Dallas Fed President Concerned Cutting Rates Will Result In A Painful Bubble - Several years after former Dallas Fed president Dick Fisher repeatedly warned that the Fed's continued "unconventional" policies (which in the past decade have become boringly conventional) and meant simply to push stocks higher (as the Fed "gamble" replaced the Fed "put") would result in ruin, his replacement former Goldman banker Robert Kaplan, has picked up where his predecessor left off, and in an essay released on Monday by the Dallas Fed, Kaplan said that "monetary accommodation is not “free.” I am concerned that adding monetary stimulus, at this juncture, would contribute to a build-up of excesses and imbalances in the economy which may ultimately prove to be difficult and painful to manage." For those unfamiliar, "excess and imbalances" is central banker speak for "bubble", and is traditionally frowned upon in polite "economists who have never held a job in the real world" circles as it reminds the Fed that every time it forceefully intervenes in the market the result is disaster.Kaplan is weary because his base case is for "solid" economic growth this year and for the labor market to remain at or past full employment - conditions that in no way require a rate cut at this moment, a moment incidentally where the S&P is trading at all time highs. "In addition, financial conditions - the cost and availability of credit - are particularly robust by historical standards,” he said, hence the confusion: with the rest of the Fed seeing a similar benign environment, why the need for a rate cut now, especially since inflation for the common man is well higher than that hedonically adjusted and calculated by the Fed as discussed recently.Kaplan’s cautious tone contrasts with expectations in the financial markets that a July rate decrease by the Fed is all but a done deal, which of course makes perfect sense - the only winner from a rate cut, NIRP and QE is, drumroll, financial markets. Which is why investors, having pushed Powell to "throw in the towel", now see an almost 100% probability of a cut next month, with some even looking for a half-percentage-point drop. Some, such as another former Goldman banker, Minneapolis President Neel Kashkari, who last week came out publicly for a 50 basis point move, in what is a clear move at replacing Powell once Trump demotes or fires the Fed chair.
Trump says he has the power to remove Federal Reserve chairman 'if I wanted to' - President Trump on Monday said he has the power to fire Federal Reserve Chairman Jerome Powell said he has no intention to do so. In an exclusive interview with The Hill, Trump said Powell is "incorrect" that he is entitled to serving a four-year term that expires in 2022. Asked if he thinks he has the power to remove Powell, Trump said "If I wanted to, but I have no plans to do anything.” Experts have questioned that assertion. The president has been fiercely critical of Powell's stewardship of the central bank, accusing it of hindering economic growth through rate hikes. His constant critiques have roiled observers of the Fed, which is meant to be nonpartisan. The Fed has hiked interest rates nine times since 2015, seven since 2017 including four times under Powell, who took over as chairman in 2018 after being nominated by Trump. "You have to understand we’re competing against other parts of the world and they’re manipulators," Trump said. "They manipulate their currency. And I don’t want to do that, but I want to be treated fairly. And we have to be given a level playing field." Trump repeated his claim that had Powell refrained from raising rates and using quantitative tightening, gross domestic product and the stock market would both be exceeding their current numbers. He called the Fed an "artificial barrier" to improved economic numbers.
The White House is said to be vetting Judy Shelton for a seat on the Fed board. She told us what she would bring to a central bank whose policies she has long criticized - The White House is said to be vetting Judy Shelton, a former campaign adviser to President Donald Trump, for a top policymaking position at the Federal Reserve.The New York Times and Bloomberg reported in May that Shelton is being vetted for the position, and she told Markets Insider she has been contacted by the Office of Presidential Personnel.In an interview with Markets Insider, Shelton laid out what she would bring to a central bank whose policies she has long been critical of.The conservative economist said she thought it would be "superficial" to answer yes or no to whether the central bank was independent, said she wanted a zero-percent inflation target, and expressed support for the president and his policies. Shelton currently serves as the US director for the European Bank for Reconstruction and Development. This interview took place on June 6, 2019. You can read the full interview transcript, edited for brevity and clarity, below. You can click here for articles on the following points from the conversation:
- Here's what Trump's potential Federal Reserve pick says she'd bring to the central bank
- Trump's potential Federal Reserve nominee wants a 0% inflation target
- The latest potential Fed pick, a former Trump campaign adviser, says it would be 'superficial' for her to say whether the central bank is independent
PCE Price Index: May Headline & Core - The BEA's Personal Income and Outlays report for May was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.16% month-over-month (MoM) and is up 1.52% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.19% MoM and 1.60% YoY. Core PCE is below the Fed's 2% target rate. The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017 and 2019. The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target. The index data is shown to two decimal points to highlight the change more accurately. It may seem trivial to focus such detail on numbers that will be revised again next month (the three previous months are subject to revision and the annual revision reaches back three years). But core PCE is such a key measure of inflation for the Federal Reserve that precision seems warranted. For a long-term perspective, here are the same two metrics spanning five decades.
Chicago Fed "Index points to a pickup in economic growth in May" - From the Chicago Fed: Index points to a pickup in economic growth in May Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to –0.05 in May from –0.48 in April. Three of the four broad categories of indicators that make up the index increased from April, but only one of the four categories made a positive contribution to the index in May. The index’s three-month moving average, CFNAI-MA3, moved up to –0.17 in May from –0.37 in April. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. This suggests economic activity was below the historical trend in May (using the three-month average). According to the Chicago Fed: The index is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories. ... A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.
US economy grew at a solid 3.1% rate in the first quarter - The U.S. economy grew at a healthy 3.1% rate in the first three months of this year, but signs are mounting that growth has slowed sharply in the current quarter amid slower global growth and a confidence-shaking trade battle between the United States and China. The Commerce Department reports that the gain in the gross domestic product, the broadest measure of economic health, was unchanged from a month ago. However, the components of growth shifted slightly with stronger business investment and consumer spending slowing more than previously estimated. Economists believe growth has slowed sharply in the current April-June quarter to around 2%. They expect similar meagre gains for the rest of the year, a forecast that runs counter to the Trump administration’s expectations for strong growth above 3%.
Q1 GDP Third Estimate: Real GDP at 3.1%, As Expected - The Third Estimate for Q1 GDP, to one decimal, came in at 3.1% (3.13% to two decimal places), an increase from 2.2% for the Q4 Third Estimate. Investing.com had a consensus of 3.1%.Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release:Real gross domestic product (GDP) increased at an annual rate of 3.1 percent in the first quarter of 2019 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2018, real GDP increased 2.2 percent.The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was also 3.1 percent. Upward revisions to nonresidential fixed investment, exports, state and local government spending, and residential fixed investment were offset by downward revisions to personal consumption expenditures (PCE) and inventory investment and an upward revision to imports (see "Updates to GDP" on page 2). [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 2.25%. Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 13.4% below trend. A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Four of the eleven recessions over this timeframe have begun at a higher level of current real YoY GDP. In summary, the Q1 GDP Third Estimate of 3.1% was as expected and higher than the Q4 Third Estimate.
Q1 GDP Revised Lower As Personal Spending Tumbles, But Core PCE Heats Up - After sizzling ever higher for the first two readings of Q1 GDP, the 2nd and final (for now) revision of Q1 GDP came in a hair weaker than expected, dropping from 3.2% to 3.1% (3.08% to be precise), below the 3.2% consensus estimate, if still well above the 2.2% annualized GDP print in Q4 2018. The unrevised GDP growth rate reflected upward revisions to business investment, exports, and state and local government spending. These were offset by downward revisions to consumer spending and inventory investment and an upward revision to imports. The key driver behind the downward revision was mostly the sharp drop in personal consumption/spending, which was revised sharply lower from 0.90% to 0.62%, and far below the 1.7% print in Q4. On an annualized basis, personal consumption dropped to 0.9% from 1.3% as of the 2nd revision, and below the 1.3% expected. This drop however was offset by a rebound in Fixed Investment, which was revised higher from 0.18% in the prior revision to 0.53%. Nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 4.4% annualized in 1Q after rising 5.4% prior quarter. The other components of GDP were generally in line with the prior revision:
- Private Inventories came at 0.55%, vs 0.60% in the 2nd revision
- Net exports was revised modestly lower from 0.97% to 0.90%
- Government consumption was revised higher from 0.42% to 0.48%.
The components summarized visually: However, offsetting the modest drop in GDP, was the increase in the Fed's preferred inflationary measures, as the GDP price index rose 0.9% in 1Q after rising 1.7% prior quarter; it rose from 0.8% in the last revision; meanwhile, core PCE q/q rose 1.2% in 1Q after rising 1.8% prior quarter, but more importantly it printed above the 1.0% expected, which was also the growth reported in the prior revision. In other news, Q1 Corporate Profits Fell 2.6% Q/q, after falling 0.4% in prior quarter.
Q2 GDP Forecasts: Around 1.5% -- From Goldman Sachs: The May core PCE price index increased 0.19% month-over-month, close to expectations, but the year-over-year exceeded consensus by a tenth reflecting the price revisions in yesterday’s GDP report. Personal spending increased by 0.4% and was revised higher in April, and the personal saving rate remained flat at 6.1%. We left our Q2 GDP tracking estimate unchanged at +1.5% (qoq ar). [June 28 estimate] From the NY Fed Nowcasting Report: The New York Fed Staff Nowcast stands at 1.3% for 2019:Q2 and 1.2% for 2019:Q3. [June 28 estimate]. And from the Altanta Fed: GDPNow:The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2019 is 1.5 percent on June 28, down from 1.9 percent on June 26. After this morning’s personal income and outlays release from the U.S. Bureau of Economic Analysis (BEA), the nowcast of second-quarter real personal consumption expenditures growth decreased from 3.9 percent to 3.7 percent. [June 28 estimate]CR Note: These estimates suggest real GDP growth will be around 1.5% annualized in Q2.
Latest Shipping Data Shows An Economy On The Verge Of Recession - Is the US "Schrodinger" economy on the verge of a boom or a recession? That is the question investors are increasingly asking, prompted by the record disconnect between record high stock prices and 10Y yields on the verge of dropping below 2%. Over the weekend, two major banks shared their perspectives on the topic, with Deutsche Bank framing the issue in the terms of quantum superposition, whereby the Fed's intervention collapse the wave function of the US economy, and defines it as either in recession or growth, while JPMorgan was more pragmatic summarizing the divergence as one of growing dovish expectations and imbalanced positioning, and warning that "this is a major risk for equity markets going forward: if central banks fail to validate over the coming months market expectations of universal rate cuts, equities could be hit not only by a potential selloff in bonds that would mechanically make investors more OW in equities, but also by a potential increase in cash allocations as investors cover their currently extreme cash UW."JPMorgan also pointed out that only one scenario, that of a pre-emptive Fed that is set to provide insurance similar to the 1995 and 1998 episodes, "is positive for equities" explaining that "preemptive means cutting rates when growth indicators are still good rather than waiting for growth indicators to weaken."Which in turn brings up what JPMorgan believes is the most important question following this week’s FOMC meeting: "If the Fed is truly committed to preemptive rate cuts in order to provide insurance why did it not cut its policy rate this week?"On Monday morning, Morgan Stanley's increasingly bearish chief equity strategist, Michael Wilson, also waded into the debate, this time from the position of economic fundamentals, with a decidedly pessimistic take, cautioning that "the casefor material upside is getting harder" and adding that his "view remains that the US economy is experiencing a material slowdown after running too hot last year and this slowdown is now manifesting itself in poor earnings growth and deteriorating economic conditions." Echoing JPMorgan, Wilson writes that "if the Fed is cutting rates because it's truly the end of the cycle, rather than the Fed simply taking out insurance against that outcome, it has much different implications for equity markets."His conclusion: "The evidence is building that it's more the fo rmer than the latter."
Why Interest Rates Don't Need To Rise Much To Cause Recessions Now - As the probability of a U.S. recession in the next year grows rapidly (it may be as high as 64%), many bullish economists and financial commentators are unsurprisingly downplaying this risk. One of their main arguments is that interest rates have not been hiked aggressively enough to tip the economy over into a recession. While it is true that U.S. interest rates are still very low by historic standards, the reality is that rates do not have to rise anywhere near as high as they did in the past to cause recessions due to America’s debt load that has grown dramatically over the past several decades. Since the early-1980s, total U.S. debt – both public and private – has been growing at a faster rate than the underlying economy, as measured by the nominal GDP: As a result of debt growing faster than our underlying economy, America’s debt as a percent of GDP soared from just over 150% in the early-1980s to approximately 350% in recent years. This higher debt burden is the reason why our economy simply cannot handle interest rates as high as they were before 2008. Particularly worrisome is the fact that U.S. federal debt is at a record of over 100% of the GDP (vs. 62% before the Great Recession), which will make it a much greater challenge to keep the economy afloat in the coming recession: As the Fed Funds rate chart below shows, the interest rate threshold necessary to trigger recessions (recessions are designated by the gray bars) keeps falling as our debt burden increases:
North Korea’s Kim Jong Un received an ‘excellent’ letter from Trump: State media - The White House confirmed Sunday that President Donald Trump sent a letter to North Korean dictator Kim Jong Un. “A letter was sent by President Trump and correspondence between the two leaders has been ongoing,” White House press secretary Sarah Huckabee Sanders said. North Korean state media first reported that Kim received a personal letter from Trump. Kim said the letter “is of excellent content,” according to the Korean Central News Agency. Additional details about what was in the dispatch were not provided. “Kim Jong Un said that he would seriously contemplate the interesting content,” the state news agency reported. Secretary of State Mike Pompeo said the U.S. and North Korea were in a “better place” and expressed hope that working level talks with North Korea can begin. “I’m hopeful that this will provide a good foundation for us to begin to continue these important discussions with the North Koreans to denuclearize the peninsula,” Pompeo said.
Trump Invites Kim Jong Un to Meet Him at the DMZ This Weekend - Donald Trump said he’d cross into North Korea at the country’s border to meet Kim Jong Un this weekend as the U.S. president looks to restart stalled nuclear talks. “I will be in South Korea -- I let him know,” Trump told reporters in Osaka, Japan, after a tweet Saturday morning in which he invited Kim for a handshake. “We’ll see. If he’s there we’ll see each other for two minutes. That’s all we can, but that will be fine.” As he arrived in Seoul a few hours later, Trump told reporters he had heard back from North Korea, but didn’t elaborate. “We’re gonna see. They’re working things out right now,” Trump said at South Korea’s Blue House presidential palace. Asked at a news conference in Japan whether he’d step into North Korea at the border to meet Kim, Trump said “sure I would,” and that he’d have “no problem” with it. Trump is planning to visit the demilitarized zone between North and South Korea on Sunday. If Trump crosses the border, he’d be the first American president to ever step foot into the country. North Korean foreign ministry official Choe Son Hui said Trump’s invitation was “a very interesting suggestion, but we have not received an official proposal in this regard.” “I am of the view that if the DPRK-U.S. summit meetings take place on the division line, as is intended by President Trump, it would serve as another meaningful occasion in further deepening the personal relations between the two leaders and advancing the bilateral relations,” Choe said, as quoted by the official Korean Central News Agency.
Majority Of U.S. Citizens Would Approve Preventive Nuclear Strike On North Korea - The Korea War has not ended. It is the U.S. that rejects to sign a peace treaty. The continued state of war is the reason why North Korea acquired nuclear weapons and the means to deliver them. But could the U.S. be relied on even when a peace treaty is signed? Or is it inherently too bellicose to ever be trusted?When North Korea's leader Kim Jong Un will read this report, he will likely conclude that the later question must be answered in the affirmative: More than a third of Americans would support a preemptive nuclear strike on North Korea if that country tested a long-range missile capable of reaching the United States, new research has found, even if that preemptive strike killed a million civilians. The survey of 3,000 Americans was conducted by the Bulletin of the Atomic Scientists and British research firm YouGov, and asked people to consider a scenario in which North Korea had tested a long-range missile and the U.S. government was considering how to respond.The survey question is a bit weird as North Korea already tested a "long-range missile capable of reaching the United States". Fortunately not all Americans are brutes:Most did not want their government to launch a preemptive strike, but a large minority supported such a strike, whether by conventional or nuclear weapons. “For many of these hawks, support for an attack, even in a preventive war, does not significantly decrease when the story says that the United States would use nuclear weapons that are expected to kill 1 million North Korean civilians,” the report found. “As we have previously found, the U.S. public exhibits only limited aversion to nuclear weapons use and a shocking willingness to support the killing of enemy civilians.”
Survey: Americans Have Remarkably Ignorant Attitude Toward Nukes And North Korea - Caitlin Johnstone Half of the responders to an innovative new survey of 3,000 Americans conducted by the Bulletin of the Atomic Scientists and the British research firm YouGov reported that they would support a nuclear strike against North Korea if it tested a long-range missile capable of reaching the continental United States. A third said they’d actually prefer such a strike over other hypothetical responses.“For example, while ‘only’ 33 percent of the US public prefer a US preventive nuclear strike that would kill 15,000 North Koreans, 50 percent approve,” the report reads.The study found little change in preference for a preemptive nuclear strike whether the hypothetical scenario offered to respondents entailed the death of 15,000 North Korean civilians or one million. Preferences for a preemptive strike only dropped when the hypothetical scenario reduced the probability of success (meaning elimination of North Korea’s nuclear retaliatory capabilities) was reduced from ninety to fifty percent.The survey found a large knowledge deficit in responders regarding nuclear weapons, with a majority reporting an unrealistic amount of confidence in both the US military’s ability to eliminate all of North Korea’s nuclear arsenal in a preemptive strike and in its ability to shoot down North Korean missiles using current missile defense systems. This inaccurate perspective was significantly higher among Trump supporters. While the study found that a majority of Americans would prefer to de-escalate against North Korea if given the choice, a jarring number of them would be willing to use nuclear weapons at the drop of a hat, and believe it’s possible to do so at relatively little risk to Americans.
Trump Once Again Assails America’s Friends as He Opens Overseas Visit — President Trump plunged back into the world of international diplomacy on Friday with characteristic provocation, keeping some of America’s closest allies, including his hosts, off balance even as he sought advantage on an array of economic and security disputes with profound consequences. Mr. Trump opened a series of high-stakes meetings with world leaders gathered in Osaka, Japan, for an international summit meeting after calling into question the very foundation of the relationship between the United States and two of its most important friends, Japan and Germany, and lashing out at a third partner, India. The Japanese leaders hosting the meetings were still reeling Friday morning at the president’s attack on the mutual defense treaty that has been the bedrock between Washington and Tokyo for nearly seven decades. Before arriving in Osaka, Mr. Trump complained that under the treaty, Japan would not come to the aid of the United States if it were attacked and instead would “watch it on a Sony television.” German leaders have grown more accustomed to shrugging off Mr. Trump’s attacks on Berlin as a security freeloader taking advantage of America’s defense umbrella while India was left trying to manage the president’s complaints about its trade policies without provoking him into the sort of tariff war escalation he has engaged in with China. The choice of targets seemed directly tied to the president’s schedule of meetings on Friday. He was set to sit down with Prime Minister Shinzo Abe of Japan, the host of the annual Group of 20 gathering in Osaka, and then jointly with Mr. Abe and Prime Minister Narendra Modi of India. Then he was to meet separately with Mr. Modi. After that, he was scheduled to sit down with Chancellor Angela Merkel of Germany. By contrast, Mr. Trump said nothing critical before arriving in Osaka about the fourth leader on his diplomatic schedule for Friday,President Vladimir V. Putin of Russia. Nor did he say anything negative about his breakfast date for Saturday morning, Crown Prince Mohammed bin Salman of Saudi Arabia, who was just accused by the United Nations of having most likely orchestrated the murder and dismemberment of a Saudi journalist living in the United States. In saving his critiques for America’s friends, Mr. Trump repeated his approach to visiting Britain earlier in the month. When a reporter mentioned past criticism of him by the Duchess of Sussex, the former Meghan Markle, Mr. Trump said he did not realize “she was nasty,” then denied saying it, despite a tape recording of him doing so. He also called Sadiq Khan, the mayor of London, a “stone cold loser” who is doing a terrible job of running Britain’s capital.
At G20, Trump Seeks Fresh Start With Putin After End of Mueller Inquiry — President Trump arrived in Osaka, Japan on Thursday evening, and is expected to meet with Russian President Vladimir Putin on Friday afternoon. This will be their first meeting since last year in Helsinki, and a huge deal, as US and Russia relations have been suffering mightily in recent years. Trump and other officials have severely limited contact with Russia, likely fearing the Mueller investigation would cast a shadow over any such meetings. With that over, this could be Trump’s chance for a fresh start with Putin, though it isn’t clear what he intends to attempt. Indeed, Trump has dismissively insisted it is “none of your business” what he and Putin will talk about, saying only that it would be a “very good conversation,” what it is about. Putin has expressed skepticism about how much could really be accomplished, noting Trump has “a lot of restraints placed on him by other institutions.” He hoped for improves in relations, but seemed to be unclear what Trump could even offer.
Putin Laughs After Grinning Trump Says Don't Meddle In The Election Please -- President Trump quickly grabbed world headlines upon the start of the two-day long G20 Summit in Osaka, Japan when he warned Russia's Vladimir Putin against election meddling. Given that no doubt both leaders are as wearied of the worn out "Russian interference" hype as the American public, it was a grinning Trump who turned to his Russian counterpart saying with a grin, “Don’t meddle in the election!” The two leaders had just given brief opening remarks when during chaotic questions fired off from the press a reporter loudly pushed the election meddling issue, asking Trump if he would raise it with Putin. “Yes, of course I will,” Trump replied. He pointed his finger at Putin while the latter chuckled. Prompted by a reporter's question, Trump tells Putin: "Don’t meddle in the election, please."Putin laughed after hearing the translation. And the U.S. president shook his head and smiled. https://t.co/uNorQr7EzH pic.twitter.com/TcTRYlxGBX — Bloomberg (@business) June 28, 2019 “Don’t meddle in the election, president,” Mr. Trump said with a bit of a smile as he sat next to Mr. Putin. “Don’t meddle in the election.” — WSJ“It’s a great honor to be with President Putin,” the president said, and called their relationship “very, very good.”And the two even shared a warm moment while discussing "fake news," per this classic exchange reported in Bloomberg: The two leaders also bonded over journalism criticism. Trump complained to Putin about what he calls “fake news” in the U.S.“You don’t have this problem in Russia — we have, you don’t have it,” he said. Putin, who has cracked down on the independent media in his country, responded in English: “Yes, yes we have too. The same.”
NY Times admits it sends stories to US government for approval before publication -- The New York Times has publicly acknowledged that it sends some of its stories to the US government for approval from “national security officials” before publication.This confirms what veteran New York Times correspondents like James Risen have said: The American newspaper of record regularly collaborates with the US government, suppressing reporting that top officials don’t want made public.On June 15, the Times reported that the US government is escalating its cyber attacks on Russia’s power grid. According to the article, “the Trump administration is using new authorities to deploy cybertools more aggressively,” as part of a larger “digital Cold War between Washington and Moscow.”In response to the report, Donald Trump attacked the Times on Twitter, calling the article “a virtual act of Treason.”The New York Times PR office replied to Trump from its official Twitter account, defending the story and noting that it had, in fact, been cleared with the US government before being printed.“Accusing the press of treason is dangerous,” the Times communications team said. “We described the article to the government before publication.” “As our story notes, President Trump’s own national security officials said there were no concerns,” the Times added.
Japan, US Reaffirm Military Alliance After Trump Shocks With “Japan Can Watch US Attack On A Sony TV” Quip - After on Wednesday Trump captured global headlines with colorful criticisms of the United States' decades-old defense pact with Japan — saying that if the US is attacked, Japan "can watch on a Sony television" — the president met with Prime Minister Shinzo Abe on the sidelines of the Group of 20 leaders’ meeting.Though during their Friday meeting Abe reportedly praised the strength of the military alliance, the proceeding had the following epic jab hanging over it from Trump's Fox Business interview this week: “We have a treaty with Japan. If Japan is attacked we will fight World War III. We will go in and we will protect them and we will fight with our lives and with our treasure. But if we’re attacked, Japan doesn’t have to help us. They can watch it on a Sony television,” Trump said days ago. Despite that, the meeting was cordial enough, with Trump returning Abe's positive remarks on the post-WWII treaty by thanking Japan for creating thousands of jobs in the US through its many American-based manufacturing plants, especially in the auto sector.“The frequency of travels by top leaders of the two countries is proof of the strength of the Japan-U.S. alliance,” Abe had stated of his ally. “We just left Japan and now we’re back,” Trump joked in response. He noted that Friday's talks would be centered on security and trade while thanking Japan for “sending many auto companies into Michigan and Ohio and Pennsylvania, North Carolina and a lot of our states,” according to the Japan Times. “I see they are building all over the United States,” Trump continued. “A lot of the great Japanese car companies, other Japanese companies also, but in particular the car companies. Magnificent plants. We haven’t had that, and we very much appreciate it.”
Urged to Launch an Attack, Trump Listened to the Skeptics Who Said It Would Be a Costly Mistake - NYT— He heard from his generals and his diplomats. Lawmakers weighed in and so did his advisers. But among the voices that rang powerfully for President Trump was that of one of his favorite Fox News hosts: Tucker Carlson.While national security advisers were urging a military strike against Iran, Mr. Carlson in recent days had told Mr. Trump that responding to Tehran’s provocations with force was crazy. The hawks did not have the president’s best interests at heart, he said. And if Mr. Trump got into a war with Iran, he could kiss his chances of re-election goodbye.However much weight that advice may or may not have had, the sentiments certainly reinforced the doubts that Mr. Trump himself harbored as he navigated his way through one of the most consequential foreign policy decisions of his presidency. By his own account, the president called off the “cocked & loaded” strike on Thursday night with only 10 minutes to spare to avoid the estimated deaths of as many as 150 people. The concerns that Mr. Trump heard from Mr. Carlson reflected that part of the presidential id that has always hesitated at pulling the trigger. Belligerent and confrontational as he is in his public persona, Mr. Trump has at times pulled back from the use of force, convinced that America has wasted too many lives and too much money in pointless Middle East wars and wary of repeating what he considers the mistakes of his predecessors. As Mr. Carlson and other skeptics have argued, a strike against Iran could easily spiral into a full-fledged war without easy victory. That, Mr. Trump was told, was everything he ran against. And so the president struggled into the early evening, committed to taking action to demonstrate resolve right up until the moment he decided against it and called off the warplanes and missile launchers.
Trump approved cyber-strikes against Iran’s missile systems -WaPo - President Trump approved an offensive cyberstrike that disabled Iranian computer systems used to control rocket and missile launches, even as he backed away from a conventional military attack in response to its downing Thursday of an unmanned U.S. surveillance drone, according to people familiar with the matter. The cyberstrikes, launched Thursday night by personnel with U.S. Cyber Command, were in the works for weeks if not months, according to two of these people, who said the Pentagon proposed launching them after Iran’s alleged attacks on two oil tankers in the Gulf of Oman earlier this month. The strike against the Islamic Revolutionary Guard Corps was coordinated with U.S. Central Command, the military organization with purview of activity throughout the Middle East, these people said. They spoke on the condition of anonymity because the operation remains extremely sensitive. Though crippling to Iran’s military command and control systems, the operation did not involve a loss of life or civilian casualties — a contrast to conventional strikes, which the president said he called back Thursday because they would not be “proportionate.” The administration on Saturday warned industry officials to be alert for cyberattacks originating from Iran.
Military Spokesman: US, Allies' Interests to Burn in Fire in Any War Against Iran - Spokesman for the Iranian Armed Forces Brigadier General Abolfazl Shekarchi warned that the interests of Washington and its regional allies will be endangered and destroyed if the US fires even one single bullet at Iran. "Threat against threat means that if one bullet is fired at us, 10 bullets will be fired at them (the enemy) and they should pay a heavy price," General Shekarchi said in an interview with the Persian-language service of Tasnim news agency on Saturday. He added that the Iranian Armed Forces as guarantors of security for the Iranian and regional people have this message to the world that "we do not intend to invade any country but if Iran comes under aggression by enemies, they will face an irreparable and historical response that will make them regret". General Shekarchi said that all moves by enemies, specially the US, are precisely monitored by the Iranian Armed Forces, stressing that any military miscalculation by enemies, specially the US and its allies, in the region will mean firing at a gunpowder store, which hosts the interests of the US and its allies, and setting fire on the entire region that will burn the US, its interests and its allies. His remarks came after the Islamic Revolution Guards Corps (IRGC) Aerospace Force shot down an American spy drone over the territorial waters of Iran near the Strait of Hormuz at dawn on Thursday. The United States had confirmed that one of its reconnaissance planes was shot down by Iranian air defenses, but denied that it intruded into Tehran’s airspace at the time.
CBS News Analyst Pushing for Military Strike on Iran is Being Paid by Raytheon -- How do you know the MSM is nothing more than the media wing of the military-industrial-complex? A Raytheon board member masquerading as an objective analyst is a good start. On Friday, CBS News analyst and retired Navy Admiral James Winnefeld Jr. slammed President Trump for calling off retaliatory strikes on Iran over a downed US drone, while insisting we must strike Iran or else the United States will “lose a lot of credibility.Trump called off the planned strikes Friday, tweeting that “we were cocked & loaded to retaliate last night on 3 different sights,” only to learn that 150 people would die in the bombardments. According to the New York Times, Secretary of State Mike Pompeo, National Security Advisor John Bolton and CIA Director Gina Haspel were predictably hot-to-trot on military action. Instead, Trump announced that “major additional sanctions” were coming Iran’s way and would be unveiled on Monday. While a MSM pundit slamming Trump is nothing new, Winnefeld happens to be a board member of military defense contractor Raytheon since 2017, raking in nearly $300,000 per year in total compensation – something CBS did not disclose. Perhaps CBS could have instead featured one of the 76 retired US generals and diplomats who warned against war with Iran in a May 24 open letter?
Amid tough talk, Trump says he could be Iran’s ‘best friend’ (AP) — President Donald Trump said Saturday that military action against Iran was still an option for its downing of an unmanned U.S. military aircraft, but amid heightened tensions he dangled the prospect of eventually becoming an unlikely “best friend” of America’s longtime Middle Eastern adversary. Trump also said “we very much appreciate” that Iran’s Revolutionary Guard chose not to target a U.S. spy plane carrying more than 30 people. The president’s softer tone Saturday marked a stark contrast to the anti-Iran rhetoric he employed throughout the presidential campaign and presidency, including his use of punishing economic sanctions in an attempt to pressure Iran to give up its quest to build nuclear weapons. “The fact is we’re not going to have Iran have a nuclear weapon,” he said as he left the White House for a weekend at the Camp David presidential retreat. “And when they agree to that, they are going to have a wealthy country, they’re going to be so happy and I’m going to be their best friend.” “I hope that happens. I hope that happens, but it may not,” Trump said. He later said Iran will be hit with unspecified new sanctions on Monday. Another event earlier this week put a different cast on Trump’s more optimistic rhetoric. U.S. military cyber forces launched a strike against Iranian military computer systems on Thursday in response to the loss of the military drone. U.S. officials told The Associated Press that the cyberattacks, which disabled Iranian computer systems that controlled its rocket and missile launchers, had been authorized by Trump.
Let's Make Iran Great Again - Trump Says Iran Could Be His Best Friend - Well, perhaps Trump is now realizing there was that little thing called the Joint Comprehensive Plan of Action (JCPOA), or commonly the Iran nuclear deal, which he tore up in May 2018 — and that it really wasn't so bad compared to the current array of "bad options". President Trump said Saturday that he would be Iran's "best friend" and that it could be a "wealthy" country if it renounced nuclear weapons, according to the AFP.So we've gone from missiles being readied, ships about to launch, and planes in the air this week to now "we can be besties" if Tehran makes nuclear concessions (and we've definitely gone full circle from the JCPOA pullout). "We're not going to have Iran have a nuclear weapon," Trump told reporters outside the White House following an immensely tense week that almost witnessed major war between the US and Iran. "When they agree to that, they're going to have a wealthy country. They're going to be so happy, and I'm going to be their best friend. I hope that happens," Trump said. And then this surprising and unprecedented statement coming less than two days after chaos in the Middle East was nearly unleashed: "Let's make Iran great again."
Trump Sanctions Iran's Supreme Leader in Provocative Move - President Donald Trump imposed sanctions on Iran’s supreme leader, Ayatollah Ali Khamenei, and eight senior military commanders, a provocative step designed to increase pressure on the Islamic Republic. Trump told reporters at the White House on Monday that the penalties would deny Khamenei and his office access to financial resources. “The supreme leader of Iran is the one who ultimately is responsible for the hostile conduct of the regime,” Trump said. Trump last week abruptly canceled planned air strikes against Iran for shooting down a U.S. Navy drone on Thursday. The administration also blames Iran for recent attacks on two oil tankers near the Persian Gulf, though Iran denies it. The penalties won’t have a significant impact on a country that’s already in recession and facing heavy sanctions from the U.S. Still, the new restrictions serve as symbolic reprimand for the attacks, according to former Treasury officials. “It will have an effect because it will annoy the Iranians and make negotiations hard to pull off if the supreme leader is sanctioned,” said Brian O’Toole, a senior fellow at the Atlantic Council who previously worked in the U.S. Treasury Department’s sanctions unit. The U.S. already has sanctioned more than 80% of Iran’s economy, according to Secretary of State Michael Pompeo. He’s en route to Saudi Arabia and the United Arab Emirates to rally a front against Iran. Khamenei, who was initially elected president of the nascent republic in 1981, has “possessions” worth an estimated at $200 billion, according to a Facebook post by the U.S. embassy in Baghdad in April. He is backed by the Islamic Revolutionary Guard Corps and has survived an assassination attempt and frontline combat.
Trump signs executive order slapping 'hard-hitting' sanctions on Iran over drone shootdown - President Donald Trump signed an executive order Monday imposing “hard-hitting” new sanctions on Iran in response to the downing of an unmanned U.S. drone last week. “We will continue to increase pressure on Tehran until the regime abandons its dangerous activities,” including its nuclear ambitions, Trump told reporters in the Oval Office. “We do not seek conflict with Iran or any other country,” Trump added. “I can only tell you we cannot ever let Iran have a nuclear weapon.” The new sanctions deny Iran Supreme Leader Ayatollah Ali Khamenei and his office access to key financial resources, according to NBC News. In addition, the U.S. is sanctioning specific military leaders who were responsible for shooting down the drone, according to Treasury Secretary Steven Mnuchin. Trump had announced over the weekend plans to slap additional sanctions on Iran to deter the country from obtaining nuclear weapons. The U.S. already has sanctions on Iran’s oil industry and other sectors. Tensions between the U.S. and Iran have grown since May 2018, when Trump pulled the U.S. out of the multilateral Iran nuclear deal that had been brokered during the Obama administration. Some sanctions that had been lifted under that deal snapped back into effect after the U.S. pulled out. Tensions ratcheted up in recent weeks, following attacks on oil tankers near the Strait of Hormuz that the U.S. alleges were executed by Iran. Iran denies that it carried out the attacks. In addition, Iran announced early last week it would no longer abide by limits imposed on its uranium stockpile under the 2015 accord. Last Thursday, an Iranian surface-to-air missile shot down an American surveillance drone that the U.S. says had been in international airspace. Iran maintains that the drone was flying in its airspace in violation of international law. Trump approved military strikes against Iran in retaliation for the downing, but he abruptly reversed his decision, saying the expected casualty toll from a U.S. strike would have been disproportionate to Iran’s downing of the unmanned spy drone. Shortly after Trump signed the order Monday, Mnuchin said some of the Iranian sanctions had been in the works before the drone was shot down. Iran’s Foreign Minister, Javad Zarif, would be sanctioned later this week, he said. Mnuchin also responded to critics who question the effectiveness of the sanctions. “We’ve literally locked up tens and tens of billions of dollars,” Mnuchin said in the White House briefing room. “These sanctions are highly effective.”
Iran Says New U.S. Sanctions Mean Diplomatic Path Closed ‘Forever’ - Iran said the path to a diplomatic solution with the U.S. had closed after the Trump administration imposed sanctions against its supreme leader and other top officials, raising tensions days after the downing of an American drone brought the Middle East to the brink of war. President Donald Trump on Monday unveiled sanctions on Ayatollah Ali Khamenei, Iran’s top ruler and a spiritual guide for many Iranians, and eight senior military commanders, with the goal of denying them access to financial resources. Treasury Secretary Steven Mnuchin said financial restrictions would also be introduced against Iran’s Foreign Minister Javad Zarif later this week. “The futile sanctions against the Iranian leader and the country’s chief diplomat mean the permanent closure of the diplomatic path with the government of the United States,” Foreign Ministry spokesman Abbas Mousavi was quoted as saying by semi-official Iranian Students News Agency. “The Trump government is in the process of destroying all the established international mechanisms for maintaining global peace and security.” Tensions have spiked in the Gulf since May, when the Trump administration revoked waivers on the import of Iranian oil, squeezing its economy a year after the U.S. walked away from the landmark 2015 deal meant to prevent the Islamic Republic from developing a nuclear weapon. Since then, a spate of attacks on oil tankers near the Strait of Hormuz shipping choke point have raised the specter of war and pushed up oil prices.
Iran says Trump’s White House ‘afflicted by mental retardation’ in protest at sanctions - Iranian president Hassan Rouhani has said the White House is “afflicted by mental retardation” after the Trump administration imposed sanctions on the country’s supreme leader. In a live televised address, Mr Rouhani branded the sanctions against Ayatollah Ali Khamenei and other senior officials, including Iran’s foreign minister Mohammad Javad Zarif, as “outrageous and idiotic”. "You sanction the foreign minister simultaneously with a request for talks," he said, adding: "The White House is afflicted by mental retardation and does not know what to do." Iran had earlier warned that Monday’s sanctions meant the permanent closure of diplomatic channels between Tehran and Washington. Foreign ministry spokesman Abbas Mousavi said the American government was “destroying the established international mechanisms for maintaining world peace and security”. Mr Trump said the “hard-hitting” sanctions, which came following weeks of escalating tensions between the two countries, were “a strong and proportionate response to Iran’s increasingly provocative actions”. The president’s national security adviser, John Bolton, an Iran hawk with a history of calling for military action against the Islamic republic, has insisted Washington is still willing to talk to Tehran. “The president has held the door open to real negotiations to completely and verifiably eliminate Iran’s nuclear weapons programme, its ballistic missile delivery systems, its support for international terrorism and other malign behaviour worldwide,” he said.
Trump Slams Iran's Ignorant, Insulting Statement, Warns Any Further Attacks Will Mean “Obliteration” - After Iran unceremoniously slammed the door on diplomacy, President Trump has decided to tweet his perspective on what happens next. Trump began by going after the statement from Iranian leadership, blasting that they don't "understand the words “nice” or “compassion,” they never have," adding some threats: "Sadly, the thing they do understand is Strength and Power, and the USA is by far the most powerful Military Force in the world, with 1.5 Trillion Dollars invested over the last two years alone..." Then Trump turned to the Iranian people, who are suffering due to his economic war being waged by sanctions: "....The wonderful Iranian people are suffering, and for no reason at all. Their leadership spends all of its money on Terror, and little on anything else," reminding his 61 million followers that "The U.S. has not forgotten Iran’s use of IED’s & EFP’s (bombs), which killed 2000 Americans, and wounded many more..." But he saved the best for last, unleashing a 'sound-and-fury'-esque warning that " ....Iran’s very ignorant and insulting statement, put out today, only shows that they do not understand reality. Any attack by Iran on anything American will be met with great and overwhelming force. In some areas, overwhelming will mean obliteration."
Trump warns Iran of ’obliteration like you’ve never seen before’ -- President Donald Trump warned the United States may launch a devastating military attack on Iran unless it comes to the negotiating table and drops its bid to develop nuclear weapons. “I'm not looking for war, and if there is, it'll be obliteration like you’ve never seen before. But I’m not looking to do that. But you can’t have a nuclear weapon. You want to talk? Good. Otherwise you can have a bad economy for the next three years,” Trump said during an interview with NBC’s “Meet The Press” airing Sunday. The president said he’d be willing to sit down with Iranian officials without preconditions. The comments, made during an interview taped Friday, came the same day Trump confirmed on Twitter that he called off a retaliatory strike on Iran at the last minute Thursday night. He said he decided that the potential cost of human lives was “not proportionate to shooting down an unmanned drone.” Iran’s Revolutionary Guard said Thursday it had shot down an American drone, claiming it had entered Iranian airspace, a claim disputed by the U.S., which has maintained the drone was over international waters. Both countries have since produced what they say is evidence supporting their respective positions. Trump said the U.S. had a “modest but pretty, pretty heavy attack schedule,” but planes were not in the air when he called off the attack.
Iran Has Ties to Al Qaeda, Trump Officials Tell Skeptical Congress — The Trump administration is telling Congress about what it says are alarming ties between Iran and Al Qaeda, prompting skeptical reactions and concern on Capitol Hill.Briefings by Secretary of State Mike Pompeo, backed up by other State Department and Pentagon officials, have led Democrats and some Republicans to ask whether the administration is building a case that the White House could use to invoke the war authorization passed by Congress in 2001 to battle terror groups as legal cover for military action against Iran.As tensions between the United States and Iran have surged, Mr. Pompeo has sought to convince Congress that there is a pattern of ties between Iran and the terrorist group going back to after the Sept. 11, 2001, attacks, officials said. Mr. Pompeo and other administration officials have stopped short of telling lawmakers or aides in large group settings that the 2001 authorization for the use of military force from Congress, which permits the United States to wage war on Al Qaeda and its allies or offshoots, would allow the Trump administration to go to war with Iran. President Trump has said he does not want a war, but he ordered 2,500 additional troops to the region in the last month in response to what American officials said was a heightened threat.Statements tying Iran to Al Qaeda or the Taliban by Mr. Pompeo and other officials point to the potential for the administration to justify invoking the 2001 authorization, some lawmakers say. And when asked in recent weeks by lawmakers and journalists whether the administration would use the 2001 authorization, Mr. Pompeo has deflected the questions.“They are looking to bootstrap an argument to allow the president to do what he likes without coming to Congress, and they feel the 2001 authorization will allow them to go to war with Iran,” said Senator Tim Kaine, Democrat of Virginia.
Chances of US-Iran tensions escalating are 'very, very high,' says former advisor to Tehran - Chances of a U.S.-Iran conflict escalating into something bigger are “very, very high” — though a full-blown war is unlikely, said a former energy advisor to the prime minister of Iran in the late 1970s. Washington and Tehran nearly came to blows last week after Iran claimed it downed an American drone that entered its territory. The U.S. said its aircraft was operating in international airspace. “We have to remember Iran is a regional superpower. U.S. says ‘I’ll put you in a box, please die.’ They (Iran) are not going to stay in a box and just die,” Fereidun Fesharaki, now chairman of oil and gas consultancy Facts Global Energy, told CNBC’s “Squawk Box.” “They will strike back one way or the other; I think chances of tensions becoming bigger is very, very high in the near future,” said Fesharaki. In response to the downing of the U.S. drone, President Donald Trump ordered military strikes against Iranian targets on Thursday — but eventually halted those plans. Escalating tensions between the two countries sent oil prices higher, with U.S. crude up more than 9% in the week, while the global benchmark Brent gained 5%. Investors fear an attack on Iran, a major oil producer and exporter, would disrupt energy flows from the Middle East — a region that provides more than a fifth of the world’s oil output. Both oil indexes continued edging higher on Monday.
Trump Has a $259 million Reason to Bomb Iran -- Much analysis of Trump’s slide toward war with Iran has focused on his hawkish national security adviser, John Bolton, who, reportedly requested options from the Pentagon to deploy as many as 120,000 troops to the Middle East and hit Iran with 500 missiles per day. Bolton is the loudest voice inside the White House pushing for a military escalation to the administration’s “maximum pressure” strategy. Yet, there’s another omnipresent influence on Trump: $259 million given by some of the GOP’s top supporters to boost his campaign in 2016 and support Republican congressional and senate campaigns in 2016 and 2018. Those funds came from Sheldon and Miriam Adelson, Paul Singer and Bernard Marcus, donors who have made no secret, both through public statements and funding think tanks that support military action against Iran, of their desire for the United States to destroy the Islamic Republic.Adelson, who alongside his wife Miriam are the biggest donors to Trump and the GOP, contributed $205 million to Republicans in the past two political cycles and reportedly sent $35 million to the Future 45 Super PAC that supported Trump’s presidential bid. His role as the biggest funder of Republican House and Senate campaigns makes him a vital ally for Trump—who relied on Adelson’s campaign donations to maintain a Republican majority in the Senate and curb Republican losses in the House in the 2018 midterm election—and any Republican seeking national office. Adelson publicly suggested using nuclear weapons against Iran and pushed for Trump to replace then-national security adviser H.R. McMaster with Bolton, partly due to the former’s perceived unwillingness to take a harder line on Iran. In 2017, the Zionist Organization of America, which receives much of its funding from the Adelsons, led a public campaign against McMaster, accusing him of being “opposed to President Trump’s basic policy positions on Israel, Iran, and Islamist terror.”
Trump Seeks ‘Coalition Of The Willing’ Against Iran - After a somewhat quiet weekend the Trump administration today engaged in another push against Iran.Today the Treasury Department sanctioned the leaders of the Iranian Revolutionary Guard Corps (IRGC). It also sanctioned Iran's Supreme Leader Ayatollah Khamenei and his office! There will be no more Disney Land visits for them. The Treasury Secretary will designate Javad Zarif as what? A terrorist? Zarif is quite effective in communicating the Iranian standpoint on Twitter and other social media. Those accounts will now be shut down. The Trump administration's special envoy for Iran, Brian Hook, said today that Iran should respond to U.S. diplomacy with diplomacy. Sanctioning Iran's chief diplomat is probably not the way to get there.All those who get sanctioned by the U.S. will gain in popularity in Iran. These U.S. measures will only unite the people of Iran and strengthen their resolve.Iran will respond to this new onslaught by asymmetric means of which it has plenty.On Saturday Trump said that all he wants is that Iran never gets nuclear weapons. But the State Department wants much more. Hook today said that the U.S. would only lift sanctions if a comprehensive deal is made that includes ballistic missile and human rights issues. Iran can not agree to that. But this is not the first time that Pompeo demanded more than Trump himself. Is it Pompeo, not Trump, who is pressing this expanded version to make any deal impossible? Brian Hook is by the way a loon who does not even understand the meaning of what he himself says:
Trump says 'not talking boots on the ground' if action taken against Iran (Reuters) - U.S. President Donald Trump said on Wednesday that he was “not talking boots on the ground” should he take military action against Iran and that he had “unlimited time” to try to forge an agreement with Tehran. Iran suggested it was just one day from breaching a limit in the 2015 nuclear deal that restricted its stockpile of uranium, a move that would pressure European countries aiming to be neutral to pick sides. The fate of the multilateral nuclear deal, under which Iran agreed to curbs on its nuclear program in return for relief from economic sanctions, has been at the heart of the U.S.-Iran dispute which took on a military dimension in recent weeks. Last week Iran shot down a U.S. drone it said was in its air space, which Washington denied. Trump called off retaliatory air strikes at the last minute, saying too many people would have died. Washington also accused Tehran or its proxies of attacks in May and June on six tankers in the Gulf region, which Iran denies. Asked on Fox Business Network if a war was brewing, Trump replied: “I hope we don’t but we’re in a very strong position if something should happen.” “I’m not talking boots on the ground,” Trump said. “I’m just saying if something would happen, it wouldn’t last very long.” Speaking later at a gathering of religious conservatives, the U.S. president talked about whether there could be a new agreement with Iran, suggesting he could live without one. “If it doesn’t happen, that’s fine with me,” Trump said. “I have unlimited time, as far as I’m concerned.” Trump last year unilaterally withdrew from the nuclear deal with Iran struck by his predecessor President Barack Obama, arguing that it did not go far enough to restrict Iran’s nuclear and missile programs and other activities in the Middle East. He has since re-imposed U.S. economic sanctions on Iran, including taking the unprecedented step in May of trying to drive Iran’s oil exports to zero.
Trump suggests US will not protect Strait of Hormuz - US President Donald Trump has said that other countries, including China and Japan, should protect their own oil tankers in the Middle East, suggesting that the American military may withdraw from securing the Strait of Hormuz for international commerce. In a series of tweets on Monday, Trump questioned why the United States has provided such protection for years “for zero compensation.”“China gets 91% of its Oil from the Straight (sic), Japan 62%, & many other countries likewise. So why are we protecting the shipping lanes for other countries (many years) for zero compensation,” Trump wrote on Twitter.“All of these countries should be protecting their own ships on what has always been … a dangerous journey,” Trump continued. “We don’t even need to be there in that the U.S. has just become (by far) the largest producer of Energy anywhere in the world!” “The U.S. request for Iran is very simple - No Nuclear Weapons and No Further Sponsoring of Terror!” he added. American journalist and political analyst Don DeBar told Press TV on Monday, “These tweets are an indication that those who suggested Trump might be presiding over a policy of imperial retreat are correct.” “There's a big difference between the position that ‘we don't subsidize our competitors’ versus ‘we don't have any competitors because we own the table and the whole casino,’” he added. “Trump's foreign policy, as suggested in these tweets, is apparently based upon the former, while the previous policy - going back at least to the Second World War - was based upon the latter,” he noted. Trump told reporters outside the White House on Saturday that he would be Iran's "best friend" if it stopped pursuing nuclear weapons. Iran’s leadership has repeatedly expressed their firm opposition to the development and use of nuclear weapons.
America’s Free-Rider Problem in the Strait of Hormuz -Donald Trump spent much of the month lobbing threats at Iran, condemning the country’s leadership for tanker attacks near the Strait of Hormuz, stepping up to the brink of war after Iran shot down a drone in nearby waters, warning that the country could be “obliterated” if it attacked anything American. But he also wondered aloud on Twitter why the area is America’s problem at all. A major part of the reason: to secure the world’s oil supplies—about 20 percent of which flow through the strait. But the U.S. itself doesn’t get most of its oil from the Gulf; most Gulf oil flows to Asia. So why, Trump asked, was the U.S. footing the bill to keep the Chinese supplied? The U.S. has shouldered the burden for protecting the free flow of energy supplies in the region since the Carter administration, when America’s chief adversary was the Soviet Union and the U.S. needed guaranteed access to oil so its military could fight a land war in Europe if needed. But the world has changed. The Soviet Union no longer exists. The United States is producing substantial amounts of its own oil needs. Which does make it worth asking whether the assumption that dictated a U.S. military buildup in the region in the 1980s still holds. One issue: It doesn’t really matter where Middle Eastern oil goes—if supply is disrupted, prices go up for everybody. “The origin of whatever molecules are consumed in the United States does not matter,” Kenneth Vincent, an economist at the Department of Energy, said at a 2017 Georgetown conference. “What matters is that if there’s a shooting war somewhere in the Middle East, those molecules will cost more and that will harm the American economy.” The U.S. is also providing a global public good as the dominant military force in the region. “We’re doing it not just for us; we’re really doing it for the world, and we’re doing it because it impacts us and we’re the only ones really big enough to do it,” says Rosemary Kelanic, a Notre Dame professor who researches energy security. “Other countries have been totally happy to free ride on that.”
Trump Unleashes On Uber-Hawk Bolton- We'd Be Fighting The Whole World At One Time - In a stunningly frank moment during a Sunday Meet the Press interview focused on President Trump's decision-making on Iran, especially last week's "brink of war" moment which saw Trump draw down readied military forces in what he said was a "common sense" move, the commander in chief threw his own national security advisor under the bus in spectacular fashion. Though it's not Trump's first tongue-in-cheek denigration of Bolton's notorious hawkishness, it's certainly the most brutal and blunt take down yet, and frankly just plain enjoyable to watch. When host Chuck Todd asked the president if he was “being pushed into military action against Iran” by his advisers in what was clearly a question focused on Bolton first and foremost, Trump responded: “John Bolton is absolutely a hawk. If it was up to him he'd take on the whole world at one time, okay?” Trump began by explaining, “I have two groups of people. I have doves and I have hawks,” before leading into this sure to be classic line that is one for the history books: “If it was up to him he'd take on the whole world at one time, okay?”During this section of comments focused on US policy in the Middle East, the president reiterated his preference that he hear from "both sides" on an issue, but that he was ultimately the one making the decisions. When pressed on the dangers of having such an uber-hawk neo-conservative who remains an unapologetic cheerleader of the 2003 Iraq War, and who laid the ground work for it as a member of Bush's National Security Council, Trump followed with, “That doesn't matter because I want both sides.”
Trump- Why Protect Other Countries' Shipping Lanes For Zero Compensation? - Following statements on Meet the Press Sunday where he said "I was against going into the Middle East," and lamenting that "we've spent 7 trillion dollars" there, Trump continued his theme of drawing down in the region on Twitter, saying Monday morning it's time for China and others to protect their own ships in the Persian Gulf. "China gets 91% of its Oil from the Straight, Japan 62%, & many other countries likewise." Trump tweeted, making the common mistake of spelling the word "strait" wrong. "So why are we protecting the shipping lanes for other countries (many years) for zero compensation," he questioned. "All of these countries should be protecting their own ships on what has always been a dangerous journey." ....a dangerous journey. We don’t even need to be there in that the U.S. has just become (by far) the largest producer of Energy anywhere in the world! The U.S. request for Iran is very simple - No Nuclear Weapons and No Further Sponsoring of Terror!— Donald J. Trump (@realDonaldTrump) June 24, 2019 “We don't even need to be there in that the U.S. has just become (by far) the largest producer of Energy anywhere in the world! The U.S. request for Iran is very simple - No Nuclear Weapons and No Further Sponsoring of Terror!" he concluded. There was no immediate reaction in oil price in response to Trump's signaling the US could be no longer willing to protect international shipping following the June 13 tanker attack incident in the Gulf of Oman, and following last week's dramatic events which almost witnessed the US and Iran go to war.
Lawrence Wilkerson: Trump Is Deepening the ‘Economic War’ Against Iran - naked capitalism - Yves here. Colonel Larry Wilkerson, an astute critic of American foreign policy, weighs in on the latest effort by the Administration to toughen sanctions against Iran. This was an obvious face-saving effort after Trump had the good sense to pull back on an planned attack against Iran. The wee problem with the last punitive measures, however, is they are nothingburgers. Sanctioning the leader of Iran, who are already effectively bunkered in their country, has the effect of showing the US has pretty much hit the limits of what it can do short of military strikes. Wilkerson’s key point in this Real News Network interview is one that too few pundits in the US will acknowledge: that the severity of economic sanctions against Iran are tantamount to an act of war. Wilkerson also makes observations about who in addition to John Bolton has sway over Middle East policy.
When NPR Is More Dangerous Than Fox News - When military conflict between the United States and Iran seems to be approaching, and you’re trying to get a clear picture of the situation, I’m only half-kidding when I say there’s a case to be made for staying glued to Fox News. Sure, you’ll hear a lot of pro-war propaganda. But at least you’ll know that’s what it is. If you instead tune in to “mainstream” media, you may think you’re getting an objective account when in fact you’re getting an account that’s biased in favor of war—just biased in subtler, harder-to-detect ways than the accounts on Fox News. I’m not saying that mainstream journalists and commentators who evince these biases are consciously anti-Iran or pro-war. Usually the problem is just that they’re Americans, viewing the world through American lenses, relying on America’s ecosystem of expertise. And, of course, they’re human—which means they have cognitive biases that distort reality in accordance with their group affiliations (such as, say, being American).Consider a report that ran on NPR Thursday, hours after Iran downed a U.S. surveillance drone that, according to Iran, had violated Iranian airspace and, according to the United States, hadn’t. Rachel Martin, host of Morning Edition, began the segment by providing some context: “Since the Trump administration announced a maximum-pressure campaign against Iran, Iran has responded by attacking oil tankers in the Gulf of Oman.” Actually, we don’t know that. The Trump administration claims that Iran was behind the tanker attacks, but Iran denies it, and all the evidence adduced by the Trump administration is circumstantial. I’d say the chances are pretty high that Iran was behind at least one of the two sets of tanker attacks (there was one in May, one in June). But as seasoned U.S. intelligence officials have noted, there are numerous nations in that region with an incentive to stage an attack that Iran would be falsely blamed for. A reporter shouldn’t report something as fact unless it’s been established beyond reasonable doubt, and that hasn’t happened here.
Are Starvation Sanctions Worse Than Overt Warfare? Authored by Caitlin Johnstone - Iran’s economy is already floundering due to the steadily mounting sanctionsthat the Trump administration has been heaping upon it since its withdrawal from the JCPOA last year. Crucial goods are four times the price they used to be, sick Iranians are having difficulty obtaining life-saving medicine, and life in general has been getting much more difficult for the poorest and frailest Iranian civilians. For this reason, it is a very safe bet that there have been Iranians who have died because of the sanctions. Being unable to obtain enough life-saving medicine will inevitably increase mortality rates, as will inadequate nutrition and care for those whose health is at risk. There’s not really any way around that, and it’s only going to get worse. And that’s exactly what was supposed to happen. As far as their intended purpose is concerned, the sanctions are working. They’re doing exactly what they were intended to do: hurt Iranian civilians. Starvation sanctions kill people. Tens of thousands of Venezuelans have reportedly already died as a result of this administration’s relentless assault on their economy; those human beings are no less dead than they would have been if the US had killed them by dropping cluster bombs on Caracas. Yet these deaths have received virtually no mainstream media coverage, and Americans, while they strongly oppose attacking Iran militarily, have had very little to say about Trump’s attacks on the nation’s economy. The economy which people use to feed their children, to care for their elderly and their sick.I’m titling this essay “Starvation Sanctions Are Worse Than Overt Warfare”, and I mean it. I am not saying that starvation sanctions are more destructive or deadly than overt military force in and of themselves; what I am saying is that the overall effect is worse, because there’s no public accountability for them and because they deliberately target civilians. If the US were to launch a barrage of Tomahawk missiles into an Iranian suburb with the goal of killing civilians, there’d be international outrage and the cohesion of the US-centralized power alliance would take a major hit. Virtually everyone would recognize this as an unforgivable war crime. Yet America will be able to kill the same number of civilians with the same deliberate intention of inflicting deadly force, and it would suffer essentially no consequences at all. There’s no public or international pressure holding that form of violence at bay, because it’s invisible and poorly understood.
Trump To Unleash Hell On Europe: EU Announces Channel To Circumvent SWIFT And Iran Sanctions Is Now Operational - With the world waiting for the first headlines from the Trump-Xi meeting, the most important and unexpected news of the day hit moments ago, when Europe announced that the special trade channel, Instex, that will allow European firms to avoid SWIFT and bypass American sanctions on Iran, is now operational.Following a meeting between the countries who singed the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), which was ditched by US, French, British and German officials said the trade mechanism which was proposed last summer and called Instex, is now operational.As a reminder, last September, in order to maintain a financial relationship with Iran that can not be vetoed by the US, Europe unveiled a "Special Purpose Vehicle" to bypass SWIFT. The mechanism would facilitate transactions between European and Iranian companies, while preventing the US from vetoing the transactions and pursuing punitive measures on those companies and states that defied Trump. The payment balancing system will allow companies in Europe to buy Iranian goods, and vice-versa, without actual money-transfers between European and Iranian banks. The statement came after the remaining signatures of JCPOA gathered in Vienna for a meeting that Iranian ministry spokesman Abbas Mousavi called "the last chance for the remaining parties...to gather and see how they can meet their commitments towards Iran."Until today, Tehran was skeptical about EU's commitment to the deal and threatened to exceed the maximum amount of enriched uranium allowed it by the deal after US had imposed a series of sanctions on the country.Meanwhile, opponents of Instex - almost exclusively the US - have argued that the mechanism is flawed because the Iranian institution designated to work with Instex, the Special Trade and Finance Instrument, has shareholders with links to entities already facing sanctions from the U.S. The announcement sent oil sharply lower, with crude futures falling about $1/bbl in closing minutes before settlement, extending daily loss, as it means Iran now has a fully functioning pathway to receive payment for oil it exports to anyone it chooses.
Arms Dealers and Lobbyists Get Rich as Yemen Burns - American Conservative - Chronic human rights violator Saudi Arabia is using American-made weapons against civilians in the fifth-poorest nation in the world, Yemen. And make no mistake: U.S. defense contractors and their lobbyists and supporters in government are getting rich in the process.“Our role is not to make policy, our role is to comply with it,” John Harris, CEO of defense contractor Raytheon International, said to CNBC in February. But his statement vastly understates the role that defense contractors and lobbyists play in Washington’s halls of power, where their influence on policy directly impacts their bottom lines.Since 2015, Saudi Arabia and the United Arab Emirates have waged war against Yemen, killing and injuring thousands of Yemeni civilians. An estimated 90,000 people have been killed, according to one international tracker. By December 2017, the number of cholera cases in Yemen had surged past one million, the largest such outbreak in modern history. An estimated 113,000 children have died since April 2018 from war-related starvation and disease. The United Nations calls the situation in Yemen the largest humanitarian crisis on earth, as over 14 million face starvation. The majority of the 6,872 Yemeni civilians killed and 10,768 wounded have been victims of Saudi-led coalition airstrikes, according to the Office of the United Nations High Commissioner for Human Rights (OHCHR). Nearly 90 coalition airstrikes have hit homes, schools, markets, hospitals, and mosques since 2015, according to Human Rights Watch. In 2018, the coalition bombed a wedding, killing 22 people, including eight children. Another strike hit a bus, killing at least 26 children. From 2014 to 2018, the United States supplied 68 percent of Saudi Arabia’s arms imports, 64 percent of the UAE’s imports, and 65 percent of Qatar’s imports. Some of this weaponry was subsequently stolen or sold to al-Qaeda linked groups in the Arabian Peninsula, where they could be used against the U.S. military, according to reports.
1 In 5 Global Citizens See US As Force For Bad Around The World - In a new study entitled 'The Age of Impunity?' by The Policy Institute at Kings College London and Ipsos MORI, 17,000 respondents from 24 countries were asked if they thought other states or organizations were mostly using their influence for good or for bad around the world. As Statista's infographic shows, Iran is considered by the largest share of people to be exerting a negative influence, with 31 percent. A further 20 percent said they think it is mixed, while only 6 percent said it uses its influence for good.Not too far behind though, is the United States, for which 22 percent think currently uses its influence for bad. This puts it in the company of Saudi Arabia (25 percent), Russia (25 percent), Israel (24 percent) and China (20 percent). The U.S. at least had one of the most mixed results, with 37 percent admitting they felt its influence was a mix of good and bad and 18 percent saying it is mostly good.
Palestinians reject economic part of US peace plan- The United States has revealed a proposal to create a $50bn global investment fund for the Palestinians and neighbouring Arab states, designed to be the economic engine of the long-awaited US Middle East peace plan. The plan was posted on the White House website on Saturday, two days before a US-led workshop in Bahrain where the economic portion of the so-called "deal of the century" is set to be discussed. The Manama conference is taking place despite opposition from the Palestinians, who will not attend. Palestinian Authority President Mahmoud Abbas on Saturday rejected the economic plan and the US peace effort, which is led by President Donald Trump's senior adviser Jared Kushner. "The economic situation should not be discussed before the political one," Abbas said on Saturday. "As long as there is no political solution, we do not deal with any economic solution." 'Less controversial'Speaking to Reuters news agency, Kushner, who is also Trump's son-in-law, said the economy-first approach was "necessary" to break away from the political side, as it would be "less controversial". "Let's let people study it, give feedback," he said. "Let's try to finalise if we can all agree on what that could look like in the event of a peace agreement." Fundamental political issues such as the occupation of Palestinian territories, the right of return for refugees and their descendants (of which roughly five million live in refugee camps in neighbouring Arab countries) and border sovereignty were not mentioned in the plan. Instead, the economic scheme included 179 infrastructure and business projects, a billion-dollar investment to build up the Palestinians' tourism sector, and a $5bn transportation corridor to connect the West Bank and the Gaza Strip. More than half of the $50bn would be spent in the economically troubled Palestinian territories over 10 years, while the rest would be split between Egypt, Lebanon and Jordan, according to the plan. According to Kushner, the 10-year plan "would create a million jobs in the West Bank and Gaza".
'Get Israel off our backs': Palestinians react to Kushner plan - Analysts have rebuked the economic part of the United States' Middle East peace plan for failing to address the main problem that has heavily curbed the Palestinian economy - the 52-year-old Israeli military occupation over the Palestinian territories. The economic plan was released by the White House on Saturday and is set to be presented during a US-led workshop in Bahrain on June 25-26. When the document was released, many noticed that the 40-page plan is void of any political context with the words "occupation", "freedom", "equality", "blockade" missing. "The absence of those words is actually quite glaring and it's very indicative of what they see is the issue," Diana Buttu a Haifa-based analyst and former legal adviser to Palestinian peace negotiators told Al Jazeera. "They've put together this optimal, pie-in-the-sky plan that any person who's involved in economic development would love to see. But it's not applicable to Palestine because they've taken away the political context." At the heart of the plan is a proposed $50bn investment fund which would be split between Palestinians in the occupied territories (more than half of the total amount) and its neighbours Egypt, Lebanon and Jordan. The fund will be used for 179 infrastructure and business projects, including building up the Palestinians' tourism sector. However, it doesn't address the obstacles to freedom of movement that Palestinians face, living under the 12-year Israeli-Egyptian blockade on the Gaza Strip, or under occupation in the West Bank, surrounded by illegal Israeli settlements, deeming it a non-starter for many across the board. The Palestinian Authority, which exercises limited rule in some areas of the West Bank, and Hamas, which governs Gaza, have both staunchly rejected the plan.
Trump’s Peace Plan Is Immoral, Impractical—and Could Blow Up the Middle East – It sounds great on paper: The U.S. administration will hold a “peace to prosperity” economic workshop in Bahrain on June 25 and 26 to jumpstart Israeli-Palestinian peace talks. Yet scratch the shiny PR surface and you’ll find a dangerously simplistic approach to a complicated situation. Anybody who followed the last 30 years of the Israeli-Palestinian conflict understands that President Donald Trump’s announcement of this first step on the way to a deal is all form and no substance: a new name for the same failed idea known as “economic peace,” and before that as “a new Middle East.”Putting economics first, before a political process, is more than a tactical error, yet another in a long line of failed attempts to advance towards a permanent two-state solution. The Trump administration’s focus on economics—led by Trump’s son-in-law and senior adviser Jared Kushner—is a strategic mistake that could stymie the negotiations before they begin. If Trump and his team studied history, they would know that placing economics before core political issues is a slap in the face to the Palestinians. Of course, the Palestinians want to improve their quality of life; of course they want to build a growing economy. But these are secondary goals, to be pursued after self-determination is achieved. If the Palestinians could be “bought” with economic benefits, we would be long past the need for talks. Trump’s approach is not only immoral, it is impractical.
Most Democratic Candidates Still Afraid to Criticize Israel’s Violations of Palestinian Rights -- The attitudes of Democratic voters toward the Israeli-Palestinian conflict have become decidedly more balanced in the past two decades. Favorable attitudes toward Palestinians are up while attitudes toward Israel appear to be in decline. While, overall views of Israel remain positive, substantial numbers of Democrats are opposed to Israeli policies – namely settlement construction and violations of Palestinian rights. Israel’s leader, Benjamin Netanyahu, is also viewed negatively by most Democrats. These shifts in opinion have placed many Democratic presidential candidates in a bind – especially those who have served in Congress or as Governors. As conscious as they may be of their base’s changing mood, they have also been schooled not to alienate pro-Israel donors or cross Israel’s lobbyists, who can, if aroused, distract their campaigns with a barrage of protests. It was against this backdrop that I watched the results of a months-long New York Times’ project in which they interviewed 21 of the Democrats running for president on a range of foreign and domestic policy issues that will confront the next president. There were questions on Afghanistan, handguns, health care, immigration, and the death penalty. Most intriguing to me was question #4: “Do you think that Israel meets international standards of human rights?” because it was deeply revealing about each of candidates’ principles, their understanding of, and readiness to deal with the Israeli-Palestinian conflict. It was disturbing how few of the candidates appear to have given the matter any serious thought. With the notable exceptions of Senator Bernie Sanders, Mayor Pete Buttigieg, and Congressmen Eric Swalwell and Seth Moulton, most of the elected officials stumbled about like frightened high schoolers being asked a test question for which they hadn’t prepared.
U.S. cannot unilaterally remove Turkey from F-35 program: Turkish defense official (Reuters) - The United States cannot unilaterally remove Turkey from the F-35 fighter jet program as the partnership agreement does not allow it, Turkey’s head of Defense Industries Directorate said on Friday. “No single country can say they don’t want you and then remove you from the program,” Ismail Demir told reporters. “This isn’t part of the agreement, this isn’t something you can just say ‘I exclude you’ about. The F-35 project is a partnership and nowhere in the agreement does it allow a unilateral removal of one country,” he said. Ankara and Washington have been at loggerheads for months over Turkey’s planned purchase of Russian S-400 missile defense system. The United States says the S-400s are incompatible with NATO’s defense network and could compromise its F-35 fighter jets, an aircraft Turkey is helping build and planning to buy. In a letter to Turkey, the Pentagon has warned Ankara will be pulled out of the F-35 program unless it changes course. Washington has already stopped accepting more Turkish pilots for training in the U.S. and halted delivery of equipment related to the program. The United States says Turkey’s S-400 acquisition poses a threat to Lockheed Martin Corp’s F-35s. It has threatened to impose sanctions on Ankara under its Countering America’s Adversaries Through Sanctions Act (CAATSA), the possibility of which has spooked investors and helped cause a selloff in the lira this year. Demir said such sanctions could have a brief impact on Turkey’s defense industry. “Our defense industry produces parts for the F-35, so in the event of sanctions being imposed, our industry would experience a rough patch, but we’ll then get passed this,” he said.
Chinese Consumers Shun All American Products As Nationalism Soars -- Since President Trump escalated the trade war last month by slapping a 25% tariff on $200 billion worth of Chinese goods, and is on the verge of taxing the remainder, Beijing has spawned nationalist sentiment across the country that has left many Chinese consumers shunning American products, reported Reuters. According to a new poll conducted by London-based advisory firm Brunswick, which surveyed 1,000 Chinese consumers, 56% of respondents said they had avoided American products, while 68% said their impression of American firms has become increasingly negative. "This poses a significant bottom-line risk to US companies as three in four Chinese consumers say they often buy products from American businesses," Brunswick said on Wednesday.Beijing's call to nationalism is a significant shift in China's negotiation strategy with Washington. In a series of editorials and op-eds published early last month, Chinese state media slammed what it labeled the Trump administration's "greed and arrogance," called for a "people's war" targeting the US "with precision" as China begins a "fight for a new world.""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 nationalist, state-owned Global Times tabloid wrote.Urging indirect boycott of US goods and services, the editorial slammed Trump and suggested a nation-wide uprising against the US aggression:"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.' "Whether this means a renewed collapse in Chinese iPhone sales or the boycott of Kentucky Fried Chicken, nationalism, driven by Beijing, sparked by President Trump's trade war, is likely to have a significant effect on Wall Street's performance - as a reminder, 30% of S&P500 revenues from international sales in 2017 came from China, a number that is set to tumble.
Trade War Nightmare- China Farm Imports From America Have Just Crashed - The Ministry of Agriculture and Rural Affairs of the People's Republic of China published new data Monday that shows agricultural imports from the US have fallen, as Chinese buyers shift supply chains out of the US to other countries because of the deepening trade war.In the first five months of 2019, imports of agricultural products from the US crashed 55.3% YoY. Much of decline was due to a 70.6% YoY decline of soybeans in the same period.Chinese importers went to Brazil, Argentina, and ASEN countries (Thailand, Indonesia, Malaysia, Singapore, Philippines, Vietnam, Brunei, Myanmar (Burma), Cambodia, and Laos). Data showed imports from the EU, Australia, and Canada also jumped in the first five months as Chinese buyers ditched American products.A report last week by yicai.com showed cotton imports from the US reached 60% of forecasts because of the tariffs, along with declining spot prices.With cotton trade between the US and China on the decline, this could spell near term trouble for American producers because 17% of their total cotton exports route to China. Ma Wenfeng, an agriculture analyst, told the Global Times on Monday, that China has quickly diversified its import sources away from the US to ensure domestic supply continues. "Overall, China mostly relies on domestic cotton for its textile industry," Wenfeng said, adding that China has undertaken reform to reduce its dependence on American products.
US Set To Delay New China Tariffs... And Why This Is The Worst-Case Market Scenario - Over the weekend, when previewing the most likely outcome of the Trump-Xi talks, Goldman's political analyst Alec Phillips said that "a commitment to re-engage seems the most likely outcome. US officials, including President Trump and US Trade Representative Lighthizer, have emphasized their interest in restarting talks." As Phillips further noted, "in the two analogous face-to-face meetings that President Trump previously held with foreign leaders—with European Commission President Juncker in July 2018 and President Xi in December 2018—he agreed to postpone tariff increases in return for an unspecified commitment to negotiate an agreement. This seems to be the most likely outcome once again."It appears that for once Goldman was right, because as Bloomberg reported moments ago, citing people familiar with the plan, "the U.S. is willing to suspend the next round of tariffs on an additional $300 billion of Chinese imports while Beijing and Washington prepare to resume trade negotiations." This tentative agreement was reached during a discussion of the broad outline of the Trump-Xi agenda in a Monday phone conversation between Robert Lighthizer, the U.S. trade representative, and his counterpart in Beijing, Vice Premier Liu He, which call was described by the American readout as "productive."On the other hand, the probability of an actual breakthrough besides delaying new tariffs is virtually nil as "the U.S. won’t accept further conditions on tariffs as part of reopening negotiations and no detailed trade deal is expected from the leaders’ summit."As a reminder, it was a critical Chinese pre-condition to resume negotiations that the US completely eliminate already implement tariffs; it now appears that that won't happen. So what will happen once talks resume? According to the Bloomberg sources, "although each side still wants significant concessions from the other, both agreed to dial down the tit-for-tat responses and aim for an extended truce that could soothe financial markets." Even so, it was not clear if they would set a definite timetable for their tariff truce. The immediate paradox is that the market has interpreted this as negative news with the S&P sliding to LOD, because avoiding a worst case scenario and preventing more tariffs is precisely the one thing that could stop Powell from cutting rates by 25bps or 50bps in July, in the process tightening financial conditions sharply, and causing the market - which had already priced in 100% odds of a July rate cut - to plunge. The irony: the best outcome for Trump, who is now obsessed with all time highs in the S&P, at this junction is to force China's hand and to escalate the trade feud, which would then "force" him to go all in on China tariffs, in the process also forcing the Fed to start the easing cycle, and push stocks higher.
Mnuchin: ‘We were about 90% of the way’ on China trade deal and there’s a ‘path to complete this’ - Treasury Secretary Steven Mnuchin told CNBC on Wednesday the U.S. and China were close to a trade deal, and he’s optimistic that progress can be made during weekend talks between President Donald Trump and China’s Xi Jinping.“We were about 90% of the way there [with a deal] and I think there’s a path to complete this,” he told CNBC’s Hadley Gamble in Manama, Bahrain.He said he’s confident Trump and the Chinese president can make progress in stalled trade talks at the Group of 20 meeting. “The message we want to hear is that they want to come back to the table and continue because I think there is a good outcome for their economy and the U.S. economy to get balanced trade and to continue to build on this relationship.”He did not provide any detail on what the final 10% of an agreement might entail, or what the sticking points are to completing a deal.Trump is meeting his Chinese counterpart on Saturday at the G-20 summit in Osaka, Japan. The outcome of the meeting could be pivotal for the global economy and financial markets, which has been rattled by 18 months of trade tensions between the economic giants and an escalation of tariffs on each other’s imports.Officials have yet to negotiate a breakthrough, but there are hopes that a meeting between the two presidents could help the discussions. A Bank of America Merrill Lynch survey of investors found that about two-thirds expectno deal this weekend, but there would be no new tariffs either.“I’m hopeful that we can move forward with a plan,” Mnuchin told CNBC. “President Trump and President Xi have a very close working relationship. We had a productive meeting at the last G-20.”At their meeting in December at the G-20 in Buenos Aires, Trump and Xi reached a truce in the trade war, but talks in May broke down, and the countries added additional tariffs. Mnuchin said he was hopeful a deal could be struck by the end of the year but said “there needs to be the right efforts in place.”
China’s Xi is reportedly expected to present Trump with terms for settling trade deal - Chinese President Xi Jinping is expected to present President Donald Trump with the terms it expects the U.S. to meet for Beijing to settle the contentious trade fight between the two nations, The Wall Street Journal reported Thursday, citing Chinese officials. Among the conditions is a demand that the U.S. lift its ban on the sale of U.S. technology to Huawei Technologies, Chinese officials with knowledge of the plan told the Journal. China also expects the U.S. to remove all tariffs and drop efforts to get China to buy more U.S. exports. Trump is in Japan to meet with world leaders amid a flurry of international crises, tense trade negotiations and a mounting global to-do list. Trump is attending the annual Group of 20 summit and then is going to South Korea, where he’ll address the standoff with North Korea over its nuclear weapons program. Air Force One touched down at Osaka International Airport in a rainstorm ahead of high-stakes meetings with Russia’s Vladimir Putin, China’s Xi, and a host of others at the gathering of the leaders world’s largest economies at the two-day G-20 summit. The Chinese Ministry of Commerce maintained a firm stance against the U.S. during a weekly press conference Thursday. “We urge the U.S. to immediately cancel its pressure and sanction measures on Huawei and other Chinese companies, and push for the stable and healthy development of China-U.S. trade relations,” Gao Feng, spokesman for the Ministry of Commerce, said in Mandarin, according to a CNBC translation. Gao added that China is unchanged on its position on the trade dispute, as laid out by lead negotiator and Vice Premier Liu He in May.
Trump might not need to hear much to strike a truce with China: Senior official - President Donald Trump wouldn’t need to hear much from Chinese officials to at least strike a truce in the trade war between the two sides, a senior administration official told CNBC. Trump and Chinese President Xi Jinping are set to meet Saturday at the G-20 meeting in Osaka, Japan, with expectations running high that the two leaders can strike some bargain that at least puts the tit-for-tat tariff exchange on hold. Administration officials differ on whether a truce can be struck. However, one official said that some type of respite in the tensions is the baseline case in the White House and that truce talk is more than speculation. One official said that Trump is closely watching the stock market, which has stumbled through the week amid rampant speculation over what will happen at the summit. The market was set to open higher Friday but is on its way to a loss for the week after three straight weeks of gains. The official also said that the main thing that would void a truce would be if Xi said he would not willing to enforce any deal or write it into Chinese law. Trump is meeting with other officials at the summit but has continued to tweet about a variety of matters, including the Democratic presidential debates, and his view on the markets.
Massive Pig Ebola Epidemic Gives Trump Big Leverage In China Trade Deal - Kyle Bass- The threat to food availability and security from Chinese pig Ebola and fall armyworm will prevent China from aggressively using tariffs as an offensive weapon against the U.S. over the coming year. Just as the poor structure of China’s leveraged economy necessitates that they return to the negotiating table with the U.S. — the largest buyer of its goods — food insecurity in China will oblige them to put aside their main retaliatory tool and start earnestly negotiating with the U.S.President Trump needs to both recognize his leverage in these trade talks and have the confidence that China’s primary source of counter-leverage has a short expiration date.The structural state of China’s economy is in peril after a decade of reckless credit growth. Following the great financial crisis, the Chinese government pursued economic growth at all costs, which has left them with high financial leverage and bad debts. As a result, China’s U.S. dollar shortage has become acute. These structural problems leave the Chinese economy and financial system vulnerable to a slowdown. In response to the imposition of U.S. tariffs, China retaliated by imposing tariffs on 99% of all U.S. agricultural exports. These were devised to hurt senators who represent agricultural states ahead of the 2020 election. Understandably, U.S. farmers and their political representatives have reacted with great alarm. Currently U.S. pork exports to China are subject to a 62% tariff and soybeans are subject to a 27% tariff, while chicken exports are outright banned. U.S. farmers are hoping these tariffs will be lifted imminently as part of an eventual trade deal. Regardless of the outcome of negotiations between Presidents Trump and Xi at the upcoming G-20 meeting in Osaka, Japan on June 28, the pain inflicted on U.S. farmers by China is just short-term and soon will be over. The terrible reality for the Chinese is that China is facing an unprecedented combination of agricultural challenges: Chinese pig Ebola (also known as African swine fever) and fall armyworm. These threats have already impacted Chinese agricultural production and will take an even greater toll in 2020.
Forget China – it’s America’s own economic system that’s broken - Robert Reich -- Xi Jinping might possibly agree next weekend on further steps to bring down China’s trade imbalance with the US, giving Donald Trump a face-saving way of ending his trade war. But Xi won’t agree to change China’s economic system. Why should he?The American economic system is focused on maximizing shareholder returns. And it’s achieving that goal: on Friday, the S&P 500 notched a new all-time high. But average Americans have seen no significant gains in their incomes for four decades, adjusted for inflation. China’s economic system, by contrast, is focused on maximizing China. And it’s achieving that goal. Forty years ago China was still backward and agrarian. Today it’s the world’s second-largest economy, home to the world’s biggest auto industry and some of the world’s most powerful technology companies. Over the last four decades, hundreds of millions of Chinese people have been lifted out of poverty. The two systems are fundamentally different. At the core of the American system are 500 giant companies headquartered in the US but making, buying and selling things all over the world. Half of their employees are non-American, located outside the US. A third of their shareholders are non-American. These giant corporations have no particular allegiance to America. Their only allegiance and responsibility is to their shareholders. They’ll do whatever is necessary to get their share prices as high as possible – including keeping wages down, fighting unions, reclassifying employees as independent contractors, outsourcing anywhere around world where parts are cheapest, shifting their profits around the world wherever taxes are lowest, and paying their top CEOs ludicrous sums. At the core of China’s economy, by contrast, are state-owned companies that borrow from state banks at artificially low rates. These state firms balance the ups and downs of the economy, spending more when private companies are reluctant to do so. They’re also engines of economic growth making the capital-intensive investments China needs to prosper, including investments in leading-edge technologies. China’s core planners and state-owned companies will do whatever is necessary both to improve the wellbeing of the Chinese people and become the world’s largest and most powerful economy.
US pressure on Seoul over Huawei taps into fears of North Korea - The United States is turning up the heat on its ally South Korea over Huawei, playing on Seoul’s fears of losing access to the intelligence that helps it keep a check on its bellicose northern neighbour. The pressure campaign, part of a broader effort by Washington to isolate the Chinese tech giant, highlights the dilemma faced by the administration of Moon Jae-in as it tries to maintain a precarious balance between its security ally, the US, and its top trading partner, China. Among the closest US allies in Asia, Seoul relies on Washington’s intelligence-gathering capabilities to keep tabs on the bellicose North, with which it fought a civil war from 1950-1953 that left up to 4 million people dead. Under a mutual defence pact signed in the aftermath of the conflict, South Korea hosts 28,500 US troops on its soil as a bulwark against provocations by the North, with which it remains technically at war. “Many people in South Korea are very much concerned that if the Moon Jae-in government does not participate in the US-led anti-Huawei campaign, there will be no exchange of military information between the two countries,” said Kim Jong-ha, a security expert at Hannam University in South Korea’s Daejeon. “Further, this could eventually lead to a breakdown of the alliance.”
The Confused U.S. Messaging Campaign on Huawei --For the past several months, American policymakers have sought to convince allies, partners and potential partners to ban Chinese telecommunications company Huawei from supplying the entirety of, or components for, 5G communications networks around the world. This messaging campaign has centered primarily around concerns that Huawei could assist the Chinese government in spying on other countries or even shutting down or manipulating their 5G networks in a warlike scenario.Many of the nations at which this U.S. diplomatic messaging is aimed, however, remain unconvinced. The current conversation over how to manage the risks from Huawei’s supplying of 5G systems depends much on one’s perspective, as many countries with relatively similar data have come to notably different conclusions about the policies needed to mitigate those risks. Yet the United States’s international messaging on this issue—to allies, partners and potential partners alike—blurs the line between economic and national security risks, and it threatens to undermine U.S. efforts to message these risks in the process. Risk mitigation depends not just on one’s capacity to respond to and prepare for risk in a certain way but also on one’s assessment of risk in the first place—mainly, how one assesses its likelihood and severity. In this case, there are five main categories of risk with respect to Huawei and 5G. How a party views these risks depends on how it views its own relationship with China. First, there is the well-publicized risk that Huawei equipment could provide an espionage platform for Chinese government actors. To some, the fact that Huawei exists within a system in which the Chinese Communist Party (CCP) has broad discretionary tools that may be used to compel assistance with national security matters is cause to avoid the company altogether—along with other Chinese companies. Second, and relatedly, is the war risk. Alternatively thought of as the crisis risk, this acknowledges the possibility that Huawei, in a period of high tension or a warlike scenario, could be compelled by the Chinese government to intercept 5G communications, tamper with them or turn off the underlying systems altogether. Under such a hypothetical crisis scenario, Huawei could enhance China’s military and intelligence posture. Third, there is the generic cybersecurity risk. All complex, code-based systems today have vulnerabilities. This opens the door for exploitation by cyber deviants. The March 2019 report from the U.K.’s Huawei Cyber Security Evaluation Centre (HCSEC) to the U.K. national security adviser underscores that Huawei system code, along with the company’s system development and maintenance processes, results in a high number of vulnerabilities that go unpatched for prolonged periods of time.
Trump Relents on Huawei in China Truce, Reviving Stalled Talks - President Donald Trump said he eased restrictions on China’s most prominent technology company as part of a trade truce with Beijing, removing an immediate threat looming over the global economy even as a lasting peace remains elusive. Trump said Chinese President Xi Jinping had promised to buy “tremendous” amounts of U.S. agricultural products in exchange. “We’re going to give them a list of things we’d like them to buy,” Trump said at a news conference following the Group of 20 summit in Osaka, Japan. But Chinese official media reports said only that the U.S. president hopes China will import more American goods as part of the truce.After Trump and Xi met at the G-20 on Saturday, the two countries plan to restart trade talks that broke down last month. Trump told reporters he wouldn’t put additional tariffs on China for the “time being,” and that he’ll allow U.S. companies to supply Huawei Technologies Co. The Commerce Department last month blacklisted the company for national security reasons. The Trump administration has been lobbying allies around the world not to buy Huawei equipment, which the U.S. says could be used for Chinese espionage. The company has denied the allegation. China has said it wanted Huawei removed from Commerce’s blacklist as soon as possible and has accused the U.S. of unfairly using state power to harass a private company. “U.S. companies can sell their equipment to Huawei,” Trump said. “We’re talking about equipment where there’s no great national security problem with it.” Huawei reacted positively to the news on its verified Twitter account: “U-turn? Donald Trump suggests he would allow #Huawei to once again purchase U.S. technology!” But in the U.S., Senate Minority Leader Chuck Schumer, a New York Democrat, said the decision damages U.S. negotiating efforts on trade. “Huawei is one of few potent levers we have to make China play fair on trade,” Schumer said Saturday in an emailed statement. “If President Trump backs off, as it appears he is doing, it will dramatically undercut our ability to change China’s unfair trades practices.”
Trump says ‘there will be no reduction in the tariffs’ currently imposed against China - President Donald Trump said the 25% tariffs currently imposed on $250 billion in Chinese goods will not be reduced, after he met with President Xi Jinping at the G-20 summit in Japan and agreed to hold off on raising levies. Trump agreed to restart trade negotiations, which collapsed in early May, and let Chinese tech giant Huawei buy products from U.S. companies so long as it does not post a threat to national security. The president said he agreed to let Huawei buy U.S. products “at the request of our high tech companies.“ Trump also said Xi agreed to increase purchases of American agriculture goods during the negotiations. He added that he was in no hurry to reach a deal. The truce reached in Osaka on Saturday between the U.S. and China was largely expected by Wall Street. Whether or not a deal can be reached, however, is another question. The Eurasia Group has forecast only a 45% chance that Beijing and Washington reach a deal by the end of the year. The issue of intellectual property protection remains a major sticking point between the two sides. Goldman Sachs has said its base case remains a 10% tariff on the remaining $300 billion worth of Chinese exports to the U.S., which is lower than the 25% rate proposed the United States Trade Representative. More than 600 U.S. companies, including Target and Walmart, had urged Trump not to impose additional tariffs, warning that such a move could cost 2 million American jobs.
Made in Vietnam: US-China tensions spark a manufacturing shift but not without growing pains Multinational companies are starting to question whether it’s time to shift production out of China due to the ongoing trade war between Washington and Beijing. Many firms are already making the move to other countries, with Vietnam as one of the major beneficiaries of tensions between the world’s two largest economies. President Donald Trump is set to meet with Chinese President Xi Jinping at the G-20 summit in Japan later this week, where the two leaders are expected to restart stalled trade talks. However, if talks were to prove unsuccessful the White House has threatened to place 25% tariffs on an additional $300 billion worth of Chinese goods, essentially all remaining imports into the U.S. from China. Some companies, such as Brooks Running — which is part of Warren Buffett’s Berkshire Hathaway — are not waiting to see if the additional China tariffs will go into effect. CEO Jim Weber said back in May that Brooks would be “predominantly in Vietnam by the end of the year.” He also said about 8,000 jobs will move there from China. Such relocation plans raise the question of whether Vietnam can become the new China. CNBC’s Carl Quintanilla reports from Hanoi, ahead of the Trump-Xi meeting, with a look at Vietnam’s manufacturing boom and whether it can be sustained.Vietnamese firms are starting to grow to try to accommodate the influx of companies, mostly apparel and shoe makers. Textile firm TNG Investment & Trading told Quintanilla that it’s never seen an expansion like this before. Last year, the firm hired 3,000 employees, bringing its total to 15,000. TNG’s Linh Nguyen said it had to build an apartment complex just to accommodate the additional employees. “In order to grow the business, it’s more important for us to build a home for the people than actually building a factory.”The demand for technical skills is growing in Vietnam, and the Vietnamese government has a goal of training 2 million people in vocational schools.
Trump threatens Vietnam, which has been benefiting from U.S. tariffs on China - One of the critiques of the Trump administration’s tariff policy on China is that while it raises the cost of doing business in one low-cost country, it just pushes multinationals to do business in another. Some evidence has emerged that companies have taken business elsewhere after the 25% tariffs imposed on $200 billion of Chinese goods. According to data from UBS, the first $50 billion of Chinese goods subject to the 25% tariff rate saw a 30% nosedise in exports, and the market share of Chinese exports saw the biggest decline in years. While the Chinese market share of U.S. imports between October and March dropped by 1.7 percentage points, Mexico’s rose by a half point, and Vietnam’s gained by almost the same, according to the UBS data. Now, President Donald Trump is saying he might go after Vietnam, as well. In an interview with Maria Bartiromo on Fox Business Network, Trump replied that the Southeast Asian country is in the cross-hairs of U.S. trade policy. “Well, a lot of companies are moving to Vietnam, but Vietnam takes advantage of us even worse than China,” Trump said. According to the U.S. Trade Representative, the U.S. imported $47.8 billion of Vietnamese goods and services last year, while it exported $10.5 billion’s worth. Asked bluntly if he wants to “tariff” Vietnam, Trump did not say no. “Well, we’re in discussions with Vietnam. Vietnam is almost the single worst – much smaller than China, much, but it’s almost the single worst abuser of everybody,” eliciting a “wow” from his interviewer. Trump did acknowledge that Vietnam was a large buyer of West Virginian coal, “which makes me happy.”
Oops: Elaine Chao Caught Pimping Her Family Business with China - In a normal presidential administration—hell, in a normal professional setting of any kind—it would be considered inappropriate to bring one‘s family members to official work meetings and/or on business trips. But of course, the Trump administration is not normal. Rather, it‘s a family affair, the primary goal of which is to enrich Donald Trump and the people who surround him—who, among others, include his not-very-bright son-in-law. That M.O. starts at the top with the grifter-in-chief, but it also extends to dozens of current and former cabinet members who’ve seen no issue with taking their wives on taxpayer-funded European vacations, using a government plane to get a better shot of the solar eclipse, plunking down $31,000 on dining-room sets, and allegedly planningwork travel based on a “desire to visit particular cities or countries.” So it’s not entirely surprising that Transportation SecretaryElaine Chao thought it would be no big deal to bring her relatives—who happen to have major business interests in Beijing—to meetings with government officials during a visit to China in the fall of 2017, but unfortunately for Chao, not everyone in government has adopted Team Trump’s way of thinking.
As Pompeo heads to Delhi, the US-India relationship is at a critical juncture The partnership with India is one of the few U.S. relationships that has deepened notwithstanding transitions from the Bush to the Obama to the Trump administrations. But a number of differences are coming to a head over the next few months that could stall or even derail progress. As Secretary of State Mike Pompeo plans to head to India next week, and President Donald Trump meetsrecently re-elected Prime Minister Narendra Modi in Japan during the G20 summit, both these convergences and divergences will be on the agenda. If not handled with care, the latter could overshadow the former, with lasting consequences. Over the last two years, there has been steady progress in the U.S.-India relationship. Strategically, both sides have seen the other as playing a crucial role in their Asia strategies—for the U.S., its Free and Open Indo-Pacific strategy; for India, its Act East policy.. This has paved the way for deeper diplomatic, defense, and security cooperation. The two countries established a ministerial-level 2+2 defense and diplomatic dialogue last year, their highest-level institutionalized strategic dialogue. Senior bureaucrats and military officials now meet regularly, and their various security dialogues have continued to meet on issues such as defense technology, cyber security, and counterterrorism. Liaisons between the Indian navy and U.S. Naval Forces Central Command in Bahrain, and the countries’ defense innovation units, are being established. A series of agreements—negotiated for years—that would facilitate greater interoperability and technology transfer have finally been signed. The U.S. and India have operationalized the Logistics Exchange Memorandum of Agreement (LEMOA), implemented the Helicopter Operations from Ships other Than Aircraft Carriers (HOSTAC) program, and signed the Communications Compatibility and Security Agreement (COMCASA). They are also negotiating the Industrial Security Annex that will enable greater cooperation between the defense industries, and have restarted talks on the Basic Exchange and Cooperation Agreement that could pave the way for geospatial intelligence sharing. Their diplomatic engagements also involve other countries. The two countries have upgraded their trilateral with Japan, with the three leaders meeting last fall, and restarted and continued quadrilateral consultations that also include Australia. In 2018, after a decade, they revived their air force exercise (with Japan present as an observer), and this year, they are expected to start a tri-services exercise. In addition, earlier this year, the Indian navy joined USAFRICOM’s Cutlass Express exercise for the first time, and American observers (along with some from New Zealand) were included in the Australia-India naval exercise. Moreover, the American and Indian navies undertook a group sail with Japan and the Philippines in the South China Sea recently.
Trump calls India’s tariff hike ‘unacceptable,’ demands its withdrawal - U.S. President Donald Trump on Thursday asked India to withdraw retaliatory tariffs that New Delhi imposed this month, calling the duties “unacceptable”. India slapped higher tariffs on 28 U.S. products following Washington’s withdrawal this month of key trade privileges for New Delhi. “I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high tariffs against the United States, just recently increased the tariffs even further, ” Trump said on Twitter. “This is unacceptable and the tariffs must be withdrawn!” said Trump, who will meet Indian Prime Minister Narendra Modi at this week’s G20 summit in Japan. India’s trade ministry did not immediately respond to a Reuters email seeking comment. Trump’s remarks could further worsen a trade row that has led to tit-for-tat tariffs from India and the United States and created an unease over the depth of their security alliance. U.S. Secretary of State Mike Pompeo, who was in New Delhi on Wednesday, sought to reduce heightened trade tension with India, promising a renewed focus on negotiating better ties, but giving few specifics of how they would overcome disputes over trade and investment. Trump scrapped trade privileges for India under the Generalized System of Preferences (GSP), under which New Delhi was the biggest beneficiary that allowed duty-free exports of up to $5.6 billion. India initially issued an order in June last year to raise import taxes as high as 120% on a slew of U.S. items, incensed by Washington’s refusal to exempt it from higher steel and aluminium tariffs. But New Delhi repeatedly delayed raising tariffs as the two nations engaged in trade talks. Trade between them stood at about $142.1 billion in 2018.
Indians can worry less as the US denies capping H-1B visa quota Dear Indian H-1B aspirants, you can breathe easy. Earlier this month, reports had suggested that the US was looking to curb the number of H-1B visa recipients from India as a tit-for-tat response for the country’s data localisation efforts, which were hurting North American tech giants like Visa and MasterCard.However, during his ongoing three-day visit to the country, US secretary of state Mike Pompeo and the Indian government confirmed that there were no such plans, India Today reported today (June 26).“The United States’ global leadership in technology has been made possible, in part, by its ability to attract the most talented workers from around the world,” India’s IT trade association Nasscom said in a statement on June 20, when the headlines about restricting H-1B visa allocations first floated. “If US policy makes it more difficult to hire advanced tech workers, it will only weaken the US companies that depend on them to help fill their skills gaps, put jobs at risk, creating pressure to send technology services abroad.” The US bureau of labor statistics predicts that in 2020 there will be 1.4 million more software development jobs in the country than applicants who can fill them. By 2030, the US could lose out on $162 billion-worth (Rs 11 lakh crore) of revenues annually in the tech sector alone unless it finds more high-tech workers, a 2018 study by management consulting firm Korn Ferry found. Meanwhile, India could become the next tech leader since the country is poised to have a surplus of over a million high-skilled tech workers by 2030.
Mayors Vow To Obstruct ICE During Sunday's Immigration Raids - Just as we anticipated, mayors of some of the cities that will be targeted in the mass immigration raids expected to begin on Sunday have already vowed to do everything in their power to stymie ICE. According to the Hill, Chicago Mayor Lori Lightfoot said she would take "concrete steps" to support immigrant communities as the raids begin. And that involves cutting off access to Chicago PD databases, robbing ICE of one more resource to help them track down immigrant families that have received deportation orders. Lightfoot said in a statement released via Twitter on Friday that she had directed Chicago Police Superintendent Eddie Johnson to terminate ICE’s access to the Chicago Police Department’s databases related to immigration enforcement activities.THREAD 1/ We are all aware of the threat from President Trump regarding raids by ICE, and in response, Chicago has taken concrete steps to support our immigrant communities. 2/ I have directed – and Superintendent Johnson has confirmed – that CPD has terminated ICE's access to CPD's databases related to federal immigration enforcement activities. 3/ I have also personally spoken with ICE leadership in Chicago and voiced my strong objection to any such raids. Further, I reiterated that CPD will not cooperate with or facilitate any ICE enforcement actions. 4/ Chicago will always be a welcoming city and a champion for the rights of our immigrant and refugee communities, and I encourage any resident in need of legal aid to contact the National Immigrant Justice Center (@NIJC). More info here: https://t.co/NTMAmhmBbn — Mayor Lori Lightfoot (@chicagosmayor) June 21, 2019 As WaPo reported last night, the ICE operation is expected to begin on Sunday. It's expected that 2,000 families facing deportation orders living in 10 cities with large immigrant communities, including Houston, Chicago, Miami and Los Angeles, will be arrested. President Trump first announced plans for the raids on Monday.
Trump delays ICE raids hoping for bipartisan plan — but doesn’t say what he’ll support - President Donald Trump announced Saturday that “at the request of Democrats” a planned roundup of undocumented immigrants will be delayed. In a tweet from Camp David, Trump said he ordered the delay for two weeks “to see if the Democrats and Republicans can get together and work out a solution to the asylum and loophole problems at the southern border.” But he warned that if the two sides cannot reach a deal — which he must bless before signing into law — “deportations start!” Both the House and Senate are set to take up bills next week to spend at least $4 billion more to deal with the influx of migrants at the southern border, but the measures do not include changes to immigration or asylum policy. It was unclear Friday how the House and Senate would reconcile differences between the measures, which leaders of both chambers say are needed to address humanitarian issues. Trump’s two-week offer could be aimed at affecting those talks. But Democrats have not been moved by his threats in the past, and Congress is only scheduled to be in session Monday through Thursday before going on recess through the remainder of Trump’s deadline. Roy argues for wall funding Volume 90% Speaker Nancy Pelsoi welcomed the delay in a tweet Saturday, but she did not mention Trump’s deadline. She also suggested that Democrats would not be willing to change asylum laws without addressing other broken parts of the immigration system. “Time is needed for comprehensive immigration reform. Families belong together,” the California Democrat tweeted.
Acting DHS Chief 'Sabotaged' ICE Raids By Leaking Plan To Washington Post- Since the Washington Post spoiled the surprise and published a report about the Trump Administration's plan to arrest thousands of migrant families who have been denied asylum - prompting the administration to cancel the raids - many have probably been wondering why somebody inside would break President Trump's longstanding policy of not telegraphing your moves in advance. Well, now that question appears to have been answered by the Washington Examiner: The acting head of DHS, Kevin McAleenan, reportedly leaked the details of the operation (he traveled alongside the WaPo reporter who broke the story earlier this week) in what sources described as a deliberate attempt to sabotage the raids. According to several sources who spoke with the Examiner, McAleenan had opposed the raids for months. The acting DHS head, who has been credited with pushing the policy of sending more agents to Guatemala, is said to be more concerned with what Congressional Democrats and the 'Never Trumpers' think of his performance than most other members of the administration. "I know he has not approved of this operation for months," one person familiar with those private conversations said during a phone call Saturday night. "The president wouldn’t leak that. ICE wouldn’t leak that. There’s only a few people involved in these discussions...the only one who could have shared the details of those operations were Kevin.""That’s our belief," a second official said when asked if McAleenan was behind the leak. "The secretary was not supportive from day one."
Deported parents may lose kids to adoption, investigation finds - As the deportees were led off the plane onto the steamy San Salvador tarmac, an anguished Araceli Ramos Bonilla burst into tears, her face contorted with pain: "They want to steal my daughter!" It had been 10 weeks since Ramos had last held her 2-year-old, Alexa. Ten weeks since she was arrested crossing the border into Texas and U.S. immigration authorities seized her daughter and told her she would never see the girl again. What followed — one foster family's initially successful attempt to win full custody of Alexa — reveals what could happen to some of the infants, children and teens taken from their families at the border under a Trump administration policy earlier this year. The"zero-tolerance" crackdown ended in June, but hundreds of children remain in detention, shelters or foster care and U.S. officials say more than 200 are not eligible for reunification or release. Federal officials insist they are reuniting families and will continue to do so. But an Associated Press investigation drawing on hundreds of court documents, immigration records and interviews in the U.S. and Central America identified holes in the system that allow state court judges to grant custody of migrant children to American families — without notifying their parents. And today, with hundreds of those mothers and fathers deported thousands of miles away, the risk has grown exponentially. States usually seal child custody cases, and the federal agencies overseeing the migrant children don't track how often state court judges allow these kids to be given up for adoption. Alexa's 15-month separation from her mother exposes the fragile legal standing of children under the care of the federal Office of Refugee Resettlement and a flawed, piecemeal system that can change the course of a child's life. It took 28 minutes for a judge in a rural courthouse near Lake Michigan to grant Alexa's foster parents, Sherri and Kory Barr, temporary guardianship. Alexa's mother and the little girl's immigration attorney were not even notified about the proceedings. Based on their experiences with Alexa, the Barrs had become convinced that Alexa's mom was a bad mother and that the little girl would be abused if she were reunited with her. The federal system that had custody of Alexa says the state courts never should have allowed foster parents to get that far, no matter how good their intentions.
Report highlights mistreatment of refugee children in US internment camps - A report this week by the Associated Press (AP) on conditions facing children at a Border Patrol station near El Paso, Texas, highlights the inhuman treatment of children under the Trump Administration’s savage anti-immigrant campaign. The AP, in an account that has not been widely reported elsewhere in the media, describes young teenage girls taking responsibility for caring for toddlers and infants who have been separated from their parents under the government’s drive to penalize undocumented immigrants fleeing the poverty and violence that have been stoked by American imperialism in their home countries. The legal team that spoke to the AP gained access to the facility in Clint, Texas, about 25 miles southeast of El Paso, after negotiations with federal officials. The lawyers interviewed 60 children, out of the total of 250 infants, children and teenagers at the station. They reported inadequate food, water and sanitation, amid other neglect of the most basic needs of toddlers and children less than one year old. The detention camp includes six children three years of age and younger, including three infants. There were many examples of children taking care of children. One girl explained, “A Border Patrol agent came in our room with a 2-year-old boy and asked us, ‘Who wants to take care of this little boy?’” A 14-year-old girl from Guatemala who had been holding two smaller children in her lap told the lawyers, according to the AP report, “I need comfort too. I am bigger than they are, but I am a child, too.” A father who is a US resident said that authorities had separated his daughter, who would be in second grade in a US school, from her aunt when they entered the country. He only found out where his daughter was when an attorney visiting the camp found his phone number written on a bracelet the little girl was wearing. “She’s suffering very much because she’s never been alone,” the father explained. The children at the Texas camp, held in conditions that undoubtedly prevail in hundreds of other facilities run by the federal government, are fed oatmeal, a cookie and sweetened drink for breakfast, instant noodles for lunch, and a burrito for dinner. They have had no fruits or vegetables, nor have they had a clean change of clothes or the opportunity to bathe for weeks.
'Crowding diseases' threaten migrant children held in US border protection facilities, expert says - Widespread hygiene problems at several US Customs and Border Protection facilities pose "a great many health risks" for the children housed in them, according to Dr. Howard Markel, a pediatrician and director of the University of Michigan's Center for the History of Medicine. In May, nearly 133,000 migrants, including more than 11,000 unaccompanied children, were arrested for crossing the border illegally, according to Customs and Border Protection data. Overcrowding at some US border facilities resulting from this spike in detentions could lead to a "health crisis," a team of doctors, lawyers and advocates warned last week. Describing conditions at the Ursula Processing Center in McAllen, Attorney Toby Gialluca said "virtually everyone we saw was ill," while Clara Long, a senior researcher for Human Rights Watch, saidthe unaccompanied minors being held at a Border Patrol station in Clint "had colds and were sick" and also "didn't have access to soap to wash their hands." The dangers are real, said Markel, who explained that "crowding diseases" easily spread when too many people share beds or too small a living space. Children who do not wash regularly are likely to pick up body lice and "some of those lice could carry typhus," said Markel. Fever, headaches and sometimes rash are common symptoms of epidemic typhus fever, which has the potential to spread rapidly among people living in close quarters, according to the US Centers for Disease Control and Prevention. Other possible risks include common colds and even influenza, said Markel, adding that while it is not the season, flu is a possibility at any time of year. As any parent knows, young children do not always practice good "respiratory hygiene," said Markel; They often fail to cover their mouths when coughing or sneezing and do not always wipe their noses. So respiratory illnesses can "very easily spread" in overcrowded situations. Crowding is associated with increased risks of tuberculosis, according to the World Health Organization. Diarrheal diseases, including contagious rotaviruscausing watery diarrhea, vomiting, fever and abdominal pain (mostly among infants and young children), are another risk when children are too tightly housed.
U.S. Officials Remove Most Children at Texas Border Facility After Reports of Filth, Illness, Lack of Food -The U.S. government has removed most of the children from a remote Border Patrol station in Texas following reports that more than 300 children were detained there, caring for each other with inadequate food, water and sanitation. Just 30 children remained at the station outside El Paso Monday, said Rep. Veronica Escobar after her office was briefed on the situation by an official with Customs and Border Protection. Attorneys who visited Clint last week said older children were trying to take care of infants and toddlers, The Associated Press first reported Thursday. They described a 4-year-old with matted hair who had gone without a shower for days, and hungry, inconsolable children struggling to soothe one another. Some had been locked for three weeks inside the facility, where 15 children were sick with the flu and another 10 were in medical quarantine. “How is it possible that you both were unaware of the inhumane conditions for children, especially tender-age children at the Clint Station?” asked Escobar in a letter sent Friday to U.S. Customs and Border Protection acting commissioner John Sanders and U.S. Border Patrol chief Carla Provost. She asked to be informed by the end of this week what steps they’re taking to end “these humanitarian abuses.” Lawmakers from both parties decried the situation last week. Border Patrol officials have not responded to AP’s questions about the conditions at the Clint facility, but in an emailed statement Monday they said: “Our short-term holding facilities were not designed to hold vulnerable populations and we urgently need additional humanitarian funding to manage this crisis.” Although it’s unclear where all the children held at Clint have been moved, Escobar said some were sent to another facility on the north side of El Paso called Border Patrol Station 1. Escobar said it’s a temporary site with roll-out mattresses, showers, medical facilities and air conditioning.Elizabeth Warren, Pramila Jayapal investigate John Kelly’s role with company that houses migrant kids - A pair of Democratic lawmakers demanded Thursday that the company operating the nation's largest unaccompanied migrant children's shelter explain how it came to hire former White House Chief of Staff John Kelly. Massachusetts Sen. Elizabeth Warren and Washington Rep. Pramila Jayapal sent a series of questions to the CEO of Caliburn International "in order to help inform (anti-corruption legislation) and better understand how General Kelly was appointed to the board of your company." The letter repeatedly cites a May 3 CBS News report that revealed John Kelly's position with the company, which operates a massive government-funded shelter in Homestead, Florida, as well as three others in Texas. The lawmakers, who said in a press release that they intend to investigate Kelly and Caliburn, set a June 20 deadline for responses to their questions.
No to concentration camps in America! - Along the US-Mexico border and in immigrant concentration camps within the United States, the Trump administration is committing crimes so depraved and sadistic that they have stained every branch of government, both parties and the entire political establishment with the mark of infamy. Hundreds of millions of people around the world are sickened by the rot at the core of American capitalism. Recent reports of conditions at detention facilities housing thousands of immigrant children expose systematic dehumanization and violence against children who have been torn from the arms of their parents and relatives. Dr. Dolly Lucio Sevier, a pediatrician who visited concentration camps in Texas last week, told ABC News that the jails are akin to “torture facilities,” and that children are forced to endure “extreme cold temperatures, lights on 24 hours a day, no adequate access to medical care, basic sanitation, water or adequate food.” A group of attorneys visiting detention centers in Texas last week witnessed rooms full of children without toothbrushes, diapers, sleeping pads or adequate food or water. Many children are sick with influenza and left untreated. Guards have forced older children to look after babies and denied the children the right to wash their hands or wash baby bottles. Children defecate near where they eat and are denied access to soap. Dr. Servier said the conditions are “tantamount to intentionally causing the spread of disease.” One lawyer saw guards get furious at children and take away sleeping pads because they lost a lice comb. A recent lawsuit revealed that guards refer to immigrants as “tonks” because of the sound a heavy metal flashlight makes when guards beat immigrants on the head. Agents in South Texas are turning away donations of diapers, soap and toys made by concerned local residents. Six children have died in custody in recent months.
As Border Chief John Sanders Resigns, Demands for Trump Officials to Be Held to Account for 'Government-Sanctioned Child Abuse' - A top immigration official in the Trump administration announced his resignation Tuesday amid public outcry over the treatment of migrant children in U.S. custody, prompting accusations that he and others are attempting to avoid responsibility for what critics call "government-sanctioned child abuse."Shortly after as it was reported that more than 100 children were transferred back to a detention facility in Texas where rampant abuse was found, news broke that Acting Commissioner for Customs and Border Protection (CBP) John Sanders is stepping downon July 5.Sanders did not make a public statement about his resignation or the hundreds of children in U.S. custody who have been living in unsanitary, unsafe conditions for weeks at government-run facilities around the country, instead sending a letter to his colleagues in which he praised the agency's "determination and can-do attitude" and its ability to "accomplish what others thought wasn't possible" under the Trump administration.Critics, however, were unequivocal in their view that Sanders and the rest of the administration should be held accountable for the treatment of the thousands of children in the detention centers. "They will spin the horrendous treatment of children as a 'mismanagement' problem," tweeted the legal aid organization Raices. "That's a complete dodge. This is an intentionally racist and violent regime who've targeted immigrants since they took office. They need to be held accountable."
More Than 100 Migrant Children Moved Back to Texas Facility Where Filthy Conditions, Illnesses Were Reported -- U.S. government officials say they’ve moved more than 100 kids back to a remote border facility where lawyers reported detained children were caring for each other and had inadequate food, water, and sanitation. An official from U.S. Customs and Border Protection said Tuesday that the “majority” of the roughly 300 children detained at Clint, Texas, last week have been placed in facilities operated by the Office of Refugee Resettlement. The official, who briefed reporters on the condition of anonymity, wouldn’t say exactly how many children are currently detained there. But the official says Clint is better equipped than some of the Border Patrol’s tents to hold children. Attorneys involved in monitoring care for migrant children who visited Clint last week said older children were trying to take care of toddlers, The Associated Press reported Thursday. They described a 4-year-old with matted hair who had gone without a shower for days, and hungry, inconsolable children struggling to soothe one another. Some had been locked for three weeks inside the facility, where 15 children were sick with the flu and another 10 were in medical quarantine. Many children interviewed had arrived alone at the U.S.-Mexico border, but some had been separated from their parents or other adult caregivers including aunts and uncles, the attorneys said. Clara Long, a senior researcher with Human Rights Watch, and other lawyers inspected the facilities because they are involved in the Flores settlement, a Clinton-era legal agreement that governs detention conditions for migrant children and families.
2020 Democrats visit Florida migrant children's shelter following debate - At least 11 Democratic presidential candidates visited a child migrant detention facility in Homestead, Fla., this week either before or after taking the debate stage in Miami.2020 Democrats Sen. Kamala Harris (Calif.), Sen. Kirsten Gillibrand (N.Y.), South Bend, Ind., Mayor Pete Buttigieg, former Colorado Gov. John Hickenlooper and former San Antonio Mayor Julián Castro visited the facility Friday morning, entering and exiting the processing building of the facility together.Author and 2020 candidate Marianne Williamson arrived later, and Sens. Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.) and Amy Klobuchar (D-Minn.) and New York Mayor Bill de Blasio (D) and former Texas Rep. Beto O’Rourke (D) visited the center earlier this week.While candidates were allowed inside the processing building on Friday, they were “denied” access to tour the facilities, Buttigieg said.Several candidates instead took turns speaking to a crowd outside the facility, with Harris slamming the Trump administration as one “that prefers to beat people down instead of lift them up,” adding, “That’s why we need a new president of the United States.”
House Democrats give $4.6 billion for Trump’s concentration camps - House Democrats voted overwhelmingly to provide the American immigration Gestapo with $4.6 billion dollars to round up and jail thousands of immigrant children in concentration camps yesterday. The vote is a political endorsement of Trump’s fascistic policy. It exposes the Democrats as a thoroughly anti-immigrant party that is hostile to the democratic rights of the entire working class. By a margin of 305 to 102 (129 to 95 among Democrats), the Democratic-controlled House passed a Senate version of the appropriations bill that provides carte blanche to Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) to systematically brutalize working class children without any additional regulation or oversight. A House version would have provided almost the same amount to ICE and CBP with token regulatory “guardrails” that the Trump administration ignores anyway. For example, while the House version would also have rubber-stamped the mass incarceration of immigrant children, it would have required the government notify Congress within 24 hours when an immigrant child dies. The Senate version, which passed by an 84–8 margin earlier this week, did not even include these meaningless oversight provisions. Donald Trump praised the Senate version as “tough,” and 34 of 47 Senate Democrats voted for it. Seven Democrats—including Bernie Sanders, Elizabeth Warren, Kamala Harris and Cory Booker—were too busy campaigning for president to vote on this monumental attack on immigrants. Announcing the agreement to support the Senate version, Democratic Speaker of the House Nancy Pelosi said, “In order to get resources to the children fastest, we will reluctantly pass the Senate bill. As we pass the Senate bill, we will do so with a battle cry as to how we go forward to protect children in a way that truly honors their dignity and worth.” What cynical lies! Democrats did not vote to provide resources to children but to provide guns and drones for border guards and to construct new concentration camps.
So Far, $1.57 Billion for Wall Yields 1.7 Miles of Fence - U.S. Customs and Border Protection has put up just 1.7 miles of fencing with the $1.57 billion that Congress appropriated last year for President Donald Trump’s wall along the Mexican border, a federal judge was told. A lawyer for the Democrat-controlled U.S. House of Representatives provided the information Tuesday to the judge in Oakland, California, who is weighing requests from 20 state attorneys general and the the Sierra Club to block Trump from using funds not authorized by Congress to build the wall. "The administration recently provided updated information to Congress on the status of its efforts as of April 30, 2019," the attorney, Douglas Letter, said in a court filing. "Based on that updated information, it appears that CBP has now constructed 1.7 miles of fencing with its fiscal year 2018 funding." That was 3/4 of a mile more than the administration reported at the end of February, Letter said. U.S. District Judge Haywood Gilliam had asked for the information at a May 17 hearing. A May 20 report by Customs and Border Protection on the status of the border wall specified that the $1.5 billion in 2018 funding is being used to update or build 80 miles of the border wall. That includes 14 miles of new and updated wall panels near San Diego, which is expected to be finished early next year, and 13 miles of new construction in the Rio Grande Valley. It’s not clear when that part will be finished. The report doesn’t state how much of the $1.5 billion has been spent to date, and doesn’t contradict Letter’s claim. The U.S. Army Corps of Engineers did hand out more than $800 million of the 2018 funding for new contracts, according to the report.
Horror across US-Mexico border with multiple parents, infants dead - Catastrophe struck Central American immigrants attempting to flee imperialist war and violence across the US-Mexico border last weekend, generating widespread outrage in the Latin American working class. On Sunday morning, US officials discovered the bodies of four people—a 20-year-old, a young child and two babies—dead in the Texas desert on the US side of the Rio Grande, known to Latin Americans as the Rio Bravo. The Guatemalan embassy has since identified the young people as Guatemalan nationals. Temperatures in the area reached 113 degrees Sunday. The FBI has announced it is reviewing the deaths, a highly unusual step which raises questions about whether the immigrants were murdered on the US side of the border. Regardless of the exact cause of death, the immigrants were killed by the policies of the Trump administration. The same day, a young father and his infant daughter drowned attempting to cross the river on the border of Brownsville, Texas and Matamoros, Tamaulipas. ElSalvador.com wrote, “Sunday afternoon, a Salvadoran and his 1 year, 11-month-old daughter were overcome by the current of the Rio Bravo in Matamoros, Tamaulipas, Mexico when they attempted to cross it to enter the US.” The father was named Óscar Alberto Martínez Ramirez, he was just 25 years old. His daughter, whose arm was draped around her father’s back when their bodies washed up on the shore, was named Valeria. The deaths have sparked mass outrage across Latin America and engendered even deeper hatred against the Trump administration and American imperialism. Practically every major newspaper across the region ran banner headlines describing the deaths and a litany of other horrors confronting immigrants fleeing north. Salvadorans were outraged after Mexican police assassinated a young Salvadoran woman traveling to the US along Mexico’s east coast this weekend. Elsalvador.com wrote: “María Senaida Escobar, 19 years old, died after being shot in the head when Mexican police from Veracruz intercepted the truck in which she and other immigrants were driving to the United States.” On Friday, Mexican National Guardsmen wielding assault rifles were filmed tearing two Nicaraguan mothers from the arms of their young daughters at the border with the US in Ciudad Juarez, Chihuahua. Photos of the National Guardsmen in battle gear frog marching the crying mothers back to Mexico was widely viewed on social media throughout Mexico and Central America and particularly in Nicaragua.
15,000 Mexican Troops Deployed To US Border - In an ongoing effort to stem the flow of illegal immigration into the United States and avoid tariffs from the Trump administration, Mexico has deployed approximately 15,000 National Guardsmen and soldiers to the border, according to AFP, citing the country's army chief. Mexico promised earlier this month to send 6,000 National Guardsmen to its southern border, and has promised to build more migrant detention centers and checkpoints to catch and deter northbound Central Americans. "We have a total deployment, between the National Guard and army units, of 14,000, almost 15,000 men in the north of the country," announced Defense Minister Luis Cresencio Sandoval while standing alongside Mexican President Andres Manuel Lopez Obrador. When asked if troops were detaining migrants to prevent them from entering the US, Sandoval said "yes." "Given that (undocumented) migration is not a crime but rather an administrative violation, we simply detain them and turn them over to the authorities" at the country's National Migration Institute. The government has faced criticism over migrant detentions at the northern border since an AFP photographer documented last week how heavily armed National Guardsmen in Ciudad Juarez forcefully stopped two women and a young girl from crossing the Rio Grande river into the United States.The policy is a shift from previous practice. The Mexican security forces had not typically detained migrants at the US border in the past.Fleeing chronic poverty and brutal gang violence in their home countries, the Central Americans crossing Mexico mostly lack migration paper –AFP Mexico signed a deal with the Trump administration on June 7, giving the country 45 days to show meaningful results in their efforts to counter the flood of migrants entering the United States.
Thousands more National Guard troops to arrive in Tijuana — Thousands more National Guard troops are scheduled to arrive in Tijuana on Friday to take unprecedented steps in securing Mexico’s northern border and preventing migrants from crossing into the United States. On Monday, Mexican army troops removed two migrants from Las Playas where other migrants have clashed with U.S. border agents in recent months. The troops, along with Mexico’s immigration agency, checked identification for people gathered near the Tijuana beach, according to a video recorded by human rights activist Hugo Castro. Apoelnar Botello said he was among those whose ID was checked by military troops. “They told me I can’t be this close to the border wall because I don’t have documents or permits. At one point, they told me I can’t be on the beach. What kind of documents do you need to stand on the beach?” he asked. Botello said he has a business in San Diego, remodeling kitchens and bathrooms, but he went home to Puebla in southeast Mexico to visit family. He admitted he was eyeing the porous fence near Playas and considering crossing back into the United States illegally by swimming around the fence that extends about 30 yards into the ocean. The increased military presence has made him decide to look for another place to cross, he said. “It’s too hot here right now,” he said referring to the increased patrols of police and military near the beach. “It’s necessary (to cross) because I have family on the other side and I’m the one who works provides for my family.” Human rights activists and attorneys say the deal struck between the United States and Mexico for migrants to wait in Mexico while their asylum claims are processed could run afoul of some people’s legal rights. U.S. authorities say migrants are abusing the system meant to protect people from persecution in order to improve their economic situation..
Pelosi clinches deal with progressives on border spending bill -- Speaker Nancy Pelosi clinched an 11th hour deal with progressives on an emergency border spending package on Tuesday, avoiding an embarrassing intraparty split and ensuring the bill’s passage. Top Democrats made several tweaks to the contentious $4.5 billion border funding bill, just hours before it will be considered on the floor, according to multiple lawmakers and aides. The newest version will include strict conditions requiring private detention facilities to meet certain standards of care within six months or risk losing their contract — the second time that progressive leaders have forced changes to the bill in the last two days amid reluctance to giving President Donald Trump any money for his immigration agenda. “We had to really push to make sure that we’ve got that kind of accountability built [into] it,” said Rep. Pramila Jayapal, co-chair of the Congressional Progressive Caucus. “You can’t just continue to say you need money, but not actually meet the standards that we’re laying out.” The Washington state Democrat announced that Democratic leaders and progressives had reached a deal on the latest changes just moments after stepping off the House floor, where she had huddled with Pelosi for several minutes. With the latest changes, top Democrats are now confident they will have overwhelming Democratic support on the floor after a rocky several days for the caucus.
Elizabeth Warren’s Pledge to End Private Prisons Sends Shares Reeling - Shares of private prisons GEO Group Inc. and CoreCivic Inc. took a hitFriday morning after presidential candidate Senator Elizabeth Warren tweeted about about her plan to terminate them. Warren, a Massachusetts Democrat, said in a tweet that “private prison companies have spent millions to turn our criminal and immigration policies into ones that prioritize making them rich instead of keeping us safe —with terrible consequences. Today I’m announcing my plan to end this private profiteering off of cruelty.” The plan calls for banning private prisons and detention facilities, stopping contractors from charging service fees for essential services, and expanding oversight. But with Republicans controlling the Senate, Warren will likely hit a wall with her proposal without some GOP support. Private prisons have been targeted by Warren in the past, when the senator said she was looking into the system’s approval process, saying the group accrediting operators appears to be a “conflicted party” that doesn’t hold facilities accountable.
Trump admin opens door to fundamental changes in healthcare benefits The Trump administration has opened the door to altering how healthcare benefits are provided to millions of American employees. A new rule, set to go into effect next year, will allow employers to provide workers with funds to shop for coverage on their own, an option that could dramatically upend employer-sponsored coverage.Instead of working with an insurer and allowing employees to pick from a few insurance options, employers will be able to funnel money into a standalone tax-exempt HRA (health reimbursement account) and employees could use those funds to shop for coverage on their own, either on the Affordable Care Act marketplaces or off. "Long term, this added flexibility may reshape a significant number of employer coverage offerings and result in sizable shifts from employer to individual coverage," Chad Brooker, an associate principal at Avalere who consults on healthcare reform and the impacts on business strategy, said in a statement.White House officials said the change provides more flexibility to employers and gives workers greater choice when choosing coverage. The White House expects 800,000 employers to choose this defined benefit contribution option, which is expected to affect 11 million employees and their families.The American Benefits Council cheered the move."We commend the Administration for taking what we believe is an important step toward greater flexibility in health care coverage," the employer group's president, James Klein, said in a statement.But others voiced their concerns about potential costs and access issues. Paul Fronstin of the Washington, D.C.-based Employee Benefit Research Institute said it may be overwhelming for some employees used to relying on their employers to do the bulk of the shopping for them or going to bat for them when an issue with the insurance carrier arises.
WaPo Doesn’t Want Voters to Know Medicare for All Will Cut Their Health Costs -- The Kaiser Family Foundation, a health policy think tank, polled people on their knowledge and opinions about Medicare for All and other healthcare reform ideas, and found all sorts of mistaken beliefs—most notably, that under Medicare for All, people would still pay deductibles, co-pays and premiums, and that they would be able to keep private insurance plans they currently have. On the other hand, Democratic voters are clear in the Kaiser survey that they want to hear from the candidates about decreasing healthcare costs, increasing access, protecting the ACA and implementing Medicare for All. Reporting on the Kaiser survey among others, the Washington Post(6/21/19) framed the story as a “disconnect” between Democratic candidates with “bold ideas to achieve the party’s long-held dream of ushering in health coverage for every American” and “many voters [who] are not focused on such lofty goals. They want something simpler — to pay less for their own healthcare.” The Post’s Amy Goldstein quoted a Democratic voter named Ron Jungling (whose wife happens to work as an insurance broker) who thinks Medicare for All won’t “keep costs down,” to illustrate the article’s contention that there is a “misalignment in candidates’ focus and, in some cases, their level of attention.” There’s definitely a misalignment here, but it’s not the one the Postdescribes—it’s the one between the reality of Medicare for All and the distorted caricature of it that healthcare industry-friendly and right-wing groups are actively trying to promote. As Medicare for All supporters routinely point out, universal access means affordable access; the cost of care and the availability of care are intertwined. And even candidates who aren’t pushing for full Medicare for All are talking about both access and costs. But the Post tried to spin the story into a false competition between the two.
Supreme Court to hear insurers' bid for $12 billion in Obamacare money (Reuters) - The U.S. Supreme Court on Monday agreed to decide whether insurers can seek $12 billion from the federal government under a program set up by the Obamacare law aimed at encouraging them to offer medical coverage to previously uninsured Americans.The justices will hear an appeal by a group of insurers of a lower court’s ruling that Congress had suspended the government’s obligation to make such payments. The insurers have said that ruling, if allowed to stand, would let the government pull a “bait-and-switch” and withhold money the companies were promised. Moda Inc unit Moda Health Plan Inc and other insurers that sued to try to compel the Department of Health and Human Services (HHS) to make the payments have said the government was supposed to help them recover from early losses they suffered after the 2010 passage of the Affordable Care Act under Democratic former President Barack Obama. The law, dubbed Obamacare, has enabled millions of Americans who previously had not medical coverage to obtain insurance. Other insurers involved in the case include Blue Cross and Blue Shield of North Carolina, Maine Community Health Options and Land of Lincoln Mutual Health Insurance Company. If the Supreme Court sides with the insurers, it could result in a significant one-time cash infusion for major companies such as Humana Inc, Anthem Inc and Centene Corp, according to a note by Evercore ISI. The insurers had previously written off the value of the payments. Payments would have come through the law’s so-called risk corridor program that was designed to mitigate insurers’ risks from 2014 to 2016 when they sold coverage to previously uninsured people who bought insurance on exchanges established under the Affordable Care Act.
Supreme Court allows foul language trademarks in F-word case (Reuters) - The Supreme Court on Monday struck down a longstanding U.S. ban on trademarks on “immoral” or “scandalous” words and symbols, ruling in a case involving a clothing brand with an indelicate name that the law violates constitutional free speech rights. The justices ruled against President Donald Trump’s administration, which defended the law that had been in place since 1905, and in favor of Los Angeles streetwear designer Erik Brunetti, who was turned down by U.S. Patent and Trademark Office when he sought to trademark his brand name FUCT. All nine justices agreed in the decision written by liberal Justice Elena Kagan that the prohibition on “immoral” trademarks ran afoul of the U.S. Constitution’s First Amendment right to free expression. However, three justices wrote dissents to say the bar on “scandalous” trademarks should have been upheld. The Supreme Court followed a course it took in 2017 when it struck down a similar law forbidding the registration of “disparaging” trademarks in a case involving an Asian-American dance rock band called The Slants, a name federal trademark officials had deemed offensive to Asians. When the 2011 trademark application for FUCT was rejected, the Patent and Trademark Office noted that brand name sounds like a profanity - sometimes politely called the “F-word” - though is spelled differently, and concluded that Brunetti’s products contained sexual imagery, misogyny and violence. “There are a great many immoral and scandalous ideas in the world (even more than there are swear words),” Kagan wrote in Monday’s decision, adding that the trademark law covers them all. “It therefore violates the First Amendment.”
Supreme Court keeps rule that strengthens the power of government regulators -- The Supreme Court on Wednesday refused to overturn a precedent that strengthens the power of government regulators in a closely watched case that could have had broad ramifications for federal agencies. The precedent is known as “Auer deference,” after the 1997 case Auer v. Robbins. Since Auer, the Supreme Court has held that courts should defer to agencies’ interpretations of their own rules if those rules are ambiguous. Though the top court retained the precedent, it did so while imposing limitations. “Auer deference retains an important role in construing agency regulations,” wrote Justice Elena Kagan, who delivered the opinion of the court. “But even as we uphold it, we reinforce its limits.” Justice Neil Gorsuch, who has been skeptical of Auer, wrote in a concurring opinion that while the rule stands, “the doctrine emerges maimed and enfeebled—in truth, zombified.” The facts of the case involved a Marine veteran, James Kisor, who argued that the Department of Veterans Affairs owes him retroactive disability payments dating back to the 1980s to cover treatments for post-traumatic stress disorder he developed from involvement in particularly gruesome fighting in Vietnam. Veterans Affairs argued that under its regulations it is only required to provide benefits to Kisor dating back to 2006. That interpretation was considered binding under Auer. Kisor argued that the top court should overturn Auer, saying that it gives government bureaucrats too much power. But the court refused to do so. Kisor’s argument united an unusual coalition of business, labor and immigrant rights groups, who all wrote briefs urging the justices to disavow Auer.
The Supreme Court just decided that a giant 40-foot cross on public land is 'secular' --The Supreme Court ruled that a 40-foot cross honoring World War I veterans can remain on public land in Maryland and continue to be maintained through taxpayer dollars, a major victory for religious groups amid debates over the public display of these symbols. While the decision was 7 to 2, those seven justices offered varying opinions about the cross and why they believed it didn't violate the First Amendment's establishment clause, which prohibits the government from favoring a particular religion.Justice Samuel Alito, who wrote the majority opinion, argued that the cross isn't just a religious symbol, but rather "a symbol of sacrifice in the war." He noted that many secular crosses already exist, citing the logos of the Red Cross, Blue Cross/Blue Shield, Bayer aspirin, and the Johnson & Johnson All Purpose First Aid Kit. "That the cross originated as a Christian symbol and retains that meaning in many contexts does not change the fact that the symbol took on added secular meaning when used in World War I memorials," Alito wrote. "The Cross has also acquired historical importance with the passage of time, reminding the townspeople of the deeds and sacrifices of their predecessors as it stands among memorials to veterans of later wars." However, not everyone agreed with the majority: Justices Ruth Bader Ginsburg and Sonia Sotomayor both dissented, with Ginsburg going so far as to read her dissent from the bench, a highly unusual step for the justice."The Latin cross is the foremost symbol of the Christian faith, embodying the 'central theological claim of Christianity: that the son of God died on the cross, that he rose from the dead, and that after his death and resurrection offer the possibility of eternal life," Ginsburg wrote. "For the same reason, using the cross as a war memorial does not transform it into a secular symbol, as the Courts of Appeal have uniformly recognized ... just as a Star of David is not suitable to honor Christians who died serving their country, so a cross is not suitable to honor those of other faiths who died defending their nation."
Supreme Court Decision Means Partisan Redistricting Issue Will Be Left To States : NPR - In a 5-4 decision along traditional conservative-liberal ideological lines, the Supreme Court ruled that partisan redistricting is a political question — not reviewable by federal courts — and that those courts can't judge if extreme gerrymandering violates the Constitution. The ruling puts the onus on the legislative branch, and on individual states, to police redistricting efforts."We conclude that partisan gerrymandering claims present political questions beyond the reach of the federal courts," Chief Justice Roberts wrote for the conservative majority. "Federal judges have no license to reallocate political power between the two major political parties, with no plausible grant of authority in the Constitution, and no legal standards to limit and direct their decisions."Roberts noted that excessive partisanship in the drawing of districts does lead to results that "reasonably seem unjust," but he said that does not mean it is the court's responsibility to find a solution. Now just two years away from the redrawing of new districts at the start of the next decade, legislators in states that have control of all levels of governments after the 2020 election may feel emboldened by the ruling, said Justin Levitt, an election law professor at Loyola Law School.
Opinion analysis: No role for courts in partisan gerrymandering (Updated) - SCOTUS Blog - The Supreme Court issued a decision today that could have a significant and long-term effect on elections and legislatures across the country. By a vote of 5-4, the justices ruled that courts should stay out of disputes over partisan gerrymandering – that is, allegations that redistricting maps were drawn to favor one political party at another’s expense. The practice of partisan gerrymandering may be distasteful, the court concluded, but it is a problem that politicians and the political process, rather than courts, should solve. The justices have struggled with the issue of partisan gerrymandering for years. Just last year, they sent two partisan-gerrymandering challenges – including an earlier iteration of the Maryland case – back to the lower courts without ruling on whether the maps were in fact the result of partisan gerrymandering. If the justices had hoped to push off a decision on partisan gerrymandering last term, they weren’t able to do so for long. In October 2018, a federal district court in Maryland held a trial to review the partisan-gerrymandering claims by the plaintiffs in that case, who are Republican voters challenging Maryland’s Sixth Congressional District, which begins in the outer suburbs of Washington, D.C., and stretches north and west to the state’s borders with Pennsylvania and West Virginia. The voters contend that, after the 2010 census, Democratic election officials only needed to make relatively minimal changes to the district. Instead, they emphasize, state officials moved out nearly 70,000 Republicans and moved in 24,000 Democratic voters, transforming the district from one where the Republican incumbent had won by a margin of 28 percent in 2010 to one in which he lost to a Democrat (and current presidential candidate), John Delaney, by a margin of 21 percent. The officials made this change, the voters argue, to retaliate against them for their support of Republicans, which violated the First Amendment. In his opinion for the court, Chief Justice John Roberts began by explaining that partisan gerrymandering “is nothing new”: In the United States, it dates back to before the country’s independence, and “the Framers were familiar with it at the time of the drafting and ratification of the Constitution.” Despite that awareness, Roberts continued, there is no sign that the Framers intended for courts to play a role in dealing with issues of partisan gerrymandering.
The Supreme Court just body-slammed democracy. More is coming. - The Washington Post -- “Is this how democracy is supposed to work?” That pointed question comes from Justice Elana Kagan’s dissent in Rucho v. Common Cause, the partisan gerrymandering decision the Supreme Court just handed down.There are, unfortunately, two answers to that question. The first is “Of course not.” And the second, implicit in the decision itself and the entire Republican war on voting rights, is this: “Democracy? Who cares about democracy?”The court also gave the administration what looks like a setback in a separate case, on their attempt to add a citizenship question to the Census. But don’t be so sure that won’t ultimately prove a win for Republicans, too.Let’s start with gerrymandering. In reviewing extreme gerrymanders in North Carolina and Maryland, Chief Justice John Roberts, writing for the five conservatives, ruled that there is literally no gerrymander too partisan for the federal courts to be allowed to review it:We conclude that partisan gerrymandering claims present political questions beyond the reach of the federal courts. Federal judges have no license to reallocate political power between the two major political parties, with no plausible grant of authority in the Constitution, and no legal standards to limit and direct their decisions.Writing for the four liberals, Justice Kagan was outraged:Of all times to abandon the Court’s duty to declare the law, this was not the one. The practices challenged in these cases imperil our system of government. Part of the Court’s role in that system is to defend its foundations. None is more important than free and fair elections. With respect but deep sadness, I dissent. The reality, as Roberts well knows, is that while there are some Democratic states that have gerrymandered aggressively, Republicans have been far more eager to do so, and at the moment they control more state legislatures. The court just told them to go nuts.
Opinion analysis: Court orders do-over on citizenship question in census case (Updated) SCOTUS Blog -- The fate of a question about citizenship on the 2020 census remains up in the air today. Although the Trump administration had hoped that the Supreme Court would clear the way for it to include such a question, the justices instead sent the issue back to the Department of Commerce. In a deeply fractured opinion, Chief Justice John Roberts joined the court’s four liberal justices in ruling that the justification that the government offered at the time for including the citizenship question was just a pretext. The decision left open the possibility that the Trump administration could try again to add the citizenship question, but the clock is ticking: The government has repeatedly told the justices, in urging them to resolve the case quickly, that it needs to finalize the census questionnaire by the end of this month. Only the first parts of the ruling were unanimous. The first laid out the facts and procedural history of the case, while in the second part the justices agreed that at least some challengers have a legal right – known as “standing” – to bring their lawsuit. Some of the states in the lawsuit have shown, Roberts recounted, that if households with residents who are not U.S. citizens are undercounted by even two percent, they will lose federal funding. The justices rejected the government’s argument that such losses are too hypothetical, because they would only happen if those households choose not to comply with the legal duty to return their census questionnaires out of fear that the information will be used against them – which, the government says, is not its fault. But this theory isn’t just speculation, Roberts concluded: It “relies instead on the predictable effect of Government action on the decisions of third parties” and is therefore enough to allow the challengers to sue.
Trump fumes as Supreme Court blocks census citizenship question - (Reuters) - The U.S. Supreme Court on Thursday handed President Donald Trump a stinging defeat, blocking his contentious citizenship question planned for the 2020 census because officials gave a “contrived” rationale and prompting Trump to suggest an extraordinary delay in the constitutionally mandated population count. Conservative Chief Justice John Roberts wrote the 5-4 ruling, joined by the court’s four liberals, that will make it difficult for the Trump administration to add the query even if officials offer a new explanation for its need, with the clock ticking toward the deadline for printing the census forms. The court upheld a key part of a federal judge’s January decision barring the question in a victory for a group of states including New York and immigrant rights organizations that challenged the legality of the administration’s plan. Critics have called the citizenship question a Republican ploy to scare immigrants into not taking part in the decennial population count and engineer an undercount in Democratic-leaning areas with high immigrant and Latino populations. That would benefit non-Hispanic whites and help Trump’s fellow Republicans gain seats in the U.S. House of Representatives and state legislatures, the critics said.
How on God’s green earth did Clarence Thomas just write an opinion on race and jury trials that was well to the right (or was it?) of Brett Kavanaugh, John Roberts, Samuel Alito, and even Neil Gorsuch? - Thomas does not believe that the Constitution should prohibit the state or the defense from striking down potential jurors on the basis of race. What’s even wilder is his reasoning for that claim. Thomas believes that the role of racism in jury trials (as well as society as a whole) is so intense—”racial prejudice exists,” Thomas writes in his dissent, “and can affect the fairness of trials”—that the only protection, or at least the main protection, a black person will have against that racism is his or her ability to strike down potential jurors who are white. Because “race matters in the courtroom,” he concludes, Thomas would “return to litigants one of the most important tools to combat prejudice in their cases.” That “return to litigants one of the most important tools” is a reference to racially based peremptory strikes, which were declared unconstitutional by the Court in the 1986 case Batson v. Kentucky. Peremptory strikes are decisions by the defense or the prosecution to strike a potential juror without having to give a reason. In Batson, the Court held that the prosecution could not use such strikes to strike jurors on the basis of race. Later, it extended that rule to the defense. Neither side can strike potential jurors on the basis of race. From the moment he joined the Court, Thomas has taken issue with Batson. In one of his very first cases, Georgia v. McCollum (1992), Thomas challenged the Court’s ruling that a white defendant should not be allowed to strike down potential jurors who were black. While the Court’s other conservatives focused their ire on the Court’s ruling that a defendant was a state actor and thus constrained by the Batson rule—Scalia called that claim “sheer inanity”—Thomas took the utterly novel approach of swapping out the actual white defendant in the case for a hypothetical black defendant. Suppose, he said, a black defendant was facing the prospect of a majority-white or all-white jury. Would we not want that defendant to have the power to strike down potential jurors who were white? Thomas made the added critical point that such claims about all-white juries being prone to racism can be sustained, under Strauder‘s reasoning, even “without direct evidence in any particular case.” In other words, even when there is no evidence of racial bias, a court can assume that jurors or juries will be biased for reasons of race.
Supreme Court to decide whether Trump can terminate Obama-era DACA program - The Supreme Court said Friday it will hear arguments over the legality of the Trump administration’s decision to terminate the Obama-era immigration program known as DACA, which shields certain young migrants brought to the United States illegally from deportation and allows them to receive work permits. The justices announced in an order that they will take up three cases on the matter in their next term, beginning in October. A decision is expected by next June, in the thick of the 2020 presidential campaign. The issue has already become an election flash point, particularly as immigration remains in the national focus. Many 2020 Democratic presidential hopefuls have pledged to reverse Trump’s decision to terminate the Deferred Action for Childhood Arrivals program, and to support the “dreamers,” as those protected by the program are known. During the Democratic debate on Thursday, Sen. Kamala Harris of California pledged to officially reinstate the program on the first day of her presidency if she is elected. Trump has not been able to end the program outright, after several lower courts rejected his efforts. His administration pushed the high court to reverse those rulings in the term that ends Friday. But the justices took no action, leaving in place the rulings that blocked the president’s efforts to dismantle the program. DACA recipients numbered about 700,000 when Trump ordered the program to wind down in September 2017, according to government figures. The top court has been deferential to the president’s authority in immigration matters. Last year, the justices ruled 5-4 that a version of Trump’s so-called travel ban was constitutional. Since then, Trump’s second nominee to the high court, Justice Brett Kavanaugh, replaced the less reliably conservative Justice Anthony Kennedy.
The Shadow Cabinet: How a Group of Powerful Business Leaders Drove Trump’s Agenda Trump took his seat at the head of a long table and thanked his guests for coming. It was the inaugural meeting of the Trump Leadership Council, a kitchen Cabinet and sounding board featuring representatives from many of America’s biggest industries: energy, finance, transportation, pharmaceuticals, agriculture, defense, construction and health care. The men and women around him were told the meeting would be totally confidential. The handful of Fortune 500 executives in attendance were outnumbered by leaders of privately held corporations and little-known companies that, under more normal circumstances, would never find themselves in a position to inform the thinking of the standard-bearer of a major political party. They weren’t the country-club, Chamber of Commerce types that had backed Bush and Rubio and Kasich; they were more on the fringe, including Obama-bashing coal barons, China-hating steel producers and modern-day oil-and-gas wildcatters. Both the largest potato producer and truck-stop operator were also there. “They weren’t conventional Republicans,” council member and Heritage Foundation economist Stephen Moore tells Rolling Stone. “They were more maverick business leaders.” Moore himself had carved out a position as the far right’s go-to economist, and has stirred up headlines saying things like “I’d get rid of a lot of these child-labor laws. I want people starting to work at 11, 12,” and that women shouldn’t be involved in sports unless they’re attractive. In the three years since that inaugural meeting, the council’s impact has been seen across the administration. At the urging of coal and oil industry representatives, Trump’s EPA has systematically rolled back environmental protections and frozen new ones, affecting the air and water of thousands of people. The council’s trade hard-liners have advised Trump to embrace tariffs in the trade war with China — a move that has put farms out of business and cost every family in America hundreds of dollars a year, according to one analysis, as a result of higher-priced goods. The National Association of Manufacturers, a lobby group for big business whose leader, Jay Timmons, was a council member, sent the Trump administration a wish list of 132 regulations that NAM members took issue with, including Obama’s signature climate change legislation, the Clean Power Plan, and the FCC’s net neutrality rule. A recent report by the watchdog group Public Citizen found that the Trump administration has moved to implement 64 percent of NAM’s recommendations.
Democrats Given Green Light To Dig Into Trump's Finances - A Washington DC Judge has denied President Trump's efforts to halt a lawsuit brought by 201 Congressional Democrats who have sued to require that Trump seek approval from lawmakers before accepting financial benefits from foreign governments, according to Bloomberg. US District Judge Emmet Sullivan (who is also presiding over former national security adviser Michael Flynn's case) issued a pair of orders on Tuesday. The first order denied Trump's request to halt the lawsuit in order to immediately appeal Sullivan's previous refusals to dismiss the case. The second order allows lawmakers to begin collecting financial evidence to support their case. The legislators assert Trump’s receipt of benefits through his far-flung business holdings -- including his luxury hotel just blocks from the White House -- violates a U.S. constitutional provision barring American presidents from accepting so-called emoluments from foreign governments without the prior permission of Congress. The Democrats previously told the court they want to look at the president’s finances and revenue sources.The president’s lawyers say money flows into his businesses legally. The judge has not yet made a final determination on that issue. –Bloomberg Sullivan, who ruled that Trump's lawyers did not meet their burden of showing that a mid-case appeal would speed up resolution of the case, noted that the Democratic la wmakers told him they could quickly gather evidence.
Trump Slams Mueller For 'Illegally Deleting Evidence' On Wiped Phones - President Trump on Wednesday claimed that special counsel Robert Mueller 'illegally terminated' texts between "The two lovers, the two pathetic lovers, those two lovebirds" Peter Strzok and Lisa Page. The two former FBI employees at the center of the agency's early Trump investigation sent thousands of text messages to each other which revealed their extreme animus for the then-candidate Trump. "Robert Mueller, they worked for him ... they had texts back and forth ... Mueller terminated them illegally. He terminated the emails, he terminated all of the stuff between Strzok and Page ... He terminated them. They're gone. That's illegal. That's a crime," Trump said. While Trump did not provide evidence for his claim, he was likely referring to a December report by the DOJ's Office of the Inspector General (OIG) which found that after he was fired from the Mueller probe, the special counsel's office allowed Strzok's phone to be wiped clean by the FBI before it was reassigned to another agent. It strains credulity to imagine that the special counsel's office would 'accidentally' allow Strzok's iPhone to be reformatted after he was fired for exchanging biased text messages on it. So Mueller's team wiped ALL of the data off of Peter Strzok's iPhone after determining "it contained no substantive text messages." Given what we know about Strzok, this smells like quite the coverup. Time for Congress to step in?https://t.co/mOgpBbDVO4 pic.twitter.com/9w2mEPK64C— Jordan Schachtel (@JordanSchachtel) December 13, 2018Page's phone was similarly scrubbed. I'm sure you're all super shocked to find out that Lisa Page's phone was also scrubbed pic.twitter.com/NWV9GQbBTc — Jordan Schachtel (@JordanSchachtel) December 13, 2018
Mnuchin Says Guidelines Move Crypto Firms From ‘Dark Shadows’ - Treasury Secretary Steven Mnuchin voiced his support for new global regulatory standards to combat illicit financing by criminals, terrorists and rogue nations that will have major implications in the world of cryptocurrencies. Mnuchin spoke Friday at an Orlando, Florida gathering of the Financial Action Task Force -- a multi-government effort that develops recommendations for combating money laundering and financing of terrorism that’s comprised of about 200 countries. The guidelines require companies to collect information about customers and the recipients of funds, and to send that data to the receiver’s service provider with each transaction. “By adopting the standards and guidelines agreed to this week, the FATF will make sure that virtual asset service providers do not operate in the dark shadows,” Mnuchin said. “This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathizers of illicit causes searching for avenues to raise and transfer funds without detection.” Read More: Crypto Exchanges Are Facing Biggest Regulatory Hurdle Yet Many crypto industry participants aren’t equipped to collect and send the data now required. The rules will require collaboration between the world’s 200-plus crypto exchanges, many of which operate purposely in lightly regulated jurisdictions such as the Caribbean. The FATF, which is currently headed by a representative from the U.S., will conduct a review of how countries subject to its rules are implementing the requirements in June 2020. Lack of compliance could lead to the closing of exchanges and penalties. Mnuchin noted that he created a working group with the Federal Reserve and other regulators to make sure cryptocurrencies are only used in legitimate ways. "We will not allow cryptocurrency to become the equivalent of secret numbered accounts," he said.
Guardians of Money Bristle at Zuckerberg’s New Financial Order -- Facebook Inc. was hours away from the formal announcement of its ambitious foray into financial services, but French Finance Minister Bruno Le Maire was already broadcasting his discontent. "It’s out of the question’’ that the social-media giant’s digital money compete with sovereign currencies, Le Maire said. That was just the first shot in a torrent of criticism and skepticism from policy makers around the world. U.S. House Financial Services Committee Chair Maxine Waters promised an aggressive response from Congress. Former European Central Bank Vice President Vitor Constancio called the initiative “unreliable and dangerous.” Led by the social network with more users than the combined population of China and the U.S., the project represents a potential challenge that the guardians of money have never faced: a global currency they neither control nor manage. And while the megabanks and their regulators face no short-term threat to their command of finance, advocates of cryptocurrency say the future has arrived and that there’s no turning back. “It is the beginning of a new financial system where current gatekeepers are substantially less relevant,’’ said Joey Krug, co-chief investment officer at Pantera Capital, founded in 2013 as the first U.S. investment firm focused on Bitcoin. Called Libra, Facebook’s new currency will launch as soon as next year. It will initially be used for sending money among friends, family and businesses through the Messenger and WhatsApp services and then be used for routine transactions. Facebook founder Mark Zuckerberg’s ambitions extend beyond simply minting a new coin. The Libra token would contribute to a fairer world, where those now excluded from the banking system would have ready access to cheap and easy payments and financial services, according to a company white paper.
Why Washington mobilized so quickly against Facebook's crypto plans - It took less than 24 hours after Facebook announced its foray into cryptocurrency for Washington to mobilize against it. House Financial Services Committee Chairman Maxine Waters demanded Facebook put its plan on hold until she could examine it. Her Republican counterpart on the panel, Rep. Patrick McHenry of North Carolina, immediately called for hearings. And the Senate Banking Committee — a panel generally known for deliberation, not speed — went ahead and set a date for its own look into the matter, scheduling it for July 16 (Waters' panel will hold its a day later). By comparison, it took three months for Congress to hold hearings after the 2017 Equifax data breach and two months to act on Wells Fargo's 2016 phony-accounts scandal. “It is an incredibly quick response,” said Scott Talbott, a senior vice president of government affairs at the Electronic Transactions Association, a trade group of banks, fintech firms and payments companies. In this case, the speed and the bipartisan nature of the demand for an investigation are telling. Had any other technology giant — Google, Amazon or PayPal — announced something similar, it seems likely Congress would have eventually gotten involved. But Facebook greatly accelerated D.C.’s interest, adding ammunition to those who have warned the crypto business is underregulated and unsafe. “Anytime that a very large tech provider makes an announcement like this, it’s going to create a lot of questions on what it means and how regulators are going to look at it and how the private sector responds,” Some were surprised at the timing of Facebook’s announcement, given the social media giant is being investigated for failing to police Russia’s involvement in the 2016 presidential election, for anticompetitive advertising practices and for its role in spreading hate speech in Myanmar. Increased scrutiny of Facebook appears likely to hurt big technology companies trying to enter the crypto or banking space — and ultimately may benefit traditional banks in the process. Though Facebook has partnered with PayPal, Mastercard, Visa and Stripe, among others, to facilitate payments, banks still play a core role in most cryptocurrencies, because consumers have to have a bank account or debit card to make purchases. “If you follow the logic, to create an exchange and buy goods outside the U.S., you need an ID and a bank account and digital access,” . “And Facebook needs to be able to verify the user.” Talbott agreed. "I can't buy my groceries in cryptocurrency," he said. "I have to take my money out of the system and get cash, so I have to get into my checking account or use my debit card. The banks are going to be the on-ramps and off-ramps."
Facebook will soon have millions of customers at the Bank of Zuck - Do you want to open a bank account with Mark Zuckerberg and Facebook? No, me neither. It’s bad enough that Facebook says it won’t be paying a nickel of interest on any money that customers keep in the company’s new Libra digital accounts. But why would I want to lend my money to Zuckerberg and his pals free of charge to help them take over the world? Spare me all the talk about helping the “unbanked” and the world’s poor. This is business. Big business. Banking is the world’s most lucrative industry. According to FactSet, the world’s publicly traded banks have a total market value of around $4.5 trillion. There was a good reason Willie Sutton robbed banks. As he explained, “that’s where the money is.” And, no, Libra isn’t just going to be a “currency.” It’s going to be a bank. “The goal of the Libra Blockchain is to serve as a solid foundation for financial services ... which could meet the daily financial needs of billions of people,” the so-called Libra Association acknowledges in the documents released this week. It’s going to have “billions of accounts,” and “power ... future innovation in financial services.” It’s the latest brilliant, cynical, devious move by Facebook. The structure of the Libra Association is sheer genius. Technically, it’s going to be “completely independent” of Facebook. The Libra Association is theoretically going to be a stand-alone “not for profit” body based in Switzerland that will oversee the new “currency.” So nobody can say this is the Facebook Bank, or the Bank of Zuckerberg. But the devil is hanging out in his usual place. While Facebook will be just one member of the Libra Association, it will be the biggest and most powerful company in the network. Nobody else has 2.4 billion monthly active users, with numbers rising by 8% a year. Meanwhile, although the Libra Association is “not for profit,” the Libra financial system is actually going to pay out dividends to all its members. If you open a Libra account, or “wallet,” Libra will invest your cash in interest-bearing bonds while paying you nothing. The members will keep the difference as dividends. And if this thing takes off, those could add up to big bucks.
"Game Changer" - Is Libra The Trojan Horse For An SDR-Backed Redesign Of The Global Financial System? -Some have proclaimed Zuckerberg's dive into digital currencies as (one of) the drivers of the recent renaissance in cryptocurrencies (as scale goes to the mainstream); others fear Facebook's Libra is a 'trojan horse' to centralized (not de-centralized) control of billions of people's wealth and an acceleration of the push for a cashless society (as rate go negative almost globally and policy-makers lose control of the status quo). Rabobank's Wim Boonstra breaks down the arguments on both sides, arguing that Libra could be "potentially a welcome addition to the financial system" but ending on an ominously totalitarian note... Summary: A consortium led by Facebook recently announced the introduction of a new cryptocurrency, the Libra. Unlike most other cryptocurrencies, the Libra will be fully covered by financial assets. One of the aims of the Libra is to connect billions of people who do not yet have access to financial services to the financial system. The effects of the Libra will therefore first be felt in emerging markets, but soon this crypto can also manifest itself elsewhere. If the Libra actually gets off the ground, it potentially also has a greater impact on the financial system than other cryptos.
Washington’s first attempt at regulating Big Tech is a joke - Lots of people say they want Washington to take a firmer hand and start regulating Silicon Valley’s most powerful companies, which have had almost zero oversight for years.But what if our elected officials can’t hack it?Regulating big, complicated companies can be a technical challenge. But Washington already regulates all kinds of complex industries. The real issue with regulating tech may be that our leaders aren’t really serious about regulating it.Case in point: New legislation proposed by Sen. Josh Hawley (R-MO) that’s supposed to rid Facebook, Google, and Twitter of supposed political bias. The idea is that the federal government will strip away protections that shield those companies from being held accountable for the content their users upload and they distribute — and will only restore those protections once the companies can prove they aren’t favoring one end of the political spectrum.This is an actual bill, proposed by a real senator, so I’ll take a little time to explain why it’s a lousy idea. But the short version is that this is a more sophisticated version of the clumsy email-harvesting site the White House unveiled last month, asking Americans to self-report incidents of bias and censorship on social networks. Not because anti-conservative bias is a real problem on platforms like Twitter and Facebook, but because it’s a good way to whip up voters and donors who would like to believe those companies are out to suppress them.My Vox Media colleague Casey Newton has a nice summary of why the “Facebook (or Twitter or YouTube or whoever) is out to get conservatives” meme is a silly one,unsupported by any useful data. Here’s the money paragraph: “The truth is that social networks have been a boon to partisans of every stripe — conservatives especially. A conservative social media star became the president of the United States — and a liberal social media star seems well on her way to higher office, despite being in her first term in Congress. The real bias of social networks, as Mark Zuckerberg has acknowledged, is toward the extremes.”
Trump Says U.S. Should Sue Facebook, Google - President Donald Trump complained again about supposed bias against conservatives at social media companies and said the U.S. government should sue Google and Facebook Inc. for unspecified wrongdoing. Trump complained in an interview with Fox Business Network on Wednesday that social media companies are run by Democrats and that Twitter has somehow made it difficult for people to follow his @realDonaldTrump account, from which he tweets prolifically. “What they did to me on Twitter is incredible,” Trump said in the interview with Fox’s Maria Bartiromo. “You know I have millions and millions of followers but I will tell you they make it very hard for people to join me at Twitter and then make it very much harder for me to get out the message.” Twitter said that followers of high-profile accounts may have been deleted as part of an effort to remove fake, abusive and malicious accounts. The White House said Wednesday it’s planning a Social Media Summit July 11 to “bring together digital leaders for a robust conversation on the opportunities and challenges of today’s online environment.” Trump also complained about the European Union targeting U.S. technology companies in the interview. EU Competition Commissioner Margrethe Vestager has fined Google billions of dollars for antitrust violations and has opened an early-stage probe into Amazon.com Inc.‘s potential use of data on smaller rivals’ sales. “I won’t mention her name but she’s actually considered to take Jean Claude’s place because Jean Claude at some point is retiring,” said Trump, referring to the possibility that Vestager could succeed European Commission President Jean-Claude Junker. “She hates the United States, perhaps worse than any person I’ve ever met. What she -- what she does to our country -- she’s suing all our companies.”
Robert Reich: Here’s Why We Need to Break Up Big Tech --The combined wealth of Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, and Google’s Sergey Brin, and Larry Page is larger than the combined wealth of the bottom half of the American population.They are the leaders of a second Gilded Age – ushered in by semiconductors, software and the internet – which has spawned a handful of hi-tech behemoths and crushed competition.Facebook, Amazon, Google, Apple, and Microsoft now have the highest market values for all public corporations in America.As of today, only three countries in the world have a GDP higher than these companies’ combined market value of approximately 4 trillion dollars.America’s first Gilded Age began in the late nineteenth century with a raft of innovations – railroads, steel production, oil extraction – that culminated in mammoth trusts run by “robber barons” like J.P. Morgan, John D. Rockefeller, and William Vanderbilt.The answer then was to break up the railroad, oil, and steel monopolies. The answer today is the same: Break Up Big Tech.
- First: They have a stranglehold on the economy. Nearly 90 percent of all internet searches now go through Google. Facebook and Google together will account for nearly 60 percent of all digital ad spendingin 2019 (where most ad money goes these days).
- Second: Such size also gives these giant corporations political power to get whatever they want, undermining our democracy. In 2018, Google, Amazon, Facebook, Apple, and Microsoft spent 70.9 million dollars on lobbying and supporting candidates. As a result, Amazon – the richest corporation in America– paid nothing in federal taxes last year. Meanwhile, it held a bidding war to extort billions from states and cities eager to have its second headquarters.
- Third: Giant tech companies also hurt the environment. Many are failing to reduce greenhouse emissions, as they promised, and are unwilling to commit fully to renewable energy.
- Finally: Their huge wealth isn’t being shared with most of their workers. Nine in 10 workers in Silicon Valley make less now than they did in 1997, adjusted for inflation.And many are part of the “working homeless.” That is, people who work full time and yet are still homeless. The answer is to break them up. That way, information would be distributed through a large number of independent channels instead of a centralized platform. And more startups could flourish.
Google's Competitors Gang-Up To Help Regulators Make Anti-Trust Case - A "loose knit crew of rivals" are eager to help the government with its anti-trust probe of Alphabet, Inc., according to the Wall Street Journal. Competitors of Google are doing everything they can to try and help the Justice Department in their probe, including readying documents and data in anticipation of meetings with regulators. Many of the competitors have argued that large technology platforms illegally abuse their market power. Some of them have found support in Europe, where regulators have fined Google for monopolistic practices three times already. Google has paid the fines, but is also challenging them in court. Now, rival companies are stepping up their lobbying in the United States, where antitrust investigations have been divided among the Department of Justice and the Federal Trade Commission. Lawyers that specialize in antitrust law say that any probe could take years to complete. Google is preparing its case as well, while at the same time overhauling its lobbying effort in Washington, as we reported days ago.Google has already successfully navigated regulator scrutiny of previous mergers in 2012 and 2013. It had persuaded the FTC in the past tonot pursue a possible antitrust case by agreeing to change some business practices.The competitors that have aligned themselves with regulators (and against Alphabet) include companies like TripAdvisor, Yelp and Oracle. Oracle has briefed European antitrust regulators about Google's use of data to target ads and was a successful plaintiff against Google’s alleged anti-competitive behavior which led to a €4.3 billion fine last year.Wall Street Journal parent corporation News Corp., along with other publishers, claim Google siphons ad revenue away from content creators. All of these companies obviously welcome further scrutiny into Google’s business practices. Additional companies have privately criticized Google, even though they haven’t made their critiques public.
Google's Chrome Web Browser Has Become Spy Software … Google's Chrome is essentially spy software according to Washington Post tech columnist Geoffrey Fowler, who spent a week analyzing the popular browser and concluded that it "looks a lot like surveillance software." Fowler has since switched to Mozilla's Firefox because of its default privacy settings, and says that it was easier than one might imagine. My tests of Chrome vs. Firefox unearthed a personal data caper of absurd proportions. In a week of Web surfing on my desktop, I discovered 11,189 requests for tracker “cookies” that Chrome would have ushered right onto my computer but were automatically blocked by Firefox. These little files are the hooks that data firms, including Google itself, use to follow what websites you visit so they can build profiles of your interests, income and personality. Chrome welcomed trackers even at websites you would think would be private. I watched Aetna and the Federal Student Aid website set cookies for Facebook and Google. They surreptitiously told the data giants every time I pulled up the insurance and loan service’s log-in pages.And that’s not the half of it.Look in the upper right corner of your Chrome browser. See a picture or a name in the circle? If so, you’re logged in to the browser, and Google might be tapping into your Web activity to target ads. Don’t recall signing in? I didn’t, either. Chrome recently started doing that automatically when you use Gmail. -Washington Post Meanwhile, Chrome is even worse when it comes to mobile devices - reporting the precise location of Android users unless location sharing is turned off, in which case it will send out your rough coordinates. According to one study, tracking cookies from third-parties are on 92% of websites. The Washington Post, for example, uses around 40 - which the company said is "average for a news site," and says they are designed to deliver better-targeted ads and track ad performance. But cookies can also be found on websites with no advertising. Both Aetna and the FSA service said the cookies on their sites help measure their own external marketing campaigns. The blame for this mess belongs to the entire advertising, publishing and tech industries. But what responsibility does a browser have in protecting us from code that isn’t doing much more than spying? -Washington Post
Amazon Is Watching - Amazon’s reputation for serving its customers with low prices and ruthless efficiency might help to explain why, in survey after survey, the Seattle-based company ranks as America’s most valuable — nay, most loved — brand. One recent study found that Amazon is the second most-trusted institution of any kind in the United States, ahead of Google, the police, and the higher-education system, and trailing only the U.S. military. At a time when an endless string of privacy and election scandals has left Facebook’s reputation in smoldering ruins, and Google’s has been dented by YouTube’s radicalization and content moderation woes, Amazon’s is stronger than ever. But Amazon’s public image as a cheerfully dependable “everything store”belies the vast and secretive behemoth that it has become — and how the products it’s building today could erode our privacy not just online but also in the physical world. Even as rival tech companies reassess their data practices, rethink their responsibilities, and call for new regulations, Amazon is doubling down on surveillance devices, disclaiming responsibility for how its technology is used, and dismissing concerns raised by academics, the media, politicians, and its own employees. “We’re all hoping they’re not making a panopticon,” says Lindsey Barrett, staff attorney at Georgetown Law’s Institute for Public Representation. Last month, the institute, serving as counsel to a group of 19 watchdog groups, called on the Federal Trade Commission to investigate Amazon for alleged violations of the federal law protecting children’s online privacy. Among other concerns, they found that Amazon’s Echo Dot Kids Edition smart speaker retained children’s voice recordings and personal data even after parents tried to delete them. Amazon blamed at least part of the problem on a software bug, which it says it has since fixed. While the outcome of that case remains to be seen, the complaint represents just the tip of the iceberg. The Amazon of today runs enormous swaths of the public internet; uses artificial intelligence to crunch data for many of the world’s largest companies and institutions, including the CIA; tracks user shopping habits to build detailed profiles for targeted advertising; and sells cloud-connected, A.I.-powered speakers and screens for our homes. It acquired a company that makes mesh Wi-Fi routers that have access to our private Internet traffic. Through Amazon’s subsidiary Ring, it is putting surveillance cameras on millions of people’s doorbells and inviting them to share the footage with their neighbors and the police on a crime-focused social network. It is selling face recognition systems to police and private companies.
US House votes down amendment to block NSA collection of the personal communications of American citizens -- On June 18, the US House of Representatives voted 283-175 against an amendment that would have limited the government’s ability to collect the personal communications of US citizens without a warrant. The amendment was introduced by Reps. Justin Amash, a Republican from Michigan, and Zoe Lofgren, a Democrat from California, as part of a federal spending bill that includes funding for the Labor Department, the Department of Health and Human Services and the Department of Defense. The proposal was specifically written to block provisions of Section 702 of the Foreign Intelligence Surveillance Act (FISA) of 1978 that allows the US government—in the name of collecting intelligence on non-Americans located outside the US—to inherently and intentionally collect and store the communications of American citizens. The motion by Amash and Lofgren had attracted the support of 42 civil rights groups including the ACLU, Arab American Institute, Electronic Frontier Foundation and Fight for the Future. In a letter to the House, the coalition of organizations wrote that adoption of the amendment would “significantly advance the privacy rights of people within the United States.” The one-page amendment stated in part, “This certification does not authorize any acquisition that intentionally targets a person reasonably believed to be located outside the United States if a significant purpose of such targeting is to acquire the communications of a particular, known person reasonably believed to be in the United States. …” In explaining the motion, Representative Amash said, “The government can search and sweep in billions of communications, including communications of Americans, and then query that data. … The Amash-Lofgren amendment puts in basic safeguards to allow the government to continue using Section 702 for its stated purpose of gathering foreign intelligence, while limiting the government’s warrantless collection of Americans’ communications under FISA.”
NSA improperly collected US phone call data after saying problem was fixed The National Security Agency improperly collected phone call records of Americans last fall, months after a previous breach that compelled the agency to destroy millions of records from the contentious program, documents released Wednesday revealed. The redacted documents, obtained by the ACLU in a Freedom of Information Act lawsuit, do not indicate how many records NSA improperly collected in the October breach, nor which telecommunications provider submitted the improper data. "These documents provide further evidence that the NSA has consistently been unable to operate the call detail record program within the bounds of the law," the ACLU said in a letter to Congress this week lobbying for an end to the program. The letter says elements within the Office of the Director of National Intelligence concluded the October violations had a "significant impact" on privacy and civil rights, but that the Americans affected were not told of the breach. Patrick Toomey, a staff attorney with the ACLU’s National Security Project, said there is "no justification" for continuing to provide such powers to the NSA.
Soros-Backed Group Demands Financial Blacklisting Of Conservatives - As if censorship isn’t enough, leftists have decided to ramp up their demands that those who have a different political view be financially blacklisted. A coalition of far-left political activist organizations known for peddling smears about conservatives held a protest at Mastercard’s annual general meeting (AGM) today, demanding that the international credit card giant financially blacklist wider sections of the political right. Fortunately, Mastercard didn’t cave to the tyrannical demands of the George Soros-backed groups. According to Breitbart, at Mastercard’s AGM, the far-left groups SumOfUs and Sleeping Giants circled the venue with a mobile billboard stating: “Putting hate groups out of business? #Priceless.” The groups’ proposal to form a “human rights committee” did not sway shareholders, who voted the measure down. According to a press release published by the two organizations, this was coupled with a speech from Sleeping Giants co-founder Nandini Jammi, “addressing the need for Mastercard to take swift action by cutting off its services to these hate groups.”
Banks sail through year's first round of stress tests — Despite facing tougher scenarios, the 18 banks undergoing the Fed’s stress testing program this year easily passed the first examination, known as the Dodd-Frank Act Stress test, posting similar capital losses as in previous years. The DFAST results, published Friday afternoon, showed banks with an aggregate loss of $410 billion under the Fed’s severely adverse scenario, which was down from $464 billion in losses across those same 18 firms in 2018. “Aggregate loan losses as a percent of average loan balances in the severely adverse scenario have declined since early stress test exercises, due in large part to improvements in firms’ portfolio quality,” the Fed said in its report of the results. “The loss rates in DFAST 2019 are well in line with loss rates in the 2015-17 stress test exercises.” That performance came despite the 2019 severely adverse scenario being even tougher than in prior years, owing in part to the positive state of the economy. The Fed has determined that the severely adverse scenario should be comparable to the financial crisis, with roughly 10% unemployment and severe recession; when the economy is doing better, the scenarios have to be more severe to yield those conditions. This year’s scenario featured a 6-point increase in unemployment, a 50% drop in stock values, a 70% increase in the VIX market volatility index, a 25% drop in home values and a 35% drop in commercial real estate values, as well as severe recessions in the eurozone, the U.K. and Japan. Federal Reserve Vice Chairman Randal Quarles said the results underline the positive effect that the Fed’s supervisory practices have had on the safety and soundness of the banking sector and its ability to withstand highly volatile economic conditions. “The results confirm that our financial system remains resilient,” Quarles said. “The nation’s largest banks are significantly stronger than before the crisis and would be well positioned to support the economy even after a severe shock.” Some banks showed particularly heavy losses, particularly in credit card portfolios, trading and counterparty losses and commercial and industrial loans. Capital One, Barclays US, Goldman Sachs, Citigroup and JPMorgan Chase faced the largest loan losses under the severely adverse scenario, but all of those banks retained post-stress minimum capital levels above regulatory minimums.
'The risk isn't in the banks': Fed's Powell on leveraged lending — Federal Reserve Chairman Jerome Powell said Wednesday that the agency is "very carefully" monitoring bank exposure to leveraged lending risks, but that the greatest risks posed by high corporate debt is outside the banking system. Speaking during a press conference for the Federal Open Market Committee, Powell said that banks have a clear understanding of the Fed’s supervisory expectations for leveraged lending — relatively high-interest loans made to companies that already have large debt loads. "The issue isn't that the banks don't understand what the rules are,” Powell said. “The issue is that the risk isn't in the banks. It's out in those market-based vehicles.” Jerome Powell, chairman of the Federal Reserve, pauses while speaking during a news conference following a Federal Open Market Committee meeting in Washington on June 19, 2019. Leveraged lending has been an increasing source of concern, particularly among congressional Democrats, who held a hearing earlier this month to examine the risks posed by the large and growing business. Bank of America CEO Brian Moynihan said at an appearance in New York this month that leveraged lending could create “carnage” among firms with large exposures to leveraged loans and indebted companies if the economy took a sudden downturn. Powell said that he thought the state of the leveraged loan market was “in a good place,” but noted that other advisory and regulatory bodies with a broader jurisdiction than the Fed — such as the Basel, Switzerland-based Financial Stability Board and the Treasury-led Financial Stability Oversight Council — are examining the potential risks that leveraged lending might pose to the financial system, particularly cross-border risks. “We now have a good sense domestically of where that paper is. Internationally, not as much, and the Financial Stability Board is looking more carefully at that,” Powell said. “And we monitor those vehicles pretty carefully to see where they are. And they're actually pretty stably funded in the sense that there's no run risk, but there are still macroeconomic risk. This is something we take very seriously and the FSOC, the Financial Stability Oversight Council, is looking at.”
Banks clear CCAR stress test — though JPMorgan Chase, Capital One barely — In a year where most of the 18 institutions taking the second round of the Federal Reserve's stress tests showed improvements over 2018, JPMorgan Chase and Capital One struggled, with both forced to adjust their capital plans in order to meet the central bank's minimum thresholds. All of the large banks graded under the Fed's annual Comprehensive Capital Analysis and Review test ultimately cleared the mark, with only Credit Suisse receiving a "conditional non-objection" to its capital distribution plan due to weaknesses in certain assumptions used to project stressed trading losses. But the close call for JPMorgan and Capital One is notable, demonstrating how aggressively many institutions approach the test, attempting to maximize capital distributions. It also reflects how tough the test was on certain areas, such as credit cards, in its projections of a severely adverse economic scenario. Despite the more demanding projections of the test, however, banks performed better than last year, when they struggled with the impact of the tax reform law, causing the Fed to issue an objection to DB—the U.S.-based affiliate of Deutsche Bank—and a conditional nonobjection to Goldman Sachs, Morgan Stanley and State Street. Fed officials said the results demonstrated that the nation's largest banks continue to make capital adequacy a high priority. “The results show that these firms and our financial system are resilient in normal times and under stress,” Randal Quarles, the Fed's vice chairman of banking supervision, said in a press release. Under the test, each bank is graded on four different ratios, each with its own minimum: Tier 1 leverage (4.0%), common equity Tier 1 ratio (4.5%), Tier 1 capital (6.0%) and the total capital ratio (8%). Capital One’s original plan trailed behind the required common equity Tier 1 ratio, tier 1 capital ratio and total capital ratio, while JPMorgan Chase fell behind on the minimum common equity Tier 1 ratio, Tier 1 leverage ratio and the supplementary leverage ratio. In the severely adverse scenario, Capital One’s common equity Tier 1 ratio came in initially at 3.9% (below the minimum of 4.5%) while JPMorgan Chase’s was initially 4.4%. Upon resubmission, the ratios for both banks raised to 4.6%, a hair above the 4.5% minimum.
Fed Approves Capital-Return Plans Of All 18 Banks (Even Deutsche!) - After all banks passed The Fed's quantitative "Adverse scenario" stress test last week, investors waited anxiously to see just how much the big banks would be allowed to buyback and dividend to shareholders. Bank stocks have outperformed the market since the stress test results were released. Overall, analysts are expecting big banks to slow payout growth after surging for two years. The 12 U.S. lenders tested are expected to boost payouts by $5 billion, compared to more than $30 billion each of the past two years.As Bloomberg notes, Deutsche Bank is atop the list of banks to watch today. The German lender's U.S. unit is expected to fail for a fourth time, which will be another blow to investor confidence as the bank struggles with restructuring and profitability. Last year, the Fed put Deutsche Bank's U.S. arm on a list of troubled lenders because of internal oversight deficiencies. But, surprisingly, Deustche Bank was approved (after failing the last four times and the stock crashing to all-time lows during that time) along with the other 17 big banks (only Credit Suisse got a conditional approval).Full Fed Statement: The nation's largest banks have strong capital levels and virtually all are now meeting supervisory expectations for capital planning, the Federal Reserve Board on Thursday announced following its annual examination. As a result, the Board is not objecting to the capital plans of all 18 firms but is requiring one firm to address limited weaknesses identified from the test.The Comprehensive Capital Analysis and Review, or CCAR, evaluated the capital planning processes and capital adequacy of 18 of the largest banking firms, including the firms' planned capital actions, such as dividend payments and share buybacks. Strong capital levels act as a cushion to absorb losses and help ensure that banking organizations have the ability to lend to households and businesses even in times of stress."The stress tests have confirmed that the largest banks are both well capitalized and place a high priority on strong capital planning practices," said Vice Chair for Supervision Randal K. Quarles. "The results show that these firms and our financial system are resilient in normal times and under stress."
Banks rush to boost shareholder payouts after stress test results - Many of the largest banks are set to boost shareholder dividends and stock repurchases after receiving passing grades in the Federal Reserve’s stress tests this week. Several banks are set to boost both dividends and buybacks by double digits. Bank of America announced one of the most aggressive capital-return programs, as it will increase its repurchase plan 50% to $31 billion and its dividend 20% to 18 cents per share. “We have generated record earnings and consistent returns that allow us to invest in our company [and] deliver solid returns to shareholders,” Chairman and CEO Brian Moynihan said in a Thursday news release. The announced plan “will prudently return a portion of our excess capital above what is needed for investments to grow the company.” As regulatory requirements have eased following the financial crisis, banks have been able to reduce their huge stockpiles of capital through returns to shareholders. From January to May this year, publicly traded banking companies were on pace to nearly double the number of buyback plans introduced or renewed. Almost all of the largest banks already had repurchase and dividend plans in place, but this week’s results from the yearly Comprehensive Capital Analysis and Review test will allow many of those banks to expand them. A group of 11 of the largest U.S. banks, including Bank of America and JPMorgan Chase, will expand their average payout ratio, a measurement of both dividends and repurchases, to about 115%, Marty Mosby, an analyst at Vining Sparks, wrote in a Friday research note. JPMorgan Chase will expand its repurchase plan by 42% and increase its dividend by 13%, though it was forced to resubmit its capital plan to the Fed this year, after several capital rations in its initial plan fell below minimum requirements. Many large banks will reduce the size of repurchase plans this year. Wells Fargo will lower its plan 6% to $23.1 billion, while Regions Financial will reduce its plan 32% to $1.4 billion. The banks did not provide explanations in their news releases for the decreases.
Fed’s Stress Test: Should JPMorgan Chase Have Gotten a Second Chance? - Pam Martens - How many second chances should a criminal recidivist get? JPMorgan Chase has logged in guilty pleas to three criminal felony counts in the past five years; it has a criminally-charged precious metals trader singing to the Feds currently as JPMorgan admits in regulatory filings that it’s under a new criminal investigation in that matter; the bank has paid $36 billion in fines for wrongdoing since the financial crash, including $1 billion for trading exotic derivatives in London with bank depositors’ money and losing at least $6.2 billion of those depositor funds (the London Whale scandal). And in just the past year it has proven that it’s “game on” for more regulatory fines and illicit profits. (SeeCould JPMorgan Chase Be Hit with a Fourth Felony Count for Rigging Precious Metals Markets?) Despite all of this, yesterday the Federal Reserve announced that it had given JPMorgan Chase a second chance at passing the regulator’s stress test.According to the announcement from the Fed, all 18 mega banks it submits to stress testing had passed the second leg of its stress tests known as the Comprehensive Capital Analysis and Review (CCAR). It did require one bank, Credit Suisse, “to address certain limited weaknesses in its capital planning processes.”But JPMorgan Chase, along with the much smaller and zero-felony-count Capital One, were only able to pass the stress test because the Fed allowed them to resubmit their plan a second time. (That’s like failing your licensing exam on Wall Street that you have months to prepare for and then being allowed to take an open text exam.) The Fed said this about the matter: “In the supervisory severely adverse scenario, Capital One Financial Corporation (Capital One) and JPMorgan Chase & Co. (JPMorgan) were projected to have at least one minimum post-stress capital ratio lower than minimum required regulatory capital ratios based on its original planned capital actions. Capital One fell below the minimum required common equity tier 1 ratio, tier 1 capital ratio, and total capital ratio on a post-stress basis. JPMorgan fell below the minimum required common equity tier 1 ratio, tier 1 leverage ratio, and the supplementary leverage ratio on a post-stress basis…However, both Capital One and JPMorgan were able to maintain their post-stress regulatory capital ratios above minimum requirements in the severely adverse scenario after submitting adjusted capital actions.”
Deutsche Bank To Fire Up To 20,000: One In Six Full-Time Positions -- While Deutsche Bank finally delivered some good news for a change to its long-suffering investors, when it miraculously failed to fail the latest Fed stress test, on Friday the chronically sick bank reverted to its "cutting into muscle" baseline when the largest German lender with the €45 trillion notional derivatives was said to be preparing "to cut as much as half its global workforce in equities trading as part of a broad restructuring to boost profitability", according to Bloomberg with the WSJ adding that the total number could be between 15,000 and 20,000 job cuts, or more than one in six full-time positions globally.The cuts being contemplated by senior executives reflect an acceleration of Deutsche Bank’s downsizing and another major pullback from its global ambitions. If followed through, the reduction would represent 16% to 22% of Deutsche Bank’s workforce of 91,463 employees, as disclosed by the bank as of the end of March.Some employees in the bank’s equities department, anticipating cuts, have cleared personal belongings from their desks, and salespeople have curtailed client calls and meetings, WSJ reports citing people inside the bank.Additionally, the investment bank, which had about 38,000 full-time employees at the end of March, is expected to take a big hit in any downsizing. The bank’s global equities operation, which has steadily lost clout to U.S. banks with stronger balance sheets, lost about €750 million in 2018, the Journal reported in March. According to the proposed plan the bank will eliminate hundreds of positions in equities trading and research, as well as derivatives trading, and is expected to start informing staff of cuts - including in the U.S. and Asia - as soon as next month. Rates trading is also affected.
OCC Report: JPMorgan Chase and Citibank Control 76 Percent of all Precious Metals Contracts at 5,362 Federally-Insured Banks -- As of March 31 of this year, there were 5,362 Federally-insured commercial banks and savings associations in the United States. Just two of these banks, JPMorgan Chase NA and Citibank NA control 75.7 percent of all precious metals derivatives contracts held by all of the 5,362 Federally-insured banks and savings associations. This finding comes from a report released last week by the regulator of national banks, the Office of the Comptroller of the Currency (OCC). (See Table 9 in the Appendix of the OCC report.)Commercial banks are supposed to be making safe and sound business loans to keep the U.S. economy humming, creating good-paying jobs and making America competitive around the world. But according to the latest OCC report, of the $38.57 billion held in precious metals derivative contracts by all Federally-insured banks and savings associations in the U.S., JPMorgan Chase Bank NA held $17.509 billion and Citibank NA held $11.691 billion. JPMorgan Chase is currently under a criminal probe by the U.S. Department of Justice involving precious metals trades. Equally concerning, the trading of precious metals derivative contracts by Federally-insured banks has grown exponentially since 2001. At that time it represented less than $5 billion. During the financial crisis in 2008 and 2009, precious metals derivative contracts at the banks were less than $15 billion. They have more than doubled since that time. The weirdness doesn’t stop there. According to the latest OCC report, JPMorgan Chase Bank NA holds $2.4 trillion in stock (equity) derivative contracts – which represents 64 percent of all stock derivative contracts held by all 5,362 Federally-insured banks in the United States. If you include the stock derivative contracts held by Citibank, Goldman Sachs Bank USA (yes, the Great Vampire Squid is allowed by its regulators to own a Federally-insured bank) and Bank of America NA, together with the stock derivative contracts held by JPMorgan Chase Bank, you have 93 percent of all equity derivative contracts held by all 5,362 Federally-insured banks in the U.S. (See Table 10 in the Appendix of the latest OCC report.) Why do these four banks need to trade high-risk stock derivatives in their taxpayer-backstopped, Federally-insured banks while the vast majority of other Federally-insured banks do not? As a result of the repeal of the 66-year old Glass-Steagall Act in 1999 under the Wall Street-cozy administration of President Bill Clinton, these Wall Street trading behemoths are now allowed to own Federally-insured commercial banks and do pretty much anything they want with the Mom and Pop deposits held in those banks.
Merrill Lynch Caught Criminally Manipulating Precious Metals Market "Thousands Of Times" Over 6 Years Remember when it was pure tinfoil-hat conspiracy theory to accuse one or more banks of aggressively, compulsively and systematically manipulating the precious metals - i.e., gold and silver - market? We do, after all we made the claim over and over, while demonstrating clearly just how said manipulation was taking place, often in real time.Well, it's always good to be proven correct, even if it is years after the fact.On Tuesday after the close, the CFTC announced that Merrill Lynch Commodities (MLCI), a global commodities trading business, agreed to pay $25 million to resolve the government’s investigation into a multi-year scheme by MLCI precious metals traders to mislead the market for precious metals futures contracts traded on the COMEX (Commodity Exchange Inc.). The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. In other words, if the Merrill Lynch Commodities group was an individual, he would have gotten ye olde perp walk.As MLCI itself admitted, beginning in 2008 and continuing through 2014, precious metals traders employed by MLCI schemed to deceive other market participants by injecting materially false and misleading information into the precious metals futures market. They did so in the now traditional market manipulation way - by placing fraudulent orders for precious metals futures contracts that, at the time the traders placed the orders, they intended to cancel before execution. In doing so, the traders intended to “spoof” or manipulate the market by creating the false impression of increased supply or demand and, in turn, to fraudulently induce other market participants to buy and to sell futures contracts at quantities, prices and times that they otherwise likely would not have done so. Over the relevant period, the traders placed thousands of fraudulent orders.Of course, since we are talking about a bank, and since banks are in charge of not only the DOJ, and virtually every other branch of government, not to mention the Fed, nobody will go to jail and MLCI entered into a non-prosecution agreement and agreed to pay a combined - and measly - $25 million in criminal fines, restitution and forfeiture of trading profits.
The Wolves Have Turned on Each Other on Wall Street - Pam Martens and Russ Martens ~ Some decades back, the late MIT economist Lester Thurow wrote this: “Essentially, the economic problem is like that of the wolf and the caribou. If the wolves eat all the caribou, the wolves also vanish.” What Thurow did not take into consideration is that if the wolf pack is large enough, it can survive for quite a while by turning on other wolf packs. That’s what is happening right now on Wall Street. The wolves are at war with each other. The New York Stock Exchange and Nasdaq have filed a lawsuit against the Securities and Exchange Commission and are slinging mud in court at a former, long-tenured JPMorgan Chase executive, Brett Redfearn, who now polices them at the SEC. It all started when the stock exchanges decided they no longer wanted to function like public utilities operating in the public interest to create a fair and efficient market place for stock trading in America and would instead become whore houses for high frequency traders at the Wall Street mega banks and hedge funds. The New York Stock Exchange and Nasdaq allow these high frequency traders to co-locate their computers next to the main computers of the exchanges in their data centers to gain a speed advantage over other customers at a monthly cost that is so exorbitantly expensive that it prices out the average trader and small trading firms. On top of that, the exchanges are adding huge fees for access to their fastest data feeds for stock trade information while giving the public a slower, dumbed-down data feed. These trading advantages allow high frequency traders to manipulate stock prices and front-run orders from the public. Michael Lewis, Flash Boys, wrote that “both Nasdaq and the New York Stock Exchange announced that they had widened the pipe that carried information between the HFT [high frequency trading] computers and each exchange’s matching engine. The price for the new pipe was $40,000 a month, up from the $25,000 a month the HFT firms had been paying for the old, smaller pipe.” By late 2011, according to Lewis, “more than two-thirds of Nasdaq’s revenues derived, one way or another, from high-frequency trading firms.” Today, according to industry sources, the fastest connections and data feed can cost over $150,000 a month or $1.8 million a year. Imagine Aunt Sally’s Stock Trading Club in Duluth attempting to compete on a level playing field with that kind of toll gate.
Democrats Back Wall Street Push to Free Up $40 Billion in Margin -A group of House Democrats is pressing bank regulators to roll back a rule that forces the biggest Wall Street firms to set aside as much as $40 billion as a safety net in derivatives trading.Freeing those billions in collateral has been a longtime aim of the industry and has regularly drawn support from Republicans in Congress. Now 17 Democrats -- including seven from the House Financial Services Committee -- have joined in, calling for an overhaul of requirements tied to internal swaps transactions between a bank’s affiliates.“Due to the large and increasing amount of unusable, locked-up collateral, quick action should be taken,” the Democrats wrote in a June 26 letter toFederal Reserve Chairman Jerome Powell, Federal Deposit Insurance Corp. Chairman Jelena McWilliams and Comptroller of the Currency Joseph Otting.The lawmakers, including Representatives Josh Gottheimer of New Jersey, David Scott of Georgia and Gregory Meeks of New York, said current U.S. rules exceed international standards and easing the requirement won’t increase risk in the financial system.The new push from the House Democrats could put them at odds with Financial Services Committee Chairwoman Maxine Waters, who has repeatedly argued against weakening post-crisis bank regulations. The margin rule, prompted by the Dodd-Frank Act, aimed to tighten oversight after derivatives trades amplified the 2008 financial meltdown. When it was approved in 2015, regulators said the requirement would promote soundness and “strong risk management.” The International Swaps and Derivatives Association, an industry group, estimated that $39.4 billion in collateral had been set aside to meet margin requirements as of the end of 2018. The issue is particularly important to major swaps dealers, such as Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc. The Financial Services Forum, a trade group representing eight of the largest banks, spearheaded the lobbying effort on the Democrats’ letter. Consumer groups such as Americans for Financial Reform have argued that the margin requirement is critical for protecting the bank subsidiaries and affiliates that handle customers’ deposits.
In Absurd Fiasco, Entire Market Spike Was Due To A CNBC Grammatical Mistake - The farce that is this "market" just took a whole new turn for the surreal. As we reported earlier, the reason why stocks surged just after 5am EDT is because of a CNBC headline, according to which the US Treasury Secretary said that a US-China trade deal "is" - present tense - 90% complete: a clear indication that a trade deal with China is once again a possibility.This was quickly propagated by Bloomberg... ... which triggered a flurry of algo buying. Doubling down, CNBC also tweeted as much saying in a (since deleted) tweet that:"Treasury Secretary Steven Mnuchin says a U.S.-China trade deal is "about 90% of the way there." https://t.co/3Q0wvJKKxD pic.twitter.com/of6yH5y3rs"The problem: CNBC made a huge grammatical mistake, because instead of saying "is", Mnuchin was actually using the past tense, and what he really said - for those who listened to the video - is that "we were about 90% of the way’ on China trade deal. Oops. CNBC also promptly deleted its tweet which said the deal "is" 90% completed, and the current on CNBC headline now says "Mnuchin: ‘We were about 90% of the way’ on China trade deal and there’s a ‘path to complete this." The deleted tweet was also revised:"We were about 90% of the way" on a China trade deal and there’s a "path to complete this," U.S. Treasury Secretary Steven Mnuchin says. https://t.co/3Q0wvJKKxD pic.twitter.com/tZuHHhCEQ6— CNBC International (@CNBCi) June 26, 2019 So basically Mnuchin said absolutely nothing new, and not only that, he did not provide any optimism that a deal was coming, but as we said earlier, was merely recapping what was already known.But what is most absurd about this entire incident is that nobody who was buying futures - and global stocks - actually listened to the Mnuchin clip in which he clearly used the past tense, and a second just as absurd outcome is that after stocks surged at 5am on the patently wrong headline meant to boost optimism in a deal...
Hundreds Of 737 Max Pilots Sue Boeing Over 'Unprecedented Cover-Up - Over 400 pilots have joined a class-action lawsuit against Boeing, accusing the company of an "unprecedented cover-up" of "known design flaws" on the company's top-selling 737 MAX, according to the Australian Broadcasting Company. The MAX, first put into service in 2017, was involved in two fatal crashes over the course of a year; the first off the coast of Indonesia in October 2018, killing 189 - and the second in Ethiopia, killing 157. The lawsuit, filed by a plaintiff who goes by "Pilot X" in court documents out of "fear of reprisal from Boeing and discrimination from Boeing customers," accuses the Chicago-based aviation giant of "an unprecedented cover-up of the known design flaws of the MAX, which predictably resulted in the crashes of two MAX aircraft and subsequent grounding of all MAX aircraft worldwide." The pilots argue that they "suffer and continue to suffer significant lost wages, among other economic and non-economic damages" since the fleet was grounded across the globe. The lawsuit focuses on the Maneuvering Characteristics Augmentation System (MCAS) anti-stall system, which Pilot X claims gave the aircraft "inherently dangerous aerodynamic handling defects." The reason for this handling quirk was by design, as Boeing made the decision to retrofit newer, large fuel-efficient engines onto an existing 737 model's fuselage, in order to create the MAX. The larger engines caused a change in aerodynamics which made the plane prone to pitching up during flight, so much so, that it risked a crash as a result of an aerodynamic stall. To stop this from happening, Boeing introduced MCAS software to the MAX, which automatically tilted the plane down if the software detected that the plane's nose was pointing at too steep of an angle, known as a high Angle of Attack (AOA). –ABC
Ex-chair of FCC broadband committee gets five years in prison for fraud -- The former head of FCC Chairman Ajit Pai's Broadband Deployment Advisory Committee (BDAC) was sentenced to five years in prison for defrauding investors.Elizabeth Ann Pierce was CEO of Quintillion, an Alaskan telecom company, when she lied to two investment firms in New York in order to raise $270 million to build a fiber network. She also defrauded two individual investors out of $365,000 and used a large chunk of that money for personal expenses. Pierce, 55, pleaded guilty and last week was given the five-year prison sentence in US District Court for the Southern District of New York, US Attorney Geoffrey Berman announced. Pierce was also "ordered to forfeit $896,698.00 and all of her interests in Quintillion and a property in Texas." She will also be subject to a restitution order to compensate her victims "at a later date."Pierce's industry experience helped her land the top spot on Pai's broadband advisory committee in April 2017. But she left Quintillion in July 2017 as her scheme unraveled, and she resigned from the FCC advisory panel. Pai appointed a new chairfor his committee two months later; he thanked Pierce for her service, saying she did "an excellent job" chairing the committee and "wish[ed] her all the best in her future endeavors."
Card fraud fuels criminal activity. Is industry doing enough to stop it? - Financial institutions have gotten better in recent years at detecting card fraud and limiting the damage that it causes. Within minutes of an unauthorized purchase, customers receive text alerts. New plastic gets issued quickly. The hassle is often minimal. But card fraud is so routine that it may not be reported to law enforcement officials, according to a new report that found examples of card fraud being used to support organized crime, human trafficking and terrorism around the globe. It argues that financial institutions have long treated payment fraud as an expected cost of doing business. “As long as fraud doesn’t get to be too big of a problem, the fraudsters are mostly left alone,” the report states. The report, which drew pushback from financial industry groups, was written by Terbium Labs, a Baltimore-based firm that sells services related to companies’ exposure on the dark web. It argues that both the financial industry and law enforcement agencies should take card fraud more seriously. To identify instances where card fraud was used to support graver criminal activity, the authors analyzed court records from various countries. They identified $1.05 billion in fraud losses associated with 115 cases that involved transnational crime. But those findings represent only the tip of the iceberg, according to the report. That is in part because many instances of card fraud never get reported to the authorities. Another factor is that law enforcement officials may decide not to charge criminals with payment fraud if they are accused of bigger crimes. “There’s big gaps in documentation and data availability,”
They're Baaack- Cerberus Revives HELOC-Backed Bonds That Went 'Extinct' After The Crisis -- A generation of Wall Street analysts and traders has come of age without many of the esoteric, mortgage-backed bonds and 'synthetic' derivatives that nearly destroyed the global economy in the run-up to the financial crisis. But as more financial firms cast about for products that will help pad their revenues as the Fed prepares to embark on its next rate-cutting cycle, products like these synthetic CDOs are being reintroduced as "safer" iterations of their pre-crisis cousins. In the latest example of this troubling trend, WSJ's Ben Eisen reported Monday that Cerberus is bringing back bonds entirely backed by home equity lines of credit (or HELOCs) - just in time for a refinancing boom that many expect will be triggered by tumbling mortgage rates.HELOC-backed bonds disappeared in the aftermath of the crisis as issuance dried up, even as some brazen investors reaped massive profits by scooping up the extant bonds for pennies on the dollar. Yet, this troubling legacy didn't stop four ratings agencies (including Fitch Ratings) from granting Cerberus's $174 million issue a triple-A rating, indicating that they are among the safest investments available."There has been some caution from issuers” about introducing new types of mortgage bonds, said Grant Bailey, the head of residential mortgage-backed securities at Fitch.One fund manager described the what's-old-is-new-again mortgage-backed issues as a "creative" way of taking advantage of a housing market that has been turbocharged by inadequate supply and an army of speculators like 'house flippers' (who now count among them a growing number of corporate "iBuyers")."We are starting to have a lot more creative issuance around mortgage credit," said Neil Aggarwal, deputy CIO at Semper Capital Management. "I wouldn’t be surprised if there’s more to follow after this transaction."
Billions Stolen From Black Families by Predatory Lending -- NEP’s Bill Black appears on The Real News Network and analyzes the new study, “The Plunder of Black Wealth in Chicago,” opening the way for a fruitful conversation about reparations and our future. You can view here with a transcript.
Do lending algorithms discriminate? Congress seeks answers — After years of largely standing on the sidelines, lawmakers are taking a closer look at whether algorithms used by banks and fintechs to make lending decisions could make discrimination worse instead of better. The issue was at the forefront of a hearing Wednesday by Congress' newly chartered artificial intelligence task force. “How can we be sure that AI credit underwriting models are not biased?” asked Rep. Bill Foster, D-Ill., who chairs the panel. “Who is accountable if AI algorithms are just a black box that nobody can explain when it makes a decision?” Sens. Elizabeth Warren, D-Mass., and Doug Jones, D-Ala., also pressed the heads of the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, and Consumer Financial Protection Bureau earlier this month to ensure that the algorithms used by financial firms do not result in discriminatory lending. They cited a University of California, Berkeley study that showed algorithmic lending created more competition and reduced the likelihood that minority borrowers would be rejected loans. But it also found that African-American and Hispanic borrowers were charged higher interest rates than white and Asian borrowers. The senators asked whether the agencies have the resources to evaluate algorithmic lending. Though the issue has been debated by banks and fintechs for several years, it appears pressure from lawmakers is brewing. “This is the next big kind of civil rights and financial services frontier,” said Brandon Barford, a policy analyst at Beacon Policy Advisors. Ed Mills, a policy analyst at Raymond James, said that the debate around algorithmic lending and artificial intelligence mirrors the discussion around the fairness of the methods used by credit bureaus in determining consumers’ scores. “We’ve been fighting this battle over credit bureaus and credit scores over a generation,” Mills said. This “is just the next front in that war.”
Warren sounds alarm on HUD hiring of embattled CFPB official— Sen. Elizabeth Warren is sounding the alarm on the Department of Housing and Urban Development's hiring of a former Consumer Financial Protection Bureau official with a history of controversial writings. The Massachusetts Democrat said she is worried that Eric Blankenstein, the CFPB’s former policy director for supervision, enforcement and fair lending, will not be able to work effectively as special counsel in HUD's office of general counsel. “I am gravely concerned that Mr. Blankenstein has been hired as a Special Counsel in HUD's Office of General Counsel because his troubling views suggest that he will be unable to fulfill core parts of HUD's mission, including fighting housing discrimination and closing the homeownership gap between white borrowers and borrowers of color,” Warren said in a letter to HUD Secretary Ben Carson. Blankenstein resigned from his position at the CFPB in May. He came under fire last year after it was reported that he used a pen name more than a decade ago to write blog posts saying people who use racial slurs aren’t necessarily racist, and calling most hate crimes “hoaxes.” After the reports, several CFPB colleagues spoke out, saying they were concerned his views had implications for his decision-making. In her letter to Carson, Warren said Blankenstein's writings disqualify him from working at the CFPB and HUD. “Just as Mr. Blankenstein's racist views disqualified him from overseeing the enforcement of lending discrimination law at the CFPB, his views also disqualify him from working at HUD — an agency with a mission that includes, ‘build[ing] inclusive and sustainable communities free from discrimination,' " Warren wrote. Specifically, she asked Carson to explain how Blankenstein was hired, what hiring processes are in place at HUD and whether any other individuals were evaluated for the role. Warren also asked about the process for vetting officials for senior HUD posts and whether anybody in the Trump administration, the CFPB, or elsewhere recommended Blankenstein for the role at HUD.
Warren leads Democratic call to reconsider another CFPB hire — Democratic lawmakers are calling on the Consumer Financial Protection Bureau to reconsider the hiring of Paul Watkins as the assistant director of the innovation office, following reports he worked for a group deemed by some as an anti-LGBTQ hate group. Sen. Elizabeth Warren, D-Mass., and Reps. Ayanna Pressley, D-Mass., and Katie Porter, D-Calif., told CFPB Director Kathy Kraninger in a letter Tuesday that they are concerned about Watkins’ fitness for his job considering the discretion his position has to exempt certain companies from complying with anti-discrimination laws. "Mr. Watkins' role at the CFPB gives him wide discretion to exempt companies — or even entire industries — from anti-discrimination laws and given his past work at a homophobic hate group, we are deeply concerned that he will use this power to scrap crucial protections for the LGBTQ consumers," the lawmakers said. "We therefore ask that you reconsider his employment and his role at the bureau." From 2012 to 2014, Watkins worked for Alliance Defending Freedom’s Blackstone Legal Fellowship, a leadership training program for law students, the group said in an email to American Banker. Alliance Defending Freedom was designated by the Southern Poverty Law Center as an anti-LGBTQ hate-group because it has "supported the recriminalization of homosexuality" and "defended state-sanctioned sterilization of trans people,” according to the lawmakers’ letter. The lawmakers said that when Watkins was hired by the CFPB in 2018, a press release detailed his work experience dating back to 2006, but failed to include his employment at Alliance Defending Freedom. They said they are worried his employment raises questions about the CFPB’s commitment to diversity and inclusion.
The Ivory Tower team of wonks behind Warren's policy agenda - Behind Elizabeth Warren’s trust-busting, Wall Street-bashing, tax-the-wealthy platform is a brain trust that extends well beyond the Beltway thinkers who often rubber stamp campaign proposals.Instead, the former Harvard professor and her tight team of policy advisers have waded deeper into the world of academia than is usual in presidential campaigns, according to interviews with more than a dozen people her campaign has consulted and a review of the scholarship underlying her plans. Leafing through Warren's plans posted on Medium, voters will find links to obscure academic literature from places like the Düsseldorf Institute for Competition Economics, the Upjohn Institute, the Journal of Applied Business and Economics, and the American Journal of Sociology. The unveiling of her agriculture policy, for example, came with bold promises to take on "Big Ag." But her policy team went into the weeds with experts beforehand, consulting texts like a recent book published by the Federal Reserve Bank of St. Louis titled, “Harvesting Opportunity: The Power of Regional Food System Investments to Transform Communities.”Warren is also frequently in touch with an array of academics, including several of her former students — slipping naturally from easily digestible campaign trail rhetoric to her native ivory tower vernacular.
CFPB extends comment period for HMDA proposal -- The Consumer Financial Protection Bureau is extending the comment period for its proposal to change what data is collected under the Home Mortgage Disclosure Act. The comment period will be extended 90 days to Oct. 15, the CFPB said, after three trade groups and 18 consumer advocacy organizations asked for more time to review the 2018 HMDA data, which is expected to be released in late summer, in order to comment on the bureau's plans. The CFPB is soliciting comments on certain HMDA data points as part of its 2015 HMDA final rule. The agency also wants comments related to the requirement that financial institutions report certain business or commercial transactions under Regulation C. In May, the CFPB said was looking to permanently raise the HMDA reporting threshold for closed-end mortgage loans to either 50 or 100 loans in the previous two years, up from the current 25-loan threshold. For open-end lines of credit, the CFPB is proposing to extend the current temporary coverage threshold of 500 open-end lines of credit for another two years. After that, the threshold would be set permanently at 200 open-end lines of credit. The Dodd-Frank Act mandated 14 additional data fields for HMDA data collection, on top of the nine that previously existed. The statute also gave the CFPB the discretion to add additional data fields and former CFPB Director Richard Cordray used that authority to establish 25 additional data points. Last year, passage of a regulatory relief law exempted an estimated 85% of all banks from reporting the expanded HMDA data points introduced for the 2018 reporting year. The banking industry lobbied heavily for the changes, particularly for an exemption from disclosure of all points and fees when a home loan is originated. HMDA data has been collected since 1975 and regulators use the data to enforce fair lending and anti-discrimination laws. Su
Trump forms White House council to ease barriers to affordable housing — President Trump signed an executive order Tuesday establishing a White House council dedicated to examining regulatory barriers to affordable housing in what it said is an attempt to address the rising costs of homeownership. The White House Council on Eliminating Barriers to Affordable Housing will consist of members from eight federal agencies, including the Department of Housing and Urban Development and the Treasury Department, and will be chaired by HUD Secretary Ben Carson. Members of the council will be responsible for engaging with state and local stakeholders to study and reduce zoning regulations that some claim are responsible for the skyrocketing cost of housing, as well as reviewing federal regulations. The group will also make policy recommendations and compile a report on the impact of government barriers to housing supply and the broader economy. "I am seriously considering Dr. Ben Carson as the head of HUD," President-elect Donald Trump tweeted on Tuesday. “Increasing the supply of housing by removing overly burdensome rules and regulations will reduce housing costs, boost economic growth, and provide more Americans with opportunities for economic mobility,” Carson said in a press release. Key Trump administration officials, including Carson and Federal Housing Finance Agency Director Mark Calabria, have complained about burdensome local regulations, claiming they are to blame for the nationwide shortage of housing and rising home prices. “One of the biggest factors driving prices up and dragging supply down is the accumulation of burdensome government mandates and fees, zoning and land-use restrictions, environmental regulations, building codes and permitting requirements,"
Completed foreclosures get sliced in half from a year ago - Completed foreclosures shot down 50% in May from the year before, with overall activity also declining by 22% during the same period, according to Attom Data Solutions. Mortgage lenders completed foreclosures on 10,634 properties, also down 4% from the prior month. The news falls in line with the trend that foreclosures have been falling off the map; the 22% drop in filings — which include default notices, scheduled auctions and bank repossessions —marks the 11th straight month of year-over-year declines. "We are continuing to see a downward trend with overall foreclosure activity, especially in completed foreclosures, declining year-after-year. However, in May 2019 we did see an uptick in the number of states increasing in foreclosure starts going from 17 to 23 states rising annually, and again Florida is bucking the national trend with a continuous annual increase," Todd Teta, Attom's chief product officer, said in a press release. Still, foreclosure starts overall were down 9% from May of last year, and Florida's figures — relative to the past — are not substantial despite their growth, according to Bruce Norris, president of real estate investment company The Norris Group. "To put the numbers in perspective, I would use a full year, perhaps 2006 as a 'normal' benchmark number. That would be the last year before the real estate world crashed," said Norris. "The total foreclosure starts for Florida in 2006 was 102,875. In 2018, there were 33,031 foreclosure starts. Even at a 25% increase over 2018, 2019 will still be less than 50% of 2006. An increase of some 8,000 foreclosure starts is not a game changer at this point." Florida foreclosure starts increased 23% year-over-year in May. Comparatively, Texas and Pennsylvania saw starts plummet 39% and 38%, respectively.
It's A Scary Picture - Midwest Farming Turmoil Being Compared To 2008 Housing Crisis - The wettest year in memory continues to decimate corn crops across the midwest, according to Bloomberg. And it's not just farmers that are bearing the brunt of the flooding, it's the entire agricultural economy. Those that provide supplies like seeds, fertilizer, equipment and services are also struggling. For example, BBG reports that "at Burrus Seed in Arenzville, Illinois, employees spend as much time trying to lift farmers’ spirits as they do selling to them." Todd Burrus, owner, said: “If we experienced a year like this, I don’t remember it. When the farm economy is tough, it’s going to be tough for all the suppliers.” Other Illinois seed business owners echo those sentiments. For instance, business owner Kurt Barman said that he's being inundated with returns: “All of the seeds are coming back, so that’s lost revenue for us.” Now, growers don't know whether to trade up to newer technology to protect crops and business, or use prior versions. Mark Patrick, chief financial officer of agro-chemical giant Syngenta AG said: “Couple that with less acres, you’ve got a very acute pressure going on at the moment.” Those in the fertilizer business have seen urea premiums running at more than double normal levels. The reason for the surge is due to the Mississippi being closed and and the normal flow of crop-nutrient shipments being disrupted. It's now being postulated that even the coming $28 billion in tariff aid may not be enough to rescue the Midwest from compounding negative catalysts. Agricultural credit conditions have also steadily deteriorated. According to the Kansas City Federal Reserve and a Purdue University/CME Group index, "farmer sentiment has plunged to levels not seen since October 2016, the month before Donald Trump’s election victory." Net farm income last year came in at about half of the $123 billion earned in 2013. Curt Hudnutt, head of North American rural banking for Rabobank said: “If you want to liken it to the 2008 recession from a housing perspective, it’s similar to that and it’s really vulnerable to any disruptions.'’
Freddie Mac: Mortgage Serious Delinquency Rate Decreased in May --Freddie Mac reported that the Single-Family serious delinquency rate in May was 0.63%, down from 0.65% in April. Freddie's rate is down from 0.87% in May 2018.Freddie's serious delinquency rate peaked in February 2010 at 4.20%.This is the lowest serious delinquency rate for Freddie Mac since November 2007. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". I expect the delinquency rate to decline to a cycle bottom in the 0.4% to 0.6% range - so this is close to a bottom.
MBA: Mortgage Applications Increased in Latest Weekly Survey --From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 21, 2019.... The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 percent higher than the same week one year ago...“Markets last week reacted to a more dovish FOMC statement and forecast, with Treasury yields falling after the meeting. Mortgage rates dropped again for most loan types, which led to an increase in refinance activity, partly driven by a 9 percent jump in VA applications,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The 30-year fixed rate has now dropped in three of the last four weeks, and at 4.06 percent, reached its lowest level since September 2017. Despite these lower rates, purchase applications decreased 2 percent, but were still considerably higher (9 percent) than a year ago.” Added Kan, “Now at almost the half-way mark of 2019, we have generally seen a stronger purchase market than last year, despite still-tight existing inventory and insufficient new construction.” ..The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.06 percent from 4.14 percent, with points decreasing to 0.35 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Case-Shiller: National House Price Index increased 3.5% year-over-year in April -- S&P/Case-Shiller released the monthly Home Price Indices for March ("April" is a 3 month average of February, March and April prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: Annual Home Price Gains Continue to Fall According to the S&P CoreLogic Case-Shiller Index:The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.5% annual gain in April, down from 3.7% in the previous month. The 10-City Composite annual increase came in at 2.3%, up from 2.2% in the previous month. The 20-City Composite posted a 2.5% year-over-year gain, down from 2.6% in the previous month. Las Vegas, Phoenix and Tampa reported the highest year-over-year gains among the 20 cities. In April, Las Vegas led the way with a 7.1% year-over-year price increase, followed by Phoenix with a 6.0% increase, and Tampa with a 5.6% increase. Nine of the 20 cities reported greater price increases in the year ending April 2019 versus the year ending March 2019. Before seasonal adjustment, the National Index posted a month-over-month increase of 0.9% in April. The 10-City and 20-City Composites both reported 0.8% increases for the month. After seasonal adjustment, the National Index recorded a 0.3% month-over-month increase in April. The 10-City Composite posted a 0.2% month-over-month increases and the 20-City Composite did not report an increase. In April, 19 of 20 cities reported increases before seasonal adjustment, while 14 of 20 cities reported increases after seasonal adjustment. “Home price gains continued in a trend of broad-based moderation,” says Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices. “Year-over-year price gains remain positive in most cities, though at diminishing rates of change. Seattle is a notable exception, where the YOY change has decreased from 13.1% in April 2018 to 0.0% in April 2019.“The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The National index is 12.9% above the bubble peak (SA), and up 0.3% (SA) in April. The National index is up 52.6% from the post-bubble low set in December 2011 (SA). The second graph shows the Year over year change in all three indices.
Case-Shiller Home Price Appreciation Slows For 13th Straight Month - Home price appreciation in the 20 largest US cities has slowed for 13 straight months, with Case-Shiller reporting that April's (the latest data) home price growth was just 2.5% YoY - the weakest since August 2012. Month-over-month, home prices were unchanged (worse than the expected 0.1% gain) Nationally, home prices decelerated to a 3.5% YoY pace.Nineteen of the 20 cities in the index showed year-over-year gains, led by Las Vegas at 7.1% and Phoenix at 6%. Seattle was the exception, decelerating to unchanged year-over-year, a sharp drop from 13.1% appreciation in April 2018. The California cities of San Francisco, Los Angeles and San Diego also registered gains below 2%.David Blitzer, chairman of the S&P index committee, said in a statement last month that "given the broader economic picture, housing should be doing better," but they haven't.“Home price gains continued in a trend of broad-based moderation,” Philip Murphy, global head of index governance at S&P Dow Jones Indices, said in a statement.“Year-over-year price gains remain positive in most cities, though at diminishing rates of change.”However, there is a possible silver lining. As this data pre-empts the sudden reversal lower in mortgage rates (and pick up in mortgage apps), perhaps this price deceleration cycle is almost over... for now?
FHFA House Price Index: Up 0.4% in April, Real Index Up 0.1%% - The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for April. Here is the opening of the report: U.S. house prices rose in April, up 0.4 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.1 percent increase for March 2019 remained unchanged. The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From April 2018 to April 2019, house prices were up 5.2 percent. [Read more] The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.
Real House Prices and Price-to-Rent Ratio in April - Here is the post yesterday on Case-Shiller: Case-Shiller: National House Price Index increased 3.5% year-over-year in April. It has been over eleven years since the bubble peak. In the Case-Shiller release yesterday, the seasonally adjusted National Index (SA), was reported as being 12.9% above the previous bubble peak. However, in real terms, the National index (SA) is still about 7.9% below the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is still 14.7% below the bubble peak. The year-over-year increase in prices has slowed to 3.5% nationally, and I expect price growth will slow a little more, but not turn negative this year. Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted). Case-Shiller and others report nominal house prices. As an example, if a house price was $200,000 in January 2000, the price would be close to $287,000 today adjusted for inflation (43%). That is why the second graph below is important - this shows "real" prices (adjusted for inflation). The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA (through March) in nominal terms as reported.In nominal terms, the Case-Shiller National index (SA)and the Case-Shiller Composite 20 Index (SA) are both at new all times highs (above the bubble peak). The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.In real terms, the National index is back to January 2005 levels, and the Composite 20 index is back to June 2004. In real terms, house prices are at 2004/2005 levels. On a price-to-rent basis, the Case-Shiller National index is back to February 2004 levels, and the Composite 20 index is back to October 2003 levels. In real terms, prices are back to late 2004 levels, and the price-to-rent ratio is back to late 2003, early 2004.
Zillow Case-Shiller Forecast: Same YoY Price Gains in May as in April - The Case-Shiller house price indexes for April were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Matthew Speakman at Zillow: April Case-Shiller Results and May Forecast: Getting Back to Normal The housing market has continued to normalize throughout the spring, finding more balance between buyers and sellers and slowing to a pace of growth much more in line with historic norms.The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be at 3.5% in May, the same as in April. The Zillow forecast is for the 20-City index to decline to 2.4% YoY in May from 2.5% in April, and for the 10-City index to decline to 2.2% YoY compared to 2.3% YoY in April.
Typical home too expensive in most markets despite affordability surge → Average wages can't afford a median priced home in three quarters of housing markets around the country, but slowing appreciation shifts that balance, according to Attom Data Solutions. The data provider's second quarter Home Affordability Report showed median home prices in 74% of counties weren't affordable to consumers with average income. It represents a 1 percentage point decrease year-over-year and 3 percentage point rise from the previous quarter. However, 82% of housing markets showed improved affordability from the year prior, a massive spike from the 3% in the second quarter of 2018. "Despite falling mortgage rates and rising wages, the cost of owning the typical home remains out of reach or a significant financial stretch for the nation’s average wage earners," Todd Teta, chief product officer at Attom Data Solutions, said in a press release. "However, a closer look at the data reveals milder-than-usual increases for the spring, and none as severe as in previous years since the recession. Therefore, this can help indicate the market may be easing, following similar indicators from recent home-flipping and foreclosure data trends." About 61% of housing markets posted lower affordability compared to their historical averages, a drop from 74% a year ago. Attom compiled average wage and median home price data from 480 counties. It based its report on the percentage of average wages needed to make monthly payments on a median-priced home with a 30-year fixed-rate mortgage and a 3% down payment. The highest shares of income needed to buy a median priced home came from California and New York in 2019's second quarter. An average wage earner would need 116.8% of their income in Marin County, Calif., 113.4% in Kings County, N.Y., and 112.3% in Santa Cruz County, Calif. The lowest shares were Bibb County, Ga., with 12.9%, Wayne County, Mich., at 13.2% and Baltimore City, Md., at 13.6%
New Home Sales decreased to 626,000 Annual Rate in May -- The Census Bureau reports New Home Sales in May were at a seasonally adjusted annual rate (SAAR) of 626 thousand. The previous three months were revised down slightly, combined. "Sales of new single‐family houses in May 2019 were at a seasonally adjusted annual rate of 626,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.8 percent below the revised April rate of 679,000 and is 3.7 percent below the May 2018 estimate of 650,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. Even with the increase in sales over the last several years, new home sales are still somewhat low historically. The second graph shows New Home Months of Supply.The months of supply increased in May to 6.4 months from 5.9 months in April. The all time record was 12.1 months of supply in January 2009. This is at the top of the normal range (less than 6 months supply is normal). "The seasonally‐adjusted estimate of new houses for sale at the end of May was 333,000. This represents a supply of 6.4 months at the current sales rate." Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973.The inventory of completed homes for sale is still somewhat low, and the combined total of completed and under construction is close to normal.The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate). In May 2019 (red column), 60 thousand new homes were sold (NSA). Last year, 62 thousand homes were sold in May. The all time high for May was 120 thousand in 2005, and the all time low for May was 30 thousand in 2011. This was below expectations of 680 thousand sales SAAR, and sales in the three previous months were revised down slightly combined. I'll have more later today.
New Home Sales Crash In May To Weakest Since 2018 - After existing-home-sales rebounded modestly in May, hope was high that lower mortgage rates would spark a renaissance in the US housing market... but a shocking 7.8% crash in new home sales in May has blown that narrative out of the water. Against expectations of a 1.6% MoM rise, new home sales plunged 7.8% in May to 626k, the weakest level since Dec 2018... This collapse is happening despite the plunge in mortgage rates. Median prices of new homes tumbled from $335.1K to $308K, lowest since Jan 2019... Purchases of new homes fell in the Northeast and the West, where they dropped the most since 2010. Sales rose in the South and Midwest. Along with the disappointing data from Case-Shiller, the rebound - on low rates - in US housing appears to be another dead cat bounce, not a phoenix.
A few Comments on May New Home Sales -- New home sales for May were reported at 626,000 on a seasonally adjusted annual rate basis (SAAR). Sales for April were revised up slightly, and sales for March were revised down. Earlier: New Home Sales decreased to 626,000 Annual Rate in May. This graph shows new home sales for 2018 and 2019 by month (Seasonally Adjusted Annual Rate). Sales in May were down 3.7% year-over-year compared to May 2018. Year-to-date (just through May), sales are up 4.0% compared to the same period in 2018. This comparison was the most difficult in the first half of 2018, so even with the disappointing sales in May, this is a solid start for 2019. And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales. The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through May 2019. This graph starts in 1994, but the relationship had been fairly steady back to the '60s. Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. Even though distressed sales are down significantly, following the bust, new home builders focused on more expensive homes - so the gap has only closed slowly. I still expect this gap to close. However, this assumes that the builders will offer some smaller, less expensive homes. Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.
New home sales: is housing developing a price “choke collar”? --So, new single family home sales for May were reported light this morning: Because this series is very volatile and heavily revised, as always take this with a grain of salt. To smooth out some of the volatility, I pay more attention to the three month moving average, which at 670k is slightly below that of that average for the past two reports, and also slightly below the late 2017 peak. Still it is above all of 2018, so it nevertheless adds to the evidence that the bottom for housing is in.Also, the YoY% change in median price, while reverting to negative this month, is also a significant improvement over the situation over the winter (red in the graph below): What is interesting here is how quickly price declines, and now price rebounds, have followed sales. Usually there is more of a lag: Here’s the quarterly average of YoY% change in median single family home prices (green, through Q1) vs. the monthly FHFA average (blue) and Case-Shiller national index (red): The FHFA and Case-Shiller price indexes have only decelerated to a point where they roughly match median household income growth. This makes me wonder if prices for new homes will shoot back up again quickly as demand returns. If so, we could wind up in a “choke collar” situation (similar to what we had with gas prices 5 to 10 years ago), where rapid price increases choke off demand, which causes prices to back off, which reignites demand, and so on repeatedly.This is important, because if the producer side of the economy falters, a choking off of higher new demand for housing would enhance the chances of a recession, and mute the chances of a housing recovery heading that off.
NAR: "Pending Home Sales Bounce Back 1.1% in May" -- From the NAR: Pending Home Sales Bounce Back 1.1% in May Pending home sales increased in May, a positive variation from the minor sales dip seen in the previous month, according to the National Association of Realtors®. Three of the four major regions saw growth in contract activity, with the West experiencing a slight sales decline.The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 1.1% to 105.4 in May, up from 104.3 in April. Year-over-year contract signings declined 0.7%, marking the 17th straight month of annual decreases....The PHSI in the Northeast rose 3.5% to 92.0 in May and is now 0.5% below a year ago. In the Midwest, the index grew 3.6% to 100.3 in May, 1.2% lower than May 2018. Pending home sales in the South inched up 0.1% to an index of 124.1 in May, which is 0.7% higher than last May. The index in the West dropped 1.8% in May to 91.8 and decreased 3.1% below a year ago. This was above expectations of a 0.6% increase for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in June and July.
Reis: Apartment Vacancy Rate unchanged in Q2 at 4.7% --Reis reported that the apartment vacancy rate was at 4.7% in Q2 2019, unchanged from 4.7% in Q1, and unchanged from 4.7% in Q2 2018. The vacancy rate peaked at 8.0% at the end of 2009, and bottomed at 4.1% in 2016. From chief economist Victor Calanog at Reis: The apartment vacancy rate was flat in the quarter at 4.7% - a zero net change from a year ago. After climbing 60 basis points from a low of 4.1% in Q3 2016, the vacancy rate has remained near 4.7% since the first quarter of 2018.The national average asking rent increased 1.2% in the second quarter while effective rent, which nets out landlord concessions, increased 1.3%. At $1,471 per unit (asking) and $1,400 per unit (effective), the average rents both increased 4.3%, from the second quarter of 2018..Apartment occupancy growth had accelerated in 2018 after slowing a bit in 2017. At the same time, the housing market slumped in the latter half of 2018 after gaining some heat in 2017. Thus far, in 2019, existing home sales have fluctuated a bit, yet at higher levels than year-end 2018; apartment occupancy growth has once again been subdued. We had attributed the acceleration in the apartment market in 2018 to the tax cut at the end of 2017 that reduced the incentive to buy a home. Many have cited falling mortgage rates to the housing market spikes that occurred in February and again in May. Despite having vacancies rise from 4.1% in the middle of 2016 to its current 4.7%, the apartment market has weathered the relatively strong influx of new supply very well. Performance has not been as brisk as recent peak years of 2014 (for lease-up velocity, when new buildings were achieving stabilization to market occupancy in 3 to 6 months - today it is closer to 9 to 15 months) and 2015 (for rent growth, which peaked at 5.8% for asking rents and 5.7% for effective rents). However, with construction slowing as soon as later this year and throughout 2020 for many major markets, continuing robust demand for rentals will likely manifest in vacancy rates that stay well in the 4s, or at most, rise to the low 5s. What may complicate this story is if the economy runs into any kind of contraction in the next 18 months.
Personal Income increased 0.5% in May, Spending increased 0.4% -- The BEA released the Personal Income and Outlays report for May:Personal income increased $88.6 billion (0.5 percent) in May according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $72.6 billion (0.5 percent) and personal consumption expenditures (PCE) increased $59.7 billion (0.4 percent). Real DPI increased 0.3 percent in May, and real PCE increased 0.2 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent. The May PCE price index increased 1.5 percent year-over-year and the May PCE price index, excluding food and energy, increased 1.6 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through May 2019 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.The dashed red lines are the quarterly levels for real PCE. The increase in personal income was above expectations, and the increase in PCE was at expectations.Note that core PCE inflation was slightly above expectations. Using the two-month method to estimate Q2 PCE growth, PCE was increasing at a 5.4% annual rate in Q2 2019. (using the mid-month method, PCE was increasing at 4.3%). This suggests strong PCE growth in Q2.
Real Disposable Income Per Capita in May -- With the release of this morning's report on May Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita.With the release of this morning's report on May Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.41% month-over-month change in disposable income was trimmed to 0.24% when we adjust for inflation. This is unchanged from last month's nominal and up from the 0.10% real increase last month. The year-over-year metrics are 3.27% nominal and 1.72% real.Post-recession, the trend was one of steady growth, but generally flattened out in late 2015. Disposable income picked up in 2018.The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend over time. The BEA uses the average dollar value in 2012 for inflation adjustment. But the 2012 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000. Nominal disposable income is up 90.2% since then. But the real purchasing power of those dollars is up only 34.0%.
U.S. consumer confidence dives, trade tensions hurting economy – (Reuters) - U.S. consumer confidence tumbled to a 21-month low in June as households grew a bit more pessimistic about business and labor market conditions amid concerns about a recent escalation in trade tensions between the United States and China. The economy’s prospects were further dimmed by other data on Tuesday showing sales of new single-family homes unexpectedly fell for a second straight month in May. Growing risks to the economy, especially related to the trade war between Washington and Beijing, and low inflation prompted the Federal Reserve last week to signal interest rate cuts beginning as early as July. “The headwinds from the ongoing trade war the economy faces are definitely growing stronger, and it will be a miracle if Fed officials can pull a rabbit out of their hats and keep the economy moving forward,” said Chris Rupkey, chief economist at MUFG in New York. The Conference Board said its consumer confidence index dropped 9.8 points to a reading of 121.5 this month, the lowest since September 2017, from a downwardly revised 131.3 in May. This month’s drop in the index was the largest since July 2015. The index, which was previously reported at 134.1 in May, still remains at lofty levels, suggesting consumer spending remains supported. The Conference Board blamed the decline on the trade tensions and cautioned that continued uncertainty “at some point, could even begin to diminish consumers’ confidence in the expansion.” The economy will mark 10 years of growth next month, the longest expansion on record.
UMich Confidence Hovers Near Record Highs As Business Sentiment Collapses - UMich consumer sentiment continues to hover near its highest levels since 2004... A modest drop in expectations (but rise in current conditions) sparked a small drop in the headline figure from 100.0 to 98.2 June's small overall decline was entirely due to households with incomes in the top third of the distribution, who more frequently mentioned the negative impact of tariffs, cited by 45%, up from 30% last month. "Most of the June slippage was concentrated in prospects for the national economy, with the unemployment rate expected to inch upward instead of drifting downward in the year ahead," Richard Curtin, director of the University of Michigan consumer survey, said in a statement. Medium-Term inflation expectations hovered at record lows (+2.3%). Buying Conditions improved for Houses and Large Appliances but faded for cars... Finally, we note that while consumer sentiment remains buoyant, sentiment among businesses seems to be collapsing... How long can that divide last?
Refinery Fire Brings High Summer Gas Prices - A fire at the largest refinery on the U.S. East Coast sent gasoline prices soaring, threatening to raise pump prices from Delaware to Maine just as American drivers get set to head off on vacation. Futures jumped 3.9%, the most in more than three months after an explosion and fire Friday at the Philadelphia Energy Solutions oil refinery. Pump prices are likely to rise as the surge filters down to retail stations, reversing a more than 20-cent drop from early May that took the nationwide average down to $2.67 a gallon. The incident could shut in about 4.2 million gallons a day of supply, enough to meet about 2.7% of East Coast demand, according to Bloomberg estimates. To fill the gap, prices would have to increase high enough to attract more supply from Europe of other parts of the U.S. The complex made up of the Point Breeze and Girard Point plants, can process 335,000 barrels of crude a day. It sends fuel via pipeline and barge to New York and New England, and through pipelines to upstate New York and across Pennsylvania. The blaze started after a leak in an alkylation unit, used to make high-octane gasoline, triggered explosions after which all the boilers stopped, causing a hard shutdown of the Girard Point section, according to people familiar with the plant’s operations. The fuel shortfall could be made up with inventory draws from the local region in the near term and from imports over the longer-term, according to Andy Lipow, president of Lipow Oil Associates in Houston. Supplies on the Colonial pipeline destined for other markets could be diverted into Pennsylvania, while it takes about 11 days for a tanker to reach the East Coast from Northwest Europe, according to Lipow. But, he said, “there’s certainly going to be price increases from an initial shortfall.”
Carmageddon Craves Cash-For-Clunkers 2.0 As Average Vehicle Age Soars To Record High - - Wolf Richter -The average age of passenger cars and trucks on the road in the US ticked up again in 2019, to another record of 11.8 years, IHS Markit reported today. When I entered the car business in 1985, the average age had just ticked up to 7.8 years, and the industry was fretting over it and thought the trend would have to reverse, and customers would soon come out of hiding and massively replace those old clunkers with new vehicles, and everyone would sell more and make more. But those industry hopes for a sustained reversal of the trend of the rising average age have been bitterly disappointed: This rising average age is largely driven by vehicles lasting longer – an unintended consequence of relentless improvements in overall quality, forced upon automakers by finicky customers in an ultra-competitive market where automakers struggle to stay alive. To make it in the US, they have to constantly improve their products, and stragglers that can’t compete are left unceremoniously by the wayside. US consumers are brutal. This unintended consequence of rising overall quality contributes to the dreadful industry problem: The US, despite constant population growth, is a horribly mature auto market. In 1999, so 20 years ago, new vehicle sales reached a record of 16.9 million units. This record was broken in 2000, with 17.3 million units. Then sales tapered off. By 2007, they’d dropped to 16.1 million units. Then the Financial Crisis hit, GM and Chrysler went bankrupt, Ford almost did, and peak-to-trough, sales plunged 40% to 10.4 million units by 2009. The recovery has been steep, and in 2015, finally the old record of the year 2000 was broken, but barely with 17.48 million units, and in 2016, the industry eked out another record of 17.55 million units. And that was it. Sales have fizzled since then. So far in 2019, the data indicates that sales are likely to fall below 17 million units, according to my own estimates, bringing the industry right back where it had been 20 years ago in 1999: Yet, given the longer average age of the vehicles on the road across the entire fleet, even stagnating sales produce a rising number of vehicles in operation. So it’s not that Americans as a whole have fewer cars – far from it: They have more cars, and those cars are on average older. The number of vehicles in operation (VIO) in 2019 rose by 5.9 million units from 2018, to a new record of 278.3 million vehicles, according to IHS Markit. In other words, during the 12-month period, about 17 million new vehicles were added to the national fleet; and about 11 million units were removed from the fleet, either by being sent to the salvage yard or by being exported to other countries.
California Ammo Sales Spike As Background Checks Start Monday - California gun owners have been rushing to buy bullets before a new background check law goes into effect statewide on Monday, the first of its kind in the nation. "In the last two weeks I’ve been up about 300 percent," one Sacramento ammunition store owner told Fox News, adding that people have been "bulking up because of these stupid new laws." Enacted in 2016, Proposition 63 and SB 1235 require one of two types of background check when buying any type of ammunition for a firearm; a $1 "Standard Ammunition Eligibility Check" for anyone who has legally purchased a handgun in the state since 1990 (and whose CA Driver's License or ID matches the address used at the time) which takes 2-3 minutes, or a more invasive $19 "Basic Ammunition Eligibility Check" that will take up to 10 days to complete. Those with a valid "Certificate of Eligibility" (COE) issued by the DOJ will require a $1 fee.
Peoples Gas’ plan to replace all pipes in Chicago could cost consumers much more - Chicago Sun-Times - A massive project to replace all of the natural gas pipes that run beneath the city of Chicago could leave hundreds of thousands of Peoples Gas customers paying 10 times what they do now by the time the work is finished in 2040, a new analysis finds. Peoples Gas’ 686,000 customers now pay, on average, about $75 a year toward the replacements, according to a new report by the Illinois Public Interest Research Group, a private, not-for-profit consumer advocacy organization. It estimates that, by 2040, they could be paying 10 times more — as much as $750 a year — toward the cost of removing and replacing the public utility’s old, leak-prone cast-iron pipes. That’s on top of what they pay for the natural gas they use. The report also finds that:
- According to Peoples Gas’ own ranking of neighborhoods with the greatest chance of leaks, the company doesn’t always replace the most at-risk gas pipes first.
- The utility’s pipe-replacement program, initially just for risky pipes, has been greatly expanded into a project that will hit ratepayers much harder.
- The gas company originally put the cost of the replacement program at $1.4 billion, but estimates by Peoples Gas and its consultants say it could end up costing from $8 billion to $11 billion.
Column: Rising inventories weigh on U.S. manufacturers and wholesalers (Reuters) - Rising stocks of unsold products have hampered U.S. manufacturing activity over the last year and point to an economy struggling to maintain momentum amid a trade war stalemate and increasing uncertainty. U.S. manufacturers, wholesalers and retailers held stocks of raw materials, work-in-progress and unsold items equivalent to 1.39 months' worth of sales at the end of April, up from 1.34 months at the end of June 2018. The rising inventory ratio has reversed the downtrend that prevailed over the previous two years and suggests manufacturers and distributors were taken unawares by a slowdown in sales since the middle of 2018. Elevated inventories are likely to depress new orders and manufacturing production runs over the next few months as producers and distributors try to control and then reverse the unplanned build up. Merchant wholesalers have been the worst hit, with inventory ratios rising from a low of 1.26 months in June 2018 to 1.34 in April, according to figures from the U.S. Census Bureau (https://tmsnrt.rs/2Fqzlbh). Wholesalers have reported the fastest increase in inventory ratios since the 2014/15 mid-cycle slowdown and before that the recession of 2008/09, in a sign of how rapidly and unexpectedly the economy has cooled. The rise in wholesale inventories has been entirely concentrated in durable items intended to last three years or more where the ratio has risen to 1.75 from 1.59 in May 2018. Within the durables sector, unsold motor vehicles and parts have surged to 1.80 months' worth of sales from just 1.55 in June 2018 and are now at the highest level since the middle of the last recession. By the end of April, wholesalers had $71 billion worth of unsold new autos and parts on hand, compared with $63 billion at the same point last year.
Headline Durable Goods Orders Down 1.3% in May - The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders: New orders for manufactured durable goods in April decreased $5.4 billion or 2.1 percent to $248.4 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 1.7 percent March increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders decreased 2.5 percent. Transportation equipment, also down two of the last three months, drove the decrease, $5.4 billion or 5.9 percent to $85.4 billion. Download full PDFThe latest new orders number at -1.3% month-over-month (MoM) was slightly better than the Investing.com no change estimate. The series is down 2.8% year-over-year (YoY).If we exclude transportation, "core" durable goods was up 0.3% MoM, which was better than the Investing.comconsensus of 0.1%. The core measure is up 0.2% YoY.If we exclude both transportation and defense for an even more fundamental "core", the latest number is up 1.6% MoM and up 0.7% YoY.Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is up 0.4% MoM and up 1.3% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.
US Durable Goods Orders Plunge Most In 3 Years - With manufacturing signals across the globe collapsing, expectations were for a modest drop in US Durable Goods Orders in May, however, the 1.3% MoM drop was far larger than expected and not helped by a notable downward revision in April. Worst still, on a YoY basis, durable goods orders plunged 3.3% - the most since July 2016's post-Brexit panic. Under the hood there was some silver linings to cling to with Capital Goods Shipments (ex-Air) rising 0.7% MoM (well above the 0.1% expected rise). And a proxy for business investment - non-military capital goods orders excluding aircraft - rose 0.4% after a 1% decline in the prior month. As Bloomberg notes, the pickup in equipment orders may ease concerns that unpredictable trade policy is weighing on manufacturers and complicating business investment. Stronger demand would offer more of a tailwind to second-quarter economic growth after a downbeat April figure. But in this brave new world, bad news is better than good to keep that 50bps bogey on the table.
US core capital goods orders rebound; shipments increase - New orders for key U.S.-made capital goods rose more than expected in May and shipments increased solidly, suggesting some stabilizing in business spending on equipment after it fell early in the year. The Commerce Department said on Wednesday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.4% last month amid increases in demand for machinery, and computers and electronic products. These so-called core capital goods orders dropped by an unrevised 1.0% in April. Economists polled by Reuters had forecast core capital goods orders edging up 0.1% in May. Core capital goods orders rose 2.3% on a year-on-year basis. Shipments of core capital goods increased 0.7% last month after an upwardly revised 0.4% gain in the prior month. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement. They were previously reported to have been unchanged in April. Business spending on equipment contracted in the first quarter for the first time in three years. Federal Reserve Chairman Jerome Powell last week acknowledged the weak business spending and said many policymakers “cited the investment picture and weaker business sentiment ... as supporting their judgment that the risk of less favorable outcomes has risen.” The weak business spending is weighing on production at factories. Manufacturing, which accounts for about 12% of the economy, is also being undermined by an inventory overhang, especially in the automobile industry, which has resulted in fewer orders being placed with factories. A slowing global economy and Boeing’s move to cut production of its troubled 737 MAX aircraft is also hurting manufacturing. In May, orders for machinery rose 0.7%. Orders for computers and electronic products increased 0.8%. There was also an increase in orders for primary metals. Orders for electrical equipment, appliances and components fell 0.4%. Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, dropped 1.3% in May after declining 2.8% in the prior month. Orders for transportation equipment tumbled 4.6% after diving 7.6% in April. Motor vehicles and parts orders rebounded 0.6% last month. Orders for non-defense aircraft plunged 28.2%. Boeing reported on its website that it had received no aircraft orders in May after getting orders for four planes in April. It has cut back production and suspended deliveries of the aircraft. Overall durable goods shipments rose 0.4% and inventories increased 0.5% in May.
Chemical Activity Barometer "Flat" in June --Note: This appears to be a leading indicator for industrial production. From the American Chemistry Council: Chemical Activity Barometer Is Flat In June The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was flat (0.0 percent change) in June on a three-month moving average (3MMA) basis, following three monthly gains. On a year-over-year (Y/Y) basis, the barometer is up 0.3 percent (3MMA)....“The slowing economy and rising trade tensions have weighed on business confidence and investment, resulting in mixed manufacturing activity,” said Kevin Swift, chief economist at ACC. “In summary, the CAB reading continues to signal gains in U.S. commercial and industrial activity through late 2019, but at a moderated pace.” ... Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index. This graph shows the year-over-year change in the 3-month moving average for the Chemical Activity Barometer compared to Industrial Production. It does appear that CAB (red) generally leads Industrial Production (blue). The year-over-year increase in the CAB suggests that the YoY increase in industrial production will probably slow further.
Dallas Fed: "Texas Manufacturing Expansion Continues but Pace Slows" --From the Dallas Fed: Texas Manufacturing Expansion Continues but Pace SlowsTexas factory activity continued to expand in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 6.3 to 8.9, indicating output growth accelerated slightly from May. Other measures of manufacturing activity exhibited mixed movements in June. The new orders index edged up to 3.7, a reading still below average. The growth rate of orders index fell eight points to -6.7, reaching its lowest reading in nearly three years. The capacity utilization index inched up to 9.6, while the shipments index retreated six points to 1.7, a two-year low. The capital expenditures index posted a double-digit decline, falling 11 points to 6.9, also a two-year low. Perceptions of broader business conditions shifted down again in June. The general business activity index pushed further into negative territory as more firms noted worsened activity this month than last. The index declined from -5.3 to -12.1, hitting a three-year low. Similarly, the company outlook index fell from -1.7 to -5.5, also a three-year low. The index measuring uncertainty regarding companies’ outlooks pushed up to 21.6, its highest reading since the question was added to the survey in January 2018.
Richmond Fed Manufacturing: Little Change in June - Today the Richmond Fed Manufacturing Composite Index decreased to 3 for the month of June, down from last month's 5. Investing.com had forecast 7. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at 6.0, which indicates expansion. The complete data series behind today's Richmond Fed manufacturing report, which dates from November 1993, is available here. Here is a snapshot of the complete Richmond Fed Manufacturing Composite series. Here is the latest Richmond Fed manufacturing overview.Fifth District manufacturing activity changed little in June, according to the most recent survey from the Richmond Fed. The composite index dropped slightly from 5 in May to 3 in June, resulting from a drop in the employment index, while the other two components, shipments and new orders rose slightly. Most firms reported some improvement in local business conditions, and they were optimistic that they would see growth in the next six months.Survey results suggested that the employment and average workweek indexes were fairly flat in June. Meanwhile, wage growth reportedly continued and firms still struggled to find workers with the necessary skills. Respondents expected this struggle to continue, but anticipated growth in employment and wages in the coming months.The growth rate of prices paid fell in June, while the growth rate of prices received increased, causing prices received to outpace prices paid for the first time since May 2017. Firms expected to see continued growth in both prices paid and prices received in the near future. Link to Report Here is a somewhat closer look at the index since the turn of the century.
Kansas City Fed: "Tenth District Manufacturing Activity Flat" -- From the Kansas City Fed: Tenth District Manufacturing Activity FlatThe Federal Reserve Bank of Kansas City released the June Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity was flat in June, while expectations for future activity remained solid.“Regional factory growth was relatively flat,” said Wilkerson. “However, nearly 70 percent of manufacturing contacts reported confidence in the U.S. economy, and a majority have not changed their 2019 plans for employment and capital spending.”... The month-over-month composite index was 0 in June, slightly lower than 4 in May and 5 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The change in manufacturing activity was mostly driven by a decline at durable production plants, especially for computers, electronic products, and transportation equipment. Most month-over-month indexes edged lower in June, with a number of indexes decreasing, including the materials inventory index. However, the new orders index inched higher. Nearly all of the year-over-year factory indexes decreased to their lowest levels since late 2016, and the composite index fell from 23 to 4. This was the last of the regional Fed surveys for June. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
June Regional Fed Manufacturing Overview - Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia.Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for June is 3.3, down from the previous month's 7.5. It is well below its all-time high of 25.1, set in May 2 004.
Chicago PMI Declines in Contraction Territory - The Chicago Business Barometer, also known as the Chicago Purchasing Manager's Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, fell to 49.7 in June from 54.2 in May, which was below the Investing.com forecast of 53.1. Values above 50.0 indicate expanding manufacturing activity.Here is an excerpt from the press release:“The Barometer entered contraction territory, having remained above 50 for over two years. With customers rethinking their purchases, demand tumbled, and consequently firms pulled back production, weakening overall business sentiment,” said Shaily Mittal, Senior Economist at MNI."In coming months, our survey will provide further evidence as to whether the diminished business confidence is temporary amid tariffs woes or more structural calling for some counter measures,” she added. [Source] Let's take a look at the Chicago PMI since its inception.
Earlier: Chicago PMI "First sub-50 reading since January 2017" -- From the Chicago PMI: Chicago Business Barometer – Declines to 49.7 in June The MNI Chicago Business Barometer decreased by 4.5 points to 49.7 in June from 54.2 in May, marking the first sub-50 reading since January 2017. Business confidence dipped significantly in Q2, with the Barometer averaging 52.2, down 13% on the previous quarter and almost 16% lower than Q2 2018. ...“The Barometer entered contraction territory, having remained above 50 for over two years. With customers rethinking their purchases, demand tumbled, and consequently firms pulled back production, weakening overall business sentiment,” said Shaily Mittal, Senior Economist at MNI. "In coming months, our survey will provide further evidence as to whether the diminished business confidence is temporary amid tariffs woes or more structural calling for some counter measures,” she added. This was below the consensus forecast of 53.6.
Weekly Initial Unemployment Claims increased to 227,000 -- The DOL reported: In the week ending June 22, the advance figure for seasonally adjusted initial claims was 227,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 216,000 to 217,000. The 4-week moving average was 221,250, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 218,750 to 219,000. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
BLS: Unemployment Rates in May at New Series Lows in Texas and Vermont - From the BLS: Regional and State Employment and Unemployment Summary Unemployment rates were lower in May in 6 states, higher in 2 states, and stable in 42 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today....Vermont had the lowest unemployment rate in May, 2.1 percent. The rates in Texas (3.5 percent) and Vermont (2.1 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.4 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%. Three states and the D.C. have unemployment rates above 5%; Alaska, Mississippi and New Mexico.A total of nine states are at the series low
Philly Fed: State Coincident Indexes increased in 41 states in May - From the Philly Fed: The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for May 2019. Over the past three months, the indexes increased in 45 states, decreased in four states, and remained stable in one, for a three-month diffusion index of 82. In the past month, the indexes increased in 41 states, decreased in five states, and remained stable in four, for a one-month diffusion index of 72. Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed: The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
Facebook moderators break their NDAs to expose desperate working conditions - In February, I wrote about the secret lives of Facebook contractors in America. Since 2016, when the company came under heavy criticism for failing to prevent various abuses of its platform, Facebook has expanded its workforce of people working on safety and security around the world to 30,000. About half of those are content moderators, and the vast majority are contractors hired through a handful of large professional services firms. In 2017, Facebook began opening content moderation sites in American cities including Phoenix, Austin, and Tampa. The goal was to improve the accuracy of moderation decisions by entrusting them to people more familiar with American culture and slang. Cognizant received a two-year, $200 million contract from Facebook to do the work, according to a former employee familiar with the matter. But in return for policing the boundaries of free expression on one of the internet’s largest platforms, individual contractors in North America make as little as $28,800 a year. They receive two 15-minute breaks and a 30-minute lunch each day, along with nine minutes per day of “wellness” time that they can use when they feel overwhelmed by the emotional toll of the job. After regular exposure to graphic violence and child exploitation, many workers are subsequently diagnosed with post-traumatic stress disorder and related conditions. My initial report focused on Phoenix, where workers told me that they had begun to embrace fringe views after continuously being exposed to conspiracy theories at work. One brought a gun to work to protect himself against the possibility of a fired employee returning to the office seeking vengeance. Others told me they are haunted by visions of the images and videos they saw during their time on the job. Conditions at the Phoenix site have not improved significantly since I visited.
The Seattle suburb where Jeff Bezos and Bill Gates both live is running out of money - Jeff Bezos and Bill Gates are the richest people in the world, worth $119 billion and $107 billion respectively, according to Bloomberg. Amazon is headquartered in Seattle and Microsoft is just outside the city, and both billionaires have homes in the nearby small town of Medina, Washington. With a population of just over 3,000, Medina is the seventh richest zip code in the U.S. with a median home value of $2.77 million, and the town has a median household income of $186,464 in 2017, the most recent data available. (By comparison, the 2017 median household income in the U.S. was $60,336.) Yet Medina is running out of money — and the irony is lost on no one. So how is the home of the richest people on the planet coming up short? The problem is, even though Medina home values are increasing, the city’s income is not rising at the same speed, the city says. “You may find it hard to imagine that the City doesn’t have enough income to sustain current service levels, particularly in this economy. While property values continue to rise, the City’s tax revenues don’t rise in tandem,” reads a June 2019 Medina city newsletter. That’s because by law, the local government cannot increase the amount of tax revenue it collects by more than 1% each year without the residents voting to approve a larger amount. The property tax rate in Washington state is set as a rate, not a percentage, Medina’s director of finance Julie Ketter tells CNBC Make It. For Medina, the property tax rate is $7.92925 per $1,000 of assessed value.
Florida City Pays $462,000 In Ransom After Second Cyberattack Cripples City's Infrastructure - Cyber-criminals have struck for the second week in a row, this time on a small Florida city called Lake City, according to the WSJ. The city has agreed to pay ransom to the tune of hundreds of thousands of dollars after a ransomware attack crippled its systems. Lake City's council approved the measure during an emergency meeting Monday night and will be paying about $462,000 via Bitcoin, by way of the city's insurer. This payment follows a similar incident in Riviera Beach, a city of 34,000 near West Palm Beach, where the city's council authorized a similar $600,000 ransom payment.The event [in Lake City] began June 10 with what the city described as a “triple threat” malware attack, then escalated with a ransom demand last week, the city said in a news release. The attack knocked out email and hindered city services, and people had to temporarily pay utility bills on terminals at the police station, the city manager said. The attack included a ransomware variant called Ryuk that is known for hefty ransom demands.Emergency services weren’t affected. But Lake City authorities worried they wouldn’t be able to access encrypted files such as ordinances, public-record requests and utility information. These are both signs of how increasingly sophisticated hackers are targeting cities with outdated IT infrastructure and holding them ransom for sizeable sums. And suceeding. The Riviera Beach ransom was about 12 times the size of a ransom demand that Atlanta refused to pay last year. These demands are becoming more common and are growing in size. The six figure sums averaged only a couple thousand dollars a few years ago. Ironically, the hacking measures appear to come thanks to a hack of the NSA's own weaponized hacking arsenal, which is now being used against the US. Attackers are going after both companies and cities regularly by exploiting vulnerabilities via malicious email attachments and demanding payments for decryption keys. The attacks occur "every day and many are never publicized". Local governments are especially vulnerable if they lack resources to update infrastructure and invest in security. The announcement will likely send president Trump off the rails, because in late May Bloomberg reported that as part of Trump's escalating battle with "European allies" over the fate of the Iran nuclear accord, he was "threatening penalties against the financial body created by Germany, the U.K. and France to shield trade with the Islamic Republic from U.S. sanctions" including the loss of access to the US financial system.
Called to serve: How this small North Carolina town became #1 in military recruiting - The small town of Hope Mills, N.C., achieved a rather outsized distinction this year: it’s the top-ranked town in America for young adults joining the military.North Carolina as a whole has top billing too, based on the number of 17- to 24-year-olds who join the military relative to the population in that age group. It has more towns in the top 25 than any other state, with six total receiving the following rankings: Hope Mills No. 1, Cameron No. 5, Spring Lake No. 13, Richlands No. 14, Hubert No. 15 and Raeford No. 16.But Hope Mills’ high rate of military participation is not the norm. Many of America’s largest cities are underrepresented, and the regions of the United States where recruits come from have become even more concentrated in recent years, a congressionally mandated panel studying military service recently found. “Forty-five years ago, about half of enlisted recruits came from the American South and West; today, that number is nearly 70 percent,” the National Commission on Military, National, and Public Service said in its initial report, which is still open for public comment.Those findings are mirrored in the Defense Department’s fiscal year 2018 ranking of the top 25 communities from which young people join the military.
Alabama: pregnant woman shot in stomach is charged in fetus's death - A woman from Alabama who was shot in the stomach while pregnant – with the bullets killing the fetus – has been charged with manslaughter. Marshae Jones was reportedly five months pregnant when she was shot by another woman in December outside a shop in Pleasant Grove, near Birmingham. On Wednesday, Jones, 27, was indicted by a Jefferson county grand jury on a manslaughter charge and is expected to be held in Jefferson county jail on a $50,000 bond, while the woman accused of shooting her walked free, reported AL.com. The case has raised alarm among pro-choice groups who say it is shocking evidence of how the state’s restrictive abortion laws are now being used against pregnant women. “The investigation showed that the only true victim in this was the unborn baby,’’ said Lt Danny Reid of Pleasant Grove police following the shooting, reported AL.com in December. “It was the mother of the child who initiated and continued the fight which resulted in the death of her own unborn baby.” Alabama is one of 38 states with fetal homicide laws that recognize a fetus as a potential victim. It is also a “stand-your-ground” state, which means people are allowed to use physical force to defend themselves if their reason is considered “justifiable”.
We Need to Make Kindergarten Engaging Again - In a kindergarten classroom in Texas, 22 children spend their day participating in more than 10 different teacher-led activities in seven hours. They write in journals, do math, practice spelling and phonics, learn to read, and more. They are just 5 years old. Across the country, kindergartners are being told what to do and how to do it, every single step along the way, all day long. They play less and study more than they did 20 years ago. This is what kindergarten has become, and it’s not a good thing. Besides diminishing children’s sense of wonder and their ability to see themselves as learners, this constant push for children to learn academics through routinized activities can negatively impact their learning in elementary school and even through high school. So why is this happening, and what can we do to make kindergarten an engaging place for learning again? During the past few years, I and members of my research team have been interviewing education stakeholders: kindergarteners, their families, teachers, school administrators, university educators and researchers, policy analysts, policymakers and lobbyists. We found that almost everyone we talked to is worried about what kindergarten has become. A principal in Texas told us: “We’re killing their joy for school in kindergarten. We have to ask ourselves, ‘What are we setting children up for later?’”
Publishers Warn Trade War Could Lead To Bible Shortages, Think Of The Children - Christian book publishers are pleading with President Donald Trump not to impose "a Bible tax," reported Bloomberg.The US and China have been locked in a tit-for-tat trade war for more than one year, now risk the chance of a full-blown economic war. In the last several weeks, President Trump threatened China with a 25% tariff on $300 billion worth of Chinese goods. If President Trump goes ahead with the next round of tariffs, it'll damage the Bible and the children's book industry because both have significant printing presence in China."We believe the administration was unaware of the potential negative impact these proposed tariffs would have on Bibles and that it never intended to impose 'a Bible tax' on consumers and religious organizations," Mark Schoenwald, chief executive officer of HarperCollins Christian Publishing, told a panel of officials at the US International Trade Commission.Bloomberg noted that Bibles and children's books are primarily manufactured in China because of the "unique paper, printing technology and skills needed." Daniel Reynolds, CEO of Workman Publishing Co., said there are no viable options outside of China to print children's books because of the waterproof and nontoxic materials used in some cases, as well as China's investment in recent decades in equipment. "If tariffs are imposed, there will be fewer books available to American kids," he said.
Why Public Schools’ Best Days Could Be Ahead of Us - Former vice president and current presidential hopeful Joe Biden recently caught a lot of flak for saying that his history of being “civil” with avowed segregationists was an asset worthy of the presidency. Biden’s critics were right to point out his “nostalgia” ignores the assault on democracy that occurred during those mythical “good times” before Trump, and a more important concern is whether years of systemic corruption and intransigence toward democracy have become so ingrained that government of the people, by the people, and for the people is no longer possible.That very concern is currently being tested in an arena long regarded as the foundation of democracy itself—the nation’s public schools. Currently, numerous urban school districts around the country are returning to local democratic control after years of authoritarian, and often corrupt, rule by their respective state governments. In New Orleans, Philadelphia, Detroit,Newark, and elsewhere, school districts that have spent years under the thumb of state-appointed boards and managers are transitioning to public control through either democratically elected boards or boards appointed by an elected mayor. These urban, mostly black communities face the reality that there are simply no “better days” to return to..St. Louis is historically one of the most racially segregated school systems in America, but under state-appointed governance, the district phased out its desegregation program. At its peak, St. Louis’s racial integration plan, one of the longest running in the country, involved almost 13,000 black urban students in suburban schools and 1,500 white suburban students who attended urban magnets. But beginning this year, the district is phasing out the desegregation plan, limiting new students participating in the program to siblings of those already enrolled.While helping to sunset the desegregation program, state-appointed leaders did nothing to address the effects of housing patterns in the city that cause intensely segregated schools. The district continues to have attendance zones that recreate the segregation in the underlying neighborhoods rather than remedy the separate school systems. Instead of integrating black students with their better-off white peers, the city seems intent on getting rid of them. According to the U.S. Census Bureau, black residents are fleeingthe city in record numbers and at a rate that, if it continues, will result in white residents outnumbering black residents by 2025.
West Virginia legalizes charters schools - Despite fierce opposition from teachers and workers in the state, West Virginia Governor Jim Justice signed a sweeping “education reform” bill into law Friday night, opening up the state to charter schools. Late news indicated that he had planned ceremonial bill signing events around the state, including in Kanawha and Jefferson counties for next Monday, but canceled them in fear of rank-and-file teacher protests organized outside of union control. In the ninth hour leading up to the signing, the West Virginia Education Association (WVEA) and American Federation of Teachers-West Virginia (AFT-WV) were hardly organizing resistance. On the contrary, they were penning separate pleas to the billionaire governor to veto the bill, publicly ignoring Justice’s central role in pushing through the measure. The stunt echoed their embrace of Justice in 2018 after the unions betrayed the teachers’ fight for full funding of the Public Employees Insurance Agency (PEIA). Educators across the state are livid at these developments and dead-set against school privatization. In this, they are joined by virtually all of the state’s workers and youth. The West Virginia Department of Education recently held forums revealing that 88 percent of West Virginians support their public schools and oppose charters.
San Francisco school board votes to paint over 'violent' George Washington mural -- The San Francisco Board of Education voted unanimously Tuesday to cover several murals at a San Francisco high school that depict images of slavery and a dead Native American, The Washington Post reported.“It’s always an issue when anyone wants to remove or cover or displace art,” Board Vice President Mark Sanchez told the Post. “But there are countervailing issues we had to look at as well. We believe students shouldn’t be exposed to violent imagery — that it’s degrading.”The 13 murals at George WashingtonHigh School, painted in 1936 by Russian-born artist Victor Arnautoff during the New Deal era, include an image of Washington standing over a dead Native American as he points to white frontiersmen. Another shows Washington at Mount Vernon with his slaves. The murals have reportedly long stirred controversy, but the board’s vote follows an advisory board’s ruling that the paintings don’t uphold the school’s values, the Post reports. Because the fresco painting was done on wet plaster, the mural is a “permanent, integral part of the wall it was painted on” and can’t be removed, according to board documents.School board spokeswoman Laura Dudnick told the Post in an email that staff will conduct a “deeper analysis” over the summer and report back to the board on options of how to cover its contents. The repainting is expected to cost about $600,000 and take more than a year to get done, according to NPR station KQED.
US schools erecting a massive digital surveillance infrastructure, choking dissent and free speech - Despite popular concerns over the violation of civil liberties and the right to privacy, 63 school districts in at least 20 US states purchased social media monitoring software in 2018 up from only six districts in 2013, according to a report published in April by NYU School of Law’s Brennan Center for Justice.The actual number of schools using social media surveillance tools or services to spy on their students, while unknown, is much greater than those represented by the study since districts self-report to the database of government purchases examined by the Brennan Center.Despite the lack of any evidence that online surveillance has ever foiled violence, school districts in Texas, Illinois, California, and Florida spent, from 2012-2018, a combined total of almost $1.5 million, allegedly to detect potential social media threats from well over a million students. Education Week noted in a May 30 report, “Social media monitoring companies track the posts of everyone in the areas surrounding schools, including adults. Other companies scan the private digital content of millions of students using district-issued computers and accounts. Those services are complemented with tip-reporting apps, facial-recognition software, and other new technology systems.”By tapping private companies’ services or tools to comb 24/7 through social media posts—including those by adults originating from a student’s home on family-owned devices—schools are trampling on US constitutional rights to privacy and playing a growing role in the efforts of the government and tech giants to surveil and censor the internet.A series of court decisions have opened the door to widespread surveillance in schools, including the US Supreme Court decision Board of Education v. Earls, written in 2002 by the arch-reactionary Clarence Thomas. The court held that “a student’s privacy interest is limited in a public school environment where the State is responsible for maintaining discipline, health, and safety.” As the World Socialist Web Site revealed last year, many data mining companies surveilling students on Facebook, Twitter and other social media platforms are operated by or employ former intelligence and law enforcement members. It is unsurprisingly, then, that many social media tracking companies have provided public school officials and police a way to stalk student protesters.
NSA dares students to break the cyber code, and then recruits them - The National Security Agency’s best and brightest cybersecurity experts are putting their skills to the test. No, it’s not by stopping the Chinese or Russians from hacking government systems—though they are doing that too, we think. Rather, it’s by developing a cyber challenge and daring more than 330 schools and 2,600 students to solve it. Kathy Hutson, the senior strategist for industry and academic engagement at the NSA, said the Codebreaker Challengehas become one of the best ways to attract the next generation of talent to the federal government. “We are doing the high touch and personal approach to educate and attract students. Through the Codebreaker Challenges, we are using a non-traditional approach, which also teaches good fundamental skills for NSA as well as the nation,” Hutson said on Ask the CIO. “In our new employee orientation class, we started to poll all of our new employees as far as how they became interested in NSA. Among the new employees at a recent orientation class, one woman identified that she came to NSA through the GenCyber camps, which NSA hosts, and what sealed the deal for her was participating in the Codebreaker Challenge.”
Two-thirds of American employees regret their college degrees A college education is still considered a pathway to higher lifetime earnings and gainful employment for Americans. Nevertheless, two-thirds of employees report having regrets when it comes to their advanced degrees, according to a PayScale survey of 248,000 respondents this past spring that was released Tuesday.Student loan debt, which has ballooned to nearly $1.6 trillion nationwide in 2019, was the No. 1 regret among workers with college degrees. About 27% of survey respondents listed student loans as their top misgiving, PayScale said. The findings illustrate why education loans burdening millions of Americans have become a hot-button issue among some Democratic presidential candidates. Most recently, Sen. Bernie Sanders on Monday proposed a plan to impose a tax on Wall Street trading and use the proceeds to erase that $1.6 trillion of debt. About 70% of college students graduated with student loan debt this year, averaging about $33,000 per student. And as younger grads pay off student loan balances, they're struggling to accumulate wealth or are putting off purchasing homes — some millennials are even struggling to purchase groceries. It's not just millennials. Baby boomers are taking on student loan debt either to help cover college costs for their children or to retrain themselves for a workplace transformed by increased automation, cloud computing and other labor-saving technologies. Some Americans age 62 and older are using their Social Security benefits to pay off more than $86 billion in unpaid college loans.
Jamie Dimon sounds off on student debt crisis: ‘What we’ve done is a disgrace’ - JP Morgan chief Jamie Dimon says we need to “fix the broken parts” of student lending in the United States.“What we’ve done is a disgrace and it’s hurting America,” JP Morgan’s chairman and CEO told Yahoo Finance in an interview Tuesday.With $1.6 trillion outstanding student debt in the United States, student lending is crippling many Americans. Today the average college graduate leaves school $30,000 in the debt, up from $10,000 in the 1990s. “I think they should look at all parts of student lending, fix the broken parts, and then forgive those people [who] need forgiveness, and then help people get into school, and then make sure the schools are responsible in getting the kids out,” Dimon said. Student loan debt has been an issue addressed by many 2020 Democratic presidential hopefuls, most recently Sen. Bernie Sanders, who announced a plan on Monday to erase the country’s outstanding student debt. The legislation would release 45 million Americans from their student debt and be paid for with a new tax on financial transactions on Wall Street. In April, Sen. Elizabeth Warren proposed that borrowers with household incomes under $100,000 would have $50,000 of their student debt canceled, and those who earn $100,000 to $250,000 would be eligible for relief on a sliding scale. “How they go about taxing, I’ll leave that to the politicians to figure that out,” Dimon said.
Bernie Sanders plans to cancel all $1.6 trillion of student debt by taxing Wall Street - Sen. Bernie Sanders announced a plan on Monday to erase the country’s $1.6 trillion outstanding student loan tab, intensifying the higher education policy debate in the 2020 Democratic presidential primary. The Democratic presidential candidate’s legislation — dubbed “The College for All Act” — will release all 45 million Americans from their student debt and be paid for with a new tax on Wall Street transactions. The proposal goes further than fellow Democratic candidate Elizabeth Warren’s plan, which caps student debt forgiveness at $50,000 and offers no relief to borrowers who earn more than $250,000. Outstanding education debt in the U.S. has eclipsed credit card and auto debt. Today the average college graduate leaves school $30,000 in the red, up from $10,000 in the 1990s, and 28% of student loan borrowers are in delinquency or default. Sanders’ plan would make two- and four-year public colleges and universities tuition- and debt-free. Trade schools and apprenticeship programs would be tuition-free, as well. “This is truly a revolutionary proposal,” Sanders told The Washington Post. “In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education.”
Bernie to Student Loan Sharks: Drop Dead - Earlier today, Bernie Sanders and Reps. Ilhan Omar, Alexandria Ocasio-Cortez, and Pramila Jayapal announced a plan tocompletely cancel all $1.6 trillion of student debt. Funding for the program would come from a Wall Street speculation tax.“If the American people bailed out Wall Street, now it is time for Wall Street to come to the aid of the middle class of this country,” Sanders said at a press conference.US student debt has more than tripled since 2006, now at over $1.5 trillion — almost 8 percent the size of the country’s GDP. Meanwhile, real wages are up less than 7 percent over the same period, and rents are up more than 47 percent in real dollars.Until now, Sanders had not committed to eliminating all student debt, preferring instead to say he would “drastically reduce” it. But today, he came out for full cancellation, saying, “The bottom line is we shouldn’t be punishing people for getting [a] higher education. It is time to hit the reset button. Under the proposal that we introduced today, all student debt would be canceled in six months.” “It is unjust and it is a burden that no generation before had to encounter to the scale and the level that our generation has,” Ocasio-Cortez said at the same press conference.
Sanders and Omar’s Plan Would Wipe Out Every Outstanding Student Loan - Today, Rep. Ilhan Omar of Minnesota released a bill to cancel all student debt in the nation, called the Student Debt Cancellation Act. Sen. Bernie Sanders is also introducing companion legislation for complete student debt cancellation as a part of broader package he is introducing on college affordability. While Representative Omar’s Student Debt Cancellation Act isn’t the first bill ever to propose canceling all student debt, it comes at a time when wide-scale student debt cancellation as a policy proposal is finally being treated with the seriousness it’s always deserved. Representative Omar’s legislation would enact universal debt cancellation — which means every single outstanding student loan, federal or private, would be wiped out. The bill comes two months after presidential candidate Sen. Elizabeth Warren released a proposal to wipe out all student debt for 75 percent of borrowers. Omar’s bill goes further than Warren’s plan, which caps debt cancellation at $50,000. Over 7.8 million borrowers (17 percent of all student debtors) owe $50,000 or more on their student loans, according to data from the New York Fed Reserve. This includes many borrowers who’ve pursued graduate degrees, and not only lawyers and people with MBAs. The average debt load of those who completed a master’s of education degree from 2015-16 was $55,200; for a master of science, it was $62,300. And of those pursuing any kind of advanced degree, Black and Latinx graduates are the most likely to have borrowed $50,000 or more. There are also many parents who’d benefit from universal debt cancellation. As of 2014, 13 percent of parents with Parent PLUS loans owe more than $50,000, and 4 percent owe over $100,000. Those with high loan balances are also likely to struggle to repay: almost 30 percent of all dollars in default are held by borrowers who owe over $50,000.
The Case for Combining Tuition-Free College with Debt Relief -- This week, Bernie Sanders launched his campaign to annihilate all $1.6 trillion in student debt. This far exceeds the amount Elizabeth Warren promises to alleviate ($640 billion). Warren pledges to eliminate up to $50,000 in debts for those making less than $100,000 per year. Those who owe more than $50,000 would still have to pay the remaining balance, and those earning more than $100,000 would receive smaller reductions. By contrast, Sanders vows to eliminate all outstanding debt. Sanders also promises to use federal money to make public colleges and universities tuition-free. Warren’s policy on tuition relies on state governments to provide a large percentage of the funding, and that means that Republican governors and state legislators would be able to refuse to participate, in much the same way that they refused to participate in Barack Obama’s Medicaid expansion. This would create a two-tier system, in which Americans living in blue states would enjoy educational rights denied to Americans living in red states. The Sanders plan is the only plan predicated on the principle that further education ought to be a universal right of all Americans, regardless of where they live or how much money they earn. But there are those who resist the Sanders plan, arguing that cancelling student debt and providing tuition-free college subsidises economically inefficient behaviour and rewards people who made mistakes. Others argue that debt relief is regressive, because college-educated Americans tend to be higher income than those who did not go to college. I think both of these arguments are wrong. Here’s why.
CU consortium to forgive student loans under CFPB order - The Consumer Financial Protection Bureau, 44 states and the District of Columbia announced a $168 million settlement with a credit union consortium over high-risk loans to students at the now-bankrupt ITT Technical Institute. The CFPB alleged that Student CU Connect CUSO, made up of seven credit unions, engaged in unfair acts and practices that resulted in roughly 8,600 students taking out student loans "that they could not afford, did not want, did not understand, or did not even know they had.” From 2009 to 2011, the consortium's loan program originated $189 million in loans for ITT students, the CFPB said. ITT filed for bankruptcy in 2016 after the federal government restricted the for-profit college from accessing federal student aid. The CFPB described a typical 10-year loan from consortium as having interest rates from 10.5% to 16.25%, plus origination fees of 10%, “with few options to reduce monthly payments.” The complaint and settlement were filed in U.S. District Court for the Southern District of Indiana. After ITT filed for bankruptcy, the consortium — known as a credit union service organization — projected a cumulative default rate of 94%, the CFPB said. Deborah J. Caruso, the trustee of ITT, sued the consortium of credit unions — including Eli Lilly Federal Credit Union, Bellco Credit Union, Credit Union of America, Directions Credit Union, Veridian Credit Union, Workers Credit Union and Community America Credit Union — as well as the Rochdale Group, a consulting firm, in 2017. Credit union service organizations are owned by credit unions but not directly overseen by the National Credit Union Administration. Problems with the organizations can affect the overall soundness of credit union owners. The credit unions are expected to provide a total of $168 million in loan forgiveness. The CFPB said the Student Connect must stop collecting loan payments and must write off outstanding loans. The order also requires the consortium to provide notice to all consumers with outstanding loans that their debt has been discharged.
Americans Lose Trillions Claiming Social Security at the Wrong Time - Almost all American retirees claim Social Security at the wrong time, a new report estimates, which means they will miss out on a collective $3.4 trillion in benefits before they die. While they can tap their benefits as early as age 62, retirees could boost the size of their checks for every year they wait until age 70, when the maximum benefit accrues. The advantage in waiting is substantial: A person eligible for a $725 monthly check at 62 could get a $1,280 check if they wait to start at age 70. United Income, a money management firm that provides financial advice to retirees, teamed up with former Social Security officials to simulate retiree decisions on when to claim benefits, along with factors that include income, wealth, taxes, health status and longevity. Their analysis, published Friday, found that 96% of retirees choose the wrong year to tap Social Security. “People are pretty much doing the opposite of what they should be doing,” said Matt Fellowes, founder and chief executive officer of United Income and co-author of the paper. When to take Social Security is a key decision for America’s elderly, for whom the program has become a critical safety net. About half of older Americans get most of their income from the program. Unlike investments and other sources of retirement income, Social Security benefits are guaranteed to keep up with inflation and last for life. That’s important when half of all 65-year-old American women can expect to live past age 86, according to Social Security estimates. The average life expectancy for U.S. men who are currently 65 is age 84.
1 In 6 Insured Hospital Patients Get A Surprise Bill For Out-Of-Network Care- About 1 in 6 Americans were surprised by a medical bill after treatment in a hospital in 2017 despite having insurance, according to a study published Thursday. On average, 16% of inpatient stays and 18% of emergency visits left a patient with at least one out-of-network charge. Most of those came from doctors offering treatment at the hospital, even when the patients chose an in-network hospital, according to researchers from the Kaiser Family Foundation. Its study was based on large employer insurance claims. (Kaiser Health News is an editorially independent program of the foundation.) The research also found that when a patient is admitted to the hospital from the emergency room, there’s a higher likelihood of an out-of-network charge. As many as 26% of admissions from the emergency room resulted in a surprise medical bill. “Millions of emergency visits and hospital stays left people with large employer coverage at risk of a surprise bill in 2017,” the authors wrote. The researchers got their data by analyzing large-employer claims from IBM’s MarketScan Research Databases, which include claims for almost 19 million individuals. Surprise medical bills are top of mind for American patients, with 38% reporting they were “very worried” about unexpected medical bills. Surprise bills don’t just come from the emergency room. Often, patients will pick an in-network facility and see a provider who works there but isn’t employed by the hospital. These doctors, from outside staffing firms, can charge out-of-network prices.
Health Care Price Transparency: Fool’s Gold, or Real Money in Your Pocket? - The news is full of stories about monumental surprise hospital bills, sky-high drug prices and patients going bankrupt. The government’s approach to addressing this, via an executive order that President Trump signed June 24, 2019, is to make hospitals disclose prices, including negotiated rates with insurers, so that patients supposedly can comparison shop. But this is fool’s gold – information that doesn’t address the real question about why these prices are so high in the first place. I know from my time as an academic researcher, hospital board member, adviser to Congress and health insurance CEO that the problems in health care are far deeper than just knowledge about hospital charges that few will ever pay.While it is easy to blame greedy pharmaceutical manufacturers, health insurers and hospital executives, the problem comes from the very nature of our confused system. Who actually benefits from these high prices and why do they persist? Is it just greed, or something endemic in the system? Many in the health care system, including hospitals, doctors and insurers, are complicit in this confusing mess, although all can justify their individual actions. The confusion begins for the patient when he or she receives an explanation of benefit (EOB). This typically says it is “Not a Bill,” although it really looks like one. What it actually shows is incredibly high provider prices and an equally implausible discount. The bottom line lists the actual payment and the amount the patient owes. Patients are supposed to be grateful for the discounts after they recover from the sticker shock of the listed price.When a service is provided out-of-network, or is not covered at all, or the person doesn’t have insurance, the patient is supposed to pay this full amount. Such “surprise bills” typically come to those least prepared to pay and, as a result, providers typically recover very little. So no one wins, except the collection agency and the lawyers.I believe the standard EOB is the beginning of unnecessary complexity that leads to higher prices and an impossibly flawed market where shopping can never really work properly.
Working a 10-hour day once a week increases stroke risk by nearly a third, study finds - People who work an average of one 10-hour day a week see their risk of suffering a stroke rise by a third compared with someone who does not regularly work “long hours”, a French study has found.Researchers looking at the impact of working cultures on cardiovascular health found that people who said they worked 10 hours or more for at least 50 days a year were around 29 per cent more likely to have a stroke.Those who worked long hours chronically, over a period of 10 years or more, were even more at risk, with a 45 per cent higher chance of having a stroke.“As a clinician, I will advise my patients to work more efficiently and plan to follow my own advice,” the study’s lead author Dr Alexis Descatha, of the French National Institute of Health and Medical Research said. The results, from lifestyle surveys and interviews with 143,592 participants aged 18 to 69 who have been followed up at regular intervals since 2012, could be even more concerning for Britons, who have the longest working hours of any EU nation.
Study links diet of ultra-processed foods to chronic disease risk CBC - New research from the University of Montreal links diets high in ultra-processed foods including carbonated drinks, mass-produced cookies and ice cream, and sweetened yogurts to chronic disease.The research was based on Statistics Canada data from a 2015 survey that found ultra-processed foods accounted for an average of 47 per cent of daily calories consumed by adults.In the survey, 13,608 participants aged 19 or older recounted what they ate and drank the day before and self-reported their height and weight, and whether they had diabetes and/or high blood pressure.Those who got more calories from ultra-processed food were found to have 31 per cent greater odds of developing obesity, 37 per cent higher odds of diabetes and 60 per cent increased risk of high blood pressure, compared to those who got the fewest calories from such foods. The study was commissioned by Heart and Stroke, which notes that obesity, diabetes and high blood pressure are all risk factors for heart disease and stroke.They are calling for front-of-package nutrition labels and restrictions on the way ultra-processed foods and beverages are marketed to children. The study also concludes with a plea for public policies that make whole and minimally processed foods and meals "more available, affordable, accessible and appealing for all segments of the population."
Americans Continue to Eat Processed Meat Despite Serious Health Warnings - New research shows that despite increasing evidence on just how unhealthy processed foods are, Americans have continued to eat the products at the same rate.A study published in the July edition of Journal of the Academy of Nutrition and Dietetics looked at trends between 1999 and 2016.Data on nearly 44,000 people shows that over this timespan the amount of processed meat consumed by adults in the U.S. has remained unchanged. Consumption of healthier meat options such as fish and shellfish also stayed the same. Any meat product that's been altered in some way to add flavor or shelf life is considered processed. The long list includes certain deli meats, along with hot dogs, sausage, bacon, and ham. "The World Health Organization (WHO) declared processed red meat to be in the same cancer-causing category as cigarettes and plutonium, so it obviously carries some significant danger," Dr. Andrew Freeman, a cardiologist and director of cardiovascular prevention and wellness at National Jewish Health, told Healthline. To understand what makes these meats so unhealthy, it helps to look at what's in it. One primary component of processed meat are nitrites and nitrates, components that prevent the growth of bacteria and add a salty flavor. "A large WHO study showed strong associations between nitrates and nitrites and cancers of the stomach and colon," Kirkpatrick told Healthline. "Just last week, The BMJ found early death associated with processed red meat as well, showing that processed red meat carries much more sodium than unprocessed meat, potentially increasing the risk for hypertension, stroke, and heart attack." "If you go to the store right now, there's nothing on the packaging saying this product may be associated with cancer, or with heart disease for that matter, sadly," Freeman said. "It doesn't surprise me that the study showed no change and it should be a warning to us that we really need to do a much better effort at raising awareness of the risks of consuming these products regularly."
How Judges Kill: Sealing Corporate Records Showing Destructive Behavior Based on Dodgy “Trade Secret” Claims - by Yves Smith - A new Reuters article describes in considerable detail how judges routinely accept the request of corporate defendants to keep their dirty laundry secret, even though court records are supposed to be public. This has come at a very high cost to Americans, via defective products staying on the market far longer than they would have otherwise, and in the case of Purdue Pharma, its finely-tuned pill-pushing sales machine operating unimpeded for at least a decade longer than when some prosecutors got wind of Purdue Pharma’s predatory conduct. The Reuters findings are dramatic: over the past two decades, …judges sealed evidence relevant to public health and safety in about half of the 115 biggest defective-product cases consolidated before federal judges in so-called multidistrict litigation, or MDLs. Those cases comprised nearly 250,000 individual death and injury lawsuits, involving dozens of products used by millions of consumers: drugs, cars, medical devices and other products… …in at least 31 of the 115 large federal product-liability cases Reuters reviewed, judges sealed entire arguments that dealt directly with the strength of the evidence. Court rules frown on such broad sealing practices because truly confidential information rarely spans an entire legal brief. In most of those cases, nothing in the court record indicates that the judge conducted any analysis of whether secrecy was merited. The reason? It is sometimes spurious claims that documents obtained in discovery rise to “trade secret” status, which as we’ll discuss shortly, is a very high bar and not operative in the cases Reuters probed. But in many other instances, judges simply rubber stamped big corporate demands. From the must-read Reuters piece, How judges added to the grim toll of opioids:….court records are presumed to be public as a matter of law. They can only be sealed for valid concerns about privacy, including personal medical records, and to protect company trade secrets. In most states and nearly all the 13 federal appellate circuits, judges are legally obliged to weigh any litigant’s request that information be sealed against the broader public interest in making it public. They also must explain in the court record any decision in favor of secrecy. Judges incur no penalty for failing to do these things. In practice, secrecy has become so ingrained in the system that judges rarely question it. In 85 percent of the cases where Reuters found health and safety information under seal, judges provided no explanation for allowing the secrecy.
Blue Gold - This Animal's Blood Is Worth $60,000 Per Gallon - The pharmaceutical industry has been commercially harvesting blood from the Limulus Polyphemus-the Atlantic horseshoe crab for decades- for a very special reason: "blue gold" as it is called, can fetch tens of thousands of dollars per gallon, reported Bloomberg. The 450 million year crab was discovered in the 1960s to have unique blood that would revolutionize medicine. Unlike the blood of vertebrates, horseshoe crabs don't use hemoglobin to carry oxygen throughout their body. Instead, they use hemocyanin, a protein that transports the oxygen, turns the blood blue, and has specialized immune cells that are extremely valuable. Invertebrates like the horseshoe crab carry amebocytes instead of white blood cells in vertebrates. Amebocyte is the cell that has the medical community demanding more. When the cell comes into contact with a pathogen, it releases a chemical that causes the blood to clot, which is the mechanism for isolating dangerous pathogens. The blue blood extracted from the horseshoe crab is called Limulus Amebocyte Lysate (LAL) and is worth its weight in gold. The blood can demand as high as $60,000 per gallon. Once the blood is extracted, the horseshoe crabs are released back into the ocean. Estimates show that 15% to 20% die as a result of the process. Bloomberg says horseshoe crab populations have collapsed by 80% in the last four decades. A professor at the National University of Singapore invented a synthetic solution two decades ago that would substitute horseshoe crab blood. But it seems the pharmaceutical industry prefers to keep bleeding horseshoe crabs until they become extinct.
Mountains of trash in LA could cause bubonic plague outbreak: expert - Trash is a growing problem for residents in Los Angeles and as the garbage piles up, so do the rats, fueling concerns about flea-borne typhus, according to reports. Last October, after at least nine reports of the disease, Los Angeles officials cleaned up some of the worst piles of garbage, NBC Los Angeles reported. But now, the trash has accumulated once again. It could reportedly take up to 90 days for the trash to be removed once again, according to NBC Los Angeles. The outlet also reported that the city has no plan for controlling its rodent population. All that garbage attracts rats, which “pose a public health risk,” an infectious disease specialist told the outlet, because the rodents can lead to the spread of salmonella and bubonic plague — not to mention fleas that have been infected with typhus. At least nine people were reported ill with typhus in downtown Los Angeles between July and September, with officials pointing to refuse and stray animals as potential catalysts, according to reports from October. Typhus is a disease caused by bacteria found in infected fleas that can come from cats, rats, opossums and other stray animals. Accumulation of trash or overcrowding and poor hygiene is typically associated with the spread of the disease. Symptoms typically begin within two weeks of exposure and may include fever, chills, body aches, loss of appetite, nausea, vomiting, stomach pain and rash. Symptoms can usually be managed on their own, but severe cases may require antibiotics. Those with severe cases who avoid treatment may risk organ damage or even death. While the disease cannot be transmitted human-to-human, there is no vaccine available. Patients can lower their risk of contracting the typhus by avoiding contact with fleas and avoiding areas where rodents are found. According to NBC Los Angeles, Los Angeles County reported 124 cases of typhus last year.
Bubonic Plague In LA- California On The Verge Of Becoming A Third World State -- The city of Los Angeles is quickly descending into a cesspool of decay and disease. With bubonic plague now likely present amongst residents, the city and the state of California are on the verge of becoming a third-world hellscape. Some say that that’s already happened... Even police stations in the city are loaded with rats and according to Townhall, one was fined $5,000 over its conditions that left one officer stricken with typhoid fever. California’s descent has gotten to the point where there is a possibility that bubonic plague (the black death) may now be present in the city. This isn’t new information either. Typhus outbreaks were being reported back in February. Typhus is not transmitted person-to-person, and flea-borne typhus can spread to people from infected fleas and their feces. Typhus infection can be prevented through flea control measures on pets, using insect repellent to avoid flea bites and clearing areas that can attract wild or stray animals like cats, rats, and opossums, according to the Department of Public Health. Typhus is spread by fleas hitching a ride on rats. While the general population struggles under the weight of the government (local, state, and federal in LA’s case) and the homeless population continues to climb up, the same cannot be said for the rats that carry fleas the cause typhus. The rat population in LA is doing just fine, however, as piles of garbage dot the cityscape, making it Thanksgiving Day every day for the city’s fat, happy rodents, wrote the American Thinker. –SHTFPlan California’s burgeoning homeless camps are not the most hygienic places to live, obviously. And with the homeless population growing daily, the encampments are becoming more dangerous when it comes to crime and disease. .“We have a complete breakdown of the basic needs of civilization in Los Angeles right now,” Pinsky told Fox News host Laura Ingraham.“We have the three prongs of airborne disease, tuberculosis is exploding, rodent-borne. We are one of the only cities in the country that doesn’t have a rodent control program, and sanitation has broken down.” Pinsky said bubonic plague, which is also known as the “Black Death,” a pandemic that killed off millions in the 14th century, is “likely” already present in Los Angeles. The plague is spread by infected fleas and exposure to bodily fluids from a dead plague-infected animal, with the bacteria entering through the skin and traveling to lymph nodes.
Lyme Disease Cases Are Exploding. And It’s Only Going to Get Worse. -- Since 1992, the Cary Institute has been compiling a record of tick ecology that they believe to be the longest continuous study of this kind in the U.S. and possibly the world. Mostly its researchers encounter the blacklegged, or deer, tick (Ixodes scapularis), but in recent years, they’ve also been seeing increasing numbers of lone star ticks (Amblyomma americanum), which are native to the American Southeast but now range from northern Mexico to Canada. Over the years, an alarming number of ticks in the surrounding area have been revealed to carry Borrelia burgdorferi, the bacteria that causes Lyme disease, while others have tested positive for the pathogens that cause other tick-borne illnesses, including the potentially fatal Powassan virus.Because ticks acquire pathogens from hosts, understanding tick-borne diseases means understanding ticks’ so-called disease reservoir, especially mice. If the urban rat was the primary carrier of bubonic plague, the country mouse is it for Lyme disease. And just as the fleas that fed on infected rats spread the plague, ticks that feed on infected mice transmit Lyme. The process for counting ticks not affixed to hosts is called a drag — the researchers pull a one-square-meter sheet of fabric along the ground for 30 meters then tally the number of ticks affixed to it. Oggenfuss holds the Cary Institute record for ticks collected in a single drag: 1,700. As horrifying as that haul was — and it would, by extrapolation, put the tick population on the Cary Institute’s 2,000-acre campus at 2 billion — Oggenfuss is quick to note it was exceptional, and tick density is irregular. Her more conservative calculations of average tick populations, based on drags done during the same time of year (August, the larval peak), are only reassuring by comparison: upward of 20,000 ticks per acre, more than 100,000 on the Henry Control grid, and more than 40 million on the Cary Institute grounds.
EPA's risk evaluation for 1,4-dioxane angers enviros - Activists are outraged after EPA today issued a draft review of a likely carcinogen that says it does not pose an unreasonable risk to workers or the environment. The chemical, 1,4-dioxane, is used as a solvent in the manufacture of other chemicals and can be found in consumer items such as skin care products and paint strippers. EPA said the chemical was a likely carcinogen to humans in its 2017 fact sheet on 1,4-dioxane and its chemical properties. EPA issued its draft risk evaluation today, stating that the agency found "no unreasonable risks to occupational non-users" and "no unreasonable risks to the environment." In 2017, however, an agency fact sheet said the chemicals are hard to break down in the environment. "The physical and chemical properties and behavior of 1,4-dioxane create challenges for its characterization and treatment," EPA wrote in 2017. "It is highly mobile and does not readily biodegrade in the environment." New York state has moved to ban the chemical in all consumer products after it made its way into Long Island water systems. EPA's draft evaluation, if no changes are made, could allow the chemical to remain on the market and unregulated. "By ignoring the risks 1,4-dioxane presents to Americans, the Trump EPA is again undermining both the spirit and letter of the federal chemical safety law," Melanie Benesh, an attorney at the Environmental Working Group, said in a statement.
When Pollution Is a Matter of Life and Death - Not long after President Trump took office, I visited a small neighborhood in Louisiana. A half-hour from New Orleans, St. John the Baptist is a rectangle of modest homes bounded by the Mississippi River on one side and a large factory on another. For years, the people living there felt they had suffered a disproportionate share of health problems, including immune disorders, respiratory distress, headaches, heart troubles and cancers. As an environmental reporter, I know how hard it is to definitively tie a community’s health complaints to its surroundings. But in St. John, the case had already been precisely made by the very entity that had the power to change it. At the end of 2015, a report from the Environmental Protection Agency showed that the census tract in St. John had by far the highest risk of cancer from air pollution in the nation. Nationwide the risk of cancer from chemicals emitted by industrial facilities was about 30 for every million people. But in this small neighborhood, it was more than 800. A vast majority of that risk, according to the report, was coming from a colorless gas called chloroprene that the nearby synthetic rubber factory has been emitting since 1969. For most of that time, there was no official government recognition of the chemical’s harms. But in 2010, a little-known division of the E.P.A. called the Integrated Risk Information System, or IRIS, had assessed chloroprene to be a likely human carcinogen and calculated a new safety limit for it. Five years later, the agency’s National Air Toxics Assessment report used that threshold and emissions data from the plant to estimate the local cancer risk. Of course, the news that they had been breathing toxic air for decades infuriated the people of St. John. But it also served as a cry for help. Surely once a federal agency pinpointed their problem, someone would have to fix it. But as the people of St. John soon learned, though lawmakers can use the risk levels from IRIS to legally limit chemicals, set levels at federal cleanup sites or shutter factories that emit them, they don’t have to do any of those things. And so far, in St. John, no one has.
Cigarette Waste: New Solutions for the World’s Most-Littered Trash - By now it's no secret that plastic waste in our oceans is a global epidemic. When some of it washes ashore — plastic bottles, plastic bags, food wrappers — we get a stark reminder. And lately one part of this problem has been most glaring to volunteers who comb beaches picking up trash: cigarette butts. Last year the nonprofit Ocean Conservancy reported that cigarette butts, which contain plastic and toxic chemicals, were the most-littered item at their global beach cleanups.Trillions of butts are tossed each year. So what's being done about it? Environmental advocacy groups have spurred increased public education about the environmental impacts and pushed for the installation of more bins to safely dispose of butts. Some cities have put restrictions on where people can smoke or instituted additional fees on cigarettes to fund clean-up costs. Butt pollution continues. Now legislators are trying a different approach — producer responsibility. New legislation in several states, including a bill in California to ban products with single-use filters, could force cigarette manufacturers to take responsibility for the environmental impacts of their products. California's S.B. 424 would ban any tobacco products with single-use filters and require that manufacturers of products like vaporizers and e-cigarettes ensure that they can be recycled or properly disposed of through take-back programs. Hickman says the bill would be "monumental in the fight against cigarette butt pollution." It would be the most sweeping statewide restriction on tobacco in the U.S. and effectively ban cigarettes as they are currently made and packaged now, since virtually all have filters — which don't provide the benefits most smokers think they do.
Americans' plastic recycling is dumped in landfills, investigation shows - For years, Pearl Pai and her family generated almost no trash. She carefully washed, sorted and bagged hard-to-recycle items and drove them two towns over from her home in Berkeley, California, to the area’s best recycling center. But on a gray morning in late May, when she pulled up with a bag of flimsy plastic clamshell-style containers, yogurt tubs and meat trays, the sign informed her that, “due to poor market conditions”, these items would no longer be accepted for recycling. A Guardian investigation reveals that cities around the country are no longer recycling many types of plastic dropped into recycling bins. Instead, they are being landfilled, burned or stockpiled. From Los Angeles to Florida to the Arizona desert, officials say, vast quantities of plastic are now no better than garbage. The “market conditions” on the sign Pai saw referred to the situation caused by China. Once the largest buyer of US plastic waste, the country shut its doors to all but highest-quality plastics in 2017. The move sent shockwaves through the American industry as recyclers scrambled, and often failed, to find new buyers. Now the turmoil besetting a global trade network, which is normally hidden from view, is hitting home. In total, only about half (56%) of the plastic waste that America once exported is still being accepted by foreign markets in the wake of China’s ban. This week, the Guardian revealed that what still goes overseas is inundating countries including Vietnam, Turkey, Malaysia and Senegal. But much of what remains has nowhere to go. Analysis of US export records shows that the equivalent of 19,000 shipping containers of plastic recycling per month, once exported abroad, is now stranded at home.
Trump EPA OKs ‘Emergency’ Use of Bee-Killing Pesticide on 13.9 Million Acres - More than 40 percent of insects could go extinct globally in the next few decades. So why did the U.S. Environmental Protection Agency (EPA) last week OK the 'emergency' use of the bee-killing pesticidesulfoxaflor on 13.9 million acres?EcoWatch teamed up with Center for Biological Diversity via EcoWatch Live on Facebook to find out why. Environmental Health Director and Senior Attorney Lori Ann Burd explained how there is a loophole in the The Federal Insecticide, Fungicide, and Rodenticide Act under section 18, "that allows for entities and states to request emergency exemptions to spraying pesticides where they otherwise wouldn't be allowed to spray."In a press release sent to EcoWatch, the Center for Biological Diversity stated: The approval includes 2019 crops of cotton and sorghum in Alabama, Arkansas, California, Georgia, Kansas, Louisiana, Missouri, Mississippi, Tennessee, Texas and Virginia. Ten of the 11 states have been granted the approvals for at least four consecutive years for the same "emergency." Five have been given approvals for at least six consecutive years.If an occurrence is happening six years in a row, does that justify an emergency?"This administration has been grossly abusing this exemption to allow the use of this one pesticide called sulfoxaflor on a vast acreage year after year," said Burd.Our biodiversity is at serious risk. For example, in Texas — where 5.8 million acres got emergency exemption to spray — more than 800 native bee species and eight species of bumblebees reside. It is also an important migration route for monarch butterflies."Monarch butterflies and eight species of bumblebees do overlap with Texas counties where there is sulfoxaflor spraying," said Burd. "Even at subacute, very low doses, sufoxaflor will have a very dramatic effect on bumblebee reproduction." The purpose of sulfoxaflor is to kill insects.
Millions of Songbirds Suffer Gruesome Deaths So the Olive Industry Can Save a Buck - Imagine you're a redwing, a small, speckled bird in the thrush family. You weigh as little as two light bulbs, and yet each year you make a 2,300-mile journey from your summering grounds in Iceland to a winter refuge in Morocco. One night, you decide to stop off in an olive grove in Portugal to rest your weary wings.Little do you know, night is when the machines come.Mechanical harvesters taller than the trees themselves rumble through the olive groves, each equipped with floodlights and rows of vibrating teeth. Like a slow-moving beast, the harvesters straddle the trees and throttle them, shaking loose their olives and directing the fruits to powerful vacuums for collection. It's an incredibly efficient way to harvest the olives destined for our cooking oil, martinis, and charcuterie platters. And according to the Olive Oil Times, night harvesting preserves the aromatic qualities of the crop. But the benefits stop there. Birds like the redwing seem to be "dazzled by the strong lights of the machines," said Vanessa Mata, an ecologist at the Research Center in Biodiversity and Genetic Resources in Portugal. During the day, the birds would simply fly away. At night, they become disoriented and can wind up getting sucked into the harvesters, with fatal consequences. In southern Spain, olive farmers sometimes sell the dead to local restaurants which offer them on menus as "fried birds" — an illegal practice that is "highly pursued by the Ministry of Health," according to a new report by the environmental council of the regional government of Andalusia, in Spain.
State: Don't swim in Lake Hopatcong or even touch the water - — New Jersey environmental officials say people shouldn't swim in New Jersey's largest lake or even touch the water because aerial surveillance confirms the presence of an extensive harmful algal bloom.The warning issued Thursday also urged people to not eat fish caught in northern New Jersey's Lake Hopatcong or windsurf, kayak, paddleboard or ride Jet Skis there. Pet owners should also keep their animals clear of the lake.Officials said the advisory could remain in place "for weeks, if not longer." They note several people have already gotten mild skin rashes from touching the water.The Department of Environmental Protection says the bloom stems from cyanobacteria, which are usually a bright green. Though, they can also look like "pea soup," on the water's surface.Exposure can cause a range of health effects, including rashes, allergy-like reactions, flu-like symptoms, gastroenteritis, respiratory irritation, skin rashes and eye irritation.People along the lake began reporting blooms on June 17. Since then the department says it's received 30 more reports of blooms in the 4-square-mile lake which straddles the border of Sussex and Morris counties.It is a popular vacation and tourist destination, with the July 4 holiday coming up.
BP invests in turning natural gas into fish food - BP said it's investing in a Silicon Valley startup that aims to help feed the world by turning natural gas into food for fish farms and livestock. The British oil and gas major is putting $30 million into Calysta, which aims to meet the growing demand for feed in the aquaculture and agriculture markets - such as farmed fish, crustaceans and livestock - in more environmentally sustainable ways. "By pairing Calysta's exciting technology and entrepreneurial drive with BP's global scale and gas market expertise, this partnership offers the opportunity to improve food security and sustainability for the world's growing population," said Dominic Emery, BP's group head of strategy. Calysta specifically makes the "FeedKind" protein pellets. The company uses a naturally occurring bacteria that it grows in a proprietary fermentation process in which it feeds off of methane - the primary component of natural gas - as its carbon and energy source. The end result is animal food in the form of protein. The company contends that one commercial-scale plant - if used to replace soy products for fish feed - would free up enough land to feed as many as 250,000 people.
Giant Goldfish Shows Why You Should Never Flush Fish Down the Toilet - The 2003 Pixar film Finding Nemo popularized the misconception that all drains lead to the ocean, encouraging young fans to flush their pet fish down the toilet in an ill-advised bid for freedom. As experts were quick to point out following the movie’s release, flushed fish typically die long before they reach the ocean, going into shock upon immersion in the toilet’s cold water, succumbing to the noxious chemicals found in the sewage system, or—if they make it this far—finding themselves eliminated at a water treatment plant. But what happens to the few pet fish that survive this harrowing journey, as well as those released directly into the nation’s waterways? A photograph recently posted on Facebook by nonprofit Buffalo Niagara Waterkeeper (BNW) reveals one potential outcome: A 14-inch goldfish caught downstream of a wastewater treatment plant in the Black Rock Canal of New York’s Niagara River. The fish in question was either flushed down the toilet or set free in the river by its owner. Regardless of how it arrived, the former pet thrived in its new habitat, growing to an enormous size and, to the detriment of the area’s native species, operating unchecked by predators. “Without a natural predator, they’re winning all the competition for food and resources,” Jennifer Fee, BNW’s marketing director, tells the Huffington Post’s Jamie Feldman. “They’re winning, they’re lasting longer and they’re continuing to live and grow. BNW’s Facebook post further notes that tens of millions of goldfish now live in the Great Lakes, posing what the nonprofit describes as “a constant threat to the health of native wildlife populations and their habitats,” according to Atlas Obscura. Per The New York Times’ Steph Yin, goldfish—domesticated carp originally bred in ancient China but introduced into the United States during the mid-1800s—are an “ecological nightmare.” In addition to disturbing sediment and vegetation found at the bottom of lakes and rivers, the invasive fish release nutrients capable of triggering excess algal growth; transmit exotic diseases and parasites; feast on a diverse diet of fish eggs, small invertebrates and algae; and reproduce at higher rates than most freshwater fish. To make matters even worse, David Anderson and Shira Polan write for Business Insider, goldfish are known to migrate across multiple bodies of water. Currently, the species runs rampant in such far-flung locales as London’s Epping Forest, the Canadian province of Alberta, Nevada’s Lake Tahoe Basin and Australia’s Vasse River.
Shocking Before & After Photos Reveal Awful Truth About Widespread US Crop Failures In 2019 - Torrential rains have been hammering the heartland of America for months, and at this point vast stretches of farmland in the middle of the country are nothing but mud. As a result of the endless rain and unprecedented flooding that we have witnessed, millions of acres of farmland will have nothing planted on them at all in 2019, and that is a major national crisis. But most farmers were able to get seeds planted in the deplorable conditions, and now they are desperately hoping that something will actually grow. Unfortunately, on farm after farm what is coming out of the ground looks absolutely terrible. Even if we get ideal weather conditions for the rest of the summer, there is no way that many of these fields will be ready before the first hard frost arrives. As you will see below, the truth is that we are potentially facing the most widespread crop failures in all of U.S. history. Let me share a before and after photo that a farming couple in Indiana named Kyle and Tori Kline recently shared on Facebook... According to Tori, the corn was almost above Kyle’s head at this time last year, but today it is barely out of the ground. And of course the Klines are far from alone. All over the nation, farmers are facing either dramatically reduced yields or no harvest at all. Let me share four more extremely disturbing before and after photos that were recently posted to Facebook by TD Hale…Corn is not supposed to grow in mud, but due to the horrific weather conditions many farmers in the middle of the country had absolutely no choice in the matter. If you do not live in the middle of the country, you may have a difficult time grasping the true scope of what we are potentially facing. If farmers do not grow our food, we do not eat. This is not a drill, and widespread crop failures are going to have dramatic implications for all of us in the months ahead. According to John Newton, the chief economist at the American Farm Bureau Federation, we have never faced “anything like this since I’ve been working in agriculture”. We are truly in unprecedented territory already, and it won’t take very much at all to turn 2019 into a complete and utter national catastrophe.
Algae Blooms Fed by Farm Flooding Add to Midwest's Climate Woes -- The historic rains that flooded millions of acres of Midwestern cropland this spring landed a blow to an already struggling farm economy. They also delivered bad news for the climate. Scientists project that all that water has flushed vast amounts of fertilizer and manure into waterways, triggering a potentially unprecedented season of algae blooms. The National Oceanic and Atmospheric Administration has predicted that the "dead zone" in the Gulf of Mexico—a massive overgrowth of algae—could become the size of Massachusetts this summer, coming close to a record set in 2017, and that an algae bloom in Lake Erie could also reach a record size. "Every place in the Midwest is wet," said John Downing, an aquatic ecologist and director of the Minnesota Sea Grant. "There will be a terrific amount of algae blooms." As rain washes nutrients—mostly fertilizers and manure—into streams, rivers and lakes, those nutrients stoke the growth of algae, a process known as eutrophication that depletes oxygen in the water. That algae can choke the waterways, killing aquatic life and making water unsafe to swim in or drink. These algae-filled waterways also emit methane, a powerful climate pollutant. Atmospheric methane has shot up over the past 12 years, threatening global emissions-reduction goals. Downing and his colleagues have determined that algae blooms could accelerate methane emissions even more."We not only lose good water," he said, "we also exacerbate climate change." In a paper published earlier this year, Downing and his colleagues projected that, as the global population grows and more nutrients enter waterways over the next century, eutrophication could increase methane emissions from inland waters by 30 to 90 percent. "We've projected out, based on population growth and food production, how much we can expect eutrophication to impact the climate," Downing said. "The rates are huge." Predictions for increasingly heavy rains in the Midwest in coming decades, along with increased heat, could further drive algae blooms.
Flood damage at least $2 billion for Mississippi River towns - — Repairs and cleanup following the prolonged flooding along the Mississippi River will cost more than $2 billion, an advocacy group for river communities said Tuesday. Heavier than normal snow melt in the late winter and frequent and heavy rains through the spring led to flooding that approached record levels in several towns from Iowa to Louisiana. Equally troubling has been how long the high water has stuck around. Even now, the river remains well above flood stage throughout much of the Mississippi River corridor. Colin Wellenkamp, executive director of the Mississippi River Cities and Towns Initiative, said the damage along the Mississippi River was estimated at nearly $2 billion by the end of March, even before several additional rounds of major flooding. He expects the number to rise but said it’s too early for a more accurate estimate. The Mississippi has been above flood stage at some southern towns for more than 200 days. Mayors who spoke during a conference call with the media Tuesday said the length of the flood has created unusual trouble. Some places are dealing with sinkholes due to water soaking the ground, or seepage through saturated levees. In Greenville, Mississippi, Mayor Errick Simmons said sewer pump failures have been particularly damaging in the town’s poorest areas. “Some folks can’t flush their commodes,” Simmons said. He expects the flood fight to last several more months. One of the hardest-hit towns was Davenport, Iowa, where raging water surged into downtown after a barrier failed on April 30, swamping several buildings and washing away vehicles. Davenport Mayor Frank Klipsch said that by the time the barrier gave way, it had already been holding back floodwater for up to 80 days. “The unprecedented length of the flood, coupled with the depth, has definitely had a serious impact,” Klipsch said. The flood was the second-worst on record in the neighboring Illinois towns of Grafton and Alton, north of St. Louis. Grafton Mayor Rick Eberlin said the popular shops on the tourist town’s Main Street have been closed for weeks and aren’t expected to reopen until mid-July. The flood has damaged around 30 levees along the Mississippi River, said Jared Gartman of the U.S. Army Corps of Engineers office in Vicksburg, Mississippi. Gartman said the cost of the damage has not yet been determined.
U.S. Meteorologists 'Deeply Concerned' Over 5G Roll-Out U.S. weather forecasters are the latest group to sound the alarm that the race to introduce 5G technologies may have adverse consequences. In a letter to the Federal Communications Commission (FCC), U.S. meteorologists called the potential for 5G mobile technologies to disrupt communication between weather satellites "deeply concerning," according to the BBC. The letter was signed by the American Meteorological Society, the National Weather Association and the American Geophysical Union. They oppose a FCC proposal to share a radio spectrum band with mobile companies, arguing that sharing the radio band may lead to a delay in life-saving data, according toNewsweek."[Interference will] postpone dissemination of vital information to the public to aid and protect life, property, businesses, and government operations. The loss of seconds can mean the difference between safety and grave risk to life and property," said John Porter, an executive at AccuWeather, in a separate letter to the FCC, as Newsweek reported. Experts warned that sharing the 1675-1680MHz band could cause delays in public service alerts about severe weather like hurricanes and tornadoes. The letter by the U.S. meteorologists piggy backs on a letter sent to the FCC Chairman by Sen. Ron Wyden (D-Ore) and Maria Cantwell (D-Wash.) asking him not to issue 5G licenses "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."
'Hell is coming': week-long heatwave begins across Europe -- Authorities have urged children and older people to stay indoors and issued severe warnings against dehydration and heatstroke as an unprecedented week-long heatwave begins its advance across continental Europe.Meteorologists said temperatures would reach or even exceed 40C from Spain to Switzerland as hot air was sucked up from the Sahara by the combination of a storm stalling over the Atlantic and high pressure over central Europe. High humidity meant it would feel like 47C, experts warned. “El infierno [hell] is coming,” tweeted the TV meteorologist Silvia Laplana in Spain, where the AEMET weather service forecast temperatures of 42C by Thursday in the Ebro, Tagus, Guadiana and Guadalquivir valleys and warned of an “extreme risk” of forest fires.In France, officials in Paris set up “cool rooms” in municipal buildings, opened pools for late-night swimming and installed extra drinking fountains as temperatures in the capital reached 34C on Monday and were forecast to climb further later in the week.Emmanuel Demaël of Météo-France said the heatwave was unprecedented “because it’s hitting so early in June – we haven’t seen this since 1947.” Record monthly and all-time highs were likely to be set in several parts of the country, Demaël predicted, and night-time temperatures were unlikely to fall below 20C. School exams were postponed until next week, charities distributed water to homeless people and sales of fans quadrupled. France’s deadliest recent heatwave was in August 2003, when almost 15,000 mainly elderly people died as hospitals were overwhelmed.
Intense Heat Wave Hits Northern Europe -- A searing heat wave has begun to spread across Europe, with Germany, France and Belgium experiencing extreme temperatures that are set to continue in the coming days. In Germany, temperatures are expected to exceed 40 degrees Celsius (104 degrees Fahrenheit) on Wednesday, topping the country's previous June record of 38.2 degrees Celsius, set in Frankfurt in 1947. Temperatures in Bonn on Tuesday afternoon reached 35 degrees Celsius. Climate researcher Andreas Marx has said that the lack of rain in much of the country, particularly in the north and east, the site of much of Germany's agriculture, could have disastrous consequences.Forest fires are of particular concern for authorities in Germany, especially in the northeast. Local residents were asked to keep windows and doors closed in Lieberoser Heide — southeast of Berlin — while emergency services deal with a fire that broke out on Monday and spread to an area of about 10 hectares (25 acres), the size of 140 soccer pitches. It is expected to take a few days to put out.Meanwhile, French national weather agency Meteo-France predicted that the hot weather could produce temperatures of up to 40 degrees Celsius, while German agencies suggested the heat may break records."It's unprecedented because it's hitting so early, in June. We haven't seen this since 1947," said Emmanuel Demael from the French meteorological agency on Monday.French President Emmanuel Macron has urged people to be extra vigilant in the coming days."As you know, at times like these, sick people, pregnant women, infants and elderly people are the most vulnerable. So we must be vigilant with them and have prevention measures in place in order to intervene as quickly as possible," he said.
Extreme heat continues to scorch Europe; France braces for possible all-time record high Friday -- High heat again blazed across Europe Thursday as several countries braced for what could be the hottest day yet on Friday.The heat in France will be particularly brutal, forecasters said, as the nation's weather service Meteo France issued its highest-level danger alert.Blistering temperatures of 107 to 113 degrees were forecast in southern France on Friday, potentially breaking the country's all-time record high of 111.4 degrees, set in August 2003. “A heat wave of this amplitude so early in the year, in June, is exceptional,” Meteo France meteorologist France Christelle Robert said. “We should expect more intense and frequent heat waves with climate change, because it will accentuate the extremes.”The Weather Channel said that La Rochelle, a town in western France, soared to its all-time high of 104.4 degrees Thursday afternoon, according to Etienne Kapikian, a weather forecaster at Météo-France. Germany recorded its hottest June temperature on record Wednesday, with a high of 101.5 degrees Fahrenheit in Coschen, near the Polish border about 65 miles southeast of Berlin, according to German meteorological service DWD.
France sets all-time high as Europe heat wave expands, threatens more lives - The extreme heat wave that is suspected of killing several people this past week set an all-time high in France on Friday. Relief is on the horizon but not before the heat strengthens its grip across Europe this weekend. The highest temperature ever measured across France in the entirety of record keeping was set on Friday afternoon. Temperatures soared to 45.9 C (114.6 F) at Gallargues-le-Montueux in southeastern France, exceeding the nation's previous all-time record high of 44.1 C (111.4 F) at Conqueyrac on 12 August 2003. Amid the unrelenting grip of dangerous heat, France's national weather service issued the first ever "red" hazardous weather warning for southeastern portions of the country on Friday. A “red” warning is the highest level out of a four-level alert system put into effect after the deadly 2003 heat wave that claimed 15,000 lives, according to the Associated Press.In neighboring Spain, officials suspect heatstroke caused a 17 year old in Córdoba and a 80-year-old man in Vallodolid to die in recent days.Officials are also investigating whether the heat took a deadly turn in Italy, after the body of a 72-year-old homeless man was found near a train station in Milan on Thursday morning, according to BBC News. Temperatures have been soaring past 33 C (into the 90s F) daily since Monday. believe was started when a pile of chicken manure self-combusted, similar to the threat that wet hay bales pose. A total of 21 firefighters required medical assistance when battling the blaze on Friday night, according to the Associated Press.
Spain Battles Largest Wildfire in 20 Years as Europe Sizzles in Deadly Heat Wave -- More than 500 firefighters and soldiers are battling Spain's largest wildfire in two decades as Europe under an extreme heat wave, The Guardian reported Thursday. The fire has burned 12,355 acres in the Catalan province of Tarragona, killed hundreds of sheep and forced 53 people to evacuate their homes. "We're facing a serious fire on a scale not seen for 20 years," Catalan interior minister Miquel Buch said in a tweet reported by The Guardian. "It could burn through 20,000 hectares. Let's be very aware that any carelessness could lead to a catastrophe." The fire ignited Wednesday, and authorities believe it started when chicken manure poorly stored on a farm spontaneously combusted in response to the high heat, USA Today reported. The paper explained the phenomenon: Spontaneous combustion can occur when materials self-heat, reaching a high enough temperature for ignition to occur, according to the National Park Service. In the case of manure, microbes inside the dung can release heat until "it erupts into fire," according to Wired magazine. Catalan Fire Department Chief David Borrell said the region's hilly geography made fighting the blaze more difficult. "The problem is not so much the resources available but rather the difficulty of the terrain and the weather conditions," he said in an interview reported by USA Today. Temperatures are expected to top 44 degrees Celsius in northern Spain and southern France, The Guardian reported. In the southern French départements of Hérault, Gard, Vaucluse and Bouches-du-Rhône officials have raised the heat alert to red, the first time since the system was put in place following a 2003 heat wave that killed 15,000. So far, the extreme heat has claimed at least three victims. Three elderly French people died after suffering heart attacks while swimming, Grist reported. A 72-year-old homeless Romanian man who was found dead near a train station in Milan Thursday may also have succumbed to the heat, BBC News reported.
Severe water shortage afflicts Chennai, India’s fourth-largest metro area - A severe water crisis is afflicting Chennai, the capital of the southern Indian state of Tamil Nadu and India’s fourth most populous metropolitan area. Residents have been forced to join overnight queues to access small amounts of water. Those hardest hit are the working class and other poor families. While the authorities simply blame the failure of the monsoon, true responsibility for the water scarcity confronting the more than 13 million people residing in metropolitan Chennai lies with the big business political establishment. Successive central and state governments have been criminally indifferent to the basic needs of working people. The Indian elite boasts about the “surgical strikes” carried out by its military inside Pakistan and it is spending billions of dollars on building up India’s nuclear arsenal and purchasing other sophisticated armaments. It is also spending billions to build the infrastructure demanded by foreign and local investors. Yet India’s capitalist ruling elite remains unwilling and incapable of investing in and managing India’s water resources so as to provide the most basic need of the people—drinking water. Protests have occurred in several parts of Chennai, as well as cities and villages across Tamil Nadu over the water crisis, which has been compounded by the severe heat wave currently affecting much of India. Temperatures have reached 42 degrees Celsius in Chennai. There have been repeated incidents of people desperate for water stopping state transport buses to demand water, and several clashes have taken place when police tried to break up roadblocks established by protesters. Last Wednesday, at least 550 people were arrested after participating in a demonstration outside the municipal corporation headquarters of Coimbatore, Tamil Nadu’s second largest city. The protesters, who held up empty water containers, accused officials of mismanagement and negligence. The routine daily activities of Chennai residents have been severely impacted by the water crisis. With the Chennai City Corporation having virtually stopped supplying water, families are forced to stand in long queues, which start forming at midnight, to fill up containers with the water they need for drinking, cooking, bathing, and washing. Those worst impacted are the working class and poor, as better off residents either have private wells or can purchase bottled water. The four local lakes that supply water to Chennai—Red Hills Lake, Sholavaram Lake, Chembarambakkam Lake and Poondi reservoir—have become virtual drylands.
No drips, no drops: a city of 10 million is running out of water - In India's sixth-largest city, lines for water snake around city blocks, restaurants are turning away customers and a man was killed in a brawl over water. Chennai, with a population of almost 10 million, is nearly out of water. In much of India, municipal water, drawn from reservoirs or groundwater, typically runs for only a couple of hours each day. That's the norm year-round. The affluent fill tanks on their roofs; the poor fill jerrycans and buckets. But in Chennai this summer, the water is barely flowing at all. The government has dispatched water tankers to residential areas to fill the void. Still, some people in especially hard-hit areas have vacated their homes and moved in with relatives or friends. Satellite images of the city's largest reservoir, Puzhal Lake, taken one year apart, reveal a chilling picture. Since June 2018, the lake has shrunk significantly. Puzhal is one of the four rain-fed reservoirs that supply water to most parts of Chennai. Another picture shows the parched bed of Chembarambakkam Lake, another major reservoir. Its cracked surface is covered with dead fish. "It's shocking but not surprising," says Tarun Gopalakrishnan, a climate change expert at the New Delhi-based Centre for Science and Environment. He says the crisis in Chennai is the result of "a toxic mix of bad governance and climate change." That, coupled with a delayed arrival of the seasonal monsoon, which usually comes in June, has all but dried up the city's water supply. Government data show that the storage level in the four lakes combined is less than one-hundredth of what it was at this time last year. A severe heat wave gripping most of India, including Chennai, has aggravated conditions. What's happening in Chennai could easily happen anywhere across India, Gopalakrishnan says. A 2018 government think tank report projected that 21 major Indian cities, including the capital, New Delhi, and India's IT hub, Bengaluru, will "run out of groundwater as soon as 2020." Approximately 100 million people would be affected, the report predicts. In Chennai, residents are scrambling to conserve water. Public institutions are suffering. Hospitals and nursing homes are charging more for services to cover the increased cost of water, according to the local press. There are also reports that toilets at schools are dirty due to a lack of water.
Early Monsoon Underwhelms, Rainfall Deficit at 37%, Sowing Down 14% The south west monsoon of 2019 has underwhelmed in its early days with a national level rainfall deficit of 37% as on June 24, according to data provided by the Indian Meteorological Department (IMD). The monsoon has been delayed this season by a week. It usually makes landfall in Kerala around June 1. This year, it made its first appearance on June 8. The sluggish progress of the monsoon has meant that 30 of the 36 subdivisions in the country are categorised as ‘deficient’ or ‘large deficient’ by the IMD. These sub-divisions account for 82% of the country’s land area. The rainfall deficiency is coming at a time when 46% of the country is already suffering from drought. Large parts of the country have seen a prolonged heatwave. India recorded the lowest pre-monsoon rain in 65 years, and the previous monsoon recorded a deficit of 9% with a sizeable chunk faring much worse. Consequently, water storage in reservoirs is now at a significantly depleted level. Of the 91 reservoirs for which the Central Water Commission releases data, 11 have run dry as on June 20. Another 24 are at storage levels below 50% of normal, while 23 reservoirs recorded storage levels between 51% and 80%. Only 32 reservoirs reported more than 80% of normal storage, and not a single reservoir reported 100% of normal storage..
For Chennai, ‘Unless It Rains, Things Are Not Going to Be Normal’ - The city is in panic mode. In the face of an acute water crisis, schools have been shut, hotels have refused catering and IT companies have asked their employees to work from home. The normal lives of ordinary citizens have been hit. The sight of a cluster of colourful plastic pots lined up around any water tank on any street in Chennai is proof. “It has been weeks since I had a decent night’s sleep,” says S. Jothi, a homemaker in Saidapet, an area in the city’s centre. “We never know when water will come and that we had to be prepared for it.” Matters are worse in suburban localities. For example, at the BBR Nagar welfare association in Chromepet, which has about 150 houses, over 30 days have passed since there has been water. “I am a pensioner and am spending Rs 5,000 on water every week,” says M.C. Balaraman, an office-bearer with the association. He is 80 years old and says he hasn’t been witness to a “worse drought” in his lifetime. “We have lost all hope of seeing water in the near future – unless there is a miracle.”
Desalination plants are here, but they’re not solving the water crisis yet - Some 30 miles north of San Diego, along the Pacific Coast, sits the Claude “Bud” Lewis Carlsbad Desalination Plant, the largest effort to turn saltwater into freshwater in North America.Each day 100 million gallons of seawater are pushed through semi-permeable membranes to create 50 million gallons of water that is piped to municipal users.Carlsbad, which became fully operational in 2015, creates about 10 percent of the fresh water the 3.1 million people in the region use, at about twice the cost of the other main source of water.Expensive, yes, but vital for the fact that it is local and reliable. “Drought is a recurring condition here in California,” said Jeremy Crutchfield, water resources manager at the San Diego County Water Authority. “We just came out of a five-year drought in 2017. The plant has reduced our reliance on imported supplies, which is challenging at times here in California. So it’s a component for reliability.”A second plant, similar to Carlsbad, is being built in Huntington, California, with the same 50-million-gallon-a-day capability. Currently there are 11 desalination plants in California, and 10 more are proposed. The cost of desalinated water has been coming down as the technology evolves and the cost of other sources increases.
Scientists map huge undersea fresh-water aquifer off US Northeast - In a new survey of the sub-seafloor off the U.S. Northeast coast, scientists have made a surprising discovery: a gigantic aquifer of relatively fresh water trapped in porous sediments lying below the salty ocean. It appears to be the largest such formation yet found in the world. The aquifer stretches from the shore at least from Massachusetts to New Jersey, extending more or less continuously out about 50 miles to the edge of the continental shelf. If found on the surface, it would create a lake covering some 15,000 square miles. The study suggests that such aquifers probably lie off many other coasts worldwide, and could provide desperately needed water for arid areas that are now in danger of running out.
Deforestation and climate change could split the Amazon rainforest in two, study finds - A new study out Monday shows that climate change plus deforestation equals disaster for the Amazon: The average number of tree species present in a given patch of rainforest could decline by up to 58 percent by 2050. What’s more, all the human-induced destruction may wind up effectively dividing the Amazon into two separate forests, one of which would be “severely fragmented.” Published in Nature Climate Change, the study reminds us how fragile the world’s largest rainforest is. Since 1970, it’s lost nearly 20 percent of its tree cover, according to Mongabay. Just last month, the Brazilian Amazon saw a spike in deforestation rates. And while deforestation alone is obviously destructive, climate change is making matters worse by warming and drying the rainforest, making parts of it unsuitable for the species that call it home. “The impacts of deforestation are local. We can see clearly the area we are impacting,” said author Vitor Gomes, an environmental scientist at the Federal University of Pará in Brazil, to Earther. “Climate change may impact the whole area. Climate will be changing all over the forest area.” Article preview thumbnail The Amazon Rainforest Is Adapting to Climate Change, But Not Fast Enough A 30-year analysis of Amazonian trees finds the world’s largest rainforest is already adapting to… Read more The authors from Brazil and the Netherlands modeled how roughly 5,000 Amazon tree species—about a quarter of the total species in the rainforest but the only ones with enough data to study—would react to a range of climate change scenarios ranked from better to worse, along with a couple of deforestation scenarios based on historical rates. In a worst-case climate where we continue with business as usual carbon emissions and deforestation, nearly half of Amazon tree species could become threatened by 2050 under the International Union for Conservation of Nature, according to the study.
As Democrats prep for debate in Florida, a 17,000-acre fire burns in the Everglades - As all eyes turn to Miami, another fiery event is developing nearby. Seventeen thousand acres and counting of public lands are aflame in the Florida Everglades, thanks to a brush fire sparked by an errant lightning bolt on Sunday night. Smoke from the fire has floated over the cities of Coral Springs and Parkland, prompting officials to send out advisories warning residents to stay inside. According to the region’s Local 10 news, no firefighting crews have been called to combat the flames as of Monday afternoon; officials said they’re monitoring how the fire moves over the next eight to 10 hours. So far, none of the blaze has been contained. Rain is not in the forecast until Wednesday. Florida isn’t the only state in the U.S. dealing with the fiery fallout of mismanaged forests and rising temperatures. Last week, Seattle Mayor Jenny Durkan announced plans to outfit five community buildings in her city to help residents deal with the impending smoke season. And California is facing an increased risk of wildfires this summer thanks to a wet winter that helped spawn new brush (aka kindling, once hot weather dries the brush out). The average wildfire season is 78 days longer than it was in 1970, a side effect of climate change that should surely be a topic of conversation at the Democratic debates. Alas, the Democratic National Convention announced this month that it will not be hosting a climate-themed debate — a request made by various climate activist groups and presidential hopeful Jay Inslee. Maybe the smoke from the fire in the Everglades will convince the committee to change its mind.
How a bird started a fire at a California solar farm Los Angeles Times - A June 5 fire at a California solar farm that scorched 1,127 acres started when a bird flew into a pair of wires, creating an electric circuit and a shower of sparks, a California Department of Forestry and Fire Protection official said. It didn’t end well for the power plant — or the bird. “One wing touches each of the conductors, and they turn into a light bulb,” said Zach Nichols, a Cal Fire battalion chief. “Happens all the time.” The company that owns the California Valley Solar Ranch solar farm, Clearway Energy Inc., had blamed the fire on an “avian incident” without saying what exactly happened at the remote facility in the arid grasslands between Los Angeles and San Francisco. The blaze damaged power poles and wires at the 250-megawatt plant and knocked out 84% of its generating capacity, causing an estimated $8 million to $9 million in losses, the company said.The California Valley project was built by SunPower Corp. and was funded in part with a $1.24-billion loan guarantee from the U.S. Energy Department. It was completed in 2013 and sells power to PG&E Corp Pacific Gas & Electric. California is home to a different solar plant that’s notorious for burning birds. But that facility — the Ivanpah Solar Electric Generating System in the Mojave Desert — uses another technology altogether. At Ivanpah, fields of mirrors concentrate sunlight onto centralized towers, posing a hazard to birds flying into the beams. The California Valley fire, in contrast, occurred at a solar farm that uses photovoltaic panels, just like the ones on rooftops.
Harvard chemist: Permafrost N2O levels 12 times higher than expected – Harvard Gazette - About a quarter of the Northern Hemisphere is covered in permafrost. Now, it turns out these permanently frozen beds of soil, rock, and sediment are actually not so permanent: They’re thawing at an increasing rate.Human-induced climate change is warming these lands, melting the ice and loosening the soil, and that can cause severe damage. Forests are falling; roads are collapsing; and, in an ironic twist, the warmer soil is releasing even more greenhouse gases, which could further exacerbate the effects of climate change.Shortly after scientists first noticed signs of thaw in the early 1970s, they rushed to monitor emissions of the two most influential greenhouse gases — carbon dioxide and methane. But until recently, the threat of the third-most-prevalent gas, nitrous oxide (N2O) — known in dentistry as laughing gas — has largely been ignored.In a 2010 paper, the Environmental Protection Agency (EPA) rated permafrost nitrous oxide emissions as “negligible,” and few studies counter this claim. But a paper published this month in the journal Atmospheric Chemistry and Physics shows that nitrous oxide emissions from thawing Alaskan permafrost are about 12 times higher than previously assumed. Since N2O traps heat nearly300 times more efficiently than carbon dioxide does, this revelation could mean that the Arctic — and the global climate — are in more danger than we thought. “Much smaller increases in nitrous oxide would entail the same kind of climate change that a large plume of CO2would cause,” said Wilkerson, the paper’s first author and a Ph.D. student at the Graduate School of Arts and Sciences at Harvard.
US military is a bigger polluter than as many as 140 countries – shrinking this war machine is a must - The US military’s carbon bootprint is enormous. Like corporate supply chains, it relies upon an extensive global network of container ships, trucks and cargo planes to supply its operations with everything from bombs to humanitarian aid and hydrocarbon fuels. Our new study calculated the contribution of this vast infrastructure to climate change. Greenhouse gas emission accounting usually focuses on how much energy and fuel civilians use. But recent work, including our own, shows that the US military is one of the largest polluters in history, consuming more liquid fuels and emitting more climate-changing gases than most medium-sized countries. If the US military were a country, its fuel usage alone would make it the 47th largest emitter of greenhouse gases in the world, sitting between Peru and Portugal.In 2017, the US military bought about 269,230 barrels of oil a day and emitted more than 25,000 kilotonnes of carbon dioxide by burning those fuels. The US Air Force purchased US$4.9 billion worth of fuel, and the navy US$2.8 billion, followed by the army at US$947m and the Marines at US$36m. It’s no coincidence that US military emissions tend to be overlooked in climate change studies. It’s very difficult to get consistent data from the Pentagon and across US government departments. In fact, the United States insisted on an exemption for reporting military emissions in the 1997 Kyoto Protocol. This loophole was closed by the Paris Accord, but with the Trump administration due to withdraw from the accord in 2020, this gap will will return.
Fridays for Future: Tens of thousands demonstrate on climate change in Aachen, Germany - The first international mass demonstration organized by Fridays for Future, the student environmental activist group, brought together young people from 15 countries in Aachen, Germany on June 21. The protest in Germany’s westernmost city, near the borders with Belgium and the Netherlands, was held under the slogan, “Climate Justice Without Borders—United for a Future.” Some 40,000 students demanded a rapid shutdown of coal-fired power plants and other measures.While all honest scientists agree that climate change is already dangerously advanced, government officials and inter-state bodies are refusing to take the necessary measures to protect the environment, instead focusing on a massive military build-up. On the eve of the demonstration, the European Union (EU) heads of state and government meeting in Brussels could not even agree to make binding the climate goal of achieving CO2 neutrality—achieving net zero carbon dioxide emissions—by 2050.In protest, youth from Germany, the Netherlands, Belgium, France, Italy, Spain, the UK, Switzerland, Luxembourg and other countries marched through Aachen. Several “tails” of a star march led through the city to the Tivoli football stadium, where the central rally took place and where several bands and artists performed. The various and creative posters and banners included: “There is no Planet B,” “The Dinos also thought they had time,” “Your greed costs our future,” “Climate 2050 affects us all,” “Burn Capitalism not Coal,” etc. Older people also participated. Scientists, artists, teachers and workers from all over the Ruhr area and Aachen residents marched along with the youth, and a group of seniors carried a banner saying, “Grannies for Future: We are here and outraged because our grandchildren are not being heard!” A former steel worker, who had recently worked in the chemical industry, toldSpiegel Online, “Everyone has to earn their money, but everyone also needs to breathe and needs clean air and healthy food, so I’m marching here too.”
70 Arrested at Extinction Rebellion Protest Demanding More Urgent Climate Coverage From New York Times -- Seventy Extinction Rebellion protesters were arrested outside The New York Times building Saturday as they demanded the paper improve its coverage of the climate crisis, Reuters reported. Protesters briefly blocked traffic on Manhattan's Eighth Avenue, between the Times building and the busy Port Authority Bus Terminal, The Guardian reported. Demonstrators staged a die-in on the street outside the paper's headquarters. They also attached banners to the two buildings. The one affixed to Port Authority read "Climate Emergency," and the banner suspended from the Times building read "climate change = mass murder," with "change" crossed out and replaced with "emergency," Reuters reported."The lack of coverage of the climate crisis is completely unacceptable," member of Extinction Rebellion's press and fundraising teams Becca Trabin told The Guardian. "It's a public safety crisis on a global scale." In total, 67 activists were taken into custody by the New York Police Department and three by Port Authority police, a spokesperson told Reuters.In one incident, police arrested journalist Michael Nigro while he was photographing the protest from the third floor of the Port Authority building. A live-stream of his arrest was posted on YouTube by News2Share.
Young protesters at DNC headquarters demand debate on climate crisis -- Dozens of young climate protesters crowded outside the Democratic National Committee headquarters in Washington DC on Tuesday, demanding a debate focused on the crisis as presidential candidates prepare to face off this week over two nights in Florida. The DNC has declined to hold a climate-specific debate, even as Democratic voters rank rising temperatures – and the worse disasters and economic instability they bring – as a top priority. The DNC chair, Tom Perez, has warned that any candidate who participates in a climate debate will not be invited to others. Environment-minded voters worry the more general debates, like those in Miami this week, will give short shrift to climate. “I know that the crisis I see in my community is bigger than the few sentences they’re going to spend on it over the next few nights,” shouted Abigail Leedy, an 18-year-old from Philadelphia protesting with the Sunrise Movement, from the steps of the DNC office. An eight-year-old from Washington DC, Havana Chapman-Edwards, read a prepared statement. “I am old enough to know when the adults are talking about how they care about my future but actually not taking action or passing any laws to fight against climate change,” Chapman-Edwards said. Behind her, young people held signs reading “CLIMATE DEBATE,” and “11 YEARS,” the amount of time scientists say the world has to limit climate change catastrophe.
Oregon legislature shut down by right-wing militia threats- On Saturday, the Oregon State Capitol building was shut down after armed right-wing militias made violent threats against Democratic legislators and building staff. State police recommended the building be shut down and monitored developments on Saturday. Captain Tim Fox said, “the safety of legislators, staff and citizen visitors could be compromised if certain threatened behaviors were realized.” Though precise details have yet to be released about the nature of the threats, the threats were prompted by a conflict between Senate Republicans and Democrats over a bill (HB 2020) that ostensibly aims to address climate change by imposing market-based caps on fuel use and pollution, cutting emissions 80 percent by 2050 from 1990 levels. The fascistic militias also planned protests over the weekend. Small demonstrations did take place Saturday and Sunday at the Capitol, though these featured only limited numbers of militia clad in their military-style attire. The demonstrations were supported by the Oregon Republican Party and were also attended by some rural workers and farmers who oppose the bill’s imposition of regressive taxes and fines. The bill has been predominantly opposed by manufacturing, timber and agricultural business groups who oppose government regulation of their right to profit at the expense of environmental sustainability. Democrats have agreed to a number of major concessions to big business, including by allowing the richest companies to buy the right to pollute under the legislation. Oregon has been dominated by the Democratic Party since the 1980s, with Democrats occupying the majority of all levels of state government. There are only 11 Republicans out of 30 state senators, representing mostly the rural areas in the eastern and central parts of the state. When Republican senators fled the capital city of Salem on Thursday in order to prevent a vote on HB 2020, Governor Kate Brown called upon the state police to pursue them and return them to the Capitol. The Republicans took refuge across the border in Idaho, although one state senator issued the first threat of violence last Wednesday. Indicating his readiness to use violence against the state police, Republican Brian Boquist warned, “Send bachelors and come heavily armed … I’m not going to be a political prisoner in the state of Oregon. It’s just that simple.”
The Insanity in Oregon Is a Glimpse of Our Very Dark Future - If you're not following the ongoing insanity in Oregon, you are missing a look into a very dark future. It begins with a not-at-all-unusual squabble between the Republicans in the Oregon legislature and the Democratic Governor, Kate Brown. At issue is a huge bill aimed at dealing with the climate crisis. On Thursday, every Republican member of the Oregon state senate took a powder, denying Brown and the Democrats a quorum and effectively killing the bill. Now this is not an unusual tactic. Not long ago, Democratic lawmakers in Texas and in Wisconsin blew town for the same purpose—to throw sand in the gears of a legislative act of which they did not approve and could not stop by conventional means. What makes Oregon different is what the fugitive Republican senators did.The Republican senators—with the full support of the Oregon Republican Party—made common cause with armed domestic terror groups. (Calling them a militia is a misnomer, regardless of what they may think of themselves.) When a Republican state senator named Brian Boquist heard that Brown was sending the Oregon state police after them, he told a local television station:Send bachelors and come heavily armed. I’m not going to be a political prisoner in the state of Oregon. It’s just that simple. Almost immediately, the local domestic terror groups sprang to Boquist's defense. From ThinkProgress: A member of the Oregon 3 Percenters — a militia group whose members have vowed to combat what they perceive as constitutional infringement — said they would act as the senators’ de-facto bodyguards against the state police. “We have vowed to provide security, transportation and refuge for those Senators in need,” they wrote in a Facebook post. “We will stand together with unwavering resolve, doing whatever it takes to keep these Senators safe.”And you could find a way to wave this off as well, except for what happened on Saturday. From the Oregonian/OregonLive: A spokeswoman for the Senate President confirmed late Friday that the "Oregon State Police has recommended that the Capitol be closed tomorrow due to a possible militia threat."
Climate Bill Oregon Republicans Fled to Avoid Is Dead, Senate President Says - --Six days after Republican Oregon Senators fled the state to avoid voting on a bill to address the climate crisis, the Senate president declared the bill dead. "What I'm about to say I say of my own free will. No one has told me to say this," Senate President Peter Courtney said Tuesday, as NPR reported. "HB 2020 does not have the votes on the Senate floor. That will not change." His announcement earned instant condemnation from supporters of the cap-and-trade bill, which would have reduced greenhouse gas emissions by 45 percent of 1990 levels by 2035 and 80 percent of 1990 levels by 2050. Those inside the gallery stood up and turned their backs on Courtney as he spoke, Oregon Public Broadcasting reported. Outside the Senate, protesters began to chant "Hey hey, ho, ho, President Courtney has got to go." Green group Renew Oregon Executive Director Tera Hurst said in a statement that the group had counted enough votes to pass the bill. "This is the biggest failure of public leadership in Oregon in recent memory," Hurst told reporter Claire Withycombe.Democrats needed 16 of 18 members to vote yes in order for the bill to pass, Oregon Live explained. Senator Betsy Johnson had officially opposed it and Senator Arnie Roblan had voiced concerns about its impact on gas prices. Senator Laurie Monnes Anderson, who was pushing for concessions on behalf of Boeing, a major employer in her district, was said by Capitol sources to be the third no vote, though environmental groups said she had told them she would vote yes.Senate Majority Leader Ginny Burdick, who supports the bill, agreed with Courtney's assessment of the vote count."As the person who counts the votes, my personal sense is that the votes were not there," she told Oregon Public Broadcasting. However, if Courtney's announcement is a concession, it is unclear if it will succeed in bringing the Republican Senators back to work. This is partly due to the fact that the bill, which has already had a final reading, is now scheduled for a vote. To avoid this, the Senate could vote to send it to committee or postpone it indefinitely, but both actions would require a quorum, meaning at least two fugitive Republicans would have to return, Oregon Live explained.
‘Climate apartheid’ between rich and poor looms, UN expert warns - A UN expert has warned of a possible "climate apartheid", where the rich pay to escape from hunger, "while the rest of the world is left to suffer". Even if current targets are met, "millions will be impoverished", said Philip Alston, the UN's special rapporteur on extreme poverty. He also criticised steps taken by UN bodies as "patently inadequate". "Ticking boxes will not save humanity or the planet from impending disaster," Mr Alston warned. The Australian native is part of the UN's panel of independent experts, and submitted his report – which is based on existing research – to the UN Human Rights Council on Monday. A key warning was that the world's poor are likely to be hardest hit by rising temperatures - and the potential food shortages and conflict that could accompany such a change. Developing nations are expected to suffer at least 75% of the costs of climate change – despite the fact that the poorer half of the world's population generate just 10% of emissions Those "who have contributed the least to emissions... will be the most harmed," he said, warning that the effects could undo 50 years of progress on poverty reduction.
The budget could take a ‘huge hit’ from climate change - The federal government must invest in resilience and make governmentwide plans to manage climate change risks in order to prevent billions of dollars in future disaster aid costs, according to a report released by the Government Accountability Office June 11. The government has spent $450 billion in disaster aid since 2005, and vulnerability to climate change will further impact federal disaster aid, federal flood and crop insurance programs and federal property and land – posing a huge hit to the federal budget. The problem, however, is that the government does not have important “information needed by policymakers to help understand the budgetary impacts” of climate change necessary for them to anticipate changes and make informed spending decisions, said the report. The government “had no comprehensive strategic approach for identifying, prioritizing, and implementing investments for disaster resilience,” according to the report, and the lack of strategic governmentwide planning is “partly because of the inherently complicated and crosscutting nature of the issue.” For example, “the federal budget does not generally account for disaster assistance by Congress or long-term impacts of climate change on existing federal infrastructure and programs.” Also, the federal crop and flood insurance programs “were not designed to generate sufficient funds to fully cover all losses and expenses,” and the programs need budget authority from Congress to operate. As of April, the National Flood Insurance Program is $21 billion in debt. The federal government also owns and operates hundreds of thousands of facilities and millions of acres of land that could be affected by climate change. Just last year, two military installations — Camp Lejeune in North Carolina and Tyndall Air Force Base in Florida — were both damaged by hurricanes, which cost billions of dollars in repairs. The federal government does include some “individual agency efforts that could help build resilience within existing programs or projects,” according to the report. For example, “the U.S. military integrates climate risks into its analysis, plans and programs, with particular attention paid to climate effects on force readiness, military bases, and training ranges.”
Climatic Constraints on Aggregate Economic Output - NBER - Efficient responses to climate change require accurate estimates of both aggregate damages and where and to whom they occur. While specific case studies and simulations have suggested that climate change disproportionately affects the poor, large-scale direct evidence of the magnitude and origins of this disparity is lacking. Similarly, evidence on aggregate damages, which is a central input into the evaluation of mitigation policy, often relies on country-level data whose accuracy has been questioned. Here we assemble longitudinal data on economic output from over 11,000 districts across 37 countries, including previously nondigitized sources in multiple languages, to assess both the aggregate and distributional impacts of warming temperatures. We find that local-level growth in aggregate output responds non-linearly to temperature across all regions, with output peaking at cooler temperatures (less than 10°C) than estimated in earlier country analyses and declining steeply thereafter. Long difference estimates of the impact of longer-term (decadal) trends in temperature on income are larger than estimates from an annual panel model, providing additional evidence for growth effects. Impacts of a given temperature exposure do not vary meaningfully between rich and poor regions, but exposure to damaging temperatures is much more common in poor regions. These results indicate that additional warming will exacerbate inequality, particularly across countries, and that economic development alone will be unlikely to reduce damages, as commonly hypothesized. We estimate that since 2000, warming has already cost both the US and the EU at least $4 trillion in lost output, and tropical countries are greater than 5% poorer than they would have been without this warming.
Are Economists Blocking Progress on Climate Change? - To understand what’s driving carbon emissions, it’s helpful keep a couple of things in mind. First, emissions will tend to grow at the same rate that the economy is growing. Economists call it the “scale” effect. But the more efficient we become at using energy and the better we get at reducing pollution through technology and changing human behavior, the more we can reduce carbon emission growth relative to real GDP growth.So while the scale effect always raises CO2 emissions, what we call the ‘technological-change” effect lowers carbon emissions. That’s why economists talk about the goal of “decoupling” economic growth and CO2 emissions. You want a “technological-change” effect that’s bigger than the scale effect.Disappointingly, we find no evidence so far of decoupling. Despite the 2017 Paris pledges and good intentions, CO2 emissions are still rising, not just in China and India, but also in OECD countries (a coalition of wealthy countries that work together on common eco-social problems). The energy efficiency improvements and rates of decarbonization aren’t yet enough to offset the carbon emission increases originating from the growth of the global economy. So the scale effect still dominates. There are deep uncertainties concerning the climate system and its interactions with the ecosystem of the Earth and the global economy, and self-reinforcing runaway warming is a real, though highly uncertain, possibility. Unfortunately, economists can’t handle any of this. It’s their first reflex to assume that it’s possible to use something called “optimal control.” That’s a technique of finding policy instruments that will control outcomes in a system, in this case working out the economically optimal pathways to solving or mitigating climate change in terms of the timing and the extent of CO2 emission reduction. Economists suffer from self-deception when they believe their optimal control analyses of the costs and benefits of climate mitigation policies can inform climate policymaking in any meaningful manner. They can only become part of the solution once they realize that they are not engineers. The point is not to endlessly debate, for example, the optimal social cost of carbon, acting like the medieval scholars arguing about how many angels can sit on the head of a pin. Efficiency is not the issue. What matters is how effective the climate change policy is going to be. The future has to be radically different from the past. Small tweaks and tinkering won’t cut it. We need structurally lower energy use and radically lower carbon emissions.
Investors with $34 trillion demand urgent climate change action (Reuters) - Investors managing more than $34 trillion in assets, nearly half the world’s invested capital, are demanding urgent action from governments on climate change, piling pressure on leaders of the world’s 20 biggest economies meeting this week. In an open letter to the “governments of the world” seen by Reuters, groups representing 477 investors stressed “the urgency of decisive action” on climate change to achieve the Paris Agreement target. Almost 200 nations agreed in Paris in 2015 to limit the global average temperature rise to well below 2 degrees Celsius above pre-industrial times. Current policies put the world on track for at least a 3C rise by the end of the century. The letter comes ahead of a June 28-29 G20 summit in Japan and as United Nations Secretary-General Antonio Guterres urges countries to back more ambitious climate goals. “There is an ambition gap... This ambition gap is of great concern to investors and needs to be addressed, with urgency,” a statement from the investors accompanying the letter said. Governments were urged to strengthen their Paris Agreement targets by 2020; phase out thermal coal power and fossil fuel subsidies by set deadlines; set a robust global carbon price by 2020 and improve climate-related financial reporting. “It is vital for our long-term planning and asset allocation decisions that governments work closely with investors to incorporate Paris-aligned climate scenarios into their policy frameworks and energy transition pathways,” the statement said. The investor letter was signed by the chief executives of the seven founding partners of The Investor Agenda, including the Institutional Investors Group on Climate Change and the United Nations-backed Principles for Responsible Investment. Large investors signing the statement included Legal & General Investment Management and the California Public Employees’ Retirement System (CalPERS), although the world’s two biggest asset managers, BlackRock and Vanguard, did not.
World’s biggest investor accused of dragging feet on climate crisis - When a letter from BlackRock’s founder and chief executive, Larry Fink, landed in inboxes in January saying that the world’s biggest investor would no longer invest in companies that are not compliant with the Paris climate agreement, people took notice. The media jumped on the announcement, which appeared to herald a new era of finance facing up to the perils of the climate emergency. The letter was a hoax, carried out by the Yes Men, a group of pranksters with a history of embarrassing big companies. But while the message was fake, the concern behind it was not: environmental campaigners see BlackRock as a key obstacle to progress on meeting climate crisis goals. Now they are stepping up the pressure on the world’s biggest asset manager – which faces its shareholders at its annual meeting on Thursday – to use its influence on some of the world’s biggest polluters, as it has done previously on issues such as executive pay. Fink, who was paid $24m (£18.8m) in 2018, began BlackRock as part of Blackstone, the world’s largest private equity group, and spun it out in 1995. Since then, New York-based BlackRock has risen to become an investing behemoth, controlling $6.5tn in assets – a value more than twice the annual output of the UK economy. That staggering size has placed BlackRock at the heart of the global fossil fuel industry: it is the largest investor in coal worldwide, according to InfluenceMap, an environmental campaign group, and has by far the highest density of coal holdings of the world’s 10 largest investors. BlackRock effectively owns 2.1bn tonnes of thermal coal reserves, based on the size of its stakes in major miners. Advertisement BlackRock is counted among the top three shareholders in every oil “supermajor” bar France’s Total, and is among the top 10 shareholders in seven of the 10 biggest coal producers, according to Guardian analysis of data from financial information firm S&P. Sign up to the Green Light email to get the planet's most important stories Read more Yet Fink, 66, who moves in US Democrat political circles, argues it is not his company’s duty to fight the climate emergency. In the real version of his annual letter to shareholders, published in January, Fink said that his overriding duty is to make customers money..
The climate change lawsuit that could stop the U.S. government from supporting fossil fuels – CBS 60 Minutes video & transcript - Of all the cases working their way through the federal court system, none is more interesting or potentially more life changing than Juliana versus the United States. To quote one federal judge, "This is no ordinary lawsuit." It was filed back in 2015 on behalf of a group of kids who are trying to get the courts to block the U.S. government from continuing the use of fossil fuels. They say it's causing climate change, endangering their future and violating their constitutional rights to life, liberty and property. As we first reported earlier this year, when the lawsuit first began hardly anyone took it seriously, including the government's lawyers, who have since watched the supreme court reject two of their motions to delay or dismiss the case. Four years in, it is still very much alive, in part because the plaintiffs have amassed a body of evidence that will surprise even the skeptics and have forced the government to admit that the crisis is real. The case was born here in Eugene, Oregon, a tree-hugger's paradise, and one of the cradles of environmental activism in the United States. The lead plaintiff, University of Oregon student Kelsey Juliana, was only five weeks old when her parents took her to her first rally to protect spotted owls. Today, her main concern is climate change, drought and the growing threat of wildfires in the surrounding Cascade Mountains.
Cement Produces More Pollution Than All the Trucks in the World - The most astonishing thing about cement is how much air pollution it produces. Manufacturing the stone-like building material is responsible for 7% of global carbon dioxide emissions, more than what comes from all the trucks in the world. And with that in mind, it’s surprising that leading cement makers from LafargeHolcim Ltd. in Switzerland to Votorantim Cimentos SA in Brazil are finding customers slow to embrace a greener alternative. Their story highlights the difficulties of taking greenhouse gases out of buildings, roads and bridges. After wresting deep cuts from the energy industry, policymakers looking to extend the fight against global warming are increasingly focusing on construction materials and practices as a place to make further reductions. The companies are working on solutions, but buyers are reluctant to pay more. “There is so far too little demand for sustainable materials,” said Jens Diebold, head of sustainability at LafargeHolcim. “I would love to see more demand from customers for it. There is limited sensitivity for carbon emissions in the construction of a building.” The cement industry's CO2 emissions were more than all the trucks on the road in 2017. While architects and developers concentrate on the energy used by their buildings, it’s actually the materials supporting the structure that embody the biggest share of its lifetime carbon footprint. Cement’s contribution to emissions is especially immense because of the chemical process required to make it. About two-thirds of the polluting gases that come from cement production stem from burning limestone. Kilns are heated to more than 1,400 degrees Celsius (2,600 Fahrenheit), about four times hotter than a home oven set to the self-clean cycle. Inside the kiln, carbon trapped in the limestone combines with oxygen and is released as CO2, the most abundant greenhouse gas. A ton of cement yields at least half a ton of CO2, according to the European Cement Association. That’s more than the average car would produce on a drive from New York to Miami. And a single mixer truck can carry about 13 tons. Hundreds or even thousands of tons go into ordinary office buildings.
What’s wrong with modern buildings? Everything, including Upfront Carbon Emissions - When writing about the CO2 emissions from making steel, I complained, “Why do buildings keep getting taller and skinnier, using more steel per square foot of usable space? Why is nobody talking about this?” Reed Landberg writes What’s Wrong With Modern Buildings? Everything, Starting With How They’re Made that brings together the questions about concrete and steel in buildings, and the issue of what I call Upfront Carbon Emissions in making them. “Everyone’s aware that we use electricity and energy to heat our homes and turn our lights on, but they might not have thought that loads of energy is needed in all the materials required to build the building in the first place,” said John Barrett, professor at the school of Earth and environment at Leeds University in northern England. “It’s a massive issue.” Landberg notes that “embodied emissions” are not regulated by anyone, but they are huge; he mentions the Leadenhall Building (the Cheesegrater, in the middle of the photo) had upfront carbon emissions of 92,210 tons, “about the same as the annual emissions of 20,000 cars.” It’s mostly from the manufacture of steel and concrete, and it’s mostly chemistry; making steel requires converting the carbon mixed in iron to carbon dioxide. Making cement requires driving the carbon from calcium carbonate. You can make the process more efficient but you can’t change the chemistry. Landberg quotes a report by C40 Cities, The future of urban consumption in a 1.5°C World, which calls for the increased use of timber instead of steel or concrete, which can lead to dramatic reductions in Upfront Carbon Emissions. But more importantly, it calls for greater material efficiency and a reduction in demand for new buildings.
Inslee Climate Plan Includes Prosecuting Fossil Fuel Producers -Democratic presidential candidate and Washington Gov. Jay Inslee unveiled a plan to directly challenge the fossil fuel industry, including holding polluters legally accountable and extending federal support to climate liability lawsuits against fossil fuel producers. “This industry has known about this for decades and has lied to the American people about it. The jig is now about to be up,” Inslee said as he announced his Freedom from Fossil Fuels plan on Monday. The plan is part of Inslee’s broader agenda—and singular campaign focus—to tackle the climate crisis, with other plans focusing onaccelerating the transition to clean energy, investing in green jobs and infrastructure and promoting global climate mobilization. Inslee’s latest plan is the first from a Democratic presidential candidate that addresses the culpability and legal liability of fossil fuel producers. He proposes using the Department of Justice to hold them accountable by establishing a new Office of Environmental Justice to pursue “maximum civil and criminal penalties under environmental law” against polluting corporations. “The Inslee Administration will ensure polluters pay for their actions, and will not hesitate to prosecute them to the fullest extent of the law,” the plan states. Inslee’s plan was applauded by Sen. Sheldon Whitehouse of Rhode Island, the one state that has filed a climate liability suit against the oil industry. “Governor Inslee’s message about holding polluters accountable in court is important, as the judicial system is one place where the deception and propaganda that the fossil fuel industry relies on won’t hold up,” Whitehouse said via email. “I’m glad his climate change platform is part of the primary conversation.”
U.S. electricity generation from renewables surpassed coal in April --In April 2019, U.S. monthly electricity generation from renewable sources exceeded coal-fired generation for the first time based on data in EIA’s Electric Power Monthly. Renewable sources provided 23% of total electricity generation to coal’s 20%. This outcome reflects both seasonal factors as well as long-term increases in renewable generation and decreases in coal generation. EIA includes utility-scale hydropower, wind, solar, geothermal, and biomass in its definition of renewable electricity generation.In the United States, overall electricity consumption is often lowest in the spring and fall months because temperatures are more moderate and electricity demand for heating and air conditioning is relatively low. Consequently, electricity generation from fuels such as natural gas, coal, and nuclear is often at its lowest point during these months as some generators undergo maintenance.Record generation from wind and near-record generation from solar contributed to the overall rise in renewable electricity generation this spring. Electricity generation from wind and solar has increased as more generating capacity has been installed. In 2018, about 15 gigawatts (GW) of wind and solar generating capacity came online.Wind generation reached a record monthly high in April 2019 of 30.2 million megawatthours (MWh). Solar generation—including utility-scale solar photovoltaics and utility-scale solar thermal—reached a record monthly high in June 2018 of 7.8 million MWh and will likely surpass that level this summer.Seasonal increases in hydroelectric generation also helped drive the overall increase in renewable generation. Conventional hydroelectric generation, which remains the largest source of renewable electricity in most months, totaled 25 million MWh in April. Hydroelectric generation tends to peak in the spring as melting snowpack results in increased water supply at downstream generators.
Bitcoin is an energy hog. Where is all that electricity coming from? --- The cryptocurrency bitcoin has become notorious for its ravenous appetite for electricity— and its presumed massive carbon footprint. A June paper in the journal Joule estimated that annual carbon dioxide emissions from the bitcoin network are as high as 22.9 million metric tons (as much as the country of Jordan). It also accounts for 0.2 percent of global electricity use. But another recent study by CoinShares, a cryptocurrency asset management and analysis firm, found that the majority of the electricity used by bitcoin actually comes from clean sources, like wind, solar, and hydropower. CoinShares says bitcoin network gets 74.1 percent of its electricity from renewables, making it “more renewables-driven than almost every other large-scale industry in the world.” It’s a surprising finding, and some analysts are skeptical, since it contradicts other assessments of where bitcoin miners get their energy. Analysts also warn that the same factors that pushed miners to use clean energy could one day lead them to back to dirty fuels.The CoinShares study also points to a broader problem for how renewable energy is currently deployed around the world: Many renewable power generators are so poorly located and underused that mining bitcoin has become the only viable use for that electricity. Even so, in a warming world with increasing greenhouse gas emissions, is it really worthwhile to use zero-emissions power for a volatile cryptocurrency, which one critic has described as “a colossal pump-and-dump scheme”? So it’s worth examining why bitcoin uses so much energy to begin with and whether CoinShares’ claim that it has turned toward clean energy stands up to scrutiny.
The Golden Asteroid Worth $700 Quintillion - Whether it was the Big Bang, Midas or God himself, we don’t really need to unlock the mystery of the origins of gold when we’ve already identified an asteroid worth $700 quintillion in precious heavy metals. If anything launches this metals mining space race, it will be this asteroid - Psyche 16, taking up residence between Mars and Jupiter and carrying around enough heavy metals to net every single person on the planet close to a trillion dollars. The massive quantities of gold, iron and nickel contained in this asteroid are mind-blowing. The discovery has been made. Now, it’s a question of proving it up. NASA plans to do just that, beginning in 2022. Of course, says veteran miner Scott Moore, CEO of EuroSun Mining “The ‘Titans of Gold’ now control hundreds of the best-producing properties around the world, but the 4-5 million ounces of gold they bring to the market every year pales in comparison to the conquests available in space.”In the decades to come, if you want to be a gold titan, you’ll have to get your feet off the ground. The real titans will be far from Earth.Moore should know: He heads up a junior mining company that is seeking a seat at the titan table with the biggest in-development gold mine in Europe.Can we actually extract this space gold? That is the quintillion-dollar question, certainly. Speaking to Outerplaces, Professor John Zarnecki, president of the Royal Astronomical Society, estimates that it would take around 25 years to get ‘proof of concept’, and 50 years to start commercial production.Of course, it all depends on two key things: Economic feasibility and our advancement of space technology.And then, we’re not alone, either. There are other world powers who would like to get their hands on that asteroid, as well. China definitively plans to dominate this race.Mitch Hunter-Scullion, founder of the UK-based Asteroid Mining Company, tells the BBC that this is definitively the next industry “boom”.
General Electric to scrap California power plant 20 years early - (Reuters) - General Electric Co said on Friday it plans to demolish a large power plant it owns in California this year after only one-third of its useful life because the plant is no longer economically viable in a state where wind and solar supply a growing share of inexpensive electricity. The 750-megawatt natural-gas-fired plant, known as the Inland Empire Energy Center, uses two of GE’s H-Class turbines, developed only in the last decade, before the company’s successor gas turbine, the flagship HA model, which uses different technology. The closure illustrates stiff competition in the deregulated energy market as cheap wind and solar supply more electricity, squeezing out fossil fuels. Some utilities say they have no plans to build more fossil plants. It also highlights the stumbles of Boston-based GE with its first H-Class turbine. The complex, steam-cooled H design takes hours to start, suffered technical problems and sold poorly, experts said. “We have made the decision to shut down operation of the Inland Empire Power Plant, which has been operating below capacity for several years, effective at the end of 2019,” GE told Reuters. The plant “is powered by a legacy gas turbine technology ... and is uneconomical to support further.” GE declined to comment on whether it would take a charge for shutting the plant. GE operates few power plants of its own.
Climate Protesters Storm Open-pit Mine in Western Germany --- Hundreds of environmental activists broke through a police cordon to enter one of Germany's biggest lignite coal mines Saturday, determined to draw attention to the urgency of climate change after a plan to make the European Union carbon neutral by 2050 failed to find agreement. Police ordered the activists to leave the vast, open-pit Garzweiler mine in western Germany, citing life-threatening dangers. German news agency dpa reported that some officers were hurt, but didn't have any further details. The occupation was among several demonstrations near the mine and adjacent power plants that attracted thousands of people to the village of Hochneukirch and surrounding Rhineland areas. Earlier Saturday, dozens of protesters temporarily blocked railroad tracks used to transport coal. The vast majority of rallies and protests remained peaceful. The mine has been a focus of environmental protests in recent years because the operator, German utility company RWE, planned to cut down a forest to enlarge it. "It's important to increase the pressure on the government," protester Selma Schubert said. "The government doesn't do enough against climate change." Participants in the Saturday protests held banners calling for climate protection and sang songs as they marched. According to German environmental group Bund, more than 8,000 people took part. "You're building a movement, that's beautiful," Seimi Rowin, who came from Scotland to protest, said. "But we need to get to the next step ... otherwise future generations will pay for it." Following months of climate protests by students and a sharp rise in the polls for Germany's Green party, Chancellor Angela Merkel recently threw her weight behind the goal of making Germany climate neutral by 2050. That would mean the country's economy no longer would add greenhouse gases to the atmosphere. Scientists say ending fossil fuel use by mid-century is a must if countries want to achieve the 2015 Paris climate accord's most ambitious goal of keeping global temperatures from rising more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) compared to pre-industrial times. ___
Column: Asia's thermal coal trade faces threats, with LNG the silent assassin – (Reuters) - Everywhere Asia’s coal industry looks it sees headwinds, from the current slump in prices induced largely by oversupply, to the lack of financing available for new projects, to the risk of restrictive regulations and the rise of cleaner energies. But perhaps the biggest risk in most of Asia, home to the world’s top four importers and two biggest exporters, is from liquefied natural gas (LNG), the super-chilled fuel that is expanding rapidly versus a largely moribund coal sector. Perhaps the surprising thing at this year’s Coaltrans Asia event, held this week on the Indonesian resort island of Bali, was that most of the delegates didn’t seem too concerned about LNG, or rising pipeline supplies of natural gas from central Asia and Russia to China. There was plentiful focus on renewables and whether coal still had a long-term role to play in growing the region’s power generation, or whether wind and solar would eat their lunch. But when it came to LNG, the general view was that the super-chilled fuel will be too expensive to be viable in countries that are planning to expand electricity generation through power plants that will run on imported commodities. While this may currently be the case, the trends already underway would seem to be swinging the pendulum in favour of LNG over coal, even for power generation in Asia..
U.S. EPA air chief under ethics scrutiny resigns -(Reuters) - Bill Wehrum, the U.S. Environmental Protection Agency official in charge of revising power plant rules and revamping vehicle emission standards who came under scrutiny for ethics allegations, will step down in days, he said on Wednesday. Wehrum, the head for air and radiation at the agency and one of its top officials, told staff in an email he will resign on Sunday. He said he was proud of the administration’s efforts “due in part to the clear direction provided by the president and the dedication of Administrator (Andrew) Wheeler to accomplishing the agency’s mission.” Wheeler said while he knew Wehrum would eventually step down, the departure date “has still come too soon.” But he applauded Wehrum for finalizing last week the Affordable Clean Energy (ACE) regulation, a replacement for the Obama administration’s signature climate regulation that targeted carbon emissions from power plants. The change, part of the Trump administration policy to slash regulations and raise production of fossil fuels, was a boost to coal-fired plants. Wehrum and the National Highway Traffic Safety Administration have been working to finalize a massive rewrite of vehicle emissions standards to freeze fuel-efficiency requirements at 2020 levels. Wehrum said after testifying at a U.S. House of Representatives hearing last week that he expected it would be weeks before the proposal was submitted to the White House Office of Management and Budget for final review. Ethics allegations have dogged Wehrum, a former lobbyist for energy interests. Democrats in Congress had asked the EPA’s inspector general to review whether Wehrum and other officials helped to reverse the agency’s position in a major enforcement action they say favored DTE Energy, a client of his former law firm, Hunton & Williams, now known as Hunton Andrews Kurth. Jeff Lagda, a spokesman for the EPA Office of Inspector General, said the office is still reviewing requests to review the allegations. An EPA spokesman said on Wednesday Wehrum had provided “general regulatory advice but – consistent with his ethical obligations – did not participate in particular matters where DTE is a party.” Democratic lawmakers also had launched an investigation about the Utility Air Regulatory Group (UARG), an organization of power companies with coal-fired plants that sought to loosen emissions rules that Wehrum had previously represented. That group dissolved in May due to heightened scrutiny.
Emulating the CIA, New Rule Would Let Trump’s EPA Disregard FOIA Requests With Near Impunity The Trump administration is set to introduce a new rule, without giving the public a chance to weigh in, which will allow officials at the Environmental Protection Agency to deny information requests—similar to how the CIA does so—by falsely claiming requested records are unavailable.A rule, signed by EPA Administrator Andrew Wheeler, will expand agency officials' authority to reject a FOIA request by labeling it as "non-responsive," meaning the agency has decided to withhold the requested records or has claimed certain exemptions from FOIA.President Donald Trump's Interior Department has previously expanded officials' authority over FOIA requests, setting up an "awareness review" under which they have 72 hours to review any request which pertains to them.The D.C. Circuit Court of Appeals ruled in 2016 that agencies have "no authority in the statute for the government" to redact certain information from a FOIA response "on the basis that the information is nonresponsive."As Nate Jones, director of the FOIA Project at the National Security Archive, wrote, the EPA and other agencies appear to be emulating the CIA—which has long been permitted to withhold information from the public while other government agencies have been comparatively expected to answer to FOIA requests.
S&P: New U.S. coal plant retirements likely to hit 28GW through 2023 - Institute for Energy Economics & Financial Analysis : Institute for Energy Economics & Financial Analysis --Despite continued attempts by the current federal administration to restore coal production in the United States to its former peak, economic forces driving wholesale electricity markets present a dim reality for coal-fired generation. S&P Global Market Intelligence projects that coal’s market share will continue to erode in the coming five-year period as a slew of announced retirements take place and the economic picture forces out additional coal plants that are exposed to the market. The increasingly favorable economics of zero-fuel cost renewables have contributed to a continued expansion in the market share of carbon-free generation, while the aging coal fleet continues to retire regardless of political backing. Additionally, natural gas-fired generation continues to claim market share from coal due to increased flexibility in unit dispatch, greater unit efficiency, and a prolonged stretch of low natural gas prices. Due to these headwinds, S&P Global Market Intelligence estimates that 28 GW of U.S. coal-fired generation will retire in 2019-2023. The Eastern Interconnect accounts for the majority of the retirements, with approximately 11 GW of announced capacity retirements coming offline by 2023 and another 9 GW forecast to retire due to poor economics. More than half of the anticipated retirements located in the East are within PJM. Approximately 8 GW of coal-fired generation is also expected to retire in the Western Interconnect.As a result of these retirements, conservative estimates suggest that demand for thermal coal will fall by more than 150 million tons over the coming five-year period. It is likely that coal pricing will be heavily exposed to the downside during this time while coal production struggles to ratchet down at the same pace as the contraction within the sector. Falling global coal prices will hinder the export markets from offering much of a reprieve as the outlook there also looks bleak. There is little chance of a recovery on the demand side of the equation, with 85 anticipated retirements of coal units in the next five years.
Environmentalists: Retiring Colorado's Coal Fleet Is Cost-Effective By 2023 - Retiring Colorado’s fleet of coal-fired power plants could cut carbon and save utility customers billions of dollars, according to a new analysis by the Sierra Club. The study looked at the economic impact of replacing 10 coal units in the state with cheaper wind and solar. The Sierra Club hired the consulting firm Strategen to examine different scenarios. The firm found that utilities could save about $1.7 billion if they replaced the units with wind, and $1.4 billion if they replaced coal with solar instead. The analysis did not include coal units currently slated for retirement such as Nucla and Xcel’s Comanche Units 1 and 2. When Strategen calculated the social cost of carbon on the plants to account for public health and property damage using recently approved state formulas, it found nearly $18 billion in savings. The social cost of carbon looks at the overall cost of climate change to human health, economies and society.“The report shows how the coal-fired generation in Colorado’s energy portfolio is economically unviable, and how it’s burdening electricity customers with extra costs when compared with cheaper wind and solar,” said Anna McDevitt, senior campaign representative at the Sierra Club’s Beyond Coal Campaign. The Sierra Club is calling on electricity providers like Xcel Energy, Tri-State Generation and Transmission Association to retire coal plants early. State lawmakers have also put new pressures on utilities to reduce greenhouse gas emissions that contribute to climate change. In the last session, they passed HB 1261, which requires the state overall to reduce emissions 90 percent by 2050.
As Coal Fades in the U.S., Natural Gas Becomes the Climate Battleground - The New York Times - America’s coal-burning power plants are shutting down at a rapid pace, forcing electric utilities to face the next big climate question: Embrace natural gas, or shift aggressively to renewable energy?Some large utilities, including Xcel Energy in the Upper Midwest, are now planning to sharply cut their coal and gas use in favor of clean and abundant wind and solar power, which have steadily fallen in cost. But in the Southeast and other regions, natural gas continues to dominate, because of its reliability and low prices driven by the fracking boom. Nationwide, energy companies plan to add at least 150 new gas plants and thousands of miles of pipelines in the years ahead. A rush to build gas-fired plants, even though they emit only half as much carbon pollution as coal, has the potential to lock in decades of new fossil-fuel use right as scientists say emissions need to fall drastically by midcentury to avert the worst impacts of global warming. “Gas infrastructure that’s built today is going to be with us for 30 years,” said Daniel Cohan, an associate professor of civil and environmental engineering at Rice University.“But if you look at scenarios that take climate change seriously, that say we need to get to net zero emissions by 2050,” he said, “that’s not going to be compatible with gas plants that don’t capture their carbon.”In some states, policymakers are now pushing to leave gas behind to meet ambitious climate goals. Last week, New York lawmakerspassed a sweeping energy bill that calls for the state to switch to entirely carbon-free electricity sources by 2040, following states like California and New Mexico that have passed similar laws.Since 2005, most power companies have lowered their carbon dioxide emissions significantly, in large part by shifting from coal to gas. Coal plants have become uncompetitive with other kinds of energy generation in much of the country, despite the Trump administration’s efforts to save them by rolling back federal pollution regulations. But in a recent analysis, David Pomerantz, the executive director of the Energy and Policy Institute, a pro-renewables group, looked at the long-term plans of the 22 biggest investor-owned utilities. Some in the Midwest are planning to speed up the rate at which they cut emissions between now and 2030. But other large utilities, like Duke Energy and American Electric Power, expect to reduce their carbon emissions at a slower pace over the next decade than they had over the previous decade.
Illinois pollution board rules Waukegan lakefront coal plant polluted groundwater with coal ash - NRG Energy’s Waukegan Generating Station located on Lake Michigan’s shoreline polluted the ground water with coal ash, an Illinois regulatory agency ruled Thursday. The Illinois Pollution Control Board’s interim order, released to the public Friday, is the result of a complaint filed by the Sierra Club and other environmental groups in October 2012 that alleged the Waukegan plant and three other Illinois plants broke state pollution laws and regulations. The board concluded that it was “more probable than not” the high levels of boron, sulfate and other contaminants found during groundwater monitoring at the Waukegan plant was caused by the plant’s operations and was coming from either, or perhaps both, the ash ponds still in use and historic ash-disposal sites. Some of the pollutants present risks to human health and others are dangerous to aquatic ecosystems if the groundwater spreads to other bodies of water, like Lake Michigan or nearby streams, according to the environmental groups’ complaint. While the Illinois Pollution Control Board sided in many cases with the environmental groups in its order, it said it was unable to determine the appropriate relief at this time and directed a hearing officer to hold additional hearings to determine what that should be. [Most read] Chicago police release hundreds of videos, documents on Jussie Smollett investigation » The environmental groups are seeking “the most stringent remedy possible, including a demand for removal of coal ash dumps at the coal power plants,” according to a Sierra Club news release.
Illinois Pollution Control Board finds NRG liable for coal ash at power plants - The pollution control board will hold additional public hearings to determine a remedy for the violations.Illinois environmental groups say they will press for strict measures to deal with coal ash contamination at four NRG power plants after state regulators ruled last week that the company is to blame for groundwater pollution at the sites.The June 20 ruling by the Illinois Pollution Control Board was a major development in the 7-year-old case but not the final word. The board will hold public hearings to determine the remedy for the violations it found.The Sierra Club, Environmental Law & Policy Center, Prairie Rivers Network and Citizens Against Ruining the Environment launched the proceedings in 2012 by filing a citizen lawsuit of the type meant to spark regulatory action. The complaint called for civil penalties against the company and forcing the company to clean up coal ash and polluted groundwater, which experts fear also contaminates nearby rivers. The Illinois Pollution Control Board agreed with environmental groups that NRG’s subsidiary Midwest Generation violated environmental rules at all four of its Illinois coal plants: Waukegan north of Chicago, Joliet and Will County southwest of Chicago, and Powerton in central Illinois. The environmental groups alleged that since groundwater monitoring began in 2010, contaminants related to coal ash were found in groundwater above allowable levels between 396 and 443 times each at the Powerton, Will County and Waukegan sites and 69 times in Joliet. Faith Bugel, an attorney for the environmental groups, said that while specific remedies will be determined during the upcoming litigation phase, environmental groups are hopeful that the board will address past contamination and prevent future pollution from coal ash. The pollution control board determined that coal ash was likely responsible for boron and sulfate, which are known components of coal ash, found at levels higher than the 90th percentile for groundwater statewide at all four sites. It also found coal ash likely responsible for arsenic, total dissolved solids and antimony at above allowable levels at some sites. The board also found that at the Powerton plant, the company violated a separate standard against open dumping by depositing coal ash cinders on the ground.
Train derailment sent 36 cars full of coal into the Great Dismal Swamp - Thirty-six railroad cars full of coal went off the tracks early Tuesday and landed in the Great Dismal Swamp, officials said Wednesday. The 3,600 tons of coal is fine, almost like sand. It went into the water along with some of the cars. It's still being cleaned up. The derailment occurred about 5 miles west of the intersection of Yadkin and Galberry roads, near the tracks that run parallel to Yadkin Road, said refuge manager Chris Lowie. It's in Chesapeake but not far from the Suffolk border. "It's literally right in the middle of the swamp," said Lowie. Norfolk Southern originally told The Virginian-Pilot the accident happened in the Portlock area of Chesapeake. The company finally acknowledged it was "within the boundaries" of the swamp more than 24 hours after the derailment. In explaining the discrepancy in location, a Norfolk Southern spokesman wrote in an email that "'near Portlock' … accurately conveyed the closest geographic reference point on the railroad system." The train derailed around 4:20 a.m. Tuesday. No one was injured, but Amtrak service was canceled for Tuesday and Wednesday. It is expected to be back to normal on Thursday. The cause of the derailment has not been determined and is under investigation, the spokesman, Tom Werner, wrote. Lowie said he got a call about six hours after the derailment. A Norfolk Southern representative called to talk about access in cleaning up the remnants of the accident. The railroad's permit allows them use of 50 feet of land on either side of the center of the tracks. "My first thoughts were, 'Holy cow, what a mess,'" Lowie said. "It was 36 cars all piled up like an accordion, most of them sideways and perpendicular to the tracks. Just debris and coal everywhere." The cleanup will take several weeks and occur in stages, Werner said in an email. First, Norfolk Southern will remove the damaged rail and coal from the right-of-way, then from the wildlife refuge. That phase will take two to three weeks. The company will work with the U.S. Fish and Wildlife Service and the Virginia Department of Environmental Quality to restore the 2.3 acres affected by the derailment, Werner wrote.
Cleanup of spilled coal in Great Dismal Swamp to take weeks (AP) — The cleanup of a coal train derailment in Virginia’s Great Dismal Swamp will likely take weeks. The manager of the Great Dismal Swamp National Wildlife Refuge told The Virginian-Pilot on Thursday that he’s been working to make sure that Norfolk Southern gets the necessary permits and access. Norfolk Southern spokesman Tom Werner said it will take two to three weeks for workers to remove damaged rail cars and tracks from the refuge. The firm then will need to work with various federal and state agencies to restore the 2.3 acres of the swamp that’s been impacted. The derailment occurred early Tuesday morning. Thirty-six cars carrying 3,600 tons of coal went off the tracks, raising concerns about the impact on wildlife and the swamp’s fragile peat soil.
U.S. mine regulator says no rush on silica limits, despite black lung worries (Reuters) - The head of the U.S. federal agency in charge of mine safety said on Thursday he has no plans to fast-track new limits for coal miner exposure to silica dust because he believes exposure rates are already falling. The comments come as the national coal miners and steel workers unions urge the Trump administration to regulate silica on the basis of research showing it is causing a resurgence of black lung disease among coal miners in central Appalachia here “We have increased our sampling, we have lowered the average exposure and we continue to do that every day,” Zatezalo told a Congressional committee hearing, adding that setting an “emergency standard” that set limits on the amount of crystalline silica miners can be exposed to would be “uncalled for.” Government research and reports from black lung disease clinics in West Virginia, Virginia and Kentucky show the incidence of black lung rebounding despite improved safety measures adopted decades ago that had almost eradicated the progressive respiratory disease. Researchers, including at the National Institute of Occupational Safety and Health, believe the resurgence is due to an increase in quartz rock blasting to reach deeper mine seams, a practice that produces large amounts of silica dust. In 2016, MSHA put out a standard to reduce respirable coal dust but did not set any limits for exposure to silica, which is finer and more dangerous to miners’ lungs.
Blurred lines: Trump's UN choice and her coal magnate spouse (AP) — The email went out from senior Environmental Protection Agency officials to Kelly Craft, the U.S. ambassador to Canada, responding to questions she had about a funding matter. But the acknowledgment email the EPA got back a few hours later wasn’t from the ambassador. It was from her husband, coal magnate Joseph Craft, a wealthy GOP donor who had been taking part in a months-long press by the coal industry for access and regulatory relief from the EPA and the Trump administration in general. The blurring of roles — and email accounts — by the Crafts this time and others since she began representing the U.S. is raising questions as senators consider her nomination by President Donald Trump to be U.S. ambassador to the United Nations. That post would give her a prime seat at international talks to fight climate change, in part by encouraging limits on the burning of coal, with its heat-trapping emissions. “Thanks!!” the coal baron replied to the December 2017 email from EPA officials, which had been addressed to “Ambassador Craft.” The agency was following up on a briefing she had gotten from then-EPA head Scott Pruitt on federal funding for cleaning up the Great Lakes, an issue of great interest to Canada. Joseph Craft sent the acknowledgment on his work email for his Tulsa, Oklahoma-based coal company, Alliance Resource Partners LP. His response ended with the breezy auto-tag from his cellphone: “Sent from my iPhone powered by coal!” In a statement Monday, the State Department said Joseph Craft had been copied in on the EPA response to his ambassador wife after her Great Lakes discussion with Pruitt because he “had played a role in facilitating the exchange.” The statement did not elaborate, or say why his help was needed arranging a discussion between two government officials. “However, he does not play a role in official U.S. government business,” the State Department said.
A Huge Tax Break Went to a Politically Connected Company in New Jersey Despite Red Flags - Holtec International told New Jersey regulators that Ohio was competing for its new headquarters. But officials there stripped the firm of past tax awards for failing to create the jobs it promised. In January 2014, as Holtec International explored sites for a new national headquarters and high-tech manufacturing center, the New Jersey company told state officials that the Garden State had stiff competition. A number of other states, including Ohio and South Carolina, had offered “robust proposals” to persuade the nuclear technology firm to relocate, said Holtec CEO Kris Singh in his sworn application to the New Jersey Economic Development Authority. Generous tax breaks from New Jersey’s new economic development program, he argued, could place Camden “on a level playing field” with Holtec’s other suitors. In return, the firm pledged the retention of 160 jobs and the creation of an additional 235 positions. Six months later, the EDA awarded the company $260 million in taxpayer assistance — the second-largest tax break in state history. What Holtec didn’t reveal, though, was that just weeks before filing its application in New Jersey, Ohio had stripped the company of tax credits there for failing to create the jobs it had promised as part of a similar program. According to records obtained by WNYC and ProPublica, none of the 200 positions it had pledged in 2009 to bring to Orrville, a small town about 20 miles outside Akron, ever materialized. Holtec, in a letter to Ohio regulators, blamed its problems on the failure of new manufacturing equipment that led to a “major setback.” The company also said it was suffering an overall “decline in orders” caused by “lower quality overseas competitors.” In the same letter, Holtec asked Ohio to consider applying the old credits to its new plan to build a high-tech manufacturing center. But there is no record that the state ever granted that request. In fact, local elected officials and economic development staffers in Ohio, as well as South Carolina, said in interviews that they knew of no approved package of incentives their states had offered Holtec. “We keep pretty close tabs on all our companies here, and we never heard anything about that,”
China Aims For 30 New Silk Road Nuclear Reactors By 2030 -- A senior Chinese official and former chairman of the state-owned China National Nuclear Corporation, Wang Shoujun, said that the country needs to give more support to its nuclear programs and take advantage of "the opportunities provided by the Belt and Road Initiative (BRI)," according to RT. Shoujun said at the China People’s Political Consultative Conference: "Going with nuclear power has already become a state strategy, and nuclear exports will help optimize our export trade and free up domestic high-end manufacturing capacity." Shoujun added that the country needs to improve research and development of its nuclear sector, as well as localize the production of key nuclear power components. His aim is to grow both the domestic and foreign nuclear markets to "make the most of the country’s comprehensive advantages in costs and technology." He also said that the country could build as many as 30 overseas nuclear reactors over the next decade as part of the BRI, which projects could bring in more than $145.5 billion to China by 2030. 41 BRI nations already have nuclear power programs or are planning to develop them. Shoujun says China only needs a 20% market share to create 5 million new jobs in the sector. The country's "new Silk Road" BRI megaproject was announced 6 years ago by President Xi Jinping and covers 152 countries in Europe, Asia, the Middle East and Africa. The BRI is expected to increase global trade significantly, cut trading costs for many countries involved, and replace the US with China as the primary political and economic counterparty for all the countries involved.
Winds of Change: Wind turbines on Lake Erie spark big support and big debate – Depending on the person asked, Cleveland could be looking at six wind turbines off Lake Erie’s shore, thousands of them or none at all. The project, called Icebreaker Wind, would be the first off-shore, freshwater installation in the U.S. Though the initial proposal involves six turbines, critics have pointed out both that approving these could lead to many more and that many residents have no idea that this project is even in the works.Yet many others disagree and support the project.The project comes from the Lake Erie Energy Development Corp (LEEDCo), a non-profit, public-private regional economic development partnership. Icebreaker, priced at $126 million, is as near to getting the final green light as it’s ever been. If it receives the go-ahead from the Ohio Power Siting Board (OPSB), it would likely begin construction next year.LEEDCo’s planning has been in the works since 2009, with a first application in 2013, when intentions to build a site were first submitted to the OPSB. The plans for the wind farm have since been championed by villages, cities and counties as well as dozens of other organizations and entities.Among them are the cities of Cleveland, Avon Lake, Euclid, Lakewood and Lorain. According to LEEDCo, supporters also include U.S. Rep. Marcy Kaptur, U.S. Sen. Sherrod Brown and dozens of labor, municipal and business groups. Jocelyn Travis heads up Sierra Club’s Ready for 100 campaign in Cleveland. The lakeshore city is on the road to being a 100 percent green energy city by 2050. In fact, Travis said, Lake Erie wind would be an important part of it.“We were the 83rd city in the U.S. to make that commitment,” she said. “We’re hopeful and we’re going to do everything we can to make sure we do it. I think it’s a great first step in Cleveland to reach the goal.”“The concerns about birds and wildlife, that’s a concern and that’s understandable and that’s what’s holding up the process,” she said. “My understanding is the parties have come to an understanding.”Travis said it’s important to her, and all the organizations, that wildlife isn’t harmed. On May 15 Sierra Club and the Ohio Environmental Council submitted a Revised Joint Stipulation spelling out details of the nearly three dozen requirements for the project. The 20-page document lists actions LEEDCo must take during the construction and operation of the turbines. That approval includes LEEDCo’s adherence to a small army of rules designed to protect birds, bats and other wildlife.
Ohio wind setback lawsuit spurred bill to block similar legal challenges - A bill to limit certain constitutional challenges in Ohio was conceived in response to a court case over how the state adopted its wind turbine setback rules, according to emails obtained under the state’s public records law.Ohio House Bill 126 would create a 275-day statute of limitations for challenges under the Ohio Constitution’s single-subject rule, which bars lawmakers from combining unrelated subjects into a single bill. That rule is the grounds for a lawsuit filed by wind energy supporters late last yearthat seeks to strike down a last-minute 2014 budget bill amendment that effectively tripled property line setbacks for commercial wind turbines. A motion to dismiss the case is pending.The bill’s primary sponsor, freshman Rep. Brett Hillyer, R-New Philadelphia, denied a connection between his legislation and the wind setback lawsuit, but emails indicate the bill stemmed from correspondence between two of Ohio’s most prominent wind energy critics a day after the lawsuit was filed. At that time, former lobbyist Sam Randazzo emailed Rep. Bill Seitz, R-Cincinnati, a news article about the case. Randazzo has represented wind energy opponents in lawsuits and now chairs the Public Utilities Commission of Ohio and the Ohio Power Siting Board. He declined through a commission press officer to comment for this article.
Ohio Senate struggles to revise nuclear subsidy bill amid intense political maneuvering - The Ohio Senate's Energy and Public Utilities Committee issued a notice June 25 announcing it would meet Wednesday afternoon and that a substitute House Bill 6 would be introduced. After nearly three months of committee hearings in the Ohio House and Senate, legislation crafted to subsidize two nuclear power plants while scrapping renewable energy mandates and energy efficiency programs is so bollixed that lawmakers Monday were struggling to write a new bill. Republican Senate leadership is aiming to unveil a substitute bill by this Wednesday or Thursday to replace House Bill 6, which was introduced by House GOP leaders in early April as a "clean air" bill and significantly altered 18 times following committee hearings before its passage by the House as Sub HB 6 on May 29. Senate President Larry Obhof generally supports nuclear energy but is also a proponent of renewable technology and gas turbine development. The House and Senate usually wrap up legislation by June 30. Obhof has added an "if needed" Senate session day in July. Other members of the Senate GOP leadership are not convinced the subsidy legislation must be approved before the end of this month. FirstEnergy Solutions (FES), the bankrupt owner of the two nuclear plants on Lake Erie that the legislation would subsidize through 2026, earlier set an end-of-June deadline for a decision, saying it had to order fuel rod assemblies for its Davis-Besse plant near Toledo by mid-year to have them ready for a scheduled refueling in the spring of 2020. The company completed the biennial refueling of its Perry nuclear plant, east of Cleveland, this past spring. Refueling typically costs about $50 million. Whether or not lawmakers believe the company — which expects to emerge from bankruptcy protection later this year with its creditors as owners — is a question that has been lost in the rush by the state's other electric utilities to gain something from the legislation, in hundreds of pages of testimony filed in committees, in daylong hearings, and in television advertising wars that that have erupted to convince voters to pressure lawmakers.
Rewritten bill would provide $150 million to nuclear plants | Toledo Blade— Dropping the pretense that the discussion was not about a bailout, the Ohio Senate is looking at a plan to send FirstEnergy Solutions up to $150 million a year to at least temporarily save its two nuclear power plants.The Senate Energy and Natural Resources Committee on Wednesday rewrote House Bill 6 to continue the state’s mandates for more renewable power and energy efficiency, but at scaled-back levels. The House would have repealed the mandates entirely. Current law requires utilities to find at least 12.5 percent of their power from wind, solar, and other renewable sources by 2027. The Senate plan would reduce that to 8.5 percent. Current law requires utilities to reduce overall energy consumption by 22.2 percent by 2027. That would be extended two additional years. Sen. Steve Wilson (R., Maineville) was unapologetic when saying he believes the consumer rescue of Davis-Besse 30 miles east of Toledo and the Perry plant 40 miles east of Cleveland is justified. He said he visited Davis-Besse in Oak Harbor last week. “The testimony that they are old, decrepit, decayed, inefficient, and unsafe is not true in my estimation,” he said. “I also know that in this state today about one-third of the power is produced in those two plants. I also know of the jobs involved ... “I think it’s worth subsidizing those nuclear assets with the proper audits and guardrails to see if they can make it or not make it,” Mr. Wilson said. He said FES’ financial books would be subject to annual review to determine whether this level of ratepayer support should continue in the future. “Since it guts clean energy programs, the bill ensures Ohio will continue supporting energy generation sources of the past and abandon the future of energy innovation,” said Dick Munson, of the Environmental Defense Fund. “Other states must be cheering for the investments and jobs that will flow to them from Ohio,” he said.
ACORE Speaks Out Against Ohio's H.B.6 -In a letter sent to Ohio Gov. Mike DeWine, the American Council on Renewable Energy (ACORE) is urging opposition to H.B.6, which the group argues would establish an unfair township referendum process that discriminates against wind development, as well as eliminate Ohio’s renewable portfolio standard (RPS).According to a new analysis by members of ACORE’s U.S. Partnership for Renewable Energy Finance program, these provisions in the legislation – in addition to overly restrictive wind setback requirements already in place – could cost the state more than $11 billion in new investment and economic activity.“Effective and predictable long-term policy is essential to unlock the immense investment potential for renewable energy in Ohio,” ACORE’s president and CEO, Gregory Wetstone, wrote in the letter. On behalf of its member companies, many of which invest and develop projects in Ohio, ACORE is respectfully urging DeWine to take the following action:
- Drop the “onerous and unfair” township referendum provision that discriminates against wind development;
- Implement more reasonable wind setback requirements; and
- Maintain the 12.5% RPS and oppose its elimination.
According to ACORE, the renewable energy sector currently employs nearly 10,000 Ohioans and contributes millions of dollars each year in local revenue across the Buckeye State. The American Wind Energy Association (AWEA) has also previously spoken out against H.B.6. In April, Andrew Gohn, eastern region director of state affairs at AWEA, says the bill would “devastate Ohio’s clean energy progress, gutting the state’s clean energy commitments and replacing them with customer bailouts for older, uncompetitive power plants.”
How (un)profitable are Ohio’s two nuclear plants? FirstEnergy Solutions says it can’t tell the public - Ohio lawmakers may have to decide by this weekend whether to bail out two Northern Ohio nuclear power plants, which owner FirstEnergy claims are unprofitable and will soon have to close without hundreds of millions in public subsidies.But exactly how much money are the two Northern Ohio nuclear plants losing? FirstEnergy Solutions says it can’t reveal that to lawmakers or the public because the company’s involved in bankruptcy proceedings.“The company has provided all relevant information and testified to the [Ohio] General Assembly to its fullest extent regarding the unprofitability of the Ohio nuclear facilities,” FirstEnergy Solutions spokesman Tom Becker said in a statement to cleveland.com. “The company is operating under several non-disclosure agreements as part of the bankruptcy and is precluded from disclosing non-public information.”As a result, as state legislators consider legislation (House Bill 6) to keep the plants open by charging every residential electricity customer in Ohio up to $1 per month through 2026, they have to rely on estimates, industry averages, and FirstEnergy Solutions’ word instead of specific data about whether the plants are profitable and – if not – how much of a subsidy they need.
Nuclear bailout bill undercuts green power, critics say | Toledo Blade — While a Senate proposal to save Ohio’s two nuclear power plants would keep a mandate for more renewable power, it would likely harm long-term investment in green energy, critics argued Thursday.Current law requires utilities to find increasingly more of their power from wind, solar, and other renewable sources until they reach 12.5 percent by the end of 2026 and then maintain at least that level thereafter.But under a revised House Bill 6 that could see a committee vote Friday, utilities would now have to find just 8.5 percent of their power from renewable sources by 2025 with no requirement to maintain that effort in years to come.“Once we get past that final compliance year, we essentially fall off a cliff,” said Trish DeMeter, of the Ohio Environmental Council Action Fund. ”We don’t believe that’s a good signal and especially would impact any long-term contracting that private-sector renewable investors move forward with.” The bill would create an annual fund of up to $160 million fueled by surcharges on the bills of electricity customers across the state.The fund would provide $9 for each megawatt hour of power produced by the Davis-Besse nuclear plant 30 miles east of Toledo and Perry plant 40 miles east of Cleveland through 2026, up to a maximum of $150 million.The plants have been unable to compete economically with cheap natural gas. Owner FirstEnergy Solutions, now in bankruptcy proceedings, has said it plans to begin decommissioning Davis-Besse by May 31, 2020, and Perry the following year absent some help from lawmakers.
Foes say they'll ask voters to block money for nuke plants— The fight over giving a financial lifeline to Ohio’s two nuclear plants by tacking a new fee onto every Ohioans’ electricity bill might not end even if state lawmakers agree on a solution this week. That’s because a group led by investors in natural gas plants is promising an attempt to override the plan — if it’s approved — through a statewide vote next year. What’s at stake goes beyond the debate over whether the legislation is really just a bailout of the nuclear industry and could become a campaign issue in Ohio’s 2020 legislative races. “We will kill this thing dead because we know the public is against it,” said Bill Siderewicz, president of Clean Energy Future, which has developed a handful of natural gas plants in Ohio. But first lawmakers must determine within the next few days if they’re willing to add a monthly surcharge on electricity bills to give nearly $200 million each year for the nuclear plants. FirstEnergy Solutions, which operates the Davis-Besse nuclear plant near Toledo and the Perry plant near Cleveland, says it needs to decide by the beginning of July whether to spend millions on refueling the plants or to shut them down. The company maintains that it can’t afford to operate the nuclear plants unless the government steps in and helps reduce the costs. Without any aid, both plants are slated to close by 2021. The Ohio Senate is considering the legislation already passed by the House, and a committee could vote on it Wednesday. While most Republicans in the House backed the bill, those in the Senate have been more reluctant and may make changes to the proposal. Supporters argue that the plants produce nearly all of the state’s clean energy and are vital to the areas where they’re located by employing a combined 1,400 workers and generating millions in taxes for schools and services. They’ve also poured money into television and radio ads along with mailings and robocalls — all designed to sway lawmakers and public opinion. But the opponents have been just as vocal, including renewable energy backers who are angry that the bill would get rid of mandates promoting the use of wind and solar power. As many as 60 companies that are against the legislation would likely be willing to fund an effort to overturn it through a statewide vote next year, Siderewicz said. Raising the money, he said this week, would not be a problem.
ODNR: Study linking radon to fracking in Ohio uses incorrect numbers - A new academic study linking the amount of radon present in a home to its proximity to deep-shale oil and gas “fracking” wells cites Athens County as having the most of these wells in the state of Ohio, with 108. There’s one problem with that statistic: Athens County does not have 108 deep-shale fracking wells. In fact, it has zero. The number of horizontally drilled fracking wells in some eastern Ohio counties shown on a map that’s part of the study also appears to be incorrect. Mark Bruce, a spokesperson for the Ohio Department of Natural Resources’ Division of Oil and Gas Resource Management, said Friday that the agency is working with the University of Toledo researchers who performed the radon/fracking study “to get their numbers right.” It's unclear whether correcting the numbers of deep-shale fracking wells in the study will alter the conclusions of the study. The study, called “Impact of the Hydraulic Fracturing on Indoor Radon Concentrations in Ohio: A Multilevel Modeling Approach,” recently was published on the website of the journal Frontiers in Public Health. Three researchers at the UToledo, one in its Department of Geography and Planning and two in its Department of Civil and Environmental Engineering, authored the study. For radon data collection data used in the study, the researchers had funding from the Ohio Department of Health and the U.S. Environmental Protection Agency. According to the study, the UToledo scientists geocoded 118,421 homes in all 88 Ohio counties between 2007 and 2014, and documented how close the homes were to any of 1,162 fracking wells in the state. That total number of fracking wells, as stated in the UToledo study, also is wrong, according to Bruce of the ODNR. He told The Athens NEWS Friday morning that the UToledo study gave incorrect numbers for the overall number of deep-shale fracking wells in Ohio (more than 2,600, not 1,162); deep-shale fracking wells in Athens County (zero, not 108); and drilling in some other Ohio counties (for example, the study shows Carroll County southeast of Canton as having between 7 and 19 fracking wells; it actually has had “476 horizontal wells… drilled and hydraulically fractured,” Bruce said).
Fracking in Ohio series: Some Ohio residents who complained about oil and gas feel 'abandoned' by the state - The Bonds’ trouble with the gas industry, and state regulators, started in 2011, before the shale boom had really gotten started in Noble County. They called the Ohio Department of Natural Resources (ODNR), which regulates the oil and gas industry, for help with a problem on their property. “Before I called the ODNR, someone said to me, ‘Listen, if you call the ODNR, you’re gonna be sorry.’ And boy oh boy we were sorry,” Bond said. The ODNR, which regulates oil and gas drilling, declined an interview about what happened. Records show that when ODNR came to investigate the Bonds’ complaint about a leaking oil tank, the agency issued a violation to the Bonds about a gas well on their property. That was only the beginning of a fraught relationship between the Bond family and Ohio regulators. The Allegheny Front confirmed that the Bond family made numerous complaints to various state agencies, concerning well pad noise and bright nighttime lights, and that gas development was polluting the air and water, and harming their health.“Every tree in the yard was dying, my cats died, my chickens died, we got sheep dying,” Kerri Bond claimed.She complained to the state about her family getting odd rashes, headaches, and dizziness. She said her grandson developed a breathing problem.Bond complained to the Ohio Department of Health, but their air testing found no radiological health hazard.She complained to the Ohio Environmental Protection Agency. “ The Ohio EPA declined to comment, but sent their Investigative Report to The Allegheny Front. The report clarified that while the agency has no authority to regulate noise or light pollution, it tested air quality at the well pad, and on the Bonds’ property. Antero was also allowed to test at the same time. The EPA found leaks from the well pad equipment of benzene and volatile organic compounds, but at levels allowed under Antero’s permit. Antero declined an interview, because the Bonds have a lawsuit pending against the company unrelated to the environmental claims. The EPA found that the chemical leaks did not create a health hazard. But growing body of evidence shows symptoms similar to the Bonds are associated with gas development.
Fracking in Ohio: State law gives energy companies right to force landowners into leases - Deciding what happens on private property might seem like a basic right. But when it comes to fracking, Ohio and other oil and gas-producing states have laws that can force landowners to lease their underground mineral rights to energy companies. That’s what happened to Patrick Hunkler and his wife, Jean Backs. It began in 2010, when a landman for an energy company knocked on their door. The landman offered them $137 an acre for the mineral rights under their 21 acres in Belmont County, in eastern Ohio. But they held out. By 2014, they were offered $8,500 an acre. Jean Backs was getting ready to retire. After 30 years working for the Ohio Department of Natural Resources (ODNR), the money might have been nice. But, she worried about the millions of gallons of water used to frack each well, and the waste it creates. “My big concern about signing a lease would be where’s that water going to come from and then what will happen to it when they’re finished,” she explained. “You can’t know that at the time that you signed a lease.” Still, her husband, who had worked for the Ohio EPA, and built a passive-solar house with recycled materials, was open to the idea. But he wanted a way to assure a lease would take into consideration his environmental concerns, including the bright lights used at well pads. And landmen pursued Hunkler and Backs like celebrities, making hundreds of calls to the family. “We would express our environmental concern, the only thing that they could offer us was money – a price per acre, and royalties,” he said. But making money wasn’t as important to the family as protecting their environment. They say landmen called them foolish. They went as far as following them on vacation, even threatening to bring the sheriff over to force them to sign. Then in 2017, they got a notice from ODNR that Chesapeake Energy was seeking to unitize their property. That meant the state could force the family to sign a lease under a state law. “We normally think of the rights of the landowner as being things like the right to decide what’s done with your land. Or what’s not done with your land,” explains Heidi Robertson, a professor of law and environmental studies at Cleveland State University. She published a law review article in 2018 about Ohio’s unitization law.
Ascent CEO says Ohio Utica Potential Not Yet Fully Realized - The chief of Ohio’s largest natural gas producer sees plenty of running room in the Utica Shale, a play he said is not yet fully delineated or being developed to its maximum potential. In a rare public appearance before an industry audience in the Appalachian Basin, Ascent Resources LLC CEO Jeff Fisher said the Ohio pure-play is poised for growth this year at a time when other operators in the region are scaling back. The company’s assets span all three phases of the Utica in southeast Ohio, which Fisher said is both an advantage and an opportunity to learn more about a play that’s often overshadowed by its younger cousin the Marcellus Shale. “Those are pretty distinctive,” Fisher said of the Utica’s dry and wet gas windows, along with its oil phase. “We think that gives us hydrocarbon diversity, different economics, different markets, and we see that as a big advantage. “Certainly, the dry gas window has been extremely prolific,” he told a crowd gathered for Hart Energy’s annual Dug East Conference and Exhibition in Pittsburgh. “I’ve seen a lot of shale plays, I’ve drilled a lot of horizontal plays -- this play matches anything I’ve ever participated in before.” Ascent had its beginning in 2013 after the late Aubrey McClendon was ousted from the helm of Chesapeake Energy Corp. He founded American Energy Partners LP (AELP) to develop affiliates with basin-specific strategies across the country. Once American Energy Appalachia Holdings LLC, Ascent eventually rebranded and became independent. Fisher, a McClendon protege who was on the executive team at Chesapeake, said Ascent chose Ohio because much of the company’s team had drilled some of the Utica’s first unconventional discovery wells. Chesapeake was a Utica pioneer, delivering the play’s first commercial production in Ohio. Ascent is now the state’s No. 1 natural gas producer and the nation’s eighth largest, according to Fisher. While the first two years of the company’s existence were “frankly a time of survival,” Ascent’s move to raise $1.5 billion of capital in 2016 transformed it. By the following year, it had doubled its production and was running a six-rig program. In 1Q2019, the company produced 1.6 Bcfe/d including more than 26,000 bbl of liquids from a 350,000-acre position. .
New petrochemical complex could create a “cancer alley” on Ohio River - Political and corporate leaders in West Virginia, Pennsylvania and Ohio, as well as the US Department of Energy, are rabidly pursuing a gigantic new storage, refining and production complex for petrochemicals and plastics in the Ohio River valley. It would be fueled by the fracking boom in the Marcellus and Utica Shales that has produced an over-abundance of cheap natural gas and the more-valuable liquid byproducts like ethane that are used to make plastic. In western Pennsylvania, Shell Polymers is constructing what could be the first of several plants to convert ethane into plastic pellets for making many different kinds of plastic products. Plastic pollution is recognized as a huge threat to ocean life globally, and only 9 percent of plastics made to date have been recycled. The centerpiece of the project is a multi-billion-dollar underground storage complex called the Appalachian Storage Hub, designed by the Appalachia Development Group (ADG), which is owned by the Mid-Atlantic Technology, Research and Innovation Center (MATRIC) and the West Virginia University Innovation Corporation. In January ADG received a controversial invitation from the Department of Energy to apply for a $1.9 billion loan guarantee, from a fund normally earmarked for renewable or “clean” energy projects, created by the Energy Policy Act of 2005. Steven Hedrick, the chief executive officer of ADG, argues that through the use of regionally produced feedstocks from fracked gas, the project would “significantly avoid or reduce anthropogenic emissions of greenhouse gases through conversion of these raw materials closer to their production locations.” A coalition of almost 150 grassroots groups, including FracTracker Alliance and the FreshWater Accountability Project, wrote to House Appropriations Committee Chair Nita Lowey (D-N.Y.), questioning the legality of the loan guarantee proposal, noting that the funding is intended for clean energy innovations. ADG replied that the storage hub includes innovations in the form of advanced leak detection, and thus is a “clean” energy project.
Report: Bechtel Selected to Build PTT Ethane Cracker in Belmont County — A recent announcement at a natural gas industry conference in Pittsburgh appears to be a major step forward for the proposed ethane cracker plant in Belmont County, as Bechtel Corp. says it has been selected to oversee construction of the multi-billion dollar facility.Paul Marsden, Bechtel’s senior vice president, confirmed the news during a presentation at the Northeast Petrochemical Conference & Exhibition in Pittsburgh. Bechtel currently is overseeing construction of Royal Dutch Shell’s cracker plant in Monaca, Pennsylvania.The proposed PTT Global Chemical America plant at Dilles Bottom, just south of Shadyside along the Ohio River, would be of similar size and scale to the Shell plant. With Bechtel overseeing both projects, there’s a stronger possibility that workers from the Shell site, once it’s completed, could relocate to the local region to begin work on the PTT site. PTT, based in Thailand, has been studying and assessing the local market since at least late 2015, when it announced it would tap into the region’s large concentration of wet gas from Marcellus and Utica shale drilling and build an ethane cracker plant at the former FirstEnergy R.E. Burger power plant site. The company since has partnered with Daelin, a South Korean company, and work has been progressing steadily through property purchases, air and water permits and land clearing. Most recently, in March, PTT contracted with a local business to remove trees of more than 3 inches in diameter in a 140-acre area at the site of the proposed petrochemical complex.
Environmentalists critical of natural-gas storage hub in Southwest Pa. regional plan - In May, the Southwestern Pennsylvania Commission (SPC), which is responsible for funneling federal funds to address regional infrastructure needs, released a 25-year plan for the Pittsburgh area. The plan, called “SmartMoves for a Changing Region,” included more money and bold visions for public transit, and mentioned how infrastructure changes could have a big impact in combating the effects of climate change. But the SPC’s plan also supports the creation of an Appalachian Storage Hub (ASH) for natural gases and other petrochemical products, and environmental and anti-fossil fuel groups weren’t pleased. A collection of environmental groups announced Monday that they would stand together in disapproval of the SPC’s inclusion of these hubs in the proposal. Twenty regional environmental groups, including the Breathe Project, the Group Against Smog and Pollution (GASP), and PennFuture, signed onto a critical letter addressed to the SPC. Matt Mehalik, the executive director of the Breathe Project, said in a news release that the existence of a storage hub would exacerbate climate change and have a harmful effect on public health.“The ASH concept is a direct threat to our region’s ability to meet climate change goals, putting our community at risk and giving us a reputation as a destructive, world-wide climate polluter,” Mehalik said. Currently, natural-gas drilling, or fracking, produces gas in the region that must be moved to established hubs in Texas and Canada for storage. Southwestern Pennsylvania is currently producing so much natural-gas that frackers must export large amounts of it, though the investment and financial results of that are still unclear. The plans say the ASH would support a pipeline, allowing the region’s natural gas to be kept at the storage hub and then processed at an ethane cracker plant like the one currently being built in Beaver County, where it will be turned into plastics. A 2018 U.S. Department of Energy study recommended the construction of a plant in the eastern United States to support the region’s natural gas industry, which is expected to grow rapidly over the next 30 years. While the Gulf Coast has historically dominated the country’s natural gas industry, the east, and Appalachia in particular, is projected to emerge as another hub.
‘It looked like Armageddon’: Refinery fire puts focus on toxic chemical - The sirens went off about 4 a.m. Friday at the Philadelphia Energy Solutions refinery, following a warning that crackled over radios — a leak had been detected in “Unit 433."Unit 433 is an alkylation unit, one of several process units that convert crude oil into fuels and other products at PES, the East Coast’s largest refinery. The “Unit 433” name conveyed a special alarm to refinery workers.The unit uses hydrofluoric acid as a catalyst, one of the most toxic materials handled in the refinery. In its gaseous state — hydrogen fluoride — it can drift beyond the refinery fence line and imperil the public. Just seconds after the radio warning, the first of several explosions ripped through Unit 433, rattling the plant and lighting up the night sky. The fiery explosions, whose cause is unknown, injured five workers, unnerved the city, and caused gasoline markets to spike on speculation of fuel shortages.“It looked like Armageddon,” said a veteran refinery worker, who was granted anonymity because he was not authorized to speak. “If that’s HF, we’re dead.”City officials said that no HF was released, a fortunate outcome considering the ferocity of the explosions that rocked the plant — the fire was still not extinguished Saturday — and the proximity of the hydrofluoric storage tank near Unit 433. The injured refinery workers were treated at the scene.The city initially ordered residents to shelter in place, but no mention was made about HF. In a worst-case scenario, according to the refinery’s risk management plan filed with federal regulators, an HF gas cloud could travel seven miles in 10 minutes, involving 1.1 million residents in Pennsylvania and New Jersey. The toxin causes skin and respiratory irritation at low exposures. In large doses, it is fatal.
Unit at Philadelphia refinery completely destroyed in fire: sources - (Reuters) - The alkylation unit involved in a massive fire on Friday at Philadelphia Energy Solutions Inc’s oil refinery has been completely destroyed, which will hamper the supply of gasoline from the U.S. East Coast’s largest refinery, sources familiar with the matter said on Sunday. The destruction of the unit, coupled with damage from the fire that ripped through the 335,000 barrel-per-day (bpd) refining complex, could force the 200,000 bpd Girard Point section of the two-section complex to remain shut for an extended period. Major units in the Point Breeze section of the plant were also shut down due to unrelated repairs, sources said. It could take several years for the company to rebuild the unit. The damage will test the resolve and the finances of the struggling refiner, which emerged from bankruptcy roughly a year ago and has embarked on a number of cash-saving measures in recent months. It will also have to contend with growing concern from the local community and public officials over whether it can safely operate amid its financial woes. The fire, which began in a tank and involved several explosions that sent a huge fireball into the sky, engulfing the surrounding areas in smoke early on Friday morning, was extinguished Saturday afternoon, the Philadelphia Fire Department said on Sunday in a statement. The department’s hazmat unit and Philadelphia’s department of public health are continuing to monitor the air quality around the refinery. A source familiar with plant operations said one explosion occurred at the 30,000 bpd alkylation unit that uses hydrofluoric acid (HF), one of the deadliest chemicals in the refining business and a source of controversy for its use to make high-octane gasoline at refineries located in densely populated areas. Hydrofluoric acid can form a toxic cloud at room temperature, with exposure leading to severe health problems and even death. Federal officials including the Occupational Safety and Health Administration and the U.S. Chemical Safety and Hazard Investigation Board on Monday will begin an investigation into the cause and origin of the fire, according to the fire department statement.
Feds to investigate Philly refinery explosion as local health officials remain cautious -Following a massive fire at the Philadelphia Energy Solutions Refining Complex, an oil refinery in South Philadelphia, health and air quality experts say residents in the path of the fire’s plume should be aware of potential health impacts from smoke and particulate matter in the coming days to weeks. A series of explosions that produced a giant fireball at the refinery in the early morning hours Friday led to plumes of black smoke and noxious odors that spread across the region. After receiving a request from the Clean Air Council, the U.S. Chemical Safety and Hazard Investigation Board announced it is deploying a four-person team to investigate the explosion. It has not yet been confirmed which chemicals burned in the fire, but preliminary statements have named propane and butane. According to Reuters, some sources cautioned an explosion occurred near hydrofluoric acid. The last of these is controversial for being one of the deadliest chemicals in the refining process. The Philadelphia Department of Public Health said in a statement that preliminary air sampling at the refinery and adjacent sites has shown no ambient carbon monoxide, combustible hydrocarbons or hydrogen sulfide. “Based on results of samples taken this morning, the Health Department has no findings that would suggest there is a threat to the public health as a result of today’s fire,” said James Garrow, a department spokesman. The findings were based on two air samples taken from up- and down-wind of the refinery this morning. Other local health experts are remaining more cautious. “There definitely is a risk of toxic chemical exposure,” said Gretchen Dahlkemper, who runs her own children’s health and toxic chemicals policy consulting firm in Philadelphia.
Investigations of Philadelphia refinery fire to include potential release of dangerous chemical -- Investigators from the Chemical Safety and Hazard Investigation Board who are investigating Friday’s refinery fire in South Philadelphia say their report will include recommendations aimed at preventing future incidents. Kristen Kulinowski, interim executive of the independent agency, said staff will be interviewing people involved and poring over documents to present a “detailed and fact-based report” of the fire at Philadelphia Energy Solutions. Kulinowski said those recommendations could be aimed at the company or regulators. “Wherever we see a gap that could have contributed to the incident or exacerbated the consequences of that incident we try to close that gap with a recommendation,” she said. The explosion and fire took a day and a half to extinguish and destroyed the alkylation unit that turned crude oil into gasoline. The former Sunoco refinery includes two facilities, Point Breeze and Girard Point, which together had the combined capacity of processing 335,000 barrels of crude oil a day. Four employees were injured in the accident, so the Occupational Safety and Health Administration is also investigating. Many say the impact could have been far worse. That’s because the unit that blew up used the dangerous chemical hydrogen fluoride, often referred to as HF. Kulinowski said the Chemical Safety Board has investigated incidents involving refineries’ use of hydrogen fluoride in the past, and will be doing so in this case as well. Hydrogen fluoride is used as a catalyst in the refining process to turn crude oil into high octane fuel. If released, it can form a vaporous cloud leading to death or severe injuries like blindness.
Philadelphia Refinery Explosion Takes 350000 Barrels a Day Out of Production - Three explosions early Friday morning rocked the Philadelphia Energy Solutions (PES) refinery and continued to burn in the noon hour, although the fire department has declared the fire contained. Four refinery workers received minor injuries and were treated at the scene, according to a report in the Philadelphia Inquirer. The PES refinery has an operating capacity of 335,000 barrels of crude oil a day.Propane fed the fire, according to PES officials, although the cause of the explosion had not yet been determined. Less than two weeks ago, a small fire at the refinery was quickly extinguished and the cause of that fire has either not been found or not been disclosed.The refinery, the largest on the U.S. east coast, is privately held by Carlyle Group Inc. (NYSE: CG) and Sunoco, a subsidiary of Energy Transfer Partners L.P. (NYSE: ETP) and comprises two refineries: Girard Point and Point Breeze. PES filed for bankruptcy in January 2018, blaming its troubles on a federal requirement that refiners either blend ethanol into their products or purchase renewable fuel credits, called RINs, from refiners who do. The bankruptcy court allowed PES to retire the RINs, ginning up the ire of renewable fuels providers.A report from Reuters in February concluded that the withdrawal of more than $590 million in payments to its owners also played a role in the company’s bankruptcy. Reuters also noted that the company’s cash balance declined by $61 million, according to a post-bankruptcy filing registered in January 2019.Christina Simeone, a director at the Kleinman Center for Energy Policy, published a report in September predicting that PES likely would face another bankruptcy filing on or before its debts mature in 2022. PES also has no competitively priced access to cheaper U.S. crude oil. There are no crude oil pipelines feeding the refinery from the major U.S. shale oil plays. Crude supplies to east coast refiners arrive by either rail or tankers from Africa, the Middle East, Europe and Canada. Unless there is a change to Jones Act provisions requiring that goods (including oil) shipped from one U.S. port to another be transported on a U.S.-built ship, at least 75% owned by U.S. citizens or entities, and manned by U.S. crews, PES and other east coast refineries will always pay more for crude oil than their Gulf Coast and Midwest counterparts. A significant oil discovery in the nearby Utica shale play also would help, according to Simeone.
Philly refinery fire could push cash-strapped owner closer to the brink --The cost of repairing damage from Friday’s devastating fire at the Philadelphia Energy Solutions refinery in South Philadelphia could push the cash-strapped owner closer to the financial brink, just a year after emerging from bankruptcy.As federal investigators arrived Monday to examine what triggered the spectacular fire, which injured five refinery workers and took more than a day to extinguish, the cost and the extent of the damage remained unclear.What is clear is that PES was on shaky financial ground before the explosions reverberated across the city early Friday.The refinery’s cash balance has declined over the last six months, according to quarterly reports that its parent company, PES Holdings LLC, files with U.S. Bankruptcy Court in Delaware. Its long-term debt increased 7.5 percent during the first quarter of this year, to $755 million. The value of the owner’s stake declined 43 percent in the first quarter, to $82 million at the end of March.The owner may not have the resources to finance the cost of replacing the equipment that was destroyed in Friday’s fire, an alkylation unit that produced a high-octane additive required for making premium gasoline. The cost of replacing the equipment could easily top $100 million, say industry experts. “I would be really skeptical they’re going to be able to raise the money to retool,” said Christina E. Simeone, an energy analyst who wrote a report for the University of Pennsylvania’s Kleinman Center for Energy Policy last fall that suggested the refinery is so uncompetitive and debt-burdened that it is “likely” to face bankruptcy again by 2022.
Philadelphia Energy Solutions seeks to permanently shut oil refinery (Reuters) - Philadelphia Energy Solutions (PES) will seek to permanently shut its oil refinery in the city after a massive fire caused substantial damage to the complex, the company confirmed on Wednesday, a day after sources told Reuters about the plans. “The recent fire at the refinery complex has made it impossible for us to continue operations. We are grateful that the fire resulted in only a few minor injuries,” PES CEO Mark Smith said in a statement. “We are committed to an orderly process to safely wind down our operations.” Shutting the refinery, the largest and oldest on the U.S. East Coast, will cost hundreds of jobs and squeeze gasoline supplies in the busiest, most densely populated corridor of the United States. Smith, in his statement, said the company will “position the refinery complex for a sale and restart,” though such a process would probably take years and face community opposition. Workers at the complex were leaving the refinery on Wednesday, some escorted by security, others alone, carrying boxes with personal belongings to their cars, with several confirming they had been laid off. Employees have been instructed to immediately begin the process of mothballing units, sources familiar with the company’s plans said. “I was stunned (when) I found out,” said Wayne Flood, a refinery worker who was let go Wednesday. He did not say what his job was before getting into his car. About 100 non-union employees will be laid off immediately, with a “significant” number of the 700 union employees expected to lose their jobs in mid-July, the sources said. The 335,000 barrel-per-day (bpd) complex, in a densely populated area in the southern part of the city, erupted in flames early on Friday in a series of explosions that could be heard miles away. “The impact of the closure will be a massive blow to the local economy,” said Ryan O’Callaghan, head of the refinery’s union, estimating that it would cost tens of thousands of jobs when contractors and other businesses that rely on the plant are included.
Philadelphia Energy Solutions to close refinery damaged by fire; gas prices spike - Philadelphia Energy Solutions (PES) on Wednesday confirmed it will soon close its South Philadelphia oil refinery after last week’s devastating explosions and resulting fire and “position the refinery complex for a sale and restart.” Wholesale gasoline prices surged on news of a closure. The announcement is expected to set off a scramble among various interest groups -- industry, labor, and climate activists -- over the possible reuse of the 1,400-acre site. The riverfront property contains extensive infrastructure and fuel storage facilities, including a rail unloading facility, pipeline interconnections, and a link to the seaport. Philip Rinaldi, the refinery’s former chief executive, is talking to stakeholders about saving the plant, said former U.S. Rep. Bob Brady, who was instrumental in organizing the plant’s 2012 rescue by Sunoco Inc. to stave off a threatened closure. “It’s worth saving," said Brady, who is still the city’s Democratic Party chairman. "Phil has some ideas.” Rinaldi, 73, who retired at the end of 2017, confirmed Wednesday he was engaged in “exploratory meetings looking at the role for this asset." Closing the refinery would have a huge impact on the Philadelphia economy and on regional fuel markets. The 335,000-barrel-a-day refinery, the largest on the East Coast, employs more than 1,000 people directly, including nearly 700 hourly union workers, and thousands of contractors. The plant has long been a thorn in the side of environmentalists and neighbors who say it is a health risk.“Today, Philadelphia Energy Solutions made the difficult decision to commence shutdown of the refining complex,” the company’s chief executive, Mark J. Smith, said in a statement. “While our teams include some of the most talented people in the industry, the recent fire at the refinery complex has made it impossible for us to continue operations.” Smith said the company would conduct an orderly shutdown. “As part of the wind-down, the company will position the refinery complex for a sale and restart," he said.
The East Coast's largest refinery is closing and many say a greener future is possible for the site --Philadelphia is buzzing with news that Philadelphia Energy Solutions plans to close its sprawling refinery. After years of close calls and passionate calls from activists eager to see the gas-making facility gone, a series of financial crises punctuated by a small fire, and then a massive one, led refinery officials to announce Wednesday a plan to shutter. The largest refinery in the Northeast, the 150-year-old complex covers 1,300 acres on both banks of the Schuylkill River. The closure would mean the loss of more than 1,000 jobs and thousands of other indirect positions. But this isn’t the first time Philly has been here. In 2011, the previous operator, Sunoco, announced a plan to shutter the refinery. Over the course of the next year, local leaders including then-Congressman Bob Brady worked to save the facility. They brought in the Carlyle Group, a private equity fund that purchased a two-thirds interest in the refinery, keeping its doors open. That wasn’t the end of the South Philadelphia complex’s woes. Since then, the refinery faced bankruptcies, fires, and mounting environmental concerns. The refinery is by far the single largest polluter in the city. After over a century and a half of refining, swathes of the site are profoundly contaminated by lead, gasoline, and benzene, a carcinogen. Now, with the refinery again planning to close, WHYY’s PlanPhilly spoke with seven Philadelphians, including politicos, neighbors and activists, about their vision for the polluted, yet weirdly prime, riverfront land. Here’s what they told us. I’ve been speaking with Phil Rinaldi [previous chief executive officer of Philadelphia Energy Solutions], who was the guy I was always dealing with when they were ready to close the refinery down the last time. Back then, he came through with Carlisle and he had the expertise and he put the pieces together and I have faith in him to do it again. We’re trying to get it done again. According to Phil, it can work and it can make money and it can and should be salvaged. It's almost too big to fail. The site is so big and there's nothing really you can do with it because of the contamination. There's nothing you can really do but have a refinery there.
Official says refinery too unsafe for investigators to enter - — A federal safety board looking into the fire and explosions at the largest oil refinery on the East Coast says the unit where the blasts happened remains too dangerous to access. Kristen Kulinowski is a leader of the U.S. Chemical Safety and Hazard Investigation Board. She calls the June 21 blaze and blasts at Philadelphia Energy Solutions a "fundamental failure."She says that investigators haven't determined a cause and that the first priority is to physically examine the unit once the area is structurally safe.For now, investigators are gathering perishable items, interviewing employees and requesting documents.She says the ordeal started when hydrocarbon vapors were somehow released in a unit that makes a blending agent for gasoline and then found an ignition source. If the hydrofluoric acid in that unit became a gas and got into the atmosphere, it would be harmful to humans.
Former Shale Gas CEO Says Fracking Revolution Has Been ‘A Disaster’ For Drillers, Investors - Steve Schlotterbeck, who led drilling company EQT as it expanded to become the nation’s largest producer of natural gas in 2017, arrived at a petrochemical industry conference in Pittsburgh Friday morning with a blunt message about shale gas drilling and fracking. “The shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor in the shale gas industry with very few limited exceptions,” Schlotterbeck, who left the helm of EQT last year, continued. “In fact, I’m not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change.” “While hundreds of billions of dollars of benefits have accrued to hundreds of millions of people, the amount of shareholder value destruction registers in the hundreds of billions of dollars,” he said. “The industry is self-destructive.” Schlotterbeck is not the first industry insider to ring alarm bells about the shale industry’s record of producing vast amounts of gas while burning through far more cash than it can earn by selling that gas. And drillers’ own numbers speak for themselves. Reported spending outweighed income for a group of 29 large public shale gas companies by $6.7 billion in 2018, bringing the group’s 2010 to 2018 cash flow to a total of negative $181 billion, according to a March 2019 report by the Institute for Energy Economics and Financial Analysis. But Schlotterbeck’s remarks, delivered to petrochemical and gas industry executives at the David L. Lawrence Convention Center in Pittsburgh, come from an individual uniquely positioned to understand how major Marcellus drillers make financial decisions — because he so recently ran a major shale gas drilling firm. Schlotterbeck now serves as a member of the board of directors at the Energy Innovation Center Institute, a nonprofit that offers energy industry training programs. His warnings on Friday were also offered in unusually stark terms. “The technological advancements developed by the industry have been the weapon of its own suicide,” Schlotterbeck added, referring to the financial impacts of shale gas drilling on shale gas drillers. “And unfortunately, the industry still has not fully realized how it’s killing itself. Since 2015, there’s been 172 E&P company bankruptcies involving nearly a hundred billion dollars of debt.”
Fearing Toxic Fumes, an Oil Port City Takes Matters Into Its Own Hands - Danielle Twomey hoists cardboard boxes and silver canisters out of the trunk of a car and carries them into South Portland's City Hall. She is from the state Department of Environmental Protection, and she's here to explain a new city-wide effort to understand the troubling stink in the air—and whether it is safe. Ever since the city learned that two local companies could be emitting as much as double the permitted amounts of volatile organic compounds, the community has been on edge. Twomey expects the council chambers to be full, as residents come to learn more about the air they breathe—and how to take matters, literally, into their own hands. South Portland is a close-knit, liberal city with a strong environmental consciousness. It's also an oil port surrounded by petroleum tanks. Where the shore isn't scenic beach here, it's covered with sprawling tank farms holding a range of petroleum products, including heated asphalt and bunker fuel. And there's the smell. It occasionally fills the air—sometimes to the point of stinging eyes and causing headaches—and it's not normal. Now, people here are wondering if the smell means they're breathing in VOCs coming from the tanks. Depending on which VOCs are present—and how much—they could irritate the eyes, nose and throat and cause respiratory problems and cancer. At 6:30 p.m., dozens of residents form a line that winds into the hallway as they sign up to get involved in a community-based temporary air monitoring program. They have come to City Hall to get trained to test their own air. By late August, the state will be ready to let the residents know the results of tests on their samples. By then, they hope to be able to give context for what those findings might mean for public health, too. It will take much longer to get a true base-line of how safe the air is in the city.
Shut down Enbridge Line 5? 6 things to know — Michigan's attorney general and environmental groups are pushing back on claims that Michigan could see fuel shortages and price spikes if Enbridge's hotly debated Line 5 through the Straits of Mackinac is shut down.The debate is intensifying amid an Enbridge advertising and public relations campaign touting the benefits of Line 5 that is bumping up against stepped-up warnings from environmentalists about the catastrophic effects of a spill in the straits.The issue is coming to a head as Attorney General Dana Nessel is expected to file court papers Thursday responding to an Enbridge lawsuit asking a judge to affirm its agreements with the administration of former Gov. Rick Snyder for the company to dig a tunnel beneath the straits to encase a replacement pipeline.Gov. Gretchen Whitmer hinted earlier that Nessel also may initiate legal proceedings Thursday to begin the process of shutting down Line 5.Recent studies have pointed to increases in the price of gasoline and propane if the flow of Line 5 crude oil across the states is cut off. But how much fuel prices would rise — and for how long — is difficult to pinpoint. Experts say that would depend, in part, on how much notice Enbridge and affected oil refineries were given to shift to alternative transporters and suppliers. A 2017 study, commissioned by the Snyder administration, pegged the impact on consumers from a Line 5 shutdown from as low as 2 cents a gallon for gas in metro Detroit to as high as 25 cents a gallon for propane in the Upper Peninsula. A 2018 study, commissioned by the National Wildlife Federation, estimated Yoopers would only pay an extra 5 cents a gallon for their propane. Without Line 5, "the demand for crude oil in Michigan far exceeds its ability to be supplied," Al Monaco, the president and CEO of Enbridge, Inc., told the Free Press editorial board."There would be a significant impact on supply," and "prices are going way up," along with the volume of trucks and train cars carrying oil, Monaco said.An Enbridge spokesman would not quantify the projected price increases. Nessel counters, through a spokeswoman, that there is no independent evidence that a shutdown would significantly affect gas prices at Michigan pumps or sharply reduce jet fuel supplied to Detroit Metropolitan Airport, as officials in Ohio have suggested. She also points out that a task force appointed by Whitmer is working on finding alternative propane supplies for the U.P.
Michigan AG Dana Nessel files lawsuit to shut down Line 5 in Mackinac Straits — Michigan Attorney General Dana Nessel filed a lawsuit on Thursday aimed at shutting down Enbridge Energy’s Line 5, the 66-year-old twin pipelines that transport oil and liquid propane through the Straits of Mackinac. The suit indicates Nessel has run out of patience waiting for Gov. Gretchen Whitmer, a fellow Democrat, to negotiate a settlement with the Canadian energy giant over the pipeline’s future. Filed in Ingham County Circuit Court, the lawsuit calls the pipeline “a continuing threat of grave harm to critical public rights in the Great Lakes,” and seeks to void a 1953 easement that allows Enbridge to run the pipelines across state-controlled bottomlands in the Straits. The filing calls for Line 5 to stop flowing “as soon as possible after a reasonable notice period” and to allow officials to permanently decommission the lines. The move fulfils Nessel’s vow to kickstart a shutdown if Whitmer could not agree — after months of negotiation — on an expedited plan to remove Line 5 from the lake bed. “I have consistently stated that Enbridge’s pipelines in the Straits need to be shut down as soon as possible because they present an unacceptable risk to the Great Lakes,” Nessel said in a statement. “Governor Whitmer tried her best to reach an agreement that would remove the pipelines from the Straits on an expedited basis, but Enbridge walked away from negotiations and instead filed a lawsuit against the state. Once that occurred, there was no need for further delay.” In a separate filing, Nessel asked the Michigan Court of Claims to dismiss a lawsuit Enbridge filed on June 6. The company has asked that court to uphold a series of agreements made last year with Gov. Rick Snyder — Whitmer’s Republican predecessor — to replace the Straits pipelines and bury new lines in a bedrock tunnel expected to cost Enbridge $500 million.
Schmid Pipeline Construction alleges it is owed $2 million for Mountaineer Express work – A pipeline company alleges it is owed more than $2 million for work completed as part of the Mountaineer Xpress Pipeline Project. Schmid Pipeline Construction Inc. filed a complaint in Wetzel Circuit Court against Columbia Gas Transmission LLC and Welded Construction LP and seeking enforcement of a mechanic's lien and other counts. The suit states that the plaintiff entered into a construction subcontract with Welded Construction in 2018 for labor and materials in connection with the construction of Columbia Gas' Mountaineer Xpress Pipeline Project. The plaintiff alleges it is currently owed $2.36 million for the work but has not been paid. The plaintiff is seeking all reasonable sums due, attorney fees and court costs. The plaintiff is represented by Norman T. Daniels Jr. and Nicholas R. Stuchell of Daniels Law Firm PLLC in Charleston.
Mountain Valley Pipeline protester arrested at West Virginia worksite - An opponent of the Mountain Valley Pipeline was arrested Wednesday while protesting the project in West Virginia. The group Appalachians Against Pipelines says the protester spent over seven hours chained to an excavator on a worksite in Summers County. The group says the protester was charged with two misdemeanors and a felony, and bond was set at $6,000. Another protest continues in Montgomery County where tree sitters have been blocking the path of the pipeline for almost 300 days.
Planned plant open for public comment — Before ground can be broken for a proposed $1.2 billion coal-to-liquids-fuel facility in Mason County, the company developing it must get its permit applications approved by the West Virginia Department of Environmental Protection (WVDEP). That can only happen after a required public comments period ends Thursday, July 18, and then perhaps completion of public hearings on the project.Domestic Synthetic (DS) Fuels, a West Virginia-owned company, says that it will convert the state's coal and natural gas to gasoline and other fuels at the new plant. The facility will go on 200 acres secured from the Mason County Development Authority in the Mason County Industrial Park. So far, no permits for the project have received final approval. "The WVDEP has not approved any permits for this project," said Terry Fletcher, acting communications director for the WVDEP. "The WVDEP's Division of Air Quality (DAQ) received a permit application from Domestic Synthetic Fuels and issued a draft permit that has been sent out to public notice and is now open for public comment." Fletcher said the public can mail in written comments until 5 p.m. Thursday, July 18, 2019. "Once the comment period closes and all comments have been received, the WVDEP will review those comments and make a final determination on the permit," he said. According to an air quality permit notice issued by the WVDEP, a preliminary evaluation has determined that all state and federal air quality requirements will be met by the proposed construction. The notice said potential increases in emissions that would be authorized by this permit action include carbon monoxide, 71.32 tons per year (TPY); oxides of nitrogen, 80.91 TPY; particulate matter less than 2.5 microns, 54.66 TPY; particulate matter less than 10 microns, 78.12 TPY; particulate matter, 83.49 TPY; sulfur dioxide, 27.19 TPY; volatile organic compounds, 86.10 TPY; and total hazardous air pollutants, 16.96 TPY. All are under the threshold of acceptable levels, according to the permit notice.
Bernheim Battles For Conservation Over Growth In Pipeline Feud - Bernheim Arboretum’s Conservation Director Andrew Berry dips his fingers into the creek. “This water is coming out of an aquifer. You can feel it and feel how cold it is,” he said. The spring flows into Cedar Creek, which crosses the electric transmission lines where Louisville Gas and Electric plans to run a new natural gas pipeline three-quarters of a mile through Bernheim’s property. The proposed route is designed to fuel economic development in the area, but construction will impact dozens of stream crossings, wetlands and other habitats for rare, endangered and threatened species. The 12-inch, underground pipeline will serve communities in Shepherdsville, Mount Washington, Lebanon Junction and Clermont that are running out of capacity on their existing natural gas line. “Creating a secondary path would enhance that reliability, but additionally it would be able to enhance capacity so we can continue to serve and support that area as it grows,” said Louisville Gas and Electric Spokeswoman Natasha Collins. The pipeline’s path through Cedar Grove wildlife corridor has setup a showdown between LG&E and Bernheim. “Legally, Bernheim cannot grant an easement for the pipeline,” Berry said. “Essentially, that is a deed that is recorded that says that Bernheim won’t do anything to destroy the natural features of the property…and specifically says that we won’t grant easements for things like natural gas pipelines.” The path of the pipeline will cut through at least nine different outcroppings of Glade Cress, a federally threatened species that grows nowhere else in the world, according to an environmental survey. Construction will also clear forest, impact streams and wetlands and disrupt habitat for rare and endangered wildlife including the Indiana and northern long-eared bats and two species of snails. That’s not to mention the other fauna, including deer, bobcat, coyotes, 24 species of snakes and 229 species of birds that make their homes in and around Bernheim.
Pipeline opponents, spurned by the state, ask federal agency to stop work - It’s hard to count how many times Virginia environmental regulators have been asked to stop work on the Mountain Valley Pipeline. Since construction of the natural gas pipeline began last year — and was quickly followed by problems with storm runoff clogging nearby streams with sediment — state lawmakers, advocacy groups and individuals have asked the Department of Environmental Quality to halt work on the project time and time again. What is easier to count is the number of stop-work orders issued by DEQ on any construction project since 2002: Zero. The last time DEQ formally stopped work was in July 2001, when it said a Newport News company was causing a “massive disturbance of the wetlands ecosystem” on a 43-acre tract near an industrial park in the city. Stop-work orders are “as rare as the ivory-billed woodpecker,” said David Sligh, conservation director of Wild Virginia, referring to a critically endangered species that is close to extinction. Frustrated by DEQ’s lack of action on repeated requests to stop Mountain Valley from causing additional pollution, Wild Virginia and other environmental groups are taking a different tack. A complaint filed late Friday with the Federal Energy Regulatory Commission, the lead agency overseeing construction of the 303-mile pipeline, asks that it rescind its earlier approval of the project. The 24-page filing also asks for a stop-work order. FERC temporarily ceased work on the $5 billion project last August, after a federal appeals court threw out a permit for the pipeline to pass through the Jefferson National Forest. The suspension was lifted in large part later in the same month. Since then, FERC — like DEQ — has declined to issue a stop-work order, despite repeated requests from environmental groups and people living along a pipeline route where there have been repeated violations of erosion and sediment control measures. But the complaint filed Friday is different from the countless requests made to FERC previously, which were sent to the commission’s executive secretary and often received no response. Sligh said Wild Virginia’s action goes to the commissioners of FERC, who are appointed by the president, for a formal decision. The process includes a 20-day public comment period, and allows other parties to intervene.
Pipeline backers set stage for Appalachian Trail fight - Developers of the Atlantic Coast pipeline yesterday filed a Supreme Court challenge focused on permits for the project's Appalachian Trail crossing. The outcome of the case could determine the future of the embattled natural gas pipeline. Phil Roeder/FlickrDevelopers of the Atlantic Coast pipeline yesterday launched a highly anticipated Supreme Court appeal to preserve permits for the natural gas project to traverse the Appalachian National Scenic Trail.A panel of judges for the 4th U.S. Circuit Court of Appeals earlier this year found the power to approve the project's 0.1-mile crossing of the trail fell not to the Forest Service, which may grant pipeline rights of way under the Mineral Leasing Act, but to the National Park Service, which is bound by a strict land conservation mandate (Energywire, Feb. 26).Dominion Energy Inc., Duke Energy Corp. and other companies behind the 600-mile pipeline asked the nation's highest bench to find that the lower court got it wrong. "While more than 50 pipelines presently cross under that footpath pursuant to similar rights-of-way, the Fourth Circuit concluded in the decision below that the Forest Service — indeed, every federal agency — lacks the power to grant rights-of-way to cross beneath the Trail pursuant to the MLA, rendering the footpath a 2,200-mile barrier separating resource-rich areas to its west from consumers to its east," Kirkland & Ellis LLP attorney Paul Clement argued in a petition filed last night. If the court rejects the case or issues a ruling that is unfavorable for Atlantic Coast, a costly reroute could shutter the project altogether, some analysts predict. Pipeline challengers will argue that the Forest Service has never had the power to issue a right of way for a pipeline to cross the trail. "Such an approval has never been necessary because other options, like state and private lands and existing rights-of-way, provide sufficient opportunities to route pipelines in the East," Southern Environmental Law Center attorney D.J. Gerken wrote in a letter to the Forest Service this week. Gerken wrote that the 4th Circuit ruling does not affect existing pipeline crossings of the Appalachian Trail, which are either located on state or private land or predate federal acquisitions or the creation of the trail."We have examined every existing crossing of the [Appalachian National Scenic Trail] by an oil or gas pipeline and confirmed that the Forest Service has never before granted a new right-of-way for an oil or gas pipeline to cross the ANST where it traverses a national forest, until it did so for the Atlantic Coast and Mountain Valley pipelines," he wrote. The Atlantic Coast and Mountain Valley projects were designed to carry gas from West Virginia to endpoints in North Carolina and Virginia, respectively. The Supreme Court agrees to review roughly 1% of the cases it receives, but Atlantic Coast's petition was joined by a filing from Solicitor General Noel Francisco, lending the appeal additional heft.
U.S. natural gas prices hit by cool start to summer- Kemp (Reuters) - Relatively cool temperatures at the start of summer across the most densely populated parts of the United States have sent natural gas prices tumbling to their lowest level for three years, piling on the misery for producers. But the biggest losers are set to be coal miners, because low gas prices are further undermining the already fragile economics of the remaining coal-fired power stations and will likely hasten more closures. Front-month futures prices for gas delivered to Henry Hub in Louisiana have averaged less than $2.34 per million British thermal units over the last 20 trading days, the lowest since 2016.That is down from an average of almost $4.40 in late November and early December, and 60 cents per million Btus below the same point last year.Heating demand during the winter of 2018/19 was moderately higher than in the previous three heating seasons but gas stocks remained fairly plentiful.The relatively cool start to the summer has compounded the problem by cutting air-conditioning demand and power producers' consumption of natural gas (https://tmsnrt.rs/2FDHRnw). Working stocks in underground storage have risen faster - or drawn down more slowly - than the five-year seasonal average for 15 consecutive weeks since the middle of March. U.S. dry gas production during the first quarter of 2019 was almost 13% higher than in the same period a year earlier, according data from the U.S. Energy Information Administration (EIA).But gas consumption by power producers increased by less than 7% over the same period (“Electric power monthly”, EIA, June 2019).Gas is increasingly produced for export by pipeline to Mexico and tanker to a range of destinations in Europe and Asia (“United States has been a net exporter of natural gas for more than 12 consecutive months”, EIA, May 2). Even with increased exports, however, the domestic market has been in surplus owing to mild temperatures and moderate power burn. In response, gas prices are tumbling to incentivise power producers to run gas-fired generators for more hours at the expense of the remaining coal plants.
Hotter Weather Trends Offer Support To Ailing Natural Gas Prices - Natural gas prices have suffered quite a decline over the last few weeks, thanks to very weak supply / demand balances. This has pushed to commodity to multi-year lows, with the July contract bottoming at $2.159 late last week. It has since found a little life, moving up around 15 cents off that low, closing just over the $2.30 level in today's session. While prices had reached very oversold levels, part of the recovery has come from an improved weather pattern here in the latter part of June, with slightly above normal heat expected to persist into the start of July as well. Notice the elevated GWDD (the measure of national weather demand) over the next 15 days. In map form, we see that there is a lack of "blue" on the maps, and while the heat we see is nothing extreme, the market has taken notice that it's not as tame of a pattern as what had been perceived. We first picked up on this risk for some hotter trends back more than two weeks ago, at a time when the pattern was very cool versus normal, giving the "forecast trends" a slightly bullish rating in our "Pre-Close" update from June 7th. That risk became reality as forecasts progressed, and at least contributed to giving prices a push higher off last week's multi-year lows. What's the next move from here? Sign up for a 10-day free trial here and take a look at the services we have to offer that can keep you one step ahead of the market.
July Natural Gas Contract Marks Lowest Monthly Settlement Price Since June 2016 - The July 2019 natural gas contract is no more, having rolled off the board today with a final price of $2.291, marking the lowest monthly settlement in just over three years, since the sub-$2.00 settlement of the June contract in 2016. Very weak supply / demand balances have been the main culprit, but recent weather patterns have done absolutely nothing to help put a halt to the price declines, as almost every single day in the month of June so far has seen below normal demand levels. In map form, you can see the dominance of "blue" colors, or, cooler than normal, which of course means less natural gas demand. We are, in fact, looking at one of the coolest (lowest demand) June months that we've seen in several years. This has been a definite contributing factor toward allowing us to see six 100+ weekly builds, per EIA reports. The tide is turning, however, as we are finally about to string together several above normal demand days over the next week or two. Hotter than normal temperatures will be focused across key areas of the Midwest to East in the near term. As we showed yesterday, the hotter shift has already pushed prices up from the lows late last week.
Streak Of Triple-Digit Natural Gas Builds Comes To An End - After a run of six consecutive weeks with a reported natural gas build over 100 bcf, the streak finally ended with today's EIA report that showed we injected 98 bcf for the week ending 6/21. This turned out dead-on with the estimate that we had held since the start of this week, outlined in our Monday weekly report. While the build was well above the 5-year average build, it was reflective of much tighter supply / demand balances than we have seen for a long time, as the higher number was more a product of just being in a lower demand weather regime. Many parts of the country saw cooler than normal temperatures, limiting natural gas demand. The confirmation of tighter supply / demand balances helped prices stage a rally today, with the new prompt month August contract rising nearly 2.5% on the day. Forecast demand is also on the increase, with much more above normal temperature coverage in the near term, boosting natural gas demand. The longer the hotter pattern lasts, the more prices can continue to advance higher.
Downside Pressure To Be Applied To Natural Gas Prices As Forecast Shifts Cooler In The 8-15 Day Time Frame - The Energy Information Administration (EIA) released its weekly storage report on Thursday morning. The report revealed an inventory build of 98 BCF for the week ending June 21, which fell within the trading range of 90 BCF-113 BCF, but fell slightly below consensus estimates of 101 BCF. The build of 98 BCF for the week ending June 21 is compared to the 71 BCF build from a year ago and the five-year avg. build of 70 BCF. Despite being well above last year and the five-year average, the 98 BCF was the tightest stat of the summer so far in support of the bulls. Stockpiles stand at 2,301 BCF vs. 2,065 BCF a year ago and the five-year avg. of 2,472 BCF. That's 236 BCF higher than last year and 171 BCF less than the five-year avg. Figures 1 and 2 below are both depictions (table and graph) of Thursday's EIA natural gas storage report for the week of June 17-21. Thursday's EIA storage report was positive news for the bulls and translated into a jump within the natural gas strip. On Thursday, the natural gas August futures contract saw a 2.38% or 5.6 cents gap up to $2.324. The September contact increased 5.4 cents to $2.298. Despite the positive news on Thursday for the bulls, the past couple of forecast model runs have trended slightly cooler in the 8-15 day time frame. After peaking over $2.360 early in the trading session, the front-month August natural gas futures contract settled lower Friday 0.53%, or 1.6 cents ($0.016), to $2.308. The September contract also settled lower 1.6 cents ($0.016) to $2.282. Figure 3 below is a chart depicting the price trend of the front-month August contract over the past 24 hours. According to Genscape, supply (88.4 BCF/d) is outweighing demand (79 BCF/d) though supply growth (0.2 BCF/d) was smaller than demand growth (1 BCF/d) week/week. Most of the demand increases have come from power burns (32.6 BCF/d), exports to Mexico (5.4 BCF/d), and LNG feed gas (5.5 BCF/d). Warm to hot and humid conditions will by and large be the theme over the next week or so across the central and eastern U.S. The East Coast will get a brief reprieve from the warmth/heat Sunday and Monday as an upper level trough will drop out of Canada bringing in cooler temperatures. The upper level flow pattern is expected to flatten out next week across the Lower 48. This means that temperatures will not be as hot but still warm (closer to normal levels) and humid. This is particularly the case for the north-central U.S. The flattening out of the pattern next week will allow for the jet stream and associated surface frontal boundary to move further to the south from the U.S.-Canadian border.
Natural Gas Prices Rally, Then Un-Rally In Today's Session It was a roller-coaster ride for natural gas prices to end the week, with the August contract up as much as 4 cents on the day at one point before sellers stepped in, sending it to a daily decline of 1.6 cents, forming a shooting-star candle for the day. Despite today's close, prompt month prices did rise just over 5.5% for the week, thanks in part to a notably hotter weather shift in forecasts for the early part of July. The current 6-10 day period from the latest GEFS model looks like this: Contrast that with what the model showed 6 days ago for the same period: Notice the large hotter shift, especially in the Southeast, one critical region for natural gas demand. Those hotter trends had come to a halt in the last couple of model cycles, with our net GWDD (weather demand) change slightly lower this morning. This brings us back to today's price action. Given the weather forecast and our interpretation of supply / demand balances, our view sent to clients in this morning's report was neutral, feeling that it would be difficult to sustain any further price rally. While prices did rally on some strong initial Henry Hub cash prices, the rally indeed did prove to be unsustainable, reversing rather quickly after mid-morning. Next week is a new week, and in this case, a new month as well.
Bill would ban offshore drilling - It’s another effort to stop oil and gas expoloration off local coastlines but this time it carries the teeth of possible national legislation. South Carolina Representative Joe Cunningham is helping to sponsor legislation that would permanently ban offshore oil and gas drilling off the Atlantic and Pacific Coasts. Cunningham saying that clean ocean jobs from tourism and fishing are vital to the economies of coastlines up and down the Atlantic as well as on the Pacific shore “Every coastal state with thriving tourism outdoor recreation or fishing industry is in danger if drilling is allowed to take place off of its shores,” says Cunninhgam. In Savannah, Paulita Bennett-Martin from Oceana applauded Cunningham’s legislative efforts. (His bill, H.R. 1941, has passed the House Committee on Natural Resources.) “What it really means is really a productive step forward in the fight against off shore drilling,” she told us. She said up to 23,000 jobs in Georgia depend on a clean ocean environment and that The Trump Administration and oil companies are receiving more push back on the plan to allow testing and maybe uiltimately leasing. “But the groundswell of opposition is incredible,” says Bennett-Martin. “it’s probably one of the biggest and most kind of active movements that i’ve seen in recent history.”
House votes to block US offshore drilling for one year -- The House on Thursday adopted a series of amendments that would block offshore drilling along most U.S. shores, taking development of all of the Atlantic and Pacific coasts off the table. The bipartisan amendments to a Department of the Interior spending bill would bar new offshore development for fiscal year 2020, which begins Oct. 1. Members on both sides of the aisle have pushed for measures that would limit drilling along their state’s shorelines. The collection of amendments included in the spending bill limit new development in most coastal waters, including the Florida portion of the Gulf of Mexico. One of the amendments received support from 25 Republicans. “It’s pretty cut and dry where I come from. We don’t want it and we don’t need it,” Rep. Joe Cunningham (D-S.C.) said at a meeting earlier this week to review offshore drilling bans. Another amendment would block the seismic testing used to find oil and gas reserves. The Trump administration has pushed an energy strategy that includes further offshore drilling, but Interior Secretary David Bernhardt has yet to unveil the department's five-year offshore drilling plan, citing the uncertainty surrounding an Alaska case that blocks development there. The House is expected to vote on the spending bill before the end of the month. After that, the measure will be sent to the GOP-controlled Senate.
Dozens of Coastal Republicans Vote with Democrats to Ban Offshore Oil, Gas Drilling --Two dozen Republican House members representing coastal states joined their Democratic counterparts this week in voting to effectively ban offshore oil and gas drilling — as well as other offshore practices — as the Trump administration rolled back more environmental protection policies put into place by the Obama administration. In total, 24 Republicans, along with nearly all Democrats, voted for a variety of measures that would, by restricting the use of federal funds related to these activities, prevent or severely restrict oil and gas drilling in the Atlantic and Pacific Oceans, as well as the portions of the Gulf of Mexico surrounding Florida. Seismic airgun testing that's used to locate the fossil fuel reserves would also be banned. The provisions were not a single piece of legislation but rather several smaller amendments successfully attached Thursday evening to a much larger appropriations bill for Fiscal Year 2020. The bans, if enacted, would be in place for one year. Of the 24 GOP legislators who voted in favor of at least one of these amendments, 20 represented East Coast states, including Florida (Gus Bilirakis, Mario Díaz-Balart, Matt Gaetz, Brian Mast, Francis Rooney, John Rutherford, Ross Spano, Michael Waltz, Ted Yoho, Vern Buchanan, Bill Posey); Maryland (Andy Harris), New York (John Katko, Peter King, Elise Stefanik, Lee Zeldin); South Carolina (Tom Rice); New Jersey (Chris Smith); Pennsylvania (Michael Fitzpatrick); and North Carolina (Mark Meadows). The move by House Republicans to side with Democrats for the increased environmental protections clashes with the Trump administration's stance, which has been to rollback environmental regulations put into place under Obama aimed to prevent a repeat of the deadly explosion of the oil drilling rig Deepwater Horizon in 2010.
This Louisiana Parish Allowed a Quarter of Its Sheriff’s Deputies To Work Security for a Pipeline —As construction equipment roared back to life, opponents of the Bayou Bridge Pipeline—part of the larger project connecting the Dakota Access pipeline to refineries in Louisiana—shook their heads in dismay. They had spent hours explaining to sheriff’s deputies that Energy Transfer, the company building the pipeline, did not have the required permission from landowners to begin construction—a fact later confirmed by a judge. But on that day in September 2018 under Louisiana’s scorching summer sun, there was no convincing the deputies from the St. Martin Parish Sheriff’s Office. Instead, they told the activists—who call themselves water protectors—they would be arrested on felony trespassing charges. “Why are you working for this company?” asked an independent reporter. “Do it look like I’m working for this company? Do this company pay me? I work for the sheriff’s office,” replied Lt. Jay Capterville. Records show that Capterville was, in fact, not on the clock for the sheriff’s office that day. As for why he was in the swamp in uniform, there’s a likely explanation: He’s among the 58 sheriff’s deputies granted permission to moonlight for Hub Enterprises, which is Energy Transfer’s security contractor for the Bayou Bridge project. Capterville did not respond to requests for comment by deadline. In October 2018, the sheriff’s office granted the deputies retroactive permission to work with Hub Enterprises, accounting for 27% of the parish’s sheriff’s deputies. No request was denied. Of 19 deputies identified at the site between Aug. 1, 2018, and Oct. 13, 2018, all but five were off the clock.
Tensions between U.S. and Iran could impact gas prices, La. oil industry - Louisiana’s oil and gas industry is paying close attention to the escalating tensions between the U.S. and Iran even though America has become more energy independent. Professor Eric Smith of Tulane University’s Energy Institute said when it comes to oil, it is a world-market. "There’s nothing that happens anywhere in the world that doesn’t affect the price of crude oil and gasoline in the United States,” Smith said. Smith said paying more at the pump could be a consequence of the standoff between the U.S. and Iran, especially if tensions are protracted. "I think you should reasonably expect that. The thing I would caution people against is don’t overact to a short-term effect,” Smith said. Tyler Gray, president of the Louisiana Mid-Continent Oil and Gas Association, said some oil prices have already been impacted in recent days. "You do have these world tension issues that go on and you have seen a spike. Last week, West Texas Intermediate went up about 10 percent, ending around $57 a barrel. And as part of that, you are looking at a world market when it comes to those issues,” Gray said.
The US government has studied the longest oil spill in history — 14 years after the leak began - The federal government’s first study of the nearly 15-year-long oil spill in the Gulf of Mexico estimates that up to 108 barrels per day — more than 4,500 gallons — is flowing from a site where an oil company’s platform and wells were destroyed during a hurricane.Monday’s report, by two scientists at the National Oceanic and Atmospheric Administration and a Florida State University professor, joined several others in disputing the company’s claim that only one drop of oil per minute is being released from a small area covered in mud, amounting to less than three gallons each day. “The results of this study contradict these conclusions by the Taylor Energy Company,” the authors said. The government’s findings also differ from those of three studies last year that said the flow of oil from the site was substantially higher. Geoscientist Oscar Garcia-Pineda estimated that between 250 and 700 barrels per day — up to 29,000 gallons — are flowing into the gulf. University of South Florida marine scientist Shaojie Sun determined that between 50 and 1,700 barrels per day — up to 71,400 gallons — were pouring from the site. Even one of the federal report’s authors — Ian MacDonald, the Florida State professor — estimated that nearly 150 barrels, about 6,300 gallons, spilled from the site that Taylor Energy once leased in an underwater canyon 12 miles off the coast of Louisiana. The other authors were NOAA scientists Andrew L. Mason and J. Christopher Taylor. The study concludes that the oil and gas releases at the site are coming from multiple wells, contradicting Taylor Energy’s explanation that it’s rising from oil-soaked sediment. NOAA and its federal partners are in the early stages of the process to assess damages “to determine if public natural resources have been harmed by the oil and gas release.” An assessment of harm related to the BP oil spill in 2010 led to fines. Hurricane Ivan caused 80-foot waves that led to the walls of the canyon giving way, resulting in a mudslide that chopped down Taylor Energy’s oil platform in 2004. The event buried the broken wells under more than 100 feet of sediment. According to early federal estimates, the sediment is saturated with 97,000 to 346,000 gallons of oil.
Hidden oil spill: New study contradicts owner’s claims (AP) — A new federally led study of oil seeping from a platform toppled off Louisiana’s coast 14½ years ago found releases lower than other recent estimates, but contradicts the well owner’s assertions about the amount and source of oil. Oil and gas have been leaking into the Gulf of Mexico since a subsea mudslide caused by Hurricane Ivan on Sept. 15, 2004, knocked over a Taylor Energy Co. production platform, which dragged and broke a bundle of well pipes. Taylor capped nine wells but said it couldn’t cap 16. The company contends oil sheens on the water’s surface indicate there’s only a dribble of 2.4 to 4 gallons (9 to 15 liters) of oil and gas a day. Taylor Energy, which is fighting a federal order to stop the seepage, also says any oil rising from the site is from oil-soaked sediment and any gas is produced by living organisms. “The results of this study contradict these conclusions,” said the report paid for by the federal Bureau of Safety and Environmental Enforcement, which oversees offshore drilling, and written by two National Oceanic and Atmospheric Administration scientists and one from Florida State University. Taylor said in an emailed statement that it wants verifiable scientific data about the leak and a scientifically and environmentally sound solution. The company has said remaining pipes are buried under so much oily and treacherous silt that stopping any leaks would do more environmental damage than letting them be. No coastal environmental damage has been reported from the ongoing seepage, unlike the 2010 Deepwater Horizon oil spill, an outside scientist said. The BP spill oiled at least 400 square miles (1,000 square kilometers) of sea floor and 1,300 miles (2,000 kilometers) of shoreline from Texas to Florida, killing thousands of birds and contributing to dolphin deaths for years. The study’s authors figure that the total released each day from the Taylor site could have been as much as 4,500 gallons (17,000 liters) a day. They used sonar and a newly developed “bubblometer” to measure oil and gas bubbles rising through the water. These are based on direct measurements, while previous estimates have relied on satellite and remote sensing of the sheen of oil resulting from the seep, Chris Taylor, of NOAA’s National Centers for Coastal Ocean Science in Beaufort, North Carolina, said Friday. The figure is a conservative one, the report said.
Oil Leak Update: 1000x Worse Than Rig Owner Claimed, Still Going After 14 Years - The federal government is looking into the details from the longest running oil spill in U.S. history, and it's looking far worse than the oil rig owner let on, as The New York Times reported. The oil spill in the Gulf of Mexico received little public attention when it happened in September 2004, but it has been steadily leaking as much as 4,500 gallons a day, not three or four gallons per day as Taylor Energy Company, the rig owner, claimed, according to a new study by the National Oceanic and Atmospheric Administration (NOAA). And that's a conservative estimate, the report said. Oil and gas have been seeping out of the leak that started 12 miles off the Louisiana coast when an underwater mudslide caused pipes to rupture and a production platform to sink during Hurricane Ivan. Taylor successfully capped nine wells, but said it couldn't cap 16. Taylor Energy Company, which sold its assets in 2008, estimated that the leak has been minimal based on oil sheen on the surface of the water. The company argued that between 2.4 to four gallons of oil dribble out per day when it asked a federal court to release it from a cleanup order. The company's executives asserted that oil plumes from the sea floor are from oil-soaked sediment around the sunken platform and that any rising gas is from living organisms, according to The New York Times."The results of this study contradict these conclusions," the report, issued on Monday by NOAA and Florida State University, concluded.In fact, the researchers directly refuted the sediment claim, stating that since the oil is only mildly biodegraded it cannot be from built-up sediment, as the AP reported. "While it is feasible that the heavily oiled sediments in and around the erosional pit could be contributing to oil in the water column, the chemical nature and volume of oil and gas measured precludes sediments from currently being the major source of oil to the marine environment," the report says.
Export terminal sales heat up Corpus Christi market - With the Port of Corpus Christi expected to become the nation’s top crude oil export hub over the next decade, now is a good time to buy or sell a crude oil export terminal along the South Texas waterway, industry analysts said. Flint Hills Resources has become the third company over the past two months to put a Corpus Christi export project up for sale. In a statement Wednesday, the Kansas company, controlled by Charles and David Koch, confirmed hiring J.P. Morgan to put its Ingleside Crude Oil Export Terminal on the market and explore options for a either a sale or a partnership. The proposed sale comes as Houston pipeline operator Enterprise Products Partners looks to sell its 50 percent stake in a recently completed crude oil export terminal along the Corpus Christi Ship Channel. The Washington private equity firm The Carlyle Group is also seeking to sell a 25 percent stake in a proposed crude oil export terminal on nearby Harbor Island. Houston oil company Occidental Petroleum sold its Ingleside Crude Oil Export Terminal to another Houston company, Moda Midstream, in August. John Coleman, an analyst at the global energy research Wood Mackenzie, said sellers are trying to take advantage of peak prices just before construction ends several pipeline and export terminal projects expected to make the Port of Corpus Christi the leading U.S. crude exporter, surpassing the Port of Houston. “This doesn’t take away from the thesis that Corpus Christi is prime to be a major crude export volume hub,” Coleman said. “It’s people getting ahead of that story and maximizing value for some of their non-core assets.”
More drilling, man camps coming to Permian Basin as oil prices rise --Permian Basin oil production continued to ramp up, as a multi-million-dollar joint venture brought a multi-year drilling campaign to one of the most prolific shale formations in southeast New Mexico and West Texas.Houston-based oil and gas financing company Development Capital Resources (DCR) and financial firm Ares Management Corporation announced the venture on Wednesday to bring an exploratory drilling program to the Wolfcamp formation.The U.S. Geological Survey announced in November 2018 that it found the one of the largest underground supplies of oil and gas ever in that formation – up to 46.3 billion barrels oil and about 281 trillion cubic feet of natural gas. The $165 million joint venture will fund the ongoing program, expected to continue through 2020 and take place throughout the formation which extends into southern Eddy County on its north end and south into Culberson and Reeves counties in Texas.“This transaction represents a continuation of our strategy of participating in energy sector joint ventures with quality operators in established basins,” said Ronnie Scott, president of DCR in a news release. “As the structure of energy joint ventures continues to evolve, DCR has worked to remain flexible in finding ways to assist operators to improve and develop their assets.” Gary Levin, partner at Ares said the move represents an ongoing effort for the firm to capitalize on the booming oil and gas industry in the Permian Basin region.
More oil and gas disposal wells to address growing waste in Permian - More disposal wells for the oil and gas industry are coming to the Permian Basin, as a Houston-based company looked to expand its facilities in West Texas. Milestone Environmental Services announced Wednesday that it acquired three leases and four injection permits in Howard County, Texas. The purchase added 150,000 barrels of daily injection capacity to the company’s assets, allowing it to combine receiving points and injection wells into a “single, integrated production waste management network,” in the northern Midland Basin, read a Milestone news release. More: Study: New Mexico loses on federal oil and gas leases, industry calls for quicker approvals The move was intended to strengthen Milestone’s focus on addressing waste streams in the Permian, said Milestone Chief Executive Officer Gabriel Rio. “Water disposal infrastructure is a valuable and natural complement to our existing business, which builds on our deep injection experience, superior operating record, and blue-chip customer base,” Rio said. The company also broke ground on a slurry injection facility near Big Spring, Texas the release read, located about 8 miles north of the town on State Highway 87. The facility was expected to open by the of 2019, and will accept waste streams from drilling, completion and production including oil- and water-based muds. It will also accept drilling fluids, flowback, tank bottoms, dirty water and produced water. As with Milestone’s seven other slurry injection sites – located in the Permian, Eagle Ford and Haynesville shales – the Big Spring facility also provided washouts for trucks, and frac tanks. The Big Spring site was third new facility announced by Milestone this year in the Permian.
Drillers Using Fuel to Power Fracking Operations | Rigzone-- Thrifty drillers have found a new use for the glut of natural gas that’s sent prices for the fuel below zero in America’s biggest shale patch: Use it to power fracking operations. For decades, explorers have used massive diesel engines mounted on tractor-trailers to shoot a mixture of water, sand and chemicals down wells and blast open layers of oil-soaked shale rock. That’s changing now that soaring output has crushed gas prices, especially in West Texas’ Permian Basin, where the fuel is a byproduct of crude oil extraction. Explorers are switching to so-called e-fracking, using gas from their own wells to run turbines for electric motors that power drilling pumps. The move helps in two ways: It cuts about $1 million a month in fuel costs for a set of fracking equipment by 90%, according to Wells Fargo & Co., and it lessens the excess gas burned off at the well site, a practice environmental groups frown upon. Tudor Pickering Holt & Co. predicts electric pumps will represent about a third of the market in roughly the next five years, from about 3% now. The e-frac movement is “probably going to have some legs," Jud Bailey, a senior equity analyst at Wells Fargo in Houston, said in a phone interview. “It’s clearly a movement by some major operators to experiment with it,” though it’s not clear how quickly a shift would happen, he said. The savings could be a boon for an industry pressed to trim spending and return cash to investors amid crude-market volatility. Halliburton Co., the world’s biggest provider of fracking gear, and a unit of Royal Dutch Shell Plc are already taking advantage. Halliburton plans to deploy fleets -- the term for rigs, pumps and other equipment that’s generally brought by truck to the well site -- powered by electric motors in the third quarter. Shell subsidiary SWEPI LP signed an electric fracking equipment contract with U.S. Well Services Inc. in March, while oilfield service provider ProPetro Holding Corp. has said it plans to deploy two e-fracking fleets by the end of the year. A conventional fracking job involves using about 20 giant diesel-powered pumps, each the size of an 18-wheeler trailer. In e-fracking, a small-diameter gas pipeline shuttles the fuel from the well to a turbine powering an electric motor. Though the electric pumps are still mounted on trucks, they’re smaller than their diesel counterparts. Some e-frac models can carry two pumps, significantly reducing the number of trailers and traffic and lowering labor costs. They’re also more reliable than diesel engines, according to U.S. Well Services.
Feuding, $6B Texas land trust will consider C-corp conversion -- A multibillion-dollar Texas land trust mired in a hotly contested proxy fight will consider converting into a corporation to operate more like an oil and gas firm, as it tries to mollify dissident shareholder unhappy about how the trust and its operations are run. The 130-year-old Texas Pacific Land Trust holds about 900,000 acres in the heart of the booming Permian Basin — assets that have sent the value of the trust skyrocketing. The Dallas-based trust, established to dispose of the large landholdings of a defunct 19th century railroad, has an unusual structure dating back to the 1880s with a board operated by just three trustees who serve lifetime appointments.The proxy fight was triggered in March when one of the three died, creating a rare opportunity for hedge fund investors to attempt to pick the next trustee. The New York investment firm Horizon Kinetics, which owns nearly a quarter of the shares, is leading the efforts by dissident investors to get their own representative on the board, while pushing a potential switch from a trust to a corporate structure, which would include a larger board of directors and greater transparency to shareholders. The fight has devolved into a messy court battle in recent weeks with both sides accusing each other of fraud. The trustees on Monday offered what appears a compromise, announcing that they formed a conversion exploration committee to weigh the a potential switch from trust to corporation. The committee is made up of two of the existing trustees, their nominee for the third trustee and an investor of their choosing.
Fed Dallas report indicates pessimism in oil and gas industry - - Oil and gas companies in Texas are holding onto their cash as they ride out a wave of oversupply caused by uncertainty in international markets, according to a new report by the Federal Reserve Bank of Dallas. Production was flat last quarter in the oil and gas sector after three years of growth, and many companies expressed pessimism moving into the third quarter, the Dallas Fed said Wednesday. A third of companies surveyed by the Fed said they are lowering their spending forecasts for 2019, while 36% said they are sticking to their previous spending levels. The remainder said they were increasing spending, but companies' overall outlook on the future dropped sharply compared to the first quarter and uncertainty shot up to its highest level since 2017, the year that the Dallas Fed began indexing the companies' responses. The Dallas Fed surveyed 161 energy companies across Texas, northern Louisiana and southern New Mexico for its latest survey, including exploration and production companies and oilfield services providers. Oilfield services companies were particularly pessimistic about the future, with many telling the Fed that trade disputes were hurting their bottom lines. "We see oversupply, oversupply and oversupply of both oil and gas," one oilfield services company said, "and lower demand because of the trade war and slowing economy in China." Below is a sample of what oil and gas companies told the Dallas Fed in its latest energy outlook report. The Fed doesn't name the companies that provide comments for its surveys.
Fracked Shale Oil Wells Drying Up Faster than Predicted, Wall Street Journal Finds – DeSmog - In 2015, Pioneer Natural Resources filed a report with the federal Securities and Exchange Commission, in which the shale drilling and fracking company said that it was “drilling the most productive wells in the Eagle Ford Shale” in Texas.Its Eagle Ford wells, Pioneer’s filing said, were massive finds, with each well able to deliver an average of roughly 1.3 million barrels of oil and other fossil fuels over their lifetimes.Three years later, The Wall Street Journal checked the numbers, investigating how those massive wells are turning out for Pioneer.Turns out, not so well. And Pioneer is not alone.Those 1.3 million-barrel wells, the Journal reported, “now appear to be on a pace to produce about 482,000 barrels” apiece — a little over a third of what Pioneer told investors they could deliver.In Texas’ famed Permian Basin, now the nation’s most productive shale oil field, where Pioneer predicted 960,000 barrels from each of its shale wells in 2015, the Journal concluded that those “wells are now on track to produce about 720,000 barrels” each.Not only are the wells already drying up at a much faster rate than the company predicted, according to the Journal’s investigative report, but Pioneer’s projections require oil to flow for at least 50 years after the well was drilled and fracked — a projection experts told the Journal would be “extremely optimistic.” And while Pioneer has become one of the most active drillers in the Permian, it’s hardly alone in booking projections that the Journal found were dubious.
Why rapid shale production is a perk --Since the early days of shale oil and gas production, some analysts have expressed alarm about the rapid decline that those wells experience, suggesting either that this will harm shale’s financial viability and/or lead to an early peak and decline in overall production. But this attitude fails to acknowledge the benefits of producing a resource rapidly. It is true that it seems inefficient to install capacity that will quickly be underutilized. No one builds a refinery that will see its utilization drop to 20 percent in a few years. But that is the nature of producing fluids; a field can be designed to produce at a constant rate, but only by offsetting the decline in individual well production, whether by enhanced recovery methods and/or additional drilling.The contrary interpretation of rapid decline is that it represents accelerated production and thus, accelerated revenue accrual. Investment depends on capital and so revenue must be discounted by something roughly akin to the borrowing rate or desired rate of return, usually from 10 to 15 percent per year. In simple terms, money sooner is better than money later, all else being equal.The first figure shows representative production curves for a conventional oil well, declining at 8 percent per year, and a shale well whose production drops 65 percent in the first year but flattens out thereafter. In each case, the total production (over eleven years) is about one million barrels. Considering the discounted cash flow, or revenue which is discounted by 12 percent per year from the initial year, the difference becomes a bit more clear. The second figure shows the discounted revenue for the same wells from 2019 to 2030. The shale well’s front-loading of revenue is clear and financially valuable; total net present value is $36 million versus $29 million for the conventional well in this example. There is another, somewhat speculative, benefit that shale producers are better positioned to exploit: the impact of supply disruptions. Although all commodities suffer from volatile prices usually due to influences that are not predictable in the medium term, like severe or beneficial weather, the oil industry is particularly prone to fluctuations that persist for a time. As the figure below shows, the Arab Spring in 2011 disrupted Libyan production and tighter sanctions on Iran in 2012 caused its production to drop. While there were offsetting factors, incidents such as this increase the probability that prices will be elevated for a period of several years.
Report: Series of failures led to deadly leak at Texas plant — A series of failures, including flawed equipment and inadequate safeguards, helped cause a 2014 poisonous gas leak that killed four workers at a Houston-area chemical plant, according to a federal agency’s final report on the deadly accident.Four employees at the now-closed DuPont chemical plant in LaPorte, Texas, died in the release of methyl mercaptan — a chemical used in the manufacture of insecticide and fungicide.The chemical began leaking from a valve around 4 a.m. on Nov. 15, 2014, in a unit at the plant in La Porte, about 20 miles (32.19 kilometers) east of Houston. Killed in the accident were Crystle Wise, Wade Baker and brothers Robert and Gilbert Tisnado. A fifth worker was injured.Various safety management system deficiencies, including problems with troubleshooting operations, safe work practices, toxic gas detection and emergency response, contributed to the severity of the incident, the U.S. Chemical Safety Board said in its report, issued Tuesday.“Our investigation revealed a long chain of failures which resulted in this fatal event, including deferring much needed process improvements; improvements that could have prevented the toxic release,” said Kristen Kulinowski, the safety board’s interim executive authority. In a statement, Corteva, a spinoff of DuPont’s agriculture division, said while it disagrees with some of the safety board’s findings, it values the agency’s perspective and will carefully consider the recommendations.“Our deepest sympathies remain with the families and friends of our four colleagues who lost their lives on November 15, 2014. We are committed to maintaining a safe working environment at our facilities and will work to continuously improve our safety systems,” Corteva said. In its final report, comprised of recommendations that are not mandatory, the safety board said the chemical leak resulted from a long “chain of implementation failures,” including the flawed design of piping at the plant and ineffective building ventilation that had been identified five years before the leak but was never fixed.
Planned pipeline route to cross Tyler County -- Plans for a natural gas pipeline projected to cross Tyler County indicate it will be completed in early 2021. The project, which is dubbed the CJ Express, is an expansion project, which according to Midcoast Energy, LLC, is designed to provide the transportation of natural gas supplies from East Texas to the Houston Ship Channel and Gulf Coast markets. The pipeline will include up to 107 miles of 36-inch pipe and run through six counties, from Shelby County into Hardin County. It will also include a 39,000-horsepower compressor station, according to a Midcoast news release. When it was first announced last year, the route of the pipeline was to include up to 150 miles, commencing near Carthage in Panola County, but the most recent information available confirms a shorter projection. The Houston-based Midcoast secured an undisclosed anchor shipper for the project in April, according to a news release. The most recent project summary states that construction is estimated to begin later this year, with right of way acquisition having already begun. In the state of Texas, pipelines are not required to be permitted before being built, according to the State Railroad Commission. The Commission has authority over intrastate pipelines for safety and rate regulation but does not have the authority with respect to eminent domain powers.
Kinder Morgan wins Texas court challenge, removing obstacle to $2 billion gas pipeline – (Reuters) - Kinder Morgan Inc can begin work on a $2 billion natural gas pipeline without having the Texas energy regulator approve its proposed route, a state judge ruled on Tuesday. The decision removes a challenge to the state’s licensing process that lets gas pipeline companies determine their own route and acquire land without a landowner’s consent. Texas is in the midst of a pipeline-construction boom with multibillion-dollar projects under way to bring shale oil and gas to market. A Travis County District court ruled the Texas Railroad Commission, the state’s oil and gas regulator, is not required to set standards for routing the pipelines or private land-takings, Judge Lora Livingston wrote on Tuesday. The state allows gas pipeline operators that qualify as utilities to use eminent domain to take land for the public good. “The court finds no authority for the proposition that the legislature has granted authority to the Commission to oversee the rights granted,” she wrote. She also granted Kinder Morgan’s request to dismiss it from the lawsuit. A group of Texas landowners and officials had sued to block construction, arguing the oil and gas regulator failed to seek public input or properly supervise the routing of Kinder Morgan’s Permian Highway Pipeline, which will carry 2 billion cubic feet per day of natural gas roughly 400 miles (645 km) from West Texas to the U.S. Gulf Coast. Kinder Morgan had asked the court to throw out the landowners’ lawsuit, arguing it was up to the state legislature, not the court, to change the pipeline permitting process. “The court’s finding validates the process established in Texas for the development of natural gas utility projects,” Tom Martin, a Kinder Morgan executive, said on Tuesday.
Water Woes Could be a Boon for Pipeline Companies - For companies that haul oil and natural gas, the next big thing may be dirty water, according to Jefferies Group LLC. As booming U.S. oil production unleashes a torrent of contaminated water that rises to the surface with crude, pipeline operators may be in the best position to harness those flows and expand into the water-handling business, said Peter Bowden, Jefferies’ global head of energy investment banking. In the Permian Basin alone, the combination of saltwater from wells and water used in the fracking process is expected to be three times larger than crude output by 2023, according to Jefferies. Pipeline owners already are adept at transporting oil and gas, so adding water to their portfolios may be a logical next step, Bowden said Friday at an Oilfield Water Connection conference in Houston. “Water is going to offer them more growth than their core business,” he said. “There’s a case that the public midstream companies should be doing all three streams everywhere they can.” There have been more than $2.5 billion of Permian-focused water deals so far this year, according to Gabe Collins, a fellow at Rice University’s Baker Institute. Many of the transactions have involved private-equity firms, he said during the same conference.
What is the Halliburton loophole? - In 2005, the 109th United States Congress passed the Energy Policy Act. Like any major bill, its provisions ranged from the useful (like authorizing tax credits for alternative energy producers), the questionably effective (like extending daylight savings time for a few weeks), and the downright counterproductive (like incentivizing the use of coal as an energy source). The act also included an exemption that fell firmly in the latter category that would later become known as the Halliburton loophole. This loophole amended the Safe Drinking Water Act — a major tool the EPA uses to keep our drinking water clean — to provide an exemption for the fluids used in hydraulic fracturing (or fracking). As a result, the EPA does not have the legal authority to regulate fracking fluids. This exemption came to be as a result of a recommendation by the Energy Task Force, an organization formed by then-President George Bush and headed by then-Vice president Dick Cheney, former CEO of Halliburton, which coincidentally also first patented fracking and is the largest provider of fracking services in the world. Hence, the Halliburton loophole.
Wisconsin frac sand mines sit dormant as competition grows (AP) — Wisconsin’s frac sand industry is grappling with several idled mines as the sector faces increased competition in Texas and Oklahoma. Areas of western and central Wisconsin saw heavy investment from 2011 to 2014, when sand mines, processing plants and rail loading facilities were emerging throughout the area. Since then, Superior Silica Sands has idled three sand mines in Wisconsin, while Hi-Crush is halting production at its mine in Augusta. Syverson told the Eau Claire Leader-Telegram that demand remains strong, but energy companies have built mines closer to oilfields in Texas and Oklahoma. The production expansion has lowered prices and allowed oil drillers to purchase local sand for less than the cost of shipping it from Wisconsin, he said. “The capital has already been invested in Wisconsin, so the real questions are how much of this sand will still be needed and how many of these higher-cost operations that are taken off line will never come back,” he said. Syverson also argued that companies in the Permian Basin in West Texas and southeast New Mexico are moving toward finer grain sand. It’s lower quality but more plentiful than the northern white sand that’s produced in Wisconsin. “Wisconsin sand is still the Cadillac of all sands, but these companies in the Permian Basin are saying they can make more money driving a Chevy than a Cadillac,” Syverson said. “It’s all a cost-benefit analysis.”
Green Nimbyism: Frac Sand Mining Near Zion National Park – Dean Baker - Last summer, my wife and I moved out to southern Utah. . Our new home, Kanab, is located between Grand Canyon and Zion national parks, with the Escalante Grand Staircase National Monument just to our east. The area gives us endless opportunities for exploring and hiking. It now looks like our plans are in danger. A start-up mining company, Southern Red Sands LLC, has plans to set up a frac sand mining operation in the hills just above the city. This facility would both mine and process sand to be used in hydraulic fracturing or fracking sites in various parts of the West. Apparently, the sand in the hills above Kanab is very well suited for fracking. It also is much closer to the western fracking sites than the current sources, which are mostly located in Wisconsin and Texas. For this reason, Southern Red Sands sees a real bonanza here. Many of the people in the town see it differently. Kanab’s primary industry is tourism, which depends both on its proximity to the national parks and monuments, and its own natural beauty. Its motto is “magically unspoiled.” That doesn’t fit well with an industrial sand mining plant located on the city’s outskirts. The mine and plant will be capable of operating around the clock. The noise is likely to carry for many miles on an otherwise quiet and beautiful plateau. Apart from its impact on Kanab, Southern Red Sands has picked a location for its mine that it is just over 10 miles from Zion National Park, a place of extraordinary beauty that people travel from all over the world to see. A sand frac mine and processing facility is going to make this place considerably less appealing for decades into the future.Suppose the people of Kanab are successful and can keep the sand frac mine from being located here, won’t it just mean that some other community has to deal with the noise and pollution of a sand frac mine? That is possible, but stopping the sand frac mine next to Kanab is not just about preventing a threat to the local environment. The reason for locating the mine and processing facility near Kanab is that it is the lowest cost place to mine frac sand. Just as was the case with the Keystone XL Pipeline and tar sands oil, if this mine is blocked, it will raise the cost of frac sand, which will raise the cost of fracking. Given the damage that fossil fuel burning is doing to the planet, we should all want to raise the cost of fracking as much as possible.
Colorado changes its regulatory structure for oil and natural gas production – EIA - In mid-April, Colorado’s governor signed a law changing the way the state regulates its oil and natural gas industry. Senate Bill 181, also known as Protect Public Welfare Oil and Gas Operations, amends the Oil and Gas Conservation Act and gives counties and municipalities increased regulatory authority over oil and natural gas development in their jurisdictions. In 2018, Colorado produced 460,000 barrels per day of crude oil and 5 billion cubic feet per day of natural gas gross withdrawals, accounting for 4% and 5%, respectively, of the national totals. Colorado’s main oil- and natural gas-producing regions are the Denver Basin in northeastern Colorado and the Piceance Basin in western Colorado. The San Juan Basin that stretches across the Colorado-New Mexico border was once a major natural gas-producing area, but output from that area has declined in recent years. As of the end of May 2019, Colorado had about 40,000 active oil and natural gas wells. More than one-third of those wells were located in Weld County, which stretches from the Denver metropolitan area to the Wyoming border. Other counties that have at least 3,000 active wells include Garfield, on Colorado’s western border; Yuma, on the eastern border; and La Plata, on the southern border. EIA’s Energy Mapping System provides the locations of each of these wells, based on data from Drillinginfo, Inc. Under the new law, local governments have the authority to regulate the location of new oil and natural gas production facilities as well as the effects of oil and natural gas production, such as land use and surface impacts, including noise. The law also gives local governments the authority to inspect oil and natural gas facilities; impose fines for leaks, spills, and emissions; and impose fees to fully cover regulatory costs. The law directs Colorado’s Oil and Gas Conservation Commission (COGCC) to create rules to ensure the structural integrity of wells, require certification of employees, increase public disclosure of well data, and specify when inactive infrastructure must be re-inspected before being put back into use. The COGCC is also directed to adopt rules that require producers to consider alternative locations for proposed oil and natural gas facilities that are near populated areas.
US oil, gas rig count rises by 11 on week to 1051: S&P Global Platts Analytics — The US oil and gas rig count rose by 11 week on week to 1,051, S&P Global Platts Analytics said Thursday, as the rig count continued a familiar seesaw pattern that has gradually brought it down by nearly 200 rigs since late 2018. Oil-directed rigs rose by five to 837 for the week ended June 26, while natural gas rigs were up four to 208. A rise of two rigs was posted for categories not specified for oil or gas.This week's 1,051 total represents a decline of nearly 100 rigs since the start of this year and a fall of 182 since the recent peak of 1,233 in mid-November 2018, a time when the price of WTI was dropping from October highs in the mid-$70s/b. The tendency of the rig count since then has been to seesaw up and down while gradually dropping more rigs over time. Click here for full-size image. WTI has also had its ups and downs since late 2018, but was just shy of $60/b Thursday morning.Among the larger basins, the Permian Basin of West Texas/New Mexico and the Eagle Ford Shale of South Texas each rose three rigs. On Thursday, the Permian totaled 437 rigs and the Eagle Ford, 88.The SCOOP-STACK of Oklahoma rose two rigs to 83, while the "Other Basins" category, which accounts for all other rigs outside the eight largest named basins, was up eight to 226. In both the Wet and Dry Marcellus Basins, the number of rigs remained the same as last week -- 29 for Dry, 22 for Wet. Also unchanged week on week was the Williston Basin of North Dakota/Montana at 62. The biggest decline of the week, down three rigs to 55, was seen in the Haynesville Shale of East Texas and Northwest Louisiana.Otherwise, the Denver-Julesburg Basin mainly in Colorado, and the Utica shale largely in Ohio, dipped by a rig each. That left the D-J with 31 rigs and the Utica with 18.In ad dition, the number of permits for the week ended June 26 was up 61 to 1,353.
Chaco drilling moratorium included in spending measure — U.S. land managers would be prohibited from using federal funds to approve oil and gas projects near Chaco Culture National Historical Park for the next year under a measure approved by the U.S. House. Democratic Congressman Ben Ray Lujan of New Mexico included the language in a spending package that cleared the chamber Tuesday. The language aims to codify a commitment from Interior Secretary David Bernhardt to defer leases within 10 miles (16 kilometers) of the park while regulators prepare a new resource management plan. Legislation that calls for permanently banning drilling on federal lands within the buffer is pending. It would not affect land owned by the Navajo Nation or individual tribal members. Tribes and environmentalists have been advocating for more protections, saying the region is full of culturally significant sites.
Tribes to get more documents sought in Dakota Access lawsuit (AP) — A federal judge has ordered the Army Corps of Engineers to turn over more documents that four Native American tribes say could bolster their lawsuit seeking to shut down the Dakota Access pipeline in North Dakota.U.S. District Judge James Boasberg directed the federal agency to give up the documents by Wednesday, the Bismarck Tribune reported.The Standing Rock, Cheyenne River, Yankton and Oglala Sioux tribes accused the Corps in February of withholding dozens of documents that they say could show how the pipeline may threaten the Lake Oahe reservoir on the Missouri River, which serves as their water source.Fears of an oil spill into the river sparked massive protests in 2016 and 2017, drawing thousands of pipeline opponents to North Dakota.Federal officials had turned over some documents, but said requests for dozens more were vague or too broad.The tribes accused the Corps of producing a “fragmented and incomplete record” to justify its approval of the $3.8 million pipeline that began carrying oil from North Dakota to Illinois in June 2017. Last week, the pipeline’s operator, Texas-based Energy Transfer Partners, announced plans to double its capacity.It’s unclear how useful the documents will be to the tribal case.Boasberg gave the tribes an Aug. 16 deadline to submit their final arguments. The case won’t be resolved for several months after the filing. The Standing Rock Sioux tribe plans to request a full environmental impact study of the pipeline and for the pipeline’s operations to be shuttered during the review, according to Jan Hasselman, an attorney for environmental law organization Earthjustice.“In the meantime, we’re gearing up for an election,” Hasselman said. “A new administration could well undo the Trump (administration) permits.”
Physicians call for halt to natural gas fracking projects - Two physicians groups have issued a 145-page report calling for an immediate halt to projects involving hydraulically fracked natural gas in the Northwest. “Fracked Gas: A Threat to Healthy Communities” identifies six major projects, including a proposed $2 billion plant at the Port of Kalama to convert natural gas into methanol for export to Asia. Hydraulic fracturing is a technique for extracting oil or gas from rock by injecting a high-pressure mix of water, sand or gravel, and chemicals. Physicians for Social Responsibility in Washington and Oregon released their report Wednesday. The report comes as the Port of Vancouver weighs adopting a policy barring the port from pursuing new bulk crude oil or coal terminals. Environmentalists advocating action to combat climate change have urged the port to expand that draft policy to encompass natural gas. Business organizations, including the Greater Vancouver Chamber of Commerce, have cautioned against adopting policies that could have “unintended consequences.” The report opposes any expansion of facilities to transport, store, process or export fracked gas in the Northwest. Dr. Patricia Kullberg, who spent 20 years as medical director of the Multnomah County Health Department in Oregon, is one of the report’s nine authors. Kullberg said about two-thirds of the natural gas coming into Oregon is fracked and has been mixed with conventionally drilled natural gas. “The gas industry would like very much to turn the Pacific Northwest into a hub for processing, refining, liquefying and exporting natural gas,” Kullberg said. “We hear a lot about the potential economic benefits of these facilities, but we hear very little about the economic cost,” she said, mentioning medical bills, environmental degradation and negative effects to fisheries, tourism and recreation.
Jordan Cove LNG backers claim high support from landowners for pipeline -As federal regulators take several rounds of public comments this week in Southern Oregon on the massive Jordan Cove Energy Project, backers are claiming they’ve made major headway addressing one of regulators’ biggest concerns.Pembina Pipeline Corp, the Canadian company that is proposing a liquefied natural gas export terminal in Coos Bay, says it has secured voluntary easement agreements with 82 percent of the individual landowners along the 229-mile route of the terminal’s proposed feeder pipeline, which would run from an interstate gas hub in Klamath County to Coos Bay.As with most issues surrounding the controversial project, those numbers are disputed, reflecting the ongoing battle between the project’s backers and opponents to control the narrative around public support as both state and federal regulators get closer to important permitting decisions.Officials from the Federal Energy Regulatory Commission are holding four tightly-controlled public comment sessions in Southern Oregon this week. It will be the last round of public feedback on the Draft Environmental Impact Statement issued by the commission’s staff in late March. The commission is expected to render its decision on the project early next year. If Pembina’s landowner numbers are accurate, as the company insists, it marks significant progress from the small percentage that had signed easement agreements when regulators denied the project a license in 2016. That lack of support proved a decisive factor. At that time, FERC decided the previous owner of the project had not demonstrated sufficient public need for the project to overcome the negative impacts on landowners along the pipeline route.
Oregon Governor Kate Brown Signs Five-Year Fracking Ban Bill -- Oregon Governor Kate Brown signed into law a five-year ban on fracking for oil and gas exploration and production on June 17. HB 2623, sponsored by Rep. Julie Fahey and Sen. James Manning, received final approval by the state legislature on June 5. The bill previously banned fracking for 10 years, but the Senate reduced that ban to five years. The House concurred in Senate amendments and repassed the bill. The votes were: Ayes, 40; Nays, The controversial process to extract oil and gas has poisoned drinking water and caused widespread health problems in other states, according to fracking opponents. It has has been banned in Vermont, New York, Maryland, and Washington. Food & Water Watch was the first national organization to call for a ban on fracking everywhere – and has helped mobilize opposition to fracking in Oregon, California and across the country. “This is a huge victory for Oregon communities and the growing national movement against fracking,” said Food & Water Watch Regional Organizing Manager Thomas Meyer in response to the governor signing the bill into law. “Fracking should be banned everywhere, for the sake of our health, our water, and the climate we all depend on. Passing this bill is a big step towards achieving that goal.”
Inslee unveils plan to fight fossil fuel pollution, ban fracking --Washington Gov. Jay Inslee (D), a 2020 presidential candidate, unveiled on Monday his plan for tackling fossil fuel pollution, including ending subsidies for oil and gas companies and phasing out fracking. The proposal, Inslee’s fourth plan for addressing climate change, calls for taking on the oil and gas companies he calls “the greatest and most powerful special interests that are holding back our clean energy future.” Even as candidates compete to showcase their environmental credentials, Inslee’s latest plan stands out in its attempt to tackle the source of emissions from what is now the largest producer of greenhouse gas emissions: transportation. “To build a clean energy economy, we must transition off of fossil fuels, and we will need a President who is willing to stand up to the fossil fuel corporations,” Inslee said in a statement on the plan's release. The White House hopeful's plan would eliminate the nearly $20 billion in yearly subsidies to oil, gas and coal companies. In additional to baring drilling on federal lands and offshore areas, Inslee’s plan specifically targets fracking--a controversial process of pushing water and other chemicals deep underground to push oil out of rock crevices and bring them to the surface. The process has been associated with contaminated drinking water and credited with helping the U.S. increase its domestic crude supply. Inslee says he would work with Congress to ban fracking, including limitations on air and water pollution that could stem from the practice. He also calls for a “G.I. Bill for Energy Workers" to help workers transition from the oil industry.
US Oil Production Hits New All Time High - U.S. crude oil production reached a new all time high of 12.2 million barrels per day (MMbpd) in May. That’s according to the American Petroleum Institute’s (API) latest monthly statistical report, which revealed that Texas crude oil output exceeded 5 MMbpd last month for the first time. “These milestones were achieved despite less drilling activity, which is testament to productivity but also pipeline infrastructure expansions that helped enable drilled but uncompleted wells to come to market,” the API report stated. Last month also saw record U.S. petroleum exports at 8.1 MMbpd and a U.S. crude oil inventory increase of 10.5 percent over May 2018, the report revealed. In its second quarter industry outlook report, released on the same day as the latest monthly statistical report, the API said the United States is poised for a continuation of record oil production. This report also highlighted that while U.S. crude oil export capacity has been “sufficient”, some capacity estimates suggest “some urgency to plan forward”. “The historic milestones in U.S. oil production this quarter underscore the necessity of pipeline infrastructure to continued U.S. energy leadership,” API Chief Economist Dean Foreman said in an organization statement. “With the surge expected to continue, our focus must now shift toward ensuring the necessary infrastructure and logistics are in place to support growth in providing energy to consumers, as well as exports,” he added. “If current predictions by the U.S. Energy Information Administration and others prove correct, the U.S. will likely push up against the lower bound of existing crude oil export capacity by the end of this year, which creates urgency around building new infrastructure to ensure we don’t miss out on this rare opportunity,” Foreman continued. Earlier this month, Rystad Energy forecasted that U.S. crude output would hit 13.4 MMbpd by December and average 12.5 MMbpd in May.
U.S. refinery capacity reaches record high at the start of 2019 -- As of January 1, 2019, U.S. operable atmospheric crude oil distillation capacity was a record-high 18.8 million barrels per calendar day (b/cd), an increase of 1.1% since the beginning of 2018, according to EIA’s annual Refinery Capacity Report. The previous high of 18.6 million b/cd was set at the beginning of 1981. U.S. annual operable crude oil distillation unit (CDU) capacity has increased slightly in six of the past seven years. Operable capacity includes both idle and operating capacity. Barrels per calendar day reflect the input that a distillation unit can process in a 24-hour period under usual operating conditions, taking into account both planned and unplanned maintenance. Barrels per stream day reflect the maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal crude oil and product slate conditions with no allowance for downtime. Stream day capacity is typically about 6% higher than calendar day capacity. . Secondary refining capacity, including thermal cracking (coking), catalytic hydrocracking, and hydrotreating and desulfurization, increased by less than 1% from year-ago levels. The number of operable refineries remained at 135 on January 1, 2019; however, similar to last year’s report, four refineries previously considered separate in survey data were merged into two. Marathon Petroleum Corporation acquired 10 refineries from Andeavor in 2018, making it the largest refiner in the United States. Marathon’s refineries collectively have an operable capacity of slightly more than 3.0 million b/cd, 16% of total U.S. refining capacity and about 800,000 b/cd more capacity than the second-largest refiner, Valero Energy Corporation. Refinery runs and crude oil production both continued at record levels in the United States in 2018. U.S. crude oil production, which averaged 11.0 million barrels per day (b/d) in 2018, has more than doubled since 2009. Crude oil inputs to refineries averaged 17.0 million b/d in 2018 compared with 14.3 million b/d in 2009. Since 2009, operable refinery crude oil distillation capacity increased 1.2 million b/cd, and utilization rose from 83% in 2009 to 93% in 2018, resulting in the 2.6 million b/d increase in crude oil inputs. During the same period, U.S. crude oil imports decreased by 1.3 million b/d, and U.S. crude oil exports increased by 2.0 million b/d, leading to an overall decrease in net imports of 3.3 million b/d.
Early Shale Optimist Sees Another Decade of U.S. Supply Growth -- The U.S. will account for almost a quarter of global oil and gas production by the early 2030s as the shale boom keeps on booming, according to the head of Rystad Energy. Output from shale including crude oil, condensate and natural gas liquids could climb to as high as 25 million barrels a day, Jarand Rystad, chief executive officer of the research and intelligence company, said in an interview in Kuala Lumpur. The U.S. will likely make up about 23% of global liquids production and pump 27% of the world’s gas by then, he said. Part of the reason for the expected growth is that companies are getting better at hydraulic fracturing, the process of pumping a mixture of water and sand into a horizontal well to create millions of tiny cracks in the shale rock that allow oil and gas to flow to the surface. Frackers are using more sand, creating more cracks and boosting the productivity of each well, Rystad said. “It’s about sand, horsepower and water injection,” he said at the Asia Oil & Gas Conference. “Those three parameters are what’s driving activity levels, and those are three times higher today than they were back in 2014.” Rystad has been a staunch believer in U.S. shale since early this decade when many analysts and OPEC ministers were unconvinced that a natural gas drilling revolution would translate to a surge in oil output. He recalled being labeled “ridiculously too aggressive” in 2012 when projecting shale crude production would grow fourfold to 4 million barrels a day within four years. The forecast was too low and shale has transformed the nation into the world’s biggest producer.
Bring on Higher Oil Prices: They’ll Boost the US Economy. Powell Sees it Too. A New Experience for the US - Wolf Richter: Powered by the iffy situation in the Persian Gulf, the Strait of Hormuz, and the Gulf of Oman, with attacks on tankers and now the downing of a US drone, the price of crude oil got a little nervous in recent days. WTI jumped about 6% today to over $57 a barrel. But this was just a minor uptick in the overall scheme of things: The US, which has become the largest oil producer in the world, is in the middle of its second oil bust in five years:These two oil busts are largely a consequence of surging US crude oil production. During the oil bust of 2014-2016, the price of WTI collapsed by over 75%, careening from $107 per barrel to a low of $27 per barrel in 18 months, before starting to rebound. In the process, a slew of oil-and-gas drillers filed for bankruptcy. Production fell sharply from early 2015 through much of 2016, but then new money from Wall Street appeared, and production began to soar again, hitting new records all along the way.Shale wells produce a variety of liquid hydrocarbons (they also produce gaseous hydrocarbons which are not included here). This production of crude oil and petroleum products soared from just over 7 million barrels per day (bpd) in 2010 to 16.6 million bpd currently, according to EIA data: This surge in production comes even as shale oil-and-gas drillers have essentially been cash-flow negative in their entire history, drilling more and more of their investors’ funds forever into the ground. But so far so good — as long as it’s not my money.The US used to be the largest net importer of crude oil and petroleum products in the world. But surging production in the US has slashed imports. And recently exports have surged, and the trade in crude oil and petroleum products is now nearly balanced between the US and the rest of the world. And the net imports are heading toward zero – the point where the US imports as much as it exports.In February, net imports were down to just 176,000 barrels a day, the lowest in the EIA data going back to 1971.
Energy products are key inputs to global chemicals industry --The industrial sector of the worldwide economy consumed more than half (55%) of all delivered energy in 2018, according to the International Energy Agency. Within the industrial sector, the chemicals industry is one of the largest energy users, accounting for 12% of global industrial energy use. Energy—whether purchased or produced onsite at plants—is very important to the chemicals industry, and it links the chemical industry to many parts of the energy supply chain including utilities, mines, and other energy product manufacturers.The chemicals industry is often divided into two major categories: basic chemicals and other chemicals. Basic chemicals are chemicals that are the essential building blocks for other products. These include raw material gases, pigments, fertilizers, plastics, and rubber. Basic chemicals are sometimes called bulk chemicals or commodity chemicals because they are produced in large amounts and have relatively low prices. Other chemicals—sometimes called fine or specialty chemicals—require less energy to produce and sell for much higher prices. The category of other chemicals includes medicines, soaps, and paints. The chemicals industry uses energy products such as natural gas for both heat and feedstock. Basic chemicals are often made in large factories that use a variety of energy sources to produce heat, much of which is for steam, and for equipment, such as pumps. The largest feedstock use is for producing petrochemicals, which can use oil-based or natural-gas-based feedstocks.In terms of value, households are the largest users of chemicals because they use higher value chemicals, which are often chemicals that help to improve standards of living, such as medicines or sanitation products. Chemicals are also often intermediate goods—materials used in the production of other products, such as rubber and plastic products manufacturing, agricultural production, construction, and textiles and apparel making.
How Long - New Western Canadian Crude Pipelines Crawl Toward Completion -- For more than six months now, the provincial government of energy-rich Alberta has been trying to mitigate the sometimes painful effects of having too little pipeline capacity to move crude oil to market. They’ve mandated production cuts by larger producers, contracted for crude-by-rail (CBR) services — then moved to undo those deals — and pressed the Canadian government to help advance long-delayed pipeline projects. Things appear to have reached a semi-happy medium for now: the price spread between Western Canadian Select (WCS) and West Texas Intermediate (WTI) has narrowed, but remains wide enough to justify sending crude out by train. Still, it’s clear that the big tranches of new pipeline capacity many had hoped would be built or at least under construction by now face more hurdles. How long will Alberta producers need to wait for unfettered pipeline access to the U.S. Midwest and Gulf Coast and to Canada’s West Coast? Today, we provide an update on WCS pricing, Alberta crude-by-rail, and the key pipeline projects that never seem to get finished. It’s been an eventful period in Alberta’s oil patch, and an active time at the provincial government in Edmonton. As we said in Money Changes Everything back in early December 2018, then-Premier Rachel Notley announced that, starting on January 1, 2019, the Alberta Energy Regulator (AER) would institute mandatory production cuts for any producers in the province averaging 10 Mb/d or more of production over their highest six months in the previous year. The mandated reductions, which began at 325 Mb/d (or about 8% of total production) in January and have been ratcheted down since then (to 175 Mb/d — or about 4.5% of total production — in June and July), have had their desired effects, namely (1) to work down the crude oil inventories that had built up in Alberta due to takeaway constraints, and (2) to shrink the spread between WCS (the benchmark Western Canadian crude blend) and WTI, which last fall had ballooned to more than $40/bbl.
Alberta Hires CIBC for Crude-by-Rail Program-- Alberta’s new government plans to sell the leases and services the Canadian province has accrued to help companies ship oil out of the region. CIBC Capital Markets has been hired to help with the transaction. Jason Kenney, elected premier last month, campaigned on a platform that included getting rid of predecessor Rachel Notley’s crude-by-rail program, arguing that the business should be left to the private sector. The oil-rich province invested C$3.7 billion ($2.8 billion) in the plan. “According to industry forecasts and statements by producers, the future of crude-by-rail in Alberta is very bright – and will continue to be so, without government interference,” Energy Minister Sonya Savage said in a statement Thursday. Notley set up the rail program to help alleviate a glut caused by too much oil and not enough export pipelines, a situation that caused Canadian oil prices to collapse last year and prompted the government to impose mandatory production limits on large crude producers. Not all companies had the capital to invest in shipping crude by rail, she said at the time. Canada’s crude-by-rail shipments collapsed in February to the lowest in more than a year after government production limits caused heavy Canadian crude’s discount to benchmark futures to narrow so much that it made shipping by rail uneconomic. Since then, exports by rail have risen by more than 100,000 barrels a day to 236,000 in April, National Energy Board data show.
BP Signs On As Canada LNG Project Customer - BP Gas Marketing Limited has signed a binding liquefied natural gas (LNG) sales and purchase agreement (SPA) for deliveries from the proposed Woodfibre LNG Export facility near Squamish, British Columbia, project developer Pacific Oil & Gas Limited (PO&G) reported Wednesday. “We are honored to have BP as a foundation customer of our Woodfibre LNG project,” Ratnesh Bedi, PO&G president, said in a written statement. “BP is a global LNG portfolio player and a pioneer in the international LNG business. We look forward to providing BP with a consistent supply of flexible Canadian LNG that can displace more carbon-intensive fuels.” PO&G stated that the SPA specifies terms for the delivery of 0.75 million tonnes per annum (mtpa) of LNG over 15 years on a free on board basis, with first delivery anticipated in 2023. Moreover, the company reported that it is working on a deal with BP Canada Energy Group ULC under which BP Canada would provide gas transportation and balancing services to Woodfibre LNG over a 15-year term. PO&G plans to develop Woodfibre LNG at the site of a former pulp and paper mill approximately 43 miles (70 kilometers) north of Vancouver. The company stated that the facility will be capable of producing approximately 2.1 mtpa of LNG and offer 250,000 cubic meters of storage capacity. Canada’s National Energy Board has authorized the project to export LNG over a 40-year period, and provincial and federal governments as well as local First Nation have granted environmental approvals for the development, PO&G states on its website.
Canada Risks Becoming Banana Republic Over Energy - Canada risks becoming a “banana republic” for its restrictive energy policy and failure to attract new investment into the sector, according to a Calgary money manager. “We have had basically signs on our energy industry that Canada is closed for business,” Geeta Sankappanavar, co-founder of Grafton Asset Management, said Thursday at the Bloomberg Canadian Capital Markets conference in London. “Today we are in danger of becoming unfortunately a little bit like a banana republic on the energy side.” Sankappanavar, who says her firm has raised and deployed C$1 billion ($760 million) in the Alberta oil patch, blamed carbon taxes, falling oil prices and increased regulatory scrutiny under new federal government rules for contributing to what she calls an “awful” malaise in the sector. “It is a very, very dark and bleak place,” she said. “We have had significant regulatory and political challenges in our industry.” ‘Wasting Our Time’The money manager sees some room for optimism following the approval this week of the Trans Mountain pipeline expansion that would almost triple capacity on a line taking oil from Alberta to the Pacific Coast near Vancouver. More needs to be done, she said. “We are wasting our time” and at risk of becoming “violinists on the Titanic,” she said. Sankappanavar said Canada does offer some opportunities as a “deep value” play given the decline in asset values. The industry also needs to do a better job promoting the progress it’s made in reducing relative emissions and investing in renewable energy.
Mexico's oil regulator approves BP's offshore drilling plan - (Reuters) - Mexico’s oil regulator on Tuesday approved a $97 million (£76.4 million) plan for drilling in an offshore area operated by British supermajor BP in the southern Gulf of Mexico.The four-year exploration plan approved by the national hydrocarbons commission (CNH) covers a 700,000 square kilometre shallow water block, located north of the coast of Tabasco state.BP won the rights to drill last June, along with its partner French oil major Total.BP’s contract is one of over 100 awarded since a sweeping energy reform was finalised in 2014, championed by Mexico’s previous government in a bid to reverse years of declining crude production. The current government of President Andres Manuel Lopez Obrador has suspended all future auctions, favouring instead a larger role for national oil company Petroleos Mexicanos, known as Pemex.
Mexico's Pemex to stick to areas it knows best, pass on deepwater: CFO (Reuters) - Petroleos Mexicanos will focus on shallow water projects and onshore plays, and avoid investing in its deepwater riches for now, as the ailing Mexican state-run oil company seeks to turn around a 14-year slide in crude production, a top official said on Thursday. Chief Financial Officer Alberto Velazquez outlined the approach the state-owned oil company known as Pemex will take at a conference in the colonial city of Leon on Thursday. He emphasized that Pemex has no plans to invest in costly and technologically complex deepwater projects in the Gulf of Mexico, but will instead focus its exploration and production budget on the country’s shallow water and onshore potential. “We are not going to invest in those types of developments,” said Velazquez, referring to deepwater projects. The vast majority of Pemex’s current production comes from shallow water areas clustered around the southern rim of the Gulf of Mexico, off the coast of the states of Veracruz, Campeche and Tabasco. While the company has drilled wells and made discoveries in Mexican territorial waters in the deepwater Gulf, and has a joint venture partnership in one such project with Australia’s BHP Billiton, it has yet to produce any oil or gas there. Pemex’s current crude production averages just under 1.7 million barrels per day (bpd), down nearly a half from peak output of about 3.4 million bpd in 2004. Mexican President Andres Manuel Lopez Obrador has pledged to raise Pemex output to 2.5 million bpd by the end of his term in 2024.
Crude oil inputs to Mexico’s petroleum refineries continued to decline in 2018 --Crude oil inputs to Mexico’s petroleum refineries declined for the fifth consecutive year in 2018, falling to nearly 600,000 barrels per day (b/d), a 50% drop from 2013 levels. This decline in crude oil processing has coincided with a decrease in domestic production of the light crude oil that the country’s refineries are better suited to process. Mexico has increasingly relied on imports of petroleum products from the United States to satisfy domestic demand.Petróleos Mexicanos (Pemex), Mexico’s national oil company, owns and operates the country’s six petroleum refineries, which have a combined atmospheric crude oil distillation capacity of about 1.6 million b/d. On an aggregate basis, performance at Pemex refineries has declined over the past five years after maintaining an average refinery utilization rate near or above 75% between 1990 and 2013. By 2018, the utilization rate of Mexico’s refinery network fell to less than 40%.Pemex’s refineries are mostly configured to process light crude oil. Of its six refineries, three (Minatitlan, Cadereyta, Madero) are equipped with coker units to produce lower-sulfur gasoline from heavy crude oil. The 35% decrease in Mexican light crude oil production between 2013 and 2018 has resulted in limitations on crude oil refinery inputs. Inputs of light crude oil to Pemex refineries fell below 400,000 b/d in 2018, about a 50% reduction from 2013 levels.Refineries require periodic maintenance to ensure optimal operation of processing units that refine crude oil into petroleum products such as motor gasoline and diesel. Crude oil inputs at Pemex refineries since 2014 have been further constrained by operational issues associated with the company’s refineries.Pemex maintains control over much of Mexico’s petroleum product imports and distribution. Declines in domestic production of liquid transportation fuels have increased Mexico’s reliance on foreign sources of refined petroleum products.
The Dead Cow Finally Produces Oil, a Century After Its Discovery - Along the western edge of Argentina’s Patagonia, on an arid steppe nestled against the Andes mountains, lies a shale formation known as the Vaca Muerta. And ever since engineers confirmed what an American geologist suspected a century ago -- that the Vaca Muerta, or dead cow, contains massive amounts of oil and gas -- the rush to replicate the U.S. fracking boom was on. First came YPF SA, the local oil giant, and Chevron Corp. Then the likes of Total SA and Royal Dutch Shell Plc. Between them, they poured some $13 billion into exploration over the past eight years. None of them ever had much to show for it, though. Obstacles kept popping up, and production was marginal. Until now. In the last few weeks, two companies have exported two small cargoes from the formation, one of light oil, the other of liquefied natural gas, foreshadowing what industry officials say will be a steady flow of shipments by the end of the year. It’s way too early to declare victory -- any number of logistical and economic hurdles remain. But it’s the first sign that all the money and time invested might actually pay off, and turn Argentina back into the global energy provider it used to be well over a decade ago. “The system is going to change from one of importing oil and products to one of exporting,” said Sean Rooney, Shell’s chief in Argentina. “And that’s going to grow over time. It’s going to be some hundreds of thousands of barrels a day.”
Entire coastal water supply threatened by kerosene spill - - The only water supply system for the entire Slovenian coast may be in jeopardy after a kerosene-carrying train derailed Tuesday afternoon near one of the potable water sources. Measures have been taken to prevent the worst, but there is no doubt that the kerosene will reach the groundwater with the first strong rainfall at the latest. The regional water system operator, Rižanski vodovod, supplies more than 87,000 residents, but the figure grows much higher during the summer season, to about 130,000 people. Slovenia is bracing for a heatwave expected to peak in the second half of the week and the coast is a popular destination for many seeking to respite from scorching temperatures. Following an emergency meeting this morning, called in the wake of the spill, Rižanski Vodovod urged its clients to conserve water. The porous Kras terrain is notoriously tricky when it comes to water flow and Nataša Viršek Ravbar of the Karst Research Institute of the Research Centre of the Academy of Sciences and Arts (ZRC SAZU) told the STA that it is only a matter of time before the oil reaches the nearest water source. Once a pollutant is in the Karstic ground, there is nothing anybody can do, she said. As fas as she knows, the tunnel where the accident happened does not have built-in oil catchers. Currently, efforts are under way to pump out the spilled kerosene from the tunnel near the village of Hrastovlje. It is estimated that some 10,000 litres of the fuel spilled as several wagons derailed last afternoon. Viršek Ravbar believes that the only way to ensure quality of water is constant monitoring. The oil will likely reach the water source during the next rainfall and may remain polluted for a long time.
Dirty oil crisis over for Russia, but contagion felt on high seas - (Reuters) - In the opinion of Russian officials, the oil contamination crisis that disrupted flows from the world’s second-largest exporter of crude this spring is long over. But a closer look at a dozen tankers containing dirty Russian oil suggests that for the buyers, the debacle has a long way to run and will cost them hundreds of millions of dollars. Two months since buyers discovered Russia was shipping oil contaminated with organic chloride, which is designed to boost output but can destroy refining equipment, less than half of the tainted crude loaded on tankers has found end-users. More than 1 million tonnes worth around $500 million remains homeless, zigzagging between Europe and Asia. In China, buyers have refused to take dirty Russian oil, forcing trader Vitol to send a cargo back to Europe. That means buyers are struggling to place oil even at discounts of $10-15 per barrel - or $10-15 million per regular Suezmax tanker - to the current, regular price of $65 a barrel. “I’m not willing to risk our equipment just for cheap crude,” said an oil trader with a North Asian refinery. Buyers have also paid millions of dollars in demurrage charges as tankers are stuck with the dirty oil, preventing ship-owners from sending them on new voyages. Russia has promised to compensate buyers after they file claims post-sale. “The problem is that this oil is often impossible to sell. So how can I file a claim?,” a Russian oil buyer said.
Billionaire businessman launches legal action to keep Origin Energy fracking off NT cattle station - A billionaire businessman has launched court action against Origin Energy over its plan for gas exploration on a Northern Territory cattle station. Retail magnate Brett Blundy's company BB Retail Capital and co-owners Bullwaddy Pastoral Co are accusing the gas company of not properly consulting them about the environmental risks associated with the planned "test fracking" operation. They're seeking to stop the NT Government from approving test fracking on part of the station, in the first case of its kind for the Territory. Mr Blundy has invested millions of dollars into buying and developing several NT stationsincluding Amungee Mungee, near Daly Waters, 600 kilometres south of Darwin. In 2013, he invested $6.5 million for the 320,000-hectare station. He also owns two other nearby cattle stations, OT Downs and Mungabroom. The station hosted Origin Energy's first test well in 2016. That generated the gas industry's excitement about the Beetaloo Basin region, and predictions the area contains enough gas to power Australia for 200 years.But BB Retail Capital and Bullwaddy Pastoral Co, owned by Katherine pastoralists Adrian and Emma Brown, are trying to force Origin Energy to admit it hasn't properly carried out legally required stakeholder engagement.The station owners have alleged the gas company didn't give them time to respond to the anticipated environmental risks of fracking.In launching the Supreme Court action, they are also seeking to prevent the Territory Government considering or approving Origin's test fracking plan.
Africa Leads in LNG Investments for 2019 - With LNG greenfield investments expected to reach near $103 billion this year, 2019 is set to shatter previous records for the oil and gas industry, according to energy research firm Rystad Energy. And Africa is leading the way. With some LNG megaprojects in the works, Africa has become the dominant LNG investment destination for 2019 and has almost one-third of total greenfield investment. “Last week’s final investment decision by Anadarko for its Area 1 LNG project marks the beginning of a new phase for not only Mozambique and the African continent, but for the industry as a whole,” Pranav Joshi, analyst on Rystad’s upstream team, said in a note to Rigzone. “Area 1 is the largest LNG project that has been sanctioned in Africa to date and will also kick start the wave of sanctioning activity of other bigger LNG projects this year.” The Area 1 project’s greenfield CAPEX is estimated at $15.6 billion, which is in the same league as major LNG developments in the U.S., Russia and Australia. And if Mozambique’s Area 4 LNG project receives a final investment decision (FID) from operator ExxonMobil Corp. this year, it will be account for another $14.7 billion in greenfield expenditure in Africa. That will bring the yearly total to 28 percent of the global tally for approved investments in newly sanctioned LNG projects, according to Rystad.
Dibi field oil spill: Delta community threatens NOSDRA, Chevron - Omaetan community youths in Warri North council of Delta State have threatened to expose staff of the National Oil Spill Detection and Response Agency, NOSDRA and Chevron officials over a 2018 spill and alleged plot to side track their community for failing to involve them in the post spill impact assessment, PSIA, and Addressing newsmen in Warri, weekend, the community youth chairman, Mr. Godfrey Adidi in a letter dated June 20, and addressed to the Director-General/CEO of NOSDRA and signed by his vice, Mr. Rawlings Odudu; Secretary, Mr. Emmanuel Utsoritselaju and PRO, Mr. Rowland Mene, disclosed that a PSIA was ordered to involve all affected parties but expressed regret that some parties have concluded plans to complete and sign the JIV documents without their involvement on Wednesday, June 26, 2019. They warned that any attempt to side track them in the processes initiated by their community would result in dire consequences. According to the statement, “Itsekiri youths are not into militancy. But we are not lazy or afraid, just that we put the interest of Nigeria first. Aja-Omaetan youths are ready to take the bull by the horns. Be prepared for any violence or unrest within the DIBI field as a result of the planned fraudulent JIV signing.” In the letter copied to Vice President Osinbajo, Senate President, Speaker of the House of Representatives, Inspector General of Police, D-G, DSS and Governor Okowa, they asserted that they are ready to protect themselves from further acts of those destroying their environment and only source of livelihood and therefore called for a joint “Post Spill Impact Assessment, PSIA, as ordered without delay.
Chevron Phillips, Qatar Petroleum to Build Ethane Cracker - Chevron Phillips Chemical Co. LLC (CP Chem) on Monday signed an agreement with Qatar Petroleum (QP) to pursue the development, construction and operation of a petrochemicals complex in Qatar’s Ras Laffan Industrial City, the U.S.-based firm reported. According to a written statement from CP Chem, the complex is expected to comprise a 1,900-kiloton-per-annum (KTA) ethane cracker and two high-density polyethylene (HDPE) units with a combined capacity of 1,680 KTA. QP will own a 70-percent majority share in the joint venture and CP Chem will hold the remaining 30 percent stake, CP Chem noted. Moreover, QP stated that the facility will be the largest ethane cracker in the Middle East and will raise Qatar’s polyethylene production capacity by 82 percent. Patrick Kirby, chemicals principal analyst with Wood Mackenzie, observed that the planned CP Chem-QP project represents the fourth ethane-based steam cracker in Qatar using local ethane supply. Three facilities in-country currently boast more than 2.7 million tonnes per annum (mtpa) of ethyelene capacity and the new project will raise that figure by nearly 70 percent, he said. “The conclusion of these agreements constitutes an important milestone for Qatar Petroleum as petrochemicals represent a major pillar of our growth strategy to achieve our vision of becoming one of the best national oil and gas companies in the world,” Saad Sherida Al-Kaabi, QP’s president and CEO and Qatar’s Minister of State for Energy Affairs, said at a press conference Monday in Doha following a signing ceremony with CP Chem. “Qatar is one of the world’s leading producers of the natural gas liquids that will fuel these world-scale assets,” noted Mark E. Lashier, CP Chem’s president and CEO. “This project fits perfectly with our global strategy to build petrochemical assets in regions of the world where feedstock options are abundant and competitively priced.” CP Chem noted the project’s engineering design phase should begin shortly and that it anticipates a late-2025 start-up.
OPEC+ Deal Pot Looks Sweeter for Russia as Gulf Money Flows In - When the courtship between Russia and Saudi Arabia and its Gulf allies began more than four years ago, the prospect of billions in new investment for the region was big selling point for the Kremlin. Now, as the two big oil producers mull whether to extend the centerpiece of their rapprochement — the deal to cut production that’s helped shore up crude prices around the world — the investment flood looks a lot smaller than promised. But for capital-starved Russia, it may still be enough. “There is a certain frustration on the Russian side,” said Alexey Potemkin, the chief executive officer of Moscow Policy Group, a consultancy group that advises on Russia-Gulf business projects. In particular, he said the Saudis were stalling on some deals and “this raises questions among decision-makers about the seriousness of Russia’s Gulf counterparts with regard to investments.” Fruitful Friendships Saudi Arabia and its Gulf neighbors seem to be getting the message. They’re expected to invest a total of $5 billion in Russia this year — in projects from a space launch site to toll roads in the Moscow region. That’s more than any single year since Saudi Crown Prince Mohammed Bin Salman, often called MBS, met Russian President Vladimir Putin back in 2015 and promised $10 billion in investment to help cement their newfound friendship. The kingdom has delivered about a quarter of that so far, according to Russian statistics. Though Russia has reaped plenty of other economic benefits from higher oil prices and geopolitical dividends from cozying up to the Gulf, perceptions of the investment payoff are likely to be a factor in Russia’s thinking about whether to extend the production cuts deal at the meeting in early July. MBS, and his Abu Dhabi counterpart Sheikh Mohammed bin Zayed or MBZ, have been slowly diversifying overseas assets away from their vast U.S. holdings as they become wary of the unpredictability of President Donald Trump’s policy in the region. “It is clear that MBZ and MBS enjoy a good rapport with Putin and that they are very keen on cementing the OPEC+ relationship for the longer term and beyond the purely commercial realm,” said Steffen Hertog, an associate professor at the London School of Economics. “There has been a general trend to diversify Saudi and Emirati overseas assets away from the U.S.”
US, Iran Conflict Could Agitate Global LNG Markets- A potential conflict between the U.S. and Iran could be far more disruptive for liquefied natural gas markets than to the world’s crude shipments. About a quarter of the world’s LNG goes through the Strait of Hormuz, the narrow sea conduit that borders Iran and through which tankers carrying about one-fifth of the world’s oil transit, according to the U.S. Energy Information Administration. Major importers are also less prepared for LNG supply disruptions, because they hold a fraction of the inventories they do for oil. Tehran has threatened in the past to halt fuel shipments through the vital passage. Tensions in the region are high after U.S. President Donald Trump approved and then later called off military strikes against Iran on Thursday night after Iranian forces shot down an American Navy drone over the strait. “Whatever spike you get in oil, you will likely get twice the spike in spot LNG,” said David Hewitt, an oil and gas analyst at Macquarie Capital Ltd. “The market would be unable to” make up the full amount of shipments from the region if deliveries through the strait were halted, he said. Most of Qatar’s gas shipments head to Asian nations and Japan, South Korea and India are among its top LNG buyers, according to the International Gas Union. Inventory levels and seasonal demand could also impact any disruption on global markets. While most major importers don’t have as much storage for gas as they do for oil -- Japan had about 19 days of LNG imports on hand at the end of March versus enough oil in strategic reserves to cover 133 days of deliveries -- the startup of new export projects and mild weather have curbed LNG demand, leaving the market oversupplied.
Oil markets are underestimating the impact of another flare-up in US-Iran tensions, analysts warn - Oil traders are under-prepared for another flare-up in U.S.-Iran tensions, energy analysts have told CNBC, as President Donald Trump’s administration prepares to impose “major ” new sanctions on the Islamic Republic. Six oil tankers and a U.S. spy drone have been attacked since May either in, or near, the Strait of Hormuz — the world’s busiest transit lane for seaborne oil shipments that separates Iran from its neighboring Gulf states. The flurry of attacks has escalated tensions between the U.S. and Iran. The prospect of another military conflict in the Middle East prompted international benchmark Brent crude to climb around 5% last week, while U.S. West Texas Intermediate (WTI) jumped more than 10% — its biggest gain since December 2016. Nonetheless, David Hewitt, an oil and gas analyst at Macquarie, told CNBC’s “Street Signs Europe” on Monday that oil traders were still underestimating the impact of another flare-up between Washington and Tehran. When asked whether there is an insufficient amount of geopolitical risk premium priced into energy markets at present, Hewitt replied: “The simple answer is yes — and absolutely yes.” “If we go to more sanctions today… You would expect that they will react more. So, back to the geopolitical pricing in crude, you have got to think that there is a greater potential for something to happen at some point in the future be it this week or next, or as we go forward,” Hewitt said. Brent crude was trading at $65.28 at around 8:30 a.m. ET on Monday, up around 0.1%, while U.S. WTI stood at $57.88, more than 0.7% higher.
Saudi Arabia puts off day of reckoning on oil production -- When Brian Hook, the US envoy on Iran, declared himself “very pleased” last week with Saudi Arabia’s efforts to ensure oil markets are well supplied, he was engaging in some diplomatic footwork worthy of an Olympic gymnast. As tensions have soared between Washington and Tehran, the US has been grateful that the oil price has risen only marginally to $65 a barrel, despite the threat that conflict could pose to supplies from the Middle East. But for all the public thanks, Mr Hook knows as well as any oil analyst that Saudi Arabia has played little part in keeping prices in check this year. Instead, since last November, Saudi Arabia has slashed oil production by 1.2m barrels a day — or the equivalent of removing the entirety of the UK’s North Sea crude output — in an increasingly desperate bid to prop up the price. Mr Hook knew he could allow Saudi Arabia a pass in public, and likely in private too. He was, after all, speaking not only with a close ally, but from a position of strength. The main reason Saudi Arabia has had to scramble to cut production, despite Washington sanctioning oil exports from Iran and Venezuela, is owing to booming supplies from US shale fields. Riyadh has been able to stop the oil price from cratering, and derailing its own economic reform programme, by lowering its own production time and time again. In the process it has inadvertently freed up markets for the growing bounty of US barrels and kept enough cash rolling in for independent US producers to expand output further. All the while, it has stopped short of endangering the world economy with a runaway oil price. For Washington, then, Saudi Arabia’s oil policy can be seen as a success story. Mr Hook’s decision to avoid rocking the boat, regardless of Saudi Arabia’s real actions in the oil market, is therefore perfectly understandable.
Oil Price Risks Skewed to Downside - Oil price risks remain skewed to the downside but increasing tension in the Middle East could change that outlook quickly. That’s what investment bank Jefferies believes, according to a research note sent to Rigzone on Monday by Jefferies Equity Analyst Jason Gammel. Demand weakness and OPEC uncertainty are the factors driving risk to the downside, according to the research note, which highlighted the impact escalating United States and Iran tensions could have. The note revealed that Jefferies’ current Brent crude forecast is $64.50 per barrel for the second half of 2019 and $62.75 per barrel for 2020. Market focus has been on slowing demand since trade discussions between the United States and China fell apart in late April, according to the note, which states that there have been plenty of reasons to be concerned about demand. “PMI (Purchasing Managers Index) trends have been clearly negative; GDP forecast cuts by the IMF and others have indicated slowing economic activity which has been corroborated by weak refining margins,” Gammel stated in the note. “Most salient for the oil markets has been the massive increase in U.S. inventories since the beginning of April. Liquidation of managed money length has also contributed to both the oil price decline and its increased volatility,” he added. In the note, Gammel re-iterated the view that an extension of OPEC+ production cuts through the end of the year seems highly likely. Gammel added that the market expects an extension though and said any failure could see the oil price “gap down”.
Hedge funds pause oil sales as Mideast tensions rise (Reuters) - Hedge fund liquidation of petroleum futures and options positions stalled last week as bearishness about the global economy was tempered by fears about a possible disruption of oil exports from the Gulf. Hedge funds and other money managers were net sellers of just 3 million barrels in the six most important futures and options contracts linked to petroleum prices in the week to June 18. (https://tmsnrt.rs/2FtXsWx) Portfolio managers have sold a total of 389 million barrels in the last eight weeks, but last week’s sales were the smallest so far, as tensions between the United States and Iran raised concerns about supply interruptions. Funds were net sellers last week of Brent (-21 million barrels) and European gasoil (-1 million barrels) but buyers of NYMEX and ICE WTI (+12 million), U.S. gasoline (+1 million) and U.S. heating oil (+5 million). Concerns about a global economic slowdown have been hitting oil prices as well as the price of a broad range of other commodities and equities since late April. But the economic outlook has now weakened so much the U.S. Federal Reserve has signalled it may cut interest rates, which traders see as a possible bullish signal. From a positioning perspective, the balance of price risks had already shifted towards the upside by early June, creating conditions for a short-covering rally. By June 11, fund managers were running the most bearish position in U.S. heating oil for two years and the most bearish position in NYMEX and ICE WTI since the end of the oil slump in 2016. In that context, tensions in the Strait of Hormuz as well as hopes for a U.S. interest rate cut and the renewal of trade talks between the United States and China all combined to trigger a bout of short covering. There are still an elevated number of short positions that could be squeezed, pushing prices higher, if tensions in the Middle East worsen or there are signs of a re-acceleration in the global economy. From a fundamental perspective, however, the outlook for oil remains bearish for the moment, with most global economic indicators pointing to a prolonged slowdown hitting oil consumption in the second half of the year.
How Is the US-China Trade War Affecting Oil? -How exactly is the trade war between the United States and China affecting the global oil industry? The greatest impact of the United States-China trade war on the global oil industry is its effect on oil prices, explains Steve Wood, a managing director at financial services company Moody’s. “The market is concerned that a prolonged dispute will result in slower global economic growth leading to lower demand for oil,” Wood told Rigzone. “This, in turn, has caused oil prices to weaken, which reduces cash flow and earnings for oil producers,” he added. Given the current considerations on the supply side, the oil market should have seen risk premium pushing up oil prices, according to Rystad Energy Senior Analyst Artyom Tchen. “Instead we haven’t seen that over the last month,” Tchen said. “We believe that [the] United States-China trade war and resulting weak economic growth sentiment is among those factors that balance supply risks and cap oil prices,” the Rystad Energy representative added. Already introduced tariffs, excluding the latest U.S. round on $200 billion worth of Chinese goods and Chinese retaliation on $60 billion worth of U.S. goods, have dented oil demand growth this year by around 150,000 to 200,000 bpd, according to Rystad Energy estimates. “We forecast 2019 demand growth at 1.2 million barrels per day (bpd), as opposed to [a] pre-trade-war forecast of 1.4 million bpd,” Tchen stated.
US oil rises 0.8%, but gains capped amid worries over weakening demand - U.S. oil prices rose on Monday, adding to last week’s surge, but concerns about the possibility of weakening demand kept their gains in check. West Texas Intermediate futures climbed 0.8% to settle at $57.90 per barrel. Last week, U.S. crude surged 10% after Iran shot down a U.S. drone on Thursday in the Gulf, adding to tensions stoked by attacks on oil tankers in the area in May and June that Washington has blamed on Iran. “The tightening of supply/demand balances in the coming months is likely to only heighten the market focus on these geopolitical risks unless they abate.” The International Energy Agency (IEA) said this month it had revised down its estimate for crude demand growth in 2019, citing the U.S.-China trade row. Hopes are waning for progress in Sino-U.S. trade talks at this week’s G20 meeting as investors await a meeting between Presidents Donald Trump and Xi Jinping. “The oil market ... is turning its attention to the upcoming G20 meeting and the (limited) prospect for a deal, and with that, renewed focus on slowing demand growth,” said Saxo Bank’s head of commodity strategy Ole Hansen. Supply still looks to remain relatively tight, as the Organization of the Petroleum Exporting Countries and its allies including Russia, an alliance known as OPEC+, appear likely to extend a deal on curbing output when they meet on July 1-2 in Vienna, analysts said. Russian Energy Minister Alexander Novak said on Monday that international cooperation on crude production had helped stabilize oil markets and was more important than ever. But he also voiced concerns about demand, saying extending the deal on supply cuts would depend in part on “the consumption of oil in the third and fourth quarters, (and) the pace of growth of the world economy.”
U.S. oil ends higher, but Brent falls as Trump administration announces additional Iran sanctions -Oil futures split two ways on Monday, with U.S. prices ending higher but global benchmark Brent crude posting a loss as the U.S. announced new sanctions on Iran.President Donald Trump on Monday signed an executive order imposing financial sanctions on Iranian leaders, according to pool reports from the White House.Trump on Monday “took aim at the [Iran] Supreme Leader Ayatollah Khamenei and questioned the U.S. presence in defending the Straight of Hormuz,” said Edward Moya, senior market analyst in New York with Oanda. “We are not seeing a clear message from the White House, but Trump appears hesitant to engage in war.”“Trump does not want a war before the [U.S. presidential] election and he could choose to make a deal with Iran and use that as another campaign point,” Moya told MarketWatch. Traders have been closely watching these developments, which have the potential to disrupt oil flow in the Middle East.In Monday dealings, August West Texas Intermediate crude climbed by 47 cents, or 0.8%, to settle at $57.90 a barrel on the New York Mercantile Exchange. That was the highest front-month contract finish since May 29, according to Dow Jones Market Data. Prices rose 8.8% for last week, the biggest weekly percentage climb since the week ended Dec. 2, 2016. The hefty climb for U.S. prices last week came on the heels of expectations that Middle East tensions may lead to a disruption in the oil markets. Oil bulls had also cheered signs that economy-boosting central bank policy would be delivered. Meanwhile, international benchmark August Brent crude BRNQ19, +0.98% ended down 34 cents, or 0.5%, at $64.86 a barrel on ICE Futures Europe. The contract wrapped trading Friday at $65.20 — the highest since May 30. Front-month Brent saw a 5.1% gain last week.
Oil prices steady as US-Iran tensions weigh - Oil prices hung in the balance on Tuesday as concerns over declining crude demand were offset by risks to supply linked to new U.S. sanctions on Iran. Benchmark Brent crude futures were down 12 cents at $64.74 a barrel by 0832 GMT. U.S. crude futures were up 3 cents at $57.93 a barrel. Hopes for progress in the trade war between China and the United States during this week’s G20 meeting were dampened by a comment from a senior U.S. official saying U.S. President Donald Trump was “comfortable with any outcome” from the talks. Weak manufacturing data released on Monday by the Federal Reserve Bank of Dallas added to worries about slipping demand for crude oil due to the trade conflict. Demand concerns weighing on oil prices were briefly overcome last week when Brent climbed 5% and U.S. crude surged almost 10%, its strongest week since 2016, after Iran shot down a U.S. drone on Thursday, adding to tensions stoked by attacks on oil tankers in the area in May and June. Washington has blamed the tanker attacks on Iran, which denies having any role. U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday. Iran said this move closed the path of diplomacy. Trump also said on Twitter that other countries should protect their own oil shipping in the Middle East rather than have the United States protect them. Meanwhile, the Organization of the Petroleum Exporting Countries and its allies including Russia appear likely to extend a deal on curbing output when they meet on July 1-2. The chief executive of Saudi Aramco, state oil firm of OPEC’s de facto leader, said it had no plan to increase its current maximum output capacity of 12 million barrels per day (bpd), given sizeable spare capacity. Russian Energy Minister Alexander Novak said international cooperation on crude production had helped stabilise oil markets and was more important than ever. He also voiced concerns about demand. U.S. sanctions on Iran and Venezuela have cut oil exports from the two OPEC members but U.S. production has been rising, leading some Russian officials to accuse Washington of carving out market share for its energy exports.
Middle East Tensions Move Oil Prices Higher -- Oil prices were steady in early trading on Tuesday, before WTI rose to break the $58 mark. It seems U.S.-Iran tensions are slowly overpowering continued U.S.-China trade war concerns. In a tweet on Monday, President Trump said that the U.S. was no longer dependent on oil coming through the Strait of Hormuz, and he suggested that other countries should pay for security in the region. “China gets 91% of its Oil from the Straight, Japan 62%, & many other countries likewise,” Trump wrote. “So why are we protecting the shipping lanes for other countries (many years) for zero compensation. All of these countries should be protecting their own ships on what has always been....a dangerous journey. We don't even need to be there in that the US has just become (by far) the largest producer of Energy anywhere in the world!” The U.S. has made navigation through the Strait a national security concern since the 1970s. Following the aborted military strike from last week, the U.S. imposed a new round of sanctions on Iran, targeting top level officials, including Ayatollah Ali Khamenei. Iran’s crude oil and condensate exports averaged 1 mb/d in April and 800,000 bpd in May, according to S&P Global Platts. In response, Iran’s foreign ministry said the sanctions on top officials means the “permanent closure of the path of diplomacy.” Trump’s aim for a new nuclear deal “has thus become a distant dream,” Commerzbank said in a note. “It appears that the doors have been closed – at least for the time being – to any diplomatic solution to the crisis.” Even as Russia has declared the oil contamination crisis over, roughly $500 million of tainted oil cannot find willing buyers, even at a steep discount of $10 to $15 per barrel. “I’m not willing to risk our equipment just for cheap crude,” an oil trader with a North Asian refinery told Reuters. Pioneer Natural Resources is discarding its aggressive growth model, forgoing plans to pursue 1 mb/d of production, and instead is focusing on profitability, according to the Wall Street Journal. The strategy shift is hard to overstate, as it signals the growth-at-all-costs business model for shale drilling is reaching its limits. Questionable economics are catching up to the industry. Pioneer has slashed its workforce and is slowing down on drilling. The big question is if others in the industry will follow Pioneer’s lead.
Oil Mixed as Trump Sanctions Target Iran Leaders - U.S. crude settled a touch lower on Tuesday, but U.K Brent rose on heightened tensions in the Persian Gulf after Trump targeted Iran’s Supreme Leader Ayatollah Ali Khamenei and other top officials with sanctions above those imposed on the Islamic Republic. Tehran reacted with outrage, with President Hassan Rouhani calling the White House mentally disabled. The Iranian government added that hopes for a diplomatic solution had ended. New York-traded West Texas Intermediate crude settled down 7 cents, or 0.1%, at 57.83 a barrel. WTI finished last week up 9.4% for its best weekly gain since the week to Nov. 27, 2016. The September contract for London-traded Brent crude, the benchmark for oil outside of the U.S., settled up 10 cents, or 0.2%, at $64.28. Brent gained over 5% last week, its most since the week ended Feb. 15. The August contract was up 19 cents at $65.05 a barrel. Trump’s tweets, speeches and actions over the past year have often disrupted the rally in oil more than fed it. But over the past week, his administration and Tehran have been adding to crude's geopolitical premium with their tough talk. “The U.S. president does not want war with Iran,” “But for survival, Iran is left with no choice than an escalation.” Abhi “At least through year-end, (the) likelihood is just for more antagonism,” Rajendran said. Always relishing a good fight on Twitter, Trump countered Rouhani's remarks by saying, "Iran's very ignorant and insulting statement, put out today, only shows that they do not understand reality. Any attack by Iran on anything American will be met with great and overwhelming force." "In some areas, overwhelming will mean obliteration. No more John Kerry & Obama," Trump tweeted, referring to the way the former U.S. president and his secretary of state produced the first global nuclear accord with Iran. Just before the sanctions he announced on Iran’s top leadership, Trump said he was prepared to negotiate with Tehran, without preconditions, in a bid to ease tensions building since he withdrew the U.S. a year ago from a global nuclear deal with theIslamic Republic and began pressuring it with economic sanctions. Oil prices were also boosted by expectations that weekly data due from the U.S. Energy Information Administration on Wednesday will show a 2.89-million-barrel drop in crude stockpiles, almost matching the last decline of 3.11 million barrels.
WTI Spikes After Biggest Crude Draw Since March -Oil prices are higher since last week's inventory data, thanks in large part to the chaos occurring in the Strait of Hormuz sparking some war premium back into a slightly squeeze-prone-positioning. “Oil squeezed higher last week on tensions in the Middle East, but with so much uncertainty regarding the trade war and global economy, the demand argument is too shaky for a sustainable rally just yet,” Tyler Richey, co-editor at Sevens Report Research in Palm Beach Gardens, Florida, wrote in a note to clients.But for tonight (and tomorrow's EIA data), all eyes will be back on inventories... API:
- Crude -7.55mm (-2.9mm exp) - biggest draw since March
- Cushing -1.26mm
- Gasoline -3.17mm
- Distillates +160k
After last week's crude draw, expectations are for more of the same this week and API reported a large 7.55mm crude draw - the biggest since March along with a sizable draw in Gasoline... “It feels like demand is very, very weak,” said Michal Meidan, head China analyst at Energy Aspects. “On the supply side, the consensus really was OPEC rolling over the supply cuts,” so it’s quite surprising that prices haven’t risen further, especially with all the geopolitical stress, she said. WTI hovered just below $58 ahead of the inventory print , but as API data hit, it spiked to the highs of the day...
Oil prices rise on drop in US crude stocks, refinery outage - Oil prices rose on Wednesday, buoyed by an outage at a major refinery on the U.S. East Coast and industry data that showed U.S. crude stockpiles fell more than expected. Front-month Brent crude futures, the international benchmark, were up 82 cents at $65.87 per barrel. They earlier touched their highest since May 31 at $66.25 a barrel. U.S. West Texas Intermediate (WTI) crude futures were at $58.95 per barrel, up $1.12 from their last settlement. WTI earlier hit its highest level since May 30 at $59.13 a barrel. Philadelphia Energy Solutions is expected to seek to permanently shut its oil refinery in the city after a massive fire caused substantial damage to the complex, two sources familiar with the plans said on Tuesday. The plant, located in the busiest and most densely populated part of the U.S. east coast, had already declared force majeure on some gasoline supplies following the fire. U.S. gasoline futures hit their highest level since end-May on Wednesday. “Oil is up in reaction to the API data combined with the refinery disruption on the U.S. East Coast. Gasoline is up and leading the complex and helping to keep momentum up on crude,” Olivier Jakob of Petromatrix consultancy in Switzerland said. “Refinery margins are improving globally because if that refinery can’t operate then you’ll have to compensate with higher runs elsewhere.” U.S. crude stockpiles fell by 7.5 million barrels in the week ended June 21 to 474.5 million, compared with analyst expectations for a decline of 2.5 million barrels, American Petroleum Institute data showed. Crude stocks at U.S. delivery hub Cushing, Oklahoma, fell by 1.3 million barrels.
WTI Spikes After Biggest Crude Inventory Draw In Almost 3 Years - Oil prices have accelerated their gains overnight to 4-week highs after API reported a bigger-than-expected crude draw and mid-east tensions remain high.“This is the market’s reaction to the unexpectedly pronounced fall in U.S. crude-oil stocks,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.“Apart from crude-oil stock trends, the focus here is also likely to be on gasoline demand” as the northern hemisphere moves into the peak summer driving season. DOE:
- Crude -12.778mm(-2.9mm exp) = biggest draw since Sept 2016
- Cushing -1.746mm
- Gasoline -996k
- Distillates -2.441mm
Following last week's bigger-than-expected crude draw and API overnight, DOE expectations were for a notable crude draw (with a whisper number of 3.2mm), but no one expected the massive 12.78mm collapse in inventories - the biggest since Sept 2016. But there were draws across the board... As the US oil rig count extends its declines, it appears - perhaps - that US crude production has peaked (for now)...
U.S. crude stocks slump nearly 13 million bbls as exports hit record high: EIA - (Reuters) - U.S. crude oil stocks fell by nearly 13 million barrels last week, the most in nearly three years, as exports hit a record high, the Energy Information Administration said on Wednesday. Crude inventories fell 12.8 million barrels in the week ended June 21, far surpassing analyst expectations for a decrease of 2.5 million barrels. That was the most since September 2016, according to the statistical arm of the Department of Energy. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.7 million barrels, EIA said. Oil prices jumped on the news, with U.S. crude futures nearly touching $60 a barrel for the first time in a month. U.S. futures were up 3.2% to $59.70 a barrel as of 10:44 a.m. EST (1444 GMT), after hitting $59.93 just after the data was released. Brent crude futures gained 2.6% to $66.76 a barrel. “The report was solidly bullish with the extraordinary crude oil inventory drawdown of over 12 million barrels,” said John Kilduff, a partner at Again Capital Management in New York. “Imports of crude oil plunged, while exports rose appreciably, closing in on 4 million bpd.” Net U.S. crude imports fell last week by 1.2 million barrels per day. Overall crude exports rose to 3.8 million bpd, beating its previous record of 3.6 million bpd in February. Refinery crude runs rose by 73,000 bpd, EIA data showed. Refinery utilization rates rose by 0.3 percentage points to 94.2% of total capacity. Gasoline stocks fell by 996,000 barrels, compared with analysts’ expectations in a Reuters poll for a 288,000-barrel gain. U.S. gasoline futures extended earlier gains, as that contract had already been rallying on news that Philadelphia Energy Solutions was planning to close the largest U.S. East Coast refinery after a massive fire last week. Distillate stockpiles, which include diesel and heating oil, fell by 2.4 million barrels, versus expectations for a 522,000-barrel increase, the EIA data showed.
U.S. oil, gasoline futures post highest settlements in 5 weeks - U.S. oil prices climbed by nearly 3% on Wednesday, as the U.S. government reported a weekly drop of nearly 13 million barrels in domestic crude stocks. Gasoline futures also rallied on news of the planned closure of a key East Coast refinery. Prices for both U.S. oil and gasoline settled at their highest in five weeks. “An eye opening [more than] 12 million-barrel draw in crude, which was 10 million barrels bigger than expected, should give support to the move” higher Wednesday, said Tariq Zahir, managing member at Tyche Capital Advisors. Given the drawdown in gasoline inventories and supply decline at the U.S. oil trading hub at Cushing, Okla., “we wouldn’t be surprised to see the $60 level get breached in WTI,” he said. “However, with the upcoming OPEC meeting and also the [Group of 20 leaders summit], we will see the next directional move on the results of these two events.” August West Texas Intermediate crude rose $1.55, or 2.7%, to settle at $59.38 a barrel on the New York Mercantile Exchange after tapping a high at $59.93. The settlement was the highest for a front-month contract since May 22, according to Dow Jones Market Data. International benchmark August Brent crude gained $1.44, or 2.2%, to $66.49 a barrel on ICE Futures Europe—the highest settlement in about a month. The Energy Information Administration on Wednesday reported that U.S. crude supplies dropped by 12.8 million barrels for the week ended June 21. Analysts polled by S&P Global Platts expected a decline of 2.8 million barrels in crude stocks, on average. The American Petroleum Institute on Tuesday reported a 7.5 million-barrel fall.
US oil jumps 2.7% to $59.38 per barrel after massive supply drop - Oil prices soared on Wednesday as traders cheered a massive drop in U.S. supply while tensions with Iran heightened after President Donald Trump imposed new sanctions on the country this week. U.S. West Texas Intermediate crude futures settled up 2.7% at $59.38 per barrel. Brent crude futures rose 2.1% at $66.42 per barrel. The Energy Information Administration said Wednesday that U.S. crude inventories fell by 12.8 million barrels last week. Crude hit its session high after the data was released. Last week was the biggest draw down since September of 2016, when inventories fell 14.5 million barrels.. “Domestic production ticked down, gasoline demand was strong, exports plunged, refinery utilization rose, it just had everything going for it.” “Whatever we’re not using here, we’re just exporting,” . “As our production increases, there will be more available for the world market. World oil demand continues to grow. We’re supplying that increased demand as well as some of the shortfall (from Iran and Venezuela).” Crude exports reached a record of 3.77 million barrels per day. Imports meanwhile fell to 800,000 per day. “It’s due to a significant decline in imports at the same time we exported a record amount of crude oil on the gulf coast,” said Lipow. Oil also got a boost amid simmering tensions between Iran and the U.S. Trump signed an executive order Monday imposing new sanctions on Iran in response to the downing of an unmanned U.S. drone last week. On Wednesday, he told Fox Business Network “I hope we don’t” have a war with Iran but it “would not last very long.” In addition to rising tensions with Iran, last week the East Coast’s largest gasoline refinery, Philadelphia Energy Solutions, had a series of explosions that shut down operations. The founder of Oil Price Information Service, Tom Kloza, said he does not know if Philadelphia Energy Solutions’ refinery is closing for good but if it does, the loss of supply will be made up from elsewhere, including from the Gulf Coast, Europe and Canada, as the entire world is well supplied.
Oil slips to $66 ahead of G20, OPEC meeting -- Oil slid to around $66 a barrel on Thursday, pressured by concerns over whether the G20 summit will produce a breakthrough on trade and perceptions that supply is ample despite the prospect of continued OPEC curbs. U.S. President Donald Trump said on Wednesday a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on most remaining Chinese imports if the two countries don’t agree. “A complete breakdown of the talks will have a negative impact on the financial markets and also on oil, but the sell-off in risky assets should be short-lived,” said Tamas Varga of oil broker PVM. “Oil bulls might have to wait until the second half of next week to start firing from all cylinders.” Brent crude, the global benchmark, was down 61 cents at $65.88 by 0840 GMT. U.S. West Texas Intermediate crude fell 35 cents to $59.03. Oil jumped by more than 2% on Wednesday after the latest U.S. petroleum supply report showed a larger-than-expected drop in crude stocks. Inventories fell 12.8 million barrels, more than the 2.5 million barrel decrease analysts had expected. Nonetheless, supply remains sufficient in the world’s biggest oil consumer. “U.S. oil inventories remain well above the five-year average, signalling a well-supplied market,” said Carsten Menke of Swiss bank Julius Baer. “Demand still looks soft, while the supply situation remains fragile.” Traders said uncertainty over a trade breakthrough at the G20 - which could translate into a stronger oil demand outlook - and doubts about continued output cuts by OPEC and its allies were crimping follow-through buying.
Oil edges higher ahead of G20, OPEC meeting – Brent crude futures rose 6 cents to settle at $66.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 5 cents to settle at $59.43 a barrel. The Organization of the Petroleum Exporting Countries is expected to roll over a deal on cutting supplies at a meeting next week and discuss deepening the curbs, Iraq’s oil minister said. Sources told Reuters this month that Algeria had floated an idea of deepening the cut by some 600,000 barrels per day. A deal between OPEC and its allies, including Russia to curb output by 1.2 million bpd, runs out at the end of June. Meetings on July 1-2 in Vienna will discuss the next steps. The OPEC meeting will follow the G20 summit this weekend. “If we don’t see OPEC extend its production agreement and the U.S. and China leave the G20 with more problems, this rally up to one-month highs could stop,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. U.S. President Donald Trump said on Wednesday a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on most remaining Chinese imports if the two countries don’t agree. “It’s clear that investors are a little cautious when it comes to this meeting, given how talks collapsed previously and the fighting talk we’ve since seen from both sides,” Tensions between the United States and Iran have also kept the market on edge. Iran is on course to breach a threshold in its nuclear agreement within days by accumulating more enriched uranium than permitted, although it had not done so yet by a deadline it set for Thursday, diplomats said, citing U.N. inspectors’ data.
Oil prices eke out new multiweek high as traders weigh G-20 trade uncertainty, supply factors - Oil prices ended modestly higher on Thursday to notch a new multiweek high, as global markets awaited pivotal trade discussions out the Group of 20 leaders summit and watched simmering tensions between the U.S. and Iran that could pose a risk to global supplies. The move followed a roughly 3% price surge Wednesday for U.S. prices, seen on data showing a weekly drop of nearly 13 million barrels in domestic crude supplies. On Thursday, August West Texas Intermediate crude added 5 cents, or nearly 0.1%, to settle at $59.43 a barrel. Prices on the New York Mercantile Exchange logged another settlement at the highest for a front-month contract since May 22, according to Dow Jones Market Data. Month to date, prices trade roughly 11% higher. “The strength in the oil market this month, in my opinion, is warranted,” “With the tensions in the Mideast supporting price, any setback in the Strait of Hormuz [major oil-shipping choke point] will impact supply immediately.” Tensions between the U.S. and Iran have grown after Iran shot down a U.S. surveillance drone over the Strait of Hormuz earlier this month. “Chinese demand is clearly on the rise, confirmed by stockpiles falling and consumption increasing,” he said, adding that a trade deal between the U.S. and China at the G-20 would be “supportive of oil prices.” International benchmark August Brent crude tacked on 6 cents, or about 0.1%, to end at a roughly one-month high of $66.55 a barrel, ahead of the contract’s expiration at the end of Friday’s session. It was up more than 3% for the month so far. President Donald Trump and his Chinese counterpart Xi Jinping will use the G-20 meeting this weekend to “press pause” on their continuing trade war, analysts said, although uncertainty persists. That spat has put the health of the economic recovery, and thus, energy demand, in question.
Oil prices little changed ahead of G-20 talks, OPEC meet - Oil prices were little changed on Friday as traders awaited any update on the Sino-U.S. trade war from a scheduled weekend meeting of the two countries’ presidents at the G20, and eyed next week’s OPEC gathering. Brent crude futures were up 15 cents, or 0.2%, at $66.70 per barrel. U.S. West Texas Intermediate (WTI) crude futures were up 14 cents, or 0.3%, at $59.60 a barrel. The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between U.S. President Donald Trump and Chinese President Xi Jinping on Saturday. A trade dispute between the world’s two biggest economies has weighed on oil prices, fanning fears that slowing economic growth could dent demand for the commodity. “While there are no expectations of a truce between the two parties, it will set the scene for the OPEC meeting a couple of days later,” ANZ Bank said in a note. Trump said on Wednesday a trade deal with Chinese President Xi was possible this weekend but he is prepared to impose U.S. tariffs on most remaining Chinese imports should the two countries disagree. “Even if U.S.-China trade talks turn positive, we think OPEC will extend the current production cuts until the end of the year. However, deeper cuts look unlikely, given the rising supply issues,” ANZ said. The Organization of Petroleum Exporting Countries (OPEC) and some non-members including Russia, known as OPEC+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply cuts. “The market sentiment is that OPEC+ will agree to extend cuts, but after all what matters is how deep the cuts will be and how much Saudi Arabia and Russia will curb,” said Kim Kwang-rae, a commodity analyst at Samsung Futures in Seoul. OPEC+ members agreed to curb oil output by 1.2 million barrels per day from Jan.1. Russian President Vladimir Putin said in an interview with the Financial Times on Thursday that the OPEC-led supply cut helped stablise oil markets and the future of the output deal was expected to be on the agenda at the G20 summit.
Oil falls after parties to nuclear agreement vow to intensify efforts to normalize trade with Iran - Oil prices fell just before the settlement on Friday after the remaining parties to the Iran nuclear deal vowed to help normalize trade with the Middle Eastern nation. U.S. West Texas Intermediate (WTI) crude futures settled down 96 cents, or 1.6%, at $58.47 a barrel after trading in a narrow range for most of the session. European parties to the Iran nuclear deal have been trying to rescue the accord and are trying to keep Iran from violating the deal. Crude futures were little changed for most of Friday ahead of talks over the trade dispute between the U.S. and Chinese presidents this weekend and on production cuts from OPEC on Monday. Tensions between the United Sates and Iran have also been keeping markets on edge. A week after President Donald Trump called off air strikes on Iran at the last minute, the prospect that Tehran could soon violate its nuclear commitments has created additional diplomatic urgency to find a way out of the crisis. The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between Trump and Chinese President Xi Jinping on Saturday. A trade war between the world’s two biggest economies has weighed on prices, fanning fears that slowing economic growth could dent demand for oil. Trump said he hoped for productive talks with the Chinese president, but said he had not made any promises about a reprieve from escalating tariffs.
Oil prices fall, but post weekly gain ahead of G20 talks, OPEC (Reuters) - Oil prices fell on Friday but posted their second straight week of gains ahead of trade talks between the U.S. and Chinese presidents this weekend, and on widely expected production cuts from OPEC on Monday. The most active September Brent crude futures LCOU9 fell 93 cents to settle at $64.74 a barrel. Brent August crude LCOc1 futures settled unchanged at $66.55 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures lost 96 cents to settle at $58.47 a barrel. Brent posted a gain of more than 20% in the first half of 2019, while WTI marked a gain of more than 25%. Both contracts also notched their second straight weekly gain. Oil futures fell just ahead of settlement as investors sized up positions before meetings this weekend and next week that could lend direction for the market. The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between U.S. President Donald Trump and Chinese President Xi Jinping on Saturday. A trade war between the world’s two biggest economies has weighed on prices, fanning fears that slowing economic growth could dent demand for oil. Trump said he hoped for productive talks with the Chinese president, but said he had not made any promises about a reprieve from escalating tariffs. The Organization of the Petroleum Exporting Countries and some non-members including Russia, known as OPEC+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply cuts. “You had a wave of selling come in advance of the OPEC and non-OPEC meeting on Monday, where it’s fully expected that they’re going to rollover production cuts,” said Andrew Lipow of Lipow Oil Associates in Houston. “But ironically they’re doing that because they’re seeing the oil demand growth forecast get revised downward and that’s contributing to a sense that we remain oversupplied.” Russia is cutting its oil output in June by slightly more than envisaged in the OPEC+ deal, RIA news agency cited Russian Energy Minister Alexander Novak as saying.
U.S. oil prices fall, but gain 9% for month with U.S.-China trade talks, OPEC meeting ahead - U.S. oil prices settled lower Friday, but gained more than 9% for the month of June, as traders awaited the outcome of Sino-U.S. trade talks in Japan Saturday and meetings early next week between key oil producers.Traders are eager to hear of any progress in Sino-U.S. trade discussions at the Group of 20 meetings, which could help to support expectations for oil consumption by the two largest economies in the world.Also in focus was next week’s gathering of the Organization of Petroleum Exporting Countries, which should include a production update and potential commentary on tensions between the U.S. and Iran, friction that is seen posing a risk to oil production and shipping. “The duration of the U.S. and China trade war is the single most important factor” in the decision making process by OPEC and its allies, known as OPEC+, related to the production cut agreement, said Rob Thummel, portfolio manager at investment firm Tortoise. “Talks, signals, and even better— an agreement—between the U.S. and China at the G20 this weekend will dictate the OPEC+ decision.” August West Texas Intermediate crude lost 96 cents, or 1.6%, to settle at $58.47 a barrel. Prices on the New York Mercantile Exchange on Thursday settled at the highest for a front-month contract since May 22. Month to date, prices climbed 9.3%, according to Dow Jones Market Data.International benchmark August Brent crude settled unchanged at $66.55, holding ground at a roughly one-month high. Prices on a front-month contract basis were up 3.2% for the month, according to Dow Jones Market Data. The August contract expired Friday and the new front-month contract, September Brent BRNU19, -0.29% fell 93 cents, or 1.4%, to finish at $64.74. President Donald Trump and his Chinese counterpart Xi Jinping will use the G-20 meeting this weekend to “press pause” on their continuing trade war, analysts said, although uncertainty persists, especially around the treatment of technology security. The spat has put the health of global economic growth, and thus, energy demand, in question.
Trump threatens ‘obliteration,’ Iran calls White House ‘mentally retarded’ (Reuters) - U.S. President Donald Trump threatened on Tuesday to obliterate parts of Iran if it attacked “anything American,” in a new war of words with Iran which condemned fresh U.S. sanctions on Tehran as “mentally retarded.” But Trump later left the door open for talks, saying that Iran should speak to the United States “peaceably” to ease tensions and potentially lift U.S. economic sanctions.The U.S. president on Monday signed an executive order imposing additional, largely symbolic, sanctions against Iranian Supreme Leader Ayatollah Ali Khamenei and other senior figures, with punitive measures against Foreign Minister Mohammad Javad Zarif expected later this week. Iran shot down a U.S. drone last week and Trump said he had called off a retaliatory air strike with minutes to spare, saying too many people would have been killed. It would have been the first time the United States had bombed the Islamic Republic in four decades of mutual hostility.
Miscalculations in the US-Iran conflict could lead to a 'world war,' says Malaysia's Mahathir - The United States is provoking Iran and growing risks of miscalculation could lead to a “world war,” according to Malaysia’s Prime Minister Mahathir Mohamad. “I think as far as I can see, it is America, which is making all the provocation,” Mahathir told CNBC’s Tanvir Gill on Saturday, when asked which side might be responsible for miscalculations. “First, they withdrew from the (nuclear) treaty, and now they’re sending warships to the Gulf, and doing things that will provoke Iran,” he told CNBC in Bangkok, Thailand where Asian leaders were gathered for the Association of Southeast Asian Nations summit. Tensions between the the U.S. and Iran tested new highs on Thursday, when Tehran shot down an unmanned American military spy drone. If they go to war, it will not be Iran against America. It will be a world war. \ The shooting of the drone prompted U.S. President Donald Trump to approve military strikes on several Iranian targets — but he abruptly called off the attacks late Thursday. The president said he withdrew the plan because he believed the loss of life — estimated to be about 150 people — would have been disproportionate to the downing of an unmanned drone. “I am in no hurry,” Trump said on Twitter Friday. “Our Military is rebuilt, new, and ready to go.” Even before the latest escalation in tensions, the two countries appeared to be heading closer toward a military conflict — although both sides have said it’s something they hope to avoid. The Pentagon has in recent months announced plans to deploy thousands of troops to the Middle East to counter Iran, amid allegations the Islamic country was responsible for attacks on oil tankers in the region. Tehran has rejected those accusations. Mahathir on Saturday warned: “If they go to war, it will not be Iran against America. It will be a world war.” He explained that other countries that do not want to see nuclear weapons being used “will have to come in and put a stop to it.”
Iran Threatens To Shoot Down More Surveillance Drones, Claims US Cyberattack Failed - As President Trump prepares to move ahead with plans to slap new sanctions on Iran - which he promised over the weekend - the Iranians are doubling down on their own threatening language, warning that their armed forces wouldn't hesitate to shoot down more US surveillance drones if Washington continues to press them. Late last week, the Trump administration reportedly called off a planned military strike after Iranian forces shot down the drone, which was worth more than $100 million, and furthermore warned that they could have shot down an American spy plane carrying dozens of people (according to the Iranians) but they chose not to (an indication of their benevolence before the Trump administration). But even as Washington continues to lather its belligerent rhetoric with offers to engage with Tehran, the Iranians remain extremely wary, and have followed up mostly with threats of their own, according to the AP, Iran’s naval commander, Rear Admiral Hossein Khanzadi, warned Washington that Tehran is capable of shooting down other American spy drones that drift into Iranian airspace (Washington contends that the drone was flying over international waters when it was shot down). "We confidently say that the crushing response can always be repeated, and the enemy knows it," Khanzadi was quoted as saying by the semi-official Tasnim news agency during a meeting with a group of defense officials. Meanwhile, Tehran has rebutted reports that Washington launched a cyberattack against Iran late last week by warning that the attack wasn't successful. In a number that sounds slightly exaggerated, Iran's minister for information said Iran 'neutralized' 33 million attacks with its firewall last year.
Trump doesn't want to protect other countries' oil tankers — that could be a big problem -- A flurry of oil tanker attacks in the world’s busiest transit lane for seaborne oil shipments has triggered grave concerns about maritime security, with President Donald Trump suggesting the U.S. could stop providing protection to other ships. Six oil tankers and a U.S. spy drone have been attacked since May either in, or near, the Strait of Hormuz — a strategically important waterway which separates Iran, Oman and the United Arab Emirates.Trump has since said the U.S. may lessen its role in the Strait of Hormuz, as domestic oil and gas output soars and U.S. energy imports from the Middle East decline.The suggestion indicates a weakening of a nearly 40-year-old U.S. policy to defend national interests in the Persian Gulf and appeared to contradict White House officials seeking to reassure allies of the U.S. commitment to safe transport of energy through the narrow waterway. In response to Trump, Japan’s chief cabinet secretary, Yoshihide Suga,reportedly said Tuesday that the safety of shipping in the Strait of Hormuz is “a matter of life and death for our country in terms of energy security and it is extremely important for the peace and prosperity of the international community.” The Strait of Hormuz — located between the Persian Gulf and the Gulf of Oman — is seen as one of the most important waterways in the world, linking crude producers in the Middle East with key markets in the rest of the world. It plays a pivotal role for Asian economies that are heavily dependent on oil imports from the Middle East.Flows through the narrow channel in 2018 made up about one-third of total global seaborne traded oil. More than one-quarter of global liquefied natural gas trade (LNG) also transited the Strait of Hormuz last year. Daily oil flow in the Strait of Hormuz averaged 21 million barrels per day in 2018, according to the U.S. Energy Information Administration (EIA). That’s the equivalent of about 21% of global petroleum liquids consumption.
Aramco Can Keep Crude Flowing if Hormuz Hit-- Saudi Arabian Oil Co. has the experience and infrastructure it needs to keep crude flowing should supply through the Strait of Hormuz be disrupted, according to the chief executive officer of the state-run producer. “We are increasing our readiness,” Amin Nasser said in an interview in Seoul on Tuesday. “We can supply through the Red Sea and we have the necessary pipelines and terminals.” Brent crude has jumped about 8% since mid-June as worsening relations between the U.S. and Iran have magnified fears that shipments could be disrupted through the Strait of Hormuz, a narrow choke-point through which about one-third of all seaborne crude flows. There have been a series of attacks on tankers over the past few weeks and the downing of an U.S. Navy drone, which American officials have blamed on Iran. “It’s a concern for the whole world because that is an important supply route for a lot of crude, not only from Saudi Arabia,” Nasser said. Saudi Aramco operates a pipeline with a capacity of 5 million barrels a day that carries crude 1,200 kilometers (746 miles) between the Gulf and Red Sea, enabling it to ship oil from both sides of the country. But that compares with the company’s total exports of around 7 million barrels a day, meaning it would need to find other ways of getting any remaining oil to the market. In mid-May, flows through the cross-country link were halted after two pumping stations were hit by a drone attack by Yemen’s Iranian-backed Houthi rebels. The state-run company, which is the world’s biggest oil exporter, traces its beginnings to the 1930s and kept pumping crude through the Iran-Iraq war and the two Gulf Wars. Aramco would draw on that experience to keep supplies flowing, Nasser said. “We had experience through the Gulf conflict but we have always met our commitments to our customers,” he said. “So we have a track record of building enough flexibility in the system to manage a situation or a crisis.”
Trump says any war with Iran 'would not last very long,' but he still hopes for no conflict - President Donald Trump said Wednesday “I hope we don’t” have a war with Iran, but it “would not last very long.” In an interview with Fox Business Network, Trump also explained his decision to call off military strikes on Iran in retaliation for its downing of a U.S military surveillance drone last week. “I decided not to kill a lot of Iranians,” said. “I like Iranians.” Asked about the possibility of war with Iran. Trump said: “I can tell you that, it would not last very long.” “We’re in a very strong position,” he added. Trump suggested that he would not deploy U.S. troops to fight Iran if there were a conflict. “I’m not talking boots on the ground,” he said. Trump on Tuesday warned on Twitter that any Iranian attack on Americans would be met with “great and overwhelming force” and “obliteration.” “Iran leadership doesn’t understand the words ‘nice’ or ‘compassion,’ they never have,” Trump wrote. “Sadly, the thing they do understand is Strength and Power, and the USA is by far the most powerful Military Force in the world, with 1.5 Trillion Dollars invested over the last two years alone.” Trump told reporters in the Oval Office on Tuesday that he does not need an “exit strategy” on the dispute with Iran. “We would love to be able to negotiate a deal if they want to. If they don’t want to, that’s fine, too,” Trump said.
Trump says 'not talking boots on the ground' if action taken against Iran (Reuters) - U.S. President Donald Trump said on Wednesday that he was “not talking boots on the ground” should he take military action against Iran and that he had “unlimited time” to try to forge an agreement with Tehran. Iran suggested it was just one day from breaching a limit in the 2015 nuclear deal that restricted its stockpile of uranium, a move that would pressure European countries aiming to be neutral to pick sides. The fate of the multilateral nuclear deal, under which Iran agreed to curbs on its nuclear program in return for relief from economic sanctions, has been at the heart of the U.S.-Iran dispute which took on a military dimension in recent weeks. Last week Iran shot down a U.S. drone it said was in its air space, which Washington denied. Trump called off retaliatory air strikes at the last minute, saying too many people would have died. Washington also accused Tehran or its proxies of attacks in May and June on six tankers in the Gulf region, which Iran denies. Asked on Fox Business Network if a war was brewing, Trump replied: “I hope we don’t but we’re in a very strong position if something should happen.” “I’m not talking boots on the ground,” Trump said. “I’m just saying if something would happen, it wouldn’t last very long.” Speaking later at a gathering of religious conservatives, the U.S. president talked about whether there could be a new agreement with Iran, suggesting he could live without one. “If it doesn’t happen, that’s fine with me,” Trump said. “I have unlimited time, as far as I’m concerned.” Trump last year unilaterally withdrew from the nuclear deal with Iran struck by his predecessor President Barack Obama, arguing that it did not go far enough to restrict Iran’s nuclear and missile programs and other activities in the Middle East. He has since re-imposed U.S. economic sanctions on Iran, including taking the unprecedented step in May of trying to drive Iran’s oil exports to zero.
More US Warships Arrive In The Mideast Even As Trump Signals Draw Down - Despite Trump taking to Twitter Monday morning to question, "why are we protecting the shipping lanes for other countries (many years) for zero compensation," and asserting further that "All of these countries should be protecting their own ships" — the US naval build-up in the Persian Gulf region continues. The US Navy confirmed early Monday that more military ships have arrived in the US 5th Fleet area of responsibility, which includes the Persian Gulf and Middle East waters. Though not pinpointing their exact location, the additional deployment which comes in the wake of last week's US drone shoot down by Iran, that saw Washington coming very close to launching major strikes in response, is described in Navy statements as including a major amphibious assault ship and two support vessels: Monday's Navy statement says the USS Boxer amphibious assault ship, along with the amphibious transport dock USS John P. Murtha and the amphibious dock landing ship USS Harpers Ferry arrived in the 5th Fleet's area of responsibility. The AP notes that the the USS Boxer carries the 11th Marine Expeditionary Unit and a combat helicopter squadron, and departed the US west coast at the start of May as part of a regularly scheduled deployment; however, it's quick transition to the 5th Fleet area is in support of the USS Abraham Lincoln carrier strike group already there in response to Iran. The new military arrivals to the region came just as US Secretary of State Mike Pompeo met with Saudi King Salman and separately with Crown Prince Mohammed bin Salman in the port city of Jeddah to tackle the escalating crisis with Iran in the Persian Gulf.
Iran Says US Drone Came Down Full 4 Miles Inside Its Territory --On Wednesday Iran's military came forward with a new, detailed claim of the US drone's location it shot down last Thursday, which nearly resulted in a major American attack on the country.The head of the Iranian Armed Forces' Geographical Organization, Brig. Gen. Majid Fakhri, was cited as saying by the semi-official Tasnim news agency that the drone wreckage was found four miles inside Iran's territorial waters."After the shooting down of the drone, initial actions were taken and its location was identified," Gen. Fakhri said, and added, “The drone was definitely in the waters of Iran as reports show that it was four miles or more than seven kilometers inside the Iranian territorial waters.” From the start the US has insisted the nearly quarter-billion dollar RQ-4A Global Hawk UAV was in international airspace, and as a joint Stars and Stripes-Bloomberg report notes, some of the basic facts are still being disputed, especially the drone's flight path. According to the Iranian military's latest account of the events:The IRGC said on Thursday that a US spy drone that violated the Iranian territorial airspace in the early hours of the day was shot down by the IRGC Aerospace Force’s air defense unit near the Kooh-e-Mobarak region in the southern province of Hormozgan.The intruding drone was reportedly shot by Iran’s homegrown air defense missile system “Khordad-3rd”. The Islamic Revolutionary Guard Corps (IRGC) had said from the start it was responding to a violation of Iranian airspace, which it called a "red line".
Not Enough - UAE Rejects US Proof Of Iran's Role In Prior Tanker Attacks - Russia has given official backing to Iran's version of events concerning last week's drone shoot down which nearly sparked a major US-Iran war, as Bloomberg reports, and lashed out at the White House's sanctioning of Iran's Supreme Leader. "There is a very narrow window left because this is an absolutely insulting step for intergovernmental relations. But hope dies last," a top Russian Foreign Ministry official in Moscow, Zamir Kabulov told reporters of Washington's new sanctions on Khamenei."Iran will never be alone if, God forbid, the U.S. ever takes absolutely crazy and irresponsible actions against it," he said. "Not only Russia, but many countries sympathize with Iran."Meanwhile Russian media is reporting exclusive quotes from the United Arab Emirates' foreign minister which brings the entire series of events which led to the current crisis into question. Specifically the UAE has called into question unfounded US assertions that there's "proof" that Iran was behind prior May tanker attacks in the Gulf of Oman, which set the stage for the June 13 limpet mine incident and resulting blame game. Though last Thursday's dramatic drone shoot down over the gulf now makes the tanker "limpet mine attack" incident seem like a distant memory, it was a series of tanker incidents in the gulf which hastened the US-Iran collision course in the Strait of Hormuz, given the US military build-up in response to the May as well as mid-June events. “We cannot accuse any nation at the moment because we don’t have indisputable proof,” UAE foreign minister Sheikh Abdullah bin Zayed Al Nahyan said Wednesday during a joint media conference with his Russian counterpart Sergey Lavrov in Moscow. During that prior May incident, two Saudi tankers were reported attacked near the Strait of Hormuz, along with two other international vessels off the UAE port city of of Fujairah, in what the Saudis and their allies dubbed “sabotage operations”. Appearing to indirectly respond to firm assertions out of Washington that none but Iran could have been responsible - and specifically the elite IRGC force - the UAE FM said further: If other nations have more concrete information, I am sure the international community will gladly hear them out. But we have to be very serious and careful. It has to be reliable, scientifically confirmed information which would convince the international community.
Dozen US F-22 Stealth Jets Arrive In Qatar To Counter Iran - Up to a dozen US F-22A Raptor Stealth Jets have touched down at the US Air Base Al-Udeid in Qatar amid soaring tensions with Iran, and as the Pentagon continues to bolster its forces in the gulf after the recent prepared military attack called off by President Trump at the last minute. The aerial defense analysis site, The Aviationist, confirmed the new US stealth jet deployment and noted, "While it’s still not confirmed that the deployment of the Raptor was just a pre-planned rotation to the region (rather than part of a build up of forces around Iran), according to rumors, more tactical assets are being moved to the Gulf area in the following days."#BREAKING: Twelve F-22A 5th Gen. fighter jets of 94th Fighter Squadron, 1st Fighter Wing arrived Al-Udeid AB, #Qatar in-order to reinforce #USAF's combat capability in #MiddleEast for confronting hostile activities of #Iran's Islamic Regime in the region when it is necessary. pic.twitter.com/1MAfD8dft5— Babak Taghvaee (@BabakTaghvaee) June 28, 2019 On Thursday at least nine of the reported dozen F-22 Raptors belonging to the 192nd Fighter Wing of the Virginia Air National Guard were documented by local photographers as departing Moron Air Base in southern Spain, having been deployed from Joint Base Langley-Eustis, Virginia. They flew over the Mediterranean and landed in Qatar, despite their usual deployment base to the region being Al Dhafra in UAE, according to The Aviationist.
Iran seen breaking nuclear pact limit in days; Trump says 'no time pressure' - (Reuters) - Diplomats said Iran is on course to breach a threshold in its nuclear agreement within days but U.S. President Donald Trump, who has ratcheted up pressure on the Middle Eastern country, said there was “absolutely no time pressure” on the issue. The prospect that Tehran could soon violate its nuclear commitments, a week after Trump called off air strikes on Iran at the last minute, has created additional diplomatic urgency to find a way out of the crisis. Iran had set Thursday as a deadline beyond which it would exceed the threshold for stockpiles of enriched uranium allowed under its 2015 nuclear deal with major powers, which Tehran is still following even though Washington abandoned it last year. The diplomats, citing U.N. inspectors’ data, said the Islamic Republic was on course to exceed the limits soon by accumulating more enriched uranium than permitted but it had not done so by Thursday. However, Trump said of Iran on Friday: “We have a lot of time. There’s no rush.” “They can take their time. There’s absolutely no time pressure. I think in the end, hopefully, it’s going to work out. If it does, great - and if it doesn’t, you’ll be hearing about it,” he said as he greeted Indian Prime Minister Narendra Modi on the sidelines of a G20 summit in Osaka.
Iran says European efforts to salvage nuclear deal are not enough - European officials said they created a trading vehicle to help Iran get some relief from U.S. sanctions, but Tehran may see the proposal as insufficient to stop it from moving forward with a threat to violate its nuclear deal. The remaining parties to the nuclear deal, abandoned by the U.S. last year, have been scrambling to find a way to keep Iran from leaving the agreement. They held an urgent meeting in Vienna in an effort to hold Iran from violating the deal. The trade mechanism was announced after the meeting. But Iran said it would continue with its plan to enrich uranium even though it is just days away from a volume that would violate the nuclear accord. Iran’s deputy foreign minister Abbas Araghchi said Friday he would report back to Tehran on the talks. “The decision to reduce our commitments has already been made and we will continue unless our expectations are met,” he said. Araghchi said the talks were a “step forward, but it is still not enough and not meeting Iran’s expectations.” The U.S., meanwhile, warned European companies that they have a choice of doing business with the U.S. or Iran. Brian Hook, State Department’s special representative on Iran, made the comment to reporters in London Friday. “The Europeans are basically trying to placate them by setting up this trade mechanism. It’s basically a barter trade system. They had high expectations that it could handle such things as oil, which we saw as unrealistic,” said Henry Rome, Eurasia Group analyst on Iran. “It’s mainly designed to allow Iran to buy humanitarian goods. What we saw today was basically the Iranians saying we’ll get back to you. The likely outcome is it’s not good enough, and we’ll get additional nuclear escalation.”
Iran seizes 1,000 bitcoin mining machines using subsidized power - (Reuters) - Iranian authorities have seized about 1,000 bitcoin mining machines in two abandoned factories, state television reported, after warnings that the activity had led to a spike in consumption of government-subsidized electricity.“Two of these bitcoin farms have been identified, with a consumption of one megawatt,” Arash Navab, a power official in the central province of Yazd, told the television.The machines, which produce cryptocurrencies that are banned in Iran, were mostly to blame for a 7% increase in power consumption in the month to June 21, according to an Energy Ministry spokesman, quoted by the website of state-run Press TV. In 2018, Iran’s central bank banned the country’s banks from dealing in cryptocurrencies, including bitcoin, over money-laundering concerns.
US Threatens to Sanction Any Nation That Imports Iranian Oil— President Donald Trump’s special envoy for Iran further stoked tensions between Iran and the U.S. on Friday when he said the United States will sanction any country that imports Iranian crude oil.Envoy Brian Hook, in his comments to reporters in London, said that there were no exemptions, reiterating a threat the Trump administration made two months earlier.“We will sanction any imports of Iranian crude oil,” Hook said, according to Reuters. “There are right now no oil waivers in place,” said Hook, who added the administration intends to “sanction any illicit purchases of Iranian crude oil.”Hook’s comments came four days after the Trump administration announced new economic sanctions against Iran and one day after Iran Foreign Minister Javad Zarif told Trump on Twitter that “Sanctions aren’t [an] alternative to war; they ARE war.”“Negotiations and threats are mutually exclusive,” Zarif added.Special envoy Hook’s new statements came as representatives to the remaining parties to the 2015 nuclear accord—the U.S. ditched it last year—met in the Austrian capital. Per The Associated Press: At the heart of the meeting in Vienna is Iran’s desire for European countries to deliver on promises of financial relief from U.S. sanctions. Iran is insisting that it wants to save the agreement and has urged the Europeans to start buying Iranian oil or give Iran a credit line to keep the accord alive. President Trump, who’s at the G20 summit in Osaka, Japan through Saturday, indicated that his administration is keeping an attack on Iran still on table. “I think that in the end, hopefully, it’s going to work out,” said Trump of the conflict between the two nations. “If it does, great. And if doesn’t, you’ll be hearing about it.”
The Oil Crisis Saudi Arabia Can't Solve -- Saudi Arabia’s CEO Amin Nasr’s message to the press that oil flows to the market are guaranteed, should be taken with a pinch of salt.Looking at the current volatility in the Persian/Arabian Gulf and the possibility of a temporary closure of the Strait of Hormuz, the Aramco CEO’s message might be a bit overoptimistic. In reality, Aramco will not be able to keep the necessary crude oil and products volumes flowing to Asian and European markets in the case of a full Strait of Hormuz blockade. Even that Aramco owns and operates a crude oil pipeline with a capacity of 5 million bpd, carrying crude 1,200 kilometers between the Arabian Gulf and Red Sea, much more is needed to keep the oil market stable. Nasr’s move to stabilize the market is praiseworthy but should be seen as an attempt to quell fears of traders and financial analysts, especially just before the OPEC+ meeting in Vienna next week. Nasr reiterated that Aramco (aka the Kingdom) is able to supply sufficient crude through the Red Sea, reiterating that the necessary pipeline and terminal infrastructure is there. However, what analysts tend to forget, Nasr’s statement is only linked to Saudi’s oil export volumes, which will likely be not higher this summer than around the level this pipeline can support. The real issue, if it comes to a full-blown conflict, is that not only Saudi oil is being threatened. At present, between 20-21 million bpd of crude and petroleum products are transported via the Strait of Hormuz. Saudi exports are a vast part of it, but also the UAE, Iraq, Kuwait, Bahrain, Qatar and Iran, will have to look at additional routes. A closure or military action in the region will cause a temporary disruption for all maritime traffic. Besides the options that are the already on the table, such as the Saudi onshore pipeline and the UAE’s Fujairah pipeline, no other real alternatives are available, as overland trucking or rail transport is minimal. Transferring volumes via the Saudi and UAE’s pipelines is not an option at all, as the total capacity of the two is less than 10 million bpd, representing not even 50% of the current maritime flows through Hormuz. Another thing that should be noted is that pipelines can’t ship crude and crude products at the same time.
British target training of Saudi air force 'did not stop Yemen atrocities” - Government claims that British military training improved the humanitarian record of the Saudi air force have been contradicted by documents suggesting it did little to prevent atrocities. On 20 June the court of appeal ruled that British arms sales to Saudi Arabia were unlawful, in a judgment that accused ministers of failing to properly assess the risk the weapons posed to civilians in Yemen. Government lawyers, attempting to justify the arms exports, argued that British training for the Royal Saudi Air Force embedded good practice and ensured “greater compliance” with international humanitarian law. Yet court documents from the case show that indiscriminate bombing of civilians by the Saudi-led coalition in Yemen took place after British training – sometimes almost immediately after. Three days after Britain provided training – between 27 July and 14 August 2015 – up to 70 people were killed by airstrikes and shelling at the port at Hodeidah. The following month airstrikes on a wedding in the village of Wahijah, near the Red Sea port of al-Mokha, killed at least 135 people. In October 2015 repeated airstrikes on a Médecins Sans Frontières hospital in Haidan occurred, despite the hospital’s GPS coordinates being shared with the coalition. The episode prompted the UK to provide further training to the Saudi air force between October and January, including targeting training. However, in March 2016 airstrikes by the Saudi-led coalition on a crowded village market in Hajjah province killed 106 people. Days later deadly attacks struck a civilian building in the city of Taiz. “We are always being told how positive the UK’s influence supposedly is on Saudi forces, but nothing could be further from the truth. The atrocities and abuses have continued unabated, regardless of UK training and engagement.
UN Sent 24,000 Tons of Infested and Rotten “Aid” to Starving Yemenis— Since 2015, Yemen’s Customs and Consumer Protection has had to either send back or seize over 24,000 tons of aid determined unfit for consumption sent from the United Nations World Food Program (WFP). Among the “aid” included 15,000 tons of supplementary food for pregnant women and medicine. On November 6, Yemen’s Port Authority rejected and sent back a vessel from the World Food Program containing 10,000 tons of white wheat. After inspection, authorities noticed the wheat was infested with live insects. A similar incident occurred in February when authorities inspected a WFP shipment containing 96,000 bags wheat was not stamped with an expiration or production date. Another particularly notable incident took place in May of 2019. At this time, Yemeni authorities found dead insects inside 8 million kilograms of wheat. Throughout June, authorities were forced to reject nearly 130,000 bags of white beans that were either wet, rotten, or infested with dead insects. Meanwhile, the United Nations has attempted to shift blame for their unfit shipments on the Sana’a government, led by Ansarullah aka. the “Houthis.” On June 20, the UN announced it would begin suspending aid shipments to Yemen, citing accusations of Ansarullah “diverting food” shipments. The UN claimed it had no problem with the Saudi-backed government in Aden, which likely has no issue distributing rotten food to its citizens. According to the WFP, the suspension of aid is expected to impact 850,000 people.Yemen isn’t the only crisis impacted by the UN’s carelessness in regards to sending disgusting aid shipments. In 2016, the UN was caught sending expired food to Somalia meant for victims of a devastating drought.
Millions Have Fled War-torn Yemen – the US Has Accepted 50 - Since a devastating war began in Yemen in 2015, causing thedisplacement of 3 million people, the United States has taken in just 50 Yemeni refugees.Despite the deteriorating conditions in Yemen, where citizens must endure outbreaks of famine and disease amid the fighting, the number of Yemeni refugees resettled in the US has fallen almost to zero since Trump entered office.Just two Yemeni refugees were resettled in the US in fiscal year 2018 and one has been resettled so far in fiscal year 2019, according to state department statistics.This is no coincidence, considering Trump has dismantled the US refugee program, setting a record low ceiling of 30,000 refugees in total for fiscal year 2019. Advocates say this move has guaranteed that a backlog of refugees in war-torn countries such as Yemen will only become more clogged.“You can’t overstate the impact on Yemenis seeking safety in the United States. It’s become almost impossible,” said Nazanin Ash, vice-president of public policy and advocacy for the International Rescue Committee. “You have extraordinary levels of humanitarian suffering in Yemen. People can’t leave, and aid can’t get in.” As the US continues to support its close ally Saudi Arabia in the war, sellingweapons and providing intelligence, civilians in Yemen are at constant risk of airstrikes and street bombings. With the war showing little sign of slowing down, the halt of the US refugee program – which had typically taken in thehighest number of refugees in the world – is devastating.
Yemen′s Houthi rebels strike Saudi airport - Yemen's Houthi rebels attacked Abha airport in southwestern Saudi Arabia, killing one person and injuring seven others, the kingdom's official media outlet SPA said Sunday. Houthi rebels said earlier that they had launched drone attacks on airports in Abha and Jizan, both near the border with Yemen. Saudi media made no mention of an attack in Jizan. Saudi-owned Al Arabiya TV said the suspected drone hit a parking lot in Abha airport, in what a Riyadh-based military coalition described as "a terrorist attack by the Iran-backed Houthi militia."Earlier this month, Houthi rebels launched a cruise missile at Abha airport, wounding 26 people. Since then, Saudi Arabia has intercepted multiple Houthi-launched drones.The Houthis also carried out a drone strike on a key Saudi oil pipeline earlier this month. The uptick in Houthi attacks on Saudi Arabia comes as tensions between the United States and Iran soar, threatening a major conflagration in the region after a series of attacks on oil tankers near thestrategic Strait of Hormuz and the downing of a US drone by Iran this week.
Yemen urges intl pressure to curb potential oil spill in Red Sea - The Yemeni government renewed calls on the United Nations to pressure Houthi militias into allowing international teams to prevent the breakout of a potentially disastrous oil spill at the Safir offshore oil platform, which floats off Hodeidah’s northern coast. In an address to the UN Secretary General, Yemeni Deputy Foreign Minister Mohammed Abdullah al-Hadrami stressed the need to get Houthis to grant the international body’s probing technicians access to Safir. The facility contains more than one million barrels of crude oil pumped before Houthis staged a nationwide coup four years ago. The Iran-backed insurgents refuse allowing the internationally-recognized government from exporting that oil, and threaten blowing up the naval facility if they are not allowed to sell the oil reserves themselves. Any explosion at Safir will cause a catastrophic oil spill with irreversible environmental damage. Apart from Houthi threats of attack, Hadrami warned against the Houthis’ continued blocking of assessment teams from examining the reservoir, which he said was in a corrosive condition that could lead up to a shocking environmental disaster that would contaminate Red Sea and regional waters. Mohammed Ali al-Houthi, President of the Revolutionary Council, a body formed by the militants, had tabled an offer previously to sell the oil reserves stored in Safir and have the freely-elected government and insurgents split revenues. Hadrami, for his part, stressed the government's keenness to its long-standing demand for solutions on this particular issue. He underscored that the government has cooperated fully with the UN in this regard and is waiting for experts to evaluate the development of an effective strategy. The Yemeni deputy foreign minister also placed blame on the militias for causing an environmental disaster in the Red Sea.
Underwater oil pipelines sabotaged near Syria - At least five underwater oil pipelines near Baniyas in northwestern Syria were sabotaged causing an oil spill on Saturday, according to the Syrian Petroleum and Mineral Resources Ministry, the Syrian state news agency SANA reported. The Ministry reported the incident in a statement on Sunday. After divers inspected the affected pipelines, they found that five lines had been damaged. Petroleum pipelines vandalized in Banyas, repairs being carried outhttps://t.co/eCW1CbUFxT— SANAEnglishOfficial (@SANAEnOfficial) June 23, 2019Repairs began as soon as the damages were assessed and the Ministry stated that operations would return to normal within a few hours, according to SANA. Petroleum and Mineral Resources Minister Ali Ghanem told Syrian TV later that six lines had been damaged and that repairs were being conducted to return the terminal to normal operation within a few hours. Ghanem described the incident as a "cowardly terrorist attack."
Palestinians strike, protest against Kushner’s “deal of the century” - Even in this protracted and bitter context, however, the conference convened in Bahrain this week with US President Trump’s son-in-law and fellow real estate scion Jared Kushner at its head, represents the most degraded farce ever realized in the discredited name of “Middle East peace.” The so-called “workshop” in Bahrain brought together representatives of the ruling oil monarchies of Saudi Arabia and the United Arab Emirates, US officials, a smattering of Israeli businessmen, the US private equity billionaire Stephen Schwarzman, the ineffable ex-British Prime Minister Tony Blair, World Bank president David Malpass and Christine Lagarde of the International Monetary Fund. Absent, however, was any Palestinian representatives or any officials of the Israeli government, making the idea that the gathering provided some new path to peace ludicrous on its face. The Palestinian Authority boycotted the event. Its convening was met with a general strike in the Gaza Strip and demonstrations in various parts of the West Bank, including a march by 3,000 in Nablus. Some of the protesters were fired on by Israeli troops. The Israeli state did not bother to send anyone to the conference; its interests were already well represented by Kushner and the other two top US officials overseeing the proceedings, Trump's ambassador to Israel, David Friedman and White House Middle East envoy Jason Greenblatt. Kushner’s family and Friedman are longtime active supporters of the Zionist settlements, while all three unconditionally defend the right-wing government of Prime Minister Benjamin Netanyahu. Opening the “Peace to Prosperity Workshop,” Kushner delivered a speech from a stage that looked like it had been borrowed from the set of a US television game show. His main task was delivering a PowerPoint presentation of a 136-page glossy brochure issued by the White House. “For the moment imagine a new reality in the Middle East,” he told his audience of sheiks, bankers and right-wing officials, who were assembled in one of the world’s last absolute monarchies, which executes, imprisons and tortures its political opponents. Kushner’s improbable “vision” was that of the transformation of the West Bank and Gaza into a capitalist investor’s paradise, where profits would be so great, and the banks and big business so unfettered, that “money can trickle down to the people.”
Kushner: Arab Peace Initiative no basis for Israel-Palestine deal -White House senior adviser Jared Kushner said it will not be possible to solve the decades-longIsraeli-Palestinian conflict with a deal "along the lines of the Arab Peace Initiative".Kushner made the comments during an exclusive interview with Al Jazeera shortly before his departure for a Washington-sponsored "workshop" in Bahrain's capital, Manama, where officials and businesspeople from the United States, Israel, and several Arab states will discuss on Tuesday and Wednesday the economic part of the long-delayed US Middle East peace plan."I think we all have to recognise that if there ever is a deal, it's not going to be along the lines of the Arab peace initiative," said Kushner, who is also US President Donald Trump's son-in-law and has been tasked by him to lead the Middle East peace process."It will be somewhere between the Arab peace initiative and between the Israeli position," he added.Responding to whether a two-state solution was still viable given the recent comments by US Ambassador to Israel David Friedman about Israel retaining the right to annex parts of the occupied West Bank, Kushner called the Arab Peace Initiative "a great effort" but added that "if that was where a deal was going to be made, a deal would have been made a long time ago". The two-state solution closely corroborates the Arab Peace Initiative, which was proposed by Saudi Arabia in 2002. The initiative called for normalised relations between Israel and other Arab states in exchange for a full withdrawal by Israel from lands it occupied in the 1967 war, including the Golan Heights, East Jerusalem and the West Bank.
"It Would Be An Earthquake" - Three Chinese Banks Tumble After US Threatens To Cut Them Off From SWIFT - In news that initially did not receive much prominence, on Monday a US judge found three large Chinese banks — reportedly the state-owned Bank of Communications, China Merchants Bank, and Shanghai Pudong Development Bank — in contempt for refusing to comply with subpoenas in an investigation into North Korean sanctions violations. This could open the door for them to be cut off from the US financial system, i.e. SWIFT. "Should it occur, to say that China will not take that well is as large an understatement as one can conceive of. It would be an earthquake", commented Rabobank's Michael Every. The stunning development follows a May district judge order that three Chinese banks comply with U.S. investigators’ demands that they hand over records connected to the alleged movement of tens of millions of dollars in violation of international sanctions on North Korea. The publicly released court document did not name the banks, the Hong Kong company, or the North Korean entity at that time. As the WaPo adds, according to a 2017 ruling by the US DOJ, the banks were accused of working with a Hong Kong company, which allegedly laundered more than $100 million for North Korea’s sanctioned Foreign Trade Bank. The newspaper said the bank at risk of losing access to U.S. dollars appeared to be Shanghai Pudong Development Bank, whose ownership structure, limited U.S. presence and alleged conduct with other banks matched with the details disclosed in the court rulings.Shanghai Pudong Development Bank doesn’t have U.S. branch operations but maintains accounts in that country to handle dollar transactions, the report said, adding the subpoena battle will go before a federal appeals court in Washington on July 12. “The ruling means that Attorney General William P. Barr or Treasury Secretary Steven Mnuchin can terminate the bank’s U.S. account and ability to process U.S. dollar transactions,” the Post said.
Special Report: Inside the West’s failed fight against China’s ‘Cloud Hopper’ hackers (Reuters) - Hacked by suspected Chinese cyber spies five times from 2014 to 2017, security staff at Swedish telecoms equipment giant Ericsson had taken to naming their response efforts after different types of wine. Pinot Noir began in September 2016. After successfully repelling a wave of attacks a year earlier, Ericsson discovered the intruders were back. And this time, the company’s cybersecurity team could see exactly how they got in: through a connection to information-technology services supplier Hewlett Packard Enterprise. Teams of hackers connected to the Chinese Ministry of State Security had penetrated HPE’s cloud computing service and used it as a launch pad to attack customers, plundering reams of corporate and government secrets for years in what U.S. prosecutors say was an effort to boost Chinese economic interests. The hacking campaign, known as “Cloud Hopper,” was the subject of a U.S. indictment in December that accused two Chinese nationals of identity theft and fraud. Prosecutors described an elaborate operation that victimized multiple Western companies but stopped short of naming them. A Reuters report at the time identified two: Hewlett Packard Enterprise and IBM. Yet the campaign ensnared at least six more major technology firms, touching five of the world’s 10 biggest tech service providers. Also compromised by Cloud Hopper, Reuters has found: Fujitsu, Tata Consultancy Services, NTT Data, Dimension Data, Computer Sciences Corporation and DXC Technology. HPE spun-off its services arm in a merger with Computer Sciences Corporation in 2017 to create DXC. Waves of hacking victims emanate from those six plus HPE and IBM: their clients. Ericsson, which competes with Chinese firms in the strategically critical mobile telecoms business, is one. Others include travel reservation system Sabre, the American leader in managing plane bookings, and the largest shipbuilder for the U.S. Navy, Huntington Ingalls Industries, which builds America’s nuclear submarines at a Virginia shipyard. “This was the theft of industrial or commercial secrets for the purpose of advancing an economy,” said former Australian National Cyber Security Adviser Alastair MacGibbon. “The lifeblood of a company.” Reuters was unable to determine the full extent of the damage done by the campaign, and many victims are unsure of exactly what information was stolen.
Police siege aftermath: Hong Kong tense but calm as government officials dig in and anti-extradition bill protesters plan their next moves Hong Kong police have vowed to pursue anti-government protesters for the 15-hour siege of their headquarters as demonstrators retreated to map out their next steps to keep public opinion on their side after a tense week in the city. The only public gathering on Saturday was a small pro-police rally of 300 people in Central. The officers’ biggest defender in the aftermath of the unprecedented blockade that ruined the facade of the building and dealt a blow to police morale was their former chief, Andy Tsang Wai-hung. Tsang maintained that police actions against protesters – using tear gas and rubber bullets during the clashes on June 12 – were “necessary and restrained”. He described the pitched battles as more severe than those during the Occupy demonstrations of 2014, when he was police commissioner. He dismissed any need for the police to apologise to the public. The first government official to appear in public after the stand-off was Secretary for Justice Teresa Cheng Yeuk-wah. She attended the senior counsel appointment ceremony but refrained from commenting on the mayhem. She reiterated her apology for the government’s mishandling of the bill, which was meant to allow the transfer of fugitives between Hong Kong and places it lacked such an arrangement with, including the mainland, the singular focus of opposition.
No withdrawal, no victory: Why Hongkongers have not yet won the war against the extradition bill - Hongkongers may already appear to be winning the battle against the proposed extradition law amendment after the government announced its indefinite suspension of the bill last Saturday. However, Hongkongers are not celebrating this “partial victory” as the end of their fight. “Speaking from experience, even though [Lam] suspended the bill, she will only stage some public consultations, ignore all the opposing voices, and push it forward again,” Yeung said. The day after, nearly two million people—one-third of Hong Kong’s population—took to the streets to insist on their demand for a total withdrawal of the bill and mourn Leung’s passing. Then protesters threatened further escalation unless Lam fulfilled all five of their demands by Thursday evening. Those demands included the complete withdrawal of the bill, rescinding the labelling of the June 12 protests as a “riot,” the release of arrested protesters, a thorough investigation into incidents of police brutality, and Lam’s immediate resignation. Initially proposed to amend the Fugitive Offenders Ordinance, the unpopular extradition bill would render anyone in Hong Kong a potential subject of extradition to any jurisdiction, including mainland China. Many are concerned that it would allow the Chinese government to persecute dissidents and threaten the freedoms of journalists and political activists. While the suspension means halting the bill’s second reading in the legislature, the bill is only put on pause. The second reading could be restarted at any time with another notice from the Chief Executive. Therefore – despite assurances – the suspended extradition bill is still potentially an active proposal until the current term of the Legislative Council ends in July 2020.
Siege of Hong Kong police headquarters ends without clashes after 6-hour drama by extradition bill protesters Protesters ended a six-hour siege of Hong Kong’s police headquarters – their second in a week over the now-suspended extradition bill – early on Thursday morning. More than 1,000 were involved at the height of the protest, which began after 10pm on Wednesday. Around 100 were left at the end and dispersed without a fight when officers with riot shields emerged from the building in Wan Chai at 4am on Thursday. After a peaceful rally attended by thousands earlier at Edinburgh Place in the Central business district, hundreds descended on Arsenal Street, blocking the junction with Lockhart Road to all traffic and sealing the entrances to the police base. “Release the martyrs,” they chanted, referring to those arrested on June 12 after protesters clashed with police who fired tear gas and rubber bullets. Police remained barricaded inside the building throughout the night, once again making no attempt to disperse the protesters. Kong urged protesters not to block the entrances and urged them to remain peaceful and keep order when expressing their views. In a statement issued after midnight, a government spokesman urged the protesters to disperse. “It is unacceptable for some protesters to block the roads and surround the police headquarters, seriously affecting the work of the police and causing inconvenience to other members of the public,” he said
‘Democracy now, Free Hong Kong’: Thousands of protesters urge G20 to back anti-extradition law movement - Thousands gathered at Edinburgh Place on Wednesday evening calling on G20 countries to raise concerns about Hong Kong at the leaders’ summit on Friday, hours after staging a mass march to foreign consulates to lobby country representatives directly. Crowds wearing all-black spilt out of the public square, many holding signs that read “Free Hong Kong” and “Democracy Now.” Organisers, the Civil Human Rights Front (CHRF), issued a statement urging a withdrawal of the government’s suspended extradition bill. “If you believe in values like democracy, freedom, human rights and the rule of law like we do, please, we urge all of you to voice out during the G20 summit, and defend our rights together with Hong Kong people,” it read. The pro-democracy coalition have led millions on marches over recent weeks against the bill, as demands have evolved into calling for universal suffrage ahead of the July 1 pro-democracy rally.
Watch China's Propaganda In Action: Foreign Ministry Claims Massive HK Protests Were "Pro-Extradition" -- Earlier this week the internet went crazy over just how bold the communist People's Republic of China government's lies are becoming. A viral video showed a press briefing in which a foreign ministry spokesman coolly presented the still raging Hong Kong protests as the complete opposite of the reality: "As far as I know, over 800,000 Hong Kong citizens participated in the pro-extradition bill demonstration," the Chinese government official said. He continued to present what are in reality popular anti-Beijing protests in condemnation of the controversial China-backed extradition bill as actual confirmation of Beijing's line. "I think this amply demonstrated that the mainstream public opinion of Hong Kong supports this legislative work," the official stated in his brazen lie: Ha!!! Watch this chinese Foreign Ministry fool explain what happened in Hong Kong (with chinese characteristics). This revisionist version is a bit too soon for everyone to forget what really happened. #HKexit #lies #NoExtraditionToChina pic.twitter.com/0pxLMY1fgW— Kyle Bass (@Jkylebass) June 25, 2019The ultimate in communist Orwellian trolling perhaps? Maybe the talking head functionary himself doesn't understand what's going on?Or just Beijing's par for the course propaganda packaged for domestic consumption. Regardless, it's among the most brazen of many whoppers for the history books. If you can't beat'em... well then just make shit up and hijack a mass protest movement as if it's yours
China winning new Cold War on the Mekong - When the state tabloid China Daily ran a paid advertisement in the New York Times extolling the virtues of Beijing’s proliferating dams in Laos, the piece sparked a new cold war controversy. Entitled “Employment on hydroelectric project in Laos delivers better lives”, the piece stated that a proposed cascade of dams on the Nam Ou River will enable well-paid local workers to buy pickup trucks and provide the poor country with badly needed electricity. The paid placement also noted the Nam Ou cascade “is a key part of the China-led Belt and Road Initiative and is the first project undertaken by a Chinese-invested company to cover an entire river.” With its rising regional clout and massive state resources, China has recently gained a clear upper hand vis-à-vis the United States and Japan in determining the crucial waterway’s future development and direction. It’s an economics-over-environment vision that downstream nations have often opposed but without recourse or resources to fight back there is little they can do as US and Japan-backed counter-initiatives for the river wash away into irrelevance.
America Must Prepare for the Coming Chinese Empire - Robert Kaplan, BEFORE ONE can outline a grand strategy for the United States, one has to be able to understand the world in which America operates. That may sound simple, but a bane of Washington is the assumption of knowledge where little actually exists. Big ideas and schemes are worthless unless one is aware of the ground-level reality of several continents, and is able to fit them into a pattern, based not on America’s own historical experience, but also on the historical experience of others. Therefore, I seek to approach grand strategy not from the viewpoint of Washington, but of the world; and not as a political scientist or academic, but as a journalist with more than three decades of experience as a reporter around the globe. After covering the Third World during the Cold War and its aftershocks which continue to the present, I have concluded that, despite the claims of post-colonial studies courses prevalent on university campuses, we still inhabit (in functional terms, that is) an imperial world. Empire in some form or another is eternal, even if European colonies of the early-modern and modern eras are gone. Thus, the issue becomes: what are the contours of the current imperial age that affect grand strategy for the United States? And once those contours are delineated, what should be America’s grand strategy in response? I will endeavor to answer both questions. Empire, or its great power equivalent, requires the impression of permanence: the idea, embedded in the minds of local inhabitants, that the imperial authorities will always be there, compelling acquiescence to their rule and influence. Wherever I traveled in Africa, the Middle East and Asia during the Cold War, American and Soviet influence was seen as permanent; unquestioned for all time, however arrogant and overbearing it might have been. Whatever the facts, that was the perception. And after the Soviet Union collapsed, American influence continued to be seen for a time as equally permanent. Make no mistake: America, since the end of World War II, and continuing into the second decade of the twenty-first century, was an empire in all but name.
China No Match for Japan in Southeast Asia Infrastructure Race - Japan is still winning the Southeast Asia infrastructure race against China, with pending projects worth almost one and a half times its rival, according to the latest data from Fitch Solutions. Japanese-backed projects in the region’s six biggest economies -- Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam -- are valued at $367 billion, the figures show. China’s tally is $255 billion. The figures underline both the rampant need for infrastructure development in Southeast Asia, as well as Japan’s dominance over China, despite President Xi Jinping’s push to spend on railways and ports via his signature Belt and Road Initiative. The Asian Development Bank has estimated that Southeast Asia’s economies will need $210 billion a year in infrastructure investment from 2016 to 2030, just to keep up the momentum in economic growth. The latest Fitch figures, provided in an emailed response to Bloomberg, count only pending projects -- those at the stages of planning, feasibility study, tender and currently under construction. Fitch data in February 2018 put Japan’s investment at $230 billion and China’s at $155 billion. Vietnam is by far the biggest focus for Japan’s infrastructure involvement, with pending projects worth $209 billion -- more than half of Japan’s total. That includes a $58.7 billion high-speed railway between Hanoi and Ho Chi Minh City in Vietnam. For China, Indonesia is the primary customer, making up $93 billion, or 36%, of its overall. The prized project there is the Kayan River hydropower plant, valued at $17.8 billion. Across all of Southeast Asia and by number of projects, Japan also carries the day, though by a smaller margin: 240 infrastructure ventures have Japanese backing, versus 210 for China in all 10 Southeast Asian economies.
Coalition of the willing builds in South China Sea - A coalition of the willing is building in the South China Sea as European powers bolster the United States and its Asian allies’ freedom of navigation operations vis-à-vis China in the hotly contested waterway. While Europe’s military footprint in the area is still modest, the presence of a growing number of like-minded powers in China’s adjacent waters highlights shared concerns about Beijing’s strategic ambitions for the area. Europe’s entry also arguably gives greater international legitimacy to Washington’s freedom of navigation and overflight operations in the area, maneuvers China has consistently branded as illegal and a violation of its sovereignty. The coalition is building steam as the US mounts pressure on China’s wide-reaching claims to the sea and its growing use of maritime militia, often disguised as fishing boats, in so-called “grey zone” coercion tactics against smaller claimant nations. Analysts believe America’s firming deterrence in the maritime region, articulated in a new Indo-Pacific strategy paper released by the Pentagon, is raising the potential for low-level incidents to spiral into clashes that could spark a wider multinational conflict over the sea. Britain and France’s recent warship maneuvers in the South China Sea, both strongly condemned by Beijing as “illegal”, have made abundantly clear that they would side with the US over China in any conflict scenario in the flashpoint maritime area.
A Chinese invasion of Taiwan would be a bloody, logistical nightmare - Roaring out of the sky, an F-16V fighter jet lands smoothly to rearm and refuel on an unremarkable freeway in rural Taiwan, surrounded by rice paddies. . Taiwan's fighter pilots are trained to land on freeways between sorties in case all of the island's airports have been occupied or destroyed by an invasion. There's only really one enemy that Taiwan's armed forces are preparing to resist -- China's People's Liberation Army (PLA). And as China's reputation as an economic and military superpower has grown in recent years, so too has that threat of invasion, according to security experts.Taiwan has been self-governed since separating from China at the end of a brutal civil war in 1949, but Beijing has never given up hope of reuniting with what it considers a renegade province. At a regional security conference in June, Chinese Defense Minister Wei Fenghe said: "If anyone dares to split Taiwan from China, the Chinese military has no choice but to fight at all costs for national unity." In some shops in mainland China, you can buy postcards and T-shirts emblazoned with patriotic emblems promoting the retaking of Taiwan. But for seven decades, China has resisted attacking Taiwan partly for political reasons, including the prospect of a US intervention and the potential heavy human toll. But the practical realities of a full-blown invasion are also daunting for the PLA, according to experts.Ferrying hundreds of thousands of troops across the narrow Taiwan Strait to a handful of reliable landing beaches, in the face of fierce resistance, is a harrowing prospect. Troops would then have a long slog over Taiwan's western mudflats and mountains to reach the capital, Taipei. Not only that, but China would face an opponent who has been preparing for war for almost 70 years.
Water Wars: A Sinking Feeling in Philippine-China Relations - Philippine and Chinese officials will launch a joint investigation into the at-sea collision that left 22 Filipino fishermen stranded in the South China Sea. On June 9—the official Philippines-China Friendship Day—a Chinese vessel rammed and sank a Philippine fishing vessel near Reed Bank (known in Tagalog as Recto Bank), northeast of the Spratly Islands, and reportedly fled after the collision. A Vietnamese fishing vessel later rescued the Filipino crew members who had been left in the water. Philippine officials sought to downplay the collision, with Philippine President Rodrigo Duterte calling it a “little maritime incident.” After several days of protests in the Philippines on both the streets and social media, however, the Duterte administration announced plans for a joint Philippine-Chinese investigation into the collision. Critics say the Duterte administration has prioritized Philippine-China trade and investment over rival territorial claims causing conflict in the South China Sea.Philippine Senator Panfilo Lacson said a joint investigation with Chinese authorities would be tantamount to waiving Philippine ownership rights of Reed Bank. He noted that the 2016 Hague ruling on Philippine-China maritime disputes stated that the bank was within the Philippine’s 200-nautical mile exclusive economic zone (EEZ). This is only the most recent of a series of collisions: According to the Center for Strategic International Studies (CSIS), the China Coast Guard or Chinese fishing vessels were involved in at least 10 ramming incidents in the South China Sea from 2014 to 2016.The recent ramming shows how “gray-zone” conflict between Philippine vessels and the Chinese maritime militia can trigger U.S. intervention in the South China Sea. In January, U.S. Chief of Naval Operations Adm. John Richardson warned his Chinese counterpart that the U.S. Navy would treat the China Coast Guard and Chinese maritime militia vessels as combatants in any provocations. In March, Secretary of State Mike Pompeo affirmed that the U.S.-Philippine Mutual Defense Treaty applies to maritime conflict in the South China Sea, while U.S. Ambassador to the Philippines Sung Kim reiterated on June 14 that “any armed attack on Filipino vessels” would trigger U.S. obligations under the treaty. Kim said an “armed attack” would include those launched by “government-sanctioned militias,” adding that the recent ramming was a “very serious situation” and required a thorough investigation. Though such statements by the U.S., in theory, might deter gray-zone aggression from the Chinese maritime militia, such posturing could also lower the threshold for a U.S.-China conflict in the region.
Chinese and North Korean leaders pledge closer links at Pyongyang summit - Chinese President Xi Jinping and North Korea’s Chairman Kim Jong-un pledged at a two-day summit last week to deepen cooperation and try to resolve tensions on the Korean Peninsula, according to their respective state media. Xi and other high-level Chinese officials arrived in Pyongyang last Thursday for a state visit. It was a Chinese leader’s first state visit to North Korea since Hu Jintao’s trip in October 2005 and the fifth summit between Xi and North Korea’s Chairman Kim Jong-un since last year. The state media reported that both Xi and Kim supported a resumption of talks between the US and the North. US President Donald Trump walked out of his second summit with Kim in February, and no working-level talks have taken place since. China’s CCTV quoted Kim saying: “Over the past year, North Korea has taken active steps to ease tensions, but they have failed to draw active response from the relevant country [the United States]. This was not what I wanted to see.” However, Kim reportedly agreed to “maintain patience,” while adding “I hope the relevant country will see the DPRK face-to-face and address each other’s issues of interest so as to resolve the Korean Peninsula issue.” The Stalinist regime is demanding a relaxation of US sanctions in exchange for earlier measures taken, including a halt to nuclear and long-range missile tests. However, the Trump administration is insisting on the full dismantling of the nuclear weapons program first. Kim’s promise of “patience” is likely a response to Beijing’s concerns that additional short-range missile launches like those in May could be used by Washington to again ramp up tensions on the Korean Peninsula, ultimately aimed at preparing for war with China. Pyongyang has offered to dismantle its weapons program in exchange for supposed security guarantees from Washington. The regime is worried that once it surrenders its nuclear weapons and ballistic missiles—the few bargaining chips it has in dealing with the US—it will end up, like Iraq or Libya, becoming another target of invasion and regime-change operations. The Chinese president promised to address these concerns. “China, Xi said, is willing to provide assistance within its capacity for the DPRK to address its legitimate security and development concerns… and play a positive and constructive role in achieving denuclearization of the Korean Peninsula and long-term stability in the region,” the Xinhua News Agency reported. Xi stated: “The international community hopes that talks between the DPRK and the United States will move forward and bear fruit.”
Pain From Trump's China Tariffs Spreads, Reshaping Global Trade - President Donald Trump often cites China’s massive exports to the U.S. as a grave injustice hanging over the world economy. But lately it pays to look at Chinese imports for the pain that his tariff wars are inflicting on global growth. The world’s biggest trading nation last month saw imports from Japan, South Korea and the U.S. fall sharply from a year earlier, according to official data. The 27% fall from the U.S. is perhaps not surprising given a year of tit-for-tat tariffs, but a drop of 16% from Japan and 18% from South Korea is reason to consider the broader effects of Trump’s trade battles. Such data illustrate why trade is at the top of the agenda for this week’s Group of 20 meeting of leaders who preside over more than three-quarters of the global economy. While much of the focus will be on Trump and Chinese President Xi Jinping’s ability to resume talks, the other leaders in attendance have their own stakes to worry about. Global commerce is “being hit by new trade restrictions on a historically high level,” World Trade Organization Director-General Roberto Azevedo said in a report Monday that pointed to an increase in protectionist measures by G20 countries. “This will have consequences in increased uncertainty, lower investment and weaker trade growth.” Almost every day brings fresh data on the economic impact. An analysis released on Monday by Bloomberg Economics of the more than 10,000 Chinese product categories hit by tariffs already found they had led to a 26% fall in the value of their exports to the U.S. in the first quarter of 2019. That was before the recent breakdown of U.S.-China talks and an increase May 10 from 10% to 25% of tariffs on products worth some $200 billion in annual trade before the conflict, the largest tranche of $250 billion in imports affected. Trump has also threatened to hit a further $300 billion in imports from China. Monthly trade data are volatile. But in numbers like China’s May import data, WTO chief economist Robert Koopman sees evidence of the Trump trade wars rippling through supply chains and dragging on the world economy. Big economies such as the European Union, China and the U.S. are slowing for reasons ranging from Brexit to faltering manufacturing in China to the disappearing fiscal stimulus from tax cuts in the U.S. Adding to the malaise is rising uncertainty over the direction of the global economy and trade that is dampening investment, Koopman says. Then there’s the direct cost of tariffs and counter-tariffs for businesses. Each feeds into the other and a global economy changing in response, he says.
India Rushes To Lure Businesses Fleeing China With Generous Tax Breaks -India has begun offering financial incentives to entice businesses that could move from China as a result of its trade war with the United States, RT reports. Preferential tax rates and tax holidays appear to be two of the financial incentives that are being considered in India. According to an Indian Trade Ministry document, the industries it is seeking out include electronics, consumer appliances, electric vehicles, footwear and toys. It is all part of a larger plan by the Indian Trade Ministry to cut the country's reliance on imports, while at the same time boosting exports. The goal is to grow India’s manufacturing base and facilitate Prime Minister Narendra Modi’s flagship ‘Make in India’ initiative, especially after the country's top economic advisor admitted that a change in the method used to calculate India's GDP led to "a significant overestimation of growth," and estimating that India's economy grew at an average of 4.5% a year between March 2011 and March 2017 — far weaker than the 7% average rate reported by the government over that period. The goal of the program is to boost the country's manufacturing to 25% of the economy by 2020. Due to their geographical adjacency, China is India’s largest commercial partner, although that could soon transform to competitor. The plan could help India narrow its massive trade deficit with the world's second largest economy.Investments by Chinese companies could be diversified across various sectors of the Indian market, including smartphones and components manufacturing, consumer appliances and day-to-day use items, 95% of which are already imported from China. There have also already been 150 items identified by the Indian government where exporters could increase business with China. They include "prepared or preserved potatoes, synthetic staple fibers of polyesters and t-shirts, hydraulic power engines, and superchargers for motors."
UN world population report predicts slowing growth rate, 10.9 billion peak by 2100 The latest global population report from the United Nations estimates the number of people on the planet will peak at 10.9 billion by the end of the century. The vast majority of population growth is expected to come from sub-Saharan Africa, with declining population growth predicted in Asia, Europe and Latin America by 2100. Underpinning the UN estimates is the observation of declining global fertility rates. At the beginning of the 20th century average global fertility rates sat around six births per woman. By 1990 this had fallen to 3.2, and in the latest report is currently averaged at 2.5 births per woman. It is predicted average fertility will continue to drop over the course of the century, to 2.2 in 2050, and finally 1.9 births per woman by 2100, ultimately suggesting a global population decline by the next century. Of course, these birth rates are not even across the world, and more than 90 countries are already registering birth rates at below replacement levels (less than two births per woman). Sub-Saharan Africa, on the other hand, is still averaging 4.6 births per woman, leading the UN report to estimate overall population in the area to double by 2050. While this general estimate that the global population should peak at under 11 billion is better news than some earlier higher estimates that it would reach as high as 15 billion by the end of the century, the researchers behind the study suggest the vast majority of population growth coming over the course of this century will occur in the world's poorest countries. .
Did Venezuelan Coup Leaders Pocket $70 Million From Citgo's Stolen US Assets? -Venezuela’s government has claimed the Department of Justice will investigate Citgo’s opposition-appointed board for the theft of $70 million. But the board is itself the product of a massive theft – that of the elected government’s wealth. Former Exxon Lawyer and Venezuela opposition envoy to Washington, Carlos Vecchio, may have overseen a multi-million dollar fraud scheme since his political allies were handed control of his country’s US-based oil accounts. On June 17, Venezuela’s government claimed that the US Justice Department was opening an investigation into Citgo’s opposition-appointed board of directors. Hours later, the ad-hoc council confirmed it had received a subpoena from US officials. Citgo appeared to confirm the existence of the US government probe, stating that it “received a subpoena from the Department of Justice, which has been conducting a multi-year investigation into corruption practices in PDVSA.” Citgo is a subsidiary of Petroleum of Venezuela (PDVSA), the country’s state-owned oil company. Citgo said it has “pledged full cooperation” with the investigation. It did not specify the nature of the subpoena or whether it concerned illegal activities alleged to have taken place before or after Guaido’s appointees took control of the company.
Venezuela foils attempt on President Maduro’s life: government Venezuela thwarted a US-linked plan to assassinate President Nicolas Maduro and seize power from his socialist government, Communications Minister Jorge Rodriguez alleged on Wednesday. Active and retired military officers were involved in the plan, which was set to take place on Sunday or Monday, he said, accusing Chile and Colombia of also being involved in the alleged coup attempt. Rodriguez added that opposition leader Juan Guaido was planning "a bloodbath." Guaido, who has the support of the United States and about 50 other countries to replace Maduro, dismissed the attempted coup claims as fiction, saying the media had "lost count" of how many times the government had alleged this. In a nationally televised address, President Maduro accused the US of being responsible and that Colombian President Ivan Duque was also involved as his "complicity" was "evident." The Venezuelan leader said he would be unforgiving of any attempts at a coup d'etat. "We would be ruthless in a revolutionary counter-offensive against a attempted fascist coup — ruthless!" Maduro said. "That's not called politics," he added. "That's called fascism." Earlier on Wednesday, Colombian President Duque called for an end to Maduro's "dictatorship" during his speech at the inauguration of the 49th OAS General Assembly in Medellin. "We can not look on from a distance at what is happening, our duty is to end the dictatorship, our duty is the freedom of the Venezuelan people," Duque said.
Erdogan Dealt Stunning Blow as Istanbul Elects Rival Candidate - Turkish opposition candidate Ekrem Imamoglu won the redo of the Istanbul mayor’s race by a landslide on Sunday, in a stinging indictment of President Recep Tayyip Erdogan’s economic policies and his refusal to accept an earlier defeat. Imamoglu, backed by opposition parties including CHP, won 54% of the vote, and the ruling AK Party’s candidate, former Prime Minister Binali Yildirim captured 45%, according to state media. Political upstart Imamoglu broadened his margin of victory to nearly 800,000 votes from 14,000 in the March 31 balloting, a clear sign voters are concerned about the crumbling of Turkey’s democratic foundations and an economy reeling from a spike in consumer prices and unemployment. Erdogan, who had challenged Imamoglu’s win in the original vote, accepted the outcome of the rerun he championed, but has hinted the new mayor could run into legal problems. He suggested Imamoglu might be tried for allegedly insulting a provincial governor, and a prison sentence could lead to his ouster -- much as Erdogan lost his own seat as Istanbul mayor in 1998 for reciting an Islamic poem deemed a threat to Turkey’s secular order. Losing Istanbul is much more than ceding control of Turkey’s largest city and commercial powerhouse. The mayor’s job was the springboard for Erdogan’s own political career, and if Imamoglu, 49, performs well in the position, then the president may find himself with a future challenger. Defeat in Istanbul, home to about a fifth of Turkey’s 82 million people, also strips Erdogan’s party of a major source of patronage and handouts. By some estimates, the city absorbs a quarter of all public investment and accounts for a third of the country’s $748 billion economy.
NATO Tells Russia to Destroy New Missile or Face Consequences - NATO defense ministers will hold talks on Wednesday over their next move if Russia doesn’t destroy a new missile system that could allow for short-notice nuclear attacks throughout Europe, which the United States has said violates the 1987 Intermediate-range Nuclear Forces Treaty (INF), according to Reuters. “We call on Russia to take the responsible path, but we have seen no indication that Russia intends to do so,” said Secretary-General Jens Stoltenberg at a news conference, adding “We will need to respond.”While he declined to go into further detail, diplomats have said their defense ministers will consider allowing more flights over Europe by nuclear-capable US warplanes, as well as more military training and the strategic repositioning of US sea-based missiles. The United States and its NATO allies want Russia to destroy its 9M729/SSC-8 nuclear-capable cruise missile system, which Moscow has so far refused to do. It denies any violations of the INF treaty, accusing Washington of seeking an arms race.Without a deal, the United States has said it will withdraw from the INF treaty on Aug. 2, removing constraints on its own ability to develop nuclear-capable, medium-range missiles.The dispute has deepened a fissure in East-West ties that severely deteriorated after Russia’s seizure of Crimea and its involvement in Syria. –Reuters On Monday, Russia responded – warning of an ongoing standoff comparable to the 1962 Cuban missile crisis if the United States deploys land-based missile systems near Russian borders. Stoltenberg said there were no such plans according to the report.
Exclusive: Western intelligence hacked ‘Russia’s Google’ Yandex to spy on accounts – sources (Reuters) - Hackers working for Western intelligence agencies broke into Russian internet search company Yandex in late 2018, deploying a rare type of malware in an attempt to spy on user accounts, four people with knowledge of the matter told Reuters. The malware, called Regin, is known to be used by the “Five Eyes” intelligence-sharing alliance of the United States, Britain, Australia, New Zealand and Canada, the sources said. Intelligence agencies in those countries declined to comment. Western cyberattacks against Russia are seldom acknowledged or spoken about in public. It could not be determined which of the five countries was behind the attack on Yandex, said sources in Russia and elsewhere, three of whom had direct knowledge of the hack. The breach took place between October and November 2018. Yandex spokesman Ilya Grabovsky acknowledged the incident in a statement to Reuters, but declined to provide further details. “This particular attack was detected at a very early stage by the Yandex security team. It was fully neutralized before any damage was done,” he said. “Yandex security team’s response ensured that no user data was compromised by the attack.” The company, widely known as “Russia’s Google” for its array of online services from internet search to email and taxi reservations, says it has more than 108 million monthly users in Russia. It also operates in Belarus, Kazakhstan and Turkey. The sources who described the attack to Reuters said the hackers appeared to be searching for technical information that could explain how Yandex authenticates user accounts. Such information could help a spy agency impersonate a Yandex user and access their private messages. The hack of Yandex’s research and development unit was intended for espionage purposes rather than to disrupt or steal intellectual property, the sources said. The hackers covertly maintained access to Yandex for at least several weeks without being detected, they said.
Sanctions against Russia at Council of Europe lifted sparking outrage from Ukraine - Russian representatives will be allowed to return to the Council of Europe’s parliamentary assembly after the body voted to restore their voting rights. Moscow was barred from the international assembly five years ago over its annexation of Crimea – and its return has provoked fury from Ukraine. The decision, originally scheduled for 8pm on Monday, was only taken in the early hours of Tuesday after 68 speakers queued up to speak and 200 amendments were tabled. All but one minor amendment failed to pass, and Russia was readmitted by 118 votes in favour and 62 against, with 10 abstentions. The news came less than a week after a team of investigators connected the Kremlin to the events that led to the downing of Malaysia Airlines flight MH17 over eastern Ukraine in 2014. Russia had threatened to quit the Council of Europe’s assembly altogether if it was not allowed to vote in Wednesday’s election for a new general secretary of the body. The election is to replace Norwegian Thorbjørn Jagland, who has headed the organisation since 2009. Russia has also frozen its considerable €33m (£29.5m) annual budget payments to the Council of Europe since 2017.
Demographic Doom- Germany, Italy, Korea, & Japan Face Workforce Collapse By 2050 - Forget the trade war, debt, deflation, automation, and artificial intelligence: one of the most significant threats to the global economy and the future of the world as we know it is demographics.A new OECD report, published by International Business Times, said Korea, Japan, Germany, and Italy could see their working-age populations decline to dangerously low levels by 2050.The report took each OECD country's population between the ages of 20 and 64 in the year 2000 as a base and was able to project the 2050 population. What they discovered was the working class population by 2050 would be 80% of its base year in Korea and Italy. In Japan, the workforce population would be much worse, approximately 60% of its original size. For the OECD as a whole, there are about 34 countries from around the world, the size of the working age population is expected to increase by 111% of its original size by 2050. Much of the growth will be driven by stable birth rates and growing populations, like Australia and Turkey.The OECD noted that Japan's working-age population has been in collapse for nearly three decades. Korea's working-age population was expanding until just recently but is expected to begin contracting this year. For countries experiencing a decline in the working-age population, there will be widespread consequences across all aspects of the global economy: as households shrink, so does discretionary spending, and ultimately will impact living space. In developed markets, large cities will see increased pressure on real estate and rent prices for apartments.
GNI-per-head rankings: The sad stories of Greece and Italy - My co-fellow at Bruegel, André Sapir, has published a paper on the Bruegel website comparing the recent economic history of Belgium and Italy.[1] In 1990 the two countries were very similar in terms of income per head. Now Italy is some 20% poorer than Belgium. It is interesting to extend the growth comparisons of EU countries beyond Belgium and Italy. This is done in Chart 1, reporting the rankings according to Gross National Income per head of the EU countries. Countries currently in the euro-area are in blue, non-euro-area countries are in yellow, average European figures[2] are in green and Italy and Greece are in red, for reasons that will sadly become clear below. By clicking on “Replay”, the rankings – and the underlying GNI per capita levels – move between 1990 and 2017. A few interesting developments appear:
- Italy was 6th in the ranking in 1990, very close to Belgium. It climbed to 5th position in 1994, then it started its relentless fall in the rankings – to 7th position in 2000, very close to France, and further down in 2017 to 11th position, below both the euro-area and EU average levels and not far from Spain in 12th position.[3] So, in close to three decades, Italy lost six positions in the ranking of income per head.
- In the same period Spain roughly maintained its ranking, between the 12th and the 13th position; similarly, Portugal moved only between the 14th and the 16th position.
- Ireland climbed 14 positions in the ranking between 1990 and 2017, ending in the first position. Its path, however, was very unstable; it lost 10 positions during the Great Recession, while strongly recovering after 2015. Furthermore, the choice in the chart of Gross National Product instead of Gross Domestic Product does not fully eliminate the statistical distortion due to the posting in Ireland, for tax reasons, of large profits by multinational companies, nor the effects of the location in Ireland of aviation leasing companies – so much that the Central Bank of Ireland has promoted the calculation of a Modified Gross National Income figure. In 2016, this was estimated to be 30% lower than GDP.
- Germany occupied the first position in 1991-1995 but then lost heavily to reach 8th position in 2005. However it subsequently recovered, to end 5th in 2017.
- Sweden and Denmark have switched positions between 1990 and 2017, the former was 3rd in 1990 and 6th in 2017, the latter was respectively 7th and 2nd in the two years.
- The United Kingdom’s position has remained about constant around the 10th position.
- Greece started 11th in the ranking in 1990 and was 17th in 2017, having heavily suffered during the Great Recession – in particular after 2010.
- It is only in the last few years that some central European countries – such as the Czech Republic, Estonia and Slovenia – climbed towards the median country in the ranking.
Italy's Salvini Calls Blocked Migrant Vessel A 'Pirate Ship'; Tells Berlin And Amsterdam To Take Refugees Italy's Deputy Prime Minister Matteo Salvini called a NGO migrant transportation vessel a "pirate ship," and suggested that Germany and The Netherlands should split the 43 passengers who were picked up off the coast of Libya, according to Newsweek. "Does the European Union want to solve the Sea Watch problem? Easy," Salvini wrote on Facebook, "Dutch ship, German NGO: Half of the immigrants in Amsterdam, the other half in Berlin. And seize the pirate ship."A group of 10 migrants who were among the original contingent of those currently aboard Sea-Watch 3 were allowed to disembark at Lampedusa by Italy for medical reasons back on June 12. Three unaccompanied minors, the youngest of them just 12, remain onboard.Salvini argues that his country has taken in too many of the migrants picked up by rescue boats, and that only a fraction are genuinely fleeing war. He had already once refused entry to Sea-Watch 3, only to have the decision overturned by the ECHR in May. Sea-Watch 3 landed at Lampedusa with the 65 migrants it had rescued from a rubber dinghy in the waters off Libya before the ship was impounded for three weeks. It was then released back to the NGO by Italian authorities. -NewsweekAccording to the European Commission, 27,800 refugees have been resettled across Europe between 2015 and 2017 through various EU assistance programs. From 2018 to today, another 32,071 have been resettled - with a target of 50,000 by October of this year. The programs allow people to make the journey into Europe without making the perilous journey byland and sea, as tens of thousands of people have died after boarding ramshackle boats in an attempt to cross the Mediterranean. Italy's frustration over accepting a flood of migrants is undoubtedly responsible in large part for the election of Salvini - a hard-line nationalist who has taken aggressive measures to stem the tide of migrant boats docking in Italian ports. Salvini has repeatedly called on other European nations to shoulder the burden.
Germany Can't Locate Scores Of ISIS Fighters Who May Have Slipped Back Into The Country - The German government can't locate over 160 German "Islamic State" sympathizers who left home to fight with the terrorist organization and may have returned to Germany, according to Welt am Sonntag. The Federal Ministry of the Interior speculates that most of them were likely killed in combat, but that they could have "succeeded in escaping and/or disappearing" back into the country. The ministry added that it's unlikely that the individuals would pass unnoticed in Germany because of "various measures (including wanted lists or entry bans), which make uncontrolled re-entry much more difficult." The request for information was made by the Free Democrats (FDP), whose secretary general Linda Teuteberg told Welt that it was highly disturbing that further steps weren't taken to prevent potential ISIS fighters from re-entering Germany "in light of the known patchy protection at the EU's external borders." Teuteberg added that the government has "no plan for dealing with foreign fighters from Germany" or prosecuting them for their actions. "This applies to the Germans detained in the conflict zones, as well as the more than 200 former IS supporters who are now back in Germany," she said, adding that German authorities should step up measures to strengthen German authorities' ability to investigate and prosecute war crimes on foreign soil. In April, German prosecutors charged a 27-year-old German woman was busted by an undercover German security services officer she enlisted to drive her to the Middle East so that she could join up with the Islamic State, which she had been supporting some time. During the drive, she told him all about her time in the organization - which the German recorded.
As The EU Refuses More Migrants, 1000s Trapped In The Balkans Are Overwhelming The System -There are numerous reports that an influx of migrants is overwhelming the already-fragile system in the Balkans. You may think this is not pertinent if you don’t live in Europe. But just like the collapse of Venezuela, the Balkan War, and the collapse of Greece, there are patterns of behavior to which attention should be paid.Here’s a quick video with a glimpse at the situation occurring right now in Bihac, a city of about 61,000 people in the northwestern corner of Bosnia. Some have gone so far as to call it a humanitarian crisis, and others have said the number of migrants is increasing rapidly. Although the official number is around 4000 migrants, it’s estimated that the real number may be as many as 30-50,000. When I asked Selco if they outnumbered Bosnians, he replied, “Not yet. But in some parts, there are more capable immigrants then capable locals.” This crisis has caused havoc across the region, yet many locals are unaware of the depth of the issue. (Boy, does that sound familiar. Cognitive dissonance, it seems, is not an American problem.) I asked Selco to share with us what he has witnessed. Here’s what he has to say. ~ Daisy
Dalai Lama: Europe Will Turn 'Muslim Or African' If Migrants Not Returned "To Their Own Land" - The Dalai Lama has warned that 'the whole of Europe will eventually become a Muslim, African country" unless refugees that have been taken in are not returned to their home countries. Speaking with the BBC's Rajini Vaidyanathan from his home in the mountainous town of McLeod-Ganj in Northern India, the 83-year-old spiritual leader said that while Europe was under an obligation to take in those who need help, they must ultimately be returned to their homelands. "European countries should take these refugees and give them education and training, and the aim is return to their own land with certain skills," said the Dalai Lama, adding "A limited number is OK, but the whole of Europe [will] eventually become Muslim country, African country - impossible." "Receive them [migrants], help them, educate them, but ultimately they should develop their own country. I think Europe belongs to the Europeans." The Dalai Lama sought refuge in India, where he has been living in exile with 10,000 Tibetans.
Johnson’s Brush With Police Puts Leadership Bid in Turmoil - Boris Johnson’s bid to become the U.K.’s next prime minister was thrown into turmoil after an argument with his partner prompted police to visit his London residence. Officers were called to the home Johnson shares with Carrie Symonds shortly after midnight on Friday, six hours after he was confirmed as the front-runner in the race to succeed Theresa May. Police said they found no cause for action as both Johnson and Symonds were safe and well after a neighbor raised concerns for her safety. But the incident dominated Saturday’s U.K. newspapers and threatened to damage Johnson’s campaign at a critical time in the Conservative Party leadership contest. On Saturday, Johnson was asked several times by journalist Iain Dale in front of an audience of Tory party members on whether the incident meant he’s fit to become prime minister. The audience booed Dale for pressing the front-runner, and cheered Johnson when he dodged the question. "Most people would rather judge my ambition and character by my program,” Johnson said. Foreign Secretary Jeremy Hunt, his only remaining rival in the contest, also appeared at the event in Birmingham, England. Hunt wrote to Johnson on Friday evening before the altercation became public effectively accusing him of hiding from questions and avoiding media scrutiny. This latest incident will make that more difficult for the former London mayor as reporters are now staked out on his doorstep. “Scrutiny can be uncomfortable,” Hunt wrote in the letter released to the media. ”But if we can’t handle it with friends, we won’t deserve to lead against our opponents.”
Ireland warns British PM contenders against ‘dumbing down’ border issue ( Reuters) - The contenders to become Britain’s prime minister should not “dumb down” the issues Brexit presents for the Irish border by suggesting simplistic solutions, Irish Foreign Minister Simon Coveney said on Friday. The candidates seeking to succeed Theresa May have insisted they will seek to renegotiate the United Kingdom’s divorce agreement with the European Union. In particular, they are demanding changes to the Irish “backstop” - a guarantee to ensure no return of extensive border checks between EU-member Ireland and British-run Northern Ireland. Lead candidate Boris Johnson has said the border issue could be solved during a period of transition, while Britain sorts out future EU relations - a proposal knocked back by Dublin - while Jeremy Hunt repeated again this week that unspecified technology could keep the currently seamless border open. “I’m very careful not to get involved in the leadership contest in the UK, that would be wrong... But I think it is important that what are presented as facts in the debates we’ve heard to date are actually scrutinized and challenged,” Coveney was quoted as saying by the Irish Times newspaper. “I do think some of the rhetoric we have heard in the context of the leadership debates in the UK is simply not based on reality - I say that respectfully - these issues cannot be dumbed down into simplistic solutions such as technology will provide all the answers. “We have to respect the British political system, but we have a responsibility to ensure that the commentary in relation to Ireland and Ireland’s position on Brexit is based on facts... People are entitled to their opinions, but they are not entitled to their own facts.”
Boris Johnson does speak to Steve Bannon, says Nigel Farage - Boris Johnson does speak to Steve Bannon, Nigel Farage has said, increasing the pressure on the Conservative leadership frontrunner to explain his links to Donald Trump’s controversial former campaign manager. “Steve likes to be seen at the centre of the action. He knows Boris, he speaks to Boris. Steve speaks to virtually everybody,” Farage told a press conference when asked what he knew of Johnson’s links to Bannon. The Brexit party leader said: “I’ve known Steve Bannon since 2012. There’s no great secret about that. Boris, of course, got to know Bannon when he was foreign secretary, when he was visiting Washington and going into the West Wing, and that’s how those two got to know each other.” Farage’s comments follow the emergence of video footage in which Bannon speaks about his relationship and contacts with Johnson, and says he helped him put together his first speech after his resignation as foreign secretary, in which Johnson condemned Theresa May’s Brexit strategy.
Brexit: as good as it gets - Asked, in effect, during an interview by the BBC's Laura Kuenssberg why the EU would renegotiate the Withdrawal Agreement, despite having unequivocally declared it would not, Alexander Boris de Pfeffel Johnson, had this to say: First of all, don't forget, that as I say they got the Brexit MEPs they don't particularly want. They want us out, they've got the incentive of the money. They've also got to understand, Laura, is what has changed and what will be so different is that the intellectual capital that had been invested in the whole backstop had really come from the UK side. We were committed to it. We actually helped to invent it. We were the authors of our own incarceration. Take that away. Change the approach of the UK negotiators and you have a very different outcome.Taken on its own, this is gibberish. It lacks coherence and meaning. In order to understand what the man is saying one has to delve into other parts of the interview, and reconstruct his statements, assembling the bits in an attempt to work out what the man actually means. But, before we go there, Kuenssberg asks what happens if that isn't enough. Johnson replies:… the other tool of negotiation that you should use, not only the incentives of getting this thing done, moving it over the line, getting the money across and all the rest, but you have the extra incentive of course that the UK will be ready to come out as you know on WTO terms. This is the best the man can offer, in a soft-focus interview where he is in control and has every opportunity to state his case on Brexit. And still he can't make himself clear. But if – as we are forced to do – we dip into the rest of the interview, we can perhaps distil some of the clarity that we need, that Johnson is unable to deliver.
Boris Johnson’s premiership could be an ‘opportunity for disaster’, warns ex-civil service chief - A Boris Johnson premiership would be an “opportunity for disaster” with Britain facing its most “perilous” state for decades over Brexit, the former head of the civil service has warned. Lord Kerslake delivered the scathing verdict as he claimed the Conservative leadership frontrunner’s promise to take Britain out of the EU by Halloween with or without a deal “is a complete hostage to fortune”. By tying himself so emphatically to delivering Brexit by the 31 October, Lord Kerslake said Mr Johnson had put himself in the position of an escapologist who had put on a “straitjacket, padlocked the door and started the tap running”.The former mandarin added that Brexit had “completely paralysed” both Westminster and Whitehall, causing one of the most fractious periods in recent memory and Britain facing its most “perilous” state than at any point in his long career. The remarks came as Mr Johnson kicked off a media blitz on Tuesday and categorically ruled out a further extension to the Brexit process beyond the Halloween deadline, insisting: “Do or die, come what may.” The ex-foreign secretary said that tweaks to Theresa May‘s deal would not be enough, and claimed his government would deliver a “new withdrawal agreement” – despite the EU repeatedly saying there will be no renegotiation. Delivering the Chamberlain lecture on Tuesday, Lord Kerslake, said Ms May’s political career was effectively ended by Brexit, and the person most likely to succeed her on 23 May was Mr Johnson. “Boris has placed at the very centre of his campaign the commitment that we will leave the EU on 31 October, deal or no deal. This a complete hostage to fortune,” he said. “At the same parliament has been clear, rightly in my view, that it will not countenance leaving the EU without a deal. It is always a good maxim in politics not to enter a room unless you know that you can get out of it,” the former civil service chief added.
Brexit civil servant in charge of no-deal planning quits The top government official in charge of no-deal Brexit planning has quit just as the chances of crashing out of the EU appear to have increased. Tom Shinner, 33, director of policy and delivery coordination at the Department for Exiting the EU, was in charge of coordinating the domestic policy implications of Brexit across government departments to ensure a smooth exit from the EU. His departure comes as industry leaders are questioning whether the UK will be as prepared for no deal in November, which lead contender to be prime minister Boris Johnson says will happen “do or die” unless the UK gets a new deal in Brussels. As fears in Ireland grow over the increasing likelihood of no deal, there have also been personnel losses with two key members of the Brexit team moving on. It is understood that Shinner is leaving the civil service altogether to go into the private sector. His departure comes hot on the heels after Karen Wheeler, the official in charge of “frictionless” Brexit border planning including emergency plans for Dover and Northern Ireland in the event of no deal, left her post in Her Majesty’s Revenue & Customs. A former aide to the ex-Brexit secretary David Davis once said Shinner was so pivotal to no-deal planning that if he left his job Brexit would not happen. “There is actually a Mr Big of no deal in Whitehall, very clever and very well paid, who was so integral to the process we joked that if he was hit by a No 53 bus on Parliament Square, Brexit wouldn’t happen!”, former Conservative Party MP Stewart Jackson wrote in the Times in an article sources said was a reference to Shinner. DExEU said Shinner’s departure would not affect the “high standards” of delivery at the department as no-deal planning had been so advanced ahead of 29 March, the original Brexit Day, with work continuing apace.
Johnson Refuses to Rule Out Suspending Parliament: Brexit Update Boris Johnson’s Brexit strategy faces growing opposition from Tory members of Parliament determined to prevent a no-deal Brexit, despite the leadership front-runner saying there was only a “million-to-one” chance of it happening. Even Theresa May hinted she might be willing to vote against Johnson -- or his rival Jeremy Hunt -- if they pursued it. Jeremy Hunt said the reality of British politics is that no leader could survive if they don’t quickly deliver the U.K.’s split from the EU. “No prime minister is going to last any time at all if they don”t deliver Brexit and deliver it very quickly. That is the reality of British politics. that’s not about Jeremy Hunt, it’s about anyone who does that job,” Hunt said at a Hustings event for Tory members. He also reiterated his commitment to a no-deal divorce if talks fail. “If we get to October and there is no prospect of a deal that we can get through Parliament and no deal is on the table, as I sincerely hope it would be, then I’m absolutely clear I will leave,” he said. Boris Johnson refused to rule out suspending Parliament in order to force through a no-deal Brexit on Oct 31, even though he said he thought it was unlikely and he isn’t attracted to the idea. Proroguing, or suspending, Parliament is one method a prime minister could use in order to ensure the U.K. Leaves the EU on Oct. 31, however it could cause a constitutional crisis. “I’m not attracted to the idea of a no deal exit from the EU but I think it would be absolute folly to rule it out,” Johnson said when asked if he would rule out suspending Parliament at a Hustings event for Tory Party members. "I don’t particularly envisage the circumstances in which it would be necessary to prorogue Parliament, nor am I attracted to that expedient," he said.
Lloyds freezes 8,000 offshore bank accounts after money laundering crackdown Lloyds has frozen 8,000 accounts of offshore banking customers after they failed to provide identity information in response to a money laundering crackdown in Jersey.The lender asked thousands of account holders to provide extra “know your customer” information in January 2016 but, three years later, thousands had failed to respond satisfactorily.The news, first reported by the Financial Times, comes days after Jersey, Guernsey and the Isle of Man announced they will open up their company registers to public scrutiny. All three jurisdictions, which have been criticised for aiding financial crime and tax avoidance, will allow the public to access a register of the beneficial owners of offshore companies incorporated in their jurisdictions. Changes will be implemented by 2023 following growing international pressure over the lack of transparency in offshore tax havens.
Ethics fly out of the window at Oxford University when big donors come calling - What do we know about Stephen Schwarzman, the US financier whose name, following his £150m donation to the University of Oxford, is destined to become synonymous – as the Schwarzman Centre – with the humanities, the study of ethics in particular? Much of Oxford’s press release introducing him to British audiences dwells on the philanthropy evidenced in already-colonised academic zones: the MIT Schwarzman College of Computing; the Schwarzman Scholars programme at Schwarzman College (in China); the Stephen A Schwarzman Building (formerly known as New York Public Library); Yale’s Stephen A Schwarzman Center, Yale protesters having had less success, to date, than angry parents at Schwarzman’s old school, Abington. For a donation of $25m, he had wanted it renamed after himself, with separate spaces going to his twin brothers, Mark and Warren. But it would be mistaken, it turns out, to conclude from the university’s reverent summary of Schwarzman’s academy-naming frenzy that the donor is concerned only with scholarship. For those in private equity, where he made his estimated $11.6bn fortune, Schwarzman needs no introduction; others might find it more illuminating to situate him within Philip Green’s aesthetic movement. The men’s extreme experiments in partying, in different countries but with a similar disregard for either taste or national adversity, must add weight to the theory that some great innovations are, as Malcolm Gladwell once put it, “in the air”. Shortly before he made £4.62bn from the flotation of Blackstone, a private equity behemoth, Schwarzman held a 60th birthday party so costly and vulgar that it still symbolises for some US analysts the depths of pre-crash excess. Rod Stewart sang, for a reported £1m. Donald Trump attended. Schwarzman’s 70th in 2017, staged at his Palm Beach estate, offered acrobats, Mongolian soldiers, fireworks, Gwen Stefani and – ethicists still debate the intentionality of the scripture reference – two camels. Ivanka Trump and Jared Kushner stood proxy for the new president, who was detained nearby, introducing the Japanese prime minister, Shinzo Abe, to Mar-a-Lago. In yet another uncanny similarity, both Green and Schwarzman were made unelected “tsars”: the now disgraced Green by David Cameron, as an “efficiency tsar”, Schwarzman by Trump, as a “job czar”. For universities such as Yale, MIT and Oxford, the Trump donor’s valued support for a semi-literate liar, racist, molester of women and threat to international security hardly constitutes grounds – being so much less directly compromising than the rapacious business model, criticised for associated redundancies and cuts, that contributed to Schwarzman’s riches – for squeamishness.
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