gas to two power plants. The 18-inch pipeline runs through five counties: Delaware, Chester, Bucks, Montgomery and Northampton. The project would provide an additional 250 million cubic feet per day (Mmcf/d) to the Philadelphia area, enough natural gas to heat 250,000 households. The original pipeline, built in the 1970s, moved oil from Marcus Hook near Philadelphia to a terminal in Northampton County. It was then used to power the Martins Creek Steam Electric Station. The power plant now burns natural gas. The company’s request is being reviewed by the Pennsylvania Department of Environmental Protection. It held public air quality meetings on Tuesday night in Delaware and Bucks counties.
Delaware County study: Pipeline blast could be devastating, but risk is low -- A worst-case explosion of the Mariner East 2 pipeline in Delaware County would kill anyone within about a mile of the rupture, a new report says, but it concludes the chances of someone dying from a pipeline incident are less than that of dying in a car crash or from falling down stairs.The report says that a flammable vapor cloud could extend 1.3 miles downwind from the point of a full rupture, and calculated that there was a 100 percent probability of dying from a blast over a certain intensity for everyone within a mile radius, whether they were outdoors or indoors.And it said the chances of a natural gas liquids leak igniting from the Sunoco pipeline are higher in a densely populated area like Delaware County than they would be in a rural area, because of the higher number of potential ignition sources like cars, cellphones or doorbells.The size and direction of a flammable vapor cloud would depend on wind speed and atmospheric stability, the report said. "The dispersing flammable cloud could ignite at any point in time and the time of ignition, with respect to the changing size of the flammable cloud means that the resulting consequence can vary greatly," said the report, written for Delaware County Council by G2 Integrated Solutions, an independent consultant.Worries about ME2's safety have been fueled by a long series of drilling-fluid spills and geological problems since the multibillion-dollar pipeline started construction in February 2017, prompting state regulators to issue dozens of violations. Federal data show Sunoco with the second-highest number of pipeline incidents in the industry. Despite its grim predictions, the study concluded that the risk of fatality from such a pipeline incident was in the same category as common sources of risk facing the general population daily.
Construction begins on South Jersey pipeline tied up in court - As Adam Neuman’s wife left her home for work Monday morning, she texted him a photo: a truck filled with sections of 30-inch pipes driving down the street. The couple lives on Fischer Road in Plumsted Township, Ocean County, where construction on the Southern Reliability Link pipeline is now beginning, despite it being tied up in the state’s appellate court. At issue is whether a portion of the controversial project can be built in the Pinelands, New Jersey’s largest nature reserve. “I’d rather have seen the appeals heard before they broke ground,” said Neuman, who lives across the street from where the line is being constructed. New Jersey Natural Gas received final approval in 2017 for the 28-mile pipeline, which will run through Burlington, Ocean and Monmouth counties and portions of the Pinelands. It has been given the greenlight from the Pinelands Commission, the Board of Public Utilities and the state Department of Environmental Protection, as well as municipalities it will cut through. But environmental groups, including the New Jersey Sierra Club and Pinelands Preservation Alliance, appealed both decisions in the Appellate Division of New Jersey’s Superior Court. A little more than 12 miles of the pipeline’s route runs through the reserve. “Why start building now?” asked Carleton Montgomery, president of the Pinelands Preservation Alliance. “It may well be found unlawful.” The organization plans to ask the BPU and Pinelands Commission this week to issue stays of their prior approval to halt construction.Kevin Roberts, spokesman for New Jersey Natural Gas, said the company is beginning work now to minimize the impact of construction on seasonal local businesses and farms along a section of the pipeline’s route. Crews this week will be doing drilling and open trench work, as well as staging the distribution pipes. “The pending litigation does not preclude us from beginning construction on the project.”
Mysterious Oil Spill on Massachusetts’ Charles River Spurs Major Emergency Response An oil spill on Massachusetts' Charles River drew a major emergency response Wednesday night, as several fire trucks and emergency vehicles, including a hazmat team, raced to help with the cleanup, 7 News Boston WHDH reported.The spill was detected in Waltham, MA, a town about 12 miles west of Boston. Authorities were alerted by a report of the smell of fuel coming from a patch of river behind Shaw's Supermarket, state police said."The truck got down here with the deputy and they had a strong odor of oil and a definite sheen in the water," Waltham Fire Chief Tom MacInnis told Boston25News.Containment booms were placed on the river to stop any oil from spreading downstream. The Massachusetts Department of Environmental Protection (DEP) also arrived on the scene, and the private cleanup organization National Response Corp. was called in to assist Wednesday into Thursday, The Boston Globe reported."We don't know how much has spilled," DEP spokesman Ed Coletta told The Boston Globe. "Oil like this, it basically collects at the surface of the water."In total, cleanup crews vacuumed up around 300 gallons of mixed oil and water, NBC10 Boston reported.The spill was contained by 8 p.m. Wednesday night, but DEP and the Waltham police and fire departments continued to investigate the source of the spill, Boston25News reported."How does an oil spill happen here?" local resident Maureen Green asked Boston25News. Green said she was especially worried about the wildlife. "There are so many ducks and geese in this area. I take all the kids that I watch down here and we feed the ducks," she said.
FERC gives Portland Xpress environmental OK - The US Federal Energy Regulatory Commission (FERC) gave a positive environmental assessment for the 24.4mn cf/d (689,813 m³/d) Portland Xpress natural gas pipeline project in the New England region. FERC staff concluded that the project on the Portland Natural Gas Transmission System in Maine and Massachusetts would not significantly affect the environment as long as the pipeline undertakes appropriate mitigating measures. In addition to boosting capacity on Portland Natural Gas' own facilities, the $90.3mn expansion will also increase capacity by 22.3mn cf/d on a system it jointly owns with Maritimes & Northeast pipeline from Westbrook, Maine, to Dracut, Massachusetts. The project's capacity is relatively small, but the added flows could be significant for end users in the New England region. The area often experiences power disruptions and soaring natural gas prices in times of cold weather because of gas pipeline constraints. Encana in May permanently shuttered its Deep Panuke drilling platform off the coast of Nova Scotia, removing what once was a key source of flows into the region from Canada. Net flows on Maritimes & Northeast pipeline at the border, which interconnects with Portland Natural Gas, have since flipped to serve Canadian demand. The project includes the installation of a new compressor unit at the Eliot compressor station in York County, Maine, and modifications to infrastructure at the Westbrook compressor station and Dracut metering and regulating station in Cumberland County, Maine, and Middlesex County, Massachusetts, respectively. The expansion includes three phases and is planned to begin full service in November 2020. Receiving an environmental assessment or environmental impact statement is the final step for pipeline projects before FERC makes a final decision on whether to approve the project.
US natural gas proved reserves increase to record levels— Stronger oil and natural gas prices, combined with development of shales and low permeability formations, lifted U.S. crude oil and natural gas proved reserves to record levels in 2017. That’s according to U.S. Crude Oil and Natural Gas Proved Reserves, Year-End 2017, released by the U.S. Energy Information Administration (EIA). Proved reserves of crude oil in the United States increased 19.5 percent from year-end 2016, rising to 39.2 billion barrels and surpassing the previous peak level of U.S. crude oil proved reserves of 39.0 billion barrels set in 1970. Proved reserves of natural gas increased 36.1 percent to 464.3 Tcf at year-end 2017 and breaking a 2014 record for total natural gas proved reserves. Both U.S. proved reserves of crude oil and natural gas are approximately double their levels from a decade ago. The annual average spot price for natural gas at Louisiana’s Henry Hub increased 21 percent in 2017. Natural gas spot prices throughout 2017 (at the Henry Hub) did not vary much from the annual average price of $2.99 per million British thermal units (MMBtu). The U.S. total net increase in proved reserves of natural gas was 123.2 trillion cubic feet, or 36.1 percent, for a total of 464.3 trillion cubic feet. U.S. production of natural gas increased 4 percent from 2016. Producers in Pennsylvania added 28.1 trillion cubic feet (Tcf) of natural gas proved reserves, the largest net increase of all states in 2017, as a result of increased prices and development of the Marcellus and Utica shale plays. After regions in Texas and Louisiana, the fourth- and fifth-largest net increases in natural gas proved reserves occurred in West Virginia and Ohio (11.1 Tcf, each), respectively, as a result of development of the Marcellus and Utica shale plays. The share of natural gas proved reserves from shale increased from 62 percent of total U.S. natural gas proved reserves in 2016 to 66 percent in 2017. Estimated production of natural gas from shale increased 9 percent — from 17.0 Tcf in 2016 to 18.6 Tcf in 2017. Extensions and discoveries of natural gas reserves were highest in Pennsylvania and West Virginia at 21.6 Tcf and 13.7 Tcf, respectively. These were from extensions in the Marcellus shale play, the largest natural gas shale play in the United States by volume of reserves.
Prices Rise As Storage Levels Continue To Expand Yearly And 5-Year Average Storage Deficits - Highlights of the Natural Gas Summary and Outlook for the week ending November 30, 2018 follow. The full report is available at the link below.
- Price Action: The now prompt January contract rose 25.7 cents (5.9%) to $4.612 on a 73.8 cent range ($4.776/$4.03.8.
- Price Outlook: Despite the weekly increase, early prices weakness actually established a new weekly low as weather forecasts moderated and the EIA reported a much lower than expected storage withdrawal. The market is extremely sensitive to change weather forecasts and will remain volatile. If temperatures remain below normal, last weeks’ $4.929 high will likely not be the high. However, forecasts now project above normal temperatures at the end of the forecast and a continuation of above normal temperatures will lead prices lower. CFTC data indicated a 26,610 contract increase in the managed money net long position as longs added and shorts covered. The is the smallest short position on record for comparable data. Total open interest fell (302,354)to 3.829 million as of November 27. Aggregated CME futures open interest fell to 1.264 million as of November 30. The is the smallest CME OI since February 20, 2017. The current weather forecast is now cooler than 6 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 3.2 bcf. Cove Point is net exporting 0.8 bcf.
- Weekly Storage: US working gas storage for the week ending November 23 indicated a withdrawal of (59) bcf. Working gas inventories fell to 3,054 bcf. Current inventories fall (639) bcf (-17.3%) below last year and fall (727) bcf (-19.2%) below the 5-year average.
- Supply Trends: Total supply rose 0.9 bcf/d to 81.4 bcf/d. US production rose. Canadian imports rose. LNG imports rose. LNG exports rose. Mexican exports fell. The US Baker Hughes rig count fell (3). Oil activity increased +2. Natural gas activity decreased (5). The total US rig count now stands at 1,076 .The Canadian rig count fell (5) to 199. Thus, the total North American rig count fell (8) to 1,275 and now exceeds last year by +124. The higher efficiency US horizontal rig count rose +5 to 934 and rises +142 above last year.
- Demand Trends: Total demand fell (7.4) bcf/d to +89.9 bcf/d. Power demand fell. Industrial demand fell. Res/Comm demand fell. Electricity demand fell (5,039) gigawatt-hrs to 72,136 which exceeds last year by +2,633 (3.8%) and exceeds the 5-year average by 173 (0.2%%).
- Nuclear Generation: Nuclear generation rose 3,848 MW in the reference week to 86,512 MW. This is (4,702) MW lower than last year and (1,295) MW lower than the 5-year average. Recent output was at 89,937 MW.
The heating season has begun. With a forecast through December 14 the 2018/19 total cooling index is at (827) compared to (713) for 2017/18, (509) for 2016/17, (495) for 2015/16, (743) for 2014/15, (821) for 2013/14, (659) for 2012/13 and (667) for 2011/12.Natural Gas Summary and Outlook for the week ending November 30, 2018
Mid-December Warmth Crushes Gas -- It was a bloodbath at the front of the natural gas curve today, as after a decent gap down last evening the January contract accelerated lower through the day. A bounce into the settle helped prices close decently off the lows, but the January contract still settled 6% below Friday's close. All the losses came at the front of the natural gas strip, as the from April 2019 and beyond prices actually caught a bit today. The role of weather was clear with the January contract logging the biggest loss as well. Over the weekend we saw long-range warm risks roll forward into the medium-range, as we noted in our Morning Update that Week 2 warmth would likely cancel out Week 1 cold. This fit very well with our expectations, as the overall 15-day forecast did not change much from our Friday outlook for clients either. In our Pre-Close Update we warned clients that we expected bearish weather trends over the weekend as long-range warmth would roll forward. In that same Pre-Close Update we warned of prices likely moving back below $4.5 this week, something that quickly occurred last evening. The focus today was all about that long-range warmth, with Climate Prediction Center forecasts increasing coverage of expected above average temperatures in Week 2. Meanwhile, we did see cash prices remain a bit more firm today with cold expected across the country this week. All eyes will be on the cash market tomorrow too with significant cold expected Wednesday.
Another Round Of Storage Concerns Get Gas Going -After significant selling yesterday the entire natural gas futures curve got a bid today, with significant gains at the front of the strip. By the end of the day the January natural gas contract settled up just less than 3%, solidly in the middle of its recent range. It was clear early in the day that storage concerns were front and center as the March contract got going first, dragging the rest of the strip higher. We highlighted this in our Morning Update, where we outlined that "...a bit more March contract strength indicates that storage concerns are back elevated...thus we cannot rule out bounces towards $4.5 short-term..." even though overnight models did not significantly increase cold risks in the next two weeks. Afternoon Climate Prediction Center forecasts highlighted this too, as warm risks seemed to tick down slightly but day-over-day forecast changes were minimal. Yet a key climate model trended far colder early in January last evening which seemed to first get prices moving higher, and they never looked back. In our Seasonal Trader Report for subscribers today we outlined our winter weather expectations through March, explaining when cold could return after mid-December warmth and demonstrating our forward natural gas storage expectations. Of note was strength seen along the 2019 natural gas curve as of yesterday's settle which continued today. Certainly weather will be a central focus moving forward, as traders are looking for hints of when cold could return in the long-range as well as how intense any warmer weather in the longer-range is likely to be.
Warmer Mid-December Trends Send Gas Back Lower -- It's been quite the back-and-forth in the natural gas market this week, with colder short-term trends and tightening balances helping prices bounce early but warmer trends later in the month keeping prices in check. With some warmer overnight trends the January natural gas contract settled down over 3% on the day for its lowest settle of the week. Losses were largest at the front of the strip, a sign that weather was a key driver today. In our Afternoon Update yesterday we shifted our natural gas sentiment to "Slightly Bearish" citing long-range warm risks and technical signals that were flashing more bearish risks. This was reiterated in our Morning Update where we highlighted that $4.25 was "back in play" off long-range warmth, with European model guidance losing a solid number of GWDDs overnight. Prices got within 2 cents of that level, eventually bouncing on some colder afternoon guidance. The Climate Prediction Center picked up on some of these warm risks in their long-range forecasts this afternoon. Colder trends in the Southeast on afternoon American GEFS guidance helped give prices a bid later in the day though (images courtesy of Tropical Tidbits). Now, traders are gearing up for tomorrow's EIA print while also trying to guess how weather model guidance will shift over the weekend. In our Note of the Day for clients today we took a deeper look at climate guidance, including American CFSv2 and Japanese modeling. We noted the continued warm bias on the CFSv2 model, but we also saw it finally trend colder for January in its most recent run, a trend that should continue on its output tomorrow too.
January Natural Gas Shrugs Off 63 Bcf Storage Withdrawal - The Energy Information Administration (EIA) reported a 63 Bcf withdrawal from Lower 48 natural gas inventories for the week ending Nov. 30, on the higher end of market expectations but within the range. Market observers characterized the draw as “neutral” as estimates had clustered around a withdrawal in the low to mid-60 Bcf range ahead of the report’s 10:30 a.m. ET release. Nymex natural gas futures similarly reflected a neutral stance on the data as the January contract had already climbed about 12 cents ahead of the report, and then only inched up another penny or so to $4.457 as the print hit the screen. By 10:50 a.m., the prompt month was trading at $4.458, up 13.1 cents on the day. “This moderately tighter print misses in about the same direction as last week’s print missed loose; we had expected slightly more lingering holiday impact in the number and were surprised by the size of the draw in the South Central,” Bespoke Weather Services said. In fact, a larger 9 Bcf draw in the South Central accounted for almost the entire miss, the firm said. “We see this as indicating the market is slightly tighter than we had been expecting, and are looking for a tighter number to be announced next week with production off solidly over the last few days,” Bespoke chief meteorologist Jacob Meisel said. This should make it harder for prices to fall off meaningfully unless long-range cold risks ease as such a print will keep storage concerns elevated, “and we would be surprised to see next week’s print do much to ease those concerns,” he said. The EIA reported a 26 Bcf withdrawal in the East, a 24 Bcf pull in the Midwest and a 9 Bcf draw in the South Central region. Salt caverns in the South Central region, however, reported a 4 Bcf injection. Inventories as of Nov. 30 sat at 2,991 Bcf, 704 Bcf below year-ago levels and 725 Bcf below the five-year average, according to EIA. Even though this week’s storage report failed to move the needle much, colder weather is expected in the next few weeks. The risk to upside is certainly there, market observers said. If long-range weather models that are currently showing a return to colder weather come to fruition, then the February contract could move into $5 territory, according Wood Mackenzie natural gas analyst Gabe Harris.
Analysis- Midwest utilities hoard storage, despite cold, demand — Risk-averse storage holders in the US Midwest appear to be hoarding their inventory so far this withdrawal season, despite cold weather, strong gas demand and historically high prices. Over the past three weeks, withdrawals in the region have averaged 2.1 Bcf/d, which compares to a five-year average withdrawal rate over the same period at 2.8 Bcf/d, S&P Global Platts Analytics data shows. This year, though, early winter weather across the Midwest has been colder than usual. Over the past 30 days, population-weighted temperatures have averaged about 8 degrees Fahrenheit below normal. As a result, gas demand led by the residential-commercial sector has been stronger, too. In the past month, total demand averaging 17.8 Bcf/d has outpaced the prior five-year average by 3.1 Bcf/d, or about 21%. EVENTS North American Gas Winter Outlook Webinar | 9-10 am CST Tuesday, December 18, 2018 Join S&P Global Platts Analytics for a North American natural gas outlook webinar to learn about our expectations for this winter and how it compares with last winter. If elevated demand weren't enough to incentivize more hefty draws on storage this season, consider that the recent rally in the cash market has lifted gas prices at Chicago and other Midwest hubs by nearly $1/MMBtu over the past month, S&P Global Platts data shows. Despite mounting incentives to drawdown stocks, it appears that end users and utilities are hoarding their inventory as they hedge against this winter's coldest, highest demand gas days that lie ahead. A recent and preliminary analysis of this year's storage activity shows that many inventory holders are sticking to a conservative strategy this year, according to Platts Analytics. Through late November, that strategy was particularly notable in the South Central and Midwest regions. Given this season's record-low storage levels, the supply risk posed by abnormally cold weather is outsized compared with previous winters. Last January, a series of snow and ice storms lifted Midwest gas demand to multi-year highs in the upper 29 Bcf/d range, and briefly to almost 32 Bcf/d -- the fourth highest on record. During those events, single-day draws on storage approached and even topped 15 Bcf, severely drawing down available inventory to manage cold weather that came much later in the season and even into April.
A Little Cold Risk And Nat Gas Soars - It was a bullish end of the week for natural gas prices, as the very end of European weather model guidance showed marginally more favorable upstream conditions for cold and that was all it took for prices to shoot almost 4% higher on the day. It was another day where the March contract led the charge higher as well, something we again highlighted in our Morning Update seemed to skew short-term risk higher. These came even as weather model guidance lost GWDDs over the next two weeks, indicating the market is more focused on what comes down the road instead of the warmth that has already been identified. In our Weekly Update published Monday, we highlighted that warmth would likely intensify through the week and put at least $4.25 in play. That was hit again last night, and likely would have broken and put the $4 lower level in play if not for the long-range -EPO that arrived on European ensemble guidance. Climate Prediction Center guidance showed how confidence in this Week 2 warmth increased yet again today, something we had highlighted in that Weekly Update would be a trend through the week. This came after our Friday Pre-Close Update last week warned of "Slightly Bearish" weather trends and that gas prices were likely over-valued above the $4.5 level, allowing clients to position for this recent move lower. Yet consistently we also cautioned prices can spike on the first sign of cold; it remains early, and GWDDs are likely to remain below average through December 21st, but in our Morning Update we highlighted that Week 3 changes had turned bullish and 12z model guidance risks were less bearish, which verified well with gas prices up just .2% at the time. An in-line EIA storage announcement today also did little to stunt the rally, as we were looking for a solidly smaller withdrawal than the 63 bcf withdrawal that was announced today. This ended up being a bit tighter than the previous EIA print as it included less Thanksgiving holiday demand destruction. No doubt part of today's rally was positioning in case end of December cold weather risks increase over the weekend. In our Pre-Close Update today, we highlighted those risks and how we expected them to change over the weekend.
Coast Guard responding to sunken vessels, oil discharge on Ohio River — The Coast Guard is responding to diesel fuel discharging from two sunken vessels on the Ohio River near Greenup, Kentucky, according to a news release from the Marine Safety Unit Huntington. Personnel from MSU Huntington are conducting assessments of potential environmental and waterway impacts as well as determining how much oil is being discharged, according to the release. In addition, Clean Harbors, an oil spill response organization, is en route with hard boom to contain the spill. The Coast Guard, Kentucky Department of Environmental Protection and Ohio Environmental Protection Agency have established a Unified Command to direct response and mitigation operations, according to the release.
Snyder scraps plan to put Line 5 tunnel under bridge authority - – The Snyder administration has scrapped plans to put a proposed Line 5 tunnel under the control of the Mackinac Bridge Authority and is scrambling to draft legislation to create a new entity for that job, a key senator confirmed Monday.The move comes after the Republican-controlled Senate heard strong opposition to putting the controversial tunnel under control of the bridge authority, which Gov. Rick Snyder had hoped would approve the new role at a meeting this year.The decision also comes as incoming House Speaker Lee Chatfield, R-Levering, came out Monday against putting the proposed tunnel under bridge authority control, saying it could be a distraction from the authority's primary role. It's important for both Snyder, a Republican, and Enbridge, the Canadian oil transport giant that owns the pipeline, to enshrine the deal by the end of 2018. On Jan. 1, 2019, Democratic Gov.-elect Gretchen Whitmer and Attorney General-elect Dana Nessel take office. Both oppose the tunnel plan and want to shut down Line 5, because of concerns about the potential for an environmentally catastrophic spill.
MDEQ grants permit for Enbridge Energy to install 48 new anchor supports on Line 5 | Michigan Radio - Enbridge Energy has been granted its request for a permit to install 48 new anchor supports on Line 5, which runs under the Straits of Mackinac. The company says the new supports are a proactive measure meant to ensure the pipeline is supported every 75 feet along the lakebed in the future. At a public hearing earlier this year, environmental groups testified against the request. They say so many supports make the pipeline an entirely new structure. They want the pipeline shut down. But Governor Snyder agreed to a deal with Enbridge for the construction of a tunnel and new section of pipeline under the Straits. Enbridge says anchor supports are a key part of its maintenance program for the current pipeline, and further increase overall safety.
Michigan GOP pushing in lame duck for tax cuts for oil and gas companies -- The latest controversial bill in Michigan Republicans' ongoing lame duck blitz would give the state's oil and gas companies a tax cut.House Bill 6485 would provide oil companies with a cut worth about $4 million to $5 million annually, and would be retroactive to 2012.The bill, according to an independent legislative analysis, would "exclude certain costs and allowances related to oil and gas production from exemption from certain categories of taxable income and from the corporate income tax."But the bill's opponents note that the costs are already deducted at thefederal level, and the changes constitute a "double dipping" of exemptions. The state House is expected to vote on the legislation today.
Michigan Senate approves Line 5 tunnel plan — Michigan's Republican-led Senate on Wednesday approved legislation designed to facilitate a deal between the state and Enbridge Inc. to move a controversial oil and propane pipeline into a planned tunnel under the Straits of Mackinac. The proposal would create a new Mackinac Utility Corridor Authority to oversee the tunnel — which would be drilled 100 feet beneath the lake bed — instead of the existing Mackinac Bridge Authority. Michigan Gov. Rick Snyder, who is working to finalize the deal before he leaves office at the end of the year, would appoint all three members of the new authority, which could include no more than two Republicans. Members would serve six-year terms. Snyder had proposed using the Mackinac Bridge Authority to oversee the tunnel, but lawmakers balked amid opposition from former members wary of expanding the bridge authority's scope. Enbridge has agreed to finance the tunnel construction project, which could take 10 years to complete and cost up to $500 million.The new authority would not have the power to seize land for the project using eminent domain.If Snyder finalizes state agreements with Enbridge, the legislation specifies that the new authority would be required to enter into enabling agreements by Dec. 31, the governor’s last day in office.Republicans hope to quickly wrap up tunnel plans to avoid looming road blocks next session. Democratic Gov.-elect Gretchen Whitmer and Attorney General-elect Dana Nessel have both vowed to decommission Line 5 by attempting to revoke the easement that allows it to run through the Straits.The legislation specifies that if the attorney general declines to represent the tunnel authority in a legal proceeding, including a claim that the tunnel agreement is invalid, Nessel or a successor would have to provide for the costs of outside legal counsel.
Eyeing expanded drilling, Trump OKs seismic tests off Atlantic coast that could harm dolphins, whales The Trump administration took an important step toward future oil and natural gas drilling off the Atlantic shore, approving five requests allowing companies to conduct deafening seismic surveys that could harm tens of thousands of dolphins, whales and other marine animals, according to studies. In an announcement Friday, the National Marine Fisheries Service, a division of the National Oceanic and Atmospheric Administration, declared that it issued final "incidental take" authorizations permitting companies conducting the surveys to harm wildlife if its unintentional. "NOAA Fisheries is clear in the documentation related to [incidental take authorizations] that we do not expect mortality to occur as a result of these surveys," said a spokeswoman, Katherine Brogan. But numerous scientific studies show acoustic sound can harm or potentially kill animals. The decision is likely to further antagonize governors in states along the Eastern Seaboard who strongly oppose the administration's proposal to expand federal oil and gas leases to the Atlantic. The authorizations clear the way for surveys across a stretch of ocean between Delaware and Florida. Every state executive on the coast below Maine opposed the plan. Federal leases could lead to exploratory drilling for the first time in more than a half-century. Several Democrats representing those states in the House and Senate decried the authorizations. In addition to harming sea life, acoustic tests - in which acoustic waves are sent through water 10 to 12 seconds apart to image the sea floor - can disrupt thriving commercial fisheries. Governors, state lawmakers and attorneys general along the Atlantic coast say drilling threatens beach tourism that has flourished on the coast in the absence of oil production.
SC mayors to fight Trump Administration's seismic testing permits - The Trump Administration approved permits to begin seismic testing in the Atlantic, Friday, a preparatory step for possible offshore drilling. With nearly 200 miles of coastline in South Carolina, mayors and conservation groups say they won't go down without a fight."I'm disappointed, but not surprised... We knew that under the radar, these permits have been pending for close to three years," said Beaufort Mayor Billy Keyserling.The National Marine Fisheries Service approved incidental harassment authorizations for five companies to start seismic air gun testing in the ocean from Delaware to Florida."The damage that could be caused by this seismic testing to dozens of species along the Atlantic Coast is just ill advised and it's really unconscionable," said Rikki Parker with the Coastal Conservation League in South Carolina. The air guns test for fossil fuels below the ocean floor, conservationists say blasting every ten seconds louder than a jet and potentially disturbing and threatening marine life.In South Carolina, another big concern surfaced when a study found old military munition sent to the bottom of the ocean in the 1900's harboring hazardous chemicals.Those who support offshore drilling see the money. A recent study from the American Petroleum Institute estimates offshore drilling to add nearly 280,000 jobs and $23 billion dollars to the U.S. economy every year.But conservationists say not without impacting other coastal industries. "It stands the potential to really cost millions of dollars in tourism dollars, and fisheries, those industries are really going to be harmed," Parker told News 3.
Kinder Morgan maintains current timeline for LNG project startup — Kinder Morgan stuck Wednesday to its latest startup target for the LNG export terminal it is building in Georgia and said it heads into 2019 expecting a boost to volumes across its North American transportation and storage network. Kinder Morgan supplies 42% of the current US liquefaction capacity with feedgas that moves through its pipelines, and it is hoping to increase that market share as more terminals come online, including its Elba Island facility near Savannah in the first quarter of next year. Contract renewals have been robust, as has been the ability to command higher rates, Kean said. "We are benefiting from the growth in both supply and demand, on both ends of our system," Kean said. Those trends are also aiding growth efforts by other players in the US midstream sector. Kinder Morgan has proposed two gas pipelines to boost takeaway capacity from the Permian Basin in West Texas, to demand centers, including the Texas Gulf Coast. Permian Highway Pipeline will be designed to transport up to 2 Bcf/d of from the Waha area to the Gulf and Mexico markets. Gulf Coast Express is a 1.98 Bcf/d project. Kean said forecasts showing continued strong demand in Mexico for US supplies of natural gas are good news for Kinder Morgan, which is positioned to capitalize on the growth, with its existing network and planned projects. In July, Kinder Morgan pushed Elba's expected initial in-service to the fourth quarter of this year from the third quarter previously. Now, it doesn't anticipate the first of 10 liquefaction units to come online until the first quarter of 2019. Time lines aside, LNG market fundamentals remain strong, even amid trade tensions that have invited a degree of uncertainty.
Louisiana judge rules in favor of Bayou Bridge Pipeline’s seizure of private land -- A Louisiana judge on Thursday (Dec. 6) ruled that the company building the controversial Bayou Bridge Pipeline has the right to seize private property to construct the 162-mile-long oil pipeline.Judge Keith Comeaux of the 16th District Court in St. Mary Parish also ruled that the pipeline’s owner, Energy Transfer Partners, had trespassed when it began construction before finalizing land seizure procedures. Louisiana is one of the few states that allows oil companies to take private land through expropriation, commonly known as eminent domain. This right is usually reserved for governments constructing highways or other public works. Comeaux’s ruling indicate Energy Transfer could have avoided trespass and been granted access to the lands had it followed the legal procedures properly. In a statement, Energy Transfer said it was “pleased with the ruling” and looking forward to “bringing the pipeline into service before the end of the year.” The pipeline’s opponents said they plan to appeal.
US Coast Guard orders Louisiana oil company to stop 14-year old Gulf of Mexico leak - The United States Coast Guard (USCG) has ordered Taylor Energy Company to contain and clean up an ongoing oil spill in the Gulf of Mexico, which the federal government says has leaked more than a million barrels of oil since 2004. According to the Washington Post the order was issued on 23 October 2018, and the company faces fines of $40,000 per day if it fails to comply. Taylor Energy’s MC-20 Saratoga platform was destroyed by Hurricane Ivan in September 2004 when an underwater mudslide snapped the 550-foot-tall platform’s legs and buried a cluster of wells. Taylor plugged some of the 28 wells and added three containment domes but between 300 to 700 barrels (50,000 to 115,000 litres) of oil per day still spews from wells around the platform, according to a recent government-commissioned study. Taylor Energy and federal officials have established a $666 million trust to pay for the leak response. Although the company has spent hundreds of millions trying to stop the leak, it has proven difficult to cap the affected wells that are deep underwater and buried beneath 100 feet of mud. Taylor Energy has mostly ceased to exist as a company and President William Pecue is its last remaining employee. He has argued that because the hurricane was an act of God under the legal definition of the term, the Government should return the $450 million of the trust fund not so far spent and absolve the company of responsibility for stemming the leaks. Now the Coast Guard has directed Taylor Energy to decide on a new containment plan and a contractor to do the work. The new method of containment “must eliminate the surface sheen and avoid the deficiencies associated with prior containment systems,” the Coast Guard wrote in the administrative order. The company will be fined up to $40,000 per day for failing to comply. Full containment of the leak could cost upwards of $1 billion, according to Taylor Energy. The company disputes the new leak estimates and the cause of the chronic sheens that often stretch for miles from the well site. According to scientists employed by Taylor Energy, the sheens are caused by oil and gas bubbling up from the oil-saturated seafloor, and not from leaking wells.
Corpus Christi LNG likely loading first cargo (Argus) — The first export from Cheniere Energy's Corpus Christi LNG terminal in Texas is likely being loaded, and the second cargo could be exported soon after that. The Maria Energy LNG vessel docked at the facility yesterday and the Golar Kelvin LNG vessel has been moored in the northern Gulf of Mexico, just south of Corpus Christi, since 29 November, according to shipping records. The Maria Energy, which has capacity of 174,000m³, equivalent to 3.6 Bcf (102mn m³) of gas, is chartered by Cheniere, while the 162,000m³ Golar Kelvin is chartered by Spain's Naturgy, formerly known as Gas Natural Fenosa. Houston-based Cheniere declined to comment. Cheniere previously planned to load the first Corpus Christi cargo on the 170,000m³ Golar Tundra that it charters. But on 21 November that vessel left Corpus Christi empty to load a cargo at Cheniere's Sabine Pass LNG terminal in Louisiana. Gas intake at Corpus Christi increased significantly on 23 November and has averaged 369mn cf/d since then, for a total of about 4.1 Bcf. Intake averaged 56mn cf/d from 19 October to 22 October, when the storage tank and loading terms were being cooled down before higher production could safely begin. About 10pc of the feed gas is used in the liquefaction process, so enough LNG has likely been produced to load the Maria Energy. Cheniere has said it expects to export the first cargo from Corpus Christi train 1 and Sabine Pass train 5 in the fourth quarter. It has not commented on when Sabine Pass train 5 would load its first cargo, or if that has already happened. Each train that Cheniere has completed or is building at Corpus Christi and Sabine Pass has baseload production of 4.5mn t/yr, equivalent to about 620mn cf/d, and peak capacity of 5mn t/yr. Each train would typically produce a full LNG cargo in about five to seven days if it is operating at or near capacity. Each new train is expected to produce five to seven test cargoes before starting long-term commercial operations in the first quarter next year. The second train at Corpus Christi is expected to start long-term operations in the second half of 2019, and train 3 in 2021.
46.3B Barrels of Oil in Wolfcamp-Bone Spring - The Wolfcamp shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion barrels (bbl) of continuous (unconventional) oil, according to a new U.S. Geological Survey (USGS) assessment. In addition, the USGS analysis finds that the Wolfcamp holds 281 trillion cubic feet of natural gas and 20 billion bbl of natural gas liquids. The USGS – part of the U.S. Department of the Interior – stated that the figures refer to undiscovered, technically recoverable resources. “Christmas came a few weeks early this year,” U.S. Secretary of the Interior Ryan Zinke said in a written statement Thursday from his department. “American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.” According the Interior Department, USGS in 2016 conducted a separate assessment of the Wolfcamp shale in the Midland Basin portion of the Permian. The new Delaware Basin assessment of the Wolfcamp and Bone Spring is more than two times larger than the 2016 study, the department noted. “In the 1980s, during my time in the petroleum industry, the Permian and similar mature basins were not considered viable for producing large new recoverable resources,” USGS Director Jim Reilly said in Thursday’s announcement. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”
Texas and New Mexico shale basins hold 49 years worth of oil: USGS - (Reuters) - The largest oil field in the United States holds as much as 49 years worth of oil at current production rates, according to data from a report released on Thursday by the U.S. Geological Survey (USGS). In its first assessment of the Delaware portion of the Permian shale field that spans west Texas and New Mexico, the USGS, which is part of the U.S. Department of the Interior, said it contains about 46.3 billion barrels of oil and 281 trillion cubic feet of natural gas. The government estimates include all underground shale oil and gas that is technically recoverable but may not be economic to extract at current prices. The estimate is twice the size of the country’s next largest shale reserve - the Midland Basin - another portion of the Permian. In 2016, that was found by the USGS to have about 20 billion barrels of oil and 16 trillion cubic feet of natural gas. Survey results “demonstrate the impact that improved technologies such as hydraulic fracturing and directional drilling have had on increasing the estimates,” said Walter Guidroz, an official in the USGS Energy Resources Program. Hydraulic fracturing forces water and sand underground at high pressure to free oil and gas trapped in shale rock. The Permian Basin, which includes both shale regions, is expected to pump 3.7 million barrels of crude oil per day this month, up 30 percent from a year ago, according to the U.S. Energy Information Administration. The Delaware and Midland basins combined would take 49 years to produce if all the oil was profitable to recovery, according to the EIA figures.
Permian’s Wolfcamp is largest potential oil and gas resource ever assessed - The Permian Basin's Wolfcamp and Bone Spring formations in West Texas and New Mexico hold the most potential oil and gas resources ever assessed, the U.S. Interior Department said Thursday. The region in the Permian's western Delaware Basin holds more than twice as much oil as the largest previous assessment - the Wolfcamp shale in the Permian's separate Midland Basin southeast of Midland. That study was completed two years ago. To put the new results into perspective, the Delaware Basin's Wolfcamp and Bone Spring plays would hold almost seven times as much oil as North Dakota's Bakken shale. The Wolfcamp shale and overlying Bone Spring in the Permian's booming Delaware Basin hold an estimate 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to the U.S. Geological Survey's new assessment. Much of the new activity in the Permian is in the Delaware's Wolfcamp in Loving, Winkler, Reeves, Culberson and Ward counties on the Texas side, and primarily Eddy and Lea counties in New Mexico. The U.S. is producing record volumes of oil and gas, and nearly one-third of the nation's total crude oil volumes are coming from the Permian. Those amounts are continuing to grow. An older basin, the Permian has become the center of the oil and gas world in recent years through the combination of horizontal drilling techniques and modern hydraulic fracturing, or fracking, technologies. RELATED: Midland Basin's Wolfcamp shale holds 20 billion undiscovered barrels of oil The study is based on undiscovered oil and gas that's considered technically recoverable based on these modern extraction methods. That's different from the proven reserves that oil companies list on their budgets after they drill exploratory wells and study the reservoirs.
Permian Pipeline to Access Texas Deepwater Ports - Jupiter Energy Group has launched its 90-day open season for binding shipper commitments on the Jupiter Pipeline, the privately held midstream company reported Friday.“Construction of the Jupiter Pipeline is a key element in achieving our vision of providing our customers with the best hydrocarbon solutions from the wellhead to the world,” Albert Johnson, president of Jupiter Pipeline LLC, said in a written statement.According to the company, the 650-mile-long Jupiter Pipeline will be the only pipeline out of the Permian Basin that will access all three of Texas’ deepwater ports – Houston, Corpus Christi and Brownsville. The 36-inch-diamater crude oil pipeline will originate near Crane, Texas, and Gardendale-Three Rivers, Texas, and it will have an offtake point in Brownsville, Texas, Jupiter stated. Also, the company noted that the pipeline will have direct access to a fully capable very large crude carrier (VLCC) off-coast loading facility at Brownsville.The pipeline, which could begin service in the fourth quarter of 2020, could boast a capacity of up to 1 million barrels per day of crude oil, Jupiter states in its open season notice. As a previous Rigzone article about the project notes, the pipeline will directly link to Kinder Morgan’s Double Eagle and Crude & Condensate pipeline systems. In addition, Jupiter has received permits to load and unload up to Panamax-sized vessels at the crude upgrading, processing and export terminal it is building in Brownsville.
US Crude Oil Exports Surge to Record 3.2 Million Bpd Last Week: EIA — U.S. crude oil exports surged to 3.2 million barrels per day (bpd) last week, the highest on record, based on data going back to 1991, U.S. Energy Information Administration data showed on Thursday. The surge in exports helped push weekly net imports of crude to the lowest on record last week at about 4 million bpd, the data showed.
Oil and water: Finding new uses for fracking waste water -—Fracking requires a huge amount of water, a major concern in dry Western states that otherwise welcome the practice. But New Mexico thinks it can mitigate that problem by pushing oil companies to treat and recycle fracking waste water for use in agriculture —or even as drinking water.State officials, with the help of the U.S. Environmental Protection Agency, are still working out the details. If they move forward with the strategy, other arid states may follow New Mexico's lead."Oil and gas in New Mexico provide over a third of our general fund," said Ken McQueen, who heads the New Mexico Department of Energy, Minerals and Natural Resources. "We have to be concerned we're doing what's necessary into the future to make sure this industry continues to be alive and vibrant."In addition to keeping a vital industry going, McQueen thinks the reclaimed waste water could be a boon to New Mexico farmers and ranchers who need water for their crops and herds. Factories could use it, and it might help revive parched wildlife habitat, he said. And even though the waste water is filled with salt and other minerals, it might even be treated and used for drinking.In a typical month, the amount of waste water generated by the fracking process in New Mexico, the country's third-largest producer of oil, would be enough to fill Elephant Butte, the state's largest lake."Our hope is that it has a significant impact," McQueen said, eyeing figures that might total a billion barrels of water a year. "As we see the produced water volumes increase, it just makes sense that we explore other methods of disposal, particularly if those methods may have an upside or beneficial use to New Mexico." But even in the nation's fifth-driest state, where water is as precious as crude, environmentalists are skeptical of a strategy many state leaders view as a greener approach to dealing with waste water. Even after it is treated, they argue, the water can be tainted by harmful metals or chemicals used in fracking, creating long-term risks for people and the environment.
A push to make fracking waste water usable in agriculture — and even for drinking - WaPo --Fracking requires a huge amount of water, a major concern in dry Western states that otherwise welcome the practice. But New Mexico thinks it can mitigate that problem by pushing oil companies to treat and recycle fracking waste water for use in agriculture — or even as drinking water. State officials, with the help of the Environmental Protection Agency, are still working out the details. “Oil and gas in New Mexico provide over a third of our general fund,” said Ken McQueen, who heads the New Mexico Department of Energy, Minerals and Natural Resources. “We have to be concerned we’re doing what’s necessary into the future to make sure this industry continues to be alive and vibrant.” In addition to keeping a vital industry going, McQueen thinks the reclaimed waste water could be a boon to New Mexico farmers and ranchers who need water for their crops and herds. Factories could use it, and it might help revive parched wildlife habitat, he said. And even though the waste water is filled with salt and other minerals, it might even be treated and used for drinking. In a typical month, the amount of waste water generated by the fracking process in New Mexico, the country’s third-largest producer of oil, would be enough to fill Elephant Butte, the state’s largest lake. For every barrel of oil fracking produces in New Mexico, it yields up to five barrels of “produced water” — a combination of the excess fracking water and water released from the rock.Sometimes oil companies reuse the waste water to bring up more oil, but in many cases they dispose of it by pumping it deep underground using bore holes called injection wells.Injecting the waste water has created serious problems in states such as Oklahoma and Kansas. Both states have passed restrictions on injecting the water after scientists concluded that the practice has caused earthquakes, sometimes several in a single day. But even in the nation’s fifth-driest state, where water is as precious as crude, environmentalists are skeptical of a strategy many state leaders view as a greener approach to dealing with waste water. Even after it is treated, they argue, the water can be tainted by harmful metals or chemicals used in fracking, creating long-term risks for people and the environment.
Feds Move to Slash Sage Grouse Protections For More Oil & Gas Development -- The Interior Department's Bureau of Land Management published proposals on Thursday designed to roll back critical measures that protect the imperiled greater sage grouse on public lands in order to boost fossil fuel development and mining in the American West.The spectacular bird once numbered 16 million and roamed across 13 Western U.S. states and three Canadian provinces. But rampant oil and gas development and other factors have cut its habitat in half. Its population has significantly plunged to an estimated 200,000 to 500,000 individuals across 11 western states and southern Alberta.In 2015, the charismatic bird saw a glimmer of hope with the Greater Sage Grouse Conservation Plan, which then-Interior Secretary Sally Jewell called a "truly historic moment—one that represents extraordinary collaboration across the American West." A remarkable coalition of scientists, ranchers, environmental groups, extractive industries, federal agencies and state and local governments worked together to create a management plan for the keystone species.As the New York Times explained, that Obama-era effort to protect the sage grouse set out to ban or sharply reduce drilling in 10.7 million acres of its habitat. But the Trump administration's plan would effectively limit the grouse's protected habitat to a mere 1.8 million acres, "essentially opening up nine million acres of land to drilling, mining and other development," the paper said.
U.S. to conduct additional Keystone XL pipeline review (Reuters) - The U.S. State Department will conduct another environmental review of TransCanada Corp’s long-pending Keystone XL oil pipeline, a U.S. official said on Friday, a move that could lead to additional delays of the project. The so-called supplemental environmental impact statement was ordered by Judge Brian Morris of the U.S. District Court in Montana in his ruling on Nov. 8 that blocked construction of the pipeline planned to bring heavy crude from Canada’s oil sands to the United States. Morris said in his ruling that previous environmental analysis of Keystone XL fell short of a “hard look” at the cumulative effects of greenhouse gas emissions and the impact on Native American land resources. The $8 billion pipeline, which is supported by Canadian oil interests and U.S. refiners, but opposed by landowners and environmentalists, has been pending for a decade. President Donald Trump announced a permit for the project soon after he took office. Former President Barack Obama nixed the pipeline, saying it would do little to help U.S. consumers and would add greenhouse gases. TransCanada spokesman Terry Cunha said that the State Department’s announcement of an additional review was expected after the judge’s ruling. Earlier this week, TransCanada asked Morris, the District Court judge, to allow it to resume some U.S.-based pre-construction activities blocked by the initial ruling. Morris’ decision on Thursday gave the Calgary, Alberta-based company permission to resume some activity on the pipeline project, including project development work and stakeholder meetings. It is not allowed to resume physical field work like moving pipe and equipment, preparing work camp sites or undertaking road upgrades at this time, Cunha said. Morris is set to rule on that work after Dec. 5. “It is too soon to say what the injunction will mean to the timeline of the Keystone XL pipeline but we remain confident the project will be built,” Cunha said.
Energy Transfer Partners and Banks Lost Billions by Ignoring Early Dakota Access Pipeline Concerns -- Roughly four years ago, Energy Transfer Partners (ETP) filed a federal application to build a 1,172 mile oil pipeline from North Dakota's Bakken shale across the U.S. to Illinois at a projected cost of $3.8 billion.Before that application was filed, on Sept. 30, 2014, the Standing Rock Sioux Tribe met with ETP to express concerns about the Dakota Access pipeline (DAPL) and fears of water contamination. Though the company, now known as Energy Transfer, had re-routed a river crossing to protect the state capital of Bismarck against oil spills, it apparently turned a deaf ear to the Tribe's objections.Following that approach proved to be a very costly decision, a new analysis concludes, with ETP, banks, and investors taking billions in losses as a result."This case study estimates that the costs incurred by ETP and other firms with ownership stake in DAPL for the entire project are not less than $7.5 billion, but could be higher depending on the terms of confidential contracts," a new report, "Social Cost and Material Loss: The Dakota Access Pipeline," concludes, noting that the figure represented nearly double the initial project cost. "The banks that financed DAPL incurred an additional $4.4 billion in costs in the form of account closures, not including costs related to reputational damage." In addition, the company's "poor social risk management" caused taxpayers and "other local stakeholders" to incur at least $38 million in costs, the report concludes.
Pipeline spills crude oil on private property near Belt - An oil pipeline spilled 3,400 barrels of crude oil on about 4 acres of private property southeast of Great Falls, near Belt.ABC Fox Montana reports the spill from the Phillips 66 pipeline happened on Nov. 14. Cleanup has included vacuuming up spilled oil and removing contaminated soil.State environmental regulators say the oil did not reach surface or groundwater. Phillips 66 says there was no impact to people or wildlife.The Department of Environmental Quality says Phillips 66 is complying with the state's cleanup requirements and the pipeline has been repaired. DEQ officials say when the cleanup is complete the agency will determine if any fines are warranted.
How Did Public Land Drilling Rights Become Cheaper Than a Cup of Coffee? - Last December, a London-based energy company secured drilling rights to 67,000 acres in Montana for the paltry sum of $1.50 per acre – a steal compared to the $100 per acre average price tag for land leased under the final four years of the Obama administration, according to The New York Times.This wasn’t some end-of-the-year clearance sale. While you might think public lands would be more safeguarded than most from oil and gas development, the Trump administration has actually made it dangerously affordable to lease drilling rights. That’s especially concerning in light of a new federal report that found drilling on public lands accounts for nearly a quarter of greenhouse gas emissions in the U.S.“We clearly have a system that is incentivizing speculation,” said Jeremy Nichols, the Climate and Energy Program Director at WildEarth Guardians. He said the low lease prices allowed companies to take advantage of public lands and make money off the backs of taxpayers.“I call it a liquidation. When you’re selling public lands for $1.50 an acre, you are liquidating.”Recent oil and gas lease sales, listed by the Bureau of Land Management, show parcels frequently selling for about $2 an acre — the minimum legal bid, which can drop as low as $1.50 per acre if there are no other bidders — as was the case for the Montana drilling rights. This devaluing of public lands and their wholesale leasing is not only alarming because of the associated greenhouse gases. Drilling can end up cutting off wildlife corridors, threatening native flora and fauna. It can also lead to massive spikes in air pollution — which is why some towns located near the gas fields in western Wyoming have experienced higher smog levels than Los Angeles.
In the Blink of an Eye, a Hunt for Oil Threatens Pristine Alaska — It is the last great stretch of nothingness in the United States, a vast landscape of mosses, sedges and shrubs that is home to migrating caribou and the winter dens of polar bears. Aside from a Native village at its northern tip, civilization has not dented its 19 million acres, an area the size of South Carolina. There are no roads and no visitors beyond the occasional hunter and backpacker. But the Arctic National Wildlife Refuge — a federally protected place of austere beauty that during a recent flyover was painted white by heavy snowfall — is on the cusp of major change. The biggest untapped onshore trove of oil in North America is believed to lie beneath the refuge’s coastal plain along the Beaufort Sea. For more than a generation, opposition to drilling has left the refuge largely unscathed, but now the Trump administration, working with Republicans in Congress and an influential and wealthy Alaska Native corporation, is clearing the way for oil exploration along the coast.Decades of protections are unwinding with extraordinary speed as Republicans move to lock in drilling opportunities before the 2020 presidential election, according to interviews with over three dozen people and a review of internal government deliberations and federal documents. To that end, the Trump administration is on pace to finish an environmental impact assessment in half the usual time. An even shorter evaluation of the consequences of seismic testing is nearing completion. Within months, trucks weighing up to 90,000 pounds could be conducting the tests across the tundra as they try to pinpoint oil reserves. While actual oil production would be a decade or more away, the turnaround represents a prized breakthrough in the Trump administration’s campaign to exploit fossil fuels and erase restrictive policies protecting the environment and addressing global warming.
In major shift, U.S. now exports more oil than it ships in -- The United States last week exported more crude oil and fuel than it imported for the first time on record, according to data released on Thursday, the same day OPEC ended a meeting without a decision to curb global output to balance out the historic surge in U.S. supply. When adding in all imports and exports of crude and refined products, the U.S. exported a net 211,000 barrels per day for the week through Nov. 30 – the first time that has happened, according to U.S. Energy Department figures dating to 1973. That was on the back of a jump in crude exports to a weekly record of more than 3.2 million bpd. “So when does the U.S. send a delegate to OPEC meetings?” said Kyle Cooper, consultant at ION Energy in Houston. “It’s really quite amazing. I do think that will occur more and more often in coming years.” The United States historically has been a heavy importer of crude oil in part due to a four-decade ban on crude exports that was lifted in late 2015 by then-President Barack Obama. Petroleum exports until recently were dominated by products like gasoline and diesel, but that has changed since the U.S. shale revolution that has sped up drilling and extraction of oil, helping boost overall U.S. production to a record 11.7 million bpd. The data comes on the same day that the Organization of the Petroleum Exporting Countries adjourned a meeting without announcing a supply-cut agreement as it grapples with sinking prices due in part to the surge in U.S. output that has upended the global supply equation. Crude inventories fell 7.3 million barrels last week, the first drawdown since September, as net crude imports hit a record low of 4 million bpd, the U.S. Energy Information Administration said on Thursday.
The U.S. Just Became a Net Oil Exporter for the First Time in 75 Years -- America turned into a net oil exporter last week, breaking 75 years of continued dependence on foreign oil and marking a pivotal -- even if likely brief -- moment toward what U.S. President Donald Trump has branded as "energy independence." The shift to net exports is the dramatic result of an unprecedented boom in American oil production, with thousands of wells pumping from the Permian region of Texas and New Mexico to the Bakken in North Dakota to the Marcellus in Pennsylvania. While the country has been heading in that direction for years, this week’s dramatic shift came as data showed a sharp drop in imports and a jump in exports to a record high. Given the volatility in weekly data, the U.S. will likely remain a small net importer most of the time. “We are becoming the dominant energy power in the world,” said Michael Lynch, president of Strategic Energy & Economic Research. “But, because the change is gradual over time, I don’t think it’s going to cause a huge revolution, but you do have to think that OPEC is going to have to take that into account when they think about cutting.” The shale revolution has transformed oil wildcatters into billionaires and the U.S. into the world’s largest petroleum producer, surpassing Russia and Saudi Arabia. The power of OPEC has been diminished, undercutting one of the major geopolitical forces of the last half century. The cartel and its allies are meeting in Vienna this week, trying to make a tough choice to cut output and support prices, risking the loss of more market share to the U.S. The U.S. sold overseas last week a net 211,000 barrels a day of crude and refined products such as gasoline and diesel, compared to net imports of about 3 million barrels a day on average so far in 2018, and an annual peak of more than 12 million barrels a day in 2005, according to the U.S. Energy Information Administration. The EIA said the U.S. has been a net oil importer in weekly data going back to 1991 and monthly data starting in 1973. Oil historians that have compiled even older annual data using statistics from the American Petroleum Institute said the country has been a net oil importer since 1949, when Harry Truman was at the White House.
U.S. oil reserves rise to record despite production boom: Kemp (Reuters) - U.S. crude oil reserves hit record levels at the end of 2017, as annual reserve additions outstripped production for the eighth time in nine years, government data published last week shows.Reserve growth is the main reason predictions about future oil shortages have been repeatedly proved wrong. U.S. policymakers have long fretted about the damage to the economy and national security of exhausting domestic oil reserves. As early as 1909, the U.S. Geological Survey was predicting reserves might be exhausted by 1935. Scarcity concerns became prominent again in the 1940s, the 1970/80s and the 2000s (“Market madness: a century of oil panics, crises and crashes”, Clayton, 2015). Policymakers responded by pressing for more conservation, encouraging the development of overseas reserves, reserving domestic supplies for future military needs, or experimenting with alternatives. But scarcity forecasts have underestimated the impact of improvements in technology, mostly driven by price changes, of which shale extraction has been the most recent and dramatic. And we will have cooked the planet through global warming long before we run out of fossil fuels. “No mineral, including oil, will ever be exhausted,” wrote the late Morris Adelman, an economist at the Massachusetts Institute of Technology (“Genie out of the bottle”, 1995). “If and when the cost of finding and extraction goes above the price consumers are willing to pay, the industry will begin to disappear.” And as former Saudi oil minister Zaki Yamani observed in 2000: "Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil."
Schlumberger's Year-End Frack Forecast is a Lump of Coal -- The North American fracking market -- already expected to be a downer for the holidays -- is turning out to be even worse than expected, according to the world’s biggest oil-service provider. Schlumberger Ltd. expects sales in the U.S. and Canada to drop 15 percent in the final three months of the year compared with the third quarter, the company said Tuesday. A trio of factors including a plunge in crude prices, exhausted exploration budgets and maxed-out pipelines in America’s busiest field is prompting oil companies to let go of frack crews. “We are seeing a significantly larger drop in activity than we expected, which is leading to a larger drop in pricing than we anticipated,” “We continue to see the weakening of the hydraulic fracturing market as temporary, with the expectation of a gradual recovery taking place over the first half of 2019.” The number of fracking crews at work in the Permian Basin of West Texas and New Mexico is down 13 percent from a 2018 high in June, according to Primary Vision Inc. Fracking, which involves blasting water, sand and chemicals underground to release trapped hydrocarbons, is the most expensive part of drilling wells. The 15 percent drop in overall North American sales implies at least a 25 cut to fracking revenue in the region, Brad Handler, an analyst at Jefferies, wrote Wednesday in a note to investors. Jefferies slashed its price target for Schlumberger shares 28 percent to $54. The projected decline in North American sales is just the latest in a series of downward revisions by Schlumberger. In September, the company said a dearth of new pipeline capacity in the Permian was cooling off the red-hot region, leading to lower-than-expected third-quarter fracking results. Then a month later, the company said the fourth quarter would be even worse.
North Atlantic oil refinery reports oil leak About 8:30 a.m. Friday, a pipeline was observed to be leaking bunker oil into Placentia Bay from the North Atlantic Refinery. North Atlantic Refining Ltd. in a statement said it immediately activated its response procedure, and within one hour the product was contained. The spill is estimated to have leaked less than one barrel into the water. The refinery said situation is under control and clean up was underway Friday, insisting there is no risk to the general public and no further risk to the environment.
SeaRose spill proves we can’t open marine protected areas for drilling - The largest-ever oil spill off the coast of Newfoundland has come and almost gone from sight, with little fanfare and only a fraction of the notice it should have elicited. Husky’s SeaRose platform leaked a quarter-million litres of oil into the Atlantic on Nov. 16. Having occurred during the worst storm in the world at the time, the spill avoided capture by TV cameras. The oil disappeared from sight over the course of four days, sparing coastal residents the image of a blackened coastline such as the one caused by the Exxon Valdez.Due to weather conditions near the spill, even remote-sensing equipment was unable to record the 250,000 litres spilled into the ocean. Thanks to near-eight-metre waves and four days of storming, images of the fish, seabirds and other marine life affected by the oozing slick remain unseen. To date, just one image of the spill has been publicly released. The spill has become an “out of sight, out of mind” PR home run for Husky. Meanwhile, government issued vague platitudes about self-regulation, instead of setting and enforcing real standards.And so, we move on. Not so fast. Return to March 2017, when Husky continued operations at the same SeaRose platform while a massive iceberg approached, putting the operation, crew and marine environment at risk. Following that close call, the Canada-Newfoundland and Labrador Offshore Petroleum Board said it “lack(ed) full confidence” that Husky would take appropriate action in an emergency situation, and that Husky would need to “rebuild confidence.” Husky Oil was found negligent in failing to shut down and move its platform out of harm’s way, instead playing an ill-advised game of chicken with an iceberg measuring 60 by 40 by eight metres, which dodged the SeaRose by less than 200 metres. The 84 people on board were ordered to “muster and to brace for impact.” But even after being investigated and the SeaRose’s operations were suspended for nine days, Husky’s procedures appear unchanged. Months later, CBC uncovered documents proving the decision to continue operations that day were “economically driven.”
Earthquake in northern B.C. 'very likely' caused by fracking -An earthquake that struck northeastern B.C. on Thursday evening was "very likely" caused by fracking, a preliminary investigation has found. Earthquakes Canada said the quake had a preliminary magnitude of 4.5, with the epicentre about 16 kilometres southwest of Fort St. John. The epicentre coordinates from Earthquakes Canada: It hit around 5 p.m. PT, followed by another tremor of similar magnitude, classified as an aftershock, less than an hour later. The Geological Survey of Canada and the B.C. Oil and Gas Commission launched an investigation to figure out what caused the tremor. On Friday, a statement said they had confirmed there was active fracking happening near the epicentre when the quake struck. "The likelihood this was induced … there's a very high correlation," said Honn Kao, seismology research scientist with the Geological Survey of Canada. Kao stressed the link was a preliminary finding and more investigation is required before the agency confirms the quake was "100 per cent" a result of fracking — but said it's "very likely" that's the case. Western Alberta and northeast B.C. have a high rate of fracking-induced earthquakes, according to a study from the University of Alberta. People in Fort St. John, as well as Taylor, Chetwynd and Dawson Creek, reported feeling the earthquake on social media, but there are currently no reports of damage. Kao said early data suggests the quake had a relatively shallow depth, which is likely why the quake was widely felt. "This is certainly an event that has been felt quite a bit by the local residents," Kao said. "Although this is a significant event for the region, I don't think it's going to cause significant damage." According to the U.S. Geological Survey, the quake had a preliminary magnitude of 4.2.
Fracking Linked to Quake that Jolted Fort St. John - -- The earthquake that rattled Fort St. John last Thursday evening wasn’t a natural phenomenon. The quake, which shook up an area south of the city, was likely caused by energy companies’ massive fracking of one of the many wells in the region. B.C.’s Oil and Gas Commission (OGC) ordered one or more operators to stop drilling and says more details will be forthcoming. The industry currently has no way of telling how these induced fractures will behave or if they will connect with natural faults in the rock formations. The latest quake occurred at the same depth that industry is fracking shale rock, about two to three kilometres from the surface, said Honn Kao, the leader of induced seismicity research project at Natural Resources Canada in Victoria, B.C. “Based on this information the OGC and Natural Resources Canada concluded that there is a very high chance the earthquake was induced by injection operations nearby,” Kao told The Tyee. The tremor and accompanying aftershocks shook houses in Fort St. John, Charlie Lake, Taylor, Chetwynd, Dawson Creek and Hudson’s Hope reported the Alaska Highway News. It was also felt at the construction site of the Site C dam. More than 100 local residents submitted “felt” forms to Natural Resources Canada on the extent of the shaking and damage. Research scientists have found hydraulic fracturing and related activities have changed seismic patterns in both northeastern B.C. and northwestern Alberta over the last six years. Ever-growing injection volumes, uncharted faults and over-pressured shale formations have all played a role in the explosion of industry-made quakes. According to presentations by the OGC, industry-made earthquakes can pose a hazard to roads, pipelines, dams, groundwater and public safety. Between 2013 and 2015 the fracking industry has likely caused more than 700 seismic events in western Alberta, according to a report from the TransAlta/Nanometrics monitoring network.
Alberta to mandate 325,000 oil production cut starting Jan 1: Premier — Alberta will mandate a 325,000 b/d oil production cut starting January 1, 2019 in order to tighten wide crude price discounts, the province's Premier, Rachel Notley, said Sunday. "This is a short-term measure," Notley said during a webcast press conference. In the long term, Notley said she will focus on getting new pipelines built and purchasing rail cars to move more crude out of Alberta. Those new rail cars will start coming on line next year, she said. The 325,000 b/d, or 8.7%, crude production cut will be spread out to all producers, Notley said, and over the course of the year the amount of the cut will drop. The volume of the cut will be reviewed every month to determine what is needed, she said. The Canadian Association of Petroleum Producers' latest forecast shows Western Canadian production rising from an estimated 4.54 million b/d in 2018 to 5.2 million b/d in 2023, and 6.2 million b/d in 2035. Notley said last week she submitted a proposal to Canada's Prime Minister Justin Trudeau asking the federal government to join Alberta in buying unit trains and up to 7,000 cars to move additional crude out of Alberta. Notley said Alberta is already in negotiations with a third party to purchase the rail cars, and anticipates a deal to get done in weeks. The additional trains would be able to move 120,000 b/d of crude, she said. A typical 100-car train would carry roughly 600,000 barrels of crude, and each train would likely only make two trips across the border every month. Getting 120,000 b/d of extra capacity would require buying another 2,500 to 3,000 rail cars (or 25 to 30 100-car trains). It is difficult to tell where those cars would come from. Roughly 1,500 DOT 117 newbuild and retrofitted combined cars entered the crude market during the third quarter of 2018 for the US and Canada, according to S&P Global Platts Analytics. Western Canadian Select crude was assessed by S&P Global Platts at a $29/b discount to WTI Friday, tightening from a $45.25/b discount November 1. Still, that discount is out from an average of $15.38/b in November 2017. Even with a tighter discount, lower WTI benchmark prices have helped to pull WCS outright prices down, assessed at $21.14/b Friday. That puts WCS well below breakeven costs, which are estimated by S&P Global Platts Analytics at roughly $57/b for new projects.
Alberta to force oil output cuts to deal with price woes (Reuters) - Alberta Premier Rachel Notley said on Sunday that the Western Canadian province would mandate temporary oil production cuts to deal with a pipeline bottleneck that has led to a glut of crude in storage and driven down Canadian crude prices. The left-leaning New Democratic Party government will force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), until the excess crude in storage is drawn down. The cuts will then drop to 95,000 bpd until Dec. 31, 2019. There are some 35 million barrels of oil in storage in Alberta, which is twice the normal level, the province said. “When markets aren’t working, when companies are forced to sell our resources for pennies on the dollar, we must act,” Notley said in a live public address on Facebook. Alberta estimates that current production outstrips pipeline and rail capacity by 190,000 bpd. The production cuts, to be applied by producer rather than per project, will be implemented starting in January. The discount on Western Canada Select (WCS) heavy blend hit a record at $52.50 below the West Texas Intermediate (WTI) benchmark last month, which meant producers were getting about $14 a barrel compared with about $67 for WTI. It has since narrowed slightly as the WTI benchmark price has fallen and crude by rail volumes has ramped up. The province said the curtailment would narrow the differential by at least $4 a barrel. There will be penalties for non-compliance, but no specifics were given. Notley said last week her government was moving ahead with plans to buy about 80 locomotives and 7,000 rail cars to boost crude by rail capacity by 120,000 bpd by mid-2020. The premier, who will face voters in an election that must be held by the end of May, noted that pipelines were preferred to all other options, but blamed successive federal governments for delays getting projects built. Enbridge Inc’s Line 3 pipeline replacement, which runs from Alberta to U.S. markets, is expected to be online by late 2019. Two other planned export pipelines are facing regulatory delays.
Is This the Beginning of the End for Canada’s Tar Sands? - When hundreds of activists protesting the Keystone XL pipeline were arrested at the White House in 2011, their ultimate target lay thousands of miles away: Canada's tar sands. If they stopped the pipeline, they argued, that could slow the growth of this particularly dirty source of oil and score a limited but significant win for the climate.This week, with the market saturated and prices depressed, Alberta's premier announced that her government would temporarily curtail the province's oil production, chiefly from the tar sands, because there isn't enough pipeline capacity to ship the crude to market.It was a startling announcement from a government whose prevailing energy policy has been to promote more production of its bitumen—known as tar sands or oil sands—which ranks among the most carbon-polluting sources of oil."This is definitely a big deal," said Josh Axelrod of the Natural Resources Defense Council, one of the advocacy groups that has tried to block Keystone XL. "When the aim of the campaign is to level off production," he said, "to see that day when the first cuts happen for exactly the reason you have argued would happen, it's quite amazing."The reasons for Alberta's decision to rein in production are complex—the government's goal is for output to eventually grow again. It's an effort to buy time for the industry, but it doesn't fix the underlying problems. And it raises the question: is this the beginning of the end for Canada's oil sands?
Canada's Plan to Cut Oil Output Boosts Crude, Stocks - Alberta’s announcement that it will cut oil production next year to bolster prices sent crude soaring and boosted shares of Canadian producers. The unprecedented move by the country’s largest oil-producing province is aimed at easing the crisis in the nation’s energy industry. The plan announced on Sunday will lower production of raw crude and bitumen from Alberta by 325,000 barrels a day, or 8.7 percent, from January until excess oil in storage is drawn down. The reduction would then drop to 95,000 barrels a day until the end of next year at the latest. The discount of Western Canadian Select crude to U.S. benchmark West Texas Intermediate oil narrowed $9.25 to $19.75 a barrel as of 10:11 a.m. New York time Monday, the tightest it’s been since July, data compiled by Bloomberg showed. WTI itself climbed as much as 5.7 percent, the biggest intraday gain since June, to $53.85 a barrel. Shares of oil producers operating in Alberta also surged, while there were declines for refining companies who had benefited from supplies of cheap crude. The planned cuts by the world’s fifth-biggest producer follows a renewed commitment over the weekend by Saudi Arabia and Russia to extend their deal to manage the oil market. Global prices crashed last month by the most in more than a decade, a plunge that battered producers in Alberta in particular amid surging oil-sands output, a shortage of pipeline space and heavy U.S. refinery maintenance. Alberta Premier Rachel Notley is following the advice of producers like Cenovus Energy Inc. and Canadian Natural Resources Ltd., which have been hammered by record low prices for heavy Canadian crude, which at one point were $50 a barrel less than U.S. grades. The crisis has caused some producers to reduce production on their own, slash dividends and delay next year’s drilling plans. “Every Albertan owns the energy resources in the ground, and we have a duty to defend those resources,” Notley said in a statement. “But right now, they’re being sold for pennies on the dollar. We must act immediately, and we must do it together.” The amount being cut is more than the total production of each of OPEC’s three smallest members: Equatorial Guinea, Gabon and the Republic of Congo.
Canadian Heavy Crude Surges After Alberta Imposes Oil Cuts - Canadian heavy crude strengthened the most since June after the Alberta government mandated production cuts across the province. Western Canadian Select’s discount to U.S. benchmark West Texas Intermediate narrowed $6 to $23 a barrel as of 3:51 p.m. New York time, data compiled by Bloomberg show. The discount shank to as much as $19.75 a barrel earlier in the day, the tightest since July. On an outright basis, prices were up more than $8 a barrel. Alberta announced late Sunday that oil producers will have to collectively cut output by 325,000 barrels a day, or 8.7 percent, starting in January to alleviate rising inventories and pipeline bottlenecks. The reduction would drop to 95,000 barrels a day by the end of next year. A surge of production from oil sands projects such as Suncor Energy Inc.’s Fort Hills mine earlier this year ran into limited pipeline space, causing inventories to rise and prices to decline. WCS’s discount to futures fell to $50 a barrel in October amid refinery maintenance in the U.S. Midwest. Already, Canadian oil producers including Canadian Natural Resources Ltd. and Cenovus Energy Inc. announced that they had curtailed output. Those cuts added up to about 150,000 barrels a day, according to Explorers and Producers Association of Canada. The province is producing 190,000 barrels a day more than can be shipped out and inventories are “nearing capacity,” Alberta’s government said in a release Sunday. The cuts will reduce volatility and narrow the Canadian crude differential by $4 a barrel relative to what it would otherwise have been. WCS swaps for calendar year 2019 traded at $19.50 a barrel discount to WTI earlier Monday, compared with $25.75 on Friday, according to market participants. Prices have since retreated, with bids at minus $21.45.
Some Canadian producers push back as Alberta orders oil cuts (Reuters) - Several oil companies in Canada pushed back on Monday against Alberta’s mandated cuts in crude production, warning about excessive government intervention even as the discount on Canadian crudes narrowed sharply on the curtailment plan. Alberta Premier Rachel Notley said on Sunday the government would force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), until excess crude in storage is reduced. The move is unusual for a market economy like Canada, in comparison with members of the Organization of the Petroleum Exporting Countries whose oil companies are often state-owned. Prices for Canadian grades of crude oil moved sharply upward Monday, narrowing the deep discounts they had been trading at, relative to their U.S. counterparts. While producers said they would comply with the mandatory cuts, executives from Canada’s Suncor Energy Inc, Husky Energy Inc and Imperial Oil, integrated producers with domestic refinery and upgrading capacity, expressed disappointment. “We believe the market is working and view government-ordered curtailment or other interventions as possibly having serious negative investment, economic and trade consequences,” said Husky in a statement. However, major producers like Cenovus Energy Inc and Canadian Natural Resources Ltd were vocal with their support. “At $35 or $45 differentials - the lion’s share of companies in this industry are barely breaking even or actually losing money,” Cenovus Chief Executive Alex Pourbaix said in an interview. Canada is one of the world’s largest oil producers, supplying more than 4.2 million barrels a day, but WCS prices slumped in October to a discount of more than $52 a barrel below WTI due to the transportation constraints and storage glut. Heavy Western Canadian Select oil traded at a $25 a barrel discount to U.S. crude on Monday, compared with a $32 discount on Friday. Light synthetic crude from the oil sands settled at $17 below the benchmark, $8 narrower than Friday. Following the cuts, Pourbaix said Cenovus expects discounts closer to $20 a barrel in 2019, supporting investment of C$1.5 billion ($1.1 billion) in 2019, in line with 2018 capital spending. “That would not have been the case if the government hadn’t take action,” Pourbaix said.
Refinery margin tracker- Distressed Canadian crude margins slip, Bakken margins fall in their wake — Margins for refiners running highly discounted crude from Western Canada inched lower last week as crude prices rose ahead of expected production cuts by Alberta's premier, Rachel Notley, an analysis by S&P Global Platts showed Monday. Rising Canadian crude prices pulled up the price of North Dakota's Bakken as well, weakening margins enough to possibly slow the current resurgence of crude by rail to the US Atlantic Coast and tamp down demand for nascent crude exports from Buckeye's Perth Amboy, New Jersey, terminal.Notley on Sunday announced an 8.7% cut in Alberta's oil production, which will take 325,000 b/d of Canadian crude off the market beginning in January 2019 for at least three months in order to draw down record high storage and support higher prices.Expectations are for even lower Western Canadian crude refining margins this week as Western Canadian Select, Mixed Light Sweet and Syncrude crude prices continued to gain early Monday.WCS' discount to WTI narrowed by $10/b in early Monday trade, and was heard to trade at the NYMEX calendar-month average minus $19.50/b, compared with Friday trades at minus $29/b. Last week, coking margins for Western Canada Select, Alberta's heavy benchmark crude, fell across US refining centers, with Midwest coking margins dropping over 7% to $35.96/b for the week ended November 30, Platts margin data showed, down from the $42.10/b average margin the week earlier. While rising Bakken prices could curtail volumes of the crude railed to the US Atlantic Coast and the US West Coast, Bakken cracking margins for both regions still far exceed those of alternate crudes. USAC Bakken cracking margins averaged $24.73/b the week ended November 30, compared with the $6.71/b Bonny Light cracking margin. However, both USAC refining margins and nascent demand for exporting Bakken out of Buckeye's Perth Amboy, New Jersey, terminal could be impacted if Bakken prices and/or rail costs rise significantly. Crude by rail to the USAC has regained some of the momentum lost in 2015, when crude-by-rail volumes from the Bakken averaged about 370,000 b/d. September volumes of crude by rail to the USAC averaged 80,000 b/d, Energy Information Administration data showed.
NB Tories survive throne speech vote, plan to end ban on fracking— New Brunswick Premier Blaine Higgs says his government will change regulations to allow limited shale gas development — and could have it done before the end of the year. The Tories' throne speech passed 25-23 in the legislature Friday, a crucial victory on a confidence vote for the minority government. It included a subamendment that urges government to allow limited natural gas development — if the regulations are changed, the Sussex, N.B., area would be the only location east of Ontario where fracking would be allowed. Lowe said developing natural gas supplies would mean increased activity for the LNG terminal near Saint John. "If there's enough gas in Sussex and we can get gas through it and reverse it, then I hope there's more taxes coming for the city," he said. "I told the caucus a week ago what I was going to do and today nobody gave me the finger. So they're still my friends, I guess," Lowe said. Higgs said the vote gives him the ability to amend the province's fracking moratorium. "No further vote (needed) at this time, because we had a vote that accepted doing the shale gas fracturing in the region that we're focused on," Higgs told reporters. There was originally no mention of shale gas or fracking in the throne speech, but Higgs said when the Liberals introduced an amendment to maintain a moratorium imposed in 2014, the Tories had to respond with the subamendment — which was passed. Opponents have raised concerns that shale gas development in the Sussex area could extend into neighbouring Albert County and possibly affect the city of Moncton's watershed. "The air pollution, the water pollution and the climate change gasses that escape from that don't follow political lines on a map. They are going to go where the air and water goes, and of course climate change affects the whole planet," said Jim Emberger, spokesman for the New Brunswick Anti-Shale Gas Alliance.
Mexico’s natural gas production declines as imports from the United States increase - Dry natural gas production in Mexico has fallen 38% since 2012 because of declining reserves, a low price environment, and limited exploration and production of new wells. Mexico’s dry natural gas production was 2.4 billion cubic feet per day (Bcf/d) in October 2018, according to Petróleos Mexicanos (PEMEX). This level is down 7% from year-ago levels, when production averaged 2.5 Bcf/d, and down 21% from two years ago, when production averaged 3.0 Bcf/d. President-elect Andrés Manuel López Obrador from the National Regeneration Movement, a Social Democratic party, is set to take office on December 1. One of his initiatives is to reevaluate Mexico’s current energy reforms, enacted in 2013 by the previous administration. Because of declining production and increasing demand, Mexico has had to rely on natural gas imports—from the United States by pipelines and liquefied natural gas (LNG) shipments by vessel—to meet demand. EIA’s data show that for the month of August, U.S. natural gas pipeline exports to Mexico grew 13% from year-ago levels as a result of several new pipeline projects that have entered service. U.S. pipeline exports to Mexico were 5.1 Bcf/d in August 2018 compared with 4.5 Bcf/d in August 2017. They comprised an average of 60% of Mexico’s natural gas supplies in 2018 through August, compared with 58% for the entirety of 2017. LNG imports are generally more expensive than pipeline natural gas imports because of the infrastructure required to liquefy and re-gasify natural gas and the relatively high transportation costs associated with using specialized LNG vessels. The President-elect has denounced the high cost of LNG. LNG imports into Mexico are currently necessary to meet demand. The interior of Mexico relies primarily on LNG imports from the west coast’s Manzanillo terminal until domestic pipelines connecting to pipeline supplies from the United States are placed in service. More specifically, Wahalajara, the pipeline corridor connecting Permian natural gas from the Waha hub in western Texas to the population centers of Mexico City and Guadalajara, is currently scheduled to be in service in May 2019, according to S&P Global Platts.
Mexico's new president throws down gauntlet to oil majors (Reuters) - Mexico’s new president, Andres Manuel Lopez Obrador, said on Wednesday he would not cancel contracts issued to foreign and national oil companies by his predecessor but challenged them to pump oil quickly or no further oil fields would be offered. Lopez Obrador took office on Saturday, promising to increase the government’s role in the energy industry and roll back what he described as a 36-year neo-liberal era in which successive governments gradually opened up the economy. During the election campaign, he pledged to review the contracts issued under a landmark energy reform for any signs of corruption. He and his team have not said they have uncovered any wrongdoing in the contracts already awarded. “The contracts will not be canceled, so there won’t be a loss of confidence,” he told reporters at a daily news conference. Under Mexican law, the independent oil regulator known as the National Hydrocarbons Commission (CNH) runs the auctions, supervises the contracts and is the only entity that can cancel the contracts. How Lopez Obrador handles the energy industry will be one of the biggest challenges of his six-year term. He has promised to raise oil production from historic lows but has not fully clarified how, beyond promising more investment in the public sector. During the transition the former Mexico City mayor issued a series of abrupt policy changes that battered stocks, bonds and the peso. Despite the new president’s efforts to reassure investors in recent days, markets have yet to recover lost ground. The 65-year-old president, however, did not rule out inviting more private-sector investment to Mexico’s untapped deepwater fields in the Gulf of Mexico even as he sharply criticized the energy reform a few days before in his inauguration speech. He said companies that have already won contracts should hurry up with their investment and with pumping oil. “We can’t keep on giving out territory for the extraction of hydrocarbons if there is no investment and there is no production,” he said, adding he was opposed to companies “speculating” with the contracts. “We want them to demonstrate that they are going to invest and produce oil. We will make a decision based on results,” he said, adding that there will be a three-year “truce,” without giving further details.
Lopez Obrador halts Mexico's upstream auction rounds for three years — Mexico will halt its hydrocarbon auction rounds by three years, new President Andres Manuel Lopez Obrador said Wednesday. "More than an ideological or political situation, it is a practical one," Lopez Obrador said at a webcast press conference. "With the contracts, not a single barrel of oil has been extracted, so we can't continue granting acreage for hydrocarbon extraction if there isn't investment nor production." Since the energy reform was enacted four years ago, contract-holding operators only invested 2% of Pemex's public investment over the same period, said Lopez Obrador, who took office December 1. Lopez Obrador's announced halt is a year longer than the two-year pause previously disclosed by the new Mexican energy secretary Rocio Nahle a week ago. Industry sources have told S&P Global Platts they are concerned the new president was ignoring the long-term nature of the upstream sector. The postponement of auction rounds will have a long-term, material impact on Mexico's oil and gas output, according to a transition report issued by the outgoing administration of Enrique Pena Nieto over the weekend. According to the report, by halting auction rounds by two years, Mexico's output will only reach 2.46 million b/d by 2027, not 3.07 million b/d. Similarly, if auctions continue, Mexico would produce 7 Bcf/d of natural gas by 2028, 640 MMcf/d more than if the lease sales are shelved for two years, it said. Lopez Obrador said he is going to respect the 111 upstream contracts Mexico has signed to date. "What we want is for the awarded companies to show they are going to invest and they are going to produce oil," he said. The great majority of blocks awarded to date are for early exploration acreage in offshore regions. Contract-holding companies will invest $46 billion in exploration and development activities through 2025, according to the report's forecast. As a result, private operators are expected to drill over 100 new exploration and development wells over the coming four years. Lopez Obrador has historically been an opponent of private investment in Mexico's energy sector and the country's recent historical energy reform. The new administration is concerned new operators won't invest and instead speculate on the acreage awarded to date, he added.
Peru oil pipeline remains under siege - State-owned PetroPeru is still struggling to access a segment of its 100,000 b/d northern crude pipeline that was severed by protesters last month. PetroPeru suspended the pipeline operations on 27 November. Canada's Frontera Energy, which uses the line to move crude from block 192 in the northern jungle, began to shut in wells on 3 December. Frontera accounted for roughly one-fifth of the 55,000 b/d of crude produced in Peru in November, according to regulator PeruPetro. Felipe Cantuarias, head of the Peruvian Hydrocarbons Society, said the conflict is not only suppressing production but also harming longer-term investor sentiment. Frontera's contract for block 192 expires in August 2019 and PetroPeru is looking for an investment partner. Cantuarias said the pipeline attack could keep interested companies away. The dispute is having environmental consequences as well. Aerial photos from drones show a large oil spill near the Mayuriaga indigenous community in the Loreto region. PetroPeru estimates that more than 8,000 bl of heavy crude has already spilled into the zone around the Morona pumping station along the 1,100km pipeline. The protests in the community began shortly after 7 October local elections. A group of residents targeted the pipeline in mid-November to call attention to alleged fraud, first by briefly kidnapping oil workers and then sabotaging the pipeline. President Martin Vizcarra's sent a team to negotiate, but protest leaders rejected the overture, demanding the presence of Peru´s prime minister Cesar Villanueva. More than 100 police officers have been dispatched to the area, but authorities are wary of sparking violence. A large-scale protest in June 2009 led to a deadly clash between indigenous protesters and police officers, killing 23 officers and 10 protesters.
Gazprom Export sells another 17 million cu m of Russian gas for Jan delivery — Russia's Gazprom Export sold 17 million cu m of gas on its Electronic Sales Platform on Monday for delivery in January at the German hub Gaspool, according to the latest auction update Tuesday. It brings the sales for Q1 2019 delivery to 117 million cu m since volumes for 2019 delivery were first offered on November 26.The total sold on the ESP since auctions started in late September is now 1.15 Bcm. The relative success of the auctions for Q1 delivery -- the first six days of sales have seen 10% of total ESP sales -- may have prompted Gazprom Export to widen its offering as of Tuesday. The auction set to take place Tuesday offers for the first time volumes for January delivery to the Austrian hub of Baumgarten, or alternative Austrian delivery options at the Austrian virtual trading point and the Oberkappel and Arnoldstein interconnection points.
The EU Weighs Risks of Rising Gas Imports - The EU is facing the perfect storm of dwindling local supply, rising demand and increased dependence on Russian state-owned Gazprom for its supply of natural gas, as analysts and observers mull what, if any governmental action, must be taken. At issue is mainly how output from the Groningen field in the Netherlands will continue to decline, thus making the EU more dependent on both pipeline and liquid natural gas (LNG) from outside the EU borders. According to European Commission data, the EU imported 69 percent of its natural gas in by the first semester of 2018. Over 37 percent of the gas the EU member countries imported by the first semester 2018 came from Russia, while 33 percent and 11 percent came from Norway and Algeria, respectively. Excluding Turkey, the EU imported record high pipeline volumes from Norway and Russia, which increased to 116 billion cubic meters and 169, respectively, in 2017, according to data from Rystad Energy. “We expect Europe to increase its imports over the next years as the Groningen field will continue to decline driven by the announced scale backs,” Sindre Knutsson, senior analyst, gas markets, Rystad Energy. “Post 2020, both Norwegian and UK production is set to decline, strengthening this effect.” Russia aside, the risk of over-dependence on a single supplier is more important than the possible downsides of boosting gas imports overall, said Thierry Bros, senior research fellow, Oxford Institute for Energy Studies, said. Declining gas production in the region is coupled with rising demand, which obviously means the EU will need more gas from different sources — but that not necessarily mean the EU member states will be “overly dependent” per se, Bros said. “So yes, we will be more dependent, but perhaps the right question to ask is how can we make sure we achieve security of supply by vetting the suppliers,” Bros said.
State blocks MP briefing on economic research critical of fracking - A briefing for West Australian government MPs on a report into the economics of fracking from think-tank The Australia Institute was cancelled at the last minute this week, after the report's authors had already flown to Perth. The Australia Institute says two of the report’s three authors were to brief MPs in Parliament House on Thursday, but the state government cancelled the meeting late on Wednesday. Premier Mark McGowan had announced on Wednesday the government would open up roughly five million hectares of WA to fracking, and on Thursday published an opinion piece saying more gas would pave the way for lower gas prices. But the Canberra-based research institute’s report, Economic impacts of unconventional gas in Western Australia, found fracking in WA would bring few jobs, little revenue and could instead increase gas prices. "WA’s moratorium on fracking has been overturned without consideration of economic impacts," it said. "Economic logic, and the lived experience of Queensland and the USA, shows the industry has an incentive to expand as much and as fast as possible. "This has a negative impact on communities, provides few jobs, little revenue and could increase domestic gas prices." Research director Rod Campbell said it was "surprising" the government would cancel the briefing, particularly at such late notice. "The WA government made no consideration of the social and economic impacts of fracking, even though it has been very disruptive in the eastern states," he said. "Our research shows that fracking does not bring jobs. The gas industry employs less people per dollar of output than any other industry. If employment growth is the policy goal, then investment in virtually any other industry is will deliver better results." Mr Campbell pointed to Queensland, where he said there was a loss of 1.8 agricultural jobs for every new gas job created in rural areas: "gas jobs come at the cost of displacement of jobs in other industries."
'Premier falls for myth of fracking'- protesters unite across WA - To coincide with the release of the inquiry last week, Mr McGowan said the moratorium would be lifted on existing petroleum titles, that landowners and traditional owners would get veto rights, and royalties would go into a fund for renewable energy. The move ignited fury among anti-fracking campaigners who had hoped the government would not break its promise. More than 300 people protested the announcement at City Beach on Sunday morning fighting for a statewide ban on fracking, holding banners accusing the government of delivering a broken promise. Lock the Gate Mid West region coordinator Simone van Hattem said it was shocking that gas companies had once again been put ahead of regional communities’ wants. “Polling and community declarations show that people don’t want fracking, we’ve been fighting this for years, with 23 communities declaring themselves gasfield free,” she said.
U.S. Oil Majors To Break The Contract Of The Century - Since the oil industry started to recover from the 2014 price crash, U.S. supermajors ExxonMobil and Chevron have been re-aligning their global operations with their longer-term priorities, betting more on the shale patch at home and on several strategic projects worldwide. The companies are now looking to exit Azerbaijan, including the country’s biggest oil field and some pipeline infrastructure. This would mark the withdrawal of U.S. companies from the Azeri oil industry a full 25 years after western majors, including five U.S. firms, signed what is known as “the Contract of the Century” in the former Soviet republic. As part of a re-prioritization of its global operations, ExxonMobil is looking to sell its minority stake in the giant Azeri oil field Azeri-Chirag-Gunashli (ACG) in the Caspian Sea, hoping to obtain as much as US$2 billion for its interest, Reuters reported on Tuesday, citing banking and industry sources. Chevron, for its part, is reviewing its global asset portfolio and has “decided to initiate the process of marketing, with a view to a potential sale, of our Chevron affiliate interests in the Azeri Chirag and Deep Water Gunashli (ACG) project and the Baku-Tbilisi-Ceyhan (BTC) Pipeline,” the company said in a statement to Reuters.Chevron has an 8.9 percent stake in the BTC pipeline, which carries oil from the ACG field and condensate from Shah Deniz across Azerbaijan, Georgia, and Turkey.Chevron also owns a 9.6-percent stake in the ACG oil field, and is currently the third-largest shareholder behind field operator BP and Azeri state firm SOCAR. Exxon holds 6.8 percent in the field, while the other foreign partners in the venture include the operator BP, INPEX, Equinor, TP, ITOCHU, and ONGC Videsh. Azeri-Chirag-Gunashli was Azerbaijan’s first offshore oil Production Sharing Agreement (PSA) contract with Western majors, and was hailed as “the Contract of the Century”. The country and a consortium of foreign oil companies signed a 30-year deal in 1994 to develop the field. Exxon was part of the initial group of companies that signed the contract with Azerbaijan, which also featured four other U.S. companies at the time— Amoco, Unocal, Pennzoil, and McDermott. Last year, the deal was extended to 2050.
Qatar to quit OPEC after more than 57 years, denies decision related to Saudi-led boycott -- Qatar announced plans to pull out of OPEC on Monday, just days before a crucial meeting between the influential oil cartel and its allies.Speaking at a news conference, Qatar's Energy Minister Saad al-Kaabi said the country would withdraw from OPEC on January 1, 2019, ending a membership which has stood for more than half-a-century.The decision comes after Qatar reviewed ways in which it could improve its global standing and plan its long-term strategy.While Qatar is one of OPEC's smallest oil producers, especially when compared to the likes of de facto leader Saudi Arabia, it is one of the world's largest producers of liquefied natural gas (LNG).The country's energy minister said Monday that the move represents a "technical and strategic" change, Reuters reported, and was not politically motivated.Qatar's Al-Kaabi also said the decision was not linked to the 18-month political and economic boycott of Doha.Since June 2017, OPEC kingpin Saudi Arabia — along with three other Arab states — has cut trade and transport ties with Qatar, accusing the country of supporting terrorism and their regional rival, Iran. Qatar denies the claims, saying the boycott hampers its national sovereignty.The Middle East-dominated group's final meeting of the calendar year is now expected to be Qatar's last. It has been an official OPEC member si nce 1961.
Qatar to leave OPEC and focus on gas as it takes swipe at Riyadh (Reuters) - Qatar said on Monday it was quitting OPEC from January to focus on its gas ambitions, taking a swipe at the group’s de facto leader Saudi Arabia and marring efforts to show unity before this week’s meeting of exporters to tackle an oil price slide. Doha, one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter, is embroiled in a protracted diplomatic row with Saudi Arabia and some other Arab states. Qatar said its surprise decision was not driven by politics but in an apparent swipe at Riyadh, Minister of State for Energy Affairs Saad al-Kaabi said: “We are not saying we are going to get out of the oil business but it is controlled by an organization managed by a country.” He did not name the nation. Al-Kaabi told a news conference that Doha’s decision “was communicated to OPEC” but said Qatar would attend the group’s meeting on Thursday and Friday in Vienna, and would abide by its commitments. He said Doha would focus on its gas potential because it was not practical “to put efforts and resources and time in an organization that we are a very small player in and I don’t have a say in what happens.” Delegates at OPEC, which has 15 members including Qatar, sought to play down the impact. But losing a long-standing member undermines a bid to show a united front before a meeting that is expected to back a supply cut to shore up crude prices that have lost almost 30 percent since an October peak. “They are not a big producer, but have played a big part in (OPEC’s) history,” one OPEC source said. It highlights the growing dominance over policy making in the oil market of Saudi Arabia, Russia and the United States, the world’s top three oil producers which together account for more than a third of global output. Riyadh and Moscow have been increasingly deciding output policies together, under pressure from U.S. President Donald Trump on OPEC to bring down prices. Benchmark Brent is trading at around $62 a barrel, down from more than $86 in October. “It could signal a historic turning point of the organization towards Russia, Saudi Arabia and the United States,” said Algeria’s former energy minister and OPEC chairman, Chakib Khelil, commenting on Qatar’s move.
Factbox- Qatar exits OPEC to focus on LNG — Qatar's decision to become the first Middle East member country to leave OPEC and focus on its core strength of gas exports has stunned the cartel. Qatar's energy minister Saad Al-Kaabi said Monday that the gas-rich sheikhdom will exit the oil producer group on January 1 after 57 years of membership to concentrate on building its position as the world's top LNG supplier. OPEC is scheduled to meet on December 6-7 and potentially agree to cut output to support falling prices. S&P Global Platts Analytics forecasts a 1.2 million-1.4 million b/d reduction from October levels. "This suggests that Qatar may have an agenda to raise production whilst others in OPEC are curbing production, although Qatar's oil output has been very steady in recent years with limited prospects of increases (given maturing fields)," said Ehsan Khoman, Head of MENA Research and Strategy at MUFG. The following are the key facts around Qatar's energy repositioning.
- **Qatar Petroleum plans to raise its total production to 6.5 million b/d of oil equivalent (boe/d) in the next decade, from around 5 million boe/d at present.
- **A relatively small crude producer within OPEC, Qatar pumped just over 600,000 b/d last month. This accounts for less than 2% of OPEC's production, according to an S&P Global Platts survey. Its three main crude grades are Al Shaheen, Qatar Marine and Qatar Land, which are shipped almost exclusively to refiners in Asia/Far East.
- **Qatari condensate, natural gas liquids and non-conventional output -- mostly from the North Field - averaged around 1.24 million b/d in 2017. This is the second largest non-crude OPEC output behind Saudi Arabia, according to the International Energy Agency. The IEA estimates Qatar's non-crude liquids output will increase by 70,000 b/d to above 1.30 million b/d by 2023.
- **Adding in natural gas, supplied to its neighbors by pipeline and globally as LNG, which amounts to around 3.2 million boe/d, and the nation's output rises to the equivalent of 5 million boe/d.
- **Qatar is the world's largest LNG supplier, having exported 78.8 million mt of LNG in 2016. This accounts for more than 30% of a total global supply of 257.8 million mt. An increasing share of its production is being delivered to emerging Middle Eastern buyers, including Egypt and Jordan. Qatar has been exporting about 300 million cu m/d of LNG so far in 2018.
- **Doha plans to boost LNG output to 110 mt/year by 2024 by adding liquefaction capacity. In 2018, Qatar contracted 35.6% of its LNG to Europe, 56.9% to Asia Pacific, 21.6% to the Middle East, with the rest to North America and unknown destinations, according to S&P Global Platts LNG Navigator.
- **Saudi Arabia and the United Arab Emirates have maintained a political and economic boycott on Qatar since June 2017, accusing it of supporting terrorism. Doha denies the charges and says the boycott is aimed at impinging on its sovereignty. Qatar insists the move to leave OPEC is a strategic, not a political decision.
- **Qatar supplies 2 Bcf/d of gas to the UAE and Oman via the Dolphin pipeline. With a capacity of 3.2 Bcf/d, it is the only pipeline transporting natural gas across borders between Arabian Peninsula countries.
- **Qatar Petroleum plans to develop a new gas project in the southern sector of the North Field. The company has entrusted Qatargas to execute this megaproject. In January, Qatar merged its two LNG producers -- Qatargas and RasGas -- under a single operator, Qatargas.
- **Qatar's huge offshore gas and condensate field, known in that country as North Field, straddles its maritime border with Iran, which calls the field South Pars. Together, the two sides of the field contain as much as 1.4 Tcf of proven gas reserves, making it the world's largest conventional non-associated gas field. Abu Dhabi is reliant on North Field gas.
Qatar quitting OPEC means the oil cartel is now just a 'two-member organization,' oil analyst says --The future of OPEC is on shaky ground, an analyst told CNBC on Monday, after Qatar abruptly announced it would sever ties with the influential oil cartel after almost six decades. Qatar's Energy Minister Saad al-Kaabi said at a news conference Monday that Doha would leave OPEC on January 1, 2019. The decision comes just days before OPEC and its allies are scheduled to hold a much-anticipated meeting in Vienna, Austria. "This is big," Andy Critchlow, head of EMEA energy content at S&P Global Platts, told CNBC's "Squawk Box Europe." "In the 20 years that I've been covering OPEC, I can't think of anything that is bigger than this (and) that is a more systemic risk to the future of OPEC." Qatar's energy minister said the country would leave OPEC and focus on gas production. He denied the move was linked to an 18-month political and economic boycott of the country.Since June 2017, OPEC kingpin Saudi Arabia — along with three other Arab states — has cut trade and transport ties with Qatar, accusing the country of supporting terrorism and its regional rival Iran. Qatar denies the claims, saying the boycott hampers its national sovereignty.The Middle East-dominated group's final meeting of the calendar year is now expected to be Qatar's last. It has been an official OPEC member since 1961.Qatar is not a major oil producer when compared to other OPEC members. But, Critchlow said, when looking at the small Gulf country's total energy output, it is on course to produce more than 6 million barrels of oil equivalent per day by 2022. "This is a major supplier of energy to the world," Critchlow said, highlighting Qatar's status as one of the world's largest producers of liquified natural gas (LNG).He also underlined the importance of Qatar's tactful approach to negotiating energy policy with regional rivals in recent years, saying the country had often acted as a "diplomatic bridge" in the Middle East-dominated group. "OPEC really doesn't exist anymore, it is a two-member organization — Russia and Saudi Arabia,"
Qatar's OPEC Exit Shows Growing Sway of Moscow-Riyadh Oil Axis -- When Qatar shocked the oil world on Monday by announcing plans to quit the OPEC cartel after 57 years, its energy minister said the decision was made for "technical" reasons.That story didn’t last long. A few hours later, a leading member of the country’s ruling family used Twitter to blast the Organization of Petroleum Exporting Countries, a group where Qatar was once a diplomatic force despite being a relative minnow in oil production terms, accounting for less than 2 percent of total output."The withdrawal of Qatar from OPEC is a wise decision, as this organization has become useless and does not bring us anything," said former prime minister Hamad bin Jassim bin Jaber Al Thani. "It is just being used for purposes that harm our national interest.”His real target was Saudi Arabia, by the far the biggest producer inside OPEC. For decades the kingdom’s power was cloaked in a desire for consensus that saw the group through wars, sanctions and revolutions. But the more aggressive foreign policy pursued since the rise to power of Crown Prince Mohammed bin Salman drove Qatar out. "The longstanding Saudi-led economic and political boycott of Qatar is bound to have played a large part in the decision," As Qatar was finishing up plans to leave, Russian and Saudi officials were meeting in Moscow to hammer out a bilateral deal to extend the so-called OPEC+ agreement first struck in 2016. That pact turned around the oil market, but depended so heavily on the world’s two largest exporters that others felt like bystanders. "There is a sense of frustration prevailing, especially among small producers,” said Hossein Kazempour, Iran’s OPEC governor, who has represented Tehran’s interests at the cartel for decades and been a consistent critic of Saudi oil policy. Even the larger OPEC members can do little to influence decisions. Iran’s production is constrained by U.S. sanctions. Venezuela, a founder member and once a major force, has been undone by years of economic crisis and collapsing output. Libya’s oil industry has experienced prolonged turbulence since the fall of Muammar Qaddafi’s regime in 2011.
US legislation aimed at reining in OPEC's power over oil markets is a 'big concern,' Barclays says -- The risk of U.S. legal action against OPEC could prompt more members of the influential oil cartel to sever ties with the group, according to the head of energy markets research at Barclays. Washington is reportedly considering legal claims against OPEC for allegedly manipulating the energy market.If passed, the proposed No Oil Producing and Exporting Cartels Act — more commonly referred to as NOPEC— could revoke the sovereign immunity that has long shielded members of the Middle East-dominated group from U.S. legal action."This is a big concern," Barclays' Michael Cohen told CNBC's "Squawk Box Europe" on Tuesday."I think it's something that could very easily weigh on the messaging of this meeting that is going to happen on Thursday and Friday," he added.The NOPEC bill would amend U.S. antitrust laws to allow OPEC members to be sued for collusion. OPEC controls production from member nations by setting output targets. Historically, former U.S. presidents have opposed NOPEC legislation. But, some external observers say President Donald Trump could give the bill fresh momentum after repeatedly attacking the group for keeping oil prices "artificially very high."
Iraq could be the next to break ranks with OPEC, analyst says --Compliance across OPEC is in question amid conflicting interests regarding oil production cuts and an abrupt withdrawal announcement from Qatar. While the tiny Gulf kingdom's departure is largely symbolic and unlikely to lead to further exits, a top energy analyst believes that if any country were to break ranks next, it would be Iraq. "I think in terms of all the OPEC countries, to me the one that stands out over the last six to eight months is Iraq," Michael Cohen, head of energy markets research at Barclays bank, told CNBC's "Squawk Box Europe" on Tuesday. "Iraq has been out of line with its target frequently... so if restrictions to cut were too stringent, Iraq might feel it in its best interest to no longer be a member of the organization," Cohen added. As the 15-member OPEC's second-largest oil producer and still suffering from swathes of debilitated infrastructure and poverty after years of war and sanctions, Iraq has an incentive to keep its taps turned on. According to the International Energy Agency, more than 90 percent of Iraq's government revenue comes from oil. In pointing to Iraq, Cohen cited the visits of Saudi oil minister Khalid al-Falih to Baghdad over the last two months, although he admitted he did not know the content of officials' conversations, which were not all made public. "We're not privy to the nature of those conversations, but clearly there is a lot of concern in terms of keeping Iraq to what it says," Cohen said.
Iraqi crude exports slump to seven-month low in November at 3.372 mil b/d — Federal Iraq's crude oil exports fell to 3.372 million b/d in November, the lowest since April this year, as loadings were affected by rough weather, according to a statement from the oil ministry released over the weekend. Not registered? Exports from the Persian Gulf terminals fell to 3.363 million b/d while loadings of Kirkuk crude transported through the Kurdistan-Turkey pipeline rose to 9,000 b/d, after pipeline exports from the Kirkuk fields resumed for the first time since October last year. November exports by the federal government of Iraq dropped by 106,000 b/d compared to October and were down by 211,000 b/d compared to August when they reached an all-time high of 3.583 million b/d. The fall in exports is attributed to a dip in loadings from its southern terminals as five days of rough weather during the month affected berthing and loadings. On November 09, shipments of Basrah Heavy and Basrah Light were halted, according to shipping sources. Loadings from Iraq's Khor Al-Amaya terminal continue to remain due to pipeline leaks and overall maintenance. Exports from this terminal have been suspended since the start of 2018. Federal Iraq saw its first exports from Ceyhan since it was suspended unilaterally by the semi-autonomous Kurdistan Regional Government in June 2017. But the government of Iraq and the KRG agreed a tentative deal in mid-November under which the latter has given assurances that it will transfer all federal Iraqi crude to storage tanks operated by North Oil Company at Ceyhan for Iraq's State Oil Marketing Organization to sell. Shipping sources told S&P Global Platts the accumulated quantity in the SOMO tanks had now reached 600,000 barrels and this will be pumped to the Turkish refinery at Kirikkale through the pipeline linking it to the terminal.
Putin Confirms No New Oil Production Cuts; Hopes For US, UK Detente - Russian President Vladimir Putin praised Trump, pummeled Poroshenko, and poured cold water on oil market bulls' hopes in a statement following the G-20 meetings. Putin began by confirming what White House Press Secretary Sanders noted earlier - he and Trump had spoken broefly on the sidelines of the G-20 and discussed the Ukraine incident. Putin added that "Trump is not afraid of [him]" and expressed "pity that he could not have a full format meeting with President Trump" pointing out that "Russian needs to maintain dialog with US," and "hopes to meet [Trump] when US is ready." Putin also mentioned Russia's relationship with the United Kingdom, noting that "UK is an important partner for Russia" adding that he "hopes to overcome differences, to normalize relations with UK in the near future." But perhaps the most important aspect of Putin's comments - related to markets - was his statement on crude production cuts. Russian news service RIA noted earlier that Putin and Saudi Arabian Crown Prince Mohammed bin Salman (MbS) discussed oil, haven’t taken concrete decisions yet, including production cuts, Kremlin’s foreign police aide Yuri Ushakov said. And Putin just confirmed that there are no additional cuts over and above the OPEC+ Vienna Accord levels currently in place:
China data: Russia tops the supplier list to independent refineries in Nov — Russian crude oil shipments by China's independent refineries rose 12.8% on month to a historical high of 2.84 million mt in November, once again the top supplier for the sector, S&P Global Platts monthly survey showed. Meanwhile, Russian ESPO imports hit a fresh record high of around 2.47 million mt last month, up 28.9% on month. This accounts for about 87% of the total imports from Russia, with the rest being Urals and Sokol.Those ESPO barrels were imported by 14 buyers, compared with 1.92 million mt of ESPO imports by 12 independent refineries in October. ESPO crude loaded from Far East Russia -- which has the shortest voyage to China and has good yields of gasoil -- is usually the first choice for Shandong independent refineries when considering imports. However, with the buying interest slowing down since October, premiums for the grade have fallen recently, according to market sources. Premiums for ESPO against ICE Brent Futures on a DES Shandong basis for end January loading cargoes this week were around $2.8-3.0/b, down from around $3-3.5/b in early November, independent refinery sources said. The ESPO crude is a good feedstock for producing low vapor gasoil to meet winter demand, due to its low pour point. The heavy inflows from Russia in November have pushed up the total imports from the country by 7.4% on year to 17.76 million mt over January-November.This is low compared with a jump of 93.2% for imports from Brazil. Imports of Brazilian crudes have increased to around 14.7 million mt over January-November, making it the second top supplier to China's independent refineries.Meanwhile, Brazil's Petrobras will start to export a new grade of crude oil, known as Buzios from end 2018. Cargoes of the grade is likely to arrive in China end January, according to market sources. Buzios is a medium heavy crude, rich in middle and heavy distillates, with an API gravity of around 28.4 degrees. The sulfur content is around 0.31%. "The grade has similar quality as Lula, but is offered at relatively lower premiums as it is new in the market," a trader source said. Lula was the top grade imported by China's independent refineries from Brazil, totaling 9.7 million over January-November, up 190.2% on year. But imports from traditional suppliers Angola and Venezuela dropped by 3.6% and 20%, respectively, from 2017 over the same period.
China oil traders await directions from Beijing to resume US crude purchases — Chinese state-owned refiners were awaiting more instructions from Beijing before resuming US crude purchases while commodity trading houses began evaluating their options in the physical market after the trade agreement signed over the weekend. Oil traders were cautious about resuming US crude supply to China due to market uncertainties and concerns over a narrow trading window until March, but market participants were keen to exploit the opportunity, several traders and refinery executives said, requesting anonymity. "Theoretically, imports from the US are unlikely to resume immediately due to the long trading cycle between the two countries, and the three-month window from December 1 is too short," a Beijing-based crude oil trader said, citing risks of cargoes being stranded on the water. But the Chinese government was likely to nudge state-owned companies to increase US crude imports to express sincerity following the trade deal, he added. State-owned oil refineries were major consumers of US crude, purchased largely through Unipec, the trading arm of Sinopec, China's largest refiner by capacity. Their crude procurement strategy depends on both the government's mandate and commercial requirements. China's crude oil imports from the US fell to zero in October for the first time since February 2017, latest data released by the General Administration of Customs showed. November volumes also remained thin. As of Tuesday afternoon, the VLCC New Courage, carrying about 1 million barrels of US-origin Southern Green Canyon crude, was waiting for a berth in Lanshan port of Rizhao city in the eastern Shandong province, according to traders. New Courage departed the US Gulf Coast in late September and loaded a second time at Aruba in the Mediterranean in early October, according to S&P Global Platts vessel tracking software cFlow. It discharged part of its cargo at Zhoushan port in eastern Zhejiang province, before heading to Lanshan.
China's Unipec to buy U.S. oil after Xi-Trump tariff truce (Reuters) - Chinese oil trader Unipec plans to resume U.S. crude shipments to China by March after the Xi-Trump deal at the G20 meeting reduced the risk of tariffs being imposed on these imports, three sources with knowledge of the matter said. The sources told Reuters that Unipec - trading arm of state refiner Sinopec (600028.SS) - is looking to import U.S. oil by March 1, which marks the end of a 90-day negotiating period agreed by the leaders of the world’s two biggest economies. China’s crude oil imports from the United States ground to a halt in October as this year’s trade war between the two countries escalated. “Chinese buyers who want to buy U.S. crude will rush to import the oil during this window,” a senior executive from Asia’s largest refiner Sinopec said, adding that the oil has to arrive in China before March 1. “Oil prices are low, so it makes economic sense to store some crude as commercial inventories,” said the executive, who asked not to be named. Sinopec said it has a policy not to comment on specific trade deals. Unipec did not respond to an email. Oil prices have slumped by around a third since early October amid an emerging glut, triggering expectations that the Organization of the Petroleum Exporting Countries (OPEC) will agree to supply cuts at a meeting this week. [O/R] It was unclear how much oil Unipec - China’s largest crude oil importer - would order from the United States, but one of the sources said the company could lift a record volume of oil in January. China’s previous record for a month came in January 2018, when it imported about 472,000 barrels per day (bpd) from the United States, according to Chinese customs data. Before the trade dispute erupted in mid-2018, China had become the largest importer of U.S. crude. China imported on average 325,000 bpd of U.S. crude in the first nine months of 2018 before imports fell to zero in October, customs data shows.
Iran won’t discuss its OPEC quota while under sanctions: Iran will not discuss its OPEC quota as long as it is under sanctions, Iranian Oil Minister Bijan Namdar Zanganeh said on Wednesday. “As long as Iran is under sanctions, the Islamic Republic’s OPEC quota will not be discussed with anyone,” Zanganeh said, speaking ahead of a meeting of the Organization of Petroleum Exporting Countries in Vienna which is due to debate oil production cuts, Reuters reported. OPEC meets on Thursday, followed by talks with allies such as Russia on Friday, amid a drop in crude prices caused by global economic weakness and fears of an oil glut due largely to a rise in US production. The exporters’ group and its allies, known as OPEC+, see themselves at the same juncture they did in 2016. However, this time there is less certainty of a consensus to cut amid the exit of Qatar on January 1. Qatar was on board in 2016 when OPEC agreed to reduce inventories by slashing 1.2 million barrels per day out of its production. On top of that, allies cut 600,000 bpd. Four sources said OPEC+ is working toward a deal to reduce oil output by at least 1.3 million barrels per day. The sources added that Russia’s resistance to a major cut was so far the main stumbling block. Qatar said on Monday it will quit OPEC to focus on gas in a swipe at Saudi Arabia, the de facto leader of the oil exporting group which is trying to show unity in tackling an oil price slide.
The price of black gold - Ever since the former president of the United States of America, Richard Nixon, delinked the US dollar from gold, the currency, paradoxically enough, turned into the dominant means of payment in world trade. The details of that story were discussed in this column and do not call for repetition. Suffice it to say that the most significant impact of Nixon reneging on the ‘gold standard for the dollar contract’ was felt in the world oil market. Producers began not only to quote the price of crude oil in units of dollars, but also to demand that US dollars be actually used to compensate them for their oil supply. It is against this backdrop that Donald Trump’s sanctions on Iran have to be viewed. The sanctions will not only prevent Iran from selling oil against dollars, but also put a stop to other nations doing business with the country. Amongst others, several European countries have been affected by Trump’s edict. These are France (in the automobile and aviation sectors and in investment in the South Pars gas field in the Persian Gulf), Germany (in automobiles), Italy (in railways and ship building) and possibly others. Why should economically advanced countries such as France and Germany be worried about the sanctions? The answer is clear. Like any other industrialized country, they need oil as well to run their economies and the US dollar is pretty much the only currency with which oil has to be paid for. The commanding position of the US lies in the fact that it has the power to instruct banks and other financial institutions to refuse to sell dollars. This means that world-renowned firms like Airbus and Volkswagen will lose access to dollar trade, which in turn will have ugly consequences for France and Germany, since they need to use the dollars earned by their industries to purchase oil to keep the same industries running. It is no wonder, therefore, that these countries retracted from their business deals with Iran with alacrity.
Oil just had its worst month in a decade, and its next move may depend on Saudi Arabia and Trump -- Last month was crude oil's worst in a decade, battered by supply concerns and global politics.West Texas Intermediate, or U.S. crude, lost 21 percent in November, tumbling to its lowest level in a year and logging its worst performance since October 2008.After sinking below $50, the days ahead could bring some relief, according to Helima Croft, global head of commodity strategy at RBC Capital Markets. This week, the cartel of oil producing nations known as OPEC will make a decision on future levels of production that may determine where prices head in the near term."What we really need to get on the path to $60 is we need to see a substantial cut coming out of OPEC... at the Thursday meeting," Croft told CNBC's "Futures Now" on Thursday. "We anticipate that OPEC will pull a significant quantity of barrels, at a minimum a million barrels." OPEC, which includes top producer Saudi Arabia, is set to meet in Vienna on Thursday. Along with non-OPEC member Russia, oil producing countries are expected to agree to a supply cut to counteract tumbling oil prices. "The one cloud over this is really Saudi Arabia and their relationship with President Trump," added Croft. "President Trump has made the explicit ask to Saudi Arabia to keep the taps open, so at the eleventh hour that they potentially try to force the Saudi crown prince to keep the barrels on the market," she said. "I think that's the big concern." Croft said that Saudi Arabia will probably act in their "economic self-interest" and agree to a production cut at the OPEC meeting — though they will have to walk a tightrope to avoid offending Trump. The International Monetary Fund estimates Saudi's breakeven point at $88 a barrel for Brent oil, which is almost half of current levels.If OPEC's smaller producers join Saudi in agreeing to a production cut, crude oil could surge, Croft told CNBC. "We heard that Russia will probably go along and then there are these countries that have exemptions – Libya, Nigeria, will they participate in a cut?" she asked. "If they do something higher around 1.5 million, I think that's a catalyst on Friday to start moving higher," explained Croft.
Hedge funds finish selling crude but increasingly bearish on diesel (Reuters) - Hedge fund managers had largely completed the recent wave of selling in crude oil futures and options by the middle of last week but there were heavy sales of derivatives linked to middle distillates. Hedge funds and other money managers were net sellers of 41 million barrels in the six most important futures and options contracts linked to petroleum prices in the week to Nov. 27 (https://tmsnrt.rs/2Rxg24a).Funds have been net sellers of 649 million barrels in the last nine weeks, the largest reduction over a comparable period since at least 2013, when the current data series began.But there were clear signs the wave of selling was ending, at least in crude, with combined sales in Brent and WTI of just 12 million barrels last week, the lowest weekly total since September.Portfolio managers sold 14 million barrels of Brent, but for the second week running they bought NYMEX and ICE WTI, boosting holdings by 2 million barrels.Managers who shorted NYMEX WTI between late August and early November covered some open positions, with shorts down to 78 million barrels from a recent peak of 94 million on Nov. 13. As the selling pressure has eased, oil prices have stabilised, suggesting the market may have found a temporary floor around $50 for WTI and $60 for Brent. But there were continued heavy sales of futures and options contracts linked to middle distillates such as gasoil and diesel, in a worrying sign for the global economy.
Heavy Sweet Oil Rises as Unlikely Star - Dense, low-sulfur oil, known in industry parlance as heavy sweet crude, is fetching increasingly stronger prices relative to benchmark lighter grades. For example, Angola’s Dalia traded at just 10 cents below Brent oil last month, up from a discount of $4.50 in January 2016, according to S&P Global Platts. Australian Pyrenees traded at $4 more than Brent, its widest premium in more than three years, according to trading sources. The shifting values are indicative of the powerful forces that are pulling apart long-held relationships between oil prices around the world, in particular the U.S. shale boom and an overhaul of marine fuel regulations. Heavy sweet crude has come into favor because it yields a lot of diesel and low-sulfur fuel oil when it’s refined. Those fuels are seen coming into heavy demand as new rules due to take effect in 2020 mean ships will use them more as an alternative to high-sulfur fuel oil, which is produced readily from sour crude. What’s more, lighter prices are under pressure because of a glut of U.S. shale oil and the gasoline it yields in abundance. “What’s really in the sweet spot are heavy sweet crudes, which is offshore Angola and Brazil,” Martijn Rats, an analyst with Morgan Stanley, said in an interview. “Those should trade very strongly, but it’s a relatively small part of the oil market.” Only about 500,000 barrels a day of heavy sweet oil are exported globally, accounting for just 1 percent of total seaborne trade, according to Matt Smith, director of commodity research at ClipperData LLC. Angola, Brazil and Chad are among the biggest sources. Driving the focus on crude quality is the spread between the two most prevalent oil products, gasoline and diesel, which historically have had similar values. Gasoline futures in New York tumbled in November to nearly $25 a barrel less than diesel, the largest discount since 2014.Most of the growth in crude production in recent years has come in the form of light shale oil in the U.S., while heavier exports from Iran and Venezuela are in decline because of sanctions and political disarray. That’s helped boost gasoline production and sent stockpiles of the fuel in the U.S. to a record seasonal high.
Oil prices surge after US, China agree trade war ceasefire --Oil prices jumped by more than 5 percent on Monday after the United States and China agreed a 90-day truce in a trade dispute, Canada's Alberta province ordered a production cut, and as exporter group OPEC looked set to reduce supply.U.S. light crude oil rose $2.92 a barrel to a high of $53.85, up 5.7 percent. The contract last traded $2.12, or 4.2 percent, higher at $53.05.Brent crude rose 5.3 percent or $3.14 to a high of $62.60. It was up $2.36, or 4 percent at $61.71 shortly after 9 a.m. ET (1400 GMT).China and the United States agreed during a weekend meeting in Argentina of the Group of 20 leading economies not to impose additional trade tariffs for at least 90 days while they hold talks to resolve existing disputes.The trade war between the world's two biggest economies has weighed heavily on global trade, sparking concerns of an economic slowdown.Crude oil has not been included in the list of products facing import tariffs, but traders said the positive sentiment of the truce was also driving crude markets. Oil also received support from an announcement by the Canadian province of Alberta that it would force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), to deal with a pipeline bottleneck that has led to crude building up in storage."From Argentina to Alberta, the oil market news is about supply curtailments," said Norbert Rücker, head of commodity research at Swiss bank Julius Baer. "A brightening market mood will likely extend today's price rally in the very near term."OPEC meets on Dec. 6 to decide output policy. The group, along with non-OPEC member Russia, is expected to announce cuts aimed at reining in a production surplus that has pulled down crude prices by around a third since October. "Markets are expecting to see a substantial production cut after Russian President Vladimir Putin said his country's cooperation on oil supplies with Saudi Arabia would continue," Within OPEC, Qatar said on Monday it would leave the producer club in January. Qatar's oil production is only around 600,000 bpd, but it is the world's biggest exporter of liquefied natural gas (LNG). The Gulf state has also been at loggerheads with its much bigger neighbor Saudi Arabia, the de facto OPEC leader.
Oil Surges on US-China Trade Truce, OPEC Cut Speculation, Alberta Output Pledge - Global oil prices surged Monday, lifting the shares of major producers around the world, as investors bet a trade truce between the U.S. and China, as well as possible production cuts from OPEC, will reverse the market's steep autumn decline heading into 2019. Crude bulls were also supported by news that the producers in the Canadian province of Alberta, which ships the bulk of its oil to the United States, to trim output by around 325,000 barrels, nearly 9% of its daily total, starting next year in order to address a bottleneck that has tested storage capacity and troubled government officials concerned over "fiscal and economic insanity", according to Premier Rachel Notley. However, some of the markets gains were pared slightly upon news that Qatar, a relatively small OPEC member that produces about 600,000 barrels of crude per day, will leave the cartel on January 1.That said, both Saudi Arabia and Russia, an non-OPEC state that nonetheless co-operates frequently with the group's agenda, agreed over the weekend G20 to push for an extension of current production cuts into 2019, adding further upward pressure to prices ahead of their two-day meeting that begins Thursday in Vienna."Regarding oil prices and our agreements. Yes, we have an agreement to extend the deal," Russia President Vladimir Putin told reporters Saturday in Argentina. "No final agreement has been reached on output, but we will work on this together with Saudi Arabia." Brent crude contracts for January delivery, the global benchmark, jumped 4% on Monday changing hands at $61.81 per barrel. West Texas Intermediate contracts for the same month, which are more tightly linked to U.S gas prices, rose 4.63% to $53.29 per barrel.
Oil Jumps Most Since June on Saudi-Russian Pact, Trade War Truce - Oil surged the most in more than five months as Saudi Arabia and Russia extended a cooperation pact and U.S.-China trade tensions cooled.Unprecedented supply cuts in Canada also drove prices higher.Futures in New York advanced 4 percent Monday, bouncing back from the worst monthly loss in a decade. Although Russia and Saudi Arabia have yet to confirm any fresh cuts, their agreement opened the door for a deal when OPEC and allied producers meet this week in Vienna.Crude prices plunged over the past two months on fears of a global oversupply. This weekend’s agreement between Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin buoyed those hoping for an output cut enough to shrug off more ambiguous signs on Monday, including Qatar’s announcement that it would quit OPEC.“There’s going to be a cut, I think it’s going to be more than people expected, and I think the market realized that today,” said Bob Iaccino, chief market strategist at Chicago-based Path Trading Partners. For a time, oil pared gains on Monday after an OPEC advisory panel was said to make no recommendation for action and people familiar with negotiations said Russia and the Saudis still haven’t agreed on details of a cut. Iranian OPEC Governor Hossein Kazempour Ardebili, meanwhile, raised doubts about whether producers can reach unanimity in Vienna. Over the weekend, U.S. President Donald Trump and his Chinese counterpart Xi Jinping called a pause in their trade dispute after a dinner at the G-20 event. Alberta Premier Rachel Notley followed on Sunday by announcing the Canadian province would order local producers to curb production by 325,000 barrels a day starting next month.
Oil Rides Biggest 2-Day Gain Since June | Rigzone - Oil headed for its biggest two-day advance since June as concerns over a supply glut eased on hopes that OPEC and its allies will strike a deal to stabilize the market. Futures in New York rose as much as 1.5 percent, extending Monday’s 4 percent gain. An agreement between Saudi Arabian Crown Prince Mohammed bin Salman and Russian President Vladimir Putin over the weekend raised the possibility of an output accord when OPEC and its partners meet in Vienna on Dec. 6. Prices also received a boost after Canada’s Alberta province announced plans to cut production by 325,000 barrels a day. Crude is rebounding from the worst monthly drop in a decade on growing optimism the world’s top oil exporters will tackle the risk of a glut. Still, Moscow and Riyadh have yet to agree on details, including the size of potential output cuts. A U.S.-China trade truce also sparked bullish sentiment across global markets, pulling the American benchmark out of “oversold territory” for the first time in almost a month. “Even if Russia shows a willingness to refrain from ramping up production, that’s a positive sign for Saudi Arabia and the rest of OPEC,” “Oil’s also getting a boost from the easing trade tensions between America and China, as well as Canada’s output cuts which will lift Western Canadian Select’s discount to the U.S. marker.” West Texas Intermediate for January delivery rose as much as 77 cents to $53.72 a barrel on the New York Mercantile Exchange, and was at $53.51 at 7:47 a.m. in London. Futures jumped $2.02 to close at $52.95 on Monday. Total volume traded Tuesday was about 28 percent above the 100-day average. Brent for February settlement gained 68 cents to $62.37 a barrel, after closing at $61.69 on London’s ICE Futures Europe exchange on Monday.
Oil prices extend gains on expected OPEC-led supply cuts -- Oil prices rose more than 2 percent on Tuesday, extending gains ahead of expected output cuts by producer cartel OPEC and a mandated reduction in Canadian supply. International Brent crude oil futures rose 58 cents, or nearly 1 percent to a high of $62.27 by 9:26 a.m. ET (1426 GMT). The contract earlier rose as high as $63.58. U.S. West Texas Intermediate (WTI) crude futures were 21 cents higher at $53.16, off a session high of $54.55. Both benchmarks climbed around 4 percent on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed at a meeting of the Group of 20 industrialized nations (G-20) to pause an escalating trade dispute. "The market seems positively oriented following the G-20 developments and heading into the OPEC meeting on Thursday," "A commitment by Russia to cooperate with Saudi Arabia and achieve an agreement at the next OPEC meeting has certainly lifted spirits," he added. The Middle East-dominated OPEC will meet on Thursday in Vienna to agree future output and will discuss strategy with other producers outside OPEC, including Russia. OPEC and its allies are working towards a deal to reduce oil output by at least 1.3 million barrels per day (bpd), OPEC sources have told Reuters, adding that they were still talking to Russia about the extent of its production cuts. "We expect OPEC to follow suit and agree to a production cut in Vienna this coming Thursday," U.S. bank Goldman Sachs said in a note to clients.
Oil Makes Gains Ahead Of OPEC Summit - - Oil gained for a second day in a row on Tuesday, pushed up by a trade war truce, pending OPEC+ production cuts, and surprise mandatory output reductions in Canada. . The U.S. and China agreed to delay their trade war, although both sides have sold the temporary agreement differently to their home audiences. Trump played up a lowering of Chinese tariffs on U.S. autos, something that China did not confirm they agreed to. Still, global markets welcomed the ceasefire, even if it only kicks the can down the road. The U.S. will hold off on the scheduled increase in tariffs from 10 to 25 percent that was set to take effect in January. The two sides now have 90 days to reach an agreement. OPEC’s production was flat in November at 33.13 million barrels per day, down a slight 10,000 bpd from the month before. Saudi output exceeded 11 mb/d for the first time in history, but those gains were offset by a declines elsewhere, including 230,000 bpd from Iran and 160,000 bpd from Iraq. Russian President Vladimir Putin said over the weekend at the G20 summit that Russia has agreed to go along with a production cut in Vienna. The size of the cut is undecided at this point. Saudi Arabia wants something more aggressive, but is also wary of angering Washington. Most analysts predict a middle-of-the-road production cut. “Given Saudi Arabia’s need to balance a host of conflicting interests, our basecase scenario is a de-facto Saudi-led cut with Russian participation, but a flexible agreement that shies away from specific targets,” Verisk Maplecroft said in a note to clients. Saudi oil minister Khalid al-Falih said on Tuesday that it was still “premature” to lay out the specifics of the deal. Alberta required its oil industry to lower output by 325,000 bpd beginning in January to erase the stockpile glut and ease the strain on the region’s takeaway capacity. The move is intended to boost WCS prices – and by all accounts, the move seems to have worked. WCS jumped this week. According to Scotiabank, WCS discounts could average just $20 per barrel in the first quarter of 2019, down sharply from a more painful $29-per-barrel discount had the policy not been enacted.
Oil prices advance 1% on expectations of OPEC-led output cuts: Oil prices rose by more than one percent on Tuesday, extending bigger gains from the previous day amid expected OPEC-led supply cuts and a mandated reduction in Canadian output. US West Texas Intermediate (WTI) crude futures CLc1 were at $53.53 per barrel at 0742 GMT, up 58 cents, or 1.1 percent, from their last close, Reuters wrote. International Brent crude oil futures LCOc1 were up 70 cents, or 1.1 percent, at $62.39 per barrel. Both crude benchmarks climbed by around four percent the previous session after Washington and Beijing agreed a truce in their trade disputes and said they would negotiate for 90 days before taking any further action. “Oil prices look likely to move up gradually this week as investors anticipate supply cuts by OPEC+,” said Benjamin Lu of Singapore-based brokerage Phillip Futures, referring to the producer group and Russia. The Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) will on Dec. 6 meet at its headquarters in Vienna, Austria, to agree a joint output policy. OPEC will also discuss policy with non-OPEC production giant Russia. “We expect OPEC to follow suit and agree to a production cut in Vienna this coming Thursday,” US bank Goldman Sachs said in a note to clients. “A cut in OPEC and Russia production of 1.3 million barrels per day (bpd) will be required to reverse the ongoing counter-seasonally large increase in inventories,” the bank said. It added that it expected a joint effort by OPEC and Russia to withhold supply to push Brent oil prices “above the mid-$60 per barrel level”.
Oil ends modestly higher after recent rally in lead-up to expected - Oil futures ended Tuesday with a modest gain after a strong start to the week ahead of an OPEC meeting that is expected to result in a production cut.That expectation was strengthened after Russian President Vladimir Putin said over the weekend that he and Saudi Crown Prince Mohammed bin Salman agreed to extend reductions while meeting on the sidelines of the G-20 summit. They formally meet later this week, with oil prices down some 30% from the four-year high struck in early October. The CME’s OPEC Watch Tool on Tuesday afternoon, however, pegged the probability of a “small production cut” at the Dec. 6 meeting at 59.2%—down from the 65.4% on Tuesday morning. The chance of little or no change to output was at 40.8%. West Texas Intermediate crude for January delivery rose 30 cents, or 0.6%, to settle at $53.25 a barrel, pulling back from a high of $54.55. It surged 4% Monday on the New York Mercantile Exchange. The contract tumbled 22% in November, the biggest monthly fall since October 2008. Global benchmark February Brent crude tacked on 39 cents, or 0.6%, to $62.08 a barrel after a nearly 4% advance a day earlier. January Brent, which expired on Friday, also marked a 22% decline for November, and the biggest monthly percentage drop in 10 years.Russia’s Putin made the announcement to extend output cuts in a news conference late Saturday, after a meeting with the Saudi prince, though he said there was no final decision on the amount. The comments came ahead of the Thursday-Friday OPEC meeting in Vienna. Plans for a broad output curb isn’t a done deal, analysts caution. “There has been some confusion about who is supporting the cut and the amount of possible reductions, with reports even this morning that the decision could be delayed if Russia doesn’t agree to cut substantially,” said Craig Erlam, senior market analyst at Oanda. “Coming in a week in which Qatar has announced it end its 57-year association with OPEC, it does suggest that the cohesion that made the last cut so successful is weakening.”
Oil prices wobble in choppy trade ahead of key OPEC meeting - Oil pared gains in choppy trade on Wednesday ahead of a meeting of the world's biggest exporters who will discuss cutting output to help shore up prices and curb excess supply.OPEC, Russia and other producers meet in Vienna this week to discuss a potential cut in production, although it faces pressure from U.S. President Donald Trump not to reduce output."Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!" Trump wrote on Twitter on Wednesday.OPEC is keen to avert the kind of build-up in global oil inventories that sent prices tumbling for more than a year and a half from late 2014. At the start of 2016, benchmark Brent was trading below $30 a barrel.Brent crude futures were up 24 cents $62.32 a barrel by 12:21 p.m. ET, off a session high of $63.39 and bouncing from a low of $60.80. U.S. West Texas Intermediate crude futures rose 20 cents to $53.45. Brent is still well below a peak in October above $86.
WTI Extends Loss After Surprise Crude Build - Amid doubts over global economic growth (and demand) as well as rising Russia-Saudi decisions on supply (and Alberta production cuts), WTI has rebounded modestly post-trade-truce, holding around $53 (despite today's carnage in stocks).In an interview Tuesday, Saudi Energy Minister Khalid Al-Falih walked back recent calls for 1 million barrels of cuts to daily output by OPEC and other major exporters.“It’s premature to say what will happen” in Vienna, Al-Falih said in an interview at a United Nations climate-change conference in Poland. “We need to get together and listen to our colleagues, hear about their views on supply and demand and their projections of their own countries’ production.”The note of caution combined with news that the Saudis had slashed the pricethey charge to Asian customers to dent traders’ optimism.“It’s not a good price signal,” said Bob Yawger, director of futures at Mizuho Securities USA in New York. “Either demand is bad or all the talk about cutting production is just lip service.” API :
- Crude +5.36mm (-900k)
- Cushing +1.44mm
- Gasoline +3.61mm
- Distillates +4.32mm
API reports a surprise 5.36mm barrel build in crude inventories (expectations were for a 900k draw). The 11th consecutive crude build in a row prompted a drop in WTI prices, back below $53... Additionally builds across Cushing and products is not positive.
Trump says he hopes OPEC will be keeping oil flows 'as is' -- President Donald Trump urged OPEC to continue pumping oil at current high levels on Wednesday, one day before the group of petroleum exporting nations is expected to agree to cut output. "Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!" Trump tweeted. OPEC meets on Thursday in Vienna, Austria, and is reportedly aiming to remove at least 1.3 million barrels per day from the market. The group began managing crude supply in partnership with Russia and several other nations last year in order to end a punishing downturn in oil prices.The alliance's policy of capping output has drawn Trump's ire because the president wants fuel costs to fall at U.S. gas stations. Throughout the year, Trump has publicly blamed OPEC for rising oil prices and ordered the group to take measures to reduce the cost of crude.In June, OPEC agreed to increase output after the alliance removed more barrels from the market than it had intended. Top OPEC producer Saudi Arabia, a close U.S. ally, is responsible for most of the surge in supply since midyear. The kingdom's output reportedly surpassed a record 11 million bpd in November. At the time OPEC agreed to hike output, the Trump administration was preparing to restore sanctions on Iran, the group's third-biggest producer. That raised concerns about supply shortages and pushed up prices throughout much of the year. However, OPEC now expects the oil market to swing into oversupply. The group is trying to prevent a repeat of 2014, when a global crude glut crushed oil prices. The cost of crude has collapsed more than 30 percent over the last two months, putting pressure on budgets in oil-exporting nations. Analysts say current low prices will likely cause American oil drillers to issue conservative spending plans for 2019 and potentially return less money to shareholders. Still, Trump urged Saudi Arabia to drive prices even lower last month. The kingdom now faces the challenge of pushing through production cuts without alienating Trump.
Does Trump control OPEC policy? A critical meeting is set to test the energy markets' 'biggest fear' --Oil markets are deeply concerned about the power President Donald Trump has over some of the world's largest crude producers, energy analysts told CNBC on Wednesday, ahead of a much-anticipated meeting between OPEC and non-OPEC members.The influential oil cartel and its allied partners are gathering in Vienna, Austria, this week, with the aim of reaching an accord to deliver a fresh round of supply cuts.But, even with the oil market near the bottom of its worst price plunge since the 2008 financial crisis, few external observers expect the energy alliance to engineer a succinct production quota that satisfies oil traders."This is the first time I think we have come into an OPEC meeting that is so political. We literally don't know how they are going to message this," Amrita Sen, chief oil analyst at Energy Aspects, told CNBC's Hadley Gamble in Vienna."Given how fragile the market is, the market's biggest fear is that it doesn't matter whether OPEC understands fundamentals, it is Trump that is controlling OPEC policy.""And if they are unable to communicate what they are going to do very clearly — which I think there is a big risk that they can't — the market is going to sell-off because their biggest fears are going to get confirmed," Sen said.Crude futures have fallen more than 28 percent since climbing to a four-year peak in early October, amid intensifying oversupply concerns and worries over slowing economic growth.This collapse has ratcheted up the pressure on OPEC and its allied partners to orchestrate another round of production cuts at its final meeting of the calendar year. International benchmark Brent crude was trading at $62.04 a barrel at around 10:50 a.m. London time (5:50 a.m. ET), down around 0.1 percent, while West Texas Intermediate (WTI) stood at $53.27, little changed from the previous session.
US crude slips 36 cents, settling at $52.89, ahead of key OPEC meeting -- Oil slipped in choppy trade on Wednesday ahead of a meeting of the world's biggest exporters who will discuss cutting output to help shore up prices and curb excess supply. Brent crude futures were down 24 cents $61.84 a barrel by 2:17 p.m. ET, off a session high of $63.39 and bouncing from a low of $60.80. U.S. West Texas Intermediate crude futures ended the session down 36 cents at $52.89. The Organization of the Petroleum Exporting Countries, Russia and other producers will meet in Vienna this week to discuss a potential cut in production. A monitoring committee of OPEC and its allies, including Russia, agreed on the need to cut oil output in 2019, two sources familiar with the discussions said, adding that volumes and the baseline for cuts were being debated. Tamar Essner on the lead up to OPEC Tamar Essner on the lead up to OPEC 6:48 AM ET Wed, 5 Dec 2018 | 03:14 "A deeper production cut still remains the most probable outcome of the meeting, but finer details of any agreement are in short supply, which in turn is prompting volatility," said Abhishek Kumar, senior energy analyst at Interfax Energy in London. Russian Energy Minister Alexander Novak told reporters he had a "good" meeting with his Saudi counterpart Khalid al-Falih on Wednesday and they planned more talks. Russia's No. 2 oil producer Lukoil is ready to cut oil production if OPEC and other leading producers agree to do so, though it would be technically difficult in winter, RIA news agency quoted the company's head Vagit Alekperov as saying. OPEC wants to avert a build-up in global oil inventories like the one that sent prices from late 2014 into a prolonged slump that brought Brent to below $30 a barrel at the start of 2016. "The market is expecting that OPEC is going to announce production cuts," said Regina Mayor, global and U.S. sector leader for energy at KPMG. "There has been quite a lack of discipline of late. When you look at U.S. shale production and Saudi production and Russia production, everyone has the pedal to the metal."
OPEC and Russia poised to impose steep production cuts despite US pressure --- OPEC has reportedly agreed to cut oil production, but the cartel ended its closely-watched meeting on Thursday without specifying how many barrels it would aim to remove from the market.The influential OPEC oil cartel gathered at its headquarters in Vienna, Austria with the aim of reaching an accord over throttling back output. The 15-member organization will hold talks with allied oil-producing nations including Russia on Friday. The much-anticipated meeting comes at a time when the oil market is near the bottom of its worst price plunge since the 2008 financial crisis. Oil prices have crashed around 30 percent over the last two months, ratcheting up the pressure on budgets in oil-exporting countries. Yet Russia's refusal to commit to a production quota and OPEC's failure to hammer out the details of a deal underscore the divisions within the two-year-old alliance, despite consensus that the group needs to take some form of action to boost the market. OPEC has agreed in principle to reduce its output, two sources told Reuters on Thursday. However, OPEC delayed making a decision on how deeply it would cut production until after it meets with Russia on Friday. With few details to offer journalists, OPEC canceled a scheduled press conference. "The fact that they're saying the debate will continue tomorrow emphasizes the disarray," said John Kilduff, founding partner at energy hedge fund Again Capital.Saudi Arabia, OPEC's largest producer, signaled earlier on Thursday that the group may reduce production less than the market expected. The Saudis have been leading calls for the group to trim output, amid surging supply and fears that an economic slowdown will erode fuel demand. The oil-rich kingdom has previously indicated it wants the group to curb output by at least 1.3 million barrels per day.However, Saudi Arabia's Energy Minister Khalid al-Falih told reporters Thursday morning that an output cut of 1 million bpd would be sufficient for OPEC and its allied producers. That is in part because Alberta, Canada announced this week it would require producers to cut output by about 325,000 bpd to drain the province's brimming crude stockpiles.
Oil Crashes After Saudis Propose Smaller Than Expected Production Cut - As if plunging equity futures were not enough for traders to worry about this morning, in the past two hours oil, which had rebounded heading into this week's 2-day OPEC meeting, tumbled sharply, dropping as much as 5%, with WTI sliding as low as $50.23 - less than a dollar from this year's low of $49.41 - from above $53/barrel earlier in the session as Saudi Arabia said producers were working towards a deal to cut output that could fall short of market expectations. Brent crude fell 4.2% to $58.99 a barrel. Saudi energy minister Khalid al-Falih told reporters ahead of today's critical closed-door meeting of oil ministers in Vienna that OPEC and allies outside of the cartel including Russia were still working towards reaching an agreement by Friday. Falih said Saudi Arabia’s preference was for a "sufficient cut but not overly large", adding that a 1 million barrels a day "would be adequate", but noting that "there is no deal yet." He may have been remembering Trump's tweet from yesterday, and realizing that if the US president gets angry with his boss, and de facto real OPEC leader, Crown Prince MbS, things could get much worse. The kingdom also called for contributions from all countries, saying that the deal should be "fair and equitable" and should include Russia, as well as countries that were exempt from previous deals, such as Libya and Nigeria. Quoted by the FT, when asked if a pact might not be reached, he said all options were on the table, but added that Russia, the largest oil producer in OPEC+ but slightly behind the US, and seen as crucial to reaching a deal, had “made a promise” to cut. Oil has crashed more than 30% since its October peak as the US issued sanctions waivers to big buyers of Iranian oil, while production from global producers surged. The planned output cuts come despite pressure from US president Donald Trump, who has advocated for high levels of production, describing lower oil prices as a “tax cut” for consumers. So what would be needed to stop the latest oil rout? According to energy analysts on Wall Street, any cut less than 1mmb/d will likely not help oil much, to wit (via Bloomberg): OPEC+ would need to cut by 1.5m b/d for crude to rise to $70 a barrel, according to Rystad. Saudi Arabia needs to pledge a reduction in supply of more than 500k b/d, Petromatrix says, while Saxo Bank says prices could fall if curbs don’t exceed the 1m b/d level.
WTI Slumps As Postponed OPEC Conference Trumps Crude Inventory Surprise - While all eyes are focused on Vienna and the OPEC+ meeting, inventory data will likely not be completely ignored following Tuesday's surprise API-reported crude build. With refinery utilization surging, there’s a danger of an oversupply of gasoline, says Bob Yawger, futures director at Mizuho Securities USA. “The market needs to see a draw” DOE:
- Crude -7.323mm (-2mm exp) - biggest crude draw since July
- Cushing +1.729mm
- Gasoline +1.699mm (+1.75mm exp)
- Distillates +3.811mm
The 10-week trend of crude builds is over as DOE reports a surprisingly large 7.3mm barrel draw (the most since July) but at the same time builds were notable at Cushing and for products... Most of the surprise crude draw came from the Gulf Coast - the biggest weekly decline in the region since December 2012. Oil production growth took a small breather last week after a magnitude 7 earthquake in Alaska struck on Friday, affecting oil producing and transportation assets in the region. Alyeska Pipeline Service shut the 800-mile Trans Alaska Pipeline System for seven hours while Hilcorp Energy temporarily shut some of its operations, which include oil platforms in Cook Inlet. WTI traded between $50.50 and $51 as we moved into the DOE data (as OPEC pessimism dominated after Saudi Arabia's energy minister backed a smaller-than-expected supply cut) then right before the data, this headline hit - *OPEC WON'T HOLD PRESS CONFERENCE AFTER MEETING TODAY: DELEGATE.. However, the big draw prompted some buying in futures...
US crude sinks 2.7%, settling at $51.49, after OPEC delays decision on production cut levels - Oil prices tumbled about 3 percent on Thursday as OPEC reportedly agreed to cut production, but ended its closely-watched meeting without a decision on how much crude the cartel will take off the market. OPEC agreed in principle to cut production during a meeting at its headquarters in Vienna, Austria on Thursday, two sources told Reuters. However, the cartel delayed a decision on specific quotas until it consults Russia on Friday. OPEC began capping supply in partnership with Russia and several other nations last year in order to end a punishing downturn in oil prices. However, Moscow has not yet specified how much it will cut production during the fresh round of supply caps that is now under consideration. “This is obviously a big disappointment to the market," said John Kilduff, founding partner at energy hedge fund Again Capital. "It certainly gives the appearance of disarray within the cartel — and disunity more than unity for sure." International benchmark Brent crude fell $1.77, or 2.9 percent, at $59.79 a barrel by 2:22 p.m. ET, after falling to a session low at $58.36. U.S. West Texas Intermediate crude ended Thursday's session down $1.40, or 2.7 percent, at $51.49, bouncing from a session low of $50.08. Oil prices briefly pared losses after government data showed U.S. crude stockpiles fell by 7.3 million barrels in the week through Nov. 30.The two benchmarks have fallen more than 30 percent over the last two months. The oil price has been hammered by concerns that supply will outstrip demand next year, weakness in global markets and technical trading that has extended the selling.
OPEC Waits on Putin's Decision -- OPEC ended talks in Vienna without a deal on oil production cuts as the size of Russia’s contribution remained a sticking point before further talks on Friday. Saudi Energy Minister Khalid Al-Falih said he isn’t confident of an agreement, after discussions of a combined 1 million barrel-a-day output reduction concluded without a consensus. That left the oil market dangling in uncertainty before non-OPEC allies join a second day of talks on Friday. “Not everybody is ready to cut equally,” Al-Falih told reporters in Vienna. “Russia is not ready for a substantial cut.” Oil in London tumbled as much as 5.2 percent to $58.36 a barrel, before paring losses to $59.34 at 5:07 p.m. local time. The kingdom’s dependence on Russia shows how much OPEC has changed since 2016, when the two countries ended their historic animosity and started to manage the market together. The alliance has transformed OPEC into a duopoly in which Russia, which isn’t a formal member of the cartel but part of the production-cuts alliance, is asserting its power. “The impression that the group can’t really come to a decision without first checking with Moscow is going to be difficult for some members to swallow,” Earlier on Thursday, ministers were discussing a proposal to curb combined OPEC and non-OPEC output by about 1 million barrels a day, said a delegate. That was in line with Saudi Arabia’s preference for a moderate reduction that wouldn’t “shock the market.” The group is under pressure after a collapse in oil prices last month. Saudi Arabia, the largest producer in the cartel, is seeking to walk a fine line between preventing a surplus next year and appeasing President Donald Trump. S Although Russia, the largest producer in the OPEC+ group, had agreed to a cut in principle, the eventual size of their contribution remains undefined through this week’s talks in Vienna. In private conversations earlier this week, OPEC delegates said that Saudi Arabia had favored a Russian cut of about 300,000 barrels a day, but Moscow was seeking a smaller reduction of about 150,000.
Are OPEC+ Talks Over- Russian Energy Minister Will Not Return To Vienna -- WTI is trading back below $51 (and Brent below $60) after Saudi Arabian Energy Minister Khalid Al-Falih says he is "not confident of reaching agreement tomorrow," adding that the "main sticking point is getting agreement from all producers." Al-Falih notes that a cutback of about 1m b/d is the main scenario considered but added that they still don’t know if Russia is on board with cuts deal, pointing out that he wants Russia to cut as much as possible (well he would, wouldn't he?) But don't hold your breath for any imminent cut from Russia as even if they come on board tomorrow with the promise of an output cut, don't expect it to start immediately. Winter is never a favored time for shutting in wells in Siberia. Just like 2017, it will take until the spring thaw for Russia to deliver in full on any pledge it may make tomorrow. Update: It would appear OPEC+ talks are over... Russian Energy Minister Alexander Novak won’t make it back to Vienna Thursday to discuss cutting oil output with the OPEC+ group of crude producing countries, RIA Novosti reports, citing the ministry.
Iran seeks exemption from OPEC oil cuts because of US sanctions: oil minister — Iran will seek an exemption from any OPEC production cut agreement, its oil minister said Wednesday, potentially complicating the group's already fraught negotiations. "Iran should be excluded from any decision on production levels," Bijan Zanganeh said on arrival in Vienna ahead of OPEC's Thursday meeting, adding that while the US maintains sanctions targeting Iranian oil sales, "we won't participate in any agreement on production." He declined to reveal how much Iran was currently producing, saying that disclosing such information would provide the US with leverage on how tightly to enforce the sanctions. S&P Global Platts, through a survey of industry officials, analysts and shipping data, estimates Iran's November crude output at 2.98 million b/d. OPEC is set to decide on its 2019 production policy Thursday, with Russia and nine other non-OPEC allies joining talks Friday. A six-country OPEC/non-OPEC monitoring committee, co-chaired by Saudi Arabia and Russia, met Wednesday and recommended a production cut of at least 1 million b/d, according to Omani oil minister Mohammed al-Rumhy, who sits on the committee. But Zanganeh said he rejected the committee's work, saying it has exceeded its mandate to merely monitor market conditions. ICE Brent futures were trading at $61.52/b at 2236 GMT. "I think an oil price between $60-$70/b is fair," Zanganeh said. Earlier Wednesday, Saudi energy minister Khalid al-Falih met with Brian Hook, a top US State Department official on Iran sanctions. Neither side would disclose what the conversations entailed but analysts said they likely involved an exchange of views on how the US plans to enforce its sanctions on Iranian crude and how Saudi Arabia might adjust its output in response to any anticipated lost Iranian volumes.
OPEC Goes Back into Crunch Talks-- OPEC prepared for a further day of talks on oil-production curbs after a summit on Thursday ended with no deal, as Russia resisted the big output cut that Saudi Arabia was demanding. After a six-hour meeting in Vienna, Saudi Energy Minister Khalid Al-Falih said he wasn’t confident of an agreement when the Organization of Petroleum Exporting Countries meets its allies on Friday. A proposal for a combined OPEC and non-OPEC cut of 1 million barrels a day was left dangling in uncertainty. “Not everybody is ready to cut equally,” Al-Falih told reporters in Vienna. “Russia is not ready for a substantial cut.” Another sticking point in the talks was Iran’s contribution, a delegate said. The Persian Gulf nation is currently subject to U.S. sanctions and as such won’t participate in any curbs, Oil Minister Bijan Zanganeh said. Other members said it should participate, according to a delegate. The failure to secure a deal so far is the latest example of how OPEC is under pressure from forces that are re-drawing the global oil map, leaving it increasingly dependent on the support of non-member Russia. In a striking development, the U.S. government revealed that it turned into a net exporter of petroleum for the first time in 75 years last week thanks to the shale boom. The oil market reacted negatively to OPEC’s setback, with Brent crude sliding 2.4 percent to $60.06 a barrel in London on Thursday. Prices extended declines on Friday. Russia, which initially sought a 100,000 to 150,000-barrel-a-day reduction as part of a new deal, may agree to a slightly larger cut depending on OPEC’s decision on its own output, a delegate said. Moscow insists its cut should be gradual and reconsidered after the first quarter since the market may shift, the delegate said, asking not to be identified discussing private deliberations.
What OPEC+ Must Do for Oil to go Above $70 in 2019 - OPEC+ countries must cut 2019 supply growth by 1.5 million barrels per day if they want oil prices back above $70 per barrel next year, according to Rystad Energy. “We believe a cut announcement that effectively removes anything less than one million barrels per day of 2019 supply would be interpreted negatively by the market,” Bjornar Tonhaugen, head of oil market research at Rystad Energy, said in a statement posted on the company’s website on Thursday. “To surprise the market in a bullish fashion, we believe cuts approaching two million barrels per day would have to be announced,” he added. “Should OPEC+ announce a 1.5 million barrel per day cut, we believe the market reaction would be neutral at first, but gradually pave the way for a recovery in oil prices above the $70 level for Brent in 2019,” Tonhaugen continued. If OPEC+ decides this week not to cut production substantially, the market can “probably wave goodbye to any hopes of short term recovery in prices from current levels, and more likely say hello to even lower levels for parts of next year,” according to Tonhaugen. The 175th ordinary OPEC meeting is scheduled to take place in Vienna, Austria, today. The fifth OPEC and non-OPEC ministerial meeting is scheduled to take place on Friday. In an emailed statement sent to Rigzone on Wednesday, Michael Burns, an oil and gas partner at law firm Ashurst said, "the outcome of the meeting in Vienna would seem to be finely balanced”. “Whilst cuts in production look likely, the extent of the cuts would appear to be a striking of a balance between the needs of OPEC members, agreements made with non-OPEC members outside of Vienna and political discussions ongoing with the United States,” he added.
Oil prices drop as market awaits specifics on the OPEC production cuts - Crude-oil prices settled sharply lower Thursday, after OPEC failed to offer details on its expected production cut, opting to wait until after it meets with other producers Friday. Growing concerns that oil producers won’t reach an agreement to aggressively reduce output has also weighed on prices, but U.S. government data revealing the first decline in domestic crude supplies in 11 weeks did offer a brief respite in prices from the session’s lows. The large draw in U.S. crude stockpiles was “surprising,” but the data also showed production held up at a record, said Tariq Zahir, managing member at Tyche Capital Advisors. The market’s focus remains on OPEC, he added. Members of the Organization of the Petroleum Exporting Countries have concluded their meeting in Vienna, without deciding on output-cut figures, the Wall Street Journal reported, citing comments from OPEC delegates. The delegates also said OPEC plans to debate output figures with non-OPEC producers during their meeting Friday. Against that backdrop, West Texas Intermediate crude for January delivery lost $1.40, or 2.7%, to settle at $51.49 a barrel on the New York Mercantile Exchange—off the session’s low of $50.08. Shortly after U.S. futures prices settled, Russian news agency TASS reported that OPEC reached a “preliminary agreement” to cut oil production, but that specifics on the amount to be cut have not yet been decided. The agency also said that according to sources, oil production will be reduced from the October 2018 level. Global benchmark February Brent crude also fell $1.50, or 2.4%, to $60.06 a barrel on ICE Futures Europe. Oil prices were under pressure, “somewhat reflecting the selloff in stocks, some reflecting skepticism OPEC will come through with sufficient production cuts to support prices,” There are a number of stumbling blocks to reaching a decision. Iran, OPEC’s third-biggest producer, said Thursday that it can’t participate in any cuts until the U.S. lifts sanctions against the country.
Brent crude soars 5% as OPEC reaches deal to cut oil production - Oil prices rose on Friday after OPEC reached a tentative agreement to cut output, according to the Iranian Energy Minister. The meeting was still continuing and an agreement with non-OPEC producers including Russia was not yet finalized.OPEC producers agreed to cut output by 800,000 barrels per day beginning in January, according to Iranian Energy Minister Bijan Zangeneh. Non-OPEC producers were proposing a 400,000 barrels a day cut, he said.The combined cut of 1.2 million bpd is roughly in line with expectations for a reduction of 1 million to 1.4 million bpd heading into the meeting. West Texas Intermediate crude futures were up $2.18, or 4.2 percent, at $53.67 per barrel at 10:21 a.m. ET.Brent crude, the international benchmark for oil prices, rose $3.05, or 5.1 percent, to $63.11 a barrel.The talks between OPEC and non-OPEC members including Russia comes at a time when the oil market is near the bottom of its worst price plunge since the 2008 financial crisis. Oil prices have plunged more than 30 percent from their highs in early October. Discussions had earlier hit an impasse because Saudi Arabia refused to agree to an exemption for Iran, OPEC sources told Reuters. However, OPEC ultimately granted Iran an exemption, Iranian Energy Minister Bijan Zangeneh told CNBC as he departed from the cartel's headquarters. Iran's Zangeneh had said his country should not be forced to cut production in light of U.S. sanctions on the Islamic Republic, OPEC's third-largest producer. The sanctions, which are backed by the Saudis, have already significantly reduced Iran's exports. Energy Aspects says communicating a deal properly is imperative because the market is fragile right now. The energy research firm warns that a "jumbled statement referring to some broad intention to prevent the market from being oversupplied will undoubtedly trigger a further sell-off in prices." Crude futures fell sharply during the previous session, after OPEC was unable to agree on the terms of cuts. The talks made progress on a critical front on Friday, with news agencies saying Russia has agreed to cut output by 200,000 barrels per day. The 15-member OPEC group had delayed a decision on how many barrels it would take off the market until Moscow committed to a specific reduction.
OPEC Agrees on Larger-Than-Expected Cut After Marathon Talks -OPEC finally broke an impasse over production curbs, agreeing on a larger-than-expected cut with allies after two days of fractious negotiations in Vienna.The cartel and its partners agreed to remove 1.2 million barrels a day from the market, with OPEC itself shouldering 800,000 barrels of the burden. Iran emerged as a winner from the contentious talks, saying it’s secured an exemption from cuts as it suffers the effects of U.S. sanctions.Crude surged as much as 5.8 percent in London, raising the risk that the deal could anger U.S. President Donald Trump, who had urged the group to keep the taps open and prices low.The breakthrough at the Organization of Petroleum Exporting Countries’ secretariat followed a series of bilateral meetings convened by non-OPEC member Russia, which emerged as the key broker between arch rivals Saudi Arabia and Iran. OPEC has been under increasing pressure from forces re-drawing the global oil map, leaving it ever more dependent on Russia’s support while also subject to vehement opposition from Trump.The final deal is a surprise, since discussions had earlier centered on a proposed output reduction from OPEC and its allies of about 1 million barrels a day, with OPEC cutting 650,000 barrels of the total, according to delegates. “Given how much expectations were down played around the outcome of this meeting, this result comes as a welcome surprise,” Producers will use October output levels as a baseline for cuts and the agreement will be reviewed in April. Russia has proposed a contribution equivalent to a 2 percent reduction from that month, according to one delegate, who said figures are still under discussion. Such a cut would equate to 228,000 barrels a day, Bloomberg calculations show, higher than its initial pitch for no more than 150,000 barrels a day.
OPEC Surprises Markets With Last Minute Deal - The obvious major news of the day comes from Vienna. OPEC+ agreed, despite a lot of jockeying, to cut 1.2 mb/d of supply beginning in January. OPEC will contribute 800,000 bpd and non-OPEC will cut by 400,000 bpd. The group met on Thursday but cancelled a press conference, raising doubts about the ability to reach an agreement. Iran held up the talks early Friday because it refused to accept limits on its production, although, to be sure, any limit would be symbolic anyway since its output is declining due to sanctions. Iran was exempted from the deal. Oil sank on Thursday and in early trading on Friday, but prices spiked by more than 4 percent when an agreement was announced. On Thursday, the Trump administration announced plans to roll back protections on the sage grouse, effectively opening up 9 million acres of federal lands to mining and drilling. The move would open up more land than any other policy change to date, according to the New York Times. The proposal is expected to be finalized next year. The U.S. has on multiple occasions considered slapping painful sanctions on Venezuela, and the downturn in oil prices has opened up another opportunity to do so. S&P Global Platts reports that “hawkish White House officials are urging” Trump to target Venezuela’s PDVSA over human rights violations. “If the White House were to pressure Caracas to block a new constitution, we would not expect [Trump] to pull many punches,” ClearView Energy Partners said in a recent note to clients. At the request of the U.S., Canadian authorities arrested Meng Wanzhou, a top executive at Huawei, a Chinese technology firm, for violating sanctions on Iran. The detention came while the Trump-Xi meeting was going on in Buenos Aires last weekend. Earlier this week, China said it was preparing to step up purchases of American soybeans, LNG and crude oil again in a show of good faith towards the recent trade ceasefire with Trump. However, the Huawei affair significantly complicates the trade negotiations between the U.S. and China.
Oil Prices Hold Steady As US Oil Rig Count Take Steep Dive - Baker Hughes reported a 1-rig decrease for oil and gas in the United States this week—a loss in rigs for the second week in a row, with a 10-rig decrease in the number of oil rigs.The total number of active oil and gas drilling rigs now stands at 1,075 according to the report, with the number of active oil rigs decreasing by 10 to reach 877 and the number of gas rigs increasing by 9 to reach 198.The oil and gas rig count is now 144 up from this time last year, 126 of which is in oil rigs.Crude oil prices skyrocketed on Friday after a rather abysmal November, as OPEC managed to pull it together in the final hour of production cut talks with its members and Russia. Despite the talks ending yesterday without a resolution as Russia’s Alexander Novak flew back home to discuss its options with President Vladimir Putin, Friday saw a resolution to the cuts as the group came together, with Russia, to shave 1.2 million bpd off its October production levels. The WTI benchmark was trading up 4.14% (+2.13) at $53.62 at 12:38pm EST—a roughly $2 per barrel increase week on week. Brent crude was trading up 4.46% (+2.68) at $62.74—about $3 up week on week. .Canada’s oil and gas rigs for the week decreased by 17 rigs this week after losing 5 rigs last week, bringing its total oil and gas rig count to 186, which is 33 fewer rigs than this time last year, with a 17-rig decrease for oil rigs, and a 4-rig increase for gas rigs. The EIA’s estimates for US production for the week ending November 30 continues to weigh on prices, averaging 11.7 million bpd for the fourth week in a row and the highest production rate for the United States. By 1:07pm EDT, WTI had increased by 4.53% (+$2.33) at $53.82 on the day. Brent crude was trading up 4.96% (+$2.98) at $63.04 per barrel.
US Oil Rig Count Tumbles by 10, Boosting Prices Already Spurred by OPEC Cuts - In the week ending December 7, 2018, the number of land rigs drilling for oil in the United States totaled 877, a drop of 10 compared to the previous week and up by 126 compared with a total of 751 a year ago. Including 198 other land rigs drilling for natural gas, there are a total of 1,075 working rigs in the country, one less than a week ago and up by 144 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday afternoon. West Texas Intermediate (WTI) crude oil for January delivery settled at $51.49 a barrel on Thursday and traded down up about 4.5% Friday afternoon at around $53.82 shortly before regular trading closed. WTI is on track to close the week up by about 3%. Brent crude for February delivery traded at $63.02 a barrel, up about 5% for the day. The natural gas rig count rose by nine to 198 this week, and the number of “miscellaneous” rigs remained at zero. The count for natural gas rigs is now up by 18 year over year. Natural gas for January delivery traded up more than 5% at around $4.55 per million BTUs, up by about a penny compared to last Friday.Today’s report on U.S. natural gas in storage combined with expectations for cooler weather in the last half of December has sent natural gas prices soaring. Crude oil prices are up on reports that OPEC and its partners plan to reduce production by 1.2 million barrels a day for six months beginning in January.Among the states, Baker Hughes reports that five of them added one rig each during the week: Alaska, Kansas, Pennsylvania, Utah and West Virginia. Oklahoma lost three rigs, Ohio and Texas dropped two rigs each, and Louisiana lost one rig.In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 489, down by four compared with the previous week’s count. The Eagle Ford Basin in south Texas has 80 rigs in operation, one more week over week, and the Williston Basin (Bakken) in North Dakota and Montana has 56 working rigs, unchanged for the week. Producers dropped one horizontal rig this week and the count fell to 933, while offshore drillers reported a total of 23 rigs, unchanged from the previous week’s count.
US crude rises 2.2%, settling at $52.61, after OPEC and allies reach deal to cut output --Oil prices surged higher on Friday after OPEC, Russia and several other producers reached an agreement to cut output next year in order to boost the market.The new agreement comes at a time when the oil market is near the bottom of its worst price plunge since the 2008 financial crisis. Oil prices have dropped more than 30 percent from their highs in early October, hammered by concerns about oversupply, weakness in global markets and technical trading that exacerbated the slide.OPEC and its allies agreed to throttle back output by 1.2 million bpd during the first six months of 2019.The production cut is roughly in line with expectations heading into the meeting. Commodity watchers were expected the alliance to remove 1 million to 1.4 million bpd from the market.Brent crude, the international benchmark for oil prices, rose $1.61, or 2.7 percent, to $61.67 a barrel. Brent earlier rose more than 5 percent to $63.73. U.S. West Texas Intermediate crude futures ended Friday's session up $1.12, or 2.2 percent, at $52.61 per barrel, off a session high of $54.22.Energy research firm Wood Mackenzie forecasts the production cut will tighten markets by the third quarter of 2019 and cause Brent to rise back above $70 a barrel. "It would help producers contend with the strength of US supply growth in 2019 when we expect a year-on-year increase of 2.4 million b/d in non-OPEC production as US supply continues to gain sharply," .The United States is pumping at all time highs near 11.7 million bpd, according to preliminary government figures. Last week, the country exported more oil and refined fuels than it imported for the first time in decades.Meanwhile, Russian production hit a post-Soviet era high at 11.4 million bpd this fall, and Saudi oil production rose to a record 11.1 million bpd in November.The supply surge from the world's top three oil producers is as forecasters warn oil demand growth will be softer than anticipated next year. OPEC members agreed on Friday to cut production by 800,000 bpd, while non-OPEC producers aim to shave 400,000 bpd off the market.
G20: You Can Smell Tear Gas in the Streets as the Oil Industry Squabbles - Last week, two important meetings took place—one, in Buenos Aires, Argentina, of the Group of 20 (G20) nations, and two, in Vienna, Austria, of the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers. The two meetings did not produce any resolution to the major economic challenges in the world. But they did soothe the nerves of financial markets. At the G20, the United States and China dialed down the temperature over trade but did not settle the long-term grievances each side has of the other. At the OPEC+ meeting, Russia and Saudi Arabia agreed to cut production and raise the price of oil despite pressure from the United States and others to keep oil prices low.At neither meeting did the major powers find solutions to their problems. They are all caught in mazes from which there are no easy exits. But what calmed the world of finance was that the geopolitical tension between the major powers seemed to have lessened. What impact this reduced tension has for the world’s people, however, is not clear. The “trade war” engineered by U.S. President Donald Trump against China began with tariffs and ended with a damp squib. At the G20, Trump told China’s Xi Jinping that the U.S. tariffs that would have gone up to 25 percent on $200 billion worth of Chinese imports will no longer be applied. China, for its part, said that it would import more goods from the United States. No specifics were announced, which is why the tensions over even this agreement spilled over onto Twitter (courtesy of Trump’s hyperbole) and into more sober statements from the Chinese government. The more fundamental questions of intellectual property and currency valuation remain unsolved. The United States accuses China of theft of the intellectual property of U.S. firms, but the Chinese counter—as they have in the arbitration panels of the World Trade Organization—that they merely draw from technology transferred as a result of commercial agreements freely made by firms eager to use Chinese labor. It will be impossible to resolve these two problems, since neither side sees the issues in the same way. Their worldviews regarding intellectual property and currency valuation are utterly alien to each other. If the United States believes that China is unfairly valuing its currency, the Chinese point to the unfair advantage that the dollar has over every currency in the world since it is used as one of the major global currencies for facilitation of trade and for the storage of wealth.
What's Really Being Taught In MbS' So-Called Reformed Saudi Schools - The US Commission on International Religious Freedom criticized Saudi Arabia’s “backsliding” on religious tolerance in a new report on middle and high school textbooks today, further undermining the embattled kingdom’s reformist credentials.The independent federal government commission contracted a study of 22 textbooks focusing mostly on religious studies published by the Saudi government for the 2017-2018 academic year. It notably found that the books “caution students to avoid friendship with members of other religions […] encourage both violent and non-violent jihad against non-believers [and] espouse the death penalty for women who have an affair, and for gay men.”“This review revealed an apparent reversal in the previous trend toward tolerance in Saudi textbooks,” the commission concludes. “They reflect core Wahhabi doctrines and not other trends of Islamic scholarship that are more accepting.” The report comes as Saudi Arabia’s reputation is already reeling in the United States and around the world following the murder of Saudi journalist Jamal Khashoggi. It is especially damaging to Crown Prince Mohammed bin Salman and the multimillion-dollar public relations campaign touting him as a progressive reformer championing a vision of a modern Saudi Arabia by 2030. The Anti-Defamation League, which combats attacks against the Jewish people, released a similar report last week that found that “intolerant language of all kinds still abounds in Saudi Arabia’s government-published textbooks for schoolchildren. The incitement is particularly egregious at the high school level.” While the US commission does not provide a definitive conclusion for the reasons behind the alleged backsliding, speculation is rife that horse-trading between the royal family and traditional clerics over reforms such as lifting the ban on women driving may have played a role.“What’s most troubling here is that we’re seeing some backtracking in the education system where they had made progress, which we had verified over the years, in terms of cleaning up some of the worst passages in the textbooks,”
Jamal Khashoggi: private WhatsApp messages may offer new clues to his murder - In his public writings, Jamal Khashoggi's criticism of Saudi Arabia and its Crown Prince Mohammed bin Salman was measured. In private, the Washington Post columnist didn't hold back.In more than 400 WhatsApp messages sent to a fellow Saudi exile in the yearbefore he was killed at the Saudi consulate in Istanbul, Khashoggi describes bin Salman -- often referred to as MBS -- as a "beast," a "pac-man" who would devour all in his path, even his supporters.CNN has been granted exclusive access to the correspondence between Khashoggi and Montreal-based activist Omar Abdulaziz. The messages shared by Abdulaziz, which include voice recordings, photos and videos, paint a picture of a man deeply troubled by what he regarded as the petulance of his kingdom's powerful young prince. "The more victims he eats, the more he wants," says Khashoggi in one message sent in May, just after a group of Saudi activists had been rounded up. "I will not be surprised if the oppression will reach even those who are cheering him on."The exchanges reveal a progression from talk to action -- the pair had begun planning an online youth movement that would hold the Saudi state to account. "[Jamal] believed that MBS is the issue, is the problem and he said this kid should be stopped," Abdulaziz said in an interview with CNN.But in August, when he believed their conversations may have been intercepted by Saudi authorities, a sense of foreboding descends over Khashoggi. "God help us," he wrote. Two months later, he was dead.
Coalition allows evacuation of wounded Houthis before Sweden hosts Yemen talks (Reuters) - Yemeni Houthi officials are expected to travel to Sweden shortly for talks as early as Wednesday to end the nearly four-year-old war after the Saudi-led coalition allowed the evacuation of some of their wounded for treatment. Prospects for convening talks have risen as Western allies press Saudi Arabia, leader of the Sunni Muslim alliance battling the Iranian-aligned Houthis, over a war that has killed more than 10,000 people and pushed Yemen to the brink of famine. U.N. special envoy Martin Griffiths arrived in the Houthi-held capital Sanaa on Monday to escort the Houthi delegation, a U.N. source told Reuters. The Saudi-backed government has said it would follow the Houthis to the talks, the first since 2016. The peace talks may start on Wednesday, two sources familiar with the matter said. Griffiths shuttled between the parties to salvage a previous round that collapsed in September after the Houthis failed to show up. Western powers, which provide arms and intelligence to the coalition, may now have greater leverage to demand action on Yemen after outrage over the murder of Saudi journalist Jamal Khashoggi in Riyadh’s consulate in Istanbul led to increased scrutiny of the kingdom’s activities in the region. The U.S. Senate is due to consider this week a resolution to end support for the conflict, seen as a proxy war between Saudi Arabia and its arch-foe in the Middle East, Iran. Mohammed al-Bukhaiti, a member of the Houthi politburo, told Reuters their delegation would travel to Sweden Tuesday morning on a plane provided by Kuwait and accompanied by Griffiths.
Yemen Rivals Lash Out Before Peace Talks Begin in Sweden — Yemen’s high profile peace talks in Sweden are set to open, but already look to be on the brink of collapse, with both sides lashing out at one another, and Houthi officials openly questioning whether the talks are even serious and worth pursuing. The big stumbling block is that, having finally gotten both sides to the table to discuss a settlement of the multi-year war, the pro-Saudi Hadi government reiterated the same demands they had at the start of the war, insisting that the Houthis unconditionally disarm, and cede the city of Hodeidah to them. The Houthis are being a bit more modest in their goals, focusing on trying to get the Sanaa International Airport reopened to civilian traffic. They’d also like Hodeidah to remain open to aid, though that’s a matter the UN is already pushing hard for without them. Though every side went into these talks expressing support for a peace process that would end the war, the Hadi government has continued to make it clear their demands are an unconditional victory, and as ever that is putting a roadblock in front of serious efforts to start making a permanent deal.
US exerting pressure on Iran through propaganda campaign: The US withdrawal from Iran’s nuclear deal in May was the main episode in a psychological campaign against Iran that has been in the making for years, the president’s chief of staff said. “The modus operandi of the enemies against Iran has now changed from military to propaganda,” Mahmoud Vaezi said. “The front (of this propaganda) is a psychological war that wants to ruin the achievements of the JCPOA,” he added. He was referring to the official name of the 2015 Iran nuclear deal, the Joint Comprehensive Plan of Action (JCPOA). Iranian President Hassan Rouhani managed to ease years of tension between Iran and the US when he opened up to the West and curbed Iran’s nuclear program in exchange for sanctions relief. Vaezi said that “the government could finally see sanctions lifted which would facilitate the economic conditions in Iran by the implementation of the JCPOA.” “But the triangle of the US, Israel, and Saudi Arabia wanted to increase the pressure on Iran while their main objective was to cause the JCPOA to collapse,” he added. The US expected Iran to react in the same way and abandon the JCPOA, something that Vaezi said would pave the way for the return of international sanctions and pressure against Iran. “They (US officials) had planned a massive propaganda against Iran,” he said. President Rouhani said in May that the US president expected Tehran to leave the nuclear deal after the US withdrawal, but he miscalculated Iran’s reaction. He said Tehran had refused to follow that plan by trying to save the deal with its remaining signatories. “It is well-known that Iran is a country which treads down the path of peace and acts in line with international regulations,” the president said at the time. “Today, the US should come under pressure as a country going against its promises and acting in contravention of regulations.”
Pompeo, Bolton Say Iran Test-Launched Ballistic Missile Capable Of Striking Europe, Violated UN Ban - U.S. Secretary of State Mike Pompeo on Saturday condemned what he described as Iran's testing of a medium-range ballistic missile capable of carrying multiple warheads as a violation of the international agreement on Tehran's nuclear program. As Haaretz reports, amid tension between Washington and Tehran over ballistic missiles, Pompeo warned in a statement released on Twitter that Iran is increasing its "testing and proliferation" of missiles and called on the Islamic Republic to "cease these activities." Full State Department Statement: Iran Test Launches Ballistic Missile Violating UN Security Council Ban The Iranian regime has just test-fired a medium range ballistic missile that is capable of carrying multiple warheads. The missile has a range that allows it to strike parts of Europe and anywhere in the Middle East. This test violates UN Security Council resolution 2231 that bans Iran from undertaking “any activity related to ballistic missiles designed to be capable of delivering nuclear weapons, including launches using such ballistic missile technology . . .” As we have been warning for some time, Iran’s missile testing and missile proliferation is growing. We are accumulating risk of escalation in the region if we fail to restore deterrence. We condemn these activities, and call upon Iran to cease immediately all activities related to ballistic missiles designed to be capable of delivering nuclear weapons. And national Security Advisor John Bolton was quick to jump on this 'violation' warning that "this provocative behavior cannot be tolerated."
Reuters Creates Fakenews About Iran – Intentionally Conflates Two Different Missiles – Misquotes Official - A just published Reuters piece claims: “Iran wants to expand missile range despite U.S. opposition.” That claim is false and is based on a willful misrepresentation of the source Reuters cites. (Reuters) - Iran wants to increase its missiles’ range, a senior military official was quoted as saying on Tuesday, a move that would irk the United States which views Tehran’s weapons program as a regional security threat. “One of our most important programs is increasing the range of missiles and ammunition,” said the head of the Iranian air force, Brigadier General Aziz Nasirzadeh, according to the semi-official Fars news agency. “We don’t see any limitations for ourselves in this field.” The Reuters piece conflates ground launched ballistic missiles with air-to-air missiles that the air force commander wants to develop. The U.S. does not care about Iran's air-to-air missiles. It itself has far superior ones. The U.S. does care about Iran's ballistic missiles. But the Iranian general did not talk about those at all. The quote Reuters attributes to the Iranian general it is taken out of context and used to propagandize a non-issue. The FARS piece Reuters cites is absolutely clear with what the air force commander means, even while its headline is probably too generalized: Iran Sees No Limit for Increasing Range of Missiles Commander of the Iranian Air Force Brigadier General Aziz Nasirzadeh announced the country's plans to boost the range of its air-to-air missiles. "Today, we are after increasing the range of our air-to-air missiles. Therefore, one of our most important plans is increasing the range of missiles and ammunition. We are after Beyond-Visual-Range (BVR) missiles and ammunition and consider no limitations in this regard for ourselves because the Air Force should heighten the country's deterrence power along with other (Armed) Forces," General Nasirzadeh told FNA on Tuesday. The underlined part is the only one Reuters cites. In the original that part is led and followed by its context - air-to-air missiles. That very clear context is simply left out. Reuters thus frames the quote as related to ballistic missiles even though it has absolutely nothing to do with them.
11 Times In Past Two Years - Iran Slams U.S. Attempts At Fresh Nuclear Negotiations -- Seeking to humiliate the United States after it abandoned the 2015 JCPOA and reinstated crippling sanctions, Iranian President Hassan Rouhani made public prior U.S. efforts to restart negotiations during statements made on Tuesday.Rouhani claimed the U.S. approached Tehran 11 times in order to begin negotiations afresh over a period of the last two years. Rouhani confidently noted that all of these overtures were firmly rejected by Iran.As part of Trump's promise to scrap the Obama brokered nuclear deal, which he formally backed out of last May, he said he would negotiate the whole thing anew from the ground up. Rouhani touted the failed attempts as a major Iranian victory: “If you think America is victorious, know that today Iran is victorious and Trump has been defeated,” he said said in comments reported by the Islamic Republic of Iran Broadcasting (IRIB) news agency.“Last year America requested negotiations eight times directly and this year three times indirectly which we did not accept on the basis of the dignity of the people,” Rouhani added. However, he did not detail precisely what was on the table or which aspects of the deal would be renegotiated. Notably Trump had unexpectedly stated last July that he's open to meeting President Rouhani "without preconditions". He had stated, “If they want to meet, we’ll meet,” at a moment when relations were quickly worsening. Meanwhile also on Tuesday Iran used the opportunity of Qatar quitting OPEC to slam the organization, saying "OPEC has problems," and and that "the reasons for Qatar’s exit from the organization must be examined," according to separate statements by Iranian Oil Minister Bijan Zanganeh.
Iranian president threatens to close key oil trade route if US blocks exports - Iranian President Hassan Rouhani threatened on Tuesday to close the strait of Hormuz, the world's busiest sea lane for oil shipments, if the United States moves to block the Islamic Republic's oil exports. In an interview with Iranian State TV President Hassan Rouhani was quoted as saying: "if someday, the United States decides to block Iran's oil [exports], no oil will be exported from the Persian Gulf." The Trump administration restored sanctions on Iran's energy industry on Nov. 5. The administration is trying to choke off Iran's economy in order to pressure Tehran to accept tighter restrictions on its nuclear program, cease ballistic missile tests and end its support for U.S.-designated terror groups. The sanctions have already cut Iran's exports by about 1 million barrels per day, but Rouhani is vowing to continue shipping crude. The Strait of Hormuz is a key waterway for the transport of oil. In 2016, 18.5 billion barrels of crude passed through the waterway, or about one-third of all seaborne-traded crude oil, according to the U.S. Energy Information Administration.
U.S. Aircraft Carrier Heads To Persian Gulf In Show Of Force After Iran Ballistic Missile Test - Days after Iran unveiled its first stealth destroyer in a televised ceremony on Saturday which saw the warship launched into operation in the Persian Gulf, and after the US condemned Iran's test firing a medium-range nuclear capable ballistic missile on Sunday, Pentagon officials have announced the U.S. is sending an aircraft carrier strike group to the Persian Gulf in a show of force against Iran. US officials told the Wall Street Journal the USS John C. Stennis and support ships will arrive in the Middle East "within days" — which will bring a close what's been described as the longest period in two decades that a carrier group was absent from the region. Specifically the unnamed officials identified the purpose as to "exhibit a show of force against Iran" at a moment tensions are soaring after Nov. 4 renewed sanctions targeting Iran's energy sector. The White House has vowed that it will work with international allies to reduce Iran's oil exports to zero in continuing economic warfare that could easily spark direct military confrontation. The WSJ reports: The Stennis is scheduled to remain in the region for about two months, the officials said, spending most of that time in the Persian Gulf. Its presence “certainly provides a deterrence” against any potentially hostile Iranian activity in the region’s waters, one of the officials said. Responding to the unprecedented sanctions regimen after President Trump withdrew the US from the 2015 JCPOA, Iran's military leadership has over the past months issued a counter threat of blockading the vital Strait of Hormuz in the Persian Gulf, which would strangle global oil shipping. The US carrier presence inches the world closer to witnessing a major flare up in the gulf which could send the price of oil soaring. Shia cleric Ayatollah Ahmad Alamolhoda grabbed headlines at the time by declaring, "If Iran decides, a single drop of this region's oil will not be exported and in 90 minutes all Persian Gulf countries will be destroyed." It appears the presence of the USS John C. Stennis is designed to prevent such a possibility from happening. Officials also said the carrier group will support the US war in Afghanistan as well as operations against remnant ISIS pockets in Iraq and Syria.
At Least 206 Civilians Killed in November by US Airstrikes in Syria — The Syrian Observatory for Human Rights has issued a new report over the weekend summarizing the massive civilian death toll of US-led airstrikes against a handful of eastern towns in Syria. At least 206 civilians were killed in November in those strikes.The strikes center on three towns and some adjoining villages under ISIS control along the Iraq border. Kurdish YPG forces are attacking the towns, and the US is trying to provide air support, which mostly means bombing populated areas in the towns themselves.The observatory’s previous reports have indicated that a lot of the civilians killed were suspected of being family members of ISIS fighters. At least 77 children and 57 women are among the slain civilians. While the US clearly hasn’t had a problem with endangering civilians in this way, they’ve done little to practically support the Kurdish offensives by doing so. After over a month of such strikes, there are a lot of people dead, but ISIS still controls the towns, and has retaken which villages were lost.
Hezbollah On High Alert As Israel Begins 'Operation Northern Shield' Along Lebanese Border - Hezbollah is on full alert in Lebanon and Syria, calling on its forces to be ready for war if Israel initiates attacks on Lebanon, according to Middle East war correspondent Elijah Magnier. This measure came following Israel's Tuesday morning launch of “Operation Northern Shield” to "destroy Hezbollah tunnels on the Israeli border." The Lebanese Army, though significantly weaker than Hezbollah, has also been placed on high alert and soldiers have been deployed to the border. The Israeli Defense Forces (IDF) announced its new operation to “expose and thwart” tunnels stretching from Lebanon into northern Israel which it says were built by the Hezbollah militant group. Amid soaring tensions in the region due to the Syrian war and US-led attempts to choke Iran's economy, Israeli military officials were quick to name Iran as a culprit behind Hezbollah acts of aggression, including infrastructure like the tunnels. Lt. Col Jonathan Conricus, an Israeli military spokesman, said, “We see Hezbollah’s activities as a flagrant and blatant violation of Israeli sovereignty” and of U.N. resolutions. He added, “This activity is another example of the negative effects of Iranian entrenchment in the region.”
Netanyahu Refuses to Resign After Israeli Police Recommend Fraud, Bribery Charges (CD) — Prime Minister Benjamin Netanyahu is facing calls to resign after Israeli police on Sunday recommended indicting him and his wife on fraud and bribery charges.It’s the third such recommendation to hit the prime minister this year.The New York Times lays out the alleged wrongdoing: Between 2012 and 2017, the police said, Mr. Netanyahu “intervened in a blatant and ongoing manner, and sometimes even daily,” in coverage at Walla, a news website owned by [telecommunications company] Bezeq, ensuring “flattering articles and pictures” were published and “removing critical content” about him and his family.The police said Mr. Netanyahu and his associates sought to sway Walla’s hiring of senior editors and reporters. In return, the police said, Mr. Netanyahu, who personally oversaw the communications ministry from 2014 to 2017, rewarded Bezeq with enormously lucrative concessions, including approval of its merger with Yes, a satellite television company, despite the objections of lower-level ministry officials.It’s up to the attorney general whether to indict.The other two corruption scandals involve bribery as well. In one, “Netanyahu is suspected of receiving gifts worth at least a million shekels ($270,000; £210,000) from Hollywood mogul Arnon Milchan and other supporters,” the BBC reports. The other also involves bribing a newspaper, this time Yediot Aharonot, for positive coverage.The new case, however, “is the most serious of all those of which Netanyahu has been accused,” the Associated Press reports: Two of his top confidants have turned state witnesses and are believed to have provided police with incriminating evidence. Netanyahu held the government’s communications portfolio until last year and oversaw regulation in the field. Former journalists at the Walla news site have attested to being pressured to refrain from negative reporting of Netanyahu. Netanyahu, for his part, denies wrongdoing.
America Is Headed For Military Defeat in Afghanistan - . Maj. Danny Sjursen -- Consider this: the U.S. military has advised, assisted, battled, and bombed in Afghanistan for 17-plus years. Ground troop levels have fluctuated from lows of some 10,000 to upwards of 100,000 servicemen and women. None of that has achieved more than a tie, a bloody stalemate. Now, in the 18th year of this conflict, the Kabul-Washington coalition’s military is outright losing. Let’s begin with the broader measures. The Taliban controls or contests more districts—some 44 percent—than at any time since the 2001 invasion. Total combatant and civilian casualties are forecasted to top 20,000 this year—another dreadful broken record. What’s more, Afghan military casualties are frankly unsustainable: the Taliban are killing more than the government can recruit. The death rates are staggering, numbering 5,500 fatalities in 2015, 6,700 in 2016, and an estimate (the number is newly classified) of “about 10,000” in 2017. Well, some might ask, what about American airpower—can’t that help stem the Taliban tide? Hardly. In 2018, as security deteriorated and the Taliban made substantial gains, the U.S. actually dropped more bombs than in any other year of the war. It appears that nothing stands in the way of impending military defeat. Then there are the very recent events on the ground—and these are telling. Insider attacks in which Afghan “allies” turn their guns on American advisors are back on the rise, most recently in an attack that wounded a U.S. Army general and threatened the top U.S. commander in the country. And while troop numbers are way down from the high in 2011, American troops deaths are rising. Over the Thanksgiving season alone, a U.S. Army Ranger was killed in a friendly fire incident and three other troopers died in a roadside bomb attack. And in what was perhaps only a (still disturbing) case of misunderstood optics, the top U.S. commander, General Miller, was filmed carrying his own M4 rifle around Afghanistan. That’s a long way from the days when then-General Petraeus (well protected by soldiers, of course) walked around the markets of Baghdad in a soft cap and without body armor.
"I Begged Them To Kill Me": Muslim Woman Describes Degrading, Electroshock Torture In Chinese Internment Camp - A Uighur Muslim woman claims she was tortured and abused at a Chinese internment camp where hundreds of thousands of religious minorities are being kept, according to the Independent. 29-year-old Mihrigul Tursun told reporters during a Washington press conference that she was subjected to a degrading four-day interrogation which included no sleep, having her head shaved, electrocution and "an intrusive medical examination," after her second arrest in China in 2017. Tursun claims that the abuse got worse when she was arrested a third time. "I thought that I would rather die than go through this torture and begged them to kill me," Tursun told journalists at a National Press Club meeting. China has come under fire in recent months over their treatment of Muslims known as Uighurs - of which as many as two million have been incarcerated in "reeducation camps" in the country's far west to reprogram them for what the government has called "ethnic unity." Chinese authorities routinely deny any ethnic or religious repression in Xinjiang. They say strict security measures – likened by critics to near martial law conditions, with police checkpoints, the detention centers, and mass DNA collection – are needed to combat the influence of extremist groups. After initial blanket denials of the detention facilities, officials have said that some citizens guilty of “minor offences” were sent to vocational centers to improve employment opportunities. -Reuters Raised in China, Tursun moved to Egypt to study English at a university where she met her husband. Together they had triplets. In 2015, she traveled back to China to visit family and was immediately detained and separated from her infant children. After her release three months later, Tursun found that one of her children had died and the other two had health issues. She claims the children had been operated on. Tursun was arrested around two years later for a second time - while several months later she was detained for a third time where she spent three months in a cramped prison cell along with around 60 other women. The group had to take turns sleeping, and toilets were situated in front of security cameras. She says that the women were forced to sing propaganda songs praising China's Communist Party. Ms Tursun said she and other inmates were forced to take unknown medication, including pills that made them faint, and a white liquid that caused bleeding in some women and loss of menstruation in others. She said nine women from her cell died during her three months there.
Chinese Gene-Editing Scientist He Jiankui Mysteriously Disappears — The Chinese researcher who shocked the scientific community with claims that he used cutting-edge gene-editing technology to alter the DNA of two babies and several embryos has mysteriously disappeared. Scientist He Jiankui has not been seen since Wednesday of last week, after he attended the Second International Summit on Human Genome editing in Hong Kong where he defended his work, according to the South China Morning Post. Reports that he was detained were dismissed by his former employer, the Southern University of Science and Technology (SUSTC), located in Shezhen. A spokeswoman for the university declined to elaborate, stating “We cannot answer any questions regarding the matter right now, but if we have any information, we will update it through our official channels.”Over the weekend, some media outlets reported that the scientist had been brought back to Shenzhen by the university’s president.The reports claimed he was being kept under effective house arrest after he made an appearance at the Second International Summit on Human Genome Editing in Hong Kong on Wednesday. –SCMPHe has been branded “China’s Frankenstein” following the release of a YouTube video last week in which he claimed that he had edited the genes of twins born in China to effectively switch off an HIV-related gene because their father has the virus.
China prepares mission to land spacecraft on moon’s far side (AP) — China launched a ground-breaking mission Saturday to land a spacecraft on the largely unexplored far side of the moon, demonstrating its growing ambitions as a space power to rival Russia, the European Union and the U.S. A Long March 3B rocket carrying a lunar probe blasted off at 2:23 a.m. from the Xichang Satellite Launch Center in Sichuan Province in southwestern China, the official Xinhua News Agency said. With its Chang’e 4 mission, China hopes to be the first country to make a soft landing, which is a landing of a spacecraft during which no serious damage is incurred. The moon’s far side is also known as the dark side because it faces away from Earth and remains comparatively unknown. It has a different composition than sites on the near side, where previous missions have landed. If successful, the mission would propel the Chinese space program to a leading position in one of the most important areas of lunar exploration. China landed its Yutu, or “Jade Rabbit,” rover on the moon five years ago and plans to send its Chang’e 5 probe there next year and have it return to Earth with samples — the first time that will have been done since 1976. A crewed lunar mission is also under consideration. Chang’e 4 is also a lander-rover combination and will explore both above and below the lunar surface after arriving at the South Pole-Aitken basin’s Von Karman crater following a 27-day journey. It will also perform radio-astronomical studies that, because the far side always faces away from Earth, will be “free from interference from our planet’s ionosphere, human-made radio frequencies and auroral radiation noise,” space industry expert Leonard David wrote on the website Space.com. It may also carry plant seeds and silkworm eggs, according to Xinhua.
China's MOC spokesperson talks on economic, trade consultation with U.S. - (Xinhua) -- A spokesperson for the Ministry of Commerce (MOC) said Wednesday that the latest meeting between presidents of China and the United States on economic and trade issues was "very successful.""We are confident about the implementation [of the consensus from the meeting]," the spokesperson said."In 90 days, economic and trade teams of both sides will actively push forward the consultation following clear schedule and roadmap," the spokesperson said.China will start with implementing the specific aspects of the newly-reached consensus as soon as possible, according to the spokesperson.Recently, Chinese President Xi Jinping and his U.S. counterpart Donald Trump held a meeting at a working dinner in Buenos Aires, reaching important consensus and agreeing not to impose new additional tariffs.They also instructed the economic teams of the two sides to step up negotiations toward the removal of all additional tariffs and reach a concrete agreement that would lead to win-win results.
A Defiant Huawei Says It Won't Change Ties With Suppliers Due To US Pressure - A defiant Huawei Technologies sent a letter on Thursday night to its global supply-chain partners, which was seen by Sina, according to which it won't change ties with its suppliers, and adding that it has "very little" information regarding U.S. accusations against its CFO Meng Wanzhou, and has "no knowledge of any improper behavior on the CFO’s part." The company added that it believes the Canadian, U.S., judicial systems will come to fair conclusions to the case; and that Huawei will update its partners if it has further information But most notably, Huawei said the American "use of all sorts of means to pressure business goes against fair competition" adding that won’t change its cooperation with global supply-chain partners because of the U.S. actions. Meanwhile, everyone's attention remains glued to Trump's twitter feed who in addition to not tweeting about the market for quite a while, has yet to opine on the Huawei scandal du jour
China Prepares Retaliation To Huawei CFO Arrest -- As Beijing's outrage over the arrest of Huawei CFO Wanzhou Meng simmers ahead of her Friday arraignment in a Canadian court, Bloomberg has shed some light on how news of her arrest has resonated with different factions in the Chinese leadership. The upshot is that while officials in charge of managing China's trade negotiations believe China shouldn't allow Wanzhou's arrest to impact trade negotiations, hardline national security officials believe the arrest is an embarrassment to Chinese leader Xi Jinping, who reportedly had 'no idea' that the daughter of a Chinese business icon and Communist Party member had been arrested in Canada - and that China should use trade talks as leverage to demand that she be released.Western media outlets have reported that, while White House officials and National Security Advisor John Bolton knew about Wanzhou's arrest before Saturday's meeting between Trump and Xi, the president somehow had no idea.Now, BBG is reporting that Xi similarly had no idea that one of his country's most prominent executives had been taken into custody hours before he sat down with Trump. This asymmetry is viewed as deeply embarrassing to China's leader, and many believe that simply letting trade negotiations to move forward as plan would be an unconscionable capitulation - particularly if (as many analysts believe) the Trump Administration intends to use her arrest as leverage. Still others believe that Wanzhou's arrest is a "gift" for Xi, because it gives cover for the Chinese to dig in their heels and accuse the US of using the trade war as a pretext to stymie China's ascent as a global superpower. In light of Wanzhou's arrest, such a stance would likely garner more sympathy from the rest of the world.
Putin Initiates Trilateral Summit With India And China - The trilateral summit meeting of Russia, India and China on the sidelines of the G20 at Buenos Aires on December 1 becomes a landmark event in Asian security and global politics. The so-called RIC format has taken a big leap forward with the leaderships of the three countries agreeing “to hold further such trilateral meetings on multilateral occasions” – to quote from an Indian External Affairs Ministry statement. What is of particular interest is that Russian President Vladimir Putin took the initiative and both Indian Prime Minister Narendra Modi and Chinese Presdient Xi Jinping instinctively warmed up to the idea. The three leaders were intensely conscious of the backdrop in which the meeting took place.They referred to the imperatives of cooperation and coordination between their countries in meeting the challenges to security and development. Promotion of the multilateral system, the democratization of the international order and world peace and stability was repeatedly stressed. Significantly, Prime Minister Modi’s remarks were most emphatic and specific. Modi noted that the meeting provided “an opportunity to freely and openly discuss some key matters that cause concern on the global level.” He added, “Your Excellencies, without a doubt, the world today is going through a period of serious change, instability and growing geopolitical tensions. There is serious pressure being exerted on the global leadership. Multilateral relations and the world order based on common rules are being increasingly rejected by various unilateral, transnational and local groups, and different nations around the world. We can see this happening as sanctions are imposed outside the UN mandate and protectionist policies are gaining strength.” “The Doha Development Agenda within the WTO has failed. Since the Paris Agreement, we have not seen the expected level of financial commitment on behalf of the developed countries in favour of the developing states. Therefore, when it comes to climate, justice is currently at risk. We are still very far from achieving the goals of sustainable development.” Modi’s thinly veiled criticism of the US policies will be noted. All three leaders underscored that Russia, India and China have an important leadership role in the present international milieu and acknowledged the need to strengthen the RIC trilateral cooperation mechanism.
Why Is Modi Not Accepting Pakistan’s Offer of Talks -Prime Minister Imran Khan of Pakistan’s open appeal for talks with India, and Indian external affairs minister Sushma Swaraj’s statement ruling out India’s participation in even the SAARC summit are developments that should concern all Indians. While someone is saying “Let’s save countless lives and money”, we are refusing to even hear him out.Pakistan’s desire for talks, a settlement of the Kashmir issue and finally peace with India is nothing new. It was General Pervez Musharraf who brought this proposal to almost the finishing line, but bickering by the then opposition BJP got the better of Manmohan Singh while domestic troubles in Pakistan weakened the general to the point that a golden opportunity slipped out of their hands. Pakistani elections always see the main contenders for power going to their voters with a manifesto that includes seeking peace with India. Surely they do so because they feel this is what their people want. Even in the last elections, all three prime ministerial candidates dealt their final cards by claiming they would normalise relations with India if they came to power.And now, at Kartarpur, Imran Khan has bowled us a peace googly which we are unable to face up to. It is inconceivable why India, with its numerous other problems of nation-building, should refuse this offer. We are acting as if Pakistan is demanding unconditional surrender from India. No other explanation suffices to explain New Delhi’s stand. “Terror and talks can’t go together,” the external affairs minister repeated recently. Really? Even if, for the sake of argument, it be agreed that terrorism in J&K is solely the result of Pakistan, do we mean that we don’t want to counter this terrorism if it can happen by talks alone? Are we willing to counter it only by having our soldiers and Kashmiri citizens die for it – something they have been doing without the problem ending – and not by trying the talks route?
Four jobless youths commit suicide -- In a collective suicide, four youth aged 17 to 24 years old jumped into the face of an oncoming train in the northwestern state of Rajasthan late last month.The college-educated youth reportedly took this horrific step because they were overwhelmed at the prospect of being jobless. Three of them, Manoj Meena aged 24, Satyanarayan Meena aged 22, and Rithuraj Meena aged just 17, died on the spot. Eighteen-year-old Abhishek Meena succumbed to his injuries after being hospitalized.All four hailed from the same village and shared an apartment not far from the railway tracks where they took their lives. The media reported their friends, 18-year-old Rahul and 19-year-old Santosh, as saying that the four youth had seen no escape from an abysmal future of joblessness and poverty. Without work, they would be forced to return to their backward village and to try to subsist as farmers in what is one of the most arid and impoverished parts of India.The tragic joint suicide of these young graduates highlights the stark reality facing Indian youth.Despite the incessant boasting of India’s ruling elite, particularly Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP)-led government, about the country having the highest growth rate among the world’s large economies, India faces a devastating jobs crisis, with millions unable to find work, let alone well-paying, secure employment.
Bhopal gas tragedy: Wrong medication killed more people, reveal PMO files; 20-25 dying per month even after 34 years - Tragedy did not strike Bhopal on the intervening night of 2-3 December 1984 but thereafter. The massive leakage of Methyl Isocyanate (MIC) gas from the Union Carbide plant resulted in colossal loss of life and an estimated 8,000 died within two weeks and more than five lakh were affected.More than 700 documents accessed from the Prime Minister's Office during Rajiv Gandhi tenure reveals horrible relief and rehabilitation measures including administering wrong medication to the victims and a dysfunctional administration.The B hopal gas tragedy was the biggest industrial disaster in terms of loss of human lives, in the history of the world. The tragedy, for the first time, made people aware of the magnitude of a peace-time calamity. The lingering impact of the tragedy is horrific and at least 20-25 victims are losing their life every month even now. Do the successive government's care about the 5,74,376 survivors? No. Was the then government's response to the lethal gas leak swift and accurate? The answer is an absolute ‘No'. The facts buried in the secret files and the reality of present day is disturbing and shocking. The victims are forced to live on an island without a government.
The G20’s Africa Problem - This has not been an easy year for the G20. The 2018 summit of the leaders of the world’s largest economies is being held in Buenos Aires, a city still reeling from a currency collapse. More broadly, the summit is taking place amid a fracturing of the multilateral order. Everything from NATO to the consensus on climate change appears to be coming apart at the seams. Still, the G20 has long positioned itself as a global problem solver, having been conceived after the 1997 Asian financial crisis and then emerging as the primary global forum for addressing the crash of 2008. A decade later, a global crisis is on the agenda once again, only this time it has assumed the form of a mounting trade war between the United States and China.Unlike in 2008, however, the world’s capacity for multilateral decision-making is deteriorating. The European Union remains preoccupied with its own internal disputes, and the United States, under President Donald Trump, has abandoned multilateralism and weakened the institutions needed to solve complex challenges such as the threat of technological unemployment from automation. And the effects of the Trump administration’s protectionism are already being felt. The World Trade Organization recently reported that in response to US tariffs, G20 countries have imposed around 40 new import restrictions, affecting $481 billion in global trade – a sixfold increase from the year before.But while the world’s economic giants have been withdrawing from multilateralism, Africa has been quietly moving in the opposite direction. Earlier this year, the continent’s countries agreed on a new African Continental Free Trade Agreement, and committed to pursuing deeper cross-border economic and infrastructure integration within the framework of the African Union, as outlined in the AU’s Agenda 2063.But, despite its embrace of multilateralism, Africa has struggled to get the G20’s attention. South Africa is the only African country in the G20, and it must constantly walk the fine line of speaking for the continent’s interests without imposing its voice on its neighbors. True, representatives from the AU and the New Partnership for Africa’s Development do attend G20 summits. But the countries occupying each institution’s rotating leadership do not always have the capacity to advocate forcefully on the continent’s behalf. Moreover, this problem is compounded by the limited scope of the G20’s interactions with Africa. Rather than including Africa in wider discussions about global trade architecture, climate change, and the future of work, the G20 has largely limited its engagement with the continent to addressing narrower development issues.
Mexico new president vows to end ‘rapacious’ elite in first speech (Reuters) - Veteran leftist Andres Manuel Lopez Obrador took office as Mexican president on Saturday, vowing to see off a "rapacious" elite in a country struggling with corruption, chronic poverty and gang violence on the doorstep of the United States. Backed by a gigantic Mexican flag, the 65-year-old took the oath of office in the lower house of Congress, pledging to bring about a "radical" rebirth of Mexico to overturn what he called a disastrous legacy of decades of "neo-liberal" governments. "The government will no longer be a committee at the service of a rapacious minority," said the new president, who is often nicknamed AMLO. Nor would the government, he said, be a "simple facilitator of pillaging, as it has been." Lopez Obrador later addressed a massive crowd of supporters in the heart of the capital, promising to put Mexico's sizeable indigenous minority first in his drive to root out inequality. A major challenge facing the new leader is managing relations with Mexico's top trading partner, the United States, after repeated broadsides by President Donald Trump against Mexico over illegal immigrants crossing the U.S. border. Lopez Obrador repeated he was seeking to contain migration through a deal with Trump and Canadian Prime Minister Justin Trudeau to foster development in Central America and Mexico. The first leftist to take office in Mexico in a generation also tried to reassure business after markets slumped since the July 1 election on worries about his policies, including the abrupt cancellation of a $13 billion new Mexico City airport. Lopez Obrador reiterated investments in the country of 130 million people would be safe, and pledged to respect central bank independence. Saying his government would make savings by stopping losses from the public purse into the "sewer of corruption," he promised not to raise national debt or taxes. But he promised higher wages for the poor and zero tolerance for corruption in his administration.
Mexico’s New President Restarts Investigation Into 43 Missing Students — President Andrés Manuel López Obrador of Mexico created a truth commission on Monday to re-examine the case of 43 students whose disappearance in 2014, still unsolved after a disputed investigation, has come to represent the tens of thousands of Mexicans who have vanished in more than a decade of the drug war. Just two days after taking over as Mexico’s leader, Mr. López Obrador set a new tone for the government, pledging to deliver justice to victims of violence and corruption. “I assure you there won’t be impunity in this sad and painful case,” said Mr. López Obrador, flanked by two of the missing students’ parents. The students’ relatives, many from rural communities in Mexico’s poorest states, sat in the front row of the president’s first public event at the National Palace, holding large images of their missing sons. Alejandro Encinas, the incoming deputy interior minister for human rights, will head the commission. It will start a new investigation under a special prosecutor’s office and will aim to consider all leads, including those that were ignored or discarded by the former government. The students, who were studying to be rural teachers, disappeared in September 2014 from the southern city of Iguala, after the municipal police attacked the buses they were riding. The government of former President Enrique Peña Nieto said that the students were then handed over to a local drug gang, which killed them and burned their bodies in a nearby garbage dump. The remains of only one student have been identified. The case soon became a symbol of widespread disappearances, violence and corruption in Mexico — and the impunity with which such crimes were carried out.
Canada Arrests CFO of Chinese Telecom Giant for Violating US Sanctions on Iran — Canada arrested China’s Huawei Technology’s chief financial officer for allegedly violating US sanctions on Iran, the Wall Street Journal reported on Wednesday. Meng Wanzhou faces possible extradition to the US, WSJ added. ACanadian justice department spokesperson said she was arrested on 1 December. A Huawei spokesman said the arrest happened as Meng was transferring flights. “The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms Meng,” he said. “The company believes the Canadian and US legal systems will ultimately reach a just conclusion.” Meng’s bail hearing is set for Friday, according to a Globe and Mail report, citing Canada’s Justice Department spokesman Ian McLeod. Meng’s arrest follows a strict set of US sanctions on Iranian oil and banking that was implemented in November but allowed a number of countries, including China, temporary waivers. According to a Wall Street Journal report in April, the US Department of Justice had launched a criminal probe into Huawei for its alleged trade with Iran, and both the Commerce Department and Treasury Department had issued subpoenas for a potential violation of US sanctions. Huawei is the world’s largest manufacturer of cellular-tower electronics and the third-biggest smart phone producer. Meng’s arrest happened on the same day that US President Donald Trump and Chinese leader Xi Jinping met to discuss a possible truce to their ongoing trade war. US Senator Ben Sasse, a Republican, said the arrest was made to protect American interests. “Americans are grateful that our Canadian partners have arrested the chief financial officer of a giant Chinese telecom company for breaking US sanctions against Iran,” he said.
Huawei CFO Charged With Fraud, Deemed Flight Risk Whose Bail Couldn't Be High Enough - During the first hearing of Huawei Chief Financial Officer Meng, Canadian prosecutors have revealed the charges over which the US is seeking her extradition: She has been accused of conspiracy to defraud banks due to what prosecutors allege was an attempt to cover up transactions involving a Huawei subsidiary that violated US sanctions against Iran. Appearing in court wearing a green jumpsuit and without handcuffs, Meng reportedly looked to be in good spirits in a Vancouver courtroom where the prosecutions' case was detailed publicly for the first time. Despite the gravity of the allegations against her, Meng displayed a light-hearted demeanor as she entered the court, smiling and laughing as she conferred with her lawyer, David Martin, and at one point during the proceedings, she even flashed him a 'thumbs up.' But her sunny demeanor soon faded as the Canadian government’s lawyer, John Gibb-Carsley, launched into a description of the allegations facing Meng - namely, that she was being charged with multiple "fraud offenses" under Canadian law involving her work to knowingly violate sanctions against Iran imposed by the US and EU. Update (7 pm ET): Friday's bail hearing was adjourned without a ruling on whether Meng is to be freed on bail. The Canadian government is arguing against it, citing Meng's immense resources and lack of a connection to Canada. Meanwhile, her lawyer has argued that her family fortune cannot be held against her. The hearing will resume on Monday.
Huawei executive accused of hiding connection to firm violating U.S. sanctions, B.C. court told -- The chief financial officer of China’s Huawei Technologies committed fraud in 2013 when she told U.S. banks that her company had no connection to a Hong Kong firm that was reportedly doing business with Iranian telecom companies in violation of U.S. sanctions, a Crown lawyer told a B.C. Supreme Court judge Friday. Crown counsel John Gibb-Carsley said Meng Wanzhou should be extradited to the United States to face criminal proceedings there over what the U.S. alleges are Huawei’s ties to Skycom and Ms. Meng’s efforts to conceal those ties. “Ms. Meng personally represented to those banks that Skycom and Huawei were separate when in fact they were not separate,” he said. “Skycom was Huawei.” Mr. Gibb-Carsley also told court that while Ms. Meng awaits extradition, she should remain in a Canadian jail because she is an extreme flight risk. He noted that her father, the founder of Huawei, has a fortune estimated at US$3.2-billion. Ms. Meng has “access to vast resources and connections” and she could easily flee back to China if she were granted bail, he said. He also alleged that she has established a pattern of not flying through the U.S. since becoming aware of the investigations into her activities by authorities there. She was arrested at Vancouver International Airport on Dec. 1 while awaiting a connection to Mexico. But one of Ms. Meng’s many lawyers, David J. Martin, told the court that his client’s prominence in China, as well as her high level of personal dignity, would stop her from violating the terms of any bail. “In addition, she would not breach a court order because to do so would humiliate and embarrass her father, whom she loves,” he said. Mr. Martin said his client was loath to embarrass her company and its 180,000 or so employees, as well as China itself.
Dear Canada, WTF? - Just hours ago, The Bank of Canada held rates steady and complained about various internal and external factors that were negatively impacting the Canadian economy...Holding rates unchanged at 1.75%, the BOC cited almost everything that has gone wrong:
- moderating global growth,
- a “materially weaker” outlook for the oil sector,
- a faster-than-expected deceleration of inflation,
- a drop in business investment and downward historical revisions to output
And today we get this... Canada added 94,100 jobs in November - the most ever! Sending the Canadian unemployment rate to a record low 5.6%...
US Military Contractor Posts Job Offering for “Classified Contingency Operations” in Ukraine — The geopolitical analysis site SouthFront has unearthed from the pages of LinkedIn an incredible public job offering by a US defense contractor which reveals potentially sensitive information. The job posting mentions “classified Contingency Operations” in Ukraine and was posted a mere 15 days ago — just prior to last Sunday’s incident between the Russian and Ukrainian navies in the Kerch Strait. Writes SouthFront, the US-based defense contractor company “Mission Essential” accidentally revealed a US military specialist deployment in the combat zones in Ukraine via a Job Advertisement on LinkedIn. Crucially, it’s yet further evidence which disproves the years-long claims by Washington that the United States is not directly involved militarily in the Ukraine conflict. The public posting suggests US special forces operations are indeed active and ongoing as tensions with Russia soar.Similar to the Atlantic Council’s latest report on the independence of Eastern European countries, as well as the meeting between US Secretary of State Mike Pompeo and Ukrainian Foreign Minister Pavlo Klimkin, the posting came just days before the escalation in the Sea of Azov.“Mission Essential” is a government contractor based in the Washington D.C. suburb of Herndon, VA primarily serving intelligence and military clients, and is also considered a leading provider of translation and interpretation services for the US government.The preemptive job advert was posted on November 16th and seeks:…linguist candidates who speak Ukrainian to provide foreign language interpretation and translation services to support classified Contingency Operations in support of the U.S. Military in Ukraine. The formal place of work is Mykolayiv, Ukraine. The port city is also significant, because that is where the US “logistical” naval facility is currently under construction.
Ukraine Urges NATO To Send Warships To Confront Russia - Still bound and determined that the maritime incident last weekend in the Sea of Azov portends a full-scale war with Russia, Ukrainian President Petro Poroshenko called on all NATO nations and other allied states to start relocating warships en masse to the sea to “assist Ukraine” in a conflict. "We cannot accept this aggressive policy of Russia. First it was Crimea, then eastern Ukraine, now he wants the Sea of Azov. Germany, too, has to ask itself: What will Putin do next if we do not stop him?" Poroshenko singled out Germany as a nation that should rush warships to the area, saying that Germany needs to consider where Putin will strike next after taking over Ukraine. He added that he is positive Putin wants the whole country. "Germany is one of our closest allies and we hope that states within Nato are now ready to relocate naval ships to the Sea of Azov in order to assist Ukraine and provide security," he said. As a practical matter, NATO nations are severely limited in the warships they could send to the area by the 1936 Montreux Convention, which severely limits the number of warships allowed to pass through the Bosporus Straits. This means that even if Germany had a vast navy, which it doesn’t, they would not legally be able to deploy large numbers in the Black Sea or Sea of Azov, and certainly would need more than a couple of frigates to square off with the entire Russian Black Sea Fleet.
U.S. Prepares To Sail Warship Into Black Sea, Citing Kerch Strait Incident - The potential for major escalation in the Black Sea between the United States and Russia just grew significantly hotter as the US military has formally notified Turkey that it plans to sail a warship into the Black Sea for the first time in a month. US defense officials have told CNN that the request is specifically in response to Russia's actions against Ukraine during the Nov. 25 Kerch Strait incident. According to a CNN exclusive Wednesday afternoon:The US has begun making the necessary preparations to sail a warship into the Black Sea, a move tat comes amid heightened tensions in the region following Russia's seizure of Ukrainian ships and detention of Ukrainian sailors.The US military has requested that the State Department notify Turkey of its possible plans to sail a warship into the Black Sea, three US officials tell CNN, a move they said is a response to Russia's actions against Ukraine in the Kerch Strait, which connects the Black Sea and the Sea of Azov.The military has made the request as required under the Montreux Convention — the 1936 agreement which gave Turkey control over the Bosporus Straits and the Dardanelles, including authority to regulate the transit of naval warships.A State Department spokesman told CNN, "the United States carries out its activities consistent with the terms of the Montreux Convention. We will not, however, comment on the nature of our diplomatic correspondence with the Government of Turkey." There was no early indication whether Turkey granted the passage, which could be interesting given recent closer relations between Ankara and Moscow. But two among CNN source's cautioned that giving Turkey notification would merely provide the Navy "the option" of moving a warship into the area, suggesting that no battleships have necessarily yet to be deployed.
U.S. carries out extraordinary flight over Ukraine, citing Russian attack -The U.S. carried out an "extraordinary" flight over Ukraine Thursday days after Russia seized three Ukrainian naval ships off Crimea. Citing the Open Skies Treaty, the Pentagon said the U.S. and allies conducted the flight "to reaffirm U.S. commitment to Ukraine and other partner nations.""Russia's unprovoked attack on Ukrainian naval vessels in the Black Sea near the Kerch Strait is a dangerous escalation in a pattern of increasingly provocative and threatening activity," the Pentagon said in a statement."The United States seeks a better relationship with Russia, but this cannot happen while its unlawful and destabilizing actions continue in Ukraine and elsewhere." Russia blamed Ukraine for provoking the incident, which sharply escalated tensions that have been growing between the two countries since Moscow annexed Crimea from Ukraine in 2014, and it has worked steadily to bolster its zone of control around the peninsula.
Hundreds arrested as police clash with ‘Yellow Vest’ protesters in Paris -- Protesters angry about rising fuel taxes clashed with French police for a third straight weekend and scores were arrested after demonstrators built barricades in central Paris, lit fires and threw rocks at officers Saturday.According to figures released by French interior ministry, around 75,000 demonstrators took to the streets across France today in the anti-Macron protests.Prime Minister Edouard Philippe said earlier on Saturday that "1,500 troublemakers" were around the Champs-Elysées avenue, outside a perimeter secured by police, who said that 378 people were arrested in Paris.Protesters, including some wearing black hoodies, piled up large plywood planks and other material in the middle of a street near the Arc de Triomphe, and set the debris on fire. At least 133 people have been injured, including 23 police officers. French authorities have drafted thousands of extra police officers into Paris."We are in a state of insurrection, I've never seen anything like it," said Jeanne d'Hauteserre, the mayor of Paris' 8th district, near the Arc de Triomphe. Meanwhile demonstrators have stolen an assault rifle from a police van in central Paris, according to police sources. At least 19 Paris metro stations have been shut due to the unrest, French TV news channel BFMTV has reported.Paris’s Galeries Lafayette and Printemps department stores have been evacuated because of the violence linked, while firemen were called to put out a fire at a building near the Champs-Elysées, according to a Reuters witness. Protesters also smashed the windows of shops including branches of Chanel, Dior and Apple.
The elusive face of the Paris rioters - Angry "yellow vest" protesters, hard-core agitators or young delinquents: building a typical profile of the rioters in Paris this weekend is no easy task. AFP correspondents who talked to demonstrators and observed Saturday's violence found that they did not all come from the same mould. Interior Minister Christophe Castaner denounced what he called the "professionals of disorder" and destruction who had organised the violence. The "casseurs" (rioters) who smashed up parts of Paris were exploiting the "yellow vests" campaign for their own ends, he said. Junior interior minister Laurent Nunez took a similar line, saying the violence had not been carried out by the "yellow vests" but by people dressed in camouflage gear. "It's only the 'casseurs' who came to have a go at the police," he said. But as clouds of tear gas filled the streets of some of the most up-market neighbourhoods of Paris Saturday, the truth seemed a little more complex to AFP journalists on the ground. Some "yellow vest" protesters were involved in the wave of destruction. They came from all over France, more often than not in their thirties, and wearing ski masks or workmen's masks. They were not necessarily hard-core political activists nor veterans of street violence: some of them however were ready to resort to violence to protest against government policies. Some of them helped build the barricades set up in the streets to hamper the advance of the police. "This violence, it's legitimate," said 45-year-old Chantal, who had travelled down from Lorraine, northeast France, with her husband and two children. "Every month we end up 500 euros in the red. That's three years that we've not gone on holiday." Many other "yellow vest" protesters who spoke to AFP nevertheless condemned the violence, saying that it damaged their cause.
Third “yellow vest” protest in France defies government crackdown- The third Saturday protest held by protesters, clad in yellow vests to show their opposition to French President Emmanuel Macron and his anti-worker policies, spread across France. In downtown Paris, the protesters faced an unprecedented police crackdown, the most violent since May 1968, when police assaults on student demonstrations triggered the French general strike.The movement is rapidly developing into an international political protest against social inequality, the high cost of living, and the policies of austerity and war across Europe. After protests in France and Belgium, protesters also donned yellow vests to oppose state policies in Maastricht, Nijmegen and The Hague in the Netherlands. In France, protests broke out in Paris, Bordeaux, Rennes, Marseille, Toulouse, Dijon, Nantes, Nice, Strasbourg and Caen. They also took place at many highway toll booths and airports.French police used violence and mass arrests in a failed attempt to intimidate the participants. Across France, there were 412 arrests, including 287 in Paris, where dozens were wounded. Since Saturday, 378 people have been placed in preventive detention, including 33 minors. In Marseille, where clashes with police lasted until the evening, 21 were arrested.In Paris, riot police blocked traffic and shut down mass transit across much of the downtown area from 6 a.m., setting up identity checks and systematically searching protesters. At about 9 a.m., a few hours before the protests were scheduled to start, riot police began firing volleys of tear gas and assaulting protesters on the Place de l’Étoile, around the Arc de Triumph, at the western end of the Champs-Elysées avenue.Protesters chanting “Macron resign” spread into streets adjacent to the Champs-Elysées, where they were assaulted by police. As they tried to build barricades, riot police responded by firing volleys of tear gas, as well as stun grenades, rubber bullets and water cannon. Clashes rapidly erupted across the city. Cars, a LCL bank branch, the stock exchange and the Jeu de Paume art museum were burned, and the metal gates of the Tuileries gardens were smashed. Videos posted by protesters on social media showed some carrying out violent acts. These were most likely plainclothes policemen acting as provocateurs. They donned yellow vests and attacked luxury cars or shops, and then moved away to speak calmly and amiably to the police.
Why France’s ‘gilets jaunes’ protesters are so angry - France’s “gilets jaunes” protests of December 1 were marked not only by their anger and violence, but also by the variety of those taking part. The violence of the protests – named after the yellow vests worn by those on the streets – is partly the work of extremist, anarchist groups pursuing illusory political goals. Others involved are casseurs or “wreckers”, who’ve inserted themselves in the movement to fight the police and loot stores for the appeal of doing damage and the lure of personal profit. But it seems that some of the gilets jaunes themselves wanted to fight. Above all, they are expressing their anger out loud. The protesters consider themselves as “the people”. Their motives – which include falling purchasing power and rising taxes – are often coupled with frustrations about the gap between the French government and its citizens. This theme has come out in the choice of sites targeted in the violence – the Elysée presidential palace, administrative buildings, banks and luxury shops. .Many of those protesting feel neglected, oppressed and dominated. For the most part they’re employed, but their incomes often don’t meet their needs despite the exhaustion they feel from their work. The simple promise of being able to live off one’s income is no longer being kept. It’s no longer possible for somebody to lead their life as they please, or to make their own choices. How can the ideal of autonomy be achieved if the riches of society aren’t shared out more widely? These are the sentiments felt by couples who say they “can’t get by” despite having two jobs, or young workers who still live with their parents because their income is insufficient or too unstable for them to move out. The anger on display in the protests stems from this impossible equation. And since the collective notion of social class has disappeared in France, this anger is now being experienced on a personal level. Difficult living conditions are now more a matter of personal experience than a condition of class.
Paris rioting: French government considers state of emergency over ‘gilets jaunes’ protests - France will consider imposing a state of emergency to prevent a recurrence of some of the worst civil unrest in more than a decade, a government spokesman said on Sunday, as peaceful protestors were urged to come to the negotiating table. The morning after groups of young men wearing masks rioted on the streets of central Paris, Benjamin Griveaux told Europe 1 radio: “We have to think about the measures that can be taken so that these incidents don’t happen again.” When asked about imposing a state of emergency, Griveaux said the president, prime minister and interior minister would discuss all options available to them at a meeting on Sunday. The French president, Emmanuel Macron, has insisted he will “never accept violence” after central Paris saw its worst unrest in a decade on Saturday when thousands of masked protesters fought running battles with police, torched cars, set fires to banks and houses, and burned makeshift barricades on the edges of demonstrations against fuel tax. Near the Arc de Triomphe, one of Paris’s best-known monuments, masked men burned barricades, set fire to buildings, smashed fences and torched luxury cars on some of the most expensive streets in the city as riot police fired teargas and water cannon. Then, by early evening, rioters spread around Paris in a game of cat and mouse with police. Luxury department stores on Boulevard Haussmann were evacuated as cars were set alight and windows smashed. Near the Louvre, metal grilles were ripped down at the Tuileries Garden where fires were started. On the Place Vendôme, a hub of luxury jewellery shops and designer stores, rioters smashed windows and built barricades.
French government to delay fuel tax hike after violent protests - French government is to suspend a controversial rise in fuel tax that has caused widespread protests throughout the country and dramatic scenes of violence and civil unrest. French media had reported Tuesday morning that Prime Minister Edouard Philippe was ready to announce a moratorium on the planned fuel tax hike that has caused public anger in the country. Commenting around midday, Philippe said that "you'd have to be deaf not to hear the anger of the French," according to Reuters."After hearing (the) anger I am suspending for six months three fiscal measures including fuel tax increases," he said. The prime minister added that the violence that has beset France in recent weeks must stop and that no tax should endanger national unity. The concession from the French government comes after leaders from the "Yellow Vest" movement, so-called because of the high visibility jackets worn by demonstrators, reportedly refused to meet Philippe on Tuesday for talks on how to diffuse opposition to planned fuel tax increases.Analysts like Charles Lichfield from Eurasia Group say that the moratorium won't necessarily stop the protests, however."The government has decided to make small concessions now," Lichfield said in a note Tuesday. "This attempt to separate the softer end of the gilet jaune movement from those who protested violently last Saturday is unlikely to be enough.""There are still no plans to reverse the initial tax hike from last January although this was what squeezed household budgets when the global oil price spiked in September-October. Moreover, the small concession gives protesters the impression they have intimidated the government and can obtain much more," he added. Ahead of Tuesday's decision, Macron was seen to be facing a stark choice of either watering down his controversial carbon tax or potentially facing more trouble."The government's inability to respond to the demonstrations to date is explained mostly by the sui generis character of the yellow vest movement. Having organized themselves over the internet, the protesters lack formal structures of leadership," Antonio Barroso, deputy director of research at Teneo Intelligence, said in a note Monday.
France suspends fuel tax rise after wave of violent protests … The French government has suspended plans to introduce an eco-fuel tax after three weeks of increasingly violent protests across the country. Bowing to pressure from the street, the prime minister, Édouard Philippe, also announced an immediate freeze on gas and electricity prices, but he warned further violence would not be tolerated. Philippe’s announcement came after he met cabinet ministers on Tuesday morning to agree a response to a weekend of rioting, looting and destruction in Paris by an extreme fringe of the gilets jaunes (yellow vests) movement. The tax on petrol and diesel, due to increase next month in a move towards cleaner fuels, had prompted national demonstrations that quickly grew to encompass wider anger and frustration at the country’s leaders. The president, Emmanuel Macron, had repeatedly vowed not to give in to street rule, but has been forced to reconsider after the worst violence in Paris in half a century. “Thousands of French have expressed their anger,” Philippe said in a televised statement. “This anger goes back a long way and has often remained silent. Today it’s being expressed with force and in a collective way.” He added: “One would have to be deaf and blind not to see or hear this. I hear this anger and I have understood its basis, its force and its seriousness. It is the anger of the French who work and work hard, but still have difficulty making ends meet, who find their backs against the wall. “They have a sense of profound injustice at not being able to live a dignified life when they are working.” The prime minister announced that two controversial measures due to be introduced next month, the increase in fuel prices and new tougher rules on vehicle checks, would be suspended for six months. He also promised consultations on possible measures to help those who work far from home and changes in the tax system, which he said was complex and the most onerous in Europe. “If events of the last days have shown anything, it is that the French do not want any more taxes or charges. No tax merits putting in danger national unity.”
France’s Latest Protests Are a Rejection of All Things Macron - How did three weeks of protests over a gas tax culminate in the once-in-a-generation riot that engulfed central Paris on Saturday, leaving hundreds injured, more than 400 arrested, and the capital’s central business district a mess of smoke, broken glass, and burned-out cars? What began as an automobile-focused, cost-of-living protest undertaken by a coalition of the white, rural working-class and petite bourgeoisie has evolved into a Hydra-headed autumn of discontent, with many objectives, no leaders, and a base that encompasses a cross-section of French life from engineers to paramedics to Parisian high school students. International coverage has focused on the movement’s opposition to a proposed fuel tax increase that was part of Macron’s plan to combat climate change. But that was only the spark. Spurred by everybody’s favorite anti-governmental social network, Facebook, the gilet jaunes crisis is best understood as a revolt against all things Macron. Elected a few months after Donald Trump took office and just before the U.K. embarked on the geopolitical somersault down the stairs that is Brexit, the fresh-faced young president was supposed to re-ignite French pride and prosperity after the dismal tenure of his socialist predecessor, François Hollande, which was marred by terrorist attacks that plunged the nation into a long state of emergency. Macron’s victory broke the French political system, long dominated by the center-left and center-right. He created a new centrist party, En Marche (On the Move), and then lead it to a huge majority in the French National Assembly. But Macron’s mandate was weaker than it looked: The legislative elections that En Marche dominated featured the lowest turnout in 50 years. The presidential election, in which Macron thumped the far-right, anti-immigrant candidate Marine Le Pen, had the lowest turnout in 40 years—and many voters who didn’t like Macron voted for him only to stop the unthinkable ascendance of Le Pen. In the contested April first-round, Macron took just 24 percent of the vote. So far, he has managed to overcome street protests against his reforms, but his popularity was down to 23 percent after the fracas in Paris this weekend. He is no longer seen as a reformer, but as a distant imperial figure working on behalf of the rich.
France’s Meltdown, Macron’s Disdain -- On November 11th, French President Emmanuel Macron commemorated the 100th anniversary of the end of World War I by inviting seventy heads of state to organize a costly, useless, grandiloquent "Forum of Peace" that did not lead to anything. He also invited US President Donald Trump, and then chose to insult him. In a pompous speech, Macron -- knowing that a few days earlier, Donald Trump had defined himself as a nationalist committed to defending America -- invoked "patriotism"; then defined it, strangely, as "the exact opposite of nationalism"; then called it "treason". In addition, shortly before the meeting, Macron had not only spoken of the "urgency" of building a European army; he also placed the United States among the "enemies" of Europe. This was not the first time Macron placed Europe above the interests of his own country. It was, however, the first time he had placed the United States on the list of enemies of Europe. President Trump apparently understood immediately that Macron's attitude was a way to maintain his delusions of grandeur,as well as to try to derive a domestic political advantage. Trump also apparently understood that he could not just sit there and accept insults. In a series of tweets, Trump reminded the world that France had needed the help of the USA to regain freedom during World Wars, that NATO was still protecting a virtually defenseless Europe and that many European countries were still not paying the amount promised for their own defense. Trump added that Macron had an extremely low approval rating (26%), was facing an extremely high level of unemployment, and was probably trying to divert attention from that. Trump was right. For months, the popularity of Macron has been in free fall: he is now the most unpopular French President in modern history at this stage of his mandate. The French population has turned away from him in droves. Unemployment in France is not only at an alarmingly high level (9.1%); it has been been alarmingly high for years. The number of people in poverty is also high (8.8 million people, 14.2% of the population). Economic growth is effectively non-existent (0.4% in the third quarter of 2018, up from 0.2% the previous three months). The median income (20,520 euros, or $23,000, a year,) is unsustainably low. It indicates that half the French live on less than 1710 euros ($1946) a month. Five million people are surviving on less than 855 euros ($ 973) a month.
There Is Suddenly A Far Bigger European Problem Than Brexit Or Italy - Forget Brexit and Italian populists for a second. It’s worth paying attention to what’s going on in France. For more than two weeks, the country has been disrupted by an unusual protest: the so-called “Gilets Jaunes” or “Yellow Vests.” France is used to labor unrest and chaos affecting transport of course, with strikes something of a national pastime. But this time it’s different. Some 100,000 people blocking toll roads, petrol stations and crossroads is creating major disruption to transport and retail. It’s also proving to be extremely tricky to defuse, as there’s no single protest leader to negotiate with. For investors, the question is whether it could derail the outperformance of French equities in 2018. One thing is clear. These protests are a real threat to the country’s retailers, including Carrefour and Casino, which are already busy battling a price war and trying to fend off Amazon.com's efforts to penetrate their home market. Big-box retailers have been hurt by the demos and blockages throughout the country, with customers denied access to some hypermarkets and supermarkets for entire days at a time. They recorded an average fall in consumer-good sales of 35 percent on Nov. 17 and of 18 percent the following Saturday, according to Nielsen data. All this is adding to the perception of shrinking purchasing power in France, in particular among people on lower incomes. And that “doesn’t bode well” for the year-end holiday retail season, which needs a boost after the unseasonably hot weather of the previous months, according to Invest Securities. In fact, consumer confidence has been depressed since the summer, and this might be the final straw.The protests started on Nov. 10 with thousands of demonstrators demanding lower gasoline prices and taxes. Demonstrators marched on Paris’s Avenue des Champs-Elysees two weeks later, triggering social unrest. Surprisingly, the protest is benefiting from a significant backing, with 84 percent of the French public calling it “justified,” according to Odoxa-Dentsu poll for Le Figaro. If this movement snowballs like we’ve seen in Italy with the Five Star Movement, Macron will have his hands full handling a crisis at home and have less time for the matters of the euro zone. After Greece, Brexit and Italy, this is another front that Europe didn’t need.
French 'Yellow Vests' Reject Macron's Six-Month Tax Delay As Student Protests Intensify -- Despite French President Emmanuel Macron letting his people "eat cake" with a six-month suspension of the government's new "climate change" fuel taxes, the so-called "Yellow Vest" movement which has been protesting throughout France for more than three weeks is still spitting mad. "We didn't want a suspension, we want the past increase in the tax on fuels to be canceled immediately," said Yellow Vest organizer Benjamin Cauchy on BFM TV. "Suspending the tax to re-instate it in six months is taking the French people for a ride. French people aren't sparrows waiting for crumbs from the government."The president's silence drew the wrath of some. "Macron has still not deigned to talk to the people," said Laetitia Dewalle, a Yellow Vests spokeswoman, on BFM TV. "We feel his disdain. He maintains his international engagements but doesn't speak to the people."Sebastien Chenu, a spokesman for Marine Le Pen's far-right National Rally party which has supported the Yellow Vests in hopes of capturing their votes, said on LCI that "the French won't be fooled. The government has understood nothing, it's just playing for time." -Greenwich Time Others, however, may have been assuaged by the "limited time moratorium" on the taxes - as a Tuesday BVA opinion poll for La Tribune reveals that 70% of French citizens surveyed think the postponement justifies stopping the Yellow Vest protests. Footage apparently shows "yellow vest" protesters in Narbonne drive forklift hoisting a burning car into a toll booth as worst urban riots in a decade leave France reelinghttps://t.co/z82N6d1ysO pic.twitter.com/CXxNTDAyHM Meanwhile, French police ordered the cancellation of two football matches scheduled for Saturday, while French interior minister Christophe Castaner told lawmakers on Tuesday that additional security personnel would reinforce the 65,000 police and gendarmes during this Saturday's planned protests. Some police unions have floated the idea of drafting the army as backup, according to Paris-based journalist Catherine Field.
‘Gilet jaunes’ movement spreads to France’s truckers, farmers and students -- France's social climate hung in the balance as three weeks of demonstrations by the "gilets jaunes" (yellow vests) movement rumbled on.Prime Minister Édouard Philippe on Tuesday announced some concessions that included a six-month suspension of controversial increases to fuel taxes.While this was the first major u-turn for Emmanuelle Macron's administration, many said they did not go far enough. The government also had the added pressure that the gilets jaunes movement was gradually spreading to other sectors.There have been warning signs that truckers from the Confédération générale du travail (CGT) and Force Ouvrière (FO), both major unions in France, were set to back the "yellow" cause, even though in some cases unions have not aligned their action with the movement.A call for strike action was made to defend drivers' buying power and blockades could start on Sunday evening from 22h CET and last for an indefinite period. France's transport ministry has made its stance clear saying this movement has "no reason to exist".The transport branch of the FO expressed its support for the "yellow vests" from November 20. If it goes through with a strike, the union will ask nearly 700,000 employees to down tools, and not just truck drivers but also ambulance drivers, cash transporters and removal workers.
Italy Backs Down- Yields Slide As Populists Cave On Deficit Target - It's only Dec. 3, but international investors already have a lot to be grateful for this holiday season. In what was perhaps the most important development for global markets this weekend, President Trump and his Chinese counterpart, Xi Jinping, helped soothe investors' trade war fears by agreeing over the weekend to a truce - essentially a three-month detente in the US-China trade war that will put the next round of tariffs on hold while the two countries try to forge an agreement on some of the US's more contentious demands (like putting an end to IP theft by Chinese companies). The deal inspired shouts of jubilation from Wall Street. But while sell side analysts were busy cranking out bullish sell-side notes with corny titles - as was to be expected, regardless of which way the Trump-Xi dinner broke... ... Italy has taken some serious strides toward calming fears about the "beginning of the end" of Europe by reportedly agreeing to work with the EU to lower its budget deficit target. According to Bloomberg, Italian with a duration longer than 5 years climbed, sending yields to a two-month low, after the coalition government said it is ready to accept new budget deficit targets, according to Messaggero. Meanwhile, German bunds have pared losses which followed a trade truce between Presidents Donald Trump and Xi Jinping.
Denmark to send ‘unwanted’ migrants to small island off its coast -Denmark is planning to send rejected asylum seekers to a remote island off the Danish coast if the migrants are unable to return to their native countries. “They are unwanted in Denmark, and they will feel that,” Denmark's immigration minister, Inger Støjberg, wrote in a statement on Facebook. The New York Times reported that the center-right government and the right-wing Danish People’s Party reached an agreement last week to place as many as 100 people on Lindholm Island, about two miles from shore. The group will also include foreigners convicted of crimes. The deal comes as the Danish People’s Party advocates for more restrictions on immigrants and refugees.Individuals staying on the island will be required to report to an island center each day. They reportedly risk imprisonment if they do not abide by the rule.“We’re going to minimize the number of ferry departures as much as at all possible,” Martin Henriksen, a spokesman for the Danish People’s Party on immigration, told TV 2. “We’re going to make it as cumbersome and expensive as possible.”The program will reportedly lead to about $115 million being allocated over four years for facilities on the island. The facilities are expected to open in 2021, according to the Times.Kristian Jensen, the finance minister who guided the negotiations, maintained that the island was not a prison. Morten Østergaard, leader of the country's Social Liberal Party, criticized the deal, saying it creates "costs for everyone," EuroNews reported.
German prosecutor’s office raids Deutsche Bank - On Friday, the Frankfurt public prosecutor’s office conducted a second raid on Germany’s biggest bank, Deutsche Bank. The spokesperson for the investigating authority, Nadja Niesen, said that due to the extent of material, an additional search of the bank’s offices was necessary. One day earlier, on Thursday, some 170 officials from the public prosecutor’s office, the federal police and the tax investigation branch had searched the headquarters of Deutsche Bank in Frankfurt-Main, four other branches of the bank in the city and in nearby Eschborn, and the private apartment of one of two accused bank officials. The raids were related to “suspicions of money laundering,” Niesen said in a press statement. She added that at the moment, “investigations were directed against two employees of the bank, 50 and 46 years old,” and “against other, as yet unidentified, responsible individuals at the bank.”It is clear that the raids were aimed at leading figures at the bank. The prosecutor’s office confirmed that raids had also taken place at the executive level.The business newspaper Handelsblatt cited “two persons familiar with the facts,” who reported that, amongst others, the office of the official responsible for regulation and compliance, Sylvie Matherat, had been searched. According to the financial news on Germany’s public ARD TV channel, the office of Deutsche Bank CEO Christian Sewing had also been searched. Sewing took over leadership of the bank in April of this year promising a “new beginning.”It is now apparent that the bank’s previous criminal machinations continued under Sewing’s leadership. The investigations extend to the present. Niesen said that they “relate at least to a period from 2013 to 2018 and have been in motion since August 2018.” The federal crimes office had “evaluated data from the so-called Panama Papers and so-called offshore leaks,” she added. And it was “suspected that Deutsche Bank helped customers to establish so-called offshore companies in tax havens.” From there “funds are alleged to have flowed to Deutsche Bank, without the bank laying charges of suspected money laundering.”
Merkel protege Kramp-Karrenbauer succeeds her as German CDU leader (Reuters) - Germany’s Christian Democrats elected Annegret Kramp-Karrenbauer on Friday to replace Angela Merkel as party leader, a decision that moves her into pole position to succeed Europe’s most influential leader as chancellor. Kramp-Karrenbauer, 56, is Merkel’s protege and was the continuity candidate favored by the party elite. She won the leadership with 517 votes out of 999 votes cast by delegates. Her rival, Friedrich Merz, won 482 votes in a run-off. A former state premier in Saarland, where she led a three-way coalition, Kramp-Karrenbauer has a reputation for uniting support across the conservative Christian Democratic Union (CDU) and a talent for striking alliances with other parties. Sometimes dubbed “mini Merkel”, Kramp-Karrenbauer is admired by the CDU upper echelons for her appeal across the party. “I have read a lot about what I am and who I am: ‘mini’, a copy, simply ‘more of the same’. Dear delegates, I stand before you as I am and as life made me and I am proud of that,” Kramp-Karrenbauer said in a passionate speech to the congress. Playing up her experience in regional government, she added to cheers and loud applause: “I learned what it is to lead - and above all learnt that leadership is more about being strong on the inside than being loud on the outside.”
UK and EU must ‘wake up’ to risk of grounded flights after Brexit, airline body warns A body representing 50 airlines has written to the European Commission warning that it must take urgent action to prevent the grounding of flights after the U.K. leaves the European Union. "We get the sense from the politicians and officials that on the morning of March 30, the aviation industry will wake up and go to work as usual, even if there is a hard Brexit," Andrew Kelly, president of the European Regions Airlines Association (ERA), said in a press release on Tuesday. "It won't, it can't, and the U.K. and EU need to wake up to that fact now, before it's too late." The U.K. is due to depart the EU on March 29. The letter to officials in Brussels claimed that a "no-deal" Brexit could have "disastrous consequences," impacting routes, aviation safety and border security. The ERA has estimated that 1.8 million routes across Europe will be affected in the event of a no-deal Brexit. The ERA has asked EU lawmakers to immediately agree a reciprocal agreement that keeps traffic rights in place for carriers operating between European Union member states and the U.K. Downing Street has said it wants to explore the possibility that British-owned airlines could remain a member of the European Aviation Safety Agency (EASA). But the ERA has said that that even if such a deal were struck, there remains confusion about EU ownership rules that could prevent airlines from operating. Under present rules, the European Union limits non-EU ownership of airlines of its member states to 49 percent. After March 29, British shareholders will no longer count towards the EU ownership of IAG, the parent company of British Airways and Spain's Iberia, potentially breaking those rules.
Bank of England warns “no-deal” Brexit would be worse than 2008 crash -- The Bank of England (BoE) has published an analysis warning that the UK could face economic collapse and chaos as the result of a “no-deal” Brexit. According to the BoE’s “worst case scenarios,” gross domestic product could fall as much as 10.5 percent over a five-year period, the official rate of unemployment could nearly double to 7.5 percent, inflation could rise to 6.5 percent, house prices could fall by 30 percent, commercial property prices could collapse by up to 48 percent, and the pound could fall to parity with the US dollar. Such levels of economic dislocation and collapse have no precedent since World War II and far outstrip the impact of the 2008 economic crash. The worst-case scenarios are based on a “no-deal” Brexit with no transition period, meaning the UK would leave the EU on March 29, 2019 and be forced to revert to World Trade Organization rules for trading with Europe and the rest of the world. The worst case presumes that there would be custom checks on the UK’s border for goods, with the UK unable to reach new trade deals with the EU or other countries until 2023. While the bank said these scenarios were “not necessarily what is most likely to happen,” its analysis comes less than four months before the UK’s scheduled EU exit, under conditions where the proposed deal between Prime Minister Theresa May and the EU has not yet been agreed by the British parliament. Tomorrow a five-day debate on the agreement will begin, with a vote to be taken on December 11.As it stands, there is no parliamentary arithmetic under which May can get the deal through parliament in the first vote, with all opposition parties opposed, including the Conservative Party’s de facto coalition partner, the Democratic Unionist Party, as well as some 90 mainly hard-Brexit Tory MPs.Even the BoE’s scenario of a “disruptive Brexit” that nevertheless involves an “absence of border disruption and financial market disruption” envisages a major crisis, with a fall in GDP of 3 percent, a rise in unemployment to 5.75 percent, an increase of inflation to 4.25 percent, a decline in house prices of 14 percent and a collapse of commercial property prices to the tune of 27 percent. The Financial Times notes that the time scales cited by the BoE in its analysis are optimistic, and economic disorder could happen far sooner. And, while mapping out scenarios of possible economic Armageddon, the BoE is careful to add the caveat that its Financial Policy Committee “judges that the UK banking system is strong enough to continue to serve households and businesses even in the event of a disorderly Brexit.”
Key Conservative Leader Backs May's Imperfect Deal As Labour Leadership Challenge Looms - Yesterday, we reported that a handful of May's most senior cabinet ministers had nearly completed a 'secret' "Plan B" Brexit deal that is said to closely resemble the "Super Norway" framework that many Brexiteers have said they would prefer. This "alliance", which has reportedly been meeting in secret for about a month now, is reportedly working with sympathetic EU ministers to try and build a consensus for selling the deal during the chaos that would likely follow a Parliamentary defeat of May's draft plan. Meanwhile, May herself has reportedly backed away (at least, to a degree) from her insistence that her deal is the only and best possible deal. To wit, she is said to be considering holding a "meaningful vote", which would allow MPs to propose amendments that could eventually be brought to a vote - in essence allowing Parliamentary to forge a more palatable deal by consensus.Of course, both of these alternatives are still in the trial balloon stage, and May's official line hasn't changed since EU members voted to finalize the draft plan an its attendant (nonbinding) political 'statement' last week. At least 100 Tory MPs have said publicly that they would oppose May's deal. And while May narrowly escaped a leadership challenge from within the Conservative Party last month, it appears her opponents across the floor are preparing to capitalize on this broad-based discontent (not just within the conservative party, but crucially, within the DUP and SNP, two regional parties that have helped prop up May's government) by preparing to call for a vote of no confidence in the government should May's deal fail, according to Bloomberg. But amid the chaos, the glimmer of a second chance has emerged for May's doom Brexit deal. As conservative leaders grow increasingly anxious about the possibility that Labour leader Jeremy Corbyn could force a general election - presumably, he would do this by successfully winning a no confidence vote following the defeat of May's Brexit plan as UK financial markets exhibit a TARP-like reaction (see our handy Brexit guide for more) - potentially resulting in Labour winning a majority, some senior ministers who had previously opposed May's deal have apparently decided that there really is no palatable alternative. During a Sunday appearance on Andy Marr, Environment Minister Michael Gove (who just weeks ago reportedly turned down the Brexit Secretary post) has, in a remarkable reversal, thrown his support behind the deal, saying that backing the "imperfect" deal is "the right thing to do".
Leaked Commons legal analysis of Brexit deal vindicates Trump, contradicts May and adds to Brexiteers concerns - The Government is already on the rack over its refusal to publish the legal advice provided on the Brexit deal by Attorney General, Geoffrey Cox, despite a parliamentary motion ordering it to be done. Cox will make a statement on the matter in the House of Commons later today (Monday 3rd December), during which he will doubtless be questioned about the leak in the Sunday Times of a letter he wrote in which he admitted that the UK would be trapped “indefinitely” in a customs union with the EU if the backstop comes into effect. But ministers now face further questions as it emerges that a confidential analysis of the Withdrawal Agreement by the House of Commons’ own expert legal team comes to the same conclusion as President Trump – that Theresa May’s Brexit deal would prevent the UK from entering trade deals with countries such as the US. The bombshell is contained in a 27-page legal note prepared by the House of Commons EU Legislation Team, which is headed by Arnold Ridout, its Counsel for European Legislation. A highly respected specialist in EU Law, he has previously worked for the EC Commission’s Legal Service and advised the European Secretariat of the Cabinet Office and prior to taking up his current role in 2014, he was Deputy Legal Adviser to the House of Lords EU Select Committee. The note – marked ‘not for general distribution’ and obtained by BrexitCentral – is dated 26th November and states that the UK-EU customs union which would come into effect if the backstop is triggered “would be a practical barrier to the UK entering separate trade agreements on goods with third countries”. This is in direct contradiction to the Prime Minister who has insisted that her deal will allow the UK to have an entirely independent trade policy. Indeed, she told the House of Commons just last Monday how “for the first time in 40 years, the UK will be able to strike new trade deals and open up new markets for our goods and services”. The legal note – titled The Withdrawal Agreement: Legal and Governance Aspects – also appears to suggest that the Prime Minister’s claim (also repeated last Monday) that her deal “takes back control of our laws” by ending “the jurisdiction of the European Court of Justice in the UK” with “our laws being made in our Parliament, enforced by our courts” does not entirely stand up to scrutiny.
Brexit: Coming to a Head? – Yves Smith - I’ll attempt to be brief, since events are very much in play, and there is still a great deal of noise relative to signal. The overarching issue is that while some exciting skirmishes are underway, what matters is the configuration of forces on the battlefield. We’ll discuss the two big events of the day (so far) and then will turn to the overall state of play. As UK-based readers probably know all too well, the Speaker of the Commons approved a cross-party effort to launch contempt proceedings against the Government for its failure to release the full text of the legal advice it received on Brexit, per a motion unanimously approved in Parliament on November 13.The DUP joined the petition to the Speaker of the Commons, so if all the parties supporting the proceedings have a full turnout and reject the Government’s effort to amend the motion (to refer it to the Committee of Privileges), the censure will pass. If the Government persists in not releasing the legal advice in full, Labour intends to seek sanctions of the ministers involved, the Attorney General Geoffrey Cox (who did quite the imitation of King Lear in his presentation in Commons yesterday) and/or Cabinet Office minster David Liddington, which would most likely be suspension from Parliament. Our Richard Smith points out another option would be to lock them up in Big Ben (more formally, “commit to the clock tower of Westminster”).If May were someone other than Theresa May, she would hand over a redacted version of the advice. More bad press for May and her government when she is just about certain to face a vote of no confidence next week is not a very bright move. She could try pleading that the redacted parts are ones that it is in the public interest to keep confidential from the EU. Having this vote today also delays the start of the debate on the Withdrawal Act. The key part of the press release from the CJEU, as the EU calls it (emphasis theirs):In answer to the question from the Scottish court, the Advocate General proposes that the Court of Justice should, in its future judgment, declare that Article 50 TEU allows the unilateral revocation of the notification of the intention to withdraw from the EU, until such time as the withdrawal agreement is formally concluded, provided that the revocation has been decided upon in accordance with the Member State’s constitutional requirements, is formally notified to the European Council and does not involve an abusive practice….However, that possibility of unilateral revocation is subject to certain conditions and limits. First, like the notification of the intention to withdraw, the unilateral revocation must be notified by a formal act to the European Council. Secondly, it must respect national constitutional requirements. If, as is the case in the UK, prior parliamentary authorisation is required for the notification of the intention to withdraw, it is logical that the revocation of that notification also requires parliamentary approval. There is also a temporal limit on the possibility of revocation, since revocation is possible only within the two-year period that begins when the intention to withdraw is notified. The principles of good faith and sincere cooperation must also be observed, in order to prevent abuse of the procedure laid down in Article 50 TEU.
May Defeated in Parliament on Eve of Key Vote: Brexit Update - May’s government has been found in contempt of Parliament, a moment without precedent in recent history, over its refusal to release the Attorney General’s legal advice on Brexit.Even with almost all of the Conservative Party voting with her, May still lost 311 to 293, after her sometime allies in the Democratic Unionist Party said they would vote against. It’s a terrible start to May’s apparently doomed campaign to get her Brexit deal through Parliament and a reminder of the difficulties of minority government. The government has lost its attempt to water down the opposition contempt motion. It was a tight vote, with the government amendment rejected 311 to 307 -- a reminder that without a majority, May can’t win even if, as she did on this, she manages to unite most Conservatives behind her. Parliament will now vote on the unamended motion, which demands the government release the legal advice and finds ministers in contempt. These are constitutionally uncharted waters.
Brexit: May facing constitutional crisis as Bercow says ‘arguable case’ government guilty of contempt of Parliament over legal advice Theresa May is facing a full-blown constitutional crisis after House of Commons Speaker John Bercow ruled that there is "an arguable case" her government acted in contempt of Parliament. The Speaker made the extraordinary statement in response to a letter from the other main political parties accusing the government of ignoring the will of Parliament in relation to the legal advice the Cabinet has received on Brexit. In a highly unusual sequence of events, Labour, the SNP, the Liberal Democrats, Plaid Cymru and the Green Party joined forces to ask Mr Bercow to launch contempt proceedings after ministers refused to publish the full legal advice they had been given on Ms May's proposed exit deal. In response, the Speaker granted an urgent debate on the issue, to take place on Tuesday. If passed, the motion could result in a senior government minister being suspended from the Commons. Crucially, the DUP – whose votes Ms May relies on to maintain her governing majority – also backed the cross-party letter, making it likely that the motion alleging contempt will be passed unless the government backs down. The dramatic move comes after ministers refused to obey a binding Commons vote saying they should publish all of the legal advice they have received on Britain's withdrawal from the EU.
Senior minister could be suspended over Brexit legal advice - A senior minister is at risk of being suspended from the House of Commons after Labour and the Democratic Unionist party were allowed to submit an emergency motion accusing the government of holding parliament in contempt for failing to publish the full Brexit legal advice. John Bercow, the Speaker, allowed Labour, the DUP and four other opposition parties to lay down a motion that will be voted on on Tuesday, immediately before before the start of the five-day debate on the Brexit deal. Conservative MPs were put on a three-line whip on Tuesday morning – to prepare to defend the government against a contempt vote. Ahead of the vote, the transport secretary, Chris Grayling, a former lord chancellor, was defiant. “It is a central part of the principles of our legal system that the advice provided from a lawyer to their client is treated as confidential. It’s privileged information,” he told BBC Radio 4’s Today programme. “Do we really want to undermine one of the most sacrosanct parts of the way our legal system works? In this particular case for the government, I think that would be the wrong thing to do.” The contempt motion, submitted late on Monday, calls on MPs to find “ministers in contempt for their failure to comply” and is signed by the shadow Brexit secretary, Sir Keir Starmer; the DUP’s Westminster leader, Nigel Dodds; and the Scottish National party, Liberal Democrats, Plaid Cymru and the Green party. No penalty is spelled out in the motion, which is intended to act as a final warning, but Labour said that if it was passed on Tuesday and still not complied with then the party would seek further sanctions.
Conservatives Accuse May Of Brexit 'Cover Up' Over Refusal To Release "Full" Legal Advice - Once again, UK Prime Minister Theresa May has managed to unite pro-European Labour MPs and Brexiteer conservatives in opposition to her government by refusing to release the full 'legal advice' provided by UK Attorney General Geoffrey Cox, stoking suspicions that she is trying to hide the fact that the Brexit deal, as it's currently written, could result in the UK being stuck inside the EU customs union in perpetuity - a scenario that Brexiteers have warned would reduce the UK to a 'vassal state' of Europe. Angry ministers have threatened everything from calling a vote of no confidence in the government to holding Cox in contempt if No. 10 Downing Street doesn't authorize the release of the unabridged legal advice. But in an act of defiance, May on Monday released a 43-page summary of the AG's advice that one reporter said appeared to leave out most of the AG's most controversial findings. As we noted earlier, a leaked analysis shows that May lied to lawmakers when she said there was no risk of the UK being trapped inside the customs union. As the Guardian explains, while the text of the withdrawal agreement clearly states that any end to the 'backstop' must happen by consensus (which, assuming the backstop is eventually triggered, would happen once a new trade deal has been reached) between the UK and the EU. So Brexiteers' warnings have a clear basis in the text of the agreement. However, many MPs are suspicions that AG Cox was more negative about this in private than he has been in public. Some Labour MPs have warned that, by refusing, May has risked sparking a constitutional crisis. This is because MPs voted last month to force the government to release the legal advice "in full". But May has effectively ignored these demands and continued to withhold Cox's unabridged advice. The controversy has prompted at least one conservative MP, Sam Gyimah, to quit his cabinet post in protest, saying that releasing the unabridged advice is vital to "restoring trust in politics," according to the BBC.
Mervyn King: Theresa May’s Brexit deal is like appeasement - Mervyn King, the former governor of the Bank of England, has launched a stinging attack on Theresa May’s Brexit deal, likening it to the appeasement of the Nazis in the 1930s.In a sweeping attack on No 10, the Treasury and his successor, Mark Carney, the Brexit-supporting King said the political elite was allowing the UK to become a vassal state that would be forced to accept Brussels diktats. He described the deal negotiated by the government as “incompetence of a high order”.King’s comments came as Carney told the Treasury select committee on Tuesday that the price of food could go up by 10% if the UK left the EU with no deal and with no plans to avoid chaos at the country’s ports. He said Britain’s ports were not ready for a shift to World Trade Organization rules for the country’s exports and imports with the EU.King, however, slammed May’s deal as “a muddled commitment to perpetual subordination from which the UK cannot withdraw without the agreement of the EU”.He added: “It simply beggars belief that a government could be hellbent on a deal that hands over £39bn while giving the EU both the right to impose laws on the UK indefinitely and a veto on ending this state of fiefdom.” The government, he said, should have prepared for the prospect of no deal in the immediate aftermath of the 2016 referendum.“Instead, the government pretended that everything could be postponed until an imaginary long-term deal could be negotiated. This was naive at best, and in the event has proven disastrous. And so Project Fear turned into Project Impossible. It is incompetence on a monumental scale,” he said, in a comment piece for Bloomberg.
Nigel Farage Quits UKIP, Says UK Needs New 'Brexit' Party Nigel Farage, the man widely credited as the architect of the Brexit referendum, is leaving the UK Independence Party - a party that he used to lead - because of concerns that its members are becoming too closely associated with Islamophobia, and participating in street gangs. Farage - who announced his decision on his radio show and in a letter published by the Daily Telegraph - explained his decision by accusing the party of drifting too far to the right. Its members are now too focused on marching in support of far-right groups like the English Defence League and its founder, Tommy Robinson - whom Farage singled out for criticism in his letter - and not focused enough on winning elections."And so, with a heavy heart, and after all my years of devotion to the party, I am leaving Ukip today. There is a huge space for a Brexit party in British politics, but it won’t be filled by Ukip." Farage presently serves as a minister in the European Parliament. Speculation that Farage might join forces with Boris Johnson to start a new pro-Brexit party is already beginning to spread.
Theresa May suffers three Brexit defeats in Commons Theresa May has suffered three Brexit defeats in the Commons as she set out to sell her EU deal to sceptical MPs. Ministers have agreed to publish the government's full legal advice on the deal after MPs found them in contempt of Parliament for issuing a summary. And MPs backed calls for the Commons to have a direct say in what happens if the PM's deal is rejected next Tuesday. Mrs May said MPs had a duty to deliver on the 2016 Brexit vote and the deal on offer was an "honourable compromise". She was addressing the Commons at the start of a five-day debate on her proposed agreement on the terms of the UK's withdrawal and future relations with the EU. The agreement has been endorsed by EU leaders but must also be backed by the UK Parliament if it is to come into force. MPs will decide whether to reject or accept it on Tuesday 11 December. Mrs May said Brexit divisions had become "corrosive" to UK politics and the public believed the issue had "gone on long enough" and must be resolved.
The government’s defeat on contempt was humiliating – but avoidable - Now it’s the lawyers’ turn.The Commons has ordered the attorney general’s advice to be published in full, against the prime minister’s wishes, and this will be done immediately. At the same time, the European court of justice looks likely to declare that article 50 can be revoked by the UK within the next two years: expert opinion to this effect was submitted to the EJC this week by one of its advocates general, whose findings normally weigh strongly with the court (a ruling is expected soon). Neither is seismic. Both further muddy the waters. But both are a sort of progress. The prime minister is foolish. The argument for not publishing the details of what staying in the custom union involves was trivial. Of course “advice is secret”, but it is no time for secrecy when the Brexit debate has been enveloped in mendacity for two years. The attorney general’s bombastic claim on Monday, that concealment was “in the national interest”, was unconvincing. There is clearly a major legal difficulty about the conduct of the transition period, and the famous backstop as it applies to Ireland. It has never made sense – and no leaver has succeeded in pretending the UK can leave the EU’s customs union without an agreement on the Irish border. As long as Northern Ireland is in the UK it is a cross we have to carry. No agreement, no leave. It is as plain as English. They live in cloud cuckoo land. Now Brexiters and remainers, hard and soft, can discuss legal realities rather than hysterical rumour. The advice, which is known to be unhelpful to May’s cause, does not seriously damage her already battered cause. It merely restates what we know: that the only available deal remains the only available deal, and it was never going to be wholly palatable. That the government was found to be in contempt by 311 votes to 293 is more serious. It indicates major weakness in the loyalty department. It also indicates the poverty of advice available to Downing Street. The vote was surely predictable, and – since the loss is embarrassing – avoidable. Why not concede it in advance? Every Churchill needs his Alanbrooke. May is worryingly short of one.
Brexit: May Bloodied but Not Yet Bowed -- Yves Smith - The UK morning papers are awash with reports of May’s defeats. For one stop shopping, see ‘Humiliation on a historic scale’: what the papers say about first day of Brexit debate Guardian. Recall that this was the same story line after Salzburg and May is still standing. However, consider:The vote against the Government on the contempt proceedings showed that the Government still commands a lot of loyalty. The tally was 311 to 293. Stand4Brexit had 51 signers the last I checked. Although I didn’t review a roll call, the total suggests that defections by ERG types were minimal, despite the fact their organ, BrexitCentral, has been working overtime to foment opposition to May’s deal. Update: confirmation from today’s BrexitCentral newsletter: ‘The motion was passed by 311 votes to 293 as [Tory MPs] Bone and Hollobone again voted with the Opposition and a clutch of Conservative eurosceptics abstained, creating that majority of 18.” In other words, the expected vote against the Withdrawal Act bill next week may not be by as large a margin as the press and punditocracy anticipates.The motion by Dominic Grieve that is being widely reported as giving Parliament a say on what May does next in the event of her deal being voted down has no legal force. Some of the more florid misrepresentations say is that the Grieve motion enables Parliament to prevent a no-deal Brexit. Help me.While this gambit does show that Parliament is trying to flex its muscles, the legislature is still a long way from being able to do much. From Clive: No. Parliament won’t “take control of Brexit”. The amendment passed gives Parliament the ability to proffer non legally binding “guidance”. The U.K. government is, apparently, according to the commentary by an “expert” I listened to earlier, expected to follow this because of “it being the express wish indicated by Parliament”. International reporting is much more accurate, albeit still needing careful parsing by the reader. From https://uk.reuters.com/article/uk-britain-eu-vote-factbox/factbox-britains-big-brexit-vote-what-happens-in-parliament-idUKKBN1O31UYWhile any successful amendments would not bind the government to comply with them, they would be politically hard to ignore, and could dictate May’s next steps. As Lambert would say, “could” is doing an awful lot of work in that sentence. Given that Parliament will be hopelessly split about what gets a majority vote — or else some cross-party cakeist stitch-up is arranged that ends up wanting some pony or other (like EEA/EFTA membership) — this has all the rigidity of a ripe mango. Put it another way, it’s pretty bad when you folks like Stand4Brexit are more accurate than the BBC:Despite what the screaming headlines would have you believe, the Grieve amendment IS NOT legally binding. No.10 are spinning that it's a disaster for Brexit in order to push that it’s May’s deal or a 2nd ref!
Brexit- Theresa May urged to call off vote - Downing Street insisted today that next week’s Brexit vote is going ahead after the chairman of the 1922 Committee pleaded with Theresa May for a delay. Sir Graham Brady, who represents Conservative backbenchers, publicly called for the prime minister to push back Tuesday’s vote, which most expect will result in a heavy loss. Mrs May earlier confirmed that she was negotiating with Tory opponents over potential concessions over the backstop, Britain’s legal guarantee to the EU that it will avoid a hard Irish border. She called a group of supportive senior ministers to a meeting in No 10 at 1.30pm, including David Lidington, David Gauke, Amber Rudd, Karen Bradley, Philip Hammond, Michael Gove, Julian Smith, Liam Fox and Stephen Barclay. Andrea Leadsom, the leader of the Commons and a Brexiteer, was also invited. Although once considered hostile Mrs Leadsom has backed the deal, unlike Penny Mordaunt, the international development secretary, who was a notable absentee from the meeting. Mrs May’s official spokeswoman said that Brexit was discussed but did not provide further details. Speaking to the BBC, Sir Graham said that the vote should be delayed if there was a need for more “clarity” next week. “It’s having the answer to that question of substance is most important, not the timing,” he said. Cabinet ministers are also privately urging the prime minister to delay the Brexit vote, fearing that she faces a defeat so catastrophic it could bring down the government. Gavin Williamson, the defence secretary, is understood to be trying to persuade her to postpone the vote, which it is thought she could lose by 100 MPs or more. Others, including Ms Rudd, the work and pensions secretary, Sajid Javid, the home secretary, and Alun Cairns, the Welsh secretary, say that she should continue to sell the Brexit deal but call off the vote on Monday if she still faces defeat by more than 70 votes.
Brexit: More Unicorns --Yves Smith - The ongoing struggle over Brexit is an obvious watershed period for the UK, not just in terms of what finally happens, but the tug of war between the Government and Parliament. As we warned yesterday, the press is regularly way out over its skis over what events mean. For instance, yesterday and today, there is widespread misreporting that the Dominic Grieve motion calling for more input from Parliament in the event that May’s bill is defeated amounts to a veto over a no deal. It does no such thing. Even Grieve himself has said so. As expected, the publication of the Government’s legal advice increased opposition to her deal. The part that had MPs up in arms was that the analysis made clear that the UK could be stuck in the backstop indefinitely. Even though, as Richard North pointed out, this should have come as no surprise to anyone who read the text of the agreement, May had asserted it would only be temporary. The SNP’s Ian Blackford went so far as risking suspension for repeatedly saying that May lied. A second sore point, although it didn’t get as much press attention, was that the legal advice also confirmed that the Withdrawal Agreement crossed a DUP/Ultra red line via the backstop creating the loathed “sea border”. From this morning’s BrexitCentral on the legal advice (emphasis theirs): And having now seen it, it’s hardly surprising the Government sought to suppress its publication. It’s arguably Paragraph 8 which contained the real bombshell regarding the relationship between Northern Ireland (NI) and Great Britain (GB): “The implication of NI remaining in the EU Single Market for goods, while GB is not, is that for regulatory purposes GB is essentially treated as a third country by NI for goods passing from GB into NI. This means regulatory checks would have to take place between NI and GB, normally at airports or ports, although the EU now accepts that many of these could be conducted away from the border.” That’s right: Great Britain would be regarded by Northern Ireland as a “third country” – the status of any other foreign country – and regulatory checks “would have to take place between NI and GB”. May appears freaked out about next week’s vote. The Times says that May’s troops are urging her to delay the Brexit vote: Note that ConservativeHome’s whip count has the vote against May at 68. And that does not include the DUP. However, if there is no credible new Tory prime minister waiting in the wings, it seems entirely plausible for quite a few MPs to vote down the bill while still backing May when the opposition puts a motion of no confidence. Per the Financial Times, as we anticipated, that is what the DUP says it will do if the bill is voted down. However, even if May formally survived this test, she would clearly be walking wounded.
Brexit: Corbyn’s Cakeism; Norway Rejects “Norway” --Yves Smith - The newspapers are consumed with whether Theresa May will be forced to put off the vote on her Brexit deal due to the likely margin of rejection being so high as to make her continuation as Prime Minister untenable. I doubt the mechanism for an exit next week (if her bill is rejected roundly as anticipated) would be a vote of no confidence; the DUP said it would support May if her bill failed and the Tories are highly unlikely to run the risk of a general election, although the “no confidence” timetable allows 14 calendar days to find a new PM. Even the fabulously stubborn May might accept her ministers telling her she had to resign if she lost by a 100 vote margin. So the odds now seem to favor May putting off the vote, and running to the EU Council meeting of December 13-14. If so, this means her fallback it to try to run out the clock so as to make the no deal risk even more imminent, and perhaps also to get the EU Council to say out loud what if any the terms for an extension might be. If they are as restrictive as the tweetstorm from a BBC reporter we featured indicated, making that official would focus a few minds. We’d really like to be Corbyn enthusiasts, given how mendacious and incompetent the Tories are. But on Brexit, Corbyn alarmingly appears to be giving them a run for incompetence. The Guardian ran an op-ed by Corbyn which is truly disconcerting, particularly when taken in combination with Kier Starmers’ deluded or disingenuous “We’ll prevent a crash-out” scheme. We’ll turn the mike over to Clive on what vlade had already depicted as Corbyn spots a herd of unicorns and promises a pony to everyone:This really does warrant quoting in full because otherwise the true ridiculousness of it all might escape the casual reader. Not least because you have to wade your way through 7 paragraphs — and they are long, long paragraphs — which say nothing more than an adult version of “May is stinky and her Deal is stinkyer” before you get to the nub of it:“A new, comprehensive customs union with the EU, with a British say in future trade deals, would strengthen our manufacturing sector and give us a solid base for industrial renewal under the next Labour government, especially for our held-back communities. It would remove the threat of different parts of the UK being subject to separate regulations. And it would deal with the large majority of problems the backstop is designed to solve. Second, a new and strong relationship with the single market that gives us frictionless trade, and the freedom to rebuild our economy and expand our public services – while setting migration policies to meet the needs of the economy” Trust me, this is not the full extent of the lunacy. You need to read the piece in full.
Theresa May told to quit by Cabinet ministers if her Brexit deal falls and she fails to get better terms from EU - Theresa May has been warned by Cabinet ministers she will have to quit if her Brexit deal is defeated in the Commons next week and she fails to secure better terms from the EU, the Telegraph can disclose.Ministers believe that there is “zero” chance of her deal, which has been publicly criticised by more than 100 Tory MPs, passing in a crunch Commons vote on Tuesday.One Cabinet minister told the Telegraph “she [Mrs May] will fall” if she is defeated and then fails to go back to Brussels to fundamentally renegotiate the EU withdrawal agreement.It came as Iain Duncan Smith, a Eurosceptic Tory MP and former Conservative leader, warned for the first time that Mrs May could have to go if she and her Cabinet decide to “brazen it out” in the wake of the vote. He told the Telegraph: “How the PM responds after the vote matters more than anything else she has done. I believe that if the response is we’ve lost but we will do this all over again it will become a leadership issue.“I don’t want it to be. If she and the Cabinet decide to brazen it out and simply say anything under 200 [a defeat of 200] is not as big as you think then that would be a disaster.”Downing Street is now braced for further resignations. The Telegraph understands that three middle-ranking Eurosceptic ministers are considering quitting because they cannot back the Prime Minister’s Brexit deal.The Prime Minister was on Thursday confronted by Cabinet ministers who demanded that she give details on her “plan B” for Brexit. She declined, with Downing Street on Friday rejecting Cabinet calls for the vote to be delayed.Tory Eurosceptics will on Saturday increase pressure on the Prime Minister, with Boris Johnson, David Davis, Priti Patel addressing grassroots Conservatives. Mrs Patel will say: “This deal doesn’t deliver for the country, it doesn’t deliver for Leave voters and it certainly doesn’t deliver for Conservative Party members.”
British MP suggests threatening Ireland with food shortages over Brexit, Twitter outrage follows - A Conservative Party MP has suggested using the prospect of food shortages to force Ireland to capitulate on the Brexit ‘backstop’ deal for Northern Ireland — and Twitter has let loose with some lessons from history. In a British government report, leaked to the Times of London, MP Priti Patel suggested that potential food shortages in the event of a ‘no deal’ Brexit should have been used as leverage to force Ireland to give up the ‘backstop’ — an agreed guarantee that there will be no hard border imposed between Ireland and Northern Ireland. If the food issue had been pressed, Patel says, Britain could have gone back to Brussels to “get a better deal.”A leading Tory Brexiteer says UK should threaten Ireland with food shortages to get it to capitulate on the Backstop. Someone will be needing the history books out over in Whitehall.https://t.co/lEsxjcsEx2pic.twitter.com/aQMsvLImqJ — Richard Chambers (@newschambers) December 7, 2018 Given the history between the two islands, which involved a famine that killed a million people and which many Irish regard as genocide by Britain, it didn’t go down well when Patel suggested using food as a weapon in Brexit negotiations. Unsurprisingly, Patel was swiftly bashed on Twitter for “profound ignorance” of history. In Ireland we don't refer to it as the "potato famine". The Famine was a result not only of potato blight but also because an imperialist landlord class & govt. chose to let people die. Fast forward to 2018 & we've Priti Patel suggesting food blockades against Ireland. Classy. ♀️ — Fiona Kenny (@FionaKenny1) December 7, 2018
No-deal Brexit: Disruption at Dover ‘could last six months’ BBC - Dover and other Channel ports face disruption for up to six months if the UK leaves the EU without a deal, ministers have said.The "worst case scenario" warning comes after analysis of likely traffic flows, if customs checks are delayed. Lorries carrying medicine could get priority at ports and planes used to fly in drugs, ministers said.But Tory Brexiteer Andrew Bridgen said it was "Project Fear on steroids," ahead of Tuesday's big Brexit vote.He told the BBC: "It's the last throw of the dice from the prime minister who is desperate to get MPs to vote for her withdrawal agreement."The prime minister's claim that the alternative to the withdrawal agreement she has negotiated with the EU is a no-deal Brexit, has so far failed to convince many of her own MPs. Health Secretary Matt Hancock was among ministers trying to promote the deal on Friday, ahead of Tuesday's Commons vote, which the PM is widely expected to lose. He told the BBC: "I don't know how likely 'no deal' is. It is what happens automatically unless Parliament passes something else. "I very strongly feel that the best thing for the country, not just for the health service but for the country as a whole, is for Theresa May's deal to pass."
How US billionaires are fuelling the hard-right cause in Britain -- Dark money is among the greatest current threats to democracy. It means money spent below the public radar, that seeks to change political outcomes. It enables very rich people and corporations to influence politics without showing their hands.Among the world’s biggest political spenders are Charles and David Koch, co-owners of Koch Industries, a vast private conglomerate of oil pipelines and refineries, chemicals, timber and paper companies, commodity trading firms and cattle ranches. If their two fortunes were rolled into one, Charles David Koch, with $120bn, would be the richest man on Earth. In a rare public statement, in an essay published in 1978, Charles Koch explained his objective. “Our movement must destroy the prevalent statist paradigm.” As Jane Mayer records in her book Dark Money, the Kochs’ ideology – lower taxes and looser regulations – and their business interests “dovetailed so seamlessly it was difficult to distinguish one from the other”. Over the years, she notes, “the company developed a stunning record of corporate malfeasance”. Koch Industries paid massive fines for oil spills, illegal benzene emissions and ammonia pollution. In 1999, a jury found that Koch Industries had knowingly used a corroded pipeline to carry butane, which caused an explosion in which two people died. Company Town, a film released last year, tells the story of local people’s long fight against pollution from a huge paper mill owned by the Koch brothers. The Kochs’ chief political lieutenant, Richard Fink, developed what he called a three-stage model of social change. Universities would produce “the intellectual raw materials”. Thinktanks would transform them into “a more practical or usable form”. Then “citizen activist” groups would “press for the implementation of policy change”. To these ends the Kochs set up bodies in all three categories themselves, such as the Mercatus Center at George Mason University, the Cato Institute and the “citizens’ group” Americans for Prosperity. But for the most part they funded existing organisations that met their criteria. They have poured hundreds of millions of dollars into a network of academic departments, thinktanks, journals and movements. And they appear to have been remarkably successful.
Britain's Excess Winter Deaths Soar To Highest In Over 40 Years - Winter is always a period of increased work for health services, with statistics every year proving this in the most blunt of fashions. Excess winter death figures represent the difference in the number of people dying during the winter months compared the rest of the year and, as Statista's Martin Armstrong points out, are a good indicator of just how hard the cold season has been. You will find more infographics at Statista The winter of 2017/18 was especially hard and, combined with a strong flu and problems associated with vaccines, it was the worst winter for excess deaths in over 40 years. (graph)
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