FOMC Statement: No Change to Policy - Powell press conference video here. FOMC Statement: Information received since the Federal Open Market Committee met in December indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier last year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Although market-based measures of inflation compensation have moved lower in recent months, survey-based measures of longer-term inflation expectations are little changed. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes. In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.
Fed's patience should be a warning to investors: Kemp- (Reuters) - The Federal Reserve's promise to be "patient" as it determines how to adjust interest rates in future has been welcomed by investors fearful that an economic slowdown could preface a slide into recession. The central bank's statement, issued following the conclusion of a two-day meeting of the interest-rate setting Federal Open Market Committee on Jan. 30, has sparked a limited relief rally in equity markets. But the committee's decision to put rate hikes on hold, at least for now, is a bearish rather than bullish sign for the economy and confirms that the risk of recession is elevated. The committee's new-found patience is a sign of how much the economic environment has already weakened since the autumn, when it was planning to continue increasing rates in 2019. In its press statement, the committee noted that a sustained expansion of economic activity is the most likely outcome, but it dropped language from previous meetings suggesting risks to the outlook were balanced. Actions speak louder than words, and the Fed's decision to go on hold suggests it now senses greater risks to the downside than before, and it is consistent with past interest rate cycles (https://tmsnrt.rs/2TjHXFC ). Before the onset of each of the last four recessions (1981, 1990, 2001 and 2007), the effective federal funds rate had peaked and was already falling by the time the business cycle turned down. In fact, the federal funds rate peaked shortly before almost every recession since 1960 (the limited exception was the recession starting in 1980). Peaking interest rates have often been a harbinger of an imminent recession as the Fed responds to signs that the expansion is running out of momentum. In every one of those cases, even interest rate reductions were not enough to prevent the economy turning down a few months later. So while the Fed's promise to be patient will be welcome in the White House, it is an indication of how much the outlook has already deteriorated, and reinforces the reasons for investors to be cautious.
Trump Reportedly Interviewed Herman Cain For Fed Governor Seat - President Trump's relentless attacks on Fed Chairman Jerome Powell must have deterred many qualified candidates from seeking one of the open seats on the central bank's board of governors because, according to a Bloomberg report, the president just interviewed Herman Cain - yes, that Herman Cain - for one of the two empty seats. Trump is considering Herman Cain, the former pizza company CEO who ran for president in 2012, for a seat on the Federal Reserve board, five sources told me.— Jennifer Jacobs (@JenniferJJacobs) January 31, 2019 Last week, White House advisor Larry Kudlow told reporters that Trump was looking for "highly capable" people to fill the vacancies. And presumably it wouldn't hurt if candidates would be open to supporting President Trump's low interest-rate agenda, particularly, we imagine, now that Powell has completely capitulated. Kudlow also said during that press conference that Trump wouldn't renominate economist Marvin Goodfriend. “The White House wants highly capable, competent people who understand that you can have strong economic growth without higher inflation." That being said, the notion that Cain could bring "the Herminator Experience" to the Eccles building isn't totally outlandish. Because between 1992 and 1996, Cain served as a director of the Federal Reserve Bank of Kansas City, as well as deputy chairman and then chairman of the bank. Readers will remember Cain for his short-lived but heavily covered bid for the 2012 Republican nomination - a campaign that came to an early end after allegations of sexual misconduct bubbled to the surface. Now, the former Godfather's Pizza CEO is probably best remembered for his infamously creepy smile: But if Cain is to become a successful candidate, then we imagine he will need to promise the president that an interest rate of 9.99% isn't in the cards.
U.S. delays fourth-quarter GDP report after government shutdown (Reuters) - The U.S. Commerce Department’s Bureau of Economic Analysis said on Monday it was delaying the release of advance fourth-quarter gross domestic product data scheduled for Wednesday because of the just-ended five-week partial government shutdown. The record-long shutdown prevented the collection of reports ranging from retail sales to construction spending, which go into the calculation of the GDP report. Economists, investors and businesses count on data from the Commerce Department agencies, including the Census Bureau, which were shuttered during the 35-day partial closure of the government. BEA spokesman Thomas Dail said no new release dates had been set for the postponed reports and that the agency was consulting with Census and other data suppliers to determine the availability of data used to produce economic indicators. “Until we know more about when source data will be available, we cannot say anything definitive about release dates for specific economic indicators,” said Dail. “We will work through this as quickly as possible and provide information as soon as we can.” The government shutdown, which ended on Friday, has also delayed the release of December personal income report due on Thursday and trade data, which was scheduled for next Tuesday. December reports on durable goods orders, retail sales, housing starts and new home sales have also been postponed. Also delayed are November trade, construction spending, new home sales and factory orders reports. The Census Bureau said it was updating its 2019 economic indicator release calendar in coordination with other agencies and would publish the new schedule as soon as it becomes available. White House economic adviser Larry Kudlow told reporters on Monday that “we’re going to get a GDP report probably next week.” But with much of the source data not available, Robert Shapiro, a former under secretary of commerce for economic affairs in the Clinton administration, cautioned that the release of the advance fourth-quarter GDP report could take a while.
Q4 GDP Forecasts: Mid 2s --The BEA has not yet announced a new release date for the Q4 advanced GDP report. From Merrill Lynch: data cut 0.5pp from 4Q GDP tracking, bringing us down to 2.3% qoq saar. [Feb 1 estimate] From Goldman Sachs: we left our Q4 GDP tracking estimate unchanged at +2.5% (qoq ar). [Feb 1 estimate] From the NY Fed Nowcasting Report The GDP release scheduled for this week was postponed as a result of the partial shutdown of the federal government. The New York Fed Staff Nowcast stands at 2.6% for 2018:Q4 and 2.4% for 2019:Q1. [Feb 1 estimate]And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thefourth quarter of 2018 is 2.5 percent on February 1, down from 2.7 percent on January 31. [Feb 1 estimate] CR Note: These estimates suggest GDP in the mid 2s for Q4.
Chicago Fed "Index Points to a Slight Increase in Economic Growth in December" - From the Chicago Fed: Index Points to a Slight Increase in Economic Growth in December Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved up slightly to +0.27 in December from +0.21 in November. Two of the four broad categories of indicators that make up the index increased from November, and two of the four categories made positive contributions to the index in December. The index’s three-month moving average, CFNAI-MA3, edged up to +0.16 in December from +0.12 in November. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. This suggests economic activity was slightly above the historical trend in December (using the three-month average).
U.S. Debt Sales Hit Records Again, Feeding Deficit Criticism -- The U.S. Treasury Department announced plans to issue another record-breaking amount of debt, giving President Donald Trump’s re-election opponents more ammunition as they question whether his tax cuts will pay for themselves. The federal budget shortfall is set to swell, driven by tax cuts, spending increases and an aging American population. As a result, the Treasury is raising its long-term debt issuance at its quarterly refunding auctions to $84 billion, the department said Wednesday, $1 billion more than three months ago. Such elevated levels of borrowing will finance the widening deficit, with Wall Street strategists projecting new debt issuance will top $1 trillion for a second straight year. The ballooning national debt is already being drawn into the 2020 presidential election campaign. Former Starbucks Corp. CEO Howard Schultz, who is considering running as an independent, earlier this week said the debt is an example of both Republicans’ and Democrats’ “reckless failure of their constitutional responsibility.” Debt sales have already surpassed levels last seen when the country was digging out of its worst economic crisis since the Great Depression. Combined with needing to fund the shortfall, the Treasury has been selling more debt as a result of the Federal Reserve’s strategy to slowly let government debt roll off its balance sheet.
China Dumps Treasuries For 6th Straight Month, France Hits Record Exposure - As trade wars reached new levels of anger in November, China dumped $17.5 billion of US Treasuries (and was the biggest seller that month). This is the 6th monthly drop in China's Treasury holdings and they are now at their lowest level since May 2017... Norway, Ireland, and Taiwan was also among the biggest dumpers of US Treasuries in November. On the flip-side, France (+$22bn) and Japan (+18.1bn) added the most US Treasuries in November... This is the biggest monthly addition by France ever to its highest exposure ever... However, China remains the US largest debtholder and a little context to France is worth considering... In aggregate, only agency debt was net bought in November with Treasuries, stocks, and corporates all sold...
- Foreign net selling of Treasuries at $9.3b
- Foreign net selling of equities at $5.6b
- Foreign net selling of corporate debt at $3.4b
- Foreign net buying of agency debt at $19.6b
CBO Unveils Apocalyptic Long-Term Debt Picture With US Set To Borrow Over $1 Trillion For Second Year - On Monday morning, the CBO announced in its latest forecast that, as widely expected, U.S. budget deficits are set to widen further in coming years and economic gains will be muted" - a growth outlook that’s weaker than the Trump administration’s target of at least 3 percent growth. However, the surprise was that contrary to the CBO's last forecast, the budget deficit is now expected to hit $1 trillion two years later than previously projected. Specifically, the U.S. budget deficit is forecast to widen to "only" $897 billion over the 12 months through September, from $779 billion last year. This means that contrary to the CBO's last forecast in April, the U.S. budget deficit will top $1 trillion in fiscal 2022. The CBO estimated in April that the budget deficit for the entire fiscal year would increase to $804 billion, before widening to $981 billion in fiscal 2019 and topping $1 trillion in 2020.“That reduction in projected deficits results primarily from legislative changes -- most notably a decrease in emergency spending,” the CBO said, somewhat optimistically especially since the economy is forecast to slow over the next three years with the growth rate easing to 2.3% in 2019, 1.7% next year, and 1.6% in 2021, the CBO forecasted; growth was an estimated 3.1% last year.“The slowdown begins in 2019 as the positive effects of recent tax legislation on business investment are expected to wane and federal purchases under current law are projected to drop sharply starting in the fourth quarter of this year,” according to the report. There is one problem with this forecast: Wall Street disagrees vehemently, and according to analyst forecasts, the Treasury Department will see further acceleration in sales of long-term debt to finance the government’s widening budget deficit, with new issuance projected to top $1 trillion for a second-straight year. As Bloomberg notes, many strategists at primary-dealer firms predict that this Wednesday’s quarterly refunding announcement will see the Treasury maintain note and bond sales at the record high levels they have boost. According to one specific forecast, that of Steven Zeng from Deutsche Bank, the Treasury’s total net new issuance in 2018 amounted to $1.34 trillion, more than double the 2017 level of about $550 billion. In 2019, it will be $1.4 trillion, with $1.11 trillion from more coupon-bearing debt and the rest in bills.
The TBAC Is Suddenly Worried Who Pays For $12 Trillion In US Deficits... And The Dollar's Reserve Status - Today at 830am the Treasury Borrowing Advisory Committee (aka the TBAC, which many years ago we dubbed the Supercommittee That Really Runs America, an assessment which 8 years later Bloomberg now generally agrees with) "released minutes of its Jan. 29 meeting held at the Hay-Adams Hotel in conjunction with the U.S. government’s quarterly refunding announcement. First, the highlights from the refunding announcement revealed no surprises, with the Treasury announcing no increase in nominal coupon or FRN auction sizes in the coming quarter, and expects TIPS issuance of $22-27BN this calendar year. Specifically, the Treasury will sell $38BN in 3 Year notes, unchanged from December, $27BN in 10 Year notes, unchanged from last quarter, and $19BN in 30 Year Bonds, also unchanged from last quarter. In total, the Treasury will sell $84BN in long-term debt next week vs $83BN last quarter, in the process raising $29.9BN in new cash. In this context, the TBAC recommended keeping nominal coupon auction sizes unchanged for the coming quarter, while gradually increasing TIPS by $1b per auction, with the increases starting with the 30Y TIPS in February, 5y TIPS in April and 10y increases to be considered subsequently. Following were dealers recommendations for coupon auction size increases: $1BN in 5y and 10y, $2BN in 30y, noted increases could be gradual and 30y could at first be increased by just $1BN. Primary dealers also suggested increasing TIPS issuance gradually, resulting in $24b increase over rest of CY2019; committee agreed increase should be gradual, with bulk coming from new October 5y security The treasury also said that Bill supply will increase gradually and will start moderating in early-April, while confirming that extraordinary measures can be used after the March 1 debt ceiling deadline, while noting that it is too soon to say how long extra debt-cap moves will last. On the topic of the government shutdown, the TBAC members discussed the expected end of debt limit suspension period on March 1st, 2019 and agreed with former Chair Matt Zames’ statement that, “The debt limit should not be seen as a budget tool. It is simply a limit on Treasury’s ability to borrow to pay obligations that have already been incurred by Congress during the budget process.” In addition, the Committee noted sensitivity from one ratings agency due to the recent government closure. Though current uncertainty on the duration of extraordinary measures is high due to data availability, given the expected cash balance on March 1, 2019 will be significantly higher than in 2017, preliminary street estimates expect exhaustion of those measures in the third quarter of 2019.
Sickouts and Strike Threats Stopped the Government Shutdown - As recently as Thursday evening, elected officials were engaged in theatrical, go-nowhere resolutions with no real chance of reopening the government. But by Friday afternoon, President Trump abruptly announced a deal to reopen the government, at least temporarily. What changed in less than twenty-four hours? Massively disruptive worker sickouts and the threat of strikes.Earlier this week, Association of Flight Attendants (AFA) international president Sara Nelson raised the possibility of a general strike to fight the shutdown, and a group of aviation unions issued a dire warning that the aviation system’s safety was degrading.Then on Friday, the second missed payday of the shutdown, a significant number of air traffic controllers called out from work, temporarily grounding all flights at New York’s LaGuardia airport and causing flight delays across the East Coast. A source inside the White House told CNN Friday that the flight delays were a “contributing catalyst” to the hasty deal.As news of the delays spread, Nelson immediately raised the possibility that her union members might engage in a “suspension of service” due to safety concerns in an interview. She also told New York, “We’re mobilizing immediately …. If air traffic controllers can’t do their jobs, we can’t do ours.” She carefully avoided claiming the union was preparing to organize a strike, but the implication that there was a very real possibility of a work stoppage was clear. Because of federal workers’ severe lack of labor rights and the fraught history of labor relations between air traffic controllers and the government in particular, we may never know the extent to which the call-outs were organized or how big they were. But given that they came on the symbolic date of federal workers’ second missed payday and followed a week of increasingly dramatic rhetoric from aviation-sector workers, some degree of worker coordination both within and across unions seems reasonable to assume. And there is no other explanation for Trump and the Republicans’ quick reversal besides workers’ threat of disruption.
Ocasio-Cortez votes against bill to reopen government over ICE funding - Rep. Alexandria Ocasio-Cortez (D-N.Y.) was the lone Democrat to vote against a short-term bill to reopen the federal government on Wednesday because of concerns over the bill's funding for Immigration and Customs Enforcement (ICE).The freshman New York Democrat explained on an Instagram Live video that the bill's funding for ICE prevented her from supporting the measure."Most of our votes are pretty straightforward, but today was a tough/nuanced call," Ocasio-Cortez wrote in an Instagram story. "We didn't vote with the party because one of the spending bills included ICE funding and our community felt strongly about not funding that."A request for comment to her congressional office on the vote was not immediately returned. Her vote against the funding bill comes after the 29-year-old self-described democratic socialist faced criticism from left-wing activists in her party for a previous vote earlier this month to fund the Department of Homeland Security — including ICE — through September.
The shutdown cost the economy $11 billion – including a permanent $3 billion loss, government says - The federal government shutdown cost the economy $11 billion, according to a new analysis from the nonpartisan Congressional Budget Office, reflecting lost output from federal workers, delayed government spending and reduced demand.The report, which was released Monday, estimated a hit of $3 billion, or 0.1 percent, to economic activity during the fourth quarter of 2018. The impact was projected to be greater during the first quarter of 2019: $8 billion, or 0.2 percent of GDP.Although most of the damage to the economy will be reversed as federal workers return to their jobs, the CBO estimated $3 billion in economic activity is permanently lost after a quarter of the government was closed for nearly 35 days."Among those who experienced the largest and most direct negative effects are federal workers who faced delayed compensation and private-sector entities that lost business," the report said. "Some of those private-sector entities will never recoup that lost income."The analysis does not incorporate some indirect effects of the shutdown, such as the halt in some federal permits and reduced access to loans.However, the report suggests that businesses were beginning to postpone investment and hiring decisions as a result of the shutdown and warned that the risks were becoming "increasingly significant" as the impasse dragged on. The CBO report was requested last week by Democratic Reps. John Yarmuth of Kentucky, chairman of the budget committee, and Tom O'Halleran of Arizona, co-chairman of the moderate Blue Dog Coalition. The CBO's annual report also looked at the impact of the Trump administration's trade policies on the economy. It estimates that new tariffs on imports and exports will shave an average of 0.1 percent from economic growth through 2029. It also forecast customs duties will rise from 0.2 percent of GDP in 2018 to 0.3 percent this year.
Vital Economic Data Was Likely Lost During the Shutdown – Here’s Why It Matters to All Americans - The shutdown may be over – for now – but its consequences will linger on.One of those concerns is the dizzying amount of economic data the federal government collects on everything from the state of the economy and investment to the cost of college and the quality of nursing homes. During the partial government shutdown, a lot of data simply weren’t collected, which means at a minimum there will be gaps in what people know about the U.S. economy, the jobs picture and housing, to name just a few areas. Americans may not realize just how vital this is to a wide range of groups and individuals – including an economist like myself.This is another powerful reason why it’s essential that the president and Democrats agree on a long-term solution during the upcoming three-week truce. The shutdown affected about 800,000 government workers at dozens of agencies. Of those, roughly 380,000 were furloughed or sent home.As a result many government researchers were neither collecting nor analyzing a lot of key economic data.Some of them work for the Commerce Department’s Bureau of Economic Analysis, which measures the country’s gross domestic product, as well as provides important data on international trade. The publication of this data was suspended or delayed due to the shutdown. The work of the Census Bureau, also a part of Commerce, was hit as well. And while Americans primarily associate the agency with tallying the number of people living in the U.S. every 10 years, it also puts out data on the pace of new home building, durable goods and monthly retail sales. It is presently not clear how quickly and completely the delayed data will be released. Even if the delayed data does get released, it will take several months before the affected agencies return to normal. After the 2013 government shutdown – the longest before the recent one – there were questions about just how much data were lost or corrupted as a result. The latest shutdown lasted more than twice as long, suggesting the impact may be much worse.
IRS will need at least a year to recover from government shutdown, watchdog tells Congress WaPo - The Internal Revenue Service has told lawmakers it would return from the government shutdown buried in millions of unanswered taxpayer letters, weeks behind schedule on training for workers and in need of hiring thousands of new employees for this tax filing season, according to two House aides. The National Taxpayer Advocate, a government watchdog group that oversees the tax collector, has also told House staffers that it is likely to take at least a year for the IRS to return to normal operations, according to the two House aides, who spoke on the condition of anonymity because they were not authorized to speak publicly about the numbers. The watchdog group told House staffers that the recovery would take between 12 and 18 months, one House aide said. These numbers assume the government does not shut down again in three weeks. The IRS did not respond to a request for comment.
Pelosi to Block Trump’s SOTU Address Despite Government Reopening —In a move that’s sure to infuriate President Trump and likely impede negotiations over the border security funding that Trump has demanded be part of any permanent plan to avert another shutdown, House Speaker Nancy Pelosi is still planning to postpone the State of the Union by refusing to officially invite the president to give the annual speech on Tuesday.Asked about the SOTU, Pelosi said after a deal to end the shutdown had been reached that she and the president would discuss holding the SOTU once the government had reopened, a cryptic response that many interpreted as meaning that the speech would be postponed, according to USA Today.“What I said to the president is when the government is opened we will discuss a mutually agreeable date,” Pelosi said, adding “I’ll look forward to doing that” and welcoming Trump in the House chambers when that is done. Drew Hammill, a spokesman for House Speaker Nancy Pelosi, later affirmed that the speech wouldn’t be happening on 1/29. And on Sunday, CNN’s Jim Sciutto reported that an aide to Pelosi had anonymously confirmed that the House wouldn’t consider the concurrent resolution that must be passed to officially invite the president to House chambers, where the speech has traditionally been held.
Pelosi invites Trump to hold State of the Union on Feb 5 - House Speaker Nancy Pelosi has invited President Donald Trump to give the State of the Union address on Feb. 5, following a clash during the partial government shutdown that delayed the speech.In a letter to Trump, the California Democrat said she and the president agreed to the date after they spoke on Monday.The president accepted Pelosi's invitation in a letter, saying "We have a great story to tell and yet, great goals to achieve!"The annual remarks were originally scheduled for Tuesday, beforePelosi asked Trump on Jan. 16to delay them until the closure ended. A week later, Trump told Pelosi that he would speak in the House chamber as planned. The House leader responded that her caucus would not approve the joint session of Congress needed for him to speak in the House chamber until the government was open. Trump then relented.
Trump Says He Doubts Congress Will Strike An Acceptable Border Deal; Stocks Slump - President Trump warned on Sunday during an interview with the Wall Street Journal that he was personally pessimistic about the possibility that a bipartisan group of lawmakers will strike a deal that he would find acceptable. And if no deal is forthcoming, Trump vowed to build the wall anyway. Though Trump said the group of 17 negotiators included some "very good people", Trump said he believed the chances of Congress averting another lapse in government funding were "less than 50-50." Asked if he would accept less than $5.7 billion in the next round of negotiations, Mr. Trump said: “I doubt it...I have to do it right.” Responding to Democrats' insistence that they support border security measures like fencing, levees, bollard barriers, more immigration judges, technology and agents, Trump said he would be skeptical of any deal that trades wall funding for other border security measures. Asked if he would agree to citizenship for the so-called "Dreamers", Trump again said "I doubt it.""That's a separate subject to be taken up at a separate time," Trump said, though he offered three years of temporary protections for the Dreamers as part of a deal he had offered the Democrats. But most importantly, during the interview, Trump said he wouldn't rule out another shutdown: "It's certainly an option," he said, echoing comments from his Acting Chief of Staff Mick Mulvaney, who made the rounds on the Sunday shows to push back against the perception that Trump had somehow "caved" by offering to reopen the government.
Trump aide threatens “national emergency” decree on border wall - Appearing on “Fox News Sunday,” White House Chief of Staff Mick Mulvaney said President Trump would use emergency powers to build a wall on the US-Mexico border if Congress continued to block funding in budget talks soon to take place in a bipartisan congressional conference committee. The committee, consisting of top Appropriations Committee members of the House and Senate, from both big business parties, is to begin work shortly with a deadline of February 15, under the terms of a continuing resolution passed by the House and Senate by voice vote and signed into law by Trump Friday night, ending the partial shutdown of the federal government. The committee will review the overall budget of the Department of Homeland Security (DHS), now topping $49 billion, to determine how much funding, if any, should be directed to the building of a fixed structure along the 243 miles of border, mainly in Texas, designated by the White House as its top priority for wall construction. That stretch of wall alone will cost $5.7 billion, according to DHS estimates. In his remarks Friday announcing that he was backing down on his refusal to sign a continuing resolution temporarily funding the government without the $5.7 billion in money for the border wall, Trump said that if Congress did not agree on the wall money by February 15, he would either force another government shutdown or declare a national emergency and use other government funds to build the wall. By Sunday morning, however, the White House seemed to have dropped the threat of a second shutdown in favor of the more politically incendiary step of declaring a national emergency, which would be the first time this was done by a president seeking to accomplish a policy objective in the face of congressional opposition. All previous emergencies have been declared in response to natural disasters, terrorist attacks or other military and foreign policy contingencies, but not because of political disagreements between the legislative and executive branches.
Eric Trump says he wants father to declare national emergency at border - President Trump's son, Eric Trump, said Tuesday that he wants his father to declare a national emergency to move forward with building a wall along the southern border. “I want him to declare an emergency," he said during an appearance on Fox News' "Hannity." "Oh, I think he will," host Sean Hannity responded. Trump added that he thinks his father should declare the emergency to "build the wall with the United States military because that’s what people in this country want.” The president in recent weeks has threatened to declare a national emergency to build the wall if Congress won't approve funding for it. Lawmakers, however, have predicted that the move would prompt immediate legal challenges. Trump's demand for the construction of a border wall was at the center of a partial government shutdown that began Dec. 22 and lasted more than a month, finally ending on Friday when Trump signed a bill to fund the government for three weeks. Trump had previously refused to sign a bill to fund the government that didn't include at least $5.7 billion for a wall. Democrats vowed throughout the shutdown not to approve any funding for a wall. The bill Trump signed Friday didn't include money for a wall, and he has indicated that he may declare a national emergency if Congress doesn't approve wall funding within the next three weeks.
Republicans want Trump to keep out of border talks - Republicans are urging President Trump to step back, for now, from the negotiations to prevent a second partial government shutdown.The president is offering a running, real-time commentary about the conference committee tasked with breaking the months-long stalemate between the White House and congressional Democrats, frustrating lawmakers who worry Trump is complicating already difficult talks.In a tweet on Thursday, Trump warned that Republicans on the panel might be “wasting their time.”He later added during a rollercoaster White House appearance before reporters that he “won’t even look” at a deal that didn’t including funding for his wall on the U.S.-Mexico border.GOP senators say Trump should stick to the sidelines and let the bipartisan group of appropriators, known for their ability to cut deals, get to work.“I think it would be more worthwhile and effective if the president would allow some space for these negotiations to occur and not be doing commentary at this point,” said Sen. Susan Collins (R-Maine).Sen. John Thune (S.D.), the No. 2 Senate Republican, said he hoped Trump’s skepticism was “wrong” and that the president was just “trying to set expectations low.” Asked if the president should give negotiators some space, Thune added: “I think it’s good to let them do their thing and see what they can come up with.”Sen. Lisa Murkowski (R-Alaska), asked about Trump’s belief that Republicans are wasting their time, said she was trying to “urge success” and that the conference committee should “be empowered to do their work.”The 17 lawmakers negotiating a possible deal have their work cut out for them. They have little time to reach an agreement, and must negotiate in the shadow of Trump and Speaker Nancy Pelosi (D-Calif.).
Trump, in Interview, Calls Wall Talks ‘Waste of Time’ and Dismisses Investigations NYT - — A defiant President Trump declared on Thursday that he has all but given up on negotiating with Congress over his border wall and will build it on his own even as he dismissed any suggestions of wrongdoing in the investigations that have ensnared his associates. In an interview in the Oval Office, Mr. Trump called the talks “a waste of time” and indicated he will most likely take action on his own when they officially end in two weeks. At the same time, he expressed optimism about reaching a trade deal with China and denied being at odds with his intelligence chiefs. “I think Nancy Pelosi is hurting our country very badly by doing what she’s doing and, ultimately, I think I’ve set the table very nicely,” Mr. Trump said. He made no mention of closing the government again, a move that backfired on him, but instead suggested he plans to declare a national emergency to build the wall. “I’ve set the table,” he said. “I’ve set the stage for doing what I’m going to do.” Addressing a wide range of subjects, Mr. Trump brushed off the investigations that have consumed so much of his presidency, saying that his lawyers have been reassured by the departing deputy attorney general, Rod J. Rosenstein, that the president himself was not a target. “He told the attorneys that I’m not a subject, I’m not a target,” Mr. Trump said. But even if that is the case, it remains unknown whether the matter would be referred to the House for possible impeachment hearings. [Read excerpts from the interview with the president.]Mr. Trump added that he never spoke with Roger J. Stone Jr., his longtime associate who was indicted last week, about WikiLeaks and the stolen Democratic emails it posted during the 2016 election, nor did he direct anyone to do so.“No, I didn’t. I never did,” he said of speaking with Mr. Stone on the subject. Did he ever instruct anyone to get in touch with Mr. Stone about WikiLeaks? “Never did,” he repeated.
Trump, Dem talk of ‘smart wall’ thrills tech companies - Tech companies are increasingly bullish on building a "smart wall," which would incorporate new technologies to beef up security on the southern border. Many firms see a potential windfall with both Democrats and Republicans floating the idea of tech improvements as an alternative to President Trump's call for a steel barrier on the U.S.-Mexico border. Democrats have said they would back as much as $5.7 billion for a smart wall. Trump himself discussed the idea when announcing the deal to end the recent government shutdown. "The walls we are building are not medieval walls. They are smart walls designed to meet the needs of frontline border agents," the president said last Friday. Trump's critics, though, noted he had first dismissed the idea when it was proposed by Democrats. The tech and defense industries have long pushed for technology to be a centerpiece of efforts to secure the border. Now they see new momentum for the idea as a bicameral, bipartisan group of lawmakers seek to hash out a border deal to avoid a second shutdown. "We cannot focus on archaic solutions in order to address this very modern problem," Rep. Pete Aguilar (D-Calif.), one of the conferees, said during the group's first meeting on Wednesday. "Technology works for securing the border." Some of the technologies floated include drones to surveil areas border agents cannot easily see, biometrics to check people entering the U.S. with their IDs, and sensors that detect people moving across the border. The encouraging atmosphere has companies looking to highlight technologies that could be deployed.
U.S. Plans Suspension of Nuclear Treaty With Russia, Official Says - The U.S. plans to suspend its obligations under a 1987 nuclear weapons treaty with Russia after a deadline passes this weekend and the Trump administration inches closer to full withdrawal from a pillar of Cold War diplomacy, a White House official said Monday. Unless Russia destroys all its ground-launched cruise missiles known as 9M729s, associated equipment and launchers by Feb. 2, the U.S. will suspend its obligations under the Intermediate-Range Nuclear Forces Treaty, according to the official, who asked not to be identified because a decision hasn’t been announced. The official did not say whether the U.S. will simultaneously announce a full withdrawal from the INF treaty, triggering a process that would take six months to complete. North Atlantic Treaty Organization officials have been preparing for a collapse of the accord for months. President Donald Trump indicated in October he would pull the U.S. out of the treaty, but after consulting with German Chancellor Angela Merkel and other allies decided to delay the suspension. Secretary of State Michael Pompeo in early December said the U.S. was giving Russia two more months to get back in compliance with the treaty. “We must confront Russian cheating on their nuclear obligations,” Pompeo said at the conclusion of the NATO meeting in early December. “Our nations have a choice: We either bury our head in the sand, or we take common-sense action in response to Russia’s flagrant disregard for the express terms of the INF Treaty.”
US nuclear weapons- first low-yield warheads roll off the production line - The US has begun making a new, low-yield nuclear warhead for its Trident missiles that arms control advocates warn could lower the threshold for a nuclear conflict. The National Nuclear Security Administration (NNSA) announced in an email it had started manufacturing the weapon at its Pantex nuclear weapons plant in Texas, as ordered by Donald Trump’s nuclear posture review (NPR) last year. The NNSA said the first of the new warheads had come off the production line and that it was on schedule to deliver the first batch – an unspecified number referred to as “initial operational capability” – before the end of September, according to the email, first sent in response to an enquiry from Exchange Monitor, which covers the nuclear weapons complex. The new weapon, the W76-2, is a modification of the existing Trident warhead. Stephen Young, a senior Washington representative of the Union of Concerned Scientists, said its yield had most likely been cut by taking away one stage from the original two-stage, W76 thermonuclear device. “As best we can tell, the only requirement is to replace the existing secondary, or second stage, with a dummy version, which is what they do every time they test fly a missile,” Young said, adding that the amount of tritium, a hydrogen isotope, may also be adjusted. The result would be to reduce its explosive power from 100 kilotons of TNT, to about five – approximately a third of the force of the bomb dropped on Hiroshima. The Trump administration has argued the development of a low-yield weapon would make nuclear war less likely, by giving the US a more flexible deterrent. It would counter any enemy (particularly Russian) perception that the US would balk at using its own fearsome arsenal in response to a limited nuclear attack because its missiles were all in the hundreds of kilotons range and “too big to use”, because they would cause untold civilian casualties. Low-yield weapons “help ensure that potential adversaries perceive no possible advantage in limited nuclear escalation, making nuclear employment less likely”, the 2018 nuclear posture review said. Many critics say that is an optimistic scenario that assumes there will be no miscalculation on the US side. “There are many other scenarios, especially with a president who takes pride in his unpredictability and has literally asked: ‘Why can’t we use our nuclear weapons?’”, Young said.
Russia Threatens Retaliation as US Officially Pulls Out of Nuclear Arms Treaty -- In a sign that Russia might soon be deploying those new hypersonic missiles that Russian President Vladimir Putin has been showing off lately, Reuters reported that the US is preparing to suspend compliance with the Intermediate-range Nuclear Forces Treaty, citing four US officials, opening the door to the reintroduction of medium-range ground-based nuclear arms in the area around Russia.The officials said the the suspension will kick off a six month countdown that could lead to the dissolution of the treaty. However, Washington could opt to remain a part of the pact if Moscow decides to become compliance with the 1987 Cold War-era treaty.The decision comes after the US and Russia revealed on Thursday that they had failed to work out their differences on the treaty, something that analysts have warned could be the first step in a new Cold War-style arms race – or worse. Both sides have accused the other of violating the terms of the historic treaty, which called for a ban on all land-based missiles with a range of between 310 and 3,400 miles, according to NBC News. This latest step comes after the Trump Administration repeatedly warned Russia that it would leave the treaty if Moscow didn’t comply with the family by Feb. 2. Both sides have been meeting in Beijing, but Russia’s Deputy Foreign Minister Sergei Ryabkov said on Thursday that the talks had failed. Update: Secretary of State Mike Pompeo has announced that the US will withdraw from the Intermediate Range Nuclear Forces treaty immediately, prompting threats of a Russian “response” from Moscow. Pompeo said the US could return to compliance with the treaty if Moscow meets Washington’s demands within the next 180 days. To convince the US to back down, Washington has insisted that Russia cease development of a new cruise missile. Moscow has repeatedly denied claims that it’s in violation of the treaty. The withdrawal, which has been expected for months, will formally take place on Saturday. Trump said the US’s NATO allies support the decision to withdraw from the treaty, which has been a cornerstone of European security for years. The US has also expressed concerns that its compliance with the treaty has benefited China, which isn’t a party to the agreement.
The US scraps the INF treaty: Another step toward nuclear war - The theory of nuclear winter, discovered in the mid-80s and subsequently accepted by scientific consensus, concludes that a full-scale nuclear war, as planned by the United States military, would render the entire planet uninhabitable for a century. But it is precisely such a nuclear apocalypse that the United States is not just blindly stumbling toward, but directly preparing for. As a recent article in Foreign Affairs told its readers: “Prepare for Nuclear War.”On Friday, US Secretary of State Mike Pompeo declared that the United States would suspend its compliance with the Intermediate Range Nuclear Forces (INF) treaty, a 1987 agreement between the Soviet Union (and subsequently Russia) and the United States that bans the deployment of missiles with ranges between 500 and 5,500 kilometers.The move makes almost inevitable the US withdrawal from the other key global arms control agreement, the New START treaty, agreed between the United States and Russia in 2011, in what US president Trump called “one of several bad deals negotiated by the Obama administration.” Little need be said about the White House’s official justifications for leaving the treaty: that Russia is in violation of the treaty’s provisions, despite repeated offers by Moscow for not only the United States, but international authorities and journalists, to inspect its missiles. The White House’s allegations are echoed by people who do not believe them and left unquestioned by a media apparatus that functions as a mouthpiece for the military. In an article that fully backs the White House’s accusations against Russia, the New York Times’ David Sanger, a conduit for the Pentagon, spells out with perfect lucidity the real reasons why the United States is leaving the INF treaty: “Constrained by the treaty’s provisions, the United States has been prevented from deploying new weapons to counter China’s efforts to cement a dominant position in the Western Pacific and keep American aircraft carriers at bay. China was still a small and unsophisticated military power when Ronald Reagan and Mikhail Gorbachev, the last leader of a rapidly-weakening Soviet Union, negotiated the I.N.F. agreement.” Sanger’s own words make perfectly clear why the United States wants to leave the treaty, which has nothing to do with Russia’s alleged violations: Washington is seeking to ring the island chain surrounding the Chinese mainland with a hedge of nuclear missiles. But Sanger somehow expects, without so much as a transition paragraph, his readers to believe the hot air spewed by Pompeo about Russia’s “bad behavior.”
Russia suspends role in nuclear pact -Russia has suspended its involvement in the Cold War-era Intermediate-Range Nuclear Forces Treaty (INF) following a similar decision by the US.President Vladimir Putin said Russia would start developing new missiles.On Friday, the US, which has long accused Russia of violating the treaty, formally announced it was suspending its obligations under the agreement.Signed in 1987 by the US and USSR, it banned the use of short and medium-range missiles by both countries."Our American partners announced that they are suspending their participation in the treaty, and we are suspending it too," Mr Putin said on Saturday."All of our proposals in this sphere, as before, remain on the table, the doors for talks are open," he added. Earlier on Saturday, Nato Secretary General Jens Stoltenberg told the BBC: "All [European] allies agree with the United States because Russia has violated the treaty for several years. They are deploying more and more of the new nuclear capable missiles in Europe."He also said the six-month period the US had given Russia to return to full compliance should be taken advantage of. Russia has denied violating the INF accord.
China, Russia Preparing For Blackout Warfare With Super-EMP Bombs - Russia, China and several other nations are developing powerful high-altitude nuclear bombs that can produce super-electromagnetic pulse (EMP) waves capable of knocking out critical electronic infrastructure, according to several declassified 2017 reports from the now-defunct Commission to Assess the Threat to the United States from EMP Attack (see below). "Foreign adversaries may aptly consider nuclear EMP attack a weapon that can gravely damage the U.S. by striking at its technological Achilles Heel, without having to confront the U.S. military," reads the report, which notes how foreign actors could use EMP attacks virtually anywhere in the world. "Super-EMP" weapons, as they are termed by Russia, are nuclear weapons specially designed to generate an extraordinarily powerful E1 EMP field. Super-EMP warheads are designed to produce gamma rays, which generate the E1 EMP effect, not a big explosion, and typically have very low explosive yields, only 1-10 kilotons ... Even EMP hardened U.S. strategic forces and command, control, communications and intelligence (C3I) systems are potentially vulnerable to such a threat. -Firstempcommission.org "Nuclear EMP attack is part of the military doctrines, plans, and exercises of Russia, China, North Korea, and Iran for a revolutionary new way of warfare against military forces and civilian critical infrastructures by cyber, sabotage, and EMP," the report continues. "The Commission sees the high-altitude nuclear explosion-generated electromagnetic pulse as an existential threat to the survival of the United States and its allies that can be exploited by major nuclear powers and small-scale nuclear weapon powers, including North Korea and non-state actors, such as nuclear-armed terrorists."
US would be crippled by an EMP attack, which we pioneered nearly 60 years ago - The Air Force Special Weapons Center delivered a preliminary plan in November of 1961 under the entirely unassuming name of Operation FISHBOWL. This operation was a “proposed series of high altitude nuclear effects tests.” According to the plan, which was only declassified on April 6, 2007, the primary objective of the series of tests was to “…obtain data regarding the interference to radar and communication systems produced by a high altitude nuclear burst.” At the time, the scientists and defense specialists suspected that a such a blast could cause a blackout with “serious implications for critical defense systems such as BMEWS, Nike-Zeus, ICBM penetration and many communication systems, and conversely that its employment may be an effective ICBM offensive tactic.”On July 9, 1962, a single nuclear weapon was detonated 900 miles southwest of Hawaii from a height of over 240 miles. The International Space Station orbits at that height. To put it in perspective, the average passenger jet only flies around 35,000 feet or a little over 7 miles up.Code-named ‘Starfish Prime,’ the 1.4 megaton nuclear bomb was aroundone-hundred times more powerful than Hiroshima.It delivered more than test results.Thirteen minutes after launch, an electromagnetic pulse (EMP) “…knocked out electrical service in Hawaii, nearly 1,000 miles away. Telephone service was disrupted, streetlights were down and burglar alarms were set off by a pulse that was much larger than scientists expected.” The EMP weapon was born. A single EMP weapon could fry the electronics and devices carrying our network and internet traffic — among other, more destructive, things.
North Korea nuclear- US intelligence report says regime to keep weapons - North Korea is unlikely to fully give up its nuclear weapons, a US intelligence report says, despite the hopes of the Trump administration. The Worldwide Threat Assessment report also says Iran is not making nuclear weapons, but that cyber threats from China and Russia are a growing concern. Both countries may be seeking to influence the 2020 election, it says.National intelligence director Dan Coats and other intelligence chiefs presented it to the Senate on Tuesday.North Korea remains "unlikely to give up" its weapon stockpiles and production abilities while it tries to negotiate "partial denuclearisation steps to obtain key US and international concessions", the report says.Having nuclear weapons is seen as "critical to regime survival", it reads. President Donald Trump and North Korea's Kim Jong-un met in Singapore last June to discuss denuclearisation of the Korean peninsula.At the time, Mr Trump claimed this meeting had ended the North Korean nuclear threat: The two leaders signed an agreement pledging to "work toward complete denuclearisation" but there was no agreed pathway and little progress has been made since then on the issue. North Korea has always insisted it will not unilaterally give up its nuclear arsenal unless the US removes its own nuclear threat.The White House has said they will meet for a second time in February, but no date or location has yet been confirmed. The new US report highlights a growing threat from China and Russia, which are "more aligned than at any point since the mid-1950s". Both countries have sophisticated "cyber espionage" capabilities, which they may try to use to influence the 2020 US presidential election. The report also says Iran is not currently making nuclear weapons, although it says the country's "regional ambitions and improved military capabilities" will probably threaten US interests in the future.
Haven’t Enough to Keep You Awake At Night? Try The Doomsday Clock For A Truthful State Of The Union- The good folks at the Bulletin of Atomic Scientistshave returned to wind their Doomsday Clock. Last Thursday at the National Press Club a group of well-credentialed speakers, including former California Governor Jerry Brown and former Secretary of Defense William Perry, underscored the organization’s warning that we have established residence in “the new abnormal.” Watch the press conference and supportive videos here. The Doomsday Clock was set last year at a two-minutes until midnight, (midnight being the endgame), and there it now remains. There’s little comfort to be had in standing on what University of Chicago astrophysicist Robert Rosner characterized as a precipice we’d best quickly leap back from. Bulletin president and CEO Rachel Bronson stressed that the clock remaining where it is, the closest it has been to world catastrophe, is not stability, but “a stark warning to leaders and citizens around the world.” William Perry said the organization views our current situation as precarious as it was in 1953, in the gloom of the Cold War while the Korean War still raged. Jerry Brown said, “The blindness and stupidity of the politicians and their consultants is truly shocking in the face of nuclear catastrophe and danger….the business of everyday politics blinds people to the risk, we’re playing Russian Roulette with humanity,” with the danger of an incident that will kill millions if not igniting a conflict that will kill billions.
Warren introduces bill to stop US using nuclear weapons first - Presidential hopeful Sen. Elizabeth Warren introduced legislation Wednesday seeking to stop the US from launching a first-strike nuclear weapons attack on another country.Warren, of Massachusetts, and Rep. Adam Smith of Washington -- both of whom are Democrats -- introduced separate, but identical, bills in their individual chambers Wednesday."By making clear that deterrence is the sole purpose of our arsenal, this bill would reduce the chances of a nuclear miscalculation and help us maintain our moral and diplomatic leadership in the world," they wrote in a joint statement.Smith, the chairman of the House Armed Services Committee, has long been critical of theTrump administration's 2018 Nuclear Posture Review and its plans to modernize the US nuclear weapon arsenal.That review said that the US would consider a nuclear response to a potential "non-nuclear strategic attack.""The United States will only consider the use of nuclear weapons in extreme circumstances to defend the vital interests of the United States, its allies and partners," then-Deputy Secretary of Defense Pat Shanahan said upon the review's public release in February of 2018. Shanahan is now serving as the acting secretary of defense after the departure of his predecessor, James Mattis.While the review opens the door to the US using nuclear weapons in response to a major non-nuclear attack, the administration's policy is consistent with the views of past administrations that opted not to embrace a "no first use" policy."The context of an attack that does not involve nuclear weapons initially would be very important to take into account," when considering whether or not to retaliate with nuclear weapons, Under Secretary of Defense for Policy John Rood said. Defense officials previously told CNN that a major cyber-attack that destroyed critical infrastructure could potentially fit this criteria. Warren and Smith's proposed legislation aiming to prevent presidents ordering a first nuclear strike is unlikely to get much backing in the Republican-controlled Senate.
US Navy’s stealthy ‘ship killer’ has nothing to shoot from its hi-tech guns - With slick sides and sharp angles, the USS Michael Monsoor and its sister ship Zumwalt cut a distinct silhouette along the waters of San Diego. Unlike a nearby aircraft carrier whose radar juts into the air, the Monsoor’s composite material deckhouse is polygonal and covered with material that can absorb radar waves and increase the destroyer’s stealth. Its “tumblehome” hull looks like something you’d see on a ship built before the first world war. Make no mistake, the Monsoor guided-missile destroyer is one of the US Navy’s most technologically advanced ships. But developing that technology was more difficult than expected, and its deployment has been complicated by a strategic pivot in the ship’s mission. In the end, what was once intended to be a class of 32 destroyers will now be only three, at a per-ship cost of about US$4.4 billion, according to a December 2016 estimate by the Government Accountability Office, the most recent cost estimate available. Including development costs, that number balloons to US$8.2 billion, the GAO said. The Michael Monsoor was commissioned on Saturday. The third and final ship, the Lyndon B. Johnson, is scheduled for christening in late April. The US Navy had planned to use the Zumwalt-class destroyers as replacements for its old Arleigh Burke-class destroyers, the first of which entered service in 1991. The idea was to use the Zumwalt ships in near-shore waters to support ground troops – a mission that reflected the anticipation of fights against land and sea forces from countries such as North Korea or Iran, according to an October Congressional Research Service report. Instead, the US Navy is refocused on planning for a more traditional mission: challenging the navies of competitors such as China and Russia.
AP report exposes US role in right-wing coup in Venezuela - The United States intensified its coup operation against the Venezuelan government of Nicolas Maduro over the weekend as the European Union swung behind the US effort. Speaking on Saturday before the United Nations Security Council, US Secretary of State Mike Pompeo declared, “The regime of ex-president Nicolas Maduro is illegitimate. We therefore consider all of its declarations and actions illegitimate and invalid.” Calling Venezuela an “illegitimate mafia state,” Pompeo addressed the governments of the world: “Either you stand with the forces of freedom, or you’re in league with Maduro and his mayhem.” Also on Saturday, several European governments—including France, Germany, Spain and the UK—delivered an ultimatum, declaring that they would recognize US-backed, self-declared president Juan Guaidó unless Maduro called new elections within eight days. As expected, Maduro rejected the ultimatum. Throughout Sunday, Maduro visited military bases and tweeted videos of himself in military garb addressing troops and conducting exercises with the Army and Navy. “To guarantee peace, we must prepare ourselves,” Maduro said. “In this world we respect the brave, the courageous, and we have to respect the Venezuelan nation with military power.” He reiterated that the military would hold the country’s largest nationwide military exercises beginning February 10. At the same time, Maduro rescinded his previous threat to expel US diplomats in Venezuela, allowing Saturday’s initial expulsion deadline to pass without incident. Maduro announced that he would let US diplomats stay for another 30 days. He indicated in an interview on Turkish CNN that he had sent Trump “many messages” and was interested in “engaging in comprehensive dialogue.”
US Follows Ukraine, Syria Roadmap for Venezuelan Regime Change — Since the decision of the Trump administration on Wednesday to recognize a member of the Venezuelan opposition, Juan Guaidó, as an unelected “interim president,” the situation in the South American country has become increasingly tense, with efforts to force the current government of Venezuela — led by Nicolás Maduro — out of power having grown in intensity over the past few days.Despite the enormous pressure, his government faces from both local and international sources, Maduro has managed to maintain his position thanks to a combination of factors. These include the loyalty of the country’s well-armed military, in addition to popular support from Venezuelans who recently voted for Maduro, as well as Venezuelans who may not like Maduro but prefer him to a politician hand-picked and foisted upon them by the United States.Yet, the long-standing campaign of the United States to effect regime change in Venezuela — a campaign that has been ongoing ever since Hugo Chávez, Maduro’s predecessor and mentor, was elected in 1998 — has shown time and again that the U.S. is unwilling to let go of its dream of installing a “friendly” government in the world’s most oil-rich country.For that reason, if the Trump administration’s attempt to simply install a Venezuelan president fails to produce the intended result (regime change), there is substantial concern that the U.S. will turn to other means to bring about a change in government, including the instigation of a new proxy war. While direct military intervention by the U.S. has not been ruled out, it has long been seen as more probable — based on the U.S.’ troubling history of ousting leftist Latin American governments through right-wing coups — that the U.S. would follow the roadmaps it used to push for regime change in both Syria and Ukraine. In other words, the danger of another major proxy war — this time in Latin America — looms large and, much like what has transpired in Syria and Ukraine, the manufacture of such a conflict would again pit the U.S. against both Russia and China, both of which have invested heavily in Venezuela, and by extension in the current government, for nearly two decades.
Russia Vows Full Support for Maduro as U.S. Sanctions Bite - Russia vowed to “do everything” to protect Venezuelan President Nicolas Maduro against U.S. efforts to oust him as the Trump administration ratcheted up economic pressure on the embattled Kremlin ally amid doubts about Moscow’s ability to shore up his regime. Russia, together with other allies, will “do everything to support the legitimate government of President Maduro” and steps to resolve the deepening crisis in the Latin American nation “within the constitutional framework,” Foreign Minister Sergei Lavrov told a news conference in Moscow on Tuesday. He didn’t elaborate on what steps Russia might take. A top Finance Ministry official, meanwhile, warned that Venezuela could have trouble meeting payments under a $3.15 billion debt-rescheduling deal reached in 2017. A senior legislator warned Maduro’s government might not be able to hold on for long. The Kremlin has lavished support on the Latin American country in recent years, making it one of the biggest recipients of Russian loans and investment and an outpost of Moscow’s influence in a region dominated by the U.S. But Russia has been reticent about committing more capital, especially since opposition officials have said they might not honor all the Maduro government’s obligations. The Trump administration on Monday sanctioned the state oil company PDVSA, which will effectively stop it from exporting crude to the U.S. The U.S. and a number of countries in Latin America and Europe and elsewhere have recognized National Assembly President Juan Guaido as the rightful head of state. The U.S. is putting pressure on the opposition to refuse concessions in discussions with the government, Lavrov said, denouncing Washington for what he called “illegal” attempts to remove the regime. He also called U.S. sanctions on Venezuela illegitimate and blasted hints from Washington of possible troop deployments to the region.
Pompeo Puts Elliott Abrams in Charge of Regime Change in Venezuela - American Conservative - Pompeo named Elliott Abrams as special envoy for Venezuela Friday. The Guardian reminds us of Abrams’ awful career serving in previous Republican administrations: Abrams is widely remembered in Central America, but particularly from his time in the Reagan administration, when he tried to whitewash a massacre of a thousand men, women and children by US-funded death squads in El Salvador, when he was assistant secretary of state for human rights. Abrams also helped organise the covert financing of Contra rebels in Nicaragua behind the back of Congress, which had cut off funding. He then lied to Congress about his role, twice. He pleaded guilty to both counts in 1991 but was pardoned by George HW Bush. More than a decade later, working as special Middle East adviser to former president George W Bush, Abrams was an enthusiastic advocate of the Iraq invasion. He was in the White House at the time of the abortive coup in 2002 against Hugo Chavez. The Observer reported that Abrams gave the green light to the putsch, another an inspector general enquiry found no “wrongdoing” by US officials. That was not enough to erase his reputation as the assistant secretary of dirty wars. The message sent by his return to the front rank of US diplomacy will not missed in Caracas. Putting Abrams in charge of any aspect of U.S. foreign policy is a horrible mistake. Putting someone with such a well-known, appalling record in charge of a regime change effort in Latin America confirms critics’ worst suspicions about this intervention in another country’s internal political dispute. It is a measure of how completely hard-liners now dominate Trump administration foreign policy that a vocal Trump critic can be brought on to lead a high-profile foreign policy initiative. Venezuela policy has been designed by Rubio and Pompeo, both of whom are notoriously hawkish, and it is going to be carried out by a neoconservative with one of the bloodiest and ugliest foreign policy records of anyone that has served in government over the last forty years. All the while, Bolton couldn’t be happier with what has been happening. Trump is letting his foreign policy be conducted by some of the very worst people in the Republican Party, and it is just a matter of time before it blows up in his face at great cost to the U.S.
US calls on countries to ‘pick a side’ in Venezuela crisis - The US secretary of state has called on countries to "pick a side" on Venezuela, urging them to back opposition leader Juan Guaido and calling for free and fair elections as soon as possible in a speech at the UN Security Council."Now, it is time for every other nation to pick a side. No more delays, no more games. Either you stand with the forces of freedom, or you're in league with [Nicolas] Maduro and his mayhem," Mike Pompeo told the 15-member UNSC on Saturday.Pompeo was addressing the UNSC after Washington and its regional allies recognised Guaido as head of state and urged Venezuelan President Maduro to step down."We call on all members of the Security Council to support Venezuela's democratic transition and interim President Guaido's role in it," he said. Russia unsuccessfully tried to stop the meeting requested by the United States. Moscow has accused Washington of plotting a coup attempt, placing Venezuela at the heart of a growing geopolitical duel."Venezuela does not represent a threat to peace and security," Russia's UN ambassador, Vassily Nebenzia, told the Security Council. "If anything does represent a threat to peace, it is the shameless and aggressive action of the United States and their allies aimed at the ouster of the legitimately elected president of Venezuela," he said.
Trump’s ‘Axis of Evil’: Pompeo, Bolton & Abrams -- US Secretary of State Mike Pompeo called on countries to "pick a side" on Venezuela, urging them to back opposition leader Juan Guaido in a Saturday speech at the UN Security Council in New York. "Now, it is time for every other nation to pick a side. No more delays, no more games. Either you stand with the forces of freedom, or you're in league with Maduro and his mayhem," Pompeo told the Security Council.Russia accused Washington of plotting a coup attempt and had tried to stop the meeting requested by the United States. "Venezuela does not represent a threat to peace and security. If anything does represent a threat to peace, it is the shameless and aggressive action of the United States and their allies aimed at the ouster of the legitimately elected president of Venezuela," Russia's UN ambassador, Vassily Nebenzia, told the UN Council. On Friday, neoconservative Elliott Abrams was appointed US special envoy for Venezuela. “Elliott will be a true asset to our mission to help the Venezuelan people fully restore democracy and prosperity to their country,” Mr Pompeo said, according to Reuters. Abrams is known as the "Assistant Secretary of Dirty Wars," a title he earned during his stints with the Reagan and George W. Bush administrations: Also on Friday, a Wall Street Journal report confirmed suspicions that opposition leader Juan Guaido's move to declare himself "interim president" of Venezuela this week was highly coordinated with the Trump White House and Republican lawmakers. Guaido's move and U.S. President Donald Trump's rapid endorsement were quickly decried as a dangerous intervention—or the beginnings of a coup d'etat—which progressives argued would dramatically worsen the country's economic and political crisis. As Common Dreams reported, over 70 academics and experts signed an open letter demanding that the U.S. "cease encouraging violence by pushing for violent, extralegal regime change."
U.S. Seeks To Cripple Venezuela’s No.1 “Vehicle For Embezzlement’’ - The Trump administration stepped up its effort at regime change in Venezuela on Monday, announcing sanctions intended to cripple the country’s oil sector.The U.S. government will bar most transactions between any American companies and PDVSA, with some limited exceptions. The U.S. Treasury Department justified the sanctions, saying that PDVSA has “long been a vehicle for embezzlement.” The sanctions immediately put 500,000 bpd of Venezuelan oil exports at risk, as well as some 100,000 bpd of U.S. exports of diluents to Venezuela.Citgo, the U.S.-based subsidiary of Venezuela, would be allowed to continue to operate, but its revenues will be diverted into a designated account. The Trump administration is trying to put Venezuela’s oil revenues into the hands of its preferred president, Juan Guiadó.The threat of oil sanctions on Venezuela has been on the table for the better part of two years. Former U.S. Secretary of State Rex Tillerson repeatedly hinted at the possibility of oil sanctions, but the U.S. government held off on such a drastic move over fears that it would deepen the humanitarian crisis in Venezuela and it would also result in the U.S. bearing responsibility for the crisis.Both of those things are now happening. Prior American sanctions have arguably made the humanitarian situation much worse, and the new round will surely deepen the misery inside the country.Moreover, the U.S. is actively seeking regime change in Venezuela and is no longer trying to hide that fact. If there was any question about American intentions, those were put to rest late last week with the appointment of Elliott Abrams as the special envoy for American policy on Venezuela. Abrams is infamous for his involvement in the Iran-Contra affair, his support for strongmen in Central America that engaged in massacres in the 1980s, as well as his efforts to discredit reports of those killings. In many ways, he personifies the very dark period of American foreign policy in Latin America in the 20th century. His elevation to lead American policy on Venezuela is a little on the nose, but to be sure, the Trump administration no longer has any compunction about broadcasting its desire for regime change.
Fears US could invade Venezuela as ‘5,000 troops to Colombia’ note spotted on John Bolton’s pad and he warns ‘all options on table’ - THE threat of a US invasion of Venezuela to oust socialist President Nicolas Maduro has been raised after Donald Trump's security adviser flashed a note about sending "5,000 troops to Colombia". John Bolton said President Trump is leaving open the possibility of military intervention to protect the country's opposition leader Juan Guaido. Bolton told reporters at the White House on Monday: "The president has made it clear that all options are on the table." He also stood with a notepad which appeared to read: "Afghanistan -> Welcome the Talks. 5,000 troops to Colombia". Maduro was re-elected last year in an election widely seen as fraudulent. The once prosperous nation has been in an economic collapse, with several million citizens fleeing to neighbouring countries. It led the US and other nations last week to recognise Guaido - the opposition leader of the National Assembly - as the interim president of Venezuela instead of Maduro. Bolton and Treasury Secretary Steve Mnuchin, who also appeared at the Monday briefing, announced the US was imposing sanctions on the state-owned oil company of Venezuela. The potentially critical economic move is aimed at increasing pressure on President Maduro to step down. Petroleos De Venezuela S.A. has around $7 billion (£5.32bn) in assets and is one of the country's most important sources of income and foreign currency.
Colombia Says It's Puzzled Over John Bolton's 5,000 Troops To Colombia Note - Colombia is downplaying Monday's incident in which US national security advisor John Bolton perhaps inadvertently flashed the contents a yellow notepad he was holding during a White House press briefing to reveal handwritten text “5,000 troops to Colombia,” which was picked up by photographers. The words were seen scribbled behind “Afghanistan – welcome the talks” in apparent notes made while previously discussing White House foreign policy and national security. Colombian Foreign Minister Carlos Holmes dismissed the possibility of any impending joint action with its close ally the US, saying in a brief address late Monday that he does not know the "importance and reason" for Bolton's note. Holmes further said noting that his country will only act “politically and diplomatically” to restore order in neighboring Venezuela and will attempt to ensure new elections are held. Bogota has recently joined the United States in backing National Assembly opposition leader Juan Guaido as the legitimate "Interim President" of Venezuela and is seen in close coordination with Washington. The South American country shares a 1,370 mile border land border with Venezuela and has long been accused by the Nicolas Maduro government of harboring militants engaged in coup and assassination plots against him. Any significant US military intervention in South America would likely have Colombia involved at the very least as an important logistical and staging hub. So this notepad that National Security Advisor John Bolton was holding today at the White House briefing on Venezuela says: "Afghanistan -> Welcome the Talks. 5,000 troops to Colombia." If confirmed this would be a pretty terrible OPSEC breach. https://t.co/KS0Issfvps pic.twitter.com/IOrSprG567 — Rao Komar (@RaoKomar747) January 28, 2019
John Bolton Openly Admits He Wants Maduro Out, American Oil Companies In - Embattled Venezuelan President Nicolas Maduro might be forgiven for thinking there's a foreign-backed conspiracy against him in repeatedly accusing the US of engineering a "coup" and waging "economic war" against his regime, especially given that US advisers are now quite openly admitting this is precisely the case. In fact just after Maduro's contested reelection and swearing in to a second six-year term, his foreign minister Jorge Arreaza told Democracy Now that "Nothing that the opposition does is without the permission or authorization of the State Department... They say, 'We have to make consultations with the embassy. We have to make consultations with the Dept of State.'" While that broad brush assertion could remain over-simplistic, White House officials aren't making it any easier for the opposition in terms of Maduro painting it as tainted by a foreign hand. As a prime example, Trump's national security advisor John Bolton recently admitted to Fox Business that the US has a "lot at stake" amidst the ongoing Venezuela crisis given the fact that it has the world’s largest proven oil reserves. Bolton told host Trish Regan: It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela. So it appears that as the administration contemplates ratcheting up both economic and political pressures in favor of opposition National Assembly leader Juan Guaidó, and as "all options are on the table" according to senior officials last week, Bolton in a candid moment which went largely overlooked by the rest of the mainstream media has given us a glimpse into the administration's less than pure motives on Venezuela. "Venezuela's one of the three countries I call the 'troika of tyranny,'" Bolton continued (he's previously identified Cuba and Nicaragua as the other two). After essentially admitting US policy in Venezuela is focused on American oil companies taking over the economically collapsed socialist country's vast untapped oil reserves, he concluded by expressing hope that "we can make this come out the right way."
“Very Dangerous”: US Seizes Venezuela Oil Assets, Renews Threat of Military Action — The Trump administration intensified its interference in politically-fractured Venezuela on Monday by announcing the seizure of billions of dollars in assets connected to the nation’s state-owned oil company, a move critics decried as part of a “dangerous” U.S. policy to help opposition forces overthrow elected president Nicolás Maduro. National Security Adviser John Bolton and Treasury Secretary Steven Mnuchin announced the sanctions imposed via executive order against Petroleos de Venezuela, S.A. (PdVSA)—a primary source of income and foreign currency for the country—at a White House press briefing on Monday afternoon. They were joined by Larry Kudlow, director of the National Economic Council. Mnuchin vowed the United States “will continue to use all of our diplomatic and economic tools” to back Juan Guaidó, who has declared himself Venezuela’s “interim president.” The secretary made clear that “the path to sanctions relief for PdVSA is through the expeditious transfer of control to the interim president or a subsequent, democratically-elected government.”As CNBC reported:Mnuchin said PDVSA has long been a vehicle for embezzlement and corruption by officials and businessmen. The sanctions will prevent the nation’s oil wealth from being diverted to Maduro and will only be lifted when his regime hands control of PDVSA to a successor government, he added.[…] Under the sanctions, U.S. companies can continue to purchase Venezuelan oil, but the payments must be held in an account that cannot be accessed by the Maduro regime.“If the people in Venezuela want to continue to sell us oil, as long as that money goes into blocked accounts, we’ll continue to take it,” Mnuchin said. “Otherwise we will not be buying it.”In addition to tightening economic restrictions on the Maduro government as a way to bolster the position of Guaidó, Bolton also issued a fresh threat of military action by telling reporters in the White House briefing room that Trump “has made it clear that all options are on the table” when it comes to next possible steps.“This is very dangerous,” world-renowned economics professor and senior U.N. advisor Jeffrey D. Sachs warned on CNN Monday afternoon. He expressed concern that the administration’s actions could cause immense suffering among the Venezuelan people, similar to the consequences endured by citizens of other countries subjected to U.S. interventions.“The problem here is that these efforts by the United States to change other countries’ governments often lead to catastrophe,” Sachs noted, “as has happened all through the Middle East in recent years.”
White House surprises agencies, industry with Venezuela sanctions; few details available - Just hours before the Trump administration announced crippling oil sanctions against the Venezuela government, a high-ranking State Department official was still telling people involved in Latin American policymaking that oil sanctions weren’t coming anytime soon. Such conversations were happening across the government as some top officials at the departments of State, Energy and Treasury and members of Congress felt blindsided by the sudden announcement from the White House Monday blocking almost all exports, imports and financial dealings with the Venezuelan oil sector, according to people familiar with administration discussions. National security adviser John Bolton and Treasury Secretary Steven Mnuchin announced on Monday the strongest measures yet against the state-run oil company, PDVSA. The sanctions prevent any dealings by PDVSA with U.S. companies unless under special conditions. “The rollout was so convoluted because it wasn’t supposed to happen now,” said one person familiar with administration conversations. “It was supposed to happen further down the line.” The announcement was reminiscent of past seemingly freewheeling decisions such as the withdrawal of troops from Syria. Unlike previous administrations, the Trump administration has become known for making policy without running the typical in-depth process where all agencies involved buy in. While the White House has discussed the possibility of oil sanctions for months in interagency policy discussions, it was largely in general terms alerting officials that “all options were on the table.” In those discussions, officials often pushed back strongly against the timing of the oil sanctions while acknowledging privately that they had no idea whether the administration would go through with the measure. Even companies that run Gulf Coast oil refineries which processed Venezuelan oil, warned that gas prices would increase. Since the sanctions have been announced, oil executives have been reaching out to the White House, Treasury Department and others to extract information about what they can and can’t do.
Trump speaks with Venezuelan opposition leader - President Trump on Wednesday applauded Venezuelan opposition leader Juan Guaidó for declaring himself the country’s interim president in an effort to oust socialist President Nicolás Maduro. White House press secretary Sarah Huckabee Sanders confirmed that Trump had spoken with Guaidó “to congratulate him on his historic assumption of the presidency and to reinforce President Trump’s strong support for Venezuela’s fight to regain its democracy.” Both leaders “agreed to maintain regular communication to support Venezuela’s path back to stability, and to rebuild the bilateral relationship between the United States and Venezuela,” Sanders said. The U.S. and other nations last week recognized Guaidó as Venezuela’s rightful leader, raising pressure on Maduro to step aside. Guaidó, 35, is the leader of Venezuela’s National Assembly. In a tweet, Guaidó said that during the call Trump stressed his “complete backing” for their fight for democracy. The Trump administration has moved quickly to prop up Guaidó’s interim government amid an intense effort by Maduro, whose election has been called illegitimate, to eliminate the threat to his power. Anti-Maduro protests erupted last weekend in the capital of Caracas, and demonstrations are expected to resume on Saturday. Maduro, who took over for the late President Hugo Chávez in 2013, has cut off diplomatic relations with the U.S. in response to their recognition of Guaidó and ordered American diplomats to return home.
Trump Admin Hands Venezuela's US-Housed Bank Accounts Over To Guaido --The Trump Administration has handed control of Venezuela's bank accounts in the United States to Venezuelan opposition leader Juan Guaido, whom Washington and most Latin American countries have recognized as interim president. Backing Guaido are the United States, Brazil, Canada, Colombia, Argentina, Peru, Ecuador and Paraguay, while countries including Russia and China continue to recognize Maduro as Venezuela's president. The order to to turn over assets held in the Federal Reserve Bank of New York and federally insured banks was signed off on last week by Secretary of State Mike Pompeo, according to AFP. "This certification will help Venezuela's legitimate government safeguard those assets for the benefit of the Venezuelan people," said State Department spokesman Robert Palladino.In a Monday interview with CNN in Spanish, Guaido said that Venezuela's opposition-controlled congress had authorized a measure asking foreign nations to take measures that would ensure Maduro can't "loot" the country's roughly $8 billion in foreign reserves. To that end, the Bank of England last week denied Maduro's request to pull $1.2 billion of gold, which Guaido has asked to be put under his control. In a statement to British MPs, Sir Alan Duncan said the decision was a matter for the Bank and its governor, Mark Carney, and not the government. But he added:“It is they who have to make a decision on this, but no doubt when they do so they will take into account there are now a large number of countries across the world questioning the legitimacy of Nicolás Maduro and recognising that of Juan Guaidó.” Guaidó has already written to Theresa May asking for the funds to be sent to him.
Bolton Threatens to Send Venezuela’s Maduro to Guantanamo Bay Prison — National Security Adviser John Bolton—the neoconservative who’s played a key role in the Trump administration’s effort to overthrow the Venezuelan government—suggested on Friday that President Nicolás Maduro could find himself locked away in the U.S. military prison at the Guantánamo Bay Naval Station in Cuba if he does not soon step aside. Bolton—who has repeatedly threatened U.S. military action to force out Maduro—made the threat in a “crazy” radio interview (mp3) with right-wing commentator Hugh Hewitt about President Donald Trump’s broader policy toward Venezuela, including the administration’s endorsement of self-declared “Interim President” Juan Guaidó, and sanctions imposed via executive order against the state-owned oil company, Petroleos de Venezuela, S.A. (PdVSA). NSA John Bolton suggests Venezuelan President Nicolas Maduro could end up in Guantanamo. Also seems like the Trump administration is expecting tomorrow to be showdown day in Venezuela as protests expected nationwide. Crazy interview: https://t.co/3lnZEUj7ch — Eva Golinger (@evagolinger) February 1, 2019 According to the show’s official transcript, Bolton’s remarks came in response to a question about the various fates of other ousted heads of state: In a tweet on Thursday, Bolton had urged Maduro and his advisers to resign and accept Guaidó’s amnesty offer: I wish Nicolas Maduro and his top advisors a long, quiet retirement, living on a nice beach somewhere far from Venezuela. They should take advantage of President Guaido’s amnesty and move on. The sooner the better. — John Bolton (@AmbJohnBolton) January 31, 2019 Bolton’s comments were quickly highlighted on social media by critics, including journalist Jeremy Scahill, whose latest episode of the podcast Intercepted, published Wednesday, focused entirely on how the Trump administration “is openly engaging in a blatant effort to overthrow” Maduro. On Hugh Hewitt’s show, John Bolton suggested that Venezuelan president Maduro could be sent to Guantanamo https://t.co/5B85dU44CH pic.twitter.com/feivveWHRn — jeremy scahill (@jeremyscahill) February 1, 2019 “It is a campaign aimed at regime change and it’s being promoted openly as an opportunity to steal Venezuelan oil for the benefit of U.S. corporations,” Scahill noted on the podcast. “This is not some insane Twitter thought spewed by Trump after guzzling down gallons of Fox and Friends. It’s an open imperialism that is being embraced not just by Republicans and Trump supporters, but powerful Democrats as well.”
Twitter Bans 2,000 Pro-Maduro Accounts As Demands For Regime Change Escalate - On the evening before National Security Advisor John Bolton reiterated that "all options [including, presumably, military intervention] are on the table" regarding the situation in Venezuela, Twitter announced that it had joined the US-backed coup by taking down 2,000 accounts that it said were engaged in a "state-backed influence campaign", according to RT.In a blog post, Twitter said it removed 1,196 accounts located in Venezuela which it deemed to "appear to be engaged in a state-backed influence campaign targeting domestic audiences." The company also removed another 764 accounts, but said "we are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country." The purge was part of a crackdown on "foreign information operations", which also serves as a resource for researchers hoping to investigate these operations. In the post, Twitter announced that it was adding five new sets of account sets to its archive of foreign influence campaigns. Twitter has removed 764 accounts located in Venezuela. We are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country. Additionally, we have removed 1,196 accounts located in Venezuela which appear to be engaged in a state-backed influence campaign targeting domestic audiences. Abby Martin, host of YouTube series Empire Files, lamented that amid Twitter censorship of pro-government supporters, "pro-coup Venezuelans and right-wing exiles dominate the media sphere." While at least one independent journalist accused Twitter of acting as an "extension" of the US government.
Trump’s Coup in Venezuela: The Full Story - The US-sponsored coup in Venezuela, still ongoing as I write, is the latest chapter in the long and bloody history of US imperialism in Latin America. This basic fact, understood by most across the left of the political spectrum – including even the chattering liberal class which acknowledges this truth only with the passage of time and never in the moment – must undergird any analysis of the situation in Venezuela today. That is to say, the country is being targeted by the Yanqui Empire. This point is, or at least should be, indisputable irrespective of one’s opinions of Venezuelan President Maduro, the Socialist Party (PSUV), or the progress of the Bolivarian Revolution. Imperialism, and its neocolonial manifestation in the 21st Century, is there to pick clean the bones of the Bolivarian dream and return Venezuela to the role of subservient asset, an oil-soaked proxy state ruled by a right-wing satrap eager to please the colonial lords of capital. But in providing analysis of the situation, the Left must tread carefully with the knowledge that though it may be weak, disorganized, fragmented, and bitterly sectarian, the Left remains the principal vehicle for cogent analysis of imperialism and its machinations. This historic role that the Left has played, from Lenin and Mao to Hobsbawm and Chomsky, is of critical importance as analysis informs discourse which in turn ossifies into historical narrative. And with that weighty and historic responsibility, the Left is duty-bound to understand at a deep level what we’re witnessing in Venezuela. Moreover, the Left must beware the pitfalls of shallow, superficial analysis which can lead to poor understanding of material reality, and even poorer anti-imperialist politics.
The US’s “Economic Blockade” Paved the Way for Venezuela Coup Attempt – Democracy Now, transcript - Venezuela remains in a state of crisis as opposition forces — with the backing of the United States — attempt to unseat the government of Nicolás Maduro. On Thursday, Venezuelan Defense Minister Vladimir Padrino López said the military continues to stand by Maduro. His remarks came one day after President Trump announced that the US would recognize opposition leader Juan Guaidó as Venezuela’s new leader. Guaidó, the new head of Venezuela’s National Assembly, declared himself president on Wednesday during a large opposition protest. Meanwhile, Venezuelan President Nicolás Maduro has ordered the US to remove all of its diplomats from Venezuela, but Washington is ignoring the request, claiming Maduro no longer has authority to take such action. We speak to two long-term observers of Venezuelan politics: Venezuelan-born NYU professor Alejandro Velasco and Steve Ellner, who lives in Venezuela, where he taught for several decades.
Venezuela Coup Attempt Part of US Plan to Remake Latin America - Yves Smith - The Wall Street Journal has just published an important, disheartening story, U.S. Push to Oust Venezuela’s Maduro Marks First Shot in Plan to Reshape Latin America. The Trump Administration has apparently decided to embark on a large-scale interventionist campaign to reverse supposed undue influence of Russia, China, and Iran in Latin America. Venezuela and Cuba are the first targets, and Nicaragua is next on the list. John Bolton, in too obvious a nod to Bush’s “axis of evil” has called them the “troika of tyranny”. One would think the fact that our “remake the world in our image” plans worked out so well in the Middle East might curb US adventurism. And it isn’t just that we made a mess of Iraq, failed to break Iran, and failed to install new regimes in Afghanistan and Syria. The New American Century types are deep in denial that this geopolitical tussle not only cost the US greatly in terms of treasure, but it also wound up considerably enhancing Russia’s standing. Consider another bad outcome from US war-making in the Middle East: the rise of the radical right in Europe. American nation-breaking had produced a flood of refugees trying to enter Europe. In a misguided show of humanitarianism, European countries welcomed the over one million migrants that arrived in 2015, with the upsurge due mainly to the civil war in Syria. Angela Merkel in particular backed the idea of taking in the refugees, in part because German has a lower-than-replacement birth rate, and Syrian has a high level of public education. However, the EU members had patchy and generally poor programs for helping the migrants assimilate and find jobs. The result was what one hard core left wing political scientist who has spent a considerable amount of time in Germany calls “Merkelization”: a rise of nativist right wing parties like AfD in response to large-scale, poorly-managed migrant inflows. Consider how this tendency might play into US nation-breaking near our borer. Many readers have pointed out that the “caravans” from Central America are heavily populated with people from countries like Honduras that our tender ministrations have made much worse. My colleague was warning of Merkelization of the US even before the US launched its coup attempt, that it is one thing to have an immigration process that is generous towards asylum-seekers, and quite another to have open borders when political and economic conditions in countries to the South are unlikely to get better.
Venezuela’s oil and the geopolitics of the US-backed coup - The United States has steadily escalated its regime change operation in Venezuela, seeking to remove Venezuelan president Nicolas Maduro by means of a coup d’état driven by crippling economic sanctions tantamount to a state of war and the continuous threat of outright US military intervention.The aim is to install the US puppet, Juan Guaidó, who in December traveled to the United States to discuss the operation with the Trump Administration.Guaidó, an operative of Voluntad Popular, a right-wing party funded by the USAID and National Endowment for Democracy (NED) has bipartisan support from Democrats and the Republicans. He been presented in the media as a kind of freedom fighter and champion of democracy against Maduro, a dictator and force of evil. As Secretary of State Mike Pompeo stated in a speech last Saturday, warning other governments at the United Nations, “Either you stand with the forces of freedom, or you’re in league with Maduro and his mayhem.”Beneath Washington’s tired and hypocritical invocation of “freedom” and “democracy” lies the real motives for a coup that could quickly spiral into civil war and armed intervention.Venezuela has the largest proven oil reserves of any country in the world—several billion barrels more than Saudi Arabia. This valuable prize is not simply a source of profit, but a critical geopolitical piece in the growing conflict between the US and China—especially in light of growing fears that the oil markets could soon tighten. On Monday, the Trump Administration tried to stop the flow of oil revenues to the Maduro government by halting all US payments to the state-owned oil company, Petróleos de Venezuela (PDVSA). Venezuela sends 41 percent of its oil exports to the US and is heavily reliant on this trade for its revenue. Washington’s aims were nakedly expressed by National Security Adviser John Bolton who told Fox News on Monday that, with a successful coup, “It will make a big difference to the United States economically if we could have American oil companies really invest in and produce the oil capabilities in Venezuela.” For that to happen would require the reversal of Venezuela’s nationalization of its oil industry, which took place more than four decades ago—long before the advent of Maduro or his predecessor, Hugo Chávez—and the transformation of the country into an open semi-colony of US imperialism and Big Oil.
Marco Rubio’s strategy for winning influence over Trump on Venezuela - Since Trump came into office, Rubio, like many other Trump critics, has changed his tune. He now aggressively defends Trump on a range of issues including the investigation into his campaign’s ties with Russia, his crusade to build a wall on the U.S.-Mexico border, and his administration’s child-separation policy. Few senators are as focused on Latin America policy as Rubio, particularly U.S. policy toward Cuba, where his parents are from, and its client state and ideological ally Venezuela. And the senator has managed to carve out a uniquely influential role in this area. Beyond immigration issues, Trump expressed little interest in Latin America during his candidacy and even voiced some mild support for Barack Obama’s diplomatic opening with Cuba. But as president, he has rolled back much of that opening and taken an unexpectedly hard line against Nicolás Maduro’s government in Venezuela. This started early on: The New Yorker has reported that after taking office, Trump “offered his N.S.C. staff little guidance on Cuba, except to ‘make Rubio happy.’ ” (From Trump’s point of view, this may have less to do with Rubio’s own state of mind than the policy preferences of the Cuban American voters and growing population of Venezuelan American voters he represents in Florida.) And veteran Latin America watchers noted that the president appeared to have “outsourced” his Venezuela policy to the senator. A key moment in the evolution of that policy, reportedly, was a 2017 Oval Office meeting organized at the last minute by Rubio between Trump and Lilian Tintori, the wife of imprisoned Venezuelan opposition leader Leopoldo López. Shortly after the meeting, Trump, who is not typically known for his strong advocacy of human rights and democracy abroad, called on Maduro to release political prisoners and began ramping up sanctions pressure on senior Venezuelan officials.
Many Countries at UN Oppose Trump Interference in Venezuela (video & transcript) This Real News Network segment with Lawrence Wilkerson is a useful antidote to the impression much of the domestic media is trying to convey, that the US has broad-based support for its coup attempt in Venezuela.
CNN Goes ‘Undercover’ to Manufacture Consent for Coup Attempt in Venezuela — A CNN “exclusive” report from inside Venezuela aired multiple times on the network on January 28. It is a prime example of how influential media outlets in the U.S. effectively create propaganda for the opposition, which now is receiving funds from President Donald Trump’s administration. For the four-minute report, CNN correspondent Nick Paton Walsh went “undercover” amidst what the network described as the “deepening crisis in Venezuela” in order “to capture the desperation gripping the nation.”The segment highlighted hyperinflation at grocery chains, Venezuelans lined up in queues for fuel and food, particularly in Caracas, and opposition demonstrations on January 23, when opposition leader Juan Guaido declared himself president of the country.“This was the day when change was meant to come,” Walsh stated.It suggested President Nicolas Maduro’s government has given “handouts” to Venezuelans for years to buy their loyalty, but now “handouts” are no longer enough. Opponents like to equate social programs to “handouts” because corporate elites favor de-nationalization and privatization of services.Walsh interviewed a rank-and-file officer in the Venezuela military and granted him anonymity. The officer stated, “I would say 80 percent of soldiers are against the government. Some even go to demonstrations. But the big fishes, the senior officers, are the ones eating, getting rich while the bottom we have it hard.”Video showed the opposition throwing stones at a military airfield in a standoff that apparently has lasted “for months.” One part of the barricade was on fire. Sitting with his back against what appeared to be a concrete barricade, like he was part of the opposition hurling objects, Walsh declared, “They may be throwing stones here, but what they really need is the army to switch sides.” Walsh offered no comment on what it would mean for democracy in Venezuela if the military played an instrumental role in helping Guaido and a U.S.-led group of countries oust Maduro.
U.S. Government Seen as Most Corrupt in Seven Years - The U.S. plunged in an annual global corruption index as a surge in support for populist leaders and the erosion of democracy hobbled efforts to tackle graft around the world. The U.S. under President Donald Trump dropped six places to 22nd globally in the 2018 corruption-perception index published by the Berlin-based Transparency International. Denmark came in first, trading places with New Zealand, which was deemed least corrupt in 2017. The rise of nationalist leaders has led to deteriorating transparency when it comes to public finances, including via the dismantlement of checks and balances on power, according to the graft watchdog. It said examples include Turkey and Hungary, which in the last seven years have seen their corruption ratings plummet in line with worsening scorecards on democracy. “Our research makes a clear link between having a healthy democracy and successfully fighting public-sector corruption,” said Delia Ferreira Rubio, the chair of Transparency International. “Corruption is much more likely to flourish where democratic foundations are weak and, as we have seen in many countries, where undemocratic and populist politicians can use it to their advantage.” The U.S. registered its lowest score on the annual index in seven years. Transparency cited “threats to its system of checks and balances as well as an erosion of ethical norms at the highest levels of power.” Transparency International used 13 different data sources from 12 different institutions that capture perceptions of corruption within the past two years.
Trump’s Brilliant Strategy to Dismember U.S. Dollar Hegemony - Michael Hudson: The end of America’s unchallenged global economic dominance has arrived sooner than expected, thanks to the very same Neocons who gave the world the Iraq, Syria and the dirty wars in Latin America. Just as the Vietnam War drove the United States off gold by 1971, its sponsorship and funding of violent regime change wars against Venezuela and Syria – and threatening other countries with sanctions if they do not join this crusade – is now driving European and other nations to create their alternative financial institutions. This break has been building for quite some time, and was bound to occur. But who would have thought that Donald Trump would become the catalytic agent? No left-wing party, no socialist, anarchist or foreign nationalist leader anywhere in the world could have achieved what he is doing to break up the American Empire. The Deep State is reacting with shock at how this right-wing real estate grifter has been able to drive other countries to defend themselves by dismantling the U.S.-centered world order. To rub it in, he is using Bush and Reagan-era Neocon arsonists, John Bolton and now Elliott Abrams, to fan the flames in Venezuela. It is almost like a black political comedy. The world of international diplomacy is being turned inside-out. A world where there is no longer even a pretense that we might adhere to international norms, let alone laws or treaties. The Neocons who Trump has appointed are accomplishing what seemed unthinkable not long ago: Driving China and Russia together – the great nightmare of Henry Kissinger and Zbigniew Brzezinski. They also are driving Germany and other European countries into the Eurasian orbit, the “Heartland” nightmare of Halford Mackinder a century ago. The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world’s largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet. Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign policy. It defines “democracy” to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure, dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence, not democracy. A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls “internationalism” (meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest.
A simple chart shows the winners and losers from Trump’s trade war with China - As the trade conflict between the US and China rumbles on, winners and losers are starting to emerge from the conflict which has seen the two nations swap tariffs on more than $US200 billion of goods.This week alone, data showed trade in pork meat from the US to China plunged last year, and Volkswagen’s CEO warned that the trade war is hurting global demand for cars. While parts of both the Chinese and US economies have benefitted and seen setbacks, which international economies have been impacted by the trade war. The chart below, compiled by HSBC in a note about the German economy this week, shows the winners and the losers of the trade war so far. It looks at the large global economies that have seen imports to China grow the most in the face of tariffs on US goods.For instance, Brazil has seen exports to China jump as a result of the stopping of US soybean exports to China thanks to the trade war. China turned instead to Brazil for its oilseed, causing a major spike in Brazilian exports of the agricultural commodity. Russia has also seen a major benefit, filling the gap left behind in Chinese oil demand when US exports dried up. Prior to the imposition of tariffs, China accounted for more than 20% of US oil exports, but fell to practically zero after tariffs came into play, with Russia taking a large proportion of the slack.Beside the USA, Germany has suffered the most of any major economy. “Trade is leading the way down and dragged on growth in Q2 and Q3 2018,” HSBC’s team of analysts wrote.“Slower German export growth is unsurprising given a slowing in trade-weighted demand (ie global growth weighted by share of Germany’s trading partners).”
China Sends Vice Ministers to Washington to Pave Way for U.S. Talks A Chinese delegation including deputy ministers will arrive in Washington on Monday to prepare for high-level trade talks led by Vice Premier Liu He, according to people briefed on the matter. Vice Commerce Minister Wang Shouwen and Vice Finance Minister Liao Min will arrive in the U.S. on Jan 28, according to two of the people, who asked not to be named as the discussions aren’t public. China’s central bank governor Yi Gang will join the talks, one of the people said. It wasn’t immediately clear which other officials will attend.The U.S. has billed the Liu talks as “very, very important” while playing down the chances of a breakthrough. Liu will meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin from Jan. 30 to 31, with about five weeks remaining until a deadline for the U.S. to escalate tariffs on $200 billion of Chinese goods. The two sides do not appear close to agreement on a wide range ofdisputes, from China’s handling of intellectual property to the imbalance in goods flows between the two nations. China’s commerce, finance and foreign affairs ministries, as well as the central bank, didn’t immediately respond to faxed requests for comment on the trip. PBOC Governor Yi accompanied Liu for earlier trade talks in Washington in May, and was among Chinese officials who participated in negotiations with the U.S. in Beijing in June. The central bank oversees management of the yuan’s exchange rate, which U.S. Treasury Secretary Steven Mnuchin said Thursday is an important aspect of the trade talks. Unlike its counterparts in other nations, the PBOC isn’t independent. China’s cabinet, the State Council, oversees the central bank and as vice premier, Liu outranks Yi.
Anything other than a US-China trade deal 'wouldn't make sense,' energy executives say - An escalating trade war between the world's two largest economies would be nonsensical, according to executives from the liquefied natural gas (LNG) market. Oil giants and energy companies are increasingly interested in LNG — a form of natural gas chilled to liquid form — as governments around the world mandate using cleaner fuel than coal.A long-running trade conflict between the U.S. and China has battered business and consumer sentiment in recent months — with the LNG export industry particularly vulnerable.When asked whether the ongoing trade dispute was a danger to the LNG market, Lorenzo Simonelli, chief executive of Baker Hughes said: "I don't think so — It's early to say that and I think we're in a long game here.""It's going to play itself out. There are discussions this week and there will be more discussions. A project doesn't convert in just one month, so there is a long lead time for the actual projects to come into play,". The total number of U.S. LNG vessels that went to China in 2018 reportedly fell by around 20 percent when compared to the year previous, amid an intensifying trade war between Washington and Beijing.In total, 24 vessels went to China in 2018 — mostly during the first six months of the year — down from 30 in 2017, Reuters reported earlier this month. The next round of trade talks is scheduled to take place later this week, when Vice-Premier Liu He travels to meet U.S. officials in Washington.
U.S., China face deep trade, IP differences in high-level talks (Reuters) - The United States and China launch a critical round of trade talks on Wednesday amid deep differences over Washington’s demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 U.S. tariff hike. The two sides will meet next door to the White House in the highest-level talks since U.S. President Donald Trump and Chinese President Xi Jinping agreed a 90-day truce in their trade war in December. People familiar with the talks and trade experts watching them say that, so far, there has been little indication that Chinese officials are willing to address core U.S. demands to protect American intellectual property rights and end policies that Washington says force U.S. companies to transfer technology to Chinese firms. The U.S. complaints, along with accusations of Chinese cyber theft of U.S. trade secrets and a systematic campaign to acquire U.S. technology firms, were used by the Trump administration to justify punitive U.S. tariffs on $250 billion worth of Chinese imports. Trump has threatened to raise tariffs on $200 billion of goods to 25 percent from 10 percent on March 2 if an agreement cannot be reached. He has also threatened new tariffs on the remainder of Chinese goods shipped to the United States. “Clearly on the structural concerns, on forced technology transfer, there remains a significant gap if not a wide chasm between the two sides,” a person familiar with the talks told Reuters. Chinese officials deny that their policies coerce technology transfers. They have emphasized steps already taken, including reduced automotive tariffs and a draft foreign investment law that improves access for foreign firms and promises to outlaw “administrative means to force the transfer of technology.” China is fast-tracking that new law, with the country’s largely rubber-stamp parliament likely to approve it in March. A crucial component of any progress in the talks, according to top administration officials, is agreement on a mechanism to verify and “enforce” China’s follow-through on any reform pledges that it makes. This could maintain the threat of U.S. tariffs on Chinese goods long term.
Carrie Lam not optimistic US-China trade deal would be a lasting one - Hong Kong leader Carrie Lam Cheng Yuet-ngor has said that she is not optimistic that any trade deal between the United States and China will be a lasting one. Speaking on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland, the chief executive also voiced concern that Hong Kong would continue to be affected by the trade tensions between the two countries. China and the US are more than halfway through a 90-day trade war truce. Washington has said it will go ahead with a threat to increase duties if an agreement is not reached by March 1. In an interview with Bloomberg, Lam was asked whether she is optimistic that the two governments can strike a lasting deal. “I am a bit prudent and conservative. I think and I hope something positive would come up in the latest round … But I am not too optimistic about a lasting deal,” she said. Lam explained that in recent interactions with US officials and businessmen, she has had a general feeling that the problem was not one that recently surfaced because of trade deficits. “There are fundamental problems that have yet to be addressed. I doubt very much those fundamental problems could be addressed within a short period. So, let’s wait and see,” she added.
Trump Won't Accept Trade Deal Unless China Opens Market To Manufacturers, Bankers And Farmers - President Trump is on another tweeting tear Thursday morning, alternating between comments about the ongoing US-China trade talks and his push to convince a bipartisan group of lawmakers to strike a border security deal that includes funding for his promised border wall.After affirming earlier that a trade deal won't be struck this week because there won't be a "final deal" until Trump and President Xi can meet face to face (the WSJ reported that Trump will travel to China next month for the meeting), Trump followed up by insisting that a final deal will require China to open up its markets not only to US financial services firms, but to US "manufacturing, farmers and other US businesses and industries."Looking for China to open their Markets not only to Financial Services, which they are now doing, but also to our Manufacturing, Farmers and other U.S. businesses and industries. Without this a deal would be unacceptable!— Donald J. Trump (@realDonaldTrump) January 31, 2019He followed that up with a tweet affirming that the Pentagon will be sending more troops to the US border (something the Pentagon announced earlier this week). More troops being sent to the Southern Border to stop the attempted Invasion of Illegals, through large Caravans, into our Country. We have stopped the previous Caravans, and we will stop these also. With a Wall it would be soooo much easier and less expensive. Being Built.
Trump meets Chinese vice premier at White House - (Xinhua) -- U.S. President Donald Trump on Thursday met with Chinese Vice Premier Liu He at the White House, saying major progress was made in the latest round of U.S.-China trade talks.Liu, also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue, led the Chinese delegation for the two-day trade talks that concluded on Thursday in Washington.Liu delivered a message from Chinese President Xi Jinping to Trump, in which Xi pointed out that China-U.S. relations are at a critical stage.Xi said when he and Trump met in Argentina last December, the two heads of state agreed to jointly advance the China-U.S. relationship featuring coordination, cooperation and stability."According to the consensus we have reached, economic teams from both sides have since conducted intensive negotiations and achieved positive progress," said Xi.The Chinese leader said the two countries should, in the spirit of mutual respect and win-win cooperation, continue to try to meet each other half way and step up consultations, so as to reach a mutually beneficial agreement as early as possible.This, he said, will send a positive signal to the international community, promote the sound development of China-U.S. ties, and add impetus to the steady growth of the global economy.On the China-U.S. trade talks, the Chinese vice premier said that teams from both sides have spared no time in implementing the important consensus between the two heads of state. He noted that during the latest round of talks, the two sides held candid, specific and constructive discussions about issues of common concern, which included trade balance, technology transfer, protection of intellectual property rights and a two-way enforcement mechanism, as well as other issues of concern to the Chinese side. The talks made important progress for the current stage and laid foundation for further consultations at the next stage, said Liu.
No deal reached at US-China trade meeting --The two days of top-level talks between representatives of the Chinese government and the Trump administration on trade held in Washington this week have led to a commitment to hold further discussions but no concrete agreement.The new round of discussions will see a US team led by Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer travel to China in mid-February to engage with Chinese negotiators led by Vice Premier Liu He. The talks will take place just two weeks before the present deadline for an agreement expires on March 1, after which, if no deal is reached, the US has said it will lift tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent.During this week’s discussions there was some conjecture, in part fuelled by tweets from US President Trump, that the deadline could be extended.But a statement issued by the White House at the conclusion of the discussions said Trump had reiterated that the 90-day process agreed to in Buenos Aires was a “hard deadline” and the US will increase tariffs unless an outcome is reached.The main focus of the talks was not on increasing US exports to China but reducing the trade imbalance between the two countries. China has already agreed to undertake measures such as buying five million tons of soybeans from the US.The key issues concerned US demands for what it calls “structural reform” of the Chinese economy, centring on the protection of intellectual property rights, the cessation of forced technology transfers and the winding back of state subsidies for major industries that Washington claims are “market distorting.”These demands form a major sticking point because their essential content is that China subordinate its economic and technological future to the dictates and demands of the US.
Trump Still Unwilling To Make Tough Trade Offs With China After Talks Yield No Tangible Result - Two days of intense trade talks in Washington have yielded some progress...but not nearly as much as the Trump administration has let on. Looking past US Trade Rep Robert Lighthizer's post-hoc press conference, where he revealed that, during two days of intense discussions, the two sides had focused on US demands for structural reforms by Beijing (including ending the forced transfer of technology from US companies and reining in the use of industrial subsidies, two of the US's biggest asks), as well as the requirements for enforcement. But it doesn't appear that the US or China were in the mood to make any new commitments. No specific concessions had been made by Beijing. Instead, a US delegation led by Lighthizer and Mnuchin are planning to travel to Beijing after the Chinese New Year for another round of talks. And after that, President Trump - the "closer" in chief himself - is expected to meet Xi on the southern island of Hainan after the second summit with North Korean leader Kim Jong Un to seal the deal with President Xi. Trump told reporters in the Oval Office that "I think that probably the final deal will be made, if it’s made, between myself and President Xi." But he offered little in the way of anything concrete to justify why investors should be optimistic now. As China's Xinhua news agency reported, the two sides had "clarified the timetable and roadmap for the next consultation" after holding "frank, concrete and constructive" discussions on issues like technology transfers and IP protections. But though the two sides had "clarified the roadmap" toward a deal, it doesn't appear that any actual progress was made, despite Xi telling Trump in a letter delivered by the Chinese delegation that the "intensive consultations" had yielded "good progress," according to Bloomberg. And the US has continued to insist that if there isn't a deal by March 1, tariffs on $200 billion in Chinese goods will increase from 10% to 25%.
US Accuses Huawei of Stealing Trade Secrets, Defrauding Banks - U.S. prosecutors filed criminal charges against Huawei Technologies Co., China’s largest technology company, alleging it stole trade secrets from an American rival and committed bank fraud by violating sanctions against doing business with Iran. Huawei has been the target of a broad U.S. crackdown, including allegations it sold telecommunications equipment that could be used by China’s Communist Party for spying. The charges filed Monday also mark an escalation of tensions between the world’s two largest economies, which are mired in a trade war that has roiled markets. In a 13-count indictment in Brooklyn, New York, the government alleged Huawei, two affiliated companies and Chief Financial Officer Meng Wanzhou engaged in bank and wire fraud as well as conspiracy in connection with business in Iran. Separately, charges filed in Washington state accuse the company of stealing trade secrets from T-Mobile USA Inc. and offering bonuses to employees who succeeded in getting technology from rivals. The cases “expose Huawei’s brazen and persistent actions to exploit American companies and financial institutions, and to threaten the free and fair global marketplace,” Christopher Wray, director of the Federal Bureau of Investigation, said at a press conference in Washington announcing the charges. Separately, Canada’s justice department confirmed it received a formal request to extradite Meng to the U.S. Huawei issued a statement that it had done nothing wrong in either case. “The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of U.S. law set forth in each of the indictments, is not aware of any wrongdoing by Ms. Meng, and believes the U.S. courts will ultimately reach the same conclusion,” Huawei said in an email. The company also said it had attempted to open discussions with the U.S. Justice Dept., but the request was rejected. The Chinese government, which has defended the company and accused the U.S. of trying to curtail the rise of its technology industry, demanded Washington immediately revoke her arrest warrant..
America Pushes Allies to Fight Huawei in New Arms Race With China - NYT - Jeremy Hunt, the British foreign minister, arrived in Washington last week for a whirlwind of meetings dominated by a critical question: Should Britain risk its relationship with Beijing and agree to the Trump administration’s request to ban Huawei, China’s leading telecommunications producer, from building its next-generation computer and phone networks? Britain is not the only American ally feeling the heat. In Poland, officials are also under pressure from the United States to bar Huawei from building its fifth generation, or 5G, network. Trump officials suggested that future deployments of American troops — including the prospect of a permanent base labeled “Fort Trump” — could hinge on Poland’s decision. And a delegation of American officials showed up last spring in Germany, where most of Europe’s giant fiber-optic lines connect and Huawei wants to build the switches that make the system hum. Their message: Any economic benefit of using cheaper Chinese telecom equipment is outweighed by the security threat to the NATO alliance. Over the past year, the United States has embarked on a stealthy, occasionally threatening, global campaign to prevent Huawei and other Chinese firms from participating in the most dramatic remaking of the plumbing that controls the internet since it sputtered into being, in pieces, 35 years ago. The administration contends that the world is engaged in a new arms race — one that involves technology, rather than conventional weaponry, but poses just as much danger to America’s national security. In an age when the most powerful weapons, short of nuclear arms, are cyber-controlled, whichever country dominates 5G will gain an economic, intelligence and military edge for much of this century. The transition to 5G — already beginning in prototype systems in cities from Dallas to Atlanta — is likely to be more revolutionary than evolutionary. What consumers will notice first is that the network is faster — data should download almost instantly, even over cellphone networks.
Huawei Asks Suppliers To Move Production Out Of US- Nikkei - The sweeping indictment against Huawei and its CFO Meng Wanzhou unveiled by Acting Attorney General Matthew Whitaker on Monday has elevated the feud between the US and the world's largest telecoms equipment provider (and second largest maker of smartphones) to absurd new heights. And while officials from Huawei and Beijing have denounced the charges as anti-competitive and "politically motivated", Huawei is apparently already bracing for the other shoe to drop: According to a report by Nikkei, the tech giant has asked suppliers to consider moving some of their production outside the US in case the Congress of the DOJ adopt a ban on American-made parts being sold to the chipmaker. With the memory of the near-demise of ZTE still fresh in its memory, the company has made the request based on the expectation that an order of a full-scale ban on semiconductors and other critical equipment by President Trump is imminent. The companies asked including Taiwan's ASE Technology Holding, King Yuan Electronics and Taiwan Semiconductors, among others.In a bid to minimize this risk, Huawei has informed suppliers such as Taiwan's ASE Technology Holding and King Yuan Electronics, its top chip packaging and testing providers, that it wants to relocate most production to sites in mainland China, industry sources told the Nikkei Asian Review.Huawei has also talked with Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker, about moving some chip production to a site in the Chinese city of Nanjing, sources told Nikkei. Notably, Huawei shares many of the same suppliers as Apple Inc. And the uncertainties that have been introduced by the US's campaign against the telecoms giant have made it virtually impossible for some of these companies to adequately assemble their business plans for the coming year.
The Silicon Curtain: The Gloves Come Off With China - naked capitalism - Yves here. Even though the US has been restricting the use of Chinese technology since 2012, and Obama’s failed Trans-Pacific Partnership was an effort to isolate China, the Trump Administration has dialed up the power struggle with China to pretty close to open conflict. The criminal suits against Huawei unsealed this week look more like yet another provocation of a too-easily provoked China than significant measures, but the Trump Administration may also like the appearance of the US continuing to be on the offensive. It is worth noting that the Trump Administration, whose leadership ranks are largely populated by opportunists and ideologues who are normally kept well away from decision-making, along with some billionaires who fail to recognize that they’ve been promoted to their level of incompetence, has a skilled team on its China campaign. Even card-carrying Trump opponent George Soros praised the Trump initiative and was concerned it might not go far enough. But if you accept that the US has to wean itself of reliance on Chinese technology, particularly advanced technology, because spying, that means the US would have to launch a massive effort to rebuild skills and bring production of key components back to the US. This would take even more effort than in the Sputnik era, where the US was still the world’s dominant manufacturer. But the US is allergic to industrial policy (except by default, to preferred sectors like arms makers, housing, health care and higher education). As Lambert pointed out by e-mail: We’ve already lost Asia. Apple is fucked, and the United States is fucked. To unfuck ourselves, it will take mobilization of a World War II-level scale and scope. Better talk to all the old machinists before they die (which is like Y2K, when all the old COBOL greybeards came in from the golf course, except harder culturally, because who wants to talk to filthy proles). No, military Keynesianism won’t do it, because it will just reinforce everything that’s wrong in the first place. I’m featuring the MacroBusiness post below, which originally had the headline, The mask falls from Chinese tyranny. It gives an idea of the degree of unhappiness in Australia over the way Australian officials have enabled China throwing its weight around domestically, as well as, Chinese purchases of real estate distorting the already-bubbly Australian housing market.
Armed Services Committee Chairman Warns US And China Headed For World War III - Given that China's President Xi Jinping started the year by obliquely warning the US to stay out of Taiwan's business, perhaps it's not surprising that Senators are starting to join US military commanders in warning Americans not to underestimate the threat posed by China's unprecedented military buildup in the Pacific.In the latest - and perhaps the most stark - warning to date, Senator James Inhofe of Oklahoma - who recently took over as the Chairman of the Senate Armed Services Committee - warned during a hearing about the challenges posed by China and Russia on Tuesday that people need to better understand the threats both countries pose to the international world order that America helped create, according to the Military Times. America has stood idly by as China has built airstrips and military bases out of a series of rocky atolls in the Spratley Archipelago, preparing to flex its military muscle in the Pacific. China's increasingly aggressive behavior was on display last fall when a Chinese Navy ship nearly rammed the USS Decatur while it was carrying out a "freedom of operation" mission.While the U.S. military has a presence in and around the South China Sea and the larger western Pacific Ocean, Inhofe said America largely watched China lay claim to its rocks and islets before turning other reefs into fortifications, brimming with arms and stockpiled with materiel. Beijing’s ongoing expansion into the Spratly archipelago agitates neighboring nations and continues to challenge international law, an assertiveness the U.S. Navy attempts to check through routine freedom of navigation operations, or FONOPs. The days of absolute military dominance in the South China Sea have ended, Inhofe said. But strangely, many Americans don't seem to understand the magnitude of this shift - or its implications. With its One Belt, One Road initiative, debt diplomacy and other efforts, China has managed to pull some of the US's traditional allies away from its orbit, and closer to Beijing.“It’s like you’re preparing for World War III,” Inhofe said. "You’re talking to our allies over there and you wonder whose side they’re going to be on."Inhofe and other senators, as well as experts who testified before the committee, noted that the urgency of the Chinese threat against America and today’s world order may not be fully appreciated by U.S. citizens. "I’m concerned our message is not getting across,"
Trump Warns Europeans Not to Defy US Sanctions Against Iran — With reports that the European Union is close to establishing its trade vehicle for facilitating trade with Iran, the Trump Administration has issued a statement warning them not to defy the US sanctions in any way.The US reimposed sanctions on Iran after withdrawing from the P5+1 nuclear deal. EU nations did not withdraw from the deal, and companies are still allowed to trade with Iran. This, however, is difficult because US sanctions are scaring most banks away.The EU solution is a clearing house for the trades, which allow companies to pay for Iranian goods, and Iran to pay EU companies for services, without any money crossing borders, cutting the banks out of it.US officials are threatening stiff fines and penalties if the plan goes forward. Sen. Tom Cotton (R-AR) says the choice is between doing business with Iran or the US. The EU, however, is betting that the US cannot afford to simply cut off Europe entirely over Iran.
Trump Looks Set to Lock Horns With Europe Over Iran Nuclear Deal - — The Trump administration is apparently exasperated at the European Union’s bid to bypass US sanctions on Iran. Infuriated by the EU’s effort to save the Joint Comprehensive Plan of Action (JCPA) agreed in 2015 when Barack Obama was in the White House, Washington has threatened to punish any efforts seeking to circumvent the sanctions.The US government is said to be putting the Europeans on notice, saying that if they try to bypass the sanctions on Iran, they will be subject to stiff fines and penalties. A senior Trump administration official who spoke on condition of anonymity about EU efforts to set up an alternative payment method to allow trade with the Iranians told the Associated Press that the US “will fully enforce its sanctions and hold individuals and entities accountable for undermining them.”European leaders, however, are unfazed by the threats and are said to be marching forward with the plan, which, if implemented, could further strain trans-Atlantic relations. AP reported that a spokeswoman for EU foreign policy chief Federica Mogherini said that preparations for the alternative system are “at an advanced stage.” The EU is working on an initiative that will enable payments from companies that want to trade with Iran and offer protection from US penalties. According to Bloomberg, the proposal could be presented as early as today. EU government envoys are said to be discussing the “three nation initiative” in Brussels and looking into the “positive impact on trade and economic relations with Iran.” A statement is expected soon.
Project Fear Comes To DC- Coats Contradicts Trump, Says ISIS 'Very Likely' To Attack US -- As is tradition, Director of National Intelligence Dan Coats appeared before the Senate Intelligence Committee on Tuesday to present the "Worldwide Threat Assessment of the Intelligence Community" (readers can find the full report here).And what a hearing it was: While reviewing the contents of the report, Coats generated a flurry of unnerving headlines, including the perceived risk that ISIS is planning an attack on the US, that North Korea "is unlikely to give up its nuclear weapons and production capabilities" and that Russia and China "are more aligned against the US than at any point in decades." Many of these headlines countered the official security narrative from the Trump administration.His remarks about North Korea directly contradict the Trump administration's official position, and come at an inopportune time, with Trump preparing for a second summit meeting with North Korean leader Kim Jong Un in Vietnam next month.He also contradicted Trump on ISIS, arguing that "while ISIS is nearing territorial defeat...the group has returned to its guerilla warfare roots while continuing to plot attacks and direct its supporters worldwide. ISIS is intent on resurging and still commands thousands of fighters." He added that the group is "very likely" to attack the US "at any time." Trump has argued that ISIS is in ruins after losing "99%" of its territory and has cited this as justification for pulling US troops out of Syria.
Trump blasts intel chiefs as 'passive and naive' - President Trump on Wednesday blasted top intelligence leaders for being "wrong" about their new assessment on Iran's nuclear developments. "The Intelligence people seem to be extremely passive and naive when it comes to the dangers of Iran. They are wrong!" Trump tweeted Wednesday morning in a pair of tweets. The president, who claimed Iran has recently tested rockets, also mocked the intelligence leaders in his administration, suggesting they "should go back to school." The two tweets came a day after Director of National Intelligence Dan Coats and CIA Director Gina Haspel offered testimony before the Senate Intelligence Committee that seemed to contradict things the president has said. Coats testified that the intelligence community found that Iran is not currently seeking to develop its nuclear weapons capabilities, basing his remarks on an intelligence assessment. “We continue to assess that Iran is not currently undertaking the key nuclear weapons-development activities we judge necessary to produce a nuclear device,” the assessment reads. The assessment warns that Iranian officials are threatening to begin building up the country’s nuclear capabilities if Tehran “does not gain the tangible trade and investment benefits it expected” from the Joint Comprehensive Plan of Action, an Obama-era deal that Trump withdrew the U.S. from last year. The president, who bashed the agreement as “the worst deal ever” and “defective at its core,” claimed that if the deal remained in place, Iran “will be on the cusp of acquiring the world’s most dangerous weapons.” The officials also contradicted Trump on several other issues, testifying that ISIS remains a threat to the United States despite Trump's repeated comments that they have been defeated. And Coats said the intelligence community believes North Korea won't be willing to fully denuclearize because nuclear weapons are viewed as key to the state's survival — a statement that undermines Trump's previous claims that Pyongyang is "no longer a nuclear threat."
The Threat That the US Can’t Ignore- Itself - AT ITS ANNUAL worldwide threat assessment hearing on Tuesday, top national security officials gave the Senate Intelligence Committee a rundown from top intelligence officials of the dangers the United States will face in 2019 and beyond. The adversaries were familiar, with China,Russia, North Korea, and Iran mentioned alongside evolving situations like Brexit and the power struggle in Venezuela. But if any common theme emerged, it's the number of assessments the officials shared that seem to directly contradict positions touted by the Trump administration. That tension hinted at another threat, one that didn't come up directly in Tuesday's hearing but appeared prominently in a report last week from director of national intelligence Dan Coats: That various recent actions by the United States may be undermining its own security. That report, the "National Intelligence Strategy," usually has both a public and classified version. But this year, ODNI elected to create only one public document in an effort, Coats said in remarks announcing the report, to promote transparency about intelligence community activities and goals. While similar in many ways to the Worldwide Threat Assessment ODNI released alongside Tuesday's Senate hearing, last week's NIS took more direct aim at the abstract, yet fundamental threat of a shifting geopolitical order. "Traditional adversaries will continue attempts to gain and assert influence, taking advantage of changing conditions in the international environment—including the weakening of the post-WWII international order and dominance of Western democratic ideals, increasingly isolationist tendencies in the West, and shifts in the global economy," last week's report said. This simple statement can also be read as a bombshell, articulating a trend that most politicians would be wary of admitting publicly. That isolationism stems in large part from Trump; his trade war with China has caused ripples in the global economy. But in Tuesday's Senate testimony, intelligence officials including Coats, NSA director Paul Nakasone, CIA director Gina Haspel, and FBI director Christopher Wray brought none of that up directly.
Report: Saudi Arabia Has Systematically Helped Saudi Felons To Flee The United States -- There is a disturbing account in The Oregonian/OregonLive that raises a long-standing issue that few people want to talk about in Washington: the long record of Saudi Arabia in violating our laws and helping felons flee the country before trial or sentencing. The article addresses just a few cases but it is a problem nationwide as Saudi Arabian nationals kill or injure Americans only to have the government help the culprits post bond and then flee. For example, Abdulrahman Ali Al-Plaies was accused of killing a 79-year-old woman in the center of Xenia, Ohio, a small Ohio town. Just days before trial, the Saudis allegedly sent a military officer to whisk him away. The article discussed several cases The Oregonian/OregonLive recently uncovered in Oregon. From rape to murder, American victims have been shoved aside by Saudi officials who are accused of systematically violating U.S. laws to guarantee that Saudi citizens remain above the law. Other countries have complained of similar cases, particularly involving Saudi royal family members accused of crimes from murder to rape to unpaid bills. Al-Plaises was 27 years old and a Central State University student when he plowed his car into the back of an Oldsmobile Cutlass at 60 mph, thrusting it 110 feet. The Buick then T-boned a pickup carrying a mother and her two small children. A grand jury indicted him on charges of involuntary manslaughter and his bail was set at $50,000. However, the bail was mysteriously cut in half and he claimed that his passport could not be turned in because he lost it. Al-Plaies pleaded not guilty by reason of insanity. He claimed he had been on a religious fast for two weeks before the crash, drinking only water. His defense attorney told The Oregonian/OregonLive, “All you got to do is read the news and you’ll see decisions are made between us and the Saudi government with bigger implications than what happened in our little county in Ohio.”The implications for the grieving family of course could not be “bigger.” Their loss was simply dismissed and forgotten in the wake of another Saudi fleeing justice with the help of our close Middle Eastern ally.
Scheer: The Illegal CIA Operation That Brought Us 9/11 - Was it conspiracy or idiocy that led to the failure of U.S. intelligence agencies to detect and prevent the Sept. 11, 2001, attacks on the World Trade Center and Pentagon headquarters? That’s one of the questions at the heart of “The Watchdogs Didn’t Bark: The CIA, NSA, and the Crimes of the War on Terror,” by John Duffy and Ray Nowosielski. In their careful and thorough investigation of the events leading up to the attacks, the authors uncover a story about the Central Intelligence Agency’s neglect, possible criminal activities and a cover-up that may have allowed al-Qaida to carry out its plans uninhibited by government officials. In the latest installment of “Scheer Intelligence,” the journalists tell Truthdig Editor in Chief Robert Scheer how an interview with Richard Clarke, the counterterror adviser to Presidents Bill Clinton and George W. Bush, led them to a jaw-dropping revelation regarding two hijackers involved in the infamous attacks. As it turns out, Khalid Muhammad Abdallah al-Mihdhar and Nawaf al-Hazmi, two men linked to al-Qaida, were staying at an FBI informant’s home in San Diego in 2000, and they were being tracked by the National Security Agency. Despite knowledge of the men’s ties to the terrorist organization responsible for 9/11, neither was investigated by the FBI. Clarke and others believe that this may have had to do with a CIA attempt to turn the two men into agency informants.“When we sat down with Clarke … he told us he couldn’t see any other explanation but that there was an op [and] that it never made it to the White House because it would have had to go through him,” says Nowosielski.“And his friend [then CIA Director] George Tenet was responsible for malfeasance and misfeasance in the runup to 9/11.”Once the plans for the 9/11 attack must have become clear to the CIA, why didn’t the agency prevent it from taking place? Duffy and Nowosielski come to the simple, shocking conclusion that because the CIA is prohibited from operating on U.S. soil, those involved in the operation chose to avoid prosecution rather than come clean. In a well-documented case study that touches senior government officials, including current special counsel Robert Mueller and other high-level individuals, crucial questions arise about who is responsible for allowing “a plot that resulted in 3,000 murders” and led to ongoing U.S. military entanglements in the Middle East to move forward.
McConnell to rebut Trump on Syria, Afghanistan drawdown - Senate Majority Leader Mitch McConnell (R-Ky.) is poised to use a foreign policy bill to break with President Trump, saying on Tuesday that he will offer an amendment that would warn against a "precipitous withdrawal" of troops from either Syria or Afghanistan. McConnell, speaking from the Senate floor, said his proposal would "acknowledge the plain fact" that al Qaeda, the Islamic State in Iraq and Syria and their affiliates "pose a serious threat to us here in home." “It would recognize the danger of a precipitous withdrawal from either conflict and highlight the need for diplomatic engagement and political solutions to the underlying conflicts in Syria and Afghanistan," McConnell said. McConnell hadn't formally filed the amendment as of early Tuesday afternoon. But arguing that the U.S. government had seen the "downsides" of announcing that the U.S. military will "be gone on a certain date," McConnell is using the amendment to urge Trump to maintain a footprint in both nations. "My amendment would also urge continued commitment from the U.S. military and our partners until we have set the conditions for the enduring defeat of these vile terrorists," he said. "We are the leader of the free world, and it’s incumbent upon the United Stares to lead, to maintain a global coalition against terror and to stand with our partners engaged in a daily fight against terrorists," McConnell continued. McConnell's amendment comes after a Syria policy bill overcame an initial hurdle on Monday evening. Though the underlying bill doesn't speak directly to the U.S. military's involvement in Syria, senators are expected to offer amendments to address the issue after Trump's decision last month to withdraw U.S. troops set off alarm bells on Capitol Hill.
GOP poised to rebuke Trump - Frustrated Republicans say it’s time for the Senate to reclaim more power over foreign policy and are planning to move a measure Thursday that would be a stunning rebuke to a president of their own party. GOP lawmakers are deeply concerned over President Trump’s reluctance to listen to his senior military and intelligence advisers, fearing it could erode national security. They say the Senate has lost too much of its constitutional power over shaping the nation’s foreign policy and argue that it’s time to begin clawing some of it back. “Power over foreign policy has shifted to the executive branch over the last 30 years. Many of us in the Senate want to start taking it back,” said a Republican senator closely allied with Senate Majority Leader Mitch McConnell (R-Ky.). They plan to send Trump a stern admonishment by voting Thursday afternoon on an amendment sponsored by McConnell warning “the precipitous withdrawal” of U.S. forces from Syria and Afghanistan “could put at risk hard-won gains and United States national security.” The resolution also expresses a sense of the Senate that the Islamic State in Iraq and Syria (ISIS) and al Qaeda pose a “continuing threat to the homeland and our allies” and maintain an “ability to operate in Syria and Afghanistan.” It’s a pointed rebuttal to the claim Trump made on Twitter in December that “we have defeated ISIS in Syria.” Speaking on the Senate floor, McConnell said his amendment “simply re-emphasizes the expertise and counsel offered by experts who have served presidents of both parties,” a subtle rebuff of Trump’s tweets from earlier in the day mocking his intelligence advisers as “naive.” Trump stunned Republican senators Wednesday by lashing out at Director of National Intelligence Dan Coats and CIA Director Gina Haspel after they contradicted some of his optimistic claims about the threats posed by North Korea and ISIS. The senior intelligence officials also angered Trump by testifying that Iran is in compliance with the nuclear treaty it signed with Western powers under the Obama administration. Trump tweeted “the Intelligence people seem to be extremely passive and naive when it comes to the dangers of Iran. They are wrong!” The president added in a follow-up tweet about Iran: “Perhaps Intelligence should go back to school!” Trump appeared to be responding to television news coverage that focused on how the testimony contradicted his views on global threats. Exasperated Republican lawmakers quickly pushed back against the criticism, urging the president to show more restraint. “I don’t know how many times you can say this, but I would prefer that the president stay off Twitter, particularly with regard to these important national security issues where you’ve got people who are experts and have the background and are professionals,” said Senate Republican Whip John Thune (S.D.). “In most cases I think he ought to, when it comes to their judgment, take it into consideration.”
Senate Vote Opposes Ending US Wars in Syria and Afghanistan — In a surprising vote Thursday, the Senate voted 68-23 to pass a resolution from Majority Leader Mitch McConnell (R-KY) expressing opposition to President Trump’s plan to withdraw US troops from Syria, and expressing opposition to any theoretical pullout from Afghanistan that might result from a negotiated deal to end that war.The non-binding resolution was passed with overwhelming support from the Republican majority, setting them squarely against parts of President Trump’s foreign policy. A number of Democrats who voted against it expressed concern that it was tantamount to a vote advocating a state of permanent war.Which it realistically is. The 2001 authorization for the Afghan War was built around 9/11 and the defeat of al-Qaeda. Neither are hugely relevant issues in 2019 Afghanistan, and a peace treaty being negotiated centers heavily around the Taliban promising to keep al-Qaeda and ISIS out of the country in the future. Congress never actually authorized the war in Syria at all, dodging that obligation repeatedly because of political concerns. President Obama invaded Syria unilaterally to “fight ISIS,” and President Trump has declared ISIS effectively defeated now that they have virtually no territory left. Leaving Syria has become a political hot-button issue for many hawks, who argue variously that either ISIS isn’t defeated, that the US should transition the Syria War to fighting Iran, or that the US should transition the Syria War into permanently protecting the Syrian Kurdish groups the US was aligned with against Turkey. Within the administration, a number of hawks oppose leaving Syria just because the broad assumption was that the US would always be there.
Trump Should Call Congress’s Bluff on Our Endless Wars -- Democrats and Republicans closed ranks Thursday behind two wars President Donald Trump has proposed winding down as the Senate voted 68-23 to advance a resolution warning against “precipitous withdrawal” from Afghanistan and Syria. Afghanistan is now the longest war in U.S. history, making any withdrawal seem anything but “precipitous.” Syria hasn’t even been authorized by Congress. In both cases, our men and women in the armed forces have already achieved the goals that are militarily attainable. “It doesn’t get much more pathetic,” Congressman Justin Amash, a Michigan Republican, said of the Senate vote.The resolution is non-binding, like the Democrats’ toothless measures to stop George W. Bush’s Iraq “surge” over a decade ago. Still, taken at face value, it inverts Congress’s constitutional war powers by allowing lawmakers to shirk their power to declare war while frustrating presidential efforts to pursue peace. When Trump twice bombed Syria without congressional approval, the Beltway applauded. Trump’s call late last year to bring troops home from both war-torn countries elicited bipartisan criticism and the abrupt resignation of Pentagon chief James Mattis. To make matters worse, only three Republican senators—Ted Cruz of Texas, John Kennedy of Louisiana, and Mike Lee of Utah—voted to stand with their president against these endless nation-building exercises. Kentucky’s Rand Paul, who was not present for the vote, would surely have been a fourth. Even Chuck Schumer, the third straight Senate Democratic leader to have voted for the Iraq war, opposed this anti-withdrawal amendment. During the State of the Union address on Tuesday night, Trump should call Congress’s bluff. He should dare legislators to do their jobs and vote to authorize continuing these wars—or he will end them. Put the onus on the House and Senate to fulfill their constitutional duties.
Trump Scores Major Victory As Delinquent NATO Members Boost Contributions By $100 Billion -- NATO states have agreed to increase their defense spending by $100 billion over two years after President Trump went on a fiery tirade last July - calling on "delinquent" countries to boost their contributions by 2% to 4% of GDP. According to NATO Secretary General Jens Stoltenberg, the alliance heard Trump's call "loud and clear" and that member nations are "stepping up," according to the Telegraph. In conciliatory comments apparently designed to smooth over repeated public criticism of other alliance members by the US leader, Mr Stoltenberg said member states had agreed to add $100 billion to defence budgets over the next two years. Mr Trump has repeatedly complained that other members of Nato do not meet their spending commitments, including a blistering tirade at the NATO summit in Brussels in July in which called other member governments "delinquent." –Telegraph What good is NATO if Germany is paying Russia billions of dollars for gas and energy? Why are there only 5 out of 29 countries that have met their commitment? The U.S. is paying for Europe’s protection, then loses billions on Trade. Must pay 2% of GDP IMMEDIATELY, not by 2025. — Donald J. Trump (@realDonaldTrump) July 11, 2018 "President Trump has been very clear. He is committed to NATO… but at the same time he has clearly stated that NATO allies need to invest more," said Stoltenberg. "So we see some real money and real results, and we see that a clear message from President Trump is having an impact. NATO allies have heard the president loud and clear. NATO allies are stepping up." "What he’s doing is to help us adapt the alliance, which we need," he added. "This is a clear message to Russia and I think they see that."
Trump ordered 15,000 new border and immigration officers — but got thousands of vacancies instead - Two years after President Trump signed orders to hire 15,000 new border agents and immigration officers, the administration has spent tens of millions of dollars in the effort — but has thousands more vacancies than when it began.In a sign of the difficulties, Customs and Border Protection allocated $60.7 million to Accenture Federal Services, a management consulting firm, as part of a $297-million contract to recruit, vet and hire 7,500 border officers over five years, but the company has produced only 33 new hires so far. The president’s promised hiring surge steadily lost ground even as he publicly hammered away at the need for stiffer border security, warned of a looming migrant invasion and shut down parts of the government for five weeks over his demands for $5.7 billion from Congress for a border wall.The Border Patrol gained a total of 120 agents in 2018, the first net gain in five years.But the agency has come nowhere close to adding more than 2,700 agents annually, the rate that Kevin McAleenan, commissioner of Customs and Border Protection, has said is necessary to meet Trump’s mandated 26,370 border agents by the end of 2021.“The hiring surge has not begun,” the inspector general’s office at the Department of Homeland Security concluded last November.“We have had ongoing difficulties with regards to hiring levels to meet our operational needs,” a Homeland Security official told The Times on Saturday, speaking on condition of anonymity. He described the Border Patrol’s gain last year as a “a huge improvement.” Border security agencies long have faced challenges with recruitment and retention of front-line federal law enforcement — in particular Border Patrol agents — much less swiftly hiring 15,000 more.In March 2017, McAleenan said Customs and Border Protection normally loses about 1,380 agents a year as agents retire, quit for better-paying jobs or move. Just filling that hole each year has strained resources. Beyond that, given historically low illegal immigration on the southern border, even the Homeland Security inspector general has questioned the need for the surge.
US delays returning asylum seekers to Mexico - The United States has delayed its plan to send asylum seekers back to Mexico while their claims are processed, as the Mexican government said Friday it "disagrees" with the policy. US and Mexican officials had said President Donald Trump's controversial "Remain in Mexico" policy would be put into effect Friday at noon with the return of 20 Central Americans at the San Ysidro border crossing between San Diego, California and the Mexican city of Tijuana. However, no asylum seekers had been sent back by Friday evening, said an AFP correspondent at the border, and Mexican authorities said the program had been delayed. A Mexican immigration official in Tijuana, speaking on condition of anonymity, said the first returns had been pushed back, possibly to Monday or later. "These are migrants who have a court date with a judge (to seek asylum), which means US authorities have accepted that their lives could actually be in danger. If anything happens to them in Mexico, their families could sue the US government for failing to protect them." Earlier, foreign ministry spokesman Roberto Velasco said the Mexican government was not happy with the new policy, but would accept the migrants for "humanitarian" reasons. "The Mexican government disagrees with the unilateral measure implemented by the United States government. However... we reiterate our commitment to migrants and human rights,"
Immigrants subjected to nasal force-feeding at ICE detention center - The US Immigration and Customs Enforcement is force-feeding immigrants held in a detention center in Texas, using brutal torture against at least ten men engaged in a hunger strike against their prolonged confinement and mistreatment. The men, mainly Sikhs from the Punjab region of India, are being force-fed either through plastic nasal tubes or intravenous lines, inserted several times a day. At least 30 men are participating in the hunger strike, include some from Cuba as well as the majority from India.Force-feeding through nasal tubes is a method of torture, used at the Guantanamo Bay detention camp and other CIA-run secret prisons overseas, which has been condemned by international human rights groups. The American Medical Association bars its members from participating in such mistreatment. So long as the hunger striker is making a conscious and reasoned decision to refuse food, the AMA guidelines say, a medical doctor should respect their right to do so.Democratic Party politicians who are making a show of opposition to Trump’s demands for a wall on the US-Mexico border have nothing to say about the brutal treatment of immigrants and asylum seekers in ICE detention centers that has provoked the hunger strikes and other protests. On the contrary: the legislation now being discussed in a House-Senate conference committee would provide billions more for ICE to expand the American gulag.The detainees, held at the ICE El Paso Service Processing Center in the west Texas city, have asked immigration advocates visiting them in detention to make their struggle known to the public. The hunger strike was first reported Thursday morning by the Associated Press.
U.S. applies visa sanctions on Ghana - The Department of Homeland Security (DHS) of the United States has announced the implementation of visa sanctions on Ghana. In a release dated January 31, 2019, the DHS explained that the sanctions are as a result of Ghana’s failure to accept its nationals that have been removed from the U.S. “Ghana has failed to live up to its obligations under international law to accept the return of its nationals ordered removed from the United States,” Secretary of Homeland Security Kirstjen Nielsen is quoted in the release. “The United States routinely cooperates with foreign governments in documenting and accepting U.S. citizens when asked, as appropriate, as do the majority of countries in the world, but Ghana has failed to do so in this case. We hope the Ghanaian government will work with us to reconcile these deficiencies quickly,” the Secretary of Homeland Security added.
The Supreme Court may kill Roe v. Wade as soon as this week - Lawyers representing a Louisiana abortion clinic and at least two physicians filed an application in the Supreme Court on Monday asking the court to halt a Louisiana law that is identical to a Texas law the justices struck down in 2016.The court is almost certain to deny this application in a 5-4 vote — possibly as soon as tonight. When it does so, it will effectively mark the end of Roe v. Wade.Yes, the court is very unlikely to hand down an opinion this week which uses the words “Roe v. Wade is overruled.” But these abortion providers filed this application because a federal appeals court openly defied the Supreme Court’s most recent abortion decision. When the court refuses to enforce its own decision, that will send a clear signal to lower court judges throughout the country that they are free to uphold restrictions on abortion.The case is June Medical Services v. Gee.Gee involves a Louisiana law requiring “a physician performing or inducing an abortion” to “have active admitting privileges at a hospital that is located not further than thirty miles from the location at which the abortion is performed or induced and that provides obstetrical or gynecological health care services.” If that law sounds familiar, that’s because it is identical, almost word-for-word, to a Texas law that the Supreme Court struck down in Whole Woman’s Health v. Hellerstedt. Whole Woman’s Health was a 5-3 decision, however, and the Supreme Court now looks very different than the court that struck down the Texas law in 2016.
US House Commerce Committee Accuses FCC of Collusion With Big Wireless on 5G Roll Out — On January 24, Frank Pallone, Chairman of the U.S. House Commerce Committee, sent a letter to the Federal Communications Commission asking for copies of communications between the FCC and the corporations involved in the current roll out of 5th Generation (5g) cellular technology. The UK Register reports that Pallone’s letter seems to indicate that the Commerce Committee has spoken with a whistleblower. “It has come to our attention that certain individuals at the FCC may have urged companies to challenge the order the Commission adopted in order to game the judicial lottery procedure and intimated the agency would look unfavorably towards entities that were not helpful,” the letter reads. Pallone does not elaborate on the source of his information. His letter claims that persons within the FCC put “pressure” on the “Big Wireless” telecommunications corporations, encouraging them to challenge a 5g-related rule in order to prevent it from ending up in a courtroom where it would likely be overturned. The goal, Pallone alleges, was to move the legal challenge out of the state of California to a more friendly judicial environment. The Register notes that all four mobile operators challenged this rule with their own lawsuits. The lawsuits claimed that the 5g rule was insufficient and should have included provisions which would allow automatic approval of new cell sites once application timelines were finished. The companies argued that they would be forced to waste time and money in court if local authorities missed application deadlines. This move baffled onlookers because the FCC order already benefited Big Wireless in the form of billions of dollars. The companies filed their lawsuits in four different districts before they were ultimately consolidated into one case and moved to the Tenth Circuit, which covers cases in Utah, Oklahoma, New Mexico, Colorado, Kansas, and Wyoming.
New Net Neutrality Bill Headed To Congress -Today, Sen. Ed Markey (D-MA) said he would “soon” introduce a bill to permanently reinstate the net neutrality rules that were repealed by the Federal Communications Commission, led by chairman Ajit Pai, in 2017.Markey’s announcement comes as a federal court is set to hear oral arguments over the FCC’s repeal of net neutrality regulations in 2017. Markey, who is a member of the Senate Commerce Committee, has previously introduced a bill that would permanently reinstate net neutrality as a member of the House of Representatives, although the measure ultimately failed. It’s unclear when the bill would be formally introduced, but Markey said it was imminent. “We will soon lay down a legislative marker in the Senate in support of net neutrality to show the American people that we are on their side in overwhelming supporting a free and open internet.”
McConnell blasts House bill that makes Election Day a federal holiday -- Senate Majority Leader Mitch McConnell (R-Ky.) on Wednesday blasted a key House Democratic proposal over a provision that would make Election Day a federal holiday. “This is the Democrat plan to restore democracy? A brand-new week of paid vacation for every federal employee who would like to hover around while you cast your ballot?” McConnell asked from the Senate floor. “Just what America needs, another paid holiday and a bunch of government workers being paid to go out and work for I assume ... our colleagues on the other side, on their campaigns,” McConnell added. McConnell has repeatedly lashed out at House Democrats' anti-corruption bill, known as H.R. 1, as a “political power grab” and has pledged that it will go nowhere in the GOP-controlled Senate. McConnell, on Wednesday, criticized the bill as the “Democratic political protection act” and that it would create a “Washington-based taxpayer-subsidized clearinghouse for political campaign funding.” The package, which is considered a signature issue for House Democrats, includes legislation that makes Election Day a holiday for federal employees. It also encourages private business to give employees the day off.
No correlation between top tax rates and growth rates -- Jared Bernstein --In a piece in WaPo today, I note in passing that there’s no persistent correlation between top tax rates and growth rates across the US time series, nor in oft-cited international data from Saez et al. This is widely understood among empirical public finance folks, but just in case, here are a few figures. As Krugman did the other day, I’m using top marginal income tax rates and 10-year, annualized growth rates of real GDP per capita. First, as Paul’s figure suggests, here’s a scatterplot that looks pretty random. One can, of course, plunk a regression line in there, and it has the “wrong” slope (higher rates associated with faster growth). To be clear, I neither think nor claim that higher top rates lead to faster growth (though such a case is sometimes made). These are just correlations. More on that in a moment. In fact, 2o-year rolling correlations have a little something for everyone, which again, shows the absence of any systematic relationship supporting the high-top-rates-kill-growth story. These are very simplistic ways to look at this, not at all dispositive. However, deeper looks yield similar results. Moreover, I wouldn’t dismiss the simple correlations. My experience in this sort of work is that if the correlations aren’t there at this level over long time periods, you often–not always, of course–have torture the data to find them. In they are there, then you must check to see if the correlation is a function of a statistical problem (e.g., serial correlation) or a missing control variable. But if they’re not, it’s often telling you the argument that they are is going to be a heavy lift, very possibly involving more confirmation bias than honest analysis.
Elizabeth Warren wasn’t the first candidate to propose a wealth tax. Trump was. A brash political candidate forms a presidential exploratory committee. Almost immediately, the candidate announces a controversial policy: a wealth tax on the ultrarich.Just 1½ pages long, the proposal is met with some cheers but lots of jeers — about its constitutionality, feasibility, fairness. Right-wing pundits bemoan the appeal to class warfare.That candidate?Donald Trump, in 1999, pursuing the Reform Party nomination. Everything old is new again. Last week, Sen. Elizabeth Warren (D-Mass.), now exploring a presidential run, proposed her own wealth tax. Warren’s proposal is constructed differently than Trump’s was — his was a one-time levy, hers is annual — but the reception has been similar. The case for such a tax has only grown stronger over time, even if the way Warren goes about it could stand to be improved.Over several decades, U.S. policies have facilitated a systematic upward redistribution of wealth. Congress has slashed taxes overall, but especially on the rich; reduced or eliminated brackets that applied only to the tippy-top income percentiles, making the tax code less progressive at the top; neutered the estate tax; cut rates on long-term capital gains; added “Inception”-like loopholes within loopholes, which disproportionately benefit taxpayers with the sophistication and resources to game the system; and gutted the Internal Revenue Service, which catches these tax dodgers. All of these choices — and they were deliberate choices — helped the richest households to accumulate more wealth and make that wealth more persistent across generations. They have also contributed to the government’s growing revenue shortfall. As Willie Sutton could tell you, if you want to patch deficits, go where the money is — increasingly, at the very top.
Jamie Dimon Has No Problem Paying Higher Taxes... There Is Just One Catch -- In a moment of rare generosity, JP Morgan CEO Jamie Dimon, who got into hot water for his Davos comment that his "heart is Democratic but my brain is kind of Republican" said he has "no problem" paying higher taxes, as long as government spends that money wisely.In a statement to CNBC, Dimon said “I believe that individuals earning the most can afford to pay more, and I have no problem paying higher taxes to address some of the fundamental challenges and inequities in our society.” The full statement is below:He added, “However, we need to ensure that our tax dollars are going where they can be most effective — like expanding the earned income tax credit and other programs that support the people and communities who really need it.” His comments came amid an ongoing debate about whether the wealthiest Americans should shoulder higher taxes, a proposal supported by newly elected Rep. Alexandria Ocasio-Cortez of New York and established Sen. Elizabeth Warren of Massachusetts, both Democrats, with a tentative proposal floated that those who make over $10 million should pay a 70% tax.And while we applaud Dimon's faux generosity, we can't help but note that for billionaires - like Jamie Dimon - their wealth is not in current income, but in their accumulated assets, most of which happen to be financial and benefiting directly from the Fed's easy money policies, such as what Powell just unveiled moments ago when he surprised the market by announcing the Fed may adjust its balance sheet shrinkage. As such, we wonder if Dimon, or Buffett, or other "progressives" who are eager to participate in forced wealth redistribution would be just as enthusiastic if instead of having to pay 70% taxes on current income, the government hiked the tax on capital gains - which is where the bulk of billionaire wealth is to be found - to 70%. Somehow we have a feeling that billionaire euphoria for that proposal would be far more muted, and we wonder how long before the Democrat Socialists realize that taxing current income will do nothing to redistribute wealth and instead they should target accumulated wealth. Since it often these same billionaires who provide the "financial advice" to progressives, we wouldn't be holding our breath.
Democratic attacks on AOC expose the party’s fear of taking on moneyed interests - WaPo. Matt Stoller - It’s not just right-wingers that are driven crazy by Rep. Alexandria Ocasio-Cortez (D-N.Y.), the firebrand newcomer to national politics: Some of the Democratic lawmaker’s colleagues in her own party view her with suspicion. Their criticisms, however, offer a window into how a failure to take on concentrated power — while pretending to do so — has warped Democratic culture. Take an article published in Politico this month, which featured a series of on-the-record attacks on AOC, as she has become known. Some lawmakers bristled in particular at her willingness to openly criticize other Democrats. “I’m sure Ms. Cortez means well, but there’s almost an outstanding rule: Don’t attack your own people,” said Rep. Emanuel Cleaver II (D-Mo.). Another subtle put-down — nicely encapsulating what voters hate about Washington — came from Nydia M. Velázquez (D-N.Y.): “Washington is a political animal where a lot of the work that you want to accomplish depends on relationships within the Democratic Caucus.” Calls for party unity might seem to be oriented around ensuring Democrats can most effectively attack President Trump. The truth is they more often serve to protect powerful financial interests. This becomes obvious when you look into the record of the man whom Ocasio-Cortez defeated in the primary, Joseph Crowley, who portrayed himself as progressive and a good Democrat while taking money from Goldman Sachs, Facebook, Google, BlackRock and a surfeit of other well-heeled interests. Crowley was such an effective channel for political money that, had he not lost his primary, he was on track to become speaker of the House. What’s more, Democrats like Crowley shape the culture on the Hill by operating as quasi-human resources outfits, offering and vetting staff for new members — staff who likewise bend to moneyed interests. After Crowley lost, he fittingly became one of the biggest prospective hires for lobbying outfits.
Meadows Tells Ocasio-Cortez Congress Isn’t Just `Eating Bonbons - A leading House conservative backer of President Donald Trump decided to let freshman Democratic Representative Alexandria Ocasio-Cortez know that lawmakers are busy, and “we’re not just sitting around eating bonbons.” Freedom Caucus Chairman Mark Meadows spoke up Tuesday during the first meeting of the newly Democratic-controlled House Committee on Oversight and Reform -- his first joint appearance with Ocasio-Cortez, one of Congress’s newest, most liberal members. The Oversight panel will lead House Democratic investigations of the Trump administration, and partisan tensions are expected. But before the meeting, Meadows of North Carolina made a point of cordially welcoming Ocasio-Cortez of New York and other freshman Democrats. Soon, though, Meadows and other Republicans were telling Chairman Elijah Cummings of Maryland that members should get more than three days’ notice to attend questioning of witnesses by Democratic staff lawyers. Meadows said five days was better, particularly for lawmakers who live far from Washington. Ocasio-Cortez wasted no time in offering her first remarks on the committee. “I don’t believe we need five days” if lawmakers are doing their jobs, she responded. Meadows wasn’t going to let that go. Formally directing his remarks to Cummings, he responded: “Mr. Chairman, I can tell you on all of this at this particular point, we’re all wanting to cooperate.” But he said, “Sometimes our schedules, you know, we’re not just sitting around eating bonbons, waiting for the call of anybody.” Ocasio-Cortez then asked Cummings whether Republicans gave members ample notice for such matters during the last congressional session, when they ran the committee. “No,” said Cummings, of Maryland. “OK, thank you,” said Ocasio-Cortez.
'Democrats Can Stop This': Ahead of Fourth Vote, Senate Pressured to Defeat 'Unconstitutional' Attack on Right to Protest - With the GOP-controlled Senate set to vote Monday evening on legislation that would hand states more power to punish companies and individuals that participate in pro-Palestinian boycotts of Israel, rights groups urged people to contact their representatives and pressure them to block the "unconstitutional" legislation for the fourth time. "Today at 5:30pm [ET] the Senate is voting on a bill promoting state laws that suppress the right to boycott Israel—even though multiple judges have found such laws to be unconstitutional," the ACLU declared in a tweet. "It's up to us to tell our senators: Hands off the right to boycott."Targeting key Democratic senators directly on Twitter, MoveOn.org asked: "What's one of the first things the Senate will vote on after finally opening the government?" Answer: Undermining the First Amendment right to protest by penalizing those participating in the Boycott, Divestment, Sanctions [BDS] movement. No Senate Democrats should vote for this," the group wrote. "There's no 'compromise' that can come out of Republicans trying to sign away our rights. Any legislation that seeks to penalize or criminalize BDS participation is an attack on free speech and peaceful protest." Sponsored by Sen. Marco Rubio (R-Fla.) and officially titled the Strengthening America's Security in the Middle East Act, Senate Bill 1 (S.1) is a package of legislation that includes the Combatting BDS Act, a bill that would give states and localities more legal authority to punish companies and individuals who engage in boycotts of Israel.As Common Dreams reported, most Senate Democrats aligned against S.1 earlier this month, arguing that the Senate should not be pursuing any business unrelated to ending the government shutdown. Just four Democratic senators broke with their party to end cloture on the measure despite the shutdown: Bob Menendez (N.J.), Joe Manchin (W.Va.), Doug Jones (Ala.), and Kyrsten Sinema (Ariz.).But now that the government has reopened—for now, at least—rights groups are alarmed that Senate Democrats who voted to block S.1 during the shutdown will flip their votes to "yes" because they support the contents of the legislation.
After Four Votes, Senate Passes Unconstitutional Anti-Boycott Bill -- It’s very unusual for a piece of legislation to fail and then be quickly reconsidered. It’s even more rare for a bill to receive four votes in just a span of weeks. Yet, yesterday the Senate considered for the fourth time S1, which contains the Combating BDS Act. In the past, cloture votes on the bill had failed on three occasions. However, while some Democrats attacked the bill for violating the First Amendment, the most common objection was that the Senate should not vote on any bills until the government was reopened. With the government presently reopened the bill Senate voted to advance the bill 74 to 19. The bill faces an uncertain future in the House of Representatives. The Combating BDS Act gives states “permission” to pass laws that deny contracts to those who boycott Israel. In recent years, supporters of Palestinian human rights have increasingly turned to boycotts, divestment, and sanctions (BDS) against Israel. Such political boycotts are constitutionally protected speech. Yet, 26 states have enacted laws that penalize such boycotts. The Combating BDS Act is designed to insulate these laws from a challenge that these state laws are preempted by federal law. While a number of lawsuits have been brought against anti-BDS law, so far not a single one has been based on the doctrine of preemption. Instead, they have challenged these laws on First Amendment grounds. And there is nothing the Congress can do to authorize states to violate the First Amendment.
Pelosi Aghast – Stone Indictment Proves That Trump Campaign Deliberately Campaigned For Trump -- On Friday Roger Stone, a political consultant who in 2016 publicly supported the Trump campaign, was arrested on criminal charges filed by special counsel Robert Mueller. He has since been released on bail. Stone is indicted (pdf) in five cases for making false statements, one attempt of influencing a witness and an obstruction of a proceeding. Since May 2017 the former FBI chief Mueller investigates an alleged collusion between Trump, his campaign and something Russian with regards to the 2016 election. No evidence has been produced so far that substantiate any such collusion. The people who fanatically claim that there must have been such a connection are now disappointed. The long awaited Stone indictment was one of their last straws. But there is absolutely nothing in it that hints at any collusion. All these alleged crimes were committed in relation to an appearance of Stone before a House Permanent Select Committee on Intelligence (HPSCI) investigation. During the 2016 election Stone publicly claimed that he was in direct communication with Wikileaks and its editor Julian Assange. Steve Bannon, then part of the Trump campaign, asked Stone to ask Wikileaks at what time it would release new batches of emails that had been obtained from the Democratic National Committee. The Trump campaign was naturally interested in using these releases to attack the competing candidate Hillary Clinton. Wikileaks and Assange denied that they had any relations or communications with Roger Stone. It later turned out that Stone had two contact persons, the New Yorker comedian Randy Credico and the conservative writer Jerome Corsi, who he MIGHT have had some contact or insight into Wikileaks. The indictment says nothing about their relations to Wikileaks. During his appearance in front of the HPSCI Stone misremembered, contradicted or lied about several details related to his earlier false claim. He also asked Randy Credico to lie to the committee. Those are the only issues the indictment is about. It is about the lies of a notorious liar which became process crimes when he repeated them during an investigation. Stone himself denies emphatically that he committed any crime and promises to defend himself in court. Nowhere does the indictment say that this has anything to do with the Trump campaign, Russia, Wikileaks or the not existing relations between them.But some media will not tell you that. The New York Times falsely headlines: Indicting Roger Stone, Mueller Shows Link Between Trump Campaign and WikiLeaks.
Stone indictment presents no evidence of links between WikiLeaks and Trump campaign -The indictment of right-wing political operative Roger Stone by special counsel and former FBI director Robert Mueller presented no evidence of “collusion” by WikiLeaks and its publisher Julian Assange with either the Trump campaign or Russian intelligence, after more than 17 months of investigation.The indictment of Stone, dated January 24, 2019, is at the same time a damning indictment of all those in the political establishment and the media—particularly the Guardian and Washington Post—who have taken part in the slanderous attempt to tarnish WikiLeaks and Assange as “agents” of Russia and Trump.The Stone indictment revealed nothing that was not already known regarding WikiLeaks, which it called “Organization 1.” It has simply underscored that WikiLeaks is a media organization which exercised the legally protected rights of the press under the First Amendment and the Supreme Court decision in the 1971 Pentagon Papers case. A media organization is entitled to publish information in the public interest, even if the source obtained it illegally.Sometime in 2016, unknown sources provided WikiLeaks with emails that had been taken from the servers of the Democratic National Committee (DNC) and from the personal email account of John Podesta, the chairperson of Hillary Clinton’s campaign for the Democratic Party presidential nomination.Mueller’s indictment stated: “By in or around June or July 2016, STONE informed senior Trump Campaign officials that he had information indicating Organization 1 had documents whose release would be damaging to the Clinton Campaign.”To obtain this “information,” all Stone and the Trump campaign needed to do was read the news. On June 12, 2016, Julian Assange stated, in an interview with British ITV’s “Peston on Sunday,” that WikiLeaks had emails linked to Hillary Clinton and would be publishing them. By this point, the DNC and Podesta had publicly claimed that their servers had been hacked, so it was not a mystery as to what “emails” Assange indicated WikiLeaks had in its possession.
Trump ally Stone pleads not guilty to Russia probe charges (Reuters) - President Donald Trump’s longtime political ally Roger Stone pleaded not guilty on Tuesday to charges that he tried to obstruct a congressional investigation into allegations that Russia meddled in the 2016 presidential election. Stone, a self-proclaimed “dirty trickster” and Republican political operative for decades, pleaded not guilty in a federal court in Washington, D.C., to lying to Congress, obstructing an official proceeding and witness tampering. He is the latest member of Trump’s inner circle charged in Special Counsel Robert Mueller’s Russia investigation and could face about 50 years in prison if found guilty on all the charges, although he is unlikely to receive such a harsh sentence, sentencing experts say. Prosecutors say Stone, 66, lied to investigators for the House of Representatives Intelligence Committee who were looking into allegations that Russia hacked the emails of senior Democrats. The indictment against Stone also says he told members of Trump’s 2016 presidential campaign that he had advance knowledge of plans by the WikiLeaks website to release damaging emails about Trump’s Democratic opponent in 2016, Hillary Clinton. U.S. intelligence agencies say the emails were stolen by Russia. Stone, a Republican operative since the days of the Watergate scandal that forced President Richard Nixon to resign in 1974, has been a friend and ally of Trump for some 40 years. Usually exuberant, Stone clenched his jaws as he sat quietly waiting for the judge in the courtroom. He then responded to the judge’s questions with courteous, clipped answers. Outside after the hearing, Stone flashed the twin “V for Victory” signs that Nixon was famous for but did not address the media. A small group of protesters waved Russian flags and a placard that said “Dirty Traitor” while his supporters called for Mueller to be fired.
Roger Stone Discovery Is ‘Voluminous and Complex,’ Mueller Team Says --The universe of potential evidence against President Donald Trump confidante Roger Stone, accused of obstruction of justice and other crimes in a special counsel's case in Washington, includes "terabytes of electronic records and data," federal prosecutors told a judge Thursday. Stone's defense lawyers and the prosecution team, including lawyers working for Special Counsel Robert Mueller III, agreed to designate the case as "complex." The move eliminates any demand from Stone that he be brought to trial quickly.The government's lawyers said they will soon begin to provide Stone's defense team "voluminous and complex" records as part of the discovery process. Stone, arrested last week at his home in Florida, is charged with lying to Congress and attempting to obstruct its investigation of Russia's interference in the 2016 presidential election. Stone has pleaded not guilty.The discovery in the case against Stone includes "Apple iCloud accounts and email accounts, bank and financial records, and the contents of numerous physical devices (e.g., cellular phones, computers, and hard drives)," prosecutors said in their court filing. "The communications contained in the iCloud accounts, email accounts, and physical devices span several years." FBI agents are still reviewing electronic devices seized from Stone's Fort Lauderdale, Florida, home during a pre-dawn raid last week. That review includes an assessment of whether any messages or other communication will be off limits to prosecutors based on attorney-client privilege. The prosecution team includes assistant U.S. attorneys Jonathan Kravis and Michael Marando, and prosecutors Jeannie Rhee and Aaron Zelinsky, both of whom are working under Special Counsel Robert Mueller III. Marando and Kravis have prosecuted public-corruption charges in Washington. Kravis is a former clerk to Justice Stephen Breyer and Judge Merrick Garland on the U.S. Court of Appeals for the D.C. Circuit.
Mueller Accuses Roger Stone of Lying and Bullying—but Not Collusion -Veteran Republican operative and self-proclaimed “dirty trickster” Roger Stone has played a central role in the Russiagate saga as a suspected intermediary between the Trump campaign and WikiLeaks. Stone sparked that speculation in August 2016 by publicly claiming to have “back-channel communication” with WikiLeaks founder Julian Assange and inside information about Assange’s releases of stolen Democratic Party e-mails. Stone has since retracted his claims, and WikiLeaks has steadfastly denied that it ever associated with him. Special counsel Robert Mueller’s new indictment of Stone does not allege otherwise, and gives us more reasons to doubt the innuendo that Stone himself caused. Mueller does not accuse Stone of having any WikiLeaks ties or advanced knowledge of its publications. Instead, he charges Stone with false statements, obstruction, and witness tampering during the House Intelligence Committee’s efforts to determine what he actually knew (Stone has pleaded not guilty). Stone allegedly misled the committee about his communications with the far-right conspiracy theorist Jerome Corsi, as well as the leftist radio-host and comedian Randy Credico. He is also accused of trying to intimidate Credico into not contradicting his statements. Stone enlisted Corsi and Credico throughout the 2016 campaign to help him discover WikiLeaks’ plans, and pass messages to Assange. Both Corsi and Credico deny having any secret contacts with WikiLeaks or pre-knowledge of its publications, and Mueller does not refute these claims. Instead, we learn that Credico even implored Stone, in text messages, to “be honest w fbi … there was no back channel.” Stone responded by threatening Credico and his therapy dog. Mueller does not contradict Credico’s claim of “no back channel.” On June 12, Assange announced that he planned to release “upcoming leaks in relation to Hillary Clinton”; two days later, the DNC announced that its servers had been hacked. Mueller strongly suggests that at that point Stone “informed senior Trump Campaign officials” that he had information about WikiLeaks’ material on Clinton. After WikiLeaks released the first tranche of DNC e-mails on July 22, Mueller reports that a senior Trump Campaign official was directed to contact STONE about any additional releases and what other damaging information [Wikileaks] had regarding the Clinton Campaign. STONE thereafter told the Trump Campaign about potential future releases of damaging material by [Wikileaks].
Americans support investigating Trump, but many are skeptical that inquiries will be fair, new poll finds - WaPo - The American people have mixed feelings about investigating President Trump, with clear majorities wanting newly empowered Democrats to dig into his personal finances and foreign ties but most believing that Congress should not begin impeachment proceedings, according to a new Washington Post-ABC News poll.The public’s cautiousness extends to its expectations for the forthcoming report from special counsel Robert S. Mueller III, who has been examining ties between Russia and Trump’s 2016 campaign. Half of Americans report they have “just some” confidence or none at all that the Mueller report will be fair and evenhanded, and 43 percent say they have at least a good amount of confidence in its fairness.The survey was conducted Monday to Thursday, the day before Mueller’s team unveiled criminal charges against longtime Trump friend Roger Stone, accusing the political operative of lying, obstruction and witness tampering.The poll results underscore the complex calculation ahead for Democrats and their new House leader, Speaker Nancy Pelosi (Calif.), as they balance calls from core supporters to aggressively investigate and possibly even impeach Trump against the potential political backlash from other voters.The impeachment question has gained attention in the days since the Democrats’ House majority was sworn in, with party leaders insisting they will wait to consider their options until after Mueller finishes his work and Trump declaring, “You can’t impeach somebody that’s doing a great job.” Six in 10 adults support the party using its congressional authority to obtain and release Trump’s tax returns, the survey shows. Similar majorities support Democrats investigating suspected financial ties between Trump and foreign governments, the president’s relationship and communications with Russian President Vladimir Putin, as well as possible collusion in the 2016 campaign. And yet a 46 percent plurality suspect Democrats will “go too far” in their inquiries of Trump, while just over one-third think they will handle it about right.
Acting AG- Mueller probe is ‘close to being completed’ - Acting attorney general Matthew Whitaker said Monday that special counsel Robert Mueller’s probe is “close to being completed.”Whitaker told reporters at a press conference that he has been “fully briefed on the investigation.”“I hope that we can get the report from Director Mueller as soon as possible,” he said. President Trump and Republican allies for months have called for a conclusion to the investigation into possible collusion between the Trump campaign and Russia during the 2016 election; the president has repeatedly attacked the effort as a "witch hunt."The comments by Whitaker come days after longtime Trump ally Roger Stone was indicted as part of Mueller's probe. The indictment alleges that Stone made false statements, engaged in witness tampering and interfered with a congressional investigation.The indictment, unsealed on Friday, claims that Trump campaign staff were directed to ask Stone what documents WikiLeaks had in its possession that could be damaging to the Clinton campaign. WikiLeaks distributed stolen Democratic emails in the lead-up to the 2016 presidential election, which Mueller has alleged were hacked by Russian military officers.The White House has said the charges have "nothing to do" with the president. Stone has denied the allegations and is promising to fight the indictment in court.Mueller has indicted several Trump campaign officials in the course of his probe since he was appointed in May 2017, including former Trump campaign head Paul Manafort and former national security adviser Michael Flynn.Whitaker also made his comments amid speculation over whether the public will be able to review the full contents of Mueller's report when the probe is concluded. William Barr, Trump's nominee for attorney general, declined to commit to releasing the full report during his confirmation hearing earlier this month. He said he would have to follow Department of Justice guidelines in determining how the report is released.
Records show Trump Jr's calls ahead of Trump Tower meeting weren't with father: report --Senate investigators have reportedly obtained records showing that Donald Trump Jr.'s phone calls ahead of the 2016 Trump Tower meeting were not with his father, as Democrats have long suspected. CNN reported Thursday citing three sources with knowledge of the matter that records obtained by the Senate Intelligence Committee show Trump Jr. was speaking with two business associates.The network said it had not confirmed the identity of the associates or the content of the calls. The associates were not named in the report, which said the information about the blocked number emerged recently.Senate Intelligence Committee Chairman Richard Burr (R-N.C.) and Vice Chairman Mark Warner (D-Va.) both declined to comment on CNN's report to The Hill.Democrats have long suspected that Trump Jr. had been on the phone with then-candidate Donald Trump before the meeting with Jared Kushner, then-campaign chairman Paul Manafort and a Russian lawyer promising compromising information on Democratic presidential nominee Hillary Clinton.CNN reported that the records obtained by the Senate panel could provide some answers to the question of whether President Trumphimself had any advance knowledge of the meeting at Trump Tower.Those involved in the meeting with Russian lawyer Natalia Veselnitskaya have said it did not bear fruit related to dirt on Clinton, Trump's then-Democratic rival, and instead largely centered on American adoptions of Russian children. Veselnitskaya was charged with an attempt to block a federal investigation into money laundering in an unrelated case earlier this month.
Russians leaked Mueller investigation evidence online, prosecutors say -- Evidence gathered by Robert Mueller, the special counsel, was obtained by Russians and leaked online in an attempt to discredit his inquiry into Moscow’s interference in US politics, prosecutors said on Wednesday. A court filing by Mueller’s office said more than 1,000 files that it shared confidentially with attorneys for indicted Russian hackers later appeared to have been uploaded to a filesharing site and promoted by a Twitter account. “We’ve got access to the Special Counsel Mueller’s probe database as we hacked Russian server with info from the Russian troll case,” a tweet from the account said. “You can view all the files Mueller had about the IRA and Russian collusion. Enjoy the reading!” The tweet was posted in October last year by the account @HackingRedstone, according to the filing. A reporter was also offered leaked material via a direct message the same day. The account has since been removed from Twitter. Mueller’s court filing on Wednesday said the names and structure of folders containing the leaked files matched those used by Mueller’s office when it shared the data, and that these had not been made public. The prosecutors said the filesharing site had confirmed to the FBI that the account which posted the material was registered from an IP address in Russia. FBI investigators had found no evidence that government servers holding the data had been hacked, according to Mueller’s team, pointing instead to a leak on the Russian side.
Mueller asked Trump campaign about ties to NRA- CNN Special counsel Robert Mueller's office is reportedly probing the Trump campaign's relationship with the National Rifle Association (NRA) in the run-up to the 2016 election. Former Trump campaign aide Sam Nunberg told CNN on Tuesday that Mueller's team of investigators was looking into the circumstances that led to Donald Trump speaking at the group's annual convention in 2015 prior to announcing his bid for the presidency."When I was interviewed by the special counsel's office, I was asked about the Trump campaign and our dealings with the NRA," Nunberg told the outlet.A spokesperson for the special counsel's office declined to comment to CNN. The NRA did not immediately return a request for comment from The Hill.CNN reported Tuesday that Mueller's team was probing the organization as early as February 2018, when Nunberg sat for an interview with the special counsel's office.President Trump was not pressed on a possible connection with the NRA in written questions sent to him by Mueller's team, a source told CNN.Trump spoke at the group's national convention in Tennessee in 2015, clinching the gun rights group's endorsement in May 2016. The group spent more than $30 million to support his candidacy, the outlet noted.The NRA has come under scrutiny for its connections to Russian nationals. Questions about the group's potential contacts with Russia were raised last year after Maria Butina, a Russian woman and gun rights activist arrested and charged with acting as an unregistered agent of the Russian government in the U.S., pleaded guilty last month to engaging in conspiracy against the U.S. Butina admitted in the District Court for the District of Columbia that she and an American, known in court documents as "U.S. Person 1," conspired with and acted under the direction of a Russian government official to establish unofficial lines of communications with people able to influence U.S. politics leading up to the 2016 presidential election.
Judge abruptly cancels ex-Trump campaign chief Paul Manafort's sentencing in Virginia case - A federal judge Monday canceled former Trump campaign chief Paul Manafort's sentencing in his Virginia case, which was scheduled for Feb. 8, according to a filing.U.S. District Judge T.S. Ellis wrote that Manafort's "current dispute" in a separate federal case in Washington, D.C., makes it "prudent and appropriate to delay sentencing in this case."Mueller's team had previously aimed to delay Manafort's sentencing in Virginia until the special counsel determined that he had finished cooperating with special counsel Robert Mueller's investigators. A spokesman for Mueller declined CNBC's request for comment on Ellis' court filing. Manafort, 69, had pleaded guilty in the D.C. case, and had agreed to cooperate with Mueller as part of his ongoing probe of Russia's election meddling and possible collusion with the Trump campaign.But the plea deal collapsed after the Mueller's team accused Manafort of repeatedly lying in breach of that agreement.Both the D.C. and Virginia cases were based on charges lodged byMueller. Manafort's charges were largely related to work he performed for a pro-Russia political party in Ukraine years before joining then-candidate Donald Trump's 2016 presidential bid.Manafort had been found guilty in the Virginia federal court of eight criminal counts, including tax fraud, bank fraud and failing to file foreign bank account reports. Ten additional criminal counts were deadlocked by the jury. Mueller had later accused Manafort in the D.C. case of breaking his plea deal by telling multiple lies — some related to Konstantin Kilimnik, whom Mueller has alleged holds "ties to a Russian intelligence service and had such ties in 2016."
The Single Stupidest Argument In The Entire Stupid Salad Of Russiagate - Caitlin Johnstone - The other day Hawaii congresswoman and Democratic presidential candidate Tulsi Gabbard came out with what remains the strongest rejection of the Trump administration’s regime change interventionism in Venezuela out of anyone likely to run for the presidency in 2020.“The United States needs to stay out of Venezuela,” Gabbard tweeted. “Let the Venezuelan people determine their future. We don’t want other countries to choose our leaders - so we have to stop trying to choose theirs.” Boom. Unambiguous, unequivocal, and without any of the “Yeah Maduro is an evil monster, but” modifiers that other officials (including Bernie Sanders) have been prefacing their feeble objections to Trump’s campaign to topple the Venezuelan government with. Which of course outraged all the usual war pundits, including the Washington Post’s most reliable military-industrial complex fluffer Josh Rogin. “Again, @TulsiGabbard shares the same foreign policy position as Russia and the Assad regime,” Rogin tweeted in response to Gabbard’s statement. “It’s probably just a coincidence. #TusiAssad2020” — Josh Rogin (@joshrogin) January 28, 2019 This man calls himself a journalist. He works for one of the most respected and influential news outlets in America. Rogin’s post is obnoxious and idiotic for a whole host of reasons, among them the fact that Trump is consistently painted as a Kremlin stooge by pundits like Rogin, yet opposing Trump is somehow being depicted as Kremlin servitude. But the reason his tweet deserves an article of its own today is because the argument he is using is one you see recurring over and over again in the psychotic, pants-on-head, screaming-at-traffic stupid salad that is collectively referred to as Russiagate. Another way to write Rogin’s tweet would be as follows: “Hmmm, you think the US should refrain from destroying countries all around the world? You know who else thinks that? The Kremlin! Hmmm, it’s very interesting that you and the Kremlin share that same view all the time, hmmmm, probably just a coincidence though!” You see this obnoxious McCarthyite talking point regurgitated over and over and over again by people eager to paint anyone who objects to US interventionism and the political establishment responsible for it as Russian agents, and it’s about as moronic an argument as any you’ll ever see.
There’s a wider scandal suggested by the Trump investigation - The scope of financial crimes unearthed so far by state and federal authorities investigating President Trump and his associates is remarkable. Paul Manafort was found guilty of bank and tax fraud, and faces another trial involving charges of money laundering. Former campaign adviser Rick Gates pleaded guilty to financial fraud. Former Trump attorney Michael Cohen pleaded guilty to tax evasion and illegal campaign donations. The Trump Foundation was just dissolved over what the New York attorney general described as “a shocking pattern of illegality.” And authorities opened new investigations following a recent New York Times exposé describing hundreds of millions of dollars of potential financial fraud by the Trump family. Tax evasion, money laundering, financial fraud and campaign finance violations: Every turned stone reveals thick webs of financial misdeeds. These white collar crimes, which often implicate the powerful and the wealthy, notoriously thrive in the loose regulatory environments created when big money exerts undue influence on politics. The Trump investigations join a growing body of evidence pointing to lax enforcement of high-level financial crimes. We know, for example, that massive fraud involved in the 2008 financial collapse – from mortgage lenders who deceived customers to banks that deceived investors – went essentially unpunished. We know that under-enforcement is common with certain big-ticket tax evasion practices – like misstating the value of assets under the gift tax. Gift tax fraud, which may save millions of dollars to a taxpayer, is a major component of the alleged tax evasion scheme of the Trump family. Lax enforcement and minor punishments are notoriously common with violations of campaign finance laws – the point where private and public corruption often meet. And as for money-laundering: According to congressional testimony, regulations against it are so ineffective that “the bottom-line metrics suggest that money-laundering enforcement fails 99.9 percent of the time.”
Co-founder of Satanic Temple: Pence 'really scares me' - The co-founder and chief spokesperson for The Satanic Temple says that Vice President Pence's "theocratic" vision for the U.S. is what "really scares" him. “[President Trump] is too stupid to predict; the guy has no concept of his own limitations. The thing that makes me most comfortable with Trump is the fact that he has no vision. Mike Pence really scares me," Lucien Greaves told The Daily Beast in an interview published on Wednesday. "Pence has a clear, theocratic vision for the United States.”Greaves's comments came as he discussed past GOP presidents' religious beliefs. He said that former President George W. Bush was a "true believer," but that Trump "doesn’t really try.""But I think the evangelicals are happy with Pence, and happy that he’s assigning the [federal judge] appointees,” he added. Greaves, who co-founded The Satanic Temple with Malcolm Jarry in 2013, spoke with The Daily Beast about a new documentary, "Hail Satan?," which includes an episode in which a former spokesperson calls for Trump's execution.Greaves said that he dismissed the person following the remarks. “When we say that somebody was removed for threatening execution on the president, that’s not to say that anybody in our group would cry if Trump died from choking on a ham sandwich tomorrow,” Greaves said.
Why Aren’t Hedge Funds Required to Fight Money Laundering? - For many years, the federal government has required banks, brokerages and even casinos to take steps to stop customers from using them to clean dirty money. Yet one major part of the financial system has remained stubbornly exempt, despite experts’ repeated warnings that it is vulnerable to criminal manipulation. Investment companies such as hedge funds and private equity firms have escaped multiple efforts to subject them to rules meant to combat money laundering. The latest attempt, which began in 2015, appears to have ground to a halt, according to sources familiar with the process. “You’ve got several trillion dollars, the management of which nobody is required to ask any questions about where that money is coming from,” said Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency Coalition. “This is very problematic.” The Financial Action Task Force, an intergovernmental organization that seeks to combat money laundering around the world, characterized the lack of anti-money laundering rules for investment advisers, such as those who manage hedge funds and private equity funds, as one of the United States’ most significant lapses in a report two years ago. The push to regulate hedge funds and similar investment firms took off after the Sept. 11 attacks, when Congress passed the Patriot Act. Among other things, the law required federal agencies to take new steps to keep illicit money out of the U.S. financial system. The Treasury Department exempted investment firms at the time, planning to return to them after tackling other sectors. “Eighteen years ago, the Patriot Act required investment companies to install their own AML [anti-money laundering] programs,” said Elise Bean, a former staff director of the U.S. Senate investigations subcommittee who supports the proposed rule. “But Treasury has yet to enforce the law,” she said.
Zinke on new gig: I’m going to make cryptocurrency company 'great again' -Ryan Zinke may no longer be a member of the Trump administration, but he says he’s still hoping to make something "great again" — his new job at a private cryptocurrency company.President Trump’s former Interior secretary, who departed Washington in January on the heels of multiple ethics investigations, is now working for Artillery One, a little-known blockchain and cryptocurrency investment company based out of North Carolina.“I’m going to make Artillery One great again,” Zinke told Vice News in an interview released Friday.Zinke, the managing director of Artillery One, spoke to the publication from San Moritz, Switzerland, where the was attending a crypto-finance convention with his boss, Daniel Cannon.Artillery One said in a press release that Zinke will be based in Montana and California but the job would also involve “extensive travel overseas.”The former Trump Cabinet official said he joined the company after meeting Cannon on an airplane. After leaving the Department of Interior, Zinke got a phone call “out of the blue” from Cannon, and said they realized they had “similar visions.” “I’m very proud he’s part of Artillery One and now our managing director,” Cannon told Vice.
Bankrupt PG&E Seeks To Pay $130 Million In 2018 Bonuses - Perhaps the only people less worthy of receiving a bonus of any kind than the Moody's and S&P analysts who as recently as three weeks ago rated now bankrupt PG&E as investment grade is the management of PG&E, which one year after the most destructive fire in California history sparked, literally, another "most destructive fire in history" with no hedges or fallbacks in place. And yet as part of its first day bankruptcy motion, the California utility that filed for bankruptcy early on Tuesday is seeking to pay employees about $130 million in performance bonuses for last year, an amount which is due to be paid in March 2019. According to compensation and benefits court filing, the company - which is facing $51.7 billion in total debts - said that the bonuses "are critical to ensuring that employees stay motivated." About 14,000 employees are eligible for short-term incentive plan cash awards for 2018, for achieving performance targets and individual goals. The payouts range from about $5,000 to $90,000 per person, not including senior officers and directors. PG&E also said it wants to maintain a rewards program that gives gift cards to workers who go "above and beyond" their regular duties, at a total cost of about $15.2 million a year; the company is also seeking to pay out $650,000 in outstanding awards. In separate filings, PG&E said it will keep paying $327 million annually for pension benefits. The decision to keep paying into its pension plan means about 54,000 current and former employees are unlikely to be drawn into the bankruptcy case, company says in court papers. The utility also pays $109.2 million annually in 401(k) matching funds for 22,000 current employees and $28.3 million annually toward retiree health care, and has asked the court to keep such payments.
Goldman Will Withhold $14 Million Bonus From Blankfein Until 1MDB Probe Ends - Since the Wall Street Journal first exposed the fraud at Malaysian sovereign wealth fund 1MDB back in 2015, Goldman and CEO David Solomon have been denying that the bank's role in enabling the perpetrators of the multibillion dollar public swindle, a group that included a corrupt banker and former Prime Minister Najib Razak, was the result of a few bad apples - not the result of a "culture of corruption", as former Goldman banker-turned-cooperating-government-witness Tim Leissner alleged in an affidavit. But as reports revealing the involvement of senior Goldman executives, including then-CEO Lloyd Blankfein, surfaced, it steadily became harder for the bank to try and pin it all on Leissner and his team in Southeast Asia - particularly after word got around that Blankfein had attended a one-on-one sit down with Jho Low, the banker who facilitated the 1MDB bond offerings underwritten by Goldman (and who is now a fugitive from justice, wanted by authorities in Malaysia and the US). Facing the threat of lasting reputational damage, and massive fines in both Malaysia and the US, Goldman's board of directors has decided to take action in what looks like a first step toward admitting that Blankfein - whose reputation and legacy at Goldman has suddenly been thrown into doubt - played an important role in helping the bankers who brought in the deal circumvent the bank's compliance controls. According to the Wall Street Journal, Goldman said in a filing on Friday that it plans to withhold a $14 million deferred cash bonus to Blankfein and instead defer the payout until after an investigation into 1MDB had finished. Goldman is temporarily withholding a cash bonus that Mr. Blankfein would have been owed under a 2011 award. The bonus was deferred and the ultimate payout was tied to Goldman’s long-term performance. It has roughly doubled from its original $7 million value, according to a Wall Street Journal review of filings. Goldman is also withholding similar bonuses owed to two unnamed former executives. They are, according to a person familiar with the matter, Michael Evans, who was a senior Goldman executive at the time of the 1MDB bond sales, and Michael Sherwood, and senior executive in London who retired in 2016.
Fed wary of hard Brexit's effect on U.S. banks — Federal Reserve Chairman Jerome Powell said Wednesday that the central bank is monitoring the United Kingdom’s continuing efforts to leave the European Union and a messy breakup could pose risks to both the economy and financial system. Speaking at a press conference capping the most recent meeting of the Federal Open Market Committee, Powell said the apparent lack of a deal in Brexit negotiations regarding the future trading status between the U.K and EU is a cause for concern. He said the Fed is helping U.S. banks prepare for all outcomes to the extent possible. “We’ve been monitoring the Brexit situation very carefully for a long time, and for us, that starts with U.S. financial institutions that have a presence either in the U.K., the EU or both,” Powell said. “We have worked with those institutions, along with U.K. and EU regulators, to assure ourselves that those firms have plans and have liquidity and have all the things that they will need for the full range of Brexit outcomes.” Powell also signaled that the Fed is "open" to the idea of fintech firms obtaining a special-purpose bank charter from the Office of the Comptroller of the Currency, but declined to offer any more detail about the central bank's thinking about the charter. The Fed is poised to decide if such banks have access to the payments system. Powell also confirmed that the central bank still views the payment of interest in excess reserves, or IOER, as an appropriate monetary policy tool. On Brexit, the Fed chairman said the risk of the U.K. leaving the EU without agreements in place is economic, in part, because it would likely result in slowed growth in both the eurozone and the U.K. But the greater risk, he said, would be if there is a disruption to the international financial markets. “If there is a hard Brexit, that will very likely involve disruptions both to the continental economy and certainly to the U.K. economy, and we would feel that,” Powell said.
Brown calls on Fed to raise capital buffer for biggest banks — The top Democrat on the Senate Banking Committee is calling on the Federal Reserve to increase the countercyclical capital buffer in order to quell systemic risk in the financial system. In a letter to the Federal Reserve Board of Governors, Sen. Sherrod Brown of Ohio said the current optimism in the financial system could lead to another financial crisis. “Financial crises are caused by excessive optimism on the part of bankers and their watchdogs when times are good,” Brown said. “In light of the current market conditions and emerging risks that are indicators of increasing systemic vulnerabilities, the Board should use all of its prudential authorities, including the CCyB, to strengthen the resiliency of our financial system and protect working families from the next economic downturn.” Brown said the countercyclical capital buffer is an “invaluable mechanism” to address risks to the financial system before an economic crisis ensues, designed to require banks to increase capital during economic expansions so they are better positioned to provide credit and liquidity during economic contractions. Brown, who is considering a run for president, said Fed researchers noted that banking supervisors have spotted weaknesses in risk management of the leveraged loan market, as well as elevated asset valuations and borrowing among highly levered and lower-rated businesses in the private nonfinancial sector. He cited a Moody’s Investors Service report that said a combination of weak lending practices and increased lending to lower-quality corporate borrowers is creating credit risks and could lead to more defaults and lower recoveries. “At a time when the largest banks in the U.S. are reporting record profits — more than $100 billion in annual profits — now is precisely the time to require additional capital buffers that large banks could draw upon to mitigate a large adverse financial shock,” Brown said.
January 2019: 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 January 2019. Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List for January 2019. During the month, the list increased by a net of one institution to 78 banks after two removals and three additions. Aggregate assets increased slightly to $55.2 billion from $54.8 billion at year-end. A year ago, the list held 101 institutions with assets of $20.7 billion. This month, actions were terminated against Northside Bank, Adairsville, GA ($126 million) and Millennial Bank, Leeds, AL ($66 million), which was previously known as Covenant Bank. Additions this month include Southwest Capital Bank, Albuquerque, NM ($369 million) and Beacon Business Bank, National Association, San Francisco, CA ($140 million). In addition, the FDIC issued Gunnison Valley Bank, Gunnison, UT ($71 million) a Prompt Corrective Action in October 2018. Gunnison Valley Bank has the dubious distinction of making a return appearance on the list after being removed in September 2017.
Facebook let kids run up huge credit card bills, documents show -CBS video - After a series of scandals, Facebook is under fire again over newly released documents that show an apparent pattern of exploiting minors for their parents' money. More than 100 pages of documents part of a 2012 lawsuit were released Thursday showing Facebook was aware children spent large sums of money on game apps without parental consent. Carter Evans reports.
Court’s Biometrics Ruling Poses Billion Dollar Risk to Facebook, Google - The Supreme Court of Illinois on Friday ruled that an amusement park, Six Flags Great America, must pay damages to a boy for collecting his thumbprint without proper consent. The decision in the closely-watched case opens the door for the possibility of huge payouts in related cases against technology companies whose face-scanning policies breached a state law known as the Biometric Information Privacy Act. In the Six Flags case, a mother named Stacey Rosenbach filed a lawsuit upon learning the amusement park scanned and stored her son’s thumbprint as part of its annual pass program. The case soon became a key test of the law, known as BIPA. The crucial issue is whether a person must show they suffered actual harm when a company collects biometrics without permission, or if it’s enough just to show that the act took place.In a 7-0 ruling, the Illinois court agreed with Rosenbach that the purpose of the law, which provides for a $1,000 to $5,000 penalty, is to deter companies misusing consumers’ biometrics. This meant that Rosenbach’s son counts as an “aggrieved person” in the language of BIPA.This ruling comes as a blow for Google and Facebook, both of which are ensnared in BIPA lawsuits of their own.In the case of Facebook, consumers are claiming the social network scanned their faces without permission as part of a feature to “tag” friends and, in the case of Google, as part of a facial recognition service for Google Photos. In the Facebook case, a judge agreed last year that an alleged lack of harm did not bar consumers from suing under BIPA, and that a proposed class action could go before a jury. Facebook appealed to the 9th Circuit Court of Appeals, and has been stalled for months pending the outcome of the Six Flags case. Now, according to plaintiffs’ lawyer Jay Edelson, the ruling on Friday amounts to a de facto victory.
Facebook pays teens to install VPN that spies on them- Desperate for data on its competitors, Facebook has been secretly paying people to install a “Facebook Research” VPN that lets the company suck in all of a user’s phone and web activity, similar to Facebook’s Onavo Protect app that Apple banned in June and that was removed in August. Facebook sidesteps the App Store and rewards teenagers and adults to download the Research app and give it root access to network traffic in what may be a violation of Apple policy so the social network can decrypt and analyze their phone activity, a TechCrunch investigation confirms. Facebook admitted to TechCrunch it was running the Research program to gather data on usage habits. Since 2016, Facebook has been paying users ages 13 to 35 up to $20 per month plus referral fees to sell their privacy by installing the iOS or Android “Facebook Research” app. Facebook even asked users to screenshot their Amazon order history page. The program is administered through beta testing services Applause, BetaBound and uTest to cloak Facebook’s involvement, and is referred to in some documentation as “Project Atlas” — a fitting name for Facebook’s effort to map new trends and rivals around the globe.Facebook told TechCrunch it would shut down the iOS version of its Research app in the wake of our report. But on Wednesday morning, an Apple spokesperson confirmed that Facebook violated its policies, and it had blocked Facebook’s Research app on Tuesday before the social network seemingly pulled it voluntarily (without mentioning it was forced to do so). You can read our full report on the development here.
Facebook Disables Political Ad Monitoring Tools Used By Transparency Watchdogs - Facebook has disabled the ability of third party political transparency advocates to monitor political advertisements placed on the social network - a move described by one of the affected organizations as an "appalling look." UK-based WhoTargetsMe and US-based ProPublica have been using voluntarily installed browser plugins to collect data on advertisements targeting users. The tools have helped expose "many of the advertising tatics used by politicians, making it harder for those who pay for negative adverts to escape scrutiny," reports The Guardian. The new restrictions were implemented amid what Facebook said was part of a wider crackdown on third party plugins, including ad blockers, which harvest unauthorized data from the site. "Ten days ago, our software stopped working, and efforts to fix it have proved much harder than before," said WhoTargetsMe co-founder Sam Jeffers, who feared his service may soon be effectively barred altogether from the social media platform. "Facebook is deliberately obfuscating their code. When we have made small changes, they’ve responded with further updates within hours.""This comes in a year when over a third of the world’s population has the opportunity to vote, with elections across the EU, India, Canada, Australia, South Africa, Israel and Ukraine to name a few. In sum, they are actively trying to stop our project from gathering data about the ads they run, and the targeting of those ads. Obviously, we think this is the wrong decision." Approximately 20,000 people had voluntarily signed up with WhoTargetsMe - which Facebook has now rendered virtually useless.
The Fall Of Facebook Has Only Just Begun - “There’s no mental health support. The suicide rate is extremely high,” one of the directors of the documentary, “The Cleaners” told CBS News last May. The film is an investigative look at the life of Facebook moderators in the Philippines. Throughout his 2018 apology tour, Mark Zuckerberg regularly referenced the staff of moderators the company had hired as one of two key solutions — along with AI — to the platform’s content evils. What he failed to disclose is that the majority of that army is subcontractors employed in the developing world. For as long as ten hours a day, viewing as many as 25,000 images or videos per day, these low-paid workers are buried in the world’s horrors — hate speech, child pornography, rape, murder, torture, beheadings, and on and on. They are not experts in the subject matter or region they police. They rely on “guidelines” provided by Facebook — “dozens of unorganised PowerPoint presentations and Excel spreadsheets with bureaucratic titles like ‘Western Balkans Hate Orgs and Figures’ and ‘Credible Violence: Implementation standards’,” as The New York Times reported last fall. The rules are not even written in the languages the moderators speak, so many rely on Google Translate. As a recent op-ed by John Naughton in The Guardian declares bluntly in its headline, “Facebook’s burnt-out moderators are proof that it is broken.”As we noted in last week’s issue, 41 of the 53 analysts tracked by Bloombergcurrently list Facebook as a buy, with “the average price target… $187, which implies upside of nearly 36%.” That optimism springs from a basic assumption: the company’s monopolistic data dominance means it can continue extracting more from advertisers even if controversy after controversy continues to sap its user growth. Given the depth and intractability of Facebook’s problems, this is at best short-sighted. The platform’s content ecosystem is too poisoned for human or machine moderators to cleanse. Users are fleeing in droves, especially in the company’s most valuable markets. Ad buyers are already shifting dollars to competitors’ platforms. Governments are stepping up to dramatically hinder Facebook’s data-collection capabilities, with Germany just this week banning third-party data sharing. The company is under investigation by the FTC, the Justice Department, the SEC, the FBI, and several government agencies in Europe. It has been accused by the U.N. of playing a “determining role” in Myanmar’s genocide. An executive exodus is underway at the company. And we believe, sooner or later, Facebook’s board will see no option but to remove Sheryl Sandberg and Mark Zuckerberg.
Telling Fired Journalists Learn To Code Is Now Abusive Behavior On Twitter - It appears - judging by Twitter's actions - that offering career advice to laid-off liberal journalists is very different from offering career-advice to laid-off middle American coal-miners. As the temperature rose in the twittersphere amid simmering schadenfreude surrounding the firing of hundreds of left-leaning journalists from HuffPo and Buzzfeed in the last week, a meme went viral suggesting these media types seek alternative work and "learn to code" was born (encouraging them to learn software development as an alternate career path.)This apparent trolling did not sit well with many... And just days later, with feelings hurt and safe-spaces shattered, Twitter has reportedly done something about it... I am told by a person in the know that tweeting "learn to code" at any recently laid off journalist will be treated as "abusive behavior" and is a violation of Twitter's Terms of Service — Jon Levine (@LevineJonathan) January 28, 2019
"Surveillance Capitalism": Google Sister Company To Package And Sell Location Data From Millions Of Cellphones - A subsidiary of Google's parent company Alphabet, Sidewalk Labs, is using real-time mobile location data from millions of cellphone users collected over long periods of time in order to help urban planners make critical decision on transportation and land use. The program, known as Replica, gathers and anonymizes cellphone user data, then models simulations which allow civil engineers see when, how and where people travel in Urban areas."Replica provides a full set of baseline travel measures that are very difficult to gather and maintain today, including the total number of people on a highway or local street network, what mode they’re using (car, transit, bike, or foot), and their trip purpose (commuting to work, going shopping, heading to school)," wrote Nick Bowden of Sidewalk Labs last year. The problem? According to The Intercept, transportation authorities in cities adopting the technology such as Kansas City, Portland and Chicago have no clue where the data is coming from, and Sidewalk's lack of transparency has raised questions over privacy rights. "The privacy concerns are pretty extreme," said urban technology expert and author, Ben Green, in an email to The Intercept. "Mobile phone location data is extremely sensitive." An Associated Press investigation showed that Google’s apps and website track people even after they have disabled the location history on their phones. Quartz found that Google was tracking Android users by collecting the addresses of nearby cellphone towers even if all location services were turned off. The company has also been caught using its Street View vehicles to collect the Wi-Fi location data from phones and computers. -The Intercept
Apple FaceTime bug lets you listen in on people you call, even if they haven't picked up their iPhone - There's a FaceTime bug that lets you hear through someone else's iPhone, even if they haven't answered your phone call. It was previously reported on Twitter by user Benji Mobb and covered by 9to5Mac.CNBC tested it and verified that it's a real bug. I tried placing a video call to my editor from my iPhone using Apple's FaceTime app. Then, before he picked up, I used the menu option to add somebody else to the call and, as 9to5Mac's directions state, I added myself to the call. Suddenly, I could hear my editor, even though he never picked up. We continued having a conversation while his phone only gave him the option to answer. There was no indication that the call had already gone through. The Verge noticed reports that, if the person you're calling tries to end it by tapping the power button on their phone, it sends video but no audio. That means the person calling you can see a video of you or your surroundings as if you'd answered the call. I replicated this with a friend.
Now, Refrigerators Are Watching Us Too- Smart Coolers Are Coming To A Store Near You - If you’ve been feeling like you just don’t have enough “smart” devices spying on you every day, I have great news. “Smart coolers” may be coming to a store near you.Years ago, you would have sounded like a lunatic if you said that a refrigerator was watching you. But, like other new technology, yesterday’s serious mental health symptom is today’s reality. Walgreens is piloting a new line of “smart coolers”, which are refrigerators equipped with cameras that scan shoppers’ faces and make inferences on their age and gender. On January 14, the company announced its first trial at a store in Chicago. The drugstore chain plans to put the coolers in stores in New York, Seattle, and San Francisco by the end of January.So far, 15 large advertisers have signed up to test the Cooler Screens platform, including Nestlé SA, MillerCoors LLC, and Conagra Brands Inc. While Cooler Screens is currently only in Walgreens stores, the company is looking to get their product in additional chains as well.The technology embeds cameras, sensors, and digital screens in cooler doors, creating a network of “smart” displays that marketers intend to use to target ads to specific types of shoppers, explains The Wall Street Journal:The refrigerator and freezer doors act as a digital merchandising platform that depicts the food and drinks inside in their best light, but also as an in-store billboard that can serve ads to consumers who approach, based on variables such as the approximate age the technology believes they are, their gender and the weather.This new technology could provide brick-and-mortar stores with a marketplace similar to online advertising. Ice cream brands could duke it out to get the most prominent placement when it is 97 degrees outside; an older man could see ads for different products than a younger woman. (source) Here’s what the screens look like:
Chaos erupts inside Facebook as employees find themselves unable to open the company’s apps on their iPhones --Facebook's thousands of employees are reportedly unable to use the company's internal iOS apps after it was caught running a data-gathering research app that violated Apple's developer policies.Apple said on Wednesday that it had revoked Facebook's certificates giving it access to a special enterprise program that companies can use to distribute internal apps and tools outside the public App Store.The move has caused internal Facebook apps to stop working, creating a chaotic situation that the company has deemed a critical problem, The Verge reported. Facebook employees reportedly can't open company apps for transportation and the lunch menu, along with beta versions of Facebook apps like Messenger and Instagram.While that has made for a hectic day for Facebook employees, Apple's revocation of Facebook's enterprise certificates hasn't affected the public's ability to download and use the Facebook app on iOS devices. The two tech companies have clashed before, but the latest incident was sparked by a TechCrunch report on Tuesday that said Facebook had quietly been running an app called Facebook Research that tracks people's phone activity and web traffic in exchange for compensation.Through the program, dubbed "Project Atlas" internally, Facebook paid teens and adults up to $20 a month to install a smartphone virtual private network, or VPN — a sort of intermediary software for connecting to the internet — that gave the company access to a participant's trove of personal data.The program included teens age 13 to 17, who were able to participate with parental consent that was as simple as checking a box,according to the BuzzFeed News reporter Ryan Mac.Since Apple has banned apps that collect this sort of data, Facebook circumvented it by using Apple's enterprise program, though Apple says it is supposed to be used only by a company's employees for internal use, TechCrunch reported. Participants in Facebook's program were instructed to "sideload" the Facebook Research app, a process for downloading apps outside of Apple's App Store.
Apple brings the hammer down on Google for app that broke its rules, just like it did with Facebook - Apple restored Google's enterprise developer certificates late Thursday after revoking them earlier in retaliation for an app that violated its policies.The move was first reported by The Verge.Such a move briefly made it impossible for Google employees to test iPhone apps and use certain internal apps.Apple did the same thing to Facebook on Wednesday and, until now, it seems that Google might have gotten away for violating the same policies as Facebook. Since then, the iPhone maker has restored Facebook's enterprise certification.Apple first pulled Facebook's enterprise certificates after a TechCrunch report revealed that the company had been secretly distributing a Facebook Research app to members of a program that allowed the firm to collect data on how they used their devices.Google was operating a similar program called Screenwise Meter that also skirted Apple's rules. It apologized on Wednesday eveningand called its action a "mistake." Both Facebook and Google have shut down the programs on iPhones.Enterprise certificates let companies develop and install apps without having to publish them to the Apple App Store. But Apple's rules require that the apps are only distributed to employees, not to outside parties.Apple's decision was said to have "crippled" parts of Facebook, particularly among employees who could no longer access early builds of apps, such as beta versions of Instagram and Facebook Messenger, which they were working on, according to Business Insider. It also prevented Facebookers from using employee-only apps such as Mobile Home and Ride, the latter of which helps with employee transportation. That means Google's employees could face a similar situation, particularly those who are working on early builds of new applications. Google has lots of popular apps on iPhone including Google Maps, Gmail, Calendar, Hangouts, Google Music and more. One employee who asked to remain anonymous said they were having difficulty accessing an internal app used for checking Google shuttle bus schedules.
Apple Is Fighting a Good Fight Against Facebook and Google - Who is losing in the “war” that broke out among Apple, Facebook, and Google this week? It is certainly not you or me; it is unambiguously two misbehaving tech giants. Facebook and Google exploited a feature intended for “enterprise developers” to distribute apps that collect large amounts of data on private users, TechCrunch first reported. Both companies paid users to install the apps and have their behavior meticulously tracked. These “research” apps violated Apple’s terms, leading the iPhone maker to revoke Google and Facebook’s enterprise certificates, which disabled the data-collecting apps on iOS in addition to internal apps used by employees at the two companies. (Apple restored access to Facebook’s internal apps on Thursday and was working on Google’s according to the New York Times.) Apple’s maneuver has been characterized by some as a chilling demonstration of the company’s power. Verge editor-in-chief Nilay Patel suggested in a tweet that it was cause for concern: First, they came for our enterprise certificates, then… well, what, exactly? The implication that Apple is exhibiting some monopolistic urge to gutshot Facebook and Google makes close to zero sense. The events of this week will not affect their bottom lines, and Apple could have taken much more drastic action to lock down iOS — as it has before. That it didn’t tells us everything about one of the most important systems of checks and balances in consumer technology today.
Who Will Guard Us From The Guardians? YouTube "Protects" Users By Hiding "Conspiracy Theories" - Flat earth, 9/11 ‘inside job’, and the Kennedy assassination ‘cover-up’. These are just some of the ‘conspiracy theories’ that YouTube will baby proof going forward, hiding such content from users as if they were not cognitively thinking adults capable of making rational decisions. This month, disgraced Buzzfeed performed yet another astonishing feat of shoddy, agenda-driven journalism by reporting that it took just nine mouse clicks on YouTube to go from a PBS report on the 116th Congress to a video entitled ‘A Day in the Life of an Arizona Rancher,’ produced by a Washington immigration reform group known as The Center for Immigration Studies (CIS). The video that so enraged Buzzfeed details the story of Richard Humphries, an Arizona resident and former narcotics officer living just miles from the US-Mexico border. Humphries, increasingly concerned with the number of illegals traversing his 75-acre ranch, built a watchtower on his sprawling property to help him and federal border agents track illegal aliens. Considering the ‘extremist nature’ of the content, is it any surprise that the CIS was branded in 2016 a ‘hate group’ by the Southern Poverty Law Center (SPLC), a group itself that has been portrayed as touting a leftist agenda, yet is quietly partnering with YouTube to flag ‘hate’ content? The Buzzfeed article took exception with many other ‘right-wing’ videos that had the audacity to rear their racist heads in YouTube’s auto-select function. One of those channels is called PragerU, which hosts popular liberal bugbears, including Ben Shapiro, Jordan Peterson, James Damore and Charlie Kirk. The channel, which filed a lawsuit to stop Google and YouTube from illegally censoring its educational videos and discriminating against its right to freedom of speech, operates on the principle of providing “knowledge and clarity on life's biggest and most interesting topics… ranging from history and economics to science and happiness.”
YouTube Strikes Now Being Used as Scammers’ Extortion Tool - In a terrible abuse of YouTube's copyright system, a YouTuber is reporting that scammers are using the platform's "three strike" system for extortion. After filing two false claims against ObbyRaidz, the scammers contacted him demanding cash to avoid a third - and the termination of his channel. Every week, millions of YouTubers upload content for pleasure and indeed profit, hoping to reach a wide audience with their topics of choice. On occasion, these users run into trouble by using content to which they don’t own the copyrights, such as a music track or similar. While these complaints can often be dealt with quickly and relatively amicably using YouTube’s Content ID system, allegedly-infringing users can also get a so-called ‘strike’ against their account. Get three of these and a carefully maintained channel, with countless hours of work behind it, can be rendered dead by YouTube. As reported on many occasions, this system is open to all kinds of abuse but a situation highlighted by a YouTuber called ‘ObbyRaidz’ takes things to a horrible new level. The YouTuber, who concentrates on Minecraft-related videos, reports that he’s received two bogus strikes on his account. While this is nothing new, it appears the strikes were deliberately malicious with longer-term plan to extort money from him.
Microsoft Project Manager Says Mozilla Should Get Down From Its ‘Philosophical Ivory Tower,’ Cease Firefox Development - A Microsoft program manager has caused a stir on Twitter over the weekend by suggesting that Firefox-maker Mozilla should give up on its own rendering engine and move on with Chromium. "Thought: It's time for @mozilla to get down from their philosophical ivory tower. The web is dominated by Chromium, if they really 'cared' about the web, they would be contributing instead of building a parallel universe that's used by less than five percent?" wrote Kenneth Auchenberg, who builds web developer tools for Microsoft's Visual Studio Code. Auchenberg's post referred to Mozilla's response to Microsoft's announcement in December that it would scrap Edge's EdgeHTML rendering engine for Chromium's. The move will leave Firefox's Gecko engine as the only alternative to Chromium, which is used by Opera and dozens of other browsers. Mozilla CEO Chris Beard said at the time Microsoft's decision will give Google more power to "single-handedly" determine how people use the web. Beard argued that Mozilla needed to compete with Google "because the health of the internet and online life depend on competition and choice". If Chromium had near-monopoly market share, developers would only need to build their sites and apps to work with Chromium, he said, projecting a return to the pre-Firefox 2000s when Microsoft's Internet Explorer had a monopoly on browsers.
In Antitrust, Size Isn’t Everything --Marshall Auerback: When it comes to businesses in need of reform, the saying “size isn’t everything” should apply. Unfortunately, this isn’t the thinking in the realm of antitrust, where size is seen as inextricably linked to questions of competitiveness, political corruption, the stifling of innovation and distortions of economic power. At least that’s the case made by Professor Tim Wu, in his new work, The Curse of Bigness: Antitrust in the New Gilded Age. Reviewing the book, New York Times correspondent David Leonhardt accepts Wu’s central premise:“The new corporate behemoths have been very good for their executives and largest shareholders—and bad for almost everyone else. Sooner or later, the companies tend to raise prices. They hold down wages, because where else are workers going to go? They use their resources to sway government policy. Many of our economic ills—like income stagnation and a decline in entrepreneurship—stem partly from corporate gigantism.”If every corporate behemoth is seen as a problematic nail, then a resort to the antitrust hammer is understandable. But it is questionable whether or not the ills outlined above by Wu and Leonhardt are a product of economic gigantism per se. A better reason why these pathologies exist is the following: a sustained multi-decade attack on unionization, the concomitant growing imbalance between capital and labor, the ascendancy of the doctrine of “shareholder capitalism” (which has induced corporations to prioritize share price performance over R&D and investment), global labor arbitrage, and the existence of America’s “pay to play” system of politics (entrenched and exacerbated by recent Supreme Court decisions, such as Citizens United). To address these problems, we need solutions that go well beyond breaking up a big corporation just because it happens to be big, or simply embracing the neoliberal faith that “letting markets be markets” will do the job. Or, for that matter, relying on an archaic regulatory framework that sits uneasily with our 21st-century version of capitalism. While it is understandable why antitrust proponents such as Wu evoke early examples of trust-busters such as Theodore Roosevelt to garner support and provide historical legitimacy for their arguments, it’s hard to see how rules promulgated in the context of an early 20th-century economy are germane to a 21st-century global economy dominated by very different kinds of industries and market structures.
CFPB bans group of payday firms from lending in U.S. -- The Consumer Financial Protection Bureau on Friday banned the online payday lender NDG Financial, its majority owner Sagewood Holdings, three corporate officers and nearly a dozen affiliated companies from lending to U.S. consumers. The CFPB alleged that NDG in Manitoba, Canada, operated a cross-border payday loan scheme in which the companies threatened consumers with lawsuits, arrests, imprisonment or wage garnishment in trying to collect debts in states with usury laws where payday loans are illegal. The proposed settlement ends four years of litigation against the group of Canadian and Maltese companies that was filed by former CFPB Director Richard Cordray. Three corporate officers — CEO Kimberly DeThomas, Jeremy Sabourin and William Wrixon, all of Manitoba — were permanently barred from offering, promoting or collecting on “any consumer loan issued to any consumer residing in the United States,” according to a 19-page settlement proposal. The settlement, filed in the U.S. District Court for the Southern District of New York, does not mention any restitution for consumers or civil money penalties to be paid to the bureau. The CFPB's 2015 lawsuit had sought damages and restitution. Last year, the CFPB under acting Director Mick Mulvaney dismissed charges against six defendants in the case and the bureau "moved for terminating sanctions against the remaining executives," according to the CFPB’s semiannual report to Congress. No reason was given for the move. In November, one of the payday lender's lead attorneys, Steven Engel, was named an assistant attorney general at the Justice Department, according to Vox. The CFPB said the companies and officials misled consumers in telling them that payday loan agreements were not subject to federal or state laws. The companies and officials also misrepresented that nonpayment of the debts would result in lawsuits, arrests, imprisonment and wage garnishment.
Top Democrats urge FHFA's Otting to clarify plans for GSEs - — Two leading congressional Democrats called on the acting Federal Housing Finance Agency chief to detail his plans for the conservatorships of Fannie Mae and Freddie Mac following reports he may shake up the agency's approach to the two mortgage giants. Joseph Otting, who is running the agency on an interim basis while also serving as comptroller of the currency, is reported to have said at an agency meeting this month that the Trump administration is planning an announcement within weeks that could "set a direction for what the future of housing will be in the U.S. and what the FHFA’s part of that will be.” Politico reported his comments Thursday after obtaining a recording. While the details of what Otting is planning are unclear, his comments caught the attention of House Financial Services Committee Chairwoman Maxine Waters, D-Calif., and Sen. Sherrod Brown of Ohio, the Senate Banking Committee's top Democrat. In a letter to Otting Friday, Waters and Brown said the prospect of an acting FHFA chief, who lacks Senate confirmation, pursuing policies outlined by the Treasury Department and White House prompts concerns about the agency’s independence. “While you have provided your views on bank regulation as Comptroller of the Currency, we have not had an opportunity to explore your views on the housing finance system and the policies you hope to pursue at FHFA,” Waters and Brown said. “To date, we have not seen a comprehensive statement from the White House and Treasury Department under the Trump Administration providing their views on regulation of the housing finance system. Additionally, your comments call into question the independence of the FHFA under your leadership.”
FHFA's Otting gives Democratic leaders little detail on GSE plans — Acting Federal Housing Finance Director Joseph Otting said he welcomes congressional Democrats' “insight and perspective” on how to end the conservatorships of Fannie Mae and Freddie Mac, but offered little detail on his approach to dealing with the government-sponsored enterprises. Last week, House Financial Services Committee Chairwoman Maxine Waters, D-Calif., and Senate Banking Committee ranking member Sen. Sherrod Brown, D-Ohio, sought more details following reports that Otting and the Trump administration may release the GSEs from conservatorship without congressional involvement. In his response, Otting only listed his statutory duties as head of the agency, including prudential oversight of the two mortgage giants and management of their "ongoing conservatorships." “As the Presidentially-designated Acting FHFA Director, I intend to carry out these duties and responsibilities and lead the agency in accomplishing its mission,” Otting wrote in the letter to Waters and Brown, obtained by American Banker. “As you are aware, my duties began January 7th, and as we begin the journey of evaluating the Enterprises and developing a framework for ending conservatorship, I would welcome your insight and perspective.” Politico reported last week that Otting said at an agency meeting this month that the Trump administration is planning an announcement within weeks that could "set a direction for what the future of housing will be in the U.S. and what the FHFA’s part of that will be.” The comments prompted speculation that the agency would use its administrative authority to end the conservatorships without Congress passing a GSE reform package. But in published reports earlier this week, a White House spokeswoman said the administration plans to work with Congress on a plan.
Crapo shakes up GSE reform with housing finance plan of his own — Senate Banking Committee Chairman Mike Crapo, R-Idaho, released a new plan Friday to overhaul the U.S. housing finance system more than 10 years after the government put the government-sponsored enterprises Fannie Mae and Freddie Mac into conservatorship. “We must expeditiously fix our flawed housing finance system,” Crapo said in a press release. “My priorities are to establish stronger levels of taxpayer protection, preserve the 30-year fixed rate mortgage, increase competition among mortgage guarantors, and promote access to affordable housing. I invite my Senate and House colleagues, the Administration and all interested stakeholders to work together to enact this critically needed reform.” Crapo’s plan would turn Fannie Mae and Freddie Mac into private guarantors to support the timely repayment of principal and interest to investors for eligible mortgages that are securitized through a platform operated by Ginnie Mae. The plan would also allow for other private guarantors to compete. Senate Banking Committee Chairman Mike Crapo “We must expeditiously fix our flawed housing finance system,” said Senate Banking Committee Chairman Mike Crapo. Bloomberg News The proposal would also convert the Federal Housing Finance Agency’s leadership structure to a bipartisan board of directors instead of a single director. It would also replace the current affordable housing goals and duty-to-serve requirements with a new Market Access fund, which will provide grants, loans, and credit enhancement to address homeownership and rental housing needs.
Commercial banks unlikely to return to residential mortgages – Chris Whalen - Over the past decade since the 2008 financial crisis, the commercial banking industry has slowly withdrawn from the most risky portion of the U.S. residential mortgage market and reduced the overall exposure to the entire asset class. Some hopeful souls in Washington believe this trend will soon reverse, but I'm sad to say that is increasingly unlikely. Outside of some specialist banks that are equipped to deal with the financial and regulatory challenges of residential lending and servicing, the industry is migrating away from mortgage lending. The industry can be divided into three segments based upon the borrower credit score. Banks have largely abandoned the bottom third of the market and even some of the middle segment as well. Loans with credit scores below a 700 FICO are essentially unattractive to commercial banks, either to sell or to hold in portfolio. The reasons for this trend are complex, but the net effect is that banks have largely abandoned the market for low-FICO, high loan-to-value mortgages guaranteed by the Federal Housing Administration. The financial and reputational risks associated with making and servicing distressed mortgages have convinced many lenders to downsize or even eliminate originating residential mortgages for all but the most affluent customers. As a result, banks focus on originating and/or acquiring larger jumbo mortgages and multifamily loans, which tend to have superior credit characteristics and also higher servicing income. And there is no sign that this trend is changing. One indication of the exodus by commercial banks from mortgage lending and loan servicing is the fact that noninterest income for banks is essentially flat going back a decade. There are two measures of noninterest income that historically were very important to bank earnings, but today less so — loan servicing and asset sales. Over the past five years, one-to-four family loans serviced by banks for others have fallen from $4.2 trillion to just $3.8 trillion at the end of the third quarter of 2018. As of Sept. 30, 2018, the national banks regulated by the Office of the Comptroller of the Currency serviced approximately 17.2 million first-lien mortgage loans with $3.26 trillion in unpaid principal balances. This $3.26 trillion represents 32% all residential mortgage debt outstanding in the United States. The other key measure of the decline in mortgage lending activity by U.S. banks is asset securitizations and sales, an activity that once generated billions of dollars in noninterest income annually for the industry, but which continues to shrink even as bank balance sheets have grown. Quarterly sales of one-to-four family mortgages by all banks have fallen from over $1 trillion in 2007 to $700 billion at the start of 2016 and $540 billion at the end of the third quarter of 2018.In addition, the portion of bank balance sheets allocated to one-to-four family mortgage loans held for investment has also declined even as the industry has grown.
Federal regulators should speak with one voice on CRA: Fed’s Brainard Federal Reserve Board Gov. Lael Brainard on Friday said the three federal banking agencies should work together to reform the Community Reinvestment Act rather than pursue separate tracks. The Fed, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency have had difficulty reaching consensus on a CRA modernization plan, and last year the OCC took the unusual step of issuing its own advance notice of proposed rulemaking to gather public feedback on a path forward. The OCC has made the comments available to the other two agencies. While the nature of the comments varies greatly, Brainard said, they demonstrate a desire among stakeholders for reforms to be implemented consistently across the three banking regulators. “If there is one common thread, it is that support for the Community Reinvestment Act is broad and deep,” Brainard said at a CRA research symposium hosted by the Federal Reserve Bank of Philadelphia. “They asked that the three banking agencies work together toward a joint rulemaking proposal so that CRA policies can be clearly and consistently applied across agencies.” The OCC has said that it hopes to pursue a joint rulemaking with the other regulators, but there are a number of sticking points that could make it difficult for the agencies to agree. The CRA, enacted in 1977, requires federally insured banks to provide financial services to low- and moderate-income customers in the communities they serve. The law was passed to combat “redlining” — the practice of denying bank loans and services to people and communities of color. As the law is currently implemented, banks are only reviewed for their lending practices in areas where they have a physical branch. That means banks get no CRA credit for activities beyond their branch network, and conversely have no CRA obligations in areas where they may have a significant market share but no physical branch.
Outlook for reverse mortgages improves as government shutdown ends - Home equity loans the Federal Housing Administration offers to older borrowers are in a better position now that the government shutdown has temporarily ended. There is a chance of a new shutdown when the reprieve ends in a few weeks, but assuming things are getting back to normal, Home Equity Conversion Mortgages in particular should be quick to recover because the market never really shut down completely. "It was still running with perhaps some risk to the lenders, the risk that a loan could go bad before it gets endorsed," Peter Bell, president of the National Reverse Mortgage Lenders Association, said in an interview. While there was some seasonal slowing, there was unlikely any directly resulting from the shutdown, Bell noted. During the shutdown, many lenders continued to submit new loans to the FHA at the same rate they normally do in December and January, according to Wendy Peel, a vice president at loan origination system vendor ReverseVision. "There's been no dip in terms of HECM loan assignments," she said in an interview. Most reverse mortgage lenders were comfortable continuing to make loans because they knew they had a couple of months before they had to report a loan for endorsement, and the shutdown was likely to end before then. During a shutdown, "for 60 days, arguably, the market is OK," Michael McCully, a partner at capital markets consultancy New View Advisors, said in an interview. "There was a delay, but the loans ultimately got endorsed,"
Stealing from the dead - They are all dead. Yet if city records are to be believed, they all walked into the office of a notary public and signed away their homes, which just happened to be in gentrifying neighborhoods with soaring property values.Gail Harrison lived alone in the house where she grew up on Seybert Street in North Philadelphia. She had her quirks, but neighbors looked out for her. “She was a nice, friendly, Christian-hearted woman,” one said.Harriet Dunn and Dorcas Moone lived quietly in a North 27th Street rowhouse in Brewerytown that they bought in 1950 after leaving the Army.Alex Krasheninnikow survived a Nazi concentration camp. He later handed out the Communist Party paper on the streets of Philadelphia. His home on Agate Street in Port Richmond was overflowing with books. Their properties all ended up in the hands of a stranger, a 43-year-old man named William Ernest Johnson III, who wrapped up some of the deals while still on parole from a long prison term for a string of violent crimes.In all, an Inquirer investigation has linked Johnson to at least six suspicious home transfers over the last 2½ years. In case after case, he acquired vacant houses with longtime owners who were dead or so aged that their grown children would later say they never participated in the transactions. Johnson insists that he is a victim too — that he was misled by a series of impostors posing as the dead owners and by other “sellers” who misrepresented the provenance of the deeds they were offering. "I assumed the seller of the home was legitimate, straight up,” he said. He has resold three of the properties, two for $50,000 each, city records show.
Freddie Mac: Mortgage Serious Delinquency Rate Decreased in December, Lowest since 2007 -- Freddie Mac reported that the Single-Family serious delinquency rate in December was 0.69%, down from 0.70% in November. Freddie's rate is down from 1.08% in December 2017. Freddie's serious delinquency rate peaked in February 2010 at 4.20%. This is the lowest serious delinquency rate for Freddie Mac since December 2007. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The increase in the delinquency rate late last year was due to the hurricanes (These are serious delinquencies, so it took three months late to be counted). I expect the delinquency rate to decline to a cycle bottom in the 0.5% to 0.7% range - but this is close to a bottom.
Fannie Mae: Mortgage Serious Delinquency Rate unchanged in December - Fannie Mae reported that the Single-Family Serious Delinquency rate was unchanged at 0.76% in December, from 0.76% in November. The serious delinquency rate is down from 1.24% in December 2017. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%. This matches last month ass the lowest serious delinquency rate for Fannie Mae since August 2007. By vintage, for loans made in 2004 or earlier (3% of portfolio), 2.69% are seriously delinquent. For loans made in 2005 through 2008 (5% of portfolio), 4.61% are seriously delinquent, For recent loans, originated in 2009 through 2018 (92% of portfolio), only 0.34% are seriously delinquent. So Fannie is still working through poor performing loans from the bubble years.
MBA: Mortgage Applications Decrease in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey Mortgage applications decreased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 25, 2019. This week’s results include an adjustment for the Martin Luther King Jr. Day holiday... The Refinance Index decreased 6 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 7 percent lower than the same week one year ago....“Mortgage applications for purchase and refinances were lower over the past week, as rates nudged higher,” said Joel Kan, MBA’s Associate Vice President of Industry Surveys and Forecasts. “After two weeks of decreases, the purchase index still remained roughly 6 percent above its long-run average, which is good news with the spring buying and selling season almost underway. Despite ongoing supply and affordability constraints, the healthy job market and underlying demographic fundamentals both point to gradual purchase growth in the coming months.” The first graph shows the refinance index since 1990.
Case-Shiller: National House Price Index increased 5.2% year-over-year in November S&P/Case-Shiller released the monthly Home Price Indices for November ("October" is a 3 month average of September, October and November prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: Southwest Region Leads in Annual Gains According to the S&P CoreLogic Case-Shiller Index: The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.2% annual gain in November, down from 5.3% in the previous month. The 10City Composite annual increase came in at 4.3%, down from 4.7% in the previous month. The 20-City Composite posted a 4.7% year-over-year gain, down from 5.0% in the previous month. Las Vegas, Phoenix and Seattle reported the highest year-over-year gains among the 20 cities. In November, Las Vegas led the way with a 12.0% year-over-year price increase, followed by Phoenix with an 8.1% increase and Seattle with a 6.3% increase. Seven of the 20 cities reported greater price increases in the year ending November 2018 versus the year ending October 2018. Before seasonal adjustment, the National Index posted a month-over-month gain of 0.1% in November. The 10-City and 20-City Composites both reported a 0.1% decrease for the month. After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase in November. The 10-City Composite and the 20-City Composite both posted 0.3% month-over-month increases. In November, eight of 20 cities reported increases before seasonal adjustment, while 15 of 20 cities reported increases after seasonal adjustment. “ The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The National index is 11.7% above the bubble peak (SA), and up 0.4% (SA) in November. The National index is up 51.1% from the post-bubble low set in December 2011 (SA). The second graph shows the Year over year change in all three indices. The Composite 10 SA is up 4.3% compared to November 2017. The Composite 20 SA is up 4.7% year-over-year. The National index SA is up 5.2% year-over-year.
US Home Price Growth Slumps To 4 Year Lows - Minutes after Pulte Homes' CEO warning that 2019 will be a "challenging year" for homebuilders, Case-Shiller reports its 20-City Composite price index rose just 4.68% YoY in November (dramatically below the 4.89% expected and the 5.02% October print). This is the weakest home price growth since January 2015... All 20 cities in the index showed year-over-year gains, led by a 12 percent increase in Las Vegas and 8.1 percent advance in Phoenix. The weakest gains were in Washington, Chicago, and San Diego. New York also had a subdued increase, at 3.5 percent. Notably, all cities but Washington saw home prices grow faster than incomes yet again... The data further underscore a slowdown in the housing market, along with figures showing sales cooled throughout 2018 as mortgage rates increased, compounding the problem of affordability for many potential buyers already facing steep property prices and scarce supplies. “Price increases are being dampened by declining sales of existing homes and weaker affordability,” David Blitzer, chairman of the S&P index committee, said in a statement. “Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy.” Finally, as Bloomberg notes, housing will likely weigh on US growth for the first time since 2012. Residential investment has added a few tenths of a percent to economic growth each year since 2012. The latest GDP data indicate the sector subtracted from growth in the first three quarters of this year. Poor performance in 4Q implies the sector's growth for 2018 remains in negative territory.
Real House Prices and Price-to-Rent Ratio in November -- It has been over eleven years since the bubble peak. In the Case-Shiller release this morning, the seasonally adjusted National Index (SA), was reported as being 11.7% above the previous bubble peak.However, in real terms, the National index (SA) is still about 8.6% below the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is still 15.0% below the bubble peak. The year-over-year increase in prices has slowed to 5.2% nationally, and will probably slow more as inventory picks up. Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted). Case-Shiller and others report nominal house prices. As an example, if a house price was $200,000 in January 2000, the price would be close to $286,000 today adjusted for inflation (43%). That is why the second graph below is important - this shows "real" prices (adjusted for inflation).The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA (through October) in nominal terms as reported. In nominal terms, the Case-Shiller National index (SA)and the Case-Shiller Composite 20 Index (SA) are both at new all times highs (above the bubble peak). The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices. In real terms, the National index is back to January 2005 levels, and the Composite 20 index is back to June 2004. In real terms, house prices are at 2004/2005 levels. This graph shows the price to rent ratio (January 2000 = 1.0). On a price-to-rent basis, the Case-Shiller National index is back to February 2004 levels, and the Composite 20 index is back to November 2003 levels. In real terms, prices are back to late 2004 levels, and the price-to-rent ratio is back to late 2003, early 2004.
Zillow Case-Shiller Forecast: Smaller House Price Gains in December YoY - The Case-Shiller house price indexes for November were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Aaron Terrazas at Zillow: November Case-Shiller Results and December Forecast: San Francisco Falls Out of Top Three Home-Price Gainers The U.S. National S&P CoreLogic Case-Shiller Home Price Index — which tracks home prices — rose 5.2 percent in November from a year earlier, below Zillow’s forecast last month.The S&P CoreLogic Case-Shiller 20-city index climbed 4.7 percent annually in November, while the 10-city index rose 4.3 percent.Zillow forecasts a steady 5.1 percent annual gain for December (results due Feb. 26). The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be slightly less in December than in November.
Lenders: A Shortage of Supply Slowed 2018 Home Sales and Worsened Affordability - An insufficient supply of homes available for sale was the top reason for the slow growth in home sales last year, according to lenders surveyed as part of Fannie Mae's Mortgage Lender Sentiment Survey in the fourth quarter of 2018. The survey also found high home prices and an increase in mortgage rates to be notable factors behind the drop in sales activity. Additionally, survey results indicated that lenders believe increasing the housing stock and offering consumer subsidies, such as a first-time homebuyer tax credit, could improve housing affordability for low- and moderate-income homebuyers.The Mortgage Lender Sentiment Survey is a survey of senior mortgage executives conducted by Fannie Mae's Economic & Strategic Research Group. The quarterly survey seeks to gain a better understanding of the views of mortgage professionals about key issues in the housing industry. The latest iteration, conducted in November 2018, included additional questions that sought to understand lenders' views on improving housing affordability for low- and moderate-income homebuyers in the mortgage industry.The study revealed the following key findings:
- Forty-eight percent of lenders surveyed said the tepid growth of home sales in 2018 was due to an insufficient inventory of homes available for sale. Twenty-four percent of respondents tied the weak sales to rising mortgage rates, and 20 percent said sales were weighed down by high home prices, which made it hard for prospective low- and moderate-income homeowners to find a home they can afford.
- By contrast, 1 percent of lenders attributed the weak sales in 2018 to tight credit and underwriting standards, and 2 percent tied the decline in home sales activity to a lack of mortgage products tailored to first-time or low- and moderate-income homebuyers.
- Growing the housing stock1 was chosen by 45 percent of lenders as the most helpful idea to make housing more affordable for low- and moderate-income homebuyers. Offering consumer subsidies2, as was done with the first-time homebuyer tax credit in 2008, was chosen by 18 percent of lenders as a solution to the shortage of affordable housing.
- By contrast, 11 percent of lenders responded that improving consumer readiness for homeownership would help make housing more affordable for low- and moderate-income homebuyers, and 10 percent selected offering a wider array of loan products. Other approaches, such as lowering the total cost of homeownership or offering education or job training to raise income levels, were each selected by 8 percent and 6 percent of lenders, respectively.
- When asked to evaluate the helpfulness of various loan programs to enhance housing affordability for low- and moderate-income homebuyers, lenders gave high ratings to low down payment mortgages (44%). Mortgage loans covering renovation costs (18%), loans for condominiums (17%), and loans for manufactured homes (17%) were also considered helpful by lenders. In contrast, loans for home construction (11%) and loans including energy-efficiency installation costs (5%) are seen as less helpful.
Drastic Decline in New Home Sales - According to a report by Redfin, sales of new homes in all four major U.S. regions dropped in the last two months of 2018, with Northeast recording the sharpest decline at 16.1 percent in December, on a year-over-year basis. Northeast has been in the negative territory for the longest period compared to the other three major regions, experiencing no growth since January 2017, the report found."All around the country homebuyers were backing off at the end of last year due to high prices and high mortgage interest rates, and 2018 tax reform made it even more expensive to buy high-priced homes in high-tax states like Massachusetts, Connecticut, and New York. New homes tend to be pricier than existing homes, which is one reason sales of new homes dropped off so much in the Northeast," said Daryl Fairweather, Chief Economist at Redfin.The annual drop in single-family new home sales on a seasonally adjusted basis in the last two months of 2018, revealed a -2 percent, and -13.4 percent decline in November and December respectively. Nationally, a decline of -4.6 percent in November, and -11.6 percent in the subsequent month was recorded in new home sales. However, the sale of new homes is projected to pick up in the coming months. To some extent, the recent decline in mortgage rates and continued job growth has helped raise builder confidence up by two points to 58 this month, the report found. Another factor that couldpossibly drive an increase in home sales is the decline in building material costs, which is down by 1.8 percent in December. The U.S. Department of Housing and Urban Development, in conjunction with the Census, typically reports monthly data on new-home sales. However, the data for 2018 had not been released on account of the partial shutdown. Redfin released its November and December 2018 numbers on single-family new-home sales in an attempt to bridge the gap in data during the longest shutdown in the history of U.S., which ended on January 21 with President Trump’s announcement.
New Home Sales increased to 657,000 Annual Rate in November - Note: This release is for November (this was delayed due to the government shutdown). The December report is not yet rescheduled, but will probably be released soon. The Census Bureau reports New Home Sales in November were at a seasonally adjusted annual rate (SAAR) of 657 thousand. The previous three months were revised up significantly. "Sales of new single‐family houses in November 2018 were at a seasonally adjusted annual rate of 657,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.9 percent above the revised October rate of 562,000, but is 7.7 percent below the November 2017 estimate of 712,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. Even with the increase in sales over the last several years, new home sales are still somewhat low historically. The second graph shows New Home Months of Supply. The months of supply decreased in November to 6.0 months from 7.0 months in October.The all time record was 12.1 months of supply in January 2009. This is above the normal range (less than 6 months supply is normal). Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed.The third graph shows the three categories of inventory starting in 1973. The inventory of completed homes for sale is still somewhat low, and the combined total of completed and under construction is a little low. The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).In November 2018 (red column), 48 thousand new homes were sold (NSA). Last year, 50 thousand homes were sold in November.The all time high for November was 86 thousand in 2005, and the all time low for November was 20 thousand in 2010. This was well above expectations of 560,000 sales SAAR, and the previous months were revised up.
November New Home Sales Surge By The Most Since 1992 - After calamitous declines in December's Existing- and Pending-Home Sales, and Case-Shiller's report that home price gains are the weakest in four years, New-home sales were (like the others) expected to rebound in November (delayed due to the shutdown)... and they did, massively. Against expectations of a 4.8% rebound from October's 8.9% plunge, November printed a surprising 16.9% MoM surge in new home sales...the biggest MoM rise since Jan 1992 But Year-over-year new home sales are still down... New Home Sales SAAR rose to 657k (massively above the 570k expected)... as the median price plunged to $302,400 - the lowest since Feb 2017... That is the biggest MoM drop in Median home prices since May 2016... So what happens next? Does November's surge collapse like December's did for pending and existing sales?
A few Comments on November New Home Sales --First, this report was for November (it was almost ready to release when the government shutdown began in December). The December report will probably be released soon, but no release date has been announced yet. Based on other data, I'd expect sales to be weak in December, but talking to builders, I expect a rebound in January.New home sales for November were reported at 657,000 on a seasonally adjusted annual rate basis (SAAR). This was well above the consensus forecast, and the three previous months were revised up. Sales in November were down 7.2% year-over-year compared to November 2017. Months of inventory is now at the top of the normal range, however the number of units completed and under construction is still somewhat low. Inventory will be something to watch very closely.This graph shows new home sales for 2017 and 2018 by month (Seasonally Adjusted Annual Rate). Sales are only up 2.7% through November compared to the same period in 2017. The comparison for November was difficult (sales in November 2017 were very strong). And the comparison in December will also be somewhat difficult. Overall sales might finish the year down from 2017, but it should be close. This is below my forecast for 2018 for an increase of about 6% over 2017. As I noted early this year, there were downside risks to that forecast, primarily higher mortgage rates, but also higher costs (labor and material), the impact of the new tax law, and other possible policy errors. And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales. Now I'm looking for the gap to close over the next several years. The "distressing gap" graph shows existing home sales (left axis) through December and new home sales (right axis) through November 2018. This graph starts in 1994, but the relationship had been fairly steady back to the '60s. I still expect this gap to slowly close. However, this assumes that the builders will offer some smaller, less expensive homes. If not, then the gap will persist. Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.
NAR: Pending Home Sales Index Decreased 2.2% in December - From the NAR: Pending Home Sales Dip 2.2 Percent in December: Pending home sales declined as a whole in December, but for the second straight month the Western region experienced a slight increase, according to the National Association of Realtors®. The Pending Home Sales Index, a forward-looking indicator based on contract signings,decreased 2.2 percent to 99.0 in December, down from 101.2 in November. Additionally,year-over-year contract signings fell 9.8 percent, making this the twelfth straight month of annual decreases. The PHSI in the Northeast rose 2.0 percent to 93.2 in December, and is now 2.5 percent below a year ago. In the Midwest, the index fell 0.6 percent to 97.5 in December, 7.2 percent lower than December 2017. Pending home sales in the South fell 5 percent to an index of 109.7 in December, which is 13.5 percent lower than a year ago. The index in the West increased 1.7 percent in December to 88.4 and fell 10.8 percent below a year ago. This was well below expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in January and February.
Consumer confidence falls to 18-month low due to government shutdown - The 35-day partial government shutdown helped triggered a sharp drop in consumer confidence in January and signaled growing worries about the future, a fresh survey shows, though optimism has typically rebounded after similar episodes in the past.The consumer confidence index fell to 120.2 in this month f rom 126.6 in December, the privately run Conference Board said Tuesday. Economists polled by MarketWatch had forecast a reading of 124.0.The index has declined three straight months after hitting an 18-year high of 137.9 in October. An index that tracks how Americans feel about the economy right now barely fell, slipping to 169.6 from 169.9. The still-high reading indicates consumers think the economy is doing fine.More ominously, an index that looks six months ahead tumbled to 87.3 from 97.7, a sign that Americans are somewhat more pessimistic about the near future. That’s the lowest level since the month before Donald Trump won the presidential election.
Carmakers Start 2019 With Abysmal US Auto Sales - Forget about the automobile industry turning over a new leaf for the new year: the beginning of 2019 has started just as miserably as 2018 ended for many major auto OEMs in the US. On Friday, January sales numbers for most automakers trickled in, with almost all manufacturers posting disappointing results and/or missing estimates.Ford - which no longer reports official monthly sales numbers, just like GM - was the one exception, rising 7% versus estimates of -1.5%, according to Bloomberg who cited "people familiar". GM, on the other hand, fell 7% versus estimates of -3.7%." Japanese car giants Nissan and Toyota also both posted losses that were larger than expected and companies like Fiat Chrysler and Honda saw their meek gains falling below expectations. As was expected - and stop us if you’ve heard this one before – most companies wound up blaming the cold weather. Honda got creative and also blamed the government shutdown. Reid Bigland, Fiat Chrysler's head of U.S. sales, said: "In spite of some frigid January weather, we remain bullish on 2019 given the continued underlying strength of the U.S. economy."Of course he does, as does Henio Arcangeli, senior vice president of automotive ops for Honda's U.S. unit, who said: "Our sales were very strong in the beginning of the month. With the cold weather that's hit, particularly this week, as well as the government shutdown that we had a little bit earlier, it has slowed things down a little bit." The results also indicate that the annualized industry sales rate has slowed more than estimated. Analysts were previously projecting 16.9 million cars and light truck deliveries for the month compared with the 17.1 million that were delivered in January 2018.
U.S. Wholesale Inventories Rise 0.3% In November, Wholesale Sales Drop 0.6% - - With an increase in inventories of durable goods partly offset by a drop in inventories of non-durable goods, the Commerce Department released a report on Friday showing wholesale inventories in the U.S. rose by less than expected in the month of November. The Commerce Department said wholesale inventories edged up by 0.3 percent in November after climbing by an upwardly revised 0.9 percent in October. Economists had expected inventories to increase by 0.5 percent compared to the 0.8 percent advance originally reported for the previous month. The report said inventories of durable goods climbed by 0.7 percent in November after jumping by 1.7 percent in October, reflecting notable increases in inventories of furniture, professional equipment, and lumber. On the other hand, inventories of non-durable goods fell by 0.5 percent in November following a 0.4 drop in October amid a substantial decrease in inventories of petroleum. The Commerce Department also said wholesale slid by 0.6 percent in November, matching the slump seen in the previous month. Sales of non-durable goods tumbled by 1.0 percent in November after falling by 0.6 percent in October, with sales of petroleum leading the way lower The report said sales of durable goods also edged down by 0.1 percent in November following a 0.5 percent drop in October, reflecting sharp declines in sales of furniture, metals, and machinery. With inventories rising and sales falling, the inventories/sales ratio for merchant wholesalers ticked up to 1.29 in November from 1.28 in October.
ISM Manufacturing index Increased to 56.6 in January --The ISM manufacturing index indicated expansion in December. The PMI was at 56.6% in January, up from 54.3% in December. The employment index was at 55.5%, down from 56.0% last month, and the new orders index was at 58.2%, up from 51.3%. From the Institute for Supply Management: January 2019 Manufacturing ISM® Report On Business®: “The January PMI® registered 56.6 percent, an increase of 2.3 percentage points from the December reading of 54.3 percent. The New Orders Index registered 58.2 percent, an increase of 6.9 percentage points from the December reading of 51.3 percent. The Production Index registered 60.5 percent, 6.4-percentage point increase compared to the December reading of 54.1 percent. The Employment Index registered 55.5 percent, a decrease of 0.5 percentage point from the December reading of 56 percent. The Supplier Deliveries Index registered 56.2 percent, a 2.8 percentage point decrease from the December reading of 59 percent. The Inventories Index registered 52.8 percent, an increase of 1.6 percentage points from the December reading of 51.2 percent. The Prices Index registered 49.6 percent, a 5.3-percentage point decrease from the December reading of 54.9 percent, indicating lower raw materials prices for the first time in nearly three years. Here is a long term graph of the ISM manufacturing index.This was above expectations of 54.0%, and suggests manufacturing expanded at a faster pace in January than in December.
January Markit Manufacturing PMI: Growth Picks Up - The January US Manufacturing Purchasing Managers' Index conducted by Markit came in at 54.9, up 0.5 from the 54.3 final December 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: "January saw US manufacturers start the year with renewed vigour. Production rose at a markedly increased rate, commensurate with the factory sector contributing to robust economic growth of approximately 2.5% in the first quarter if such momentum can be sustained in coming months." [Press Release]Here is a snapshot of the series since mid-2012. Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here, note that ).
Dallas Fed: "Growth in Texas Manufacturing Activity Accelerates" -- From the Dallas Fed: Growth in Texas Manufacturing Activity Accelerates Texas factory activity continued to expand in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 7.3 to 14.5, indicating an acceleration in output growth.Other measures of manufacturing activity also suggested continued expansion in January, although the pace of demand growth slowed a bit. The capacity utilization index rose seven points to 14.8, and the shipments index rose five points to 11.4. Meanwhile, the new orders index edged down to 11.6 and the growth rate of new orders index fell from 5.8 to 1.2.Perceptions of broader business conditions improved in January. The general business activity index rebounded from a multiyear low of -5.1 in December to 1.0 in January. This near-zero reading suggests manufacturers were fairly balanced in their assessment of whether activity had improved or worsened from last month. The company outlook index also rebounded from negative territory this month, rising more than 10 points to 7.1.Labor market measures suggested slower growth in employment and workweek length in January. The employment index retreated four points to 6.6, a two-year low. Sixteen percent of firms noted net hiring, compared with 10 percent noting net layoffs. The hours worked index edged down to 3.6. This was the last of the regional Fed surveys for December. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
January Regional Fed Manufacturing Overview - Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia.Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for January is 8.0, down from the previous month's 12.6. It is below its all-time high of 25.1, set in May 2004.
Chicago PMI Plunges To 2-Year Lows - Amidst all the hope - and promises from The Fed that everything will be awesome - Chicago Purchasing Managers strongly disagree as their latest business survey collapsed from a revised lower 63.8 to 56.7 in January... That is below the lowest analyst estimate (range 58 - 63.8 from 24 economists surveyed) and the weakest print since Jan 2017… Business barometer rose at a slower pace, signaling expansion
- Prices paid unchanged, signaling expansion
- New orders rose at a slower pace, signaling expansion
- Employment rose at a faster pace, signaling expansion
- Inventories rose at a slower pace, signaling expansion
- Supplier deliveries rose at a slower pace, signaling expansion
- Production rose at a slower pace, signaling expansion
- Order backlogs rose at a slower pace, signaling expansion
- Number of components rising vs last month: 1
Harley-Davidson Profit Is Wiped Out by President Trump’s Tariffs - Harley-Davidson Inc. barely broke even in the last quarter of a year in which the struggling American icon got caught up in President Donald Trump’s trade wars. The motorcycle maker’s shares plunged the most in a year.Earnings per share on a GAAP basis were zero in the fourth quarter, the Milwaukee-based manufacturer said in a statement Tuesday. Excluding restructuring and tariff costs, profit was 17 cents a share, missing analysts’ average estimate for 29 cents. Trump attacked Harley last year after it announced plans to shift some U.S. production overseas to sidestep levies imposed by the European Union. But the motorcycle maker has more than tariffs and angry tweets to blame for its performance. U.S. retail sales tumbled 10 percent in the three months ended in December, the eighth consecutive quarterly drop. Chief Executive Officer Matt Levatich is having trouble attracting younger riders and plans to offer cheaper bikes and sell more clothing and gear -- including on Amazon -- to reach new customers. “2019 we expect to be another difficult year until major initiatives like More Roads start kicking in,” Levatich said in an interview, referring to aturnaround plan unveiled last year. “Everything is angled at that core issue of building riders in the U.S. and leveraging growth opportunities we have in the near term and internationally.”
A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’ — Despite a trade war between the United States and China and past admonishments from President Trump “to start building their damn computers and things in this country,” Apple is unlikely to bring its manufacturing closer to home. A tiny screw illustrates why. In 2012, Apple’s chief executive, Timothy D. Cook, went on prime-time television to announce that Apple would make a Mac computer in the United States. It would be the first Apple product in years to be manufactured by American workers, and the top-of-the-line Mac Pro would come with an unusual inscription: “Assembled in USA.” But when Apple began making the $3,000 computer in Austin, Tex., it struggled to find enough screws, according to three people who worked on the project and spoke on the condition of anonymity because of confidentiality agreements. In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not. Tests of new versions of the computer were hamstrung because a 20-employee machine shop that Apple’s manufacturing contractor was relying on could produce at most 1,000 screws a day. The screw shortage was one of several problems that postponed sales of the computer for months, the people who worked on the project said. By the time the computer was ready for mass production, Apple had ordered screws from China. The challenges in Texas illustrate problems that Apple would face if it tried to move a significant amount of manufacturing out of China. Apple has found that no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost.
Drone Sightings Keep Grounding Flights—Here’s Why That Keeps Happening - The ability of drones to interfere with airliners—and inconvenience passengers—has now been demonstrated on two continents, and the problem is likely to get worse as the number of small, unmanned devices multiply. Law enforcement authorities are trying to figure out who flew a drone so high and so close to Newark Liberty International Airport that incoming flights were held up briefly during a peak hour this week at one of the nation's busiest airports. Flights resumed within about 30 minutes—much more quickly than after a similar incident last month at London's Gatwick Airport. Here’s what happened and what is being done to prevent these devices from interfering with air travel in the future: The pilots of both a Southwest Airlines flight and a United Airlines flight reported seeing a drone around 3,500 feet (1,000 meters) above Teterboro, New Jersey, about 9 miles (15 kilometers) from the Newark airport, on Tuesday. As a precaution, the Federal Aviation Administration held up 43 flights already in the air and bound for Newark; nine landed instead at other airports. Another 170 Newark-bound planes were briefly delayed on the ground before taking off from other airports around the country. No video of the reported drone has surfaced.
Americans Got 26.3 Billion Robocalls Last Year, Up 46 Percent From 2017 - Americans are now getting so many robo-calls on a regular basis that many are simply choosing not to answer the phone altogether. That’s one big takeaway from a report released Tuesday by Hiya, a Seattle-based spam-monitoring service that analyzed activity from 450,000 users of its app to determine the scope of unwanted robo-calling — and how phone users react when they receive an automated call. Consistent with other analyses, Hiya’s report found that the number of robo-calls is on the rise. Roughly 26.3 billion robo-calls were placed to U.S. phone numbers last year, Hiya said, up from 18 billion in 2017. One report last year projected that as many as half of all cellphone calls in 2019 could be spam. While many businesses have legitimate purposes for using robo-calls — think package delivery services, home maintenance technicians and banks — unwanted robo-calls represent a growing challenge for regulators and telecom companies. In its analysis of a month’s worth of calling data, Hiya found that each of its app users reported an average of 10 unwanted robo-calls. Many more incoming calls, about 60 on average, were from unrecognized numbers or numbers not linked to a person in the recipient’s address book. What’s more, only about half of all cellphone calls are being answered at all, according to Hiya, whose systems integrate with lists of known and suspected spam numbers maintained by the Federal Communications Commission and the Federal Trade Commission. “As our phones continue to be inundated by robo-calls, many people no longer want to pick up the phone at all,” said Hiya chief executive Alex Algard. But, Algard added, that can also lead to missing important calls from doctor’s offices, banks, schools and other institutions. Federal regulators have moved to crack down on unwanted and spam communications, levying massive fines against those who have illicitly harassed people on the national do-not-call telemarketing list and adopting rules facilitating the rollout of new technologies to combat unwanted calls.
Weekly Initial Unemployment Claims increased to 253,000 - The DOL reported: In the week ending January 26, the advance figure for seasonally adjusted initial claims was 253,000, an increase of 53,000 from the previous week's revised level. This is the highest level for initial claims since September 30, 2017 when it was 254,000. The previous week's level was revised up by 1,000 from 199,000 to 200,000. The 4-week moving average was 220,250, an increase of 5,000 from the previous week's revised average. The previous week's average was revised up by 250 from 215,000 to 215,250. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
ADP: Private Employment increased 213,000 in January --From ADP: Private sector employment increased by 213,000 jobs from December to January according to the January according to the December 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....“The labor market has continued its pattern of strong growth with little sign of a slowdown in sight,“ said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We saw significant growth in nearly all industries, with manufacturing adding the most jobs in more than four years. Midsized businesses continue to lead job creation, however the share of jobs was spread a bit more evenly across all company sizes this month.”Mark Zandi, chief economist of Moody’s Analytics, said, “The job market weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls. As long as businesses hire strongly the economic expansion will continue on.” This was well above the consensus forecast for 167,000 private sector jobs added in the ADP report.
Private companies add 213,000 jobs in January, easily topping expectations: ADP/Moody's Analytics - Private payrolls grew in January at a much faster pace than expected as the labor market shrugged off the longest U.S. government shutdown in history, according to data released Wednesday by ADP and Moody's Analytics. Companies added 213,000 jobs this month, the data show. Economists polled by Refinitiv expected payrolls to grow by 178,000. The strong jobs growth comes even as the U.S. government was shut down for 35 days in a standoff between President Donald Trump and congressional Democrats over his demand for a wall along the U.S.-Mexico border. "The job market weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls," said Mark Zandi, chief economist at Moody's Analytics. "As long as businesses hire strongly, the economic expansion will continue on." Medium-sized businesses, those that employ 50 to 499 people, led the charge by adding 84,000 payrolls. Large businesses, which have at least 500 employees, expanded their head count by 66,000. Small businesses added 63,000 jobs. The services sector contributed the lion's share of the jobs this month, with 145,000 jobs being added. Within the services sector, jobs in professional and business services grew by 46,000 while education and health services payrolls expanded by 38,000. The goods-producing sector, which includes construction, mining and manufacturing, added 68,000 jobs. Wednesday's report comes two days ahead of the release of the Labor Department's monthly jobs report. Economists expect the government's tally to show a gain of about 168,000 jobs for January.
A Closer Look at Today's ADP Employment Report - In this morning's ADP employment report we got the January estimate of 213K new nonfarm private employment jobs from ADP, a decrease over December's revised 263K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics. But the ADP report includes a wealth of information that's worth exploring in more detail.Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data in April 2002. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. As we see in the chart above, the trend peaked 20 months before the last recession and went negative around the time that the NBER subsequently declared as the recession start. At present, the six-month moving average has been hovering in a relatively narrow range around 200K new jobs since around the middle of 2011.ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Services. Here is the same chart style illustrating the two. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. The trend in Goods Producing jobs went negative over a year before the last recession. Interestingly, the Goods Producing jobs saw an uptick in late 2016 that has continued. For a sense of the relative size of Services over Goods Producing employment, the next chart shows the percentage of Services Jobs across the entire series. The latest data point is just fractionally below the record high. There are a number of factors behind this trend. In addition to our increasing dependence of Services, Goods Production employment continues to be impacted by automation and offshoring. The percentage in the chart above began decreasing in early 2015 with no true bounceback since.For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a snapshot of the five select industries tracked by ADP. The two things to note here are the relative sizes of the industries and the relative trends. Note that Construction and Manufacturing are Production industries whereas the other three are Service Providing. For a longer-term perspective on the Goods Producing and Service Providing employment, see our monthly analysis, Secular Trends in Employment: Goods Producing Versus Services Providing, which is based on data from the Department of Labor's monthly jobs report reaching back to 1939.
January Employment Report: 304,000 Jobs Added, 4.0% Unemployment Rate - From the BLS: Total nonfarm payroll employment increased by 304,000 in January, and the unemployment rate edged up to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several industries, including leisure and hospitality, construction, health care, and transportation and warehousing.Both the unemployment rate, at 4.0 percent, and the number of unemployed persons, at 6.5 million, edged up in January. The impact of the partial federal government shutdown contributed to the uptick in these measures. Among the unemployed, the number who reported being on temporary layoff increased by 175,000. This figure includes furloughed federal employees who were classified as unemployed on temporary layoff under the definitions used in the household survey. The change in total nonfarm payroll employment for November was revised up from +176,000 to +196,000, and the change for December was revised down from +312,000 to +222,000. With these revisions, employment gains in November and December combined were 70,000 less than previously reported. In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $27.56, following a 10-cent gain in December. Over the year, average hourly earnings have increased by 85 cents, or 3.2 percent.
Payrolls surge by 304,000, smashing estimates despite government shutdown - Job growth in January shattered expectations, with nonfarm payrolls surging by 304,000 despite a partial government shutdown that was the longest in history, the Labor Department reported Friday. The unemployment rate ticked higher to 4 percent, a level where it had last been in June, a likely effect of the shutdown, according to the department. However, officials said federal workers generally were counted as employed during the period because they received pay during the survey week of Jan. 12. On balance, federal government employment actually rose by 1,000. Economists surveyed by Dow Jones had expected payrolls to rise by 170,000 and the unemployment rate to hold steady at 3.9 percent. In all, it was a powerful performance at a time when economists increasingly have said they expect growth to slow in 2019. January marked 100 months in a row of positive job creation, by far the longest streak on record. Stock futures and Treasury yields jumped in response to the better-than-expected report. The news was not all good, though, as data revisions pushed previous numbers lower. December's big initially reported gain of 312,000 was knocked all the way down to 222,000, while November's rose from 176,000 to 196,000. On net, that took the two months down by 70,000, bringing the three-month average to 241,000. That's still well above the trend that would be common this far into an economic expansion dating back 9½ years. For the full year of 2018, the average monthly gain was 223,000.A separate measure of unemployment that takes into account discouraged workers and those holding part-time positions for economic reasons jumped to 8.1 percent from 7.6 percent, with the January reading being around where it was in January 2018. Among individual groups, the unemployment rate for Hispanics jumped to 4.9 percent from 4.4 percent in December. The rate for African-Americans rose to 6.8 percent from 6.6 percent while Asians saw a decline to 3.1 percent from 3.3 percent. The rate for whites was 3.5 percent, a notch higher than December's 3.4 percent. The job creation saw muted wage growth, with average hourly earnings rising just 3 cents on the month, or 0.1 percent, well below the 0.3 percent expected gain. On a year-over-year basis, though, that still amounted to a 3.2 percent increase, consistent with the past few months and around the highest levels of the recovery.A Bureau of Labor Statistics official estimated that the shutdown had "no discernable impacts" on the ability to make estimates, though there was some effect on the numbers otherwise. The most notable came in the count of those working part-time for economic reasons, often referred to as the underemployed. That total jumped nearly 11 percent to 5.1 million.
January Employment Report: 304,000 Jobs Added, 4.0% Unemployment Rate (Graphs added) - From the BLS: Total nonfarm payroll employment increased by 304,000 in January, and the unemployment rate edged up to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several industries, including leisure and hospitality, construction, health care, and transportation and warehousing....Both the unemployment rate, at 4.0 percent, and the number of unemployed persons, at 6.5 million, edged up in January. The impact of the partial federal government shutdown contributed to the uptick in these measures. Among the unemployed, the number who reported being on temporary layoff increased by 175,000. This figure includes furloughed federal employees who were classified as unemployed on temporary layoff under the definitions used in the household survey....The change in total nonfarm payroll employment for November was revised up from +176,000 to +196,000, and the change for December was revised down from +312,000 to +222,000. With these revisions, employment gains in November and December combined were 70,000 less than previously reported....In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $27.56, following a 10-cent gain in December. Over the year, average hourly earnings have increased by 85 cents, or 3.2 percent.…[Annual Revision] In accordance with annual practice, the establishment survey data released today have been benchmarked to reflect comprehensive counts of payroll jobs for March 2018. These counts are derived principally from the Quarterly Census of Employment and Wages (QCEW), which counts jobs covered by the Unemployment Insurance (UI) tax system. ... Thetotal nonfarm employment level for March 2018 was revised downward by 1,000(-16,000 on a not seasonally adjusted basis, or less than -0.05 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 304 thousand in January (private payrolls increased 296 thousand).Payrolls for November and December were revised down 70 thousand combined. This graph shows the year-over-year change in total non-farm employment since 1968.In January the year-over-year change was 2.807 million jobs.The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate increased in January to 63.2%. 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 increased to 60.7% (black line). The fourth graph shows the unemployment rate.The unemployment rate increased in January to 4.0%. This was well above the consensus expectations of 158,000 jobs added, however November and December were down by 70,000 combined. A strong report.
January jobs report: a tale of two almost diametrically opposed components --HEADLINES:
- +304,000 jobs added
- U3 unemployment rate rose 0.1% from 3.9% to 4.0%
- U6 underemployment rate rose 0.5% from 7.6% to 8.1%
- Not in Labor Force, but Want a Job Now: declined -73,000 from 5.327 million to 5.254 million
- Part time for economic reasons: rose +490,000 from 4.657 million to 5.147 million
- Employment/population ratio ages 25-54: rose +0.2% from 79.7% to 79.9%
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.03 from $23.09 to $23.12, up +3.4% YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
- the average manufacturing workweek fell -0.1 hours from 40.9 hours to 40.8 hours. This is one of the 10 components of the LEI.
- Manufacturing jobs rose by +13,000. YoY manufacturing is up +261,000.
- construction jobs rose by +52,000. YoY construction jobs are up +338,000.
- temporary jobs rose by +1000. YoY these are up +146,000.
- the number of people unemployed for 5 weeks or less rose by +199,000 from 2,126,000 to 2,325,000. The post-recession low was set eight months ago at 2,034,000.
- Manufacturing jobs rose an average of +22,000/month in the past year vs. the last seven years of Obama's presidency in which an average of +10,300 manufacturing jobs were added each month.
- Coal mining jobs fell -100 for an average of +150/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
- November was revised upward by +20,000, but December was revised downward by -90,000, for a net change of -70,000.
- Overtime declined -0.1 hour from 3.6 hours to 3.5 hours.
- the index of aggregate hours worked for non-managerial workers rose by 0.2%.
- the index of aggregate payrolls for non-managerial workers rose by 0.3%.
SUMMARY: The establishment and household surveys told very different stories this month, encapsulated by the 304,000 monthly gain in the former vs. a -438,000 decline in the latter. While the former is up almost 3 million in the last 12 months, the latter fell below a 1 million gain over the same period. To some extent this is due to the government shutdown affecting the household report, but not the establishment report (per the BLS). But it doesn’t explain everything. Most importantly, of the four leading components in the establishment survey, one fell (the manufacturing work week), and the other three (manufacturing, construction, and temporary jobs), while positive, showed sharply decelerating growth.
January Payrolls Soar By 304K, Record 100th Consecutive Month Of Job Gains - It's official: January marked the record 100th consecutive month of consecutive job growth, and it did so in style, with the US adding a whopping 304K jobs last month, nearly double the 165K expected, however much of this appears to have come at the expense of a revised December number which was revised lower from 312K to 222K. The change in total nonfarm payroll employment for November was revised up from +176,000 to +196,000, and as noted above, the change for December was revised down from +312,000 to +222,000. With these revisions, employment gains in November and December combined were 70,000 less than previously reported. After revisions, job gains have averaged 241,000 per month over the last 3 months. Curiously, according to the report, "there were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings from the establishment survey", and yet household employment fell by 251,000 to 156.694 million thanks to the shutdown, which also explains the rise in the U-3 and U-6 unemployment rates. Perhaps more importantly, the average hourly earnings grew by 3.2% for a second consecutive month, with December revised slightly lower from 3.3% to 3.2%. However, on a monthly basis, earnings rose only 0.1%, the lowest rate since October 2017, and below the 0.3% expected increase, providing some more fuel to the Fed's dovish fire. In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $27.56, following a 10-cent gain in December. Over the year, average hourly earnings have increased by 85 cents, or 3.2 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $23.12 in January.The average workweek for all employees was unchanged at 34.5 hours in January. In manufacturing, both the workweek and overtime decreased by 0.1 hour to 40.8 hours and 3.5 hours, respectively. The average workweek for production and nonsupervisory employees on private nonfarm payrolls held at 33.7 hours. The unemployment rate rose again, printing at 4.0%, up from 3.9% last month, and above the 3.9% expected. Of note, the underemployment (U-6) rate, saw a big jump, from 7.6% to 8.1%, rising by the most since May 2009.
January Jobs: Another upside surprise shows the benefits of closing in on full employment. Jared Bernstein - The US labor market just keeps on rolling along, turning in one good jobs report after another. Payroll gains continue to outpace expectations, wages are handily beating inflation while not pushing it up much, participation continues to suggest more room-to-run than most economists expected, and even the slight uptick in the unemployment rate last month, to 4 percent, was likely a temporary blip caused by the government shutdown (more detail on that below). The underemployment rate, which also spiked last month, was another temporary victim of the shutdown, causing a sharp, temporary increase in involuntary part-timers (those working part-time who want to work full-time). These measures of increased slack should fully reverse in coming months, assuming the government remains open, of course. Payrolls were up 304,000 in the first month of 2019, well ahead of economists’ expectations for a gain of about 170,000, and the jobless rate ticked up a tenth to 4 percent. As noted, the uptick in the jobless rate is likely due to the shutdown and should fully reverse next month. The big jobs number for December was revised down significantly, from 312K to 222K, and other revisions to today’s report (e.g., a small annual benchmark revision) suggest that we should smooth out the monthly data to better discern the underlying signal. In other words, cue the JB/KB (Kathleen Bryant, who does all the work on this report) monthly smoother! It shows average monthly payroll gains over the past 3 months to be a very robust for this stage of the expansion: 241,000. The other bars, which take monthly averages over longer periods, are around the same height, implying an underlying monthly trend slightly north of 200,000. This is well above what most economists believed sustainable, given estimates of “supply-side constraints,” i.e., the size of the available labor pool. Importantly, it appears this constraint is less binding than many thought, meaning there’s more room-to-run in the job market, and that we’re closing in on, but not yet at, full employment. Participation measures are a bit hard to compare this month because of changes to the population weights in the survey (the weights are used to make the survey sample representative of the national population), but data provided in the report suggest participation ticked up in January to 63.2 percent, the highest rate since September 2013. The closely watched prime-age employment rate ticked up significantly for men, from 86.1 to 86.5 percent, and was up one-tenth of a point for women as well, from 73.4 to 73.5 percent (again, this monthly number should be handled with care due to the weighting change, but the underlying, positive trend is real and important). The tight job market continues to generate near-cyclical highs in terms of year-over-year wage gains. Overall private hourly wage growth fell back slightly to 3.2 percent, from 3.3 percent in both November and December. For middle-wage workers–the 80 percent of the workforce in blue-collar or non-managerial jobs–wage growth was 3.4 percent. My estimate for January inflation (the official change does not get released until later this month) is 1.6 percent, driven down by low energy prices. That implies mid-level, real wage gains of 1.8 percent, a solid increase in buying power for these workers, many of whom have long been left behind (of course, we’re talking averages here, and we know that even now, significant pockets of labor slack still persist in some places around the country).
Comments on January Employment Report – McBride - The headline jobs number at 304 thousand for January was well above consensus expectations of 158 thousand, however the previous two months were revised down 70 thousand, combined. The unemployment rate increased to 4.0%, due to government employees on furlough being counted as unemployed in the household survey (but jobs counted in the establishment survey). Overall this was a strong report. In January, the year-over-year employment change was 2.807 million jobs. That is solid year-over-year growth. Wage growth was at expectations in January. From the BLS: "In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $27.56, following a 10-cent gain in December. Over the year, average hourly earnings have increased by 85 cents, or 3.2 percent." This graph is based on “Average Hourly Earnings” from the Current Employment Statistics (CES) (aka "Establishment") monthly employment report. Note: There are also two quarterly sources for earnings data: 1) “Hourly Compensation,” from the BLS’s Productivity and Costs; and 2) the Employment Cost Index which includes wage/salary and benefit compensation. The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees. Nominal wage growth was at 3.2% YoY in January. 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 increased in December to 82.6%, and the 25 to 54 employment population ratio was unchanged at 79.9%. The number of persons working part time for economic reasons has been generally trending down. The number increased sharply in January, probably as a result of the government shutdown. 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 sharply to 8.1% in January. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.252 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.306 million in January. Summary: The headline jobs number was well above expectations, however the previous two months were revised down. The headline unemployment rate increased to 4.0% due to the government shutdown. Some of the quirky aspects of the employment report were due to the government shutdown (rise in the unemployment rate, sharp rise in "Part Time for Economic Reasons" workers, and the sharp rise in U-6.) My guess is most of the rise in Part Time was related to private sector workers getting fewer hours due to the shutdown, however some of the increase might be related to government workers taking part time jobs to pay the bills (as a reminder, the establishment report is for jobs - and government employees on furlough taking part time jobs would be counted as having two jobs).
Overall, this was a strong report.
Where The Record Government Shutdown Can Be Spotted In Today's Jobs Report --On the surface, today's blistering jobs report which notched the 100th consecutive monthly gain in payrolls in style, with some 304K (estimated) jobs added to the US economy, was not impacted by the record government shutdown which lasted for nearly the entire duration of January, with the BLS stating that "there were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings from the establishment survey." To justify why the BLS "pro formad" the jobs report, it explained that "employment in federal government was essentially unchanged in January (+1,000). Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received pay (or will receive pay) for the pay period that included the 12th of the month." And yet it is not true that the shutdown did not affect the jobs report. For one thing, as the BLS says in the very first line of the jobs report, "Both the unemployment rate, at 4.0 percent, and the number of unemployed persons, at 6.5 million, edged up in January. The impact of the partial federal government shutdown contributed to the uptick in these measures,"Next, employment as measured by the Household Survey, actually tumbled by 251K to 156.694MM, with the slide impacting both the U3 and U6 unemployment rates which rose to multi-year highs as the total level of the civilian labor force was roughly unchanged.Third, there was yet another place where the government shutdown impacted the jobs report: as the BLS notes, the number of persons employed part time for economic reasons (i.e., involuntary part-time workers) increased by about one-half million to 5.1 million in January. This was the biggest increase since 2012; nearly all of this increase occurred in the private sector and according to the report, "reflects the impact of the partial federal government shutdown" (persons employed part time for economic reasons would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs). This is shown in the chart below. Or maybe the jobs report wasn't strong at all for another, far simpler reason: much more of its was estimated than normal. As Bloomberg's Andrew Cinko warns, we should probably brace ourselves for another big revision to the job-market data when February rolls around. That's because the survey response rate for January was even lower than December's woefully weak rate: consider that today's report was based on a 60.7% response rate; December's initial estimate was based on a 61.0% rate, which rose to 88.3% for today's revised data.
GM to lay off 4,250 salaried workers in North America starting Monday --General Motors will begin laying off 4,250 North American salaried workers Monday morning as part of a sweeping restructuring announced in November that includes the closure of five plants and the elimination of 15,000 jobs. The plan includes the destruction of 15 percent of the company’s 54,000 North American salaried jobs.According to one press report, the jobs massacre will take the form of “rolling layoffs” that will continue until the end of the month. Three assembly plants—Lordstown, Ohio; Detroit-Hamtramck; and Oshawa, Ontario—along with Warren Transmission in Michigan and a propulsion plant in Maryland—are slated to close by the end of the year, devastating entire towns and cities.One report said that GM management was determined to begin the layoffs before the company releases its fourth quarter 2018 and full year 2018 earnings reports on Wednesday, which are expected to show a drop in profits. This underscores the fact that Wall Street is cracking the whip on GM and the rest of the auto giants to press ahead with cost-cutting and stepped up attacks on the workers in order to drive up stock prices and the speculative profits of the banks, hedge funds and big investors. GM has said the job cuts and plant closings will free up $6 billion in cash, but the automaker has spent $10.6 billion since 2015 buying back its own shares in order to fatten the portfolios of the financial oligarchs. The cuts have generated enormous anger and opposition among autoworkers in the US and Canada, who have never recovered from job cuts and concessions imposed with the collaboration of the auto unions as part of the Obama administration’s 2009 forced bankruptcy and restructuring of GM. The cuts will further impoverish regions in both the US and Canada that have been ravaged by decades of deindustrialization.
Walmart is hiring hundreds of truck drivers and paying them close to $90,000 a year - Amid a mass nationwide truck driver shortage, Walmart has upped the ante by raising driver salaries to $87,500 a year, on average, beginning this February, in a bid to attract the hundreds of workers it needs to fill out its fleet in 2019.The retail giant hired more than 1,400 new drivers last year, but as roughly two-thirds of the nation's freight is transported by truck and consumer demand for its wares increased last year — same-store sales grew 3 percent during 2018 — the company needs another large batch of fresh drivers to keep it running.But the ultra-low unemployment rate and the job's challenging on-the-road lifestyle mean there are fewer workers interested in taking these roles. The American Trucking Association estimates there are 48,000 vacant trucking jobs, which may be why Walmart announced its wage increase.Its drivers will earn an additional one cent per mile and extra pay for every arrival, bringing the average annual compensation to $87,500 and its all-in rate close to 89 cents per mile. A salary just shy of $90,000 will definitely tip the scale in Walmart's favor as its competes for potential drivers. The median annual wage for most tractor-trailer truck drivers across the U.S. is $44,500, according to the Bureau of Labor Statistics, or about $43,000 less than what Walmart says it will pay employees. And only 10 percent of truckers earn above $64,000.
7th Circuit Rules Age Discrimination Law Does Not Include Job Applicants --The US Court of Appeals for the Seventh Circuit decided in Kleber v. CareFusion Corporation last Wednesday that disparate impact liability under the Age Discrimination in Employment Act (ADEA) applies only to current employees and does not include job applicants. The case was brought by Dale Kleber, an attorney, who applied for a senior position in CareFusion’s legal department. The job description required applicants to have “3 to 7 years (no more than 7 years) of relevant legal experience.” Kleber was 58 at the time he applied and had more than seven years of pertinent experience. CareFusion hired a 29-year-old applicant who met but did not exceed the experience requirement. Kleber filed suit, pursuing claims for both disparate treatment and disparate impact under the ADEA. The Chicago Tribune notes in Hinsdale man loses appeal in age discrimination case that challenged experience caps in job ads that “Kleber had out of work and job hunting for three years” when he applied for the CareFusion job. Let’s start with some basics, as the US Equal Employment Opportunity Commission (EEOC) set out in a brief primer on basic US age discrimination law entitled Questions and Answers on EEOC Final Rule on Disparate Impact and “Reasonable Factors Other Than Age” Under the Age Discrimination in Employment Act of 1967. The EEOC began with a brief description of the purpose of the ADEA: Congress enacted the ADEA in 1967 because of its concern that older workers were disadvantaged in retaining and regaining employment. The ADEA also addressed concerns that older workers were barred from employment by some common employment practices that were not intended to exclude older workers, but that had the effect of doing so and were unrelated to job performance. The district court dismissed Kleber’s disparate impact claim, on the grounds that the text of the statute- (§ 4(a)(2))- did not extend to outside job applicants. Kleber then voluntarily dismissed his separate claim for disparate treatment liability to appeal the dismissal of his disparate impact claim. No doubt he was aware – either because he was an attorney, or because of the legal advice received – that it is much more difficult to prevail on a disparate treatment claim, which would require that he establish CareFusion’s intent to discriminate.
Many Families May Need Months to Recover From the Shutdown - Ever since the government shutdown ended last Friday, Yvette Hicks said her cable company, her electric company, the bank that processes her auto-loan payments, and her life-insurance company have been calling her “back to back to back.” They want to know when they’ll be paid. Hicks, a 40-year-old security guard working as a contractor for the federal government, had been wondering the same thing about her own income, having gone without work or pay during the 35-day shutdown. During that time, she had to dip into her savings so that the electric company didn’t cut off power to her home in Washington, D.C., and she was forced to ration her children’s asthma medication—they needed it every four hours, but Hicks couldn’t afford to keep up that frequency. With bills piling up over the past month, she estimates that even now that she’s back to work, it’ll take until “the end of March, maybe” for her to get her finances back to where they were before the shutdown. Hicks is one of the millions of Americans whose livelihoods were upended by the longest government shutdown in U.S. history. Just because that shutdown is over doesn’t mean that it isn’t still shaping the lives of American families, including contractors like Hicks who didn’t work and likely won’t receive back pay, and the roughly 800,000 federal workers who will. The individual stresses—both financial and emotional—may have eased, but they persist even as people return to their working rhythms.
The lowest-paid shutdown workers aren’t getting back pay - Her debt was mounting: $156 for the gas bill, $300 for electricity, $2,000 for the mortgage. She could no longer afford her blood pressure pills. But what stung Audrey Murray-Wright most was rationing the groceries. “I never, ever want to tell my son, ‘Don’t drink all that milk so you can save your brother some,' ” she said, choking up. Murray-Wright, a cleaning supervisor at the National Portrait Gallery, is one of more than a million federal contract workers nationwide whose income halted when the government partly shuttered for 35 days. Unlike the 800,000 career public servants who are slated to receive full back pay over the next week or so, the contractors who clean, guard, cook and shoulder other jobs at federal workplaces aren’t legally guaranteed a single penny. They’re also among the lowest-paid laborers in the government economy, generally earning between $450 and $650 weekly, union leaders say. And even as they began returning to work Monday, they were bracing for more pain. President Trump’s new deadline for Congress to earmark funding for his proposed border wall is Feb. 15. Agencies could close again if no deal is reached. Murray-Wright, who lives in Maryland and has worked at Smithsonian properties for 15 years, said seeing her name back on the schedule has brought little relief. She clocks in again Tuesday but doesn’t expect a paycheck for at least another week. After her husband died last year of a heart attack, she has struggled to support her sons, ages 12 and 15. “I did have a little money in the bank — now that’s all gone,” she said, crying. “I don’t have any help. My electricity might be turned off any day now.”
Foxconn may not build $10B Wisconsin plant Trump touted - Foxconn is reconsidering plans to make advanced liquid crystal display panels at a $10 billion Wisconsin campus, and said it intends to hire mostly engineers and researchers rather than the manufacturing workforce the project originally promised. Announced at a White House ceremony in 2017, the 20-million square foot campus marked the largest greenfield investment by a foreign-based company in U.S. history and was praised by President Donald Trump as proof of his ability to revive American manufacturing. Foxconn, which received controversial state and local incentives for the project, initially planned to manufacture advanced large screen displays for TVs and other consumer and professional products at the facility, which is under construction. It later said it would build smaller LCD screens instead. He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high. "In terms of TV, we have no place in the U.S.," he said in an interview. "We can't compete." Earlier this month, Foxconn, a major supplier to Apple, reiterated its intention to create 13,000 jobs in Wisconsin, but said it had slowed its pace of hiring. The company initially said it expected to employ about 5,200 people by the end of 2020; a company source said that figure now looks likely to be closer to 1,000 workers. Heavily criticized in some quarters, the Foxconn project was championed by former Wisconsin Governor Scott Walker, a Republican who helped secure around $4 billion in tax breaks and other incentives before leaving office. Critics of the deal, including a number of Democrats, called it a corporate giveaway that would never result in the promised manufacturing jobs and posed serious environmental risks. The company’s own growth projections and employment goals suggest the taxpayer investment would take at least 25 years to recoup, according to budget think tank the Wisconsin Budget Project.
‘Foxconn Was a Major Con’: Backed by Trump Promises and $4 Billion in Subsidies, Company Admits Factory Jobs Not Coming - naked capitalism Yves here. In 2017, we wrote of Foxconn’s record of cheating on its plant deals and the fact that even if the Wisconsin agreement worked out as planned, the cost to the state per job created was so high as to be a giveaway. Sadly, things played out according to script. President Donald Trump, Wisconsin’s former Republican Gov. Scott Walker, and former House Speaker Paul Ryan (R-Wis.) spent a lot of time at press events and photo-ops last year touting the 13,000 manufacturing jobs Foxconn was supposedly going to create in the U.S., but—as with many of his job claims—the president’s soaring promises are looking increasingly hollow.As Reuters reported on Wednesday, the Taiwanese tech firm—which Walker lured to Wisconsin with over $4 billion in taxpayer subsidies—is now saying “it intends to hire mostly engineers and researchers rather than the manufacturing workforce the project originally promised.”In an exclusive interview with Reuters, Louis Woo, a special assistant to Foxconn chairman Terry Gou, said the company is completely walking back its plan to build $10 billion factory in Wisconsin.“In Wisconsin we’re not building a factory. You can’t use a factory to view our Wisconsin investment,” Woo said. SHOCKER—Foxconn was a MAJOR CON by Trump & Scott Walker. I'd like to hear a presidential candidate start pushing jail time for corporate welfare thieveryhttps://t.co/eHYuqC1vbe — Jordan (@JordanChariton) January 30, 2019 As Reuters notes, FoxConn “initially said it expected to employ about 5,200 people by the end of 2020; a company source said that figure now looks likely to be closer to 1,000 workers. It is unclear when the full 13,000 workers will be hired. But Woo, in the interview, said about three-quarters of Foxconn’s eventual jobs will be in R&D and design—what he described as ‘knowledge’ positions—rather than blue-collar manufacturing jobs.”Trump bragged about his deal with Foxconn to bring jobs to Wisconsin. So far 178 people were hired—but the company is on track to score over $4 billion in incentives. That's $22M per job. #WhatADeal https://t.co/FGfZ9L3IHD
Coal Country Is Dying. All Trump Has Are Lies. Anyone who values the truth knew that Donald Trump was lying when he promised to bring back coal jobs. But to get an idea of just how badly he’s betrayed those who put their faith in him, take a look at this recent report:More U.S. coal-fired power plants were shut in President Donald Trump’s first two years than were retired in the whole of Barack Obama’s first term, despite the Republican’s efforts to prop up the industry to keep a campaign promise to coal-mining states.The trajectory going forward doesn’t look any better. The reason for the decline has been obvious to most people for a long time.Cheap natural gas and the rising use of renewable power like solar and wind have kept electric prices relatively low for years, making it uneconomic for generators to keep investing in older coal and nuclear plants.If Trump actually gave a damn about coal miners, he would have done what Hillary Clinton proposed and invested $30 million to help displaced miners by securing their health care and pension benefits, offering tax credits and job training, and pouring economic development money into coal mining regions. Instead, the president continues his lies and does nothing. Whether out of ignorance, complacency, or malice, the end result is that communities continue to suffer.The industry that once defined and supported the people living there has burned out. In its place are poverty, sickness and addiction…For people who are sick or poor, life in the Coal Region presents a special set of challenges. While they have to travel farther for care, there is no convenient public transportation network. While opioids and meth rip through their communities, there are few treatment options.As they grow older and sicker, the number of family doctors is thinning out. Change is on the horizon, but it won’t address all the ills that plague the region.
How a California officer protected neo-Nazis and targeted their victims - The testimony of a California police officer leading the inquiry into a series of stabbings at a neo-Nazi rally indicated that he targeted leftwing activists and victims rather than focusing his investigation on armed white supremacists. The officer, Donovan Ayres, a 12-year-veteran of the California highway patrol, admitted he pursued information on the political affiliations and online activity of leftwing activists and victims. He testified Tuesday as a key witness in the state’s ongoing case against three anti-fascist activists charged with assault and “rioting” during a brawl between neo-Nazis and counter-protesters at the state capitol in June 2016. Ayres was tasked with investigating the violence that erupted at the event, including the stabbing and beating of at least eight anti-fascist protesters. But his testimony in a packed courtroom earlier this week, along with hundreds of pages of reports he wrote, have revealed the officer’s acquiescence to the neo-Nazis and the way he repeatedly advocated they not face any criminal consequences. Ayres told the court that he filed a search warrant to access the Facebook accounts of the leftist protesters and anti-fascists, but chose not to seek equivalent information about neo-Nazi suspects – an extraordinary move for a law enforcement leader investigating far-right violence. He also resisted describing the political affiliations of individual men on the neo-Nazi side.
Costly, ineffective, cruel: How Oregon ensnares mentally ill people charged with low-level crimes In Oregon, taxpayers spend as much as $35 million a year to provide institutionalized care to mentally ill people charged with misdemeanors, many of whom are homeless, a first-of-its-kind analysis by The Oregonian/OregonLive found. Nearly all those patients eventually find themselves dumped back out on the street with little to no support. Almost one in five are readmitted to the mental hospital within a year under new charges. A defendant’s entry into the aid and assist system is triggered when an arrestee’s mental fitness appears in serious question. Typically, a judge orders them to the Oregon State Hospital for a psychological evaluation, which can last mere hours or up to 30 days. A defendant’s criminal case resumes if the evaluation determines the person “able” to aid and assist. In a small number of cases in which defendants are found “never able” to recover, the charges are dismissed and they are released from jail. Most mentally ill defendants, however, are found “unable” to help with their defense and are sent back to the state hospital for treatment until they can. They can remain there as long as the maximum sentence for the crimes with which they are charged – far longer than the typical person convicted of a misdemeanor would be jailed. Yandell, for example, spent 52 days in jail waiting for a psychological evaluation for charges that would ordinarily have cost five days in jail.
Attackers Can Track Kids’ Locations Via Connected Watches - Over the last year of looking at kids GPS tracking watches we have found some staggering issues. With these devices it almost seems that having multiple security issues is the new normal. While parents and guardians may get a feeling of security from using these devices, our testing and research shows it’s just that, a “feeling”. A couple of years ago our friends at the Norwegian Consumer Council published the excellent ‘WatchOut’ research that demonstrated trivial access to kids GPS locations through vulnerable tracker watches, including the Gator. It received plenty of press coverage and resulted in several kids tracker watches taking swift action to secure their systems. A year on, we decided to have a look at the Gator watch again to see how their security had improved as a result of their actions. Guess what: a train wreck. Anyone could access the entire database, including real time child location, name, parents details etc. Not just Gator watches either – the same back end covered multiple brands and tens of thousands of watches The Gator web backend was passing the user level as a parameter. Changing that value to another number gave super admin access throughout the platform. The system failed to validate that the user had the appropriate permission to take admin control! This means that an attacker could get full access to all account information and all watch information. They could view any user of the system and any device on the system, including its location. They could manipulate everything and even change users’ emails/passwords to lock them out of their watch.
Schools Are Locking Students’ Phones Away to Help With Concentration - Students at a California high school are getting less screen time since the school implemented a ban on cellphone use during the school day. After one teacher at San Lorenzo High School brought pouches, created by the tech start-up Yondr, into her classroom to lock away students’ phones, the entire school began using them from the beginning of the school day at 8 a.m. until the end of the day at 3:10 p.m.According to a 2018 study from the Pew Research Center, more than half of teens said they felt loneliness, anxiety, or upset in the absence of a cellphone. The study also found that girls were more likely to feel these sentiments than boys. “If something feels weird about modern life to young kids who are dealing with a lot of angst and anxiety in general, maybe it has something to do with relating to the world primarily through a screen eight hours a day,” Yondr’s founder Graham Dugoni told CNBC.Students said they initially felt awkward and annoyed having their phones taken away during the school day, but added that they started to see more teens interacting with each other. One student added that not having a phone in class helped with concentration. In an interview with Wired, Dugoni described attachment to phones as physical. “It’s much more a body thing, so it was always clear to me that whatever solution there is to this problem had to be itself physical and tangible.” He added that because it’s such a physical impulse to frequently check a cellphone, that “it’s going to affect your nervous system and your patterns of thought and social interaction.”
Florida education commissioner advocates widespread privatization --Florida, which already leads the nation in the use of school vouchers and has long been the testing ground for privatization, has a new education commissioner bent on expanding edu-businesses in the state.On January 8, 2019, Republican Richard Corcoran assumed office as Florida’s new education commissioner. In that capacity, he will be governing public education and managing both funding and testing for local school boards. His appointment by newly-elected Republican Governor Ron DeSantis follows a national pattern in which enemies of public education are set loose to preside over public schools to destroy them and open up the “education market” for big business.Corcoran is receiving a salary of $276,000 annually, a fact which in itself explodes the lie that “there is no money” for education. The education commission will be paid a salary that is nearly six times the amount of an average Florida public-school teacher.Meanwhile, as a result of the enormous amount of resources diverted to private education in the state, Florida has the lowest public school per-pupil funding in the nation, coupled with an abysmal 65 percent graduation rate. Corcoran stated last March that if Florida were to “voucherize” the entire school system, it would transform education for the better. “Let the market decide,” he said, adding that the problem with public education is that parents don’t pay schools directly. School vouchers, or educational vouchers, are a “market driven” corporate policy which provides individuals with government-funded certificates for use in private or religious schools. School voucher spending is already $800 million per year in Florida tax revenues. Approximately 300,000 students were enrolled in charter schools during the 2017-18 school year, and about 140,000 students received vouchers, with over 1,700 private schools participating. Last year, Florida vouchers received three times more state funding than its closest competitor, Ohio.
Florida Lawmaker Sourced Anti-Climate Change, Anti-Evolution Bill From Islamophobic Fringe Group -- It's 2019 and Florida lawmakers still want to debate the existence of evolution and human-caused climate change. For that, you can thank longtime state senator and proud son of the Confederacy, Ocala's Dennis Baxley, who recently teamed up with a fringe-right, virulently Islamophobic group to push yet another anti-science bill.Earlier this month, Baxley filed SB 330 — a bill that seemed to, innocently enough, revise the "minimum baseline standards" for what kids are taught in Florida public schools. One of the few additions Baxley proposed was to ensure all "controversial theories and concepts" be "taught in a factual, objective, and balanced manner." That is nothing more than an opening for parents and teachers to challenge allegedly controversial ideas such as climate change and evolution. Baxley got the idea for the bill from the Naples-area group the Florida Citizens' Alliance. The Tampa Bay Times yesterday confirmed the Citizens' Alliance drafted the bill's text to ensure alternative theories on climate change and evolution are taught in Florida's schools. Notably, the vast majority of scientists do not believe there are credible alternatives to the theories of evolution and climate change.The group last made news after then-Governor-Elect Ron DeSantis tapped two of its members to serve on his education advisory team. As New Times has previously reported, the Alliance is virulently Islamophobic, has said LGBTQ people are guilty of "deviant behavior," and claims schools must teach Judeo-Christian values. The connection to Baxley is perhaps unsurprising given the lawmaker's fringe-right past. He is famous for his unabashed love for the Confederacy — he is the descendant of a Confederate soldier and has repeatedly spoken before a pro-Confederate group in Florida. (He even attended a pro-Confederate event mere weeks after the deadly neo-Nazi rally in Charlottesville in 2017.) He seems to make headlines annually for backing utterly insane proposals, such as a 2019 bill he's cosponsoring that seeks to ban the removal of Florida's monuments to the Confederacy.
Millionaire-Driven Education Reform Has Failed. Here’s What Works. - Lynn Parramore - Economist Peter Temin has noted that when societies like the United States split into separate economies of haves and have-nots, there remains one ticket to a better life: education. You’ve likely heard that this ticket is getting shredded. What once made America exceptional — robust investment in public education to prepare kids for life in a democracy — has faded, partly thanks to the efforts of a handful of haves whose money and influence foisted market-based makeovers onto American schools. Over the last few decades, the handiwork of a tiny group of philanthrocapitalists and business tycoons with names like Bill Gates and the Waltons, of Walmart fame, have channeled their vision of corporate-style education reform into a series of deeply flawed programs, from George W. Bush’s “No Child Left Behind,” based on a fraudulent testing regime in Texas, to President Obama’s “Race to the Top,” which fused teacher evaluations to test scores and pushed to privatize more schools. Today, thanks to this incredible shrinking vision of education, the average American student endures over a hundred standardized tests by the time of 12thgrade rolls around. As if that weren’t enough, misguided assessment-and-accountability regimes have burdened public schools with frightened teachers, stressed students, narrowed curricula, and massive cheating scandals. All the while, increasing numbers of both for-profit and non-profit charters — many of them focused on enriching executives — drain students and scarce resources from public schools. Journalist Andrea Gabor, author of “After the Education Wars: How Smart Schools Upend Business Reform,” is among the growing chorus concluding that the application of outdated, market-based models to a complex process like education has done more to exacerbate social problems than improve the performance of American children. As she sees it, the widespread embrace of approaches obsessed with the production of math and English language test scores “over civics and learning for learning’s sake” even helped spawn an electorate susceptible to the demagoguery of Donald Trump. But Gabor has good news, too. While dilettante corporate reformers were making headlines with their quick-and-dirty education schemes, some far-sighted educators, active citizens, and imaginative thinkers across the nation have been swimming against the tide of the top-down, millionaire-driven reform movement with approaches to learning that are not only much more democratic, but remarkably effective and better attuned to the needs of 21st century students.
Virginia students learn in trailers while state offers Amazon huge tax - As freezing rain poured down on Virginia last week, a student dressed in only a light red sweater made a mad 40-yard dash from her modular trailer classroom across the parking lot into the warmth of McLean high school in Fairfax county. Due to overcrowding, more than 22,000 students in Fairfax county receive their education in cheaply constructed plywood trailers, often with visible signs of green mold, like those parked next to the baseball fields next to McClean high school. Those trailers, the poor state of school funding in general, low teacher pay and now the huge tax breaks the state is giving to lure in Amazon have led the teachers to strike on Monday, the start of the latest in a series of strikes by educators across the US. In Fairfax county, the third richest county in America, there are over 800 trailers serving as temporary classrooms because the school district cannot afford to build new classrooms. “Our staff often likes to say that Fairfax county public schools is the biggest trailer dealer on the east coast of the United States” joked school board member Ryan McElveen. “We own 820 trailers, more than any other entity on the entire east coast”. Throughout Virginia, school districts own thousands of cheaply constructed trailers that present health and safety risks. The trailers are often poorly heated, their plywood construction makes them susceptible to mold, and in some schools, students have even reported accidentally falling through their floors.
Virginia teachers and the fight against social inequality --Teachers from across Virginia marching today are joining a growing movement of teachers, students and workers in the US and around the world against social inequality and attacks on public education. More than 33,000 teachers in Los Angeles just conducted a six-day strike, Denver teachers have voted to launch their first strike in 25 years, and Oakland teachers have organized sickouts to oppose the closing of a third of the district’s public schools. Last year, teachers conducted a wave of statewide strikes in West Virginia, Oklahoma, Arizona, Kentucky, Colorado and other states. This is part of a worldwide battle. In southern India, 700,000 teachers and state government employees have been on indefinite strike since Tuesday over job security, pay and retirement rights. “Red Pen” teachers have joined “yellow vest” protesters on the streets of France denouncing crumbling schools, low pay and lack of educational supplies. This follows clashes between educators and police in Greece, and Dutch teachers are scheduled to strike in March.All over the world, workers are fighting to defend their social rights. Some 70,000 workers in Matamoros, Mexico, right across the border from Brownsville, Texas, are engaged in a wildcat strike against sweatshop conditions and poverty wages. Last week, the workers marched to US border and called on their American brothers and sisters to join the fight. This is one fight, the world over. On one side, are hundreds of millions of workers and young people. On the other side, is corporate oligarchy that is demanding the destruction of public education, healthcare and pensions.
Virginia teachers protest education cuts - Several thousand public school teachers and support staff protested outside of Virginia’s State Assembly building in Richmond Monday to demand improved pay and school funding. Virginia teachers are the latest group of educators to stage walkouts and protests against the bipartisan assault on teachers and public education. According to the Washington Post, school districts in Arlington, Prince William and Henrico counties as well as the city of Richmond were forced to call last minute school closures due to the number of teachers calling off of work and effectively carrying out a one-day strike Monday. Like West Virginia, Oklahoma and Arizona, strikes by teachers and other public employees are illegal in the state of Virginia. The protests in Richmond take place less than a week after the unions shut down the six-day strike by 33,000 teachers in Los Angeles, the second largest school district in the US. In Denver, the unions called off a planned strike on Monday in Denver after school officials appealed to Colorado’s Democratic Governor Jared Polis to intervene. Teachers are threatening to strike in Oakland, Sacramento and other California cities. Internationally, 700,000 teachers and government workers continue to strike in Tamil Nadu, India, while in France educators are joining “Red Pen” protests in support of the ongoing Yellow Vests protests. Teachers in Virginia were keenly aware that their struggle and demonstration was an expression of this ongoing class movement of workers, which began in earnest in 2018 with the mass walkouts of West Virginia teachers in the state directly next to them.
Citing $750 Million Tax Break for Amazon While Students Suffer, Teachers Walk Out in Virginia --Fed up with plummeting school funds and low teacher salaries in a state that recently offered hundreds of millions of dollars in tax breaks to one of the world's richest companies, unionized teachers and their allies in Virginia traveled to the state capital on Monday to demand state legislators begin fighting for them and students instead of for powerful corporations.The grassroots group Virginia Educators United and the 50,000-member Virginia Education Association (VEA) urged teachers to take a personal day to lobby state lawmakers and demand more funding for school renovations, teacher pay, and supplies. The call was answered by thousands of educators and supporters, who met on the steps of the capital in Richmond with many chanting, "Fund our schools!" The rally and march comes two months after the trillion-dollar multinational corporation Amazon announced it had selected Northern Virginia as one of the regions where it would set up a new headquarters. In exchange for bringing its business to the state, Democratic Gov. Ralph Northam was prepared to give Amazon $750 million in tax breaks. Meanwhile, teachers across the state have struggled to educate children effectively, with school funding falling by nine percent since 2008's Great Recession. Educators in Virginia earn $9,000 less than the national average, and teachers have told the press about unreliable heating systems, printers, and copiers due to poor funding. The Guardian also reported on Monday about the thousands of poorly insulated plywood trailers owned by Virginia school districts, where tens of thousands of students go to class each day as districts are unable to build new classrooms.
West Virginia teachers angered over renewed attack on public education - In an extraordinary parliamentary session, members of the West Virginia state legislature are attempting to fast-track a “Comprehensive Education Reform” bill that would further eviscerate public education in the state. The debate takes place almost exactly one year after the nine-day strike that galvanized teachers across the US but failed to fix the decades-long defunding of education and public sector health care in the state. Senate Bill 451, championed by state Senate president Mitch Carmichael, a Republican, would introduce charter schools, authorize the use of education savings accounts for private and religious schools, increase class sizes, remove tenure from teachers and principals, eliminate seniority rights during layoffs, and increase punishments for teachers who go on strike, among other anti-public education measures. Of paramount concern to the unions is the omnibus bill’s “payroll protection” clause, which requires annual sign-up for dues checkoff, thereby threatening the organizations’ income stream.At more than 130 pages in length, the bill was read to the full Senate yesterday as angry teachers and parents lined the press galleries and jeered senators. A follow-up demonstration was held in the evening outside the Senate chambers.Teachers in Mingo County, one of the southern coalfield counties whose wildcats last spring sparked the statewide strike, voted on Tuesday by 97 percent for a one-day strike in response to the bill. However, the union’s wording of the proposal contained the caveat “should circumstances surrounding the omnibus education bill merit a work stoppage.” According to local media in Williamson, the sentiment at the meeting of both union and nonunion teachers was overwhelmingly for a strike.
Oklahoma legislators seek to strip teachers of democratic rights --State Republicans in Oklahoma are preparing to introduce a series of bills on February 4 that would punish teachers for striking, participating in political activities and exercising their freedom of speech. The bills are designed to intimidate teachers who are once again considering strike action to win significant improvements in pay and school funding. Tens of thousands of Oklahoma teachers waged a powerful 10-day statewide walkout in April 2018, but state and national unions shut the struggle down and cut a deal with the state’s Republican governor and state legislature that ignored the educators’ most critical demands.The proposed bills from both the state Senate and House of Representatives are in anticipation of another strike as early as 2020. House Bill 2214, authored by state Representative Todd Russ (R-Cordell), includes language to make any walkout or sickout by teachers punishable by arrests, fines and rescinding teaching certifications. The bill would make it illegal for board of education or school district employees “to strike or threaten to strike or otherwise close schools or interfere with school operations as a means of resolving differences with the board of education, the State Department of Education, the State Board of Education, the Legislature or any other public official or public body.” Anyone engaging in such a strike “shall be denied the full amount of his or her wages during the period of such violation,” and the bill states if the person is certified by the State Board of Education, “such certificate shall be permanently revoked.” Strikes by teachers and public employees were made illegal in the 1990s. Last April, teachers defied the anti-strike laws, but local school administrators did not try to keep schools open. State Republicans chose not to employ the laws, relying instead on the unions to smother and end the strike. State Senator Mark Allen (R-Spiro) introduced Senate Bill 574. It requires the 500 school boards in Oklahoma to implement a code of ethics for teachers that would prohibit any political activity, for example, running for office or campaigning on behalf of candidates. It would also prohibit discussing political issues during the school day, or any other time the teacher is considered employed. This is so broad that it could conceivably encompass almost all the time teachers are consumed with school work, which is routinely 16 hours or more.
The International Socialist Organization, Jacobin hail betrayal of Los Angeles teachers’ strike - Bhaskar Sunkara, the editor of Jacobin and former vice chair of the Democratic Socialists of America, made a revealing comment on Twitter January 17, as the United Teachers Los Angeles (UTLA) was preparing to shut down and sell-out the Los Angeles teachers strike.“The DSA and the ISO [International Socialist Organization] sending tacos to striking teachers is pretty good. But the SEP [Socialist Equality Party] is sending them the correct program, and let's not forget that's the most important thing.”Dripping with his characteristic cynicism, Sunkara meant his comment as a snide attack on the SEP and the World Socialist Web Site. How could anyone, after all, consider the most important thing in developing the strike of teachers to be a program and perspective? Clearly, the DSA/ISO’s “Tacos for Teachers” initiative was far more important.Behind the sarcasm was also a worry—that the program advanced by the SEP was winning broad support, and that the UTLA and its allies in the DSA and ISO were losing control of the situation. The ISO and the DSA in fact had and have a political agenda, which is aimed at reinforcing the political domination of the Democratic Party via the trade unions and thereby ensuring that the strike was isolated and defeated. This fact was confirmed five days later, when the UTLA shut down the strike in the most blatantly undemocratic manner possible, giving teachers only a few hours to review and vote on a deal announced by the UTLA and the school district that repudiated all the major demands of the teachers. The conditions surrounding the end of the strike have not gone unnoticed by teachers and the thousands of parents who supported them, and many have voiced their anger at the union on social media. The ISO and the DSA, however, have responded with a campaign of misinformation aimed at presenting the maneuvers of the union to shut down the struggle as a great victory.
Colorado Labor Department blocks Denver teachers’ strike -- The strike by Denver teachers initially set to begin today has been called off following intervention by the Colorado Labor and Employment Department at the request of the Denver Public Schools (DPS). On Tuesday, teachers authorized a strike by a 93 percent margin, after over a year of failed negotiations. Students supporting their teachers had been planning sit-ins today at a number of schools.On Wednesday, DPS Superintendent Susana Cordova petitioned the state government to intervene. The Colorado Labor Department can hold up the strike for as long as 24 days—up to 10 days for the union to respond and up to 14 days for the state to decide. Then if it chooses to attempt to broker a deal, a strike could legally be delayed for up to six months.The Denver Classroom Teachers Association acceded to the process, with union president Henry Roman telling the media, “The district needs to have a serious commitment to come to the table with more funding. As soon as they are willing to bargain and put more money on the table, we’re ready.” Newly-elected Democratic Governor Jared Polis, an advocate of charter schools and multi-millionaire endorsed by the DCTA, signaled his agreement with the intervention and offered to “help” with negotiations. In response to these maneuvers, a crowd of angry educators, joined by supportive parents and students, held an animated protest at the Denver Public Schools board meeting on Thursday. After chanting and marching outside the building, teachers and parents from across the city assembled inside the crowded board meeting and displayed their opposition to decades of deep cuts carried out by the state government. Teachers and students loudly proclaimed their support for a strike and bitterly denounced the criminally low pay of school staff and the general lack of funding for education.
Sacramento school district threatens bankruptcy to extort concessions from teachers - As school districts in Oakland and Los Angeles, California prepare for new spending cuts in the face of widespread teacher and working class opposition, the Sacramento City Unified School District (SCUSD) in the state’s capital is also preparing draconian cuts.SCUSD officials recently announced they have until November to find $16 million in cuts to avoid a state takeover. An additional $16 million in cuts, they said, must be found in advance of the following school year.The Sacramento City Teachers Association (SCTA), has been in contract negotiations with the district for over a year. Negotiations are currently stalled and although the SCTA is threatening to call a strike by the more than 2,800 Sacramento teachers is has not set a timeline or even called a strike authorization vote. In 2017, a strike was averted after the union reached an agreement providing a paltry 2.5 percent salary increase for teachers each year for three years. The last time teachers struck in Sacramento was in 1989.To push through the cuts, the district is relying upon the collaboration of the five district unions covering school employees: the SCTA, United Professional Educators (UPE) and the Service Employees International Union (SEIU) Local 1021. “It’s going to be very difficult for us to achieve the cost savings we need if not all bargaining partners are at the table,” said office of education spokesman Alex Barrios.The SCTA has countered the district’s financial assessments with claims that revenues actually increased by more than $120 million between the 2013-2014 and 2017-2018 school years. In spite of this, the SCTA has already accepted the district’s austerity demands in practice.
Indiana Bill Requires Students To Pass Citizenship Exam To Graduate High School - High school students in Indiana may soon be required to pass the exam traditionally administered to immigrants seeking U.S. citizenship if they hope to receive a diploma. A bill that would make the U.S. Citizenship Test a graduation requirement in Indiana has passed the state's Senate, paving the way for a potential major change to Indiana's graduation requirements come 2020. According to The Hill, Senate Bill 132 passed the Indiana state Senate 31-17 after being introduced earlier this month by state Sens. Dennis Kruse and Jeff Raatz. The bill seeks to make passage of the U.S. Citizenship Test a mandatory requirement for high school graduation at all of the state's public schools beginning in 2020."We have many young people in our country, and in the state of Indiana, who do not know a lot of simple information on our government and on our country and some of our history," Kruse recently told The Times of Northwest Indiana.If passed by the House and signed into law by the state's governor, students who are unable to answer at least 60 of the test's 100 questions would be denied a high school diploma or high school equivalency certificate - even if they'd fulfilled all of the school and state's other graduation requirements. As one might imagine, not everyone (especially on the left) is in favor of this patriot test. State Sen. Eddie Melton (D) told the news outlet he is against the proposal because it would force another graduation requirement on students and add another mandate to teachers."This concerns me as one more mandate that we're going to put on our teachers and our students,""Some students are just not excellent test-takers,” he said. Here is an example of some of the questions (and answers)...
The Data Colleges Collect on Applicants - WSJ - Some colleges, in an effort to sort through a growing number of applications, are quietly tracking prospective students’ online interaction with the schools and considering it in deciding whom to admit. Enrollment officers at institutions including Seton Hall University, Quinnipiac University and Dickinson College know down to the second when prospective students opened an email from the school, how long they spent reading it and whether they clicked through to any links. Boston University knows if prospective students RSVP’d... To determine ‘demonstrated interest,’ some schools are tracking how quickly prospective students open email and whether they click links.
Students protest in Toronto against cuts to financial aid --Students held a protest march and rally in Toronto Friday to oppose the gutting of the Ontario Student Assistance Program (OSAP) by the province’s right-wing Progressive Conservative government led by Premier Doug Ford. Around 2,000 students participated in the march, which began at Yonge-Dundas square at 2 p.m. and proceeded to the provincial legislature at Queens Park. The Ford government’s cuts, announced January 17 by Minister for Training, Colleges, and Universities Merrilee Fullerton, include the elimination of free tuition fees for low income students and the abolition of a six-month grace period for students to start paying back their loans after graduation. The Tories also enforced a devastating 2 to 4 percent cut to university and college budgets through the back door by cutting tuition fees by 10 percent for the 2019-20 academic year, while at the same time freezing provincial grants to colleges and universities. Moses, a visual arts student at Sheridan College, explained how the cuts would impact him. “I’m a part of this whole low-income student thing because of my family in general. I’ve got nothing so I had to depend on OSAP just to get on with school,” he said. “My dad used to work down the street from here at Sun Life Financial. He worked there for almost 30 years, until new management came along and started doing a process of elimination. He went to work one day and his E-card just didn’t work, only to find out a week later that they’re like ‘yeah, we’re dropping you.’ My mom was in retirement for about 20 years because she had a work accident and had to force herself to go back to work even with her injury. I’m busting my butt, at the same time trying to find a part-time job.
So, Just How Bad Is It On College Campuses Today? -- Heather MacDonald tells you how bad it is in the video below.Remember, these are elite schools she's talking about, schools training those who will become the elite leaders of American society in the future. Already, many of these trainees have graduated and moved on to jobs in the media and in large corporations. See, for example, the New York Times or Proctor and Gamble. The only good news as far as I can see is that Homo sapiens is moving steadily toward its own extinction, a fate our species so richly deserves. But until that happens, and our suffering comes to a merciful end, we are sooo fucked.
DHS operated fake university in Michigan to apprehend undocumented immigrants - The Department of Homeland Security (DHS) said it operated a fake university in Michigan to target students who were undocumented immigrants, according to federal indictments unsealed on Wednesday.The documents, reported by The Detroit Free Press, stated that eight people were arrested and indicted for conspiracy to commit visa fraud and harboring undocumented immigrants for profit.Six people were arrested in Detroit, while the other two were taken into custody in Florida and Virginia, the Free Press reported. Prosecutors said students enrolled at the fake university to obtain jobs under a student visa program called CPT (Curricular Practical Training).The indictment said the defendants aided at least 600 undocumented immigrants in illegally remaining, re-entering and working in the U.S. as part of a "pay to stay" scheme.According to the filing, the defendants were taken into custody after facilitating the enrollment of students into a “metro Detroit private university that, unbeknownst to the conspirators, was operated by HSI (Homeland Security Investigation) special agents as part of an undercover operation."“We are all aware that international students can be a valuable asset to our country, but as this case shows, the well-intended international student visa program can also be exploited and abused,” U.S. Attorney Matthew Schneider said in a statement announcing the unsealed indictments. The university, dubbed the “University of Farmington,” had a website touting its credentials and "dynamic business administration and STEM curriculum."
Parents Denied Access to Their Children's Medical Records By Law - — A Coralville father recently found out he will no longer have access to his 12-year-old daughter's medical records, so he asked KCRG’s I9 investigative team to investigate. Kevin Christians, of Coralville, said a letter triggered his concerns alerting him he was losing access to his daughter's medical records. At the University of Iowa Hospitals and Clinics, parents are no longer able to see test results, messages from doctors and other information once a child turns 12. The letter said the hospital wants children at that age to be more active in their own health care. Christians said he believes 12 is too young to keep parents in the dark. "If you get locked out of being able to see the health care records for your child, that makes parenting even that much more difficult, in my opinion," said Christians. The letter from UIHC does not give the full explanation. I9 found the practice stems from federal law and all hospitals have a similar policy but not all of them start at the same age. I9 has discovered one medical organization where the age is 10.
Major DNA Testing Company Sharing Genetic Data With the FBI Bloomberg (Kevin W). Original story: One Of The Biggest At-Home DNA Testing Companies Is Working With The FBI - Family Tree DNA, one of the largest private genetic testing companies whose home-testing kits enable people to trace their ancestry and locate relatives, is working with the FBI and allowing agents to search its vast genealogy database in an effort to solve violent crime cases, BuzzFeed News has learned. Federal and local law enforcement have used public genealogy databases for more than two years to solve cold cases, including the landmark capture of the suspected Golden State Killer, but the cooperation with Family Tree DNA and the FBI marks the first time a private firm has agreed to voluntarily allow law enforcement access to its database. While the FBI does not have the ability to freely browse genetic profiles in the library, the move is sure to raise privacy concerns about law enforcement gaining the ability to look for DNA matches, or more likely, relatives linked by uploaded user data. For law enforcement officials, the access could be the key to unlocking murders and rapes that have gone cold for years, opening up what many argue is the greatest investigative tactic since the advent of DNA identification. For privacy advocates, the FBI’s new ability to match the genetic profiles from a private company could set a dangerous precedent in a world where DNA test kits have become as common as a Christmas stocking stuffer.
Newsom makes health care the centerpiece of California’s resistance to Trump - For California under Gov. Gavin Newsom, the resistance to President Donald Trump is about health care. Much as his predecessor Jerry Brown made climate change the state’s big challenge to Trump, Newsom has embarked on a health agenda that includes extending care to undocumented adults and direct government negotiation of drug prices. ..Unlike the other potential and announced 2020 candidates pushing universal health care, Newsom isn't just talking theoretically, so there’s much more at risk. If his innovations in expanding Obamacare, extending Medicaid to undocumented immigrants — itself a jab at Trump’s hard-line immigration policies — and negotiating lower drug prices work, he could emerge as a hero of the Democratic Party. His policies could be templates for candidates pushing ahead on universal health care — an aspiration shared by Democrats even if they are still divided on what specific policies to pursue and how quickly to pursue them. “In his first day in office, Gov. Newsom established himself as a major force on health care among Democrats and in the states, and that was never true of Gov. Brown,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. But the strategy carries a lot of peril. The push to extend care will cost the state hundreds of millions of dollars and could stress health systems by attracting more undocumented immigrants. Meanwhile, Newsom’s reluctance to make single-payer health care his top priority after campaigning on it could antagonize the political left, including the California Nurses Association, which has thwarted past health legislation it deemed too timid.
The Unsung Role of the Pharmacist in Patient Health - Aaron Carroll - We know many people end up with a risky pileup of prescribed medications. Many efforts have been made, with varied success, to correct this problem. Yet we’ve usually focused on physician behavior, when there’s another powerful lever: pharmacists.About 30 percent of older adults in the United States and Canada filled a prescription in the last few years for one of many medications that the American Geriatrics Society recommends they avoid. Such drugs can lead to more harm — like cognitive impairment or falls — than good, and often safer options are available.“Older adults are taking an awful lot of pills these days — 66 percent take five drugs or more per day, and 27 percent take 10 or more per day — so if some of those pills are no longer necessary and may even be causing harm, why not ask if it is time to deprescribe?” said Dr. Cara Tannenbaum, a professor of medicine and pharmacy at the University of Montreal, and director of the Canadian Deprescribing Network.It’s not easy to get patients off such drugs, though. Physicians often don’t have enough information about what patients are taking, or may lack the time to talk to patients about these medications. They fear that stopping the drugs might cause harm or make patients upset. To explore the possible role of pharmacists, Dr. Tannenbaum conducted a large randomized controlled trial over four years in community pharmacies in Quebec. The results of the study were recently published in JAMA.
How a Tainted Heart Drug Made in China Slipped Past the FDA - U.S. regulators sent a stark warning to American consumers last year: A Chinese-made heart drug taken by millions of people was contaminated with a possible cancer-causing chemical.The Food and Drug Administration oversaw a recall of the tainted pills. But even as it did so, the agency that helps safeguard a global supply chain of drugs was conducting fewer inspections of pharmaceutical plants in the country where the problem originated.Treatments made by Chinese companies now account for almost one of every 10 generic drugs cleared by the FDA for sale. But agency inspections meant to ensure that approved drugs are meeting U.S. standards fell almost 11 percent, to 125, in China for the fiscal year that ended Sept. 30, compared with the previous year, according to data obtained by Bloomberg through public-records requests. Using hundreds of pages of the U.S. government documents, Bloomberg has spent the last year reporting on a supply chain that reaches around the world and ends inside American medicine cabinets. While overall inspections of that network are down, records show that those that do get done—from West Virginia to China and India—raise doubts about the data meant to prove drugs are safe and effective. Those doubts are sometimes overruled by FDA management. At the plant that set off the heart-drug recall in July of last year, an FDA inspector had determined in May 2017 that some of the drugs it was supplying to the American market might be substandard, according to an inspection report obtained by Bloomberg. The FDA inspector’s 2017 visit had turned up a number of problems. The Chinese drugmaker, Zhejiang Huahai Pharmaceutical Co. Ltd., had omitted from official records quality-test results that showed unnamed drugs failed to meet U.S. standards, and instead recorded passing grades, the FDA inspector wrote in his report. The inspector recommended that the agency send Zhejiang Huahai, one of China’s largest exporters of pharmaceuticals, a warning letter that likely would have meant it couldn’t gain approval to make any new generic drugs in that factory until it cleared up the list of problems. But four months later, FDA managers at the agency’s Silver Spring, Maryland, headquarters overruled the inspector. Zhejiang Huahai Pharmaceutical was allowed to avoid those penalties and address the problems itself—possibly missing a chance to detect the cancer-causing contaminant more than a year earlier than it was.
Mother’s lifesaving surgery stopped at last minute because her bank blocked payment for operation - A British mother’s lifesaving neuro-surgery in America had to be cancelled while she was being prepped for the operation – because her bank blocked payment after an automatic fraud alert was generated. Samantha Smith, from Rochdale, flew to Arizona for the £250,000 procedure to rebuild her neck, which has been weakened by Ehlers-Danlos Syndrome. But she said surgery had to be postponed on Friday morning because Barclays denied the cash transfer – despite her pre-warning them about it. The 32-year-old, whose condition means her neck has become too weak to support her skull, was lying in her hospital bed at the Mayo Clinic, inPhoenix, when doctors broke the news to her. It is unclear when she will be able to reschedule the urgent operation for. “To have it taken away over money, money that we’ve got,” the mother-of-two told the Rochdale News. “We’ve lost the surgical date. “There’s been a complaint escalated with Barclays but that can take up to eight weeks for that to be sorted. “I was on the phone to them for hours crying that I’d lost the date that it took months to get.”
The ‘Complete’ Cancer Cure Story Is Both Bogus and Tragic - IS THERE ANY more tantalizing headline than “Scientists Discover a Cure for Cancer”? Some version of this fantastical claim has been dropped into the news cycle with the regularity of a super blood wolf moon for the better part of a century. In 1998, James Watson told The New York Times that a cancer cure would arrive by Y2K. This magazine hasn’t been immune either, running an “End of Cancer” headline a few years later. Each instance stirs up hope for patients and their families desperate to find a solution, no matter the risk or cost. And yet, here we are in 2019, with that constellation of complex, diverse diseases we lump together and call “cancer” for convenience's sake still killing one in eight men and one in 11 women, according to the World Health Organization’s latest stats. You’d think creators and consumers of news would have learned their lesson by now. But the latest version of the fake cancer cure story is even more flagrantly flawed than usual. The public’s cancer cure–shaped amnesia, and media outlets’ willingness to exploit it for clicks, are as bottomless as ever. Hope, it would seem, trumps history. On Monday, the Jerusalem Post, a centrist Israeli newspaper, published an online story profiling a small company called Accelerated Evolution Biotechnologies that has been working on a potential anti-cancer drug cocktail since 2000. It was somewhat cautiously headlined “A Cure for Cancer? Israeli Scientists Think They Found One” and relied almost entirely on an interview with the company’s board chair, Dan Aridor, one of just three individuals listed on AEBi’s website. In it, Aridor made a series of sweeping claims, including this eye-popper: “We believe we will offer in a year’s time a complete cure for cancer.”It was an especially brash move considering the company has not conducted a single trial in humans or published an ounce of data from its completed studies of petri dish cells and rodents in cages. Under normal drug development proceedings, a pharmaceutical startup would submit such preclinical work to peer review to support any claims and use it to drum up funding for clinical testing. AEBi’s PR move might be an attempt at a shortcut. In an interview on Tuesday, the company’s founder and CEO, Ilan Morad, told the Times of Israel that lack of cash flow is the reason AEBi has elected not to publish data.
Massachusetts AG- Family Behind Oxycontin Is Responsible For Opioid Epidemic - The Massachusetts attorney general has declared that the family behind the drug Oxycontin is responsible for the opioid epidemic ravaging the United States. Purdue Pharma and eight members of the Sackler family who own the company, are being accused of personally starting the opioid crisis by deceptively selling Oxycontin. According to CBS News, MA attorney general, Maura Healey alleges the Sackler family hired “hundreds of workers to carry out their wishes.” Those wishes included pushing doctors to get “more patients on opioids, at higher doses, for longer, than ever before” all while paying “themselves billions of dollars.” In her lawsuit, Healey names eight members of the family that own Purdue Pharma, alleging they “micromanaged” a “deceptive sales campaign.” In the conclusion to the complaint, Healey said the Sackler family used the power at their disposal to engineer an opioid crisis.About 400,000 people died from opioid overdoses between 1999 and 2017, according to the Centers for Disease Control and Prevention. The opioid epidemic is also being blamed for the drop in life expectancy in the United States that has been falling since its peak in 2014. On average, about 130 Americans die every day from an opioid overdose.“They don’t want to accept blame for this. They blame doctors, they blame prescribers and worst of all, they blame patients,” Healey said.Purdue Pharma, on the other hand, called the accusations “a rush to vilify” the drugmaker. Healey also said that Purdue Pharma and the Sackler family are “one and the same.”
Biggest Fentanyl Bust in History- Border Patrol Seizes “Enough Drugs To Kill 57 Million People” -Just days after we reported that the Massachusetts Attorney General is suing the makers of OxyContin, the deadly nature of America's opioid crisis has again reared its ugly head: US border patrol agents just made the largest Fentanyl bust in the country’s history, confirming that this nationwide epidemic is worse than ever. On his show this week, Tucker Carlson reported: "Well, the U.S. border patrol has made the biggest fentanyl bust in history. An enormous amount, enough fentanyl to kill—they estimate—57 million people. That’s more than the combined population of the states of Illinois, New York and Pennsylvania. It’s a lot." Reporter Hillary Vaughn on Fox News broke the story, stating: "We got our hands on an internal memo from U.S. Customs and Border Patrol that details this bust. The biggest fentanyl seizure in U.S. history. According to the memo, four days ago in Nogales, Arizona, at the port of entry, CBP officers stopped a tractor-trailer crossing the U.S.-Mexico border into the U.S. with enough fentanyl to kill 57 million people." The Fentanyl shipment - which was found under the floor of the trailer - consisted of a whopping 114 kgs of the drug - compare this to the just 2mg that is considered to be a fatal dose. Agents also seized 179 kg of methamphetamine. The total seizure was said to have a street value of $102 million. The smuggler, a Mexican national, was a member of the DHS trusted traveler program (FAST) and was arrested at the border.
State of emergency declared in US measles outbreak - A state of emergency was declared on Friday in the western US state of Washington following a measles outbreak that has affected more than two dozen people, the majority of them children. The disease was declared eliminated in the US in 2000 but has since made a comeback that is tied to imported cases and the rise of the anti-vaccine movement. "Measles is a highly contagious infectious disease that can be fatal in small children," Washington Governor Jay Inslee said in a statement. "The existence of more than 26 confirmed cases in the state of Washington creates an extreme public health risk that may quickly spread to other counties." The outbreak began near Portland, Oregon, at the start of the year and quickly spread to nearby Clark County and King County, both in Washington. Health officials have warned that people infected with the disease had visited schools, churches, a dentist's office, a Costco store, an Ikea store and the Portland airport. The majority of those infected are children, many of whom have not been immunized against the disease, officials said. They added the outbreak could still be in its infancy as the incubation period of the virus averages 14 days. Those infected can spread measles to others four days before and four days after the rash appears. The highly contagious disease can cause severe diarrhea, pneumonia and vision loss, and ultimately can be fatal. The World Health Organization in November warned that measles cases worldwide had jumped more than 30 percent in 2017 compared to the previous year, in part because of children not being vaccinated.
Polio vaccine shortages pose a great risk to children, even if India is ‘polio free’ - On January 18, the Ministry of Health and Family Welfare sent an urgent letter to all states except Bihar, Madhya Pradesh and Kerala saying that it had decided to postpone the polio National Immunisation Day scheduled for February 3 due to “unavoidable circumstances”. The ministry said that it will tell the states when a new date is fixed.On January 24, the ministry issued a press release denying media reports of a shortages of polio vaccines in the country. The Print had reported earlier in the day that National Immunisation Day had been postponed because of vaccine shortages. The ministry said that it had already secured the required quantity of bivalent oral polio vaccine or bOPV but it the vaccine was being out through more stringent tests and can only be sent to states for use after each batch has been cleared by a national testing laboratory. The ministry also said that there is not shortage of the inactivated polio vaccine or IPV that has only recently been introduced in India and also dismissed the claim of a shortage of funds to procure that vaccine, despite a steep hike in its price. Why is a possible polio vaccine shortage such a big threat in India?India’s largely successful strategy to eradicate polio has been to conduct mass immunisations. National Immunisation Days are held twice a year on which about 172 million children are vaccinated. These mass vaccinations confer herd immunity on the population. This is necessary in India where in many communities, parents do not take their children regularly to the doctor for routine immunisations.Many states that are at higher risk of polio outbreaks like Uttar Pradesh and Bihar also have sub-National Immunisation Days, supplementing the pan-India immunisation programme. India’s last wild polio virus infection occurred in 2011. A year later, the WHO removed India from the list of countries with active endemic wild polio transmission and in 2014 declared India polio free. However, this does not mean that there have been no polio cases in the country since then. India still records a number of vaccine-associated polio cases, which cause the same physical symptoms as wild polio. It is to eradicate such vaccine-associated polio paralysis that India is switching from using the OPV to IPV.
Superbug From India Spread Far and Fast, Study Finds - Researchers find a gene first discovered in bacteria from India 8,000 miles away in the Arctic, raising fears about the global reach of antibiotic-resistant bugs. An antibiotic-resistant gene originally discovered in bacteria from India was found 8,000 miles away in a remote Arctic environment, according to a new study. Researchers believe the gene, found in bacteria in the soil of a Norwegian archipelago, made the trek in less than three years, highlighting the speed with which antibiotic resistance can spread on a global scale. Antibiotic resistance is a persistent and growing global health concern. At least 700,000 people die globally each year from antibiotic-resistant infections.
Bacteria and viruses are fighting back, but will big pharma save us?- An apocalypse is looming, warn the public health experts. The spectre of a benighted world where humankind again falls prey to bacterial plagues, wiping out the frail and the young, has been hanging over us for many years now. Infections we have conquered, such as pneumonia and typhoid, will return to kill us. Surgery and chemotherapy for cancer will carry huge risks. It’s a distant scenario as yet, but it cannot be dismissed as alarmist rhetoric. Antibiotics are no longer the cure-all for bacterial infections that they once were. Antimicrobial resistance is real. Microbes – both bacteria and viruses – are fighting back, developing resistance to the drugs invented to wipe them out. It’s an evolutionary thing. Bugs were here before we were and are evolving to survive us. Tuberculosis has become a lot more difficult to treat. The TB bacterium has become resistant to more than one of the antibiotics in the cocktail given to patients. In 2016, 490,000 people developed multidrug resistant TB, across every country in the world. To get better, they need newer, more expensive drugs for longer than the standard six months that treatment currently takes. There is every reason to think TB bacteria will develop resistance to the new drugs in time. Control of malaria is also threatened by drug resistance. Hospitals in the UK and elsewhere are struggling to treat potentially life-threatening infections caused by Klebsiella pneumoniae, a common bacterium found in the gut. MRSA, the so-called superbug that is a form of Staphylococcus aureus resistant to the antibiotic methicillin, is common. There is growing resistance against drugs used to treat the sexually-transmitted infections gonorrhoea, syphilis and chlamydia. And so it goes on, as the microbes take back the territory they lost to science, bit by bit. And now we have a plan launched by the UK health secretary, Matt Hancock, at Davos to incentivise big pharma to get stuck in and find us more antibiotics. It sounds simple. It really isn’t.
New US Experiments Aim To Create Gene-Edited Human Embryos - A scientist in New York is conducting experiments designed to modify DNA in human embryos as a step toward someday preventing inherited diseases, NPR has learned.For now, the work is confined to a laboratory. But the research, if successful, would mark another step toward turning CRISPR, a powerful form of gene editing, into a tool for medical treatment.A Chinese scientist sparked international outrage in November when he announced that he had used the same technique to create the world's first gene-edited human babies. He said his goal was to protect them from infection with HIV, a claim that was criticized because there are safe, effective and far less controversial ways of achieving that goal.In contrast, Dieter Egli, a developmental biologist at Columbia University, says he is conducting his experiments "for research purposes." He wants to determine whether CRISPR can safely repair mutations in human embryos to prevent genetic diseases from being passed down for generations.So far, Egli has stopped any modified embryos from developing beyond one day so he can study them."Right now we are not trying to make babies. None of these cells will go into the womb of a person," he says. But if the approach is successful, Egli would likely allow edited embryos to develop further to continue his research.
‘Don’t kiss or snuggle hedgehogs’ because of salmonella risk, CDC warns - Quite a bit of news dropped on Friday, so you may have missed a hedgehog-related alert that the Centers for Disease Control and Prevention issued early that afternoon.Those tiny, prickly, adorable mammals — which have jumped in popularity as household pets in recent years — may be carrying salmonella germs and spreading them to nearby humans, according to the CDC. “CDC and public health officials in several states are investigating a multistate outbreak of Salmonella ... infections linked to contact with pet hedgehogs,” the agency’s notice read.As of Friday, the CDC said there had been 11 people in eight states sickened by a strain of Salmonella typhimurium; in 10 of the 11 cases, “ill people reported contact with a hedgehog,” the agency said. Though one person was hospitalized, no deaths have been reported. Three cases were reported in Missouri, two in Minnesota and one each in Colorado, Maine, Mississippi, Nebraska, Texas and Wyoming.Researchers collected samples from hedgehogs in the two Minnesota patients' homes and identified the strain of salmonella that was making people sick. It’s still unclear if all or some of the pet hedgehogs came from “a common supplier,” the CDC said. Symptoms of a salmonella infection include diarrhea, fever and stomach cramps lasting four to seven days. In rare cases, a salmonella infection can lead to death — a dire enough risk that the CDC gently suggested certain households “might consider a different pet.” “Don’t kiss or snuggle hedgehogs, because this can spread Salmonella germs to your face and mouth and make you sick,” the CDC warned. “Don’t let hedgehogs roam freely in areas where food is prepared or stored, such as kitchens.” If you do touch a hedgehog or clean its supplies, wash your hands immediately afterward. And don’t clean your hedgehog’s cage or toys in the same place you prepare human food.
Toxic Air Forces Thai Officials to Close 400+ Bangkok Schools -- Air pollution levels in Bangkok have gotten so bad that the city's governor, Police General Asawin Kwanmuang, ordered more than 400 schools to close through Friday."We decided to eliminate the problem by closing down the schools," Asawin said, as The Associated Press reported. "We're afraid that it can be dangerous for the children."Asawin was told by Prime Minister Prayuth Chan-ocha to order the closure of 437 schools Wednesday. While only public schools are impacted by the order, at least three private international schools have also opted to close, CNN reported. The closures come as the Air Quality Index for Bangkok measured 175 on Wednesday evening. That's seven times more than the World Health Organization (WHO) safe level of 25. The poor air quality is caused by an uptick in dangerous particulate matter 2.5 (PM2.5). These particles are especially dangerous because they are small enough to embed themselves in the lungs and other organs, and the Department of Pollution Control said they were at unsafe levels in 41 areas around the city. Officials will reassess the situation Sunday to determine if schools will reopen or remain closed.
Growing up in dirty air 'quadruples chances of developing depression' - Children who lived in areas with higher air pollution when younger are significantly more likely to have developed major depression by the age of 18, according to research. In the first analysis of how common air pollutants affect teenage mental health, researchers found young people were three to four times more likely to have depression at 18 if they had been exposed to dirtier air at age 12. Comparison with earlier work indicates that air pollution is a greater risk factor than physical abuse in raising the risk of teenage depression. The scientists said their findings are particularly significant because 75% of mental health problems begin in childhood or adolescence, when the brain is developing rapidly. The work also suggests a link between toxic air and antisocial behaviour, but more work is needed to confirm this. A larger study is expected later this year.“High levels of air pollution are just not good for you, and particularly for your children, whether that be physical or mental health,” said Helen Fisher at Kings College London, who led the research. “It is sensible to try to avoid the areas with the highest levels of air pollution. We really should be pushing for local and national government to reduce those levels.”The study, published in the journal Psychiatry Research, combined information from a group of children in London with high-resolution data on air pollution levels.
The case for taking AI seriously as a threat to humanity - Stephen Hawking has said, “The development of full artificial intelligence could spell the end of the human race.” Elon Musk claims that AI is humanity’s “biggest existential threat.” That might have people asking: Wait, what? But these grand worries are rooted in research. Along with Hawking and Musk, prominent figures atOxford and UC Berkeley and many of the researchers working in AI today believe that advanced AI systems, if deployed carelessly, could end all life on earth.This concern has been raised since the dawn of computing. But it has come into particular focus in recent years, as advances in machine-learning techniques have given us a more concrete understanding of what we can do with AI, what AI can do for (and to) us, and how much we still don’t know.There are also skeptics. Some of them think advanced AI is so distant that there’s no point in thinking about it now. Others are worried that excessive hype about the power of their field might kill it prematurely. And even among the people who broadly agree that AI poses unique dangers, there are varying takes on what steps make the most sense today. The conversation about AI is full of confusion, misinformation, and people talking past each other — in large part because we use the word “AI” to refer to so many things. So here’s the big picture on how artificial intelligence might pose a catastrophic threat, in nine questions:
China has tweaked genes to create five mad monkeys. Is that ethical? - Medical ethics experts are divided over an experiment in which Chinese scientists cloned gene-edited monkeys to induce mental illness in them.The five cloned monkey embryos had been edited to remove the BMAL1 gene, leading the baby animals to display symptoms of conditions such as anxiety, depression and schizophrenia as a result of disruption to their circadian rhythms, according to a study published in National Science Review on Thursday.The findings by researchers at the Chinese Academy of Sciences’ Institute of Neuroscience could help develop treatments for a range of human medical conditions including sleep disorders, diabetes, cancer and neurodegenerative diseases, according to team member Chang Hung-Chun. The study has drawn attention for its use of cloned animals, as well as the researchers’ use of the gene editing tool CRISPR/Cas 9.That tool was also used by He Jiankui, the Chinese scientist who recently created the world’s first genetically edited human babies as part of a controversial and unauthorised experiment. But unlike He’s experiment, the cloned macaques study was authorised and funded by the Chinese Academy of Sciences and the Shanghai municipal government. “Human mental illnesses are complex, and even harder to predict than purely physical diseases,” Andrew Knight, a professor of animal welfare and ethics at the University of Winchester said. “The likely benefit from harming animals in this way is extremely small. However, there is no doubt that these animals will suffer – and probably, very significantly. Primates are highly intelligent and social animals. It is not ethical to deliberately harm them, and especially when the chance of tangible benefit for human patients is so small. Such research is very irresponsible.”
Endangered British birds to be hunted under new permit – here’s how that could fuel an illegal pan-European trade - Hunters will be allowed to kill some of Britain’s most endangered bird species under new temporary permits licensed by Natural England and Natural Resources Wales. The birds at risk throughout England and Wales include species whose numbers are threatened in the UK, according to the RSPB (Royal Society for the Protection of Birds). Bullfinches, meadow pipits and oystercatchers are all included in the new permits and are amber-listed for intermediate conservation priority. Another species, the skylark, will be subject to licensed hunting despite the RSPB red-listing it as a critical conservation priority for the UK. Both Natural England and Natural Resources Wales are sponsored by central government and are responsible for “promoting nature conservation” and “protecting people and the environment” according to their websites. They cite safety concerns to justify granting the permits and claim shooting birds could prevent damage to crops and reduce interference with air traffic. By opening songbird hunting in the UK, the government could be offering a new route for supplying dead birds to the illicit trade across Europe. The illegal bird trade within the European Union is thought to be worth at least €10m a year. This doesn’t just refer to the trade in exotic species from outside Europe, but includes the widespread trade of songbirds for human consumption – particularly in parts of France and northern Italy where songbirds are regarded as forbidden delicacies. Dishes such as ortolan bunting or polenta ucelli – polenta with roasted songbird – are synonymous with luxury and prestige. Other songbirds such as sparrows and thrushes are trapped and eaten throughout Italy and Cyprus. The trade in songbirds makes for quick profits: one gram of songbird meat is estimated to sell for the equivalent of one gram of marijuana. The trapping and consumption of songbirds is widely illegal across the European Union, but it still occurs illegally in some member states such as France and Italy. Although the 1981 UK Wildlife and Countryside Act forbids wild birds being sold for food, enforcing this rule may be difficult to guarantee under the new permits.
These Alligators Have Gone Into Deep-Freeze Mode - Alligators in a North Carolina swamp have been spotted “frozen” with their noses above the ice as temperatures plummeted into the thirties this week. On Monday, at least 18 American alligators at the Shallotte River Swamp Park in Ocean Isle Beach entered a dormant state called “brumation,” the Associated Press reported. The remained that way through Tuesday, said the park’s manager George Howard.Brumation is a “semi-shutdown” response seen in cold-blooded animals that allows them to slow their metabolism and go without food, Mother Nature Network wrote last year when Shallotte River Swamp Park reported a similar occurrence—the first time the facility had observed this behavior there. In alligators, brumation can last from four to five months, and can be triggered by temperatures below 70 degrees Fahrenheit. Alligators have been known to surface before the water freezes, presumably to keep their nostrils above the ice so they can breathe. “It’s a survival mechanism that they do in the event they need to breathe,” Howard explained. “They stick their noses up out of the water and if it freezes, it will freeze around their snout and still allow them to breathe.”
GM Trees (Plantations Part 2) -- In Part One we discussed the evils of industrial monoculture tree plantations. They are purely alien to the land, purely invasive even where they amass “native” species in such an anti-ecological way, purely destructive. GMOs by definition are invasive and will escalate every one of the pathologies we surveyed in part one: Destruction of forest, wetland, grassland habitats; generation of desert; all at the expense of food for human beings; destruction of carbon sinks thus driving the climate crisis; biodiversity loss and mass extinction; genetic monoculture; driving people off their land and destroying their way of life; sowing poverty, hunger, malnutrition; radically escalating wildfires; slathering of agricultural poisons; corporate consolidation and land concentration, land-grabbing, socioeconomic inequality; the sham “climate movement” fiddling while Earth burns. Genetic engineering automatically is non-native and invasive to Earth itself, to ecology and evolution. So in itself, even leaving aside ulterior motives and deliberate lies, GM “solutions” automatically are just building the Tower of Babel higher and more top-heavy. GM trees are designed to expand the invasion range and biodiversity erasure. That’s why the corporations and governments do the research: These are guaranteed primary effects and therefore are primary intended effects. That’s why they’ve set up the plantations in the first place. Plantation trees automatically spread their pollen to any related species within wind range. This is long documented with non-GM trees everywhere – poplar, willow, acacia, birch, pine, others. This genetic contamination inevitably will include GM contamination to whatever extent GM trees are deployed in the environment. This contamination already is documented in China with GM poplars. . Meanwhile US attempts to engineer poplar sterility, allegedly in order to prevent such contamination from GM poplar plantations, have been a failure. Pro-GMO activists, disaster capitalist ideologues they are, cite the many crises driven by globalization, its industrial agriculture including tree plantations, the climate crisis and other ecological crises these are causing, as the reasons society now must deploy GM trees, in order to “solve” these problems in a Tower of Babel way.
Extreme weather and geopolitics major drivers of increasing ‘food shocks’ - The research, published in the journal Nature Sustainability, identified 226 food production shocks across 134 nations over the 53-year period, noting an increasing frequency of shocks across all sectors on a global scale. Lead author Richard Cottrell said extreme weather was a major cause of shocks to crops and livestock, highlighting the vulnerability of food production to climate and weather volatility."In recent decades we have become increasingly familiar with images in the media of disasters such as drought and famine around the world," Mr Cottrell said."Our study confirms that food production shocks have become more frequent, posing a growing danger to global food production."We looked at the full range of global food production systems, covering crops, livestock, fisheries and aquaculture"We found that crops and livestock are slightly more shock-prone than fisheries and aquaculture, and some regions, such as South Asia, are more frequently affected than others."While the number of food shocks fluctuates from year to year, the long-term trend shows they are happening more often." Mr Cottrell said the increasing frequency of food shocks gave people and communities less recovery time between events and eroded their resilience. "Reduced recovery time hinders coping strategies such as accumulating food or assets for use during times of hardship."Combined with adverse climate conditions, conflict related shocks to food production across sub-Saharan Africa and the Middle East have led to a rise in global hunger since 2010."Land-based crop and livestock production are particularly vulnerable to extreme weather events such as drought, which are expected to become more frequent and intense with climate change."However, marine-based food production is not immune from shocks."Overfishing was responsible for 45 per cent of shocks detected in landing data, while disruptions to aquaculture production have risen faster and to a higher level than any other sector since the 1980s.
Criminal Investigation Launched After 'Sick Cow' Scandal in Poland -- A tainted meat scandal is rocking Europe after an undercover reporter revealed workers at a Polish slaughterhouse mistreating and killing sick cows and selling the beef for human consumption.Nearly three metric tons of suspect meat has reached least a dozen European Union countries, according to EuroNews, including Estonia, Finland, France, Hungary, Lithuania, Portugal, Romania, Spain and Sweden.Secret footage of an abattoir in Poland's Mazovia region shows cows that are so sick they can't even stand and being dragged into slaughter, as well as workers cutting off signs of illness such as tumors and pressure sores from the carcasses, as the Guardian detailed. Polish authorities have since shut down the operation. Withdrawals of the meat are also ongoing, Anca Paduraru, European Commission spokeswoman for food safety, told Euronews. "We are in close contact with the Polish authorities and at the request of the European Commission on the 29th of January the rapid alert system for food and feed has been triggered by Poland and this allowed the tracing and the withdrawal from the market of the concerned meat," she said.
The way we eat could doom us as a species. Here’s a new diet designed to save us -- The way we eat and produce food has become so destructive to the environment and our health that it now threatens the long-term survival of the human species, an international commission of 37 scientists write in a sprawling new Lancet report. We now have so many interconnected food-related crises — climate change, pollution, and food waste, not to mention malnutrition and obesity — that it will be impossible to feed the 10 billion people expected by 2050 unless we make dramatic changes to our diets and farming practices, the researchers argue. What’s needed, according to the peer-reviewed report, titled “Food in the Anthropocene: The EAT-Lancet Commission on healthy diets from sustainable food systems,” is a new philosophy for how to eat on planet Earth. Though there are huge variations around the world in what and how much we consume, we are all in this existential crisis together. Which brings us to what seems to be the most controversial aspect of this report: its specific dietary advice for ensuring that everyone’s nutritional needs are met without exceeding “planetary boundaries.” To survive as a species, it says, everyone — including you! — is advised to eat mostly vegetables, grains, legumes, and nuts, and limit red meat consumption to just one serving per week.
Trump EPA won't limit 2 toxic chemicals in drinking water --The Trump administration will not set a drinking water limit for two toxic chemicals that are contaminating millions of Americans' tap water, two sources familiar with the forthcoming decision told POLITICO. The expected move is yet another sign of the administration's reluctance to aggressively deal with the chemicals, which have been used for decades in products such as Teflon-coated cookware and military firefighting foam and are present in the bloodstreams of an estimated 98 percent of Americans. And it comes less than a year after the White House and the Environmental Protection Agency faced criticism for delaying publication of a health study on the chemicals, which a White House aide had warned could trigger a "public relations nightmare." EPA's decision means the chemicals will remain unregulated under the Safe Drinking Water Act, according to sources familiar with a still-unreleased draft plan that acting administrator Andrew Wheeler signed off on in late December. That means utilities will face no federal requirements for testing for and removing the chemicals from drinking water supplies, although several states have pursued or are pursuing their own limits. The chemicals, known as PFOA and PFOS, have been linked to kidney and testicular cancer, hypertension and other ailments. Major chemical companies like 3M as well as the Defense Department would face billions of dollars in liability from aggressive efforts to regulate and clean up the chemical, which has contaminated groundwater near hundreds of military bases and chemical plants. Federal scientists last summer concluded that PFOA and PFOS pose dangers at extremely low concentrations in a health assessment that POLITICO reported Trump administration officials initially sought to block. EPA-mandated testing has found the chemicals at unsafe levels in at least 16 million Americans' tap water, but activists say the problem is even more widespread.
'Absolutely Unconscionable': Trump EPA Refuses to Limit Toxic Chemicals Contaminating Drinking Water - In a decision deemed by critics unsurprising but also "absolutely unconscionable," the Trump administration's U.S. Environmental Protection Agency (EPA) reportedly plans to refrain from regulating a pair of toxic chemicals linked to kidney and testicular cancer, even though they are contaminating millions of Americans' drinking water. Sources familiar with an unreleased draft plan approved last month by acting EPA Administrator Andrew Wheeler told Politico that the chemicals PFOA and PFOS will remain unregulated under the Safe Drinking Water Act, meaning that "utilities will face no federal requirements for testing for and removing the chemicals from drinking water supplies, although several states have pursued or are pursuing their own limits." The chemicals "have been used for decades in products such as Teflon-coated cookware and military firefighting foam, and are present in the bloodstreams of an estimated 98 percent of Americans," Politico pointed out. That means, given that they have "contaminated groundwater near hundreds of military bases and chemical plants," any intensive regulation of them would force companies such as 3M as well as the Defense Department to spend billions of dollars on cleanup efforts. "If these sources are right, the EPA is essentially telling the more than 110 million Americans whose water is likely contaminated with PFAS: 'Drink up, folks,'" warned Environmental Working Group senior scientist David Andrews, Ph.D. "The most efficient and equitable way to remove these chemicals from the nation's drinking water supply is to use the agency's authority to set legal limits ... It's a national problem, and it needs a national solution." "It is absolutely unconscionable for the Trump administration to refuse to even start the process of setting a limit on these poisonous chemicals," declared Erik Olson of the Natural Resources Defense Council (NRDC). "Communities around the country need swift, meaningful action from the government. Punting responsibility to the private sector and states is a total abdication of EPA's role in protecting the American people.".
Air Force Refuses to Clean PFAS Contamination at Former Michigan Base - The U.S. Air Force is refusing to comply with the state of Michigan's request to expand cleanup of PFAScontamination near the former Wurtsmith Air Force Base in Oscoda, MLive reported.PFAS, or poly- and perfluoroalkyl substances, are a group of controversial chemicals that includes PFOA, PFOS and GenX. The substances can be found in a vast array of products, from non-stick cookware to firefighting foams, and may have found its way in the drinking water for up to 110 million Americans nationwide. In Michigan, there are 40 known sites, including active and former military bases, that have confirmed PFOA and PFOS in groundwater. Michigan's Department of Environmental Quality (MDEQ) became aware of PFAS contamination at the former Wurtsmith Air Force Base way back in March 2010 after sampling confirmed its presence at a fire training area on the base.So in October as MLive's Garret Ellison reported, the MDEQ issued a violation notice to the U.S. Air Force for "far exceeding the 12 nanograms per liter PFOS water quality standard" in areas near Clark's Marsh, which borders the former Wurtsmith Air Force Base where personnel had used PFAS-containing firefighting foam for fire training exercises.The Air Force's response? They wrote back in a Dec. 7, 2018 letter saying the state that doesn't have the authority to regulate federal facilities.A senior Air Force official said MDEQ "lacks the jurisdictional authority" to force compliance.The federal government "has not waived sovereign immunity with regard to the state regulation on which the (violation notice) is premised," the official continued, adding that the Air Force "is hereby informing you that it will not be taking any new remedial actions at this time." Basically, as Ellison tweeted, "The Air Force is telling Michigan to take its 12-ppt regulatory limit on PFAS in surface water and shove it."
On the Water-Starved Colorado River, Drought Is the New Normal – In the basement of the University of Arizona’s Laboratory of Tree-Ring Research, researchers point out an anomaly in a round, 2-inch-thick piece of Douglas fir — an unusually wide set of rings that represent the years 1905 to 1922. Those rings mean it was a pluvial period — precipitation was well above average — and so the trees grew far more than other years. “In 1905, the gates opened and it was very wet and stayed very wet until the 1920s,” said David Meko, a hydrologist at the lab who studies past climate and stream flow based on tree rings. “It guided their planning and how much water they thought was available.” The planning was that of the states that share the water of the Colorado River. Worried that a burgeoning California would take most of the water before it was fairly divvied up, representatives from the other Colorado River Basin states, presided over by U.S. Secretary of Commerce Herbert Hoover, came together in 1922 to develop an equitable apportionment. They looked at flow measurements and figured that the river contained an average of 15 million acre-feet. They divided the Colorado River states into two divisions – the upper basin and the lower basin, with the dividing line in northern Arizona near the Utah border. The upper basin states — Utah, Wyoming, Colorado, and New Mexico — agreed not to take more than a total of 7.5 million acre-feet and to allow the other half to flow south to the lower basin. The agreement they signed was called the 1922 Colorado River Compact, also known as the Law of the River. The 1922 compact, though, is based on a premise that the tree rings in the University of Arizona lab now show is false. The river’s long-term average flow is about 12 to 15 million acre-feet, in a good year. Meanwhile, the lower basin states — Arizona, California, and Nevada — use 7.5 million acre-feet, and in 1922 no one factored in evaporative losses from the desert sun at the yet-unbuilt Lake Mead reservoir, which amount to another 1.2 million acre-feet, or the water taken up by plants. Nor did anyone factor in a subsequent 1944 treaty that requires the United States to provide 1.5 million acre-feet to Mexico.This over-appropriation is problem enough, but in recent years the river’s flow has been dwindling. The region is locked in a 19-year-long drought, themost severe in 1,250 years. And it may continue much longer. The tree ring data shows that there have been numerous multi-decadal or mega-droughts in the basin in the last 1,000 years. The prospect that drought could be the new normal for the region is creating a good deal of anxiety along the Colorado.
California’s New Governor Calls for a Tax on Drinking Water — California’s new governor has wasted little time continuing the state’s seemingly limitless expansion of government. Governor Gavin Newsom’s first budget proposal, published last week, suggests instituting a tax on drinking water in the name of cleaning up California’s water systems. The “Environmental Protection” section of the 2019-2020 budget seeks to establish a new special fund, with a dedicated funding source from new water, fertilizer, and dairy fees, to enable the State Water Resources Control Board to assist communities, particularly disadvantaged communities, in paying for the short-term and long-term costs of obtaining access to safe and affordable drinking water. California’s drinking water quality is indeed poor. Communities throughout the state struggle with dangerous pollutants in their supply, but opponents of the suggested tax say there is no need to tax residents in order to solve the problem. Jon Coupal of the Howard Jarvis Taxpayer Association has argued that the proposal is an example “of California’s knee-jerk reaction to default to a new tax whenever there’s a new problem,” the Sacramento Bee reported. Coupal says there shouldn’t be new taxes for water system improvements when the state is sitting on a $14.2 billion surplus. Similarly, the California Association of Water Agencies, a coalition of public water agencies throughout the state, has expressed opposition to the proposed tax, arguing that in light of the current surplus, a trust should be established to fund water clean-up efforts. “The state should not tax something that is essential to life, such as water and food,” they said in a press release, adding that the costs of living in California are already too high and that another tax would make water less affordable.
Climate Change May Be Creating a Groundwater 'Time Bomb,' Scientists Say -- Climate change may be creating a groundwater "time bomb" as the world's underground water systems catch up to the impacts of global warming. Researchers for a study published Monday in the journal Nature Climate Change say more than half of the world’s groundwater systems — the largest source of usable freshwater in the world — could take more than 100 years to completely respond to current environmental changes from global warming. Groundwater is replenished primarily by rainfall through a process known as recharge. Concurrently, water exits or discharges from groundwater sources into lakes, streams and oceans to maintain an overall balance. When there is a change in recharge due to a lack of rainfall, for example, levels of groundwater drop until balance is restored. The problem facing scientists, government officials and water management planners is knowing exactly when recharge changes occurring now as a result of global warming will be reflected in discharge from groundwater sources into lakes, streams and oceans.“Our research shows that groundwater systems take a lot longer to respond to climate change than surface water, with only half of the world’s groundwater flows responding fully within ‘human’ timescales of 100 years," Mark Cuthbert, lead author and research fellow at Cardiff University’s School of Earth and Ocean Sciences and Water Research Institute said in the press release.
Water could become the major flash point between India and Pakistan besides Kashmir - As rivers and taps run dry, trouble is brewing over hydroelectric projects India is building along the Chenab River that Pakistan says will impact its water supply. Women and children walk miles each day in search for water in a crowded, downtrodden district of Pakistan’s financial capital, Karachi — a scene repeated in cities throughout the country. Across the border in India, government research indicates about three-quarters of people don’t have drinking water at home and 70 percent of the country’s water is contaminated. As rivers and taps run dry, water has the potential to become a major flash point between arch-rivals India and Pakistan. Both have repeatedly accused each other of violating the World Bank-brokered 1960s Indus Waters Treaty that ensures shared management of the six rivers crossing between the two neighbors, which have fought three major wars in the past 71 years. The latest dispute is over hydroelectric projects India is building along the Chenab River that Pakistan says violate the treaty and will impact its water supply. Pakistani Prime Minister Imran Khan is sending inspectors to visit the site on Jan. 27. Indian leader Narendra Modi — who faces elections in the next few months — has vowed to proceed with construction, and it remains unclear how the impasse will be resolved. “Tensions over water will undoubtedly intensify and put the Indus Waters Treaty — which to this point has helped ensure that they have never fought a war over water — to its greatest test,”
Park Rangers Return to Work to Assess ‘Irreparable’ Damage as Government Shutdown Ends (for Now) - The partial government shutdown that has endangered nature and visitors at understaffed national parks finally came to an end Friday, when President Donald Trump agreed to temporarily reopen the government despite not receiving any money for his proposed border wall.The deal will put some 800,000 federal workers, who have now missed two paychecks, back to work while the president and Congress try and reach a deal over funding for the wall that would put 93 species at risk from extinction. But the fix, which ends the longest government shutdown in U.S. history, is only temporary."If we don't get a fair deal from Congress, the government will either shut down on February 15 again, or I will use the powers afforded to me under the laws and the Constitution of the United States to address this emergency," Trump said Friday, as CNN reported. "We will have great security." The agreement does mean, however, that park rangers and other staff can begin to assess the damage done during the shutdown, as many parks remained open to the public but understaffed. In shutdowns under previous administrations, the parks have typically closed entirely. Park staff will also move to reopen services that were shuttered. "The damage done to our parks will be felt for weeks, months or even years. We want to thank and acknowledge the men and women who have devoted their careers to protecting our national parks and will be working hard to fix damage and get programs and projects back up and running," National Parks Conservation Association President Theresa Pierno said in a statement. "We implore lawmakers to use this time to come to a long-term funding agreement and avoid another disaster like this. Federal employees, businesses, communities and national parks deserve better."
Joshua Tree May Not Recover from 35 Day Shutdown for 200 Years, Former Ranger Says - The government shutdown that began in December lasted a record-breaking 35 days — hurting fliers who encountered long security lines, 800,000 federal workers who went without pay, farmers who rely on federal payments and countless others. But the impact of the funding lapse on Southern California’s Joshua Tree National Park could last far, far longer, according to a past leader at the rugged desert park near Palm Springs. “What’s happened to our park in the last 34 days is irreparable for the next 200 to 300 years,” former Joshua Tree National Park Superintendent Curt Sauer said at a Saturday rally, organized to highlight the environmental toll exacted by the shutdown, according to the Desert Sun. Staffed by a skeleton crew of rangers, Joshua Tree remained open despite the shutdown, which rally-goers said resulted in extensive vandalism and damage to the park. Rangers said on Jan. 8 they would temporarily close the park to deal with “new roads being created by motorists and the destruction of Joshua trees in recent days,” but the park reversed course the next day and it remained open. The spiky, contorted trees — which the National Park Service describes as “straight out of a Dr. Seuss book” — can grow up to 40 feet high and live an average of 150 years, though “some of our largest trees may be much older than that,” writes Jane Rodgers, a vegetation specialist. Only eight law enforcement rangers were able to patrol the Delaware-sized park during the shutdown, National Parks Traveler reported. Other rangers were considered “non-essential” workers, and were sent home during the government funding lapse, which was forced when President Trump refused to sign funding legislation that didn’t include $5.7 billion for his proposed wall on the U.S. Mexico border. But even the rangers who worked during the lapse did not get paychecks during the shutdown.
Interior Department Attempts to Ram Through Rules Change Stifling Public Information Requests - The U.S. Department of the Interior advanced a proposal to restrict Freedom of Information Act (FOIA) requests from the public in a clear attempt to benefit dirty energy and anti-public lands industry lobbyists and their allies seeking to extract policy changes from the Trump administration. Earthjustice, the nation’s leading environmental law organization, joined a letter with over 100 organizations across the country on a letter opposing the effort. The move follows Interior’s announcement that it was only extending the public comment period on the rollback by one day due to the government shutdown. Bernhardt’s associate during his time at Interior during the Bush administration and former Koch Foundation strategist, Daniel Jorjani, quietly advanced the plan while tens of thousands of department employees nationwide worked without pay during the government shutdown The following is a statement from Yvonne Chi, an attorney at Earthjustice’s Rocky Mountain office: “Interior’s move is a clear threat to the principles of transparency and accountability at the heart of our democracy. It is obvious that industry’s hand-picked representatives running the show at the Interior Department will stop at nothing to prevent the public from getting access to real information about their dealings. Earthjustice will use every tool available to us to stop this dangerous attack and protect our right to the information we need to protect our planet and its people.”
How Trump Plans to Gut NEPA, a 50-Year-Old Environmental Law - Since 1970, the public has had a voice in major federal infrastructure projects. But the landmark environmental law that gives us that right is having its teeth pulled. The National Environmental Policy Act is the nation's oldest environmental law, widely known as the Magna Carta of green legislation. A blueprint for minimizing environmental impacts while ensuring compliance with federal laws like the Endangered Species Act, NEPA compels federal agencies to consider potential consequences of any "major" project they take on.When President Richard Nixon signed NEPA into law in 1970, he said it would help "America pays its debt to the past by reclaiming the purity of its air, its waters, and our living environment." NEPA was forged in response to decades of preventable environmental disasters: highway growth that bulldozed entire neighborhoods in the 1950s, an oil spill in California that came from offshore drilling, and the infamous Cuyahoga River fire, among others. There are few hard statistics on the efficiency of NEPA, but the law has demonstrably improved countless infrastructure projects, saving trees, wetlands, and—yes—money throughout the United States for the last 50 years.Now, of course, the Trump administration is trying to gut the law. At six pages and one line, the law isn't long or complex; it serves more as an ingredient list than as a full recipe. It mostly just orders federal agencies to find, minimize, and report impacts of federal projects. It also establishes the Council on Environmental Quality, a group that's central in President Donald Trump's plan to defang the law. Under the purview of the White House, the CEQ is NEPA's executive operative, regulating how NEPA is implemented by and between federal agencies. Over the past year, the CEQ, under the guidance of the Trump administration, has been working not just to amend NEPA, but to rewrite it altogether.
Brazil dam collapse- 300 missing, 40 confirmed dead - Brazilian firefighters said on Saturday that at least 40 people were killed when a dam burst at an iron ore mine owned by Vale, as rescuers continued to search for hundreds still missing. The Minas Gerais state fire department also said 23 people have been hospitalised after the dam released a torrent of mud on Friday, leaving a roughly 150-metre-wide wake of destruction. In an earlier statement, the department had said 300 people were still missing and 46 had been found alive. Firefighters focused their hopes for finding survivors on a bus, a train, mining offices and nearby homes that were buried on Friday in mud after the dam break at Vale's Corrego do Feijao facility in Minas Gerais state. Frantic family members of the missing crowded into a warehouse set up by Vale for those affected, next to a stretch of river now demolished by the sludge. More than a dozen helicopters helping to survey the area took off and landed from a football field nearby. Among those missing are up to 200 residents of the rural area of Brumadinho [Lucas Bois/Anadolu] "Unfortunately, at this point, the chances of finding survivors are minimal. We're likely to just be recovering bodies," Romeu Zema, governor of Minas Gerais, told local media. Among those missing are up to 200 residents of the rural area of Brumadinho in the state of Minas Gerais, where the mine was located, as well as about 100-150 miners, operated by mining company Vale.
58 Dead, 305 Missing in Brazilian Dam Collapse -- Brazil endured one of the deadliest mining disasters in its history when a mining dam collapsed Friday in the southeastern city of Brumadinho, The New York Times reported. The death toll rose to 58 by Sunday, a spokesperson for the Civil Defense said, and 305 people are missing. Rescue operations had to pause Sunday when another nearby dam looked ready to burst and 3,000 were evacuated. The evacuation order was later lifted when authorities determined the second dam was safe, CNN reported. Both the ruptured dam and the dam that threatened to burst are owned by the iron ore mining company Vale, which also co-owned a dam that burst three years ago in the city of Mariana, killing 19 and earning the title of worst environmental disaster in Brazil's history. "We are not dealing with an accident, but with a crime against people and nature. How many lives do we still have to lose [until] the Brazilian state and mining companies learn from their mistakes?" Greenpeace Brazil Campaigns director Nilo D'Ávila said in a statement reported by CNN. However, there is concern that Brazil's newly elected right-wing President Jair Bolsonaro will not act to improve safety standards for the mining industry, since he promised during his campaign to ease fines and regulations for industry, The New York Times reported further.
Vale workers arrested as death toll climbs after dam collapse at Brazil mine - Mining giant Vale on Tuesday confirmed the arrest of several employees as the death toll continued to climb after a dam collapsed at a company-owned mine in southeastern Brazil. The Brazilian company is facing criminal charges and pressure to overhaul its management following the deadly dam breach at its Corrego do Feijao mine near the city of Brumadinho. The number of confirmed dead now stands at 65, and authorities fear the casualties could climb above 300. Three Vale employees and two contractors have now been arrested, according to Reuters, which saw the court order. Investigators in Minas Gerais state, where the incident occurred, have issued arrest and search warrants on suspicion of murder, falsification of documents and environmental crimes. The employees include two senior managers at the mine, where a dam collapsed on Friday, spilling a river of sludge containing mining byproducts into the surrounding area. Reuters reports that authorities in Sao Paulo arrested two engineers accused of attesting to the dam's safety. German consultancy TUEV SUED confirmed to Reuters that the engineers are employed by the company and had carried out inspections on the dam on behalf of Vale. Vale acknowledged the warrants on Tuesday without offering further details. "With regards to the warrants served this morning, Vale informs that it is fully cooperating with the authorities," Vale said in a statement. "Vale will continue to support the investigations in order to determine the facts, in addition to the unconditional support to the families." Brazil's Prosecutor General Raquel Dodge on Monday said the country intends to pursue criminal charges against Vale executives, Dow Jones reported. The government will also inspect about 140 of the nation's dams that hold back so-called tailing ponds, where byproducts from mines are stored.
The frigid 'polar vortex' cold snap engulfing the US is so bad it can give people frostbite in 5 minutes - A dangerous polar-vortex weather system is bringing extreme low temperatures to large parts of the US this week, with authorities warning residents about hypothermia and frostbite, thousands of flights canceled, and at least two people already dead in connection with the cold.This week, regions from North Dakota into Missouri, and as far east as upstate New York, are expected to drop to about 50 degrees below average for late January, The Washington Post reported Monday.Some 220 million people, or 75% of the continental US population, are expected to face below-freezing temperatures this week, CNN said.Weather forecasters and doctors have warned of cold and wind so intense that it could give people frostbite within five minutes of exposure. This map shows the lowest that windchills are expected to fall this week. Windchill figures are adjusted down from actual temperatures to reflect that strong wind removes heat much faster than still air.
Polar vortex brings deadly cold snap to US states – BBC - Cities are all but shutting down across the US Midwest as the region shivers in a deadly cold snap known as a polar vortex. At least eight people have been killed in several states as a result of the Arctic weather. Temperatures fell to -30C (-22F) in Chicago - colder than parts of Antarctica - and -37C in North Dakota. Freezing weather will chill 250 million Americans, and 90 million will experience -17C (0F) or below. Snow fell throughout Wednesday, from the Great Lakes region into New England; as much as 24in (60cm) was forecast in the state of Wisconsin, and 6in in Illinois. States of emergency have been declared in the Midwestern states of Wisconsin, Michigan and Illinois, and even in the normally warmer Deep South states of Alabama and Mississippi. "This could possibly be history-making," said Ricky Castro, a National Weather Service (NWS) meteorologist in Illinois. Dangerous wind chills across the Upper Midwest and into the Ohio Valley were expected to last through Thursday, with heavy snow downwind of the Great Lakes, the NWS said. Heavy rain and mountain snow were expected in the west of the country by the weekend, it added. The NWS is warning frostbite is possible within just 10 minutes of being outside in such extreme temperatures.
Midwest Hit With Record-Breaking Cold; State Of Emergency Declared As Wind Chills To Hit –60F - A record breaking cold snap is descending on the Midwest after a powerful snowstorm blanketed the region. The extreme cold has forced the closure of public schools in Minneapolis, Detroit and Chicago in anticipation of temperatures not seen in a quarter-century. THEY DON’T EVEN HAVE A COLOR TO DESCRIBE HOW COLD IT’S GOING TO BE pic.twitter.com/p1aMriPMh5"You’re talking about frostbite and hypothermia issues very quickly, like in a matter of minutes, maybe seconds," said meteorologist Brian Hurley with the Weather Prediction Center, who notes that forecasted temperatures will hit "40 degrees below normal." Subzero temperatures will begin Tuesday, but Wednesday is expected to be the worst. Wind chills in northern Illinois could fall to negative 55 degrees (negative 48 degrees Celsius), which the National Weather Service called “possibly life threatening.” Minnesota temperatures could hit minus 30 degrees (negative 34 degrees Celsius) with a wind chill of negative 60 (negative 51 degrees Celsius). The potentially record-breaking low temperature forecast in Milwaukee is negative 28 degrees (negative 33 degrees Celsius), with a wind chill as low as negative 50 (negative 45 degrees Celsius). The current record of minus 26 degrees (negative 32 degrees Celsius) was set in 1996. -AP President Trump tweeted on Tuesday: "In the beautiful Midwest, windchill temperatures are reaching minus 60 degrees, the coldest ever recorded. In coming days, expected to get even colder. People can’t last outside even for minutes. What the hell is going on with Global Waming? Please come back fast, we need you!"
Polar vortex by the numbers: 6 states in US record temperatures lower than South Pole - Records are being shattered and communities are enduring the harshest cold in years as the polar vortex tightens its grip on the midwestern United States. After the polar vortex plunged southward, temperatures plummeted under 20 below zero F from North Dakota to northern Illinois on Wednesday morning. Biting winds made the extreme cold more life-threatening as AccuWeather RealFeel® Temperatures dropped under 50 below zero. Frostbite can occur in mere minutes on exposed skin in these conditions. Among the deaths from the snow and cold that struck the Midwest was a man found frozen to death in a garage in Milwaukee, Wisconsin, according to the Associated Press. The cold has also led to widespread school closures, major travel disruptions and even the suspension of mail service. Chicago was among the many locations that shattered record lows on Wednesday morning, but it is the magnitude and persistence of the cold that is posing the greatest dangers to the millions of people and animals across the region. "An entire generation has gone without by without experiencing this type of cold in the Chicago area," according to AccuWeather Senior Meteorologist Mike Doll.
Frostbite In Minutes- Record Low -75 Wind Chills, -20 Real Temps Expected - The words for the day are "stay inside". Record-breaking low temperatures are on the way. Accuweather comments 75 below zero? Polar vortex brings life-threatening chill, staggeringly low AccuWeather RealFeel Temperatures. Long-standing records are poised to fall as the polar vortex sends extremely cold air into the north-central, midwestern and northeastern United States. States of emergency have been issued in Wisconsin, Illinois and Michigan due to the extreme cold with many schools and businesses closing until the frigid air loosens its grip on the region later this week. Minneapolis could break low temperature records originally set back in the 1800s, and Chicago could challenge it's all-time record low of minus 27 F, set on Jan. 20, 1985. This extreme weather event comes courtesy of a dip in the polar vortex, which has swirled its way southward, out of the high Arctic, to give the Midwest and Northeast a taste of the winter weather normally felt in far northern Canada. Here's what the NWS forecast office in Des Moines stated on Tuesday: "THIS HAS THE POTENTIAL TO BE LIFE-THREATENING COLD AIR!!! This is the coldest air many of us will have ever experienced. This is not a case of 'meh, it's Iowa during winter and this cold happens.' These are record-breaking cold air temperatures, with wind chill values not seen in the 21st century in Iowa." Depending on the location, Wednesday and Thursday are likely to be the coldest days in 20-plus years.
How frigid polar vortex blasts are connected to global warming - there are two polar vortices in the Northern Hemisphere, stacked on top of each other. The lower one is usually and more accurately called the jet stream. It's a meandering river of strong westerly winds around the Northern Hemisphere, about seven miles above Earth's surface, near the height where jets fly. The jet stream exists all year, and is responsible for creating and steering the high- and low-pressure systems that bring us our day-to-day weather: storms and blue skies, warm and cold spells. Way above the jet stream, around 30 miles above the Earth, is the stratospheric polar vortex. This river of wind also rings the North Pole, but only forms during winter, and is usually fairly circular.Both of these wind features exist because of the large temperature difference between the cold Arctic and warmer areas farther south, known as the mid-latitudes. Uneven heating creates pressure differences, and air flows from high-pressure to low-pressure areas, creating winds. The spinning Earth then turns winds to the right in the northern hemisphere, creating these belts of westerlies. Greenhouse gas emissions from human activities have warmed the globe by about 1.8 degrees Fahrenheit (1 C) over the past 50 years. However, the Arctic has warmed more than twice as much. Amplified Arctic warming is due mainly to dramatic melting of ice and snow in recent decades, which exposes darker ocean and land surfaces that absorb a lot more of the sun's heat. in the Arctic; light arrows indicate the location of the polar jet stream when meanders form and cold, Arctic air dips down to mid-latitudes. Credit: L.S. Gardiner/UCAR, CC BY-ND Because of rapid Arctic warming, the north/south temperature difference has diminished. This reduces pressure differences between the Arctic and mid-latitudes, weakening jet stream winds. And just as slow-moving rivers typically take a winding route, a slower-flowing jet stream tends to meander.Large north/south undulations in the jet stream generate wave energy in the atmosphere. If they are wavy and persistent enough, the energy can travel upward and disrupt the stratospheric polar vortex. Sometimes this upper vortex becomes so distorted that it splits into two or more swirling eddies. These "daughter" vortices tend to wander southward, bringing their very cold air with them and leaving behind a warmer-than-normal Arctic. One of these eddies will sit over North America this week, delivering bone-chilling temperatures to much of the nation.
9 Dead As 'Polar Vortex' Leaves 11 States Colder Than North Pole ; Hell (Literally) Freezes Over - The coldest location in the U.S. on Thursday was Cotton, Minn., where the temperature reached minus 56 °F. The coldest location in the U.S. on Wednesday was Norris Camp, Minn., where it was minus 48 °F, with a wind chill of minus 65 °F. The sub-zero Arctic-style temperatures across much of the region, including cities like Chicago, Kansas City and Detroit, has turned deadly, as USNews reports that authorities are attributing at least nine deaths to the record-cold.The medical examiner's office in Milwaukee, where temperatures plunged to minus-42 degrees, confirmed on Tuesday the death of a 55-year-old man found dead in his garage.Authorities in Michigan confirmed two weather-related deaths on Wednesday, including a former city council member found near his home and a 70-year-old man who had been out in the elements in just his underwear. Detroit experienced wind chills as cold as minus-32 degrees Wednesday.A 22-year-old man was found dead in Rochester, Minnesota, on Tuesday, WCCO-TV reported. Police say Ali Gombo likely died from hypothermia. In Iowa, a student was found unresponsive outside in cold temperatures where the wind chill reached minus-51 degrees. He later died at the hospital, according to the Press-Citizen. Classes at the University of Iowa were canceled Tuesday through Thursday due to the extreme weather. An 82-year-old man was found outside in Peoria, Illinois, on Tuesday after he fell trying to get inside his house, the Journal Start reported. Parts of Lake Michigan have frozen... On Thursday morning, 11 states - North Dakota, South Dakota, Minnesota, Iowa, Wisconsin, Illinois, Indiana, Michigan, Ohio, Vermont and New Hampshire - across the Midwest and northern New England recorded temperatures lower than the northernmost point in Alaska and the North Pole. In Winnepeg and Manitoba, the temperature dropped so low it neared the surface temperature of Mars, making the Canadian cities likely contenders for the coldest places on Earth.
Extreme Cold Straining Xcel Energy’s Natural Gas System, Residents Urged To Turn Down Thermostat — Xcel Energy is advising residents in parts of central Minnesota north of the metro to turn down their thermostats and reduce their natural gas use. According to the energy provider, the extreme weather conditions have resulted in a “significant” strain on Xcel Energy’s natural gas system. “We need those in Becker, Big Lake, Chisago City, Lindstrom, Princeton, and Isanti to reduce use of natural gas. Until further notice, you are urged to turn down your thermostat to 60 degrees or lower and avoid the use of other natural gas appliances including hot water,” Xcel Energy said. WCCO’s Reg Chapman said shortly before noon Wednesday that Xcel Energy is asking customers to lower thermostat to 55 degrees. Xcel Energy says residents’ cooperation is critical to prevent widespread natural gas outages. The company also suggests using electric space heaters. An interruption in the natural gas system occurred on Tuesday around 10:30 p.m. in Princeton. Xcel says about 150 customers are without gas service in Princeton. Xcel Energy says they anticipate gas to be back on Thursday. Impacted customers have been provided hotel rooms while Xcel Energy works to restore service. The utility is also providing affected customers with space heaters. If you are one of the affected residents, to secure a hotel room please contact one of these hotels listed below (all rooms booked under Xcel Energy):
U.S. gas and electric systems prove resilient in face of polar vortex (Reuters) - Freezing temperatures across much of the northern United States have caused barely a ripple in natural gas markets showing how plentiful supplies have become thanks to the shale revolution. In a sign of improving resilience, the gas and electricity networks have come through the most recent polar vortex with far less stress on gas supplies and electric generators than during the last major vortex in January 2014. While policymakers in Washington debate whether the increasing interconnectedness of gas and electricity systems poses a risk to reliability, both industries are improving their ability to cope with extreme cold events. Temperatures across the Midwest fell to multi-decade lows this week and daily gas consumption is forecast to have hit record levels on Jan. 31 ("U.S. natgas use hits record during freeze", Reuters, Feb. 1). (Full Story) Even before the cold snap, gas stocks were 13 percent below the five-year average at the end of last week, according to the U.S. Energy Information Administration ("Weekly natural gas storage report", EIA, Jan. 31). But futures prices for gas delivered in March continued to fall and are now close to their lowest levels for the last four years, well below $3 per million British thermal units (https://tmsnrt.rs/2BesoaZ). Gas stocks have remained reasonably comfortable as a result of a relatively mild winter so far and plentiful supplies that have ensured stocks have drawn down more slowly than in previous years for any given level of cold. The winter heating season has now passed the half-way point and, so far, temperatures have been slightly warmer than the long-term average, according to government data. Cumulative population-weighted heating degree days between July 1 and Jan. 30 were 3 percent lower than the long-term average ("Degree day statistics", U.S. Climate Prediction Center, Jan. 31). This winter has been significantly colder than the exceptionally mild winters of 2015/16 and 2016/17 but about the same as winter 2017/18 and is still warmer than average so far.
New Jersey Nuclear Reactor Shut Down By Polar Vortex - After the Arctic polar vortex brought temperatures in parts of Canada to record lows that, in some places, rivaled the temperatures on the surface of Mars (not to mention leaving nine people dead), the infamous Arctic air has notched another milestone: It has shut down a nuclear reactor due to an extremely rare phenomenon called 'frazil ice'. Never heard of frazil ice? Neither had we. According to Bloomberg, Public Service Enterprise Group, shut a reactor early Thursday at unit at its Salem nuclear plant in southern New Jersey after screens on its intake froze over, restricting the flow of water needed to cool off the reactor, according to spokesman Joe Delmar. A second unit at a station on the Delaware river was temporarily closed for the same reason. The 60-foot-tall intake screens help guard the reactor against debris like floating wood. But Under extreme conditions (like those witnesses this week), overnight low temperatures at the station can fall into the single digits (or lower), creating frazil ice - small crystals of frozen mist - which can collect on the screens, thicken, and form a cement-like coating that completely blocks the flow of water into the reactor, causing circulators to shut down.The blockage prompted the Newark-based Public Service Enterprise Group to take the plant offline."We had the heaters running, we had folks out there, and we lost the four circulators within five minutes," Delmar said. He wouldn’t say when Salem 2 is expected to go back into service. The last time the Salem unit was shut for frazil ice was in 2010. Regular ice formations typically don't completely block off the flow of water, but because of the frazil ice's ability to make the reactor completely inaccessible, operations must be shut down.
Extreme cold spell wreaks havoc across United States --Deadly cold air flows from the Arctic continued to wreak havoc across the US Thursday, claiming lives and pushing critical electrical and natural gas infrastructure past its breaking point, resulting in the idling of auto assembly plants in Michigan.Millions of students were out of school for another day, Thursday, and businesses remained closed, with building heating systems unable to overcome the frigid temperatures; mail service was suspended throughout much of the Midwest for a second day. Thousands of airline flights have been canceled across the region.The weather pattern known as the polar vortex brought freezing temperatures to 212 million people across the United States, and extreme sub-zero temperature to approximately 83 million people, with the Midwestern states bearing the brunt. An estimated 3.5 million people in the states of Minnesota, Wisconsin, Iowa, Illinois and Michigan experienced temperatures below negative 30 degrees Fahrenheit (-34 Celsius) by Thursday morning.A weather station in Mt. Carroll, Illinois, an hour northeast of the Quad Cities, recorded a temperature of -37 degrees Thursday; if officially certified by the National Weather Service it would be the lowest temperature ever recorded in the state.The deep freeze and increased demand for heat pushed electrical grids and natural gas distribution networks past their breaking points, putting millions at risk of freezing in their homes. Natural gas usage in the lower 48 states hit an all-time daily high Wednesday with an estimated 145.2 billion cubic feet consumed. A fire which broke out Wednesday at a Consumers Energy natural gas compressor plant in Macomb County, north of metro Detroit, resulted in a gas shortage which put many in the region at risk of losing heat in their homes. An emergency cellphone text message was sent to every resident in southeastern Michigan directing them to reduce the heat in their homes to 65 degrees to avoid overtaxing the distribution system. A statement put out on the utility’s Twitter account warned that, “without additional reductions, we run the risk of not being able to deliver natural gas to families and critical facilities across Michigan—a scenario none of us want to encounter.”
Polar vortex death toll rises to 21 as US cold snap continues - At least 21 people have died in one of the worst cold snaps to hit the US Midwest in decades. Ninety million people - a third of the US - have seen temperatures of -17C (0F) or below. Some 250 million Americans overall have experienced the "polar vortex" conditions. Hospitals have been treating patients reporting frostbite as parts of the country ground to a halt. Temperatures are expected to swing to above average over the weekend. Homeless people have been particularly at risk, with warming shelters set up across cities. But some still braved the freezing conditions and one woman, aged 60, was found dead in an abandoned house in Lorain, Ohio. A hospital in Chicago has already treated 50 patients for frostbite, and some may end up losing a limb, CNN reports. Half of those patients were homeless individuals , while others had jobs that required them to be outdoors. Some people were found dead a short walk from their homes:
- A Michigan man who froze to death in his neighbourhood had been "inadequately dressed for the weather", officials said
- In a wind chill of -46C (-51F) an 18-year-old student was found unresponsive a short walk from his dorm on Wednesday and later died in hospital
- On Tuesday, a man froze to death in a garage in Milwaukee, Wisconsin, having "apparently collapsed after shovelling snow", according to a medical examiner
Dangerous roads have also been a factor in the deaths. A man was fatally struck by a snow plough near Chicago on Monday and in northern Indiana, a 22-year-old police officer and his wife died after a collision on icy roads.
As Midwest Freezes, Aussie Heatwave Reaches Record Highs - While Midwest America hunkers down for the coldest temperatures in a generation, temperature records have also tumbled across South Australia, with the city of Adelaide experiencing its hottest day on record. Life-threatening cold is sweeping across Chicago... As Australians face animal culls, mass fish deaths across the nation, roads melting, and bats falling from trees... Adelaide hit 46.6C, the hottest temperature recording in any Australian state capital city since records began 80 years ago, sending homelessness shelters into a “code red”, and sparking fears of another mass fish death in the Menindee Lakes in the neighbouring state of New South Wales.In central and western Australia, local authorities were forced to carry out an emergency animal cull, shooting 2,500 camels – and potentially a further hundred feral horses – who were dying of thirst. In Port Augusta, 300km north-west, an all-time record was also set, as the city hit 49.5C. Imagine 120°F (49°C) in the shade--and even by the water. You're picturing the #heatwave now scorching #Australia. Fire threat will be top-of-the-scale in some areas on Friday https://t.co/q2SP0TUbUO pic.twitter.com/NDUKsV4KDH — Weather Underground (@wunderground) January 25, 2019
Disaster Declared as Australian City Sees a Year’s Worth of Rainfall Within Days - A disaster was declared in Townsville in Queensland, Australia after heavy rainfall caused a landslide Thursday that prompted police to order evacuations of properties including an apartment complex, Australia's ABC News reported. Premier Annastacia Palaszczuk closed all schools and childcare centers in the area Friday as the rain is expected to keep falling through the weekend.The monsoon system has also caused flooding in the area, submerging 50 homes and stranding around 30 people who had to be rescued, according to The Guardian. "There was no water on the ground around our house when I left," flood survivor Elly Carpentier said, according to The Guardian. Carpentier said she went to pick up two of her three children from school and came back to a flooded home. "The floodwater came up three meters (approximately 9.8 feet) in 30 minutes. My house was submerged under water, that's how quick it was. It was incredible. I have never seen anything like it." The flood risk zone stretches through 850 kilometers (approximately 528 miles) of Queensland north to south from Daintree to Mackay. The Bureau of Meteorology (BOM) expects some areas will see 400 millimeters (approximately 15.7 inches) of rain daily for several days. But Townsville has been especially inundated. "The annual rainfall for Townsville is 1.1 metres (approximately 3.6 feet). We're seeing more than that at the moment. We're going to see places get two or three times their summer average rainfall amounts," Dr. Richard Wardle of BOM told The Australian Associated Press.
The World Just Experienced the Four Hottest Years on Record -- 2018 was hotter than any year in the 19th century. It was hotter than any year in the 20th century. It was hotter than any year in the first decade of this century. In fact, with only three exceptions, it was the hottest year on Earth since 1850. Those three exceptions: 2018 was slightly cooler than 2015, 2016, and 2017. The past four years, in other words, have been the four hottest years ever reliably measured.That’s according to Berkeley Earth, a nonprofit research group that published its annual temperature analysis on Thursday. The report’s overall findings will not surprise most scientists. The European Union’s climate center has already concluded that 2018 was the fourth-warmest year on record. But the report contains plenty of records worth noting in their own right. 2018 was the hottest year ever recorded in Antarctica, a finding with worrisome implications for sea-level rise. Twenty-nine countries—including France, Germany, Italy, Greece, and the United Arab Emirates, where temperatures hit 123 degrees Fahrenheit in June—experienced their warmest year ever last year, too.
Warming Oceans Strongly Linked to Sea Star Die-Off - A sea star once "as common as a robin" off the Pacific coast of the U.S. is now considered an endangered species in the southern part of its range, and new research suggests climate change might be partly to blame. Since 2013, a sea star wasting disease has devastated around 20 sea star species between Mexico and Alaska. While some species have begun to recover, the vitally important predatory sunflower star has not, a paper published Wednesday in Science Advances found. In fact, its population has decreased by 80 to 100 percent across a 3,0000 kilometer (approximately 1,864 miles) range between California and Canada. The research team, led by Cornell University and University of California (UC), Davis, confirmed the decline using data from more than 10,000 dives by researchers and citizen scientists, as well as thousands of deep ocean trawls carried out by the National Oceanic and Atmospheric Administration (NOAA). They also found that the sunflower star die-offs were highly correlated with spikes in ocean temperature. "The heat wave in the oceans—a product of increasing atmospheric temperatures—is exacerbating the sea star wasting disease," Drew Harvell, a fellow at Cornell's Atkinson Center for a Sustainable Future said in theUC Davis press release. "It's a lethal disease, and when you add a higher temperature to that, it kills faster, causing a bigger impact."
Scientists say warming oceans leading to widespread deaths of some starfish - Scientists say that rising ocean temperatures likely exacerbated by human-caused global warming were behind the deaths of millions of starfish along the Pacific Coast. According to a new scientific study released Wednesday, millions of starfish began dying off in 2013 when the Pacific Ocean became unusually warm during a heat wave, dubbed the Blob. Twenty species of starfish were affected by the widespread disease, which began with starfish developing white lesions before dissolving their flesh and limbs and ultimately leading to their death. The New York Times reported that Cornell University professor Drew Harvell and her colleagues focused on the population of sunflower star — the predatory star known for having between 16 and 24 limbs spanning four feet across — for the study. Published in the Science Advances journal, the study shows a relationship between where sunflower stars developed the disease and died and where heat spread through the ocean. The study shows a correlation, but does not determine that heat is the direct cause of starfish deaths. .
Warming Seas May Increase Frequency of Extreme Storms - A new NASA study shows that warming of the tropical oceans due to climate change could lead to a substantial increase in the frequency of extreme rain storms by the end of the century. The study team, led by Hartmut Aumann of NASA's Jet Propulsion Laboratory in Pasadena, California, combed through 15 years of data acquired by NASA's Atmospheric Infrared Sounder (AIRS) instrument over the tropical oceans to determine the relationship between the average sea surface temperature and the onset of severe storms. They found that extreme storms - those producing at least 0.12 inches (3 millimeters) of rain per hour over a 16-mile (25-kilometer) area - formed when the sea surface temperature was higher than about 82 degrees Fahrenheit (28 degrees Celsius). They also found that, based on the data, 21 percent more storms form for every 1.8 degrees Fahrenheit (1 degree Celsius) that ocean surface temperatures rise. "It is somewhat common sense that severe storms will increase in a warmer environment. Thunderstorms typically occur in the warmest season of the year," Aumann explained. "But our data provide the first quantitative estimate of how much they are likely to increase, at least for the tropical oceans." Currently accepted climate models project that with a steady increase of carbon dioxide in the atmosphere (1 percent per year), tropical ocean surface temperatures may rise by as much as 4.8 degrees Fahrenheit (2.7 degrees Celsius) by the end of the century. The study team concludes that if this were to happen, we could expect the frequency of extreme storms to increase by as much as 60 percent by that time.
Fire-Induced Storms: A New Danger from the Rise in Wildfires - Early in the evening of August 12, 2017, heat and smoke from an intense wildfire burning in the forests of British Columbia began mushrooming skyward, sucking up ash, blazing wood and vegetation, and water vapor from lakes and streams below. Sensing that this conflagration was going to erupt into something extraordinary, Rick McRae texted a group of scientists from around the world who since 2013 have been collaboratively studying fire-triggered thunderstorms — technically known as pyrocumulonimbus clouds, or “pyroCbs.” “This is a very bad day all around in western Canada,” he wrote. “Fires went ‘pop’ progressively on the leading edge.” A pyroCb was forming in the southeast corner of British Columbia, near Kamloops, McRae added, noting, “Things could get worse if certain things ‘align.’” And align they did. As fires that would eventually consume 4,700 square miles in British Columbia burned out of control, five fire-driven thunderstorms rose over the conflagration, shooting black smoke and carbon high into the lower stratosphere, spewing noxious gases that were eventually detected almost as far north as the North Pole, and touching off more fires. At the same time, fires in neighboring Washington State spawned yet another pyroCb. “By later that night we were agape about the cluster of pyroCbs and the extremely impressive smoky anvil-shaped clouds,” Yet another major pyroCb event occurred in May 2016 during a massive wildfire in Alberta that forced the evacuation of 88,000 people in the tar sands community of Fort McMurray. A pyroCb formed over the fire that day, and lightning from the firestorm ignited several new fires in the forest 22 miles northeast of the fire’s front, astonishing wildfire experts. “I have never heard of lightning causing new fires so far in advance of the main fire,” said Cordy Tymstra, the wildfire science coordinator for the Alberta government.
PG&E argues wildfire prevention court order would cost up to $150 billion -Pacific Gas & Electric (PG&E) stated in a filing Wednesday that full compliance with a wildfire prevention court order would cost between $75 billion and $150 billion. The US District Court for the Northern District of California proposed on January 9 to require PG&E to re-inspect all of its electrical grid and remove or trim any trees that could fall on the lines and fix all conductors that may push together. These changes were required to be completed before the 2019 wildfire season, which starts June 21, 2019.The court declared in a preliminary finding last week that based on evidence presented, that uninsulated power conductors are often pushed together due to fallen trees or limbs. This then caused sparks to fall on the vegetation below which pose an “extreme danger” of starting a wildfire. The equipment was called a common cause of California wildfires in 2017 and 2018 that have been attributed to PG&E.PG&E stated that full compliance would require the company to increase rates of its customers by at least a factor of five for the low estimate. The company estimated that there could be more than 100 million trees that would need to be removed or trimmed. Due to the short time frame stated by the court, the company also estimated it would need to develop a work force of 650,000 full-time employees. It also stated that “[r]educing the risk to zero would require clear-cutting on an unprecedented scale.”PG&E is accused of starting wildfires through reckless operation or maintenance of its power lines. The California Department of Forestry and Fire Protection has not concluded investigations into the 2018 Camp Fire or other 2018 wildfires, but the law suit states that the organization found evidence of state law violations in eleven 2017 wildfires. PG&E is currently facing bankruptcy over the potential liability for damages due to the 2017 and 2018 wildfires. Not including punitive damages or fines, PG&E is facing $30 billion in damages. The Attorney General for California indicated in an amicus brief filed in December that PG&E could also face murder or involuntary manslaughter charges for the wildfires.
PG&E files for bankruptcy as California wildfire liabilities loom (Reuters) - PG&E Corp, owner of the largest U.S. power utility, filed for bankruptcy protection on Tuesday in anticipation of liabilities in excess of $30 billion from the deadliest wildfires in California’s history. PG&E, which provides electricity and natural gas to 16 million customers in northern and central California and employs 24,000 people, vowed to keep the lights on and continue with critical investments it said were needed in its system’s safety and maintenance. “The power and gas will stay on ... We are not ‘going out of business,’ and there will be no disruption in the services you expect from us,” interim Chief Executive John Simon said in a letter to customers. PG&E faced no immediate cash crunch. Its decision to file for bankruptcy was driven by its assessment of upcoming legal liabilities. While state investigators cleared PG&E this month of liability in one of several 2017 wildfires in California’s wine country, the company still may be found liable for a fire that killed at least 86 people in Northern California in November. The San Francisco-based company faces lawsuits from owners of homes and businesses that burned during that and other fires. Filing for bankruptcy temporarily shields PG&E from these claims, allowing it to negotiate settlements in bankruptcy court. PG&E’s bankruptcy attracted criticism from some California politicians, shareholders and wildfire victim advocates. California Senate President Toni Atkins called PG&E’s decision disappointing and said the bankruptcy was not the optimum solution for Californians. “That was PG&E’s choice but it does not change my focus, which remains protecting the best interests of the people of California,” Gavin Newsom, who took office as governor of California earlier this month, said in a statement. California Attorney General Xavier Becerra, a Democrat, said he expected to represent the state and its people in the bankruptcy court as the proceeding continued. “We’re prepared to do whatever is necessary to protect ratepayers, taxpayers and wildfire victims,” Becerra said in an interview in Sacramento.
PG&E files for bankruptcy. Here’s why that could mean bigger electricity bills - PG&E Corp., which owns California’s largest electric utility, filed for bankruptcy protection Tuesday in anticipation of huge legal claims, starting an unpredictable process that could take years to resolve and is likely to result in higher energy bills for the millions of Californians who depend on Pacific Gas & Electric for power.PG&E said a Chapter 11 bankruptcy filing, which allows the company to continue operating while it comes up with a plan to pay its debts, was the only way to deal with billions of dollars in potential liabilities from a series of deadly wildfires, many of which were sparked by the company’s power grid infrastructure.“Through this process, we will prioritize what matters most to our customers and the communities we serve — safety and reliability,” interim Chief Executive John R. Simon said in a statement. “We believe that this process will make sure that we have sufficient liquidity to serve our customers and support our operations and obligations.”Energy experts say PG&E’s rates probably will increase when the utility emerges from Chapter 11 protection because bankruptcy inevitably makes it more expensive for a company to borrow money and creates large legal and other bankruptcy-related costs. The utility passes such expenses along to its customers.“It’s almost impossible to see a way out of this that doesn’t have some short-term cost increases,” Ralph Cavanagh, co-director of the energy program at the Natural Resources Defense Council, said in a recent interview. A bankruptcy judge could also allow PG&E to reduce its eventual payouts to California fire victims. That could include Paradise residents whose homes were destroyed by last year’s Camp fire, if PG&E’s equipment is found to have sparked the blaze. The utility has already started skipping payments to families whose properties were destroyed by the 2015 Butte fire, which was caused by a tree falling on a PG&E power line.
California utility equipment sparked more than 2,000 fires in over three years -Equipment owned by California’s three largest utilities ignited more than 2,000 fires in three and a half years — a timespan in which state regulators cited and fined the companies nine times for electrical safety violations. How the state regulates utilities is under growing scrutiny following unprecedented wildfires suspected to have been caused by power line issues, blazes that have destroyed thousands of homes and killed dozens of people. Lacking the manpower and sophisticated technology necessary to monitor more than 250,000 miles of power lines across the state, regulators rely on something of an honor system, with utilities responsible for ensuring all trees and vegetation are cut back far enough from electrical equipment before the onset of dry, high-fire danger conditions. Destructive wildfires in Paradise, wine country, Ventura County and other areas have prompted California lawmakers to consider new ways to improve regulatory oversight and hold utilities more accountable for prevention. The California Public Utilities Commission has never fined an electrical utility company for failing to meet safety standards before a wildfire strikes. Instead, the agency fines the utilities for violations after investigations into fires find wrongdoing — and the process can drag on for years. “The CPUC oversight of investor-owned utilities to prevent electrical or utility-caused wildfires is devastatingly absent,” said John Fiske, a lawyer who represents wildfire victims. “When you’re looking at areas that look like they’ve been bombed in a war zone, and to know that can be prevented with enforcement and oversight, it’s widely upsetting.” Investor-owned utilities are required to file annual reports with state regulators detailing even the smallest of spot fires linked to electrical equipment. Most of the blazes are less than 10 acres in size. And many of the most destructive wildfires in recent years are not included in the data because utilities are hesitant to tie their equipment to costly blazes before state investigations conclude.
Federal Judge Blasts Criminal PG&E's Clear-Cut Pattern Of Starting Fires - After rallying in the 'good' news that the company has entered Chapter 11, PG&E's stock is lower today, not helped by a federal judge's comments slamming the triple-bankrupt utility for serially starting fires. Following a series of massive fires along its 125,000 miles of power lines over the last two years, Bloomberg reports that U.S. District Court Judge William Alsup - who is overseeing PG&E’s probation for safety violations that led to felony convictions for the 2010 explosion of one of its gas pipelines, which killed eight people - didn’t back down from his criticism of the utility despite being told he had overreached.“Usually a criminal on probation is forthcoming and admits what they need to admit. You haven’t admitted much,” Alsup told lawyers for the company at a hearing Wednesday in federal court in San Francisco. “There’s a clear-cut pattern here: that PG&E is starting these fires.” Among other suggestions, the judge proposed subjecting the company to criminal sanctions if it failed to shut off electric supply to portions of the grid on extremely windy days, trim tree branches and inspect and repair thousands of miles of power lines. But of course, what are a few tens of billions of dollars of liabilities? BTFD!! We remember the old days where corporate bankruptcy was a negative event for shareholders.
Huge Cavity in Antarctic Glacier Signals Rapid Decay - A gigantic cavity — two-thirds the area of Manhattan and almost 1,000 feet (300 meters) tall — growing at the bottom of Thwaites Glacier in West Antarctica is one of several disturbing discoveries reported in a new NASA-led study of the disintegrating glacier. The findings highlight the need for detailed observations of Antarctic glaciers' undersides in calculating how fast global sea levels will rise in response to climate change. Researchers expected to find some gaps between ice and bedrock at Thwaites' bottom where ocean water could flow in and melt the glacier from below. The size and explosive growth rate of the newfound hole, however, surprised them. It's big enough to have contained 14 billion tons of ice, and most of that ice melted over the last three years. "We have suspected for years that Thwaites was not tightly attached to the bedrock beneath it," said Eric Rignot of the University of California, Irvine, and NASA's Jet Propulsion Laboratory in Pasadena, California. Rignot is a co-author of the new study, which was published today in Science Advances. "Thanks to a new generation of satellites, we can finally see the detail," he said. The cavity was revealed by ice-penetrating radar in NASA's Operation IceBridge, an airborne campaign beginning in 2010 that studies connections between the polar regions and the global climate. The researchers also used data from a constellation of Italian and German spaceborne synthetic aperture radars. These very high-resolution data can be processed by a technique called radar interferometry to reveal how the ground surface below has moved between images.
City-Sized 1,000-Foot Deep Cavity Found in Glacier, Warns NASA, Signaling 'Rapid Decay' of Antarctic Ice - NASA scientists were startled when a recent exploratory mission revealed a huge and rapidly-growing cavity on the underside of one of Antaractica's glaciers—signaling that the ice mass has been melting much faster than experts realized.The cavity is two-thirds the size of Manhattan—large enough to have contained about 14 billion tons of ice before it melted, according to a report that was published in Science Advances on Thursday.Much of that ice disappeared at an "explosive rate," scientists reported—likely melting only in the last three years."The size of a cavity under a glacier plays an important role in melting," lead author Pietro Milillo said in a statement. "As more heat and water get under the glacier, it melts faster."The agency's Jet Propulsion Laboratory used ice-penetrating radar to explore the area beneath the Thwaites Glacier in West Antarctica, often called "one of the world's most dangerous glaciers" because its melting could significantly contribute to sea level rise. Scientists expected to find some relatively small gaps between the glacier and bedrock, but were unsettled by the 1,000-foot deep cavity the mission revealed.As Common Dreams has reported, the study follows numerous recent scientific reports showing that ice in Antarctica is melting at a much faster rate than previously thought—as oceans warm more rapidly as well.The melting of the Thwaites Glacier, which is the approximately the size of Florida, is already behind about four percent of global sea rise, according to the Jet Propulsion Laboratory. The disappearance of the ice mass would cause sea levels to rise by about two feet as well as making surrounding glaciers more likely to melt rapidly—which could cause an eight foot rise. As Jon Gertner wrote at Wired last month, scientists have regarded the difficult-to-reach glacier with "dark speculation" in recent years:
‘Worrying’ rise in global CO2 forecast for 2019 - The level of climate-warming carbon dioxide (CO2) in the atmosphere is forecast to rise by a near-record amount in 2019, according to the Met Office. The increase is being fuelled by the continued burning of fossil fuels and the destruction of forests, and will be particularly high in 2019 due to an expected return towards El Niño-like conditions. This natural climate variation causes warm and dry conditions in the tropics, meaning the plant growth that removes CO2 from the air is restricted. Levels of the greenhouse gas have not been as high as today for 3-5m years, when the global temperature was 2-3C warmer and the sea level was 10-20 metres higher. Climate action must be increased fivefold to limit warming to the 1.5C rise above pre-industrial levels that scientists advise, according to the UN. But the past four years have been the hottest on record and global emissions are rising again after a brief pause.“Looking at the monthly figures, it’s as if you can see the planet ‘breathing’ as the levels of CO2 fall and rise with the seasonal cycle of plant growth and decay in the northern hemisphere,” said Prof Richard Betts, at the Met Office’s Hadley Centre. “Each year’s CO2 is higher than the last, and this will keep happening until humans stop adding CO2 to the atmosphere.” The Met Office has a good record of forecasting global CO2 levels and predicts that the average rise over 2019 will be 2.75 parts per million (ppm). That would put it among the highest annual rises in the 62 years since good records began. Only years with strong El Niño events, 1998 and 2016, are likely to be higher. The rise in 2016 was 3.39ppm. In the decade after the first measurement on the Hawaiian volcano Mauna Loa in 1956, annual rises were less than 0.9ppm per year.
The Unprecedented Surge in Fear About Climate Change - A surging number of Americans understand that climate change is happening and believe that it could harm their family and the country, according to a new poll from Yale and George Mason University. But at the same time, Americans are not any more willing to pay money to fight climate change than they were three years ago, says another new poll, conducted by the Associated Press and the University of Chicago. More than seven out of 10 Americans now say that global warming is “personally important” to them, an increase of nine points since March 2018, according to the Yale poll. More Americans than ever—29 percent—also say they are “very worried” about climate change, an eight-point increase. These changes are basically unprecedented. It reflects a large shift, as an outright majority of Americans—a record-high number—believe that climate change could endanger their loved ones. Historically, most Americans have said that global warming “will harm people in the United States” while insisting that it would “not harm me, personally.” Now 57 percent of Americans say global warming will harm their neighbors, 56 percent say it will harm their family, and 49 percent say it will harm them personally. Yet it’s not clear that Americans are willing to do anything about fighting climate change. Many economists support a carbon tax, a policy that makes polluters pay for emitting greenhouse gases into the atmosphere. Forty-four percent of Americans say they would support such a tax, according to the AP. Americans become more supportive of a carbon tax, though, when they know where the money it collects will go. Sixty-seven percent of Americans would support a carbon tax if it were used to restore forests and wetlands. Majorities also endorse a tax that would support renewable-energy R&D or public-transit improvements. But even then, most people are not willing to spend much. Seventy percent say they would vote against a $10 monthly fee tacked on to their power bill. Forty percent would oppose a $1 monthly increase. These results don’t lend themselves to straightforward answers about what actions to take next.
“Global warming” and “climate change” are disasters at conveying our environmental predicament - The last time Chicago was this cold, Ronald Reagan was US president, the Berlin Wall had yet to fall, and the public release of the World Wide Web was still six years away. On Wednesday, the highs throughout much of Canada and the Upper Midwest of the US were lower than the high temperature on Mars. January, summer in south Australia, averages 85°F (29.4°C). But there’s nothing winsome about 115.9°F (46.6°C) weather, which is where thermometers maxed out in Adelaide during last week’s record-breaking heatwave. If it feels like every month brings some novel or record-setting environmental disaster, it’s because, often, it does. Unfortunately, in an epic feat of brand mismanagement, the climatologists who first began ringing the alarm that Earth was on a crash course for inhospitality called the situation “global warming.” That remains accurate, on a planetary scale: 2018 was the fourth-warmest year on record, based on global annual temperatures. The only years warmer were 2015, 2016, and 2017. Ocean surface temperatures, on average,have been steadily increasing since the 1970s. But that term, “global warming,” is too easily misconstrued, too easily manipulated by bad-faith actors like US president Donald Trump, who point to cold weather events or rainstorms and say “how could Earth be turning hot and dry when it’s colder and raining more than ever?” These science deniers are disingenuous, of course; just take a peek underneath the hood of any politician spouting climate-change denials and you’ll find vainglorious party operatives and avaricious industry influencers lodged in the machinery.“Global warming” was never the right term to use. It doesn’t come close to capturing the catastrophe that’s in our foyer and about to sweep through the house. “Climate change,” which has largely replaced “global warming” in the 2010s, is a bit better, but still doesn’t do the trick—likely because those same bad-faith actors that twisted “global warming” have done the same to “climate change.”
People Power: 160,000 European Protesters Demand Action on Climate Crisis At least 80,000 people marched in a cold rain in Brussels Sunday in another massive protest demanding that the European Union take urgent and far-reaching action to address the world's climate crisis. Sunday's march was the fourth climate march in the past three weeks—each one significantly bigger than the last—as students across Belgium and other European countries have skipped their high school and college classes in order to shame those in power who refuse to move urgently. "The objective of the march is to challenge the Belgian government as well as the heads of state and government who will attend the European Council summit in Brussels on 21 and 22 March," Larry Moffett, one of the organizers of Sunday's march, told the Brussels Times. "The march participants will call on them to meet the target of a 65 percent reduction in greenhouse gas emissions by 2030." In France, organisers said more than 80,000 people demonstrated in French towns and cities on Sunday. An online petition they set up on the issue -- at laffairedusiecle.net -- has already gathered more than 2.1 million signatures and organizers want to hit three million. "Onions, not concrete", "Less consumption, more butterflies" were among the messages on placards at a demonstration in central Paris. The climate strike movement grew out of a direct action by Greta Thunberg, a 15-year-old climate activist from Sweden who skipped school in September to hold her own demonstration outside Swedish parliament. On Friday, an estimated ten thousand students took to the freezing cold streets of Berlin, Germany as they added their voices to the growing youth-led climate global uprising. The Brussels event was described as Belgium's biggest climate march ever. Trains from across the nation were so clogged that thousands of protesters failed to reach the march in time and organizers had to begin the march early to ease the congestion.
America needs a Green New Deal, just not the one radical environmentalists are proposing -The United States needs a Green New Deal, but totalitarian environmentalists with little comprehension of free-market economics or energy industry realities should not dictate the terms. Liberals and conservatives, capitalists and communists, the rich and the poor all need to join the debate to define what a Green New Deal should include. Failing to engage now in devising a strategy to mitigate climate change, while also addressing income inequality, will cede too much territory to radicals on all sides. Conservatives are already vilifying the moniker, and radical environmentalists are setting goal posts. But the Green New Deal dates back to columns written by the New York Times’ Thomas Friedman in 2007 when prominent advocate U.S. Rep. Alexandria Ocasio-Cortez of New York was a senior in high school. The following year, a Green New Deal Group published a concrete proposal, and the U.N. Environment Program backed the recommendations to boost the world economy, promote more equitable development and fight climate change.The original was firmly rooted in the modern, capitalist system and sought to address market inefficiencies.For example, since companies that emit greenhouse gases do not pay the full cost of their damage to the planet, governments were encouraged to grant tax credits for emission-less energy.
A Serious Green New Deal Would Take Up One-Third of the Economy—Are We Ready for That? - There’s no question that deep pockets will be needed, given the scale of the task at hand. Multi-trillion-dollar levels of spending, in fact, will be necessary if we want to follow what the science is telling us needs to be done. The increasingly dire warningsfrom the Intergovernmental Panel on Climate Change (a group that, if anything, has consistently underplayed the scale of the threat)and countless other scientific findings haveintroduced a new sense of realism in terms of the policy response required. Democrats in particular are embracing proposals that would require running the entire American economy on renewable electricity within a few decades, although they have yet to coalesce around a single policy proposal.The most comprehensive is this one, which calls for the federal government to spend around 10 percent of GDP per year—close to $2 trillion—in order to directly build a green infrastructure that will guaranteethat in 20 years the United States will be virtually greenhouse-gas-free. An ambitious plan predicated on FDR’s original New Deal, it calls for a Full Employment Program (not unlike the “Job Guarantee” program) that will purportedly create about 25 million new jobs, via a revived manufacturing sector (assuming that most of the manufacturing is done in the United States, not abroad). It also calls for the establishment of an Interstate Renewable Electricity System, modeled after the Interstate Highway System, that would replace all of the coal, oil, and natural gas that currently generate electricity as the U.S. transitions to a fossil fuel-free economy. The scale of government involvement marks a decided break from the market-driven proposals that have hitherto characterized most earlier green proposals (most controversially, it advocates a 50 percent cut in defense spending to fund these future expenditures, which is almost certainly politically impossible, given the scale of existing militarization in the U.S. economy today, along with the Pentagon’s iron grip over policy-making). On the other hand, if the problem is as dire as much of the science suggests, the policies must match the rhetoric. If that seems like an insurmountable challenge, it is worth recalling that during World War II a much less technologically advanced society managed to survive quite nicely while allocating about one-third of national output for the war effort. If the political class is serious about a Green New Deal, they must also be honest about the scale of the challenges and the question of a “just transition” for those most affected by the resultant displacement and disruption. Former California governor Jerry Brown, for one, has likened the threat to fighting the Nazis in World War II.
A Serious Green New Deal Would Take Up One-Third of the Economy—Are We Ready for That? -naked capitalism Yves here. I have to confess to being not keen about various Green New Deal proposals. They feed the idea that we can largely preserve our lifestyles and still make a big enough reduction in greenhouse gas output soon enough to ward off catastrophic outcomes. There are in my mind, three fallacies here:
- 1. The fastest and most effective way to reduce greenhouse gas output is radical conservation. The urgency of the challenge means this approach needs to be top of the list. Every year more of status quo or not much different is more greenhouse gases pumped into the atmosphere. No one is proposing that we even take measures of the sort imposed in the oil crisis, like lowering speed limits and requiring businesses to set their thermostats to 67 in the winter and 77 in the summer. If we were serious, we’d have to be willing to bankrupt the airlines by forcing 90% reductions in flight levels and outlaw private jets.
- 2. Building green infrastructure has an energy cost, and those costs are seldom incorporated (like the greenhouse gas cost of mining and delivering materials for production of various inputs). They are also not factoring in that some of the materials that are important in current “green” technologies don’t exist in sufficient quantity to satisfy anticipated needs (Jack Lifton has written extensively about lithium). And some materials are costly in environmental terms. See, for example:
- 3. While Green New Deal approaches would be valuable in conjunction with radical conservation, they aren’t sufficient on their own, if nothing else because they will take too long to be implemented when time is of the essence. And they have a tendency to perpetuate the idea that there will be no or little sacrifice needed in cutting carbon output levels.
People accepted rationing and other forms of sacrifice at times of war. I’d take the Green New Deal people a lot more seriously if they firmly opposed US military activity as a source of greenhouse gases and also opposed non-esssential, energy costly technology planned obsolescence schemes like 5G.
Gaia and Consumer - At this stage of our existential crisis we have only the either/or: Ecological vs. consumerist. One’s primary thoughts and actions go one way or the other. (As for myself and anyone else brought up with the indoctrination to be a consumer, we who consciously have renounced this, I don’t know how likely it is we can be born again truly as of the Earth. But at least we can think and live as ecologists and help bring about a new way of living, and eventually a new way of learning to be human.)Corporate production-consumption imperatives dominate all rhythms of power in modern societies. Corporate-Randroid “competition” ideology, corporate austerity, and corporate marketing dominate all modern culture, intellectual life, science, and the pseudo-politics of fake democracy. Consumerist politics is inherently non- and anti-political. This includes almost all aspects of modern political speech and campaigning, and all of electoralism. Fake-political ideas, attitudes, campaigns, are marketed exactly the same way as any other aspect of commodity culture. Those who consume these experience them and act them out in exactly the same way.That’s why it’s usually impossible to have anything recognizably like a political discussion, let alone an argument (in the proper sense of that term). It’s almost always like an angry and childish dispute over which sports team or movie is better, because that’s exactly how most of the “politically aware” conceive and experience politics these days. That’s part of why Politics is Dead in just the sense Nietzsche meant when he wrote God is Dead: People still superficially “believe” in it, but it really means nothing to them except as a superficial identification. They don’t live it. The kind of movement or political party one joins, with membership as a core part of day-to-day life, no longer exists. Thus the term “identity politics” is, in the broad sense, redundant. At least in the West almost all politics is identity politics, no matter what its superficial ideology. This is the complete, though temporary, victory of the production-consumption ideology. Even those who identify as “radicals” see this as a hobby, while they see their “real life” as consumed by their private imperatives: Job; materialism of car, lawn, and “stuff”; maybe sometimes family. They don’t view ecological-political participation and the responsibilities of citizenship, even in a polity let alone an ecology, as being even a co-equal value, let alone the paramount one.
AOC Slams Facebook, Google, Microsoft CEOs Complicit In Denying Climate Change - The poor, the homeless, the immigrants, the minorities, and now climate change - Alexandria Ocasio-Cortez (AOC) has now checked another box in her first month as a member of Congress. AOC's climate warpath began a week ago, quoting the Bible after the White House press secretary, Sarah Huckabee Sanders, suggested the US government should leave environmental protection up to God. Ocasio-Cortez quickly replied via tweet:"'Genesis 1: God looked on the world & called it good not once, not twice, but seven times. Genesis 2: God commands all people to "serve and protect" creation. Leviticus: God mandates that not only the people, but the land that sustains them, shall be respected,'" She went on: "You shouldn't need a Bible to tell you to protect our planet, but it does anyway." And then, just days later, she tweeted on Saturday that the power that tech companies hold in messaging is "societally and economically unsustainable."The fact of the matter is the current monopoly trend is societally & economically unsustainable. We can’t simply accept the cliché that “journalism is dying.”Journalism will only die if we choose not to fight for it - and if journalism dies, our democracy will, too. — Alexandria Ocasio-Cortez (@AOC) January 26, 2019 Which has led to what could be considered a threat from the fresh Congresswoman. Full letter below:
The Democrats Are Climate Deniers - Imagine for a second that the scientific community has just told the world in no uncertain terms there is a meteor headed to Earth that will almost certainly wipe out most, if not all, life on the planet. One of the major political parties in the US is skeptical. They cast aspersions on the scientists, call the whole thing a hoax, repeat meteor-denying propaganda even as the enormous space rock becomes more visible in the sky, and, rather than working to try to stop the meteor from hitting Earth or making preparations to mitigate its impact, they actually implement policies that hasten its arrival and increase its eventual destruction. The other party attracts the support of anti-meteor activists, groups, and philanthropists. When pressed, its members affirm their belief in the existence of the meteor. They defend the beleaguered, increasingly panicked scientists from attacks. They criticize the other party’s denial of the meteor’s obvious existence. But for all their talk, they don’t really seem like they believe what they’re saying. They roll their eyes at anti-meteor campaigners when no one’s looking. They continue to take money from industries profiting in the short-term from the meteor’s arrival. They hardly talk about the meteor unless pressed, and they balk at implementing the kinds of radical policies needed to deal with the meteor. And they frequently team up with the other party to push through policies harmful to anti-meteor efforts. Sure, only one of these parties continues to deny outright that the meteor isn’t coming. But when it comes down to the actual, material outcomes, the difference isn’t that great.
A solution to climate change that Democrats (and Republicans) can rally behind - On Jan. 24, a group of House members — led by Florida lawmakers Democrat Ted Deutch and Republican Francis Rooney — reintroduced the bipartisan climate solution known as Energy Innovation and Carbon Dividend Act (H.R. 763). It places a steadily rising fee on carbon pollution and gives the revenue to households to support people as America transitions to a clean energy economy.This is no timid half-measure. The rate of increase for the carbon fee will push the price to $100 per metric ton within a decade, making it one of the most ambitious carbon-pricing policies in the world. Setting such a high price will bring emissions down at least 40 percent in the first 12 years and 90 percent by 2050.A chief consideration about carbon pricing is the impact it will have on vulnerable populations in low- and middle-income households. Families that struggle paycheck-to-paycheck making ends meet can ill afford to absorb higher costs in their heating and electric bills and at the gas pump. By returning all net revenue to households, the Energy Innovation Act is a progressive policy that puts money in everyone’s pockets, making a big difference for people who truly need it. In most instances, people in lower income brackets will see more benefit from the carbon dividend than they will pay in increased costs associated with the fee. The policy protects vulnerable people in other ways. It reduces air pollution responsible for an estimated 114,000 deaths each year. Much of that pollution is concentrated in low-income areas. By reducing our carbon emissions, this legislation will ensure that extreme weather doesn’t continue to get worse and worse, destroying the homes of people who lack the resources to put their lives back together.
Climate Denial Efforts Target Media, Cities Filing Liability Suits - The conservative think tank Competitive Enterprise Institute has been busily pressing forward with its mission to promote climate denial, using high-profile tactics like full-page ads in major newspapers. But it is also working behind the scenes, filing records requests to dig for information from cities filing climate liability suits and academics studying the topic. As the science has grown definitive in tying global warming to the burning of fossil fuels, even oil companies have been forced to acknowledge the overwhelming scientific consensus and back away publicly from climate denial efforts. But CEI continues to double down on their mission to claim the science is not settled. CEI made a splash this week by purchasing full-page ads in the Washington Post and Wall Street Journal taking issue with Meet the Press host Chuck Todd and NBC for refusing to give airtime to denialists during his Dec. 30 show about climate change. The think tank has deep ties to the fossil fuel industry and has long worked to promote climate denial. And as municipalities have begun to sue fossil fuel companies, including Exxon, CEI has filed briefs and launched other campaigns defending them.
Right “To Their Faces,” 16-Year-Old Greta Thunberg Tells Davos Elite Climate Crisis Their Fault - Sixteen-year-old climate activist Greta Thunberg just told a group of the elite gathered in Davos for the World Economic Forum—as they were seated just feet away from her—that they are among those directly responsible for the climate crisis. Speaking Thursday before a panel that included U2 frontman Bono, former United Nations climate chief Christiana Figueres, acclaimed conservationist Jane Goodall, and panel host and billionaire Marc Benioff, Thunberg echoed themes from a video she created to share with Davos-goers."Some people say that that the climate crisis is something that we all have created. But that is not true—because if everyone is guilty, then no one is to blame. And someone is to blame," Thunberg said to the people in the room. "Some people, some companies, some decision-makers in particular have known exactly what priceless values they have been sacrificing to make unimaginable amounts of money, and I think many of you here today belong to that group of people." Her statement was followed by silence until Bono began applauding. Other audience members and panelists then followed suit. Journalist and climate activist Naomi Klein applauded Thunberg's bravery, writing on Twitter: "It takes deep courage to go to Davos and tell the masters-of-the-universe *to their faces* that they knowingly torched the planet in order [to] get filthy rich."
Industrial Scale Renewable Energy Is Fossil Fuel Plus - Renewable energy is not the solution we think it is. We have inherited the bad/good energy dichotomy of fossil fuels versus renewable energy, a holdover from the environmental movement of the 1970’s that is misleading, if not false. Fossil fuels are correctly understood to be at the heart of capitalism, industrialism, and state formation, the results of which have been ecologically catastrophic. 1 Meanwhile, industrial-scale renewable energy has emerged as the protagonist of our times, positioned as a solution to our ever-increasing energy consumption. Along with market-based conservation and “natural capital” policy making, it is taken to be among the central mitigating forces against climate change and ecological degradation. 2With the rise of the green economy and climate change legislation, renewable energy includes the harnessing of wind, solar, and other apparently infinite “natural resources” to meet energy consumption on an unprecedented, ever expanding scale. However, contrary to the claims of its proponents, it by no means adequately addresses the real problem posed by current levels of energy consumption, which are driven by capitalist growth imperatives that ultimately cause the ecological degradation and climate change we see today. A focus on the technocratic issue of energy consumption often leaves unchallenged the political-economic violence of intrinsic to the social system that such energy powers.Industrial-scale renewable energy does nothing to remake the exploitative relationships with the earth and ecosystems created and reproduced by “industrialized humans” — people acclimated to and dependent upon an industrial capitalist way of life. The excessive concern with possible energy solutions within capitalism as opposed to more fundamental social transformations expresses our inability to imagine any other way of living, blinding us to the deeper socio-ecological insurrection that climate change has made necessary. Industrial-scale renewable energy and the grid-centric systems it powers represent the renewal and expansion of the present political and capitalist order. Not only are existing social discontents like inequality, discrimination, and exploitation reinforced by renewable energy, but the amount of infrastructure it presently requires clearly indicates the ecological costs involved in its full implementation. The wind and solar parks that span across fields and hillsides as far as the eye can see are harbingers of what this new energy system would look like. Where does all this metal come from, how much energy can it produce, and what kind of society do these systems propel and enable?
Ban on diesel vehicles drives Germans to the street – to protest -- Germans are not as rowdy as their neighbors in France, but they are as touchy about their cars and the affordability of driving. So even in well-behaved Germany, angry drivers are beginning to take to the streets to protest bans on driving diesel vehicles. Several hundred people attended a demonstration in Stuttgart last Saturday, as the city that is home to Mercedes-Benz and Porsche became one of the first to enforce a driving ban this month due to pollution. Larger rallies may be in store as the Free Democrats have called for a protest on February 9.The somewhat abstract discussion about Germany weaning itself off fossil fuels and reducing carbon emissions to zero – something that will take decades to realize – has suddenly become much more immediate, with actual bans and talk of a speed limit on the autobahn.Protests are not likely to be as big or raucous as the “yellow vest” demonstrations that have roiled France and forced President Emmanuel Macron to walk back plans to raise gasoline taxes. But then again, the French have a lot more practice in rioting. It takes far less to alarm German politicians. Adding fuel to the fire, more than 100 German pulmonologists signed a paper this week casting doubt on the health risks from the fine particulates and nitrogen dioxide spewed out by diesel engines. The paper, written by a former president of the German Respiratory Society, Dieter Köhler, challenged the existing studies claiming harm. So now, the emissions standards set by the European Union have become a political football in Germany, exposing once again the warring factions within the ruling coalition.
How This Oil Refiners Group Rallied GOP Governors’ Support for Trump’s Rollback of Auto Standards - As the Trump administration worked to revise and relax federal fuel economy and emissions standards for cars and light trucks, an oil refiners trade group worked connections with Republican governors to rally support for the proposed rollback. Emails obtained by Documented, a watchdog group that tracks corporate influence in government, revealed that theAmerican Fuel & Petrochemical Manufacturers (AFPM) were actively recruiting Republican Governors to sign onto a public comment letter supporting the weaker CAFE (corporate average fuel efficiency) standards, while also “shopping around” a pre-written op-ed with language borrowed from the American Energy Alliance, a free market advocacy group run by a former Koch Industries lobbyist. A blockbuster New York Times investigation published in December revealed how AFPM, using a front group calledEnergy4US, deployed Facebook advertisements to prompt thousands of identical public comments filed in the Federal Register supporting the proposed rule. An earlier article on the Facebook ads by ProPublica had linked AFPM to Energy4US, and researchers at DeSmog's KochvsClean had since connected the front group to more than one-quarter of all public comments that the Department of Transportation (DOT) had received on the proposed rule, while also revealing that the Consumer Energy Alliance was connected to the campaign.In addition to the more than 3,000 identical comments, the emails obtained by Documented through a number of state open records requests revealed a much broader influence campaign. Email messages show AFPM representatives reaching out to the staff of Republican governors, soliciting signatures for a formal letter that was eventually submitted to the Department of Transportation and the Environmental Protection Agency (EPA). In another email, AFPM’s Senior Vice President of Federal and Regulatory Affairs shared a pre-written draft of an op-ed with the Wyoming Governor's office, asking if Governor Matt Mead would consider putting his name on it.
Britain's dirty secret: the burning tyres choking India - Monibot - When China banned imports of plastic waste a year ago, you might have hoped that the UK government would invest heavily in waste reduction and domestic recycling. Instead, it has sought new outlets for our filth. Among the lucky recipients are Malaysia, Thailand and Vietnam, none of which have adequate disposal systems – as I write, our plastic is doubtless flooding into their seas. There’s a term for this practice: waste colonialism.Our plastic exports are bad enough. But something even worse is happening that we don’t see at all. Every month, thousands of tonnes of used tyres leave our ports on a passage to India. There they are baked in pyrolysis plants, to make a dirty industrial fuel. While some of these plants meet Indian regulations, hundreds – perhaps thousands – are pouring toxins into the air, as officials look the other way. When tyre pyrolysis is done badly, it can produce a hideous mix: heavy metals, benzene, dioxins, furans and other persistent organic chemicals, some of which are highly carcinogenic. Videos of tyre pyrolysis in India show black smoke leaking from the baking chamber, and workers in T-shirts, without masks or other protective equipment, cleaning tarry residues out of the pipes and flasks. I can only imagine what their life expectancy might be.India suffers one of the world’s worst pollution crises, which causes massive rates of disease and early death. There is no data on the contribution made by tyre pyrolysis plants, but it is doubtless significant. Nor do we know whether British tyres are being burned in plants that are illegal, as our government has failed to investigate this. It seems prepared to break its own rules on behalf of the companies exporting our waste. And this is before Brexit. Unlike plastic waste, there is a ready market for used tyres within the UK. They are – or were – compressed into tight blocks to make road foundations, embankments and drainage beds. It’s not the closed-loop recycling that should be applied to everything we consume, let alone the radical reduction in the use of materials required to prevent environmental breakdown. But it’s much better than what’s happening to our discarded tyres now. The companies that made these blocks have either collapsed or are in danger of going that way, as they can no longer buy scrap tyres: Indian pyrolysis plants pay more.
Return of Supersonic Planes Would Be a Dirty, Noisy Climate Disaster - The return of supersonic airplanes would result in 96 million metric tons of carbon pollution per year, according to a new study released Wednesday by the International Council on Clean Transportation."In our era of runaway climate change, swapping fuel efficiency for speed is a devil's bargain," said Clare Lakewood, a senior attorney at the Center for Biological Diversity. "The aviation industry should be reducing its massive carbon footprint, not enlarging it with exorbitant luxuries for the super-wealthy. Supersonics are catastrophic for the climate."Aviation startups envision a fleet of 2,000 supersonic planes, which will burn five to seven times more fuel per passenger than standard airliners, serving 500 cities by 2035. The study estimates that this fleet would emit 1.6 to 2.4 gigatonnes of carbon dioxide over a 25-year service lifetime—eight times more than the entire U.S. aviation industry emits in a year.Supersonic planes also create a loud roar, called a sonic boom, when they break the sound barrier. That continues along the entire supersonic flight route. The planes could double the area exposed to harmful noise pollution around airports compared to standard planes of the same size, the study found. Exposure to aircraft noise is linked to high blood pressure and heart disease, cognitive impairments in children, and life-threatening disturbance for sensitive and endangered wildlife.U.S. airports expected to experience 100 or more supersonic landing and takeoffs per day include Los Angeles, San Francisco and New York's JFK. Parts of the country could be exposed to between 150 and 200 sonic booms per day, or up to one boom every five minutes over a 16-hour flight day. In August 2018, 38 environmental, public-health and community groups successfully urged the Senate to reject a provision in the Federal Aviation Administration reauthorization bill that would have lifted a 45-year ban on overland supersonic flight in the U.S. But the bill passed in October 2018 with a provision requiring the FAA to start setting certification standards that will let civilian supersonic planes fly in U.S. airspace—and to consider repealing the overland supersonic flight ban.
Heathrow could get sonic boom 'every five minutes' from fast jets -- Heathrow airport could be hit by a sonic boom every five minutes as a new class of supersonic aircraft come into service, research suggests. It is predicted that by 2035 there could be demand for up to 2,000 supersonic passenger jets, which could knock hours off long-haul trips. As well as further eroding the chance of limiting global warming by contributing to greater aviation emissions, the revival of supersonic aircraft would bring sonic booms to many parts of the UK, according to analysis by the International Council for Clean Transportation (ICCT). Dan Rutherford, the report’s author, said there could be 300 daily landings and takeoffs by supersonic jets at Heathrow airport, and the noise would affect twice as large an area as subsonic craft. Manchester and Gatwick airports would be less affected with around 10 and 20 flights per day respectively, the report says. Rutherford said: “Separately, the UK could be impacted by sonic boom from flights between continental EU and North America. Central England could experience sonic booms about 50 times per day, or approximately once every 20 minutes over a 16-hour flight day. In Ireland it could be much worse.” The supersonic jets are predicted to emit as much as 2.4 gigatonnes of CO2 over their 25-year lifespan, taking up a fifth of the aviation sector’s carbon budget for this century. After the US, the UK would be the second highest greenhouse gas emitter from the new jets, the ICCT says. Prof Kevin Anderson, of Manchester University’s Tyndall Centre for Climate Change Research, said: “Science has demonstrated the planetary-scale impacts that our deep addiction to fossil fuels is having on global ecosystems and on our own children’s futures. Yet rather than transform the world to one of low-carbon prosperity, our resources and ingenuity are being squandered on toys for a privileged few. Do we really think that the prospect of attending Davos by supersonic jet is an appropriate response to the existential threats we face?”
Solar demand overwhelms Michigan utility – not “predictable” - Consumers Energy has asked Michigan regulators to suspend solar power interconnection applications as the increase in applications was “substantial, and too sudden, to allow to Company to respond” with appropriate resources. Michigan electric utility Consumers Energy has applied for a “partial waiver of the Electric Interconnection and Net Metering Standards” with the state’s Public Utility Commission (PUC). The filing (Case No. U-20444 – 28 page pdf) noted that between 2008 and 2015 interconnection applications grew from 58 to 259. However, in the past two years: The total number of annual interconnection applications submitted to Consumers Energy has increased exponentially. All told, the Company received 2,435 interconnection applications in 2017 and 2018…That is more than three applications per day, every single day, over a two-year period…The increase in interconnection applications that began in 2017 was too substantial, and too sudden, to allow the Company to respond with an immediate corresponding increase in resources and staffing. The company stated, First, the scale of the problem was not truly known to the Company until 2018…Nor could the increase in applications experienced in 2017 and 2018 have been predicted by the Company in earlier years. If the company had followed the linear growth trends of 2008 through 2016, then 230 and 252 applications would have been expected in 2017 an 2018, respectively. And had that linear growth continued into the future: the annual total of interconnection applications actually received in 2017 (weren’t projected) until around 2040, and it would not have reached the annual total of interconnection applications actually received in 2018 until after 2097.
Still no deal between Eversource, wood-fired power plants — The Public Utilities Commission has refused to order Eversource, the state’s largest distribution utility, to purchase power from the state’s six wood-fired power plants, despite a new law that requires such purchases to promote renewable energy and encourage fuel diversity in New Hampshire’s energy supply.A bill that became law over Gov. Chris Sununu’s veto remains unenforced with no sign that the relief sought by the financially troubled wood-fired power plants is coming any time soon.The question of whether Eversource should be required to make the above-market purchases, and pass the additional cost along to its ratepayers, commanded lawmakers’ attention for much of the 2018 session.The House and Senate eventually passed Senate Bill 365, which was also intended to subsidize the six wood-fired power plants in the Eversource service area, and one trash-to-energy power plant in Concord.Without the guarantee of a buyer at above-market prices, the power plants would likely go out of business, costing jobs and other economic opportunities in some of the most economically depressed parts of the state.The wood-burning plants are located in Springfield, Whitefield, Alexandria, Bridgewater, Tamworth and Bethlehem.
World's 250,000-Ton Nuclear Waste Stockpiles a 'Global Crisis' A new study commissioned by Greenpeace warns that world's ever-growing mountains of nuclear waste is a "global crisis," as these spent fuels can remain dangerously radioactive for thousands of years.The 100-page analysis is an overview of nuclear waste storage facilities in seven countries: France, the U.S., Belgium, Japan, Sweden, Finland and Britain. Several of these nations' waste facilities were "near saturation," the AFP noted from the report."There is now a global stockpile of around a quarter of a million tons of highly radioactive spent fuel in around 14 countries," the report states. "The majority of this spent fuel remains in cooling pools at reactor sites that lack defense-in-depth such as secondary containment and are vulnerable to loss of cooling, and in many cases lack independent back-up power."Moreover, these nations also have to confront other related problems such as fire risk, venting of radioactive gases, environmental contamination, failure of containers, terrorist attacks and escalating costs, AFP pointed out from the study. "More than 65 years after the start of the civil use of nuclear power, not a single country can claim that it has the solution to manage the most dangerous radioactive wastes," Shaun Burnie, a nuclear specialist with Greenpeace Germany and coordinator of the report, said in a statement to AFP.
Trump administration secretly shipped plutonium to Nevada - The Department of Energy (DOE) secretly shipped about a half-ton of weapons-grade radioactive plutonium to Nevada despite the state’s opposition. The Trump administration made the disclosure Wednesday as part of a federal court case in Nevada in which the state is trying to block the DOE from its publicly stated plans to ship radioactive materials from South Carolina. “Because sufficient time has now elapsed after conclusion of this campaign, DOE may now publicly state that it has completed all shipment of plutonium (approximately ½ metric ton) to Nevada,” Bruce Diamond, general counsel for the DOE’s National Nuclear Security Administration, wrote in a court declaration, noting that the action was previously classified. “Although the precise date that this occurred cannot be revealed for reasons of operational security, it can be stated that this was done before November 2018, prior to the initiation of the litigation.” Diamond did not disclose the route the material took, although the DOE previously said it would be moved in special containers with lead radiation shields, among other precautions, carried on trucks. The plutonium went to the Nevada National Security Site, about 90 miles northwest of Las Vegas. Nevada sued the DOE that month to stop the shipments, arguing that the agency had not properly considered the environmental impacts of shipping the materials. The agency’s plan is to move a total of one ton of material to the Nevada site. Nevada officials were angered by the disclosure and pledged to hold the Trump administration accountable. .
List of regulation rollbacks for oil, gas and coal industry - Under President Donald Trump, federal agencies have moved to roll back regulations for companies that extract, transport and burn oil, gas and coal. Government analyses show companies will save billions of dollars in compliance costs, but the trade-off often will be adverse impacts to public health and the environment. The rule changes:
- FUEL TRAIN BRAKES: Citing high costs, Trump’s administration rescinded a 2015 Department of Transportation rule requiring railroads to begin installing more advanced electronic brakes on trains hauling hazardous fuels. Industry savings: $375 million-$554 million (2018-2037)
- METHANE EMISSIONS: Administration wants to eliminate 2016 Environmental Protection Agency rule requiring energy companies to reduce flaring of methane, a potent greenhouse gas. Industry savings: $380 million-$484 million (2019-2025)
- METHANE EMISSIONS: Administration largely eliminated Interior Department’s 2016 “waste prevention rule” that required companies to reduce the flaring of methane on public and tribal lands. Industry savings: $1.4 billion-$2.1 billion (2019-2028)
- CLEAN POWER PLAN: Administration is proposing replacement of EPA’s 2015 rule that aimed to cut U.S. greenhouse gas emissions by focusing on carbon dioxide from coal-fired power plants. The changes are projected to increase annual coal production by 33 million-40 million tons by 2030. Industry savings: $3.7 billion-$6.4 billion (2023-2037)
- COAL ASH DISPOSAL: Administration removed many mandates from 2015 EPA rule aimed at preventing hundreds of spills from toxic coal ash dumps over the next century. Industry savings: $397 million-$605 million (100 years)
- FRACKING: Administration rescinded 2015 Interior Department rule that lowered the risk of water contamination from an oil and gas drilling technique called hydraulic fracturing, or “fracking.” Industry savings: $102 million-$339 million (2018-2027)
- OFFSHORE DRILLING-SAFETY: Administration dropped requirements for third-party safety equipment inspections from a rule enacted after the Deepwater Horizon oil spill. Industry savings: $92 million-$131 million (2019-2028)
- OFFSHORE DRILLING-BLOWOUTS: Administration wants more flexibility in how companies meet safety and equipment standards in 2016 Interior rule requiring more stringent inspections of devices designed to prevent offshore oil spills. Industry savings: $693 million-$946 million (2018-2027)
- REFINERY SECTOR: At request of oil industry, administration gave companies more flexibility in reporting air pollution releases under 2015 EPA rule restricting toxic air pollution from refineries. Industry savings: $89 million-$110 million (2019-2026)
- MERCURY POLLUTION: Administration wants to eliminate 2016 EPA rule that determined it was “appropriate and necessary” to reduce power plant emissions of mercury. It says EPA should not have considered up to $90 billion in secondary benefits in reaching its decision. Industry savings: uncertain; utilities have spent estimated $18 billion to date on compliance
- VEHICLE FUEL EFFICIENCY: To limit a 2016 Department of Transportation proposal that called for more stringent fuel efficiency standards, the administration seeks to freeze them after 2020.Industry savings: revenues on up to 79 billion gallons of additional fuel sales (for vehicles built through 2029)
Trump rollbacks for fossil fuel industries carry steep cost (AP) — As the Trump administration rolls back environmental and safety rules for the energy sector, government projections show billions of dollars in savings reaped by companies will come at a steep cost: more premature deaths and illnesses from air pollution, a jump in climate-warming emissions and more severe derailments of trains carrying explosive fuels.The Associated Press analyzed 11 major rules targeted for repeal or relaxation under Trump, using the administration’s own estimates to tally how its actions would boost businesses and harm society.The AP identified up to $11.6 billion in potential future savings for companies that extract, burn and transport fossil fuels. Industry windfalls of billions of dollars more could come from a freeze in vehicle efficiency standards that will yield an estimated 79 billion-gallon (300 million-liter) increase in fuel consumption.On the opposite side of the government’s ledger, buried in thousands of pages of analyses, are the “social costs” of rolling back the regulations. Among them:
- — Up to 1,400 additional premature deaths annually due to the pending repeal of a rule to cut coal plant pollution.
- — An increase in greenhouse gas emissions by about 1 billion tons (907 million metric tons) from vehicles produced over the next decade — a figure equivalent to annual emissions of almost 200 million vehicles.
- — Increased risk of water contamination from a drilling technique known as “fracking.”
- — Fewer safety checks to prevent offshore oil spills.
For the Trump administration and its supporters, the rule changes examined by AP mark a much-needed pivot away from heavy regulations that threatened to hold back the Republican president’s goal of increasing U.S. energy production. But the AP’s findings also underscore the administration’s willingness to put company profits ahead of safety considerations and pollution effects.
Members of House Committee Overseeing the Environment Have Millions Invested in Fossil Fuels - The House Committee on Energy and Commerce oversees environmental protection, clean air, climate change, energy policy, and drinking water safety. But many of its members appear heavily conflicted: nearly half are personally invested in companies that produce, distribute, or facilitate the distribution of oil, gas, and coal—fossil fuels that are among the biggest threats to the health of the planet and the future of the human species. A Sludge analysis of financial documents has found that 22 of the 55 members of the 116th Congress’ Energy and Commerce Committee have disclosed investments in fossil fuel companies such as Exxon Mobil, Southern Company, and Chevron worth as much as $15.6 million. The actual total could be even higher since some investments are reported without a maximum value specified. In addition to hastening climate change, some of these companies are among the world’s biggest polluters. Representatives from both major parties are heavily invested in the dirty energy industry. Sludge previously reported that several Democrats on the Energy and Environment subcommittees are invested in fossil fuels, as is Rep. Kathy Castor (D-Fla.), the chair of the new Select Committee on the Climate Crisis. Of the Energy Committee members, Republican Montana Rep. Greg Gianforte, one of the wealthiest members of Congress, has by far the largest stake in fossil fuels—at least $5.6 million in domestic and international companies through his and his wife’s revocable trusts—followed by Texas Republican Bill Flores ($2.7 million) and Democratic Massachusetts Rep. Joe Kennedy (up to $2.2 million). The 22 representatives combined to own potentially over $1 million in each of five companies or funds: Salient MLP Fund, Exxon Mobil, Southern Company, Chevron, and Tortoise Energy Infrastructure Corporation. See below for the total amounts for all companies and funds identified by Sludge. Many ethics experts believe that members of Congress should recuse themselves from working on legislation that could impact their personal investments. In the Senate, Democrats Jeff Merkley (Ore.) and Sherrod Brown (Ohio) proposed a bill that would ban members from buying or selling stocks while in office, although no such proposal has been introduced in the House.
More than half of the U.S. coal mines operating in 2008 have since closed - In the United States, decreasing demand for coal has contributed to lower coal production, which has fallen by more than one-third since peak production in 2008. As U.S. coal demand has declined, the number of active coal mines has decreased by more than half, from 1,435 mines in 2008 to 671 mines in 2017. As the U.S. market contracted, smaller, less efficient mines were the first to close, and most of the mine closures were in the Appalachian region. Although underground mines had a larger percentage of closures from 2008 to 2017 (60% versus 49% of surface mines), surface mines have seen larger declines in production, falling 39% compared with 24% for underground mines. Most coal regions contain a mix of both surface and underground mines, except for the Powder River Basin in southeast Montana and northeast Wyoming, where large surface mines account for more than 40% of total U.S. production. The Appalachian and Illinois Basins east of the Mississippi River have the most mines in the country, with more than 77% of eastern production coming from underground mines. Between 2008 and 2017, 340 fewer underground mines produced coal in this region, compared with 410 fewer surface mines. In contrast, basins in the west—primarily the Powder River Basin—have fewer mines, and production mainly comes from a smaller number of large surface mines.The uptick in mine closures since 2008 has largely been driven by economics, and smaller, less profitable mines have been more susceptible to closures. Several factors dictate the profitability of mines, including the method used to extract the coal.
The Trump administration learns that fighting gravity is hard -The Trump administration is learning that, as new data show that the industries it has worked hardest to prop up — through bailouts, tariffs and other favors — continue their descent.Maybe it’s the perceived machismo of old, male-dominated, blue-collar industries; maybe it’s that their heyday (at least in terms of jobs) was during the postwar boom that happened to coincide with President Trump’s childhood. For whatever reason, the president has been obsessed with the fortunes of coal, steel and other heavy industries. To Trump, any difficulties such sectors face are national tragedies whose reversal demands re-rigging the rest of the economy, regardless of cost.In coal’s case, this has meant a series of proposals intended to bail out a foundering fossil-fuel industry.Trump (incorrectly) blamed the industry’s problems on overregulation, including by the Obama administration. So the president is scrapping the Clean Power Plan, which was intended to reduce carbon emissions at coal-burning plants. His administration has also been rolling back other regulations, including one regarding the disposal of coal ash and another concerning mercury emissions. Then there were the many direct and indirect coal subsidies, including proposals to invoke national security so the administration could require power plants to keep financially non-viable plants running. Just last week, the Energy Department announced $38 million in new federal funding for research into how to keep old coal plants online.A new government report finds that it’s been all for naught.The U.S. Energy Information Administration, the statistical agency within the Energy Department, just released its annual energy outlook. Lo and behold, it forecasts a 21 percent decline in coal production over the next 20 years. Astoundingly, as the Financial Times points out, that’s an even steeper decline than the agency estimated a mere two years ago — which was back when President Barack Obama’s big, bad, coal-killing Clean Power Plan was still expected to go into effect. Got that? This less-regulated industry is somehow expected to do worse than was once projected with all those supposedly industry-killing regulations.
Coal industry fought black lung tax as disease rates rose - While cases of black lung disease among miners were on the rise last year, coal companies and industry groups lobbied lawmakers against extending a tax program that provides a lifeline for sufferers and their families.Mandatory disclosures show the coal lobby spent some of its influence money on discussions with lawmakers regarding the Black Lung Excise Tax and the trust fund that helps pay for the health and living benefits of sick coal workers whose employers have gone bankrupt, and their beneficiaries.Industry efforts appear to have paid off as Congress did not act by Dec. 31 to extend the higher excise tax on coal companies, the primary source of money for the Black Lung Disability Trust Fund, which was established in 1977. Because of Congress’ inaction, the tax rate dropped at the beginning of this year to 50 cents per ton of underground-mined coal from $1.10 per ton last year, putting the fund at risk for insolvency. The 55-cents-per-ton tax on of surface coal also dropped to 25 cents per ton. The Government Accountability Office reported in May 2018 that allowing the tax to drop would add to the troubles of the already financially beleaguered Black Lung Disability Trust Fund, which has struggled from the beginning. Because its expenditures have “consistently” exceeded its revenue, the fund has borrowed almost every year since 1979, the GAO report said.
Santee Cooper has no plans to retire Winyah coal plant despite customer objections — Santee Cooper, South Carolina's state-owned utility, has no plans to retire its 1,260-MW Winyah coal-fired power plant near Georgetown despite calls by its largest customer to do so, Santee Cooper spokeswoman Molly Gore said Wednesday. Central Electric Cooperative, which buys about 60% of Santee Cooper's power for the state's 20 electric co-ops, is urging Santee Cooper to shut Winyah and rely more heavily on natural gas and solar energy. But that will not happen right now, Gore said. Winyah remains a "workhorse" for the utility and is needed for reliability purposes, Gore said. "Plus, it's the plant closest to the majority of our retail load." The plant is also fully environmentally compliant, she added. Winyah's four generating units were commissioned between 1975 and 1981, making it one of the "newer" baseload coal plants in the Southeast.
In 2018, U.S. coal production declined as exports and Appalachian region prices rose – EIA estimates that total 2018 U.S. coal production was 755 million short tons (MMst), 20 MMst less than in 2017 and 36% less than in the previous decade. In 2018, coal prices rose in three of the five major coal-producing regions, particularly the Northern and Central Appalachian regions. Although U.S. coal exports increased by about 10 MMst in 2018, volumes were not great enough to offset the decline in U.S. coal consumption, resulting in declining coal production. Of the five major coal-producing basins, two saw increased production in 2018 compared with 2017. In the Central Appalachian and Illinois Basins, production increased 4% (3 MMst) and 2% (2 MMst), respectively. The Rocky Mountain region experienced the largest decline as a share of production, 12% (6 MMst) lower than in 2017. The Powder River and Northern Appalachian Basins also declined by 3% and 2%, respectively. EIA estimates that total coal consumption in the United States was 692 MMst in 2018, falling to the lowest level in 39 years. More than 90% of domestic coal consumption is in the power sector, and nearly 15 gigawatts of coal-fired generation capacity were retired in 2018, contributing to the decline in coal consumption. Although natural gas prices continued to rise in 2018, EIA estimates that the coal share of total power generation declined, reaching a new low of 28%, lower than the natural gas share (35%) for the third consecutive year. Increasing coal prices and demand for coal exports, along with continued competition with natural gas, also contributed to a decline in overall coal consumption.Coal exports rose for the second consecutive year in 2018, reaching 116 MMst, or 15% of total U.S. coal production. International demand for U.S. coal was driven by Asian and European countries. The largest importers of U.S. coal in Asia were India, Japan, and South Korea. In Europe, the Netherlands was the largest destination with Turkey, Morocco, Croatia, and the United Kingdom showing growth during 2017. The average price of U.S. steam coal used in electricity generation increased in 2018 in most regions. The price of Northern and Central Appalachian coal, driven by strong international demand for both metallurgical and steam coal, increased by 41% and 39% in 2018, respectively. Illinois Basin coal prices also rose, climbing 19%, while Power River Basin and Rocky Mountain prices fell by 2% and 3%, respectively.
China’s Methane Emissions Rise Despite Tougher Laws, Satellite Data Shows - Methane emissions from coal mining in China have risen despite stricter government regulations that aimed to curb the greenhouse gas, satellite data shows.The data, which is published in Nature Communications, finds China's methane emissions rose by 1.1m tonnes a year between 2010 and 2015. This could account for up to a quarter of the rise in methane emissions seen globally over that period, the study finds.China is the world's largest emitter of methane—a greenhouse gas that is 34 times more potent than CO2 over a 100-year period.The findings show how satellites can be used to pinpoint greenhouse gas emissions "from misbehaving industries that nobody may have suspected," the lead author told Carbon Brief. Methane is the second largest contributor to human-caused global warming after CO2.Globally, the largest driver of human-caused methane emissions is agriculture—particularly livestock and rice production. The second main driver is fossil fuel production, which allows underground methane to "escape" into the atmosphere during the drilling, extraction and transportation process. (Methane is also released by several "natural processes" in wetlands, thawing permafrost and freshwater lakes.)China is the world's largest producer and consumer of coal. When coal is mined, methane can escape from the "coal seam"—the name given to a layer of coal in the earth that is thick enough to be exploited, said study lead author Prof. Scot Miller, a researcher of greenhouse gases and air pollution from John Hopkins University in Baltimore. He told Carbon Brief: "Coal forms underground over long geological time scales and methane is often produced in the coal seams during this process. The methane remains trapped in the coal seam, but it can be released into the atmosphere if the coal seam is mined."
India's 2018 thermal coal imports grew at fastest pace in four years: sources (Reuters) - India’s 2018 thermal coal imports rose at the fastest pace in four years, according to two industry sources, despite moves by Prime Minister Narendra Modi’s government to cut imports in a bid to reduce its trade deficit. Coal is among the top five commodities imported by India, one of the world’s largest consumers of coal, and the rise in imports of the fuel after two consecutive years of decline adds to its trade deficit. That trade gap has been hurting the valuation of the rupee, the worst performing major Asian currency in 2018. Thermal coal imports jumped 19 percent to 171.85 million tonnes in 2018, marking the fastest pace of growth since 2014, according to data from American Fuels & Natural Resources, a Dubai-based trader of U.S.-origin coal. Energy consultancy Wood Mackenzie also said imports grew at their fastest pace since 2014, to 164 million tonnes in 2018. Imports of coking coal - which is mainly used in the manufacturing of steel - rose at the quickest rate since 2015, according to Wood Mackenzie and American Fuels. India imported 52.26 million tonnes of coking coal in 2018, up 14 percent from 45.93 million tonnes in 2017, American Fuels’ data showed. The latest government data for April-November coal imports largely matches with data from American Fuels. Thermal coal imports were 118.89 million tonnes in the period, according to government data, compared with American Fuels figure of 118.69 million tonnes. Coking coal imports in the same period were 34.36 million tonnes, according to government data for April-November. American Fuels estimated those imports were 34.40 million tonnes. The value of all coal imports for the year ended December 31, 2018 was 28.7 percent higher at 1.72 trillion Indian rupees ($24.25 billion) than it was a year earlier, according to government data from the coal and trade ministries reviewed by Reuters.
Citizens appeal EPA permit for coal strip mining in Perry County forest - Friends of Perry State Forest has filed an appeal with the Environmental Review Appeals Commission over a recently-issued Clean Water Act permit for coal strip mining in Perry State Forest. The citizen group along with the Ohio Environmental Council are challenging the Ohio Environmental Protection Agency, which in December authorized a surface water permit for Oxford Coal of Coshocton to discharge from its wastewater treatment area in Perry County into tributaries leading to Rush Creek and Buckeye Fork. "If it proceeds, this strip mine will disrupt the lives of nearby residents for years," Nathan Johnson, attorney for the Ohio Environmental Council, said in a press release. "This is a publicly owned forest; Oxford is asking neighbors, visitors, and the public at large to forgo recreational opportunities throughout the life of the mine." In the appeal, the organizations accuse Craig Butler, director of the Ohio Environmental Protection Agency, of violating policy, including issuing the permit without approving a pollution abatement plan for Oxford Mining Company and not considering the company's history. "The Director of Ohio EPA unlawfully and unreasonably failed to consider the Applicant's lengthy history of failed mitigation ... (and) future financial ability when determining that remining will result in a significant improvement to water quality that would not otherwise occur," the court documents read. According to violation notices from the Ohio Department of Natural Resources, first obtained by the Friends of Perry State Forest through an Open Records Request and shared with the Times Recorder, Oxford Mining has incurred multiple violations for acid water discharge, exceeding blasting velocity, failing to notify individuals of blasting schedules and proceeding with operations prior to completing control systems. Many of the more than 60 violations occurred between 2001 and 2012, with the most recent violation, mining without first completing a proper sediment control system, occurring in January 2018 at a mine near McLuney Creek in Perry County. The future of the Oxford Mining Company, a local subsidiary of Westmoreland Coal Company, is also uncertain as its parent company filed for Chapter 11 bankruptcy in October while it undergoes a restructuring agreement with creditors and lenders.
Ohio moves into top five for recoverable shale natural gas reserves - Ohio has moved into the top five for recoverable shale natural gas reserves in the United States.Data released by the U.S. Energy Information Administration shows the state saw a 24.5 percent increase in proved shale gas reserves from 2016 to 2017, bringing it to 25.6 trillion cubic feet. That moves Ohio past Oklahoma and behind only Pennsylvania, Texas, West Virginia and Louisiana.Proved reserves is a measure of oil and natural gas that can be recovered in the future. JobsOhio and economic development groups have said that a robust shale industry will create jobs in Appalachia and reduce energy costs, making it cheaper for other businesses to invest here.Before development of the Utica Shale, Ohio’s peak year for natural gas production was in 1984 at 186 billion cubic feet. In 2017, it was 1.7 trillion cubic feet, said Dan Alfaro, spokesman for Energy in Depth, an advocacy group launched by the Independent Petroleum Association of America.What the EIA data tell us is Ohio’s status as a premiere gas-producing state is secured," Alfaro said. "Most importantly, the trends for the natural gas market bode well for continued economic growth and investment in the region."Proved reserves of both U.S. crude oil and natural gas broke records from the year before – crude jumped 19.5 percent to 39.2 billion barrels and surpassed the previous peak level of 39 billion barrels set in 1970. Proved reserves of natural gas were up 36.1 percent to reach 464.3 trillion cubic feet in 2017, surpassing the 388.8 trillion cubic feet record set in 2014.
Rig Count Slips to 14 in Ohio's Utica – The number of rigs operating across Ohio’s Utica shale dropped to 14 during the week ended Jan. 26, according to the latest data from the Ohio Department of Natural Resources. The rig count during the previous week stood at 16, according to ODNR. Last week, the agency issued 10 permits for horizontal wells across the Utica, all of them to Ascent Resources Utica LLC of Oklahoma City. Ascent secured eight permits for Guernsey County and two permits for new wells in Jefferson County. As of Jan. 26, ODNR has issued 2,992 horizontal well permits in the Utica. Agency data show that 2,517 of these wells are drilled and 2,138 wells are in production across the state. The majority of these wells are in the southern portion of the play, where geological pressure is more pronounced and the wells generally more productive. There have been no new permits issued in the northern tier of the Utica play – that is, Columbiana, Mahoning and Trumbull counties – since July. The last permit awarded in the northern region was on July 24, when Hilcorp Energy Co. secured two permits to drill horizontal wells in Fairfield Township in Columbiana County. Nor were there any new permits issued in nearby Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.
Settlement with Patriot Water might be end of gas and oil wastewater treatment in city - Youngstown Vindicator - Though a lawsuit filed by an environmental group against the company Patriot Water is still pending, the recent settlement by Warren would suggest Patriot’s experiment in treating wastewater from the gas and oil industry and have it end up in the Mahoning River might be over. An attorney for Freshwater Accountability Project of Grand Rapids, Ohio, and Warren Law Director Greg Hicks say Warren resolved its part of the case by agreeing to pay $116,616 of Freshwater’s legal fees and no longer allowing Patriot to discharge “drilling mud,” which is wastewater from the gas and oil industry, into the city sewer system, as it did starting in 2011. Patriot stopped discharging wastewater into Warren sewers June 16, 2017, after the Freshwater suit was filed June 27, 2017, and has not resumed.The plant is still open, however, its president, Andrew Blocksom, said earlier this month. Blocksom said he could not comment on the matter because legal action with Freshwater Accountability is still pending.Hicks said he does not believe Patriot will ever be able to resume discharging gas and oil wastewater into Warren’s treatment facility.Atty. Megan Hunter of Akron, who represents Freshwater, said the settlement with Warren bars the city from accepting total dissolved solids, total suspended solids and barium from Patriot above a certain limit. That effectively stops the city’s wastewater treatment plant from receiving drilling muds, which were causing significant problems for the treatment plant.
Enbridge restores some natgas flows on damaged TETCO pipe in Ohio (Reuters) - Enbridge Inc restored southbound natural gas flows over the weekend through parts of its Texas Eastern (TETCO) pipeline in Ohio that were damaged in an explosion last week. The blast last Monday forced drillers using the pipe to reduce output in the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia, the nation's biggest gas producing region, during the week before a polar vortex is expected to freeze the eastern half of the United States. Total output in the Marcellus and Utica returned to 30 billion cubic feet per day (bcfd), the same as before the pipe blast, which cut production there by around 1 bcfd last week, according to financial data provider Refinitiv. TETCO told customers in a notice late Sunday that it increased capacity on a couple of lines around the blast site, but could not say when it would restore full service through the area. Those flows will help deliver much-needed fuel to utilities in the U.S. Midwest as temperatures plunge later this week, boosting gas demand to a forecast daily record high, according to Refinitiv data. Before the Jan. 21 blast, which injured two people and damaged three homes near Summerfield in Noble County in southeastern Ohio, about 1.2 bcfd of gas was flowing south on TETCO from Ohio toward the Gulf of Mexico, according to Refinitiv. After the explosion, however, TETCO started moving up to 0.3 bcfd of gas north into Kentucky and Ohio. But with southbound service restored through parts of the Ohio blast site, about 0.3 bcfd was expected to flow south on the pipeline on Monday. Enbridge said the damaged section of 30-inch (76.2-cm) pipe was built in 1952-53. The 9,029-mile (14,531-km) TETCO pipeline was designed to carry gas from the U.S. Gulf Coast and Texas to high-demand markets in the mid-Atlantic and Northeast, according to the company's website. TETCO became bidirectional over the past five years, enabling it to also carry gas from the Marcellus and Utica shale, where production is growing rapidly, to markets in the U.S. Midwest and Gulf Coast.
Air Pollution Permit Appeal Filed Against PTT Global Cracker Chemical Plant in Belmont County OH — A national environmental group and three partner organizations are challenging the state’s decision to issue an air permit-to-install for a proposed petrochemical complex in Belmont County. The Sierra Club and its partners filed an appeal Friday with the Environmental Review Appeals Commission seeking to have the permit issued on Dec. 21 vacated. If it is not overturned, the permit will allow Thailand-based PTT Global Chemical and its partner, Daelim Industrial Co. LLC of South Korea, to build an ethane cracker plant that is projected to process 1.5 million tons of ethane from the local natural gas stream annually. Cracker plants use ethane to create ethylene, a component of plastics and chemicals such as antifreeze, solvents and cleaners, as well as many consumer products including textiles, adhesives and paints. Ethane is an abundant part of the natural gas stream found in the Utica and Marcellus shales that underlie much of Eastern Ohio and parts of West Virginia and Pennsylvania.Proponents of the facility say it would bring thousands of construction jobs and hundreds of permanent positions to the Ohio Valley and would attract additional related industry to the region.PTT and Daelim have invested millions of dollars in design work and planning, and to buy property at the proposed site at Dilles Bottom. However, they still have not committed to building the project, which could cost as much as $10 billion. Opponents — such as the Sierra Club and its appeal partners the Center for Biological Diversity, Earthworks and the Freshwater Accountability Project along with some local residents – believe the plant would cause air and water pollution that would endanger the surrounding environment, public health and the overall climate. They say it would emit harmful amounts of particulate matter and dangerous chemicals, including benzene, nitrogen oxides, volatile organic compounds, carbon dioxide and other greenhouse gases.
A Field Guide to the Petrochemical and Plastics Industry – DeSmog - The shale gas industry has been trying to build demand for fossil fuels from its fracked oil and gas wells by promoting the construction of a new petrochemical corridor in America's Rust Belt and expanding the corridor on the Gulf Coast. To help demystify terms like “natural gas liquids” and “cracker plants,” DeSmog has begun building a guide to some of the equipment and terms used in the plastics and petrochemical industries.This guide, which will expand over time, is intended to serve as an informal glossary of sorts and an introduction to what happens to fossil fuels that are transformed into chemicals, plastics, vinyl, Styrofoam and a variety of other materials. This field guide is part of Fracking for Plastics, a DeSmog investigation into the proposed petrochemical build-out in the Rust Belt and the major players involved, along with the environmental, health, and socio-economic implications.These fossil fuels have a significant global warming impact of their own. The methane leaks associated with the natural gas drilling and distribution industry are so pronounced that many experts say burning natural gas for electricity is worse for the climate than burning coal.While hydrocarbons that are used as raw materials for petrochemical products aren’t burned (and therefore don’t release carbon dioxide into the atmosphere), that leaky infrastructure still results in methane pollution. Methane itself is a powerful greenhouse gas, capable of warming the climate 86 times as much as an equal amount of carbon dioxide over the first two decades after it’s released to the atmosphere.Making petrochemicals also requires a huge amount of energy — some of the largest petrochemical plants like crackers may have their own power plants on site — and that energy comes from burning fossil fuels. Executives from major oil and gas companies, wary of the impacts that carbon dioxide pollution controls might have on their long-term prospects, have told investors that they see petrochemicals as the place where demand for fossil fuels will continue to grow, even if the world takes serious action on climate change.
Penn State professors present collaborative documentary project, book on fracking - The Daily Collegian Online -In 2018, Penn State professors Julia Spicher Kasdorf and Steven Rubin released their book and project titled, “Shale Play: Poems and Photographs from the Fracking Fields.”Kasdorf, a professor of English and women’s studies at Penn State, and Rubin, a documentary photographer and associate professor of art, combined Rubin’s documentary photography and Kasdorf’s poetry to release their investigative book.Rubin’s photographs have been published in The New York Times Magazine, National Geographic, Time, Newsweek, The Village Voice and more. He has traveled through many areas of the world working as a freelance journalist.Kasdorf has published four books of poetry: “Sleeping Preacher,” “Eve’s Striptease,” “Poetry in America” and now “Shale Play.” She also has a few poetry awards, such as Agnes Lynch Starrett Poetry Prize and a Pushcart Prize.The book covers the impact of fracking along the Marcela Shale, an area that has a high concentration of oil and gas in the rock and extends through mainly New York, Ohio, West Virginia and Pennsylvania. Rubin said this is where the term “Shale Play,” stems from — the industry’s term on the extraction in the Marcella Shale. The duo focused solely on the impact in Pennsylvania after seeing the effects of extraction with their own eyes.
Impact fee collected from gas drillers expected to reach new record in Pa. -- The fee Pennsylvania collects from natural gas drillers is expected to reach a record $247 million this year, according to figures released Thursday by the state’s Independent Fiscal Office.Each year, Pennsylvania drillers are required to pay what’s known as an “impact fee” for every well they drill. The cost hinges on the type of well and number of years it’s been in operation. The funds get distributed to state agencies and local governments, with those in heavily drilled regions receiving the most money.The IFO cites two reasons for the projected uptick in revenue, which is expected to come in $37 milion above the previous year. For one, the 779 new wells drilled in 2018 will offset a drop in revenue from older wells, because the fee declines as wells age.Furthermore, some low-producing “stripper” wells have historically not paid the fee. But a recent state Supreme Court decision means potentially hundreds more will now have to comply.Pennsylvania has an impact fee in lieu of a severance tax, which is common in other energy-rich states. Such a tax would collect revenue based on the amount of natural gas a well produces.Pennsylvania lawmakers have debated enacting a severance tax for a decade. It’s supported by Gov. Tom Wolf, a Democrat, and a tax could result in higher revenue for the state.But the natural gas industry and Republican leaders h ave pushed against a severance tax, saying it could harm investment and job growth.
Pennsylvania governor seeks natural gas tax to raise $4.5 billion (Reuters) - Pennsylvania Governor Tom Wolf on Thursday proposed a tax on extracting natural gas to pay for his plan to spend $4.5 billion over the next four years to improve the state’s infrastructure. The state legislature, however, has refused to approve the tax over the past couple of years. Wolf said Pennsylvania is the only state in the country without a severance tax on extracting natural gas. Pennsylvania is the second biggest gas-producing state behind Texas. The state produces about 18 billion cubic feet per day (bcfd) from the Marcellus and Utica shale basins, which is a little over 20 percent of nation’s total gas production. One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day. “With every passing year our state is losing out on the opportunity to reinvest the benefits of these resources to stimulate out economy and move Pennsylvania forward,” Wolf said. The state’s gas industry, however, said the tax is not necessary since the state already has a per well impact fee. The proposed tax would increase if the price of gas rises and would start March 1, 2020.
PUC sets investigation into shut-down Mariner East 1 pipeline - The Pennsylvania Public Utility Commission’s Independent Bureau of Investigation and Enforcement , which includes the PUC’s Pipeline Safety Division, has launched an investigation including detailed geological surveys at the site of a sinkhole that developed last Sunday along the Mariner East right-of-way on Lisa Drive in West Whiteland. The working Mariner East 1 pipeline was shut down statewide by the PUC within six hours and 44 miles of the pipe was purged. The investigation will “help engineers and geophysical consultants “get a better picture of what’s going on underground,” Nils Hagan-Frederiksen, PUC press secretary, said. “We’re actively monitoring what’s going on. “We’ll use the data to discuss the next steps.” Hagan-Frederiksen said the ME1 pipeline will remain shut down until I & E “says something different.” Geophysical surveys around the Lisa Drive site are scheduled to begin Saturday, and will be closely monitored by pipeline safety engineers from the PUC and geophysical consultants. The testing, which will be used to evaluate underground conditions, is expected to take several days to complete. I&E pipeline safety engineers and geophysical consultants will be on-site monitoring the collection of geophysical data. Results of the testing will be shared with I&E’s engineers and I&E’s geophysical consultants for independent analysis and review. Additionally, PUC engineers and geophysical consultants have been working with municipal officials and Sunoco to monitor and track storm water flow around the incident site, including investigation of storm drains in the area. Analysis of testing results and information from the ongoing safety engineering investigation will be used by I&E as a basis for data-driven discussions about next steps at the Lisa Drive site, along with any other work that I&E believes is necessary. Sunoco is not permitted to resume the transportation of product through ME1 until approval is received from I&E.
Sink Holes Along Mariner East Pipeline are a Risk Now Taken More Seriously - The Pennsylvania Public Utility Commission’s Independent Bureau of Investigation and Enforcement , which includes the PUC’s Pipeline Safety Division, has launched an investigation including detailed geological surveys at the site of a sinkhole that developed last Sunday along the Mariner East right-of-way on Lisa Drive in West Whiteland. The working Mariner East 1 pipeline was shut down statewide by the PUC within six hours and 44 miles of the pipe was purged. The investigation will “help engineers and geophysical consultants “get a better picture of what’s going on underground,” Nils Hagan-Frederiksen, PUC press secretary, said. “We’re actively monitoring what’s going on.” “We’ll use the data to discuss the next steps.” Hagan-Frederiksen said the ME1 pipeline will remain shut down until I & E “says something different.” Lisa Dillinger, Sunoco spokeswoman, responded on Friday. “We will continue to work alongside the Pennsylvania Public Utility Commission’s Bureau of Investigation and Enforcement and its consultants to conduct geophysical testing to determine if additional work is necessary,” Dillinger wrote in an email. “This will include re-inspecting the section of the line at Lisa Drive. The Commission and its consultants remain on site with us every day and will continue to do so throughout this process.” Geophysical surveys around the Lisa Drive site are scheduled to begin Saturday, and will be closely monitored by pipeline safety engineers from the PUC and geophysical consultants. The testing, which will be used to evaluate underground conditions, is expected to take several days to complete. I&E pipeline safety engineers and geophysical consultants will be on-site monitoring the collection of geophysical data. Results of the testing will be shared with I&E’s engineers and I&E’s geophysical consultants for independent analysis and review. Additionally, PUC engineers and geophysical consultants have been working with municipal officials and Sunoco to monitor and track storm water flow around the incident site, including investigation of storm drains in the area.
Lawmaker calls on officials to investigate pipeline players - The state legislator whose district includes areas that have been beset by problems involving a controversial natural gas pipeline has asked two Harrisburg officials to open separate investigations into the pipeline.State Rep. Kristine Howard, D-167th Dist., in a press release called on state Attorney General Josh Shapiro and state Auditor General Eugene DePasquale to open the inquiries into the Mariner East 1 and Mariner East 2 pipelines, which bring natural gas from the interior of Pennsylvania through Chester and Berks counties to ports in Chester, Delaware County.The East 1 pipeline has been operational for decades, while the East 2 pipeline is under construction.Howard, a Democrat who was elected in November, ousting state Rep. Duane Milne, said she wants Shapiro's office to investigate the pipeline's owners for possible criminal charges, and for DePasquale to audit the Public Utilities Commission and the Department of Environmental Protections.Her release did not specify what crimes may have been committed by the pipelines owners or operators, or what financial irregularities the PUC or DEP may have committed in their oversight of the pipelines.The Chester County District Attorney's Office is currently investigating the pipeline question with a grand jury.Howard said her actions were spurred by the opening of a large sinkhole in a residential area of West Whiteland on Jan. 20, which exposed the Mariner East 1 pipeline. This is the latest in a series of pipeline-related incidents in the high-density area, including numerous other sinkholes and complaints of tainted well water. The area’s limestone geology is a large factor in the appearance of sinkholes, and many critics have noted the unsuitability of the area for pipeline development.
PA: State conducting criminal investigation of shale gas production -- State Attorney General Josh Shapiro is pursuing criminal investigations of “environmental crimes” committed by the oil and gas industry in Washington County and possibly throughout the state. In an Aug. 16, 2018, letter to attorneys in a civil case before the Washington County Court of Common Pleas, Mr. Shapiro and his office said they already had accepted a referral and “assumed jurisdiction over several criminal investigations involving environmental crimes in Washington County.” By that time Washington County District Attorney Eugene Vittone already had discussed with and referred claims of environmental problems in shale gas development to the attorney general’s office. Three Washington County residents told the Post-Gazette that they have spoken with AG investigators and were told they could be called to testify, with a Washington County woman saying that she already presented testimony before an investigative state grand jury in Pittsburgh. Joe Grace, spokesman for Mr. Shapiro and the state Office of Attorney General, said, “We cannot confirm or deny the existence of an investigation.” The AG’s letter was introduced as an exhibit during an August court hearing on the civil case brought by Stacey Haney in 2012 against Range Resources Appalachia LLC, and specially referenced as the “Stacey Haney/Range Resources Investigation.” “It has come to our attention that one of the potential criminal investigations involves your respective clients,” said the two-paragraph letter signed by Courtney Butterfield, deputy attorney general and obtained recently by the Pittsburgh Post-Gazette from someone not involved in the case. The letter noted that a significant record of documents, statements, depositions, scientific tests and physical evidence had been compiled for the civil case. It requested that attorneys preserve that record, under penalty of law if they failed to do so.
Trump Looks To Neutralize Pipeline Opponents --The White House is preparing measures that will reduce states’ powers over the approval or ban of new energy projects, notably oil and gas pipelines, Bloomberg reported last week, citing three unnamed sources in the know. The implications of such measures would be bad news for a state such as New York, which has already put the brakes on a natural gas pipeline, but they could be good news for consumers. Last week, FreightWaves.com reported that residents of the Northeastern states are being increasingly burdened by high electricity bills coupled with unreliable supplies, the root cause of which is the lack of enough natural gas pipeline capacity to bring in the fuel needed for power plants. The report followed an announcement by a regional utility, Con Edison, that it will stop taking on new customers in Westchester County on the grounds that “new demand for gas is reaching the limits of the current supplies to our service area.” In other words, the utility cannot supply electricity to all who need it because it cannot produce enough electricity to satisfy demand and the reason it cannot produce it is lack of sufficient gas supply. What’s more, New York is not the only state struggling with growing electricity demand and insufficient supply because of pipeline opposition on the political level, according to the FreightWaves.com report. All New England states are in the same position and even worse, author Henry Carmichael reports, citing a scientist from the Institute for Energy Research. The situation is reminiscent of that in northern China last year, when the authorities were in a rush to switch from coal to gas in power plants but were not quick enough to construct the necessary distribution network, so several million households ended up without heating in the midst of winter. Meanwhile, New York’s governor, a staunch opponent of new fossil fuel infrastructure, announced a so-called Green New Deal with the goal to have 100 percent of the electricity used in the state to be sourced from renewable alternatives to oil and gas by 2040. According to media reports on the news, this is the most aggressive renewables goal in the United States. It also means New York will need to reach a portion of 70 percent renewable power by 2030. It was probably part of this cleaner energy drive that led New York State to block a natural gas pipeline project that was approved by the Federal Energy Regulatory Commission and that would have increased the flow of gas into New England. Now, if the White House’s plans come to fruition, the pipeline project could be back on the table with nothing Governor Cuomo could do about it except perhaps challenge it in court.
Environmental groups attack federal approval of Mountain Valley Pipeline - — The good of the Mountain Valley Pipeline — a steady supply of needed natural gas — met the bad Monday, when opponents told a federal appeals court there’s really no public need for a project that is already polluting Southwest Virginia.In a sweeping attack, a coalition of environmental groups asked the U.S. Circuit Court of Appeals for the District of Columbia to reverse a federal agency’s approval of the 303-mile pipeline.When the Federal Energy Regulatory Commission green-lighted the pipeline in October 2017, it voted 2-1 that its public benefits will outweigh any adverse impacts.But in finding there was a market demand for the natural gas, FERC relied entirely on contracts between the pipeline’s owners and its shippers, which are all part of the same corporate structure.The complex affiliations of Mountain Valley Pipeline LLC were not the result of “arms-length negotiations” that would have demonstrated a true market based on public need, the court was told by Ben Luckett of Appalachian Mountain Advocates, a nonprofit law firm that represented pipeline opponents during Monday’s oral arguments.Attorneys for FERC and Mountain Valley countered that the partners would never have invested in the $4.6 billion venture unless they were convinced it was worth the risk — an argument that seemed to resonate with the three-judge panel hearing the case.“They’re putting skin in the game, which tends to show they are using their best judgment about future demand,” Judge Gregory Katsas said in one of several questions put to Luckett.And the pipeline’s capacity is fully subscribed to the Mountain Valley shippers, is it not? asked Judge David Tatel. Yes, Luckett responded, but 80 percent of the end users — the homeowners, businesses or power plants that will actually burn the gas — have yet to be identified and are based solely on speculation.
New proof: entire Mountain Valley Pipeline project based on known falsehoods - Before approving the Mountain Valley Pipeline (MVP), the Federal Energy Regulatory Commission (FERC) had to show that it would do no substantial environmental harm, supposedly demonstrated in the Final Environmental Impact Statement (FEIS) they issued on June 23, 2017 (Accession No. 20170623-4000). In granting the FEIS, the FERC relied on MVP’s stream scour and erosion analyses and plan containing specific information about pipeline construction at stream crossings along the entire pipeline route.Yet within months of starting the project, MVP submitted a variance request asking permission to change its plan. In doing so, MVP admitted to the FERC that: “The [MVP plan] was a theoretical desktop analysis and did not take site specific constructability issues (elevations, terrain, and workspace) into account. During its subsequent field reviews, [MVP] determined thatexecution of the mitigation measures, as written, would pose increased environmental or landslide risks or be unsafe or impractical due to terrain or geology.”In response, FERC’s own expert consultant stated that MVP should be required to “provide a site-specific scenario… for each location [where MVP proposed to change its original plan].”So it is clear that the FERC-approved FEIS does not protect the environment. Despite MVP’s confession, Paul Friedman (FERC Project Manager) or someone at a higher level overruled the FERC’s own expert consultant by
- Rejecting the expert’s directive that MVP do a site-specific analysis of every water body crossing on the route where MVP proposed to change its original plan.
- Allowing MVP to produce revised plans with lower environmental standards (June 2018).
- Failing to provide state environmental agencies or the public an opportunity to comment on revised plans.
- Approving, without opportunity for public comment, a project-wide variance (MVP-006) on September 26, 2018 that allows MVP to violate Best Management Practices without oversight.
- Producing this hasty variance approval at EXACTLY the same time that MVPannounced a lengthy delay and major cost increase. MVP and its investors – not clean water, landowner rights and protection of public lands – seemed to be the core FERC audience for this action.
- Hiding the relevant correspondence from the public, the courts and both federal and state regulators.
- Trying to hide the name of the FERC Project Manager in documents that ICWA acquired through a Freedom of Information Act Request (FOIA).
U.S. court stays ruling against Dominion Atlantic Coast natgas pipe (Reuters) - A U.S. appeals court has stayed a previous court decision against Forest Service permits that allowed Dominion Energy Inc to build the $6.5-$7 billion Atlantic Coast natural gas pipeline across national forests and the Appalachian Trail. The Fourth Circuit Court of Appeals on Tuesday froze the previous decision by a three-judge panel until the full court decides whether it will rehear the case en banc. The appeals court panel had said in December that the U.S. Forest Service had “abdicated its responsibility to preserve national forest resources” when it issued the permits. Dominion argued that the ruling by the three-judge panel to vacate the Forest Service permits went beyond the court’s authority and created an “impregnable barrier (from Georgia to Maine) dividing energy sources west of the (Appalachian) Trail from consumers east of the Trail.” Dominion spokesman Karl Neddenien said on Wednesday the company remained confident it would complete the 600-mile (966-kilometer) pipeline from West Virginia to North Carolina, even though the timing is “somewhat fluid” due in part to federal lawsuits. In the past, Dominion said it expected to finish the project in mid-2020, but the company has suspended all construction since early December after the Fourth Circuit stayed a federal permit in another lawsuit. That other lawsuit involved the U.S. Fish and Wildlife Service’s Incidental Take Statement, which authorized the pipeline to build in areas inhabited by threatened or endangered species. Given the composition of the Fourth Circuit, analysts at Height Capital Markets in Washington, D.C. said “a rehearing en banc could plausibly bode well for Atlantic Coast.” Height Capital Markets said the panel was comprised of three judges nominated by Democrats, while 7 of the 12 remaining active circuit judges were appointed by Republicans. “While the appointing president’s party doesn’t necessarily define a judge’s legal perspective, we continue to see political affiliation play an outsized role in debates involving environmental rules,”
Report: The Vanishing Need for the Atlantic Coast Pipeline - Diminishing consumer demand coupled with more affordable renewables are casting doubt on the overall feasibility and potential profitability of the Atlantic Coast Pipeline, according to a report released today by the Institute for Energy Economics and Financial Analysis (IEEFA) and Oil Change International. The report, The Vanishing Need for the Atlantic Coast Pipeline, raises new questions about the future viability of the pipeline, a multi-billion-dollar project to deliver natural gas from northern West Virginia to Virginia and North Carolina“The demand outlook for gas has changed dramatically since the project’s inception and much of the original justification for the pipeline has evaporated,” said Cathy Kunkel, IEEFA energy analyst and co-author of the report.The pipeline is a joint venture of three companies — Dominion (48%), Duke Energy (47%), and Southern Company (5%) — that was approved by the Federal Energy Regulatory Commission in October 2017. Originally projected to cost $5.1 billion,have raised projections by about 30% to $6.5 to $7 billion, excluding financing costs.[2] But cost overruns are only the beginning of the challenges faced by the project. Key findings of the report include:
- In its most recent long-term integrated resource plan (IRP), four out of five of Dominion’s modeled scenarios show no increase in natural gas consumption from 2019 through 2033.
- Dominion’s 2018 IRP was rejected by Virginia state regulators, in part for overstating projections of future electricity demand. This implies that future natural gas consumption will likely be even less than forecasted in its IRP.
- The most recent IRPs of Duke Energy Progress and Duke Energy Carolinas show that previously planned natural gas plants have been delayed further into the future.
- Over the next decade, it is likely that the demand for natural gas in Virginia and North Carolina erode further as renewable energy and storage technologies continue to rapidly decline in price.
Dominion delays U.S. Atlantic Coast natgas pipe, boosts costs (Reuters) - Dominion Energy Inc said on Friday the estimated cost of its Atlantic Coast natural gas pipeline from West Virginia to North Carolina has risen to $7.0 billion-$7.5 billion, adding that it has delayed the expected completion date to early 2021. The company said previously the project would cost an estimated $6.5 billion-$7.0 billion, excluding financing, and be completed in mid 2020 due to delays caused by numerous environmental lawsuits. “We remain highly confident in the successful and timely resolution of all outstanding permit issues as well as the ultimate completion of the entire project,” Dominion Chief Executive Thomas Farrell said in the company’s fourth-quarter earnings release. He noted the company was “actively pursuing multiple paths to resolve all outstanding permit issues including judicial, legislative and administrative avenues.” Earlier this week, the U.S. Fourth Circuit Court of Appeals stayed a previous court decision against U.S. Forest Service permits that allowed Dominion to build the Atlantic Coast pipeline across national forests and the Appalachian Trail. Dominion said it expects construction could recommence on the full 600-mile (966-kilometer) pipeline route during the third quarter of 2019, with partial in-service in late 2020.
VA: Bill limiting pipeline costs to ratepayers advancing (AP) — A little-noticed piece of legislation advancing through the Virginia General Assembly could pose a serious threat to Dominion Energy’s planned Atlantic Coast Pipeline.The bill would add new restrictions on Dominion’s ability to pass along costs of transporting gas from the ACP to its Virginia-based power stations. That could reduce the potential revenues of a project whose costs have already ballooned in the face of fierce opposition from environmentalists and land owners.A House committee that almost always sides with Dominion endorsed the bill by an 8-2 vote last week. The measure is backed by an unusual coalition of tea party conservatives and green groups, as well as Democratic Attorney General Mark Herring and his conservative predecessor Ken Cuccinelli.The bill’s sponsor, Republican Del. Lee Ware, said his goal isn’t to block construction of the pipeline but to “ensure customers are only paying for capacity that the utilities actually need.”The legislation would require Dominion to show an identified need for increased natural gas capacity and that the ACP was the lowest-cost option before the State Corporation Commission could approve passing along pipeline-related costs.Dominion said the legislation is unnecessary because regulators already have the ability to make sure any fuel costs from the pipeline are reasonable and prudent. “The SCC already has a strong process in place to protect consumers,” said Dominion spokesman Karl Neddenien. Dominion and other developers announced in 2014 plans to build the 600 miles (965 kilometers) pipeline to carry natural gas from West Virginia into Virginia and North Carolina. Most of the capacity for the pipeline is set to go to power plants owned by the companies building the pipeline. The projected costs have gone up $2 billion since the project was announced to as high as $7 billion. That’s in part of because of a series of legal setbacks. Critics of the pipeline have long questioned the project’s need, saying there’s already enough pipeline capacity in Virginia to supply Dominion’s natural gas power plants. One expert has calculated the ACP’s costs to Virginia ratepayers at $1.6 billion to $2.3 billion over 20 years.
Climate impacts are 'virtually unknowable' — FERC - Federal energy regulators last week defended a controversial policy shift on the government's climate analysis obligation in natural gas pipeline reviews.The National Environmental Policy Act (NEPA) does not require the Federal Energy Regulatory Commission to study upstream and downstream greenhouse gas emissions associated with the natural gas projects the agency authorizes, government lawyers wrote in a Friday filing with the U.S. Court of Appeals for the District of Columbia Circuit.Because gas infrastructure demand follows gas production, "it is unknown — and virtually unknowable — whether the gas to be transported on the Project will come from new or existing production," federal counsel wrote in the brief."Absent that basic information, it is nearly impossible to assess whether there will be any additional production activities in connection with the gas to be transported on the Project," FERC attorneys argued. "As a result, any greenhouse gas emissions from any additional, incremental production activities are not reasonably foreseeable."FERC's brief is a response to a lawsuit filed by the nonprofit group Otsego 2000 contesting the agency's decision last year to scale back its consideration of climate impacts in natural gas project approvals (E&E News PM, May 18, 2018).Six states and the District of Columbia last month called on the D.C. Circuit to scrap the policy shift, which was announced in a procedural document denying a request to rehear FERC's authorization of Dominion Energy Transmission Inc.'s New Market Project in New York.FERC's Democratic commissioners, Richard Glick and Cheryl LaFleur, supported the denial but disagreed with the inclusion of the policy change.Both cited the D.C. Circuit's 2017 ruling in Sierra Club v. FERC, which ordered the agency to more closely examine downstream greenhouse gas emissions from the Southeast Market Pipelines Project, which includes the Sabal Trail pipeline. "This decision clearly signaled that the Commission should be doing more as part of its environmental reviews," LaFleur wrote in her dissent.
New York Regulators to Analyze Downstate Natural Gas Shortages - The New York Public Service Commission (PSC) said this week it plans to analyze and report on the changing market conditions that prompted Consolidated Edison Co. (Con Ed) to impose a moratorium on new natural gas customers in Westchester County. The PSC said it would develop recommendations to ensure utilities across the state are able to meet customer needs in a way that is consistent with Democratic Gov. Andrew Cuomo’s aggressive energy conservation goals.“Specifically, staff will analyze short-term and long-term market conditions, along with the capacity of natural gas infrastructure and alternatives, and their role in aiding the transition to a clean energy economy,” the commission stated.Con Ed said this month that it could no longer accept applications for new natural gas service in Westchester County as demand is quickly outpacing pipeline-constrained supply. The utility warned that the moratorium would remain in effect until sufficient supply is available to meet the region’s needs.The report and recommendations are to be submitted to the PSC and State Energy Planning Board by July 1 for review and assessment of policies, programs and regulations to ensure reliable energy is available for customers and economic growth, while also aiding the state’s renewable energy goals. Those steps, the commission added, would aid broader efforts to help lower gas demand. Con Ed said it “made every effort” to explore alternatives, including solutions to cut gas use and employ compressed or renewable gas. However, the utility said those alternatives aren’t enough to meet demand. National Grid has also warned of a similar supply squeeze on Long Island if Transcontinental Gas Pipe Line Co.’s Northeast Supply Enhancement Project is not approved. That project has already had difficulties with state regulators during the application process for a water quality certification, which has slowed it down.
Drillers Are Easing Off the Gas - In an industry not known for restraint, Appalachia’s shale giants are decelerating natural-gas output as prices languish. Some of the companies responsible for flooding the U.S. with natural gas are dialing back on drilling amid worries that supplies of the fuel are outpacing demand and potentially sending already depressed prices into a tailspin. Pittsburgh-based EQT Corp. on Tuesday became the latest big gas producer to say it will spend less on drilling this year than it did last year, and that it aims to maintain its present level of output rather than increase it. Gulfport Energy Corp. outlined a similar strategy earlier in the month
Murphy Urges Full Fracking Ban in Delaware River Basin -- Gov. Phil Murphy yesterday called for a full fracking ban in the Delaware River Basin, urging fellow members of the Delaware River Basin Commission to prohibit all activities related to the controversial technology that’s used to drill for natural gas. In a letter to the DRBC, the governor called for a rule proposal currently before the intrastate agency to be expanded beyond banning the practice of hydraulic fracturing within the basin to also include prohibitions on the storage, treatment and disposal of waste from fracking operations and on exporting water from the watershed to abet drilling operations elsewhere. The proposed bans would mark a significant victory for environmental groups and residents in the region, who have waged an eight-year fight to turn a temporary moratorium on fracking — the practice of injecting huge amounts of water into shale formations to extract the gas — into a permanent ban within the watershed. For that to happen, however, Murphy, the chair of the DRBC, needs to convince at least two of the three other governors on the commission to back his full ban, a prospect fracking critics are optimistic will happen. “I think there is plenty of room for all three Governors to come around and do the right thing,’’ said Maya van Rossum, Delaware Riverkeeper. “This is the no-nonsense approach we critically need to prevent the inevitable degradation and pollution that fracking activities would bring to our watershed.’’ The natural-gas boom that has lowered fuel costs for consumers and businesses is one of the more divisive issues within the four states the river basin is in — New Jersey, Pennsylvania, New York and Delaware. Environmentalists and residents fear fracking within Pennsylvania and neighboring states threatens the drinking water from the Delaware River, the source of potable water for 15 million people.
The Merger That Made a U.S. Gas Giant Is Failing – WSJ - When EQT Corp. agreed to buy Rice Energy Inc. for $6.7 billion a little over a year ago to create the country’s largest natural-gas producer, it promised that the combined company would be able to make more by spending less. Those promises have so far fallen flat, and what many cheered as one of the first deals in a hoped-for wave of consolidation among shale companies is turning out to be a cautionary tale, demonstrating that in fracking, bigger isn’t always better. EQT shares have plunged around 42%—accounting for EQT’s spinoff of its pipeline business in November—since the deal closed in late 2017, as the efficiencies executives envisioned have failed to materialize. The two Appalachian shale drillers’ combined market value has lost about $4 billion since the deal was announced in June 2017, factoring in the spinoff.The union officially turned acrimonious last month, when the brothers who ran Rice Energy launched an effort to boot EQT’s current management and take over the merged company, and gained the support of two influential activist hedge funds. EQT’s acquisition of Rice, which gave it more U.S. natural-gas production by volume than Exxon Mobil Corp. , was largely motivated by the idea of drilling supersize horizontal wells beneath the two companies’ contiguous acreage in the Marcellus Shale, one of the largest gas fields in the world. Spurred by investors, many shale companies have explored consolidation, hoping that larger combined landholdings and scale would help them turn fracking more profitable. But the EQT-Rice merger got off to a rocky start, partly because of cultural differences between the companies, according to people who have worked for the companies.
Trump Admin Eyes Limiting States' Powers to Block Pipelines -- The Trump administration is considering taking steps to limit the ability of states to block interstate gas pipelines and other energy projects, according to three people familiar with the deliberations. The effort, possibly done through an executive order, is aimed chiefly at states in the Northeast U.S., where opposition to pipeline projects has helped prevent abundant shale gas in Pennsylvania and Ohio from reaching consumers in New York and other cities. New York used a Clean Water Act provision to effectively block the construction of a natural gas pipeline being developed by Williams Partners LP to carry Marcellus shale gas 124 miles (200 km) to New England. The project got the green light from the Federal Energy Regulatory Commission but ran into obstacles in New York, where regulators denied a water quality permit. While mostly targeted toward boosting limited pipeline capacity in the Northeast, the initiative could help drive permitting and construction of other energy projects, including coal export terminals. For instance, Lighthouse Resources’ proposed coal export terminal in Longview, Washington, was ensnared when the state’s Department of Ecology denied a critical Clean Water Act permit, citing concerns about air quality and increased railroad traffic to serve the site. The new initiative dovetails with expectations that President Donald Trump would use his State of the Union address to tout efforts to accelerate permitting and construction of oil and gas pipelines, though he’s postponed the speech and the exact timing of any announcement remains unclear. The potential White House action was earlier reported by Politico.Pipeline advocates who say states are abusing their authority under the Clean Water Act have advanced ideas for reining it in. “It just never made sense to me that a state could be able to use the Clean Water Act and effectively veto a federally approved project,” Dena Wiggins, president of the Natural Gas Supply Association, said during an event on Thursday. “There’s got to be something to done to address that issue.” But it’s not clear how much -- if at all -- an executive order could curtail states’ special powers under the statute. Industry officials said real change may require legislation to alter the statute itself, such as a bill advanced in 2018 by Senator John Barrasso, a Wyoming Republican.
Prices Retreat Despite Bullish Weather As Inventories Return To Above Last Year - Highlights of the Natural Gas Summary and Outlook for the week ending January 25, 2019 follow. The full report is available at the link below.
- Price Action: The February contract fell 30.4 cents (8.7%) to $3.178 on a 39.9 cent range ($3.356/$2.957).
- Price Outlook: Despite weather forecasts that were in general still bullish, the duration of extreme temperatures forecast last week has been somewhat moderated, especially at the end of forecast. With national inventory adequate, there is little fear of storage deliverability issues. However, the still extreme cold forecast the upcoming week may see explosive regional cash prices as demand soars for a few days. CFTC data has not been updated due to the US government shutdown. Aggregated CME futures open interest rose to 1.332 million as of January 25. The current weather forecast is now cooler than 9 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 3.3 bcf. Cove Point is net exporting 0.8 bcf. Corpus Christi is exporting 0.000 bcf. Cameron is exporting 0.000 bcf.
- Weekly Storage: US working gas storage for the week ending January 18 indicated a withdrawal of (163) bcf. Working gas inventories fell to 2,370 bcf. Current inventories rise 74 bcf (3.2%) above last year and fall (320) bcf (-11.9%) below the 5-year average.
- Supply Trends: Total supply rose 1.3 bcf/d to 83.4 bcf/d. US production rose. Canadian imports rose. LNG imports rose. LNG exports fell. Mexican exports fell. The US Baker Hughes rig count rose +9. Oil activity increased +10. Natural gas activity decreased (1). The total US rig count now stands at 1,059 .The Canadian rig count rose +23 to 232. Thus, the total North American rig count rose +32 to 1,291 and now exceeds last year by +6. The higher efficiency US horizontal rig count rose +3 to 932 and rises +124 above last year.
- Demand Trends: Total demand rose +11.8 bcf/d to +106.6 bcf/d. Power demand rose. Industrial demand rose. Res/Comm demand rose. Electricity demand rose +2,171 gigawatt-hrs to 79,211 which trails last year by (8,602) (-9.8%) and trails the 5-year average by (1,969)(-2.4%%).
- Nuclear Generation: Nuclear generation rose 1,113 MW in the reference week to 94,715 MW. This is (1,395) MW lower than last year and +761 MW higher than the 5-year average. Recent output was at 94,691 MW.
The heating season has begun. With a forecast through February 8 the 2018/19 total cooling index is at (1,999) compared to (1,771) for 2017/18, (1,617) for 2016/17, (1,609) for 2015/16, (1,909) for 2014/15, (2,175) for 2013/14, (1,847) for 2012/13 and (1,814) for 2011/12.
Warmer First Third Of February Eliminates Winter Gas Premium -It was another bloody day for natural gas bulls, with the February gas contract gapping down significantly and an early intraday bounce failing as well. The contract ended up settling down over 8% into options expiry. The role of weather in the move was incredibly clear with the February contract logging by far the largest loss of the day. This helped easily pull the March/April H/J spread to new lows. Our Morning Update showed just how pronounced the GWDD losses were over the weekend, with most of them confined in the medium-range. The Climate Prediction Center has been showing this more consistently too, with their Afternoon Update remaining quite warm through the 6-10 Day period. In our Natural Gas Weekly Update for clients today we took a deeper look at the impact these warm trends have had on natural gas storage projections, and outlined our thoughts on this Thursday's EIA number as well. We highlighted that it will easily hold the largest draw of the season so far with significant GWDDs last week. Yet on a weather-adjusted basis the print looks to be looser than last week, due in thanks to demand destruction from the Martin Luther King Jr. holiday last Monday.
Natural gas tumbles on warmer February forecast, after brutal cold snap -- Natural gas prices fell sharply Monday, as weather forecasts for February show more normal and even warmer-than-normal temperatures for parts of the U.S., following a brutal cold snap this week. Natural gas futures for February fell 7.2 percent to $2.95 per million British thermal units."The forecast tuned a little milder for next week, and they took the bottom out of the market again. The storage picture has been altered a bit, and there really are no worries. If February doesn't turn out to be the coldest month of winter, justifying a plus $3 price is hard for the market," said Gene McGillian, manager market research at Tradition Energy. The market has been volatile this winter with worries about low amounts of gas in storage, but high levels of production have helped alleviate that concern."Last week was the first week compared to a year ago that we flipped to a small surplus for the first time in about 18 months," McGillian said. Inventories still remain below the five-year average. Forecasters had been expecting a longer period of cold temperatures."Weekend weather model guidance moved in about as bearish a direction as possible, with incredible warming in the medium-range as cold in the short-term quickly gets kicked out and replaced by ridging across the East," Bespoke Weather noted. Bespoke said risks of cold temperatures return in the medium to longer range, and moderate cold could return in the middle of the month.
U.S. natural gas demand to hit record high during freeze (Reuters) - U.S. homes and businesses will likely use record amounts of natural gas for heating on Wednesday as an Arctic-like freeze blankets the eastern half of the country, according to energy analysts. Harsh winds brought record-low temperatures across much of the Midwest, unnerving even residents accustomed to brutal winters and keeping them huddled indoors as offices closed and mail carriers halted their rounds. That brutal cold could also temporarily reduce gas production by causing freeze-offs in the Marcellus and Utica shale, the nation’s biggest gas producing region, in Pennsylvania, Ohio and West Virginia, the analysts warned. Freeze-offs occur when water and other liquids in gathering lines freeze, blocking the flow of gas. Overnight lows on Wednesday-Friday will drop to -20 Fahrenheit (-29 Celsius) in Chicago and the single digits along the East Coast from New York to Boston, according to AccuWeather, a weather forecaster. The cold, however, will be short lived with high temperatures in New York and Chicago expected to rise into the 40s F this weekend. The normal high at this time of year is 32 in Chicago and 39 in New York. Financial data provider Refinitiv predicted gas demand in the Lower 48 U.S. states would hit a daily record of 145.2 billion cubic feet per day (bcfd) on Wednesday as consumers crank up their heaters to escape the bitter cold. That would top the current all-time high of 144.6 bcfd set on Jan. 1, 2018. One billion cubic feet is enough gas to supply about five million U.S. homes for a day. In early estimates, gas production in the Lower 48 states will slip about 0.9 bcfd to 85.8 bcfd on Wednesday, according to Refinitiv. That is the lowest daily output since Enbridge Inc started to restore flows through some gas pipes in Ohio following a pipeline explosion there on Jan. 21. “Based on our analysis of historical freeze-offs, temperature conditions forecasted for Jan. 30-31 pose a risk of a freeze-off occurring in the Marcellus/Utica...in the ballpark of 1 bcfd,” said Rishi Iyengar, senior analyst natural gas markets at IHS Markit’s OPIS PointLogic. In early estimates, Marcellus/Utica production was down about 0.7 bcfd to 29.6 bcfd on Wednesday, according to Refinitiv.
Consumers Energy, DTE ask customers to turn down thermostats - In the midst of a polar vortex that has brought record-breaking low temperatures to Michigan, Consumers Energy has called for customers to reduce their natural gas usage and DTE Energy is asking customers to reduce electricity usage. Consumers Energy sent an urgent text alert on cellphones shortly after 10:30 p.m. urging utility customers to lower thermostats and reduce energy usage or risk a dangerous gas shortage in the wake of record-breaking cold.The temperature in metro Detroit hovered at minus 11 degrees at 10:30 p.m., smashing the record for Jan. 30 of minus 4 degrees set in 1951.And the Michigan Public Service Commission has ordered a suspension of all utility shutoffs during the cold spell, according to a news release from the Lansing regulators. In addition to individual residential customers, General Motors has been requested by Consumers Energy to suspend operations at several manufacturing sites.
Appeals flood consumers: Use less gas after utility fire — Consumers Energy said its customers' reduced gas usage is helping it deal with a hobbled gas compressor station in Macomb County. "Consumers Energy greatly appreciates conservation efforts by all natural gas customers across Lower Michigan to assist with a supply issue on the company’s gas distribution network," officials with the energy company said Thursday in a statement. "Conservation, even by gas customers served by other utilities than Consumers Energy, is making a difference." The news comes hours after the company's top executive called on the company's customers to cut usage after a Wednesday morning fire at its Ray Compressor Station. She also said there would be brief, localized shutoffs if customers ignored the request. "This truly is an unprecedented crisis," Consumers Energy CEO Patti Poppe said Wednesday. "We have never been in this situation before." The governor and the public service commission also urged customers to cut gas usage due to the fire. On Thursday, the company said it was "cautiously optimistic that our public requests to reduce gas use are having a positive effect." Still, it pleaded with customers to continue conservation measures through the end of the day Friday because of Thursday’s historically cold weather. "Repairs at our Ray Compressor Station are ongoing and the station is partially in service, providing natural gas to our distribution system," officials said. "However, we are asking that all customers continue to conserve until the end of the day Friday, Feb. 1, to allow for temperatures to moderate and additional repairs to the Ray Station."
GM halts operations at 11 Michigan plants after utility's urgent appeal (Reuters) - General Motors Co said late on Wednesday it will temporarily suspend operations at 11 Michigan plants and its Warren Tech Center after a utility made an emergency appeal to users to conserve natural gas during extreme winter cold. Fiat Chrysler Automobiles NV also said it had canceled a shift on Thursday at both its Warren Truck and Sterling Heights Assembly plants and was considering whether it would need to cancel additional shifts. GM said it had been asked by Consumers Energy, a unit of CMS Energy Corp, to suspend operations to allow the utility to manage supply issues after extreme cold temperatures and a fire at a compressor station. It said workers were told not to report for the shifts at its Orion Assembly, Flint Assembly, Lansing Delta Township Assembly and Lansing Grand River Assembly plants, as well as other stamping and transmission plants on Wednesday evening and early Thursday. GM said it was still assessing when employees could return to work. Workers at its Warren Tech Center were also told to stay home on Thursday. In a video message posted on Facebook, CMS Energy Chief Executive Patricia Poppe said large companies, including Fiat Chrysler, Ford Motor Co and GM, had agreed to “interrupt” production schedules through Friday to tackle the issue prompted by a fire at a Michigan facility and the record-breaking cold. Poppe said the usage cuts by large businesses were not enough, and urged 1.8 million Michigan customers to turn down thermostats as much as they could to cut natural gas use in order to protect critical facilities like hospitals and nursing homes. “I need you to take action right now,” she said. Ford Motor said it had also taken steps to reduce energy use at its four Michigan plants supplied by Consumers Energy, but added the situation remained fluid. A spokeswoman said it had reduced heating levels at Livonia Transmission and Van Dyke Transmission, stopped heat treatment processes at Sterling Axle and shut down the paint process at Michigan Assembly.
US natural gas storage volume falls 173 Bcf to 2.197 Bcf: EIA— US natural gas in storage decreased 173 Bcf to 2.197 Tcf in the week that ended January 25, the US Energy Information Administration reported Thursday. The withdrawal was well below the expectations of an S&P Global Platts' survey of analysts, which called for a 197 Bcf pull. The draw was completely outside of the range of survey responses. The lowest response was for a 176 Bcf withdrawal. The withdrawal was considerably above the 126 Bcf pull reported in the corresponding week in 2018 as well as the five-year average draw of 150 Bcf, according to EIA data. As a result, stocks were 14 Bcf, or 0.6%, under the year-ago level of 2.211 Tcf and 328 Bcf, or 13%, below the five-year average of 2.525 Tcf. The NYMEX March gas futures contract slid 2 cents to $2.83/MMBtu following the data announcement. The EIA reported a 39 Bcf withdrawal in the East to trim regional stocks to 527 Bcf, compared with 529 Bcf a year ago; a 67 Bcf draw in the Midwest to drop inventories to 606 Bcf, compared with 601 Bcf a year ago; a 7 Bcf pull in the Mountain region to cut stocks to 114 Bcf, compared with 138 Bcf a year ago; a 7 Bcf withdrawal in the Pacific to drop inventories to 178 Bcf, compared with 222 Bcf a year ago; and a 52 Bcf draw in the South Central region to decrease stocks to 771 Bcf, compared with 720 Bcf a year ago. Total inventories are now 48 Bcf under the five-year average of 575 Bcf in the East, 57 Bcf below the five-year average of 663 Bcf in the Midwest, 35 Bcf lower than the five-year average of 149 Bcf in the Mountain region, 64 Bcf below the five-year average of 242 Bcf in the Pacific and 125 Bcf under the five-year average of 896 Bcf in the South Central region. An early forecast for the week that ended February 1 calls for a withdrawal of 255 Bcf, which is 105 Bcf larger than the five-year average draw. It would be the largest pull ever for reported for the corresponding week. During the polar vortex of 2014, 231 Bcf was drawn down during the same week.
Weekly Natural Gas Storage Report - Mother Nature Not Coming To The Rescue - EIA reported a storage draw of 173 Bcf for the week ending Jan 25. This compares to the -189 Bcf we projected and consensus average of -183 Bcf. The -173 Bcf was higher than the five-year average of -160 Bcf and much higher than last year's -99 Bcf. For the week ending Feb. 1, we have a storage draw of -240 Bcf. This would be compared to the five-year average draw of -151 Bcf and last year's -119 Bcf. Our EOS forecast is now 1.312 Tcf. Natural gas prices are still getting hammered with March contracts falling to just $2.818/MMBtu down from $3.30+ just a few weeks ago. The culprit is once again mother nature with the first week of February revised warmer than normal. For example, you can see that our estimate for Feb 1 storage draw is -240 Bcf, but the following week is only expected to show a storage draw of -120 Bcf. This delta is the result of the cold blast being very temporary and as a result, markets are punishing prices for that. As you can see from the gas-weighted heating degree days chart, HDDs are expected to plummet going into the first week of February before rebounding. The question for where gas prices are headed will be entirely dependent on the weather outlook for the second half of February. With the first half of February turning out to be a disappointment, natural gas prices will be extremely sensitive to forecasts for the second half. If the second half turns out to be warmer than normal, then we could see prices plunge to a low. But early indications are that the second half will be colder than normal resulting in another long shot opportunity.
Colder Forecasts Can't Save Gas After Bearish EIA Storage Number - It was another red day in the natural gas market, as prices initially rallied overnight on colder weather model guidance but were pulled back lower on weaker physical prices. A bearish EIA print then helped the March contract settle a bit more than a percent lower. We can see how the whole strip made a solid leg lower that was actually led down by later contracts. The result was that the March/April H/J spread actually ticked higher on the day despite all 2019 contracts logging decent losses on the day. At first, prices were strong as we added some GWDDs overnight, as we showed in our Morning Update. We also warned clients that afternoon weather model guidance was likely to trend colder, which verified well with most models increasing cold risks in Week 2. Yet EIA storage data came out incredibly bearish, with the EIA announcing only 173 bcf of gas was withdrawn from storage. We were looking for a draw of 189 bcf and even then were slightly below the market consensus that was a bit higher. This print was very loose on a weather-adjusted basis, even when taking into account the Martin Luther King Jr. holiday.
Natural gas prices slump despite US winter weather blast (AP) — While the polar vortex is driving up demand for natural gas, it isn’t doing the same for the price. The massive weather system is blanketing much of the Midwest and Northeast in a deep freeze, and demand for natural gas is spiking as homeowners crank up the heat to stay warm. Yet natural gas prices have fallen this week and are in the throes of a two-month skid. The bone-chilling cold stretches from Bismarck, North Dakota, to Portland, Maine, but it will be relatively short-lived. And forecasters say warmer than normal weather is coming to replace it. An early blast of winter weather coupled with U.S. natural gas stockpiles hovering at a 13-year low drove the price of natural gas to $4.84 per 1,000 cubic feet in mid-November, the highest closing price in more than four years. Natural gas prices began to decline around mid-December as the early November winter weather gave way to above-normal temperatures. That weather pattern continued into January and natural gas fell below $3. The relative warm spell allowed for supplies of natural gas to be replenished. Greater supply is a counterweight to the market pressures that can drive prices higher. The price rose to $3.59 in mid-January amid a brief cold spell but by Thursday had dropped to $2.81 per 1,000 cubic feet. That’s down 42 percent from that 2018 peak and 6 percent lower than a year ago.
US LNG export project timelines face uncertainty in market amid regulatory questions - — The Federal Energy Regulatory Commission's inaction on Venture Global LNG's permit application for its Calcasieu Pass export terminal in Louisiana is raising concerns in the market about a broader impact on approval schedules set for other projects. The stakes are high: US developers are already facing significant headwinds on the commercial side from trade tensions between Washington and Beijing. Also, the partial government shutdown that lasted for more than a month before an apparent breakthrough Friday -- albeit one that may only be temporary -- impacted several agencies that are involved in the project review process. New regulatory hurdles could further complicate developers' efforts at a time when they are racing to make final investment decisions so they can start up the second wave of US liquefaction facilities by the early- to mid-2020s to meet expected global LNG demand. Venture Global LNG acknowledged the urgency when it requested earlier this month that FERC keep to its previously stated schedule, which called for a decision on certification by January 22. That date passed without a decision, and as of press time Friday afternoon the commission still had not acted. "We believe the timing of the approval is particularly important for VG as it had made plans to begin site construction in early 2019 upon FERC approval, but prior to formal FID," Wells Fargo Securities analyst Michael Webber said in a note to clients Wednesday. "Beyond VG, we think the idea of modest regulatory delays seems at least somewhat likely, at least in terms of final project approval -- however, it's unclear how evenly distributed any delays will be, if at all." In an email Friday responding to questions, FERC Commissioner Cheryl LaFleur said she believes there is a path forward on the dockets for the pending LNG export projects. "I hope that through constructive engagement by the commissioners we can work toward that goal," she said. Eagerly watching are developers of the dozen projects that in August 2018 received environmental review schedules and expected final authorization timelines that allowed for the possibility that permit certificates would be issued for most of them this year. In addition to Calcasieu Pass, projects that received environmental review and/or final permit schedules with decisions expected within the next six months include Tellurian's Driftwood LNG in Louisiana and Sempra Energy's Port Arthur LNG in Texas. Tellurian spokeswoman Joi Lecznar said Friday that company officials have "no concerns and remain on schedule to begin construction mid-2019." That would be subject to FERC approval, and a final investment decision. Sempra still believes it will receive its final environmental impact statement by January 31 for Port Arthur LNG, spokeswoman Paty Ortega Mitchell said.
US Magnolia LNG seeks new offtake deals after sole agreement lapses — Australia's LNG Limited acknowledged a level of urgency Thursday to secure offtake agreements with potential buyers of capacity from its proposed Magnolia LNG export terminal in Louisiana, after its only publicly disclosed long-term deal lapsed in December. The developer's CEO, Greg Vesey, said in a letter to shareholders posted on the company's website that the pricing offer to potential customers being courted in Asia, Europe and elsewhere is market competitive and would provide an attractive commercial opportunity.At the same time, Vesey did not specify an exact timeframe of when LNG Limited expects to make a final investment decision on the project. The company had planned to reach FID last year, but in October delayed that until 2019 amid China's imposition of a 10% tariff on imports of US LNG. Vesey's latest letter said only that LNG Limited envisions an FID, and that it is moving expeditiously toward that goal."Our marketing efforts continue with an appropriate balance for the need to close capacity sales at Magnolia LNG while providing acceptable returns to shareholders," Vesey said as the company released its latest quarterly financial results.He said commercial discussions "with select Asian counterparties progressed substantially in the period despite uneven trade discussion rhetoric."At the World Gas Conference in Washington in June 2018, Vesey said that an interested Chinese buyer was holding off completing a purchase agreement with Magnolia LNG until there was greater certainty about tariffs that at the time were being threatened by Beijing. The tariffs that China eventually did impose started in September 2018.Magnolia LNG won permit approval from the Federal Energy Regulatory Commission in April 2016, and since then it has vied, along with multiple US developers, to line up contracts and financing to support construction. The company recently petitioned US regulators to increase the authorized capacity of the project from 8 million mt/year to up to 8.8 million mt/year.
Exxon, Qatar Petroleum Continue $10-Bln LNG Project Without ConocoPhillips -Exxon and Qatar Petroleum will proceed with a US$10-billion expansion of their Golden Pass LNG import terminal in Texas to turn it into an export facility as well, Reuters reports, citing source familiar with the matter. The third partner in the venture, ConocoPhillips, however, will not be joining them in the expansion and has decided to sell the 12.4-percent interest it holds in Golden Pass, the sources also said, adding that Exxon, which has a 17.4-percent stake in the project, is the most likely buyer. Qatar Petroleum is the majority shareholder in the venture with 70 percent.The Golden Pass terminal can accommodate up to 2 billion cu ft of natural gas for regasification right now. The sources did not detail the capacity of the future export part of the facility.The Reuters sources also noted that Exxon and Qatar Petroleum have been forging closer ties in the liquefied natural gas segment across the world, from Qatar itself to Mozambique and the United States, which has thanks to the shale gas boom become an increasingly important exporter of LNG.At the same time, Qatar is planning huge investments in U.S. natural gas as it seeks to retain the number-one LNG exporter spot, which last November was threatened by Australia. Down Under emerged as the largest LNG exporter globally for that month.Qatar plans to invest US$20 billion in U.S. natural gas, part of a larger U.S. investment campaign by the Qatar Investment Authority that will total US$45 billion as it diversifies away from Europe. Meanwhile, LNG capacity is growing along with demand. Earlier this week, oilfield services provider Baker Hughes’s chief executive, Lorenzo Simonelli said he expected new LNG projects with a total capacity of 100 million tons per year could be approved this year alone. Global LNG consumption is seen to double by 2030, reaching 550 million tons.
The United States is expected to export more energy than it imports by 2020 -- EIA projects that, for the first time since the 1950s, the United States will export more energy than it imports by 2020 as increases in crude oil, natural gas, and natural gas plant liquids production outpace growth in U.S. energy consumption. Different assumptions about crude oil prices and resource extraction affect how long EIA projects that the United States will export more energy than it imports. The United States has been a net exporter of coal and coke for decades, began exporting more natural gas than it imports in 2017, and is projected to export more petroleum and other liquids than it imports within the decade. The United States has imported more energy than it exports on an annual basis since 1953, when trade volumes were much smaller. Since then, when imports of energy totaled 2.3 quadrillion British thermal units (Btu), gross energy imports generally grew, reaching a peak of 35 quadrillion Btu in 2005. Gross energy exports were as low as 4 quadrillion Btu as recently as 2002 but have since risen to more than 20 quadrillion Btu in 2018, largely because of changes in liquid fuels and natural gas trade.EIA’s projected changes in net energy trade are driven mostly by evolving trade flows of liquid fuels and natural gas. In the Reference case of EIA’s newly released Annual Energy Outlook (AEO), the United States exports more petroleum and other liquids than it imports after 2020 as U.S. crude oil production increases and domestic consumption of petroleum products decreases. Near the end of the projection period, the United States returns to importing more petroleum and other liquids than it exports on an energy basis as a result of increasing domestic gasoline consumption and falling domestic crude oil production in those years. U.S. natural gas trade in the AEO Reference case, which includes shipments by pipeline from and to Canada and to Mexico as well as exports of liquefied natural gas (LNG), is increasingly dominated by LNG exports to more distant destinations. Increasing natural gas exports to Mexico are a result of more pipeline infrastructure to and within Mexico, allowing for increased natural gas-fired power generation. As natural gas demand grows in Asia and U.S. natural gas prices remain competitive, LNG export capacity increases further before leveling off after 2030 when additional suppliers enter the global LNG market and U.S. LNG is no longer as competitive. EIA projects the difference between natural gas exports and imports to increase throughout the AEO projection period, reaching a high of 23 billion cubic feet per day (Bcf/d) in 2050.
Interior approved drilling permits for Bernhardt-linked companies during shutdown - Former oil and gas lobbyist David Bernhardt became acting head of the Interior Department on January 2, midway through the historic government shutdown. Under Bernhardt’s command, the Interior Department formally changed its shutdown plans, recalling employees to process drilling permits, both offshore and throughout the Mountain West. A new analysis by the Center for Western Priorities finds that dozens of drilling permits approved during the shutdown were for companies that serve on the boards of major trade associations that were recent clients of David Bernhardt. According to data from the Bureau of Safety and Environmental Enforcement, 71 offshore drilling permits were approved during the shutdown. Of those, 53 permits were for companies that sit on the board of directors for the National Ocean Industries Association (NOIA), a major offshore drilling trade association and former Bernhardt client. Before joining the Interior Department, Bernhardt represented NOIA in a lawsuit against the Interior Department over offshore drilling leases after the Deepwater Horizon spill, and lists the trade association on hisethics recusal. Similarly, of the 38 onshore drilling permits approved by the Bureau of Land Management during the shutdown, 20 were for companies that sit on the board of directors of the Independent Petroleum Association of America (IPAA) or affiliates of the U.S. Oil and Gas Association (USOGA), both former Bernhardt clients. When seeking office at the Interior Department, Bernhardt listed both trade associations on his ethics recusal and noted IPAA was a source of personal income on his financial disclosure.
US crude exports to Asia to swell in Mar, Apr on cheaper freight — US crude exports to Asia are set to swell over March and April as a drop in freight rates makes US cargoes more competitive against barrels from Asia or the Middle East, according to market participants and shipping fixtures Friday. Industry sources indicated that US crudes continued to attract the attention of plenty of Asian buyers as various flagship North American export grades have been consistently trading at a discount against comparable light and medium Persian Gulf grades. "Arbitrage economics remain highly favorable for more US crude purchases. The latest OPEC cut seems to be keeping the Dubai price complex relatively expensive," a senior official at Seoul-based Korea Petroleum Association said. Freight rates from the US Gulf Coast to Asia have fallen by about a third since early-December, making the case for greater loadings of US crude to the region. Around 17 VLCCs have been fixed to load crude from the US Gulf Coast to Eastern destinations for February-loading cargoes, shipping reports showed, with many more likely booked outside of reported fixtures. For January-loading cargoes, 16 VLCCs were seen carrying US crude from the US Gulf Coast to Eastern destinations, according to Platts vessel tracking software cFlow and shipping reports. December-loading US crude cargoes, meanwhile, saw only seven VLCCs leave the US Gulf Coast for the East, cFlow and shipping reports showed. Among fixtures seen, US producer Occidental Petroleum had four VLCCs for the USGC-East route for February-loading cargoes -- Landbridge Majesty on February 7, Hong Kong Spirit over February 20-25, DHT Colt on February 24 and Maran Ares on February 27. South Korean refiner SK Innovation is slated to load three VLCCs -- Apolytares on February 5, Nasiriyah on February 9 and New Horizon over Februray 15-17 -- all for delivery to South Korea. Other charterers of February-loading cargoes for the USGC-East route include Vitol, Equinor and South Korea's GS Caltex, among others.
GOM Oil Export Growth Hurts US Refiners-- Crude exports from the Gulf of Mexico are picking up at the worst time for American refiners. Rising production and falling freight rates are behind a surge of overseas shipments of Mars crude, a medium sour oil produced in the U.S. Gulf of Mexico. This comes as sanctions on Venezuela and OPEC’s production cut agreement are limiting the availability of similar types of oil that U.S. refiners are optimized to process. At least 6 million barrels of the crude will load in February for shipment to South Korea and Europe, according to people who asked not to be identified because the shipment data is proprietary. This compares with about 2 million that left for foreign markets this month, they said. Canada also produces comparable crude but production plans implemented by Alberta in January may have resulted in some suppliers experiencing steeper cuts than the originally targeted 325,000 barrels a day. Production from the Gulf of Mexico is set to increase by 200,000 barrels day this year compared with last year after 11 new projects came online, according to the U.S. Energy Information Administration. Six more projects are expected to come online this year. “Gulf of Mexico crudes like Mars are logically placed for export with connections to Louisiana Offshore Oil Port,” said Elisabeth Murphy, an analyst at ESAI Energy Llc. Mars exports planned for next month would amount to about a third of the barrels that flowed in November on the system operated by Mars Oil Pipeline Company, according to latest data from the Louisiana Department of Natural Resources. Daily throughput on the system rose about 30 percent from January to November last year as new production started in the Gulf of Mexico. Despite rising production, Mars Blend prices have strengthened as demand seems to be outpacing supply. Last week, the Mars premium to West Texas Intermediate futures hit a four-year high. The sanctions on Venezuela and the potential force majeure the country is considering on U.S. oil shipments jeopardize nearly 12 million barrels of crude that would have gone to U.S. refiners in February. They will likely replace just over half of the 500,000 barrels a day of Venezuela oil the plants receive with Canadian crude by rail and potentially some crude from the Arab Gulf, Murphy said.
With Venezuela sanctions looming, USGC refiners face premiums for replacement barrels — The Trump administration is poised to impose sanctions on US imports of Venezuelan crude oil, a move which will leave US Gulf Coast refiners scrambling for more costly replacement barrels, sources said. If sanctions are imposed, flows of heavy crudes into the US are most likely to increase from Mexico, Canada, Saudi Arabia and Iraq, analysts said this week. "Essentially, if you have sanctions that don't allow the current 500,000 b/d of Venezuelan crude to come to the US then you'd have a reallocation of trade flows around the world," said John Auers, executive vice president of Turner, Mason & Company. "But it's not going to be a perfect reallocation." An increase of imports of each grade poses a challenge, from infrastructure constraints to government-imposed output curtailments. "US refiners would likely pay a premium due to infrastructure constraints, competition for market share in Asia, and continued OPEC supply limits," analysts with Rapid Energy Group said in a note Friday. The sanctions would also likely be imposed at a time when heavy barrels are trading at a premium to light crudes. In fact, Saudi Arab Medium for US buyers moved to a 40 cent/b premium to WTI MEH this month, according to S&P Global Platts calculations. This time last year, Arab Medium for US buyers was at a $3/b discount to WTI MEH. But an exit of Venezuelan crudes from the USGC market would only exacerbate this dynamic, likely raising prices of other similarly heavy grades even further at the expense of Gulf Coast refiners. Gulf Coast coking margins for Venezuela's Mesa crude have averaged around $5/b so far in January, roughly equal to those for US benchmark medium sour Mars. But these are nearly double those for coking Saudi Arab Heavy or Arab Medium or Mexican Maya. Sources said that if the heavy market tightens further, refineries --- many of which have invested significantly in crackers and cokers -- will be faced with the choice of chasing more expensive barrels or switching to a less optimal lighter crude diet. "Complex refiners will buy all the heavy sour because the residue allows them to turn it into the most profitable of products," "The battle will be between running more light sweet or more medium sour." Analysts said they expect the Saudis could increase exports to meet increased demand in the Gulf Coast. "I do think [the Saudis] will be opportunistic, as they always are, with the slate of crudes that they're offering and the crudes that they're directing to different places,"
America Is Producing the Wrong Kind of Oil -- The shale boom has created a world awash with crude, putting a lid on prices and markedly reducing U.S. dependence on imported energy. But there’s a growing problem: America is producing the wrong kind of oil. Texas and other shale-rich states are spewing a gusher of high-quality crude -- light-sweet in the industry parlance -- feeding a growing glut that’s bending the global oil industry out of shape.Refiners who invested billions to turn a profit from processing cheap low-quality crude are paying unheard of premiums to find the heavy-sour grades they need. The mismatch is better news for OPEC producers like Iraq and Saudi Arabia, who don’t produce much light-sweet, but pump plenty of the dirtier stuff.The crisis is Venezuela, together with OPEC output cuts, will exacerbate the mismatch. The South American producer exports some of the world’s heaviest oil and Trump administration sanctions announced this week will make processing and exporting crude far more difficult. American refiners are scrambling for alternative supplies at very short notice. Crude isn’t the same everywhere: the kind pumped from the shale wells of West Texas resembles cooking oil -- thin and easy to refine. In Venezuela’s Orinoco region, it looks more like marmalade, thick and hard to process. Density isn’t the only difference -- the sulfur content is also important, dividing the market into sweet and sour crude. Heavy crude tends to have more sulfur than light crude.As Saudi Arabia, Russia and Canada cut production, and American sanctions force Venezuelan and Iranian exports lower, the market for low-quality crude is feeling the impact."The strength in the physical crude market continues, led by sour crude shortages," Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. in London, said echoing a widely held view within the market. For consumers and politicians focused on the headline oil price for Brent and West Texas Intermediate, the most popular benchmarks, it may not matter much. Car drivers could even benefit, because too much light-sweet crude often leads to too much gasoline, and lower prices. On the flip side, truckers may find themselves short-charged, as refiners prefer heavy-sour crude to make diesel.
U.S. gasoline consumption stalls, adding to oil producers' problems (Reuters) - U.S. gasoline consumption was flat in the first 10 months of 2018 as escalating motor fuel prices offset the impact of a strong economy and big employment gains. Flat-lining U.S. gasoline consumption combined with surging U.S. shale production and a slowing global economy to push the oil market towards surplus and explains the plunge in prices late last year.Gasoline consumption averaged 9.34 million barrels per day (bpd) between January and October 2018, which was slightly down from 9.36 million bpd in the same period in 2017.Full-year consumption is forecast to have declined by around 40,000 bpd, according to estimates from the U.S. Energy Information Administration ("Short-Term Energy Outlook", EIA, December 2018).Consumption has shown little or no growth since 2017 after four years of variable but strong gains between 2013 and 2016 ("Petroleum Supply Monthly", Energy Information Administration, December 2018).Fuel use has flattened off even as the rate of economic growth has accelerated to an annual rate of more than 3 percent and almost 5 million non-farm jobs have been created since the end of 2016.But stagnating gasoline consumption has been consistent with a sharp slowdown in the growth of traffic on the nation's roads in the last two years (https://tmsnrt.rs/2S6klHd).Traffic volumes surged between 2014 and 2016, with vehicle-miles travelled often rising at year-on-year rates of 2-3 percent or more, but slowed sharply in 2017 and 2018, with gains slowing to 1 percent or less.Traffic volume in the three months from September to November 2018 was just 0.3 percent higher than in the same period a year earlier ("Traffic Volume Trends" Federal Highway Administration, December 2018). In the last quarter of a century, traffic growth has been closely correlated with both the state of the economy and changes in the cost of fuel.While the economy has remained supportive, higher oil prices have been strongly negative for gasoline consumption.
Exxon OK's project to nearly double size of Texas refinery: sources (Reuters) - Exxon Mobil Corp has given final approval to an expansion that would nearly double the size of its 365,000 barrel-per-day (bpd) Beaumont, Texas, refinery, making it the largest in the United States, said two people familiar with the company’s plans. The largest U.S. oil producer, which has been considering a third processing unit at the plant since at least 2014, has authorized financing for equipment needed to convert shale crude from its West Texas oilfields into precursors for gasoline, diesel, jet fuel and other refined products. The authorization is the final step to begin building a third crude distillation unit (CDU) that would process between 250,000 and 350,000 bpd of light crude at the refinery located 87 miles (140 km) east of Houston. With a 250,000 bpd CDU, the plant’s total capacity would reach 615,644 bpd, placing it ahead of the nation’s largest, Motiva Enterprises’ 603,000 bpd refinery, in nearby Port Arthur, Texas. “It has been approved,” said one of the people familiar with the refinery expansion. Employees have been asked to keep the approval confidential, said the person, who could not be identified because of the restrictions. The company has not publicly disclosed the cost of the expansion, which is part of a $20 billion investment program outlined in 2017 to increase its U.S. Gulf Coast manufacturing over 10 years. Exxon spokeswoman Sarah Nordin said on Monday she had no updates on the status of the project. In October, she had confirmed that site preparation work had begun in advance of a final decision. Last October, Exxon has said construction on the project was expected to begin this year after a final investment decision, and estimated the work would be completed in 2022. Exxon aims to triple its daily crude production in the Permian Basin of West Texas and New Mexico to 600,000 barrels of oil equivalent (boepd) by 2025. Last year it agreed to form a joint venture with Plains All American Pipeline LP that would build a pipeline able to carry 1 million bpd of oil to its refineries in Baytown and Beaumont.
ExxonMobil, Plains, Lotus to proceed with 1 million b/d Permian crude pipe to feed Beaumont expansion— A 1 million b/d crude pipeline that would transport Permian Basin crude to the US Gulf Coast received the formal go-ahead from its backers and is expected online in the first half of 2021, according to a statement released Wednesday by partners ExxonMobil, Plains All American and Lotus Midstream. "The new common-carrier pipeline system will provide more than 1 million b/d of crude oil and condensate capacity and will be constructed from the Permian Basin in West Texas to the Texas Gulf Coast," they said. Plains, ExxonMobil and Lotus Midstream formed the Wink to Webster Pipeline LLC Joint Venture and have already ordered nearly 650 miles of domestically sourced 36-inch-diameter line pipe. Plains will be the operator of the line during the construction phase. The pipeline announcement was expected after ExxonMobil on Tuesday confirmed it was beginning construction at its 365,644 b/d Beaumont, Texas, refinery of a 250,000 b/d crude unit to run the light, sweet oil produced from its holdings in the Permian Basin, which would provide shipping commitments substantial enough to make the pipeline commercially viable. The pipeline will have origin points at Wink and Midland, Texas, and multiple destination points in the Houston area including Webster and Baytown, where ExxonMobil is currently expanding light sweet crude processing capacity at the 560,500 b/d refinery by about 60,000 b/d. Pipeline connectivity will also be provided to Texas City and Beaumont, the project's backers said. ExxonMobil's Beaumont crude unit expansion is expected to be completed by 2022. ExxonMobil in 2018 announced its "Growing the Gulf" initiative, which would expand the processing capacity of its three large US Gulf Coast refineries -- Baytown, Beaumont, and Baton Rouge -- of growing light, sweet crude production from its Permian Basin holdings. At that time, ExxonMobil said it expected to triple its Permian production to more than 600,000 b/d. Crude processing capacity is expected to increase by 17,000 b/d at the 502,500 b/d Baton Rouge refinery. The pipeline announcement did not divulge if the project would be combined with a similar project, the Permian Gulf Coast pipeline.
Two proposed pipelines to bring 1.3 million barrels of crude oil to Houston -- Two proposed pipeline projects could bring a combined 1.3 million barrels of crude oil and condensate from multiple shale plays to refineries and export terminals in Houston by 2021. Plains All American Pipeline of Houston and Exxon Mobil of Irving said Wednesday that the two companies finalized a joint venture with Lotus Midstream to develop the Wink-to-Webster Pipeline, a project to move 1 million barrels of crude oil and condensate per day from the Permian Basin of West Texas to Houston. Magellan Midstream Partners of Oklahoma and Dallas pipeline and storage terminal operator Navigator Energy Services are extending the open season to book capacity on their proposed Voyager Pipeline, a project to move 300,000 barrels of crude oil and condensate per day from storage terminals in Cushing, Okla. to refineries and export terminals in Houston. Spanning some 650 miles, the Wink-to-Webster Pipeline is a 36-inch-diameter pipeline, which analysts previously said carried a $2 billion price tag. Plains will lead the construction of the project and has already begun pre-construction activities. If approved by regulators, the pipeline could be in service by the first half of 2021. Magellan Midstream reported that the Voyager Pipeline received significant interest and that the extension provides these potential shippers additional time to finalize their commitments across other pipelines. Also expected to cost up to $2 billion, the proposed project is a 20- or 24-inch-diameter pipeline that will span 500 miles to connect Magellan's terminal in Cushing to the company's terminal in East Houston. If approved by regulators, the pipeline could be in service by late 2020.
Central Texas pipeline reignites fight over land rights - A fight over a pipeline is never only about the pipeline. It’s about the environment, property rights, public safety and a community’s sense of itself. Just such a fight is now brewing in the Texas Hill Country, where company Kinder Morgan plans to lay a part of its 430-mile natural gas Permian Highway Pipeline. The Houston-based company says the time is right for the project. An unprecedented drilling boom in West Texas means there’s more oil and gas coming out of the ground than companies can ship to market. The pipeline would carry natural gas to the Gulf Coast, where it can be sold domestically or exported. The quickest way there is through the Hill Country, including places like the Hershey Ranch in Gillespie County. The ranch, a 1,500-acre spread of rolling hills and weathered terraced fields, is dotted with trees, ponds and structures dating from the 1800s. If the pipeline is built underneath it, Kinder Morgan would also control about a 100-foot-wide swath of land above the pipeline to maintain it. “It will go right through the heart of the ranch,” says owner Andy Sansom. Sansom is a well-known conservationist, who once headed up the Texas Parks and Wildlife Department. He’s especially upset about the pipeline because the Hershey Ranch is private conservation land, where no development is supposed to occur. But, he says, his neighbors with more traditional properties don’t want the pipeline either. “There are few parts of our state that are as iconic as the Hill Country,” he says. “It’s very clear that the people who live out here see this as an assault.” The idea that the Hill Country may be too “iconic” for this pipeline is something you can expect to hear more of as the project gets underway. Opponents have already raised concerns over the potential environmental, aesthetic and public health impacts. Kinder Morgan says it’s willing to make small adjustments to the route to accommodate landowners. But the pipeline is coming.
America Needs More Oil And Natural Gas Pipelines – Forbes - Despite a 140% boom in U.S. crude oil production and a 50% jump in natural gas output since shale took flight in 2008, the midstream infrastructure to pipe this new supply around the country has simply not kept up. This is a major problem for us because pipelines are easily the safest and most economical way to transport energy. In addition, hardly “going away,” oil and gas will still supply the bulk of U.S. energy through at least 2050, according to just released modeling from the U.S. Department of Energy in the Annual Energy Outlook 2019.The Permian basin in West Texas, giving a third of all U.S. crude production, confronts a pipeline bottleneck from a surge of activity. Yet, most of this will be rectified as the build-out in our largest oilfield continues to catch up. After all, although stronger than you might think, the pipeline pushback in oily Texas from “environmental groups” is not as potent as in other states. In contrast, New York and the six New England states are really ground zero for our pipeline problem where “environmentalists” – despite significantly relying on oil and gas themselves in their daily lives – remain steadfast against new builds. Indeed, gas is increasingly being utilized in these anti-pipeline regions for generating both electricity and heat. In New England, for instance, gas has accounted for over half of all electricity: "New England's Known Need For More Natural Gas Pipelines." It is no wonder then that these anti-pipeline areas have 1) the highest energy and electricity prices, 2) fleeing high paying manufacturing jobs, and 3) great concerns over electric reliability in periods of high demand: "What Happens When You Don't Build Natural Gas Pipelines?" New York though might pose the biggest threat. Not just anti-pipeline, Governor Cuomo will not consider developing the state’s portion of the giant Marcellus shale gas play that has so benefitted Pennsylvania, Ohio, and West Virginia. The contradiction from The Empire State is again palpable: despite producing no gas itself, New York relies on gas for a leading 40% of its electricity.
Trio of earthquakes hit near Eagle Ford town of Three Rivers - The U.S. Geological Geological Survey has confirmed that a trio of earthquakes was recorded near the Eagle Ford Shale town of Three Rivers, including one whose epicenter was inside a state park. The first earthquake, a 2.6-magnitude tremor, hit in a rural area near Interstate 37 and FM 2040 at 7:30 p.m. Friday. A 2.7-magnitude earthquake hit another rural area just north of Interstate 37 and State Highway 72 at 10:53 p.m. Friday. The epicenter of a third earthquake, registered directly below a cove at the North Shore Unit of Choke Canyon State Park at 9:48 p.m. Saturday. Choke Canyon State Park is a popular destination for sports fishermen, campers and picnickers. Officials with the Texas Parks & Wildlife Department, the state agency that oversees the South Texas fishing spot, told the Houston Chronicle that park staff had no knowledge of the earthquake. Although area residents took to Facebook to talk about the tremors, the Live Oak County Sheriff's Office reported that dispatchers did not receive any calls about the earthquakes and that there were no reports of damage. Environmentalists, however, blame the earthquakes on saltwater disposal wells, which inject wastewater generated in the hydraulic fracturing process and other oil and natural gas activities deep underground. Regulations: Railroad Commission launches online tool for enforcement, inspection data Saltwater disposal wells are regulated by the Railroad Commission of Texas. A review of agency records show that there are more than 200 injection and disposal wells in Live Oak County. Railroad Commission officials told the Houston Chronicle that its regional office has received no complaints regarding the weekend earthquakes in the area.
Company to pay following crude oil spills in Texas, LA and OK - Years after three oil spills in three states, a company has to agree to pay up.Sunoco Pipeline L.P. will pay civil penalties, state enforcement costs and will implement corrective measures to resolve alleged violations of the Clean Water Act and state environmental laws under a proposed consent decree lodged on Jan. 30 in the U.S. District Court of the Western District of Louisiana. Sunoco will pay the United States $5 million in federal civil penalties for the Clean Water Act violations and pay Louisiana Department of Environmental Quality $436,274.20 for civil penalties and response costs to resolve claims asserted in a complaint.The company will take actions to prevent future spills.The incidents stem from allegations from Sunoco and Mid-Valley Pipeline Company crude oil spills in 2013, 2014 and 2015 in Oklahoma, Texas and Louisiana.“This settlement holds Sunoco and Mid-Valley accountable for the harms to the environment caused by their oil spills and requires Sunoco to improve its environmental safety compliance for the oil pipelines that it operates in Texas, Louisiana, and Oklahoma,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division, in a news release.“This excellent result shows how a strong federal and state partnership can bring about effective environmental enforcement to protect local communities in these states,” Bossert Clark said.In 2013, 550 barrels of crude oil was spilled in Tyler County Texas. In 2014 a spill of approximately 4,500 barrels were spilled in Caddo Parish near Mooringsport, Louisiana and a 2015 spill in Grant County, Oklahoma were 40 barrels were spilled. The Louisiana spill—the largest of the three—flowed to Tete Bayou, a tributary of Caddo Lake.The Texas spill affected Russell Creek, which flows to the Neches River; and in Oklahoma, the spill flowed into two creeks that connect to the Arkansas River. Only about half a mile of area was affected. The cause of all three spills were from pipeline corrosion.
New EPA policy would offer alternative to penalties for some oil, gas polluters - The Environmental Protection Agency’s (EPA) office of enforcement will soon unveil a new finalized audit policy that will offer significant new penalty reductions for the oil and gas industry, according to two internal memos obtained by The Hill.The New Owner Clean Air Act Audit Program, tailored specifically for oil and natural gas producers, will focus on offering more flexibility to new company owners who choose to self-audit their emissions and report any failures to meet EPA’s regulations, according to the December draft memos for the new policy.The policy originally was slated to be rolled out in late December but was delayed due to the partial government shutdown, according to an EPA source with knowledge."Policy finalization has been delayed; we can provide more details when we have a final policy to announce,” an EPA spokesperson said of the rule.The flexibilities include giving new owners of oil and gas companies nine months since the company is acquired to come forward to the EPA and announce any emissions issues they believe may exist. That’s an increase from the six months the agency first proposed in its original draft template of the rule.Companies would also be given 180 days from the date of discovery to correct the emissions issue. The previous draft gave companies 60 days. The policy proposal was first reported by The Hill and unveiled last April. The changes come after EPA’s Office of Enforcement and Compliance Assurance (OECA) received feedback from oil and gas industry players who thought the previous timeline was too burdensome.
ExxonMobil reports 90% increase in Permian shale production - — Fueled partly by a dramatic increase in Permian output, ExxonMobil announced Friday a 4% jump in liquids output in Q4 from the same quarter last year. ExxonMobil's net production of crude oil, natural gas liquids, bitumen and synthetic oil averaged nearly 2.35 million b/d in Q4, up from 2.25 million b/d in Q4 2017. US liquids production averaged 583,000 b/d in Q4, up from 525,000 b/d in Q4 2017, the company said."Permian unconventional production continued to ramp up in the fourth quarter, with production up more than 90% from the same period last year," the company said.For all of fiscal 2018, liquids production averaged about 2.27 million b/d, down slightly from 2017, when the company's output averaged about 2.28 million b/d.Including natural gas, ExxonMobil averaged production of 4.01 million boe/d in Q4, up from 3.99 million boe/d in Q4 2017.The company reported estimated earnings of $20.8 billion in 2018, up from $19.7 billion in 2017, an increase it attributed partly to higher natural gas prices.
Natural gas flaring in West Texas severely under-reported, satellite analysis shows - Oil and gas companies in West Texas’ Permian Basin burned off nearly twice as much natural gas they reported to regulators, according to an analysis of satellite data by an environmental advocacy group. Operators are required to report the amount of flaring, or burning of excess product, to the Texas Railroad Commission, the state agency that oversees the energy industry. In 2017, companies reported 55 billion cubic feet of flared natural gas. But an analysis performed on satellite data collected by the National Oceanic and Atmospheric Administration indicates that 104 billion cubic feet of flared gas may have been flared, according to the Environmental Defense Fund.The Environmental Defense Fund’s analysis suggests that operators burned away 4.4 percent of all natural gas produced in the Permian that year, valuing the lost gas at $322 million. S&P Global Market Intelligence, a research and data analysis firm, reached similar conclusions of severely under-reported flaring in a report published in October. The S&P Global analysis also used data from NOAA satellite scans, which analysts said are more accurate than reports companies file with regulators. Between 2012 and 2017, the analysis found, oil and gas companies in Texas reported only about half the volumes of gas burned compared to what the satellites showed. Greenhouse gases Burning associated gas, the raw natural gas that is a mixture of methane and other hydrocarbons, emits carbon dioxide and air pollutants such as nitrogen oxides and sulfur dioxide. Flaring has been found to be a significant contributor to U.S. greenhouse emissionsand pose a significant health risk for local communities and those who work in oil fields. Natural gas is a byproduct of oil production, and in booming West Texas, large volumes are being produced along with record amounts of oil. A lack of pipeline capacity has left energy companies with lots of natural gas with no place to go, according to S&P Global analysts, and provided an incentive to under report flaring to maintain high levels of crude production.
Water needed for hydraulic fracking has more than doubled - The amount of water needed for hydraulic fracturing operations has more than doubled in recent years and is slated to top 6 billion barrels in 2021, the consultancy Rystad Energy said in a note. It's a metric of the massive scale of the U.S. oil boom that has sent production to record levels. That's largely thanks to growth in shale formations — most notably the Permian Basin in Texas and New Mexico — where hydrocarbons are pried loose using high-pressure injections of water, sand and chemicals. A Rystad analyst said in the note that the industry will be able to get the water it needs as production grows and water demand soars with it. "This surge is driven by both increased activity and higher proppant intensity. But even with such steep growth, market concerns about sourcing challenges and bottlenecks appear to be minimal,” Rystad SVP Ryan Carbrey said in a statement. However, the report also warns of looming constraints for dealing with wastewater that comes out of wells. "With produced water in the Permian set to increase by a third by 2021 there will be local disposal constraints, but at a macro level spare disposal capacity will remain," it states. The volumes of water needed to support the growth of shale production has long been an ecological concern. A study by Duke University researchers found that water use per well in major shale oil-and-gas basinshas risen by as much as 770%. Yesterday, the Energy Information Administration forecast that oil production from shale formations would rise by 62,000 barrels per day in February to reach 8.18 million barrels per day. Via S&P Global Platts, the forecast rise of 23,000 barrels per day in the Permian basin "would be the lowest rate of monthly growth the EIA has forecast for the Permian since September 2016."
New Study Links Fracking To Unsustainable Water Use - Everybody is talking about a new report that credits the US oil and gas fracking boom with a 770% increase in water consumption over the past few years. The sharp increase is certainly eye-catching but it’s not exactly a surprise. The force of the water-energy nexus is strong within the fossil fuel industry, especially when the idea is to force massive volumes of water into underground rock formations. . The Avner Vengosh Research Group at Duke University’s Nicholas School of the Environment is behind it, and that should be one tipoff that this particular study is particularly significant.The team has been investigating the impact of fracking on water resources since the US fracking boom began gathering steam and they have assembled quite a body of research.The new study builds on earlier research, which suggests that fracking adds another layer of stress in areas that are already experiencing water resource issues.That stress doesn’t necessarily have to directly impact public health or the environment. It could also impact economic activity.Here’s the money quote: The amount of water used per well for hydraulic fracturing surged by up to 770 percent between 2011 and 2016 in all major U.S. shale gas and oil production regions, a new Duke University study finds.The volume of brine-laden wastewater that fracked oil and gas wells generated during their first year of production also increased by up to 1440 percent during the same period, the study shows.If this rapid intensification continues, fracking’s water footprint could grow by up to 50-fold in some regions by the year 2030 — raising concerns about its sustainability, particularly in arid or semi-arid regions in western states, or other areas where groundwater supplies are stressed or limited. In other words, the study could provide communities with a fact-based platform for limiting or prohibiting fracking, even if there is no evidence of water contamination.
The intensification of the water footprint of hydraulic fracturing - Unconventional oil and gas exploration in the United States has experienced a period of rapid growth, followed by several years of limited production due to falling and low natural gas and oil prices. Throughout this transition, the water use for hydraulic fracturing and wastewater production in major shale gas and oil production regions has increased; from 2011 to 2016, the water use per well increased up to 770%, while flowback and produced water volumes generated within the first year of production increased up to 1440%. The water-use intensity (that is, normalized to the energy production) increased ubiquitously in all U.S. shale basins during this transition period. The steady increase of the water footprint of hydraulic fracturing with time implies that future unconventional oil and gas operations will require larger volumes of water for hydraulic fracturing, which will result in larger produced oil and gas wastewater volumes. The environmental impacts of a fossil fuel–powered economy have led many nations across the world to begin developing greener energy and transportation solutions. In particular, the water footprint of fossil fuel exploration and electricity production has been projected to have major environmental impacts. It has been estimated that global water withdrawal for energy production constitutes 15% of the world’s total water consumption (1). Rapidly diminishing global water resources due to population growth and climate change have further exacerbated energy dependence on water availability, particularly in water-scarce regions (2–5). The beginning of the 21st century marks a special era with respect to global energy and water resources. The development of new drilling technologies and production strategies such as horizontal drilling and hydraulic fracturing has significantly improved the production of natural gas and oil by stimulating fluid flow from impermeable shale rocks previously not considered viable energy sources. Since the mid-2000s, these developments have spurred exponential growth of unconventional gas and oil well drilling across the United States and are spreading now to other parts of the world (Figs. 1 and 2) (4, 6–10). The rise of unconventional energy development has generated public debate on its environmental implications (11–16), especially with respect to both water availability and quality (2, 4, 8, 17–21).
Is The Permian Bull Run Coming To An End? - The bad news coming out of the shale oil fields of America could all be put down to slumping oil prices. That is certainly a big factor. But as investment professionals like to say, when the tide goes out, we all find out who's been skinny-dipping. The pattern of negative news from shale country is not just related to price, however. Oil production, it seems, is being overstated industry-wide by 10 percent and 50 percent in the case of some companies, according to The Wall Street Journal.The CEO of one of the largest players in the industry, Continental Resources, predicted that growth in shale oil production could fall by 50 percent this year compared to last year. In reality, we should expect worse as the industry for obvious reasons tends to exaggerate its prospects.The place where the damage to investors has become severe is in private equity firms who hold a large portion of the shale oil industry's high-yield debt. The plan for the firms was always to unload the debt on somebody else when better opportunities presented themselves. But the firms overstayed their welcome and are having a hard time even finding a bid in the market for these bonds.With the big Wall Street players now questioning the value of their existing investments in shale oil, the industry is finding it hard to raise money. Not a single bond sale has come off since November in an industry which must continuously raise capital to survive.To add to the problems, the future of U.S. shale oil production seems to be in the Permian Basin in Texas which has been providing the lion's share of oil production growth for the entire country. But ongoing drought in an already arid West Texas has raised doubts about whether the Permian will have enough water to meet all the demand for fracking new wells.Because of the rapid declines in the rates of production from shale wells, companies must first drill enough new wells to offset the loss of production from previous wells—a task akin to walking up the down escalator.This was not such a difficult task when the shale boom was just beginning. But with the huge increase in the number of operating wells, companies are having to spend more than half of their capital budgets on simply replacing lost production before drilling wells that add to production. That number is expected to reach 75 percent by 2021. At some point it could reach 100 percent. (For this reason some analysts refer to shale oil development as a Ponzi scheme.) With rig counts dropping; capital expenditures likely to be cut in the face of low prices; and more and more of that budget being used simply to replace existing production, it's possible that the death spiral long anticipated by the industry's critics has arrived.
Cleanup underway after northern Oklahoma crude oil spill - Crews are working to contain thousands of gallons of crude oil that leaked into a creek in northern Oklahoma. Oklahoma Corporation Commission spokesman Matt Skinner said Wednesday oil extends for about 5 miles (8 kilometers) in Black Bear Creek in rural Garfield County. Skinner says the spill was reported Tuesday by Great Salt Plains Midstream of Oklahoma City, a pipeline operator. The oil apparently leaked from an open valve on a tank. Skinner says the cause is under investigation. He says about 750 barrels, or 31,500 gallons (119,240 liters), leaked and that crews are "working around the clock" to remove the oil. Skinner says there's no threat to those people who live in the area. A representative of Great Salt Plains Midstream didn't immediately return a call seeking comment.
Broomfield Homeowners Sue To Stop "Forced Pool" Oil Drilling Under Their Land - A group of Broomfield homeowners on Wednesday filed a lawsuit that challenges the nearly century-old practice that allows oil and gas companies to drill under their property using “forced pooling.” Forced pooling gives oil and gas companies the right to drill — without property owners’ consent — as long as the company makes a “reasonable” offer and at least one homeowner signs the lease. With that sole thumbs up, the company can then ask the Colorado Oil and Gas Conservation Commission, the state body regulating the industry, to “pool in” the remaining land — over the objections of other owners. More than half the states in the country have some variation of this law, which originated in the 1930s as a way to insure that a property owner who didn’t want oil and gas rigs on his property could not deprive his neighbor of the right to develop them. Once the pooling happens, non-consenting property owners have fairly little recourse. By refusing to sign the forced-pool lease, homeowners can be punished: they receive a limited royalty and are required to pay up to three times what consenting owners have to shell out to cover parts of the fracking project. The lawsuit was initiated by the Wildgrass Oil and Gas Committee, a group of anti-fracking activists out of Broomfield. It represents more than 900 local residents who WOGC says were forcibly pooled into one parcel, according to a permit application that Extraction Oil & Gas filed with the COGCC. Extraction Oil & Gas officials did not respond to a request for comment from The Independent. But the Colorado Oil and Gas Association said the practice has long legal precedent and that land owners have ample opportunity to decide if they want to allow drilling.
Colorado court asked to reconsider ruling in oil-gas case (AP) — The Colorado Supreme Court was asked Thursday to reconsider its decision in an oil and gas lawsuit filed by Hispanic and Native American plaintiffs because a disciplinary panel found that a lower court judge who had a role in the case used a racial slur. The request asks the court to revisit its Jan. 14 ruling against the plaintiffs, who wanted oil and gas regulators to make health and environmental protection their top priority in setting rules for the industry. The Supreme Court ruled that state law does not require regulators to do that. In their new filing, the plaintiffs said the Supreme Court relied in part on an opinion written by Colorado Court of Appeals Judge Laurie Booras, who resigned this month after a disciplinary panel recommended she be removed from the court. The panel said Booras had written an email using racial slurs and demeaning nicknames for a Native American woman and a Hispanic woman. The Hispanic woman was a fellow Court of Appeals judge. The panel said Booras’ language “creates a double-barreled appearance of impropriety” and undermined public trust in her impartiality. The plaintiffs say Booras’ comments reflect “racism, bias and a lack of impartiality.” The disciplinary panel also said Booras told a third party that she intended to write an opinion against the plaintiffs, a violation of confidentiality rules. Booras did not immediately respond to a phone call and email seeking comment Friday. The Colorado Oil and Gas Conservation Commission, which regulates the industry and was a defendant in the lawsuit, had no immediate comment. The state attorney general’s office declined comment. The original lawsuit argued that state law requires the oil and gas commission to ensure energy development does not harm people’s health or the environment. The six young plaintiffs asked the commission in 2013 to require those protections before issuing any drilling permits. The commission refused, saying the law required it to balance health and environmental concerns with other factors. The Supreme Court agreed with the commission.
Weld County oil and gas spill report for Jan. 27 - The following spills were reported to the Colorado Oil and Gas Conservation Commission in the past two weeks. Information is based on Form 19, which operators must fill out detailing the leakage/spill events. Any spill release that may impact waters of the state must be reported as soon as practical..
- • NOBLE ENERGY INC, reported Jan. 18 a historical well spill in Evans, near Hawk Drive and 27th Avenue. Between one and five barrels each of oil, condensate and produced water spilled. Crews found historical soil impacts during plugging and abandonment. About 30 cubic yards of soil was excavated and taken to the Ault Landfill operated by Waste Management.
- • SRC ENERGY INC, reported Jan. 17 a historical tank battery spill in Windsor, south of Weld County roads 63 3/4 and 23. Less than five barrels of produced water spilled. Waters of the state were impacted or threatened. Crews found the spill during abandonment.
- • PDC ENERGY INC, reported Jan. 16 a tank battery spill about 1 mile southeast of Greeley, near Weld roads 54 1/2 and 45. An unknown amount of more than five barrels of oil spilled. Crews found the spill inside secondary containment at the compressor unit.
US oil lease near sacred park pushes forward (AP) — U.S. land managers will move forward in March with the sale of oil and gas leases that include land near Chaco Culture National Historical Park in New Mexico and other areas sacred to Native American tribes. The sale comes as Democratic members of Congress, tribal leaders and environmentalists have criticized the federal Bureau of Land Management for pushing ahead with drilling permit reviews and preparations for energy leases despite the recent government shutdown. With limited staff over the last month, the critics complained that they were locked out of the process because the agency didn’t release any information about the sale. They also questioned whether the agency would be able to adequately review the land that’s up for bid and whether it would consider protests to the move. U.S. Sen. Tom Udall told The Associated Press in an email that he’s concerned about the latest attempt to lease potentially culturally significant land in New Mexico without a more comprehensive plan in place. “It’s a mistake that while critical public services were shuttered for 35 days during the government shutdown, BLM still moved forward with this opaque process,” the New Mexico Democrat said. Agency spokeswoman Cathy Garber said officials decided to push back the lease sale by a couple of weeks to accommodate a public protest period that was delayed because of the shutdown. The agency quietly confirmed on its website that it would accept comments starting Feb. 11 and that the sale was scheduled for March 28. Depending on the outcome of the protests, it’s possible for the agency to put off or withdraw nine parcels of land that are within 10 miles (16 kilometers) of Chaco, a world heritage site with massive stone structures, kivas and other features that archaeologists believe offered a religious or ritualistic experience. Accessible only by rough dirt roads, Chaco takes effort to reach, and supporters say they want to protect the sense of remoteness that comes with making the journey. For tribes, the fight is centered on preserving what remains of a ceremonial and economic hub that dates back centuries. In all, more than 50 parcels in New Mexico and Oklahoma will be up for bid.
Feds to Sell Even More Public Land for Fracking Near Sacred Park -The U.S. Bureau of Land Management (BLM) is pushing ahead with the sale of oil and gas leases on land outside of Chaco Culture National Historical Park and other sites revered by Native American tribes, The Associated Press reported.The latest listing—which quietly appeared on the BLM website not long after the government reopened after the shutdown—comes about a year after then-Interior Secretary Ryan Zinke postponed a lease sale in the Greater Chaco Region in response to intense public pressure over cultural and environmental concerns.BLM will open a protest period for comments from Feb. 11 through Feb. 20 for a sale scheduled for March 28, according to the agency's notice. More than 50 parcels in New Mexico and Oklahoma will be on the auction block. During the record-long government impasse, Democrats, environmentalists and others fiercely criticized theTrump administration for moving ahead with drilling permits on public lands while most other agencies were shut."It's a mistake that while critical public services were shuttered for 35 days during the government shutdown, BLM still moved forward with this opaque process," Sen. Tom Udall, Democrat of New Mexico, told the AP about the latest lease.The AP noted that it is possible for BLM to withdraw the latest land sales depending on the outcome of the protest period.For years, environmental groups, tribes and other opponents have raised flags about fracking encroaching on and threatening Chaco Canyon, a major center of ancient Pueblo culture and a UNESCO World Heritage Site. As it happens, the park sits in the central San Juan Basin in northwestern New Mexico that's booming with shale gas extraction. Roughly 90 percent of the Great Chaco Region is already leased for oil and gas development, but more fossil fuels lie beneath those lands. The New Mexico BLM wants to sell parcels that are close or just along the park's 10-mile, no drilling buffer zone.
Navajos Speak out on the Cultural and Biochemical Dangers of Fracking around Chaco Canyon - As a member of the Navajo Tribe, the majority of my 29 years have been spent within 15 miles of one of America's truly most sacred indigenous sites, Chaco Canyon, especially sacred to the Hopi and other pueblo groups, which descended from the Anasazi. This sacred site was constructed more than 900 years ago, as primarily a repository and residence for an agricultural priesthood that used the archeo-astronomical observatory called the Sun Dagger to predict the solstices, and thus the best time for planting. If you drew a triangle between Crownpoint, Farmington, and Cuba, New Mexico, you would be looking at the great Chaco Canyon area, which the Trump administration turned over to the Bureau of Land Management to in turn make available to large energy companies for fracking. In northwestern New Mexico's high desert lie the threatened ruins of Chaco Canyon containing the remnants of kivas, ancient roads and sacred places built a millennium ago by indigenous people proficient in architecture, agriculture, astronomy and the arts. This is at risk from the Trump administration in allowing oil-and-gas drilling. In the early 20th century, when archaeologists became alarmed by the plunder and damage to some of these accessible and fragile sites, Chaco Canyon was the catalyst for Congress's protection by authorizing the president to declare them national monuments. Theodore Roosevelt signed the Antiquities Act in 1906, and in 1907 he invoked it to declare Chaco one of the first national monuments deserving the protection of the United States government. Chetro Ketl, another of the large structures known as great houses that were built by indigenous inhabitants of Chaco Canyon. The surrounding area is the domain of the Bureau of Land Management and the Bureau of Indian Affairs whose missions do not emphasize protecting historically significant sites. The 2 agencies previously agreed to defer all new drilling leases within a 10-mile radius of Chaco until consultations could be completed with affected communities and tribes. The B.L.M. district manager says the bureau plans to lease 26 parcels of land in the area.
TransCanada seeks water permits for Keystone XL construction -- South Dakota regulators are considering several water-permit applications for the proposed construction of the Keystone XL crude-oil pipeline. TransCanada, the Canadian company seeking to build the pipeline, recently applied for three permits to withdraw water from the Cheyenne, Bad and White rivers in western South Dakota. Additionally, at least two sets of western South Dakota landowners recently applied to use existing wells as backup water supplies for pipeline construction workforce camps. In the three applications from TransCanada, the sum of the requested water withdrawals is about 167 million gallons annually. The applications say the water would be used during the construction of the pipeline for dust control, horizontal-directional drilling, pump-station construction and hydrostatic testing of the pipeline. The chief engineer of the state Department of Environment and Natural Resources has recommended approval of the permits, which are scheduled to be considered by the state Water Management Board at 1 p.m. March 6 in the Joe Foss Building at Pierre. The hearing will be automatically delayed for at least 20 days if anyone files petitions against the applications and asks for a delay by Feb. 25.
Law officers respond to suit over pipeline protester injury - — Law enforcement officials in North Dakota say they aren’t to blame for a severe arm injury a New York City woman sustained while protesting the Dakota Access oil pipeline and that public statements they made blaming her weren’t aimed at damaging her character. They’re asking a federal judge to throw out a lawsuit that Sophia Wilansky filed in November seeking millions of dollars in damages for alleged excessive force, assault, negligence, emotional distress and defamation. Defense attorneys argue in court documents filed this week that Wilansky has no plausible evidence that her civil rights were violated. Wilansky was injured during a violent November 2016 clash between protesters and police during the unsuccessful months-long protest in southern North Dakota against the $3.8 billion pipeline. Texas-based Energy Transfer Partners built it to move North Dakota oil to a shipping point in Illinois, which it began doing in June 2017. Wilansky, 21 at the time, suffered a left arm injury in an explosion and has since had five surgeries. Protesters allege the blast was caused by a concussion grenade thrown by officers, but police maintain it was caused by a propane canister that protesters rigged to explode. Who is right is still unknown. Wilansky last November sued local and state law enforcement officials and Morton County in federal court, alleging that an unknown law officer threw a flashbang device directly at her, and that officers laughed rather than help her as she lay on the ground in agony. Wilansky also says law enforcement made untrue and defamatory public statements about her allegedly carrying an explosive device.
How Police, Private Security, and Energy Companies Are Preparing for a New Pipeline Standoff - Minnesota police have spent 18 months preparing for a major standoff over Enbridge Line 3, a tar sands oil pipeline that has yet to receive the green light to build in the state. Records obtained by The Intercept show that law enforcement has engaged in a coordinated effort to identify potential anti-pipeline camps and monitor individual protesters, repeatedly turning for guidance to the North Dakota officials responsible for the militarized response at Standing Rock in 2016.Enbridge, a Canada-based energy company that claims to own the world’s longest fossil fuel transportation network, has labeled Line 3 the largest project in its history. If completed, it would replace 1,031 miles of a corroded existing pipeline that spans from Alberta’s tar sands region to refineries and a major shipping terminal in Wisconsin, expanding the pipeline’s capacity by hundreds of thousands of barrels per day.The expanded Line 3 would pass through the territories of several Ojibwe bands in northern Minnesota, home to sensitive wild rice lakes central to the Native communities’ spiritual and physical sustenance. Given that tar sands are among the world’s most carbon-intensive fuel sources, Line 3 opponents underline that the pipeline is exactly the kind of infrastructure that must be rapidly phased out to meet scientists’ prescriptions for mitigating climate disasters.The Line 3 documents, which were obtained via freedom of information requests, illustrate law enforcement’s anxiety that pipeline opponents could galvanize support on a scale similar to the Dakota Access pipeline struggle, which drew thousands of protesters to the Standing Rock Sioux reservation in southern North Dakota. A police response like the one in North Dakota is a significant concern for Line 3 opponents. At Standing Rock, law enforcement used water cannons, rubber bullets, armored personnel carriers, and sound cannons in an operation that resulted in serious injuries. Aided by private intelligence and security firms working for the pipeline, they gathered information on protesters via aerial surveillance, online monitoring, embedded informants, and eavesdropping on radio signals. In a time of growing resistance to fossil fuel industries, the public-private partnership served as a chilling example of law enforcement agencies acting as bulwarks of the oil industry.
L.A. Neighborhood Learns About Methane Blowout a Week After It Happened - Residents, lawmakers and environmentalists from a seaside community in Los Angeles County are questioning why it took a whole week for government officials to inform them of a well blowout that sprayed natural gas and other fluids nearly 60 feet into the air for several minutes. On Jan. 11, hotel construction workers in a populated area in Marina del Rey dug into an abandoned, 1930s-era oil well, causing an eruption of mainly methane, heavy abandonment mud and water. Video footage shows the fluids shooting high into the sky, and a worker rappelling away to avoid injury. The oil well was last sealed in 1959 and was in the process of being re-sealed before the release. But government officials did not notify the public about the incident for at least a week, LAist reported, prompting major concern from local residents and L.A. City Councilman Mike Bonin, who said on Facebook that "the site is immediately across the street from the homes of several hundred City residents I represent." "I am particularly concerned at the lack of notification to neighbors, and at continued risks of leaks due to a potential lack of structural integrity of the well, which state officials said was a 'serious concern.' This incident also raises concerns about other old and abandoned wells in the area," he added. On Jan. 18, the California State Department of Oil Gas & Geothermal Resources (DOGGR) issued an emergency order to bring the well under control, to permanently plug the well and to investigate why it occurred. The statement noted that the Jan. 11 blowout was a threat to life, health, property and natural resources. "Because of the serious concerns about the structural integrity of the well and the sensitive location of the well, efforts to secure the site and properly plug and abandon the well must be undertaken without delay," DOGGR stated.
Iconic landscapes threatened by drilling and fracking proposal - The Bakersfield Californian’s Jan. 15 story (“'Overwhelming' opposition to oil activity may present challenge to local industry”) about public opposition to a Bureau of Land Management (BLM) proposal to open over one million acres of federal land and mineral estate to new oil drilling and fracking demonstrates just how unpopular the proposal is in Kern County and throughout central California. Almost 5,000 acres of land within one mile of Sequoia National Park are listed as “open” for fossil fuel leasing under the BLM’s proposal. This would be new drilling and fracking on federal land along the park’s boundary — an area where there’s currently no oil development. The plan could also open over 2,000 acres near the southern entrance to Yosemite National Park. The agency’s plan would allow oil and gas leasing of a combined 44 square miles of federal land along the boundaries of the Carrizo Plain and Giant Sequoia National Monuments near Bakersfield. Both monuments only recently survived an attempt by the Trump administration to shrink or eliminate them.Over 240 square miles of land along the boundaries of four national forests — Sequoia, Sierra, Inyo and Los Padres — would be open to leasing as well. Many of these areas are directly adjacent to protected wilderness areas. To top that off, at least nine parcels of land overlapping the world-famous Pacific Crest Trail would also be open to oil and gas development under the proposal.The plan would also open over 70 square miles of land in and around national wildlife refuges and state ecological reserves to leasing, jeopardizing important habitat for many threatened, endangered and rare plants and animals. Areas such as Bitter Creek National Wildlife Refuge and the Bakersfield Cactus, Canebrake and Carrizo Plains Ecological Reserve are at risk of being opened to drilling and fracking.The plan could even threaten Bakersfield’s water supply. Approximately 87 square miles surrounding Lake Isabella — one of the city’s primary sources of drinking water — would be open to drilling and fracking leases under the plan. Not only would this have major implications for Bakersfield residents, much of the leasing in the Lake Isabella area would be in and around neighborhoods.
King County Council approves 6-month moratorium on major fossil-fuel facilities - The King County Council on Monday approved a six-month moratorium on building or expanding major fossil-fuel infrastructure, joining other local governments in the Northwest with similar measures that aim to use local zoning laws to restrict fossil-fuel pipelines, storage facilities and other infrastructure.The ordinance, introduced by Councilmember Dave Upthegrove, disallows permitting for fossil-fuel projects in unincorporated King County. It also directs the county executive’s office to produce a survey of existing facilities, study those facilities’ impacts on communities, analyze the existing regulations that apply to them, recommend changes to regulations and permitting, and evaluate county-owned facilities for health impacts. The ordinance also declares a state of emergency.“Reducing the pollution that causes climate change is quite possibly the greatest moral imperative facing my generation,” said Upthegrove. “Our action makes it clear, here in King County, our future is not fossil fuels but a clean-energy future.” The moratorium is fairly limited. The ordinance does not apply to gas stations or other fossil-fuel products sold directly to consumers. It does not disallow existing infrastructure or directly address rail lines or pipelines, w hich are regulated by the federal government. It excludes fuel storage for airports, marine servicing facilities and railyards.
US Oil and Gas Production to Outpace Russia and Saudi Arabia by 2025 - U.S. oil and gas production is expected to exceed the combined production from Russia and Saudi Arabia by 2025, according to research firm Rystad Energy. Rystad expects U.S. liquids production – such as crude oil, lease condensate and plant natural gas liquids – to surpass 24 million barrels per day over the next six years, beating out Russia and Saudi Arabia combined. “The United States, having regained its position as the world’s top liquids producer in 2014, is poised to accelerate into a league of its own over the next six years and eclipse the collective output of its two closest rivals by 2025,” said Rystad Energy partner Artem Abramov. The growth in U.S. liquids production will be fueled by major shale basins such as the Permian. In the past, the United States, Russia and Saudi Arabia have juggled among each other which is the top of the global list of liquid producers. However, the U.S. market-driven oil activity and production has built a great deal of momentum for the country. Abramov added that as long as average prices stay above $50, U.S. production is expected to remain positive.
New US oil and gas drilling to unleash 1000 coal plants' worth of pollution by 2050 - Amid mounting calls to phase out fossil fuels in the face of rapidly worsening climate change, the United States is ramping up oil and gas drilling faster than any other country, threatening to add 1,000 coal plants’ worth of planet-warming gases by the middle of the century, according to a report released Wednesday.By 2030, the U.S. is on track to produce 60 percent of the world’s new oil and gas supply, an expansion at least four times larger than in any other country. By 2050, the country’s newly tapped reserves are projected to spew 120 billion metric tons of carbon dioxide emissions into the atmosphere.That would make it nearly impossible to keep global warming within the 2.7 degrees Fahrenheit above pre-industrial averages, beyond which United Nations scientists forecast climate change to be catastrophic, with upward of $54 trillion in damages.The findings ― from a report authored by the nonprofit Oil Change International and endorsed by researchers at more than a dozen environmental groups ― are based on industry projections collected by the data service Rystad Energy and compared with climate models used by the United Nations’ Intergovernmental Panel on Climate Change (IPCC), the world’s leading climate research body.The report casts a new light on the impact of the U.S. fracking boom and calls into question the Trump administration’s stance that China, which surpassed the U.S. as the world’s largest emitter of carbon dioxide in 2007, remains the biggest impediment to halting warming.“The United States is moving further and faster to expand oil and gas extraction than any other country,” said Kelly Trout, the report’s lead author and a senior research analyst at Oil Change International. “We need to be transitioning off oil and gas, and the United States dumping huge amounts of dirty oil on the world market is incompatible with effectively and equitably addressing climate change.”
Trouble In Paradise For U.S. Frackers - Forecasters project a large increase in U.S. oil production over 2019. The size of this increase ranges from four hundred and twenty thousand barrels per day (Citibank) to 1.7 million barrels per day (OPEC). The most recent forecast, issued January 18 by the IEA, sees an increase of almost eight hundred thousand barrels per day. (Figure 1 presents the production history and forecast from the EIA’s latest Short-Term Energy Outlook.) The output increase is primarily associated with the rise in production in the key onshore provinces where fracking occurs: Anadarko, Bakken, Eagle Ford, Niobrara, and Permian. The optimism expressed in these forecasts is understandable when considering just how spectacular the production surge from these areas has been.This continued expansion and the realization of these optimistic forecasts, however, could be threatened by the collapse of fracking’s silent companions: oil future buyers. Reuters reported recently on the demise of several energy hedge funds in 2018. One commentator noted the “massive decline in the number of funds and no replacements.” He even went so far as to suggest that there had been “a near ‘extinction event’ in commodities hedge funds.” The article notes that the number of hedge funds focused on oil or gas declined to 179 in 2018 through September from 194 in 2016. The authors added that many funds lost money in 2018 because they placed “increasingly large bets on the rally continuing” through the end of 2018. They were harshly punished when prices fell from $85 to $50 per barrel.The decline in speculative interest in oil will probably create a serious problem for some independent producers because these firms need to hedge some or all incremental output against price declines. Declining interest in oil will raise the cost of hedging, possibly putting it out of reach of some firms. This, it can be argued, is fracking’s Achilles’ heel. The frackers’ problems will be compounded by continued demands that producers pay dividends and return capital. As the various investors quoted by Bethany McLean in Saudi America explained, the fracking business has rarely if ever been cash-flow positive. The consequence could be stagnation or even a decline in U.S. production from end-December 2018 levels by the close of 2019.
Trump's Price Policies Hurting US Shale Activity - With oil prices around the mid-50s, more than three quarters of U.S. shale E&P companies are unable to cover capital spending from operating cash flow. Because, as Rystad Energy ShaleWellCube notes, the well-head break-even prices for 2018 were on average too low for comfort at Eagle Ford $47.68; Bakken at $44.13; $42.76 in the Permian Midland and $37.94 in Permian Delaware. The decline in U.S. West Texas Intermediate (WTI) crude futures from a near four-year high of $76.90 Oct. 3, 2018 to a one-year low of $53.76 Jan. 18 has hit the over-leveraged independents hard. In addition, the industry faces rising competition if President Trump expands drilling rights in Federal lands and offshore. The decline of more than a third in U.S. West Texas Intermediate (WTI) crude futures since the autumn owes much to record output from Saudi Arabia and Russia, a response to rising oil prices and encouragement from the President. On Nov. 21, President Trump publicly praised Saudi Arabia and encouraged the downward price trend, saying, “let’s go lower,” broadcaster CNBC reported. Meanwhile, thanks to gushing oil wells in the Permian shale basin, the United States became the world’s largest crude producer at 11 million barrels a day, according to the EIA. Nevertheless, December’s OPEC, Russia, and Kazakhstan meeting formally agreed to cut output from January by 1.2 million barrels a day (MMbpd) rather than the widely expected 1.4 MMbpd needed to rebalance supply and demand. In practice, OPEC’s output fell by 751,000 barrels per day to 31.6 during December with Saudi Arabia cutting 468,000 barrels per day. Brent crude price responded, rising to $62.70 in January. It is rumored that the United States' grant of waivers to eight major customers of Iranian oil eroded Saudi support for lower oil prices. A more likely explanation is that many OPEC members need higher oil prices. For example, Saudi Arabia needs at least $73 a barrel to balance its budget, according to the IMF, and possibly as much as $85 a barrel to finance its Vision 2030 Plan. One thing is clear, the actions of OPEC and friends to cut back output this year could be good news for U.S. shale frackers as crude prices rise, trade tensions ease and world demand for crude holds up—but it could be disappointing for President Trump.
Has U.S. shale oil entered a death spiral? -- The bad news coming out of the shale oil fields of America could all be put down to slumping oil prices. That is certainly a big factor. But as investment professionals like to say, when the tide goes out, we all find out who's been skinny-dipping. The pattern of negative news from shale country is not just related to price, however. Oil production, it seems, is being overstated industry-wide by 10 percent and 50 percent in the case of some companies, according toThe Wall Street Journal. The CEO of one of the largest players in the industry, Continental Resources, predicted that growth in shale oil production could fall by 50 percent this year compared to last year. In reality, we should expect worse as the industry for obvious reasons tends to exaggerate its prospects.The place where the damage to investors has become severe is in private equity firms who hold a large portion of the shale oil industry's high-yield debt. The plan for the firms was always to unload the debt on somebody else when better opportunities presented themselves. But the firms overstayed their welcome and are having a hard time even finding a bid in the market for these bonds. To add to the problems, the future of U.S. shale oil production seems to be in the Permian Basin in Texas which has been providing the lion's share of oil production growth for the entire country. But ongoing drought in an already arid West Texas has raised doubts about whether the Permian will have enough water to meet all the demand for fracking new wells. Because of the rapid declines in the rates of production from shale wells, companies must first drill enough new wells to offset the loss of production from previous wells—a task akin to walking up the down escalator. This was not such a difficult task when the shale boom was just beginning. But with the huge increase in the number of operating wells, companies are having to spend more than half of their capital budgets on simply replacing lost production before drilling wells that add to production. That number is expected to reach 75 percent by 2021. At some point it could reach 100 percent. (For this reason some analysts refer to shale oil development as a Ponzi scheme.) With rig counts dropping; capital expenditures likely to be cut in the face of low prices; and more and more of that budget being used simply to replace existing production, it's possible that the death spiral long anticipated by the industry's critics has arrived.
The Oil Shock That Never Was-- Three years ago, influential figures in the oil industry were sounding a clear warning: prices were too low, investment was collapsing and by the end of the decade the world would face a shortage. In reality, the market today is looking at several more years of plenty, so much so that OPEC is beginning its third year of production cuts just to prevent a surplus. “We’re in an age of abundance,” said Ed Morse, head of commodities research at Citigroup Inc. in New York. “A supply crunch is not likely at all.” So what happened? Oil’s biggest slump in a generation earlier this decade forced companies to slash spending, leading to a flurry of warnings that there wouldn’t be enough growth in oil supplies to meet rising demand and also offset production lost from aging fields. Investment in oil and gas production collapsed by about $350 billion, or more than 40 percent, from 2014 to 2016 -- the sharpest contraction since the 1980s -- after crude fell from over $120 a barrel to less than $30, according to the International Energy Agency. The number of new projects approved in 2017 dwindled to the lowest in 70 years, the Paris-based agency said. In November 2015, the IEA cautioned that supply growth outside OPEC would grind to a halt by 2020. Three months later it was ringing “alarm bells” for a coming crisis. Total SA Chief Executive Officer Patrick Pouyanne foresaw a shortfall of as much as 10 million barrels a day, about the volume Saudi Arabia was pumping at the time. The concerns were echoed across the industry, from Royal Dutch Shell Plc executives to hedge fund veteran Andy Hall. Instead, supply has turned out to be plentiful. The U.S. is estimated to produce about 12 million barrels a day of crude this year, a level it was earlier forecast to reach only in 2042. Russia has raised output to a record and Iraq’s is near unprecedented levels. Brazil is set to pump at the fastest pace in at least 15 years in 2019, according to the IEA. Bank of America Corp. estimates three-quarters of non-shale projects over the next five years will be profitable at just $40 oil, bringing new crude from the North Sea to Guyana even if prices stay low. These have kept benchmark Brent near $60 a barrel, despite a brief surge to a four-year high above $86 in October as American President Donald Trump’s sanctions against Iranian exports threatened to disrupt the market.
How the Peak Oil Story Could Be “Close,” But Not Quite Right - Gail Tverberg - Fossil fuel producers tend to extract the fuels that are easiest to extract first. Over time, even with technology changes, this tends to lead to higher extraction costs for the remaining fuels. Peak oilers have been quick to notice this relationship.The question that then arises is, “Can these higher extraction costs be passed on to the consumer as higher prices?” Peak oil theorists, as well as many others, have tended to say, “Of course, the higher cost of oil extraction will lead to higher oil prices. Energy is essential to the economy.” In fact, we did see very high oil prices in the 1974-1981 period, in the 2004-2008 period, and in the 2011-2013 period.Unfortunately, it is not true that higher extraction costs always can be passed on to consumers as higher prices. Many energy costs are very well “buried” in finished goods, such as food, cars, air conditioners, and trucks. After a point, energy prices “top out” at what is affordable for citizens, considering current wage levels and interest rate levels. This level of the affordable energy price will vary over time, with lower interest rates and higher debt amounts generally allowing higher energy prices. Greater wage disparity will tend to reduce the affordable price level, because fewer workers can afford these finished goods.The underlying problem is that, from the consumer’s perspective, high oil prices look like inefficiency on the part of the oil company. Normally, being inefficient leads to costs that can’t be passed along to the consumer. We should not be surprised if, at some point, it is no longer possible to pass these higher costs on as higher prices.If higher extraction costs cannot be passed on to consumers, this is a terrible situation for energy producers. After not too many years, this situation tends to lead to peak energy output because producers and their governments tend to go bankrupt. This seems to be the situation we are reaching for oil, coal and natural gas. This is a much worse situation than the high price situation because the high price situation tends to lead to more supply; low prices tend to collapse the production system. The underlying problem is that low prices, even if they are satisfactory to the consumer, tend to be too low for the companies producing energy products. Peak Oilers miss the fact that a two-way tug of war is taking place. Low prices look like a great outcome from the perspective of consumers, but they are a disaster from the perspective of producers.
Canadian province of Alberta lowers oil curtailments as glut eases (Reuters) - The Canadian province of Alberta will ease oil curtailments in February and March, earlier than expected, saying on Wednesday that its rare step to limit production had eased a glut of crude. Alberta’s move to scale back its curtailments came at the end of a volatile month, in which Canadian prices improved dramatically but producers were affected disproportionately. U.S. refiners are also scrambling to find a replacement for Venezuelan heavy crude - similar to what Alberta produces - because of U.S. sanctions on that country’s state-owned oil company. Prices for Alberta oil fell in October to record lows compared with U.S. futures prices because of congested pipelines that backed up crude in storage tanks and prompted the curtailments. “We’re not out of the woods yet, but this temporary measure is working,” Premier Rachel Notley said in a statement. The province said it would set production for February and March at 3.63 million barrels per day (bpd), up by 75,000 bpd from January. Storage levels have fallen by 5 million barrels to a total of 30 million barrels since curtailments were announced in December, faster than expected, the provincial government said. They have decreased by about 1 million barrels a week this month, it said. The oil cuts averted disaster for many small producers that were selling crude in some cases below cost. But they have sharply divided larger producers, illustrating the messy task government faces. Producers that do not fully own refineries, such as Cenovus Energy Inc and Canadian Natural Resources Ltd, pressured Alberta last year to impose the curtailments.
In 'Victory for Land and Water,' Canada's Supreme Court Rules Bankrupt Fossil Fuel Companies Must Clean Up Pollution Left Behind -- Green energy campaigners in Canada applauded a precedent-setting Supreme Court ruling on Thursday which ordered the bankrupt Alberta-based oil and gas company Redwater Energy to clean up its failed wells instead of leaving the task to the public. Observing the "polluter pays principle," the 5-2 ruling overturned two earlier decisions by lower courts which had sided with a federal law stating that insolvent companies could prioritize paying back their creditors over fulfilling their environmental obligations."Bankruptcy is not a license to ignore rules," Chief Justice Richard Wagner wrote in the ruling, which was celebrated as one that would set a new precedent for the entire country.A victory for our lands and waters. Energy companies shouldn't be able to walk away from responsibility to clean up abandoned wells. #SCC @Redwaterhttps://t.co/FTfVtWXtHt "The Supreme Court of Canada has prioritized paying clean up costs before creditors when extractive companies go bankrupt. This outcome reinforces the growing understanding that polluters are responsible for their clean up obligations," said the Pembina Institute, a think tank focused on clean energy and environmental policy. "Working families across this province, as well as all of Canada, should not have to pay for the financial and environmental liabilities left behind when companies walk away from their obligations," said Energy Minister Margaret McCuaig-Boyd. "Upholding the polluter-pays principle is good news for Albertans and it's good news for Canadians."
Canada May Have Overpaid For Trans Mountain Pipeline - Canada’s government negotiated a price to buy the controversial Trans Mountain Pipeline at the higher end of estimates, while further delays in the expansion project would reduce the final price that the federal government can obtain when it re-sells it, Canada’s Parliamentary Budget Officer (PBO) said in a report on Thursday.The Trans Mountain expansion has become one of the most controversial pipeline projects in North America as it pitted two provinces—Alberta and British Columbia—against each other. Alberta’s heavy oil producers need more pipeline capacity as their production grows, but pipeline capacity has stayed the same. British Columbia, however, is against any new oil pipelines. The fierce opposition in British Columbia has forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline, and to sell the project to the Canadian government in August 2018.Canada bought Trans Mountain Pipeline (TMP), the Trans Mountain Expansion Project (TMEP), and related assets for US$3.35 billion (C$4.4 billion), while PBO estimates that the TMP and TMEP have a value of between US$2.74 billion (C$3.6 billion) and US$3.5 billion (C$4.6 billion), assuming that the pipeline is built on time and on budget. PBO’s valuation could be understated, if all related assets are included, the watchdog for Canada’s public finances noted.Yet, PBO underlined that “One significant finding of this study is that delays in pipeline construction, an increase in construction costs and/or changes in the risk profile of the TMEP (reflected by the discount rate) can negatively influence the final sale price that the Government can negotiate for the TMP, TMEP and related assets.”The PBO calculates that completing the project one year behind schedule would reduce the value of the TMEP by US$528 million (C$693 million), while a 10-percent rise in construction costs would lower its value by US$345 million (C$453 million).As it stands, the Trans Mountain expansion project faces an uphill battle with environmentalists and appeals at courts to be completed “on time and on budget.”
Mexico Seizes Tanker Trucks Used for Fuel Theft - Mexican security forces seized tanker trucks from a fuel-theft ring in the central state of Guanajuato, the navy secretary said Wednesday. Elements of the Santa Rosa de Lima Cartel were pilfering fuel from a pipeline running through the town of San Salvador Torrecillas, Adm. Jose Rafael Ojeda said during President Andres Manuel Lopez Obrador’s daily press conference. The gang blocked roads in the area to obstruct the military operation, but the marines managed to push through and seize 33 vehicles. Ojeda also said that “irregularities” were found in the navigation log and fuel registry of two vessels impounded in the Gulf coast port of Dos Bocas, located in the southeastern state of Tabasco. Stealing fuel from pipelines belonging to state oil company Petroleos Mexicanos (Pemex) and re-selling it on the black market has become a major criminal enterprise in Mexico. News of the Lopez Obrador administration’s battle against a racket that cost Mexico $3.4 billion last year dominated Wednesday’s press briefing, which was cut short as the president was due to receive visiting Spanish Prime Minister Pedro Sanchez. Since his Dec. 1, inauguration, the leftist president has deployed thousands of police and troops to increase the surveillance of pipelines. Lopez Obrador revealed that authorities were investigating a company suspected of acting as a front for theft from fuel pipelines in Mexico City.
Mexican Oil at a Crossroads - Having taken office, President Andres Manuel Lopez Obrador has both challenge and opportunity with regards to setting policy for the Mexican oil industry. Historically, policy has been driven by nationalist sentiments and a preference for government over private ownership, both of which have had some negative consequences. Recent reforms have already achieved significant results and should be furthered, but it appears he will not do so. Naturally, being so close to the giant U.S. economy and oil industry, concerns about foreign domination have influenced policy (just as in Canada), however, the modern industry is so nationally diverse that the threat of any given country or company wielding undue influence is much diminished. Countries from Bolivia to Venezuela have demonstrated that national sovereignty cannot be challenged in the modern era. Pemex has accomplished much over the decades, but political control over it has hamstrung its operations in a variety of ways. Budgeting often reflects the government’s fiscal realities more than the company’s needs and opportunities, decision-making has added layers of individuals with their own agenda and increased delays, and political interference reduces efficiency. Moody’s Investor Services estimated that Pemex was only covering about half of its costs when prices dropped after 2014, while development plans for new discoveries by private companies have tended to estimate costs below $30/barrel. The New Energy Model, enacted in 2013, has shown great success and should be modified only on the margins. The government has received over a billion dollars in bonuses from its early auctions of oil leases, and initial exploration has turned up, among other things, four offshore fields that should produce, at a peak, over 300 thousand barrels per day. Further discoveries should add to this, and government revenue from these developments should be several billion dollars a year, dependent on prices, at no cost to itself. The Venezuela example is valuable, especially the marginal fields exploitation. Where the Venezuelan state-owned company had allowed production in some older fields to decline naturally, the 1990s aperture or opening included leasing them to private companies. This meant that new investment and methods were brought into play, adding several hundred thousand barrels a day to the country’s production and providing billions in revenue—at little or no cost to the government. Mexico has a similar potential and should exploit it.
Trump administration imposes sanctions on Venezuelan oil industry -At a White House news briefing on Monday, National Security Advisor John Bolton and Treasury Secretary Steven Mnuchin announced the imposition of wide-ranging sanctions against the Venezuelan state oil company, Petróleos de Venezuela, S.A. (PDVSA).The sanctions constitute an act of war in support of the US-led regime-change operation against the government of Venezuelan president Nicolás Maduro. They are aimed at securing the support of the Venezuelan military for a coup that would place power in the hands of Juan Guaidó, a right-wing politician and State Department asset who proclaimed himself “interim” president on January 23.The sanctions prevent US companies and individuals from doing business with PDVSA properties and interests, including its US-based subsidiary, Citgo, unless any earnings from those transactions are placed in accounts from which the Maduro government is blocked. While it has been reported that European and Caribbean companies will be given some time to wind down transactions, it is unclear how far-reaching the sanctions are, and neither Bolton or Mnuchin provided any details.As the US imports approximately 41 percent of Venezuela’s oil production, the de facto embargo is a huge blow to Venezuela’s already crippled economy, with Bolton himself estimating that the sanctions would deprive Venezuela of $11 billion in earnings. Oil exports constitute about 95 percent of the country’s total export earnings, meaning that the new sanctions will result in further shortages of food, medicine and other commodities.Although it is expected that the Maduro government will seek other buyers for its oil, some of the more natural options, including Russia and China, may not be viable, as Venezuela is deeply in debt to both and already sends oil to those countries in payment. Venezuela is the fourth-largest source of US oil imports, amounting to around 580,000 barrels per day (bpd), which is around 6 percent of US oil imports. This is a significant decline from the 1.2 million bpd that Venezuela supplied just 10 years ago. Venezuelan oil exports last year fell by 33 percent compared to 2017, and Venezuelan refineries are reported to be operating at one-third capacity, largely due to shortages of parts and other necessary supplies.
U.S. sanctions Venezuela state oil firm, escalating pressure on Maduro (Reuters) - The Trump administration on Monday imposed sweeping sanctions on Venezuelan state-owned oil firm PDVSA, aimed at severely curbing the OPEC member’s crude exports to the United States and at pressuring socialist President Nicolas Maduro to step down. Russia, a close ally of Venezuela, denounced the move as illegal interference in Venezuela’s affairs and said the curbs meant Venezuela would probably have problems servicing its $3.15 billion sovereign debt to Moscow. Minutes before the sanctions announcement, Juan Guaido, the opposition leader who proclaimed himself interim president last week with U.S. backing, said congress would name new boards of directors to the company and its U.S. subsidiary, Citgo. Guaido, supported by the United States and most countries in the Western Hemisphere, says Maduro stole his re-election and must resign to allow new, fair polls. Maduro, in a live national broadcast on Monday, accused the United States of trying to steal U.S. refining arm Citgo Petroleum, the OPEC member’s most important foreign asset, which also manages a chain of U.S. gas stations. He said Venezuela would take legal actions in response. In the first sign of serious retaliation, three sources with knowledge of the decision said PDVSA had ordered customers with tankers waiting to load Venezuelan crude bound for the United States to prepay for the cargoes or they will be authorized to fill the vessels or leave the ports. The Trump administration sanctions stopped short of banning U.S. companies from buying Venezuelan oil, but because the proceeds of such sales will be put in a “blocked account,” PDVSA is likely to quickly stop shipping much crude to the United States, its top client.
Treasury sanctions Venezuela state-owned oil firm in bid to transfer control to Maduro opposition - The Trump administration will sanction Venezuela's state-owned oil firm, a move the White House has long put off for fear that it would raise oil prices and hurt American refiners. The move comes after a turbulent week for Venezuela that has created a standoff over the country's leadership. The sanctions aim to transfer control of Venezuela's oil wealth to forces that oppose socialist dictator Nicolas Maduro and deprive the strongman of resources that could prolong his grip on power. Last week, the opposition leader of Venezuela's National Assembly, Juan Guaido, named himself interim president amid street protests. President Donald Trump soon recognized Guaido as the nation's leader and his administration has been marshaling international support for the opposition figure since then. Maduro, having recently started another term after highly disputed elections, is refusing to back down. He is supported by the country's minister of defense and Russia. Treasury Secretary Steven Mnuchin on Monday determined that people operating in Venezuela's oil sector are subject to U.S. sanctions.The nation's energy industry is dominated by state-owned Petroleos de Venezuela, better known as PDVSA. Mnuchin said PDVSA has long been a vehicle for embezzlement and corruption by officials and businessmen. The sanctions will prevent the nation's oil wealth from being diverted to Maduro and will only be lifted when his regime hands control of PDVSA to a successor government, he added.
Moscow Will Do Whatever It Takes To Defend Its Interests In Venezuela - After decrying US sanctions against Venezuela's state-run oil company PDVSA as "illegal" and enforcing "unfair competition", a Kremlin spokesman has reiterated that Russia is prepared to use "all mechanisms available to us" to defend its economic interests in Venezuela - interests that are closely tied to the Maduro regime. According to RT, Russia has extended billions of dollars of loans to PDVSA, mostly via oil firm Rosneft. The company has extended $6 billion of loans which must be repaid in crude by the end of the year. Data from S&P Global Platts shows that as of November 2018, Venezuela had a $3.1 billion outstanding loan to repay to Rosneft.Rosneft also has five joint upstream projects with PDVSA in Venezuela. Peskov said that Russia is still assessing the potential impact of the PDVSA sanctions for Moscow.According to analysts briefed by Platts, whatever becomes of Maduro, Rosneft likely won't be cut off from Venezuelan oil because the country has abundant reserves, and oil is practically the only 'hard currency' it can access. An analyst at a Western bank estimated that Rosneft assets in Venezuela are equivalent to some $2.5 billion, plus another $2.5 billion in crude supplies owed for the loans."The worst-case scenario - which is unlikely to materialize - under which Rosneft loses all the money it invested in Venezuela, would be biting but not critical for the company, with quarterly free cash flow at over $4 billion," the analyst told Platts. Meanwhile, the US has warned that the "path to relief" for PDVSA is via the "expeditious transfer of control" to opposition leader Juan Guaido, which the US insists should be followed by Democratic elections. Though the Kremlin has denied the reports, rumors about the presence of 400 Kremlin affiliated mercenaries in Venezuela make more sense given how much money is at stake.
US Slaps De Facto Oil Ban on Venezuela -- The Trump administration dealt its toughest blow yet to the authoritarian Venezuelan leader Nicolas Maduro, issuing new sanctions on the nation’s state-owned oil company PDVSA that effectively block his regime from exporting crude to the U.S. The move ratchets up pressure on Maduro to resign and cede power to National Assembly leader Juan Guaido by cutting off the regime from the market where it gets the bulk of its cash. The U.S. and other countries recognized Guaido last week as Venezuela’s rightful president, and he said Monday he would take control of Venezuelan accounts abroad and appoint new boards to PDVSA and its Houston-based subsidiary Citgo Petroleum. President Donald Trump assailed Maduro in a letter to Congress explaining an executive order he issued sanctioning PDVSA and Venezuela’s central bank. The action would bolster Guaido, he said, while accusing Maduro’s regime of “human rights violations and abuses in response to anti-Maduro protests, arbitrary arrest and detention of anti‑Maduro protesters, curtailment of press freedom, harassment of political opponents, and continued attempts to undermine” Guaido’s government-in-waiting. “The U.S. is holding accountable those responsible for Venezuela’s tragic decline,” Treasury Secretary Steven Mnuchin said. U.S. officials had long been hesitant to apply sanctions on Venezuelan oil because they did not want to exacerbate the humanitarian crisis in the country. But with Maduro and Guaido, a 35-year-old engineer-turned-lawmaker, locked in a struggle for support in the streets and the military, they decided it’s now worth the risk. Guaido so far hasn’t been able to sway the armed forces to his side but he’s tapped deep public discontent with an economy beset by hyperinflation and vast shortages of food and medicine. In an interview with CNN en Espanol, Guaido said that he had spoken to Trump, but did not provide any details. National Security Adviser John Bolton told reporters at the White House that Trump’s action would block $7 billion in Venezuelan assets and reduce the country’s exports by $11 billion over the next year, though Maduro is sure to attempt to sell PDVSA’s crude elsewhere. Bolton urged Venezuela’s military to accept a peaceful transfer of power to Guaido. Mnuchin said that Citgo would be able to continue to operate but won’t be allowed to remit money to the Maduro regime. Its proceeds must instead be held in blocked U.S. accounts. The Treasury secretary added that in the “short term” he expects “modest” impact on U.S. refineries. He noted the sanctions wouldn’t affect oil already purchased that is being shipped, and said he didn’t expect U.S. gas prices to rise.
US Prepares for Battle Over Venezuelan Oil Refiner Citgo - Following Monday’s imposition of sanctions against Venezuela’s oil industry, the Trump Administration is gearing up for what could be a protracted international battle over the legal control of Venezuela’s main overseas assets, the most substantial of which is Citgo. Citgo is Venezuela’s US-based refinery business, which owns three refineries in the United States and a major chain of gas stations across the country. They are where much of Venezuela’s overseas oil exports end up. Venezuela’s state oil company PDVSA owns the majority of Citgo, while 49% of it is owned by Russia’s Rosneft as collateral for loans. PDVSA is ordering all US-bound oil tankers to pre-pay for their oil now, as the US sanctions would effectively prevent them from getting paid. The sanctions require all payments to be put in a frozen account that PDVSA cannot access. Venezuela’s Oil Minister says the country is examining imposing force majeure to get out of certain contracts which are no longer tenable amid the US sanctions. Force majeure would allow them to back off contracts on the grounds of forces outside of their control.
Factbox: US sanctions PDVSA, creating likely major diversions of crude, diluent flows - — The Trump administration Monday announced sweeping sanctions on PDVSA, Venezuela's state-owned oil company, a move which could ultimately block roughly 500,000 b/d of US imports and is expected to immediately shutdown roughly 120,000 b/d in diluent the US ships to the South American nation. The sanctions are aimed at cutting off the regime of Venezuelan President Nicolas Maduro from oil revenues and diverting those revenues to the still-forming regime of opposition leader Juan Guaido, who the US formally recognized last week as the country's legitimate president. While the sanctions are widely viewed as a de facto ban on US import of Venezuelan crude, the US Treasury Department coupled the sanctions with general licenses for US companies doing business with PDVSA and a wind down period which will allow most US imports of Venezuelan crude to continue for the next three months. "The US government has gone to great lengths to try to limit the implications for the operations of CITGO and the US Gulf Coast refining industry," said Elizabeth Rosenberg, director of the energy program at the Center for a New American Security and a former senior sanctions adviser at the Treasury Department. "Nevertheless, the new financial pressure plan will have tremendous effects for US firms who are scrambling to evaluate how PDVSA and Maduro will react and whether pressure on US energy product sales to Venezuela will be next." Here's a look at the potential market impacts of Monday's US sanctions announcement:
Mexico unable to fill US demand for lost Venezuelan crude: analysts — US refiners cannot rely on Mexico to replace Venezuelan heavy oil imports as the country is battling to reverse its declining production and Pemex's oil is sold under contractual basis, analysts and others say. Pemex sends 54% of its heavy crude exports to Asia and Europe under a contractual basis, preventing US from buying more Mexican crude in the spot market, a source close to Pemex told S&P Global Platts on Tuesday. A de facto ban on US imports of Venezuelan crude announced Monday by the Trump administration has created a sudden 500,000 b/d heavy, sour crude supply gap in the US Gulf Coast. Mexican crude, particularly Maya, may be the most similar to Venezuelan crude and, due to proximity to USGC ports, the most logical replacement for US refiners of Venezuelan oil. However, US refiners won't be able to acquire the 625,000 b/d of Mexican crude sold in Europe and Asia unless Pemex and its customers is willing to renegotiate term contracts. Pemex sells 90% of its crude exports under contracts, according to the company's Securities and Exchange Commission report. There is a slim option for US refiners to access more Mexican barrels, Lourdes Melgar, a deputy hydrocarbons secretary under the previous Mexican administration of President Enrique Pena Nieto, told Platts. Mexico could do heavy-light crude swaps with the US, helping to increase the efficiency of Pemex's simple configuration refineries, she added. Mexico recently purchased a limited amount of US Bakken light crude to run at its domestic refineries. "However, I don't know if the spirit of the current administration, for what we have seen, would implement a swap strategy to aid American refiners," Melgar said. Lopez Obrador has said he does not want to export crude oil and instead wants to refine it domestically, she added. Pemex is not considering importing more light oil at the moment. The Trump administration Monday announced sanctions which will allow US refiners to buy Venezuelan crude at least through April. But, US refiners, who import Venezuelan crude, must now pay for it through blocked US accounts, preventing President Nicolas Maduro's regime from accessing that oil revenue and, effectively, stopping flows of Venezuelan crude to the US. Major US buyers of Venezuelan crude, including Valero and Chevron, have contracts for Mexican supply, but additional barrels will be difficult to acquire due to Mexico's production declines, according to S&P Global Platts Analytics, in a research note.
Analysis- Venezuela sanctions may ripple through Asian crude markets - — US sanctions on Venezuela's state-owned PDVSA are expected to affect crude markets in Asia as the South American country could be forced to redirect nearly half of its exports away from the US, its single largest customer. PDVSA's Asian customers, mainly private refineries in western India and Chinese independents, are expected to show buying interest for around 500,000 b/d of Venezuelan heavy crudes, partly to make up for giving up Iranian grades last year."The move could possibly shift over 500 ,000 b/d to more distant and lower-valued markets, the majority of which would likely head to China and India," said Lim Jit Yang, director of Asia-Pacific oil market analysis at S&P Global Analytics. The sanctions could also boost competition for heavy crudes from the Middle East, such as Iraq's Basrah Heavy, Bahrain's Banoco Arab Medium and Saudi Arab Heavy. However, if Middle East producers choose to trim their allotments to Asia and boost supply to the US, the market will tighten.It will not be easy for PDVSA to redirect exports to Asia, where oil refineries are configured to process mostly medium sour grades from the Middle East, and only a few refineries actively seek heavy grades on the spot market.For instance, Mumbai-listed Reliance Industries and Nayara Energy operate high complexity refineries in western India designed to process discounted heavy crudes, and receive a steady flow of Venezuelan crude through their contracts."With the PDVSA sanctions in place now, my first instinct is that more Venezuelan crudes will flow to the Indian private refiners. But we have to wait and see if that becomes a reality," a senior executive at an Indian oil company said. "Anyway, Reliance and Nayara are hardly taking anything from Iran now. So they would be looking for opportunities" to replace Iranian barrels.Another source at an Indian private refiner said: "We pay in Euros for Venezuelan crude. So we are hoping that we can buy more. We need more clarity. But there is an opportunity for private refiners since they are not receiving anything from Iran under the waiver." PDVSA's crude exports fell to 1.28 million b/d in the fourth quarter of 2018, down from 1.46 million b/d at the start of the year and from 2.19 million b/d in 2016, according to Barclays data. The US accounted for 43% of Venezuelan exports, India accounted for 19% and China 22%.
Analysis- US wants Middle East oil to offset Venezuela sanctions, but Saudi Arabia is cutting output - — The US is once again pressuring Saudi Arabia and its Gulf allies to boost crude supplies at the expense of another sanctioned OPEC member -- this time Venezuela. For now, however, the kingdom appears less inclined to answer the call as it did last year, when the US imposed sanctions on Iran. Saudi Arabia, the world's largest crude exporter, has been steadily slashing its output to reverse last year's production surge. February production will come in below January's projected 10.2 million b/d, energy minister Khalid al-Falih has said -- some 900,000 b/d less than its record 11.1 million b/d in November. But that was before the US on Monday imposed severe sanctions targeting Venezuela's state-owned oil company PDVSA, with officials saying they expect Saudi Arabia and other producers to make up for any crude shortfalls. "I'm sure many of our friends in the Middle East will be happy to make up the supply as we push down Venezuela's supply," US Treasury Secretary Steven Mnuchin said. The PDVSA sanctions could ultimately block about 500,000 b/d of US imports of Venezuelan crude, while also shutting off 120,000 b/d in US diluent exports to Venezuela. The loss of diluent would significantly inhibit PDVSA's ability to produce and market its extra heavy oil. Venezuelan production stood at 1.17 million b/d in December, according to the latest Platts OPEC production survey, down 530,000 b/d in a year, a trend the sanctions would worsen. A senior Saudi official told S&P Global Platts before the announcement that he was not aware of any request from the US for more Saudi crude, and sources indicated the kingdom would be unlikely to comply anyway, having been burned by the Iran sanctions waivers the US granted in November. The US had leaned on Saudi Arabia and other Middle East OPEC members to raise their production last summer in anticipation of the reimposition of US sanctions aimed at zeroing out Iran's oil exports, and the kingdom complied, ramping up its output by more than 1 million b/d in six months and attributing the increase to customer requests. But the US then caught OPEC off guard by issuing waivers to eight countries to continue purchasing Iranian oil, contributing to market fears of a supply glut and tanking prices over the past few months. Stung by the decision and wary of tepid demand growth in 2019, Saudi Arabia pushed OPEC to implement new production cuts, and the group agreed with Russia and nine other non-OPEC allies to commit to 1.2 million b/d in supply curbs that went into force January 1. Falih, in an interview Monday with Bloomberg Television before the PDVSA sanctions announcement, said Saudi Arabia would continue to target the US for the bulk of its output cuts. Falih has noted how much the EIA's weekly US petroleum inventories report can move the market, but he said the decision to shift flows from the US is as much a commercial one.
US sanctions to exacerbate Venezuela's fuel shortages, hit Cuba— Venezuela and its geopolitical ally Cuba could soon face crippling shortages of gasoline, diesel and other fuels, in the wake of US sanctions on PDVSA that would severely hamper its refineries' ability to operate. Venezuelan state-run PDVSA's US refining subsidiary Citgo supplies more than 50% of the gasoline and other fuels consumed in Venezuela, as well as 3 million barrels of heavy virgin naphtha monthly that PDVSA uses to dilute its heavy crude oil from the Orinoco Belt for export and processing. Those shipments would be cut off by the sanctions. PDVSA also supplies Cuba with 98,000 b/d of crude and refined products under a deal signed between the two countries in 2000, but those deliveries would also be imperiled by the sanctions, as the US seeks to weaken ties between Havana and Caracas. "Some call the country now 'Cuba-zuela,' reflecting the grip that Cuba's military and security forces have on the Maduro regime," US National Security Advisor John Bolton told reporters Monday. "We think that's a strategic significant threat to the United States." The sanctions amount to a de facto ban on US imports of Venezuelan crude, which Citgo's refineries in the US Gulf Coast rely on, as well as a prohibition on US exports of some 120,000 b/d of diluent to Venezuela.
Controversial Nord Stream 2 Pipeline Could Be Operational By November - In what would be an early geopolitical win for Moscow, German news agency DW reported yesterday, citing one of the project’s engineers, that the Nord Stream 2 natural gas pipeline should be operational by November. Klaus Haussmann, an engineer at Nord Stream 2’s future landfall site at Lubmin on Germany’s Baltic Sea coast, told German public radio station Deutschlandfunk that the “raw” laying of the pipeline would be finished by the middle of 2019, according to the DW report. “Then comes the entire installation of the electrical equipment, security chains. And, then it’s planned on the large scale that we get the first conduit filled with gas in November, from Russia,” Haussmann said. Haussmann said his concern was more the impact of the Baltic’s winter weather and waves on construction at sea and less so the international pros and cons. “For two years or more, Nord Stream 2 has been pretty much under fire. But at the moment we have more worries with the weather outside,” he said. Nord Stream 2 is a 759 mile (1,222 km) natural gas pipeline running on the bed of the Baltic Sea from Russian gas fields to Germany, bypassing existing land routes over Ukraine, Poland and Belarus. It would double the existing Nord Stream pipeline’s current annual capacity of 55 bcm. However, it is arguably one of the most geopolitically charged energy projects ever proposed. Germany maintains that the pipeline is needed to increase natural gas supply as some EU members move away from nuclear for power generation, but not everyone agrees. The U.S., under the past three presidents including Donald Trump, has long countered that the pipeline puts European national security in jeopardy – a concern that seems grounded given Russia’s history of using gas a geopolitical weapon in the middle of winter. Ukraine, which has argued that it will lose revenue since the Nord Stream 2 project would bypass the country, has tried to form a consortium of EU-based companies to stop the new pipeline, however, those efforts have largely fallen apart and at this point would be too late to make much difference. The Nord Stream 2 project has so angered President Trump that his administration has recently threatened to put sanctions in place if the project becomes operational. In a televised meeting with reporters and NATO Secretary-General Jens Stoltenberg before a NATO summit in Brussels last year, Trump said it was “very inappropriate” that the U.S. was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow.
Oil major Total plans biggest exploration drive in years (Reuters) - Total is launching its biggest exploration campaign for years in 2019 as part of a turnaround plan that is ditching the company’s focus on risky long-shots in favor of areas known to contain commercial levels of oil or gas. The French major aims to drill 23 wells this year, its senior vice president for exploration, Kevin McLachlan, told Reuters, in waters off Mauritania, Senegal, Namibia, South Africa, Guyana and Brazil. While the company declined to say how many wells it drilled in 2018, McLachlan said 2019 would be Total’s largest program in years. The 23 wells planned represent about a trebling of the levels of 2017 and 2016, and is higher even than the 20 drilled in 2013, before the oil price crash. The company’s new game plan is to concentrate efforts on emerging and mature basins, which offer a greater chance of exploration success. It is moving away from its higher-risk, higher-reward strategy of targeting “frontier” areas that have not been commercially exploited, an approach which yielded scant rewards and saw outlier Total fall behind rivals. As a result the proportion of its exploration capital the African-focused company is spending on frontier areas has dropped to 15 percent, from 40 percent five years ago. “We were spending a lot of money in frontier,” said McLachlan, a Canadian geophysicist who joined Total in 2015 to lead the five-year revamp of its exploration strategy. “Now we want balance.” Most of the wells it aims to drill this year will target known giant fields, he added. Total has broken ranks with some rivals in recent years and largely ignored the rush to U.S. shale. It is looking to eke out conventional resources, particularly in Africa where it has the biggest industry presence. The strategy carries risks though, and has left the company exposed to the kind of political instability that has deterred others.
Japan imports record US crude in 2018, imports 199,138 b/d in Dec - Japan imported a record 199,138 b/d of crude oil from the US in December and the total US crude shipments in 2018 reached an all-time annual high, allowing the North American producer to break into the top ten supplier list for the first time last year, according to data released Thursday by the Ministry of Economy, Trade and Industry. The US was the fourth largest crude supplier to Japan in December, when there was no crude imports from Iran over November-December as domestic refiners had suspended their imports ahead of Washington's reimposed sanctions on November 5. "The US sanctions against Iran had resulted in the inflow of US crude oil to replace Iranian barrels as a consequence," Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp. said. Nogami also added that Japan's boosted imports of US oil was at the time that "a part of US crude not taken by China came to Japan as a result of the US-China trade dispute." China's crude oil imports from the US tumbled in the fourth quarter last year with no shipments recorded between October and December 2018, latest data released by the General Administration of Customs showed. Looking forward, industry sources said China's US crude imports this year could post a double digit percentage fall from 2018 amid ongoing China-US trade tensions. The spike in US crude imports came as Japan did not take any Iranian oil over November-December last year after having lowered its imports to just 48,033 b/d in October, the lowest level since April 2017. Japan imported 2.52 million barrels or 84,149 b/d of of US crude in November, more than double from 34,690 b/d a year ago, bringing the North American producer as the 10th largest crude supplier in the year to date. Japan is among eight countries that received 180-day US sanctions waiver until May 4 but the country did not resume loading Iranian oil until January 20 because of the need to clarify shipping, insurance and banking rules. In December, the US supplies comprised of WTI Midland, Eagle Ford, Southern Green Canyon and White Cliffs grades, accounting for roughly 7% of Japan's total crude imports of 3 million b/d in the month, METI data showed.
Drill, China, drill: State majors step on the gas after Xi calls for energy security (Reuters) - China’s state energy giants are set to raise spending on domestic drilling this year to the highest levels since 2016, focusing on adding natural gas reserves in a concerted drive to boost local supplies. Responding to President Xi Jinping’s call last August to boost domestic energy security, China’s trio of oil majors - PetroChina, Sinopec Corp and CNOOC Ltd - are adding thousands of wells at oil basins in the remote deserts of the northwest region of Xinjiang, shale rocks in southwest Sichuan province and deepwater fields of the South China Sea. Firms are showing greater risk appetite, expanding investments faster in exploration than production, emboldened by Beijing’s political push and oil near $60 a barrel, said state oil executives and analysts at consultancy Wood Mackenzie. “We shall carry through resolutely the State Council’s call on stepping up domestic exploration and development and launch an offensive war,” PetroChina Chairman Wang Yilin was cited as saying in an inhouse newspaper in December. Offshore specialist CNOOC Ltd said last week it was confident of achieving its spending target this year, the highest since 2014. It pledged to spend twice as much this year in domestic exploratory drilling as in 2016. “With oil prices at $50, $60 and $70...we’re making decent profits,” Yuan Guangyu, CNOOC’s Chief Executive Officer, said last week. CNPC, Asia’s largest oil and gas producer and parent of PetroChina, is boosting risk exploration investment five-fold to 5 billion yuan ($741 million) this year from 1 billion yuan last year. But with oil reservoirs maturing and new discoveries tending to be smaller and more costly, even more drilling is unlikely to reverse China’s declining oil outlook, analysts say. China, set to remain the world’s top oil buyer for years to come, is forecast to slip to the 10th largest global oil producer in 2020, down from No.5 for most of last decade, said Wood Mackenzie. “China will likely continue on the same path as it has in recent years – an overwhelming focus on new gas production, leading to continued decline in its oil output,”
Is China’s plan to use a nuclear bomb detonator to release shale gas in earthquake-prone Sichuan crazy or brilliant? - China is planning to apply the same technology used to detonate a nuclear bomb over Hiroshima during the second world war to access its massive shale gas reserves in Sichuan province. While success would mean a giant leap forward not only for the industry but also Beijing’s energy self-sufficiency ambitions, some observers are concerned about the potential risk of widespread drilling for the fuel in a region known for its devastating earthquakes.Despite being home to the largest reserves of shale gas on the planet – about 31.6 trillion cubic metres according to 2015 figures from the US Energy Information Administration, or twice as much as the United States and Australia combined – China is the world’s biggest importer of natural gas, with about 40 per cent of its annual requirement coming from overseas.In 2017, it produced just 6 billion cubic metres of shale gas, or about 6 per cent of its natural gas output for the whole year. The problem is that 80 per cent of its deposits are located more than 3,500 metres (11,500 feet) below sea level, which is far beyond the range of hydraulic fracturing, the standard method for extraction.But all that could be about to change, after a team of nuclear weapons scientists led by Professor Zhang Yongming from the State Key Laboratory of Controlled Shock Waves at Xian Jiaotong University in Shaanxi province, released details of a new “energy rod” that has the power to plumb depths never before thought possible. Unlike hydraulic fracturing, or fracking as it is more commonly known, which uses highly pressurised jets of water to release gas deposits trapped in sedimentary rock, Zhang’s torpedo-shaped device uses a powerful electric current to generate concentrated, precisely controlled shock waves to achieve the same result.He told the South China Morning Post that while the technology had yet to be applied outside the laboratory, the first field test was set to take place in Sichuan in March or April. “We are about to see the result of a decade’s work,” he said.
RBN Energy's Rusty Braziel: Here's the most important thing going on in the oil market --The most important trend happening in the oil market has to do with China, oil guru and RBN Energy President and Principal Energy Markets Consultant Rusty Braziel tells CNBC's Jim Cramer. Braziel, a frequent "Mad Money" guest who has correctly predicted several oil price collapses in recent years, referenced the commodity's price drop in October of last year. After starting the month near four-year highs, crude oil prices saw their biggest monthly drop in over two years.Since October, oil prices have been trading lower, a trend some have connected to incipient economic weakness in China. While Cramer wasn't convinced by that line of thinking, Braziel said in a Monday interview that it actually had merit. "If demand in China is down, if the economy in China is down, that means the total demand for crude oil is going to be down. If crude oil demand drops, then total demand drops, then … crude oil prices are likely to decline, too," Braziel said. "As a matter of fact, that's really the most important thing that's going on right now, and it's what happened back in 2014."
The Next Big Threat For Oil Comes From China - There is a widespread concern in the world regarding China’s decelerating economic growth. The slowdown, if it continues, threatens economic activity almost everywhere. Growth in Germany, for example, has already cooled due to its exports of high-quality machinery to China dropping precipitously.Those in the oil market also worry about China. The country’s economic growth has been a key driver of global crude oil consumption. Indeed, China accounts for one-third of the International Energy Agency’s projected 2019 increase in world oil use.Weak Chinese economic growth is not the end of the oil market’s prospective ills, however. Few recognize the additional trouble on tap from the Chinese independent refiners affectionally known as “teapots.” The danger occurs because lower oil demand growth in China comes just when independent refining capacity there is rising. The capacity growth has been financed primarily by debt, most likely supplied by China’s alternative lenders. As demand slows, these refiners will turn to international markets, dumping products in Singapore, the Americas, or Europe to earn hard cash. In doing so, they could plunge the global refining industry into a serious recession and drive crude prices down sharply. This will not be the first time that refineries in Asia caused a crisis in the oil sector. In 1997, Korean refiners did the same during the Asian financial collapse. That incident is described in the December 1997 Oil Market Intelligence (OMI). The report begins by noting that Korean refiners had begun to seek exports markets before the crisis hit “mostly to employ 620,000 b/d of new refining capacity that came on stream since late 1966.” The effort intensified as domestic consumption collapsed: But once the won started its second descent in two years—it dropped over 94% against the dollar between July 1 and December 10 [1997], much of it in early December—the push to export became more desperate because the five big refiners could not recoup in domestic product prices the staggering dollar price of crude oil feedstock.
Libya crude oil production averaged 1.1 mil b/d in 2018, highest in 5 years: NOC chairman Sanalla - Libyan oil output recovered sharply last year even though security and political challenges continued to impede the sector. "We achieved our highest production and revenue levels for the past five years, which we now declare openly on a monthly basis, with $24.4 billion transferred to the Libyan Central Bank in 2018, thanks to an average production level of 1.1 million b/d," Sanalla said. S&P Global Platts, which publishes a monthly OPEC production survey, pegged Libya's 2018 production at an average of 948,333 b/d. That was still its highest annual average since 2012, when it pumped 1.40 million b/d, according to Platts survey data. NOC officials told Platts on Tuesday that they were planning for a $60 billion budget, with $20 billion allocated to recover Libya's crude output to pre-civil war levels of 1.6 million b/d by year end, though Sanalla added that NOC has not received its entire capital spending allocation from Tripoli in the last two years. Despite security concerns, some international oil companies have expressed interest in resuming exploration activities in the war-torn country which contains the largest oil and gas reserves in Africa. Sanalla said Austria's OMV will start exploration work in the Sirte Basin "soon" and that NOC is conducting some technical work with Italy's Eni and BP, who are hoping to resume work in the onshore Ghadames basin. Russia's Gazprom and Tatneft are also expected to resume upstream working this year, he added. Sanalla also said NOC was very close to approving Total's agreement to take a 16.33% stake in the Waha concessions from Marathon Petroleum for $450 million. "We are in the final stages," he added. Total had announced this in March 2018 but the deal was still outstanding amid concerns the price was too low and speculation that NOC wants to make a counteroffer according to various news reports.
Oil price volatility a threat for East Med natural gas producers- Egyptian minister - — Oil price volatility continues to pose a "threat" to upstream oil and gas investment, including for the East Mediterranean's current and would-be gas producers, Egypt's petroleum minister, Tarek El-Molla, said Monday. Speaking in Florence, Italy, Molla praised the efforts of OPEC and its allies to stabilize oil prices, but said sufficient stability had not yet been achieved. While much investment and exploration activity is directed at gas projects, volatility of oil prices "is directly impacting the amount of investments. It really shapes the future of investment in the oil and gas sector," Molla told an industry conference, the Baker Hughes GE Annual Meeting. "The problem you will be faced with in the coming few years -- a big shortage of oil production -- this will be a threat in my opinion. This is the role of all of us to have a balanced price for supply and demand, whereby you can have sustainable production of oil." Molla went on to highlight his own country's efforts to foster cooperation among current and potential gas producers in the Eastern Mediterranean, and their efforts to find joint export solutions for gas. Egypt is now resuming LNG exports on the back of rising production from its giant Zohr field, he noted, and is mooted as a potential provider of infrastructure for other countries wanting to export LNG from the region. Earlier in January the country hosted an "East Med Gas Hub" forum, gathering ministers and officials from Israel, Cyprus, Greece, Jordan, Italy and Palestinian representatives. "Knowing that our neighbouring countries in the East Mediterranean basin have got some good reserves of gas as well as some good discoveries, but they're not necessarily able to monetize that, here comes the importance of cooperation," Molla said. "We need to have synergies in order to capitalize and to have the benefit of this gas that is stranded. We can cooperate using our infrastructure, using their gas resources, and look at Europe as the potential customer of our gas. We need to have synergies," he said. "We need to have not only political stability, but political cooperation."
Middle East gas reserves can be a catalyst for peace, Egypt minister says - Gas reserves in the Middle East can create opportunities for employment, business and peacemaking, according to Egypt's petroleum minister. Amid a push by Egypt to transform itself into a regional gas hub, the country hosted the East Med Gas Hub earlier in January and gathered officials from Israel, Cyprus, Greece, Jordan, Italy and Palestine. Speaking Monday at the BHGE Annual Meeting in Florence, Italy, Egypt Petroleum Minister Tarek El-Molla told CNBC that the commodity can aid the peace process in the region. "We were very proud to host the Palestinians the Israelis, sitting together in one room, on the roundtable together with other neighboring countries like Greece, Cyprus, Jordan and Italy," he told CNBC's Steve Sedgwick. "So the benefit will be there and the welfare will cover all the countries because gas will be the cause of the revenues to generate opportunities, job opportunities, business opportunities and it will bless all the people there (in the Middle East) hence it is the catalyst and it will be the peacemaker really," he added. Cairo is expected to become a net gas exporter by the end of 2019 and El-Molla noted that the country is seeing outside interest into the sector — particularly after the success of Egypt's Zohr gas field, an offshore natural gas field in the Mediterranean Sea operated by Italian energy firm Eni.
Anadarko Seeks Armored Vehicles for LNG Project -- Anadarko Petroleum Corp. wants a fleet of at least six vehicles with armor heavy enough to stop AK-47 bullets at its natural-gas project in Mozambique. And it needs them soon. The company called for expressions of interest from potential suppliers of so-called B6 specification vehicles, and also wants associated fleet management services, according to an advertisement published in the Maputo-based Noticias newspaper on Thursday. Anadarko is expected to spend at least $20 billion on its project in Palma, near the Tanzanian border, where a shadowy insurgency has killed more than 100 people and destroyed hundreds of homes. The attacks reached an area a few kilometers from the company’s worker camp this month, according to local media reports. “In order to ensure readiness for operations, there is an immediate need” for the vehicles, Anadarko said in the advertisement. Other oil and gas operators including Eni SpA and Exxon Mobil Corp. also have projects in Palma. Anadarko plans to reach a final investment decision on its Mozambique LNG project this year, and has already started a community resettlement project. “We take the security and safety of our people very seriously, and for that reason, we do not discuss specific security measures,” the company said in response to emailed questions.
Is Qatar's Latest Move A Stroke Of Geopolitical Brilliance? - Much has already been written about how Qatar, Australia and even the U.S. are jockeying to lock in global LNG market share. As more countries start to import LNG to offset over-reliance on dirtier burning fossil fuels, including coal and even crude oil, much is at stake for both producers and buyers. For Qatar, until recently unaccustomed to challenges to its top LNG spot, the stakes could be the highest of all players involved. The tiny, gas-rich kingdom already left OPEC (likely under geopolitical pressure) and is now planning to increase its already impressive 77 million tonnes per annum (mtpa) liquefaction capacity to 110 mtpa within five years. For the Qataris, not only is national pride on the line as it seeks to fend off Australia's recent attempts to usurp it from top global LNG producer, but its very survival geopolitically and economically is at stake too. Qatar finds itself in an unenviable position, mostly ostracized by its Arab neighbors over allegations of terrorism funding, which Doha denies, and still suffering a boycott instigated in 2017 by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. Qatar has little choice but to defend its LNG production and exporting prowess, as well as diversifying and investing in rival LNG producers' LNG sectors, including the U.S. Australia, though admittedly dependent on energy exports, mostly LNG and coal, is not as vulnerable as Qatar, while the U.S., which could compete with both Qatar and Australia in terms of liquefaction capacity by the mid to last part of the next decade if more projects are pushed through, has the most diversified economy in the world, including currently being the top crude oil producer with that position likely to remain at least in the mid-term.Amid all of these developments, Qatar is now courting foreign countries to invest in its gas sector. On Wednesday, a Reuters report, citing industry sources, said that Qatar is preparing to issue a tender for energy firms seeking a stake in its gas expansion project, drawing interest from long-standing partners as well as newcomers Chevron, Norway’s Equinor and Italy’s Eni. Plans to expand Qatar’s LNG facilities, already the largest in the world, by more than a third in the next five years are considered one of the most lucrative investments in the rapidly growing global gas market, the report added.
Saudi Aramco plans to buy up to 19.9% stake in Hyundai Oilbank for $1.6 bil — Saudi Aramco plans to buy up to 19.9% stake in Hyundai Oilbank from its parent company Hyundai Heavy Industries Holdings Co. for $1.6 billion, a move that could give the major Middle Eastern crude producer a strong foothold in one of Asia's leading oil consumers. Hyundai Heavy Industries said the company is currently in talks with Saudi Aramco over the sale of its stake in Hyundai Oilbank, and the deal will be finalized following the approval from its board of directors whose meeting will be held soon. Aramco is planning to buy Hyundai Heavy's 19.9% stake in the refiner for no more than 1.8 trillion won ($1.6 billion), Hyundai Heavy Industries said in a statement Monday. Saudi Aramco's move to invest in South Korea comes a year after the Middle Eastern firm decided to invest in two of Asia's biggest refining projects -- in Malaysia and in India -- a strategic push into Asia that will ensure the Middle East producer a huge outlet for its crude in coming years as oil faces increasing competition from alternative energy supplies. In 2018, Saudi Arabia was the biggest crude supplier to South Korea, with Asia's fourth biggest oil consumer importing 313.17 million barrels. However, the major OPEC producer saw its market share slide last year amid South Korea's growing appetite for light sweet crude oil from the US, Kazakhstan and Africa. Latest data from state-run Korea National Oil Corp. showed that South Korea's crude imports from Saudi Arabia fell 17.1% year on year to 24.48 million barrels in December 2018. For the full 2018, Saudi crude imports were also 1.9% lower than the 319.22 million barrels received in 2017. "Aramco's plan to buy a stake in Hyundai Oilbank can be seen as Saudi Arabia's move to secure its market share in South Korea, one of the major demand centers in Asia," Saudi Arabia has somewhat struggled to maintain its grip on the Asian market share over the past couple of years as a flurry of competitive arbitrage cargoes from the US, the Mediterranean and Africa attracted many refiners in East Asia.
What’s Behind Saudi Arabia’s New Downstream Strategy? - Saudi Aramco, the world’s wealthiest albeit state-owned oil company, continues to diversify in downstream investments. On Monday, the storied oil major said it planned to invest up to $1.6 bn for a nearly 20 percent stake in South Korean refiner Hyundai Oilbank. OilBank is South Korea’s smallest refiner by capacity. Saudi Aramco is already the biggest shareholder in South Korea’s third-largest refiner, S-Oil Corp, with a 63.41 percent stake. Saudi Aramco plans to pay 1.8 trillion won for a stake of up to 19.9 percent of Hyundai Oilbank from Hyundai Heavy Industries Holdings, which now owns 91.13 percent of Hyundai Oilbank, a Reuters report said. Saudi Aramco plans to value Hyundai Oilbank at 10 trillion won, or 36,000 won per share, according to a Hyundai Heavy Industries Holdings statement. Reuters said that a person familiar with the matter claimed the company plans to offer a discount of 10 percent to Saudi Aramco in a block deal that will require board approval from both firms next month. South Korea, along with China, has substantial market share in Asia and beyond for its finished petroleum products, producing light oil products and middle distillates such as diesel, gasoline, and jet fuel as a result of refinery upgrades in recent years. South Korea had almost 3.2 million b/d of crude oil distillation refining capacity at the end of 2017 and ranked sixth largest for refining capacity in the world, according to the US Energy Information Administration's (EIA) latest analysis of the country’s energy sector. Saudi Aramco for its part has been keen on investing in downstream assets across Asia, the U.S. and Africa. It has also been planning to invest more to expand its nature gas footprint, especially in both the U.S. LNG sector as well as Russia’s LNG push, which could see possible conflicts of interest as Moscow and Washington jokey for geopolitical hegemony in the middle east and natural gas market share in Europe where Russia has a controversial decades-old gas monopoly dating back to the end of World War II. Saudi Aramco is also interested in diversifying more downstream ahead of its possible IPO, though the exact date of what would be the world’s largest IPO has been postponed and currently is still not certain. However, Saudi Energy Minister Khalid al-Falih said a few weeks ago that the oil giant will be listed by 2021. If so, this will once again (reminiscent of 2017-2018 when an IPO was pending) see competing bourses, like London, Hong Kong, Tokyo, New York and even Riyadh all compete for the chance to list or partiality list the historic IPO.
Saudis Pledge Deeper Oil Cuts in February Under OPEC+ Deal - Saudi Arabia expects to reduce oil output once again in February and pump for six months at levels “well below” the production limit it accepted under OPEC’s oil-cuts accord, Energy Minister Khalid Al-Falih said. The world’s biggest exporter targeted production of 10.2 million barrels a day in January and is aiming to pump about 10.1 million in February, he said. Saudi Arabia’s voluntary limit under the December cuts deal with Russia and other producers was 10.33 million barrels a day. “Saudi Arabia will be well below the voluntary cap that we agreed to” and will pump beneath its ceiling “for the full six months” of the December cuts accord, he said in a Bloomberg Television interview in Riyadh. The Organization of Petroleum Exporting Countries and allies including Russia, a coalition known as OPEC+, agreed to pare production starting this month in an effort to buttress sagging oil prices. Crude futures have gained this year as Saudi Arabia leads the way in curbing output amid a surge in U.S. shale-oil supplies. Benchmark Brent crude was trading 42 cents higher at $60.35 a barrel at 10:37 a.m. in Dubai. “Demand will start picking up at the end of the first quarter and into the second quarter,” Al-Falih said. The impact of OPEC+ output reductions “will trickle down into the global markets over the next few weeks.” The U.S. is currently “way oversupplied” with its own output and with oil from other Western hemisphere producers, Al-Falih said. “So, as we look at the oil market, and we see it in the price differentials, it’s really not rewarding us to export a lot of oil to the U.S. And as a result, as we make adjustments, it makes commercial sense that that’s the market that gets the majority of our cuts.”
Saudi energy minister: Russians promised me they'd 'pick up the pace' on OPEC cuts ---Saudi Arabia's energy minister is hoping Russia will pull its weight on recently agreed to OPEC oil production cuts despite its slow start, expressing confidence Monday that the world's second-largest exporter would come through."We're committed both to the agreement in December. ... All indications so far so good, the Russians have promised me that they will pick up the pace," Energy Minister Khalid al-Falih told CNBC's Hadley Gamble in Riyadh on Monday.OPEC members, along with several other countries, in December agreed on output cuts totaling 1.2 million barrels per day (bpd) in order to stem a sinking market and support their own export-dependent economies. "OPEC plus" refers to the group's cooperation with the non-OPEC producers like Russia and other former Soviet states.Russia was more reluctant to cut its output, as its growth is heavily dependent on robust crude exports. Russia has initially let the Saudis shoulder the bulk of output cuts. The top OPEC ally, which in late 2016 began a cooperation agreement with Riyadh to stabilize oil prices, has often said that $60 per barrel is enough to meet its economic needs. Moscow in December said it would cut production by 50,000 to 60,000 barrels per day in January, whereas Saudi Arabia reportedly pledged to cut by 900,000 barrels a day compared with November levels.Russia pumped a record 11.45 million bpd in December, an increase of 80,000 bpd on the previous month, its Energy Ministry reported in early January. Saudi Arabia's crude output, by contrast, fell by more than 450,000 bpd from November to December. Global benchmark Brent crude has bounced back 25 percent from its late December rout, but is still far from the more than $86 per barrel highs it witnessed in October. Brent was trading at $60.18 a barrel at 2.30 p.m. London time.
Industry is more important to Saudi's future than oil, energy minister says --Industrial progress is more vital to Saudi Arabia's future than oil, the kingdom's energy minister told CNBC Monday."Industry is the number one priority for the kingdom," Khalid Al-Falih told CNBC's Hadley Gamble in Riyadh."Oil is important, it's going to be important for as long as all of us live and beyond for generations to come. But the future of this nation, and the future of my children and grandchildren and the next few generations of Saudi Arabia is going to be shaped by how we plan and execute programs for implementing Vision 2030, like the program we're launching today. And I have to give it higher priority," he said.Saudi Arabia launched a National Industrial Development and Logistics Program (NIDLP) on Monday as the kingdom hopes to attract 1.6 trillion riyals ($426 billion) of foreign investment by 2030, specifically into the industry, logistics, mining and energy sectors."This is a program that integrates four major pillars of the Saudi economy, they're all active now. These are nothing new but they will be stronger, more competitive and more diverse," Al-Falih said. "The sophisticated integrative logistics sector will connect (the other pillars) and will connect the kingdom with the rest of the world and will create a platform for exports and competitiveness for the new economy for Saudi Arabia being built under the Vision 2030."
Brent-Dubai narrows sharply ahead of fresh OPEC oil output cuts, sour crude shortage - Sour crude oil differentials have risen sharply relative to sweet crude grades in the Atlantic Basin as OPEC moves to cut back on production, sending the differential between the Brent and Dubai markets to its narrowest levels since 2017. In this edition of the podcast, S&P Global Platts associate editorial director Robert Beaman and crude managing editor Paula VanLaningham look at the move in the Brent-Dubai derivatives market and discuss how this move is likely to impact the European market in the coming weeks.
Hedge funds return to oil as OPEC removes some downside risk (Reuters) - Hedge fund managers stepped up their purchases of oil and refined products last week on growing hopes of a U.S.-China trade truce and that the global economy will avoid a severe slowdown in 2019. But fund buying has been concentrated in crude rather than fuels, which is consistent with producer club OPEC tightening the supply side of the market while the demand outlook remains more uncertain. Hedge funds and other money managers boosted their net long position in Brent crude futures and options by 30 million barrels to 203 million barrels in the week to Jan. 22 (https://tmsnrt.rs/2ThSHUZ ). Portfolio managers have raised their net long position in Brent in six of the last seven weeks, by a combined 66 million barrels since Dec. 4, according to exchange data. Funds now hold four bullish long positions in Brent for every one bearish short position, up from a ratio of just over 2:1 in early December, but far from the recent peak of 19:1 at the end of September. Fund managers also increased their net long position in European gasoil for the third week running by 4 million barrels to 15 million barrels. Gasoil positions are up by 13 million barrels since the end of December. In both cases, however, most of the new buying last week came from the closure of existing short positions rather than opening fresh long ones. It follows the largest sell-off ever recorded in crude and gasoil during the fourth quarter and confirms many fund managers sense prices have found a floor, at least temporarily.
Oil falls 3 percent as US adds rigs, China weakness rattles market - Oil prices fell sharply on Monday after U.S. companies added rigs for the first time this year, a signal that crude output may rise further, and as China, the world's second-largest oil user, reported additional signs of an economic slowdown.Further weighing on oil markets, the trade dispute between the United States and China looks unlikely to end anytime soon and its impact on the Chinese economy is increasing.U.S. crude oil futures fell $1.77, or 3.3 percent, to $51.92 per barrel around 10:10 a.m. ET (1510 GMT). International Brent crude oil futures were down $1.47, or 2.6 percent at $60.07 a barrel, briefly dipping below $60 for the first time in nearly two weeks.U.S. crude production, which hit a record 11.9 million barrels per day late last year, has undermined sentiment in the oil market, traders said.U.S. energy firms last week increased the number of rigs looking for new oil for the first time since late December to 862, Baker Hughes energy services firm said in its weekly report on Friday."The increase in drilling activity in the U.S. as reported by the oil service provider Baker Hughes on Friday evening is generating headwind," Commerzbank said in a note. "Clearly the significantly lower prices in the fourth quarter are prompting shale oil producers to exercise restraint. Because prices have risen considerably since the start of the year and there is a high number of drilled but uncompleted wells, drilling activity is likely to recover soon."Even with an uncertain outlook for demand and evidence of growing supply, the oil market has benefited this month from another round of production cuts by OPEC and its partners, as well as robust trade in physical barrels of crude led by China.Investors have added to their bets on a sustained rise in the oil price this month for the first time since September, according to data from the InterContinental Exchange. But much of the demand outlook hinges on China and whether or not its refiners will continue to import crude at 2018's breakneck pace.
US crude falls 3.2%, settling at $51.99, as weak industrial earnings stoke demand fears - Oil prices tumbled on Monday as weak industrial earnings in both China and the United States raised fresh concerns about a global slowdown that could cut fuel demand. U.S. West Texas Intermediate crude ended Monday's session down $1.70, or 3.2 percent, at $51.99 a barrel, its lowest closing price in two weeks. Brent crude, the international benchmark for oil prices, was down $1.71, or 2.8 percent, at $59.93 around 2:30 p.m. ET, slipping below $60 for the first time in nearly two weeks. Profits at Chinese industrial firms contracted in December for a second straight month, China's National Bureau of Statistics said on Monday. The latest datapoint adds to series of weak signals coming from the world's second biggest economy. Last week, Beijing reported that the economy grew at the slowest pace in nearly 30 years in 2018. Later on Monday, bellwether industrial Caterpillar issued weak guidance for future profits and reported disappointing fourth-quarter earnings, citing the impact of tariffs and slower sales in China. "Those Caterpillar earnings were sort of a canary in the coal mine in terms of industrial activity out there. Losses sped up after that hit the tape," said John Kilduff, founding partner at energy hedge fund Again Capital. Kilduff says markets will be closely watching upcoming data from Chinese state run firms and the private manufacturing sector. Also critical will be headlines coming out of the latest trade talks between Washington and Beijing scheduled for later this week, he added. The ongoing trade dispute — and the threat of higher tariffs on hundreds of billions in goods — is keeping markets on edge. But despite the trade tension, oil remains on pace for strong gains in January. WTI is up more than 14 percent this month, while Brent is on pace for a gain of about 11 percent. The price has been supported by early signs that OPEC and its allies are delivering on their pledge to cut production by 1.2 million barrels a day in order to drain oversupply from the market.
Oil prices stumble at start of week after U.S. rig count rises - Oil prices settled at a two-week low on Monday, then edged higher by in electronic trading after the U.S. Treasury unveiled sanctions on Venezuela’s state-owned oil firm, Petróleos de Venezuela SA. Prices had fallen during the regular trading session, reflecting fresh concerns over supply, and the potential for a slowdown in energy demand from China. Monday afternoon, however, the U.S. Treasury sanctioned Venezuela’s oil firm, which is also known as PdVSA, raising the risk of disruptions to oil supply from the South American nation, which is home to the world’s largest oil reserves. “The United States is holding accountable those responsible for Venezuela’s tragic decline, and will continue to use the full suite of its diplomatic and economic tools to support Interim President Juan Guaidó, the National Assembly, and the Venezuelan people’s efforts to restore their democracy,” Treasury Secretary Steven Mnuchin said in a statement. All property and interests in property of PdVSA subject to U.S. jurisdiction are “blocked and U.S. persons are generally prohibited from engaging in transactions with them.” In electronic trading, West Texas Intermediate crude for March delivery US:CLG9 was at $52.18 a barrel, just after 4 p.m. Eastern time Monday. The contract had fallen by $1.70, or 3.2%, to settle at $51.99 a barrel on the New York Mercantile Exchange after losing 0.7% last week. March Brent crude LCOH9, +1.90% was at $60.05 in electronic dealings after falling $1.71, or 2.8%, to $59.93 a barrel during the regular session on ICE Futures Europe. The contract lost about 1.7% last week. Both benchmark contract saw their lowest settlements since Jan. 14, according to FactSet data. As to whether the sanctions actually raise the risk of disrupting oil supply from Venezuela, James Williams, energy economist at WTRG Economic, said that answer is “yes and no.” “If Venezuela is willing to continue to send shipments to the U.S. even though Maduro can not get his hands on the money there is no impact,” he said. “The money will go into an account to be released when Venezuela has a legitimate government. “I suspect Maduro will attempt to sell the oil elsewhere,” said Williams. “The threat is Maduro’s reaction.”
Oil prices edge up on US sanctions against Venezuela - Oil prices rebounded on Tuesday from steep losses in the previous session after Washington imposed sanctions on Venezuelan state-owned oil firm PDVSA in a move that may curb the country's crude exports.Despite the move, which comes as the U.S government looks to pile pressure on President Nicolas Maduro to step down, traders said ample global oil supply and an economic slowdown, especially in China, were keeping crude prices in check.U.S. West Texas Intermediate crude futures were up $1.84, or 3.5 percent, at $53.83 per barrel at 10:05 a.m. ET (1505 GMT). WTI fell 3.2 percent in the previous session.International Brent crude futures rose $1.73, or 2.9 percent, to $61.66 per barrel, after tumbling nearly 2 percent on Monday.Venezuela has the world's biggest proven oil reserves, but its potential has not been realized due to a lack of investment. The country is also a member of OPEC, which is implementing a supply cut deal."The Latin American country is predominantly the producer of heavier crude, exactly what (U.S. Gulf) refiners are thirsty for," PVM said in a note."They will now have to turn elsewhere (possibly to Mexico, Saudi Arabia and Iraq) to satisfy their needs for this type of crude, which would inevitably lead to a price spike."Venezuela's exports fell to little more than 1 million barrels per day in 2018 from 1.6 million bpd in 2017, according to Refinitiv ship tracking data and trade sources.The United States has been the biggest buyer of Venezuelan oil despite their political differences, taking around half of the country's export volumes, followed by India and China.Petromatrix estimated that Venezuelan exports will drop by around 500,000 barrels a day under current conditions.While news of the sanctions against Venezuela made headlines, analysts said the fundamental issue for global oil trade remained plentiful supply. Global oil supply remains high largely due to a more than 2 million bpd increase in U.S. crude oil production last year, to a record 11.9 million bpd.
Oil Prices Bounce On Venezuela Turmoil And Saudi Cuts - After a selloff on Monday, oil prices steadied at the start of trading on Tuesday. Renewed concerns over Chinese growth weighed on crude prices on Monday, with WTI and Brent falling more than three percent. It was the largest single-day decline in a month. Meanwhile, the U.S. oil rig count jumped by 10 last week, a sign that the U.S. shale industry could be adding rigs back into operations. “We’re seeing oil prices really start to break down here,” Phillip Streible, senior market strategist at RJO Futures in Chicago, told Reuters on Monday. “One of the factors that played in is the rising rig count that we saw on Friday.” The Wall Street Journal reported that U.S. Vice President Mike Pence was in communication with Juan Guaidó prior to Guaidó’s declaring that he was the rightful president. The report suggests that the U.S. effort at regime change in Venezuela has been underway for some time and is tightly coordinated. The Venezuelan military is sticking with President Nicolas Maduro for now, but the WSJ report suggests the U.S. government is determined to topple him. Saudi oil minister Khalid al-Falih said that Saudi Arabia would lower its oil production in February to just 10.1 million barrels per day, down from 10.2 mb/d this month. The reduction would also be lower than Riyadh’s commitments as part of the OPEC+ deal – its limit is set at 10.33 mb/d. “Saudi Arabia will be well below the voluntary cap that we agreed to” and will produce below its ceiling “for the full six months” of the deal, al-Falih told Bloomberg. EQT, Antero Resources and Gulfport Energy have cut their spending plans for 2019 amid a decline in natural gas prices and pressure from investors on returns. The U.S. shale gas revolution, more than a decade old, has failed to produce the juicy profits that have long been expected. Now, investors are clamoring for a shift in focus away from production growth, with a priority on shareholder returns. U.S. shale gas companies have badly trailed the S&P 500. EQT announced a spending cut of $700 million relative to 2018.
Oil prices up 2 pct following U.S. sanctions on Venezuela (Reuters) - Oil prices gained more than 2 percent on Tuesday after the United States imposed sanctions on state-owned Venezuelan oil company PDVSA, a move likely to reduce the OPEC member’s crude exports and relieve some global oversupply worries. International Brent crude oil futures were up $1.39 to settle at $61.32 a barrel, a 2.32 percent rise, while U.S. West Texas Intermediate (WTI) crude futures increased $1.32 to settle up $53.31 a barrel, or 2.54 percent. Venezuela is among the world’s largest heavy crude oil producers, and the United States has been its biggest client, taking about half the country’s export volumes.. The Trump administration’s restrictions on Venezuelan crude, aimed at driving President Nicolas Maduro from power, stop short of banning U.S. companies from buying oil from the Latin American country. However, proceeds from such sales will be put in a “blocked account” that should deter PDVSA from shipping crude to the United States. “Today’s price advance looked like a delayed reaction to yesterday’s Venezuelan headlines as traders may have had second thoughts about the impact on domestic oil supplies,” said Jim Ritterbusch, president of Ritterbusch and Associates in a note. Additionally, “possibilities that some Gulf coast refiners may need to pay up for alternative stocks from such places such as Saudi Arabia that has already suggested that they will be steering cargoes away from the U.S.,” he wrote. Venezuela’s exports have already fallen to little more than 1 million barrels per day (bpd) in 2018 from 1.6 million bpd in 2017, according to Refinitiv ship-tracking data and trade sources. Petromatrix estimated that Venezuelan exports will drop by about 500,000 barrels per day under current conditions. Venezuela is also a member of the Organization of the Petroleum Exporting Countries, which is implementing a supply cut deal to support prices. Russia, OPEC’s biggest non-member ally, and China have both publicly denounced the sanctions. Meanwhile, Libya’s biggest oilfield, El Sharara, will remain shut until departure of an armed group occupying the site, the head of National Oil Corp said.
Oil Holds Biggest Gain in More Than a Week -- Oil held its biggest gain in more than a week as investors assessed the impact of U.S. sanctions against Venezuela, while waiting for the outcome of trade talks between Washington and Beijing. Futures in New York were steady after climbing 2.5 percent on Tuesday. Venezuela is considering declaring force majeure with the U.S. after the White House effectively banned American companies from purchasing its crude. The U.S. and China sit down in Washington on Wednesday for two days of high-level discussions after Treasury Secretary Steven Mnuchin told the Fox Business Network that he expected “significant progress” in the talks. Oil is trading in its tightest range in four months as the Organization of Petroleum Exporting Countries and its allies trim output to fight a global glut driven by record U.S. production. The crisis in Venezuela has so far had only a limited impact on prices as it doesn’t change the overall supply and demand picture. Restoring the country’s output could take years, according to Jeff Currie, head of commodities research at Goldman Sachs Group Inc. “There’s little room for oil to gain significantly unless the political situation in Venezuela blows up,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. in Seoul. “Investors are also closely watching what happens with the trade talks in Washington.” West Texas Intermediate crude for March delivery fell 6 cents to $53.25 a barrel on the New York Mercantile Exchange at 3:29 p.m. in Singapore. The contract climbed $1.32 to close at $53.31 a barrel on Tuesday, the biggest advance since Jan. 18. Brent for March settlement was 3 cents lower at $61.29 a barrel on the London-based ICE Futures Europe exchange. The contract increased $1.39 to $61.32 in the previous session. The global benchmark crude was at a $8.03 premium to WTI. Investors are waiting to see how Venezuela responds to the latest American sanctions. If Caracas decides to declare force majeure on its crude exports to the U.S. market, almost 12 million barrels could be affected next month, according to a loading program seen by Bloomberg. Force majeure protects a party from liability if it can’t fulfill a contract for reasons beyond its control.
Trump May Soon Need to Choose between Battling OPEC Nations and Cheap Oil-- President Donald Trump may soon need to choose between two recurring fixations: battling OPEC nations, and cheap oil. After announcing sanctions on Venezuela’s state-run oil company PDVSA this week, the president is now in conflict with two of the cartel’s founding members, having imposed similar measures against Iran late last year. Trump is pressuring the Islamic Republic over its nuclear program, and squeezing Venezuela’s President Nicolas Maduro for fraudulently clinging to power. Iranian shipments have already slumped by 1.3 million barrels a day, and about 500,000 barrels a day of Venezuelan crude which has been banned by the U.S. will soon need to find new buyers. The overall disruption could be much bigger if America succeeds in choking off Iran’s exports entirely, or if sanctions on Venezuelan oil are applied more broadly, as suggested in a tweet from National Security Adviser John Bolton. However, knocking out oil-supplies from the petro-states is likely to conflict with another of the U.S. president’s goals: lowering gasoline prices to appease motorists and stimulate the American economy. Though prices remain at about $54 a barrel in New York, 30 percent below the four-year peak reached last October on concern that Trump may not grant waivers for buyers of Iranian crude, that calm might not last, and the U.S. may need to decide between the two aspirations. In May, Trump will decide whether to renew temporary exemptions that allowed eight of Iran’s customers -- including China and India -- to continue buying reduced quantities from the Islamic Republic. If these waivers aren’t extended, Iranian shipments will likely slump further. To fill the gap, Treasury Secretary Steve Mnuchin has said America’s Middle East allies, Saudi Arabia in particular, are ready to restore production. The kingdom ramped up output to record levels last autumn when it seemed Trump was serious about shutting Iran’s trade down completely. The question is whether the Saudis and their allies can increase production high enough, and keep it there, to compensate for simultaneous losses in Iran and Venezuela. Although the kingdom sits on about 1.4 million barrels a day of spare production capacity, according to the International Energy Agency, even that could be strained by a deep and prolonged outage.
WTI Extends Gains After Smaller Than Expected Crude Build - Oil prices jumped higher today after U.S. Treasury Secretary Steven Mnuchin signaled a truce is possible in the trade war with China amid multiplying threats to global crude supplies. “The weekly inventory data will start to regain some importance over the coming weeks, as the market is looking for signs that OPEC cuts are making their way to the States," says Bart Melek, head commodity strategist for TD Securities in Toronto, in an emailed note. API:
- Crude +2.098 (+3mm exp)
- Cushing -682k (+100k exp)
- Gasoline +2.15mm (+2.4mm)
- Distillates +211k (-2mm exp)
A smaller than expected crude build sparked only very modest buying in WTI as builds in gasoline and distillates (surprise) spoiled the bulls' party, WTI hovered around $53.20 ahead of the API print (up over 2% on trade hopes) and lifted very modestly as the data hit... “You’re getting a little bit more of a security premium built into the price today," said John Kilduff, founding partner of hedge fund Again Capital LLC in New York. “As more of the details emerge of Maduro standing tough and trying to send the oil away from Gulf Coast refiners, and the Trump administration planning to freeze bank accounts and lock up opposition, the situation is on the boil."
WTI Jumps Above $54 After Small Crude Build, Biggest Gasoline Draw In 3 Months - WTI prices are higher overnight following a smaller than expected crude build from API and ongoing concerns about Venezuela sanctions disrupting supply. mBloomberg Intelligence Senior Energy Analyst Vince Piazza comments that:Uncertainty over U.S.-China trade talks and Venezuela possibly declaring force majeure on its exports add to an already-clouded oil-market outlook. Refinery utilization has retreated while U.S. crude production remains resilient, and recent rig counts suggest a rekindling of activity. Slowing demand, an ebbing global economic growth outlook and ample gasoline supplies inform our reserved stance on balances, despite OPEC’s compliance with capacity curbs. The cartel and its partners will need to extend curbs into 2H to support benchmarks. DOE:
- Crude +919k (+3.15mm exp)
- Cushing (+100k exp)
- Gasoline -2.24mm 30 (+2.4mm)
- Distillates (-2mm exp)
After last week's huge surprise crude build, expectations were for another big build but DOE reports a mere 919k rise in inventories (well below the +3.15mm exp). Additionally, gasoline stockpiles dropped for the first time since November, by the most since October... Production flatlined Week over week at record highs. U.S. Crude Imports from Saudi fall to the lowest since Oct. 2017. WTI traded just below $54 ahead of the DOE print and spiked above it on the small build...
Oil rises as US fuel stocks fall, extending gains from Venezuela sanctions -- Oil prices rose on Wednesday, boosted by concerns about supply disruptions following U.S. sanctions on Venezuela's oil industry but pegged back by uncertainty over the global economy. Futures extended gains after weekly data showed a smaller-than-anticipated jump in U.S. crude inventories and an unexpected drop in gasoline stockpiles. U.S. West Texas Intermediate crude futures rose $1.22, or 2.3 percent, to $54.53 per barrel around 11:04 a.m. ET (1504 GMT). International Brent crude oil futures were up $1.13, or nearly 1.8 percent, at $62.45 per barrel. Crude inventories rose by 919,000 barrels in the last week, the U.S. Energy Information Administration reported. Analysts in a Reuters poll expected an increase of 3.2 million barrels. Meanwhile, gasoline stocks fell by 2.2 million barrels, compared with analysts' expectations for a 1.9 million-barrel gain. Distillate stockpiles, which include diesel and heating oil, shrank by 1.1 million barrels, versus expectations for a 1.4 million-barrel drop, the EIA data showed. Washington on Monday announced export sanctions against Venezuela's state-owned oil firm PDVSA, limiting transactions between U.S. companies that do business with Venezuela through purchases of crude oil and sales of refined products. "The sanctions so far have been mostly disruptive for refiners on the U.S. Gulf Coast, who are being forced to seek alternative heavy crude supplies, and have stepped up purchases from Canada," said Vandana Hari of Vanda Insights, an energy consultancy. Venezuelan President Nicolas Maduro said on Wednesday he was ready for talks with the opposition although he ruled out snap elections. The sanctions aim to freeze sale proceeds from PDVSA's exports of roughly 500,000 barrels per day of crude to the United States. Its output was already near seven-decade lows while the sanctions affect Venezuelan supply only to the United States, and analysts believe volumes could eventually be rerouted to China and India at discounts. "The main risks for supply could come from a violent confrontation within the country, damaging the oil infrastructure,"
U.S. oil prices end at 2-month high on modest crude supply rise, Venezuela turmoil - Oil futures settled higher Wednesday, with weekly domestic crude supplies up less than expected and U.S. sanctions on Venezuela’s state-run oil company lifting U.S. benchmark prices to their highest finish in over two months. The U.S. sanctioned Venezuela’s Petróleos de Venezuela SA, or PdVSA, earlier this week, raising the risk of disruptions to global oil supply from the Organization of the Petroleum Exporting Countries member, which is also home to the world’s largest oil reserves. West Texas Intermediate crude for March delivery gained 92 cents, or 1.7%, to settle at $54.23 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices logged their highest finish since Nov. 21, according to FactSet data. Month to date, front-month contracts were up 19%, on pace for the best January performance since at least 1985, according to Dow Jones Market Data. March Brent crude rose 33 cents, or 0.5%, to $61.65 a barrel on ICE Futures Europe. The contract expires at Thursday’s settlement. The Energy Information Administration reported Wednesday that domestic crude supplies edged up by 900,000 barrels for the week ended Jan. 25. That was smaller than the 3.1 million-barrel rise expected by analysts polled by S&P Global Platts. The American Petroleum Institute reported on Tuesday a weekly climb of about 1.1 million barrels, but the group also upwardly revised the previous week’s total by roughly 1 million barrels. “A precipitous drop in imports has helped stave off another big build to crude stocks,” said Matt Smith, director of commodity research at ClipperData, referring to the EIA data. “A whopping drop in imports of over 1 million barrels per day has helped mitigate the impact of a substantive drop in refining activity — down nearly 600,000 bpd — leading to a minor build to crude stocks.”
Oil surges more than 18 percent this month for its best January on record -- U.S. crude oil surged this month to post its best January performance on record, breaking a three-month losing streak that saw futures lose nearly half of their value. Crude futures have powered through a steady flow of weak economic data from China, the world's second biggest oil consumer, amid an ongoing trade dispute with Washington. The energy complex has been boosted by OPEC-led production cuts aimed at draining oversupply and U.S. sanctions on Venezuela, which threaten to disrupt global trade flows and bolster prices. U.S. West Texas Intermediate crude prices ended Thursday's session down 44 cents at $53.79 a barrel, after hitting a two-month high at $55.37. WTI posted an 18.5 percent monthly gain, its biggest jump since April 2016 and its best January since the futures began trading in 1983. International benchmark Brent crude for March delivery rose 24 cents at $61.89 a barrel, finishing January up 15 percent, also the best monthly gain since April 2016. Brent's more heavily traded April contract was down 1 percent at $60.89 around 2:30 p.m. ET. Prices tumbled after U.S. Energy Information Administration reported U.S. oil production rose to an all-time high 11.9 million barrels per day in November, up from 11.5 million bpd in October. Preliminary weekly figures have long telegraphed the jump, confirmed by EIA's first monthly reading on Thursday. The drop also came after President Donald Trump said he wants a big trade deal with China, but may not reach an agreement by March 1, the deadline to prevent a rise in tariffs on hundreds of billions of dollars in goods. "I'm not sure President Trump's comments about the China situation were helpful to the bull case," Kilduff said some traders may be taking profits after WTI jumped above $55 a barrel on Thursday for the first time in over two months. Despite the strong monthly performance, both benchmarks remain in bear market territory, with WTI down about 30 percent from its 52-week high in October. The crude price collapsed to roughly 18-month lows in the final quarter of 2018 on growing oversupply, weak demand signals and technical trading.
Oil Rises 18% In Best January On Record - Oil prices gained roughly 18 percent in January, the largest gain for that month of the year on record. “A break through $55 in WTI and $65 in Brent would be a very bullish signal for these and could be the catalyst for more significant upside, with oil having stabilised over the last few weeks following the post-Christmas bounce,” Craig Erlam, senior market analyst at brokerage OANDA, wrote in a briefing. Prices lost ground on Thursday, but there are plenty of bullish landmines lurking in the market, ranging from Venezuela and Iran outages, OPEC+ cuts, and slowing U.S. shale growth. The U.S. government is considering a release of oil from the strategic petroleum reserve (SPR), timed with potential outages from Venezuela. Venezuela has exported roughly 500,000 bpd to the U.S., and because of American sanctions, those volumes are now in jeopardy. The only problem is that the SPR does not contain heavy crude. Already the market for heavy oil is tight while that for lighter oil is much looser. U.S. refiners that import heavy oil from Venezuela are now looking for alternatives. Canada and Mexico have heavy oil, but have little scope to increase supply. “The region with the biggest shortfall of Venezuelan crudes, either through sanctions or inadvertently through further production declines is the U.S.,” said Michael Tran, commodity strategist at RBC Capital Markets, in a note. U.S. domestic medium and heavy sour grades, including Mars Sour, have seen their prices jump. “It’s nuts. Everything with sulfur in it is getting bid,” one U.S. crude trader told Reuters, referring to sour oil that is typically less desired. Valero, Chevron, and of course, Citgo, are the largest importers of Venezuelan oil. PDVSA is trying to work around U.S. sanctions, seeking fuel swaps and intermediaries. “We are trying to redo the contracts. It is not yet entirely clear how because customers are being individually called, but we are studying alternatives,” a PDVSA source told Reuters. Rosneft has made billions of dollars’ worth of loans to Venezuela and could suffer if the U.S.-backed coup is successful. Rosneft’s share price fell last week after the U.S. recognized the opposition.
Oil prices rise as US reports big surge in employment - Oil prices jumped with the stock market on Friday after the United States reported a surge in employment in its monthly jobs report. U.S. payrolls rose by 304,000 in January even as the country weathered the longest government shutdown in history. International Brent crude oil futures were up 88 cents, or 1.5 percent, at $61.72 per barrel around 9:35 a.m. ET (1435 GMT). U.S. West Texas Intermediate (WTI) futures were up 66 cents, or 1.2 percent, at $54.46 per barrel. Crude traded flat earlier on Friday as hopes the United States and China could soon settle their trade disputes offset data from China that stoked concerns over an economic slowdown that could dent demand for fuel. Global markets gained support from comments on Twitter by U.S. President Donald Trump on Thursday, saying he would meet Chinese President Xi Jinping soon to try to resolve a trade standoff, though Trump later warned that he could postpone talks if a comprehensive deal remains elusive. "Many traders recognize that sense is likely to prevail and a deal will be struck after the summit - although the shape of any deal will continue to drive a jittery market," Cantor Fitzgerald Europe said in a note. "This has overshadowed bullish indicators." Crude prices were weighed down by a survey on Friday that showed China's factory activity shrank by the most in almost three years in January, reinforcing fears that a slowdown in the world's second-largest economy is deepening. The U.S.-China trade dispute and tightening financial conditions worldwide have hurt manufacturing activity in most economies, including in China, where growth last year was the weakest in nearly 30 years. With Chinese industry a key consumer of fuels such as diesel, such a slowdown is also likely to hit fuel demand.
Oil prices up on strong U.S. jobs data, Venezuela sanctions - (Reuters) - Oil prices rose about 3 percent on Friday on upbeat U.S. jobs data and signs that U.S. sanctions on Venezuelan exports have helped tighten supply, then extending gains after weekly data showed U.S. drillers cut the number of oil rigs. Brent crude oil futures rose $1.91 a barrel, or 3.14 percent, to settle at $62.75 a barrel. The international benchmark notched a weekly gain of about 1.9 percent. U.S. West Texas Intermediate (WTI) futures ended the session at $55.26, up $1.47 a barrel or 2.73 percent and gained about 3 percent on the week. Prices climbed to session highs after General Electric Co’s Baker Hughes energy services firm reported that U.S. energy firms cut the number of operating oil rigs for a fourth week in the past five, bringing the count to the lowest in eight months. Last week’s data showed the rig count in January fell the most in a month since April 2016. Oil prices got a boost from Wall Street after surprisingly strong U.S. job growth data fed demand for equities. Washington imposed sanctions on Venezuela’s Petróleos de Venezuela SA this week, keeping tankers stuck at ports. On Friday, the U.S. Treasury Department provided details. “We are beginning to see the impact to crude supplies from the sanctions on Venezuela. It has driven up domestic crude prices, cutting into refiner margins,” Andrew Lipow, president of Lipow Oil Associates in Houston, said. “That, combined with Saudi cuts and Libyan production declines has changed market sentiment as we appear to be moving toward a better balanced supply situation.” Some U.S. refiners have begun reducing crude processing as sanctions have boosted oil costs and as gasoline margins crashed to their lowest in nearly a decade, market sources told Reuters on Thursday. In January, Saudi Arabia pumped 350,000 bpd less than in December, a Reuters survey showed. Financial markets also gained support from comments on Twitter by U.S. President Donald Trump on Thursday, saying he would meet Chinese President Xi Jinping soon to try to resolve a trade standoff. But Trump later warned he could postpone talks if a deal remains elusive.
Saudi Arabia says it raised $106 billion from 'anti-corruption' drive that swept up royals - Saudi Arabia has wrapped up a long-running corruption probe that captured the market's attention in 2017 after the kingdom detained dozens of prominent princes and businessmen. The Saudi Royal Court on Wednesday said the kingdom has retrieved more than 400 billion Saudi riyals — or about $106 billion — in cash, real estate and other assets. The wave of arrests in November 2017 caught the world by surprise and turned the Ritz-Carlton in the capital city of Riyadh into a gilded prison for the scores of Saudis swept up in the campaign. The kingdom cast the detentions as part of a crackdown on entrenched corruption, while some observers said the detentions were orchestrated to consolidate power under Crown Prince Mohammed bin Salman, the next in line to King Salman bin Abdulaziz. Prince Mohammed chaired the corruption committee. Allegations of abuse and reports that detainees were being asked to exchange their assets for freedom rattled the market at a time when Saudi Arabia was accelerating its bid to attract foreign investment. The arrests came just days after the Saudis hosted an inaugural international investment summit in Riyadh. Among the prominent detainees were Prince Alwaleed bin Talal, Saudi Arabia's most prominent investor, and Prince Mutaib al-Saud, the former head of the country's National Guard. Concerns about Prince Mohammed's rule following the arrests were compounded one year later when Saudi dissident Jamal Khashoggi went missing after entering a Saudi consulate in Istanbul, Turkey. After initially denying any responsibility, the kingdom admitted Saudi agents had killed Khashoggi, a Washington Post columnist and U.S. resident, inside the consulate.
UN Experts Investigating Khashoggi’s Death Banned From Entering Crime Scene — — A team of United Nations (UN) human rights experts carrying out an international investigation into the killing of Saudi journalist Jamal Khashoggi have been banned from entering the crime scene at the Saudi consulate in Istanbul, Turkey. Leader of the investigation Agnes Callamard and her team of rights experts recently announced that it had submitted a request to the Saudi authorities to enter the consulate’s premises and meet with Saudi officials in Istanbul, Turkish NTV reported yesterday. The special rapporteur said that she was waiting for the Saudi authorities’ response, but explained that her team was able to carry out a survey on the area surrounding the consulate. “We are respectfully calling on the authorities to give us access,” she was quoted by Reuters as saying. The team arrived in Istanbul on Monday for a week-long visit to investigate the circumstances of Khashoggi’s killing on 2 October. Callamard said she had initiated the inquiry on her own, as the UN “has given no intention to conduct an international criminal investigation”. During the visit, Callamard and her team met with Istanbul’s Chief Prosecutor Irfan Fidan – who is heading the investigation – and the Turkish Foreign and Justice Ministers Mouloud Chavushoglu and Abdulhamit Gül respectively. The expert on extrajudicial, summary or arbitrary killing pointed out that she would present her report on the investigation to the UN’s Human Rights Council in June. Callamard is a long-standing advocate of human rights and freedom of expression. She was appointed as a UN special rapporteur in 2016 to investigate arbitrary executions. Khashoggi, a Washington Post columnist who wrote critically about Saudi Crown Prince Mohammed Bin Salman (MBS), was killed on 2 October after he entered the Saudi Consulate in Istanbul to obtain documents for his upcoming marriage. He was killed in what Turkish and US officials have described as an elaborate plot..
US Interrogators are Working in UAE Prisons in Yemen — US interrogators are present in UAE prisons in Yemen, the Daily Beast has revealed today, providing shocking evidence that the American military is a witness to the torture of Yemenis. In a series of interviews, two former detainees have testified to being interrogated by men with American accents, who looked on as they were beaten and electrocuted. “They would strip me naked, they would beat me very harshly and slowly you start to understand the dynamics in the room. These are the two people, one of them is overseeing the whole interrogation and the other is doing the questioning and ordering the torture,” a Yemeni man identified only as Salvatore said, suggesting that the US was more than an unwilling observer. In December, the Pentagon formally acknowledged for the first time that US military personnel operate in the Yemen prisons: “US forces do not conduct detention operations in Yemen; rather, US forces conduct intelligence interrogations of detainees held in partner custody,” the Pentagon reported. However, the latest accounts are the first that prove that the US is not only a witness but a partner to the torture of detainees. Both men say they saw Americans in military uniforms, complete with American flag insignia, and that a larger US presence was witnessed in a prison in Aden, where they were electrocuted, beaten and sexually threatened, and where others have been raped.
UAE Gender Equality Awards Go To All Male Recipients - For those not holding their breath, the results are in from the United Arab Emirates' gender equality awards. Perhaps to be expected when a foremost Sunni Gulf autocratic oil and gas state that mimics a medieval feudal monarchy decides to showcase its "progress" in the area of gender equality in the workplace, we have something that sounds straight out of The Onion, but is all too real. As The Guardian reports, social media exploded in laughter and ridicule "after it emerged that all of the winners of an initiative designed to foster gender equality in the workplace were men." Indeed the "awards ceremony" photo op was classic, featuring an all-male cast of honorees receiving awards in the following categories: Best Personality for Supporting Gender Balance, Best Federal Entity for Supporting Gender Balance, and the Best Initiative for Supporting Gender Balance.UAE Vice President and ruler of Dubai, Sheik Mohammed bin Rashid al-Maktoum, bestowed the certificates and medals in a ceremony on Sunday on the male winners representing various government ministries, including the finance ministry, the federal competitiveness and statistics authority and ministry of human resources re spectively.Thus the additional absurd element is that the UAE government was essentially handing out government "gender equality" recognition awards to itself. This included top ranking generals given that the deputy prime minister and minister of the interior, Lt Gen Sheikh Saif bin Zayed al-Nahyan, received the “best personality supporting gender balance” — supposedly for his tireless efforts implementing maternity leave in the UAE’s military.
IAEA: Iran Continues Meeting Commitments Under Nuclear Deal - As has been exclusively the case in recent years, IAEA Chief Amano Yukiya issued a statement Wednesday confirming once again that Iran is still meeting all commitments it has under the P5+1 nuclear deal. Under the deal, the IAEA is responsible for verifying that Iran is meeting all of its requirements under the pact. Since the deal’s implementation, the IAEA has consistently affirmed that Iran is meeting those requirements. Which is a source of tensions between the international watchdog and the Trump Administration. The administration has repeatedly declared Iran in violation, but can’t get anyone else to confirm that, and has pushed the IAEA to make new demands on Iran, which the IAEA has said are unwarranted. As the international community tries to save the P5+1 deal after the US withdrew from it, the IAEA reports are increasingly important, in underscoring that the deal was, and is, wholly intact, and it was only the US that decided to abandon it.
Iran inches closer to unveiling state-backed cryptocurrency - Shut out of the global financial system, Iran is inching closer to a workaround to US sanctions with the possible unveiling of its first state-backed cryptocurrency in the near future. The virtual currency is anticipated to be announced at the annual two-day Electronic Banking and Payment Systems conference, which kicks off on January 29 in the capital, Tehran. The theme of this year's gathering is "blockchain revolution". The blockchain is a fixed distributed ledger technology that allows a network of computers to verify transactions between two parties, as opposed to validating them through a trusted, third-party entity. Details of Iran's new cryptocurrency were revealed last summer, after the Trump administration started reimposing sanctions over alleged "malign activities". The biggest blow to Iran's economy came in November, when some of its banks were barred from SWIFT, the Belgian-based global messaging system that facilitates cross-border payments. Countries excluded from SWIFT cannot pay for imports or receive payments for exports, leaving them crippled financially, and having to rely on alternative methods of moving money. Iran's cryptocurrency is expected to be rolled out in phases, first as a rial-backed digital token, to facilitate payments between Iranian banks and other Iranian institutions active in the crypto space, and later possibly as an instrument for the Iranian public to pay for local goods and services.
Human Rights Double Standard- Iranian Sanctions Impact the Most Vulnerable - In January 2018, following the killing of Iranians in European countries, the EU imposed new sanctions on Iran. This came after the Trump administration imposed sanctions on Iran after withdrawing from the Joint Comprehensive Plan of Action in August 2018. The International Court of Justice then issued a decision ordering the United States to lift the sanctions linked to humanitarian trade, food, medicine, and civil aviation on the basis of the 1955 US-Iran Amity Treaty. This led the Iranian foreign minister, Javad Zarif, to state on Twitter that the sanctions disregarded Iranians’ human rights.Iran is one of the countries with a long-standing history of international sanctions. The country has been impacted by three types of sanctions: United Nations sanctions, European Union comprehensive multilateral sanctions and United States unilateral sanctions. The impact of these sanctions on Iranian citizens’ human rights is under-estimated. Yet, decades of sanctions have had a deep effect on people’s lives and on society, as illustrated by the ongoing twitter testimonies found under the hashtag “TargetingOrdinaryIranians.”The renewal of sanctions against Iran raises the necessity of examining the human rights’ impact of such restrictive punishments. The main question at hand is to understand why the international community seems to support sanctions despite the violations of human rights law. How far are states ready to go when violating human rights in the name of controlling the Iranian authorities, with perhaps, the goal of changing the governance system in place? In 1996, Reisman observed sanctions rarely reach their targets – the political and military elite – and deeply impacted the population in Haiti. It is indeed impossible to separate sanctions from their economic and social impact on a population. Studies demonstrate sanctions have the same effect as war. This is why the Iranian authorities have focused on denouncing the sanctions on human rights grounds. Gholamali Khoshroo, Iran’s representative to the United Nations, stated sanctions were morally wrong and violate basic human rights.
Syria rewards Iran with raft of agreements - Syria and Iran signed 11 agreements and memoranda of understanding late Monday, including a "long-term strategic economic cooperation" deal aimed at strengthening cooperation between Damascus and one of its key allies in the civil war that has torn the country apart. The agreements covered a range of fields including economy, culture, education, infrastructure, investment and housing, the official Sana news agency reported. They were signed during a visit to Damascus by Iran's First Vice President Eshaq Jahangiri. Syrian Prime Minister Imad Khamis said it was "a message to the world on the reality of Syrian-Iranian cooperation", citing "legal and administrative facilities" to benefit Iranian companies wishing to invest in Syria and contribute "effectively to reconstruction". The agreements included two memos of understanding between the railway authorities of the two countries as well as between their respective investment promotion authorities. In relation to infrastructure, there was also rehabilitation of the ports of Tartus and Latakia as well as construction of a 540 megawatt energy plant, according to Khamis. In addition there were "dozens of projects in the oil sector and agriculture", he added. The civil war has taken an enormous toll on the Syrian economy and infrastructure, with the cost of war-related destruction estimated by the UN at about $400 billion. Iran will stand "alongside Syria during the next phase that will be marked by reconstruction", Jahangiri promised. Iran and Syria had already signed a military cooperation agreement in August while Tehran has supported Damascus economically during the conflict through oil deliveries and several lines of credit.
Defying U.S., European powers set up company to trade with Iran - France, Britain and Germany, defying threats from Washington, are this week executing their plans to set up a special-payments company to secure some trade with Iran and blunt the impact of U.S. sanctions. In the short term, the new company is expected to struggle to achieve even its initial goal of enabling Tehran to import vital food and drugs at affordable prices. After months of delays, people familiar with the plan said Tuesday the three European governments had started the process of registering the company to run a payments channel that would allow goods to be bartered between European and Iranian companies without the need for direct financial transactions. The company should be established by Thursday or Friday, the people said. The company is being registered in France and will be headed by a German official with the French, British and German governments as shareholders — an arrangement intended to ward off U.S. Treasury Secretary Steven Mnuchin’s threat of sanctioning the entity by putting it under the aegis of Washington’s traditional European allies. The European Union promised to create what is known as the special-purpose vehicle as part of efforts to persuade Iran to remain in the 2015 nuclear deal following President Donald Trump’s decision in May to pull the U.S. out of the accord and reimpose sanctions. When many smaller member countries expressed reluctance to host the company or participate directly as shareholders because of U.S. sanctions threats, the bloc’s three biggest powers proceeded with the project.
Israel Wants US to Keep Troops at Military Base in Syria to Counter Iran — As the Pentagon appears to be moving forward on President Trump’s ordered troop draw down from Syria, administration hawks as well as foreign allies like Israel have one final card to play to hinder a total withdrawal. They argue that some 200 US troops in Syria’s southeast desert along the Iraqi border and its 55-kilometer “deconfliction zone” at al-Tanf are the last line of defense against Iranian expansion in Syria, and therefore must stay indefinitely. Despite Trump’s pledge for a “full” and complete American exit, the al-Tanf base could remain Washington’s last remote outpost disrupting the strategic Baghdad-Damascus highway and potential key “link” in the Tehran-to-Beirut so-called Shia land bridge. Foreign Policy magazine identifies this as but the latest obstacle to an actual complete withdrawal of US forces: “Al-Tanf is a critical element in the effort to prevent Iran from establishing a ground line of communications from Iran through Iraq through Syria to southern Lebanon in support of Lebanese Hezbollah,” an unnamed senior US military source told the magazine. Washington’s initial justification for establishing the remote special operations outpost was to train local fighters to counter ISIS; however, not only has ISIS now been driven almost completely underground but Russia has accused US forces at al-Tanf of actually allowing ISIS terrorists to maintain a presence in the area in order to put pressure on Damascus. With the Islamic State now in tatters and defeated, the “counter Iran” argument is being pushed hard in order to convince Trump to keep a small US island of occupation in the heart of a volatile desert region where Syria, Iraq and Jordan meet. Israeli Prime Minister Benjamin Netanyahu is among the foremost foreign allies pushing hard, and “has repeatedly urged the U.S. to keep troops at al-Tanf, according to several senior Israeli officials, who also asked not to be identified discussing private talks,” per Bloomberg. The Israelis have reportedly argued “the mere presence of American troops will act as a deterrent to Iran” even if in small numbers as a kind of symbolic threat.
ISIS could reclaim territory in months without military pressure, warns Pentagon in draft report — A draft Pentagon report warns that without continued pressure, ISIS could regain territory in six to 12 months, according to two U.S. officials familiar with the draft.The finding is in a draft of the Department of Defense Inspector General Quarterly Report about Operation Inherent Resolve that is expected to be released early next week. The report draws on information from the U.S. military, U.S. government agencies, and open source reports.The draft says ISIS is intent on reconstituting a physical caliphateand that with ungoverned spaces in Syria and no military pressure, the terror group could retake land in a matter of months, according to the officials familiar with the report.The report covers the three months from Oct. 1 to Dec. 31, 2018. President Donald Trump announced on Dec. 19 that the U.S. military would be leaving Syria. "We have defeated ISIS in Syria," said Trump via Twitter, "my only reason for being there during the Trump Presidency." This week the Acting Secretary of Defense Patrick Shanahan agreed. "If we wind the clock back two years, I'd say 99.5 percent plus of the ISIS-controlled territory has been returned to the Syrians," he said during a briefing Tuesday. "Within a couple weeks, it'll be 100 percent."The Defense Department Office of Inspector General declined to comment on the draft report prior to its release. The National Security Council had no immediate comment.House Foreign Affairs Committee Chairman Eliot Engel, D-N.Y., responded to the NBC News report about the draft by calling it a clear indication from the Pentagon that “ISIS has not been defeated.”“If the President didn’t ignore his senior intelligence officials, perhaps he would arrive at the same conclusion,” Engel said.
Netanyahu misleads the Israelis about cross-border tunnels and “Operation Northern Shield”: Is he preparing an electoral war on Lebanon? - There is much talk in the Levant, in Syria and Lebanon, that Israel, and more precisely Prime Minister Benyamin Netanyahu, is seriously contemplating a large-scale cross-border battle that could escalate into war to ensure his re-election. Notwithstanding his claims of a “tremendous success in “Operation Northern Shield” (ONS) launched last December, Netanyahu is sending the Israeli Army to look for other tunnels, away from the media spotlight. The Prime Minister’s premature announcement of the success of the ONS shows that he has become the hostage of his own optimism, which he would like to invest in his forthcoming re-election. Netanyahu has managed to create serious panic among the Israeli population bordering Lebanon, and further inland, by confirming that Hezbollah possesses precision missiles capable of reaching any chosen target. Meanwhile, the secret underground infrastructure between Lebanon and Israel is not entirely under Israeli control and could be decisive in any future war involving the use of infantry for the purpose of abducting Israeli soldiers or officers or attacking settlments. Hezbollah has modern excavation equipment and the tunnels will be essential for moving any war that Israel might start out of south Lebanon into territory controlled by Israel’s enemy. According to well -informed sources, the chances are strong that Israel may start a large battle against Lebanon, potentially leading to war. These sources believe that “Netanyahu may opt to use guided missiles and air force bombing with the goal of limiting Hezbollah’s missile capability. In that case, infantry would not be required and the Israeli army would be limited to protecting its borders and ensuring that no infiltration is possible through underground cross-borders tunnels”.
US Intel Chief: Israel Strikes in Syria May Lead to Regional War - US Director of National Intelligence Dan Coats told the Senate Intelligence Committee on Tuesday that he believes Iran wants to “avoid a major armed conflict with Israel,” but that continued Israeli attacks on targets in Syria may ultimately spark an Iranian retaliation. “Israeli strikes that result in Iranian casualties increase the likelihood of Iranian conventional retaliation against Israel.” Coats added that Israeli strikes are raising growing concerns that the “conflict will escalate.” Coats’ comments actually reflect an assessment from Israeli President Reuven Rivlin made just a day before, that he believes Iran will “retaliate with greater force” against northern Israel, and that Israel can no longer trust in “understandings” with Russia to avoid Iran retaliating against attacks. Israeli officials used to be secretive about attacking Iranian targets, but with an election looming are increasingly bragging up the strikes as proof that they are being tough with Iran. Despite this, Coats says there is no sign the Israeli strikes are deterring Iranian plans to stay inside Syria. Israeli officials have emphasized their intention to keep acting against Iran in Syria, despite it having not accomplished anything so far, and despite concerns from both US and Israeli officials that all it is doing is risking an escalation.
U.S. sees contours of peace accord with Taliban to end war in Afghanistan (Reuters) - The United States and the Taliban have sketched the outlines for an eventual peace accord to end 17 years of war in Afghanistan, a U.S. special envoy said on Monday, but there was no sign the insurgent group had accepted key U.S. demands. “We have a draft of the framework that has to be fleshed out before it becomes an agreement,” U.S. special peace envoy Zalmay Khalilzad told the New York Times in an interview in Kabul after six days of talks with the Taliban. “The Taliban have committed, to our satisfaction, to do what is necessary that would prevent Afghanistan from ever becoming a platform for international terrorist groups or individuals.” There was no sign, however, that the Taliban had agreed to U.S. demands such as committing to a ceasefire before the withdrawal of U.S. troops or that it engage in direct talks with the U.S.-backed government in Kabul, analysts said. “While the progress in Doha has been the most significant to date, reaching a final agreement is far from guaranteed, as (these) two major sticking points could still derail the process,” Ahmad Majidyar, a fellow at the Middle East Institute, wrote on the Washington think tank’s website. Another U.S. official in Kabul, who spoke to Reuters on condition of anonymity, described “significant progress” in the talks in Qatar, but said more negotiations were needed on the issue of the timing of the ceasefire, which looms as a sticking point in the next round of talks on Feb. 25. Taliban negotiators want a full withdrawal before a ceasefire, but the Americans want the reverse, the official said.
Survey Shows 80% of Turks Perceive US as the ‘Most Dangerous’ Country — According to a recent survey conducted by Kadir Has University a whopping 81.9 percent of Turks consider the United States the most dangerous country for Turkey.Israel follows the US with 63.3 percent, according to the survey, titled “Turkey Social and Political Trends Research,” published by Turkish media outlets on Wednesday.The opinion poll was conducted on 1,000 people over the age of 18 in face-to-face interviews between Dec. 12 and Jan. 4 in 26 provinces. The results of the survey, which has been carried out annually since 2010, were announced at a press conference by the university on Wednesday.The same research found that 41.9 percent of respondents want Turkey to leave NATO, while 58.7 percent are in favor of continuing the country’s membership, in effect since 1952.Amid strained relations with the European Union, still almost half of the nation is in favor of continuing membership negotiations with the bloc (48.9 percent).Nearly one-fifth of the country (18.8 percent) believes Turkey is under threat of division.In accordance with the traditional trends in the country, the majority of respondents describe themselves as conservative/religious, at 44.4 percent.According to Turks, the most important problem their society faces these days is unemployment (27 percent) and the high cost of living (17.8 percent). More than half of the society, 57.1 percent, says the economy is deteriorating. In line with a recent exodus from the country, the survey found that one out of five people would like to leave Turkey to live abroad if they got the chance.
Chinese Manufacturing Remains In Contraction To Start 2019 - With the first official data of 2019, China's Manufacturing PMI printed below 50 - signaling a contraction - for the second month in a row in January as employment slumped to a multi-year low. We note that January economic data may be subject to distortion due to the Spring Festival holiday, which starts on Feb 5 this year, 11 days earlier than last year. Catching down to retail sales inglorious slowdown, China's official manufacturing PMI printed 49.5 in January... near the lowest since Feb 2016 Employment contracted to multi-year lows, Purchase Quantities slipped as did inventories and backlogs as it appears the record-breaking surge in easing did nothing to rejuvenate a struggling manufacturing sector. Worse still, with Yuan surging to six-month highs, which will do nothing to prompt a renaissance in Chinese exports... There is a silver lining to the data though as non-manufacturing rebounded from 53.8 to 54.7. However, both manufacturing and non-manufacturing both saw future expectations notably weaken.
Chinese Growth: A Balancing Act - According to preliminary estimations of the National Bureau of Statistics of China, the country’s GDP grew 6.4% year-on-year in Q4 2018, the same rate as during the worst of the global recession (in Q1 2009, see Figure 1). For the whole of 2018, the growth rate was 6.6%, the lowest since 1990. And last week, the IMF published its updated World Economic Outlook (see Table 1), in which Chinese growth in 2019 and 2020 is projected to be even slower (6.2%). Although there was no revision for China, the IMF cut its forecast for global growth, while Gita Gopinath, the IMF’s new chief economist, warns that “risks to more significant downward corrections are rising”, including the possibility that Chinese growth slows down faster than expected. Although there is a consensus among commentators that slower growth is hardly surprising, they also agree that there is more than meets the eye when it comes to Chinese growth.The first concern is that the actual situation on the ground is worse than the GDP numbers let on. Michael Pettis at Carnegie Endowment for International Peace subscribes to this view. He argues that true growth may be as low as half of what is reported, but he puts forward three distinct reasons as to why there might be such a discrepancy. The first two are not limited to, though remain particularly relevant for, China: GDP may be doing a poor job at capturing the creation of real economic value, or the reported numbers may not be accurate. But, Pettis argues, the third reason is far more worrying: GDP growth is an input to the Chinese economic system – as in, a target set at the central-government level well ahead of time – rather than the output. Then several actors, such as local governments, engage in the spending and borrowing required to achieve the target. As long as this economic activity is productive, as Pettis claims was the case until a decade or so ago, it is a non-issue. Even if it is not productive, however, China can continue to hit any GDP targets it sets, provided that it doesn’t face hard budget constraints and avoids a write-off of the resulting bad debt. The difference is that GDP ceases to be informative about the economy’s health or performance. Pettis’ point is, therefore, that one should worry less about the reported growth numbers and more about the financial risks that have built up as a result of unproductive investment.
Key takeaways from China's pro-growth measures - (Xinhua) -- With China's economy shifting to a slower but more sustainable growth model, policy makers are stepping up efforts to boost growth and confidence against external headwinds.Fresh moves including tax cuts, increased fiscal spending, consumption boost and stabilizing employment have been unveiled.Here are the major takeaways from the pro-growth measures: China on Tuesday unveiled a flurry of measures aimed at boosting sales of items, including autos, home appliances and information services.The country vowed to promote auto replacement, especially in rural areas, accelerate development of the second-hand car market and adjust subsidies to galvanize sales of new energy vehicles (NEVs).Dong Dajian, an official at the Ministry of Industry and Information Technology, expects NEV sales to exceed 1.5 million units this year, up from 1.26 million in 2018.The government will support sales of green and smart home appliances, and local authorities will mull plans to offer consumer subsidies for such products.Liu Yunan, an official at the National Development and Reform Commission, expects the incentives to lift sales of such products by 150 million units, worth around 700 billion yuan (104.48 billion U.S. dollars), between 2019 and 2021. The country rolled out a new batch of tax breaks for smaller businesses, including lower tax rates, higher tax thresholds and favorable policies for investors of tech startups. The inclusive tax reduction covers 17.98 million businesses, accounting for more than 95 percent of the country's corporate tax payers, 98 percent of which are private businesses. Value-added tax threshold on small-scale tax payers was raised from 30,000 yuan to 100,000 yuan of monthly sales. The country also unveiled special individual income tax deductions to lower tax burdens on those who have certain expenditures in areas such as children's education, continuing education, health treatment for serious diseases, housing loan interests, rent and elderly care. The country will increase investment with a focus on construction and renovation, prioritizing areas including artificial intelligence, Internet of Things, major infrastructure projects and technical transformation and equipment replacement in the manufacturing sector. The country also aims to make fiscal funds more effective and channel more capital into weak areas including poverty relief, agriculture, innovation and environmental protection.
Warning to China: reforms are taking too long and Germany may be about to get tough - China will face “a very difficult year” with its major trading partner Germany as the European powerhouse is losing patience over Beijing’s slow-paced reform, the head of the German Chamber of Commerce in China (AHK) has warned. With bilateral trade exceeding US$200 billion a year – double Britain’s number and triple that of France – China and Germany have built a strong economic relationship amid turmoil in the global economy. As China and the United States are locked in what is described as the biggest trade war in history, Berlin has so far largely remained neutral. But Jens Hildebrandt, head of the AHK, said that Beijing would face stauncher demands from Berlin and Brussels this year. German companies, which employ more than 1 million people in China, were growing increasingly impatient with the lack of systemic reforms and were fearful of the country’s economic outlook, he said. They were particularly concerned by the slow progress in tackling persistent problems like intellectual property protection and market access restrictions, he said. The annual business confidence survey, conducted by the chamber at the end of last year, showed positive sentiment among the 5,200 German companies in China dropping, while pessimism was on the rise. Germans are traditionally more upbeat than other foreign investors when it comes to doing business in China. But the latest figures show even they are losing heart. About 30 per cent of German businesses responding to the survey expected the Chinese economy to worsen in 2019, up 10 per cent compared with the previous year. “That says a lot about the development of the Chinese economy, and the psychological impact of the trade war. German companies feel that this year will be much more difficult than in the past,” Hildebrandt said. “The Chinese government might introduce some reforms, but we need to take a closer look at what they really mean, and take action.”
Rest of World Fears Good, Cheap Huawei Gear - Here is a counterpoint to all the Huawei fear-mongering you read about nowadays. Encouraged by the United States to limit government purchases of Huawei networking gear, many of its allies have sharply curtailed their purchases due to security concerns. That is, Huawei is portrayed as a corporate spy working on behalf of the Community Party of China. Just today, the United States has criminally charged Huawei with stealing trade secrets from US telecoms giant T-Mobile. Fair or unfair, Huawei has acquired this reputation for becoming a conduit for PRC state interests. However, you must also step back and consider: Why exactly is it that there are so many purchasers of Huawei gear? Aren't they delusional in even entertaining procurement of such equipment that compromises the security of their data networks? As Bloomberg points out, Huawei offers fine-quality equipment at prices many cash-strapped government buyers find attractive--something you cannot say about its Western competitors:In the sparsely settled wildlands of eastern Oregon, Huawei Technologies Co. is hardly the big bad wolf of China that U.S. officials have depicted. It’s a lifeline to the 21st Century. China’s largest tech company makes high-quality networking gear that it sells to rural telecommunications operators for 20 percent to 30 percent less than its competitors do, says Joseph Franell, chief executive officer and general manager of Eastern Oregon Telecom in Hermiston, a watermelon-growing hub of 18,000 people. Huawei’s equipment has helped some two dozen U.S. telecom companies provide landlines, mobile services and high-speed data to many of the poorest and most remote areas in the country. Further, even if Western governments are busy ridding themselves of existing Huawei gear that can allegedly be used for Chinese sleuthing, buyers in other countries have not been deterred from buying gear that is not only of good quality but also inexpensive:
Malaysia scraps China’s ‘expensive’ East Coast Rail Link plan- Malaysia’s government has decided to cancel a US$20 billion rail project being built and financed by China after failed attempts to lower the price, a minister said on Saturday, ending months of speculation about the future of the controversial project. Economic Affairs Minister Azmin Ali said Prime Minister Mahathir Mohamad’s government made the decision to scrap the East Coast Rail Link (ECRL) at a cabinet meeting this week. The minister’s comments on Saturday – a recording of which was made available to This Week in Asia – are the clearest indication yet that the Malaysian government has reached a final decision on the 688km rail link after expressing an interest in cancelling the project last May. It was to have been built by the China Communications Construction Company and 85 per cent financed by the Export-Import Bank of China. Saturday’s comments contrasted with the previous pronouncements of Malaysian officials, including Mahathir, who had hedged their positions by suggesting the project could still continue even though they preferred for it to be axed. There also appears to be differences within the cabinet on the matter, as Finance Minister Lim Guan Eng reacted to Azmin’s comments by suggesting the decision was not final. Two separate sources with knowledge of the matter confirmed that Azmin had expressed the government’s final position: that the existing contract with CCCC would be terminated. The decision is likely to mean Malaysia will incur a cancellation penalty, the sources said.
As questions are raised about ‘belt and road’, projects slow in Southeast Asia - China is reshaping the approach of its flagship “Belt and Road Initiative” in Southeast Asia, as Chinese projects in the region plunged last year amid growing global scrutiny of Beijing’s development strategy. The value of newly announced big-ticket deals in the region – investment commitments and construction contracts worth more than US$100 million – dropped 49.7 per cent in 2018 to US$19.2 billion, its lowest in four years, according to analysis by Citi Economics, using data amassed by the US think tank American Enterprise Institute. For the 10 members of the Association of Southeast Asian Nations (Asean), new Chinese megaprojects slowed considerably in the second half of last year with only 12 recorded projects worth US$3.9 billion, down from 33 projects worth US$22 billion in the corresponding period 12 months earlier. The value of those projects in Indonesia, Malaysia, Philippines and Singapore in the second half of 2018 was only a quarter of the full value in 2017, while no projects were logged in Thailand or Vietnam. Despite the slump, analysts said China’s initiative in the region would be “reshaped but not redundant”, as the infrastructure heavy programme both aligned with the region’s development initiatives and was key to Beijing’s geostrategic aims. “China’s overarching geostrategic imperatives suggest it will be incentivised to be more sensitive to Asean’s resistance going forward,” in order not to derail the belt and road plan, Citi analysts wrote, citing Beijing’s interest in co-financing projects with multilateral development banks as an example. “US-China trade tensions could [also] prompt an increase in Chinese investments in Asean to circumvent tariffs on imports from China.”
China’s ‘Belt and Road’ Plan in Pakistan Takes a Military Turn - — When President Trump started the new year by suspending billions of dollars of security aid to Pakistan, one theory was that it would scare the Pakistani military into cooperating better with its American allies.The reality was that Pakistan already had a replacement sponsor lined up.Just two weeks later, the Pakistani Air Force and Chinese officials were putting the final touches on a secret proposal to expand Pakistan’s building of Chinese military jets, weaponry and other hardware. The confidential plan, reviewed by The New York Times, would also deepen the cooperation between China and Pakistan in space, a frontier the Pentagon recently said Beijing was trying to militarize after decades of playing catch-up.All those military projects were designated as part of China’s Belt and Road Initiative, a $1 trillion chain of infrastructure development programs stretching across some 70 countries, built and financed by Beijing.Chinese officials have repeatedly said the Belt and Road is purely an economic project with peaceful intent. But with its plan for Pakistan, China is for the first time explicitly tying a Belt and Road proposal to its military ambitions — and confirming the concerns of a host of nations who suspect the infrastructure initiative is really about helping China project armed might.As China’s strategically located and nuclear-armed neighbor, Pakistan has been the leading example of how the Chinese projects are being used to give Beijing both favor and leverage among its clients.Since the beginning of the Belt and Road Initiative in 2013, Pakistan has been the program’s flagship site, with some $62 billion in projects planned in the so-called China-Pakistan Economic Corridor. In the process, China has lent more and more money to Pakistan at a time of economic desperation there, binding the two countries ever closer. For the most part, Pakistan has eagerly turned more toward China as the chill with the United States has deepened. Some Pakistani officials are growing concerned about losing sovereignty to their deep-pocketed Asian ally, but the host of ways the two countries are now bound together may leave Pakistan with little choice but to go along. Even before the revelation of the new Chinese-Pakistani military cooperation, some of China’s biggest projects in Pakistan had clear strategic implications.
Erik Prince company to build training center in China’s Xinjiang (Reuters) - Hong Kong-listed Frontier Services Group (FSG), co-founded by former U.S. military services contractor Erik Prince, has signed a deal to build a training base in China’s far western region of Xinjiang, the company said in a statement. Xinjiang is an important part of China’s sprawling Belt and Road infrastructure network but the region has faced attacks blamed on members of the Muslim ethnic Uighur minority, to which the government has responded with a security clampdown that has drawn condemnation from rights groups and Western governments. Company officials could not immediately be reached for comment at offices in Beijing and Hong Kong. FSG, a security, logistics and insurance provider, signed a deal with the Kashgar Caohu industrial park in southern Xinjiang to build a training center, FSG said in a Chinese-language statement on its website. It did not provide details of the project but said a signing ceremony in Beijing on Jan. 11 was attended by officials from Xinjiang’s Tumxuk city and from CITIC Guoan Construction, owned by state-run conglomerate CITIC Group. FSG will invest 4 million yuan ($600,000) in the center, which will have the capacity to train 8,000 people a year, state media said in a report. Prince, deputy chairman of FSG, is a former U.S. Navy SEAL officer and the brother of U.S. Secretary of Education Betsy DeVos.
China has nothing to fear from America’s Africa strategy, as it’s largely bluster - Last month, US National Security Adviser John Bolton unveiled “Prosper Africa”, the Trump administration’s new US strategy towards Africa. Surprising many, however, the plan's focus was less about Africa and more on China. Bolton said Africa is experiencing the “disturbing effects of China’s quest to obtain more political, economic, and military power” and described the continent as part of China’s plan to advance “Chinese global dominance”. China’s “predatory practices”, he said, pose a significant threat to US national security interests, and countering these threats is one of the priorities of the US strategy towards Africa. Through Prosper Africa, Bolton said, the United States will help African countries take ownership of their own development and security. US support for increased investment in Africa will counter predatory Chinese financiers, and transparent bilateral trade and investment agreements with America will create mutually beneficial business partnerships. US aid, moreover, will go only to countries that advance US interests. The US will reconfigure or terminate support for UN peacekeeping missions (many of which include Chinese troops) that do not facilitate lasting peace. China’s foreign ministry reacted quickly, rejecting Bolton’s accusations and emphasising that China supports African industrialisation and agricultural modernisation. China’s nationalistic Global Times added that the US strategy treats Africa as a colony of the West and conveys contempt for Africa. Africa alone, not the US, should judge China’s aid to the continent, it said. So how concerned should China be about this new US policy towards Africa? Not very. Bolton’s statement is heavy on rhetoric, but the strategy is stillborn because the administration is not allocating the resources or manpower required for it to succeed. Long before Bolton’s remarks, the Trump administration sought to cut foreign aid by about one-third, although Congress ultimately restored most of the proposed reduction.
World’s Largest Pension Fund Loses $136 Billion in Three Months - The world’s biggest pension fund posted a record loss after a global equity rout last quarter pummeled an asset class that made up about half of its investments.Japan’s Government Pension Investment Fund lost 9.1 percent, or 14.8 trillion yen ($136 billion), in the three months ended Dec. 31, it said in Tokyo on Friday. The decline in value and the rate of loss were the steepest based on comparable data back to April 2008. Domestic stocks were the fund’s worst performing investment, followed by foreign equities. Assets fell to 150.7 trillion yen at the end of December from a record 165.6 trillion yen in September. While stocks helped the GPIF generate returns for the previous two fiscal years, December’s global rout underscored the risks facing the fund since itrevamped strategy in 2014 to accumulate stocks and pare domestic bonds. The GPIF may have little choice but to invest in equities as fixed-income yields, especially those of Japanese government debt, are too low, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo.
Japan Data Scandal- Tokyo Admits 40% Of Its Economic Data Is Fake News - When it comes to the biggest monetary experiment in modern history, namely Japan's QE which has seen the BOJ buy enough Japanese bonds to match the GDP of Japan, there is nothing more important than the BOJ having accurate metrics to determine if its "inflation targeting" is working, i.e., if wages and broader inflation are rising. Alas, the recent news that Japan's labor ministry published erroneous statistics for years, has raised doubt about not only the accuracy of economic analysis released by the Bank of Japan, but prompted investors to doubt absolutely every economic report published by Tokyo.For those who are unfamiliar with the latest economic fake news scandal, on Wednesday Japan's labor ministry revised its monthly labor survey for the period between 2012 and 2018 admitting it had overstated nominal year-on-year wage increases by as much as 0.7 percentage point between January and November of last year, to take just one example.Unfortunately, there are many other examples, and according to an Internal Affairs Ministry report released late Thursday, nearly half of Japan’s key economic government statistics need to be reviewed with 22 discrete statistics, or roughly 40% of the 56 key government economic releases, turning out to be "fake news" and in need to be corrected.This is a major problem for Kuroda and the Bank of Japan which uses statistics from the labor ministry to compile two key pieces of economic data, in making its ongoing decisions whether to continue, taper or expand QE. One, according to Nikkei, is the quarterly output gap which compares the nation's supply capacity with total demand. Supply capacity is derived from elements such as labor and capital spending. Data from the labor ministry survey, such as the number of hours logged by the workforce, is used to compute the output gap.Japan's output gap has climbed further and further into positive territory. That has partially informed the BOJ's judgment that "Japan's economy is expanding moderately." The gap is also considered a leading indicator for inflation. A sustained positive reading could lead companies to raise prices and lift wages.Meanwhile, even as Japan's consumer price index that excludes fresh foods continues to print below 1%, the BOJ has been stubbornly saying that prices are maintaining momentum toward its 2% inflation target, with the conclusion based in part on the output gap.
Rahul Gandhi Scoops Modi on Promise of Minimum Income Guarantee, BJP Hits Out In an announcement that has the potential to give the Congress an edge in the upcoming general elections, party president Rahul Gandhi said on Monday that if elected his party would ensure a minimum income guarantee for every poor citizen in the country.Gandhi’s statement comes just ahead of the Narendra Modi government’s final budget, in which the ruling Bharatiya Janata Party is expected to unveil its own version of an income support plan for poor farmers.The concept of basic income support – economists call it universal basic income – has special salience at a time when there is both widespread rural distress across the country as well as rising unemployment. Indeed, this was the point the Economic Survey had made two years ago:“In an era where collective arrangements are not able to guarantee the availability of jobs, it is imperative that the alignment of income and employment be loosened somewhat. In the twenty first century it may no longer be possible to guarantee social security or minimum support by linking it to employment.”However, the Modi government cold shouldered the idea until the results of the recent assembly elections prompted calls from within the ruling parivar for an out-of-the-box idea to correct the perception that the BJP was only interested in running a government for the corporate sector.In his Raipur speech on Monday, the Congress president accused Prime Minister Modi and the ruling BJP of trying to create two Indias – “one of the Rafale scam, Anil Ambani, Nirav Modi, Vijay Mallya, Mehul Choksi and the other of the poor farmers”.
Indian jobless rate at multi-decade high, report says, in blow to Modi (Reuters) - An official survey that has been withheld by the government shows India’s unemployment rate rose to its highest level in at least 45 years in 2017/18, the Business Standard newspaper reported on Thursday, delivering a blow to Prime Minister Narendra Modi months before a general election. A political controversy over the survey erupted after the acting chairman and another member of the body that reviewed the jobs data resigned, saying there had been a delay in its scheduled December release and alleging interference by other state agencies. The assessment by the National Sample Survey Office (NSSO), conducted July 2017-June 2018, showed an unemployment rate of 6.1 percent. That was the highest since 1972/73, the period for which the data are comparable, the newspaper reported, citing documents it had reviewed. It did not give a figure for 1972/73. But the government think-tank NITI Aayog said the report was only a draft and that a final version would be published in March. It denied unemployment was widespread in India, whose economy is one of the fastest growing in the world. “You can’t be growing annually at 7.2 percent and saying that there are no jobs being created in the economy,” NITI Aayog Chief Executive Amitabh Kant said at a press conference. “To my mind, the problem is that there’s a lack of good-quality jobs, and that’s what we need to focus on. There’s a wages problem, and there’s a very big informal sector in India’s economy.” He said the country was creating more than 7 million jobs a year, enough for “new entrants” joining the workforce. Rahul Gandhi, the leader of the Congress party, the main opposition, said the report showed “a national disaster”. Though India’s economy has been expanding by 7 percent plus annually, uneven growth has meant that new jobs are not keeping pace. And critics say the government’s claims of economic success have sounded increasingly hollow.
Bill Gates says poverty is decreasing. He couldn’t be more wrong - Last week, as world leaders and business elites arrived in Davos for the World Economic Forum, Bill Gates tweeted an infographic to his 46 million followers showing that the world has been getting better and better. “This is one of my favourite infographics,” he wrote. “A lot of people underestimate just how much life has improved over the past two centuries.” Of the six graphs – developed by Max Roser of Our World in Data – the first has attracted the most attention by far. It shows that the proportion of people living in poverty has declined from 94% in 1820 to only 10% today. The claim is simple and compelling. And it’s not just Gates who’s grabbed on to it. These figures have been trotted out in the past year by everyone from Steven Pinker to Nick Kristof and much of the rest of the Davos set to argue that the global extension of free-market capitalism has been great for everyone. Pinker and Gates have gone even further, saying we shouldn’t complain about rising inequality when the very forces that deliver such immense wealth to the richest are also eradicating poverty before our very eyes. It’s a powerful narrative. And it’s completely wrong. There are a number of problems with this graph, though. First of all, real data on poverty has only been collected since 1981. Anything before that is extremely sketchy, and to go back as far as 1820 is meaningless. Roser draws on a dataset that was never intended to describe poverty, but rather inequality in the distribution of world GDP – and that for only a limited range of countries. There is no actual research to bolster the claims about long-term poverty. It’s not science; it’s social media. Advertisement What Roser’s numbers actually reveal is that the world went from a situation where most of humanity had no need of money at all to one where today most of humanity struggles to survive on extremely small amounts of money. The graph casts this as a decline in poverty, but in reality what was going on was a process of dispossession that bulldozed people into the capitalist labour system, during the enclosure movements in Europe and the colonisation of the global south.
Insights on the Iran deal, BRICS and handling a crisis in Venezuela - Brazil is once again in the eye of a political hurricane, after President Jair Bolsonaro’s appearance at Davos and explosive revelations directly linking his clan to a criminal organization in Rio de Janeiro.With his administration barely a month old, Bolsonaro is already being seen as expendable to the elites that propelled him to power – from the powerful agribusiness lobby to the financial system and the military. The new game among the elites of a major actor in the Global South, BRICS member and eighth-biggest economy in the world consists of shaping a scenario capable of rescuing one the great frontiers where global capitalism is expanding from total irrelevancy.That includes the possibility of a “soft coup,” with the Bolsonaro clan sidelined by the Brazilian military rallying around the vice-president, General Hamilton Mourao. Under these circumstances, a conversation with former Brazilian foreign minister Celso Amorim is more than sobering. Amorim is universally recognized as one of the top diplomats of the young 21st century, a symbol of the recent past, under president Luiz Inácio Lula da Silva, when Brazil was at the top of its game as a resource-rich continental nation actively projecting power as a BRICS leader. I had the pleasure of meeting Ambassador Amorim, who is also the author of Acting Globally: Memoirs of Brazil’s Assertive Foreign Policy, in Sao Paulo. Here are some highlights of our conversation – from the birth of BRICS to the current Venezuela crisis.
Russian Mercenaries Reportedly Descend On Venezuela To Help Protect Maduro's Regime - Russia has reportedly sent a contingent of shadowy private military contractors to Venezuela to help President Nicolás Maduro fend off a challenge to his authority from the President of the country’s National Assembly, Juan Guaido. It’s unclear what their exact orders might be, but whether they’re in the country to protect Maduro himself, assist government security forces, stymy a U.S. military intervention, or something else, these mercenaries only add an additional layer of complexity to the still-evolving crisis. On Jan. 25, 2019, Reuters reported that individuals linked to the now infamous Russian private military company Wagner were in Venezuela. The story cited Yevgeny Shabayev, the head of the Khovrino Cossack organization, who has his own background as a soldier of fortune and routinely speaks to the international press about Russian mercenary activities, as well as anonymous sources. The Wagner mercenaries had already begun arriving earlier in the week before this standoff emerged, according to Shabayev. Other sources who spoke toReuters said that the total number of contractors was far smaller than Shabayev’s estimate and that they had arrived in multiple groups, including one that only touched down “recently.” These individuals also did not confirm that these personnel were guarding Maduro. Maduro’s regime is a major regional ally of Russia’s and publicly available information shows a relatively steady stream of Russian government and Russian-registered aircraft flying to and from the country since the beginning of December 2018. Reuters reported that two Russian Air Force aircraft, an Antonov An-124 and an Il-76, had been in Venezuela between Dec. 10 and Dec. 14 and that another Il-76 had been in the country between Dec. 12 and 21, but these are almost certainly unrelated to the deployment of any Russian mercenaries.
Zakharova Mocks ‘8 Day Snap Election Deadline’ For Venezuela – But There’s More – Statements by the authorities of Germany, France and Spain on the conditions of recognizing the Venezuelan opposition leader Juan Guaido as interim president of the country are the same – (that Maduro has eight days to conduct a snap election) – said the official representative of the Russian Foreign Ministry, Maria Zakharova.“Statements are made not only identical, but even at the same time,” the diplomat wrote on her Facebook.She also joked that Germany, France and Spain “look like a choir.”Earlier in the day, Paris, Madrid and Berlin announced that they were working closely with European partners on the crisis in Venezuela. These European countries expressed their willingness to recognize Guaido as interim head of state in the event that Republic President Nicolas Maduro does not announce the holding of elections within eight days. Later in the day , the United Kingdom made a similar statement .Since her statement, London also joined onto the eight day ‘demand’ from Paris, Madrid, and Berlin. What is ethically and legally perplexing on multiple levels, is the premise Guaido used in his self-declaration as acting president. Guaido cites several articles of the Venezuelan constitution to support his claim to legitimacy, but the constitution actually points the opposite direction. The National Electoral Commission in Venezuela, considered clean and fair by international monitors for several decades, approved the electoral process which saw Maduro re-elected. That is, Maduro and the government followed the constitutional requirements for an election – they were even held earlier than required, because the opposition according to the constitution has the right to determine the timing of elections. This provision is quite the opposite of ‘dictatorial’ – and indeed the Maduro led government conducted the elections when the opposition wanted. Specifically, these elections were held at the time when, according to polling, the opposition had the most support.
The Vultures of Caracas - We are frequently told that people in Venezuela have no food, clothing or toilet paper, and that popular discontent with the left wing government is driven by real hunger. There are elements of truth in this story, though the causes of economic dislocation are far more complex than the media would have us believe. But I ask you to look at this photo of supporters of CIA poster-boy, the West’s puppet unelected “President” Juan Guaido, taken at a Guaido rally in Caracas two days ago and published yesterday in security services house journal The Guardian. Please take a really close look at the photo. Blow it up as big as you can. Scan individual people in the crowd, one by one. These are not the poor and most certainly not the starving. As it chances I have a great deal of life experience working amongst seriously deprived, hungry and despairing people. I know the gaunt face of want and the desperate glance of need. Look at these Guaido supporters, one by one by one. This designer spectacled, well-coiffed, elegantly dressed, sleekly jowled group does not know hunger. This group does not know want. This is a proper right wing gathering, a gathering of the nicely off section of society. This is a group of those who have corruptly been siphoning Venezuela’s great wealth for decades and who want to make sure the gravy train flows properly in their direction again. It is, in short, a group of exactly the kind of people you would expect to support a CIA coup.
Sanctions Are Wars Against Peoples - A former UN rapporteur says that the numerous US sanctions (pdf) against Venezuela are devastating and illegal:Mr De Zayas, a former secretary of the UN Human Rights Council (HRC) and an expert in international law, spoke to The Independent following the presentation of his Venezuela report to the HRC in September. He said that since its presentation the report has been ignored by the UN and has not sparked the public debate he believes it deserves.“Sanctions kill,” he told The Independent, adding that they fall most heavily on the poorest people in society, demonstrably cause death through food and medicine shortages, lead to violations of human rights and are aimed at coercing economic change in a “sister democracy”.On his fact-finding mission to the country in late 2017, he found internal overdependence on oil, poor governance and corruption had hit the Venezuelan economy hard, but said “economic warfare” practised by the US, EU and Canada are significant factors in the economic crisis. The four factors - oil, poor governance, corruption and sanctions - are not unrelated to each other. That Venezuela has the largest oil reserves in the world makes it a target for U.S. imperialism. Not simply to "take their oil" as Trump wants, but for geo-political reasons. As Andrew Korybko muses: Alongside ensuring full geopolitical control over the Caribbean Basin and ideologically confronting socialism, the US wants to obtain predominant influence over Venezuela in order to incorporate it into a parallel OPEC-like structure for challenging the joint Russian-Saudi OPEC+ arrangement per the author’s late-2016 prediction about the formation of a “North American-South American Petroleum Exporting Countries” (NASAPEC) cartel. This entity would function as “Fortress America’s” energy component and have the potential to exert powerful long-term pressure on the international oil market at Russia and Saudi Arabia’s expense. Venezuela's overdependence on the extraction of one resource also furthered poor governance. Hugo Chavez became president of Venezuela in 1998. Between then and 2014 oil prices were overall constantly rising. When ever increasing prices guarantee a decent income there is little pressure to care for government efficiency and little incentive to build other industries.
Pope fears ‘bloodbath’ in Venezuela - Pope Francis said Monday he was terrified the political crisis enveloping Venezuela would descend into a "bloodbath". "What am I afraid of? A bloodbath," the first Latin American pontiff told journalists aboard a plane on his return trip from Panama, adding that "the problem of violence terrifies me". Venezuelan President Nicolas Maduro and opposition leader Juan Guaido have been locked in a power struggle since Guaido proclaimed himself "acting president" Wednesday amid fierce protests over economic woes. The standoff has split the international community between nations that recognize Guaido as president, including the United States and a dozen countries in the region, and those that still recognize Maduro, including Russia and China. Before flying out of Panama, Francis called for a "just and peaceful solution" to the crisis and said he was praying for an outcome "respecting human rights". Francis has been at pains not to take sides on the issue, even though the Church in Venezuela has been highly critical of Maduro's socialist regime amid the country's economic collapse.
Venezuela’s ‘interim president’ is in hiding — despite US backing — and appears to be failing one of his own 3 tests for securing power - Juan Guaidó, the Venezuelan opposition leader who declared himself interim president this week, appeared to be in hiding as the country’s military leaders declared their support for his rival, President Nicolás Maduro. The whereabouts of Guaidó, 35, remains unknown after he symbolically swore in as the country’s interim president on Wednesday before tens of thousands of supporters, promising to remove Maduro from power. Guaidó has said that he needs support from three groups: The Venezuelan people, the international community, and the military, The Associated Press reported. He hasn’t passed all three tests yet. The long list of countries supporting his claim – including the US, the EU, and most of Venezuela’s neighbours – gives him a good argument that he has persuaded the international community. It is difficult to measure Guaidó’s popular support, though his rallies have pulled in huge crowds. Tens of thousands of Venezuelans marched in support of Guaidó this week. Venezuela’s military, however, is much more clear-cut. Its leaders have remained staunchly loyal to Maduro.
Bank Of England Refuses To Release Venezuela's Gold After US Lobbying - With Maduro desperately clinging to power in Venezuela - albeit protected by Russian "security contractors" - The Bank of England just 'virtue-signaled' another jab in the socialist utopia's back by confirming its refusal to hand over Venezuela's gold from its vaults. Bloomberg reports that Maduro's embattled regime, desperate to hold onto the dwindling cash pile it has abroad, was stymied in its bid to pull $1.2 billion worth of gold out of the Bank of England, according to people familiar with the matter. The Bank of England’s (BoE) decision to deny Maduro officials’ withdrawal request comes after top U.S. officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, lobbied their U.K. counterparts to help cut off the regime from its overseas assets, according to one of the people, who asked not to be identified.
Venezuela Sanctions Will be Weaker Than Expected - The recently announced U.S. sanctions against PDVSA will deal a meaningful blow to the Maduro administration’s cashflow, but the effects will not be as harsh as the United States expects, according to Rystad Energy Analyst Paola Rodriguez-Masiu. “Administration officials reportedly said the sanctions would result in more than $11 billion in export losses for Venezuela over the next year, but I believe this figure will be substantially lower,” Rodriguez-Masiu said in a statement sent to Rigzone. “The oil that Venezuela currently exports to the United States will be diverted to other countries and sold at lower prices. For countries like China and India … [Monday’s] news was akin to Black Monday. They will be able to pick up these oil volumes at great discounts,” the Rystad Energy analyst added. In the statement, Rodriguez-Masiu warned that the sanctions will affect refinery margins in the United States and said U.S. refiners “will be amongst the biggest losers”. Looking at the effect of the sanctions on the oil market, Rodriguez-Masiu said the market “has priced in the Venezuelan crisis”. Fitch Solutions told Rigzone it believes the latest expansion of sanctions to include PDVSA will provide “a small positive upside to oil prices in the near term”. Ashley Kelty, an oil and gas research analyst at Cantor Fitzgerald Europe, revealed to Rigzone Tuesday he thinks the sanctions may have an impact on West Texas Intermediate (WTI) prices, “given that the United States is the biggest market for Venezuelan crudes”. “A short-term tightening of supply should lift WTI. However, with rising U.S. output still weighing heavily on sentiment, I’d be surprised if the impact was material. The Chinese economic slowdown is the biggest factor in pricing at the moment in my opinion,” Kelty told Rigzone yesterday
Huawei’s Meng appears in court as Canada mulls US extradition - Huawei Technologies Co Ltd’s chief financial officer, the central figure in a high-stakes dispute between the world’s two largest economies, made her first appearance in a Canadian court in more than a month on Tuesday as Ottawa weighs extraditing the Chinese executive to the United States. Meng Wanzhou, daughter of the Chinese telecommunications company’s founder, attended the hearing in British Columbia Supreme Court during which Justice William Ehrcke approved her request for a change in who is financially responsible for her bail. Canada arrested Meng on Dec. 1 at the request of the United States, which on Monday brought sweeping charges against Huawei and Meng that paint the company as a threat to U.S. national security. Meng was charged with bank and wire fraud to violate American sanctions against Iran.“I can confirm that the United States has filed a formal request with my department for the extradition of Ms. Meng,” Justice Minister David Lametti told reporters in Ottawa. Canada’s government now has a month to decide whether the U.S. extradition request is strong enough to be presented in the British Columbia court. Lametti, asked whether a decision could come sooner than 30 days, said officials “will take the time that they need to make an enlightened decision based on the evidence in front of them.” Neither Lametti nor Foreign Minister Chrystia Freeland gave any hints on whether Canada would back the extradition request. Freeland told reporters Meng “has been afforded access to Canada’s impartial and objective judicial system.”
Canada trapped in China-US feud over Huawei extradition -- Canada faces a delicate balancing act between Washington and Beijing over the possible extradition of a detained Huawei Technologies executive to the U.S., as illustrated by Prime Minister Justin Trudeau's firing of his ambassador to China."Last night I asked for and accepted John McCallum's resignation as Canada's ambassador to China," Trudeau said Saturday. McCallum said earlier in the week that Huawei Chief Financial Officer Meng Wanzhou had"strong arguments" in her defense, sparking a backlash throughout Canada.McCallum's firing was meant to avoid giving the U.S. the impression that Canada leaned toward China on the issue. But the move further complicates a thorny case for Ottawa."We hope that Canada can recognize the seriousness of this issue instead of risking endangering itself for others' gains," Chinese Foreign Ministry spokesperson Hua Chunying told reporters Friday, reiterating that Meng should not be extradited to the U.S.The U.S. must complete procedures for the extradition request within 60 days of Meng's arrest, which sets a deadline of Wednesday. A Canadian court then holds a hearing and decides on the case within a month.China, which is sparring with the U.S. over trade and other issues, has turned up the pressure on Canada to prevent an extradition."If Ottawa successfully assists Washington in the extradition of Meng, Beijing will retaliate against both of them without doubt," China's Global Times, a state-owned newspaper under the People's Daily, wrote in an editorial Wednesday.The Wednesday deadline also overlaps a critical period for trade talks between Washington and Beijing."There is a clear difference in the responses based on national influence," said a diplomatic source in Beijing, who noted that China has avoided public criticism of the U.S. on this matter while focusing on Canada. The U.S. shows no sign of compromise.
Canada faces Saudi Arabia and China on its own – Axios Canada is embroiled in escalating disputes with two authoritarian powers, without the U.S. to lean on for support. Ferry de Kerckhove, a longtime Canadian diplomat now at the University of Ottawa, says the disputes put Canada in a "profoundly unusual" position. "We live in an entirely different world,” he says, where the Chinese and Saudis know the U.S. won’t stand behind Canada. A Chinese court sentenced Canadian Robert Schellenberg to death for drug trafficking, a move almost certainly tied to Canada’s arrest last month of Meng Wanzhou, CFO of Chinese tech giant Huawei. Schellenberg had appealed his 15-year sentence, only to have it increased to death. Canadian Prime Minister Justin Trudeau condemned that move and said “all countries around the world” should be concerned that China is refusing to comply with international norms. Canadian Foreign Minister Chrystia Freeland greeted Rahaf al-Qunun — an 18-year-old Saudi who made international headlines last week after barricading herself in a hotel room in Thailand — Saturday night at an airport in Toronto. Al-Qunun, who said she’d be killed if deported after renouncing Islam, was attempting to reach Australia. Instead, Canada granted her immediate asylum. It was Freeland who sparked a diplomatic crisis with Riyadh last August with her tweet calling for the release of imprisoned Saudi activists. The Saudi response was startlingly fierce, and relations remain strained. There has been "very little support" internationally as this has all unfolded, de Kerckhove says. "The rest of the world that loves to have Canada doesn't like to come to our defense. If the U.S. drops Canada the way Trump has, you don’t expect them to rush in." Since Trump took office, de Kerckhove says, 90% of Canada's foreign policy has been focused on managing relations with the U.S. The bottom line: "Canada can do very little to protect the liberal international order unless we have strong leaders in Europe pulling in that direction," he says, noting the diminished political statures of Emmanuel Macron in France, Theresa May in the U.K. and Angela Merkel in Germany. "We don't have much clout and there's very little Trudeau can do."
Mystery illness sees Canada halve its Cuba embassy staff -Canada will cut its embassy staff in Cuba by up to half after a mystery illness affected another person there, authorities in Ottawa have said. Medical testing after the reappearance of unusual symptoms in November saw a 14th Canadian affected. Canada's foreign office said the number of staff will now be cut by up to half as a result. US staff have also been affected by the illness, which causes dizziness, nausea and difficulty concentrating. Canada has discounted the idea of a "sonic attack" being the cause - a theory previously put forward by the US state department last year. A statement released by Global Affairs Canada said "employees, spouses and dependents" at the embassy were among the affected, and all were receiving ongoing medical treatment. While the embassy would remain open some services could be affected in the future, the statement read. Staff numbers will now drop from about 16 to up to eight, the Associated Press reports. Canada recalled diplomatic families from Havana in April after some minors started showing the symptoms. More than a million Canadians visit Cuba each year, but there is no evidence they are at risk. Cuba has repeatedly denied its involvement. Canada says it has worked in "close cooperation" with Havana since the health problems first came to light in 2017. Unlike the US, Canada never cut off diplomatic relations with Cuba after its revolution in 1959.
Europe Launches SWIFT Alternative To Send Money To Iran - in a move sure to unleash fury from the Trump administration, the European Union has announced it has set up a transactions channel with Iran to bypass US sanctions. The launch of INSTEX — or "Instrument in Support of Trade Exchanges" — by France, Germany, and the UK will allow non-dollar trade with Iran and is being described as facilitating humanitarian goods-related transactions only, including food, medicine and medical equipment. Long anticipated, Thursday's EU announcement marks the most concrete action Europe has taken to thwart Washington sanctions after the US pullout of the 2015 nuclear deal last May, and after SWIFT caved to US pressure. Europe is hoping the mechanism will act as a legal means to preventing Tehran from quitting the JCPOA, which promised sanctions relief should the country halt nuclear weapons research and development. INSTEX is expected to receive the formal endorsement of all 28 EU members, which aims to encourage skittish pharmaceutical and agricultural companies to the table with Tehran after many stopped doing business in Iran for fear of US economic retribution. The Iranians welcomed the new mechanism: “It is a first step taken by the European side... We hope it will cover all goods and items,” Iranian Deputy FM Abbas Araqchi told state TV, referencing EU promises to stick to its end of the nuclear deal. INSTEX will reportedly be based in Paris and run by a supervisory board chaired by the UK and managed by a German banking expert, and has further been described in European media as "expandable," which is likely to provoke a reaction from the United States, especially after Washington was able to pressure the Belgium-based SWIFT financial messaging service to cut off the access of Iranian banks.German Foreign Minister Heiko Maas cited EU strategic and "security interests" during a press briefing in Brussels: "We have been looking for ways to obtain this agreement because we are firmly convinced that it serves our strategic security interests in Europe." He further bluntly described, "We do not want Iran to get out of this agreement and back into uranium enrichment. This has to do with our security interests in Europe."
Italy Starts Handing Out Free Money- What Could Go Wrong? - Italy’s Five Star Movement has risen to global prominence more for the colorful oddness of its founder, the comedian Beppe Grillo, than for the seriousness of its populist policies.But one of its proposals has attracted genuine interest from across the world: The idea of a “citizens’ income.” This concept (a less radical version of the “universal basic income” scheme tried out by Finland) could in theory appeal to both the left and the right; the former because it might reduce inequality, and the latter because it could simplify social security.After a long gestation, Five Star is rolling out its plan in Italy. Unfortunately, the plan has little of the revolutionary spirit of Milton Friedman’s idea for a simple guaranteed basic income for all citizens, jobless or not, and is more like a classic welfare-to-work program. After a deep recession and weak recovery, there’s a strong case for helping Italy’s left-behind. The worrying thing is that this experiment becomes an administrative nightmare, making it harder to target those most in need.Italy’s new citizens’ income is for households earning less than 9,360 euros ($10,612) a year. It’s made up of an income support scheme and a housing allowance, which can add up to 780 euros a month for a single person with no income. It is aimed at pensioners and people of working age. The latter must be willing to accept a suitable job, or else lose the benefit – hence its difference to more radical basic income schemes. Companies will get a discount on their social security contributions when they hire a citizens’ income recipient. The country clearly needs to help its poor. About one-fifth of its citizens are at risk of poverty, according to the country’s statistics agency, and one in ten lives with serious deprivation. This is worse than in 2008, when the figures stood at 18.9 percent and 7.5 percent respectively. Previous center-left governments passed a different support scheme, but it was far smaller than Five Star’s program.
Italy slides into recession after economy shrinks - The Italian economy contracted in the fourth quarter of 2018, dragged down by slowing European growth and global trade tensions, plunging the country into a technical recession, official data showed Thursday. The 0.2 percent contraction -- following a 0.1 percent fall in the third quarter -- will put pressure on the populist government in the eurozone's third largest economy, which took power in June on the back of big-spending electoral promises. Italy is Europe's second largest manufacturer and is currently the only European Union member in recession, although growth in export powerhouse Germany also fell in 2018. The Italian economy suffered a harsh recession in 2012-13 and has enjoyed only slow growth since then. Overall growth for full-year 2018 was just 0.8 percent. Italy's Prime Minister Giuseppe Conte had anticipated the bad news on Wednesday during a business conference in Milan. "Analysts tell us we'll likely still suffer a bit at the start of this year," he said, pointing the finger at a slowdown in China and Germany which are hurting Italian exports. "But all the elements are there to recover in the second half," Conte added. The coalition government of the anti-establishment Five Star Movement (M5S) and the far-right League party was forced to water down its ambitious and costly budget in December to avoid being punished by the European Commission and the financial markets. A slowdown will make it even harder to follow through on expensive vote-winning measures both parties promised their bases, from reform of the pension system to income support for the poor.
Italy Officially Slides Into Recession After Budget Battle With Brussels - The Italian government's decision to cut its growth forecast for 2019 to just 1% during the most heated period of the populist government's budget battle briefly rattled investors in the country's bondholders. As it turns out, even that number may have been too optimistic. In a report that could once again test the market's confidence in Europe's third-largest economy, official data from Italy's Istat revealed that Italy's economy fell into a technical recession during Q4, as economic output shrank 0.2% in the three months through December, following a 0.1% decline during the previous quarter. News of the recession will further strain the relationship between M5S and the League, the two parties which make up the populist coalition that has been running the country since elections in March 2018. The populists had been riding high after striking a budget deal with the EU that allowed Italy to blow out its budget deficit far beyond the 0.8% of GDP that Brussels had initially demanded. Lately, Deputy Prime Minister Matteo Salvini, the leader of the League, has been facing internal pressure to call for early elections as the League's poll numbers climb - largely thanks to the party's anti-immigrant stance. The goal would be to push out the increasingly unruly M5S, allowing the League to take unilateral control, potentially in coalition with Silvio Berlusconi. In a rapid response to the numbers, analysts at Goldman Sachs said they believe there's room for even more pessimism than the official numbers would suggest:
- Italian GDP growth was -0.2% (non-annualised) in Q4, weaker than consensus expectations of -0.1% and the pace of growth seen in Q3 of -0.1%. The print confirms that the Italian economy is in a technical recession.
- The breakdown of the GDP components is not available and will be released on 5 March.
- With Q4 data in hand, calendar-year growth for 2018 was +0.9%, down from +1.6% in 2017. Today's GDP print takes calendar-year growth for 2019 to 0.2%.
- The balance of risks to our GDP growth forecast for Italy is to the downside. Our 0.2% calendar-year growth forecast for 2019 is based on a sizeable acceleration in activity in 2019H2. But given falling business confidence, tightening bank credit standards and continued political uncertainty, this looks less likely than we thought a few months ago.
- The weak economic outlook poses a challenge for the government to meet its public finance targets. We remain more pessimistic than the official forecast on the outlook for the government deficit and public debt, and expect another volatile year for the Italian economy and Italian asset prices.
Civilians in Police Crosshairs as France Adopts Totalitarian Tactics to Squash Yellow Vests - A 30-year-old volunteer fireman who joined the Gilets Jaunes protests in Bordeaux, France on the 12th January 2019, is in a coma after being shot in the back of the head by an LBD or “flashball” bullet fired by French security forces who are brutally suppressing public demonstrations in most major French cities. Olivier Beziade is a father of three who now has a “very serious brain injury” and is in an induced coma. As violence radiates across France, western media locks down and fails to report comprehensively or fairly on police infractions against protestors. The following is the video of this event, during which one of the police officers appears to say “they (protestors) don’t know it’s us” and instructs his colleagues to “pick up the casings” after Beziade had been gunned down and was lying face down on the street.
40,000 Irish nurses to participate in series of one day strikes --Almost 40,000 Irish nurses, members of the Irish Nurses and Midwives Organisation (INMO), are to hold a 24-hour strike today over pay and conditions. A series of five further 24-hour stoppages is planned for the first two weeks of February. Over 95 percent of nurses voted for strike action, demanding a 12 percent pay increase.Six thousand psychiatric nurses, members of the Psychiatric Nurses Association (PSN), will also ban overtime and mount a series of strikes in February. Meanwhile, the National Association of GPs is to hold a protest at Dail Eireann (Irish Parliament) on February 6 citing the collapsing of family doctor services in parts of the country.Following public attacks on the nurses by Taoiseach (prime minister) Leo Varadkar, the 12 percent wage demand by nurses was rejected by the eight members of the Public Service Pay Commission (PSPC), all of whom were appointed by Paschal Donohoe, the current minister for Public Expenditure and Reform.The degeneration of the Irish health service proceeds from the financial crash of 2008, in which the European Union, at the behest of the Irish government, bailed out the wealthy elite and the bankers to the tune of €62.7 billion. Savage cuts were made to public services. The Irish government cut public spending by a figure approaching 20 percent of GDP. The health service and the pay and conditions of nurses and other health workers were targeted. Between 2008 and 2014, successive Fianna Fail and Fine Gael governments introduced a massive €2.7 billion of health service cuts, amounting to 20 percent of the health budget. These resulted in cuts to discretionary medical cards, home help supports, the introduction of prescription and hospital charges and chronic delays to infrastructure projects.
UK firms plan mass exodus if May allows no-deal Brexit - Thousands of British companies have already triggered emergency plans to cope with a no-deal Brexit, with many gearing up to move operations abroad if the UK crashes out of the EU, according to the British Chambers of Commerce. Before a crucial week in parliament, in which MPs will try to wrest control from Theresa May’s government in order to delay Brexit and avoid a no-deal outcome, the BCC said it believed companies that had already gone ahead with their plans represented the “tip of the iceberg” and that many of its 75,000 members were already spending vital funds to prepare for a disorderly exit. It said that in recent days alone, it had been told that 35 firms had activated plans to move operations out of the UK, or were stockpiling goods to combat the worst effects of Brexit. Matt Griffith, director of policy at the BCC’s west of England branch, said that many more companies had acted to protect themselves since May’s Brexit deal was decisively rejected by MPs in the Commons earlier this month. He said: “Since the defeat for the prime minister’s deal, we have seen a sharp increase in companies taking actions to try and protect themselves from the worst effects of a no-deal Brexit. No deal has gone from being one of several possible scenarios to a firm date in the diary.” Labour MP Yvette Cooper has revealed to the Observer that two major employers in her West Yorkshire constituency – luxury goods manufacturer Burberry and confectioner Haribo – had both written to her, warning of the damaging effects of no deal on their UK operations. Burberry employs 750 people in Castleford, and Haribo 700 across her constituency. Cooper is pushing for a Commons amendment – likely to be voted on in Tuesday’s debate – that would pave the way for Brexit to be delayed until the end of this year.
Brexit planners could use martial law against civil disobedience - Brexit planners are examining the possibility of martial law in Britain in the event of a "no-deal" Brexit, it has emerged. Whitehall officials are looking at how to use powers available under the Civil Contingencies Act 2004 to stop civil disobedience after the UK leaves the EU. According to a report in The Sunday Times, the legislation gives ministers the power to impose curfews, travel bans, confiscate property and deploy the armed forces. A source told the newspaper: "The over-riding theme in all the no-deal planning is civil disobedience and the fear that it will lead to death in the event of food and medical shortages." The newspaper quoted another source as saying that planners were using the disruption caused by the volcanic ash in Iceland during 2010 as a model for possible disorder. Brexit crisis: Security The source added: "Although there is nothing that can replicate the scale of chaos threatened by a no-deal Brexit, which will be about a thousand times worse than the volcanic ash cloud crisis, this is about the closest example we have in modern British history. "The only other thing that would be comparable would be something like a major Europe-wide war."
How Brexit Distracted the UK From Its Real Problems Der Spiegel - In early January, the British parliament debated one of the country's most pressing problems. Philip Alston, UN Special Rapporteur responsible for extreme poverty, had made a harsh accusation against the United Kingdom's government at the end of last year. After a two-week journey through the fifth richest country in the world, Alston, who mostly focuses on Africa and Central America, had argued that Theresa May's government had systematically pushed countless British citizens into poverty. He said, "this is not just a disgrace but a social calamity and an economic disaster, all rolled into one," and went on to also highlight the country's rising child poverty rates. This accusation had to be addressed. When the debate in the lower house took place on a Monday evening, only 14 of the 650 parliamentarians were present in the Commons Chamber. The minister responsible sent a deputy in her place. He promised to take Alston's report "seriously." Then the 30 minutes dedicated to the agenda point were over. This coming Tuesday, the British parliament will once again debate Brexit. Many of the lawmakers will struggle to get even standing room space in the lower house. The discussion will once again stretch on for hours. Although everything has already been said, not everyone has spoken. If things go as expected, it will then be even more likely that Brexit, which is currently scheduled for March 29, will be pushed back once more. Maybe a few months. Maybe even a year. What do the two debates have to do with one another? More than one might think. The contrast between the empty and the full chamber reveal what this country and its politicians still have energy for -- and for what they don't. The more time and energy are absorbed by Brexit, the black hole of British democracy, the more likely it becomes that voters will take their revenge.
Queen Elizabeth Breaks Brexit Silence- 'Stop Squabbling And Get On With It' - After more than two years of what the New York Times described as "sphinx-like neutrality", Queen Elizabeth II has finally offered some advice to the UK's fractious political establishment: Stop squabbling and get on with it. That was a paraphrase, of course - but it effectively captures the spirit of the Queens first public remarks about the ongoing battle to avert both a 'no deal' Brexit and a withdrawal deal that could risk the UK becoming a "vassal state" of the EU by leaving it trapped in the customs union should the Irish Backstop come into play. The 92-year-old Queen took the British press by surprise when she said during her annual speech to the local Women's Institute in Norfolk that "every generation faced fresh challenges", using language couched in the neutral conventions of the monarchy to gently nudge the House of Commons to figure it out. In her speech, she called on MPs to find "common ground" and "new answers" for the problems plaguing the "modern age," according to Reuters.“As we look for new answers in the modern age, I for one prefer the tried and tested recipes, like speaking well of each other and respecting different points of view; coming together to seek out the common ground; and never losing sight of the bigger picture,” the queen said.The plea marked the Queen's first foray into British politics since 2014, when she softly urged the Scots to carefully consider their options ahead of the constituent nation's independence referendum. Outraged at the Queen's break from the tradition of impartiality, Jacob Reese-Moog, a leader of the Brexiteer European Research Group, said the Queen would have only intervened in this way on the advice of No. 10, according to the Sunday Times.
Blow for May as Ireland stresses it will not yield on Brexit backstop - Ireland has launched a last-minute effort to warn Theresa May off any attempt to unravel the backstop, two days before a crucial Commons debate that may decide the next move for the UK’s rudderless Brexit policy. Simon Coveney, the Irish foreign minister and deputy prime minister, insisted the backstop – the mechanism to ensure there will be no hard border between the Irish Republic and Northern Ireland if Britain and the EU fail to strike a free trade deal – was “part of a balanced package that isn’t going to change”. In a forceful interview, he insisted it was only part of the withdrawal agreement because of the UK’s red lines. On Tuesday Tory Brexiters may get the chance to vote for amendments that would signal their willingness to back May’s Brexit deal subject to the backstop’s either being removed or time-limited. Ministers have not formally backed any of the anti-backstop amendments, which are incompatible with the deal that May agreed with UK leaders, but if one were to pass by a majority, she would be able to present the EU with a firm idea of what changes might get her deal through parliament – something that as yet remains unclear to Brussels. MPs pushing the anti-backstop amendments will be competing against a rival bloc of parliamentarians hoping to get a majority for an amendment intended to prevent the government taking the UK out of the EU without a deal. Various versions of this are on the order paper, including some viewed with alarm by ministers because they cede control of the parliamentary timetable to backbenchers.
EU WILL BLINK FIRST! Brussels on brink of ‘CAVING IN’ over Brexit deal THE EU is on the point of "blinking first" in the Brexit stand-off as long as Remainer MPs do not succeed in taking the threat of no deal off the table, senior Cabinet sources claim. The comments come ahead of crucial votes in Parliament this week where Theresa May is faced with a bitter backbench plot to seize control of the agenda in the Commons aimed at blocking no deal and forcing a second referendum on Brexit. Leading economist Professor Patrick Minford has also revealed that the stakes could not be higher as the March 29 departure day looms with Britain risking losing out on hundreds of billions of pounds in a Brexit bonus if Remainers get their way. Meanwhile, the Chief Minister of Gibraltar, Fabian Picardo, held a series of talks with senior MPs last week as fears were rising on the Rock that it could be used as a bargaining chip in the renegotiation of Mrs May's Withdrawal Agreement. .
Europe will not ratify deal without backstop, warns Coveney - Tánaiste and Minister for Foreign Affairs Simon Coveney has said the European Parliament will not ratify a Brexit deal that does not have a backstop. Speaking on BBC's The Andrew Marr Show, Mr Coveney assured that the backstop is not "dead", and said it is part of a "balanced package". He described the Brexit deal, which was agreed with the EU but later fell flat in the House of Commons, as a "series of compromises" and said that it was designed around British red lines. "We have already agreed to a series of compromises here and that has resulted in what is proposed in the Withdrawal Agreement. Ireland has the same position as the European Union now, I think, when we say that the backstop as part of the Withdrawal Agreement is part of a balanced package that isn't going to change." Mr Coveney said abandoning the backstop would mean relying on an "aspirational hope". He said that Ireland will insist on the UK "keeping its word" on the peace process, which he described as "hugely valuable". Asked if Ireland would support an extension of Article 50, Mr Coveney said: "Yes. Ireland won't be an obstacle to more time if that's needed."
Brexit: Theresa May in fresh crisis after anti-EU Tories reject ‘plan B’ to rescue her deal ahead of Commons vote - Theresa May has been plunged into a fresh Brexit crisis after anti-EU Tories rejected her ‘plan B’ attempt to rescue her deal and threatened to inflict another Commons defeat on Tuesday. The prime minister took the extraordinary step of urging her MPs to back an amendment that “requires the Northern Ireland backstop to be replaced” – even though it effectively rips up her own agreement with the EU. However, just 30 minutes earlier – in a dramatic underlining of her weakness – the hardline 60-strong European Research Group (ERG) rejected the wording as too vague. Without ERG support, the amendment, tabled by Tory backbenchers’ leader Graham Brady, appeared doomed to fail – wrecking No 10 hopes that it would persuade the EU to give way. Even before the setback, Brussels made clear it would, in any case, never accept a UK demand to replace the backstop, insisting the EU was “not going to reopen the agreement”.
Brexit: Tories unite to back compromise giving May extra time A plan from rival Conservative factions aimed at securing a breakthrough in the Brexit impasse has been greeted with immediate scepticism from EU officials, who said the proposals were not workable. Senior Tory Brexit supporters including Jacob Rees-Mogg and Steve Baker hatched the plan with leading remainers including Nicky Morgan and Stephen Hammond. The proposal involves paying the £39bn EU divorce bill, redrafting the backstop arrangements over the Irish border and extending the implementation period until December 2021. The extra time would be used to try to agree a free-trade deal, while citizens’ rights would be guaranteed. In that period, there would be no customs checks on the Irish border. The initiative has been called the “Malthouse compromise” after the housing minister Kit Malthouse, who entreated the two warring factions to attempt talks. EU officials dismissed the suggested compromise, which they said failed to offer Ireland any reassurance on the avoidance of a hard border. Brussels sources pointed out the EU’s deputy chief negotiator, Sabine Weyand, had said technology to avoid a hard border does not exist. “What a cunning plan,” laughed one official. “This is just nonsense,” echoed an EU diplomat. Brexit-backing MPs, including Rees-Mogg, were still seeking fresh reassurances from the prime minister before they vote for a government-backed amendment on the backstop on Tuesday evening, which could pave the way for the new plan to be put to Brussels. Rees-Mogg told journalists on Tuesday morning he would wait and see whether the government interpreted the amendment, tabled by the senior MP Graham Brady, as an instruction to try to reopen the 585-page withdrawal agreement. “Let’s see what the prime minister says at the dispatch box today and what the Brady amendment really means,” he said.
EU BLAST FOR UK ‘LOSERS’ EU negotiator accuses UK of ‘snatching defeat from the jaws of victory’ in Brexit vote — and insists Brussels will not give in on Irish backstop Michel Barnier’s deputy, Sabine Weyand, accused MPs of ignorance about what is in the Brexit deal and said tech solutions to the border don’t exist. In a series of outspoken remarks that will cause consternation in No 10 she also blamed Theresa May’s secrecy for the unpopularity of the agreement. Speaking at an event in Brussels, the German eurocrat raised the possibility the EU will still insist on the backstop even if Britain opts for no deal. And she warned there is now a “very high risk of a crash out not by design but by accident” given the paralysis gripping Parliament. She said: “It’s quite a challenge to see how you can construct, out of the diversity of opposition, a positive majority for a deal. “The result of the negotiation has been very much shaped by the UK negotiators, much more than they actually get credit for. “This is a bit like snatching defeat from the jaws of victory.” In a swipe at MPs she said much of the debate in the UK “is uninhibited by any knowledge of what is actually in the Withdrawal Agreement”. And she added that amendments to be voted on about time-limiting or giving Britain a unilateral exit from the backstop were “like Groundhog Day”. Ms Weyand said: “This has been extensively discussed at the negotiating table amongst the EU27. “The EU27 were unanimous a time limit to the backstop defeats the purpose of the backstop. We’re not going to reopen the Withdrawal Agreement.”
Brexit Is Good News for Those in the Business of War - The Government has identified arms sales as a priority for the brave new world post-Brexit, and a global Britain, or arguably a more desperate Britain, looks set to invest in this sector. Europe accounts for few military contracts so there is little downside to the changing market, according to the UK’s trade group for arms companies, euphemistically called the Aerospace, Defence, Security and Space association (ADS).“Europe will continue to be important, but there are perhaps other areas where there is now a bigger incentive to develop longer-term relationships. Brexit provides the circumstances and the catalyst for faster and more efforts”, said ADS in August 2016.One of ADS’ members, British multinational BAE systems, is similarly nonchalant. The UK’s largest manufacturer says that Brexit is “just not that big a deal”, and is excited about frictionless trade. It is worth noting that the corporation’s main customers are Saudi Arabia, the US and the UK, with Europe only accounting for 8%eight percent of its income in 2017.Theresa May set up five business councils in November 2018 in order for companies to advise her on “post-Brexit opportunities”. The chair of BAE systems, Roger Carr, along with Rolls- Royce chair Ian Davis, co-lead the industrial, infrastructure, and manufacturing council, which is to meet three times a year.Meanwhile, ADS and its member companies, which include Airbus, missiles manufacturer MBDA and G4S, among others, invited MPs to meet them in parliament on 9 January, to plead the business case for voting for Theresa May’s ultimately doomed EU withdrawal deal, which was rejected on 15 January. ADS chief executive Paul Everitt has spoken of the continued uncertainty of Brexit being damaging to business investment, forcing companies to implement costly contingency plans, while Airbus warned this week that the company could pull out of the country in the event of a no-deal Brexit, or perhaps even with one. It’s worth noting that Airbus, which manufacturers commercial and military aircraft, has been propped up by both British government and EU subsidies in recent years. Taxpayer subsidies don’t end there. An extra £2 billion was allocated to the international trade budget last October to increase Britain’s presence across the world, of which touting arms deals is a large part.
Labour MPs rebel to vote down Cooper’s no-deal amendment - Fourteen Labour MPs voted with Theresa May’s government to prevent parliament from taking steps to prevent a no-deal Brexit by extending the article 50 negotiating period in order to agree an alternative deal with the EU. The former minister Caroline Flint and Laura Smith, the MP for Crewe and Nantwich, joined with the veteran Eurosceptics Kate Hoey, Graham Stringer and Dennis Skinner in voting down Yvette Cooper’s amendment by 321 votes to 298. Their votes helped cancel out those of 17 Conservative rebels who voted for Cooper’s amendment, which Labour’s frontbench had decided it would support earlier in the day to “reduce the threat of the chaos of a no deal”. A sizeable Labour rebellion had been expected for several days, despite the efforts of Cooper to calm concerned MPs in her party by telling the Commons it only gave parliament the right to vote on whether to extend article 50 if time ran out. But she failed to persuade the doubters who defied the party whip, and whose numbers were noticeably larger than the half dozen or so Labour MPs who previously voted with the government before on key Brexit votes. Reacting to the result, Jeremy Corbyn chose to focus on the success of another no-deal amendment, in the name of the Conservative backbencher Dame Caroline Spelman, which was carried by 318 votes to 310. The Labour leader said he would meet May, having refused to do so for a fortnight, because “parliament has voted to remove the immediate threat of crashing out without a deal on 29 March”. The Spelman amendment, which was also supported by Labour’s Jack Dromey, invited MPs to reject the UK leaving the EU without agreeing a deal, but is not legally binding on the government. The Cooper amendment was intended to create parliamentary time for MPs to legislate to prevent no deal.
Humiliated Corbyn says he now WILL meet May to discuss Brexit in U-turn after MPs rejected Labour bid to keep Britain in the EU past March 29 - Jeremy Corbyn suffered a double humiliation last night as MPs roundly rejected his plans to delay Brexit – and he finally had to agree to talks with the Prime Minister. Fourteen of the Labour leader's own MPs voted against a proposal – which he had backed just hours earlier – to keep Britain in the EU beyond March 29 if no deal is agreed by the end of the month. It was one of a string of defeats, with the only vote Mr Corbyn's side winning being a non-binding expression of will that the UK should not leave without a deal. And just two weeks after rejecting Theresa May's invitation to discuss the way forward for Brexit, he performed a U-turn and agreed to see her in Downing Street.
Brexit: Tory minister Richard Harrington issues two-week ultimatum to Theresa May - A Tory minister has issued a brazen two-week ultimatum to Theresa May over Brexit during a live radio interview. Business Minister Richard Harrington warned the patience of Tories opposed to No Deal on March 29 was running out.In an incredible statement by a serving member of the government, he snapped: "We will give her two weeks. But that is it."The public statement is highly unusual and shows the extent to which discipline has broken down in the Tory government over Brexit. Mr Harrington has made repeated threats before, warning No Deal could shut Jaguar and Mini, calling No Deal a "complete disaster" and effectively daring Theresa May to sack him. "Many of us have been to see the Prime Minister and have told her the absolute catastrophe and disaster for jobs and the economy that no-deal would be," he told the BBC Radio 4 Today programme today. Mr Harrington made the comments as Mrs May faces a string of votes in the Commons tonight on the way forward for Brexit.Mr Corbyn told MPs: 'Now that the House has voted emphatically to reject the No Deal option the Prime Minister was supporting could I say we are now prepared to meet her to put forward the points of view from the Labour Party of the kind of deal we want from the European Union. To protect jobs, to protect living standards and to protect rights and conditions in this country.' Amid remarkable scenes, the Labour leader lost a series of amendments thanks to a string of rebellions by backbenchers, many of them in Leave seats. It meant the Commons voted 321 to 298 against the main proposal, tabled by senior Labour MP Yvette Cooper, which would have seen the UK staying in the EU beyond March 29. Mr Corbyn had confirmed at lunchtime that his party would be supporting a delay of three months, saying it was important to avoid a No Deal Brexit and ensure there was time for renegotiation. But 14 Labour MPs rebelled, giving the Government a majority of 23 against the extension of Article 50. They included serial Corbyn opponents such as John Mann and Ian Austin along with hard-Left supporters of the leader, such as Dennis Skinner. And not enough rebel Tory MPs – just 17 – voted with former Conservative minister Nick Boles, who had also advocated the delay.
Brexit: May Running Down the Clock by Backing Yet-Again-Nixed Renegotiation of Withdrawal Agreement – Yves Smith - You have to give Theresa May credit for being clever, or at least more clever than the various MPs that were braying that Parliament would take control of Brexit yesterday. No such thing happened, not even close. For starters, all Parliament was voting on were motions, and motions are not legislation, so none of them could even deliver on something that was also supposed to occur yesterday, that of “taking a no-deal Brexit off the table,” although they could have started that ball rolling. Instead, two of five motions passed, and one of them, the so-called Brady amendment, was backed by the Government. It read:To require that the Northern Ireland backstop be “replaced with alternative arrangements to avoid a hard border” while supporting the notion of leaving the EU with a deal and therefore supporting the Withdrawal Agreement subject to this change.The second was: To reject the UK leaving the European Union “without a Withdrawal Agreement and a Framework for the Future Relationship” Note that Yvette Cooper’s amendment to debate her bill which would delay Brexit and Dominic Grieve’s to allow Parliament six days to debate amendable motions were both defeated. By backing the first amendment, the Government is running out the clock by at least another ten days and more likely, two weeks. May knows full well that the EU isn’t going to change its repeatedly-reaffirmed position that it is done renegotiating the Withdrawal Agreement. It has indicated it would entertain negotiating a markedly different deal as part of the “future relationship” if the UK were to relent on its major red lines. But the idea that the EU is going to concede on the Irish backstop because the UK is having a hissy fit is a non-starter. Depressingly, some UK press outlets are enabling the delusion that the EU will tremble in its boots in the face of the UK’s wrath. For instance:
At least none of them had “handbag” in the title. And the EU, predictably and promptly, reiterated its “no”. Donald Tusk’s spokesman immediately issued a statement that included, “”The backstop is part of the Withdrawal Agreement, and the Withdrawal Agreement is not open for re-negotiation.”
Project Fear Goes To '11'- Brexit Could Lead To Thousands Of Deaths, Mass Hunger - If you listen to the government tell it, a post-"hard" Brexit Britain will inevitably resemble the post-apocalyptic Australia from "Mad Max": A post-apocalyptic hellscape where Britons will be forced to battle it out "Thunderdome"-style for access to scare essentials like food, medicine and "guzzoline".Sound outlandish? Well, that's because it probably is. The notion that reverting to WTO rules on trade would cause anything beyond a transient disruption to supply chains is ridiculous on its face. Most of this blatant fearmongering can be attributed to a very effective propaganda campaign we've dubbed "Project Fear". In recent weeks, May's government has staged traffic jams near would-be border checkpoints and warned that the hit to economic growth will linger for years, if not decades. Yet, out of naivety or shrewdness, Brexiteer MPs have largely ignored these warnings and continued to oppose May's deal, despite her insistence that it is Britain's "best and only" option. So far, the EU has refused to reopen negotiations on the Withdrawal Agreement, prompting May's latest attempt to transform a wave of resistance into a surmountable obstacle by winning support for an amendment that she could then pitch to the EU27 as the only workable arrangement. But like her other plans, this too appears to be mired in conflict.Fearful of the shortages that could lie just around the corner, both warehouses and UK citizens have begun hoarding food, medicine and other supplies. Perhaps realizing that they have pushed the country to the brink of hysteria, PM May's government on Monday tried to walk back some of the more outrageous claims, assuring citizens that there will be enough to eat in the event of a hard Brexit, though prices on fresh foods could see a temporary spike. The walk back followed another warning from supermarket chains about possible supply shortages if 'no deal' goes through."The U.K. has a high level of food security based on a wide range of sources, including strong domestic production and imports from other countries," James Slack told reporters in London on Monday afternoon. “This will continue to be the case whether we leave the EU with our without a deal.”On the face of it, the statement - in response to a warning from food retailers - is uncontroversial. But the government of the world’s fifth-largest economy having to reassure its citizens they’ll have food is a mark of the atmosphere pervading the nation.
In Major Win For May, MPs Approve Amendment To Eliminate Irish Backstop - In a major win for May, the Commons has voted 317-301 in favor of the Brady amendment seeking to remove the most controversial part of the Brexit deal with the EU: The infamous 'Irish Backstop.' The amendment calls for replacing the backstop with a TBD alternative arrangement. May now has the mandate from Parliament she's been seeking to try and convince the EU to reopen the Withdrawal Agreement. However, according to Capital Economics, while the win for Graham Brady's amendment is "a good result for Theresa May," it's not a great outcome for the pound because, according to CE analysts, it increases the chances of a 'no deal' exit. The EU has repeatedly said it will under no circumstances reopen negotiations, per the FT. Ironically, barely an hour after MPs rejected two amendments to delay Brexit, European Council President Donald Tusk said the EU would consider delaying Brexit, should the UK ask. "Should there be a U.K. reasoned request for an extension, the EU-27 would stand ready to consider it and decide by unanimity. The EU-27 will adopt this decision, taking into account the reasons for and duration of a possible extension, as well as the need to ensure the functioning of the EU institutions," Tusk said. "We welcome and share the UK Parliament’s ambition to avoid a no-deal scenario." But will they finally bite the bullet and accept that the only feasible option for avoiding 'no deal' is reopening the withdrawal agreement?
Brexit latest news: Jean Claude-Juncker and Michel Barnier rule out changing Withdrawal Agreement and warn of increased no-deal risk Michel Barnier criticised Theresa May for ‘distancing herself’ from the Brexit deal she struck with Brussels before attacking former Brexit secretaries David Davis and Dominic Raab for playing a "blame game" with the EU. The EU’s chief Brexit negotiator and Jean-Claude Juncker told MEPs in the European Parliament in Brussels that they would reject any British efforts to renegotiate the Irish border backstop. Mr Barnier and Mr Juncker said that nothing had changed in the EU’s position despite the House of Commons voting for the Brady amendment, which called on the prime minister to renegotiate the backstop. Both men warned the vote had increased the chance of a no deal Brexit and vowed the EU would never abandon Ireland at a plenary session of the parliament on Wednesday. "For the first time yesterday the UK prime minister openly called for the reopening of the Withdrawal Agreement, even before the vote later in the evening," Mr Barnier said. "She took distance from the agreement she had herself negotiated and on which we had achieved an agreement." Mr Barnier attacked David Davis and Dominic Raab, who have been vocal critics of the Brexit deal after resigning as Brexit secretaries He said: "When I hear some people who were even part and parcel of the negotiations saying what they’re saying it’s tough I find it hard to accept this blame game they’re trying to play against us." "At same time the House of Commons rejected a no deal scenario without clarifying what steps they would take to avoid that scenario," Mr Barnier added, referring to the non-binding Spelman amendment which was also passed. "Voting against a no deal does not rule out the risk of no deal. This Agreement remains the best and only means to ensure an orderly withdrawal. This agreement will not be renegotiated," he said. "We know the House of Commons is against many things. But we still do not know what exactly the House of Commons is for," Mr Juncker said. “In less than 60 days the UK is due to leave the EU. this is a bad decision, he claimed, “Even as the commission has defended interests of the EU, the spirit of respect and friendship has accompanied us at every step of these negotiations. "The Withdrawal Agreement is a result of that. The withdrawal agreement remains the best and only deal possible," he said, "we said so in November, we said so in December, we said so after the first meaningful vote in January."
It’s up to you to sort out Brexit impasse, Donald Tusk tells Theresa May Theresa May has been told by Donald Tusk that it is her job to find a solution to the Brexit impasse during what sources have described as an “open and frank” 45-minute phone call in the wake of her demands for a renegotiation. The European council president warned the prime minister that a precondition for any further talks was a concrete plan from Downing Street that could clearly command the support of parliament. She in turn insisted to the EU’s most senior official that parliament had highlighted the issue that needed to be addressed in its vote on the so-called Brady amendment on Tuesday evening. But the EU source said May then subsequently failed to offer any proposals during the conversation. Tusk is understood to have replied that the prime minister could not expect Brussels to come to her rescue with a solution. EU officials and leaders are increasingly concerned that Downing Street is seeking to blame Brussels for their failures. After the call, which overran as the two leaders grappled over the next steps in the talks, Tusk tweeted: “My message to PM Theresa May: the EU position is clear and consistent. The withdrawal agreement is not open for renegotiation. Yesterday, we found out what the UK doesn’t want. But we still don’t know what the UK does want.” There are no talks yet planned in Brussels, although the prime minister told Tusk that a face-to-face meeting would be useful in the coming days. The call came just hours after Michel Barnier, the EU’s chief negotiator, accused May of distancing herself from her own Brexit deal as the EU steadfastly rejected each of the demands the prime minister made in parliament on Tuesday evening over the Irish backstop. “She took distance from the agreement she herself negotiated and on which we had reached an agreement,” Barnier told MEPs holding a debate in the European parliament. The UK government, he went on, was explicitly supporting an amendment calling for the backstop to be replaced by alternative arrangements that were never defined. “Calmly, I will say, right here and now, we need this backstop as it is.” Barnier also launched a thinly veiled attack on the former Brexit secretaries, Dominic Raab and David Davis, as he called for a “lucid and realistic” approach from the UK. “When I hear some people who were even part and parcel of the negotiations saying what they’re saying, it’s tough. I find it hard to accept this blame game they’re trying to play against us,” he said.
Brexit: Brussels says UK should keep paying into EU budget after no-deal - Britain would keep paying into the EU budget for years after a no-deal Brexit under contingency plans drawn up by the European Commission. In a move likely to enrage Brexiteers and cause yet another political row in Westminster, on Wednesday Brussels unveiled proposals for the UK to keep up its payments for the 2019 EU budget and beyond. The UK would have to consent to the plan, with a deadline to agree set for 18 April – deliberately placed after the effects of a no-deal would have become apparent. “What we were thinking is we need to give a period which would allow some time for reflection,” one EU official said of the chosen cut-off date. The EU says keeping up payments would help soften the impact of the no-deal cliff edge in areas such as agriculture and research funding that rely on EU payments.
Brexit: bewilderment, dismay and shame Chris Grey - It’s difficult to feel anything other than bewilderment and dismay at the events unfolding in Britain. My comment at the beginning of my previous post that this week would see some of the dust clear proved somewhat wide of the mark. Instead, in a plot worthy of Yes Prime Minister, Theresa May instructed her MPs to support an amendment which rebelled against her previously stated policy that the Withdrawal Agreement (WA) could not be re-negotiated, to the effect that the Northern Ireland backstop should be renegotiated so as to be replaced by ‘alternative arrangements’. This, the ‘Brady Amendment’, was passed. In the meantime, a new, somewhat related, Brexit rabbit hole was opened up. The grandiosely named ‘Malthouse Compromise’, more prosaically called ‘Plan C’ (£), consists, confusingly, of a Plan A and a Plan B. There is nothing new about either of them. They are re-treads or amalgamations of various documents that have been circulated by the ERG and allied groups for several months*. But, significantly although surprisingly, this initiative has the support of non-ERGs from the more remain wing of the Tory Party, such as Nicky Morgan. Plan A is effectively the existing WA with the backstop ripped out to be replaced by the miraculous ‘alternative arrangements’ proposed by the IEA’s Shanker Singham (formerly of the now defunct Legatum Institute) and others last December. If Plan A fails then Plan B is effectively the ‘managed no deal’ canard, whereby there is no WA but, nevertheless, an agreed transition period and various side deals on security etc. Implicitly, as with Plan A, the envisaged future trade relationship is Canada +++ but Plan B also invokes the latest ERG factoid, concerning GATT Article XXIV which, unfortunately, doesn’t mean what they think it does. These ideas have been endlessly debunked by a series of experts – they are the “junk ideas” I referred to in a recent post as “having no foundation in political reality”. They have already been advanced and rejected not just by the EU but by the UK Government. The latter is an important point to make, given the climate of accusations of EU punishment, and it was made by Sabine Weyand, the EU’s formidable deputy Brexit negotiator and trade specialist.
Theresa May to offer Labour MPs cash for their constituents in bid to win Brexit deal - — Theresa May has raised the prospect of offering extra spending to leave-voting UK regions in a bid to try and win the support of Labour MPs for her Brexit deal. Government officials met with Labour MPs on Wednesday afternoon to discuss the prospect of "economic support for towns and seaside villages that predominantly voted leave," an MP present at the meeting told Business Insider. A Downing Street official confirmed the talks and said they were part of the prime minister's "long-standing commitment to tackling inequalities between communities." The prime minister met with Labour Party leader Jeremy Corbyn for talks on Wednesday and has calculated that she could need the support of some Labour MPs to push her deal through parliament in February. She suffered a record defeat on her Brexit deal in the Commons earlier in January and has so far looked to win over the support of her Conservative colleagues and DUP partners. But some Tory MPs appear determined to vote against her deal, leading May to court a small band of Labour MPs, many of whom represent Leave-voting constituencies and wish to be seen to deliver on Brexit. A total of 24 Labour MPs defied the party whip in a Brexit vote on Tuesday, either by abstaining or voting against an amendment tabled by Yvette Cooper which sought to prolong Article 50 and delay the threat of a no-deal Brexit. A number of MPs on Labour's front bench joined the rebellion. However, a spokesperson for Corbyn refused to say on Wednesday whether the individuals would face any disciplinary action, leading to suspicion among other Labour MPs that the leadership is deliberately turning a blind eye in order to facilitate May's deal passing the Commons.
Brexit: UK plans new product safety mark for ‘no deal’ scenario The government has drawn up plans to replace the CE safety symbol on products in the event of a no-deal Brexit, the BBC has learned. Household items such as kettles, light bulbs and toys are stamped with the letters CE. The mark belongs to the European Union, so if Britain leaves the EU without a deal, goods will have to be stamped with a new symbol - UKCA. Some manufacturers are concerned that such a change will be costly. Since 1993, the CE mark has shown consumers that an item meets EU legal requirements and has been tested. The new logo drawn up by the UK government stands for UK Conformity Assessed (UKCA).
Officials warn of putrefying piles of rubbish after no-deal Brexit Government officials are preparing to deal with “putrefying stockpiles” of rubbish in the event of a no-deal Brexit, according to documents leaked to the Guardian. If the UK leaves the EU without a deal on 29 March, export licences for millions of tonnes of waste will become invalid overnight. Environment Agency (EA) officials said leaking stockpiles could cause pollution. The EA is also concerned that if farmers cannot export beef and lamb, a backlog of livestock on farms could cause liquid manure stores to overflow. A senior MP said the problems could cause a public health and environmental pollution emergency. An EA source said: “It could all get very ugly, very quickly.” The emails leaked to the Guardian were sent to EA staff, asking for 42 volunteers to staff crisis management centres that would deal with incidents. On Tuesday the chief executive of the civil service revealed plans to move up to 5,000 staff into an emergency command and control centre in the event of no deal. An EA email sent on Thursday, labelled “importance: high”, said crisis centres could go live on 18 February and run from 7am to 8pm seven days a week, with plans to operate 24/7 if needed. To explain the potential tasks, the email gave two examples. “If there is a no-deal scenario, the current export of waste may cease for a period. This could result in stockpiled waste which causes licence breaches,” the email said. “Odours will obviously be an issue as the stockpiled waste putrefies and there may be runoff of leachates, causing secondary pollution.” The email said the waste could become a high-profile issue. “It will quickly escalate into a political one because the operators will state that they have no means to move the waste.” The second example related to animal slurry. “Problems may arise in exporting livestock to the EU. In that situation, farmers may be overstocked and unable to export lamb/beef etc. That means that they may have problems with slurry storage capacity and insufficient land spreading capability.” The EA source said: “The examples seem like real possibilities. There’s a serious amount of panic going on.”
UK Stockpiling Trauma Packs In Case Of No-Deal Brexit - The UK is stockpiling "trauma packs" over concerns that border delays caused by a no-deal Brexit could endanger lives, according to The Guardian, which says the move highlights "the dependence of the UK on frictionless movement of goods across the border." Made by Johnson & Johnson and flown in during terrorist attacks, the kits are typically not stocked by hospitals due to expiration dates on included medications. Further opining on the "dangers posed by Brexit," the head of England's National Health Service said: "What we are doing is reviewing the tens of thousands of individual medicines, medical devices and other products that the health service uses, making sure that the manufacturers of those products have got extra buffer stockpiles," adding "We do obviously have a reliance on the way the transport infrastructure works in order to continue uninterrupted supply." It's "in nobody's interest" in western Europe to disrupt the flow of medical equipment, Stevens added. "Getting those transport logistics right is absolutely crucial for the continuous flow of medical supplies, that is a statement of the obvious." At the time of the 2017 bombing of the Manchester arena, in which 23 people died, the high number of casualties of both adults and children required Johnson & Johnson to swiftly fly in 500 additional packs from Belgium containing plates, wires, cables, nails and screws for the stabilizing of joints. “This is routine and the rapid deployment of trauma packs to the UK by the European Distribution Centre meant patient safety was never compromised,” a spokesman for Johnson & Johnson said. -The Guardian
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