Expectations suddenly are rising that the Fed might not cut interest rates this week -Surging energy prices Monday helped add to sentiment that the Federal Reserve suddenly might not be in such a hurry to cut interest rates. While markets still see the central bank lowering its benchmark overnight lending rate by a quarter point at this week’s Federal Open Market Committee meeting, the case for continued cuts seemingly has gotten weaker. Traders in the fed funds futures market on Monday were pricing in a 34% chance that the Fed will stay put on rates; the probability was zero a month ago and just 5.4% a week ago, according to the CME. That came amid some changing economic trends as well as inflation pressures caused by a 14% jump in oil prices. Rising inflation makes the Fed more likely to tighten policy or at least hold the line rather than to cut rates. “While the push-through of inflation from oil prices to core prices is small, the jump in overall prices, in combination with signs that core inflation is already heating up, may make it more difficult for the Fed to cut rates further,” said Beth Ann Bovino, U.S. chief economist at S&P Global Ratings. “They had a cushion to fall back on with lower inflation — they could cut rates given inflation was low. Has the cushion been removed?” Stronger economic data recently, featuring increases in consumer and business confidence as well as retail sales, has helped fuel some of the dovish sentiment. Some halting signs of easing tensions in the U.S.-China tariff battle also contributed. And the firming inflation trend, such as the 2.4% annual rise in consumer prices, plus the likely boost from oil prices, complete a picture where Fed Chairman Jerome Powell at least could reiterate his position that this is a “mid-cycle adjustment” and not part of a longer easing trend. “I can’t think of another time recently that the Fed had this much of an about-face within a month or a few weeks of their meeting date,” said Jim Paulsen, chief investment strategist at the Leuthold Group. “I still think they do 25 [basis points], but the case is weak.”
Powell Stresses Solid U.S. Outlook After Fed Cuts Rates Again - Federal Reserve policy makers lowered their main interest rate for a second time this year and Chairman Jerome Powell said that “moderate” policy moves should be sufficient to sustain the U.S. expansion.“We took this step to help keep the U.S. economy strong in the face of some notable developments and to provide insurance against ongoing risks,” Powell told reporters Wednesday after the Fed cut its benchmark rate by a quarter percentage point to a range of 1.75% to 2%. “Weakness in global growth and trade policy have weighed on the economy.” Treasury yields rose, the dollar rallied and U.S. stocks reversed earlier losses after Powell made clear that policy makers did not expect to need deep rate cuts.The chairman has been under relentless public pressure to reduce rates from President Donald Trump, who returned to Twitter within minutes of the FOMC’s announcement to say policy makers had failed again by not cutting more and had “No ‘guts,’ no sense, no vision!”The Federal Open Market Committee decision didn’t alter expectations among futures traders for another 25 basis-point cut this year.Powell left the door open to “a more extensive sequences of cuts” if needed, but stressed this was not what officials expect. Instead, he described the situation as one “which can be addressed and should be addressed with moderate adjustments to the federal funds rate.”Updated quarterly forecasts showed officials split over the need for rate cuts this year. Five didn’t want to move. Five saw a quarter-point reduction warranted, while seven saw 50 basis points of easing needed by year-end -- half of which was delivered on Wednesday. The Fed board also took a separate step to calm this week’s strains in money markets and avert harm to the economy, lowering the interest rate on excess reserves to 1.8%. Earlier Wednesday the Fed injected $75 billion of liquidity to ease a crunch, and key rates pulled back from elevated levels.
FOMC Statement: 25bp Decrease - FOMC Statement: Information received since the Federal Open Market Committee met in July indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports have weakened. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 1-3/4 to 2 percent. This action supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain. As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. Voting against the action were James Bullard, who preferred at this meeting to lower the target range for the federal funds rate to 1-1/2 to 1-3/4 percent; and Esther L. George and Eric S. Rosengren, who preferred to maintain the target range at 2 percent to 2-1/4 percent.
Ron Paul: US interest rates are going negative, and the Fed can't stop it - Ron Paul is warning negative interest rates will crush the global economy.The former Republican congressman from Texas believes the U.S. won't be the exception."We will join the rest of them and go to total negative rates in hopes that that will be the solution," he told CNBC's "Futures Now" on Thursday. "We've never had as many currencies in negative interest rates. $17 trillion worth of bonds [are] in negative interest rates. It's never existed before. And, that's a bubble. So, we're in the biggest bond bubble in history, and it's going to burst."Paul, a former presidential candidate and vocal libertarian known for his economic and stock market bubble warnings, contends the Federal Reserve's policies are powerless in this environment. He doesn't believe this week's Fed meeting will provide any kind of relief and cutting rates will not be the answer."You can't predict exactly where the creation of credit goes," said Paul. "We have a ton of inflation with all that QE [quantitative easing]. And, every time you lower interest rates below market levels and create new credit, that's a bubble."Paul has been waving the red flag for years, warning that a once in a lifetimemarket drop of 50% or more will strike stocks. With bonds yielding negative rates now in focus, he suggests the danger is ballooning to unseen levels.Yet, he's unsure of the timing of a collapse."You don't know this precise time. But you know it can happen," he said. "How do you sell a bond that pays a negative rate? Who's going to jump up and down?"
Lookout, there’s a dollar crunch! – Izzy - As Zoltan Pozsar of Credit Suisse warned a couple of weeks ago, the combination of a glut of safe assets in the market, plus a Fed still intent on keeping monetary policy tight, has been feeding through to repo markets in the form of volatility. But now we have this (hat tip to Marc Ostwald from ADMISI for the chart): That’s a relatively wild spike in US general collateral repo rates to as much as 8.25 per cent at the open, at a bid/offer spread of 9.0%/7.50%. This is seismic stuff — and possibly indicative of a real dollar crunch — not least because it’s not even the quarter’s end (the usual time funding squeezes emerge). Therefore something else must be driving the dash for cash. Repo focused analysts such as TD Securities’ Priya Misra and Gennadiy Godberg note the market is blaming a combination of things including the corporate tax date (which creates a demand for liquidity), bill supply, coupon settlements and GSE cash as potential reasons for the spike. But since much of that should already have been priced in — and this is the third time repo rates have spiked to abnormally high rates the past year — they, in line with Pozsar’s thinking, are blaming structural factors. And, in particular, a general scarcity of bank reserves: Reserves have been declining since 2014 and we expect them to decline further as Treasury's cash balance increases and currency in circulation grows. The spike in repo affects the transmission of monetary policy and we expect the Fed to take the spike in repo rates seriously. A standing repo facility can greatly help, but we don't think that the operational details have been sorted out yet. An IOER cut or limiting the foreign reverse repo facility will only help at the margin.While all of that is probably true, it still doesn’t add much insight on what the real trigger for the repo spike has been. We previously argued Monday’s oil price spike constituted a pretty unprecedented state of affairs and could conceivably lead to a lot of fallout for those caught on the wrong side of the move — evidence of which would only come to light in the days to come.So one theory is that a dash to post variation margin at the respective commodity exchanges (and in cleared bilateral markets as well) is in some ways feeding through to a funding shortfall in repo markets.
‘This Is Crazy!’: Fed’s Repo Madness Sends Wall Street Reeling - The word went out even before the opening bell: the Fed had to step in. Up and down Wall Street, phones lit up Tuesday morning as a crucial market for billions in overnight borrowing suddenly started to dry up. What had begun on Friday, with tremors inside U.S. short-term funding markets, was escalating rapidly.At a small broker-dealer in New Jersey, Scott Skrym could sense the money draining away. “This is crazy!” Skrym exclaimed. A key interest rate -- one the entire marketplace was now fixated on -- was shooting to as high as 10%. That was four times its level a week ago. Not since the 2008 financial crisis has a spike in money-market rates caused such a stir -- or prompted such a response.From New York to Chicago to Los Angeles, major banks, corporations and investment firms struggled to get answers about what is usually a simple question: Where is the overnight repurchase rate, the grease that keeps the vast global financial system spinning? Rumors flew. Wall Street dealers scurried to protect their clients -- and themselves.Inside the Federal Reserve Bank of New York, the powerful markets group had already been canvassing dealers about lending rates. By 10:10 a.m., after an initial, embarrassing misstep, the Fed was pumping $53.2 billion into the market to calm nerves and regain control over interest rates -- its first intervention since the dark days of Bear Stearns, Lehman Brothers and the rest. The whirlwind day left traders with a host of questions, including the big one: Now what? Shortly after 4 p.m., the Fed announced it would intervene with another repurchase operation on Wednesday. Overnight financing is a basic function, but it’s so sensitive that many Wall Street dealers and corporate treasurers decline to talk openly about it. Privately, market participants likened the events of the past few days to to a plumbing problem -- the result of forces that, for most people, are largely hidden from view. Mark Cabana, head of U.S. interest rate strategy at Bank of America, saw it coming. He warned in a Sept. 13 note that the so-called dollar funding markets were about to be tested.Corporations had to withdraw cash from money market funds and bank accounts to make quarterly tax payments, while Treasury buyers had to settle up with Uncle Sam for recent purchases. On Friday alone, about $20.4 billion flowed out of money-market funds, according to Peter Crane, president of Crane Data LLC. Such technicalities aside, the developments nonetheless showed the Fed was losing control over short-term lending, one of its tools for implementing the monetary policy that helps guide the entire economy.
Fed Injects Liquidity Into Markets as Key Rate Busts Through Cap - The Federal Reserve injected $75 billion into U.S. money markets as policy makers’ benchmark rate broke outside their preferred band, ratcheting up the pressure on central bank officials to find a long-term fix for the financial system’s plumbing. There is evidence things are calming down. For instance, the rate for general collateral repurchase agreements has dropped to 2.175%, down from Tuesday’s record high of 10% and about where it was last week. Now attention turns to this afternoon’s Federal Open Market Committee decision to see what, if any, further steps are taken to remove pressure from the overnight lending business and ensure higher rates don’t harm other parts of the economy. Action is nearly certain after the New York Fed said Wednesday that the effective fed funds rate busted through policy makers’ 2.25% cap the day before, coming in at 2.30%. That’s bad because it shows the Fed is losing its grip on short-term interest rates, undermining its ability to guide the financial system.Adjusting something called the interest rate on excess reserves, or IOER, is one likely remedy. Longer-term solutions include expanding the Fed’s balance sheet to replenish reserves in the banking system.“These money markets are a very powerful part of the financial system and everything flows through,” said John Herrmann at MUFG Securities in New York. “What the Fed has been doing so far to address the issues is like being a fire department chasing the fire instead of sort of installing fire hydrants through facility. They need to do more.”
Fed loses control of its own interest rate as it cut rates — ‘This just doesn’t look good’ -- As the Fed was meeting to consider cutting interest rates, it lost control of the very benchmark rate that it manages. It’s been a rough week in the overnight funding market, where interest rates temporarily spiked to as high as 10% for some transactions Monday and Tuesday. The market is considered the basic plumbing for financial markets, where banks who have a short-term need for cash come to fund themselves. The odd spike in rates forced the Fed to jump in with money market operations aimed at reining them in, and after the second operation Wednesday morning, it seemed to have calmed the market. The Fed announced a third operation for Thursday morning. In a rare move, the Fed’s own benchmark fed funds target rate rose to 2.3% on Tuesday, above the target range set when it cut rates at its last meeting in July. The target range was since cut by a quarter point Wednesday to 1.75% to 2% from 2 to 2.25%. “This just doesn’t look good. You set your target. You’re the all-powerful Fed. You’re supposed to control it and you can’t on Fed day. It looks bad. This has been a tough run for Powell,” said Michael Schumacher, director, rate strategy, at Wells Fargo. Fed Chairman Jerome Powell, in addressing the run up in short-term funding rates, said the Fed had been expecting extra demand because of Treasury settlements and a need for cash by corporations who were paying taxes. But he said it was surprised by the volatile market. “For the foreseeable future, we’re going to be looking at it, if needed, doing the sorts of things we did the last two days, these temporary open market operations That’ll be the tool we use,” the chairman told reporters after the Fed announced a quarter point rate cut Wednesday afternoon.
The Fed Intervened in Overnight Lending for First Time Since the Crash. Why It Matters to You. - Pam Martens - The rumors that spread yesterday were not that money was missing at a Wall Street bank but that liquidity was missing. It had dried up to the point that the major Wall Street banks could not, or would not, handle the demand for loans called overnight repurchase agreements (repos) that were coming their way. (Repos are a short-term form of borrowing where corporations, banks, brokerage firms and hedge funds secure loans by providing safe forms of collateral such as Treasury notes.) The oversized demand for the repos and the lack of available funds drove the overnight repo rate to an unprecedented high of 10 percent at one point. Typically, the overnight repo rate trades in line with the Federal Funds rate, which is currently targeted at 2 to 2.25 percent by the Fed. The Federal Reserve Bank of New York (always there to rescue Wall Street from its hubris; see “Related Articles” below) had to jump in and infuse $53 billion into the repo market. It has promised to make another $75 billion available this morning. Here’s what should concern every engaged American: As of June 30 of this year, the four largest banks on Wall Street (which are allowed to own Federally insured commercial banks as well as stock, bond and derivative gambling casinos known as investment banks) held more than $5.45 trillion in deposits. The breakdown is as follows: JPMorgan Chase holds $1.6 trillion; Bank of America has $1.44 trillion; Wells Fargo has $1.35 trillion; and Citibank is home to just over $1 trillion.A number of excuses have been offered by the business press to explain why the New York Fed had to ride to the rescue yesterday but the very simple question is this: how can four banks with $5.45 trillion in deposits not be able to cough up $53 billion in overnight loans. The excuses go like this: corporations had to pay their corporate taxes and drew down large amounts from the banks. But corporations paying their taxes is not some new problem that just fell out of the sky. These are very old banks that should certainly know how to anticipate a drawdown for corporate taxes. The next excuse is that liquidity at the banks was drained as a result of paying for Treasury securities purchased in last week’s Treasury auction. The major Wall Street banks are all “primary dealers,” which are contractually bound to make purchases in the regular Treasury auctions. But again, this has been going on for decades and sophisticated banks should be able to figure out how to make bids in the Treasury auctions while still leaving themselves with adequate liquidity for their customers. One of the more reasonable theories is that the backup in interest rates that caused bond prices to tank last week drove an investor stampede out of bonds, forcing the Wall Street banks to buy back large amounts of unwanted bonds from customers, thus further draining their liquidity. Given the fact that the last time the Fed was intervening in this fashion in the overnight lending market there was a major crisis on Wall Street with century-old iconic names vying for which one would go belly up first, one would have expected to see a serious percentage decline in the share prices of these banks during stock market trading hours yesterday. That didn’t happen.
Fed Funds Prints 2.30%, Breaching Target Range For The First Time, As Libor Replacement Soars To "Remarkable" 5.25% - If today's second consecutive repo was supposed to calm the stress in the secured lending market and ease the funding shortfall in the interbank market, it appears to have failed. Not only did O/N general collateral print at 2.25-2.60% after the repo operation, confirming that repo rates remain inexplicably elevated even though everyone who had funding needs supposedly met them thanks to the Fed, but in a more troubling development, the Effective Fed Funds rate printed at 2.30% at 9am this morning, breaching the Fed's target range of 2.00%-2.25% for the first time. And yes, it is quite ironic that on the day the Fed is cutting rates, the Fed Funds was just "pushed" above the top end of the target range for the first time ever.This also means that the EFF-IOER spread has now blown out to an unprecedented 20bps, yet another indication that the Fed has lost control of the rates corridor.But in what may be the most concerning move, today's print for the Secured Overnight Financing Index (SOFR), which is widely expected to be Libor's replacement, exploded higher by 282bps to a record 5.25%.Commenting on the blow out in the SOFR, Goldman had this to say on the "extremely volatile" price action in the key funding index: The SOFR market saw extremely volatile price action over the course of the day.... Almost 20k in SERU9 blocks printed from 11:15am through the afternoon, pushing SERFFU9 from -10 to -21.5. Shortly after 4pm the market was given another jolt of adrenaline as news of a second Fed operation to be conducted tomorrow morning at 8:15am caused the spot-6mo curve to go bid into the close. The problem here is that since SOFR is expected to replace LIBOR as the reference rate for several hundred trillions in fixed income securities, a spike such as this one would be perfectly sufficient to wreak havoc across market if indeed it had been the key reference rate.
NY Fed To Conduct Third Consecutive Repo Operation On Thursday At 8-15am - The Fed may or may not launch QE4 at some point in the near future, even though Powell said that growing the balance sheet is "certainly possible", but for now the Fed is stuck with the only liquidity-injecting operation in its arsenal, namely repo, and after two consecutive days of repos, one for $53BN on Tuesday, and another for the full $75BN allotment today, moments ago the NY Fed announce that a third consecutive repo would take place on Thursday between 8:15am and 8:30am ET, "in order to help maintain the federal funds rate within the target range of 1-3/4 to 2 percent." As a reminder, today for the first time in a decade, the Effective Fed Funds rate was fixed at 2.30%, 5bps above the top range of the fed funds range. The Thursday overnight repo op will be the same size as the previous two, or $75 billion, which means that once again investors will be watching if the offering will be oversubscribed as it was today, when over $5 billion in Primary Dealer bids did not find the liquidity they needed. As the NY Fed also noted, "propositions will be awarded based on their attractiveness relative to a benchmark rate for each collateral type, and are subject to a minimum bid rate of 1.80 percent", which as of today is the new excess reserve rate. Here is the full NY Fed statement: In accordance with the FOMC Directive issued September 18, 2019, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York will conduct an overnight repurchase agreement (repo) operation from 8:15 AM ET to 8:30 AM ET tomorrow, Thursday, September 19, 2019, in order to help maintain the federal funds rate within the target range of 1-3/4 to 2 percent. This repo operation will be conducted with Primary Dealers for up to an aggregate amount of $75 billion. Securities eligible as collateral in the repo include Treasury, agency debt, and agency mortgage-backed securities. Primary Dealers will be permitted to submit up to two propositions per security type. There will be a limit of $10 billion per proposition submitted in this operation. Propositions will be awarded based on their attractiveness relative to a benchmark rate for each collateral type, and are subject to a minimum bid rate of 1.80 percent.
Fed Steps Into the Repo Market for a Fourth Day - The Federal Reserve added liquidity for a fourth straight day to a vital corner of the funding markets, helping further stabilize rates as investors remain concerned that fresh bouts of stress may be felt in the weeks ahead. The New York Fed injected another $75 billion Friday through an overnight repo operation. That followed operations of the same size on Wednesday and Thursday, and $53.2 billion on Tuesday, with each of these prior agreements rolling off the morning after they’re completed. The actions, commonplace in pre-financial crisis times, temporarily add cash, with the Fed taking government securities as collateral. Wall Street bond dealers submitted about $75.6 billion of securities for Friday’s Fed action, lower than the previous two days’ levels. Many analysts are already predicting the Fed will do a similar operation on Monday. “Given it was slightly oversubscribed and the rate was at 1.8%, its shows the Fed is playing an important role in calming the market and needs to keep doing these operations,” said Priya Misra, head of global rates strategy at TD Securities in New York. “But overall, these operations are only a temporary fix, it’s a band aid. The big fear is that around quarter-end, when dealer balance sheets are more constrained that these Fed operations won’t work as well any more.”
U.S. repo rate falls after Fed repo operation – (Reuters) - The interest rate on U.S. overnight repurchase agreements slipped on Friday after an operation conducted by the New York Federal Reserve that parked $75 billion in temporary cash in the U.S. banking system. The overnight repurchase agreement (repo) rate was last 1.85%-1.95%, compared with 1.90%-2.00% before the latest repo operation. They ended at 1.75% late on Thursday after hitting 10% on Tuesday, according to Refinitiv data. The U.S. central bank has conducted a series of cash-adding moves since Tuesday as repo and other money market rates soared to levels not seen since the height of the global financial crisis in 2008. The Fed also lowered borrowing costs by a quarter point for a second time on Wednesday. Analysts had blamed the ruction in the $2.2 trillion repo market, where banks and Wall Street dealers borrow using mostly Treasuries as collateral, on huge payments for taxes and on bond supply. The cash outflows also exposed the scarcity of reserves in the financial system, they said. The Fed's willingness to provide more liquidity on Friday is "suggesting that the funding tightness evident in the U.S. markets earlier this week has not dissipated," Scotiabank strategists Shaun Osborne and Juan Manuel Herrera wrote in a research note. Going forward, the New York Fed said on Friday it will conduct a series of overnight and term repo operations from Sept. 23 to Oct. 10.
Liquidity Scramble: Fed Announces Overnight Repos Every Day Next Week, Introduces Term Repos - Yesterday we reported that Goldman now expects the Fed to restart Permanent Open Market Operations, i.e., bond purchases, i.e., QE some time in November. For those who missed it, Goldman assumes a roughly $15bn/month rate of permanent OMOs, "enough to support trend growth of the balance sheet plus some additional padding over the first two years to increase the size of the balance sheet by $150bn", in the process restoring the reserve buffer and eliminating the current need for temporary OMOs. That strategy would result in balance sheet growth of roughly $180bn/year and net UST purchases by the Fed (the sum of the red and grey bars) of roughly $375bn/year over the next couple of years. However, assuming Goldman is correct, there would be a little over a month before such POMO returned to permanently increase the size of the Fed's balance sheet, potentially resulting in a continued liquidity shortage for the next 6 or so weeks.Which probably explains why moments ago, the Fed surprised market watchers who were expecting the Fed to continue conducting only overnight repos, but announcing that not only would it conduct overnight $75 Billion repos every day from Monday until Thursday, October 10, but it would also introduce 2 week term repos with a total size of "at least $30 billion" for the first time since the financial crisis.This is what the NY Fed said moments ago in a statement regarding repurchase operations: In accordance with the Federal Open Market Committee (FOMC) directive issued September 18, 2019, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York will conduct a series of overnight and term repurchase agreement (repo) operations to help maintain the federal funds rate within the target range. The Desk will offer three 14-day term repo operations for an aggregate amount of at least $30 billion each, as indicated in the schedule below. The Desk also will offer daily overnight repo operations for an aggregate amount of at least $75 billion each, until Thursday, October 10, 2019. Awarded amounts may be less than the amount offered, depending on the total quantity of eligible propositions submitted. Securities eligible as collateral include Treasury, agency debt, and agency mortgage-backed securities. Additional details about the operations will be released each afternoon for the following day’s operation(s).
A Clueless New York Fed Is Examining Why Banks With Excess Cash Failed To Halt Repo Panic - When it comes to occasional (or chronic) dollar shortages, and the plumbing of the overnight lending market, which as everyone knows suffered a spectacular heart attack early this week when the overnight repo rate soared to 10%, the New York Fed and its open markets desk, is the authority on any potential plumbing blockages. Yet it now appears that the most important regional Fed when it comes to maintaining market stability, is just as clueless as the rest of us as to why the repo market froze up. sending funding rates to never before seen highs. In an interview with the FT, New York Fed president John Williams, who earlier this year unexpectedly fired not only the head of the NY Fed's markets desk, Simon Potter, arguably the most important trader in the world, manning the world's most important trading desk but also the second most important person at the NY Fed's "Plunge Protection Team", the head of the Financial Services Group, Richard Dzina, said that the New York Fed is examining "why banks with excess cash failed to lend to the overnight money market, following a week that revealed cracks in the US’s financial plumbing." Specifically, Williams questioned the hesitancy of the large, liquid banks, saying "the thing we need to be focused on today is not so much the level of reserves [held at the Fed]. It’s how does the market function." What is troubling about that statement is that it is precisely the level of reserves that the New York Fed should be focusing on - after all, that would justify the repo deep freeze as it has now been abundantly clear that the US financial system will need about $400BN more in reserves, but not how the market functions: if anything, that's the one thing the NY Fed should know by now; yet the fact that the career economist Williams admits that the Fed is clueless about the market plumbing, is extremely concerning. As noted earlier today, following several days of oversubscribed overnight repo operations to ease liquidity pressure in the market, on Friday the Fed announced it would also offer up to $90bn in two-week long loans to further reduce funding pressures during the notorious quarter-end period when liquidity tends to collapse. Yet while this action will likely further ease the stress in the funding market, the fingerpointing has begun, with market participants claiming that the week’s volatility arose from a shortage of cash in the financial system, which in turn was the result of the unwinding of the Fed's post-financial crisis intervention. In response, Fed officials have said it's not their fault, and instead have focused on the role played by banks, or rather the role banks with excess liquidity did not play but stepping into fund their liquidity-challenged peers. Specifically, Williams and Lorie Logan, senior vice-president in the markets group at the New York Fed, said officials were looking at why cash failed to move from banks’ accounts at the Fed into the repo market, where banks and investors borrow money in exchange for Treasuries to cover short-term funding needs.
US CFOs Brace For A Recession Before The 2020 Election - Chief financial officers in the United States have started to prepare themselves and their finances for a recession. For the first time in several years, economic uncertainty is now their lead concern, replacing worries about the difficulty of hiring and retaining talented workers. According to CNN, 53 percent of chief financial officers expect the United States to enter a recession prior to the 2020 presidential election. That information was sourced from the Duke University/CFO Global Business Outlook survey released on Wednesday. And two-thirds predict a downturn by the end of next year. While a slight downturn may not amount to a recession, it certainly means CFOs are taking the initiative to prepare for the worst.Only 12% of CFOs in the United States indicated they have become more optimistic about the domestic economy, down from 44% a year ago, according to the Duke survey. CNN blamed the economic uncertainty on the trade war with China, and it obviously is playing a role, however, Americans themselves are partially responsible too. The debt load continues to rise with spending while wages are remaining largely stagnant. Since the Federal Reserve is eyeing another rate cut in an attempt to prop up the flailing economy, CFOs are noticing the other red flags that have been popping up regularly for the past few months. But spending is still expected to rise in the U.S., even though most Americans cannot afford to do so. Businesses may have a little more leeway, and their spending is also expected to rise. U.S. business spending is expected to inch just 0.6% higher over the next 12 months, the Duke survey found. That’s a sharp deceleration from 8% growth projected in March and the second-lowest growth since December 2009.
Hold That Recession: U.S. Indicators Are Trouncing Forecasts - The U.S. economy is outperforming expectations by the most this year, offering a fresh rebuttal to last month’s resurgent recession fears fueled by the trade war and a manufacturing slump. The Bloomberg Economic Surprise Index has reached an 11-month high after four indicators released Thursday, including existing home sales and jobless claims, each surpassed expectations. The gauge continued to advance after swinging to positive from negative on Tuesday for the first time this year. The data also pushed a similar measure produced by Citigroup Inc. to the highest level since April 2018. “There’s a definitive change in the growth profile and there’s an acceleration in growth. It’s interesting how pessimistic the attitudes still are among investors, yet when you look at surprise indexes, you would think people would feel better about growth. There’s a disconnect.”The readings are signaling a somewhat brighter mood about the world’s largest economy after some indicators and markets stoked fears last month of a quicker ending to the record-long economic expansion. Federal Reserve policy makers on Wednesday highlighted the economy’s strength even as they moved forward with their second-straight interest-rate reduction to guard against elevated risks to the expansion. Investors are growing more upbeat too, lifting U.S. equity benchmarks back near records this month. St. Louis Fed President James Bullard, asked Friday about rising surprise indexes, pointed to mixed readings and diverging sectors. “We have a very strong labor market that’s underpinning good consumption growth in the U.S., the household sector is generally doing well,” he told Wharton Business Radio on Sirius XM. He said other parts of the economy are seeing weakness with global growth slowing and Europe “teetering on recession.”Thursday’s raft of U.S. data included the Labor Department’s report on initial filings for unemployment benefits, which matched the most optimistic estimate in Bloomberg’s survey and were just above historically low levels. In addition, an industry report on August existing home sales sailed above all forecasts following a report Wednesday showing the strongest pace of housing starts since 2007, signaling that residential construction may add to economic growth in the third quarter for the first time since the end of 2017.
Nuclear War With Russia Winnable Said Trump's Incoming National Security Advisor -- Questioning “mutual assured destruction,” Charles Kupperman called nuclear conflict “in large part a physics problem.” Incoming National Security Advisor, Charles Kupperman, made the claim Nuclear War With USSR Was Winnable.He made those statements in the 1980s. I do not know his views today, but let's review what he said then.President Donald Trump’s acting national security adviser, former Reagan administration official Charles Kupperman, made an extraordinary and controversial claim in the early 1980s: nuclear conflict with the USSR was winnable and that “nuclear war is a destructive thing but still in large part a physics problem.”Kupperman, appointed to his new post on Tuesday after Trump fired his John Bolton from the job, argued it was possible to win a nuclear war “in the classical sense,” and that the notion of total destruction stemming from such a superpower conflict was inaccurate. He said that in a scenario in which 20 million people died in the U.S. as opposed to 150 million, the nation could then emerge as the stronger side and prevail in its objectives.His argument was that with enough planning and civil defense measures, such as “a certain layer of dirt and some reinforced construction materials,” the effects of a nuclear war could be limited and that U.S. would be able to fairly quickly rebuild itself after an all-out conflict with the then-Soviet Union.At the time, Kupperman was executive director of President Ronald Reagan’s General Advisory Committee on Arms Control and Disarmament. He made the comments during an interview with Robert Scheer for the journalist’s 1982 book, “With Enough Shovels: Reagan, Bush, and Nuclear War.”
"We Can Do This For 100 Years" - Taliban Threaten More Violence After Trump Kills Peace Talks -- At least that's what the group's lead negotiator, Sher Mohammad Abbas Stanikzai, told RT during a recent interview. Trump shut down the nearly year-long talks after a Taliban car bombing killed an American soldier stationed in Kabul. The two sides were set to meet at Camp David, where they were reportedly on the cusp of signing a major agreement. Taliban representatives insist their bombings are justified by the ongoing attacks by American and Afghan forces on Taliban-held territory, and that they are simply defending their land from a hostile occupier. Stanikzai said he's skeptical of Trump's reasons for halting the talks, arguing that it conflicted with a statement from Secretary of State Mike Pompeo, who, during a TV appearance the following day, bragged that the US had killed "over 1,000 Taliban" over the previous ten days, even as negotiations progressed. Pompeo on Meet The Press: "You should know, in the last 10 days we've killed over 1,000 Taliban. And while this is not a war of attrition, I want the American people to know that President Trump is taking it to the Taliban." pic.twitter.com/dXxQwzrYkD — Aaron Rupar (@atrupar) September 8, 2019 If the Taliban could keep negotiating even as American troops gunned down their men, Stanikzai wondered, why couldn't the Americans? "If they can kill a thousand of us, why can we not kill one or two of them?" Stanikzai asked. "This is our right. We have to defend ourselves and defend our people." He added: "The war was imposed on us. It is American soldiers who are in Afghanistan. It’s not our mujahedeen in Washington."
‘It Was Illegal and Still Is Illegal’ - FAIR (interview transcript) - Outrage poured in when it was revealed that Donald Trump hadinvited representatives of the Taliban to talks in the US just days before the anniversary of the September 11, 2001, attacks. In this, as in everything, it’s advisable to be suspicious of Trump’s maneuvers. But it was still remarkable, the general absence of consideration that moving to end the nearly 18 years of violent devastation in Afghanistan, the killing and terrorizing of tens of thousands of civilians, would be anything but an obscene way to mark that anniversary. Instead, as Joshua Cho notedfor FAIR.org, corporate media’s hand-wringing around the longest-running conflict in US history centered on what the Washington Post actually termed “abandon[ing] the country in haste.” For a different perspective, we’re joined now by Marjorie Cohn, professor emerita at Thomas Jefferson School of Law, and author of, most recently, Drones and Targeted Killing: Legal, Moral and Geopolitical Issues, which is out from Olive Branch Press in a recently updated edition. She joins us now by phone from San Diego. Welcome back to CounterSpin, Marjorie Cohn.
US Attorney General Barr invokes “state secrets” to cover up Saudi involvement in 9/11 -Last week, it was revealed that the Trump administration has taken extraordinary steps to continue the 18-year cover-up of Saudi government involvement in the September 11, 2001 terror attacks. On Thursday, September 12, one day after the 18th anniversary of the attacks on New York and Washington that killed nearly 3,000 people, a federal court filing revealed that Attorney General William Barr has asserted the "state secrets" privilege to block the release of an FBI report detailing extensive relations between some of the 19 hijackers and Saudi government officials. Victims of the attacks and their families are pushing for access to the 2007 report as part of a lawsuit against the Saudi government launched in 2003 charging the despotic monarchy with coordinating the mass killings. Barr declared there was a “reasonable danger” that releasing the report would “risk significant harm to national security.” The court filing also revealed that the FBI has agreed to turn over to the families’ lawyers the name of a Saudi individual that is redacted in a four-page summary of the FBI report released in 2012. The summary lays out evidence concerning three Saudis who provided money and otherwise assisted two of the hijackers in California in finding housing, obtaining driver’s licenses and other matters. Government investigations have established that the two people who are named in the FBI summary, Fahad al-Thumairy, a former Saudi consulate official, and Omar al-Bayoumi, suspected by the FBI of being a Saudi intelligence officer, were working in coordination with the Saudi regime. The third person, whose name is redacted, is described in the FBI summary as having assigned the other two to assist the hijackers. Lawyers for the families last year subpoenaed the FBI for an unredacted copy of the summary based on the contention that the third person was a senior Saudi official. But as part of the court filing, citing the “exceptional nature of the case,” the FBI issued a protective seal to prevent the name of the third Saudi from becoming public. The agency also refused to provide any of the other information requested by the families. An FBI official said the agency was shielding the name to protect classified information related to “ongoing investigations” and to protect its “sources and methods.”
Trump Sweeps Israeli Dragnet Surveillance of Washington DC Under the Rug - The culprit behind a massive spying scandal in the U.S. capital has been exposed. A slew of surveillance devices found around the District of Columbia over the years was the work of Israeli spies. But it’s unlikely that the U.S. will take any action. Three former U.S. officials have informed Politico that the devices — International Mobile Subscriber Identity (IMSI) catchers, or “Stingrays” — that were discovered near the White House, Senate and other sensitive locations belonged to the Israeli government. Typically used by police, Stingrays, a dragnet as opposed to a targeted surveillance device, work like miniature cell phone towers. When one is set up, it sucks in all cell phone communications within a specific radius, intercepting them before they make it to the tower to be transmitted to the intended recipient. The metadata sent — including texts and other private information — by everyone within the radius is then viewable by whoever is controlling the Stingray. Freddie Martinez, executive director of the Lucy Parsons Labs, an organization that has fought successfully for government disclosure on the use of Stingrays, told MintPress News: These devices are an extremely low cost way to discover who a person or group of people are and track their movements in real time. As the price of technology drops, the risk of intelligence and corporate espionage only increases. In an extreme example, you [could use a Stingray] to find out everyone who routinely goes to an embassy and try to learn about their patterns of life… Generally, they are used to track the real-time location of people or hunt down a person based on an identifier like their phone numbers. They [Stingrays] can function because of technical exploits in cellphone networks and it is up to international bodies to “fix” the problem. Given the billions of phones already in the world and how complex their capabilities’ range — from older models of 10 years ago to newer 5G devices — there doesn’t seem to be any appetite to take on such a huge technical problem.”
Stunned Silence Followed Trump's G-7 Outburst: “Where's My Favorite Dictator?” -- Oh how we wish this one were captured on video, but alas The Wall Street Journal could only vividly describe the epic moment when President Trump shouted across a crowded room, "Where's my favorite dictator"? —while awaiting a meeting with Egypt's president.It apparently happened at last month's Group of Seven summit in Biarritz, France but is only now being revealed by the paper: “Inside a room of the ornately decorated Hotel du Palais during last month’s Group of Seven summit in Biarritz, France, President Trump awaited a meeting with Egyptian President Abdel Fattah Al Sisi,” the WSJ reported Friday.“Mr. Trump looked over a gathering of American and Egyptian officials and called out in a loud voice: ‘Where’s my favorite dictator?’ Several people who were in the room at the time said they heard the question,” the newspaper reported. Onlookers described “a stunned silence” that followed. People in the room said they were unclear if President Sisi actually heard it. The Journal commented, “Even if lighthearted, Mr. Trump’s quip drew attention to an uncomfortable facet of the U.S.-Egypt relationship.”We might add that though uncomfortable the moment might have been for US-Egypt relations, it's one of those classic Trump moments where the president's wild and off the cuff manner actually comically cuts straight to the reality better than anything else (Turkey's Erdogan might even be a little jealous to find himself on the outs as Washington's "former" favorite dictator).The WSJ report summarized of some of Trump's favorite dictator's favorite pastimes: “Mr. Sisi has drawn criticism for his authoritarian rule since taking power following a 2013 coup. Under Mr. Sisi, Egyptian authorities have been accused of detaining thousands of political opponents, of torturing and killing prisoners and of stymying political opposition, according to reports by the United Nations, U.S. State Department and nongovernmental groups.”
Trump says US 'locked and loaded' after attack on Saudi oil supply -President Donald Trump said the United States is "locked and loaded" after an attack on Saudi Arabia's oil supply, but his administration is waiting on Riyadh to determine who launched the strikes before proceeding on a course of action. "There is reason to believe that we know the culprit, are locked and loaded depending on verification," Trump said in a post on Twitter. Trump said he authorized the release of oil form the U.S. strategic petroleumreserve to keep the market well supplied. Drone strikes crippled the heart of Saudi oil production over the weekend, hitting the world's largest crude processing facility and the kingdom's second-largest oilfield. Aramco, Saudi's national oil company, was forced to cut production by 5.7 million barrels per day or about 50%. That is equivalent to about 5% of the global oil supply. Yemen's Houthi rebels claimed responsibility for the attack, but the U.S. has pointed the finger at Iran. Secretary of State Mike Pompeo accused Tehran of launching an "unprecedented attack on the world's energy supply." Iran has dismissed those allegations as "meaningless," "not comprehensible" and "pointless." Foreign Minister Javad Zarif called on the Trump administration to hold talks. Trump came close to launching military strikes against Iran in June after the Islamic Republic shot down a U.S. drone. The president said he called off those strikes over concern about the loss of life they would cause. Four weeks later, Trump said the U.S. navy destroyed an Iranian drone, though Tehran denied that was the case. Washington has also accused Iran of attacking and seizing oil tankers in the Persian Gulf, allegations Tehran rejects.
Tulsi Gabbard Says Trump Is Turning The U.S. Into 'Saudi Arabia's Bitch' - Rep. Tulsi Gabbard (D-Hawaii) slammed President Donald Trump for turning the nation into “Saudi Arabia’s bitch” after he assured the kingdom that the U.S. is “locked and loaded” as it waits to hear who may be behind an attack on its oil supply.“Trump awaits instructions from his Saudi masters,” the Democratic presidential candidate tweeted Sunday. “Having our country act as Saudi Arabia’s bitch is not ‘America First.’”Gabbard previously accused Trump of making the U.S. “Saudi Arabia’s bitch” last November for his failure to take action against Saudi Crown Prince Mohammed bin Salman who, according to the U.S. intelligence community, directed the killing of Washington Post journalist Jamal Khashoggi.Hours before Gabbard’s latest remark, Trump said he had “reason to believe that we know the culprit” of the weekend drone strike that cut the kingdom’s oil production in half.The president added that the U.S. is “waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!”Though Iran-backed Houthi rebels in Yemen have claimed responsibility for the attack, U.S. Secretary of State Mike Pompeo said Saturday that there is no evidence it came from Yemen and called Iran the culprit. Tehran has denied the allegation.
US ‘Lies’ Slammed After Pompeo, Without Proof, Blames Iran for Drone Attacks - — Iranian Foreign Ministry Spokesman Abbas Mousavi forcefully rejected Sunday unsubstantiated charges by US Secretary of State Mike Pompeo and US Sen. Lindsey Graham (R-SC) regarding the recent drone attacks that caused serious damage to two crucial Saudi Arabian oil installations. “It has been around 5 years that the Saudi-led coalition has kept the flames of war alive in the region by repeatedly launching aggression against Yemen and committing different types of war crimes, and the Yemenis have also shown that they are standing up to war and aggression,” Seyyed Abbas Mousavi said in a statement. “Such accusations as well as blind and futile comments are pointless and not understandable within the framework of diplomacy,” he said.“In international relations, even ‘animosity’ must have some minimum requirements and logical frameworks to be believable, but US official have ignored even these minimum requirements,” the spokesman added. “Such comments and actions are more like planning by secret and intelligence services to tarnish the image of a country in order to set the scene for future moves,” he said.“The Americans adopted the ‘maximum pressure’ policy against Iran, which, due to its failure, is leaning towards ‘maximum lies’,” he added. The spokesman concluded by saying that the only way to establish tranquillity in the region and put an end to the useless crisis in Yemen is to halt attacks and aggression by the Saudi-led coalition, stop Western countries’ political and arms support for the aggressors, and make efforts to work out political solutions. Reuters reported that a senior commander for the Islamic Revolutionary Guards Corps took a more strident tone than the Foreign Ministry, insisting that Iran was ready for “full-fledged” war, the semiofficial Tasnim news agency reported. “Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000 kilometers around Iran are within the range of our missiles,” said Gen. Amir Ali Hajizadeh, the head of the Revolutionary Guards’ air force.
The Black Swan Is A Drone - What was "possible" yesterday is now a low-cost proven capability, and the consequences are far from predictable. Predictably, the mainstream media is serving up heaping portions of reassurances that the drone attacks on Saudi oil facilities are no big deal and full production will resume shortly. The obvious goal is to placate global markets fearful of an energy disruption that could tip a precarious global economy into recession. The real impact isn't on short-term oil prices, it's on asymmetric warfare: the coordinated drone attack on Saudi oil facilities is a Black Swan event that is reverberating around the world, awakening copycats and exposing the impossibility of defending against low-cost drones of the sort anyone can buy. (Some published estimates place the total cost of the 10 drones deployed in the strike at $15,000. Highly capable commercially available drones cost around $1,200 each.) The attack's success should be a wake-up call to everyone tasked with defending highly flammable critical infrastructure: there really isn't any reliable defense against a coordinated drone attack, nor is there any reliable way to distinguish between an Amazon drone delivering a package and a drone delivering a bomb. Whatever authentication protocol that could be required of drones in the future--an ID beacon or equivalent--can be spoofed. For example: bring down an authenticated drone (using nets, etc.), swap out the guidance and payload, and away it goes. Or steal authentication beacons from suppliers, or hack an authenticated drone in flight, land it, swap out the payload--the list of spoofing workaround options is extensive. This is asymmetric warfare on a new scale: $20,000 of drones can wreak $20 million in damage and financial losses of $200 million--or $2 billion or $20 billion, if global markets are upended.
Trump exploits drone attacks on Saudi oil facilities to threaten war against Iran --Drone strikes on key oil facilities in Saudi Arabia on Saturday by Yemen’s Houthi rebels have triggered concerns about a potential major disruption in global oil supplies and a spike in oil prices. The attack, in retaliation for the brutal Saudi-led and US-backed war on Yemen, has sharply raised regional tensions and heightened the danger of a US war on Iran, which Washington accuses of backing the Houthis. Houthi spokesman Brigadier-General Yahya Sare’e told the media that its forces had “carried out a massive offensive operation of 10 drones targeting Abqaiq and Khurais refineries.” Hijra Khurais is Saudi Arabia’s second largest oil field producing about 1.5 million barrels of oil a day, and Abqaiq is the world’s largest crude stabilisation facility, processing some 7 million barrels of oil for export. While Saudi authorities insisted that fires at the two sites were under control, Saudi’s state-owned Aramco oil company suspended production at the facilities, cutting output by about half. The price for Brent crude oil, the international benchmark, shot up by almost $12 a barrel to $71.95 a barrel before easing to $68 a barrel, up by more than 12 percent. The Trump administration immediately blamed Iran for the drone strikes. US Secretary of State Mike Pompeo tweeted that “Tehran is behind nearly 100 attacks on Saudi Arabia… Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world’s energy supply. There is no evidence the attacks came from Yemen.” Pompeo provided not a shred of evidence for any of his allegations, simply asserting that the Houthi rebels did not have the ability to carry out such a sophisticated attack. To date, Saudi authorities have provided few details of the strikes and have not attributed blame to regional rival Iran. Pompeo’s provocative remarks undermine the possibility of talks between the US and Iran. Tehran has denied any involvement in Saturday’s drone strikes. Foreign ministry spokesman Seyyed Abbas Mousavi dismissed Pompeo’s “blind accusations and inappropriate comments,” saying: “Even hostility needs a certain degree of credibility and reasonable frameworks. US officials have also violated these basic principles.”
Who Really Benefits From The Iran Attacked Saudi Arabia Narrative- Initial reports of the attack indicated that it was launched by Yemeni Houthi rebels using drones. The Houthis have publicly accepted responsibility for the attacks. Saudi and US drone strikes and bombings in Yemen against the Houthis have been relentless and go widely unreported by the mainstream media. Political opponents in Yemen and the Saudis have consistently accused the Houthis of being proxies for Iran, and while Iran has publicly supported the Houthi rebellion, the Houthis have ignored Iranian advice on numerous occasions, indicating they are not as controlled as some would like the Western public to believe. Secretary of State Mike Pompeo has named Iran directly as being the culprit behind the strikes on Saudi Arabia (still no hard evidence available to verify this). Even though the Saudis stated right after the attack that 10 drones were used, and this corroborates what the Houthis have stated, the story is being quickly “adjusted”. Now, US officials claim that the attack was accomplished with 17 or more “cruise missiles” that originated from the direction of Iran. How the Saudis were able to confuse cruise missiles for drones remains a mystery. The new official story is being tweaked everyday to counter any predictable skepticism. For example, the new claim of "terrain hugging" cruise missiles helps to counter anyone who asks how the attack could have thwarted the billions in American Patriot missile systems on Saudi soil? Patriots are not specifically designed to stop low flying missiles.However, the Saudis have also purchased AN/TPQ-53 Quick Reaction Capability Radar systems from the US. This is next gen radar technology that is able to track low flying missiles, aircraft and drones. But still, the Saudi radar net was somehow defeated? If this is the case and the accusations are true, then one would have to conclude that Iran has military hardware capable of slipping past some of the best defense technology the US has to offer.The bottom line is, a Houthi drone attack just doesn't do it for the establishment. Even if they could substantiate hard military ties between Iran and the insurgents in Yemen, they would not be able to justify war based on the relationship alone. They have to connect Iran to the attack directly.Clearly, the goal of this narrative is to create a rationale that allows the Trump Administration to commit to a war with Iran, probably starting with limited air strikes and escalating from there. When Trump finally gives his statements on evidence that supposedly points to Iran, I suspect he will not say much in terms of what the US reaction will be. The public (and the markets) will be left to assume that nothing substantial will happen and that it will all fade away. We will simply wake up one morning to discover that initial strikes against Iranian targets have been launched and that war has begun. The only other scenario that makes sense at this stage is that another strike against Saudi Arabia will take place within the next couple of weeks and that this will be used as the "final straw". It was only a matter of time. With the heavy influence of globalists in Trump's cabinet, every major event in the region has been somehow tied to Iran, from attacks on random oil tankers to Palestinian and Lebanese opposition to Israel and so on.
The Latest: Official downplays imminent action against Iran - A top White House official is downplaying the threat of imminent action against Iran after President Donald Trump said the U.S. is “locked and loaded” following a drone attack on Saudi Arabia that cut into global energy supplies. Vice President Mike Pence’s Chief of Staff Marc Short told reporters at the White House Monday that the president’s language is “a reflection” that his administration is advancing policies that protect the U.S. “from these sorts of oil shots.” Short says: “I think that ‘locked and loaded’ is a broad term that talks about the realities that” the U.S. is “safer and more secure domestically from energy independence.” The United States has blamed Iran for the weekend assault, which halved Saudi Arabia’s oil production and threatens to fuel a regional crisis. Short said more evidence is coming and that Trump’s national security team will be meeting Monday morning. ___ 12:30 a.m. Tensions are flaring in the Persian Gulf as President Donald Trump says the U.S. is “locked and loaded” to respond to a weekend drone assault on Saudi Arabia’s energy infrastructure that his aides are blaming on Iran. The attack cut in half the kingdom’s oil production and sent crude prices spiking. It also led Trump to authorize the release of U.S. strategic reserves should they be necessary to stabilize markets. U.S. officials offered what they said was proof that the attack was inconsistent with claims of responsibility by Yemen’s Iran-backed Houthi rebels and instead pointed the finger directly at Tehran. Iran called the U.S. claims “maximum lies” and threatened American forces in the region. Trump backpedaled on offers to meet with Iranian President Hassan Rouhani at the U.N. next week.\
Pentagon ordered to offer options as US rules out ‘knee jerk’ response to Saudi attack - US defense officials were ordered to plan potential responses to the attack on Saudi Arabia's oil facilities in a Monday meeting with President Donald Trump, but the White House is waiting for the Kingdom's rulers to decide on a response before charting a path forward, administration officials and sources familiar their thinking tell CNN. Two US defense officials said that the Pentagon was instructed to "plan" at the White House meeting, but added that no detailed choices were presented. A source familiar with White House discussions said the administration feels time is on its side as it builds a case against Iran, which has denied responsibility for the attacks. Secretary of State Mike Pompeo is set to travel to Saudi Arabia on Tuesday night to consult with rulers there and the source said nothing will be done until Pompeo has returned and Trump's national security team has assembled.The approach is already coming under criticism. Sen. Lindsey Graham, the South Carolina Republican who has advocated a strike on Iran in response to the Saudi attack, tweeted Tuesday that "the measured response by President @realDonaldTrump regarding the shooting down of an American drone was clearly seen by the Iranian regime as a sign of weakness."
Iran is 'almost daring Donald Trump to respond,' says former diplomat - President Donald Trump doesn’t want war with Iran — but Tehran seems inclined to “test the Trump administration,” according to Gerald Feierstein, a former U.S. Ambassador to Yemen. Ultimately, the United States is still looking for “ways to get the Iranians back to the negotiating table,” and Trump understands the American people don’t want a military conflict, said Feierstein, who is currently senior vice president at the Washington-based Middle East Institute. Multiple drone attacks on Saturday crippled Saudi oil production, and knocked out 5.7 million barrels of daily crude oil production — that’s half of Saudi Arabia’s production and more than 5% of the world’s daily crude production. The attacks on the oil plants of state-owned Saudi Aramco — on the world’s largest crude processing facility in Abqaiq, and the kingdom’s second-largest oilfield in Khurais — caused global oil prices to surge amid fears of supply disruption. U.S. Secretary of State Mike Pompeo was in Saudi Arabia on Wednesday to meet Crown Prince Mohammad bin Salman to talk about the attacks. Pompeo has blamed Iran for the attacks but Tehran refuted those allegations. On Tuesday, Iran’s supreme leader Ayatollah Ali Khamenei announced on state TV that the Iranian government “will never talk to America.” “Clearly, the Iranians look inclined to test the Trump administration, to call Donald Trump’s bluff, if you will, to see if he really has the will to really go all the way,” Feierstein told CNBC on Wednesday. “So far, their bets have paid off.” Yemen’s Houthi rebels, backed by Iran, have been behind a series of attacks on Saudi pipelines, tankers and other infrastructure in the past few years amid rising tension between Iran and the U.S., and its allies like Saudi Arabia. The Islamic Republic, a target of U.S. sanctions for decades, has been blamed for recent attacks on oil tankers in the Strait of Hormuz. Washington has also blamed Tehran for the downing of a U.S. military drone. “Whether you’re talking about the tanker attacks or previous pipeline attacks or now this, they continue to raise the ante, they raise the bar, almost daring Donald Trump to respond,” Feierstein added.
Trump sees many options short of war with Iran after attacks on Saudis - (Reuters) - U.S. President Donald Trump said on Wednesday there were many options short of war with Iran after U.S. ally Saudi Arabia displayed remnants of drones and missiles it said were used in a crippling attack on its oil sites that was “unquestionably sponsored” by Tehran. “There are many options. There’s the ultimate option and there are options that are a lot less than that. And we’ll see,” Trump told reporters in Los Angeles. “I’m saying the ultimate option meaning go in — war.” The president struck a cautious note as his Secretary of State Mike Pompeo, during a visit to Saudi Arabia, described the attacks as “an act of war” on the kingdom, the world’s largest oil exporter. Trump said on Twitter that he had ordered the U.S. Treasury to “substantially increase sanctions” on Iran, which denies carrying out the attacks, and told reporters the unspecified, punitive economic measures would be unveiled within 48 hours. Trump’s tweet followed repeated U.S. assertions that the Islamic Republic was behind Saturday’s attacks and came hours after Saudi Arabia said the strike was a “test of global will”. Iran again denied involvement in the Sept. 14 raids, which hit the world’s biggest crude oil processing facility and initially knocked out half of Saudi output. Saudi Arabia is the world’s leading oil exporter. Responsibility was claimed by Yemen’s Iran-aligned Houthi group, which on Wednesday gave more details of the raid, saying it was launched from three sites in Yemen. In a remark that may further strain a tense political atmosphere in the Gulf, the Houthis said they had listed dozens of sites in the United Arab Emirates, Riyadh’s top Arab ally, as possible targets for attacks.
Trump orders Mnuchin to 'substantially increase' sanctions on Iran - President Donald Trump said Wednesday he ordered the Treasury Department to “substantially increase” sanctions on Iran. Trump’s announcement follows strikes Saturday on the world’s largest crude-processing plant and oil field in Saudi Arabia. The U.S. accused Iran of carrying out the attacks. It was not immediately clear what steps the president directed Treasury Secretary Steven Mnuchin to take. Asked about the sanctions later Wednesday during stops in California, the president told reporters he would announce details over the next 48 hours. The Treasury Department, White House and State Department did not immediately respond to CNBC’s requests to comment. The strikes triggered the largest spike in crude prices in decades and renewed concerns of a budding conflict in the Middle East. All the while, Iran maintains that it was not behind the attacks. U.S. crude and benchmark global Brent oil prices dropped Wednesday after the White House announced sanctions instead of military action. On Tuesday, Trump said aboard Air Force One that he does not intend to meet with Iranian President Hassan Rouhani at the U.N. General Assembly in New York next week. “I’m not looking to meet him. I don’t think they’re ready yet, but I’d prefer not meeting him,” Trump said. Rouhani likewise said he would not meet with Trump. The foreign ministry of Russia, a key strategic ally to Iran, called Trump’s plan destructive and said it would not solve anything, Reuters reported, citing news agency Interfax. On Sunday, Trump warned that the United States was “locked and loaded” to respond to the attack on the Saudis, but a day later, he dialed down his rhetoric, saying there was “no rush” to take action and that the U.S. was coordinating with allies. Secretary of Defense Mark Esper also spoke with Saudi Crown Prince Mohammed bin Salman on Monday. Secretary of State Mike Pompeo traveled to the kingdom Tuesday. The Pentagon’s top Air Force general said Tuesday that while the service had not yet received direction to send additional bomber aircraft to the region, the U.S. was closely monitoring the area.
Iran's Supreme Leader: "There Will Be No Talks With The US At Any Level" -Ending all speculation about the possibility of a meeting between President Trump and the Iranian leadership, something President Trump has repeatedly said he'd be open to, Iran’s Supreme Leader Ayatollah Ali Khamenei announced on Tuesday that "there will be no talks with the US at any level" unless Washington agreed to return to the Iran deal, according to the Associated Press. Iranian state TV quoted Khamenei, who said this is the position of the country's leadership and that "all officials in the Islamic Republic unanimously believe" this. Khamenei accused the US of trying to prove that its "maximum pressure policy" against Iran is successful by finally getting the Iranians to agree to talks, something they have been reluctant to do since Trump took office."In return, we have to prove that the policy is not worth a penny for the Iranian nation," Khamenei said. "That’s why all Iranian officials, from the president and the foreign minister to all others have announced that we do not negotiate (with the U.S.) either bilaterally or multilaterally."However, the leader reiterated Iran’s stance that if the US returns to the nuclear deal, then Tehran would consider negotiations."Otherwise, no talks will happen...with the Americans," he said."Neither in New York nor anywhere" else.As for Trump denying reports that he had proposed a "no conditions" meeting with Iran: "Sometimes they say negotiations without any precondition and sometimes with 12 conditions," the Ayatollah added. "Such statements either come from their disheveled policies or are a ploy to confuse the other side."
Pentagon will deploy US forces to the Middle East after Saudi Arabia oil facilities attack — The Pentagon will deploy U.S. forces to the Middle East on the heels of strikes on Saudi Arabian oil facilities, U.S. Secretary of Defense Mark Esper announced Friday. “The president has approved the deployment of U.S. forces which will be defensive in nature and primarily focused on air and missile defense,” Esper said, adding that Saudi Arabia requested the support. “We will also work to accelerate the delivery of military equipment to the Kingdom of Saudi Arabia and the UAE to enhance their ability to defend themselves,” he added. President Trump has said that it “certainly looks” as if Iran appears to be responsible for the attack, but that he wants to avoid war. Esper reiterated that the United States does not seek a conflict with Iran and called on Tehran to return to diplomatic channels. He also said that there could be additional U.S. deployments if the situation were to escalate. On Thursday, the Pentagon called the recent strikes on the Saudi Arabian oil facilities as “sophisticated” and represented a “dramatic escalation” in tensions within the region. “This has been a dramatic escalation of what we have seen in the past. This was a number of airborne projectiles, was very sophisticated, coordinated and it had a dramatic impact on the global markets,” Pentagon spokesman Jonathan Hoffman said, adding that the strike is an international problem. A CNBC crew visiting the Khurais site that was attacked saw melted pipes and burnt areas which crews were busy repairing. Officials said that 30% of the facility was back up and running within 24 hours, and that full production at Khurais would be reached before the end of September.
Would Americans Let Trump Start World War III for Saudi Arabia and Israel? — Medea Benjamin - On Saturday, September 14th, two oil refineries and other oil infrastructure in Saudi Arabia were hit and set ablaze by 18 drones and 7 cruise missiles, dramatically slashing Saudi Arabia’s oil production by half, from about ten million to five million barrels per day. On September 18, the Trump administration, blaming Iran, announced it was imposing more sanctions on Iran and voices close to Donald Trump are calling for military action. But this attack should lead to just the opposite response: urgent calls for an immediate end to the war in Yemen and an end to US economic warfare against Iran. The question of the origin of the attack is still under dispute. The Houthi government in Yemen immediately took responsibility. This is not the first time the Houthis have brought the conflict directly onto Saudi soil as they resist the constant Saudi bombardment of Yemen. Last year, Saudi officials said they had intercepted more than 100 missiles fired from Yemen. This is, however, the most spectacular and sophisticated attack to date. The Houthis claim they got help from within Saudi Arabia itself, stating that this operation “came after an accurate intelligence operation and advance monitoring and cooperation of honorable and free men within the Kingdom.” Secretary of State Mike Pompeo, however, immediately blamed Iran, noting that that the air strikes hit the west and north-west sides of the oil facilities, not the the south side that faces toward Yemen. But Iran is not to the west or northwest either – it is to the northeast. In any case, which part of the facilities were hit does not necessarily have any bearing on which direction the missiles or drones were launched from. Iran strongly denies conducting the attack. If Iran provided the Houthis with weapons or logistical support for this attack, this would represent but a tiny fraction of the bottomless supply of weapons and logistical support that the U.S. and its European allies have provided to Saudi Arabia. In 2018 alone, the Saudi military budget was $67.6 billion, making it the world’s third-highest spender on weapons and military forces after the U.S. and China. Under the laws of war, the Yemenis are perfectly entitled to defend themselves. That would include striking back at the oil facilities that produce the fuel for Saudi warplanes that have conducted over 17,000 air raids, dropping at least 50,000 mostly U.S.-made bombs and missiles, throughout more than four long years of war on Yemen. The resulting humanitarian crisis also kills a Yemeni child every 10 minutes from preventable diseases, starvation and malnutrition.The Yemen Data Project has classified nearly a third of the Saudi air strikes as attacks on non-military sites, which ensure that a large proportion of at least 90,000 Yemenis reported killed in the war have been civilians. This makes the Saudi-led air campaign a flagrant and systematic war crime for which Saudi leaders and senior officials of every country in their “coalition” should be held criminally accountable.That would include President Obama, who led the U.S. into the war in 2015, and President Trump, who has kept the U.S. in this coalition even as its systematic atrocities have been exposed and shocked the whole world.
Satirical ‘Onion’ Headline About Saudi Oil Now Just A Regular News Report - Caitlin Johnstone --Four months ago the satirical news site The Onion posted the headline, “John Bolton: ‘An Attack On Two Saudi Oil Tankers Is An Attack On All Americans’”. I remember the post because it cracked me up a the time. Like many Onion headlines, the joke came from a cartoonish exaggeration of something that we all kind of know to be basically true but which no official would actually say, in this case the fact that the drivers of the US war machine are always trying to spin their imperialist resource control agendas as something which protects ordinary Americans instead of plutocratic investments and geostrategic hegemony. It was quite clever, and it was very clearly satirical. At the time. Speaking to reporters on Wednesday about an attack on a Saudi Aramco oil refinery last weekend, Secretary of State Mike Pompeo proclaimed that not only was the attack definitely perpetrated by Iran, but that it was an “act of war” and a threat to American lives. “This was an Iranian attack,” Pompeo claimed without evidence. “We were blessed there were no Americans killed in this attack, but anytime you have an act of war of this nature, there’s always a risk that could happen.” Indeed, despite the Saudi government hilariously labeling the wounding of an Aramco facility “their 9/11“, nobody was killed in the incident at all. The most significant casualty of the attack was Saudi oil export capacity, which has reportedly been cut in half for the few weeks it will likely take to repair the damage. Yet Pompeo is rendering the art of satire obsolete by claiming it was an “act of war” against which Americans must be defended.
Forget trade war, a 20% move implies real war – Izzy - This was the early-market response to news that Saudi oil facilities had been struck by a suspected Iranian/Yemeni rebel drone strike: As the FT noted: Oil prices rose as much as 20 per cent to above $71.00 a barrel — the biggest percentage spike in almost three decades — as markets reopened after an attack on Saudi Arabia’s oil infrastructure at the weekend cut more than half the country’s production. That’s one of the biggest moves in Brent prices in dollar terms in a single session in a very long time, if not ever.* And for the commodity markets that’s a big deal. Huge, in fact. Traders on the winning side of the bet will be laughing all the way to the bank right now. But there’s going to have been some serious fallout on the other side. We don’t know the extent to which natural producer hedgers and systematic funds will have been hit, but it’s likely that in the days and weeks to come some extraordinary details will emerge about the bloodbath that took place on the back of that single move. The key point to remember about the commodity-oriented fund world is this: ever since Trump took over and started threatening Chinese trade wars, the “smart” money has become overly focused if not obsessed by the narrative that global demand will be hit by tariffs and a slowdown in trade. This has led to massively bearish sentiment in the oil futures market over the past year. And yet, those obsessing about the impact of “trade wars” may have simply missed the wood for the trees. Specifically, that trade wars are irrelevant if there’s a chance the world will go to war. That may sound hyperbolic but we think it’s essential that someone bluntly states matters for what they are.
Hong Kong activist Joshua Wong visits New York to seek U.S. support for pro-democracy protests Hong Kong pro-democracy activist Joshua Wong is seeking the support of U.S. lawmakers for the demands of his fellow protesters who have led months of streets demonstrations, including a call for free elections. Wong, speaking in New York on Saturday ahead of a planned visit to Washington, led Hong Kong’s pro-democracy “Umbrella Movement” in 2014. The latest protests, which began over a now-withdrawn extradition bill but grew into demands for greater democracy and independence from mainland China, are mostly leaderless. “We hope … for bipartisan support,” Wong said of his trip to Washington, adding that U.S. lawmakers should demand the inclusion of a human rights clause in the ongoing U.S.-China trade negotiations. He said he also hoped to convince members of Congress to pass the Hong Kong Human Rights and Democracy Act, which would require an annual justification of the special treatment that for decades has been afforded to the city-state by Washington, including trade and business privileges. The bill would also mean that officials in China and Hong Kong who undermined the city’s autonomy could face sanctions. Democratic U.S. Sen. Chuck Schumer said earlier this month that it would be a priority for U.S. Senate Democrats in their new session, which started on Monday.
The U.S. Is About to Do Something Big on Hong Kong --Hong Kong’s pro-democracy protest movement, the David to China’s Goliath, is calling out to the land of the free for help—and help may be on the way. The question is whether it will be substantial enough and fast enough, and have the support of the president of the United States.For months now, a small but zealous contingent of American flag-waving protesters has been a fixture of the huge demonstrations in Hong Kong, including today, when dozens of people again carried the U.S. flag during a rally held in defiance of a police ban. As the struggle to resist China’s tightening grip on the semiautonomous region has intensified, protesters have appealed to the United States in larger numbers and with greater urgency. Last weekend, tens of thousands of protesters marched near the U.S. consulate in the territory, singing “The Star-Spangled Banner” and carrying signs that urged President Donald Trump to “liberate Hong Kong.” Perhaps more realistically, they also issued a practical plea: for Congress to pass the Hong Kong Human Rights and Democracy Act, which would grant the United States further means to defend the territory’s freedoms and autonomy. Faced with Trump’s scattershot approach to the ferment in Hong Kong, which doesn’t rank as a high-priority issue for his administration, activists are placing their faith in legislation that ultimately will only be as effective as the executive branch’s willingness to implement it. Nevertheless, Republican Senator Marco Rubio, one of the sponsors of the bill in the Senate, is optimistic that the U.S. government will deliver on its promise. That scene near the consulate a week ago was a vivid reminder that America is still a potent “symbol of democracy and freedom” around the world, he toldThe Atlantic. The protesters “see a country where people vehemently disagree on public policy and say horrible things about each other, but no one goes to jail for it,” he noted.
Pelosi to Cramer: Trump ‘had to do something’ about China — but may have made the wrong move - House Speaker Nancy Pelosi believes President Donald Trump had to challenge China’s trade practices — she’s just not sold that he took the right steps to hold Beijing accountable. “I think the president had to do something about it, I’m just not sure he went the right way,” the California Democrat told CNBC’s Jim Cramer in an interview Tuesday. “I think we should have done it multilaterally, with the EU and the rest.” As Trump pushes China to change what he and some lawmakers from both parties call abusive trade practices, he has slapped tariffs on more than $500 billion in Chinese goods. The moves prompted various retaliatory duties from Beijing, locking the world’s two largest economies in a trade war that threatens to drag on global economic growth. The agriculture industry and businesses from other sectors have warned about damage from the widening trade war. On Tuesday, Pelosi said Trump should not have tried to address China’s practices in a way that could open Americans up to financial pain. “And what I would say is, whatever path he wanted to take to improve a trade relationship, do not empower the other side to hurt your farmers and your consumers,” she told the “Mad Money” host. The Trump administration looks to strike a trade deal with China to address concerns including intellectual property theft, forced technology transfers and agricultural purchases. Washington and Beijing are set to hold talks this week ahead of higher-level discussions in October. On Tuesday, Trump said he thinks “there’ll be a deal maybe soon, maybe before the [November 2020] election or one day after the election.” Speaking to reporters on Air Force One, he warned that if a deal came together after the election, “it’ll be the toughest deal anybody’s ever had to make from the standpoint of China, and they know that.”
Trade war: Chinese delegation head to Washington to step up talks - China’s vice-minister for finance, Liao Min, will go to the United States for trade negotiations on Wednesday, state-run news agency Xinhua reported. Liao will lead a delegation to Washington in preparation for the face-to-face meeting to be held next month between Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin. A diplomatic observer said Liao would set out China’s agenda for the October talks, including items that were not negotiable, but added that his inclusion meant this week’s talks would have a focus much broader than only trade. Liao is also a deputy director of the Office of the Central Commission for Financial and Economic Affairs, a Communist Party organ in charge of supervising economic work. It will be the first time he has taken a lead role in high-stakes trade talks.In a phone call this month, Liu, Lighthizer and Mnuchin agreed to meet in October. US President Donald Trump has also announced he will delay a tariffs hike from October 1 to October 15. Liao, already a member of China’s trade negotiation team, is a veteran banking regulator and is well known for speaking fluent English. He was appointed in May last year as deputy to Liu He, a close economic adviser to Chinese President Xi Jinping. Liao is in charge of international economic affairs at the economic policy decision-making body. His rising role in the trade talks is expected to bring flexibility to the negotiations after Trump lashed out in August, accusing Beijing of manipulating its currency to deliberately devalue the Chinese yuan. “Liao is Liu’s right-hand man and has been playing a key part in the bilateral trade talks,”
Trade war: Chinese officials cancel farm visits - Chinese trade officials on Friday afternoon canceled their scheduled visit to U.S. farm states next week, putting a damper on an otherwise seemingly positive few weeks on the trade front. All three of the major U.S. averages turned lower on the news. Earlier Friday, the U.S. Trade Representative’s office exempted several big-ticket items produced in China from tariffs, a development that may boost the odds of a trade deal between Washington and Beijing. The exemptions on more than 400 Chinese goods -- including large items such as motorcycles, parts for rail cars and certain solar panels as well as smaller merchandise from dog leashes and harnesses to electrical tape and power tools -- are seen as a way of gutting the tariffs without completely removing them, and have boosted spirits for the deputy-level talks that are underway in Washington before higher-level discussions.“The big show is when Liu He, the chief negotiator for China, sits down with Bob Lightheizer sometime in the next couple weeks,” Peter Navarro, assistant to President Trump, told “Mornings with Maria.” The two sides had moved closer to a deal in the spring when negotiations collapsed and the White House blamed China for backing away from key provisions.“I think the issue is going to be where the negotiations will start from," Navarro said. "Will they start from where they left off when China reneged on the 150-page deal or not?”Neither the U.S. Trade Representative nor industry trade groups immediately responded to FOX Business’ request for comment. The three sets of exclusions from 25 percent tariffs include:
- 310 items from List 1, which covered $34 billion worth of goods
- 89 items from List 2, which covered $16 billion worth of goods
- 38 items from List 3, which covered $200 billion worth of goods
Trump May Get Much of the World’s Manufacturing Out of China, but It Won’t Be Coming Back to the U.S. - Marshall Auerback --“Chimerica” is a term originally coined by the historian Niall Ferguson and economist Moritz Schularick to describe the growing economic relationship between the U.S. and China since the latter’s entry into the World Trade Organization (WTO) in 2001. In the words of Ferguson: “The Chinese did the saving, the Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese did the lending, the Americans the borrowing.” Much of the pre-crisis boom in global trade was driven by this economic symbiosis, which is why successive American presidents tolerated this marriage of convenience despite the increasing costs to the U.S. economy. The net benefits calculation, however, began to change after 2008, and the conflict has intensified further after the 2016 presidential election result. Today, the cumulative stress of Donald Trump’s escalating trade war is leading to if not an irreparable breach between the two countries, then certainly a significant fraying. The imminent resumption of trade talks notwithstanding, the rising cost of the tariffs is already inducing some U.S. manufacturers to exit China. But in most instances, they are not returning to home shores. It may have taken Trump to point out the pitfalls of the Chimerica link, but coming up with a coherent strategy to replace it is clearly beyond the president’s abilities. America is likely to remain a relative manufacturing wasteland, as barren as Trump’s own ill-conceived ideas on trade. At the same time, it’s not going to be an unmitigated victory for China either, as Beijing is increasingly suffering from a large confluence of internal and external pressures. The problem today is that even if Trump is voted out of office in 2020, corporate America is becoming less inclined to wait out the end of his presidency to return to the pre-Trump status quo of parking the bulk of their manufacturing in China. There is too much risk in putting all of one’s eggs in the China basket, especially given growing national security concerns. Hence, U.S. companies are taking action. In spite of decades of investment in these China-domiciled supply chains, a number of American companies are pulling out: toy manufacturer Hasbro, Illinois-based phone accessories manufacturer Xentris Wireless, and lifestyle clothing company PacSunare a few of the operators who are exiting the country. But they are not coming back to the U.S., relocating instead to places like Vietnam, Bangladesh, Mexico, the Philippines and Taiwan. The chief financial officer of Xentris, Ben Buttolph, saysthat the company will never return to China: “We are trying to have multiple locations certified for all of our products, so that if all of a sudden there’s an issue with one of the locations, we just flip the switch.” Likewise, the CEO of Hasbro, Brian Goldner,recently spoke of“great opportunities in Vietnam, India and other territories like Mexico.”
Trump Preparing To Hit EU With Billions In Tariffs- Report -Washington is reportedly preparing to announce tariffs on billions of euros of goods from the European Union, following a confidential decision by the WTO that was just handed down on Friday, Politico reports, citing four anonymous EU officials.According to these officials, the WTO ruled in favor of the US on Friday in a case against Airbus, ending a long-running transatlantic dispute between the world's two largest aircraft manufacturers. It's not the first finding against Airbus, an earlier ruling was released in April, which found that Airbus had benefited from illegal state subsidies.The decision will open the door fo President Trump to slap the tariffs on goods ranging from cheese to aircraft components. One official reportedly said that Trump had won the right to collect between €5 billion and €8 billion in tariff revenues. Another said the maximum sum is closer to $10 billion.This is terrible news for the market of course, since any sign that Washington is opening up a new front in the trade war could end the rally, just as markets were nearing new highs.But a showdown between the incoming European Commission and the White House was probably inevitable, since most people expected that Trump was putting off his decision on tariffs until the new members of the European Commission were announced. That happened Tuesday.On Tuesday, incoming Commission President Ursula von der Leyen signaled an aggressive approach to transatlantic trade. She has appointed incoming Trade Commissioner Phil Hogan, an Irish farmer, to lead trade negotiations with Washington. Washington has indicated it would follow through with tariffs if it won the case in Geneva and has prepared a list of EU exports worth about $21 billion, they can choose any amount of products from the list.
Inspector general report details Trump’s abuse of immigrant children -- A report issued earlier this month by the inspector general of the Department of Health and Human Services (HHS) provides a harrowing picture of the deliberate abuse of terrified children that is being carried out in detention facilities run by the Trump administration.The report by Joanne Chiedi, the acting inspector general of HHS, examined the conditions of thousands of children detained in facilities operated by the Office of Refugee Resettlement (ORR), a division of HHS that is assigned the caretaker responsibility for child refugees.Under the Obama administration, the ORR was tasked with the responsibility of housing unaccompanied minors from Central America who came across the US-Mexico border in large numbers from 2014 on. This population multiplied in the summer of 2018 when the Trump administration began its “zero tolerance” policy, under which all adult refugees were treated as criminals and separated from their children, who were then sent to facilities operated by the ORR.In August-September 2018, the Office of Inspector General visited 45 of the 102 facilities in the ORR’s network at the time, including many of the large ones. At the time, 12,400 children were held by the ORR.The damning report was collected without interviewing any of the detained children: Mental health clinicians, medical coordinators and facility supervisors were the sole witnesses, and they provided ample evidence of the terrible conditions facing the children. The report found that many of the children at ORR had experienced three separate kinds of trauma: in their home countries, during their treks through Mexico to the US border, and then within the United States, after their parents or guardians tried to file for refugee status.
Mexico Demands US Halt Weapons Flow Across Border - Mexican Foreign Minister Marcelo Ebrard sat down with White House officials last Tuesday to discuss how a "significant decrease" in US-bound immigration through Mexico has been seen this summer. Mexico's strategy to slow down immigration flows into the US has been due to a massive presence of at least 25,000 National Guard troops now stationed across the Mexico-US border. "What Mexico has done is working," Ebrard told the press while acknowledging that border crossings were still up from averages in September."But the tendency is irreversible ... It is something that we think will be permanent," he said.In return for changing the tide of immigration flows into the US, Ebrard told US officials that weapon flows from the US into Mexico need to be as "high of a priority" as immigration. "Mexico is going to be demanding the measures the United States must take in exchange for the measures Mexico is taking," said Ebrard while meeting with top US officials, including Vice President Mike Pence and Secretary of State Mike Pompeo, in Washington on Tuesday."They have to do a lot more ... very little is being done, if anything," Ebrard said.Mexico has said 70% of the weapons used to commit v iolent crimes in the country originate from the US.
House advances bills to protect workers' credit in government shutdown — The House Financial Services Committee on Friday advanced legislation aimed at limiting the negative impacts of a government shutdown on consumers’ credit reports. The committee passed a bill 32-22 sponsored by Chairwoman Maxine Waters, D-Calif., that would prohibit the inclusion of adverse information on government employees’ credit reports during a government shutdown. “This is real simple, real easy,” said Rep. Greg Meeks, D-N.Y., while the committee debated the measure earlier this week. “Why should someone be negatively impacted because of a credit rating when everyone knows that the sole reason that they are not paying their bill is because they are not getting paid because of a government shutdown by the United States Congress?” But the bill faced strong GOP opposition and no Republicans supported the measure. Committee Ranking Member Patrick McHenry, R-N.C., said he was concerned that creating a database of government employees to send to the credit reporting agencies could put those consumers at risk. “I am concerned about the data this legislation will send to consumer credit reporting agencies,” McHenry said. “Have we heard from consumers? How will we help them? How will we respond in a meaningful way?” The committee also passed a bill 32-22 along party lines that would authorize a Federal Housing Administration pilot program to allow for additional credit information to be included in reports for borrowers seeking mortgages. The bill would preserve traditional credit scores and reports, but enable consumers to opt in and include additional information, such as rental payments and utility bills. “It is an opt-in bill,” said Rep. Al Green, D-Texas, the lead sponsor of the legislation. “It does not immediately add the additional credit scores. It allows the consumer to opt in.” The committee also unanimously advanced a bill directing the Consumer Financial Protection Bureau’s community affairs office to identify causes leading to, and solutions for, underbanked, unbanked, and underserved consumers.
House Speaker Pelosi unveils Democrats’ sweeping plan to lower prices on the most expensive drugs - House Speaker Nancy Pelsoi, D-Calif., unveiled a sweeping plan Thursday to lower prescription drug prices in the U.S. Pelosi and House Democratic leaders have been working for months on a plan to reduce U.S. drug prices. The main thrust of the plan will allow Medicare to negotiate lower prices on as many as 250 of the most expensive drugs, including insulin, and apply those discounts to private health plans across the U.S, according to a legislative summary distributed to lawmakers. The plan will also establish an international pricing index, which would bring drug prices in line with what other nations pay and penalize pharmaceuticals companies who refuse to negotiate with the government or fail to reach any drug pricing agreement. The penalty will start at 65% of the gross sales of the drug in question and increase by 10% each quarter the manufacturer doesn’t reach an agreement, according to the summary. Pelosi’s proposal also will:
- penalize pharmaceutical companies that raise the price of their drugs faster than inflation,
- create an out-of-pocket maximum of $2,000 for Medicare beneficiaries,
- and reinvest savings from negotiated prices on finding new treatments at NIH.
Pelosi and other House leaders are expected to discuss the proposal at a press conference in Washington later Thursday morning.
Texas Republican Lawmaker to Beto O’Rourke: “My AR is Ready for You” - — Republican state Rep. Briscoe Cain drew fierce ire Thursday night for a gun-related tweet that many considered to be a death threat against Democratic presidential candidate Beto O’Rourke.Twitter took the comment down within hours because it violated a rule forbidding threats of violence, and O’Rourke’s campaign planned to report the tweet to the FBI, according to CNN. It’s against federal law to threaten “major candidates” for president.The online conflict came on the heels of two mass shootings in Texas and on the night that O’Rourke debated fellow Democratic presidential candidates in Houston. O’Rourke, a former congressman from El Paso, touted his proposed mandatory buyback program for assault weapons at the debate and said “hell yes” he plans to take Americans’ AR-15s and AK-47s.“My AR is ready for you Robert Francis,” Cain tweeted, calling O’Rourke by his full first and middle names. Within hours, more than 4,000 people replied to the tweet, mostly criticizing Cain for making what they considered to be a death threat. Later in the evening, O’Rourke himself called it one. “This is a death threat, Representative,” O’Rourke said on Twitter. “Clearly, you shouldn’t own an AR-15 — and neither should anyone else.” Cain responded by calling O’Rourke a child. His comments come after two August mass shooting in Texas, including one in O’Rourke’s hometown. In that massacre, a white gunman targeting Hispanic people used an AK-47 to fatally shoot 22 people in an El Paso Walmart. That shooting also forced a reckoning of the incendiary immigration rhetoric that some Texas Republicans have deployed over the years. That included an alarmist fundraising letter from Republican Gov. Greg Abbott‘s campaign that was dated one day before the massacre. Abbott later admitted that “mistakes were made” with the letter.
Trump Retweets False Video of Rep. Ilhan Omar - President Donald Trump on Wednesday used Twitter to share an edited video made by a conservative comedian that falsely accused Democratic Rep. Ilhan Omar of dancing and partying last week on the 18th anniversary of the 9/11 terrorist attacks.The inaccurate video provoked new Twitter criticism of the Muslim congresswoman from Minnesota, who has regularly faced accusations from her critics that she is unpatriotic. Omar’s supporters, meanwhile, rallied around her. Some called for Twitter to scrub the misleading content from its site, fearing the video could lead to attacks against the congresswoman.“The President of the United States is continuing to spread lies that put my life at risk,” Omar wrote on Twitter. “What is Twitter doing to combat this misinformation?” She was the second well-known politician in recent weeks to demand the tech giant stop the spread of misinformation. Earlier this month, Democratic presidential candidate Beto O’Rourke’s campaign criticized Twitter for failing to act after social media users promoted a baseless claim that a mass shooter was among the former congressman’s supporters.
Smart TVs Caught Sending Sensitive User Data To Facebook And Netflix - A study by researchers from Northeastern University and Imperial College London found that many popular smart TV models, including models by Samsung and LG, as well as streaming dongles Roku and Amazon FireTV, are leaking sensitive user data to advertisers.The models listed above would share data like location and IP address with Netflix, Facebook and third-party advertisers, according to the FT. Just when social media companies were starting to modify their data collection practices to better respect user privacy, the next threat is coming from the Internet of Things (IoT). Smart TVs are becoming increasingly popular in the US.In some cases, users' data were being sent to Netflix even though they didn't have an account. And it's not just smart TVs: other smart devices from speakers to cameras have also been caught sending user data to third parties like Spotify.Nearly 70% of Americans have a smart TV or a Roku or Apple TV. Nearly all of these devices have recognition technology that tracks what you watch, and sells data approximating your interests to advertisers. In a separate study of smart TVs by Princeton University, researchers found that some apps supported by Roku and FireTV were sending data such as specific user identifiers to third parties including Google.
Smart Faucets And Toilets Use Alexa To Listen To Your Conversations --It is hard to imagine a more intrusive home surveillance device than a faucet or toilet that listens to everyone's conversations, but that is just what Delta Faucet and Kohler have done. Delta Faucet's "Voice IQ" takes advantage of where lots of people like to congregate and turns it into an Alexa eavesdropping center. "Designed with the understanding that 20 percent of all WiFi-enabled homes are equipped with a connected home device, VoiceIQ Technology pairs with existing devices to dispense the exact amount of water needed, all with a simple voice command." Delta lets Alexa decide how much water everyone gets. "VoiceIQ Technology allows users to easily warm water and turn it on and off with voice activation, lending a hand in an active kitchen space. Consumers can command the faucet to dispense a metered amount of water in various quantities for precise measurement. Additionally, consumers can customize commands to make everyday tasks easier, like filling a coffee pot, a child’s sippy cup, or a dog bowl."(To learn more about Voice IQ click here.) What they are really saying is Amazon will now monitor your home and individual water usage.How is that for Orwellian?
BREAKING: Trump administration intervenes in bid to shut down GM strike - The Trump administration is engaged in secret talks to shut down the strike at General Motors, Politico reported Tuesday afternoon. According to anonymous sources who spoke with the media outlet, National Economic Council Director Larry Kudlow and White House trade and manufacturing adviser Peter Navarro are both involved in the talks. The terms of the proposed deal to end the strike, according to the sources, involve the re-opening of the Lordstown Assembly plant in northeastern Ohio, which was shuttered by GM this March.The White House quickly released an official denial of the Politico report. However, given the dangers to the American ruling class posed by the strike, as well as the fact that Politico received confirmation for its story from multiple sources, the denial cannot be considered credible. Autoworkers must be warned: the intervention by the Trump administration is not in their interests. All of the demands of autoworkers, including the elimination of the tier system and the upgrading of all temps, improved wages, health care and pensions, and the reversal of all layoffs, will be swept aside on the basis of lying promises about “saving American jobs."The United Auto Workers will seek to use a government-brokered agreement to provide a cover for its betrayal of the strike, which it sought unsuccessfully to avoid and is working to shut down at the earliest possible opportunity.While details of the government proposal are still scant, the fact that it involves reopening the Lordstown plant indicates that it is along the lines of GM’s latest contract proposal, which ties promises to eventually reopen one of the plants it has targeted for closure to massive increases in out-of-pocket health care expenses, a major expansion of temporary workers and other concessions. It is also possible that a Trump-brokered deal would involve the closure of plants in Mexico and relocation of their products to Lordstown. Trump responded to GM’s announcement last year that it would close four plants in the United States with a torrent of nationalism, demanding that the auto giant shutter factories in Mexico and shift production to the US.
Michael Flynn’s Motion to Compel Brady Evidence is Compelling - For those who have not taken time to read what Michael Flynn's lawyer filed with the court (it was initially sealed) you now no longer have an excuse. I am going to spoon feed you. The motion is compelling and tells a very different story about General Flynn's case. Here's the bottomline--the Obama Administration illegally spied on Flynn and were working in concert with Fusion GPS. This was illegal. Flynn's attorney, the amazing Sidney Powell, is demanding access to forty items of information. Let's review them one-by-one:
- A letter delivered by the British Embassy to the incoming National Security team after Donald Trump’s election, and to outgoing National Security Advisor Susan Rice (the letter apparently disavows former British Secret Service Agent Christopher Steele, calls his credibility into question, and declares him untrustworthy). Got that? With Trump on his way to the White House the Brits realized that their previous actions of spying against Trump were likely to be exposed. They were witting of Christopher Steele's efforts to paint Trump as a Russia stooge and apparently decided to try to get out front and, like the police inspector in Casablanca, profess shock that there was gambling in the casino. Untrustworthy? One more nail in the whole sordid FISA warrant fiasco. If the Brits had informed the U.S. Government that Steele could not be trust then how could Comey and McCabe and Rosenstein sign off on the FISA warrant to spy on Carter Page? I also would like to know who tipped off Sidney Powell to this juicy piece of evidence.
- The original draft of Mr. Flynn’s 302 and 1A-file, and any FBI document that identifies everyone who had possession of it (parts of which may have been leaked to the press, but the full original has never been produced). This would include information given to Deputy Attorney General Sally Yates on January 24 and 25, 2017. What did the FBI and Obama DOJ know and when did they know it? There was nothing that General Flynn did the met the threshold for allowing the U.S. Government to collect against him. But that did not stop the lawless Obama team from going after him.
- 3. All documents, notes, information, FBI 302s, or testimony regarding Nellie Ohr’s research on Mr. Flynn and any information about transmitting it to the DOJ, CIA, or FBI. This is a bombshell. We already know, thanks to testimony from Nellie's husband, Bruce Ohr, that he was passing info gathered by Nellie as an employee of Fusion GPS to the FBI. This means Fusion GPS was not collecting only on Donald Trump, but was going after others in the Trump campaign. If the FBI used any of this information to target Flynn with FISA collection they have a big problem.
Eight years of Trump's tax returns subpoenaed by Manhattan DA, report says - The Manhattan District Attorney's office has issued a subpoena for eight years of President Donald Trump's personal and corporate income tax returns as part of an ongoing investigation, according to a new report. The New York Times, in a article Monday, said the subpoena from DA Cyrus Vance Jr.'s office, was issued last month to Trump's accounting firm, Mazars USA. It is not clear if the DA has obtained any of tax returns he is seeking from Mazars. Trump has refused to publicly release his tax returns despite a long-standing practice by past presidents who did so. Marc Mukasey, a lawyer for the Trump Organization, in an email to CNBC when asked about the subpoena, said "We are evaluating and will respond as appropriate."Mazars USA, in an emailed statement, said, "Mazars USA will respect the legal process and fully comply with its legal obligations." "We believe strongly in the ethical and professional rules and regulations that govern our industry, our work and our client interactions. As a matter of firm policy and professional rules we do not comment on the work we conduct for our clients," the firm said. Jay Sekulow, a lawyer for Trump did not immediately respond to a respond to a request for comment. Vance's office was already known to be investigating the Trump Organization in connection with hush money payments made shortly before the 2016 presidential election to porn star Stormy Daniels, who claims she had sex with Trump years earlier. Trump and his company reimbursed Michael Cohen, the president's former personal lawyer and fixer, for the $130,000 payment he made to Daniels. Vance, at least originally, was eyeing whether the Trump Organization falsified business records related to the payoff to Daniels. Trump has denied having sex with Daniels, as well as with another woman, Playboy model Karen McDougal, who claims to have had an affair with Trump. McDougal herself received $150,000 from the Trump-friendly publisher of The National Enquirer as part of a deal to keep her quiet about her allegations about Trump.
Trump sues Manhattan DA Cyrus Vance Jr. over attempt to get tax returns - President Donald Trump on Thursday filed a lawsuit against Manhattan District Attorney Cyrus Vance Jr. and his longtime accounting firm, days after news broke that the prosecutor had subpoenaed years of Trump’s personal and corporate tax returns.Vance’s office had issued a subpoena last month to accounting firm Mazars. The firm said in a statement issued Monday that it “will respect the legal process and fully comply with its legal obligations.” “In response to the subpoenas issued by the New York County District Attorney, we have filed a lawsuit this morning in Federal Court on behalf of the President in order to address the significant constitutional issues at stake in this case,” Trump’s attorney Jay Sekulow said in a statement to NBC News on Thursday morning.
DOJ Sued For Records Of FBI Agent Who Helped Circulate Steele Dossier - A Freedom of Information Act (FOIA) lawsuit was filed against the US Justice Department on Wednesday by legal watchdog group Judicial Watch, seeking records concerning FBI Special Agent Michael Gaeta - an agency Legal Attaché in Rome who helped circulate the infamous Steele Dossier. Expect the name Michael Gaeta to become a household name very soon regarding spygate. — George Papadopoulos (@GeorgePapa19) February 28, 2019 The JW lawsuit seeks:
- All records of communications, including emails (using [his or her] own name or aliases), text messages, instant chats and encrypted messages, sent to and from former FBI Legal Attaché in Rome, Special Agent Michael Gaeta, mentioning the terms “Trump”, “Clinton”, “Republican”, “Democrat”, and/or “conservatives.”
- All SF50s and SF52s of SA Michael Gaeta.
- All expense reports and travel vouchers submitted for SA Michael Gaeta.
According to August 2018 testimony by the DOJ's former #4 official Bruce Ohr, dossier author Christopher Steele gave two memos from his salacious, Clinton-funded opposition research to Gaeta. In the July 30 meeting, Chris Steele also mentioned something about the doping — you know, one of the doping scandals. And he also mentioned, I believe — and, again, this is based on my review of my notes — that he had provided Mr. Gaeta with two reports…” The only thing I recall him mentioning is that he had provided two of his reports to Special Agent Gaeta. According to the Epoch Times, Gaeta was authorized by former Assistant Secretary of State Victoria Nuland to meet with Steele at his London office in order to obtain dossier materials. The purpose of the London visit was clear. Steele was personally handing the first memo in his dossier to Gaeta for ultimate transmission back to the FBI and the State Department.For this visit, the FBI sought permission from the office of Nuland, the assistant secretary of state for European and Eurasian affairs. Nuland, who had been the recipient of many of Steele’s reports, gave permission for the more formal meeting. On July 5, 2016, Gaeta traveled to London and met with Steele at the offices of Steele’s firm, Orbis.The FBI's scramble to vet the dossier's claims are well known. According to an April, 2017 NYT report, the FBI agreed to pay Steele $50,000 for "solid corroboration" of h is claims. Steele was apparently unable to produce satisfactory evidence - and was not paid for his efforts:
Bill Gates gave away $35 billion this year but didn’t see his personal net worth drop -- Bill Gates is not taking a defensive approach with his billions of dollars of wealth. The founder of Microsoft added $16 billion to his net worth this year, despite giving away over $35 billion to charity, according to Bloomberg. That brings Gates’ total wealth to $106 billion, the second largest fortune in the world — behind Amazon’s Jeff Bezos. “We’re not, you know, in some defensive posture where we’re mostly in cash, or anything like that,” Gates told Bloomberg Television on Tuesday. “The strategy that’s been used on the investments is to be over 60% in equities.” Having 60%, in this case $60 billion in stocks or index funds, is an aggressive investment strategy for someone of Gates’ wealth. The average family office portfolio in North America had about 32% of its assets in stocks in 2018, according to a Campden Wealth report. Typically investors would be more diversified across asset classes like government bonds and real estate. But Gates said he is “bullish’ on the United States and global businesses. “You can make the case that the yields aren’t very high but that’s true against all asset classes,” said Gates. “T-bills, 10-Year are well less than 2%, so there’s no obvious thing to beat other investors out there and there’s reasons to think absolute returns for the next decade will be less than they have been for the last several decades.” The U.S. is currently in a decade-long expansion, the longest in history. Gates’ charitable work is primarily done through The Bill and Melinda Gates Foundation. The foundation works to tackle inequality in health and education around the world, the climate crisis and world hunger. The organization works domestically on ensuring all students graduate from high school. Financial advisors warn that just because a billionaire favors a particular allocation, it doesn’t mean all investors should follow suit.
Leon Cooperman fears bear market if Elizabeth Warren wins: ‘They won’t open the stock market’— Hedge fund titan Leon Cooperman said he’s concerned about a move to the left in the political landscape, which could harm the economy and the stock market. “There’s unquestionably a shift to the left in this country,” Cooperman said at the Delivering Alpha conference presented by CNBC and Institutional Investor. “They won’t open the stock market if Elizabeth Warren is the next president,” he joked. “You don’t make the poor people rich by making rich people poor,” Cooperman said. “The Democratic Party seems to be leaning towards the left on policies, which is very harmful for the economy. I don’t like the shift to the left.” They’ll open the market if Warren wins, it will just be “a hell of a lot lower,” Cooperman later said on CNBC. “It would be a bear market and they go on for a year and go down 25%,” Cooperman said. Warren, a Massachusetts senator, has been moving up in the crowded Democratic presidential field, polling only second to former Vice President Joe Biden in a new NBC/WSJ poll. She has been a champion of the left wing for her bank bashing and wealth tax proposals. Warren has made aggressive economic populism the signature of her White House bid. She has proposed a wealth tax on assets above $50 million and a minimum tax on the profits of the largest corporations, to help finance new government benefits for child care, health care, housing and education. “Her policies are counterproductive,” Cooperman said on CNBC. “They’re negative for capitalism, and capitalism is what brought America into the position we’re in today.” In an interview with CNBC in January, Warren said, “I want these billionaires to stop being freeloaders.”
The Financial Times’ Martin Wolf Discovers that Rentier Capitalism and Financialization Increase Inequality and Hurt Growth - Yves Smith - Surprisingly, no one commented on a link to an important article by the Financial Times’ esteemed economics editor, Martin Wolf, Martin Wolf: why rigged capitalism is damaging liberal democracy, that weighed in as a major feature, as opposed to his usual column length. Wolf’s article is noteworthy by virtue of singling out, above all, rentier capitalism as the underlying culprit in rising inequality and disappointing productivity growth, and depicts financialization as one of the biggest contributors. On the one hand, readers of this site are very familiar with these arguments, particularly via Michael Hudson’s long-standing focus on how neoliberal economists chose to ignore a key insight of classical economists, that rentiers are a drag on productive activity and governments need to keep them in check. One of the particularly unproductive activities is secondary market trading and asset management. For instance, a 2015 study by the IMF found that the optimal level of development of a banking sector was that of Poland. A bigger finance sector might be OK only if it were tightly regulated.On the other, Wolf is a barometer of leading edge conventional wisdom, so his calling out rentiers and Big Finance is a sign of a major shift underway, if nothing else, splits among the elites. Admittedly, the editors downplayed both of Wolf’s big points via their title and subhead, and Wolf arguably buried his lede by a first explaining that all is not well in the economy, a fact that in fairness may not be obvious to the top 10%ers that constitute the pink paper’s audience.But Wolf makes no bones about his big message: So why is the economy not delivering? The answer lies, in large part, with the rise of rentier capitalism. In this case “rent” means rewards over and above those required to induce the desired supply of goods, services, land or labour. “Rentier capitalism” means an economy in which market and political power allows privileged individuals and businesses to extract a great deal of such rent from everybody else….Finance plays a key role, with several dimensions. Liberalised finance tends to metastasise, like a cancer. Thus, the financial sector’s ability to create credit and money finances its own activities, incomes and (often illusory) profits…. Finance also creates rising inequality. Thomas Philippon of the Stern School of Business and Ariell Reshef of the Paris School of Economics showed that the relative earnings of finance professionals exploded upwards in the 1980s with the deregulation of finance. They estimated that “rents” — earnings over and above those needed to attract people into the industry — accounted for 30-50 per cent of the pay differential between finance professionals and the rest of the private sector.
DOJ Accuses JPMorgan's Precious Metals Trading Desk Of Being A Criminal Enterprise - Who would have thought that JPMorgan's precious metals trading desk is the functional equivalent of the mafia, and that its one-time leader, Blythe Masters, was the mafia's don? Well, almost everyone who didn't mind being designated a conspiracy theorist for years. And now comes vindication, because this has just been confirmed by the DOJ, which accused the PM trading desks at JPMorgan of being deeply involved in what prosecutors described as a "massive, multiyear scheme to manipulate the market for precious metals futures contracts and defraud market participants."In an indictment unsealed on Monday morning, the DoJ charged Michael Nowak, a JPMorgan veteran and former head of its precious metals trading desk and Gregg Smith, another trader on JPM's metals desk, in the probe. (Blythe Masters was somehow omitted).“Based on the fact that it was conduct that was widespread on the desk, it was engaged in in thousands of episodes over an eight-year period -- that it is precisely the kind of conduct that the RICO statute is meant to punish,” Assistant Attorney General Brian Benczkowski told reporters.Here's where it gets extra interesting: according to Bloomberg, the unusually aggressive language language embraced by prosecutors reminds legal experts of indictments utilizing the RICO Act - a law allowing prosecutors to take down 'criminal enterprises' like the mafia by charging all members of the organization for any crimes committed by an individual on behalf of the organization. Prosecutors charged the head of JP Morgan’s global metals trading operation and two other traders with "conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity" - language that is typically used to describe a RICO charge. This hints at the possibility of a deeper prosecution for JP Morgan. Already, 12 people have been charged in the precious metals market-rigging conspiracy.
JP Morgan Blames Bear Stearns For 'Criminal Enterprise' At Precious Metals Trading Desk - Now that prosecutors have blamed what they have described as a criminal organization operating inside JP Morgan, it appears the largest bank in the US by assets is resorting to an old strategy for sloughing off accusations of corporate fraud: Blaming it all on an acquisition. According to Bloomberg, two traders who joined JPM's precious metals trading desk after the takeover of Bear Stearns helped introduce the illegal manipulation strategy known as 'spoofing' to their peers on the desk, including the bank's now-former head of the bank's precious metals trading desk, Michael Nowak, who was one of three employees charged with participating in an organized fraud yesterday. Though prosecutors allege that some of the desk's employees were already engaged in 'deceptive practices'. The two men who purportedly brought 'spoofing' to JP Morgan are Gregg Smith, one of the men arrested yesterday, and Christiaan Trunz, who joined the desk after JPM's government-backed takeover of Bear Stearns. Trunz was famously quoted in yesterday's indictment, including one exchange where he was telling a co-conspirator about fake orders being put out by Smith. Prosecutors said that ultimately 12 JPM employees used the strategy during the years between 2008 and 2016 that are the primary focus of the investigation.That pair, Gregg Smith and Christiaan Trunz, showed their new JPMorgan colleagues “a new style of layering multiple deceptive orders at different prices in rapid succession," prosecutors said. The strategy made their market spoofing more difficult to execute and detect, prosecutors wrote in the indictment of Smith and two others. Trunz pleaded guilty last month and is cooperating with authorities. The strategy was adopted by Michael Nowak, who was JPMorgan’s global head of precious metals trading when he was put on leave last month. Federal prosecutors charged Nowak, Smith and a third man, Christopher Jordan, of "conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity" - language that sounds more like RICO charges.
Regulators propose easing margin requirements on swaps — Federal regulators are proposing to repeal the requirement that banks collect initial margin from an affiliate engaged in an intracompany swaps deal. The plan approved by the Federal Deposit Insurance Corp. Tuesday would ease the agencies' 2015 swaps margin rule by only requiring banks to set aside initial funds to cover defaults in deals involving external swaps participants. “Exchanging initial margin with unaffiliated counterparties is an important protection for [depository institutions] against the risk of counterparty default,” FDIC Chairman Jelena McWilliams said in prepared remarks Tuesday. “However, inter-affiliate transactions, conducted among entities that are part of the same banking organization, are often used by banks for internal risk management purposes.” McWilliams said initial margin collateral is “locked up, frozen, and available only in the event that the affiliate fails — a scenario that has become much less likely” in intervening years. The 2015 rule, mandated by the Dodd-Frank Act, required that banks trading derivatives among both affiliates and external parties set aside funds in the event one party defaults. The rules trace back to the aftermath of the 2008 crisis, when unregulated derivatives trading was cited as one of the contributing factors. Banks have lobbied hard for the rule to be defanged. According to one industry estimate, banks had effectively frozen $39.4 billion in collateral for inter-affiliate derivative trades that could have been used elsewhere by the end of 2018. Industry groups cheered the proposal Tuesday. (Other regulatory agencies were expected to follow the FDIC board in advancing the plan.)
Fed's Powell: Don't expect changes to bank liquidity rule — The Federal Reserve Board does not see an immediate need to lower a key short-term liquidity benchmark for banks, Chairman Jerome Powell said Wednesday. The post-crisis requirement, known as the liquidity coverage ratio, is among rules that have drawn attention over concerns they force banks to load up on too many liquid assets. Some believe such regulations have led to market distortions in the short-term funding market. Under the LCR, large banks must maintain enough high-quality liquid assets to cover cash outflows over a 30-day period of stressed economic conditions. “It’s not impossible that we would come to a view that the LCR is calibrated too high, but that’s not something that we think right now,” Powell said at a press conference following a meeting of the Federal Open Market Committee. Instead, Powell noted, the central bank could be prepared to make additional reserves available on its balance sheet. “It might be that more reserves are needed, in which case we are in a position to supply them,” he said. Powell also emphasized that the liquidity buffers are an important tool for banks to have in the event of a weakened economy, but they should not impede institutions in healthy times. “I think we want banks to use their liquidity buffers in times of stress rather than pull back from the markets and pull back from serving their clients as a general rule,” he said. The Fed chief also added that the agency is looking at finalizing the net stable funding ratio in “the relatively near future.” The NSFR governs long-term bank liquidity and, as proposed in 2016, would mandate that systemically significant banks hold enough debt and liquid assets to keep the firms’ operations afloat for at least a year. Both the LCR and NSFR are in line with Basel Committee standards. Meanwhile, Powell indicated that negative interest rates are not option that the Fed is likely to consider now or in an economic downturn, taking a different view than has been expressed by President Trump.
At Press Conference, Fed Chair Powell Refuses to Answer Whether Wall Street Banks Are Too Big to Manage - Pam Martens --Following a lack of liquidity on Wall Street, which necessitated the Federal Reserve having to provide $53 billion on Tuesday and another $75 billion on Wednesday to normalize overnight lending in the repo market, the Chairman of the Fed, Jerome (Jay) Powell held his press conference at 2:30 p.m. yesterday. The press gathering followed both a one-quarter point cut in the Fed Funds rate by the Fed yesterday as well as the first intervention by the Fed in the overnight lending market since the financial crash. (The Fed had to intervene again this morning, making another $75 billion in repo loans available.) The week’s unsettling events should have provided the basis for reporters to fire questions at the Fed Chair along the following lines: (1) Did the overnight repo lending rate jump to an historical high of 10 percent on Tuesday because some of the largest Wall Street banks backed away from lending? (2) With six mega banks on Wall Street holding 90 percent of the risky $272 trillion U.S. derivatives market and also a disproportionate share of Federally-insured deposits, could the U.S. see another 2008 type of crash on Wall Street? (3) Are these six banks too interconnected with each other, meaning that if one of them gets into trouble as Citigroup did in 2008, could it spill over to every other mega Wall Street bank? While every major business news outlet was represented at the press conference, not one of the above questions was asked. One reporter, however, came close. Hannah Lang, a reporter with American Banker, asked Powell about reports out yesterday that Bank of America was being investigated by the Consumer Financial Protection Bureau for opening unauthorized accounts. She asked if the Fed was also investigating this and said that given the pending order against Wells Fargo for the same kind of behavior, if Powell was concerned that these banks are too big to manage. Powell said he saw the news about Bank of America but he had no further information to share. As for whether these mega banks are too big to manage, Powell simply ignored that portion of the question entirely. If Lang had wanted to add critical ammunition to her question, she might have posed it this way: “Chairman Powell, for the first time in U.S. history, two of the largest banks on Wall Street are admitted felons. Citigroup admitted to one criminal felony count in 2015 for its role in rigging foreign currency markets. JPMorgan Chase, the largest bank in the U.S. and on Wall Street, has admitted to three criminal felony counts in the last five years: two counts for its role in Bernie Madoff’s Ponzi scheme and one count for its involvement in rigging foreign currency markets. On Monday, JPMorgan Chase was back in the news again with the Department of Justice charging three of its gold and silver traders with racketeering – a criminal charge typically used against organized crime. And, today, Bank of America is under investigation for opening the same kind of unauthorized customer accounts that happened at Wells Fargo. Mr. Chairman, are these banks too big to manage and too corrupt to be allowed to exist?”
CFPB investigating Bank of America over phony accounts - As part of a probe that grew out of the Wells Fargo phony-accounts scandal, the Consumer Financial Protection Bureau is investigating whether Bank of America also violated federal law by opening credit card accounts without customer authorization. The civil investigation of BofA came to light Tuesday when the bureau posted documents online that detail its legal wrangling with the Charlotte, N.C., company. Bank of America has argued that a March 2019 demand for emails and other records is unduly burdensome, while also calling on the agency to close its investigation. CFPB Director Kathleen Kraninger denied the bank’s petition in July. In one of the newly posted documents, a lawyer for Bank of America acknowledged that the bank found specific instances of what he called “potentially unauthorized credit card accounts,” though he added that the number of such accounts that had been identified was “vanishingly small.” BofA also acknowledged to the CFPB that before March 2017, it did not require customers who opened accounts in its branches to provide signatures that could have served as clear evidence of the customers’ intent. The bank noted that it later changed its practice. Bank of America spokesman Andy Aldridge said Tuesday that the $2.4 trillion-asset company is working as quickly as it can to get the CFPB the information that it needs.
Led by Trump appointee, CFPB is back in the enforcement business - The Consumer Financial Protection Bureau has ratcheted up investigations and enforcement actions in the past few months, an apparent shift by the agency under Director Kathy Kraninger, who had initially signaled that supervision would be the primary focus in her tenure. Kraninger has called more attention to enforcement in recent speeches and public comments. And financial firms are receiving more civil investigative demands and notices alerting them of possible enforcement actions, lawyers say. The notices are similar to those issued under former CFPB Director Richard Cordray. “If you get a subpoena from the CFPB, it’s going to be as intense as it was in the early days,” said Anthony DiResta, a partner and co-chair of consumer protection defense at Holland & Knight and a former regional director at the Federal Trade Commission. “They aren’t as aggressive in their agenda, but in their ways of conducting their investigations and supervisory exams, they are equally as intense." In an example of the agency's tougher approach, Kraninger recently denied a petition by Bank of America for the agency to end its probe into whether the bank broke the law by opening credit card accounts without customer authorization. Yet the CFPB currently faces a leadership vacuum in its enforcement unit. Kraninger is expected to announce soon a successor to Kristen Donoghue, the bureau's former assistant director of enforcement. Donoghue resigned in May less than a week after Eric Blankenstein — a political appointee who was the agency's policy director for supervision, enforcement and fair lending — also resigned. In April, Kraninger outlined her vision for the CFPB and listed enforcement last among the bureau’s top four priorities. At the time, she said the agency would focus on supervising financial institutions and protecting consumers rather than issuing enforcement actions or big financial penalties. A career civil servant, Kraninger gave signals that she would continue many of the deregulatory stances of Mick Mulvaney, the agency's former acting director, whom she previously worked for at the Office of Management and Budget. . But Kraninger has also gone her own way on several issues. She ended Mulvaney's prior efforts to rebrand the CFPB. And, recently, Kraninger has asserted that enforcement is a tool that can prevent consumer harm and mitigate fraud. CFPB enforcement actions have shot up by more than 60% this year compared with 2018. "The level of activity of enforcement has noticeably picked up this year," said Willis. In the case of the BofA investigation, the bank and the CFPB have wrangled over information the bureau is seeking related to allegedly unauthorized account openings. The bank has claimed the agency's March 2019 demand for emails and other records was overly burdensome, but the agency in July refused to end the probe. Kraninger articulated an aggressive stance on stamping out fraud in a recent cable television interview. "There is a lot of fraud, there are a lot of scams," Kraninger said on CNBC's "Squawk Box" earlier this month. "It really is a buyer-beware situation from the front end of things. We’re there. We’re actually taking action and enforcement actions and we’re vigilant."
N.Y. regulator voices objections to CFPB's debt collection plan - New York’s banking and insurance regulator is objecting to the Consumer Financial Protection Bureau’s debt collection proposal, saying it does not go far enough to protect consumers from excessive phone calls and unlimited emails and texts. Linda Lacewell, New York State’s superintendent of financial services, sent a letter Wednesday to CFPB Director Kathy Kraninger outlining concerns about the bureau’s proposed regulation updating the Fair Debt Collection Practices Act of 1977. “The current proposal would severely harm the financial futures and social well-being of millions of consumers in New York state and nationwide,” Lacewell wrote. “As currently written, a debt collector can leave an unlimited number of messages via email, text and social media, all without consumers opting in to the medium.” The CFPB’s proposal would permit debt collectors to use email and texts without first seeking consent from a consumer. Consumers would be allowed to opt out of such communications. Under the plan, debt collectors could phone consumers no more than seven times a week about a specific debt. Lacewell criticized the plan for not requiring debt collectors to verify in advance that the debt they are trying to collect belongs to the person being contacted. “The rule should provide additional protections for consumers complaining about collectors attempting to collect debts not owed, for example, by requiring debt collectors to obtain verification of the debt or a copy of the judgment and review it prior to attempting to collect on the debt,” she wrote. The FDCPA prohibits debt collectors from making abusive, misleading or false representations and from unfair practices in the collection of a debt. The comment period for the debt collection proposal ends Sept. 18.
America's Biggest Banks Are Rehabilitating The Mortgage Bonds That Crashed The Economy In 2008 - 10 years after a blowup in the private-label MBS market nearly brought down the global banking system, the biggest, most systemically important banks (who were ultimately forced to accept a government bailout and a round of consolidation during the fallout) have apparently decided that enough time has passed, and that now would be a good time to revive it, as they close deals on billions in newly issued mortgage-backed bonds, WSJ reports. After many of their investors got stuck holding - as Jeremy Irons' character in "Margin Call" so eloquently put it - "the biggest bucket of odorous excrement in the history of...capitalism," the private label MBS virtually disappeared in the wake of the crisis. Over the years, smaller banks that weren't burdened by all of the regulatory hangups of their SIFI peers have tried to revive the business, but to no avail. But while private label MBS still only represents a tiny share of the overall market, issuance is picking up this year. The timing is certainly interesting. Earlier this month, President Trump proposed privatizing Fannie Mae and Freddie Mac (it's not too difficult to imagine some of these banks buying up chunks of the GSEs' business). And even if the government can't put together a plan to privatize the mortgage-origination giants, the White House will at least shrink them, creating more room in the market for private label. With trillions of dollars of global bonds yielding less than zero, and the 10-year Treasury struggling to retake the 2% level, investors remain "starved" for yield. Since there's no implicit government guarantee on private label bonds, investors will likely demand a higher yield than the MBS being packaged by Fannie and Freddie. Still, there some obvious risks remain. While experts maintain that the banking system is in much better shape today than it was during the run-up to the crisis, many of the mortgages that will be used to package into these securities will be made by non-banks, which are more lightly regulated, and often thinly capitalized. Citigroup recently bought a pool of 932 mortgages from a nonbank lender called Impac Mortgage Holdings and used them to back more than $350 million in bonds in a deal that closed last month. This risks a return to the pre-crisis days, when banks would bid on mortgages, incentivizing lenders to relax their standards to meet growing demand.
Trump housing plan could have unintended consequences for FHA — In its vision for the future of housing finance, the Trump administration not only calls for smaller footprints for the government-sponsored enterprises Fannie Mae and Freddie Mac. It also foresees a smaller role for the Federal Housing Administration. Yet many of the ideas outlined for the FHA in a Sept. 5 report by the Department of Housing and Urban Development have raised eyebrows and have some former FHA officials concerned. The 43-page, presidentially directed report recommends that the FHA refocus on its core mission of catering to lower-income borrowers, leaving other areas of its portfolio for private-market participants. The report also calls for a risk-based pricing system and a higher capital cushion for the agency. But some worry those goals could come into conflict with each other. For example, some experts say tiered pricing could disadvantage the very first-time homebuyers that HUD says it wants to prioritize. “This idea of implementing risk-based pricing would produce an outcome that would just simply raise rates to the same borrowers the rest of the paper talks about ... targeting to help the housing system in the country,” said David Stevens, CEO of Mountain Lake Consulting and former FHA commissioner. Most of the attention in the administration's housing finance plan has focused on the Treasury Department's recommendations for Fannie and Freddie. Yet HUD'S recommendations could also have a major impact on the housing market. The report seems to indicate that the FHA should not compete with the GSEs. It also discusses modernizing the mortgage insurer's technology and restructuring its organizational hierarchy. HUD said the FHA's growth in market share during the Obama administration "increased dramatically while its risk profile has degraded and activities beyond serving its mission borrowers expanded." "FHA should refocus its single-family housing mortgage insurance program on low- and moderate-income families, including [first-time homebuyers], who cannot affordably access credit through traditional underwriting," the report said.
Mortgage Applications Flat in Latest MBA Weekly Survey Mortgage applications decreased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 13, 2019. Last week’s results included an adjustment for the Labor Day holiday. ... The Refinance Index decreased 4 percent from the previous week and was 148 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 16 percent compared with the previous week and was 15 percent higher than the same week one year ago....“The jump in U.S. Treasury rates at the end of last week caused mortgage rates to increase across the board, with the 30-year fixed-rate mortgage climbing to 4.01 percent – the highest in seven weeks,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Refinancing activity dropped as a result, driven solely by conventional refinances.” Added Kan, “The purchase index increased for the third straight week to the highest reading since July. Additionally, the average loan amount on purchase applications increased to its highest level since June. This is a likely a sign that the underlying demand for buying a home remains strong, despite some of the recent volatility we have seen.”...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.01 percent from 3.82 percent, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
NAR: Existing-Home Sales Increased to 5.49 million in August From the NAR: Existing-Home Sales Increase 1.3% in August -Existing-home sales inched up in August, marking two consecutive months of growth, according to the National Association of Realtors®. Three of the four major regions reported a rise in sales, while the West recorded a decline last month. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.3% from July to a seasonally adjusted annual rate of 5.49 million in August. Overall sales are up 2.6% from a year ago (5.35 million in August 2018). .. Total housing inventory at the end of August decreased to 1.86 million, down from 1.90 million existing-homes available for sale in July, and marking a 2.6% decrease from 1.91 million one year ago. Unsold inventory is at a 4.1-month supply at the current sales pace, down from 4.2 months in July and from the 4.3-month figure recorded in August 2018. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in August (5.49 million SAAR) were up 1.3% from last month, and were 2.6% above the August 2018 sales rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory decreased to 1.86 million in August from 1.90 million in July. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Comments on August Existing Home Sales – McBride - Earlier: NAR: Existing-Home Sales Increased to 5.49 million in August A few key points:
1) Existing home sales were up 2.6% year-over-year (YoY) in August. This was the second consecutive YoY increase - following 16 consecutive months with a YoY decrease in sales.
2) Inventory is still low, and was down 2.6% year-over-year (YoY) in August.
3) As usual, housing economist Tom Lawler's forecast was closer to the NAR report than the consensus. See:Lawler: Early Read on Existing Home Sales in August. The consensus was for sales of 5.38 million SAAR. Lawler estimated the NAR would report 5.42 million SAAR in July, and the NAR actually reported 5.49 million SAAR.
4) Year-to-date sales are down about 2.6% compared to the same period in 2018. On an annual basis, that would put sales around 5.20 million in 2019. Sales slumped at the end of 2018 and in January 2019 due to higher mortgage rates, the stock market selloff, and fears of an economic slowdown.
The comparisons will be easier towards the end of this year, and with lower mortgage rates, sales might even finish the year unchanged or even up from 2018. The second graph shows existing home sales Not Seasonally Adjusted (NSA). Sales NSA in August (534,000, red column) were below sales in August 2018 (539,000, NSA). There were fewer selling days in August 2019 than in 2018. Overall this was a solid report.
Redfin Report: U.S. Home Sales Post Biggest Increase in More Than 2 Years in August — U.S. home-sale prices increased 2.7 percent year over year in August to a median of $312,200 across the 217 metros Redfin tracks, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage.Home prices have been growing in a tight range between 1 and 3 percent year over year since September 2018. "Although home-price gains remained relatively modest in August, supply and demand are now heading back toward sellers' favor," said Redfin chief economist Daryl Fairweather. "Home sales are accelerating as buyers eat into a diminishing number of homes for sale. While these trends are to be expected given that mortgage rates have been declining since late last year, global economic uncertainty and talk of a looming recession in the U.S. are staving off many aspects of hot seller's market—think bidding wars, fast sales and huge price escalations—at least for now."The metro areas that saw the biggest price gains were all smaller, affordable places, led by Knoxville, TN (15.3%), Camden, NJ (12.7%) and Greenville, SC (11.8%). Just six of the 85 largest metro areas Redfin tracks saw a year-over-year decline in their median sale price, the biggest of which was in San Jose, California, where home prices fell 11.6 percent from a year earlier.Home sales shot up 10.8 percent in August year over year—the largest increase sinceMarch 2017.The big overall sales increase was driven by relatively affordable metro areas, with the largest year-over-year sales jumps recorded in Camden, NJ (38.6%), Baltimore, MD (27.6%) and Minneapolis, MN (26.7%).The supply of homes for sale fell 5.7 percent year over year, the biggest decline sinceApril 2018. Housing inventory is falling even faster than Redfin expected it to, thanks to a dearth of new listings, which fell 3.7 percent year over year in August, the largest decline on record since Redfin began recording this data in 2012. The biggest declines in the number of homes for sale were in Tacoma, WA (-26.8%),Salt Lake City (-26.1%) and Tulsa, OK (-24.4%)—all relatively affordable metros. The three metro areas with the biggest increases in the number of homes for sale were all metro areas with home prices well above the national median: San Jose (12.5%),Oxnard, CA (11.5%) and Honolulu, HI (11.4%).
Housing Starts increase to 1.364 Million Annual Rate in August, Highest in 12 Years --From the Census Bureau: Permits, Starts and Completions: Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,364,000. This is 12.3 percent above the revised July estimate of 1,215,000 and is 6.6 percent above the August 2018 rate of 1,279,000. Single‐family housing starts in August were at a rate of 919,000; this is 4.4 percent above the revised July figure of 880,000. The August rate for units in buildings with five units or more was 424,000. Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,419,000. This is 7.7 percent above the revised July rate of 1,317,000 and is 12.0 percent above the August 2018 rate of 1,267,000. Single‐family authorizations in August were at a rate of 866,000; this is 4.5 percent above the revised July figure of 829,000. Authorizations of units in buildings with five units or more were at a rate of 509,000 in August.The first graph shows single and multi-family housing starts for the last several years.Multi-family starts (red, 2+ units) were up in August compared to July. Multi-family starts were down 13.7% year-over-year in August.Multi-family is volatile month-to-month, and has been mostly moving sideways the last several years. Single-family starts (blue) increased in August, and were up 3.4% year-over-year. The second graph shows total and single unit starts since 1968.The second graph shows the huge collapse following the housing bubble, and then eventual recovery (but still historically low). Total housing starts in August were above expectations, and starts for June and July were revised up combined. A strong report.
US housing starts race to 12-year high in August - U.S. homebuilding surged to more than a 12-year high in August as both single- and multi-family housing construction increased, suggesting that lower mortgage rates were finally providing a boost to the struggling housing market. Housing starts jumped 12.3% to a seasonally adjusted annual rate of 1.364 million units last month, the highest level since June 2007, the Commerce Department said on Wednesday. Data for July was revised to show homebuilding falling to a pace of 1.215 million units, instead of decreasing at a rate of 1.191 million units as previously reported. Economists polled by Reuters had forecast housing starts would advance to a pace of 1.250 million units in August. Building permits increased 7.7% to a rate of 1.419 million units in August, the highest level since May 2007. Housing starts rose 6.6% on a year-on-year basis in August. The housing market, the most sensitive sector to interest rates, had until now shown few signs of benefiting from the Federal Reserve’s monetary policy easing, which has pushed down mortgage rates from last year’s multi-year highs. Economists and builders had blamed the lackluster performance on land and labor shortages. A survey on Tuesday showed confidence among homebuilders edged up in September, with builders reporting solid demand for homes. Builders, however, said they “continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor.” They also noted that a year-long trade war between the United States and China, which has undercut manufacturing, was “holding back home construction in some parts of the nation.” The 30-year fixed mortgage rate has dropped more than 130 basis points to an average of 3.56%, according to data from mortgage finance agency Freddie Mac. Further declines are likely with the Fed expected to cut interest rates again on Wednesday, to blunt the hit on the economy from the U.S.-China trade tensions. The U.S. central bank lowered borrowing costs in July for the first time since 2008. Residential investment has contracted for six straight quarters, the longest such stretch since the 2007-2009 recession. Single-family homebuilding, which accounts for the largest share of the housing market, increased 4.4% to a rate of 919,000 units in August, the highest level since January. Single-family housing starts increased in the West, Midwest and the populous South, but fell in the Northeast. Permits to build single-family homes vaulted 4.5% to a rate of 866,000 units last month. Permits, however, continued to lag housing starts, suggesting limited scope for a strong rise in single-family homebuilding in the coming months. Starts for the volatile multi-family housing segment soared 32.8% to a rate of 445,000 units in August, reversing the prior two months’ declines. Though rental inflation has slowed in recent months, economists do not expect the trend to continue as rental vacancy rates remain low. Permits for the construction of multi-family homes increased 13.3% to a rate of 553,000 units last month.
Housing: BOOM! - This morning’s report on housing permits and starts showed new expansion highs in both overall permits and starts. The less volatile single family segment also recovered, with both single family permits and starts at one year highs, although slightly below their expansion peaks. Here are total and single family permits: And here are total and single family starts: The housing downturn is over. As expected, lower interest rates for the past eight months have shown up in the housing data in spades.This has major implications for the index of leading indicators this month, which can be expected to pop. And since housing permits are a long leading indicator, this, along with new expansion lows in corporate bond yields, new highs in per capita real retail sales, renewed increases in real money supply, and continuing looseness in credit conditions, means that the only negative long leading indicator is the partially inverted yield curve, and the only mixed or neutral indicator is corporate profits. In short, the latter part of next year is shaping up to be quite positive. In the immediate term, I wonder if this takes the pressure off the Fed to lower interest rates. If you are a Democrat, don’t hang your hat on there being a recession on Election Day next year (although “Tariff Man” may yet come through!).
Comments on August Housing Starts – McBride - Earlier: Housing Starts increase to 1.364 Million Annual Rate in August, Highest in 12 Years - Total housing starts in August were above expectations, and starts for June and July were revised up combined. This was the highest level of starts in 12 years. The housing starts report showed starts were up 12.3% in August compared to July, and starts were up 6.6% year-over-year compared to August 2018. Single family starts were up 3.4% year-over-year, and multi-family starts were up 13.7% YoY. Much of the strength this month was in the volatile multi-family sector, still - overall - this was a strong report. This first graph shows the month to month comparison for total starts between 2018 (blue) and 2019 (red). Starts were up 6.6% in August compared to August 2018. Year-to-date, starts are down 1.8% compared to the same period in 2018. Last year, in 2018, starts were strong early in the year, and then fell off in the 2nd half - so the early comparisons this year were the most difficult. My guess was starts would be down slightly year-over-year in 2019 compared to 2018, but nothing like the YoY declines we saw in February and March. Now it seems likely starts will be up in 2019 compared to 2018.Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).These graphs use a 12 month rolling total for NSA starts and completions.The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but turned down, and has moved sideways recently. Completions (red line) had lagged behind - then completions caught up with starts.As I've been noting for several years, the significant growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR. The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer.
New Residential Building Permits: 1.419M in August - The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for August new residential building permits. The latest reading of 1.419M was an increase from 1.317M in July and above the Investing.com forecast of 1.310M. Here is the opening of this morning's monthly report, including a note regarding revisions: Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,419,000. This is 7.7 percent (±1.2 percent) above the revised July rate of 1,317,000 and is 12.0 percent (±1.6 percent) above the August 2018 rate of 1,267,000. Single‐family authorizations in August were at a rate of 866,000; this is 4.5 percent (±0.8 percent) above the revised July figure of 829,000. Authorizations of units in buildings with five units or more were at a rate of 509,000 in August. [link to report] Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included. Here is the data with a simple population adjustment. The Census Bureau's mid-month population estimates show substantial growth in the US population since 1960. Here is a chart of housing starts as a percent of the population. We've added a linear regression through the monthly data to highlight the trend.
NAHB: "Builder Confidence Hits Yearly High in September " - The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 68 in September, up from 67 in August. Any number above 50 indicates that more builders view sales conditions as good than poor. From NAHB: Builder Confidence Hits Yearly High in September Builder confidence in the market for newly-built single-family homes rose one point to 68 in September from an upwardly revised August reading of 67, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Sentiment levels have held in the mid- to upper 60s since May and September’s reading matches the highest level since last October. “Low interest rates and solid demand continue to fuel builders’ sentiments even as they continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn. “Solid household formations and attractive mortgage rates are contributing to a positive builder outlook,” said NAHB Chief Economist Robert Dietz. “However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China. NAHB’s Home Building Geography Index indicates that the slowdown in the manufacturing sector is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas.” …The HMI index gauging current sales conditions increased two points to 75 and the component measuring traffic of prospective buyers held steady at 50. The measure charting sales expectations in the next six months fell one point to 70. Looking at the three-month moving averages for regional HMI scores, the Northeast posted a two-point gain to 59, the West was also up two points to 75 and the South moved one point higher to 70. The Midwest was unchanged at 57.This graph show the NAHB index since Jan 1985. This was above the consensus forecast.
AIA: "Substantial Decline in Architecture Billings" - Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Substantial Decline in Architecture Billings Demand for design services in August took a markedly downward swing compared to July’s already soft score, according to a new report released today from The American Institute of Architects (AIA).AIA’s Architecture Billings Index (ABI) score of 47.2 in August showed a significant drop in architecture firm billings compared to the July score of 50.1. Any score below 50 indicates a decrease in billings. The design contracts score also declined to 47.9 in August, representing a rare dip for this indicator. Billings in the West stayed modestly positive while all other regions remained in negative territory.“The sizeable drop in both design billings and new project activity, coming on the heels of six months of disappointing growth in billings, suggests that the design expansion that began in mid-2012 is beginning to face headwinds,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Currently, the weakness is centered at firms specializing in commercial/industrial facilities as well as those located in the Midwest. However, there are fewer pockets of strength in design activity now, either by building sector or region than there have been in recent years.”
• Regional averages: West (51.2); Northeast (49.1); South (48.2); Midwest (46.4)
• Sector index breakdown: institutional (50.6); multi-family residential (50.5); commercial/industrial (46.9); mixed practice (46.3)
Hotels: Some Analysis of Short Term Rentals; Occupancy Rate Decreased Year-over-year -- First, some analysis from HotelNewsNow on the impact of short term rentals on hotels: The effects of maturing short-term rentals on US hotels From HotelNewsNow.com: STR: US hotel results for week ending 7 September The U.S. hotel industry reported negative year-over-year results in the three key performance metrics during the week of 1-7 September 2019, according to data from STR. In comparison with the week of 2-8 September 2018, the industry recorded the following:
• Occupancy: -1.1% to 61.0%
• Average daily rate (ADR): -1.0% to US$121.37
• Revenue per available room (RevPAR): -2.1% at US$73.97
Reflective of the anticipation of Hurricane Dorian’s landfall, Miami/Hialeah, Florida, reported the steepest decline in RevPAR (-27.0% to US$60.47), due primarily to the largest drop in occupancy (-20.8% to 47.6%). The market registered the second-largest decrease in ADR (-7.9% to US$127.12).Orlando, Florida, experienced the only other double-digit decline in occupancy (-14.8% to 51.9%) and the third-largest decrease in RevPAR (-13.7% to US$51.13).The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The red line is for 2019, dash light blue is 2018 (record year), blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).Occupancy has been solid in 2019, and close to-date compared to the previous 4 years. However occupancy will be lower this year than in 2018 (the record year). Seasonally, the 4-week average of the occupancy rate will now move sideways until the Fall business travel season.
US Consumers At Maximum Leverage, Might Not Be Able To Save The Day --John Kemp, senior market analyst of commodities at Reuters, says in a new report that US borrowers as a whole look stable but there are signs emerging that point to trouble, especially in the farm sector as a result of the trade war, and among a robust jobs market and some wage growth, consumers are nearing maximum leverage.Kemp first talks about the positives in the lending market. He notes the number of commercial bank loans and leases 30 days or more past due in 2Q19 is at 1985 lows. The percentage of all bank loans and leases in arrears was 1.50% last quarter, down from 1.64% over the same period in 2018. The high was seen at 7.40% in March 2010 after the previous recession. Commercial real estate loans and commercial and industrial (C&I) lending is healthy as well, with delinquency rates at multi-decade lows. But Kemp notes, other signs of stress are building that could produce spillovers. First, the trade war continues to batter farmers in the Central and Midwest states. Farmland loans continued to deteriorate last quarter, now have 2.32% in arrears, up from 2.15% a year earlier and the highest since 2013. The default rate on these agricultural loans jumped to 1.82% last quarter, from a low of .77% in 2015. Besides the farmers, another concerning trend is the jump in delinquency rates for credit cards and other consumer loans, which have been above trend since 2015. Consumer delinquencies are at several decade lows thanks to a robust jobs market and some wage growth, but the current state of the consumer, Kemp says, "may not have the capacity to take on much more debt without running into trouble." Commercial banks charged off 3.74% of all credit card loans last quarter, the growth rate of bad loans write-downs was at the fastest pace since 2012. The most important takeaway from Kemp's report is that consumers are at or near maximum leverage, making the narrative that consumers will save the day a little hard to believe. So it should now make sense why President Trump is calling for 100bps rate cuts, negative interest rates, quantitative easing, and emergency tax cuts, it's that he too doesn't believe the consumer is healthy enough to rescue the faltering economy and a recession is nearing.
Retail Apocalypse- 2019 Store Closures Already Surpass 2018 - As the economy cycles down through fall, there is new, alarming data by professional services firm BDO USA LLP, first reported by The Wall Street Journal, that indicates retail bankruptcies continue to rise as store closures have already outpaced all of 2018. BDO warned that the recent acceleration of the retail apocalypse was primarily due to last year’s weak holiday shopping season.The rate of bankruptcy filings and store closures this year have jumped to crisis levels, expected to continue into 2020. David Berliner, who leads business restructuring at BDO, said the trend is rather alarming but could slow into late 2019. “I don’t think the pace of the bankruptcy filings will be as large as it was in the first half,” he added.BDO found many retailers are dealing with massive debt loads, over expansion due to cheap money, private equity-ownership pressures, and changing consumer behavior. It was the weak consumer in the 2018 shopping season that led to the acceleration of store closures in 2019. Retail sales in 1H19 were lackluster, due to smaller tax refunds for consumers, trade war uncertainties and tariffs, and inclement weather, which forced many retailers to offer significant discounts, according to BDO. A new BofA credit card report showed more evidence the economy continued to slow this summer. BofA found that retail sales ex-autos fell 0.5% MoM in August, which reversed the 0.9% gain i n July, and was not only the first monthly contraction since February this year, but was also the biggest monthly drop in 2019.
Two Horrid Wall Street Journal Stories Show What a Malefactor Amazon Has Become -Lambert Strether - Two recent articles in the Wall Street Journal, “Amazon Has Ceded Control of Its Site. The Result: Thousands of Banned, Unsafe or Mislabeled Products” and “Amazon Changed Search Algorithm in Ways That Boost Its Own Products“, show what a wretched hive of scum and villainy Amazon has become. (Let me note at the outset that here, as with the Boeing saga, we’re seeing really solid reporting from the WSJ, reporting that really puts WaPo and the New York Times to shame, as the Financial Times also regularly does, albeit mostly on the analytical side. Why, oh why, can’t we have a better press…). I’m not sure how much value I can add to the material, except to continually drop my jaw in creative and/or spectacular ways, but we haven’t looked at either article in depth, and I think that is useful to readers in and of itself. So I’ll start with the first story in time (“Amazon Has Ceded…”) and then move on to “Amazon Changed Search Algorithm.” From the lead of “Amazon Has Ceded…” Many of the millions of people who shop on Amazon.com see it as if it were an American big-box store, a retailer with goods deemed safe enough for customers. In practice, Amazon has increasingly evolved like a flea market. It exercises limited oversight over items listed by millions of third-party sellers, many of them anonymous, many in China, some offering scant information.I can’t find (readers may do better) any scholarly work on whether a flea market is an Akerlovian lemon market, but I would expect that the information asymmetry between buyer and seller would make it so. Of course, this asymmetry is to some extent mitigated by reviews (assuming they’re not fake), which leads to the pleasing conclusion that Amazon’s market capitalization (which, AWS aside, ultimately depends on its reputation for being a reliable venue in which to shop) rests on nothing more technical or brain-genius level than being a good, old-fashioned content provider. Also, maybe that long, long supply chain to China has some unexpected downsides? The scope of problems with third-party products is significant (i.e., more than the flimsy off-brand cables and bad chargers I’ve managed to buy over the years):A Wall Street Journal investigation found 4,152 items for sale on Amazon.com Inc. ‘s site that have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators—items that big-box retailers’ policies would bar from their shelves. Among those items, at least 2,000 listings for toys and medications lacked warnings about health risks to children. Sounds like those baby formula manufacturers have moved on.
Industrial Production Increased in August -- From the Fed: Industrial Production and Capacity Utilization Industrial production rose 0.6 percent in August after declining 0.1 percent in July. Manufacturing production increased 0.5 percent, more than reversing its decrease in July. Factory output has increased 0.2 percent per month over the past four months after having decreased 0.5 percent per month during the first four months of the year. In August, the indexes for utilities and mining moved up 0.6 percent and 1.4 percent, respectively. At 109.9 percent of its 2012 average, total industrial production was 0.4 percent higher in August than it was a year earlier. Capacity utilization for the industrial sector increased 0.4 percentage point in August to 77.9 percent, a rate that is 1.9 percentage points below its long-run (1972–2018) average.This graph shows Capacity Utilization. This series is up 11.2 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 77.9% is 1.9% below the average from 1972 to 2017 and below the pre-recession level of 80.8% in December 2007. Note: y-axis doesn't start at zero to better show the change. Industrial ProductionThe second graph shows industrial production since 1967. Industrial production increased in August to 109.9. This is 26% above the recession low, and 4.3% above the pre-recession peak. The change in industrial production and increase in capacity utilization were above consensus expectations.
Industrial production rebounds; another message of slowdown, no recession - Industrial Production is the King of Coincident Indicators. When industrial production peaks and troughs coincides more often than any other indicator to NBER’s recession dating. Let’s take a look at the report for August, which was pretty darn good, which was released this morning. Production as a whole increased 0.6%, and last month’s report was revised upward by +0.1%. The manufacturing component also increased, by 0.5%. Both, however, are still below their peaks set last December (left scale in the graphs below). The other important component, mining (which includes oil production) increased 1.4%, reversing July’s decline, missing a new high by less than 0.1% (right scale): Stepping back for a longer term look, here is the same graph including the “shallow industrial recession” of 2015-16: The main difference between the two periods is that the more volatile mining (oil and gas) sector declined by almost 23% in 2015-16, but has continued to increase this year. Manufacturing, which declined about 3% in 2015-16, declined 2% at its worst point this year. Overall industrial production declined by -5% in 2015-16, but only declined -1.4% at its worst point in April of this year. Here is the update on all of the four monthly indicators that the NBER has said it pays particular attention to in deciding whether or not there is a recession: In sum, production had a much more shallow decline this year than in 2015-16, and — so far — looks to be recovering from its trough in April. Once again the message appears to be: slowdown, no recession.
NY Fed: Manufacturing "Business activity was little changed in New York State" - From the NY Fed: Empire State Manufacturing Survey Business activity was little changed in New York State, according to firms responding to the September 2019 Empire State Manufacturing Survey. The headline general business conditions index edged down three points to 2.0. New orders were marginally higher than last month, and shipments grew modestly. Delivery times were steady, and inventories increased. Employment levels expanded, while the average workweek held steady....After spending three months in negative territory, the index for number of employees rose to 9.7, pointing to an increase in employment levels, while the average workweek index came in at 1.7, indicating little change in hours worked.…Indexes assessing the six-month outlook suggested that optimism about future conditions waned. The index for future business conditions fell twelve points to 13.7. This was lower than the consensus forecast.
Philly Fed Manufacturing shows Continued Expansion in September, At Slower Pace - From the Philly Fed: August 2019 Manufacturing Business Outlook Survey: Manufacturing activity in the region continued to expand this month, according to results from the September Manufacturing Business Outlook Survey. The survey's broad indicators remained positive, although their movements were mixed: The indexes for general activity and new orders fell, while the indexes for shipments and employment increased. The survey’s price indexes increased notably this month. The survey’s future general activity index moderated but continues to suggest growth over the next six months. The diffusion index for current general activity fell 5 points this month to 12.0. This was at the consensus forecast. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
Weekly Initial Unemployment Claims increased to 208,000 - The DOL reported: In the week ending September 14, the advance figure for seasonally adjusted initial claims was 208,000, an increase of 2,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 204,000 to 206,000. The 4-week moving average was 212,250, a decrease of 750 from the previous week's revised average. The previous week's average was revised up by 500 from 212,500 to 213,000. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
Colt to end production of AR-15 rifles for personal use - Gun manufacturer Colt announced Thursday that it will no longer produce and sell rifles such as the AR-15 for personal use. Colt President and CEO Dennis Veilleux said in a statement that the company's "significant" law enforcement and military contracts "are absorbing all of Colt’s manufacturing capacity for rifles."He said that "the market for modern sporting rifles has experienced significant excess manufacturing capacity.""Given this level of manufacturing capacity, we believe there is adequate supply for modern sporting rifles for the foreseeable future," he added. He also stressed the company's commitment to consumer markets and gun rights, saying the company would continue to produce "expanding lines of the finest quality 1911s and revolvers.""We believe it is good sense to follow consumer demand and to adjust as market dynamics change," he said. "Colt has been a stout supporter of the Second Amendment for over 180 years, remains so, and will continue to provide its customers with the finest quality firearms in the world." The move comes after a number of retailers changed their policies on firearms in recent weeks in the wake of several mass shootings over the summer that renewed a debate about gun control.
US Car Ownership Costs Surge To Record Highs, Delinquencies Soar, Trouble Ahead - A new report by the American Automobile Association (AAA) indicates new car ownership costs have reached its highest levels since the automobile travel firm began tracking costs in 1950. A new car will have an annual average cost of about $9,282, or $773.50 per month, based on owners driving about 15,000 miles per year. AAA suggests rising costs are mostly associated with increased borrowing costs as higher rates and longer term loans are overburdening consumers. The second highest costs are fuel then maintenance. The Autoblog said, "the finance portion of the annual vehicle cost rose 24% this year compared to 2018." While the average cost per year is $9,282, the amount of money a consumer could spend will significantly depend on the type of car. The report said small gas-powered cars cost about $7,114 per year. Pickup trucks and SUVs average well over $10,000. A breakdown of the costs are seen below:
UAW calls strike against General Motors – About 48,000 members of the United Auto Workers union went on strike early Monday as contract talks with General Motors broke down. Union members walked out of factories and set up picket lines at 33 plants across the nation as well as 22 parts warehouses. The strike, depending on its length, could easily cost GM hundreds of millions of dollars. The last time the union declared a strike at GM was in 2007. The two-day work stoppage was estimated to have cost the Detroit automaker more than $300 million a day. The called strike comes despite GM saying it presented a "strong offer" to the union that included the addition or retention of thousands of jobs and more than $7 billion in new investments over the next four years. UAW Vice President Terry Dittes, who oversees the union's GM unit, made the strike announcement during a press conference Sunday morning in Detroit. "Today, we stand strong and say with one voice, we are standing up for our members and for the fundamental rights of working class people in this nation," Dittes said. The union, he said, did not make this decision lightly. Dittes says a strike is the union's last resort because both sides are far apart in bargaining over a new four-year contract, including on issues like health care and fair wages. Bargaining was scheduled to resume at 10 a.m. EDT on Monday.
US autoworkers shut down production at GM in nationwide strike - At 11:59 p.m. Eastern Time on Sunday, 49,000 autoworkers at General Motors began a nationwide strike, shutting down every one of the company’s 35 plants in the United States. The walkout is the most significant strike by American industrial workers in a generation, a testament to the determination of autoworkers to end forty years of concessions. It demonstrates the immense social power of the working class and marks an escalation of the rising international movement of the working class. The GM strike in the US follows last week’s strike by 8,000 GM workers in South Korea, where the auto giant is threatening more plant closures. It also follows a strike by transit workers in France that shut down the Paris metro, and a wave of mass protests, from the Yellow Vests in France, to workers and youth in Hong Kong, to the mass movement in Puerto Rico, to waves of strikes and protests in Sudan, Algeria and other parts of Africa. Earlier this year, maquiladora auto parts workers in Matamoros, Mexico, rebelled against their pro-company unions, set up rank-and-file strike committees and shut down production for weeks. They marched to the US border to appeal for support from their US brothers and sisters. Workers at Ford and Fiat Chrysler enthusiastically support the GM strikers and overwhelmingly favor joining them in an all-out strike against the US-based auto companies. Workers all over the world will take heart and be inspired by an expression of the power of the working class in the center of world capitalism. The United Auto Workers union, thoroughly discredited among autoworkers for its role in enforcing decades of concessions and a widening corruption scandal implicating its top leadership, tried desperately to prevent a strike. The beginning of the strike comes only a day after the union ordered GM production workers to cross the picket lines of UAW janitors at plants in Michigan and Ohio. In the end, the UAW decided it had no choice but to a call a strike or risk a rank-and-file rebellion and loss of any control over the workers. Workers need to be clear that in order to prove its value to the company and federal corruption investigators, the union will work to shut down the strike as quickly as possible and impose a sellout.
Ford, Fiat-Chrysler workers call for all-out strike alongside GM workers - At midnight Sunday, roughly 49,000 autoworkers struck at General Motors (GM), shutting down production at the largest US-based automaker. The strike is a major episode in the resurgence of the class struggle. American autoworkers are now at the tip of the spear of a global counteroffensive by workers against poverty, inequality and job losses, encompassing not only autoworkers but teachers, public transit workers, Amazon workers and the entire working class. The strike was called by the United Auto Workers (UAW) in the face of overwhelming opposition to rampant union corruption and its decades of colluding with management to force through concessions. UAW President Gary Jones, who faces indictment for embezzling hundreds of thousands of dollars in unions, could not show his face in public on Sunday and was not present at the press conference announcing the strike. The UAW only called a strike after forcing GM workers to cross the picket line on Sunday against striking UAW janitors at five facilities in Michigan and Ohio. Having been forced to call a strike, the UAW will now do everything it can to limit it from spreading to Ford and Fiat Chrysler, where the union has already signed contract extensions. The union will seek to shut the strike down at the first opportunity and force through the dictates of management, including expanding the use of temps and cuts to health care. Autoworkers can break free from the stranglehold of the UAW by organizing rank-and-file factory committees, formed by and accountable to autoworkers themselves, to take over direction of the strike and establish lines of communication and support with the entire working class.A second tier worker from the Ford Dearborn Truck Plant told the Autoworker Newsletter: “Everybody should join with General Motors workers on strike. We cannot believe anything the UAW says. We haven't even seen any union reps. Workers are very upset. We are not happy about all this corruption. We don't know what could happen."
BREAKING: GM hiring scabs to replace strikers at Missouri and Texas assembly plantsSocial media posts by autoworkers throughout the day have exposed that General Motors is hiring scab labor to operate its key assembly plants in Arlington, Texas and Wentzville, Missouri. A flyer distributed by temp agency Stride Staffing advertised a job fair held in a Dallas suburb late Tuesday morning for “temp to hire” assembly technicians on three shifts. Any strikebreakers who are hired will earn the poverty wage of $12 to $12.35 per hour, less than some fast food workers in the Dallas area. The UAW local president at Arlington Assembly reportedly confirmed that the company was hiring scabs in an emergency meeting held this morning. A WSWS Autoworker Newsletter reader in Missouri also reported that the UAW local president at Wentzville Assembly has informed striking GM workers that the company is hiring strikebreakers at their plant as well. GM met with UAW negotiators for the second day in a row Tuesday in order to hash out a way to shut down the strike on the company’s terms. The UAW side is being advised by none other than Region 5 Director Vance Pearson, who was arrested last week for embezzling union funds, according to press reports Monday. Politico also reported on Tuesday that the Trump administration is also involved, as yet behind the scenes, to end the strike. Trump has threatened to bring in a federal mediator and to broker a deal to re-open the shuttered Lordstown, Ohio assembly plant in exchange for what would be huge concessions handed over by the UAW. However, the hiring of scabs suggests that GM is not assuming that either the UAW or the Trump administration will be able to shut down the strike and push through such a deal any time soon. It is a sign that the giant company and the Wall Street investors that stand behind it are digging in for a drawn-out fight with autoworkers. The exposure of the strikebreaking operation comes the day after the company cut off medical benefits for striking workers, jeopardizing access to healthcare for tens of thousands of workers. The company was originally set to provide benefits until the end of the month. Workers are forced to obtain healthcare from the starvation ration they are being paid by the UAW strike fund, which provides medical and prescription drug coverage but not dental, vision, hearing or other benefits. Workers will not begin accruing strike pay until next Monday, when they will make a paltry $250 a week.
GM buyers and owners could soon start feeling impact of UAW strike - The walkout is costly for both GM and the UAW, but the longer it drags on, the more likely it is to be felt by consumers, as well, both those looking to buy one of the automaker’s new products as well as owners of vehicles needing repairs. In the weeks leading up to the contract deadline, Detroit’s largest automaker beefed up production to help pad dealer inventory, industry analysts noted. But that will only carry things for so long, especially with high-demand models, as well as hot new products like the 2020 Chevrolet Corvette. Complicating matters, the closure of GM parts distribution warehouses is already posing problems, especially for owners needing collision and recall repairs. “We got everything we need for this week, but that doesn’t mean that we won’t be short next week,” said Tiffany Sullivan, the manager at Rainbow Paint and Body, a collision repair shop in Savannah, Georgia, adding that she’s already been alerted about possible shortages by GM representatives. For now, a number of the dealers that CNBC.com spoke to said they were in reasonably good shape when it comes to new vehicle inventory. Typically, automakers like to have somewhere between 60 and 65 days’ worth of inventory on dealer lots, said Michelle Krebs, a senior analyst with Cox Automotive. But because of both the ongoing slowdown in the U.S. car market and a bump up in production in anticipation of a strike, GM was able to beef up its national inventory to about 77 days at the beginning of the strike, according to Cox data. The figures, however, vary sharply from one product line to another.
America’s Workforce Elderly Workforce To Double By 2028 -The US Bureau of Labor Statistics is predicting a major increase over the next 10 years in the number of age 75-and-older workers in the workforce. The increase, from last year’s 1.8 million workers who are 75 or older to 3.7 million in 2028, shows a remarkable 105% growth rate for that demographic. The second largest growth rate for the next 10 years will come from those workers aged 65 to 74, at 51% growth.In a nutshell, those who are 65 and older are simply staying in the workforce longer. There is no growth expected from those in the 45-64 bracket, and—it may come as a surprise—there is no change expected in the 25-34 age bracket, either. For labor force participation rates, there is actually negative growth expected from those age 16 to 24, declining to 51 percent by 2028. Part of the shift from younger to older workforce is because the younger demographic is expected to stay in school longer, living up to their reputation as one of the most educated generations. The other reason is that the older generation is working in jobs traditionally held by younger workers. So, what’s behind the sharp increase that is expected in the oldest work-age demographic?
- Money, money, money. The 55 and older crowd is not financially prepared to bow out of the workforce. The idea of the private pension is dead. And many this age haven’t saved enough for retirement. The result is that they are working longer and longer.
- Increased life expectancy. People are living longer in general, meaning this age group is growing. The average life expectancy in the United States as of 2016 was 78.69 years old. The trend just in the last three years is flat, but over the last decade or couple of decades, the upward trend is clear.
- People that age are healthier than they were a decade or two ago. People are smoking less, eating healthier, and are getting more—and better—vaccinations such as for Hep B and chickenpox. This means people are capable of working longer because they are physically able to.
- Satisfaction. Some people are working longer just because they like their job. Job satisfaction has reached the highest level in two decades, thanks to the improved labor market. In fact, according to the most recent version of The Conference Board survey, 54% of US workers are satisfied with their employment. The increase in job satisfaction for the year represents the second-largest increase in the survey’s 32-year history, according to Industry Week.
Whole Foods is cutting medical benefits for hundreds of part-time workers -- Whole Foods is cutting medical benefits for hundreds of part-time workers, the company confirmed to Business Insider on Thursday. The changes will take effect on January 1 and affect just under 2% of Whole Foods' total workforce, a Whole Foods spokesperson told Business Insider. Whole Foods has about 95,000 employees, so it means about 1,900 people will lose benefits. The benefits that the company is cutting are offered to part-time employees who work at least 20 hours a week. The changes will not affect full-time employees. Whole Foods said it was making the change "to better meet the needs of our business and create a more equitable and efficient scheduling model." "The small percentage of part-time team members ... who previously opted into medical benefits through Whole Foods Market's healthcare plan — less than 2% of our total workforce — will no longer be eligible to buy into medical coverage through the company," the Whole Foods spokesperson said.
U.S. Poverty Levels Fall To Pre-Recession Low - The U.S. Census Bureau has published a report into income and poverty levels across the United States, finding that median household income in 2018 was $63,179 while median earnings for all workers was $40,247. Additionally, as Statista's Niall McCarthy notes, poverty has now fallen for the fourth consecutive year, thanks to the healthy state of the economy and it has hit pre-recession lows. In 2018, the official U.S. poverty rate was 11.8 percent, a reduction of 0.5 percentage points from the 12.3 percent recorded a year previously. Poverty levels are now significantly lower than in 2007, just before the financial crisis and the most recent U.S. recession.The 2018 data shows that poverty rates for children fell 1.2 percentage points to 16.2 percent while it remained at a steady 9.7 percent among over 65s. Back in 1959, the national poverty rate was 22.4 percent and it has decreased significantly in the years, although there was some notable fluctuation in the mid-1980s and 1990s. Even though the return to the pre-recession low is positive, 11.8 percent means that some 38.1 million Americans are still living in poverty.Amid warnings of a fresh U.S. recession lying just around the corner, the current downward tend might only be temporary.
Over A Million Households Climbed To Middle Class Under Trump, Census Data Shows - More than 1.2 million American households moved to above $50,000 in annual income between 2016 and 2018, according to Census Bureau data released on Sept. 10, a sign of a growing middle class.The data is a boon to President Donald Trump, whose platform is centered on a strong economy and promises of increased prosperity.While in 2016, some 58.5 percent of households enjoyed more than $50,000 in total money income, the share rose to more than 60 percent in 2018. The median household income, meanwhile, rose by nearly 2.3 percent—with all figures adjusted for inflation.The comparison isn’t quite apples-to-apples, since the bureau implemented a new methodology in its latest report that somewhat influenced the results for both 2018 and 2017.Still, the data bears out a middle-class expansion unseen since the 1960s. Nearly 30 percent of households pulled in between $50,000 and $99,999 in 2018. That’s up from less than 29 percent the year before—the fastest increase since 1968.
Day Care Directors Are Playing Doctor, and Parents Suffer -Almost anyone with a child in day care or preschool has received the call. They say your child has a minor ailment like pink eye and must go to the doctor. Otherwise, they say, the child won’t be able to return to school or day care. Sometimes, they even say your child can’t come back until they’re on antibiotics.The best evidence, however, says there should be less treatment for pink eye and other minor illnesses, not more. Day care centers usually ignore this evidence — and parents often pay the price.This pattern is extremely hard to reverse. There is an understandable urge to be protective when it comes to children (and also an incentive to protect yourself from future criticism should your decision not to act go poorly).Being overprotective has costs, though. Visits to the doctor aren’t free, nor are drugs. Parents have to skip work to take their children to the doctor. They already pay a lot for day care, and this is a forced expense that often lacks value.About 30 percent to 40 percent of working mothers pay for child care outside the home. In a recent Upshot article, Claire Cain Miller pointed out that child care can cost a typical family a third of its income. And the current administration keeps adding work requirements to many safety net programs.Moreover, a visit to the physician is not harm-free. Children are exposed to other potentially ill children in a waiting room. Day care centers seem concerned that children could spread disease to other children in their facilities, but not nearly as concerned that they could spread illnesses to other children in a clinic.Day care centers sometimes act as medical experts. In 2010, researchers examined the medical policies of day care centers in Pennsylvania. Almost all (97 percent) of them had written policies for when ill children should stay home. In almost all cases, those making decisions about who was too ill to attend were directors or teachers — neither of whom had medical training.More than 90 percent had policies requiring antibiotics for pink eye with a white or yellow discharge. More than half had policies requiring antibiotics for diarrhea. Neither requirement makes sense.
Emphasizing social play in kindergarten improves academics, reduces teacher burnout - Emphasizing more play, hands-on learning, and students helping one another in kindergarten improves academic outcomes, self-control and attention regulation, finds new UBC research.The study, published today in the journalPLoS One, found this approach to kindergarten curriculum also enhanced children's joy in learning and teachers' enjoyment of teaching, and reduced bullying, peer ostracism, and teacher burnout. "Before children have the ability to sit for long periods absorbing information the way it is traditionally presented in school through lectures, they need to be allowed to be active and encouraged to learn by doing," said Dr. Adele Diamond, the study's lead author, a professor in the UBC Department of Psychiatry and Canada Research Chair in Developmental Cognitive Neuroscience. "Indeed, people of all ages learn better by doing than by being told." "Executive functioning skills are necessary for learning, and are often more strongly associated with school readiness than intelligence quotient (IQ)," said Diamond. "This trial is the first to show benefits of a curriculum emphasizing social play to executive functioning in a real-world setting."
Elementary School Teachers Had Median Annual Wage Of $58,230 In 2018 - In May 2018, the median annual wage of the nation's 1.4 million elementary school teachers (not including special education teachers) was $58,230. The lowest-paid 10 percent of elementary school teachers earned less than $37,780, while the highest-paid earned more than $95,270. The middle 50 percent of elementary school teachers earned between $46,120 and $75,330 per year. The median wage for secondary school (high school) teachers, who numbered 1.1 million, was $60,320 in May 2018. The lowest-paid secondary school teachers had annual wages below $39,740 and the highest-paid earned more than $97,500. The middle 50 percent of secondary school teachers earned wages between $47,980 and $77,720 per year. (These estimates do not include special education or career/technical education teachers.) Among metropolitan areas, median annual earnings of elementary school teachers were lowest, near $39,000, in metropolitan areas in Arizona, Oklahoma, North Carolina, Idaho, and Florida. Elementary school teachers had the highest median annual wages, over $80,000, in metropolitan areas in California, Oregon, Massachusetts, and New York.These data are from the Occupational Employment Statistics program. See "Occupational Employment and Wages - May 2018" to learn more. The median wage, or the 50th percentile wage, is the midpoint of a wage distribution from lowest to highest; half of the employees in a given occupation earn less, and half earn more, than the median wage. Similarly, 25 percent of employees earn less, and the remaining 75 percent earn more, than the 25th percentile wage.
Grade-Rigging Scandal: Baltimore Students Missed 100+ Days Of School, Failed Classes, Still Graduated - For the last several years, we have been covering the grade-changing scandal in Baltimore City Public Schools (BCPS). Administrators, teachers, and parents continue to come forward about the widespread fraud that allows children to graduate, even though they've missed school or failed classes. Project Baltimore, who has spearheaded the investigation into BCPS fraud, has uncovered another school where students missed more than 100 days of class or failed ten courses in three years, still graduated during the 2019 school year. City Schools CEO Dr. Sonja Santelises accuses Project Baltimore of “sensationalism” and has “violated even the lowest standard of decency.” Fox45 requested an interview with Dr. Santelises concerning the allegations; we haven’t heard back. https://t.co/ARaC73uyxt— FOX Baltimore (@FOXBaltimore) September 17, 2019The school in focus is called Joseph C. Briscoe, and it's a special needs school with just 79 students. The budget for the school is $4.3 million, which means on any given school year, the city spends $54,524 per pupil. By comparison, the Baltimore Polytechnic Institute, a top BCPS high school, spends about $7,000 per student. "That should be the number one goal that they get the right education," a Briscoe teacher told Project Baltimore. Project Baltimore said the teacher who has come forward about the fraud doesn't want to be identified because she fears BCPS will retaliate.
Another School Leadership Disaster: Private Companies Work an Insider Game to Reap Lucrative Contracts --In July 2013, the education world was rocked when a breaking story by Chicago independent journalist Sarah Karp reported that district CEO Barbara Byrd-Bennett had pushed through a no-bid $20 million contract to provide professional development to administrators with a private, for-profit company called SUPES Academy, which she had worked for a year before the deal transpired. By 2015, federal investigators looked into the deal and found reason to charge Byrd-Bennett for accepting bribes and kickbacks from the company that ran SUPES and PROACT. A year-and-a-half later, the story made national headlines when Byrd-Bennett was convicted and sentenced to prison for those charges. But anyone who thought this story was an anomaly would be mistaken. Similar conflicts of interest among private superintendent search firms, their associated consulting companies, and their handpicked school leaders have plagued multiple school districts across the country. In an extensive examination, Our Schools has discovered an intricate web of businesses that reap lucrative school contracts funded by public tax dollars. These businesses are often able to place their handpicked candidates in school leadership positions who then help make the purchasing decision for the same businesses’ other products and services, which often include professional development, strategic planning, computer-based services, or data analytics. The deals are often brokered in secrecy or presented to local school boards in ways that make insider schemes appear legitimate. The results of these scandals are often disastrous. School policies and personnel are steered toward products that reward private companies rather than toward research-proven methods for supporting student learning and teacher performance. School governance becomes geared to the interests of well-connected individuals rather than the desires of teachers and voters. And when insider schemes become public, whole communities are thrown into chaos, sometimes for years, resulting in wasted education dollars and increased disillusionment with school systems and local governance. While media accounts generally frame these scandals as examples of corrupt school leaders who got caught and brought to justice, reporters rarely delve into the corporate-operated enterprises that undergird the whole system.
Chinese UCLA Mom Arrested In Spain; Charged With $400,000 Bribe In Admissions Scandal - A Chinese woman who allegedly paid $400,000 in bribes to ensure her son was admitted to UCLA as a fake soccer player was arrested in Spain on Monday night and charged with conspiracy to commit mail fraud and honest services mail fraud, according to the LA Times. Chinese national and British Columbia resident Xiaoning Sui was taken into custody by Spanish authorities Monday night, according to the US attorney's office in Massachusetts - which has sought Sui's extradition to Boston to face charges. To guarantee her son a spot at UCLA, prosecutors say Sui turned to William “Rick” Singer, the Newport Beach college admissions consultant who earlier this year admitted to overseeing a sprawling, decade-long scheme that defrauded some of the country’s most selective universities with rigged college entrance exams, fake recruiting profiles and six-figure bribes to college coaches and administrators. Sui, 48, paid Singer $400,000 to have her son admitted to UCLA as a recruited soccer player, despite that the boy had not played the sport competitively, according to an indictment returned by a grand jury in March. The indictment was sealed until Sui’s arrest. The Times reported Sui’s alleged deal with Singer last month. -LA Times Sui's alleged deal with Singer began in August 2018 during a conversation with a college tennis recruiter from Sarasota, Florida in which she wanted to know how much it would cost to guarantee her son's admission to various universities "through bribery." The recruiter - believed to be Scott Treibly - isn't named in the indictment and hasn't been charged in the case.
Michael Bloomberg Slams Campus SJWs And The "Radical Intolerance Of Disagreement" --Intolerance on college campuses by far-left groups dedicated to fighting "racism, bigotry, sexism, ableism, transphobia, homophobia, classism and anti-Semitism" has created problems for both faculty and students alike in recent years. Just look at what happened to one professor at Evergreen State College in Washington State when he respectfully disagreed with one of the diktats of the campus's social justice warriors.To support their agenda, these groups now gleefully engage in marginalizing everyone who disagrees no matter how picayune the issue or disagreement might be. Whether it's trying to shut down speaking events involving conservative thinkers like Ben Shapiro (whom these groups have labeled a 'bigot'), or trying to get faculty fired for not complying with their demands to modify a syllabus to remove 'objectionable' material, campus leftists have made one thing clear: Anyone who disagrees with them is both objectively wrong, and an enemy to their 'movement' - and thus should be silenced using whatever tactics necessary. Conservatives (the main target of college SJWs' ire) have been fighting back against these tendencies for a while. But now, in an editorial published on Bloomberg News's opinion vertical, Michael Bloomberg, the former New York City mayor and billionaire (let's not forget: According to SJW doctrine, billionaires are criminals, period), laments the fact that faculty at many colleges have given in to the reckless demands of their students when it comes to the issue of free speech.In his thinkpiece, Bloomberg specifically laments the fact that more schools haven't signed on to the University of Chicago's published statement "affirming the centrality of free speech."In 2015, the Committee on Freedom of Expression at the University of Chicago published a statement affirming the centrality of free speech. It said that “the University’s fundamental commitment is to the principle that debate or deliberation may not be suppressed because the ideas put forth are thought by some or even by most members of the University community to be offensive, unwise, immoral, or wrong-headed.” Not that long ago, this would have been seen as uncontroversial. Universities are about free inquiry or they are about nothing. More than four years later, only some 67 institutions - out of more than 4,000 across the U.S. - have adopted or endorsed the Chicago Statement. This lack of support has "allowed intolerance of disagreement to seep deeper into the culture" Bloomberg says. He also expresses concern about the fact that far-left groups now express open hostility toward free speech, with many accusing right-wing groups of "co-opting" the term as a "cover" for racism, xenophobia etc. Read Bloomberg's essay in full below:
San Diego State University Normalizes Pedophilia As A Sexual Orientation - San Diego State University is teaching students that pedophilia could merely be considered to be an alternative “sexual orientation.” “An actual topic we discussed in class today at a State University after watching an 8 minute Vice News video showcasing self identified pedophiles. This is going to be mainstreamed,” tweeted Alex Mazzara. The photo shows a presentation slide entitled ‘Pedophilia as a Sexual Orientation’.An actual topic we discussed in class today at a State University after watching an 8 minute Vice News video showcasing self identified pedophiles. This is going to be mainstreamed. pic.twitter.com/y4WJATXz08 — Alex (@alexjmazzara) September 13, 2019 It suggests that embracing pedophilia as an alternative sexual orientation could be part of the “acceptance of diverse sexual identities.”The VICE video showcasing pedophiles may well have been their platforming of Todd Nickerson, a self confessed pedophile. VICE’s article about Nickerson sympathetically portrayed him, an individual who openly admits wanting to molest children, as a victim of right-wing “vigilantes”.Conservatives have been warning for years that the ultimate endgame of every fetish, gender identity and sexuality being not merely tolerated but endorsed would eventually be the mainstreaming of pedophilia. We are now not far away from that very eventuality.
Tennessee wants to block grant Medicaid. Is that legal? - Earlier today, Tennessee released a draft proposal to introduce block grants into its Medicaid program. Setting aside the dubious policy merits of block grants, however, I don’t think the proposal is legal. I don’t even think it’s close. Under section 1903 of the Medicaid statute, the federal government must pay a fixed “match rate” (known in the statutory lingo as “the Federal medical assistance percentage”) to every state that participates in Medicaid. In Tennessee, the match rate is 65.21%. That means that, for every $1 that Tennessee spends on its Medicaid program, the federal government kicks in about $2. Tennessee wants to change that financing structure. Instead of matching dollars, Tennessee would like an up-front, lump-sum payment—a “federal block grant”—that’s calculated to cover the anticipated expenses of its Medicaid population. Because Tennessee would have a fixed sum of federal dollars to spend, the state would have an incentive to economize on Medicaid. Any savings, Tennessee says, would be split 50-50 with the federal government. As Tennessee recognizes, it’ll need a waiver from HHS to make these changes. And section 1115 of the Medicaid statute does allow HHS to waive lots of the law’s restrictions in connection with experimental projects that are likely to assist in promoting Medicaid’s objectives. Now, I’ve written before that I’m not at all sure that block granting Medicaid counts as an experiment that serves Medicaid’s purposes. But there’s a more fundamental problem with Tennessee’s proposal. You can’t use section 1115 to waive section 1903. To the contrary, section 1903 is pointedly omitted from the list of statutory provisions that HHS is empowered to waive. So you can’t use Medicaid waivers to change Medicaid’s financing structure. And that’s exactly what Tennessee is proposing to do.
Transgender lobby group Mermaids urges puberty‑blockers for 12‑year‑olds - Teachers have been told in a training session that some children as young as 12 who question their gender identity should be offered hormones to block puberty.In a meeting with 20 teachers and pastoral staff at Newman University in Birmingham last December, a trainer for the transgender lobby group Mermaids said giving puberty blockers to gender-dysphoric children gave them “immense relief” and was “completely reversible”.The trainer, recorded by an audience member, said: “Puberty blocker medication doesn’t make any changes, so [is] completely reversible. What it does is put a pause button on the pituitary gland and freezes puberty where it is. Not growth, just puberty. Take the blockers away and biological puberty will recommence.” She added that using blockers “does provide immense relieffrom the dysphoria” and argued that arrested development meant less need for physical intervention later “if they decide to go down that path”.This weekend the advice was attacked as “misleading and potentially dangerous” by an Oxford academic. The session is believed to be a blueprint for training by the group in schools nationally. Michael Biggs, associate professor in sociology at St Cross College, Oxford, says the guidance could push children towards medical intervention. He cites research which found that most children prescribed blockers at a young age progressed to taking cross-sex hormones and surgery, which damage fertility.
Women Are Having Plastic Surgery To Fix Resting Bitch Face - More and more women are flocking to plastic surgery to correct a devastating condition known as "resting bitch face", according the New York Post. "Resting bitch face" is a condition wherein you look - well, bitchy - due to your normal, everyday facial expression. It's also sometimes just referred to as simply "being from New York City". Hope Davis, one woman who got surgery for the condition after her friends uploaded "a batch of unflattering photos to Facebook and Instagram", said: “I was like, ‘Oh great, I look mad in the middle of the party’. I looked like a sourpuss.” Davis didn't comment on whether or not she actually was "mad in the middle of the party" - a road we hope she considered before having someone slice her face open. Perhaps she just wasn't having a good day at the time. But it's too late to look back now. She, like many other women, turned right to a plastic surgeon. Dr. David Shafer, a double board-certified plastic surgeon and medical director of Shafer Plastic Surgery & Laser Center in Midtown, said he's familiar with the request to deal with "RBF", as he called it, and said its a common request that he gets several times each week. Davis instructed Shafer that she didn't want a 'Joker' smile, but rather a "pleasant resting look". Doctors use techniques like injecting fillers into the face and Botox to achieve the look. The procedure takes about 10 to 20 minutes and can cost between $500 to $5,000. It generally lasts "up to two years". Shafer said that requests to fix "RBF" have more than doubled over the last year. He claims it is due to a shift in focus to the lower face, “popularized by the Kardashians” and the prevalence of selfies, which force people to look downward at their phone, accentuating their resting bitch faces.
Abrupt closures of two hospitals in West Virginia and Ohio leave region reeling - Two hospitals in Wheeling, West Virginia and Martins Ferry, Ohio are being closed, throwing 1,200 people out of work. Thousands of people across the region will be left without their medical care providers. The Ohio Valley Medical Center (OVMC) in Wheeling was abruptly shut down September 3, ending acute and emergency medical services at midnight. OVMC’s sister facility, East Ohio Regional Hospital (EORH) across the Ohio River in Martins Ferry, is slated to close October 7. OVMC had been in continuous operation since 1914—more than a century. Both hospitals were bought two years ago by California-based Alecto Healthcare Services. Alecto claimed the two facilities had created a $37 million loss for the firm over the two years. It announced August 7 that the hospitals were being shut down. Employees were informed after the fact, given only minimal information. According to the Wheeling Intelligencer, OVMC and EORH employees were called to a 5:30 p.m. meeting on August 7, from which the public and media were excluded. “Within 10 minutes,” the paper reported, employees “exited both rooms with long faces” and notices of the closures. “Some sobbed while others were seen embracing,” while others expressed anger and outrage. Workers told the paper that they had not been permitted to ask any questions in the meeting.
Two Entrepreneurs Explain Why the Health Insurance Industry Is a Direct Threat to Middle-Class Life - Among many recent troubling headlines was this one: “Families Go Deep in Debt to Stay in the Middle Class.” That story came on the heels of areport that consumer debt in the United States hit $14 trillion in the first quarter of the year, a level not seen since just before the financial crash of 2008.To understand how we got here, it’s important to note another finding we feel has been perhapsmostdamaging to America’s middle class: since 1990, health care costs have risen 276 percent as wages, when adjusting for inflation, have barely grown at all.“Health care is gobbling up your wages,” Axios recently reported, highlighting the fact that as of 2017, nearly one-third of income in the average American household is consumed by spending on health insurance. That’s more than double what insurance cost families in 1999.Our employer-based health insurance system has created a vicious cycle for working American families and the businesses that employ them. With the cost of prescription drugs and treatment at hospitals rising, insurance companies have not pushed back to lower costs. They have instead passed cost increases onto companies that provide health insurance to their workers. That has forced companies to freeze and even lower employee wages to continue providing health insurance.Workers, in turn, have not had their wages grow fast enough to keep up with higher costs for housing, transportation, education and yes, out-of-pocket health care costs. That has forced middle-class families to take out record amounts of high-interest credit card debt and unsecured personal loans to pay the bills.Think of it this way: The cost to attend college, buy a car, take out a mortgage and get needed medical care are all much higher today than 30 years ago. But because tens of millions of Americans receive health insurance through their employer, high health care costs have prevented millions of American families from seeing larger paychecks. That is not true for any other major expense. The money employers otherwise would have given their workers in raises is going instead to health insurance companies. That positions America’s health insurance companies as a unique threat to the financial well-being of the middle class. As CEOs, we see this exploitation of the American middle class and businesses up close.
OxyContin maker Purdue Pharma files for bankruptcy protection (Reuters) - OxyContin maker Purdue Pharma LP filed for bankruptcy protection Sunday night, succumbing to pressure from more than 2,600 lawsuits alleging the company helped fuel the deadly U.S. opioid epidemic.Purdue’s board met Sunday evening to approve the long-expected bankruptcy filing, which the company is pursuing to restructure under terms of a proposal to settle the widespread litigation.Purdue, which filed for Chapter 11 protection in a federal bankruptcy court in White Plains, New York, reached a tentative deal to resolve lawsuits with 24 states and five U.S. territories, as well as lead lawyers for more than 2,000 cities, counties and other plaintiffs, the company said.Two dozen states remain opposed or uncommitted to the proposed settlement, setting the stage for contentious legal battles over who bears responsibility for a public health crisis that has claimed the lives of nearly 400,000 people between 1999 and 2017, according to the latest U.S. data.Thousands of cities and counties, along with nearly every state, have sued Purdue and, in some cases, its controlling Sackler family. The lawsuits, seeking billions of dollars in damages, claim the company and family aggressively marketed prescription painkillers while misleading doctors and patients about their addiction and overdose risks.Purdue and the Sacklers have denied the allegations.Opposing states, including Massachusetts, New York and Connecticut, want the Sacklers to guarantee more of their own money will go toward a settlement, and have questioned Purdue’s calculations valuing the overall deal at more than $10 billion. The Sacklers, who would cede control of Purdue in the proposed settlement, have offered $3 billion in cash and an additional $1.5 billion or more through the eventual sale of another company they own, called Mundipharma, according to the company and people familiar with the terms. The Sacklers have declined to revise their offer.
The makers of OxyContin may have tried to hide $1 billion in assets - As lawsuits mount against the company responsible for making OxyContin — a drug blamed for helping to spark the nation’s opioid crisis — New York Attorney General Letitia James said on Friday that the family behind the company may have attempted to hide at least $1 billion in assets.The allegation could lead to the reexamination of a proposed settlement between drug maker Purdue Pharma and plaintiffs who brought more that 2,000 lawsuits against it. And some legal experts believe it could ultimately lead to members of the Sackler family, which owns Purdue, facing criminal charges.James’s office is pursuing a lawsuit against both Purdue and individual Sacklers, and as part of that suit, issued 33 subpoenas to financial institutions in order to better understand the family’s wealth and influence. The return of one of those subpoenas led to the discovery of the previously undisclosed $1 billion in wire transfers.The settlement was based on the assumption that the Sacklers collectively possess about $13 billion in wealth, but James argues the transfer could mean the family has far more wealth than previously thought, which would presumably give those pursuing the settlement license to seek more than the $3 billion that has been tentatively agreed to.“While the Sacklers continue to lowball victims and skirt a responsible settlement, we refuse to allow the family to misuse the courts in an effort to shield their financial misconduct,” James said in a statement. Purdue faces lawsuits by more than 50 states and territories, and 2,300 cities and counties. Those jurisdictions argue the Sacklers and their company must help to pay for an opioid addiction crisis they profited from and helped to create, and that necessary treatment and recovery programs will cost many billions of dollars. While many local leaders were initially onboard with the tentative settlement, James’s allegations could lead them to reconsider, and to return to the negotiating table in hopes of getting more Sackler money for these programs.
Purdue Files for Bankruptcy, Agrees to Settle Some Pending Opioids Litigation: Sacklers on Hook for Billions? - Purdue Pharma, the manufacturer of OxyContin owned by members of the Sackler family and catalyst for the opioids crisis, filed for chapter 11 bankruptcy reorganization Sunday night.The filing was part of a settlement agreed among 24 states – including Ohio, Tennessee, and Texas, 5 US territories, and numerous municipalities. If approved by the bankruptcy court and company creditors, the settlement would provide 10 to 12 billion dollars to reimburse states and local governments to address the opioids crisis, including 3 billion dollars from members the Sackler family, to be paid out over seven years. Purdue will be restructured as a public benefits trust, and will continue to sell OxyContin, the profits from which would be used to pay for addiction treatment and other responses to the opioids crisis. Members of the Sackler family would surrender their ownership stakes in Purdue. Usually, bankruptcy courts grant an automatic stay of pending litigation as part of bankruptcy process. By filing for bankruptcy, the company is banking on all outstanding legal claims being moved to bankruptcy court. But 24 other state attorney’s-general – including California, Massachusetts, New York, North Carolina, and Pennsylvania – as well as the District of Columbia, oppose both the settlement, and the efforts of Purdue’s lawyers to wield the bankruptcy shield to protect the personal assets of the Sacklers – none of whom has sought to declare personal bankruptcy. As the Wall Street Journal reports in Purdue Pharma Looks to Extend Bankruptcy Shield to Sacklers:Hours after seeking bankruptcy protection for the company Sunday night, Purdue’s lawyers said they would ask a judge to issue an injunction that would halt legal hostilities from attorneys general who won’t sign on to a settlement the drugmaker has offered. The company’s owners, members of the wealthy Sackler family, are entitled to a shield from litigation, Purdue said it would argue. State AGs who oppose the settlement object to its omission of any admission of wrongdoing by the Sacklers, and argue the family has not committed sufficient funds to the settlement. According to the WSJ: Massachusetts Attorney General Maura Healey, who has pursued the Sacklers in state court, said she would oppose the settlement and any attempt to stop her claims from going forward. The current settlement doesn’t go far enough to hold the Sacklers personally accountable, she said.
Who's to blame for the nation's opioid crisis? Massive trial may answer that question - For the families of the roughly 400,000 Americans who have died of opioid drug overdoses since 1999, a legal drama scheduled to unfold in an Ohio courtroom next month may feel like a true shot at justice. After downplaying the risks of dangerous and highly addictive prescription narcotics, and of profiting from their spiraling misuse, the purveyors of prescription painkillers could be forced to reckon with the consequences of their actions.The civil trial promises to expose evidence suggesting that dozens of companies made deceptive claims about opioids, flooded the market with their products, engaged in shady record-keeping and lucrative self-dealing, and looked the other way as the body count mounted. For their role in seeding and supplying an epidemic of addiction, a jury could hold the companies liable for billions of dollars in damages. Equally important, a trial in the case known as Multidistrict Litigation 2804 would explore some of the thorniest questions in America today: Who bears responsibility for addiction? Can businesses be blamed if government agencies fail to enforce the law? And when profits drive the companies that deliver American healthcare, where does that leave patients?Questions like these “require a broad conversation,” said Thomas Cooke, a professor of business law at Georgetown University. But the companies in the Ohio case “would rather this go away. They’d rather not have that conversation.”Nor does U.S. District Judge Dan Aaron Polster, who presides over MDL 2804, think a Cleveland courtroom is the place to resolve such conundrums. Polster has leaned hard on all sides to settle the case and avert a trial. Purdue Pharma and the Sackler family that controls it could pave the way. The MDL suits accuse them of engaging in a deceptive campaign to market OxyContin, and on Sunday they announced a deal to have the Sacklers pay $3 billion and steer all of Purdue’s future profits to states, counties, cities and federal territories that sign on to the settlement. Purdue says the payout could be worth more than $10 billion over time. Neither the Sacklers nor Purdue would acknowledge any wrongdoing.Whether deals like this deliver justice will be in the eye of the beholder. But they could bring swift resolution to a case that otherwise threatens to grind on for years. With opioids claiming 130 lives a day in the United States, those who favor a settlement argue that time and money are better spent fighting the epidemic than debating who’s to blame for it.
“Great Drug Companies Out There” - About the time I finished up my post on Biden, I get this article from Dan discussing how Biden is kissing the butts of drug companies to more-than-likely get campaign donations. Everyone else has been concentrating on individual (you know people of lesser means) donations and many candidates have refused to take corporate donations. Biden is not ashamed to take money from corporations. Gee, whata surprise!Candidate Joe Biden: “By the way, great drug companies out there — except a couple of opioid outfits,” the former vice president told donors at the Dallas home of David Genecov, a craniofacial surgeon.Biden’s comment came during a discussion of medical research and the cancer “moonshot” initiative he launched during the Obama administration following the death of his son, Beau Biden, in 2015. That effort included his push for companies to collaborate more on research. While praising the research of pharmaceutical companies, Biden also complained, complained about the high drug prices being experienced by people. Such issues had not stopped him before in supporting Republican candidates for Congress in the last election.In 2018, Joe Biden came to Michigan’s 6th Congressional District to give a speech to the Economic Club of Southwestern Michigan and pivoted to the topic of Republican Fred Upton at the expense of the Democrat candidate Matt Longjohn. Matt came the closest to beating Upton and Biden gave Fred the boost he needed. Upton had won the district by 20% in previous elections and won it this time by less than 5%. Biden was paid $200,000 to give a speech to a Republican business crowd supported by Fred Upton in Benton Harbor, Michigan during which he praised GOP Congressman Fred Upton even as Democrats were close to winning Upton’s seat in the gerrymandered Michigan 6th District during the midterms.
Blast sparks fire at Russian laboratory housing smallpox virus - A gas explosion has sparked a fire at a Russian laboratory complex stockpiling viruses ranging from smallpox to Ebola, authorities have said. The State Research Centre of Virology and Biotechnology denied that the fire had exposed the public to the pathogens stored inside, some of the deadliest on Earth.The blast took place during repairs to a fifth-floor sanitary inspection room at the facility – known as Vector – in Koltsovo, in the Novosibirsk region of Siberia,the centre said on Monday. The site housed secret biological weapons research during the Soviet era and is now one of Russia’s main disease research centres.One worker suffered third-degree burns after the blast, which blew out the glass in the building. The fire reportedly spread through the building’s ventilation system. A fire covering 30 square metres was later extinguished. Russian authorities insisted that the room where the explosion occurred was not holding any biohazardous substances and that no structural damage was caused. The mayor of Koltsovo said that the laboratory did not contain any disease samples because of ongoing repair work. The smallpox virus survives in two places on Earth: at Vector and at another high-security laboratory at the US Centers for Disease Control and Prevention in Atlanta.
Explosion Hits Russia's Largest Virus Lab Which Houses Plague, Smallpox, Ebola And Other Deadly Viruses - A sudden explosion at a Siberian virus research center on Monday reportedly left the facility engulfed in flames, according to several Russian news outlets. Firefighters and other emergency personnel were dispatched to the "Vector Institute" located several miles from Novosibirsk - an emergency which was upgraded "from an ordinary emergency to a major incident," according to RT, due to the research center for virology and biotechnology housed in the facility - however the mayor of Koltsovo said there were no biologically dangerous substances in the area where the explosion occurred, and that the Vector laboratory was not in use at the time. The State Research Center of Virology and Biotechnology Vector, also known as the Vector Institute, and which is located deep inside Siberia for a reason... ... is a biological research center in Koltsovo, Novosibirsk Oblast, Russia. It is analogous to both the Centers for Disease Control and Prevention and the US Army Chemical and Biological Defense Command. It has research facilities and capabilities for all levels of Biological Hazard, CDC Levels 1-4. Of note, Vector is reportedly one of two places worldwide where smallpox is stored. The laboratory is known for having developed vaccines for Ebola and hepatitis, as well as for studying epidemics and genera issues surrounding immunology. During the Cold War, it was thought to be part of now-defunct Soviet biological weapons program, meaning that some of the most dangerous strains – including that of smallpox, Ebola, anthrax and certain plagues – are still being kept inside the Institute’s building. With that in mind, a local branch of the Emergencies Ministry swiftly responded to the call, sending in 13 fire engines and 38 firefighters, who entered the six-story building minutes after arrival. –RT According to Ukrinform.ua, a gas cylinder exploded on the fifth floor of the six-story building while construction crews were working at the time, after which a fire broke out in an area approximately 100 square feet. One worker suffered second and third degree burns and was taken to a local hospital.
Governments Not Prepared For Pandemic That Could Kill 80 Million People, Warns WHO - Governments are not prepared for a devastating pandemic that could kill up to 80 million people, a new report warns. The report was published by the Global Preparedness Monitoring Board, a joint entity formed by the World Bank and the World Health Organization. “There is a very real threat of a rapidly moving, highly lethal pandemic of a respiratory pathogen killing 50 to 80 million people and wiping out nearly 5% of the world’s economy,” warns the paper, adding that “the world is not prepared” for this.“A global pandemic on that scale would be catastrophic, creating widespread havoc, instability and insecurity,” the organization warns. The GPMB says governments need to invest more in emergency preparedness and that misinformation on social media is also exacerbating the spread of diseases.
Plastic Apocalypse- Alarming Levels Of Plastic Found In Children -New studies are being published that detail high levels of dangerous microplastics had been detected in some of the most remote regions of the world. Another study warned microplastics are turning up in human stool. Now there are new reports that show high levels of microplastics have been found in blood and urine samples of children. The study, conducted by the German Environment Ministry and the Robert Koch Institute, found an alarming 97% of blood and urine samples from 2,500 children tested between 2014 and 2017 had traces of microplastics. Der Spiegel, the German weekly magazine, published the findings over the weekend, which were part of a national study focused on "human biomonitoring" of 3 to 17-year-olds, found traces of 11 out of 15 plastic ingredients in the collected samples. "Our study clearly shows that plastic ingredients, which are rising in production, are also showing up more and more in the body. It is really worrying that the youngest children are most affected as the most sensitive group," Marike Kolossa-Gehring, one of the study's authors, told the magazine. Researchers found perfluorooctanoic acid (PFOA), also used in cleaning products, waterproof clothing, food packaging, and cooking utensils, was present in the blood and urine samples. mHalf the plastics ever produced have been made in the last 15 years, & the substance is taking over Earth: Researchers just discovered microplastic in the remote Arctic: https://t.co/PNSVoeLuTA That's bad, but it's just the tip of the iceberg. pic.twitter.com/EaKeFnWHiD PFOA has been described as a dangerous chemical that is toxic to the liver. The EU will outlaw the substance next year.
Complexity of plastics make it impossible to know which are dangerous -A lot of people worry about microplastics and plastic pollution, but not as many of us are aware of the large number of chemicals we encounter in plastic products that we use every day.Researchers know of more than 4,000 chemicals that are currently used in plastic food packaging. But with more than 5,000 different types of plastic on the market, the number of chemicals used to make plastics is likely even larger."The problem is that plastics are made of a complex chemical cocktail, so we often don't know exactly what substances are in the products we use. For most of the thousands of chemicals, we have no way to tell whether they are safe or not," says Martin Wagner, a biologist at the Norwegian University of Science and Technology (NTNU). "This is because, practically speaking, it's impossible to trace all of these compounds. And manufacturers may or may not know the ingredients of their products, but even if they know, they are not required to disclose this information." "We studied eight types of plastics commonly used to make everyday products, such as yogurt cups and bath sponges, and examined their toxicity and chemical composition. Three out of four products contained toxic chemicals," Lisa Zimmermann, Wagner's colleague and first author of the study, says.The researchers used cell cultures to investigate the effects of the mix of chemicals in each product. They found that many plastics contain chemicals that induced general toxicity (six out of ten products), oxidative stress (four out of ten) and endocrine-disrupting effects (three out of ten).It is impossible to pinpoint specifically which chemicals were the culprits: the research group discovered more than 1,400 substances in plastics but identified only 260 of them. That means that most of the plastic chemicals remain unknown and cannot be assessed for their safety. Given that, the authors were able to conclude that plastic chemicals in polyvinyl chloride (PVC) and polyurethane (PUR) were the most toxic. Compared to PVC and PUR, polyethylene terephthalate (PET) and high-density polyethylene (HDPE) were less toxic.
Air Pollution Reaches the Placenta During Pregnancy, New Study Finds - Air pollution particles that a pregnant woman inhales have the potential to travel through the lungs and breach the fetal side of the placenta, indicating that unborn babies are exposed to black carbon from motor vehicles and fuel burning, according to a study published in the journal Nature Communications. The research from scientists at Hasselt University in Belgium found soot-like black carbon on placentas donated by mothers, according to The Hill. It is the first study to show that the placental barrier, which is supposed to create a sterile environment for the fetus, can actually be penetrated by inhaled pollution particles.Researchers have seen a link between polluted air and an increase in miscarriages, premature births and low birth weights. In fact, researchers found that after New Jersey and Pennsylvania replaced turnpike tollbooths with EZ Pass plazas, the rate of premature births and low birth weights dropped significantly within one mile of the plazas, leading to over $440 million in healthcare savings, according to a MacArthur Foundation study thatNOVA reported on.While the link between air pollution and adverse birth outcomes has been apparent, proving it was difficult since there was no way until now to show that pollutants breach the placenta. While the study, which used the placentas donated within 10 minutes of either a pre- or full-term birth, did not actually show that the babies absorb the black carbon, it is profound evidence that there is direct exposure to pollution, as NOVA reported."This is the smoking gun," said Janet Curie, a health economist at Princeton University who was not involved in the study, to NOVA. The study found that the more black carbon a woman was exposed to, the more black carbon was detected on the placenta. Mothers who lived near a busy road had twice as much black carbon on the placenta than mothers who lived away from main roads, an average of 20,000 nanoparticles per cubic millimeter compared to 10,000, according to The Guardian.
Most Airlines Have Unhealthy Water, Study Finds - You might want to think twice before washing your hands in an airplane bathroom. A recent study from Hunter College's New York City Food Policy Center and the non-profit Diet Detective ranked the water quality of major national and regional airlines, and found that only four of them had "relatively safe, clean water." "We need to make sure violations have penalties and costs that make airlines want to comply. We should tighten up the rules and add more tests to determine aircraft water quality," The Food Policy Center executive director and Diet Detective founder Charles Platkin told HuffPost Wednesday. "It's not just an ick-factor ― there are public health concerns." Which airline’s water is the safest? Our recently released study with @nycfoodpolicy rates the quality of water provided to passengers and finds that many airlines are providing unhealthy water. #FoodSafety #WaterSafety #Airlines #WaterQuality https://t.co/TtKQxUGNfPpic.twitter.com/0opaq8SKOr — Charles Platkin (@dietdetective) August 29, 2019 The study ranked the airlines on a zero to five scale based on 10 factors, among them fleet size, federal violations, positive reports of E. coli and coliform in water samples and responsiveness to questions. A score of three or higher meant the drinking water was relatively safe.Here is how the airlines fared. (see tables) While airlines only serve bottled drinking water directly to customers, they do use the plane's water for coffee and tea. Passengers also use it in the airplane restrooms. The study authors recommended that passengers never drink airplane bathroom water, avoid airplane coffee and tea and use hand sanitizer instead of the airplane bathroom sinks. "I also don't wash my hands in the lavatory anymore," Platkin told HuffPost. "I make sure to have sanitizer. If you wash your hands in what could potentially be unsafe water, it sort of negates the whole process of actually washing your hands. You could be spreading E. coli all over... Sure, it's not likely, but why should you take any chance?"
Yale Study: Wild Mosquitoes Retained Genes of Genetically Modified Mosquitoes — In Brazil a genetic engineering test of mosquitoes appears to have failed, with genes from the mutant mosquitoes now mixing with the native population, Nature reported. This comes as mad scientists in the U.S. are finding they are getting bitten back by messing with nature after running their own program to genetically modify mosquitoes.The experiment involved a company called Oxitec which took male Aedes aegypti mosquitoes and genetically engineered them to have a dominant lethal gene. The idea was first proposed in 2016, according to an article by Science Magazine that discussed the plans to release the GM insects.According to the hypothesis when the genetically modified mosquitoes mated with wild female mosquitoes, the gene was supposed to drastically cut down the number of offspring they produced. Further, the few that were born should have been too weak to survive a long period of time. A team of Yale students then studied the genomes of both the GM strain and the wild species before the release, then again six, 12 and 27 to 30 months after the release began. Around 450,000 modified males were released in Jacobina, Brazil every week for 27 months straight, totaling tens of millions, according to the Yale study. Sure enough, by the end of the test there was clear evidence that genes from the transgenic insects had been incorporated into the wild population. Although the GM mosquitoes only produce offspring about three to four percent of the time, it seems that those that are born aren’t as weak as expected. Some appear to make it to adulthood and breed themselves. In theory, if the experiment worked it would have cut down the population of mosquitoes in an area estimated up to as much as 85 percent. However, that’s not what the final results were according to Yale University. Yale explains that some of the native bugs, they found, had surprisingly retained genes from the engineered mosquitoes; and even worse, the experiments made them more resilient.According to New Atlas there are now three different strains of mosquitoes mixed together in Jacobina and other places of Brazil. The bugs in the area are now made up of three strains mixed together: the original Brazilian locals, plus strains from Cuba and Mexico – the two strains crossed to make the GM insects. This wider gene pool could make the mozzies more robust as a whole.
Brazil Experiment May Have Accidentally Created Genetically-Modified Super Mosquitoes --An experiment to deliberately release genetically modified mosquitos into Brazil appears to have failed miserably - and may have even resulted in 'super-mosquitos' according to a Yale research study published earlier this month. During a 27-month experiment aimed at curbing the spread of Yellow Fever, Dengue, Zika and other mosquito-borne diseases, approximately 450,000 male "OX513A" mosquitos modified by UK biotech company Oxitec were released into the wild in 2013. Females who mate with the designer mosquitos produce non-viable offspring, while Oxitec said that the man-made modifications wouldn't make it into the local insect population. Wrong... While the experiment initially proved a success - dramatically reducing mosquito populations in the Brazilian city of Jacobina by up to 85%, the mosquitos adapted. "The claim was that genes from the release strain would not get into the general population because offspring would die," said professor of ecology and evolutionary biology, Jeffrey Powell. "That obviously was not what happened."What's more, the OX513A genes were passed on to offspring that was able to reproduce anyway. Around the 18-month mark, the number of mosquitos returned to pre-release levels, while females opted to avoid mating with the weaker, genetically-modified mosquitos at the same time in a phenomenon known as "mating discrimination" according to Powell. According to the paper, some of the mosquitos likely have "hybrid vigor," resulting in "a more robust population than the pre-release population" which may be more resistant to insecticides. Oxitec told Gizmodo that the Yale study "was found to contain numerous false, speculative and unsubstantiated claims and statements about Oxitec’s mosquito technology," and provided a three-page document outlining the company's issues with the research. In particular, Oxitec notes that the paper fails to identify any "negative, deleterious or unanticipated effect to people or the environment from the release of OX513A mosquitoes."
Genetically engineered honeybees: Not the dumbest idea ever, but close to it - In the wake of widespread declines in bee populations, farmers and beekeepers are wondering who exactly is going to pollinate that third of the world's food crops which require pollination. The declines have been attributed to pesticides, parasites and climate change. In Europe one response has been to phase out a class of pesticides called neonicotinoids. The phase-out has coincided with a revival of bee populations. But pesticides are clearly not the only factor affecting bee health. Another response has been to consider building a better bee. Enter the geneticists. Why not genetically engineer honeybees to resist those things which are undermining their health? That seems a little like suggesting that we take carbon out of the atmosphere to address climate change without doing anything about the carbon we are putting into the atmosphere. Moreover, the original idea behind the genetic engineering of bees is the same as that behind plants and even humans: One gene equals one trait. It turns out there are three problems with this idea. First, genes are multitaskers in honey bees (and in humans, too). That means genes can make more than one kind of protein which means that the idea that one gene always equals one trait has long since been disproved. Second, gene expression depends on a number epigenetic factors, that is, factors that occur during the development of the organism. Third, the term "trait" has the problem that all words have. It's ambiguous. The world of the bee, or any living creature for that matter, is seamless. There are no gaps in the bee that divide it into "traits." "Traits" are a human invention. Beyond this, there are no gaps between the bee and its environment. The bee and its environment are not separable. No geneticist can possibly model the bee and its environment under all possible circumstances in all possible places—nor discover in advance the effects that engineering one "trait" will have on all the others. The intended effects (and unintended effects) of genetic engineering cannot be forecast with any accuracy for the bee and the entirety of its environment (which, of course, in our environment, too). As Garrett Hardin, the author of the first law of ecology, reminds us, "we can never merely do one thing."
Neonics May Be Killing Birds in Addition to Bees, Groundbreaking Study Finds -- In addition to devastating effects on bee populations and the pollination needed to feed humans and other species, widely-used pesticides chemically related to nicotine may be deadly to birds and linked to some species' declines, according to a new study. Researchers at the University of Saskatchewan studied the pesticide imidacloprid, in the nicotine-linked class of chemicals called neonicotinoids, or neonics, and found that the pesticide had effects on migrating birds' health and ability to reproduce. The scientists gave small amounts of the pesticide to white-crowned sparrows and found that the limited consumption caused the birds to lose weight and delay their migration.Within hours of being given the neonics, the birds stopped eating and lost an average of six percent of their body weight and about 17 percent of their fat stores, making it impossible for them to complete their long flights south. The birds took at least an extra 3.5 days to recover and migrate."It's just a few days, but we know that just a few days can have significant consequences for survival and reproduction," Margaret Eng, an ecotoxicologist who led the study told Science magazine, where the research was published Friday.The disruption of the species' normal migration led to decreased ability to reproduce and survive, the researchers found.The study "causatively links a pesticide to something that is really, tangibly negative to birds that is causing their population declines," study author Christy Morrissey told the Associated Press. "It's clear evidence these chemicals can affect populations." More than 70 percent of North American farmland bird species are currently experiencing population declines.
Huge decline in songbirds linked to common insecticide - The world's most widely used insecticide has been linked to the dramatic decline in songbirds in North America. A first ever study of birds in the wild found that a migrating songbird that ate the equivalent of one or two seeds treated with a neonicotinoid insecticide suffered immediate weight loss, forcing it to delay its journey.Although the birds recovered, the delay could severely harm their chances of surviving and reproducing, say the Canadian researchers whose study is published today in Science.“We show a clear link between neonicotinoid exposure at real-world levels and an impact on birds,” says lead author Margaret Eng, a post-doctoral fellow at the University of Saskatchewan Toxicology Center. Neonicotinoids, introduced in the late 1980s, were supposed to be a safer alternative to previous insecticides. But study after study has found that they play a key role in insect decline, especially bees. The EU banned the use of the chemicals in 2018 because they were killing pollinators. This study is another link in the chain of environmental problems, one showing that the use of neonicotinoids is harming birds, and that bird populations are at risk as a result, Eng said in an interview.
Global warming makes it harder for birds to mate, study finds - New research led by the University of East Anglia (UEA) and University of Porto (CIBIO-InBIO) shows how global warming could reduce the mating activity and success of grassland birds. The study examined the threatened grassland bird Tetrax tetrax, or little bustard, classified as a 'Vulnerable' species in Europe, in order to test how rising temperatures could affect future behaviour.The males spend most of their time in April and May trying to attract females in a breeding gathering known as a 'lek'. In leks, to get noticed, males stand upright, puff up their necks, and making a call that sounds like a 'snort'. They also use this display to defend their territory from competing breeding males.The international team of researchers - from the UK, Kenya, Portugal, Spain and Brazil - found that high temperatures reduced this snort-call display behaviour. If temperatures become too hot, birds may have to choose between mating and sheltering or resting to save their energy and protect themselves from the heat. Published in the journal PLOS ONE, the findings show that during the mating season little bustard display behaviour is significantly related to temperature, the time of the day - something referred to as circadian rhythms - and what stage of the mating season it is. The average temperature during the day also affects how much birds display and again as temperatures increase, display rates reduce.
Three billion birds have been lost in North America since 1970 - You might not notice it while hiking through the woods or strolling through a city park, but according to a new study, bird populations across North America are in a state of quiet freefall. In fact, compared with bird counts from 1970, scientists now estimate that the United States and Canada, which are home to 760 bird species, have lost around three billion birds. The study, published today in the journal Science, analyzed a combination of long-term population surveys as well as weather radar data to tease out the trend. Overall, the researchers discovered that birds found in grasslands—including well-known families such as sparrows, warblers, blackbirds, and finches—have been hit hardest, with their populations cut 53 percent over the last 48 years. (Read why birds matter in National Geographic magazine.) With nearly three-quarters of all grassland species experiencing decline, it seems these biomes, which include farmers’ fields, are especially vulnerable to habitat loss and exposure to toxic pesticides. But plummeting bird numbers may also be linked to huge drops in insect populations—an important avian prey, the researchers say.“We should take it as staggering, devastating news,” says study senior authorPeter Marra, director of the Georgetown Environment Initiative at Georgetown University. That’s because birds are crucial to the healthy functioning of ecosystems. Not only do our feathered friends help keep crop pests and other insects in check, but they also play critical roles in distributing seeds, disposing of rotting carcasses, and even pollinating plants. Though North American birds are vastly diverse, there are some common drivers behind their demise. “You only need to fly across the country to see that we’ve drastically changed the face of the earth,” says Marra. “There’s a lot of habitat that’s just gone.” The widespread use of pesticides has not only harmed insect populations, but the birds themselves: A recent study found that when birds eat seeds treated with certain neonicotinoid pesticides, they immediately lose weight, which in turn hinders their ability to migrate. Other causes include collisions with glass windows, which may kill some 600 million birds each year, and house cats, which are estimated to hunt down between one and four billion birds each year.
New Trump Admin Hog Slaughtering Rule ‘Will Result in the Fox Guarding the Henhouse’ -- Trump's U.S. Department of Agriculture (USDA) finalized a new hog slaughtering rule Tuesday that environmental and food safety advocates warn could harm animals, plant workers and public health, Reuters reported. The new rule will end limits on how fast slaughterhouses can kill pigs. It will also shift responsibility for removing defective meat during the slaughtering process from government inspectors to plant workers. The USDA will still inspect live pigs and the final pork products."The implementation of the rule will result in the fox guarding the henhouse," Food & Water Watch Executive Director Wenonah Hauter told Reuters.The USDA claims the new rule, the first update to the slaughtering inspection process in more than 50 years, is an attempt to modernize inspections. "This regulatory change allows us to ensure food safety while eliminating outdated rules and allowing for companies to innovate," Secretary of Agriculture Sonny Perdue said in a press release. "The final rule is the culmination of a science-based and data-driven rule making process which builds on the food safety improvements made in 1997, when USDA introduced a system of preventive controls for industry."
A Marine Heat Wave Intensifies, with Risks for Wildlife, Hurricanes and California Wildfires --An intensifying marine heat wave in the northeastern Pacific Ocean has triggered government warnings about harm to salmon and other fisheries along the U.S. West Coast, and it's raising concerns about hurricane risks to the Hawaiian islands and wildfire risks in California. The last time the region saw such a widespread and intense "warm blob," in 2014-2015, the unusually warm ocean water boosted the growth oftoxin-producing algae and suppressed the growth of small organisms at the base of the ocean food chain. The impacts rippled through ocean ecosystems, with mass die-offs of marine mammals and birds, the closure of crab and clam fisheries and warnings for sardine and anchovy fisheries because of poisoning concerns. Young salmon had less to eat as they entered the ocean, and thousands of sea lions and seal pups ended up stranded on California beaches. The halt to crab fishing cost the industry an estimated $100 million. "We're seeing more intensity in the marine heat waves, higher high temperatures, and that would be more of a function of climate change," said Andy Leising, a research scientist at NOAA Fisheries' Southwest Fisheries Science Center in La Jolla, California. He said the baseline ocean temperatures are warming so fast that scientists are scrambling to keep up with measuring and classifying the events. The current marine heat wave covers a horseshoe-shaped area about the size of Alaska. It extends from the Gulf of Alaska down the coast of Western North America and westward to Hawaii. In the warmest areas, sea surface temperatures have reached about 5.4 degrees Fahrenheit above average.Around Hawaii, the overheated ocean has also contributed to a string of high temperature records on land, including the warmest summer on record for Hawaii."Hawaii is literally sitting in the middle of the southern limb of this marine heat wave," said University of Washington marine heat wave researcherHillary Scannell. "If these ocean temperatures persist into the fall longer than the atmospheric forcing, I worry that these conditions could intensify any possible tropical storms that might develop in this region." If the marine heat wave continues to expand toward the U.S. West Coast, it could also raise the wildfire danger in California this autumn at the peak of the state's wildfire season. The last northeastern Pacific warm blob contributed to both drought and wildfire conditions in California, said Daniel Swain, a climate scientist at the National Center for Atmospheric Research.
Houston hit with 'worst flooding they've seen since Harvey' - Floodwaters grounded flights at Houston’s largest airport and shut down major roads throughout southeastern Texas Thursday — the heaviest rainfall since Hurricane Harvey slammed the city in 2017. The remnants of Tropical Rainstorm Imelda, which made landfall about 65 miles southeast of the city Tuesday, has dropped 40 inches of rain in the greater Houston area — including more than 25 inches over a 12-hour period.That could end up at 55 inches in some suburbs and up to a foot in the central city before the storms dissipate, AccuWeather reported.“Houston could be looking at 6 to 12 inches of rain,” said Dan Kottlowski, a senior meteorologist and lead hurricane expert for AccuWeather. “This is about a third of that amount (from Harvey) right now, but this is the worst flooding they’ve seen since Harvey.” Harvey hit the region with 130 mph winds, killing as many as 80 and causing more than $125 billion in damages — dropping as much as 51 inches of rain in downtown Houston.Jeff Evans, the meteorologist in charge at the National Weather Service in Houston, said the suburbs could see more accumulation than when Harvey came through. But the center city, buried in three feet of water by Harvey, shouldn’t see those levels nor the same deadly winds. But it doesn’t take much, he said. “It’s hard to compare storms,” Evans said. “Some totals are a little bigger, but Houston is such a gigantic blueprint…. Typically for Houston, when you get to 2 or 3 inches, you really start overwhelming the capacity of the storm drain system.” He said the flooding from Imelda hit hardest east and southeast of the city, but flooding has caused problems — George Bush Intercontinental Airport was forced to ground departing flights on Thursday.In Jefferson County, the sheriff’s office reported on Facebook that the Green Pond Gulley Levy, which holds up to 5,600 acres of water, was “deteriorating and could break at any moment.”The Beaumont Police Department urged residents to seek high ground as rising floodwaters began to inundate homes and shut down major roadways, including sections of Interstate 10 and Highway 69. “The situation here is turning worse by the minute,” Michael Stephens, a resident of nearby Vidor, told CNN. “People have snakes in their apartments from the creek.”
'Worse than Harvey': Small Houston-area town floods in Imelda aftermath - Hundreds of people have been rescued from their homes in Chambers County as floodwaters from the aftermath of Tropical Storm Imelda — which officials fear may be "worse than Harvey" — continued on Thursday to inundate the region, where authorities were also forced to evacuate a hospital. Ryan Holzaepfel, Chambers County's fire marshal, said that by 2 p.m., authorities had rescued about 300 people since the start of Tuesday’s storm. The brunt of them, about 250, were rescued on Thursday, he said. Authorities have also brought six horses and 25 pets, dogs and cats, to safety.Authorities from the U.S. Coast Guard and city of Baytown, as well as volunteers with boats, are pitching in with rescues, he said. The deluge of rain started Tuesday night as the storm made landfall and has continued through Thursday, causing parts of Highway 124 to fill with at least 4 feet of water, Holzaepfel said. The storm has also produced at least 100 emergency calls, but there were no immediate reports of injuries, the fire marshal continued.About 800 homes in the Winnie and Stowell area may be experiencing high water, he said.According to the National Weather Service, about 7 inches of rain fell near Mont Belvieu from Wednesday to Thursday afternoon, while 10 inches was recorded near Anahuac. As the water rose overnight, about five to six patients from the Riceland Healthcare hospital also in Winnie, Chambers County Precinct 1 Constable Dennis Dugat said."The hospital flooded, so we have to get them out," Dugat said. Atascocita Fire brought their high-water rescue vehicles to move the patients to another hospital, Dugat said.Mo Danishmund, chief financial officer for Riceland Healthcare, said the hospital had received several inches of rain. "This didn't happen to us during Harvey, and also this came out of nowhere," he said. "(This) is worse than Harvey,"
Footage shows devastation in Texas from Imelda --Footage shared across social media Thursday showed major flooding and devastation in southeast Texas as then-Tropical Depression Imelda, which was later downgraded to an open wave, moved into the region.CBS shared footage of a photographer from a local affiliate station rescuing a mother and her children after their car became stuck in floodwaters.Highways and roads were abandoned with cars still on the road as rains slammed Texas and Louisiana. Chambers County, Texas, Sheriff Brian Hawthorne told ABC affiliate KTRKthat the destruction from Imelda was so bad that it made Hurricane Harvey "look like a little thunderstorm,” referring to the Category 4 storm that devastated Texas and Louisiana in 2017.The worst of the flooding from Imelda was reported north and east of Houston, including in Beaumont, Texas. Other footage showed people trying to save local animals in the state from the floodwaters.At least one person has died from the storm, with that person dying after moving his horse from flood waters when an electrical storm hit, NBC News reported.
2 dead as flooding disaster brings Houston area to standstill - Torrential rain and deadly flooding is bringing the Houston area to a standstill, shuttering schools, canceling flights and leaving hundreds of cars swamped and abandoned. The remnants of Tropical Storm Imelda dumped up to 43 inches of rain within three days in the areas between Winnie and Beaumont, east of Houston. Most of that rain fell in just 24 hours. Some residents whose homes were flooded by Hurricane Harvey two years ago are now seeing rain seeping into their houses yet again.At least two deaths were reported on Thursday as the floodwaters rose: one man who drowned after driving into floodwaters and a second man who was electrocuted and drowned while trying to move his horse, according to authorities.Texas Gov. Greg Abbott on Thursday declared a state of disaster for 13 counties as the floodwaters climbed up to the door handles of SUVs.In Harris County, which encompasses Houston, more than 1,000 people were rescued. Some residents used tractors and air boats to pull other to safety.Houston, the nation's 4th largest city, saw over 9 inches of rainfall on Thursday, the wettest September day ever recorded there. About 200 students from the Aldine Independent School District were forced to spend the night at school after they couldn't get home due to the flooding, ABC Houston station KTRK reported. Houston public schools are closed Friday. This week's downpour is the fourth highest amount of rain from a tropical system in Texas' recorded history, as well as the seventh highest amount of rain from a tropical system in U.S. recorded history. Hurricane Harvey brought 60 inches of rain to Texas two years ago, which remains the U.S. record for most rain from a tropical system.
Hurricane season: Humberto, Jerry, Kiko set record for most storms - -- Sure, it's the middle of hurricane season. But this is ridiculous. The six named storms whirling at once this week in the Atlantic and Pacific hit a record first set in 1992, forecasters reported."While Humberto and Kiko were spinning in the Atlantic and Eastern Pacific, four new tropical cyclones formed Tuesday: Imelda and Jerry in the Atlantic Basin, and Mario and Lorena in the Eastern Pacific Basin," the Weather Channel reported.This combined number of active storms in both basins was believed to tie a modern record, set in September 1992, according to National Hurricane Center forecaster Eric Blake.He tweeted Tuesday that "they are forming like roaches out there.""It's not something that you see all the time, but not unheard of, either," said Weather Channel meteorologist Danielle Banks. According to the National Hurricane Center, there have been as many as five active Atlantic tropical cyclones at once, which occurred Sept. 10-12, 1971. In the eastern Pacific, on Aug. 26, 1974, there were five simultaneous named storms of at least tropical storm strength, Phil Klotzbach, a tropical scientist at Colorado State University, told weather.com.September is the peak month for hurricane and tropical storm activity in both the Atlantic and Pacific, NOAA reports. "In September, ocean temperatures are nearly at their yearly peak, and shearing winds that can rip apart tropical storms and hurricanes are typically at their lowest," the Weather Channel reported.
Is California About To Get Hit By A Hurricane For The Very First Time In History? - In the entire history of our country, a hurricane has never made landfall in the state of California. So if such a thing actually happened, it would be considered to be an extremely unusual event. Well, right now there are three very dangerous tropical storms swirling in the eastern Pacific Ocean. Tropical Storm Kiko is not expected to be a serious threat to make landfall, but Tropical Storm Lorena and Tropical Storm Mario “are expected to become hurricanes by Friday as they approach the Mexican coast”. Tropical Storm Lorena is the more immediate threat, and the latest forecast is projecting that it will reach Mexico’s Baja California Peninsula by Saturday. If it maintains hurricane strength and continues to ride up the west coast, it is entirely possible that we could see something that we have never seen before. Most forecasters don’t want to talk too much about it yet, because it truly would be an unprecedented event, but there really is a chance that California could get hit by a hurricane for the very first time in U.S. history.
6 Dead in Worst Storm to Drench Eastern Spain in 140 Years - Record rainfall and flooding in southeastern Spain killed six people as of Saturday, The New York Times reported.More than 3,000 people had to be rescued from the storm that drenched Murcia, Valencia and eastern Andalusia on Spain's Mediterranean coast last week. Some towns recorded their highest rainfall on record. While it is normal for the region to see autumn storms, last week's deluge was the worst to hit eastern Spain in 140 years, EL PAÍS reported. Ontinyent in Valencia recorded 250 millimeters (approximately 10 inches) of rainfall in 12 hours, 10 times the normal amount for this time of year, according to EL PAÍS. The storm killed two siblings on Thursday when their car was swept away by flood waters in Caudete, in Albacete, EL PAÍS reported further. On Friday, another man drowned in Almería when he entered a flooded underpass. Two other men were found dead Friday: one, aged 36, in Granada, and another, aged 58, near Orihuela in Alicante. A sixth man was found dead in Orihuela Saturday. He was 41 years old. The town of Orihuela was especially hard hit. It was cut off for three days due to flooding on the roads. More than 1,100 military personnel were deployed to rescue people from flooding in Murcia and Valencia, The Guardian reported. Interior Minister Fernando Grande-Marlaska said 3,500 people had to be rescued, according to The New York Times. Some people had to be rescued from rooftops by helicopter, and four people were saved from the tops of cars by boat and jet ski. The deluge closed the airports of Murcia and Almería, as well as train lines, roads and schools.
US and Brazil agree to Amazon development -The US and Brazil have agreed to promote private-sector development in the Amazon, during a meeting in Washington on Friday.They also pledged a $100m (£80m) biodiversity conservation fund for the Amazon led by the private sector.Brazil's foreign minister said opening the rainforest to economic development was the only way to protect it. Ernesto Araujo also hit back at criticism of Brazil's handling of the forest fires. He told reporters in Washington that claims the country is "not able to cope with the challenges" were false. On Friday, Finland urged EU countries to consider stopping importing beef and soybeans from Brazil in order to put pressure on Brazil to tackle the fires.Brazil's President Jair Bolsonaro has faced criticism for failing to protect the region.More than 80,000 fires have broken out in the Amazon rainforest so far this year.Experts believe the majority of the fires across Brazil this year are caused by human activity such as farmers and loggers clearing land for crops or grazing. Environmentalists will say this scheme is a ruse to open up the Amazon for mining, logging and farming. When roads are driven into the forest it attracts more settlers, who clear land and hunt wildlife. The land clearance - even on a quite small basis - leads to changed weather patterns, which harm the forest. Environmentalists will argue the best way of saving the rainforest is to leave it in the hands of indigenous people. Environmentalists say Mr Bolsonaro's policies have led to an increase in fires this year and that he has encouraged cattle farmers to clear large areas of the rainforest since his election last October.
The Entire Global Economy Is Complicit In The Destruction Of The Amazon - Name any fast-food restaurant, personal care product or home good you have bought recently, and chances are it contributed to the deforestation of the Amazon. Now name a big bank ― any big bank, really. More than likely it has helped finance that destruction. Furniture companies like IKEA and La-Z-Boy, and footwear giants like Nike, Adidas and New Balance, are customers of Chinese manufacturers that source leather from Brazilian cattle ranches. Palm oil, produced in Brazil and elsewhere, is used in everything from pizza dough and ice cream to lipstick and shampoo. Soy, paper and wood products that come directly from the Amazon are omnipresent. It’s not hard to pinpoint our unquenchable thirst for cattle, soy, timber, palm oil and other commodities as the main driver of Amazonian deforestation and the underlying cause of the record number of fires this year. What’s more difficult is figuring out what to do about it. The sheer scale of the global economy and the complexity of the supply chains and financial systems that make it work mean that nearly every company, corporation and banking and investment institution on the planet is complicit in the destruction of the Amazon and other forest ecosystems around the world. Although hundreds of companies have made high-profile public commitments to combating deforestation, none is doing enough to actually limit ― much less end ― the practice. The world loses 30 football fields of trees to deforestation every minute, but few places highlight the problem quite like the Amazon, a rainforest that has been the subject of extensive global attention and protectionist efforts from past Brazilian leaders and conservation groups for decades.
Deforestation Is Getting Worse, 5 Years After Countries and Companies Vowed to Stop It - Five years after joining in a historic commitment to stop cutting the world's forests, governments and companies are not only failing to slow deforestation, they are rapidly driving the disappearance of more trees.As fires consume Amazonian forests, stoking global concern about the loss of a vital ecosystem and climate regulator, a new report published Thursday finds that forests continue to be cleared at an alarming rate, driven mostly by agricultural expansion and demand for beef, palm oil and soy."We're losing the battle, so to speak, on stopping deforestation," said Craig Hanson, a vice president at the World Resources Institute. "This is a clarion call." Nearly 200 companies and governments have signed onto the 2014 New York Declaration on Forests—which includes the goals of halving deforestation by 2020 and stopping it by 2030. But the new assessment by researchers and environmental groups found that forest loss has accelerated by more than 40 percent annually since the declaration's launch.The cutting and burning of tropical forests, especially mature tropical forests, is particularly damaging because of the carbon storage lost and the contribution to climate change when trees burn or decompose, the authors write. They found that, on average, tropical deforestation and tree deaths emitted more carbon dioxide per year in the past five years than the entire European Union did in 2017. The Intergovernmental Panel on Climate Change has said the world won't achieve critical emissions reductions goals without stopping deforestation and restoring the world's forests. "It's critical for climate change," Hanson said. "We simply can't afford to fail to achieve the New York Declaration on Forests."
California’s wildfire season is roaring to life - Fast-moving blazes kick-started California’s fire season this past week, a turnaround from a deceptively quiet summer — and one that might signal a relentless autumn. The culprit: a long hot spell, followed by a transition to more turbulent weather.It started in Southern California, where firefighters wrestled the nearly 2,000-acre Tenaja Fire, struggling to protect homes. Then, in far-northern California, thunderstorm winds propelled runaway fires, including the Walker Fire, the year’s largest at more than 44,000 acres and counting. There were evacuation orders in Butte County over the weekend and again near Santa Barbara on Monday, where brush fires closed parts of U.S. 101.“It’s been a very slow buildup; that’s why it seems so sudden,” said Alex Tardy, a meteorologist at the National Weather Service in San Diego.After a very wet and cool May, the summer months were remarkably calm, as dips in the jet stream or “troughs” continued to stall the fire season not only in California but also in the Pacific Northwest and the northern Rockies. However, the state started heating up in late July, and August was well above normal.Last month’s prolonged heat dried out dead plants and stressed larger live plants and trees, making them more susceptible to fire. In many areas, it’s as if the wet winter and spring never happened because vegetation is right back to where it usually is in late August and early September — at peak dryness — and in some regions, below that. And this winter’s heavy grass crop not only ignites easily but also burns more intensely, with longer flame lengths.But the tipping point was a bout with gusty thunderstorms last week and a high-altitude weather disturbance that is now bringing cooler but dry, windy weather.
Indonesia seals off 30 companies over forest fires — Indonesia has sealed off 30 companies amid a row with Malaysia over forest fires that are spreading a thick, noxious haze around Southeast Asia, officials said Saturday. The plantation companies, including a Singapore-based company and four firms affiliated with Malaysian corporate groups, are under scrutiny and waiting for decisions on possible punishment, said Sugeng Riyanto, the law enforcement director at Indonesia’s Forestry and Environment Ministry. Nearly every year, Indonesian forest fires spread health-damaging haze across the country and into neighboring Malaysia and Singapore. The fires are often started by smallholders and plantation owners to clear land for planting. Indonesia’s forestry and environment minister, Siti Nurbaya Bakar, told reporters Friday that the government will prosecute a number of companies as a deterrent to setting fires. The move came days after she disputed that the smoke was coming from Indonesia, noting that hotspots were also detected in Malaysia’s Sarawak state. Malaysia’s environment minister, Yeo Bee Yin, responded immediately, telling Indonesia “not to be in denial.” She cited data that showed that the haze impacting parts of Malaysia originated in Indonesia. The head of Indonesia’s Meteorology, Climatology and Geophysics Agency, Dwikorita Karnawati, dismissed claims by Malaysia that haze from Indonesia has drifted to the neighboring nation for days. She said the haze began to enter the area above peninsular Malaysia and Serawak state on Thursday morning. She said the agency’s satellites and its Geohotspot analysis on Thursday detected 1,231 hotspots on Sumatra island and 1,865 on Borneo. It also detected 412 hotspots in Malaysia’s state of Serawak and 216 in Sabah.
Fires Rage Across Indonesia, 200 Suspects Arrested - Nearly 200 people have been arrested in Indonesia over their possible connections to the massive wildfires raging in the nation's forest, officials said this week.Hundreds of wildfires have burned nearly 840,000 acres of forest in Indonesian Borneo and Sumatra this year, in the country's worst fire crisis since 2015. Officials say that some 80 percent of the fires, usually a regular occurrence in the dry season, are due to slash-and-burn techniques to clear the land for agriculture.The fires have led to evacuations and unhealthy air quality levels across the country and in neighboring Singapore and Malaysia, with more than 600 schools in Malaysia forced to close from the smoke. For a deeper dive: CNN, New York Times $, Mongabay
90% of the world's population just experienced the hottest summer on record - The Northern Hemisphere, which holds 90% of the world's population, just experienced its hottest meteorological summer on record, tied with 2016, scientists from the National Oceanic and Atmospheric Administration (NOAA) announced Monday. For the year-to-date, 2019 is the third-warmest year on record after 2016 and 2017. According to NOAA, nine of the 10 highest June-through-August global land and ocean surface temperatures have occurred since 2009. It was the second-hottest summer at a global level, according to NOAA, along with the second-hottest August on record for the planet. South America, Africa, Europe, the Gulf of Mexico and the Hawaiian region had a temperature departure from average for the summer months that ranked among the three warmest such periods on record. Africa, for example, had its warmest June-through-August period on record, according to NOAA's report. Europe was baked by multiple scorching heat waves throughout the summer that spread record high temperatures across the continent, making Paris surpass its hottest temperature ever recorded. Germany and France had their third-warmest summers on record, while Austria had its second-warmest summer. In July, France, Belgium, Germany, Netherlands and the United Kingdom all set new all-time high temperature records. Alaska is one area that has suffered the most from the heat. Eight of Alaska's top 13 warmest days on record were in 2019. "The Anchorage airport reached 90 degrees for the first time in that weather station's history on July 4. Anchorage also topped 80 degrees eight times this year, the most ever since record keeping of the weather began there in 1917," Sojda said.
Alaska just had the most ridiculous summer. That's a red flag for the planet. -- Alaska's summer of fire and no ice is smashing records.With the Arctic warming twice as fast as the rest of the planet, America's "Last Frontier" feels like the first in line to see, smell and feel the unsettling signs of a climate in crisis. There are the smoky skies and dripping glaciers, dead salmon and hauled-out walrus but scientists also worry about the changes that are harder to see, from toxic algae blooms in the Bering Sea to insects from the Lower 48 bringing new diseases north.The head shaking among longtime locals really began on the Fourth of July, when at 90 degrees, Anchorage was hotter than Key West.A dome of hot, dry air over the southern part of the state refused to budge. When lightning struck the Kenai Peninsula, it was just the beginning of a wilderness inferno unlike any other in memory. Like rainy clockwork, Alaska's fire season usually ends August 1 but the Swan Lake fire is still burning and only 37% contained. To the relief of exhausted fire crews and worried residents, September is bringing the first moisture in weeks but the most populous part of the state is still swallowing more smoke than ever."We've had more than twice as many smoky hours in 2019 than in any other season, and in fact, almost as many as all other years combined," says Brian Brettschneider, a climatologist at the University of Alaska. Brettschneider lists one superlative after another, pulled from a century's worth of records that predate Alaskan statehood. "Eight of our top 13 warmest days on record are this year," he says. "We didn't just get a little bit past the old marks, we really blasted past them.""We've talked about these things occurring in decades or in centuries, but ... it's happening right now and it's visible right now and it's noticeable right now," the University of Alaksa climatologist says. "The opportunity to do things about it is right now and not decades down the road. So, in one sense, it's really bad, but people tend to kind of step up and do something about it when they feel a sense of urgency, and there really is a sense of urgency right now."
With Greenland's Extreme Melting, a New Risk Grows: Ice Slabs That Worsen Runoff - Scientists have added a new item to the long list of Greenland Ice Sheet woes. Along with snow-darkening algae and increasing rainfall, giant slabs of ice have been thickening and spreading under the Greenland snow at an average rate of two football fields per minute since 2001, new research shows.The slabs prevent surface meltwater from trickling down and being absorbed by the snow. Instead, more water pours off the surface of the ice sheet and into the ocean.That's speeding Greenland's contribution to sea level rise, said University of Liege climate researcher Xavier Fettweis, a co-author of a studypublished Wednesday in the journal Nature. "It is very likely that the current climate models overestimate the meltwater retention capacity of the ice sheet and underestimate the projected sea level rise coming from Greenland ... by a factor of two or three," he said. This past summer was either Greenland's worst melt season on record or close to it, scientists said. Melting spiked in June. And in July and August, a heat wave led to melting over more than 60 percent of the ice sheet, including sending temperatures above freezing at the ice sheet's summit. All summer long, the average melt extent was much higher than the 1981-2010 average. There was also open sea ice north of Greenland at a record-early date, and Arctic sea ice hovered near record-low extentall summer.The formation of the ice slabs is connected to extreme melt seasons like the one Greenland just experienced, said Mike MacFerrin, the study's lead author and a University of Colorado climate researcher who has traversed the Greenland Ice Sheet each spring for several years to measure the phenomenon. "Ice slabs are forming where they never used to exist because big melt summers are happening ever-more-frequently, and 2019 was one of those years," he said.
PIOMAS September 2019 - Arctic Sea Ice by Neven - Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center: Despite a massive amount of melting momentum and an advantageous thickness distribution, volume loss during August 2019 was below average (2301 vs 2559 km3 for the 2007-2018 period). Of course, being record low makes it harder to melt a lot of ice, but since 2007, only two years - 2013 and 2017 - managed to lose less volume than 2019 during August. This means that this year is no longer lowest on record, with 2012 breezing past and going 238 km3 lower. 2016, though profiting from the most extreme August weather conditions in the era of the New Abnormal, is still 521 km3 behind. Here's how the differences with previous years have evolved from last month: Wipneus' version of the PIOMAS graph shows that this year is the only one capable of staying somewhat close to 2012: Because extent loss during August was even slower than volume loss, average thickness has also gone down some more, second only to 2010, which saw massive dispersal towards the end of the melting season, with huge swaths of open water near the pole (I wrote about that in a blog post called North Hole during my first year of blogging). When there's a lot of extent, the volume gets spread over a larger ice pack, and thus thickness goes down. Remember, PIJAMAS is an (imperfect) average thickness measure where I divide the PIOMAS volume numbers with JAXA sea ice extent numbers: PIJAMAS 20190831The Polar Science Centre average thickness graph shows more or less the same, but with 2011 lower than this year as well: To be honest, I expected a clearer melting momentum signal during this final phase of the melting season. Melting momentum took off slower than years like 2012 and 2016, but when it did take off, it was fireworks (see June 2019, one hell of a month). David Schröder's melt pond fraction maps, the SMOS pixel chart, the compactness charts, the Albedo-Warming Potential graphs, the snow cover graphs, more and more they were pointing to a massive build-up of melting momentum. On top of that, PIOMAS was showing that this year was very competitive volume-wise, and for five months in a row, 2019 was in the top 3 when it came to temperature records (August coming in hottest on record):
If carbon dioxide hits a new high every year, why isn’t every year hotter than the last? --Earth’s temperature doesn’t react instantly to each year’s new record-high carbon dioxide levels. Thanks to the high heat capacity of water and the huge volume of the global oceans, Earth’s surface temperature resists rapid changes. Said another way, some of the excess heat that greenhouse gases force the Earth’s surface to absorb in any given year is hidden for a timeby the ocean, so rising greenhouse gas levels don’t immediately have their full impact. Still, when we step back and look at the big picture, it’s clear the two are tightly connected. As the graph above shows, both global temperature (colored bars) and atmospheric carbon dioxide (gray line) increased more slowly during the first half of the observational record in the late nineteenth and early twentieth centuries. Atmospheric carbon dioxide levels rose by around 20 parts per million over the 7 decades from 1880–1950, while the temperature increased by an average of 0.04° C per decade.Over the next 7 decades, however, carbon dioxide climbed nearly 100 ppm (5 times as fast!). To put those changes in some historical context, the amount of rise in carbon dioxide levels since the late 1950s would naturally, in the context of past ice ages, have taken somewhere in the range of 5,000 to 20,000 years; we’ve managed to do it in about 60. At the same time, the rate of warming averaged 0.14° C per decade. The rate of temperature rise over such a short period time points to only one thing, and that is the addition of greenhouse gases, primarily carbon dioxide, into the environment. Within any given decade, however, the temperature bounces around between warm and cool years. The warmest years are usually El Niño years, when the eastern and central tropical Pacific is warmer than average. The coldest years are generally La Niña years. On a longer time scale, warm decades are often associated with strongly positive phases of the Pacific Decadal Oscillation, and cool decades with strongly negative phases.
What Is Nitrous Oxide and Why Is It a Climate Threat? - When it comes to the global climate crisis, carbon dioxide emissions represent a problem that's massive, intractable and running short on time to solve. But it's not the only problem.Other pollutants are rapidly warming our climate, too, sending scientists on a race to understand their implications before it's too late. For years, experts have warned about the risks from one pollutant in particular—nitrous oxide—and yet there's been little global action on it.The reason: "It is intimately connected to food," said Ravi Ravishankara, an atmospheric chemist at Colorado State University who co-chaired a United Nations panel on stratospheric ozone from 2007 to 2015. Nitrous oxide is 300 times more potent than carbon dioxide, and it also depletes the ozone layer. Since it also has a shorter life span, reducing it could have a faster, significant impact on global warming. But the largest source of nitrous oxide is agriculture, particularly fertilized soil and animal waste, and that makes it harder to rein in. "One could imagine limiting carbon dioxide, less methane, less of lots of things. But nitrous oxide is so much a food production issue," Ravishankara said. Since the 1960s, fertilizer use has shot up globally, helping usher in the "Green Revolution," which fed millions around the world. In the U.S. alone, the use of fertilizer has risen more than 200 percent over the past 60 years, even though the amount of cropland has stayed relatively constant. At the same time, the number of large industrialized livestock operations has also gone up, creating more manure "lagoons" and excess manure, which is often over-applied on cropland.A 2013 report by the United Nations found that since the pre-industrial era, nitrous oxide emissions from human activities have increased 20 percent. At the time, the authors wrote that if nothing was done, those emissions were expected to double by 2050.Despite nitrous oxide's role depleting the ozone layer, it is not included in the Montreal Protocol on Substances that Deplete the Ozone Layer, an international treaty that aims to restore the ozone layer by phasing out certain substances. Here's what you should know about the potent pollutant:
Greta to Senate: Sorry, but Please Do More - Teen activist Greta Thunberg delivered a talking-to to members of Congress Tuesday during a meeting of the Senate Climate Change Task Force after politicians praised her and other youth activists for their efforts and asked their advice on how to fight climate change."Don't invite us here to tell us how inspiring we are without doing anything about it," Thunberg told the assembled senators. "We don't want to be invited to these kinds of meetings because, honestly, they don't lead to anything...I know you are trying but just not hard enough. Sorry." Thunberg also visited with President Barack Obama this week, and a video released by the Obama Foundation shows the two fist-bumping.
Greta Thunberg scolds Congress on climate action: 'I know you are trying but just not hard enough' -- Youth climate activist Greta Thunberg called on Congress to step up its efforts in the fight against climate change while speaking at a Senate forum on Tuesday. “I know you are trying but just not hard enough,” she told senators while attending a meeting held by the Senate Climate Change Task Force in Washington, according to The Associated Press. She was reportedly one of a number of climate activists invited to speak to the group. Thunberg, a 16-year-old from Sweden whose climate activism sparked demonstrations across the globe, reportedly went on to tell lawmakers at the forum to “save your praise,” adding that she and other protesters “don’t want it.” “Don’t invite us here to just tell us how inspiring we are without actually doing anything about it because it doesn’t lead to anything,” she said, according to The Guardian. “If you want advice for what you should do, invite scientists, ask scientists for their expertise. We don’t want to be heard. We want the science to be heard,” Thunberg added. Sen. Ed Markey (D-Mass.), who attended the event, told Thunberg that lawmakers "hear what you’re saying" and "will redouble our efforts," The Guardian reported. Thunberg is also reportedly expected to meet later this week with Rep. Alexandria Ocasio-Cortez (D-N.Y.), who co-sponsored the Green New Deal with Markey earlier this year. The teenage climate activist is scheduled to testify at a joint hearing on Wednesday morning before House lawmakers to discuss the global youth climate movement.
Greta Thunberg To U.S.: 'You Have A Moral Responsibility' On Climate Change - Greta Thunberg led a protest at the White House on Friday. But she wasn't looking to go inside — "I don't want to meet with people who don't accept the science," she says.The young Swedish activist joined a large crowd of protesters who had gathered outside, calling for immediate action to help the environment and reverse an alarming warming trend in average global temperatures. She says her message for President Trump is the same thing she tells other politicians: Listen to science, and take responsibility. Thunberg, 16, arrived in the U.S. last week after sailing across the Atlantic to avoid the carbon emissions from jet travel. She plans to spend nearly a week in Washington, D.C. — but she doesn't plan to meet with anyone from the Trump administration during that time. "I haven't been invited to do that yet. And honestly I don't want to do that," Thunberg tells NPR's Ailsa Chang. If people in the White House who reject climate change want to change their minds, she says, they should rely on scientists and professionals to do that.But Thunberg also believes the U.S. has an "incredibly important" role to play in fighting climate change."You are such a big country," she says. "In Sweden, when we demand politicians to do something, they say, 'It doesn't matter what we do — because just look at the U.S.' "I think you have an enormous responsibility" to lead climate efforts, she adds. "You have a moral responsibility to do that."
'Trollbots' Swarm Twitter with Attacks on Climate Science Ahead of UN Summit - CNN's seven-hour climate change town hall for presidential candidates was not a TV ratings bonanza, but it set off a marked surge of activity on Twitter aimed at ridiculing the Democrats and dismissing the science."Climate change" became the top two-word trending topic on Twitter for several hours after the event among the accounts being tracked by Bot Sentinel, a free platform designed to track what it considers untrustworthy or automated accounts. It was quite an unusual feat for the topic to beat out—even temporarily—the phrase that sits almost constantly atop the trending list for accounts on Bot Sentinel's watchlist: "President Trump." Scientists, activists and politicians who are engaged in climate policy say they are being besieged by a surge of online attacks. It is difficult to divine whether the bursts of "climate change"-related Twitter activity are spontaneous or part of coordinated campaigns; some experts say that likely a small number of influencers are touching off postings by a far larger number of followers. But in a post-2016 world that is keenly aware of the role that social media played in the election of Donald Trump, the targets of climate attacks are concerned about the potential for online onslaughts to manipulate opinion and neutralize growing public support for climate action.
Kids' world climate strikes demand that warming stop, fast - Listen up, grown-ups around the world: You’ve failed us. That is the message millions of young people from Sydney to Warsaw to London and beyond carried to the streets on Friday, as they skipped school to stage strikes demanding urgent action on climate change. The global strike is the third this year and involved more than 3,000 protests, according to Fridays for Future, the group that organized them. The strike in New York, where 1.1 million students were excused from school, comes ahead of a pair of climate meetings at the United Nations–the first-ever Youth Summit on Saturday and a one-day Climate Action Summit of the General Assembly on Monday. The New York protest was led by Greta Thunberg, the 16-year-old Swedish high school student who has become the face of the fast-growing youth movement that has taken hold in more than 200 nations. Her message to world leaders is blunt and to the point: Listen to the science."We are united behind the science and will stop at nothing to keep this crisis from getting worse," Thunberg said from the stage in Battery Park at the south end of Manhattan as the crowd chanted, "Greta, Greta, Greta." She not only condemned political leaders for their "empty promises, lies and inaction," she chastised supportive adults for taking selfies with her and her fellow activists and telling them "how much they admire what we do."That is not why the crowds turned out in the streets, she added. "We are doing this to wake up the leaders," she said. "We deserve a safe future. Is that too much to ask?"Thunberg delivered a similar message to the U.S. Congress when she testified earlier this week. Instead of prepared remarks, she submitted last October’s report from the UN’s Intergovernmental Panel on Climate Change warning that warned the rise of global temperatures was hastening to an alarming degree. To prevent 2.7 degrees Fahrenheit of warming—which would result in catastrophic food shortages, coral reef die-offs, worsening flooding, wildfires and extreme weather—the scientists advised that global greenhouse gases must be reduced by 45 percent by 2030 and 100 percent by 2050. Aside from her appearance before Congress, Thunberg met with House Speaker Nancy Pelosi and former President Barack Obama, and appeared at a protest in front of the Supreme Court with 21 youth plaintiffs suing the government to force court-ordered action on climate change. She also joined a strike outside the gates of the White House, which included a silent 11-minute “lie-down” in recognition that there just 11 years remaining before that first 2030 deadline.
Thousands of tech employees walked out of their workplaces to join the climate strike -- Workers from Microsoft, Google, Amazon, Facebook, and Twitter staged walkouts in what may be the largest coordinated worker action in the history of the tech industry. At the demonstration in Seattle, more than 3,000 tech workers walked out of their workplaces on Friday and thousands more joined actions across the country, according to Amazon Employees for Climate Justice, a group calling for Amazon to make more effort to address climate change. Globally, more than 1,800 Amazon employees walked out across 25 cities and 14 countries on Friday to protest the company’s failure to take more action to address the climate crisis. Jeff Bezos, Amazon’s CEO, has made some efforts to address climate concerns, including an announcement on Thursday that the company expects to be carbon neutral by 2040 and a February announcement of a goal, known as Shipment Zero, to be carbon neutral on 50% of shipments by 2030. But workers are asking for more: zero emissions by 2030, increasing the number of electric vehicles in its fleet, and refusing to set contracts with companies that damage the climate. Other tech companies were present at marches in San Francisco and beyond. Twitter workers walked out, marching alongside workers from tech payment firm Square in San Francisco. Facebook workers walked out of offices around the country, including employees who left the headquarters in San Jose. More than 1,800 workers at Google signed a pledge supporting climate action from the company, including zero emissions by 2030, eliminating contracts with oil and gas companies, and promising zero harm to climate refugees. Hundreds walked out of Google offices across the US, including in New York City and at the headquarters in San Jose. “As individuals, we may feel alone in facing climate change,” the Google petition said. “But if we act together – if we act now – we can build a better future.”
Across the globe, millions join biggest climate protest ever - Millions of people demonstrated across the world yesterday demanding urgent action to tackle global heating, as they united across timezones and cultures to take part in the biggest climate protest in history. In an explosion of the youth movement started by the Swedish school striker Greta Thunberg just over 12 months ago, people protested from the Pacific islands, through Australia, across-south east Asia and Africa into Europe and onwards to the Americas. For the first time since the school strikes for climate began last year, young people called on adults to join them – and they were heard. Trade unions representing hundreds of millions of people around the world mobilised in support, employees left their workplaces, doctors and nurses marched and workers at firms like Amazon, Google and Facebook walked out to join the climate strikes. Global climate strike: Greta Thunberg and school students lead climate crisis protest – as it happened Read more In the estimated 185 countries where demonstrations took place, the protests often had their individual targets; from rising sea levels in the Solomon Islands, toxic waste in South Africa, to air pollution and plastic waste in India and coal expansion in Australia. But the overall message was unified – a powerful demand for an urgent step-change in action to cut emissions and stabilise the climate. The demonstrations took place on the eve of a UN climate summit, called by the secretary general, António Guterres, to inject urgency into government action to restrict the rise in global temperatures to 1.5C, as agreed under the 2015 Paris agreement. Carbon emissions climbed to a record high last year, despite a warning from the UN-backed Intergovernmental Panel on Climate Change that there is little more than a decade left to act to slash emissions and stabilise the climate.
Money Is the Oxygen on Which the Fire of Global Warming Burns - Bill McKibben - This spring, we set another high mark for carbon dioxide in the atmosphere: four hundred and fifteen parts per million, higher than it has been in many millions of years. The summer began with the hottest June ever recorded, and then July became the hottest month ever recorded. The United Kingdom, France, and Germany, which have some of the world’s oldest weather records, all hit new high temperatures, and then the heat moved north, until most of Greenland was melting and immense Siberian wildfires were sending great clouds of carbon skyward. At the beginning of September, Hurricane Dorian stalled above the Bahamas, where it unleashed what one meteorologist called “the longest siege of violent, destructive weather ever observed” on our planet. The scientific warnings of three decades ago are the deadly heat advisories and flash-flood alerts of the present, and, as for the future, we have hard deadlines. Last fall, the world’s climate scientists said that, if we are to meet the goals we set in the 2015 Paris climate accord—which would still raise the mercury fifty per cent higher than it has already climbed—we’ll essentially need to cut our use of fossil fuels in half by 2030 and eliminate them altogether by mid-century. In a world of Trumps and Putins and Bolsonaros and the fossil-fuel companies that back them, that seems nearly impossible. It’s not technologically impossible: in the past decade, the world’s engineers have dropped the price of solar and wind power by ninety and seventy per cent, respectively. But we’re moving far too slowly to exploit the opening for rapid change that this feat of engineering offers. Hence the 2 a.m. dread. Climate change is a timed test, one of the first that our civilization has faced, and with each scientific report the window narrows. By contrast, cultural change—what we eat, how we live—often comes generationally. Political change usually involves slow compromise, and that’s in a working system, not a dysfunctional gridlock such as the one we now have in Washington. And, since we face a planetary crisis, cultural and political change would have to happen in every other major country, too. But what if there were an additional lever to pull, one that could work both quickly and globally? One possibility relies on the idea that political leaders are not the only powerful actors on the planet—that those who hold most of the money also have enormous power, and that their power could be exercised in a matter of months or even hours, not years or decades. I suspect that the key to disrupting the flow of carbon into the atmosphere may lie in disrupting the flow of money to coal and oil and gas.
Divesting From Oil Companies Does 'Nothing' To Save The Climate, Bill Gates Says - Climate activists who have convinced pension funds to divest from energy stocks as a way of taking a stance on the climate can save their breath, because according to Microsoft founder Bill Gates, they're wasting their time.Those who are trying to save the world from climate change would be better served by simply investing in companies that are researching disruptive non-carbon energy sources, Gates said. For example, investors might have better results if they choose to place their money in Beyond Meat and Impossible Foods - or other companies chasing similarly green business models. Gates suspects that, for all of the money that has been drained out of the energy sector because of the divestment movement, nothing has been done to reduce emissions. And the divestment movement hasn't been confined to a few fringe groups. In recent years, it has gained real traction; Now the Church of England, an array of pension funds and sovereign wealth funds, and an investment vehicle that manages the wealth of the Rockefeller family. "Divestment, to date, probably has reduced about zero tonnes of emissions. It’s not like you’ve capital-starved [the] people making steel and gasoline," he said. "I don’t know the mechanism of action where divestment [keeps] emissions [from] going up every year. I’m just too damn numeric." During an interview with the FT published Tuesday, Gates questioned the strategy's "theory of change," arguing that it's more effective to support companies trying to fight carbon emissions and disrupt established markets like food and fuel than trying to starve energy giants like ExxonMobil of capital. "When I’m taking billions of dollars and creating breakthrough energy ventures and funding only companies who, if they’re successful, reduce greenhouse gases by 0.5%, then I actually do see a cause and effect type thing," he said.Gates is making the media rounds ahead of the UN General Assembly meeting later this month. He and his wife, Melinda, with whom he started the Bill & Melinda Gates Foundation, released their organization's "Goalkeepers" report on Tuesday. The UN is hoping to fulfill these goals by 2030, the FT said. But Bill and Melinda Gates are trying to convince the world that not enough is being done, and that achieving their goals would be "unrealistic" on the current trajectory.The Goalkeepers report says the response to climate change can't be limited to reining in emissions, and should instead focus on helping society cope with the changes to the climate that have already happened.
What is the Theory of Change in Naomi Klein’s “On Fire: The Burning Case for a Green New Deal”? - naked capitalism, Lambert Strether - (see also comments) Naomi Klein has just launched On Fire: The Burning Case for a Green New Deal (Simon & Schuster (2019; search for independent bookstore near you). While I confess I have not yet purchased the book, On Fire has gotten a lot of play — some from Klein herself, touring — and the nature of that play is interesting in itself. So consider this a meta-review. First, I’ll look briefly at Klein as a figure, and review my own position on a Green New Deal (GND). Then, I’ll collect several “takes” on the book. Finally, I’ll ask if a clear “theory of change” can be reverse-engineered out of those takes; that is, assuming that the desired verdict is in favor of the Green New Deal, do the takes on the book provide (#1) a clear explanation of why there is not alreadya GND, and (#2) a strategy to get the GND. Spoiler alert: On the evidence of the takes, including those of Klein herself, the answer is… no (I’m aware of the dangers of kicking a puppy, but so be it.) So, to Klein the figure. Readers will be familar with Klein’s Shock Doctrine, with its theory of “disaster capitalism.” Klein has a real track record as a writer who can powerfully communicate complex ideas, and has a real knack for skating to where the puck is going to be; Shock Doctrinewas published in 2007, right before the Crash, for example. Klein has been working on climate change for awhile. From Elle, “Progressive Prophet Naomi Klein Sees The Future. Can It Be Changed?“: Klein has never liked marching and has described herself as physically incapable of chanting, but she has become increasingly involved in climate activism. In 2011, she was arrested for the first time, protesting the Keystone XL pipeline outside the White House. She was instrumental in developing the divestment movement, which has led to $8 trillion being disinvested from fossil fuels. She also helped organize The Leap Manifesto, a document written in 2015 by a coalition of indigenous leaders, environmental activists, and union heads based around what Klein later described as a key insight: that many progressive battles could be addressed through a so-called “Marshall Plan for the Earth.”
Why Degrowth Is the Only Responsible Way Forward - To sustain the natural basis of our life, we must slow down. We have to reduce the amount of extraction, pollution, and waste throughout our economy. This implies less production, less consumption, and probably also less work.The responsibility to do so must lie mainly on the rich, who currently enjoy a disproportionate share of our resources. But we should also do things differently, as much of today’s economic activity is of little benefit to human wellbeing. Imagine what could be if we organized democratically to produce what we actually need, distributed those resources fairly, and shared them in common. This, in a nutshell, is the vision of degrowth: a good life for all within planetary boundaries. And while this might seem utopian, there are already concrete policy ideas to start such a transformation.In a recent article, Leigh Phillips argues that this is a delusion. He brings forth three main critiques: degrowth is (1) not necessary, (2) unjust, and (3) marks the end of progress. He suggests that we should “take over the machine, not turn it off”, expressing his concern that an end to growth would mean an end to all the things that makes our lives so rich, like for example fridges. This reminds him of the likes of Malthus or Thatcher, whose ideologies have supported the imposition of unjust limits onto the poorer parts of society. In this response, we want to investigate the world-view behind Phillips’s critique and argue that degrowth is, in fact, very different than what he claims it is. This is not the first time that this debate has been had (see here, here, or here). Our aim is not to create further division. Instead, we want to point towards common values that degrowth shares with socialist perspectives. We claim that Phillips employs an inordinate optimism about technological possibilities, and discuss how his views are framed by a rather narrow and liberal conception of freedom and progress. We argue that an increase in social value does not depend on economic growth, allowing for further human flourishing within limits.
For Many Reporters Covering Climate, Population Remains the Elephant in the Room - In June, New York Times journalist Andy Newman wrote an article titled, "If seeing the world helps ruin it, should we stay home?" In it, he raised the question of whether or not travel by plane, boat, or car—all of which contribute to climate change, rising sea levels, and melting glaciers—might pose a moral challenge to the responsibility that each of us has to not exacerbate the already catastrophic consequences of climate change. The premise of Newman's piece rests on his assertion that traveling "somewhere far away… is the biggest single action a private citizen can take to worsen climate change." But that's not true. In 2017, Seth Wynes of Lund University in Sweden and Kimberly Nicholas of the University of British Columbia estimated the carbon emissions that various individual lifestyle choices would have. The foremost way to reduce climate change, their report said, would be to have one fewer child (which would otherwise annually contribute an additional 58.6 tons of carbon dioxide, on average in developed countries, according to the researchers' estimates). The runner-ups were living car free (2.4 tons of carbon dioxide per year), and not taking one transatlantic flight (1.6 tons of carbon dioxide per year). On the heels of Newman's piece, The Guardian published an interactive story focused exclusively on how much carbon dioxide is emitted per flight. A month on from Newman's story, Quartz published a story titled, "If you care about your impact on the planet you should stop flying." For that story, Quartz replicated a graph from the Wynes and Nicholas study, but failed to include the impact that not having another child would have. When I asked the reporter, Natasha Frost, why Quartz decided to omit part of the data, she said the graphing software couldn't fit the data properly on the graph. If any article is only talking about flying less, or eating less meat, "it's borderline dangerous and misleading," Erica Gies, an independent journalist who has written about population and her personal decision not to have children, says. "Or the writer is ill-informed, doesn't want to look at the reality, or open themselves up to the personal attack that is writing about it." If not having another child saves more than 20 times more carbon per year, why aren't more journalists talking about human population in proportion to the climate impact that it can have?
Pa. environmental board will vet proposed rules restricting potent greenhouse gas emissions -- Three years after they were first announced, new regulations restricting methane emissions from existing natural gas wells will get a hearing before a statewide rulemaking body this year, Gov. Tom Wolf’s office said Tuesday.The move comes as Republican President Donald Trump rolls back restrictions on the potent greenhouse gas.Lawmakers from both parties and environmental advocates gathered in the Capitol rotunda Tuesday afternoon to decry the White House’s decision to loosen methane regulations and thank Wolf for pushing the new rules forward.Wolf rolled out his methane restrictions in January 2016. Two years later, in the summer of 2018, the governor and the Department of Environmental Protection created permits restricting methane emissions from any new natural gas wells or pipelines. But permits that restrict existing wells have taken longer.“There’s no sense of urgency,” Rep. Greg Vitali, D-Delaware, a longtime environmental advocate, told the Capital-Star.Vitali said he’s collecting signatures for a letter asking the administration to get the rule on th e agenda for the next meeting of the Environmental Quality Board in October. If the board takes the first step to approve the rule, it will still likely be over a year before the new regulation is implemented. The restrictions would still need to traverse the state’s long regulatory review process — including two swings for comment through the Pennsylvania General Assembly.
Pa.’s lawmakers return to Harrisburg this month. Here’s their plan. - House Republicans say of all the bills on their agenda, the first priority is a package dubbed “Energize PA.” Caucus spokesman Mike Straub predicted most of the already-introduced components will begin moving through the approval process this week and next.The package consists of eight bills which would, among other things, make it easier for companies to get environmental permits, encourage development on abandoned industrial sites, and make it cheaper to run natural gas lines to businesses. Broadly, Energize PA is intended to bolster Pennsylvania’s large natural gas industry. It also serves as a repudiation by Republican leaders of Gov. Wolf’s energy plan.
San Jose moves to ban natural gas in new residential buildings - (Reuters) - San Jose, the 10th most populous U.S. city and political center of Silicon Valley, on Tuesday moved to ban natural gas in most new residential buildings beginning next year. With a unanimous vote by the 10-member city council and Mayor Sam Liccardo, San Jose became the largest U.S. city so far to seek to reduce greenhouse gas emissions by favoring appliances that run on renewable electricity sources over those powered by natural gas. As expected, the city council adopted new building codes that favor electrification over natural gas during a meeting broadcast on San Jose’s official website. But the vote also required the council to return next month with an ordinance that would go further by banning natural gas in most new homes. Mayor Liccardo had pushed for the stricter rules in recent days. The move by San Jose and others comes amid rising local and state opposition to the use of natural gas in buildings because of the fossil fuel’s contribution to climate-warming emissions.
Scientists 'Tantalised' by Draining Every Hydropower Dam in The US For Solar Panels -If all the hydro-power dams in the United States were removed and replaced with solar panels, it would take up a fraction of the land and produce substantially more electricity, according to a new analysis.The idea is ambitious, and for now, it's really just a thought experiment. Today, hydropower is a significant source of renewable energy in the US, accounting for roughly six percent of the country's total electricity output.Removing all 2,603 hydro dams in America would leave a huge energy void behind, but it could also provide room for greener opportunities.While it's true that hydropower dams are a renewable source of energy, they still produce large amounts of greenhouse gases and can be environmentally destructive and costly to maintain in the long term.In recent years, these criticisms have led to a growing dam removal movement. And although it's theoretical, a massive investment in solar power might be able to cushion that loss.To cover for all the hydro dams currently in use, scientists estimate we would need nearly 530,000 hectares of photovoltaics (PV). While this sounds like a lot, it's a "surprisingly modest" amount compared to the combined size of most reservoirs, which cover nearly 4 million hectares nationwide. In fact, the new analysis suggests that substitute solar panels could match the total energy output from hydro dams while using just 13 percent of the same land.
Is there more spin than solar in Duke’s zero-carbon goal? – It’s all in the numbers and the context for those numbers.In the zero-carbon plan that Duke released yesterday, the nation’s largest owner of power plants and electricity sector emitter of CO2 also set a near-term goal to reduce its carbon emissions 50% by 2030.However, the fine print shows that this is a reduction from 2005 levels. Duke, by its own count, has already reduced emissions 31%. So this is actually a pledge to reduce emissions a further 19% by 2030, which was noted by a prominent energy writer on Twitter.This is but one of many of the details that suggests that Duke’s much-touted pledge could be an attempt to put a glossy shine on the foot-dragging that it has engaged in regarding renewables in the service area of its subsidiary utilities in the Carolinas, Florida and Indiana. This is definitely how the plan has been greeted by some advocates.While the American Council on Renewable Energy (ACORE) welcomed the pledge, local group NC WARN described it as “a scandalous deception foisted upon t he news media, the public and public officials such as Governor Cooper.”
Bill Gates Says Wind, Solar Subsidies Should Go to Something New-- It’s time wind and solar passed their subsidies along to emerging technologies that need them more, Microsoft Corp. co-founder Bill Gates says. After decades of government incentives, wind and solar have been deployed widely enough for manufacturers and developers to become increasingly efficient and drive down costs. Now they can probably survive without them, Gates said in an interview with Bloomberg Television. “The tax benefits there should be shifted into things that are more limiting, like energy storage, offshore wind -- which still has a huge premium price,” said Gates, who co-chairs a global group of business, political and scientific leaders formed in 2018 to push for investments to help the world adapt to climate change. U.S. states including New York, New Jersey and Massachusetts see proposed offshore wind farms in the Atlantic Ocean as crucial ingredients to phase out fossil fuels and fight climate change. But the costs of building wind farms at sea are still nearly twice as high as on land. Energy storage, meanwhile, is key to allowing wind and solar plants to dispatch power even when the sun sets and breezes go slack. But big batteries remain expensive, too. “The progress in solar and wind is very helpful,” Gates said. “But the sun doesn’t shine 24 hours a day.”
California Supercharges Battery Incentive for Wildfire-Vulnerable Homes -- California has passed its first-ever subsidy aimed specifically at bringing more distributed solar and energy storage to people at highest risk of having their power shut off by utilities trying to prevent wildfires. The California Public Utilities Commission approved changes (PDF) late last week to the Self-Generation Incentive Program, the state’s premier behind-the-meter battery incentive program. Among them is a $100 million carve-out for vulnerable households and critical services in Tier 2 and Tier 3 “high fire threat districts,” offering incentives that could pay for nearly all of a typical residential battery installation, according to the CPUC analysis. This supercharged incentive is aimed specifically at people at the highest risk of being hurt if, or when, grid power is cut off for hours or even days at a time under the state’s heightened wildfire prevention regime. While utilities have been sparing in their use of this new "public safety power shutoff" authority so far this summer, they are largely at the mercy of the weather to determine how often they’ll be forced to use it in the future, or how many customers might be affected.
Trump Admin to Officially Revoke California’s Waiver to Set Stricter Emissions Standards - In its latest move to undermine action on the climate crisis, the Trump administration will formally rescind California's waiver to set stricter auto emissions standards under the Clean Air Act. Revoking California's waiver is part of a broader effort to roll back Obama-era fuel efficiency standards for cars and light trucks. In a draft proposal released in August of 2018, the administration had promised to replace the Obama-era requirement that cars average 54.5 miles per gallon by 2025 with a much less ambitious target of around 37 miles per gallon. It also said it would revoke California's ability to set its own standards, so that automakers would not have to build for two national markets.But the reduced standards, which would allow nearly six billion tons of carbon dioxide pollution to enter the atmosphere, have been delayed as staff work to justify them scientifically, legally and technically, The New York Times explained. So the administration decided to move forward with revoking California's waiver."Trump has married his administration-wide hostility to the environment to his personal vendetta against California," Safe Climate Campaign Director Dan Becker told The New York Times. The move is likely to set off a legal battle that could go all the way to the Supreme Court. Part of the reason that the administration moved forward with revoking the waiver is so that it would have a chance to defend the decision in the nation's highest court before a potential election loss in 2020. The New York Times explained the stakes of that potential fight: Legal experts said that if Mr. Trump's move was ultimately held up by the Supreme Court, it could permanently block states from regulating vehicle greenhouse gas pollution. If it was rejected by the Supreme Court, it would allow states to set separate tailpipe pollution standards from those set by the federal government. The outcome could split the United States auto market, with some states adhering to stricter pollution standards than others. For automakers, that would be a nightmare. Thirteen states, representing one third of the U.S. auto market, currently follow California's standards. For its part, California intends to fight.
Trump Tentatively Agrees to Boost Biofuel Quota -- Donald Trump has tentatively agreed to a plan for bolstering ethanol and biodiesel, amid pressure from Midwest U.S. senators who warned the president that without action, he risks votes in next year’s election. The blueprint discussed in a meeting at the White House calls for the administration to make up for three years’ worth of waived biofuel quotas tied to the Environmental Protection Agency’s decision to exempt some oil refineries from annual blending requirements. That comes on top of other concessions that administration officials had already developed with the aim of encouraging greater U.S. demand for ethanol made from corn. The draft plan was described by people familiar with the matter who asked for anonymity because the deliberations are private. The deal could still unravel, as oil companies and allied senators seek to influence the final outcome and administration officials work to translate broad commitments into formal regulations. Green Plains Inc., a U.S. ethanol producer, tempered its losses after Bloomberg reported the White House deliberations. The shares fell as much as 4.9%, to $10.36, before recovering to $10.62 as of 1:16 p.m. in New York. Renewable Energy Group Inc., one of the largest U.S. biodiesel producers, erased earlier losses, gaining 0.8% to $15.46. Pacific Ethanol Inc. also tempered an earlier decline, rising to 75.61 cents a share. If the deal becomes final, the administration would begin reallocating waived quotas over multiple years, starting with 2020 targets. There is a narrow window for the Trump administration to codify the package of changes. The EPA is legally required to finalize 2020 biofuel-blending targets by Nov. 30, and any new, supplementary proposal must be submitted for public comment first.
Siouxland Energy leader says RFS waivers 'took the sails out' of industry - A leader at a northwest Iowa ethanol plant says after the Trump Administration granted ethanol waivers to oil refineries in August, the plant just could not continue operating.“Every one of them has hurt under the Trump Administration, but the last 31 were the final blow. In two days, ethanol prices dropped 18 to 20 cents…That just kind of took the sails out of the profitability of the ethanol industry,” said Kelly Niewenhuis, chairman of the board for Siouxland Energy in Sioux Center, which quit producing ethanol this week.Niewenhuis said they’re hoping the fix being worked on by the Trump Administration will help turn things around.“If we get the same response out of positive news that we got out of the negative news with the last round of small refinery exemptions and we get a 20-cent bounce in ethanol prices, it won’t take long to get this thing up and running again,” the Siouxland Energy board leader said. ‘ Niewenhuis said President Trump needs to keep his promise to farmers and the ethanol industry. Forty-two people have been working at the Sioux Center plant. Farmers in the area were annually selling Siouxland Energy 23.5 million bushels of corn for processing into ethanol.
Californians are buying up electric cars. But where will they plug in? - As a renter, Bruce Wolfe knows the struggles many people face driving an electric car when they lack access to a charging outlet at home. He parks on the street outside his Haight-Ashbury flat in San Francisco, which doesn’t have a garage. There aren’t any public charging stations in the neighborhood, so he charges in a parking lot outside the nonprofit where he works in Marin County. Wolfe said he can’t afford to rent an apartment that has a garage, at least not in San Francisco. Twice in the seven years he has driven electric cars, he’s run out of juice on the road and had to be towed to a charging station. “It becomes an economic justice issue and an equity issue,” Wolfe said of renters and their lack of access to car chargers. “People can’t run cables across the sidewalk.” His predicament illustrates gaps in California’s electric-vehicle charging infrastructure that clean-car advocates say could limit the state’s ability to transition from gas guzzlers — and hit its ambitious goals for limiting emissions that contribute to climate change. Californians are switching to electric cars in record numbers, putting the state on track to surpass its goal of having 1.5 million zero-emission vehicles on the road by 2025. But the plug-in infrastructure needed to support that switch is patchy. If nothing changes, the California Energy Commission projects the state could have about 81,600 fewer public and shared charging ports than it needs in five years. And that could be a low estimate: Electric-car sales could exceed the 2025 goal.
U.S. 'falling behind' in global race to develop electric vehicle supply chain - (Reuters) - The United States is losing the race to extract and refine minerals used to make electric vehicles and should do more to spur domestic production, a bipartisan group of senators said on Tuesday. The push comes as China has grown to dominate the market for lithium, rare earths, cobalt and other so-called strategic minerals used to make a plethora of consumer products, a dominance that politicians have said poses a strategic threat to the United States. The Senate’s Energy and Natural Resources Committee held a Tuesday hearing in part to keep the topic fresh in the national dialogue even as attention begins to lurch toward the 2020 presidential campaign. “China is consolidating control of the entire supply chain for clean technologies,” Senator Lisa Murkowski, the Alaskan Republican who is the chair of the Senate’s Energy and Natural Resources Committee, said. “The United States is falling behind ... and allowing that to happening is a strategic mistake.” The comments have become a kind of refrain for Murkowski, who so far this year has used her position as chair of the powerful committee to clamor for more attention to the topic.[nL2N22Q0ID Both Republican and Democratic committee members said they saw mining as crucial in order to deploy more solar, wind and other renewable technologies.
The oil industry vs. the electric car – -The oil industry is trying to crush the booming electric car movement.Groups backed by industry giants like Exxon Mobil and the Koch empire are waging a state-by-state, multimillion-dollar battle to squelch utilities’ plans to build charging stations across the country. Environmentalists call the fight a reprise of the “Who Killed the Electric Car?” battles that doomed an earlier generation of battery-driven vehicles in the 1990s.Oil-backed groups have challenged electric companies’ plans in 10 states, according to utility commission filings reviewed by POLITICO, waging regulatory and lobbying campaigns against the proposals. The showdown is taking place as utilities, eager to increase the demand for power, push for approval to build charging networks in locations such as shopping centers and rest stops in more than half the nation.“Fossil fuel interests control 90 percent of the transportation fuel market in the U.S. and are really feeling threatened,” said Gina Coplon-Newfield, director of the electric vehicle initiative at the Sierra Club.The counterattack involves an array of trade associations and industry-funded political groups representing every segment of the petroleum sector.In the Midwest, the American Fuel and Petrochemical Manufacturers, a trade group for gasoline makers, has filed comments against charging plans in Kansasand Missouri, and has opposed Colorado’s new zero-emission vehicle mandate as part of a “Freedom to Drive” coalition of auto dealers and oil groups. The typical consumer, they say, should not have to pay for incentives or charging stations that mainly benefit people wealthy enough to afford cars like Teslas. “We feel like we're on the side of the angels here in terms of wanting this to be a free market and not wanting people who don't use the service to have to pay for service,” said Derrick Morgan, senior vice president at the fuel and petrochemicals group.In Illinois and Iowa, the American Petroleum Institute joined with Americans for Prosperity — a political group funded by the Koch oil empire — to oppose utilities’ electric vehicle investments. The owner of a large refinery joined other industrial interests to oppose utility charging and shared mobility plans in Minnesota.In Massachusetts, API teamed with gasoline marketers and convenience stores to oppose an electric vehicle charging buildout from the utility National Grid. The Western States Petroleum Association has opposed utility charging plans in Arizona alongside AFP, as well as electric vehicle legislation in California. And in Maryland, API aligned with convenience stores, gasoline stations and truck-stop owners to oppose utilities’ electric vehicle plans.
Jeff Bezos unveils sweeping plan to tackle climate change, will buy 100,000 electric vans from Rivian - Amazon CEO Jeff Bezos unveiled a sweeping new plan to tackle climate change at an event held on Thursday at the National Press Club in Washington D.C. Bezos said Amazon has committed to meet the goals of the United Nations Paris Agreement 10 years early, which will involve regularly measuring and reporting the company’s emissions, implementing decarbonization strategies and altering its business strategies to eventually eliminate carbon altogether. As part of the plan, Amazon has agreed to purchase 100,000 electric delivery vans from vehicle manufacturer Rivian. Bezos’ appearance comes as Amazon faces mounting pressure from employees to address its environmental impact. At Amazon’s annual shareholder meeting in May, thousands of employees submitted a proposal asking Bezos to develop a comprehensive climate-change plan and reduce its carbon footprint, though it was ultimately rejected. The proposal was built on an employee letter published in April that accused Amazon of donating to climate-delaying legislators and urged the company to transition away from fossil fuels. Additionally, over 1,000 Amazon employees have said they plan to walk out on Sept. 20 as part of the Global Climate Strike, of which Google and Microsoft employees also plan to participate. The employee walkout represents the first strike at Amazon’s Seattle headquarters in the company’s 25-year history, according to Wired. The company has taken previous steps to address climate change. In February, Amazon announced it would make half of all its shipments carbon neutral by 2030 by using more eco-friendly packaging, using more renewable energy like wind power, as well as using electric vans for package deliveries. As part of that effort, which it calls “Shipment Zero,” Amazon said it would share its company-wide carbon footprint for the first time later this year.
China’S Grid Architect Proposes A “Made In China” Upgrade To North America’S Power System IEEE Spectrum - IEEE SpectrumTransmission lines in the United States and Canada require approval from every state and province traversed, and that political fragmentation hinders deployment of long power links of the type connecting vast swaths of territory in regions such as China, India, and Brazil. As a result, few studies detail how technologies that efficiently move power over thousands of kilometers, such as ultrahigh-voltage direct current (UHV DC) systems, might perform in North America. Earlier this week, the Beijing-based Global Energy Interconnection Development and Cooperation Organization (GEIDCO) stepped in to fill that gap, outlining an ambitious upgrade for North America’s grids. GEIDCO’s plan promises to greatly shrink North America’s carbon footprint, but its boldest prescriptions represent technical and economic optimizations that run counter to political interests and recent trends. “Thinking out of the box is how you solve complicated, difficult problems,” said former Southern California Edison CEO Ted Craver in response to the plan. But GEIDCO’s approach, he said, raises concerns about energy sovereignty that could prove difficult to settle. As Craver put it: “There’s theory and then there’s practice.”The proposed North American transmission scheme was unveiled on Tuesday at an international transmission forum in Vancouver, Canada, byLiu Zhenya, the former State Grid Corp. of China chairman who launched GEIDCO in 2016. While at State Grid, Liu championed the development of the world’s first 800- and 1,100-kilovolt UHV DC lines and the first 1,000-kV, UHV AC transmission. State Grid has deployed them to create a brawny hybrid AC-DC electricity system that taps far-flung energy resources to power China’s densely-populated and industrialized seaboard.
U.S. utilities file legal challenge to Trump power plant rule -(Reuters) - Con Edison and eight other U.S. utilities mostly from Democratic-led states have filed a legal challenge to the Trump administration’s plan to cut carbon emissions from power plants, which replaces a much tougher Obama-era rule.The New York-based power company said in a statement on Monday that the Affordable Clean Energy (ACE) rule undermines efforts already under way to reduce greenhouse gas emissions by investing in renewable energy, electric vehicle infrastructure and energy efficiency and other clean technologies.The group of utilities, which calls itself the Power Companies Climate Coalition, have already invested heavily in adopting those technologies because their state governments passed laws requiring them to adopt large amounts of renewable energy such as wind and solar. In addition to Con Ed, the coalition comprises Exelon Corp, National Grid, PG&E Corp, Public Service Enterprise Group Inc, Los Angeles Department of Water and Power, Seattle City Light, Sacramento Municipal Utility District and New York Power Authority. Together, they serve over 23 million customers in 49 states.A similar suit was filed by Democratic-led states and cities in August.
Anderson residents demand testing of particles falling from the skies around TVA's Bull Run plant - Unidentified particulate matter has been falling from the skies around the Tennessee Valley Authority’s coal-fired plant in Anderson County for nearly a week, residents have told Knox News. TVA says it has no idea why the unidentified substance is showing up on homes, cars, driveways and mailboxes in at least two neighborhoods located on opposite sides of a smokestack at its Bull Run Fossil Plant in the Claxton community. “Bull Run is equipped with state-of-the-art air emissions controls, including equipment to limit particulate matter,” TVA spokesman Scott Brooks said in an email. “Plant personnel have checked the equipment and did not find anything to indicate the substance in the photos/pictures is coming from the plant.” Knox News captured photographs of the particles on Monday. Anderson County Commission Chairman Tracy Wandell called for an environmental analysis on Monday. He lives in Claxton, and his truck, too, has been coated in an unidentified substance. His father-in-law, Doug Kelly, has been watching particles falling around his house for at least a week. “You can see little drops falling,” Kelly said. “It’s falling out on my car … You can see it on my driveway.” Kelly and Leo York – who lives on the opposite side of the smokestack from Kelly’s home – say they have called TDEC to complain and ask for an investigation. TVA says it will test the substance if someone provides the utility a sample. Kelly said he gave one to Wandell. Particulate matter — no matter the source material — is unhealthy to breathe. The smaller the particle size, the more dangerous because the lungs can’t expel it. The particles, and whatever chemicals make up the source material — stay in the body and get into the bloodstream, according to the Agency for Toxic Substances and Disease Registry, part of the U.S. Department of Health and Human Services. Residents told Knox News they're worried the particulate matter could contain coal ash. Coal ash waste – in all its forms – is made up of at least 26 toxins, heavy metals and radioactive materials, according to various reports by the Environmental Protection Agency, TDEC, TVA and Duke Energy. In its dry form, coal ash is considered “fine” in texture and its particle size is the tiniest on the regulatory scale, numerous studies have shown. TVA produces 1,500 tons of it daily at Bull Run.
Another Illinois coal plant is closing — the fifth announced in a month - One of the dirtiest coal plants in Illinois will close within the next three years, the latest sign that the lung-damaging, climate-changing source of electricity is on the way out in the United States.Shuttering the E.D. Edwards power plant south of Peoria resolves a federal lawsuit filed six years ago by local and national environmental groups, which documented how various owners had failed to install modern pollution-control equipment.A federal judge agreed those decisions led to dirtier air in communities near the Edwards plant and contributed to smog and soot problems in Chicago and other downwind cities.The legal settlement announced M onday comes less than a month after Vistra Energy, the most recent owner of the Edwards plant,announced it will close four other Illinois coal plants by the end of the year.
Coal declining at quicker clip than previously forecast, new report finds The country’s energy data center tempered forecasts for Western coal production as demand for the mineral declines nationwide and market uncertainty persists, according to a new report released Tuesday by the Energy Information Administration. Just one month ago, the agency expected the Western coal supply to total 369 million tons this year and drop to 356 million in tonsin 2020. But the most recent report cut supplies projections for next year by 5 percent, or nearly 18 million tons, a sign that coal market instability could be sticking around for the foreseeable future. This year’s coal supply projections were trimmed compared to last month’s too. The more conservative predictions cast an ominous cloud of uncertainty over Wyoming’s Powder River Basin, one of the top sources for coal nationwide.
Year After Florence, Coal Ash Still a Concern in North Carolina -Hurricane Florence made landfall in North Carolina a year ago today. And while its winds were only Category 1-force, its record rainfall and floodwaters caused major devastation—especially to coal ash ponds, which can contain toxins like mercury and lead. This toxic sludge can pose a major public health threat if it reaches waterways or nearby communities.A year later, the state of North Carolina has made strides cleaning up these toxic sites, but advocates argue a lot of work remains.The toxic tragedy began well after Hurricane Florence hit the coast. Floodwaters stayed high, and in many places rose more than a week after the hurricane made landfall. All that water eventually caused a dam to break at Lake Sutton, which is next to a former coal plant with a coal ash pond operated by Duke Energy. The water breached the pond’s retaining wall and released the mixture into surface water, which flowed into the Cape Fear River. A study by Duke University researchers confirmed that fact—which was previously a source of debate—earlier this year in a peer-reviewed study. The North Carolina Department of Environmental Quality found that in the immediate aftermath, tests showed metal contents in the river were below state thresholdsoutside of copper (which could have come from elsewhere). Coal ash was a problem in the state before Hurricane Florence, so the company had already begun the process of cleaning up. Still, the hurricane underscored the dangers of coal ash, Frank Holleman, a senior attorney at the Southern Environmental Law Center, told Earther. A certain level of urgency followed the fallout of Florence—an urgency that was much needed and much delayed.“Even when the weather is good, these sites are dangerous.” Holleman said. “But when the weather is bad, there’s an even greater risk.” Duke Energy has cleaned up the cooling pond at its Sutton Plant since Florence, as well as another two coal ash basins, company spokesperson Bill Norton told Earther. Eight basins have been excavated in total, amounting to some 20 million tons of coal ash. That includes 5 million tons in the last year alone, he said.
Timeline for Briefs Set in Blackjewel ‘Hot Goods’ Case, Miner Pay Remains Murky - Frank Volk, chief U.S. bankruptcy judge for the Southern District of West Virginia, gave the Labor Department, Blackjewel and Blackjewel Marketing and Sales (BJMS) — buyer of the disputed coal — until Sept. 23 to submit a series of briefs to the court. A final set of briefs is due Oct. 1.Volk said he expects to review the documents “swiftly” and rule soon after whether the coal should remain sitting until the Blackjewel workers who mined it are fully paid, or if it can be sold.While the timeline provides some clarity about the future of the coal in question, Friday’s hearing highlighted continued uncertainty about if and how hundreds of miners across the region will be paid millions of dollars in owed wages. The Labor Department says the coal is “hot goods.” Under the federal Fair Labor Standard Act, workers must be paid at least minimum wage or the things they produce can’t legally be moved or sold. More than 1,000 former Blackjewel employees across West Virginia, Kentucky and Virginia are still awaiting their final paychecks more than two months after the company declared bankruptcy. “The FLSA has put the prohibition in place to discourage employers from benefiting from the uncompensated work of the employees,” Samantha Thomas, associate regional solicitor for the Labor Department, told the court during the Friday status hearing. “It's about making sure that employers that actually abide by the law are not unfairly treated — because here's BJMS and Blackjewel being able to profit off of the fact that [sic] they’re able to move coal that they didn't really pay for in terms of workers being paid for their work.”Volk asked the Department of Labor about its “end game” for the coal sitting on the tracks. Thomas said that in the case the judge does affirm the coal cannot be moved, the agency would hope Blackjewel, BJMS or “another party” would step up and pay the owed wages so the coal would no longer be considered “hot goods.”
Coal, and the Harlan County Coal Miners Who Blocked a Train Over Bankrupt Blackjewel’s Wage Theft - - Lambert Strether - I want to start by recommending the Trillbilly Worker’s Party podcast, from Whitesburg, KY, not least because Whitesburg is in Letcher County, which is adjacent to Harlan County, where the unpaid miners blocked the train. and the podcast was on the story from the beginning. BothRolling Stone and the New Yorker have done some good reporting on the ground. Summarizing the basics: In July 29, coal miners in Cumberland, Kentucky began blocking a train carrying more than $1 million worth of coal to protest their former employer, Blackjewel LLC, which declared bankruptcy on July 1. According to CNN, the company wrote bad checks to 350 miners in Harlan County alone, prompting the workers to stage the protest to demand their paychecks.(Cumberland is in storied Harlan County, site of the “Harlan County War” of 1931-1939, in which the workers finally won the right to organize). More about this century’s protest shortly. Back to the podcast: “Bonus Episode: Voices of the Harlan County Coal Blockade” was made a few days after the miners blocked the train; “Episode 111: Someone’s Goin to Hell, and Someone’s Goin to Jail” covers electoral politics, fatally skewering Amy McGrath, who Chuck Schumer recruited to run against McConnell; and “Episode 112: No One Agency Should Have All That POWER,” with scathing views of consultants and the NGO ecology — close reading of grant proposals[1]! — and out-of-state liberals. In tone the Trillbillies are something like Chapo, but in substance, modulo the banter and the giggling, a lot more rigorous. Very very dark and very very dry, and the darkness and dryness is earned. All this being a round-about way of saying that I would have to listen to this podcast for many more hours — heaven forfend there should be automagically generated transcripts by podcast providers — to really feel I have any understanding of Harlan County at all. For example, the third a in “Appalachia” is not long. Who knew? All this said, I want to do four things to put the Harlan County Train Blockage in context. First, I’ll look at climate and the coal industry. Then I will look at the actual train blockage itself, the industrial action. Next, I’ll look at why the anarchist trans activists (really) left the protest. Finally, I’ll look at the ridiculous and exploitative Democrat Amy McGrath, who is those things even if she is raking in the bucks. Hopefully, as this story develops, these perspectives will be useful.
Mine sale, stockpiled coal resolution are stalled - An ongoing dispute over coal stockpiled at Blackjewel LLC sites has all but halted other proceedings in the company’s Chapter 11 bankruptcy case. Among matters stalled by the dispute, and by other factors, is the pending sale of Blackjewel’s Lone Mountain and Black Mountain assets to Tennessee-based Kopper Glo Mining LLC. Meanwhile, Kopper Glo has sweetened its offer by $1 million in the form of compensation for miners displaced by Blackjewel’s July 1 shutdown. During early August auctions, Kopper Glo was the successful bidder for the Lone Mountain/Black Mountain properties, which contain assets in Wise and Lee counties along with Harlan and Letcher counties in Kentucky. At that time, the company offered $6.35 million in cash, per-ton royalties of $9.1 million over six years and assumption of “asset retirement” obligations estimated at $38.4 million. But weeks later, a different bidder, Kentucky-based Coking Coal LLC, filed an objection to the terms of the proposed Kopper Glo sale. Coking Coal bid on Blackjewel’s Pardee mine complex and associated properties, including the Fork Ridge mine; the Band Mill refuse facility; the Pardee prep plant; Pardee Strip #1; Meadow Branch #1; and Trace Fork #1. Coking Coal asked the bankruptcy court in West Virginia to delay or add conditions to Kopper Glo’s purchase of the Lone Mountain/Black Mountain assets. Coking Coal said it wants a lease or other rights of access to those assets so that it can reach properties owned by Penn Virginia Operating Co. LLC. But attorneys for Blackjewel argue that this demand is “directly contrary” to assurances Coking Coal made in August. Meanwhile, attorneys for Blackjewel and affiliated companies filed a new proposed order for sale of Lone Mountain/Black Mountain to INMET Mining LLC, a Kopper Glo affiliate. Along with the previous terms, INMET/Kopper Glo now offers to pay displaced Lone Mountain/Black Mountain miners’ unpaid wages, with $450,000 to be paid at the sale closing and another $550,000 to be paid from royalties over two years.
Laid off and owed pay: the Kentucky miners blocking coal trains - - Harlan county, Kentucky, earned the nickname “Bloody Harlan” from a series of labor strikes and violent confrontations in the 1930s led by coalminers and union organizers against coal corporations and law enforcement. In 1973, Harlan’s coalminers went on strike for 13 months when contract negotiations with Duke Power Company broke down after miners voted to form a union. There are no longer any unionized mines in Kentucky, but Harlan’s miners are currently continuing the region’s legacy of labor struggles against wealthy and powerful coal corporations: they are blocking the coal trains from leaving a mine that laid them off. A collection of tents next to some rail tracks may not look like much compared to that rich legacy of labor struggle. A small group of families have occupied the site since 29 July, sitting on camp chairs, occasionally hosting live music and attracting sympathetic supporters from all over the US. The small protest has endured for more than six weeks now, garnering nationwide attention – including a video of support from the Democratic presidential candidate Bernie Sanders – and preventing trains carrying more than $1m worth of coal from being moved out of Harlan county until workers are compensated for the unpaid wages they’re owed since mining firm Blackjewel filed for bankruptcy. About 1,700 coalminers in West Virginia, Virginia, Kentucky and Wyoming were laid off without any notice on 1 July when Revelation Energy and it’s affiliate, Blackjewel Coal Company, filed for Chapter 11 bankruptcy. Unlike other bankruptcies in the coal industry, Blackjewel’s mines have been shut down during proceedings in court and workers experienced previous paychecks and 401k deductions bouncing from their bank accounts, while owed wages were left unpaid. “With my husband’s checks, they owe him $6,000,” said Stacy Rowe, who has helped run the Blackjewel blockade since it began. A class action lawsuit was filed in July 2019 against Blackjewel for violating the Warn Act, which mandates companies must provide workers with a 60-day written notice in advance of any mass layoffs of 100 or more employees.
Paychecks Cut For W.Va. Blackjewel Miners; KY And VA Miners Still Waiting - West Virginia employees of coal operator Blackjewel LLC have received their final paychecks more than two months after the company declared bankruptcy on July 1.In an agreement reached last week between the Department of Labor and the company, Blackjewel cut paper checks for all owed wages to a few dozen employees working at the company’s Pax Mine in Fayette County, West Virginia. While good news for former West Virginia employees, about 1,000 miners in Kentucky and Virginia are still owed millions of dollars in back wages. Christina Burgess’ husband, Greg, ran heavy equipment at the Pax Mine. The 20-year coal mining veteran had been laid off before, but the family had never before experienced the fallout from a paycheck bouncing, as Greg’s did in early July. The Burgess family received Greg’s owed wages late last week, but is still waiting for the check to clear a bank hold. Blackjewel’s bad check created a series of challenges. The first few unemployment checks the family received went straight to the bank to get the account out of the red. In total, Christina said Blackjewel’s bankruptcy has cost her family about $3,000 in penalties and fees.Christina said she empathizes with younger miners who were hit hard by Blackjewel’s sudden bankruptcy. As one of the administrators for the Blackjewel Employees Stand Together Facebook group, she has heard many stories of families unable to pay their bills as a result of not being paid by Blackjewel. She expects the fallout from Blackjewel’s bad checks to have long-term consequences as well.
West Virginia DEP OKs construction permit for coal-to-liquids facility in Mason County - WCHS— A proposed coal-to-liquids facility in Mason County has been granted a construction permit by the West Virginia Department of Environmental Protection, the company said. Domestic Synthetic Fuels said in a news release the plant to be built near Point Pleasant in Mason County will create 130 direct jobs on site, and 130 coal mining jobs to supply the facility with raw materials. Thousands of construction workers will be needed to build the facility. The approval of the permit follows a public comment period and public meetings. At a public meeting July 30 in Point Pleasant, some people expressed concern about possible health risks from the $1.2 billion project, while others lauded the project for its direct and indirect economic benefits. Company officials said the facility will turn West Virginia coal and natural gas into ultra-low sulfur diesel fuel, aviation fuel, gasoline and other value-added products. Construction is expected to begin in October 2019 and be finished in three years.
The Day - Millstone, utilities finalize 10-year contract - — State regulators recently approved a 10-year contract between the owner of Millstone Power Station and utility companies, effectively ending the yearslong political, regulatory and environmental battles to keep the plant operational. Gov. Ned Lamont, who stepped in earlier this year to help secure a deal between haggling Dominion Energy, Eversource and United Illuminating, applauded the finalized contract in a news release Wednesday. “Had this contract not gone forward, the facility would be in danger of closing down, which would have increased greenhouse gas emissions by 25 percent across the New England region,” said Lamont, who recently pushed for all of the state’s energy to come from clean sources by 2040. “Now we can renew our focus on offshore wind and other renewable energy resources.” The contract calls on the utilities to buy half the plant’s output over the next decade. The price per kilowatt hour in the contract has not yet been released to the public, according to Dominion spokesman Ken Holt. Department of Energy and Environmental Protection spokeswoman Kristina Rozek said pricing will be available 90 days after contract approval, unless Dominion chooses to release it sooner. Facing high maintenance and security costs and stiff competition from natural gas, Virginia-based Dominion had threatened to shutter the 2,100-megawatt Millstone unless the state let it compete against higher-priced solar, wind and hydropower. Nuclear plants in New York, Illinois and New Jersey have faced early retirement before lawmakers in those states approved subsidies. Dominion closed Kewaunee Power Station in Wisconsin in 2013.
Ending MOX better for S.C. nuclear disposal than keeping it, feds say in Supreme Court - The death of the over-budget and past-due Mixed Oxide Fuel Fabrication Facility was more a blessing than a curse, the federal government argued in a recent Supreme Court brief, at the same time urging the high court to dismiss South Carolina's petition for legal review. Ending the MOX project – never completed, more than a decade in the making and costing billions of dollars – actually lessens nuclear repercussions in the Palmetto State, according to the federal government's Sept. 11 court filing."Indeed, the decision to halt construction of the MOX facility reduces the likelihood of injury by allowing the department to focus its resources on other disposal methods that can begin more quickly and with greater certainty," it reads in part. MOX was nixed in October 2018 by the U.S. Department of Energy's semiautonomous weapons and nonproliferation agency, the National Nuclear Security Administration. The facility was being built at the Savannah River Site, a sprawling nuclear reserve directly south of Aiken and hours northwest of Charleston.The NNSA's chop landed five months after U.S. Secretary of Energy Rick Perry informed congressional defense committees of his intent to terminate the already halting venture.South Carolina officials have often argued that ending MOX would render the state a toxic waste dump. But the secretary's decision to abandon the facility does not equate to the abandonment of nuclear material in South Carolina, the federal government stated in its brief. MOX, the product of a 2000s-era pact between the U.S. and Russia, was meant to turn 34 metric tons of weapons-grade plutonium into nuclear fuel. While many metric tons of surplus plutonium are right now kept at the Savannah River Site, only some of the cache was destined for MOX, an administration official told the Aiken Standard earlier this year.A majority of the the MOX-bound defense plutonium never reached SRS, the same official said.
Agency could keep Three Mile Island nuclear debris in Idaho - (AP) — The partially melted reactor core from the worst nuclear accident in U.S. history could remain in Idaho for another 20 years if regulators finalize a license extension sought by the U.S. Energy Department, officials said Monday. The core from Three Mile Island in Pennsylvania partially melted in 1979, an event that changed the way Americans view nuclear technology. The U.S. Nuclear Regulatory Commission has determined there would be no significant impact from extending the license to store the core at the 890-square-mile (2,305-square-kilometer) site that includes Idaho National Laboratory. The agency would also have to complete a safety evaluation report before renewing the license. The Energy Department site sits atop the Eastern Snake Plain Aquifer, a Lake Erie-size underground body of water that supplies cities and farms in the region with water. The new license would be good through 2039, four years past a deadline the Energy Department initially set with Idaho to remove the radioactive waste. State and federal officials say the waste could still be shipped out of Idaho ahead of the 2035 deadline and would not affect the 1995 agreement that contains penalties for missed deadlines. Idaho is already fining the Energy Department for missing a deadline involving radioactive liquid waste stored at the site. It's not clear where the Three Mile Island waste could be moved, as the U.S. doesn't have a designated repository.
Fukushima's Radioactive Water Crisis --- Tokyo Electric Power’s Fukushima Daiichi Nuclear Power Station, which experienced three massive meltdowns in 2011, is running out of room to store radioactive water. No surprise! But now, what to do about phosphorescent water? Addressing the issue, Japan’s environmental minister Yoshiaki Harada held a news conference (September 2019). Unfortunately, he proffered the following advice: “The only option will be to drain it into the sea and dilute it.” (Source: Justin McCurry in Tokyo, Fukushima: Japan Will Have to Dump Radioactive Water Into Pacific, Minister Says, The Guardian, Sept. 10, 2019) “The only option”… Really? Over the past 8 years, Tokyo Electric Power (TEPCO) has scrambled like a Mad Hatter to construct emergency storage tanks (1,000) to contain upwards of one million tonnes of contaminated radioactive water, you know, the kind of stuff that, over time, destroys human cells, alters DNA, causes cancer, or produces something like the horrific disfigured creature in John Carpenter’s The Thing! That’s the upshot of a triple nuclear meltdown that necessitates constant flow of water to prevent further melting of reactor cores that have been decimated and transfigured into corium or melted blobs. It’s the closest to a full-blown “china syndrome” in all of human history. Whew! Although, the truth is it’ll be a dicey situation for decades to come. Ever since March 11, 2011, TEPCO has scrambled to build storage tanks to prevent massive amounts of radioactive water from pouring into the ocean (still, some lesser amounts pour into the ocean every day by day). Now the government is floating a trial balloon in public that, once the tanks are full, it’ll be okay to dump the radioactive water into the ocean. Their logic is bizarre, meaning, on the one hand, the meltdown happens, and they build storage tanks to contain the radioactive water, but on the other hand, once the storage tanks run out of space, it’s okay to dump radioactive water into the ocean. Seriously? Meantime, the Fukushima meltdown brings the world community face to face with TEPCO and the government of Japan in an unprecedented grand experiment that, so far, has failed miserably. Of course, dumping radiation into the Pacific is like dumping radiation into everybody’s back yard. But, for starters, isn’t that a non-starter? Along the way, deceit breeds duplicity, as the aforementioned Guardian article says the Japanese government claims only one (1) death has been associated with the Fukushima meltdown but keep that number in mind. Reliable sources in Japan claim otherwise, as explained in previous articles on the subject, for example, “Fukushima Darkness, Part Two” d/d November 24, 2017, and as highlighted further on in this article. When it comes to nuclear accidents, cover-ups reign supreme; you can count on it.
New Study Documents Depleted Uranium Impacts on Children in Iraq - In the years following 2003, the U.S. military dotted Iraq with over 500 military bases, many of them close to Iraqi cities. These cities suffered the impacts of bombs, bullets, chemical and other weapons, but also the environmental damage of open burn pits on U.S. bases, abandoned tanks and trucks, and the storage of weapons on U.S. bases, including depleted uranium weapons. Here’s a map of some of the U.S. bases: This map and the other illustrations below have been provided by Mozhgan Savabieasfahani, one of the authors of a forthcoming article in the journal Environmental Pollution. The article documents the results of a study undertaken in Nasiriyah near Tallil Air Base. Nasiriyah was bombed by the U.S. military in 2003 and in the early 1990s. Open-air burn pits were used at Tallil Air Base beginning in 2003. See a second map: Now take a look (do not turn away) at these images of infants who were born between August and September of 2016 to parents who had continuously lived in Nasiriyah. The visible birth defects include: anencephaly (A1 and A2 , B), lower limb anomalies (C), hydrocephalus (D), spina bifida (E), and multiple anomalies (F, G, H). Imagine if these tragic birth defects had been caused by a natural disaster or the misdeeds of the next government targeted by the United States for “regime change” — would not the outrage be widespread and thunderous? But these horrors have a different cause. Here’s another illustration, of hand and foot abnormalities in children in Nasiriyah, and in the ancient city of Ur, near the U.S. base: The study now being published found an inverse relationship between the distance one lived from Tallil Air Base and the risk of birth defects as well as of levels of thorium and uranium in one’s hair. It found a positive relationship between the presence of thorium and uranium and the presence of birth defect(s). Thorium is a decay-product of depleted uranium, and a radioactive compound. These results were found near this particular base rather than dozens of others, not because it is necessarily unique; no similar studies have yet been conducted near each of the other bases. The results found by this study are likely to be identical to results that could be found by a similar study next year, or next decade, or next century, or next millennium, at least in the absence of major efforts to mitigate the damage. The use of these weapons was a small part of the damage done to Iraq, its people, its society, and its natural environment by the war. We ought not to require any legal case before offering aid and making reparations. Basic human decency ought to suffice.
5 Permits Awarded for Utica-Point Pleasant Drilling - Five permits for drilling in the Utica-Point Pleasant shale were issued by the Ohio Department of Natural Resources in the week ended Sept. 14, the agency reports. Four were granted to Ascent Resources Utica: two each in Belmont and Harrison counties. The other permit was awarded to Utica Resource Operating for a well in Guernsey County. No permits were awarded in Mahoning, Trumbull or Columbiana county, nor were any granted by the Pennsylvania Department of Environmental Protection in Lawrence or Mercer counties. Through the end of last week, the ODNR reported 14 active rigs in the Utica-Point Pleasant shale play. For horizontal drilling, 3,162 permits have been issued to date with 2,694 wells drilled.
DC Circuit Rejects Requests to Vacate FERC Authorization for Nexus Pipeline, Remands for Explanation on Use of Foreign Precedent Agreements in Project Need Determination . On September 6, 2019, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) dismissed the City of Oberlin, Ohio’s and the Coalition to Reroute Nexus’s (collectively, “Petitioners”) request to vacate FERC’s authorization of Nexus Gas Transmission, LLC’s (“Nexus”) to (1) construct and operate an interstate natural gas pipeline through parts of Ohio and Michigan; and (2) use eminent domain to acquire any necessary rights of way to complete the project (see December 18, 2018 edition of the WER). The D.C. Circuit agreed with Petitioners, however, that the Commission failed to adequately substantiate its finding that it lawfully credited Nexus’s precedent agreements—under which shippers agree to enter into service agreements once the pipeline is built—with foreign shippers serving foreign customers as evidence of market demand for the interstate pipeline. As a result, the D.C. Circuit remanded this issue to the Commission, without vacatur, for further explanation of the decision. In determining that Nexus’ project was in the public convenience and necessity, the Commission (1) found that Nexus’s precedent agreements were “the best evidence” that the pipeline served unmet market demand; (2) approved Nexus’s proposed 14% return on equity (“ROE”), subject to the condition that Nexus design its initial customer rate based on a hypothetical capital structure of 50% equity and 50% debt; and (3) found that the pipeline does not “represent a significant safety risk to the public.” Following the Commission’s authorization, the U.S. District Court for the Northern District of Ohio found that Nexus had the right to exercise eminent domain to condemn certain easements over Petitioners’ properties, and Nexus subsequently exercised that right. In response, Petitioners asked the D.C. Circuit to vacate the Commission’s order granting Nexus an NGA section 7 certificate, along with its orders on rehearing.
Court questions pipeline land grab— Why was building a pipeline that exported some of its natural gas to Canada enough to justify taking property away from land owners using eminent domain? The decision to construct the NEXUS natural gas pipeline is still being challenged, even though the pipeline has been operating in Erie County and across much of Ohio since 2018. Earlier this month, the District of Columbia Court of Appeals ruled in favor of the landowners who opposed the pipeline. On Sept. 6, the court ordered the Federal Energy Regulatory Commission to answer why the pipeline was needed that it required the use of eminent domain, a government power to seize land for public use. Robert Wheeler of Milan, one of the local landowners who battled the pipeline, said he hopes the ruling will help other landowners defending their rights. “Obviously, the pipeline’s there to stay,” he said. “It’s not going to go away.” Property rights are a guarantee of the U.S. Constitution, but using eminent domain to take property is one way around that. David A. Mucklow, an Akron attorney who represented landowners opposing NEXUS, said technically the court still could vacate the FERC’s order, shutting down the gas pipeline. But that appears to be unlikely. Probably the best case scenario is that landowners will get further compensation, he said.
Fracking to Begin in Oil Reservoir Found Beneath Brukner Nature Preserve - Oil and Gas Development Company Limited Inc. (OGDCLI) has recently filed for permits to lease the entirety of Brukner Nature Preserve to begin fracking on a massive, newly discovered oil and gas reservoir. According to OGDCLI’s statement, the oil and gas reservoir is one of the largest deposits in the entire world. The deposit makes the Miami County one of the top 25 leading natural gas producing sites on earth, replacing Uzbekistan as the number 15. A joint venture comprising of OGDCLI and Troy’s Walnut Society plans to begin fracking operations in fall of 2019. Fracking, or hydraulic fracturing, is the controversial process of forcing a cocktail of water and chemicals into rock to widen fissures, enabling natural gas to be extracted. For years, environmental groups, tribes and other opponents have raised flags about frackingencroaching on Bruckner Nature Preserve, a major center of historic Miami County culture and heritage.“People complain about gas prices all of the time. Maybe they should be careful what they wish for,” stated OGDCLI CEO Tyson McGreenahan. “Fracking happens everywhere. Now that it’s happening in Miami County’s backyard, of course everyone is up in arms.” Bruckner Nature Preserve sits in the central basin of the Miami Valley, an area that’s booming with shale gas extraction. Roughly 90 percent of the Brukner Nature Preserve is already leased for oil and gas development, but more fossil fuels lie beneath those lands. OGDCLI wants to sell parcels of land that are along the park’s 10-mile, no drilling buffer zone. “You can’t monetize nature,” said Shelly Smythe of Miami Conservational. “Actually, you can, but it’s wrong. We need to protect Bruker Nature Preserve.” Miami Conservational will open a protest period in the Brukner Nature Center’s parking lot beginning September 2nd, with intent to “stay put until OGDCLI ceases plans for fracking.”
Report: Secret Fracking Chemicals a Concern for Ohio - — Troubling information has been uncovered about the use of so-called classified chemicals in fracking operations in Ohio. Using mapping and data analysis by FracTracker Alliance, new research from the Partnership for Policy Integrity shows the oil and gas industry injected potentially toxic chemicals more than 11,000 times into roughly 1,400 fracking wells between 2013 and 2018.Report author Dusty Horwitt, senior council at the Partnership, said there’s cause for concern."EPA regulators have found that many secret chemicals have health risks,” Horwitt said. “And there are multiple potential pathways of exposure, including leaks and spills, underground migration, also road-spreading of these chemicals.” Ohio law allows well owners to conceal chemical formulas as trade secrets, which Silverio Caggiano, battalion chief at the Youngstown Fire Department, said ties the hands of first responders who need to act fast in a spill or explosion. "We depend upon being able to quantify and qualify the product that we're dealing with so we know how to mitigate it,” Caggiano said. “If I don't know what it is, I can't identify its physical properties and how I'm going to take care of it, or how to protect people." The industry has claimed trade-secret provisions prevent competitors from stealing their formulas. Horwitt countered there is a way for companies to protect their chemical information without keeping the public in the dark. "Drilling companies can make their chemical identities available to the public in a random list, so that their competitors would not be able to reverse-engineer that list of chemicals into the products that they're putting into their wells,” Horwitt said. Caggiano said he isn't opposed to fracking, but feels the industry is being given a free pass.
What's in fracking chemicals? Energy nonprofit demands answers - Ohioans could be exposed to dangerous chemicals that state laws don’t require drilling and fracking companies using them to disclose, according to a report issued by a nonprofit organization.“Ohio and 28 other states have enacted rules that require some public disclosure of fracking chemicals. However, most if not all of these rules have exceptions that allow well owners to withhold chemical identities as trade secrets,” according to a report by the Partnership for Policy Integrity, a group based in Pelham, Massachusetts, that specializes in energy policy. “We looked at Ohio’s records and found trade-secret chemicals being used extensively in eastern Ohio in oil and natural gas wells, which could be some of the same trade-secret chemicals that the (U.S. Environmental Protection Agency) has health concerns about. We can’t say that definitively because the identities are secret,” said senior counsel Dusty Horwitt, who wrote the report.“But it’s entirely possible that some of these chemicals could have effects that EPA identified like neurotoxicity, developmental toxicity, lung toxicity, kidney toxicity and liver toxicity,” Horwitt said. “People need to know. People have a right to know, and first responders have a right to know if they might be exposed to those types of chemicals.”Well drillers sometimes use a process known as hydraulic fracturing, or “fracking,” in which they inject sand, water and chemicals to fracture rock layers deep below the surface to release oil and gas trapped within them. They injected secret chemicals 10,992 times into 1,432 wells in Ohio between 2013 and 2018, according to the report. The Ohio Oil and Gas Association characterized the recommendations in the report as “recycled.” The concerns broached in the report “were addressed way back in 2012 before shale development began, with support from the Ohio Oil and Gas Association,” through Senate Bill 315.
Trade Secret: Oil And Gas Companies Won't Say What's In Their Fracking Chemicals – WOSU --A new analysis by the nonprofit Partnership for Policy Integrity finds that "trade secret" chemicals were injected into gas and oil wells nearly 11,000 times in Ohio during a five-year period. Some first responders like Silverio Caggiano, fire battalion chief with the Youngstown Fire Department, are concerned that this is leaving the public at risk in emergencies. Caggiano has been a hazardous materials technician for more than 28 years and was an original member of the Ohio Hazardous Materials and Weapons of Mass Destruction Technical Advisory Committee. He says his hazmat team usually gets a warm welcome from local industries that use potentially dangerous chemicals. Most want to coordinate emergency planning. "When we get to a facility, we’re used to, ‘Here’s everything we got. You guys are the rock stars, help us out,’" Caggiano said. Emergency planning ensures that if there’s an explosion or a fire, the hazmat team knows what chemicals are used at a facility, and how to respond. But according to Caggiano, oil and gas companies aren’t interested in sharing information about all their chemicals with the local hazmat team."Fracking is a whole different deal," he said. "We’ve made attempts many times to talk to these frack industries and they don’t want to work with you." Fracking companies use chemicals for everything from limiting the growth of bacteria, to preventing corrosion of well casings. Ohio laws enacted in 2010 and 2012 require drillers to disclose the chemicals they use. But, there’s a loophole: Oil and gas companies don’t have to identify chemicals they consider trade secrets."Partnership for Policy Integrity analyzed state data and found that between 2013-2018, well owners injected undisclosed chemicals nearly 11,000 times at more than 1,400 wells in Ohio. The report was funded in part by the Park Foundation, which also funds The Allegheny Front. Adam Schroeder, a spokesperson for the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management, said in a recorded audio statement, "Owners are required to disclose product by supplier trade name, chemical name and maximum concentration. An owner may designate certain information as trade secret and withhold it from reporting." "The state can access information from well owners if there’s a spill or other emergency," he said. "Critical safety information is always available and any additional information can be requested and accessed if necessary."But Caggiano calls this a "pseudo disclosure." That’s because in an emergency, Caggiano says he doesn’t have time to send an email to ODNR and wait for a response. His hazmat team needs to know immediately whether to use water to put out a fire, or something else. Caggiano gives the example of a gas well fire in Monroe County in 2014. It took days for the state to provide chemical information.
Marcellus and Utica Shales in the US, 2019-Gas Shales Market Analysis and Outlook to 2023 - The US Appalachian Basin located in Pennsylvania, Ohio, West Virginia and New York continues to be the driver in natural gas production within the United States. During May 2019, it produced around 31 billion cubic feet per day (Bcfd) and is forecast to reach a rate of approximately 35 Bcfd by the end of 2019. The basin comprises the two main formations – the Marcellus, and the Utica. The majority of the activity in the Marcellus continues to take place in north east and south west Pennsylvania while the hotspot for the Utica is in eastern Ohio. Fracking activity in the Marcellus and Utica formations is driven by the large demand for natural gas from the nearby populated areas and although natural gas prices have experienced some volatility during recent years, Appalachian producers are generally able to sell their natural gas at a premium in trading hubs located in the North East. The competitive landscape of the Marcellus play is largely dominated by EQT Corp., the largest natural gas producer in the US, whereas, Ascent Resources LLC and Gulfport Energy Corp. lead the natural gas production in the Utica play. Browse more detail information about this report here: The report analyzes the natural gas appraisal and production activities in the Marcellus and Utica shale plays. The scope of the report includes –– Comprehensive analysis of natural gas production across major counties in Pennsylvania, West Virginia, Ohio, and New York during 2013-2018, as well as production outlook from 2019 to 2023
– In-depth information of well permits issued in the Pennsylvania region of the Marcellus and Utica shale, by county and by company from January 2018 to March 2019
– Detailed understanding of IP rates and type well profiles in Marcellus and Utica formations
– Exhaustive analysis of competitive landscape in the Marcellus and Utica shale in terms of net acreage, gross production, cost trends and planned investments.
– Comparison of type well economic metrics of major players were also analyzed
Environmental groups continue push to investigate link to fracking and childhood cancer –— TV news video- Three environmental groups point to published research that link the fracking industry with chronic illnesses and they continue to suspect a deeper concern related to childhood cancer rates. FracTracker, Southwest Pennsylvania Environmental Health and Center for Coalfield Justice held their most recent community information meeting to create awareness. "We know that fracking poses a health risk and we don't know what that health risk is," says Heaven Sensky, of Center for Coalfield Justice. Several dozen residents attended the most recent information session at Cannonsburg Middle School. It covered everything, from the basics of fracking, to the various ways air and water are adversely affected by malfunctions and oversight. This was the most recent in a series of meetings in southwestern Pennsylvania, with more scheduled for the immediate future, says Sensky, "We're not getting answers from our industry leaders or our elected officials. We started there. We started with asking questions."
PUC says no leak or damage to line after latest sinkhole along Mariner East 2 in Delaware County - A five foot by eight foot hole in the ground opened up in a park in Middletown Township in Delaware County on Friday, exposing part of the Mariner East pipeline that transports natural gas liquids. Eric Friedman lives in the area and saw what happened. “The particular sinkhole that I saw was near the intersection of Valley Road and Forge Road, in Sleighton Park, just a few feet away from nearby residences and a few feet away from soccer fields in places where children play,” Friedman said. The Pennsylvania Department of Environmental Protection said heavy rain caused the hole, and that there was no contamination or environmental impact. The gas company Sunoco filled in the hole Friday afternoon and the Pennsylvania Public Utility Commission started a safety investigation. The PUC said in a news release that the sinkhole occurred in the right of way for a 12-inch steel pipeline that moves “highly volatile liquids (HVLs) and petroleum products” along Sunoco’s Mariner East pipeline system. The sinkhole was near construction work for Mariner East 2, and near “several other pipelines,” the PUC said. The agency added that no leaks or injuries were reported. The PUC said initial indications are that the pipeline was exposed by the sinkhole, but that there were no “integrity issues” with the line. The Mariner East project has resulted in multiple sinkholes in the densely populated Philadelphia suburbs, including Chester and Delaware counties.
Exclusive: Antero to idle pioneering wastewater treatment plant that opened two years ago - — The Antero Clearwater Facility near Greenwood has been idled and has stopped receiving water while it undergoes a cost-effectiveness evaluation. The plant cleans water that has been used in fracking so it can safely be reused. Antero Resources Chief Administrative Officer and Regional Senior Vice President Al Schopp said the evaluation will help determine if it is the best, most cost-effective way to of dealing with the water. “(It’s) to determine what is the best thing going forward. The plant is not being shut down by any stretch of imagination. ...The price of oil is low right row, and we need to be looking at every aspect of business, and this is one that we are looking at,” he said.Schopp said injecting used water into a disposal well or reusing water in depletion operations are other industry alternatives, and the evaluation will help determine how the plant compares to other options.“We just need to see if there are ways to make the plant more efficient and to make it more competitive with the other methods,” he said.The Doddridge County facility can treat a maximum capacity of up to 40,000 barrels of water a day. For the last year, it has been treating between 20,000 and the maximum each day.Schopp added the plant is safe and free of both safety and environmental issues. The idle will not impact any other operations or programs at Antero.
Pipeline protester found not guilty of assaulting security guard — An assault charge against a Giles County man involved in protesting the Mountain Valley Pipeline was tossed out Monday after a judge watched a video of the man’s encounter with a security guard at a construction site — and ruled there was no attack. The not guilty verdict for Jammie Hale, 47, of Pembroke, came in a Montgomery County General District Court hearing that showed a personal level to the ongoing controversy surrounding the natural gas pipeline, which is being built from West Virginia through six Virginia counties. The pipeline’s backers call it a vital piece of the region’s energy infrastructure, while opponents say it will only contribute to increased pollution, and that its construction damages the environment and infringes on property rights.
Mountain Valley Pipeline sues more Alamance Co. landowners - — The company behind the proposed Mountain Valley Pipeline Southgate has sued five more Alamance County landowners to get access for surveys to test the pipeline’s potential route. In all, MVP has sued eight landowners in Alamance County this year and four more in Rockingham County, according to court records. MVP has already been granted consent judgments allowing it access to three of those properties in cases it filed in the spring. Hearings on four of the five cases filed in August will be held Sept. 30, according to court records. MVP dismissed the suit against the fifth landowner Sept. 12. North Carolina law gives condemnors, which includes pipelines, the right to “enter upon any lands, but not structures, prior to condemnation to make surveys, borings, examinations, and appraisals,” so it is likely that MVP will get access to these properties at the Sept. 30 hearings. The properties in question are on Cherry Lane, Haw River Hopedale, Basin Creek and Jimmie Kerr roads. The proposed Mountain Valley Pipeline Southgate would be a 72-mile, 24-inch-diameter line connecting to the existing MVP in Pittsylvania County, Va., to carry Marcellus shale gas to the PSNC distribution system south of Graham, near Cherry Lane Road and Alamance Community College, according to documents submitted to the county. The earlier stage of the pipeline, still under construction in Virginia, has been controversial and mired in litigation over numerous citations for violating environmental regulations. MVP Southgate would provide natural gas to Dominion Energy customers, according to the MVP website, but opponents, including the Haw River Assembly and Sierra Club, say it will be a health and environmental hazard, and abuse of property rights through eminent domain, and that the company heavily inflates the growing demand for natural gas in the region. The Alamance County Board of Commissioners adopted a resolution in September 2018 opposing the pipeline. While the commissioners have no authority to permit or stop the pipeline, the resolution went to the Federal Energy Regulatory Commission. In July, the FERC released a Draft Environmental Impact Statement minimizing the potential long-term damage the pipeline’s construction would cause, which opponents have criticized.
Houston-based energy co. to review strategic alternatives year after exiting bankruptcy - Houston-based Harvest Oil & Gas Corp is undertaking a review of strategic alternatives, during which the company will consider potentially selling some or all of its remaining assets or a potential sale or merger of the company. The move comes a little over a year after the company emerged from Chapter 11 bankruptcy protection as the successor to EV Energy Partners LP, an upstream master limited partnership that Houston-based EnerVest Ltd. formed in 2006. Harvest now describes itself as “an independent oil and gas company engaged in the acquisition, efficient operation and development of onshore oil and gas properties in the continental United States.” Harvest also will review options to reduce its overall cost structure now that it has completed other divestitures. The company sold substantially all of its interests in the Barnett Shale for $63.5 million and some of its oil and gas properties in the Anadarko Basin and SCOOP/STACK area for $5.4 million, per the Sept. 16 release. Buyers were not disclosed. Harvest plans to return net proceeds from the deals to shareholders, possibly through dividends, distributions or share repurchases, the company said. UBS Investment Bank acted as Harvest's financial adviser on the transactions, and Kirkland & Ellis LLP acted as the legal adviser. Earlier this year, Harvest sold all of its interests in the San Juan Basin in New Mexico and Colorado for $42.8 million and all of its 4.2 million shares of Magnolia Oil & Gas Corp. (NYSE: MGY), which it acquired in August 2018. The newly formed Magnolia bought Harvest’s South Texas assets for about $135 million in cash plus 4.2 million newly issued shares valued at approximately $56 million as of Aug. 20, 2018. Also in August 2018, Harvest announced it would sell certain Eagle Ford formation rights and existing production in Lee County, Texas, to a third party for $3.5 million in cash. The company's assets now consist primarily of producing and non-producing properties in the Appalachian Basin (which includes the Utica Shale), Michigan, the Mid-Continent areas in Oklahoma, Texas, Kansas and Louisiana, the Permian Basin and the Monroe Field in Northern Louisiana.
Court Nixes 'Eminent Domain' for Big East Coast Fracked-Gas Pipeline - Federal appellate judges' reversal of decisions by a lower court and by the Federal Energy Regulatory Agency to allow private developers of the $1-billion, 120-mile PennEast natural gas pipeline to condemn state-owned land in New Jersey appears headed for US Supreme Court review.The Sept. 10 ruling by the three-judge panel of the Third Circuit Court of Appeals in Philadelphia said the previous approvals of eminent domain to seize131 land parcels, including 40 that are state-owned, for the 36-in.-dia line violate the US Constitution's 11th Amendment. PennEast had argued it was allowed under the federal Natural Gas Act to condemn properties along the line route and said that a ruling like the one it ultimately received could cause that project and other interstate pipelines to halt.Pat Kornick, a spokeswoman for PennEast Pipeline Co., said the firm is still reviewing the appellate decision and did not confirm a high-court appeal in a statement. But she said PennEast "remains committed to moving forward" with the project. The company had stated its intention to limit impacts to waterways by drilling beneath streams where possible, and restoring streambeds after construction is completed. But New Jersey Attorney General Gurbir Grewal said the state-owned properties are open space preserved for recreation, conservation and agriculture and not suited for natural gas shipment. He said the 11th Amendment grants states immunity from eminent domain takings by private entities.Environmental group Delaware Riverkeeper, the project's leading opponent, said the ruling could have wider implications. “This is a huge blow against the PennEast pipeline project and a huge victory for states and states rights,” said the group's director Maya Van Rossum.
EDITORIAL: Bills calling for gas pressure monitors left to languish - Effects of the Merrimack Valley’s gas disaster linger, large and small. Some people are still putting their lives back together. For others, the residuals are emotional and psychological. Something else held over — maddeningly so — are plans to make natural gas work safer. On Beacon Hill, Sen. Bruce Tarr filed a bill back in January to require utilities to assign monitors to job sites. These individuals would watch over the work and be able to quickly shut off service — a check against the rapid ratcheting up of gas pressure that unleashed last fall’s swarm of fires and explosions in the Merrimack Valley. On the House side, Rep. Barry Finegold filed a similar bill. But, as Statehouse reporter Christian Wade chronicled this past week, both proposals are stuck in committee. Tarr tried jump-starting his by hooking it to the state’s $43 billion budget. The gambit didn’t work. Finegold told Wade he’s confident his plan will get a hearing. A full year after the gas disaster, and months after these bills were filed, one could be forgiven for being skeptical. A year after the disaster, it’s well past time for action. Beacon Hill isn’t the only muddy place where these plans bogged down. Capitol Hill is another. Sen. Ed Markey and Rep. Lori Trahan filed legislation in Congress to require on-site monitoring of gas work, naming the bill after Leonel Rondon, the 18-year-old killed in South Lawrence last Sept. 13. Their plans haven’t moved either. Their legislation would go a step further, requiring professional engineers to scrutinize plans for gas line work. Massachusetts enacted that rule in response to a preliminary report on the gas disaster by the National Transportation Safety Board. As Wade reported, however, many other states still exempt utilities from that level of oversight. Public safety in those places, one expert told him, is compromised as a result.
As LIPA cuts its natural gas bill, Grid says new pipeline still needed -- LIPA, Long Island’s largest natural gas user, has cut its usage by two-thirds in the past decade — to the tune of $400 million — even as supplier National Grid has been making a case that soaring overall demand for gas requires a new pipeline. National Grid downplayed the 65.5 percent decline in the yearly natural gas usage by the Long Island Power Authority over that time, saying its largest customer's lower bill is unrelated to the need for the Northeast Supply Enhancement project, which, if approved, would increase local capacity by about 14 percent. "Even if LIPA used zero natural gas, NESE is still required to serve the increased customer demand for new and expanded natural gas service and to support economic growth," National Grid spokeswoman Karen Young said, adding local demand for natural gas is projected to increase by more than 10 percent over the next 10 years." National Grid has declared a moratorium on new gas hookups across Long Island until New York State regulators, who have twice rejected it, approve the project. Meanwhile, the state is investigating National Grid’s claim of a local shortage, which some environmental critics charge is based on false forecasts to tie the region to a fossil-fuel future. Local developers and even some doing home renovations have been caught in the crossfire, as National Grid refuses to commit to firm service for any new customers.
Baltimore’s natural gas system is increasingly leaky, raising concerns about safety and global warming - More and more natural gas has been leaking out of aged pipes in and around Baltimore in recent years, likely diminishing the fossil fuel’s relative Earth-friendliness and creating hazards that can lead to explosions like one that devastated a Columbia building last month. Leaks are so frequent that nearly two dozen of them are discovered each day, on average, according to data the Baltimore Gas and Electric Co. reports to federal authorities. The number of leaks increased by 75 percent from 2009 to 2016 — amid what officials called a “dramatic” increase in the failure of pipe joints dating to the 1950s and 1960s. Beyond the immediate safety concerns, the leaks contribute to the greenhouse effect that has been warming the planet for decades. And new research suggests more natural gas from Baltimore and other older cities is reaching the atmosphere than previously thought. The leaks won’t be stopped anytime soon. In the Baltimore area, BGE needs to replace thousands of miles of obsolete pipes that already could be leaking. Though hundreds of workers are assigned to the task, at the rate BGE is going, the work will take at least two decades.“This leaking methane has a huge impact in the atmosphere, and it’s not good for consumers,” said Mike Tidwell, director of the Chesapeake Climate Action Network. On top of the contributions to global warming, he said, “it’s a resource lost. It’s inefficient.”
Weather Forecasts Jump Back Hotter As Summer Refuses To Go Quietly -- For a couple of days last week, it looked like the abnormally hot pattern in place was finally ready to fade away, but weather models over the weekend jumped notably hotter for the second half of September. Here is today's GFS ensemble forecast for next week, for example. Back on Friday, this is what the forecast looked like from the same model, valid the same dates. Given that the change included a hotter southern half of the U.S, this was enough to boost natural gas demand compared to forecasts back on Friday, as seen in our forecast Gas-Weighted Degree Day (GWDD) change in our morning update. This September's projected GWDD total is among the highest in the historical dataset. While of course not the sole reason for the large natural gas rally over the last few weeks, it has definitely been about as supportive as weather can be at this time of the year. Should the run of warmth last a few weeks longer, however, it would transition into a bearish factor. Some models, such as the CFS, indicate such a possibility, which is tough to argue with, as warm-dominated as the pattern has been since late June. CFS October outlook:
US natural gas in underground storage rises by 84 Bcf: EIA — US working natural gas volumes in underground storage rose 84 Bcf last week, more than most of the market expected, as the NYMEX Henry Hub prompt-month contract and winter strip plummeted following the announcement. Storage inventories increased to 3.103 Tcf for the week ended September 13, the US Energy Information Administration reported Thursday morning. The injection was more than an S&P Global Platts' survey of analysts calling for a 76 Bcf build. It was at the high end of the survey range as responses spanned from 71 Bcf to 85 Bcf. The build was equal to the 84 Bcf injection reported during the corresponding week in 2018, but just above the five-year average of 82 Bcf, according to EIA data. As a result, stocks were 393 Bcf, or 14.5%, above the year-ago level of 2.710 Tcf and 75 Bcf, or 2.4%, above the five-year average of 3.178 Tcf. The NYMEX Henry Hub October contract fell 8.1 cents to $2.556/MMBtu following the announcement. The winter strip dropped 7.34 cents to $2.708/MMBtu. Comparing the weekly EIA ranges for cash prices, cash prices were up across the board week on week outside the West. The biggest mover was the Waha hub, which was up nearly 40% as congestion relief from Gulf Coast Express Pipeline has allowed that market to recover. For the week in progress, total US supply shows virtually no change while demand is down by 1.2 Bcf/d week on week, according to S&P Global Platts Analytics. Reductions in gas-fired power generation burn occurred along the East Coast and Texas, where temperatures fell on average about 1.5 degrees. The Southeast featured the largest weekly losses at 0.8 Bcf/d compared with the Northeast and Texas at 0.6 Bcf/d and 0.2 Bcf/d, respectively. Storage inventories look to rise 79 Bcf and 88 Bcf over the next two weeks, according to a Platts Analytics forecast. These bulky builds would continue to reduce the ever-shrinking deficit to the five-year average. The EIA has only reported two injections less than the five-year average since March. Both occurred in July, as hot weather drove demand. Over the past five years, the final injection of the season, on average, was the week ended November 8. If stocks add the same amount as the five-year average over said time frame, 552 Bcf, peak storage would hit 3.655 Tcf. The five-year end-of-season average is 3.73 Tcf. But weekly storage injections so far this season are averaging 29% above the five-year average. If this continues through season's end, stocks will peak at 3.8 Tcf. With recent builds coming in closer to average, the final volume will likely be somewhere between 3.6 and 3.8 Tcf.
Weaker Cash And Bearish EIA Report Send Natural Gas Prices Tumbling After testing the 2.70 level in the prompt month October contract a couple of times earlier this week, sellers have taken control the last couple of days, especially in today's session, which saw prompt month prices decline nearly 10 cents. Ironically, just yesterday in our Seasonal Trader Report, we highlighted to clients the risk of such a move back into the 2.50-2.55 range. In the spirit of fairness, this occurred quicker than we expected, thanks mostly to a bearish EIA report released this morning. Prices were already lower on weaker daily cash, but the 84 bcf injection reported for last week accelerated the decline. This was higher than our estimate, and while the EIA reports have been erratic lately, seemingly alternating bearish / bullish each week, anything close to an 84 is reflective of very loose supply / demand balances, as seen when looking at the last 10 weeks. The larger injection came despite a hot, higher demand weather pattern in place, with a lot of heat last week in key areas of the nation. Above normal temperatures are forecast to remain quite strong over the next couple of weeks. Time of year tells us, however, that we are getting closer to the point where above normal temperature regimes switch from bullish to bearish, as "normal" levels of HDDs begin to overtake "normal" CDD levels. That would not bode well for natural gas price support if that occurs in conjunction with weaker supply / demand balances. That said, the one thing we know in the natural gas world is that things can change, especially when it comes to the weather.
Gas Prices Could Return to Disco-Era Levels - A vestige of the era of disco, bell-bottoms and stagflation could be making a comeback next year: very cheap natural gas. So says IHS Markit, which on Thursday predicted that oversupply will push the average U.S. natural gas price for 2020 below $2 per million British thermal units (MMBtu). The information services firm observes that sub-$2 per MMBtu amounts to the lowest average gas prices in real terms since the 1970s. In nominal terms, natural gas did fall below $2 in 1995, IHS added. “It is simply too much too fast,” Sam Andrus, IHS Markit executive director who covers North American gas markets, said in a written statement emailed to Rigzone. “Drillers are now able to increase supply faster than domestic or global markets can consume it. Before market forces can correct the imbalance, here comes a fresh surge of supply from somewhere else.” According to IHS Markit, robust domestic gas demand and rising export levels will fail to keep prices from falling. Since January 2018, U.S. gas production has increased by more than 14 billion cubic feet per day (Bcfd), the company stated, adding that domestic output should average more than 90 Bcfd this year and next. Also, it anticipates a 3-Bcfd increase in liquefied natural gas (LNG) exports in 2020. IHS Markit also noted the next surge of U.S. gas production likely will come from the Permian Basin in West Texas. It stated that growth from the Permian will “more than compensate” for declines in other regions, sustaining the oversupply condition and requisite downward pressure on prices. “Nearly all the growth in U.S. natural gas demand over the next few years will come from LNG exported to other countries,” Andrus said. Factors driving the Permian output growth forecast include associated gas and 6 Bcfd of new pipeline takeaway capacity slated to go online through 2022, IHS Markit stated. Michael Stoppard, the firm’s chief strategies for global gas, pointed out the associated gas will get produced out of the oil well in any event. “The real change here is the transportation capacity,” said Stoppard. “You go from a situation where producers, in many cases, were paying someone to take their gas to having an economic means of getting it to market.”
Trump-Modi may unveil Indian investment in US LNG - President Donald Trump and Indian Prime Minister Narendra Modi may unveil new economic partnerships between the two countries at a joint appearance in Houston this weekend, including potential Indian investment in a US Gulf coast LNG project. Trump said in Washington, DC, yesterday that there "could be" an announcement on 22 September during an event at Houston's NRG Stadium expected to be attended by more than 50,000 people.In February, India's Petronet LNG signed a preliminary agreement with Houston-based LNG developer Tellurian to invest in the company in exchange for long-term LNG supplies from Tellurian's planned Driftwood LNG export terminal near Carlyss, Louisiana.When asked if that deal could be advanced or finalized this weekend, Tellurian told Argus, "We will certainly confirm any deal when we have it."Petronet is India's largest LNG importer but it does not have any long-term deals for US LNG. It has a long term deal for 8.5mn t/yr with Qatar's state-controlled Qatargas and a 1.44mn t/yr long-term deal with Australia's Gorgon LNG. Both those deals are indexed to oil prices, so Petronet may be seeking to diversify its procurement strategy with Henry Hub-indexed LNG. Prices of spot LNG delivered to India were around $4.50/mn Btu in August, down considerably from August last year, although cargoes from Qatar and Australia delivered under long-term contracts cost more than $8/mn Btu. Indian LNG imports climbed last month from a year earlier as domestic gas demand increased while gas output slowed. Imports were at 2.1mn t, equivalent to 88.3mn m³/d of dry gas. This was up from 80mn m³/d a year earlier and unchanged from July.
EOG to Supply Gas to Cheniere Texas Facility - EOG Resources, Inc. has signed long-term natural gas supply agreements with two subsidiaries of Cheniere Energy, Inc., Cheniere reported Monday afternoon.Under EOG’s gas supply agreements (GSA) with Corpus Christi Liquefaction, LLC and Cheniere Corpus Christi Liquefaction Stage III, LLC, the exploration and production company will initially sell Cheniere 140,000 million British thermal units (MMBtu) per day of gas but ramp up volumes to 440,000 MMBtu per day, Cheniere noted in a written statement. The approximately 15-year GSA period begins in 2020. Cheniere stated that it will own and market the roughly 0.85 million tonnes per annum (mtpa) of LNG associated with 140,000 MMBtu per day of the gas supply, adding that EOG will receive a price for this share of gas based on the Platts Japan Korea Marker (JKM). EOG will sell Cheniere the remaining 300,000 MMBtu of gas at a Henry Hub-indexed price, the LNG producer noted. Cheniere also pointed out that a portion of the transaction hinges on a positive final investment decision on the Corpus Christi Stage III project, which would add up to seven midscale liquefaction trains with roughly 9.5 mtpa of capacity. The U.S. Federal Energy Regulatory Commission (FERC) granted the project a positive environmental assessment in March of this year, noted Cheniere, adding that all remaining regulatory approvals are forthcoming by the end of 2019.
NextDecade, Enbridge Team to Build LNG Pipeline - NextDecade Corporation and Enbridge Inc. have entered into a Memorandum of Understanding (MOU) for the development of the Rio Bravo Pipeline as well as other natural gas pipelines in South Texas. This will transport natural gas to NextDecade’s Rio Grande LNG project in Brownsville, Texas. Rio Bravo is built to feed 4.5 billion cubic feet per day of natural gas from the Agua Dulce area to Rio Grande LNG. “With its Texas Eastern Pipeline and recently completed Valley Crossing Pipeline, Enbridge has extensive permitting, construction and operating experience in the State of Texas, especially in South Texas.” Bill Yardley, Enbridge’s president of gas transmission and midstream, shared excitement as well to be working with NextDecade for pipeline solutions to the Rio Grande LNG facility. “Our existing infrastructure fits very well with the Brownsville location,” said Yardley. “This is a continuation of our strategy to bring our major projects execution and permitting capability to the expanding LNG export efforts in North America.” NextDecade and Enbridge expect to finalize the terms of the MOU in the fourth quarter of this year.
EOG Resources lands deal to supply natural gas to Corpus Christi LNG - Houston oil & gas company EOG Resources has landed a natural gas supply deal for Cheniere Energy's Corpus Christi LNG export terminal. The companies confirmed the 15-year gas supply agreement in a joint statement released on Monday afternoon. Under the deal, EOG Resources will supply 140,000 million British Thermal Units of natural gas per day to the South Texas facility starting in 2020. The delivery amount will be gradually increased to 440,000 MMBTU of natural gas per day. Financial terms were not disclosed, but the companies confirmed that EOG Resources will receive a price based on the Platts Japan Korea Marker for the 140,000 MMBTU of natural gas while the remaining 300,000 MMBTU will be sold to Cheniere at at a price indexed to the Henry Hub in Louisiana.
Expanding NGL Markets Likely To Affect Producer Decisions - — Expanding markets for natural gas liquids produced in the Appalachian Basin should provide an extra financial incentive for natural gas producers in the region to maintain robust production in the long term, although concerns over low gas and NGL prices continue to dominate short-term planning, writes S&P Global Platts. Demand for NGLs produced in association with natural gas production in the Appalachian Basin is expected to increase dramatically in the next several years. In the short term, the demand growth will come from NGL pipeline projects being built or expanded to take products such as ethane, propane, and butane to markets far removed from Appalachia. In the longer term, in-basin NGL demand is expected to be generated by the construction of large-scale manufacturing projects, such as the ethane cracker being built by Shell in Monaca, Pa. Enterprise Products (Houston) has begun soliciting shipper interest in a proposed expansion of its ATEX pipeline that would move more supplies from the Appalachian Basin to its NGL complex in Mont Belvieu. The 1200-mile ATEX, or Appalachia-to-Texas, line transports ethane from the Marcellus and Utica shale plays in Pennsylvania, West Virginia, and Ohio to Enterprise’s Mont Belvieu NGL complex. Depending on demand, Enterprise would add up to 50,000 bbld of incremental capacity by 2022 through a combination of pipeline looping, hydraulic improvements, and modifications to existing infrastructure. Another pipeline option to transport NGLs out of the Appalachian Basin is Energy Transfer Partners’ (Dallas) 350-mile Mariner East 2 pipeline. The line, which went into service late last year, has 345,000 bbld of capacity to carry a mixture of ethane, butane, pentane, and propane from the tristate gas-producing region to the Marcus Hook Industrial Complex and export facility in eastern Pennsylvania. A second source of NGL demand, this time within the basin, is being created by the development of a petrochemical manufacturing industry in the region, identified by industry advocates as the Shale Crescent, the area surrounding the northern stretch of the Ohio River and comprising parts of Pennsylvania, West Virginia, and Ohio. The most advanced of these projects is the 1.5-million-metric-ton/year steam cracker Shell is building near Monaca. The plant, which will use ethane to manufacture polyethylene used in plastics manufacturing, is expected to cost up to $6 billion. In addition, a joint venture led by Thai-owned PTTGC America and South Korea’s Daelim is planning to construct a petrochemical complex in southeastern Ohio, though that project has yet to pass the final investment decision phase.
Capital Dries Up As New Crude, Gas And NGL Infrastructure Comes Online - U.S. energy markets are coming to the end of their latest infrastructure cycle just as the reality of tight capital markets is sinking in. Permian crude oil and natural gas takeaway constraints are being relieved by new pipeline capacity. Long-delayed LNG terminals and NGL-consuming petrochemical plants are coming online. Essentially all growth in crude, gas and NGL production volumes is being exported to global markets that — so far, at least — have been absorbing the incremental supply. But there is a chill in the air. Besides the recent bump-up in crude prices tied to last weekend’s attack on Saudi oil facilities, commodity prices have remained stubbornly low. Easy access to capital is a thing of the past. No longer can private equity count on the build-it-and-flip asset investment model. Yup, it’s another inflection point in the Shale Revolution that we’ll start exploring today. All this has huge implications for energy flows, infrastructure utilization and price relationships across all of the energy commodities. As is well-documented in the RBN blogosphere (for example, see Don’t Stop Believin’) and pretty much every other energy-related information source on the planet, equity markets have soured on energy investments. With public investors demanding return of capital in the form of dividends and share buybacks, and private equity spooked by a dearth of M&A deals, the result has been a steady decline in energy investment. Consider one indicator: the rig count. Crude rigs are down about 150 this year, or 17%, while gas rigs are down 45, or 23% (see left and center graphs in Figure 2 below). Another relevant indicator is the value of E&P stocks, with the S&P Oil & Gas E&P Index crashing from the 6,500 range a year ago to a paltry 3,500 level in recent weeks (right graph in Figure 2), though the index jumped nearly 400 points on Monday morning after the weekend’s Saudi news (then lost half of that one-day gain on Tuesday).
Damaged barge removed after spilling 117K gallons of oil -- Crews have removed a damaged barge that spilled oil from Tennessee-Tombigbee Waterway in northeast Mississippi. U.S. Coast Guard Lt. David Schneider tells WTVA-TV that the Jamie Whitten Lock remains closed as cleanup continues and the barge’s cargo is removed. The barge spilled more than 117,000 gallons (443,000) liters of oil on Sept. 8, prompting an extensive cleanup effort. Crews worked to contain the oil spill inside the lock, although 4 miles (6.5 kilometers) of the waterway were closed. Schneider says the barge will be transported to New Orleans for repair. The Savage Inland Marine barge was carrying about 321,000 gallons (1.21 million liters) of oil, but nearly two-thirds was safely removed.The Coast Guard is investigating.
Current regulations aren't enough to keep offshore oil industry in check - With an administration pushing for more oil exploration in the Gulf of Mexico, drilling watchdogs say they don't trust the infrastructure used to collect the oil nor the government regulations and policies that oversee oil and gas companies. “I think they really want the industry to regulate itself, so they really don’t want to take an active role,” said Ian MacDonald, a Florida State University professor and oceanographer. “They’re trying to roll back environmental regulations because their philosophy is the economy will be better.” MacDonald points to the Taylor Energy leak as one example of the industries' inability to effectively clean up existing oil leaks. One of about 3,000 platforms in the western and central Gulf of Mexico, the Taylor Energy site is about 19 miles off the coast of Louisiana. It was toppled by Hurricane Ivan in 2004, and oil has been leaking from the site since. Although the Coast Guard has recently capped at least part of the leak, higher estimates suggest about the site has been leaking about 70,000 gallons a day. A recent Coast Guard says the leak is about 30,000 gallons per day. The leak has spanned three presidential administrations, and the Donald Trump version is keen on more drilling. Although the Taylor leak started in 2004, little work was done on the site until 2010, after a group now called Healthy Gulf reported a sheen miles long. "At the end of the day we’ve been relying on industry self-reporting for pollution events for far too long," said Dustin Renaud, with the non-profit Healthy Gulf. "We don’t have a system in place to verify or fact-check them (because) that’s directly against their self-interests as a corporation."
Texas Charges Oil Port Protesters Under New Fossil Fuel Protection Law - A group of activists who shut down one of the nation's largest oil ports by hanging off a bridge over the Houston Ship Channel have been charged under a new Texas law that imposes harsh penalties for disrupting the operations of fossil fuel infrastructure. The charges could present the first test for a wave of similar state lawsthat have been enacted around the country over the past three years in response to high-profile protests against pipelines and other energy projects. More than two-dozen Greenpeace activists were arrested in Harris County after a number of them dangled from a bridge on Sept. 12 holding banners with the aim of blocking oil and gas tankers from passing through a busy shipping channel below. The Texas law they were charged under was based on a model billpromoted by the American Legislative Exchange Council, an industry-backed group.Lawmakers in at least 16 states have introduced versions of the bill over the past three years. Seven states have enacted them as law, according to the International Center for Not for Profit Law, and Iowa and South Dakota have enacted different bills with similar aims. The U.S. Department of Transportation earlier this year also proposed that Congress enact similar language into federal law. The bills create harsh criminal penalties for people who trespass on pipelines or other "critical infrastructure" facilities, and several of them allow for steep fines of up to $1 million for organizations that support people who violate the laws. Oil and gas industry groups have lobbied in favor of the bills, part of an effort to ratchet up pressure on protesters.
Greenpeace members face federal, state charges in Houston protest - (Reuters) - Federal and state authorities on Friday criminally charged climate change protesters for shutting down the largest U.S. energy-export port for a day by dangling from a bridge. The protest organized by Greenpeace closed part of the Houston Ship Channel on Thursday. The Harris County District Attorney’s office said its charges were the first under a new law that makes it a felony to disrupt energy pipelines and ports. “This action cost our community many, many millions of dollars in lost commerce,” said Sean Teare, a Harris County prosecutor, citing day-long shipping disruptions. Those charged include 31 people who dangled on ropes off a bridge or who provided logistical support, said Teare. Most of the protesters were expected to appear Friday before a magistrate for a probable cause hearing, he said. All 31 face up to a $10,000 fine and two years in prison if convicted. The district attorney’s office plans to convene a grand jury to consider other criminal charges, he said. Federal prosecutors separately charged 22 members of the same group with misdemeanor obstruction of navigable waters, according to a filing on Friday. They could face up to a year in prison on the federal charges. “This is a bullying tactic that serves the interests of corporations at the expense of people exercising their right to free speech,” said Tom Wetterer, Greenpeace’s general counsel. Texas was one of seven states this year that passed laws seeking to curb protests over energy projects such as the Dakota Access Pipeline and Bayou Bridge pipeline.
Catastrophic Flooding Threatens Heart Of Texas Oil Industry - Flooding from a tropical storm hit the Houston area on Thursday, with some calling the situation worse than Hurricane Harvey. Heavy rainfall inundated the Texas coast, flooding Houston and Beaumont, home to massive oil refining, petrochemical and export facilities. The storm was downgraded to just a tropical depression, but those classifications only measure wind speed. The real threat from Imelda was “major, catastrophic flooding,” according to the National Weather Service. “Extremely persistent thunderstorms” created the potential for 6 to 12 inches of rain, with higher levels in certain areas. “Storm total rainfall could be in excess of two feet for some areas before the weather finally begins to improve!” the NWS said in a notice. The forecast predicted that through Friday, some parts could see rain reach as high as 25 to 35 inches. But the Texas Department of Transportation said on Thursday that 41 inches of rain had already hit the area between Beaumont and the town of Winnie (between Beaumont and Houston). The sudden and rapid flooding of the area caught many by surprise, with thousands of people trapped in their homes and cars. Texas Gov. Greg Abbott said that the floods have “caused widespread and severe property damage and threatens loss of life.” He declared a state of disaster across 13 counties. The slow-moving nature of the storm meant that intense rain continued to pummel the region. “What I'm sitting in right now makes Harvey look like a little thunderstorm,” Chambers County Sheriff Brian Hawthorne told ABC13, a local ABC affiliate. “It's dire out here. I'm fearful for this community right now.” ExxonMobil said on Thursday that it was shutting down its 370,000-bpd Beaumont, Texas refinery because of flooding. “Exxon Mobil's Beaumont refinery and chemical complex is conducting a preliminary assessment to determine the impact of the storm,” an Exxon spokesman said. “The Beaumont chemical plant has completed a safe and systematic shutdown of its units.”
Sur de Texas-Tuxpan Pipeline begins commercial operations in Mexico - More natural gas from the Eagle Ford Shale of South Texas and the Permian Basin of West Texas is flowing south of the border in Mexico.Just three weeks after resolving a contract dispute with the Mexican government, Infraestructura Marina del Golfo, a joint venture between the Mexican subsidiaries of Canadian pipeline operator TC Energy and San Diego utility company Sempra Energy, announced Tuesday that a $2.6 billion pipeline designed to move natural gas from deep South Texas to Central Mexico has started commercial operations.The underwater Sur de Texas-Tuxpan Pipeline is designed to move 2.6 billion cubic feet of natural gas per day, the 42-inch and 480-mile pipeline begins in the Gulf of Mexico a few miles east of Brownsville and continues underwater to power plants in the coastal cities of Altamira, Tamaulipas and Tuxpan, Veracruz. It connects with other pipelines to move natural gas to other destinations further inland.“After reaching an agreement with the Federal Electricity Commission and the Mexican government, this important energy infrastructure project will provide a fundamental link between an abundant, low-cost natural gas supply to growing markets in Mexico for decades to come,” TC Energia President Robert Jones said in a statement.AMLO: Mexico reaches deal in natural gas pipelines controversyDeveloped as part of a contract issued by Mexico’s Federal Electricity Commission, the Sur de Texas-Tuxpan Pipeline receives its natural gas from the Valley Crossing Pipeline, a separate project developed by Canadian pipeline operator Enbridge to move natural gas from the Agua Dulce hub near Corpus Christi to the U.S./Mexico border.Tuxpan Economic Development Director Juan Pablo Alcantar told the Houston Chronicle that the Sur de Texas-Tuxpan Pipeline will feed five natural gas-fired power plants in Tuxpan capable of producing more than 4,100 megawatts of electricity. Two of the power plants are owned and operated by Japanese industrial conglomerate Mitsubishi, two are owned by Spanish energy firm Naturgy and a power plant owned by the Federal Electricity Commission that was switched over from fuel oil to natural gas.The pipeline will also feed another two natural gas power plants being built by the Spanish power company Iberdrola to produce an additional 1,200 megawatts of power. Once complete, Alcantar said Tuxpan will produce more electricity than any other city in Mexico.
New Fracking Process Highlights Oil Industry's Achilles Heel - Reuters published an interesting story on September 12 titled, “Low-cost fracking offers boon to oil producers, headaches for suppliers.” The story details a new hydraulic fracturing technology called “E-Frac” that promises to save producers up to $350,000 per well over the more traditional frac spread. E-Frac bills itself as “electric fracking,” which is really slightly misleading. In fact, these frac spreads, operated by Evolution Well Services, deploy electric turbines powered by the operating company’s own natural gas production in place of the diesel-powered generators deployed in traditional fracking operations. These turbines are quieter, cheaper to operate and produce far less air emissions than their diesel counterparts. Now, there’s a concept: Oil and gas companies finding a use for their unconnected lease natural gas besides flaring it. The big wonder here is why didn’t we read this story in Reuters a decade ago? There is nothing novel about companies using their lease gas to power wellsite equipment. That’s been happening for a century now in one form or another. Nor is there anything new about the portability of these natural gas turbines, which are basically scaled-down versions of the turbines used in electric power generation plants. The only thing really new here is that a service company decided to raise and invest the up-front capital needed to make the concept a cost-saver for producers and thus make the company a going concern. But big service providers like Halliburton and Schlumberger have already signaled that they won’t be rolling out their own “electric fracking” spreads anytime soon. Why? Because the up-front estimated capital cost of $60 million per spread is too expensive, double the cost of a traditional, diesel-fueled spread. “It’s a bad time for service companies to be ramping up very capital-intensive service offerings,” Reuters quotes Josh Young, chief investment officer with energy investor Bison Interests. But again, none of this is “new” technology in any real sense, so when is a good time for making those investments? More to the point, why didn’t the industry invest to adopt this kind of environmentally-friendly, flaring-reducing technology when oil was selling for $100/bbl and times were good? After all, flaring has been a big issue in the Bakken Shale play since 2008, in the Eagle Ford Shale since 2010 and in the Permian Basin since 2012. Instead of being proactive on the issue, the industry has continued to deploy and refine its traditional, diesel-fueled fleets, relying on messaging that the flaring problem would go away once all the new pipelines are built. But that promise hasn’t exactly worked out in the Bakken, where North Dakota regulators recently noted that, despite the build-out of significant new pipeline expansions, the industry there flared 24% of its production in June. That’s a new all-time record for the state, double the 12% target set by the North Dakota Industrial Commission.
Study suggests Texas address oil and gas waste water - Oil and gas producers in Texas are seeking ways to mitigate waste water from oil and gas operations, as state lawmakers in neighboring New Mexico moved to do the same. The two states share the Permian Basin, a vast underground oil and gas shale play credited with leading the U.S. toward energy independence and driving up local economies in the region. The Permian’s rise to prominence was due to hydraulic fracturing, or fracking, and horizontal drilling. Fracking uses billions of barrels – about 42 gallons each – of water each year. New Mexico Gov. Michelle Lujan Grisham announced last week a consortium of the New Mexico Environment Department, the New Mexico Energy Minerals and Natural Resources Department, Office of the State Engineer and New Mexico State University to begin studying how to treat and reuse produced water, potentially providing the resource to other industries. A report released Monday from the Texas Alliance of Energy Producers said 8.5 billion barrels of produced water – or waste water – was created in 2017 across Texas and could increase to more than 15 billion barrels by 2023. The study titled Sustainable Produced Water Policy, Regulatory Framework, and Management in the Texas Oil and Gas Industry: 2019 and Beyond said Texas oil and gas producers will be forced to continue sourcing water for fracking from an area in West Texas where water is scarce and freshwater sources are depleting. “Water demand for fracturing operations will continue to increase due to the growing numbers of wells drilled and completed coupled with the concurrent increase in fracturing fluid proppant intensity, well lateral lengths and well design improvements,” read the report.
Permian ‘Child’ Wells May Cut Oil Recovery By 20%, Bank Says - Oil producers drilling so-called parent-child wells in the Permian Basin are risking the loss of 15% to 20% of the crude that can ultimately be recovered from those wells by spacing them too close together, according to a Houston-based investment bank. The analysis from Houston-based investment bank Tudor, Pickering, Holt & Co. -- contained in a 61-page presentation seen by Bloomberg -- is the latest salvo in the debate on the spacing of so-called parent-child wells in the Permian, the most prolific oil patch in the U.S. When drilled too close to the initial “parent” well, output from a “child” can be much less prolific. But producers risk leaving oil in the ground if the spacing is excessive. In much of the Permian, a region that stretches across West Texas and New Mexico, the amount of oil that can be recovered from child wells is on average about 20% to 30% lower than that of the parent, the analysis shows. That means overall production from a particular area could be some 15% to 20% lower than projections made by producers. “Child wells get progressively worse relative to their parent well with tighter spacing,” according to the analysis. In a note to clients Friday, Sanford C. Bernstein analyst Bob Brackett said parent-child interference could end up decreasing overall production by a million barrels a day. “But it’s back end loaded,” he said. It’s not all bad news. One solution to the parent-child problem is to drill and frack both wells at the same time, which has been shown to improve recoveries, according to Tudor, Pickering, Holt. Those “co-developed” wells are showing results that are largely in line with company projections, the analysis said. Last year, 60% of wells in the Permian’s Delaware sub-basin were child or co-developed wells, according to the bank. Until 2017, the bulk of the Delaware was made up of parent wells. Tudor, Pickering, Holt declined to comment on the presentation.
Energy Transfer Makes a $5 Billion Bet on Crude Oil - Energy Transfer announced this week that it would acquire SemGroup for $17 per share, an eye-popping 65% premium to its closing price last Friday. The cash-and-stock deal valued themidstream company at $5 billion, including the assumption of debt. While the acquisition of SemGroup will do several things for Energy Transfer, the main driver of this deal is how it will bolster the company's oil transportation business. Energy Transfer's acquisition of SemGroup will significantly enhance the company's scale in several important production basins and market centers. Because of that, it will increase the connectivity of the company's crude oil and natural gas liquids (NGLs) business. At the heart of the deal is SemGroup's Houston Fuel Oil Terminal Company (HFOTCO), which is a world-class crude oil terminal on the Houston Ship Channel. That facility can store 18.2 million barrels of oil and has five deepwater ship docks from which it can export oil to global markets. Supporting the terminal are stable take-or-pay contracts that provide predictable cash flow. In addition to HFOTCO, Energy Transfer will pick up crude oil and NGL gathering assets in the DJ Basin of Colorado and Anadarko Basin in Oklahoma and Kansas. The company will also get some crude oil and NGL pipelines that connect those two regions to oil terminals in Cushing, Oklahoma, which is a major oil hub. Finally, Energy Transfer will gain a significant oil gathering and transportation business in western Canada. Although Energy Transfer is paying a substantial premium for SemGroup, it's getting all these assets at a good value. The company is paying only nine times EBITDA after adjusting for the expected $170 million in annual cost savings. For comparison's sake, Kinder Morgan recently sold its Canadian subsidiary and a related pipeline for 13 times EBITDA. The low price Energy Transfer is paying despite the significant premium is a result of the slump in SemGroup's stock over the past few years. The current offer price, for example, is still 28% below where shares traded a year ago and more than 50% below where they were three years ago.
More earthquakes occurring in Kansas, none have broken the record for the most powerful quake - WDAF FOX4 Kansas City - — Earthquakes keep rocking Kansas this year. It might have some people a little on edge about whether the state can expect a large-scale earthquake. The good news: It’s pretty unlikely for Kansas to see a quake like the ones that rattle California. There isn’t an active enough fault-line to produce the more damage-heavy tremors.An investigation is underway to find out why the state has received so many quakes and what can be done to prevent them. At least 50 quakes have shaken up an array of counties in the Sunflower State this year. A series of three quakes rattled portions of south-central Kansas on Sunday and Monday. The Kansas Geological Survey said the strongest quake measured Monday was a 3.8 tremor. It was reported around 2:30 a.m. in Chase County about 75 miles northeast of Wichita. Another quake rattled off around 10 a.m. It was a 3.6 magnitude quake. A quake was also reported in Reno County Sunday at 10:20 a.m. Hutchinson is in Reno County, the area is about 50 miles northwest of Wichita. spike in quakes goes all the way back to 2014. Researchers blame many of the quakes on wastewater injection wells from oil and gas production. After oil prices dropped and more regulations were added, the number of quakes decreased in 2015. This year is a different story. The back-to-back quakes in Reno County have led the Kansas Corporation Commission to look further into injection well activity. The regulatory agency took that action after a cluster of 17 earthquakes hit in Reno County over five days from August 15 to August 20.The strongest quake of the year was a 4.8 magnitude tremor on June 22. “Amid damage reports and a concern for public safety, the KCC is conducting an investigation and will evaluate whether additional action is needed to safeguard Kansans,” KCC spokesperson Linda Berry said in a written statement announcing the investigation.
Judge grants injunction in 'riot booster' lawsuit - A judge has put a temporary stop to South Dakota's new riot booster law aimed at Keystone XL pipeline protesters. U.S. District Judge Lawrence Piersol granted a preliminary injunction on Wednesday in a lawsuit against Gov. Kristi Noem and Attorney General Jason Ravnsborg alleging the state's riot laws, which allow the state to sue "riot boosters" including on behalf of a third party, were unconstitutional. Piersol also denied the state's request to certify the question to the South Dakota Supreme Court and he granted Pennington County Sheriff Kevin Thom's motion to dismiss the case against him, leaving Noem and Ravnsborg as the sole defendants. The state has an interest in criminalizing participation in a riot, but the state's laws defining a riot "go far beyond that appropriate interest and ... do impinge upon protected speech and other expressive activity as well as the right of association," Piersol wrote in his order. The American Civil Liberties Union of South Dakota filed the lawsuit on behalf of four groups and two individuals. ACLU attorney Stephen Pevar said they're "thrilled" by Piersol's injunction. "What it means for everybody is that they can speak their minds about the pipeline without fear of going to prison," Pevar said. "This has never been about breaking the law. Our clients simply want to engage in peaceful protest, but under these statutes, they can't do that without fear of punishment. The statutes just go too far."
Federal agency resists paying North Dakota oil protest cost (AP) — The federal government is contesting North Dakota’s claims that the state should be reimbursed for the $38 million the state spent policing prolonged protests against the Dakota Access oil pipeline. The Army Corps of Engineers filed a motion Tuesday asking a federal judge to dismiss the state’s lawsuit seeking to recoup the costs, arguing it has “limited authority to enforce its rules and regulations” on land it manages. “The federal government acquired the Corps-managed land ... without accepting any special criminal jurisdiction over this property,” the agency said in court documents. “Thus, North Dakota has the authority and responsibility to enforce criminal law on the Corps-managed lands...” North Dakota Attorney General Wayne Stenejem called the Corps’ claim that it is “toothless” in enforcing law on its land “preposterous.” Stenehjem filed the claim in Bismarck federal court in July after the agency ignored an administrative claim he filed a year earlier. Thousands of opponents of the $3.8 billion pipeline that’s been moving oil from the Dakotas through Iowa to Illinois for more two years gathered in southern North Dakota in 2016 and early 2017, camping on federal land and often clashing with police, resulting in 761 arrests over six months. The Standing Rock Sioux Tribe opposed the pipeline built by Texas-based Energy Transfer Partners over fears it would harm cultural sites and the tribe’s Missouri River water supply — claims rejected by the company and the state. Stenehjem has said the Corps “allowed and sometimes encouraged” protesters to illegally camp without a federal permit. The Corps has said protesters weren’t evicted due to free speech reasons. The agency said in court papers it used discretion, calling the federal government’s relationship with the Indian tribes “contentious and tragic.” The Corps said its “enforcement decisions” occurred in the “context of this complex and contentious history.”
Oil spill near Santa Maria - Santa Barbara County firefighters responded to an oil spill near ERG Operating Company in Santa Maria on Friday. At 11:45 am the fire department was notified of the spill on Bell Lease at 7320 Palmer Road. Crews responded to scene and confirmed 330 barrels of produced water with 4-5 barrels of oil had leaked. The spill was contained to the pad area and was not affecting any waterways. Oil and gas specialists are on the scene investigating the leak and initiating the cleanup.
US oil and gas rig count posts first weekly gain in nearly two months, up 5 to 954: Enverus— The US oil and gas rig count posted its first weekly gain in nearly two months, rising by 5 to a total 954, during a week of higher domestic oil prices, albeit from a geopolitical event on the other side of the world, Enverus/DrillingInfo data showed on Thursday. The last time the US rig count rose was the week of July 24, when the number of active rigs in domestic fields was up by 10 to 1,049. In the past 10 months, the rig count has dropped by more than 275 rigs from the recent peak of 1,233 in mid-November 2018. Rigs chasing oil increased by 8 to 763, while rigs drilling for natural gas dropped 3 to 186, according to the data for the week ended September 18. Generally, the rig count increase is likely "noise," "the general trend is down, and I think it ties nicely with [industry's] capital discipline and conservative drilling story." "I imagine we will see more of the same the rest of the year," he added. "I wouldn't be surprised by further declines, but I think it is more likely to see flat drilling activity." Basin wise, changes in activity were generally slight or neutral in the eight named large plays. The largest movements were a three-rig loss in the Denver-Julesburg Basin in Colorado, which was down three rigs, leaving 24, and a two-rig gain to 79 in the Eagle Ford Shale of South Texas. Other than that, three basins gained one rig each -- the Permian Basin in West Texas/New Mexico, up to 415; the Haynesville Shale in Northwest Louisiana/ East Texas, up to 53; and the Dry Marcellus Shale mostly in Pennsylvania, up to 28. Three other basins remained the same -- the Williston Basin, in North Dakota/Montana, at 58; the Wet Marcellus, also in Pennsylvania, at 19; and the Utica Shale mostly in Ohio, steady at 15. And the SCOOP-STACK of Oklahoma lost a rig, leaving 61. Approved US oil and gas permits also were down this week by 72 to a total of 754 permits. The largest change in a named play came from the DJ Basin, up 84 to 110 permits. The Permian gained 25 for a total of 150, the Dry Marcellus was down 25 to two, and the Eagle Ford lost 22, leaving 52. All other basins were up or down fewer than 10 permits from last week. According to Platts data, WTI prices this week averaged $58.06/b, up $1.29, while WTI Midland prices averaged $58.01/b, up $1.31. The Bakken Composite price was $51/b even, up $1.35. Natural gas prices were slightly up too. Henry Hub prices averaged $2.66/MMBtu this past week, up 11 cents, while Dominion South price averaged $2.03/MMBtu, up 9 cents.
U.S. shale oil output to rise to record 8.8 mln bpd in Oct -EIA - (Reuters) - U.S. oil output from seven major shale formations is expected to rise by 74,000 barrels per day (bpd) in October to a record high 8.843 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday. The largest change is expected in the Permian Basin of Texas and New Mexico, where output is seen climbing around 71,000 bpd to a record high 4.485 million bpd in October. That would be the ninth consecutive month of increases in the basin, its longest streak since December 2018. Output in North Dakota and Montana’s Bakken region is expected to edge higher by about 2,000 bpd to a record 1.471 million bpd, the data showed, representing the smallest increase in the basin since May. Even though the number of rigs drilling new wells in both the Permian and Bakken has declined since the start of the year, output has increased in both basins because the productivity of those rigs - the amount of oil new wells produce per rig - has increased to record levels. Production increases in the Permian and Bakken have been at the forefront of a shale boom that helped make the United States the biggest oil producer in the world, ahead of Saudi Arabia and Russia. Separately, U.S. natural gas output was projected to increase to a record 82.4 billion cubic feet per day (bcfd) in October. That would be up almost 0.5 bcfd over the September forecast, putting production from the big shale basins up for a ninth month in a row even though the number of rigs in each region has declined since the start of the year. Again that is because rig productivity - the amount of gas new wells produce per rig - was up in every region since the start of the year. Output in the Appalachia region, the biggest U.S. shale gas formation, was set to rise about 0.2 bcfd to a record 32.8 bcfd. The EIA said producers drilled 1,247 wells and completed 1,389 in the biggest shale basins in August, leaving total drilled but uncompleted (DUC) wells down 142 at 7,950, their lowest since November 2018. That was the biggest monthly decline in DUCs since they fell by a record 144 in August 2016, according to data going back to December 2013.
Short-Term Energy Outlook - U.S. Energy Information Administration (EIA):
- EIA forecasts Brent spot prices will average $60/b in the fourth quarter of 2019 and $62/b in 2020. EIA forecasts that West Texas Intermediate (WTI) prices will average $5.50/b less than Brent prices in 2020.
- EIA forecasts that global liquid fuels consumption will increase by 0.9 million barrels per day (b/d) in 2019, down from year-over-year growth of 1.3 million b/d in 2018. The slowing liquid fuels demand growth reflects EIA’s assumption (based on forecasts from Oxford Economics) of decelerating growth in global oil-weighted gross domestic product (GDP). EIA expects that global liquid fuels demand will increase by 1.4 million b/d in 2020 as a result of an expected increase in global GDP growth.
- EIA forecasts U.S. crude oil production will average 12.2 million b/d in 2019, up by 1.2 million from the 2018 level. Forecast crude oil production then rises by 1.0 million b/d in 2020 to an annual average of 13.2 million b/d. The slowing rate of crude oil production growth reflects relatively flat crude oil price levels and slowing growth in well-level productivity.
- The Henry Hub natural gas spot price averaged $2.22 per million British thermal units (MMBtu) in August, down 15 cents/MMBtu from July. This summer, prices have declined amid rising natural gas production, despite high levels of both natural gas exports and consumption in the electricity generation sector. Based on recent price movements and EIA’s assessment that natural gas production will be sufficient to meet expected demand and export levels at a lower price than previously forecasted, EIA lowered its Henry Hub spot price forecast for 2020 to an average of $2.55/MMBtu, 20 cents/MMBtu lower than the August forecast.
- EIA forecasts that U.S. dry natural gas production will average 91.4 billion cubic feet per day (Bcf/d) in 2019, up 8.0 Bcf/d from 2018. EIA expects monthly average natural gas production to grow in late 2019 and then decline slightly during the first quarter of 2020 as the lagged effect of low prices in the second half of 2019 reduces natural gas-directed drilling. However, EIA forecasts that growth will resume in the second quarter of 2020, and natural gas production in 2020 will average 93.2 Bcf/d.
- Natural gas storage injections have outpaced the five-year (2014–18) average so far during the 2019 injection season as a result of rising natural gas production. At the beginning of April, the natural gas inventory injection season started with working inventories 28% lower than the five-year average for the same period. By the week ending August 30, working gas inventories were 82 billion cubic feet (Bcf), or 3%, lower than the five-year average of 3,023 Bcf. EIA forecaststhat natural gas storage levels will be 3,769 Bcf by the end of October, which is slightly higher than the fiveyear average and 16% higher than October 2018 levels.
OIL AND GAS: Is U.S. shale facing an 'unmitigated disaster'? -- The booming shale industry could be headed off a financial cliff, experts say, and environmental groups are asking who will clean up thousands of wells drilled miles beneath the surface if businesses go bust.
Report: Cleanup of abandoned oil, gas wells could cost US (AP) — U.S. taxpayers could face potentially hundreds of millions of dollars in cleanup costs from abandoned oil and gas wells on public lands, a government watchdog agency said Wednesday. The Government Accountability Office said in a report that it identified almost 2,300 wells that have not produced oil and gas since 2008 and have not been reclaimed. The report said bankruptcies by well operators could saddle the government with $46 million to $333 million in reclamation liabilities. The wide range reflects the unknown costs of cleaning up the sites. To avoid such a scenario, GAO recommended officials adjust the amount of bonds companies must post before drilling to better reflect possible cleanup costs. Current rules allow companies to post bonds of $150,000 to cover their wells nationwide. Abandoned wells have been a major issue across much of the West including Wyoming, where companies abandoned almost 6,000 oil and gas wells since 2014 amid low natural gas prices that led to a bust in the coal-bed methane industry. The state has plugged and abandoned over 2,200 wells at a cost of $5,000-$7,000 per well, according to the Wyoming Oil and Gas Conservation Commission. U.S. Rep. Raul Grijalva of Arizona, who had requested that GAO investigate oil and gas bonding practices, said the results underscore the need for an overhaul of federal bonding rules. “Much to the pleasure of the oil and gas industry, bond amounts have been ignored for decades, resulting in levels today that are woefully inadequate,” said Grijalva, who chairs the House Natural Resources Committee.
Trump administration opens huge reserve in Alaska to drilling - The Trump administration on Thursday said it would seek to open up the entire coastal plain of the Arctic National Wildlife Refuge to oil and gas exploration, picking the most aggressive development option for an area long closed to drilling. In filing a final environmental impact statement, the Interior Department’s Bureau of Land Management (BLM) took a key step closer to holding an oil and gas lease sale for the nearly 1.6 million-acre coastal plain, which is part of the 19.3 million-acre ANWR. The administration said its preferred plan would call for the construction of as many as four places for airstrips and well pads, 175 miles of roads, vertical supports for pipelines, a seawater-treatment plant and a barge landing and storage site. The refuge — home to polar bears, wolves, migratory birds and the Porcupine caribou herd — has long been closed off to oil and gas exploration despite long-standing interest among members of the petroleum industry. Climate change has made the area more delicate as melting ice has driven threatened polar bears to spend more time in dens along the refuge’s coastal plain.President Trump is dismissive of climate change, but the BLM conceded that it is having distinct effects on wildlife in the region. Although the report says there might be “positive effects on some species,” such as geese, eiders, loons and swans, it also says there could possibly be “catastrophic consequences” for birds as well as the extinction of 69 of the 157 bird species on the coastal plain over an 85-year period, according to an earlier report by Energy and Environment News. The BLM also said certain species, such as the Beringia bearded seal, which is not considered threatened, would go extinct by 2095 as a result of climate change. Bearded seals depend heavily on sea ice.
McDermott JV Bags Arctic LNG-2 Deal -- Natural Gas World US engineering group McDermott International’s joint venture with China Shipbuilding Industry Corp. (CSIC) has secured a contract for three complex modules at the Arctic LNG-2 project in the Russian Arctic.Qingdao McDermott Wuchuan Offshore Engineering (QMW) has been hired to fabricate three pre-assembled units complex process modules, McDermott said in a notice on September 17. The scope of the work includes fabrication engineering, partial procurement, construction and pre-commissioning. Fabrication is slated to start at the end of this year and be completed in mid-2022.McDermott said the contract was “large”, placing its share of the value at somewhere between $50mn and $250mn. The Arctic LNG-2 project will establish a LNG liquefaction terminal on the Gydan Peninsula with an export capacity of 19.8mn mt/yr. Russia’s Novatek, France’s Total, China’s CNPC and Cnooc and Japan’s Mitsui and Jogmec, took a final investment decision(FID) on the project earlier this month. Its three trains are due online in 2023, 2024 and 2026 respectively.
Low Alberta gas storage is not spooking the AECO winter market, yet. - Alberta natural gas storage, one of the largest regional storage hubs in North America, is experiencing one of its slowest cumulative storage injection rates in years and could be headed to a 13-year low for storage levels by the end of the current injection season. That may seem ominous for the chilly Alberta and Canadian winter heating season, not to mention gas exports to the U.S. So far, though, winter gas forward prices for the Western Canadian gas price benchmark of AECO have registered a relatively modest market response, staying in line with last winter’s average spot price. Today, we take a closer look at the market’s apparent lack of concern over low Alberta gas storage. Canadian natural gas storage is not often a topic in the RBN blogosphere, but with Alberta — the province with more gas storage capacity than any other — showing remarkably low storage levels for late summer, and the U.S. still a steady gas taker of Western Canadian gas during the winter, the storage deficit there is likely to factor into how the North American gas market balances this winter. Alberta’s gas storage capacity is estimated at 499 Bcf by the Alberta Energy Regulator (AER) and easily dwarfs that of any other province in Canada. The next-closest competitor would be Ontario at 279 Bcf of storage capacity. Among the U.S. states, Alberta’s storage capacity would rank third, behind only Michigan (686 Bcf) and Texas (549 Bcf), based on capacity data compiled by the U.S. Energy Information Administration (EIA). On that basis, it’s safe to say that Alberta is a major player in the North American gas storage business.
Saudi Disruption Makes Canada's Largest Refinery Vulnerable -- Canada may hold the world’s third-largest crude reserves, but that’s little help to its largest refinery after a weekend attack disrupted production in Saudi Arabia, its biggest oil supplier. Nearly all of the kingdom’s oil shipments to Canada travel to New Brunswick, home to a single refinery, Irving Oil Ltd.’s Saint John plant, which can process about 299,000 barrels a day. The refinery relied on Saudi crude for more than 40 percent of its supplies in July, Statistics Canada data show. A drone attack Saturday on Saudi Arabia’s biggest crude-processing plant knocked out about half the country’s output. Saudi Aramco faces weeks or months before the majority of supply from its Abqaiq plant is restored, according to people familiar with matter. A longer-term outage is especially problematic for Irving’s plant, which relies mostly on imports. The bulk of Canada’s reserves are located in the oil-sands region of Northern Alberta, in the west of the country. Most of that oil is exported to the U.S. and while some can be shipped to eastern Canada on Enbridge Inc.’s Line 9, the pipeline only serves refineries as far east as Montreal. Now, Irving may have to pay up for its crude. “It’s more likely to play out on a price effect, rather than physical shortage” of oil, Kevin Birn, IHS Markit’s director of North American crude oil markets, said by telephone.
Mexico's Growing Reliance on US Oil Will Continue - Proven oil reserves in Mexico have collapsed from 50 billion barrels 20 years ago to just 8 billion barrels today. It has been a long and winding road for Mexico’s oil industry over the past 15 years. With the peaking of supergiant Cantarell, once the world’s second largest oil field, Mexico's crude production has been sliced in half to below 2 million b/d. Proven oil reserves have collapsed from 50 billion barrels 20 years ago to just 8 billion barrels today. Mexico’s crude oil exports to primary customer, the U.S., have been plummeting. From 2006-2018, shipments to the U.S. fell 60 percent to 720,000 b/d. After lengthy delays, Mexico in 2013 critically passed its Energy Reform to bring in outside investment and expertise to help production rebound. It remains a bumpy ride, however, and the new Andrés Manuel López Obrador (AMLO) administration has been resistant to deregulation. In turn, Mexico has been increasingly forced to deepen its dependence on the U.S. to meet oil demand at home. Falling production has been exacerbated by a refinery shortage, surging imports of refined products. In 2018, Mexico imported 1.2 million b/d of products from the U.S., or six times more than its intake before peak oil production. The country last year imported 520,000 b/d of gasoline from the U.S., nearly a five-fold boom over the past decade. This does help justify AMLO’s primary goal to not just grow crude output but to also build more refineries. The hope is to finally reverse the very expensive habit of shipping crude to the U.S. only to have to import it as refined product. The problem though is that refineries can cost at least $8 billion. With state-owned Pemex as a seriously indebted energy company, (over $105 billion), its ailing finances are the biggest threat to the Mexican economy. Many in the investment community have advised Mexico to not build the refineries. It remains a chronic problem: Pemex’s profits continually get siphoned off by the government instead of being re-invested. Like those in OPEC, this is a nation that simply depends too much on oil sales. Although down from 45 percent a decade ago, oil still accounts for 20-25 percent of the federal budget. Looking forward, Pemex faces serious obstacles now that AMLO has signaled a return to the resource nationalism that long hampered growth. Blocking an industry rebound, he has claimed no more fracking and no more risk contracts for foreign partners. He could waver because such anti-production policies will have a predictable result: more reliance on the U.S. Mexico should be aware, however, that the U.S. is the fastest growing oil exporter in the world. Many high-paying customers want growing amounts of the light tight oil flowing from America’s shale fields. In fact, the IMO 2020 sulfur rule combined with a trade deal with China could make the U.S. the largest oil exporter within the next five years.
StateImpact Pennsylvania's Reid Frazier: Why I'm following Pa.'s Marcellus shale gas to Scotland - Zoe Shipton is a geologist and head of civil and environmental engineering at the University of Strathclyde. She’s been around the world to study rocks of varying shapes and sizes. When I showed up one late afternoon, she pulled out her favorite, a granite-based hunk from California’s Sierra Nevada. It was a pseudotachylite — a rock with a white base pocked with dark clumps. She said it was, essentially, a “fossilized earthquake” —the dark parts are the remnants of rocks that were melted during a seismic episode 15 kilometers below the earth’s surface. Shipton has paid close attention to the issue of oil and gas in the British isles. In 2011, she was on a panel of the British Geological Survey to study the question of fracking in the UK. She said one reason why shale gas from Pennsylvania is being shipped to Scotland has to do with what is going on with fracking in Great Britain.For decades, the United Kingdom has relied on oil and gas from the North Sea. Those fields, first developed in the 1960s and 70s, are declining. Grangemouth, the largest refinery in Scotland, is fed by a pipeline from those fields. Shipton says INEOS has been looking for a closer domestic supply, and it’s pushed for fracking in Great Britain. But some of the first exploratory wells in the North of England caused earthquakes, and the fracking effort slowed.The Scottish parliament has put in place a moratorium on fracking, and public sentiment in the UK is generally lukewarm to the process.If fracking were to ever advance in the UK, Shipton said it’s an open question as to how much gas there is in British shale. That’s partially because there are many faults in Britain’s geology, making geological prediction harder. Some of those faults are related to the pulling apart of the European and American continents. Millions of years ago, they were stuck together, but have been moving apart ever since. “So we’ve got a bit of Maine stuck on to Scotland,” she said. “Basically anything north of Glasgow kind of is American. But we nicked it off you millions of years ago.”
Global Gas Flaring Value Surpasses $16B - -- The value of natural gas flaring across the world has seen a substantial increase to hit a global peak of $16.4 billion this year, according to Scottish data analytics firm Brainnwave. The firm said this is due to the rising price of natural gas and the increased volume of gas flared. Brainnwave’s analysis saw the value of natural gas flared by 80 different nations increased by 11 percent. Further, the volume of natural gas lost due to flaring increased by just over three percent, from 140.5 billion cubic meters in 2017 to 145 billion cubic meters in 2018.“Gas flaring is a major environmental issue, but it is also a commercial one,” said Brainnwave CEO Steve Coates. “Oil producers often lack the infrastructure to export natural gas from their wells and face few alternatives but to flare it in order to reach oil.”The most wasteful nations in 2018, Brainnwave contends, are Russia, Iraq, Iran and the U.S. – altogether flaring more than 70 billion cubic meters of natural gas. The firm said this is enough to heat 38 million homes for one year and is also more gas flared than the next 30 most wasteful nations combined.Recent analysis from Rystad showed that natural gas flaring in the Permian dropped in the first quarter of 2019 – its first drop since 2017.“Some of our customers are now using our data intelligence platform to find opportunities to provide commercial solutions, including those that convert otherwise-flared gas into power without it even leaving the site,” said Coates. “There are commercially viable solutions to gas flaring – but they rely on the technology being available and the financial incentives to make sense.” Brainnwave said it pinpointed gas flaring events around the globe using nighttime satellite imagery from visible infrared radiometer data that was used to measure the volume of gas flared. The firm then used the mean Henry Hub spot price for natural gas in U.S. dollars to estimate its value.
India Poised to Become a Huge Market for US Gas--- Indian Prime Minister Narendra Modi’s imminent visit to the U.S. energy capital is fueling speculation the second most-populous nation will further tap America’s shale gas bonanza. Modi is scheduled to address upwards of 50,000 people at a sold-out event at Houston’s NRG Stadium on Sept. 22 that’s billed by organizers as the largest-ever turnout for a foreign elected leader on U.S. soil. Energy investors, however, are keenly focused on what happens behind the scenes. A long-running trade war between Washington and Beijing has meant China hasn’t imported any American supply since February. The dispute has also put plans for new export terminals at risk. By contrast, India is open to making purchases, and the nation is already the sixth-largest buyer of U.S. liquefied natural gas. India “has the potential to become an enormous market” for U.S. gas, said Charlie Riedl, executive director of the Center for Liquefied Natural Gas. “Based on the broader aspiration to move people out of energy poverty and to enhance manufacturing, this all points to emerging opportunities.” The three-hour gathering -- branded as “Howdy Modi!” -- at the home of the National Football League’s Houston Texans is scheduled to include a “cultural program” that will be followed by an address by the Indian leader, according to event organizers. The event comes just weeks after Modi sat with Russia’s Vladimir Putin to explore shipping Arctic natural gas to the subcontinent. Heightening expectations is the timing of Modi’s Texas pilgrimage: it will come only a few days after Gastech, one of the world’s premier methane-industry confabs. Still, India has been slower than some other economies to divorce itself from coal, and that may be a hindrance to gas-import arrangements, said Madeline Jowdy, an analyst at S&P Global Platts. “I am so skeptical of India,” Jowdy said. “’I’m not saying that Indian companies can’t and won’t invest” in gas imports, but coal is entrenched and supports a lot of jobs.
Oil spilling into the Java Sea - In mid-July, one of three oil wells owned by the Indonesian state-owned oil and gas company, PT Pertamina, under an offshore platform in the North West Java (ONWJ) Offshore Block began leaking into the sea north of Karawang City, West Java. By mid-August, the company had deployed 44 vessels to work at containing the spill as oil slicked to the surface along with bubbles of gas. Nevertheless, at least seven beaches in West Java and several villages were affected by the spill lapping ashore. Crude oil reached as far as the seven islands at Pulau Seribu in Jakarta, about 60 km west of the facility. Beaches popular with tourists closed and the hauls of fishermen declined in the polluted area. Every day for weeks after the spill, hundreds of people were mobilized to clean up the beaches. Wearing protective clothing, including masks and gloves, their work started early to beat the heat of the rising sun. PT Pertamina promised to handle the leak off the Karawang coast, hiring a U.S.-based well control company – Boots & Coots – to assist. Boots & Coots handled the infamous 2010 Deepwater Horizon oil spill in the Gulf of Mexico. PT Pertamina aims to fix the well by late September.
Oil spill spanning 800 metre detected along Mersing waters — An oil spill has been detected along an area spanning 800 metres in the Mersing waters, affecting nearby areas such as Pulau Rawa and Pulau Besar, here. Johor Local Government, Urban Wellbeing and Environment Committee chairman Tan Chen Choon said the case was reported by local residents on September 15. “The cause of the spill is still being investigated as the Marine Department reported that there has been no report on vessel accidents or detention. “Initial investigation found that vessels passing through the international waters could potentially be the source of the oil spill,” he said in a statement today. Related agencies have been mobilised to contain the spill, with the marine department and the Malaysian Maritime Enforcement Agency (MMEA) increasing monitoring activities and the Mersing district office activating its beach cleaning action plan. “Monitoring was also done together with the Johor Marine Park Department yesterday but no further spill was detected, possibly due to other elements such as strong waves, high wind and the haze,” he said. Tan also expressed his gratitude to the local residents for reporting the incident to the Department of Environment and for coming forward to help with cleaning activities at the beach.
ExxonMobil Hits More Oil Pay Offshore Guyana - Exxon Mobil Corp. reported Monday that it has made another oil discovery on the Stabroek Block offshore Guyana at the Tripletail-1 well in the Turbot area, adding to Stabroek’s previously announced estimated recoverable resource exceeding 6 billion oil-equivalent barrels. “This discovery helps to further inform the development of the Turbot area,” Mike Cousins, ExxonMobil’s senior vice president of exploration and new ventures, said in a written statement emailed to Rigzone. According to ExxonMobil, Tripletail-1 – drilled in 6,572 feet (2,003 meters) of water by the Noble Tom Madden drillship – encountered approximately 108 feet (33 meters) of a high-quality oil-bearing sandstone reservoir. After the drillship completes operations at Tripletail, which is located roughly three miles (five kilometers) northeast of the Longtail discovery, it will drill the Uaru-1 well roughly six miles (10 kilometers) east of the Liza field, the supermajor added. ExxonMobil affiliate Esso Exploration and Production Guyana Limited operates Stabroek and owns a 45-percent stake in the block. Hess Guyana Exploration Ltd. and CNOOC Petroleum Guyana Limited own 30-percent and 25-percent interests, respectively. “Tripletail is the 14th discovery on the Stabroek Block and further underpins the Turbot area as a major development hub,” Hess CEO John Hess said in a separate written statement. “The discovery adds to the previously announced gross discovered recoverable resource estimate of more than 6 billion barrels of oil equivalent on the Stabroek Block, with multibillion future barrels of future exploration potential remaining.”
Exxon Again Looks to Sell Australia Assets-- Exxon Mobil Corp. is again trying to sell its oil and gas operations in southeast Australia as part of a move to shed assets and boost shareholder returns. The U.S. supermajor “will be testing market interest” for global assets, including what it operates in Australia, the company said in an emailed statement. No buyers have been identified and no agreements have been reached, it added. “Exxon Mobil continually reviews its assets for their contribution toward meeting the company’s operating needs, financial objectives and their potential value to others,” it said in the statement. It’s the second effort in about three years to sell Australian operations, which include the long-producing Gippsland Basin project offshore Victoria state. Exxon and its joint venture partner BHP Group abandoned a 20-month sale process for the assets in February 2018. The world’s biggest oil company by market value is pursuing a $15 billion divestment plan, offloading older assets to fund higher-growth projects from Papua New Guinea to Texas and Brazil. It confirmed earlier this month it’s in exclusive talks to sell Norwegian oil and gas operations, a deal reported to be worth as much as $4.5 billion. The company is also negotiating with Spain’s Repsol SA to sell deepwater assets in the Gulf of Mexico, where it said last year it was “testing market interest.” Big IssuePotential buyers “will have to get comfortable with the age of the assets, declining production and significant decommissioning liabilities,” said Angus Rodger, a research director at Wood Mackenzie Ltd. “The fact that a previous effort to offload the Gippsland oil assets failed due to uncertainty over abandonment costs highlights how big an issue it will be.” The Australian newspaper reported in June that Exxon’s 50% stake in the assets, which include the Longford Gas Plant, could be worth about $3 billion.
U.S. And Russia Battle It Out Over This Huge Iraqi Gas Field - With the U.S, Russia, and China all jostling for position in Iraq’s oil and gas industry both north and south, Iraq’s oil ministry last week reiterated its desire to have one or more foreign partners in the Mansuriya gas field. Situated in Diyala province, close to the Iran border, Mansuriya is estimated to hold around 4.6 trillion cubic feet of natural gas, with plateau production projected at about 325 million standard cubic feet per day. For the U.S., encouraging Iraq to optimise its gas flows so that it reduces its dependency for power from Iran is the key consideration. For Russia, Rosneft essentially bought control of the semi-autonomous region of Kurdistan in northern Iraq in November 2017, so power in southern Iraq figuratively will complete the set. Securing oil and gas contracts across all of Iraq will allow Russia to establish an unassailable political sway across the entire Shia crescent of power in the Middle East, stretching from Syria through Lebanon (by dint of Iran), Jordan, Iraq (also helped by Iran), Iran itself, and Yemen (via Iran). From this base, it can effectively challenge the U.S.’s vital oil, gas, and political ally in the region – Saudi Arabia. China, in the meantime, is operating to its own agenda in South Pars Phase 11 and its West Karoun holdings. Iraq, like Turkey, is still – nominally at least – not committing to either the Russia or the U.S., preferring to play each off against the other for whatever they can get, and the same applies in microcosm to the field of Mansuriya. Turkey itself was a key player in this gas field through its national oil company Turkiye Petrolleri Anonim Ortakligi (TPAO) until the middle of last year – holding a 37.5 per cent stake – along with the Oil Exploration Company (25 per cent), Kuwait Energy (22.5 per cent), and South Korea’s KOGAS (15 per cent). TPAO had signed the original development deal for Mansuriya back in 2011, promising Iraq’s oil ministry that it could be trusted to reach plateau production within 10 years at most, a senior figure in the ministry told OilPrice.com last week. This was not an unreasonable schedule, for which TPAO would be remunerated US$7.00-7.50 per barrel of oil equivalent, a relatively generous amount compared to many of the previous awards from the ministry. TPAO agreed that the first phase would mean production of at least 100 million cubic feet a day within 12 months from the signing date. As it stands, Iraq’s oil ministry has made it clear that it needs Mansuriya to be properly up and running and gradually increasing production towards the 325 million standard cubic feet per day figure so that it can be used as a feedstock for the country’s calamitous power sector. Peak summer power demand every year exceeds domestic generation capacity, frequently leading to up to 20 hours per day of blackouts in many areas. Without Mansuriya and similar gas fields coming online, this will get worse, as Iraq’s population is growing at a rate of over one million per year, with electricity demand set to double by 2030, according to the International Energy Agency.
Brent crude oil jumps 13% after drone strikes disrupt Saudi crude production - Oil prices jumped more than 10% after a coordinated drone attack hit the heart of Saudi Arabia's oil industry on Saturday, forcing the kingdom to cut its oil output in half. U.S. West Texas Intermediate crude futures popped $6.4, or 11.67%, to $61.23 per barrel. Brent crude futures soared $7.89, or 13.3% to $68.07. Drone strikes attacked an oil processing facility at Abqaiq and the nearby Khurais oil field on Saturday, knocking out 5.7 million barrels of daily crude production or 50% of the kingdom's oil output. Saudi Aramco, the national oil company, reportedly aims to restore about a third of its crude output, or 2 million barrels by Monday. "While in the short term the direct physical impact on the market might be limited, this should move the market away from its bearish macroeconomic cycle and raise the risk premium in the market as funds reduce their short positions," said Chris Midgley, global head of analytics, S&P Global Platts. Sunday evening, President Donald Trump said he was authorizing the release of oil from the Strategic Petroleum Reserve to keep the markets "well-supplied." Abqaiq is the world's largest oil processing facility and crude oil stabilization plant with a processing capacity of more than 7 million barrels per day. Khurais is the second largest oil field in the country with a capacity to pump around 1.5 million barrels per day. In August, Saudi Arabia produced 9.85 million barrels per day. Yemen's Houthi rebels claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom. The Houthis have been behind a series of attacks on Saudi pipelines, tankers and other infrastructure in the past few years. Trump also said there is reason to believe the U.S. knows the culprit and is "locked and loaded," while waiting to get the verification from the kingdom to proceed. The U.S. has blamed Iran for the drone strikes on those important facilities. Secretary of State Mike Pompeo said in a tweet Saturday Iran has launched an "unprecedented attack on the world's energy supply." "If the Iranians have been driven to desperate measures from the loss of crude export revenues, an attack on Saudi capacity seems a likely response," Jason Gammel, energy analyst at Jefferies, said in a note on Sunday. "The risk of wider conflict in the regions, including a Saudi or US response, will likely raise the political risk premium on crude prices by $5-10/bbl."
Drone attacks on Saudi plant could hit global oil supplies - Global supplies of oil are likely to suffer a “major jolt” following Saturday’s attack by a swarm of explosive drones on the world’s biggest oil processing plant in Saudia Arabia.Major fires engulfed the Abqaiq processing facility and the Khurais oil field after the attack, for which Houthi rebels in Yemen claimed responsibility. They said they launched 10 drones with “intelligence cooperation from people inside Saudi Arabia”, according to the rebel-run Saba news agency. The rebels’ spokesman Yahya Saree said their operations “will expand and would be more painful as long as the Saudi regime continues its aggression and blockade” onYemen, he said.The fires are now under control at both facilities, Saudi state media said. Saudi Arabia’s oil fields and pipeline have been the target of rebel attacks over the past year, often using single drones, but analysts said this appeared to be the biggest and most successful to date.The attack has raised tensions in the Gulf. Houthi rebels are assisted by Iran, which has developed sophisticated drones. But US secretary of state Mike Pompeo said last night there was no evidence the strike came from Yemen and accused Iran of launching an “unprecedented attack on the world’s energy supply”. Abqaiq, run by state-owned firm Aramco, is described as the world’s most important processing centre, where crude from several of the country’s largest oil fields is sent before being shipped for export. The attack reduced production by five million barrels a day – nearly half the kingdom’s output and 5% of global production – according to unnamed Saudi oil ministry sources quoted by the Reuters news agency last night. The reduction will go on for at least 48 hours reports said.Robert McNally, of the US-based Rapidan Energy Group, said: “Abqaiq is perhaps the most critical facility in the world for oil supply. Oil prices will jump on this. If disruption to production is prolonged, a Strategic Petrol Reserves release from International Energy Agency members seems both likely and sensible. If anything, the risk of tit-for-tat regional escalation, which pushes oil prices even higher, has just gone up significantly.” The IEA said it was “monitoring the situation closely”. A spokesman added: “We are in contact with Saudi authorities as well as major producer and consumer nations. For now, markets are well supplied.”
Oil rallies 10%; Saudi production may take months to recover -An attack on Saturday set two major Saudi Arabian oil facilities - Abqaiq, a vital crude processing centre, and the Khurais oilfield - ablaze, hitting more than half of the Kingdom's crude production. Yesterday it emerged that Saudi Arabia is now looking at weeks without full crude and gas production capacity. - The market has yet to receive clarity as to how long it will take the Kingdom to restore output towards the 9.8m barrel a day level of before the attack. - As a result oil rocketed upwards on Monday's open, with Brent gaining as much as 20 per cent to above $71.00 a barrel - the largest move in percentage terms since Saddam Hussein invaded Kuwait in 1990. Andy Hall – arguably the most successful oil trader of his generation – has given his insights on the weekend’s developments exclusively to the FT. Over a near 45-year oil trading career, Mr Hall gained a reputation for landing on the right side of some of the biggest bets in the market’s history. Here is what he had to say this morning to the FT’s energy editor David Sheppard: Obviously this is a huge development. The loss of production is comparable with that during Saddam’s invasion of Kuwait. An SPR release in the US isn’t going to help offset it much as US crude export capacity is maxed out and opportunities for import substitution are very limited. Ironically, the Saudis have run down their own excess crude/strategic inventories in recent years and these now appear to be at multi-year lows if published data are to be believed. OPEC “spare capacity” consists primarily of Iranian production constrained by US sanctions. It seems unlikely they will be lifted in the current circumstances! A meaningful production response elsewhere would take years even for US shale which has anyway seen it’s production growth start to roll over and would quickly encounter infrastructure and other constraints. This attack underscores the vulnerability of oil production facilities in the Middle East in particular and the world in general. All the tens of billions of dollars the Saudis have spent on weapons could not protect them from a dozen or so low tech drones. Asymmetrical warfare indeed! It would seem the oil market needs to not only price in the current supply loss but also a higher risk premium for the future. On the other hand, the apparent fragility of the global economy will now be further tested by an oil price spike. Buckle up!
Trump authorizes release of oil from strategic petroleum reserve after Saudi attacks - President Donald Trump said Sunday he has authorized the release of oil from the U.S. strategic petroleum reserve after attacks on key production facilities in Saudi Arabia cut the kingdom's crude production by half.Trump said oil would be released if needed to keep the market well supplied. The president also said that he has informed the appropriate agencies to expedite the approval of oil pipelines still in the permitting process in Texas and other states.Saudi Arabia's national oil company, Aramco, was forced to cut its production by 5.7 million barrels per day or about 50% after a series of drone strikes hit the heart of the kingdom's oil production. The world's largest oil processing facility and Saudi's second-largest oil field were hit in the attacks.In August, Saudi Arabia produced 9.85 million barrels per day, according to the latest figures from the U.S. Energy Information Administration. Four million barrels per day of Saudi oil exports go to Asia, while the U.S. imports about 600,000 barrels. The biggest importers in Asia are China at 1.3 million barrels and Japan at 1.2 million barrels. The Saudi government has not yet given an official timeline for when production will return to normal. According to The Wall Street Journal, Aramco expects to restore about a third of the lost oil output on Monday. Crude futures jumped sharply at the open Sunday. U.S. West Texas Intermediate popped by $6.45, or 11.6%, to $61.29 per barrel. Brent soared $7.79, or 13% to $68.04.
Why the Saudi oil attack is a ‘big deal’ that could be a ‘game changer’ in stock markets and crude prices - An intensifying Middle East conflict is threatening to throw the world’s energy market into disarray after weekend drone attacks destroyed parts of Saudi Aramco’s Abqaiq plant — one of the world’s largest processors of oil — and a separate nearby oil field. On Saturday, the drone attacks, directed at Saudi Arabian oil facilities that account for nearly 10 million barrels of crude-oil production, resulted in massive plumes of black smoke emanating from the oil field, and a shutdown that could lead to about 50% of its production being at least temporarily thrown offline. Prominent crude-oil strategist Phil Flynn at Price Futures Group told MarketWatch on Sunday that the drone strike was a “big deal” that could result in a major spike in crude-oil prices, because of the potential disruption to global supplies. Saudi Aramco describes Abqaiq as “the largest crude oil stabilization plant in the world,” and the Khurais is considered Saudi Arabia’s second-largest oil field (see map below):Helima Croft, global head of commodity strategy at RBC Capital Markets, said the weekend escalation could prove a “game changer” for the dynamic in the Middle East. “We contend that this morning’s drone attacks on Saudi Arabia’s all important Abqaiq processing facility (which has processing capacity of more than 7 [million barrels a day]) and the 1.5 mb/d Khurais oil field represents a game changer in the escalating Iranian regional standoff,” Croft wrote in a Saturday research report titled: “Saudi Arabia/Iran Crisis Guide Update: This is Your Wake Up Call…” Indeed, West Texas Intermediate crude for October delivery was surging 10.5%, up $5.78, to $60.63 a barrel on Sunday. Brent crude prices for November delivery, the global benchmark, initially shot up 18% as trading began late Sunday, but was most recently up $6.96, or 11.6%, to $67.18 a barrel. S&P Global Platts estimated that Brent oil, the international benchmark, could see a $5 or $10 price surge from its current levels.“While some commentators may call for triple-digit oil prices we would suggest that the sudden change in geopolitical risk warrants not only an elimination of the $5-10/Bbl discount on bearish sentiment, but adds a potential $5-10/Bbl premium to account for now-undeniably high Middle Eastern dangers to supply and the sudden elimination of spare capacity,” the Platts researchers wrote.“As such prices are likely to break out of the current $55-65/Bbl options range, to test the high $70s as currently supported by fundamentals,” the researchers said.Croft said Saturday’s major incident raises the risk of further disruptions to Middle East output that likely elevates the risk of oil prices vaulting higher (see map below via RBC Capital Markets showing recent incidents):
Saudi Arabia reportedly aims to restore one-third of lost oil output by Monday - Saudi Aramco is aiming to restore by Monday about a third of its crude output that was disrupted after drone attacks on two key oil facilities, The Wall Street Journal reported Sunday, citing Saudi officials familiar with the matter.The drone strikes on facilities in Abqaiq and Khurais eliminated 5.7 million barrels of production over the weekend. Officials believe that they can restore 2 million barrels by the end of the day Monday, contrary to earlier claims that full production would resume early this week.Aramco, the national oil company, has determined that its facilities were hit by missiles, people familiar with the matter told The Wall Street Journal. A U.S. government assessment determined that up to 15 structures at Abqaiq were damaged. Saudi Aramco has 35-40 days of supply to meet contractual obligations, a source close to the matter told CNBC. Experts said that the strikes could cause oil prices to rise up to $10 per barrel, which could cause as much as a 25 cent per gallon rise in gasoline prices. But the impact could be smaller depending on how quickly officials are able to restart oil production,
Satellite Images Reveal It Could Take “Months” to Fix Saudi Oil Facility - Upon the US release of declassified satellite images showing precision strikes on critical spheroids at the world’s largest oil processing facility at Abqaiq one market analyst alarmingly writes, “We think this is a months fix, not days/weeks. Oil going up even higher.” This after reports just before the satellite photos were released commonly said a minimum of “weeks” would pass before full Saudi Aramco production capacity comes back online. They appear to show approximately 17 points of impact on key infrastructure at the site after Yemeni Houthis claimed a successful drone strike of up to ten unmanned aerial vehicles with explosives. However, US and Saudi officials, still amid an ongoing investigation, have told reporters they are “certain” the attack actually originated from Iraq, especially as the debris and precision targeting show a level of “sophistication” which would link it to Iran’s elite IRGC. Dan Tsubouchi, chief market strategist at Calgary-based SAF Group, is predicting a fix that will take months based on the extent of the damage revealed in the new images, driving up oil to prices beyond the initial possibly short-sighted predictions this weekend. According to Fox News: The Washington-based Center for Strategic and International Studies in August had identified that region as the plant’s stabilization area. That zone included “storage tanks and processing and compressor trains — which greatly increases the likelihood of a strike successfully disrupting or destroying its operations,” the center wrote at the time. Neither Riyadh officials nor the state-run oil giant Saudi Aramco have yet to confirm the extent of the damage, but have only made assurances they will tap its global reserves network. Aramco’s president and CEO Amin Nasser announced Sunday, “Work is underway to restore production and a progress update will be provided in around 48 hours.”
The attacks on Saudi oil supply effectively wipe out the world's spare capacity, S&P Platts says - The attacks on critical oil production facilities in Saudi Arabia over the weekend will effectively wipe out the world’s spare oil capacity, an expert from S&P Global Platts said on Monday.An oil processing facility at Abqaiq and the nearby Khurais oil field were attacked on Saturday, knocking out 5.7 million barrels of daily crude production — or 50% of the kingdom’s oil output. That’s more than 5% of global daily oil production.The country’s national oil company, Saudi Aramco, has 35 to 40 days of supply to meet contractual obligations, according to a source close to the matter. Saudi Aramco reportedly aims to restore about a third of its output, or two million barrels, by Monday.“This heightens the risk premium, it puts a lot of pressure on the supply side,” said Sarah Cottle, global head of market insight at S&P Global Platts.“This incident effectively eliminates the world’s spare capacity,” Cottle told CNBC’s “Squawk Box” on Monday, though she added the longer-term outlook is bullish due to the immediate need to draw down on crude stockpiles.Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel. By 0940 GMT, the contract was at $65.77, up $5.55 or 8.4%.U.S. West Texas Intermediate (WTI) futures climbed as much as 15.5% to $63.34. The contract was later at $59.54, up $4.69 or 7.88%. Cottle’s view was also borne out by energy consultancy Wood Mackenzie. “This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members,” wrote Alan Gelder, vice president for refining, chemicals and oil markets at Wood Mackenzie.
Saudi Arabia says weapons used to attack its oil facilities were Iranian — Yemen’s Houthi rebels have threatened additional attacks on Saudi oil installations just days after claiming a crippling assault on facilities in the desert kingdom, the group’s al-Masirah TV reported Monday.The new threat came as U.S. officials were pointing fingers at Iran and its other proxies around the region and President Trump said the United States was “locked and loaded” and ready to respond.A Saudi military spokesman said Monday that a preliminary investigation found that the weapons used against the facilities were Iranian.In a televised briefing, Col. Turki al-Malki, a spokesman for a Saudi-led coalition in Yemen, also said the attacks did not originate in Yemen and that investigations were underway to determine the launch location. Iran has denied any involvement. China and European countries have warned against hastily assigning blame. The Iran-backed rebels warned foreigners to leave the area of Saturday’s attacks, which targeted installations belonging to the state-owned oil company, Aramco. The facilities could be attacked again at “any moment,” a Houthi military spokesman said.“We assure the Saudi regime that our long hand can reach wherever we want, and whenever we want,” spokesman Yahya Saree said in a statement, adding that drones modified with jet engines were used in the operation Saturday.The Houthis, who seized Yemen’s capital from the internationally recognized government in 2014, have been fighting a devastating war against a Saudi-led coalition in Yemen and, according to U.S. and Saudi officials, have received military and logistics support from Iran. U.S. officials, including Secretary of State Mike Pompeo, have blamed Iran directly for the attacks, saying that the assault did not come from Yemen. Pompeo did not offer evidence for the claim, which he tweeted on Saturday.The Houthis also have not provided any proof to support their assertion that they carried out the strikes on the Saudi oil installations, using what they said was a fleet of 10 drones.“We don’t need to provide evidence,” Mohammed Albukhaiti, another Houthi spokesman, said in a phone interview Sunday. U.S. allies Britain and Germany condemned the attacks Monday but refrained from assigning blame. “In terms of who is responsible, the picture is not entirely clear,” British Foreign Secretary Dominic Raab said, according to Reuters. “I want to have a very clear picture, which we will be having shortly. German Foreign Minister Heiko Maas told a news conference that Germany was working with its partners to find out who carried out the attacks, while in Beijing, China’s Foreign Ministry also warned against naming a culprit “without conclusive facts.”
We're Ready For "Full-Fledged" War: Iran Responds To US Accusation It Launched Saudi Oil Attack - After the United States was quick to point the finger at Iran for the early Saturday explosions that rocked Abqaiq facility and the Khurais field — forcing production to be shut and with it 5.7 million barrels a day of oil production lost — Iran has warned it stands ready for a "full-fledged" war.Iranian foreign ministry spokesman Abbas Mousavi slammed Washington for a "maximum pressure" strategy that has turned to "maximum lies," saying that because of the former's "failure [the US] is leaning toward maximum lies". FM Javad Zarif also said these were a continuation of efforts to pressure and shame into compliance under US hegemony. Iran denied the accusations, which followed photos circulating online which appeared to show cruise missile debris scattered in the Saudi desert outside the incapacitated oil facilities. Yemen's Houthi forces had claimed responsibility, saying it deployed ten drones in the successful targeting of the facilities. And separately an IRGC commander is reported to have reaffirmed that American military bases and aircraft carriers are crucially up to 2,000km around Iran and thus "within range" of Iranian missiles.The senior commander, Amirali Hajizadeh, said his country stands ready for a "full-fledged" war but he stopped short of directly mentioning the attacks. As quoted in regional and state media:On Sunday, the commander of Iran’s Revolutionary Guards Aerospace Force, Amir Ali Hajizadeh, was quoted by the semi-official Tasnim news agency as saying: “Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000 kilometers around Iran are within the range of our missiles,” according to Reuters. “Iran has always been ready for a ‘full-fledged’ war,” Hajizadeh added, without directly mentioning the attacks in Saudi Arabia.
Brent crude oil spikes the most in history after Saudi attacks, last up 13% - Oil prices soared after a coordinated attack hit the heart of Saudi Arabia's oil industry on Saturday, forcing the kingdom to cut its oil output in half. Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel at the open, the biggest intraday jump on record. By early afternoon, the contract was at $68.45, up $8.23 or 13.67%.U.S. West Texas Intermediate futures climbed as much as 15.5% to $63.34. The contract was later at $62.32, up $7.47 or 13.6%.An oil processing facility at Abqaiq and the nearby Khurais oil field was attacked on Saturday, knocking out 5.7 million barrels of daily crude production or 50% of the kingdom's oil output. Saudi Aramco, the national oil company, reportedly aims to restore about a third of its crude output, or 2 million barrels by Monday. However, Bloomberg News reported it could take weeks before Aramco restores the majority of its output at Abqaiq."While in the short term the direct physical impact on the market might be limited, this should move the market away from its bearish macroeconomic cycle and raise the risk premium in the market as funds reduce their short positions," said Chris Midgley, global head of analytics, S&P Global Platts. Oil prices came off their highs after President Donald Trump said he was authorizing the release of oil from the Strategic Petroleum Reserve to keep the markets "well-supplied." Abqaiq is the world's largest oil processing facility and crude oil stabilization plant with a processing capacity of more than 7 million barrels per day. Khurais is the second largest oil field in the country with a capacity to pump around 1.5 million barrels per day. In August, Saudi Arabia produced 9.85 million barrels per day. Yemen's Houthi rebels claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom. The Houthis have been behind a series of attacks on Saudi pipelines, tankers and other infrastructure in the past few years.
Oil jumps nearly 15% in record trading after attack on Saudi facilities - (Reuters) - Oil ended nearly 15% higher on Monday, with Brent logging its biggest jump in over 30 years amid record trading volumes, after an attack on Saudi Arabian crude facilities cut the kingdom’s production in half and fanned fears of retaliation in the Middle East. The attack heightened uncertainty in a market that had become relatively subdued in recent months and now faces the loss of crude from Saudi Arabia, traditionally the world’s supplier of last resort. A gauge of oil-market volatility hit its highest level since December of last year, and trading activity showed investors expect higher prices in coming months. Brent crude, the international benchmark, settled at $69.02 a barrel, rising $8.80, or 14.6%, its biggest one-day percentage gain since at least 1988. Brent futures saw more than 2 million contracts traded, an all-time daily volume record, Intercontinental Exchange spokeswoman Rebecca Mitchell said. U.S. West Texas Intermediate (WTI) futures ended at $62.90 a barrel, soaring $8.05, or 14.7% - the biggest one-day percentage gain since December 2008. “The attack on Saudi oil infrastructure came as a shock and a surprise,” said Tony Headrick, an energy market analyst at St. Paul, Minnesota, commodity brokerage CHS Hedging LLC. “I think the tables abruptly shifted in the way of the supply outlook and caught many who were short off-guard.” Saudi Arabia is the world’s biggest oil exporter and, with its comparatively large spare capacity, has been the supplier of last resort for decades. The weekend attack on state-owned producer Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut output by 5.7 million barrels per day and threw into question its ability to maintain oil exports. The company has not given a specific timeline for the resumption of full output. Two sources briefed on Aramco’s operations said a full return to normal production “may take months.” “I don’t think there really is enough to offset what is going to be offline here for a period of time, and you don’t even know the quantity of time,” U.S. intelligence officials said Monday that evidence pointed to Iran being behind the attack, raising the specter of a response that could further unsettle world markets and global supply. President Donald Trump said he was in “no rush” to respond, however, as he awaited more details. That marked a shift in tone from a tweet sent by Trump on Sunday, when he said the United States was “locked and loaded” and ready to respond..
Attack on Saudi Abqaiq finds the oil market's Achilles heel- Kemp (Reuters) - Oil security experts have worried for decades about the vulnerability of Saudi Arabia's Abqaiq processing complex to an attack by militants, foreign special forces or missile strikes. Oilfields make a difficult target because of the dispersed nature of the wells and associated infrastructure, but processing facilities and export terminals are concentrated and therefore more vulnerable. Abqaiq processes about half of all crude produced in the kingdom, including output from the supergiant fields of Ghawar (3.8 million barrels per day) and Shaybah (1.0 million bpd). Abqaiq is a single point of failure that could remove millions of barrels per day from the global oil market for an extended period if damaged badly enough. It has long been identified as the top security risk worldwide. For that reason, Abqaiq has been one of the most heavily protected places on the planet. Saudi Arabia has armed guards to protect the perimeter, and security forces actively target threats from foreign militants and domestic dissidents. In addition, the United States maintains a large Central Intelligence Agency station in the country and has military personnel stationed in the Eastern Province to help protect against external threats. Abqaiq has always been a much greater source of risk for the oil market than the Strait of Hormuz. But until the weekend attack, it was assumed to be a high-consequence, low-probability danger so was largely discounted. Saudi security forces foiled an apparent suicide car bomb attack on the facility in 2006, when guards opened fire on at least two cars carrying explosives as they tried to ram the gates, according to contemporary reports. As a result, security experts concluded Abqaiq was relatively safe in most circumstances short of an open military conflict with Iran; Saturday's attack has shown that assessment was wrong. The Abqaiq attack will therefore force a major re-evaluation of security risks in the oil market, where it has highlighted global vulnerability to a single point of failure.
Rick Perry says it's premature to say whether Strategic Petroleum Reserve is needed - Secretary of Energy Rick Perry told CNBC on Monday that it’s too soon to say whether the U.S. will need to use its emergency crude reserves to offset the surge in oil prices stemming from drone strikes on Saudi Arabia’s oil processing plants over the weekend.“I think we’re yet a little premature in making in comments on ... whether or not the SPR’s going to be needed until we get a real handle on the length of time that this facility is going to be down,” Perry told “Squawk on the Street.”The attack hit an oil processing facility at Abqaiq and the nearby Khurais oil field, knocking out production of 5.7 million barrels a day, or half of Abqaiq’s daily volume. President Donald Trump in response authorized the release of oil from the Strategic Petroleum Reserve, the nation’s emergency oil reserve, should it be needed to stabilize crude prices.“I think the Saudis are already saying that they’re going to be able to get a third of this production back before the closing of business today,” Perry said. “There’s going to be a spike in this, but again, I want to be really clear that the market out there has a fairly substantial amount of oil available,” referring to globe reserves.Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel at the open, the biggest intraday jump on record.“This disrupted without a doubt and put people on notice that you’ve got some bad actors in the world and you need to be addressing the security side,” the secretary said.Yemen’s Houthi rebels claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom. The U.S., however, has blamed Iran for the drone strikes on the facilities.
Hedge funds turned bullish on oil before Saudi attacks (Reuters) - Before the attacks on Saudi Arabia's oil installations on Sept. 14, hedge fund managers had started to become more bullish, or at least less bearish, about the prospects for oil prices amid hope for a trade truce between the United States and China. Hedge funds and other money managers purchased the equivalent of 122 million barrels of crude and fuels in the six most important futures and options contracts in the week to Sept. 10, the largest one-week increase for more than a year. The jump came after five months in which fund managers had been mostly sold oil, suggesting the market had reached a turning point even before the attack on Abqaiq. Portfolio managers were buyers of Brent (+52 million barrels), NYMEX and ICE WTI (+30 million), U.S. gasoline (+9 million), U.S. diesel (+9 million) and European gasoil (+21 million). Position changes were split fairly evenly between short-covering and the establishment of new long positions, according to an analysis of records published by regulators and exchanges. Fund managers cut short positions by 54 million barrels while boosting longs by 67 million (https://tmsnrt.rs/31Ae3Ba). The ratio of hedge funds' long to short positions, probably the most useful way of measuring their expectation of future price changes, jumped to 4.00:1 from 2.91:1 the previous week. Most of the bullishness seems to have come from increased hopes the United States and China would reach at least a temporary truce in their worsening trade conflict. Both governments announced confidence-building measures, including the postponement of some scheduled tariff increases, ahead of a planned resumption of trade talks in October.
China Slams Premature Blaming For Aramco Attack As US Hawks Argue Military Action - After Trump's Sunday "Locked and Loaded" comment in response to the early Saturday precision strikes on Saudi Aramco facilities from an as yet unconfirmed entity (the Houthis claimed immediate responsibility, with the US-Saudi coalition now blaming Iran), China on Monday slammed Washington finger-pointing as premature and irresponsible, though without directly mentioning the US.However, it was clear to where the words were directed given on Monday Washington's "Iran did it" narrative has advanced with rapid pace by the hour. Chinese Foreign Ministry spokeswoman Hua Chunying urged all parties to "restrain themselves" and called on western leaders eager to cast quick blame to wait for a "conclusive investigation". Hua said in the Monday press briefing from Beijing: “Pondering who is to blame in the absence of a conclusive investigation, I think, is in itself not very responsible. China’s position is that we oppose any moves that expand or intensify conflict,” according to Reuters.“We call on relevant parties avoid taking actions that bring about an escalation in regional tensions. We hope all sides can restrain themselves and can jointly safeguard the peace and stability of the Middle East.”The statement asserted that needless escalation in the region must be avoided, also after the attacks on the key Aramco facilities sent global oil prices soaring. Iran, for its part denied having any involvement as did Iraq or its pro-Iran paramilitary forces. An Iranian foreign ministry statement issued earlier on Sunday slammed US charges as "useless accusations" which are "meaningless and not comprehensible and are pointless
Why Would Iran Attack the Saudis NOW? - U.S. officials claim that the attacks against Saudi oil facilities were launched from Iranian soil. Are they right?We have no idea at this point, as the U.S. government hasn’t released any evidence.But given that the U.S. and 23 other countries have ADMITTED to carrying out false flag attacks before– including – it’s worth asking whether Iran or another country had more to gain from this attack …Indeed, U.S. officials have admitted to twice carrying out false flag attacks intended to frame Iran and justify regime change:
- (1) The CIA admits that it hired Iranians in the 1950′s to pose as Communists and stage bombings in Iran in order to turn the country against its democratically-elected prime minister.
- (2) CIA agents and documents admit that the agency gave Iran plans for building nuclear weapons … so it could frame Iran for trying to build the bomb.
And neocons have been planning on further regime change in Iran for more than 25 years.So it’s worth questioning this, at least in the absence of real evidence. This is especially true because – until a couple of days ago – it seemed like the U.S. and Iran were moving towards diplomatic talks.And Trump just fired the head “bomb Iran” cheerleader, John Bolton. So the odds of a peaceful solution to tensions with Iran seemed higher than they had been in yearsSo why would the Iranians “torpedo” the momentum towards diplomacy, and hand the U.S. a casus bellion a silver platter? Why now?
Costly Saudi defenses prove no match for drones, cruise missiles (Reuters) - Billions of dollars spent by Saudi Arabia on cutting edge Western military hardware mainly designed to deter high altitude attacks has proved no match for low-cost drones and cruise missiles used in a strike that crippled its giant oil industry. Saturday’s assault on Saudi oil facilities that halved production has exposed how ill-prepared the Gulf state is to defend itself despite repeated attacks on vital assets during its four-and-a-half year foray into the war in neighboring Yemen. Saudi Arabia and the United States have said they believe Iran, the kingdom’s arch-enemy, was probably behind the strike. On Tuesday, a U.S. official said Washington believed the attack originated in southwestern Iran. Three U.S. officials said it involved both cruise missiles and drones. Tehran has denied such accusations, saying that Yemenis opposing Saudi-led forces carried it out. Yemen’s Iran-aligned Houthi movement is alone in claiming responsibility. Iran maintains the largest ballistic and cruise missile capabilities in the Middle East that could overwhelm virtually any Saudi missile defense system, according to think-tank CSIS, given the geographic proximity of Tehran and its regional proxy forces. But even more limited strikes have proved too much for Saudi Arabia, including recent ones by Houthis who claimed successful attacks on a civilian airport, oil pumping stations and the Shaybah oilfield. “We are open. Any real facility has no real coverage,” a Saudi security source said. The Sept. 14 assault on two plants belonging to state oil giant Saudi Aramco was the worst on regional oil facilities since Saddam Hussein torched Kuwait’s oil wells during the 1990-91 Gulf crisis. The company said on Tuesday that production would be back to normal quicker than initially feared, but the attack nonetheless shocked oil markets. Riyadh said preliminary results indicated the weapons used were Iranian but the launch location was still undetermined. Authorities initially specified drones, but three U.S. officials said the use of cruise missiles and drones indicated a higher degree of complexity and sophistication than initially thought.
A View from the Brink --Kunstler -- Welcome to the world where things don’t add up. For instance, some people did some things to the Saudi Arabian oil refinery at Abqaiq over the weekend. Like, sent over a salvo of cruise missiles and armed drone aircraft to blow it up. They did a pretty good job of disabling the works. It is Saudi Arabia’s largest oil processing facility, and for now, perhaps months, a fair amount of the world’s oil supply will be cut off. President Trump said “[we] are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!” Exclamation mark his. How many times the past few years has our government declared that “we have the finest intelligence services in the world.” Very well, then, why are we waiting for the Kingdom of Saudi Arabia to tell us who fired all that stuff into Abqaiq? Whoever did it, it was unquestionably an act of war. And, of course, what are we going to do about it? (And what will some people do about it?) Let’s face it: the USA has had a hard-on for Iran for forty years, ever since they overthrew their shah, invaded the US embassy in Tehran, and took fifty-two American diplomats and staff hostage for 444 days. On the other hand, the Arabians and Iranians have had a mutual hard-on for centuries, long before the Saud family was in charge of things, and back when Iran was known as Persia, a land of genies, fragrant spices, and a glorious antiquity (while Arabia was a wasteland of sand populated by nomads and their camels). The beef was formerly just about which brand of Islam would prevail, Sunni or Shia. Lately (the past fifty years) it has been more about the politics of oil and hegemony over the Middle East. Since the US invaded Iraq and busted up the joint, the threat has existed that Iran would take over Iraq, with its majority Shia population, especially the oil-rich Basra region at the head of the Persian Gulf. The presence of Israel greatly complicates things, since Iran has a hard-on for that nation, too, and for Jews especially, often expressed in the most belligerent and opprobrious terms, such as “wiping Israel off the map.” No ambiguity there. The catch being that Israel has the capability of turning Iran into an ashtray. The world has been waiting for a major war in the Middle east for decades, and it might have one by close of business today. Or perhaps some people will do nothing. The Iran-backed Houthi rebels of Yemen supposedly claimed responsibility for the attack. That’s rich. As if that rag-tag outfit has a whole bunch of million-dollar missiles and the knowledge and capacity to launch them successfully, not to mention the satellite guidance mojo. A correspondent suggests that the missiles were fired from a pro-Iranian military base in Iraq, with the Houthis brought in on flying carpets to push the launch buttons.
The Strike On Saudi Oil Facilities - Barkley Rosser - This is going to be a tentative post because there is much that remains unclear. What I am going to do is to make it clear that stories that are being told by US authorities and largely repeated by the MSM with little critical commentary is highly questionable. As it is, it looks like the economic impact of the knocking out of about 60 percent of Saudi oil processing capacity by an attack by 20 drones will not amount to too much. The Saudis have now announced that they should have 70 percent of their damaged production capacity back in operation within a week or two. The matter that remains very much in the air, with a threat of war breaking out worse than it is already happening, involves the source of the attack on the facilities in Khurais and Abqaiq. SecState Pompeo outright said the attack came from Iran. Supposedly US intelligence agencies are supporting this, although there seem to be doubts. Buried deep in the press reports are caveats suggesting that maybe not quite all the attacks came from there. Of course, it is essentially impossible to evaluate these claims as we know these agencies have their secret methods and sources they are not leaking. But then we see both the Saudis and President Trump holding back from fully going along with this report. So why might this be wrong? Well, at least one alternative version appears to have been decisively repudiated. That is that the attack came from Shia militias in Iraq. This theory was put forth by Bibi Netanyahu of Israel, perhaps as a desperate part of his reelection campaign, with it looking like he has not done well in that election, although the full outcome is still not known. But this apparently blatantly ridiculous report may be the beginning of the end of people taking publicly announced Israeli intelligence reports as things to be taken seriously. However, the more serious alternative to Iran as a source is the Yemeni Houthis. Almost certainly the drones were from Iran, although even that is not definitely certain. In any case several statements have come supposedly from US intel agencies that the Yemeni Houthis could not have done this, even though they themselves have been loudly claiming that they did it, while the Iranians are loudly denying that they did it. Supposedly this all distraction from the role of the Iranians. But Juan Cole has pointed out things that the media are simply not reporting things that suggest that indeed the Yemeni Houthis appear to have the capability. In particular in May the Houthis launched a drone attack on an oil pumping station at al-Duadimi, well over 800 miles from Sana’a. The sites struck in this attack are only another 100 miles further, and the Shehad 129 Iranian drone supposedly can travel a full 1100 miles. Why are we seeing no reports of this in the media?
Blain: "Someone Should Ask Why Saudi Is Doing So Badly In Conflict With The Unsophisticated Houthi Tribesmen" - As Washington scrambles for face-saving evidence to pin on Iran, there are some pretty fundamental questions to be asked about the weekend precision strikes on Saudi’s oil facilities.There are the obvious market effects to consider: While production might be swiftly repaired and resumed – the price spike is going to change behaviours dramatically in terms of energy trading and hedging. While there is capacity to cover lost production short-term, raising the threat level will change price expectations long-term. How quickly can the globe shift supply from the Middle East if this brews up into a full regional conflict? How could China scrabbling for new oil sources impact prices? The attack begs questions about oil inflation, global resilience to an oil shock, and has every analyst scribbling about his compares to previous oil shocks. And an oil shock in the week the Fed meets to discuss another US rate cut? Interesting….The success of the strike, (taking out the production facilities has been tried before, but never with such stunning success), cast doubts on both US and Saudi intelligence and competence. In terms of timing the attackers chose their moment spectacularly well.It was a precision attack on Saudi’s regional credibility – and by extension on Trump and the US. The competence of Trump’s buddy, de-facto ruler Crown Prince MBS is on the line. Saudi is the third highest defence spending nation at $69 bln, and ranks highest global spender in terms of 8.8% of GDP! So why is Saudi doing so badly in the conflict with supposedly unsophisticated Houthi tribesmen? Someone should probably be asking questions about what the recently arrived US forces sent by Trump and their Patriot missiles were up to. Clobbering Aramco just days after Crown Prince MBS effectively sacked the respected oil industry veteran Khalid al-Falih and replaced him with a political ally and head of the Saudi SWF, looks almost prescient. Without the proceeds of the Aramco sale – Saudi is in trouble trying to balance reform, growth and sentiment. It’s a gift to any internal Saudi dissent. This is a Morning Porridge I wrote earlier this year on Saudi and Aramco – bit out of date, but sums up the issues.
The Strike On Saudi Oil Facilities Was Unprecedented And It Underscores Far Greater Issues -The post-strike satellite images provided by the U.S. Government clearly show just how precise the weapons used were, punching near-identical placed holes into major components of Saudi Arabia's oil apparatus. In other words, this is not unguided artillery here, it can maneuver dynamically to approach a target from a direction that its targeters find most advantageous—either for kinetic effects, survivability, or deniability reasons. With that in mind, the attacks could have come from any vector-based on impact information alone—Iraq, Yemen, Iran, or even a boat in the Persian Gulf. The weapons could even have been launched from within a nearby friendly country by clandestine forces, although that is quite unlikely. And who is to say they all came from just one locale? Multiple types of weapons—cruise missiles, suicide drones, or even larger low observable drones capable of dropping their own weapons—could have been launched from completely different locations in a coordinated, multi-layer assault. Regardless of their origin, when I first saw the damage, I felt like drones were potentially part of the attack, but likely not the only weapons employed. In fact, it looked a lot like a cruise missile strike with some of those weapons being equipped with shaped charges for penetrating fortified structures and others being equipped with general high explosives warheads for greater effects against unfortified structures. Whoever planned the strike had a very good understanding of the facilities targeted and what their components do, as well as their vulnerabilities and propensity for secondary effects. In other words, it wasn't just showering a target area with explosive-laden drones or even picking some important-looking structures targeting those. The targeting was systemic in nature and high in quality. That brings us to my next point, one you probably also thought to yourself when this happened—this was an unprecedented attack. The Department of Defense was ridiculously asleep at the wheel regarding this threat and is now scrambling to play catchup. Anyone who says differently is straight-up lying. It's well established what non-state actors can already do with relatively low-end unmanned aircraft technology—Houthi rebels alone have been using suicide drones for two and a half years—just imagine what a peer state will be able to do in the very near future. Instead of a mass of individual suicide drones layered in with other weapons, like cruise missiles, attacking a target simultaneously, imagine a swarm that is fully networked and works cooperatively to best achieve their mission goals, including jamming or killingair defenses in order for the swarm to make it to its final destination. America's adversaries are all too aware of this game-changing potential and the lack of defenses to counter it in any robust manner.
Saudi Oil Attack: What You’re Not Being Told -- We must ask ourselves how—while under the watchful eye of the world’s leading military superpower—was it possible for the world’s largest oil processing facility to be targeted so heavily and in such dramatic fashion? As stated by the Council on Foreign Relations (CFR), “protecting Saudi Arabia and other Persian Gulf producers has been a cornerstone of U.S. foreign policy for decades” as “providing security for the oil-rich Persian Gulf region has been a U.S. priority since World War II.”The Brookings Institution further argues that deterring Iran’s ability to encroach on Saudi oil fields is one of the main reasons for a continued American military presence in the region. To that end, the U.S. even provides Saudi terminals with sophisticated U.S.-made Hawk surface-to-air missiles. According to an estimate by Securing America’s Future Energy (SAFE), the U.S. spends approximately $81 billion a year protecting oil supplies around the world. This calculation is allegedly on the conservative side, as it doesn’t include the full costs to “protect” oil fields in Iraq, for example. This time last year, the U.S. president launched one of his infamous Twitter tirades in which he claimed the US was protecting countries in the Middle East all the while those same countries push for “higher and higher oil prices.” It is hard to imagine he could have meant anyone besides Saudi Arabia. Bearing in mind that, not too long ago, the U.S. deployed 500 troops to the Kingdom for the first time since 2003 as a show of strength in Washington’s spat with Iran. With so much support, even if the U.S. and Saudi Arabia were unable to deter or defend from such an attack, surely they would have at least have evidence of how it was perpetrated. And if that evidence does indeed exist, why was it not quickly presented in lieu of crying “Iran” (which is starting to sound a lot like crying “wolf”). A handful of photos and anonymous statements are not going to cut it this time around.
'Sophisticated actor' targeted Saudi oil facility, says expert --Bob McNally, founder and president of Rapidan Energy group, and Jason Bordoff, former special assistant to President Obama, join “Squawk on the Street” to discuss the attack on a Saudi Arabian oil facility.
Saudi oil attacks came from southwest Iran, U.S. official says, raising tensions (Reuters) - The United States believes the attacks that crippled Saudi Arabian oil facilities last weekend originated in southwestern Iran, a U.S. official told Reuters, an assessment that further increases tension in the Middle East. Three officials, speaking to Reuters on condition of anonymity, said the attacks involved cruise missiles and drones, indicating that they involved a higher degree of complexity and sophistication than initially thought.The officials did not provide evidence or explain what U.S. intelligence they were using for the evaluations. Such intelligence, if shared publicly, could further pressure Washington, Riyadh and others to respond, perhaps militarily. Saudi state television said the Saudi Defense Ministry will hold a media conference on Wednesday that will show evidence of Iran’s involvement in the Aramco attacks, including the use of Iranian weapons.Iran denies involvement in the strikes. Iran’s allies in Yemen’s civil war, the Houthi movement, claimed responsibility, saying they struck the plants with drones including some powered by jet engines.U.S. President Donald Trump on Monday said it looked as if Iran - which has a long history of friction with neighbor Saudi Arabia - was behind the attacks. But in a sign that U.S. allies remain unconvinced, French Foreign Minister Jean-Yves Le Drian said he was unsure if anyone had any evidence to say whether drones “came from one place or another.”
Is A Full-Blown War In The Persian Gulf Inevitable? - Iran has been able to counter U.S. President Trump’s maximum pressure strategy by taking the challenge to the next level. With a big bang, the global oil market has been forced to rethink the current fundamentals and future prospects, asSaudi Arabia’s most critical infrastructure, the Al Abqaiq gas-oil separation plant (GOSP), was hit by drone strikes over the weekend. After neglecting or outright ignoring increased geopolitical risks and new technological challenges, culprits have hit Abqaiq, which is not only the heart of the Saudi Aramco oil and gas infrastructure, but also the center of the global oil market. Until now, financial analysts have paid little attention to the geopolitical risk premium, and last week’s EIA/EIA and DNV reports continued to focus on the ‘bearish’ demand side of the market. Still, as fundamentals contrast analysis, geopolitical and security facts on the ground could now completely change the constellation. As long as hydrocarbons are the leading source of energy in the world, oil and gas infrastructure will remain a primary target for terrorists, cybercrime and state actors. Hardliners in Iran, Iraq, and Yemen, will be smiling, as the low-key and low-tech attack on Abqaiq has had a devastating result. With one stroke, market optimism about the removal of U.S. Hawk National Security Advisor Bolton and rumors about a Trump – Rouhani summit have evaporated. Despite warnings that the U.S.-Iran crisis is far from over, oil prices fell last week after U.S. President Trump fired Security Advisor John Bolton. Saturday’s attacks will not only disrupt de-escalation efforts but they have also fueled the anti-Iran front in the U.S. and abroad. Tehran backers, most probably IRGC leadership and proxies in Iraq, Yemen, and Lebanon, have been able to shock the oil market and have indirectly supported the Hawks in Washington and the Middle East. The Abqaiq attack, removing 5 million bpd of Saudi’s production, also removed doubts surrounding the so-called “Crying Wolf” approach of Washington and its Arab allies. The OPEC leader and its allies are under threat. U.S. Foreign Secretary Pompeo was quick to point the finger at Iran, but Tehran has not yet been caught red-handed. The reactions of the Arab world are clear, full condemnation and preparation for military actions. At the same time, without the U.S., Egypt or Israel, no unilateral actions against Iran or proxies will be taken. What should be more worrying is that culprits were able, with relatively low technology arms, to bring down a major OPEC producer. Companies and governments should address these new types of threats, as the Abqaiq attack can be repeated without difficulty.
Aramco Forges Ahead With IPO Work After Attacks -- It’s still business as usual for the bankers hired to sell a piece of Saudi Aramco in the wake of attacks on its biggest facilities that slashed oil output by half, according to people with knowledge of the matter. For financiers hired to get the deal done, the real difficulty in finding buyers to pay top dollar in the world’s biggest initial public offering will emerge only if there are follow-up bombardments, the people say. Those would heighten the risks that bankers say are just a cost of doing business in the region and that some analysts say are being ignored for the sake of completing this trophy transaction. For now, the energy giant aims to hold analyst presentations as planned and hasn’t signaled any delay to executives in a listing envisioned on the Saudi stock exchange as early as November, the people said, asking not to be identified because the matter is sensitive. Aramco was considering holding presentations the week of Sept. 22, Bloomberg News previously reported. But the magnitude of the attacks, claimed by Yemen’s Iran-backed Houthi rebels, make the chances of the IPO happening in the coming months unlikely, according to one of the people. The extent of any delay would depend on how long Aramco takes to restore its full production, another person said. Aramco lost about 5.7 million barrels per day of output. A spokesman for Saudi Aramco didn’t immediately respond to requests for comment. Saturday’s strikes, just days after Aramco hired banks including Goldman Sachs Group Inc. and Morgan Stanley, dealt a blow to the company that had been speeding up preparations for the IPO. The attacks on the world’s biggest crude-processing facility and the kingdom’s second-biggest oil field also risk reducing valuation of Aramco, which Crown Prince Mohammed bin Salman has put at over $2 trillion, according to analysts. “There’s a 70% plus chance of delay of the Aramco IPO if they want a higher valuation,” said Mohammed Ali Yasin, the chief strategy officer at Al Dhabi Capital in Abu Dhabi. “The cost of risk that investors were factoring in on Aramco prior to this attack completely needs to change going forward.”
Energy Expert Warns Oil Shocks Hit The Economy With Incredible Speed, Usually Within Thirty Days - The lasting damage from the weekend's attacks on Saudi oil infrastructure is yet to be fully assessed. Having said that, we can make some broad statements about supply outages and economic cycles.Although we tend to forget it, almost all of the major US recessions since 1945 have been triggered by wars in the Middle East involving Persian Gulf countries and oil politics.Specifically:
- The 1956-1957 Suez Crisis led to the closing of the Suez canal and rapidly precipitated a recession in the advanced economies
- The Yom Kippur War of 1973 led to an embargo on oil exports to the US and other western countries, precipitating the first US post-peak oil shock
- The Iran-Iraq War created another price spike, triggering the Second Oil Shock, two back-to-back recessions in the US (1979-1983)
- Price increases associated with Saddam Hussein's preparations for the First Gulf War tipped in the US into recession in 1991
- The Arab Spring of 2011 created supply shortages which sent oil prices back over $100/barrel, leading to a two year recession in Europe
In recent times, only the 2001 Dot.com bust and the 2008 oil price spike were not associated with supply outages related to a conflict in the Middle East. A conflict-induced recession would not be an exception to the rule, but rather the typical trigger ending a late stage expansion in the west. Oil shocks hit the economy with incredible speed, usually within thirty days. The magnitude necessary to precipitate a price spike and a resulting recession is probably less than a loss of 3 mbpd, 3% of global supply. Over the weekend, Saudi outages totaled 5.7 mbpd. The oil price would have to reach around $110 / barrel to push the world into recession, before taking into consideration the phase of the business cycle. The closest parallel is 1991, when a brief oil price spike pushed an already tottering US economy into recession. The futures curve as of this morning can be seen on the graph below.
The spike in oil prices will have to get a lot worse before it wrecks the economy - Energy prices surged Monday following some stunning developments in the Middle East, but it likely will take quite a bit more before having a broader effect on the economy. West Texas Intermediate crude briefly rose more than 11% to above $60 a barrel following the drone attack on Saudi-held oil interests, but the jump was kept in check through the session amid expectations that in a worst-case scenario, the U.S. would simply open up its strategic reserve to hold back prices. Even if the shock waves continue to reverberate from the conflict — international benchmark Brent crude rose even higher Monday — the long-ranging implications are not expected to be pronounced. The “level to watch” is around $80 a barrel, said Nick Colas, co-founder of DataTrek Research. The current spike, he said, is likely “unsustainable.” “As dramatic as the weekend’s events may be, it’s not like Iran or its surrogates actually took over Saudi oil fields, as was the case in 1990 with Iraq/Kuwait,” Colas said in a his daily note to clients. “Saudi Arabia has every incentive to get production back online, secure its facilities better, and return to full production. And, of course, the US has its Strategic Petroleum Reserve to tap as well.” Even the $80 level might not mean a pronounced broader downturn for the economy. Colas points out that of the recessions the U.S. has seen dating back to the early 1980s, none has come without an oil spike of at least 90%. The Great Recession, for instance, saw a 96% move, while the dot-com bust featured a 141% surge and 1990′s was preceded by a 96% jump.
Oil slips as market assesses fallout from Saudi attack -- Oil prices slid on Tuesday, although the market remains on tenterhooks over the threat of a military response to attacks on Saudi Arabian crude oil facilities that halved the kingdom’s output and prompted a price spike not seen in decades. Saturday’s attacks raised the prospect of a major supply shock in a market that in recent months has focused on demand concerns due to the pressure on global growth from an ongoing U.S.-China trade dispute. Saudi Arabia is the world’s top oil exporter and has been the supplier of last resort for decades. Brent crude was down 36 cents, or 0.5%, at $68.66 a barrel at 0930 GMT, and West Texas Intermediate was down 57 cents, or 0.9%, at $62.33 a barrel. Earlier, the crude benchmarks both fell by around 2%. On Monday, the prices surged nearly 20% in intraday trading in response to the attacks, the biggest jump in almost 30 years, before closing nearly 15% higher at four-month highs. Saudi energy minister Prince Abdulaziz bin Salman will hold a news conference at 8.00 pm local time (1700 GMT).State-owned producer Saudi Aramco has not given a specific timeline for the resumption of full output. “All eyes will be on the Saudi news conference,” said Samuel Ciszuk, founding partner at Stockholm-based ELS Analysis. “We need a proper damage assessment, we need to see a recovery plan. Before that, we don’t really know how much oil will be offline for how long and that’s the basic question people having been posing since Saturday.” The attacks on Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut production by 5.7 million barrels a day, the largest single supply disruption in half a century, and threw into question its status as supplier of last resort. The fallout in Asia, the largest buyer of Saudi crude, has been varied, with some refineries expected to receive their allocated volumes for October, and other importers being told of delays or being offered alternative grades.
Oil supply fully back by end of Sept, Aramco IPO on track, Saudis say -Saudi oil production will be fully back online by the end of September, the kingdom’s energy minister, Prince Abdulaziz bin Salman, told the media during a news conference in Jeddah on Tuesday, sending oil prices down by more than 6% just a day after their biggest jump in history.The world’s largest crude oil processing facility and the heartbeat of Saudi Arabia’s energy industry was targeted in drone and missile attacks early Saturday morning that knocked out more than half of the OPEC kingpin’s global daily exports.Fifty percent of the crude production cut from the attack has been restored in the past two days, bin Salman said, adding that production capacity would reach 11 million barrels of crude per day (bpd) by the end of September and 12 million bpd by the end of November. The kingdom’s crude exports won’t decrease, the minister said — rather, inventory stocks will be drawn down in order to meet export commitments.“We are in the process to bring back oil refining to full capacity,” bin Salman said. “The company will honor all of its commitments to its customers this month by drawing from its reserves of crude oil and further modified some of its oil until the production capacity of the country is up to 11 million barrels a day by the end of September and up to 12 million barrels in November.”Preparations for Saudi state oil giant Aramco’s highly anticipated initial public offering will also continue apace, Aramco Chairman Yasir al-Rumayyan said, sitting beside the energy minister.“The IPO is a commitment by the shareholder, the government of Saudi Arabia, and we think the IPO will continue as is, we are not going to stop anything,” al-Rumayyan said. “This would make us even be firm when it comes to taking the company public, so I think anytime in the coming 12 months we’ll be ready as per the market opportunity.” The kingdom reportedly plans to list 1% of Aramco on its local stock exchange before the end of this year and another 1% in 2020 as first steps ahead of a public sale of roughly 5% of the company, which is the largest in the world.
Detailed satellite photos show extent of 'surgical' attack damage to Saudi Aramco oil facilities — Satellite photos released by the U.S. government and DigitalGlobe reveal the surgical precision with which Saudi Aramco’s oil facilities were struck in attacks early Saturday. The strikes, which unidentified U.S. officials have said involved at least 20 drones and several cruise missiles, forced Saudi Arabia to shut down half its oil production capacity, or 5.7 million barrels per day of crude — 5% of the world’s global daily oil production. The images, first obtained by The Associated Press, show that at least 19 strikes were launched and 17 actually hit targets. This image provided on Sunday, Sept. 15, 2019, by the U.S. government and DigitalGlobe and annotated by the source, shows damage to the infrastructure at Saudi Aramco’s Abaqaiq oil processing facility in Buqyaq, Saudi Arabia. The attacks were “extremely surgical,” Samir Madani, co-founder of satellite tracking firm TankerTrackers.com, told CNBC on Monday. Analysts have identified at least 17 hits, which targeted 14 storage tanks and three processing trains. “Those punctured tanks — same position on all of them,” Madani said. Photos show hits on several “spheroids” used to process crude oil, which analysts say reveal pinpoint accuracy. The images also reveal fires from blasts elsewhere in the facility. Saudi Arabia’s Abqaiq facility in its eastern province is the world’s largest crude oil stabilization plant, with a processing capacity of more than 7 million bpd. Its Khurais oilfield, which was also hit, is the kingdom’s second-largest with a capacity to pump around 1.5 million bpd. Yemen’s Houthi rebels claimed responsibility the attack, but U.S. Secretary of State Mike Pompeo has labeled Iran as the culprit, a claim Tehran denies as “unacceptable” and “pointless.” The Saudi-led coalition fighting the Houthis announced Monday that preliminary results of an investigation indicated that the weapons used are Iranian and were not launched from Yemen. Madani’s analysis found that the strikes came from a west-north-west direction, which is consistent with that of U.S. officials. Houthi-controlled territory in Yemen, by contrast, is located to the southwest of the facilities. Coalition spokesman Col. Turki al-Maliki said investigators were still trying to determine the launch location. “It’s a bit alarming that these folks got through. We looked at those photos that were released by the Trump administration — they were exquisitely precise, they knew exactly what to hit, they hit it perfectly,”
Who Can Boost Supply to Offset Saudi Attack? - Here is a list of countries that could boost crude production to offset losses from Saudi Arabia in the event that the disruption to supplies from the attacks on its Abqaiq and Khurais processing facilities lasts longer than initially expected. It’s not a long list and much may not be accessible. The attacks cut Saudi production by 5.7 million barrels a day and officials at state oil company Saudi Aramco have become less optimistic on the pace of output recovery. The maximum spare capacity that could be brought into production in the coming weeks is estimated at about 3.9 million barrels a day.That figure should be treated as an exercise in optimism, though. It includes restarting production from the Neutral Zone shared by Saudi Arabia and Kuwait, as well as tapping Saudi Arabia’s own spare capacity, much of which may also have to be processed at the Abqaiq or Khurais facilities and therefore be unusable.
- Saudi Arabia:
- August production: 9.83 million barrels a day
- Production capacity: 11.5 million barrels a day
- Usable spare capacity: up to 1.67 million barrels a day
- United Arab Emirates:
- August production: 3.07 million barrels a day
- Production capacity: 3.4 million barrels a day
- Usable spare capacity: 200,000 to 330,000 barrels a day
- Kuwait:
- August production: 2.68 million barrels a day
- Production capacity: 3.15 million barrels a day
Oil prices tumble after Saudi Arabia says production is coming back online - Oil prices dropped sharply Tuesday, following Monday's surge that sent shock waves around the world. US oil futures settled down 5.7% at $59.24 a barrel. It was the worst one-day drop for US oil since August 1, according to Refinitiv. Oil prices initially fell after Reuters reported Saudi Arabian oil production would return to normal within two to three weeks. Tuesday afternoon, Saudi Energy Minister Abdulaziz bin Salman said the country's oil exports would not fall in September, as the kingdom will rely on reserves to keep exports stable.Investors took that as a positive sign about the impact of the weekend's attacks on global oil supply.Brent crude, the international benchmark, settled down 6.5% at $64.55. On Monday, oil prices shot up more than 14%. US stocks finished slightly higher, eking out gains just before the market closed. Stock investors' focus is turning from oil to the Federal Reserve, which is beginning a two-day monetary policy meeting that will culminate in its interest rate update on Wednesday. Expectations for a quarter-percentage-point rate cut have dropped to less than 50%, according to the CME's FedWatch tool. That's down from 92% last week, when the majority still expected rates to be slashed. A half percentage point cut is no longer priced in at all. "There have been a variety of explanations for the change in expectations, be it stronger data last week, improved risk appetite, trade war optimism and even higher inflation potential following the oil price spike," said Craig Erlam, senior market analyst at Oanda.
Saudi Arabia's 'PROOF' that Iran carried out oil strike: Kingdom reveals wreckage of drones and cruise missiles it claims is 'undeniable evidence' Tehran is to blame for attack - Saudi Arabia has today displayed remnants of drones and missiles it said were used in attacks on its oil facilities and described them as 'undeniable' evidence that Iran was involved.Defence Ministry spokesman Colonel Turki al-Malki said a total of 25 drones and missiles including Iranian Delta Wing unmanned aerial vehicles were used during the attack on the Abqaiq refinery and Khurais oil field. He said seven missiles either failed to hit their targets or failed to explode, with wreckage of several recovered from the desert. “The attack was launched from the north and unquestionably sponsored by Iran,' he told a news conference. However, he said Saudi Arabia has not yet managed to establish the exact launch site for the attack but was confident they would find it. It comes after Iran warned America that any military strike will be met with a 'crushing' response as the two countries square off over the Persian Gulf following an attack on Saudi Arabia's oil facilities. Tehran added that it could target 'more extensive areas than the origin of the attack' in retaliation for any US strike.President Trump has already ordered a significant increase in sanctions on Iran following the blasts at the Abqaiq refinery and Khurais oil field on Saturday, which the US and Saudi blame on Tehran, and is said to be considering military options.Meanwhile Crown Prince Mohammed bin Salman described the strike as an attack on the global economy in telephone calls with other world leaders on Wednesday.Speaking to France's Emmanuel Macron, who has offered to send investigators to the Arab nation to help uncover the source of the attacks, Salman said: 'These sabotage attacks were aimed at destabilising security in the entire region and damaging the global economy as a whole.' In another call with South Korea's Moon Jae-in, Salman described the attacks as 'a test of international resolve' which 'threaten global security and stability'.
Saudi oil attacks: All the latest updates -Al Jazeera - Tensions in the Middle East have escalated following drone attacks on two major oil facilities in Saudi Arabia.The pre-dawn attacks on Saturday knocked out more than half of crude output from the world's top exporter - five percent of the global oil supply - and cut output by 5.7 million barrels per day.Yemen's Houthi rebels, who have been locked in a war with a Saudi-UAE-led coalition since 2015, claimed responsibility for the attacks, warning Saudi Arabia their targets "will keep expanding".But US Secretary of State Mike Pompeo swiftly accused Iran of being behind the assault, without providing any evidence. The claim was rejected by Tehran that said the allegations were meant to justify "actions" against it.Saudi Arabia, meanwhile, promised to "confront and deal with this terrorist aggression", while US President Donald Trump hinted at possible military action.Here are the latest updates:
- Yemen rebel claim over Saudi oil attacks 'lacks credibility': France French Foreign Minister Jean-Yves Le Drian said that a claim by Yemeni rebels to have carried out attacks on two Saudi oil facilities "lacks credibility". "The Houthis, who are Yemeni rebels, announced that it was they who provoked this attack, which lacks credibility," Le Drian told France's CNews channel referring to the missile and drone strikes, which the US and Riyadh have blamed on Saudi's arch-foe Iran. "But given that there is an international investigation let's wait for the results," he added.
- Saudi envoy to Germany says all options on the table against Iran: The Saudi ambassador to Germany said all options were on the table in retaliation to attacks on Saudi Arabia's oil facilities that the kingdom has blamed on Iran. Asked about the possibility of a military strike against Iran, Prince Faisal bin Farhan Al Saud said: "Of course everything is on the table but you have to discuss that well". "We're still working on where they were launched from but wherever they came from, Iran is certainly behind them as Iran built them and they could only be launched with Iranian help," he told Germany's Deutschlandfunk radio.
- UAE joins US-led coalition to protect Middle East waterways: The United Arab Emirates says it has joined a US-led coalition to protect waterways across the Middle East after an attack on Saudi oil installations.The state-run WAM news agency quoted Salem al-Zaabi of the Emirati Foreign Ministry as saying the UAE joined the coalition to "ensure global energy security and the continued flow of energy supplies to the global economy."Saudi Arabia joined the coalition on Wednesday. Australia, Bahrain and the United Kingdom also are taking part. The US formed the coalition after attacks on oil tankers that US officials blame on Iran, as well as Iran's seizure of tankers in the region. Iran denies being behind the tanker explosions.
Oil traders reassess interruption of Saudi output- Kemp - (Reuters) - Brent oil futures prices have gyrated wildly as traders have tried to assess the impact of last week's attacks on Saudi Arabia's oil infrastructure on the actual availability of crude. Brent's six-month calendar spread surged to a backwardation of more than $5.50 per barrel on the first trading day after the attacks, the highest for six years, showing oil traders were anticipating severe shortages in the very short term. Since then the six-month spread has fallen to trade around $4 per barrel, though it is still significantly higher than the $2.70 reported before the attacks. The gap between short- and long-dated futures prices is believed by many traders to be a more useful indicator of the global production-consumption balance than the spot price (https://tmsnrt.rs/31uXMgF). Backwardation, when spot prices trade at a premium to prices for later delivery, is associated with under-production, a tight market and low and falling oil inventories. Contango, the opposite market condition when spot prices trade at a discount, is associated with over-production, a slack market and high and rising stockpiles. Even in the weeks before the attacks, Brent's backwardation had been ratcheting up as traders anticipated stocks would fall with continued output restraint from Saudi Arabia and the world economy dodging a recession. But the attacks supercharged the backwardation after Saudi Arabia's national oil company announced it had been forced to suspend production of 5.7 million barrels per day. More recently, the backwardation has eased as Saudi Arabia said output will return to normal by the end of the month, earlier than originally expected. In the meantime, Saudi Arabia has been supplying customers from its own inventories, which amounted to 180 million barrels at the end of July, to cover the shortfall in output. The United States and the International Energy Agency have also promised to make additional oil available from their emergency reserves if necessary, all of which has helped calm fears about shortages.
WTI Extends Losses After Surprise Crude Inventory Build - Oil prices traded down today on the back of confidence Saudi comments about the pace of recovery from the attack on its largest refinery.“During the two past days, we managed to contain the damage by recovering more than half of the production that we had lost during that terrorist attack,” Energy Minister Prince Abdulaziz bin Salman said at a briefing in Jeddah. “Thus the company will be able to meet all its commitments to customers this month by drawing on its crude oil reserves.”While all eyes will remain on Saudi production/supply, we suspect some marginal moves on the heels of inventory data (especially in light of potential storm disruptions).The market will be monitoring for more declines at Cushing, Okla., and overall U.S. crude inventory decreases after the startup of new Permian pipelines, says John Kilduff, partner at Again Capital. API:
- Crude +592k (-2.5mm exp)
- Cushing -846k
- Gasoline +1.6mm (-500k exp)
- Distillates +2.00mm (+500k exp)
After four straight weeks of draws, US Crude inventories showed a surprise 592k barrel build last week (and builds for gasoline and distillates), pressuring WTI prices even lower on the day... WTI hovered around $59 ahead of the API print and extended losses after the surprise build...
Oil Prices Edge Downward - West Texas Intermediate (WTI) and Brent crude oil prices on Wednesday continued their descent following the Saudi oil facility attack-induced surge early in the week. “Petroleum markets continue under the influence of the Saudi situation with the markets reacting in a manner not seen in a very long time on Sunday evening and then coming back down to earth yesterday,” said Steve Blair, senior account executive with the RCG Division of Marex Spectron. Blair noted that prices declined Monday amid reports from Reuters and then the Saudi that output would be restored sooner than expected, that 50 percent of production was already back online and that they would use storage to meet client commitments. The October WTI lost $1.23 to end the day at $58.11 per barrel. The benchmark traded within a range from $57.67 to $59.43. “October WTI has almost come back down to the top of the congestion range that the markets broke out of on Sunday evening and on Monday,” said Blair, referencing a daily WTI price chart. “Support seen beginning around the $57.40 level with further supports at $56.05 and $55.10 and the bottom of the congestion range around $53.70. Resistance levels a bit harder to glean with the huge upside move, but the best level seen stands around the $61 level.” Brent crude for November delivery shed 95 cents Tuesday to settle at $63.60 per barrel. Although the benchmark is also retreating, Blair commented that it has not yet moved as close the upside of the congestion range on its daily chart compared to WTI. “Some minor support seen around the $61.35 level with better supports nearer to $60, which is around the top of the most recent congestion,” Blair said. “Resistance seen around $64 with more as we approach $65.” Also declining during Tuesday’s trading was reformulated gasoline (RBOB). The October RBOB contract settled at $1.66 per gallon, reflecting a nearly two-cent decline.
Oil Algos Confused Despite Bigger Than Expected Crude Build - WTI has extended losses overnight following API's surprise crude build and President Trump appearing to ease off the war rhetoric and Aramco's words have eased market fears. “Saudi Aramco has so far shown great crisis-management skills and great resilience, keeping operations ongoing in the attacks’ aftermath and quickly mobilizing recovery and repair crews,” said Samuel Ciszuk, founding partner of consultants ELS Analysis in Stockholm. However, inventories remain a key barometer. DOE:
- Crude +1.06mm (-2.5mm exp)
- Cushing -647k
- Gasoline +781k (-500k exp)
- Distillates =437k (+500k exp)
A surprise crude build last night from API was confirmed by DOE data which indicated a bigger build of 1.06mm barrels (along with builds in gasoline and distillates stocks)... Crude production remains near record highs despite the ongoing decline in rig counts
Saudi Arabia Still Unsure of Launch Site for Oil Attacks-- Saudi Arabia said attacks on its critical oil infrastructure were “unquestionably sponsored by Iran” but stopped short of saying the strikes were launched directly from or by the Islamic Republic, claims that could have propelled a drift toward war. With parts of drones and missiles recovered from the attack sites at Abqaiq and Khurais on display, Saudi Defense Ministry spokesman Turki al-Maliki on Wednesday showed maps aimed at proving the strikes originated from the north and could not have been launched by Yemen’s Iranian-backed Houthi rebels, who shortly after repeated their claims of responsibility. “Despite Iran’s effort to make it appear so,” the attack didn’t originate from Yemen, Maliki said. “Data analysis of the attack sites indicate weapons of Iranian origin.” Iran has denied it was involved in the worst attack in Saudi Arabia’s history and President Hassan Rouhani said earlier Wednesday that his country did not want war. The Saudi defense official’s comments, and moves by the U.S., suggested the two allies were also working to deescalate tensions in the region. President Donald Trump, who had initially declared the U.S. “locked and loaded” for a response, said Wednesday he was tightening sanctions on Iran. Iran’s economy is already under severe pressure from existing sanctions, though analysts said there were still a number of potential targets for restrictions. Iran is gradually scaling back its commitments under the deal and has said it will not reopen talks without sanctions relief. Twenty-five pilotless aircraft and cruise missiles were used to attack the two sites, Maliki told reporters gathered in Riyadh. The weapons were of Iranian origin but Saudi Arabia was still working to pinpoint the exact launch point, he said. The range and accuracy of the weapons were beyond the capabilities of the Houthis, he added.
Japan defense minister: Not aware of any Iran involvement in Saudi attacks (Reuters) - Japan has not seen any intelligence that shows Iran was involved in the recent attacks on Saudi Arabian oil facilities, Japan’s new defense chief said on Wednesday. “We are not aware of any information that points to Iran,” Defense Minister Taro Kono told reporters at a briefing. “We believe the Houthis carried out the attack based on the statement claiming responsibility,” he added. Japan has maintained cordial ties with Iran even as relations between Tehran and Washington have deteriorated. Kono on Monday said Japan cannot participate in any military retaliation because of constitutional restraints and would instead pursue a diplomatic solution to the current crisis.
Shell Divests Stake in Saudi Refinery - Saudi Aramco has acquired Shell Saudi Arabia (Refining) Limited’s 50-percent interest in the SASREF refining joint venture for $631 million, Shell and Saudi Aramco reported Wednesday. The companies noted the acquisition follows receipt of all necessary regulatory consents. Located in Jubail Industrial City, Saudi Arabia, SASREF can process up to 305,000 barrels per day of crude oil and is one of the world’s largest export refineries, according to Shell’s website. The facility, which began commercial production in 1985, primarily produces liquefied petroleum gas, naphtha, kerosene, diesel, fuel oil and Sulphur. For Saudi Aramco, taking full ownership of SASREF will enable it to integrate the facility into its expanding downstream portfolio, a company executive stated when the transaction was announced in April of this year. The company also noted Wednesday that its long-term downstream growth strategy calls or increasing the complexity and capacity of its refineries. Meanwhile, Shell has stated the divestiture aligns with its ongoing efforts to integrate its refining portfolio with the company’s trading hubs and chemicals operations.
Saudi Arabia draws down oil stocks to maintain supply after attack (Reuters) - Saudi Arabia will try to maintain oil supplies to its major customers by drawing down crude stored at tank farms in the kingdom and in its global network while repairing and replacing installations damaged in the recent attacks. Saudi Arabia reported domestic crude stocks of 180 million barrels at the end of July, government data supplied to the Joint Organisations Data Initiative showed. Saudi Aramco, the national oil company, also maintains a few tens of millions of barrels of forward storage near its customers in leased tank farms in the Netherlands, Japan and Egypt. Aramco holds crude for strategic reasons to cover emergencies, and for operational purposes to ensure an uninterrupted flow of the right grades of oil to domestic refineries and overseas customers. Domestic stocks were relatively low at the end of July, having fallen by 50 million barrels (22%) since July 2018 and by 150 million barrels (45%) from their post-slump swollen peak in October 2015. The sustained drawdown over almost four years has left domestic stocks at their lowest level since 2007, numbers from JODI showed. (https://tmsnrt.rs/31t0Fyu) At the end of July, stocks were sufficient to cover 18 days’ worth of exports, domestic refinery requirements and direct crude burning in the kingdom’s power stations. Forward cover is down from a recent peak of almost 33 days in October 2015 and is close to the lowest level for over a decade. Stocks should enable the kingdom to maintain supplies to customers in the short term until installations at Abqaiq and Khurais can be repaired/bypassed, or alternative production and processing capacity can be brought online. Saudi Arabia’s energy minister said on Tuesday the kingdom had already managed to recover supply to customers to its pre-attack level — by implication using stored crude. The minister also predicted oil production would be fully restored to its previous level by the end of the month (“Saudi Arabia to restore oil output fully by end of September”, Reuters, Sept. 17).
To keep exports flowing, Saudi Arabia looks to import oil -Less than a week after a withering attack on the heart of Saudi Arabia’s oil industry, the country is pulling out all the stops to do what it has promised it always would: give customers every drop of oil they’ve ordered. Aramco, its state-owned oil giant, is reaching out to foreign producers for crude to send to its domestic refineries, so it can divert its own oil to foreign buyers, according to oil traders. It has also been buying other petroleum products, like refined fuels, from neighbors, reversing the region’s usual trade flow. .. Missiles knocked out roughly half of the country’s crude production, and the disruption to Saudi supplies is having knock-on effects all along the global oil-supply chain. To maintain its reputation as a reliable supplier, the world’s largest oil exporter is looking to buy crude oil from at least one of its neighbors and additional oil products from the global market, oil traders said. Brent crude oil was up 2.8%, at $65.36 a barrel, with minimal early day gains accelerating in the minutes after The Wall Street Journal broke the news that Saudi Arabia is importing oil products and had requested two million barrels of oil from Iraq. West Texas Intermediate futures were up 1.6%, at $59.01 a barrel.
Oil prices rise slightly as Saudi supply risks come into focus -- Oil prices rose slightly on Thursday, supported by supply risks brought about by last weekend’s drone attacks on Saudi oil infrastructure and a cut in U.S. interest rates. Brent crude futures gained 72 cents to $64.33 a barrel, while U.S. West Texas Intermediate crude settled up 2 cents at $58.13 a barrel. The attacks knocked down more than half of Saudi Arabia’s crude production and severely limited the country’s spare capacity, a cushion for oil markets in any unplanned outage. “Global available spare capacity is extremely low at present following the weekend attacks, leaving little room for additional outages, which tends to be price supportive,” UBS oil analyst Giovanni Staunovo said. Earlier this week Saudi Arabia set out a timeline for a resumption of full operations, saying it had restored supplies to customers at levels prior to the attacks by drawing from its oil inventories. But it said it would restore its lost production by the end of this month, and bring its output capacity back to 12 million barrels per day by the end of November. “These plans suggest Saudi Arabia will have no spare capacity for at least the next two and a half months and therefore no way to absorb any further shocks,” consultancy Energy Aspects said. Saudi Arabia, the world’s leading oil exporter, has said the crippling attack on its oil sites was “unquestionably sponsored” by regional rival Iran. U.S. President Donald Trump said there were many options short of war with Iran and added that he had ordered the U.S. Treasury to “substantially increase sanctions” on Tehran. Iran has denied involvement in the strikes. The head of the International Energy Agency said on Wednesday it saw no need to release emergency oil stocks as markets were well supplied.
Saudi Arabia to restore oil output fully by end of September: energy minister - (Reuters) - Saudi Arabia will restore its lost oil production by the end of September and has managed to recover supplies to customers to the levels they were at prior to weekend attacks on its facilities by drawing from its huge oil inventories. Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month. “Over the past two days we have contained the damage and restored more than half of the production that was down as a result of the terrorist attack,” Prince Abdulaziz told a news conference in the Red Sea city of Jeddah. He said the kingdom would achieve 11 million bpd capacity by end of September and 12 million bpd by end of November. “Oil supplies will be returned to the market as they were before 3:43 a.m. Saturday,” he said, adding that state oil giant Aramco had emerged “like a phoenix from the ashes” after the attack. He was referring to attacks on Saturday on state-owned oil company Saudi Aramco’s plants in Abqaiq and Khurais, including the world’s largest oil processing facility, which shut down 5.7 million barrels per day, which is more than half of Saudi Arabia’s production, or 5% of global output.
Saudi Arabia's pledge to quickly restore crude production has triggered a repricing of oil - Saudi Arabia’s pledge to fully restore crude production by the end of the month has prompted a flurry of oil market forecasters to reconsider their price projections. “The oil market is facing challenging times,” Carsten Fritsch, energy analyst at Commerzbank, said in a research note published Wednesday. “Recent attacks on oil facilities in Saudi Arabia have painfully demonstrated the risks to oil supply, which is why short-term price spikes are possible at any time.” But, citing weakening market fundamentals, Fritsch explained that the German bank does not consider the recent price surge to be sustainable. Instead, Commerzbank expects the price of Brent oil to fall to $60 per barrel next year. Energy Minister Prince Abdulaziz bin Salman said in a press conference Tuesday that the kingdom would soon have its oil supply back online after a series of drone attacks knocked out 5.7 million barrels of daily crude production. Brent crude futures, the international benchmark, traded at around $63.87 on Wednesday, down around 1%. The contract had previously soared as much as 19.5% at the start of the week, climbing to $71.95 a barrel. U.S. West Texas Intermediate (WTI) stood at $58.39 on Wednesday, more than 1.6% lower. The losses come less than 48 hours after WTI futures posted their biggest one-day climb since 2008.
Saudi oil attacks: Images show detail of damage - BBC News - Satellite images issued by the United States have revealed the extent of the damage to two key Saudi oil facilities attacked by drones at the weekend. The facilities came under attack at 04:00 (01:00 GMT) on Saturday. Online videos showed explosions and large fires at the Abqaiq oil processing facility. In a statement Saudi Arabia later announced the fires had been brought under control within hours, and no one had been killed or injured. However the fires led to the interruption of an estimated 5.7 million barrels in global oil supplies, according to the statement. Analysts have identified at least 17 hits. An unnamed senior US official told ABC News the attacks on the Abqaiq refinery had involved a dozen cruise missiles and more than 20 drones. Abqaiq oil refinery, Saudi Arabia A number of "spheroids" used to process crude oil were hit, apparently with pinpoint accuracy, and fires from blasts at other parts of the facility can also be seen. Analyst Anthony Cordesman from the Center for Strategic and International Studies suggests the attacks could have been carried out using relatively unsophisticated drones operating as "weapons of mass effectiveness". "It is virtually impossible to secure civilian facilities from a worker or visitor's capability to use a cell phone to get precise GPS coordinates, commercial satellite coverage is now very good, and there are many ways to produce the kind of image needed for terminal guidance from ordinary photos," he writes. US officials say the images show damage consistent with coming from a west-north-west direction, not Houthi-controlled territory which lies to the south-west of the refinery. Abqaiq is the world's largest oil processing facility, and about two-thirds of Saudi Arabia's total output is refined there. The facility refines crude oil pumped from the Ghawar field, and is connected to both the Shaybah oil field through a 636-km (395-mile) pipeline and an export terminal in Yanbu. Infrastructure at the site, which is about 180km south-west of Abqaiq, also sustained damage. Satellite images show two significant hits to two towers, with scorch marks visible on the ground from a significant fire. The Khurais oil field is believed to produce more than one million barrels of crude oil a day. It has estimated reserves of more than 20 billion barrels of oil, according to Saudi oil company Aramco. .
Saudi Arabia Reveals Damage to Giant Khurais Oil Field - Saudi Aramco revealed the significant damage caused by aerial strikes on its Khurais oil field and Abqaiq crude-processing plant last weekend, and insisted that the sites will be back to pre-attack output levels by the end of the month.Aramco took reporters for a first look inside the facilities, where equipment was scorched and ruptured by the assault on Saturday. In one area lay a pile of debris -- a mess of oil melted to asphalt, twisted and charred metal grates, and pieces of fire hose -- that stank of tar. While officials promised the plants would be repaired quickly, they also said they were still in the process of evaluating whether some equipment could be fixed or would have to be completely replaced. The Khurais field and processing plant resumed 30% of production within 24 hours of the strike and will produce 1.2 million barrels a day by the end of September, Fahad Al Abdulkareem, general manager for Aramco’s southern area oil operations, said at a briefing on Friday. Workers are there 24 hours a day to speed the repairs, but the site showed significant damage. The Khurais field has a maximum output capacity of 1.45 million barrels a day and processes all of its oil on site, according to Al Abdulkareem. The assault affected four of its crude-stabilization units -- 90-meter (300-foot) towers that reduce pressure and remove gas from the crude. One of the columns shown to reporters was a charred wreck, and at least one other was even more badly damaged, he said. Aramco also showed reporters pipes that had been pierced by fragments from the missiles, causing them to spew oil, feeding the fires. Workers were busy replacing segments of piping and insulation at the facilities, and conducting tests on the damaged crude-stabilization columns. The world’s biggest crude exporter has vowed a swift restoration of output at Khurais and Abqaiq after the attack by drones and missiles disabled 5% of global supply. There’s concern in the market about how long it will take the kingdom to fully restore lost production as it depletes inventories to meet supply commitments and operates without its usual buffer of spare capacity. The tour of the Abqaiq plant, which processes crude oil from fields including Ghawar, the kingdom’s largest, also showed extensive damages. The smell of natural gas and other hydrocarbons hung over some areas of the facility. A huge sheet of twisted metal that had been struck by missiles was laid out next to a damaged tank for reporters. The attacks seemed to target with high precision key equipment at both sites, shutting the plants completely even though majority of the facilities were untouched.
Saudi Arabia Partially Restores Output -- Saudi Arabia attempted to move beyond the worst oil disruption in its history, assuring the world that crude exports will not suffer, its damaged facility had partially restarted and production capacity would be back to normal within months. The long-awaited statement on Tuesday from the kingdom -- which before the strike pumped almost 10% of the world’s oil -- gives the market much-needed clarity after days of speculation over how severe was the damage at the Abqaiq plant. However, it’s slower progress than was initially expected and crude prices remain elevated as traders factor in higher risks for Saudi supply. “During the two past days, we managed to contain the damage by recovering more than half of the production that we had lost during that terrorist attack,” Energy Minister Prince Abdulaziz bin Salman said at a briefing in Jeddah. “Thus the company will be able to meet all its commitments to customers this month by drawing on its crude oil reserves.” Slow ProgressAbqaiq has restarted and is now processing about 2 million barrels a day, said Aramco Chief Executive Officer Amin Nasser. The facility should return to pre-attack levels of about 4.9 million barrels a day by the end of September, he said. Soon after the weekend attack, officials indicated that the majority of output would be restored within days, with weeks required to get back to full capacity. That outlook became more pessimistic in subsequent days as photos were released showing the scale of the damage at the crucial facility. Exports MaintainedThe minister and CEO assured customers that Aramco’s crude exports won’t be reduced this month because it will draw down strategic reserves. The kingdom also temporarily reduced the rate at which its domestic refineries process oil by about 1 million barrels a day, making more crude available for shipment overseas.
Fear Of An Iran War Sends Oil Prices Up - It was the wildest week for oil in recent memory. Prices spiked, fell back again, and then rose more modestly on Thursday and Friday. There are still question marks over Saudi Arabia’s ability to repair Abqaiq on as quick a schedule as it claims and Washington and Riyadh are considering their next steps following the attack, with more military action certainly a possibility. If oil prices move higher because of the outage in Saudi Arabia it could spark a higher rate of drilling in U.S. shale, but the likely increase in associated natural gas output is viewed as bearish for gas, according to analysts. “Appalachia producers in particular need to show restraint in order to keep the market balanced into 2020,” Goldman Sachs said in a research note. Natural gas prices have bounced off of their lows from a few months ago, but many see prices taking another downturn. A new pipeline from the Permian could capture a lot more gas that is being flared right now. Moody’s cut its medium-term gas price forecast, and downgraded Range Resources, Antero Resources, Gulfport Energy, and cut EQT’s outlook to negative. Citi said that a supply shock in the oil market, which could push up oil prices, could be occurring at the same time that equities tumble from their highs. The bank said that traders should sell their oil positions to finance bearish bets on equities. “Heightened geopolitics can be simultaneously negative for equity prices through the growth channel and positive for oil prices through supply shocks,” Citi analysts wrote. “Buy S&P 500 puts financed by oil puts.” Saudi Aramco had roughly 50 million barrels of oil in storage before the Abqaiq attack, enough to fill in for disrupted production until the end of the month, when repairs are expected to be completed. However, if the repairs take longer than expected, it would be much harder to cover the gap. “They probably have about one month of inventories,” said Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd. The loss of barrels from Aramco will take time to work its way through the system. “A lot of October arrival barrels were already on the water so the hole is going to show up toward late October,” one senior European oil trader told Reuters. “There has been a mad scramble on the paper markets but the physical scramble will come later.” The Saudi government is pressuring wealthy Saudi families to buy into the forthcoming IPO of Aramco. Sources told the FT that the wealthy were being “bullied” and “strong-armed.”
Oil prices rise as Saudi supply risks come into focus - Oil prices rose slightly on Thursday, supported by supply risks brought about by last weekend’s drone attacks on Saudi oil infrastructure and a cut in U.S. interest rates. Brent crude futures gained 72 cents to $64.33 a barrel, while U.S. West Texas Intermediate crude settled up 2 cents at $58.13 a barrel. The attacks knocked down more than half of Saudi Arabia’s crude production and severely limited the country’s spare capacity, a cushion for oil markets in any unplanned outage. “Global available spare capacity is extremely low at present following the weekend attacks, leaving little room for additional outages, which tends to be price supportive,” UBS oil analyst Giovanni Staunovo said. Earlier this week Saudi Arabia set out a timeline for a resumption of full operations, saying it had restored supplies to customers at levels prior to the attacks by drawing from its oil inventories. But it said it would restore its lost production by the end of this month, and bring its output capacity back to 12 million barrels per day by the end of November. “These plans suggest Saudi Arabia will have no spare capacity for at least the next two and a half months and therefore no way to absorb any further shocks,” consultancy Energy Aspects said.
Oil slips on trade fears but soars in week after Saudi attacks (Reuters) - Oil prices eased on Friday on renewed concern over the U.S.-China trade war, but futures still posted weekly gains, with Brent marking its biggest weekly increase since January, after an attack on Saudi Arabia’s energy industry last weekend. Brent crude LCOc1 futures fell 12 cents to settle at $64.28 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures ended 4 cents lower at $58.09 a barrel. Prices pared gains along with the stock and grains markets after Chinese agriculture officials that were due to visit U.S. farm states next week canceled their trip to Montana and Nebraska to return to China sooner than originally scheduled. The cancellation came as trade talks were held in Washington and U.S. President Donald Trump said he wanted a complete trade deal with the Asian nation, not just an agreement for China to buy more U.S. agricultural goods. For the week, however, Brent rose 6.7%, its biggest gain since January, while WTI gained 5.9%, the most since June. U.S. shale producers pounced on the chance to lock in future revenue for this year and next after oil prices surged by the most in 30 years early this week following the attack, sources familiar with the money flows said. Money managers raised their net long U.S. crude futures and options positions by 11,209 contracts to 220,758 in the week to Sept. 17, the U.S. Commodity Futures Trading Commission (CFTC) said. The oil market jumped nearly 20% on Monday in reaction to the Sept. 14 attack, which halved Saudi production and cut global supplies by about 5%. But prices have since pared most of those gains on assurances from the kingdom that it would restore lost production by the end of this month.
U.S. oil prices up 6% for the week, biggest weekly gain in 3 months - Oil futures ended lower on Friday, but tallied a gain of almost 6% for the week, the largest such rise in three months. As the Saudis reveal the extent of damages from the attacks on oil facilities last weekend, "the market mood has shifted to questioning how quickly production can be restored," Manish Raj, chief financial officer at exploration and production firm Velandera Energy Partners, told MarketWatch. "We are familiar with the repair and maintenance processes in oilfield services, and the damages appear to be far worse than what can be restored within a matter of a few days." Saudi officials have said they were on track to restore production by month end. October West Texas Intermediate oilCLV19, -0.07%, which expired at the end of the session, fell 4 cents, or 0.07%, to end at $58.09 a barrel on the New York Mercantile Exchange. The new front-month contract, November WTI, lost a dime, or 0.2%, to settle at $58.09.
Military strike against Iran would result in 'all-out war': Zarif - (Reuters) - Any U.S. or Saudi military strike against Iran would bring “all-out war”, Tehran said on Thursday, keeping up a drumbeat of warnings to its adversaries after they accused the Islamic Republic of a strike on Saudi oil facilities. The United States has been discussing with Saudi Arabia and other Gulf allies possible responses to Saturday’s attack, which they blame on Iran and which U.S. Secretary of State Mike Pompeo described as an act of war on the kingdom. “I am making a very serious statement that we don’t want war; we don’t want to engage in a military confrontation ... But we won’t blink to defend our territory,” Iranian Foreign Minister Mohammed Javad Zarif told CNN in an interview. Asked what the consequence of an American or a Saudi military strike on Iran would be, Zarif said “an all-out war”. Zarif earlier warned on Twitter that what he described as the B team - including Israeli Prime Minister Benjamin Netanyahu and Saudi Crown Prince Mohammed Bin Salman - was deceiving U.S. President Donald Trump into a war against Iran. Meanwhile, a senior advisor to Iran’s top authority Supreme Leader Ayatollah Ali Khamenei called on Gulf countries to “come to their senses”, Iran’s semi-official Fars news agency reported. “They (U.S. and Saudi Arabia) have realized that playing with the tail of a lion is highly dangerous and that if they take action against Iran at any time, they know there will be no tomorrow for them in the region,” Fars quoted Hossein Dehghan as saying.
Iran’s warning to Saudi Arabia about all-out war is ‘ridiculous,’ Saudi’s Al-Jubeir says - Iran’s recent warnings to Saudi Arabia are “ridiculous” and “laughable” Saudi minister of state for foreign affairs Adel al-Jubeir told CNBC amid ongoing investigations by the kingdom tying Iran to a major attack on its oil facilities. Iranian Foreign Minister Javad Zarif said in an interview Friday that he hoped to avoid conflict, but that Iran was prepared for “all-out war” in the event of attack by Saudi or U.S. forces. He then questioned whether Saudi Arabia was ready to fight “to the last American soldier.” “This is not the first time Iran’s foreign minister has said something ridiculous and frankly laughable,” he told CNBC’s Hadley Gamble in Riyadh on Saturday. His comments come amid a state of heightened tension between Saudi Arabia, Iran and the U.S. following drone and missile attacks on two Saudi oil facilities a week ago. The attacks, claimed by Yemen’s Houthi rebels, shut down half of Saudi Arabia’s oil production. Saudi Arabia and the U.S. have suggested that Iran had a role in, or was responsible for, the attack on Saudi Aramco’s Abqaiq and Khurais oil facility. Iran has denied the accusations, calling them “meaningless” and “pointless.” Asked about next steps, the minister asserted that Saudi Arabia was responsible for its own defenses — which were criticized as having failed to effectively counter the drone and missile attacks — but stressed the international community’s role in reigning in what he called Iran’s aggressive behavior. “It is our responsibility to protect our borders, our people, our infrastructure — but the world also has responsibility to make sure Iran isn’t allowed to get away with murder, to ensure freedom of navigation in the Gulf and Arabian Sea so global energy supply isn’t disrupted,” he said. Engagement with Iran, like the efforts of Germany and France in launching a trade mechanism that would bypass U.S. sanctions, is nothing more than appeasement and will only condone the country’s behavior, al-Jubeir added. “If you think being lax with Iran will make it behave better, that hasn’t happened in 40 years and won’t happen,” he said. “The idea that Iran can be offered loans we believe is appeasement. Anytime anybody has appeased Iran in the last 40 years, Iran has used that to cause mischief.”
How Saudi Arabia failed to protect itself from drone and missile attacks — Questions have abounded all week as to how Saudi Arabia, the planet’s third-highest defense spender and steward of the world’s largest oil facility, allowed itself to fall victim to a drone and missile attack that wiped out half of its crude production in a day.“The Saudi leadership has a great deal of explaining to do that a country that ranks third in terms of total defense spending ... was not able to defend its most critical oil facility from these kinds of attacks,” former U.S. diplomat Gary Grappo told CNBC on Tuesday.The stakes for the future of Saudi Arabia’s ability to defend itself are global.Brent crude saw its largest price jump ever as markets opened this week, and the commodity’s next moves depend heavily on Saudi oil giant Aramco’s ability to recover its production capacity and defend itself from similar attacks. Investors are likely asking themselves how the kingdom could have left itself so vulnerable and what that means for the future of oil, global markets and the long-awaited Aramco public stock offering. So how did the Saudis, who in 2018 spent an estimated $67.6 billion on arms — second only to the U.S. and China — fail to defend their economic jugular vein? Quite simply, the kingdom’s defenses — no matter how high-tech — are designed for entirely different kinds of threats. The low-flying and relatively cheap drones and cruise missiles purported to have been used in Saturday’s attack are a fairly new challenge that many nation states are not in fact prepared to counter.It also doesn’t help that massive oil plants are just easy targets.“Saudi oil assets are vulnerable for the simple reason that when flying over them at night, they stick out against the desert background like a Christmas tree,” Michael Rubin, a former Pentagon official and Middle East expert at the American Enterprise Institute, told CNBC in an email. “This means that enemies don’t need high-tech GPS-guided drones, even though they might have them, but can also use relatively lower technology drones.” Twenty-five drones and missiles were used in the Saturday strikes on state oil giant Saudi Aramco facilities Abqaiq and Khurais, Saudi’s defense ministry said. While claimed by Yemen’s Houthi rebels, Saudi and U.S. officials say Iran was responsible, a charge Tehran has denied. Dave DesRoches, an associate professor and senior military fellow at the National Defense University in Washington, D.C., told CNBC: “If an attack is of a different threat than the system was designed for — that is a low-altitude cruise missile instead of a high-altitude ballistic missile — then the system will not intercept it.”
Yemen’s Houthis Announce Halt on Attacks Against Saudis, Expect Reciprocal Steps From Riyadh -Houthi militants earlier claimed responsibility for the recent attack on Saudi oil refineries that crippled the country's crude output for days. Riyadh, however, has claimed to have determined that the downed drones and missiles used in the assault were of Iranian origin. Tehran has denied involvement in the incident.Head of the Houthi political council Mahdi al-Mashat has announced that the movement is ceasing its attacks against Saudi Arabia with the use of drones and other weapons. In turn, the Houthis expect Riyadh to issue a similar statement, promising to stop carrying out attacks on Yemeni territory.Al-Mashat added that the Houthis reserve the right to respond if Saudi Arabia ignores the offer. The statement comes almost a week after the Houthis claimed responsibility for attacking Saudi Aramco oil refineries on 14 September, which crippled the country's oil production and spiked crude prices globally. However, Riyadh had its own version of events, claiming that Iran had sponsored the aerial strike. The Saudi military on 19 September presented pieces of the missiles and drones used in attack, insisting that they are of Iranian origin. The US has supported these accusations, with Secretary of State Mike Pompeo calling it an "act of war" on Iran's part.
Human Trafficking is Booming in Yemen as the War Enters Its Fifth Year The offensive war on Yemen, the most impoverished nation in the Middle East, was launched in 2015 by a U.S.-backed coalition of Arab countries led by Saudi Arabia, the richest nation in the Middle East. It has plunged a nation already struggling to provide basic services to its citizens into chaos, a nation now ruled by a ragtag consortium of different groups all thirsting for power. The result? A complete absence of law and order that has given rise to a black Suq (market) of human trafficking on a scale never before seen in Yemen.Thirty-five-year-old Tawfiq hails from Amran, a small city in west-central Yemen famous for its ancient mud-brick high-rises dating back two millennia to the Sabean kingdom. Tawfiq was among 17 Yemeni victims of human trafficking who agreed to speak to MintPress about their harrowing ordeals. In 2016, Tawfiq — desperate to bring money home to his family, as the then-fledgling war decimated the already shaky Yemeni economy — was told by a friend that he could earn as much as $7,000 for one of his kidneys. Days later Tawfiq was on a bus to Saudi Arabia, traveling through al-Wadeeah port on the Yemen-Saudi border.Today, Tawfiq suffers from complications arising from his kidney extraction and is now unable to carry heavy objects. He told MintPress, “I thought that removing a kidney would be a simple arrangement, but now I live in a hell of pain and suffering.” Tawfiq’s operation was crude and involved no follow-up care. Ismail, the owner of a small electronics store in Taiz, told MintPress, as he pointed to the place where one of his kidneys use to reside, “I needed money to feed my children.” Ismail hesitated while he recounted his story, worried that the shame of what he had done would reach his family. Yet thousands of Yemeni civilians who are living in abject poverty as a result of the ongoing war are willing to allow a part of themselves to be cut out and sold in order to be able to sustain their families.
Emirati-Flagged Ship Seized By Iran In Strait Of Hormuz On Suspicion Of Smuggling Diesel - Following reports that it's planning to release a UK-flagged oil tanker that it seized two months ago, Iran has reportedly seized a UAE-flagged vessel in the Strait of Hormuz on Monday and detained its 11-member crew. The IRGC, which was responsible for seizing the vessel, accused it of smuggling diesel. The ship was reportedly carrying 250,000 liters of diesel when it was captured, along with 30 handheld flares, which are sometimes used for facilitating clandestine transfers at sea. The ship's crew are reportedly being held in the coastal city of Bandar Lengeh, though it's unclear where their ship is being held."The ship was seized nearly 20 miles to the east of Greater Tunb with 11 seamen onboard while heading to the Arab United Emirate," IRGC general Ali Azmaei told Iranian media.The capture was initially reported by Iran's FARS news agency, according to a tweet by Al Arabiya, a Saudi news organization.
Saudis, Israel attacked pro-Iran militias on Syria-Iraq border - report - Both Israel and Saudi Arabia have been blamed for recent airstrikes targeting pro-Iranian militias in the Albukamal area in Syria near the border with Iraq, according to Arab media. The attacks resulted in a number of deaths and injuries and the destruction of weapon storage facilities and rocket launchers. "Saudi fighter jets have been spotted along with other fighter jets that have attacked facilities and positions belonging to Iranian militias," said an unnamed source to the Independent in Arabic. The attacks targeted positions belonging to the Quds force of the Iranian Revolutionary Guard Corps in Albukamal and other areas near the Iraq-Syria border. According to the source, it is believed that Iran was about to use the facilities to hit other targets after targeting the Saudi Aramco oil facilities on Saturday. The source added that the Global Coalition Against Terrorism has started targeting not just ISIS, but also other groups such as the Quds Force and various Iraqi and Iranian militias active in Syria, Iraq and other areas. Saudi sources later denied the report, according to the Independent in Arabic. Pro-Iranian militias in Albukamal in Syria near the Iraqi border have been targeted by multiple airstrikes since Monday night, resulting in at least 15 deaths, according to Arab media. On Wednesday, five people were killed and another nine were wounded in an airstrike carried out by unidentified aircraft that targeted positions of the Iranian-backed Iraqi Popular Mobilization Forces militia in Albukamal, according to Sky News Arabia. After the strike on Wednesday, the PMF in the town of Al-Qaim in Iraq near the Syrian border began to take precautionary measures in anticipation of an airstrike, including not assembling in large groups and the deployment of heavy weapons near some sites.
Israeli Attacks On Syria Halted After Russia Threatened To Shoot Down Jets - According to reports in both Israeli and Arabic regional media, Israel this past week was preparing to expand major airstrikes against "Iran-backed" targets in Syria, but Moscow imposed its red line. The Independent has published a story describing that Russia's military in Syria threatened to shoot down any invading Israeli warplanes using fighter jets or their S-400 system.The Jerusalem Post, citing sources in the UK Independent (Arabia), writes just after the latest meeting in Sochi between Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin:According to the report, Moscow has prevented three Israeli airstrikes on three Syrian outposts recently, and even threatened that any jets attempting such a thing would be shot down, either by Russian jets or by the S400 Anti-aircraft missiles. The source cited in the report claims a similar situation has happened twice, and that during August, Moscow stopped an airstrike on a Syrian outpost in Qasioun, where a S300 missile battery is placed. Netanyahu's hasty trip to meet with Putin on Thursday - even in the final days before Tuesday's key election - was reportedly with a goal to press the Russian president on essentially ignoring Israel's attacks in Syria.
Russia hosts Taliban delegation following collapse of US talks - A Taliban delegation has held talks with Russian officials in Moscow after US negotiations with the Afghan insurgents collapsed, the Russian foreign ministry has said.“The Russian president’s special representative for Afghanistan ... Zamir Kabulov, hosted a Taliban delegation in Moscow,” said a ministry spokesman, quoted by RIA Novosti state-funded news agency.No date for the talks was given.“The Russian side stressed the need to relaunch negotiations between the United States and the Taliban movement,” the spokesman said.“For their part, the Taliban confirmed their willingness to pursue dialogue with Washington.”An official from the Taliban said on Saturday the visit came as the insurgent group looked to bolster regional support, with visits also planned for China, Iran and Central Asian states.“The purpose of these visits is to inform leaders of these countries about the peace talks and president Trump’s decision to call off the peace process at a time when both sides had resolved all outstanding issues and were about to sign a peace agreement,” said a senior Taliban leader in Qatar. The Taliban leader, who spoke on condition of anonymity, said the purpose of the visits was not to try to revive negotiations with the US but to assess regional support for forcing it to leave Afghanistan. Until a week ago expectation had steadily mounted of a US-Taliban deal that would see the US withdraw around 5,000 troops from Afghanistan in exchange for the Taliban offering security guarantees to keep extremist groups out. But last week Trump revealed he had cancelled an unprecedented meeting between the Taliban and himself secretly scheduled for Camp David, and declared the talks with the militants “dead”.
Around 14,000 U.S. Troops Remain In Afghanistan - After the cancelled talks between U.S. President Donald Trump and the Taliban, it is most likely that U.S. troops currently deployed in the country will remain there without a set time for return for now. Currently, it is estimated that around 14,000 U.S. troops, among them active duty personnel, members of the National Guard and Reserve as well as Civilians (contractors, DOD employees), remain in Afghanistan. As Statista's Katharina Buchholz notes, between 2013 and 2015, the bulk of the personnel stationed in the Central Asian country was pulled out, as our graphic shows. Since then numbers have been fluctuating reflecting the uncertainty around the U.S. military’s prolonged mission to the country. In 2018, the Trump administration stopped publishing detailed accounts of the troops in Afghanistan through Department of Defense records, but it is likely that the Army still makes up the majority of forces deployed to the country. The U.S. military engagement in Afghanistan is America's longest war. The current NATO-led operation in Afghanistan is called "Resolute Support" and aims to train and advise the Afghan security forces.
U.S. drone strike kills 30 pine nut farm workers in Afghanistan (Reuters) - A U.S. drone strike intended to hit an Islamic State (IS) hideout in Afghanistan killed at least 30 civilians resting after a day’s labor in the fields, officials said on Thursday.The attack on Wednesday night also injured 40 people after accidentally targeting farmers and laborers who had just finished collecting pine nuts at mountainous Wazir Tangi in eastern Nangarhar province, three Afghan officials told Reuters. Graphic on Afghan civilian casualties – here “The workers had lit a bonfire and were sitting together when a drone targeted them,” tribal elder Malik Rahat Gul told Reuters by telephone from Wazir Tangi.Afghanistan’s Defence Ministry and a senior U.S official in Kabul confirmed the drone strike, but did not share details of civilian casualties. “U.S. forces conducted a drone strike against Da’esh (IS) terrorists in Nangarhar,” said Colonel Sonny Leggett, a spokesman for U.S. forces in Afghanistan. “We are aware of allegations of the death of non-combatants and are working with local officials to determine the facts.”About 14,000 U.S. troops are in Afghanistan, training and advising Afghan security forces and conducting counter-insurgency operations against IS and the Taliban movement.Haidar Khan, who owns the pine nut fields, said about 150 workers were there for harvesting, with some still missing as well as the confirmed dead and injured.
Tunisian establishment stunned as outsiders win presidency (Reuters) - With more than half the votes counted in a presidential election, Tunisians have delivered a political earthquake by rejecting established leaders for a little known law professor and a media mogul jailed on suspicion of tax evasion. Kais Saied and Nabil Karoui are leading 24 other candidates, who included the prime minister, two former prime ministers, a former president and the defence minister, and appear certain to advance to a runoff vote next month. It represents a sharp rebuke of elected governments that have struggled to improve living standards or end graft after Tunisia’s 2011 revolution introduced democracy and inspired the “Arab Spring”. “He will fight corruption and establish a just state and continue the process of the revolution,” said fishmonger and Saied voter Noureddine el-Arabi, proudly showing the inky forefinger that proved he had voted. Karoui has for years used his Nessma television station and the charity he founded after his son died to present himself as a champion of the poor and a scourge of government, while his critics describe him as an ambitious, unscrupulous, populist. He denies all claims of wrongdoing against him, including old tax evasion and money laundering charges which kept him in jail on election day, calling them an undemocratic plot.
Russia Detains Over 160 N.Korean Sailors After Attack On Border Patrol Boat - It's the second major Russia-North Korea incident on the high seas in as many months: on Tuesday a clash between North Korean fishermen and Russian border patrol ships in the Sea of Japan ended in an exchange of fire and 161 North Koreans held captive. The North Korean vessels, described as poachers given they were said to be fishing in Russian economic territory, were halted by Russian border patrol, after which one of the North Korean boats opened fire on the Russians, which wounded at least three border patrol guards. In total Russian officials reported two schooners and 11 motorboats from North Korea were spotted violating Russia’s Exclusive Economic Zone. Following the nearly deadly exchange of fire the Russians detained all the vessels and a reported 161 crew members, some of them wounded. This after initial reports cited up to 80 North Koreans detained. Russia promptly summoned the North Korean Charge d’Affaires to the Foreign Ministry over the incident, demanding an explanation of the egregious and blatant violation of its territorial waters. Russia's Tass news agency cited a Federal Security Service (FSB) statement on Tuesday saying the "crew of a North Korean vessel [with over 45 people onboard] carried out an armed attack on the members of a monitoring group of the border guards' ship" in the Sea of Japan resulting in "three servicemen received various injuries," according to the report.
Great Wall Launches Pickup, SUV Plant - Great Wall Motors opens a $900 million production facility in Chongqing in southwest China, with the first vehicles rolling off the line just 14 months after breaking ground. The 8.4 million-sq.-ft. (780,000-sq.-m) facility will produce up to 160,000 Great Wall Ute pickups and Haval SUVs a year. The Chinese automaker claims the 14 months from commencement of construction to production launch is a record for the automotive industry. The facility includes a test track, vehicle compound, stamping plant, assembly plant, interior, exterior and seat sub-assembly plants along with a fully automated welding plant including 98 sets of Japanese Fanuc robots. The paint workshop has 46 gumming and spraying robots. Automated guided vehicles deliver up to 70% of material to the production line. The new Great Wall Ute has been designed from the ground up, and Great Wall says the pickup will be competitive with the world’s best. The automaker says it has adopted a “perfection before production” approach. This includes smart manufacturing processes that use advanced planning scheduling and a new manufacturing execution system.
Skinny Quitting: Young Chinese Embrace the ‘Naked Resignation’ Like most office workers, I’ve had days that made me wish I could just quit and leave it all behind: the paper-shuffling, the boredom, the endless 9-to-5 grind. Back before I had a mortgage payment, I even imagined I might actually go through with it. Now that money’s tight, though, I know I wouldn’t dare. I sometimes joke with my friends that, although buying a house is a big step forward in life, it also leaves you chained to your desk. Not everyone’s willing to accept that trade-off. Young Chinese are increasingly embracing the so-called naked resignation, in which a worker resigns from their job without a backup plan or even worrying about what comes next. The practice is often framed as symbolic of a generational shift in values, with young people less interested in centering their lives around work, but I wonder if it isn’t also indicative of a shift in material conditions. With so many stuck in dead-end jobs and unable to afford sky-high down payments — the traditional buy-in to the middle class — it’s no wonder they’re rethinking their attitudes toward work. This May, the story of a 26-year-old couple from eastern China’s Hangzhou City who have naked resigned twice in the past three years went viral on Chinese social media. Each time they resigned, the pair hit the road, crisscrossing the country for more than six months at a time. In total, they traveled over 86,000 kilometers and spent in excess of 500,000 yuan ($72,000). While some netizens wondered where they got the money for their trips or whether their tendency to abruptly resign would scare off future employers, many expressed admiration for their courage and willingness to take control of their lives.
China economic slowdown sparks debate over what caused the slump, and how Beijing should intervene After China’s economic slowdown grew more pronounced in August, analysts continued to debate how much of the blame rests with the trade war and how much is down to older, underlying issues in the Chinese economy. Industrial production growth - an important gauge of manufacturing output - slowed to 4.4 per cent in August, a new 17-year low, while retail sales growth slowed to 7.5 per cent. Fixed asset investment slowed to 5.5 per cent in the first eight months of year, down from 5.7 per cent in the first seven months, despite government efforts to boost local government infrastructure investment. While the trade war has been commonly blamed for a slowdown which also saw China’s economy grow at its lowest rate on record in the second quarter of this year, others have pointed to challenges to growth that predate last July, when the first tariffs were enacted, such as the deleveraging campaign that started two years ago to reduce debt and risky lending.Zhou Hao, senior economist at Commerzbank, suggested that while each of Monday’s figures from the National Bureau of Statistics were worse than expected, they may not come as a surprise to policymakers in Beijing, who have already baked the slowdown into the country’s economic strategy. “The economic figures would not be that good even without the trade war. The slowdown was already projected,” Hao said. “Instead, policymakers are using the occasion to accelerate long-awaited but delayed reforms, such as interest rate liberalisation.” Others suggested that the material effects of tariffs on China’s economy are real and that further pain awaits, especially after the tit-for-tat escalation in tariffs that took place over the past month. Research from Oxford Economics suggested that new US tariffs on China starting on September 1 – including the knock-on effect on sentiment – would reduce Chinese growth by about 0.2 percentage point in 2019 and another 0.3 percentage point next year. It cut its 2020 growth estimate to 5.7 per cent, well below the 6.0 per cent minimum growth rate set by the government for this year.
Asian factories pummelled by trade war, slowing demand in August - The bitter trade war between China and the United States kept Asian factory activity mostly in decline in August, business surveys showed, strengthening the case for policymakers to unleash fresh stimulus to fend off recession risks. In a surprise development, China's factory activity unexpectedly expanded in August as output edged up, a private sector purchasing managers' index (PMI) showed on Monday, but orders remained weak and business confidence faltered. Export-reliant South Korea, Japan and Taiwan also saw factory activity shrink, underscoring the growing pain from the tit-for-tat tariff war between the world's two largest economies. Meanwhile, India's Nikkei PMI declined to 51.4 in August, its lowest level in 15 months, as demand and output weakened and cost pressures increased. "The broader picture for Asian exports remains very weak because of the impact of the US-China trade war, which is continuing to escalate," said Rajiv Biswas, Asia Pacific chief economist at IHS Markit. "It's not only the US-China trade war. It's also the slowdown in China's auto sector and also because the smartphone demand in China has slowed down. That is again having a negative impact on the South Korean and Japanese electronics sector."
How Hong Kong got to this point - What makes today’s situation especially sad is that it didn’t have to happen this way. Five years ago, there was a path being laid towards a government picked completely through competitive election, which in turn would open the way to develop policies to address many of Hong Kong’s numerous social and economic problems. It was a narrow path to be sure, but rather than try to navigate it, factions in China and Hong Kong preferred to fight rather than win, and they appear to have the whip hand again.To understand the current situation, it’s necessary to understand the political system that China designed for Hong Kong as it prepared to regain sovereignty over the territory 1997. This political system is embodied in the Hong Kong Basic Law. It’s worth keeping in mind a distinction between the protection of civil and political rights and the institutions that pick a society’s leaders. In liberal, electoral democracies, rights and elections work together and reinforce each other. But some, “hybrid” systems have one and not the other. Hong Kong is one of those systems.In the China-U.K. Joint Declaration of 1984, which laid out the reversion plan for Hong Kong, and in the Basic Law that elaborated the plan, Beijing pledged that Hong Kong people would enjoy the rights contained in the International Covenant on Civil and Political Rights. The text of the International Covenant became a Hong Kong ordinance. Furthermore, Beijing pledged that the rule of law would apply in Hong Kong, in part to protect those rights, and that there would be an independent judiciary. The legal system was the common law system, not a Chinese-style, rule-by-the-Communist-Party system. In short, when it came to civil and political rights, Hong Kong basically had a liberal order. This was a precious asset that cannot be over-emphasized. Even today, it should be valued by all citizens of Hong Kong, because they all benefit from its protection.
'Dollar diplomacy': Taiwan condemns China after Solomons switch - Taiwan accused China of "dollar diplomacy" and trying to influence the island's forthcoming presidential and legislative elections after the Solomon Islands cut off ties with Taipei, the sixth country to do so since Tsai Ing-wen became president of Taiwan in 2016. Self-ruled Taiwan now has formal relations with only 16 countries, many of them small, less-developed nations in Central America and the Pacific, including Belize and Nauru.Speaking to reporters in Taipei, Tsai said Taiwan would not bow to Chinese pressure."Over the past few years, China has continually used financial and political pressure to suppress Taiwan's international space," Tsai said, calling the Chinese move "a brazen challenge and detriment to the international order"."I want to emphasise that Taiwan will not engage in dollar diplomacy with China in order to satisfy unreasonable demands," she said.China's foreign ministry said in a statement it "highly commends" the decision to sever diplomatic ties with Taiwan, adding it was part of an "irresistible trend".
Exclusive: Australia concluded China was behind hack on parliament, political parties – sources - (Reuters) - Australian intelligence determined China was responsible for a cyber-attack on its national parliament and three largest political parties before the general election in May, five people with direct knowledge of the matter told Reuters. Australia’s cyber intelligence agency - the Australian Signals Directorate (ASD) - concluded in March that China’s Ministry of State Security was responsible for the attack, the five people with direct knowledge of the findings of the investigation told Reuters. The five sources declined to be identified due to the sensitivity of the issue. Reuters has not reviewed the classified report. The report, which also included input from the Department of Foreign Affairs, recommended keeping the findings secret in order to avoid disrupting trade relations with Beijing, two of the people said. The Australian government has not disclosed who it believes was behind the attack or any details of the report. In response to questions posed by Reuters, Prime Minister Scott Morrison’s office declined to comment on the attack, the report’s findings or whether Australia had privately raised the hack with China. The ASD also declined to comment. China’s Foreign Ministry denied involvement in any sort of hacking attacks and said the internet was full of theories that were hard to trace.
Japan says South Korea move on fast-track trade status ‘regrettable’ (Reuters) - Japan on Wednesday said South Korea’s decision to remove Tokyo’s fast-track trade status without sufficient explanation was “regrettable”, as a diplomatic and trade row between the two Asian neighbours and U.S. allies deepened. Earlier in the day, South Korea said it had approved plans to drop Japan from its “white list” of countries with fast-track trade status. The decision, which wasn’t accompanied by sufficient explanation, was “regrettable”, Isshu Sugawara, the minister of economy, trade and industry, said in a statement.
Abe says Japan’s ASDF may evolve into ‘air and space’ defense force - Prime Minister Shinzo Abe said Tuesday that the Air Self-Defense Force may “evolve into the Air and Space SDF” in the future, stressing the need to strengthen the country’s defense capabilities in outer space. Referring to the planned launch of a space operation unit inside the ASDF in fiscal 2020, which starts next April, Abe said at an annual gathering of some 180 high-ranking SDF officers at the Defense Ministry that it is “not a pipe dream” for Japan to have such combined forces. The envisaged unit is set to be created amid an intensifying race among major powers such as the United States, Russia and China to develop technologies in that domain. The new troops will be tasked with monitoring radio interference, space debris and other countries’ satellites, which can pose threats to Japanese surveillance satellites. The unit is initially expected to be staffed with about 70 personnel. The ministry asked for ¥52.4 billion in August for its fiscal 2020 budget to boost its outer space capability, including through the establishment of the space operation unit. At the meeting on Tuesday, Abe pointed to a rapidly changing security environment, including a recent string of North Korean missile launches, and also called for cyberdefense capabilities to be reinforced. The prime minister refrained, however, from referring to his long-cherished goal of amending the nation’s postwar Constitution in order to clarify the legal status of the SDF under its war-renouncing Article 9. Abe has called for an explicit reference to the SDF to be added to the Constitution to eliminate the possibility of Japan’s troops being seen as “unconstitutional.” The article currently bans the possession of military forces and “war potential.”
Protests mount in Indian Kashmir clampdown - Kashmir has seen an average of nearly 20 protests per day against Indian rule over the last six weeks despite a security lockdown to quell unrest, a senior government source told AFP. Tensions remain high in the disputed Himalayan region after New Delhi's controversial decision last month to revoke the territory's decades old semi-autonomous status. Despite a curfew, movement restrictions and the severe curtailment of internet and mobile phone services, public demonstrations against India -- mostly in the largest city Srinagar -- have been constant, the source told AFP late Saturday. Altogether there have been 722 protests since August 5, with Baramulla district in the northwest and Pulwama in the south the biggest hotspots after Srinagar, the source said. Since that date, nearly 200 civilians and 415 security force members have been hurt, according to the source. Ninety-five of the civilians were injured in the last two weeks, the official said. So far more than 4,100 people -- including 170 local political leaders -- have been detained across the valley, with 3,000 released in the past two weeks, the official said. It was unclear whether any politicians were among those released. Indian authorities have so far insisted that outbreaks of violence have been minimal, and that only five civilians have died since the clampdown started. The relatives of four of those killed told AFP they believed the security forces were responsible for their deaths. The latest updates came as police said Thursday that three men suspected of belonging to a Pakistan-based militant organisation were arrested while transporting weapons and ammunition towards Indian Kashmir.
Restore normal life to Kashmir, India’s top court tells government (Reuters) - India’s top court said on Monday the federal government should restore normal life in Kashmir as soon as possible, as a partial shutdown of the disputed region entered its 42nd day. India stripped its portion of Muslim-majority Kashmir of autonomy and statehood on Aug. 5, shutting off phone networks and imposing curfew-like restrictions in some areas to dampen discontent. Some of those curbs have been relaxed, but mobile communications in the Kashmir valley are largely still blocked, and more than a thousand people are likely to still be detained, according to official data. “We direct Jammu and Kashmir to make the very best endeavor to make sure normal life returns,” India’s Chief Justice Ranjan Gogoi said on Monday, after a panel of three judges heard several petitions relating to Kashmir, which is also claimed by Pakistan. The court had previously said authorities there needed more time to restore order in Kashmir. One of the Supreme Court judges, Sharad Arvind Bobde, said the situation in Kashmir, where thousands have died since an armed rebellion against Indian rule began three decades ago, as “a terrible state of affairs”. A written submission by the government said restrictions were still required in order to maintain law and order, and that they had prevented widespread casualties seen in previous periods of unrest. “Not a single life has been lost since the abrogation of Article 370,” said Tushar Mehta, India’s Solicitor General appearing on behalf of the government, referring to the action of India’s constitution granting autonomy to Jammu and Kashmir state.
Nothing Is Normal in Kashmir, Except the Normalisation of Conflict The drive from Srinagar to Shopian in South Kashmir on the sixth Friday since the reading down of Article 370 is eerily calm. Shops and businesses remain shut, and people – mostly men – mill about. Older ones sit in groups, talking, while younger men stare through our car windows and ultimately walk on by. It is a Friday – typically unpredictable and turbulent, and the area volatile, but the uneventful drive makes it easy to believe that the tension we feel is perhaps more imagined than real. However, it is precisely this contraindication that lies at the heart of the story of Kashmir as it enters this new chapter that began on August 5, 2019. All shades of ideology and opinion in the Valley converge around a simple emotion – betrayal. Delhi’s decision and the manner of its execution to nullify sections of the constitution that gave special status and privileges to the people of Jammu and Kashmir, as well as further splitting the state into two union territories, has struck at a sense of dignity and identity of the Kashmiri mainstream political class – the buffer between New Delhi and Kashmir’s separatists through three decades of violence. The loudest silence today is from them – the vanguards who kept Pakistan at bay and held on instead to the promise of autonomy or self-rule that they built their careers on. In Shopian, amongst a group of a dozen odd taxi drivers whiling away the afternoon, the reactions vary only slightly. The older men accuse the Centre of both neglecting Kashmiri sentiments and deliberately disrupting business during summer’s peak tourist season – which has come to a grinding halt. “India has shot itself in the foot with this decision.” Their MLA from the People’s Democratic Party is in preventive detention, like his party leader Mehbooba Mufti, the former chief minister of a government in coalition with the Bharatiya Janata Party. These men have no love lost for their political leadership. In fact, they see their detentions as retribution for previous doomed alliances with the BJP, both in the Centre and the state, and accuse them of bringing Kashmir to this pass. But the absence of any representatives at all is also unacceptable. The Centre’s action has seemingly collapsed the gap between the mainstream and the separatist, and an agitated younger man who joins the conversation says, “This is the final straw. The fight for Kashmir will now be a fight to the finish – azaadi, once and for all, no matter the cost.” None of them is willing to give us their names or let us take pictures for fear of reprisal by the state.
It Is Ours! Indian Minister Says Islamabad About To Lose Pakistani-occupied Kashmir - A top Indian official has put Islamabad on notice, saying India's nuclear-armed neighbor “should be ready to lose Pakistani-occupied Kashmir,” in perhaps the most provocative statement yet since New Delhi's revoking its own administered Jammu and Kashmir (J&K) historic autonomy on August 5. Gujarat Chief Minister Vijay Rupani was quoted by local media as making the inflammatory statement, saying— “Now, Pakistan-occupied Kashmir (PoK) too is ours ... For fulfilling the dream of united India, we are ready to move forward for PoK.” "Article 370 has been revoked. Now, Pakistan occupied Kashmir (PoK) too is ours. Pakistan should be ready to lose PoK. For fulfilling the dream of united India, we are ready to move forward for PoK... Pakistan should stop supporting terrorism... India will not tolerate this," he asserted while speaking at a political rally, according to India Today.And further referencing the 1971 Indo-Pakistani war in which Bangladesh was liberated, the Chief Minister responded to recent statements by Pakistan's Prime Minister Imran Khan. "Pakistan was boasting of occupying Delhi in 1971 but they were about to lose Karachi. Bangladesh was partitioned. Their Army became our refugees," he said. This comes after Pakistan's foreign minister Shah Mehmood Qureshi warned last week that the situation on the Line of Control (LoC) in the Jammu and Kashmir region continues to deteriorate and risks sparking an "accidental war," as reported in the Hindustan Times.
IMF Estimates $15 Trillion Of World's Foreign Direct Investments Are Phantom Capital -- A new study published by the International Monetary Fund has found that $15 trillion of the world's foreign direct investments are "phantom capital" - a term used to describe capital that is designed to minimize tax bills of multinational firms. This total makes up 40% of the world's foreign direct investments, and is the equivalent to the combined GDP of China and Germany, according to Bloomberg. These types of investments have risen about 10% over the past decade despite global efforts to curb tax avoidance, according to the IMF study. The capital makes its way through corporate shells that generally have no operations or real business activity. The study stated:“FDI (foreign direct investment) is often an important driver for genuine international economic integration, stimulating growth and job creation and boosting productivity. But phantom capital is financial and tax engineering that blurs traditional FDI statistics and makes it difficult to understand genuine economic integration.”It continued: "Luxembourg, a country of 600,000 people, hosts as much FDI as the U.S. and much more than China. FDI of this size hardly reflects brick-and-mortar investments in the minuscule Luxembourg economy, whose $4 trillion in FDI comes to $6.6 million a person. Unsurprisingly, an economy’s exposure to phantom FDI increases with the corporate tax rate." About half of the world's "phantom capital" is hosted by Luxembourg and the Netherlands, with just 10 economies globally holding more than 85% of such investments.
Don’t Bank on a Global Recession Just Yet, BIS Chief Says - The world economy isn’t yet on the cusp of a global recession, according to the head of the Bank for International Settlements, often referred to as the central bankers’ central bank. “It has certainly slowed down. It has slowed down markedly,” BIS General Manager Agustin Carstens told Bloomberg Television Wednesday. “There are some models that show the probability of recession has increased, but it’s still far from being something sure.” Still, Carstens warned that policy makers need to tread a fine line as they renew easing in order to avoid building up future risks. “Central banks have to be very skillful in basically working out the adequate balance,” he said in an interview from Hong Kong. “If we go too far in terms of negative rates of interest, allowing too much search for yield, that might induce a situation where the threats to financial stability in the future might start appearing.” Central banks worldwide are grappling with how to respond to weaker growth as U.S. President Donald Trump’s trade wars fuel uncertainty for consumers and businesses. The Federal Reserve in July cited the outlook for such global developments as it cut interest rates for the first time in a decade, and is expected to again reduce borrowing costs Wednesday, U.S. time. “The elephant in the room, especially in this region, is trade policy,” said Carstens, who previously headed the Mexican central bank. “If we had a different trade policy, central banks would not be pushed so much toward accommodative monetary policy and therefore monetary policy will need to deplete its policy space.” The global economic outlook is dimming ahead of next month’s annual meetings of the World Bank and the International Monetary Fund. The IMF is preparing to update its growth forecast in the new World Economic Outlook. In July it cut the projection for this year to 3.2%, the lowest since the financial crisis.
A Post-Salvini Italy Reverses Course; Welcomes Migrants From NGO Rescue Boat - Following the ouster of right-wing interior minister Matteo Salvini, Italy's new left-leaning government has walked back the country's hard-line immigration policies when it comes to migrants rescued by NGO vessels in the Mediterranean - many off the coast of Libya.On Saturday, the new coalition government between the anti-establishment Five Star Movement (M5S) and the center-left Democratic Party (PD) granted a request for the Norwegian-flagged Ocean Viking operated by French NGOs SOS Méditerranée and Médecins Sans Frontières (MSF) to allow 82 migrants to disembark for 'safe haven,' according to The Guardian. The decision follows a negotiated agreement with the European commission, which received the request to manage the situation and find a solution among member states. "Italian authorities have offered to the Ocean Viking a safe port to disembark," tweeted the charities, adding "MSF and SOS Méditerranée are relieved." Italy’s new government, which won a vote of confidence in the senate on Tuesday – the final step needed to exercise its full powers – intends to draw a line under a crisis sparked by Salvini, the far-right leader of the League.Giuseppe Conte, on his second mandate as prime minister, had promised to revise the previous government’s anti-immigration policies, which provide for the closure of seaports to rescue vessels carrying migrants, the seizure of NGO boats and fines for ships that bring asylum seekers to Italy without permission.NGO rescue vessels have been stranded at sea up to 20 days over the last 14 months because of the Salvini’s measures. There have been 25 standoffs between rescue vessels and Italian autho rities since Salvini took office as interior minister in June 2018, according to the Institute for International Political Studies (Ispi). -The Guardian
For the first time in my life, I’m frightened to be Jewish - David Graeber - I’m 58 years old, and for the first time in my life, I am frightened to be Jewish. We live in a time when racism is being normalized, when Nazis parade in the streets in Europe and America; Jew baiters like Hungary's Orban aretreated as respectable players on the international scene, “white nationalist” propagandist Steve Bannon can openly coordinate scare-mongering tactics with Boris Johnson in London at the same time as in Pittsburg, murderers deluded by white nationalist propaganda are literally mowing Jews down with automatic weapons. How is it, then, that our political class has come to a consensus that the greatest threat to Britain's Jewish community is a lifelong anti-racist accused of not being assiduous enough in disciplining party members who make offensive comments on the internet?For almost all my Jewish friends, this is what is currently creating the greatest and most immediate sense of trepidation, even more than the actual Nazis: the apparently endless campaign by politicians like Margaret Hodge, Wes Streeting, and Tom Watson to weaponize antisemitism accusations against the current leadership of the Labour party. It is a campaign – which however it started, has been sustained primarily by people who are not themselves Jewish – so cynical and irresponsible that I genuinely believe it to be a form of antisemitism in itself. And it is a clear and present danger to Jewish people.To any of these politicians who may be reading this, I am begging you: if you really do care about Jews, please, stop this.One might ask how this happened? Here I feel I must tell a somewhat brutal truth. Orginally this scandal has very little to do with antisemitism. It is in its origins a crisis of democratization in the Labour Party. Let me hasten to emphasize: this is not because bigoted attitudes towards Jews do not exist in the Labour Party. Far from. But Antisemitism can be found on almost every level of British society. As a transplanted New Yorker, I'm often startled by what can pass in casual conversation (from “of course he's cheap, he's Jewish” to “Hitler should have killed them all.”). Surveys show that antisemitic attitudes are more common among supporters of the ruling Conservative party than Labour supporters. But the latter are in no sense immune.
Brexit Gamble: Boris Johnson and the Northern Ireland-only backstop Boris Johnson's eagerly awaited trip to Dublin on Monday has prompted a flurry of speculation that a Brexit deal could be taking shape around a Northern-Ireland only backstop. There are several reasons for this speculation. Firstly, Johnson has precious few options if he is to abide by his promise to leave the EU at the end of October "come what may", and to abide by the law laid down by parliament. Secondly, it was the UK-wide nature of the backstop, insisted on by Theresa May after she rejected the Northern Ireland-only backstop, that prompted the hardest objections from Brexiteers and ultimately led to Johnson’s own resignation as Foreign Secretary. Thirdly, the EU has signalled that taking the original backstop off the shelf can be done quickly. Fourthly, with his parliamentary majority now gone completely, the support of the DUP is no longer an issue. But most significantly, Boris Johnson has now publicly accepted some "alignment" with EU rules in Northern Ireland.
Still no viable Brexit proposals from UK, says EU - Britain has still not proposed any workable alternatives to the backstop in the Brexit Withdrawal Agreement, according to the European Union. It comes following talks between European Commission President Jean-Claude Juncker and British Prime Minister Boris Johnson. Mr Juncker used the meeting in Luxembourg to underline "that it is the UK's responsibility to come forward with legally operational solutions" if it wants to do away with the backstop, adding that "such proposals have not yet been made". In a statement following the meeting, a spokesperson for Mr Juncker said that he underlined to Mr Johnson the European Commission's "continued willingness and openness to examine whether such proposals meet the objectives of the backstop. Such proposals have not yet been made". It was the first face-to-face Brexit discussions between the two leaders since Mr Johnson became British prime minister. They posed for photos before entering Le Bouquet Garni restaurant in Luxembourg for a working lunch. Outside, Mr Johnson was asked if he was optimistic about the talks. "Cautious, cautious," he told reporters. Mr Juncker was asked if he was confident of progress as he entered. "We will see," he replied. Following the meeting, Mr Johnson skipped a planned news conference with Luxembourg's Prime Minister Xavier Bettel. The pair were due to hold a joint news conference however Mr Johnson did not take part in the media briefing.Brexit Supreme Court case live: Judges to hear claims Boris Johnson breached law - The UK's highest court today heard bombshell claims that Boris Johnson acted unlawfully over Brexit - in the worst abuse of power of its kind for 50 years.Protesters massed at the Supreme Court as 11 justices began a three-day hearing on his decision to prorogue (suspend) Parliament from September 9 to October 14.The PM claimed the month-long shutdown, weeks before Brexit, was a standard decision to hold a Queen's Speech. But critics say he misled the Queen.Lord Pannick, QC for campaigner Gina Miller, declared: "The Prime Minister's motive was to silence parliament for that period - because he sees Parliament as an obstacle to the furtherance of his political aims."The Advocate General for Scotland, Lord Keen QC, who was speaking on behalf of the government said the Prime Minister will comply with the Supreme Court's ruling.However, he refused to rule out the possibility Mr Johnson may advise the Queen to prorogue Parliament for a second time.The Supreme Court will give a ruling on Friday or next week on two contradictory cases. England's High Court backed the PM, saying prorogation was "purely political" so not a matter for judges. But Scotland's Court of Session ruled the PM acted unlawfully, because the "true reason" was clearly to "stymie" Parliament. You can read an explanation of the case here or follow live updates below.
Court challenges to prorogation - There have been three challenges to the lawfulness of the government’s decision to prorogue Parliament: one in the courts of England and Wales, one in the Scottish courts and one in the Northern Irish courts. The High Court in England has rejected the challenge in England and Wales. It decided that the prime minister’s decision to prorogue was “inherently political in nature”, and that there are “no legal standards" against which to judge its legitimacy. The first judge to hear the Scottish case reached a similar view. However, the challengers in that case appealed to the Inner House of the Court of Session, which ruled on 11 September that the prorogation was unlawful. The High Court in Northern Ireland decided not to consider the prorogation challenge, since the issue was already being litigated in England and Scotland. On 17 September, the UK Supreme Court will hear a joint appeal from the judgment of the High Court and the Inner House of the Court of Session. It will have the final word on whether the prorogation was lawful or not. The Court of Session has ruled that the prorogation of Parliament that began on 10 September was unlawful. In a summary of its judgment, the court said that the government’s “true reason” for advising the Queen to prorogue Parliament was to stymie parliamentary scrutiny of the executive. Because parliamentary scrutiny of the executive is a constitutional principle which is essential to democracy and the rule of law, the court said, that means that it was unlawful for the government to advise the Queen to prorogue Parliament, and that the prorogation itself was unlawful. In particular, according to one of the judges, the reason for the prorogation was to “prevent or impede Parliament holding the executive to account and legislating with regard to Brexit, and to allow the executive to pursue a policy of a no-deal Brexit without further parliamentary interference.” The court has said that it will issue a declaration that the prime minister’s advice to the Queen, and the prorogation which followed, was “unlawful and is thus null and of no effect”.
Johnson vows to ‘obey’ law, but still make Brexit happen in October British Prime Minister Boris Johnson promised Monday to "obey the law" and still take the U.K. out of the EU on October 31 as scheduled, insisting there's still a chance of reaching a deal with Brussels. Before he suspended parliament last week, MPs passed a law to force the prime minister to request an extension of Brexit if there's no deal approved by October 19. In an interview with the BBC Monday, Johnson was asked multiple times how he plans to execute Brexit at the end of October without breaking the law, if there is no deal. Johnson has been warned he could be jailed if he refuses to delay Brexit. "I will uphold the constitution, I will obey the law, but we will come out on 31 October," Johnson said in response. The prime minister insisted his first priority is still trying to reach a deal with Brussels, but he also refused to explain how he would reconcile his plans with parliament's latest legislation if he did not. When asked again whether he is "looking for a way around the law" to make sure the U.K. leaves the EU even if there's no deal, Johnson responded: "Well, you know those are your words. What we're going to do is come out on 31 October, deal or no deal. And staying in beyond 31 October [is] completely ... crackers." He later said he is "cautiously optimistic," about finding agreement with Brussels, but added: "I'm not counting my chickens. And it is absolutely vital, it's absolutely vital for people to understand that the U.K. is ready to come out with no deal if we have to."
Jeremy Corbyn: I’ll stay neutral and let the people decide on Brexit - Jeremy Corbyn has set out the four pillars of a “sensible” Brexit deal he would negotiate with the EU, as he pledged to carry out whatever the people decide in a second EU referendum as Labour prime minister. The Labour leader set out how he would go into an election offering to negotiate a Brexit deal involving a customs union, ahead of next week’s party conference where activists will launch a bid to shift the party’s position towards campaigning to remain in the EU. At the annual gathering in Brighton, some members will attempt to force a conference vote on the issue, with the aim of getting a promise to campaign for remain in the party’s next general election manifesto. Senior shadow cabinet figures – John McDonnell, Emily Thornberry, Tom Watson and Nick Brown – have all said they would want to campaign to stay in the bloc regardless of any Brexit deal negotiated by Labour. However, Corbyn’s statement is the strongest sign yet that he will resist demands to pick a side and would opt to stay out of campaigning in a second referendum on a Labour-negotiated Brexit deal, allowing him to pitch himself as the neutral referee who pledges to carry out whatever the public decides. This would help avoid the situation David Cameron found himself in as prime minister in 2016, when he resigned from No 10 after ending up on the losing side. Writing in the Guardian, Corbyn laid down a marker of his determination to seek a better Brexit deal from the EU, which the party believes it could negotiate quickly based on conversations already undertaken with Brussels. “A Labour government would secure a sensible deal based on the terms we have long advocated, including a new customs union with the EU; a close single market relationship; and guarantees of workers’ rights and environmental protections,” he said. “We would then put that to a public vote alongside remain. I pledge to carry out whatever the people decide, as a Labour prime minister.” Advertisement This would form the basis of what Corbyn describes as a “credible leave option” which would be offered at a referendum against the option of remaining in the EU.
Britain hopes for trade deal with Australia within months of Brexit (Reuters) - Britain’s Trade Minister Liz Truss said on Wednesday she expects to complete a wide-ranging trade deal with Australia within months of exiting the European Union. In efforts to reduce the economic impact of Brexit, Britain is looking to line-up a series of trade deals with smaller, non-EU countries. Truss - who is in the middle of a three-nation tour that includes Australia, New Zealand and Japan - said she expects a quick conclusion to trade talks that will begin when Britain leaves the EU. “The reason that I have chosen to make Australia one of the first countries I have visited as trade secretary is because it is an absolute priority to get on with this trade deal,” Truss told reporters in Canberra.
UK: Suicide rates surge 11.8% in a single year - Suicide rates in the United Kingdom jumped nearly 12 percent in 2018, the first rise since 2013 with a significant increase among men. A total of 6,507 suicides were registered in the UK last year, the Office for National Statistics (ONS) said, up from 5,821 in 2017 - an increase of 11.8 percent. Three-quarters of the suicides (4,903) in 2018 were men, at a rate of 17.2 deaths per 100,000. The ONS said this represented a "significant increase from the rate in 2017" when 4,382 male suicides were recorded. The "exact reasons" for the rise were unknown but changes made in the past year to the way coroners record such deaths may be a factor, it added. In July 2018 the standard of proof used by coroners to determine whether a death was a suicide was lowered. Samaritans Chief Executive Ruth Sutherland said: "It is extremely worrying that, for the first time in five years, the suicide rate in the UK has increased with 686 more deaths than in 2017. "There has also been a significant increase in the suicide rate in young men since 2017. Significantly, more men aged 45-49 took their own lives also, and middle-aged men remain the group at greatest risk of suicide overall." The figures show the highest rate of suicide by age in 2018 was among 45 to 49-year-olds, a rate of 27.1 deaths per 100,000 males. "Every single one of these deaths is a tragedy that devastates families, friends and communities," said Sutherland. "Whilst the overall rise has only been seen this year - and we hope it is not the start of a longer-term trend - it's crucial to have a better understanding of why there has been such an increase. "We know that suicide is not inevitable; it is preventable and encouraging steps have been made to prevent suicide, but we need to look at suicide as a serious public health issue." The Samaritans also said the rising rate of suicide in young people was a "particular concern".
Billionaire Duke of Westminster carrying out social cleansing of working-class residents in London -- Hugh Grosvenor, Duke of Westminster and the richest person in the world under 30, plans to evict tenants through the demolition of two residential blocks in Belgravia in order to build luxury flats and expensive shops.In perhaps the most blatant example of social cleansing ever and the UK’s massive inequality of wealth, the 28-year-old Duke—who inherited £9.3 billion and his title after the sudden death of the sixth Duke three years ago—is to throw out tenants from flats in Cundy Street and nearby Walden House. Of the 141 people being evicted, eight are disabled, with some having lived in the blocks for as long as 40 years.His Grosvenor Group plans to knock down a total of 111 homes in four blocks of Cundy Street Flats—Lochmore, Laxford, Kylestrome and Stack—by 2021, leaving Walden House tenants until 2023 to find alternative accommodation. Grosvenor has labelled its proposed development as the “Cundy Street Quarter,” describing it as a “rare opportunity” to deliver open market affordable homes and “improved public spaces.”Company director Paul O’Grady said, “Our ambition is to create a new inclusive neighbourhood that meets the needs of residents and businesses today while ensuring that it respects the area’s heritage and will stand the test of time.” What is really being proposed is the turfing out of the community alreadyliving there to meet the requirements of London’s super-rich elite, who will benefit from the new luxury development.
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