Kansas Fed President Warns Cutting Rates Will Lead To Bubbles And A Recession - Earlier this morning, amid a barrage of tweets praising US trade war strategy, Trump also touched on another key topic that has become especially sensitive to the president: the Fed's monetary policy. Or perhaps China's monetary policy, because in a fusion tweet addressing both, Trump said that "China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing. If the Federal Reserve ever did a “match,” it would be game over, we win!" Accurate or not, and one can argue that China's monetary policy traditionally mimicked that of the Fed, with the PBOC raising or lowering rates in lockstep with the US central bank, Trump's tweet made it clear once again that the president is especially eager to see the Fed slash rates.And, with the Fed once again full of doves, we are confident that they would be just as happy to comply if given the right reason.Luckily, not everyone on the FOMC has drank the Kool-Aid, and in a speech to the Economic Club of Minnesota, Kansas City Fed President Esther George said she’s opposed to cutting interest rates in order to raise inflation to the central bank’s 2% target, warning that could lead to asset-price bubbles and ultimately an economic downturn.Slamming an argument made last Friday by the Fed's uber-dove, Neel Kashkari who claimed in a Bloomberg interview that only lower rates for longer can help fix inequality (clearly unaware that it is the Fed's QE and ZIRP policies that are behind the record wealth inequality in the US), George - who luckily is a lone voice at the Fed and votes on monetary policy in 2019 - said that "lower interest rates might fuel asset price bubbles, create financial imbalances, and ultimately a recession." "In current circumstances, with an unemployment rate well below its projected longer-run level, I see little reason to be concerned about inflation running a bit below its longer-run objective" she added.
Judy Shelton, Trump's Next Fed Choice, Favors A Gold Standard And Free Trade -- Economist Judy Shelton, a Trump economic advisor and a gold standard advocate is rumored to be Trump's next Fed pick. Bloomberg reports White House Considers Economist Judy Shelton for Fed Board The White House is considering conservative economist Judy Shelton to fill one of the two vacancies on the Federal Reserve Board of Governors that President Donald Trump has struggled to fill. She’s currently U.S. executive director for the European Bank for Reconstruction and Development, and previously worked for the Sound Money Project, which was founded to promote awareness about monetary stability and financial privacy. On April 21, Judy Shelton had an ope-ed in the Wall Street Journal: The Case for Monetary Regime Change. Since President Trump announced his intention to nominate Herman Cain and Stephen Moore to serve on the Federal Reserve’s board of governors, mainstream commentators have made a point of dismissing anyone sympathetic to a gold standard as crankish or unqualified.But it is wholly legitimate, and entirely prudent, to question the infallibility of the Federal Reserve in calibrating the money supply to the needs of the economy. No other government institution had more influence over the creation of money and credit in the lead-up to the devastating 2008 global meltdown. And the Fed’s response to the meltdown may have exacerbated the damage by lowering the incentive for banks to fund private-sector growth. Meanwhile, for all the talk of a “rules-based” system for international trade, there are no rules when it comes to ensuring a level monetary playing field. The classical gold standard established an international benchmark for currency values, consistent with free-trade principles. Today’s arrangements permit governments to manipulate their currencies to gain an export advantage. Money is meant to serve as a reliable unit of account and store of value across borders and through time. It’s entirely reasonable to ask whether this might be better assured by linking the supply of money and credit to gold or some other reference point as opposed to relying on the judgment of a dozen or so monetary officials meeting eight times a year to set interest rates. A linked system could allow currency convertibility by individuals (as under a gold standard) or foreign central banks (as under Bretton Woods). Either way, it could redress inflationary pressures.
Q2 GDP Forecasts: Around 2% - From Merrill Lynch: We are tracking 3.0% for 1Q GDP. ... 2Q remains at 2.1%. [May 10 estimate] From the NY Fed Nowcasting Report: The New York Fed Staff Nowcast stands at 2.2% for 2019:Q2. [May 10 estimate]. And from the Altanta Fed: GDPNow: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thesecond quarter of 2019 is 1.6 percent on May 9, down from 1.7 percent on May 3. [May 9 estimate] CR Note: These early estimates suggest real GDP growth will be around 2% annualized in Q2.
Gundlach Says Weakness Appearing in U.S. Economic Indicators -- Some weakness is showing up in the U.S. economy despite lofty predictions of growth, according to Jeffrey Gundlach, the chief investment officer of DoubleLine Capital.The Atlanta Federal Reserve recently forecast real gross domestic product at 1.6%, and a Citigroup Inc. basket of economic indicators has fallen to its lowest level since the financial crisis, Gundlach said on an asset-allocation webcast Tuesday. The Atlanta Fed figure can be volatile.The probability of a recession in the next two years “would be extremely high,” Gundlach said. “Twelve months I’d give you a recession probability that’s 50-50. Next six months I’d probably have it down at 30%.” Gundlach, whose Los Angeles-based firm oversaw more than $130 billion as of the end of March, also said:
- The odds of a Fed rate cut in the next 12 months are about 70%.
- The Fed is now “policy fluid” under Chairman Jerome Powell, who has repeatedly changed his comments about plans for interest-rate changes.
- The economy has been growing largely because of a debt scheme as the U.S. increases spending and fuels deficits beyond expansion in output.
- The bond market is “extremely exposed” to a downturn in the U.S. dollar, because some foreign buyers have been purchasing Treasuries without currency hedges.
Q2 GDP Forecasts: 1% to 2% - From Merrill Lynch: Based on the latest high frequency data, 2Q GDP is already tracking only 1.8%, down 0.3pp from our prior forecast. [May 17 estimate] From the NY Fed Nowcasting Report: The New York Fed Staff Nowcast stands at 1.8% for 2019:Q2. [May 17 estimate].And from the Altanta Fed: GDPNow: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thesecond quarter of 2019 is 1.2 percent on May 16, up from 1.1 percent on May 15. [May 16 estimate] CR Note: These early estimates suggest real GDP growth will be under 2% annualized in Q2.
Beware the Time Bomb in the Trump Economy - There's a time bomb in Donald Trump’s economy, and it’s likely to detonate before 2020. Of course, it’s hard to see right now. Annualized G.D.P. is forecast to be a respectable 3.2 percent. The falling unemployment rate—which Trump derided as fake news until he took office—is at3.6 percent, the lowest in nearly 50 years. And he is doing his level best—and succeeding, at least temporarily—in keeping interest rates lower than they otherwise would be but for his ongoing meddling into the affairs of the Federal Reserve. Ironically, the very actions that Trump has taken, and that he believes are responsible for supercharging the economy will come back to haunt him. There’s always a price to pay when capitalists are allowed to roam free without supervision. But the real problem for Trump will come from his Fed gambits. By keeping interest rates at artificially low levels for so long (it’s been nearly 11 years and counting), debt investors are on a worldwide hunt for higher yields—the so-called “yield-hunger games”—forcing them to overpay for bonds, loans, and other debt-like instruments, and to take higher and higher risk without getting properly compensated for them. When the economy turns—and it will; it always does—investors will lose hundreds of billions of dollars as a result of mispricing risk. “At this point, there’s more actual risk exposure than Trump would have you believe,” says one senior Wall Street banker, a friend of mine. “The world is more leveraged than it has ever been before at the corporate level, at the sovereign level, and collectively at the consumer level.”
Canada Dumps Most US Treasuries In 8 Years, China Resumes Selling - Overall, U.S. total cross-border investment was an $8.1 billion outflow in March, consisting of:
- Foreign net selling of Treasuries at $12.5b
- Foreign net selling of equities at $23.6b
- Foreign net buying of corporate debt at $1.1b
- Foreign net buying of agency debt at $4.7b
The biggest seller of Treasuries was our friends to the north - Canada - who dumped $12.5 billion, the biggest drop since July 2011. And China was the second biggest Treasury seller (which comes at an awkward moment after the proxy threats in the last week). After 3 months of buying, China resumed its previous trend of selling US Treasuries in March, dumping over $10 billion worth taking the holdings to their lowest since May 2017.The Cayman Islands were the month's biggest buyers (typically proxy for hedge funds), adding $9.4bn Along with Singapore, India, Japan, Hong Kong, and Belgium (often considered another proxy for China).
Iran is an active threat — but we're willing to talk with them, says US secretary of state -- Iran is an active threat to American interests as it sows chaos in the Middle East, but the White House would “of course” welcome the opportunity to negotiate with Tehran, U.S. Secretary of State Mike Pompeo said Saturday. Speaking with CNBC’s Hadley Gamble, America’s top diplomat said he’s seeing increased threats from Iran, and that President Donald Trump’s administration is reinforcing its capacity to respond to any offensive action from Iran. That’s why, according to Pompeo, the U.S. deployed a carrier strike group and other weaponry to the region. “We’ve done all the right things to increase our security posture to the best of our ability,” Pompeo said, “but we also want to make sure that we had deterrent forces in place, so in the event that Iran decided to come after an American interest — whether that be in Iraq, or Afghanistan, or Yemen, or any place in the Middle East — we were prepared to respond to them in an appropriate way. ” We’re not going to miscalculate: Our aim is not war, our aim is a change in the behavior of the Iranian leadership. Despite the greater military presence in the region, the secretary of state stressed that the U.S. isn’t looking for a fight — and it wouldn’t stumble into one either. “We’re not going to miscalculate: Our aim is not war, our aim is a change in the behavior of the Iranian leadership. We hope the Iranian people will get what they finally want, and what they so richly deserve,” he said. “The forces that we’re putting in place, the forces that we’ve had in the region before — you know, we often have carriers in the Persian Gulf — but the president wanted to make sure that, in the event something took place, we were prepared to respond to it in an appropriate way.” “An attack on American interests from an Iranian-led force, whether it’s an Iranian proper or it’s an entity that is controlled by the Iranians, we will hold the responsible party accountable. President Trump has been very clear about that: Our response will be appropriate.”
Media Amplify Iran War Propaganda – Play Up Intelligence Lies --The Trump campaign launched a propaganda campaign to prepare the public for a war on Iran. The campaign is similar to the one the Bush administration ran in 2002 and 2003 preparation for the war on Iraq.Anonymous officials make claims about alleged 'intelligence' that is said to show 'Iranian threats' against U.S. 'interests'. Iran, it is claimed, has this or that malign motive to do such. Routine military rotations to the Middle East are then declared to be 'in response' to the claimed 'threats'.The media, either played like a fiddle by the administration or willing accomplices, repeat each and any such nugget thrown at them without any second thought. Anti-Iranian lobbyist are presented as 'experts' to reinforce the messaging.Here are some examples of the above methods.NBC News headlines: Trump's top intelligence and military advisers held unusual meeting at CIA on Iran, officials say: Current and former officials said it is extremely rare for senior White House officials or Cabinet members to attend a meeting at CIA headquarters. In a highly unusual move, national security adviser John Bolton convened a meeting at CIA headquarters last week with the Trump administration's top intelligence, diplomatic and military advisers to discuss Iran, according to six current U.S. officials. The meeting was held at 7 a.m. on Monday, April 29, and included CIA Director Gina Haspel, Acting Defense Secretary Patrick Shanahan, Chairman of the Joint Chiefs of Staff Gen. Joe Dunford, Secretary of State Mike Pompeo, and Director of National Intelligence Dan Coats, five of the officials said. The U.S. has a very specific intelligence gathering capability on Iran that is only able to be reviewed at CIA headquarters, two former officials said. It is highly likely that the "very specific intelligence gathering capability on Iran", that can only be reviewed at the CIA headquarter is the same "very specific intelligence gathering capability on Iraq" that officials used in the run up to war on that country. One of the authors of the NBC News story is Ken Dilanian, the CIA's Mop-up man, known for letting the CIA edit his reports before they get published. The U.S. public must surely trust these people and whatever nonsense they come up with.
Washington pushes to brink of war against Iran - The abrupt trip staged by US Secretary of State Mike Pompeo to Brussels to push Washington’s hard line against Iran, combined with the deployment of still more US military assets to the Persian Gulf, point to Washington’s calculated escalation of a war crisis in the region. Late Monday, the New York Times posted an article under the headline “White House Reviews Military Plans Against Iran, in Echoes of Iraq War.” The article cited as sources “more than half a dozen national security officials” and reported that a meeting of President Trump’s top national security aides last week discussed a plan to send as many as 120,000 troops to the Middle East. The spark for an all-out conflict can come from any one of a number of staged provocations, including the alleged sabotage of two Saudi oil tankers and two other vessels off the coast of the United Arab Emirates (UAE) reported on Sunday.Saudi Energy Minister Khalid al-Falih stressed that one of the Saudi tankers that was allegedly damaged was en route to pick up Saudi oil to take to the United States, a detail apparently highlighted to make the case that “US interests” were at stake in the incident.Pompeo, national security adviser John Bolton and other US officials have repeatedly vowed to take “swift and decisive” military action in defense of US interests in the oil-rich region. They have threatened to unleash “unrelenting” force against Iran in retaliation for any action alleged to be carried out by a wide array of forces dubbed by Washington as Iranian “proxies,” ranging from Hezbollah in Lebanon to Hamas in the Palestinian Gaza Strip, the Houthi rebels in Yemen and various Shia militias in Iraq and Syria.The alleged sabotage of the four vessels took place in the Gulf of Oman, east of Fujairah, a major oil port that lies approximately 85 miles south of the strategic Strait of Hormuz, through which passes roughly one-third of the world’s oil transported by sea. Saudi and UAE officials indicated that there were no casualties and no oil spills resulting from the alleged sabotage. A video posted online showed a hole torn into the hull of a Norwegian-owned ship at its waterline.
Is America Ready For John Bolton's War With Iran? - National Security Advisor John Bolton’s announcement this week that the U.S. is deploying a carrier strike group and a bomber task force to the U.S. Central Command region seemed perfectly framed to put America on a war footing with Iran. And it is. Claiming that the decision was made in response to “a number of troubling and escalatory indications and warnings,” Bolton declared that “the United States is not seeking war with the Iranian regime.” But, he added, “we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces.” It took the Defense Department a full day to respond to Bolton’s statement, with acting Secretary of Defense Pat Shanahan finally tweeting that the “announced deployment of the @CVN_72 and a @USAirForce bomber task force to the @CENTCOM area of responsibility…represents a prudent repositioning of assets in response to indications of a credible threat by Iranian regime forces.” Shanahan followed with another tweet: “We call on the Iranian regime to cease all provocation. We will hold the Iranian regime accountable for any attack on US forces or our interests.” The USS Abraham Lincoln battle group had deployed a month ago from its Norfolk, Virginia, home port and was recently engaged in maneuvers in the Mediterranean Sea. The Pentagon acknowledged that the Abraham Lincoln was scheduled to support CENTCOM during its deployment, but that its arrival was being “accelerated” due to intelligence indicating an imminent Iranian threat. The fact that Bolton chose to repurpose routine deployments of U.S. military forces into the Middle East as an emergency response to an unspecified threat from Iran is in and of itself a curiosity. Bolton is an advisor to the president, a non-statutory (i.e., not confirmed by the Senate) member of the White House staff who is not in the military chain of command and lacks any command authority. While Shanahan followed up indicating that the orders for the deployments had been authorized by him the day of Bolton’s announcement, this simply isn’t the case—they were authorized well prior to Bolton’s statement. The fact that the White House announced the deployment of U.S. military forces in response to allegations of an emerging threat in the Middle East, as opposed to by the Pentagon, reflects the political and operational roots of the current crisis.
White House Considers Pentagon Plan to Deploy 120,000 US Troops to Iran - — John Bolton ordered the Pentagon to come up with an “updated” plan for getting more American troops into the Middle East to fight a war against Iran. The plans are in now, according to officials, who say that the options envision 120,000 US ground troops in the Middle East.Incredibly, this option appears to just be the start of the war, as officials say that the 120,000 plan does not include a US ground invasion of Iran. Officials concede that the ground invasion would require far more troops.Instead, the 120,000 is just the next step in the ongoing US escalations toward war, and is envisioned as a response to any Iranian threat on US forces or interests, or any hint of acceleration of its nuclear program. US officials quoted in the media about the plan are everywhere and always supportive of the idea, and the underlying narrative of an “Iranian threat.” Some argue that the fact that the Pentagon would send 120,000 troops and not even invade proves how big the threat is, while others say that the 120,000 troops would be a “scare tactic” to warn Iran off any aggressive moves.
Trump ‘Sort of’ Denies Plan to Deploy 120,000 US Troops for War With Iran — President Trump sort of denied last night’s report that the Pentagon’s plan for a war with Iran would see 120,000 US ground troops sent to the Middle East, saying that the report was in the New York Times and therefore must be “fake news.”The 120,000 troops plan was attributed to the Pentagon, and said to be a “new” assessment which had been solicited by John Bolton, and which was making the rounds. At the time, it was reported to be unclear if it had gotten to where Trump was being briefed on it.Trump was dismissive of that, though not the war, saying if the US attacks Iran he would “send a hell of a lot more” than 120,000 troops. That previous report indeed said the 120,000 was just for a border war, but not enough for an invasion. Though some media outlets are seeing this as the White House downplaying the chances for war, President Trump clearly doesn’t seem to be interested in doing so. This is, after all, just a day after he threatened “great suffering” on Iran, and his disavowal of the 120,000 troops number appeared to rest heavily on it being insufficiently large.
Pompeo Skips Moscow Trip To Pressure EU Officials In Brussels On Iran -- After snubbing Germany's Merkel last week to make an unplanned stop in Iraq to pressure leaders there into resisting cooperation with Iran, Secretary of State Mike Pompeo on Monday scrapped a scheduled trip to Moscow, diverting his plane for a surprise visit to Brussels to presumably crash an EU meeting exploring ways of salvaging the Iran nuclear deal. It appears the "maximum pressure" campaign involves America's top diplomat throwing his weight around in person anywhere around the globe there might be dissent among US allies.Key European signatories of the 2015 landmark deal — the British, French and German governments — are seeking European coordinated efforts to prevent the JCPOA from collapsing. Pompeo scrapped plans for a brief trip to Moscow and will land in the Belgian capital as his 28 EU counterparts gather. President Donald Trump’s top envoy plans to meet with key European allies, though the details are not yet known. — BloombergIran's leaders last week threatened to pull out of key terms of the deal, asserting Europe has done little toward sanctions relief, and issued a 60-day ultimatum for Europe to honor its obligations. The EU responded that would reject any ultimatums. According to Bloomberg, Pompeo will still travel to Russia on Tuesday where he plans to meeting with Foreign Minister Sergei Lavrov in the Black Sea resort city of Sochi. German Foreign Minister Heiko Maas told reporters just ahead of the EU meeting in Brussels: “This agreement is necessary for our security; nobody wants Iran to possess an atomic bomb,” while EU foreign-policy chief Federica Mogherini described plans for Pompeo's visit and meetings “still up in the air”.
What Putin and Pompeo did not talk about - Even veiled by thick layers of diplomatic fog, the overlapping meetings in Sochi between US Secretary of State Mike Pompeo and President Putin and Foreign Minister Sergey Lavrov still offer tantalizing geopolitical nuggets. Russian presidential aide Yury Ushakov did his best to smooth the utterly intractable, admitting there was “no breakthrough yet” during the talks but at least the US “demonstrated a constructive approach.”Putin told Pompeo that after his 90-minute phone call with Trump, initiated by the White House, and described by Ushakov as “very good,” the Russian president “got the impression that the [US] president was inclined to re-establish Russian-American relations and contacts to resolve together the issues that are of mutual interest to us.”That would imply a Russiagate closure. Putin told Pompeo, in no uncertain terms, that Moscow never interfered in the US elections, and that the Mueller report proved that there was no connection between the Kremlin and the Trump campaign.This adds to the fact Russiagate has been consistently debunked by the best independent American investigators such as the VIPS group. Let’s briefly review what became public of the discussions on multiple (hot and cold) conflict fronts – Venezuela, North Korea, Afghanistan, Iran.
US State Department orders non-emergency employees to leave Iraq - The State Department ordered Wednesday the departure of non-emergency US government employees from Iraq amid increasing tensions with Iran and warned US citizens not to travel to the country, citing a "high risk for violence and kidnapping."The announcement comes on the heels of an unannounced trip to Iraq by Secretary of State Mike Pompeo where he said he spoke to officials about he country's ability to protect Americans. The action also represents the latest maneuvering by the Trump administration in the Middle East, where the Pentagon has recently positioned a carrier strike group and a bomber task force.The department said in a statement that employees working in the US embassy in Baghdad and the US consulate in Erbil were instructed to leave Iraq, and that "normal visa services will be temporarily suspended at both posts."It added that American Citizens Services employees who were working in the embassy in Baghdad "will continue to provide consular services to U.S. citizens in Basrah." The department said the sudden changes were because the US government's "ability to provide routine and emergency services to US citizens in Iraq is extremely limited" and that as a result, the threat of "terrorism, kidnapping, and armed conflict" aimed at Americans in the country was too great a risk. Pompeo made an unannounced visit to Iraq last week amid escalating tensions with Iran. While there, Pompeo said he spoke to Iraqi officials "about the importance of Iraq ensuring that it's able to adequately protect Americans in their country." US officials have told CNN the US had "specific and credible" intelligence that suggested Iranian forces and proxies were planning to target US forces in locations including Iraq. That intelligence led the Pentagon to recommend a carrier strike group be moved to the region.
Washington orders US personnel out of Iraq amid war buildup against Iran - Washington has ratcheted up war tensions in the Persian Gulf with an order to evacuate all non-essential US personnel from its embassy in Baghdad and its consulate in Erbil, the de facto capital of the Iraqi Kurdish region.A State Department spokesman said the drastic action had been taken in response to “the increased threat stream we are seeing in Iraq,” but refused to provide any details on the supposed danger.The US has carried out a massive military buildup in the region on the pretext of a supposed threat from Iran or so-called Iranian “proxies” among various Shia militia, from those organized in the Popular Mobilization Units (PMU) formed to fight ISIS in Iraq and now integrated into the Iraqi security forces, to those fighting ISIS in Syria, the Hezbollah movement in Lebanon and the Houthi rebels in Yemen. A State Department spokesman told CNN Wednesday that “any attacks by the Iranian regime or its proxies against US interests or citizens will be answered with a swift and decisive US response.” Sources in Baghdad reported that all day Wednesday helicopters were ferrying US personnel from the embassy on the Tigris River—the largest such US facility in the world—to a US military base at the Baghdad airport. In the midst of this dramatic US action, the top British general deployed as part of “Operation Inherent Resolve” (OIR), the US-dominated intervention in Iraq and Syria, told Pentagon reporters that there was no increased threat to Western forces from Iranian-backed militias. “There’s been no increased threat from Iranian-backed forces in Iraq and Syria,” said Maj. Gen. Christopher Ghika, the deputy commander of OIR in charge of intelligence and operations. “There are a substantial number of militia groups in Iraq and Syria, and we don’t see any increased threat from many of them at this stage.” Officially, these militias are on the same side as the US and NATO forces in fighting to defeat ISIS. In reality, the US is keeping 5,000 troops in Iraq and roughly 2,000 in Syria for the purpose of countering Iranian influence in the region. Ghika’s statement undercut the justification being given for the US war buildup, which has seen the deployment off the Iranian coast of a battleship-carrier strike group, led by the USS Abraham Lincoln, and a bomber task force, including nuclear-capable B-52s. This has been followed by the dispatch to the region of the amphibious assault warship USS Arlington carrying US Marines, warplanes and landing craft, as well a Patriot missile battery.
Why a War With Iran is Not in Donald Trump’s Interests — Sometimes you have to listen hard to Donald Trump to find out what he really wants to say. Last week, the US president buried an invitation to Iran to come and talk to him under piles of bile about John Kerry, the former secretary of state, and his contacts with Tehran. But what Trump was really saying had nothing to do with the Democrat who negotiated the now-moribund Iran nuclear deal.Confirmation of this came from a senior Iraqi source in Baghdad with knowledge of the meeting that took place between US Secretary of State Mike Pompeo and Iraqi Prime Minister Adel Abdul Mahdi last week. Pompeo’s visit was not announced before it happened. Abdul Mahdi was expecting the US secretary of state to breathe fire over Iran, after the news that Washington had sent an aircraft carrier and B-52 bombers to the Gulf in a show of force. Pompeo was expected to demand the withdrawal of pro-Iranian militias who could attack US troops stationed in Iraq in a time of war.Not of a bit of it. What Pompeo actually told Abdul Mahdi, according to the source with knowledge of the meeting, was quite different, and Pompeo’s tone surprised the Iraqi prime minister.Pompeo asked Abdul Mahdi to pass the message to Tehran that the US was not keen on a war and that all Trump wanted was a new nuclear agreement – one that he could call his own.“Pompeo said the US is keen on a new agreement. Abdul Mahdi replied that the Iranians are a proud people and they will not reopen the nuclear deal. But he suggested that Iran could be open to an added protocol,” the source told MEE, noting Pompeo replied that an added protocol could be “a good idea”.“Pompeo’s tone was positive. He did not threaten Iran. The next day, Abdul Mahdi sent an envoy to Iran to inform them of the offer,” the source said.At around the same time, Trump said something similar in his public diatribe against Kerry.“What they should be doing is calling me up, sitting down and we can make a deal, a fair deal,” he said. “We just don’t want them to have nuclear weapons, it’s not too much to ask. And we would help put them back into great shape. They are in bad shape right now. I look forward to the day when we can actually help Iran. We are not looking to hurt Iran.”
The Mysterious “Sabotage” of Saudi Oil Tankers: a Dangerous Moment in Trump’s Escalating Conflict With Iran - Saudi Arabia’s claim that two of its oil tankers have been sabotaged off the coast of the UAE is vague in detail – but could create a crisis that spins out of control and into military action. Any attack on shipping in or close to the Strait of Hormuz, the 30-mile wide channel at the entrance to the Gulf, is always serious because it is the most important choke point for the international oil trade. A significant armed action by the US or its allies against Iran would likely provoke Iranian retaliation in the Gulf and elsewhere in the region. Although the US is militarily superior to Iran by a wide margin, the Iranians as a last resort could fire rockets or otherwise attack Saudi and UAE oil facilities. Such apocalyptic events are unlikely – but powerful figures in Washington, such as the national security adviser John Bolton and secretary of state Mike Pompeo, appear prepared to take the risk of a war breaking out. Bolton has long publicly demanded the overthrow of the Iranian government. “The declared policy of the United States should be the overthrow of the mullahs’ regime in Tehran,” he said last year before taking office. “The behaviour and the objectives of the regime are not going to change and, therefore, the only solution is to change the regime itself.” Bolton and Pompeo are reported to have used some mortar rounds landing near the US embassy in Baghdad in February as an excuse to get a reluctant Pentagon to prepare a list of military options against Iran. These would include missile and airstrikes, but it is unclear what these would achieve from the US point of view.
Iran Squeezed Between Imperial Psychos and European Cowards -- The Trump administration unilaterally cheated on the 2015 multinational, UN-endorsed JCPOA, or Iran nuclear deal. It has imposed an illegal, worldwide financial and energy blockade on all forms of trade with Iran — from oil and gas to exports of iron, steel, aluminum and copper. For all practical purposes, and in any geopolitical scenario, this is a declaration of war. Successive U.S. governments have ripped international law to shreds; ditching the Joint Comprehensive Plan of Action is only the latest instance. It doesn’t matter that Tehran has fulfilled all its commitments to the deal — according to UN inspectors. Once the leadership in Tehran concluded that the U.S. sanctions tsunami is fiercer than ever, it decided to begin partially withdrawing from the deal. President Hassan Rouhani was adamant: Iran has not left the JCPOA — yet. Tehran’s measures are legal under the framework of articles 26 and 36 of the JCPOA — and European officials were informed in advance. But it’s clear the EU3 (Germany, France, Britain), who have always insisted on their vocal support for the JCPOA, must work seriously to alleviate the U.S.-provoked economic disaster to Iran if Tehran has any incentive to continue to abide by the agreement. Russia and China — the pillars of Eurasia integration, to which Iran adheres — support Tehran’s position. This was discussed extensively in Moscow by Sergey Lavrov and Iran’s Javad Zarif, perhaps the world’s top two foreign ministers. At the same time, it’s politically naïve to believe the Europeans will suddenly grow a backbone. The comfortable assumption in Berlin, Paris and London was that Tehran could not afford to leave the JCPOA even if it was not receiving any of the economic rewards promised in 2015. Yet now the EU3 are facing the hour of truth. As it stands, the EU3 are not buying Iranian oil. They are meekly abiding by the U.S. banking and oil/gas sanctions — which are now extended to manufacturing sectors — and doing nothing to protect Iran from its nasty effects. The implementation of INSTEX, the SWIFT alternative for trade with Iran, is languishing. Besides expressing lame “regrets” about the U.S. sanctions, the EU3 are de facto playing the game on the side of U.S., Israel, Saudi Arabia and the Emirates; and by extension against Russia, China and Iran.
Frustrated GOP senators want answers from Trump on Iran - Frustrated Senate Republicans say the Trump administration has largely kept them in the dark about a possible military confrontation with Iran.What GOP lawmakers already know, however, has them on edge. Trump has deployed an aircraft carrier strike group, a Patriot missile defense battery and an Air Force bomber task force to the Middle East, while the State Department has ordered a partial evacuation of the U.S. Embassy in Baghdad.A few legislators have received briefings, but many can only guess at the extent of the threat and where a ramp up in combat forces may lead.“I don’t think it’s fair for us to walk around wondering,” said Sen. Lindsey Graham (R-S.C.), one of the Senate’s leading voices on global security issues.Graham, the chairman of the State and Foreign Operations Appropriations Subcommittee, said he’s concerned about the evacuation of personnel from the Baghdad embassy given the regular attacks that facility endured during the height of the Iraq War.“We’re clearly moving people,” he said. “This is a big deal.”“We had people there during the height of the war,” he added of his experience at the Baghdad embassy. “I was there a bunch of time getting rocketed. If we could stay in operation then, it must be some kind of real threat.” Republican senators say they don’t know whether Trump is really contemplating the deployment of 120,000 troops to the Middle East to deter attacks by Iranian-backed militants, which The New York Times first reported on Tuesday.
Full Senate briefing on Iran scheduled for Tuesday - The full Senate is scheduled to be briefed Tuesday on the Trump administration's plans in Iran, the chairman of the Senate Foreign Relations Committee said Thursday. Chairman Jim Risch (R-Idaho), who helped organize the briefing, would not confirm whether Secretary of State Mike Pompeo and acting Defense Secretary Patrick Shanahan will be the administration officials briefing the lawmakers. Senators have been demanding a briefing on the intelligence behind moves such as the ordered departure of nonemergency staff at U.S. diplomatic missions in Iraq and the deployment of additional military assets to the Middle East, and the Trump administration’s further plans for Iran. The so-called Gang of Eight — congressional leadership and leaders of the Intelligence committees — are scheduled to be briefed Thursday afternoon, and some individual lawmakers have also been briefed. But lawmakers have said the situation is serious enough to demand all of Congress receives a briefing. The deployments and embassy evacuation have raised concerns that the risk of war with Iran is escalating. President Trump on Thursday said he hopes there is not war with Iran. The Trump administration has said there have been increased threats from Iran to U.S. personnel but has not specified the nature of the threats. Risch, who himself has been briefed, said Thursday that public reporting on Iran moving missiles by boat does not show the whole picture, but he did not elaborate on other threats. “I would strongly caution everyone not to grab onto that and say, ‘Ah-ha, this is it,’ ” Risch said. “That is the tip of the iceberg. When these situations are assessed, it is not a single item that moves the needle. It is a conglomerate of things and a wide spectrum of reporting, information and methods.”
Trump Admin Moves Fueled Iran’s Aggression, U.S. Intel Says - Trump administration hawks have spent the last two weeks decrying an increased threat from Iran. But U.S. intelligence officials assess that Iran’s aggressive moves came in response to the administration’s own actions. Three U.S. government officials familiar with the situation told The Daily Beast that officials in multiple U.S. intelligence agencies have assessed that Iran’s new, threatening activity–which the administration points to in justifying its military presence in the Persian Gulf–is in response to the administration’s aggressive steps over the last two months. The National Security Council, the CIA, and the Office of the Director of National Intelligence did not provide comment for this story. In addition, multiple lawmakers on Capitol Hill familiar with American intelligence about Iran told The Daily Beast that Tehran’s aggressive moves—reportedly planning attacks on U.S. diplomatic facilities in Iraq and loading missiles on fishing boats in the Gulf—appear to be in response to Washington’s moves to press the Islamic Republic and its leadership. The Trump administration’s decisions to tighten oil sanctions and to designate the Islamic Revolutionary Guard Corps (IRGC) as a terrorist group were particularly provocative, lawmakers said. “Clearly the Iranians are not happy with the maximum pressure campaign that the U.S. is imposing on them, including the designation of the IRGC as a terrorist organization,” said Texas Republican Sen. John Cornyn. “And so I think they’re lashing out, and some of the threats are very concerning.” Cornyn also said that if the U.S. had held back, the new Iranian threat may not have materialized when and how it did. “As long as they’re having their way, maybe not, as long as that works for them,” he said. “But clearly, things are not working for them the way they had hoped.” National Security Adviser John Bolton has previously said the administration’s aggressive efforts aim to squeeze Iran “until its leaders decide to change their destructive behavior, respect the rights of the Iranian people, and return to the negotiating table.” But the policy doesn’t appear to have put leaders there in a mood to make concessions. In fact, as The Wall Street Journal first reported, Iran’s posture toward American interests became more hostile in direct response to the administration’s moves, according to the assessment of multiple U.S. intelligence officials.
Beijing Backs Iran, Firmly Opposes Unilateral US Sanctions -In the latest sign of Beijing's frustration with the US, the Chinese leadership have reiterated their opposition to American sanctions against Iran. After a meeting with Iranian Foreign Minister Javad Zarif, Chinese Foregin Minister Wang Yi reiterated Beijing's 'firm opposition' to unilateral US sanctions against Iran. With the US moving more firepower into the Persian Gulf, an attempt to send Tehran an unmistakable message, Zarif asked Beijing to try and save the 2015 nuclear deal, WSJ reports. Zarif's meeting with his Chinese counterpart is the first step on a tour of Asia, as Iran canvasses its key economic partners now that US sanctions have been reimposed. Mr. Zarif’s visit to China, where he will meet his Chinese counterpart, is part of a longer trip that includes other key economic partners Russia, Japan and India. It comes amid growing tensions between Washington and Tehran, which spiked over the past week when the U.S., citing unspecified intelligence, deployed an aircraft carrier, a bomber task force and other personnel to the Middle East. The Iranian embassy in China said on Twitter that Mr. Zarif had "arrived in Beijing to maintain consultations between all-weather friends in the wake of new efforts to manufacture unnecessary tensions." China’s Foreign Ministry confirmed Mr. Zarif’s visit but declined to release further information. The Iranian situation is difficult for Beijing, said Yin Gang, a Middle East politics expert with the government-backed Chinese Academy of Social Sciences. He said the conflict isn’t simply between the U.S. and Iran but between Arab states and Iran. China, Mr. Yin said, "wants a balanced diplomacy in the Middle East, and hopes to make friends and do business with everyone."
A vast disinformation network of copycat fake news sites with names like 'Bloomberq' and 'The Indepnedent' has been pinned on Iran -- Researchers say they have uncovered a vast fake news network impersonating genuine news organizations and using fake social media profiles to spread disinformation. The Canadian Citizen Lab research group, which is part of the University of Toronto, in a report published Tuesday claimed that Iran is behind the program, which it dubbed Endless Mayfly. The researchers say it "spreads falsehoods and amplifies narratives critical of Saudi Arabia, the United States, and Israel." In a statement to the Associated Press, Iran denied being behind the network. The authors published "divisive content" on copycat news websites, often with names that imitated legitimate news websites, such as "Bloomberq," or the "The Indepnedent," the researchers said. The technique is known as "typosquatting," in which a website impersonating another is created under a slight variant of its name. The trolls created 72 lookalike domains, and 153 fake news articles, with one fake article designed to look like a Bloomberg report suggesting that the CIA would award Saudi Arabia's crown prince with a "medal of honor." Citizen Lab said that a the people behind the posts also made fake social media profiles to spread the posts, some of which went as far as sending messages to journalists and activists whom they hoped would repost the material, lending it legitimacy. Fake articles contained made-up quotations from a US senator alleging Saudi complicity in terrorism. Articles also claimed that Saudi Arabia was funding Trump's wall on the US-Mexican border and tried to stir tension among Arab Gulf states.
Time to Pull US Nuclear Weapons Out of Turkey - Storing nuclear weapons close to trouble is a bad idea, and giving Ankara a shared finger on the nuclear trigger is rapidly losing its charm. Amid the recent self-congratulatory celebrations of the North Atlantic Treaty Organization’s 70th anniversary, there was no mention one of its strangest policies: the nuclear sharing program that keeps American nuclear bombs in five NATO countries (Belgium, the Netherlands, Germany, Italy and Turkey) and trains host air forces to use them. Thus at Incirlik Air Base in Turkey, about 100 miles from the Syrian border, the United States stores some 20 to 80 B61 nuclear weapons for delivery by Turkish or American aircraft. There is not much comfort in knowing that these weapons are under direct American control in heavily guarded bunkers and are designed to be unusable without the proper codes. It is time to bring them home. American-Turkish relations are not good and are likely to turn worse. Kurds populate parts of Turkey’s border with Syria and Iraq and have been our close ally in the struggle with the Islamic State, but are regarded by the Turks as secessionists and terrorists. The United States has promised not to abandon the Kurds as it has in the past, but that promise puts the United States’ hopes to stabilize the region on a collision path with Turkey. Complicating the relations are Turkey’s attempts to acquire Russian military technology, most notably the S-400 air defense system, while remaining part of United States’ F-35 stealth fighter program. Turkey is an industrial partner in the F-35 program and is scheduled to purchase 100 of the aircraft. The first of Turkey’s F-35s are ready for delivery. But Turkey is also scheduled to receive soon the first components of the Russian S-400 system it has purchased, which American military officials have said is incompatible with Turkish possession of the F-35; The fear is that details of the fighter’s stealth features and performance will be revealed to the Russians who will help maintain the S-400.
Why Everyone in the U.S. Who Counts Wants Julian Assange Dead - Below is a full video version of Collateral Murder, the 2007 war footage that was leaked in 2010 to Wikileaks by Chelsea (then Bradley) Manning. This version was posted to the Wikileaks YouTube channel with subtitles. It will only take about 15 minutes of your life to view it. It’s brutal to watch, but I challenge you to do it anyway. It shows not just murder, but a special kind of murder — murder from the safety of the air, murder by men with heavy machine guns slowly circling their targets in helicopters like hunters with shotguns who walk the edges of a trout pond, shooting at will, waiting, walking, then shooting again, till all the fish are dead. The film also shows war crimes that implicate the entire structure of the U.S. military, as everyone involved was acting under orders, seeking permission to fire, waiting, then getting it before once more blasting away. The publication of this video, plus all the Wikileaks publications that followed, comprise the whole reason everyone in the U.S. who matters, everyone with power, wants Julian Assange dead.They also want him hated. Generating that hate is the process we’re watching today. “Everyone” in this case includes every major newspaper that published and received awards for publishing Wikileaks material; all major U.S. televised media outlets; and all “respectable” U.S. politicians — including, of course, Hillary Clinton, who was rumored (though unverifiably) to have said, “Can’t we just drone this guy?” Please watch it. The footage shows not only murder, but bloodlust and conscienceless brutality, so much of it in fact that this became one of the main reasons Chelsea Manning leaked it in the first place. As she said at her court-martial: “The most alarming aspect of the video for me, was the seemingly delight of bloodlust they [the pilots] appeared to have. They dehumanized the individuals they were engaging with, and seemed to not value human life in referring to them as ‘dead bastards,’ and congratulating each other on the ability to kill in large numbers.”
Gabbard Says She'd Drop All Charges Against Assange And Snowden -In the midst of an interesting and wide-ranging discussion on the Joe Rogan Experience, Democratic congresswoman and presidential candidate Tulsi Gabbard said that if elected president she would drop all charges against NSA whistleblower Edward Snowden and WikiLeaks founder Julian Assange.“What would you do about Julian Assange? What would you do about Edward Snowden?” Rogan asked in the latter part of the episode. “As far as dropping the charges?” Gabbard asked. “If you’re president of the world right now, what do you do?” “Yeah, dropping the charges,” Gabbard replied. Rogan noted that Sweden’s preliminary investigation of rape allegations has just been re-opened, saying the US government can’t stop that, and Gabbard said as president she’d drop the US charges leveled against Assange by the Trump administration.“Yeah,” Gabbard said when asked to clarify if she was also saying that she’d give Edward Snowden a presidential pardon, adding,“And I think we’ve got to address why he did things the way that he did them. And you hear the same thing from Chelsea Manning, how there is not an actual channel for whistleblowers like them to bring forward information that exposes egregious abuses of our constitutional rights and liberties. Period. There was not a channel for that to happen in a real way, and that’s why they ended up taking the path that they did, and suffering the consequences.”This came at the end of a lengthy discussion about WikiLeaks and the dangerous legal precedent that the Trump administration is setting for press freedoms by prosecuting Assange, as well as the revelations about NSA surveillance and what can be done to roll back those unchecked surveillance powers.
Juan Guaido Would “Probably Accept” a US Offer to Invade Venezuela— After last week’s US-backed coup failed to install Juan Guaido in power in Venezuela, Guaido remains keen to be supported by the US, and told Italian newspaper La Stampa that he would “probably accept” a US offer to invade.Though the Trump Administration has constantly threatened to invade Venezuela in recent months, it appears they have yet to explicitly make an offer to Guaido to do so. Clearly the US would want to use such an acceptance as cover for a unilateral invasion.Yet the Trump Administration has so long taken the liberty of speaking for Guaido in the international community, it probably feels his imprimatur is less about what Guaido says, and more about what the administration can claim he’d want. The US has hoped that threatening the existing Venezuelan government and the international community would eventually see the regime change happen. As that continues to fail to work, however, hawks in the administration have been pushing for a direct US military involvement.
The Latest: Guaidó asks for relations with US military = Venezuelan opposition leader Juan Guaidó says he’s instructed his political envoy in Washington to immediately open relations with the U.S. military. Guaidó said Saturday that he’s asked his ambassador Carlos Vecchio to open “direct communications” toward possible coordination. U.S.-backed Guaidó is leading a campaign to oust President Nicolás Maduro. In recent days Venezuelan security forces arrested National Assembly Vice President Edgar Zambrano, the body’s No. 2 leader. Other lawmakers also scrambled for refuge in foreign embassies amid renewed fears of a crackdown following an unsuccessful military rebellion. Guaidó says he’s keeping “all options on the table” to remove Maduro, repeating language used by U.S. President Donald Trump and his chief advisers. Earlier this week, U.S. Navy Adm. Craig Faller said he would meet with Guaidó when invited to discuss the future role of Venezuela’s armed forces.
Venezuela’s Guaido Wants Direct Line to Pentagon for “Coordination” of US Military Action - — Venezuelan opposition leader Juan Guaido confirmed this weekend that his diplomats are seeking to open a direct line of communication with the US military, and would use them for “coordination” of possible military action to impose regime change. Guaido said having direct lines of communication between him and the Pentagon would put more pressure on President Maduro to resign. Admiral Craif Faller, the head of South Command, says he “looks forward” to supporting the members of Venezuela’s military “who make the right decision,” which is to say backing the US-supported takeover by Guaido. While Guaido continues to hold regular opposition rallies demanding he be made president, the crowds at those rallies are getting smaller since the recent failed coup. With Guaido seemingly losing momentum, the Trump Administration may ultimately feel they need to get more directly involved in invading Venezuela and ensuring his rule. President Maduro maintains control of the vast majority of Venezuela’s military, despite US hopes of a mass rebellion behind Guaido. Maduro has dismissed Guaido as a US puppet, and accuses the US plotting to exploit Venezuela’s oil wealth.
US Press Reaches All-Time Low on Venezuela Coverage - As famed Latin American author Eduardo Galeano once wrote, “every time the US ‘saves’ a country, it converts it into either an insane asylum or a cemetery.” Of course, as we look over the wreckage left by the US in countries such as Iraq, Afghanistan, Libya, Somalia, Syria, El Salvador, Guatemala and Honduras, we see that this statement is demonstrably true. And yet, now that the US is poised for another intervention, this time in Venezuela, the press is right there again to cheer it along. Analyzing 76 total press articles of the “elite” press from January 15 to April 15, 2019, Fairness & Accuracy In Reporting (FAIR) could find not one voice that opposed Trump’s regime plans in Venezuela. Meanwhile, 54 percent openly supported these plans. Of course, this should not be all too surprising given the press’s usual complicity in past US war efforts — e.g., by pushing such war lies as the Gulf of Tonkin, the killing of babies in Kuwait, the WMDS of Iraq and the alleged Viagra-fueled rapes in Libya. The current war lies are coming fast and furious from such outlets as CNN which lied about seeing Maduro forces lighting aid containers on fire at the Colombian border (it was in fact opposition forces which did so as the NYT admitted two weeks later), and which claimed that US puppet Juan Guaido actually won the presidential election against Nicolas Maduro when in fact Guaido never even ran for president. What is quite stunning, however, is the total unanimity of the press in uncritically covering and supporting the ongoing coup in Venezuela. This is baffling because the same press outlets which have been rightly critical of Trump for all of his stupidity, lying and meanness, have suddenly found him brilliant, true and benevolent when it comes to Venezuela. This is particularly remarkable given that his partners in this crime are Neo-Con John Bolton; former CIA Director Mike Pompeo who recently joked that the CIA’s true motto is “We lied, We Cheated, We Stole”; and convicted liar Elliott Abrams. As for Abrams, he is infamous for his role in the illegal funding of the Nicaraguan Contras; his covering up of the El Mazote massacre in El Salvador in which around 1000 civilians, mostly women and children, were killed by US-backed forces; and his aiding and abetting the US-backed genocide in Guatemala. And yet, somehow, we are to believe from our “free” press that this band of rogues is going to deliver democracy and human rights to Venezuela. Never mind the fact that Trump himself is President after losing to Hillary Clinton by nearly 3 million votes, and that the US, in the words of former President Jimmy Carter, no longer has a functioning democracy. As for Venezuela, on the other hand, Carter has said that its electoral system is “the best in the world.”
The Liberal Embrace of War - Matt Taibbi -The United States has just suspended flights to Venezuela. Per the New York Times: The United States banned all air transport with Venezuela on Wednesday over security concerns, further isolating the troubled South American nation… A disinterested historian would see this as just the latest volley in a siege tale. America has been trying for ages to topple the regime of President Nicholas Maduro, after trying for years to do the same to his predecessor, Hugo Chavez. The new play in the Trump era involves recognizing Juan Guaidó as president and starving and sanctioning the country. Maduro, encircled, has been resisting. The American commercial news landscape, in schism on domestic issues, is in lockstep here. Every article is seen from one angle: Venezuelans under the heel of a dictator who caused the crisis, with the only hope a “humanitarian” intervention by the United States. There is no other perspective. Media watchdog FAIR just released results of a study of three months of American opinion pieces. Out of 76 editorials in the New York Times, Washington Post, the “big three Sunday morning talk shows” or PBS News Hour, zero came out against the removal of Maduro. They wrote:“Corporate news coverage of Venezuela can only be described as a full-scale marketing campaign for regime change.” Allowable opinion on Venezuela ranges from support for military invasion to the extreme pacifist end of the spectrum, as expressed in a February op-ed by Dr. Francisco Rodriguez and Jeffrey Sachs called “An Urgent Call for Compromise in Venezuela”: “We strongly urge… a peaceful and negotiated transition of power rather than a winner-take-all game of chicken…” So we should either remove Maduro by force, or he should leave peaceably, via negotiation. These are the options. The real lesson in Vietnam should have been that people would pay any price to overthrow a hated occupying force. American think-tankers and analysts however somehow became convinced (and amazingly still are) that the problem was Walter Cronkite and the networks giving up on the war effort. In the next big war, there would be no gruesome pictures of soldiers dying, no photos of coffins coming home, no pictures of civilian massacres (enforced more easily with new embedding rules), and no Cronkite-ian defeatism.
Activists at Venezuela Embassy served with eviction notice (AP) — Authorities served an eviction notice Monday to activists who have stayed for more than a month inside the Venezuelan Embassy in Washington and asked them to leave immediately. The activists have been inside the embassy because they consider Nicolas Maduro the legitimate president of Venezuela. The U.S. and 50 other countries say Maduro’s reelection was fraudulent and have recognized opposition leader Juan Guaidó as Venezuela’s interim president. Gustavo Tarre, Venezuela’s representative to the Organization of American States, told The Associated Press that after the eviction notice was served, three activists left the building. Four remained, Tarre said. Brian Becker, national director of the Answer Coalition, which supports the activists, said those still inside the building will not leave voluntarily. He said police cut the chains that were locking the front gate and handed the order to activists who came to the ground level to meet them. Rafael Alfonso, director of operations for the embassy, said it appeared unlikely that the remaining activists would be removed from the embassy Monday night and that the situation would be revisited sometime on Tuesday. Alfonso said once the building had been cleared of activists, he would assess any damage on behalf of the embassy.
U.S. federal agents arrest protesters occupying Venezuelan Embassy (Reuters) - U.S. law enforcement officers raided the Venezuelan Embassy on Thursday to oust a small group protesting U.S. policy toward the oil-rich country, paving the way for the diplomatic compound to be handed to the U.S. envoy of opposition leader Juan Guaido. Since mid-April, members of three activist groups have been occupying the embassy, a red brick building in the upscale Georgetown neighborhood of Washington, where they say they are “invited guests” of the Venezuelan government. The activists oppose U.S. intervention in Venezuela to oust President Nicolas Maduro in favor of Guaido, self-proclaimed interim president of the OPEC-member nation. “I am here standing before you announcing that we have recovered this building thanks to the Venezuelan diaspora,” Carlos Vecchio, Guaido’s representative in Washington, told a group of supporters outside the building late on Thursday. Vecchio also thanked President Donald Trump’s administration. The building was undergoing safety checks and would be open for business soon, he said. Authorities arrested the last four protesters on Thursday after utilities for the building were cut off and they ignored an eviction order, the groups say. A spokesman for Pepco, Washington’s energy utility, said the company does not discuss service to individual properties.
Venezuela Denounces US Seizure of Embassy as Violation of Vienna Convention - — Venezuelan Deputy Foreign Minister Carlos Ron on Thursday urged the Trump administration not to hand over the country’s embassy in Washington, D.C. to leaders of an attempted coup after U.S. law enforcement forcibly removed peace activists who have lived there for since last month as guests of President Nicolás Maduro’s government.“We denounce these arrests, as the people inside were there with our permission, and we consider it a violation of the Vienna Conventions,” Ron said in statement. Four members of the Embassy Protection Collective were arrested Thursday—David Paul of CodePink, Margaret Flowers and Kevin Zeese of Popular Resistance, and Adrienne Pine, a professor who wrote an op-ed for Common Dreams about why she participated in the effort to protect the embassy.
US Special Forces Command Issues New Guide For Overthrowing Foreign Governments - No kidding - this is not our headline, but Newsweek's: "US Special Forces School Publishes New Guide For Overthrowing Foreign Governments" - and as far as we can tell they are the only major mainstream outlet to have picked up on the fact that the US military is now essentially openly bragging on past and future capabilities to foster covert regime change operations. The 250-page study entitled “Support to Resistance: Strategic Purpose and Effectiveness” was put out by the Joint Special Operations University under US Special Operations Command, which is the Army's official unified command center which overseas all joint covert and clandestine missions out of MacDill AFB, Florida. "This work will serve as a benchmark reference on resistance movements for the benefit of the special operations community and its civilian leadership," the report introduces. The study examines 47 instances of US special forces trying to intervene in various countries from 1941-2003, thus special attention is given to the Cold War, but it doesn't include coups which lacked "legitimate resistance movements" — such as the case of 'Operation AJAX' in 1953 which overthrew Iran's democratically elected Prime Minister Mohammad Mosaddegh.Though infamous disasters such the abortive CIA-backed Bay of Pigs invasion of Cuba are highlighted, the US military report (perhaps predictably) finds that among those nearly fifty covert interventions surveyed, most interventions were "successful". "One thing common to all 47 cases reviewed in this study is the fact that the targeted state was ruled either by an unfriendly occupying force or by a repressive authoritarian regime," the author, Army Special Forces veteran Will Irwin wrote. The study focuses on historical regime change operations but in parts hints at the future, saying, "Russia and China have boldly demonstrated expansionist tendencies."
China’s Vice-Premier Liu He says ‘small setbacks’ will not derail trade war talks - The latest trade war talks between China and the United States in Washington may have ended without a deal on Friday, but Beijing’s top negotiator said the negotiations had not broken down. Speaking to selected Chinese media in the US capital before heading home, Vice-Premier Liu He described the meetings as “candid and constructive” and said the two sides agreed to meet again in Beijing to continue their discussions. “The negotiations have not broken down,” he says in a video clip published on Xinhua’s website. “Quite the opposite. I think they are normal. Small setbacks are inevitable in bilateral negotiations. Looking ahead, we are cautiously optimistic about the future.” For the first time, Liu also outlined the differences between the two sides. In unusually frank and timely comments, he said that while Beijing and Washington still had problems to resolve, he dismissed allegations that China had reneged on earlier promises and commitments. In a transcript of the press interview published on the website of Phoenix Television, a Hong Kong-based broadcaster, Liu said there were several issues on which the two sides still disagreed. “China believes tariffs are the starting point of the bilateral trade disputes,” Liu said. “If a deal is to be reached, the tariffs should all be eliminated. This is the first point.” The second regarded China’s promise to buy more goods from the US, he said. While an initial deal was reached when Chinese President Xi Jinping and US President Donald Trump met in Argentina in December, the two sides now held different views on what had actually been agreed, Liu said.
Chinese vice premier urges China-U.S. cooperation, vows no compromise on major principles - (Xinhua) -- Chinese Vice Premier Liu He said Friday that cooperation is the only right choice for China and the United States, but China will not compromise on major issues of principle.China-U.S. relations are of great importance, Liu said in a group interview with Chinese media after the conclusion of the 11th round of high-level economic and trade consultations between the world's top two economies, which took place on Thursday and Friday in Washington.Economic and trade relations serve as the ballast and propeller of the overall China-U.S. relationship, and matter not only to bilateral ties, but also to world peace and prosperity, added Liu, also a member of the Political Bureau of the Communist Party of China (CPC) Central Committee.Cooperation is the only right choice for the two sides, but it has to be based on principles, said the vice premier, who heads the Chinese side of the China-U.S. comprehensive economic dialogue.China, he stressed, will never make concessions on major issues of principle. China strongly opposes U.S. tariff hikes, which are harmful not only to China and the United States, but to the world at large, and China will have to take necessary countermeasures, he added. Stressing that any agreement must be equal and mutually beneficial, Liu said that the two sides have reached important consensus on many aspects, but there remain three core concerns of China that must be addressed. The first is to remove all the additional tariffs, he said, adding that the levy of those tariffs is the starting point of the ongoing bilateral trade dispute, and must be totally revoked if the two sides were to reach a deal. The second is that the amount of purchases should be realistic, he said, adding that the two sides reached consensus on the volume in Argentina, and should not change it randomly. The third is to improve the balance of the wording of the text, he said, adding that every country has its dignity, the text must be balanced, and more discussions are needed on some critical issues.
Donald Trump warns China to reach a trade deal now, or face a ‘far worse’ one if I get re-elected - US President Donald Trump has accused China of playing for time in trade talks and warned he will offer a “far worse” deal if he wins next year’s presidential election. Trump was speaking after a lacklustre round of talks in Washington following his decision to escalate the trade war by raising tariffs on Chinese goods. “I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election,” Trump tweeted on Saturday, adding that China hoped to “get lucky” with a win from a Democratic in the 2020 presidential election. “Would be wise for [China] to act now, but love collecting BIG TARIFFS,” he said. On Friday the US raised tariffs on US$200 billion of Chinese goods from 10 per cent to 25 per cent. When he announced plans for the tariff hike last Monday, Trump complained that trade talks had moved too slowly, and said China had been trying to renegotiate previously agreed positions.
Kudlow Undercuts Trump, Admits American Consumers Are Paying For China Tariffs -- National Economic Council Director Larry Kudlow admitted on Sunday that American importers and consumers would have to pay the tariffs on Chinese imports, completely contradicting President Trump's claims that China pays the duties. On Fox News Sunday, two days after the US-China trade deal fell apart, anchor and political commentator Chris Wallace pressed Kudlow: "It's not China that pays the tariffs, it's the American importers, the American companies that pay what, is in fact, a tax increase." "Fair enough," Kudlow responded. "In fact, both sides will pay. Both sides will pay in these things." Kudlow added, however, it isn't China paying the tariffs, but suggests China's GDP will suffer "with respect to a diminishing export market." "This is a risk we should and can take without damaging our economy in any appreciable way," Kudlow said. After much theatrics and 11th-hour negotiation, the US doubled tariffs to 25% on $200 billion in imports from China just after midnight on Friday. Then in an unexpected Friday evening development (after market hours of course) - President Trump began the process of raising tariffs on all remaining imports from China, valued at approximately $300 billion."Talks with China continue in a very congenial manner - there is absolutely no need to rush - as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products," Trump tweeted Friday morning. "These massive payments go directly to the Treasury of the US."And Saturday, Trump hinted that the US was "collecting" tariffs from China."Would be wise for them to act now, but love collecting BIG TARIFFS!" Trump said in a tweet. Trump must be confused about who pays custom duties (or maybe he can't break the news to the deadbeat consumer ahead of an election year), as the US imposes increased tariff rates on Chinese goods. The tax is levied at the time of import and is paid by the American importer of record, and then passed onto consumers.
Trump doubles down on China tariffs, saying there is 'no reason' for US consumers to pay them - President Trump on Monday argued in a series of tweets that China will bear the brunt of the new tariffs his administration is imposing on the country, a day after one of his top economic advisers said both the U.S. and China would be hurt by the economic fight. Trump wrote in the tweets that there was no "reason" for U.S. consumers to pay the tariffs, arguing in part that people in the United States could avoid paying the tariffs by buying products produced in other countries or in the United States. "Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today,” Trump wrote in one of the posts on Twitter. In a second tweet, he said a consumer could "buy the product inside the USA (the best idea)." He said companies would leave China for other countries, such as Vietnam, to avoid the tariffs. Trump’s comments come just a day after his top economic adviser, Larry Kudlow, in an interview on "Fox News Sunday" said both China and U.S. consumers would be hurt by the tariffs. "In fact, both sides will pay in these things, and of course it depends," Kudlow responded after host Chris Wallace pressed him on how importers of Chinese products hit by tariffs will pay those tariffs. Most economists agree that the costs of the tariffs will be paid by U.S. consumers in the form of higher prices on imported products from China. Kudlow did say that China would suffer, too, from the fight, saying they would be hit by gross domestic product losses and a diminishing export market.
Here’s how China may retaliate to Trump’s tariff hike - Beijing has a host of options to retaliate against the latest the hike in U.S. tariffs on Chinese imports, experts said on Monday. The latest round of trade talks between American and Chinese negotiators concluded on Friday without a trade agreement. Those negotiations fell under the shadow of U.S. President Donald Trump’s threat to more than double the tariff rate to 25% on $200 billion of Chinese goods — which he made good on just after midnight ET on Friday. China’s Commerce Ministry said immediately after those new rates came into effect that it would take countermeasures against the American move. It did not announce what its response would entail but said it “deeply regrets” the turn of events. Experts told CNBC that Beijing’s response could end up combining several ways to hurt the U.S. “I expect that China will retaliate and they will do it in as commensurate a way as they can, and that will include not just imports,” said Susan Shirk, former deputy assistant secretary of state during the Clinton administration. “I think our farmers and our farm exports to China will be targeted because that’s what President Trump cares about politically,” She added that she expects added pressure on American firms operating in China, potentially including a slowdown in approvals for banks and checks on imports. “Really anything could be fair game, and I would be extremely surprised if there were no retaliation,” said Shirk, who is now the 21st Century China Center chair at the University of California San Diego School of Global Policy and Strategy. Another option for Beijing’s retaliation could include currency depreciation, analysts said. That is, a drop in value for the yuan would give Chinese exports a trade advantage and potentially offset the impact of U.S. tariffs. “We think the currency is one area in which Beijing has a clear advantage over Washington,”
China Defies Trump With Plans to Raise Tariffs on U.S. Products- China announced plans to raise duties on some American imports starting June 1, defying a call from President Donald Trump to resist escalating a trade war that is sending stocks tumbling and clouding the outlook for the global economy. Less than two hours after Trump tweeted a warning that “China should not retaliate -- will only get worse!” the Ministry of Finance in Beijing announced the measures on its website. The new rate of 25% will apply to 2,493 U.S. products, with other goods subject to duties ranging from 5% to 20%, it said. Higher U.S. tariffs will drive up the Federal Reserve’s preferred measure of underlying inflation, and further escalation could raise consumer prices even more and dent U.S. growth, Goldman Sachs Group Inc. economists said in a research note. China's move to hike tariffs came in response to the U.S.’s decision last week to increase levies on $200 billion in Chinese imports to 25% from 10%. Trump on Monday accused China of backing out of a deal that was taking shape with U.S. officials, saying Beijing reneged on an agreement to enshrine a wide range of reforms in Chinese law. “I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries,” Trump wrote on Twitter. “You had a great deal, almost completed, & you backed out!” Both the U.S. and China had tried to project calm since the latest round of discussions ended on Friday and said that they plan to continue negotiations in the hopes of avoiding a tumble in markets and broader economic damage. But that facade masks fundamental divisions, with U.S. officials increasingly convinced that hardliners in Beijing are winning the internal debate on reforms. Meantime, Chinese state media blamed the U.S. for the impasse and talked up its economic resilience, with the People’s Daily saying in a front-page commentary that the U.S. should take full responsibility for the setbacks because it went back on its word and imposed more levies. The latest breakdown has prompted an escalation in the tariff war between the world’s two largest economies that looks increasingly like the International Monetary Fund's and others’ worst-case scenario for a global economy already forecast to grow this year at its slowest rate since the immediate aftermath of the 2008 financial crisis.
China Announces Tariff Retaliation to Take Effect on June 1 – China announced that it will increase tariffs imposed on about $60 billion of U.S. goods in retaliation for President Donald Trump’s latest escalation of the trade war.The tariffs will take effect on June 1, according to a statement on the Ministry of Finance’s website on Monday. The charges will thereby be raised on most of the goods listed on a previous retaliation list effective last September.The yearlong trade frictions between the world’s two biggest economies worsened last week when the Trump administration announced an extra 25% tariff on thousands of Chinese products worth about $200 billion. The U.S. is set to release a plan to levy a 25% additional tariff on all remaining imports from China later on Monday. China’s retaliatory tariffs will be imposed at the following levels:
- 25% tariffs on 2,493 items from current 10%
- 20% tariffs on 1,078 items from current 10%
- 10% tariffs on 974 items from current 5%
- 5% tariffs to continue on 595 items. Auto parts, which were initially on the list but have been exempted since December, are still excluded
The Ministry also said in another statement that importers and associations can apply for exemptions for goods on the tariff lists. Once approved, the goods will be excluded and won’t be subject to the punitive tariffs for one year. Companies can also get a rebate of already paid tariffs. “China’s tariff move is in response to the U.S. unilateralism and trade protectionism,” the ministry said in a separate statement on Monday. “China hopes that the U.S. will return to the right track of bilateral trade talks, work together with China and meet each other halfway, to reach a win-win and mutually beneficial agreement on the basis of mutual respect."
US Prepares Tariffs On Another $300 Billion Of Imported Chinese Goods The Trump administration is preparing a new list of $300 billion worth of Chinese imports that would be hit with tariffs of up to 25%, after China retaliated Monday in the trade war between the world's two largest economies.The U.S. Trade Representative published a list of Chinese goods that would be hit with new duties, ranging from artists' brushes and paint rollers to clocks and watches. The list also includes a wide range of sporting goods, from baseballs to fishing reels. And it dedicates several pages to agricultural products, from livestock to dairy, plants and vegetables. Staples such as rice and tea are on the list."The proposed product list covers essentially all products not currently covered by action in this investigation," the U.S.T.R. office says. It adds, "The proposed product list excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials, and critical minerals." The U.S. proposal will enter a public comment period and could take effect some time in late June or July.
U.S. Readies New Tariffs as Trump Says He'll Meet China's Xi - The U.S. prepared to hit China with new tariffs even as President Donald Trump said he’ll meet his Chinese counterpart, Xi Jinping, at next month’s G-20 summit, an encounter that could prove pivotal in a deepening clash over trade. The U.S. Trade Representative’s office Monday released a list of about $300 billion worth of Chinese goods including children’s clothing, toys, cell phones and laptops that Trump has threatened to hit with a 25% tariff. If Trump proceeds with the tariffs, it would see almost all imports from China covered by punitive import duties. It also would turn the president’s trade wars into a tangible reality for many Americans and their pocketbooks as he seeks re-election. Under a process outlined by U.S. officials, the new tariffs would not take effect until late June at the earliest. But that could come just as Trump meets with Xi on the sidelines of a Group of 20 leaders meeting June 28-29 in Osaka, Japan, raising the stakes in an already escalating trade war. Trump on Monday warned Beijing not to go too far in responding to U.S. trade actions after China rolled out its retaliation to his move to hike import duties on a separate $200 billion tranche of imports from China last week. “There can be some retaliation, but it can’t be very substantial,” Trump told reporters Monday at the White House during a meeting with Hungarian Prime Minister Viktor Orban. U.S. stocks dropped on signs of an escalating trade war, with the S&P 500 dropping the most in four months. Treasuries rallied with the yen on demand for haven assets. The release of the additional tariffs list and the continuing escalation it signals drew an outcry from business groups who have been lobbying against the duties. Economists have warned that the existing tariffs would hurt U.S. growth. But they are also worried an escalation to cover all trade from China and the Chinese retaliation it would provoke would do far more damage and could even tip the U.S. economy into recession.
China Promises Response If U.S. Slaps Tariffs on all Remaining Imports -- China’s government promised to respond to a U.S. proposal to tariff the rest of the goods it buys from China, raising the stakes for the dispute between the world’s two largest economies. “The U.S. bullying and application of extreme pressure goes against multilateral trading rules,” Chinese Ministry of Commerce Spokesman Gao Feng said in Beijing on Thursday. “China is strongly opposed to such practices. If the U.S. persists, China will be forced to take necessary actions.” Since trade talks in Washington ended with no progress last week, the two sides have stepped up their rhetoric and threats, with the U.S. announcing plans to tax nearly $300 billion of imports not already subject to punitive tariffs. China has said there can be no deal without the removal of all extra tariffs imposed since last year. The Chinese government has no information about any U.S. plans to travel to Beijing to continue talks, Gao said. U.S. Treasury Secretary Steven Mnuchin said yesterday that he and chief negotiator Robert Lighthizer will travel to Beijing “at the appropriate time” but there are no plans as yet. Gao refused to say whether Presidents Donald Trump and Xi Jinping would meet next month at the Group of Twenty meeting in Japan, directing that question to the Ministry of Foreign Affairs.
China-U.S. trade talks should be based on equality: Chinese FM - (Xinhua) -- China and the United States should carry out their trade talks on the basis of equality instead of blaming and pressuring on the other side during the process of negotiation, Chinese State Councilor and Foreign Minister Wang Yi said here on Monday. He made the remarks at a press conference following a meeting with his Russian counterpart Sergei Lavrov. When asked about the prospects for China-U.S. trade talks, Wang said Beijing and Washington have made significant and substantial progress with their joint efforts, but certain difficulties remain to be carefully handled and resolved. Under such circumstances, unilateral accusation is meaningless while shifting responsibility is unacceptable, he said, warning that exerting maximum pressure will only trigger legitimate countermeasures. China's move is meant to not only protect its due rights and interests, but also safeguard the basic rules of multilateral trade mechanism, Wang added. Wang underlined that the negotiation is not a one-way lane but should be carried out on the basis of equality, saying it is impossible to expect one side to readily accept the other's request. China will always safeguard its sovereignty, Chinese people's interests and national dignity when negotiating with any country, he said.
White House posts list of $300B in Chinese goods to be targeted by tariffs -- The White House on Monday released a list of roughly $300 billion in Chinese products that President Trump may hit with tariffs, a significant step toward subjecting all goods from China to import taxes. The Office of the U.S. Trade Representative (USTR) on Monday afternoon identified hundreds of food items, agricultural products, articles of clothing, shoes and other consumer goods that would be subject to a 25 percent tariffs if finalized by Trump. Trump has already imposed a 25 percent tariff on roughly $250 billion in products from China, including hiking import taxes Friday on $200 billion in Chinese goods from 10 to 25 percent. China has responded byincreasing tariffs on $60 billion in U.S. agricultural goods, boosting its leverage over the ailing farm sector.The USTR list lays the groundwork for Trump to follow through with his threat to impose tariffs on all Chinese goods. Doing so would be seen as a massive escalation of the nearly year-long trade war with China, and could prompt a severe response from Beijing.The new tariffs would cover dozens of basic goods, likely raising prices for food, clothing, household items, novelties and a vast array of products the U.S. imports from China.Trump has repeatedly downplayed the economic pain from the tariffs, arguing most of the burden is covered in some way by China. “We’re in a great position right now, no matter what we do,” Trump told reporters Monday.But experts have warned that deepening trade war will hinder both the U.S. and Chinese economies, and could potentially risk a recession in the U.S.
China exporters react to Donald Trump’s new trade war tariff plan: ‘This will kill my US market’ - Exporters from China woke up on Tuesday to the news that US President Donald Trump has pressed forward with what was previously considered the “nuclear option” in the long-running trade war. By publishing a plan to roll out tariffs of up to 25 per cent on almost all of the remaining goods China sells to the United States, Trump has gone further than many thought possible when the trade war’s first skirmishes took place almost one year ago. Overnight, the Office of the United States Trade Representative (USTR) published List 4 of the Section 301 regime of trade tariffs. This pledged to impose tariffs of up to 25 per cent on Chinese goods with an approximate total annual trade value of US$300 billion. “The proposed product list covers essentially all products not currently covered by action in this investigation”, the USTR notice read, excluding “pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials, and critical minerals”. It was published hours after China announced tariffs ranging from 5 to 25 per cent on US$60 billion of US goods to be implemented on June 1, in response to tariff increases by the US last Friday. Some exporters were taken by surprise. “Frankly, I am super pissed, because this will completely kill my US market,” said Anna Kam, whose company Sky City 2K exports video game console controllers, 85 per cent of which are sourced and manufactured in mainland China. They are then transported to Hong Kong, before being shipped to customers in Europe and the West Coast of the US. “This will kill our market because our products have a 12 to 15 per cent margin. And imposing a 25 per cent tariff would kill our profits,” she said, adding that the Harmonised System tariff code 9504.50.00, governing “video game consoles and machines”, is exactly what they export under – and is included in List 4. “It has already been quite bad. Actually our sales already dropped off significantly and I do not know what we’re going to do about it,” Kam said, adding that before tariffs were introduced, she had experienced non-tariff barriers, such as her goods being held up by US Customs without any explanation.
Beijing calls for a 'people's war' against the US as Trump threatens tariffs on another $300 billion of Chinese goods in all-out trade battle - The US-China trade war continues to heat up, with Beijing calling for a "people's war" against Washington and President Donald Trump threatening to impose tariffs on another $300 billion worth of Chinese goods.In a series of editorials and op-ed articles published Monday, Chinese state media slammed what it labeled the Trump administration's "greed and arrogance" and called for a "people's war" against it. Beijing's state-run media effectively serves as a mouthpiece for the Communist Party."The most important thing is that in the China-US trade war, the US side fights for greed and arrogance ... and morale will break at any point. The Chinese side is fighting back to protect its legitimate interests," the nationalistic Global Times tabloid wrote in a Chinese-language editorial carried by Xinhua News Agency."The trade war in the US is the creation of one person and one administration, but it affects that country's entire population. In China, the entire country and all its people are being threatened. For us, this is a real 'people's war.'" The rabble-rousing statements come amid an intense escalation of the trade war over the past week. Here's what happened:
- On Friday, Trump increased tariffs on $200 billion worth of imports from China, to 25% from 10%. Here are all the affected Chinese products.
- On Monday, China retaliated by saying it would raise duties on $60 billion worth of American goods starting June 1, resulting in duties of 5% to 25%. Here are the affected American goods.
- Later Monday, the US Trade Representative's Office published a list of about $300 billion worth of Chinese imports, noting that it proposed slapping tariffs of up to 25% on those products. Those goods include live purebred breeding horses, meat, condensed milk, tobacco, canoe paddles, and articles of clothing.
If the Trump administration were to impose the new tariffs on $300 billion of additional goods, it would mean that $500 billion worth of Chinese goods coming into the US would be subject to tariffs.
JP Morgan: The US-China tariff battle is just the start of a global trade reordering - As the relationships between countries shift over the next few decades, expect trade to remain a hot button issue, according to one analyst. That prediction comes as the U.S. and China continue to square off in a trade war that has roiled global markets. Last week, U.S. President Donald Trump hiked tariffs on billions of dollars worth of Chinese goods, and China threatened to retaliate. Those developments — which followed speculation that the world’s top two economies had been close to inking a trade agreement — sent shockwaves through global markets. As countries, including China, accrue more power on the global stage, investors should expect more trade arguments ahead, according to James Sullivan, head of Asia ex-Japan equity research at J.P. Morgan. “As we start to move toward a multi-polar world, I think we have to recognize that these trade conversations are not fits and starts,” Sullivan told CNBC’s “Squawk Box” on Monday. “I think we have to recognize as equity investors, in particular, this is now the new normal.” “These trade conversations are now part of the backdrop of global markets for the next ... 10 to 20 years as these countries and economies work out their relative place in the world and how we reorder the overall global structure to account for the rise of China, to account for a multi-polar environment,” he said.
Trump’s China tariff confusion: It won’t solve chronic trade deficits - The wizard of the White House roared last week, and markets quaked from Shanghai to London. In the face of Beijing’s refusal to meet U.S. demands on intellectual property theft and forced technology transfer, President Donald Trump is ramping up tariffs on Chinese imports.This may prove to be another ploy to coerce a trade deal from China’s negotiating team. But while president can indeed impose draconian tariffs on imports from China, it still won’t solve the most fundamental trade problem for America: chronic trade deficits.To be sure, China is a growing problem for the U.S. economy. Last year, the United States racked up a $419 billion goods trade deficit with China—almost half of the nation’s entire international goods deficit. And the U.S. has lost at least 3.4 million good-paying jobs, including 136,100 jobs in Pennsylvania, mostly in manufacturing, due to growing trade deficits with China since it entered the WTO in 2001. President Trump undoubtedly likes to make deals. And he needs a China deal to bolster his 2020 campaign while pacifying Wall Street. But it won’t make much difference for struggling U.S. manufacturers. His focus on China negotiations misses the mark, since he’s focused on technology transfer and intellectual property protections that will yield few tangible benefits for U.S. workers. Not much will change unless the president focuses on policies to rebalance the dollar. And the dollar needs to decline not just against China’s yuan, but also the Yen, the Euro, and the currencies of other trade-surplus countries, including South Korea, Taiwan, and Singapore.
Trump says if Fed cuts interest rates, US will win trade war: ‘It would be game over, we win!’ - President Donald Trump predicted Tuesday that China’s next move in the trade war will be a rate cut, and he pushed the Federal Reserve to follow suit in what he said would lead to a clear victory for the U.S. In a tweet that amounted to the latest salvo in the tariff dispute between the two nations, the president ramped up his pressure on the Fed to ease monetary policy. He said that should the central bank meet a China rate cut with one of its own, that would be “game over, we win!” The White House and Beijing have hit an impasse in their ongoing trade negotiations. Washington is looking for a lowering of barriers into China and for the nation to halt the theft of intellectual property. As recent talks stalled, China retaliated against Trump’s latest round of tariffs, announcing plans Monday to slap new levies on $60 billion worth of American goods. Trump’s remarks on Tuesday come amid market volatility spurred by uncertainty over the direction of the talks and how long they might continue before a solution is reached. In earlier tweets, Trump insisted that he will only accept a “great deal” for the U.S. Along with the heat he has placed on China, Trump has leaned hard on the Fed to cut its benchmark interest rate. The central bank raised rates four times in 2018, but markets now are pricing in a rate cut as soon as October. Minneapolis Fed President Neel Kashkari told CNBC on Monday that he thinks monetary policy for now is correct.
Will Trump's Plan Blow Up In His Face- Goldman Warns Inflation Will Surge If Trade War Escalates - When Trump escalated the latest round of trade war with China by hiking tariffs on $200BN in Chinese exports to 25%, he had three things in mind: the US economy was firing on all cylinders (Q1 GDP had just printed above 3% even if the number was largely the result of one-time items), the S&P was at new all time highs, and most importantly, the Fed's rate hikes had been put on indefinite hiatus. In fact, one can argue that a key reason why Trump decided to engage China in trade talks during the Q4 2018 crash, is because the Fed was still engaging in tightening, but five months later, Powell had been sworn to "patience", which meant that Trump would only have to worry about the trade war's impact on stocks, while ignoring the potentially destabilizing influence of the Fed. In fact, one can take the argument further, and assert that as stocks tumble as a result of trade war, Trump could add even more pressure on Powell to cut rates or launch QE as he has repeatedly urged the central bank to do.Which brings us to the latest round of trade war, which promises to be a long one: as Deutsche Bank's Jim Reid writes, "the stakes have been raised enough for it to be tough for either side to back down imminently so one wouldn't expect the news flow to rapidly improve in the near term. It doesn’t help that the Chinese economy has stabilised and that the S&P 500 is back close to record highs even with a small sell off last week. So there is no immediate need for anyone to backtrack. As such, markets will likely struggle for a while although last week they did try to rally back a few times as softer trade headlines and rhetoric brought us back from larger falls."So in an ideal world, the US would appear able to weather an extended trade war with China, at least until stocks dropped low enough to trigger the "Trump put." Yet despite the favorable optics, has Trump miscalculated? The answer depend on what Chinese exports are included in the upcoming expansion of tariffs. That is also the key question of Zhiwei Zheng, DB's China Economist, ’who asks whether the US will move to impose tariffs on the remaining around $300bn of Chinese exports. And this is where Trump may be making a mistake, because as Deutsche Bank explains, the remaining Chinese exports are significantly different from the other Chinese exports, as they include mostly consumer goods such as smartphones, computers, and textiles, and US consumers are more dependent on China for these goods. These are shown in the red box below:
Trump didn’t start this trade war. China did. - Washington Post - Before President Trump announced that he was imposing 25 percent tariffs on hundreds of billions of dollars’ worth of Chinese goods, he got encouragement from an unlikely source: Sen. Charles E. Schumer (D-N.Y.). The Senate Democratic leader, who has little good to say about Trump most days, tweeted, “Hang tough on China, @realDonaldTrump. Don’t back down. Strength is the only way to win with China.”That should have been a wake-up call for Beijing. When Chuck Schumer is tweeting support for Donald Trump, it’s time to cut a deal.But China didn’t cut a deal — and now it is paying a price. Those who suggest Trump started this trade war with China have it backward. Beijing has been waging economic warfare on the United States for years — stealing our intellectual property, forcing our companies to transfer technology as a price of doing business in China and subsidizing state-owned enterprises to prevent U.S. businesses from competing in dozens of sectors of the Chinese economy. The difference now is Chinese leaders are facing a president who is willing to fight back.China apparently didn’t think Trump would do so. The Wall Street Journal reports that Chinese negotiators believed they had leverage because Trump “was worried about the future course of the U.S. economy and therefore may be more eager to do a deal.” Big mistake. The U.S. economy is booming, unemployment is at the lowest level in five decades, and wages are rising. In fact, America’s biggest economic problem is that we have more job openings than unemployed people to fill them.China’s economy, by contrast, is in trouble. Last year, China reported its slowest economic growth since 1990, and the Financial Times reports that many experts "believe its official data understates the true extent of the slowdown.” While the United States has added about half a million manufacturing jobs since Trump took office, China’s manufacturing sector is shedding jobs. And the Chinese population is aging rapidly as birthrates are falling, which means the workforce is becoming smaller and less productive.Our economic strength against China’s relative weakness gives Trump leverage in this standoff, and he is using it. Trump knows the United States can better withstand a trade war than China and that President Xi Jinping needs a deal more than he does. Trump is wrong when he says tariffs are good for our economy because China is paying us “hundreds of billions of dollars” in tariff revenue — money he can use to help farmers withstand the blow of lost sales to Beijing. China is not paying the cost of tariffs. American businesses and consumers are paying. But the fact that Trump mistakenly believes tariffs are good for the economy should have sent a signal to Beijing. He thinks he’s in a win-win situation, and that means, in this game of chicken, Trump is not going to blink.
The media is lying to you about Trump’s China tariffs - I’m used to partisan, inaccurate drivel from all sides these days, but the media’s coverage of President Trump’s tariffs and the so-called “trade war” takes some kind of cake. There’s no serious doubt that some in the media would absolutely love to tank the stock market. They figure that would hurt Trump’s re-election chances in 2020. Monday’s stock market slump, which saw the Dow Jones Industrial Average tumble 2.4% and the Nasdaq Composite 3.4%, looked just like what the doctor ordered. I write this, incidentally, as someone who is no fan of the president. But I remember when politics was supposed to stop at the water’s edge. And, anyway, facts are facts. Most of what the public is being told about these tariffs is either misleading or a downright lie. I’ve been following the coverage all weekend with my jaw on the floor. It wasn’t long ago the media was complaining because Trump was cutting taxes. Now it’s complaining that he’s raising them. Confused? Me too. Yes, tariffs are “costs.” But they do not somehow destroy our money. They do not take our hard-earned dollars and burn them in a big pile. Tariffs are simply federal taxes. That’s it. The extra costs paid by importers, and consumers, goes to Uncle Sam, to distribute as he sees fit, including, for example, on Obamacare subsidies.It wasn’t long ago the media was complaining because Trump was cutting taxes. Now it’s complaining he’s raising them. Confused? Me too.And the amounts involved are trivial. Chicken feed.President Trump just hiked tariffs from 10% to 25% on about $200 billion in Chinese imports. In other words, he just raised taxes by … $30 billion a year.Oh, no! The total amount we all paid in taxes last year — federal, state and local — was $5.51 trillion. This tax increase that has everyone’s panties in a twist is a rounding error.
Companies warn Trump trade war is about to hit consumers - U.S. companies are speaking out against President Trump's escalating trade war with China, with major players such as Walmart saying tariffs are forcing them to raise prices on consumer goods for Americans. The price hikes could complicate things for Trump as the 2020 campaign picks up. The president has repeatedly asserted that China, and not U.S. consumers, would pay the price of the trade war. “There are some places where, as we get tariffs, we will take prices up,” Walmart Chief Financial Officer Brett Biggs said Thursday in an earnings call. Macy’s CEO Jeff Gennette issued a similar warning, saying another round of tariffs would almost certainly hit consumers in their pocketbooks. “When you do the math, it’s hard to find a path through that wouldn’t impact customers,” he told investors and analysts on Thursday. “It will affect a lot of apparel and accessories categories.” Trump has imposed tariffs on China in stages, starting in July when he targeted $50 billion of imports. He later added $200 billion of goods to the list. Last week he raised tariffs from 10 percent to 25 percent on the $200 billion of goods, and on Monday threatened to impose tariffs on the remaining $300 billion of goods imported into the U.S. from China. Retailers say they have bent over backwards to avoid increasing prices up until now, but that the latest round has left them with few options.
Senior Admin Official- A Trade Deal Isn't Close; US Could Be In For A Long Trade War - Despite a flurry of meandering hot-then-cold trade war tweets from President Trump, US futures have been powering higher all morning. But then along came Axios to pour cold water all over the growing trade-deal optimism after the stock market's worst one-day selloff since January. According to Axios, senior administration officials told senior White House reporter Jonathan Swan that a trade deal with China "isn't close" and that the US "could be in for a long trade war." Swans' sources said the differences between the two sides "are so profound taht, based on his read of the situation, he can't see the fight getting resolved before the end of the year." That's a much longer timeline than the three-four weeks Trump touted Monday night, who touted the possibility that the a meeting with President Xi at the G-20 in Japan next month could yield an agreement. The White House is already moving ahead with plans to slap tariffs of up to 25% on the remaining ~$300 billion in Chinese imports that aren't already subject to trade-war related tariffs. Axios summed up the White House view on China's position as follows: Beijing only responds to shows of brute force. Trump is also convinced that China will suffer more than the US, since Americans buy more Chinese products than the other way around, but over the weekend, Larry Kudlow said both sides will suffer. Asked whether Trump "actually believes" that China pays the tariffs and not US consumers, they replied: "Yes, that's what he actually believes." "There's little point trying to persuade Trump otherwise, because his belief in tariffs is "like theology."
Farm Crisis- Soybeans Crash To Decade-Low As Trade War Intensifies - Soybean futures fell 25% in 50 weeks since the inception of President Trump's trade war early last summer. CBOT Soybeans futures plunged to their lowest level in a decade as China on Monday said it would raise tariffs on $60 billion in US goods in retaliation for Trump's decision on Friday to raise duties on $200 billion in Chinese products to 25% from 10%. The deepening trade war has pushed American farmers onto the verge of disaster. The escalation in the trade war doesn't directly affect agricultural products since most were already facing a 25% tariff rate in China last year. But the news on Monday sent soybean prices tumbling. CBOT Soybeans broke below $8 per bushel on Trump's escalation of the trade war last week, plunged to $7.81 per bushel on the retaliatory tariff increases from China. Refinitiv trade flows indicate the Sino-American trade war has cut over 80% of US soybean exports to China so far this market year (September-August). "Clearly, there's uncertainty about where we're going from here," St. Louis-based independent analyst Ken Morrison told Bloomberg. "Both parties have backed themselves into a corner." The breakdown in negotiations comes at a time when soybean sales are decreasing, and huge stockpiles are building, have resulted in many farmers teetering on the verge of bankruptcy.Morrison said China could cancel the 7.4 million metric tons of beans that have not yet been shipped, according to the US Department of Agriculture data. The collapse in negotiations has also led Trump to pledge $15 billion worth of agricultural product purchases from American farmers through the Commodity Credit Corp., a federal agency given authority during the Great Depression to stabilize prices. Given the large stockpiles, it's still unclear how government purchases of soybeans would resolve the current supply overhang. Farmers are some of Trump's key supporters, they've been big advocates of getting a better trade deal with Beijing, but now many are running out of patience as the Midwest goes bankrupt. Several months ago, we showed the number of farmers filing for bankruptcy climbed to its highest level in a decade.
American Farmers Are Losing Patience And Money In Record Numbers! -American farmers are being pushed to the brink by government policies. Most have had enough of the trade war and are increasingly becoming impatient with their financial instability and worsening regulatory burdens placed on their backs. Bankruptcies are skyrocketing, food prices are expected to soar, and American farmers are losing patience with their inability to keep up. For the most part, farmers have stood behind president Donald Trump’s mission to get a better trade deal with China. One that addresses long-standing issues with what they say are “unfair trading practices,” however, they now seem to be in the crosshairs of the feud.After weeks of optimistic statements by Trump and members of his administration about how trade talks were progressing, Trump abruptly escalated tariffs on $200 billion of Chinese goods last week and opened the door to even more. This move prompted Beijing to hit back Monday by raising the tariff rate on $60 billion of US items, according to reporting by CNN.Some farmers are even saying Trump now “owes” them a solution to the problems they face because of his policies.“The President of the United States owes farmers like myself some type of plan of action,” John Wesley Boyd Jr., a soybean farmer in Baskerville, Virginia, told CNN‘s Brianna Keilar on Monday. “Farmers were his base. They helped elect this president... and now he’s turning his back on America’s farmers when we need him the most,” he added.
Farm Crisis- Suicides Spike In Rural America As Trade War Deepens - The deepening trade war between the US and China has roiled complex global supply chains and America's Heartland. The latest breakdown in negotiations comes at a time when soybean exports to China have crashed, and huge stockpiles are building, have resulted in many farmers teetering on the verge of bankruptcy. Mounting financial stress in the Midwest has allowed a public health crisis, where suicide rates among farmers have hit record highs, according to one trade organization's interview with the South China Morning Post.Bill Gordon, a fourth-generation farmer in Worthington, Minnesota, who is also vice-president of the American Soybean Association, warned that spot prices for agriculture products have dropped so low, many in the Midwest can't even service their debts or also pay their bills. Farmers are losing their land to creditors daily. This has triggered the suicide rate among farmers to jump in the last several years."The markets are so low, we cannot even break even to pay our bills. Farmers are losing their farms every day. The suicide rate among farmers is at an all-time high," Gordon said."It is not up to us to tell the president how to negotiate, but a handout from the government is not how I want to run my business," Gordon explained while talking about President Trump's bailout of farmers and the possible use of the Commodity Credit Corp., a federal agency given authority during the Great Depression, to buy $15 billion worth of agricultural product from farmers."It took us 40 years to build these markets … and while no trade deal is perfect, for the most part the agriculture trade with China was on the up and up, or mutually beneficial," he said. Agricultural economist Scott Irwin, a professor at the University of Illinois Urbana-Champaign, told the Post that farmers right now are losing $50 to $100 on corn and soybeans per acre. This excludes the government bailout, he said.
Exodus- Economists Flee USDA After Alleged Retaliation By Trump Admin - Economists are now fleeing the Agriculture Department's research arm, indicating they've been retaliated against for publishing reports on how Trump administration policies have severely impacted the Heartland.According to Politico, six economists at the Economic Research Service (ERS) resigned last month, and more are expected to leave shortly.The departure wave comes after ERS economists published new findings that showed debt-fuelled tax cuts, Trump's trade war, and other policy decisions have financially harmed American farmers. Heartland voters were Trump's top supporters in 2016, and if more negative ERS reports circulated into media or even into Democratic strategist hands, that could spell disaster for Trump 2020 in several battleground states.The report outlines the continued deterioration under Trump administration's watch in farm income, which has plunged 50% since 2013."The administration didn't appreciate some of our findings, so this is retaliation to harm the agency and send a message," said one current ERS employee, who asked to be anonymous.
Trump declares emergency over IT threats - President Donald Trump has declared a national emergency to protect US computer networks from "foreign adversaries". He signed an executive order which effectively bars US companies from using foreign telecoms believed to pose national security risks. The order does not name any company, but is believed to target Huawei. The Chinese tech giant said restricting its business in the US would only hurt American consumers and companies. One potential problem with 5G tech may have more to do with castles than you’d expect Several countries, led by the US, have raised concerns in recent months that Huawei products could be used by China for surveillance, allegations the company has vehemently denied. The US has been pressuring allies to shun Huawei in their next generation 5G mobile networks. In a separate development, the US commerce department added Huawei to its "entity list", a move that bans the company from acquiring technology from US firms without government approval. The moves are likely to worsen tensions between the US and China, which had already escalated this week with tariff hikes in a trade war.
Trump declares national emergency over threats against US technology amid campaign against Huawei - President Donald Trump on Wednesday declared a national emergency over threats against American technology, the White House said. The move, done via executive order, is expected to precede a ban on U.S. firms doing business with the Chinese telecommunications company Huawei, though the order does not refer to Huawei directly. The order authorizes the Commerce Secretary Wilbur Ross, in consultation with other top officials, to block transactions that involve information or communications technology that “poses an unacceptable risk to the national security of the United States.” The announcement comes as the U.S and China remain locked in a trade dispute and could escalate tensions between the world’s two largest economies. In a statement, White House press secretary Sarah Huckabee Sanders wrote that the administration will “protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services in the United States.” Trump has pushed allies around the world not to adopt the company’s next generation 5G network technology, which American officials have warned could be used for spying by the Chinese.
Beijing Hints Washington's Nuclear Option Against Huawei Could Crash Trade Talks -Beijing has already responded to President Trump's blacklisting of Huawei and dozens of its affiliates via Hu Xijin, one of its most closely watched English-language mouthpieces...Most Chinese agree that the US is more powerful than China and Washington holds initiative in the trade war. But we just don't want to cave in and we believe there is no way the US can crush China. We are willing to bear some pain to give the US a lesson.— Hu Xijin 胡锡进 (@HuXijin_GT) May 16, 2019...and Huawei has also released a statement of its own, saying it is"ready and willing to work with the US government" to offer reassurances about safety and security. But early Thursday, the Foreign Ministry, which along with the MOFCOM (the Ministry of Commerce), is perhaps the most closely watched by the West, issued the most strongly worded statement yet, blasting the White House's tactics as "disgraceful and unjust" and hinting that the Huawei ban could hurt the ongoing trade negotiations. Shortly after President Trump signed an executive order banning Huawei and other foreign telecoms companies from doing business with US companies, while the Department of Commerce said it planned to add Huawei to its "Entity List," which could stop US companies from dealing with Huawei. If applied, these restrictions could seriously impact the company's operations. When Washington slapped a "components ban" on another Chinese telecoms giant, ZTE, last year, the ban hammered the company's stock and provoked a short-lived selloff in Chinese financial markets. Lu Kang, the foreign ministry spokesman, warned that Beijing would take all necessary measures to safeguard its rights and the interests of Chinese businesses - which sounds like a threat to us - before suggesting that the decision would make it harder for Beijing to trust Washington, which could redound upon trade negotiations.
Bannon- 'No Chance' Trump Will Back Down On China Trade War --President Trump has dug his heels in when it comes to the trade war with China, and according to his former adviser Steve Bannon - there's "no chance" Trump will back down, according to CNBC. "China has been running an economic war against the industrial democracies for 20 years," Bannon said, noting that previous presidents - Clinton, Bush and Obama - all 'blinked' when it came to trade with China, adding "Trump didn't blink." "Every president beforehand, Clinton, Bush and Obama, have all blinked. Trump didn't blink." Steve Bannon on the current state of trade negotiations with China. pic.twitter.com/tQv9dz5dE9Under Trump, Washington has taken a tougher stance on China compared to previous presidential administrations. In addition to disputes around trade and the alleged Chinese theft of U.S. intellectual property, American intelligence chiefs expressed their distrust of Chinese tech giant and Apple rival Huawei as well as Chinese telecom company ZTE.The standoff with China “cuts to the core of what the United States is going to be in the future,” Bannon said in a “Squawk Box” interview. “We have all the cards.” -CNBCUS officials maintain that the Chinese stock market and economy has taken a bigger hit than the US, and will continue to be disproportionately harmed by the ongoing trade war. On Wednesday, China reported unexpectedly weaker growth in retail sales and industrial output for April. “Investors had been waiting for data to confirm signs of stabilization in the Chinese economy which, in turn, would bolster expectations that the global economy could start making a sustainable recovery,” said Neil McKinnon at VTB Capital. “The recent escalation in tariffs makes that more difficult and can only add to investor risk aversion and increase the risk of a more prolonged economic downturn.” The negative numbers will add pressure on Beijing to roll out more stimulus as the trade war escalates, while China's Communist Party has defiantly rolled out national slogans to let the world know they aren't backing down either (for now).
A Bit Insane - China Slams Racist And Fringe Bannon Over Hostile Commentary --China's official newspaper of the ruling Communist Party (CCP) has taken serious umbrage with recent comments by Steve Bannon, after the former Trump chief strategist penned an Op-Ed in the Washington Post declaring that China is run by a "radical cadre" whose goal is to threaten the global hegemonic power. On Wednesday, the Times wrote: US far-right nationalist Steve Bannon published an article in The Washington Post on May 6, vehemently vilifying China and inciting his country to confront China. The goal of the Communist Party of China (CPC), he claimed, is "to be the global hegemonic power." To prove his point that it was "futile" for the US to compromise, he asserted China "has been waging economic war against industrial democracies," and the China-US trade dispute is "a fundamental clash."Bannon maliciously smeared China by saying that China is a "rapidly militarizing totalitarian state imprisoning millions in work camps," and "the world is a house divided half slave, half free." Washington and Beijing are "facing off to tip the scales in one direction or the other," he wrote. -Global TimesMost dramatically, the Times adds: "To rational analysts, Bannon is not just radical, but a bit insane. He is obsessed with certain resentful suspicions that the US is on a razor's edge." The article continues, saying that Bannon's ideas - which have a "deep racist imprint" - are roughly equal to those of European extreme-rightists, "even neo-Nazists" [sic], and that such line of thinking used to be outside of the mainstream US discourse. Bannon's "extreme personality" also "kept his peers away and had him expelled from the White House," according to the Times, which adds that the former Trump adviser has "no idea about the globalized world and the complexity of major power relations."
China Downplays Chances for Trade Talks While U.S. Plays ‘Little Tricks’ - China’s state media signaled a lack of interest in resuming trade talks with the U.S. under the current threat of higher tariffs, while the government said stimulus will be stepped up to buttress the domestic economy. Without new moves that show the U.S. is sincere, it is meaningless for its officials to come to China and have trade talks, according to a commentary by the blog Taoran Notes, which was carried by state-run Xinhua News Agency and the People’s Daily, the Communist Party’s mouthpiece. The Ministry of Commerce spokesman said Thursday he had no information about any U.S. officials coming to Beijing for further talks. U.S. equities fell on concern that talks between the world’s two largest economies have stalled. The Shanghai Composite Index also declined. The indications that negotiations are paused will focus attention on the next opportunity for Presidents Xi Jinping and Donald Trump to meet -- at the Group of 20 meeting in Japan next month. Their meeting in Argentina in December last year put negotiations back on track, only for them to fall apart again this month in Washington. "If the U.S. doesn’t make concessions in key issues, there is little point for China to resume talks," said Zhou Xiaoming, a former commerce ministry official and diplomat. "China’s stance has become more hard-line and it’s in no rush for a deal" because the U.S. approach is extremely repellent and China has no illusions about U.S. sincerity, he said. According to Zhou, the commerce ministry spokesman on Thursday effectively ruled out talks in the near term. In comments to the media, ministry spokesman Gao Feng said that China’s three major concerns need to be addressed before any deal can be reached, adding that the unilateral escalation of tensions in Washington recently had “seriously hurt" talks. U.S. Treasury Secretary Steven Mnuchin said this week that American officials “most likely will go to Beijing at some point” in the near future to continue trade talks, before later saying he has “no plans yet to go to China.”
Trade Optimism Fizzles As China Says No Plans For More Talks - Well, it looks like President Trump finally did it. He finally pushed Beijing so hard on Huawei that they had no choice but to respond. The Chinese weren't kidding when they warned that Washington's latest aggression toward Huawei - adding the Chinese telecoms giant to a blacklist that will make it extremely difficult, if not impossible, for Huawei to buy components from American companies - might crash trade talks. Because after the Commerce Department formally added Huawei to the blacklist, the Chinese media and Chinese officials turned up the rhetoric, warning that there are no plans for another round of talks. Markets didn't take this well: Chinese stocks plunged 2.5% overnight on Friday - a big drop, though still not as bad as the 3% decline from last Monday,the market's worst day in three years. European shares didn't fare much better because, as one analyst explained to Bloomberg..."The China state media commentaries fueled concerns that the U.S.-China trade disputes will prolong, deterring risk-taking," said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo. "This issue will probably be one of the major market drivers for a while as U.S.-China trade war influences global economic conditions."US futures were in the red, leaving stocks on track for a lower open. Yields on Treasuries and bunds declined. Asia's emerging currencies and the yuan weakened. The yen and Swiss franc advanced.A comment on Taoran, seen as a venue for the government's views, accused the US of playing "little tricks to disrupt the atmosphere," and insinuated that the Huawei blacklisting had seriously jeopardized talks. "We can’t see the U.S. has any substantial sincerity in pushing forward the talks. Rather, it is expanding extreme pressure," the blog wrote. "If the U.S. ignores the will of the Chinese people, then it probably won’t get an effective response from the Chinese side," it added.
Propaganda Intensifies Trade War With China - The dwindling empires' main propaganda outlet, the New York Times, continues its anti-China campaign. It is now by blaming China's president for the failure of trade negotiations with the United States. How Xi’s Last-Minute Switch on U.S.-China Trade Deal Upended It: China’s leader, Xi Jinping, seemed confident three weeks ago that a yearlong trade war with the United States could soon subside, handing him a potent political victory. He even made a speech saying China would protect intellectual property, encourage foreign investment, and buy more goods and services from abroad — all changes the United States had been demanding as the countries tried to negotiate a deal. But just a week after that speech, Chinese negotiators sent the Americans a substantially rewritten draft agreement, prompting President Trump to accuse Beijing of reneging on terms that had been settled. As typical for U.S. propaganda the piece goes on to personifying the decision China made when confronted with overreaching U.S. demands. It is Xi personally, says the Times, who is to blame: In China’s top-down political system, where President Xi has amassed formidable power, ... ... it is clear that Mr. Xi misjudged ... Now Mr. Xi risks being backed into a corner, ... For Mr. Xi, such a move could be seen ... Mr. Xi’s frenetic schedule and highly centralized style of policymaking ... “No doubt Xi has tightened the overall policy atmosphere ... U.S. propaganda is always pointing to one person that solely cases everything and therefore deserves all the hate. It once was Saddam, Saddam , Saddam. Then Ghadaffi, Ghadaffi, Ghadaffi, Assad, Assad, Assad, Putin, Putin, Putin. Now it is Xi, Xi, Xi.
Lloyd Blankfein Is A Trade Warrior Now -- The fallout from the collapse of the trade deal with China has created some unlikely bedfellows among those who have publicly backed President Trump's decision to push for the "great" trade deal that he promised - or walk away. That dynamic was on full display Wednesday morning when Steve Bannon appeared on CNBC to discuss the importance of Trump's trade fight, and guest host Tom Friedman - yes, that Tom Friedman - said he agreed with the entirety of Bannon's position. Even Chuck Schumer has urged Trump not to capitulate and to make sure the US gets the best deal possible. Mitch McConnell, on the other hand, has stuck to somberly reminding the world that a trade war would produce 'no winners'.Before Bannon's appearance, former Goldman Sachs CEO Lloyd Blankfein, a Wall Street titan whom one might expect to be firmly in the 'free trade' camp, issued a series of tweets where he effectively came out in favor of Trump pressing ahead with more tariffs. He compared the tariffs to a "labor strike" and said they might be an effective negotiating tool.Furthermore, Blankfein played down the impact on consumers by arguing that Americans might switch their purchases to domestic companies or non-Chinese companies (or at least companies that don't source their products from China).Tariffs might be an effective negotiating tool. Saying it hurts us misses the point. China relies more on trade and loses more. As in a labor strike where mngmnt & workers both get hurt, the process may demonstrate relative strength & resolve & where compromise needs to happen.— Lloyd Blankfein (@lloydblankfein) May 14, 2019
Trump Set to Delay Auto Tariffs Amid EU, Japan Trade Talks - President Donald Trump is poised to delay a decision by up to six months to impose auto tariffs to avoid blowing up negotiations with the EU and Japan and further antagonizing allies as he ramps up his trade war with China, according to people close to the discussions. Trump faces a May 18 deadline over how to proceed with his threat to slap a tariff of as much as 25% on imported cars and parts in the name of U.S. national security. The news was welcomed by an equities market that has been battered by renewed trade concerns since last week. Trump, who is due to make a state visit to Japan later this month, remains the wild card, according to people close to the discussion. Trump and a small group of aides including Commerce Secretary Wilbur Ross and trade adviser Peter Navarro are seen to be in favor of the new import duties against the advice of other advisers. But people close to the discussions say even advocates of tariffs are still debating the scope of any action, complicating the discussions. Other advisers including U.S. Trade Representative Robert Lighthizer, who is leading the negotiations with the EU and Japan, have been urging Trump to postpone a decision, according to administration officials and other people familiar with the deliberations. At a White House meeting on Tuesday officials firmed up the decision to delay tariffs for up to 180 days, according to two people familiar with the deliberations. A decision is expected to be announced publicly before the end of the week.
Trump administration will delay auto tariffs for up to six months - The Trump administration will delay tariffs on cars and auto part imports for up to six months as it negotiates trade deals with the European Union and Japan. In a proclamation Friday, Trump said he directed U.S.Trade Representative Robert Lighthizer to seek agreements to “address the threatened impairment” of national security from auto imports. Trump could choose to move forward with tariffs during the talks. “United States defense and military superiority depend on the competitiveness of our automobile industry and the research and development that industry generates,” White House press secretary Sarah Huckabee Sanders said in a statement. “The negotiation process will be led by United States Trade Representative Robert Lighthizer and, if agreements are not reached within 180 days, the President will determine whether and what further action needs to be taken.” In his proclamation, Trump argued in part that “domestic conditions of competition must be improved by reducing imports.” The White House had to decide by Saturday whether to slap duties on autos. Earlier this year, the Commerce Department said Trump could justify the move on national security grounds. By law, the administration can push back its decision by up to six months if it is negotiating with trading partners. Levying the auto tariffs threatened to open new fronts in a global trade war that could drag down the U.S. economy. The EU has already prepared a list of American goods to target with tariffs if Trump goes ahead with the car duties. Automakers and some U.S. lawmakers opposed the potential tariffs. The American car industry said the duties would put jobs in jeopardy and raise prices for consumers. The decision comes after the U.S. and China fired new shots in their trade war. The White House is working to salvage a deal with Beijing to address what the U.S. calls trade abuses amid the widening conflict. Trump also used the national security justification last year to put tariffs on steel and aluminum imports, including metals coming from allies such as the EU, Canada and Mexico. Europe previously retaliated after those duties.
US threatens EU with trade war over weapons -The United States has all but threatened the European Union with war – albeit a trade war – over E.U. plans to boost cooperation between member states on military spending.First reported by Germany’s Der Spiegel and later confirmed by Reuters, the Financial Times and AFP (among others) – although sadly unpublished in full – Under Secretary of Defense for Acquisition, Technology and Logistics Ellen Lord (previously the CEO of U.S. defense contractor Textron Systems) and Undersecretary of State for Arms Control and International Security Andrea Thompson on May 1 sent a letter to the E.U.’s chief diplomat, the High Representative for Foreign Affairs and Security Policy Federica Mogherini outlining U.S. concerns about access to E.U. funds for American corporations. The undersecretaries wrote of “poison pills” and “restrictive language” in proposed rules for the E.U.’s Permanent Structured Cooperation on Defence and Security (PESCO) and the European Defence Fund that could potentially prevent states that are not E.U. or European Economic Area members from easily accessing new E.U. funding for defense projects. The €13 billion European Defence Fund sets aside €4.1 billion for research and €8.9 billion for developing military capabilities for the 2021-2027 financial period, and only collaborative projects involving at least three member states or associated countries can receive funding. Meanwhile PESCO, which was formally established in December 2017, allows participating E.U. states to develop joint defense capabilities, invest in shared projects, and enhance the operational readiness and contribution of their armed forces, and a total of 34 PESCO projects have been adopted so far.Although open to non-E.U. states, their participation must be accepted unanimously, and the E.U. retains control over future development and – perhaps crucially – the export of systems developed using E.U. funds.
Trump welcomes Hungarian far-right prime minister Orbán to the White House - On Monday afternoon, Hungarian Prime Minister Viktor Orbán was welcomed by US president Donald Trump at the White House. It was the first time in 20 years, since Bill Clinton welcomed Orbán in 1998, that the leader of the Hungarian far-right government has met with a US president in Washington. At a brief session with reporters after the discussion with Orbán, Trump praised the latter saying the Hungarian leader had “done a tremendous job in so many ways,” and that he was a “tough man,“ that had done “the right thing ... on immigration.” Trump continued, asserting that Europe had “tremendous problems” because other governments had handled immigration differently “than the prime minister.” Orbán added, “We are proud to stand together with the United States on illegal migration, on terrorism,” and in helping “Christian communities all around the world.” Both Trump and Orbán stressed that the primary goal of their meeting was “to strengthen our strategic alliance.” The visit, following an invitation by the White House, took place just 11 days before the European elections in which far-right parties like Orbán's party Fidesz are expected to make significant gains. More than any other head of government in Europe, Orbán is associated with the rise of far-right, authoritarian movements in Europe over the past decade. Under his second term as prime minister since 2010, the Hungarian government has cracked down on freedom of the press and freedom of speech, significantly expanded the powers of the prime minister and president and undertaken far-reaching efforts at falsifying history. The glorification of the fascist Horthy regime, which was in an alliance with Hitler's Nazi Germany during World War II, has become official state policy.
Surprise: Pentagon Finds Money for Wall! - It’s a miracle! The wall can be funded! The Pentagon can pay for it! Hooray for America and for a bottomless Pentagon budget that is so full of excess funds that money can be found for this vital project, essential to the safety of all Americans!Somehow over the past couple of months, once Donald Trump found that he could slide a “national emergency” through a docile Republican Party in Congress, the now-compliant Pentagon, under the stewardship of Acting Secretary Pat Shanahan, has discovered $6 billion dollars it can offer the White House for the sacred Wall. It found those dollars the old-fashioned way: looking in plain sight for extra money in a budget that has soared more than $100 billion over the past three years.It’s a job that any good Pentagon comptroller could do in his or her sleep, because, yes, folks, there is always extra money. When I spent five years at the Office of Management and Budget overseeing Pentagon budgets I learned how possible this treasure hunt is, even in budgets that were, in that day, less than half the size (in current dollars) that they are today.Once one gets down to the real business of defense, the dollars are always there, especially in a defense budget larger than the next eight countries combined. The Pentagon claims that it must have all these funds because the Russians are coming, the Chinese are competing, the Israelis need defense technology, the terrorists are threatening, the Iranians want to dominate the Middle East, or, very commonly, America’s military readiness hovers at the edge of collapse. So much rhetoric, so little time. When it comes to the Wall, that trumps everything (pun intended) and even a comptroller can find the funds. U.S. national security lives in a world of rhetorical and emotional manipulation. Fear of the other becomes the bedrock of a justification for more. Combine that with the threat that a resistant politician will be accused of not supporting America’s “bravemenanadwomeninuniform” or of letting down America in the face of its enemies—of being, yes, “soft on defense”—and it’s the perfect political prescription for adding even more money to the pile on the table.
US Border Patrol Is the Most Brutal Militia of All -The militia group was hunting for border-crossers near the U.S.-Mexico boundary. Soon it encountered a group of migrants. Its members made them “take off their shoes and walk for half an hour in their socks,” then “lie face-down in the dirt for an hour.” The militia’s members stole the migrants’ food and fed it to their horses. They took the migrants’ sweaters, tossing them dirty blankets covered in cactus spines to use against the cold.Actions like these have made the militia infamous. Human rights researchers log its many crimes. Legal organizations record thousands of its abuses. But the militia, defiant, is digging in.“We are America’s frontline,” their manifesto reads. “We safeguard the American homeland at and beyond our borders. We protect the American people against terrorists and the instruments of terror.” Its members dismiss detractors. One man, recently retired, said he was “completely positive” about the outfit, stressing that “they’re doing the best that they can,” especially given some politicians’ efforts to restrict militia activity. “I wish all those guys in Washington would spend just one day down here to see what the hell they’re talking about,” a long-serving member declared. But charges against the group have accumulated in recent years. They range from legal violations to physical, psychological and sexual abuse. Consider lawbreaking first. One member shot through the border fence into Nogales, killing a teen on Mexico’s side of the fence in 2012. The group’s present policy, according to the ACLU, is to detain migrants and then “brazenly violate their religious-freedom rights,” taking away Bibles and rosaries from Christian border-crossers. The ACLU alsowrites that militia men “routinely ignore or misunderstand the limits of their legal authority,” because they “are stopping, interrogating, and searching Americans on an everyday basis with absolutely no suspicion of wrongdoing, and often in ways that our Constitution does not permit.”
Border detention cells in Texas are so overcrowded that U.S. is using aircraft to move migrants - WaPo - Overcrowding at Border Patrol stations in South Texas has become so acute in recent days that U.S. authorities have taken the rare step of using aircraft to relocate migrants to other areas of the border simply to begin processing them, according to three Homeland Security officials.The first flight left McAllen, Tex., on Friday, transferring detainees to Border Patrol facilities in Del Rio, Tex. There are daily flights scheduled for the next several days, with two planned for Tuesday, according to officials who spoke on the condition of anonymity to describe the operations.The flights are conducted by U.S. Immigration and Customs Enforcement, but the detainees remain in the custody of Border Patrol, officials said. Though ICE routinely uses aircraft to move detainees among its detention facilities, it is very unusual for Border Patrol to fly recent arrivals from one part of the border to another to perform routine booking procedures.Homeland Security officials requested the aircraft because Border Patrol urgently needs to move single adults out of the lower Rio Grande Valley of South Texas. The agency is scrambling to make room for the large volume of families and children who have come across the border in dramatically higher numbers in the past several days, officials said. The number of people taken into custody along the Mexico border has exceeded 5,500 each day for several days in a row, and Border Patrol currently has more than 17,500 people in holding cells and tent sites set up in parking lots outside stations, officials said. That is a 30 percent increase from late March, when authorities said border agents and infrastructure had hit the “breaking point." Tents have been set up in the parking lots outside Border Patrol stations in the lower Rio Grande Valley cities of McAllen, Brownsville and Rio Grande City to ease overcrowding. Emergency tents for families also have been erected in El Paso and at Camp Donna, a military site in the Rio Grande Valley. But the sheer volume of people coming across the border in the past several days has swamped the agency’s ability to process families and children, so holding cells are filling with single adults because they are a lesser priority.
Trump To Dump Thousands Of Migrants In Broward, Palm Beach Counties - The Trump administration is about to release hundreds of migrants caught along the southern border into Florida's Broward and Palm Beach counties, according to local officials. According to Broward Mayor Mark Bogen and Palm Beach County Sheriff Ric Bradshaw, there will be two weekly planeloads of immigrants, starting in about two weeks, according to what they were told to expect. The 270 weekly passengers, or just over 1,000 per month, will be split equally between the two counties, according to the Sun-Sentinel. That said, Florida Governor Ron DeSantis (R) along with local members of Congress and Florida's two Republican senators haven't heard a thing about the plan. "The governor’s office was not informed of this decision," said DeSantis' spokeswoman in an email to the Sentinel, adding "Florida counties do not have the resources to accommodate an influx of illegal immigrants." In an afternoon news conference organized after the news broke, Sheriff Bradshaw said the Miami border patrol operations chief “came up” to talk to him about it earlier this week. -Sun-Sentinel Broward Sheriff Gregory Tony also said that he was advised of the plan - however not by Border Patrol, but "by my trusted colleague" Sheriff Bradshaw. The immigrants are families who crossed the border illegally into El Paso, Texas, and who indicated they were Florida-bound, Bradshaw said. They will be processed at U.S. Customs and Border Protection Offices in Dania Beach and in Riviera Beach, and released into the community, expected to return for hearings, he said.The federal government isn’t offering to help, he said.“No accommodations for transportation leaving there. No accommodations for shelter or a place to live. Just no real plan what is going to happen to these people,” Bradshaw said. -Sun-Sentinel Meanwhile, ICE (the federal Immigration and Customs Enforcement agency) will be transporting approximately 225,000 migrant children and families to shelters across the country over the next five years as they await the processing of their asylum claims, according to Fox News. The agency is seeking the services of a "highly responsible" contractor that "fully embraces the philosophy" of humanely treating all unaccompanied minors (UACs) and family units (FAMUs) with "dignity and respect," according to a May 13 federal procurement document. Hopefully it doesn't turn into some giant child exploitation ring.
Trump planning nationwide military round-up of 10,000 immigrants -- The Washington Post reported Tuesday that the Trump administration is considering conducting a nationwide militarized sweep to arrest 10,000 immigrants. Citing seven current and former administration officials, the Post calls it “a secret White House plan to arrest thousands of parents and children in a blitz operation against migrants in 10 major US cities,” including New York, Los Angeles and Chicago. The Post says the remaining target cities are “the other largest destinations for Central America migrants,” which likely includes Washington DC; the San Francisco-Oakland Bay Area in California; Houston, Texas, and Miami, Florida. Such a mass operation would require the deployment of thousands of armed federal police and agents. Units would fan out across working class neighborhoods, storming into immigrants’ homes, grabbing them off the street, seizing them at their jobs or at school, and dispatching them to internment camps to be held for deportation. It would require checkpoints, illegal searches and the deployment of helicopters, paddy wagons and armored assault vehicles. The Post indicates that children as well as parents would be targeted for arrest. The plan would not only constitute the largest immigration raid in US history, it would serve as a dry run for the mass round-up of strikers, protesters and other dissidents. Those planning such a massive operation doubtless conceive of it in this way. Since several of the targeted cities are “sanctuary cities,” where police are not allowed to participate in immigration raids, it is possible that the implementation of the plan would require the deployment of soldiers in working class neighborhoods. Last year, Trump deployed over 5,000 active-duty troops to the US-Mexico border in a clear violation of the principle of posse comitatus, which bars the military from conducting domestic police operations.
Hundreds Of TSA 'Security Ops' Deployed To Southern Border For Immediate Need - The Transportation Security Administration (TSA) is planning to send hundreds of law enforcement officials and as many as "400 people from Security Ops" to the southern border amid efforts to deal with a flood of migrants which are overwhelming current resources, CNN reported Wednesday, citing internal emails leaked to the news agency.The task of the TSA workers, which a source said will include air marshals, will be to assist temporarily with immigration duties. TSA acknowledged in an internal email the "immediate need" comes with the acceptance of "some risk" of depleted resources in aviation security.TSA plans for the deployments to involve up to 175 law enforcement officials and as many as "400 people from Security Ops," according to two sources and the email. At least initially, the efforts will not involve uniformed airport screeners, according to the email, which says that some parts of TSA would be asked to contribute "around 10%" of its workforce. -CNN"There is now immediate need for more help from TSA at the SW border," said Gary Renfrow, a senior TSA official who wrote the email to the agency's regional management. "TSA has committed to support with 400 people from Security Ops" who will be deployed in waves "similar to support for past hurricanes.""We also understand that we are accepting some risk as we enter a very busy summer," he added, calling the effort an "additional challenge." The law enforcement officials will be drawn from six cities, according to a CNN source. A TSA spokesman gave a non-answer: "TSA, like all DHS components, is supporting the DHS effort to address the humanitarian and security crisis at the southwest border. TSA is in the process of soliciting volunteers to support this effort while minimizing operational impact."
Armed Patriots Vow Continued Patrols As Monthly Border Crossings Reach 100,000 - An armed group of citizen patriots patrolling the U.S.-Mexico border in New Mexico have vowed to continue operations to assist Border Patrol despite an eviction from their previous camp. Jim Benvie, spokesman for the newly formed Guardian Patriots, told the Las Cruces Sun News numerous “volunteer patriots” continue to patrol sections of the New Mexico border and work in conjunction with Border Patrol officials, though they’ve moved to a new location on private property. “Nobody who’s been on the border left. There’s been no breakup. Everyone is still here,” Benvie said, disputing media reports that the group had packed up after the arrest of Larry Mitchell Hopkins, the self-proclaimed “commander” of the United Constitutional Patriots New Mexico Border Ops. Hopkins is currently held without bond in Albuquerque on federal weapons charges unrelated to the border activities, according to the news site. Just a few days after the arrest in mid-April, Union Pacific evicted the group from their camp near a border fence that company officials claimed was on railroad property. The fallout followed allegations by the American Civil Liberties Union that the Constitutional Patriots were detaining migrants and children at gunpoint. Benvie denies the allegations, but the controversy resulted in the crowd funding sites PayPal and GoFundMe closing online campaigns for the Constitutional Patriots, so the group relocated to private property and changed its name to Guardian Patriots. But Benvie contends they’re not leaving any time soon.
Trump immigration plan revamps asylum, requires work skills and learning English - President Donald Trump’s new plan to overhaul the immigration system would require immigrants to learn English, create a new visa for highly skilled workers and revamp asylum laws in a push for more merit-based decisions on who is allowed to stay in the country. Trump declared that the number of immigrants would neither increase nor decrease. He announced that his proposal would create a new “Build America Visa” for “extraordinarily talented individuals,” high-skilled professionals and top graduate students from American universities. Democrats immediately denounced the proposal. “Our proposal is pro-American, pro-immigrant and pro-worker,” Trump said on Thursday in the White House Rose Garden. “It’s just common sense. It will help all of our people including millions of devoted immigrants to achieve the American dream.” The Trump immigration proposal touts the “gold standard of border security” and represents an effort to rally Republicans, who are divided on key aspects of this issue. But despite stiff enforcement measures one crucial faction, the immigration hardliners who helped Trump get elected, is already wary about whether they want to remain in the inner circle if this is the starting point. The plan led by Jared Kushner, Trump’s son-in-law and senior advisor, is facing push back from immigration hardliners who are concerned that it does not actually cut immigration levels as had past proposals from the Trump administration. The plan also authorizes Customs and Border Protection to raise customs fees and fines, which will be directed to a fund to support border security and trade. A new biometric entry/exit system would also be implemented and agencies will be directed to stop issuing visas to citizens of recalcitrant countries that will not accept back deported nationals, according to a written summary obtained by McClatchy.
Trump’s immigration plan is an improvement. It’s also an act of political positioning.-- Editorial Board, WaPo - PRESIDENT TRUMP’S proposal to overhaul the legal immigration system by favoring educated, skilled English speakers with strong earnings prospects over relatives of current residents represents an improvement over the administration’s previous bar-the-door approach. It also is an act of political positioning, with no pretense of bipartisan appeal. Advocates describe it as an essential preliminary step before searching for compromise. It’s sensible of Mr. Trump to embrace a major redo of immigration policy that is not mainly about a wall — although the wall remains in his plan — nor about reducing immigration, positions he previously pushed to the delight of nativists in his base. The blueprint attempts to forge a consensus in the Republican Party to continue the flow of legal immigration at current levels. That would be welcome, because immigrants are wellsprings of energy, ambition and pluck who have enriched this country and remain essential to its prosperity. But the initiative omits even passing reference to the reality of 10 million or 11 million undocumented immigrants, many of whom have lived and worked in this country for 15 years or more. They include some 2 million “dreamers” in their teens, 20s and 30s, raised in this country and as thoroughly American in values, outlook and upbringing as any of their native-born neighbors. The White House insists its plan is what Americans want and expect from their government and leaders; in fact, most Americans would hope for a genuine effort at bipartisan compromise. This approach ignores Democratic priorities — and those of a clear majority of Americans who want a legal way forward for dreamers. Senior officials insist it’s an opening bid; Democrats, ignored in the plan’s formulation, understandably have a different view. The plan, developed by the president’s son-in-law and senior adviser, Jared Kushner, would maintain current levels of legal immigration at about 1 million green cards, issued annually for lawful permanent residents. That’s an improvement on Mr. Trump’s embrace two years ago of a plan to slash legal immigration by half over a decade. A subsequent White House proposal, last year, would have resulted in 22 million fewer immigrants over the next 50 years, a 44 percent cut. If Mr. Trump can unite his party behind the new plan, that would represent a welcome rebuff of the restrictionists. But he also would have to shift his rhetoric from describing the United States as “full” and immigrants as dangerous schemers. He would have to stop slandering Democrats as proponents of “open borders.” He would have to embrace and advocate the benefits of immigration.
Trump and Kushner’s ‘merit-based’ immigration plan fails to propose the smart reforms needed to modernize and improve U.S. labor migration – EPI - One of the elements in the Jared Kushner immigration plan detailed by in Donald Trump’s speech on Thursday in the White House Rose Garden would change the proportion of green cards to vastly increase the share issued in the employment-based (EB) preference categories.“Green cards,” as they’re commonly referred to, are immigrant visas that confer lawful permanent resident status on foreign citizens and allow new immigrants to remain in the United States permanently and obtain citizenship after five years. Trump has proposed to change the EB share of the total 1.1 million green cards issued every year from 12 percent to 57 percent and claims it would make the system more “merit-based.” This would be achieved by reducing the numbers of visas allocated based on family ties (66 percent in 2017) and the Diversity Visa lottery (4.6 percent in 2017) and increasing the EB category, and the EB visas would be renamed “Build America Visas” and prioritize advanced education and skills, and rank potential immigrants according to a new points system. Trump also noted that “we’d like to see if we can go higher” than 57 percent.In reality, although only 12 percent of current green cards are allocated for new immigrants arriving with jobs or skills, many of the new green card holders coming to the United States through other categories are also well-educated, including in the family and diversity preferences. And within the EB categories, very few migrants are able to come to the United States as permanent immigrants with a path to citizenship if they work in lower-wage, lesser-skilled occupations. The EB third preference caps the number of “unskilled” workers at 10,000 per year, but not even 50 percent of that cap has been used in the past five years. In other words, the system is already dominated by immigrants with skills and degrees and quite exclusionary towards those without them. We should rethink the system rather than double-down on it. As some commentators and Democratic legislators have noted, the Trump/Kushner proposal is probably “dead on arrival” and unlikely to translate into legislation that can pass the House and Senate, in part because it lacks a proposal for legalizing the 11 million unauthorized immigrants or the subset of them that are protected by DACA and TPS. Nevertheless, it is worth examining because Trump is using the broadly-outlined plan devised by his son-in-law as a platform to unite the Republican party on immigration and show that they are “for” something on immigration, and not just against every conceivable type of immigration.
Appeals Court Rules Against White House In Latest DACA Decision - When the White House unveiled President Trump's new immigration plan earlier this week, Sarah Sanders said the issue of DACA was left unaddressed because it's just too controversial. Better to leave that one to the Supreme Court and see where the chips fall. Not two days later, a federal appeals court in Virginia has ruled against the Trump administration, upholding an earlier determination that Trump's attempt to rescind DACA protections was unlawful because "it was not adequately explained." More from the Hill:A split federal appeals court on Friday ruled that President Trump’s decision to rescind the Deferred Action for Childhood Arrivals (DACA) program was unlawful because "it was not adequately explained."The 4th Circuit Court of Appeals in Virginia found that the administration's termination of the program was "arbitrary and capricious," in line with a prior ruling from the 9th Circuit Court of Appeals The ruling comes as the legal battle over the termination of DACA continues. The Supreme Court is weighing whether to hear several cases over the end of the program.
Trump Cancels $929 Million For California's High-Speed Rail Quagmire - The Trump administration has officially pulled a $929 million federal grant to the California High-Speed Rail Authority after terminating a 2010 agreement. In a release, the Federal Railroad Association - a component of the US Department of Transportation - said that California's rail authority "repeatedly failed to comply with the terms of the FY10 agreement and has failed to make reasonable progress on the project. Additionally, California has abandoned its original vision of a high-speed passenger rail service connecting San Francisco and Los Angeles, which was essential to its applications for FRA grant funding," according to CNBC. The FRA added that it "continues to consider all options regarding the return of $2.5 billion in American Recovery and Reinvestment Act funds awarded to CHSRA." President Trump in February called for California to return $3.5 billion in federal funds given to the state for the failed high-speed rail line planned between San Francisco and Los Angeles. The $929 million in grant funds awarded to the state had not yet been paid out. Trump’s call for the return of money followed Democratic California Gov. Gavin Newsom at his first state of the state address on Feb. 12 announcing a reeling in of the state’s high-speed rail project, saying the current plan “would cost too much and take too long.” He added, “There simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA.” –CNBC In a Thursday statement, Newsom said "The Trump administration’s action is illegal and a direct assault on California, our green infrastructure, and the thousands of Central Valley workers who are building this project," adding "Just as we have seen from the Trump administration’s attacks on our clean air standards, our immigrant communities and in countless other areas, the Trump administration is trying to exact political retribution on our state. This is California’s money, appropriated by Congress, and we will vigorously defend it in court."
Lobbyists Working to Undermine Medicare For All Host Congressional at Luxury Resort - AT A LUXURY RESORT just outside of the nation’s capital last month, around four dozen senior congressional staffers decamped for a weekend of relaxation and discussion at Salamander Resort & Spa. It was an opportunity for Democrats and Republicans to come together and listen to live music from the Trailer Grass Orchestra, sip surprisingly impressive glasses of Virginia wine — and hear from health care lobbyists focused on defeating Medicare for All. The event was hosted by a group called Center Forward and featured a lecture from industry lobbyists leading the charge on undermining progressive health care proposals. Center Forward was originally known as the Blue Dog Research Forum, a think tank affiliated with the conservative Blue Dog Coalition of House Democrats; the coalition has pressed the caucus to oppose social welfare spending, taxes on the wealthy, and regulations on business.The organization’s website is filled with bromides about giving “centrist allies the information they need to craft common sense solutions” that paper over an agenda designed to enrich powerful corporations.Center Forward’s big idea on Medicare Part D, for instance, is to maintain lobbyist-authored provisions of the law that bar the government from bargaining for lower prices for medicine. Such restrictions cost taxpayers and patients as much as $73 billion a year while boosting the profits of drugmakers. Center Forward endorses the idea with a testimonial from Mary Grealy, a lobbyist for a trade group that represents pharmaceutical companies.The retreat, held the weekend of April 5-7 in Middleburg, Virginia, continued Center Forward’s approach. The schedule shows that the health care discussion was led by Center Forward board member Liz Greer, a lobbyist at Forbes Tate; the firm manages the Partnership for America’s Health Care Future coalition designed to undermine Medicare-for-All. Paul Kidwell, a lobbyist from the Federation of American Hospitals, and Larry Levitt, from the Kaiser Family Foundation, also spoke. No proponents of Medicare-for-All were included.
More than one million Americans lost health insurance in 2018 - Estimates from a Centers for Disease Control (CDC) survey reveal that 1.1 million people lost their health insurance coverage in 2018. Last year, over 30 million people did not have health insurance at the time of the study, including 13.3 percent of adults aged 18 to 64 and 5.2 percent of children aged 0 to 17. After decreasing or leveling off in past years, the number of uninsured is on the rise. The National Health Interview Survey, a nationally representative study, asked participants about both their current health insurance status and whether they have had health insurance in the past year. The report’s results are presented by income status, demographics, and by states that opted or refrained to expand Medicaid under Obamacare. As with other basic necessities, the ability to afford healthcare is deeply connected to income. In 2018, among adults aged 18 to 64, more than 27 percent of those who were “poor” (with family incomes at or below the poverty line) and about 25 percent of those who were “near-poor” (with family incomes between 100 and 200 percent of the poverty line) did not have health insurance. Meanwhile, only about 8 percent of those who were “not poor” (with family incomes over 200 percent the poverty line or higher) were uninsured. This means that poor or near-poor were more than three times as likely to be uninsured than the non-poor. For all age groups, the percentage uninsured at the time of the interview and the percentage uninsured for at least part of the year increased from 2017 to 2018. Some 9.4 percent of individuals lacked health insurance coverage at the time of their interview in 2018, compared to 9.1 percent in 2017. More than one in ten individuals reported being uninsured for at least part of the year, with this group also increasing from 2017 to 2018. Some 12.9 percent of individuals of all ages reported being uninsured in 2018, while this figure was 12.4 percent in 2017. This means that over 40 million people were uninsured for at least part of the year in 2018. In 2018, 6 million children aged 0 to 17 did not have healthcare coverage for at least part of the year, and 3.8 million were not insured at the time of the interview. Children who are poor or near-poor were more than 50 percent as likely as children who were not poor to be uninsured. In 2018, 6.4 percent of poor children did not have health insurance at the time of the interview, compared to 6.3 percent for near-poor children and 4.2 percent for non-poor children.
Ocasio-Cortez confronts CEO for nearly $2K price tag on HIV drug that costs $8 in Australia - Rep. Alexandria Ocasio-Cortez (D-N.Y.) confronted a CEO Thursday for pricing a drug designed to reduce the risk of HIV transmission at $8 in Australia but over $1,500 in the U.S. "You're the CEO of Gilead. Is it true that Gilead made $3 billion in profits from Truvada in 2018?" Ocasio-Cortez asked Gilead CEO Daniel O'Day. "$3 billion in revenue," he clarified. "The current list price is $2,000 a month in the United States, correct?" she asked, referring to Truvada. "It's $1,780 in the United States," O'Day responded. "Why is it $8 in Australia?" Ocasio-Cortez countered. "Truvada still has patent protection in the United States and in the rest of the world it is generic," O'Day explained, adding, "It will be generically available in the United States as of September 2020." "I think it's important here that we notice that we the public, we the people, developed this drug. We paid for this drug, we lead and developed all the patents to create Prep and then that patent has been privatized despite the fact that the patent is owned by the public, who refused to enforce it," Ocasio-Cortez said. “There’s no reason this should be $2,000 a month. People are dying because of it and there’s no enforceable reason for it.”
Trump wants to change how poverty is calculated — to make fewer people eligible for benefits The Trump administration has been incredibly consistent, from day one, about its desire to slash benefits for poor Americans, including Medicaid and food stamps (aka Supplemental Nutrition Assistance Program or SNAP). But with the threat of Democratic filibusters and now a Democratic majority in the House, Trump’s efforts to make those cuts a reality have been repeatedly stymied.That hasn’t stopped the administration from coming up with new attempts, and the latest is subtle but profound: changing the inflation rate used to update the poverty line.That might sound like a merely technical change. It’s not.The poverty line is used to determine eligibility for a wide array of government programs. The change the administration is proposing would, over the course of many years, shrink the size of Medicaid, food stamps, free school breakfasts, Head Start, and many, many other programs. To be clear, the administration could certainly change the inflation measure in a way that makes more people eligible — but given its calls for spending cuts, it appears likely it’ll pick a measure that reduces eligibility. It would not be a big change at first. In its first few years, the policy wouldn’t save much money or affect many people. But make no mistake: seen in the context of the Republican Party’s priorities, this is effectively a cut to government programs. If you think we don’t do enough to provide health care and food assistance to the poor, it’s a bad deal.
Matt Taibbi- The Beginning Of The End Of American Journalism Was The Lewinski Scandal - American journalist Matt Taibbi has said that the American press began its rapid decline during the Monica Lewinsky scandal that rocked Bill Clinton during his presidency. The mainstream media is no longer even attempting to portray objectivity, but simply “packaging anger” for the brainwashed American public. In a new “On Contact” episode, host Chris Hedges and Taibbi dive into the roots of the decay of journalism in the United States, which preys on prejudices and fear while pitting people against each other and paving the way for demagogues. According to RT, Taibbi says this all started back when Bill Clinton was president.From Monica Lewinski to Hillary Clinton, the coverage of major news stories by the U.S. media has grown increasingly strident, with cable channels no longer trying to project a picture of objectivity but “selling a story that makes people angry,” Taibbi, an award-winning journalist, and author says.Taibbi says that the result of this journalistic decay and emotional fear mongering is a public addicted to hating each other. Americans have become addicted to the news that agrees with their bias, and it was set up that way on purpose. The only thing anyone will hear when they turn on the news are stories specifically crafted to manufacture outrage, make you hate the other side, and fuel the addiction to anger.Taibbi is the author of Hate Inc: Why Today’s Media Makes Us Despise One Another.In this characteristically turbocharged new book, celebrated Rolling Stone journalist Matt Taibbi provides an insider’s guide to the variety of ways today’s mainstream media tells us lies. Part tirade, part confessional, it reveals that what most people think of as “the news” is, in fact, a twisted wing of the entertainment business.Heading into a 2020 election season that promises to be a Great Giza Pyramid Complex of invective and digital ugliness, Hate Inc. will be an invaluable antidote to the hidden poisons dished up by those we rely on to tell us what is happening in the world. –Hate Inc. description, Amazon
White House Rolls Out Website To Report Silicon Valley Censorship --The White House has launched a new tool for people to use if they feel they have been unfairly discriminated against over social media. The Trump Administration is fighting for free speech online. No matter your views, if you suspect political bias has caused you to be censored or silenced online, we want to hear about it! https://t.co/9lc0cqUhuf pic.twitter.com/J8ICbx42dz— The White House (@WhiteHouse) May 15, 2019Those who feel they have been wrongly banned, censored or suspended on platforms such as Facebook or Twitter can go to "wh.gov/techbias" where the following mesage will greet them: “SOCIAL MEDIA PLATFORMS should advance FREEDOM OF SPEECH. Yet too many Americans have seen their accounts suspended, banned, or fraudulently reported for unclear “violations” of user policies. No matter your views, if you suspect political bias caused such an action to be taken against you, share your story with President Trump." The idea was immediately supported by Twitter alternative Gab.com, which tweeted: "Excellent, we will email our ~1m users and get you a very large set of data."
Co-founder Chris Hughes calls for government break-up of Facebook - Calls for government regulation of the big technology corporations have escalated in Washington and the corporate media following the New York Times’ May 9 publication of an op-ed by Facebook co-founder Chris Hughes calling for a breakup of the company. These demands are driven not by opposition to monopolies, but by a desire to more effectively censor left-wing oppositional views on the internet.Hughes, who is reported to have a personal wealth of $430 million, founded Facebook along with current company CEO Mark Zuckerberg and several others in 2004, while they were students at Harvard University. Hughes left the company in 2007 to become a volunteer in the presidential campaign of Barack Obama. He has since bought and sold a majority stake in the New Republic magazine and is currently co-chairman of the Democratic Party think tanks Economic Security Project and The Roosevelt Institute.In his comment in the New York Times, Hughes argues that his former company “has grown too big and too powerful” and that the US government needs to “break up Facebook’s monopoly and regulate the company.” A new government agency, Hughes writes, must be “empowered by Congress to regulate tech companies” In the course of describing the development of Facebook’s dominance of social media markets, Hughes blames Mark Zuckerberg for his “unchecked power” and “staggering” influence. Due to the fact that Zuckerberg controls 60 percent of the company’s voting shares, Hughes writes, “Mark alone can decide how to configure Facebook’s algorithms to determine what people see in their News Feeds, what privacy settings they can use and even which messages get delivered.”White House Won't Sign Global Pact To 'Combat Extremism' Due To 1st Amendment Concerns -- The White House said on Wednesday that while it stands by the international community in "condemning terrorist and violent extremist content online," that it is "not currently in a position" to join a call to action in the name of the Christchurch shootings, spearheaded by New Zealand Prime Minister Jacinda Ardern and French President Emmanuel Macron."The United States stands with the international community in condemning terrorist and violent extremist content online in the strongest terms," the White House said in a statement, adding that it's "not currently in a position to join the endorsement," citing First Amendment concerns, and adding that "the best tool to defeat terrorist speech is productive speech." "We continue to be proactive in our efforts to counter terrorist content online while also continuing to respect freedom of expression and freedom of the press," the statement continued. Later in the day, the White House tweeted that the administration is "fighting for free speech online," while sharing a link to a government website where people can share their experiences with tech bias and censorship. Those who have joined the pact include the United Kingdom, Canada, Japan, Australia, Italy, India, German and Spain - while technology firms including Google, Amazon, Facebook, Twitter and YouTube are participating as well.
Facebook Co-Founder Doubles Down: Zuckerberg Has “Near Unilateral Power”— The co-founder of Facebook has stepped up his attack on Mark Zuckerberg just days after calling on the United States government to break up Facebook, according to Bloomberg. Chris Hughes, 35, who started Facebook with Zuckerberg said in an interview to CNN: “Zuckerberg has too much power — near-unilateral power. We all make mistakes, but I think that in his case it is different because there is no accountability for those mistakes.” Hughes – perhaps in a bid to stay relevant, perhaps with altruistic intentions – has wound up in the center of a debate about how the government should regulate the social media company after writing a May 9 op-ed in the New York Times calling Facebook a monopoly that “never should have been allowed to buy a Instagram and WhatsApp.” The Federal Trade Commission is already expected to fine the company as much as $5 billion as part of a settlement over letting Cambridge Analytica obtain data on millions of users without consent. During a recent interview with CNN, Hughes said that issues at Facebook are far deeper than any one individual scandal. He said that a lack of accountability from Mark Zuckerberg and a board that is unable to institute any checks and balances are both to blame. He continued: “Mark’s the CEO, there is a board but because he owns 60 percent of the voting shares he’s not accountable really to that board.
FT Agrees With Hughes, Says US Must Break Up Facebook 'Monopoly' In Editorial - Europe and the UK have been much more proactive in trying to hold tech giants accountable than the US, which probably has something to do with the fact that most of these companies are American firms. So it's hardly a surprise that an editorial written by Facebook co-founder Chris Hughes, Mark Zuckerberg's former college roommate, resonated more on the other side of the pond.In an editorial published by the FT, perhaps Europe's most venerable financial news publication, the paper argued that European capitals must lead the charge, but that ultimately, the US must wake up and start regulating.Facebook’s chief executive Mark Zuckerberg recently called for the US government to be more proactive in regulating social media. His former dorm mate Chris Hughes went a step further last week. Mr Hughes wants to break up the social network he co-founded. The controversies surrounding Facebook point to a broader need for a new competition law. At a time when governments in Europe are already moving against Big Tech’s excesses, the US should take the chance to reform its own outdated rules. In his article, Mr Hughes excoriates Mr Zuckerberg for chasing profits over user security. The Facebook co-founder is alarmed by Mr Zuckerberg’s ability to decide what millions of people read via the network. Mr Hughes goes on to criticise the US government for its relative inaction, emphasising that fining Facebook or instituting new privacy rules is insufficient. In calling for the company to be broken up, Mr Hughes rejects the school of competition law dominant in the US since the 1980s.This views pricing as the only metric for assessing competition. Such a narrow focus collapses when applied to Facebook and other Big Tech firms, which provide services for “free” in return for taking users’ data, rather than their cash. Of all the tech giants, Facebook should be one of the first of the oligopolies to be dealt with, because - like Hughes alleged - CEO Mark Zuckerberg has tremendous influence over what billions of consumers see and read, and his control of three of the world's most popular platforms gives FB unprecedented scope to monetize user data by considering data across the platforms.
Twitter Admits To ‘Inadvertently’ Collecting, Sharing Location Data Due To “Bug” - In a blog post, the company admitted: “We have discovered that we were inadvertently collecting and sharing iOS location data with one of our trusted partners in certain circumstances,” adding “Specifically, if you used more than one account on Twitter for iOS and opted into using the precise location feature in one account, we may have accidentally collected location data when you were using any other account(s) on that same device for which you had not turned on the precise location feature.”Separately, we had intended to remove location data from the fields sent to a trusted partner during an advertising process known as real-time bidding. This removal of location did not happen as planned. However, we had implemented technical measures to “fuzz” the data shared so that it was no more precise than zip code or city (5km squared). This location data could not be used to determine an address or to map your precise movements. The partner did not receive data such as your Twitter handle or other unique account IDs that could have compromised your identity on Twitter. This means that for people using Twitter for iOS who we inadvertently collected location information from, we may also have shared that information with a trusted advertising partner. –TwitterTwitter says that the location data was not retained by the trusted partner, and that it only existed in their systems for a short period of time before it was deleted as part of their normal process. The company reports that it has fixed the problem and will work to ensure that it doesn’t happen again.
Millions of people uploaded photos to the Ever app. Then the company used them to develop facial recognition tools. - NBC— Everything about Ever’s branding is warm and fuzzy, about sharing your “best moments” while freeing up space on your phone. What isn’t obvious on Ever’s website or app — except for a brief reference that was added to the privacy policy after NBC News reached out to the company in April — is that the photos people share are used to train the company’s facial recognition system, and that Ever then offers to sell that technology to private companies, law enforcement and the military. In other words, what began in 2013 as another cloud storage app has pivoted toward a far more lucrative business known as Ever AI — without telling the app’s millions of users. “This looks like an egregious violation of people’s privacy,” said Jacob Snow, a technology and civil liberties attorney at the American Civil Liberties Union of Northern California. “They are taking images of people’s families, photos from a private photo app, and using it to build surveillance technology. That’s hugely concerning.” Doug Aley, Ever’s CEO, told NBC News that Ever AI does not share the photos or any identifying information about users with its facial recognition customers. Rather, the billions of images are used to instruct an algorithm how to identify faces. Every time Ever users enable facial recognition on their photos to group together images of the same people, Ever’s facial recognition technology learns from the matches and trains itself. That knowledge, in turn, powers the company’s commercial facial recognition products.There are many companies that offer facial recognition products and services, including Amazon, Microsoft and FaceFirst. Those companies all need access to enormous databases of photos to improve the accuracy of their matching technology. But while most facial recognition algorithms are trained on well-established, publicly circulating datasets — some of which have also faced criticism for taking people’s photos without their explicit consent— Ever is different in using its own customers’ photos to improve its commercial technology.
Trump seeks to limit judges’ powers on injunctions after legal blows - President Trump is looking to stop lower courts from being able to issue wide-ranging injunctions in a move that could dramatically limit the authority of judges. The plan comes as groups opposed to Trump have been able to get several of his policies, including those seeking to limit immigration, put on hold by nationwide orders issued by lower courts in battles that were eventually decided by the Supreme Court. Advocacy groups that have pushed judges to issue nationwide injunctions say they are necessary to protect people from policies they see as harmful, and some legal experts agree, arguing that the right to issue such actions is protected under the Constitution. But opponents argue that injunctions should be applied more narrowly to groups that are directly impacted, saying the more liberal use of injunctions is hurting the judicial system. Vice President Pence this week brought the issue front and center, saying in a speech to the conservative Federalist Society that the administration has been “unfairly” targeted by injunctions — and promising to unveil in coming days pathways to put the issue before the Supreme Court. Pursuing an end to nationwide injunctions would mark the latest attempt by President Trump to shape the federal courts after getting two Supreme Court justices confirmed and more than 100 of his judicial picks installed by the Senate. Trump opponents have argued that nationwide injunctions are necessary to protect people who may not be part of a lawsuit but would nonetheless be impacted by a particular policy or legislation.
Trump says he reported $1.17 billion in losses over 10 years to evade paying taxes - A New York Times exposé published last Wednesday featured an analysis of the tax returns of President Donald Trump between 1985 and 1994. Over this 10-year period, Trump reported $1.17 billion in losses, a sufficiently high amount to legally except Trump from paying income taxes for eight of those 10 years. The Times reporters were able to piece together the data from information in Trump’s tax returns that was provided by a source, who, according to the newspaper, had legal access to the information. They then found matching results in an Internal Revenue Service (IRS) public database providing information on top earners. Last week’s article follows a Times exposé published last October that focused on the tax-dodging machinations of the Trump business under Donald Trump’s father, Fred C. Trump. Donald Trump had blamed the 1990 recession for a series of reversals and bankruptcies that hit his business empire in the early 90’s. However, it now is evident that he had incurred significant losses well beforehand. In 1985, Trump reported $46.1 million in losses. These mainly stemmed from his casinos, hotels and retail business. Every subsequent year, he lost more money than almost every other individual taxpayer in the US. His losses in 1990 and 1991, over $250 million each year, were more than double the losses of the nearest taxpayers in the top earner category. The report provides insight into Trump’s main sources of income over this period. There were large winnings on the stock market, a $67.1 million salary earned one year, and $52.9 million in windfall profits. Each year, however, his losses vastly outweighed his earnings—meaning that most of his income was not taxed at all. Trump’s earnings on the stock market underscore the corrupt and unstable character of the financial parasitism that developed during the 1980s, culminating in the 2008 financial meltdown and continuing unabated today. Between 1986 and 1988, while his core businesses remained deep in the red, Trump made millions by making a pretense of planning the takeover of companies. By the end of 1988, however, his gains plummeted as most investors realized it was idle talk.
'If Mnuchin Doesn't Comply, Throw Him in Jail': House Democrats Subpoena Trump Tax Returns --After Treasury Secretary Steve Mnuchin repeatedly refused to comply with requests to hand over President Donald Trump's tax returns—which some legal experts say is clearly required under federal law—the House Ways and Means Committee late Friday subpoenaed both Mnuchin and IRS Commissioner Charles Rettig for the documents."The IRS is under a mandatory obligation to provide the information requested," states the subpoena. "The IRS has had more than four weeks to comply with the committee's straightforward request. Therefore, please see the enclosed subpoena."Stand Up America, a progressive advocacy group that has been pressuring House Democrats to subpoena Trump's tax returns, applauded House Ways and Means Chairman Rep. Richard Neal (D-Mass.) for taking action Friday night after the White House "illegally blocked" his initial request."The American people deserve the truth about Trump's deeply concerning conflicts of interest and his profiting from the presidency—and Congress is one step closer to delivering those answers," Stand Up America founder and president Sean Eldridge said in a statement. "Compliance is not optional," Eldridge added. "If Secretary Mnuchin fails to comply with these subpoenas, Chairman Neal has no option but to hold him in contempt of Congress and take them to court."
The dangerous precedent of Congress demanding Trump’s tax returns - Does Congress have unlimited authority to look at the tax returns of President Trump — or anyone else? The White House and House Democrats are on a collision course to find out. This may not end up being the most existential of the wars between Trump and his opponents in Congress, but it could be the most precedential for all Americans.This battle has been in the making for some time, both legally and politically. As early as the Republican primary debates for the 2016 nomination, Trump agreed to publicly release his tax returns, a tradition for presidential candidates that goes back to Richard Nixon. Eventually Trump reneged on his promise and declared that continuing IRS audits made it impossible to release the returns. Democrats (and some Republicans) pilloried Trump for the break with tradition, but in the end it didn't matter: Trump won the election without releasing his returns and has steadfastly refused to release them since, making them something of a Holy Grail for his opponents. On Tuesday, The New York Times reported that it had obtained tax information demonstrating massive losses by Trump's businesses between 1985 and 1994. However, this is unlikely to appease the Democrats. When they took control of the House in last year's midterms, they promised to demand access to Trump's returns to uncover whatever else the president might be hiding. House Ways and Means Committee chair Rep. Richard Neal (D-Mass.) has what would appear to be plenary authority to personally review the tax returns of any American, thanks to 26 USC 6103(f), a law regarding "confidentiality and disclosure of returns and return information." Neal demanded the Treasury Department produce Trump's tax returns, and set multiple deadlines. On Monday, Treasury Secretary Steven Mnuchin issued a firm refusal, one that will require the courts to parse out both the meaning of the law in question, and precedents regarding the extent to which Congress can access private data. "In reliance on the advice of the Department of Justice," Mnuchin wrote to Neal, "I have determined that the committee's request lacks a legitimate legislative purpose."
Trump’s Tax Records Are Irrelevant, Fellow Developer Sam Zell Says - Billionaire investor Sam Zell dismissed President Donald Trump’s tax records as irrelevant, saying that as a fellow real estate developer in the 1980s and ’90s, he used some of the same deductions to report losses. “Absolutely, as did every other real estate investor in the United States,” Zell said in an interview on Bloomberg Television from the SALT conference in Las Vegas. Trump’s tax returns “don’t tell much of a picture” about the success of his business, and following the cash flow would be more relevant, Zell said. Macklowe’s Tax-Free Decades Show It’s Good to Be a NYC Developer “For a real estate guy to have huge deductions, who owns a lot of brick-and-mortar, is not unusual,” he said. Trump’s businesses generated huge losses, and his hotel and casino properties were eligible for large depreciation write-offs that meant he paid taxes for only two years between 1985 and 1994, according to tax records obtained by the New York Times. Trump racked up $1.17 billion worth of losses in that time, according to the documents.
Dems warn of ‘constitutional crisis’ but wary of impeachment - A growing number of leading Democrats are sounding alarm bells, declaring that the U.S. is facing a "constitutional crisis" worse than the Watergate scandal that forced former President Nixon out of office. Despite the ominous terms Democrats are using to describe the current impasse, they’re not moving any faster toward the same remedy the House turned to with Nixon over Watergate: impeachment. Speaker Nancy Pelosi (D-Calif.) agreed with House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) this week in calling the clash with President Trump and his associates stonewalling their investigations a "constitutional crisis." And House Majority Whip James Clyburn (D-S.C.) said that "this is bigger than Watergate." "In many ways, this is more serious than Watergate," House Intelligence Committee Chairman Adam Schiff (D-Calif.) echoed at a Friday event hosted by Axios. And House Majority Leader Steny Hoyer (D-Md.) described the Trump administration’s blanket refusal to cooperate with their probes as "perhaps the greatest cover-up of any president in American history." Pelosi said the "constitutional crisis" isn’t grounds at this point to launch impeachment proceedings against Trump before committees gather evidence and make a public case. She noted that in Nixon’s case, it took months of hearings and investigations "before they got to a place where they had enough" to even convince Republicans the president had to go.
We Already Passed a Constitutional Crisis into Presidential Autocracy - I don’t think we have entered a constitutional crisis. I think for all intents and purposes we are already past it, because of the ineffectual response to Trump’s autocratic behavior.On February 15, he brazenly abrogated Congress’s appropriations power with this diversion of funds for his “border wall.” Presidential Proclamation on Declaring a National Emergency Concerning the Southern Border.On March 15, he vetoed Congress’s downvote of that emergency. Trump Issues First Veto After Congress Rejects Border Emergency.On March 26, the House failed to override Trump’s veto: House fails to override Trump veto on Southern Border Emergency.The House did not file suit until April 5. It requested an injunction to stop the President from acting unilaterally. SCOTUS did not “fast-track” the request for injunction. Trump responded to the House’s request last week asking the court to reject the House Lawsuit. Trump Administration Urges Judge to Reject House Lawsuit on Border Wall.We are now three months past the emergency declaration and action to stop Trump is on the proverbial slow boat to China. By the time the Supreme Court rules, the 2020 election will probably have already passed.So, tell me, exactly why should any President whose party controls at least 1/3 of either House of Congress simply bypass any Congressional opposition to anything by declaring states of emergency? Future democratic Presidents might still refrain from doing so, but it is crystal clear to me that, the precedent having been set, future GOP Presidents will pursue this route at will. Such actions are what makes up an autocracy.
Pelosi and Biden: Desperate Times Call For Faint Measures --Nancy Pelosi says that the United States is in a “constitutional crisis,” that White House officials have “decided that they are not going to honor their oath of office,” and that Donald Trump is an aspiring autocrat who might well refuse to relinquish the presidency even if he loses next year’s election. Which is why, in the speaker’s view, Democrats must avoid checking the president’s power too aggressively.Joe Biden says that Donald Trump represents an unprecedented threat to our republic’s bedrock values — and that, if Trump wins a second term, congressional Republicans will allow their standard-bearer to “forever and fundamentally alter the character of this nation,” not least by destroying “our very democracy.”Which is why, in the 2020 frontrunner’s opinion, Democrats must neither give up on bipartisanship, nor forfeit their faith in the fundamental decency of congressional Republicans. Pelosi and Biden’s positions are a bit less absurd than they sound. But they also could not be more antithetical to the consensus view among liberal intellectuals, blue-state back-benchers, and progressive 2020 candidates — which holds that solving our democracy’s present crisis requires waging total war on the Republican president and his party. For this reason, the most divisive question in the Democratic Party today may be, “Do desperate times call for milquetoast measures?”
Russiagate: Law in the Service of Partisan Politics - National Review - Russiagate has always been a political narrative masquerading as a federal investigation. Its objective, plain and simple, has been twofold: first, to hamstring Donald Trump’s capacity to press the agenda on which he ran (immigration enforcement, conservative judicial nominees, deregulation, and a military build-up, along with skepticism about military interventions, free trade, and NATO); and ultimately, to render him unelectable come autumn 2020. That’s it. That’s what FBI agent Peter Strzok so aptly called the “insurance policy.” Yes, of course, if some grievous misconduct had emerged, something so egregious that Beltway Republicans could chance the wrath of the Trump base by hopping aboard the impeachment train, Democrats might take a shot at removing the president. But that, as they say in the Green New Deal biz, was just “aspirational.” The real work in the here and now is hardball politics: Hem Trump in. Politicize the intelligence and law-enforcement apparatus. Signal to the public through intelligence leaks and suggestive official public statements that the president was suspected of conspiring with the Kremlin. Convince Trump that using the presidency’s arsenal to fight back would just bolster the obstruction case against him. Sic a special counsel on him if he lashed out anyway. Use the investigation as a rationale for slow-walking Trump nominees and for refusing to deal with him on such critical issues as border enforcement. Drive his numbers down. It’s working. This is an exquisitely planned political campaign.
Russiagate Zealotry Continues to Endanger American National Security - Stephen Cohen -Now in its third year, Russiagate is the worst, most corrosive, and most fraudulent political scandal in modern American history. It rests on two related core allegations: that Russian President Vladimir Putin ordered an “attack on American democracy” during the 2016 presidential campaign in order to put Donald Trump in the White House, and that Trump and his associates willfully colluded, or conspired, in this Kremlin “attack.” As I have argued from the outset—see my regular commentaries posted atTheNation.com and my recent book War With Russia?—and as recently confirmed, explicitly and tacitly, by special prosecutor Robert Mueller’s report, there is no factual evidence for either allegation. Nonetheless, these Russiagate allegations, not “Putin’s Russia,” continue to inflict grave damage on fundamental institutions of American democracy. They impugn the integrity of the presidency and now the office of the attorney general. They degrade the many Democratic members of Congress who persist in clinging to the allegations and thus the Democratic Party and Congress. And they have enticed mainstream media into one of the worst episodes of journalistic malpractice in modern times. But equally alarming, Russiagate continues to endanger American national security by depriving a US president, for the first time in the nuclear age, of the diplomatic flexibility to deal with a Kremlin leader in times of crisis. We were given a vivid example in July 2018, when Trump held a summit with the current Kremlin occupant, as every president had done since Dwight Eisenhower. For that conventional, even necessary, act of diplomacy, Trump was widely accused of treasonous behavior, a charge that persists. Now we have another alarming example of this reckless disregard for US national security on the part of Russiagate zealots. On May 3, Trump called Putin. They discussed various issues, including the Mueller report. (As before, Putin had to know if Trump was free to implement any acts of security cooperation they might agree on. Indeed, the Russian policy elite openly debates this question, many of its members having decided that Trump cannot cooperate with Russia no matter his intentions.) A major subject of the conversation was unavoidably the growing conflict over Venezuela, where Washington and Moscow have long-standing economic and political interests. To the extent, however remote, that Venezuela might grow into a Cuba-like US-Russian military confrontation, would Trump be sufficiently free of Russiagate allegations to resolve it peacefully, as President John Kennedy did in 1962? Judging by mainstream media commentary on the May 3 phone conversation, the answer seems to be no.
Russia Has Americans’ Weaknesses All Figured Out - What are Americans supposed to think when their leaders contradict one another on the most basic question of national security—who is the enemy? This is happening every day on the floors of the House and the Senate, in committee hearing rooms, on television news programs, and in President Donald Trump’s Twitter feed. Is Russia the enemy, or was the investigation of Russia’s interference in the 2016 election just a slow-motion attack on the president and his supporters? Are Russian fake-news troll farms stirring up resentment among the American electorate, or are mainstream-media outlets just making things up?U.S. military commanders, national-security officials, and intelligence analysts have a definitive answer: Russia is an enemy. It is taking aggressive action right now, from cyberspace to outer space, and all around the world, against the United States and its allies. But the public has been slow to catch on, polls suggest, and Trump has given Americans little reason to believe that their president recognizes Russia’s recent actions as a threat. All the uncertainty is part of Vladimir Putin’s plan. America’s confusion is both a product and a principal goal of a qualitatively new kind of warfare that the Kremlin is waging—a campaign that systematically targets a democratic but politically divided society whose economy, media environment, and voting systems all depend on vulnerable electronic technologies. The essence of this strategy is to attack U.S. interests just below the threshold that would prompt a military response and then, over time, to stretch that threshold further and further. The purpose of this shadow war is simple: to create what Russian General Valery Gerasimov has called “a permanent front through the entire territory of the enemy state.”
No Democrats have read the less-redacted Mueller report. But five Republicans have.None of the six Democrats who have been provided access to a less-redacted version of special counsel Robert Mueller's report have gone to the Justice Department to read it, according to a source familiar with the matter. Republicans and the Justice Department have criticized Democrats for not at least reading the less-redacted version of the report released to lawmakers while they negotiate over access to the fully unredacted report and underlying materials. Senate Majority Leader Mitch McConnell, Senate Intelligence Chairman Richard Burr and Senate Judiciary Chairman Lindsey Graham have read it, along with House Minority Leader Kevin McCarthy and Rep. Doug Collins, the top Republican on the Judiciary Committee, have seen it, according to the source, while House Intelligence ranking member Devin Nunes has not. The Justice Department offered 12 congressional leaders -- party leaders and the heads of the Judiciary and Intelligence Committees -- and a staff member each the ability to view a version of the Mueller report that only contained redactions of grand jury material, which the Justice Department has argued it is prohibited by law from sharing without a court order. That version of the report contains material that was redacted in the public report because it was classified, connected to ongoing investigations or contained information about peripheral third parties. But Democrats rejected that proposal from the Justice Department in their quest to obtain the full, unredacted Mueller report and the special counsel's underlying evidence. They argued they should be allowed to read the full report, with grand jury material, and they also objected to the fact that only the six congressional leaders from each party can read the less-redacted report, pushing for the full Intelligence and Judiciary Committees to be allowed to read it.
The Real Mueller-Gate Scandal - Craig Murray --Robert Mueller is either a fool, or deeply corrupt. I do not think he is a fool.I did not comment instantly on the Mueller Report as I was so shocked by it, I have been waiting to see if any other facts come to light in justification. Nothing has. I limit myself here to that area of which I have personal knowledge – the leak of DNC and Podesta emails to Wikileaks. On the wider question of the corrupt Russian 1% having business dealings with the corrupt Western 1%, all I have to say is that if you believe that is limited in the USA by party political boundaries, you are a fool.On the DNC leak, Mueller started with the prejudice that it was “the Russians” and he deliberately and systematically excluded from evidence anything that contradicted that view.Mueller, as a matter of determined policy, omitted key steps which any honest investigator would undertake. He did not commission any forensic examination of the DNC servers. He did not interview Bill Binney. He did not interview Julian Assange. His failure to do any of those obvious things renders his report worthless. There has never been, by any US law enforcement or security service body, a forensic examination of the DNC servers, despite the fact that the claim those servers were hacked is the very heart of the entire investigation. Instead, the security services simply accepted the “evidence” provided by the DNC’s own IT security consultants, Crowdstrike, a company which is politically aligned to the Clintons.
What happened to the Trump counterintelligence investigation? House investigators don’t know. -- A few weeks before he was fired by President Trump in May 2017, then-FBI Director James Comey testified before the House Intelligence Committee. During that testimony, he confirmed something that had already been reported. “I have been authorized by the Department of Justice to confirm that the FBI, as part of our counterintelligence mission, is investigating the Russian government’s efforts to interfere in the 2016 presidential election,” he said, “and that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was any coordination between the campaign and Russia’s efforts.” To a layperson, this issue may seem to be resolved. Special counsel Robert S. Mueller III completed his work in March, after all, finding insufficient evidence to establish that Trump and his campaign coordinated with the interference effort undertaken by the Russian government. But, in fact, it isn’t. Mueller’s investigation into possible coordination was an offshoot of a broader probe into how or where members of Trump’s team — the candidate included — might have been working to aid Russian interests. Where that investigation stands now, though, is a mystery — even to congressional leaders. House Intelligence Committee Chairman Adam B. Schiff (D-Calif.) spoke with The Washington Post by phone Tuesday and explained how he and his colleagues have been stymied in their efforts to learn how and if the probe is moving forward. The interview has been edited for clarity.
House Intelligence to probe whether Trump family interfered in investigation The House Intelligence Committee is investigating whether attorneys representing both President Trump and his family obstructed the panel’s investigation into Russian interference by shaping or editing false testimony. Documents show that the panel, led by Chairman Adam Schiff (D-Calif.), sent requests for documents and testimony from the president’s personal attorney Jay Sekulow and three others earlier this year in connection with the investigation into whether they edited or shaped former Trump attorney Michael Cohen’s 2017 false statements to Congress about the Trump Tower Moscow proposal. The committee is particularly interested in hearing from Sekulow; Alan Futerfas, Donald Trump Jr.'s attorney; Alan Garten, the Trump Organization's top lawyer; and Abbe Lowell, Ivanka Trump's attorney. “Among other things, it appears that your clients may have reviewed, shaped and edited the false statement that Cohen submitted to the Committee, including causing the omission of material facts,” Schiff wrote in a May 3 letter to attorneys for the lawyers, which was obtained from a committee source. “In addition, certain of your clients may have engaged in discussions about potential pardons in an effort to deter one or more witnesses from cooperating with authorized investigations.” The inquiry was first reported by The New York Times.
Rosenstein Routs Partisan Pundit Comey - Says Former FBI Director 'Crossed The Line' - Former Deputy Attorney General Rod Rosenstein flayed fired FBI Director James Comey in the latest edition of their ongoing spat. Speaking on Monday at the Great Baltimore Committee Monday evening, Rosenstein discussed several topics, including his handling of the Russia investigation and his recommendation to President Trump to fire Comey, who Rosenstein called a "partisan pundit" While discussing Comey's handling of the Hillary Clinton email investigation, Rosenstein said that "while there are many issues in our line [of work] in which a range of decisions may be reasonable, there are bright lines that should never be crossed," criticizing Comey's decision to hold a July 2016 press conference in which he explained why Clinton would not face charges. He then slammed Comey's 11th hour letter to Congress days before the 2016 election explaining that decision. "Those actions were not within the range of reasonable decisions," said Rosenstein. "They were inconsistent with our goal of communicating to all FBI employees that they should respect the attorney general’s role, refrain from disclosing information about criminal investigations, avoid disparaging uncharged persons, and above all, not take unnecessary steps that could influence an election.”
DOJ Spying On Trump; Has Investigated FBI Before - Attorney General William Barr has appointed US Attorney John H. Durham of Connecticut to examine the origins of the Trump-Russia investigation to determine if the FBI's spying on the Trump campaign was "lawful and appropriate," according to Fox News. The move comes as the Trump administration has demanded answers over the use of "informants" on his 2016 campaign. According to Fox, Barr is "serious" and has assembled a team from the DOJ to participate in the probe, adding that Durham is known as a "hard-charging, bulldog" prosecutor according to their source. Sources familiar with matter say the focus of the probe includes the pre-transition period -- prior to Nov. 7, 2016 - - including the use and initiation of informants, as well as potential Foreign Intelligence Surveillance Act (FISA) abuses.An informant working for U.S. intelligence posed as a Cambridge University research assistant in September 2016 to try extracting any possible ties between the Trump campaign and Russia from George Papadopoulos, then a Trump foreign policy adviser, it emerged earlier this month. Papadopoulos told Fox News the informant tried to "seduce" him as part of the "bizarre" episode.Durham previously has investigated law enforcement corruption, the destruction of CIA videotapes and the Boston FBI office's relationship with mobsters. He is set to continue to serve as the chief federal prosecutor in Connecticut. -Fox News Of note - in January House Republicans Jim Jordan and Mark Meadows wrote to Durham, saying that they had "discovered" he was "investigating former FBI General Counsel James Baker" over unauthorized leaks to the media, adding "We know the DOJ and FBI departed from traditional investigative and prosecutorial practices, and insufficiently adhered to the Foreign Intelligence Surveillance Act (FISA). Durham has a history of serving as a special prosecutor, investigating wrongdoing among national security officials - including the FBI's ties to a Boston crime boss, as well as accusations of CIA detainee abuse. According to the report, Durham's review would run in parallel with the ongoing DOJ probe by Inspector General (IG) Michael Horowitz. Meanwhile, Republicans have been seeking answers from US Attorney for Utah, John Huber, who was appointed by former AG Jeff Sessions to review FBI and DOJ surveillance abuses, as well as authorities' handling of the probe into the Clinton Foundation.
Barr throws curveball into Senate GOP 'spying' probe - Attorney General William Barr's decision to tap a U.S attorney to dig into the origins of the Russia probe is throwing a curveball into investigative plans on Capitol Hill. Barr has appointed a U.S. attorney in Connecticut with the responsibility of examining the origins of the FBI’s investigation into the Trump campaign, a move long clamored for by President Trump and his conservative allies. But the decision comes as a trio of high-profile Senate Republicans are planning their own investigations into “spying” on the Trump campaign during the 2016 election and the FBI’s handling of the Clinton email probe. GOP senators stressed they back Barr’s decision, though they warned that it could hamper their own plans in Congress, where prior committee probes have been thrown into limbo as they’ve tried to get access to the same witnesses and documents being swept up in a Justice Department investigation. Senate Judiciary Committee Chairman Lindsey Graham (R-S.C.) stopped short of saying he would end his investigative plans when asked about the impact John Durham’s appointment will have on his panel, but said that lawmakers “need to be cautious” and “make sure we don’t get in his way.” “I don’t want to impede his ability. I don’t want to jeopardize somebody subject to an investigation,” Graham told The Hill. “I want to make sure that oversight doesn’t get in the way of the prosecutor. ... We’ll have to be cautious and find our way forward.” Sen. Ron Johnson (R-Wis.), the chairman of the Senate Homeland Security and Governmental Affairs Committee, said he supports Barr’s move but signaled concern that a Justice Department investigation could add roadblocks to their ability to force individuals to respond to the GOP investigations on Capitol Hill. “I hope it doesn’t hamper it. I’m supportive of the fact that the attorney general is looking into all potential problems, potential crimes,” he said. “But I just want to make sure it does not hamper congressional investigations because our purpose is about … public policy and informing the public.”
William Barr Assignment of John Durham to Look at Russia Probe Sends Chilling Message to FBI for Trump If you come at the king, you best not miss.That’s the message Attorney General William Barr is sending to FBI agents, whether intentionally or not. Barr has authorized yet another investigation into the FBI’s conduct probing links between Russian election interference and the Trump campaign. Even though two other entities are already investigating the same matter, reports indicate that Barr has appointed Connecticut U.S. Attorney John Durham to investigate the origins of the Russia probe. In doing so, Barr is playing into the hands of President Donald Trump, who has already characterized Durham’s assignment as an investigation into “how that whole hoax got started.”The most charitable interpretation of Barr’s behavior in defense of Trump is that he believes strongly in a “unitary executive,” where the president can order any investigation he wants. But in his quest to protect the presidency, Barr is damaging our national security. His complicity in Trump’s efforts to disparage the FBI will make it more difficult for agents to do their jobs and could discourage investigations of those in power.Certainly, the FBI, like any other government agency, should be subject to scrutiny. If you were to ask most FBI agents about internal investigations, they would tell you that they welcome such probes when done in good faith because they ensure not only accountability but also public trust. Following the FBI’s aggressive surveillance of civil rights activists and war protesters in the 1960s and ’70s, safeguards and approval requirements were created to prevent such abuses. The Foreign Intelligence Surveillance Court was created to provide independent oversight of wiretaps conducted in the name of national security. The Domestic Investigations Operations Guide was created to provide detailed operational and approval requirements for each investigative step. FBI personnel are subject to DOJ’s Office of Professional Responsibility, which investigates allegations of misconduct. The FBI also has its own inspection division to conduct routine audits of compliance with polices and practices.
Nervous Clapper Claims We Don't Need Another Investigation Of The Investigators - James Clapper, in an interview with John Berman on CNN, was asked about the attorney general appointment of U.S. Attorney John Durham for the job to investigate how the “FBI Russia Investigation started”. "Do you think this kind of investigation is warranted?"“You’re going to have to stand in line and take a number to do an investigation of the investigators” said Clapper.“There is a substantial investigation, which as I understand it, is nearing completion, being conducted by the Justice Department Inspector General,” Clapper said. “I’d wait for the outcome of that to determine if there needs to be more investigations.”Starting at 3:20, the CNN anchor asks about Barr's newly appointed investigator of the origins of the Russia probe...But then Clapper shifted stance, repeating the old mantra, that Mueller has denied in his report: "We're kinda losing sight of what was the cause of all this, the predicate for all this, was the Russians and the dozens of occasions where Russian operatives tried to engage with the Trump campaign...The Russians were attacking the US election system on a rather massive scale through social media, through RT..." "That was a profound threat to our entire election system and still is. People should pay more attention to Volume 1 of the Mueller Report and what the Russians did... we are losing sight of that."
The Emoluments Clause Could Be a Tipping Point in Trump’s Downfall - On April 30, a federal district judge rejected Trump’s motion to throw out the lawsuit filed by approximately 201 members of the U.S. Senate and House of Representatives alleging that Trump has flagrantly violated the Foreign Emoluments Clause. The case was largely overlooked as national attention has focused on Trump’s obstruction of justice and his efforts to block further congressional scrutiny of his abuses of power. U.S. District Judge Emmet G. Sullivan, in a comprehensive 48-page opinion, ruled that the narrow definition of “emoluments” advanced by Trump’s lawyers “disregards the ordinary meaning of the term as set forth in the vast majority of Founding-era dictionaries; is inconsistent with the text, structure, historical interpretation, adoption, and purpose of the Clause; and is contrary to Executive Branch practice over the course of many years.” This was not the first time a federal judge has allowed such a case to go forward against Trump. Last July, in an equally comprehensive 52-page decision, U.S. District Judge Peter J. Messitte denied Trump’s attempt to dismiss a lawsuit filed by the attorneys general of the District of Columbia and the State of Maryland. Both these lawsuits in essence challenge Trump’s outrageous declaration that “I have a no-conflict situation because I’m president,” a haunting echo of Richard Nixon’s infamous and doomed claim that “when the president does it, that means it is not illegal.”
SEC to Relax Audit Requirements for Small Companies, Thus Facilitating Future Accounting Fraud - The Securities and Exchange Commission (SEC) voted last week 3-1 to exempt small public companies – with annual revenues of less than $100 million – from the requirement that an independent outside auditor attest to the adequacy of the company’s internal control auditing provisions, as required by the Sarbanes Oxley Act of 2002 (SOX).The proposal is now subject to a 60-day comment period, after which the Commission will decide whether to make it final. The proposal is just the latest installment of SEC chairman Jay Clayton’s deregulatory agenda intended to encourage more companies to go public. As the WSJ noted in SEC Moves to Ease Audits for Smaller Companies:SEC Chairman Jay Clayton has made it a priority to make it more attractive for companies to go public and framed Thursday’s proposal as a step toward that goal. It follows a move by the SEC last June to expand the number of companies that can make scaled-back disclosures to regulators that also was aimed at boosting interest in the public markets. Biotech and health care companies are particular targets, according to Biospace, SEC Rule Change Will Ease Audit Requirements for Smaller Companies: While the number of companies listed on the various stock exchanges has actually declined over the past 20 years, there are a number of high-profile companies set to announce IPOs this week or in the coming weeks. In the biotech and pharma world, a number of companies have rushed to list on the Nasdaq and other exchanges. Just this week, four biotech companies listed on the Nasdaq exchange. Like so many deregulatory chickens that have come to roost under Trump, this particular securities law egg was laid – or at the very least, incubated – during the administration of his predecessor (a topic I discussed at greater length in: Doubling Down on Deregulation: SEC Extends JOBS Act Benefit in Elusive Quest to Goose IPO Market). Don’t take my word for that either. As Yves wrote in this 2012 post, Why You Should Hate the “Jumpstart Obama’s Bucket Shops” Act. Obama seems determined to roll back the few remaining elements of the New Deal… his JOBS Act, which guts securities law protections on smaller stock offerings, is touted as a way to increase employment by helping to fund smaller businesses. In reality, the only jobs it is likely to create will be due to the resulting explosion in stock scamsters and bucket shop operators.
Brown to regulators: Be ready to discuss leveraged loans at hearing — Banking regulators testifying in Congress this week must provide details on leveraged lending risks after Treasury Secretary Steven Mnuchin failed to "substantively" address lawmakers' concerns, a senior Democrat said Monday. Sen. Sherrod Brown of Ohio, the ranking Democrat on the Senate Banking Committee, said he was not impressed with Mnuchin's responses to an April 11 letter about leveraged lending sent by the senator to members of the Financial Stability Oversight Council. (Mnuchin chairs the FSOC.) In a letter dated Monday, Brown told four regulatory principals to “please be prepared to share detailed responses to the questions" contained in the April letter, when they appear before the Senate committee Wednesday. "Banks' increased exposure to the leveraged loan market continues to concern me," Brown wrote to Federal Reserve Vice Chairman of Supervision Randal Quarles, Comptroller of the Currency Joseph Otting, Federal Deposit Insurance Corp. Chairman Jelena McWilliams and National Credit Union Administration Chairman Rodney Hood. "Despite more and more evidence of risky corporate debt threatening our financial system, the agencies have not taken action," Brown added. Brown told the regulators that his concern about leveraged lending was reinforced by a report last week, issued by the Fed, which showed a sharp increase in leveraged lending and said underwriting and credit standards have become less stringent over the last six months. Brown's April letter had asked Mnuchin for information on any analyses of the leveraged lending market that the oversight council and its member agencies have performed in the previous two years, as well as any FSOC documents and meetings focused on leveraged lending risks. The Treasury Department responded to Brown by saying that the FSOC's 2018 annual report included a recommendation to agencies to continue “to monitor levels of nonfinancial business leverage, trends in asset valuations, and potential implications for the entities they regulate in order to assess and reinforce their ability to manage severe, simultaneous losses in those markets.” Subsc
House Dems: Fed should 'enact protections' instead of deregulating — More than a dozen House Democrats have signed on to a letter to Federal Reserve Chairman Jerome Powell expressing concern about the agency’s moves to roll back post-crisis regulation. The letter, also addressed to Fed Vice Chair of Supervision Randal Quarles, specifically called out several of the proposals the Fed has put forward this year, accusing the agency of having a “procyclical bias.” The letter, dated May 13, was first reported by Politico. The progressive Democrats criticized the Fed board’s vote in March against deploying the countercyclical capital buffer, a regulatory tool that requires banks to hold additional levels of capital in healthier economic conditions. “The refusal to activate this loss-absorbing equity buffer is a troubling missed opportunity to improve the resilience of the banking sector before the economic cycle turns,” the letter said. The 13 lawmakers include Reps. Jesus "Chuy" Garcia of Illinois, Rashida Tlaib of Michigan, Nydia Velazquez of New York, Al Green of Texas, Katie Porter of California, Ayanna Pressley of Massachusetts and Alexandria Ocasio-Cortez of New York. They also voiced disagreement with the Fed’s decision to remove the “qualitative objection” from this year’s stress tests. The qualitative portion of the test has in the past given regulators greater discretion to fail certain banks due to risk management or operational failures. “Indeed, big banks have substantially improved their capital planning processes in recent years precisely because stress tests had included this ‘qualitative portion,’ ” the letter said. “Eliminating this aspect of the stress tests severely undermines the utility of the annual exercise.” The letter also took aim at a pair of proposals the Fed put forward in April to reduce the frequency of “living wills” that banks are required to file and to provide regulatory relief for foreign banks that meet a certain capital standard. The lawmakers also criticized a proposal from the Financial Stability Oversight Council in March to change its process for designating nonbanks as systemically important financial institutions, or SIFIs. “These changes are substantively problematic and are designed to tie FSOC’s hands when using its designation authority to combat systemic risk,” the letter said.
As Regulators Squirm in their Seats at Hearing, JPMorgan and Citigroup Get Slapped with More Rigging Charges by EU - Pam Martens --At a House Financial Services Committee hearing yesterday, Republicans attempted to marshal arguments for why U.S. banks needed more relief from regulatory oversight. Those arguments weren’t helped by the news of the day. As the hearing got underway, headlines were being promulgated around the globe that JPMorgan Chase, Citigroup and three foreign banks had been fined $1.2 billion by the European Commission for rigging foreign exchange markets. The U.S. Department of Justice leveled criminal felony charges on the same two U.S. banks in 2015 for rigging the same market. Both banks admitted to the charges at that time.A decade after the greatest financial crash in the United States since the Great Depression; after the Dodd-Frank financial reform legislation has failed miserably in stopping the ongoing crime spree by Wall Street’s largest banks; and as radical right-wing members of Congress together with the President continue to chip away at the few safeguards that still exist for the public against these predatory behemoths, the new Chair of the House Financial Services Committee, Maxine Waters, had the courage to convene yesterday’s hearing to put the spotlight on the people who regulate the Wall Street banks. (Missing from the lineup for unknown reasons was the Chair of the Securities and Exchange Commission and the Chair of the Commodity Futures Trading Commission.) The witness panel included Jelena McWilliams, Chair of the Federal Deposit Insurance Corporation (FDIC) – a Federal agency that would not have anywhere near enough money to bail out even one of the Wall Street mega banks if it got into trouble; Joseph Otting, head of the Office of the Comptroller of the Currency (OCC), whose career number-crunchers have quietly been producing data showing that JPMorgan Chase’s Federally-insured bank has a $2.2 trillion position in stock derivatives and that Goldman Sachs Bank USA, also a taxpayer backstopped bank, has a stunning 354 percent total credit exposure to capital as a result of its massive derivatives holdings. Then there was Randal Quarles, Vice Chairman for Supervision at the Federal Reserve – the body that kept Congress in the dark during the financial crisis as it secretly funneled $29 trillion to bail out teetering Wall Street banks and hedge funds and insolvent institutions like Citigroup – even though it is not legally allowed to make loans to an insolvent institution. The Federal Reserve had the temerity to fight the media in court for years in an effort to keep this unprecedented $29 trillion money spigot a secret from Congress and the American people. The information only became public after the U.S. Supreme Court refused to hear the appeal and Senator Bernie Sanders attached an amendment to the Dodd-Frank financial reform legislation mandating an audit of the Fed by the Government Accountability Office. The most important exchange of the day occurred between Brad Sherman, a Democratic Congressman from California and Randal Quarles of the Fed. It went like this:
Gap between Democrats, GOP on bank regulation wide as ever — Nearly nine years after the passage of the Dodd-Frank Act, Republican and Democratic lawmakers still live in alternative universes when it comes to financial regulatory policy. As evidenced by a Senate hearing with regulatory chiefs, most Democrats still regard last year's regulatory relief bill enacted into law as a gift to Wall Street, and view agency leaders appointed by the Trump administration as coopted by industry. But Republicans at the hearing offered a sharp rebuke to that line of thinking, arguing that efforts to ease the regulatory burden of regional and community banks have been misrepresented by their colleagues across the aisle. "The attack that is being made seems to imply that" reg relief "is just benefiting the wealthy," said Senate Banking Committee Chairman Mike Crapo, R-Idaho, the primary sponsor of the reg relief law known as S 2155. He noted that the increase in bank loan volume — by nearly 30% over the last five years — is a good thing, but that Democrats characterize it as banks forcing "shady loans on folks" who lack wealth. “We’ve seen a very strong performance of the financial industry, the financial sector in the United States,” he said. But those comments, echoed by other senators and regulators testifying at the hearing, were in sharp contrast to accusations by Sen. Sherrod Brown, D-Ohio — the panel's ranking member — and other Democrats that reg relief benefits the wealthy at the expense of workers and leaves the financial system at risk for another crisis. “I know the president appointed all of you to your jobs, but you are independent financial regulators," Brown said. "Your job is to make the economy work for everyone — not just people like him.” The regulators testifying at the hearing largely took the GOP's side, agreeing that consumers and small businesses are benefiting from banks' increased lending. “It’s the farmers that are able to get access to credit and small businesses, as well as the consumers to both refinance their mortgages at better terms and to put their kids [through] school,” said Federal Deposit Insurance Corp. Chairman Jelena McWilliams. “We have been very pleased with the economic activity and the ability of banks to lend credit," she added.
JP Morgan buys health-care payments firm InstaMed in bank’s biggest deal since financial crisis - J.P. Morgan Chase is buying medical payments technology firm InstaMed to push more deeply into the $3.5 trillion market for U.S. health-care spending. The bank agreed on Friday to purchase the Philadelphia-based company of about 300 employees that processed $94 billion in transactions last year, according to the two companies. J.P. Morgan is paying more than $500 million for the business, making it the lender’s largest takeover since buying Bear Stearns and the bank assets of Washington Mutual in 2008, according to people with knowledge of the situation. The move show that the nation’s largest bank views the fast-changing world of payments as a battleground worthy of aggressive wagers. When it comes to keeping pace with emerging technology in lending or investing, J.P. Morgan has typically partnered with fintech firms like OnDeck or used its own engineers to build solutions like the brokerage app YouInvest. But payments, being transformed by global technology giants and surging due to the rise of e-commerce, offers a rare growth opportunity for banks. In fact, one of J.P. Morgan’s only other sizable acquisitions of the past decade was its 2017 purchase of WePay, a competitor to PayPal and Stripe. (That year, J.P. Morgan also weighed a bid for Worldpay, a merchant acquirer, before a competitor bought it for $9.9 billion.) So last year, J.P. Morgan surveyed the health-care landscape for ways to ramp up investment, according to Takis Georgakopoulos, the bank’s head of wholesale payments. The decision was based on the vast size and complexity of the market: U.S. health spending, pegged at $3.5 trillion in 2017, is projected to reach $6 trillion by 2027, according to the federal Centers for Medicare and Medicaid Services. “One of my favorite stats is approximately 90 percent of all health providers still use paper billing,” Georgakopoulos said in an interview. “What InstaMed has created is both the platform and the network that allows them to simplify and streamline payments across payers, providers and consumers across the ecosystem.” InstaMed, founded in 2004 by former Accenture consultants Bill Marvin and Chris Seib, automates medical billing with electronic rails for the delivery of health-care information and payments. It connects those in the health-care ecosystem involved in demanding payments, from hospitals to labs and urgent care clinics, with groups like insurers and HMOs that make payments.
JPMorgan Chase Owns $2.2 Trillion in Stock Derivatives; Two-Thirds the Total for All Banks – Pam Martens - According to the Office of the Comptroller of the Currency (OCC), the regulator of national banks, as of December 31, 2018 JPMorgan Chase Bank NA (the Federally-insured bank backstopped by U.S. taxpayers) held $2,212,311,000,000 ($2.2 trillion) in equity derivatives. Equity is another name for stock. The OCC also reported that all commercial banks in the U.S. held a total of $3.374 trillion in equity derivatives at the end of last year, meaning that for some very strange reason, JPMorgan Chase holds a 65.5 percent market share of bank trading in this derivatives market.Those trillion dollar figures are notional amounts, meaning the face value. The OCC defines “notional” like this: “The notional amount of a derivative contract is a reference amount that determines contractual payments, but it is generally not an amount at risk. The credit risk in a derivative contract is a function of a number of variables, such as whether counterparties exchange notional principal, the volatility of the underlying market factors…, the maturity and liquidity of the contract, and the creditworthiness of the counterparty.”According to the OCC report, JPMorgan Chase lost $644 million on its equity positions in the fourth quarter of 2018. We don’t yet know what happened in the first quarter of this year because the OCC has not yet released its report. Not only is JPMorgan Chase Bank NA engaging in risky stock derivative trades, but according to the OCC just 31 percent of these trades are centrally cleared. The other 69 percent are what are called over-the-counter or OTC derivative trades, meaning they are “bilateral,” or secret contracts between JPMorgan Chase and a counterparty with little daylight available to Federal regulators. That also would suggest that they are highly illiquid.
Here’s Why You Can’t Trust the Federal Reserve’s Financial Stability Report -- Pam Martens - What the United States desperately needs is less Financial Stability Reports and actual financial stability – rather than the Wall Street Casino in drag as Federally-insured banks. The Office of Financial Research (OFR), created under the Dodd-Frank financial reform legislation of 2010, publishes a Financial Stability Report; the Financial Stability Oversight Council (F-SOC), also created under Dodd-Frank legislation,publishes an annual report to call attention to any emerging threats to financial stability; and, not to be left out, the Federal Reserve has decided it needs to have its own say in its own Financial Stability Report – ostensibly to make it appear that it’s on top of the threats emanating from its charges on Wall Street – which it decidedly is not. Another reason the Fed may want its own Financial Stability Report is to create the illusion that things have dramatically changed in the structure of the Wall Street mega banks since the financial collapse of 2008 when the Fed secretly funneled $29 trillioninto the collapsing hulks of the mega banks it was supposed to be prudently regulating, in order to prop them back up. In fact, very little has materially changed since 2008. The mega banks are bigger than they were in 2008; the mega banks are still paying the ratings agencies to rate toxic debt; the Volcker Rule has been rendered meaningless by the banks simply calling proprietary trading a hedging function; the mega banks are still trading the stock of their own bank in their own Dark Pools, potentially manipulating their share prices; and the hundreds of trillions of dollars in derivatives, which the public was assured under Dodd-Frank financial reform legislation would be moving out of the darkness onto exchanges or central clearing houses, remain largely in the dark as private contracts of unknown terms between the bank and an unknown counterparty. As we will explain in a moment, derivatives played a central role in the financial collapse of 2008. In its recent Financial Stability Report, the Federal Reserve has moved from illusion to outright lying about the state of derivatives at the mega banks. The Fed writes: “Central clearing of derivatives and securities transactions has grown over the past several decades—both in absolute terms and relative to the size of financial markets. Since the financial crisis, global regulatory efforts have contributed to this growth by encouraging and, in some cases, mandating central clearing of over-the-counter derivatives. By some estimates, the percentage of such activity that is centrally cleared now exceeds 60 percent.” What’s the point of this lie by the Fed? It is obviously to make the behemoth Wall Street bank holding companies that it oversees appear to be much safer than they really are in order to placate regulators in Europe, Asia and elsewhere.
FBI Gets Involved After Cryptocurrency Ransomware Attack Paralyzes Baltimore City -- About five days after Baltimore City government was paralyzed by cryptocurrency ransomware, which infected computers associated with severs tied to the city's communication network have been isolated and cleaned, reported The Baltimore Sun. But hackers are still accessing the network over the weekend, leading to a more in-depth investigation by the FBI, according to acting Mayor Jack Young. said. "I wish they would use it for more good than they are for just bad in trying to extort money from cities and companies. It's just not right." Last Wednesday, we were one of the first to report that hackers brought Baltimore's entire communication network to a halt. The Baltimore Sun said the ransomware was identified as RobinHood. The hackers demanded cryptocurrency as the preferred payment to unlock files on various computers. "Everybody has been instructed to unplug the Ethernet cable and turn off power to their computers, printers and such," City Councilman Ryan Dorsey said. "It's apparently spreading computer to computer." Hackers wrote in a note that 3 Bitcoins (equivalent to about $21,700 at current prices) would unlock each system, or approximately 13 Bitcoins (worth $86,400) to unlock the city's entire communication system. The note also told city officials that if they contacted law enforcement that all communication would be cut off. It also emphasized that anti-virus software would damage the computers. The ransomware's procedures were entirely automated. "We won't talk more, all we know is MONEY!" the note said. "Hurry up! Tik Tak, Tik Tak, Tik Tak!" Last week, city employees were sent home as their computers were completely inoperable.
Fintech charter delayed following court ruling: Otting — A recent court decision allowing New York’s financial regulator to proceed in a case attempting to block the Office of the Comptroller of the Currency from offering fintechs a new federal banking charter is having a chilling effect on potential applicants, OCC chief Joseph Otting said. In a recent sit-down with American Banker, Otting said he no longer expects to have a fintech firm formally apply for the new special purpose bank charter in the second quarter of the year, after a federal judge ruled May 2 that the New York State Department of Financial Services could continue with its case to invalidate the charter. “I [previously] said in the second quarter” the OCC would have an applicant, but “clearly with this ruling, that is going to chill that a little bit,” Otting said in the interview. It’s been almost a year since the OCC began offering the first national bank charter for fintechs. No firm has yet applied partly due to concerns over the pending lawsuits with the New York agency, as well as a similar one brought by the Conference of State Bank Supervisors. In both cases the states argue the OCC has overreached its National Bank Act authority by not requiring applicants for the special purpose charter to receive deposits. Otting and the OCC have long argued they can offer a charter to an applicant in “the business of banking” if it meets only one of three things: take deposits, pay checks or lend money. The decision on whether a national bank needs to receive deposits will be paramount for the financial industry pending the courts’ rulings. Judge Victor Marrero of the U.S. District Court for the Southern District of New York opened the door for this debate when he denied the OCC’s request to dismiss the case with New York agency. He further suggested the state regulator's argument may have merit. “Such dramatic disruption of federal state relationships in the banking industry occasioned by a federal regulatory agency lends weight to the argument that it represents exercise of authority that exceeds what Congress may have contemplated in passing the NBA,” Marrero said in his order. “Indeed, if DFS's characterization of the impact is accurate — which the Court assumes, given the posture of this Order ... the OCC's reading is not so much an ‘interpretation’ as ‘a fundamental revision’ of the" National Bank Act. Otting, however, remains adamant that the OCC is within its legal bounds and not every national bank needs to collect deposits. “I respect the judge who made the decision. ... However, we still feel we have the legal authority to do this,” Otting said.
CFPB official under fire for past writings on race resigns - A senior political appointee at the Consumer Financial Protection Bureau has resigned following controversy over writings more than a decade ago in which he used a racial slur for African-Americans and claimed the majority of hate crimes were hoaxes. Eric Blankenstein, the CFPB’s policy director for supervision, enforcement and fair lending, said in an email Wednesday to agency employees that he had decided to “take another position” after working at the bureau for 18 months. Blankenstein wrote that details of his next job “are still being finalized.” His last day at the CFPB will be May 31. Blankenstein came under fire when The Washington Post first reported last year that he had used a pen name in blog posts in which he suggested that people who use racial slurs are not necessarily racist and that most hate crimes were “hoaxes.” In his writings, Blankenstein referred to a University of Virginia proposal to impose harsh penalties for acts of intolerance as “racial idiocy.” The revelation sparked an uproar at the agency and led to recriminations with CFPB employees, consumer groups and some lawmakers arguing that the blogs disqualified Blankenstein from a leadership position at the agency. Blankenstein's duties included overseeing the bureau’s fair-lending office.
25 attorneys general oppose CFPB's payday rule revamp — Attorneys general from 24 states and Washington, D.C., are opposing the Consumer Financial Protection Bureau’s proposal to remove ability-to-repay requirements from the agency’s payday lending rule. In a comment letter Wednesday, the attorneys general, led by Washington, D.C., AG Karl Racine, said the bureau’s proposal is inconsistent with the Dodd-Frank Act, ignores states’ experience with payday and vehicle title lending, and undermines states’ efforts to protect consumers. “The bureau’s proposal to jettison significant consumer protections adopted just 18 months ago is deeply flawed as a matter of law and policy,” the attorneys general wrote. “The proposal rests on the bureau’s embrace of several new and unjustified limits on its authority to identify acts and practices as unfair and abusive. These new limits are unduly restrictive and inconsistent with applicable law.” The CFPB in February proposed to rescind a requirement for lenders to assess borrowers’ ability to repay, which was seen as a centerpiece of the payday lending rule viewed by supporters as a protection against spiraling consumer debt. The attorneys general say that the proposal is inconsistent with the CFPB’s authority to protect consumers from unfair, deceptive and abusive acts or practices, because the agency determined in 2017 that it was an “unfair and abusive practice” for a lender to make short-term loans without reasonably determining that consumers have the ability to repay the loans. They also argued that the agency’s conclusions that led to the proposal “ignore the experiences of numerous states that have implemented restrictions on payday and vehicle title lending.” Seventeen states and the District of Columbia have either prohibited payday lending or have imposed structural limits and restrictions on consumers’ ability to take out multiple loans or roll over credit. More than 35 jurisdiction also maintain a 36% rate cap for small-dollar installment loans by nonbank lenders.
Democrats grill CFPB official on payday rewrite - A senior official at the Consumer Financial Protection Bureau told lawmakers on Thursday that the bureau’s reliance on a limited study of payday lenders was not strong enough to support strict underwriting requirements of small-dollar loans. Thomas Pahl, the CFPB’s policy associate director for research, markets and regulations, defended the agency’s overhaul of its 2017 payday rule, announced earlier this year, by claiming the study the CFPB relied upon to impose tough ability-to-repay standards did not address vehicle title loans and was limited to data collected from one payday lender in five states. “We did not do any new research,” Pahl told the House Financial Services subcommittee on economic and consumer policy. The study by Columbia University law professor Ronald Mann was cited over 30 times by the CFPB in its 2017 rule and formed the basis for the agency’s finding that repeated rollovers of payday loans were both unfair and abusive. Pahl said CFPB economists used Mann’s data, which found that at least 40% of consumers do not adequately understand the risks of payday loans, to support the bureau’s tough restrictions in its 2017 rulemaking. Mann’s study was controversial from the get-go. The study has been repeatedly cited by payday lenders and trade groups that sued the bureau in Texas last year as the basis for repealing the payday rule. Payday and auto title lenders would benefit from the CFPB’s latest payday proposal, which is estimated to bring in an additional $8 billion in revenue a year to the $15 billion industry, Rep. Ayanna Pressley, D-Ill., said at Thursday's hearing. In March, a federal judge gave payday lenders a reprieve from the payment provisions of the rule by leaving a stay of the Aug. 19 compliance date of the rule in place. The 2017 payday rule, drafted under former CFPB Director Richard Cordray, had two key components: underwriting requirements for high-cost, small-dollar loans, and limits on how often a lender can attempt to debit payments from a borrower’s bank account. Rep. Raja Krishnamoorthi, D-Ill., who chairs the House oversight subcommittee, questioned Pahl on the CFPB’s contacts with payday lenders. The CFPB did not discuss Kraninger’s payday proposal with the industry, Pahl said, and he agreed to provide the committee with details of all meeting with payday lenders. Pressley asked Pahl why the CFPB stated in its latest proposal that “a more robust and evidentiary record” was needed to support a rule that would have a dramatic impact on “the viability” of payday lenders. “Other than the industry just not liking [the rule], by what measure are five years of research leading up to the rule not robust or reliable?" Pressley asked.
As CFPB mulls privatizing database, consumer complaints mount --In the wake of the massive data breach at Equifax, it was not surprising that financial consumer complaints sent to the Consumer Financial Protection Bureau shot up by nearly a quarter in 2017. But last year, complaints kept climbing.The CFPB received over a quarter-million complaints in 2018 — a record — which was a 6% increase from the previous year, according to a new report by the U.S Public Interest Research Group.The analysis by U.S. PIRG's Education Fund comes as the consumer advocacy organization and others like it urge the CFPB to continue allowing the public to view the complaint database. PIRG has released a total of 14 reports about the complaint database since 2013.“Going forward, we encourage the CFPB to maintain public access to a vibrant, transparent, and complete consumer complaint database that encourages consumers, competitors, academics and other researchers, and the complained-about companies themselves to study ways to reform the marketplace,” the report said. The three credit bureaus — Equifax, Experian and TransUnion — received a third of all complaints last year, and generally received three times as many complaints as the largest banks, according to the report. Consumers filed 257,111 complaints with the CFPB last year. In 2017, complaints jumped 21% to 242,986.
Class-Action Lawsuit Says TurboTax Tricked Taxpayers Into Paying For ‘Free’ Tax Prep - The makers of TurboTax have long been luringcustomers into paying for a service that they promised the government they’d give away for free. Now they’re lying to customers to avoid giving refunds.We’ve heard from 16 people who say they were denied refunds and told that the truly free version — Free File — is a government product that’s not run by TurboTax. Ten others reported being told that ProPublica’s stories were inaccurate, or that our coverage is “fake news” or “fictitious.”None of that is true. TurboTax’s Free File product is created and run by the company. It is offered as part of a deal between the tax software industry and the government. The deal is specifically designed to keep the IRS from creating its own free online filing system.Several people gave us recordings of their calls. Here’s audio from one caller, a graduate student in Virginia whose income was around $16,000 — meaning he easily qualified for TurboTax’s Free File. He was charged $105.
Fannie, Freddie need strong capital position to exit conservatorship: FHFA chief — In his first public policy discussion as director of the Federal Housing Finance Agency, Mark Calabria stressed that a strong capital position will determine the future for Fannie Mae and Freddie Mac, eventually helping to lead them out of conservatorship. The lack of capital at Fannie and Freddie spurred the government to seize control of the government-sponsored enterprises more than a decade ago, so the two will have to build a sufficient amount in order to release themselves, Calabria said Tuesday at a National Association of Realtors legislative conference. “All large, systemically important financial institutions should be well capitalized,” he said, speaking at a regulatory forum with Vanity Fair’s Bethany McLean. “That should seem non-debatable at this point. I think if your objective is not to put the taxpayer at risk, if the taxpayer is at risk, the system is at risk.” Calabria reiterated his timeline for the first steps toward their release this year, which he said would be negotiating changes to the preferred stock purchase agreements with the Treasury Department in the fall, after Treasury and the Department of Housing and Urban Development put out reports on administrative and legislative reform in response to a recent presidential directive. Treasury has consulted with the FHFA on its response, said Calabria, and after those reports are finalized, he plans to work toward ending the “net worth sweep.” In 2012, the FHFA and Treasury altered the senior agreements to require Fannie and Freddie to deliver nearly all of their profits to the Treasury Department in an effort to repay taxpayers, leaving the GSEs with an incredibly small capital cushion of $3 billion each. “I will engage with Treasury on an equal basis to where we can make changes to the share agreement that would create a path to get out of conservatorship, and that would absolutely require an end to the sweep,” he said. “My hope is we can have this wrapped up where we set a road map … out of conservatorship somewhere later in the year.” But simply allowing the GSEs to retain earnings wouldn’t provide enough capital to safely release Fannie and Freddie from conservatorship, and FHFA will begin to look over data related to a public offering later this year, though the timeline is “not calendar dependent,” said Calabria.
Trump calls Fannie, Freddie a 'pretty urgent problem' — President Trump said his administration is exploring different alternatives to end the conservatorship of the mortgage giants Fannie Mae and Freddie Mac, calling the government-sponsored enterprises a “pretty urgent problem.” “More than a decade after the financial crisis, Fannie Mae and Freddie Mac are still in conservatorship,” Trump said speaking Friday at a National Association of Realtors event. “Fannie and Freddie still dominate … with no real competition from the private sector, and the taxpayers are still on the hook if another crisis should happen, and this is a pretty urgent problem.” Although Trump emphasized that the GSEs are “doing a lot better than they have been” and are “well-managed,” he also highlighted a need for a system that “welcomes the private sector and competition, protects taxpayers and preserves homeownership for future generations to come.” He mentioned his March directive to the Treasury Department and the Department of Housing and Urban Development that asked the agencies to develop administrative and legislative plans for reforming the housing finance system, including resolving the conservatorship of Fannie and Freddie. “We will consider taking administrative actions to modernize our housing programs and to ensure more affordable housing to get rid of ridiculous regulations,” Trump said.
MBA: "Foreclosure inventory rate still at lowest level since 1995" -- From the MBA: Mortgage Delinquencies Rise in the First Quarter of 2019 The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 4.42 percent of all loans outstanding at the end of the first quarter, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.Despite an uptick of 36 basis points on a quarterly basis, the delinquency rate was still down 21 basis points from one year ago. The percentage of loans on which foreclosure actions were started last quarter fell by 5 basis points from a year ago and 2 basis points from last quarter (to 0.23 percent). “The national mortgage delinquency rate in the first quarter of 2019 was down on a year-over-year basis, which is another sign of a very strong economic environment, bolstered by low unemployment and rising wage growth,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “Moreover, the serious delinquency rate – the percentage of loans that are 90 days or more past due or in the process of foreclosure – dropped across all loan types from the previous quarter and a year ago to its lowest overall level since the second quarter of 2006.”Walsh noted that early 30-day delinquencies rose in the first quarter of 2019 on a seasonally-adjusted basis across all loan types. The rise in early delinquencies resulted in the overall mortgage delinquency rate climbing by 36 basis points. While higher than several quarters in 2017 and 2018, it is still the fourth lowest overall mortgage delinquency rate in the past 12 years. ... By stage, the 30-day delinquency rate increased 29 basis points to 2.58 percent, the 60-day delinquency rate increased 7 basis points to 0.81 percent, and the 90-day delinquency bucket remained unchanged at 1.03 percent. The delinquency rate includes loans that are at least one payment past due, but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 0.92 percent, down 3 basis points from the fourth quarter and 24 basis points lower than one year ago. This is the lowest foreclosure inventory rate since the fourth quarter of 1995. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was at 1.96 percent – a decrease of 10 basis points from last quarter and a decrease of 65 basis points from last year.
MBA: Mortgage Applications Decreased in Latest Weekly Survey -From the MBA: Mortgage Applications Decrease in Latest MBA Weekly SurveyMortgage applications decreased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 10, 2019.... The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 7 percent higher than the same week one year ago. ..“Purchase applications declined slightly last week but still remained almost 7 percent higher than a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite the third straight decline in mortgage rates, refinance applications decreased for the fifth time in six weeks, albeit by less than 1 percent.”Added Kan, “It’s worth watching if ongoing global trade disputes lead to increased anxiety about the economy, which could cause some potential homebuyers to put off their home search until the uncertainty is resolved.... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.40 percent from 4.41 percent, with points decreasing to 0.40 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
"Lowest Mortgage Rates in More Than a Month" -- From Matthew Graham at Mortgage News Daily: Lowest Mortgage Rates in More Than a Month Mortgage rates moved moderately lower to start the new week as trade tensions remained in focus. In general, the worse the US/China trade relationship is looking at any given moment, the better it has been for the bond market (and the worse it's been for stocks). … Today's drop brings the average lender back to the lowest rates since April 2. [30YR FIXED - 4.125-4.25%] Note: The decline in mortgage rates - from around 5% late last year, to just over 4% - has given the housing market a lift.
Appraisers and homeowners at growing odds on property values- Quicken - The gap in home price perception between appraisers and property owners widened in April, reaching its greatest spike in four years, according to Quicken Loans. At the same time, home values continued climbing. Appraisers came in 0.87% lower than homeowners' average estimate, a change of 9 basis points from March and a growing divergence since November 2018. The Northeast had the largest discrepancy in home appraisals, at 0.94% lower. "The continued widening of the gap between homeowners' and appraisers' viewpoints is evidence of just how hard it can be to keep your finger on the pulse of local housing, especially at the onset of home selling season," Bill Banfield, Quicken Loans executive vice president of capital markets, said in a press release. "I encourage homeowners to keep a close eye on the homes selling around them. This can help them to be more realistic when estimating the value of their home to refinance or sell." Conversely, the Home Value Index — based on data from home purchases and mortgage refinances — grew 5.43% year-over-year and 1.95% from March. Regionally, the Midwest's home values increased the most year-over-year, jumping 5.33%. The South followed at 5.12%, with the Northeast next at 4.81% and the West last with a 3.87% gain. The Midwest also posted the largest month-over-month increase at 2.11%, while the Northeast had the smallest, rising 1.16% from March. "Demand for housing is high this spring. The strong economy is leading more to look for a home, but the persistent low inventory keeps home values rising across the country," said Banfield. "These new, higher levels are helping homeowners who are selling or accessing their equity, but the higher prices can make buyers reevaluate their budgets before heading out to open houses."
California Wants To Ban 'Racist' Single-Family Zoning To Correct Historical Wrongs - California is mulling a new state measure that would require cities and counties to allow permits for duplexes, triplexes and fourplexes on much of the residential land currently zoned exclusively for single-family housing, according to the Los Angeles Times. The proposal, added to Senate Bill 50 by Sen. Scott Wiener (D-San Francisco) would also allow for the construction of mid-rise apartment buildings near mass transit, along with small apartment complexes and townhouses in wealthy communities located in some of the state's larger counties, including Los Angeles. In the bulk of CA, it’s illegal to build any type of housing other than single family homes. #SB50, the #MoreHOMES Act, ends this prohibition. If we’re serious about ending CA’s 3.5M home shortage & doing so without sprawl, we need to legalize apartments. https://t.co/fL2HS7A3vf— Scott Wiener (@Scott_Wiener) May 13, 2019The legislation prohibits the demolition of single-family homes to build fourplexes without government review, while developers could continue to build single-family homes as they see fit. That said, allow up to four homes on a single parcel of land would trigger "significant change" in the way California has grown over the last 100 years, according to the Times. Nearly two-thirds of the residences in California are single-family homes, according to U.S. census data. And between half and three-quarters of the developable land in much of the state is zoned for single-family housing only, according to a 2018 survey by UC Berkeley’s Terner Center for Housing Innovation that included responses from half the state’s cities and counties.The state can no longer dedicate that much land to single-family housing if California is to become more affordable and if political leaders want to meet aggressive goals to reduce greenhouse gas emissions, said Carol Galante, director of the Terner Center. -Los Angeles Times
Home-Flipping Millennials Are Losing Their Shirts Amid Regional Housing Slowdown -- Inspired by home-flipping reality shows and a thriving culture of newfound 'experts' in late state bubbles, young real estate investors in the Bay Area and Seattle are getting hammered amid a slowing housing market combined with payments on high-interest "hard money" loans, according to Bloomberg. One such young investor, aerospace engineer Sean Pan, got into property investing after reading Robert Kiyosaki's financial advice book Rich Dad, Poor Dad - then scouring online investment forums and meetup groups to expand his network. Sean Pan wanted to be rich, and his day job as an aeronautical engineer wasn’t cutting it. So at 27 he started a side gig flipping houses in the booming San Francisco Bay Area. He was hooked after making $300,000 on his first deal. That was two years ago. Now home sales are plunging. One property in Sunnyvale, near Apple Inc.’s headquarters, left Pan and his partners with a $400,000 loss. “I ate it so hard,” he says. -BloombergAs rapid price gains fueled a new crop of home flippers (2005 redux), young investors in areas which got 'too hot' are experiencing their first housing slowdown - and have been forced to take losses from properties sitting on the market too long. As we noted in April, housing starts and permits came in cooler than expected - with starts experiencing their largest drop in 8 months in March, then falling 0.3% MoM (against expectations of a 5.4% rebound). In Q4 2018, around 6.5% of property sales in the US were flips - or homes sold within 12 months of when they last changed hands, the highest seasonally adjusted share going back to 2002, according to CoreLogic. "It’s even higher than during the last boom, when there were more newly built houses for buyers to choose from," notes Bloomberg. Such deals were particularly attractive in Western markets such as Northern California and Seattle, where prices climbed by double-digit percentages annually. But some areas got too hot, and prices are flattening or falling. Fourth-quarter losses for flippers who sold within a year were the highest since 2009, according to a CoreLogic analysis that looks at buying and holding costs, but not rehab expenses. In the San Jose area, 45 percent of flips lost money. –Bloomberg
Housing Starts Increased to 1.235 Million Annual Rate in April -- From the Census Bureau: Permits, Starts and Completions: Privately‐owned housing starts in April were at a seasonally adjusted annual rate of 1,235,000. This is 5.7 percent above the revised March estimate of 1,168,000, but is 2.5 percent below the April 2018 rate of 1,267,000. Single‐family housing starts in April were at a rate of 854,000; this is 6.2 percent above the revised March figure of 804,000. The April rate for units in buildings with five units or more was 359,000. Privately‐owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,296,000. This is 0.6 percent above the revised March rate of 1,288,000, but is 5.0 percent below the April 2018 rate of 1,364,000. Single‐family authorizations in April were at a rate of 782,000; this is 4.2 percent below the revised March figure of 816,000. Authorizations of units in buildings with five units or more were at a rate of 467,000 in April. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) were up in April compared to March. Multi-family starts were unchanged year-over-year in April. Multi-family is volatile month-to-month, and has been mostly moving sideways the last few years. Single-family starts (blue) increased in April, and were down 4% year-over-year. Total Housing Starts and Single Family Housing StartsThe second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then eventual recovery (but still historically low). Total housing starts in April were above expectations, and starts for February and March were revised up.
April housing permits and starts: not nearly so rosy under the headlines --The headlines in this morning’s residential construction report were certainly positive: permits increased by 0.6% and starts by 5.7% m/m. I’ve been looking for a bottom in housing, based on lower mortgage rates, so this is good news because the bottom in overall permits and starts on a monthly basis may have been reached. But the news was not nearly so positive underneath. As I have repeated many times, single family permits are my favorite metric, because permits lead starts, and single family permits are the least volatile of any of the measures. Well, single family permits sank to a two and half year low, at 782,000. This is -11.7% off their February 2018 high: The least that single family permits have fallen prior to a recession in the past 50+ years was prior to the 2001 recession, at -12.5%, so we are very close to that threshold. The saving grace in this number is that permits for multi-family dwellings have increased at the same time. This is socially beneficial, because these are more affordable for households unable to afford single family housing, which had become very unaffordable up until a few months ago. It also ameliorates some of the negative economic impact of the decline in single family construction. By contrast, just prior to the 2001 recession, multi-unit construction declined by -34% as well. Next, housing starts are much more volatile than permits. And despite the great monthly improvement in starts, the three month moving average is also at a new 1+ year low: Because starts represent actual economic activity, that this has continued to decline argues that the long leading effects of housing on the economy are going to continue to be negative for perhaps another year. And by the way, lest you think I am cherry-picking, the metrics above are the same ones I have been checking, month after month after month for years. Finally, I’ve been watching construction employment as a leading sector of that metric. Employment has been the coincident indicator for the economy that has improved the most in the past half year. In fact, all three of the other four big coincident indicators remain below their highs of last November or December: In the past, residential construction employment (red in the graph below) has usually started to decline within 6 months after the peak in the number of housing units under construction (green), and coincident with the peak in housing units completed (blue): The number of units under construction peaked 4 months ago in January, and has declined ever since. Completed units peaked two months ago in March. Residential construction employment declined in April. So this morning’s housing report is powerful evidence that we should expect to see continued declines in residential construction employment in jobs reports going forward.
Comments on April Housing Starts – McBride - Earlier: Housing Starts Increased to 1.235 Million Annual Rate in April. Total housing starts in April were above expectations, and starts for February and March were revised up. The housing starts report showed starts were up 5.7% in April compared to March, and starts were down 2.5% year-over-year compared to April 2018. Single family starts were down 4.3% year-over-year, and multi-family starts were up 1.4%. This first graph shows the month to month comparison for total starts between 2018 (blue) and 2019 (red). Starts were down 2.5% in April compared to April 2018. The year-over-year weakness in April was in the single family sector. Last year, in 2018, starts were strong early in the year, and then fell off in the 2nd half - so the early comparisons this year are the most difficult. My guess is starts will be down slightly year-over-year in 2019 compared to 2018, but nothing like the YoY decline we saw in February and March. Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but turned down, and has moved sideways recently. Completions (red line) had lagged behind - however completions and starts are at about the same level now. As I've been noting for a few years, the significant growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR). The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Note the relatively low level of single family starts and completions. The "wide bottom" was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions.
NAHB: "Builder Confidence Posts Solid Gain in May" --The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 66 in May, up from 63 in April. Any number above 50 indicates that more builders view sales conditions as good than poor. From NAHB: Builder Confidence Posts Solid Gain in May Builder confidence in the market for newly-built single-family homes rose three points to 66 in May, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Builder sentiment is at its highest level since October 2018.“Builders are busy catching up after a wet winter and many characterize sales as solid, driven by improved demand and ongoing low overall supply,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn. “However, affordability challenges persist and remain a big impediment to stronger sales.”“Mortgage rates are hovering just above 4 percent following a challenging fourth quarter of 2018 when they peaked near 5 percent. This lower-interest rate environment, along with ongoing job growth and rising wages, is contributing to a gradual improvement in the marketplace,” said NAHB Chief Economist Robert Dietz. “At the same time, builders continue to deal with ongoing labor and lot shortages and rising material costs that are holding back supply and harming affordability.”…All the HMI indices posted gains in May. The index measuring current sales conditions rose three points to 72, the component gauging expectations in the next six months edged one point higher to 72 and the metric charting buyer traffic moved up two points to 49. Looking at the three-month moving averages for regional HMI scores, the Northeast posted a six-point gain to 57, the West increased two points to 71, the Midwest gained one point to 54, and the South rose a single point to 68.
Leading Index for Commercial Real Estate Declines in April --From Dodge Data Analytics: Dodge Momentum Index Dips in April The Dodge Momentum Index fell 0.5% in April to 144.3 (2000=100) from the revised March reading of 145.1. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The retreat in April was the result of the commercial component falling 1.0% while the institutional component rose a scant 0.2%. The Momentum Index has clearly lost some impetus over the last twelve months. The overall Momentum Index is down 8.5% since April 2018, with the commercial component 4.7% lower and the institutional component 13.9% lower. However, over the past several months the Momentum Index has moved in a crab-like fashion with neither strong gains or losses. This suggests that there continues to be a reasonably healthy number of projects in the planning pipeline to support a moderate level of construction activity in the coming months. This graph shows the Dodge Momentum Index since 2002. The index was at 144.3 in April, down from 145.1 in March. According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".
NY Fed Q1 Report: "Total Household Debt Rises for 19th Straight Quarter, Now Nearly $1 Trillion Above Previous Peak" - From the NY Fed: Total Household Debt Rises for 19th Straight Quarter, Now Nearly $1 Trillion Above Previous PeakThe Federal Reserve Bank of New York’s Center for Microeconomic Data today issued itsQuarterly Report on Household Debt and Credit, which shows that total household debt increased by $124 billion (0.9%) to $13.67 trillion in the first quarter of 2019. It was the 19th consecutive quarter with an increase, and the total is now $993 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008. The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data. ..."The rate at which credit card balances become delinquent has been rising, and that has coincided with an increase in younger borrowers entering the credit card market,” said Andrew Haughwout, senior vice president at the New York Fed. “However, these delinquency rates are increasing from historically low levels and remain below pre-financial-crisis levels.” Mortgage balances rose by $120 billion, to $9.2 trillion. Mortgage originations declined to $344 billion from $401 billion, the lowest level seen since the third quarter of 2014. Mortgage delinquencies improved slightly, with 1.0% of mortgage balances 90 or more days delinquent, down from 1.1% in the fourth quarter of 2018. Here are two graphs from the report: The first graph shows aggregate consumer debt increased in Q1. Household debt previously peaked in 2008, and bottomed in Q2 2013. The second graph shows the percent of debt in delinquency. The overall delinquency rate decreased slightly in Q1. From the NY Fed: Aggregate delinquency rates remained steady in the first quarter of 2019. As of March 31, 4.6% of outstanding debt was in some stage of delinquency. Of the $623 billion of debt that is delinquent, $417 billion is seriously delinquent (at least 90 days late or “severely derogatory”). The flow into 90+ day delinquency for credit card balances has been rising since 2017, while the flow into 90+ day delinquency for auto loan balances has been slowly trending upward since as early as 2012. Student loan delinquency transition rates remain at high levels relative to other types of debt.There is much more in the report.
Consumer credit: both producer and consumer sides of the ledger show mortgage market OK, increasing stress for other loans -- The New York Fed reported on household debt and credit this morning. The good news is that there has been no increase in total delinquencies: This is important because the amount of delinquencies would be expected to increase if we were close to getting into a recession. The somewhat more bad news is that, if the *amount* of delinquencies has not risen, the *percentage* of vehicle and credit card loans that are seriously delinquent has risen: And the percent transitioning into serious delinquencies for credit card loans have also risen: Note, however, that mortgage loan delinquencies remain at their lowest ever in the survey. Meanwhile, last week the Fed issued its Senior Loan Officer Survey, which covers the creditor side of the ledger. That report showed that in Q1, mortgage lending got slightly looser, as did credit to firms, while outside of mortgages, banks tightened conditions for issuing consumer credit, and consumer demand for nearly all types of credit declined. My post on the Senior Loan Officer Survey is up at Seeking Alpha. In short, from both the producer and consumer side of the ledger, the mortgage market is in good shape, with some signs of increasing stress, and tightening of conditions, for other types of loans.
Wolf Richter: Subprime Bites – Auto-Loan Delinquencies Spike to Q3 2009 Level, Despite Strongest Labor Market in Years - Serious auto-loan delinquencies – 90 days or more past due – jumped to 4.69% of outstanding auto loans and leases in the first quarter of 2019, according to New York Fed data. This put the auto-loan delinquency rate at the highest level since Q4 2010 and merely 58 basis points below the peak during the Great Recession in Q4 2010 (5.27%): These souring auto loans are going to impact banks and specialized lenders along with the real economy – the automakers and auto dealers and the industries that support them. This is what the banks are looking at. The dollars are big. In Q1, total outstanding balances of auto loans and leases rose by 4% from a year ago to $1.28 trillion (this amount by the New York Fed is slightly higher than the amount reported by Federal Reserve Board of Governors as part of its consumer credit data). Over the past decades, since in Q1 2009, total auto loans and leases outstanding have risen by 65%. But the number of auto-loan accounts has risen only 34% over the decade, to 113.9 million accounts in Q1 2019. In other words, what caused much of the increase in the auto-loan balances is the ballooning amount financed with each new loan and longer loan terms that causes those loans to stay on the books longer. The chart below shows the dollar amounts of auto loan balances (blue columns, right scale) in trillion dollars and the number of auto-loan accounts (red line, left scale) in millions: Of this ballooning amount of auto loans, 4.67% is seriously delinquent (90+ days). This amounts to $60 billion. This chart shows the trajectory of what the banks and specialized lenders are facing, in billion dollars: For lenders, these delinquent loans don’t represent total losses. This debt is collateralized by vehicles, which can be repossessed without much of a delay – unlike foreclosing on a house. But generally, the loan amount is far higher than what a repossessed vehicle will bring at the auction. Perhaps the banks can recover 50% on average of the loan amount. So, if all of the current vintage of 90+ day delinquencies turn into repossessions, and the banks lose 50% on them, it would amount to $30 billion in loan losses. But there are more loans going delinquent even as we speak, and they will become seriously delinquent in Q2, and the next batch in Q3, and so on, and this is working itself forward wave after wave. So the cumulative losses over the next two years will be higher. These losses are spread over thousands of banks, credit unions, and specialized non-bank lenders, and over asset-backed securities holders, such as pensions funds, other institutional investors, and bonds funds, and most will get through this by just licking their wounds. But some smaller subprime-focused non-bank lenders will collapse, and a few have already collapsed.
Michigan Consumer Sentiment: May Preliminary Highest in 15 Years - The May Preliminary came in at 102.4, up 5.2 from the April Final reading. Investing.com had forecast 97.8.Surveys of Consumers chief economist, Richard Curtin, makes the following comments:The Index of Consumer Sentiment surged in early May to its highest level in fifteen years. All of the May gain was in the Expectations Index, which also rose to its highest level since 2004, while the Current Conditions Index was virtually unchanged and well below the cyclical peak set in March 2018. Consumers viewed prospects for the overall economy much more favorably, with the economic outlook for the near and longer term reaching their highest levels since 2004. The gains were recorded mostly before the trade negotiations with China collapsed and China responded with their own tariffs. As shown in the chart, unaided references to tariffs peaked in July 2018 at 35% and have generally declined to just 16% in early May 2019. The July peak corresponds to the initial imposition of tariffs. To be sure, negative references to tariffs rose in the past week and are likely to rise further in late May and June. Those who held negative views about the impact of tariffs on the economy and pricing had values on the Expectations Index that were 25 points lower, and expected the year-ahead inflation rate to be 0.6 percentage points higher. Even apart from the direct impact of tariffs on prices, rising tariffs could cause a more general loss of confidence which could further diminish the pace of consumer spending. At present, the data point toward moderate spending growth in the year ahead. Nonetheless, the data indicate the corrosive impact of an escalating trade war. [More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
The Mighty U.S. Consumer Is Struggling - It’s no secret the U.S. economy keys off consumption. On that count, it’s beginning to look less and less like an expanding economy. Whether it’s the internals of the first-quarter GDP report or the source of March personal spending, the trend is not the friend of growth in coming months. Some of it comes down to the state of U.S. workers’ paychecks. Adjusted for inflation, personal income excluding government transfers peaked in December and has declined at a 3 percent annual rate over the past three months. That helps explain consumption’s punk 0.8 percent contribution to first-quarter GDP, the lowest in a year. Digging into March’s personal spending data, the headline once again belied strength. On the surface, spending of 0.9 percent was as robust as it gets even after adjusting for inflation, which took it to 0.7 percent. Net out the biggest savings drawdown in six years, however, and you arrive at a decline of 0.2 percent for March. As for what’s pushing households to tap into their rainy-day funds, Deutsche Bank recently pointed to the 15 percent year-on-year increase in household interest payments. Levels of payments rising at a similar pace preceded the onsets of the last two recessions. Is it any wonder credit-card issuers are bolstering their cushions to absorb future losses? And it’s not just Capital One that caters to lower-credit quality borrowers. All seven of the largest U.S. card issuers boosted their charge-off rates in the first quarter to an average of 3.82 percent, an almost seven-year high. Mortgage lenders are reporting similar strains. According to Black Knight's latest Mortgage Monitor, a typical first quarter sees the national delinquency rate decline by 15 percent as borrowers use tax refund proceeds to catch up on their household finances. The first three months of 2019, however, marked the smallest drop in delinquency rates since 2009. It’s almost as if the tax cut never happened. While that’s a bit of a stretch (there’s no denying the bump to take-home pay for millions of Americans) 2019’s tax season was nevertheless been a shock of historic magnitude to household budgets. Add up what Uncle Sam did not pay out in tax refunds and how much more households paid up in income taxes vis-à-vis 2018 and you arrive at $29 billion.
Retail Sales decreased 0.2% in April -- On a monthly basis, retail sales decreased 0.2 percent from March to April (seasonally adjusted), and sales were up 3.1 percent from April 2018. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for April 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $513.4 billion, a decrease of 0.2 percent from the previous month, but 3.1 percent above April 2018. Total sales for the February 2019 through April 2019 period were up 3.0 percent from the same period a year ago. The February 2019 to March 2019 percent change was revised from up 1.6 percent to up 1.7 percent (±0.2 percent). This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were down 0.4% in April. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Year-over-year change in Retail Sales Retail and Food service sales, ex-gasoline, increased by 3.0% on a YoY basis. The increase in April was well below expectations. Sales in March were revised up, and sales in February were revised down. A weak report.
Used Class 8 Truck Sales Crash - The outlook for heavy duty Class 8 trucks, an industry used as a leading indicator barometer for the broader economy, continues to deteriorate. Just days after we reported the latest awful order number for new Class 8 trucks – and just hours after we reported industry experts' negative outlook for the rest of 2019, used truck sale data has completed the trifecta of misery for the freight industry.Preliminary data shows that used truck sales in the Class 8 segment fell 13% in April compared to last year, according to FreightWaves. Used truck sales as a whole fell 5% in April compared to a 25% uptick in March. The average price of a used truck rose 14%, while at the same time average miles contracted and average truck age was relatively flat, according to ACT research. Steve Tam, vice president of ACT said: “Recent conversations with market contacts suggest dealers are very aware that conditions are changing. Auction and wholesale volumes, as well as pricing, are softening.”He continued: “Some used truck buyers and sellers are paying close attention, but others may be only casually aware of any looming concern. Most truckers have yet to make the leap, as signified by retail markets that are outperforming their dealer counterparts."Year to date, sales of used trucks have fallen 16%. Class 8 trucks, which are made by Daimler (Freightliner, Western Star), Paccar (Peterbuilt, Kenworth), Navistar International, and Volvo Group (Mack Trucks, Volvo Trucks), are one of the more common heavy trucks on the road, used for transport, logistics and occasionally (some dump trucks) for industrial purposes. Typical 18 wheelers on the road are generally all Class 8 vehicles, and traditionally are seen as an accurate coincident indicator of trade and logistics trends in the economy. The Cass Freight Index report for the month ended April 2019 also painted a dire picture for freight heading into the end of the second quarter. The report says that "continued decline" in the freight index remains a concern, pointing out that shipments have fallen 3.4% year over year while expenditures have risen 6.2%. Sequentially on a monthly basis, shipments are down 0.3% while expenditures ticked up 0.7%.
LA area Port Traffic Down Year-over-year in April -- Special note: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast. On the impact of the trade war, from Port of Long Beach Executive Director Mario Cordero: “With peak season approaching, we’re expecting imports to continue to grow, but it’s clear exports are suffering under the weight of tariffs.” Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.
US Import, Export Prices Disappoint As China's Deflationary Impulse Hits 12-Year Low -- Having rebounded, albeit modestly, in February and March, import and export prices were both expected to accelerate in April but instead both import and export price gains slowed. Import Prices fell 0.2% YoY (+0.7% exp) and Export prices rose just 0.2% YoY (+0.6% exp) Ex-Petroleum things are considerably more ugly, dropping 0.6% MoM and -1.0% YoY - the weakest since July 2016... And China is exporting deflation at its strongest since October 2007... So, for now, The Fed has some breathing room.
Industrial Production Decreased 0.5% in April --From the Fed: Industrial Production and Capacity Utilization Industrial production fell 0.5 percent in April, and the rates of change for previous months were revised down on net. Output is now reported to have declined 1.9 percent at an annual rate in the first quarter. Manufacturing production moved down 0.5 percent in April after being unchanged in March. The index for mining advanced 1.6 percent in April, while the index for utilities fell 3.5 percent. At 109.2 percent of its 2012 average, total industrial production was 0.9 percent higher in April than it was a year earlier. Capacity utilization for the industrial sector decreased 0.6 percentage point in April to 77.9 percent, a rate that is 1.9 percentage points below its long-run (1972–2018) average. This graph shows Capacity Utilization. This series is up 11.2 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 77.9% is 1.9% below the average from 1972 to 2017 and below the pre-recession level of 80.8% in December 2007. Note: y-axis doesn't start at zero to better show the change. Industrial ProductionThe second graph shows industrial production since 1967. Industrial production decreased in April to 109.2. This is 26% above the recession low, and 3.6% above the pre-recession peak. The decrease in industrial production and decrease in capacity utilization were below consensus.
US Industrial Production Tumbles - Weakest Growth In 2 Years - With US industrial production having stagnated for the last four months, April is expected to be more of the same - unchanged from March - but it didn't, missing dramatically and tumbling 0.5% MoM. The report shows manufacturing losing momentum amid a trade war with China that’s raised prices and complicated business decisions. Those headwinds are poised to strengthen after President Donald Trump this month threatened fresh tariffs. Production of motor vehicles and parts fell the most in three months, while machinery output shrank the most since 2014. Business equipment fell the most since 2013 while output of consumer goods decreased the most since January. This is the biggest headline MoM drop since May 2018 Capacity utilization, measuring the amount of a plant that is in use, decreased to a 14-month low of 77.9% from 78.5%. And the slowest YoY growth since March 2017 And worst still Factory Output actually contracted YoY in April... Most major market groups posted decreases in April. The production of consumer goods fell 1.2 percent, with declines for both durables and nondurables. The index for durable consumer goods moved down 0.8 percent, mostly because of a drop in the output of automotive products, while the output of nondurables was held down by sizable declines for both chemical products and consumer energy products. Production decreased for business equipment (biggest drop since Jan 2013), construction supplies, and business supplies... But output advanced for defense and space equipment and for materials. Among the components of materials, a drop for durables was more than offset by gains for nondurable and energy materials. The output of utilities fell 3.5 percent in April, with declines in the indexes for both natural gas and electric utilities; demand for heating decreased last month because of temperatures that were warmer than normal. More 'hard' data for The Fed to consider - time for a rate-cut?
Weak U.S. retail sales, industrial output highlight slowing economy (Reuters) - U.S. retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, pointing to a slowdown in economic growth after a temporary boost from exports and inventories in the first quarter. The moderation in economic activity was underscored by other data on Wednesday showing a drop in industrial production last month as manufacturers, especially in the automotive sector, worked off stockpiles of unsold merchandise. Growth is slowing as the stimulus from the White House’s $1.5 trillion tax cut package fades. President Donald Trump’s escalating trade war with China, which triggered a steep U.S. stock market sell-off, is also seen hurting business confidence and undercutting spending on equipment. Following the weak reports on Wednesday, the Atlanta Federal Reserve cut its second-quarter gross domestic product (GDP) growth estimate to a 1.1% annualized rate from a 1.6% pace. The economy grew at a 3.2% rate in the January-March period. “Not a great start to the current quarter,” The Commerce Department said retail sales slipped 0.2% last month after surging 1.7% in March, which was the largest increase since September 2017. Economists polled by Reuters had forecast retail sales gaining 0.2% in April. Retail sales in April increased 3.1% from a year ago. The National Retail Federation blamed the downbeat sales on slower tax refunds and the weather, including flooding in the Midwest, and “blizzards and extreme temperature swings” elsewhere. Given the stock market rout and cooler temperatures in May, which could have delayed summer purchases, a strong rebound in retail sales in unlikely. Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged in April after marching 1.1% higher in March. These so-called core retail sales correspond most closely with the consumer spending component of GDP. Consumer spending accounts for more than two-thirds of economic activity. While March’s strong core retail sales set consumer spending on an upward trajectory in the second quarter, last month’s weakness suggested a moderate pickup in spending. But consumption remains underpinned by a strong labor market, marked by the lowest unemployment rate in nearly 50 years. In a separate report on Wednesday, the Federal Reserve said industrial production fell 0.5% in April after rising 0.2% in March. The third drop in production this year was led by manufacturing. Output at factories declined 0.5% as motor vehicles and parts production tumbled 2.6%. Manufacturing production was unchanged in March. Automobile assembly plants are cutting back production as slowing sales have led to a glut of vehicles in showrooms. Production was also hammered by a 1.8% tumble in aircraft and parts output last month. The drop, which was the largest since 2013, probably is the result of Boeing cutting production of its troubled 737 MAX aircraft.
NY Fed: Manufacturing "Business activity picked up significantly in New York State" From the NY Fed: Empire State Manufacturing Survey Business activity picked up significantly in New York State, according to firms responding to the May 2019 Empire State Manufacturing Survey. The headline general business conditions index climbed eight points to 17.8, its highest level in six months. New orders and shipments also grew at a faster pace than in recent months. Delivery times held steady, and inventories moved slightly lower. Labor market indicators pointed to small increases in employment and hours worked. The index for number of employees fell seven points to 4.7, a level indicating that employment increased only to a small degree. The average workweek index held steady at 4.4.This was well above the consensus forecast.
Philly Fed Manufacturing Index: Continued Growth in May - The Philly Fed's Manufacturing Business Outlook Survey is a monthly report for the Third Federal Reserve District, covers eastern Pennsylvania, southern New Jersey, and Delaware. While it focuses exclusively on business in this district, this regional survey gives a generally reliable clue as to the direction of the broader Chicago Fed's National Activity Index. The latest Manufacturing Index came in at 16.6, up 5.2 from last month's 13.7. The 3-month moving average came in at 6.0, up from 8.1 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 19.7, up 0.6 from the previous month's 19.1.Today's 16.6 headline number came in above the 10.0 forecast at Investing.com. Here is the introduction from the survey released today: Results from the May Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. The survey’s indexes for general activity, shipments, and employment increased from their April readings. The new orders index remained positive but decreased modestly. The survey’s future activity index, after falling in recent months, was little changed, while the firms’ forecast for future employment improved. (Full Report) The first chart below gives us a look at this diffusion index since 2000, which shows us how it has behaved in proximity to the two 21st century recessions. The red dots show the indicator itself, which is quite noisy, and the 3-month moving average, which is more useful as an indicator of coincident economic activity. We can see periods of contraction in 2011, 2012 and 2015, and a shallower contraction in 2013. 2016 saw an improvement but has since lost its gains and has been detracting.
F-35 Crash That Grounded Fleet Caused By Manufacturing Defect -- The cause of a September, 2018 F-35B crash in South Carolina was caused by a manufacturing defect in a fuel tube made by a United Technologies subcontractor, according to Bloomberg, citing congressional investigators. The defect "caused an engine fuel tube to rupture during flight, resulting in a loss of power to the engine," according to the Government Accounting Office in a an annual assessment of major weapons systems released this week. The September 28, 2018 crash near the Marine Corps Air Station Beaufort was the first in the nearly two-decade history of the F-35 program, and resulted in the temporary grounding of the entire fleet of next generation aircraft. UPDATE: The #F35 grounding extends to A and C variants, not just B, multiple sources confirm to @AviationWeek.— Lee Hudson (@LeeHudson_) October 11, 2018 While the pilot safely ejected, the incident caused concern among US allies who are buying the aircraft, including Italy, Australia and Turkey. The Pentagon told the watchdog that it identified 117 aircraft -- about 40 percent of the worldwide F-35 fleet at the time -- with the same type of fuel tubes that had to be replaced.The disclosure was the first official information about the crash since the Pentagon program office in late October issued a status statement while the Marine Corps was still conducting its investigation. United Technologies Corp.’s Pratt & Whitney unit “is fully responsible” for “the propulsion system and has the lead in working” the failure analyses, according to the statement at the time. –Bloomberg A Pentagon spokeswoman for the F-35 program deferred questions to Pratt & Whitney - which had no comment.
Boeing Settlement Hinges On How Long Doomed 737 Max Passengers Knew They Were Going To Die - Boeing and its insurers are likely to pay an amount of money to the families of those who died in the 737 Max crashes that is directly proportional to one grim measure: how long the victims knew they were plunging to their deaths. Additionally, as part of a legal fight to determine Boeing's financial liability after the 737 Max crashes in Ethiopia and Indonesia, passenger's families could be paid compensation based on grief, sorrow, loss of companionship and lost future paychecks.According to an estimate from Bloomberg, the claims could total as much is $1 billion, and some legal experts believe the final amount could be even more, if evidence shows that Boeing knew about flaws in their planes prior to the tragedies taking place. This idea has already prompted investor lawsuits against the company, claiming it hid safety risks.Brian Alexander, a New York aviation lawyer for victims of the Ethiopian Airlines jet said: "The bottom line is Boeing’s exposure is much more substantial than in any other case that I’ve been a part of in my quarter-century of representing families. You get into ‘What did you know and when did you know it'." The crash in Ethiopia, which followed an October crash in Indonesia, led to the worldwide grounding of the 737 Max, a plane that accounts for a third of Boeing's operating profit. Among multiple ongoing investigations is a Justice Department probe on how American regulators wound up certifying a flawed part of the plane's flight control system.Even though the precise cause of the crashes is still being investigated, preliminary evidence is heightening the liability risk for Boeing. Robert Rabin, a Stanford University law professor said: “It would be in Boeing’s best interest to settle.’'It would be far more expensive for the company to go to trial.
The radio navigation planes use to land safely is insecure and can be hacked - Just about every aircraft that has flown over the past 50 years—whether a single-engine Cessna or a 600-seat jumbo jet—is aided by radios to safely land at airports. These instrument landing systems (ILS) are considered precision approach systems, because unlike GPS and other navigation systems, they provide crucial real-time guidance about both the plane’s horizontal alignment with a runway and its vertical angle of descent. In many settings—particularly during foggy or rainy night-time landings—this radio-based navigation is the primary means for ensuring planes touch down at the start of a runway and on its centerline.Like many technologies built in earlier decades, the ILS was never designed to be secure from hacking. Radio signals, for instance, aren’t encrypted or authenticated. Instead, pilots simply assume that the tones their radio-based navigation systems receive on a runway’s publicly assigned frequency are legitimate signals broadcast by the airport operator. This lack of security hasn’t been much of a concern over the years, largely because the cost and difficulty of spoofing malicious radio signals made attacks infeasible.Now, researchers have devised a low-cost hack that raises questions about the security of ILS, which is used at virtually every civilian airport throughout the industrialized world. Using a $600 software defined radio, the researchers can spoof airport signals in a way that causes a pilot’s navigation instruments to falsely indicate a plane is off course. Normal training will call for the pilot to adjust the plane’s descent rate or alignment accordingly and create a potential accident as a result. One attack technique is for spoofed signals to indicate that a plane’s angle of descent is more gradual than it actually is. The spoofed message would generate what is sometimes called a “fly down” signal that instructs the pilot to steepen the angle of descent, possibly causing the aircraft to touch the ground before reaching the start of the runway.
‘Tough decisions’ lie ahead for USPS in upcoming 10-year business plan Following pressure from lawmakers at a House Oversight and Reform Committee hearing last month, the Postal Service has shed more light on a strategic plan aimed to outline a long-term business model for USPS.Postmaster General Megan Brennan, in a call with reporters Friday, said the 10-year plan would address some of the same sustainability questions that have also been raised by a White House postal task force, which released its final recommendations last December. “The plan will essentially focus on the key public policy questions of what universal services the postal service should provide and how to pay for those services,” Brennan said.However, several of the core issues the plan seeks to address will require action from Congress. “We have no illusions — tough decisions will be necessary,” Brennan said. “We additionally anticipate that a significant effort will be necessary to build consensus and support among our various postal stakeholders.” The Postal Service on Friday reported a $2.1 billion net loss for the second quarter of fiscal 2019. For fiscal 2018, it reported a net loss of $3.9 billion. David Williams, one of two confirmed members on the USPS Board of Governors, said the board’s strategic planning committee met three times between March and April to discuss some of the major pillars in the strategic plan.Those facets, Williams said, include legislative proposals for market-dominant pricing — which includes products like first-class mail — and simpler pricing that “would enable greater ease on the part of customers to work with the Postal Service.” The board, he added, has also looked at a “proposed methodology” for calculating the value of the Postal Service’s universal service obligation. The White House postal task force has recommended better defining the USO, which generally tasks USPS with providing a certain level of postal services at least six days a week. Beyond that, however, the task force has found the USO is based on the “interpretations of various laws, regulations, operating procedures and customs developed over time.”
Trends in Educational Attainment in the U.S. Labor Force -- The first graph shows the unemployment rate by four levels of education (all groups are 25 years and older) through April 2019. Unfortunately this data only goes back to 1992 and includes only two recessions (the stock / tech bust in 2001, and the housing bust/financial crisis). Clearly education matters with regards to the unemployment rate - and all four groups are generally trending down.Note: This says nothing about the quality of jobs - as an example, a college graduate working at minimum wage would be considered "employed". This brings up an interesting question: What is the composition of the labor force by educational attainment, and how has that been changing over time? Here is some data on the U.S. labor force by educational attainment since 1992. Currently, over 58 million people in the U.S. labor force (25 and over) have a Bachelor's degree or higher. This is 41.2% of the labor force, up from 26.2% in 1992.This is the only category trending up. "Some college" has declined recently, and both "high school" and "less than high school" have been trending down for some time.Based on current trends, probably more than half the labor force will have at least a bachelor's degree around 2030 or so. Some thoughts: Since workers with bachelor's degrees typically have a lower unemployment rate, this is probably a factor in pushing down the overall unemployment rate over time. Also, I'd guess more education means less labor turnover, and that education is a factor in fewer weekly claims.
Exclusive: Amazon rolls out machines that pack orders and replace jobs (Reuters) - Amazon.com Inc is rolling out machines to automate a job held by thousands of its workers: boxing up customer orders. The company started adding technology to a handful of warehouses in recent years, which scans goods coming down a conveyor belt and envelops them seconds later in boxes custom-built for each item, two people who worked on the project told Reuters. Amazon has considered installing two machines at dozens more warehouses, removing at least 24 roles at each one, these people said. These facilities typically employ more than 2,000 people. That would amount to more than 1,300 cuts across 55 U.S. fulfillment centers for standard-sized inventory. Amazon would expect to recover the costs in under two years, at $1 million per machine plus operational expenses, they said. The plan, previously unreported, shows how Amazon is pushing to reduce labor and boost profits as automation of the most common warehouse task – picking up an item – is still beyond its reach. The changes are not finalized because vetting technology before a major deployment can take a long time.
Weekly Initial Unemployment Claims Decrease to 212,000 -The DOL reported: In the week ending May 11, the advance figure for seasonally adjusted initial claims was 212,000, a decrease of 16,000 from the previous week's unrevised level of 228,000. The 4-week moving average was 225,000, an increase of 4,750 from the previous week's unrevised average of 220,250. The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 225,000. This was below the consensus forecast.
We are probably close (~500,000) to “full employment” -- From time to time over the past few years I have tried to estimate how far we were from “full employment,” by which I meant the average levels of the best year in each of the past two expansions. I also estimated how long it would take to get there given the then-current monthly gains in employment. For example, two years ago I estimated that we needed to add another 2.5 million people, or 1.5% of the labor force, to the employment rolls in order to be at “full employment.” Last August, I updated the figure to a shortfall of about 0.8%, and estimated that, if employment trends held, we would get to “full employment” in about 9 to 12 months from then, which would be sometime between now and the end of summer. Given the continuing very good jobs reports, I thought I’d take another look. First, here is the U6 underemployment rate. This includes, most importantly, involuntary part-time workers. For us to be at full employment, this figure ought to be at its 1999-2000 and 2006-07 levels: We have already surpassed the latter, and are only about 0.2% away from the former. On top of that, there are also people who aren’t even in the labor force, because they haven’t looked for work, but tell the Census Bureau that they do want a job now. In the below graph, I’ve divided that by the civilian labor force to tell us what percentage over and above the labor force fit in that category: Currently these are equivalent to a little under 3.2% of the total labor force. At its best average levels in the last two expansions, this number was 3.0%, in other words, we are also about 0.2% away. Put these two together and they add up to between 0.2% and 0.4% of the 170 million labor force, or in other words 340,000 to 680,000. If monthly employment gains continue to run about 100,000 over the number needed just to accommodate an increasing prime age population, that puts us about 7 months away. Meaning we should reach “full employment” by the end of this year. This, by the way, has implications for wages, because the closer we approach to “full employment,” the more employers will have to raise wages to entice people who aren’t currently in the labor force to decide to enter it. ———- P.S. Yes I know it is more complicated than that. In particular people seem to come off disability rolls and find employment if it is plentiful enough at decent pay: But at least some of that is probably reflected in the continuing elevated levels of underemployment and those who haven’t looked but have decided they now want a job. Also, I would expect that the prime age employment to population ratio will increase to over 80% as part of any further decrease in underemployment and job desirers who aren’t actively seeking employment.
BLS: Unemployment Rates in April at New Series Lows in Pennsylvania, Vermont, and Wisconsin - From the BLS: Regional and State Employment and Unemployment Summary: Unemployment rates were lower in April in 10 states and stable in 40 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Vermont had the lowest unemployment rate in April, 2.2 percent. The rates in Pennsylvania (3.8 percent), Vermont (2.2 percent), and Wisconsin (2.8 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.5 percent. This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976. At the worst of the great recession, there were 11 states with an unemployment rate at or above 11% (red). Currently only one state, Alaska, has an unemployment rate at or above 6% (dark blue). Note that the series low for Alaska is above 6%. Two states and the D.C. have unemployment rates above 5%; Alaska and New Mexico. A total of nine states are at the series low.
62% Of Millennials Are Living Paycheck To Paycheck, Says Study - Almost two-thirds of Millennials are living paycheck to paycheck, and only 38% feel financially secure, according to Charles Schwab's 2019 Modern Wealth Index Survey.According to the survey, Millennials (ages 23 to 38) seem troubled when it comes to their financial well being. The study examined the finances of 1,000 Americans from different generations, but for our sake, we're only concentrating on approximately 380 Millennials surveyed by Schwab. Millennials conveniently blamed social media platforms for their dire financial straits. The need to spend was a symptom of fear of missing out (FOMO) of their friend's experiences seen on social media posts, stories, and or feeds. "The burden to 'keep up with the Joneses' has been part of our culture for decades, but it appears that social media and the fear of missing out (FOMO) have increased the pressure to spend," said Terri Kallsen, executive vice president and head of Schwab Investor Services."Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem."Logica Research conducted the online study for Schwab during the first two weeks in Feburary. Facebook and Instagram, recently made it effortless for users to shop on their platforms. Instagram announced last month it added a "checkout" feature on posts. "Instagram is a place for people to treat themselves with inspiration, not a place to tax themselves with errands. It's a place to experience the pleasure of shopping versus the chore of buying. We build everything with this in mind," Instagram said in a statement. While it's not just a spending problem, Millennials have more debt than any other generation.
Back Row America -- I first walked into the Hunts Point neighborhood of the Bronx because I had been told not to. I had been told it was too dangerous and too poor, and that I was too white. I had been told that “nobody goes there for anything but drugs and prostitutes.” The people telling me this were my colleagues (other bankers), my neighbors (other wealthy Brooklynites), and my friends (other academics). All, like me, successful, well-educated people who had opinions on the Bronx but had never been there. It was 2011, and I was in my eighteenth year as a Wall Street bond trader. I spent my work days sitting behind a wall of computers, gambling on flashing numbers, on a downtown Manhattan trading floor filled with hundreds of other people who did exactly the same thing. My home life was spent in a large Brooklyn apartment, in a neighborhood filled with other successful people. I wasn’t in the mood to listen to anyone, especially other bankers, other academics, and the educated experts who were my neighbors. I hadn’t been for a few years. In 2008, I had just seen where hubris—my own included—had taken us, and what it had cost the country. Not that it had actually cost us bankers, or my neighbors, much of anything.I was in the habit of taking walks, sometimes as long as fifteen miles, to explore and reduce stress, but now my walks began to evolve. Rather than setting out with some plan to walk the entire length of Broadway, or along the length of a subway line, I started walking the less-seen parts of New York City. Along the way, I talked to anyone who talked to me. I used my camera to take portraits of people I met. What I started seeing and learning was just how cloistered and privileged my world was—and how narrow and selfish I was. Like most successful and well-educated people, especially in New York City, I considered myself open-minded, considerate, and reflective about my privilege. I read three papers daily, I watched documentaries on our social problems, and I voted for and supported policies that I felt recognized and addressed my privilege. I gave money and time to charities that focused on poverty and injustice. I understood that I was selfish, but I rationalized. Aren’t we all selfish? Besides, I am far less selfish than others. Look at how I vote (progressive), what I believe in (equality), and who my colleagues are (people of all races from all places).
The Lost Ones: The Opportunities and Outcomes of White, Non-College-Educated Americans Born In The 1960s - Although the US economy has grown substantially over the last half century, there is no disputing that the benefits of this growth have been unevenly distributed. There is also solid evidence that some segments of the population are actually worse off than their counterparts of earlier generations. One recent study (Guvenen et al. 2017) finds that the median lifetime income of men born in the 1960s is 12–19% lower than that of men born in the 1940s. Another highlights that the share of medical expenses to consumption has approximately doubled every 25 years since the 1950s (Hall and Jones 2007). And Case and Deaton (2015, 2017) have started an important debate by showing that the mortality rate of white, less-educated, middle-aged men has been increasing since 1999. While very suggestive, changes in lifetime income tell us little about what has happened to wages. And differences in how medical expenses and mortality have changed for married and single men and women can also influence the strength of their ultimate impact on couples, and on singles of both genders. In recent research (Borella et al. 2019), we compare life outcomes of two cohorts born 20 years apart to explore these issues, and we find that, indeed, the American dream – the idea that regardless of background, every child can prosper as an adult – has undeniably vanished for the more recent generation of white, less-educated Americans. We compare wages, medical expenses, and life expectancy for white, non-college-educated single and married men and women born in the decade around 1940 with those of their counterparts born 20 years later – a cohort 49 to 58 years old as of 2014. We then analyse how those differences have affected these two cohorts’ labour market outcomes and how they will affect their lives in retirement. Our goal is to better measure these important changes in lifetime opportunities and uncover their effects on the labour supply, savings, and welfare of a relatively recent birth cohort using a structural model. In brief, we find a profound deterioration in lifetime opportunities. Inflation-adjusted wages declined for non-college-educated white men. And while wages increased for women, it is only because their human capital (education and labour market experience) drastically increased over this time period. These men and women – who make up 60% of their age group – are also expected to face much higher out-of-pocket medical expenses in retirement and large decreases in life expectancy compared with their earlier counterparts. They would have been much better off if they had faced the corresponding lifetime opportunities of the 1940s birth cohort.
Flint Gave Contract To Firm With Allegedly No Pipe Replacement Experience - The company Flint, Michigan, hired to replace lead water pipes had no experience with the work, according to a councilwoman and a contractor, despite that the city has received more than $600 million in state and federal aid for its water crisis.And the city ignored a model showing where lead pipes are and paid to dig up every yard, the vast majority of which had copper pipes, according to meeting minutes. The city also prohibited contractors from using an efficient method of digging holes known as hydrovac excavation, Flint Councilwoman Eva Worthing told The Daily Caller News Foundation. That leveled the playing field for a contractor, WT Stevens, with no experience or the appropriate equipment — and let it bill far more to taxpayers, she says. All of these factors, she adds, needlessly led to more waiting for anyone who actually has lead pipes.Huge amounts of aid dollars — including $100 million from the Environmental Protection Agency — have flowed to the small city of 90,000 residents to address lead in its water supply, even though it doesn’t have a chief financial officer and, until recently, its finance chair was a gun felon.The federal money “should be a good thing for the city,” Worthing told TheDCNF, “but given the mismanagement of the pipe replacement program, I am concerned that it’s not going to get used properly.” The city “chose to dig up yards that they knew were copper, and they decided to hand dig instead of hydrovac,” Worthing told TheDCNF. “That was because WT Stevens didn’t have the ability, and you get more money [digging by hand]. It costs $250 [to hydrovac] versus thousands” to dig a large hole without the equipment.
More Ridiculous Civil Asset Forfeiture Shenanigans - …Imagine dropping your car off at the local mechanic because you need to get your engine tuned up. A few days later you come back to pick up your car, only to find out that it has been impounded by the police. That’s what happened to one couple in Chicago. It turned out that one of the mechanics took their car out for a joy ride. He was driving too fast, was pulled over, and arrested for driving without a license. The police then impounded the vehicle, even though it wasn’t his. The couple went down to the police station to get their vehicle back, but the police insisted that they pay thousands of dollars, even though they did nothing wrong. Meanwhile, the police are charging them storage fees to keep the vehicle in the impound parking lot. The couple managed to scrap together the money to have their vehicle released… only to find out that the police had already sold it at an auction! This wasn’t an isolated incident either. The City of Chicago does this countless times per year, for offenses as minor as littering and playing loud music. (Chicago brings in about $28 million per year impounding cars and running up storage fees.) Now the Institute for Justice is helping the couple lead a class action lawsuit challenging this Civil Asset Forfeiture racket. They argue the scheme violates due process, by forcing innocent vehicle owners to account for crimes drivers committed. Plus, holding the vehicles ransom until fines are paid is an unconstitutional seizure.
A reporter declined to reveal his source. Then police showed up at his front door with guns. WaPo - Bryan Carmody, a freelance reporter in San Francisco, awoke Friday to the sounds of someone trying to break into his house. About 10 officers from the San Francisco Police Department were bashing the front gate of his home in the Outer Richmond neighborhood with a sledgehammer, he said. It was just after 8 o’clock in the morning. Carmody called out and said he would let them into the house. The officers showed him a search warrant and proceeded to go through his home — from “top to bottom” he says — with their guns drawn. “They treated me like I was some kind of drug dealer," he said in an interview with The Washington Post. Carmody was being raided in connection with a criminal investigation. Two weeks before, police investigators showed up at his home to ask him, politely he says, to identify the source who provided him with a confidential police report about the February death of the city’s public defender, Jeff Adachi. Carmody, who said he worked with three local television news stations on the story, declined. He wasn’t about to give up his source on Friday either, despite the escalation — not to the police or two FBI agents in suits who questioned him about the case, he said. “I just kept saying ‘lawyer, lawyer, lawyer.' ” So he stayed handcuffed for the next six hours, he says — a certificate of release from the police department that he distributed says he was in custody from 8:22 a.m. until 1:55 p.m. — as investigators searched his home, then his office, where they found the report in a safe. “There’s only two people on this planet who know who leaked this report — me and the guy who leaked it,” Carmody said.
Texas Passes Bill to End the Shackling of Pregnant Women in Prison — The Texas Senate unanimously passed a bill Friday that would end the shackling of pregnant women in prison and would provide female inmates with more — and higher quality — menstrual products.House Bill 650, authored by Rep. James White, R-Hillister, is a comprehensive bill that addresses many issues related to the conditions of the state’s incarcerated women. The bill gained bipartisan support from nine co-authors and was approved by the House last month.Under current law, Texas Department of Criminal Justice facilities are prohibited from shackling women during labor and while they are recovering from delivery, but they can still be shackled at any other time. White’s bill would prevent shackling after a woman’s pregnancy is confirmed by a medical professional. While TDCJ already provides women with feminine hygiene products each month, women have reported that the tampons are uncomfortable to use and that they often don’t have enough pads to last through the month. White’s bill would require TDCJ to provide regular or large sized pads with wings and regular or large sized tampons. The bill would also require the department to offer up to 10 free feminine hygiene products to women each day.The bill’s other proposals include requiring that a mother remain with her newborn for 72 hours after giving birth and requiring the Texas Department of Criminal Justice to conduct a study on visitation policies for inmates who are parents.
Alito slams Supreme Court order blocking execution of Buddhist inmate - A pair of Supreme Court justices on Monday issued new statements on a March ruling that blocked the execution of a Texas inmate who was not permitted to have a spiritual adviser present at this death.The court had ruled in favor of the inmate, Patrick Henry Murphy, who was convicted for the murder of a police officer. Murphy, a Buddhist, had requested that his spiritual adviser be present in the room at the moment of his death, but previous Texas state policy blocked chaplains who are not employees of the state from being present during executions.Justice Brett Kavanaugh had sided with the liberal justices in the order, stating that it was unconstitutional to allow spiritual advisers for some religions but not all.But in a new opinion issued Monday, Justice Samuel Alito wrote that he believed the court’s ruling in the case was “seriously wrong.”The justice criticized Murphy’s lawyers for not filing his request that the Supreme Court stay his execution on religious liberty ground until about six hours before the scheduled execution. And he claimed that by ruling in the inmate’s favor, “the Court invites abuse.” “If the tactics of Murphy’s attorneys in this case are not inexcusably dilatory, it is hard to know what the concept means,” Alito wrote.
Offended By What Someone Said? Now You Can Report Them To Law Enforcement - Watch what you say, because the person sitting next to you could be reporting you to law enforcement.Gone are the days when Americans were unafraid to voice their opinions or make snide comments in public. Because DIGIT Labs will turn smartphones into bias reporting devices.According to a PHYS.org article, DIGIT LAB's new app allows strangers to report someone for exercising their first Amendment rights. "The first of its kind, the app accepts reports beyond crimes captured in police records. Users from around the country can document all incident types, from derogatory epithets written in bathrooms to slurs yelled from a car window in addition to violent assaults." This app will make swearing at a fellow motorist or flipping someone off: hate speech.
After shouting “I’m pregnant,” woman fatally shot by Texas police officer - A Texas police officer shot and killed a 44-year-old African-American woman Monday night at an apartment complex in Baytown, Texas, a suburb of Houston. Police later identified the woman as Pamela Shantay Turner. According to family members, she had two children and three grandchildren. Video recorded by a bystander and posted to Snapchat quickly went viral overnight, prompting widespread outrage at the horrific killing. The video begins showing a single officer attempting to arrest Turner, who protests, shouting, “I’m walking! I’m actually walking to my house!” As she attempts to free herself, she repeatedly yells, “You’re actually harassing me!” The officer, who remains silent throughout the video, then seemingly fires a Taser at Turner, who falls to the ground. As he nears and tries to restrain her, she pleads, “Why? Why? I didn’t do nothing to you,” and then shouts, “I’m pregnant!” After a brief struggle, the officer pulls back several paces and immediately begins shooting, firing five times in rapid succession as Turner remains on the ground. Police Lt. Steve Dorris said Turner was struck by at least one of the shots and was subsequently pronounced dead at the scene. According to police, the officer had previously had exchanges with Turner and attempted to arrest her Monday night allegedly knowing that she had active warrants. The department has made clear its anger that Turner’s killing was independently videoed and shared on social media. Dorris has issued thinly veiled threats, saying that they are searching for whoever filmed it and denouncing them for posting the video to social media.
FBI Uncovers Terror Training Camp in Alabama - FBI investigators have found a training compound in Alabama linked to a group of suspected homegrown terrorists. According to a report by the Sinclair Broadcast Group, an FBI search warrant described the property in Macon County, Alabama, as a “makeshift military-style obstacle course.” Identified in reports as a “homegrown Islamic terror compound,” it allegedly belongs to a group led by 40-year-old Siraj Wahhaj, an imam indicted on federal charges related to firearms violations and terrorism. Breaking: The FBI has uncovered a terror training camp in Macon County, Alabama. The group responsible for the camp was led by Siraj Wahhaj. Wahhaj managed a New Mexico terror compound uncovered last year, which trained children to carry out attacks. pic.twitter.com/fGhArw02yU — Porter Medium (@PorterMedium) May 11, 2019 Wahhaj and four other suspects Jany Leveille, 36, Hujrah Wahhaj, 38, Subhanah Wahhaj, 36, and Lucas Morton, 41, face a range of firearms and terrorism-related charges amid accusations they conspired to support planned attacks on U.S. law enforcement officers and other government employees.
Two Recent Studies, Children of Incarcerated Parents and the Long Run Effects of Student Debt - May each year sees the arrival of the Papers and Proceedings volume of the American Economic Review, containing short and sometimes punchy gleanings from the previous ASSA meetings. Here are two abstracts of interest. I haven’t gone through the papers themselves, so I can’t vouch for their methodologies, but the results they claim to have found are politically important.
- Title: Student Debt and Labor Market Outcomes: We study the impact of student debt on various labor market outcomes, namely, income, hourly wages, and hours worked. Using the NLSY97 and a difference-in-difference approach, we find statistically significant differences in labor market outcomes for individuals who received a student loan versus those who received no student loan. We find that the difference in post- versus pre-college income is 8-9 percent higher for individuals that received a student loan relative to individuals who received no student loan. Further, we find evidence that this higher income is due to higher work hours.
- Title: The Child Left Behind: Parental Incarceration and Adult Human Capital in the United States: Exposure to parental incarceration is particularly prevalent in the United States, where about 7 percent of children have lived with a parent who was incarcerated. In this paper, I use nationally representative US data and apply partial identification methods to bound the likely effects of parental incarceration on education and labor market outcomes. Findings suggest that parental incarceration leads to substantially higher rates of high school dropout. Results provide some support for negative effects on likelihood of college degree attainment and employment in young adulthood. This work has important implications for criminal justice policy and social policies toward children.
The Federal Government Has Poured Millions into Failing Charter Schools in Louisiana - According to a recent report, up to $1 billion of the money given out nationwide by the CSP was wasted on charter schools that never opened, or opened and then closed because of fraud, poor performance, financial mismanagement, and other reasons. The report “Asleep at the Wheel: How the Federal Charter Schools Program Recklessly Takes Taxpayers and Students for a Ride” was published by the Network for Public Education and written by this author and Carol Burris, NPE’s executive director.In compiling our report, we found the grant program that provides federal dollars to state departments of education, or other approved “state entities,” is the largest of the CSP funding streams and presents some of the worst examples of federal tax dollars being wasted on charter schools that failed. Louisiana has one of the worst records for slipshod management of its federal grants.In a follow-up to our report, Burris looked at the grants given to create and expand charter schools in Louisiana between 2006 and 2014. She found that of the 110 charters that received the money, at least 51 (46 percent) were closed. Some may have never opened at all, but because the Louisiana Education Department doesn’t provide a list of closed schools, that figure is unknown. The total amount of money given to those closed and never-opened schools is at least $23,819,839.00. While the numbers alone are startling and a cause for concern, individual examples of charters in Louisiana that received CSP money and then closed throw into further doubt the prudence of using federal seed money to spread schools that open and close, repeatedly, and fund charter organizations that churn through districts and neighborhoods without any obvious regard for what parents and local officials want. One of the examples I singled out from Burris’ research is Benjamin Mays Prep School in New Orleans, which received a $600,000 CSP grant. Mays Prep had long-standing academic issuesandpersistent budget shortfalls. The school had to move to a different building in 2012 and then lost that location in 2014 when its charter wasn’t renewed and a different charter moving into the space refused to enroll the Mays students. The school closed officially in 2014. Another New Orleans charter, Miller McCoy, received a $600,000 CSP grant but eventually closed in 2014 after “a long downward spiral,” according to a local news source. The charter school’s two founders left in 2012 under alleged ethics allegations, and the school had a series of unsuccessful leaders after that. An “F” academic rating from the state seemed to have been the final straw.
San Francisco Board of Education to decide on the fate of historic murals said to be “offensive” - The San Francisco Board of Education is currently considering the removal and destruction of 83-year-old murals depicting the life of George Washington, which treat the issues of slavery and Native American genocide. The campaign against the art work is censorious and deeply misguided, bound up with contemporary identity politics, and has nothing progressive about it.Thirteen murals in total have covered the walls of George Washington High School since its opening in 1936, two of which have been the subject of complaints since the 1960s. The debate has re-emerged over the last couple of years due to the possibility of the school’s designation as a historical landmark, an action that would make the murals very difficult to remove.The works were created shortly before the opening of the school by renowned artist Victor Arnautoff, a Russian immigrant, as a project of the federal government’s Works Progress Administration (WPA). The complaints against the high school murals—produced during a period when left-wing views dominated artistic circles in San Francisco, a city that had experienced a historic general strike only two years earlier, in July 1934—are wrongheaded from every point of view. In one of the disputed murals, a dead Native American is shown on the ground in a scene depicting the westward expansion of US capitalism in the mid-19th century. The mural is obviously intended to shed light on the forced removal and mass destruction of the Native American population and offers a critical view that was previously often neglected or ignored in American schools. In the second controversial mural, slaves belonging to George Washington are shown working in the fields at Mount Vernon, Washington’s estate in Virginia, and presumably being bought or sold at auction. In other words, Arnautoff’s work was hardly hagiographic. It attempted to present the contradictory reality of early American life.
School sparks outrage for Middle Eastern headwear in active shooter training -- A Pennsylvania school district has come under fire for an active shooter drill video that had a teacher pretending to be a shooter and wearing what was meant to be a Middle Eastern headdress. The video, which was filmed in January, shows an active shooter drill intended to practice emergency protocol and “build confidence in the staff members’ awareness of how to respond to an emergency,” the Penn-Trafford School District, which is located just east of Pittsburgh, wrote in an online statement posted on Wednesday. In the video, two teacher volunteers were given “costumes and accessories” from an active shooter drill consultant group to “alter their appearance so that they were not readily recognizable,” the statement reads. One volunteer, seen in screen grabs of the video that were posted on social media, wore a zip-up jacket and “long blonde wig with a scarf tied around his neck and head and a paintball/tactical mass over his face,” the statement says. During the roughly seven-minute video, what appear to be armed police officers confront the man in the headdress, pointing their weapons at him. “Show me your hands,” the officers yell. Minutes later, the officers escort him down a hallway with his hands behind his back. The video sparked backlash from social media users, including district alumni. One user, who says she’s an alumna, called the incident “unacceptable.” Another called it “moronic on so many levels.”The district says there was “no intent to represent any particular culture or religion.”
Ohio School Closed After Enriched Uranium Found Inside - An Ohio school has been forced to close for the remainder of the academic year after enriched uranium was discovered inside. Neptunium 237—a byproduct of nuclear reaction and plutonium production—was also detected inside Zahn's Corner Middle School in the town of Piketon, about 80 miles east of Cincinnati, WLWT reported.Both substances are radioactive, and extended exposure to them can cause cancer. The middle school serves about 320 students, and officials have been working to determine the source of the contamination and establish its extent. They have not ruled out a longer school closure. Scioto Valley Local School District Superintendent Todd Burkitt made the decision to close the school on Monday. “Even the last couple of hours have been very hectic. There's just not a playbook in how we deal with this. We're kind of writing the script as we go. We're not going to take any chances on someone's child. We just won't do that,” Burkitt told WLWT. The state department of education said that the affected students had already fulfilled their necessary classroom hours for the year, so would not need to make up the missed days once the uranium issue had been addressed. The source of the enriched uranium remains unclear. According to WLWT, some local residents suggested that the nearby Portsmouth Gaseous Diffusion Plant—located 2 miles from the school—might be responsible. The facility previously produced enriched uranium, including weapons-grade uranium, for the United States Atomic Energy program and for use in U.S. nuclear weapons. Uranium enrichment at the site ended in 2001.
Ohio High School Protects Sensitive Children By Ditching Valedictorian And Salutatorian Honors --A High School in Mason, Ohio has eliminated their valedictorian salutatorian honors in order to help the "mental wellness" of other students," according to Fox19. Instead of the two honors bestowed on the two highest achievers, Mason High School located in a Cincinnati suburb will stick with the Latin honors system - awarding students with a 4.0 GPA summa cum laude, those with a 3.75 - 3.99 GPA magna cum laude, and those with a GPA between 3.51 and 3.74 as cum laude. The school is also going to begin classes 30 minutes later next year, and are also considering reducing the amount of homework after school and during summer vacation.If only the real world were so accommodating! "This will help reduce the overall competitive culture at MHS to allow students to focus on exploring learning opportunities that are of interest to them," said Principal Bobby Dodd."Currently, we’ve recognized one valedictorian and one salutatorian based upon the ranking of students according to their weighted GPA. Although Mason High School utilizes class rank to determine these graduation honors for each senior class, the ranking of students is not reported to colleges. The paradoxical nature of class rank within the culture of MHS does nothing to decrease the competition among students." Whatever that means.
SAT to begin scoring 'adversity' of students - The College Board reportedly plans to assign an “adversity score” to each student who takes the SAT, providing information on student's social and economic background. The data point, which would be calculated using more than a dozen factors, comes as college admissions boards face scrutiny for their selection processes, The Wall Street Journal reports. Among the categories included in the calculation are the crime rate in a student’s neighborhood, their family’s median income and the rigor of their school’s curriculum, according to the Journal. Students’ scores can range from 1 to 100, with 50 being average, above 50 representing an element of adversity and anything below 50 representing a degree of privilege, the newspaper reported. The students themselves won’t know what scores they get, but colleges will see the information. “There are a number of amazing students who may have scored less [on the SAT] but have accomplished more,” David Coleman, chief executive of the College Board, told the Journal. “We can’t sit on our hands and ignore the disparities of wealth reflected in the SAT.” The move comes amid fierce debate around the role of race in college admissions, as well as the inequalities within the education system that can oftentimes be attributed to socioeconomic factors. Some groups are welcoming the new system as a means of expanding the playing field, while others argue that it promotes reverse discrimination, the Journal noted. The change comes after higher education institutions such as Yale University have already tried — and, in some cases, succeeded — in using adversity scores to increase campus diversity. Still, other institutions, including Harvard University, are named in ongoing lawsuits alleging unfair admissions practices, and a far-reaching college admissions scandal has revealed the role cheating can play in SAT scores and acceptances to schools.
Felicity Huffman Pleads Guilty In College Admission Scandal, Faces Jail Time - One of the biggest profile names caught up in the largest college admissions scandal ever, actress Felicity Huffman, has pled guilty today, according to Bloomberg and Reuters. She now faces prison time. Huffman, who once starred in the television series "Desperate Housewives", pled guilty in Boston federal court to a conspiracy charge for paying $15,000 to have somebody secretly correct her daughter's SAT entrance exam answers. She is the latest in a line of defendants who have pled guilty as a result of the scandal. Huffman's daughter scored a 1420 on her SAT, 400 points higher than her Preliminary SAT exam a year earlier. Huffman is said to have discussed the scheme on a recorded phone call with the scheme's mastermind, William "Rick" Singer. Huffman is married to actor William H. Macy and was nominated for an Oscar for "Best Actress" in 2005.She’s among 50 total people accused in taking part of a scheme by Singer that involved cheating, bribing test proctors, and bribing athletic coaches to help parents gain preferred admission spots at universities like Yale, Georgetown and USC for their children.In an April statement, Huffman said: "I am in full acceptance of my guilt, and with deep regret and shame over what I have done, I accept full responsibility for my actions and will accept the consequences that stem from those actions. I am ashamed of the pain I have caused my daughter, my family, my friends, my colleagues and the educational community. I want to apologize to them and, especially, I want to apologize to the students who work hard every day to get into college, and to their parents who make tremendous sacrifices to support their children and do so honestly." The scheme's mastermind, Singer, pled guilty in March to charges that he facilitated the cheating and helped bribe coaches. He has since been cooperating with the government. Huffman was scheduled to plead guilty alongside of another parent, California businessman Devin Sloane, who is accused of paying Singer $250,000 to help his oldest son gain admission to USC as a purported recruit for the school's water polo team.
Son Of Father Who Paid $400,000 For College Admission Bribe, Now Suing Georgetown -About a week ago, we profiled the story of Stephen Semprevivo, who recently struck a deal with prosecutors and pled guilty to conspiracy to commit mail fraud and honest services mail fraud as part of the biggest college admissions scandal in history. He was the third parent and the eighth overall defendant to plead guilty in a scandal that continues to have wide-ranging aftershocks. Another 11 parents have agreed to plead guilty, but will have to wait until their hearings toward the end of the month to have their pleas ruled on. But why should Semprevivo pleading guilty to a $400,000 bribe mean that his son shouldn't keep going to Georgetown? At least, that's the logic his son is following: he sued the university for "threatening to revoke his academic credits and possibly expel him". The suit was first reported on by Aaron Leibowitz of Law360. In the suit, Semprevivo claims that he knew nothing about his father's conduct until charges were filed. He says that Georgetown opened an investigation into his admission and hasn't allowed him to withdraw and/or transfer to a different university. The suit alleges that Georgetown hasn't carried out the investigation according to its policies and claims that the school should have known about discrepancies in his application in 2017. The suit reads: "The threatened expulsion and loss of credits, predicated on numerous material violations of the contract between Semprevivo and Defendant, has precluded Semprevivo from receiving a degree from Georgetown, deprived his family of over $200,000 (in tuition already paid), and may forever bar Semprevivo from transferring his earned credits to another university." Hours after the suit was filed, Georgetown reportedly notified the younger Semprevivo that he, along with another student, were going to be expelled from the university, according to USA Today. Semprevivo's lawyer said: "We filed the lawsuit at 2 a.m. Less than 10 hours later, they make a decision. Yesterday, we were saying, please come participate in the process. So is due process to rescind him?"
Fewer Kids Are Choosing College - In the spring semester of 2011, there were 5,560 students enrolled at Indiana University Northwest in Gary, Indiana. Now it’s just 3,556 — a 36% drop. Some of this decline can be explained by demographics. Five percent fewer people graduated from high school in the Midwest in 2017-2018 than in 2009-2010, according to the Western Interstate Commission for Higher Education, and in and around shrinking, aging Gary — an industrial city that’s part of the Chicago metropolitan area — the downtrend may be even steeper. A much bigger factor, though, seems to be the job market in the Chicago area, which is a lot healthier now than it used to be, with the unemployment rate down from 11.6% in March 2010 to 4.1% this March. “At our campus and similar regional campuses, it looks like every one-percentage-point change in the unemployment rate leads to a 5% change in enrollment,” says IU Northwest economics professor Micah Pollak. But enrollment rates are down nationwide, too. According to the National Center for Education Statistics, the share of high school graduates going directly to college fell from an all-time high of 70.1% in 2009 to 66.7% in 2017. This decline has affected some kinds of colleges much more than others. By far the hardest-hit has been the for-profit sector, which nearly quintupled in size in the 2000s, gained a bad reputation for saddling students with big debts for dubious credentials, and has been reeling since, with a 71% drop in enrollment from fall 2010 to fall 2016. State and nonprofit private schools — which together account for 94% of higher-education enrollment in the U.S. — haven’t seen declines like that. But there has been a marked divergence between higher-status schools and lower-status ones. Within the Indiana University system, the flagship campus in Bloomington has seen a 2% increase in enrollment since 2011, while the commuter-oriented regional campuses such as IU Northwest have almost all experienced big declines. Nationwide, the enrollment rate is up for four-year colleges but down for two-year colleges. Cyclical economic forces would again seem to explain most of this. At one end of the spectrum, better economic times mean that some high school graduates who a few years ago would have stayed close to home for school can now afford an on-campus four-year college experience. At the other end, the strong job market is giving those for whom the decision between attending college and immediately entering the workforce is the closest call lots of reason to choose the latter. In both cases, it is the for-profit schools, community colleges and commuter schools that lose out.
Harvard’s First Black Faculty Deans Let Go Amid Uproar Over Harvey Weinstein Defense — Harvard said on Saturday that a law professor who is representing Harvey Weinstein would not continue as faculty dean of an undergraduate house after his term ends on June 30, bowing to months of pressure from students. The professor, Ronald S. Sullivan Jr., and his wife, Stephanie Robinson, who is a lecturer at the law school, have been the faculty deans of Winthrop House, one of Harvard’s residential houses for undergraduate students, since 2009. They were the first African-American faculty deans in Harvard’s history. But when Mr. Sullivan joined the defense team of Mr. Weinstein, the Hollywood producer, in January, many students expressed dismay, saying that his decision to represent a person accused of abusing women disqualified Mr. Sullivan from serving in a role of support and mentorship to students. Mr. Weinstein is scheduled to go to trial in September in Manhattan on rape and related charges. As the protests continued, with graffiti aimed at Mr. Sullivan appearing on a university building, Harvard administrators said they would conduct what they called a climate review of Winthrop House. In recent weeks, tensions have escalated, with a student sit-in and a lawsuit sparked by a clash between one of the protest leaders and two Winthrop House staff members who were seen as supporting Mr. Sullivan. On Saturday, the dean of Harvard College, Rakesh Khurana, sent an email to students and staff members at Winthrop House, informing them that he would not renew the appointments of Mr. Sullivan and Ms. Robinson as faculty deans after their terms end on June 30. Mr. Khurana said in his email that the decision was informed “by a number of considerations.” “Over the last few weeks, students and staff have continued to communicate concerns about the climate in Winthrop House to the college,” he wrote. “The concerns expressed have been serious and numerous. The actions that have been taken to improve the climate have been ineffective, and the noticeable lack of faculty dean presence during critical moments has further deteriorated the climate in the house. I have concluded that the situation in the house is untenable.”
Education Secretary Betsy Devos Hires Private Accounting Firm to Audit the Student Loan program: Asking For Bad News -Secretary of Education Betsy Devos hired McKinsey & Company, a global consulting firm, to audit the federal student loan program. Why did she do that? After all, the Congressional Budget Office, the Government Accountability Office or the Inspector General could have done the job. Why hire a private firm?I'm thinking Secretary DeVos and the Trump administration realize the federal student-loan program is under water. They know the news is bad, but they want to know just how bad it is. After all, Secretary DeVos compared the program to a looming thunderstorm in a speech she made last November.It took 42 years, DeVos pointed out, for the federal student-loan portfolio to reach half a trillion dollars (1965 until 2007). It took only 6 years--2007 to 2013--for the portfolio to reach $1 trillion. And in 2018--just five years later--the federal government held $1.5 trillion in outstanding student loans. In fact, uncollateralized student loans now make up 30 percent of all federal assets. This wouldn't be a problem if student borrowers were paying off their loans. But they're not. As DeVos candidly admitted last November, "only 24 percent of FSA borrowers—one in four—are currently paying down both principal and interest." One in five borrowers are in delinquency or default, and 43 percent of all loans are "in distress" (whatever that means). Although DeVos did not say so explicitly, she basically acknowledged that we've arrived where we are because the government is cooking the books. Student loans now constitute one third of the federal balance sheet. "Only through government accounting is this student loan portfolio counted as anything but an asset embedded with significant risk" DeVos said. "In the commercial world, no bank regulator would allow this portfolio to be valued at full, face value."
What’s Scarier Than Student Loans? Welcome to the World of Subprime Children - NYT -- Student debt in the United States is over $1.5 trillion, with half of it accumulated in the past decade. Income share agreements — in which borrowers pledge a percentage of future income against debt — present the first plausible alternative. That’s what we should be afraid of. Income share agreements, or I.S.A.s, began as an experimental model of education funding. One of the first income share programswas designed in the 1970s with the help of the Nobel Prize-winning economist James Tobin at Yale. It was poorly structured in a number of ways — students signed on as a class and kept paying until the whole debt was gone, but wealthier graduates who were able to pay a large chunk at once could opt out — and it closed down (without full repayment) in 2001. One big problem with I.S.A.s is that there is no collateral to these loans. You can’t repossess a classics degree. And as Gary Becker, the University of Chicago neoliberal economist, once lamented, “courts have frowned on contracts which even indirectly suggest involuntary servitude.” Purdue and a few other universities have come up with I.S.A. programs that could point the way forward. They assess different rates and repayment durations depending on the borrower’s major. If you’re a chemical engineering major at Purdue, you enjoy better terms than if you study English: Under its I.S.A. schedule, chemical engineers are expected to repay $33,000 at the rate of about 8.5 percent of their income for seven years and four months, while for English majors it’s almost 15 percent for nine years and eight months. But these university I.S.A.s are meant to supplement rather than replace student loans. Now private capital is starting to find its way into I.S.A.s, through a handful of online computer science training programs. With names like Pathrise, Thinkful and the Lambda School, these “career accelerators” provide tech companies with certified coders and provide participants with a credential in months, not years. Students in these programs can pay by way of an I.S.A. that is financed and serviced by investors gathered under their own Silicon Valley-style names like Leif. By my estimate, the private I.S.A. sector has yet to reach 1 percent of the $100 billion-plus in annual higher-education lending, but it’s growing fast.
Left Unveils New Plan To Allow Cancellation Of Student Loans In Bankruptcy - One of the most frustrating features of student loan debt for the millions of American students struggling to pay it down is the fact that it's extremely difficult to discharge the debt in bankruptcy. Americans can typically shed medical debt, credit-card debt and other obligations, but in most cases, their student loans will follow them to their grave. Given the massive outstanding notional value of mostly-federally-backed student loans ($1.5 trillion and counting), Elizabeth Warren's plan to cancel $640 billion of the debt was applauded by millions of students who see no other way out from under the burden, while pretty much everyone else was left wondering where their next handout would come from, or whether the government would reimburse them for the loans they've already paid off. But perhaps after recognizing that mass student loan defaults could pose a systemic threat to the financial system if millions of students simply stop making payments, expecting the loans would simply be forgiven, Warren appears to have pivoted to a different strategy. In partnership with Sen. Dick Durbin, Warren has introduced the "Student Borrower Bankruptcy Relief Act of 2019", a Senate bill that would amend American bankruptcy law to allow student debt to be forgiven during bankruptcy.Though a similar bill was introduced in the House back in 2017, this marks the first time the Senate has taken a run at it. Here's more from a press release issued by Durbin's office. "Filing for bankruptcy should be a last resort, but for those student borrowers who have no realistic path to pay back their crushing student loan debt, it should be available as an option to help them get back on their feet," Durbin said. Meanwhile, a group of House Democrats led by Jerry Nadler introduced a corresponding bill in the House.
Warren, Nadler introduce bill to allow student loan borrowers bankruptcy relief - The Hill - A bipartisan group of lawmakers on Thursday introduced legislation to make bankruptcy relief available for student loan borrowers. Sens. Elizabeth Warren (D-Mass.) and Dick Durbin (D-Ill.), along with Reps. Jerrold Nadler (D-N.Y.), John Katko (R-N.Y.) and Joe Neguse (D-Colo.) introduced the Student Borrower Bankruptcy Relief Act of 2019, which would treat student loan debt like other types of consumer debt, according to a Friday statement. “Long before I came to the Senate, I fought my heart out to keep student loans dischargeable in bankruptcy. But over and over again, Congress chipped away at this critical protection for student loan borrowers,” Warren said. "The Student Borrower Bankruptcy Relief Act fully restores this protection." “Americans across the nation are facing crushing student loan debt that is preventing them from purchasing homes and living the true American dream," Nadler said in the statement. "We must ensure that Americans are able to invest in their education and then go on to live quality lives without the cloud of rising debt hanging over their heads." Warren is among more than 20 people vying for the Democratic Party's 2020 presidential nomination. Fellow candidates Rep. Eric Swalwell (D-Calif.) and Sens. Kamala Harris (D-Calif.), Bernie Sanders (I-Vt.) and Amy Klobuchar (D-Minn.) have co-sponsored the bill.
U.S. Births decreased in 2018, "Lowest number of births in 32 years" -- From the National Center for Health Statistics: Births: Provisional Data for 2018. The NCHS reports: The provisional number of births for the United States in 2018 was 3,788,235, down 2% from 2017 and the lowest number of births in 32 years. The general fertility rate was 59.0 births per 1,000 women aged 15–44, down 2% from 2017 and another record low for the United States. The total fertility rate declined 2% to 1,728.0 births per 1,000 women in 2018, another record low for the nation. Birth rates declined for nearly all age groups of women under 35, but rose for women in their late 30s and early 40s. The birth rate for teenagers aged 15–19 was down 7% in 2018 to 17.4 births per 1,000 women; rates declined for both younger (aged 15–17) and older (aged 18–19) teenagers. Here is a long term graph of annual U.S. births through 2018.Births have declined for four consecutive years following increases in 2013 and 2014. With fewer births, and less net migration, demographics will not be as favorable as I was expecting a few years ago. There is much more in the report.
New Study in US Finds Patients With Private Insurance Pay Nearly 3x What Medicare Patients Would Pay - A new study on hospital prices from the RAND corporation finds that patients with private insurance in Maine pay nearly three times what Medicare would pay for the same service. The nonprofit think tank is urging employers to use the findings to push for lower costs in their health plans, but the Maine Hospital Association says the study findings come with caveats. The RAND study evaluated hospital claims data in 25 states. Senior Policy Researcher Chapin White says that in 2017, the prices paid to hospitals overall averaged about 241 percent of what Medicare would have paid. In Maine, the average price was even more: 283 percent. "Maine is definitely on the higher end among the states we looked at," White says. States on the lower end, like Pennsylvania and New York, paid average prices that were between 150 to 200 percent of Medicare payments. White says it is difficult to say what is a reasonable price for private insurers to pay compared to Medicare. The benefit of the study, he says, is that employers — who have historically been kept in the dark about prices — can use it as a reference point to start asking their health plans how much they are paying for services. "The second takeaway is, I think, employers should be asking their health plans not just what prices are we paying, but how are we paying for hospital services?" says White. Most private health plans negotiate complicated discount rates for services. But another option is to base payments on a set percentage of what Medicare pays — a method that White says typically elicits lower costs. "Paying multiples of Medicare is a simple approach to contracting that enables shopping."
The Gross Inequality of Death in America -- One of the most disquieting facts about life in the United States today is that the richest American men live 15 years longer than the poorest men, while for women it’s 10 years. Put a different way, the life expectancy gap between rich and poor in the U.S. is wider than the gap between the average American and the average Yemeni or Ethiopian. This gap is only getting wider. According to a report by theHealth Inequality Project, from 2001-2014, the richest Americans gained approximately three years in life expectancy while the poorest Americans experienced no gains. A three-year difference in life expectancy may seem trivial, but, as the report’s authors note, this gain in lifespan is the equivalent of curing cancer for only the rich. Going back further, the numbers only get worse: The richest American males gained six years in life expectancy from 1980 to 2010, while outcomes for the poorest men remained stagnant. These facts would seem to justify the Democratic Party’s widespread support for universal health care. When it comes to the health-wealth gap, though, Medicare for All may not be the silver bullet that progressives hope for. Most evidence suggests that while universal health care is a necessary step to closing this gap, it is nowhere near enough. If the health-wealth gap is merely the product of access to quality health care, then the gap should largely disappear when health care access is equalized across society. But that’s not the case in countries that already have universal health care coverage. In France, which has one of the best and most extensive health care systems in the world, the health-wealth gap is about 11 years. Even in the United Kingdom, home to the most robust single payer health care system on the planet, the rich live about 9 years longer than the poor. This health-wealth gap also remains when taking behavior into account—for example, the fact that poor people tend to be heavier smokers and drinkers. The famousWhitehall studies of the British Civil Service led by epidemiologist Michael Marmot found that only about one-third of the health-wealth gap can be explained by “risk” factors such as smoking, alcohol consumption, and reliance on fast food. When you add in “protective” factors such as access to health care or workout facilities, the number still represents less than half of the total gap. So, what is responsible for the majority of the health-wealth gap? Stanford neuroscientist Robert Sapolsky, who has been speaking and writing on this question for decades, offers a simple answer: poverty itself. Or, as Sapolsky puts it, “the psychosocial impact of being poor.”
Multistate lawsuit accuses 20 drug companies of price fixing scheme - Attorneys general from more than 40 states are alleging the nation's largest generic drug manufacturers conspired to artificially inflate and manipulate prices for more than 100 different generic drugs, including treatments for diabetes, cancer, arthritis and other medical conditions. The lawsuit, filed in federal court in Connecticut on Friday, also names 15 individual senior executives responsible for sales, marketing and pricing. Connecticut Attorney General William Tong, a Democrat, said investigators obtained evidence implicating 20 firms. "We have hard evidence that shows the generic drug industry perpetrated a multibillion dollar fraud on the American people," Tong said. "We have emails, text messages, telephone records and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs." Tong said the investigation had uncovered a primary reason why the cost of health care — and specifically generic prescription drugs — has been so high in this country. The surging prices of prescription drugs have drawn the attention of a number of politicians across the political spectrum from President Donald Trump to liberal Democratic presidential candidate Sen. Elizabeth Warren of Massachusetts. The new court suit was the second that has been filed in the investigation. The first, filed in 2016, named 18 corporate defendants and two individual defendants. Two former drug company executives entered into settlement agreements and are cooperating with the attorneys general in the investigation. A spokesman for one of the companies named in the suit, Teva Pharmaceuticals USA Inc., a wholly owned subsidiary of Israeli-based Teva Pharmaceuticals Industries Ltd, said Teva hasn't engaged in any conduct that would lead to civil or criminal liability. "The allegations in this new complaint, and in the litigation more generally, are just that — allegations," Kelley Dougherty, a Teva vice president, said in a statement Saturday.
Measles outbreak tops 830 cases across the country - The number of measles cases in the U.S. has reached 839 across 23 states, according to the Centers for Disease Control and Prevention, as outbreaks across the country show no sign of slowing.There have been 75 new cases reported in the past week, and the total number of cases is inching closer to the record 963 cases reported in 1994. The current outbreak is still the largest since the disease was declared eliminated in 2000. No new states reported outbreaks in the past week, but the number of cases in New York— home of the largest outbreak in the country— continued to climb. The state has reported 274 cases of measles since the outbreak began in October.There are 225 reported cases in Rockland County, and as of May 6, the state reported 466 cases in Brooklyn and Queens since September. Most of these cases have involved members of the Orthodox Jewish community. The outbreak began when an unvaccinated child traveled to Israel, and returned home infected with measles. The child infected others, most of whom were also unvaccinated. Nine out of 10 unvaccinated children will catch the highly contagious disease if exposed to it, according to the CDC.
WHO Warns Ebola Outbreak Critical As Armed Militants Target Healthcare Workers - Armed attacks by militants, distrust of western medicine and a growing funding gap has been crippling the response to the ongoing Ebola outbreak in northeastern Democratic Republic of Congo, according to the World Health Organization (WHO), which warned that the situation risks spiraling out of control. As of May 7, there have been 1,600 confirmed and probable cases of EVD (Ebola Virus Disease), of which 1,069 have died - a mortality rate of 67%. Seriously complicating matters have been conflict between local militants in the region - who, in addition to longstanding disputes - have been targeting healthcare workers and burial teams. This month alone has brought setbacks such as a violent assault on a burial team in the town of Katwa and a gunfight between at least 50 armed militia and security forces in the city of Butembo, WHO reported. Mourners also buried Richard Valery Mouzoko Kiboung, a 41-year-old Cameroonian doctor killed April 19 while working for WHO and meeting with other front-line workers at Butembo University Hospital. -VOA News "On Thursday, a VOA correspondent in Butembo spotted copies of a letter – anchored with pebbles on streets and posted on buildings in that city and other North Kivu communities. Handwritten in Swahili and attributed to Mai-Mai fighters, the letter warned police, soldiers and the general public against showing any support for Ebola responders or treatment centers," added VOA.
Revealed: air pollution may be damaging ‘every organ in the body’ - Air pollution may be damaging every organ and virtually every cell in the human body, according to a comprehensive new global review. The research shows head-to-toe harm, from heart and lung disease to diabetes and dementia, and from liver problems and bladder cancer to brittle bones and damaged skin. Fertility, foetuses and children are also affected by toxic air, the review found. The systemic damage is the result of pollutants causing inflammation that then floods through the body and ultrafine particles being carried around the body by the bloodstream. Air pollution is a “public health emergency”, according to the World Health Organization, with more than 90% of the global population enduring toxic outdoor air. New analysis indicates 8.8m early deaths each year – double earlier estimates – making air pollution a bigger killer than tobacco smoking. But the impact of different pollutants on many ailments remains to be established, suggesting well-known heart and lung damage is only “the tip of the iceberg”. “Air pollution can harm acutely, as well as chronically, potentially affecting every organ in the body,” conclude the scientists from the Forum of International Respiratory Societies in the two review papers, published in the journal Chest. “Ultrafine particles pass through the [lungs], are readily picked up by cells, and carried via the bloodstream to expose virtually all cells in the body.” Prof Dean Schraufnagel, at the University of Illinois at Chicago and who led the reviews, said: “I wouldn’t be surprised if almost every organ was affected. If something is missing [from the review] it is probably because there was no research yet.” The review represents “very strong science”, said Dr Maria Neira, WHO director of public and environmental health: “It adds to the very heavy evidence we have already. There are more than 70,000 scientific papers to demonstrate that air pollution is affecting our health.”
Air pollution in many national parks is as bad as in Los Angeles -A whopping 96 percent of national parks in the U.S. are plagued by “significant air pollution,” according to a new study by the National Parks Conservation Association (NPCA). In fact, 33 of America’s most-visited national parks are as polluted as our 20 largest cities, the report said. “The poor air quality in our national parks is both disturbing and unacceptable,” said Theresa Pierno, president and CEO for National Parks Conservation Association (NPCA), in a statement. “Nearly every single one of our more than 400 national parks is plagued by air pollution. If we don’t take immediate action to combat this, the results will be devastating and irreversible.” The culprits? Extracting and burning fossil fuels (specifically coal — surprising, we know), car exhaust, and side effects of climate change like wildfire smoke. The report notes that the large majority of polluted air doesn’t originate in the parks, but gets blown in from elsewhere. Last year, the most popular parks — like Sequoia, Mojave, and Joshua Tree — recorded up to two months of dangerous ozone levels, mostly in the summer when the parks are always busiest. While bad air quality causes some people to stop visiting national parks, according to the NPCA’s report, there has still been an overall impact on visitors’ health: People are getting allergy and asthma attacks in the parks more often. Air pollution is actively damaging sensitive species and habitats in 88 percent of national parks — like alpine flowers in Rocky Mountain National Park which, apart from being pretty, provide essential habitat for some of the animals there, like elk. In 89 percent of all parks, particulate matter in the air creates a visible haze, clouding views as well as lungs. Great Smoky Mountains National Park, for example, is even smokier than its name suggests. The name is supposed to refer to the bluish mist that naturally hangs over the mountains, not the white or yellowish haze of pollution that is now often seen at the park.
Mexico City Declares Environmental Emergency as Wildfire Smoke Chokes the Air - Authorities in Mexico City declared an environmental emergency Tuesday as smoke from wildfires caused air pollution to reach levels well above what the World Health Organization (WHO) considers safe. The Nezahualcoyotl measuring station recorded particulate matter (PM2.5) levels of 158 micrograms per cubic meter of air at 5 a.m. Tuesday morning, Reuters reported. That's more than six times the WHO recommended level of below 25. While the emergency was declared Tuesday, the air had been thick with smoke since Saturday, NBC News reported."You can't escape it," a tour bus operator told Bloomberg News. Government agency the Megalópolis Environmental Commission (CAME) advised residents to stay inside, place wet towels under their doors and avoid activities that could make air quality worse, like cooking with wood or coal, smoking and lighting candles, NBC News reported The local government also said it would restrict vehicle traffic Wednesday, according to Reuters. Mexico City Mayor Claudia Sheinbaum said she was considering closing schools, and a local soccer league, Liga MX, decided to delay its semifinals. Mexico City's once famously dangerous air quality has improved in recent decades, partly through a policy of restricting traffic on days when pollution reaches elevated levels, Bloomberg reported. But the current pollution comes mostly from wildfires outside the city, not exhaust. There were 23 fires burning on Sunday, Mexico City's Fire Department said, as NBC News reported. The fires have prompted authorities to declare emergencies in 11 municipalities in the southern state of Oaxaca. Blazes have also been reported in Valle de Bravo, Tepoztlán and Jalisco. The fires around the city have been fueled partly by hot, dry weather. Mexico City temperatures have been above average on 73 days this year.
China’s efforts to cut pollution in Beijing may make it worse overall -- Many rich countries that appear to have cleaned up their act environmentally have actually outsourced manufacturing to countries with laxer standards –resulting in more pollution overall. Now the same thing is happening within China itself.The country is trying to reduce the dire air pollution in the capital region that includes Beijing. In this megalopolis of 110 million people, average particulate levels are 10 times higher than the safe limit according to the World Health Organization. Chinese officials are moving highly polluting industries to other regions, but Bin Chen of Beijing Normal University and colleagues found this will actually lead to more air pollution overall because of lower environmental standards and less efficient technologies in these regions. The calculated that the increase in harmful particulate emissions outside the capital region will be 1.6 times the emissions reduction in the capital region. What’s more, overall carbon dioxide emissions will be 3.6 times higher, and water consumption will be 2.9 times higher. “These environmental problems are linked together,” says Chen.In theory having more particulates spread more thinly over less densely populated areas might lessen the over health impact, but the team did not assess this. What they did show is that prevailing winds will often blow some of the extra particulate pollution in neighbouring provinces back into the capital region, partially or completely countering the reductions from moving factories elsewhere.
California jury links RoundUp to cancer, awards couple $2 billion - A jury ruled against chemical giant Monsanto on Monday, awarding a California couple $2 billion in damages after determining their cancer was caused by the weedkiller RoundUp. The decision in Alameda County Superior Court comes on the heels of a recent Environmental Protection Agency (EPA) statement that said there were no serious public health risks associated with glyphosate, the active ingredient in RoundUp. But a growing number of juries disagree with the EPA's position. Monday's ruling marks the third case since August in which a jury found that glyphosate caused cancer. More than 13,000 similar lawsuits have been filed against Monsanto or its parent company Bayer. Many of those suits were spurred by a 2015 World Health Organization analysis that said glyphosate is “probably carcinogenic in humans.” Alva and Alberta Pilliod, the plaintiffs in the California case, argued they developed non-Hodgkin lymphoma following decades of using the weedkiller. Bayer relied heavily on EPA's assessment of glyphosate's safety in responding to the verdict, arguing the Pilliods had existing risk factors for that type of cancer. "Bayer is disappointed with the jury’s decision and will appeal the verdict in this case, which conflicts directly with the U.S. Environmental Protection Agency’s interim registration review decision released just last month," the company said in a statement.
Monsanto Ordered to Pay Record $2 Billion After Jury Finds Roundup Caused Cancer - — A California jury ruled Monday that Monsanto must pay a record $2 billion in damages to a couple that was diagnosed with cancer after using the company’s weedkiller Roundup.“We were finally allowed to show a jury the mountain of evidence showing Monsanto’s manipulation of science, the media, and regulatory agencies to forward their own agenda despite Roundup’s severe harm to the animal kingdom and humankind,” saidMichael Miller, an attorney for Alva and Alberta Pilliod.The jury ruled that Monsanto—which was acquired by the German pharmaceutical giant Bayer last year—is liable for the Pilliods’ non-Hodgkin’s lymphoma (NHL), the third such ruling in less than a year. “We’ve been fighting cancer for nine years. It was caused by Roundup. We can’t do the things we used to do and we really resent Monsanto for that,” Alberta Pilliod said at a press conference following the verdict. As The Guardian reported, the “latest verdict is the largest by far and will increase pressure on Bayer, which has suffered share price drops in the wake of the verdicts and is now facing similar lawsuits from thousands of cancer patients, survivors and families who lost loved ones to NHL.” Wenonah Hauter, executive director of Food & Water Watch, said in a statement that the California jury’s decision “shows that there’s more than enough evidence that Roundup is an environmental and public health nightmare.”“But rather than act on this body of evidence,” Hauter said, “the EPA continues to side with the chemical industry and recently announced it will continue to allow glyphosate, the active ingredient in Roundup, to be sold. It’s time to ban this dangerous herbicide.”
Bayer says Monsanto likely kept files on influential people across Europe (Reuters) - Bayer said on Monday its Monsanto unit, which is being investigated by French prosecutors for compiling files of influential people such as journalists in France, likely did the same across Europe, suggesting a potentially wider problem. French prosecutors said on Friday they had opened an inquiry after newspaper Le Monde filed a complaint alleging that Monsanto - acquired by Bayer for $63 billion last year - had kept a file of 200 names, including journalists and lawmakers in hopes of influencing positions on pesticides. On Sunday, Bayer acknowledged the existence of the files, saying it does not believe any laws were broken but that it will ask an external law firm to investigate. “It’s safe to say that other countries in Europe were affected by lists ... I assume that all EU member states could potentially be affected,” Matthias Berninger, Bayer’s head of public affairs and sustainability, told journalists on Monday. While he did not say there had any illegal activity and added it was up to the external law firm to evaluate the conduct, Berninger said there were signs Monsanto had not played fairly in the use of private data. “There have been a number of cases where - as they would say in football - not the ball was played but the man, or woman, was tackled,” Berninger, who joined Bayer in January, said on a conference call. “When you collect non-publicly available data about individuals a Rubicon is clearly crossed,” regardless of whether data privacy laws were actually violated, he added. He repeated an apology issued by Bayer over the weekend.
Ticks expected to be a big problem this year -- Doctors are warning that because of the wet spring we have had so far, the conditions are perfect for them to be out. "I have no doubt we are going to have a heavy tick season," said Dr. Thomas Rushton, an Infectious Diseases Specialist with St. Mary's Medical Center. "It is perfect for that. We know that eggs that we laid over the winter are really going to start hatching whenever we get those first rains, so right where we are right now." Dr. Rushton says the weather is also helping the grass to grow and leaves are on the trees, which gives ticks something to hang onto. Because this is going to be a bad tick season, doctors are urging you to check yourself, your kids and your pets anytime you come inside from being outdoors. "You want to look at the nape of the hair, so wherever there is a hairline," Dr. Rushton said. "You want to look very closely because it may look like it's a little skin abrasion or a mole, but if it's a tick and you touch it. those legs are going to move. You may need a magnifying glass. You want to look at crevasses, so skin folds are also places where ticks would like to be. It does take some time for that tick to actually find a spot that she likes, bite and embed, so we want to remove all ticks within 24 hours."
Ear to Ear: China’s Farming Authority Warns of Corn-Eating Pest - An invasive pest that feeds mainly on corn has devoured 720 million square meters of crops in 13 Chinese provincial-level regions, mostly in the south and southwest, and is moving northward at an alarming pace, the National Agro-Tech Extension and Service Center warned Tuesday. According to the Food and Agriculture Organization of the United Nations, the fall armyworm is native to tropical and subtropical areas of the Americas but was observed in central and western Africa in early 2016. In addition to corn, the worms feed on over 80 other crops, including rice and millet. “In the absence of natural controls or good management, it can cause significant damage to crops,” said the organization. The fall armyworm was first detected in China on Jan. 11 in Pu’er — a city in the southwestern Yunnan province that’s famous for its eponymous variety of tea. “The insects have been expanding rapidly across the country and will (soon) establish their breeding grounds, which would pose a serious risk,” said the agro-tech center, adding that, in addition to the fall armyworms proliferating domestically, more and more insects have been entering China from neighboring countries including Myanmar, Vietnam, and Thailand. Zhai Baoping, an entomology professor at Nanjing Agricultural University, told state-run newspaper Science and Technology Daily on Tuesday that fall armyworms are particularly good at breeding, flying, and eating. “One female moth can lay up to 200 eggs at a time and up to 1,000 eggs in a lifetime. To go from an egg to a mature fall armyworm only takes two or three weeks,” Zhai said. “They’re extremely good at flying long distances. Before laying eggs, female moths might travel 500 kilometers. The insects move in a swarm and eat voraciously: They can consume an entire corn field within one day.”
African swine fever keeps spreading in Asia, threatening food security The spread of African swine fever (ASF) in Asia is taking a worrisome turn. First reported in northeastern China in August 2018, the highly contagious, often fatal pig disease quickly swept through the country, causing the death or culling of more than 1 million pigs. In recent weeks, it has jumped borders to Vietnam, Cambodia, Mongolia, Hong Kong, and possibly North Korea. Animal health experts agree that the disease will inevitably spread farther. And many of the newly hit countries are even less prepared to deal with ASF than China, they say, which has so far failed to end its outbreaks. Vietnam and Cambodia “probably do not have the technical abilities to be able to control ASF,” says François Roger, an animal epidemiologist at the French Agricultural Research Center for International Development in Montpellier. He believes the virus will soon surface in Myanmar and Laos, which have “weak veterinary infrastructures and surveillance systems,” and it may become endemic in Southeast Asia. If so, it would pose a continuing threat of reintroduction into China, even if that country succeeds in controlling its own outbreaks. A reservoir of endemic disease could also pose a wider threat: ASF-contaminated pork products have already been confiscated from air travelers in South Korea, Japan, Taiwan, and Australia. The crisis is not only causing economic hardship, but also threatens food security in the region. In Vietnam, where pork accounts for three-quarters of the meat consumption, more than 1.2 million pigs across the country—4% of the national herd—have now died or been killed, the Vietnamese government announced on 13 May. “This is probably the most serious animal health disease [the world has] had for a long time, if not ever,” says Dirk Pfeiffer, a veterinary epidemiologist at City University of Hong Kong.
Southern Ohio health officials warn of intestinal parasite from infected farm animals – Health officials believe some people may be sick with an intestinal parasite contracted from infected cattle and other animals, the Portsmouth City Health Department said Wednesday. It says “a number” of Scioto County and Lawrence County residents may have become ill in connection with animals brought to the Lucasville Trade Days event from April 27-28. Health officials say Cryptosporidiosis, also known as Crypto, is a diarrheal disease caused by a single-celled parasite. It can be spread by humans, animals or contaminated food and water. The most common symptom is watery diarrhea and abdominal cramping. According to health officials, Crypto is resistant to many common disinfectants. Hand sanitizer is not effective to avoid it. Washing hands with soap and water is the most effective way to keep the disease from spreading. Symptoms usually happen a week after exposure. The infection tends to be more severe in pregnant women, young children and people with compromised immune systems. Infected people can be contagious for several weeks after exposure.
The Battle for Rights of Nature Heats Up in the Great Lakes - In February, the voters of Toledo, Ohio, passed a ballot initiative that gives Lake Erie and those who rely on the lake's ecosystem a bill of rights. The idea is to protect and preserve the ecosystem so that the life that depends on it — humans included — can have access to safe, fresh drinking water.On the surface, it seems pretty logical: Humans need water to survive, and if an ecosystem that is relied on for water—in this case, Lake Erie — is polluted (in this case, with algae), then the Lake Erie Bill of Rights (or LEBOR) would ensure the rights of humans would come before the polluters (in this case, big agriculture). Except, that's not what's happening.Rather, in a perhaps unsurprising move, the state of Ohio has at once both acknowledged rights of nature to exist, and taken them away, with a line written in, of all things, the state budget: "Nature or any ecosystemdoes not have standing to participate in or bring an action in any court of common pleas.""It's not surprising that the Ohio legislature has the shameful distinction of being the first in the country to specifically name ecosystem rights — trying to quash them rather than taking the lead in recognizing them," the Community Environmental Legal Defense Fund (CELDF), which was involved in the initiative and is experienced with rights of nature laws and actions, said in a press release. The Lake Erie Bill of Rights has received international acclaim.Last week, a judge ruled Toledoans for Safe Water, the local group behind the Lake Erie Bill of Rights, cannot defend the voter-passed initiative in a lawsuit brought by a factory farm against the city over the initiative. Yet, the state of Ohio is being permitted to support the farm in the lawsuit against the city. Big agriculture, of course, is the primary source of nutrient pollution that has caused algae blooms that have denied half a million people access to clean, safe drinking water, sometimes for days at a time.
Internal documents show 3M hid PFAS dangers for decades - A 3M environmental specialist, in a scathing resignation letter, accused company officials of being "unethical" and more "concerned with markets, legal defensibility and image over environmental safety" when it came to PFAS, the emerging contaminant causing a potential crisis throughout Michigan and the country. PFOS, one of 3M's chief PFAS products, "is the most insidious pollutant since PCB," Richard Purdy stated in his March 28, 1999, resignation letter, referring to a compound used in 3M's ScotchGard stain-protection product line, among other uses. "It is probably more damaging than PCB because it does not degrade, whereas PCB does; it is more toxic to wildlife," he stated, adding that PFOS's end point in the environment appeared to be plants and animals, not soil and sediment like PCB. Purdy's explosive resignation letter is just one of a large cache of internal 3M memos and documents obtained by the Free Press through public records law from the Minnesota Attorney General’s Office. Per- and polyfluoroalkyl substances — PFAS — is the biggest emerging contaminant problem in Michigan. The nonstick compounds were used for decades, from the 1950s to the 2000s, in aqueous firefighting foam, industrial processes and a host of popular consumer products: Teflon nonstick pots and pans, ScotchGard stain protectants on carpets and upholstery; Gore-Tex water-resistant shoes and clothing, and more. Two of the most common and most studied PFAS compounds, known as PFOS and PFOA, have been linked to cancer; conditions affecting the liver, thyroid and pancreas; ulcerative colitis; hormone and immune system interference; high cholesterol; pre-eclampsia in pregnant women, and negative effects on growth, learning and behavior in infants and children. PFAS can now be found in the blood of nearly 99% of Americans. It has even beenfound in polar bears in the Arctic Circle, as the chemicals have worked their way up the food chain from fish and seals. Some 46 sites in Michigan are known to have groundwater with PFAS levels above the U.S. Environmental Protection Agency's lifetime health advisory guideline of 70 parts per trillion, a level above which a person consuming the water for a lifetime might expect health problems. And state officials have identified more than 11,000 sites in Michigan where PFAS was used and contamination may be an issue. And it's not just the Great Lakes State's problem. In a new study, citing updated federal government data, the Washington-based nonprofit Environmental Working Group identified 610 sites in 43 U.S. states or territories known contaminated with PFAS, including drinking water systems serving 19 million people.
PG&E Power Lines Sparked Deadliest Wildfire in California History, Investigation Confirms -- Power lines owned by Pacific Gas and Electric were the immediate cause of the deadliest and most destructive wildfire in California state history, a California Department of Forestry and Fire Protection (Cal Fire) investigation concluded Wednesday, The New York Times reported. The Camp Fire, which burned 153,336 acres, destroyed the town of Paradise and killed 85 people, was also partly fueled by hot, dry conditions caused by climate change. "After a very meticulous and thorough investigation, CAL FIRE has determined that the Camp Fire was caused by electrical transmission lines owned and operated by Pacific Gas and Electricity (PG&E) located in the Pulga area," Cal Fire concluded. The investigation uncovered two ignitions related to PG&E lines: the first near the community of Pulga in Butte county and the second at the intersection of Concow and Rim Roads. The latter was caused by an interaction between vegetation and electrical distribution lines. Cal Fire is passing the results of the investigation along to Butte County District Attorney Mike Ramsey. PG&E said it accepted the results of the investigation in a statement reported by CNBC. The company had already acknowledged in a February regulatory filing that its lines were the "probable" cause of the blaze. The company filed for bankruptcy protection in January after a number of lawsuits stemming from wildfires in Northern California in 2017 and 2018. It could face criminal charges, including murder or involuntary manslaughter.
Deepest ever dive finds plastic bag at bottom of Mariana Trench CNN — An American undersea explorer has completed what is claimed to be the deepest manned sea dive ever recorded -- returning to the surface with the depressing news that there's plastic trash down there. Victor Vescovo journeyed 10,927 meters (35,853 feet) to the bottom of the Challenger Deep , the southern end of the Pacific Ocean's Mariana Trench, as part of a mission to chart the world's deepest underwater places. Making multiple trips nearly 11 kilometers, or seven miles, to the ocean floor -- one of them four hours in duration -- Vescovo set a record for the deepest solo dive in history, his team said. The previous record was held by "Titanic" director James Cameron in 2012.
977,000 Shoes and 373,000 Toothbrushes Found Among 262 Tons of Plastic Debris on Remote Cocos Islands - There are only around 600 people living on the Cocos (Keeling) Islands in the Indian Ocean. But their beaches are littered with 414 million pieces of plastic. That's the calculation of a paper published in Scientific Reports Thursday. Its findings suggest the world has "drastically underestimated" the plastic pollution problem, lead author from the Institute for Marine and Antarctic Studies (IMAS) at the University of Tasmania Dr. Jennifer Lavers told BBC News."Islands such as these are like canaries in a coal mine and it's increasingly urgent that we act on the warnings they are giving us," Dr. Lavers said in an IMAS press release. Australian islands home to 414 million pieces of plastic pollution – YouTube The plastic found by Lavers and her team weighed 238 tonnes (approximately 262 U.S. tons) and included 977,000 shoes, mostly flip-flops, and 373,000 toothbrushes. Lavers explained to NPR that remote islands like the Cocos are valuable places to study the circulation of ocean plastics, since their small population means the plastic that washes up on beaches comes from elsewhere and is not immediately cleaned up. Lavers has studied plastic on other isolated islands. In 2017 she found that Henderson Island in the Pacific had the highest density of plastic waste of anywhere on earth, the press release explained. "You get to the point where you're feeling that not much is going to surprise you anymore," Lavers told NPR, "and then something does ... and that something [on the Cocos Keeling Islands] was actually the amount of debris that was buried." In fact, 93 percent of the plastic Lavers' team found was buried up to 10 centimeters (approximately four inches) in the sand, and 60 percent of the buried plastic were microplastics measuring two to five millimeters, the paper said. "It's the little stuff that's perfectly bite-sized," Lavers told NPR. "The stuff that fish and squid and birds and even turtles can eat."
Almost every country in the world agrees deal to cut plastic pollution – except US - Almost every country in the world has signed up to a legally-binding plan to cut plastic waste – with the US a striking exception. The United Nations announced that 186 countries reached an agreement on Friday which means they will have to monitor and track movements of plastic waste outside their borders. Rolph Payet, of the UN Environment Programme, called the amendment to the Basel Convention “historic”. He said it would help create a better regulated global trade in plastic, which currently clutters pristine land, pollutes the oceans and entangles wildlife – sometimes with deadly results. “It’s sending a very strong political signal to the rest of the world – to the private sector, to the consumer market – that we need to do something,” said Mr Payet. “Countries have decided to do something which will translate into real action on the ground.” The deal affects products used in a broad array of industries, such as healthcare, technology, aerospace, fashion, and food and beverages. The agreement is likely to lead to customs agents being on the lookout for electronic or other types of potentially hazardous waste more than before. Countries will have to figure out their own ways of adhering to the accord, Mr Payet said. Even the few non-signatory countries, like the US, could be affected when they ship plastic waste to countries that have signed up.
From making it to managing it, plastic is a major contributor to climate change - Plastic is polluting oceans, freshwater lakes and rivers, food and us — but it's also a major contributor to global climate change, warns a new report.Scientists, policymakers and consumers are increasingly aware of the threat plastic pollution poses to oceans and water, wildlife, food and people. However, often lost in calculating plastics' environmental harm is its contributions to climate change."I don't feel the petrochemical buildout is being considered as part of climate change discussions at any level in our state [Pennsylvania]," Michele Fetting, program manager at the Breathe Project, a coalition of 24 environmental organizations, told EHN.Petrochemical facilities, such as cracker plants, take fuels like natural gas and convert them to chemical products, which are most often used to make plastics. Shell is building a massive petrochemical complex in Beaver County, Pennsylvania, as part of a broader effort to put such facilities in multiple spots along the Ohio River Valley. Each step in the life of a piece of plastic — production, transportation and managing waste — uses fossil fuels and emits greenhouse gases and, as petrochemical and plastic production continues to ramp up, these impacts must be considered, according to the report released today by the Center for International Environmental Law, the Environmental Integrity Project, FracTracker Alliance, the Global Alliance for Incinerator Alternatives, 5Gyres, and #BreakFreeFromPlastic.The organizations say putting a stop to increases in petrochemical and plastic production "is a critical element in addressing the climate crisis." "Nothing short of stopping the expansion of petrochemical and plastic production and keeping fossil fuels in the ground will create the surest and most effective reductions in the climate impacts from the plastic lifecycle," the authors wrote.
Plastics Threaten Global Climate at a Massive Scale During Each Point of Lifecycle, Report Finds -Plastic pollution across the globe is suffocating our planet and driving Earth toward catastrophic climatic conditions if not curbed significantly and immediately, according to a new report by the Center for International Environmental Law (CEIL). As first reported by The Guardian, a review of greenhouse gas emissions (GHG) at each stage of the plastic lifestyle finds that increasing plastic and petrochemical industries expected to accelerate in the next ten years are threatening the ability to keep global temperature rise below 1.5°C degrees if the world does not immediately act. This year alone, the production and incineration of plastic will add more than 850 million metric tons of greenhouse gas to the atmosphere, equating to the pollution from 189 new 500-megawatt coal-fired power plants."Humanity has less than twelve years to cut global greenhouse emissions in half and just three decades to eliminate them almost entirely," said Carol Muffet with CEIL. "The massive and rapidly growing emissions from plastic production and disposal undermine that goal and jeopardize global efforts to keep climate change below 1.5 degrees of warming." Comparing GHG estimates against global carbon budgets and emissions commitments, the report finds that if plastic production goes as planned, emissions will reach 1.34 gigatons per year by 2030. By 2050, the production and disposal of plastic may generate 56 gigatons of emissions, accounting for as much as 14 percent of the planet's entire remaining carbon budget. The authors are quick to note their assumptions are conservative given the availability of data and the projection of plastic's climate impacts are under a business-as-usual scenario. As such, realistic estimates suggest will actually be much higher. "It has long been clear that plastic threatens the global environment and puts human health at risk. This report demonstrates that plastic, like the rest of the fossil economy, is putting the climate at risk as well. Because the drivers of the climate crisis and the plastic crisis are closely linked, so to are their solutions: humanity must end its reliance on fossil fuels and on fossil plastics that the planet can no longer afford," said Muffet. GHG emissions are emitted during each stage of the plastic lifecycle. Nearly every piece of plastic begins as a fossil fuel where extraction and transport can contribute significantly to GHG emissions directly through methane leaks and flaring, as well as fuel combustion and energy consumption. In the U.S. alone in 2015, emissions from fossil fuel extraction and transport attributed to plastic production was as high as 10.5 million metric tons of CO2 per year. The next phase, refining and manufacturing, is among the most GHG-intensive industries and are the fastest growing in terms of emissions.
Plastics Industry on Track to Burn Through 14% of World's Remaining Carbon Budget: New Report – DeSmog --The plastics industry plays a major — and growing — role in climate change, according to a report published today by the Center for International Environmental Law (CIEL). By 2050, making and disposing of plastics could be responsible for a cumulative 56 gigatons of carbon, the report found, up to 14 percent of the world's remaining carbon budget.In 2019, the plastics industry is on track to release as much greenhouse gas pollution as 189 new coal-fired power plants running year-round, the report found — and the industry plans to expand so rapidly that by 2030, it will create 1.34 gigatons of climate-changing emissions a year, equal to 295 coal plants.It’s an expansion that, in the United States, is largely driven by the shale gas rush unleashed by hydraulic fracturing, or fracking.The petrochemical expansion also comes over the same period of time that international plans to reduce climate change call for rapid reductions in greenhouse gases from all sources — transportation, electricity, and industry. “Humanity has less than twelve years to cut global greenhouse emissions in half and just three decades to eliminate them almost entirely,” said Carroll Muffett, president of CIEL, citing UN figures. “It has long been clear that plastic threatens the global environment and puts human health at risk. This report demonstrates that plastic, like the rest of the fossil economy, is putting the climate at risk as well.”“If growth trends continue,” the report concludes, “plastic will account for 20 percent of global oil consumption by 2050.” The new report, co-authored by Environmental Integrity Project, FracTracker Alliance, Global Alliance for Incinerator Alternatives (GAIA), 5 Gyres, and Break Free From Plastic, looks at how plastic production carries major impacts for the climate as it goes from raw materials tapped by the fossil fuel industries all the way through its ultimate disposal or breakdown in the environment. “The story of plastic’s contribution to climate change really begins at the wellhead,” said Matt Kelso, a manager at FracTracker Alliance, which contributed to the report, “and we can therefore say that a portion of carbon emissions from oil and gas production is attributable to the creation of plastics.”
Plastic Pollution Harms Ocean Bacteria That Produce 10 Percent of Earth's Oxygen - It's well known that ocean plastics harm marine life, but could the eight million metric tons of plastic that enters the seas each year also make it harder for us to breathe?That's the troubling implication of a new study published in Communications Biology Tuesday, which found that plastic pollution can have negative impacts on the ocean bacteria that produces 10 percent of Earth's oxygen. "We found that exposure to chemicals leaching from plastic pollution interfered with the growth, photosynthesis and oxygen production of Prochlorococcus, the ocean's most abundant photosynthetic bacteria," lead study author and Macquarie University researcher Dr. Sasha Tetu said in a Macquarie University press release.The tests were done in a laboratory setting, which means the researchers do not yet know if plastics are currently harming the bacteria in the environment."Now we'd like to explore if plastic pollution is having the same impact on these microbes in the ocean," Tetu said. The study is the first of its kind to look at the potential impacts of plastic on this vital bacteria, which, in addition to producing oxygen, are an essential part of the marine food web. Researchers assessed two strains of Prochlorococcus common at different depths of the ocean. They exposed the strains to chemicals leached from plastic bags and PCV matting. The chemicals had a noted impact on the bacteria, impairing their growth and the amount of oxygen they produced, as well as altering their gene expression.
Retired Oil Rigs off the California Coast Could Find New Lives as Artificial Reefs - Offshore oil and gas drilling has been a contentious issue in California for 50 years, ever since a rig ruptured and spilled 80,000 to 100,000 barrels of crude oil off Santa Barbara in 1969. Today it's spurring a new debate: whether to completely dismantle 27 oil and gas platforms scattered along the southern California coast as they end their working lives, or convert the underwater sections into permanent artificial reefs for marine life.We know that here and elsewhere, many thousands of fishes and millions of invertebrates use offshore rigs as marine habitat. Working with state fisheries agencies, energy companies have converted decommissioned oil and gas platforms into manmade reefs in the U.S. Gulf of Mexico, Brunei and Malaysia.Californians prize their spectacular coastline, and there are disagreements over the rigs-to-reefs concept. Some conservation groups assert that abandoned oil rigs could release toxic chemicals into the water and create underwater hazards. In contrast, supporters say the submerged sections have become productive reefs that should be left in place. We are a former research scientist for the U.S. Department of the Interior and a scholar focusing on the fishes of the Pacific coast. In a recent study, we reviewed the history of rigs-to-reefs conversions and decades of published scientific research monitoring the effects of these projects. Based on this record, we conclude that reefing the habitat under decommissioned oil and gas platforms is a viable option for California. It also could serve as a model for decommissioning some of the 7,500 other offshore platforms operating around the world.
Climate change- How frogs could vanish from ponds – BBC - Climate change is having an impact on frogs found in British ponds, research suggests. A deadly frog disease is spreading due to warmer temperatures and in the next 50 years could cause entire populations to vanish, according to a study. The virus could spell disaster for the common frog, which is a familiar sight in garden ponds and the countryside. Amphibians have been particularly hard hit by changes in the natural world. Four out of 10 species are on the edge of extinction globally due to factors such as disease, habitat loss and climate change. The study provides "strong evidence" of the impact of climate change on wildlife disease and how it might aid the spread of the virus across the UK, said Dr Stephen Price of ZSL's Institute of Zoology. "Climate change isn't something that's just happening in faraway places - it's something real and present that's already had hard-to-predict impacts on wildlife in our own back gardens here in the UK," he said. The research looked at a disease known as ranavirus, which can kill a large number of frogs in a short time. It found mass die-offs matched historic temperature changes, with outbreaks predicted to become more severe, widespread and over a greater proportion of the year within the next few decades, if carbon emissions continue unchecked. At present, the disease is confined largely to England, but climate change could lead to outbreaks across the UK and earlier in the year. If the disease were to hit tadpoles in spring, then whole populations could disappear "almost overnight", said the researchers.
This Bird Went Extinct 136,000 Years Ago and Just Evolved Back Into Existence — In a rare case of a species effectively evolving into existence twice, the Aldabra rail has re-evolved back into existence after first going extinct 136,000 years ago, according to a new study. Not only that, the flightless bird has also reclaimed its home island in the Aldabra Atoll in the Indian Ocean. According to the study published Wednesday in the peer-reviewed scientific journal Zoological Journal of the Linnean Society, the rail’s home in the atoll has been submerged multiple times throughout history during events that wiped out all the species that inhabited it. However, the Aldabra rail has continued to return in a rare phenomenon known as iterative evolution, when the same ancestral lineage leads to the repeated evolution of a species at different points in time, producing parallel offshoot species that are nearly identical to one another and can pop up multiple times in various eras and locations—even when past iterations have gone completely extinct. Such was the case with the Aldabra rail, having descended from a chicken-sized flying bird known as the white-throated rail, which faced its demise around 136,000 years ago when the island was completely inundated and submerged below sea level, wiping out all local fauna and flora. As sea levels fell over the course of tens of thousands of years, however, fossil evidence has shown that the species once again re-colonized it. This time, the bird lost the ability to fly due to the absence of predators who once populated the island. This isn’t the first case of iterative evolution, which has also been observed in such animals asammonites, sea turtles, and sea cows. Yet the two species of rail—the long-extinct iteration and the revived one—are the “most significant” case of avian iterative evolution ever found, the researchers concluded.
Escalating Floods Putting Mississippi River’s Old River Control Structure at Risk - The Old River Control Structure (ORCS), the Army Corps of Engineers’ critical defense against the risk of the Mississippi River undergoing an economically catastrophic change in its course, is under increasing threat due to flood heights that have escalated in recent decades. The higher floods are from increasing sedimentation of the river’s channel. This was due to the construction of the structure, plus other river engineering efforts. As detailed last week in Part I of this series, America’s Achilles’ Heel: the Mississippi River’s Old River Control Structure, the ORCS was built to act as a bulwark against the Mississippi River’s natural inclination to carve out a new channel to the Gulf of Mexico. The river wants to forge a path down the Atchafalaya River that is half as long and twice as steep as the river’s current channel, which takes it past Baton Rouge and New Orleans. The ORCS consists of four major water control structures which allow no more than 30% of the Mississippi River to flow into the Atchafalaya River: the Low Sill Structure and Overbank Structure (built in 1963), the Auxiliary Structure (completed in 1987), and the Sidney A. Murray Junior Hydroelectric Plant (completed in 1990). However, the construction of the ORCS is contributing to its potential failure: the Mississippi River is forced to slow down when it reaches the structure, and this slowdown has resulted in the deposition of a prodigious amount of sediment that has clogged up the river's channel. Additional sedimentation has been caused by the construction of smaller wing dikes that stick out from the river’s banks into the main current (to stabilize the channel and improve navigation safety during low river flows), from armoring of the levee banks with articulated concrete and steel mattress revetments (to prevent erosion of the levees), and from a series of channel modifications done in the 1930s, when necks of 16 meander bends were sliced through to create a shorter path for the river. The net result: higher flood heights due to the clogging of the river channel, which increases the chance of the structure’s failure during a major flood.
2019 Mississippi River Flood the Longest-Lasting Since the Great Flood of 1927 -- Mississippi River flooding has been ongoing for three months or longer in some locations, making it the longest-lasting flood there since the Great Flood of 1927, the worst flood in modern history on the lower Mississippi River.Take Vicksburg, Mississippi, for example.The Mississippi River went above flood stage there on Feb. 17, and has remained in flood ever since. The National Weather Service said this is the longest continuous stretch above flood stage since 1927 at Vicksburg.And by late May, the ongoing Mississippi River flood at Baton Rouge and Red River Landing, Louisiana, will also become the longest-lived at those locations since 1927, according to the NWS.The river went above its 35-foot flood stage at Baton Rouge on the morning of Jan. 6. Red River Landing has been above its 48-foot flood stage since Dec. 28.The Bonnet Carré Spillway, about 27 miles upriver from New Orleans, had to be used for the 13th time in its history and the first time in consecutive years. It's also the fourth time the spillway was used in a single decade – the most in its history.The spillway is located in St. Charles Parish, Louisiana. When open, the Bonnet Carré Spillway helps protect New Orleans and other downstream communities from floods by diverting waters from the Mississippi River into Lake Pontchartrain and on to the Gulf of Mexico. "Federal flood controls were erected as a result of the Flood Control Act of 1928," the New Orleans/Baton Rouge NWS office said. "Flood events prior to the Great 1927 Flood were much longer in duration, at times as long as six months."The Mississippi River at the Quad Cities of Iowa and Illinois observed its longest stretch above major flood stage on record. The river was in major flood stage for 51 consecutive days from March 23 through May 12. The previous record was 31 days from mid-April to mid-May 2001, according to the NWS.Records for most consecutive days above major flood stage were also set at New Boston, Illinois; Keithsburg, Illinois; and Burlington, Iowa.More than 260 river gauges were reporting levels above flood stage on Tuesday. Of those, 23 gauges reported major flooding, 70 moderate flooding and 169 minor flooding. The 12 months spanning May 2018 through April 2019 were the wettest year-long period in the United States in records dating back to 1895, according to the monthly U.S. climate summary issued May 8 by the NOAA's National Centers for Environmental Information.
Massive flooding in New Orleans as five pumps go offline - The New Orleans Sewage and Water Board (SWB) announced this week that following several hours of heavy rain on May 12 five major city water pumps went offline. During the ensuing flash flooding the pumps, located in the City Park and Gentilly area, shut down resulting in massive street flooding in several neighborhoods in the Mid City and French Quarter areas. According to a tweet sent out by the SWB, only 115 out of the 120 drainage pumps were operational during the rains. Some three to five inches of rain fell between 11 p.m. Saturday and 6 a.m. Sunday, overwhelming the pumps drainage capacity. Images of flooded neighborhoods and streets appeared all over social media as residents complained of flooded sidewalks. The breakdown of the pumping system almost 14 years after the failure of levees during Hurricane Katrina resulted in the devastation of wide areas of the city is a further demonstration of the criminal neglect of infrastructure by city, state and federal officials in a city particularly vulnerable to flooding. According to the initial report only one pump lost power during the rains but another report released on Tuesday stated that four more pumps were also offline due to a tripped power breaker. This comes less than two weeks after a 114-year-old water pipe burst, flooding the Freret neighborhood on May 2. The burst pipe, which was installed in 1905, created dangerous water shortages to nearby hospitals, placing wide swaths of the Uptown New Orleans neighborhood under a “boil water advisory,” a public health crisis wherein residents are recommended to boil potentially contaminated water. Over the last six years New Orleans has seen 17 such advisories, usually the result of a loss in water pressure caused by either broken pipes or power failures. City Councilman Joseph Giarusso told residents, “You’ve also got to remember some of the infrastructure at the water plant dates back to World War I, too. It’s the pipes, the pumps that are nearly that old in many of the cases. We’re just working with an infrastructure that’s going to be obsolete in fairly short order.”
When '1-in-100-year' floods happen often, what should you call them? -- The Mississippi River is rising again as torrential rain falls across much of the Midwest. It's the latest in a series of storms that have flooded major cities and small communities along the length of the Mississippi and Missouri rivers on and off for more than a month. In some places, homes and businesses in what's known as the 100-year flood plain have been hit by multiple floods in a matter of weeks. One St. Louis suburb has now suffered three major floods since 2015, at least two of which were approximately 1-in-100-year events. When these sorts of floods happen back to back, many residents might start to wonder: Why are they even called 100-year floods? "The educated layperson or elected officials, they think, 'Well, you scientists and engineers can't get it straight because we had a 100-year flood two years ago! Why are we having another one? You guys must have your numbers wrong.' It makes people think we don't know what we're doing," says Robert Holmes, the national flood hazard coordinator at the U.S. Geological Survey."I think the use of this 1-in-100-year and 1-in-500-year is confusing to people," says Alice Hill, a senior researcher at the Hoover Institution and former official with the National Security Council in the Obama administration. "Many people assume that if their area has experienced the 1-in-100-year flood, that means for the next 99 years they need not worry about flooding."That's because the probability is hard to understand.After Hurricane Florence hit North Carolina last year, Gov. Roy Cooper told reporters, "When you have two 500-year floods within two years of each other, it's pretty clear it's not a 500-year flood."During record-breaking flooding in South Carolina in 2015, then-Gov. Nikki Haley attempted to explain the storm's magnitude, saying, "We are at a 1,000-year level of rain in parts of the low country. What does that mean? We haven't seen this level of rain in the low country in 1,000 years. That's how big this is."Neither governor was correct. While it's unlikely that two large storms that cause flooding will happen in close succession, it's not impossible.A 1-in-100-year storm has a 1% chance of happening every year. "As with the flip of a coin, if you flip heads twice in a row, that doesn't mean you'll flip tails the next time," Hill says. "So you could have three very significant floods right in a row." And, studies say, there is a better way to communicate that reality, by telling people what their risk of flooding is over time rather than each year.
Food Crisis Is Here- Trouble For Farmers In The Corn Belt - Trouble is brewing for farmers in the United States located in the “corn belt.” Corn planting is already behind on schedule. The weather in the United States has made farming difficult as of late, while bankruptcies soar and flooding continues. As the weather in four of the top six states for corn production couples with the skyrocketing number of bankruptcies of American farmers, we could be on the precipice of a food crisis. And to make matters worse, none of the weather is expected to improve, putting even more financial pressure on the already stressed farmers according to the latest Crop Progress report is issued Monday by the U.S. Department of Agriculture (USDA), according to an AccuWeather analysis. The four states significantly behind on schedule are Illinois, Minnesota, Indiana, and South Dakota; and they are expected to remain that way, according to AccuWeather meteorologists who have been analyzing the data. Those four states combined to produce nearly 40% of the corn in the U.S. If the weather continues a wet pattern through late May, consumer prices could go up this summer. Iowa and Nebraska, the other two states among the top six corn producers, are also behind, albeit, only slightly behind, according to data from the USDA. “The question will be how much farther it will fall behind the pace,” said AccuWeathersenior meteorologist Jason Nicholls. “It’s about a week behind schedule right now. If it were to go to a week and a half or two weeks, that’s big news. Most of the problems are because of consistent rains, plus there is also rain in the forecast,” Nicholls said. “Of the two key producing states, Iowa isn’t too bad, but Illinois is way off schedule.”By this time of year, 43% of corn crops would already be planted in Illinois, according to the five-year average provided by the USDA. However, just 9% has been planted so far. Iowa averages 26% of crops planted at this point, and 21% has been planted so far.Three of the other top corn producers are lagging behind this season so far. Minnesota (2% of corn crops planted by now compared to its five-year average of 24%), Indiana (2% compared to 17%) and South Dakota (0% compared to 17%) are also well off pace. –AccuWeather
Farmageddon Looms: Only 30% Of US Corn Fields Have Been Planted, 5 Year Average Is 66% - 2019 is turning out to be a nightmare that never ends for the agriculture industry. Thanks to endless rain and unprecedented flooding, fields all over the middle part of the country are absolutely soaked right now, and this has prevented many farmers from getting their crops in the ground. I knew that this was a problem, but when I heard that only 30 percent of U.S. corn fields had been planted as of Sunday, I had a really hard time believing it. But it turns out that number is 100 percent accurate. And at this point corn farmers are up against a wall because crop insurance final planting dates have either already passed or are coming up very quickly. In addition, for every day after May 15th that corn is not in the ground, farmers lose approximately 2 percent of their yield. Unfortunately, more rain is on the way, and it looks like thousands of corn farmers will not be able to plant corn at all this year. It is no exaggeration to say that what we are facing is a true national catastrophe. According to the Department of Agriculture, over the past five years an average of 66 percent of all corn fields were already planted by now… U.S. farmers seeded 30% of the U.S. 2019 corn crop by Sunday, the government said, lagging the five-year average of 66%. The soybean crop was 9% planted, behind the five-year average of 29%.Soybean farmers have more time to recover, but they are facing a unique problem of their own which we will talk about later in the article.But first, let’s take a look at the corn planting numbers from some of our most important corn producing states. I think that you will agree that these numbers are almost too crazy to believe…
- Iowa: 48 percent planted – 5 year average 76 percent
- Minnesota: 21 percent planted – 5 year average 65 percent
- North Dakota: 11 percent planted – 5 year average 43 percent
- South Dakota: 4 percent planted – 5 year average 54 percent
‘No other option’: Climate change driving many to flee Guatemala --Eastern Guatemala and western Honduras are part of a region known as the dry corridor. Over the last two years, farmers have seen near-complete losses during harvests as the effects of climate change take hold in the region, with 2018 being among the worst years in recent memory. The Guatemalan government estimates that more than 200,000 families in 13 of the 22 departments were affected during the 2018 drought. The situation was not much better in neighbouring Honduras. Officials estimate that nearly 170,000 people were affected in 2018. In the Maya Ch'orti region of Chiquimula, rivers and water sources across the region are near-depleted or completely dried up. And temperatures, according to residents and the Guatemalan government's National Institute of Seismology, Volcanology, Meteorology, and Hydrology, have also risen significantly, adding to the strain on crops. "The temperature has risen a lot," "If it doesn't rain then there is no work," . "There was no harvest of maize or beans this year. [The farmers] sowed seeds, but they lost everything." According to a 2018 report from the Guatemalan government's National Institute of Seismology, Volcanology, Meteorology, and Hydrology, this rise in temperature will continue due to climate change. They estimate that by 2050, the temperature is set to rise between 2.1 and 4.1 degrees Celsius. "The farmers lost over 90 percent of their crops," . "As a result, the farmers were unable to recuperate the costs of production due to the intensity of the drought."
5G Networks Will Likely Interfere With US Weather Satellites, Navy Warns --A US Navy memo warns that 5G mobile networks are likely to interfere with weather satellites, and senators are urging the Federal Communications Commission to avoid issuing new spectrum licenses to wireless carriers until changes are made to prevent harms to weather forecasting.The FCC has already begun an auction of 24GHz spectrum that would be used in 5G networks. But Sens. Ron Wyden (D-Ore.) and Maria Cantwell (D-Wash.) today wrote a letter to FCC Chairman Ajit Pai, asking him to avoid issuing licenses to winning bidders "until the FCC approves the passive band protection limits that the National Aeronautics and Space Administration (NASA) and the National Oceanic and Atmospheric Administration (NOAA) determine are necessary to protect critical satellite‐based measurements of atmospheric water vapor needed to forecast the weather." Wyden and Cantwell said that the "ongoing sale of wireless airwaves could damage the effectiveness of US weather satellites and harm forecasts and predictions relied on to protect safety, property, and national security." They chided the FCC for beginning the auction "over the objections of NASA, NOAA, and members of the American Meteorological Society (AMS). These entities all argued that out-of-band emissions from future commercial broadband transmissions in the 24GHz band would disrupt the ability to collect water-vapor data measured in a neighboring frequency band (23.6 to 24GHZ) that meteorologists rely on to forecast the weather."
Why the Melting of the Hindu Kush and Himalayan Glaciers Matters - By the end of this century climate change will have become the single biggest driver behind an unprecedented scale of migration and displacement across the Indian subcontinent, potentially with destabilizing effects. Already vulnerable to natural disasters, South Asia could be left grappling with millions of “climate refugees,” regional conflicts, and militarized contests over precious resources like food and water. This grim forewarning is grounded in the latest report assessing the health of the Hindu Kush and Himalayan (HKH) glaciers amid rising global temperatures. The landmark research predicts the mountain chain stretching from Pakistan to Myanmar will lose two-thirds of its ice fields by 2100 if global greenhouse gas emissions are not drastically curbed. Even with collective international effort to restrict global warming to 1.5 degrees Celsius, the glaciers will still have shrunk by 36 percent by the end of this century. The study, authored by 210 scientists from 22 countries over five years, warns that the loss of ice at this scale will have serious consequences for up to 2 billion people living across the region, including Afghanistan, Pakistan, India, China, Myanmar, Bhutan, Nepal and Bangladesh. These eight countries are deeply intertwined by the 3,500-kilometer Hindu Kush and Himalayan mountain range and a complex web of ecosystems, weather patterns, rainfall, biodiversity and crucial natural resources. Often referred to as the third pole, the HKH glaciers have the largest ice cover outside the North and South poles, and are a critical source of water for 240 million people living in the mountain belt and its foothills. More importantly, these glaciers feed into 10 major river basins including the Mekong, Yangtze, Indus and Ganges, that support food, water and energy needs of another 1.9 billion people across South Asia.
The Last of the Arctic's Old Sea Ice Is on the Verge of Vanishing - The severe toll of climate change at the top of the world is becoming clearer with each passing day. The latest sign comes courtesy of the National Snow and Ice Data Center (NSIDC), which released its monthly sea ice update on Thursday. It shows that just 1.2 percent of ice in the Arctic Ocean is older than four years. Just 35 years ago, ice that was four years old or older made up nearly a third of all Arctic sea ice.Old sea ice is vital to holding Arctic icepack as a whole together. It acts as an anchor for younger ice and a buffer against the storms that pound the region. But as ocean and air temperatures have risen in the Arctic, its extent has shrunk dramatically. As the new report reminds us, old sea ice is now on life support. While the summer melt season isn’t likely to deliver the final knockout punch, it will be yet another blow to the region’s ice.That comes as the Arctic hit a new April low for sea ice extent, beating out April 2016 for the ignominious title. The loss of old sea ice is intimately tied to the disappearance of Arctic ice cover more broadly. As it melts out, it’s been replaced by younger, thinner ice that breaks up more easily when storms come through and melts more readily in the warming waters.If this is the four-plus year old ice finally disappears, it will mark the first time on record the Arctic has been without it. There’s a chance it could come back as the winter refreeze happens depending on what happens to ice in the 3-4 year age range over the course of the summer. If some of this ice makes it through the summer, it would age another year thus replenishing four-plus year old ice.
PIOMAS May 2019 - Arctic Sea Ice by Neven - (graphics) Another month (and a half) has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center: The flatline that started in the second half of March, continued for a while longer during April, shot up a tiny bit towards this year's maximum, and then essentially flatlined again, with a small dip towards the end of the month. This year's maximum of 22,490 km3 is the third lowest on record, 116 and 1,708 km3 behind 2018 and 2017 respectively (yes, the three lowest maximums on record have all occurred in the last three years). This year's monthly change for April was +127 km3, just 8 km3 above the average of +119 km3. Just like last month, 2019 is still fourth lowest, but the difference with 2011 and 2018, 63 and 44 km3 respectively, has become so small that you could say that they're sharing the second position (together with 2016 that is just 13 km3 behind 2019). The difference with leader 2017 is still large at 1665 km3, but the largest gap was a whopping 2550 km3 on February 14th. Here's how the differences with previous years have evolved from last month: Wipneus' version of the PIOMAS graph shows that 2016 dropped very fast during May, also in extent (more on that below): The anomaly trend line on the PIOMAS volume anomaly graph has gone down some more, and is now firmly in one standard deviation territory: For most of April, 2019 was lowest on record on the JAXA sea ice extent graph. This caused PIJAMAS, or average thickness, to go up fast, as the volume was spread over a smaller ice pack. The decrease in SIE then stalled, and so PIJAMAS stalled as well, but when JAXA SIE steeply declined again, PIJAMAS shot up again, following 2016's trend line, which more or less did the same thing during April. One might say that the movements on the PIJAMAS graph around this time of year, are entirely determined by what happens on the JAXA SIE graph: The movements are less pronounced on the Polar Science Centre average thickness graph, because they don't use JAXA SIE: One of the reasons sea ice extent was so low during April, was relatively high (or non-low) temperatures across the Arctic. Just as the month before, April 2019 was third warmest on record from 65N to the North Pole, according to the NCEP reanalysis dataset. In fact, temperatures in the Atlantic sector were highest on record, whereas on the other side, temps were second highest on record, just 0.031 °C behind last year's record: Another reason, as always, was the weather, with winds causing the Beaufort Gyre to slowly rotate the entire ice pack towards the Atlantic. This atmospheric set-up has been fairly constant for weeks on end now, and I'll just post the ECMWF weather forecast for the coming six days as an example. I've added white arrows to show you which way the winds will be blowing, and thus the ice will be moving:
Antarctica’s Ice Is Melting 5 Times Faster Than in the 90s - Yet another study has shown that glaciers in Antarctica are melting at accelerating rates. Almost 25 percent of the West Antarctic ice shelf is now thinning, and the Pine Island and Thwaites glaciers are losing ice at five times the rate they were in the early 1990s, CNN reported. "In parts of Antarctica, the ice sheet has thinned by extraordinary amounts," study lead author and Leeds University Prof. Andy Shepherd told The Guardian. The study, published in Geophysical Research Letters, comes four months after another study of the entire Antarctic continent found that it was losing ice at six times the rate it was 40 years ago. The latest study found that ice loss from both East and West Antarctica had raised global sea levels by 4.6 millimeters since 1992, according to CNN. The study relied on 25 years of satellite data covering 1992 to 2017. The satellites were fitted with altimeters to measure height changes to the ice sheets. Researchers then used weather models to separate seasonal variation due to snow fall from melting and ice loss caused by long term climate change, BBC News explained. "Using this unique dataset, we've been able to identify the parts of Antarctica that are undergoing rapid, sustained thinning―regions that are changing faster than we would expect due to normal weather patterns," co-head of the UK Centre for Polar Observation and Modelling (CPOM) and Lancaster University Environmental Sensing Reader Dr. Malcolm McMillan told BBC News. "We can now clearly see how these regions have expanded through time, spreading inland across some of the most vulnerable parts of West Antarctica, which is critical for understanding the ice sheet's contribution to global sea level rise."
‘Extraordinary thinning’ of ice sheets revealed deep inside Antarctica --Ice losses are rapidly spreading deep into the interior of the Antarctic, new analysis of satellite data shows. The warming of the Southern Ocean is resulting in glaciers sliding into the sea increasingly rapidly, with ice now being lost five times faster than in the 1990s. The West Antarctic ice sheet was stable in 1992 but up to a quarter of its expanse is now thinning. More than 100 metres of ice thickness has been lost in the worst-hit places. A complete loss of the West Antarctic ice sheet would drive global sea levels up by about five metres, drowning coastal cities around the world. The current losses are doubling every decade, the scientists said, and sea level rise are now running at the extreme end of projections made just a few years ago. The research, published in the journal Geophysical Research Letters, compared 800m satellite measurements of ice sheet height from 1992 to 2017 with weather information. This distinguished short-term changes owing to varying snowfall from long-term changes owing to climate. Prof Andy Shepherd, of Leeds University in the UK, who led the study, said the thinning of some ice streams had extended 300 miles inland along their 600-mile length. “More than 50% of the Pine Island and Thwaites glacier basins have been affected by thinning in the past 25 years. We are past halfway and that is a worry.” Researchers already knew that ice was being lost from West Antarctica, but the new work pinpoints where it is happening and how rapidly. This will enable more accurate projections to be made of sea level rises and may aid preparations for these rises. In the recent past, snow falling on to Antarctica’s glaciers balanced the ice lost as icebergs calved off into the ocean. But now the glaciers are flowing faster than snow can replenish them. “Along a 3,000km [1,850-mile] stretch of West Antarctica, the water in front of the glaciers is too hot,” he said. This causes melting of the underside of the glaciers where they grind against the seabed. The melting lessens the friction and allows the glaciers then to slide more quickly into the ocean and therefore become thinner.
Nearly a quarter of West Antarctic ice is now unstable - By combining 25 years of European Space Agency satellite altimeter measurements and a model of the regional climate, the UK Centre for Polar Observation and Modelling (CPOM) have tracked changes in snow and ice cover across the continent. A team of researchers, led by Professor Andy Shepherd from the University of Leeds, found that Antarctica's ice sheet has thinned by up to 122 metres in places, with the most rapid changes occurring in West Antarctica where ocean melting has triggered glacier imbalance. This means that the affected glaciers are unstable as they are losing more mass through melting and iceberg calving than they are gaining through snowfall. The team found that the pattern of glacier thinning has not been static. Since 1992, the thinning has spread across 24% of West Antarctica and over the majority of its largest ice streams -- the Pine Island and Thwaites Glaciers -- which are now losing ice five times faster than they were at the start of the survey. The study, published today in Geophysical Research Letters, used over 800 million measurements of the Antarctic ice sheet height recorded by the ERS-1, ERS-2, Envisat, and CryoSat-2 satellite altimeter missions between 1992 and 2017 and simulations of snowfall over the same period produced by the RACMO regional climate model. Together, these measurements allow changes in the ice sheet height to be separated into those due to weather patterns, such as less snowfall, and those due to longer term changes in climate, such as increasing ocean temperatures that eat away ice. They found that fluctuations in snowfall tend to drive small changes in height over large areas for a few years at a time, but the most pronounced changes in ice thickness are signals of glacier imbalance that have persisted for decades.
Hate to sound like a broken record, but we just set a scary new CO2 record - The amount of carbon dioxide in our planet’s atmosphere has reached a new high. April’s average was 413.52 parts per million, a new record, according to a spokesperson at Scripps Institution of Oceanography. The last time there was this much CO2 in our atmosphere, there were trees growing at the South Pole. Humans weren’t yet a thing. In other words, we’re living in uncharted territory. The planet’s carbon dioxide levels rise and fall over the course of each year, and usually peak in May when Earth’s vast northern forests spring back to life. (The most widely used measurements are made at the National Oceanic and Atmospheric Administration’s remote observatory at Mauna Loa, Hawaii, to avoid picking up CO2 from nearby cars and plants.) Scientists predict that we could pass the 415 ppm threshold this month. Since the Industrial Revolution, the amount of carbon dioxide in our atmosphere has increased by more than 45 percent. That’s mostly thanks to the various demands of modern life: gas-guzzling cars, refrigerators, hamburgers, Bitcoin … you name it. Our gizmos and gadgets have largely been powered by the carbon-rich fossil fuels stored in the planet’s underground reservoirs.. Oil, for example, was created from the remains of dead plants, animals, and bacteria that have been compressed and pressure-cooked underground over millions of years. Some oil deposits are more than 300 million years old, meaning that they actually predate the dinosaurs.
C02 Levels Top 415 PPM for First Time in Human History - The human species experienced an alarming milestone this weekend: for the first time since Homo sapiens evolved, atmospheric carbon dioxide levels surpassed 415 parts per million (ppm), CNN reported. The carbon dioxide high was recorded by the Mauna Loa Observatory in Hawaii and tweeted out by theScripps Institution of Oceanography Saturday, which regularly updates C02 levels. The observatory recorded a daily C02 reading of 415.26 ppm, which is the first time the daily level topped 415 ppm. Meteorologist and climate action advocate Eric Holthaus sounded the alarm about that data point in widely-shared retweet."We don't know a planet like this," he said.Carbon dioxide levels did not top 300 ppm in the 800,000 years before the industrial revolution, according toUSA Today. A study in April used computer models to confirm that carbon dioxide levels today are the highest they have been in three million years. The study also showed that current levels would be at around 280 ppm if it weren't for the burning of fossil fuels by human beings, leading to climate change.The last time carbon dioxide levels were this high was 5.3 to 2.6 million years ago during the Pliocene epoch, when beech trees grew in Antarctica, temperatures were three to four degrees Celsius warmer and sea levels were 20 meters (approximately 65.6 feet) higher.
'We Don't Know a Planet Like This': CO2 Levels Hit 415 PPM for First Time in 3 Million+ Years - Atmospheric levels of carbon registered 415 parts per million over the weekend at one of the world's key measuring stations, a concentration level researchers say has not existed in more than 3 million years – before the dawn of human history.Taken at the Mauno Loa Observatory in Hawaii by the Scripps Institution of Oceanography, the measure continues the upward trend of atmospheric carbon concentration that lies at the heart of the global warming and climate crisis:Meteorologist Eric Holthaus, a journalist who covers the climate crisis for Grist, contextualized the latest readings in a tweet that was shared widely on Sunday: One person responded to the Holthaus tweet by asking, "How is this not breaking news on all channels all over the world?"Rich Pancost, head of the School of Earth Sciences at the University of Bristol in the U.K., said that the best guess of the scientific community is that global atmospheric carbon levels have not been this high for "about 3 millions years... [m]aybe more." Writing on his Informed Comment blog Monday, historian Juan Cole said that life on Earth in that pre-historic era, known as the Pliocene Period, is not a place humans would recognize: In the Pliocene, it was much hotter. In the Pliocene, oceans were much higher, maybe 90 feet higher. That is our fate, folks. That is what 415ppm produces. It is only a matter of time, and some of the sea level rise will come quickly. Amsterdam, New Orleans, Lisbon, Miami – the list of cities that will be submerged is enormous. Elsewhere online, reaction to the unsettling milestone was met with a mix of frustration, alarm, and fresh demands for urgent action to address the crisis. "If the threshold seems unremarkable (it shouldn't)," wrote Jonathan Shieber atTechCrunch, "it's yet another indication of the unprecedented territory humanity is now charting as it blazes new trails toward environmental catastrophe."
Climate change: UN chief Guterres decries ‘fading’ global efforts --Arriving in Auckland Sunday, Guterres said the world was "not on track" to confine the rise in global warming to 1.5 degrees Celsius above pre-industrial levels as agreed in the 2015 Paris agreement."The paradox is that as things are getting worse on the ground, political will seems to be fading," said the UN secretary general."Climate change is running faster than what we are … the last four years have been the hottest registered," he said, adding that political inadequacy was evident "everywhere." He commended host Prime Minister Jacinda Ardern on New Zealand's ambitious parliamentary bill, tabled last week, seeking to make the 5-million-population nation mostly carbon neutral by 2050. Its key farming sector, however, is to be given some leeway, specifically on "biogenetic methane," another climate-warming gas alongside carbon dioxide. Guterres, who will also visit the South Pacific island territories of Fiji, Tuvalu and Vanuatu, urged the world community to "protect the lives of our people, and we need to protect our planet." His remarks precede a Climate Action Summit he plans to convene in New York in September where nations will be asked to present "concrete, realistic plans" to reduce greenhouse gas emissions by 45% over the next decade and reach net zero by 2050.
Children Change Their Parents’ Minds about Climate Change - Swedish teenager Greta Thunberg became famous this spring for launching a student movement to compel adults to take action on climate change. Instead of going to school, Greta has been spending her Fridays in front of the Swedish parliament with a sign reading: “School Strike for Climate.” Students in more than 70 countries have since followed her lead. But before she started trying to convince the world to take action, Thunberg worked on her parents. She showered them with facts and showed them documentaries. “After a while, they started listening to what I actually said,” Thunberg told the Guardian newspaper. “That’s when I realized I could make a difference.” Thunberg is not alone. Other young people can be equally convincing, according to a paper published May 6 in Nature Climate Change. The team of social scientists and ecologists from North Carolina State University who authored the report found that children can increase their parents’ level of concern about climate change because, unlike adults, their views on the issue do not generally reflect any entrenched political ideology. Parents also really do care what their children think, even on socially charged issues like climate change or sexual orientation. Scientists in the field find the study heartening. “These encouraging results suggest that not only are children increasingly engaged in advocating for their future, they are also effective advocates to their parents,” says climate scientist Katharine Hayhoe of Texas Tech University. She was not involved in the research but works to bridge the gap between scientists and stakeholders on the issue. “As a woman myself and someone who frequently engages with conservative Christian communities,” she says, “I love that it’s the daughters who were found to be most effective at changing their hard-nosed dads’ minds.”
'For the Love of Our Children': Moms Rise Up in Global March for Climate Action - Marking International Mother's Day, thousands of moms took to the streets in London and across the world Sunday to demand transformative action on behalf of Mother Earth and their children, whose futures are under threat from the global climate crisis. "Business as usual—toxic pollution in our streets and our schools—is fueling a crisis that is making our kids sick and it is families in the deprived areas that are paying the heaviest price," Rosamund Kissi-Debra, whose daughter died from an asthma attack linked to air pollution, said during a rally on Sunday. "We need to do everything necessary to clean up our air and create a safer future for all our children."The Mother's Day climate demonstration in London was organized by Mothers Rise Up, a U.K.-based advocacy group led by mothers inspired by the youth climate strikes that have spread across the globe.Climate marches also took place in Australia, Spain, the Netherlands, the Czech Republic, and other nations on Sunday.Ahead of Sunday's demonstrations, Mothers Rise Up published an open letter by over 100 parents calling on the governments of the world to confront the climate crisis with bold action "before it's too late.""We are terrified at what the growing climate crisis means for our children and millions of children across the globe—many of whom are already suffering because of the extreme droughts, floods, and storms that are increasingly the norm in our rapidly over-heating world," the letter reads. "We are inspired by the young people who are striking for climate action, but we can't leave it to our children to fix the mess that past generations have created," the parents wrote. "On the 12th of May—International Mother's Day—mums, dads, grandparents and families will be taking to the streets in London and beyond to demand that action. Together with worried parents across the globe we are calling on governments to declare a climate emergency."
A new 'climate strike': Opting for no children as climate fears grow - German schoolteacher Verena Brunschweiger decided shortly after her marriage not to have children - not because she did not want them but because she felt she could not justify the climate damage caused by adding to the planet’s population. She is part of a growing movement of women and young people who have vowed not to have a families out of concern about a looming climate change crisis. “We really thought long and hard about this,” Brunschweiger told the Thomson Reuters Foundation in a telephone interview from her home in Bavaria. “Eventually the environment was the most important factor for me,” she said. “I struggled, of course. We love children – my husband is also a teacher... But I’m certain I made the right decision.” Climate change is changing choices for some young people as the world struggles to limit global warming, aiming to hold off impacts ranging from more extreme floods, droughts, storms and sea level rise to growing hunger, water shortages and poverty. Scientists have warned hundreds of millions more people may be affected by 2050 unless unprecedented action is taken to reduce greenhouse gas emissions. Among the personal choices people in developed countries can make that will have the most impact on limiting emissions, having fewer children, flying much less and eating a plant-based diet are most important, some scientists say. Brunschweiger and others argue that it is irresponsible to add to a world population that is expected to rise sharply from 7.6 billion in 2017 to nearly 10 billion by 2050, creating additional pressure on emissions and scarce resources. Other people have decided not to have children because they fear climate change means there may a bleak future for their offspring. Among the second group is musician and activist Blythe Pepino, who set up global campaign group BirthStrike for those who have vowed not to have children due to the “severity of the ecological crisis and the current inaction of governing forces”. Pepino fell “head over heels in love” two years ago and was planning a family, only to reconsider after reading research about global warming risks. “Knowing that the likelihood is that we are not heading into a safe future – it started to make me realize that (having children) didn’t seem like a very sensible option,” she said. She went on to set up BirthStrike, both to spread a “punchy” message about the impact of climate change and to offer a “solidarity group for the people starting to feel the emotional consequences”.
Proposal to spend 25% of EU budget on climate change - Eight European countries have called for an ambitious strategy to tackle climate change – and to spend a quarter of the entire EU budget on fighting it. The joint statement says the EU should have net-zero greenhouse gas emissions by 2050 "at the latest". It was signed by France, Belgium, Denmark, Luxemburg, Netherlands, Portugal, Spain, and Sweden. The group says their plan can "go hand in hand with prosperity" and "set an example for other countries to follow." The position paper comes ahead of a major summit of European leaders in the Romanian city of Sibiu, beginning on Thursday, which will discuss the future of Europe and the EU's strategy for the next five years. But not everyone is on board - there are 28 countries in the EU, and several of those absent from the joint position statement are significant players - including Germany. The position of the eight countries is that climate change has "profound implications for the future of humanity" and that its impacts are already apparent - citing "the heat waves and scorching fires of last summer". The group also say that their citizens are clearly concerned "as shown by the recent mobilisation of young people" - in an apparent reference to the wave of walk-outs and marches by schoolchildren across the continent. The Extinction Rebellion protests in London in April also gained widespread attention and have spread to other countries.
Australians overwhelmingly agree climate emergency is nation's No 1 threat - New polling from a respected foreign policy thinktank underscores the point that 2019 is the climate change election, with a majority of Australians saying global warming is a critical threat. The poll undertaken for Lowy says 64% of adults rank climate change number one on a list of 12 threats to Australia’s national interests, up six points from last year’s survey and a jump of 18 points since 2014. The 2019 result is the first time climate has topped the list of threats since Lowy began the research in 2006. After climate change, cyberattacks ranks second, terrorism third and North Korea’s nuclear program fourth. The Lowy result is consistent with private research undertaken by environmental groups and by the major political parties, which suggest climate change is surfacing as a concern in parts of the country normally sanguine about the issue.
Indigenous Australians Challenge Government Over Climate at UN - A group of indigenous Australians plans to submit a complaint to the UN that accuses Australia of failing to act on climate change. The group resides in the low-lying Torres Strait Islands in the country's north. It argues that Australia's lack of climate change policies is putting their culture and ancestral homeland at risk."Tides are rising every year, flooding homes, lands and important cultural sites. Rising sea temperatures are blighting the health of the marine environments around the islands, by bleaching the coral and acidifying theocean," a statement from the indigenous group said."We are seeing this effect on our land and on the social and emotional well-being of our communities who practice culture and traditions," said Kabay Tamu, one of the petitioners."Many Islanders are worried that their islands could quite literally disappear in their lifetimes without urgent action," the group said.The islanders are set to ask the UN to rule that existing international human rights law requires Australia to reduce its emissions to at least 65% below 2005 levels by 2030. They will also demand that the government invest some $14 million in emergency infrastructure, such as sea walls, to protect Torres Strait communities.
‘Huge Moment for Justice’: Landmark Verdict as UK Jury Acquits Extinction Rebellion Co-Founder Who Argued Necessity Defense -- A jury in the United Kingdom acquitted a pair of climate activists—including a co-founder of the Extinction Rebellion movement—of vandalism charges Thursday after they defended their acts of civil disobedience as a proportionate response to the threats posed by the global climate crisis. Jurors at Southwark Crown Court in London unanimously cleared 25-year-old David Durant and 52-year-old Roger Hallam, the Extinction Rebellion co-founder, of all charges that stemmed from their efforts as part of an ultimately successful campaign to pressure King's College London to divest millions of dollars from fossil fuels. On Jan. 19, 2017, Hallam wrote "divest from oil and gas" in water-soluble chalk-based spray paint on the university's property. Hallam and Durant were arrested days later, on February 1, for spray painting the walls of the university's Great Hall. "We are extremely grateful to the jury for following common sense," Hallam said outside court Thursday, according to The Guardian. "Ordinary people, unlike the judiciary, are able to see the broader picture." Durant called the charge of criminal damage he faced "ridiculous," adding that "chalk on the wall is obviously less important than the impending catastrophe for the planet."
Hong Kong’s new Extinction Rebellion chapter looks to turn up the heat on the government over climate change - A small yet passionate arm of the global climate-protection movement Extinction Rebellion has taken root in Hong Kong, calling on the government to reduce net carbon emissions to zero by 2025. The group, currently comprising about 40 expats and locals, said they were planning a sustained campaign of peaceful protests and demonstrations across the city. “We are here to sound the fire alarm. This is a climate emergency. The government needs to act now,” said Olivier Delalande, a founding member of the movement’s Hong Kong chapter. Extinction Rebellion made global headlines a fortnight ago by occupying vast swathes of central London, paralysing public transport and even threatening to shut down Heathrow Airport in a bid to force the British government to declare a climate emergency. The global movement echoes other climate campaigns like the Fridays for Future student strikes inspired by Swedish schoolgirl Greta Thunberg and the Green New Deal called for by the US congresswoman Alexandria Ocasio-Cortez. A French national who came to the city to work in a bank 10 years ago, Delalande was inspired by the movements abroad to launch the environmental pressure group a month ago. “We are a brand-new, democratic movement with no leaders and no hierarchy. Our members come from all walks of life, and we all work on a voluntary basis and don’t take donations,” he said. Along with eight fellow campaigners, they held their first demonstration on May 4, a silent “die-in” outside the Citywalk mall in Tsuen Wan, to simulate the deadly consequences of climate inaction. Among their key demands are that the government “tell the truth” by declaring a climate emergency in Hong Kong, the curbing of greenhouse gas emissions to net zero by 2025, and having the convention of citizens’ assemblies set environmental policies to tackle the “climate catastrophe”
'The Planet's on F***ing Fire’: Bill Nye Explains Climate Change to Adults -- Bill Nye the Science Guy has lost his cool when it comes to climate change.In a segment on John Oliver's Last Week Tonight Sunday, the beloved science communicator riffed on the set-up of the PBS series that made him famous. Donning a lab coat and safety glasses, he proceeded to school the audience on global warming, but this time he used some very adult language. Green New Deal: Last Week Tonight with John Oliver (HBO) – YouTube "By the end of this century, if emissions keep rising, the average temperature on Earth could go up another four to eight degrees," Nye said, as CNN reported. "What I'm saying is the planet's on f***ing fire."Nye then proceeded to light a globe on fire with a blow torch. "There are a lot of things we could do to put it out—are any of them free? No, of course not. Nothing's free, you idiots. Grow the f**k up. You're not children anymore. I didn't mind explaining photosynthesis to you when you were 12. But you're adults now, and this is an actually crisis, got it? Safety glasses off, motherf***ers," he added.
Playing DICE with Life on Earth: Nordhaus’s Damage Function Steve Keen (part one). - DICE stands for "Dynamic Integrated model of Climate and the Economy". It's the mathematical model from which Nordhaus derives the results noted in the previous figures. DICE is based on the Neoclassical long term growth model devised by the mathematical prodigy Frank Ramsey in 1928 {Ramsey, 1928 #5029}. This is the same foundation as the mainstream RBC ("Real Business Cycle") and DSGE ("Dynamic Stochastic General Equilibrium") macroeconomic models that completely failed to anticipate the 2008 Global Financial Crisis. That its macroeconomic cousins fared so badly at their chosen task is cause enough for concern. These models were intended to forecast short-term economic growth, and were completely wrong about the immediate economic future, to disastrous effect. This is a serious issue that I'll take up in later chapters. However, the features that Nordhaus has added to model Climate Change are far worse than the inadequate foundation on which it was built. DICE's major additions to the standard model are:
- A "damage function" that relates the increase in average global temperature to a decline in GDP. This is the source of the "Future damages" estimates shown in Figure 2 (in the previous post);
- An "abatement function" that calculates the cost of reducing global temperature rise over what would happen if nothing were done to tackle Climate Change. This is the source of "Present abatement" estimates shown in Figure 2; and
- Equations to relate GDP growth to the increase in CO2 levels in the atmosphere, along with the impact of that increased CO2 on the average global temperature.
Many critics have focused upon the high discount rate that Nordhaus chose to apply calculate the value to existing generations of reducing future Global Warming. But by far the most egregious fallacy in Nordhaus's model is its Damage Function. Nordhaus's Damage Function is the first substantive graphic in the DICE manual, and one look at it (see Figure 8) should give anyone—even Climate Change Deniers (CCDs)—cause for concern. Even if Anthropogenic Global Warming were a myth, even if the temperature rise was being caused by the Sun, would it really be true that a 5 degree increase in the average temperature of the globe would only reduce global GDP by 5 percent?
The climate change story is half true - Gail Tverberg - The climate change story is true in some respects: The climate is indeed changing. And CO2 emissions do seem to affect climate. Burning fossil fuels does indeed make a difference in CO2 levels. The problem I have with the climate change story is that it paints a totally inaccurate story of the predicament the world is facing. The world’s predicament arises primarily from too little affordable resources, especially energy resources; climate change models tend to give the illusion that our problem is one of a superabundance of fossil fuels. Furthermore, the world economy has no real option of using significantly less energy, because the economy tends to collapse when there is not enough energy. Economists have not studied the physics of how a networked economy really works; they rely on an overly simple supply and demand model that seems to suggest that prices can rise endlessly. The quantity of energy supply affects both the supply and demand of finished goods and services. History shows that the result of inadequate energy supplies is often collapse or a resource war, in an attempt to obtain more of the necessary resources. Climate scientists aren’t expected to be economists, but have inadvertently picked up the wrong views of economists and allowed them to affect the climate models they produce. This results in an over-focus on climate issues and an under-focus on the real issues at hand. Let’s look at a few issues related to the climate change story.
- [1] Growth in energy consumption and in world GDP are very closely linked. In fact, energy consumption seems to be the cause of GDP growth. If we look at the relationship between World GDP and energy consumption growth, we see a close correlation, with energy consumption increases and decreases often preceding GDP growth changes. This implies a causal relationship.
- [2] There are two very different views of our energy future, depending upon whether an analyst believes that oil and other energy prices can rise endlessly, or not. Nearly every time the price of oil rises very much, the US economy has tended to head into recession. And forecasters tell us that while some countries (oil exporters) would be winners with higher prices, on average the world economy will tend to shrink. Oil importers, especially, would shrink back in recession. Figure 4 shows a recent chart by Oxford Economics with the conclusion that oil prices cannot rise very much without adversely affecting the world economy.
- [3] To date economists and their policies have had pretty close to zero success in reducing world CO2 fossil fuel emissions. A popular view of economists is, “If every country limits its own CO2 emissions, certainly world emissions will be reduced.” In practice, this does not work. It simply moves emissions around and, in the process, raises total world emissions. A carbon tax sends high-carbon industries to Emerging Market nations, helping ramp up their economies. The country with the carbon tax on its own citizens then imports manufactured items from the Emerging Market nations with no carbon tax, aiding the Emerging Market countries without a carbon tax at the expense of its own citizens. How reasonable is this approach?
- [4] Probably the single most stupid thing world leaders could have done, if they were at all concerned about CO2 emissions, was to add China to the World Trade Organization in December 2001. In looking at world CO2 emissions from fossil fuels, we can see a distinct bend occurring in 2002, the year after China was added to the World Trade Organization.
Climate change: Scientists test radical ways to fix Earth’s climate - Scientists in Cambridge plan to set up a research centre to develop new ways to repair the Earth's climate.It will investigate radical approaches such as refreezing the Earth's poles and removing CO2 from the atmosphere.The centre is being created because of fears that current approaches will not on their own stop dangerous and irreversible damage to the planet. The initiative is the first of its kind in the world and could lead to dramatic reductions in carbon emissions. The initiative is co-ordinated by the government's former chief scientific adviser, Prof Sir David King. "What we do over the next 10 years will determine the future of humanity for the next 10,000 years. There is no major centre in the world that would be focused on this one big issue," he told BBC News. Some of the approaches described by Sir David are often known collectively as geoengineering. One of the most promising ideas for refreezing the poles is to "brighten" the clouds above them. The idea is to pump seawater up to tall masts on uncrewed ships through very fine nozzles. This produces tiny particles of salt which are injected into the clouds, which makes them more widespread and reflective, and so cool the areas below them. Another new approach is a variant of an idea called carbon capture and storage (CCS). CCS involves collecting carbon dioxide emissions from coal or gas fired power stations or steel plants and storing it underground. The scheme involves setting up a plant on-site which converts the firm's carbon emissions into fuel using the plant's waste heat,. "We have a source of hydrogen, we have a source of carbon dioxide, we have a source of heat and we have a source of renewable electricity from the plant," he told BBC News. "We're going to harness all those and we're going to make synthetic fuels." Other ideas the centre would explore include greening the oceans so they can take up more CO2. Such schemes involve fertilising the sea with iron salts which promote the growth of plankton. Previous experiments have shown that they don't take up sufficient CO2 to make the scheme worthwhile and might disrupt the ecosystem. But according to Prof Callum Roberts of York University, approaches that are currently thought beyond the pale now have to be considered and, if possible, made to work. This is because the alternative of damaging and potentially irreversible climate change is considered beyond the pale.
President Trump Touts His Rollback of Environmental Policies in an Energy State — President Trump traveled to an energy state on Tuesday to boast about his administration’s reversal of Obama-era environmental policies, ticking off actions like approving oil pipelines, withdrawing from the Paris climate accord and opening up Arctic drilling that he said have resulted in an “American energy revolution.” Mr. Trump’s visit to Hackberry, a community of about 1,200 residents in a state where natural gas investment is a rapidly expanding sector and where he won 58 percent of the vote in 2016, was billed as a trip to promote energy infrastructure and economic growth at a time when the president is locked in a trade war with China over escalating tariffs. With hard-hatted workers assembled behind him, Mr. Trump spoke to an outdoor audience at the Cameron LNG export terminal, a facility that develops and exports liquefied natural gas. There, he claimed credit for an energy revolution that he said was largely accomplished by demolishing burdensome regulations and unleashing the potential of the energy industry. Mr. Trump also spoke of the oil and pipeline construction jobs that have been created since his election and promised the cheering crowd, “If we win this election, we’re giving you a brand-new I-10 bridge.”The president credited his administration for “opening up ANWR in Alaska,” referring to the Arctic National Wildlife Refuge, a federally protected refuge for migrating caribou and polar bears that for decades has been closed to oil and gas exploration, as well as for “unlocking the full oil and gas potential of the Permian Basin in Texas,” a reference to the shale field that generates four million barrels of oil a day. And he touted his success in refocusing the Environmental Protection Agency and “killing” an Obama-era plan that sought to incentivize utilities to cut emissions and switch from coal to natural gas or renewable power. Mr. Trump’s administration has proposed a far less stringent rule that would still recommend regulating coal plant emissions, but by more moderate efforts like improving efficiency.
Joe Biden Looks to Revive Obama’s Climate Plan. Scientists Say That’s Not Good Enough- At a moment when mounting reports from the world’s top scientists indicate humanity is barrelling toward climate catastrophe and ecological collapse, Democratic presidential candidate Joe Biden is preparing a climate policy that appears to put the United States back on the pre-Trump trajectory.The former vice president’s proposal is anchored in resetting the clock to 2016 by rejoining the Paris climate accord and reinstating Obama-era regulations on power plant and vehicle emissions, according to a Reuters report published Friday. The policy is expected to maintain a role for fossil fuels, and veer away from the Green New Deal framework that most of Biden’s top rivals for his party’s 2020 presidential nomination have embraced.“Reheating the Obama administration’s regulations-plus-Paris approach will be totally insufficient,” said Joseph Majkut, a climate scientist and policy expert at the center-right think tank Niskanen Center.TJ Ducklo, a spokesman for Biden’s campaign, said in an email statement that the former vice president “knows how high the stakes are” and noted his record on addressing climate change. “As president, Biden would enact a bold policy to tackle climate change in a meaningful and lasting way, and will be discussing the specifics of that plan in the near future,” he said. “Any assertions otherwise are not accurate.” While the 44th president forged the first global emissions-cutting deal to include the United States and China, his administration oversaw the rapid expansion of U.S. oil and gas production, a fact about which Obama boasted last November. Expanded U.S. drilling threatens to add 1,000 coal plants’ worth of greenhouse gases by the middle of the century, according to a January analysis by researchers at more than a dozen environmental groups. That will make the emissions reductions set out by the IPCC all but impossible to meet, and discourage countries like China, India and Indonesia — whose emissions are growing at a rapid clip — from adopting cleaner development strategies as the world’s richest nation and biggest historic emitter fails to set an example. “The greatest fault in his proposal is the suggestion that natural gas can be part of the solution,” Michael Mann, a climate scientist at Pennsylvania State University, said by email. “The solution to a problem created by burning fossil fuels cannot be the burning of fossil fuels.”
Biden's 'middle ground' climate policy is code for 'pro natural gas' - The trial balloon that the Biden campaign floated last week — the one about how he wanted a “middle ground” climate policy — set off the closest thing to a scuffle the Democratic primary field has seen yet, with one rival after another insisting that there was no middle ground to be had, only (as the author and activist Naomi Klein put it) “sinking ground, burning ground, churning ground.” Still, we may have reason to be thankful to Biden’s team, for it’s possible that they’ve brought into the open the semi-secret internal Democratic debate on climate. It’s not actually about the danger of global warming, which thankfully everyone more or less agrees on. It’s actually about natural gas. Fracking for natural gas helped restart economic growth, and because when you burn natural gas it gives off less carbon than coal it also seemed to address climate change. It was, in Washington parlance, a win-win, even for the oil companies, who rapidly expanded their shale gas portfolios. Year after year, Obama boasted about the natural gas surge in his State of the Union addresses. Biden has followed right along. Last week in Iowa he said, “the United States is soon going to be the largest producer of energy of any nation in the world by the end of the 2020s. My Lord, what are we so afraid of?” That’s a question with some relatively easy answers. First, it turned out that fracking disrupted communities, polluted water and damaged people’s health — that’s why even moderates like New York Gov. Andrew Cuomo moved to ban it. Second, atmospheric chemists began monitoring the degree to which fracking operations were leaking methane into the atmosphere. Methane is a heat-trapping gas too, and it turned out that it was escaping in quantities large enough to nullify natural gas’s carbon advantage. Indeed, carbon dioxide emissions had fallen as coal plants closed down and gas plants opened up. But methane emissions had gone up enough to compensate. Depending on how you count methane’s heat-trapping capacity, it’s possible total emissions actually increased during the Obama/Biden years. There was another argument for natural gas in 2008, which was that we had no real alternative. Renewable energy was too expensive, and the sun went down at night — it couldn’t carry the load. But if that was true then, it isn’t true now: the engineers have done their job, and the price of a solar panel has fallen 90 percent in the last decade. Sun and wind are now the cheapest way to produce electrons across most of the planet, and the batteries to store that energy are on the same plummeting cost curve.
Could climate change submerge Joe Biden's presidential bid? - Climate change is transforming life by redrawing coastlines, turning vast areas of forest into infernos, stirring enormous storms and spreading exotic diseases. An indirect casualty of this upheaval could be Joe Biden’s hopes of becoming US president. Biden, frontrunner in the polls to secure the Democratic nomination, has not laid out a plan to address the crisis. This is set to change, according to Reuters, with the Biden campaign working on a strategy to reinstate climate policies torn down by Donald Trump, such as restrictions on coal-fired power plants and vehicle fuel efficiency requirements. The plan, which is being worked on by the former Barack Obama adviser Heather Zichal, would see the US remain in the Paris climate agreement and offer support for nuclear energy and also natural gas, which is generally cleaner than coal but still emits planet-warming pollutants. Biden is also said to favour nascent carbon capture technology, which aims to contain and store emissions from industrial facilities. But this “middle ground” approach has been roundly attacked by environmental groups and progressive Democrats for being woefully insufficient. More importantly, it does not appear to chime with the urgent action scientists say is required to avert disastrous climate change. A landmark UN report last year stated that “unprecedented”, “rapid and far-reaching” transformations across energy, land use and transportation are needed to avoid increasingly dire flooding, wildfires, heatwaves, food insecurity and unrest. “A ‘middle ground’ policy that’s supportive of more fossil fuel development is a death sentence for our generation and the millions of people on the frontlines of the climate crisis,” said Varshini Prakash, director of the Sunrise Movement, a youth climate change organization allied to progressive Democrats such as the New York congresswoman Alexandria Ocasio-Cortez. “Biden’s betting that a retreat to mediocrity and tepid policymaking will garner him the Democratic nomination, but climate change is a top issue in this election and voters expect candidates to put forward solutions in line with the crisis.”
Democrats Try to Extend Wind, Solar Aid They Agreed to Let Die - Tax credits worth billions of dollars for the wind and solar industries are set to expire or begin phasing out next year -- part of a 2015 deal Democrats struck that ended a 40-year-old ban on the export of crude oil. But some Democrats are seeking to extend the credits, saying President Donald Trump’s tariffs on solar panels and moves to roll back Obama-era climate-related policies have changed the equation. “We had a change election, we’ve got new leadership in the halls of Congress and we’ve got an opportunity to seize,” Representative Haley Stevens, a Michigan Democrat elected in November, said in an interview. Stevens helped put together a letter to the chairman of the House’s main tax-writing committee -- which has scheduled a hearing for Wednesday on climate change -- calling for giving the wind and solar tax credits more time. It was signed by more than 100 Democrats. “For many of us who served in 2015 when that bipartisan, bicameral agreement was reached, the facts on the ground have now changed demonstrably,” the representatives wrote. The push comes amid an intra-party squabble over climate policy that has pitted progressives led by Representative Alexandria Ocasio-Cortez of New York, a champion of the Green New Deal, against moderates who favor a less radical approach. Under the 2015 agreement, inserted into a 2,000-page bill needed to keep the government funded, a lucrative production tax credit for the wind industry that had expired was restored and scheduled to phase out over five years ending in 2020. The solar industry’s 30% investment tax credit was also extended as part of the deal, with a phase-down slated to begin next year and reach zero for residential projects in 2022. In exchange for granting those Democratic priorities, Republicans secured an end to the 1970s-era prohibition on exporting crude oil.The Democrats, in their letter, wrote that the Trump administration’s efforts to undermine the Clean Power Plan, relax fuel economy standards for cars and trucks, undo efforts to curtail methane emissions and withdraw the U.S. from the Paris climate accords have “fundamentally altered the framework by which the 2015 agreement was reached.”
In North Carolina, wind farm ban misses a key legislative deadline - A contentious bill to ban wind farms in much of eastern North Carolina missed a key legislative deadline last week, but observers say the proposal could well reappear before lawmakers adjourn for the summer.Senate Bill 377 would prohibit new wind turbines in an area reaching into more than 50 counties and covering nearly all of the state’s coastal plain, according to a study commissioned by the General Assembly that outlines military-related activities in the state.The bill’s sponsors, led by Republican Senate Majority Leader Harry Brown of Onslow County, say the ban is crucial for preserving the state’s economically vital military industry, which could be downsized or moved to other states if 500-foot tall wind turbines begin to impede low-level flight training routes.Critics counter that federal law requires the U.S. Department of Defense and local base commanders to sign off on proposed projects, while state law prevents wind development with “a significant adverse impact” on military installations. The debate has become a perennial one in the Republican-controlled General Assembly, where Brown has introduced legislation to restrict wind turbines for three sessions in a row. But the GOP is divided on the issue, with many lawmakers arguing that clean energy comes with its own economic benefits and that restricting it interferes with private property rights.
Offshore Wind Will Need Bigger Boats. Much Bigger Boats -- How do you install a wind turbine almost the size of the Chrysler building in the open ocean? Just get a boat with deck space larger than a football field and a crane that can lift the weight of 1,100 Chevy Suburban SUVs. Those specialist ships are scarce, numbering about a dozen in the world. And at a cost of more than $300 million, they each need to be capable of hoisting generators the size of shipping containers atop steel towers hundreds of feet tall. While wind turbine manufacturers led by MHI Vestas Offshore Wind A/S and General Electric Co. are expanding the size of their machines quickly, the small cadre of mainly closely-held specialist shipowners that does the installations is hesitant to build more ships before they know how big the vessels need to be. That indicates a looming ship shortage in the next decade, threatening the outlook for a seven-fold jump in offshore wind capacity by 2030. “The installation companies will have to adapt to meet expected demand,” But for now, analysts say the industry have underestimated the challenge faced by ever-larger machines. That concern doesn’t seem to register with the ambitions of renewable energy developers. Europe’s biggest utilities are investing more than $10 billion this year alone on getting electricity from sea breezes. BloombergNEF expects offshore wind capacity to jump to 154 gigawatts by the end of the next decade from about 22 gigawatts now as the thirst for cleaner electricity grows. Most offshore wind farms are in northwest Europe, but China, the U.S., and South Korea will be big markets in the future. Installing turbines is a feat of engineering. First, foundations weighing hundreds of tons are rammed or anchored into to the seabed at depths of 50 meters or more. Then, a massive crane hoists steel towers each the size of a small skyscraper on to the footings. Finally, the generator housing, or nacelle, is perched on top and the blades are put in place. Those nacelles already are about the size of a truck.
German Failure on the Road to a Renewable Future - Spiegel -The vision of the fantastic new world of the future was born eight years ago, on March 11, 2011, the day an earthquake-triggered tsunami damaged the nuclear power plant in Fukushima, Japan. The disaster led Chancellor Angela Merkel and her cabinet to resolve to phase out nuclear power in Germany. It was an historic event and an historic decision.But the sweeping idea has become bogged down in the details of German reality. The so-called Energiewende, the shift away from nuclear in favor of renewables, the greatest political project undertaken here since Germany's reunification, is facing failure. In the eight years since Fukushima, none of Germany's leaders in Berlin have fully thrown themselves into the project, not least the chancellor. Lawmakers have introduced laws, decrees and guidelines, but there is nobody to coordinate the Energiewende, much less speed it up. And all of them are terrified of resistance from the voters, whenever a wind turbine needs to be erected or a new high-voltage transmission line needs to be laid out.Analysts from McKinsey have been following the Energiewende since 2012, and their latest report is damning. Germany, it says, "is far from meeting the targets it set for itself."Germany's Federal Court of Auditors is even more forthright about the failures. The shift to renewables, the federal auditors say, has cost at least 160 billion euros in the last five years. Meanwhile, the expenditures "are in extreme disproportion to the results," Federal Court of Auditors President Kay Scheller said last fall, although his assessment went largely unheard in the political arena. Scheller is even concerned that voters could soon lose all faith in the government because of this massive failure. Surveys document the transformation of this grand idea into an even grander frustration. Despite being hugely accepting initially, Germans now see it as being too expensive, too chaotic and too unfair.
Murkowski: We Must Improve America’s Mineral Security - U.S. Sen. Lisa Murkowski, R-Alaska, today chaired a hearing of the Energy and Natural Resources Committee to examine opportunities to strengthen our nation’s mineral security. As part of the hearing, the committee also received testimony on S. 1052, the Rare Earth Element Advanced Coal Technologies Act, and S. 1317, the American Mineral Security Act.Murkowski opened the hearing by underscoring the importance of minerals, describing them as the “foundation of our modern society.” She contrasted that with America’s rising dependence on foreign suppliers for many of the minerals used to keep our economy strong and our nation safe.“In 1997, we imported 100 percent of 11 different minerals and 50 percent or more of another 26,” Murkowski said. “A little over twenty years later, our foreign mineral dependence has increased significantly. According to the U.S. Geological Survey, last year we imported at least 50 percent of 48 minerals, including 100 percent of 18 of them.”Murkowski pointed to the many times the committee has focused on mineral security under her leadership, and reiterated that Congress must complement the administration’s actions with new legislation to help rebuild the domestic supply chain. “I hope that this is finally the year that Congress will work together to advance bipartisan legislation that will help rebuild our mineral supply chain,” Murkowski said. Joe Balash, Assistant Secretary for Land and Minerals Management at the Department of the Interior, testified that “The Department is committed to promoting domestically sourced critical minerals. Doing so will create and sustain jobs, promote U.S. technological innovation, and reduce our Nation’s vulnerability to disruptions in the critical mineral supply chain.”
California May Go Dark This Summer, and Most Aren't Ready - A plan by California’s biggest utility to cut power on high-wind days during the onrushing wildfire season could plunge millions of residents into darkness. And most people aren’t ready. The plan by PG&E Corp. comes after the bankrupt utility said a transmission line that snapped in windy weather probably started last year’s Camp Fire, the deadliest in state history. While the plan may end one problem, it creates another as Californians seek ways to deal with what some fear could be days and days of blackouts. Some residents are turning to other power sources, a boon for home battery systems marketed by Sunrun Inc., Tesla Inc. and Vivint Solar Inc. But the numbers of those systems in use are relatively small when compared with PG&E’s 5.4 million customers. Meanwhile, Governor Gavin Newsom said he’s budgeting $75 million to help communities deal with the threat. "I’m worried," Newsom said Thursday during a budget briefing in Sacramento. "We’re all worried about it for the elderly. We’re worried about it because we could see people’s power shut off not for a day or two but potentially a week." Six of the 10 most destructive wildfires in California history have come in the last 18 months, killing 123 people, and often shutting down large sections of the state’s electrical grid. The wildfire season usually starts around June and runs through December, exacerbated by strong winds that race through the state and dry conditions that turn brush and plants into tinder. PG&E has warned the city of Calistoga that it could cut service as many as 15 times this fire season, said Chris Canning, mayor of the Napa Valley town scarred by wildfires two years ago.
New dam proposal in Sierra Nevada stirs debate over California energy policy - Up a remote canyon in the towering eastern Sierra, a Southern California company has an ambitious plan to dam the area’s cold, rushing waters and build one of the state’s first big hydroelectric facilities in decades. The project, southeast of Yosemite near the town of Bishop (Inyo County), faces long regulatory odds as well as daunting costs. But residents of the Owens Valley downstream and state environmentalists are not taking it lightly. The complex, as proposed in an application to the Federal Energy Regulatory Commission last month, is scheduled for mostly federal land at the edge of the Inyo National Forest, partly in the popular John Muir Wilderness. It threatens to disrupt a landscape known for its brown trout and bighorn sheep, unparalleled alpine vistas, and pristine rivers and lakes. Yet, the plan comes at a time when California is eager for clean, climate friendly energy, and renewed interest is emerging in hydroelectric plants. Such facilities are not always considered green; however, they offer a unique way of storing wind and solar power, which are cleaner but provide only sporadic contributions to the electrical grid. The proposed “pumped-storage” project would essentially bank solar and wind energy by pumping creek water uphill when the power sources are plentiful, say during sunny or windy times, and conversely, send the water back down through power-producing turbines when the energy is needed. “It’s a great way to manage the intermittency of renewable energy,” said Frank Wolak, an economics professor at Stanford University and director of the school’s Program on Energy and Sustainable Development, who called pumped storage “ideal” for helping the state scale up its clean power. “But the problem in California is siting the projects.” Several federal and state agencies will have a say in whether a new, large hydroelectric undertaking is appropriate for California. Most regulators have only begun reviewing the proposal, though officials at the Inyo National Forest recently expressed concerns about disturbances to mountains, rivers and wildlife in a letter to the applicant.
Illinois might start charging $1,000 per year to own an electric vehicle: 'It's outrageous' - A proposed hike in Illinois’ annual registration fee for electric vehicles, from $17.50 to $1,000, is being called unfair by current EV owners, and a sales disincentive by manufacturers — just as the new technology is beginning to gain broader traction. Aimed at raising money to make overdue road improvements across Illinois, the proposed legislation would also more than double the state’s gas tax to 44 cents a gallon and raise the registration fee for standard vehicles to $148, from $98, among other elements. But the kicker is a nearly 60-fold increase in the electric vehicle registration fee — one that is sure to cause sticker shock across a nascent segment of the auto industry, which has depended on government incentives to entice early adopters. Hybrids and plug-in electric hybrids, which both use gas to supplement electric power, are not included in the $1,000 fee proposal. The justification for the dramatic hike? Electric vehicles don’t provide the state with any gas tax revenue. “There’s definitely a push, because electric vehicles don’t pay any gas taxes,” said Pete Sander, president of the Illinois Automobile Dealers Association. Tesla said it opposes the Illinois fee increase. Electric truck startup Rivian, which is slated to begin production at its factory in downstate Normal next year, was more outspoken. “Imposing fees on EVs that are over 400 percent more than their gasoline-powered counterparts is not only unfair, it discourages promising new technology that will reduce our dependence on petroleum, reduce emissions, and promote the Illinois economy,” Rivian spokesman Michael McHale said. The legislation, introduced this week by Democratic Sen. Martin Sandoval of Chicago, would raise about $2.4 billion in annual transportation funding, according to its backers. .
Gas Plant Rejection Brings the Energy Transition Home to Indiana - Indiana utility Vectren South wanted to replace its baseload coal plants with a massive gas plant. In late April, regulators blocked that plan. The surprise rejection of the 850-megawatt project, which had been estimated to cost $781 million, comes as regulators in other states have applied greater scrutiny to large capital investments that utilities are seeking to build. The critique holds that massive expenditures for large, centralized assets during a time of rapid change to the electricity industry could become a bad deal for ratepayers. California has already rejected a few natural-gas plant contracts in favor of clean options like energy storage and renewables, but this is a new outcome for coal country. The Indiana decision joins a growing number of cases where state utility regulators have pushed utilities to consider more decentralized, lower-carbon grid planning. “Instead of running continuously, Vectren South's units are now cycled up and down throughout the day, or are shut down altogether, decreasing unit efficiency and increasing wear and tear on the units,” the regulatory filing notes, paraphrasing Wayne Games, Vectren’s VP of power supply.The old plants can’t keep up with today’s fast-paced market, so Vectren South decided to retire 730 megawatts of coal plants and replace them with a 700-megawatt combined cycle gas plant, combined with 150 megawatts of new peaking capacity to replace 135 megawatts that will retire.Vectren South ran a request for proposal process and received bids for power-purchase agreements as well as build-and-sell deals, but opted to go a different route: building the plant itself.The case made for some strange bedfellows. Environmentalist groups like the Sierra Club intervened to oppose the new gas plant because t hey want to limit new fossil-fueled infrastructure. Local coal industry groups opposed the gas plant, because they want the utility to keep burning coal as long as possible. In rejecting the utility-built gas plant proposal, the commissioners highlighted a disjoint between the 30-year or longer lifetime of a major gas plant investment, and the “environment of rapid technological innovation on both the utility and customer side of the meter.” In light of those changes, which include increasingly low prices for renewable power and the maturation of energy storage, the regulators found Vectren South’s RFP to be “unduly restrictive."
May: Global energy investment stabilised above USD 1.8 trillion in 2018, but security - Global energy investment stabilised in 2018, ending three consecutive years of decline, as capital spending on oil, gas and coal supply bounced back while investment stalled for energy efficiency and renewables, according to the International Energy Agency’s latest annual review.The findings of the World Energy Investment 2019 report signal a growing mismatch between current trends and the paths to meeting the Paris Agreement and other sustainable development goals. Global energy investment totalled more than USD 1.8 trillion in 2018, a level similar to 2017. For the third year in a row, the power sector attracted more investment than the oil and gas industry. The biggest jump in overall energy investment was in the United States, where it was boosted by higher spending in upstream supply, particularly shale, but also electricity networks. The increase narrowed the gap between the United States and China, which remained the world’s largest investment destination.Still, even as investments stabilized, approvals for new conventional oil and gas projects fell short of what would be needed to meet continued robust growth in global energy demand. At the same time, there are few signs of the substantial reallocation of capital towards energy efficiency and cleaner supply sources that is needed to bring investments in line with the Paris Agreement and other sustainable development goals.“Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies,” said Dr Fatih Birol, the IEA’s Executive Director. “But the bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner energy technologies to change course. Whichever way you look, we are storing up risks for the future.”The world is witnessing a shift in investments towards energy supply projects that have shorter lead times. In power generation and the upstream oil and gas sector, the industry is bringing capacity to market more than 20% faster than at the beginning of the decade. This reflects industry and investors seeking to better manage risks in a changing energy system, and also improved project management and lower costs for shorter-cycle assets such as solar PV, onshore wind and US shale.
We need to ditch coal before it's too late, climate activist Bill McKibben warns - The decline of coal can't come soon enough, and neither can the world's shift to renewable energy, environmentalist Bill McKibben tells CBSN. "The world demand in coal has begun to sink. It's been replaced with natural gas which, sadly, isn't much cleaner," McKibben said in an interview. "What we really need to do is make the leap straight to renewable energy." It's a problem he's seen coming for a long time. "I wrote the first book about climate change 30 years ago this year and at the time it was still a kind of warning, but now it's not a warning at all. Now it's the brute fact of daily life for hundred of millions of people," McKibben said. "We're heading into completely unprecedented territory and if we don't take action soon our ability to forestall this will be gone." McKibben's breakout nonfiction book, "The End of Nature," served as a call to arms when it was published in 1989 and, for many, was an introduction to the concept of climate change. His work has earned him numerous accolades, including the Sierra Club's John Muir Award and a Guggenheim Fellowship. In his latest book, "Falter," McKibben stresses the importance of taking immediate action in the face of a dwindling window to combat climate change. One of the reasons McKibben believes the world has been so slow to adapt is because of political ideologies that value markets over government and feed doubts about the reality of climate change itself. "Right at the moment when we really needed governments to step up, when we first found out about climate change in the 1970s, that was right around the time that ideology that markets can solve all problems, that government is the problem not the solution, that's when those really took hold," McKibben said. "And they've been things that have prevented us from taking action," he continued. "They allowed the fossil fuel industry to mount this 30-year propaganda effort to make people doubt whether global warming was real. That's not a doubt scientists share, but it's a doubt that much of the public shares."
Conservation groups set to sue over surface mining - Four conservation groups have given notice to President Donald Trump’s administration that it plans to launch a lawsuit against two federal agencies and the state of West Virginia over perceived threats to endangered species from surface mining.Made up of the Center for Biological Diversity (CBD), the Sierra Club and its West Virginia chapter, the West Virginia Highlands Conservancy and the Ohio Valley Environmental Coalition, the conservation groups sent a 60-day intent-to-sue notice last week. Named in the suit, in addition to the state, are the U.S. Department of Interior’s Office of Surface Mining Reclamation and Enforcement (SMRE) and the U.S. Fish and Wildlife Service (FWS). The notice alleges that Trump administration officials circumvented the Endangered Species Act by using a 1996 biological opinion to allow surface mining in the habitat of the Guyandotte River and Big Sandy crayfish.Crayfish in both locations were labeled endangered in 2016.In a news release, the CBD alleges that state officials in West Virginia steered the Trump administration to look for shortcuts around federal law going as far as the West Virginia Division of Mining presenting a U.S. Department of Interior official a guidance document that the conservation group contends limits protections on the crayfish.The group further alleges the state issued mining permits which caught the U.S. Fish and Wildlife Service by surprise as it was working to develop new guidance involving the crayfish species. “The public records reveal extensive efforts by Trump administration appointees to prevent the Fish and Wildlife Service from following science and doing what is needed to protect the crayfish,” the CBD news release reads.
How the West Virginia coal industry changed federal endangered species policy - Donna Branham was two miles away from the coal mine, but she could feel the blasts. In 2017, blasting at the surface mine had cracked her ceiling, her mirrors and her fireplace. When the mine was shut down amid complaints that its waste was encroaching on crayfish, a threatened species, she thought she had caught a break. Now the mine is back in business, thanks to the intervention of Trump appointees at the Department of the Interior and West Virginia officials who allowed the resumption of drilling at Twin Branch and about a half-dozen other mines under a June 2017 policy, according to documents obtained under the Freedom of Information Act (FOIA). President Trump’s pro-coal stance is not surprising, but the documents offer a rare glimpse into how state and industry officials have tapped the president’s political appointees to advance their economic interests over the objections of the agency charged with protecting endangered wildlife — in this case, two crayfish species that help keep the state’s creeks and rivers healthy. A United Nations panel warned in a report Monday that human activities have pushed one-eighth of the world’s species to the brink of extinction and urged governments to protect them. Meanwhile, the emails show that the Trump administration has moved in the opposite direction: Federal, state and industry officials bypassed the U.S. Fish and Wildlife Service to win approval for operations near sensitive habitat. Championed by Landon “Tucker” Davis, an Interior Department official who used to represent the state’s coal industry, a 2017 directive that paved the way for mine permits illustrates how environmental rollbacks enacted at the start of the administration are reshaping the nation’s landscape in ways that could harm threatened species. 
Now the Center for Biological Diversity and other advocacy groups are preparing to sue the Interior Department for failing to protect the crustaceans from activities such as those at Twin Branch mine. The center’s senior scientist, Tierra Curry, who helped qualify the two species as endangered, laid out her argument as she watched a coal truck make its way recently to a mining operation permitted under Trump policy. “The law says you can’t jeopardize an endangered species, and the science says sediment and pollution from coal mines is going to jeopardize the species,” she said, referring to the Endangered Species Act. “So the law and the science are both clear.”
Danger in the Dust -- It's a disease that has impacted thousands of coal miners, with miners in our region at risk more than in any other part of the country. A July 2018 report from the Centers for Disease Control says one in 10 underground coal miners who worked in the mines for at least 25 years were diagnosed with black lung. However, in central Appalachia, as many as one in five have black lung. "I always took pride in being a coal miner...buying my family anything they wanted," said Danny Fouts, 44. But that pride has turned to depression as he now struggles to breathe on his own, and had to quit working. Danny has to do several breathing treatments a day. He says it started off small, but the list of treatments has grown. "Well first I started out on just the nebulizer, just the breathing treatments," Danny explained. "Then when they started seeing how advanced the black lung was, then it went to the inhalers. Then it went to oxygen." Danny was part of the largest surge of black lung cases amongst the youngest of miners. The CDC says the uptick was especially prevalent in Kentucky, Virginia, and West Virginia. The U.S. Department of Labor says of the more than 4,600 cases recorded since 1970, half of those were not diagnosed until the year 2000. The disease is starting to hit a lot younger, too. Typically miners are diagnosed when they are in their 60s, but now doctors are seeing patients in their 30s become diagnosed like Danny was. At Boone Memorial Hospital in Madison, West Virginia, their black lung clinic is testing miners on a regular basis for the disease. "I usually test six or seven miners a day when I'm here," said pulmonologist Jeffery Werchowski. "A good percentage of them end up having some form of black lung." In the year since the black lung clinic opened, they've tested more than 1,000 miners. A July 2018 report from the Centers for Disease Control says one in ten underground coal miners who worked in the mines for at least 25 years were diagnosed with black lung. However, in central Appalachia, as many as one in five have black lung. Though there are treatments to make living with black lung more tolerable, but there is no cure.
Utilities Charging Customers For Coal Clean-Up Face Blowback - First, states across the U.S. ordered utilities to clean up ponds full of toxic coal waste. Now, they’re balking at how much companies want to charge for the work. Officials from Virginia to North Carolina to South Carolina are pushing back on utilities’ plans to charge customers for the costs of shuttering coal-ash ponds, long the primary way of storing residue from burning the fuel. In a potential blow to Dominion Energy Inc., the staff of Virginia’s utility regulator expressed concerns in a filing released Wednesday over the company’s bid to recover as much as $247 million through monthly bills for cleanup efforts. It’s a high-stakes battle for utilities, which have so far escaped any shareholder wrath over cleanup expenses because investors assumed the costs would be baked into customers’ rates. Duke Energy Corp. in particular would take a big hit as the utility is estimating costs of as much as $10.6 billion in the Carolinas. Officials there are already challenging more than a half-billion dollars. “Any disallowance could become problematic” for utilities, said Paul Patterson, an analyst with Glenrock Associates. On the flip side, he asked, “How do you do this in a manner that it doesn’t become the straw that breaks the camel’s back and makes things unaffordable” for customers? In Virginia, Dominion is asking for permission to charge customers the cost of a landfill, sedimentation ponds and water treatment facilities that it built at an existing coal plant in 2015. Virginia Attorney General Mark Herring has challenged the request, saying the Richmond-based company failed to consider whether the project was necessary given the region’s bounty of cheap natural gas. He noted Dominion has decided to close two units at the plant and may shut two more by 2023. The company’s project will probably provide “little or no value” to customers as a result of “these multiple decision-making failures,” energy consultant Scott Norwood said in testimony on behalf of the attorney general. Those concerns are shared by staff at the Virginia’s Division of Public Utility Regulation, a deputy director at the agency, Gregory Abbott, said in the filing released Wednesday.
Trump’s plans for protecting polluters have been a devastating success. - Across the Trump administration, top agency officials have been busy building a bureaucratic scaffolding to stymie federal enforcement actions against the nation’s wealthiest and most powerful players. Officials in the Justice Department, Environmental Protection Agency, and the Consumer Financial Protection Bureau, among others, have been moving to muzzle agencies’ fact-finding powers, add layers of bureaucratic control, complicate chains of command, and strip power from regional officers and enforcement specialists. The result has been historic declines in enforcement actions against banks, corporations, and corporate executives—precisely as Bannon promised. The Trump administration has more than lived up to that initial slashing tone. Through its tenure, the administration has ramped up immigration enforcement, while presiding over a precipitous drop in enforcement of environmental and civil rights laws, and of regulating corporate crime. For polluters and corporations, the administration has doled out a handful of meager reprisals, wielding bureaucratic tools such as memoranda and fortified top-down structures to chill agencies’ enforcement powers. Across the agencies, enforcement actions against polluters, banks, and corporations have dwindled. The Environmental Protection Agency collected a mere $69 million in civil and administrative penalties from polluters in 2018, the lowest amount levied by the agency in more than a decade. Criminal fines collected by the EPA from polluters plunged to $88 million, the lowest total for such penalties assessed in a decade. In 2018, EPA referred the fewest new criminal cases to the Justice Department in any year since 1988. The nation’s financial sectors also received a reprieve. Corporate penalties imposed in Justice Department prosecutions plummeted by 72 percent during the first 20 months of the administration, compared to those levied during the final 20 months of the Obama presidency. Meanwhile, penalties imposed and illicit profits ordered returned by the Securities and Exchange Commission fell by 62 percent. The volume of publicly announced enforcement actions by the Consumer Financial Protection Bureau under Donald Trump’s tenure has also steeply declined.
Why coal ash and tailings dam disasters occur -- On 25 January 2019, the structure damming a pond filled with iron ore mining wastes (tailings) burst at Brumadinho, Brazil (1), causing a massive mudslide that killed at least 232 people. This tailings dam failure was only the most recent in a long list of catastrophic tailings dam accidents (see the first figure) (2, 3). Similar accidents also occur at electric power stations, where ponds are used to store coal combustion residuals such as fly and bottom ash. There are about 1000 operating ash ponds in the United States (4), and coal consumption patterns suggest that there may be more than 9000 worldwide. The catastrophic accident at the Kingston fossil power plant in Tennessee in 2008 (5) highlights the destructive potential of ash pond failures. Detailed analysis of tailings dam and ash pond failures shows that little-understood processes such as time-delayed triggering mechanisms are more likely to manifest when best engineering practices are disregarded.Failure of the containment structure around mine tailings and coal ash is often followed by a fast-moving mudflow, which can run downstream for several miles, with catastrophic consequences. This liquefaction of the impounded materials may suggest to regulators and the public that the problem lies with the impounded materials themselves. However, in the absence of internal collapse or induced shear (for example, as a result of a seismic event), liquefaction and outflow of ponded ash and tailings occur after the dam has failed. Thus, liquefaction does not cause the failure, but rather the disaster that follows. Forensic analyses of ash pond and tailings dam failures are hindered by the massive destruction that washes away evidence from the failed zone. Nevertheless, forensic investigations of notable dam failures have identified several mechanisms, including overtopping due to water mismanagement (Merriespruit, South Africa, 1994) (6), shear failure of foundation soils (Mount Polley, Canada, 2014) (7), and shear of compressible low-permeability tailings placed near the perimeter of the impoundment (Samarco, Brazil, 2015) (8). These postfailure investigations have often found the convergence of more than one weakness in the design, construction, and/or operation of the dam.
AEP to close two units at Conesville coal plant on May 31 - American Electric Power Co. Inc. will shut down units 5 and 6 at its 1,530-MW Conesville coal plant in Coshocton County, Ohio, on May 31, a company spokeswoman confirmed. The units represent 750MW of generating capacity in the PJM Interconnection market. In October 2018, AEP said it notified employees of plans to shut down the plant by May 31, 2020. “There are market conditions that could result in two of the generating units at Conesville (Units 5 and 6) closing as soon as May 2019,” AEP spokeswoman Melissa McHenry said at the time. On May 13, she said the company had decided to close the units this month. AEP had previously announced that it would close the two units in 2022. McHenry said the company expects the other operating unit at the plant, unit 4, to remain in service until May 2020. This unit has 780 MW of capacity, according to S&P Global Market Intelligence data. The plant’s primary sources of coal, according to Market Intelligence data, are the CCU Barb Coal Tipple mine in Coshocton County, Ohio, and Buckingham Mine No. 6 in Perry County, Ohio.
Fourth-Largest Coal Producer In the US Files For Bankruptcy --Cloud Peak Energy, the US' fourth-largest coal mining company, filed for Chapter 11 bankruptcy late last week as the company missed an extension deadline to make a $1.8 million loan payment. In a statement, Cloud Peak said it will continue to operate its three massive coal mines in Wyoming and Montana while it goes through the restructuring process. Colin Marshall, the president and CEO of the company, said that he believed a sale of the company's assets "will provide the best opportunity to maximize value for Cloud Peak Energy."Cloud Peak was one of the few major coal producers who escaped the significant coal industry downturn between 2015 and 2016. That bought it a reputation for prudence and business acumen.But thinning margins have strained the mining company as customers for thermal coal continue to dry up. Coal-fired electricity is expected to fall this summer, even though summer months are usually boom times for coal plants as air conditioning bolsters electricity demand. That's because cheap natural gas and a boost in renewable capacity have displaced dirtier, more expensive coal. According to the Casper Star Tribune, Cloud Peak shipped 50 million tons of coal in 2018. The paper noted that after the bankruptcy filing, "speculation almost immediately began that Cloud Peak would sell its mines."
Bankrupt Coal Company Funded Climate Change Denialism - THE BANKRUPTCY OF one of the largest domestic coal producers in the country has revealed that the company maintains financial ties to many of the leading groups that have sowed doubt over the human causes of global warming. The disclosures are from Cloud Peak Energy, a Wyoming-based coal mining corporation that filed for Chapter 11 bankruptcy on May 10. The company had been battered by low coal prices, including in international markets cultivated by the firm. The documents in the court docket show that the coal giant gave contributions to leading think tanks that have attacked the link between the burning of fossil fuels and climate change, as well as to several conservative advocacy groups that have attempted to undermine policies intended to shift the economy toward renewable energy. The documents do not include information on the size of the contributions, yet, taken as a whole, the list of groups Cloud Peak Energy helped fund are indicative of how the company prioritized pushing climate denialism. The company did not respond to a request for comment. The contributions are revealed in a filing that lists recipients of grants, creditors, and contractors. The document shows that Cloud Peak Energy helped fund the Institute of Energy Research, a Washington, D.C.-based group that has dismissed the “so-called scientific consensus” on climate change and regularly criticizes investments in renewable energy as a “waste” of resources. Several of the groups that receive funding from Cloud Peak Energy have used aggressive tactics to attempt to discredit environmentalists. The Center for Consumer Freedom, one of the groups listed in the coal company’s filing, is part of a sprawling network of front groups set up by a lobbyist named Rick Berman geared toward attacking green groups such as the Sierra Club and Food & Water Watch as dangerous radicals.
Radioactive 'Nuclear Coffin' May Be Leaking Into The Pacific -- UN Secretary General Antonio Guterres has sounded the alarm over a giant concrete dome built 40 years ago in the Marshall Islands to contain radioactive waste from Cold War-era atomic tests. According to Guterres, the dome - which houses approximately 73,000 cubic meters of debris on Runit island, part of the Enewetak Atoll - may be leaking radioactive material into the Pacific Ocean, as the porous ground underneath the 18" thick dome was never lined as originally planned. It was constructed in the crater formed by the 18-kt Cactus test. "The Pacific was victimised in the past as we all know," Guterres told students in the island nation of Figi while on a tour of the South Pacific. "I've just been with the President of the Marshall Islands (Hilda Heine), who is very worried because there is a risk of leaking of radioactive materials that are contained in a kind of coffin in the area." Residents of the Islands were relocated from their ancestral lands shortly after the United States began what would become 67 nuclear weapons tests from 1946 - 1958 at Bikini and Enewetak atolls. Despite US efforts to move people to safety, thousands of islanders were exposed to radioactive fallout from above-ground tests conducted before a moratorium was enacted in 1958. The tests included the 15 Megaton Castle Bravo on the Bikini Atoll, which was detonated on March 1, 1954. It was the most powerful ever detonated by the United States - and around 1,000 times bigger than the bomb dropped on Hiroshima just nine years before. Cracks are visible in the dome's surface, and the sea sometimes washes over its surface during storms, according to ABC."The United States Government has acknowledged that a major typhoon could break it apart and cause all of the radiation in it to disperse," said Columbia University's Michael Gerrard. A 2013 DoE report found that the soil outside of the dome is more contaminated than its contents - as the 1970s cleaning operation only removed an estimated 0.8 percent of the total nuclear waste in Enewetak atoll.
Chernobyl has become a refuge for wildlife 33 years after the nuclear accident - Although there are not clear figures, the physical loss of human lives and physiological consequences were huge. Estimates of the number of human fatalities vary wildly. The initial impact on the environment was also important. One of the areas more heavily affected by the radiation was the pine forest near the plant, known since then as the “Red Forest”. This area received the highest doses of radiation, the pine trees died instantly and all the leaves turned red. Few animals survived the highest radiation levels. Therefore, after the accident it was assumed that the area would become a desert for life. Considering the long time that some radioactive compounds take to decompose and disappear from the environment, the forecast was that the area would remain devoid of wildlife for centuries. But today, 33 years after the accident, the Chernobyl exclusion zone, which covers an area now in Ukraine and Belarus, is inhabited by brown bears, bisons, wolves, lynxes, Przewalski horses, and more than 200 bird species, among other animals. As part of this project, motion detection cameras were installed for several years in different areas of the exclusion zone. The photos recorded by these cameras reveal the presence of abundant fauna at all levels of radiation. These cameras recorded the first observation of brown bears and European bison inside the Ukrainian side of the zone, as well as the increase in the number of wolves and Przewalski horses. Our own work with the amphibians of Chernobyl has also detected abundant populations across the exclusion zone, even on the more contaminated areas. Furthermore, we have also found signs that could represent adaptive responses to life with radiation. For instance, frogs within the exclusion zone are darker than frogs living outside it, which is a possible defence against radiation. .Studies have also detected some negative effects of radiation at an individual level. For example, some insects seem to have a shorter lifespan and are more affected by parasites in areas of high radiation. Some birds also have higher levels of albinism, as well as physiological and genetic alterations when living in highly contaminated localities. But these effects don’t seem to affect the maintenance of wildlife population in the area. The general absence of negative effects of radiation on Chernobyl wildlife can be a consequence of several factors: First, wildlife could be much more resistant to radiation than previously thought. Another alternative possibility is that some organisms could be starting to show adaptive responses that would allow them to cope with radiation and live inside the exclusion zone without harm. In addition, the absence of humans inside the exclusion zone could be favouring many species – big mammals in particular. That final option would suggest that the pressures generated by human activities would be more negative for wildlife in the medium-term than a nuclear accident – a quite revealing vision of the human impact on the natural environment.
Ohio School Near Old Uranium Plant Closed After Radioactive Contamination Found - An Ohio middle school located less than three miles from a decommissioned uranium enrichment plant has been closed for the rest of the school year after authorities found it was contaminated with radioactive chemicals, according to WLWT. A nearby air monitor detected enriched uranium and neptunium-237 at Zahn's Corner Middle School in Piketon, southern Ohio. Today was the last day for Zahns Corner Middle School students in Piketon, OH. School leaders sent a letter home to parents. County health officials tell me if students or staff are exposed to enough enriched uranium, they're at risk for developing cancer. @WLWT pic.twitter.com/nnJveZVRg5— Jatara McGee WLWT (@jatara_) May 14, 2019The nearby Portsmouth gaseous diffusion plant, just 2.7 miles away, enriched weapons-grade uranium from 1954 - 2001. It was operated by Goodyear Tire and Rubber Company until 1986 - changing hands until Lockheed Martin bought its owner in 1995. In January, Sen. Rob Portman (R-OH) announced that the Trump Administration had earmarked $115 million to reopen the facility, which would employ 60 people to operate 16 centrifuges, pending EPA approval. "After the Cold War, weapons-grade uranium enrichment was suspended and production facilities were leased to the private sector," reads the Department of Energy's website. "In 2001, enrichment operations were discontinued at the site." Local councilwoman Jennifer Chandler told CNN that three children out of five in the school district diagnosed with cancer have died. "You don't want to make a claim that you can't back up," she said. "How is this caused? Is this a genetic cancer? Is this an environmental cancer? I'm not a medical professional." "This isn't a game, you know. These are people's lives."
Senate Bill 33 labeling some types of trespass a felony threatens Ohioans' rights - Editorial Board, cleveland.com and The Plain Dealer - A pernicious bill seeking to curtail Ohioans’ protest rights that died at the end of the last General Assembly session is back. And this time, Senate Bill 33 -- part of a nationwide effort to limit protest rights at natural gas pipelines -- appears to be headed for passage. Republican legislators in Ohio who treasure constitutional rights and the rule of law should push back. SB 33 would make certain types of protest at “critical infrastructure facilities” like pipelines or telecommunications facilities a third-degree felony, which can carry a prison sentence of nine months to five years. It would also subject organizations supporting such protests to fines ten times the maximum now provided in Ohio law -- that is, up to $100,000 per violation. And whistle-blowers who warn of safety concerns at infrastructure projects could be subject to similar sanctions. The intent is obvious: to suppress protests or any impediments to such projects, curtailing Ohioans’ free-speech rights in the process, along with the right to peaceable assembly guaranteed in the state constitution. In Ohio Senate testimony last month, Jen Miller, executive director of the League of Women Voters of Ohio, warned that the bill’s vague language could make something as innocuous as posting notice of a legal protest on a telephone poll subject to the bill’s criminal charges and fines. SB 33′s harsh penalties also could “intimidate whistleblowers” into remaining silent on safety hazards, Miller warned. As our editorial board noted in opposing a version of this bill that died at the end of last year, SB 33 is unneeded. Ohio already has perfectly adequate laws on criminal trespass, criminal mischief and aggravated trespass. Nor can backers of the law point to a single incident in Ohio that merits such legislation. Yet earlier this month, SB 33 flew out of the Ohio Senate on a largely party-line 24-8 vote, with the support of a number of usually level-headed local Republican lawmakers. They included Sens. John Eklund of Geauga County, Kristina Roegner of Summit County and Kirk Schuring of Stark County. The bill is now pending in the Ohio House Public Utilities Committee, led by Rep. Jamie Callender of Lake County. It should be shelved, for the good of all Ohioans and to preserve the free-speech rights that all of us treasure.
Strs Ohio Has $364000 Stake in ONEOK, Inc. - Strs Ohio grew its position in ONEOK, Inc. by 8.3% in the 1st quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 5,226 shares of the utilities provider’s stock after buying an additional 400 shares during the period. Strs Ohio’s holdings in ONEOK were worth $364,000 as of its most recent SEC filing. ONEOK, Inc, together with its subsidiaries, engages in the gathering, processing, storage, and transportation of natural gas in the United States. It operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions.
Groundbreaking set today for gas-fired power plant in Columbiana County - A clean energy project that developers say will create hundreds of construction jobs is scheduled to get underway in southern Columbiana County today. South Field Energy LLC will hold a groundbreaking ceremony this afternoon for a new 1,182-megawatt, combined-cycle natural gas electric generating facility on 20 acres of land about three miles outside Wellsville. State-of-the art technology is designed to make the $1.1 billion plant an efficient and environmentally-friendly natural gas electric generating facility. The development of the site will employ approximately 1,000 construction workers and 25 full-time employees upon completion in mid 2021. Once in operation, South Field Energy will sell capacity and energy into PJM, the largest regional transmission organization within the United States. Avanced Power, which is behind the project, announced on Tuesday that it has sold a 15% membership interest in South Field Energy Partners LLC to ENEOS Power USA LLC, an affiliate of JXTG Nippon Oil and Energy Corporation, a leading oil and energy company in Japan. In addition to South Field Energy, Advanced Power also developed, financed and now manages the approximately 700 MW Carroll County Energy project in Carroll County, Ohio and approximately 1,100 MW Cricket Valley Energy project in Dover, New York. The South Field project is not the Valley's first natural gas generating facility. The Lordstown Energy Center has been generating 940-megawatts of power since its opening on Henn Parkway last fall. Clean Energy Future LLC plans to break ground this summer on 945-megawatt plant near the existing Lordstown plant.
Saltwater injection wells may be coming to Belmont County near St. Clairsville - Martins Ferry Times Leader— Residents near the intersection of U.S. 40 and Ohio 331 have learned that a pair of saltwater injection wells to hold fracking waste may be coming to the site.Property owners within 500 feet of the proposed site received notification in early April from Gerard Russomagno, CEO of the Omni Energy Group LLC out of New Jersey, informing them that the application has been filed with the Ohio Department of Natural Resources.“Our permit’s filed with them, with traffic patterns. Actually our traffic will be much less than (what people believe),” Russomagno said last week, adding that there will not be thousands of trucks on the route daily. “I can’t take more than I can put underground. Our maximum perceived capacity now, until we drill and find out, is coming at somewhere between six and eight trucks per hour.”He added that the area is zoned as commercial/industrial.“This is not a temporary facility,” he said. “We’re going to be here for quite some time. I understand there’s some homeowners, and they own homes in an industrial/commercial zone. At some point whether it’s me or something else, there’s going to be some risk of some commercial industrial operation that has the right to operate on that property.”He said developing the property should be completed quickly should the permit be approved.“That part of the process we’re expecting to only take about 30 days in total,” he said, adding that the total property is a little less than seven acres and would hold two injector wells.
Injection Well Safeguards Vital – editorial - Truck traffic seems to be the primary concern on the minds of some people living near a site where two injection wells to accept fracking waste from oil and gas drilling are to be located. But state officials considering permits for the project should be focused on what may go on underground. Out of sight, out of mind won’t work on this one.A New Jersey firm, Omni Energy Group LLC, is planning the injection wells on a site of nearly seven acres near the intersection of U.S. 40 and Ohio 331 in Belmont County. Plans are for two saltwater injection wells.Though some residents of the area worry about increased heavy truck traffic, Omni Energy CEO Gerard Russomagno says that should not be a problem. No more than six to eight trucks per hour are expected to carry fracking waste to the wells, he explained. Ohio Department of Natural Resources officials say permits for the project are under review. How long that may require is uncertain. Some means of disposing of the enormous quantity of wastewater generated by modern oil and gas drilling is essential. Injection wells — pumping the fluid into underground chambers — are a popular choice.But ODNR officials must look carefully at potential environmental impact. One concern is ensuring fluid from the injection well does not migrate into drinking water supplies.Another worry is earthquakes. ODNR officials concluded a series of quakes in the Youngstown area more than seven years ago was caused by injection wells. The phenomenon is not yet understood well, according to the U.S. Geologic Survey. But the need for some safeguards against injection well quakes is known. ODNR officials should insist such measures be followed to the letter at the Belmont County site.
As Ohio Valley Ponders Plastics Growth, Report Warns Of Threat to Climate - As a new plastics industry emerges in the Ohio Valley, a report by environmental groups warns that the expansion of plastics threatens the world’s ability to keep climate change at bay. The report released Wednesday by the Center for International Environmental Law, Environmental Integrity Project, FracTracker Alliance, and others used publicly available emissions data and original research to measure greenhouse gas emissions throughout the entire life cycle of plastics. That includes the extraction of natural gas, used as a feedstock for plastic production, to the incineration of plastic products or their final resting place in the world’s oceans.“Ninety-nine percent of what goes into plastics is fossil fuels and their climate impacts actually start at the wellhead and the drill pad,” said Carroll Muffett, president of the nonprofitCenter for International Environmental Law and one of the authors of the report. “In light of the fact that the build-out of plastics infrastructure is ongoing and accelerating, we wanted to better understand the implications of that massive new build out of plastics infrastructure for the global climate.” The report estimates production and incineration of plastic this year will add more than 850 million metric tons of greenhouse gases to the atmosphere, or equal to the pollution of building 189 new coal-fired power plants.That figure will rise substantially over the next few decades as the demand for single-use plastic continues to grow, the report finds. By 2050, emissions from the entire plastics life cycle could account for as much as 14 percent of the earth’s entire remaining carbon budget.Plastics manufacturers are investing millions into new petrochemical plants, including in the Ohio Valley, driven by demand and cheap natural gas from the fracking boom. Shell’s Monaca ethane cracker plant currently under construction in Beaver County, Pennsylvania is permitted to release up to 2.25 million tons of greenhouse gas pollution annually. Similarly, Thailand-based PTT Global Chemical is seeking permits for a cracker plant in Belmont County, Ohio, across the Ohio River from West Virginia. The plant would be permitted to release the equivalent carbon dioxide emissions of putting about 365,000 cars on the road. Muffett said that sort of increased investment in plastics manufacturing was one of the main reasons the groups decided to highlight the climate implications associated with plastics. “This petrochemical build-out is a key driver of plastics contribution to climate impacts now and in the future,” he said. “This build-out is going to lead to the production of massive quantities of new plastics. It's also going to lead to the incineration and disposal of massive amounts of new plastics.”
Why Not Store Highly Volatile Ethane in Caverns Under West Virginia? - The Appalachian Storage Hub (ASH), sometimes called the Appalachian Storage and Trading Hub, is a proposal for underground storage of various natural gas byproducts that could support a plastics industry. Natural gas is mostly methane, but in some formations, significant amounts of other gases and liquids (including propane, butane, and especially ethane) occur with the methane. These are usually separated from methane because they burn hotter or have more value for manufacturing purposes.Without a market, these may be “flared” (burned off to eliminate them). But converting ethane to ethylene and polyethylene makes the ethane valuable for plastics. The process requires multi-billion-dollar “cracker” plants, several of which are proposed for West Virginia and adjoining states to take advantage of the ready supply from the fracking boom and the large volumes of these liquids. But a cracker plant wants a steady supply of ethane, and the ASH is needed to store the large volumes needed. Neither the ASH nor the crackers are economically viable without the other. Proponents argue that the ASH is the key to $100 billion in investments and tens of thousands of jobs. In 2015, almost all nations signed the Paris Climate Agreement, committing these nations to reduce greenhouse gas emissions to keep global warming below 2o C, and striving for 1.5o C. Construction of a large gas industry is fundamentally incompatible with that goal. Yet none of the proponents will discuss this issue, or even admit that it is real. None of the major investors in the ASH or cracker plants or related industries are including greenhouse gas mitigation in their business plans. Ethane crackers create more demand for fracking and natural gas wells, pipelines and related facilities. These all emit methane, and some emit a lot. Methane is 84 times more effective at capturing heat than carbon dioxide (over a 20-year life span). Ethane crackers also use tremendous amounts of electricity, most of which is expected to come from fossil fuels. It is expected that the plastics industry will account for one-sixth of all greenhouse gas emissions by 2050. Most importantly, investments in fossil fuel infrastructure slow the transition to sustainable, renewable energy sources.
Significant Erosion & Sediment Violations Logged on Mountain Valley Pipeline - Developers of the Mountain Valley Pipeline have agreed to pay a fine of nearly $266,000 for violating environmental regulations in West Virginia. The agreement, outlined in a consent order from the West Virginia Department of Environmental Protection, marks the first financial penalty for problems with storm water runoff caused by building a 303-mile pipeline that will also cross the New River and Roanoke valleys. Photographs included in the 179-page document show a “drastic change” in streams since work on the buried pipeline began last winter, said Angie Rosser, executive director of the West Virginia Rivers Coalition. “These are clear-running streams and they have been forever,” Rosser said. “And you look at the photos now and they are just brown.” Mountain Valley faces similar issues in Virginia. A lawsuit filed in December by the Department of Environmental Quality alleges more than 300 violations of erosion and sediment control measures. Online court records indicate the case is still pending. In West Virginia, 26 notices of violation filed from April to November of last year were resolved by the consent order. The agreement, signed May 6 by Robert Cooper, Mountain Valley’s senior vice president for engineering and construction, states the company will pay a fine of $265,972 and submit a plan of corrective action to state regulators.
Mountain Valley Pipeline to pay $266,000 penalty for environmental violations — The Mountain Valley Pipeline and the West Virginia Department of Environmental Protection have entered into a consent order, and the MVP will be paying almost $266,000 for environmental violations. The Charleston Gazette-Mail reports that the agreement comes after several notices of violations that have been issued to the pipeline for violations that were discovered in Braxton, Wetzel and Monroe counties starting in April 2018. Several of the violations were discovered by citizens and reported to the DEP. The consent order contains around 150 pages of photos showing violations, mostly violations related to erosion and water contamination, according to the Charleston Gazette-Mail Penalties are calculated based on the potential that the violation has to harm the environment. The project was originally estimated to cost $3.7 billion and is now expected to cost $4.6 billion, and the completion date has been pushed back from the end of 2018 to the end of 2019, The Charleston Gazette-Mail reports. You must be logged in to react.
Pa. DEP orders Energy Transfer to fix damage to streams and wetlands -- Twenty-three streams that flowed through southwestern Pennsylvania before Energy Transfer built its Revolution pipeline have been filled with dirt. Seventeen wetlands no longer exist because of the 40-mile line, whose explosion in Center Township last September has brought even more scrutiny to the pipeline company that is already among the most investigated in the state. The early morning blast, caused by a landslide, has been followed by months of continuing violations of state laws meant to protect streams and wetlands. A month after the explosion, the Pennsylvania Department of Environmental Protection ordered Texas-based Energy Transfer to stop trying to repair the pipeline and focus instead on stabilizing the nearby ground. DEP also told the company to survey what damage it might have done to water resources along the path of the natural gas gathering line. Those findings — submitted in February — provided the foundation for the DEP’s new order issued on Monday, setting a timeline for Energy Transfer to do a more comprehensive search for unpermitted damage to water resources and to come up with a plan to repair that damage. According to the February report, Energy Transfer filled in 23 streams, about a dozen of which flowed into Raccoon Creek. It piled soil and dirt into portions of other streams, eliminating a total of 3,100 feet of streams along its right of way. The company also altered 70 wetlands, in addition to the 17 that were eliminated. The construction process caused 31 new wetlands and eight new streams to form. “The water that was flowing or being stored in these [altered] streams and wetlands had to go somewhere else,” explained DEP spokesman Elizabeth Rementer. “The erosional forces of the water basically carved out new stream channels.” Earth-moving activities such as laying pipelines do disturb some natural features, although “pipeline projects do not typically eliminate streams and wetlands,” Ms. Rementer said. “Any proposals to do so would have to be set forth in permit applications with appropriate justification.” The streams and wetlands that were part of Monday’s order exist outside of the permitting process. The DEP called them “illegal.”
Pennsylvania House debates bill to require compensation if Delaware River Basin Commission bans fracking — The state House Tuesday began debate on legislation that would require the Delaware River Basin Commission to compensate landowners for economic losses stemming from a possible ban on natural gas fracking. The bill being considered by the state House would mandate that landowners unable to benefit from natural gas drilling due to a current moratorium that could become a permanent ban be compensated as they would in an eminent domain action. The sponsor of the bill is northeastern Pennsylvania Republican Jonathan Fritz. “If the Delaware River Basin Commission is going to prevent a landowner from using his or her property, they must pay for that taking," Fritz said. Delaware and Montgomery counties Democrat Greg Vitali argues that the bill is unconstitutional. “The state of Pennsylvania unilaterally is attempting to interfere with a multi-state and federal compact," he said. The House Tuesday adjourned for the day without taking a vote on the bill.
Countdown for pipeline begins - At one minute before midnight May 15, a state regulator will decide whether to green-light the Williams Transco pipeline, which would travel across New York harbor to the Rockaway Peninsula. The $1 billion project, which will feed fracked gas to National Grid for the outer boroughs and Long Island, either will rescue builders from a looming moratorium on natural-gas hookups or threaten marine life and deepen dependence on fossil fuels.The choice, apparently, is Gov. Andrew Cuomo's. The Department of Environmental Conservation can block the project by deciding it does not meet water-quality standards. Because the route goes through New Jersey as well, Gov. Phil Murphy, whose deadline is June 5, also could forbid it.The politicians would then have to weather the storm that would ensue if National Grid denies, as promised, natural-gas service to new projects, including the Belmont Park redevelopment. The fight over the 24-mile pipeline has heated up as city Comptroller Scott Stringer—a foe—has squared off against Con Edison. The New York utility would not be connected to the tube but announced last month that it might declare its own moratorium in New York City if the project were nixed.
New York Regulators Block Underwater Natural Gas Pipeline - State regulators have denied a water quality permit for a 24-mile underwater pipeline that has drawn protests from environmental groups while backers say it's crucial for meeting rising demand for natural gas in New York City and Long Island.The Northeast Supply Enhancement project from New Jersey to Queens would expand the Transco pipeline, which extends from Texas to the Northeast coast. It would allow National Grid to bring natural gas from Pennsylvania's shale gas fields to the metropolitan region.Environmental groups say it threatens marine life and extends reliance on fossil fuels rather than renewable energy sources.The permit denial was announced Wednesday. A spokesman for pipeline developer Williams Partners says it will quickly resubmit the application. New Jersey regulators must also decide on the project by June 5
New York Rejects Keystone-Like Pipeline In Fierce Battle Over The State's Energy Future - In a major victory for environmental activists, New York regulators on Wednesday rejected the construction of a heavily disputed, nearly $1 billion natural gas pipeline, even as business leaders and energy companies warned that the decision could devastate the state’s economy and bring a gas moratorium to New York City and Long Island.The pipeline was planned to run 37 miles, connecting natural gas fields in Pennsylvania to New Jersey and New York. Its operator, the Oklahoma-based Williams Companies, pitched it as a crucial addition to the region’s energy infrastructure, one that would deliver enough fuel to satisfy New York’s booming energy needs and stave off a looming shortage.But environmental groups said Williams was manufacturing a crisis to justify a project that would rip apart fragile ecosystems, handcuff New York to fossil fuels and hobble the state’s march toward renewable resources. The result was an arcane but fevered battle over what was potentially New York’s most fraught environmental decision since it banned fracking in 2014. The fight also took on political overtones, as progressive activists pressed Gov. Andrew M. Cuomo to urge his Department of Environmental Conservation to reject the application, casting it as a threat to his environmental legacy.In a statement announcing the denial, the conservation department did not refer to the firestorm that had preceded its decision, aside from noting that it had received comments from more than 45,000 people about the project — 90 percent of whom opposed it. The department laid out its decision in technical terms, noting that construction would contaminate New York’s waters with mercury and copper. “Construction of the NESE pipeline project is projected to result in water quality violations and fails to meet New York State’s rigorous water quality standards,” the department said, referring to what is formally called the Northeast Supply Enhancement pipeline.
In U.S., New York latest to say no to natural gas infrastructure plans (Thomson Reuters) - A bid to build a controversial pipeline to boost New York’s natural gas supply was rejected by authorities on Wednesday, the latest manifestation of a nationwide divide over the United States’ energy future. The denial of the Northeast Supply Enhancement (NESE) project, whose plans included about 23 miles (37 km) of submarine pipeline off New York City’s coast, came as Washington state and Los Angeles also turned their backs on natural gas. The nearly $1 billion plan by energy infrastructure firm Williams was denied by the New York Department of Environmental Conservation, which cited concerns over water quality and aquatic life. “Construction of the proposed project would result in significant water quality impacts from the re-suspension of sediments and other contaminants, including mercury and copper,” it said in a statement. The decision comes a week after Washington state Governor Jay Inslee opposed two natural gas projects in his state, and three months after Los Angeles Mayor Eric Garcetti said the city would phase out natural gas operations at three power plants. In a statement, Williams lamented the decision and said it would resubmit an application to obtain the permits “quickly”. “The Department of Environmental Conservation raised a minor technical issue with our application for water quality certification,” said Chris Stockton, a Williams spokesman. Natural gas consumption has been growing steadily across the United States, totaling nearly 30,000 billion cubic feet last year, according to the U.S. Energy Information Administration. The NESE project would have added 0.4 billion cubic feet a day. It takes one billion cubic feet to supply about 5 million U.S. homes for a day. Though natural gas emits less planet-warming carbon dioxide than other fossil fuels, the pipeline would have been “a step in the wrong direction”, locking the country into a high-carbon future, said Robert Howarth, a professor at Cornell University. A landmark United Nations report on climate change said last year that to keep the Earth’s temperature rise to a 1.5 degrees C (2.7 F) target would require that renewable energy supply 70% to 85% of electricity by 2050, compared with about 25% now.
Liquefied natural gas imports limited price spikes in New England this winter - During winter 2018–2019, imports of liquefied natural gas (LNG) at terminals serving New England played an important role in moderating natural gas prices in the region. LNG imports are regasified at these terminals and then sent to natural gas distribution networks. These sendout volumes increased during times of high spot natural gas prices at the Algonquin Citygate, a widely referenced trading hub and benchmark for natural gas prices in New England, effectively limiting further increases in spot prices. Spot natural gas prices in New England are more volatile during winter months when cold weather contributes to rising regional natural gas demand and leads to more congestion on the natural gas pipeline network. Because New England does not have underground natural gas storage infrastructure and is not a natural gas-producing region, LNG imports to the region can be a key marginal source of natural gas supply during times of high natural gas demand in the winter. During the bomb cyclone event in early January 2018, spot natural gas prices at Algonquin Citygate spiked to nearly $80 per million British thermal units (MMBtu) on January 4, 2018. During the most recent winter, daily prices at Algonquin Citygate remained lower than $14/MMBtu and averaged about $7/MMBtu in January and February. New England receives LNG imports from three regional regasification facilities: the Canaport LNG onshore terminal (1.0 billion cubic feet per day (Bcf/d) capacity) in New Brunswick, Canada; the Everett LNG onshore terminal (0.7 Bcf/d capacity), near Boston, Massachusetts; and the Northeast Gateway Deepwater Port offshore terminal (0.4 Bcf/d capacity), also near Boston. From November 2017 through March 2018, LNG imports into New England averaged 0.14 Bcf/d and peaked at 0.88 Bcf/d on January 6 during the bomb cyclone event. From November 2018 through March 2019, LNG imports into New England averaged 0.24 Bcf/d and peaked at 1.48 Bcf/d on February 1.
Hotter Weather Trends Help Give Natural Gas Prices A Boost -Natural gas prices advanced higher today, closing at their highest levels since the middle of April, with the June contract up nearly 1.5% on the day. While the front of the curve led the charge, we saw some solid strength throughout the forward curve. What factors led buyers into the market? One reason is that we saw a rather large dip in today's production data. There can be some revisions to this data, but will likely remain as a decent day over day decline, even if only temporary. The other bullish catalyst today? It was the weather. We continue to gradually add demand to the forecast over the next couple of weeks. This comes as models converge on a persistent upper level trough over the western U.S, pumping up a strong downstream warm ridge over the eastern half of the nation, seen in today's 6-10 day GEFS modeling: This results in much warmer than normal temperatures over the majority of demand centers from the middle of the U.S. to the East Coast. The pattern type largely remains the same in the 11-15 day projections: This will no doubt conjure up memories of a year ago, when the pattern turned hotter and stayed that way all summer long, leading to one of the hottest summers on record for the nation as a whole, contributing to the very low end-of-season natural gas storage levels at the end of Summer 2018. Is history going to repeat itself this year?
Another Big EIA Build, But Natural Gas Futures Rebound as Summer Heat Nears - With summer heat in the offing for the Southeast and Mid-Atlantic next week, natural gas futures rebounded Thursday as traders brushed off government storage data that continued the recent run of above-normal inventory builds. In the spot market, prices mostly pushed lower, with the largest declines recorded in California, West Texas and the Northeast; theNGI Spot Gas National Avg. dropped 5.0 cents to $2.160/MMBtu. The June Nymex futures contract settled 3.8 cents higher at $2.639 Thursday as the bulls reclaimed some of the ground they’d lost during a 5.8-cent sell-off the previous session. Models suggest the hotter temperatures won’t be “unending” like the pattern observed last year, with recent data “showing the heat relax as we head toward early June,” according to Bespoke. Meanwhile, the Energy Information Administration (EIA) on Thursday reported an on-target 106 Bcf weekly injection into U.S. natural gas stocks, and futures gained following the news. The 106 Bcf figure, covering the week ended May 10, compares with a 104 Bcf build recorded in the year-ago period and a five-year average 89 Bcf injection. Estimates prior to the report had EIA unveiling a low-triple-digit build in line with the actual number. Major surveys had pointed to a 104 Bcf build, with predictions ranging from 93 Bcf to 125 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Wednesday at 105 Bcf, while NGI’s model predicted a 102 Bcf injection. Bespoke viewed the EIA report as neutral, with the final injection matching the firm’s prediction and generally matching the consensus. “Balance-wise, this is tighter than last week’s 85 Bcf build,” Bespoke said, estimating that recent balances would put the market on track to end the injection season with 4.0 Tcf in the ground. Still, “weather adjusting can be more difficult in these low demand times of the year. While 4.0 Tcf is probably unrealistic, it shows that we still need to see material improvement in balances to avoid a large storage total heading into winter.” Total Lower 48 working gas in underground storage stood at 1,653 Bcf as of May 10, 130 Bcf (8.5%) above year-ago levels but 286 Bcf (minus 14.7%) below the five-year average, according to EIA. By region, the South Central posted the largest weekly injection at 32 Bcf, including 25 Bcf into nonsalt and 6 Bcf into salt stocks. The East injected 31 Bcf, while the Midwest injected 27 Bcf. In the Pacific, EIA recorded a 12 Bcf build, while 4 Bcf was refilled in the Mountain region for the week. The 106 Bcf build implies the market was 0.1 Bcf/d looser than last year after adjusting for weather, according to Raymond James & Associates analysts. By their estimate the market has averaged 2.0 Bcf/d looser over the past four weeks. Analysts with Jefferies LLC observed that the past six weeks have “certainly given storage a head start before we enter the hottest parts of summer, with all April/May injections above average.”
Gas production expected to jump from May to June - Natural gas production from the Lower 48 U.S. states’ seven most productive unconventional plays and basins will jump by nearly 1 billion cubic feet per day (Bcf/d) from May to June, the Energy Information Administration reports. In its just-released Drilling Productivity Report (Dpr) for May, EIA expects natural gas production to grow by 943 million cubic feet per day (Mmcf/d), bringing total production from the seven plays/basins to 80.66 Bcf/d, up from 79.72 Bcf/d in May. (All numbers are rounded.) The biggest May-to-June natural gas production increase is expected in Appalachia, the combination of the Marcellus and Utica shale plays. In this region, gas production will jump 366 Mmcf/d, to 32.11 Bcf/d, from 31.74 Bcf/d in May, the Dpr projects.Five of the seven basins/plays are expected to report a month-to-month natural gas production increase, with three of those regions projected to see triple-digit increases, Kallanish Energy reports.The Haynesville Shale will see its production rise to 11.36 Bcf/d, from 11.07 Bcf/d, a 287 Mmcf/d May-to-June increase. And the Permian’s associated gas production is expected to jump 241 Mmcf/d from May to June, bringing the basin’s gas production to 14.41 Bcf/d in June, from 14.17 Mmcf/d in May, EIA reports. The Anadarko Basin is expected to see its natural gas production fall 31 Mmcf/d from May to June, with total basin production dropping to 7.52 Bcf/d, from 7.55 Bcf/d in May.
Atlantic Coast Pipeline ruling not expected until August — A representative of Dominion Energy’s Atlantic Coast Pipeline says the company doesn’t expect a federal court ruling that could greatly impact the project’s future until at least August. The U.S. Court of Appeals for the 4th Circuit held a hearing Thursday regarding its December ruling that stayed authorization of a key permit previously issued by the U.S. Fish and Wildlife Service, said ACP spokesman Karl Neddenien. The court will now take several months to consider the facts of the case before issuing a decision, Neddenien said. “We look forward to seeing the court’s opinion,” he said. “Based on past practice, we expect that the court would issue its opinion by August.” Dominion officials are hopeful the court will rule in its favor, Neddenien said. “We believe the issues raised by the court in its August 2018 opinion were thoroughly resolved by the United States Fish and Wildlife Service when it reauthorized the project’s Biological Opinion and Incidental Take Statement in September 2018,” Neddenien said. “We also believe that the new issues raised by the petitioners have all been properly addressed and documented in the 80,000-page record for the new Biological Opinion and Incidental Take Statement.” It would take the company some time to ramp back up to full construction on the project even if they receive authorization to resume in August, Neddenien said. “If the court rules that corrections to the Biological Opinion and Incidental Take Statement are needed, we expect that the Fish and Wildlife Service would work expeditiously to issue an amended Biological Opinion in a timeframe consistent with a restart of at least partial construction during the fourth quarter,” he said. The company is also fighting a separate legal battle for the ACP, an attempt to appeal a decision by U.S. Court of Appeals for the 4th Circuit not to reconsider a ruling that denied a permit allowing the pipeline’s route to go through two national forests and across the Appalachian Trail. A panel of three judges in December ruled that the U.S. Forest Service lacked the authority to issue the permit and Dominion officials have said they plan to take the matter to the U.S. Supreme Court. The challenges to the pipeline’s continued construction have come from several environmental advocacy groups, including the Sierra Club, the Shenandoah Valley Network and others.
President Trump aims to open natural gas pipelines with two executive orders - In a victory for the Marcellus Shale region, President Donald Trump signed two executive orders last month aimed at getting natural gas into more homes around the country. Spurred on by states that invoked the Clean Water Act and other environmental protections to block construction of natural gas pipelines, President Trump signed the executive orders to speed up construction. “Too often, badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists,” Trump told a crowd at the International Union of Operating Engineers training center in Crosby, Texas, when signing the executive orders. “This obstruction does not just hurt families and workers like you. It undermines our independence and national security.” The Northeast has been dealing with shortages of natural gas for years, even though it’s cheaper and cleaner than oil and plentiful in the United States. Opposition to building new pipelines or expanding existing ones by states and environmentalists have created huge delivery issues in the Northeast. These issues were on full display in March when Con Edison took the extreme step to place a moratorium on new natural gas hookups in parts of Westchester County. The region’s biggest utility said it didn’t have enough pipelines to meet the need. The lack of natural gas supply in the Northeast has resulted in skyrocketing prices during the coldest days and nights of the winter. In last year’s snow bomb cyclone— an intense wind and snow storm — New England residents saw energy prices jump more than 40%. Pennsylvania, Ohio and West Virginia lead the nation in combined total natural gas production, but the New England region has had to import natural gas from Russia to get through the winter. In one of the executive orders Trump calls for an efficient permitting process that provides clear and reasonable timetables to approve new pipelines. The order also tasks the Environmental Protection Agency with overhauling how states use the Clean Water Act when approving pipelines. “Outdated Federal guidance and regulations regarding section 401 of the Clean Water Act…are causing confusion and uncertainty and are hindering the development of energy infrastructure,” the White House said in the executive order. A second executive order signed by Trump places the power to approve cross- border energy infrastructure projects in the president’s hands. The order is aimed at streamlining the approval process for international energy projects. It’s part of an effort by the White House to speed up the construction on projects, including the controversial Keystone XL, which will bring oil from Canada to the Gulf of Mexico.
North American Pipeline Project Roundup: May 2019 -- North American Oil & Gas Pipelines (press release) The following oil and gas pipeline projects have been announced. Projects are in order of most recent approximate starting date. All projects are for 2019 unless noted. (list of dozens)
Is North America Facing a Pipeline Bubble? – North America’s shale boom is paralleled by the record pace of pipeline construction and now, a long pipeline of projects await a final investment decision. Pipeline Bubble, produced by Global Energy Monitor, now calculates that capital spending on proposed North American pipelines will reach $232.5 billion and raise global pipeline capacity by a third. Pipelines have an operational life of at least 50 years and investors are betting on higher volumes of domestic oil and gas output both for local consumption and for export, as the world’s demand for energy, led by India and China, is forecast to rise by a third by 2040. According to the EIA Annual Energy Outlook 2019 reference case, U.S. natural gas output is expected to rise 36 percent to 43.4 trillion cubic feet by 2050. Crude oil is set for annual records through to the mid- 2020s and remains greater than 14 million barrels a day until 2040. Also, Natural gas plant liquids production is set to reach 6.0 million barrels a day by 2030. Projections of supply and demand appear to favor a boom in pipeline construction and underpins the fact that gas pipe projects outnumber oil, four to one. The power sector as a major gas customer will see the share of natural gas rise from 35.1 percent today to 39 percent in 2050 to satisfy rising demand and feed the rise in new gas peaking plants, which will be needed to provide base load and back-up for the anticipated rise in renewable energy. Likewise, with demand for polyethylene expected to grow from 40 million metric tons last year to 60 million metric tons in the next two decades, new pipelines are under construction to meet the needs of new ethane cracker plants located along the Ohio River.Increased drilling in oil formations in the East and Southwest of the country and burgeoning oil output from the Permian Basin has caused congestion of existing pipeline capacity to refineries on the Great Lakes as well as oil export terminals Houston and Corpus Christi on the Gulf Coast. New take-away pipes are close to completion and more are planned. Keeping oil prices low at home is an American imperative, but producers needing higher prices and increased sales will look to foreign markets. A case in point is the Keystone pipeline extension which will boost pipeline capacity between Canada’s Albertan tar sand oil fields as well as the Bakken fields of North Dakota and Montana and U.S. Gulf Coast refineries and export terminals. In Texas burgeoning output is creating a need for new take-away pipes to access Gulf Coast ports, newly built LNG export terminals and to satisfy rapidly growing demand for gas from Mexico’s power sector. Since early 2016, U.S. LNG exports have benefitted from higher prices in Asia, particularly in South Korea, China, Taiwan and India. More will be needed as U.S. LNG export capacity is expected to rise to 86 million tonnes in 2025 and to a hefty 115 million tonnes in 2040.
After Standing Rock, protesting pipelines can get you a decade in prison and $100K in fines - Cherri Foytlin and her fellow protestors spent much of last summer suspended 35-feet in the air in “sky pods” tied to cypress trees. Though the protesters were on private land with the landowner’s permission, somewere eventually arrested by St. Martin’s Parish Sheriff’s deputies in mid August. The pipeline was completed in March, yet Foytlin could still face up to five years in prison and $1,000 in fines. That’s because Louisiana’s Governor John Bel Edwards, a Democrat, signed HB 727 into law last spring, making trespassing on “critical infrastructure” property a much more serious crime than garden-variety trespassing. What was once a misdemeanor is now a felony. The law takes a broad view of what’s “critical”: pipelines, natural gas plants, and other facilities, as well as property on a proposed pipeline route, even if the pipeline isn’t there yet. Foytlin is one of at least 16 people in Louisiana who’ve been arrested and charged with felonies under the new law, according to Loyola University law professor Bill Quigley, who’s representing Foytlin. All of them were jailed and had to post bonds, some as high as $20,000 to get out. The district attorney hasn’t officially charged any of them yet, Quigley said.“These are people saying let’s make sure we have something left for future generations in the most beautiful swamp in the world,” Foytlin said. “And for that we were charged with felonies, we were beaten, we were stepped on, I was choked.” To her, the law allows the state to jail people for unpopular political views. (Messages left with the St. Martin Parish Sheriff’s Office weren’t returned.)The effort to punish pipeline protestors has spread across states with ample oil and gas reserves in the last two years and, in some cases, has garnered bipartisan support. Besides Louisiana, four other states — Oklahoma, North Dakota, South Dakota and Iowa — have enacted similar laws after protests against the Dakota Access Pipeline generated national attention and inspired a wave of civil disobedience. Just last week in Texas, House lawmakers passed a bill that makes interfering with some oil and gas operations a third-degree felony — on par with indecent exposure to a child. Lawmakers in at least seven other states, including Minnesota, Kentucky, and Illinois, are considering similar legislation. All these efforts have garnered broad support from the oil and gas industry. And many of the bills bear a startling resemblance to model legislation being pushed by the American Legislative Exchange Council, a conservative nonprofit backed by the Koch Brothers.
N Carolina panel comparing fracking regulations around US - (AP) — The state commission directed to regulate oil and gas fracking that could someday rise in North Carolina is sorting out regulation of the nascent industry.The North Carolina Oil and Gas Commission meets Tuesday in Raleigh and will discuss how the state compares to others in details like how far wells must be from water supplies and neighbors.The commission has held six meetings in the 14 months since it was revamped after lengthy legal fights. Commissioners are picked by the governor and legislative leaders. The legislature altered the commission following a 2016 state Supreme Court ruling that struck down its composition.
Rebounding Haynesville shale breaks 2011 production record - The Haynesville shale in East Texas and Louisiana hasn't boomed for nearly a decade, but a recent resurgence in activity has pushed the gassy shale play's output to a record high this spring. The Haynesville is churning out a record high of 10.5 billion cubic feet of natural gas a day this April, surpassing the 2011 peak of more than 10.4 billion cubic feet daily, according to the U.S. Energy Department, which projects that output will jump to 10.75 billion cubic feet a day in May. The surge is buoyed by moderately higher gas prices and increasing demand coming from the influx of new liquefied natural gas export projects coming online along the Texas and Louisiana Gulf Coast. Maybe most important is the Haynesville's proximity to the Gulf Coast compared to other gas-producing areas. The gas also is selling to petrochemical plants for feedstock, and a lot of it is even being piped to Mexico. The Haynesville was the nation's leading natural gas source until 2012 when it was surpassed by the Appalachia region, including the Marcellus and Utica shale plays mostly in Pennsylvania, West Virginia and Ohio. The Haynesville also dropped off as gas prices fell and energy companies shifted their focus to shale plays that contained larger volumes of crude oil like South Texas' Eagle For shale. West Texas' booming Permian Basin also has surpassed the Haynesville entirely from all the associated gas that comes along with the oil production. The Permian is producing almost 14 billion cubic feet of gas a day, although pipeline shortages in the region have meant many companies are paying to have the gas shipped away for no profit. In the Haynesville though, production also has become much more efficient during the course of the past decade, according to a new report from the Moody's Investors Service. "The economics of production in the Haynesville have improved since earlier in the decade, and the basin is now experiencing a resurgence of activity as the economics of production have improved," Moody's noted.
KBR Wins Texas LNG Project -- Freeport LNG Development, L.P. has selected KBR, Inc. as the preferred bidder for the engineering, procurement, construction and commissioning (EPC) contract for Train 4 at its LNG export facility near Freeport, Texas, KBR reported Monday.KBR stated that it will provide engineering, procurement, construction, commissioning and startup of a nominal 5-million ton per annum (mtpa) LNG train and associated gas pre-treatment plant under the anticipated EPC contract. The company added that it was selected following a nine-month front-end engineering and design (FEED) verification, execution planning and EPC proposal process.According to Freeport LNG’s website, the company is adding a fourth liquefaction train adjacent to the first three trains at its facility on Quintana Island in Brazoria County, Texas. The new 5-mtpa Train 4 will raise the facility’s total LNG export capacity to 20 mtpa, Freeport LNG stated. The fixed price EPC contract should be concluded this quarter, KBR noted. In addition, the company stated that it expects a subsequent limited notice to proceed period that will include early engineering and commitment of critical long-lead equipment orders. KBR anticipates a full notice to proceed for the Train 4 project during the second half of this year.
China's ramping up of tariffs on U.S. LNG means nothing, everything -(Reuters) - China’s decision to hike import duties on U.S. liquefied natural gas (LNG) is a move that means very little for the market in the short term, but it has the potential to deliver outsized consequences the longer the levies remain in place. As part of its latest round of retaliatory tariffs on U.S. imports, Beijing increased the duty on LNG shipments from 10 percent to 25 percent. This will make it even more uneconomic for Chinese buyers to purchase LNG cargoes from the United States. The 10 percent tariff put in place last year has already devastated the trade, with China’s imports of the fuel dropping sharply. China imported 25 U.S. LNG cargoes in the first half of 2018, and this slipped to just eight in the second half, according to vessel-tracking data compiled by Refintiv. This year, a mere three cargoes have been delivered, one each in January, February and March, and no more are currently scheduled to arrive in the coming months. This means in practical terms that raising China’s import duty will have little impact on global LNG flows. But there are certain to be longer-term consequences from the fastest-growing LNG market effectively locking out the world’s fastest-growing supplier. Much of the new LNG coming on stream this year and next is based in the United States, as companies rush to take advantage of the plentiful and cheap supplies of natural gas delivered by the nation’s shale boom. It’s also worth noting that the United States is the dominant player in the next wave of LNG projects being planned around the world. The United States currently has 64.2 million tonnes of annual LNG capacity under construction, the bulk of which will hit the market this year and next. Together with Canada, it also has a further 164.2 million tonnes in capacity for which the final investment decisions are due by the end of next year. The market expectation is that China will overtake Japan as the world’s largest LNG importer sometime in the next decade, even though its annual rate of growth will moderate from the breakneck pace of more than 40 percent for the past two years. This means China will become the most important single player in the LNG buyers’ market, just as it already is for several other commodities, such as iron ore, copper, crude oil and coal. Both existing and emerging U.S. LNG producers won’t want to be shut out of that market, but if the trade war continues for several years it’s likely that some projects will struggle to secure the necessary financing to progress.
Cleanup continuing in Houston Ship Channel after vessels collide and spill gas product – CNN - Ship and barge traffic is resuming in the Houston Ship Channel as cleanup efforts continue in the aftermath of a spill that sent thousands of barrels of gasoline blending product into the channel, officials said Sunday. The spill came after a collision in the channel Friday between a 755-foot oil tanker and a tug pushing two barges. The impact capsized one barge, damaged the other and triggered the leak of gasoline blending stock that the barges were carrying, the US Coast Guard said. The barges -- pushed by the towing vessel Voyager -- were loaded with the gasoline blending component reformate, which leaked into the water after the collision near Bayport, Texas, officials said. About 9,000 barrels of reformate spilled into the channel, according to incident commander Jim Guidry, an executive with Kirby Inland Marine, owner and operator of the Voyager. There were no reported injuries during the collision with the tanker, the Genesis River. An estimated 25,000 barrels of gasoline blend stock were loaded on each barge, a Coast Guard statement said. Federal, state and local agencies are involved in the cleanup and environmental monitoring. A statement from those agencies Sunday said that the damaged barges have been secured and efforts were underway to remove cargo from the barges. "Work is expected to continue throughout the day with an established priority of ensuring the protection of (Galveston) Bay from the additional release of product," the statement said. Officials at a news conference Sunday said some 2,700 air monitoring samples from the area had been taken and none of them exceeded "established action levels," meaning they don't pose a health risk at this point. Water quality testing is being done along the bay, the statement said.
Investment firm pays $6.5B for pipeline operator Buckeye Partners - Houston pipeline firm Buckeye Partners will sell for $6.5 billion to an Australian investment firm focused on pipelines, terminals, roads and other infrastructure. Buckeye Partners, which had struggled financially of late, decided to sell itself to IFM Investors after a strategic review, previously selling a large chunk of assets last year. "Buckeye's Board recently reviewed strategic options for the business and determined that IFM's proposal to acquire Buckeye is in the best interest of Buckeye," said Buckeye Chairman and Chief Executive Clark Smith. The all-cash deal is a 27 percent premium on Buckeye's stock price on Thursday. Buckeye owns about 6,000 miles of petroleum pipelines, 115 terminals and a large supply of storage tanks focused primarily along the East Coast and Gulf Coast.
Texas Lawmakers May Stiffen Penalties for Pipeline Damage (AP) — Lawmakers in Texas are considering a bill that would stiffen penalties for damaging or trespassing around oil and gas operations despite opposition from environmental groups who say it would quell peaceful protests and overly criminalize offenses. Environmental activists and oil and gas lobbyists returned to the Texas capital on Wednesday to go head-to-head over the bill at a public hearing. There, they clashed over its necessity and whether the bill would suppress Texans' right to legally protest pipeline projects. The effort comes as states around the country have introduced similar measures targeting demonstrations such as those in North Dakota against the Dakota Access oil pipeline, which resulted in hundreds of arrests and cost the state $38 million. South Dakota Gov. Kristi Noem signed a pair of bills into law in March aimed at potential protests against the planned Keystone XL oil pipeline and is now facing a federal lawsuit by the American Civil Liberties Union. The bill sponsored by Republican state Rep. Chris Paddie of Marshall would also classify any oil or gas pipelines as critical infrastructure, placing them in the same category as power plants and water treatment facilities. The bill would extend the penalties to protect any property deemed critical infrastructure.
Kinder Morgan files motion to dismiss eminent domain lawsuit - Roughly a week after multiple parties filed suit against Kinder Morgan’s Permian Highway Pipeline (PHP), the Houston-based firm fought back by filing a motion to dismiss the claims, according to a press release. The filing, submitted May 7, asked the judge in charge of the case for a summary judgement based on “ample reasons” for dismissal, according to Kinder Morgan officials. It is unknown at this time if a decision on the motion has been made. According to the release, the plaintiffs, which include Hays County and the city of Kyle, assert “no wrongdoing” on the part of Kinder Morgan. “In addition, they are demanding relief under a statute that does not create a right of action against a private party like PHP,” according to the release. Kinder Morgan officials also said the lawsuit “ignores the fact” that the PHP’s eminent domain rights derive from the Texas Constitution and the Texas Legislature. Officials cited more than $14 billion in state and local taxes and state royalties were paid by the oil and natural gas industry.
Texas judge orders alleged polluter of Skull Creek to stop accepting waste - Three months after the waters of Skull Creek first turned black, a Travis County state district judge issued a temporary injunction Tuesday against Inland Environmental and Remediation and David Polston, its president, requiring the company to stop accepting waste and halt any further polluting of the creek. The injunction prevents Polston from storing or processing any waste at the company’s site near Altair, just south of Columbus, in a manner that “causes, suffers, or allows discharge into or adjacent to waters” in the state. The agreement — reached among the Texas attorney general’s office, the Lower Colorado River Authority and Polston’s lawyers — also requires the defendants to “abate and contain all spills and discharges at the site” and start removing and properly disposing of waste.Inland processes oil and gas drilling waste and turns it manufactured products like road base, according to its website. Its site is adjacent to Skull Creek, which flows for more than 10 miles before emptying into the Colorado River, which ultimately flows into Matagorda Bay, a popular fishing and boating spot on Texas’ Gulf Coast.Under the injunction, Polston is required to submit progress reports every Monday to the Texas Commission on Environmental Quality, the LCRA and the attorney general’s office detailing the actions Inland has taken to comply with the injunction’s stipulations. They include assessing the extent of the contamination, removing road base material along the creek, and creating a detailed inventory and a map of all waste at the site.
‘Kill the bill! Save the land!’ Native protectors disrupt Texas legislature - Indigenous land and water protectors in Austin, Texas, briefly disrupted the state legislature on Tuesday when they unfurled two banners in the Texas State House of Representatives and shouted, “Kill the bill! Save the land!” The action was intended to stop the passage of House Bill 3557, which would increase the seriousness of violations that interfere with “critical infrastructure,” such as pipelines, by elevating them from misdemeanors to felonies. Jennifer K. Falcon of the Society of Native Nations, who is running the campaign to stop the bill, explained the increased penalty would inhibit free speech and unfairly criminalize Indigenous people who are only trying to protect their land. “We have been lobbying to stop this bill for quite a while, about six months now,” Falcon said. “Yesterday was the second reading of the bill and a lot of Democrats decided to vote for it. So we decided we would escalate and try to flip some of those Democrats and let them know how serious we were.” As the state representatives began their second vote on the bill, the protectors unfurled two banners from the spectator’s balcony, one on either side of the House chamber. One read, “Kill the bill! Save the land!” And the other read, “Indigenous women won’t be silenced.” The protectors included members of the Carrizo Camecrudo tribe of South Texas who, in addition to opposing the bill, is also fighting the construction of President Trump’s border wall in their homelands. When the banners unfurled, the protectors began shouting “Kill the bill! Save the land!” and “Overcriminalization!” Members of the Texas Capitol Police immediately advanced on them. One grabbed the end of the “Kill the bill!” banner and bunched it up, making it unreadable. They then ordered the protectors out of the House chamber. Approximately ten protectors were herded into a small area of the lobby and surrounded by officers. One independent journalist, Lilith Sinclair, who was in the balcony with the protectors as an observer, was also caught up in the scoop. She was questioned and released.
Apache Bets Big on Permian Gas Liquids - A ride through the Permian Basin’s little-drilled southwest corner looks a bit like the rest of the shale patch. But there are a couple of big differences: The drilling rights to about 300,000 acres in the field belong to a single company, Houston-based Apache Corp. And unlike in much of the Permian, the underlying rock here is far richer in natural gas than it is in oil. Welcome to the Alpine High. These two factors are shifting the focus for one of America’s oldest oil producers in its flagship discovery. After falling oil prices at the end of 2018 forced Apache to cut its budget, the company temporarily stopped its hunt for oil in parts of the field. In the meantime, it’s opening three plants to process the profusion of natural gas it’s found into more marketable propane and butane.In September 2016, Apache said it had made an "immense" find in the Alpine High, with the promise of at least 3 billion barrels of oil in place in two of the five formations. Apache Chief Executive Officer John Christmann described the play as being like a “giant onion,” with the company learning more and more about the discovery as it peeled back each subsequent layer.But initial tests for crude haven’t shown as prolific a result as seen elsewhere in the Permian, and Apache now talks about crude oil being a byproduct of its natural gas at a time when other drillers can’t get rid of the fuel fast enough.That’s spurring worry among some investors that Apache may be hanging on to an iffy asset at a time when larger companies might be considering acquisitions in the wake of the bidding war over Anadarko Petroleum Corp. While several central Permian players have found their way onto short lists of expected takeout targets, Apache has been largely absent.“A lot of Permian-focused investors are looking for very fast growth,” Luther said, though he added that could change as oil majors like Exxon Mobil Corp. and Royal Dutch Shell Plc look to increase the proportion of natural gas in their portfolio. “The benefits of Apache’s bet on Alpine High remain to be seen,” said Devin McDermott, an analyst at Morgan Stanley who has a sell rating on the stock. “The play remains in its early days, and the long-term outlook is uncertain.”
Surge of New Permian Basin Oil to Feed Global Supply - Exports of the Permian Basin’s newest kind of oil are set to jump as production surges, exceeding the appetite of U.S. refiners. Sales of the new grade, known as West Texas Light, began in September, as explorers sought to separate out increasingly lighter and less sulfurous crude bubbling up from wells in West Texas and New Mexico, so it wouldn’t lessen the quality of U.S. benchmark West Texas Intermediate. WTL supply has grown to over 500,000 barrels a day, a nearly four-fold rise from last year. While some of that is staying close by, most will need to be exported. "I suspect that refineries that can blend to run lighter slates are likely already doing so to the best they can," . "Every incremental barrel produced in the U.S. should be earmarked for export," unless it’s a heavy crude, Tran said. Shipments overseas began in February and have neared 1.42 million barrels through this month. Most was sent to the Netherlands and the rest for Canada, while none has headed to Asia so far, according to U.S. Customs data and ship tracking data compiled by Bloomberg. Renewed U.S.-led sanctions on Iran could provide an opportunity.Presently, some 1 million barrels of storage has been set aside in the Permian and Cushing, Oklahoma, to market WTL, according to people familiar with the matter. Some pipes are starting to accept it as a proper grade, the people said. Still, more pipeline capacity would be needed, which is expected to start coming online late this year and in 2020. "Pipelines from Midland and Cushing to the Gulf Coast are full right now. It’s a problem for any crude, including WTL," Aronson said. WTL is being marketed to Asian buyers for refining and petrochemical use, according to a report by analysts at Macquarie Capital (USA) Inc. Even with its higher content of light products such as naphtha, it would be globally marketable for at least three years. However, that could change later on because of rapidly growing natural gas liquids and condensates supply, both of which have similar yields. That might be a boon for buyers, as WTL prices could drop, particularly in Asia, which has numerous other options for light, low-sulfur crudes. Currently, the grade is trading at $1 to $1.50 a barrel under WTI Midland, compared with a $2.50 discount last month, according to people familiar with the matter.
US oil and gas rig count falls by six on the week to 1065: Platts Analytics - The US oil and natural gas rig count fell by six to 1,065 in the week ending Wednesday, according to the latest data from S&P Global Platts Analytics, as nationwide totals continued the steady decrease seen during the past six months. Oil-specific rigs accounted for the drop, falling by 14 to 838, while gas-driven rigs rose by six to 224. An increase of two was registered for rigs not specified for oil or gas. The total US rig count the same week a year ago was 1,117. The oil and gas rig count averaged 1,071 in the prior week, and 1,084 the week before. The domestic rig count reached 1,223 in mid-November 2018 but has gradually slipped since, although there have been some periodic weekly gains. The biggest week-on-week movement was the Permian Basin of West Texas and southeastern New Mexico, which decreased by five rigs to 457. Next was the Williston Basin of North Dakota and Montana, down three rigs to 59. The Bakken Shale saw its rig count climb two to 65. North Dakota, home to the giant Bakken, this week reported oil output averaged 1.390 million b/d in March, up 4% from the previous month. Rig movements in the other six named US basins were negligible. In four plays, the number of rigs stayed the same: the SCOOP-STACK play in Oklahoma at 86; the Eagle Ford Shale in South Texas at 83; the Marcellus Dry play, mostly in Pennsylvania, at 35 ; and the Denver-Julesburg Basin, mostly in Colorado, at 32. Three basins each gained one rig: the Haynesville Shale in East Texas and northwestern Louisiana at 59; the Marcellus Wet play, mostly in Pennsylvania, at 24 rigs; and the Utica Shale, mostly in Ohio, at 20. The number of drilling permits totaled 970 approved, up 421 compared with the previous week, Platts Analytics figures showed. The Permian led all named basins with an increase of nine permits week on week for a total 213. The SCOOP-STACK was up by seven for a total 29 permits. The Marcellus Wet was down by 16 permits on the week for a total of four; the Williston was down by 12 to five; and the Marcellus Dry was down by nine to 32. In the "Other Basins" category, which represents plays outside the eight named basins, 445 more permits were approved than the previous week, for a total of 611. A sizable chunk of drilling activity outside the major basins is fueled by privately held upstream operators, which account for about 40% of US onshore activity, sources say. Active rig levels for public E&P companies, which drive 60% of drilling activity, are widely expected to fall in the second half of this year, although "privates should not be ignored," investment bank Tudor Pickering said in an investor note Thursday.
U.S. Oil Rig Count Dips To 14-Month Low -The the number of active oil and gas rigs fell again in the United States this week according to Baker Hughes, after a string of losses in the weeks prior, keeping the overall rig count well below year-ago levels for a sixth week in a row. The total number of active oil and gas drilling rigs in the United States fell by 1 according to the report, with the number of active oil rigs falling 3 to reach 802 and the number of gas rigs increasing by 2 to reach 185. The combined oil and gas rig count is 987, with oil seeing a 42-rig decrease year on year and gas rigs down 15 since this time last year. The combined oil and gas rig count is down 59 year on year. Year-to-date, the oil rig count has fallen from 877 active rigs on January 4 to 802, while gas rigs have fallen from 198 to 185 during that same time. Oil rigs are now at their lowest since March 2018, according to Baker Hughes. At 12:43am EST, moments before data release, WTI was trading down slightly by $0.08 (-0.13%) at $62.79, but up $1 per barrel on the week as the now-flighty market receives mixed messages after oil tanker attacks near the Strait of Hormuz, pipeline attacks in Saudi Arabia, escalating China/US trade tensions, and signs that global demand growth for oil might just be disappointing. The Brent benchmark was trading down as well, by $0.58 (-0.80%) at $72.04, but up about $1.50 week on week. US oil production, too, fell for two weeks in a row, with week ending May 10 coming in at 12.1 million bpd—200,000 bpd off the April 26 high of 12.3 million bpd. Canada’s rig count held steady at 63, with neither oil or gas losing or gaining in number. Canada’s oil rigs are now down 16 year on year, with gas rigs down 4 year on year. WTI was trading down 0.13% on the day at 1:11pm EST, with Brent down 0.83%.
Illinois passes bill criminalizing infrastructure-related protests - On May 2, the 101st Illinois General Assembly passed House Bill 1633, entitled “New Penalties for Protests Near Critical Infrastructure.” A draft version of the bill was produced by the American Legislative Exchange Council (ALEC) in the aftermath of the 2016 Dakota Access Pipeline protests. It was introduced to the Illinois legislature by Republican Representative Joe Sosnowski, a registered member of ALEC. The coordinated effort in passing this type of legislation all over the US means Illinois H.B. 1633 bill is nearly identical to similar bills being pushed through numerous state legislatures, including Oklahoma, North and South Dakota, West Virginia, Tennessee and more. In the last two years, 15 such bills have been enacted nationally while 26 are pending further review and votes. These are driven in large part by oil and energy corporations through the pro-business think-tank ALEC. The essential element of the current infrastructure bills is to provide the states with the judicial authority to suppress strikes, demonstrations and protests on the pretext of protecting property and the right to free speech. The text of the Illinois bill expands and modifies the criminal penalties for damage to any infrastructure, private property and workplaces, as one critic notes, “elevat[ing] a patchwork of locations and equipment to the same level of protection currently and exclusively afforded to nuclear power plants.” (Indivisible Chicago) The text of the bill also expands the offense of criminal trespass, creating new categories of misdemeanor and felonies that would hold accountable any business, corporation or organization deemed involved with the individual or group: “The industry protection list includes everything from telephone poles, cell towers, TV stations, railroad tracks, and ports to steel plants, coal mines and pipelines.” The legislation also provides a legal excuse for pursuing harsh penalties for superficial offenses as well as criminalizing the exercise of one’s right to protest.
Frac sand lawsuit lingers over refusal to give up permit -- Six months after a mining company said it had scrapped plans for a contested frac sand operation in western Wisconsin, a lawsuit is still lingering as the company refuses to relinquish a key permit. In 2016, three families sued to stop Terracor Resources from opening a 1,018-acre mine, processing and loading facility on nearby land in Jackson County. Their case was based on the assumption that a mine would inevitably infringe on the peaceful enjoyment of their land, a legal principal largely untested in Wisconsin. Terracor was later bought by OmniTRAX, a Colorado shipping company. In November, after a circuit court judge refused to throw out the complaint, an attorney for OmniTRAX said the project was dead, and the plaintiffs’ attorney said they would be dropping the lawsuit. But the parties were unable to agree on terms for a temporary injunction. Earlier this spring, OmniTRAX filed a new motion to dismiss, arguing that it is not moving forward — for business and financial reasons as well as logistics — and therefore the complaint is moot. Attorney Tim Jacobson said his clients will not agree to drop the case so long as OmniTRAX holds a permit from the Wisconsin Department of Natural Resources allowing it to fill about 4 acres of wetlands for the rail loading facility. Issued last year, the permit gives OmniTRAX until April 2021 to fill the wetlands, although the DNR can also grant an extension “for good cause.” “This fact seems to contradict OmniTRAX’s expressed intentions to not proceed with frac sand mining,” Jacobson said. “We are concerned that a voluntary dismissal by us would pave the way for OmniTRAX to advertise the site as being free of litigation and ready for a new mining company to sweep in and try to re-establish mining rights.”
South Dakota sues Texas O&G company for $15.5M - The state of South Dakota is suing a privately-held Texas-based exploration and production company for $15.5 million for abandoning 40 natural gas wells in Harding County, Kallanish Energy reports. The South Dakota Department of Environment and Natural Resources (Denr) is requesting the court require Spyglass Cedar Creek and its general partners, Kevin Sellers and March Kimmel, to bring the wells in northwestern South Dakota into regulatory compliance. Denr also wants the defendants to pay the state $15.5 million in penalties for abandoning the wells, according to the complaint filed in Hughes County, the Sioux Falls Argus Leader newspaper reported. It would cost the state nearly $900,000 to plug the 40 wells, which Spyglass drilled between 2006 and 2010, The Associated Press reported. According to the Denr complaint, Spyglass posted two bonds as part of its permit application, one for $20,000 and another for $10,000. But the South Dakota Attorney General’s Office learned last July Sellers had cashed out the $20,000 bond, leaving the state with only the remaining funds to plug the wells. Spyglass then entered into an agreement to post a $200,000 bond by January when the state Board of Minerals and Environment began taking steps to revoke Spyglass’ permits last year. But that money never materialized. The Board removed its permits and in March, levied $15.5 million in penalties on the company. The problems with the wells began in February 2012. Nine of the wells weren’t producing any gas and for the first time in what would become a seven-year-long issue, DENR directed Spyglass to bring its wells into compliance by either returning the wells to production, plugging the wells or submitting a request for temporary abandonment. Spyglass didn’t respond to the state.. By August 2012, half of the 40 wells weren’t producing anything and needed to be brought into compliance. All 40 of the wells were out of compliance by 2014 and inspections began finding that some of the wells were leaking gas.
North Dakota's first suitor for plastics plant files for bankruptcy -- About the same time that the North Dakota legislature was approving an incentive aimed at attracting a plastics plant, a previous suitor filed for Chapter 7 bankruptcy in a Colorado court. Badlands NGLS CEO William Jeffrey Gilliam had proposed investing $4 billion to build a polyethylene manufacturing facility in North Dakota in 2015. About a year later, he also announced plans for an alpha olefins plant in the Gulf Coast. Alpha olefins are a versatile feedstock for manufacturing polymers, surfactants, synthetic lubricants, petroleum additives and more. Williams had proposed taking advantage of physically stranded NGLs in the Bakken. An investor presentation from the time noted that NGL takeaway needed to double by 2020, or it would exceed heat content limits on the Northern Border pipeline. That was then the only pipeline taking significant amounts of NGLs to market. Ron Ness, executive director of the North Dakota Petroleum Council, said that timing was one thing that hurt the Badlands NGLs project. “The (Badlands) project was maybe a bit ahead of its time, but right in concept,” he said. There was the big downturn in price in 2015, which dampened activity for a couple of years. With no sign of excess ethanes being processed, the company turned its attention elsewhere. ONEOK has since proposed a new pipeline capable of taking up to 240,000 barrels per day of unfractionated NGLs to market, from Montana to existing facilities in Kansas. That has been lauded as a key component to reduce natural gas flaring in the state, but it doesn’t add value to the product, like processing it in North Dakota would. That is the problem that North Dakota Department of Commerce Director Shane Kessel is hoping can be solved this time around. “Badlands was two steps away (from a plastics plant),” Kessel said. “So I think that is the difference. We don’t have the facilities yet, but the company we are working with today is proposing to build that intermediate step.”
North Dakota to sue Washington state over oil train standard - North Dakota to sue Washington state over oil train standard (AP) — North Dakota is preparing to sue Washington state over a new Washington law requiring oil shipped by rail through that state to have more of its volatile gases removed, which supporters say would reduce the risk of explosive and potentially deadly derailments. North Dakota officials say the law will make Pacific Northwest refineries off-limits to the energy industry of North Dakota, which is the nation’s No. 2 crude producer. They are also reaching out to other oil-producing states to garner support for the lawsuit, which they expect to file within weeks in federal court. Washington Gov. Jay Inslee signed the bill into law Thursday. It requires a lower vapor pressure limit for crude shipped by rail than the industry standard and North Dakota requires. Inslee has made climate change a focus of a 2020 Democratic presidential campaign. Democrat Andy Billig, the Washington Senate Majority Leader who sponsored the bill, said the goal is to reduce the risk from oil being shipped by train from North Dakota’s Bakken oil patch to Pacific Northwest refineries. The volatility of oil trains drew widespread public attention following several explosive derailments, including one in 2013 in Lac-Megantic, Quebec, that killed 47 people. “We know these trains pose a serious risk as we watch them pass through downtown Spokane in sight of Lewis and Clark High School, hospitals, medical buildings, and senior living facilities,” Billig said. “This bill about safety.” North Dakota officials view the new law as a potential blow to their state’s oil economy. About 150,000 barrels of North Dakota crude, or about one-tenth of the state’s daily production, is shipped to Washington refineries. North Dakota produces more oil than any other state but Texas.
Aliso Canyon Gas Leak Caused by ‘Microbial Corrosion,’ Report Finds - The Aliso Canyon methane gas leak -- the biggest in U.S. history -- was caused by microbial corrosion of a well casing, and Southern California Gas Co. did not conduct detailed follow-up inspections or analyses after previous leaks, according to a report released Friday. The report -- commissioned by the California Public Utilities Commission and the state Department of Conservation's Division of Oil, Gas, and Geothermal Resources -- was conducted by Blade Energy Partners, which was tapped in 2016 to perform an independent analysis of the leak's root cause to inform parallel investigations underway by the CPUC and DOGGR. The report identified more than 60 casing leaks at Aliso Canyon prior to the 2015-2016 leak, going back to the 1970s, but said no failure investigations were conducted by SoCalGas, which "lacked any form of risk assessment focused on well integrity management and lacked systematic practices of external corrosion protection and a real-time, continuous pressure monitoring system for well surveillance." Updated well safety practices and regulations adopted by DOGGR address most of the root causes of the leak identified during Blade's investigation, and the leak's direct cause was a rupture of the outer 7-inch well casing due to microbial corrosion from the outside resulting from contact with groundwater, according to the report.
Trump Finalizes Plan to Open 725,500 Acres of California's Central Coast to Drilling, Fracking - — The Trump administration today finalized a plan to open 725,500 acres of public lands and mineral estate across California’s Central Coast and the Bay Area to new oil and gas drilling. The U.S. Bureau of Land Management plan is an increase of nearly 327,000 acres from the draft proposal prepared under the Obama administration.The public lands earmarked for leasing in today’s resource management plan are in the counties of Alameda, Contra Costa, Fresno, Merced, Monterey, San Benito, San Joaquin, San Mateo, Santa Clara, Santa Cruz and Stanislaus.“Trump’s new plan aims to stab oil derricks and fracking rigs into some of California’s most beautiful landscapes,” said Clare Lakewood, a senior attorney at the Center for Biological Diversity. “From Monterey to the Bay Area, the president wants to let oil companies drill and spill their way across our beloved public lands and wildlife habitat. As we fight climate chaos, there’s no justification for any new drilling and fracking, let alone this outrageous assault on our pristine wild places.”Today’s move comes just weeks after the Trump administration released its draft plan to reopen more than a million acres of public land and federal mineral estate in the Central California region (including Fresno, Kern, Kings, Madera, San Luis Obispo, Santa Barbara, Tulare and Ventura counties) to fossil fuel extraction. Together the plans target a total of 1,736,970 acres across 19 California counties. The plans would end a five-year-old moratorium on leasing federal public land and mineral estate in the state to oil companies. The BLM has not held a single lease sale in California since 2013, when a judge ruled that the agency violated the law when it issued oil leases in Monterey and Fresno Counties without considering the risks of fracking. The ruling responded to a suit brought by the Center and the Sierra Club challenging a BLM decision to auction off about 2,500 acres of land in those counties to oil companies.
U.S. shale output to hit new record of 8.49 million bpd in June: EIA – U.S. shale output to hit new record of 8.49 million bpd in June: EIA (Reuters) - U.S. oil output from seven major shale formations is expected to rise by about 83,000 barrels per day (bpd) in June to a fresh peak of about 8.49 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday. One of the largest changes is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 56,000 bpd to a new record of about 4.17 million bpd in June. That would be the biggest increase since February. In North Dakota’s Bakken region, production is expected to jump by 16,000 bpd to a record of 1.42 million bpd while in the Eagle Ford, output is expected to slide by about 942 bpd to 1.43 million bpd. A shale revolution and production increases particularly from the Permian basin and the Bakken have helped make the United States the biggest oil producer in the world, ahead of Saudi Arabia and Russia. Major oil companies like Exxon Mobil Corp and Chevron Corp are boosting their presence in shale, particularly in the Permian, the largest U.S. shale oil field.
Fracking made the US a major oil producer, but not energy independent – public radio audio- The oil shortages of the 1970s triggered laws that banned the export of American crude oil. Those lingering fears of scarcity kept those laws around for decades. Then came the shale revolution in mid-200os, otherwise known as the fracking boom, which helped the United States become one of the world’s top oil and gas producers. In her book, “Saudi America: The Truth About Fracking and How It’s Changing the World,” author and journalist Bethany McLean explores fracking’s nuanced success, but also cautions that this energy revolution is not the country’s golden ticket to energy independence. She spoke to host Sabri Ben-Achour on Marketplace Morning Report. Below is an edited transcript of their conversation.
N. American Shale Oil Second Cheapest Oil Source - North American shale oil has become the second cheapest source of new oil volumes, according to research by Rystad Energy. In its latest cost of supply curve update, the energy research firm found that tight oil – such as onshore shale oil in the U.S. – experienced a turnaround in recent years. North American shale has gone from being ranked the second most expensive resource in 2015 to the second cheapest – following closely behind the Middle East onshore market at No.1. The average Brent breakeven price for shale oil is $46 per barrel, just four dollars behind the massive onshore fields in Saudi Arabia and other Middle Eastern countries. And Rystad estimates that total recoverable resources from North American shale oil have more than tripled since 2014. “The North American tight oil industry has changed considerably since 2014, as it has proven to be a competitive supply source in a low-price environment,” Erlingsen said. “While costs for tight oil have been reduced, the resource potential has grown considerably over the last four years.” Another benefit to shale oil is that it typically requires two to four years to recover costs, while offshore normally needs seven to 12 years.
2018 was likely the most profitable year for U.S. oil producers since 2013 - Net income for 43 U.S. oil producers totaled $28 billion in 2018, a five-year high. Based on net income, 2018 was the most profitable year for these U.S. oil producers since 2013, despite crude oil prices that were lower in 2018 than in 2013 on an annual average basis. Lower production costs per barrel of oil equivalent (BOE) and increased production levels contributed to a higher return on equity for these companies for the fourth quarter of 2018 than in any quarter from 2013 through 2018. The companies included in the analysis are listed on U.S. stock exchanges, and as public companies, they must submit financial reports to the U.S. Securities and Exchange Commission. EIA calculates that these companies accounted for about one-third of total U.S. crude oil and natural gas liquids production in the fourth quarter of 2018. However, these companies were not selected as a statistically representative sample but instead because their results are publically available. Their results do not necessarily represent the U.S. oil production industry as a whole. Most of these companies operate in Lower 48 U.S. onshore basins, with some in the Federal Offshore Gulf of Mexico and Alaska, and some in several other regions across the globe. Because of various corporate mergers and acquisitions in 2018, the number of U.S. producers that EIA examined in this analysis fell from 46 companies in 2017 to 43 companies in 2018. The aggregated income statements for these 43 companies reveal a trend of relatively low increases in expenses directly related to upstream production in 2018. Although these upstream production expenses per barrel typically correlate with crude oil prices, the magnitude of these increases in 2018 was small compared with the increase in prices.
Debunking The Oil Industry Cash Flow Myth -One of the refrains I often hear about the oil industry — particularly on those focused-on shale and tight oil — is that it collectively doesn’t make any money. There have been many stories over the past few years about the ongoing negative free cash flow (FCF) problem among the shale producers.It is true that in recent years oil companies have collectively outspent their revenues. But two important issues are often overlooked in the stories about negative cash flow.First is the question of the reason cash flow is negative. To better understand this, let’s talk about what cash flow actually represents. FCF measures cash generated by a company in excess of its spending, including capital expenditures. There are some differences between how different analysts measure FCF, but I use the levered FCF definition from the S&P Global Market Intelligence database. This number is calculated by starting from net income, adding back depreciation and amortization (because those non-cash costs relate to historical expenditures), adjusting for impairments to oil and gas properties (those non-cash impairments are applied against net income but not cash flow) and then subtracting interest paid, changes in working capital and capex. This is a more accurate and comprehensive definition of cash flow than the one used by many, which is simply cash generated from operations minus capital expenditures. It is true that capital expenditures are the main reason that FCF went deeply negative for so many companies in recent years. When oil prices were $100 a barrel, oil companies invested every penny they could get their hands on into producing more oil. There were no guarantees of how long the high prices would last, but it’s understandable why they were plowing all their cash back into their business. When oil prices plunged in 2014, many companies were caught off guard. Some were extremely leveraged and went bankrupt. All of them had to slash spending. And that leads to the second point that is frequently overlooked. Oil companies aren’t all operated in the same way. Some operate recklessly and with excessive leverage, while others are much more conservative. That is reflected in the individual results of these companies. Some companies go for years without generating positive FCF. Diamondback Energy, for example is one of the largest pure shale/tight oil producers. They went public in 2012 and have never generated positive FCF. But that hasn’t posed a problem, as their debt/EBITDA ratio is at a manageable 2.5. Then there’s ConocoPhillips, which is active in the Eagle Ford, Bakken and Permian Basin. In recent years, COP has been the king of cash flow among the pure oil and gas producers.
Does Chevron know exactly what shale oil and gas are worth? -- Welcome to the bidding war that didn't happen. The decision last week by international oil giant Chevron Corp. to leave its takeover bid for shale oil and gas-heavy Anadarko Petroleum Corp. unaltered in the wake of a higher offer from rival bidder Occidental Petroleum Corp. surprised some who had expected a back and forth escalation between the two competitors. Chevron's CEO told Bloomberg, "Winning in any environment doesn’t mean winning at any cost." Chevron's hesitancy to pay up for Anadarko's assets suggests a measured assessment about what Anadarko might deliver, one tempered by emerging political developments and perhaps a less sanguine view about the durability of the shale boom. Anadarko, after all, has considerable operations in Colorado which recently enacted a bill increasing the ability of municipalities to curtail oil and gas development, authorizing more stringent air quality monitoring and rules, and turning the commission which was tasked with "fostering" oil and gas development into one which actually regulates it. That spells less oil and gas development in a state that has been critical to Anadarko and to the shale boom. The promoters of shale oil and gas investment are pretending as if the kind of backlash which happened in Colorado could not occur elsewhere. Don't count on that being the case. Beyond this, energy writer Nick Cunningham summarizes the most recent update of prospects for shale hydrocarbons released by a skeptical Post Carbon Institute. Issues identified by the institute way back in 2012 have continued to unfold as foretold. All the technological improvements since then are only hastening the day when production will turn down according to the report's author. Simply put, production from oil and gas shale deposits is being "frontloaded." That implies that when the decline comes, it's likely to be surprisingly steep. (The precipitous decline of Mexico's giant Cantarell oil field after a technique known as nitrogen injection supercharged production for several years provides a cautionary tale.) During the height of a boom, promoters who stand to profit forecast a long prosperous future ahead, a never-ending cornucopia that will fill the pockets of those smart enough to invest now. But as anyone who has lived long enough knows, the time to sell is when just this kind of narrative is being offered.
Canadian Oil Prices Weaken - -- Canadian crude prices fell Tuesday as storage tanks topped out amid refinery maintenance in the U.S. Midwest. Heavy Western Canadian Select, an oil sands benchmark, fell to the biggest discount against West Texas Intermediate futures since Feb. 19, data compiled by Bloomberg show. Edmonton Mixed Sweet, a light grade, declined to the weakest level this year while synthetic crude, produced from oil sands bitumen in an upgrader, fell to the lowest in two weeks. Prices have weakened as U.S. Midwest refineries, including Exxon Mobil Inc.’s Joliet refinery and BP Plc.’s BP Plc.’s Whiting refinery, were said to undergo maintenance in May. As of last month, Western Canada’s oil inventories had already risen to a record even as crude-by-rail shipments rebounded from a February low, according to Genscape Inc. Stockpiles are swelling despite production cuts mandated by the Alberta government starting in January. While the curtailments initially caused crude prices to surge, they’ve weakened since last month as the supply glut persists. As Canadian oil’s discount widens, however, the lower prices could help drain bloated inventories by making crude-by-rail shipments to the U.S. more economic. “This price move is more back to normalization than a big driver of weakness in the market,” “We are back into rail economics and now we can clear barrels.”
Mexico's new oil refinery likely to far exceed budget - Moody's (Reuters) - The new refinery that Mexico’s government has tasked state oil company Pemex to build will likely cost at least $2 billion to $4 billion more than the government estimates due to its “limited know-how,” credit rating agency Moody’s said on Monday. Last week, Mexican President Andres Manuel Lopez Obrador said the refinery, slated to be built at the Gulf coast port of Dos Bocas for $8 billion, will break ground early next month and be completed by May 2022. The ratings agency described the decision to build the refinery without private sector expertise as one that would be “costly.” “Given the government’s (and Pemex’s) lack of experience in building refineries, the project is likely to end up costing more and taking longer than the government anticipates, placing further strains on fiscal resources,” Moody’s said in a statement. The project, one of Lopez Obrador’s top priorities, has been repeatedly criticized by investors and ratings agencies due to concerns it will divert funds away from Pemex’s more profitable exploration and production business.
Without Venezuela’s oil, Haiti struggles to keep lights on - Through the Venezuelan aid program known as Petrocaribe, Haiti once received roughly 60,000 barrels of oil a day under favorable terms that beat anything on the open market. More than half the costs of the oil, which came at a heavily discounted price, were repayable over 25 years at a 1% interest rate, allowing the government to supposedly use the windfall for economic development. In exchange, Haiti reliably backed Venezuela against the United States in regional forums such as the Organization of American States. But as President Nicolás Maduro’s government has struggled with plunging petroleum production and a cratering economy, Venezuela has stopped sending billions in subsidized oil to countries throughout Central America and the Caribbean, including Haiti, where the end of cheap oil has meant a sharp reduction in power. Meanwhile, Haiti’s Bureau of Monetization of Development Aid Programs, or BMPAD, quickly ran into its own difficulties. After starting to buy oil on the global market, the bureau said this year that it had run out of operating funds and stopped regularly delivering fuel needed by power station operators to keep the lights on. Now, much of Haiti’s population enjoys electricity for just three hours a day. Nighttime activity has ground to a halt as armed robbers hold up street merchants or break into people’s homes in darkness. Gas stations have gone empty for days, making it nearly impossible for many Haitians to get to work, run errands or take their kids to school. Hospitals are forced to rely on backup generators. “We can’t find gas for our vehicles. Our clients can’t come to us. Sales are down in every sector,”
Weatherford Expects to File for Chapter 11 - Weatherford International plc has announced that it has executed a restructuring support agreement with a group of its senior noteholders that collectively holds, or controls, approximately 62 percent of the company's senior unsecured notes. The oilfield service business expects to implement the restructuring agreement through a "pre-packaged" Chapter 11 process and expects to file U.S. chapter 11 and Irish examinership proceedings. As part of this process, Weatherford said it intends to continue engaging in discussions with, and begin soliciting votes from, its creditors in connection with a proposed plan of reorganization prior to filing. The proposed comprehensive financial restructuring would “significantly” reduce the company's long-term debt and related interest costs, provide access to additional financing and establish a more sustainable capital structure, according to Weatherford. The company said the restructuring agreement contemplates the company will continue operating its businesses and facilities without disruption to its customers, vendors, partners or employees and that all trade claims against the company will be paid in full in the ordinary course of business. Weatherford expects the new capital structure will allow it to continue to capitalize on its momentum and build a “truly integrated service company with sustainable profitability and long-term growth potential,” according to McCollum. In its fourth quarter results statement released back in February, Weatherford reported a net loss of $2.1 billion. During the same period in 2017, the company reported a net loss of $1.9 billion.
Equinor investigates oil spill at Statfjord North Sea field (Reuters) - Equinor is investigating an oil spill at its Statfjord field in the North Sea, although the Norwegian company said on Wednesday the incident had not disrupted production. Loading was stopped and loading systems at the field were shut down after oil was spotted nearby and systems were mobilised to deal with such a situation, Equinor said. “In connection with loading oil from buoy to shuttle tanker on the North Sea Statfjord field, oil was observed on the sea surface early this morning,” Equinor said. The buoy is located two kilometres from the nearest Statfjord platform so oil production is continuing as normal, Equinor spokesman Morten Eek said. “We are always treating situations when we observe oil on the sea seriously ... It’s still too early to say the extent of this leakage,” Eek said. Statfjord, which opened in 1979, is among the oldest fields still producing in the North Sea, and Equinor has said the first of its three platforms is due to close in 2022. “In compliance with regular procedures Equinor’s emergency response organisation was quickly mobilised, and the authorities were notified,” Equinor said.
Shell Set to Have Biggest UK Decom Costs --Royal Dutch Shell plc is set to have the largest abandonment and decommissioning expenditure (ABEX) liability of UK operators in producing UK oil and gas developments, according to GlobalData. The company is estimated to have over $3 billion in ABEX liability to abandon producing fields in the UK and is set to spend as much as $1.5 billion by 2025, GlobalData revealed. This is driven mainly by the Brent oil field but also relates to expenditure in aging developments such as Pierce and Curlew, GlobalData highlighted.“The total plug and abandonment expenditure alone for the Brent field could reach $900 million and spans from 2008 to 2020 with over 150 wells in total,” Daniel Rogers, upstream oil and gas analyst at GlobalData, said in a company statement.Following Shell, the remaining top five companies with the greatest ABEX exposure from producing fields in the UK, according to GlobalData’s latest research, are:
- Apache Corp
- Total SA
- ExxonMobil Corp
- BP plc
According to a report from industry body Oil & Gas UK in November last year, the UK is expected to spend $19.5 billion (GBP 15.3 billion) on decommissioning over the next decade. The spend over the next ten years is almost 20 percent lower than forecasts made in 2017 would have suggested, according to the report. Global decommissioning costs are set to hit a record $36 billion over the next three years, according to Rystad Energy.
U.S. Senate Threatens Sanctions Over Russian Pipeline – In the latest uptick of trans-Atlantic tensions, European ships involved in the construction of a controversial gas pipeline from Russia to Germany could be subject to U.S. sanctions under a new bipartisan bill that will be introduced in the U.S. Senate as early as Monday. The bill, sponsored by Sens. Ted Cruz, a Republican, and Jeanne Shaheen, a Democrat, would sanction companies involved in laying deep-sea pipelines for Russian energy projects, taking direct aim at the Nord Stream 2 pipeline, which has emerged as a major source of tension between the United States and Germany. Foreign Policy obtained a draft copy of the bill.Critics say the Nord Stream 2 project, which would double the amount of Russian gas piped to Germany via the Baltic Sea, makes little commercial sense and is a geopolitical power play by Moscow to exert energy leverage over Western Europe. Countries such as Poland and the Baltic states have joined the United States in opposing the pipeline. They also warn it could destabilize Ukraine as it wages war against Russian-backed separatists in the east of the country. Despite the conflict, the Ukrainian government relies heavily for revenue on transit fees for Russian gas going into Europe.The Trump administration has rebuked Germany for moving forward with the project, one of a raft of recent issues straining trans-Atlantic relations alongside Iran, climate change, and trade. Last July, U.S. President Donald Trump accused Berlin of being held “captive” to Russia due to its dependence on Moscow for energy, a charge German officials sharply dismissed.While Trump has clashed with Democrats and Republicans alike over his handling of relations with Russia, there is broad bipartisan opposition in Washington to the Nord Stream 2 project.Proponents of Nord Stream 2 say the pipeline offers a way to increase Europe’s supply of cheap Russian gas through a more reliable route than the traditional pipe across Ukraine, which has been subject to multiple disruptions and has been hostage to geopolitical tensions between Kiev and Moscow over the past decade. The bill takes aim at the vessels used to lay deep-sea pipelines, which involves technological know-how that Western energy companies have but that Russia lacks. “That’s one of the few areas where, essentially [Russia’s national gas company] Gazprom lacks that technical expertise and technology in order to build the pipeline projects,” said Agnia Grigas, an expert on Eurasian energy issues with the Atlantic Council, a Washington-based think tank. A senior Republican aide familiar with the draft legislation said parts of it were modeled on previous U.S. efforts to target Iranian oil exports.
200+ Groups Urge Senate to Oppose European Fossil Fuel Promotion Bill – More than 200 groups sent a letter to U.S. senators today, urging them to oppose the European Energy Security and Diversification Act of 2019 (S. 704), a bill that would provide billions of dollars of support for natural gas infrastructure projects in Europe, further incentivizing fracking and fossil fuel development in the United States. The bill, passed by the House in March, has drawn criticism for locking both the United States and Europe into decades of continued fossil fuel dependence under the guise of national security.The letter, organized by the national advocacy group Food & Water Watch, was signed by groups including the Center for Biological Diversity, Climate Hawks Vote, The Climate Mobilization, Friends of the Earth US, Greenpeace USA, Oil Change U.S., Progressive Democrats of America, Public Citizen, Rainforest Action Network, Sunrise Movement and 350.org.The letter states in part: “The only way to promote real energy security is to work together with Europe to rapidly end our shared reliance on fossil fuels. Our nation should be investing in renewable energy technology and energy efficiency, not setting aside tens of billions of dollars to support fracked-gas infrastructure projects that will keep Europe dependent on fossils.”“At a moment when we should be leading the global mission to rapidly quit fossil fuels, the notion of seeking new and deeper fossil fuel codependence between America and Europe is patently absurd,” said Wenonah Hauter, executive director at Food & Water Watch. “Climate science is clear: We must begin an aggressive global transition to clean, renewable energy now. For the Senate to promote the opposite would be a clear abdication of moral duty to current and future generations in this country and every country.” “Whatever the geopolitics, sending more deadly fossil fuels to Europe or any other part of the world is not the answer. Natural gas is fool’s gold and will inevitably lead to further destabilization of any region that relies upon it,” said Bill Snape, Senior Counsel at the Center for Biological Diversity. “The future is with clean renewable energy and infrastructure. Any expenditure of taxpayer funds for fossil fuels is a colossal waste of money and a major lost opportunity.”
EU Promises To Double U.S. LNG Imports Within 5 Years - The European Union has promised to double its intake of U.S. liquefied natural gas over the next five years with the annual total reaching the equivalent of 8 billion cubic meters in 2023, double the current annual rate of imports, Forbes’ Dave Keating reported last week, citing an announcement by the European Commission.The news is good for both sides. For U.S. LNG producers, a growing export market is always good news. For the European Union, this pledge to buy more U.S. LNG will defuse a tariff bomb that President Trump threatened to blow up last year: he said he would slap import tariffs on German cars if the EU did not play nice. With few options available, this is exactly what the EU has done.But the increase in U.S. LNG imports is good news for the European Union in more than one way. It will also reduce its reliance on Russian gas—something that has been a thorn in the side of several central European EU members, most notably Poland and the Baltic States. These, by the way, are already the chief buyers of U.S. LNG and builders of import terminals. However, they are small potatoes compared with Germany, the EU’s largest energy consumer and gas importer. At a recent meeting in Brussels when the import doubling pledge was made, U.S. Energy Secretary Rick Perry praised the EU for its decision saying U.S. LNG imports were more secure than Russia deliveries. European Energy Commissioner Miguel Arias Canete, however, emphasized the price component in the LNG import dynamics: “Given our heavy dependence on imports, U.S. liquefied natural gas, if priced competitively, could play an increasing and strategic role in EU gas supply,” he said.
Can The U.S. Steal Gas Market Share From Russia? - What was once Europe’s largest natural gas field, the Netherlands’ Groningen field, has already been diminished considerably and will be shut down completely by 2030 as part of the Dutch government's efforts to quell earthquakes caused by gas exploration in the area. Even after a relatively mild winter, Bloomberg reports that “European LNG imports more than doubled in the first quarter [...] demonstrating a ‘genuine underlying demand’ according to Alastair Maxwell, chief financial officer of LNG tanker owner GasLog Ltd.” Maxwell went on to explain to Bloomberg reporters that, “while buyers took advantage of the lower prices to bring in more cargoes, declines in the region’s production were also behind the increases.” So far, as European natural gas production has been in severe decline, low natural gas prices--thanks in large part to a global supply glut--has been the continent’s saving grace. As we head into the summer, however, demand for natural gas in Asia is set to keep growing, and gas prices will likely grow accordingly. In the meantime, the European Union’s growing dependence on Russia has created a politically fraught dynamic between Europe, Moscow, and Washington. The United States has urged the European Union to ease their dependence on Russian oil. “The U.S. says that dependency is dangerous and is urging the EU to build more terminals to ship in gas from its shale boom to bolster the bloc’s efforts at diversification,” reports Bloomberg. In fact, just this week United States energy secretary Rick Perry announced that on Monday in Brussels he signed two export orders for liquefied natural gas as part of an agreement that will raise the United States’ export capacity to Europe to 112 billion cubic meters per year by 2020, more than double the current annual amount. In a rather hyperbolic address to reporters in Brussels Perry compared the introduction of more U.S. natural gas into European markets to U.S. troops during World War II, saying that “the United States is again delivering a form of freedom to the European continent [...] and rather than in the form of young American soldiers, it’s in the form of liquefied natural gas.” This week’s liquefied natural gas export orders come on the tails of a joint statement pledging to build up strategic energy cooperation between the EU and the U.S., released last year by European Commission President Jean-Claude Juncker and United States President Donald Trump. The initiative to import more LNG from the U.S. realized this week was already established in the statement released last July. “The European Union wants to import more liquefied natural gas (LNG) from the United States to diversify its energy supply,” stated the press release.
The European Gas Game Is About To Change -The Turkmen-Russian gas axis has a decade-long history as Gazprom generally did not allow for direct transit of Central Asian gas through its massive transportation system yet agreed to buy out these volumes for further exports, basically making sure that the trader’s margin remains at all cases with them. Cognizant of the peculiarity of exporting gas to Ukraine, throughout years Gazprom used Turkmen gas to supply this Eastern European nation. In this vein, Russia and Turkmenistan concluded a 20-year agreement in 2009 for the supply of up to 30 BCm gas per year. The contract also included a take-or-pay threshold of 10 BCm which would eventually turn out to be the stumbling block upon which the whole contract fell over. Not only was there a take-or-pay threshold but the price was fixed, too, at 240 USD/MCm which was tolerable for Gazprom in the halcyon days of the early 2010s yet became unbearable after gas prices plummeted to 170 USD/MCm in 2015. For the Central Asian transit it needed, Gazprom opted for Uzbek volumes (all the more so as the Russian firm has own production there) and unilaterally terminated the Turkmen contract after several unsuccessful attempts to renegotiate the terms of the deal. Turkmenistan did not put up a scene as it had set its sight on China which promised to be a market outlet for most if not all of Turkmenistan’s ample natural gas. Yet Turkmenistan suffered a double blow to its gas export plans – supplies to Iran were halted a year after Russia stopped its imports, due to the NIGC’s non-payment for substantial parts of the Turkmen volumes. This left Ashgabat with only one market outlet – China – which was satisfied with the roughly 40 BCm per year it received from Turkmenistan and did not have any immediate plans to increase it. Hence came about the most recent Russo-Turkmen deal, which contrary to previous practice is short-term, a temporary filler before the two sides iron out a new long-term contract. Under the new deal signed April 15, it would be Gazprom’s Swiss subsidiary that would buy 1.2 BCm of Turkmen gas in H1 2019, to be supplied through the usual Central Asian route to customers in Southern and Central Eastern Europe.
In limbo: the dirty Russian oil no one wants to pay for (Reuters) - The bills are due for millions of barrels of contaminated Russian oil that have been stuck for weeks in pipelines from Belarus to Germany - but no one wants to pay. Western oil companies and European refiners that bought the oil a month ago, before discovering it was unusable, have so far refrained from freezing payments as they are keen to maintain good long-term relations with the world’s second biggest oil exporter and avoid protracted legal battles in Russian courts. Instead, several Western buyers have asked Russian producers if they can postpone payments for the tainted crude while buyers and sellers agree how to resolve the mess - and how to share the costs, four traders involved in Russian oil trading said. For the buyers of an estimated 19 million barrels of contaminated crude stuck in the pipeline and loaded on tankers, it’s a $1.2 billion question. The buyers want Russian producers to give guarantees in the form of bank deposits that they will contribute to the clean-up, or delay payments due this week until the crisis is resolved, said a source at European refiner, who declined to be named. “There’s around 0.8-0.9 million tonnes of dirty oil sitting in the pipelines between Belarus and Germany that no refiner wants to take,” he said. “This oil needs to be evacuated somewhere to restart the pipeline. But it would be wrong for Russia to assume European refiners will bear all costs.”
The World Blows Over $5 Trillion a Year on Oil and Gas Subsidies- Report --The world subsidized its own demise to the tune of $5.2 trillion in 2017. That’s how much 191 nations collectively spent directly and indirectly subsidizing fossil fuels, according to the hippies at the International Monetary Fund. The staggering number shows why failure to account for climate change, air pollution, and other societal ills when it comes to fossil fuel extraction is often described as the biggest market failure ever, and also that maybe the market isn’t going to save us. Thinking about $5.2 trillion is hard. It’s equivalent to 6.5 percent of the entire world’s annual GDP. It’s more than France and Germany’s GDP combined. It’s $164,890.91 of money wasted per second in a year. But one thing is obvious: it is an absolutely stupid amount of money to be throwing away on something that is actively harmful to life on Earth.IMF’s report released late last week breaks down where the huge figure comes from. On the one hand, you have you have your direct price subsidies that help offset costs consumers pay for, say gas or heating oil. Those totals are still profound at more than $300 billion in 2017, but the real subsidies are hidden in the impacts burning fossil fuels have on society. Burning oil, gas, and coal cause widespread health problems tied with air pollution and disrupt the climate, and fossil fuels aren’t paying their fair share.In their calculations, IMF relies on a metric called the social cost of carbon to estimate these hidden subsidies. It uses a middle of the road estimate of $40 per ton of carbon, with a 3 percent rise annually. While there are lines of research showing a carbon tax of $40 per ton isn’t high enough, that’s how IMF arrives at its $5.2 trillion figure.If fossil fuels were correctly priced in 2015, IMF’s research shows carbon emissions would have been 28 percent lower and 46 percent fewer people would’ve died from air pollution, which kills 4.2 million annually. Tax revenues would also have gone up 3.8 percent and the total economic benefits would have been equal to 1.7 percent of global GDP.
New report maps 3 scenarios for the future of oil --Oil demand could peak by 2025 and fall more than 30% by 2050 if countries take aggressive steps to hold the long-term global temperature rise to under 2°C, Barclays analysts say in a new report. That's nowhere near the trajectory things are pointing to now (seen as "development" in chart), which leads to a peak in the 2030–2035 range, but then a "long plateau" to mid-century that keeps demand at roughly today's levels. A 3rd scenario modeled — "deadlock" in the chart above — shows much higher demand if the world is mired in trade wars, tech uptake is hindered, and there's little focus on climate. The report is a major new entry into attempts by forecasting bodies, consultancies and major energy companies to get their arms around how the global energy system will — and won't — transform in the decades ahead.The report's climate-friendly "dynamism" scenario would require circumstances to line up in a very particular way — and not just for oil — to keep things under 2°C. Of note: That break with current trends would involve an array of big steps such as...
- Larger industry and national investments in efficiency and technology.
- Even faster growth and deployment of renewables, which are 40% of the global energy mix mid-century.
- Greater electrification of energy demand, rising to 35% by 2050.
- Greater recycling, cutting single-use plastics and other steps to slow the growth rate of oil used in petrochemicals.
- Significant adoption of carbon capture and storage from 2040 onwards, more than twice as much as in their business-as-usual "development" scenario.
Getting back the main focus of the report — oil — here's a look at where Barclays sees things heading in "development." Overall, it sees demand just slightly higher at 105 million barrels per day (mbd) in 2050, which is roughly 5 mbd above current levels. But the uses of that oil change. Per the report:
- Oil use in passenger cars falls from roughly 22 mbd right now to slightly under 20 mbd as efficiency gains (the biggest factor) and EVs offset the huge rise of cars on the world's roads.
- Growth of the global trucking fleet means that its oil consumption rises from 24.5 mbd to nearly 30, despite gains in efficiency and electrification.
- Oil needed for jet fuel rises from 6.2 mbd to 9.2 mbd in 2050.
- Growth in petrochemicals nearly doubles that sector's demand to 18.6 mbd in 2050.
Speaking of petrochemicals, the report has some interesting data and projections about single-use plastics. They matter a lot! "A complete ban on single use plastics would reduce our estimate of oil demand in the development scenario by 6mb/d in 2050," it notes.
Eni Makes New Light Oil Find -- Eni announced Tuesday that it has made a new light oil discovery in Block 15/06 in Angola’s deep offshore. The new discovery, which was made through the Ndungu-1 NFW well, is estimated to contain up to 250 million barrels of light oil in place and has “further upside”, according to Eni. The company revealed that “intensive data collection” indicates a production capacity in excess of 10,000 barrels of oil per day. Ndungu is the fourth discovery of commercial nature since the Block 15/06 joint venture re-launched its exploration campaign in mid-2018, Eni highlighted. Back in March, the company announced a major oil discovery in the block’s Agogo exploration prospect. In December last year Eni announced a new oil discovery in the block’s Afoxe exploration prospect and in June 2018 the company announced a new oil discovery in the block’s Kalimba exploration prospect. The four discoveries altogether are already estimated to contain up to 1.4 billion barrels of light oil in place, according to Eni.
Kenya pipeline to spend millions over oil leak detection blunder -- A costly blunder during the construction of a Sh48 billion pipeline from Mombasa to Nairobi is set to bleed Kenya Pipeline Company more money after an oil spill occurred in Makueni barely a year into its operation. The 20-inch pipeline was designed without any leak detection systems, making it as bad as the leak-prone old one that was meant to be replaced in the new venture after frequent leakages caused massive losses of product eventually passed down to the taxpayer in pump prices. Kenya Pipeline Corporation acting managing director Hudson Andambi termed the oversight "unfortunate" as the corporation now plans another tender to finance the installation of leak detection apparatus in the line. Article Continues After Advertisement"Leak detection was not included in the design stage, which is very unfortunate given that it was our second time constructing a pipeline. That was an unnecessary and costly omission but we have budgeted for it in the next financial year. For now, I can't tell you how much it will cost because it will be an open tender," Mr Andambi said. Mr Andambi sought to downplay any adverse effects of the spill, whose real extent is yet to be determined, saying a team had been dispatched to dig trenches and control the damage which, according to him, was far away from the water spring that is the main source of water for the area. Although the extent of the Makueni diesel spill is yet to be determined, the Water Resources Management Authority has already cautioned residents of the affected area against drinking water from the Kiboko River after it was found to be contaminated with petroleum products. This may mean more costs to KPC, which has already contracted Swedish firm SGS to examine the extent of the spill.
Middle East Oil Grab Reaches Frenzied Pace - Oil refiners across Asia are bidding up crude prices from Abu Dhabi to Oman as they compete for supplies to make up for lost Iranian and Venezuelan exports. July-loading cargoes of grades such as Murban and Das were bid at premiums of 80 to 85 cents a barrel above the official selling price on Friday on an electronic trading platform operated by S&P Global Platts. That would be the highest spot differentials in at least three years for the grades, according to data compiled by Bloomberg. Upper Zakum crude was also bid at a 65-cent premium, while Umm Lulu changed hands at a 95-cent premium. The higher bids came even after Abu Dhabi National Oil Co. hiked the official price of its crude earlier this week. Buyers across the world’s top oil-importing region are scrambling for oil as U.S. sanctions on Iran and Venezuela tighten supplies of high-sulfur crude that their refineries are designed to process. Unplanned disruptions to Russian and Nigerian flows and concerns that fighting in Libya could affect oil exports also contributed to the fervor to secure cargoes. Oman crude futures climbed to a premium of $3.10 a barrel over swaps for Dubai oil, the benchmark grade for the Middle East. That’s its highest premium since September, when markets were spooked by the prospect of U.S. sanctions putting an end to Iranian exports. A wide discount between the Dubai benchmark
Saudi Aramco bets on oil supply to Europe, trading expansion (Reuters) - Saudi Aramco aims to boost its oil supply to Europe by 300,000 barrels per day (bpd) within the next two years as it expands its trading operations there with an office opening this summer in London, a senior company executive said. Aramco, the world’s biggest oil producer, is expanding its downstream, or refining and marketing, footprint globally by signing new deals and boosting the capacity of its plants to secure new markets for its crude. The company’s trading arm has been focusing on a new processing arrangement in which it would supply European markets with both crude oil and products. Aramco is looking to finalize deals in the next two years through swapping mainly Saudi crude with oil products to supply customers in Europe and the Mediterranean, Abdulaziz al-Judaimi, Aramco’s senior vice president for downstream, told Reuters. “We believe that Europe is a market that we are going to stay in for a long time,” Judaimi said in a telephone interview this week. “The whole idea is we supply crude, and we offtake refined products to supply markets like Italy, the Balkans, as well as Cyprus ... In Europe, having a virtual dedicated outlet and processing agreement is really the right winning strategy.” Aramco currently has more than 3 million barrels a month of oil supply and product swap arrangements in Europe, he said. The company has deals with Poland’s PKN Orlen, Greece’s Motor Oil Hellas and Egypt’s Midore. “We are looking to expand the 3 million barrels to almost 10 million barrels in a month, within the next two years. This means we have almost created a 300,000 bpd refining capacity in Europe,” Judaimi said. The company has invested in its storage capacity in Egypt and the Dutch port of Rotterdam. About 60% of the capacity of the SUMED storage pipeline in Egypt is for Saudi crude, used by Aramco to reach its customers in Europe, he said. The Rotterdam terminal now holds more than 6 million barrels of oil, he said. Aramco will also continue to invest in Greece, Judaimi said. The priority is to supply refiners with Saudi crude to lock in their capacity, but non-Saudi crude can also be supplied through spot trading. “This is a win-win strategy because it helps the refiner ... and for us it is to place crude oil in the European refining assets,” he said
Oil Is Trade War's Collateral Damage -- U.S. oil shipments are likely to be a casualty of the trade war with China, even though crude was spared from the latest list of American goods targeted with retaliatory tariffs. While oil has never been subject to levies during the dispute between the world’s two biggest economies, the flow of American cargoes to China has nevertheless been throttled by rising tensions over the past year. Refiners in the Asian nation -- previously the top Asian buyer of U.S. crude -- have largely shunned imports in a bid to avoid getting caught up in the trade war. Even without tariffs, the latest escalation in the dispute threatens to snuff out a recovery in flows seen over the past couple of months that were driven by hopes that tensions were easing. That will close the door to a critical source of crude for buyers in the world’s largest oil importer, at a time when refiners across the globe are scrambling for cargoes due to a supply crunch. Middle East exporters are already cashing in on the squeeze that was driven by U.S. sanctions on Iran and Venezuela, as well as unexpected disruptions from Russia to Nigeria. Iraq raised the official selling price of its flagship Basrah Light crude for Asian customers to the highest level since 2012, after fellow OPEC member Saudi Arabia set the price of its Arab Medium variety at the highest since December 2013. The deteriorating demand outlook is pushing down prices, although rising tension in the Middle East is preventing steeper declines. West Texas Intermediate futures fell 0.2% to $60.94 a barrel as of 8:45 a.m. in Singapore after dropping 1% on Monday. Brent crude, the global benchmark, was down 0.4 percent after closing 0.6 percent lower in the previous session. Last year, Chinese refiners gorged on U.S. oil pumped everywhere from inland shale fields to wells in the Gulf of Mexico, lifting imports to a record-high of more than 2 million metric tons in January 2018. The Asian nation removed crude from a list of goods that would incur a levy last August, following an earlier threat that duties would be imposed on imports of the commodity. Nevertheless, China has imported just 1.64 million barrels of American oil in the six months through March, with four of those months seeing no shipments at all. That compared with 60.5 million barrels in the preceding six months.
OPEC oil production drops in April as Iran output shrinks - Oil production from Iran dropped in April as the country remained under U.S. sanctions. In its closely watched monthly oil market report, the Organization of the Petroleum Exporting Countries said Iranian supply fell 164,000 barrels a day in April to 2.55 million barrels a day, with Saudi Arabian supply also falling by 45,000 barrels a day.The drop in supply was mitigated by rising output from Nigeria and Iraq, meaning OPEC crude oil production fell by 3,000 barrels a day to 30.031 million barrels, according to secondary sources. Elsewhere, non-OPEC supply growth in 2019 is expected to average 2.14 million barrels a day, down by 30,000 barrels a day from OPEC’s previous report.
Iran insists on ramping up oil sales to stay in nuclear pact - sources - (Reuters) - Iran insists on exporting at least 1.5 million barrels per day (bpd) of oil, triple May’s expected levels under U.S. sanctions, as a condition for staying in an international nuclear deal, sources with knowledge of Iran-EU talks said. The figure was communicated in recent meetings between Iranian and Western officials, including Iranian Foreign Minister Mohammad Javad Zarif, but has not been set down in writing, four European diplomatic sources said. The United States reimposed sanctions in November on exports of Iranian oil after U.S. President Donald Trump last spring unilaterally pulled out of the 2015 accord between Iran and six world powers to curb Tehran’s nuclear programme. In an attempt to reduce Iran’s crude exports to zero, Washington ended at the beginning of May waivers that had allowed the top buyers of Iranian oil to continue their imports for six months. The sanctions have already more than halved Iranian oil exports to 1 million bpd or less, from a peak of 2.8 million bpd last year. Exports could drop to as low as 500,000 bpd from May, an Iranian official told Reuters this month. Iran has threatened to block the Strait of Hormuz - a major oil-shipping route - and disrupt crude shipments from neighbouring countries if Washington succeeds in forcing all countries to stop buying Iranian oil. Iran’s Supreme Leader Ayatollah Ali Khamenei set out last year a series of conditions for European powers if they wanted Tehran to stay in the nuclear deal, including continued purchases of Iranian oil.
Sinopec, CNPC skip Iran oil purchases for May to avoid U.S. sanctions (Reuters) - China Petrochemical Corp (Sinopec Group) and China National Petroleum Corp (CNPC), the country’s top state-owned refiners, are skipping Iranian oil purchases for loading in May after Washington ended sanction waivers to turn up pressure on Tehran, three people with knowledge of the matter said. The United States has not renewed any exemptions from sanctions on Iran, taking a tougher line than expected on the expiry of the waivers. The waivers were granted last November to buyers of Iranian oil. China is Iran’s largest oil customer with imports of 475,000 barrels per day (bpd) in the first quarter of this year, according to Chinese customs data. Two of the sources said Sinopec and CNPC have skipped bookings for cargoes loading in May as the companies were worried that taking oil from Iran could invoke U.S. sanctions and cut them out of the global financial system. A third source said Sinopec, who buys the majority of China’s Iranian oil imports, does not wish to breach a long-term supply contract but has opted to suspend booking new cargoes for now due to the sanction worries. All of the people with knowledge of the matter requested anonymity due to the sensitive nature of the topic. Of the five supertankers that loaded Iranian crude in April for China, two have discharged, while another two are waiting off Ningbo and Zhoushan in eastern China to discharge, according to Refinitiv data and Refinitiv analyst Emma Li. A fifth tanker is heading to Shuidong in southern Guangdong province. The sources said they did not know how long the suspensions will last. Both Sinopec and CNPC declined to comment.
Mystery Tanker Violates US Sanctions, Unload Iranian Fuel In China As Zarif Heads To Beijing - With Trump shutting down Huawei and China's entire telecom industry, it was only logical that China would at least try to retaliate, which it has done by formally breaching the US embargo on Iran oil exports. According to ship tracking data on Refinitiv Eikon (i.e. the old Reuters terminal), a tanker carrying Iranian fuel oil in violation of U.S. sanctions has unloaded the cargo into storage tanks near the Chinese city of Zhoushan. A representative of the oil storage terminal confirmed that the tanker, Marshal Z, discharged nearly 130,000 tonnes of Iranian fuel oil; that marked the end of an odyssey for the cargo that began four months ago. As Reuters reported on March 20, some Iranian fuel oil had managed to evade the United States’ sanctions on petroleum exports "by using ship-to-ship transfers involving four different ships, including the Marshal Z, and by using forged documents that masked the cargoes as originating from Iraq." Marshal Z tanker Amusingly, a second representative from the terminal operator, Zhoushan Jinrun Petroleum Transfer Co, said the cargo could not be Iranian oil, "as the terminal had not received official shipments from Iran in at least the past four years. Both Jinrun representatives declined to be identified because of the sensitivity of the matter." Obviously, China would not explicitly admit it was violating a US embargo which took full effect less than two weeks ago, when President Trump’s administration stepped up moves to choke off Iran’s oil exports by scrapping waivers it had granted to big buyers of the country’s crude oil including China. Refined products like fuel oil, mainly used to power ship engines and generate electricity, were not covered by the temporary waivers granted. Still, China had no qualms with implicitly being found to have violated the embargo, which it appears to have done as a Reuters analysis of the tanker's trek revealed. Specifically, from March 22 until arriving at the Jinrun terminal on the island of Liuheng on May 8, the vessel maintained a constant draught of 15.9 meters (52 feet), according to the tracking data. That indicated the cargo was not discharged before reaching the terminal, about 30 km (18 miles) south of Zhoushan, near Shanghai.
China is going easy on American oil (for now). Here’s why - US oil has so far been spared China's tariff wrath even as the deepening trade war ensnares other American commodities. China hasn't been shy about targeting everything from liquefied natural gas and cotton to soybeans. Although China has tapered its purchases of US oil, officials there have so far avoided placing outright tariffs on crude from the world's leading producer.The decision to go easy on US oil reflects Beijing's desire to keep its options open, especially ascrude supplies from Venezuela and Iran dwindle and tensions in the Middle East rise."It's safer to tariff LNG," said Ryan Fitzmaurice, energy strategist at Rabobank. "China is a huge consumer of oil. There's a big appetite as people move into the middle class."The US-China trade war has escalated dramatically in recent days. The Trump administration on Friday raised tariffs on $200 billion of Chinese goods to 25%, up from 10%. China retaliated on Monday, increasing tariffs on about $60 billion of US goods, including cotton, machinery, grains and aircraft parts.LNG was included in the list of products now facing 25% tariffs, up from the 10% levy that China imposed in September.If not for the trade war, China and the United States would seem like a perfect match on LNG, which is super-cooled natural gas that can be transported by ship. China is the world's fastest-growing LNG market as Beijing tries to improve its pollution problem by shifting away from coal. Thanks to the shale boom, the United States has more natural gas than it knows what to do with. Today, the United States is the world's fastest-growing exporter of LNG.
Russia Could Take Hold Of China’s Entire Gas Market --As the trade war between the U.S. and China intensifies, with an increase in tariffs on some $200 billion worth of Chinese goods from 10 percent to 25 percent and with another $300 billion worth of Chinese goods in the cross-hairs, Beijing has vowed to retaliate. On Monday, it announced it will increase tariffs imposed on about $60 billion of U.S. goods in retaliation for what it sees as President Donald Trump’s latest escalation of the trade war. The increased tariffs will take effect on June 1, according to a statement on China’s Ministry of Finance’s website. Part of the increased tariffs will include U.S liquefied natural gas (LNG) imports, rising from a previous 10 percent levy to a damaging 25 percent starting June 1. The increase in tariffs already come as Chinese imports of the super-cooled fuel from the U.S. has plunged. A Reuters report said that in 2018 some 27 LNG vessels traveled from the U.S. to China, down from 30 in 2017. Meanwhile, most of those that left U.S. ports last year did so before the trade war started, with 18 tankers going to China in the first half of the year and just nine during the second half. Now that China is increasing LNG tariffs from 10 to 25 percent, these export numbers will drop even more, maybe even altogether. However, secondary traders will no doubt procure U.S.-sourced LNG and then resell it to China. Yet, that’s little respite for major U.S. LNG producers in the long term if the trade war continues. Not only will the trade war impact U.S.-Chinese LNG deals, but it will impact the overall global LNG market since the U.S. is the fastest growing LNG producer who could view with Australia and even Qatar for the top LNG slot in terms of liquefaction capacity by the mid part of the next decade if only a fraction of the dozens of U.S. LNG project proposals go forward. However, that’s the real quandary. Many of these projects aren't backed by cash-laden oil majors, like an Exxon Mobile or Chevron, but smaller players that need to sign long term off-take agreements with Chinese firms as well as secure funding from Chinese banks and financial institutions to finance their capex intensive projects. Simply put, without both Chinese funds and Chinese gas demand, the so-called second wave of the U.S. LNG development story will stall, losing out to eager competitors, including Russia.
Will Russia Abandon The OPEC+ Oil Deal? -- A month and a half before OPEC and its allies are set to sit down and discuss how to proceed with their production cut pact, the leader of the non-OPEC partners, Russia, is sending mixed signals on its willingness to continue taking part in the supply agreement.This is nothing new for Russia, which had dragged its feet in supporting each of the previous production deals with OPEC ever since the parties decided to team up to manage global oil supply and oil prices beginning in January 2017. After 2017, ahead of each meeting, comments and hints of top Russian officials, including Vladimir Putin, left the oil market and analysts only guessing would Moscow play ball this time around. It did, every time.At the meeting in December 2018, when the current oil production cut deal was forged, it was Putin—through his energy minister Alexander Novak—who sat down separately with each of the ministers of Saudi Arabia and Iran and convinced them to word the supply agreement in such a way that Iran would vote for the deal, because OPEC needs a unanimous vote to pass decisions.Now that we are approaching the date for the revision of the pact—June 25-26—Russia is sending mixed signals once again about its commitment to the deal, again. Not that OPEC’s members are sending unambiguous signals either. The U.S. threw a major challenge to the cartel and allies’ supply pact by ending all sanction waivers for Iranian oil buyers, leaving the organization and the market guessing just how much supply will be lost from Iran until June and afterwards, and how much more the other OPEC members—those with spare production capacity like Saudi Arabia and the UAE—will have to potentially pump to offset the lost Iranian barrels. Saudi Arabia says that it is prepared to meet all market demand for oil and, as always, “works toward market stability”, but it has reiterated that it wouldn’t rush in to ramp up production until it sees the actual barrels coming off the market. However, OPEC’s task in estimating global oil supply going forward has been made more difficult by mounting uncertainty over Russian oil supplies to Europe via the Druzhba pipeline, expectations of further production declines in Venezuela, and the possibility of an outage in Libya, which is in the midst of a civil war with rival armies fighting for the capital Tripoli.
IEA cuts oil demand outlook for 2019 - Oil demand growth estimates for both 2018 and 2019 have been cut, the International Energy Agency revealed in its latest report issued Wednesday. Last year’s oil demand growth estimate has been revised downward by 70,000 barrels per day (bpd) to 1.2 million bpd, while the forecast for this year is cut by 90,000 bpd to 1.3 million bpd, the IEA said. The estimates come amid global worries over the U.S.-China trade war and increased tensions in the Middle East, but are attributable to a range of factors specific to individual markets. “The changes reflect lower-than-expected 2018 data in large consuming nations such as Egypt, India, Indonesia and Nigeria,” the report said, adding that early data for this year showed demand in Brazil, China and Japan as below the agency’s estimates. The report noted a key divergence between OECD (Organization for Economic Cooperation and Development) countries and non-OECD countries. Demand in non-OECD countries, led by China, India and Russia, actually grew by 930,000 bpd year on year. Across the 36 OECD member states, demand fell by 300,000 bpd, a second consecutive quarterly slide, though this was primarily within the organization’s European and Asian members. In the Americas, oil consumption grew. The report also revealed a global supply drop in April of 300,000 bpd, led by Iran, Azerbaijan, Kazakhstan and Canada. Non-OPEC supply is forecast to grow 1.9 million bpd versus 2.8 million bpd last year.
Oil Pessimism Back in Vogue -- Pessimism is back in vogue in the oil markets, as investors bet sputtering trade talks and swelling U.S. output can kill crude’s rally. Hedge funds lifted bearish bets on West Texas Intermediate crude by 39%, the biggest short-selling surge in more than eight months. Meanwhile, bets on a rally retreated for the second straight week. Crude futures slipped to their third weekly loss in a row on Friday after high-level talks between the U.S. and China broke up, with President Donald Trump’s administration giving China a month to reach an agreement or face expanded tariffs. “Most of the bullish news on supply is priced in now so people are turning toward the trade wars," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “People who were assuming low exports from Iran are now wondering how much leakage there’ll be; Venezuela’s not at the bottom yet, but you can probably see it from here." The net-long WTI position -- the difference between bets on a price increase and wagers on a decline -- fell 10% to 271,912 futures and options contracts in the week ended May 7, the U.S. Commodity Futures Trading Commission said. Long positions fell 5.7%. The sum of long and short positions fell to its lowest in a month. Money managers showed more faith in Brent crude prices, which are less affected by the U.S. production surge. The net-long Brent tally rose by 0.5%, according to ICE Futures Europe exchange data. It was the ninth straight increase, the longest such streak since 2011. Other positions: The net-long position on Brent rose by 1,806 contracts to 406,175, the most bullish in seven months. Longs inched up 0.1%; shorts fell 4.5%. The net-long position on benchmark U.S. gasoline fell 7% to 107,198 contracts, the lowest in a month. Net diesel positions were slashed by 81%, to the least bullish in five weeks.
Oil prices up as Middle East tanker attacks heighten supply concerns - Oil futures rose on Monday on increasing concerns about supply disruptions in the Middle East even as investors and traders fretted over global economic growth prospects amid a standoff in the Sino-US trade talks. Brent crude futures were at $71.77 a barrel by 1134 GMT, up $1.15. US West Texas Intermediate (WTI) futures were at $62.49 per barrel, up 83 cents. Saudi Arabia said on Monday that two Saudi oil tankers were among vessels attacked off the coast of the United Arab Emirates, condemning it as an attempt to undermine the security of global crude supplies. The UAE said on Sunday that four commercial vessels were attacked near Fujairah, one of the world’s largest bunkering hubs. The port lies near the Strait of Hormuz, one of the world’s most important oil export waterways. Iran’s foreign ministry called the incidents “worrisome and dreadful” and asked for an investigation into the matter. Saudi Arabia and the UAE are the largest and third-largest producers, respectively, in the Organisation of the Petroleum Exporting Countries (OPEC). “Reports on Sunday of explosions in Fujairah are likely to add further impetus to a potentially growing risk premium in the region, with initial reports suggesting oil tankers specifically were targeted in an apparent sabotage,” Vienna-based consultancy JBC Energy said. The government of Fujairah, one of the seven emirates that make up the UAE, in a tweet denied media reports about blasts inside Fujairah port and said the facility was operating normally. Markets have been supported by Washington’s bid to cut Iran’s oil exports to zero and reduce exports from Venezuela, where infrastructure problems have also cut output. The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and world powers last year. But the trade friction between Washington and China, which intensified last week, will keep a lid on prices. The US and China together accounted for 34 per cent of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed.
Oil prices fall with Wall Street on trade war, give back early gains (Reuters) - Oil futures fell more than 1% on Monday with Wall Street, as the negative turn in the U.S.-Chinese trade talks spooked investors, who had sent oil higher in early trade on concerns that tanker attacks in the Middle East could disrupt supplies. Brent crude futures were down 77 cents at $69.85 a barrel, a 1.1 percent drop, by 1:04 p.m. EDT (1704 GMT). The global benchmark earlier hit a session high of $72.58 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 88 cents to $60.78 a barrel, a 1.4 percent decline, after previously hitting $63.33 a barrel. Oil was pressured by a slump in stocks and other risk assets as investors moved into safe havens like Treasury bonds in response to the intensifying U.S.-China trade war. [.N] China defied a warning from U.S. President Donald Trump and moved to impose higher tariffs on a range of U.S. goods including frozen vegetables and liquefied natural gas. The action was widely expected after Washington last week raised tariffs on $200 billion in Chinese imports. Investors fear the trade war between the world’s two largest economies could escalate further and derail the global economy. Earlier, oil prices had risen more than $1 a barrel after Saudi Arabia said two Saudi oil tankers were among vessels attacked off the coast of the United Arab Emirates. It was unclear how the attacks occurred.
Oil prices mixed as hope lingers for flagging US-China talks - Oil was mixed on Tuesday as tensions in the Gulf appeared to stop short of a military showdown and both sides in the U.S.-China trade talks sounded conciliatory notes, signalling that a breakdown might be avoided. Brent crude futures were at $70.40 a barrel at 0755 GMT, up 38 cents or 0.24 percent. Brent ended the previous session down 0.6 percent. U.S. West Texas Intermediate (WTI) crude futures were at $60.92 per barrel, down 12 cents or 0.2 percent. WTI closed down 1 percent on Monday. The negotiations between the United States and China appeared headed towards success last week but have largely unravelled over U.S. accusations that Beijing sought vast, last-minute changes. China on Monday ignored a warning from U.S. President Donald Trump and moved to impose higher tariffs on a range of U.S. goods including frozen vegetables and liquefied natural gas. But the Chinese government’s top diplomat, State Councillor Wang Yi, indicated on Monday that Beijing hoped for a compromise: “Both countries’ negotiating teams have the ability and wisdom to resolve each other’s reasonable demands.” Trump on Monday said he expected to speak to Chinese President Xi Jinping at a G20 summit in late June and have “probably a very fruitful meeting”. “Market participants (are) increasingly having to do their own guesswork and read between the lines to ride the latest wave of volatility in the financial markets,” analyst Vandana Hari of Vanda Insights said. “The U.S. president’s comments likely tilted the balance in favour of the optimists, who continue to expect a rapprochement despite last week’s major setback in trade negotiations.” Oil rose more than $1 a barrel on Monday but then fell with Wall Street as the negative turn in the U.S.-China talks spooked investors. In the Middle East, Saudi Arabia said two of its oil tankers were among those attacked off the coast of the United Arab Emirates on Sunday, describing it as an attempt to undermine the global oil supply. A U.S. official said Iran was the likely culprit.
Oil prices jump as Saudi Arabia reports drone ‘terrorism’ against pipeline infrastructure - Oil prices rose sharply Tuesday morning on reports of a drone attack at oil pumping stations in Saudi Arabia. The incident is an “act of terrorism,” Saudi Energy Minister Khalid al-Falih said according to the Saudi state news agency SPA, describing attacks on two oil pumping stations near Riyadh for the country’s East-West pipeline carried out with bomb-laden drones. Brent crude futures were up 1.3% at $71.14 a barrel, up 90 cents. U.S. West Texas Intermediate (WTI) crude futures were at $61.67 per barrel at 12:40 p.m. London time, up 1.03% for the session. The fire has since been contained, according to the SPA. Al-Falih asserted that oil production was not interrupted. State oil company Saudi Aramco said that its oil and gas supplies to Europe have not been affected, and that no one was injured. “This act of terrorism and sabotage in addition to recent acts in the Arabian Gulf do not only target the Kingdom but also the security of world oil supplies and the global economy,” the SPA described al-Falih as saying. No one has yet been directly accused of carrying out the attack, but a Yemeni Houthi-run TV channel announced on Tuesday morning it had launched drone attacks on several Saudi installations.
Oil Jumps On Middle East Tensions - OilPrice Intelligence Report - It’s been a volatile few days for oil, with prices up on Monday because of tension in the Middle East, only to fall on concerns about the trade war. By Tuesday, prices were back up again, with markets paying renewed attention to geopolitical risk. Global financial markets shrugged off the escalating trade war last week on hopes that a deal could be reached. However, by Monday, gloom began to sink in. Negotiations in Washington ended on Friday and there is little sign of a thaw in the short run. China announced retaliatory measures on Monday, raising tariffs from 10 to 25 percent on $60 billion worth of U.S. goods, which included LNG but not crude oil. If the trade war drags on, it could deter future U.S. investment in LNG export capacity. The trade war “poses a threat to U.S. investment in LNG by limiting our share in the world’s fastest-growing LNG market,” Stephen Comstock, director of the American Petroleum Institute, said in a statement. Saudi Arabia said that two oil tankers were hit by saboteurs, and oil prices immediately spiked on the news. The incidents raised concerns about geopolitical risk in the Middle East. In another worrying development, Saudi Arabia said on Tuesday that drones attacked two pumping stations belonging to Saudi Aramco, forcing a temporary suspension of operations. The pipeline runs from eastern oil fields to the Red Sea. Only minor damage was reported and Aramco said the outage was precautionary, but the incident could inflame tensions even more. Iran is a suspect, though neither Saudi Arabia nor the U.S. have offered any evidence. A potential attack by Iranian proxy forces on U.S. interests in Iraq could set off a broader conflict, Cyril Widdershoven wrote for Oilprice.com. Disruptions in Iraq and Iran would not only impact supply, but also would wreak havoc on crude grades, with medium and heavy oil in short supply. “When the market hits the brick wall at the end of this year, this quality problem, in combination with increased instability in the Middle East, will not only create a nightmare scenario for consumers but could also push crude oil above the current $70-85 per barrel range,” Widdershoven wrote. Iran told European diplomats that it needs to export as much as 1.5 mb/d in order for it to stay in the 2015 nuclear deal, although this was likely a negotiating tactic. Last year, Iran had demanded 2 mb/d in a previous round of negotiations. Iran says that the European Union must provide some benefit to Iran for staying in nuclear deal after U.S. sanctions seek to eliminate all Iranian oil exports.
Oil prices rise over 1per cent on drone attack on Saudi Aramco facilities – Oil prices rose over 1per cent on Tuesday after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni-armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco. That move higher comes as the market waits for a report from the American Petroleum Institute (API), an industry group, which is expected to show U.S. crude stockpiles fell by 800,000 barrels last week, their second decline in a row, according to analysts in a Reuters poll. Brent futures gained US$1.01, or 1.4 percent, to settle at US$71.24 a barrel, while U.S. West Texas Intermediate crude gained 74 cents, or 1.2 percent, to US$61.78. That was the highest settle for Brent since May 6 and WTI since May 8 and caused the closing premium of Brent over WTI to rise to a nine-week high. Saudi Arabia said armed drones had struck two oil pumping stations in the kingdom on Tuesday in what it called a "cowardly" act of terrorism two days after Saudi oil tankers were sabotaged off the coast of the United Arab Emirates. U.S. national security agencies said they believe proxies sympathetic to or working for Iran may have been responsible for the tanker attacks rather than Iranian forces themselves. Iranian officials denied responsibility. Tehran has been embroiled in an escalating war of words with the United States over stricter U.S. sanctions, which have cut its oil exports and tightened global supply. A fifth of global oil consumption passes through the Strait of Hormuz from Middle East crude producers to global markets. "
WTI Drops After Big Surprise Crude Inventory Build - WTI managed modest gains today amid mideast chaos (drones striking saudi pipeline which followed damage to four oil tankers anchored off the United Arab Emirates on Sunday), after slumping yesterday on trade war (growth) concerns.“There’s really not a good reason for crude to trade lower right now,” said Bob Yawger, futures director at Mizuho Securities USA.“You’ve got growing geopolitical risk, and you’re risk-on right now in the equity markets.”But aside from all the speculative geopolitics, fundamental supply and demand still matter... API
- Crude +8.6mm (-1.3mm exp)
- Cushing +2.1mm (+1.3mm exp)
- Gasoline +567k (-300k exp)
- Distillates +2.2mm (-1.0mm exp)
After last week's surprise crude draw, API reported a big surprise crude build and builds for products too... WTI hovered just below $62 handle ahead of the API print but kneejerked lower after the surprise build...
Oil firms on Middle East uncertainty, shrugs off U.S. crude build Reuters) - Oil futures inched up on Wednesday as the prospect of mounting tensions in the Middle East hitting global supplies overshadowed an unexpected build in U.S. crude inventories. Brent crude settled at $71.77 a barrel, gaining 53 cents or 0.7%. West Texas Intermediate (WTI) crude futures settled at $62.02 a barrel, climbing 24 cents or 0.4%. U.S. crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, the Energy Information Administration (EIA) said. [EIA/S] Crude stocks swelled by 5.4 million barrels, surprising analysts who had expected a decrease of 800,000 barrels. Still, the build was smaller than the nearly 9 million-barrel build estimate on Tuesday by the American Petroleum Institute (API), a trade group, which helped lift crude price sentiment. The drawdown in gasoline stocks also helped oil futures, analysts said, with U.S. gasoline futures gaining about 2%. Rising uncertainty in the Middle East, however, boosted crude prices the most. “Although crude oil inventories built more than the market expected due to higher imports, prices remained supported due to the geopolitical dynamics of the Middle East,” said Andrew Lipow, president of Lipow Oil Associates in Houston. Oil prices have drawn support since Saudi Arabia said on Tuesday that armed drones struck two oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates. “Given that nearly one-third of global oil production and nearly all of global spare capacity are in the Middle East, the oil market is very sensitive to any attacks on oil infrastructure in this region,” Swiss bank UBS said. The attacks took place against a backdrop of U.S.-Iranian tension. Washington has been trying to cut Iran’s oil exports to zero with sanctions while beefing up the U.S. military presence in the Gulf. Washington ordered the departure of non-emergency American employees from its diplomatic missions in Iraq on Wednesday in show of concern about threats from Iran-backed forces. “There could be a pretty serious conflict with Iran should they do something to U.S. forces in the region, and that would spike the price of oil,”
US Crude Oil Inventories Jumped By 5.4 Million Bbls -- EIA -- May 15, 2019 - EIA: weekly petroleum report later this morning. Link here. Corroborates the huge build reported by API yesterday.
- weekly US crude oil inventories: increased by a pretty impressive 5.4 million bbls
- weekly US crude oil inventories now stand at 472.0 million bbls
- weekly US crude oil inventories are about 2% above the five-year average (wink, wink)
- refineries operating at 90.5% capacity; trending up but still down; maintenance and winter/summer switch-over coming to an end
- imports: down almost 10% from same four-week period last year
- having said that, imports last week, just for that one week, increased by almost a million bopd, averaging 7.6 million bopd
- propane/propylene inventories are almost 20% above the five-year average
- jet fuel product supplied was up 11% compared with same four-week period last year
- gasoline demand will be reported later today
EIA says US crude oil inventories about 2% over 5-year average. Against 350 million bbls, which is way more than needed, 472 million bbls is 35% higher. Against 300 million bbls which had been the historical "norm,' 472 million bbls is 57% higher. This is now all about US crude oil exports. One needs to use calculus to calculate how much oil must be exported each week to move the US toward a) re-balancing at 400 million bbls; b) 350 million bbls in storage; c) 300 million bbls in storage. It would be interesting to see the "target" for US storage of crude oil that Exxon, Chevron, COP, etc, are setting internally. In other words, anticipating exports in 2020, how much storage does the US need, based on estimates by the oil companies and/or the EIA? Storage at Cushing is apparently no longer an issue and most new storage has been put in along the US gulf coast. When storage got "tight" in Cushing many years ago there were many, many stories on storage issues. However, I haven't seen similar stories now, and I wonder how much excess storage exists.
Oil Algos Unsure As Crude Inventories Pop, Production Drops -WTI held on to losses overnight (bouncing of $61) after a big surprise crude build (reported by API) trumped geopolitical risk premia from drone attack in Saudi Arabia. “We’ve become used now to the ongoing supply worries,” IEA Head of Oil Industry and Markets Neil Atkinson said in a Bloomberg Television interview. The latest attacks in the Gulf appear not to have caused any “sustained damage” and the market “remains focused on the underlying fundamentals.” Additionally, the International Energy Agency said that global oil demand will grow more slowly than previously thought following an economic lull in Asia, while warning that supplies stand to tighten due to U.S. sanctions on Iran.“Even so, slower demand growth is likely to be short-lived, as we believe that the pace will pick up during the rest of the year.” Disappointing fuel consumption in China, Japan and Brazil meant 2019 started with a “tough quarter,” the agency said, lowering its global demand estimate for the first time since October. As a result, world oil inventories surprisingly swelled during the first three months of the year. DOE
- Crude +5.431mm (-1.3mm exp)
- Cushing (+1.3mm exp)
- Gasoline -1.12mm (-300k exp)
- Distillates +84k (-1.0mm exp)
After builds across the entire energy complex overnight from API, EIA was still expected to see a draw (following last week's surprise draw) but crude stockpiles built last week along with Cushing inventories. Gasoline resumed its draws but distillates surprised with a small 84k build...
Oil rises 24 cents, settling at $62.02, as market shrugs off jump in US crude stockpiles -- Oil futures edged up on Wednesday as worries that rising tensions in the Middle East could hit global supplies overshadowed an unexpected build in U.S. crude inventories. U.S. West Texas Intermediate crude futures settled 24 cents higher at $62.02 per barrel. Brent crude futures rose 56 cents to $71.80 a barrel around 2:30 p.m. ET (1830 GMT). U.S. crude stocks rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, the Energy Information Administration said. Crude stocks swelled by 5.4 million barrels, surprising analysts who had expected a decrease of 800,000 barrels. “Although crude oil inventories built more than the market expected due to higher imports, prices remained supported due to the geopolitical dynamics of the Middle East,” said Andrew Lipow, president of Lipow Oil Associates in Houston. Oil prices have drawn support since Saudi Arabia said on Tuesday that armed drones struck two oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates. “Given that nearly one-third of global oil production and nearly all of global spare capacity are in the Middle East, the oil market is very sensitive to any attacks on oil infrastructure in this region,” Swiss bank UBS said, adding it expected Brent prices to rise toward $75 in coming weeks. The attacks took place against a backdrop of U.S.-Iranian tension. Washington has been trying to cut Iran’s oil exports to zero with sanctions while beefing up the U.S. military presence in the Gulf. Washington ordered the departure of non-emergency American employees from its diplomatic missions in Iraq on Wednesday in show of concern about threats from Iran-backed forces.
US crude rises 1.4% to 2-week high on Middle East tension, settling at $62.87 - Oil prices jumped as much as 2% on Thursday as tensions in the Middle East grew, with a Saudi-led coalition launching air strikes in retaliation for recent attacks on its oil infrastructure. U.S. West Texas Intermediate crude futures settled 85 cents higher at $62.87 per barrel, gaining 1.4% and closing at the highest level in two weeks. Brent crude futures rose 85 cents, or 1.2%, to $72.62. Brent, the international benchmark for oil prices, touched its highest level in three weeks earlier in the session. The Saudi-led military coalition in Yemen carried out several air strikes on the Houthi-held capital Sanaa on Thursday after the Iranian-aligned movement claimed responsibility for drone attacks on two Saudi oil pumping stations earlier in the week. “You have a sizable strike on Iran-aligned Houthi forces in Yemen today, so until there’s some kind of stepback from that situation, this market is going to have a tough time trading lower,” said Mizuho director of futures Bob Yawger. “There’s just a lot of political risk in this market.” Saudi Arabia’s deputy defense minister accused Iran of ordering the drone attack on the pumping stations. It comes after attacks on four oil tankers off the coast of United Arab Emirates on Sunday. Taken together, the escalation of tensions has compounded fears of supply disruption in the Middle East. U.S. staff was ordered to leave the American embassy in Baghdad on Wednesday out of concern about perceived threats from Iran.
Oil extends gains into fourth straight day on Middle East tensions -- Oil prices rose again on Friday and were on track for the first weekly gains this month, as rising tensions in the Middle East stoked fears of supply disruptions. Brent crude futures were at $73.00 a barrel at 0303 GMT, up 38 cents, or 0.5%, from their last close, rising for a fourth straight session. Brent was up 3.4% for the week, on track for its first gain in three weeks. U.S. West Texas Intermediate (WTI) crude futures were at $63.32 per barrel, up 46 cents, or 0.7%. WTI was also up for a fourth day and was headed for a weekly gain of 2.7%, the first rise in four weeks. A Saudi-led military coalition in Yemen carried out several air strikes on the Houthi-held capital Sanaa on Thursday after the Iranian-aligned movement claimed responsibility for drone attacks on two Saudi oil pumping stations earlier in the week. Earlier this week, U.S. staff were evacuated from the American embassy in Baghdad, while U.S. President Donald Trump ordered the deployment of an aircraft carrier group, B-52 bombers and Patriot missiles to the Middle East. “When tensions are this high, with the U.S. deploying a sizable military force, even a mistake or a tactical error by Iran could ignite the Middle East powder keg,” Stephen Innes, head of trading and market strategy at SPI Asset Management told Reuters by email. “There are lots of supply risks with tensions this high,” he said, adding prices could test 2019 highs reached in April. Still, Trump has told his top advisers he does not want to get the United States involved in a war with Iran, three U.S. officials said on Thursday.
Oil slips but ends week higher on Mideast supply disruption fears (Reuters) - Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-U.S. trade talks, but both benchmarks ended the week higher on rising concerns over supply disruptions in Middle East shipments due to U.S.-Iran political tensions. Iran said on Friday it could “easily” hit U.S. warships in the Gulf, the latest in days of saber-rattling between Washington and Tehran, while its top diplomat worked to counter U.S. sanctions and salvage a nuclear deal denounced by President Donald Trump. U.S. sanctions on Iran have already cut the OPEC member’s crude exports further in May, adding to supply curbs implemented through an OPEC-led pact for the first six months of the year. Brent crude fell 41 cents, or 0.6%, to settle at $72.21 a barrel. The global benchmark notched a weekly gain of about 2%, having ended last week largely steady and fallen the week before. U.S. West Texas Intermediate crude fell 11 cents to end the session at $62.76, and gained about 1.7% on the week. Oil prices came under pressure on Friday from seesawing U.S. equity markets due to fears over global economic growth amid the escalation of a trade war between the world’s top economies. Chinese media took a hardline approach to the tariff dispute between the Washington and Beijing, saying the trade war will only make China stronger and will never bring the country to its knees.
Iran commander calls U.S. military in Gulf a target not a threat: ISNA (Reuters) - A senior Iranian Revolutionary Guards commander said on Sunday the U.S. military presence in the Gulf used to be a serious threat but now represents a target, the Iranian Students’ News Agency (ISNA) reported. The U.S. military has sent forces, including an aircraft carrier and B-52 bombers, to the Middle East in a move that U.S. officials said was made to counter “clear indications” of threats from Iran to American forces in the region. The USS Abraham Lincoln is replacing another carrier rotated out of the Gulf last month. “An aircraft carrier that has at least 40 to 50 planes on it and 6,000 forces gathered within it was a serious threat for us in the past but now it is a target and the threats have switched to opportunities,” said Amirali Hajizadeh, head of the Guards’ aerospace division. “If (the Americans) make a move, we will hit them in the head,” he added, according to ISNA.
4 Ships Targeted by “Sabotage” in UAE Port, Initially Denied by Authorities - Contrary to initial statements by the government of Fujairah, the UAE foreign ministry said in a statement that four commercial vessels were targeted by “sabotage operations” near the territorial waters of the United Arab Emirates, adding that there were no victims. The ministry statement was tweeted by the official news agency WAM. The government of Fujairah, a member of the United Arab Emirates federation, denied on Sunday media reports about blasts at the port of Fujairah, according to a statement tweeted by its media office. Fujairah, just outside the Strait of Hormuz, is one of the largest bunkering hubs in the world. The strait is a vital corridor for oil and gas in the global energy market. The statement didn’t identify the media outlets that published these reports but the Iranian Press TV website cited a Lebanese broadcaster, Mayadeen, saying seven oil tankers were attacked in the port. “The media office of the government of Fujairah denies the veracity of the media reports saying strong explosions rocked the port of Fujairah this morning,” it said. “The operations at the port are going as usual.” A spokesperson for the US Navy’s Bahrain-based Fifth Fleet said they had no comment at this time when contacted by Reuters. Tensions are running high in the region after the US military sent forces, including an aircraft carrier, to the Middle East to counter what the White House says are “clear indications” of threats from Iran to its forces there.
Saudi Arabia says 2 oil tankers damaged by sabotage attacks (AP) — Two Saudi oil tankers and a Norwegian-flagged vessel were damaged in what Gulf officials described Monday as a “sabotage” attack off the coast of the United Arab Emirates. While details of the incident remain unclear, it raised risks for shippers in a region vital to global energy supplies at a time of increasing tensions between the U.S. and Iran over its unraveling nuclear deal with world powers. The U.S. issued a new warning to sailors as the UAE’s regional allies condemned Sunday’s alleged attack that the UAE says targeted four ships off the coast of its port city of Fujairah. It came just hours after Iranian and Lebanese media outlets aired false reports of explosions at the port. While Gulf officials declined to say who they suspect may be responsible, the U.S. has warned ships that “Iran or its proxies” could be targeting maritime traffic in the region. America is deploying an aircraft carrier and B-52 bombers to the Persian Gulf to counter alleged, still-unspecified threats from Tehran. The scale of the alleged sabotage also remains unclear. A statement from Saudi Energy Minister Khalid al-Falih said the kingdom’s two oil tankers, including one due to later carry crude to the U.S., sustained “significant damage.” However, a report from Sky News Arabia, a satellite channel owned by an Abu Dhabi ruling family member, showed the allegedly targeted Saudi tanker Al Marzoqah afloat without any apparent damage. The MT Andrea Victory, another of the allegedly targeted ships, sustained a hole in its hull just above its waterline from “an unknown object,” Emirati officials identified the third ship as the Saudi-flagged oil tanker Amjad. Ship-tracking data showed the vessel still anchored off Fujairah, apparently not in immediate distress. The fourth ship was the A. Michel, a bunkering tanker flagged in Sharjah, one of the UAE’s seven emirates. A U.S. official told The Associated Press that American naval investigators were assisting the Emiratis with their probe of the incident.
U.S. envoy urges response "short of war" to Gulf tankers attack (Reuters) - The U.S. ambassador to Saudi Arabia said Washington should take what he called "reasonable responses short of war" after it had determined who was behind attacks on oil tankers off the coast of the United Arab Emirates. Iran was a prime suspect in the sabotage on Sunday although Washington had no conclusive proof, a U.S. official familiar with American intelligence said on Monday. Iran has denied involvement. "We need to do a thorough investigation to understand what happened, why it happened, and then come up with reasonable responses short of war," Ambassador John Abizaid told reporters in the Saudi capital Riyadh in remarks published on Tuesday. "It's not in (Iran's) interest, it's not in our interest, it's not in Saudi Arabia's interest to have a conflict." Four commercial vessels, including two Saudi oil tankers, were sabotaged on Sunday near Fujairah, one of the seven emirates of the UAE and a bunkering hub just outside the Strait of Hormuz. UAE authorities did not say who was behind the attack. Distancing Tehran from the incident, Iran's Foreign Ministry called it "worrisome and dreadful". Iran is embroiled in a war of words with the United States over sanctions and the U.S. military presence in the region. Washington has increased sanctions on Tehran, saying it wants to reduce Iranian oil exports to zero, after quitting the 2015 nuclear pact between Iran and global powers last year. The U.S. Maritime Administration said last week that Iran could target U.S. commercial ships including oil tankers sailing through Middle East waterways. Tehran has called the U.S. military presence "a target" rather than a threat. U.S. Secretary of State Mike Pompeo shared information on what he called escalating threats from Iran during meetings with EU counterparts and the head of NATO in Brussels on Monday, the U.S. special representative for Iran Brian Hook said. Hook declined to say whether he believed Iran played a role in the attacks off Fujairah or if Pompeo blamed Iran. He said the UAE had sought U.S. help in the investigation.
UAE says it will show restraint after tanker attacks, Iran's behavior a concern (Reuters) - The United Arab Emirates will show restraint after attacks on oil tankers off its coast and is committed to de-escalation during a “difficult situation” caused by Iranian behavior in the region, a senior official said on Wednesday. Minister of State for Foreign Affairs Anwar Gargash said he would not speculate about who was behind Sunday’s sabotage acts on four vessels, including two Saudi tankers, near Fujairah emirate while an investigation was under way and due to be completed within days. “We need to emphasize caution and good judgment. It is easy to throw accusations but it is a difficult situation, there are serious issues and among them is Iranian behavior,” he said, mentioning concern about Iran’s missiles and regional policy. “We will actually with our partners also be deliberate in considering our response, what to do about it, how to deal with it,” he said, adding the United States and France were helping with the probe. France has a naval base in Abu Dhabi.
Britain warns of Iran-U.S. conflict, Pompeo meets Europeans - (Reuters) - Iran and the United States could trigger a conflict by accident in an already unstable Gulf region, Britain’s foreign minister said on Monday, as U.S. Secretary of State Mike Pompeo held talks in Brussels with the main European powers on the crisis. President Donald Trump is seeking to isolate Tehran by cutting off its oil exports after pulling out of a 2015 deal aimed at curbing Iran’s nuclear program. Trump has also beefed up the U.S. military presence in the Gulf to pressure Iran. While the European Union shares some U.S. concerns about Iran, including over its involvement in the Syrian conflict, it still backs the 2015 nuclear deal, saying that it is in Europe’s own security interests. “We are very worried about a conflict, about the risk of a conflict ... of an escalation that is unintended,” Britain’s Jeremy Hunt told reporters in Brussels before talks with Pompeo. Britain, Germany and France are signatories to the 2015 deal and their foreign ministers held separate meetings in Brussels on Monday with Pompeo, who canceled a planned stopover in Moscow in order to brief the European allies on Washington’s latest moves. Pompeo also met NATO Secretary-General Jens Stoltenberg.
Warnings of ‘Gulf of Tonkin 2.0’ as US Officials Blame Iran for Oil Tanker Attacks — Is the Trump administration attempting to concoct a false pretext to justify launching a war against Iran? That question has become increasingly common and urgent among anti-war commentators and activists in recent days as U.S. intelligence officials—without citing any concrete evidence—blamed Iran for reported attacks on Saudi and UAE oil tankers in the Strait of Hormuz over the weekend. Commentators quickly likened the accusations to the Gulf of Tonkin incident, referring to the “fabricated” event that President Lyndon Johnson used to massively escalate America’s war in Vietnam. “Anyone who knows history of [the] 1964 Gulf of Tonkin incident and U.S. escalation in Vietnam should be shocked, alarmed at what’s happening in [the] Persian Gulf, including unverified claims of boat attacks,” Will Bunch of the Philadelphia Inquirer tweeted. Journalist Rania Khalek echoed Bunch, warning that national security adviser John Bolton and Secretary of State Mike Pompeo “are trying to create a Gulf of Tonkin incident with Iran.” According to the Wall Street Journal, U.S. officials “didn’t offer details about what led to the assessment” that Iran carried out the attacks on the oil tankers. “We are in grave danger of being sleepwalked into military confrontation with Iran over an incident that is blamed wrongly on Iran,” author and journalist Gareth Porter said in a statement. “Corporate media have given Bolton and his conniving to achieve such a crisis a free pass.”
Saudis Claim Iran Ordered Aramco Pipeline Drone Attack -- Saudi Arabia on Thursday blamed Iran for ordering an attack early this week on two Aramco pipeline booster stations, a strike that was intended as part of a broader sabotage campaign to disrupt world oil supplies, according to Saudi Energy Minister Khalid al-Falih. The drone attacks came one day after a string of attacks on two Saudi oil tankers and two other vessels in the Strait of Hormuz, and caused the temporary closure of a vital east-west pipeline traversing the kingdom, since reopened. Prince Khalid Bin Salman, the vice minister for defense and brother of the crown prince MbS, described Yemen's Houthis - which were believed to have launched the drone attack - of being used as an "Iranian" tool advancing Tehran's aggression and hegemony in the region. In a tweet, he said the Houthi militias “are merely a tool that Iran’s regime uses to implement its expansionist agenda in the region, and not to protect the people of Yemen as the Houthis falsely claim”.#BREAKING Saudi Arabia confirmed that militants, probably Iranian backed Houthi militants, sent booby-trapped drones targeting #Aramco's two oil pumping stations in Dawadmi and Afif provinces in #Riyadh, amid the tension between #US and Iran pic.twitter.com/drkWCG4eMN— Yosef Yisrael (@yosefyisrael25) May 14, 2019 Since 2015 Saudi coalition jets have been waging a brutal bombing campaign over Yemen to roll back the country's Shia Houthi rebels, the latter which have occasionally launched missile and drone attacks against sensitive sites in the kingdom, at times even reaching Riyadh's international airport with ballistic missiles. Soon after Monday's drone attack on the Aramco facilities, dramatic video was released online showing extensive destruction of the pumping stations, which had been on fire for hours following the attack. US and Saudi investigators further blamed Iran for a "sabotage attack" on several Saudi and international tankers off a UAE port near the Strait of Hormuz on Sunday.
Iran Used Underwater Drones In Tanker Attacks, Insurer Claims - Investigators say last Sunday's mysterious "sabotage" attack on four tankers which included two Saudi ships off Fujairah in the United Arab Emirates was "highly likely" the work of Iran's elite Revolutionary Guards (IRGC) deploying underwater attack drones. Specifically an IRGC surface vessel is believed to have launched the underwater drones packed with between 30 and 50kg of explosives which detonated on impact, according to a new report issued this week by the Norwegian Shipowners’ Mutual War Risks Insurance Association, known as DNK. Among the vessels hit were a Norwegian-flagged vessel as well as a UAE ship. A new report by Reuters summarized the Norwegian insurance investigators' preliminary findings as based on analyzing shrapnel from the attacks which was "similar" to shrapnel recovered from surface drones used off Yemen by Iran-backed Houthi militia. However, the insurance assessment seen by Reuters is "confidential" with an investigation still ongoing, and thus must be treated with skepticism.Further, the evidence appears largely circumstantial at this point, with Iran's guilt appearing to hinge on the assumption that shrapnel from Houthi operations and remnant material found at the port of Fujairah are from the same source. Reuters lists the following summary points and "evidence" from the DNK assessment which allege the IRGC's inolvement as follows:
- A high likelihood that the IRGC had previously supplied its allies, the Houthi militia fighting a Saudi-backed government in Yemen, with explosive-laden surface drone boats capable of homing in on GPS navigational positions for accuracy.
- The similarity of shrapnel found on the Norwegian tanker to shrapnel from drone boats used off Yemen by Houthis, even though the craft previously used by the Houthis were surface boats rather than the underwater drones likely to have been deployed in Fujairah.
- The fact that Iran and particularly the IRGC had recently threatened to use military force and that, against a militarily stronger foe, they were highly likely to choose “asymmetric measures with plausible deniability”. DNK noted that the Fujairah attack had caused “relatively limited damage” and had been carried out at a time when U.S. Navy ships were still en route to the Gulf.
The attack location, so close to the entrance to the Strait of Hormuz - which the IRGC has previously threatened to close in order to strangle global oil shipping - was also a key factor in pointing to Iran's guilt, according to the report.
US Issues Security Alert Ordering Non-Emergency Staff to Depart Iraq - The US State Department has issued a security alert and ordered staff to evacuate Iraq amid escalating tensions with neighboring Iran. The alert posted on the US embassy in Iraq today read: “The U.S. State Department has ordered the departure of non-emergency U.S. Government employees from Iraq, both at the U.S. Embassy in Baghdad and the U.S. Consulate in Erbil. Normal visa services at both posts will be temporarily suspended. The U.S. government has limited ability to provide emergency services to US citizens in Iraq.”A US embassy spokesperson is reported by the Financial Times saying that US Secretary of State, Mike Pompeo, had taken the decision to withdraw because of “the increased threat stream we are seeing in Iraq”. The spokesperson declined to say how, when, or how many staff were leaving, citing security reasons.No details of the threat facing US officials in Iraq were given and there are some doubts over the motivation for issuing the alert. British deputy commander of the anti-Daesh coalition, Major General Christopher Ghika, was quoted saying yesterday that Iran was not upping aggression through the militias it backs. “There’s been no increased threat from Iranian-backed forces in Iraq and Syria,” he said according to the FT. Ghika also said that “there are a substantial number of militia groups in Iraq and Syria and we don’t see any increased threat from many of them at this stage.” The security alert, which contradicts Ghika’s assessment of the threat, comes amid fears that tensions in the region are spiraling out of control in recent weeks, with an attack on Saudi oil tankers in the Gulf yesterday. Reports also emerged of Trump’s administration plans to send up to 120,000 troops to the Middle East. Last week the US deployed carrier bombers and other military assets to the region, citing what it claimed were Iran’s “escalatory actions”.
Top British Commander In Rare Public Dispute With US Over Iran Intelligence --An awkward public exchange unfolded between the US military and its closest allied military coalition force during a Pentagon press conference on Tuesday wherein a top British commander in charge of anti-ISIS coalition forces rebuked White House claims on the heightened Iran threat. “No – there’s been no increased threat from Iranian-backed forces in Iraq and Syria,” British Army Maj. Gen. Christopher Ghika, a deputy head of the US-led coalition, asserted confidently in a videolink briefing from Baghdad to the Pentagon in response to a CNN question. “We’re aware of that presence, clearly. And we monitor them along with a whole range of others because that’s the environment we’re in. We are monitoring the Shia militia groups. I think you’re referring to carefully and if the threat level seems to go up then we’ll raise our force protection measures accordingly.” The British commander's words prompted a rare and swift rebuke from the US side hours later into the evening when US Central Command (CENTCOM) issued its own statement slamming Gen. Ghika's words as inaccurate, insisting coalition troops in Iraq and Syria were an a "high level of alert" due to the "Iran threat". “Recent comments from OIR’s deputy commander run counter to the identified credible threats available to intelligence from US and allies regarding Iranian-backed forces in the region,” the CENTCOM statement said.“US Central Command, in coordination with OIR, has increased the force posture level for all service members assigned to OIR in Iraq and Syria. As a result, OIR is now at a high level of alert as we continue to closely monitor credible and possibly imminent threats to US forces in Iraq.”
Iran's Military On The Cusp Of War As US Allies Pull Troops From Iraq -- In probably the most significant sign so far that we could be headed for yet another major war in the Middle East, multiple European allies of the United States are rapidly pulling their forces from Iraq and the Persian Gulf region on fears they could get unwillingly sucked into confrontation with Iran. Tehran isn't backing down the US escalation ladder either, given moments ago Iran's Revolutionary Guard commander, Major General Hossein Salami, said via the Reuters newswire: "We are on the cusp of a full scale confrontation with the enemy." Iran's Minister of Defense Amir Hatami also vowed Wednesday, "We will defeat the American-Zionist front," according to the Islamic Republic News Agency (IRNA). This follows on the heels of the US State Department's dramatic ordering of an evacuation of all non-essential diplomatic personnel and their families from the American embassy in Baghdad, citing an "imminent" threat. As of Wednesday morning the countries of Spain, Germany, and the Netherlands have suspended military support operations in Iraq, citing rising US-Iran tensions. And further a top Iraqi diplomat told reporters at a press conference in Moscow that “Iraq is a sovereign nation. We will not let [the US] to use our territory” for any military operations against Iran.
Europe Is Powerless In Growing Conflict Between The US And Iran - Brexiteers in Britain are denouncing the EU as an all-powerful behemoth from whose clutches Britain must escape, just as the organisation is demonstrating its failure to become more than a second-rate world power. The EU’s real status – well behind the US, Russia and China – has just been demonstrated by its inability to protect Iran from US sanctions following President Trump’s withdrawal from the Iran nuclear deal of 2015. A year ago, Angela Merkel and Emmanuel Macron made humiliating visits to Washington to plead vainly with Trump to stay with the agreement, but were rebuffed.Since then the US has successfully ratcheted up economic pressure on Iran, reducing its oil exports from 2.8 to 1.3 million barrels a day. The UK, France and Germany had promised to create a financial vehicle to circumvent US sanctions, but their efforts have been symbolic. Commercial enterprises are, in any case, too frightened of the ire of the US treasury to take advantage of such measures.Iranian president Hassan Rouhani said on Wednesday that Iran would stop complying with parts of the nuclear deal unless the Europeans provided the promised protection for the oil trade and banks. Everybody admits that Iran is in compliance but this is not going to do it any good. The Europeans will be spectators in the escalating US-Iran conflict. The US potential is great when it comes to throttling the Iranian economy. Iranian oil exports are disappearing, inflation is at 40 per cent and the IMF predicts a 6 per cent contraction in the economy as a whole. The US can punish banks dealing with Iran everywhere, including countries where Iran is politically strong such as Iraq and Lebanon.
Two More US Warships Travel To Persian Gulf As Tensions With Iran Escalate - In the latest provocation against Tehran by the US, two Navy destroyers have entered the Persian Gulf as the American military continues to add to its assets in the region to head off any planned 'aggression', USNI reports. The USS McFaul and USS Gonzalez traveled through the Strait of Hormuz Thursday afternoon without being challenged by IRGC forces in the are. They join the USS Abraham Lincoln, which is stationed in the Gulf of Oman, as well as a strike force that includes several B-52 bombers, as the US continues to build up its military presence in the region. Another Aircraft Carrier, the USS Kearsarge, is anchored off the coast of the UAE. According to USNI, if the US wanted to attack Iran from the water, its ships would be better off outside of the Persian Gulf, where it would be more difficult for Iranian missiles to reach them, and where they would be outside of Iran's "domain awareness." The move comes after the US government has continued to warn about heightened threats from Iran. These fears have already prompted the evacuation of non-essential embassy personnel from the Baghdad embassy and the Erbil consulate.
Iraq Refuses to Allow the US to Attack Iran From Its Territory — Baghdad’s ambassador to Russia told reporters today that Iraq will not allow the US to use its territory for military operations against Iran. “Iraq is a sovereign nation. We will not let [the US] use our territory,” Haidar Mansour Hadi, the Iraqi envoy said during a press conference when asked about his country’s position on the escalating tensions between Tehran and Washington. He said that Baghdad would use its position to act as a mediator and that his country “does not want a new devastating war in the region.” He added that he hoped “nothing will happen.” Hadi’s comments come during a time of heightened tensions in the Middle East. Yesterday, the US withdrew many of its diplomats from the consulate in Erbil and the embassy in Baghdad, citing fears of an attack. “The last two days there have been continuous meetings with all the groups to convey the Iraqi government’s message that if anyone does something, it is their responsibility, not Iraq’s,” said Sayed Al-Jayashi, a senior member of Iraq’s National Security Council.“The Iraqi government is responsible for protecting American interests in Iraq.”“We will become the enemy of anyone who does something against American interests,” he added. US Secretary of State, Mike Pompeo, visited Iraqi Prime Minister Adil Abdul-Mahdi last week to discuss security concerns which have resulted from increasing US-Iran tensions. Tehran and Washington have been involved in a war of words since Trump decided to pull out of the 2015 nuclear deal which sought to limit Iran’s ability to produce a nuclear weapon. In November 2018, the US re-imposed sanctions on the Islamic Republic, affecting the economy and causing internal political difficulties.
Iraqi Parliament to Vote on Bill That Would Ban US Military Troops From Iraq - — Iraq has spent the better share of the last 16 years under US military occupation. Despite this, time and again US-Iraqi relations have come to be defined by US hostility toward neighboring Iran, and Iraq’s desire to not get mixed up in that. So while Iraq’s parliament was already bristling under Pentagon talk of staying in Iraq, and Trump saying that the US was staying in Iraq to “keep an eye on Iran,” the recent escalation of US rhetoric about a war against Iran has sparked action within parliament. On Saturday, Iraq will be voting on a bill that would aim to expel all foreign troops from Iraqi soil, and singles out US troops in particular as needing to leave. The bill is endorsed by Iraq’s top two Shi’ite blocs, and is expected to pass fairly easily. What happens then is the real question. Iraq’s parliament is already being spun as “pro-Iran factions,” and it’s been a long time since US officials, Pentagon or otherwise, gave any indication that they thought staying in Iraq was up to the Iraqi government. So while the Iraqi Prime Minister is warning the US that they can’t use Iraq to launch a war on Iran, the US is browbeating Iraq over its government-aligned Shi’ite militias, and doing everything they can to try to portray that Shi’ite-dominated Iraqi government as effectively in league with the Iranians, and subsequently a threat to US interests. No matter what happens, it seems certain US-Iraqi ties will suffer for it.
The Battle For Control Over Iraq’s Oil --Iraq regards the U.S.’s refusal to extend waivers for countries importing oil from Iran as a tacit endorsement for it to pump its own oil to the maximum. This dovetails neatly into its Oil Ministry’s internal targets – conveyed last week to OilPrice.com by a source who works closely with the Ministry - of increasing crude oil production to at least 6.2 million barrels per day (bpd) by the end of 2020 and at least 9 million bpd by the end of 2023. At around the same time, the Oil Ministry announced that it had agreed preliminary terms with ExxonMobil and PetroChina to rollout the South Integrated Project (SIP), an important infrastructure project that should result in some degree of output increase. This deal, though, is far from certain, said the Iraqi source, and – critically - does not necessarily include the contract for the full-scale Common Seawater Supply Project (CSSP). This would involve taking and treating seawater from the Persian Gulf and then transporting it to oil production facilities in order to be used for water injection to boost pressure at southern Iraq’s ‘Big Four’ oil fields: Rumaila, Majnoon, Zubair, and West Qurna. The CSSP is regarded by traders, analysts and politicians alike as being the key to unlocking all of Iraq’s massive oil potential, the top-case production scenario according to the International Energy Agency being at least 12 million bpd. Russia, whose corporate proxy Rosneft already controls Iraq’s oil and gas industry in the north – through a deal done in November 2017 with the government of the semi-autonomous region of Kurdistan (KRG) - wants to consolidate its position in the south as well. Last week, it instructed its main corporate vehicle in the region – Lukoil – to dramatically increase the pace of its development of the supergiant West Qurna 2 oil field, in which it holds a 75% stake, with the remainder held by Iraq’s state-run North Oil Company. “There is huge political pressure from the Kremlin for Russian oil companies to maintain, and where possible expand their presence across all of Iraq, in light of recent moves by U.S. companies to re-establish the U.S. footprint across the country,” the Iraqi source told OilPrice.Com last week. “Russia regards moves being made by U.S. companies in Iraq as being similar to the way in which the British used the East India Company to consolidate its economic and political grip over India,” he said. This increase in pressure was the result of a recent meeting between Russian President Vladimir Putin’s Special Envoy to the Middle East and Africa, Mikhail Bogdanov, and Iraq’s nominal Prime Minister, Adil Abdul Al-Mahdi. Present at that meeting as well were senior representatives of the real power in Iraq, the ultra-nationalist cleric Moqtada al-Sadr. “Al-Sadr’s policy is to play off all sides against each other, making a deal recently with Iran to jointly develop shared oilfields but also allowing for the involvement of ExxonMobil in the SIP, and encouraging Russia to increase its presence on the oil fields,” said the Iraqi source. “In this way, he thinks he will get the best from each, and will also live up to his election promise of not allowing Iraq to become dependent on any one country again,” he added.
French Activists Successfully Block Saudi Ship From Loading Weapons - — A human rights organization called it a “victory for mobilized civil society” when a Saudi cargo ship left France on Friday without a planned batch of weapons.France, along with other Western countries including the U.S. and U.K., has been supplying arms to Saudi Arabia, which is leading the coalition bombing Yemen. In so doing, say human rights campaigners, they “risk complicity in committing grave violations of the laws of war.”Leaked classified French military documents published last month showed that French weapons are being widely used in the coalition’s bombing campaign “including in civilian zones.” The conflict has already killed thousands of civilian. Fearing that the new shipment of weapons could be used against the Yemeni civilian population, French rights group Christians for the Abolition of Torture (ACAT-France) filed a legal challenge Thursday to block a new batch of French weapons from being loaded onto the Saudi vessel the Bahri Yanbu at the French port city of Le Havre. The ship had been anchored 15 miles offshore since late Wednesday.The weapons, said ACAT, would violate one article of the U.N. Arms Trade Treaty.“The article says that one country cannot authorize the transfer of weapons, if at the time of the authorization, the country knew that weapons could be used to commit war crimes,” said lawyer Joseph Brehem, speaking on behalf of ACAT. While ACAT didn’t win their case, the ship nonetheless did not dock to pick up the shipment, but instead moved on to Spain.
Drones Attack Saudi Aramco Pumping Stations - Saudi Arabia said Tuesday that unidentified drones attacked two pumping stations belonging to Saudi Aramco, forcing the state oil company to suspend some operations in the area to assess the damage. Oil prices rose. The stations are linked to a giant pipeline transporting oil from fields in the eastern sector to the port of Yanbu on the western coast, state-run Saudi Press Agency reported, citing the Energy Ministry. The pipeline has been halted, but Aramco is working to restore the link and Saudi oil exports are continuing as normal, SPA said. The attack comes amid rising tensions in the Gulf as the U.S. increases pressure on Iran. On Monday, Saudi Arabia said two of its oil tankers were among several vessels attacked while sailing toward the Strait of Hormuz, the world’s most important chokepoint for oil shipments. Neither Saudi Arabia nor the U.A.E. said exactly what happened to the tankers or identified potential culprits. The manager of one of the tankers hit said, however, that the vessel had got a hole in its hull after being struck by an unknown object off the coast of the United Arab Emirates. “These attacks prove again that it is important for us to face terrorist entities, including the Houthi militias in Yemen that are backed by Iran,” SPA said. Iranian-backed Houthi rebels in neighboring Yemen said earlier in the day that they had targeted key Saudi installations using seven drones, according to the rebel-controlled Saba news agency.
Houthi Drones Attack Aramco Pipeline Booster Stations - Yemen's Iran-backed Houthi rebels carried out drone attacks on two Aramco pipeline booster stations, a strike that was intended to disrupt world oil supplies, according to Saudi Energy Minister Khalid al-Falih.Al-Falih told Saudi-funded news agency Al-Arabiya that the attacks targeted two pipeline booster stations between the Eastern province and the city of Yanbu. He added that pumping will be stopped at one of the damaged pipeline in order to start repairs. Al-Falih claimed the attack was carried out with the aim of disrupting oil supplies, and that the attack "proves the importance of confronting all terrorist organizations."A news agency controlled by the Houthis said seven drones were involved in attacks on seven installations. The attacks come one day after a string of attacks on two Saudi oil tankers and two other vessels in the Strait of Hormuz.
Houthi drone attacks 'show new level of sophistication' - Drone attacks on a Saudi oil pipeline west of Riyadh on Tuesday have revealed an apparent significant leap in the capabilities of the Ansar Allah fighting group, otherwise known as theHouthis. The Aramco East-West pipeline, stretching across the country to the port and oil terminal at Yenbu, was damaged in two places as pumping stations were hit.The attacks caused minor damage but alarmed an international community already rattled by the sharp downturn in relations between Iran and the United States.Information on the attacks is scarce, posing more questions than providing answers. Drones have been increasingly used by the Houthis in operations against the Saudi-UAE-led coalition. In July 2018 a drone exploded at Abu Dhabi airport causing only minor damage but sending a message to the UAE that its economic interests were not invulnerable. In January 2019, a senior intelligence chief, along with several officers, were killed at the al-Anad air force base just outside Aden by a weaponised drone that exploded above the delegation. In March the Houthis released video footage of a drone flying past Saudi's al-Shuqaiq water treatment and power plant, 130km from the Yemeni border. It was not attacked but the warning was clear, with water being a vulnerable resource and many Middle Eastern countries relying heavily on desalination plants.
Saudi bombs kill Yemeni civilians, raising war tensions in Persian Gulf - The savage bombing of a civilian neighborhood in the heart of Yemen’s capital, Sana’a, on Thursday signals another escalation of the extreme war tensions provoked by US imperialism in the Persian Gulf. The airstrikes claimed the lives of at least six civilians, including four children, all of them members of the same family. The Yemeni Health Ministry put the number wounded at 71, including 27 children, 17 women and 27 men. Witnesses at the scene saw a crowd of men pulling bodies from a demolished apartment bloc, lifting the body of a lifeless child and that of a woman wrapped in a white shroud. The number killed is expected to rise given the severity of wounds caused by the bombing and as the inhabitants of Sana’a continue to dig through the rubble with their bare hands. Shortages of medicines and medical supplies resulting from the US-backed blockade of Yemen also hinder adequate treatment of the wounded. Saudi bombs and missiles fell on Sana’a’s densely populated residential neighborhoods in the early morning hours of Thursday, with the greatest destruction wrought at the intersection of Rabat and Rakas streets. “I know the street,” Yemeni journalist Afrah Nasser told Al Jazeera. “There are no military targets there. There is no excuse for the Saudi-led coalition. It was a deliberate and systematic bombardment attacking civilians.” The Saudi-led war on Yemen is now in its fifth year, launched after Houthi rebels drove out the corrupt government of President Abd Rabbu Mansour Hadi, a puppet of Riyadh and Washington, in 2014. It has created the worst humanitarian crisis on the planet in what was already the poorest country in the Arab world.
CIA Briefed Colleagues Of Khashoggi That Saudis Are Now Targeting Them - According to a 2015 directive issued by the Director of National Intelligence, the CIA has a legal "duty to warn" potential victims of threats such as murder, kidnapping or serious bodily harm. And now it appears the CIA has tipped off at least three individuals who were close to Khashoggi and who have since been fierce critics of crown prince Mohammed bin-Salman (MbS). A report issued Thursday in Time detailed that the CIA made the three former Khashoggi colleagues aware of ongoing threats by Saudi security services to them and their families, though the exact nature of the threats were not revealed. Since the report, at least one of those named have confirmed they were visited by western intelligence services. Time identified those who face "potential retaliation by Saudi Arabia" as follows: Three of those who were given security briefings in recent weeks––democracy advocates Iyad El-Baghdadi of Oslo, Norway; Omar Abdulaziz of Montreal, Canada; and a person in the U.S. who asked not to be named––were working closely with Khashoggi on politically sensitive media and human rights projects at the time of his killing inside a Saudi diplomatic facility in Turkey last October. The report said further the activists and journalists had emerged as fierce critics of MbS, and some of them are known as prominent voices in Arabic media, including the Palestinian-born Iyad El-Baghdadi. The Time report continued: Based on the security briefings, the advocates say they have been targeted because they have become especially vocal and influential critics of Saudi Crown Prince Mohammed bin Salman, accusing him of ordering Khashoggi’s murder as part of a broader crackdown on Saudi dissidents worldwide.
UN: Over 1 Million Palestinians in Gaza May Not Have Food in June - UNRWA warned today that unless it secures $60m in funding by June, its ability to continue providing food to more than one million Palestinian refugees in Gaza will be severely curtailed.In a statement the international organisation said: “At a time when Muslims around the world are observing the holy month of Ramadan, often characterised by the festive nature of its Iftars, in Gaza, more than half the population depends on food aid from the international community.” The statement stressed that unless UNRWA secures “at least an additional $60 million by June, their ability to continue providing food to more than one million Palestinian refugees in Gaza, including some 620,000 abject poor – those who cannot cover their basic food needs and who have to survive on $1.6 per day – and nearly 390,000 absolute poor – those who survive on about $3.5 per day – will be severely challenged.” UNRWA is funded almost entirely by voluntary contributions and financial support has been outpaced by the growth in needs. From fewer than 80,000 Palestine refugees receiving UNRWA social assistance in Gaza in the year 2000, there are today over one million people who need emergency food assistance without which they cannot get through their day.
Leaked Document Pokes Major Holes in Establishment Syria Narrative - Caitlin Johnstone -— “It is hard to overstate the significance of this revelation,” tweets former British MP George Galloway of a new report by the Working Group on Syria, Propaganda and Media (WGSPM). “The war-machine has now been caught red-handed in a staged chemical weapons attack for the purposes of deceiving our democracies into what could have turned into a full-scale war amongst the great-powers.”“An important #Douma #Syria ‘Assad chemical weapon attack’ development and yet more evidence to suggest the ‘attack’ was staged, as it’s now revealed that @OPCW suppressed expert engineers report that found the cylinders were likely not dropped from the air,” tweets former Scotland Yard detective and counterterrorism intelligence officer Charles Shoebridge.“The engineering assessment confirms our earlier conclusion,” the excellent Moon of Alabama blog writes. “The whole scene as depicted by ‘rebels’ and propaganda organs was staged. The more than 34 dead on the scene were murdered elsewhere under unknown circumstances.” The report has grabbed the attention of those who’ve expressed skepticism of establishment Syria narratives because it casts serious doubts on the official story we’ve been told to believe about an alleged chemical attack in Douma, Syria in April of last year. A document titled “Engineering Assessment of two cylinders observed at the Douma incident” has been leaked to the WGSPM which reveals that an engineering sub-team of the Organization for the Prohibition of Chemical Weapons (OPCW) fact-finding mission in Douma came to conclusions which differ wildly from the OPCW’s official findings on the Douma incident, yet we the public were never permitted to see this assessment. The assessment’s findings, which you can locate on pages five through eight of the document, put forward multiple hypothetical scenarios in which two gas cylinders could have wound up in the locations(Location 2 and Location 4) that they were photographed and video recorded as having been found after the alleged attack. The assessment concludes that “The dimensions, characteristics and appearance of the cylinders, and the surrounding scene of the incidents, were inconsistent with what would have been expected in the case of either cylinder being delivered from an aircraft. In each case the alternative hypothesis produced the only plausible explanation for observations at the scene.”
CONFIRMED: Chemical Weapons Assessment Contradicting Official Syria Narrative Is Authentic - Caitlin Johnstone -— The Organization for the Prohibition of Chemical Weapons (OPCW) has begun responding to queries by the press about a leaked document which contradicts official OPCW findings on an alleged chemical weapons attack last year in Douma, Syria. The prepared statement they’ve been using in response to these queries confirms the authenticity of the document. To recap, a few days ago the Working Group on Syria, Propaganda and Media (WGSPM) published adocument signed by a man named Ian Henderson, whose name is seen listed in expert leadership positions on OPCW documents from as far back as 1998 and as recently as 2018. It’s unknown who leaked the document and what other media organizations they may have tried to send it to.The report picks apart the extremely shaky physics and narratives of the official OPCW analysis on the gas cylinders allegedly dropped from Syrian government aircraft in the Douma attack, and concludes that “The dimensions, characteristics and appearance of the cylinders, and the surrounding scene of the incidents, were inconsistent with what would have been expected in the case of either cylinder being delivered from an aircraft,” saying instead that manual placement of the cylinders in the locations investigators found them in is “the only plausible explanation for observations at the scene.” To be clear, this means that according to the assessment signed by an OPCW-trained expert, the cylinders alleged to have dispensed poison gas which killed dozens of people in Douma did not arrive in the locations that they were alleged to have arrived at via aircraft dropped by the Syrian government, but via manual placement by people on the ground, where photographs were then taken and circulated around the world as evidence against the Syrian government which was used to justifyair strikes by the US, UK and France. There were swift military consequences meted out on what appears now to be a lie.
ISIS announces a ‘province’ in India - During the weekend, Amaq News Agency, the mouthpiece of the terrorist group Islamic State of Iraq and Syria (ISIS), announced it had established “Wilayah of Hind” – a “province” of its own – in the Kashmir Valley. The announcement also claimed that ISIS had inflicted casualties on Indian soldiers in Amshipora, a town in Shopian district of the state of Jammu and Kashmir (J&K). This came after a militant who had pledged allegiance to ISIS was killed in a clash with Indian security forces. The loss of territory by ISIS in Iraq and Syria led to hundreds of its cadres moving elsewhere – some on their own and others orchestrated by the nations that continue to support and arm them. ISIS claimed responsibility for the recent Easter Sunday bombings in Sri Lanka. But the announcement of “Wilayah of Hind” was something that was waiting to happen, with India’s lackadaisical handling of the ISIS issue, particularly in J&K, despite ominous signs that have been present for years.
How Turkey Defied the U.S. and Became a Killer Drone Power -FINDING ONESELF IN the crosshairs of a military drone is, for most people, not the most comforting situation. Yet at an air show last fall, tens of thousands of people had a different reaction. A military drone took off from a runway, and moments later it began transmitting its view to a giant screen on stage. The video from the drone was clear enough to pick out your own face among the crowd. It was exactly what the drone’s pilot, seated in a trailer not far from the stage, was seeing. The crowd was in the crosshairs, and you could see the data about the aircraft’s pitch, roll, and altitude. In the bottom right corner of the screen, the words “Bore Invalid” indicated the drone was currently unarmed. It’s the kind of video that, in a war zone, can end with a giant plume of smoke and the tattered remains of whatever the drone has just obliterated. Yet for this crowd, it was like catching a glimpse of themselves on the Jumbotron at a football game. When an announcer shouted out, “We see you, wave your hands!” they erupted in excitement. The event had all the trappings of a typical air show. Hundreds of thousands of people — from government officials to school children bussed in by the thousands — paraded around the tarmac. They posed for selfies alongside fighter jets and attack helicopters. A team of F-16s flew in close formation, leaving intricate patterns of red and white smoke in their wake. A nearly constant series of sonic booms made it difficult to talk. Massive speakers blared pulsing music. But there was something different about this air show: It wasn’t in America, the global pioneer of weaponized drones and the customary host of such pageants. It was in Turkey, just outside Istanbul. And the pilotless aircraft that delighted the crowd wasn’t made in America; it was manufactured by Turkey. The crowd was enthusiastic to be in its crosshairs because the spectacle signified that their homeland had taken its place among the most technologically advanced countries in the world.
500 Rolls-Royces, $20,000 haircuts, and a 1,788-room palace: Everything we know about the lavish life of the Sultan of Brunei, who sparked outrage after introducing a law punishing homosexuality with death --The Sultan of Brunei, Hassanal Bolkiah, was widely condemned in April for ushering in new laws to punish homosexuality with death by stoning as part of a move to align the country with Sharia law, a strict interpretation of Islam.After a huge backlash from celebrities and Western governments alike, the sultan backpedaled this week, promising that the punishment will not be enforced. Brunei will, however, keep the law on its statute books, the Sultan added.Before becoming an advocate for the strictest form of Islam, the 72-year-old sultan was once known for his lavish, liberal, and western lifestyle.At one point the richest man on the planet, worth as much as $40 billion, his exploits included reportedly racing Ferraris at midnight through Brunei's capital, commissioning a 1,788 room palace, and spending $20,000 to get his hair cut. Here's a look at the Sultan of Brunei's extravagant, fabulous life.
China will never surrender to external pressure: FM spokesperson - (Xinhua) -- China will never surrender to external pressure and has the resolve and capability to defend its legitimate rights and interests, Foreign Ministry spokesperson Geng Shuang said here Tuesday.Geng made the remarks at a press briefing in response to questions regarding China-U.S. trade frictions."China doesn't want a trade war, but we are not afraid of fighting one. If someone brings the war to our doorstep, we will fight to the end," he said.Geng also said China is by no means the party that had pulled back and broken its promise.U.S. President Donald Trump accused China of pulling back on some of the promises when a deal between the two countries was "95 percent" done.The negotiation is the process of discussion, and it is quite normal that the two sides hold different opinions during this process, said Geng, adding that before the negotiation is concluded and an agreement is reached, there is no such saying as "violating promises."He said the two sides reached multiple consensuses on economic and trade issues and released a joint communique in Washington in May last year. However, the U.S. side abandoned those consensuses in just a few days.The two sides also reached consensus on the value of Chinese purchases of U.S. goods last December, but the U.S. side deliberately raised the asking price in subsequent negotiations, said Geng, adding that China is by no means the "backtracking" side.
China Has a $3.65 Trillion War Chest to Counter U.S. Tariffs - Beijing’s main defense against trade-war fallout this year is more likely to come from the finance ministry than the central bank, no matter what President Donald Trump says. If tariffs begin to really hurt China’s growth this year, there’s plenty of direct fiscal firepower left to stoke the economy before the People’s Bank of China would have to cut interest rates, according to an analysis of government spending by Bloomberg. Data released Wednesday showed an across-the-board slowdown in April. Central and local authorities in China have at least 25.1 trillion yuan ($3.65 trillion) unspent in their budgets this year, data compiled using official budget plans show. That’s two trillion yuan more than the ammunition China had in the same period last year -- and about equivalent to the entire annual output of Germany. “Chinese leaders will be able to better utilize different kinds of policy tools than their U.S. counterparts if the trade war persists, and that’s where China’s confidence comes from,” said Serena Zhou, an economist at Mizuho Securities Asia Ltd in Hong Kong. “From monetary policy and fiscal policy to the dominant role of the state-owned enterprises, China’s control on the economy is obviously stronger than the U.S.,” she said. Indeed, PBOC Governor Yi Gang has spent the last year saying he wants to avoid a “flood” of stimulus, pushing back against expectations of benchmark interest-rate cuts as he seeks to curb market bubbles and keep a lid on debt growth. That said, economists from Morgan Stanley and China International Capital Corporation to Macquarie Securities expect further cuts to the proportion of deposits banks are forced to lock away, as authorities look to keep the credit taps flowing. The authorities have ramped up fiscal expenditure earlier this year than they usually do, with the most obvious front-loading coming in infrastructure-related areas such as transportation and environmental protection. Even so, more than two thirds of the total “augmented” budget -- the general public budget, the government fund budget and special government bonds together -- remains unused.
China throws trade war tariff exclusion lifelines that it thought it would never need - When officials in Beijing started consulting lawyers six months ago about protecting Chinese industries from potential tariffs on imports from the United States, they were not certain they would have to act on the advice. According to a source familiar with the consultations, senior officials within the government “really thought the tariffs would go away”. But then on Monday with China’s announcement of extra tariffs on US$60 billion in US imports there was a sign that a line had been crossed – for the first time the government offered a tariff exclusion process. “It is a sign that things are probably going to be going on a little bit longer from the top down than they thought,” the source said. The process is largely based on a similar programme in the US and allows tariff-affected firms in China to apply for an exclusion.The Chinese exclusions are a lifeline to key industries that Beijing wants to protect from the turmoil of the trade war. Given that importers must pay the extra duties themselves, offering exemptions to those that cannot afford the tariffs makes economic sense, according to analysts.
Trade Wars And Global Auto Recession Wreak Havoc On The Steel Industry - - The biggest steel companies in the world are bracing themselves for an ugly year, as the recession in the global auto market and continued trade wars pressure the industry. Start with Indian steel giant ArcelorMittal warned last Thursday that the market in Europe will be significantly weaker than expected. The company posted its lowest quarterly profit since 2016 as demand contracted and producers faced renewed headwinds from cheap imports. The company also lowered its forecast for demand outside of China. As Bloomberg notes, the gloomy sentiment for the industry this year stands at odds with two prior profitable years, driven by strong demand in all major markets and slowing exports from China. But now, the ongoing trade war and slowing global economy are threatening the industry.ArcelorMittal expects demand in Europe to contract by 1% this year, compared to earlier forecast of 1% growth. Regional lobby group Eurofer predicted earlier this year that demand would fall by 0.4%. There’s been one small sliver of good news, as ArcelorMittal projected demand will rise in China this year The company said Thursday: “Market conditions in the first quarter of 2019 have been challenging. Demand has generally been lackluster, reflecting softness in manufacturing activity and continued weakness in automotive.”Most steelmakers throughout Europe continue to face the headwinds of stagnating domestic demand, especially from automakers, while cheaper imports make their way into the continent. These headwinds are also making it difficult for steelmakers to pass on the higher price of iron ore, which is a key ingredient in steelmaking. Prices of iron ore have risen due to mine closures in Brazil.To be sure, the global auto recession has continued to wreak havoc, especially since auto products are usually the most profitable for steelmakers. This is especially true for Germany’s premium brands that demand high-quality metal. While the auto industry accounts for about 20% of total steel demand, car sales in Europe have declined for seven straight months through March and we noted earlier this month, that German auto registrations had fallen by 1.1%. Manufacturing outside of carmakers in Europe is also slowing. Germany narrowly avoided a recession in 2018, with Italy not far behind. Domestic demand is following and imports are compounding these challenges. The United States has been "very aggressive in shutting out foreign steel", but Europe has been slower to do the same. It has now put into place safeguard measures designed to cap flows, but the steel industry claims more needs to be done.
Global Hard Disk Drive Demand In Free-Fall - Nidec Corporation, a Japanese manufacturer that produces 85% of the world's motors inside hard disk drives (HDD), has warned in their latest financial presentation that HDD shipments will decline for the next several years, reported eTknix. Nidec slashed its forward guidance for 2019 HDD shipment forecast from 356 million drives to 309 million drives. Expects shipments in 2020 to sink even further, down to 290 million units. An HDD is a non-volatile memory hardware device that stores and retrieves data on a computer. The presentation noted the emergence of solid-state drives (SDD) in desktops and laptops, will lead to further declines in shipments well into the early 2020s. That is not just due to the global slowdown in electronics, but SSD has tremendous benefits over HDD including no moving parts and flash memory to store data. While desktop and laptop markets demand less HDD, Nidec expects to ship higher volumes to data centers this year. The decline in the PC market has been one of the most significant decreases YoY ever, with 289 million units shipped in 2013 and only 65 million expected in 2019. The presentation's figures show a further decline in 2020, down to just 46 million. Hard drive sales have been on the decline since 2013, and while HDD will still have adequate demand from data centers, Nidec is already looking elsewhere for potential new revenue streams. As hard drive sales and revenue wane, the Japanese motor manufacturer is expected to complete a restructuring to address new growth areas (repurposing its facilities to address key growth areas like automotive, robotics, and 5G), by the early 2020s.
Teenage Girl Kills Herself After Polling Her Friends on Instagram Went Wrong — A 16-year-old girl in Malaysia took her own life after sharing a poll on her Instagram account asking followers whether she should choose life or death, upon which 69 percent of respondents voted that she should die. According to MalayMail and The Guardian, the unnamed teen posted a poll on the photo-sharing app’s “Stories” with the message: “Really Important, Help Me Choose D/L”.When a majority of responders clicked on the “death” option, the young girl jumped to her death, claims Padawan district police chief Aidil Bolhassan. “As many as 69 percent of the teenager’s Instagram friends had supported the decision for her to kill herself via a voting poll which was uploaded at around 3pm yesterday.” The post came shortly after she posted a status update on Facebook that read “WANNA QUIT FUCKING LIFE I’M TIRED”—a not uncommon sentiment shared by teens on the social media platform that appears tragically ominous in retrospect. Lawyer Ramkarpal Singh, a lawyer and parliamentarian in the northwestern state of Penang, argued that those who voted “D” should be held to account for her suicide: “Would the girl still be alive today if the majority of netizens on her Instagram account discouraged her from taking her own life? Would she have heeded the advice of netizens to seek professional help had they done so?
National Assembly VP Detained and 55 Armed Forces Officers Expelled in Attempted Putsch Fallout in Venezuela - Venezuelan authorities have arrested National Assembly Vice President Edgar Zambrano, accusing him of conspiracy and treason for his role in the April 30 attempted military putsch. Zambrano was one of the first politicians on the scene to support self-proclaimed “Interim President” Juan Guaido and fugitive opposition leader Leopoldo Lopez in their call for a military uprising to oust the Maduro government.The Democratic Action lawmaker was detained around 18.30 Wednesday evening by the Bolivarian National Intelligence Services (SEBIN) upon leaving his party’s headquarters in La Florida district of Caracas.Following his alleged refusal to get out of his car, officers were forced to use a tow truck to take Zambrano to the Helicoide detention facility, where it is believed he continues to be held. Authorities claim he was leaving the party offices with over US $9,000 in his pocket. Zambrano had had his parliamentary immunity from prosecution revoked the day before by the National Constituent Assembly (ANC) following a Supreme Court ruling. Apart from treason and conspiracy, Zambrano is also charged with civil rebellion, usurpation of responsibilities, criminal association, public instigation to disobey the laws, and “continued hatred.”
Billions in dirty cash helped fuel Vancouver, B.C.’s housing boom - Vancouver penthouses, ski chalets at Whistler, and holiday retreats in the Gulf Islands are among the thousands of properties identified in a dirty-money probe that estimates more than $7 billion Canadian ($5 billion U.S.) was laundered through the western Canadian province of British Columbia last year. The startling findings from two reports released by the provincial government Thursday illustrate how a torrent of suspicious cash has fueled casinos, luxury car sales and real estate in the Pacific Coast region. “The amount of money being laundered in B.C. is more than anyone predicted,” Finance Minister Carole James told reporters Thursday. In real estate alone, an estimated C$5 billion may have been laundered last year in the province, equivalent to 4.6% of all transactions by value in that period, according to one of the reports. In the Vancouver region, where housing prices rose more than 70% in five years, “I certainly believe that money laundering played a part,” James said. Such a share of transactions is “sufficiently large to have an observable impact on real estate prices,” the report said. It estimated that dirty money pushed B.C. home prices 3.7% to 7.5% higher than they would be in the absence of laundering. A string of investigations commissioned by Premier John Horgan’s government have slowly been revealing in recent months how Vancouver and the surrounding area has become a hub for dirty money, tax evasion, and a place to park foreign cash of unknown origin — no questions asked.
A Cancer On Our Economy - Report Finds Over $7 Billion Laundered Through British Columbia In 2018 - It may have taken a while, but now that housing prices are starting to crash in Vancouver, BC legislators are finally starting to get wise to the fact that the province has been a hot bed for money laundering. It was an easy problem to ignore with prices on the way up, but on the way down - not so much.And so an independent report released on Thursday concluded that an astounding $7.4 billion was laundered in British Columbia in 2018, out of a total of $46.7 billion laundered across Canada throughout the same period. The report was published by an expert panel led by former B.C. deputy attorney general Maureen Maloney. Attorney General David Eby told a news conference Thursday:"Wealthy criminals and those attempting to evade taxes have had the run of our province for too long, to the point that they are now distorting our economy, hurting families looking for housing, and impacting those who have lost loved ones due to the opioid overdose (crisis)." The reports come after the government commissioned them to try and shed light on laundering by organized crime in BC’s real estate market. This follows last June’s report on dirty money in casinos, which we also wrote about just days ago.
Recessionary Forces- Global Air Freight Volume Plunges In A Sign Of Economic Stress -- Reuters's John Kemp warns global air freight volumes are falling across the world at "some of the fastest rates since the end the great recession" in an ominous sign that the global synchronized slowdown is gaining momentum. Kemp says various forms of freight rates (air, land, and or sea) have a much shorter lag than traditional macroeconomic statistics, which means they're a "good barometer of the economy's health." Air freight carries high-value cargo and reacts instantly to changes in demand, making it an excellent forward leading indicator for global economic activity. Kemp's Global Air Freight chartbook shows freight volumes are declining at major airports across the world, a sign that global manufacturing has yet to bottom (we also outlined this in a report on J.P.Morgan Global Manufacturing PMI continues to plunge).The first chart shows Hong Kong International Airport air freight volumes dropped 7% between February and April compared with the same period last year.London's Heathrow Airport reported volume declined 3% over the same period, and growth rates plunged to two-year lows.At Memphis International Airport, volume was up 1% in 1Q19, but that was down from a 5% growth rate in summer 2018. Memphis had 1% growth in domestic freight shipments, but international freight slipped 1%, which is consistent with U.S. importers pulling forward to beat deadlines for tariffs on Chinese goods.Last month, we reported CPB Netherlands Bureau for Economic Policy Analysis revealed world trade volume dropped 1.8% in the three months to January compared to the preceding three months. Specifically, TAC Indices, the premier provider of Air Cargo rates around the world, shows Hong Kong to North America air freight rate in Hong Kong dollars versus per kilogram collapsed -42% from November into early April (a total of 17 weeks of declines). The epicenter of the slowdown is concentrated on routes to and from Asia. Air freight volumes are also slowing to and from North America and to and from Europe.
Swarms Of AI-Piloted Drones May Soon Patrol Europe's Borders - Imagine you're hiking through the woods near a border. Suddenly, you hear a mechanical buzzing, like a gigantic bee. Two quadcopters have spotted you and swoop in for a closer look. Antennae on both drones and on a nearby autonomous ground vehicle pick up the radio frequencies coming from the cell phone in your pocket. They send the signals to a central server, which triangulates your exact location and feeds it back to the drones. The robots close in. Cameras and other sensors on the machines recognize you as human and try to ascertain your intentions. Are you a threat? Are you illegally crossing a border? Do you have a gun? Are you engaging in acts of terrorism or organized crime? The machines send video feeds to their human operator, a border guard in an office miles away, who checks the videos and decides that you are not a risk. The border guard pushes a button, and the robots disengage and continue on their patrol. This is not science fiction. The European Union is financing a project to develop drones piloted by artificial intelligence and designed to autonomously patrol Europe’s borders. The drones will operate in swarms, coordinating and corroborating information among fleets of quadcopters, small fixed-wing airplanes, ground vehicles, submarines, and boats. Developers of the project, known as Roborder, say the robots will be able to identify humans and independently decide whether they represent a threat. If they determine that you may have committed a crime, they will notify border police. . In Europe, two years after the height of the migration crisis that brought more than a million people to the continent, mostly from the Middle East and Africa, immigration remains a hot-button issue, even as the number of new arrivals has dropped. Political parties across the European Union are winning elections on anti-immigrant platforms and enacting increasingly restrictive border policies. Tech ethicists and privacy advocates worry that Roborder and projects like it outsource too much law enforcement work to nonhuman actors and could easily be weaponized against people in border areas.
Italian Prime Minister Fears Salvini Plotting To Topple Government -- When the League and the Five Star Movement finally agreed to form a government last year after months of faltering talks, many doubted that the shotgun marriage of two parties from opposite ends of the political spectrum - with little in common aside from being nominally 'anti-establishment' - would long endure.And to be sure, the fact that their union has even lasted this long is a testament to the frustration that many Italians felt toward the center-left and center-right parties in the aftermath of buffoonish antics of Silvio Berlusconi, Italy's longest serving post-war ruler, and the ineffectual reign of Matteo Renzi.But Matteo Salvini's confrontational approach to the Italian migrant crisis - including his controversial decisions to turn away boats loaded with refugees - has caused support for his right-wing, anti-immigrant League party to surge. At the same time, M5s, led by Salvini's deputy prime minister Luigi Di Maio, has grown increasingly antagonistic, most recently supporting the ouster of a key Salvini advisor over allegations of corruption. The growing rift, which has intensified as Salvini and Di Maio took shots at one another in the Italian press, also fueled speculation that Salvini might soon reach for the nuclear option: Calling another general election to try and capitalize on the League's soaring popularity to ditch M5S, and form a new conservative coalition, perhaps with the very same establishment figure that enabled Salvini's rise in the first place.According to Bloomberg, which cited several reports in the local press, Prime Minister Giuseppe Conte, who had no experience in government before being brought in as prime minister to lead the new 'government of change', suspects that Salvini might be plotting to topple the government.Adding to the pressure on Salvini, Berlusconi has been active in the press accusing Five Star of deliberately undermining Salvini despite everything the League leader has done to hold the coalition together.Support for Salvini has soared since the new government formally took power in June. But over the past week, he has suffered a series of defeats, first when Conte moved to oust Armando Siri, the League undersecretary and advisor, and again when plans for a private bailout of Italian lender Banca Carige after BlackRock pulled out. The Salvini-led coalition of nationalist MEPs vying for seats in the European Parliament is set to make big gains during elections later this month.
Facebook Gags Italian Populists Two Weeks Before EU Elections - Facebook has banned 23 major Italian pro-populist pages with a combined 2.5 million followers two weeks before the European elections, according to Italy's La Stampa. The majority of the bans were for supporters of the current coalition government; La Lega (The League), headed by Interior Minister Matteo Salvini, and the 5-star movement, M5S, led by Deputy Prime Minister Luigi Di Maio. Among them, the most popular Facebook page for La Lega was taken down, right as polls reveal massive support for the party. Facebook claims that the sites were spreading fake news, "hate speech," and "divisive content" about immigrants, vaccines and Jews, after left-wing "human rights" and environmentalist non-government organization (NGO) Avaaz issued a report on "inauthentic behavior" over Italian Facebook networks. "We thank Avaaz for sharing its research so we could investigate," said a Facebook spokesoperson. "We are committed to protecting the integrity of the EU elections and around the world. We have removed a series of false and duplicate accounts that violated our policies on the subject of authenticity, as well as several pages for violation of the policy on changing the name." “We have also taken action against some pages that have repeatedly spread misinformation. We will take further measures if we find other violations," added Facebook. In one example, some of the Facebook pages were sharing a video depicting migrants smashing a car, which was actually an amateur recording of a scene being filmed for an Italian drama, Mediterranea.
Angela Merkel Identifies U.S. as Global Rival That, Along With China and Russia, Europe Must Unite Against - German Chancellor Angela Merkel lumped in the United States with Europe’s other global adversaries on Wednesday, arguing that the countries on the continent need to band together against the challenges posed by Russia, China and the U.S. “There is no doubt that Europe needs to reposition itself in a changed world…. The old certainties of the postwar order no longer apply,” Merkel told the German media on Wednesday. “They [China, Russia and the U.S.] are forcing us, time and again, to find common positions. That is often difficult given our different interests. But we do get this done—think, for example, of our policy regarding the conflict in Ukraine,” Merkel added. “Our policies on Africa, too, now follow a common strategy, which a few years ago would have been unthinkable. So we keep putting one foot in front of the other. However, our political power is not yet commensurate with our economic strength.” The comments hinted at the fact that at least some European leaders no longer view the United States as primarily an ally of the European Union. Merkel, for example, pointed to the U.S. dominance of technology as a challenge for Europe. U.S. companies such as Google, Facebook and Amazon have long dominated global markets, and in some high-profile cases have gotten into long legal battles with the EU over antitrust and regulatory policy.
Sweden Reopens Investigation of Julian Assange for Rape, Complicating U.S. Extradition - SWEDEN’S PROSECUTION AUTHORITY reopened an investigation of Julian Assange for rape on Monday and will seek his extradition from Britain, the country’s deputy director of public prosecution, Eva-Marie Persson, told reporters in Stockholm. The Swedish request will force British authorities to decide whether to send the detained WikiLeaks founder to Sweden or the United States, or neither, at the end of his 50-week jail sentence. He is currently serving for violating bail conditions in 2012, when he took refuge in Ecuador’s London embassy after losing his final appeal against extradition to Sweden. “On 20 August 2010, a police report was made regarding a suspected rape in Enköping, Sweden on 17 August 2010. The alleged offender was reported as being the Australian citizen, JA, born 3 July 1971,” the prosecution authority said in a written explanation of the decision. “The courts in Sweden have, on several occasions during the preliminary investigation, considered the decision to detain JA in his absence, and on each occasion found there exists probable cause for JA to be suspected of rape.” At a news conference on Monday, Persson said, “After reviewing the preliminary investigation in its current state, my assessment is that there is still probable cause that Mr. Assange committed rape.” Elisabeth Massi Fritz, a lawyer for Assange’s unidentified Swedish accuser, said that her client welcomed the reopening of the investigation, despite the “great deal of hate” she has faced from supporters of the WikiLeaks founder who have cast doubt on her claims.
Britain’s Conservatives in fourth place in EU election poll, Farage leads (Reuters) - Theresa May’s Conservative Party has fallen into fourth place in a poll on voting intentions for the European elections, well behind Nigel Farage’s new Brexit Party which has more support than Britain’s traditionally two biggest parties combined. According to the latest Opinium poll for the Observer newspaper, Farage’s newly formed party is on 34% of the vote ahead of the May 23 election that is being held because Britain failed to leave the European Union as expected in March. The poll put Labour in second place on 21% while the prime minister’s Conservatives are back in fourth on 11%. The pro-EU Liberal Democrats, the most popular party to explicitly call for a second referendum to reverse Brexit, are on 12%. Britain’s two biggest parties endured a drubbing at the polls this month when voters expressed their frustration with the Brexit deadlock at local elections. Farage, whose former party UKIP is credited by many with forcing Britain’s 2016 referendum on EU membership, launched his new party in April, threatening to take on Britain’s political leaders who he accused of betraying the vote to leave. May has been forced to open talks with the opposition Labour Party to find a compromise on Brexit after lawmakers heavily rejected her EU withdrawal deal three times. Britain is now due to leave the bloc in October but with parliament split over the terms, it remains unclear how or whether it will.
UK PM May's party slumps to fifth place as pressure mounts for her to go (Reuters) - British Prime Minister Theresa May’s Conservatives have fallen to fifth place in an opinion poll ahead of the May 23 European parliamentary election as pressure grows for her to set a date for her own departure.Nigel Farage’s Brexit Party was in the lead, up four percentage points, on 34% while May’s Conservative Party had just 10%, the YouGov poll for the Times newspaper showed. The opposition Labour Party was down five points on 16%. Two parties which support staying in the EU, the Liberal Democrats and the Greens, were on 15% and 11% respectively. The collapse in support for the Conservative Party is piling pressure on May to set a date for her departure. Senior Conservatives want May to set out her plans this week.Nearly three years since the United Kingdom voted 52% to 48% to leave the European Union, there is still no agreement among British politicians about when, how or even if the divorce should take place. “The reason I am back today doing what I am doing is because frankly we’ve been betrayed by our career political class,” Farage told TalkRadio. “If the Brexit Party comes out on top in a couple of weeks time, we must have a place at the negotiating table with the government to help put together our strategy.”
May Aims to Reopen EU Brexit Talks to Win Corbyn’s Support Theresa May is promising to reopen Brexit talks with the European Union to try to breathe life back into negotiations with the opposition Labour Party and take the U.K. out of the bloc by the summer. The prime minister’s office said Sunday the government will explore with the EU this week how to rewrite the outline political agreement on future customs ties, even as a senior Labour official warned that the party’s members of Parliament wouldn’t back a deal without a second referendum. The EU has said it’s willing to make changes to the political declaration, the non-binding part of the Brexit deal that focuses on future ties. It has refused to reopen the divorce deal itself, which includes the controversial Irish border backstop. The U.K. government isn’t asking to renegotiate that part. The premier is under mounting pressure over her failure to complete the U.K.’s divorce from the 28-nation bloc, with a growing number of Conservative politicians calling on her to resign as the party’s popularity slumps in the polls. Many of them hate the fact that May asked Labour leader Jeremy Corbyn for help after Parliament voted three times to reject her Brexit deal with Brussels. A meeting is scheduled for Monday involving Labour officials and the senior government negotiating team -- including May’s de facto deputy David Lidington and her chief of staff Gavin Barwell. They are due to bring together all the work and proposals from the past month of talks, May’s officials said. There are significant obstacles to a deal, though May has indicated in recent weeks the two sides are not far apart on Labour’s key demands, particularly on protecting workers’ rights and the environment, and on close post-Brexit customs arrangements with the EU. The government is still likely to balk at the full customs union that Corbyn wants. Cabinet ministers including Work and Pensions Secretary Amber Rudd and Business Secretary Greg Clark are preparing to call on May to abandon the Labour talks. Meanwhile Labour has its own divisions. The party’s chief Brexit spokesman, Keir Starmer, and Deputy Leader Tom Watson both said a cross-party Brexit deal was unlikely to get through Parliament without a second referendum attached. “A significant number of Labour MPs, probably 120 if not 150, would not back a deal if it hasn’t got a confirmatory vote,” Starmer told the Guardian newspaper.
Keir Starmer: Brexit deal unlikely to pass without confirmatory poll --Keir Starmer has expressed doubts that any cross-party Brexit deal lacking a confirmatory referendum could pass parliament, warning up to 150 Labour MPs would reject an agreement that did not include one.The shadow Brexit secretary said he feared the party risked losing its remain voters after worse than expected losses in the local elections, but he warned Labour remainers tempted to vote for the Liberal Democrats or Change UK that only Jeremy Corbyn’s party could deliver a fresh referendum. n his first major interview since talks with the government began almost five weeks ago, Starmer:
- Suggested a referendum must be part of any package agreed with the government.
- Said Labour could call time on the cross-party talks within days if it became clear no new offer was forthcoming.
- Warned Theresa May would further damage the prospect of any deal if she set an imminent departure date from No 10.
- Said the option was “on the table” to face Nigel Farage or Tommy Robinson in an EU elections debate.
Starmer, a human rights lawyer for 20 years, is to be the key face of Labour’s EU elections campaign, which will be framed as a battle of values. He said the poll on 23 May would be a fight Labour “cannot sit out” for tolerance and internationalism against populists such as Farage and Robinson.
Ditch the talks with Labour! Ministers urge May to halt Brexit negotiations to save the Tory party Ministers will today urge Theresa May to pull the plug on Brexit talks with Labour, amid fears a compromise deal could destroy the party. The Prime Minister is set to come under intense pressure at a Cabinet meeting this morning to abandon talks with Jeremy Corbyn, which have dragged on for six weeks without any sign of a breakthrough. Ministers, led by Mrs May’s deputy David Lidington, held fresh talks with their Labour counterparts last night in the hope of finding an acceptable compromise. But senior figures on both sides said the compromises involved were likely to prove unacceptable. One minister said: ‘Talking to Corbyn is killing us with the party in the country. It’s time to put the whole thing out of its misery.’ Labour is also split on the issue and Mr Corbyn told a fractious meeting of his MPs last night: ‘The Government’s red lines have not changed and the idea that Tory MPs are going to come round any time soon to accept the deal is fanciful.’ One Tory source with knowledge of the talks said Mr Corbyn appeared open to the possibility of a deal, but was being held back by pressure within his party to secure a second referendum. Foreign Secretary Jeremy Hunt yesterday said the second referendum demanded by Labour’s lead negotiator Sir Keir Starmer would amount to a ‘betrayal’ of the 2016 referendum.
Tony Blair says Labour ‘trying to face both ways’ on Brexit Tony Blair has criticised Labour’s handling of the Brexit process, saying “trying to keep both sides happy is not possible”. The former prime minister told an audience in London on Monday evening that although he would be voting for the party on 23 May, “it would’ve been better if we’d been able to fight it in a clearer way”. He encouraged remainers to “vote for one of the other anti-Brexit parties” if they cannot bring themselves to vote for Labour. The party’s current stated policy is that it would support a second referendum under certain circumstances. Earlier on Monday, the deputy leader, Tom Watson, insisted Labour stood for “remain and reform” and said it seemed inevitable that a confirmatory referendum would be needed for the party’s MPs to agree to any Brexit deal. On Sunday, the shadow Brexit secretary, Sir Keir Starmer, expressed doubts that a Brexit deal could pass parliament if it did not include a confirmatory referendum, warning that up to 150 Labour MPs would reject an agreement that lacked one. On Monday night, Blair also threw his weight behind holding another vote. He told the event hosted by the Guardian at the Barbican centre that while Labour were right to accept the result of the EU referendum, another public poll in the event of unsatisfactory Brexit negotiations should have been party policy from the outset of talks. He predicted the European elections on 23 May would “not [be] good news for the Tories or Labour” and said that, while a no-deal Brexit was “very unlikely”, politics in Britain was “in a unique state of unpredictability”. Politicians had lost sight of the importance of discussing domestic issues such as cuts to funding for health services and police and the lack of opportunities for young people amid Brexit chaos, he said. “The great irony of Brexit is, the future of the National Health Service is decided in Westminster. The person who’s got the opportunity to do something about knife crime is Theresa May not Jean-Claude Juncker [the EU commission president],” he said. “Brexit’s distractive effect is almost as bad as the destructive effect.” Blair’s criticisms of indecisiveness extended to the Conservatives. “My view is that both the main parties have made the same mistake if you try and face both ways you end up pleasing no one,” he said. Ultimately though, Labour was an anti-Brexit party and the majority of its MEP candidates had “long credentials in fighting the case for Europe”.
Campaigners question timing of consultation on Northern Ireland fracking licence - An application for a licence to explore for shale gas in south west County Fermanagh has prompted questions and opposition among anti-fracking campaigners and local people. Tamboran Resources is seeking the petroleum licence to drill and frack in a 600km2 area near the border with the Irish Republic. The application was first submitted in September 2016 but an eight-week consultation was announced last week (7 May), more than two-and-a half years later. The announcement, by the Northern Ireland Department for the Economy (DfE), took campaigners by surprise. But opponents of the licence responded swiftly with a protest near Belcoo at the weekend. This is Tamboran’s second attempt to frack for shale gas in the area.It was last granted a petroleum licence in 2011 but saw community and political opposition to its plans to drill a borehole at a quarry near Belcoo. In September 2014, the licence expired before the company completed the first part of its work programme. In statements last week, Tamboran said it wanted to drill a single conventional borehole, to a depth of 1,500m, to collect rock samples from the Bundoran Formation gas reservoir. A second phase of the project could include drilling and fracking a shale gas well. Tamboran estimated the gas could be worth more than £20bn and could supply Northern Ireland for more than 50 years. The company said the project could create 3,000 long-term jobs and would result in a “substantial and generous community investment fund”. The campaign group, Belcoo Frack Free, responded: “Local people are outraged that a company which knows the strength of feeling about shale gas exploration has reapplied for a licence for this toxic industry. “This industry will never have the social goodwill to operate in Fermanagh, no matter how many bribes and lures they offer to attempt to do so. “The people of Belcoo and Fermanagh will do all we can to stop this endangerment to our health, wellbeing and environment.”
The risk of fascism in the UK is increasing by the day - Richard Murphy - I read the opinion polls and despair. How can 34% of people in this country think voting for Nigel Farage is an answer to their problems? The problems are inequality. And poor public services. And a lack of skills to supply the services we need. As well as climate change. And a preponderance of low paid work. And people want to vote for a man who has said nothing in this election campaign on these issues. But his past statements suggest he will make all those issues worse. And then there is Brexit. In 2016 he never discussed No Deal. WTO rules were not on the table. Switzerland and Norway were. So was Iceland. But the WTO? Never. And yet he now claims that the WTO is what people voted for, when they did not. And people believe him. How bad do the main parties have to be for this to happen? Very bad indeed, quite obviously. And they are. It is very hard to find a remaining reason for the Conservative Party now. Its One Nation element is forgotten. The Brexit Party is the ERG in disguise. May might well be its last elected Prime Minister. And Labour. I could be both angry and weep for its failure. As Corbyn dithers - and he does despite all Corbynite denial - the party becomes ever more irrelevant as people lose faith in its ability to deliver for them. I don’t blame them. How can they know what the party will deliver when it, and its leader, will not say?
Theresa May To Bring Back Brexit Deal For 4th Vote Next Month -- The Tories are headed for what looks to be one of the most embarrassing electoral showings in recent memory during May's EU Parliament elections, even though they technically shouldn't matter since the UK is still - at least on paper - supposed to leave the EU at some point in the hopefully not-too-distant future. But the broader political implications are clear. Theresa May's mismanagement of the Brexit process has triggered a backlash that will affect her entire party, and with Nigel Farage's new Brexit Party surging in the polls, frustrated Tories are once again imploring their PM to step aside and let the party find a new leader to drive the UK over the Brexit cliff. The latest flurry of reports suggest that May will step aside this summer - possibly as soon as late next month - but not before giving her old Brexit withdrawal agreement one last try in the Commons. The next vote now has a date: June 3. Which just so happens to coincide with President Trump's upcoming state visit. With the country distracted, the Tories reeling from a bruising EU Parliamentary vote, and appetite for more Brexit can-kicking non-existent, perhaps May will finally be able to push her widely hated deal through. Presumably @theresa_may’s calculation in bringing back her Brexit deal for a vote in week of 3 June is that her party’s wipeout in the EU elections, likely to be announced a week earlier, will have so terrified her MPs that right at the last they will back her and her… Withdrawal Agreement. The much more likely scenario however, according to senior Tories, is that her MPs will reject her deal and reject her as their leader - and they will throw her out of Downing Street. So I would say she is taking a gamble. But truthfully she is not. She... has run out of road and is now totally at the mercy of her MPs. — Robert Peston (@Peston) May 14, 2019 Though, if the last three votes are any indication about how the next one might turn out, the odds are stacked against her. Even the third vote still failed by 58 votes.
Theresa May faces another catastrophic three-digit defeat on her Brexit deal, claim Brexiteer Tories - BREXITEER Tory MPs claim Theresa May is on course for another catastrophic three figure defeat on her EU deal. Losing the new make or break Commons showdown - set for two weeks time - would be the PM’s fourth drubbing a row and end her Premiership..One senior Eurosceptic Tory MP claimed “dozens” like him who had reluctantly backed Mrs May’s agreement with Brussels in earlier votes now plan to switch back again, as anger boils over about her decision to try to do a deal with Labour. They were lead by ex-Tory leader Iain Duncan Smith, who told The Sun: “It’s over for this deal, I’m not going to support it and I’m not the only one. “The Government has no intention of trying to replace the backstop, in which case all reason to vote for this deal has gone.” At the same time, Leave-backing Labour MPs are also refusing to bail out the PM, with one telling The Sun that the PM “will be lucky to get 10 of us”. And the DUP also dug in with its continuing refusal, with the Ulster unionists’ Brexit spokesman Sammy Wilson accusing the Government of having “broken its arrangement with us”. But Jeremy Corbyn threw Mrs May a potential lifeline. While his spokesman said there would be no deal with Mrs May unless she bows to his demands for a customs union, he suggested Labour may abstain on the first vote on the Withdrawal Agreement Bill. That would allow it to be amended during its later stages if a majority of MPs can be built for any alternative Brexit option. The first three attempts to push the deal through failed by 230 votes, 149 votes and 58 votes. As the Government began to build a case to back Mrs May again, Brexit Secretary Steve Barclay warned rebel Tory MPs that shooting down her exit deal again will rip up two years of Brussels as it would mean “the Barnier deal is dead”. Other Cabinet ministers also weighed in with doomsday warnings for rebel Tory MPs. International Trade Secretary Liam Fox said the bill’s defeat will create “a path that inexorably takes us to either the potential of revocation of Article 50 or leaving without a deal”.
May to be told by 1922 Executive this morning: give us your leaving date or you’ll be gone in a month - Theresa May will be forced from office within a month if she does not set out a timetable for her departure when she meets senior backbench MPs on Thursday.The Prime Minister will be told she faces the prospect of a confidence vote of her own MPs on June 12 if she does not agree to quit before the summer.Mrs May has already promised to stand down once Britain has formally left the EU, but the executive of the 1922 Committee of backbench Tories will tell her on Thursday that she must agree to resign regardless of whether her Brexit deal is passed by Parliament.There is growing unease within Tory ranks about the swift rise of Nigel Farage’s Brexit Party, which now has more than 100,000 paying supporters and is expected to dominate next week’s European elections.Nick Timothy, Mrs May's former joint chief of staff, says it is "beyond time" for the Prime Minister "to accept that the game is up". In order to avoid a "national humiliation" and save the Conservative Party, he says she must "do her duty and stand aside" rather than clinging to power any longer.Writing for The Telegraph, the former minister Owen Paterson warns that the Conservative Party could be “annihilated” at the next general election if Britain does not make a clean break from the EU this year.He accuses the current leadership of being “smug and complacent” about the Party’s future and cites examples of once-great parties which became extinct after taking their supporters for granted.The Telegraph has learnt that Brandon Lewis, the Conservative Party Chairman, has told Tory MEP candidates they have no chance of winning in the May 23 poll. Sir Graham Brady, the chairman of the 1922 Committee, will meet Mrs May on Thursday along with other members of the 18-strong executive for talks about her future.
May loyalists threaten to oust the 1922 grandees if they try to topple her -LOYALIST Tory MPs have threatened to oust their own backbench grandees if they press ahead with a new coup against Theresa May.The parliamentary Conservative party was on the brink of outright civil war Wednesday night ahead of the PM’s showdown meeting with senior MPs Thursday morning.Its 1922 committee executive, lead by Sir Graham Brady, has demanded their embattled leader lays out a timetable to resign with or without a Brexit in place when they grill her at 11.30am.If the PM refuses, Brexiteers on it have pledged to try again to change party rules to allow an immediate confidence vote to oust her by ripping up a 12 month grace period after December’s failed coup. But in an extraordinary new turn in the long running saga, May loyalists have also vowed to then force a vote of confidence in the 17-strong executive itself.One senior Tory MP who wants Mrs May to stay on told The Sun Wednesday night: “If the executive goes ahead with a rule change now, it will be the height of irresponsibility at this time of national crisis as well as destabilise the leadership forever more.“So we will call a confidence vote in them, which all colleagues are within their full rights to do.”The PM is expected to refuse Sir Graham’s timetable request on Thursday, and insist she has already pledged to step down as soon as her Brexit deal is passed. But in a major olive branch, she also this week pledged to hold a final showdown vote on it by introducing the landmark Withdrawal Agreement Bill in two weeks time.
May to step down after fourth EU vote - British prime minister Theresa May has agreed to step down at some point after her fourth attempt to pass an EU exit deal in June, no matter what the outcome. Her decision was revealed on Thursday (16 May) by a senior Conservative MP, Graham Brady, the chairman of the so-called 1922 Committee, an influential backbench group within the party. "We have agreed to meet to decide the timetable for the election of a new leader of the Conservative Party as soon as the second reading has occurred and that will take place regardless of what the vote is on the second reading - whether it passes or whether it fails," Brady said, following what he called a "very frank" 90-minute long discussion with the British leader. British MPs are to hold two days of debate on the exit deal on 3 June, shortly after the European Parliament elections, with a vote likely on 5 June. The deal has already been defeated three times on grounds that provisions related to the Irish border could see Britain stuck in a customs union with the EU for an indefinite amount of time. The first defeat, in January, by 230 votes, was the largest ever for a government motion in British history. The third defeat, in March, saw the bill fail by just 58 votes. It prompted May to hold talks with the opposition Labour party, but these are expected to break up in the coming days without a new compromise due to Labour's red lines, which include staying in the customs union in any case.
BoJo’s charm offensive: Would-be PM launches his bid for the top job by meeting 200 fellow Tory MPs and warning them he is the only one who can save Britain from Farage and Corbyn Boris Johnson has already met 200 Conservative MPs during a lengthy charm offensive to get him on the Tory leadership ballot, it emerged last night. He has warned them that the party faces an 'existential' crisis – and that only he can save them from both Nigel Farage and Jeremy Corbyn. Yesterday the former foreign secretary formally declared that he wants to succeed Theresa May as Prime Minister. But his campaign for the top job has been in full swing for months. Sources say he has hosted around 200 MPs, over half the Parliamentary party, in an attempt to rally them to his cause. MPs have been meeting him in 15-minute slots in his fourth-floor office in Portcullis House. A whiteboard on the wall lists all the slots for the day. While other candidates have been parading their credentials with media appearances, Mr Johnson has barely been seen in public while he focuses on winning over MPs. Before the leadership vote is put to the Tory membership, Mr Johnson must first reach the final two after a secret ballot of MPs – meaning he must win his colleagues over to succeed. After David Cameron quit in 2016, Mr Johnson was a strong favourite to succeed him but pulled out after his Brexiteer colleague Michael Gove withdrew support at the last minute. MPs who have met Mr Johnson in recent weeks say his new pitch is a simple one. 'He says the Tory Party is in an existential crisis,' said one. 'He says he can see off Farage and beat Corbyn in any election when it comes.' He argues that he can deliver Brexit but is also focused on domestic policy and keen to stress his credentials as a One Nation Tory, MPs say.
Brexit: Talks between Tories and Labour end with no deal -- Talks between Labour and the government aimed at breaking the Brexit impasse have ended without an agreement. Jeremy Corbyn said the discussions had "gone as far as they can", blaming what he called the government's "increasing weakness and instability". Theresa May said the lack of a "common position" within Labour over a further referendum had made talks "difficult". The prime minister said she would now consider putting options to MPs on Brexit that may "command a majority". But Irish Prime Minister Leo Varadkar called the end of the talks a "very negative development". Mrs May has promised to set a timetable for leaving Downing Street following a House of Commons vote on her EU Withdrawal Agreement Bill in the week beginning 3 June. Brexit had been due to take place on 29 March - but after MPs voted down the deal Mrs May had negotiated with the bloc three times, the EU gave the UK an extension until 31 October. This prompted negotiations between the Conservatives and Labour to see if the parties could come to a Brexit agreement, despite differences over issues including membership of a customs union and a further referendum.
‘Cruel and inhumane’: Home Office threatens woman in coma with forcible deportation - The Home Office has been accused of being “cruel and insensitive” after a woman was threatened with deportation despite being in a coma in hospital. Bhavani Espathi, 31, who was in a vegetative state for a week and a half after undergoing a major operation, received a letter stating that her application for leave to remain had been refused and that she was liable to be forcibly removed. The Indian national’s fiance, Martin Mangler, 33, appealed against the decision while she was still unconscious, providing medical letters from her doctors stating that her life would be at risk if she were to travel. But the Home Office said that while the medical treatment she was receiving was “unlikely” to be available to the same standard in India, this did not entitle her to remain in the UK – and that she could receive “palliative care” in her home country if the appropriate treatment wasn’t available there. Lawyers and politicians said the case demonstrated how UK immigration rules were permitting the government to “send people to their death abroad” as part of the hostile environment. It marks the latest in a string of cases in which Home Office decisions to refuse immigration applications have been met with outrage from campaigners. Ms Espathi, who came to the UK on a study visa in 2010 and proceeded to work in the arts industry before she fell ill with Crohn’s disease, said she would be “risking her life” if she had to leave the country. “I’m trying to be rational. I don’t think they would put me on a plane if they actually saw me. I have tubes all over me. But then I also read stories about them coming to get people with no time to get legal representation.”
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