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reality is only those delusions that we have in common...

Saturday, December 16, 2017

week ending Dec 16

Investors Told to Brace for Steepest Rate Hikes Since 2006 -- Wall Street economists are telling investors to brace for the biggest tightening of monetary policy in more than a decade. With the world economy heading into its strongest period since 2011, Citigroup Inc. and JPMorgan Chase & Co. predict average interest rates across advanced economies will climb to at least 1 percent next year in what would be the largest increase since 2006. As for the quantitative easing that marks its 10th anniversary in the U.S. next year, Bloomberg Economics predicts net asset purchases by the main central banks will fall to a monthly $18 billion at the end of 2018, from $126 billion in September, and turn negative during the first half of 2019. That reflects an increasingly synchronized global expansion finally strong enough to spur inflation, albeit modestly. The test for policy makers, including incoming Federal Reserve Chair Jerome Powell, will be whether they can continue pulling back without derailing demand or rocking asset markets. “2018 is the year when we have true tightening,” said Ebrahim Rahbari, director of global economics at Citigroup in New York. “We will continue on the current path where financial markets can deal quite well with monetary policy but perhaps later in the year, or in 2019, monetary policy will become one of the complicating factors.” A clearer picture should form this week when the Norges Bank, Fed, Bank of England, European Central Bank and Swiss National Bank announce their final policy decisions of 2017. They collectively set borrowing costs for more than a third of the world economy. At least 10 other central banks also deliver decisions this week. 

FOMC Statement: 25bps Rate Hike -- FOMC Statement: Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate.  […]  In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/4 to 1‑1/2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation. 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 objectives of maximum employment and 2 percent inflation. 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. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.  Voting against the action were Charles L. Evans and Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate.

And So Begins The Rug-Yank Phase Of Fed Policy -  Perhaps the big bankers and brokers really are efficiently allocating capital to its highest and best use.  Who knows?  But as far as we can tell, they’re gambling with other people’s money – and collecting fees regardless of how their coin tosses fall.  It’s always, ‘heads I win, tails you lose.’  Not a bad fugazi gig, if you can get it. Of course, the cornerstone of it all is the Federal Reserve.  Through what they call “open market operations,” the Fed rigs the game in Washington’s and Wall Street’s favor.  Indeed, the process is really quite elegant. Under the smokescreen cover of garbage in economic data, the Fed’s economists produce garbage out bar charts and line graphs.  These, in short, are fabricated depictions of the economy’s growth, consumer and producer prices, personal consumption expenditures, unemployment rate, and whatever other aggregate metrics are deemed to be of vital importance.  What’s more, these fabricated depictions serve as the basis for the Fed’s monetary policy decisions.  The Federal Open Market Committee (FOMC) deliberates over these questions about every six weeks.  Then the Fed goes to work inflating the nation’s money supply, with the occasional rug yank, for the stated purpose of getting the charts and graphs to illustrate the garbage data to their liking.   From the outside, the Fed’s economists and planners appear to be esteemed professionals, making decisions with the intent of providing for the greater good of the country.  Yet beneath this cover of bogus science, the real sausage is made.  Capital is borrowed into existence where it is directed to Washington and Wall Street.  There, having first dibs on this phony money, Washington and Wall Street get to spend it as if it has real value. However, the real value does not coming from the Fed’s phony money.  In fact, as this new phony money appears on the scene, it extracts incremental wealth from the workers and producers across the country that – through their time, talent, and labor – created the wealth to begin with. At the moment, we’re in the rug yank phase of the Fed’s monetary policy.  This is where they reel back credit ever so slightly after letting it run wild over the last decade.  This tightening of credit markets has the effect of pulling the rug out from under financial markets and the economy.

How Will The Market Absorb Trillions Of US Treasury Bonds to Replace The Feds Balance Sheet Wind Down? - At Powell's Nov 28th 2017 testimony to Congress, Powell said that as the Fed allows its 4 trillion dollar balance sheet to wind down, the US Treasury would issue new bonds to the market to replace them (so, technically, US notional debt will neither increase nor decrease as a result of QE).Recall that QE is a sterile operation (this is why we don't have hyper-inflation).  What does that mean?  Sterile means that the US public debt will neither increase or decrease as a result of QE, and neither will the money supply.  Another way to say this is that QE is a cash neutral operation.  Where cash is pushed into the system at one point, it must be drained someplace else (in our case, the Fed offers interest to banks to store their cash at the Fed...mostly with IOER - interest on excess reserves..and all the banks have indeed been doing this).  This is also why banks are not over-excited to lend you money...they get risk free money to deposit their cash at the Fed.  QE simply took US debt off the markets balance sheet, and placed onto the Fed's (yes, the Fed printed digital fiat currency to make this happen...but the unwind will reverse  this "money" creation).  So, the Fed bought 10yr notes with funny money..will hold them to maturity...and then when those 10yr notes mature, the US Treasury will auction new bonds into the market to repay the Fed, making the funny money disapear like magic.  This whole process together "sterilizes" the Feds money printing...but in the meantime, the market pushed that money into other assets (mostly stocks).acc    Here is the simplified flow of money:   Fed QE --> bond market --> stock market --> bank accounts --> Fed accounts(IOER)   Such that total dollars in circulation didn't change much...they ended up back at the Fed (with a nice uptick in asset prices as an in-between step). The interesting question is thus:  When the US Treasury tries to sell 1-2 Trillion dollars of long term debt back into the market...what happens to interest rates and the stock market?

Duy: "Expect the Fed to Stand By Its 2018 Outlook" -- From Tim Duy at Bloomberg: Expect the Fed to Stand By Its 2018 Outlook. A few excerpts:  The Fed is likely to continue to point toward another 75 basis points of tightening in 2018 when it releases the next Summary of Economic Projections. To be sure, the minutes of the last FOMC meeting painted a dovish outlook as participants fretted about the inflation picture. But these concerns need to be weighed against the outlook for growth, which improved throughout 2017, and the implications of that accelerated growth on unemployment... I anticipate the Fed will largely retain the policy rate forecast for 2018. This may come as a surprise given the dovish Fed minutes, but the recent surge in short-term rates indicates that financial markets are waking up to the reality that solid economic growth will prompt the bank to keep hiking rates despite low inflation. All else equal, the stage will be set for an inversion of the yield curve by the end of next year.

 Key Measures Show Inflation Mostly Below Fed's Target -- The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning: According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.7% annualized rate) in November. The 16% trimmed-mean Consumer Price Index also rose 0.2% (2.4% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.  Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.4% (4.7% annualized rate) in November. The CPI less food and energy rose 0.1% (1.4% annualized rate) on a seasonally adjusted basis.  Note: The Cleveland Fed released the median CPI details for November here. Motor fuel increased 131% annualized in November. This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.3%, the trimmed-mean CPI rose 1.8%, and the CPI less food and energy rose 1.7%. Core PCE is for October and increased 1.4% year-over-year. On a monthly basis, median CPI was at 2.7% annualized, trimmed-mean CPI was at 2.4% annualized, and core CPI was at 1.4% annualized. Using these measures, inflation picked up a little year-over-year in November.  However, overall, these measures are mostly below the Fed's 2% target  (Median CPI is slightly above).

Q4 GDP Forecasts -- From Merrill Lynch:  The strong retail sales data provided a 0.3pp boost to our 4Q GDP tracking estimate, bringing it up to 2.4%.  From the Atlanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 3.3 percent on December 14, up from 2.9 percent on December 8. The forecast of fourth-quarter real consumer spending growth increased from 2.5 percent to 3.2 percent after [the] Consumer Price Index report from the U.S. Bureau of Labor Statistics and [the] retail sales release from the U.S. Census Bureau.  From the NY Fed Nowcasting Report  The New York Fed Staff Nowcast stands at 4.0% for 2017:Q4 and 3.1% for 2018:Q1.  CR Note: It looks likely that GDP will be over 3% again in Q4.

Meet the new debt ceiling: $20.493 trillion -- The federal government is bumping up against a new borrowing limit, one that was imposed at the end of Friday.The debt ceiling was suspended for about three months in September, which allowed the federal government to borrow as much money as it needed during that period. The government borrowed more than $500 billion in the last few months when the ceiling was suspended.But after Friday, the debt ceiling took effect once more. The new limit is $20.493 trillion, which a government website said on Monday was the total amount of accrued debt as of Friday. Now, the total national debt will sit at or around $20.493 trillion until Congress agrees to increase or suspend the ceiling again.That's not expected to happen until March or April. Until then, the Treasury Department is expected to reduce borrowing and undertake other "extraordinary measures" to ensure borrowing doesn't exceed the new limit. The national debt remains a contentious issue among Republicans. Some Republicans oppose the GOP bill to cut taxes, since it is expected to add more than $1 trillion to the national debt over the next decade.

Shutting Down The Government Over DACA Is A Risky Bet For Democrats - Politico - Congress on Thursday postponed its fight over government funding for a couple of weeks. But Democrats may still try to make future funding contingent on replacing former President Obama’s Deferred Action for Childhood Arrivals program.1A number of Senate Democrats, including Kamala Harris and Elizabeth Warren, are threatening to vote against funding the government if some form of DACA isn’t reinstated. And at a minimum, some Democratic votes will be needed in the Senate to get the necessary 60 votes to pass a funding bill in the coming weeks.Polling shows both that a majority of Americans are in favor of renewing DACA and that more Americans would blame Republicans if a government shutdown occurred. But Democrats would be making a risky political bet if they force a shutdown over DACA.A new Harvard T.H. Chan School of Public Health poll shows that just 17 percent of Americans believe that finding a replacement for DACA is an extremely important priority for Congress and President Trump to work on the rest of this year. That ranked 12th among the 15 domestic issues tested by Harvard. Even among Democrats, only 20 percent said renewing DACA was an extremely important priority.In other words: Support and saliency are not the same thing. Most people want DACA replaced. But for a lot of people, it’s not enough of a priority to shut down the government. And in fact, there’s some evidence of that in the polling. While Rasmussen Reports surveys can tilt Republican (and the question wording may have been somewhat tilted), they found that if no additional money was spent on border control, 55 percent of voters said they were opposed to a shutdown over protecting people covered under DACA, also known as Dreamers. Just 27 percent were in favor of it.

 U.S. government posts $139 billion deficit in November  (Reuters) - The U.S. government reported a $139 billion deficit in November, the Treasury Department said on Tuesday.  That compared with a budget deficit of $137 billion in the same month last year, according to Treasury’s monthly budget statement. Economists polled by Reuters had forecast the Treasury recording a $134 billion deficit last month. When accounting for calendar adjustments, the deficit last month was also $139 billion compared with an adjusted deficit of $137 billion in the same month in the previous year. The deficit for the fiscal year to date was $202 billion, compared to a deficit of $183 billion in the comparable period for fiscal 2017. On an adjusted basis, the fiscal year-to-date deficit was $248 billion last month versus $222 billion in the prior year. Receipts last month totaled $208 billion, up 4 percent from one year ago, while outlays were $347 billion, a 3 percent increase from the same month a year earlier. Last week, Congress approved a short-term funding bill that will keep the government open until Dec. 23 but it has yet to agree on a longer-term budget. The Treasury Department has a statutory cap on how much money it can borrow to cover the budget deficit that results from Washington spending more than it collects in taxes. It has been bumping up against that cap and only Congress can raise the limit. A temporary measure that suspended the debt limit expired on Dec. 8, although the Treasury has emergency means to continue to pay all its bills through January, it has said. At the same time, Republicans, who control Congress, are nearing approval of an overhaul of the tax system. Their legislation would add $1.4 trillion over 10 years to the $20 trillion national debt to finance changes that they say would further boost an already growing economy. 

Trump's push to cut federal jobs has modest impact, mostly in defense  (Reuters) - President Donald Trump’s campaign to shrink the “bloated federal bureaucracy” so far has made a small dent in the federal workforce, and that largely because of a decline in civilian defense jobs. Days after his Jan. 20 inauguration, Trump ordered a hiring freeze later replaced with an order for federal agencies to cut staff immediately, and in March he proposed a 2018 budget that sought to shift $54 billion to the military from other departments. However, federal civilian jobs declined around 6,000 in the first nine months of this year, or just 0.3 percent of 2.1 million such jobs tracked by the Office of Personnel Management, according to Reuters calculations based on the latest OPM data published in late October. The White House Office of Management and Budget declined to comment on the overall drop in federal employment or the mix of job gains and losses across agencies. Trump has not detailed how much “fat” he aims to cut, but spoke of “billions and billions of dollars” of government waste and his aim to shrink the “bloated federal bureaucracy” while preparing his budget proposals in March. Independent watchdogs agree the federal government could be made more efficient, with Congress’s Government Accountability Office estimating in April that overlap and duplication lead to “tens of billions” of dollars in unnecessary spending. Before Trump, Democrats Barack Obama and Bill Clinton and Republican George W. Bush have all spearheaded various efforts to streamline government bureaucracy. The White House has said agencies’ longer-term workforce reduction plans will serve to develop Trump’s 2019 budget proposal. The overall decline in federal staffing this year is largely due to a roughly 9,500 drop at the Department of Defense to about 731,000, a 1.3 percent decline, even though Trump’s budget proposal envisaged small increases between 2016 and 2018 in employment measured by hours worked. 

Report: 44,000 ‘unknown’ military personnel stationed around the world — — The U. S. military has more than 44,000 troops across the globe that the Pentagon claims it cannot track, according to a recent report. “We are not at a point where we can give numbers other than those officially stated,” said Army Col. Rob Manning, a Pentagon spokesman. The report — compiled by the Defense Manpower Data Center under the Office of the Secretary of Defense — shows more than 44,000 personnel in a category labeled “Unknown.” Active-duty military personnel number slightly more than 1.3 million in the Army, Navy, Marine Corps and Air Force, and hundreds of thousands more civilian personnel fall under Defense departments. That number does not include Reserve and National Guard formations that might be active at any particular time. The United States has military personnel in nearly every country in the world, ranging from two liaison officers in Fiji to tens of thousands from all of the service branches in Japan and Germany, according to the report. Manning said during a press briefing Wednesday that troop numbers in Syria are about four times higher than reported by the Pentagon, with 2,000 present in the country. He also clarified that there are 5,200 in Iraq, up from about 5,000 reported earlier. “We seek to balance informing the American public with the imperative of operational security and denying the enemy any advantage,” Manning said at the briefing. The Pentagon’s previous number of troops in Syria was 503. Though the additional 1,500 acknowledged Wednesday is small compared to the size of DOD manpower -- over 246,000 in California alone according to the data center -- such discrepancies could help explain why 44,000 are unaccounted for.

Pentagon Announces First-Ever Audit Of The Department Of Defense -- "The Defense Department is starting the first agency-wide financial audit in its history," the Pentagon's news service says, announcing that it's undertaking an immense task that has been sought, promised and delayed for years.Of the tally that is starting this week, chief Pentagon spokesperson Dana W. White said, "It demonstrates our commitment to fiscal responsibility and maximizing the value of every taxpayer dollar that is entrusted to us.""Beginning in 2018, our audits will occur annually, with reports issued Nov. 15," the Defense Department's comptroller, David L. Norquist, said.The Defense Department has famously never been audited, despite receiving hundreds of billions of dollars annually and having more than $2.2 trillion in assets. For the Pentagon to get to this point, it has been, as they say, a process. The U.S. government established requirements for each agency to present financial statements back in the 1990s. But for more than 20 years, the Department of Defense has lagged other agencies that were following modern accounting standards, reporting what they received and spent

 Tillerson overture to North Korea: U.S. ready to talk without pre-conditions (Reuters) - U.S. Secretary of State Rex Tillerson offered to begin direct talks with North Korea without pre-conditions, backing away from a key U.S. demand that Pyongyang must first accept that giving up its nuclear arsenal would be part of any negotiations. Tillerson’s new diplomatic overture comes nearly two weeks after North Korea said it had successfully tested a breakthrough intercontinental ballistic missile (ICBM) that put the entire United States mainland within range of its nuclear weapons. “Let’s just meet,” Tillerson said in a speech to Washington’s Atlantic Council think tank on Tuesday. The White House later issued an ambiguous statement that left unclear whether President Donald Trump - who has said Tillerson was wasting his time pursuing dialogue with North Korea - had given his approval for the speech.  “The president’s views on North Korea have not changed,” the White House said. “North Korea is acting in an unsafe way ... North Korea’s actions are not good for anyone and certainly not good for North Korea.” In Beijing, Chinese Foreign Ministry spokesman Lu Kang said China welcomed all efforts to ease tension and promote dialogue to resolve the problem. China hopes the United States and North Korea can meet each other halfway and take meaningful steps on dialogue and contact, he told reporters. Ahead of Tillerson’s speech, North Korean leader Kim Jong Un vowed to develop more nuclear weapons while personally decorating scientists and officials who contributed to the development of Pyongyang’s most advanced ICBM, state media said on Wednesday. Kim said on Tuesday the scientists and workers would continue manufacturing “more latest weapons and equipment” to “bolster up the nuclear force in quality and quantity”, the KCNA news agency said. 

A War of Choice With North Korea is an Immensely Dumb Idea - If there is any common thread between the great U.S. foreign policy mistakes of the last several decades—the Vietnam War, the forever war in Afghanistan, the second Iraq war, and the Libya intervention—it is this: they were all wars of choice. We can intelligently debate the merits of them all, we can examine the ways they were conducted once combat operations began, but they were all started on the passionately articulated positions that they were vital to our national interests. Hindsight tells us otherwise. We now know the hefty sacrifices in lives, treasure, and national confidence from those wars were historic mistakes that cry out to never be repeated. And yet the siren song of unnecessary conflict has made a carefully crafted comeback, at least if you listen to the rhetoric coming out of the White House these days. And this time, not only could trillions of dollars be lost on another war, but something even more financially costly could come to pass: the greatest nation building project our country will ever undertake. To make matters worse, millions of people, including millions of Americans here in the homeland, could lose their lives. I can only be talking about a war of choice with North Korea. As someone who has studied the issues of war and peace with the hermit kingdom for almost a decade, I speak with some experience. I have waged countless fictional wargames across the Korean Peninsula and for years have worked and spoken with many past and present Pentagon and intelligence officials on this critical issue. Speaking for myself, the evidence overwhelmingly points to a disaster of unimagined scale and scope if the Trump administration decides to attack the portly pariah of Pyongyang. To be blunt, we run the risk of opening a Pandora’s box armed with a nuclear fuse.

Turkey switches to full defiance of US, continues Putin courtship - On Monday, US National Security Advisor HR McMaster added to tensions in the Middle East when he condemned Turkey and Qatar as prime sponsors of extremist Islamist ideology. He tore into the Turkish leadership, saying the country’s growing problems with the West are largely due to the rise of the Justice and Development Party in Ankara. A few days ago, McMaster had described China and Russia as “revisionist powers” encroaching on US allies and undermining the international order, and castigated Iran and North Korea as outlaw regimes that “support terror and are seeking weapons of mass destruction.” McMaster now rounds on Turkey and Qatar for mentoring a radical Islamist ideology that “is obviously a grave threat to all civilized people.” The stunning part is that Turkey is a NATO ally, while the US Central Command is headquartered in Qatar. Arguably, Turkey no longer qualifies to be a NATO member. McMaster spoke at a rare public policy platform with his British counterpart Mark Sedwill, at an event hosted by the Policy Exchange think tank in Washington. How any of this transmutes into Anglo-American policy will bear watching. (Interestingly, on a visit to Greece last week, Erdogan publicly sought a revision of the 1923 Treaty of Lausanne, which was negotiated under the tutelage of Britain and the US and ceded, amongst other things, all Turkish claims on the Dodecanese Islands and Cyprus. Significantly, McMaster’s outburst came within hours of a meeting in Ankara between Erdogan and Russian President Vladimir Putin, their eighth this year, during a combined day-long trip by the Russian leader which included stops in Egypt, Turkey and the Hmeimim airbase in Syria. Ironically, if it was the perceived Soviet threat to Turkey that Harry Truman and Dean Acheson blew out of proportion to lay the ground for an enthusiastically pro-American Turkish prime minister, Adnan Menderes, to bring Turkey into the NATO fold in 1952, 55 years later the blossoming of Russo-Turkish cooperation prompts Washington to doubt Turkey’s credentials as an ally. 

Donald Trump the ‘greatest source of instability’ in Asia, says Australia’s former PM Kevin Rudd - US President Donald Trump “is the greatest source of instability” in Asia, Australia’s former prime minister Kevin Rudd said in a panel discussion that mostly excoriated Trump’s administration for policy missteps that have damaged US relations with China and its allies in the region. “The President of the United States is the greatest source of instability across the Asia Pacific region because no one knows which way he’s going to jump,” said Rudd, now president of the Asia Society Policy Institute in New York, where the discussion took place. Rudd singled out “the chaotic nature of the administration’s policy” on North Korea. “We’ve now had two iterations of [Secretary of State Rex] Tillerson being countermanded by the Commander in Chief Donald Trump on his diplomatic initiatives,” first via Twitter in October, after Tillerson held talks in Beijing about efforts to halt North Korea’s nuclear weapons programme. In that tweet, Trump said Tillerson’s efforts to negotiate with China on the subject were “a waste of time”. Meanwhile, United Nations chief Antonio Guterres on Thursday warned the world against “sleepwalking into war” over North Korea, as he called for diplomatic efforts to banish nuclear weapons from the Korean peninsula. Speaking on a visit to Japan, Guterres said: “The worst possible thing that could happen would be for us all to sleepwalk into a war that might have very dramatic circumstances.”

Why Are Democrats Enabling Trump’s Jerusalem Decision? - President Trump’s announcement stating that Jerusalem is the capital of Israel and directing the State Department to begin moving the embassy sparked anger and protests across the world. One would think that Democrats would be be jumping at the chance to hammer Trump for his reckless plans that violate international law and needlessly add more fuel to the fires raging in the Middle East. Certainly, the international community has come out with strong rebukes. The condemnations from America’s allies in the Muslim world have been stunning. The state of Jordan called it “nuts” and the United Arab Emirates (UAE) said it was a gift to “radicals and extremists.” The Saudis described it as an “unjustified and irresponsible.” The Iraqi government demanded that the U.S. reverse its decision. Turkey called it a “red line for Muslims.” The European Union representative expressed her opposition, as did many head of states of European nations. People around the world voted with their feet, pouring out into the streets in demonstrations from Sanaa to Beirut to Paris. And in the West Bank and Gaza, there have been daily expressions of outrage. Back at home, however, Democratic leaders have been mostly silent or, worse yet, taking credit for Trump’s actions.

Trump May Actually Be Right About the Trade Deficit With Canada -  Does the U.S. run a trade deficit or surplus with Canada? It depends where you look. President Donald Trump asserted -- again -- Friday the U.S. runs “a pretty good trade deficit” with Canada. The claim was quickly rebuffed by Canada’s ambassador to the U.S., David MacNaughton, who cited American data saying the opposite was true.Canadian officials tend to use U.S. data to make their case and the Bureau of Economic Analysis has calculated the U.S. had a $7.7 billion surplus in 2016. But Statistics Canada data show it’s Canada with the surplus in goods and services, totaling C$18.8 billion ($14.6 billion) last year. That’s a $22.3 billion difference between the two measures.The debate isn’t just academic. The two countries, along with Mexico, are renegotiating the North American Free Trade Agreement, which Trump says needs to be corrected for trade imbalances. A mini-round of talks is happening this week in Washington, but with Canadian and U.S. statistics showing opposite pictures of the status quo any remedy remains unclear. MacNaughton zeroed in on the issue last week when he took to Twitter in response to Trump. The ambassador also noted a $36 billion U.S. surplus in manufacturing in a Bloomberg TV interview Thursday, again citing American data. “If what the U.S. is interested in is trade balances, I’d really like to see some proposals come as to how to right the trade balance between Canada and the United States, which is in your favor.”  To be sure, it’s not clear what the bottom line would look like if the two measures were harmonized, or which methodology better reflects the true state of trade between the two countries. For example, it could be argued Canada’s statistics agency is overstating exports. Canadian businesses often import goods from third countries such as China only to re-export those goods to the American market. Statistics Canada records that as a Canadian export; the U.S. data would record that as an import from China, not Canada. In other instances however, the U.S. data may be failing to capture some Canada exports, particularly services that are much more difficult to measure than goods. The Statistics Canada data show a much larger number -- in the order of $15 billion a year -- in Canadian service exports to the U.S. than is captured by the American numbers. While statisticians aren’t sure exactly why, one explanation may be that U.S. firms with operations in Canada aren’t reporting their foreign costs as service imports.

 US tipped to take direct aim at China as Trump team loses patience on trade | South China Morning Post: China can expect more unilateral trade action from the administration of US President Donald Trump as the world’s two biggest economies tussle over trade next year, according to a former White House senior economic adviser. Daniel Rosen, a White House international economic policy adviser from 2000 to 2001, said Sino-US trade disputes were manageable but the trend was towards more confrontation, with the US expected to wrap up investigations into Chinese aluminium imports and allegations of Chinese theft of intellectual property next year. Rosen, a partner with US consultancy Rhodium, said the fallout from the investigations could affect other industries, including the car industry. “The administration has also signalled quite clearly that these cases can be applied to other products as well. I would expect other industries are likely to come forward and explore similar remedies for Chinese trade,” he said on the sidelines of a Hong Kong seminar on China’s economic reform organised by the Trade Development Council on Thursday. “The automobile sector trade … is one area where trade policies have traditionally been used in the US on economies for not having reciprocal opening in their economies.” Both investigations, using laws written before the establishment of the World Trade Organisation, would allow the administration to levy tariffs on Chinese goods if found to be valid when cases are completed next year. China has called the investigations “irresponsible” because they fall out of the multilateral trade framework of the WTO, of which China and the US are both members.Although none of them pointed to Washington alone as the reason for the stalemate, there is a broad consensus that negotiations were hindered by a lack of strong leadership atop the trading body — a vacuum that was until recently filled by the United States. 

It’s the end of the WTO as we know it — and Trump feels fine - Donald Trump is reshaping the World Trade Organization — by hardly doing a thing. As the 11th biennial conference of World Trade Organization ministers wrapped up on Wednesday, the U.S.'s presence and the absence of its bully pulpit contributed in no small part to the anticlimactic ending of a year-end summit widely branded as “disappointing,” a number of officials said. Initially, many attendees convened here harboring a nervous fear that the Trump administration would arrive in Buenos Aires seeking to tear apart the entire global trading system. In the end, U.S. officials dealt no such blow. Yet, the representatives who spent hours negotiating behind closed doors this week are wondering why they are parting ways having accomplished very little. “Ministers said that it was like having 164 children in a family,” Susana Malcorra, who chaired the talks, said at a closing press conference when reflecting on the previous four days of talks. “It’s not easy to carry on everybody.” Top officials have offered a series of explanations about why they were unable this week to reach comprehensive agreements on areas as wide-ranging as e-commerce and agriculture stockpiles. No negotiations were ripe enough to wrap up, some say, while others note that members across the board remained too inflexible and unwilling to cooperate. 

With the U.S. Going Rogue, World Fumbles for New Trade Consensus - Trade ministers will meet in Argentina with one of the traditional defenders of free markets, the U.S., questioning the benefits of the international rules it helped to forge. Even though trade volumes are set to grow faster than the world economy this year for the first time since 2014, members of the World Trade Organization will gather in Buenos Aires concerned about the outlook. While he hasn’t followed through on many of his threats to rip up trade accords or take on China, Trump is questioning the WTO’s ability to police global commerce. He’s also threatening to walk away from the North American Free Trade Agreement after withdrawing from a 12-nation Asia-Pacific trade pact early this year. With the U.S. doubting the WTO’s very purpose, it will be difficult for trade ministers to make headway in their meetings on anything but narrow issues such as illegal fishing and agricultural subsidies. “Without U.S. leadership for a positive agenda, there is a clear risk that energies of WTO members could dissipate across the fragmented set of issues and that few policy proposals will advance to conclusion,” Douglas Lippoldt, chief trade economist at HSBC, said in a research note. U.S. Trade Representative Robert Lighthizer has said the WTO isn’t equipped to deal with what his country sees as China’s mercantilist tactics. The U.S. has been blocking appointments to the WTO’s appeals panel, a move the organization says is undermining its ability to handle disputes. Late last month, a top Treasury Department official said efforts at global cooperation were hurting the American economy, and called on other countries to join the U.S. in pushing back against China’s failure to transition to a market economy. At the summit, Lighthizer will push for U.S. interests, including institutional reform at the WTO and fair trade, according to a statement from his office.

The oligarchs are now in charge of the U.S. government - Robert Reich -- Make no mistake. The oligarchs (Koch brothers, Mercers, Wilks, Waltons, Deasons, Schwabs, Neugebauers, Murdochs, Griffins, Ricketts, etc.) are now in charge of the U.S. government. The views of most Americans (75 percent of whom are against the tax cut, for example) no longer matter. This was the oligarch’s deal with the devil (Trump) from the start: Get us a huge tax cut, use the resulting deficit to justify cutting Medicare and Social Security, and get rid of environmental and financial regulations. In return, we’ll finance you, we’ll back your allies in the GOP, and we’ll mount PR campaigns on your behalf that magnify your lies. Hell, we’ll even make you look like a populist. Over half the money contributed in the 2016 came from just 158 families, along with the companies they own or control. More than 50 of these people are on the Forbes list of America’s richest billionaires. 64 of them made their fortunes in finance (hedge fund and private equity). 17 in energy, mostly oil and gas. 15 in real estate and construction (the Trumps, for example). 10 in technology. These American oligarchs don’t have to worry about whether Social Security or Medicare will be there for them in their retirement because they’ve put away huge fortunes. They don’t worry about climate change because they don’t live in homes that might succumb to hurricanes or wildfires. They don't care about public schools because their families don't attend them. They don't care about public transportation because they don't use it. Truth to tell, they don't even care that much about America, because their personal and financial interests are global. They are living in their own separate society, and they want people who will represent them, not the rest of us. The Republican Party is their vehicle. Fox News is their voice. Trump is their champion.

Populist Plutocracy and the Future of America – Roubini - Donald Trump won the US presidency with the backing of working-class and socially conservative white voters on a populist platform of economic nationalism.  But while Trump ran as a populist, he has governed as a plutocrat, most recently by endorsing the discredited supply-side theory of taxation that most Republicans still cling to. Trump also ran as someone who would “drain the swamp” in Washington, DC, and on Wall Street. Yet he has stacked his administration with billionaires (not just millionaires) and Goldman Sachs alumni, while letting the swamp of business lobbyists rise higher than ever.  Whatever happens, Trump will continue to tweet maniacally, promote fake-news stories, and boast about the “biggest and best” economy ever. In doing so, he may even create a circus worthy of a Roman emperor. But if gassy rhetoric alone does not suffice, he may decide to go on the offensive, particularly in the international sphere. That could mean truly withdrawing from NAFTA, taking trade action against China and other trading partners, or doubling down on harsh immigration policies. And if these measures do not satisfy his base, Trump will still have one last option, long used by Roman emperors and other assorted dictators during times of domestic difficulty. Namely, he can try to “wag the dog,” by fabricating an external threat or embarking on foreign military adventures to distract his supporters from what he and congressional Republicans have been doing. For example, following the “madman” approach to foreign policy, Trump could start a war with North Korea or Iran. Or he could post further inflammatory tweets about the evils of Islam, thereby driving disturbed and marginalized individuals into the arms of the Islamic State (ISIS) or other extremist groups.   Trump could then wrap himself in the flag and say, “I told you so.” And if things got bad enough, Trump and his generals could declare a state of emergency, suspend civil liberties, and transform America into a true pluto-populist authoritarian state. You know it’s time to worry when the conservative Republican chairman of the Senate Committee on Foreign Relations, Bob Corker, warns openly that Trump could start World War III. And if you’re not convinced, consider the recent history of Russia or Turkey; or the history of the Roman Empire under Caligula or Nero. Pluto-populists have been turning democracies into autocracies with the same playbook for thousands of years. There’s no reason to think they would stop now. The reign of Emperor Trump could be just around the corner.

The Republican tax bill: four takeaways - Last Saturday, Republicans in the US Senate joined their comrades in the House to write a new chapter in America’s fiscal history.  Or did they?

  • 1. This bill is a Republican dream come true.  Critics of the tax cuts – on the left and the right – see it as a break with the conservative past, a sign that today’s Republican party has been captured by mad dogs and rubes. But look at these names all signing a group letter in favor of the Republican tax cuts: Robert Barro, Michael Boskin, Douglas Holtz-Eakin, Glenn Hubbard, Lawrence Lindsey, George Schultz, and others. It’s a who’s who of the Nixon, Reagan, Bush and Bush administrations – larded and laced with Harvard, Princeton, Columbia, and Stanford.
  • 2. Powerful lobbies weren’t able to stop it. If there’s a silver lining in the Republican victory on taxes, it’s this: this is a bill that passed over and against the opposition of some powerful lobbies. As Matt Yglesias writes, the working assumption of the healthcare bill Barack Obama and the Democrats passed in 2010 was that you couldn’t get legislation through Congress without the buy-in of major lobbies.  Maybe that’s no longer the case?
  • 3. It puts deficit hawks in a tough spot.  For the last 40 years, Republicans – and their Democratic enablers – have managed to stop government spending by screaming debt, deficit, and debt. But as David Dayen points out, the tax bill may have taken that weapon away from them.The bill combines $6tn in tax cuts, mostly to the rich, and $4.5tn in tax increases. Hence, the overall cut of $1.5tn. The cuts are deeply unpopular. When the left starts pushing for good things like single-payer or free college, it’ll have a great argument for how to pay for them: undo most of the Republican tax cuts. Conversely, some of the Republican tax increases – reducing deductions on home mortgages, for example – are good. Most of those deductions go to the upper middle class.
  • 4. It poses a risk – and an opportunity – for Democrats.  As incoherent as the Republican party is, when it comes to taxes, they’re a party, willing to use their smaller grip on power (relative to Obama and the Democrats in 2010) to pursue their maximalist plans. I’m not convinced it’s not going to blow up in their face. Even so, there may be a lesson here for how a party can get things done. A big risk for the left is if it responds to these cuts by screaming about the debt. If Democrats do that, we’re finished.

How the Tax Plan Will Send Jobs Overseas - Despite Donald Trump’s “America first” rhetoric, many suspected that the tax plan he would support would actually increase the incentives for U.S. multinationals to move both profits and operations overseas. I wrote about this inevitability a few weeks ago, before the details of the Trump-GOP tax plan emerged.Now that the bill is advancing, it’s clear that things aren’t as bad as many feared. They’re worse.As discussed in the previous piece, Trump administration economic officials argue that by lowering the corporate tax rate from 35 percent to 20 percent and moving to what is called a territorial system—mainly, companies pay taxes on foreign earnings only to the foreign nation where those profits are booked and never owe anything to the U.S. no matter how low the foreign nation’s tax rate is—would lead to more jobs and profits staying in or coming back to the United States. Yet, it is clear that a territorial system could have just the opposite impact: It could give a permanent preference to foreign income and lead companies to shift more profits to tax havens knowing that they could permanently avoid virtually all taxation on such profits. One crucial safeguard against that perverse impact is to apply a strong minimum tax on the profits of U.S. multinationals in each country (a “country-by-country” minimum tax).   . Under such a country-by-country minimum tax, you can run, you can shift profits to tax havens, but you cannot hide from paying a 19 percent minimum no matter where you are. Under this type of true minimum tax on foreign earnings, U.S. multinationals would have little incentive to engage in the ongoing race to the bottom.

You’re the Real Job Creator (interview) Stephanie Kelton -  As the GOP tax plan, officially known as the Tax Cuts and Jobs Act, awaits reconciliation with the House, the threat of a mounting deficit is once again in the news. According to the bipartisan Joint Committee on Taxation and the Congressional Budget Office, the tax plan will add roughly $1 trillion to the deficit over the next ten years—almost enough money to abolish student loan debt ($1.4 trillion). Democrats, who in the past two decades have grown increasingly cautious about federal spending, were quick to note the hypocrisy of the even more hawkish Republican party. What happened to protecting our children from the crushing burden of the national debt?  But while there are many things to fear in the Tax Cuts and Jobs Act—a windfall for the rich at the expense of the poor, permission to drill in a wildlife refuge—the growing deficit should not be one of them. On the contrary, obsessing over the deficit could further imperil those whom the tax bill leaves worst off. Stephanie Kelton, a professor of economics at Stony Brook University and former economic advisor to Bernie Sanders, explains why. We spoke by phone on Friday, December 1, the afternoon before the Senate passed the bill.

As tax plan gained steam, GOP lost focus on the middle class - WaPo - The GOP tax plan on the cusp of becoming law diverges wildly from the promises President Trump and top advisers said they would deliver for the middle class — an evolution that shows how traditional Republican orthodoxy swamped Trump’s distinctive brand of economic populism as it moved through Washington.The bill was supposed to deliver benefits predominantly to average working families, not corporations, with a 35 percent tax cut Trump proposed on the campaign trail as part of the “Middle Class Tax Relief and Simplification Act.”  But the final product is looking much different, the result of a partisan policymaking process that largely took place behind closed doors, faced intense pressure from corporate lobbyists and ultimately fell in line with GOP wish lists. As top lawmakers from the House and the Senate now rush to complete negotiations to push the tax plan into law, it amounts to a massive corporate tax cut, with uneven — and temporary — benefits for the middle class that could end up increasing taxes for many working families in future years.All told, the plan would cut taxes for businesses by $1 trillion, would cut an additional $100 billion in changes to the estate tax for the wealthy, and spreads the remaining $300 billion over 10 years among all households at every income level.

Treasury Forecasts Tax Reform Will Lead To Longest Period Without Recession In History -- One week ago, in its latest assessment of the current state of tax reform in the aftermath of the Senate's passage of the tax bill, Goldman analysts calculated that while growth impact from tax reform had increased fractionally to around 0.3% in 2018 and 2019 "reflecting the slightly larger amount of tax cuts in the Senate plan following revisions, and our expectations regarding the eventual compromise", it expected a very modest - if any - boost to US economic growth from tax reform. Today, in a report prepared by the US Treasury - which as reminder is run by former Goldmanite Steven Mnuchin - and which was meant to bolster the case for the economic growth to be unleashed by the Trump tax cuts, and distract from the spike in deficit funding, the Treasury’s Office of Tax Policy (OTP) calculated that - somehow - the Senate's version of tax cuts will result in 2.9% real GDP growth rate over 10 years. This 2.9% GDP growth scenario compares to a baseline of previous Treasury projections of 2.2% GDP growth. Treasury "expects approximately half of this 0.7% increase in growth to come from changes to corporate taxation, while the other half is expected to come from changes to pass-through taxation and individual tax reform, as well as from a combination of regulatory reform, infrastructure development, and welfare reform as proposed in the Administration’s Fiscal Year 2018 budget."This Treasury also claims that this 0.7% increase in growth results in an increase in tax revenues during the 10- year period of approximately $1.8 trillion. And this is where the magic of fairy-tale forecasts comes in because adding this $1.8 trillion of incremental revenue to the static current law score of -$1.5 trillion results in total receipts over the 10-year window increasing by $300 billion.  In other words, the Trump tax cuts will not only not add to the deficit but will reduce debt by $300 billion, according to the Treasury.

Warren shreds Treasury analysis of GOP tax plan: They 'made up the numbers' | TheHill: Sen. Elizabeth Warren (D-Mass.) targeted the Treasury Department’s analysis of the GOP tax plan in a series of tweets Monday, saying officials “made up the numbers” to fit their claims. Warren bashed the one-page analysis released earlier Monday, in which the department said that economic policies passed under President Trump would raise enough revenue to cover the tax cuts in the GOP bill, which directly contradicts several independent analyses, including one from the Joint Committee on Taxation (JCT) Monday evening. The senator, who has been a fierce critic of the tax measure, claimed that the figures used in the analysis didn’t make sense.She wrote that instead of using economic models, Treasury officials “just made up the numbers.” “While @USTreasury’s OTP made other projections in this report, it didn’t make the key projection that growth would go up about .35% annually thanks to the corporate tax changes in the GOP tax bill,” she wrote. “In other words: @USTreasury’s OTP couldn’t support Mnuchin’s claims about economic growth, so he just said it again without evidence.” Warren also said the analysis is “completely out of line with other projections.” “To recap: After claiming repeatedly he had projections showing the #GOPTaxScam paid for itself, Mnuchin released a report showing that there were no such projections, and that even his own wildly optimistic made-up projections weren’t enough for the plan to pay for itself,” she wrote. “The American people deserve to know how this #GOPTaxScam will impact the economy and how it will affect middle-class families. @USTreasury promised an economic analysis – but this isn’t it,” she continued. 

Steve Mnuchin Pulls a Paul Ryan – Krugman - On Monday the Treasury Department released a one-page report claiming that tax cuts would pay for themselves. The document was a shameless attempt to fool the public — carefully worded to imply that economic experts at Treasury (they’re still in there somewhere, maybe locked in a closet) had actually done an analysis to that effect, without explicitly saying so. In fact, there was no economic analysis; Trump officials just made up numbers that would give them the result they wanted.  Even reporters hardened to Trump administration lies seemed shocked by the brazenness of this bait-and-switch. What made Steve Mnuchin, the Treasury secretary, think he could get away with it?  Well, one answer is that similar scams on the part of congressional Republicans, Paul Ryan in particular, have generally received highly respectful treatment from the news media. Why shouldn’t Mnuchin imagine he can pull off the same trick?   Actually, he probably can’t. But the truth is that on economic policy, as in other areas, the Trump administration isn’t much of a departure from recent Republican norms. There’s a fundamental continuity in the con jobs: Mnuchin is basically trying to do a Paul Ryan; he just lacks the acting skills to pull it off. About that Treasury report: The department has an Office of Tax Policy, or O.T.P., which provides “economic and legal policy analysis” for tax policy decisions. Normally we’d expect this office to carry out a full analysis of the effects of Republican tax bills, similar to those conducted by Congress’s Joint Committee on Taxation and by independent, nonpartisan organizations like the Tax Policy Center. But either O.T.P. didn’t do that, or it did an analysis that Mnuchin is suppressing. (The department’s inspector general is investigating what actually happened, because Mnuchin repeatedly claimed to have such an analysis in hand.) If the experts actually did do an analysis, they probably found what everyone else has found — namely, that tax cuts come nowhere near to paying for themselves.

Fox Business host rips GOP tax bill: ‘It’s gonna hurt the individuals’ | TheHill: Fox Business Network’s Trish Regan said Tuesday that she is concerned about the GOP tax plan’s impact on individuals. Regan said that she doesn’t think it is “fair” for corporations to get a tax cut at the expense of individuals, especially since President has repeatedly touted the plan as giving a tax cut to all Americans. “Effectively, individuals are carrying the water for these corporations,” Regan said. “They get that great tax cut on the corporate side but people are not going to get it on the individual side and I just don’t think that’s fair.” On her show, "The Intelligence Report," Regan played clips of Trump pitching his tax plan, including one where he called tax reform a “big, beautiful Christmas present” for the American people. “I don’t think it’s going to be much of a present,” she said. “It’s a little like getting coal in your stocking because your tax bill’s going to go up." The House and Senate both recently passed versions of the tax plan, and are currently negotiating to iron out differences between the two bills. Congressional leaders have said they hope to have a plan on the president’s desk by Christmas, and some have said a bill could come as early as Tuesday. Critics of the bill have said that it will primarily benefit corporations and extremely wealthy Americans, hurting middle-class and low-income Americans. Republicans are tinkering with their bill in a House-Senate conference in ways that could move toward addressing Regan's concerns. The Hill reported Tuesday that negotiators have reached a tentative agreement to have a 21 percent corporate rate, rather than the 20 percent rate initially approved. They also are considering lowering the top individual tax rate to 37 percent. 

Senate Tax Debacle: Certain Pass-Through Entities Face Marginal Tax Rates Over 100% Under Current Bill -- As the House and Senate continue to try to reconcile their two versions of a tax plan, the taxing structure for pass-through entities (s-corps, LLC's, etc.) continues to be somewhat controversial, if not completely nonsensical. As we pointed out last week, the Senate bill somewhat randomly chose to exclude pass-through entities organized as family trusts from tax cuts which would ultimately leave them on the hook for much larger tax bills due to the elimination of other deductions. It's unclear whether this bizarre exclusion was just an oversight or an intentional political hit on an easy target that no one in Washington DC would dare defend publicly: rich families organized as trusts. Now, a new note from the Tax Policy Center lays out some scenarios whereby the marginal tax rate for high-income pass-through entities could soar to over 100%.  Of course, while two rational people can debate the impact of a ~40% tax rate on a person's desire to work, we're almost certain that a taxing structure that takes more than 100% of your marginal income will be a slight disincentive.  Here's an example of how it works from the Wall Street Journal:Consider, for example, a married, self-employed New Jersey lawyer with three children and earnings of about $615,000. Getting $100 more in business income would force the lawyer to pay $105.45 in federal and state taxes, according to calculations by the conservative-leaning Tax Foundation. That is more than double the marginal tax rate that household faces today. If the New Jersey lawyer’s stay-at-home spouse wanted a job, the first $100 of the spouse’s wages would require $107.79 in taxes. And the tax rates for similarly situated residents of California and New York City would be even higher, the Tax Foundation found. Analyses by the Tax Policy Center, which is run by a former Obama administration official, find similar results, with federal marginal rates as high as 85%, and those don’t include items such as state taxes, self-employment taxes or the phase-out of child tax credits.

Republicans fret over tax bill's unpopularity | TheHill: Republican lawmakers are concerned about how their tax bill is being viewed by the public and say they need to do a better job of selling it to middle-class and low-income voters. A CBS News poll conducted last week found that 53 percent of people nationwide disapprove of the GOP tax bill and only 35 percent approve. While support for the bill was strong among self-identified Republicans, according to the poll, 52 percent of independents and a whopping 84 percent of Democrats disapprove of the legislation. Sen. Marco Rubio (R-Fla.) on Friday warned that the Republican Party cannot become identified with the “country club-big business image,” citing a famous speech Ronald Reagan gave in 1977 using those same words.Rubio and Sen. Mike Lee (R-Utah) tried to amend the Senate tax bill on the floor to provide more help to people on lower income rungs. Their proposal would have made the child tax credit refundable against payroll taxes Twenty Republicans voted for the change, but it failed. Rubio on Friday warned there are “going to be problems” if Senate and House negotiators working on the final legislation reduce the bill’s child tax credit or increase the corporate rate without making the child tax credit refundable to help lower-income families. “It makes a lot of sense in a tax-reform bill to provide some relief to those on the lower end of the income scale as well as the upper end,” said Whit Ayres, a Republican pollster who does work for Rubio. Ayres said Rubio is right that “it will help the overall perception of this bill if it’s perceived of helping everyone who’s working, not just those at the upper end of the income scale.” 

Republicans Reach Tentative Tax Agreement: Raise Corporate Tax To 21%, Cut Individual Tax To 37% ---One month ago, we speculated that in order to pass the GOP tax plan, Congress would end up having to raise the proposed corporate tax rate from 20% to 25%, because as it stands now, there is simply not enough sources of funding. And while it's not at 25% yet, it's slowly getting there, because as The Hill report as part of the ongoing negotiations between the House and Senate, Republican negotiators have reached a tentative agreement to raise the corporate tax rate in their joint House-Senate tax bill from 20 to 21 percent.  The modestly higher corporate tax rate end a "furious debate" within the GOP conference, even as both conservatives inside and outside the conference, not to mention the president, have fought to keep the 20 percent rate originally approved in separate bills by the House and Senate.And speaking of the president, it is unclear if Trump is aware that his much-trumpeted 20% corporate tax rate is about to go up by (at least) 1%.Even with the revisions, it is premature to declare victory, as one conferee noted that there has been no formal vote for conferees to sign off on any provisions in a final bill. “We have not yet a vote on any of these policies," said Sen. Tim Scott (R-S.C.). "There’s certainly a lot of interest in what we do with the corporate rate.” While the centerpiece of House and Senate bills is a reduction in the corporate tax from 35% to 20%, there's been a push to hike the rate in order to pay for additional changes to the bill that might benefit more middle class families and smaller businesses. In addition to raising the corporate rate, another key change under discussion on the tax reform bill is lowering the top rate for individuals from 39.6% to 37%, although this too is a two-edged sword, as lowering the top income rate for individuals might fuel criticism from Democrats that they bill gives too much tax relief to high-income earners. However, it would also solve several problems, such as providing more help to the owners of pass-through businesses and reducing the disparity between those entities and corporations. It could also help people living in high-tax states deal with the loss of higher deductions for local, state and property taxes. The tax-cut bill previously approved by the House keeps the top rate of 39.6%, while the Senate-passed bill would reduce it to 38.5%.

Here’s Where the GOP Tax Plan Stands Right Now - President Donald Trump plans to make what his staff members called a “closing argument” for tax-overhaul legislation Wednesday as congressional Republicans consider last-minute revisions to key provisions.  Here’s Where the Agreed-Upon GOP Plan Stands (12/13 2:50 p.m.) Details of an agreement among House and Senate Republicans emerged Wednesday -- including rate cuts for corporations, individuals and pass-through businesses. Here’s what tax negotiators have agreed to, according to lawmakers -- and how the new plan differs from bills that passed both chambers earlier:

  • Corporate Rate: Joint Agreement: Cut the corporate rate to 21 percent from 35 percent beginning in 2018. .
  • Top Individual Rate: Joint Agreement: Cut the top rate to 37 percent for the highest earners, down from 39.6 percent..
  • Pass-Through Tax Breaks Joint Agreement: Provide a 20 percent deduction on pass-through business income, and extend that break to trusts as well as individuals..
  • Corporate Alternative Minimum Tax:  Joint Agreement: Repeal it..
  • Obamacare Individual Mandate: Joint Agreement: Repeal it.
  • Mortgage Interest Deduction: Joint Agreement: Cap the it at loans of $750,000 -- down from $1 million -- for new purchases of homes.
  • In addition, tax writers plan the following change, according to people familiar with the discussions: Individual State and Local Tax Deductions Joint Agreement: Limit combined deductions for state and local income taxes and property taxes to $10,000.

Watch Live: President Trump Discusses GOP Tax-Reform Deal - In what's to be a hastily organized press conference, the White House announced Wednesday that President Trump would speak about the Republican tax-reform effort at 3 p.m. Wednesday. The implication is that Trump will be laying out next steps now that GOP lawmakers have tentatively agreed on a compromise tax bill that both chambers of Congress are ready to send to the president's desk.However, as we've learned, in the Trump era, no legislative achievement is in the bag until all the votes have been tallied. As was the case with yesterday's tax deal, the "deal" reported today would reduce the top individual tax rate to 37% and set the corporate tax rate at 21%, slightly higher than the 20% initially favored by President Trump. The mortgage interest deduction would be capped at $750,000, a mid-point compromise between the Senate and House bills.The deduction for pass-through companies will be set at 20 percent, somewhat lower than the 23 percent included in the Senate-passed bill. That will be offset by lowering the top individual income rate to 37%. It is now 39.6%.Though Republicans in both the House and Senate who had reservations about the bill are still making their views known, Mark Meadows, the leader of the House Freedom Caucus, recently said he's given the agreement his blessing, and it's beginning to look like Republicans have actually finally come to a consensus of sorts - though stocks have rolled over following a morning-trade bump.While he's already tweeted about Roy Moore's loss (both to congratulate the winner and to attempt to vindicate himself for supporting Moore), it's likely he'll be asked about the outcome of last night's special election......As for whether he'll feel like talking: We'll need to find out.

GOP negotiators move closer to reducing top tax rate for high-income households but face blowback - WaPo -  Senior Republican negotiators were moving closer to a deal Tuesday to reduce the top tax rate for high-income households from 39.6 percent to 37 percent, blowing by political concerns about aiding the rich in order to ease passage of a $1.5 trillion tax package. The move, which needs to gain the support of a broad swath of Republicans in the House and Senate, would lower taxes for top earners throughout the country, potentially addressing the concerns of two GOP constituencies about separate tax legislation passed by the House and Senate. Wealthy individuals in New York, California and other high-tax states had complained that their taxes might go up under the plan, which curtails the ability of taxpayers to deduct state and local taxes. And conservative House Republicans had said it did not go far enough to bring down top rates — long a principle of Republican economic orthodoxy. But there were signs of immediate resistance to the idea from at least two Senate Republicans, and the GOP can only afford to lose the support of one if they want to pass the bill. Sen. Susan Collins (R-Maine) said she didn’t want to lower the top income tax rate. “I don’t think lowering the top rate is a good idea,” she said as word circulated about the plan. “It’s hard to believe the Republicans can make this bad bill even worse, but behind closed doors, that’s exactly what they seem to be doing,” said Senate Minority Leader Charles E. Schumer (D-N.Y.). (J. Scott Applewhite/AP) And Sen. Marco Rubio (R-Fla.) expressed frustration with the idea in a Twitter post, writing that it was wrong for negotiators to reject his plan to expand tax benefits for working families as “anti-growth” when they were fine “to cut tax for couples making $1 million.” Talks remained extremely fluid Tuesday night as the move to reduce the top rate emerged as the most prominent, and most controversial, of the changes being seriously considered by lawmakers as they sought to reconcile House and Senate tax bills by the end of the week.

Tax Plan’s Biggest Cuts Could Be in Living Standards -Treasury Secretary Steven Mnuchin insists that the tax overhaul passed by Republicans in the Senate this month would increase annual economic growth by 0.7 percentage points over the next decade. But an analysis by Congress’s nonpartisan Joint Committee on Taxation projected less stellar results: In the course of 10 years, the tax cuts would make gross domestic product 0.8 percent larger. This amounts to increasing growth by 0.08 percent per year. On Monday, the Penn Wharton Budget Model chimed in with similar estimates: Under standard economic assumptions, G.D.P. would be 0.5 percent to 1.0 percent larger by 2027 than if tax rates hadn’t changed.Apparently economic analysis does not always carry the day. Hoping to push their latest round of tax cuts into law, Republicans in Congress decided to ignore the dynamic analysis they once praised and follow their gut and their preferences instead.Still, the evidence underscores a not-insignificant weakness in the Republicans’ longstanding economic platform: Tax cuts are not the secret sauce to power the American economy. They have, in fact, very little power to affect economic growth. However strenuously Republicans may argue that tax reform is about increasing economic efficiency, encouraging investment or promoting competitiveness, tax cuts are always primarily about redistribution.That’s because the main effect of tax cuts is in changing how the fruits of economic growth are distributed. This means that for policymakers interested in improving the welfare of the American people, the first and most important item to consider is whose welfare is most worth improving.A decade ago or so, the nonpartisan Tax Policy Center and the liberal-leaning Center on Budget and Policy Priorities estimated that making the Bush tax cuts permanent — rather than letting them expire in 2010 — would increase the after-tax income of people earning $1 million or more up to 7 percent, an order of magnitude more than it would increase the size of the economy in the long term. The bottom 80 percent of American families, by contrast, would actually be worse off because they would bear the brunt of paying for the cuts.Republicans’ current efforts are just as skewed. The Joint Committee’s analysis of an early version of the Senate Republican plan found that 10 years from now, millionaires would get a tax cut worth $8,500, on average. People earning $75,000 or less, by contrast, would experience a tax increase.

Murkowski: Energy provisions remain 'in flux' in GOP tax proposal -- GOP leaders reportedly reached a tentative agreement to combine their tax bills before the conference was convened, leaving Democrats in the dark about the details. "There was a time when the rallying cry of Republicans was 'read the bill,'" said Rep. Lloyd Doggett (D-TX), referring to a common GOP line during the Obamacare debate. "Well, they’ve solved that problem by not giving us a bill to read." Republicans also declined to discuss details of their tentative deal, meaning most of the conference involved reviewing the older House and Senate legislation. After the committee adjourned, Murkowski told Utility Dive that critical energy provisions are not finalized. "They're still in flux," she said. "We've been asked to keep a lid on things until they're not in flux, so hopefully soon." In particular, renewable energy interests are concerned with provisions in the House bill that would cut the production tax credit for wind and eliminate a $7,500 federal incentive for EVs. The Senate bill also left out tax credits for nuclear generation and included a Base Erosion Anti-Abuse Tax (BEAT) provision that wind and solar companies say could prevent them from monetizing tax credits. Renewable energy lobbyists were hopeful before the conference committee that the wind and EV credits would be protected, and Bloomberg reported that their incentives will be included in the final bill, citing an unnamed GOP source. "We're encouraged by reports of progress in the House-Senate conference – including indications that the direct assault on renewable energy in the House measures will not be included in the final bill," . "We also understand there may be a repair to the BEAT program." Murkowski offered no specifics on the BEAT provision or other issues after the conference. But she previously indicated that energy provisions left out of the larger tax reform could be included in a later tax extenders package.  

Republican Tax Bill Overhauls Rules Many Were Counting On -- In ways large and small, the tax bills moving through Congress could penalize individuals for choices they made based on longstanding law. Left unchanged, the bills could drastically alter the financial situations of millions of Americans who cannot easily undo those decisions. People who took out student loans did so knowing they could deduct the interest payments on that debt. Graduate students who accepted tuition waivers did so knowing they would not have to pay taxes on that benefit. Families who moved to high-tax states so their children could attend good public schools did so knowing they could deduct the state and local taxes paid. But the tax bills, particularly the House version of the legislation, would rescind or scale back some of those preferences, resulting in a tax increase for many students, older adults and others who itemize their taxes and make use of many of the deductions that have long been a staple of the tax code. On Wednesday, Republican lawmakers said they had reached a deal on a consensus version of the bill, which could head to a final vote next week. While official details were not released, a congressional aide said the medical expense deduction and the graduate tuition waiver tax break were likely to be preserved. Still, those watching the debate said that longstanding tax provisions were on the chopping block at all showed the peril of making financial decisions based on the tax code. “Nothing is written in stone,” said Richard L. Kaplan, a tax professor at the University of Illinois College of Law who specializes in elder law. “When you change the rules in the middle of the game, people are naturally going to say, ‘What am I supposed to do now?’” he said, adding, “It certainly makes people think this is unfair.”

The Utterly Terrible GOP Tax “Reform” Scam – Linda Beale - The Republicans in the House and Senate continue on their downhill rush to pass their so-called “tax reform” plan before the holiday break.  It’s a mad rush to nowhere, a corrupt process of “please the oligarch” that will cause a huge deficit increase (on the scale of $1 to $1.5 TRILLION over ten years) and be used by the Ryan, McConnell and Trump cadre of liars to justify a domino effect of Medicare, Medicaid, and Social Security cuts.  It is class warfare of the one percent against everyone else.  And it is being sold to the American people with a litany of falsehoods.Almost all the provisions in the bill are designed to be generous to the ultra wealthy and stingy to the middle class and poor.Corporations and their owners and managers–among the wealthiest people in the country–get the only permanent tax breaks.  It’s done in the name of competitiveness, but that’s bunk.  It essentially encourages corporations to continue to move profits out of the US because foreign profits are taxed at zero while US profits are taxed at 20%.  It pretends that the multiple tax breaks for big corporations are necessary (under disproven trickle-down and supply-side theories) to lead to more investment in business in the US and to more jobs and higher pay for workers.  But in fact corporations are enjoying record profits under current law and they aren’t using those record profits to pay their workers more or to create more jobs or even necessarily to invest in the US.  Mostly they are just doing share buybacks for shareholders (ie, owners/managers and other shareholders) that include the  wealthiest people who own the most corporate stock.  That’s because it is demand, not capital, that determines what business expansion is needed and results in labor shortages that give workers leverage to demand more pay.  Tax cuts for corporations just add to the already existing capital glut. The estate tax cut (elimination in the House bill; doubling the exemption to levels that only the very few multi-billionaires will pay any at all in the Senate) ensures that the wealthy will pay almost no tax at all.  They borrow against their wealth while alive.  Their estates pay no tax on the accumulated wealth when they die.  Their children inherit with a “step up” in basis so they get a huge windfall.  And their children can pay off the parents’ debt by selling a few items (because of the basis step-up, with no taxes either) and live on their windfall without ever lifting a finger to do any real work.

Republicans forge tax deal, final votes seen next week (Reuters) - Congressional Republicans reached a deal on final tax legislation on Wednesday, clearing the way for final votes next week on a package that would slash the U.S. corporate tax rate to 21 percent and cut taxes for wealthy Americans. Under an agreement between the House of Representatives and the Senate, the corporate tax would be 1 percentage point higher than the 20 percent rate earlier proposed, but still far below the current headline rate of 35 percent, a deep tax reduction that corporations have sought for years. As they finalized the biggest tax overhaul in 30 years, Republicans wavered for weeks on whether to slash the top income tax rate for the wealthy. In the end, they agreed to cut it to 37 percent from the current 39.6 percent. That was despite criticism from Democrats that the Republican plan tilts toward the rich and corporations, offering little to the middle class. “I think we’ve got a pretty good deal,” Senate Finance Committee Chairman Orrin Hatch told reporters. The emerging agreement would repeal the corporate alternative minimum tax, set up to ensure profitable companies pay some federal tax, and expand a proposed $10,000 cap for state and local property tax deductions to include income tax, lawmakers and sources familiar with the negotiations said. It was also expected to limit the popular mortgage interest deduction to home loans of no more than $750,000 and provide the owners of pass-through businesses, such as sole proprietorships and partnerships, with a 20 percent business income deduction. The deal would gut part of the Obamacare health law by repealing a federal fine on individuals who fail to obtain health insurance, while authorizing oil drilling in Alaska’s Arctic National Wildlife Refuge. Both add-on measures were part of nailing down sufficient votes for passage. Moving the corporate tax target rate to 21 percent from 20 percent gave tax writers enough revenue to make the tax cuts immediate, Republican Senator Ron Johnson told reporters. 

 Negotiators strike deal in principle on tax bill | TheHill: Senate and House Republicans have struck an “agreement in principle” on a sweeping tax-cut bill that if passed would be the first major piece of legislation signed by President. Senate Finance Committee Chairman Orrin Hatch(R-Utah) told reporters about noon Wednesday of the deal between Senate and House negotiators on taxes. “We’re going to talk to our members of conference about it at noon,” said Sen. John Cornyn (R-Texas). Senate Republican leaders say they have the votes to pass the legislation next week. “I’m confident we’ll pass the bill next week,” Cornyn said. “Earlier is better.” GOP sources familiar with the conference committee talks said negotiators are now just cleaning up some of the details on paying for last-minute changes to the bill, which would lower the top individual tax rate to 37 percent and set the corporate tax rate at 21 percent, according to a person briefed on the package. That's slightly higher than the 20 percent corporate rate initially favored by President Trump, a rate that outside groups have lobbied to keep in the package. House conservatives said they didn't like the bump in the corporate rate. But with a tax victory so close, they said the tweak would not be a deal breaker. "We don't like it; it causes some consternation. I am concerned about the business rate," Rep. Mark Walker (R-N.C.), chairman of the conservative 155-member Republican Study Committee caucus, told The Hill on Wednesday. "When these business communities are looking to build, every percentage point is a major factor in this, so we want to be careful in going in that direction. "But it's not a deal breaker," he added. The bill would also cap the popular mortgage interest deduction at $750,000, a midpoint compromise between the Senate and House bills. 

Paul Ryan And Top Republican Lawmakers Could Reap Personal Windfall From New Real Estate Tax Breaks --As Congress races to finalize a landmark $1.4 trillion tax bill, key Republicans legislators directly overseeing the initiative could reap a personal windfall from provisions designed to reduce levies on so-called “pass-through” income, according to federal records reviewed by International Business Times. Those lawmakers — including U.S. House Speaker Paul Ryan — together have tens of millions of dollars invested in scores of real-estate related pass-through corporations and partnerships, collectively earning them millions of dollars of annual income that could be partially exempted from taxes, depending on how the final legislation is structured.IBT reviewed the most recent personal financial disclosure records of 44 Republican lawmakers in the House and Senate leadership, as well as on the chambers’ committees that have overseen the tax bill. In all, 13 of those lawmakers have between $36 million and $163 million worth of ownership stakes in 40 real-estate or property-related partnerships, corporations and investment trusts. In 2016, those 13 legislators earned between $2.6 million and $16 million of annual income from those investments. Those kind of “pass-through” earnings — which experts say disproportionately flow to high-income households — could get new exemptions under the legislation that Congress is now finalizing.The original House and Senate bills both aimed to reduce levies on income generated by partnerships that pass their income through to their investors. Both bills, though, included some limits on the tax breaks for pass-through income -- and the final legislation now being worked out in Washington could still eliminate, reduce or cap those tax cuts. Congressional negotiators are reportedly close to agreeing to a 20 percent deduction for pass-through income, with Republicans arguing the deductions would help small businesses. If the GOP ends up applying a 20 percent deduction to all such passive real-estate income, those 13 legislators who have overseen the tax bill could be permitted to deduct a total of between $520,000 and $3.2 million from their taxable income each year, based on their 2016 filings.

The arguments supporting corporate tax cuts are wrong, and territorial taxation will make things worse -- The typical first argument peddled is that U.S. corporations are taxed at disproportionately high rates and this hurts U.S. workers through some vague notion of “competitiveness.” As we’ve detailed, “competitiveness” is a meaningless term and the evidence doesn’t support the idea that cutting corporate tax rates will help typical American workers. There is no international evidence that corporate tax cuts boost investment (which could potentially lead to higher wages), nor is there any evidence on the state-level that corporate tax cuts boost wages. But further, it just isn’t true that U.S. corporations are paying disproportionately high taxes compared to our international peers. Sure, the statutory federal rate of 35 percent is high—but that’s not the rate corporations are actually paying. Instead, through various loopholes—mostly the deferral loophole—they pay somewhere between 13 and 21 percent, which isn’t out of line with our international peers. Putting an exact number on the effective rate, and comparing that number to international peers, is difficult due to data limitations. But given that the statutory rate is indeed high, a quick comparison of corporate revenues to peer countries tells us that something must be amiss in the U.S. corporate tax code. The United States raises 2.2 percent of GDP in corporate tax revenues, while other OECD countries with lower statutory rates raise an average of 2.9 percent of GDP in corporate tax revenues. Since U.S. capital shares are in line with peer countries, it’s unlikely that we raise less in corporate taxes as a share of the economy because of a low capital share of income. All that is left is that the United States raises a paltry amount in corporate tax revenues as a share of the economy because corporations pay nowhere near the statutory rate. Finally, besides cutting the statutory corporate rate, the final Republican tax plan would move the United States to a “territorial” system of corporate income taxes. Territorial taxation is economic jargon that means U.S. corporations would no longer be taxed on their offshore income. This provides a clear incentive for these corporations to move either real plants and jobs offshore, or to at least move profits offshore through creative accounting.

Janet Yellen: Trump’s Tax Cut Could Play a Negative Role in Next Downturn - Pam Martens - During Janet Yellen’s last press conference as Federal Reserve Chair on Wednesday, Donna Borak, the Senior Economics Writer at CNN, queried: “To return back to the prospective tax bill questions, in your view at all is the Republican tax bill an ill-timed fiscal stimulus, and are you concerned at all it will wind up squandering the tools both the Congress and the Fed have when it comes time to dealing with the recession?” Yellen answered as follows: “We continue to think, as you can see from the projections, that a gradual path of rate increases remains appropriate even with almost all participants now factoring in their assessment of the impact of the tax policy. You know, it is projected that the tax cut package will lead to additions to the national debt and boost, by the end of the horizon, the debt to GDP ratio. And I will say, and this is nothing new, this is something I’ve been saying for a long time, I am personally concerned about the U.S. debt situation. “It’s not that the debt to GDP ratio at the moment is extraordinarily or worrisomely high, but it’s also not very low. And it’s projected, as the population continues to age and the baby boomers retire, that that ratio will continue to rise in an unsustainable fashion. So the addition to the debt, taking what is already a significant problem and making it worse is, it is of concern to me, and I think it does suggest that in some future downturn, which well could occur just for whatever reason, the amount of fiscal space that would exist for a fiscal policy to play an active role, it will be limited, may well be limited.” Yellen’s take on the national debt and the projected $1 trillion that will be added to it as a result of Trump’s proposed tax cut fails to capture the unprecedented and dangerous growth of the national debt under both Wall Street Democrat and Republican administrations.

Hope Lives: Pressing Collins and Corker and Flake on Tax Bill - Linda Beale - The Republicans’ proposed tax legislation–whether the House or Senate version–is despicable.  It will exacerbate the already devastating income and wealth inequality in this country, leave the federal government without adequate funds for real infrastructure and social safety net needs, and place in almost inviolable power the wealthiest oligarchs of the country (and even the good ones exert a power that no one should possess in a democracy). My previous posts on this so-called “tax reform” “simplification” package (it is neither) have outlined a number of pernicious provisions in the bills.  There are a few I haven’t mentioned, such as the likely inclusion of taxation of tuition benefits to undergraduate and graduate students.  That will have an immediate impact on education and on basic scientific research.  Not surprising, given Paul Ryan, Donald Trump, and Mitch McConnell’s aversion to fact-based science and intellectuals, but nonetheless devastatingly harmful to the country in loss of prestige for our universities, loss of the top minds to other countries, and loss of entrepreneurial and innovational thinking that will hamstring commerce and productivity.  Another is the “new” talk in the House of lowering the tax rate on the wealthiest bracket by as much as two and a half percentage points–adding to the largesse for the wealthy otherwise larding the legislation and making it even more obvious that the only Americans the Republican Party sees itself as serving are those with at least millions and probably billions of net worth.   But today there is a ray of hope that this tax scam might just not get passed –or might get turned around very quickly if it does get passed.  Doug Jones’ defeat of constitutional scofflaw and likely multiple-sexual-predator Roy Moore should cause any thinking Republican in the House and Senate to take a step back and listen to the views of constituents across the country, where dislike of this tax legislation is the majority view.  Reaganomics–trickle-down, supply-side tax policies–don’t work.  Kansas proved that, if anybody actually had any doubt before.  If the Republican majorities in the House and Senate pass this ” Class War” tax legislation–written and argued and honed to a tee to serve the wealthiest multinational corporations and individual campaign donors while stabbing the middle and low-income classes in the back–they will potentially pay a big price at the polls in 2018 and 2020.   They will pay that price because their tax legislation will send the U.S. economy into another tailspin that will lead to cuts in the standard of living of ordinary people so people like the Trumps can have even more gaudy gold faucets in their many mansions.

Mystery, Suspense Mount as Final Plan Is Due - Congressional tax negotiators are hours away from signing a compromise, but two important questions remain: Where’s the money? And do they have the votes? Changes that have been revealed so far -- many of them sweeteners designed to secure those needed votes -- would probably push the overall tax cut in the plan over a $1.5 trillion limit that Congress set earlier this year. But so far, any measures that would help offset the cuts and bring the bill back in line have been closely guarded. Potential ways to boost revenue -- such as reducing the duration of the planned individual tax cuts so that they’d expire by 2024 -- have been mostly swatted down. “Never heard that -- don’t know where that’s coming from,” Senator John Thune, the chamber’s No. 3 Republican, said in response to questions about imposing earlier “sunsets” on the individual rate cuts. They’d expire in 2026 under the Senate bill that was approved Dec. 2. Thune said Thursday that various provisions would offset higher costs of the most recent tweaks to the final bill, but he didn’t specify them. Sweeteners that have emerged this week -- including cutting the top individual tax rate for the highest earners to 37 percent, from 39.6 percent currently, and broadening the kinds of state and local taxes that would qualify for an individual deduction that’s capped at $10,000 -- are expected to lose an estimated $200 billion or more over 10 years. GOP leaders may be keeping the so-called spinach under wraps partly because they have only a slim majority in the Senate and want to prevent members of their own party from making additional last-minute demands. Senator Marco Rubio of Florida on Thursday threatened to vote against the bill unless negotiators boost the child tax credit. Rubio’s opposition -- along with that of GOP Senator Bob Corker of Tennessee, who voted against the Senate’s version of the legislation -- would put the bill within one vote of collapse. Lawmakers appeared to be tweaking the final agreement Thursday to make the numbers work. When Senate Finance Chairman Orrin Hatch was asked about what the so-called pay-fors would be, he responded: “I’m not quite sure what they all are.” Hatch added that he didn’t know if lawmakers would be able to meet Rubio’s demand. Asked if the Senate could pass the bill without Rubio’s vote, he said, "Probably." 

Senate Republicans try to placate Rubio after he threatens to oppose tax bill over child credit - Sen. Marco Rubio (R-Fla.) threatened Thursday to vote against Republicans’ $1.5 trillion tax overhaul unless it further expands a child tax credit to millions of working families, leaving GOP leaders searching for answers on a final deal that had appeared to be on the verge of sailing through the House and Senate. Rubio, along with Sen. Mike Lee (R-Utah), wants Republican leaders to include the expansion as they reconcile separate tax measures passed by the House and Senate, working to craft a final compromise bill that could pass both chambers and be sent President Trump for his signature. GOP leaders had said Wednesday they believed that they had reached a broad agreement that both chambers could pass, and they planned to unveil the package Friday morning with hopes of voting on it early next week. But opposition from Rubio and perhaps Lee — who has not yet decided whether to support the bill, a spokesman said Thursday — could delay or derail the tax effort. Rubio says it’s imperative that the GOP make its plan more generous for working families, especially as lawmakers repeatedly revise it to strengthen benefits for the wealthy and corporations. “I understand that this is a process of give and take, especially when there’s only a couple of us fighting for it, the leverage is lessened,” Rubio said Thursday in the Senate. “But given all the other changes made in the tax code leading into it, I can’t in good conscience support it unless we are able to increase [the child tax credit], and there’s ways to do it and we’ll be very reasonable about it.” The conference committee to reconcile the GOP's two tax bills held its first and only meeting on Dec. 13, just as news of a Republican compromise broke. (Jenny Starrs/The Washington Post) Individual Republican senators have significant influence over the plan as the party works to move it through the Senate while holding only a narrow majority. Republicans control 52 Senate seats and need 50 votes to pass the tax bill, as Vice President Pence could be called on to break a tie. Pence’s staff on Thursday announced he would postpone a planned trip to Israel and Egypt next week to be available for the tax vote. 

Full Tax Bill Highlights Leaked - The Tax Cuts and Jobs Act (H.R. 1) overhauls America’s tax code to deliver historic tax relief for workers, families and job creators, and revitalize our nation’s economy. With this bill, the typical family of four earning the median family income of $73,000 will receive a tax cut of $2,059. For individuals and families, the Tax Cuts and Jobs Act:

  • Lowers individual taxes and sets the rates at 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37% so people can keep more of their hard-earned money.
  • Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,350 and $12,700 under current law to $12,000 and $24,000 for individuals and married couples, respectively.
  • Continues to allow people to write off the cost of state and local taxes – just like current law – up to $10,000. Gives individuals and families the ability to choose among sales, income and property taxes to best fit their unique circumstances.
  • Takes action to support more American families by:
  • Expanding the Child Tax Credit from $1,000 to $2,000 for single filers and married couples to help parents with the cost of raising children. The tax credit is fully refundable up to $1,400 and begins to phase-out for families making over $400,000. Parents must provide a child’s valid Social Security Number in order to receive this credit.
  • Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.
  • Preserving the Adoption Tax Credit so parents can continue to receive additional tax relief as they open their hearts and homes to an adopted child.
  • Preserves the mortgage interest deduction – providing tax relief to current and aspiring homeowners.
  • - For all homeowners with existing mortgages that were taken out to buy a home, there will be no change to the current mortgage interest deduction.
  • - For homeowners with new mortgages on a first or second home, the home mortgage interest deduction will be available up to $750,000.
  • Provides relief for Americans with expensive medical bills by expanding the medical expense deduction for 2018 and 2019 for medical expenses exceeding 7.5 percent of adjusted gross income, and rising to 10 percent beginning in 2020.
  • Continues and expands the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization.
  • Eliminates Obamacare’s individual mandate penalty tax – providing families with much-needed relief and flexibility to buy the health care that’s right for them if they choose.
  • Maintains the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.
  • Improves savings vehicles for education by allowing families to use 529 accounts to save for elementary, secondary and higher education.
  • Provides support for graduate students by continuing to exempt the value of reduced tuition from taxes.
  • Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts (IRAs) so Americans can continue to save for their future.
  • Increases the exemption amount from the Alternative Minimum Tax (AMT) to reduce the complexity and tax burden for millions of Americans.
  • Provides immediate relief from the Death Tax by doubling the amount of the current exemption to reduce uncertainty and costs for many family-owned farms and businesses when they pass down their life’s work to the next generation.

The GOP’s Corporate Tax Cut May Not Be As Big As It Looks -- Gary Cohn, director of the National Economic Council and one of the “Big Six” Republicans behind President Trump’s tax rewrite, was on stage at The Wall Street Journal’s annual gathering of business executives in Washington last month defending the plan.He looked happy to be there. Both the House and the Senate were working on bills that resembled the Big Six’s outline, including the group’s call for a big cut in the corporate tax rate. The host from the Journal asked the audience for a show of hands: Who would use the tax windfall to invest more in their companies?Cohn might have thought the question rhetorical. Only a few days before, during a television appearance, he had said, “We believe that we’re going to have a very stimulative effect on the economy by lowering the business tax rate, by lowering the corporate rate, and making America competitive with the rest of the world.” Except the response from the impromptu focus group at the Journal event was muted; only a smattering of the assembly’s members indicated they would use the proceeds from a tax cut in a way that would produce a stimulative effect. “Why aren’t the other hands up?” Cohn asked. Here’s one answer: Cohn and others in the Trump administration might have oversold the potential benefits of their tax plan. One big reason that the legislation won’t supercharge the economy is that the tax cut isn’t as big as it looks on paper. Under the latest version of the bill — a compromise worked out between negotiators from the House and Senate — the federal corporate rate would reportedly drop from 35 percent to 21 percent, according to the Washington Post and several other news outlets. But thanks to a bevy of deductions, few American corporations actually pay 39 or even 35 percent. Estimates vary, but Kent Smetters, the Wharton School professor who runs the Penn Wharton Budget Model, said in an interview that he reckons the average effective rate that U.S. corporations pay is around 22 percent. That could explain the lack of enthusiasm that Cohn saw at the Journal event.

With Billions at Stake in Tax Debate, Lobbyists Played Hardball — As the largest tax rewrite in decades powered through Congress, lobbyists found themselves sprinting to keep up and find ways to persuade, influence or cajole the small group of lawmakers empowered to tweak language in the final version of the joint Senate and House bill.The lobbyists and their allies opened their wallets wide to fund advertisements, phone banks and field campaigns. They leaned on longstanding relationships with lawmakers and staff, dashed off letters to congressional leaders and wrote checks to secure a few minutes of precious face time at fund-raisers.They brought families struggling with rare diseases to Capitol Hill. Some deployed an outside-in approach, enlisting rank-and-file allies in both chambers to bend those writing the bill to their point of view. Others went for the jugular, trying to use partisan politics to prevent a provision from getting through.The winners and losers in the $1.5 trillion bill are just beginning to emerge after a scramble that, in different times, would have taken months or weeks, instead of days, and involved scores of lawmakers, not a handful.“You’re dealing with 14 people instead of 535 people,” said a lobbyist who attended a recent fund-raiser for Senator Rob Portman, Republican of Ohio, in an attempt to make a client’s case to the senator, who sits on the joint House-Senate conference committee that hammered out the compromise bill.  In all, more than half of the 11,000 registered lobbyists in Washington reported working on tax-related issues through the first nine months of the year, according to a report released this month by the nonprofit group Public Citizen. The tactics range from boring to brass-knuckled.

Congress Buys a Little More Time for Childrens’ Health Insurance Program -- Congress is buying just a little more time to keep a popular kids’ health-insurance program afloat as states face a year-end funding squeeze.The House of Representatives attached a rule change for the Children’s Health Insurance Program, or CHIP, to Thursday’s continuing resolution to keep the U.S. government running until Dec. 22. The Senate approved the bill later Thursday. The rule change allows the Centers for Medicare and Medicaid Services to dole out reserve CHIP funds to states most in need of it. The previous rule required CMS to evenly distribute leftover funds to each state. Now, states such as Minnesota that are expected to run out of money by the end of the year can get additional funds even if they’ve already received their share of the pot.As of last week, the government had given $1.2 billion of its almost $3 billion in reserve CHIP funds to 15 states, as well as Washington, D.C., and the U.S. territories, to keep their programs running, according to CMS data. CHIP has long received bipartisan support but the program expired Sept. 30 after Congress failed to reauthorize it. Since then, the House passed a bill to continue the program, but the Senate has not because of discord over how to pay for it.

The FCC Shouldn’t Vote on Net Neutrality Until It Investigates Comment Fraud -- On December 14, the leadership of the Federal Communications Commission is forcing a vote that will repeal net neutrality rules that require equal access to all content on the Internet. These rules prevent broadband providers from blocking access to websites. They prevent broadband providers from censoring content or from charging new fees to access the full universe of video and other services available online. These rules are working.  But if net neutrality rules are rolled back, as proposed by the FCC, broadband providers will have the power to dictate the kind of content consumers are able to access online. They’ll be able to list the websites you can view for free and those for which you’ll be charged a premium.This is apparent—to a whole lot of people. In fact, at this point, more than 23 million comments have been filed at the FCC in response to its proposal to eliminate net neutrality. But there are serious problems with the integrity of this record. Roughly a million comments were fraudulently filed using the names of real people.  What's more, as many as half a million additional comments were filed from Russian email addresses. New York attorney general Eric Schneiderman has called this identity theft, and has launched an investigation. Public comments matter because they're the method by which the FCC hears not just from the high-paid lobbyists in Washington, but small businesses and individuals across the country.  Public comment is not just good government; it’s also required by law. The Administrative Procedure Act is a little-known statute with big impact. It requires that agencies like the FCC conduct their operations in the open and provide an opportunity for anyone and everyone who is interested in a proposal to weigh in with their thoughts and ideas.   But when it comes to net neutrality, that process has been utterly corrupted, and it could have wide-ranging implications at every other government agency that seeks public input on its policies. This raises real questions. In the digital age, how do we know that our government processes have not been co-opted or tampered with? How do we know what voices are genuine, and which are fake?

The FCC Still Doesn’t Know How the Internet Works - EFF -- Earlier this year nearly 200 Internet engineers and computer scientists sent a letter to the FCC that explained facts about the structure, history, and evolving nature of the Internet. The reasons we laid out in that letter for writing it then still apply to the draft now: Based on certain questions the FCC asks in the Notice of Proposed Rulemaking (NPRM), we are concerned that the FCC (or at least Chairman Pai and the authors of the NPRM) appears to lack a fundamental understanding of what the Internet's technology promises to provide, how the Internet actually works, which entities in the Internet ecosystem provide which services, and what the similarities and differences are between the Internet and other telecommunications systems the FCC regulates as telecommunications services. Unfortunately it looks like the FCC ignored the technical parts of that letter, because the FCC’s latest plan to kill net neutrality is still riddled with technical errors and factual inaccuracies. Here are just a few. The biggest misunderstanding the FCC still has is the incorrect belief that when your broadband provider sells you Internet access, they’re not selling you a service by which you can transmit data to and from whatever points on the Internet you want. Citing a past order, the FCC demonstrates this misunderstanding by claiming that "[e]nd users do not expect to receive (or pay for) two distinct services—both Internet access service and a distinct transmission service, for example.” This false distinction between “Internet access service” and “a distinct transmission service” is utterly ridiculous and completely ungrounded from reality. As the FCC would have it, there is some sort of “transmission” that is separate from the Internet that ISPs provide access to. The FCC needs to realize that the Internet is nothing more than transmission between interconnected machines. The FCC’s understanding of the Internet borders on the mystical, as if the Internet itself were some vaguely defined other realm that an ISP opens a portal to. But there is no other realm, only a collection of networks, including the ISP’s networks. There’s no Internet separate from accessing the Internet; the Internet is just machines accessing each other. It’s worrying that such a mischaracterization may be the basis of a federal regulation that will have wide-ranging effects.  Besides not understanding how Internet access works, the FCC also has a troublingly limited knowledge of how the Domain Name System (DNS) works—even though hundreds of engineers tried to explain it to them this past summer.

Net neutrality: The internet holds its breath - BBC News: The term "net neutrality" was first deployed 15 years ago, and is commonly used to refer to the idea that all internet traffic should be treated equally. But later this Thursday, a vote will almost certainly reinterpret an older law used to underpin how it is applied in the US - ending a ban on internet service providers (ISPs) being able to put the brakes on some websites' data and accelerate others'. Some believe that threatens the very fabric of the internet. Like many of the great American laws, the Communications Act of 1934 was written by a bunch of men who had absolutely no idea what they were doing. That's not a criticism. Who could have foreseen, as they put pen to paper, that one day their words would be used to govern how bits and bytes are streamed and downloaded, through copper, glass and radio-waves, under and overground, across our oceans and even into space? Sometimes, though, the most effective laws are about establishing a broad principle - in this case the idea that companies providing telecommunications must do so without discrimination. Should that rule - known as Title II - apply to the companies that provide Americans with the internet? It did, but now it won't. The pioneers of the internet are unequivocal: losing net neutrality will be nothing short of a catastrophe, for innovation, free speech and free expression. Yet the man orchestrating the change calls that notion "hysteria". We're about to find out who's right.

FCC Vote Will Crush Rural Broadband and Entrepreneurship - A forthcoming decision by the Federal Communications Commission (FCC) to eliminate net neutrality will instantly undermine a decade’s worth of public investment in rural broadband — at the exact moment rural America is ready to realize the economic potential of the digital age. Rural areas are already at a steep disadvantage when it comes to broadband infrastructure. As of 2016, 39 percent of rural communities lacked access to true broadband — defined as a minimum download speed of 25 Mbps — despite its ubiquity in cities. 10.6 million US households do not have access to broadband at all, and 46 million nonmetro households have only one provider offering wired 25 Mbps speeds. For rural America, the internet is the best and only hope for participation in today’s economy. Poor broadband is correlated with lower population growth, less economic development, less access to education, lower property values, and slower home sales. Good broadband is a small town’s lifeline out of geographic isolation, its connection to business software and services, and its conduit for exporting homegrown ideas and products. Unfortunately, many rural broadband customers have few options when it comes to choosing an internet service provider (ISP). If the FCC ends net neutrality, it will further harm competition in rural areas. Already, broadband prices are higher where monopolies exist, and without net neutrality incumbents would have yet another tool with which to leverage their advantage, without fear of losing customers. That’s because ISPs will have the power to speed delivery of content from businesses that can pay a premium. And, since content providers tend to favor urban markets with higher customer density, incumbent ISPs will likely allocate even more of their infrastructure investment to cities. In comparison, their investments in rural areas would wane.  Even more importantly, eliminating net neutrality would crush the competitiveness of rural small businesses which rely on the internet to reach their customers. Many of these businesses cannot afford to pay premiums to speed delivery of their content. As a result, they will be unable to compete with larger corporations that can.

 No, The FTC Won’t Save You Once Net Neutrality Rules Are Killed - If you understand anything about the net neutrality fight, it should be this: repealing these popular rules is just one small part of a long-standing ISP plan to reduce meaningful oversight of one of the least-competitive industries in America. So far this year we've already watched as the Trump administration gutted broadband privacy rules, defended price-gouging prison phone monopolies, made life easier on business broadband monopolies, and began weakening the standard definition of broadband to help obfuscate a lack of competition in the sector.  And they're only really getting started. The next big push, lobbied for by Comcast, AT&T and Verizon, is to gut meaningful FCC oversight of giant ISPs, then shovel any remaining authority over to the FTC. This week the FCC and FTC released a joint statement declaring that this new "coordination of online protection efforts" would be a massive boon to consumers while protecting a "free and open internet": "The Memorandum of Understanding will be a critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest,” said FCC Chairman Ajit Pai. “Instead of saddling the Internet with heavy-handed regulations, we will work together to take targeted action against bad actors. This approach protected a free and open Internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order."  Again (as if pointing out facts matters with this FCC), there are numerous falsehoods being pushed here. One being that the 2015 net neutrality rules were "heavy handed," since by international standards they're pretty modest. Two being that the internet somehow magically flourished under Title I throughout history, which ignores the fact that ISPs were classified under Title II with no ill effect for years. Cable (2002) and DSL (2005) were only re-classified under Title I because ISPs promised this reduced oversight would result in incredible levels of competition that you may have noticed never actually materialized. But the biggest problem the FCC is ignoring is that the FTC doesn't really have much solid authority over broadband providers, and what authority that exists is at risk of being obliterated by an ongoing AT&T court battle with the FTC.

FCC’s own chief technology officer warned about net neutrality repeal - The Federal Communications Commission's own chief technology officer expressed concern Wednesday about Republican Chairman Ajit Pai's plan to repeal the net neutrality rules, saying it could lead to practices that are "not in the public interest." In an internal email to all of the FCC commissioner offices, CTO Eric Burger, who was appointed by Pai in October, said the No. 1 issue with the repeal is concern that internet service providers will block or throttle specific websites, according to FCC sources who viewed the message. "Unfortunately, I realize we do not address that at all," Burger said in the email. "If the ISP is transparent about blocking legal content, there is nothing the [Federal Trade Commission] can do about it unless the FTC determines it was done for anti-competitive reasons. Allowing such blocking is not in the public interest." The warning challenges the FCC's official line on the planned repeal of the net neutrality rules, set for a vote Thursday. While the agency is poised to scrap the rules preventing internet providers like Comcast and Verizon from blocking or throttling web traffic, the FCC's Republican majority argues consumers won't see a difference online. An FCC official, speaking on the condition of anonymity to discuss the internal deliberations, said Burger's concerns have been addressed since his message Wednesday morning. The discussion, the official said, is part of the normal back-and-forth process of editing an FCC order.

Yes, Net Neutrality Is Being Stolen From Us in a Fucked Up, Undemocratic Heist - These are the facts: Millions of Americans have asked the Federal Communications Commission to keep its current net neutrality regulations, which protect the free and open internet. These regulations were enacted as a result of decades of hearings, meetings, and legal battles. They have broad bipartisan public support. The current regulations have been upheld in court. They have not decreased investment in broadband, according to broadband companies themselves. And they are about to be dismantled. FCC Chairman Ajit Pai has called those fighting to protect the open internet “hyperbolic” and “desperate.” He reads “mean tweets” to create viral hate clicks for conservative publications, jokes about being an industry shill at the “Telecom Prom,” and says Hollywood celebrities are the reason everyone is so riled up. His public pitch for repealing the regulations—to the extent that there is one at all—often boils down to suggesting that people who want the regulations to remain in place are hysterical or are overblowing the situation. But you’re not hysterical: This is an undemocratic looting by telecom monopolists and an FCC commissioner who has shown no interest in engaging with the people of this country, let alone serving their best interests. A poll released this week by the Program for Public Consultation and Voice of the People at the University of Maryland found that 83 percent of Americans—and 75 percent of Republicans—favor the current system (the group that conducted the poll clearly explained the current regulations as well as the proposed ones). Pai, meanwhile, has said that “volume and vitriol are not substitutes for actual arguments” and has stated that “desperate” people are raising “hyperbolic fears” about net neutrality violations that “never materialized before 2015.” The “actual argument” for net neutrality that has been made, time and time again, is that without regulations that require ISPs to treat internet infrastructure as a data- and content-neutral pipe, they will be empowered to pick which types of websites and web services get preferential treatments on their networks. There are many examples of this already happening: AT&T blocking FaceTime and Comcast blocking BitTorrent are among the most famous.

Here’s a List of the Members of Congress Who Just Told Ajit Pai to Repeal Net Neutrality - Wednesday afternoon, 107 Republican members of Congress sent Federal Communications Commission Chairman Ajit Pai a letter supporting his plan to repeal net neutrality protections ahead of the commission’s Thursday vote. “The record is exhaustive, every viewpoint is well represented, and the time has come for the Commission to act,” the letter says. The current regulations, of course, are widely popular with the American people, and there have been widespread public protests urging the FCC to keep the protections in place. The House Committee on Energy and Commerce and its Subcommittee on Communications and Technology released the letter, and it is signed by 107 lawmakers. Many of their signatures are illegible, and the committee did not release a typed list of the members who signed it. A call to the committee was not immediately returned. Motherboard staff has attempted to compile a list of names on the letter. The full letter is embedded below. So far, we have been able to read 84 names; if you can read any that we have missed please tweet at us or email us (jason.koebler@vice.com). We will be updating this list throughout the night. We have also listed the amount of money they have received in donations from the telecom industry since 1989, as compiled by The Center for Responsive Politics and The Verge. If net neutrality is an issue that is important to you and the name of your representative is on this list, you may want to consider whether they should continue serving you the next time they are up for reelection.

FCC Votes To Repeal Obama-Era Net Neutrality Protections -- Three weeks after introducing the plan, the FCC - in a 3-2 vote along party lines - has voted to repeal net neutrality rules adopted by the Obama administration in 2015, triggering a torrent of outraged backlash from consumers who view the decision as blatantly benefitting telecoms companies at the public's expense.  While events proceeded mostly as expected, the lengthy hearing was interrupted by a "brief recess" shortly before 1 p.m. Media reports said the room was cleared because of an unspecified threat, and Capitol police brought in bomb-sniffing dogs to check the area before the comments could resume. "The fight for the future of the internet has come to a head" is one of the dramatic headlines surrounding the Republican-led FCC's. Democrats on the committee dissented to the decision, describing it as an "internet-destroying" order that would benefit corporations at the extent of broadband consumers."The public can plainly see that a soon to be toothless FCC is handing the keys to the Internet...over to a handful of multi-billion-dollar corporations," one Democratic member said.  Ajit Pai, the FCC chairman appointed by President Trump, has framed the repeal as getting the government to "stop micromanaging the internet."The issue was the fourth item on the agency's agenda. It was entitled "Restoring Internet Freedom."  Making the case for the rule, a lawyer for the Wireline Bureau, a Telecom industry lobbying group, said the Obama era rules stifle competition and deter investment.

Goodbye, net neutrality—Ajit Pai’s FCC votes to allow blocking and throttling - The Federal Communications Commission voted today to deregulate the broadband industry and eliminate net neutrality rules that prohibit Internet service providers from blocking and throttling Internet traffic. The repeal of net neutrality rules became a near-certainty about a year ago when Donald Trump won the presidency and appointed Republican Ajit Pai to the FCC chairmanship. Pai and Republican Commissioners Michael O'Rielly and Brendan Carr provided the three votes necessary to overturn the net neutrality rules and the related "Title II" classification of broadband providers as common carriers.Democrats Mignon Clyburn and Jessica Rosenworcel provided bitter dissents in today's 3-2 vote. Despite the partisan divide in government, polls show that majorities of both Democratic and Republican voters supported the rules, and net neutrality supporters protested outside the FCC headquarters before the vote. Going forward, home Internet providers and mobile carriers will be bound not by strict net neutrality rules but by whatever promises they choose to make. ISPs will be allowed to block or throttle Internet traffic or offer priority to websites and online services in exchange for payment. Pai repeated his claim that "under title II, investment in high-speed networks has declined by billions of dollars." He did not mention that major broadband providers themselves have told investors that Title II hasn't harmed their investment. He also has not provided data to support a new claim that a few small Internet providers were hurt by the rules. Pai said that today's decision will achieve regulatory parity in the "Internet economy," putting Internet providers under a regulatory regime similar to the one that governs search engines and other online platforms. He compared Twitter blocking certain tweets to ISPs blocking websites. "These are very real, actual threats to the open Internet," he said.

State attorneys general line up to sue FCC over net neutrality repeal - Attorneys general from "across the country" will sue the Federal Communications Commission in an attempt to reverse today's repeal of net neutrality rules."Today, I am announcing my intention to file a legal challenge to the FCC's decision to roll back net neutrality, along with attorneys general across the country," Washington State Attorney General Bob Ferguson said. "We will be filing a petition for review in the coming days. Allowing Internet service providers to discriminate based on content undermines a free and open Internet. Today's action will seriously harm consumers, innovation, and small businesses."  New York Attorney General Eric Schneiderman is leading the multi-state effort."The FCC's vote to rip apart net neutrality is a blow to New York consumers and to everyone who cares about a free and open Internet," Schneiderman said. "The FCC just gave Big Telecom an early Christmas present, by giving Internet service providers yet another way to put corporate profits over consumers. Today's rollback will give ISPs new ways to control what we see, what we do, and what we say online. That's a threat to the free exchange of ideas that's made the Internet a valuable asset in our democratic process."The FCC today eliminated rules that prohibit ISPs from blocking or throttling Internet traffic. The commission also eliminated a rule that prohibits charging websites for priority access over home and mobile Internet services. The rollback "would enable ISPs to charge consumers more to access sites like Facebook and Twitter and give them the leverage to degrade high quality of video streaming until and unless somebody pays them more money," Schneiderman said.

WH ramps up calls for immigration overhaul after NYC terror attack | TheHill: The White House on Tuesday sought to drive home its case for tougher immigration laws in the wake of this week’s attempted terror attack in New York City. President TrumpDonald John TrumpHouse Democrat slams Donald Trump Jr. for ‘serious case of amnesia’ after testimony Skier Lindsey Vonn: I don’t want to represent Trump at Olympics Poll: 4 in 10 Republicans think senior Trump advisers had improper dealings with Russia MORE called on Congress to end certain immigration preferences for family members of U.S. citizens, saying they pose a national security threat. Trump pointed out the suspected attacker, Akayed Ullah, entered the country through "chain migration” — a practice that allows foreigners to obtain visas if they have family members who are U.S. citizens. “We’re going to end ‘em. Fast,” the president said. L. Francis Cissna, the director of U.S. Citizenship and Immigration Services, later made an appearance at Tuesday’s White House press briefing to reinforce the president’s message but ended up muddling it instead. Cissna described in detail how Ullah secured a visa as the nephew of a U.S. citizen, which he called “the most extreme, remote family-based connection you can have.” Ullah’s uncle came to the country through the visa-lottery program, another program Trump has argued can be taken advantage of by terrorists. “What we need is an immigration system that is selective,” Cissna said. “We want to be able to select the types of people who are coming here based on criteria that ensures their success.” The director then claimed that people who arrive in the U.S. through chain-migration are more likely to be radicalized by terror groups. Asked if he had data to back the claim up, Cissna said, “no.” 

 Aid for disaster-stricken states could be punted into January - Politico - Lawmakers from Texas and Florida are exceedingly anxious that hurricane recovery aid will be sidelined in next week’s government funding scramble amid internal disputes over who should get how much cash. Congress was widely expected to approve its next multibillion-dollar disaster request as part of the year-end spending bill. But with just days to go until the Dec. 22 deadline when government funding expires, lawmakers are still haggling over the fine points of the next round of disaster aid. .House GOP leaders are now preparing to take up a stopgap spending bill next week that would not include any money for hurricane relief, potentially causing problems for passage if members from affected states rebel. In a closed-door meeting Wednesday afternoon, GOP leaders cautioned lawmakers that the disaster package may not be ready by next week, according to members who were in the room. The biggest holdup is over how much money should be spent on rebuilding in the Lone Star state, according to lawmakers briefed on the talks. Appropriators are still sifting through a massive binder of requests, worth over $61 billion, from Texans alone. 

Zinke promises ‘zero tolerance' after 35% of Interior employees report harassment | TheHill: A survey conducted for the Interior Department found that 35 percent of its employees say they were harassed or discriminated against in the last year. The department-wide findings come on the heels of a National Park Service-specific report released in October, which found that 38 percent of that agency’s employees have been harassed or discriminated against. The survey results are spurring leaders at the department that oversees about a fifth of the nation’s land to try to crack down on the causes of harassment. Department leadership claims their aggressive actions to change the culture are a shift from the previous administration. “All employees have the right to work in a safe and harassment-free environment,” Interior Secretary Ryan Zinke said in a statement on Thursday. “I've already fired a number of predators who other administrations were too afraid to remove or just turned a blind eye to," he said, placing blame on former President Obama's administration for the current culture. "Under my leadership we don't protect predators. When I say ‘zero tolerance’ I mean that these people will be held accountable for their abhorrent actions.” The most common form of harassment was age-related, with 20.5 percent of employees reporting it. Another 16.5 percent said they experienced gender-based harassment, while 9.3 percent said they were harassed because of their race or ethnicity and 8 percent suffered from sexual harassment. Employee relations issues are often amplified at Interior’s agencies due to longstanding cultural structures, remote workplaces and similar unique circumstances.

 The U.S. Media Yesterday Suffered its Most Humiliating Debacle in Ages: Now Refuses All Transparency Over What Happened - Glenn Greenwald- Friday was one of the most embarrassing days for the U.S. media in quite a long time. The humiliation orgy was kicked off by CNN, with MSNBC and CBS close behind, with countless pundits, commentators and operatives joining the party throughout the day. By the end of the day, it was clear that several of the nation’s largest and most influential news outlets had spread an explosive but completely false news story to millions of people, while refusing to provide any explanation of how it happened. The spectacle began on Friday morning at 11 a.m. EST, when the Most Trusted Name in News™ spent 12 straight minutes on air flamboyantly hyping an exclusive bombshell report that seemed to prove that WikiLeaks, last September, had secretly offered the Trump campaign, even Donald Trump himself, special access to the DNC emails before they were published on the internet. As CNN sees the world, this would prove collusion between the Trump family and WikiLeaks and, more importantly, between Trump and Russia, since the U.S. intelligence community regards WikiLeaks as an “arm of Russian intelligence,” and therefore, so does the U.S. media. This entire revelation was based on an email which CNN strongly implied it had exclusively obtained and had in its possession. The email was sent by someone named “Michael J. Erickson” — someone nobody had heard of previously and whom CNN could not identify — to Donald Trump, Jr., offering a decryption key and access to DNC emails that WikiLeaks had “uploaded.” The email was a smoking gun, in CNN’s extremely excited mind, because it was dated September 4 — 10 days before WikiLeaks began promoting access to those emails online — and thus proved that the Trump family was being offered special, unique access to the DNC archive: likely by WikiLeaks and the Kremlin. There was just one small problem with this story: it was fundamentally false, in the most embarrassing way possible. Hours after CNN broadcast its story — and then hyped it over and over and over — the Washington Post reported that CNN got the key fact of the story wrong. The email was not dated September 4, as CNN claimed, but rather September 14 — which means it was sent after WikiLeaks had already published access to the DNC emails online. Thus, rather than offering some sort of special access to Trump, “Michael J. Erickson” was simply some random person from the public encouraging the Trump family to look at the publicly available DNC emails that WikiLeaks — as everyone by then already knew — had publicly promoted. In other words, the email was the exact opposite of what CNN presented it as being.

Tensions boil over in combative WH briefing | TheHill: White House press secretary Sarah Huckabee Sanders sparred heatedly with reporters Monday over errors made by media outlets in recent stories on President Trump. In a fiery exchange with CNN’s Jim Acosta, a frequent critic of the White House, Sanders disputed the notion that news outlets had made “honest mistakes” in their reporting. The errors, she said, were intentional and malicious. “You cannot say it’s an honest mistake when you’re purposely putting out information you know is false,” Sanders said. “It’s not an honest mistake when you are purposely putting out information that you know to be false or when you're taking information that hasn't been validated, that hasn't been offered any credibility and that has been continually denied by a number of people, including people with direct knowledge of an incident,” Sanders said. Asked to provide evidence of the media running with information it knew to be wrong, Sanders cited ABC News’s suspension of Brian Ross, for wrongly reporting that Trump had directed former national security adviser Michael Flynn to make contact with Russian officials before the election. “There's a very big difference between making honest mistakes and purposefully misleading the American people,” Sanders said. Acosta disputed the notion that reporters were intentionally getting stories wrong to harm the administration. “Journalists make honest mistakes and that doesn't make them fake news,” Acosta said. 

Cognitive Rot and the Steele Dossier - emptywheel - One reason I write so much on the Steele dossier is because the cognitive rot it has fostered among Democrats is really dangerous. Often, they’ll point to a confirmed event — such as that Carter Page met Arkadiy Dvorkovich and Andrey Baranov on a Russian trip that was otherwise publicly reported contemporaneously — and claim it “proves” a dossier claim claiming something else — in this case that he met Igor Sechin and Igor Diveykin. Out of some need to see the larger dossier “confirmed,” its fans claim over and over again that Not-A = A. As a result, rather than asking why the dossier is so full of narrow misses and why it doesn’t report any of the big known events — starting with the Trump Tower meeting attended by Fusion GPS researcher Rinat Akhmetshin — Democrats instead keep seeing “truth” in the dossier in the tea leaves that, in actuality, are really just dregs. And, in the process, they become willing to argue that Not-A = A, arguing that claims that don’t match known reality actually are reality, just like the Trump boosters we claim to abhor. Josh Marshall engages in a bit of the same today, then Jonathan Chait piggy backs on Marshall and (as is his wont) exacerbates the error.

 Nunes Furious Over McCabe No-Show: Sending Team To "Scrub" DOJ Docs; Preparing Subpoenas -- House Intel Committee Chairman Devin Nunes (R-CA) is not a happy man after FBI Deputy Director Andrew McCabe bailed on his scheduled Tuesday testimony - which has been rescheduled to next Tuesday. Despite the DOJ emailing the committee as late as 7:23 pm Monday night in preparation for McCabe's testimony, the agency blamed a scheduling conflict for the no-show. Nunes told reporters that he was "extremely troubled," and that the scheduling conflict was "not really believable," though he allowed McCabe to reschedule without issuing any subpoenas.  "The security director for the FBI sent over [Monday] night at 7:23 the security clearance for Mr. McCabe," said Nunes, adding, "so it seems like everyone in the building over there ... knew that Mr. McCabe was supposed to be here today. But they're blaming a scheduling snafu ... It would be a high level of incompetence for people that are normally pretty smart." Nunes warned that McCabe's next no-show would result in subpoenas and a possible contempt charge:  "We have a commitment, again, that McCabe is going to show up next Tuesday [Dec. 19] at 2:00," said Nunes, adding "so we will be following up with letters ... if none of that is followed up with, then we will move forward with contempt and we will issue additional subpoenas." Nunes is also sending investigators to the DOJ Thursday to do a "scrub" of documents the agency has failed to provide.

Court filing highlights breadth of Mueller's investigation into Manafort - Federal prosecutors’ investigation into Paul Manafort’s financial dealings was enormous in scope, with FBI agents executing at least 15 search warrants and assembling a trove of hundreds of thousands of records related to the case, according to details in a new court filing. Lawyers from special counsel Robert Mueller’s office publicly outlined the scale of the probe on Friday as they informed a federal judge about efforts to turn over evidence to Manafort, the former Trump campaign chairman, and his business partner, Rick Gates, who were both indicted in October on charges that included money laundering and failing to register as foreign lobbyists for Ukraine. Prosecutors said that, by Monday, Manafort’s defense attorneys will have electronic copies of “400,000 items,” such as emails, bank and tax records, and documents from vendors Manafort allegedly paid with some of the money, and images of 36 electronic devices such as laptops, phones and thumb drives. Mueller’s team said that because the amount of materials in the legal discovery process is so great, the prosecution has tried to flag the most significant records. “Given the volume of discovery in this case, the government also produced to defendants certain documents that it identified as ‘hot,’” prosecutors said, with about 2,000 records in that category.

Trump allies demand special counsel probe of DOJ, FBI | TheHill: The revelation that a senior Department of Justice (DOJ) official met with and had close ties to the opposition research firm and British spy behind a controversial anti-Trump dossier has provoked new demands from President Trump’s allies for a special counsel investigation into the DOJ and the FBI. Fox News first reported that associate deputy attorney general Bruce Ohr met with Fusion founder Glenn Simpson and British spy Christopher Steele during the campaign. Ohr’s wife worked for Fusion GPS during the campaign.Simpson and Steele were the driving forces behind the opposition research memo, which was paid for in part by Hillary Clinton and the Democrats and may have been used by the FBI as part of its investigation into whether Trump campaign officials had improper contacts with Moscow. Those developments come as conservatives are increasingly questioning the credibility of special counsel Robert Mueller’s investigations. “Every week, we find additional information that would suggest the investigation into the dossier and how it was used was conducted with a plethora of conflict of interest issues,” House Freedom Caucus chairman Mark Meadows (R-N.C.) told The Hill. “Our confidence in the independence of the [special counsel] investigation has weakened, not strengthened, as details emerge.” Meadows is one of several GOP lawmakers who has called on Attorney General Jeff Sessions to tap a new special counsel or launch his own investigation into Democrats, the FBI and the DOJ — or to step aside for an attorney general who will.

Trump watches up to eight hours of TV per day: report | TheHill -  President Trump spends at least four hours a day watching television, according to a new report. People close to Trump told The New York Times that Trump spends at least that much time in front of a TV each day, and sometimes spends as many as eight hours watching television. The Times reports that Trump begins each day around 5:30 a.m. by turning on CNN before quickly flipping to Fox News's "Fox & Friends." He occasionally watches MSNBC’s “Morning Joe” because it works him up, Trump’s friends told the Times. Trump’s favorite programs include "Fox & Friends" as well as Fox News primetime shows from Sean Hannity, Laura Ingraham and Jeanine Pirro.   Trump sometimes “hate-watches” CNN host Don Lemon, according to the report. The Times also reports that the only people allowed to touch the remote control for the White House television are Trump and White House technical support staffers. Trump has previously insisted he has “very little time for watching TV,” though he often tweets about Fox News and CNN segments just after they air live. Trump also had a 60-inch flat screen TV installed in his private White House dining room, according to Time magazine. 

Trump drinks 12 Diet Cokes a day and has wild mood swings depending on his TV coverage: report - On Saturday, the New York Times offered a lengthy look at Donald Trump’s presidency from the inside with an article informed by “60 [presidential] advisers, associates, friends and members of Congress.”  The piece is a portrait of a president who has made almost no strides toward being a competent statesman and instead continues to do things his way, in the hope he can reinvent his role on his own ill-defined terms. The Trump presidency has largely been defined by the president’s highly visible insecurities and outsized ego.“Despite all his bluster, [Trump] views himself less as a titan dominating the world stage than a maligned outsider engaged in a struggle to be taken seriously.” Also, the guy seems able to tear himself away from his television only long enough to take in a few rounds of golf. Here are nine of the craziest revelations from the Times article.

  • 1. He watches a ton of television, but lies about it.  As soon as he wakes around 5:30am each morning, Trump turns on cable news and channel-hops throughout the day. Fox News shows like “Fox & Friends,” along with programs hosted by Sean Hannity, Laura Ingraham and Jeanine Pirro, which offer unfailingly fawning coverage, give the president “comfort and messaging ideas.” Trump reportedly “hate watches” MSNBC’s “Morning Joe” and CNN, particularly Don Lemon, in order to get “fired up.” He also lies about his level of TV consumption.
  • 2. He’s erratic, and his behavior is often determined by how his news coverage looks.   Trump basically starts tweeting from his iPhone shortly after waking and taking in cable news headlines, even dashing off messages “while propped on his pillow.” Staffers are careful to keep an eye on “Fox & Friends” live in the morning for a guide to the president’s headspace and a sense of how difficult the day will be. “If someone on the show says something memorable and Mr. Trump does not immediately tweet about it, the president’s staff knows he may be saving Fox News for later viewing on his recorder and instead watching MSNBC or CNN live — meaning he is likely to be in a foul mood to start the day.”
  • 3. He still doesn’t read and needs briefings tailored to his short attention span.  Trump has previously admitted that he doesn’t read because he imagines he has “a lot of common sense.” His disdain for knowledge has been a consistent marker of his approach to U.S. intelligence. He now gets verbal updates each day, with staffers noting he has “become more attentive during daily intelligence briefings thanks to pithy presentations by Mike Pompeo, the C.I.A. director.” “He really loves verbal briefings,” Treasury Secretary Steve Mnuchin told the Times. “He is not one to consume volumes of books or briefings.”
  • 4. He drinks up to 12 Diet Cokes a day. According to a new book by erstwhile campaign Trump staffers Corey Lewandowski and David Bossie, “On Trump Force One there were four major food groups: McDonald’s, Kentucky Fried Chicken, pizza and Diet Coke.” (Another Trump staffer told Axios, “Big Macs were served on silver trays in his private jet.”) The Times reports that Trump puts away two six-packs of Diet Cokes every single day, which he guzzles while (what else?) channel surfing and spouting off to anyone within earshot.

 Schumer calls cops after forged sex scandal charge -- Senate Minority Leader Chuck Schumer (D-N.Y.) said he was the victim of a fake news hit on Tuesday, and has turned over to Capitol Police a document that purports to detail lurid sexual harassment accusations by a former staffer. This was an apparent effort to dupe reporters and smear a senator — both symptoms of an amped-up news environment where harassment charges are proliferating and reporters have become targets for fraud. The former staffer told me in a phone interview that she did not author the document, that none of the charges ring true, and that her signature was forged. She said she had never heard of the document before Axios took it to Schumer's office for comment on Tuesday. Matt House, Schumer's communications director, told me: "The document is a forged document and every allegation is false. We have turned it over to the Capitol Police and asked them to investigate and pursue criminal charges because it is clear the law has been broken." House continued: "We believe the individual responsible for forging the document should be prosecuted to the fullest extent of the law to prevent other malicious actors from doing the same." 

Adorable European Politicians Accuse Wilbur Ross Of Insider Trading, Think It Actually Matters -- U.S. Commerce Secretary Wilbur Ross does things a little bit differently. He dresses differently. He sees brutal theocratic dictatorships differently. He counts differently. Most importantly, he has novel and innovative ideas about things like conflicts of interest and transparency, which mostly add up to the conclusion that the former do not exist and the latter is not important. Apparently, this memo has not reached Dublin or Brussels, where there is suddenly much hand-wringing and finger-pointing about the former private-equity titan’s suspiciously lucrative three-year investment in the Bank of Ireland. Earlier this year, Luke Ming Flanagan, an Irish politician and member of the European Parliament, the European Union’s governing body, commissioned a report on the 2008 eurozone banking crisis…. The report alleges that when Ross sold off his holdings in the bank for a massive profit in 2014, he possessed inside information that the bank was relying on deceptive accounting practices to mask its losses and embellish its financial position…. Ross “had access to the loss details that Bank of Ireland kept hidden from retail shareholders,” the report states. “The profit that Mr. Ross accumulated was largely at their expense….” “Wilbur Ross and others have serious questions to answer on the purchase of Bank of Ireland shares,” he said in the statement. We’re sure he’ll get right on that, Luke. In the meantime, we have a serious question for you: While you’ve been diligently plugging away on this report, have you had occasion to catch any of the headlines emanating forth from this side of the Atlantic vis-à-vis these sorts of things?

Analysis of Senate bill 2155 rolling back Dodd-Frank (podcast) The Senate Banking Committee has crafted a bill that would make dramatic changes to the Dodd-Frank Act. What’s in the bill and if it goes through, how will it impact bankers? American Banker reporter Ian McKendry reports on the potentially landmark legislation.

 Cheat Sheet: House banking panel’s 14-bill marathon — The House Financial Services Committee passed 13 bills on Wednesday, including one that would stop Fannie Mae and Freddie Mac from being released by the government and another hailed as helping the underbanked in rural areas. Among the most significant bills approved was one by Rep. French Hill, R-Ark., that would prevent the Treasury Department from selling its preferred stock and warrants in the government-sponsored enterprises until 2019. The bill, passed 33-27, would not prevent Congress and the Trump administration from moving forward with housing finance reform and signing legislation restructuring Fannie and Freddie.It would, however, stop the Trump administration from recapitalizing and releasing Fannie and Freddie from conservatorship, though there is no sign that it is planning to do so. A similar bill was included as part of a 2016 omnibus bill but is set to expire next year. Hill’s bill would also prevent the Federal Housing Finance Agency from allowing Fannie and Freddie to pay any money to the Housing Trust Fund, which is managed by the Department of Housing and Urban Development, in quarters where the GSEs are not profitable. “I believe that if the secondary mortgage market entities are not profitable or do not make payments to the Treasury, then they should forestall payments to the Housing Trust Fund,” Hill said in an interview last week. Fannie and Freddie contribute a small fee to the housing trust fund, which provides grants for affordable rental housing to states. In 2017, Fannie and Freddie contributed $220 million to the fund. The panel had been scheduled to vote on a 14th bill, one that would allow some money market funds to use a Net Asset Value to calculate price per share, but the panel dropped those plans. Following is a guide to other bills financial institutions are watching: slide 2: Bankers also hailed the passage of the Making Online Banking Initiation Legal and Easy Act of 2017, which was authored by Rep. Scott Tipton, R-Colo., with six Democrat and 18 Republican co-sponsors.

Volcker Rule poised for revamp with Trump’s regulators in place - — The Volcker Rule has developed a reputation in the banking industry as one of the most vexing and resented post-crisis regulatory reforms. The industry derides the proprietary trading ban enacted in the Dodd-Frank Act as costly, its standards vague and subjective, and its benefits few. The Trump administration has heard those concerns, and agencies have made efforts individually and together to reduce the compliance burden. But reforming a rule bound to a strict statute is not easy. Regulators must choose between subtle but expedient pin-prick changes or a more drastic overhaul that could take more time. Treasury Secretary Steven Mnuchin explained at a conference in May what he sees as the main problem with the Volcker Rule: its subjectivity. He indicated that the rule could be simplified with a more objective distinction between in-house trades, which are banned, and permitted trades done on behalf of a client. “The biggest problem with the Volcker Rule right now is, we all know that when you’re sitting in a room with two Bloombergs and a telephone and that’s all you do, that’s proprietary trading,” Mnuchin said. “But this should be relatively simple. If you’re sitting in a customer business and you’re doing customer trades and you’re facilitating the business … I think the right thing to conclude is that you’re acting within the context of the customer business.” In its June regulatory blueprint, the Treasury Department said that, while the Volcker Rule doesn’t need to be scrapped entirely, a handful of critical areas require immediate attention. Specifically, the report called for changes to the definition of proprietary trading; changes to the compliance programs at the agencies; changes to the definition of covered funds; a carve-out for community banks; and greater coordination among bank regulators in their enforcement and enforcement guidance policies. Timothy Keehan, vice president and senior counsel at the American Bankers Association's Center for Securities, Trust and Investments, said the industry’s expectation is that the regulators are taking a comprehensive look at the rule. “The regulators want to take a look under the hood and see what they can do to make this Volcker vehicle run better,” Keehan said. “Now, the question is how much work the car needs … but I think they want to take a look at the engine itself and see if the engine needs repair.”

Democrats lamenting Trump policies now see Dodd-Frank’s problems - Supporters of the Dodd-Frank Act are crying “foul” over the appointment of a Trump administration official as acting head of the Consumer Financial Protection Bureau, and more generally the administration’s plans to alter rules stemming from the 2010 financial reform law. But others see the irony in their protests.  President Obama was not going to be in the White House forever. And a change in administration brings management change at executive and independent regulatory agencies. If laws are well-crafted, the change should not portend wholesale changes in financial regulatory policy. But when the law at issue is Dodd-Frank — management changes can bring sweeping revisions to the regulatory environment. Only now, as the new administration takes root, are Democrats recognizing and understanding the flaws in the law they passed and have so staunchly defended.  For years, Republicans on the House Financial Services Committee have identified serious legal problems in the drafting of Dodd-Frank. Subsequent court decisions have substantiated the merits of a number of these criticisms. These problems range from the unaccountable and unconstitutional governance structure of the CFPB, to unelected officials at the Federal Reserve Board and Financial Stability Oversight Council being empowered with massive regulatory discretion that can be exercised with few if any checks and balances for regulated firms or the Congress that delegated the powers.   Few regulatory debates have triggered the types of legal battles and heated protests as the current back-and-forth over how to handle agency transitions.  To make sense of this, one must understand that Dodd-Frank gave the financial regulators vast new powers that enabled the managers of these agencies to decide, within very broad boundaries, the character of financial regulation. How these powers are exercised is largely determined by who is in charge of the financial regulatory agencies. Dodd-Frank does very little to constrain the exercise of regulatory power — which explains why, under President Obama, Republicans pushed for reforms and why under president Trump, Democrats are so vigorously opposing management changes at the financial regulatory agencies.

Court throws out New York regulator's suit against OCC fintech charter -  A New York District Court judge threw out a lawsuit by the New York Department of Financial Services that sought to block the Office of the Comptroller of the Currency’s attempted fintech charter, saying the charter doesn’t exist yet so the suit is premature.“Since the OCC has not reached a final ‘fintech charter decision,’ defendants’ … motion is granted as plaintiff has suffered no injury in fact … and because plaintiff’s claims are not ripe,” said Judge Naomi Reice Buchwald in her ruling.  The court dismissed the case without prejudice, however, meaning that there is still a possibility that the New York regulator could re-sue the OCC if it were to actually create a fintech charter in the future.

HSBC escapes prosecution as U.S. ends 5-year deferred deal - HSBC Holdings said that its five-year-old deferred prosecution agreement with the Department of Justice has expired, signaling the U.S. is satisfied with the bank’s improvements to its compliance systems after it was ensnared in a money-laundering scandal in Mexico.The Justice Department will file a motion with a court in the Eastern District of New York seeking the dismissal of charges after HSBC "lived up to all of its commitments" to improve its anti-money laundering and sanctions compliance capabilities, the London-based bank said in a statement Monday. Once dismissed, the bank can no longer be criminally prosecuted for the matter.“HSBC is able to combat financial crime much more effectively today as the result of the significant reforms we have implemented over the last five years,” CEO Stuart Gulliver said in the statement. The bank is working on “further improvement” to its capabilities, he added.  HSBC paid a then-record $1.9 billion settlement in 2012 for helping Mexican drug cartels launder money and breaching international sanctions by doing business with Iran. The lender pledged to cooperate with Justice Department probes for five years and by doing so was spared the stigma of a criminal record in the U.S. — and the threat that it might lose access to some of its most lucrative institutional banking activities in the world’s largest economy. The bank was also put under the supervision of an external monitor, Michael Cherkasky, who started in 2013. No new documents had been filed in the deferred-prosecution matter as of midmorning in New York. The Justice Department in Washington, D.C., didn’t immediately respond to a request for comment. John Marzulli, a spokesman for acting Brooklyn U.S. Attorney Bridget Rohde, declined to comment.

How Deutsche Bank Enabled A Dirty Offshore Bank To Move Dark Money -- This is Part Three of a BuzzFeed News investigation.
Part One: Secrets Of One Of The World's Dirtiest Banks And Its Powerful Western Protectors
Part Two: Kremlin-Linked Slush Funds Funnelling Money To Syria's Chemical Weapons Financiers
Deutsche Bank facilitated hundreds of millions of dollars of transactions for a corrupt Cyprus bank that served as a hub for illicit money from “the darkest corners of the criminal underworld”, a trove of secret documents obtained by BuzzFeed News reveals.  Deutsche – and its New York subsidiary under scrutiny for its loans to Donald Trump – provided a crucial bridge between FBME Bank and the global financial system, acting as its longstanding correspondent bank in the US and helping some of its most nefarious clients move illicit money into the West.FBME was banned from using the dollar this year after losing a protracted legal battle with the US government – three years after the Financial Crimes Enforcement Network, known as FinCEN, first moved to stop the bank sending “dirty funds through the U.S. financial system”. FinCEN kept much of its evidence against FBME secret – but the files obtained by BuzzFeed News have exposed the Cyprus bank as a major conduit for funds linked to terrorism, organised crime, and chemical weapons, and revealed how blue-chip Western institutions enabled its activities. In recent days we disclosed how FBME’s ultra-powerful international law firms – including an attorney playing a key role in the Trump-Russia investigation – crusaded for the bank while accountants at two of the world’s biggest accounting firms signed off its activities, and we exposed a network of Kremlin-linked slush funds inside FBME funnelling money to shadowy people fronting for Syria's chemical weapons programme, organised crime, and ISIS. The revelations have prompted calls from politicians and campaigners for a crackdown on corrupt institutions in money laundering hotspots such as Cyprus – and the enablers that act as their gateway into the West. Ian Austin, a British member of parliament, said “BuzzFeed's investigation provides even more evidence of illicit funds flowing through Cyprus” and called on the UK government to act swiftly to shut “criminals and stolen money” out of the financial system. Transparency International called for a “drastic overhaul” of financial regulations to hold bankers, lawyers, and accountancy firms to account for their role in enabling corrupt banks implicated in money laundering.

Trump's Wells tweet fuels regulatory independence concerns --In vowing to come down hard on Wells Fargo, President Trump left many in Washington speechless on Friday—literally. After Trump wrote on Twitter that fines against the $1.9 trillion-asset bank will be pursued and possibly strengthened, the first time in recent memory that a president vowed tough action against a specific bank that remains under investigation, nearly everyone held their fire.  That included the major trade groups, such as American Bankers Association, Independent Community Bankers of America, and the Consumer Bankers Association, which had little incentive to antagonize a president whose regulatory agenda they support.   But it also included Democrats, such as Sen. Elizabeth Warren and Rep. Maxine Waters, who have fiercely criticized both the bank and the Republican president, and likely did not want to give the appearance of defending either one. Even Wells Fargo itself declined to comment. Analysts said that Trump's tweet was shrewd, though some also voiced concern about its implications for the independence of the Consumer Financial Protection Bureau. The president's attack appeared to be a response to a Reuters story that was published the day before. That story cited anonymous sources who said that acting CFPB Director Mick Mulvaney is reviewing the terms of a tentative settlement with Wells regarding alleged wrongdoing in its mortgage business. The report said that former CFPB Director Richard Cordray approved the proposed terms before stepping down in November.Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!  — Donald J. Trump (@realDonaldTrump) December 8, 2017   For all the silence the tweet engendered, however, Trump's comments added fuel to the growing controversy regarding the independence of federal financial regulators. Mulvaney's appointment to head the CFPB has drawn sharp criticism from Democrats, in part because the former GOP congressman also serves as the head of the White House Office of Management and Budget. Mulvaney has vowed to place a political appointee at the top of each division at the CFPB.

Yellen dismisses concerns about regulatory chops of Fed’s new leaders — Despite concerns from Democrats about the bank regulatory views of Federal Reserve Board officials who will lead the central bank following the departure of Janet Yellen, the current Fed chair said Wednesday that she is not worried.Yellen said there was little if any difference between her views on bank regulation and that of her colleagues on the Fed board. That includes Gov. Jerome Powell, who has been nominated to be her successor. “All of my colleagues on the board have expressed a strong commitment to keep in place the core reforms that have produced a strong financial system,” Yellen said, referring to changes in capital retention, stress testing, living wills and liquidity requirements. “I think all of us agree that it is appropriate to tailor regulatory requirements … to the systemic footprint of firms,” Yellen said. “We’re also focused on community banks and want to find ways to relieve burdens. I do think all of my colleagues are in the same place with respect to our priorities.” When asked whether there were any differences in her approach to banking regulation and the positions of her colleagues on the Fed board, Yellen said that she has “not seen anything emerge at this point that I would describe as a significant difference.”  Yellen’s comments, which were delivered in what is almost certainly her final press conference as Fed chair before her term expires in February, come as some Senate Democrats have assailed Powell and President Trump’s recently installed vice chair of supervision, Randal Quarles, as insufficiently tough on Wall Street banks and questioned their dedication to ensuring that financial firms do not pose a risk to the financial system.  Sen. Elizabeth Warren, D-Mass., was the sole member of the Senate Banking Committee to vote against Powell’s nomination to succeed Yellen earlier this month. In a statement before the vote, Warren said Powell’s views on big banks and deregulation made her withhold her support for his nomination. “Our financial rules for big banks need to be stronger, not weaker, and I have no faith that Gov. Powell will move the Fed in that direction,” Warren said.  Sen. Sherrod Brown, D-Ohio, the top Democrat on the committee, similarly withheld his support for a bipartisan bill aimed at rolling back some aspects of Dodd-Frank over concerns about a provision in the bill to make some stress tests “periodic” rather than annual. He said such a change would give the new crop of Fed regulators the freedom to weaken a critical supervisory tool. Brown said he wouldn’t have had the same concerns about different regulators, but with Quarles and Powell, he did.

The familiar fingerprints on the Fed's stress test changes — While the winds may be changing at most banking agencies since President Trump’s election, the Federal Reserve Board's plans to update and revise its stress testing program is one area where there is a lot of continuity between the prior administration and the current one. But in contrast to other initiatives at other agencies, where Trump appointees are poised to go in a significantly different direction than their Obama-appointed predecessors, the Fed's stress test work appears aligned with the vision set out by previous leadership.Observers say that for all the uncertainty generated by the change in administrations, they expect that any final package of stress test changes will probably bear more than a passing resemblance to a plan outlined by former Fed Gov. Daniel Tarullo, an Obama appointee, for reasons of both practicality and expediency. For example, the Fed's recent move to be more transparent about its stress test methodology is consistent with steps advocated for by Tarullo.  “I don’t believe the Fed was going to scrap things because they were the last guy’s ideas,” To be sure, regardless of which party held power, the Fed was always likely to revise its stress tests over the coming years after gathering input on what has and has not worked with the tests thus far. It was just a question of how the central bank would make those changes and when.Tarullo, whom President Obama appointed to the board in 2009 and who headed the Fed's supervisory committee, had sketched out the contours of what he envisioned as a retooled Comprehensive Capital Analysis and Review stress test during a speech last year. The plan would include revisions to a minimum capital requirement, removing a qualitative assessment for all but the largest banks and broadening macroprudential consideration for annual stress test scenarios. Since the election, Republicans in Congress and some in the banking industry have also targeted CCAR, although with more extreme changes in mind — envisioning a pared-down, or even eliminated CCAR program. But for the time being, at least, the Fed's current and future leaders seem to be incorporating many elements of Tarullo's blueprint, moving forward with a plan to make the stress test process more transparent while avoiding any wholesale makeover of CCAR.

 Fed’s Janet Yellen: Stock Market Bubble Not Seen as Major Risk Factor - Pam Martens -  The outgoing Chair of the Federal Reserve, Janet Yellen, held her last press conference yesterday following the Federal Open Market Committee’s decision to hike the Feds Fund rate by one-quarter percentage point, bringing its target range to 1-1/4 to 1-1/2 percent. Given the growing reports from market watchers that the stock market has entered the bubble stage and could pose a serious threat to the health of the economy should the bubble burst, CNBC’s Steve Liesman asked Yellen during the press conference if there are “concerns at the Fed about current market valuations.” Yellen gave a response which may doom her from a respected place in history. She stated: “So let me start Steve with the stock market generally. Of course the stock market has gone up a great deal this year and we have in recent months characterized the general level of asset valuations as elevated. What that reflects is simply the assessment that looking at price-earnings ratios and comparable metrics for other assets other than equities we see ratios that are in the high end of historical ranges. And so that’s worth pointing out. “But economists are not great at knowing what appropriate valuations are. We don’t have a terrific record. And the fact that those valuations are high doesn’t mean that they’re necessarily overvalued. “We are in a – I’ve mentioned this in my opening statement and we’ve talked about this repeatedly – likely a low interest rate environment, lower than we’ve had in past decades. If that turns out to be the case, that’s a factor that supports higher valuations. “We’re enjoying solid economic growth with low inflation and the risks in the global economy look more balanced than they have in many years. “So I think what we need to, and are trying to think through, is if there were an adjustment in asset valuations in the stock market, what impact would that have on the economy and would it provoke financial stability concerns. “And, I think when we look at other indicators of financial stability risks, there’s nothing flashing red there or possibly even orange. Yellen makes at least one unassailable admission in this statement: her economist predecessors at the Fed certainly “don’t have a terrific record” in calling out bubbles – Alan Greenspan being the worst offender.

 Jamie Dimon Says Corporations Will Fund Buybacks With Tax Cuts And That's "Not A Bad Thing" - For at least half a decade now (How The Fed's Visible Hand Is Forcing Corporate Cash Mismanagement) we have warned about how the Fed’s flawed approach to monetary policy incentivizes corporations to fund share buybacks with massive amounts of debt... …While the corporate sector has spent record sums on share buybacks... Capex has experienced an unprecedented decline... Of course, some Democrats have argued that the Trump tax plan will perpetuate essentially the same incentives as corporate tax rates are slashed and money brought back from overseas is spent on still more buybacks, instead of creating jobs and capital expenditures, like the Republicans argue it will be. The flimsiness of the GOP’s argument was exposed a few weeks ago during a memorable gaffe involving NEC Chief (and former No. 2 at Goldman Sachs) Gary Cohn, one of two officials managing the tax bill on behalf of the White House – the other being Treasury Secretary Steven Mnuchin, also a former Goldmanite. During an event for the Wall Street Journal's CEO Council, an editor at The Wall Street Journal asked the room: "If the tax reform bill goes through, do you plan to increase investment - your company's investment, capital investment?" He asked for a show of hands. Alas, as the camera revealed, virtually nobody raised their hand. Responding to this "unexpected" lack of enthusiasm to invest in growth, Cohn had one question: "Why aren't the other hands up? While Cohn’s dismay at the lack of enthusiasm for his tax plan was obvious and embarrassing (the clip was in heavy rotation on CNBC for much of the next day), the fact that corporations will spend the windfall created by the tax bill isn’t necessarily a bad thing, according to JP Morgan Chase CEO Jamie Dimon. Dimon, who was speaking at a conference in Ann Arbor, Michigan hosted by Axios, according to CNBC. According to Dimon’s logic, repatriations enabled by the tax plan could swiftly lead to more than $1 trillion being brought back from overseas. It doesn’t matter where that money goes, the point is there will be more capital sloshing around the domestic economy…and that will eventually manifest itself in the form of capex, job creation and higher wages…

ICBA sues Equifax over data breach --The Independent Community Bankers of America has filed a lawsuit against Equifax in hopes of compensating small banks for a recent data breach that potentially affected more than 140 million people. The ICBA, which filed its lawsuit in U.S. District Court for the Northern District of Georgia, said in a press release that it wants Equifax “to improve its security to avoid additional harm to the consumers and local communities that community banks serve.” The ICBA, led by CEO Cam Fine, wants Equifax to reimburse community banks for costs tied to a recent security breach. Cybercriminals earlier this year attemped to gain access to personal data, including Social Security numbers, birth dates and addresses, for tens of millions of Americans. Credit card numbers for more than 200,000 U.S. consumers were also exposed. The lawsuit says Equifax should reimburse community banks for a variety of costs, including measures to deter customer identity thefts, deposit and loan account fraud, customer notification, covering fraudulent transactions, and payment card cancellation and replacement. The litigation also asks that the court to require Equifax to have adequate security measures. Equifax did not immediately return a call seeking comment.

Why JPM, Amex, HSBC backing ‘isolation’ web browsing -- Though hackers get more sophisticated every day, most cybersecurity attacks start the same way they always have: Someone clicks on a link they shouldn’t have.Often users are tricked by phishing emails that mimic a legitimate note from the boss or a senior corporate leader. And the links and sites can look secure. According to PhishLabs, nearly 25% of all phishing sites in the third quarter were hosted on HTTPS domains — almost double the rate of the previous quarter. And even when the phishing email is amateurish, multitasking professionals absent-mindedly click while talking on the phone, and malware rushes in. And there are drive-by attacks, in which a visitor to an apparently legit website gets infected by malicious code downloaded onto their computer without even clicking on anything.Humans are incapable of detecting every phishing email or vetting every element of a website. It’s not that we’re dumb, necessarily, but the signs of malicious intent are generally invisible to the human eye. As part of their effort to deflect these attacks, some banks are turning to isolated browsing, or remote browsing, technology. Such systems force all internet activity to happen in a protected space on the cloud, preventing malicious code from reaching a company’s network. The technology is not brand new, but it is starting to gain traction as some large banks have finished their testing of it and are going public with their use of it.

Bitcoin Futures Are Wall Street’s New Big Thing — And They’re Up 26% -- Bitcoin has landed on Wall Street with a bang. Futures on the world’s most popular cryptocurrency surged as much as 26 percent from the opening price in their debut session on Cboe Global Markets Inc.’s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers’ expectations, while traffic on Cboe’s website was so heavy that it caused delays and temporary outages. The website’s problems had no impact on trading systems, Cboe said. “It is rare that you see something more volatile than bitcoin, but we found it: bitcoin futures,” said Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia. The launch of futures on a regulated exchange is a watershed for bitcoin, whose surge this year has captivated everyone from mom-and-pop speculators to Wall Street trading firms. The Cboe contracts, soon to be followed by similar offerings from CME Group Inc. and Nasdaq Inc., should make it easier for mainstream investors to bet on the cryptocurrency’s rise or fall. Bitcoin wagers have until now been mostly limited to venues with little or no oversight, deterring institutional money managers and exposing some users to the risk of hacks and market breakdowns. Bitcoin futures expiring in January climbed to $17,540 as of 11:29 a.m. in London from an opening level of $15,000, on 2,798 contracts traded. The spot price climbed 6.4 percent to $16,647 from the Friday 5 p.m. close in New York, according to the composite price on Bloomberg. The roughly $900 difference reflects not only the novelty of the asset but also the difficulty of using the cash-settled futures to trade against the spot, strategists said. “In a normal, functioning market, good old arbitrage would settle this,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Hellerup, Denmark, said by email. “If they were deliverable you could arbitrage the life out of it.” 

Bitcoin on track to topple global economy in five months - It has now doubled in 21 days.  It’s approaching 300bn market capitalisation now. So at the current rate of growth it will surpass the $79tr global economy in value in roughly five months. Lunacy is setting in, via FTAlphaville comes five reasons:

  • 1) The spread between the top three exchanges offering your product is no less than… $4,000.
  • 2) The utility function of your “currency” product is compromised by a traffic jam of 193,211 transactions…
  • 3) The average transaction fee to initiate a payment is $7.
  • 4) A conspiracy theory involving the imminent hacking of your network doing the rounds.
  • 5) People allegedly killing themselves because of FOMO.

And panic is following, via the FT: The world’s largest banks are pushing back on the introduction of bitcoin futures, raising concerns with US regulators that the financial system is ill-prepared for the launch of the contracts as the value of the volatile cryptocurrency has soared. The price of bitcoin has risen to a new high of more than $15,000 on several exchanges.Institutional investors have been keen to trade the asset but only via a regulated market. However, the planned launch in the next 10 days of futures contracts by the Chicago exchanges CME Group and CBOE Global Markets, given a green light from the Commodity Futures Trading Commission last week, has prompted a backlash among the major brokers who backstop trading across the industry.According to a letter from the Futures Industry Association, the main futures industry lobby group whose members include all the largest Wall Street banks, to the CFTC, the rapid introduction of bitcoin futures “did not allow for proper public transparency and input”. Somehow observing that this is crazy just doesn’t say it.

"It's In The Mania Phase": Securities Regulator Warns That "Mortgages Are Being Taken Out To Buy Bitcoin" -- As the investing world continues to argue back and forth over whether Bitcoin is an acceptable store of value or nothing more than a massive bubble that has only been rivaled by the Dutch tulip mania of the 1600's, new information revealed by the President of the North American Securities Administrators Association would tend to lend some credence to the latter.Appearing on Power Lunch today, Joseph Borg, also director of the Alabama Securities Commission, argued that Bitcoin has clearly entered its "mania phase" with people now taking out home equity loans and cash advances on credit cards to purchase the digital currency in the hopes of getting rich quick."We've seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines," said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission."This is not something a guy who's making $100,000 a year, who's got a mortgage and two kids in college ought to be invested in." "You're on this mania curve. At some point in time there's got to be a leveling off. Cryptocurrency is here to stay. Blockchain is here to stay. Whether it is bitcoin or not, I don't know," Borg said in an interview with "Power Lunch."

A quarter trillion dollars is at risk when bitcoin crashes — and that’s just for starters - One day, it's assumed, the technology underlying bitcoin will trigger serious financial disruption. But as of now, that tech — called blockchain — is hindered by stubborn shortcomings. And one of the biggest potential bombshells — a shakeup of the $8 trillion-a-year credit card industry — may be a decade away, if it happens at all, experts tell Axios. Driving the news: Like tulips and dotcom shares before them, crypto-currencies—the only blockchain technology currently operating at large scale — have gripped the wise and reckless alike. Investors won't lose all the $250 billion in bitcoin that they currently hold when the fever inevitably breaks, but many will forgo paper profits, plus much of their original investment. Meanwhile, fraud, theft and other mischief threatens the first bitcoin futures trading, which began last night, per the Wall Street Journal. The futures price for January bitcoin surged to $18,850 at one point early today and twice triggered a halt to trading. Invented in 2008, blockchain is a secure ledger where users can record transactions like payments, a chain of supply, a contract, and the origin of commodities like pork or diamonds. The main blockchain technology — crypto-currencies, digital cash with no central organizer like the Fed — took off this year, with people pouring money into launch events called Initial Coin Offerings (ICOs) by dozens of the new currencies. Most of the money has gone into bitcoin, the most popular crypto-currency, whose face value has surged by 15X this year. From about $960 at the start of January, bitcoins were selling for more than $15,000 as of last evening. 

Peak Bitcoin Media-Mania Yet? - Wolf Ricther - In ten practically funny pictures. Bitcoin mania is now everywhere. It’s hard to have a conversation with regular people without sooner or later getting into bitcoin. Some of this is just for fun. Manias breed amazement. Miracles are wonderful to behold. But some of it is pretty serious. “We’ve seen mortgages being taken out to buy bitcoin,” said Joseph Borg, president of the North American Securities Administrators Association and director of the Alabama Securities Commission, on CNBC’s Power Lunch today. “People do credit cards, equity lines,” he said. But there were also some bitcoin-free zones. Here’s CNBC’s home page with three “bitcoin” headlines at the top part of the page, including the featured article: And MarketWatch with seven articles on bitcoin at the top of its homepage, including the featured article: Bloomberg had five articles at the top of its homepage, including the featured article: Yahoo Finance — oh my! — showed 15 bitcoin articles among the first 12 hours of articles on its endless homepage. This includes wonderfully, “Is it too late to buy Bitcoin?” To show how important the whole affair is, Yahoo featured a bitcoin article and a bitcoin video at the very top, its two most important topics: The Wall Street Journal was slightly more subdued with three bitcoin articles on the homepage. But none of them were featured and all of them were beneath some other priorities. The three articles include one — “Buyers Get Unwanted Message: Wait in Line” — that doesn’t mention bitcoin in the headline on the home page, but once you click on the article, the headline starts with “Bitcoin Buyers Get…” Reuters had only two bitcoin articles in prominent positions at the top, but none were the big featured article. Comcast got that spot: But the Washington Post was very lackadaisical in its bitcoin mania, with only one article on the home page, way down near the bottom under “Business & Real Estate”:The New York Times failed to show the proper enthusiasm with no bitcoin articles on the homepage. However, after clicking my way to the business section, I found a “bitcoin” headline about halfway down, and it wasn’t particularly enthusiastic either: USA Today had three bitcoin headlines on its homepage, but all three led to the same article. Here is the first reference: 

Busting the myth that bitcoin is actually an efficient payment mechanism -  Izabella Kaminska - We’ve said it many times before. As an actual payments mechanism, bitcoin sucks. It’s expensive to use and getting ever more so. It can be slow and unpredictable. It’s complicated and very user unfriendly (computer nerds will dispute this, but in doing so show how detached they are from the everyday needs of the average population). It depends on untested third parties for usability even more so than conventional electronic money. It’s prone to hacking. It demands users read Reddit all day every day to keep up with the latest exchange, transaction and wallet updates. It passes way too much responsibility to the average user (even the well-educated lose passwords). It sucks on the energy efficiency front. Its volatility makes it a crappy medium exchange. And finally, if not foremost, the more of a speculative asset it becomes the less useful it becomes as a currency. But that was our opinion. The above was summed up in an even more compelling way by Philip Lowe, governor of the RBA, in a speech this week: One class of technology that has emerged that can be used for payments is the so-called cryptocurrencies, the most prominent of which is Bitcoin. But in reality these currencies are not being commonly used for everyday payments and, as things currently stand, it is hard to see that changing. The value of Bitcoin is very volatile, the number of payments that can currently be handled is very low, there are governance problems, the transaction cost involved in making a payment with Bitcoin is very high and the estimates of the electricity used in the process of mining the coins are staggering. When thought of purely as a payment instrument, it seems more likely to be attractive to those who want to make transactions in the black or illegal economy, rather than everyday transactions. So the current fascination with these currencies feels more like a speculative mania than it has to do with their use as an efficient and convenient form of electronic payment.

How The Net Neutrality Vote May Block Bitcoin And Cryptocurrency Trading - Cryptocurrencies—Bitcoin in particular—have enjoyed skyrocketing prices over the course of the last year and has seen the majority of its rise in value and availability take place under the Obama-era Open Internet Order. With it gone, the currencies may face new scrutiny from internet service providers (ISPs).Under the Open Internet Order, which was passed by the FCC in 2015, the commission has been given regulatory levers to ensure that ISPs like Comcast, Verizon and AT&T can’t violate the principles of net neutrality. The bright line rules that define net neutrality include no blocking of any legal content, no slowing or throttling internet connection speeds and no paid prioritization that offers preferential service to those who pay for it.Without those rules in place, ISPs may have the ability to target content or services where they see a significant amount of user activity—and cryptocurrency exchanges have become a hotbed of action as more and more people try to get in on the booming market.Priyabrata Dash, editor of Crypt Bytes Tech, wrote earlier this year that the biggest threat to cryptocurrency markets is the repeal of net neutrality.Justin Tabb—the CEO and co-founder of the decentralized, open-sourced internet startup Substratum Network—told International Business Times the repeal of net neutrality protections could complicate all parts of the cryptocurrency ecosystem. “The elimination of net neutrality protections could pose a threat to Bitcoin miners and traders in the form of throttling or even blocking access to Bitcoin and cryptocurrency sites, including exchanges,” he said.

Mastermind Of $4 Billion Bitcoin-Laundering Operation Will Be Extradited To US -- Greece's Supreme Court has rejected an appeal by Russian national Aleksandr Vinnik, the purported mastermind of what US authorities have described as a $4 billion bitcoin money laundering operation, to avoid extradition to the US, where he has been indicted – along with his former company, mysterious digital currency exchange BTC-e – on nearly two dozen felony counts, including fraud and money laundering. Russia, where Vinnik is accused of stealing 600,000 rubles ($10,500) from an unidentified entity “using... deception and the internet,” also requested extradition. The competing request had earlier been approved by another court ruling, but the final decision on the matter will be made by the Greek Minister of Justice. Greek ruling to extradite Russian Bitcoin expert to US violates int’l law – Moscowhttps://t.co/2nheAct8t3 — RT (@RT_com) October 6, 2017 Russia criticized the court’s first decision as unjust and illegal, saying that its request “takes precedence [over another country’s] as Vinnik is a citizen of the Russian Federation.” “The Supreme Court’s decision was expected, it is a decision on an appeal on the same decision of the Thessaloniki court. There are more opportunities for legal work which will be carried out now,” Vinnik’s lawyer, Timofey Musatov, said on Wednesday, according to Russia Today. The Thessaloniki court ruling in favor of the US was politically motivated, Musatov told RT. He warned that the suspect’s eventual extradition would mean that “any citizen in the world could be arrested at any second on false accusations, in which there are no facts, but only assumptions.”

Cryptocurrencies aren’t the problem in recent hacks, user error is -- As bitcoin gallops to new heights, any number of warnings have been issued by a mainstream press struggling to keep up. One of the most dire is that cryptocurrencies are vulnerable to digital attack. When Tether, the company behind a cryptocurrency of the same name, announced in late November that an attacker had stolen $31 million worth of tokens from its digital wallet, the mainstream press sounded more alarms. A Bloomberg story was typical, declaring the theft had "renewed concern about the security of digital coins." (Whose concern it was, the article didn't say.) Such scrutiny will only intensify if the value of digital assets keeps climbing. Now cryptocurrency veterans are speaking up, arguing that the Tether hack and incidents like it mean little for the health of the blockchain ecosystem and even less for the security of decentralized cryptocurrencies such as bitcoin. The problem with such articles — and the root of misperception on the subject generally — is that "they equate the theft of the coin to a security problem of the coin," said Erik Voorhees, founder and CEO of the digital-asset exchange service ShapeShift. "In reality, it's almost always a security problem of the company that lost the coin." An analogy is helpful. If a bank leaves its vault door open, and someone waltzes right in and makes off with the cash or gold inside, "it doesn't throw into question the security of dollars or the security of gold," said Voorhees, whose company processed $600 million worth of cryptocurrency trades in November. "It just means the bank f----- up." 

Vanguard mutual fund giant plans blockchain network -- While big banks debate how blockchain technology might be used to improve financial services and join consortiums to launch pilot projects, one of the world's largest asset managers is leading by example.  Vanguard is preparing to launch a blockchain network, in partnership with the Center for Research in Security Prices and the smart-contracts startup Symbiont, which aims to improve the speed and accuracy of the capital markets. The dedicated network, created by Symbiont, will allow investment managers to receive and process data from CRSP instantly.  A few large banks are also taking matters into their own hands. State Street, JPMorgan Chase and Bank of New York Mellon are all developing blockchain projects, drawn to the technology's promise of more transparent custody and faster transactions. The idea behind Vanguard’s effort is similar: By automatically ingesting index data being shared on a decentralized database, the mutual fund provider, which manages $4.8 trillion in assets, will obtain a more complete and up-to-date picture of the market, an improvement that could yield better returns for clients. As it stands, the process is distressingly manual. Once a day, providers such as CRSP send asset managers and trading shops a set of files that tell them the state of various indexes. As the trading day progresses, data providers push out further updates to their own websites. "We have to have people who sit and watch those websites and look for the updates and then interpret them and process them manually into our systems," said Warren Pennington, a principal in Vanguard's investment management group.  Once Symbiont's network launches in early 2018, the blockchain-powered process Vanguard envisions will be "completely streamlined," Pennington said. "The index provider makes their updates all the time onto the blockchain. We and other subscribers have an exact copy of that at the same time that they make the changes, and it's instantly recognized by our systems."

JPMorgan Chase, Barclays join IBM quantum computing network - Two major banks have become charter members of a quantum computing network established by IBM, another sign of how far financial services companies are going to make themselves more competitive and to steel themselves against security threats.JPMorgan Chase and Barclays are among the partners in the development of the IBM Q Network, a widely accessible, 20-qubit quantum computing system that the technology company unveiled Thursday. IBM has for some time made quantum computers available for broad use and an open-source platform for developing programs for them.JPMorgan is looking at using IBM’s quantum computing systems for trading, portfolio optimization, asset pricing and risk analysis, among other things. Barclays is just beginning to investigate potential uses for the financial industry. Many banks are interested in using quantum computing for risk management. Risk calculations entail large numbers of complex simulations. “On conventional computers you have thousands of cores deployed for those calculations, and at the end of the day you are constrained by the sheer cost of the hardware,” said Keith Bear, vice president of global financial markets at IBM.  The banks want to find out if they can calculate risk and analyze portfolios at quantum speeds.

Despite court win, OCC still faces legal 'landmine' over fintech charter -- Comptroller of the Currency Joseph Otting has not weighed in on the fate of a fintech charter yet, but the ball is now squarely in his court. The agency that Otting was just appointed to run scored a victory earlier week when a judge dismissed a lawsuit from the New York Department of Financial Services, which had challenged the Office of the Comptroller of the Currency's authority to create a charter for fintech firms.  But that victory may set up future legal challenges. U.S. District Court Judge Naomi Reice Buchwald said the case was merely premature since the OCC has not actually granted a charter yet. That raises the prospect of the case returning if the OCC moves ahead. Meanwhile, a separate legal challenge by the Conference of State Bank Supervisors is still pending.

Trump Financial Regulator Mulvaney Pushed CFPB To Back Off Industry That Bankrolled Him - Consumer Financial Protection Bureau chief Mick Mulvaney repeatedly pressed the agency to back off lending regulations as financial industry donors were bankrolling his congressional bids, according to government documents obtained by International Business Times. Some of the letters signed by Mulvaney that pressured the agency came within weeks of him raking in campaign contributions from payday lending industry donors who were urging the CFPB to stand down. In response to an IBT open records request, the CFPB released 268 pages of correspondence between the agency and Mulvaney during the Republican’s six years in Congress representing South Carolina —which is home to one of the largest payday lenders in America. President Donald Trump recently appointed Mulvaney to run the CFPB, which Mulvaney had previously criticized.  IBT has published the full trove of Mulvaney’s congressional correspondence with the CFPB and made the documents word-searchable. Click here to see the documents.  During his congressional campaigns, Mulvaney vacuumed in more than $567,000 from donors in the commercial banking, credit and securities/investment industries, according to data compiled by the Center for Responsive Politics. That includes more than $55,000 from donors in the payday and title loan industry, according to data from the National Institute on Money in State Politics.  The letters reviewed by IBT show that much of Mulvaney’s criticism of the CFPB revolved around the agency’s attempts to regulate the payday lending industry, which provides short term, high-interest loans. One such CFPB effort came in June 2016, when the agency proposed a rule that it said would require payday and title lenders to “reasonably determine that the consumer has the ability to repay the loan.”  Three months after the agency proposed the rule, Mulvaney and eleven other lawmakers wrote a letter to the agency asserting that the rule “has the potential to severely restrict access to credit that millions of Americans rely on”.  In the three weeks leading up to the letter, Mulvaney received $18,500 in campaign contributions from payday lenders’ political action committees and executives — including $4,000 from Advance America’s PAC, $2,700 from the Advance America’s CEO J.P. O’Shaughnessy, $2,700 from LoanMax owner Rod Aycox and $2,000 from the Amscot CEO Ian MacKechnie.

Payday lenders see new opportunity at revamped CFPB - With new Republican leadership seizing the reins of the Consumer Financial Protection Bureau, the U.S. payday loan industry finally has an opportunity to weaken or kill a regulation that it has battled for years. Payday lenders fought tooth and nail to stop the CFPB from adopting the strict new restrictions, but their arguments largely fell on deaf ears during Richard Cordray’s four-and-a-half-year tenure as director. The regulation, finalized in October, would make it much harder to issue high-cost consumer loans of 45 days or less. But the arrival of acting CFPB Director Mick Mulvaney, a former GOP congressman who was among the top recipients of campaign contributions from payday lenders, opens new doors for the long-embattled sector. Earlier this week, Mulvaney made clear his opposition to the payday loan rule. So now, rather than having to persuade the CFPB to back down, industry lobbyists can focus on providing agency officials with justifications for retreating, as well as suggestions for how to do so in a way that will not spark a political backlash. One payday lobbyist said that the industry is pursuing a multipronged strategy. One involves seeking help from the Trump administration to ease the regulatory environment. But the strategy may also include filing a lawsuit to get a judge to overturn the CFPB rule. “Hopefully one approach will work,” the source said. The CFPB cannot withdraw the payday loan rule without undertaking a lengthy information-gathering process. But Mulvaney sits in an unprecedented position as both the acting director of the CFPB and the head of the White House Office of Management and Budget, which has authority to review executive branch regulations. The latter job may give him more options for defanging the CFPB’s payday lending rule. To be sure, the CFPB, as an independent agency, is more insulated from OMB oversight than many other federal agencies. The bureau’s rules are not subject to a review of costs and benefits by the Office of Information and Regulatory Affairs, which sits within OMB.  But there may be other ways for OMB to flex its muscle. In a recent Wall Street Journal op-ed article, two Washington lawyers floated the argument that an obscure 1980 law called the Paperwork Reduction Act could be used to stop the payday loan rule. The basic theory is that the OMB can disapprove CFPB actions that impose unnecessary or excessive paperwork burdens. Another strategy that Mulvaney could pursue: Delaying implementation of the payday loan rule, which is currently scheduled to take effect in July 2019.

Consumer advocates file brief opposing CFPB’s Mulvaney - — A group of 10 consumer advocacy groups has filed an amicus brief on behalf of former Consumer Financial Protection Bureau Deputy Director Leandra English in her suit to claim interim control of the agency. The brief, filed Friday, argues that the court should take into consideration not only the legal underpinnings of English’s claim to the directorship of the CFPB, but also the effect on consumer protection that would result from leaving acting director and White House Ofice of Management and Budget director Mick Mulvaney in charge.  “Inattention by federal regulatory agencies, along with limitations on their authority, contributed significantly to the 2008 financial crisis,” said the brief, which was signed by Americans for Financial Reform, Public Citizen, U.S. Public Interest Research Group and the Center for Responsible Lending, among others. "Although plaintiff’s claim regards who can serve as acting director until the next Senate-confirmed director is seated, the Court … should also examine how Plaintiff English or Defendant Mulvaney would lead the CFPB.”  The brief went on to argue that Mulvaney’s approach to consumer protection is “an inherent conflict of interest with the agency’s statutory mission” and that his leadership, even temporarily, would “slow or halt execution of the CFPB’s core functions” and render the agency little more than a puppet of the White House. The brief claims that, in creating the CFPB, the 2010 Dodd-Frank Act consolidated various consumer protection authorities that had been dispersed throughout the U.S. financial regulatory system under one roof. That action was pursued because of the stark failure of any of the agencies individually or together to foresee and stop the abuses that led to the financial crisis. Dodd-Frank also took pains to ensure that the agency was independent, to the extent practicable, of political influence. “The Dodd-Frank Act expressly designated the agency as independent, gave the CFPB its own source of funding from the Federal Reserve, allowed the CFPB to make financial operating plans without OMB approval, and placed the agency under a single director appointed by the President and confirmed by the Senate for a five-year term, removable by the President only for ‘inefficiency, neglect of duty, or malfeasance in office,’ ” the brief said.

Democrats file new court brief opposing CFPB's Mulvaney -- Over 30 current and former Democratic lawmakers filed a new amicus brief Monday supporting Consumer Financial Protection Bureau Deputy Director Leandra English to be reinstated as acting director of the agency. The brief, which included Sens. Sherrod Brown and Elizabeth Warren as well as former lawmakers like Barney Frank and Chris Dodd, argues that Congress intended for the CFPB to be an independent agency, a status that they say was threatened when President Trump named Mick Mulvaney, the director of the Office of Management and Budget, to also be the acting director of the CFPB. Democrats had filed an earlier brief in support of English's temporary restraining order request to halt Mulvaney's appointment. A judge denied that order, validating Mulvaney as the current acting director, but a full ruling on the merits of English's case is still pending. Arguments in the case are scheduled to be heard Dec. 22.  English cites provisions in the Dodd-Frank Act as supporting her argument that the agency's deputy director is the de facto director in the absence of a Senate-confirmed leader. But the White House has claimed the Federal Vacancies Reform Act of 1998 gives Trump broad authority to name agency heads. "The President’s purported appointment of Mulvaney is unlawful, and Deputy Director English is the lawful acting director of the bureau," the amicus brief stated. "Dodd-Frank’s mandatory and unqualified successor provision displaces the FVRA as the means by which a vacancy in the position of bureau director may be filled temporarily."English was tapped on Nov. 24 to lead the agency by former CFPB Director Richard Cordray on his last day before resigning. On Nov. 29, she sued both Trump and Mulvaney, seeking a preliminary injunction to be reinstated as the CFPB's acting director.  The Democrats' latest amicus brief stated that allowing Mulvaney to be acting director "would plainly undermine the independence that was so critical to Congress’s plan in designing the bureau."

Mulvaney unfit to lead CFPB: Schneiderman, 16 state AGs - Past statements by Office of Management and Budget Director Mick Mulvaney about the Consumer Financial Protection Bureau should disqualify him from leading the agency, according to New York Attorney General Eric T. Schneiderman and 16 other state attorneys general.In a letter to President Trump dated Tuesday, the AGs said that many of Mulvaney's comments were unfair.  "We are very concerned by the widely reported statements that your choice for acting director of the agency, Mick Mulvaney, has made about the role of the agency, calling it 'a joke…in a sick, sad kind of way,' and 'an awful example of a bureaucracy that has gone wrong,' " the letter stated. "Such statements about an agency that has helped millions of American consumers and achieved fundamental reform in a number of critically important areas of American commerce are categorically false, and should disqualify Mr. Mulvaney from leading the agency, even on an acting basis."The letter is the latest attempt by Democrats to undermine Mulvaney, who reports directly to Trump as head of OMB but was tapped to also lead the independent agency despite his repeated criticisms of it.If Mulvaney tries to stop the CFPB's staff from pursuing fraud and abuse, Schneiderman said state attorneys general will step up to the plate. "If incoming CFPB leadership prevents the agency's professional staff from aggressively pursuing consumer abuse and financial misconduct, we will redouble our efforts at the state level to root out such misconduct and hold those responsible to account," the letter stated.  Though Mulvaney has been the CFPB's acting director for just two weeks, he has already announced plans to start hiring political staffers to be paired with career CFPB officials heading various divisions. The move has drawn outrage from Democrats who continue to say the agency should be independent.

Mortgage lenders ask CFPB's Mulvaney to delay HMDA rule - ndependent mortgage bankers have asked Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, to delay implementation of the Home Mortgage Disclosure Act rule that is slated to go into effect on Jan. 1. With just three weeks to go before the expanded requirements go into effect, the likelihood of a change or delay remains slim, industry experts said. But the Community Home Lenders Association sent a letter to Mulvaney on Wednesday requesting a delay and a formal safe harbor from the rule for lenders that show good-faith compliance with HMDA. The trade group said it wants assurances that failing to comply with the new requirements will not result in big fines or enforcement actions.

PACE lenders downplay FHA's reversal on lien priority - When the Department of Housing and Urban Development endorsed Property Assessed Clean Energy last year, the move was seen as a largely symbolic; relatively few borrowers who apply for mortgages insured by the Federal Housing Administration qualify for this kind of financing.Moreover, many mortgage lenders oppose PACE, which creates a lien on a property senior to that of a first mortgage, and were loathe to take advantage policy.So there were few rumblings among PACE providers last week when HUD reversed the short-lived guidance. Market-leading issuer Renovate America issued a statement noting “the impact of this policy change is to remove a transferability option for buyers, sellers, and those refinancing that has been used by just under 3,000 homeowners with Renovate America PACE assessments, or less than 2.7% of our pool.”

 FHA borrowers pay a steep price to keep reverse mortgage program afloat - The fundamental conclusion of the Fiscal Year 2017 Actuarial Review is that the financial problems of the FHA Home Equity Conversion Mortgage program keep getting worse. Exacerbating this problem is its impact on millions of homeowners in FHA's flagship single-family program who are still paying very high insurance premiums for the life of their FHA loans to subsidize the operations of the reverse mortgage program.HUD had it right in its August statement announcing needed changes to the HECM program. At that time, HUD said "younger, lower-income homeowners are routinely bailing out the HECM program through the mortgage insurance premiums that they pay."A recent National Mortgage News article highlighted the current problems of the reverse program and their adverse impact on the FHA's long-standing single-family program. Removing reverse mortgages from the Mutual Mortgage Insurance Fund is the obvious and fairest solution to this problem. HUD Secretary Ben Carson called it a "worthy pursuit" in response to a question at his recent congressional testimony. The reverse mortgage program could be moved to its own fund or returned to the General Insurance Fund, a fund that HUD has said is designed to "address specialized financing needs."  It is not like the reverse mortgage program has been a part of the fund for a long time. Talk about bad timing, it was only added to the fund at the height of the housing crisis in 2008. Almost immediately, the reverse mortgage program was a burden for the fund and the millions of FHA homeowners.

FHA condo loans slipped under Obama. Trump’s HUD eyes a comeback — The mortgage and real estate industries are hopeful that the Federal Housing Administration is moving more aggressively to revive its condominium loan program.The program’s scope was reduced during the Obama administration after the FHA had imposed restrictions on condo loan approvals due to crisis-era losses. In the fall of 2016, the agency attempted to bring back some growth, reducing the owner-occupancy requirement in condo developments from 50% to 35%.Those efforts were seen as insufficient. For example, while the National Association of Realtors welcomed the lower owner-occupancy requirements, the group raised concerns over financial stability requirements the FHA had set as a condition. But the Department of Housing and Urban Development under President Trump is seen as more open to spurring FHA-backed condo loan growth. A recent HUD report signaled coming regulatory guidance that would ease requirements for condo buildings approved for FHA backing. The Trump administration has also shown willingness to reinstate a program to insure single-unit loan approvals in developments that are not otherwise approved for FHA financing. "With the homeownership rate still at a 50-year low, we need to have affordably priced homes available for ownership and condominiums certainly provide that," said Lawrence Yun, NAR’s chief economist. The impact of Obama-era restrictions on the FHA condo loan approvals has been undeniable. According to NAR, 614,000 condo sales were completed in calendar year 2016 and FHA provided financing for just 4% of those sales. Near the end of the Obama administration, the FHA decided it was time to loosen restrictions.  But to be eligible, a condominium association would have to meet certain standards, such as higher reserves, a low percentage of association dues in arrears and evidence of long-term financial stability.  But HUD under Secretary Ben Carson, President Trump’s appointee, has seemed less cautious about finding ways to jumpstart the program. In June, Carson said he supports the goal of allowing "more people, including millennials, to use FHA to buy a condo."

Housing finance needs fixing, but it doesn’t need Fannie or Freddie --Douglas Holtz-Eakin --The financial crisis that spurred the Great Recession hit nearly a decade ago. But to date, nothing has been done to meaningfully reform some of the main drivers of the crisis. That may change next year, as key members in both the House and Senate begin to discuss what to do with government-sponsored enterprises Fannie Mae and Freddie Mac. GSE reform proposals run the gamut from comprehensive reform of the entire housing finance system to restoring the original status of the GSEs. With this backdrop, what are the sensible options for the future of the GSEs? The status quo is not an option. Since entering conservatorship in 2008, Fannie and Freddie have become de facto agencies of the federal government used to implement policies for mortgage relief and other objectives. (Indeed, the Congressional Budget Office has consolidated the financial activities of the GSEs into the federal budget.) Through this process, however, they have retained an enormous share of the housing finance market. Along with the Federal Housing Administration, the federal government now backs the origination of around 70 percent of all new mortgages. This state of affairs is a ticking time bomb for the U.S. taxpayer. Fannie and Freddie are the epitome of systemically important financial institutions, and they should be regarded as such. When the next disaster befalls the GSEs, the taxpayers will be on the hook to cover their losses — again. This is an imprudent strategy that should be replaced by greater deployment of private capital in housing finance.

Preserving the GSEs is key to preserving affordability -- John Taylor - For decades, two government-sponsored entities, Fannie Mae and Freddie Mac, helped working class Americans get mortgages. Under affordable housing goals mandated by Congress in 1992, Fannie and Freddie were required to purchase prudent home loans made to low- and moderate-income borrowers.That essential and powerful role in the national economy is fading. Nearly nine years after the U.S. government seized both of them at the height of the Great Recession, Fannie and Freddie remain under the control of the federal government. The good news is they’re profitable again. The bad news is they no longer play a significant role helping the working class obtain affordable home loans. GSE profits that should be used to increase lending for affordable housing are instead going into the U.S. Treasury to pay for other programs. Today, many lower income borrowers aren’t able to get loans in the first place. Mortgage loans demand almost perfect credit scores and loads of money in the bank. Lending to low- and moderate-income borrowers declined 9 percent between 2010 and 2016, according to federal Home Mortgage Disclosure Act data.. Coupled with the Republican tax plans that would callously strip wealth from the working and middle class to give tax breaks to business owners and the rich (and expand the national debt by at least $1 trillion), the American Dream itself is under attack.Upward mobility has never been easy. But tax, banking and other federal policies used to encourage it. Now, we’re seeing the opposite — a web of schemes led by President Trump and the GOP to help the rich get richer while everyone else is left behind.

Fannie, Freddie stall foreclosure evictions for the holidays -- Fannie Mae and Freddie Mac will suspend the evictions of foreclosed single-family properties during the holiday season, according to the government-sponsored enterprises. The suspension of evictions will apply to single-family and two-to-four unit properties between Dec. 18 and Jan. 2 for both GSEs. Though legal and administrative proceedings may continue during this time period, families will be allowed to stay in the home. "We're taking steps to support families and to extend the timeline of help for struggling borrowers during the holidays," said Jacob Williamson, vice president of single-family distressed assets at Fannie Mae, in a press release. "We also encourage homeowners who may be struggling with their mortgage to reach out to Fannie Mae or their servicer to get help. Options are available to avoid foreclosure, and we want to help pursue those options whenever possible," he continued. In the third quarter, Fannie Mae acquired 29,417 properties through foreclosure by Sept. 30, according to the U.S. Securities and Exchange Commission. This figure is down considerably from 41,973 real estate owned properties from the same period last year. Freddie Mac acquired 9,146 REO properties from the beginning to the end of the third quarter, down from 12,185 in the third quarter of 2016. "As we have done in past years, we are suspending evictions over the holidays. For borrowers who may be experiencing financial challenges we strongly urge them to contact their mortgage servicer to explore one of the Freddie Mac workout options," said a press release. 

Drop in mortgage delinquencies shows no sign of bottoming out soon - The long-running slide in mortgage payments 60 or more days past due will continue next year, according to TransUnion's consumer lending forecast.Serious mortgage delinquencies are on track to fall to lows not seen since TransUnion started tracking the metric in 2005. The forecast calls for the serious delinquency rate to drop to 1.65% by year-end 2018 from the current 1.83%.There hasn't been enough of a sustained plateau in serious delinquencies to suggest they will bottom out yet, said Joe Mellman, a senior vice president at the company."It's hard to know what the natural floor is," he said. "We'll see a few quarters where there isn't much change and that will signal it."While there has by some measures been a slight uptick in early-stage delinquencies due to the impact of severe hurricanes and other natural disasters in certain parts of the country, forbearance servicers typically offer to affected borrowers will offset the concern, Mellman said.In addition to forbearance, TransUnion's forecast counts on strong employment, rising home prices and the relative scarcity of subprime underwriting in the mortgage market to outweigh stresses from natural disasters and increases in short-term interest rates when it comes to home loans.Because short-term rates, while higher, are still historically low, they will be "well-managed by most consumers," according to TransUnion. The forecast does call for a slight deterioration in performance in some other consumer credit sectors outside the mortgage market, where subprime underwriting is more prevalent, Mellman noted.Auto loan delinquencies of 60 days or more could be 3 basis points higher by the end of next year at a projected 1.46%. The serious delinquency rate for credit cards, which TransUnion defines as being 90 or more days late, will likely increase 10 basis points over the course of the coming year to 1.96%. While delinquencies on unsecured personal loans dropped between year-end 2016 and 2017 to 3.37% from 3.83%, they will remain largely static in 2018, possibly dropping a basis point to 3.36% by year-end.

Hurricanes cause rise in late mortgage payments for September -- The number of loans past due between 30 and 59 days increased to 2.4% in September from 2% in August and 2.1% in September 2016, according to CoreLogic's Loan Performance Insights Report. The share of mortgages that transitioned from current to 30 days past due was 1.3% in September, up from 0.9% one year prior. "September's early-stage delinquency transition rate rose to 2.6% in Texas and it rose to 3.2% in Florida, which is higher than the 1% that's typical for both states," said Frank Nothaft, CoreLogic's chief economist, in a press release. "Texas and Florida's early-stage delinquency transition rates in September are much lower than New Orleans in September 2005 when the transition rate reached 17.4% as a result of Hurricane Katrina." Mortgage Guaranty Insurance Corp. is the only mortgage insurer that puts out monthly data on changes to its inventory of delinquent loans. In November, it received 8,875 new delinquency notices from servicers, of which 4,525 were for loans in hurricane-impacted areas. For November 2016, only 623 new notices were for mortgages secured by properties in hurricane impacted areas. September's total delinquency rate was 5%, up from August's 4.6%, but down from 5.2% one year prior. Florida's total delinquency rate of 7.5% was up from 5.3% in August and 6.2% in September 2016. The delinquency rate in Texas jumped to 6.8% from 5.4% in August and 5.5% in September 2016. For the fourth consecutive month, the percentage of loans seriously delinquent, those that are 90 days or more late, remained at 1.9%. 

Scant oversight on building adds to hurricane costs (Reuters) When Hurricane Harvey sent two feet of water rolling into this small community about 35 miles north of Houston, Alfredo Becerra had to flee his modest 1,500-square-foot house.  He has been living in temporary housing since the storm struck in August. He said the Federal Emergency Management Agency gave him $15,000 in aid. One month later, across the Gulf of Mexico in Big Pine Key, Florida, moving company driver Byron Keeble lost about $10,000 worth of belongings, including a new sofa and his television, when Hurricane Irma sent a surge of seawater through his rented ground-floor apartment. Keeble said FEMA paid for him to stay in a hotel for a few weeks while he tried to figure out where he would go next. Floodwaters aren’t the only common thread in the two men’s stories. Also linking them is this: Neither should have been living in harm’s way. Becerra’s and Keeble’s homes were built or rented out in violation of National Flood Insurance Program rules. Like thousands of others in the hurricane-ravaged Florida Keys and on the Texas Gulf Coast, such houses are undermining efforts to limit flood damage, lower the cost of disaster assistance and reduce claims on the taxpayer-backed federal flood insurance program, a Reuters investigation found. Similar rule-busting construction has happened in scores of communities across the United States, where local, state and federal officials have failed to enforce regulations intended to restrict building in areas at high risk of flooding.Across the country, newer construction in flood-prone areas generated more than $9 billion in claims for structural damage on the cash-strapped flood insurance program between 2000 and 2015. Flood-management authorities say that some of those claims probably never would have been filed had proper building controls and accurate flood maps been in place.  Controlling construction inside flood-prone areas is critical to keeping flood insurance affordable and reducing post-disaster costs, federal officials say. The primary tool used to ensure communities are doing so effectively is a system of audits of how localities adhere to their own floodplain-management rules. But that system is crippled by a lack of funding and political will, Reuters found in a review of thousands of federal and state documents and dozens of interviews with flood-management authorities.

Investors propel post-Harvey housing rally -- It was like a scene from the pre-oil-bust housing boom: A steady stream of prospective buyers trekked through an open house last Saturday in a family neighborhood in northwest Houston. Their cars were parked up and down the block.The owners of the house, a three-bedroom traditional with brand-new everything, had five offers by the end of the day. They accepted the highest of the two that came in above asking price."It was a very good offer we could never have imagined," said Amber Ambrose, whose home just north of White Oak Bayou flooded during Hurricane Harvey and at least once before that.Whether they flooded or stayed dry, whether they've been fixed up or remain gutted, houses in Houston are selling at a solid clip.Single-family home sales across the Houston area were up 7.4% in November compared with the same month last year, according to the latest report from the Houston Association of Realtors. Buyers closed on 6,184 homes, in what was the third consecutive month of sales gains. Homes priced under $100,000 and those between $150,000 and $250,000 saw strong sales gains while demand for luxury homes declined compared with last year. Even though the house flooded in Harvey and during the Tax Day storm of 2016, the Ambrose's real estate agent pointed out the positives: It was move-in ready, at a desirable price point and on a huge lot in a wooded subdivision with good neighbors.Demand for homes priced less than $250,000 has been extremely high in recent years as home values have been on an upswing, leaving many would-be buyers priced out.The median price of the single-family homes that sold last month was flat from a year ago at $225,725, according to the association

Wildfires add to Southern California housing woes - The Southern California wildfires are causing additional inventory shortages in what is already a tight housing market, Redfin said.Ventura County's inventory was down 17.6% in November year-over-year, while prices grew 9.8% to a median of $600,000. In Santa Barbara County, inventory was down 23.3% and prices grew 6.8% to a median of $575,000.  “Our already low inventory levels are likely to take a beating in the coming months not only from the loss of homes but also the disruption of life and business in the area," said John Venti, a Redfin agent from that area in a press release. "A few prospective home sellers have texted me as they were being evacuated to cancel our listing consultation appointments. But these fires, devastating as they are, are temporary." October's wildfires affected the for-sale inventory in portions of Northern California in the following month. In the city of Santa Rosa, November's inventory fell 27.8% from October and 46.6% from November 2016.In Sonoma County, where Santa Rosa is the county seat, inventory fell 31.2% from the previous year. That caused prices to rise 15.2% to a median of $633,000. The typical home there sold at 101.6% of the asking price, the highest sale-to-list price ratio since 2013. Nationwide, prices grew 7.8% year-over-year in November, but sales were down 1.3%. Compared to a year ago, the inventory of homes for sale was down 12.8%. The typical home sold 46 days after listing, down four days from one year prior but 10 days longer than the all-time low of 36 days set in June.

MBA: Mortgage Applications Decrease in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 8, 2017.  ... The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 10 percent higher than the same week one year ago. ...  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.20 percent from 4.19 percent, with points decreasing to 0.39 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall well below 4%. The second graph shows the MBA mortgage purchase index. According to the MBA, purchase activity is up 10% year-over-year. Read Full Article Visit website

New home mortgage apps up over 12% annually - Mortgage applications for new home purchases increased by 12.2% in November from the same period a year ago, according to the Mortgage Bankers Association's Builder Applications Survey. On a month-over-month basis, new home mortgage applications declined by 6% from October. In November, new single-family home sales were running at a seasonally adjusted annualized rate of 663,000 units, up 6% from the October pace of 659,000 units."New home sales continued to recover in November from the impact of hurricanes, up just a bit on a seasonally adjusted basis over the month, and nearly 13% higher than a year ago, according to our projections from monthly application activity," said Lynn Fisher, MBA vice president of research and economics, in a press release."Looking ahead to 2018, filling open construction jobs will remain a main challenge for the homebuilding industry," she continued.There were approximately 47,000 new home sales in November, according to MBA estimates, marking an 11.3% monthly decline from the 53,000 new home sales in October.Based on product type, 71.4% of loan applications for new homes were conventional, while Federal Housing Administration loans comprised 15.2% of applications. U.S. Department of Veterans Affairs loans made up 12.3% of the applications, while Rural Housing Service/United States Department of Agriculture loans composed 1.1% of applications.

Hotel Occupancy Rate Increased Year-over-Year, On Pace for Record Year -- From HotelNewsNow.com: STR: US hotel results for week ending 2 December: The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 26 November through 2 December 2017, according to data from STR.
In comparison with the week of 27 November through 3 December 2016, the industry recorded the following:
• Occupancy: +1.3% to 56.6%
• Average daily rate (ADR): +0.2% to US$117.82
• Revenue per available room (RevPAR): +1.5% to US$66.71
Among the Top 25 Markets, Houston, Texas, reported the largest increase in RevPAR (+33.1% to US$74.18), due primarily to the highest rise in occupancy (+25.5% to 68.6%). Performance in the market continues to be boosted by post-Hurricane Harvey demand. Tampa/St. Petersburg, Florida, posted the highest lift in ADR (+7.9% to US$113.10).Orlando, Florida, experienced the second-highest increases in occupancy (+9.6% to 72.2%) and RevPAR (+15.7% to US$83.65). Note: The hurricanes continue to drive demand in Texas and Florida, especially in Houston. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Mortgage Equity Withdrawal slightly positive in Q3 - The following data is calculated from the Fed's Flow of Funds data (released yesterday) and the BEA supplement data on single family structure investment. This is an aggregate number, and is a combination of homeowners extracting equity - hence the name "MEW" - and normal principal payments and debt cancellation (modifications, short sales, and foreclosures). For Q3 2017, the Net Equity Extraction was a positive $33 billion, or a positive 0.9% of Disposable Personal Income (DPI) .   This graph shows the net equity extraction, or mortgage equity withdrawal (MEW), results, using the Flow of Funds (and BEA data) compared to the Kennedy-Greenspan method.  Note: This data is impacted by debt cancellation and foreclosures, but much less than a few years ago. MEW has been positive for 6 consecutive quarters, and 8 of the last 9 quarters.  With a slower rate of debt cancellation, MEW will likely be mostly positive going forward.  The Fed's Flow of Funds report showed that the amount of mortgage debt outstanding increased by $85 billion in Q3. The Flow of Funds report also showed that Mortgage debt has declined by $0.7 trillion since the peak. This decline is mostly because of debt cancellation per foreclosures and short sales, and some from modifications. There has also been some reduction in mortgage debt as homeowners paid down their mortgages so they could refinance.

Hotel Occupancy Rate Increased Year-over-Year, 2017 will be Record Occupancy Year --From HotelNewsNow.com: STR: US hotel results for week ending 9 DecemberThe U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 3-9 December 2017, according to data from STR.
In comparison with the week of 4-10 December 2016, the industry recorded the following:
• Occupancy: +2.7% to 60.7%
• Average daily rate (ADR): +4.0% to US$125.07
• Revenue per available room (RevPAR): +6.8% to US$75.97
Among the Top 25 Markets, Miami/Hialeah, Florida, reported the largest increase in RevPAR (+83.0% to US$234.96), due primarily to the largest lift in ADR (+57.4% to US$272.55). While hosting Art Basel, the market experienced the second-highest rise in occupancy (+16.3% to 86.2%).Houston, Texas, saw the largest increase in occupancy (+17.5% to 73.5%), which produced double-digit growth in RevPAR (+22.6% to US$81.63). Note: The hurricanes continue to drive demand in Texas and Florida, especially in Houston.The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.   The red line is for 2017, dash light blue is 2016, dashed orange is 2015 (best year on record), blue is the median, and black is for 2009 (the worst year since the Great Depression for hotels). Currently the occupancy rate, to date, is ahead of the record year in 2015.  The hurricanes will push the annual occupancy rate to a new record in 2017.

 How Fed Rate Hikes Impact US Debt Slaves - Outstanding “revolving credit” owed by consumers – such as bank-issued and private-label credit cards – jumped 6.1% year-over-year to $977 billion in the third quarter, according to the Fed’s Board of Governors. When the holiday shopping season is over, it will exceed $1 trillion. At the same time, the Fed has set out to make this type of debt a lot more expensive.The Fed’s four hikes of its target range for the federal funds rate in this cycle cost consumers with credit card balances an additional $6 billion in interest in 2017, according toWalletHub. The Fed’s widely expected quarter-percentage-point hike on December 13 will cost consumers with credit card balances an additional $1.5 billion in 2018. This would bring the incremental costs of five rates hikes so far to $7.5 billion next year.Short-term yields have shot up since the rate-hike cycle started. For example, the three-month US Treasury yield rose from near 0% in October 2015 to 1.33% today. Credit card rates move with short-term rates.Mortgage rates move in near-parallel with the 10-year Treasury yield, which, at 2.39%, has declined from about 2.6% a year ago. Hence, 30-year fixed-rate mortgages are still quoted with rates below 4%, and for now, homebuyers have been spared the impact of the rate hikes.Auto loans, in line with mid-range Treasury yields, have wavered a lot and moved up only a little. The average APR on a 48-month new-car loan rose only 40 basis points over the past two years to 4.4% in August 2017, according to WalletHub, citing the most recent data available. Note that the offers of “0% financing” are usually in lieu of rebates or other incentives and are therefore rarely free.The chart below shows the increase in the Fed’s target for the federal funds rate, from 0-0.25% to 1-1.25% (not including a hike on December 13), so an increase of 100-basis points.  Credit card rates have increased in lockstep by 101 basis points. But bank deposits rates have lagged woefully behind, on the logic that credit-card borrowers and savers, both, are going to get shafted:

Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back, With a Vengeance - Earlier this year, I met Therrien, 33, at a Panera Bread restaurant in central Providence. He had reluctantly agreed to be interviewed, on the condition that I not reveal his hometown or his wife’s name. Therrien had been caught up in a fraud known as phantom debt, where millions of Americans are hassled to pay back money they don’t owe. The concept is centuries old: Inmates of a New York debtors’ prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope. But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real. The problem is as simple as it is intractable. In 2012 a call center in India was busted for making 8 million calls in eight months to collect made-up bills. The Federal Trade Commission has since broken up at least 13 similar scams. In most cases, regulators weren’t able to identify the original perpetrators because the data files had been sold and repackaged so many times. Victims have essentially no recourse to do anything but take the abuse. Most victims, that is. When the scammers started to hound Therrien, he hounded them right back. Obsessed with payback, he spent hundreds of hours investigating the dirty side of debt.

Retail Sales increased 0.8% in November --On a monthly basis, retail sales increased 0.8 percent from October to November (seasonally adjusted), and sales were up 5.8 percent from November 2016.From the Census Bureau report:Advance estimates of U.S. retail and food services sales for November 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.7 billion, an increase of 0.8 percent from the previous month, and 5.8 percent above November 2016 ... The September 2017 to October 2017 percent change was revised from up 0.2 percent to up 0.5 percent. This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).Retail sales ex-gasoline were up 0.6% in November.The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.  Retail and Food service sales, ex-gasoline, increased by 5.0% on a YoY basis. The increase in November was well above expectations, and sales in September and October were revised up. A solid report.

November Retail Sales: Up 0.8% MoM, Better Than Forecast - The Census Bureau's Advance Retail Sales Report for November released this morning showed an increase over the October figures. Headline sales came in at 0.8% month-over-month to one decimal. Today's headline number was above the Investing.com consensus of 0.3%. Core sales (ex Autos) came in at 1.0% MoM. September and October figures were revised.  Here is the introduction from today's report:Advance estimates of U.S. retail and food services sales for November 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.7 billion, an increase of 0.8 percent (±0.5 percent) from the previous month, and 5.8 percent (±0.7 percent) above November 2016. Total sales for the September 2017 through November 2017 period were up 5.2 percent (±0.5 percent) from the same period a year ago. The September 2017 to October 2017 percent change was revised from up 0.2 percent (±0.5 percent)* to up 0.5 percent (±0.2 percent). Retail trade sales were up 0.8 percent (±0.5 percent) from October 2017, and were up 6.3 percent (±0.7 percent) from last year. Gasoline Stations were up 12.2 percent (±1.4 percent) from November 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 10.7 percent (±2.1 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

BLS: CPI increased 0.4% in November, Core CPI increased 0.1% --From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent. .. The index for all items less food and energy increased 0.1 percent in November. ... The all items index rose 2.2 percent for the 12 months ending November. The index for all items less food and energy rose 1.7 percent, a slight decline from the 1.8-percent increase for the period ending October.I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was at the consensus forecast of a 0.4% increase for CPI, and below the forecast of a 0.1% increase in core CPI.

Consumer Price Index: November Headline at 2.2%, Core Remains Below 2% - The Bureau of Labor Statistics released the November Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.20%, up from 2.04% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.71%, down from the previous month's 1.77%. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent.The energy index rose 3.9 percent and accounted for about three-fourths of the all items increase. The gasoline index increased 7.3 percent, and the other energy component indexes also rose. The food index was unchanged in November, with the index for food at home declining slightly.The index for all items less food and energy increased 0.1 percent in November. The shelter index continued to rise, and the indexes for motor vehicle insurance, used cars and trucks, and new vehicles also increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in November.The all items index rose 2.2 percent for the 12 months ending November. The index for all items less food and energy rose 1.7 percent, a slight decline from the 1.8-percent increase for the period ending October. The energy index rose 9.4 percent over the last 12 months, and the food index rose 1.4 percent. [More…]Investing.com was looking for a 0.4% increase MoM in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 2.2% for Headline and 1.8% for Core.The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

Core Consumer Price Growth Comes In Cold - Near 3 Year Lows -- Following producer prices' surge in October, consumer prices rose 2.2% YoY (as expected). October producer price pushed to its highest since Dec 2011 but consumer prices are not being pushed higher for now...The energy index rose 3.9 percent and accounted for about three-fourths of the all items increase; indexes for motor vehicle insurance, used cars and trucks, and new vehicles also increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in November However, core consumer price growth disappointed, dipping to just 1.7% YoY - near the lowest in 3 years. The shelter index continued to rise,but the silver lining is that growth is slowing... And ahead of Christmas - The apparel index fell in November; its 1.3-percent decline was its largest decrease since September 1998.

November Producer Price Index: Final Demand Up 0.4% MoM - Today's release of the November Producer Price Index (PPI) for Final Demand came in at 0.4% month-over-month seasonally adjusted, unchanged from last month's 0.4%. It is at 3.1% year-over-year, up from 2.8% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.3% MoM, down from the previous month and is up 2.4% YoY NSA. Investing.com MoM consensus forecasts were for 0.4% headline and 0.2% core.  Here is the summary of the news release on Final Demand:The Producer Price Index for final demand increased 0.4 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices also moved up 0.4 percent in both October and September. (See table A.) On an unadjusted basis, the final demand index rose 3.1 percent for the 12 months ended in November, the largest advance since a 3.1-percent increase for the 12 months ended January 2012.In November, three-fourths of the rise in the final demand index is attributable to a 1.0-percent increase in prices for final demand goods. The index for final demand services climbed 0.2 percent.The index for final demand less foods, energy, and trade services rose 0.4 percent in November, the largest advance since increasing 0.6 percent in April. For the 12 months ended in November, prices for final demand less foods, energy, and trade services moved up 2.4 percent. More…   As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

US Producer Prices Rise At Fastest Pace In 6 Years As Payday Loan Demand Soars -- US Producer Prices beat across the board this morning with the biggest headline being a 3.1% YoY surge in Final Demand - the biggest jump since Dec 2011. The index for final demand goods jumped 1.0 percent in November, the largest advance since a 1.0-percent increase in January. Over three-fourths of the broad-based November rise can be traced to prices for final demand energy, which climbed 4.6 percent. Over two-thirds of the November increase in the index for final demand goods is attributable to prices for gasoline, which jumped 15.8 percent. The indexes for light motor trucks, pharmaceutical preparations, beef and veal, residential electric power, and jet fuel also moved higher. In contrast, prices for processed young chickens fell 5.7 percent. The indexes for ethanol and commercial electric power also declined. About half of the November rise in the index for final demand services can be traced to prices for loan services (partial), which increased 3.1 percent. The indexes for traveler accommodation services; health, beauty, and optical goods retailing; food and alcohol retailing; chemicals and allied products wholesaling; and apparel, footwear, and accessories retailing also moved higher. In contrast, margins for machinery and equipment wholesaling declined 1.9 percent. The indexes for fuels and lubricants retailing and for bundled wired telecommunication access services also fell.  While surging energy costs played their part, we note a huge jump in prices for loan services, which makes for an uncomfortably vicious circle of rising cost of living covered by increasing demand for payday loans, leading to an increased cost of living, and so on...

US Import Prices Increased 0.7% in November -- Import prices increased 0.7% in November from a month earlier, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal expected a 0.7% increase in import prices. Unlike most measures of inflation, import prices aren't adjusted for seasonality. Import prices rose 3.1% from a year earlier. That's faster than broader consumer inflation. The consumer-price index advanced 2.2% from a year earlier in November, the Labor Department said Wednesday. Thursday's report showed import prices excluding petroleum were up 0.1% in November from October. Imported petroleum prices increased 7.2% last month. Prices for U.S. exports were up 0.5% in November from a month earlier. From a year earlier, export prices were up 3.1%. The Labor Department report on import and export prices can be accessed at: http://www.bls.gov/news.release/ximpim.toc.htm  

 LA area Port Traffic Surges in November -- Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. From the Port of Long Beach: Port Surges Past 2016 Cargo Volume  With just under one month left in 2017, the Port of Long Beach has already exceeded the cargo total for all of last year, and will handle more than 7 million containers for only the fourth time in its 106-year history....  “U.S. consumers are confident and the economy has been strong,” said Long Beach Harbor Commission President Lou Anne Bynum. “Retailers have been stocking goods as a result and we are nearing cargo levels we have not seen since before the 2008 recession.” From the Port of Los Angeles: Port of Los Angeles Sets New Record for Highest Monthly Container Volumes The Port of Los Angeles moved 924,225 Twenty-Foot Equivalent Units (TEUs) in November, the most containerized monthly cargo the Port has processed during its 110-year history. The previous record of 877,564 TEUs was set in November 2016. Eleven months through 2017, volumes are up 6.3 percent compared to last year’s record-breaking 8.8 million TEUs. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).  To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Industrial Production Increased 0.2% in November -- From the Fed: Industrial production and Capacity Utilization Industrial production moved up 0.2 percent in November after posting an upwardly revised increase of 1.2 percent in October. Manufacturing production also rose 0.2 percent in November, its third consecutive monthly gain. The output of utilities dropped 1.9 percent. The index for mining increased 2.0 percent, as oil and gas extraction returned to normal levels after being held down in October by Hurricane Nate. Excluding the post-hurricane rebound in oil and gas extraction, total industrial production would have been unchanged in November. Total industrial production was 106.4 percent of its 2012 average in November and was 3.4 percent above its year-earlier level. Capacity utilization for the industrial sector was 77.1 percent in November, a rate that is 2.8 percentage points below its long-run (1972–2016) average.  This graph shows Capacity Utilization. This series is up 10.4 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 77.1% is 2.8% below the average from 1972 to 2015 and below the pre-recession level of 80.8% in December 2007. The second graph shows industrial production since 1967. Industrial production increased in November to 106.4. This is 22.2% above the recession low, and 1% above the pre-recession peak.

The Big Four Economic Indicators: Industrial Production Up 0.2% in November -- Today's report on Industrial Production for November shows a 0.2% increase month-over-month, which was worse than the Investing.com consensus of 0.3%. Industrial Production peaked in November 2014, only one point higher than its pre-recession peak in November 2007. The year-over-year change is 3.35 percent, up from last month's YoY increase. Here is the overview from the Federal Reserve:Industrial production moved up 0.2 percent in November after posting an upwardly revised increase of 1.2 percent in October. Manufacturing production also rose 0.2 percent in November, its third consecutive monthly gain. The output of utilities dropped 1.9 percent. The index for mining increased 2.0 percent, as oil and gas extraction returned to normal levels after being held down in October by Hurricane Nate. Excluding the post-hurricane rebound in oil and gas extraction, total industrial production would have been unchanged in November. Total industrial production was 106.4 percent of its 2012 average in November and was 3.4 percent above its year-earlier level. Capacity utilization for the industrial sector was 77.1 percent in November, a rate that is 2.8 percentage points below its long-run (1972–2016) average. [view full report]The chart below shows the year-over-year percent change in Industrial Production since the series inception in 1919, the current level is lower than at the onset of 10 of the 17 recessions over this time frame of nearly a century. The Fed's monthly Industrial Production estimate is accompanied by another closely watched indicator, Capacity Utilization, which is the percentage of US total production capacity being used (available resources includes manufacturing, mining, and electric and gas utilities). In addition to showing cycles of economic growth and demand, Capacity Utilization also serves as a leading indicator of inflation. Here is a chart of the complete Capacity Utilization series, which the Fed began tracking in 1967. The linear regression assists our understanding of the long-term trend. We've highlighted the post-recession peak in November 2014.

NY Fed: Manufacturing Activity grew at a "solid clip" in December -- From the NY Fed: Empire State Manufacturing SurveyBusiness activity continued to grow at a solid clip in New York State, according to firms responding to the December 2017 Empire State Manufacturing Survey. The headline general business conditions index, at 18.0, remained close to last month’s level. The new orders index and the shipments index both showed sustained strong gains, with the former holding steady at 19.5 and the latter edging up to 22.4. .. Labor market indicators pointed to a small increase in employment but no change in hours worked. ...The index for future business conditions fell three points to 46.6. After advancing to its highest level in several years last month, the index for future new orders declined thirteen points to 41.1. The index for future number of employees rose eight points to 29.0, its highest level in nearly a year, and the capital expenditures index climbed nine points to 34.1, a multiyear high. This was at the consensus forecast of a reading of 18.0.

US business inventories fall in October as sales rise (Reuters) - U.S. business inventories fell in October amid strong sales growth, suggesting that inventory investment will probably not provide a large boost to economic growth in the fourth quarter.  The Commerce Department said on Thursday that business inventories slipped 0.1 percent after being unchanged in September. Inventories are a key component of gross domestic product. Retail inventories excluding autos, which go into the calculation of GDP, increased 0.4 percent as reported last month. They dipped 0.1 percent in September. Business sales rose 0.6 percent in October after jumping 1.6 percent in September. At October’s sales pace, it would take 1.35 months for businesses to clear shelves, down from 1.36 months in September. 

NFIB: Small Business Optimism Index "Near All-Time High" in November -- From the National Federation of Independent Business (NFIB): Small Business Optimism Hits Near All-Time High: The Index of Small Business Optimism gained 3.7 points to 107.5 in November, the second highest reading in the 44-year history of the NFIB surveys (108.0 in July 1983). Eight of the 10 Index components posted a gain and two declined, as Job Openings fell from its record high level and Capital Spending Plans declined 1 point.  After several solid quarters, job creation slowed in the small business sector as business owners reported a seasonally adjusted average employment change per firm of 0.0 workers.

US Services Economy Slumps To 15-Month Low, Manufacturing Rebounds --Despite a resurgence in positve surprises in hard macro data, PMIs (and soft survey data) has been fading in recent months and Markit's preliminary December showed a notable divergence in the US economy as Manufacturing rebounded to 2017 highs and Servces slumped to 15-month lows. Higher prices for raw materials resulted in the strongest rate of input cost inflation since December 2012. There were signs that manufacturers had absorbed part of the rise in average cost burdens, as highlighted by a slower increase in factory gate charges in December. Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“The flash PMI surveys brought a mixed bag of news. While manufacturing is ending 2017 with the wind it its sails, the service sector is struggling in the doldrums by comparison.“In manufacturing, faster output and order book growth encouraged firms to add factory workers at the fastest rate for over three years, painting a bright picture of the goods-producing sector expanding capacity in response to resurgent demand.“In contrast, service sector activity grew at its weakest rate for over a year, takingjob creation to its lowest since May.“Similar divergences were seen in relation to future growth, with business expectations picking up in manufacturing to a near-two-year high but waning markedly in services to the lowest for one and a half years.“With services representing a far greater portion of the economy than manufacturing, the overall picture is therefore one of the manufacturing sector’s exuberance being overshadowed by the gloomier service sector. Most worrisome for the 3%-growth crowd is the tumble in the Compoisite PMI to 9-month lows - signaling notably below trend growth...

FedEx, UPS Want to Steer Santa’s Packages to the Local Drugstore - United Parcel Service Inc. and FedEx Corp. are emphasizing new strategies to ease the burden of rising e-commerce deliveries as the National Retail Federation predicts online sales will rise as much as 15 percent this holiday season. One big move: the couriers are expanding neighborhood locations where customers can pick up parcels or drop off returns in lieu of the usual front-porch option.  While revenue is rising as UPS and FedEx deliver more packages by truck than ever, profit margins on those sales are shrinking, said Lee Klaskow, a Bloomberg Intelligence analyst. Neighborhood centers are just one part of the effort to get control of the problem as shippers explore options ranging from drone deliveries to surcharges.  The calculation is an easy one for shipping companies, which save time and money by allowing drivers to drop off several packages at one spot. Drivers often have to navigate suburban labyrinths to deliver a single box, increasing transport costs and eating away minutes in strained schedules that become especially strenuous during the peak shopping season. Consumers may be a harder sell. FedEx and UPS are both pitching the sites, which include drugstores and supermarkets, as a customer convenience that provides more flexibility and security.  “Packages stacked on front porches is a concern,” Randy Scarborough, FedEx vice president of retail marketing, said in an interview. “More consumers want other options to have packages delivered instead of home. If work is not a good alternative, then some place near home might be a better option.”

Weekly Initial Unemployment Claims decrease to 225,000 --The DOL reported: In the week ending December 9, the advance figure for seasonally adjusted initial claims was 225,000, a decrease of 11,000 from the previous week's unrevised level of 236,000. The 4-week moving average was 234,750, a decrease of 6,750 from the previous week's unrevised average of 241,500. Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.  The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.

BLS: Job Openings "Little changed" in October -- From the BLS: Job Openings and Labor Turnover SummaryThe number of job openings was little changed at 6.0 million on the last business day of October, the U.S. Bureau of Labor Statistics reported today. Over the month, hires increased to 5.6 million and separations were little changed at 5.2 million. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.2 percent and 1.1 percent, respectively. ... The number of quits was unchanged at 3.2 million in October. The quits rate was 2.2 percent. The number of quits was little changed for total private, for government, and in all industries. In the regions, the number of quits increased in the South and decreased in the Midwest. The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.  Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. . Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.Jobs openings decreased in October to 5.996 million from 6.177 in September. The number of job openings (yellow) are up 7.3% year-over-year.Quits are up 3.3% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are mostly moving sideways at a high level, and quits are increasing year-over-year.  This is a solid report.

5.6 Million Americans Were Hired In October, Most In Over 16 Years -- After a burst of record high job openings which started in June and eased modestly in August, today's October JOLTS report  - Janet Yellen's favorite labor market indicator - showed a sharp drop in job openings across most categories now that hurricane distortions have cleared out of the system, with the total number dropping from 6.177MM to 5.996MM, well below the 6.135MM estimate, the biggest monthly drop and the lowest job openings number since May, resulting in an October job opening rate of 3.9% vs 4% in Sept. After nearly two years of being rangebound between 5.5 and 6 million, the latest drop in job openings despite the alleged improvement in the economy is another indication that an increasingly greater number of jobs may simply remain unfilled in a labor market where skill shortages and labor imbalances are becoming structural. The number of job openings was down for total private and was little changed for government. Job openings increased in accommodation and food services (+94,000), construction  (+48,000), and real estate and rental and leasing (+40,000). Job openings decreased in wholesale trade (-90,000), finance and insurance (-47,000), information (-32,000), and nondurable goods manufacturing (-26,000). The number of job openings was little changed in all four regions. Now if only employers could find potential employees that can pass their drug test...  One notable change in this report was that despite the sharp drop in job openings, the number of hires in October soared by 232K to 5.552MM in October, the highest since March 2001, and further reducing the hiring rate from 3.8% to 3.6%. At the industry level, the number of hires increased in other services (+55,000) and health care and social assistance (+45,000). Hires decreased for state and local government, excluding education (-32,000). The number of hires increased in the Northeast region.On an annual basis, the pace of hiring spiked in October, rising from 2.7% Y/Y in Sept., to 6.8% in October, the highest since February 2016. The other closely watched category, the level of quits - which indicates workers' confidence they can leverage their existing skills and find a better paying job - was unchanged in October, and was identical to the 3.18MM quits in September, suggesting little change to worker confidence about demand for their job skills. The number of quits was little changed for total private, for government, and in all industries. In the regions, the number of quits increased in the South and decreased in the Midwest.

October JOLTS report: a good post-hurricane rebound -- The August and September hurricanes continue to make their impacts felt in the economic data. Yesterday's JOLTS report for October, like the October and November jobs reports, shows a rebound from those impacts. The best way to look at the data is to average the last two months (and this will be true for the next JOLTS report as well, which will be best viewed by averaging all three months). Let's start as usual by updating the disconnect between the "soft data" of openings in this survey and the "hard data" of actual hires and discharges. As I have pointed out many times, openings can be just chumming the water for resumes, or even laying the groundwork to hire foreign workers. The disconnect betrays an unwillingness to pay new hires more, or to engage in on the job training. In October. openings continued to run about 10% higher than actual hires: Hires have been basically flat for the last 2 years -- specifically since December 2015 -- while openings have continued to increase, although they too have been flattish for the last 5 months (especially if we average the last two months): One of my mantras is that hiring leadis firing. To reeiterate, the major shortcoming of this report is that it has only covered one full business cycle. In that cycle, in acord with my mantra, hires peaked and troughed before separations: Further, in the previous cycle, hires stagnated, and shortly thereafter involuntary separations began to rise, even as quits continued to rise for a short period of time as well: [Note: above graphs show quarterly data to smooth out noise] Here are hires vs. separations on a monthly basis for the last several years (again, mentally aveerage the last two months). At this point both hires and separations are tracing a similar trend over the last 24 months: While quits remain at expansionary high levels, involuntary separations bottomed a year ago, and have risen on a quarterly basis ever since. Here's the monthly view of the last several years. The good news is that involuntary separations have fallen in the last several months, even if we average the last two. At the same time, they remain above the bottom they established a year ago: Finally, while the JOLTS data is not broken up by states, so it is impossible to know the precise impact of the hurricanes, because the data is broken down by Census Region, we can exclude the Southern Region and see what was going on in the rest of the country, which was not affected. This is pretty impressive. It shows that outside of the South, both openings and hires are at new highs, and involuntary separations have receded. The only sore spot is quits, which peaked over a year ago, although they have improved compared with earlier this year. The report yesterday was a good one, but on the other hand, it is very consistent with being late in the cycle.

The Ugly Picture of US Wage Growth - The chart above shows the Y/Y percentage change in the average hourly earnings of nonsupervisory employees. We can break this data down into two sections. Due to higher inflation and stronger unions, the pace of growth was far stronger before the 1980s. We see a different dynamic at work during the first three post-1982 expansions. Wages decline coming out of the recesssion, falling to ~2% Y/Y percentage growth rate. They then climb during the second half of the expansion, peaking ~4% Y/Y percentage growth rate. This probably explains why the Fed remains thoroughly convinced that the Phillip's Curve is still in play: they're assuing the past is prologue, and with good reason. However, this expansion we see a different growth dynamic at work. As before, the Y/Y percentage change dropped to 2% a little before the expansion was halfway over. But the pace of growth in the second half of the recovery is far weaker. Hence, we have weaker wage growth. Here's a graph of the average and median growth rate of wages for each of the expansions: The pace is clearly declining.

The economy’s biggest mystery — paychecks just aren’t growing - Despite a mostly solid run of job growth, 2017 ends pretty much where it began — with a two-speed economy where wage growth is funneling to one end while the other lags behind. Friday's nonfarm payrolls report brought with it news all too familiar to the post-crisis economy. The 228,000 jobs created formed a solid foundation, but the pedestrian 2.5 percent average hourly earnings growth left many scratching their heads wondering how a 4.1 percent unemployment rate, the lowest in 17 years, still wasn't producing fatter paychecks. "The lack of wage growth at the aggregate level despite the declines in the unemployment rate and strong job gains remains a mystery," Joseph Song, U.S. economist at Bank of America Merrill Lynch, said in a note to clients.  "One possible explanation is that structural factors such as unfavorable demographics and industry-specific dynamics are playing a bigger role than the cyclical factors," he added. "However, we continue to believe that a falling unemployment rate will ultimately underpin wages."The latter part of that statement represents the hopes and frustrations of economists everywhere from academia to Wall Street to the halls of the Federal Reserve in Washington, D.C.With another month of strong job gains and ho-hum wage growth under its belt, 2017 is now yielding toward predictions — again — that the year ahead will finally be the one where income catches up."Due to a lack of available workers and sustained improvement in aggregate demand we expect wage pressures to be the primary economic narrative during the year," said Joe Brusuelas, chief economist at RSM. "Our forecast implies that wage growth during final three months of next year should be at or near 4 percent." No less than Gary Cohn, director of the White House's National Economic Council, was banging the same drum Friday morning after the jobs report hit.

NLRB reverses Browning-Ferris, makes it harder for workers to bargain with their employers - Yesterday, the National Labor Relations Board (NLRB) made it more difficult for millions of workers to join together and form a union, by overturning its joint-employer standard established in 2015’s Browning-Ferris Industries case. It is hard in today’s economy to bargain for higher wages or better working conditions, especially if your direct employer doesn’t really make those decisions. Under President Obama, the NLRB tried to make it easier for employees by holding each employer responsible when they co-determine what a worker’s wages, hours, and working conditions will be. In yesterday’s decision, the Trump NLRB decided to make it harder than ever. The NLRB’s latest decision is bad law resulting from a bad process. Ordinarily, before overturning major precedent, the Board invites the public to comment by filing amicus briefs. However, this time, they did not, and instead announced this reversal with no warning or notice. President Trump’s appointees to the Board were so keen to respond to the demands of the franchising industry, which wants a rule that franchisors like McDonald’s aren’t responsible unless they exercise direct control over a franchisee’s labor relations, that they reversed the joint-employer standard in a case where the standard wasn’t even an issue, and where the public had no opportunity to weigh in.By weakening its joint-employer standard, the NLRB has made it nearly impossible for working people caught in contracted-out, staffing, or other alternative working arrangements to join together and negotiate for better pay and working conditions. If these workers wanted to negotiate over their work schedules, safety precautions on the job, or pay rates, the staffing agency could simply shrug their shoulders, telling the workers that it is the larger firm that owns and operates the business that determines all of those rules. But if the workers tried to negotiate with the larger firm (where they actually give their labor every day) the larger firm could avoid the bargaining table as well, by claiming that the staffing agency is the workers’ only employer.

Walmart Will Let Its 1.4 Million Workers Take Their Pay Before Payday - NYT - For decades, Walmart has taken heat for how it treats its work force, including paying low wages and creating unpredictable schedules. Now, the giant retailer is trying to ease some of its workers’ financial strain, allowing them to receive wages before their next payday. Instead of waiting two weeks between paychecks, Walmart workers can now use an app to access a portion of wages for hours they have already worked. But Walmart’s new service also highlights, albeit unwittingly, the financial struggles of the low-wage workers in the retail and service industries. Even as the economy strengthens, many workers in stores and restaurants are not earning enough to make ends meet. Walmart said the new initiative is intended to help workers avoid costly payday loans and other debt traps, and reduce the stress that comes with financial hardship. Workers who are less worried about cash issues “feel more confident and more settled at work,” Judith McKenna, Walmart’s chief operating officer, said in an interview. “We believe this is the right thing to do, and we are happy to champion it,” Ms. McKenna said. Labor groups say the best investment Walmart could make is not in a new app, but in increasing pay. “It sounds like this may be a useful service but it doesn’t tackle the fundamental problem Walmart workers suffer,” “Their paychecks are too small.” 

The Silicon Valley paradox: one in four people are at risk of hunger - Karla Peralta is surrounded by food. As a line cook in Facebook’s cafeteria, she spends her days preparing free meals for the tech firm’s staff. She’s worked in kitchens for most of her 30 years in the US, building a life in Silicon Valley as a single mother raising two daughters. But at home, food is a different story. The region’s soaring rents and high cost-of-living means that even with a full-time job, putting food on the table hasn’t been simple. Over the years she has struggled to afford groceries – at one point feeding her family of three with food stamps that amounted to $75 a week, about half what the government describes as a “thrifty” food budget. “I was thinking, when am I going to get through this?” she said. In a region famed for its foodie culture, where the well-heeled can dine on gold-flecked steaks, $500 tasting menus and $29 loaves of bread, hunger is alarmingly widespread, according to a new study shared exclusively with the Guardian. One in four people in Silicon Valley are at risk of hunger, researchers at the Second Harvest food bank have found. Using hundreds of community interviews and data modeling, a new study suggests that 26.8% of the population – almost 720,000 people – qualify as “food insecure” based on risk factors such as missing meals, relying on food banks or food stamps, borrowing money for food, or neglecting bills and rent in order to buy groceries. Nearly a quarter are families with children. “As the economy gets better we seem to be serving more people.” Since the recession, Second Harvest has seen demand spike by 46%. The bank is at the center of the Silicon Valley boom – both literally and figuratively. It sits just half a mile from Cisco’s headquarters and counts Facebook’s Sheryl Sandberg among its major donors. But the need it serves is exacerbated by this industry’s wealth; as high-paying tech firms move in, the cost of living rises for everyone else. Food insecurity often accompanies other poverty indicators, such as homelessness. San Jose, Silicon Valley’s largest city, had a homeless population of more than 4,000 people during a recent count. They are hungry, too: research conducted by the Health Trust, a local not-for-profit, found food resources available to them are scattered and inadequate.

Homeless Explosion on West Coast Pushing Cities to Brink - Housing prices are soaring here thanks to the tech industry, but the boom comes with a consequence: A surge in homelessness marked by 400 unauthorized tent camps in parks, under bridges, on freeway medians and along busy sidewalks. The liberal city is trying to figure out what to do.  "I've got economically zero unemployment in my city, and I've got thousands of homeless people that actually are working and just can't afford housing," said Seattle City Councilman Mike O'Brien. "There's nowhere for these folks to move to."That struggle is not Seattle's alone. A homeless crisis is rocking the entire West Coast, pushing abject poverty into the open like never before. Public health is at risk, several cities have declared states of emergency, and cities and counties are spending millions — in some cases billions — in a search for solutions. San Diego now scrubs its sidewalks with bleach to counter a deadly hepatitis A outbreak. In Anaheim, 400 people sleep along a bike path in the shadow of Angel Stadium. Organizers in Portland lit incense at an outdoor food festival to cover up the stench of urine in a parking lot where vendors set up shop. Homelessness is not new on the West Coast. But interviews with local officials and those who serve the homeless in California, Oregon and Washington — coupled with an Associated Press review of preliminary homeless data — confirm it's getting worse. People who were once able to get by, even if they suffered a setback, are now pushed to the streets because housing has become so expensive. All it takes is a prolonged illness, a lost job, a broken limb, a family crisis. What was once a blip in fortunes now seems a life sentence. Among the findings:

  • Official counts taken earlier this year in California, Oregon and Washington show 168,000 homeless people in the three states, according to an AP tally of every jurisdiction in those states that reports homeless numbers to the U.S. Department of Housing and Urban Development. That is 19,000 more than were counted in 2015, although the numbers may not be directly comparable because of factors ranging from the weather to new counting methods.
  • During the same period, the number of unsheltered people in the three states climbed 18 percent to 105,000.
  • Rising rents are the main culprit. The median one-bedroom apartment in the San Francisco Bay Area is more expensive than it is in the New York City metro area, for instance.
  • Since 2015, at least 10 cities or municipal regions in California, Oregon and Washington have declared emergencies due to the rise of homelessness, a designation usually reserved for natural disasters.

Police Shoot a Lot More People Than Previously Known - In major metropolitan areas around the country over the last half-decade, police have shot—and shot at—people in numbers dramatically higher than previous tallies suggest. A new Vice News investigation finds that between 2010-2016, cops in the 50 largest police departments in the country shot more than 3,630 people, nearly double some previous estimates. Of the 4,381 people cops fired upon in that period—including the 700 people they shot at and missed—two-thirds survived those shootings. Absent a comprehensive federal database of police shootings, the Vice report offers the most complete picture of fatal and nonfatal police shootings available. The data analysis also found that police shot black people “more often and at higher rates than any other race,” and “two and a half times more often than white people.” Vice found that cops shot no fewer than 1,664 black people in the period studied, comprising “55 percent of the total and more than double the share of the black population in these communities.” Twenty percent of the African Americans tallied were shot following “relatively innocuous pedestrian or traffic stops,” which was true for just 16 percent of whites shot by police. Those figures are of particular importance considering that studies find black drivers are more likely to be stopped by cops based on less evidence, less likely than their white peers to be spoken to respectfully during those stops, and more likely to be ticketed and arrested than white drivers. 

One-Third of All Americans Killed by Strangers Are Killed by Police -- Americans are afraid of many threats to their lives – serial killers, crazed gunmen, gang bangers, and above all terrorists – but these threats are surprisingly unlikely. Approximately three-quarters of all homicide victims in America are killed by someone they know. And the real threat from strangers is quite different from what most fear: one-third of all Americans killed by strangers are killed by police. This is the story of the hidden numbers of police homicides in the United States. The killings of Michael Brown, Eric Garner and Walter Scott have increased the world’s attention to US police violence, yet most Americans underestimate the threat posed by the people charged with keeping them safe.

UN poverty official touring Alabama’s Black Belt: ‘I haven’t seen this’ in the First World - A United Nations official who tours the globe investigating extreme poverty said Thursday that areas of Alabama's Black Belt are suffering the most dire sewage disposal crisis of any place he has visited in a developed country. "I think it's very uncommon in the First World. This is not a sight that one normally sees. I'd have to say that I haven't seen this," Philip Alston, the UN's Special Rapporteur on extreme poverty and human rights, said as he toured a Butler County community where raw sewage flows from homes through exposed PVC pipes and into open trenches and pits. Alston was in Alabama on Thursday to bear personal witness to the poverty, lack of access to basic services and civil rights struggles that have plagued poor, mostly African-American residents of the state's Black Belt region for generations. Named for its rich soil and located in the southern half of the state, Alabama's Black Belt is part of a ribbon of counties that stretches across the South and has a long history of poverty and racial discrimination. The visit is part of a 15-day tour of the U.S. that Alston and his team are conducting to gather information for a report on poverty and human rights abuses in America that they expect to release in spring.

The Road to Hell is Paved with Screwed Over Black, Hispanic and Native American Kids (and They Deserve Better) --Its been my observation that a surprising amount of research education sucks, either focusing on irrelevant trivia or desperately avoiding logic and common sense at all costs. Every so often, though, you come across something well written and cogent. Here are the first two paragraphs of an article that comes closeRacial-, ethnic-, and language-minority schoolchildren in the United States have repeatedly been reported to be overidentified as disabled and so disproportionately overrepresented in special education. These findings have led to characterizations of special education as “discriminatory”, having “systemic bias”, constituting “a new legalized form of structural segregation and racism” and “another manifestation of institutionalized racism”. Federal legislation and policies have been enacted to reduce minority disproportionate representation (MDR) in special education,  For example, the U.S. Congress observed that “more minority children continue to be served in special education than would be expected from the percentage of minority students in the general school population”.  Local educational agencies (LEAs) are currently required to report to the U.S. Department of Education whether minority children are significantly overrepresented in special education. If overrepresentation is observed, the LEAs are required to allocate 15% of their Part B funds for early intervening services to children from minority groups being overidentified as disabled. The federal government is currently considering enacting further compliance monitoring policies.  Calls are also being made to strengthen existing monitoring policies, including requiring LEAs to report any disproportionality instead of reporting disproportionality resulting only from incorrectly applied procedures or policies. Long story short: minority kids are disproportionately represented in special education classes, and the Feds feel this is a problem. Incidentally…. elsewhere, from what I have seen, Asian-Americans generally aren’t viewed as being over-assigned to special ed classes.

US charter schools put growing numbers in racial isolation   (AP) — Charter schools are among the nation's most segregated, an Associated Press analysis finds — an outcome at odds, critics say, with their goal of offering a better alternative to failing traditional public schools. National enrollment data shows that charters are vastly over-represented among schools where minorities study in the most extreme racial isolation. As of school year 2014-2015, more than 1,000 of the nation's 6,747 charter schools had minority enrollment of at least 99 percent, and the number has been rising steadily. The problem: Those levels of segregation correspond with low achievement levels at schools of all kinds.In the AP analysis of student achievement in the 42 states that have enacted charter school laws, along with the District of Columbia, the performance of students in charter schools varies widely. But schools that enroll 99 percent minorities — both charters and traditional public schools — on average have fewer students reaching state standards for proficiency in reading and math."Desegregation works. Nothing else does," said Daniel Shulman, a Minnesota civil rights attorney. "There is no amount of money you can put into a segregated school that is going to make it equal." Shulman singled out charter schools for blame in a lawsuit that accuses the state of Minnesota of allowing racially segregated schools to proliferate, along with achievement gaps for minority students. Minority-owned charters have been allowed wrongly to recruit only minorities, he said, as others wrongly have focused on attracting whites.

It's Time To Rethink Education – Part 2 (Unschooling) --While some of you will be familiar with the educational concept of unschooling, it’ll probably be new to most of you. The book we’re currently reading is by a fascinating individual named Ben Hewitt, titled Home Grown. Back in 2014, Ben wrote an excellent article for Outside Magazine in which he provided a concise description of what unschooling is. It’s quite distinct from home-schooling, which most people are already familiar with.  In the piece, We Don’t Need No Education, he explains:There’s a name for the kind of education Fin and Rye are getting. It’s called unschooling, though Penny and I have never been fond of the term. But “self-directed, adult-facilitated life learning in the context of their own unique interests” doesn’t exactly roll off the tongue, so unschooling it is.It is already obvious that unschooling is radically different from institutionalized classroom learning, but how does it differ from more common homeschooling? Perhaps the best way to explain it is that all unschooling is homeschooling, but not all homeschooling is unschooling. While most homeschooled children follow a structured curriculum, unschoolers like Fin and Rye have almost total autonomy over their days. At ages that would likely see them in seventh and fourth grades, I generously estimate that my boys spend no more than two hours per month sitting and studying the subjects, such as science and math, that are universal to mainstream education. Not two hours per day or even per week. Two hours per month. Comparatively speaking, by now Fin would have spent approximately 5,600 hours in the classroom. Rye, nearly three years younger, would have clocked about half that time.If this sounds radical, it’s only because you’re not taking a long enough view, for the notion that children should spend the majority of their waking hours confined to a classroom enjoys scant historical precedent. Even to someone like me, an individual who finds the concept of authority and involuntary activity revolting, unschooling seemed a bit radical for our family when I first read about it. Nevertheless, as I’ve considered it in more over the past few months, it’s become more and more appealing. To get an even better sense of what it’s all about, let’s read some more excerpts from the Outside article referenced above:

 This is unprecedented’: Public colleges limiting journalist access - On an assignment in August, freelance journalist Jeff Bachner had no trouble driving onto Kingsborough Community College in Brooklyn. He parked his car and started taking photos. Soon after, a college security officer said he was trespassing and put him in handcuffs. The officer, Corporal Maurizio Gambino, took Bachner to a campus security office, Bachner said in a statement to the New York Press Photographers Association, or NYPPA. The officer then re-cuffed him to a railing over his head, and ignored his pleas to loosen the handcuffs, Bachner said in the statement, the contents of which were confirmed by NYPPA Vice President Todd Maisel. When Bachner began to gasp for breath and complain of numb fingers, officers called a medic. They eventually released Bachner without charge. Four days after the detention of Bachner, on August 16, campus security at Bronx Community College handcuffed freelance journalist J.B. Nicholas and issued him a summons for trespassing as he interviewed students about Confederate statues on campus. The charges were later dismissed. In October, I was escorted off the same campus, Bronx Community College, by campus police on consecutive days after trying to speak to students for a follow-up story about the statues. Both Kingsborough Community College and Bronx Community College belong to the City University of New York, whose 273,000 students make it the largest urban university system in the US. A CUNY statement said the university system allows each campus to create its own media access protocol—but protocols for Kingsborough Community College and Bronx Community College are not publicly available. Neither college responded to repeated requests for its protocol. The CUNY incidents are the latest, most severe examples of public universities denying journalists access to a campus or its students, a practice that got attention in 2015 when a professor at the University of Missouri told a photojournalist to stop taking pictures of a protest. 

Bonfire of the academies: Two professors on how leftist intolerance is killing higher education -  At colleges and universities all over the country, students are protesting in increasingly virulent and sometimes violent ways. They demand safe spaces and trigger warnings, shouting down those with whom they disagree. It has become rote for outsiders to claim that the inmates are running the asylum; that this is analogous to Mao’s Red Guard, Germany’s brown shirts, the French Revolution’s Jacobins; and, when those being attacked are politically “left” themselves, that the Left is eating its own. These stories seem to validate every fantasy the Right ever had about the Left. As two professors who recently resigned from positions at a college we loved, and who have always been on the progressive-left end of the political spectrum, we can say that, while none of those characterizations is exactly right, there is truth in each of them.  The Evergreen State College is a public liberal arts college in Olympia, Wash., at the southern tip of Puget Sound, surrounded by water and forests.  . It is an experimental college with a curricular structure that, for both better and worse, is like no other. Most students take full-time 16-credit programs, for up to a full academic year. This allows professors to know each student individually, and is particularly well-suited to students with high potential and unusual learning styles. We were among Evergreen’s most popular faculty, and year in, year out, our students wrote stellar evaluations of us. Our programs were always full, even in a time of falling enrollments. Yet, we work at Evergreen no more. What happened to this brilliant, flawed experiment? There are too many subplots to recount, but here is one thread that, we hope, others can use to spot insurgencies on their own campuses.

US graduate students in uproar over proposed tax hike -- Many US universities waive tuition for students who conduct research or teach. But a provision in a tax bill passed by the US House of Representatives in mid-November would add that tuition to students’ taxable income. The vote prompted demonstrations at more than 60 universities across the country on 29 November. And several graduate students were arrested on 5 December while protesting outside the Capitol Hill office of House Speaker Paul Ryan.Tax legislation passed by the US Senate on 2 December does not include the provision. But students, universities and advocacy groups are hoping to beat back the provision in the House bill as lawmakers work to reconcile the two and prepare to vote on the revised legislation. Institutions including Johns Hopkins University in Baltimore, Maryland, Tufts University in Medford, Massachusetts, the University of California system and Ohio State University in Columbus have sent letters to, or in some cases, met with members of Congress to keep tuition waivers tax-free. The Association of American Universities (AAU) in Washington DC, which represents 60 US universities, has also pushed back in meetings and letters. "This is not in America's national interest," according to a missive that AAU co-signed with 45 other higher-education associations.  Many worry about what will happen if the tuition tax survives. “I would have to get a second job,” says Frick, who spends up to 60 hours a week in the lab. “It would be impossible.” Her roughly US$30,000 annual stipend barely covers her living expenses and medical costs to treat a serious jaw condition.

Tentative Tax Deal Scraps Hit on Tuition for Graduate Students - A provision to treat graduate school tuition waivers as taxable income won’t be in the final House-Senate tax package, according to Republican Senator Steve Daines of Montana and one other person briefed on a tentative deal reached Wednesday. The measure, which was included in the House bill that passed last month, sparked an outcry among graduate students and universities who said it could hammer students financially. The Senate version of the tax bill passed on Dec. 2 didn’t include the graduate tuition waiver proposal. “Folks who are in grad school will feel pretty good about the final result,” said GOP Senator Mike Rounds of South Dakota. 

Student loans are ending for Brown University students -- Amid America’s colossal student debt problem, an Ivy League school is providing an example of how institutions can help. Beginning next school year, Brown University will eliminate all student loans in its undergraduate financial aid packages, replacing them with scholarships. Following a $30 million fundraising effort launched in September, Brown administrators announced this week that 2,087 donors contributed toward the goal, and that the school—located in Providence, Rhode Island—plans to raise $90 million more to sustain the scholarship giving. The initiative, part of a goal that Brown set in 2015 to raise $500 million for undergraduate financial aid overall, “amplifies our commitment to bringing the best and brightest students to Brown regardless of their socioeconomic background,” university president Christina Paxson said in a statement. The decision does more than just alleviate financial pressure on middle- and low-income students and their families. To stay competitive, top-tier US universities watch one another closely, and move by Brown sends a message to its peer institutions that it’s time to turn similar attention to financial aid—especially at a time when the cost of a college degree is soaring up to the $250,000 mark. Fellow Ivy League schools Yale and Princeton both have no-loans policies in place, but many other top universities have income cutoffs in their financial aid packages, meaning that poorer families get better deals than those with mid-range incomes.

Debt relief for defrauded students halted under Trump, says report - BBC News: The US Education Department has stopped cancelling student debts for people defrauded by failed for-profit schools, according to its Inspector General. A new report by the independent auditor says affected borrowers face mounting interest and other financial burdens. Before leaving office, President Barack Obama passed new laws speeding up debt cancellations for defrauded students. But under President Donald Trump and his Education Secretary, Betsy DeVos, cancellations have ground to a halt. Ms DeVos has delayed the implementation of Mr Obama's reforms, saying they would create costs for taxpayers. According to the Inspector General's report, the Education Department under Ms DeVos has received 25,991 debt cancellation claims, denying two and approving none. During Mr Obama's final months in office, from 1 July 2016 to Mr Trump's inauguration in January 2017, the Education Department received 46,274 claims, approving 27,986 and denying none. In 2015, a huge for-profit school network, Corinthian Colleges, collapsed after investigations into fraud and malpractice in the company led the government to cut off federal funds. Nearly 80,000 students were left facing debts to the Education Department, despite the department having authority to cancel debts when schools have violated students' rights or broken the law. Senator Patty Murray, the senior Democrat on the Education Committee, said: "Hundreds of thousands of students were defrauded and cheated by predatory colleges that broke the law, but today's report confirms Secretary DeVos tried to shirk her responsibility to these students and shut down the borrower-defense program, leaving them with nowhere to turn."

Healey sues Betsy DeVos, again -- Massachusetts Attorney General Maura Healey has filed a lawsuit against the US Department of Education, contending that the agency has violated federal law with its delays in providing student loan relief to tens of thousands of consumers who attended fraudulent for-profit schools. This marks Healey’s third lawsuit against the education department under the Trump administration and Secretary Betsy DeVos. The two previous lawsuits also involve for-profit schools and debt relief. Healey has taken a combative approach to Trump administration policies and filed numerous lawsuits to block federal actions on education, health care, and immigration. In Thursday’s legal filing, Healey argued that since Trump took office in January, the agency has failed to process 95,000 claims for debt relief that have been filed by students who took out federal loans to attend questionable colleges. Maura Healey said the FCC decision means “Americans will pay more for the Internet and will have fewer options.” The education department has also rejected debt relief applications that were filed previously by Healey on behalf of 7,000 Massachusetts students who attended institutions that were owned by the now-defunct Corinthian Colleges chain. The lawsuit also claims that students who attended Corinthian schools, but haven’t specifically filed a debt relief claim, continue to have their wages garnished and their tax returns seized to pay off their student loans. The education department has allowed debt collectors to continue going after these loans, even though it is aware that these students qualify for relief, according to Healey’s lawsuit. 

Student Loan Defaults Approach 5 Million….Using a Very Permissive Definition of “Default” --  Yves Smith -  The Wall Street Journal did a useful bit of sleuthing. In a new story, Nearly 5 Million Americans in Default on Student Loans, the Journal described how student borrowers are failing to pay despite the economy supposedly being in good shape. However, anyone who has been paying attention knows that 94% of the jobs created in the Obama Administration were part-time, and there’s no reason to think the quality of jobs has increased under Trump.  Key section of the article:The number of Americans severely behind on payments on federal student loans reached roughly 4.6 million in the third quarter, a doubling from four years ago, despite a historically long stretch of U.S. job creation and steady economic growth.In the third quarter alone, the count of such defaulted borrowers—defined by the government as those who haven’t made a payment in at least a year—grew by nearly 274,000, according to Education Department data released Tuesday.   The total number of defaulted borrowers represents about 22% of the Americans who were required to be paying down their federal student loans as of Sept. 30. That figure has increased from 17% four years earlier.  Now let us put aside that the “steady economic growth” is the new normal, where the benefits of economic growth are going at unprecedented levels to capital, reflected as the share of GDP represented by profits, as opposed to wages. But what should also capture your attention is the definition of default: not having made a payment in a year or more. That is mind-bogglingly lax. Technically, a loan is in default any time a payment is missed. Some agreements allow for a grace period; others happily charge late fees. However, with notable exceptions like mortgage servicers who profit from foreclosures, lenders and their agents want borrowers to get current.  At least as of a few years ago, and I assume this is still true, for credit cards, being sixty days plus late on payments is treated as delinquent and will be reported to credit agencies; 90 days late will be classified as non-performing.

Guess Which Schools and Degrees Produce the Most Student Loan Defaults? Hint: It’s Not the Humanities --  Nine of the ten are beauty schools. Of the nine the Rob Roy Academy, appears twice, representing two different schools. Rob Roy is also in fifteenth place taking a full one-third of the top slots for the fifteen highest school default rates. The one school not in the top-ten that is not a beauty school is a tribal school, probably struggling with first-generation students. Twenty-four of the top thirty with the highest default rates are cosmetology schools. It’s not a lack of name-brand cosmetology schools: Paul Mitchell Cosmetology School has strong reviews but one of their many schools sports the twenty-fifth highest default rate, 34.3 percent, of the 4,712 schools in the dataset. There are 64 different schools that reference the Paul Mitchell name. Since some reference being a “partner” it’s probably fair to say they’ve licensed the name, franchise style. It’s unclear why a school would need to license a name. Rival Aveda has only seven of their 31 schools in the top 1,000, the highest a number at 212 (Corpus Christi, with a 25.3% default rate). If you’re dead-set on beauty school choose Aveda, especially their West Chester, OH campus, with default rate three slots better than Georgetown, at 4,547. Non-cosmetology schools prominent in the top are also obvious candidates for cutoff. In the top-100 Everest is at slots numbered 16, 38, 53, 57, 87, and 94 (Everest apparently had nine separately listed schools). One entry in the top-100 should require a presumption a school should be ineligible for federal funds: five becomes a no-brainer. Of course, Everest was eventually shut down but not before ruining countless lives with crushing, non-dischargeable student loan debt.Some schools did surprisingly well. Strayer University is at 1,611th place and the University of Phoenix just below it, at 1,686th place (with another Paul Mitchell beauty school sandwiched in between, at 1,670).  At the other end of the list there is a heavy grouping of medical schools, theology seminaries, and prominent business schools, all with a default rate of zero. Cornell and Harvard are one slot apart, at 4,555 and 4,556 respectively, with a default rate of .7%.

Plasma For Pay - Broke Millennials Sell Blood Just To Survive --There is no doubt, in a period where burdensome student loans and wage stagnation are crushing the hopes of achieving the American dream while living in their parents’ basements, the millennial generation is struggling to survive. In recent times, we have explained how this generation is selling sex on the internet in exchange for money to pay bills. Across the United States, there could be upwards 2.5 million college students selling sex on a website to cover expenses (see: Millions Of Millennials Could Be Trading Sex For Their Next Debt Payment – Here’s How) or there is a new trend with millennial women, auctioning their virginities to the highest bidder (see: Abu Dhabi Businessman Pays $2.9 Million For 19-Year-Old Model’s Virginity.) If it’s sex, the millennial generation has made it a commodity, using the power of the internet to leverage the sale. Besides the out of control sex advertisement on creepy websites, struggling millennials are now supplementing their incomes at blood plasma facilities across the United States. In particular, Cheyenne Johnson, a former Lane Community College student, said: “You just walk in and walk out with money.” Cha-ching. .. Twice a week, she visits Grifols Talecris plasma donation center in Eugene, Oregon, exchanging plasma for cash in excess of $25 to $150 per week. Cheyenne, 23, visits the facility on a regular basis because the job environment in the area is weak.

Here's How Much Retirees Are Spending To Support Their Adult Kids - At one point in time in America, living at home with mom and dad after crossing out of your teenage years and into your 20s was embarrassing and something that was generally avoided at all costs.  And while hard times come and go, 20-somethings who were forced back into their parents' care worked their tails off until they could save up enough money to once again regain their freedom.But, these days millennials seem to be embracing the free room and board provided by their parents.  According to a new study from the Census Bureau, roughly one-third of all millennials live at home with their parents and one-fourth of them can't be bothered with enrolling in school or finding a job.Of course, while living at home can help millennials cut down on costs, according to a new study from Nerd Wallet, it can also have a devastating impact on the retirement savings potential of their overly accommodating parental units...to the tune of a quarter million dollars.  Here are some of the key takeaways from Nerd Wallet's survey:

  • Parents could miss out on almost a quarter-million dollars in retirement savings by paying their adult kids’ expenses: According to NerdWallet analysis, a parent’s retirement savings could be $227,000 higher if they chose to save the money that would otherwise go to their child’s living expenses and tuition.
  • Parents paying college costs could be missing out on almost $80,000 in retirement savings: More than a quarter of parents of children 18 and older (28%) are paying or have paid for their adult children’s tuition or student loans. The average parent takes out $21,000 in loans for their child’s college education, but the hit to retirement savings is almost quadruple that amount.

The Crisis Ahead: The U.S. Is No Country for Older Men and Women - Millions can no longer afford to retire, and may never be able when the GOP passes its tax bill.  The news is not good for millions of aging Baby Boomers and Gen Xers in the United States who are moving closer to retirement age. According to the Employee Benefit Research Institute’s annual report on retirement preparedness for 2017, only 18 percent of U.S.-based workers feel “very confident” about their ability to retire comfortably; Craig Copeland, senior research associate for EBRI and the report’s co-author, cited “debt, lack of a retirement plan at work, and low savings” as “key factors” in workers’ retirement-related anxiety. The Insured Retirement Institute finds a mere 23 percent of Baby Boomers and 24 percent of Gen Xers are confident that their savings will last in retirement. To make matters worse, more than 40 percent of Boomers and over 30 percent of Gen Xers report having no retirement savings whatsoever. The U.S. has a retirement crisis on its hands, and with the far right controlling the executive branch and both houses of Congress, as well as dozens of state governments, things promise to grow immeasurably worse. House of Representatives Speaker Paul Ryan, a devotee of social Darwinist Ayn Rand, has made no secret of his desire to privatize Social Security and replace traditional Medicare with a voucher program. Had George W. Bush had his way and turned Social Security over to Wall Street, the economic crash of September 2008 might have left millions of senior citizens homeless. Since then, Ryan has doubled down on his delusion that the banking sector can manage Social Security and Medicare more effectively than the federal government. Republican attacks on Medicare have become a growing concern: according to EBRI, only 38 percent of workers are confident the program will continue to provide the level of benefits it currently does.

CDC gets list of forbidden words: fetus, transgender, diversity -- The Trump administration is prohibiting officials at the nation’s top public health agency from using a list of seven words or phrases — including “fetus” and “transgender” — in official documents being prepared for next year’s budget. Policy analysts at the Centers for Disease Control and Prevention in Atlanta were told of the list of forbidden terms at a meeting Thursday with senior CDC officials who oversee the budget, according to an analyst who took part in the 90-minute briefing. The forbidden terms are “vulnerable,” “entitlement,” “diversity,” “transgender,” “fetus,” “evidence-based” and “science-based.” In some instances, the analysts were given alternative phrases. Instead of “science-based” or ­“evidence-based,” the suggested phrase is “CDC bases its recommendations on science in consideration with community standards and wishes,” the person said. In other cases, no replacement words were immediately offered.The Department of Health and Human Services, which oversees the CDC, “will continue to use the best scientific evidence available to improve the health of all Americans,” HHS spokesman Matt Lloyd told The Washington Post. “HHS also strongly encourages the use of outcome and evidence data in program evaluations and budget decisions.” The question of how to address such issues as sexual orientation, gender identity and abortion rights — all of which received significant visibility under the Obama administration — has surfaced repeatedly in federal agencies since President Trump took office. Several key departments — including HHS, as well as Justice, Education, and Housing and Urban Development — have changed some federal policies and how they collect government information about lesbian, gay, bisexual and transgender Americans.

 When Buying Prescription Drugs, Some Pay More With Insurance Than Without It - In an era when drug prices have ignited public outrage and insurers are requiring consumers to shoulder more of the costs, people are shocked to discover they can sometimes get better deals than their own insurers. Behind the seemingly simple act of buying a bottle of pills, a host of players — drug companies, pharmacies, insurers and pharmacy benefit managers — are taking a cut of the profits, even as consumers are left to fend for themselves, critics say.Although there are no nationwide figures to track how often consumers could have gotten a better deal on their own, one industry expert estimated that up to 10 percent of drug transactions involve such situations. If true nationwide, that figure could total as many as 400 million prescriptions a year. The system has become so complex that "there's no chance that a consumer can figure it out without help," said the expert, Michael Rea, chief executive of Rx Savings Solutions, whose company is paid by employers to help them lower workers' drug costs. Pharmacy benefit managers, the companies that deal with drug benefits on behalf of insurers, often negotiate better prices for consumers, particularly for brand-name medications, Rea said, but that's not necessarily true for some generic drugs. Insurers' clients are frequently employers overseeing large numbers of workers, and the companies are focused on overall costs. So when insurers seek deals for generic drugs, they do so in batches, reaching agreements for groups of different drugs rather than getting the lowest price on every drug.

Nothing Protects Black Women From Dying in Pregnancy and Childbirth - Pro Publica - In recent years, as high rates of maternal mortality in the U.S. have alarmed researchers, one statistic has been especially concerning. According to the CDC, black mothers in the U.S. die at three to four times the rate of white mothers, one of the widest of all racial disparities in women’s health. Put another way, a black woman is 22 percent more likely to die from heart disease than a white woman, 71 percent more likely to perish from cervical cancer, but 243 percent more likely to die from pregnancy- or childbirth-related causes. In a national study of five medical complications that are common causes of maternal death and injury, black women were two to three times more likely to die than white women who had the same condition. That imbalance has persisted for decades, and in some places, it continues to grow. In New York City, for example, black mothers are 12 times more likely to die than white mothers, according to the most recent data; from 2001 to 2005, their risk of death was seven times higher. Researchers say that widening gap reflects a dramatic improvement for white women but not for blacks.  The disproportionate toll on African Americans is the main reason the U.S. maternal mortality rate is so much higher than that of other affluent countries. Black expectant and new mothers in the U.S. die at about the same rate as women in countries such as Mexico and Uzbekistan, the World Health Organization estimates.  What’s more, even relatively well-off black women like Shalon Irving die or nearly die at higher rates than whites. Again, New York City offers a startling example: A 2016 analysis of five years of data found that black college-educated mothers who gave birth in local hospitals were more likely to suffer severe complications of pregnancy or childbirth than white women who never graduated from high school. The fact that someone with Shalon’s social and economic advantages is at higher risk highlights how profound the inequities really are,  . “It tells you that you can’t educate your way out of this problem. You can’t health-care-access your way out of this problem. There’s something inherently wrong with the system that’s not valuing the lives of black women equally to white women.”

Mortality from opioid addiction quadruples - Modern Healthcare: Deaths from opioid-related hospitalizations more than quadrupled from 2000 to 2014 as providers treated patients with more severe cases of pain addiction, according to a new study. A study published Monday in Health Affairs found inpatient mortality rose from 0.43% in 2000 to 2.02% in 2014. At the same time, those admitted to the hospital because of opioid or heroin poisoning grew while those admitted because of opioid abuse—a less severe diagnosis of addiction—fell. Cases of opioid and heroin poisoning also had a higher fatality rate—2.86%—compared to cases of opioid dependence, which were at 0.13%. Although it's difficult to know from the data why cases of opioid dependence declined at hospitals, Dr. Zirui Song, author of the study and assistant professor of healthcare policy at Harvard Medical School, said efforts in recent years by public health professionals to abate the crisis might be a reason. First responders are increasingly treating opioid addiction needs in homes and through community groups, so it's likely that less severe cases of opioid addiction no longer end up in the hospital setting. "The individuals that make it into the hospitals (for opioid addiction) are going to be on average a little sicker or higher risk," he said.Other factors contributing to the trend could be that more potent opioids like fentanyl are easier to access and the price of oxycodone is higher compared to heroin, Song added.

Kellyanne Conway leading an ‘opioids cabinet,’ as she assumes more active policy role — Kellyanne Conway, counselor to President Trump, has been leading weekly meetings at the White House with officials across a dozen federal departments to develop a plan to respond to the opioid crisis and to implement recommendations from a presidentially appointed commission, she and other officials told STAT. The “opioids cabinet,” as the group is known, is intended to help streamline efforts across the government and includes staffers from the Department of Health and Human Services and the Office of National Drug Control Policy, among other executive branch offices. In an interview with STAT, Conway said she and other administration officials have also been urging Congress to appropriate additional funding for addiction treatment and prevention programs. She pushed back on the notion that the White House is not allocating sufficient resources to combat the opioid epidemic, citing ongoing conversations with budget director Mick Mulvaney. Conway and other administration officials have barnstormed the country since the start of the year to talk with state and local authorities about the opioid epidemic, in many cases returning to states where the candidate Trump listened to pleas for help from communities struggling with the opioid crisis. But in her role in the White House meetings, the longtime political consultant is playing a more active part in helping to shape policy.  She is doing so at a time when there are leadership vacancies at HHS and the Drug Enforcement Administration; the administration also currently does not have a “drug czar.” The White House has been criticized for delegating a significant policy role to Conway, who has no prior experience working on addiction issues or as a policymaker.

Mom accused of subjecting son to 323 hospital visits, 13 surgeries - A Texas mother is in jail after hospital staff sounded alarm over a boy who had been seen 323 times at various medical centers and undergone 13 major surgeries in his eight years of life. Kaylene Bowen, who has allegedly previously claimed her son was dying of a genetic disease, fighting cancer and suffering from several other ailments over his lifetime, was arrested on a warrant accusing her of injury to a child with serious bodily injury, The Star-Telegram reported. Bowen, 34, remains in Dallas County Jail while the boy, whose name is Christopher, and his two half-siblings have been placed in foster care. The boy’s father, Ryan Crawford, said he’s tried alerting authorities to Bowen’s actions previously, but was shut down by courts who sided with her. “It was always the same story: Christopher is dying,” Crawford told The Star-Telegram.   “The father doesn’t need to be around because he doesn’t know how to take care of him. Every time I went to court, they made me feel like I was the worst human ever.” According to a Child Protective Services petition, Christopher was seen 323 times at hospitals and pediatric centers in Dallas and Houston between 2009 and 2016, The Star-Telegram reported. At various points, he was placed on oxygen fulltime, used a wheelchair, and was outfitted with a feeding tube that lead to life-threatening blood infections. Court documents revealed that Bowen placed Christopher in hospice care, and tried to have him placed on a lung transplant list. “It’s horrible for my son, or any kid because obviously my son is not the only one that has had to go through this type of torture,” Crawford told The Star-Telegram. “The system has to be exposed – all the weaknesses that are in the system – because the kids don’t deserve that.” While not formally diagnosed, Bowen’s actions are similar to those of others who suffer from Munchausen syndrome by proxy. The condition occurs when a person attempts to produce psychological or physical symptoms in another person, usually someone who is dependent on them.

Have a cell phone against your ear?  You should consider putting it down -  Put your cellphone down – and keep it away from your pillow, the California Department of Public Health is advising. Smartphone use continues to increase in the U.S., especially among children, and the health department said some people and health professionals have concerns about the radio frequency energy emitted from cell phones. The scientific community has not reached a consensus on the risks of cell phone use, but the health department said research suggests long-term, extensive use may affect health. Smartphones emit radio frequency energy when they send signals to and receive them from cell towers. About 95 percent of Americans own a cell phone, and 12 percent rely on their smartphones for everyday Internet access, the health department said. In addition, the average age when children get their first phone is now just 10, and a majority of young people keep their phones on or near them most of the day and while they sleep. “Children’s brains develop through the teenage years and may be more affected by cellphone use,” Smith said. “Parents should consider reducing the time their children use cellphones and encourage them to turn the devices off at night.” Other tips for reducing exposure to radio frequency energy from cellphones: Keeping the phone away from the body, reducing cellphone use when the signal is weak, reducing the use of cellphones to stream audio or video or to download or upload large files, keeping the phone away from the bed at night, removing headsets when not on a call, and avoiding products that claim to block radio frequency energy because they may actually increase your exposure.

Cell Phone Radiation Risks: California Issues Groundbreaking Guidelines -- This week, California officially issued groundbreaking guidelines advising cell phone users to keep phones away from their bodies and limit use when reception is weak. State officials caution that studies link radiation from long-term cell phone use to an increased risk of brain cancer, lower sperm counts and other health problems, and note that children's developing brains could be at greater risk.   The state Department of Public Health was forced to release the guidelines in March after a lawsuit by University of California, Berkeley, researcher Dr. Joel Moskowitz . At the time, the department said the guidelines were only a draft, but they now are the state's official position. In studies by the federal National Toxicology Program , male rats exposed to cell phone radiation had a greater chance of developing a brain cancer called malignant glioma, as well as developing a tumor found on the heart. Based on human epidemiological studies demonstrating increased risk of brain tumors, the World Health Organization has declared cell phone radiation a possible carcinogen . Meanwhile, the telecom industry continues to fight efforts to inform the public.   In a press release, Department of Public Health Director Karen Smith said:   Simple steps, such as not keeping your phone in your pocket and moving it away from your bed at night, can help reduce exposure for both children and adults ... Children's brains develop through the teenage years and may be more affected by cell phone use. Parents should consider reducing the time their children use cell phones and encourage them to turn the devices off at night. 

Cancer Notes -  The US cancer-industrial complex has the same ideology as that of government regulators: It’s a combination of direct corporate corruption and the ideology of “managing” a certain level of cancer “risk” and “tolerance”. This adds up to a complete focus on detection and treatment, the latter having to be done on a corporate profiteering basis. (This latter emphasis is also a combination of corruption and ideology.)   Studying the environmental causes of cancer and working for prevention is ruled out as unscience and unpolicy. This is the cancer branch of the corporate science paradigm. Only alleged genetic causality can be researched, and only gene therapy would constitute acceptable prevention policy. The only place where there’s any controversy within the system is over some aspects of detection, for example mammograms. The few exceptions to this, such as with cigarettes and lung cancer, were forced upon the system by grassroots movements. Acknowledging what the system long knew, that smoking causes cancer in the smoker, didn’t threaten the paradigm as much because it’s easy to place all the blame on the smoker for his own cancer.  This war has a strange religious element. Corporate cancer researchers have explicitly named “bad luck” as a significant cause of cancer. This isn’t a scientific concept but a pathetic attempt to fill the void which even the gross embellishment of the evidence for some genetic causality hasn’t been able to fill. The anti-scientific and pro-cancer goal is to deny the environmental causality at all costs. (The “bad luck” thesis was quickly debunked by a study done according to the classical falsificationist scientific method.) It’s religiously weird, though, in that religious preachers usually want to give people explanations for pressing things which they can’t explain on their own. Today’s corporate scientism tries to do this with the ideology of biological determinism. It’s junk science, but for those willing to believe the lies it could possibly fulfill that religious need. So it’s significant that, as committed as corporate science is to finding genetic causes for almost all cancer, it nevertheless has failed so badly even on its own terms that it’s had to resort to such a transparent admission of bankruptcy as enshrining “bad luck” as the state of its science. Of course bad luck doesn’t explain anything to anyone, so it’s not only laughably bad science, but bad religion as well.

Philippines orders probe into Sanofi dengue vaccine for 730,000 children (Reuters) - The Philippines ordered an investigation on Monday into the immunization of more than 730,000 children with a vaccine for dengue that has been suspended following an announcement by French drug company Sanofi that it could worsen the disease in some cases. The World Health Organization said it hoped to conduct a full review by year-end of data on the vaccine, commercially known as Dengvaxia. In the meantime, the WHO recommended that it only be used in people who had a prior infection with dengue. The government of Brazil, where dengue is a significant health challenge, confirmed it already had recommended restricted use of the vaccine but had not suspended it entirely. Amid mounting public concern, Sanofi explained its “new findings” at a news conference in Manila but did not say why action was not taken after a WHO report in mid-2016 that identified the risk it was now flagging. A non-governmental organization (NGO) said it had received information that three children who were vaccinated with Dengvaxia in the Philippines had died and a senator said he was aware of two cases. However, Department of Health Undersecretary Gerardo Bayugo told Reuters the three referred to by the NGO died due to causes not related to the vaccine and Sanofi said no deaths had been reported as a result of the program. Nearly 734,000 children aged 9 and over in the Philippines have received one dose of the vaccine as part of a program that cost 3.5 billion pesos ($69.54 million). 

 Big Ag + Big Pharma = Big Problems - If you enjoy a good roasted chicken and would like to continue to do so, you might want to stop reading now. Because chicken is now a commodity protein to be delivered in the form of white meat as cheaply as possible to consumers. And the cost of that system is considerable, as Maryn McKenna outlines in her book Big Chicken. McKenna’s crusade is against the rising threat of antibiotic resistance, and it is a worthwhile endeavor. Her description of a post-antibiotic world looks a lot like the pre-antibiotic world, in which roughly a quarter of children died of infectious diseases before their fifth birthday, surgery and chemotherapy were impossible, and a skinned knee could be fatal—and often was. It was a horrifying time to be alive. The development of antibiotic resistance is the inevitable flipside to antibiotic use; it's how evolution works. When people needlessly use antibiotics or use them improperly—which we still do—antibiotic resistance intensifies, evolving more quickly and granting pathogens immunity to a wider collection of drugs. But as McKenna argues in Big Chicken, the real culprits that have brought us to the brink of a post-antibiotic age are not overzealous parents and doctors treating kids with ear infections. They are the large agricultural corporations that daily give inordinate amounts of antibiotics to the farm animals we eat. Farm animals in the US, such as pigs, cows, and chickens, receive more than 80 percent of the antibiotics sold in the States. These animals do not get antibiotics to cure bacterial infections that they harbor, as people do. They get antibiotics because, in 1949, a researcher at Lederle Labs discovered that adding antibiotics to chicken feed made the birds gain weight faster. (Antibiotics have the same effect on people, btw.) By lacing animal feed with these drugs, farmers and ranchers could get their animals up to an ever-increasing slaughter weight more quickly and with the same amount of food. Since the antibiotics also protect the animals from getting any infections in the first place, this daily dose of antibiotics created and enabled massive-scale animal husbandry as it is practiced today the world over.

Investors call on Sanderson, Denny's, McDonald's to cut antibiotics - (Reuters) - An investor coalition that presses for corporate responsibility is calling on U.S. food companies McDonald’s Corp, Denny’s Corp and Sanderson Farms Inc to stop buying or producing meat raised with medically important antibiotics. Members of the Interfaith Center on Corporate Responsibility (ICCR) have filed shareholder resolutions at each of the companies, ICCR said in a statement on Thursday. If the resolutions are not successfully challenged by the companies, they will come up for vote at the companies’ next shareholders meetings. ICCR members, alongside other campaigners, have had previous success in convincing most U.S. chicken producers to stop using medically important antibiotics. Scientists and public health experts for years have warned that the regular use of antibiotics to promote growth and prevent illness in healthy farm animals contributes to the development and spread of drug-resistant superbugs that can infect people. The World Health Organization earlier this year recommended that meat producers end such practices. Fast-food chain McDonald’s USA last year shifted to chicken raised without medically important antibiotics. The latest shareholder resolution, sponsored by the Congregation of Benedictine Sisters of Boerne, Texas, calls on McDonald’s Corp to adopt a similar sourcing policy for beef or pork. 

Bakers, farmers struggle to make any dough on poor wheat crop - Gonnella Baking Co - which supplies the buns to Major League Baseball’s Wrigley Field - faced an unusual problem in October when flour from this year’s U.S. wheat harvest arrived at their factories containing low levels of protein. That meant bakers couldn’t produce bread with the airy texture customers demand, setting off two weeks of tinkering with temperatures and the mixing process, and the eventual purchase of gluten as an additive. By the time the alchemy was done, Gonnella had thrown away more than $20,000 worth of substandard bread and buns, said president Ron Lucchesi. “That really was a headache,” Lucchesi said. The problem spans the $23 billion U.S. bread market and highlights a paradox in the global wheat trade. Despite a worldwide grains glut, high-protein hard wheat is scarce after two years of poor U.S. harvests. The shortage hurts bakers and millers who prize high-protein wheat, along with the farmers who grow it. Wholesale bakers such as Grupo Bimbo, Flowers Foods Inc and Campbell Soup Co’s Pepperidge Farms are feeling the squeeze on margins, Millers such as Archer Daniels Midland Co, Ardent Mills, General Mills Inc have been able to pass on much of their higher wheat costs in sales of flour to bakers, he added. But bakers have not been able to pass those costs to grocers, who have been unwilling to pay higher prices because of increased competition and price deflation. Global wheat inventories have risen to record-high levels due in part to heavy production from Russia. Meanwhile, U.S. per capita consumption of wheat flour in 2016 fell to its lowest level in nearly three decades, and U.S. farmers planted their smallest winter wheat crop in more than a century. 

U.S. Agricultural Commodity Overproduction Helps Agribusinesses but Hurts World's Developing World Farmers and the Environment. Is it Even Legal? – Big Picture Agriculture - Crops are in across the U.S. farm belt, with record harvests filling farmers’ silos with grain and their hearts with pride. Yet persistent and punishingly low prices for those crops leave them no better off for their efforts. Net farm income this year is about half what it was in 2013. U.S. farmers are not alone. The world is experiencing what Reuters called a “global grain glut,” with many staple food crops filling silos from Brazil to the Ukraine. Crop prices have fallen dramatically, with serious repercussions for farmers, particularly poor farmers in developing countries. Unfortunately, two institutions with the power to address the the problem seem poised to make things worse rather than better. The U.S. Congress has begun discussions of a new Farm Bill, and there is little indication it will include the kinds of provisions that might curb unchecked production. Meanwhile, the World Trade Organization gathers December 10 in Buenos Aires, Argentina, ostensibly to address the kinds of trade policies that can allow governments to protect their farmers from cheap exports flowing from U.S. and other dominant exporters. All indications are that WTO ministers, mis-led by the United States, are unlikely to even consider measures to address the global grain glut or its impacts. Since the 1980s, U.S. policies have encouraged maximum production.  And the 2018 Farm Bill, now taking shape in Congress, promises to do more of the same. Subsidized crop insurance will encourage farmers to extend planting onto marginal lands, knowing they can get a payout if the crop fails. Other subsidy payments will compensate them if prices or revenues fall below minimum thresholds, taking even more of the risk out of expanding acreage. Few measures will take land out of production, for conservation or just to ease the grain glut and price squeeze.

EPA Allowing Widespread Use of Unapproved Pesticides, Study Finds - The U.S. Environmental Protection Agency ( EPA ) has routinely been allowing use of unapproved pesticides under the pretext of an "emergency" when no actual emergency exists, according to an analysis released Monday by the Center for Biological Diversity . The abuse of the emergency provision has created a loophole allowing the widespread use of unapproved pesticides, year after year, across millions of acres in ways that are either known to be harmful to wildlife or haven't been tested to be safe. In one case the EPA has granted 78 "emergency" exceptions over the past six years for a well-known, bee-killing pesticide called sulfoxaflor, allowing its use on more than 17.5 million acres of U.S. farmland. "It's disgusting to see the EPA's broken pesticide program bending over backward to appease the pesticide industry," said Stephanie Parent, a senior attorney in the Center for Biological Diversity's environmental health program. "These exemptions put people and wildlife at tremendous risk because they allow poisons to be applied in ways that would otherwise be illegal." The EPA has the authority to OK temporary emergency use of unapproved pesticides if the agency determines the pesticide is needed to prevent the spread of an unexpected outbreak of crop-damaging insects, for example. But the Center for Biological Diversity's analysis shows the EPA's routine use of the emergency provision has allowed pesticide manufacturers to bypass the typical pesticide approval process, resulting in poisons with either known or undetermined risks being applied across millions of acres of crops. The 78 emergency exceptions for sulfoxaflor are notable because previous approval for its use on cotton was cancelled by a federal judge in 2015 due to sulfoxaflor's potential harm to pollinators, and it has never been approved for use on sorghum, which is attractive to bees . Yet the EPA granted every single requested emergency exemption for the pesticide's use on sorghum and cotton. The EPA has not released any information regarding bee die-offs or pollinator impacts as a result of these widespread exemptions.

Monsanto Giving Cash to Farmers Who Use Controversial Pesticide - Looks like Monsanto really wants farmers to use XtendiMax. The agribusiness giant is offering a cash incentive to farmers to apply a controversial pesticide linked to 3.1 million acres of crop damage in nearly two dozen heartland states, according to Reuters . The cash-back offer comes as several states are considering restrictions on the use of the drift-prone and highly volatile chemical. DuPont Co. and BASF SE also sell dicamba -based formulations. Monsanto could refund farmers about 50 percent of the price of its product, XtendiMax With VaporGrip Technology, in 2018 if they spray the product on the seed company's Xtend soybeans that are genetically engineered to tolerate dicamba. Reuters reported: XtendiMax costs about $11 per acre to buy, and Monsanto is offering $6 per acre in cash back to farmers when they apply it on Xtend soybeans along with other approved herbicides, according to the company. “We believe cash-back incentives for using XtendiMax with VaporGrip Technology better enable growers to use a management system that represents the next level of weed control," said Ryan Rubischko, Monsanto product manager. The herbicide is designed to beat back weeds on dicamba-resistant soy and cotton fields but is highly damaging if it floats onto neighboring non-target crops. Plants exposed to the chemical are left wrinkled, cupped or stunted in growth. But Monsanto has vehemently defended the safety of XtendiMax and has casted blame on farmers for improperly using the product. In October , the U.S. Environmental Protection Agency reached an agreement with Monsanto, BASF and DuPont to set new requirements for “over the top" use of dicamba to help minimize drift damage for the 2018 growing season.  Meanwhile, regulators in North Dakota, Missouri and Arkansas are taking steps to set restrictions on dicamba-based herbicides.

Farmers Seek to Deploy Powerful Gene Drive – A technology feared for its potential as a bioweapon is attracting interest from farmers as a way to control pests. Since it first appeared in Northern California in 2008, the spotted-wing drosophila, a type of fruit fly native to Asia, has become the bane of the state’s cherry farms because of the razor-edged “ovipositor” on its tail. Rather than lay eggs in rotting berries, as domestic flies do, the invasive species punches holes in fruit that’s still ripening, spoiling it. The costs to U.S. agriculture: about $700 million a year. California’s cherry growers think they may have a way to get rid of the flies cheaply. To do it, they are counting on a technology developed by geneticists: a “gene drive” that can spread DNA alterations among wild flies, potentially killing them off. Gene-drive technology is among the most widely debated—and feared—inventions of modern biology. Opponents call it a genetic “atom bomb” and want it banned. Others see the possibility of unprecedented public health interventions, like eradicating the mosquitoes that spread malaria. Now, for the first time, commercial uses are on the table. With funding from the California Cherry Board, scientists at the University of California, Riverside, have installed a gene drive in the invasive pest, the first time the technology has been established in a commercially important species. In addition to that effort, which remains confined to the laboratory, two spinout companies from the University of California, San Diego, are also pursuing commercial use of gene drives. One, Agragene, also intends to alter plants and insects. Its sister company, Synbal, wants to harness the technology as a speedy way of engineering lab mice and possibly pet dogs. “It’s about having genes under precise control in whatever organism you are modifying,”

 US military agency invests $100m in genetic extinction technologies - A US military agency is investing $100m in genetic extinction technologies that could wipe out malarial mosquitoes, invasive rodents or other species, emails released under freedom of information rules show. The documents suggest that the US’s secretive Defense Advanced Research Projects Agency (Darpa) has become the world’s largest funder of “gene drive” research and will raise tensions ahead of a UN expert committee meeting in Montreal beginning on Tuesday. The UN Convention on Biological Diversity (CBD) is debating whether to impose a moratorium on the gene research next year and several southern countries fear a possible military application. UN diplomats confirmed that the new email release would worsen the “bad name” of gene drives in some circles. “Many countries [will] have concerns when this technology comes from Darpa, a US military science agency,” one said.  The use of genetic extinction technologies in bioweapons is the stuff of nightmares, but known research is focused entirely on pest control and eradication. Cutting-edge gene editing tools such as Crispr-Cas9 work by using a synthetic ribonucleic acid (RNA) to cut into DNA strands and then insert, alter or remove targeted traits. These might, for example, distort the sex-ratio of mosquitoes to effectively wipe out malarial populations.Some UN experts, though, worry about unintended consequences. One told the Guardian: “You may be able to remove viruses or the entire mosquito population, but that may also have downstream ecological effects on species that depend on them.” “My main worry,” he added, “is that we do something irreversible to the environment, despite our good intentions, before we fully appreciate the way that this technology will work.”

These Butterflies Have Lawyers -- This week attorneys representing the North American Butterfly Association filed a suit against the Trump administration for its plan to build a section of the U.S.-Mexico border wall through a significant portion of the National Butterfly Center in Mission, Texas. The construction plan would cut off the organization's access "to no less than two-thirds of the Butterfly Center property" just north of the Rio Grande River, according to the lawsuit.  The lawsuit was officially filed Monday against the Department of Homeland Security and U.S. Customs and Border Protection, the agencies responsible for building and patrolling the wall.  The filing , provided to The Revelator by the National Butterfly Center, also alleges that "the Agencies and their agents and contractors have entered, damaged and destroyed NABA's private property without authorization or permission"— details The Revelator uncovered when we originally reported on this story last July . At the time Executive Director Marianna Trevino Wright said crews had chopped down "dozens, perhaps hundreds," of trees, shrubs and other plants. She captured the damage on video.    The unexpected presence of border agents reportedly continues practically to this day. In a phone call on Tuesday, Wright said that a customs agent had been on their property in late November turning visitors away from the area near where the border wall would be built.

Tropical deforestation is getting bigger, study finds - As nations race to keep forests standing and the world from warming, scientists are trying to figure out what human activities are causing deforestation and how best to stop them. A study published last week in Environmental Research Letters lends some new insights, finding the majority of forest loss in the tropics is due to medium- and large-scale clearing – hallmarks of industrial agriculture. The researchers who authored the study say policy changes are needed to reduce deforestation for commodity crops like palm oil. For their study, researchers at Duke University in the U.S. analyzed tree cover loss data detected by satellites between 2001 and 2012 and compiled by the University of Maryland. They restricted their analysis to tropical areas as defined by the UN’s Food and Agriculture Organization (FAO). They then analyzed tree cover loss trends in respect to four deforestation class sizes: less than 10 hectares, 10 to 100 hectares, 100 to 1,000 hectares and more than 1,000 hectares. According to the FAO, household and other small-scale farms in tropical, developing nations tend to clear less than 10 hectares, so the authors used this number to define smallholder operations. The data indicate that in the tropics overall, deforestation increased 53 percent between 2001 and 2012, from an average of around 69,000 square kilometers (6.9 million hectares or 26,600 square miles) per year during the first half of their study period to 79,000 square kilometers per year during the last half. When they looked at the scale of discrete deforestation events, the researchers found more than half were larger than 10 hectares. This trend, they write, was most apparent in South America and Southeast Asia, where 79 percent of tropical deforestation occurred. In South America, the researchers found that small clearings contributed 42 percent to South America’s overall deforestation and 67 percent to Southeast Asia. In comparison, small clearing events accounted for more than 80 percent of overall deforestation in other regions.

Trees are the dominant source of methane emissions in Amazon wetlands - The world’s wetlands pack quite the climate punch. Not only can they store vast amounts of carbon in their saturated soils, they also release it as methane – a greenhouse gas that is 34 times more powerful than CO2 at trapping heat in the atmosphere.While wetlands are also frequently overlooked in favour of upland forests when considering the exchange of greenhouse gases between ecosystems and the atmosphere, there have been some truly stunning breakthroughs this year in these ecosystems. This year saw the discovery of huge reserves of carbon locked away as peat deep in the Congolese jungle – showing that even today, scientists are making the sorts of discoveries that might be expected from a Victorian explorer.  In our new Nature study, my colleagues and I add to this new wetlands knowledge by revealing how trees in the seasonally flooded Amazon floodplain are the major regional emission source of methane. In doing so, we finally close the longstanding gap in the methane budget for the Amazon. As their name suggests, wetlands maintain a high water table for significant parts of the year. This near-constant saturation reduces the amount of oxygen that diffuses into sediments and soils, which in turn slows the decomposition of organic matter and allows peat to form.   This lack of oxygen is the same reason that “bog bodies” – ancient human remains that have been mummified in peat – are perfectly preserved for many thousands of years. But the oxygen deficit in wetland sediments has another effect: what little decomposition that takes place results in the production of methane instead of CO2. This one process is what makes global wetlands the single largest source of methane to the atmosphere.

Record 129 Million Dead Trees in California - The U.S. Department of Agriculture (USDA) Forest Service Monday announced that an additional 27 million trees, mostly conifers, died throughout California since November 2016, bringing the total number of trees that have died due to drought and bark beetles to an historic 129 million on 8.9 million acres. The dead trees continue to pose a hazard to people and critical infrastructure, mostly centered in the central and southern Sierra Nevada region of the state. "The number of dead and dying trees has continued to rise, along with the risks to communities and firefighters if a wildfire breaks out in these areas," said Randy Moore, regional forester of the USDA Forest Service , Pacific Southwest Region. "It is apparent from our survey flights this year that California's trees have not yet recovered from the drought, and remain vulnerable to beetle attacks and increased wildfire threat. The USDA Forest Service will continue to focus on mitigating hazard trees and thinning overly dense forests so they are healthier and better able to survive stressors like this in the future."  Moore continued, "To increase the pace and scale of this important work, we need to fix how fire suppression is funded. Last year fire management alone consumed 56 percent of the USDA Forest Service's national budget. As fire suppression costs continue to grow as a percentage of the USDA Forest Service's budget, funding is shrinking for non-fire programs that protect watersheds and restore forests, making them more resilient to wildfire and drought."  Though California received record-breaking rains in the winter of 2016-2017, the effects of five consecutive years of severe drought in California, a dramatic rise in bark beetle infestation and rising temperatures have led to historic levels of tree die-off. The Tree Mortality Task Force (TMTF), with support from the Governor's office and comprised of more than 80 local, state and federal agencies and private utility companies, continues to remove hazardous dead trees. To date, the TMTF members have collectively felled or removed more than 860,000 dead trees; this includes more than 480,000 dead trees felled or removed by the USDA Forest Service.

Dying Ecosystems - Earth’s ecosystems support all life, though collapsed ecosystems would be like stepping outside of the international space station not wearing a space suit. A recent academic study about signals of ecosystem collapse throughout history fits the space suit analogy. Terrifying truth is exposed: The all-important biosphere is sending out warning signals of impending crises… worldwide. It does not seem possible that ecosystems collapse and life dies off. That’s too hard to believe… but, what if it does collapse? “The Earth’s biodiversity is under attack. We would need to travel back over 65 million years to find rates of species loss as high as we are witnessing today.”  “Biodiversity increases resilience: more species means each individual species is better able to withstand impacts. Think of decreasing biodiversity as popping out rivets from an aircraft. A few missing rivets here or there will not cause too much harm. But continuing to remove them threatens a collapse in ecosystem functioning. Forests give way to desert. Coral reefs bleach and then die,”  It’s already happening! Imagine flying in an aircraft while watching the rivets pop, one by one. At some point in time screaming overrides thinking. But, thank heavens; we’re not quite there yet. Scientists from University College London and the University of Maryland studied 2,378 archeological sites and discovered that every society for thousands of years gave early clues to its own demise. Of course, demise happened precisely because those early warnings were ignored, while thinking: “it’s impossible, can’t happen.” The determinate signal of upcoming demise is referred to as “flickering,” which is a change in society’s responses to perturbations resulting in a society caught in a socio-ecological trap that reinforces negative behavior that started the issue in the first instance, thus, preventing adaption.  The formula: Every time a society flickers, losing rivets, it loses recovery time, thereby moving closer to collapse. In every case study, with nearly 100% accuracy, researchers found flickers precedent to eventual collapse All but 2 of 27 test cases showed statistically significant results. Every case experienced massive population growth as a result of the emergence of agriculture followed by technological advancements. Sound familiar? Societal decline is empirically signaled by any number of drivers such as (1) changing climate, (2) declining environmental productivity, (3) disease, (4) warfare, or (5) combinations thereof. Today, we’ve got’em all.

The Most Overlooked Environmental Crisis of 2017 - Off the coast of Louisiana, in an 8,000-square-mile swath of ocean, the marine life is suffocating to death. Nutrient pollution, flowing from the Mississippi River into the Gulf of Mexico, is birthing huge clumps of algae that are sucking oxygen from the water. Without oxygen, fish are struggling to respirate, and fleeing the scene en masse. Plants and worms, being unable to flee, are wasting away. This so-called “dead zone” in the Gulf has been appearing every spring and lasting until the winter since monitoring began in 1985, but this year it grew to the size of New Jerseythe largest dead zone ever recorded in the world. Next year it will probably be bigger. If you missed this news, that’s probably because this year’s news read like the script of a cli-fi drama. The U.S. had a record-breaking hurricane season, which begat yet more environmental destruction: Hurricane Harvey caused a toxic Superfund site overflow, excess carcinogenic air pollution, and a chemical plant explosion in Texas. Hurricane Irma caused millions of gallons of sewage to overflow all over the state of Florida. Hurricane Maria created a drinking water crisis in Puerto Rico (and may have killed more than a 1,000 people). California, meanwhile, is still dealing with the deadliest and most destructive wildfire season on record, also with environmental after-effects; in the Bay Area, toxic ash laden with heavy metals infiltrated the soil and made air unbreathable. These catastrophes deservedly got wall-to-wall coverage on cable news, and front-page treatment in major newspapers. But in focusing on one kind of environmental disaster—extreme weather—many outlets overlooked another kind that’s destructive in its own right.   In 2016, corn crops caused most of the 1.15 million metric tons of nutrient pollution—excess nitrogen and phosphorus, mostly from fertilizer runoff—that was released into the Gulf. Thirty-six percent of those corn crops are used to feed chicken, cows, and pigs, most of which are eventually eaten by humans. As meat production increases, corn demand rises, producing more nutrient pollution and a bigger dead zone.

Climate scientists see alarming new threat to California - LA Times: California could be hit with significantly more dangerous and more frequent droughts in the near future as changes in weather patterns triggered by global warming block rainfall from reaching the state, according to new research led by scientists at Lawrence Livermore National Laboratory.Using complex new modeling, the scientists have found that rapidly melting Arctic sea ice now threatens to diminish precipitation over California by as much as 15% within 20 to 30 years. Such a change would have profound economic impacts in a state where the most recent drought drained several billion dollars out of the economy, severely stressed infrastructure and highlighted how even the state most proactively confronting global warming is not prepared for its fallout.The latest study adds a worrying dimension to the challenge California is already facing in adapting to climate change, and shifts focus to melting polar ice that only recently has been discovered to have such a direct, potentially dramatic impact on the West Coast. While climate scientists generally agree that the increased temperatures already resulting from climate change have seriously exacerbated drought in California, there has been debate over whether global warming would affect the amount of precipitation that comes to California. The study, published Tuesday in the journal Nature Communications, provides compelling evidence that it would. The model the scientists used homed in on the link between the disappearance of sea ice in the Arctic and the buildup of high ridges of atmospheric pressure over the Pacific Ocean. Those ridges push winter storms away from the state, causing drought. The scientists found that as the sea ice goes away, there is an increase in the formation of ridges.

California wildfires: Santa Barbara threatened by Thomas fire - BBC News: Fresh evacuations have been ordered after the largest of the wildfires raging in southern California burned out of control on Sunday. Fanned by winds, the resurgent Thomas fire now threatens the coastal city of Santa Barbara and nearby Carpinteria. Firefighters earlier reported progress in containing the blaze, said to have devastated an area the size of Chicago. But while other fires hitting the state are largely controlled, the Thomas fire is just 15% contained. Satellite imagery shows the vast Thomas Fire, north of Los Angeles, which has spread as far as the Pacific coast "The winds are kind of squirrely right now," Santa Barbara county fire spokesman Mike Eliason was quoted by the Associated Press as saying. "Some places the smoke is going straight up in the air, and others it's blowing sideways. Depends on what canyon we're in." Evacuation orders were issued overnight for parts of Carpinteria close to Los Padres National Forest, about 100 miles (160km) northwest of Los Angeles. Forecasters said wind speeds were expected to increase throughout the day, before dying down again overnight. The local fire department tweeted pictures of a wall of flames advancing on homes on the outskirts of Carpinteria early on Sunday morning. 

New evacuations ordered as California wildfires whip across region - Massive wildfires continued to scorch Southern California on Sunday fueled by whipping Santa Ana winds as thousands of firefighters braced for more extreme weather in the week ahead.  Five fires covering more than 225,000 acres raged across California on Sunday, with 9,000 firefighters combating the flames, according to the California Department of Forestry and Fire Protection, also known as Cal Fire.   More than 800 homes and structures have been destroyed and 98,000 people have been forced to evacuate, according to Cal Fire. The ongoing blazes are threatening 25,000 homes.  The largest fire, the Thomas Fire in Santa Barbara and Ventura counties, spanned 200,000 acres, and containment could drop below 15 percent overnight, authorities said late Sunday afternoon at a community meeting in Santa Barbara County.  The Santa Barbara County Sheriff's Office issued evacuation orders on Sunday for the area spanning Buena Vista Dr. to Toro Canyon Road from SR-192 north to Camino Cielo. Evacuation warnings for parts of Montecito, Carpinteria and Summerland were also expanded on Sunday. One death has been blamed on the Thomas Fire, which broke out on Monday. The body of Virginia Pesola, 70, was discovered at a car crash site along a fire evacuation route in Ventura County on Wednesday night, according to the county medical examiner’s office.   "Moderate Santa Ana winds pushed the fire last night and will continue through early this afternoon causing the fire to burned actively with significant growth in the Carpinteria area," the fire agency said on its website. "The fire continues to burn actively to the north, east, and west."  On Sunday afternoon, mandatory evacuations were lifted in the unincorporated areas east and north of Santa Paula's city limits.  The fierce Santa Ana winds were forecast to continue bringing a high fire danger throughout Southern California on Sunday, according to Weather Channel meteorologist Chris Dolce. The winds were expected to subside within the week ahead, but there was still no forecast of the rain in the immediate foreseeable future.

Santa Barbara Evacuates As Looming 230,000 Acre Fire Becomes Fifth Largest In State History -- Santa Barbara officials expanded evacuations Sunday as the Thomas Fire continues to rage through the Southern California county - burning over 230,000 acres to make it the fifth largest in the state since California began keeping records in 1932. Overall, approximately 8,500 firefighters are battling six wildfires across Southern California.  UPDATE: Containment for #ThomasFire DROPS to just 10% as the blaze grows 230,000 acres. 790 structures destroyed. Dramatic new video of flames is both mesmerizing and terrifying. More at 10pm @KSL5TV @KSLcom #SoCalFires#ThomasFireOjai #CaliforniaWildfires #VenturaFirepic.twitter.com/CchnnZYOpu  The #ThomasFire fire grew by over 50,000 acres throughout the day, with containment dropping from 15% to 10% - resulting in mandatory evacuations for approximately 5,000 Santa Barbara County residents, while 30,000 more were told to prepare to leave, bringing the total number of evacuated or sheltered citizens to just under 95,000.  #ThomasFire raging again, containment droped from 15% to 10% and it’s close to quarter of million acres pic.twitter.com/e2VTinI3JC — Igor Lopatonok (@lopatonok) December 11, 2017  790 structures have been destroyed and 18,000 remain threatened by the Thomas fire. The immediate concern is the town of Carpinteria - with the fire quickly moving west above the city chock full of dry vegetation that hasn't burned in nearly 100 years, said Steve Swindle, spokesman for the Ventura County Fire Department.

The first wintertime megafire in California history is here --  As holiday music plays on the radio, temperatures in Southern California have soared into the 80s, and bone-dry winds have fanned a summer-like wildfire outbreak. Southern California is under siege.As the largest of this week’s fires skipped across California’s famed coastal highway 101 toward the beach, rare snowflakes were falling in Houston, all made possible by a truly extreme weather pattern that’s locked the jet stream into a highly amplified state. It’s difficult to find the words to adequately describe how weird this is. It’s rare that the dissonance of climate change is this visceral. That one of California’s largest and most destructive wildfires is now burning largely out of control during what should be the peak of the state’s rainy season should shock us into lucidity. It’s December. This shouldn’t be happening.The Thomas fire is the first wintertime megafire in California history. In a state known for its large fires, this one stands out. At 115,000 acres, it’s already bigger than the city of Atlanta. Hundreds of homes have already been destroyed, and the fire is still just 5 percent contained. In its first several hours, the Thomas fire grew at a rate of one football field per second, expanding 30-fold, and engulfing entire neighborhoods in the dead of night. Hurricane force winds have produced harrowing conditions for firefighters. Faced with such impossible conditions, in some cases, all they could do is move people to safety, and stand and watch.  “California fires enter the heart of Los Angeles” read one New York Times headline, a statement so dire it could double as a plot synopsis in a nearby Hollywood movie studio. Ralph Terrazas, the Los Angeles fire chief, called the conditions the worst he’s seen in his entire 31-year career. “There will be no ability to fight fires in these kinds of winds,” said Ken Pimlott, the state fire chief. Shortly after these statements, state officials sent an unprecedented push notification to nearly everyone in Southern California, ominously warning millions of people to “stay alert.”

 Fire at a homeless encampment sparked Bel-Air blaze that destroyed homes, officials say - LA Times: he blaze that swept through the hills of Bel-Air last week, destroying six homes and damaging a dozen others, was sparked by a cooking fire at a homeless encampment in a nearby ravine, Los Angeles officials said Tuesday. The encampment was nestled in a canyon several hundred feet from Sepulveda Boulevard and the 405 Freeway, hidden from passing cars. For several years, it had been home to an unknown number of people, officials said. Investigators said the fire had not been set deliberately and they have not found any of the people who lived there. The camp — one of scores of makeshift communities that have grown along freeways, rivers and open space across Los Angeles — was largely destroyed in the fire, leaving authorities with little evidence. News that one of Los Angeles’ most affluent neighborhoods was damaged in a fire sparked by some of the city’s poorest residents added a sober note to the incident, with some officials saying it underscores the need to do more to house the homeless. This “makes a tragic event even more tragic,”. “The saddest thing is that we have so many homeless people. And they are everywhere in the city. And that sometimes causes serious problems.” A new task force for fire prevention will tackle some of those questions, officials said. The panel will consider mandatory evacuations of hillside and brush area encampments during days or seasons of high fire risk, and education campaigns to discourage outdoor fires when winds pick up. “But given the topography of… all the hills in our city, we could do that 24 hours a day and still miss a lot of people,” Los Angeles Mayor Eric Garcetti said. “Just like ramping up efforts to try to anticipate terrorist incidents, you can never get to zero risk.” 

How Smoke From California’s Fires is Harming the Most Vulnerable - A fine layer of ash covered the pavement at David Ewing’s feet, dirty residue from wildfires ravaging the region. “When I woke up yesterday I couldn't breathe,” said Ewing, who is homeless and has been diagnosed with cancer. He spent the previous night sleeping behind a Saks department store. “This stuff is just wiping me out.” Ewing is among the tens of thousands of homeless in Southern California who are struggling to escape the smoke as wildfires tear through the region. Experts caution against spending time outdoors when it’s smoky, but for many, staying inside isn't an option. Wildfire seasons have been growing longer and more severe throughout the American West. Heat-trapping pollution and the effects of weather cycles have pushed up temperatures. Meanwhile, saplings and other fuel for fires has accumulated in forests. That’s stoking blazes that are undermining long-running efforts to clean the air using environmental regulations. “When we have warm conditions, that tends to draw more moisture out of vegetation,” said John Abatzoglou, a geographer at the University of Idaho who studies climate change and wildfires. “It tends to accelerate the rate at which vegetation dries up and becomes receptive to igniting and carrying fire.” Wildfire smoke can travel hundreds of miles and blanket valleys and regions, creating what scientists call smoke waves. Smoke waves are pulses of bad air caused by fires that linger stubbornly for days, similar to heat waves. Smoke contains chemicals from burning rubber and homes. It can also worsen ozone pollution. And it’s filled with tiny particles known as PM2.5, which can lodge inside lungs, trigger coughing, worsen diseases like asthma, and lead to long-term damage including cancer. 

California will burn until it rains — and climate change may keep future rains away - Wildfires are spreading unchecked across Southern California, adding more infernos to the state’s worst fire season on record. A warm, dry fall in Southern California and strong offshore winds combined to create dangerous fire conditions that will probably get worse. As the winds continue to blow, a dome of warm, high-pressure air is forming over the West Coast that could keep California dry and flammable for weeks to come.  Hot, dry winds blowing up to 70 miles per hour across Southern California are fanning the flames, but those aren’t unusual for December, says Daniel Swain, a climate scientist at the University of California Los Angeles and writer of the Weather West blog. But something unusual is happening: Southern California’s warm winter dry spell, Swain says. “By this time of year, usually, there’s been some rain that’s wetted things down,” he says in a telephone interview, speaking over the Santa Ana winds howling in the background. “It’s just as dry as it was in the summer months.”   California gets most of its rain between October and May from storms that roll in from the Pacific, riding a highway of strong winds in the upper atmosphere called the jet stream. By now, LA should have been sprinkled by about two inches of rain, National Weather Service meteorologist John Dumas told the LA Times. But so far it’s only seen about 5 percent of that, amounting to about one-tenth of an inch. Burbank, California, has seen even less, says National Weather Service meteorologist David Sweet.  “We’re quite parched,” Sweet says.  Update: another day, another unbelievably dry forecast for the West Coast. This is a 16-day precipitation accumulation map from GFS model, which suggests that the next 16+ days could be *completely dry* across all of California, Oregon, and Washington!#CAwx #ORwx #WAwx #BCwx pic.twitter.com/pO169CuHl2  — Daniel Swain (@Weather_West) December 4, 2017  Storms in the jet stream can get diverted by high-pressure bubbles of warm air. A version of this phenomenon called an "atmospheric ridge" is to blame for Southern California's current dry spell. This is the same atmospheric phenomenon that squatted over the state for three winters in a row during California’s record-setting, five-year drought.  Even worse news: these atmospheric ridges are getting more common — possibly thanks to human-caused global warming, Swain and his colleagues reported in a 2016 study.

100,000 Still Stranded Amid California Fires; Giant Thomas Fire Only 20% Contained --In an unexpected run of good fortune, a shift in the powerful winds that have fanned the SoCal wildfires over the past week and a half has pushed the Thomas Fire – the largest of the six uncontained blazes – away from nearby communities while also clearing the air of smoke, improving visibility for the beleaguered firefighters working tirelessly to suppress the flames. Meanwhile, further south, firefighters have managed to achieve upwards of 90% containment for the Rye, Lilac and Creek Fires:

Here’s a live feed of the Thomas Fire:

California fires have destroyed 1,000 structures -In a hopeful sign, thousands of firefighters were making headway Tuesday against the vast Thomas Fire in Southern California, with winds decreasing to 15 to 25 mph and the Santa Ana wind event beginning to wane.The blaze, which is larger than New York City, was about 20% contained, according to the California Department of Forestry and Fire Protection, known as Cal Fire. In addition to diminishing winds, "red flag warnings" are now confined to the mountains of Los Angeles and Ventura counties and cover just over 1 million residents.At the peak of the wildfires last week, the warnings -- which signal extreme fire danger -- covered nearly 20 million people.The outlook for rain, however, remains grim. It's expected to stay dry for at least seven days, and another significant wind event could develop by next weekend, CNN senior meteorologist Dave Hennen said.The wind was cooperating with firefighters Monday and pushing the fire away from nearby communities, Santa Barbara County fire spokesman Mike Eliason told CNN. The breezes had also cleared the air somewhat, leading to improved visibility for fire crews. "It's still not great. It's bad, but it's a better bad," Eliason said.  “You want the breeze to clear the air, but you don't want the breeze to fuel the fire," he said. "Hope springs eternal. Every day we're going to hope that this (is) progressing and getting closer and closer of being put to bed. But right now we're going to need some rain, and the long-range forecast doesn't show that."  The Thomas Fire is one of six major wildfires torching Southern California. The fires have destroyed more than 1,000 structures since igniting.  The blazes vary in size, but together, they are larger than the cities of New York and Boston.

More Victims of the California Wildfires: Avocados and Lemons - NYT — The fire that rampaged through the Brokaw Ranch in Ventura County last week was fast, furious and unstoppable, driven by winds gusting at 70 miles an hour. Flames raced through the chaparral, setting ablaze 60-foot-tall trees whose burning embers flew into the heart of the avocado orchard. “We lost about 80 percent of our avocado crop,” said Ellen Brokaw, whose family farms 200 acres in Santa Paula and supplies restaurants and national supermarket chains. The wildfires in Southern California have charred hundreds of thousands of acres and destroyed thousands of structures. They have also taken a toll on agriculture, a $45 billion industry in California that employs more than 400,000 people statewide. The Thomas fire, which has now spread from Ventura County into Santa Barbara County, struck the biggest avocado- and lemon-producing region in the United States. It is too early to know the full extent of the damage because much of the wildfire zone is still closed off or enveloped in haze. The fire is capricious and, as with the structures that it damaged, its flames often hurtle through one stretch of land while jumping over an adjacent plot.  Avocado orchards are particularly vulnerable: They line hillsides, which were in the path of the fire, and their dropped leaves collect on the ground, providing perfect tinder. Lemon groves tend to be located on flatter ground, and the trees do not shed their leaves. But they were battered by the same winds that spread the fires, blowing loose or badly scarring the fruit. Lemons cannot be sold once they have hit the ground, and damaged lemons suffer in quality and value. “It will take days, weeks or longer to assess the loss,” said John Krist, chief executive of the Ventura County Farm Bureau. “What we know is, there’s a lot of fruit on the ground.”

California Fire Map Update: Photos Of Destruction Across Los Angeles, Santa Barbara and Ventura Counties - The original blaze in Southern California that sparked a series of aggressive wildfires across the region and forced thousands to flee their homes remains a Dallas-sized threat, as firefighters have only contained 25 percent of the fire. As of Wednesday morning, the Thomas Fire was the fifth-largest fire in California history, and it continues to elude containment as it enters its second week. It has spanned more than 370 square miles—bigger than Dallas even—since beginning on December 4 and remains the strongest blaze for firefighters to battle in Ventura and Santa Barbara counties. The multiple wildfires that have charred Southern California are slowly being extinguished, signaling a clear turning point for firefighters who have fought the blazes fueled by hurricane-level winds, keeping them away from California's most populated regions. The evacuation orders mandated throughout the area were mostly lifted as of Tuesday evening, allowing Californians to return to their neighborhoods and assess the wildfire damage.  The Skirball Fire, which terrorized Bel-Air and caused the University of California, Los Angeles, to cancel classes, is 90 percent contained, officials said. It has charred less than one square mile of land and damaged at least 18 structures in Los Angeles County. The Creek Fire, which has burned 24 square miles in Los Angeles County, is at 98 percent containment, but officials warn that any fuel in the region combined with strong winds could cause the fire to once again go out of control.  The Lilac Fire, which was sparked in San Diego County, is 95 percent contained after affecting more than six square miles in the region. The Rye Fire in Los Angeles County was completely extinguished Tuesday, officials said. As Californians are cleared to return home, significant damage awaits some people. Photos of charred homes and possessions have been shared.

Thomas Fire grows to 238,500 acres, now 30 percent contained   - The Thomas Fire grew to 238,500 acres on Wednesday and crews were able to increase containment to 30 percent, according to an update from Cal Fire.Since the fire began nine days ago, 930 structures have been destroyed, 202 have been damaged and 18,000 remain threatened. More than 8,000 fire personnel are working to contain the blaze burning across Ventura and Santa Barbara counties. Cal Fire reported some positive news Wednesday evening, as the mandatory and voluntary evacuation orders and warnings were lifted south of Highway 101 to the ocean, between the Santa Barbara and Ventura county line and Highway 33.Mandatory and voluntary evacuation orders for the City of Ventura have been lifted, as well, with the exception of the areas north of Foothill Road between Cobblestone Drive and North Kimball Road. Those areas will remain under a mandatory evacuation order, Cal Fire said.The blaze is still threatening the communities of Santa Barbara, Carpinteria, Summerland, Montecito and surrounding areas, according to Cal Fire.The Lilac Fire burning in San Diego County remained at 4,100 acres Wednesday, and crews increased containment to 96 percent. The Creek Fire burning in Los Angeles County also held steady at 15,619 acres, and is 98 percent contained.

The Thomas Fire is now the fourth-largest in California history -  The Thomas Fire grew to 242,500 acres Wednesday night into Thursday, making it the fourth largest fire in California’s history.Crews kept containment at 30 percent.  Since the fire broke out Dec. 4, 972 structures have been destroyed, and another 221 have been damaged. 18,000 remain threatened. Cal Fire expects “most significant fire growth” to happen on the west, while dangerous fire conditions — high fuel, low humidity and above-average temperatures — continue the fire’s spread on the north and east, as well. Fire officials said this week that the Thomas Fire may not be stopped until it hits burn scars from recent blazes.

’This fire is a beast’: Massive inferno keeps growing despite epic battle by firefighters - LA Times: More than a week after the Thomas fire ignited in Ventura County, destroying hundreds of homes and displacing thousands as it grew into a massive inferno, firefighters are now in a race to protect the pristine coastal communities of neighboring Santa Barbara County before a shift in powerful winds forecast for this weekend. Across the mountain ridges above Santa Barbara, Summerland and Montecito, firefighters Wednesday were building containment lines, clearing brush, digging breaks and setting small backfires to burn fuel, all in an effort to create barriers to stop the forward march of the fire.Conditions so far this week have been favorable, allowing firefighters to attack the flames on the southwestern flank of the blaze as it moves west toward the Santa Ynez Mountains. But the National Weather Service was forecasting sundowner winds blowing southeast at up to 35 mph Friday night, followed by Santa Ana winds Saturday that, at up to 45 mph, could steer the fire toward the southwest. “When the wind starts pushing it, we can throw everything we have at it and it’s not going to do any good,” Mark Brown, an operations section chief for the California Department of Forestry and Fire Protection, told Santa Barbara residents Wednesday night. The stakes are high. If the fire moves into Santa Barbara and Montecito, nearly a quarter million residents and 62,000 structures worth $46 billion would be at risk.

Thomas fire rages amid longest red flag warning on record - LA Times: As crews battling the deadly Thomas fire girded for a difficult weekend of firefighting, Los Angeles and Ventura counties ended their 12th consecutive day of red flag fire warnings Friday — the longest sustained period of fire weather warnings on record. “We put out plenty of red flag warnings, but we haven’t seen them out 12 days in a row. That’s unusual,” said National Weather Service meteorologist Curt Kaplan. “This has been the longest duration event that we have had a red flag warning out without any breaks.” The winds died down a bit Friday morning. Red flag warnings were instituted by the weather service in 2004 and are intended to alert fire agencies to hot, dry and windy conditions that foster wildfires. Winds blowing through Southern California continue to be temperamental, posing challenges for firefighters battling the Thomas fire, which claimed the life of apparatus engineer Cory Iverson, 32, on Thursday. Ten days after the fire began near Thomas Aquinas College, the wildfire has scorched 252,500 acres and is now the fourth-largest since the state began keeping formal records in 1932.The fire, which straddles the border of Santa Barbara and Ventura counties, is so large that its eastern and western fronts are influenced by entirely different wind patterns and terrain. In many ways, it’s as if firefighters are battling two separate fires some 40 miles apart. On the eastern flank of the fire, where there is a strong northeast wind, there are wind speeds of about 25 to 35 mph. However, winds in the Ventura area are expected to die down by late Friday morning, “which should help the firefighters,” Kaplan said.

California's Thomas wildfire enters its second week – in pictures -  Thomas fire, the largest of the blazes burning in southern California, has engulfed more than 900 buildings, including at least 700 homes, since it broke out on 4 December. The fifth biggest wildfire in state history, Thomas has forced thousands of people to flee the area. Officials are warning that the threat could increase if unpredictable winds rise.

Incredible satellite photos of Southern California's wildfires show the disaster's evolution from space - While the most destructive wildfire season in California's history slogs on, satellites are recording the devastation from space.California's latest group of blazes began with theThomas fire in Ventura County on December 4. Since then, at least six other large fires sparked across the Southern California counties of Los Angeles (Creek, Rye, and Skirball fires), San Bernardino (Little Mountain fire), San Diego (Lilac fire), and Riverside (Liberty fire).The Thomas fire in Ventura County is by far the largest at more than 230,000 acres in size, and it's only about 15% contained as of Monday morning. It continues to burn along with four other fires that are spreading due to strong Santa Ana winds, which peak during December and January.The new blazes have triggered the evacuation of almost 100,000 people, killed at least one person, razed some 1,000 buildings, and scorched more than 250,000 acres of land. This ongoing disaster in Southern California also joins the deadly wildfires across Northern California in October that killed 42 people, destroyed 9,000 structures, and may take the state years to recover from.Thick smoke and intense heat make it difficult for low-flying aircraft to capture the extent of a wildfire's damage. However, a few satellites with high-power cameras and special sensors offer unique and detailed views of the evolving disaster from space. Here's what they've recorded so far, plus a few incredible images taken by astronauts in space:

Thomas Fire grows to 256,000 acres; ‘wind event’ expected Saturday morning -- The Thomas Fire grew to 256,000 acres on Friday and remained 35 percent contained, according to an update from Cal Fire. Since the fire began 12 days ago, 1,009 structures have been destroyed, 240 have been damaged and 18,000 are still threatened. More than 8,300 fire personnel have been assigned to the blaze, which on Thursday became the fourth-largest wildfire in California history.With gusty overnight winds forecast for the coastal mountains on Saturday morning, firefighters are preparing for perhaps their biggest test in the battle to stop the Thomas Fire from burning farther west and continuing to menace communities on Santa Barbara County’s South Coast.The primary battle is being fought in San Ysidro Canyon behind Montecito, where hand crews on Friday spent the day carving out a containment line up the rugged west side of the canyon to Camino Cielo on the ridge of the Santa Ynez Mountains.They were assisted by a fleet of helicopters dropping loads of fire retardant on the dense and extremely dry vegetation.“Our direct attack is working,” said Chris Childers, a battalion chief with the Santa Barbara County Fire Department. “We have gotten to the creek. (The fire) has not crossed it.”What is worrying incident commanders on the 256,000-acre blaze is a “wind event” expected to hit in the early morning hours Saturday, bringing strong northwest winds that could drive the flames downslope into populated areas. The National Weather Service issued a Red Flag Fire Weather Warning for the Santa Barbara County mountains beginning at 2 a.m Saturday, and continuing until 10 p.m. Saturday.

Thomas Fire jumps San Ysidro Canyon; evacuations ordered for Montecito, Summerland --Efforts by firefighters to hold the Thomas Fire in San Ysidro Canyon and stop the spread of the giant wildfire failed Saturday as gusty winds propelled the flames farther west.There is a mandatory evacuation notice for the Montecito and Summerland area north of Alameda Padre Sierra/South Salinas Street and Highway 101, south of 192, east of Mission Canyon Road and west of Hot Springs/Summit Road. Cal Fire reports that the blaze has grown to 259,000 acres and is 40 percent contained. A list of evacuations as of 10:15 a.m.: (list)    A mandatory evacuation order is in place for parts of Santa Barbara County. (Saturday, Dec. 16, 2017) The fire has moved through Hot Springs Canyon to Cold Springs Canyon, and was burning on Montecito Peak, according to Jude Olivos, a spokesman for Thomas Fire incident command.Heavy flames, fanned by winds gusting to 65 mph, were visible from Montecito’s Upper Village, and a fleet of fire engines remained in position to protect homes and other structures in Montecito. “This thing is just coming down off the hills,” Capt. David Zaniboni of the Santa Barbara County Fire Department told Noozhawk.Firefighters had hoped to make a stand in San Ysidro Canyon after carving a containment line up the rugged mountainside, but the winds proved too much. The flames were moving rapidly toward the huge fuel break that crews have established east of Gibraltar Road. Gusty conditions were making it difficult for helicopters to operate. Highway 154 was reportedly completely shut down, but that could not immediately be confirmed.

US flood risk 'severely underestimated' - BBC News: Scientists and engineers have teamed up across the Atlantic to "redraw" the flood map of the US. Their work reveals 40 million Americans are at risk of having their homes flooded - more than three times as many people as federal flood maps show. The UK-US team say they have filled in "vast amounts of missing information" in the way flood risk is currently measured in the country. They presented the work at the 2017 American Geophysical Union meeting. This mapping project includes areas across the US that are on river floodplains and those at risk of flash floods associated with heavy rainfall. It focuses on rivers and does not include areas at risk of coastal flooding.  One of the researchers spoke to BBC News ahead of this international gathering of Earth and planetary scientists. He said the new maps were based on "cutting edge science", simulating every river catchment area.The biggest issue, Mr Wing explained, is the how incomplete the network of river gauges is in the US. So he and his colleagues created a model based on decades of analysis of the way in which river systems behave.  This model "fills in those data gaps," he told BBC News, meaning the probability of flooding can be worked out in every river catchment area. Combining those probabilities with population and land-use data, Mr Wing said, revealed that "40 million people and $5.5 trillion worth of assets" are within an area that has a 1% chance of flooding each year.  This area with 1% chance of flooding every year - also called the 100-year floodplain - is nationally recognised as the area of high flooding risk. FEMA charts this area on its official flood hazard map, which is used to inform a national flood insurance programme.

Investigation: Actual Death Toll From Hurricane Maria Is Close to 1,000 in Puerto Rico -  The official death toll from Hurricane Maria has risen to 64, Puerto Rican authorities announced Saturday, factoring in two additional "indirect" deaths from the storm to previously announced numbers.   However, the official number of deaths, which critics say is suspiciously low considering the damage from the storm, is coming under some scrutiny: both a Center for Investigative Journalism report published Thursday and a New York Times review of mortality data published Friday estimate the actual death toll to be closer to 1,000.   These two reports follow earlier investigations from CNN , Vox and Buzzfeed that also show high death rates as a result of the storm. FEMA also reported Saturday that aid to the island has topped $1 billion.  As reported by CNN The Puerto Rican and federal governments are creating the false impression that the emergency is over, said Cayey Mayor Rolando Ortiz. "They just want to have a good story," he said, "to make things look positive for them." The reality, he said, is deaths continue—and they're largely unacknowledged or they're slow to be reported by Puerto Rico.

Shocking Video Shows What Everyday Life Is Like In Puerto Rico Now - In Puerto Rico, everything has changed since Hurricane Maria struck nearly 3 months ago. Many people have no running water. And if they do, it can’t be consumed without boiling. There’s no electricity in many regions.  Supplies are scarce.  I’ve written about the SHTF aftermath in Puerto Rico, both the day after the storma week after, and a couple of months later. But while there is a lot of good information in all those articles, it’s just words on a page. The video below brings it to life. This is what life looks like for people who have just watched everything be turned upside down by Mother Nature.

Mount Agung erupts in Indonesia: Is it a climate event? - Mount Agung, a massive volcano on the island of Bali in Indonesia began erupting on November 21, spewing ash into the air and causing the evacuations of thousands. It was the first major eruption of the volcano since 1963, and it’s probably not done yet. Scientists cannot rule out an even more violent eruption in the near future.  The volcano started erupting during the end of November after awakening from a 54-year nap in September. The eruptions followed a week of increased seismic activity that triggered evacuation warnings. The first eruption to include lava occurred on November 25 and sent ash and a mixture of toxic gases at least four miles skyward. While things have quieted down in early December, the ground continues to shake, which indicates a still active volcano that is not yet ready to call it quits.  The fear is that the shaking portends an eruption similar in scale to the last time Mount Agung roared, the major eruption of 1963. Back then, the eruption of Mount Agung killed more than 1,000 people and flung ash and gases like sulfur dioxide into the stratosphere, 59,000 feet up. While the ash darkened the skies for miles, it was sulfur dioxide’s presence in the stratosphere that caused global temperatures to cool slightly for several years after.  Once in the stratosphere, sulfur dioxide interacts with water to make tiny droplets called sulfate aerosols. These aerosols serve as a perfect device to reflect the sun’s light away from the surface. Less sunlight reaching the surface means cooler temperatures.  These sulfate aerosols can remain in the stratosphere for several years until the droplets grow large enough to fall.   Eruptions in the tropics can lead to sulfate aerosols that are easily spread across both the northern and southern hemisphere, leading to global-scale cooling of the surface. While the surface cools, the stratosphere actually warms.  Volcanoes farther away from the tropics mean more regional impacts.

Conservation group launches $1M ad campaign hitting Trump monument decision | TheHill - A conservation group is launching a $1 million television and radio advertisement campaign targeting three House Republicans over President Trump’s decision to shrink monument protections in Utah. The Western Values Project's ads will go after Reps. Greg Walden (R-Ore.), Jaime Herrera Beutler (R-Wash.) and Martha McSally (R-Ariz.).The ads tell viewers about Trump’s executive order shrinking the Bears Ears and Grand Staircase-Escalante National Monuments in Utah, and highlights potential public land policy changes in the three states it is set to air in.  The group calls on viewers to tell Walden, Beutler and McSally to “stop the attacks on public lands because your American birthright is not for sale.” The ads are some of the first to come out since Trump’s Dec. 4 announcement shrinking Utah’s monuments. Trump’s decision, while popular with conservatives, has angered environmentalists and public lands activists who warn it could open the door to more development on land owned by the federal government.

Uranium firm urged Trump officials to shrink Bears Ears National Monument    A uranium company launched a concerted lobbying campaign to scale back Bears Ears National Monument, saying such action would give it easier access to the area’s uranium deposits and help it operate a nearby processing mill, according to documents obtained by The Washington Post. Interior Secretary Ryan Zinke and top Utah Republicans have said repeatedly that questions of mining or drilling played no role in President Trump’s announcement Monday that he was cutting the site by more than 1.1 million acres, or 85 percent. Trump also signed a proclamation nearly halving the Grand Staircase-Escalante National Monument, which is also in southern Utah and has significant coal deposits. “This is not about energy,” Zinke told reporters Tuesday. “There is no mine within Bears Ears.” But the nation’s sole uranium processing mill sits directly next to the boundaries that President Barack Obama designated a year ago when he established Bears Ears. The documents show that Energy Fuels Resources (USA) Inc., a subsidiary of a Canadian firm, urged the Trump administration to limit the monument to the smallest size needed to protect key objects and areas, such as archeological sites, to make it easier to access the radioactive ore. In a May 25 letter to the Interior Department, Chief Operating Officer Mark Chalmers wrote that the 1.35 million-acre expanse Obama created “could affect existing and future mill operations.” He later noted, “There are also many other known uranium and vanadium deposits located within the [original boundaries] that could provide valuable energy and mineral resources in the future.” 

Grand Canyon Uranium Mining Ban Upheld by Appeals Court - The Havasupai Tribe and a coalition of conservation groups praised the decision Tuesday by the U.S. 9th Circuit Court of Appeals to uphold the Department of the Interior's 20-year ban on new uranium mining claims across 1 million acres of public lands adjacent to the Grand Canyon. The court ruled that the ban, adopted in 2012, complies with the Constitution and federal environmental laws, and that the protected area was not too large, as plaintiff mining companies had argued. The ban protects the aquifers and streams that feed the Colorado River and the Grand Canyon from toxic uranium-mining waste pollution and water depletion. The Havasupai Tribe, Grand Canyon Trust , Sierra Club , Center for Biological Diversity and National Parks Conservation Association intervened in the case in 2013. The groups and the Department of Justice won a 2014 decision by U.S. District Court in Arizona, which upheld Interior's 2012 uranium mining withdrawal. Mining companies appealed the decision to the 9th Circuit.  Unfortunately the court also rejected a challenge to the Canyon Mine, a uranium mine located on the Kaibab National Forest six miles south of Grand Canyon National Park. The court's decision allows Energy Fuels Inc. to mine without initiating or completing formal tribal consultations and without updating an obsolete federal environmental review dating to 1986.

Just 20 percent of e-waste is being recycled -- Opting to handle your bills online keeps a lot of paper out of the bin, but the devices you use to go online eventually die anyway. If this “e-waste” ends up in a landfill, the energy and materials that went into manufacturing and delivering those devices are lost. And besides being unsustainable, disposal can expose people to hazardous metals and compounds. Apart from a story here and there about a new e-waste recycling project, it’s hard to get an idea of just how much e-waste is getting tossed around the world. A new report from the United Nations’ International Telecommunication Union helps paint a picture by providing some global statistics. Altogether, the report estimates that nearly 45 million tons of electronics were thrown out in 2016—and only about 20 percent of it is known to have been recycled. The report puts the value of the raw materials in that 45 million tons of e-waste at about $55 billion ($9 billion from smartphones alone), but most of that waste isn’t being recovered. There are, of course, huge differences in e-waste from one region to another. Africa, for example, accounted for only about five percent of the total e-waste generated—roughly zero of which was recycled. Europe and Russia combined to generate about 28 percent of the world’s e-waste, but recycled it at a higher average rate of 35 percent. That’s partly due to recycling rates of around 70 percent in Switzerland, Sweden, and Norway. The United States produced 14 percent of e-waste and recycled less than a quarter of it—just above the global average. China, which has four times the population of the US, came in at about 16 percent of the world’s e-waste, with about 18 percent getting recycled. The trend for e-waste is, of course, upward, with about four percent more being produced every year. The report highlights the tremendous scale of changes in the use of technology over the last decade. In 2007, only about 20 percent of the world’s population was online, but that number has since increased to nearly 50 percent. That’s more people using more devices, while recycling efforts lag behind.

Electronic Waste Study Finds $65 Billion in Raw Materials Discarded in Just One Year -  The amount of electronic waste around the world grew to a record 45 million tons in 2016, according to a United Nations-backed study released on Wednesday. To put that in perspective, the weight of last year's e-waste was equivalent to about 4,500 Eiffel Towers, according to the study by the UN university, the International Telecommunication Union and the International Solid Waste Association. The amount of e-waste—defined as anything with a plug or a battery—rose by eight percent since 2014, the time of the last assessment. The study also found that raw materials thrown out as e-waste—metals such as gold, silver, copper, platinum and palladium— were worth $64.61 billion in 2016. But despite this economic incentive, only 8.9 million tons of e-waste were recovered. "Only 20 percent [of e-waste] is going in the official collection and recycling schemes," Ruediger Kuehr, head of the UN University's Sustainable Cycles Programme, told Reuters . He noted that the amount of e-waste is more shocking considering that 67 countries, covering two-thirds of the world's population, has legislation for processing e-waste. In 2016, the worldwide e-waste average was 13.5 pounds per person, or 54 pounds for a family of four. But in the U.S. or Canada the figure was 3.3 times higher. And the global trend is surging. By 2021 there will be a 17 percent increase, making e-waste the fastest growing part of the world's domestic waste stream, according to the study. Put simply, the study found that rising incomes and falling prices on electronic goods was driving the rising amount of e-waste. Although countries widely vary in recycling capacity, nowhere in the world is equipped to deal with increasing e-waste—there isn't a country that come closes to recycling even half. Europe, at 35 percent, has the highest collection rate, while Australia and New Zealand, two countries that produce the highest e-waste per person at 38 pounds, collect and formally recycle only six percent of their electronics.

Recycling Chaos In U.S. As China Bans ‘Foreign Waste’ -- The U.S. exports about one-third of its recycling, and nearly half goes to China. For decades, China has used recyclables from around the world to supply its manufacturing boom. But this summer it declared that this "foreign waste" includes too many other nonrecyclable materials that are "dirty," even "hazardous." In a filing with the World Trade Organization the country listed 24 kinds of solid wastes it would ban "to protect China's environmental interests and people's health."  The complete ban takes effect Jan. 1, but already some Chinese importers have not had their licenses renewed. That is leaving U.S. recycling companies scrambling to adapt.  Rogue Waste Systems in southern Oregon collects recycling from curbside bins, and manager Scott Fowler says there are always nonrecyclables mixed in. As mounds of goods are compressed into 1-ton bales, he points out some: a roll of linoleum, gas cans, a briefcase, a surprising number of knitted sweaters. Plus, there are the frozen food cartons and plastic bags that many people think are recyclable but are not.  For  decades, China has sorted through all this and used the recycled goods to propel its manufacturing boom. Now it no longer wants to, so the materials sits here with no place to go."It just keeps coming and coming and coming," says Rogue employee Laura Leebrick. In the warehouse, she is dwarfed by stacks of orphaned recycling bales. Outside, employee parking spaces have been taken over by compressed cubes of sour cream containers, broken wine bottles and junk mail. And what are recyclables with nowhere to go? "Right now, by definition, that material out there is garbage," she says. "It has no value. There is no demand for it in the marketplace. It's garbage." For now, Rogue Waste says it has no choice but to take all of this recycling to the local landfill.

 EPA lists 21 toxic Superfund sites that need ‘immediate and intense’ cleanup -  The Environmental Protection Agency released a list of Superfund sites around the country Friday that it said regulators will target “for immediate and intense attention.” The push is part of Administrator Scott Pruitt’s promise to prioritize the decades-old cleanup program, even as the Trump administration shrinks the size and reach of the EPA. The 21 sites highlighted by the agency span the country, from a former tannery site in New Hampshire to a contaminated landfill from the World War II-era Manhattan Project in St. Louis to an abandoned copper mine in Nevada. “By elevating these sites, we are sending a message that EPA is, in fact, restoring its Superfund program to its rightful place at the center of the agency’s mission,” Pruitt said in a statement. “Getting toxic land sites cleaned up and revitalized is of the utmost importance to the communities across the country that are affected by these sites.” The EPA said that it developed the list using sites “where opportunities exist to act quickly and comprehensively.” Notably, the agency also acknowledged that “there is no commitment of additional funding associated with a site’s inclusion on the list.” David Konisky, a political scientist at Indiana University’s School of Public and Environmental Affairs, questioned how EPA put together the list of sites it released Friday. “I do find the rationale for inclusion on the list to be strange,” Konisky, who has written extensively about the Superfund program, said in an email. “The EPA selected sites based on the ability of the Administrator to help achieve an upcoming milestone or site-specific action. This strikes me as mostly about creating a credit-claiming opportunity for Pruitt, rather than prioritizing additional resources to sites where communities face the most significant health risks.” 

Mercury From Industrialized Nations Is Polluting the Arctic—Here’s How It Gets There -- Our work was the most comprehensive investigation to date of how mercury is deposited to the Arctic tundra, a vast northern ecosystem surrounding the Arctic Ocean. Our findings show that the gaseous form of mercury—emitted by coal-burning, mining and other industrial processes in the industrialized world—is being lofted into the region from thousands of miles away. In the Arctic, it is deposited onto tundra soils and ultimately runs off into ocean waters, threatening the region's wildlife and people. Mercury emissions from human activities take several forms that behave differently in the atmosphere Oxidized mercury, notated as Hg(II), generally settles or is rained out of the atmosphere close to emission sources. In contrast, gaseous elemental mercury or Hg(0), remains in the atmosphere for a long time and can travel around the globe.  In the Arctic, high levels of mercury are found in beluga whales, polar bears, seals, fish, eagles and other birds. This means that humans are also affected, particularly the Inuit , who rely on traditional hunting and fishing for food. Exposure to high levels of mercury over long periods can lead to neurological and cardiovascular problems. Scientists have been working for more than two decades to determine how mercury makes its way from industrialized countries to the Arctic.   From our observation site north of Alaska's Brooks Range, we determined that gaseous elemental mercury in the atmosphere is the dominant source of Arctic mercury. We calculated that it accounted for 70 percent of the mercury that finds its way into tundra soil. Previous studies focused mainly on deposition of airborne oxidized mercury. However, we estimate that oxidized mercury accounts for less than one-third of mercury deposition, and deposition by rain and snow for only 2 percent.

Plastic Ocean: From Thriving Ecosystem to Trash Dumpster - In the foreseeable future, the weight of plastic trash in the ocean will be greater than the weight of all fish.Already it’s been estimated by researchers that virtually all shellfish, and one-quarter of all fish, contain traces of plastic.Every year about 300 million tons of plastic are produced and eight million tons wind up in our oceans. That’s the equivalent of over 500 trillion plastic water bottles. If you were to stack these bottles one on top of the other, you would be able to make two full trips from Earth, to the Moon and back.But the problem is not only the millions of water bottles humans consume and discard each hour, but also the plastic we cannot see.Microplastics are considered to be any piece of plastic that is under five millimeters in length. This also includes small particles like fabric and the plastic microbeads used in facial cleansers. These particles are found in our oceans, on our beaches, and pretty much anywhere else there’s water. The plastics that wash up on our beaches or end up in massive floating garbage patches come from bottles, bags, containers, straws, shipping materials and other quick-use products that break down over time and in turn become a home for harmful substances. “Toxic chemicals adhere to plastics very easily,”  “Even in the ocean, PCBs, DDT, pesticides, flame retardants, mercury and other organic pollutants can be absorbed by plastic in the ocean.” It is believed that these chemicals can be found in almost all humans, including newborn babies. We as producers, consumers and disposers, are directly to blame. More than half the plastic we use everyday, according to the Plastic Oceans Foundation, is used only once.

US Carbon Emissions (graph) - The above shows US carbon emissions by sector, with some further breakdown by the dominant fuel types.  The good news is that US carbon emissions have declined almost 15% since the peak in the mid 2000s, and still seem to be declining as of 2016, the last year of data available.  The mid-2000s oil price shock appears to have had lasting and beneficial effect on US energy efficiency.  It's not as much progress as we need to avoid serious climate damage, but it's something.Overlaid on each sector is a summary statistic to give a flavor of the different contributions.  For example, the Census Bureau says there are about 118 million housing units in the US in 2015.  Almost all of them contribute to residential carbon emissions to some degree.  I have overlaid that number on the reddish residential carbon emissions.  I like this graph because to me it summarizes the nature of the challenge.  I believe climate change will be defeated "under the hood" and "down in the basement".  Every house has a heating system that needs to become a fossil fuel free one, every commercial building likewise, every car has an engine that needs to be electric or hydrogen, not gas or diesel.  It's a very concrete, tangible problem.  But mostly affecting dirty looking machines in hidden places that need to be changed.Data Sources: Emissions data from EIA Nov 2017 Monthly Energy Review, Table 12.  Household count from Census Bureau American Household Survey, 2015.  Vehicle count from ORNL Transportation Energy Data Book, Chapter 3.  Commercial building count from EIA Commercial Buildings Energy Consumption Survey, linearly extrapolated from 2012 to 2017.  Factory count from Census Bureau, Statistics of US Business, number of manufacturing establishments in 2015.

The EPA Tries to Turn a Blind Eye to Carbon Emissions. The Courts Can Stop It. - By Senator Sheldon Whitehouse -- In the recent Frontline documentary, War on the EPA, the CEO of the Murray Energy Corporation — the largest coal mining company in the United States — brags that he had given the Trump administration a three-page action plan on rolling back environmental regulations. Less than a year into his term, the president and his officials had already completed the first page, Murray Energy Corporation’s Bob Murray says in the film. Indeed, the administration has gone straight to work undoing environmental safeguards: reevaluating emission standards for cars and trucks, pressing for the Keystone XL tar-sands pipeline, disbanding science advisory committees, lifting the moratorium on federal coal leasing, trying to expand offshore drilling, and opening national monuments and marine sanctuaries to energy companies. The EPA is working to eliminate rules on the leaking and flaring of methane and has rescinded requirements for reporting methane emissions. It is also stalling on monitoring carbon pollution. And, of course, the president announced his intention to withdraw the U.S. from the Paris climate agreement. At the top of Murray’s wish list, Frontline reports, is repealing the Clean Power Plan, the 2015 EPA rule to reduce carbon dioxide emissions from American power plants. The benefits of the Clean Power Plan to public health, the climate, and the economy outweigh the costs of energy sector compliance by $26 billion to $45 billion every year, according to the EPA’s own calculations. In order to rescind the Clean Power Plan, EPA Administrator Scott Pruitt has to make those benefits disappear. So he cooked the books, using two tricks: The first derives from the fact that today’s carbon pollution causes harm and financial losses later — often many years after pollution is emitted. In financial accounting, future costs and benefits are balanced against present costs and benefits using a “discount rate.” The theory stipulates that it’s more valuable to receive a million dollars now than a million dollars, say, 20 years from now. Pruitt’s second trick is to count only the harm from carbon pollution generated and accrued within the United States’ borders. In fact, we suffer from other countries’ emissions, and they suffer from ours. But if each country only counts its own emissions and its own harms, guess what happens? All the cross-border impacts never get counted. They still takes place in real life, but they vanish from the ledger.

Warmer Arctic is the ‘new normal’ -- A warming, rapidly changing Arctic is the "new normal" and shows no signs of returning to the reliably frozen region of the past. This is according to the US National Oceanic and Atmospheric Administration's Arctic Report Card. Director of the administration's Arctic Researcher Program, Dr Jeremy Mathis, said the region did a great service to the planet - acting as a refrigerator."We've now left that refrigerator door open," he added. Dr Mathis was speaking at the annual American Geophysical Union meeting in New Orleans, where Noaa presented its annual summation of Arctic science.  This is the 12th report the administration has produced. And although it pointed to "a few anomalies" in a recent pattern of warming in the Arctic region, Dr Mathis said: "We can confirm, it will not stay in its reliably frozen state.""The thing I took that had the most resonance for me was we're able to use some really long-term records to put the Arctic change into context - going back more than 1,500 years. "What's really alarming for me is that we're seeing the Arctic is changing faster than at any rate in recorded history."The speed of change, Dr Mathis added, was making it very hard for people to adapt. "Villages are being washed away, particularly in the North American Arctic - creating some of the first climate refugees," he said.  "And pace of sea level rise is increasing because the Arctic is warming faster than we anticipated even a decade ago."

Warming of the Arctic is 'unprecedented over the last 1500 years,' scientists say - The Trump administration’s mixed views on climate change notwithstanding, a group of federal scientists on Tuesday released a stark report on the warming at the top of the planet, suggesting that it is unparalleled in more than a millennium.“The Arctic is going through the most unprecedented transition in human history, and we need better observations to understand and predict how these changes will affect everyone, not just the people of the north,” Jeremy Mathis said in a presentation at the 2017 meeting of the American Geophysical Union in New Orleans. Mathis is director of the Arctic Research Program of the National Oceanic and Atmospheric Administration.Mathis was unveiling the 2017 Arctic Report Card, an annual NOAA report that documents the changing conditions for floating sea ice, the glaciers of Greenland, the thawing permafrost of the high latitudes, and more.Mathis was introduced by retired Rear Adm. Tim Gallaudet, the acting administrator of NOAA, who said the report is important for two reasons that “directly relate to the priorities of this administration” — namely, its implications for national and economic security.Gallaudet, a Trump appointee, brought up the example of naval submarines in the Arctic. He said operators had told him that the environment there is “the most hazardous [that] they’ve ever reported” because of the increased mobility of ice floes.The new document is peer-reviewed and was produced by 85 scientists. It is released annually, and it is the first time it has been released during Donald Trump’s presidency (the last release was in December 2016, post-election of Trump but pre-inauguration). It finds that although the warming in the Arctic was not as stark in 2017 compared with a record 2016, the region continues to warm up at a pace that is roughly double that of the rest of the planet.

Greenland's ice sheet is driving global sea level rise, and one section is melting 80% faster -  Average temperatures around the world may be slowly ticking upward, but their effects on the environment can be sharp and quick.  Earlier this week, we learned that Arctic sea ice extent is declining at its fastest rate in 1,500 years. On Wednesday, scientists reported that in 2003, the ice sheet on Greenland suddenly began melting at a much faster rate.  Greenland’s ice is hugely important for the planet. The sheet of ice that covers 660,000 square miles is more than a mile thick and has a volume of 684,000 cubic miles. If it all melts, it would raise global sea levels by 25 feet. On Thursday, scientists published a new map of the land mass beneath Greenland’s ice, showing that the ice is deeper than previously thought, so losing it all would lead to an additional 2.7 inches of sea level rise above past estimates. Already, about 269 billion tons of ice have melted away each year since 2002.  In a paper published Wednesday in the journal Science Advances, scientists reported that in one catchment in Southwestern Greenland, the melt rate surged 80 percent between 003 and 2014 compared to the 26-year period beforehand, hinting at changes in the overall melt rate of the ice sheet. It’s yet another sign that the rising average temperatures of climate change across the planet are not just having a gradual effect on ecosystems. Some of the biggest changes are abrupt, massive, and have already happened.

Seas may rise by 8 feet this century, inundating land that's home to 236 million people - The amount of sea level rise that many of us will experience in our lifetimes may be more than double what was previously anticipated, unless we sharply curtail greenhouse gas emissions, according to a new study that factors in emerging, unsettling research on the tenuous stability of the Antarctic Ice Sheet.  Importantly, the study highlights that cuts we could still make to greenhouse gas emissions during the next several years would significantly reduce the possibility of a sea level rise calamity after 2050.  Published Wednesday in the open access journal Earth's Future, the study is the first to pair recently discovered mechanisms that would lead to the sudden collapse of parts of the Antarctic Ice Sheet, such as the disintegration of floating ice shelves and mechanical failure of tall ice cliffs facing the sea. The study also goes a step further by showing how the new projections could play out city by city around the world. Researchers from several institutions, including Rutgers University, Princeton, Harvard, and the nonprofit research group Climate Central found that sea level rise predictions that incorporate a faster — even sudden — disintegration of huge parts of the Antarctic Ice Sheet would yield far more dire projections.  This is especially the case when compared to the consensus put forward by the U.N. Intergovernmental Panel on Climate Change (IPCC) in 2014.  The IPCC did not incorporate the possibility that the Antarctic Ice Sheet could become unstable as air and sea temperatures warm, and essentially crumble into the sea, in rapid succession. 

Why remote Antarctica is so important in a warming world -- Recent research is casting new light on the importance of the southernmost continent, overturning centuries of misunderstanding and highlighting the role of Antarctica in how our planet works and the role it may play in a future, warmer world.  What was once thought to be a largely unchanging mass of snow and ice is anything but. Antarctica holds a staggering amount of water. The three ice sheets that cover the continent contain around 70% of our planet’s fresh water, all of which we now know to be vulnerable to warming air and oceans. If all the ice sheets were to melt, Antarctica would raise global sea levels by at least 56m. Where, when, and how quickly they might melt is a major focus of research. No one is suggesting all the ice sheets will melt over the next century but, given their size, even small losses could have global repercussions. Possible scenarios are deeply concerning: in addition to rising sea levels, meltwater would slow down the world’s ocean circulation, while shifting wind belts may affect the climate in the southern hemisphere. In 2014, NASA reported that several major Antarctic ice streams, which hold enough water to trigger the equivalent of a one-and-a-half metre sea level rise, are now irreversibly in retreat. With more than 150m people exposed to the threat of sea level rise and sea levels now rising at a faster rate globally than any time in the past 3,000 years, these are sobering statistics for island nations and coastal cities worldwide.  Recent storm surges following hurricanes have demonstrated that rising sea levels are a future threat for densely populated regions such as Florida and New York. Meanwhile the threat for low-lying islands in areas such as the Pacific is immediate and acute.

President Just Signed Bill That Says Climate Change a National Security Risk, But Does He Know That? - President Donald Trump signed the National Defense Authorization Act into law Tuesday. The act would require the Pentagon to do a report on how military installations and overseas staff may be vulnerable to climate change over the next 20 years.  The following language was included in the act:   Climate change is a direct threat to the national security of the United States and is impacting stability in areas of the world both where the United States Armed Forces are operating today, and where strategic implications for future conflict exist.  Does President Trump know that with a stroke of his pen he just confirmed what climate scientists and military officials have been saying for years: Climate change is a major threat to U.S. national security and our armed forces overseas? The reality is that climate change couldn't care less about political party affiliation, which is why legislators on both sides of the aisle—especially those on the frontlines of climate change impacts—fought to retain this language in the final bill.  While this move is a bright spot in an otherwise bleak Congress, we need to do much, much more to support local and state governments in their efforts to combat climate change. And certainly more needs to be done to convince the president of the scientific truths of climate change and the importance of acting sooner rather than later on the risks it poses.

Watchdog: Pentagon taking few steps to prepare overseas bases for climate change | TheHill: The Pentagon has taken few steps to prepare its overseas installations for climate change, a government watchdog said Wednesday. “While the military services have begun to integrate climate change adaptation into installations’ plans and project designs, this integration has been limited,” the Government Accountability Office (GAO) said in a report released to the public on Wednesday. “For example, only about one-third of the plans that GAO reviewed addressed climate change adaptation.” During the Obama administration, the Pentagon issued directives for the military to adapt to climate change, which it labeled a national security threat. Defense Secretary James Mattis has also called climate change a national security threat, telling Congress during his confirmation process that “a changing climate — such as increased maritime access to the Arctic, rising sea levels, desertification, among others — impact our security situation.” But President Trump has suggested that climate change is a "hoax" and has taken steps to reverse former President Obama's actions on climate change, such as withdrawing from the Paris climate accord. In a response to the GAO report, the Pentagon said it continues to take steps to ensure infrastructure is “fully resilient” for a “wide range of scenarios” and pledged to be prepared “to address the effects of a changing climate on our threat assessments, resources and readiness.” “The department is currently reviewing guidance, including DoD Directive 4715.21, to focus on building resilience into our infrastructure,” Lucian Niemeyer, assistant secretary of Defense for energy, installations and environment, wrote in a response included in the report, referring to an Obama administration Pentagon directive on climate change. “As we assess these policy documents, we continue to work across the military department to incorporate resilience into planning and guidance.” 

More than 700 employees have left the EPA since Scott Pruitt took over - Since Environmental Protection Agency Administrator Scott Pruitt took over the top job at the agency in March, more than 700 employees have either retired, taken voluntary buyouts, or quit, signaling the second-highest exodus of employees from the agency in nearly a decade. According to agency documents and federal employment statistics, 770 EPA employees departed the agency between April and December, leaving employment levels close to Reagan-era levels of staffing. According to the EPA’s contingency shutdown plan for December, the agency currently has 14,449 employees on board — a marked change from the April contingency plan, which showed a staff of 15,219. “There has been a drop of employees of 770 between April and December. While several hundred of those are buyouts, the rest of those are either people that are retiring or quitting in disgust,” Kyla Bennett, director of New England Public Employees for Environmental Responsibility (PEER), told ThinkProgress. “Is that number higher than it would normally be? I think it is.” According to the Washington Post, the agency set aside $12 million in 2017 for buyouts as part of an effort to reshape the agency under the Trump administration. Unlike in 2014, when the agency saw some 456 buyouts, the most recent buyouts were not a result of Congressional pressure or enacted cuts — rather, the buyouts were in an apparent attempt to bring the agency more in line with operations detailed in the Trump administration’s proposed budget, which suggested a 31 percent cut to the agency, including the complete elimination of several agency programs. The EPA did not respond to ThinkProgress’ request for comment.

World leaders take aim at climate change and Trump - President Trump, who previously announced plans to pull the United States out of the 2015 Paris climate agreement, was not invited to a summit of world and business leaders in the French capital this week to address global warming, but his presence loomed large. The 2015 accord was front and center at the summit Tuesday aimed at giving the agreement a boost and the financing to combat global warming. Nations and business leaders pledged their commitment to the accord without Trump. On Tuesday, top international figures lined up to describe Trump’s decision as wrongheaded and playing politics with the planet. “Donald Trump may have pulled out of Paris, but not the American people,” former U.S. Secretary of State John F. Kerry added. Kerry said many Americans remain "absolutely committed" to the Paris accord. He said 38 states have legislation pushing renewable energy and 90 major American cities support the agreement. Former United Nations Secretary-General Ban Ki-moon also criticized Trump, saying the president had taken a “politically shortsighted, economically irresponsible and scientifically wrong” decision. Others, including business leader Michael Bloomberg and former California Gov. Arnold Schwarzenegger, insisted the world would shift to cleaner energy and reduce emissions whether Trump and his administration agreed or not. Bloomberg, the former New York City mayor, said environmentalists should be grateful to Trump for providing a “rallying cry” for action on climate change. He said America’s Pledge, the private-sector coalition that promised to honor goals set at the 2015 conference, “now represents half of the U.S. economy.” Article continues belowMore than 50 heads of state and government are taking part in the summit. 

Promising to ‘Make Our Planet Great Again,’ Macron lures 13 U.S. climate scientists to France - What initially looked like an impish dig at President Trump by French President Emmanuel Macron over climate policy has turned into a concrete plan. First, when the Trump administration proposed slashing federal science budgets and then, on June 1, when Trump pulled the United States out of the Paris climate accord, Macron took to social media to offer (in perfect English) to greet with open arms — and research dollars — American scientists worried about the political climate as well as global warming. Macron urged worried climate scientists, engineers and entrepreneurs to see France as a “second homeland” and to come work there because “we all share the same responsibility: make our planet great again.” Two years after the Paris climate accord was adopted, the French government is unveiling a list of 18 “laureates” — 13 of them working in the United States — who have won a “Make Our Planet Great Again” competition for $70 million of research grants awarded for as long as five years. They include professors and researchers at Cornell University, Columbia University, Stanford University and other institutions. “For me, the chance to work on some very exciting science questions with my French colleagues and not be so dependent on the crazy stuff that goes on in Congress and with the current administration is honestly very attractive,” Louis A. Derry, a professor of Earth and atmospheric sciences at Cornell, said in an interview. “But it can be embarrassing to try and explain what is going on at home right now.” Derry lamented a “devaluing of science by this administration.” And he said the tax plan Congress is considering would have a “catastrophic” effect on graduate students. “I don’t think the country is well served by this,” he said. 

Macron awards US scientists grants to move to France in defiance of Trump -- Eighteen climate scientists from the US and elsewhere have hit the jackpot as France’s president, Emmanuel Macron, awarded them millions of euros in grants to relocate to France for the rest of Donald Trump’s presidential term. The “Make Our Planet Great Again” grants – a nod to Trump’s “Make America Great Again” campaign slogan – are part of Macron’s efforts to counter Trump on the climate change front. Macron announced a contest for the projects in June, hours after Trump declared he would withdraw the US from the Paris climate accord. More than 5,000 people from about 100 countries expressed interest in the grants. Most of the applicants – and 13 of the 18 winners – were US-based researchers.Macron’s appeal “gave me such a psychological boost, to have that kind of support, to have the head of state saying I value what you do”, said winner Camille Parmesan, of the University of Texas at Austin. She will be working at an experimental ecology station in the Pyrenees on how human-made climate change is affecting wildlife.In an interview with the Associated Press, Parmesan described funding challenges for climate science in the US and a feeling that “you are having to hide what you do”.Trump has expressed skepticism about global warming and said the Paris accord would hurt US business by requiring a reduction in climate-damaging emissions.“We will be there to replace” US financing of climate research, Macron told the winners in Paris on Monday.“If we want to prepare for the changes of tomorrow, we need science,” he said, promising to put in place a global climate change monitoring system among other climate innovations.

World is losing the battle against climate change, Macron says (Reuters) - French President Emmanuel Macron delivered a bleak assessment on the global fight against climate change to dozens of world leaders and company executives on Tuesday, telling them: “We are losing the battle”. “We’re not moving quickly enough. We all need to act,” Macron said, seeking to breathe new life into a collective effort that was weakened this summer when President Donald Trump said he was pulling the United States out of an international accord brokered in the French capital two years ago. Macron, who has worked to establish his role as a global leader since his sweeping election win in May, said modern-day science was revealing with each day the danger that global warming posed to the planet, he said. “We are losing the battle,” he said, urging a new phase in the fight against global warming. France announced a raft of 12 non-binding commitments, from a $300 million pledge to fight desertification to accelerating the transition toward a decarbonized economy. But there was no headline promise likely to reassure poor nations on the sharp end of climate change that they will be better able to cope. Public and private financial institutions pledged to channel more funds to spur the transition to a green economy and investors said they would pressure corporate giants to shift toward more ecologically friendly strategies. Among the commitments, more than 200 institutional investors with $26 trillion in assets under management said on Tuesday they would step up pressure on the world’s biggest corporate greenhouse gas emitters to combat climate change. 

The US flirts with geoengineering to stymie climate change  - THE THING ABOUT humans is, for all our faults, we’re actually pretty good at fixing things we know we’ve screwed up.  Runaway climate change because humanity has taken too long to ditch fossil fuels? That’s … a bit trickier. Because even if the world meets the emissions goals of the Paris Climate Agreement, it may be too late to fix what we’ve done.  So a growing chorus of scientists have been mumbling about geoengineering. Doing things like spraying sulfur in the stratosphere or whitening clouds to bounce light back into space to help cool things down. And last week, Congressman Jerry McNerney joined them, introducing a bill that would ask the National Academies of Science to explore technologies to geoengineer Earth. In two reports, they'd explore research avenues and oversight of that research—that is, if the bill gets past McNerney's colleagues and then the only world leader to shun the Paris Climate Agreement. To be clear, McNerney would love nothing more than for the US to cut emissions. But the climate situation has become so dire that he thinks geoengineering is now something the US is obligated to explore. Not, like, initiating a full-scale manipulation of the stratosphere next week, but at least looking into the idea. “It's very important that we understand what our tools are,” he says. “What options do we have? How much risk is there?” The options are few and the risks murky. Take, for instance, sulfur seeding. The idea is to inject sulfur dioxide into the lower stratosphere, where it turns into sulfur aerosol that reflects light back into space. Problem is, just last month researchers released a study showing that if you injected the stuff into the Northern Hemisphere, you might reduce hurricanes in the Atlantic—and kick off a drought in north-central Africa in the process. Another geoengineering option is called marine cloud brightening, which entails … the brightening of marine clouds. To do this, theoretically you’d spray tiny salt particles from sea water into clouds. When clouds are dark and stormy-looking the droplets are larger. The added salt particles would act as “cloud condensation nuclei” to draw away water from these existing droplets to form new ones, resulting in more smaller droplets. “If the droplets are smaller, there’s more sunlight bouncing off all the surface area and the cloud is lighter and fluffier,” says Kelly Wanser, principal director of the Marine Cloud Brightening Project at the University of Washington.1

Judges skeptical of request to dismiss ‘burdensome’ children’s climate lawsuit -- A panel of federal appeals court judges on Monday expressed skepticism over the Trump administration’s request to halt a high-profile climate change lawsuit brought by 21 children, which had been scheduled to begin early next year. An administration attorney asked the three-judge panel of the U.S. Court of Appeals for the 9th Circuit to effectively dismiss the lawsuit, claiming that the discovery requests in the case were “burdensome” and that litigating the case could distract the executive branch from carrying out “its constitutional duties.” The landmark lawsuit, initially filed in 2015 against the Obama administration, argues that the government’s actions to bolster fossil fuel production amount to a violation of the young plaintiffs’ constitutional right to a clean environment. The goal of the lawsuit is to force the U.S. government to scale back its support for fossil fuel extraction and production and to back policies aimed at reducing greenhouse gas emissions.  In the past two years, the case has survived several legal challenges, and a judge this summer set a trial date for February 2018. But weeks later, a federal appeals court temporarily halted the proceedings after the administration filed a petition seeking a rare legal procedure known as a writ of mandamus. It called for the 9th Circuit to reconsider a decision made by a federal judge last year to allow the climate lawsuit to move to trial. On Monday, Chief Judge Sidney Thomas and Judge Marsha Berzon appeared skeptical about the government’s request to halt the case at this juncture and undermine the lower court’s decision, saying it would be an unprecedented and potentially unwarranted decision. “If we set precedent on this kind of case, there is no logical boundary to it,” arguing that countless other defendants would seek similar relief. 

VW executive gets seven years for U.S. emissions fraud - (Reuters) - A U.S.-based Volkswagen executive who oversaw emissions issues was sentenced to seven years in prison and fined $400,000 by a judge on Wednesday for his role in a diesel emissions scandal that has cost the German automaker as much as $30 billion. The prison sentence and fine for the executive, Oliver Schmidt, were the maximum possible under a plea deal in August the German national made with prosecutors after admitting to charges of conspiring to mislead U.S regulators and violate clean-air laws. “It is my opinion that you are a key conspirator in this scheme to defraud the United States,” U.S. District Judge Sean Cox of Detroit told Schmidt in court. “You saw this as your opportunity to shine ... and climb the corporate ladder at VW.” Schmidt read a written statement in court acknowledging his guilt and broke down when discussing his family’s sacrifices on his behalf since his arrest in January. “I made bad decisions and for that I am sorry,” he said. U.S. Department of Justice trial attorney Benjamin Singer argued in court that Schmidt was “part of the decision making process” at VW to hide a scheme to fake vehicle emissions results and had opportunities tell regulators the truth. “Every time he chose to lie,” Singer said. In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles in order to elude emissions tests. U.S. prosecutors have charged eight current and former Volkswagen executives. Six of those remain at large. 

The Massive Energy Bill In The $1 Trillion Infrastructure Package - The GOP tax bill working its way through Congress contains provisions that have huge ramifications for the energy industry, but legislators in Washington may not be done yet. A top Republican on energy issues, Senator Lisa Murkowski, is eyeing a sweeping piece of energy legislation for 2018. With her long-sought goal of opening up the Arctic National Wildlife Refuge (ANWR) nearly a done deal, Murkowski has plans to tee up a bipartisan energy bill that could potentially break through the usual Washington logjam. The Alaska Republican, according to Platts, is trying to pitch the energy bill as a way to spark momentum in the oft-cited but vague $1 trillion infrastructure plan supported by President Trump. In fact, the White House just said that President Trump would unveil “detailed legislative principles” for the massive infrastructure proposal in January. That would likely “serve as the building block” for the GOP bill, according to The Hill. Moving such a monumental piece of legislation is much less likely with the GOP tax bill blowing a trillion-dollar hole in the budget deficit. But Senator Murkowski says she has the vehicle to get the bill moving, and wants to White House to look at it because it is “ready to go” and it is “already pre-vetted,” according to Platts. What she is referring to is a bill that nearly got signed into law in 2016. Sen. Murkowski and her colleagues on the Senate Energy & Natural Resources Committee have worked on it for more than two years – in fact they have introduced the legislation for three years running.  It passed both chambers of Congress in 2016 and nearly became law, but the unexpected election of Donald Trump meant that some powerful Republicans in Congress decided to shelve the legislation in a gamble to get more out of it with a Republican president. Sen. Murkowski introduced the bill again this past summer, but it got buried as Congress focused on healthcare.

Tesla blamed for slide in U.S. home solar sales (Reuters) - After years of double-digit growth, home solar installations in the United States are poised to fall for the first time this year, according to a report released on Thursday by GTM Research. The reason? An analysis of installation data suggests that most of the slowdown is traceable to a single company: Tesla Inc, which acquired sister company SolarCity about a year ago. For years, SolarCity, with early backing from Tesla CEO Elon Musk, was the biggest player in residential solar and the driving force behind that market’s supercharged growth. When Tesla bought SolarCity last year, Musk called the acquisition a “no-brainer,” saying the two companies shared “the same overarching goal of sustainable energy.” But under Tesla’s ownership, the company has largely stopped its aggressive marketing campaigns and ambitious expansion. As a result, Tesla’s rooftop solar installations have fallen sharply each quarter this year compared to last. In the third quarter, installations were off by 42 percent over the previous year. Tesla declined to comment for this story, but has previously said that while sales are down, margins are up.

California regulators propose replacing PG&E natural gas plants with energy storage - LA Times: State regulators want Pacific Gas & Electric Co. to replace three natural gas plants with energy storage, a move that represents another significant step toward a clean energy future. The California Public Utilities Commission will vote Jan. 11 on the proposal that would require PG&E to seek clean alternatives to replace the three fossil-fuel plants.Houston-based Calpine, which owns the plants, and the California Independent System Operator, which runs the state’s electric grid, argue that the gas-fueled plants are needed to ensure reliability in the local areas they serve. The three Northern California plants — in Feather River, Yuba and Metcalf — don’t have long-term contracts with utilities, but have been identified by Cal-ISO as facilities that should remain in operation to support the electric grid when needed. Regulators said in a press release Wednesday that any potential needs the natural gas plants provide can be met with clean energy, particularly battery storage. “Energy storage is a clean energy resource that can be fast-responding, reliable and constructed in a short time frame,” the commission said in its statement. 

White House to host fresh biofuels talks to help refiners: sources (Reuters) - The White House will host talks between the rival oil and ethanol industries on Wednesday in hopes of brokering a deal to help refiners struggling to meet the country’s biofuels policy, according to sources familiar with the matter. The meeting comes after the White House last week pressured Midwest lawmakers to take part in talks over possible tweaks to the Renewable Fuels Standard, a law that requires refiners to blend increasing amounts of biofuels, mainly corn-based ethanol, into the nation’s fuel supply each year. A handful of refiners say the law is threatening to put them out of business. But ethanol interests have said the refineries can pass along the costs at the pumps and have vehemently opposed any changes to the regulation. The meeting on Wednesday will include staff from the offices of Republican Senators Ted Cruz of Texas and Pat Toomey of Pennsylvania, both representing the oil-refining industry, according to the sources. On the corn side, staff will be present from the offices of Republican Senators Chuck Grassley and Joni Ernst of Iowa, along with Deb Fischer of Nebraska, the sources said. Staff from the Environmental Protection Agency and the U.S. Department of Agriculture were also expected to attend. A spokesman for Grassley confirmed that “staff-level dialogue and meetings” were under way but did not provide details. Officials for the other senators and the White House did not comment. One source familiar with the matter said the meeting would likely focus on short-term fixes to help oil refiners on the U.S. East Coast who say they are struggling with the costs of meeting the RFS requirements. 

EU must not burn the world’s forests for ‘renewable’ energy The European Union is moving to enact a directive to double Europe’s current renewable energy by 2030. This is admirable, but a critical flaw in the present version would accelerate climate change, allowing countries, power plants and factories to claim that cutting down trees and burning them for energy fully qualifies as renewable energy. European producers of wood products have for decades generated electricity and heat as beneficial by-products, using wood wastes and limited forest residues. Most of this material would decompose and release carbon dioxide in a few years anyway, so using them to displace fossil fuels can reduce the carbon dioxide added to the atmosphere in a few years too. Unfortunately, the directive moving through parliament would go beyond wastes and residues and credit countries and companies for cutting down additional trees simply to burn them for energy. The reasoning seems to be that so long as forests re-grow, they will eventually reabsorb the carbon released. Yet even then, the net effect – as many studies have shown – will typically be to increase global warming for decades to centuries, even when wood replaces coal, oil or natural gas.

Virtual Energy - Has the day of the smart computer controlled micro-grid arrived? They reduce dependency on power from large centralised utilities whilst at the same time empowering communities to become self sufficient in energy supplies. Blockchain computer code is the enabling technology that allows the vendor of surplus solar power to trade with a neighbour who wants to buy electricity. For a long while, I have read energy articles in the Green Tech Press which I believe are utter rubbish and I have understood the technical reasons why this is so. More recently I have been finding it increasingly hard to understand the jargon particularly with regards to the application of blockchain technology and I decided it was time to try and find out what is going on. This, for example from General ElectricBut the lasting impact of bitcoin may end up being blockchain, the technology that makes the currency work. Blockchain has the potential to integrate renewable energy into the electricity grid in a way that is clean, easy and meaningful to the average energy consumer.  The graphic is from General Electric Corporation and is for Carros on the Mediterranean coast of France (see below). GE continues… This is all doable because Carros is home to the world’s first smart solar grid: a large scale experiment to integrate renewables into the grid. GE worked with French grid operator Enedis to install solar panels on residential and commercial rooftops, implement demand response technologies and create battery storage across the grid. It is all analyzed by GE’s Distributed Energy Resource Management (DERM) software, which meshes consumption information with forecasts from the grid and weather reports. This is helping transform Carros into a constellation of microgrids where consumers (or better put, prosumers) can instantly buy and sell electricity from each other depending on their needs. Home owners who are gone during the day can sell their electricity to businesses that need more daytime energy. And when they return home they can buy electricity from local batteries, electric vehicles or from businesses that can flexibly respond to changing energy prices.

‘Tsunami of data’ could consume one fifth of global electricity by 2025  --The communications industry could use 20% of all the world’s electricity by 2025, hampering attempts to meet climate change targets and straining grids as demand by power-hungry server farms storing digital data from billions of smartphones, tablets and internet-connected devices grows exponentially.The industry has long argued that it can considerably reduce carbon emissions by increasing efficiency and reducing waste, but academics are challenging industry assumptions. A new paper, due to be published by US researchers later this month, will forecast that information and communications technology could create up to 3.5% of global emissions by 2020 – surpassing aviation and shipping – and up to 14% 2040, around the same proportion as the US today.Global computing power demand from internet-connected devices, high resolution video streaming, emails, surveillance cameras and a new generation of smart TVs is increasing 20% a year, consuming roughly 3-5% of the world’s electricity in 2015, says Swedish researcher Anders Andrae. In an update to a 2016 peer-reviewed study, Andrae found that without dramatic increases in efficiency, the ICT industry could use 20% of all electricity and emit up to 5.5% of the world’s carbon emissions by 2025. This would be more than any country except the US, China and India.  He expects industry power demand to increase from 200-300 terawatt hours (TWh) of electricity a year now, to 1,200 or even 3,000TWh by 2025. Data centres on their own could produce 1.9 gigatonnes (Gt) (or 3.2% of the global total) of carbon emissions, he says. “We have a tsunami of data approaching. Everything which can be is being digitalised. It is a perfect storm. 5G [the fifth generation of mobile technology] is coming, IP [internet protocol] traffic is much higher than estimated, and all cars and machines, robots and artificial intelligence are being digitalised, producing huge amounts of data which is stored in data centres.”US researchers expect power consumption to triple in the next five years as one billion more people come online in developing countries, and the “internet of things” (IoT), driverless cars, robots, video surveillance and artificial intelligence grows exponentially in rich countries. “There will be 8.4bn connected things in 2017, setting the stage for 20.4bn internet of things devices to be deployed by 2020,” says the leading internet analyst firm Gartner.

Bitcoin Mining on Track to Consume All of the World’s Energy by 2020 - A network that underpins the virtual currency bitcoin is projected to require all of the world’s current energy production in order to support itself within three years, according to estimates.The amount of power necessary to support bitcoin has increased significantly in recent months, as its price has surged to record levels. On Monday, one bitcoin was worth around $16,500—a twentyfold increase since the start of 2017.Bitcoin mining—the process of generating new units of the currency by confirming bitcoin transactions on an online ledger called the blockchain—requires computing power, which is used to solve the complex mathematical puzzles used in the mining process. These problems are designed to become more complicated as more computers join the cryptocurrency's network.   Analysis of how much energy it currently requires to mine bitcoin suggest that it is greater than the current energy consumption of 159 individual countries, including Ireland, Nigeria and Uruguay. The Bitcoin Energy Consumption Index by cryptocurrency platform Digiconomist puts the usage on a par with Denmark, consuming 33 terawatts of electricity annually.The bitcoin network’s energy consumption has increased by 25 percent in the last month alone, according to Digiconomist. If such growth were to continue, this would see the network consume as much energy as the U.S. by 2019, and as much energy as the entire world by the end of 2020.  Such a projection is purely hypothetical, and for it to be realized it would require bitcoin to continue its remarkable growth trajectory and for global energy production to remain stable. There has also been debate as to how accurate Digiconomist's figures are. Cryptocurrency investor Marc Bevand suggests the index overestimates the electricity consumption of bitcoin miners by 1.5 to 3.6 times.  Going by Digiconomist's estimates, bitcoin’s annual carbon footprint is close to 16,000 kilotons of carbon dioxide. This is largely as a result of the bitcoin network being mostly fueled by coal-fired power plants in China.

Wind power blows past coal in Texas - Houston Chronicle --  Wind power, by one important measure, surpassed coal last month to become the second-largest electricity source in Texas, yet another milestone in the state's march toward greater reliance on renewable energy. When a 155-megawatt wind farm in West Texas began commercial operation this month, it helped push the state's wind power capacity even higher, to more 20,000 megawatts, surpassing 19,800 megawatts of capacity from coal-fired power plants, according to the Electric Reliability Council of Texas, which oversees 90 percent of the state's grid. One megawatt is enough to power 200 homes on a hot Texas day. NowWhile ERCOT still gets most of its power from natural gas and coal, wind power generation now accounts for 15 percent of the power mix — up from just 2 percent a decade ago. The imminent shutdown of three coal-fired power plants owned by Dallas-based Vistra Energy and the loss of their 4,000 megawatts of capacity will further tip the scales in wind's favor, said Joshua Rhodes, a research fellow at the University of Texas' Energy Institute in Austin. In October, Vistra announced the pending shutdowns of its Monticello, Big Brown and Sandow coal plants, triggering the loss of more than 800 jobs and the closure of two coal mines. The shutdown of the Vistra plants are the first retirements of coal-fired power plants since Texas deregulated power markets in 2002. "We are used to seeing wind numbers add, add, add," Rhodes said. "We are not used to seeing coal plants' numbers decreasing."

Power Failure: How utilities across the U.S. changed the rules to make big bets with your money -- Listen to the folks who run some of our biggest electric utilities: Tom Fanning, chief of Southern Company, in 2016 about its nuclear project in Georgia, which is years behind schedule: “It has gone beautifully. And we’re on schedule.” Kevin Marsh, CEO of SCANA, in 2016 about South Carolina’s V.C. Summer nuclear project a few months before it collapsed: “We’re excited about where we are.” Lewis Hay, CEO of Florida Power & Light, in 2011 about nuclear upgrades that cost twice as much as promised: “Our customers should greatly benefit.” And Fanning again in 2015, this time about his company’s clean coal project in Mississippi, which isn’t burning coal or cleaning it: “We’re on a real winning streak right now. They should have said "thank you," because money they torched on these and other power plants wasn’t theirs. It was yours. Over the past decade, state legislatures across the country rewrote rule books for how power companies pay for new power plants, shifting financial risks away from electric companies to you and everyone else. This rule change ignited a bonfire of risky spending — $40 billion so far on new power plants and upgrades, a Post and Courier investigation found. Flush with your cash, utilities tried to build plants with unproven technology; they launched projects with unfinished designs and unrealistic budgets; they misled regulators and the public with schedules that promised bogus completion dates; they hid damning reports from investors and the public; they tried to silence critics and whistleblowers. Then, when delays and cost overruns couldn’t be ignored, they asked state regulators to charge you more for their failures.

Refined coal has made up nearly one-fifth of coal-fired power generation so far in 2017 - The U.S. power sector consumption of coal is increasingly shifting to refined coal, even as coal-fired electricity generation decreases. Use of refined coal has increased from 17% of power sector coal consumption in 2016 to 19% so far in 2017, based on data through September. Refined coal has been processed to remove certain pollutants from raw, or feedstock, coal. Electricity generators fueled by refined coal can produce fewer emissions than those fueled by feedstock coal alone.   Refined coal is most commonly made by mixing proprietary additives to feedstock coal. These additives contain a mixture of halogens (for example, bromine or chlorine) and metals to increase the production of mercury oxides. Oxidized mercury can be captured by using mercury emission reduction technologies such as flue gas desulfurization scrubbers and particulate matter control systems. Oxidized mercury can also be adsorbed by powder activated carbon injection (ACI) and captured by particulate matter control systems.  EIA tracks the systems and control equipment that take advantage of the emission reductions afforded by refined coal use in the Power Plant Operations Report, which is published monthly. Based on year-to-date data through September 2017, 20% of subbituminous coal, 18% of bituminous coal, and 17% of lignite coal were refined before being used to generate electricity.The use of refined coal was encouraged by the American Jobs Creation Act of 2004, which created a tax credit for the production of refined coal as long as the coal is refined by facilities unassociated with the consuming power plant. Nevertheless, many refined coal processing facilities are located on power plant property. The tax credit was designed to increase with inflation and was valued at $6.81 per short ton in 2016 and $6.91 per short ton in 2017. By comparison, the Internal Revenue Service 2016 reference price of feedstock coal was $53.74 per short ton, and the 2017 reference price was $51.09 per short ton.

Rising coal exports give short-term aid to an ailing industry --  A shake-up in global coal trading has delivered some oxygen to the struggling American mining industry, driving up exports to energy-hungry countries. But the relief may not last. United States coal sales abroad over the first three quarters of the year surpassed exports for all of 2016, according to government figures. Energy experts project an increase of 46 percent for the full year, adding more than $1 billion to coal companies’ revenues. Those are crucial dollars for an industry trying to stabilize itself after nearly a decade of declining prices, expanding competition from natural gas and wind and solar energy, and bankruptcies. Domestic coal-fired power plants continue to close despite promises of regulatory relief by the Trump administration, making the exports all the more critical. The upturn in exports has been particularly helpful to Appalachia, where production is up 11 percent this year. Coal executives attribute the increase mostly to exports, especially of coal for making steel, known as coking coal. 

Trump’s plan to bail out coal may be unraveling under new regulator -- The Trump administration, which was looking to have a plan in place by next week to bail out America’s coal country, will instead have to wait until the new year. Kevin McIntyre, sworn in Thursday as chairman of the Federal Energy Regulatory Commission, asked for a 30-day extension to act on a sweeping proposal by Energy Secretary Rick Perry that would subsidize struggling coal and nuclear plants. Perry, who had called on the commission to come up with a plan by Dec. 11, granted the delay late Friday, saying he “respects the reasons” but “looked forward to swift action.” McIntyre said in his request that the commission needed more time to consider the flood of comments on the proposal and have a full debate. The move casts uncertainty over the future of a plan that critics say could cost consumers billions. It has drawn united opposition from oil and natural gas producers and clean energy developers, who deride it as a retreat from fair competition in wholesale power markets.“It’s a hornet’s nest,” said Paul Patterson, a New York-based utilities and power analyst for Glenrock Associates LLC. “Given the complexity of the issue, it’s not surprising that they’re asking for more time.” Perry ordered the commission to consider the plan in September, invoking an obscure 30-year-old statute. The initiative would pay a premium to power plants that store at least 90 days of fuel on site, in an effort to make grids more reliable. Coal and nuclear generators would be uniquely suited because, unlike gas plants, they aren’t fed by pipelines. Wind and solar farms, meanwhile, require no fuel.

Banks criticised for funding coal deals despite Paris agreement  Environmental campaign groups have accused many of the world’s largest banks of actively undermining the Paris agreement on climate change by pouring billions of dollars into coal plant developers. Between January 2014 and September 2017 international banks channelled $630bn to the top 120 companies planning to build new coal plants around the world, according to research by campaign groups including the Rainforest Action Network, BankTrack and Friends of the Earth. The researchers highlighted Beijing-based Industrial and Commercial Bank of China as the biggest underwriter for bond and share issues of coal plant developers, providing more than $33bn over that period. The researchers also found that nine western banks increased their financing of coal plant developers in 2016: Citi, UBS, Barclays, Société Générale, BNP Paribas, ING, JPMorgan, Standard Chartered and Crédit Agricole. The campaign groups said the figures were startling against the backdrop of the two-year anniversary of the Paris accord, where 195 countries agreed to fight global warming.

Baltics to cooperate on Belarus nuclear power tax (Reuters) - Lithuania is seeking regional action to tax or block all electricity imports from Belarus, where Russia is building a nuclear plant close to the border and Lithuanian capital Vilnius. Lithuania sees the Astravets power plant as a threat not only to its safety but also national security. Belarus has denied the plant has any safety issues. Despite relying on imports for 77 percent of its electricity since closing down its own old Soviet-built nuclear power plant in 2009, Lithuania plans to cut off high-power cables linking it with Astravets. Earlier this year it passed laws prohibiting the purchase of Belarus energy after the power plant gets going next year. Data from November showed Lithuania relied on Russia and Belarus for 31 percent of its electricity imports. Lithuania has not yet been able to persuade its neighbours to sign up for the boycott, but they have agreed to tax imports, Lithuania’s energy minister Zygimantas Vaiciunas said. “At this stage we have an agreement in the region that, if energy from Belarus gets imported, it would need to be slapped with an infrastructure tax,” Vaiciunas said. “This will make energy from the nuclear power plant less competitive on our markets,” he added. Belarus expects to have the first of two 1.2 gigawatt VVER 1200 reactors for the Astravets nuclear power station online next year, according to the plant’s website. The plant aims to provide a third of Belarus’s energy needs by 2020, when the second reactor goes online, the website says. “Achieving the common position on whether to buy or not to buy (electricity from Astravets) is important for us,”    Lithuania says Astravets, which is also known as Ostrovets in Belarus, does not meet safety standards, pointing to a number of accidents at the site and a lack of independent oversight. Any restrictions on Belarus energy would be felt by Russia, whose electricity grid is connected with Belarus and the Baltics. 

Nuclear reactor in Japan shut down over fears volcanic eruption could trigger Fukushima-style meltdown -- A nuclear reactor in Japan has been shut down due to risks from nearby volcanoes. The reactor at Ikata nuclear plant was restarted last year but after being shut for maintenance will now not reopen. The decision by Hiroshima High Court is a blow to the Japanese government that had been hoping to bring dozens of plants online in the wake of the 2011 Fukushima disaster. The power plant suffered multiple meltdowns following the tsunami that struck the country in March 2011. Stringent new safety standards were later introduced, however, decisions to approve the restarting of other reactors in the country have been met with protests. 

For 1st time, a high court rules against nuclear plant operations:The Asahi Shimbun: --A high court for the first time has banned operations at a nuclear power plant. The Hiroshima High Court issued the injunction in a verdict Dec. 13 that applies to the No. 3 reactor at the Ikata nuclear power plant in Ikata, Ehime Prefecture, operated by Shikoku Electric Power Co. In the ruling, the high court concluded there was a chance the Ikata plant could be affected by a pyroclastic flow from Mount Aso if an eruption occurred similar in scale to a massive one 90,000 years ago on the southern island of Kyushu. A computer simulation by Shikoku Electric of the possible effects from an eruption like the one in ancient times showed there was a possibility of a pyroclastic flow reaching the grounds of the Ikata plant. The high court concluded that the Ikata plant was located in an inappropriate location and that the Nuclear Regulation Authority's decision that new safety standards had been met was not rational. The company suspended operations in October to carry out a periodic inspection. If a judicial decision overturning the Dec. 13 high court ruling is not issued, the Ikata reactor will not be able to resume operations--even if the inspection is completed without problems. For that reason, the latest ruling could affect the government's plans to resume operations at other nuclear plants more than six years after the triple meltdown at the Fukushima No. 1 nuclear power plant. An official with Shikoku Electric Power labeled the court injunction as "extremely regrettable" and lamented the fact that it did not accept the company's assertion that the plant is safe.

Trump Considers Easing Nuclear Rules for Saudi Project - The Trump administration is encouraging Saudi Arabia to consider bids by Westinghouse Electric Co. and other U.S. companies to build nuclear reactors in that country and may allow the enrichment of uranium as part of that deal, according to three people familiar with the plans.Energy Secretary Rick Perry visited Saudi Arabia this month where the projects were discussed, according to two people. The people familiar asked not to be identified discussing the confidential negotiations. Previous U.S. agreements have prohibited the enrichment and reprocessing of uranium, and that had scuttled negotiations to use U.S. technology in Saudi nuclear projects during the Obama administration. The administration is mulling easing that requirement now as a way to help Westinghouse and other companies win Saudi Arabian contracts, two people said.A meeting to hammer out details of the nuclear cooperation agreement, known as a 123 Agreement for the section of the U.S. Atomic Energy Act that requires it, will be held at the White House Wednesday, two administration officials said.A successful U.S. bid would help deliver on President Donald Trump’s promise to revive and revitalize the domestic nuclear industry, helping American companies edge out Russian and Chinese competitors to build new fleets around the world. Saudi Arabia plans to construct 16 nuclear power reactors over the next 20 to 25 years at a cost of more than $80 billion, according to the World Nuclear Association.Westinghouse, the nuclear technology pioneer that is part of Toshiba Corp., went bankrupt in March, after it hit delays with its AP1000 reactors at two U.S. plants. After it declared bankruptcy, Westinghouse -- whose technology is used in more than half the world’s nuclear power plants -- said it shifted its focus to expanding outside the U.S. Winning contracts in Saudi Arabia could provide a new market that Westinghouse needs and provide at least a partial vindication for the investment in the AP1000 technology.

Shale Energy Alliance touts ways to build the oil and gas industry - Marietta Times  — Area oil and gas company representatives gathered Wednesday at the Blennerhassett Hotel to learn how the Shale Energy Alliance can make a difference and make the industry grow. Dave Caliguiri, with the Shale Energy Alliance, said the alliance is dedicated to the development of the oil and gas industry in the region.“We are a group of committed stakeholders, this includes producers, landowners, lease holders and others,” he said. “The Shale Energy Alliance is dedicated to preserving the safe, responsible and rational development of our nation’s natural energy resources. We are committed to fostering and promoting the positive benefits of shale development and hopefully, one day, getting us closer to energy independence.”Caliguiri said the group wants to help the industry grow across the region.“You, our members, work tirelessly every single day to make sure your neighbors have the energy they need to turn on the lights, cook a meal and heat a house — and we’re doing it locally.”Caliguiri said the members of the alliance work together.“One of those folks is energy transportation,” he said. “They do business with many of you in this room, they haul water and other services to this industry and they also buy vehicles from local businesses. We are a family united together to help one another and our neighbors.” “The Shale Energy Alliance makes sure our community leaders, our decision makers, our regulators and the media have the most up-to-date information and understanding of the positive effects of the natural gas industry. That’s who we are and what we can do,” Caliguiri. Lynette Stevens, a director with the Shale Energy Alliance, said the group is looking forward to working with the 2018 Legislature. Stevens said the next session is their opportunity to put natural gas legislation on the books.

Residents voice concerns with possible Ashland County fracking - Mansfield News Journal — Residents voiced their concerns with a company's plans for possible fracking in Ashland County during a public meeting Monday evening.The meeting came after Houston-based Cabot Oil and Gas Corporation began initial work in recent months for potential exploratory wells in Ashland County.  About 10 people gathered in the shelter building at Kendig Park in Hayesville for the panel discussion."This little town will never be the same if the trucks come in and out and put in that well," said Ashland County resident and panelist Elaine Tanner with Friends for Environmental Justice. "And it's gonna come right off of Route 30, you know. That's the easiest way to get here, and we just don't want to see that happen." The four-member panel included Tanner, local environmental activist Bill Baker from Mansfield, Ashland University English professor Deborah Fleming and a concerned resident who asked not to be named.The panelists raised several environmental and safety concerns with the hydraulic fracturing process.Hydraulic fracturing, often called fracking, is a drilling process in which a high-pressure liquid is directed at rocks below the earth's surface to extract oil or gases from inside. "My number one concern is the water, water quality," Tanner said. "Once it's gone, we have no choice but to find plan B, and there's no plan B for our water. There's no plan B for our air." Fleming said the underground shale, which in this part of Ohio is part of the Utica Shale, is permeable and can allow chemicals from fracking to pass through, potentially into water supplies. "I don't want to sit still and let somebody else poison my water," she said.  Some residents said they've heard of one neighbor in the area who signed a lease for a well to be allowed on their property. Tanner said the resident who signed the lease lives on a site on U.S. 60 a little more than a mile south of the village. George Stark, spokesperson for Cabot Oil and Gas Corporation, said the company is considering several sites around Ashland County for an exploratory well. “We’re exploring many options," he said in a phone call Monday afternoon. Stark said no sites have been selected at this point, and no permits have been signed.

US OKs more ETP natgas pipe drilling, Ohio wants pause (Reuters) - U.S. energy regulators on Thursday approved Energy Transfer Partners LP’s request to resume horizontal drilling at eight sites in Ohio and West Virginia as it works to complete part of the Rover natural gas pipeline by the end of the year. The approvals came as the Ohio Environmental Protection Agency sought a pause in Rover’s horizontal drilling in the state due to repeated spills of the clay and water mix used to lubricate the drilling blades. The Ohio EPA asked the U.S. Federal Energy Regulatory Commission (FERC) for the pause on Nov. 24. “Ohio was only informed shortly before and not consulted about the FERC approval to Rover. We are still very concerned about the total and continuing number of environmental impacts Rover is causing in Ohio,” Ohio EPA director Craig Butler said in a statement. Pipeline companies use horizontal directional drilling to cross under large obstacles like highways and rivers. ETP said that with the FERC approval on Thursday it can proceed with all 49 horizontal drills for the entire Rover project. It has already completed 29 of those drills. Once finished, the $4.2 billion Rover will carry up to 3.25 billion cubic feet per day of gas from the Marcellus and Utica shale fields in Pennsylvania, Ohio and West Virginia to the U.S. Midwest and Ontario in Canada. One billion cubic feet per day of gas can supply about 5 million U.S. homes. In a letter filed with FERC late on Wednesday, ETP said the Ohio EPA “grossly mischaracterizes Rover’s activities.” ETP said the five spills identified by the Ohio EPA in its Nov. 24 request were at two locations, Captina Creek and Black Fork Mohican, and not “significant” in size, the biggest being an estimated 1,188 gallons (4,500 liters) at Captina Creek on Oct. 11. ETP said in its letter that Rover was in compliance with the FERC-approved plan that allowed the company to start horizontal drilling again in September. 

Columbia Gas seeks January 1 startup for Leach XPress Pipeline - Columbia Gas has filed a request with the US Federal Energy Regulatory Commission for authorization to commence service on its 1.5 Bcf/d Leach XPress Pipeline effective January 1. During early trading Thursday, Markets responded to news of the late-Wednesday FERC filing with a 9-cent/MMBtu jump in forward basis prices for January gas delivered to the Dominion South hub, where the greenfield pipeline is expected to have measurable impacts on prices and production. The authorization request for Leach XPress follows a recent move by Columbia Gas to delay the startup of service on the pipeline, initially scheduled for November 1. At the time, Columbia Gas said that slow permitting processes, weather setbacks and unforeseen construction hurdles were to blame for the delay. The targeted in-service date was pushed back to early January, making Wednesday's January 1 startup request an ambitious target. In the FERC filing, Columbia Gas said that it anticipates the commissioning process for the pipeline to begin as early as December 25. The startup of service on Leach XPress is expected to help relieve production constraints for producers in Ohio, West Virginia and Pennsylvania with the addition of 1.5-Bcf/d of new upstream takeaway capacity in the tri-state region. The additional capacity will give upstream producers more optionality, lifting prices at constrained upstream hubs Dominion South and Texas Eastern M-2. But with Leach Xpress designed to deliver an incremental 0.4 Bcf/d to the Columbia Gas Appalachia hub, also known as TCO Pool, the expansion could put prices there under downward pressure next year.

Babies born near fracking sites face low birth weight,study finds.  Researchers studied more than 1.1 million births in Pennsylvania …  Babies born to mothers living within two-thirds of a mile from a fracking well site see a 25 percent increase in the probability of significantly low birth weight, a condition linked to other health problems later in life, according to a new study. The research adds to a growing body of scientific work that links the controversial extraction process with adverse effects on the environment and people. Based on an analysis of more than 1.1 million births in Pennsylvania between 2004 and 2013, the researchers found that babies born to mothers who lived within 1 kilometer, or 0.64 miles, of a fracking well weighed, on average, 1.38 ounces less than babies born to women whose pregnancies occurred 3 kilometers or more from a fracking site. Low birth weight is a risk factor for numerous negative outcomes, including infant mortality, attention deficit hyperactivity disorder, asthma, lower test scores, lower schooling attainment, lower earnings, and higher rates of social welfare program participation, the researchers noted. The Princeton University, University of Chicago, and University of California-Los Angeles researchers found little evidence of health effects at distances beyond 3 kilometers, suggesting that health impacts of fracking are highly local. The study, “Hydraulic Fracturing and Infant Health: New Evidence from Pennsylvania,” was published Wednesday in the journal Science Advances. “Given the growing evidence that pollution affects babies in utero, it should not be surprising that fracking, which is a heavy industrial activity, has negative effects on infants,” co-author Janet Currie, the Henry Putnam Professor of Economics and Public Affairs at Princeton University, said in a statement.

Babies born to moms who lived near fracking wells faced health risks, study suggests - - After combing through a decade's worth of Pennsylvania birth records, researchers have found that pregnant women living within two-thirds of a mile of a hydraulic fracturing well were 25 percent more likely to give birth to a worryingly small infant than were women who lived at least 10 miles outside that zone during pregnancy. Over these babies' lifetimes, their low birth weights raise the likelihood they will suffer poorer health and lower achievement, including reduced earnings and educational attainment. The authors of the new research estimated that 29,000 of the close to 4 million annual births in the United States — roughly 0.7 percent of babies born each year — were to women who lived within about two-thirds of a mile of a hydraulic fracturing operation during their pregnancies. The study was published Wednesday in the journal Science Advances. Nationally, the advent and expansion of hydraulic fracturing operations have reduced gasoline prices, decreased some air pollution emissions, and driven down U.S. dependence on foreign oil. But in areas surrounding the nation's roughly 1.2 million fracking wells, the extraction technique has increased pollution of air, soil, groundwater and surface water. Many of the toxic chemicals used in the hydraulic fracturing process are known carcinogens. Toxic gases, including benzene, are released from the rock by fracking. And the high-pressure pumping of a slurry of chemical into the ground is widely thought to release toxins and irritants into nearby air and water. The noise and pollution emitted by trucks and heavy machinery also may affect the health of people living nearby. 

Living Near Fracking During Pregnancy Linked To Poorer Newborn Health – Forbes - The closer pregnant women live to fracking sites, the greater the potential health risks may be to their developing fetus, suggests a new study published in Science Advances December 13. But the study has enough limitations to tamp down anxiety among expecting moms who live near fracking sites. It’s not necessary to run away from home until giving birth if you’re around the corner from fracking. In the study, infants born to women living within a 1-km radius (just over a half mile) of a fracking site during pregnancy had a 25% greater risk of having a low birthweight, defined as under 5.5 lbs. Those born within 3 km (nearly 2 miles) of a fracking site also had a slightly increased risk of low birthweight, but it was about one third to one half the risk seen in women living within 1 km. “The results of our analysis suggest that the introduction of fracking reduces health among infants born to mothers living within 3 km of a well site during pregnancy,” the authors wrote. “There is little evidence of health effects at further distances, suggesting that health impacts are highly local.” The overall risk of low birthweight among all the infants in the study overall was on par with national rates. The findings are based on an analysis of more than 1.1 million single-child births in Pennsylvania between 2004 and 2013, and they line up with similar studies comparing infant health and air pollution. About a quarter of the infants included in the study were born to women living within 15 km of an active fracking site while pregnant. Across the U.S., an estimated 65,000 babies are born each year to mothers living within 1 km of a fracking site. 

We Just Found The Strongest Evidence Yet That Fracking Affects Human Health - More than 100,000 babies born in the US every year start life in such close proximity to fracking sites that it could significantly damage their health, new research suggests.  Fracking – aka hydraulic fracturing – has long been criticised for its negative effects on the environment, but a new study analysing more than 1 million births provides what scientists say is the most damning evidence yet that fracking is bad for human beings."This study provides the strongest large-scale evidence of a link between the pollution that stems from hydraulic fracturing activities and our health, specifically the health of babies," economist and energy policy researcher Michael Greenstone from the University of Chicago told the Los Angeles Times.Greenstone and fellow researchers analysed records of more than 1.1 million births across Pennsylvania from 2004 to 2013, looking to see what differences if any were evident between babies born close to fracking sites compared to babies born further away. What they found was that babies born within 3 kilometres (1.9 miles) of fracking sites start to show greater risk of being born at a low birth weight, which in turn increases their likelihood of things like infant mortality, ADHD, asthma, and lower educational and earning outcomes. Outside of that 3 kilometre radius, no localised health effects were evident from fracking, but for babies born inside the zone, the danger seems to heighten the closer you get to drilling sites, as exposure to industrial pollutants increases. Babies born within 1 kilometre (0.6 miles) of a fracking site were 25 percent more likely to be born underweight than babies outside the 3 kilometre radius. Infants who started life within 1 to 3 kilometres of the sites were also affected by their proximity, but less significantly. "Birth weight is a proxy: it gives us an insight into what's going on in gestation, and we worry a lot when we see changes like this," "We know that babies born at low birth weight have a much, much higher risk of diseases such as coronary artery disease, hypertension, diabetes, and obesity."

Pennsylvania gas output remains focused in northeastern, southwestern corners -- Pennsylvania natural gas production continues to be concentrated in counties in the northeastern and southwestern corners of the state, according to a report by the state's Independent Fiscal Office. Four counties -- Susquehanna and Bradford, in the dry gas northeastern region, and Washington and Greene in the liquids-rich southwestern region -- comprised two-thirds of statewide production in the first three quarters of 2017, the IFO report said. Susquehanna in the northeastern corner of the Commonwealth was the leading gas producer, with output of 966.1 Bcf through September, comprising almost one quarter of the total gas production in the state. Coming in at second place with production of 679.2 Bcf, about 17% of the state's total, was Washington County. Bradford County, one county to the east of Susquehanna, came in as the No. 3 producer, with production through September of 583.3 representing almost 14% of the state's production. Rounding out the top five producing counties were Greene, with production of 495 Bcf, and Lycoming in the Northeast, with output of 268.3 Bcf. All of the state's gas-producing counties except Greene, Lycoming and Fayette registered gains in terms of production for the first three quarters of the year compared with the same period of last year. "The order of top gas-producing counties generally has remained consistent over the last several years, with production shifting somewhat from northeast to southwest counties," IFO spokesman Mark Ryan said in an email statement Friday. The report found that most of the production gains recorded in the first three-quarters of 2017 came from wells spud in 2015 and 2016. Although the report did not attempt to identify the reason behind this trend, Ryan said it might have resulted in part from producers drilling but not completing wells, in order to complete them at a later time when price realizations were better.

Michigan panel urges temporary shutdown of Mackinac pipeline -  A government safety panel on Monday urged the temporary shutdown of twin oil pipelines in the Straits of Mackinac until their operator can finish inspections and repair coating gaps, after some members expressed concerns over a recent deal between the state and Enbridge Inc. The Michigan Pipeline Safety Advisory Board approved the non-binding resolution as members of Gov. Rick Snyder's administration who sit on the panel abstained from voting. Other non-binding resolutions call for temporarily halting the flow of oil during storms that produce sustained waves at least 3 feet (0.9 meter) high for longer than an hour, instead of an 8-foot (2.4-meter) threshold included in the agreement, and recommend that a "more robust" study of alternatives to Line 5 be completed. The agreement, announced Nov. 27, sets an Aug. 15 deadline for determining the future of the nearly 5-mile-long (8-kilometer) segment beneath the channel where Lakes Huron and Michigan converge. Options include shutting down the pipeline or routing it through a tunnel beneath the lakebed where it now rests. Because five or six members of the 16-person board voted for the measures while many others abstained, there was confusion over whether they had passed. Co-chairwoman Valerie Brader, executive director of the Michigan Agency for Energy, said she expected the Republican governor's administration to consider the resolutions as advisory while also taking note of the number of abstentions. Although the federal government regulates oil pipelines, Michigan owns the lake bottom and in 1953 granted an easement to the Canadian company allowing the pipeline to go there. "We know we have coating gaps. It's a violation of the easement and it only makes sense to shut down the pipeline until Enbridge can adequately address and fix the coating issues to ensure we don't have any type of rupture or leak,"  The line transports about 23 million gallons (87 million liters) daily between Superior, Wisconsin, and Sarnia, Ontario. At least four board members expressed frustration that Snyder struck the agreement without their input, contending it short-circuited the public process and signals that tunneling the pipeline is ultimately the state's preference.

Federal judge again denies South Portland’s plea to dismiss pipeline company’s lawsuit -  Judge John Woodcock Jr. opened his written order issued Tuesday with a weary-sounding reference to “another motion to dismiss” from the city of South Portland.The federal judge then firmly denied the city’s renewed motion to dismiss a nearly 3-year-old lawsuit by the Portland Pipe Line Corp. over a municipal ban on crude oil exports. Woodcock denied the city’s first consolidated motion to dismiss the lawsuit in August. The city filed the latest motion in October, after TransCanada Corp. announced that it had abandoned plans to build the controversial Energy East pipeline, which would have carried 1.1 million barrels of crude oil daily from western Canada to the Atlantic coast.Without the Energy East pipeline, the Portland Pipe Line could no longer claim to have a ready source of Canadian crude that would warrant reversing the flow of its 236-mile pipeline from South Portland to Montreal, the city’s lawyers argued in November in U.S. District Court in Portland.The company is fighting a 2014 city ordinance that banned shipments of crude oil from South Portland’s waterfront and effectively blocked the company from reversing the flow of its pipeline, which currently transports a dwindling amount of imported crude to refineries in Montreal.Woodcock flatly rejected the city’s latest challenge of the Portland Pipe Line’s right to fight the so-called Clear Skies ordinance based on the lack of demand for the pipeline’s use.Woodcock cited the company’s claims that the pipeline could have access to other sources of Canadian crude and that it “will continue to be the sole operator of a crude oil pipeline running to the Atlantic coast.”“The court still finds that if it is legally permitted to do so, Portland Pipe Line Corp. intends to and is sufficiently likely to be able to reverse the flow of oil in its South Portland-to -Montreal pipelines,” Woodcock said in his dismissal order.

Environmental groups file suit in federal court against gas pipeline   -- A coalition of environmental groups filed suit Friday to try to block the Mountain Valley Pipeline, a natural gas pipeline planned for the southwestern portion of Virginia that cleared the last regulatory hurdle and won state water permits Thursday. Appalachian Mountain Advocates filed the suit in the U.S. Court of Appeals for the 4th Circuit, seeking a review of the permits issued by the State Water Control Board. The pipeline is planned to run about 300 miles from West Virginia through the southwest corner of Virginia, to a location in Pittsylvania County near the North Carolina border. It’s being built by a group of companies led by EQT Midstream Partners of Pittsburgh. Appalachian Mountain Advocates was joined in the lawsuit by the Sierra Club, Appalachian Voices, the Chesapeake Climate Action Network and Wild Virginia. The groups contend that the state board and the Department of Environmental Quality rushed the review process and cut corners. The state has said that the pipeline has faced “the most rigorous regulatory process” of any such project in state history. An even larger pipeline project — the more than 600-mile Atlantic Coast Pipeline, backed by the state’s largest utility, Dominion Energy — faces water permit hearings Monday and Tuesday. That pipeline would run from West Virginia through Virginia to North Carolina. Supporters of the pipelines, including Gov. Terry McAuliffe (D), say they will generate jobs and economic activity for the state and provide utilities with needed capacity. Opponents, including environmentalists and land-rights activists, say they threaten fragile ecosystems and impinge on property rights of landowners along the routes.

Panel grants conditional OK on key pipeline approval — A panel of Virginia environmental regulators granted a conditional permit Tuesday for the proposed Atlantic Coast Pipeline, making its approval contingent on getting more information about the project’s impact on water quality. The Virginia State Water Control Board voted 4-3 to approve a key Clean Water Act permit referred to as a 401 water-quality certification. The citizen board of gubernatorial appointees was charged with determining whether there is “reasonable assurance” water along the route won’t be contaminated during construction of the approximately $5 billion, 600-mile (965-kilometer) natural gas pipeline. The permit won’t take effect until several additional studies — including an erosion and sediment control plan, stormwater management plan and testing on sensitive karst topography — are reviewed and approved by the Department of Environmental Quality, spokesman Bill Hayden said. A full text of the amendments the board voted to include wasn’t immediately available late Tuesday. The department will not allow pipeline construction to begin until the erosion and sediment control plan is completed and approved, which might not be until March or April, Hayden said. Pipeline spokesman Aaron Ruby called the decision “a very significant milestone for the project and another major step toward final approval.” The company will work closely with state authorities “to complete all remaining approvals in a timely manner and ensure we meet all conditions of the certification,” he said in a statement. Richmond-based Dominion Energy is the lead developer of the project, which would start in West Virginia and cross into Virginia and North Carolina. A company executive has also suggested it might extend into South Carolina, but officially the company has said no decision has been made about a possible expansion. Many of the opponents who question the need for the project and say it will damage the environment, infringe on property rights and commit the region to fossil fuels, characterized Tuesday’s decision as a partial victory. “While this outcome buys us time, it’s still far from the end result for clean water we wanted - a flawed application that didn’t include required details outlining how Dominion planned to mitigate water pollution from its unnecessary pipeline shouldn’t have even gotten a hearing in the first place,”

Atlantic Coast Pipeline Opponents Down But Not Out After Conditional Approval -  A Virginia panel of regulators granted a conditional approval for a controversial gas pipeline Tuesday, saying that more information on environmental impact is needed before the project can proceed. The Virginia State Water Board voted 4-3 to approve water permits for the pipeline in one of the project's last remaining hurdles, but delayed the start of construction until several additional environmental studies are reviewed and approved. The Atlantic Coast Pipeline , backed by state political power player Dominion Energy, has met with heavy local opposition. Advocates filed suit in federal court last week following the water board's decision to green light a similar project, the Mountain Valley Pipeline , last week. As reported by the Richmond Times-Dispatch : The board, which had been grappling with delaying a decision on the project, ultimately approved the certification with an amendment by board member Timothy G. Hayes that prevents it from becoming effective until the Virginia Department of Environmental Quality finishes reviewing and approving a series of plans and mitigation measures. Many pipeline opponents contend that those plans, which deal with stormwater and erosion and sediment control, among other areas, are key to deciding whether the project can be built without degrading state waterways. Developers' plans call for the 600-mile Atlantic Coast Pipeline to cut through 11 Virginia counties on its way to North Carolina, not including an extension to Chesapeake.  "While this outcome buys us time, it's still far from the end result for clean water we wanted—a flawed application that didn't include required details outlining how Dominion planned to mitigate water pollution from its unnecessary pipeline shouldn't have even gotten a hearing in the first place," Lee Francis, communications manager for the Virginia League of Conservation Voters , said in a statement. "It's at least a promising sign that regulators sent Dominion back to the drawing board."

White House to Release Offshore Drilling Plan - The Trump administration is expected to unveil the new Five Year Offshore Oil Drilling Plan as early as this week, after signing an executive order earlier this year to expand offshore oil drilling in U.S. waters. Expanded offshore oil drilling threatens recreation, tourism, fishing and other coastal industries, which provide more than 1.4 million jobs and $95 billion GDP along the Atlantic coast alone. The executive order directed the Interior Department to develop a new five-year oil and gas leasing program to consider new areas for offshore drilling. The order also blocked the creation of new national marine sanctuaries and orders a review of all existing sanctuaries and marine monuments designated or expanded in the past ten years.  "Our ocean, waves and beaches are vital recreational, economic and ecological treasures to our coastal communities that will be polluted by new offshore oil drilling, regardless of whether or not there is a spill," said Dr. Chad Nelsen, CEO of the Surfrider Foundation . "Without a massive mobilization by coastal communities around the country in opposition to new offshore drilling, our voice will be drowned out by the lobbying power of Big Oil in Washington, DC."  New offshore drilling would threaten thousands of miles of coastline and billions in GDP, for a relatively small amount of oil. Ocean tourism and recreation, worth an estimated $100 billion annually nationwide, provides 12 times the amount of jobs to the U.S. economy, compared to offshore production. Even under the best-case scenario, America's offshore oil reserves would provide only about 920 days, or 18 months supply of oil at our current rate of consumption, according to federal agency estimates.

US considers weakening offshore safety rules to promote more drilling - The Trump administration is considering easing offshore oil and natural gas safety regulations, including eliminating certain requirements for Arctic drilling put in place by the Obama administration, and cutting testing requirements for rules developed in response to BP's Deepwater Horizon disaster, an Interior Department document showed Thursday. In addition, the administration is considering giving operators access to Arctic waters for longer periods than currently allowed, a rule change regulators claim could boost interest in exploration. Details of the administration's plans of offshore rules were outlined in the Interior Department's latest statement of regulatory priorities, which was released Thursday. That plan calls for Interior's Bureau of Safety and Environmental Enforcement to rollback or weaken offshore safety regulations put in place by the Obama administration in order to promote additional oil and natural gas drilling in federal waters. "BSEE is reviewing existing regulations to determine whether they may potentially burden the development or use of domestically produced energy resources, constrain economic growth, or prevent job creation," the plan states. "BSEE is well-positioned to help maintain the nation's position as a global energy leader and foster energy security and resilience for the benefit of the American people, while ensuring that any such activity is performed in a safe and environmentally sustainable manner." According to the plan, BSEE is considering significant changes to a well control and blowout prevention system rule which Obama's Interior Department finalized in April 2016. That rule, developed in response to BP's Deepwater Horizon disaster, took years to develop and was revised multiple times. Industry groups have criticized elements of the rule, including frequent testing of the blowout preventers and standardized safe drilling margins, arguing they will increase costs for offshore operators.

The Panama Canal Is Now a Major Problem for U.S. Shale - Just as the Panama Canal was unveiling a new, fatter set of locks, U.S. shale drillers were readying their very first exports of liquefied natural gas. While the wide-body tankers that transport LNG would’ve had no chance of squeaking through the original steel locks built a century ago, they could easily traverse the bigger channel and shave 11 days off the trip to primary markets in Asia. But 17 months in, it’s not quite working out as planned. Only a single LNG tanker has a guaranteed passage each day. The natural-gas industry blames the Panama Canal Authority for holdups, and the canal authority blames the industry for being lackadaisical about transit timetables.Whoever’s at fault, this much is clear: The pressure is on both sides to resolve their problems. For gas exporters, it’s critical to establish credibility as a reliable new source of fuel for clients in Asia. For the canal authority, the stakes are high too, with Mexico and other countries flirting with creating alternative routes as gas demand booms.“The canal surely has had some issues getting the new set of locks up and running smoothly,” said Peter Sand, an analyst with the shipping association BIMCO. “It has taken longer than the canal and the industry expected.”The story starts at the opening in June 2016 of the expansion project. It couldn’t have come at a better time for the LNG market, just as Cheniere Energy Inc. was ramping up operations at the first export terminal ever built in the lower 48 states, at Sabine Pass on the Louisiana-Texas border. The Panama Canal Authority promised a dozen daily slots for ships of all stripes to pass through the new lane -- ultimately. So far, the maximum it has been able to handle every 24-hour period is eight; preparations are underway to move that up to 10 or more in 2019. What rankles LNG companies is that they’ve been awarded just the single reserved slot, with the rest going to container ships that carry consumer goods from sneakers to refrigerators. One position isn’t sufficient now and will be wholly inadequate once all the new export terminals under construction go on line, said Octavio Simoes, president of Sempra LNG & Midstream, at a conference in October. He caused a ruckus when he warned that canal holdups could crimp sales and cost traders serious money.

Panama Canal Can’t Handle U.S. LNG Boom - The International Energy Agency recently predicted that the United States could become the world’s top LNG exporter within ten years. This prediction, however, is far from a certain one. The U.S. LNG boom is fraught with challenges, the latest among them, apparently, the Panama Canal.  LNG producers and the Panama Canal Authority are locked in an argument about whose fault it is that not enough LNG tankers are using the freshly expanded channel that saves 11 days from the journey to Asia, which has become a key market for U.S. LNG. According to the producers, the canal has expanded the access of cargo vessels at the expense of LNG tankers. According to the authority, LNG producers can’t comply with timetables.  The facts are as follows: the expansion of the Panama Canal has been going more slowly than initially planned. To date, only one LNG tanker a day can pass through the Panama Canal. That’s compared with a promised 12 slots for all kinds of vessels every day via the wider channel. Of this planned total, however, right now the Canal has a capacity to service just eight over 24 hours. But there’s more: recently the head of an LNG producer, Sempra, and the chief executive of the Panama Canal Authority locked horns over the discrepancy between the LNG industry’s plans and the Canal’s capacity. Sempra’s head, Octavio Simoes, fired the first shot, saying that in the future, insufficient channel capacity could cost gas traders a substantial sum and cripple U.S. LNG sales internationally. The Authority’s head, Jorge Quijano, responded with a hint that the LNG industry has yet to prove it deserves more slot reservations than one a day. If capacity-building were a sure indicator of the industry’s worth in the eyes of the Panama Canal Authority, then this worth would be quite high. Besides the Sabine Pass liquefaction plant—already the second-largest globally after Qatar’s Ras Laffan—there is now what the Houston Chronicle calls a second wave of LNG terminals coming on stream.

The Next U.S. Crude Export Surge May Start at a Lonely Gulf Buoy - The Louisiana Offshore Oil Port, which already handles imports from similar large ships known as Very Large Crude Carriers, or VLCCs, will likely be the first port to to load oil into a supertanker. LOOP has indicated that its pipelines require minor modifications and could operate in both directions in early 2018. "Expanding U.S. ports to accommodate direct loading of VLCCs will logistically help to streamline and expedite exports," Loading these mammoth ships without having to use other tankers to ferry the oil from shore could save shippers about a million dollars on each cargo. To a refiner in Europe or Asia, that may mean the difference between using U.S crude instead of oil from the Middle East, North Sea or West Africa. It may broaden the market for shale producers and further boost U.S. exports, which quadrupled in the past year to as high as 2.1 million barrels a day.  A VLCC that gets its entire 2 million-barrel cargo directly from a single terminal spares the exporter the cost of hiring smaller ships to fill it up, Sandy Fielden, director of research and commodities for Morningstar Inc. in Austin, Texas, said in a phone interview. This process, known as reverse lightering, could cost at least 50 cents a barrel, he said.  In addition to the freight cost, shipowners bill charterers if there are delays in lightering, which are not uncommon. These late fees, or demurrage, can run more than $35,000 a day for a VLCC,   LOOP has a big advantage over Texas ports. Its buoy sits 20 miles (32 kilometers) offshore in 100 feet of water, deep enough to handle the biggest tankers. The ports of Corpus Christi and Houston, which currently handle the most exports, aren’t deep enough to fully load a VLCC with a draft of 70 feet to 74 feet.

Permian Basin Refinery Project Doubles in Capacity | Rigzone: The developer of a planned West Texas refinery has decided to increase crude oil processing capacity in the Permian Basin by one-third rather than one-sixth.   MMEX Resources Corp, which in March of this year unveiled plans to build a 50,000-barrel per day (bpd) refinery in Pecos County, Texas, on Nov. 17 broke ground on the facility’s 10,000-bpd crude distillation unit (CDU). Moreover, the company has raised the capacity of its planned refinery – to be built on a 250-acre site northeast of Fort Stockton – to 100,000 bpd. The Permian Basin’s three existing refineries can process 300,000 bpd of crude oil, and MMEX plans to start the permitting process for its refinery early next year.MMEX’s project will be one additional outlet for growing Permian crude oil production. In just the past week, companies such as Enterprise Products Partners L.P. and Phillips 66 and Enbridge have announced projects to add crude pipeline takeaway capacity from the region.“By increasing the refinery’s capacity to 100,000 bpd, we are able to double the output of the refinery for only one-third of the increase in CAPEX,” Jack W. Hanks, MMEX’s president and CEO, told Rigzone late last week.When it initially announced the refinery project, MMEX had projected a $450 million cost for the then-50,000-bpd plan. Since then, the project – in addition to getting a larger price tag of roughly $600 million and beginning construction on the CDU – has cleared various milestones, Hanks noted. He explained that the initial CDU phase is a distinct project from the full-scale refinery and has been permitted separately from the larger, “Phase II” refinery component. He said that MMEX expects to kick off Phase II permitting during the first quarter of 2018. The CDU/Phase I construction should support approximately 100 jobs and create 25 to 30 full-time positions once the unit begins operations by the end of 2018, said Hanks.

Will A Wave Of Permian Pipeline Projects Avert Takeaway Constraints? -- A number of Permian pipeline projects that would help alleviate impending takeaway constraints in the fast-growing production region have advanced in recent weeks — a clear sign that producers, shippers and midstream companies alike are paying close attention. But will these projects be enough, particularly when you consider the flood of capital spending in the Permian by exploration and production companies and the accelerated production growth that it may spur? Today, we discuss the progress midstreamers have been making on the Permian takeaway front as production of crude oil, natural gas and natural gas liquids (NGLs) in the play ratchets up. Production of crude oil and NGL-packed associated gas in the Permian has been rising quickly, putting added pressure on midstream companies to build more pipeline takeaway capacity — and fast. Crude oil output in the 70,000-square-mile play in West Texas and southeastern New Mexico now tops 2.6 MMb/d, while natural gas production is up to 7 Bcf/d and NGL output exceeds 800 Mb/d. And with the price of West Texas Intermediate (WTI) higher than it’s been in more than two years and the breakeven cost for many Permian producers falling, production growth is poised to accelerate. As we discussed recently in Ready to Run, a number of the oil-focused and diversified E&Ps we track have been ramping up their planned 2018 capex in the Permian — examples we noted include ConocoPhillips, Parsley Energy and Occidental Petroleum. Just after we posted that blog, Chevron announced that in 2018 it will invest $3.3 billion in Permian projects, and that it plans to increase its Permian rig count by one-third (to 20 from the current 15) by the end of next year. Previously, ExxonMobil said that in 2018 it plans to add 10 Permian rigs to the 20 already active there.

Update On Fracking Sand -- Financial Times -- December 9, 2017 - From The Financial Times: Going local for supplies sparks new frac sand boom. Market is stretched to full capacity amid US shale oil’s drive to extend output cheaply.  Windblown dunes in west Texas are the latest front in the shale oil industry’s campaign to extract more barrels at less cost. The industry is excavating dunes for frac sand, which is pumped into wells to crack open rocks and get oil and gas flowing. The deposits are in demand because they lie close by the hot Permian shale region, making them cheaper than sands carried in from older mines 1,000 miles away. Locally dug sand is influencing the economics of US oil production, helping shale supplies compete in world markets. It is also worrying investors who own shares in railroads that haul sand and in sand miners that may be on the cusp of a glut. Sand was a critical ingredient of the shale drilling revolution. Without it, US oil production would not have nearly doubled in the past decade to an estimated 9.7m barrels per day. Between 2012 and 2014, total US demand for “proppants” such as frac sand rose from 34m to 61.5m short tons, according to Rystad Energy, a consultancy. Then oil prices collapsed, bringing down sand consumption as well. Volumes are again on the upswing as drilling accelerates, oil wells get longer and more sand is used per foot of well. Demand is forecast to surpass 100m short tons next year, Rystad says. “Right now, the market is really stretched thin,” says Thomas Jacob, a senior analyst at IHS Markit, a research company. “Everyone is running at full capacity.” But this sand boom is different than the last. In the first phase of the shale fracking boom, oil producers were notorious for prioritising production growth over investor returns. They sought premium sand supplies far from the oil patch in states such as Wisconsin. Its “northern white sand” was prized for hardness and roundness that made a porous latticework inside underground wells. But given its bulk, it also cost a fortune to ship. Northern white sand has averaged $41 per short ton at the mine gate this year, according to IHS Markit, but can cost $120 at a Texas well head after transport. Cost-cutting among oil companies sparked a search for supplies lying around the Permian, known as brown sand. While finer in grain, it is also cheaper at $75-$80 per short ton at the well head, Mr Jacob says. Distances are short enough to make some deliveries economical by truck.

Small earthquakes at fracking sites may be early indicators of bigger tremors to come, say Stanford scientists -- Stanford geoscientists have devised a way of detecting thousands of faint, previously missed earthquakes triggered by hydraulic fracturing, or “fracking.”    The technique can be used to monitor seismic activities at fracking operations to help reduce the likelihood of bigger, potentially damaging earthquakes from occurring, according to the new study.    “These small earthquakes may act like canaries in a coalmine,”  “When they happen, they should be viewed as cautionary indicators of underground conditions that could lead to larger earthquakes.”  . “In our study, you can actually see individual earthquakes occurring next to the section of a well that’s being fracked,” said Stanford PhD student Clara Yoon, lead author of the study published in the Journal of Geophysical Research. In October 2010, residents near an Arkansas natural gas field were shaken by a magnitude 4 earthquake that was followed by two larger aftershocks in February 2011.Scientists say these large earthquakes were caused by injections of wastewater from fracking sites into deep underground wells, and not by fracking operations closer to the surface.   Using an advanced data-mining algorithm developed by Yoon and her colleagues, the Stanford team conducted a retrospective analysis of seismic activity in Arkansas prior to the magnitude 4 event. The algorithm uses earthquake-pattern recognition to generate detailed records of seismicity.  The analysis tracked seismic events generated at production wells that utilized fracking and at deeper wastewater-disposal wells nearby.  “We were interested in how the sequence that led to the magnitude 4 earthquake got started,”   When Yoon ran the algorithm on this dataset, she discovered more than 14,000 small, previously unreported earthquakes. By comparing the timing and location of the tremors with fluid-injection data provided by the state of Arkansas, Yoon was able to demonstrate that most of the earthquakes were the direct result of fracking operations at 17 of the 53 production wells.   “It had been thought, and we thought, that early earthquakes in this area were related to wastewater injection. But we found that the majority were caused by fracking.”

Nebraska PSC hears arguments over TransCanada's motion to amend its application on Keystone XL pipeline — The corporation behind the Keystone XL oil pipeline urged a Nebraska regulator Tuesday to amend a recent order approving a route for the controversial project. The five members of the Nebraska Public Service Commission heard oral arguments from attorneys for and against the commission’s Nov. 20 approval of a pipeline route. A lawyer for TransCanada Corp. said Tuesday that the company wants to amend its application, which gained approval on a 3-2 vote. Allowing changes to the application and the PSC’s final order would address questions that could prompt more legal challenges and further delays, the lawyer added. “We think the commission has the perfect opportunity right now to erase any such concern and prevent the risk of relitigating these issues,” said James Powers, an Omaha attorney who represents TransCanada. Pipeline opponents said the routing law allows only rejected applications to be amended. The PSC approved a route, however flawed that approval might have been, said David Domina, an Omaha lawyer who represents affected landowners. In addition, the law gives the PSC seven months to render a decision on the pipeline application, and that deadline elapsed on Nov. 23, Domina argued. “The gun has sounded; the game is over. You have no jurisdictional authority now to back up ... so they can amend,” he said. TransCanada had asked the PSC to endorse what it called the preferred route for the underground 36-inch pipeline, which would carry 830,000 barrels daily from Canada’s tar sands region to refineries on the Texas Gulf Coast. But in an unexpected decision, the PSC approved the “mainline alternative route,” which the company also had included in its application. The slightly longer alternative route parallels a portion of the company’s original Keystone pipeline, which went into service in 2010. Powers said Tuesday that the company agrees that the alternative route meets the public interest, which was the fundamental determination the PSC had to make before approving the application. Domina and other opponents disagreed. They said that the law compels the PSC to consider a single route and that TransCanada must file a new application if it wants to use the alternative route. 

Trump, Zinke to Auction Away 700,000 Acres of Western Public Lands for Fracking -- President Trump and Interior Sec. Ryan Zinke are continuing their onslaught against American public lands this holiday month and moving forward with plans to auction off 700,000 acres for fracking , endangering clean air and water, the climate and sacred lands.  "First it's our cherished national monuments , now Trump and Zinke are set to give away even more public lands to the fossil fuel industry," said Becca Fischer, climate guardian for WildEarth Guardians . "Rather than giving back this holiday season, this administration is proving that it will stop at nothing to put our public lands in the hands of dirty energy executives and sell off our rights to clean energy and a healthy environment."  In total in 2017, the U.S. Department of the Interior's Bureau of Land Management (BLM) has auctioned and is proposing to auction off more than a million acres of public lands for fracking in Colorado, Montana, Nevada, New Mexico, Utah and Wyoming . Of that 1 million, the BLM will sell 700,000 acres in the December sales.

  • ● On Dec. 7, the BLM sold 22,000 acres in northwestern Colorado and 2,100 acres in southeastern New Mexico.
  • ● On Dec. 12, 99,000 acres in Montana, 388,000 acres in Nevada and 94,000 acres in Utah are slated to be auctioned off for fracking.
  • ● On Dec. 14, 72,000 acres in Wyoming are slated to be auctioned off.

The pace of public lands giveaways is set to increase in 2018. The BLM's lease sales for the first half of the year already total almost 1 million acres .  "While oil and gas companies get rich, Americans are shouldering the cost of climate change , air pollution , water contamination, lost wildlife habitat and degraded sacred lands," said Fischer. "This administration has made abundantly clear that the American public and their lands are nothing more than a 'burden' to industry."   The December lease sales come amid growing protests over the BLM's management of public lands for fracking. WildEarth Guardians filed administrative appeals (also called "protests") challenging the proposed leasing in Colorado , Montana , Nevada , New Mexico , Utah and Wyoming as illegal under federal law.  "In every western state, the Bureau of Land Management is sidestepping the law, shortcutting its reviews and doing everything it can to lock out the American public," said Fischer. "Sadly, on our public lands, the BLM is putting fracking above everything."

ALEC, Corporate-Funded Bill Mill, Considers Model State Bill Cracking Down on Pipeline Protesters – Steve Horn - At its recent States & Nation Policy Summit, the American Legislative Exchange Council (ALEC), a group that connects state legislators with corporations and creates templates for state legislation, voted on a model bill calling for the crack down and potential criminalization of those protesting U.S. oil and gas pipeline infrastructure.Dubbed the Critical Infrastructure Protection Act, the model legislation states in its preamble that it draws inspiration from two bills passed in the Oklahoma Legislature in 2017. Those bills, House Bill 1123 and House Bill 2128, offered both criminal and civil penalties which would apply to protests happening at pipeline sites. Critics viewed these bills as an outgrowth of the heavy-handed law enforcement reaction to protests of the Dakota Access pipeline.At the time the bills were still under proposal, the Oklahoma American Civil Liberties Union (ACLU) criticized them, saying they had the potential to quash free speech and the right to assemble as protected by the First Amendment. “The First Amendment protects our right to stand in the Capitol rotunda,” Ryan Kiesel, executive director of the Oklahoma ACLU, told the Oklahoma Gazette in March. “It also protects the rights of Oklahomans and Americans to engage in speech and activity, knowing that if they engage in civil disobedience, that the penalties they face should not be disproportionate. If we chill and keep people home, away from the cameras and away from the public they are trying to wake up on any number of issues, we are doing a real disservice to our democracy.”  Alyssa Hackbarth, a spokesperson for ALEC, did not respond to multiple requests for comment clarifying whether the model bill actually passed through the Energy, Environment and Agriculture Task Force. Officials working for the Task Force also did not respond to a request for comment. ALEC's website still lists the bill as a draft proposal introduced on December 7.

Final GOP tax bill would allow Arctic refuge drilling | TheHill: A tax cut compromise reached Wednesday by GOP negotiators contains a plan to drill for oil in the Arctic National Wildlife Refuge (ANWR), Sen. Lisa Murkowski (R-Alaska) said. At a tax bill conference committee meeting, Murkowski said the bill “contains the single most important step I believe we can take to strengthen our energy security and create new wealth.” “We fought long to authorize a program for energy development in Alaska’s nonwilderness 1002 area,” she said, using the formal term for the area within the refuge that would see drilling under the GOP plan.Murkowski said the terms of the bill would raise “more than $1 billion within 10 years and it will likely raise over $100 billion for the federal Treasury” over the long term. “This is new wealth from responsible development and the investment it brings,” she said. "It’s time to open up the 1002 area and it’s time to reform our broken tax code.” The Senate-passed version of the tax bill included a Murkowski provision calling for drilling lease sales in a corner of the 19 million-acre ANWR within the next decade, with the federal and Alaskan governments splitting the revenues. The oil industry and supporters of the plan insist it will raise significant revenue, though analysts and critics of ANWR drilling question whether there is enough demand to match those estimates. Rep. Raúl Grijalva (D-Ariz.), another tax bill negotiator, called the ANWR provision “a completely unrelated, unpopular provision that should not be forced through this Congress under these procedures.” “We don’t need the oil. We’re exporting millions of barrels per day in this country and I hope there is consideration given to that.” 

GOP Tax Bill Sneaks Plan to Drill Arctic Refuge -- The pristine Arctic National Wildlife Refuge ( ANWR ) faces a looming threat from oil and gas drilling. The little known provision , proposed by Sen. Lisa Murkowski of Alaska, was quietly included in the House and Senate Republicans' compromise tax bill. The bill “contains the single most important step I believe we can take to strengthen our energy security and create new wealth," Murkowski, who chairs the Energy and Natural Resources Committee, said Wednesday at the tax bill conference committee meeting. “We fought long to authorize a program for energy development in Alaska's nonwilderness 1002 area," she said. The “1002 area" is a 1.5-million-acre coastal plain that holds potentially large deposits of oil and gas but also contains crucial wildlife habitats. A new analysis by the Center for American Progress and Conservation Science Partners describes the coastal plain that Sen. Murkowski's rider would auction off for drilling as the “biological heart" of the Arctic Refuge that hosts one-third of all polar bear denning habitat in the U.S. and one-third of the migratory birds that come to the Arctic Refuge. It is also considered sacred to the indigenous Gwich'in people, who sustain themselves from the caribou that migrate there.  Opening up the area to petroleum exploration has been deferred since ANWR's establishment in 1980. Drilling ANWR would help pay for the Republicans' sweeping corporate tax cut plan. Murkowski insisted that her rider would raise “more than $1 billion within 10 years and it will likely raise over $100 billion for the federal Treasury" over time.  Opponents of ANWR drilling are now racing against time since Republican leaders are hoping to get their tax bill signed by President Donald Trump by Christmas.

Here’s what oil drilling looks like in the Arctic refuge, 30 years later - These satellite images of a small part of the Arctic National Wildlife Refuge show the site of what, so far, is the only oil well ever drilled in the refuge, an exploratory well known as KIC-1 that was completed in the mid-1980s. The well was plugged and abandoned, and the drilling equipment and a special timber pad it sat on have long since been removed.  But as these infrared images show, even after three decades, the well’s footprint — about 600 feet long on its longest side — is easily distinguishable from the undisturbed tundra around it. The arctic refuge is a vast region of tundra: mosses, sedges and shrubs underlain by permafrost. But the area is also believed to contain large petroleum reserves. Since the current boundaries of the refuge were established by an act of Congress in 1980, there has been a debate over whether oil and gas exploration should be allowed in a portion of the area, 1.5 million acres on the coastal plain. The issue has been revived in recent months, and through the budget-making process Republicans in Congress are perhaps closer than ever to opening the area to drilling.  Here’s the site in 1988, a couple of years after operations at the well ceased, when most of the vegetation was dead:  “It’s easy to do something on the tundra but it’s very difficult to restore,” The drillers took care to protect the tundra, creating an ice runway to fly in huge timbers to serve as the pad, instead of a potentially more destructive gravel base. The pad was insulated from the ground as well, and the operators also dug two pits next to it to hold the mud and rock that was drilling waste. While the timber pad offered some advantages, it effectively killed the vegetation beneath it,  Without the vegetative cover to keep the permafrost cold, it began to thaw. Vertical wedges of solid ice melted, creating pools of water. The two pits, which were initially covered with soil, subsided over the years, leading to more pooling. They were topped with gravel a decade ago and now have very little vegetation. Given all the thawing and melting, Ms. Jorgenson said, about 17 percent of the site is covered in water now, compared with about 2 percent of the surrounding tundra.

Scott Pruitt and a crew of EPA aides just spent four days in Morocco promoting natural gas - Environmental Protection Agency Administrator Scott Pruitt returned Wednesday from a trip to Morocco, where he talked with officials about their interest in importing natural gas as well as other areas of “continued cooperation” between the two countries. The EPA disclosed the trip late Tuesday, issuing a media release that included photos and a statement from Pruitt saying that the visit “allowed us to directly convey our priorities and best practices with Moroccan leaders.” “We are committed to working closely with countries like Morocco to enhance environmental stewardship around the world,” Pruitt said. The purpose of the trip sparked questions from environmental groups, Democratic lawmakers and some industry experts, who noted that EPA plays no formal role in overseeing natural gas exports. Such activities are overseen primarily by the Energy Department and Federal Energy Regulatory Commission. Pruitt took along seven aides and an undisclosed number of staff from his protective detail. The group included four political aides, including Samantha Dravis, associate administrator of the Office of Policy, and senior advisers Sarah Greenwalt and Lincoln Ferguson, as well as one career official, Jane Nishida, principal deputy assistant administrator of the Office of International and Tribal Affairs. Pruitt’s head of security determines how many advance staffers travel on any given trip, EPA officials said, and in this instance it was two. At the request of Senate Democrats, the EPA inspector general is looking into Pruitt’s use of military and private flights, as well as his frequent visits to his home state of Oklahoma during his first few months on the job. “It seems strange that Administrator Pruitt would prioritize a trip to Morocco to discuss natural gas exports while there is no shortage of more pressing issues here in the U.S. that actually fall within the jurisdiction of the agency he leads,” said Sen. Thomas R. Carper (Del.), the top Democrat on the Senate Environment and Public Works Committee. “I presume Mr. Pruitt is aware his agency’s inspector general is conducting an investigation into his questionable travel, which makes his decision to take this trip an odd choice at best.” Sierra Club Executive Director Michael Brune said in a statement that Pruitt “acts like he is a globe-trotting salesman for the fossil fuel industry who can make taxpayers foot the bill.” 

Rise of electric vehicles threatens oil industry -- Refiners and oil executives are beginning to look at the threat that electric cars pose to the future of diesel and gasoline as the vehicles gain staying power. The issue is being raised more as China and Europe announce they will phase out liquid fuels and shift vehicle fleets to all-electric cars, trucks, and buses. In addition, companies are pledging to begin producing more electric cars. Volkswagen, the largest global automaker by sales, announced that it will sell an electric version of all 300 of its car models by 2030. Some oil CEOs say the issue is not getting enough attention, but it should. “Seventy percent of oil consumption is as a transportation fuel. So, if you move those numbers in the long-term it can cause titanic shifts,” said Dan Eberhart, an oil executive who owns Canary, one of the largest oil drilling wellhead manufacturers in the country. Eberhart believes that most news outlets miss the significance of the electric car on refiners and oil producers. They “bifurcate the electric car story and they relate it to the automobile companies, and 10 minutes later they talk about oil prices,” he explained. “But they never connect the two.” The issue is gaining the attention of the refinery industry, which is starting to examine the impact in their long-term planning scenarios. The refiners aren’t being “squeezed” by electric vehicles, yet, according to Stephen Brown, vice president for federal affairs at the large independent refiner Andeavor, formerly Tesoro. “But [we] need to look 15-25-30 years down the road and to work with market forces rather than government mandates supported by subsidies, which is all that EVs have going for them right now.”

US House panel passes bill repealing oil, gas transparency law - The House Committee on Financial Services passed a bill Wednesday that would permanently repeal a federal rule requiring US-traded oil and natural gas companies to disclose payments to foreign governments. If ultimately approved by the House and Senate and signed into law by President Trump, the bill would prevent the anti-corruption transparency rule mandated in 2010's Dodd-Frank Wall Street Reform and Consumer Protection Act from taking effect. The bill, HR 4519, was introduced in the House by Michigan Representative Bill Huizenga, a Republican, on December 1. The 114-word bill, which has no co-sponsors, simply repeals section 1504 of the Dodd-Frank law. Section 1504 requires all companies traded on US exchanges and involved in the commercial development of oil, gas or minerals to disclose payments made to any government and file annual reports with the Securities and Exchange Commission. The law was opposed by the American Petroleum Institute, the oil and gas industry's leading trade group, which sued the SEC in a case that ultimately led the US District Court for the District of Columbia to vacate an earlier payment-transparency rule finalized by the agency in 2012. In February, after Senate and House approval, Trump signed a resolution which repealed the transparency rule as finalized by the SEC in 2016, but it did not change the underlying law within Dodd-Frank. Transparency advocates had hoped the SEC would be able to draft another transparency rule to meet the law. In a statement Wednesday, Senator Ben Cardin, Democrat-Maryland, and former Senator Richard Lugar, Republican-Indiana, urged House leaders to reject the bill repealing the transparency law. Cardin and Lugar co-authored the provision in the original Dodd-Frank bill. "Who benefits from keeping the public in the dark?" Cardin and Lugar asked. "Secrecy breeds corruption."

Investors pour cash into U.S. shale despite questions on returns (Reuters) - Financiers keep pouring cash into the shale oil sector, providing producers with a path to keep U.S. output rising through the middle of the next decade. The United States is on track to deliver up to 80 percent of the world’s oil production gains through 2025, the International Energy Agency estimates, increases fueled in part by easy access to capital. Rising U.S. production is undermining OPEC’s attempts to curb global supply and boost prices, forcing the oil cartel to continue restraining output through the end of 2018. Hedge funds and private equity firms have given producers a range of new and traditional financial levers they can pull as needed to keep shale rigs drilling, according to interviews with more than a dozen financiers, advisers and executives. The money continues to flow despite rising pressure from some investors for drillers to prioritize better profit margins over expanded production. Producers holding land in prime fields with oil trapped in shale rock are having little trouble financing their fracking projects. “If you’ve got the rocks, you can get the money,” The IEA predicts U.S. shale oil output, now about 6.17 million barrels per day (bpd), will rise another 8 million bpd by 2025. That would turn the world’s largest oil-consuming nation into a net exporter of oil. The United States already is a net exporter of natural gas. Through the third quarter of this year, private equity firms have put $20.26 billion into energy-related deals, 36 percent more than all of last year, according to financial data provider Preqin. Initial stock offerings for U.S.-listed oil and gas firms raised $2.93 billion this year, up from $1.52 billion in 2016, according to Thomson Reuters data. Another way to finance drilling - production hedging, or contracts producers use to lock in prices on future output - also is on the rise this year. Hedging acts as insurance against price drops, letting producers drill with more certainty they can earn a profit. Forty midsize producers tracked by researcher PetroNerds LLC hedged 45 percent of their production in the third quarter, up from 36.5 percent a year earlier. Those same companies boosted capital spending by nearly two-thirds this year. 

Global oil field spending set to rise by $25 billion in 2018, led by U.S., survey says - Houston Chronicle: The oil industry's capital expenditures – the lifeblood of the oil field service companies that employ thousands of people in Houston and across Texas – will increase by 15 percent in the United States next year, compared with an increase of 49 percent last year, according to a survey of more than 300 companies by investment bank Evercore ISI. That means the U.S. oil industry's capital expenditures will climb by $13.3 billion next year, vaulting above $100 billion from this year's haul of $87.7 billion. And that forecast may have to be revised if oil prices rise further. "2018 could be the first in several years that commodity prices surprise to the upside," Evercore ISI analysts said. Almost two thirds of the oil companies in the investment bank's survey said they were not increasing their budgets to account for service cost inflation. International oil field spending will rise by 4 percent to $268.5 billion, an improvement over this year's 6 percent drop to $258.2 billion. Canadian oil producers could boost investments 9 percent next year to $16.1 billion, compared with a 36-percent boost to $14.8 billion in 2017. All told, global oil field spending could rise 7 percent, or $24.8 billion, next year, to $385.5 billion. That's higher than this year's 4 percent growth, but still 50 percent below the 2014 peak in the oil industry's spending. Global oil field spending fell 33 percent in 2016, the worst year of the oil-market collapse.

The 'Unknown Unknowns' That Threaten U.S. Shale -- Three years after the oil price crash, the U.S. shale patch is on its second growth phase and is expected to continue to increase its production, at least through the next five years. The global oil markets have become increasingly dependent on U.S. tight oil supply - andthe oil industry is still coming to grips with this new reality, Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie, wrote in a recent article.Current projections put the Permian on the forefront of the United States’ ability to deliver increased tight oil supply to the global markets. However, forecasts for the shale patch are as dynamic as production and drilling rates are. And some ‘known unknowns’ have been surfacing such as higher gas-to-oil ratios in some wells, and the parent/child wells issue, Flowers says.Wood Mackenzie said last month that signs had started to show that intensified drilling in the Permian doesn’t deliver commensurate volumes of oil. Although WoodMac thinks that such setbacks could just be growing pains and Permian drillers could indeed ‘change the laws of physics’, it had warned three months ago that drillers might soon start to test the region’s geological limits. If exploration and production companies can’t overcome the geological constraints with tech breakthroughs, Permian production could peak in 2021, putting more than 1.5 million bpd of future production in question and potentially significantly influencing oil prices, WoodMac said in September.In his December article, WoodMac’s Flowers included this observation in the Permian’s ‘known unknowns’:“Growth might also be constrained by shareholders demanding that independents rein back from volume-driven targets.” Those ‘known unknowns’ serve as a warning: the oil market can’t be complacent and just assume that the Permian boom will deliver as expected, according to Flowers. The Wolfcamp may be the star of the Permian, WoodMac says, but “there are more than likely ‘unknown unknowns’ out there too. And if there are, there’s not another Permian ready to step in; and conventional options will take time to crank into action.” The Eagle Ford and the Bakken combined represent nearly half of the current U.S. tight oil production, according to Wood Mackenzie, which is expressing new doubts that those two plays could offer long-term commercial drilling inventory as operators move out beyond the sweet spots. Therefore, the analysts downgraded the growth rates for both plays from the mid-2020s, but have significantly upgraded the Permian growth pace, especially for the Wolfcamp basin.

Will Oil Producers Do As They Say Or Do As They Sell in 2018  -- North America's oil producers have adopted a meek tone of late. But the numbers suggest they're locked and loaded heading into 2018.Bloomberg New Energy Finance on Wednesday released an extensive new database (available only to Bloomberg Terminal clients), compiled by Peter Pulikkan, Bert Gilbert, Daniel McLaughlin and Jacob Fericy, detailing the hedging strategies of 53 U.S. and Canadian exploration and production companies. One thing that leaps out from all the data is just how much of next year's oil and gas production has apparently been locked in already by E&P firms -- with one important caveat. As I detailed here in April, producers often use hedges (such as selling futures) to lock in prices on expected output; managing their market risk and providing a modicum of certainty on cash flows for management, shareholders and lenders. Hedging is, along with the bond and equity markets, a financial mechanism to keep the shale machine running. And, as BNEF's database shows, E&P firms have been cranking that mechanism at a furious pace of late: In the third quarter, E&P firms locked in hedges on a lot more expected production for 2018, including an extra million barrels a day for the first half That surge in hedging in the third quarter was no accident, as 2018 swaps prices for Nymex West Texas Intermediate rallied strongly from June's trough: Oil swaps for 2018 rallied in the third quarter, providing an opportunity to lock in higher prices on future production Oil rallied on a combination of OPEC supply cuts finally coming through and a growing conviction they would be extended (which turned out to be right), along with some geopolitical spice.There is some irony in this. When OPEC, Russia and some other producers originally agreed to cut supplies a year ago, they touched off a rally in oil prices -- and hedging by E&P firms, adding fuel to a recovery in U.S. oil output. OPEC's supply cuts provided fuel for the recovery in U.S. oil output.

 EIA's Short Term Energy Outlook -- December 12, 2017 --

  • Average Brent crude oil spot prices climbed by $5 per barrel last month, rising from October’s average of $58 to $63 per barrel in November. Our forecast, however, expects that average to retreat in 2018 to an annual average of $57 per barrel.
  • U.S. crude oil production increased in November, up roughly 400,000 barrels per day from October’s production levels. EIA attributes a large share of that increase to production in the Gulf of Mexico, which has recovered from the effects of Hurricane Nate. An additional increase of 100,000 barrels per day in December is forecast to put production at 9.77 million barrels per day for the month.
  • For 2017, EIA estimates U.S. crude oil production to average 9.2 million barrels per day. The forecast going into 2018 expects to see production increase to 10.0 million barrels per day, which would become the highest average annual production rate of crude oil in U.S. history.
  • EIA expects December’s U.S. regular gasoline retail price to average $2.59 per gallon, roughly 34 cents above the average in December 2016, with the increase mostly reflecting higher crude oil prices this year.
  • EIA’s last short-term forecast of 2017 projects that U.S. regular retail gasoline prices will average $2.51 per gallon in 2018.
  • EIA forecasts U.S. dry natural gas production to average 73.5 billion cubic feet per day in 2017, and EIA models suggest that dry natural gas production levels will approach 80 billion cubic feet per day in 2018. 
  • Growing production in the Marcellus and Utica shale regions is a large driver of this increase.
  • Natural gas and coal’s shares of utility-scale electricity generation are expected to remain relatively unchanged through 2018. Both natural gas and coal are forecast to hover near 32% and 31%, respectively, in 2018.
  • EIA forecasts that decreased exports and marginal growth in coal consumption will lower coal production to 771 million short tons in 2018, down about 20 million short tons from the expected 2017 production level of 791 million short tons. Renewables:
  • Renewables, not including hydroelectric generation, should gain two percentage points in their share of utility-scale generation from about 8% in 2016 to 10% in 2018. A significant part of that projected increase is tied to the forecasted growth in wind generating capacity during 2018.

Fracking drives US oil exports to record high - NZ Herald: The world's largest oil consumer exported more hydrocarbons than ever before in 2017 and shows no signs of slowing down.You name it - crude oil, gasoline, diesel, propane and even liquefied natural gas - all were shipped abroad by the US at a record pace.While the surge comes many years after the shale boom started, it can be traced straight back to the growth of horizontal drilling and fracking.US exports are poised to expand even further, as the fear of peak oil supply has all but vanished just as a new demand threat emerges in the form of electric vehicles. Americans are expected to end the year pumping oil out of the ground at rates unseen since the early 1970s. More and more of it is going overseas, giving OPEC a headache as the group restrains its own output. Last year the US tested the export waters after a nearly four-decade-old ban was removed. But this year, purchases of US light, sweet crude have skyrocketed as pipeline and dock infrastructure was built out and the wider price spread between Brent and West Texas Intermediate crude coaxed more cargoes abroad. Canada, once the only regular buyer of US crude, finds itself competing with refiners in Europe and Asia. China's appetite for American oil is voracious: in April, China bought more than Canada did for the first time. Of all the emerging trade flows this year, crude deliveries into Europe and Asia are most surprising, according to Smith. And if the price of European oil stays suspended into the New Year - a good possibility after the Forties oil pipeline was shut this week to repair a crack - US exports will continue hold above 1 million barrels a day. 

US fuels the world as shale boom powers record oil exports - Crain's Cleveland Business --Americans are expected to end the year pumping oil out of the ground at rates unseen since the early 1970s. More and more of it is going overseas, giving OPEC a headache as the group restrains its own output.Last year the U.S. tested the export waters after a nearly four-decade-old ban was removed. But this year, purchases of U.S. light, sweet crude have skyrocketed as pipeline and dock infrastructure was built out and the wider price spread between Brent and West Texas Intermediate crude coaxed more cargoes abroad.Canada, once the only regular buyer of U.S. crude, finds itself competing with refiners in Europe and Asia. China's appetite for American oil is voracious: in April, China bought more than Canada did for the first time."It's pretty amazing, really," said Matt Smith, ClipperData LLC's director of commodity research. "You learn to never say never in this market."Of all the emerging trade flows this year, crude deliveries into Europe and Asia are most surprising, according to Smith. And if the price of European oil stays suspended into the New Year — a good possibility after the Forties oil pipeline was shut this week to repair a crack — U.S. exports will continue hold above 1 million barrels a day. "The U.S. has fully integrated itself into the global market," Smith said by phone. "You have U.S. crude going into Europe, and European crude heading elsewhere because the U.S. is selling crude into its own backyard."

Huge WTI-Brent Spread Boosts U.S. Crude Exports - CNBC published an article late last week based on our ClipperData, highlighting how deliveries of U.S. crude grades into China climbed to a record in November. As U.S. crude and product export markets evolve, new patterns in loadings, destinations, grades and purchasing present themselves in our granular data.As the chart below illustrates, U.S. crude has arrived at ten different Chinese ports so far this year, with the most heading to the northern port of Qingdao - home to the majority of Chinese independent refiners. The port has discharged a variety of different U.S. grades, including Bakken, Mars, Midland WTI, Southern Green Canyon and Thunderhorse. Total receipts of U.S. crude into China last month climbed to just shy of 300,000 bpd:As the Brent/WTI spread widened out post-Hurricane Harvey in September, an increasingly discounted price for domestic crude has encouraged more barrels to leave the country. October's export loadings correspondingly climbed to a record of 1.4 million barrels per day. Not only have more barrels headed to Asia, but also to Europe. U.S. crude export loadings bound for Europe jumped to nearly 600,000 bpd in October. Eight European countries have received U.S. crude this year. While the U.K. is the leading European recipient in terms of volume this year (with crude predominantly heading to Exxon's Fawley refinery and Valero's Pembroke refinery), Poland has been the latest addition to the list, with four cargoes heading in its direction in recent months. The export boom is not limited to crude. We discussed recently how U.S. product exports of gasoline, diesel and LPG have been booming, while this Bloomberg article includes our observation that U.S. LNG exports to the Middle East are like selling ice to the Eskimos. Nearly thirty countries have already received U.S. LNG since Cheniere Energy's Sabine Pass export terminal started early last year, and export destinations are only likely to grow with the imminent start of exports from Dominion Energy's Cove Point terminal.

Top Oil Buyers Seek Chemistry in Love Affair With U.S. crude  - Asian refiners are discovering that the quality of cargoes varies, leading to fluctuations in the type of fuels they can produce. The shale boom and the end of a U.S. oil-export ban have proven a boon to buyers from China to India as traditional suppliers such as Saudi Arabia cut output to clear a glut. And while shipments from the Gulf Coast have soared, refiners are shifting their focus to crudes with consistent characteristics. That’s because varieties such as Eagle Ford are a blend of shale oils pumped from wells in south Texas spanning an area about 65 times the size of New York City. Crude from the Middle East, Africa as well as the U.S. Gulf of Mexico come from a small cluster of fields with more stable chemical specifications. Buyers are now turning to conventional American grades such as Mars and Poseidon, or favoring shale supply piped from specific assets. “The flow of U.S. oil to Asia is here to stay, but Asian importers are learning that not all grades are equally desirable,” says Tushar Tarun Bansal, a consultant from McKinsey Energy Insights. “Buyers are wary of grades such as Eagle Ford and can’t take much more of it.” Three Asian refiners that purchased and refined Eagle Ford shale oil don’t plan to buy significant volumes of the grade due to concerns over the consistency of its quality, according to a Bloomberg survey of officials at the companies. Two of the three respondents said their cargoes -- each between 500,000 and 1 million barrels in size -- yielded more light distillates such as liquid petroleum gas and naphtha than they expected. Companies typically select a mix of different crudes to process, choosing grades based on chemical characteristics that will yield higher volumes of the fuels that are most in demand. When the oil specifications are inconsistent, plants may pump out less of the products that the refiners want and more of what they don’t require at the time. 

Upside Down - Condensate Production Decline Hits Splitters And Neat Conde Exports -- The sharp decline in U.S. condensate production since early 2015 and the end to the ban on U.S. crude oil exports a few months later were a one-two punch for the companies that made throughput commitments to condensate splitters and made other conde-related infrastructure investments. In what seemed like a flash, conde supply plummeted and the steep price discount to WTI and other light crude that made conde so attractive for splitting and exporting was gone. Holders of splitter capacity were paying top-dollar for what conde they could corral, and operators were forced to run their brand-new facilities at far less than capacity. And, when the general ban on crude exports was lifted in December 2015, the special status that conde had enjoyed since exports of lightly processed conde were permitted in June 2014 was a thing of the past. Today, we continue our review of a conde world in upheaval, this time with a focus on splitters and exports. As we said in Part 1, superlight crude and conde sit side-by-side at the far end of the crude-oil spectrum. They’re both sweet (low-sulfur) and very pourable — superlight (using EIA’s API gravity breakdown, 50.1 to 55.0 degrees) is like iced tea, and conde (API gravity of 55.1 or more — also EIA’s breakdown) is like cream soda — and they can either be refined, exported, blended with heavier crudes, or (for conde) run through a splitter. A splitter uses atmospheric distillation to separate high-API-gravity conde into its component fractions to produce intermediate, semi-finished blend stocks like naphthas and distillates that are processed further at refineries. (More on splitters in a moment.)

Canada’s pipeline data is full of holes -   Spill. Respond. Repeat. Without urgent improvements to Canada’s patchwork approach to collecting information about oil and gas pipeline spills, this approach will continue into the future.That’s the warning sent by a team of researchers who assessed records of pipeline failures from the National Energy Board (NEB). In their paper, the researchers show how the records kept by the NEB—charged with regulating pipelines that cross provincial boundaries—are woefully incomplete.  Comprehensive pipeline failure data is vital because it provides the raw material for researchers, regulators, and companies to assess the risks of pipeline failures, Belvederesi says.  The study comes in the wake of a number of contentious pipeline proposals in Canada. The most fractious of the projects underway are those that intend to move Alberta oil sands output to the British Columbia coast—such as Kinder Morgan’s Trans Mountain expansion—or to US refineries, which is the plan with Keystone XL.The researchers say the problem with how the NEB documents pipeline failures lies in its piecemeal approach. The NEB monitors just nine percent of the oil and gas pipeline system in Canada—only the pipelines that cross provincial boundaries. The remaining 91 percent is the responsibility of individual provinces.  Then there is the quality of the NEB data. A 2015 pipeline failure near Fort McKay, Alberta, for example, was severe enough to be considered an “adverse” incident, but NEB records do not state how much pollutant was released, or what effect the accident had on the environment. Such omissions can affect the prediction of and response to future spills, says Belvederesi, particularly on the same pipeline. If a past failure is well-understood, she says, steps can be taken to prioritize site maintenance and have equipment and plans ready for timely emergency responses in areas prone to problems.

Mexico Says Deepwater Oil Tender Doomed By Brazil Competition | Rigzone: (Reuters) - Mexican national oil company Pemex on Friday blamed the cancellation of a potentially lucrative deepwater Gulf of Mexico project on weak investor appetite due to competition from recent auctions in Brazil and low oil prices.The country's oil regulator on Thursday canceled a tender for its Nobilis-Maximino project, a joint venture with Pemex , as company interest was not as robust as initially expected.On Friday, Pemex, known officially as Petroleos Mexicanos, cited a late October deepwater oil auction in Brazil for lessening interest in its project. Six of eight blocks in Brazil were awarded to majors, including Royal Dutch Shell and ExxonMobil."(One) factor that affected appetite for new projects was the investment commitment recently taken on by possible bidders," Pemex said in a statement. Companies that won blocks in Brazil had looked at the Nobilis-Maximino data, it added.Nearly 30 oil companies had begun the process of pre-qualifying for the Mexican auction, according to data from the National Hydrocarbon Commission, including U.S.-based Chevron and Britain's BP.The failure of the project is a setback for Mexico's energy opening after a decades-long monopoly for Pemex.Nobilis-Maximino sits in Mexico's deepwater Gulf near the U.S.-Mexico maritime border in the productive Perdido Fold Belt, and is estimated to contain reserves of about 502 million barrels of mostly light crude.Nobilis-Maximino was due to be awarded on Jan. 31, along with another 29 similar deepwater projects. Those tenders, which are still going ahead, are potentially more attractive because companies can bid to develop them without tying up with Pemex. Pemex said weak oil prices - with medium- and long-term oil price projections at $50-$65 per barrel - have also been a factor in oil companies exercising caution about taking on complicated, expensive deepwater projects like Nobilis-Maximino. Pemex said it would consider a future farm-out, or joint venture, for the project. 

Oil Producers Turning To Crypto To Solve Sanctions Problems -- Last week, Venezuela announced it would develop a national cryptocurrency backed by its oil reserves, the Petro.  Now there is a report that Russia is considering the same thing.  Iran will likely follow suit. As of right now this is just a rumor, but it makes some sense. So, let’s treat this rumor as fact for the sake of argument and see where it leads us. The U.S. continues to sanction and threaten all of these countries for daring to challenge the global status quo. There is no denying this. And so much of what we see in the geopolitical headlines are knock-on effects of this challenge.  From the Middle East to North Korea, the Dutch changing their laws to block Nordstream 2 to the Saudis breaking off relations with Qatar, everything you read about in the news is a move on the geopolitical “Go” board. Because at the heart of this is the petrodollar. Contrary to what many believe, the petrodollar is not the source of the U.S. dollar’s power around the world, but rather the U.S.’s main fulcrum by which to keep competition out of the markets. It is a secondary effect of the dollar’s dominance in global finance today. But it is not the main driver. Financial market are simply too big relative to the size any one commodity market for it to be the fulcrum on which everything hinges. It was that way in the past. But it is not now. That said, however, getting out from underneath the petrodollar gives a country independence to begin building financial architecture that can be levered up over time to threaten the institutional control it helped create. U.S. foreign policy defends the petrodollar along with other systems in place – the IMF, the World Bank, SWIFT, LIBOR and the central banks themselves – to maintain its control. The main oil producers, however, can escape this control simply by selling their oil in currencies other than the U.S. dollar. That’s not enough to dethrone the dollar, but, like I just said, it is where the process has to start. Therefore, any and all means must be employed to defend the dollar empire by keeping everyone inside that system.

UK Heating Gas Prices Spike To 2013 Highs Amid Weather "Yellow Warning" -- The U.K.’s Met Office issued a ‘yellow’ warning after dumps of snow over the weekend disrupted travel, sending the price of same-day heating gas prices to their highest since 2013...The average temperature in the U.K. for the rest of Monday will be 1 degree Celsius (34 Fahrenheit), compared with a 10-year average of 5.2 Celsius, according to Bloomberg’s weather model. Bloomberg also notes that supplies in the system could plunge 11 percent by the end of the day,   according to network manager National Grid Plc. Supplies from the Bacton terminal in Norfolk are below the 10-day average after Total SA said exports from the Elgin Franklin field that feed it have been reduced by about 60 percent from normal levels, potentially until Wednesday evening. Flows into the St. Fergus terminal in Scotland also plunged. Storage supply picked up some of the slack, rising to the highest since Dec. 1. “Whilst the weather-related heating demand was expected, the reduction in flows via a number of terminals was not,” Nick Campbell, an energy risk manager at Inspired Energy Plc, said by email.“Therefore this has left the system tight and battling to pull in more gas from the continent.”

Major Forties oil pipeline to be closed for repairs - BBC News: One of the UK's most important oil pipelines is being closed after a crack was discovered in Aberdeenshire. The Forties pipeline carries crude North Sea oil across land for processing at Grangemouth. The crack was discovered last week at Red Moss near Netherley. The pipeline's owner Ineos said on Monday that, despite pressure being reduced, the crack had extended. The Forties pipeline carries about 40% of North Sea crude oil. More than 80 platforms will have to suspend production. The price of Brent crude rose about 2% to $64.69 a barrel amid surprise that the pipeline could be shut for about three weeks - far longer than expected. Ineos said there would be a big impact on the industry but not on consumers.Ineos said in a statement: "Last week during a routine inspection Ineos contractors discovered a small hairline crack in the pipe at Red Moss near Netherley. "A repair and oil spill response team was mobilised on Wednesday, after a very small amount of oil seepage was reported. "Measures to contain the seepage were put in place, no oil has been detected entering the environment and the pipe has been continuously monitored." The company added: "A 300m cordon was set-up and a small number of local residents were placed in temporary accommodation as precautionary measure. The pipeline pressure was reduced while a full assessment of the situation was made. "The incident management team has now decided that a controlled shutdown of the pipeline is the safest way to proceed." Ineos said the shutdown would "allow for a suitable repair method to be worked up based on the latest inspection data, while reducing the risk of injury to staff and the environment". 

Britain's biggest oil pipeline shut 'for weeks' for repairs (Reuters) - Britain’s largest oil pipeline could shut down for weeks for unscheduled repair work, sending the price of crude to new two-year highs and triggering a steep rally in natural gas prices, just as a cold snap sweeps the country.  The Forties Pipeline System, which carries around 450,000 barrels per day of Forties crude from the North Sea to the Kinneil processing terminal in Scotland, had been operating at reduced capacity since December 7 when a routine inspection revealed a small leak. Ineos, a privately owned Anglo-Swiss chemicals company, owns the pipeline and said it had taken the decision to close the system completely. Oil traders estimated this was the first total closure since 2011, when then-operator BP shut it down while a suspected World War II bomb was removed from the seabed. “It’s early days and it is premature to give a time frame for the repair work. We can’t give a precise estimate other than to say it is a matter of weeks, rather than days,” an Ineos spokesman said. Ineos bought the Forties Pipeline System (FPS) from BP less than two months ago for $250 million. The pipeline, which handles nearly a quarter of total North Sea crude output, is also a major route for bringing natural gas to Britain that has been produced offshore. Britain is in the grip of a cold front that has brought heavy snowfall and prompted the closure of schools and disrupted travel across the country. Ineos, which also owns the 200,000-barrel per day Grangemouth refinery in Scotland, said the plant would have to seek “alternative supplies of crude”, but that there was enough oil currently in storage at Grangemouth for the company to “manage the situation.” Fiona Legate, a senior analyst for the North Sea oil industry at consultant Wood Mackenzie, said even a temporary shutdown of the pipeline would have wide-reaching implications for the UK oil and gas industry. “FPS transports liquids from over 80 fields, including the two largest producers in the UK - Buzzard and Forties,” she said. “The bulk of throughput from FPS comes from 10 fields ... In 2017, FPS transported more than 40 percent of liquids in the UK Continental Shelf.” 

Oil, Gas Firms Could Lose Millions Due to Forties Pipeline Shutdown | Rigzone: Independent oil and gas firms EnQuest plc and Premier Oil plc could lose millions of dollars in the event of a prolonged shut down of the Forties Pipeline System, oil and gas analysts at GMP FirstEnergy have confirmed.The analysts highlighted that EnQuest’s operated Greater Kittiwake Area and Scolty/Crathes development, along with Premier Oil’s operated Balmoral area, non-operated Elgin-Franklin asset and other minor fields, would be impacted as a result of a shut down of Britain’s largest oil pipeline.GMP analysts have stated that every month of shut down would reduce the energy investment banking firm’s expected cashflow forecast for EnQuest and Premier Oil by around $7 million and between $10-12 million, respectively.The shut down of the pipeline system would also be felt by a number of other companies, as highlighted by oil and gas analysts at investment banking firm Jefferies. These analysts estimate that thousands of barrels of output from BP plc, Total SA, Chevron Corporation, ExxonMobil, Eni and ConocoPhillips will be affected.“Forties is one of the four components of the Brent pricing system, and if the duration of the outage is for several weeks it should put upward pressure on the Brent price,” Jefferies analysts said in a statement sent to Rigzone.Ineos confirmed Monday that it has decided to implement a controlled shut down of the Forties Pipeline system after a hairline crack was found in the pipe at Red Moss near Netherley, south of Aberdeen.

Ineos begins Grangemouth shutdown after Forties outage: sources (Reuters) - Ineos has begun shutting units at its Grangemouth oil refinery in Scotland due to the unplanned outage at its Forties North Sea crude pipeline, which threatens to choke the plant’s feedstock, industry sources said on Wednesday. The company is also considering bringing forward maintenance work at Grangemouth, originally scheduled for next year, to have it done while units are down, the sources said. The disruption to operations at Grangemouth follows the unexpected shut down of Ineos’s Forties pipeline early this week after a crack was found. The pipeline carries about 450,000 barrels per day (bpd) of Forties crude, roughly a quarter of the North Sea’s total output, and its closure for repairs sent global crude prices soaring to a two-year high. Trade sources said Ineos shut a 65,000 barrels per day crude distillation unit at the Grangemouth refinery on Wednesday and plans to shut another 110,000 bpd unit there early next week. Ineos said it was still considering repair options on the Forties pipeline and reiterated any repairs would take several weeks. “Ineos could keep the Grangemouth refinery running but at a fair cost,” one of the trading sources, familiar with the plant’s operations, said. Moving maintenance forward now appears the most likely option, but nothing has been decided. For one thing, it was unclear if maintenance crews were available on short notice, he said. 

Analysis: Forties aftershock ripples through North Sea oil - Several oil cargoes may be deferred to January as the threat of force majeure hangs over the market after a crack shut down the Forties supply pipeline, trading sources said Wednesday. The key 600,000 b/d artery, which transports one of the key blends that make up the Dated Brent pricing benchmark, is likely to remain shut. Pipeline operator Ineos said it's considering a number of repair options. In response, crude buyers have started to look elsewhere for alternative medium-sour blends. With not many prompt oil barrels available, a scramble for cargoes has begun, said trading sources. Forties dominance of flows used to assess Dated Brent The shutdown pushed the physical Dated Brent benchmark to a two-and-a-half-year high of 65.165/b on Monday but prices have backtracked since then as demand for this grade has fallen. Platts Dated Brent was assessed at $64.69/b Tuesday, down $0.475/b from the previous day. The aging Forties pipeline has a capacity of over 600,000 b/d but throughput of the key grade has averaged around 450,000 b/d this year. Forties accounts for about 40% of UK North Sea crude and is one of the five blends that make up the Dated Brent pricing benchmark. Sources told S&P Global Platts that the last ship to load Forties crude from the Hound Point terminal since the pipeline shut will be the Front Jaguar. The vessel is currently at the main loading berth at Hound Point terminal. According to Platts trade flow software cFlow, the Front Jaguar is currently anchored and is expected to be fully loaded with oil by Thursday. 

UK turns to Russian project targeted by sanctions for gas supply - British homes are set to be heated over the new year with gas from a Russian project targeted by US sanctions, as the shutdown of a key North Sea pipeline slashes domestic output and sends utilities and traders scrambling for supplies. The first tanker of liquefied natural gas from the Yamal LNG project in Russia’s Arctic, which was opened by President Vladimir Putin last week, is making its way to the Isle of Grain import terminal in Kent as UK gas prices soar. The shipment of the super-chilled cargo to the UK, which was originally expected to go to Asia, will be cheered in the Kremlin, where the Yamal LNG project has been held up as evidence that it can withstand western sanctions. Moscow has insisted that Europe will remain reliant on Russia for gas. The UK government has taken a tough line on Russian sanctions since Moscow first intervened in Ukraine nearly four years ago, and Theresa May, prime minister, has stepped up criticisms more recently, accusing Moscow of meddling in elections and attempting to “weaponise information” to undermine the west. Bringing in the tanker will highlight questions about the UK’s energy strategy and the security of supplies, as it follows the shutdown of a three-decade-old pipeline this week that has cut off 12 per cent of gas from the UK’s portion of the North Sea, sending prices to four-year highs and sparking fears of potential shortages.

What Goes Up Must Come Down: the Challenge of Rig Decommissioning --The cost of decommissioning is rising sharply, with experts predicting it will reach $13 billion a year globally by 2040. Inevitably, the final costs will vary from rig to rig – decommissioning operations in the North Sea are expected to require around 53 billion pounds in total; a huge sum in comparison to deepwater installations in the Mexican Gulf, which are expected to incur approximately $2.4 billion. However, even with less costly decommissioning projects, these are not inconsequential figures that companies can simply brush aside.  The cheapest and most straightforward option – simply sinking the rigs – is not feasible. In 1995 when Shell proposed sinking the Brent Spar rig, the result was protests, boycotts, and a substantial fall in share price, ultimately resulting in the Ospar Treaty. Therefore, a range of alternative engineering solutions have been proposed – such as removing platforms in a ‘single lift’ swing, or dismantling the platform piecemeal and shipping in batches. Given the complexities of dismantling an oil rig, decommissioning is a challenging engineering problem with many factors needing to be considered. Yet, with around 600 rigs expected to be taken offline by 2021, it’s also one that oil companies need to get used to tackling. The challenge facing oil companies is to be able to accurately predict the costs for decommissioning these aging structures safely and in environmentally friendly, but cost effective ways.Predicting and addressing the environmental impacts of decommissioning is complex. There can often be competing interests and trade-offs to be considered and evaluated. For example, the most carbon-neutral option might not be the best from a health and safety (HSE) perspective. One example is the current debate within the environmental community about whether it’s best to clean and sink parts of the rig as part of a ‘rig to reef’ program, or, whether this is merely leaving behind waste that will cause unpredictable issues for centuries afterwards. The fact that this rig-to-reef issue is still unresolved – despite first being raised over 20 years ago as per the Brent Spar platform – demonstrates the difficulty of decommissioning.

Austrian Gas Hub Blast Hits Deliveries To South, Southeast -Operator (Reuters) - An explosion and fire at the Baumgarten gas hub has disrupted deliveries to Austria's southern and southeastern borders, operator Gas Connect Austria said on Tuesday.Its markets include Italy, Slovenia and Croatia."Transit through Austria towards the south and southeast is affected until further notice," the company said in a statement, adding that the site, a major regional transfer hub, had been shut down.Domestic deliveries can be provided for the foreseeable future, it said.

Austrian Explosion Rattles Europe’s Gas Market - Natural gas flows were set to recover in Europe after an explosion at an Austrian hub threatened supplies already pinched by a closed pipeline in the North Sea and a cold snap across the continent. Oil company OMV AG, which controls the Baumgarten gas hub, managed to divert international transit pipelines so that flows to Italy, Germany and Hungary can resume before midnight local time, according to an emailed statement. “We managed to technically isolate the affected area,” Stefan Wagenhofer, managing director of OMV unit Gas Connect Austria GmbH, told ORF television. This allows the company to divert international flows and “resume transit within hours.” Natural gas and power prices earlier jumped in Europe after the explosion, and Brent crude oil futures rose above $65 a barrel for the first time since June 2015, extending their premium over the U.S. benchmark. Britain, which is struggling to absorb the impact of a crack that shut down a key North Sea pipeline network, saw some of the biggest increases. A blast about 9 a.m. at the Baumgarten compressor station killed at least one person and injured at least 21 people, interrupting flows at one of the main points where Russian natural gas enters Europe. That followed two days of snow in London and cooler-than-normal temperatures spread from the Alps to Scandinavia, which is raising demand for heating fuels. “The European gas market seems to be going through a perfect storm,” Massimo Di-Odoardo, an analyst at Wood Mackenzie Ltd. in London, said by email. Britain lacks the gas storage sites and web of interconnections that make most continental European markets better able to cope with disruption. Reduced pipeline gas flows may increase competition with Asia for liquefied natural gas cargoes this winter, according to WoodMac. Front-month gas in Britain jumped as much as 23 percent to 73.7 pence a therm ($9.86 a million British thermal units) on ICE Futures Europe, the highest since December 2013. The comparable U.K. power contract rose as much as 15 percent, according to broker data compiled by Bloomberg. Same-day gas soared as much as 46 percent. 

Italy declares state of emergency following deadly explosion at Austrian pipeline – DW  - Gas has resumed flowing through an Austrian gas hub after an earlier explosion cut off supplies to several European countries. Italy has declared a state of emergency. A major European gas distribution hub resumed operations early Wednesday after an explosion knocked it offline, cutting off gas supplies to several countries. Gas Connect Austria said the flow of gas towards Italy, Germany and Hungary resumed from its hub at Baumgarten an der March after fire and police inspected the site. An explosion rocked the gas distribution center outside of Vienna Tuesday morning, prompting Italy to declare a state of emergency. One person died in the blast while a further 21 were injured, one seriously, according to officials. Austrian authorities said the explosion was triggered by a "technical cause," without providing further details. Located near Austria's eastern border with Slovakia, the Baumgarten gas hub carries about 10 percent of Europe gas supply from from Russia, Norway and other states. It handles some 40 billion cubic meters per year, redistributing it around Europe, including to Germany, France, Italy, Slovakia and Croatia. News of the explosion threw the European gas market into turmoil amid fears that supplies would be tightened during the winter months. Italy, the Baumgarten hub's biggest recipient, declared a state of emergency following the blast, with the country's industry minister warning that it was facing a "serious" energy supply problem. A state of emergency status allows the Italian government to carry out extraordinary measures to try to meet energy demands, such as allowing coal and oil power plants to fire at full blast. According to the Reuters news agency, the Italian wholesale day-ahead supply of natural gas rose 150 percent to €60 ($70) per megawatt-hour (MWh) — an all-time high.

The Arctic Threat to the Price of Oil - Russia has three oil export terminals on its Arctic coast. Shipments began from Lukoil PJSC's 240,000 barrel a day Varandey terminal in 2008. It now handles about 150,000 daily barrels from nearby fields. Gazprom Neft's Prirazlomnoye field produces approximately 80,000 barrels a day, with a target capacity of 130,000. The same company's 170,000 barrel a day Arctic Gate terminal started operations this year and exports about 150,000 barrels a day from the Novoportovskoye field. Crude from all three terminals is shipped in shuttle tankers to Murmansk, from where cargoes are sent on larger vessels to Europe. The terminals' exports hit a new high of almost 385,000 barrels a day in November. This is up by about 100,000 barrels a day from a maintenance-related summer dip. That's equivalent to a third of the output cut pledged by Russia in its deal with OPEC.  Russia's adherence to that deal, just extended to the end of 2018, has been pretty good. Over the summer, it cut more than the promised 300,000 barrels a day from its October 2016 production level.But things have started to slip. Maintenance at Prirazlomnoye and at Exxon Mobil Corp's Sakhalin I project off the eastern coast helped lower Russian production between August and October. That's come to an end. Now those fields are back in full production, Russia's aggregate daily oil output has risen by about 50,000 barrels. Compliance with the OPEC deal is below where it was in May and things may get worse over winter. As well as gas, Novatek PJSC's new LNG project will produce about 26,000 barrels a day of condensate -- a very light form of crude. That's not a lot in the grand scheme of things, but this is just one field. As Russia's gas industry targets deeper, liquids-rich reservoirs, its condensate output rises. Gas production in Russia is highly seasonal, so condensate output is too. Cold weather boosts demand for Russian gas from domestic and foreign consumers and the swing in gas production from summer to winter can be as much as 40 percent of the annual average.

Russia Wins in Arctic After U.S. Fails to Kill Giant Gagas project … Building the $27 billion Yamal liquefied natural gas project meant shipping more than 5 million tons of materials to construct a forest of concrete and steel 600 kilometers north of the Arctic circle, where temperatures can drop to -50 degrees celsius and the sun disappears for two months straight. Yet those challenges weren’t as tough as the U.S. sanctions imposed in 2014, forcing a complete refinancing just as construction was about to start. Jacques de Boisseson, head of the Moscow office of French energy giant Total SA, which has a 20 percent stake in Yamal LNG, said there were "various moments" when he thought the project may never happen. "We were too much advanced to stop. We were in a deadlock: we had to go ahead and we didn’t know how," de Boisseson said. Three years later, the first shipment of Yamal LNG’s gas represents a gargantuan effort from the Russian establishment to demonstrate that one of President Vladimir Putin’s flagship projects would not be derailed by sanctions. The launch of the project in the face of sanctions has helped spur Moscow’s political pivot to China, which provided much of the financing. Novatek PJSC, which controls Yamal LNG, is already talking about its next LNG project. London Bound The first cargo is on board a tanker headed for a port near London, helping the U.K. to cope with cold winter weather and an unplanned shutdown of a clutch of its own North Sea fields. That the gas will end up in a European country that’s backed sanctions against Russia may please many in Moscow. 

Russia Aims To Win 15-20% Of Global LNG Market - Novatek CEO  (Reuters) - Russia's government has set a target of winning between 15 and 20 percent of the global market for liquefied natural gas (LNG), Leonid Mikhelson, the chief executive officer of Russian gas major Novatek, said on Tuesday.Novatek, Russia's biggest private gas producer, meanwhile plans to maintain its own domestic market share, Mikhelson told investors.

Russia May Turn To Oil-Backed Cryptocurrency To Challenge Sanctions & The Petrodollar - The gradual acceptance of digital currencies, with major exchanges about to launch bitcoin futures trading, may prompt some oil producing nations to ditch the US dollar in crude trade in favor of cryptocurrencies, an oil analyst says. As RT reports, Russia, Iran and Venezuela have more than one thing in common.All three are major oil producing nations dependent on the dollar since the global crude market is traditionally dominated by contracts denominated in US currency. Moscow, Tehran and Caracas are also facing US sanctions; penalties which are proving effective since the sanctioned countries are dependent on the US dollar to sell their crude. A decentralized currency – allowing anonymous transactions along with blockchain technology support to facilitate oil contracts – may be the ideal tool to allow the oil producing trio to turn their back on the greenback.“The advent of cryptocurrencies, therefore, represents a fresh catalyst for commodity-producing countries wishing to abandon the dollar as a means of payment for oil,” said Stephen Brennock, oil analyst at PVM Oil Associates, in a research note seen by CNBC. Several oil producers have already voiced plans to ditch the dollar in oil trading.

Japan LNG buyers pay $9/MMBtu for spot contracts in Nov, up 10% on month: METI - Japanese buyers paid an average of $9.0/MMBtu for LNG spot cargoes that were contracted in November, up 9.8% from $8.20/MMBtu in October, as the country enters the winter heating season, Ministry of Economy, Trade and Industry data showed Monday. Japan's average contracted price for LNG spot cargoes has been rising since July. The delivery months for those contracts were, however, not disclosed. S&P Global Platts JKM averaged $9.608/MMBtu in November, reflecting deals for December and January deliveries. METI also released the average price of cargoes delivered into Japan in November, which came in at $7.10/MMBtu, rising 16.4% from $6.10/MMBtu in October. Platts JKM for cargoes delivered in November, assessed from September 18 through October 13, averaged at $8.27/MMBtu. The November JKM steadily rose throughout the assessment period on the back of demand from end-users in Northeast Asia, who were stocking up ahead of winter. Demand from India also emerged via tenders, providing support to the market. 

World Bank to stop financing upstream oil, gas after 2019 - The World Bank Group Tuesday said it will stop financing upstream oil and gas after 2019, as part of a wider commitment to global efforts to halt climate change. "As a global multilateral development institution, the World Bank Group is continuing to transform its own operations in recognition of a rapidly changing world," the bank said Tuesday in a statement. "The World Bank Group will no longer finance upstream oil and gas, after 2019," it said. However, in exceptional circumstances, the bank will consider financing upstream natural gas in the poorest countries where there is a clear benefit in terms of energy access for the poor, and if the project fits within the country's commitments under the Paris Agreement, the multilateral lender said. The World Bank Group made the announcement at the One Planet summit in Paris, which it convened along with President Emmanuel Macron of France and United Nations Secretary General Antonio Guterres. Of the bank's total lending of $22.6 billion in fiscal 2017, $4.4 billion went to energy and extractive industries, according to its 2017 annual report. The World Bank Group also said it is on track to meet its target of 28% of its lending going to climate action by 2020 and to meeting the goals of its Climate Change Action Plan, which it developed following the 2015 Paris Agreement on climate change. "In line with countries submitting updated and potentially more ambitious Nationally Determined Contributions, the World Bank Group will present a stock-take of its Climate Change Action Plan and announce new commitments and targets beyond 2020 at COP24 in Poland in 2018," it said. In addition, starting in 2018, the bank will report the greenhouse gas emissions from the investment projects it finances in key emissions-producing sectors, such as energy. The results will be published annually starting late 2018, it said. 

China Short of Natural Gas as it Pushes Away Polluting Coal - — Severe natural gas shortages are hitting businesses and residents across China’s industrial heartland as an unprecedented government effort to clean up an environment devastated by decades of unbridled growth backfires. Factories are closing or operating at reduced capacity, business profits are shrinking as supply chains are disrupted, and people are shivering through subzero temperatures without adequate heating at home, according to interviews conducted across the region last week. The gas shortages, which have sent prices soaring nationwide, have undermined a sweeping campaign to switch millions of households and thousands of businesses from coal to natural gas in north China this winter, part of long-running efforts to clean the region’s toxic air. Much of the gasification of the region, involving more than 4 million homes, was rapidly launched by local authorities acting on their own initiatives in response to calls by the central government to control air pollution. But the plan appears to have been overly ambitious. Despite the installation of gas lines and boilers for factories and homes across the northeast, supply has been hampered by insufficient infrastructure to bring the fuel to the industrial region and store it, according to Liang Jin, an independent analyst previously with the oil and gas consultancy JLC. And in some areas, many homes have yet to get the gas boilers needed for heating. The gas plan was also implemented as China tries this winter to reduce production from polluting industries like steel and cut back on the use of diesel trucks. That has raised concerns about whether the anti-pollution campaigns may hit economic growth. 

Exclusive: China's CNPC weighs taking over Iran project if Total leaves - sources (Reuters) - China’s top oil and gas company CNPC is considering taking over Total’s (TOTF.PA) stake in a giant Iranian gas project if the French company leaves Iran to comply with any new U.S. sanctions, industry sources said. Total signed the $1 billion deal to develop the South Pars gas field in July. The contract gave CNPC the option to take over Total’s stake if it pulled out, according to sources involved in the talks. The deal was the first major Western energy investment in the Islamic Republic since international sanctions, including most of those imposed by the United States, were lifted as part of a landmark agreement in 2015 over Iran’s nuclear program. But after U.S. President Donald Trump refused in October to certify that Tehran is complying with the deal, Congress will have to vote on whether to reimpose sanctions on Iran. It was unclear when a vote would take place or what sanctions might be imposed, but they could bar companies working in Iran from also operating in the United States. Total has much larger operations in the United States and Chief Executive Patrick Pouyanne said it would leave if it were no longer able to operate in Iran. Under the terms of the agreement to develop phase 11 of South Pars, the world’s largest gas field, CNPC could take over Total’s 50.1 percent stake and become operator of the project if Total is forced to withdraw from Iran, a senior Beijing-based source with knowledge of the joint-venture agreement said. CNPC has a 30 percent stake, while the Iranian national oil company’s subsidiary PetroPars holds the remaining 19.9 percent. CNPC officials have held internal talks in recent weeks to discuss the implications of taking control, according to three industry sources briefed on the talks. Spokespeople for CNPC, Total and Iran’s National Oil Company (NIOC) declined to comment. 

Saudi Arabia plans to maintain oil exports in Jan at 6.9 mln bpd -industry source (Reuters) - Saudi Arabia, the world’s top oil exporter, plans to maintain its crude shipments in January at 6.9 million barrels per day (bpd), as it sees healthy demand for its oil, an industry source familiar with the kingdom’s exports plans told Reuters. State oil giant Aramco plans to reduce its January oil shipments to Asia by more than 100,000 bpd from December, while keeping its exports to the United States and Europe steady, the Saudi Energy Ministry said later in a statement on Monday.  “Aramco will maintain its overall supply levels next month at their recent low levels,” the ministry said. Five sources with direct knowledge of the matter said on Monday that Saudi Arabia would supply full contractual volumes of crude to five North Asian refiners in January, unchanged from the previous month. Oil demand is “robust and healthy” particularly in Asia and is expected to stay strong on the back of the winter heating season, an industry source familiar with the export plans said. The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia agreed last month to extend oil output cuts until the end of 2018 aiming to reduce global inventories and support prices. Saudi Arabia cut crude exports by 120,000 bpd in December from slightly above 7 million bpd in November, reducing allocations to all regions. It cut supplies to the United States by more than 10 percent. A seasonal drop in domestic crude demand is freeing up more oil for export during the winter months. “This is in line with our continued demonstration of keeping to, and in fact, exceeding, our commitments under the Declaration of Cooperation,” a ministry spokesman said in the statement. “We hope that by leading by example, our partners from OPEC and non-OPEC will do the same in order to keep conformity levels above 100 percent and accelerate the rebalancing of the market.” 

Indonesia's Pertamina postpones new crude processing deal for 6 months -- Indonesia's state-owned Pertamina will not immediately extend its crude processing deal with Unipec as awaits details of its 2018 equity allocation share of Iraqi Basrah crude following OPEC's recent decision to extend its production cut agreement through to the end of next year, a senior company official said Thursday. Pertamina said the company may hold the CPD for six months and it is open to a new deal with Unipec or other interested companies when the information on next year's Basrah supply becomes more clear. The current deal with the trading arm of Chinese oil major Sinopec ends December 31. "We are waiting for the availability of Basrah crude. Iraq is one of the OPEC member countries. How much production is being cut, they haven't given us any information," the senior vice president of Pertamina's Integrated Supply Chain, Toto Nugroho, said. Pertamina will not sign any CPDs in the first half 2018, but it is likely to start in the second half of next year, with a volume that will match the company's Basrah equity share, Nugroho said. Pertamina has appointed Unipec to process 1 million barrels/month of its equity Basrah crude under the current CPD. The processing deal is valid over July-December this year and the end product is mostly 88 RON gasoline, S&P Global Platts reported earlier. Prior to the deal with Unipec, Pertamina had a deal with Shell to process 1 million barrels/month of its Iraqi crude at the oil major's Singapore refinery over July-December 2016.

UAE Says OPEC, Allies To Announce Exit Strategy From Oil Cuts In June (Reuters) - United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui said on Monday that OPEC and non-OPEC oil producers plan to announce in June an exit strategy from global supply cuts, but that does not mean the pact will end by then.Mazroui said it was premature to talk about the form or shape of such an exit strategy before June, when OPEC, Russia and other producers participating in the supply-reduction agreement - aimed at boosting oil prices - are due to meet next."We will announce ... a strategy in the June meeting. That does not mean we will exit in June. That means we will come up with a strategy," he told reporters in Abu Dhabi."Hopefully the market will be in a much better position for us to come and announce an exit strategy," he said."What is that strategy? No one can tell you the shape, the form, how is it going to be done, prior to everyone’s meeting. Every voice counts in this group. It is unfair for anyone to come and predict."The UAE holds the presidency of the 14-nation Organization of the Petroleum Exporting Countries in 2018.Kuwait's oil minister, Essam al-Marzouq, said on Sunday that OPEC and other oil producers would study before June the possibility of an exit strategy from the global agreement."I think the deal has been working perfectly. We are very optimistic about the growth next year, both the growth on the world economy and the growth in demand," Mazroui said, adding that OPEC "will always do what is best for the market".Russia, which this year reduced production significantly with OPEC for the first time, has been pushing for a clear message on how to exit the cuts so the market doesn't flip into a deficit too soon, prices don't rally too fast and rival U.S. shale firms don't boost output further. Russian Energy Minister Alexander Novak said on Wednesday that it was too early to talk about a possible exit from the deal, and the eventual withdrawal should be gradual. 

OPEC Wakes Up to the Threat of U.S. Shale 2.0 - OPEC predicted that global oil markets won’t rebalance until late next year after boosting forecasts for supplies from the U.S. and other rivals. The Organization of Petroleum Exporting Countries’ monthly report raised its outlook for non-OPEC supply in 2018 by 300,000 barrels a day, as its projections for American output caught up with those of the U.S. government. As a result, an initiative by OPEC and Russia to clear a global oil glut by cutting production -- previously seen succeeding in the third quarter of 2018 -- will take effect more slowly. Oil prices climbed to a two-year high above $65 a barrel in London this week, supported by a temporary pipeline halt in the U.K. and the Nov. 30 decision by OPEC and Russia to press on with supply curbs until the end of next year. While Kuwait and the United Arab Emirates said this week the group could consider winding down its efforts in mid-2018 if the market is back in balance, Wednesday’s report suggests they’ll need to persevere for longer.“Continued efforts by OPEC and non-OPEC to support oil market stability” should “lead to a further reduction in excess global inventories, arriving at a balanced market by late 2018,” OPEC’s Vienna-based research department said in the report. The cartel’s latest figures showed its strategy is paying off, having reduced the oil-inventory surplus in developed nations to about 137 million barrels as of October, compared with about 380 million before the cuts began. OPEC Secretary-General Mohammad Barkindo, speaking to Bloomberg television in Beijing on Wednesday, said stockpiles have since fallen further to about 130 million. OPEC output fell by 133,500 barrels a day last month to 32.45 million, according to the report. Venezuela’s troubled industry suffered further production losses, the U.A.E. belatedly stepped up efforts to deliver its pledged cutbacks and Saudi Arabia cut deeper than required.

Hedge funds start to take profits after oil rally- Kemp - (Reuters) - Hedge fund managers have started to take profits from the big rise in crude oil and refined products prices since June now the rally has lost momentum and inventories are showing signs of stabilising.Portfolio managers cut their combined net long position in the five major futures and options contracts linked to petroleum prices by the equivalent of 34 million barrels in the week to Dec. 5.Net long positions were reduced to 1,120 million barrels, from the previous week’s record of 1,155 million, according to an analysis of position data published by regulators and exchanges.The biggest reductions in bullish positions came in U.S. heating oil and gasoline, where positions had reached record levels in recent weeks (http://tmsnrt.rs/2BbInbi).Net long positions in heating oil fell by 13 million barrels to 61 million barrels, from a record 75 million the previous week. Long positions were cut by 9 million barrels while short positions were boosted by 4 million barrels.Net long positions in gasoline fell by 8 million barrels, having declined by 3 million barrels and 7 million in the two previous weeks, and were down to just 107 million barrels on Dec. 5 from a record 125 million barrels on Nov. 14.Profit-taking by the holders of bullish long positions rather than short-selling by hedge funds establishing fresh shorts accounted for most of the reduction in net length.The same phenomenon was evident in European gasoil, which is not included in the analysis of the five major petroleum contracts.Net long positions in gasoil fell by more than 1.1 million tonnes to 14.7 million tonnes, with long positions down 0.9 million tonnes while short positions rose by 0.2 million tonnes.On the crude side, the pattern was different. Net long positions declined slightly in both Brent and WTI but the fall was caused by an increase in short positioning rather than profit-taking among the longs.Gasoline and distillate stocks have stabilised in the past fortnight as a result of very heavy crude processing in the United States and elsewhere, which has dispelled some of the earlier concerns about falling inventories.

WTI-Brent Crude Spread Snaps After Forties Pipeline Closure --Following the discovery of a "small hairline crack" in The Forties Pipeline System - one of the most important oil conduits in the world - its operator Ineos has decided a total controlled shutdown is the safest option. This has sent the spread between WTI and Brent soaring... A “small hairline crack” was discovered during a routine inspection last week by Ineos contractors, just south of Aberdeen in Scotland. The pipeline’s pressure was reduced for a full assessment but during that time the crack extended. As Bloomberg reports, Brent futures rose as much as $1.18 to $64.71 a barrel in London -the highest since June 2015... “Despite reducing the pressure the crack has extended, and as a consequence the Incident Management Team has now decided that a controlled shutdown of the pipeline is the safest way to proceed,” Ineos said in a statement.“This will allow for a suitable repair method to be worked up.”The pipeline system feeds crude to the Hound Point export terminal near Edinburgh in Scotland. At over 400,000 barrels a day, the supplies that flow through the link are the single largest constituent part of the Dated Brent grade that helps to settle more than half the world’s physical oil prices.

Oil gains on Forties Pipeline shutdown, New York blast - (Reuters) - Oil prices rose on Monday, overcoming declines early in the session, after a North Sea pipeline shut for repairs and investors focused on commodities following an explosion in New York.  Brent crude futures LCOc1 settled up $1.29, or about 2 percent, at $64.69 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 settled at $57.99 a barrel, 63 cents or 1 percent above their last settlement. The difference between the two benchmarks WTCLc1-LCOc1 was the greatest since late October, as Brent rallied after the shutdown of the pipeline that carries the biggest of the five North Sea crude oil streams that underpin the benchmark. The pipeline, which can carry 450,000 barrels per day of Forties crude from the North Sea to the Kinneil processing terminal in Scotland, has been operating at reduced capacity for about four days before the shutdown. “It is a supply concern not only because the pipeline transports a significant portion of North Sea crude oil output, but also because it may take weeks before the issue is resolved,” said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London. The market had expected the pipeline to return to service quickly and was surprised by the extended shutdown, said John Kilduff, partner at Again Capital LLC in New York. “It’s a significant amount of crude oil in a market that has been the tightest for crude oil,” Kilduff said. Earlier in the session, both benchmarks popped higher after an explosion rocked New York’s Port Authority Bus Terminal, one of the city’s busiest commuter hubs. Investors tend to head for hard-asset commodity markets like gold and silver during high-risk events, and oil can also attract investment, Kilduff said. Brent and WTI have gained well over a third from 2017 lows, drawing support from a cut in production by the Organization of the Petroleum Exporting Countries and a group of non-OPEC producers, including Russia, which has been in place since the start of the year.

Forties pipeline shutdown sends Brent spreads soaring: Kemp (Reuters) - Brent futures for delivery in nearby months have jumped to a big premium following the decision to shut the main pipeline bringing crude onshore from the UK North Sea for inspection and repairs. The Forties pipeline system, which carries around 450,000 barrels per day and handles nearly a quarter of North Sea output, is likely to be shut for weeks, owner INEOS said. Forties is the largest component of the Brent-Forties-Oseberg-Ekofisk-Troll (BFOE) complex of crudes that are the basis for the Brent futures contract. Since the closure is expected to be extended but ultimately temporary, the main impact has been on nearby futures contracts for deliveries in February and March. Brent futures prices for deliveries in February have surged by more than $2 per barrel since Friday while March is up by $1.60. In contrast, prices for Brent futures with deliveries in June have risen by $1.25 and increases for later months are smaller. The main impact from the shutdown has therefore been on the calendar spreads for nearby months rather than on outright or flat prices (http://tmsnrt.rs/2BfvjBG ). The calendar spread from February to March has more than doubled to 76 cents on Tuesday from 37 cents backwardation on Friday. The spread from March to April has similarly flared to 45 cents from 27 cents. The longer the pipeline takes to be repaired, the more the tightness in the February-March and March-April calendar spreads is likely to bleed into later months. A prolonged shutdown of the Forties system would accelerate the drawdown in global oil inventories and tightening of the oil market that is already underway. For the moment, however, the price impact has been mostly confined to North Sea crudes, with prices rising against other light crudes as well as medium and heavy grades. Futures prices for U.S. light crude delivered in February rose by less than $1 per barrel between Friday and Tuesday, suggesting traders see only a modest impact on global crude availability. 

Brent Pipeline Closure Confuses Oil Markets - Oil prices jumped at the start of the week due to the cracked pipeline in the North Sea (see below). Brent briefly rose to its highest point since 2015. The Forties pipeline system developed a crack last week and its operator, Ineos, said on Monday that it had to shut down the system for repairs, which could take several weeks. The Forties system is an all-important artery in the North Sea, carrying 450,000 bpd to the UK mainland. Its outage could force North Sea oil producers to temporarily shut down output. “Yesterday’s closure of the Forties pipeline system for weeks is one of the most significant unplanned crude oil shortages we have seen this year,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. It is also crucial for the Brent benchmark, and not surprisingly, Brent jumped above $65 per barrel on the news, the highest in more than two and a half years. “It’s more than just a supply disruption because it’s more significant as a price maker,” Olivier Jakob, an analyst at Petromatrix GmbH, said in a Bloomberg interview. “There’s one thing which is the volume of oil which is lost, but it’s also that it’s a key price benchmark.”  Longer laterals in thousands of shale wells are pushing pumpjacks (aka nodding donkeys) to the limit. The pump systems that help squeeze out oil can work on vertical wells for years, but Bloomberg reports that the stress of trying to pump from extremely long horizontal wells is leading to a rapidly growing fail rate for these iconic nodding donkeys. That is pushing up costs for some shale wells and could also result in oil being left in the ground. The problem is especially acute at older wells where it becomes more difficult to extract oil because of declining well pressure. The industry is trying to find some workarounds, but there is no silver bullet.  Chevron, Valero and Delta Air Lines have lodged a complaint with U.S. FERC over what they say are excessive fees along the crucial Colonial Pipeline that carries gasoline from the Gulf Coast to the Mid-Atlantic and Northeast. The companies argue that Colonial’s fee to transit gasoline “greatly exceed just and reasonable levels.” Colonial argues the case has no merit.

API Reports Huge Crude Draw - The American Petroleum Institute (API) reported a large draw of 7.382 million barrels of United States crude oil inventories for the week ending December 8, making two large draws in back to back weeks. Analysts had expected a much smaller drawdown of 3.759 million barrels.Last week, the American Petroleum Institute (API) reported a large draw of 5.481 million barrels of crude oil, but had dampened any enthusiasm that the oil bulls may have had by countering that with a massive build of 9.196 million barrels of gasoline.This week, the API is reporting another build in gasoline inventories, but this time more moderate, at 2.334 million barrels for the week ending December 8. The results came in very close to forecasts for a 2.457-million-barrel build.Brent crude had jumped in late afternoon trading on Monday and early Tuesday, as reports came in that the Forties pipeline would be shut down for an unspecified timeframe after a crack had been discovered.By Tuesday afternoon at 2:19pm EST, both benchmarks were trading down, with WTI down 1.52 percent ($-0.88) at $57.11 and Brent crude down 2.13 percent (-1.38) at $63.31. Both benchmarks were up from last Tuesday.Distillate inventories, too, saw another build this week, up 1.538 million barrels, against a forecast of a 902,000-barrel build. Distillate inventory has risen three weeks in a row leading up to this week, according to information by the Energy Information Administration, but are still almost 30 million barrels shy of the same week last year. Inventories at the Cushing, Oklahoma, site decreased by 2.704 million barrels this week.

WTI/RBOB Higher After Surprisingly Large Crude Draw -- WTI/RBOB tumbled today after fears about cracks in one of the world's most important oil pipelines faded. Prices were below last week's pre-API levels as hope was high that last week's big surprise product build was a fluke but once again we saw notable product builds, but prices popped higher as a 7.382mm crude draw was much bigger than expected. API

  • Crude -7.382mm (-2.89mm exp) - biggest draw in 4 months
  • Cushing -2.704mm (-2.5mm exp)
  • Gasoline +2.334mm
  • Distillates +1.5384mm

Hope was high that last week's unexpectedly large product build was a one-off.  WTI/RBOB prices were below the pre-API levels from last week heading into the print.. The Forties outage is “a measurable disruption that the market can apparently cope with,” Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida, said by telephone. After the Brent-WTI spread widened to more than $7 a barrel, “the ability to cover shortfalls with U.S. crude is pretty easy.” But after the API data hit, prices moved higher...

Brent oil price jumps above $65, first time since 2015 - Brent oil prices jumped by one percent on Tuesday to their highest since mid-2015, after the shutdown of the Forties North Sea pipeline knocked out significant supply from a market already tightening due to OPEC-led production cuts.Brent crude futures LCOc1, the international benchmark for oil prices, were at $65.32 a barrel at 07:48 GMT, up 63 cents, or one percent, from their last close. The contract hit a high of $65.70 a barrel earlier in the day.That marks the first time Brent has risen above $65 since June 2015. US West Texas Intermediate (WTI) crude futures CLc1 were at $58.38 a barrel, up 39 cents, or 0.7 percent, from their last settlement. "Brent crude raced higher ... as news broke that the North Sea's Forties Pipeline system would have to be shut down for a 'number of weeks' after a hairline crack was found in it," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. "The pipeline ... is a significant component underpinning the Brent benchmark."Britain's Forties oil pipeline, the country's largest at a capacity of 450,000 barrels per day (bpd), shut down on Monday after cracks were revealed. "The market reaction shows that in a tight market, any supply issue will quickly be reflected in higher prices," said ANZ bank. Analysts said there was also oil price support from the consumer side."Demand growth across the commodity complex is extremely robust. And inventories across the complex have been declining sharply," US bank Goldman Sachs said in a note to clients. The jump in Brent prices widened its premium to WTI prices to as much as over $7 a barrel CL-LCO1=R, the highest premium since May 2015 and up from around $5 last week, making US oil exports more attractive.

Brent Reaches Highest Since 2015 After Forties Pipeline Shutdown -- Brent crude jumped to its highest since June 2015 as a key North Sea pipeline shut down.The Forties Pipeline System, one of the most important oil conduits in the world, is to be fully halted after a crack was discovered, the link’s operator Ineos said. Repairs will take about two weeks, according to a spokesman. The announcement boosted pricing that had been largely muted over the last week following an OPEC-led agreement by major producers to extend output curbs through the end of 2018. Brent rallied in London, pulling New York futures up to near $58 a barrel. “You really don’t have a lot of spare barrels before the supply situation becomes a problem.” The pipeline system feeds crude to the Hound Point export terminal near Edinburgh. The supplies that flow through the link are the single largest constituent part of the Dated Brent grade that helps to settle more than half the world’s physical oil prices.Brent for February settlement gained $1.29 to settle at $64.69 barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $6.64 to February West Texas Intermediate, the largest premium since early November.SEE: Oil Options, Brent calls trade more than twice put volumeThe WTI-Brent spread will “widen and encourage U.S. exports,” Yawger said, in reference to Brent rising on the Forties’ pipeline outage.WTI for January delivery advanced 63 cents to end the session at $57.99 a barrel on the New York Mercantile Exchange, the highest level in more than a week. Total volume traded was about 7 percent below the 100-day average. Prices also received a boost earlier in the session as news broke of an explosion in New York.

OPEC Says Oil Goal's Close as Stockpile Glut Shrinks Further - OPEC is near its goal of rebalancing the oil market as an inventory overhang targeted by its output curbs continues to shrink, according to the group’s secretary general.The stockpile glut -- including crude as well as oil products -- has shrunk to 130 million barrels above the five-year average, Mohammad Barkindo said in a Bloomberg Television interview in Beijing before the release of OPEC’s monthly market report on Wednesday. The group last month estimated the overhang at about 154 million barrels.That’s a sign that the Organization of Petroleum Exporting Countries and its allies including Russia are progressing in their efforts to curb production and end an oversupply that has weighed on prices and battered their economies since 2014. The group plans to meet in June to assess the market and consider halting the cuts, which they agreed last month to extend until the end of next year.  “We are beginning to see a return to stable markets,” Barkindo said. “Something that has eluded us for several years.”Barkindo has previously said the inventory glut has shrunk from a record of more than 380 million barrels as OPEC implemented its output cuts. The overhang in oil-product stockpiles is less than 30 million barrels, he said on Wednesday, adding that nations that are part of the production deal have conformed to the agreement by more than 100 percent on average over January to October this year. Brent crude, the benchmark for more than half the world’s oil, rose 1.4 percent to $64.24 a barrel at 9:51 a.m. in London. Prices climbed above $65 for the first time since June 2015 on Tuesday.

OPEC Reports Lowest Oil Output In Six Months; Fears Shale Production Surge -- True to its perpetually optimistic form, OPEC, which last month for the first time conceded the threat posed by rising US shale production... ... sharply raised its demand forecast for cartel oil in 2018, ahead of the OPEC meeting at the end of November.And, according to OPEC's latest market report for the month of December, demand is set to continue rising, with global oil demand projected to grow at around 1.53 mb/d in 2017, in line with last month’s forecast. China is projected to lead oil demand growth in the non-OECD, followed by Other Asia – which includes India – and OECD Americas.  Which means that an unexpected Chinese landing, whether hard or soft, will have an adverse impact on oil in addition to all other commodities.  Separately, in 2018, world oil demand is expected to grow by 1.51 mb/d according to the latest OPEC forecast. OECD will contribute positively to oil demand growth, adding some 0.28 mb/d, whereas the bulk of the growth will come from the non-OECD with 1.23 mb/d of potential growth. For 2018, the main assumptions behind the forecast are firm economic growth, lending support to industrial and construction fuels in both OECD and non-OECD. Expansion in the transportation sector is expected to provide the bulk of oil demand growth. Growth in petrochemical demand is projected to be one of the fastest-growing contributors in US, China, South Korea and the Middle East. As such, world oil demand growth is estimated at 1.51 mb/d in 2018, compared to 1.26 mb/d in the initial forecast.More important than demand, however, was the November supply of OPEC oil, which declined by 133.5K to below 32.5 million bbl, a fresh six month low if only 195K bbl lower than last year's output, confirming that ahead of last year's production cut agreement, OPEC furiously ramped up production effectively offsetting the subsequent output limit.  Crude oil output increase in Nigeria by 95.8kb/d while declining in Suadi Arabia, UAE, Angola and Venezuela.

 Oil settles lower after rally on pipeline outage; Brent premium narrows (Reuters) - Oil prices fell sharply on Tuesday, as traders took profits after prices surged early to a two-year high on an unplanned closure of the pipeline that carries the largest North Sea crude oil grade.  Brent crude settled down $1.35, or 2 percent, at $63.34. U.S. crude settled at $57.14 a barrel, 85 cents lower, or 1.5 percent. Selling picked up after the U.S. Energy Information Administration said in its monthly short-term energy outlook that U.S. crude oil output will rise by 780,000 barrels per day (bpd) to 10.02 million bpd in 2018. Last month, it expected a 720,000 bpd year-over-year increase to 9.95 million bpd. “The market is respecting what [EIA] is saying but they’re taking it with a grain of salt,” said Phil Flynn, analyst at Price Futures Group. Volume was strong, with U.S. crude seeing more than 780,000 contracts changing hands, compared with the 200-day moving average of 626,000 contracts. The WTI-Brent spread widened to as much as $7 CL-LCO1=R, the highest in more than two years, then narrowed to $6.38. WTI has lagged Brent, and the discount has helped boost U.S. exports. The Forties pipeline, which carries crude from the North Sea to a processing terminal in Scotland, was shut on Monday after cracks were found. Traders believe it is the first unplanned outage for some years in the line, which was scheduled to pump 406,000 barrels per day (bpd) in December. Its closure pushed Brent prices higher on Monday and early on Tuesday, with Brent rising above $65 a barrel for the first time since June 2015. Forties is important for the global oil market because the crude it carries normally sets the price of dated Brent, a benchmark used to price physical crude around the world and which underpins Brent futures. Industry group the American Petroleum Institute said on Tuesday that crude stocks fell by 7.4 million barrels, more than expected. 

WTI/RBOB Steady Despite Huge Gasoline Build, New Crude Production Record --  Despite last night's surprisingly large API-reported crude draw, WTI/RBOB prices were sliding in early trading but as the DOE data printed prices stabilized despite a smaller crude draw than API and a much bigger gasoline builds than expected. Production surged on the week to a new record high.Bloomberg's Mitch Martin noted that the Brent pipeline leak and another in Canada haveU.S. refineries running hard to capture the widening crude differentials. That's leading to oversupply in the gasoline market, which has seen inventories build for three straight weeks; a fourth is expected, increasing supply by 1.8 million barrels. Distillates also are expected to build, rising 1.1 million barrels, even as crack spreads recovered to more than $20 a barrel. “We’re seeing U.S. inventories really continue to fall,” Phil Flynn, senior market analyst at Price Futures Group, says. Investors will focus on whether we see large builds in gasoline and distillates, which may hold back crude from rallying strongly, “but I don’t think you can underestimate the strong demand from the refiners.”  DOE:

  • Crude -5.12mm (-2.89mm exp)
  • Cushing (-2.5mm exp) - biggest draw since Sept 09
  • Gasoline +5.66mm (+2.3mm exp)
  • Distillates -1.37mm (+1.2mm exp)

A 5th weekly build in gasoline inventories (much larger than expected), and unexpected distillates draw, as crude (and Cushing) stocks are reduced... As Bloomberg notes, crude production topped 9.7 million barrels a day in last week's data for the first time since weekly records began in 1983. Even more importantly, the EIA's monthly assessment of crude production - seen as more accurate than the weekly figures - caught up with the more frequent data in September, after lagging for the previous 5 months. The last week saw another surge to record highs... WTI/RBOB prices extended yesterday's losses ahead of the DOE data (despite API's big crude draw) but the algos managed gains after the print even as crude drew less than API and gasoline's build build...

US Shale Output Rises As OPEC Production Falls To 6-Month Low - OPEC’s crude oil production dropped to a six-month low in November, while U.S. and other non-OPEC supply has grown stronger than initially expected this year, which prompted the cartel to revise up on Wednesday its estimates for non-OPEC supply growth in 2018. OPEC’s crude oil production fell by 133,500 bpd from October to stand at 32.448 million bpd in November, OPEC’s Monthly Oil Market Report showed on Wednesday. This was the lowest production the cartel has reported in six months. The largest increase among the members came from Nigeria, whose production in November jumped by 95,800 bpd from October to 1.790 million bpd, according to OPEC’s secondary sources. Angola, Saudi Arabia, Venezuela, and the UAE saw the largest declines in production. The final OPEC monthly report for this year focused on the 2017 highlights and expectations for 2018. In both overviews, the predominant theme was the U.S. shale supply growth that was higher than any initial expectations. “Non-OPEC oil supply growth 2017 performed well above initial market expectations to now stand at 0.81 mb/d. Higher-than-expected supply growth in the US, Canada and Kazakhstan have been the key contributors to the upward revisions, particularly US tight oil. As a result, US oil output is now expected to grow at 0.61 mb/d this year,” OPEC said. The expected non-OPEC oil supply growth for 2017 is an upward revision of 150,000 barrels per day from the previous report. Improved well efficiency and increased investment in U.S. tight oil prompted OPEC to expect the momentum to continue in 2018. Higher production from sanctioned oil sands projects in Canada will also add to increased non-OPEC supply next year.  “As a result, non-OPEC supply is expected to grow by 0.99 mb/d in 2018. The forecast is associated with considerable uncertainties, particularly regarding US tight oil developments,” OPEC said.

EIA Reports Major Draw In Crude Inventories - Amid rising oil prices thanks to the three-week suspension of the Forties pipeline and a major inventory draw estimated by API, the Energy Information Administration injected some more optimism in markets with a reported draw of 5.1 million barrels of crude. The authority said that at 443 million barrels, inventories of crude oil were in the middle of the seasonal average. Refineries processed 17 million barrels of crude daily last week, the EIA also said, producing 10.1 million barrels of gasoline, up from 9.8 million bpd last week. Gasoline inventories, which last week pushed prices down after API estimated a massive build—that EIA largely confirmed—this week will probably have the same effect: according to EIA, they rose again, by 5.7 million barrels In addition to the inventory draw, WTI is at the moment benefiting from greater demand for U.S. oil from Asia, following the shutdown of the Forties oil pipeline network in the North Sea, which has taken off more than 400,000 bpd of crude from the market. The shutdown—following the discovery of cracks in parts of the infrastructure—caused Brent crude to temporarily jump above US$65 a barrel and after that continued to trade closer to that than to US$60. This development will naturally increase the appeal of alternatives to Brent-linked oil grades, including U.S. and Russian crude as the spread between the benchmarks widens. The ICE Brent/WTI spread on Monday, for example, after the announcement of the Forties shutdown, widened to over US$6.60 a barrel from less than US$5 last week. Meanwhile, the OPEC camp is quietly discussing its exit strategy from the production cut agreement, likely spurred by Russia’s insistence to have one in place soon, so it can leave the deal at the first opportunity. The strategy will be announced at the June meeting of the Vienna Club. Until then, it will be among the most important factors to watch out for in the oil market.

Oil slips as U.S. gasoline stock build overshadows crude draw (Reuters) - Oil prices slipped for a second straight day on Wednesday, as a slump in U.S. crude stockpiles was offset by a larger-than-forecast rise in gasoline inventories and as U.S. crude output continued to grow to record highs.   U.S. crude inventories last week dropped 5.1 million barrels, more than anticipated, and production hit another record high at 9.78 million barrels per day (bpd), government data showed. The U.S. peak, when records were only kept on a monthly basis, is 10.04 million bpd, set in November 1970. Gasoline stocks jumped 5.7 million barrels, more than double analysts’ expectations for a 2.5 million-barrel gain. “It’s kind of a mixed bag across the board - a little bigger than expected draw on crude but gasoline demand was down slightly. Usually in this time of year you see a little bit more demand,”  . U.S. West Texas Intermediate crude settled down 54 cents at $56.60 a barrel, a 1 percent decline. Brent crude ended down 1.4 percent, or 90 cents, at $62.44 a barrel. The international benchmark lost 2.1 percent on Tuesday on a wave of profit-taking after an unplanned shutdown of the Forties North Sea pipeline early this week helped send the global benchmark above $65 for the first time since mid-2015. While the Forties shutdown has provided a price floor, early gains quickly evaporated in a global market that is still oversupplied and with output rising in the United States.   The U.S. Energy Information Administration on Tuesday forecast that domestic crude oil output will rise by 780,000 bpd to a record high of 10.02 million bpd in 2018.  “The fact that the market sold off so much after the Forties outage shows that the market struggles to trend higher. Now, we’re basically where we were a month ago,”

Brent eases as traders become sanguine about pipeline outage (Reuters) - Brent futures for delivery in the first months of next year have given up much of their premium since the announcement on Monday that the Forties pipeline system would be shut for emergency repairs. The Forties pipeline system, which carries around 450,000 barrels per day and handles nearly a quarter of North Sea output, is likely to be shut for several weeks, according to owner Ineos. But traders have become much more sanguine about the impact on benchmark North Sea oil prices as well as the wider oil market (http://tmsnrt.rs/2kqSkar ). Futures prices for Brent crude delivered in February have declined more than $3 per barrel since peaking on Tuesday and are now almost back to their level before the shutdown was disclosed. The calendar spread between Brent futures for delivery in February and March has also softened from 94 cents per barrel backwardation on Tuesday to just 57 cents on Thursday. Brent's premium to WTI has shrunk from $7.26 per barrel to $5.78, also roughly in line with where it was before the pipeline was stopped. The initial surge in Brent futures prices was likely an overreaction to the supply interruption given its time limited nature and the availability of alternatives. But it has already forced refiners to make adjustments to reduce their demand for Forties and other crudes in the Brent-Forties-Oseberg-Ekofisk-Troll complex. Scotland's Grangemouth refinery has initiated a partial shutdown since it is not economic to buy alternative crudes to replace lost deliveries of Forties. In practice, the interruption of the Forties pipeline system, even if it lasts for two to three weeks, is unlikely to have a major impact on the global supply-demand balance in 2018.

Oil prices up on pipeline outage support (Reuters) - Oil prices rose on Thursday as a pipeline outage in Britain continued to support prices despite forecasts showing global crude surplus in the beginning of next year. U.S. West Texas Intermediate futures settled up 44 cents, or 0.8 percent, to $57.04 a barrel. Brent crude futures settled up 1.4 percent, or 87 cents, at $63.31 a barrel. Prices have been supported by an outage on the Forties crude pipeline that was expected to last several weeks. “At present you can’t ignore the impact of the Forties pipeline outage,” said John Kilduff, partner at Again Capital Llc in New York, “It’s a significant amount of oil that the market is going to miss and is missing. And it’s almost surprising it’s not generating more support.” A reformer was shut on Thursday after a fire in the East Plant at Citgo Petroleum Corp’s 157,500-bpd Corpus Christi, Texas, refinery, said sources familiar with plant operations. The Paris-based International Energy Agency (IEA) expects the oil market to have a surplus of 200,000 barrels per day (bpd) in the first half of next year before reverting to a deficit of about 200,000 bpd in the second half. That means 2018 overall should show “a closely balanced market”. The IEA said U.S. crude output next year would increase by 870,000 barrels per day, up from its November forecast of 790,000 bpd. With cash pouring into the U.S. shale oil industry, the United States is on track to deliver up to 80 percent of the world’s oil production gains through 2025, the IEA estimates. Yet after lows of $56.09 earlier in the day for U.S. crude and $62.01 for Brent crude, both grades had rallied again by settlement. “The market seems to have digested (the IEA report) and is turning its attention to the fact that we’re beginning to tighten,” A fall in U.S. crude inventories last week also lent some support. Stocks fell by 5.1 million barrels in the week to Dec. 8, the fourth consecutive week of decline, to 442.99 million barrels, the lowest since October 2015.  

Is The Oil Glut Set To Return? -   For the second month in a row, the IEA has poured cold water onto the oil market, publishing an analysis that suggests 2018 could hold some bearish surprises for crude. The IEA’s December Oil Market Report dramatically revises up the expected growth of U.S. shale, which goes a long way to torpedoing the excitement around the OPEC extension. Late last month, when OPEC agreed to extend its production cuts through the end of 2018, the U.S. EIA came out with data – on the same day as the OPEC announcement – that showed an explosive increase in shale output for the month of September, up 290,000 bpd from the month before. Although there is a time lag on publishing production data, the huge jump in output in September, plus the spike in rig count activity over the past few weeks, points to strength in the U.S. shale sector. Against that backdrop, the IEA predicted that non-OPEC supply would grow by 1.6 million barrels per day (mb/d) in 2018, a rather significant upward revision of 0.2 mb/d compared to last month’s report. Adding insult to injury for OPEC, the IEA sees oil demand growing by just 1.3 mb/d. In other words, supply will grow at a faster pace than demand next year, opening up a global surplus once again. “So, on our current outlook 2018 may not necessarily be a happy New Year for those who would like to see a tighter market,” the IEA said. The surplus will be front-loaded – the first half of the year will see a glut of about 200,000 bpd. “ A lot could change in the next few months but it looks as if the producers’ hopes for a happy New Year with de-stocking continuing into 2018 at the same 500 kb/d pace we have seen in 2017 may not be fulfilled,” the agency wrote. In the past few months, a sense of bullishness and optimism returned to the oil market for the first time in years, but the IEA warned that it won’t last. 

The Biggest Voices in Oil Disagree About 2018 - The two most critical forecasts of global oil markets offer contrasting visions for 2018: one in which OPEC finally succeeds in clearing a supply glut, and another where that goal remains elusive. In the estimation of the Organization of Petroleum Exporting Countries, production curbs by the cartel and its allies will finally eliminate the excess oil inventories that have depressed crude prices for more than three years. But in the view of the International Energy Agency, which advises consumers, that surplus will barely budge. “Both cannot be right,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “Whichever way the pendulum swings will have a significant impact on the market.” OPEC and Russia have eliminated almost two-thirds of a global glut this year as the former rivals jointly constrict their crude production to offset a boom in U.S. shale oil. At the heart of the clash between the 2018 forecasts is whether the alliance can deplete the rest of the overhang without triggering a new flood of American shale. Late last year, OPEC and Russia set aside decades of rivalry and mistrust to end a slump in global oil markets that has battered their economies. Defying widespread skepticism, they cut oil supplies as promised, and resolved on Nov. 30 to persevere until the end of next year. Brent crude climbed this week to a two-year high above $65 a barrel, although prices had slipped to $63.37 as of 11:32 a.m. in London. Both the IEA and OPEC agree that the coalition’s cuts are working. The surplus oil inventories in developed nations -- OPEC’s main metric for gauging success -- fell to 111 million barrels in October, from 291 million last November, according to the Paris-based IEA, established in 1974 in the wake of the Arab oil embargo.  Where they diverge is on what happens next. OPEC predicts the re-balancing will be complete by late next year as those stockpiles plunge by about 130 million barrels in 2018. By contrast, the IEA sees inventories remaining steady as new supply growth surpasses gains in demand. It warned OPEC on Thursday that it may be deprived of a “ Happy New Year.” Although both institutions project that demand for OPEC crude will be about 32.3 million barrels a day on average in the first half of 2018, their views drift apart as the year progresses. OPEC expects it will need to pump about 34 million barrels day in the second half, while the IEA sees a requirement of just 32.7 million a day.

 OilPrice Intelligence Report: IEA Dashes Bullish Sentiment In Oil - Oil prices fell back from their highs earlier this week after the Forties outage, as the IEA dashed hopes of continued bullish momentum when it reported that the global supply surplus could return in 2018.   OPEC said that the global surplus in oil inventories dropped to 130 million barrels above the five-year average in November, down sharply from 154 million barrels the month before. “We are beginning to see a return to stable markets,” OPEC Secretary-General Mohammad Barkindo said. “Something that has eluded us for several years.” There are growing expectations that OPEC will need to offer details of an exit strategy at its June 2018 meeting.  The IEA published a bearish report this week. The headline conclusion was that U.S. shale would grow so sharply that it would help bring back inventory builds in 2018. The Paris-based energy agency predicted that non-OPEC supply would grow by 1.6 mb/d, overwhelming demand growth of just 1.3 mb/d. That would put an end to the strong inventory drawdowns that we have seen this year, and the agency predicted that inventories would rise by a rate of 200,000 bpd in the first half of 2016. The report undercuts the notion that the oil market will reach balance at some point in mid- to late-2018. Meanwhile, OPEC predicts strong inventory declines in the second half of 2018 – a notable difference from the IEA. “Both cannot be right,” Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, told Bloomberg. “Whichever way the pendulum swings will have a significant impact on the market.” A growing number of large financial institutions have pledged to end their support for fossil fuels. The World Bank said earlier this week that it would no longer finance coal plants beginning in 2019. But other examples continue to pop up. BNP Paribas said in October that it would no longer lend to shale and oil sands projects. Dutch lender ING said it would cut off finance for upstream oil and gas by 2019. French insurer AXA said it would no longer insure oil sands or coal projects.

U.S. Oil Rig Count Dips, Ending 5 Week Streak -- While OPEC is busy shackling its members’ production to its lowest level in six months, US oil and gas drillers have been rolling up their sleeves and diving into the shale patch, adding active rigs for five straight weeks—up until today, when Baker Hughes reported that active oil and gas rigs in the U.S. had fallen by 1. The total oil and gas rig count in the United States now stands at 930 rigs, up 293 rigs from a year ago, with the number of oil rigs falling by 4 and the number of gas rigs climbing by 3. The number of oil rigs stands at 747 versus 510 a year ago. The number of gas rigs in the US now stands at 183, up from 126 a year ago.While the US has, at least for one week, seen a dip in the number of oil rigs, Canada came out swinging this week, adding 22 oil rigs.  At 12:17pm EST, the price of a WTI barrel was up $0.18 (+0.32 percent) to $57.22, while the Brent barrel was trading down $0.16 (-0.25 percent) to $63.15.   The Permian Basin lost 3 rigs for the week, and Cana Woodford lost 4. Granite Wash and Marcellus, on the other hand, gained a total of five rigs collectively. Eagle Ford saw no change to the number of active rigs.U.S. crude oil production continues to climb a weekly basis, placing further pressure on prices. U.S. crude oil production for the week ending December 8 was 9.780 million barrels per day—another record for 2017, and the eighth straight weekly increase. At 12:12pm CST, WTI was trading at $57.27 with Brent trading at $63.23—largely unchanged from last Friday.

Oil Hovers Below 2-Year Highs With Focus On US Output (Reuters) - Oil prices were mixed on Friday, lingering below two-year highs as the continuing outage of a North Sea pipeline gave support, while climbing U.S. output and weak gasoline demand kept a lid on gains. Brent crude futures settled down 8 cents or 0.1 percent to $63.23 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled up 26 cents to $57.30 a barrel. WTI hit a two-year high of $59.05 on Nov. 24. Brent ended the week down slightly with a 0.3 percent fall, while WTI was down 0.1 percent. "There's definitely some pressure on crude," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York. "Demand for gasoline is lower which isn't normally the case in the holiday season and supplies are steadily rising. It's something to watch." Gasoline futures were down 3.5 percent on the week. Hedge funds and other money managers pared their net long U.S. crude futures and options positions in the week to Dec. 12, cutting the holdings for a second week after hitting a record high, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The speculator group cut its combined futures and options position in New York and London by 7,542 contracts to 435,200 during the period. The cut was the second in a row. The ongoing outage of the Forties pipeline, which carries North Sea oil to Britain, was a price support for Brent early in the session before the grade fell slightly, traders said. The outage's main physical impact is the North Sea region, but it has global relevance as the crude is used to underpin the Brent price benchmark. Operator INEOS declared force majeure on Forties, the first such declaration in decades. Force majeure is a legal designation that suspends a firm's contractual obligations due to situations beyond its control. Still, U.S. oil production , which has soared 16 percent since mid-2016 to 9.78 million barrels per day (bpd), has undermined OPEC's output curbs. U.S. supply, now close to matching levels of top producers Russia and Saudi Arabia, will likely move oil markets into a supply surplus in the first half of 2018, the International Energy Agency said. 

Oil prices pare weekly loss, with U.S. benchmark on the rise --Oil prices settled on a mixed note Friday, notching a third-consecutive weekly loss on nagging concerns over rising U.S. crude production. U.S. benchmark crude, however, climbed for the session, buoyed in part by a fall in the weekly U.S. oil-rig count, which offers a peek at drilling activity.January West Texas Intermediate crude CLF8, +0.56%  added 26 cents, or 0.5%, to settle at $57.30 a barrel on the New York Mercantile Exchange after tapping a low under $57. It lost 0.1% for the week. February Brent LCOG8, -0.09%  shed 8 cents, or 0.1%, to finish at $63.23, suffering a weekly decline of roughly 0.3%. Both WTI and Brent logged a third-straight week of declines. “It has been a volatile week for oil prices as the shut pipeline in the North Sea spurred an early week rally before a three times larger-than-average increase in weekly U.S. oil production saw futures turn negative on the week,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.“The dynamics of the oil market are divergent right now as the technical trend remains bullish while fundamentals are less encouraging, mostly thanks to the relentless rise in U.S. oil production,” he said.The Energy Information Administration Wednesday reported that total U.S. crude production rose 73,000 barrels a day to 9.78 million barrels a day for the week ended Dec. 8. That was another weekly record, based on EIA data going back to 1983. But Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil was down 4 at 747 this week, implying a slowdown in drilling activity. That number had climbed in each of the last three weeks. For now, “the path of least resistance [for oil] remains higher for the near term,” said Richey. “Gains in U.S. output will limit upside to the low $60s for WTI.”“The spread between Brent and WTI has also been volatile this week and that has largely been a function of the pipeline outage in the North Sea,” he said. Prices for Brent saw some support this week on concerns around the Forties North Sea pipeline, which now looks like it may be out of operation for as long as a month. Analysts says the outage could start to have an impact on WTI as it is around $6 a barrel cheaper than Brent, making imports of it more economical, according to a Dow Jones Newswires report.  Investors were also assessing a report Thursday from the International Energy Agency, which said that global oil supply has jumped to a one-year high as U.S. shale producers roar back to life. Among other energy contracts, January natural gas slipped 2.7% to $2.612 per million British thermal units, for the lowest most-active contract settlement since February. It ended about 5.8% lower for the week. January gasoline fell 1% to $1.655 a gallon—down roughly 3.6% on the week, while January heating oil HOF8, -0.30%  lost 0.3% to $1.904 a gallon, for a weekly loss of around 1.3%.

Saudi king approves $19 billion of economic stimulus steps (Reuters) - Saudi Arabia’s King Salman approved 72 billion riyals ($19.2 billion) worth of measures to stimulate growth in the private sector as authorities seek to pull the economy out of a slump caused by low oil prices. The measures include residential housing loans worth 21.3 billion riyals, a 10 billion riyal fund to support economic projects, and 1.5 billion riyals to support distressed companies, the government announced on Thursday. A 2.8 billion riyal government fund will be created to invest in smaller companies, while the government will adjust the fees which it charges for services to save smaller companies 7 billion riyals. More money would be spent on projects such as developing the kingdom’s broadband infrastructure and promoting advanced construction techniques. Officials did not give details of most of the stimulus measures. The private sector’s growth has slowed to a crawl this year because of government austerity policies designed to curb a state budget deficit caused by low oil export revenues. The economy faces more headwinds early next year in the form of the planned introduction of a 5 percent value-added tax in January and domestic energy price hikes. With unemployment among Saudis officially put at 12.8 percent, authorities are eager to prevent the private sector from slipping into recession. Fahad al-Sukait, a cabinet adviser who briefed reporters on the stimulus plan, said the measures outlined on Thursday were part of a four-year, 200 billion riyal scheme to aid private businesses. Of that amount, 40 billion riyals was allocated this year in the form of capital increases for state funds which support the economy by lending in areas such as housing. 

Saudi Arabia said to set up entity for assets taken in purge -- Saudi Arabia is setting up an organisation to manage assets relinquished by detainees as part of settlement agreements in the crackdown on corruption, according to people with knowledge of the matter. The kingdom is talking to consultants about how to set up the entity, which will evaluate and potentially sell holdings handed over by billionaires and princes in exchange for their freedom, said the people, asking not to be identified because the matter is private. Hani Halawani, head of direct investments at Sanabil Investments, part of the Public Investment Fund, will help run the organisation, the people said. The government’s Centre for International Communication didn’t respond to a request for comment. Halawani didn’t immediately respond to a request for comment. Saudi authorities are hoping to reach agreements with detainees “within weeks” after the arrests at the beginning of November, according to the kingdom’s attorney general. Authorities could recover as much as $100 billion from the settlement deals, according to Crown Prince Mohammed bin Salman. Prince Miteb bin Abdullah, one of the most senior Saudi royals detained in the crackdown, was released at the end of November after reaching a settlement deal believed to exceed the equivalent of $1 billion, an official involved in the campaign said at the time. 

Cyberattacks: The Biggest Threat To OPEC -- Oil and cybersecurity in one sentence certainly makes for a thrilling read, and there will be an increasing amount of information on the topic as the Internet of Things expands and the global oil industry adopts automation and digital technology.  OPEC is no exception in this digitalization drive, but unlike its non-OPEC counterparts, the cartel has emerged as much more vulnerable to cybersecurity threats.  An analysis of data collected from 134 countries by the International Telecommunication Union has revealed that some of the world’s biggest oil producers, including Iraq, Saudi Arabia, Venezuela, Iran, and the UAE, are lacking in the cybersecurity department. This means that, compared to European producers and the United States, OPEC members are pretty much unprepared for a major cyberthreat. What is the likelihood of such a threat actually materializing? Well, the general opinion in cybersecurity circles is that everything that can be hacked will be hacked at some point. Saudi Arabia’s oil and gas industry, for example, has been a favorite target for numerous attacks over the last few years, including the Shamoon virus, which in 2012 wiped clean the disks of more than 30,000 computers at Aramco, and according to reports from the cybersecurity industry, reared its ugly head again in 2016.  Overall, about half of all cyberattacks in the Middle East target the oil and gas industry, which suggests the answer to the above question is “Pretty high,” but the worse thing is that this likelihood is only going to get higher in the future.  Middle Eastern producers are following in the footsteps of their non-OPEC counterparts in adopting digital technology and automation to improve efficiencies in the post-2014 world, where efficiency has come to the fore in oil and gas. The problem, of course, is that the more you digitalize, the more vulnerable you become to attacks through digital channels.

Iraq declares war with Islamic State is over - BBC News: Iraq has announced that its war against so-called Islamic State (IS) is over. Prime Minister Haider al-Abadi told a conference in Baghdad that Iraqi troops were now in complete control of the Iraqi-Syrian border. The border zone contained the last few areas IS held, following its loss of the town of Rawa in November. The US state department welcomed the end of the "vile occupation" of IS in Iraq and said the fight against the group would continue. Iraq's announcement comes two days after the Russian military declared it had accomplished its mission of defeating IS in neighbouring Syria.The jihadist group had seized large swathes of Syria and Iraq in 2014, when it proclaimed a "caliphate" and imposed its rule over some 10 million people. But it suffered a series of defeats over the past two years, losing Iraq's second city of Mosul this July and its de facto capital of Raqqa in northern Syria last month. Some IS fighters are reported to have dispersed into the Syrian countryside, while others are believed to have escaped across the Turkish border. This is undeniably a proud moment for Mr Abadi - a victory that once looked like it might only ever be rhetorical rather than real. But if the direct military war with IS in Iraq is genuinely over, and the country's elite forces can now step back after a conflict that's taken a huge toll on them, it doesn't mean the battle against the group's ideology or its ability to stage an insurgency is finished - whether in Iraq, Syria or the wider world. Attacks may be at a lower level than they once were, but Iraqi towns and cities still fall prey to suicide bombers, while the conditions that fuelled the growth of jihadism remain - even in the territory that's been recaptured. 

The pundits were wrong about Assad and the Islamic State. As usual, they’re not willing to admit it - - The Islamic State is a shadow of its former self. In 2014, the extremist group seemed to make substantial inroads in achieving its stated goal of a caliphate. It boasted tens of thousands of fighters and territorial control over an area roughly the size of South Korea. By almost every metric, Islamic State has collapsed in its Syria stronghold, as well as in Iraq. As a former foreign fighter recently admitted, “It’s over: there is no more Daesh left,” using an Arabic acronym for Islamic State. The rollback of Islamic State must come as a shock to the chorus of journalists and analysts who spent years insisting that such progress would never happen without toppling the regime of Bashar Assad — which is, of course, still standing. A cavalcade of opinion makers long averred that Islamic State would thrive in Syria so long as Assad ruled because the Syrian Arab Army was part of the same disease.John Bolton, former United Nations ambassador under George W. Bush, insisted in the New York Times that “defeating the Islamic State” is “neither feasible nor desirable” if Assad remains in power. Writing in the Wall Street Journal, Sens. John McCain and Lindsey Graham asserted that “defeating Islamic State also requires defeating Bashar Assad.” Kenneth Pollack of the Brookings Institution prescribed a policy of “building a new Syrian opposition army capable of defeating both President Bashar al-Assad and the more militant Islamists.” Similarly, Max Boot, a contributing writer to this newspaper, argued that vanquishing Islamic State was futile unless the U.S. also moved to depose the “Alawite regime in Damascus.” Like other regime-change salesmen, he pitched a no-fly zone across the country to facilitate airstrikes against the Assad government, while boosting aid to the so-called moderate rebels.

Iran's Revolutionary Guard Sends Formal Message To US Military: Leave Syria Or Else - Well informed sources have said the commander of the Iranian Revolutionary Guards Corp Brigadier General Haj Qassem Soleimani sent a formal verbal message, via Russia, to the head of the US forces command in Syria, advising him to pull out all US forces to the last soldier “or the doors of hell will open up”.“My message to the US military command: when the battle against ISIS will end, no American soldier will be tolerated in Syria. I advise you to leave by your own will or you will be forced to it,” said Soleimani to a Russian officer. Soleimani asked the Russian officer to make known the Iranian intentions towards the US: that they will be considered as forces of occupation if these decide to stay in northeast Syria where Kurds and Arab tribes cohabit together. The Russians are not necessarily against the US presence and can adapt to this after defining the demarcation lines to avoid any clash, but Iran has a clear position and has decided not to abandon the Syrian President alone to face the US forces, if these stay behind. Soleimani’s message to the US clearly indicated the promise of ‘surprise measures’ against the US:  "You shall face soldiers and forces you have not experienced before in Syria and you will leave the country sooner or later."

"ISIS Is Defeated, The US Is Next In Line" - Paul Craig Roberts - Washington has already lost the Syrian war once. Now it is about to lose it a second time. A few days ago the president of Russia, Vladimir Putin, declared a “complete victory” in Syria: “Two hours ago, the (Russian) defense minister reported to me that the operations on the eastern and western banks of the Euphrates have been completed with the total rout of the terrorists.”  The Iranian commander of the forces which support the Syrian and Iraqi governments sent a note to the U.S. to let Washington know that any remaining U.S. forces in Syria will be fought down“The commander of the Iranian Revolutionary Guards Corp Brigadier General Haj Qassem Soleimani sent a verbal letter, via Russia, to the head of the US forces commander in Syria, advising him to pull out all US forces to the last soldier ‘or the doors of hell will open up.'”  “My message to the US military command: when the battle against ISIS (the Islamic State group) will end, no American soldier will be tolerated in Syria. I advise you to leave by your own will or you will be forced to it.”   According to reports, Russia has confirmed that Iran will stay in Syria as long as Syrian President Assad, who insists on liberating all of Syria without exception for the Americans, decides. Washington’s plan to occupy a corner of Syria and revive ISIS is dead in the water, as will be all US troops sacrificed to this purpose.  According to reports, CIA director Mike Pompeo sent a letter to Soleimani expressing his concern about Iran’s intention to attack American interests, declaring Washington “will hold Soleimani and Iran accountable for any attack.” According to reports the CIA’s letter had no effect and was treated with total contempt: “Mohammad Mohammadi Golpayegani, a senior aid to the Grand Ayatollah Ali Khamenei confirmed Pompeo’s attempt to send a letter but said  ‘Soleimani refused to read it or to take it because he has nothing further to add.’

Putin Orders Withdrawal Of Russian Troops From Syria During Surprise Visit -- Drawing a stark contrast between himself and his counterpart in the US, Russian President Vladimir Putin made a surprise appearance at Khmeimim Airbase in Syria on Monday morning where he ordered the withdrawal of Russian troops from Syria, now that the ISIS insurgency that once controlled roughly one-third of the country’s land area has been effectively dismantled.The Russian president was met by his Syrian counterpart, Bashar al-Assad, and Russian Defense Minister Sergey Shoigu at the airbase. Russian forces fighting with the Syrian Army during the country's civil war were stationed at the base.Putin ordered the withdrawal of Russian troops to begin immediately, according to Russia Today.“I order the defense minister and chief of the general staff to start the withdrawal of Russian troops to the site of their permanent deployment," Putin said, speaking to a crowd of Russian soldiers. The Russian leader said that during the span of two years, the Russian and Syrian militaries have “defeated the most battle-hardened grouping of international terrorists,” adding that he’s decided a significant portion of the Russian troop contingent should return to Russia. Putin warned that if ISIS tries to “rear their heads” in Syria again, Russia will retaliate with a level of force that “they have never seen before.” The Russian leader added that the conditions for a political settlement under the auspices of the United Nations had been created in Syria, and that refugees were returning home.

OIC declares East Jerusalem as Palestinian capital | Palestine News | Al Jazeera: The Organisation of Islamic Cooperation (OIC) has declared East Jerusalem as the capital of Palestine, rejected the US stance as "dangerous" and called on the international community to follow in its footsteps. At a summit held in Turkey a week after US President Donald Trump declared Jerusalem as Israel's capital, the group of Muslim leaders on Wednesday called on all countries to "recognise the State of Palestine and East Jerusalem as its occupied capital". In a statement, the OIC added that the 57-member group remains committed to a "just and comprehensive peace based on the two-state solution". It also called on the UN to "end the Israeli occupation" of Palestine and declared Trump's administration liable for "all the consequences of not retracting from this illegal decision". "[We] consider that this dangerous declaration, which aims to change the legal status of the [city], is null and void and lacks any legitimacy," the group said. Marwan Bishara, Al Jazeera's senior political analyst, said the summit in Istanbul highlighted that Palestinians, Arabs and Muslims continue to be committed to peace. "Now, Muslim countries in addition to a whole lot of others that are allied with the Palestinian cause will recognise Jerusalem as the capital of Palestine," he said. "And those Islamic countries are ready to sever relations to punish any one country that follows in the footsteps of the United States in recognising Jerusalem as the capital of Israel." 

Erdogan Calls Israel "Terrorist State That Kills Children", An Angry Netanyahu Responds -- Relations between Israel and Turkey took a sharp turn for the worse on Sunday after their leaders exchanged accusations of involvement in terrorism, days after the US recognition of Jerusalem as Israel's capital. First, Turkish President Recep Tayyip Erdogan said he would fight against the controversial declaration, describing Israel as a "terrorist state" that kills children, in a speech in Istanbul. "Palestine is an innocent victim… as for Israel, it is a terrorist state, yes, terrorist!”Erdogan said in a speech in the central Turkish city of Sivas. "We will not abandon Jerusalem to the mercy of a state that kills children."The Turkish leader has previously threatened to cut off ties with Israel if Trump follows through with his promise to move the US embassy. He has helped organize an international meeting of officials from Muslim majority countries to discuss how they should respond. Furthermore, he also warned that moving the embassy would represent an obstacle from a logistical standpoint. Hours after Erdogan's outburst, Israel's Prime Minister Benjamin Netanyahu hit back, calling his counterpart a leader who bombs Kurdish villagers and supports terrorists, during an official visit to Paris. While the two countries had normalised relations in recent years, Sunday's flare-up came after Turkey was angered by US President Donald Trump's decision to recognise Jerusalem as the capital of Israel. Furthermore, as we reported on Friday and Saturday, Trump's move has sparked protests in Muslim and Arab countries for four days.Erdogan earlier described the status of Jerusalem, whose eastern sector Palestinians see as the capital of their future state, as a "red line" for Muslims. Netanyahu was quick to counter the assault when he spoke later during a press conference alongside French President Emmanuel Macron."I am not used to receiving lectures about morality from a leader who bombs Kurdish villagers in his native Turkey, who jails journalists, who helps Iran go around international sanctions, and who helps terrorists, including in Gaza, kill innocent people," he said quoted by AFP. "That is not the man who is going to lecture us."

Will Erdogan cut ties with Israel over Jerusalem? - Turkish President Recep Tayyip Erdogan has said an upcoming summit of Muslim leaders will mark a "turning point" in the response to a US decision to recognise Jerusalem as Israel's capital.A strong supporter of the Palestinian cause, Erdogan called Wednesday's extraordinary meeting in Turkey's largest city, Istanbul, under the auspices of the Organization of Islamic Cooperation.Erdogan has threatened to cut diplomatic ties with Israel over the issue of Jerusalem, declaring the city's status a "red line".Historical power centres of the Middle East, such as Saudi Arabia and Egypt, have also condemned US President Donald Trump's unilateral move, without, however, announcing any concrete measures of their own.Palestinians view East Jerusalem as the capital of their future state. "Unfortunately, Erdogan does not miss an opportunity to attack Israel," Naftali Bennett, Israel's education minister, said in response to the Turkish leader's speech in which he threatened to sever relations with Israel, "if necessary".However, Erdogan has also spearheaded efforts to normalise relations between Turkey and Israel over the past year, after a near-break after Israeli forces stormed a Gaza-bound ship, resulting in the death of 10 Turkish activists. Here is a round-up of what Turkey's president has been saying about Jerusalem in recent days, and a look at his country's ties with Israel.

Responding to Trump, Turkey says it will open an embassy in East Jerusalem — in support of Palestinians - Escalating the chorus of global condemnation of President Trump’s recognition of Jerusalem as Israel’s capital, the Turkish government announced Friday it would open an embassy in East Jerusalem — in support of Palestinians. At the end of a special session of the Organization for Islamic Cooperation, or OIC, held in Istanbul, Turkey, to address the Jerusalem dispute, Turkish Foreign Minister Mevlut Cavusoglu announced the plan to establish a new Turkish embassy in East Jerusalem in support of Palestinians. Turkey would maintain its existing embassy in Tel Aviv for Israelis. Palestinians have long hoped East Jerusalem would be the capital of a future Palestinian state.Dozens of Arab states refer to the disputed territories of the West Bank and Gaza Strip as “Palestine,” though the West and many other countries do not recognize its existence. Turkish President Recep Tayyip Erdogan invited “all countries supporting international law to recognize Jerusalem as the occupied capital of Palestine.” Article continues belowAll it would take from Turkey is changing the sign outside the Jerusalem Consulate that has stood since Istanbul was known as Constantinople, the Ottoman capital that ruled this region of the Levant for half a millennium. “Trump's decision to recognize Jerusalem as Israel's capital came as a windfall for Erdogan,” Erdogan, who is battling corruption allegations related to a high-profile Iran sanctions case in New York, now can “attempt to act as the leader of Muslims,” Zeynalov said. “And he immediately gathered leaders of Muslim nations in Istanbul and delivered pompous speeches.” 

Egyptian religious leaders decline Pence meeting over Jerusalem decision | TheHill: Egypt's Coptic Church has declined to meet with Vice President Pence during his upcoming trip to the region this month, citing President Trump's decision to recognize Jerusalem as the capital of Israel, according to Reuters. The MENA state news agency reported Saturday that the church had "excused itself from hosting Mike Pence," saying Trump's decision came "at an unsuitable time and without consideration for the feelings of millions of people." The announcement comes as Palestinian leaders have also announced they will not meet with Pence during his visit.Trump's decision to recognize Jerusalem as the Israeli capital was a break with the international community which has traditionally recognized Tel Aviv as the country's capital. The Trump administration has been supportive of the plight of Coptic Christians in Egypt, recently voicing its support after a gunman opened fire on a bus carrying Coptic Christians in Egypt’s El-Minya governorate in May, killing 28 people. “America also makes clear to its friends, allies, and partners that the treasured and historic Christian Communities of the Middle East must be defended and protected,” Trump said in a statement at the time. 

South Korea Asks US To Halt Joint Military Exercises Until Olympics End - North Korea may have successfully bluffed its way into getting the US to stop holding massive army drills with South Korea's army. According to the FT, South Korea has politely asked the US to "delay" joint military exercises until after the Winter Olympics, in order to lower the chances that North Korea takes provocative actions during the Pyeongchang Games, which Seoul wants to use to showcase the country’s development. The unexpected request means that Seoul will want to postpone the start of the annual spring exercises — called Key Resolve/Foal Eagle — until after the Paralympics, which end on March 18. And since the FT's sources said the US was likely to accept the request, it means that Pyongyang has just succeeded in getting the US to bend to its demands that the US and South Korea stop conducting army drills on its border for at least three months. In many ways a de-escalation in military tensions, whether won by Seoul's clever diplomatic maneuvering which hopes to avoid a mushroom cloud in the middle of its games due to an errant Trump tweet, is a welcome development. Earlier this month, HR McMaster, US national security adviser, said the potential for war with North Korea was “increasingly every day” after Pyongyang last month tested the Hwasong 15, a long-range missile capable of hitting the east cost of the US — a move that came two months after it conducted its sixth, and most powerful, nuclear test. Others agreed: Sue Mi Terry, Korea chair at the Center for Strategic and International Studies, told the FT it was understandable that Seoul would want a delay since it was “very worried” about the Olympics. She said a postponement might also help create the conditions for talks, since it would reduce the chance of North Korea taking the kind of provocative actions that have, so far, closed off the possibility of serious negotiations with Washington.

Boats full of dead people from North Korea keep showing up in Japan — here's why -- Dozens of bodies have mysteriously washed up on Japan's shores over the past few weeks — and the evidence suggests they're coming from North Korea.  At least 40 corpses from about 15 boats have washed up along Japan's west coast since November, according to figures provided by Japanese authorities and calculated by Business Insider.  The most recent discovery was on Thursday, when authorities found two skeletons near an upturned boat near the western city of Oga, The Washington Post reported.  While Japanese authorities haven't been able to definitively identify the origins of these "ghost ships" — vessels discovered with no living crew — multiple factors suggest they are from North Korea.   A boat found on the island of Sado in late November contained what appeared to be North Korean cigarette packets and jackets with Korean writing on them, Reuters reported. Two bodies recovered from another boat found in Yamagata prefecture on Tuesday were also wearing pins showing the face of Kim Il Sung, the grandfather of North Korea's current leader, Kim Jong Un, according to the Japanese news agency Kyodo and The Associated Press. Most of the discoveries have been gruesome — in multiple cases, Japanese authorities have said they found skulls and decaying corpses.  North Korean vessels have been showing up in Japan for years. Eighty such ships drifted ashore in Japan in 2013, 65 in 2014, 45 in 2015, and 66 in 2016, said Satoru Miyamoto, a professor of political science and economics at Japan's Seigakuin University, citing Japan Coast Guard statistics.  But at least 76 vessels have shown up on Japanese shores since the beginning of this year, and 28 in November alone, The New York Times reported.  These appearances usually occur more frequently toward the end of the year, when bad weather proves most dangerous to seafarers using old boats and equipment, The Times said.

China Unveils Plan To Combat Trump Tax Reform: “We’ll Have Tough Battles" -- With Donald Trump's historic tax reform on the verge of passage, and with the Fed continuing its rate hiking cycle so far undeterred, and according to the Fed's own dot plot still having another 7-8 rate hikes to go, China is getting nervous because, as the WSJ reports, it fears "a double whammy sapping money out of China by making the U.S. a more attractive place to invest." In other words, those capital outflows which China was confident it had finally bottled up, are about to return. And that's even as the U.S. is taking China to task over trade imbalances, recently rejecting China's bid for "market economy" status with the WTO.In response, the WSJ reports that Chinese leadership is preparing a contingency plan to counter consequences for China of U.S. tax changes and the Fed’s expected interest rate increases. Under the plan, the PBOC will deploy a combination of tools including "higher interest rates, tighter capital controls and more-frequent currency intervention to keep money at home and support the yuan." Just like the unstable market which can careen, and crash at any one moment without central bank supervision, and which earned the stock market the title of a "Gray Rhino", which China defined as "highly probable, high-impact threat that people should see coming, but often don’t" the WSJ notes that an official involved in Beijing’s deliberations has also called Washington’s tax plan a “gray rhino,” an obvious danger in China’s economy that shouldn’t be ignored. “We’ll likely have some tough battles in the first quarter,” the official told the WSJ.

Surging Debt Will Make Asian Central Banks Cautious on Rates - Years of cheap money across Asia have left a legacy of surging debt that will force the region’s central bankers to be cautious when they eventually follow in the footsteps of South Korea by raising interest rates. In South Korea, whose borrowing costs were boosted on Nov. 30, household debt has ballooned to about 150 percent of disposable income. It’s an even larger 194 percent in Australia. In China, it’s companies feeling the strain with corporate debt equating to about 160 percent of gross domestic product.  Years of unprecedented stimulus have swollen the Bank of Japan’s balance sheet to almost the size of the economy. Given the 2 percent inflation target is still in the distance, a tightening of monetary policy remains a long way off, so that debt pile is set to keep on swelling. With the Federal Reserve set to lift its benchmark rate this week and forecast to do so three more times next year, investors’ taste for Asian assets is set to be tested. If and when Asian monetary authorities follow suit next year, the region’s mountain of debt will mean each incremental move packs an ever greater punch.  "Asia’s high debt leaves it exposed to a global repricing of credit risk, possibly triggered by inflation surprises," economists at Nomura Holdings Inc. led by Rob Subbaraman, head of emerging markets economics and Asia ex-Japan fixed income research, wrote in a note. The vulnerabilities vary and not every central bank in the region will be raising interest rates. But it may not be a coincidence that one of the nations with low household debt -- the Philippines -- may be one of the most aggressive in raising interest rates next year. Subbaraman said he expects four increases.

Sri Lanka hands over Hambantota Port to Chinese company on a 99-year lease - Sri Lanka on Saturday formally handed over the control of the southern deep sea port of Hambantota to the Chinese-led companies that will run its operations, and received its first payment on the 99-year lease, the Colombo Gazette reported.The China Merchants Port Holdings company owns 85% stake in the Hambantota International Port Group Ltd, which will now restructure the port for an estimated cost of $794 million (Rs 5,119 crore). The total deal is worth $1.1 billion (approximately Rs 6,500 crore) and will help Colombo repay the money it owes Beijing. The Sri Lanka Port Authority controls the rest of the stake in the company. The other Chinese company involved in the port development projects is the Hambantota International Port Services.Earlier, on Friday, the Sri Lankan Parliament overwhelmingly passed two gazette notifications that will grant tax concessions to the Chinese companies, the Sri Lankan newspaper Daily Mirror reported.  With this, Chinese news agency Xinhua reported, the Ranil Wickremesinghe government has joined China’s Belt and Road Initiative. “The Hambantota Port will add to Sri Lanka’s concept of transforming into a hub in the Indian Ocean,” it quoted the Sri Lankan prime minister as saying. The objective of the Belt and Road Initiative is to build trade and infrastructure networks that connect Asia with Europe and Africa along the ancient Silk Road routes.

India is buying world's emptiest airport in its battle for territorial dominance with China - India plans to buy the world's emptiest airport in an effort to limit China's influence in the Indian Ocean. Designed to accommodate one million passengers per year, Mattala Rajapaksa International Airport — a vanity project by Sri Lanka's former President Mahinda Rajapaksa that opened in 2013 — is a complete dud and receives just a dozen passengers a day. Yet India is set to pay $300 million for a joint venture granting it a 40-year lease over the nearly 2,000-acre space in southern Sri Lanka that was once so empty it was used to store rice. "India's future plans for the airport are hazy. Maybe a flight school? A new destination for Indian weddings? There seems little chance that it will turn a profit. That is not the point of the deal," David Brewster, an expert in Indian Ocean strategies at the Australian National University, recently wrote for The Interpreter.  Instead, the reason for the purchase appears to be the airport's proximity — just a half-hour drive away — from a shipping port in Hambantota, which is run by China.  As China seeks to spread its reach cross-continent via the One Belt, One Road initiative, India, the US, and Japan all hold concerns that China wants to use the Sri Lankan port as a naval base. But its ability to do so is severely hampered without access to an airport.  "A key element in any overseas naval base, and even a logistics facility, is easy access by air for people and supplies. A naval base also requires maritime air surveillance capabilities. Control over Hambantota airport will give India considerable control over how the port is used," wrote Brewster. "It is difficult to conceive of the Chinese navy developing a significant facility at Hambantota without also controlling the airport. In short, India is spending US$300 million buying an airport to block a Chinese naval base."

China and India sail into choppy waters in New Great Game  - The New Silk Roads, known as the Belt and Road Initiative (BRI), will weave and interconnect six major economic corridors. At 12,000 kilometers, the Eurasia Land Bridge Economic Corridor is a rail network from eastern China to western Europe via Kazakhstan, Russia and Belarus.Then there is the China-Mongolia-Russia Economic Corridor, while the China-Central Asia-West Asia Economic Corridor runs from Xinjiang to Istanbul. Nine new road links in the Greater Mekong help make up the China-Indochina Peninsula Economic Corridor. The Bangladesh-China-India-Myanmar Corridor, which includes an oil pipeline from the Bay of Bengal to Yunnan province, is also at the heart of the Silk Roads project, as is the China-Pakistan Economic Corridor or CPEC. This spreads out from Xinjiang to Gwadar and includes fiber-optic links, economic zones, new highways and port investment.Finally, there is the Maritime Silk Road, lapping from the shores ofsoutheast China toward the Indian Ocean and the Horn of Africa before rolling on to Venice in Italy and Rotterdam in The Netherlands. At the heart are ports and logistic infrastructure.Still, much has been made of the fact that Islamabad has been excluded from the $14 billion CPEC deal to build the Diamer-Bhasha Dam. Media claims at the time suggested that Chinese financing terms were not in Pakistan’s interests. The media there also reported that Beijing’s demand to use the renminbi in the Gwadar Free Zone would compromise the nation’s “economic sovereignty.”But then, the $57 billion CPEC initiative is actually a many-headed hydra, featuring a long-term plan to build on an initial 2014 program of 33 infrastructure projects by 2030. Of those on the original list, 21 are energy-related, 16 concern power generation and transmission, while eight are related to the development of Gwadar port. Another four involve transport projects. Construction has already begun on 18 of these programs. Yet there could still be problems ahead. “No matter how good the Sino-Pakistan relationship is, it is unavoidable that differences will occur in a program of this scope,” said Du Youkang, head of Pakistan research at Fudan University. “We are talking about dozens of billion-dollar projects and hundreds of smaller projects.”

Indian Govt postpones linking bank accounts to digital ID - A public outcry has forced the Indian government to delay plans to roll out a digital identity program on every citizen, linking bank accounts and other financial data. The mandatory linking of the controversial Aadhaar system with bank accounts and mutual funds has been postponed, according to an announcement issued on December 12 by the Department of Revenue under the Ministry of Finance. The announcement stated that a new date will be announced later. However, adding to the confusion, the Ministry of Finance issued a press release stating that bank accounts have to be linked by March 31, 2018. It is not clear if this rule applies only to new accounts or existing ones as well.

WTO Meet Likely to Be a Washout as India and US Clash Over Food Security - The Buenos Aires ministerial conference of the World Trade Organization (WTO) appears headed to be a washout with the US refusing to accede to India’s demand for a permanent solution to the public stockholding for food security. India has put its foot down on the issue, saying that no substantive outcome is possible at Buenos Aires if its demand is not met. “Today in the agriculture negotiations in Buenos Aires, a major country stated categorically that they cannot agree to any permanent solution on the public stockholding issue at ministerial conference (MC) 11. This has posed a severe threat to a successful conclusion of the conference as there was a ministerial mandate for a permanent solution by MC11,” said a commerce ministry release. It is a setback for the Narendra Modi government which had hardened its stance on public stockholding. Under the WTO Agreement on Agriculture (AoA), developing countries can give agricultural subsidies or aggregate measurement support (AMS) up to 10% of the value of agricultural production. There is, however, a ‘peace clause’ that forbids any action against a developing country if it breaches the 10% cap. Developed countries have linked India’s demand for public stockholding with its domestic support, which they say has breached the 10% permissible ceiling under the WTO rules. However, the Indian government has refuted the allegation. With the peace clause expiring this year and no solution in place, India can now be dragged to the WTO dispute settlement mechanism over its domestic price support for paddy, which, as per some estimates, has breached the 10% cap.

India’s Strategic Embrace of the US Has Failed to Extend to the WTO - Over the last three years, India has proudly claimed to have built a deeper, strategic relationship with the United States with Prime Minister Narendra Modi making a great number of high profile visits to America. However, despite this new paradigm of so-called “strategic embrace”, India doesn’t seem to have succeeded in making the US budge on its key areas of economic interests at the WTO. The current ministerial level talks at Buenos Aires, Argentina, have collapsed largely because of US’s lack of will to find solutions to the pressing problems of the developing world.What’s more, on the most critical issue for India – a permanent solution to its public food stocking programme which involves procuring food grains from millions of farmers – it is China that is on India’s side and the US is not budging an inch from its past position that India is flouting WTO norms by procuring foodgrains from farmers at prices which violate established norms and which, of course, are deemed to be patently unfair.Ironically, China appears to be on the same side as India on this crucial issue which concerns the nation’s food security as well as welfare of farmers who are currently on a warpath in India.The US rejection of a permanent solution to the public food stocking programme comes at a time when the Modi government is under attack from farmer organisations for lack of both adequate support price and food procurement infrastructure for the b ulk of their produce. It is a major election issue in Gujarat and will be in other states like MP and Rajasthan going to the polls next year.

Has Caste Discrimination Followed Indians Overseas? -- Saunvedan Aparanti, an Indian student studying in London, has found himself at the center of a heated campaign to introduce caste discrimination legislation in the United Kingdom. Having moved to Britain for university, Aparanti was surprised to find himself at the receiving end of “caste supremacy” from his new flatmates. The caste system he speaks of — and its trappings — is one that the world has, unfortunately, become familiar with. Stories relating to caste violence frequently emerge from some South Asian countries, particularly India, Pakistan, Sri Lanka, and Nepal. Headlines featuring the rape and murder of so-called “lower caste” people, or Dalits, are no longer rare.Everyone is in agreement that this mistreatment of people based on an ancient social hierarchy is horrific and that it must be combatted. But when Indians say caste discrimination has followed them overseas, the solution doesn’t appear as straightforward anymore. Across the UK, a fierce debate has been playing out within the British-Indian community over whether there is a need to introduce legislation for caste discrimination. In 2011, the employment tribunal heard its first claim of caste discrimination when a couple alleged they had been wrongfully dismissed by their employers because of their inter-caste marriage. Vijay Begraj claimed he was told by a “higher caste” colleague that he was lucky to be working in a law firm as his caste would have made him a cleaner in India. The tribunal also heard that Begraj had been assaulted by relatives of one of the firm’s partners and had been called derogatory caste names. The law firm in question, Heer Manak, denied the allegations until the case was ultimately abandoned in 2013.

 Fleeing Rohingya carry one key asset: solar panels (Reuters) - When Rohingya refugees began arriving in Bangladesh, after violence erupted in Myanmar’s northern Rakhine State in August, local residents were puzzled to see some toting small solar panels on their shoulders.  “When we saw they were carrying a solar panel with them, I was surprised. I would never do this in such a situation,” Jashim Uddin, a tea stall owner in Ukhiya, in Bangladesh’s Cox’s Bazar, told the Thomson Reuters Foundation.  Main Uddin, a government official in charge of Ukhiya sub-district during the Rohingya exodus, said the panels were being carried in despite the sound of gunfire on the border and reports of landmines.  More than 600,000 Rohingya Muslims have fled to Bangladesh from Myanmar’s northern Rakhine State since August, when the Myanmar army launched a crackdown following attacks on police posts and an army base by Muslim militants.  Many reported making an arduous trek lasting between 5 and 15 days along hilly and waterlogged roads – but the hazardous journey did not prevent many of them from carrying a solar panel with them.  “This solar panel saved my life,” said Ayatullah, 18, once a shopkeeper in Myanmar’s Mongdu township.  “They were killing everyone they came across. We had to depend on information from our people about the safe route, and a mobile phone was needed for that. This solar panel helped us to charge the mobile phone,” he said.

UN News - DR Congo: Over a dozen UN peacekeepers killed in worst attack on 'blue helmets' in recent history - In the deadliest single attack on a United Nations peacekeeping mission in nearly 25 years, rebels in eastern Congo killed 15 peacekeepers and wounded over 50 others in an assault on their base that was launched at nightfall and went on for hours. U.N. Secretary-General Antonio Guterres expressed "outrage and utter heartbreak" and called the attack a war crime, urging Congolese authorities to swiftly investigate. The State Department's Bureau of African Affairs said it was "horrified."U.N. peacekeeping spokesman Nick Birnback said it was the deadliest attack on a U.N. peacekeeping mission since June 1993, when 22 Pakistani soldiers were killed in Somalia's capital, Mogadishu. The peacekeepers killed Thursday were from Tanzania. Tanzanian President John Magufuli expressed his shock and prayers for the wounded, three of whom are in critical condition. At least five Congolese soldiers also were killed in the attack Thursday evening that has been blamed on one of the region's deadliest rebel groups. Three peacekeepers were missing, the U.N. said. More than 20 were evacuated for medical treatment in the regional capital, Goma. Birnback, the U.N. peacekeeping spokesman, called the assault "a determined and well-coordinated attack by a well-armed group." It was not clear when military reinforcements arrived after the attack, the U.N. said. Conditions in the region are "very, very challenging," said U.N. peacekeeping chief Jean-Pierre Lacroix, who said the attack followed a recent increase in activities by various armed groups. He called the assault a response to the U.N. mission's own "increasingly robust posture." 

 World trade order in a wobble as Washington snubs WTO status quo (Reuters)  The delegates of more than 160 countries from around the globe failed to reach any new agreements in the face of stinging U.S. criticism of the WTO and vetoes from other countries. At the end, they were not even able to agree on a joint communique. And a further blow could strike in the coming week when Republican U.S. lawmakers aim to pass sweeping changes to the tax code which may introduce protectionist measures critics say are at odds with WTO rules. “In retrospect, 2017 could mark the beginning of the end of the rules-based free trade order and the system unraveling,” said Andre Sapir, senior fellow at the Brussels-based think tank Bruegel. He called it a “big worry”. U.S. President Donald Trump, propelled to power by his election promise to put “America First” and protect U.S. workers against what he views as unfair trade practices from China and others, has weakened the WTO as a forum to settle disputes. In the past months, Washington has blocked the appointment of several WTO appeals judges, a move which could paralyze the body’s dispute settlement system for years to come. “The new U.S. administration does not want to work within multilateral frameworks. It wants bilateral deals,” Sapir said. As a critic, he says, “This would lead to a system in which the stronger ones outplay the smaller ones, it would be the law of the jungle.” This apparent change of course in Washington is puzzling for free trade advocates who argue that the United States for decades supported and benefited from multilateral decision-making and rules-based arbitration enshrined in the WTO statutes. THREAT TO GROWTH For them, Trump’s protectionist rhetoric is a threat to global growth and prosperity since tariffs and other trade barriers such as import restrictions, registration formalities or state aid for domestic suppliers push up costs for everyone. The slow dismantling of the international trade order could also hurt mid-term export prospects for European countries and Germany in particular at a time when the euro zone economy is benefiting from a surge in demand for its manufactured goods. 

World’s richest 0.1% have boosted their wealth by as much as poorest half - The richest 0.1% of the world’s population have increased their combined wealth by as much as the poorest 50% – or 3.8 billion people – since 1980, according to a report detailing the widening gap between the very rich and poor. The World Inequality Report, published on Thursday by French economist Thomas Piketty, warned that inequality had ballooned to “extreme levels” in some countries and said the problem would only get worse unless governments took coordinated action to increase taxes and prevent tax avoidance. The report, which drew on the work of more than 100 researchers around the world, found that the richest 1% of the global population “captured” 27% of the world’s wealth growth between 1980 and 2016. And the richest of the rich increased their wealth by even more. The top 0.1% gained 13% of the world’s wealth, and the top 0.001% – about 76,000 people – collected 4% of all the new wealth created since 1980. “The top 0.1% income group (about 7 million people) captured as much of the world’s growth since 1980 as the bottom half of the adult population,” the report said. “Conversely, income growth has been sluggish or even nil for the population between the global bottom 50% and top 1%.” The economists said wealth inequality had become “extreme” in Russia and the US. The US’s richest 1% accounted for 39% of the nation’s wealth in 2014 [the latest year available], up from 22% in 1980. The researchers noted that “most of that increase in inequality was due to the rise of the top 0.1% wealth owners”. The world’s richest person is Amazon’s founder and chief executive, Jeff Bezos, who has a $98.8bn (£73.9bn) fortune, according to the Bloomberg billionaires index. Bezos, the biggest shareholder in Amazon, has seen his wealth increase by $33bn over the past year alone.

U.S. Demands NATO Action on Russian Missiles - Der Spiegel - For some time, Washington has believed that Russia is in violation of the Intermediate-Range Nuclear Forces Treaty (INF Treaty), which bans medium-range nuclear missiles. With the help of satellite imagery, the U.S. believes it is able for the first time to prove that Moscow has developed a new ground-launched, nuclear-capable cruise missile known as the SSC-8. Washington claims to have observed at least two operational units outfitted with the cruise missiles. Should the U.S. information prove accurate, it would be a severe blow to one of the pillars of European security: the INF Treaty. It was signed 30 years ago by Soviet leader Mikhail Gorbachev and U.S. President Ronald Reagan and called for the destruction of all ground-based launch systems for nuclear warheads with a range of between 500 and 5,000 kilometers. An entire category of weapons was eliminated at the stroke of a pen. It was a milestone of disarmament. As early as 2016, at the NATO summit in Warsaw, the alliance called on Russia "to preserve the viability of the INF Treaty through ensuring full and verifiable compliance." Just over a year later, American patience seems to have run out and they are no longer satisfied with simple appeals.   Washington has now issued its allies an ultimatum: By the alliance summit in the summer of 2018, Mattis said at the recent top-secret meeting in Brussels, NATO must find a common position on forcing the Russians to return to INF Treaty compliance, with coercion if necessary. Should NATO prove unable to agree on a course of action including possible punitive measures, the United States, Mattis threatened, would push ahead on its own. "What it would mean for the U.S. to go it alone under a White House led by Donald Trump is something nobody wants to think about," said one NATO diplomat.

A New Stealth Attack in EU’s “War on Cash” -  Don Quijones - The EU’s Orwellian-dubbed Civil Liberties and Economic Affairs committee has approved tough new rules on cash that travelers might bring into or take out of the bloc. It’s also broadened the definition of cash to include precious stones and metals and prepaid credit cards.For the moment the new definition does not include Bitcoin and other cryptocurrencies, for one simple reason: “customs authorities lack the resources to monitor them.”Most importantly, the draft law will enable authorities to impound “cash” below the traditional €10,000 threshold, if criminal activity is suspected. The new rules would repeal the First Cash Control Regulation (CCR) from 2005, which requires individuals to declare sums over €10,000 when leaving or entering the EU. The draft law still needs to be approved by the European Parliament. Then the legislation needs to be negotiated with EU governments. If the law is passed, anyone acting suspiciously carrying any amount of cash, whether in notes, precious stones, precious metals or prepaid credit cards, could face having their “money” impounded. “Large sums of cash, be it banknotes or gold bullion, are often used for criminal activities such as money laundering or terrorist financing,” It could be argued that any legislation aimed at disrupting criminal financial networks is, de facto, a welcome move, but that would ignore the fact that many forms of modern-day tax evasion, avoidance and money laundering are conducted without cash through shell corporations located across multiple jurisdictions, including Luxembourg. But the EU’s anti-cash measures are not aimed at the giant corporations and well-heeled individuals and families, including those that, thanks to their armies of professional lawyers and accountants, get to exploit the loopholes built into the system to stash their wealth far from the prying eyes of European tax authorities. No, the measures are aimed at average Joes and ordinary Janes, and the main objective is to further dampen their ability or willingness to use or carry cash. This has long been a cherished goal of the EU, which began 2017 by announcing its intention to “explore the relevance of potential upper limits to cash payments,” with a view to implementing cross-regional measures in 2018. Any attempt by the European Commission to set a mandatory continent-wide limit is likely to be met with fierce resistance — at least in countries where cash is still revered, like Germany and Austria. Others are already so far down the path toward a cashless society that they’ll barely notice the difference.

 Treasury Yields Have Never Been This Negative for Euro Investors - For purchasers in Germany, France and other euro-zone countries who use swaps to protect against currency swings, the yield on 10-year Treasuries fell Friday to around minus 0.64 percent. That’s a record low in data going back to the common currency’s debut in 1999. And it’s a far cry from the 2.35 percent available to those purchasing the note unhedged. The culprit for the negative rate is largely the swelling cost to convert euros into dollars through what’s known as the cross-currency basis, now at around minus 105 basis points. That’s the widest since 2012. While funding markets are often strained at year-end, this time has an added twist. The tax plan being debated in the U.S. Congress could spur American companies to bring home some of the trillions of dollars they’re estimated to be holding offshore. And the anticipation of its passage could be why funding markets are feeling squeezed, according to Gennadiy Goldberg at TD Securities. Here’s a scenario: a European company needs greenbacks, and usually sells dollar-denominated debt to get them. Ordinarily, U.S. firms with offshore cash would be buyers of that debt. But now, they’d rather not lock up their funds if they plan to repatriate cash. So to find demand for their obligations, European issuers would borrow in euros and tap the swaps market to get greenbacks. The extra demand for these swaps strains the system, and it all adds up to a funding crunch that some strategists say may just get worse. “As repatriation flows begin to happen, I certainly think that you’ll see overall funding levels become a bit more negative,” Mark Cabana, head of U.S. short-term rates strategy at Bank of America Corp., said in a telephone interview. “You could have these funding strains evident for several quarters.” 

The Bulgarian Government Is Sitting on $3 Billion in Bitcoin --A crackdown on organized crime by Bulgarian law enforcement in May resulted in the seizure of more than 200,000 bitcoins – an amount worth more than $3 billion at today's prices.  According to a press release dated May 19 from the Southeast European Law Enforcement Center (SELEC), a regional organization comprised of 12 member states including Bulgaria, a total of 213,519 bitcoins were seized that month. Twenty-three Bulgarian nationals were arrested during the operation, and officials said at the time that the arrests and subsequent asset seizures followed an investigation into an alleged customs fraud scam. As of press time, the amount seized is worth approximately $3.3 billion, at a price of roughly $15,524, according to CoinDesk's Bitcoin Price Index (BPI). Authorities commented at the time: "The offenders choose the bitcoin way of investing/saving the money, because it is rather difficult to be tracked and followed." They further alleged that those involved developed a virus which was used to hack into Bulgarian Customs computers, allowing the perpetrators to skip paying fees when transporting goods into the country. The virus was uploaded to government machines by bribed agents, according to the release. According to a report from Bivol.bg from Nov. 28, the Bulgarian government declined to release further details, citing an ongoing criminal investigation. Notable in the May 19 release is a notation that, at the time it was published, a single bitcoin was worth $2,354. The release stated that the total amount seized was worth $500 million – less than one-sixth of its current value today.

17 Oligarchs Who Are Shaping Eastern Europe - OstPol --  For the International Anti-Corruption Day, we asked 17 investigative journalists to introduce us to oligarchs, magnates or tycoons who are shaping the fate of their countries from behind the scenes.

Switzerland Is Well-Prepared For Civilizational Collapse -  Alex Tabarrok - More than any other country, Switzerland’s ethos is centered around preparing for civilizational collapse. All around Switzerland, for example, one can find thousands of water fountains fed by natural springs. Zurich is famous for its 1200 fountains, some of them quite beautiful and ornate, but it’s the multiple small, simple fountains in every Swiss village that really tell the story. Elegant, yes, but if and when central water systems are destroyed these fountains are a decentralized and robust system for providing everyone with drinkable water. The Swiss political system is also decentralized. If the central government fails, the Swiss might not even notice. The mountains and valleys also mean that Swiss towns and villages are geographically independent yet linked in a spider-web of robust connections. Despite being at peace since 1815, Switzerland is prepared for war. Swiss males (and perhaps females in the future) are required to serve in the military (those who cannot, pay a special tax) creating a robust reservoir of trained citizens ready to serve in an emergency.  The Swiss have been tunneling the Alps for hundreds of years creating innumerable secret hideaways for people and stores. As a further example of how ridiculously well prepared the Swiss are for any and all threats, there are things like hidden hydroelectric dams built inside of unmarked mountains so that in the event of mass bombings, they’ll still have electricity from these secret facilities. And, remember, these are the things the Swiss government has let us know about. It is thought that there are probably more fortifications and hidden goodies scattered about the country’s landscape. In addition, to thousands of military bunkers permeating the Swiss mountains there are several hundred thousand private and public fallout shelters the largest of whichcan hold some 20,000 people. Some of the largest installations have been decommissioned and even turned into museums but there is little doubt that they could be rapidly re-purposed.. As the Swiss continue to improve their already fantastic railway system it’s standard practice to convert old railway tunnels to security shelters. Buried deep alongside the hydroelectric dams, shelters and food stores, the Swiss also have libraries ready to reboot civilization:’

France to impose total ban on mobile phones in schools: France is to impose a total ban on pupils using mobile phones in primary and secondary schools starting in September 2018, its education minister has confirmed. Phones are already forbidden in French classrooms but starting next school year, pupils will be barred from taking them out at breaks, lunch times and between lessons. Teachers and parents are divided over a total ban, however, with some saying children must be able to "live in their time". In France, some 93 per cent of 12 to 17-year-olds own mobile phones. "These days the children don't play at break time anymore, they are just all in front of their smartphones and from an educational point of view that's a problem," said Jean-Michel Blanquer, the French education minister. "This is about ensuring the rules and the law are respected. The use of telephones is banned in class. With headmasters, teachers and parents, we must come up with a way of protecting pupils from loss of concentration via screens and phones," he said. "Are we going to ban mobile phones from schools? The answer is yes." Studies suggest that a significant number of pupils continue to use their mobiles in class and receive or send calls or text messages.

Norway Is Moving To Decriminalize All Drug Use -- Norway is the latest country to move toward decriminalizing drugs and promoting addiction treatment rather than punishing addicts. This week, a majority of members of the Norwegian parliament directed the national government to reform its policies.“The majority in the parliament has asked the government to prepare for reform,” a spokesperson for the Storting, the Norwegian legislature, told Newsweek.“It has started a political process,” he said, still cautioning that “it’s just the starting point.” Despite some headlines’ claims that drugs have already been decriminalized, there is no legislation yet.Nicolas Wilkinson, the SV (Socialist Left) party’s health spokesman in the Storting, said the majority wants to “stop punishing people who struggle, but instead give them help and treatment,according to VG, a N orwegian publication. He said the switch in policy will lead to an emphasis on treatment and follow-up programs, though lawmakers made it clear that they do not intend to legalize drugs.

David Davis Points Out Brexit “Breakthrough” Isn’t Binding as Draft European Council Statement Tightens the Screws -- Yves Smith -  Even as the UK press has gone into triumphalism over Theresa May having gotten the European Commission to recommend to the European Council that the UK be allowed to progress to the next phase of negotiations, bits of reality are already intruding on this phase of Brexit delusion. We’ll limit ourselves to three topics: Foreign Minister being quickly forced into a “this isn’t binding” defense when asked too many tough questions on the BBC; some bad news for the UK in the terse draft European Council statement; and a debate over what the “joint report” really says about Ireland. As we indicated in our short note when the Brexit “breakthrough” was announced last Friday, the significance of the agreement on Friday was political. Arlene Foster of the DUP had temporarily withdrawn her coalition’s objections to the draft pact, allowing Jean-Claude Juncker and Michel Barnier to give it a seal of approval and tell the European Council that they thought the UK had made sufficient progress so as to be allowed to proceed to Phase 2 of the negotiations. In other words, what mattered was being (presumably) waived past a big procedural hurdle. As we wrote: This is not a deal. Nothing is final. This is the UK having presented what is at best a letter of intent on the three issues that the EU had deemed necessary for the UK to have demonstrated “sufficient progress” to be allowed to talk trade. In fact, even that reading turned out to be generous, since as we will see shortly, the UK and the EU will not discuss a trade pact in the second phase, but merely a transition deal.  The opening section of the so-called Joint Report From the Negotiators of the European Union and the United Kingdom Government on Progress During Phase 1 Negotiations Under Article 50 TEU of the United Kingdom’s Orderly Withdrawal From the European Union has lots of phrases that make clear the document is not binding. For instance:

    • “This report….records the progress made…”
    • “…agreement in principle”
    • “…nothing is agreed until everything is agreed…
    • “…does not prejudge any adaptations that might be made..”
    • “…is without prejudice to discussions on the framework of the future relationship..”

When you combine that with the elephant-the-room internal contractions on Ireland (no hard border anywhere, yet the UK is supposedly still leaving the Single Market and the Customs Union), it’s not hard to agree with Richard North when he wroteMrs May has not so much kicked the can down the road as the whole cannery. But it is still there, looming on the horizon, ready to dominate phase two. In so doing, the parties have set themselves up for a fall – apparent commitments that aren’t actually commitments and which cannot be implemented.

Davis rows back on claim that Ireland deal is ‘unenforceable’ - David Davis today claimed the government’s pledge to avoid a hard border in Ireland would be “legally enforceable” less than 24 hours after casting doubt over the commitment. The Brexit secretary was accused of backing away from the government’s agreement on border arrangements just two days after the prime minister’s triumphant cross-Channel dash marked the end of days of wrangling with the Democratic Unionist Party, the Irish government and EU negotiators. He described it as a “statement of intent” which was not legally enforceable, suggesting that the government could walk away from the deal. He also exasperated officials on the continent by serving notice that Britain would not pay a divorce bill without securing a trade deal with the EU in return — in contrast to the chancellor, Philip Hammond, who said last week it was “inconceivable” that Britain would fail to honour its international obligations. But after his remarks caused consternation in Dublin and irritation in Brussels Mr Davis backtracked claiming his comments had been misinterpreted. “What I actually said yesterday, in terms, was we want to protect the peace process, we want to protect Ireland from the impact of Brexit for them,” he told LBC. “And I said this was a statement of intent which was much more than just legally enforceable. “In other words, of course it is legally enforceable under the withdrawal agreement. But even if that did not happen for some reason, [if] something went wrong, we would still be seeking to provide a frictionless, invisible border with Ireland.” Leo Varadkar, the Irish prime minister, had regarded Britain’s commitment to avoiding a hard border through regulatory alignment with the customs union and the single market as “politically bulletproof” and “cast iron” when Mrs May announced it on Friday. However the government was understood to see it more as a statement of intent pending phase two of the talks. Mrs May has faced scepticism from the European Commission about her aim of taking Britain out of the single market and customs union without necessitating a hard border in Ireland.

The Brexit impact on Ireland goes far beyond the immediate border question - In recent days, there has been a flurry of media and political attention on the question of avoiding a hard border between Ireland and Northern Ireland. As Adrian O’Neill, the Irish Ambassador to the UK, set out at the IfG recently, the Irish Government has been clear that it needs a guarantee of no hard border to approve the beginning of talks on the future relationship between the UK and the EU. But the Ambassador also pointed out that Brexit raises many other issues for both parts of Ireland. While the border question is attracting attention now, it is only one of a long list of issues that needs to be discussed. Ambassador O’Neill outlined Ireland’s views on Brexit. He pointed out that the current situation on Ireland, including the open border, is underpinned by both Ireland’s and the UK’s membership of the EU. The EU’s Single Market and Customs Union did away with the need for controls on goods crossing the border, and the Good Friday Agreement removed controls on people crossing the border. In his view, the Good Friday Agreement was “as much an achievement” of the EU as it was of the UK and Irish governments. What’s more, O’Neill suggested that the genesis of the peace process was in both countries’ status as EU members. He said that after Ireland and the UK joined the then European Economic Community in 1973, ministers and officials from both governments met much more regularly than previously. This allowed the two governments to build relationships that served as the basis for the Good Friday Agreement negotiations. As the Ambassador put it, Ireland and the UK were “partners in the EU before they were partners in peace.”

Mark Carney Forced To Explain Surge In UK Inflation To Highest In Almost 6 Years -- The market expected Mark Carney to avoid it but it was just not meant to be.The BoE Governor will suffer the ignominy of a bizarre tradition of having to write a letter to the Chancellor of the Exchequer explaining why UK inflation is more than 1.0% above the target of 2.0%. The market had expected the UK CPI to rise by a modest 0.2% month-on-month, taking the year-on-year rate up to 3.0%. Instead the month-on-month rate hit 0.3% pushing the annual rate to 3.1%, its highest rate since March 2012. As Bloomberg writes, "U.K. inflation unexpectedly accelerated to the fastest in more than 5 1/2 years in November, forcing Bank of England Governor Mark Carney to explain why price growth is so far above target. Consumer prices rose 3.1 percent from a year earlier, driven by the cost of air fares and computer games, the Office for National Statistics said on Tuesday. That’s up from 3 percent in October and the highest since March 2012."

Coveney says North will enjoy GFA status quo after Brexit - RTE - Minister for Foreign Affairs Simon Coveney has said that full alignment with the rules of the European Union's single market and customs union meant that Northern Ireland would enjoy the status quo post-Brexit. Speaking in Brussels, Mr Coveney said: "We're very clear in terms of what maintaining full alignment with the rules of the single market and customs union [means] in order to maintain north-south cooperation, an all-island economy, and the full implementation of the Good Friday Agreement. "We're clear what that means. It means essentially protecting the status quo, and that is what the all-island economy is all about." Earlier, the European Commission said last week's agreement between the Commission Task Force and the UK in the Brexit negotiations was not "formally speaking" legally binding, but was a "gentlemen's agreement". Speaking in Brussels, spokesman Margaritis Schinas said it was "fully backed and endorsed by the UK government". He said: "Formally speaking the Joint Report is not legally binding because it is not yet the Article 50 Withdrawal Agreement, but we see the joint report of Michel Barnier and David Davis as a deal between gentlemen. "And it is the clear understanding that it is fully backed and endorsed by the UK government. "President Juncker had a meeting with Prime Minister May last Friday morning to ascertain that this is precisely the case. They shook hands." 

Brexit: dereliction of duty -- Something very strange happened yesterday. Theresa May, prime minister of the United Kingdom for the time being, stood in the Commons to give a statement on the outcome of Friday's Brexit negotiations. She delivered a litany of nonsense, one impossible scenario after another. Her own party loved her for it. The opposition, confused and ill-prepared, failed to make an impact. Mrs May lived to see another day. As always, the key issue was the Irish question, with Mrs May holding forth about the joint report reaffirming her government's "guarantee that there will be no hard border between Northern Ireland and Ireland". And with this came an expression of her "determination to uphold the constitutional and economic integrity of the whole United Kingdom". This, Mrs May said, she had reinforced further by making six principled commitments to Northern Ireland. The first was to "uphold and support Northern Ireland's status as an integral part of the United Kingdom, consistent with the principle of consent". The second was to "fully protect and maintain Northern Ireland's position within the single market of the United Kingdom". Third, there were to be "no new borders within the United Kingdom". Thus, in addition to there being no hard border between Northern Ireland and Ireland, the government would maintain the common travel area throughout these islands. Fourthly, the whole of the United Kingdom, including Northern Ireland, would leave the EU customs union and the EU single market. Fifthly, the government would "uphold the commitments and safeguards set out in the Belfast agreement regarding north-south co-operation". Sixth, the whole of the United Kingdom, including Northern Ireland, would no longer be subject to the jurisdiction of the European Court of Justice. The trouble is that all of this sounds so eminently reasonable, especially when trotted out in the brisk, managerial tones of the Prime Minister. But it holds together only if no one asks for details of the essential requirements for the guarantee of no hard border, alongside protecting and maintain Northern Ireland's position within the single market of the United Kingdom. And, of course, no one asked.

European Parliament to warn that British payments to Brussels must continue after Brexit - The European Parliament will on Wednesday demand Britain promises to stick closely to EU rules and keep paying Brussels long after Brexit. MEPs are likely to back a resolution, obtained by The Telegraph, that says Britain and the EU should sign an association agreement, which would be coupled with a free trade deal. The EU has many such association agreements with other countries. The treaties, which give a legal basis for cooperation, are used in some cases as a preliminary step towards EU membership but also for non European nations such as Libya and Azerbaijan. The draft text, prepared by five pro-EU political groups, insists that MEPs will only accept the association agreement, if it strictly adhered to conditions including “commensurate financial contributions” by Britain. Such an agreement would mean Britain paying Brussels for the foreseeable future but the payments would help secure some access to the lucrative EU market, while curbing freedom of movement rules in Britain. Britain has already agreed to pay a divorce bill to the EU of at least £35-£39 billion. According to the resolution, MEPs will only accept such a treaty if Britain adheres to EU standards on tax evasion, climate change, data protection, fair competition and workers’ rights. Britain’s compliance with the standards must be monitored and enforced, says the latest version of draft text, which calls for a “robust” EU-UK dispute resolution system after Brexit. The insistence on keeping British regulations close to EU rules could enrage those Brexiteers who want to slash red tape in a bid to undercut the bloc. The proposed agreement will please those pushing for a soft Brexit that keeps the status quo as much as possible. Yesterday Keir Starmer set out Labour's Brexit plan, which would tie Britain to the single market and keep making payments into the EU Budget. The resolution suggests the future relationship be divided into four pillars, including trade, economic, security and foreign policy cooperation.

 Theresa May Humiliated As Tory Rebellion Leads To Key Brexit Vote Loss -- Prime Minister Theresa May suffered a humiliating defeat for her key Brexit law on Wednesday after pro-European members of her own party openly defied her orders in a vote in Parliament. The vote in the UK Parliament was described as being “knife-edge” with the BBC’s chief political correspondent, Norman Smith, called it a “Big Bananas moment” for May. In the end, May lost by a narrow margin, with 309 voting for and 305 against, and as a result, UK members of parliament - not Theresa May and her Cabinet - will have the final say on Brexit. MPs had been asked to vote on the following amendment: The final deal with the EU must be approved by a law passed by Parliament. The results of the vote were as follows: Yes: 309 No: 305 Majority: 4According to Sky News, 12-13 Conservative MPs voted against the government with 2 Labour MPs voted with the government, and “while this won't derail the Brexit deal it is a sign of UK Prime Minister May's increasingly strained position" Citi explained after the vote.  Some more media reactions, first the Telegraph: Theresa May has suffered her first major Commons defeat after Tory rebels defeated Government and voted for an amendment to the European Union (Withdrawal)Bill. MPs have voted in favour of Parliament being given a meaningful vote on the terms of Brexit by 309 votes to 305. In a damaging blow to her already diminished authority, Tory rebels rallied around Former attorney general Dominic Grieve to back his attempt to ensure MPs have a "meaningful vote" on the withdrawal deal. A dramatic last-minute concession by justice minister Dominic Raab was dismissed as "too late" by Mr Grieve, whose amendment to the EU (Withdrawal) Bill squeezed through the Commons on a majority of four amid tense scenes in the chamber. The irony is that the humiliating vote came just days after she reached what was dubbed a successful divorce settlement deal with the EU and Ireland, only to betrayed by members of her own party. Her choice was either to give in to demands from rebel MPs in her own party, who wanted the power to vote on any final Brexit deal, or face a damaging defeat when her refusal was debated by parliament. She didn’t give in, and enough MPs from her party voted against her government.

Brexit: separation deferred - It was in November, after the close of the sixth round of the negotiations, when I wrote that it was going to take a miracle for the [European] Council to give the go-ahead in December for the move to phase two. With the Council scheduled to make its pronouncement this Friday, that miracle has yet to happen and, by all accounts, it isn't going to happen. Despite Mrs May's Friday "dawn patrol" and a promise that the talks could move on, the actual outcome looks to be something very different to that which we originally anticipated. In the beginning, of course, there was phase one and for a long time there was only phase one. As this took on a definitive shape, it followed logically that there would be a phase two. Then, as time passed, this phase two started to take on magical properties which eventually represented the height of UK aspirations. But there was nothing ever to say that phase two was the entire game. In fact, I do not ever recall any formal definition ever being published which told us what it was. To an extent, it was always something of a moveable feast, especially as it started off dealing only with the single issue of the framework of the relationship between the UK and the EU. It was largely the UK, however, that fixed on the assumption that this second phase would include trade talks,  despite an early warning from trade commissioner Cecilia Malmstrom that there could be no negotiations on trade until the UK had left the EU and become a "third country". Despite contra-indications from innumerable sources, Mrs May and her Brexit team have convinced themselves that trade is on the agenda for phase two, with a firm expectation that the three issues would be handled simultaneously. Then we got the Joint Report, which more or less reaffirmed that assumption.  However, the signs of reality re-asserting itself started creeping in with the draft guidelines for this now legendary phase. Brutally, it defined phase two only in terms of transition and the framework for the future relationship. Trade is hardly mentioned.

Tory Brexit rebels inflict major defeat on Theresa May - As the prime minister prepared to meet her fellow EU leaders in Brussels on Thursday, a series of last minute concessions by ministers and intense pressure from Tory whips failed to deter 11 of the government’s MPs from voting against the leadership. Backers of amendment seven, tabled by former attorney-general Dominic Grieve, included former education secretary Nicky Morgan, former business minister Anna Soubry, and South Cambridgeshire MP Heidi Allen. MPs cheered and waved their order papers as the result of the crucial vote was read out, revealing the government had lost by 309 votes to 305: May’s first Commons defeat over Brexit. Grieve’s amendment had the effect of limiting ministers’ power to make sweeping changes to the law before parliament has approved the Brexit deal. The victory heartened proponents of a soft Brexit, who hope that over time they can use May’s narrow working majority in the Commons to shift government policy towards a closer ongoing relationship with the EU. Labour leader Jeremy Corbyn described the result as “a humiliating loss of authority for the government on the eve of the European Council meeting”. He added: “Theresa May has resisted democratic accountability. Her refusal to listen means she will now have to accept parliament taking back control.” A government spokesman insisted: “We are as clear as ever that this bill, and the powers within it, are essential. This amendment does not prevent us from preparing our statute book for exit day. We will now determine whether further changes are needed to the Bill to ensure it fulfils its vital purpose.” Brexit secretary David Davis tabled a written statement on Wednesday morning, promising MPs a vote on the final Brexit deal before Britain leaves in March 2019. “The government has committed to hold a vote on the final deal in parliament as soon as possible after the negotiations have concluded. This vote will take the form of a resolution in both houses of parliament and will cover both the withdrawal agreement and the terms for our future relationship,” Davis said.

Brexit: grandstanding -- In theory, MPs could rescue us from a bad deal, but since its effects could not begin to match the consequences of no deal, MPs have awarded themselves the power to turn a crisis into a potential disaster - all in the name of democracy. What happens, for instance, if the European Council and Parliament approve the deal and Westminster says "no"? The fact that we are confronted with this situation is, of course, highly unsatisfactory, but one should note that the essentially flawed Article 50 came with the Lisbon Treaty. This was approved by parliament – after a referendum had been rejected. That makes it parliament's mess (in part) – they need to put up with it, just like the rest of us have to. Much of the angst is, in any event, special pleading. The wording of the Article 50 settlement is only a very small part of the overall withdrawal process, with little lasting effect (barring, of course, Northern Ireland, which could as yet scupper the deal). But if I am right in my assessment, then the transitional arrangements will need a new treaty, as will any trade deal agreed with the EU. And in both instances, parliament will get a vote, if it can be bothered. The UK ratification process makes provision for a vote if parliament demands it. Given the quality of the debates we see in the House, and the average MP's understanding of EU and trade issues, any debate leading to such votes would hardly we worth the time and since most MPs vote on party lines, the outcomes would mostly be pre-ordained. But the point is that parliament does have the power to make a difference. Mostly it doesn't bother. It just makes noise – rather a lot of it. As much as anything then, yesterday's vote represented nothing very much, other than an opportunity for MPs to indulge in yet more grandstanding – which is about the only thing they're any good for. It also reflected the inwards-looking nature of the institution and the chronic parochialism which elevates local interests above far more important events happening elsewhere.

EU leaders agree Brexit talks can move on to phase two - EU leaders have ruled that sufficient progress has been made in the first phase of Brexit talks, allowing negotiations to move on to discussions about Britain’s future outside the bloc. While some questions over the three opening issues that have so far dominated the negotiations still remain, a joint proposal from the UK and the European commission to move the talks on has been accepted. The president of the European council, Donald Tusk, tweeted: “EU leaders agree to move on to the second phase of #Brexit talks. Congratulations PM @theresa_may.” The leaders have also adopted a set of guidelines spelling out their terms for a transition period, and a rough timetable for the next few months. Initially, the second phase of Brexit talks will be dominated by discussions over the transition period, under which the UK will continue to abide by EU law for roughly two years, but not have a role in any decision-making institutions. Theresa May has been given three months to get agreement within the cabinet on the UK government’s vision of a future trade deal, after which substantive talks on the future relationship will begin.   In a joint statement, the leaders of the British Chambers of Commerce, Confederation of British Industry, Federation of Small Businesses, Institute of Directors and the manufacturers’ organisation EEF warned that jobs were at risk unless swift progress was made in the second phase. “It is our collective view that the transition period must now be agreed as soon as possible, to give businesses in every region and nation of the UK time to prepare for the future relationship,” they said. “Further delays to discussions on an EU-UK trade deal could have damaging consequences for business investment and trade, as firms in 2018 review their investment plans and strategies.”

 Brexit is going to get harder, EU leaders warn Theresa May, as new demands enrage Eurosceptics - EU leaders have warned Theresa May that the second phase ofBrexit talks will be harder and “more challenging” than the first, as the spotlight turns to the difficulties Britain’s negotiators will face in the coming months.The EU27’s new red lines, released at the end of the Prime Minister’s most successful Brussels summit since taking office, show that the EU will make a series of demands already on their way to enraging hardline Brexiteers in Ms May’s Cabinet and party.The new European Council guidelines to their negotiators showthere will be no full trade talks between the two sides until next March, and that UK will be made to implement all new EU rules created by the EU27 during the transition period, without any say in drawing them up.  EU negotiators are also preparing to demand that Britain follow EU customs rules while in its two-year transition period, a move that would bar the UK from inking the third-party trade deals beloved of Cabinet ministers like Liam Fox. The demands have already angered Tory Eurosceptic hardliners, who see negotiating trade deals around the world and freedom from Brussels regulations as key red lines in their vision for a post-EU Britain.“The second phase will be more demanding, more challenging than the first phase,” European Council President Donald Tusk told reporters in Brussels at a press conference following EU leaders’ meeting.  German chancellor Angela Merkel echoed his comments. Speaking at a separate joint press conference with French President Emmanuel Macron at the summit, she warned that the UK needed to present more detail before talks could begin in earnest.  “The most difficult phase is ahead of us. Britain has to tell us what they want,” she said.

UK investor confidence is at an all-time low - Business Insider: Investor confidence sank to a record low in 2017, below crisis and wartime levels, as a result of political and economic uncertainty caused by the Brexit vote, according to new research. Hargreaves Lansdown's Investor Confidence Index shows confidence for 2017 was the lowest annual figure on record since the Index began in 1995. Confidence averaged 76 for the year, one point lower than that recorded in 2008 at the height of the financial crisis. Hargreaves Lansdown Overall, the report said, sentiment for 2017 was worse than at any time since 1995, "including the tech crash, the Enron scandal, the second Gulf War, and the financial crisis." "Investor confidence is pretty low, largely because the UK faces a changeable political and economic situation, as a result of Brexit and the 2017 general election, while the financial crisis still casts a long shadow over proceedings," said Laith Khalaf, senior analyst at Hargreaves Lansdown. Confidence this year was lowest in December, dropping to 67 from November's reading of 77. Given 2016's average was also a low of 78, the report said, we are now in a "prolonged period of extremely poor sentiment amongst investors." The result of June's snap election — which led to a "fragile government, and the ongoing prospect of another election being called at the drop of a hat" — dampened confidence further, said the report. While the average reading for 2017 prior to June's election was 83, this has since fallen to 74.  In November, a survey by the Bank of England showed the biggest perceived risk to the UK's financial system was the UK's political system. Weakening confidence was also driven by the fact that "social media has given voice to as many worrying statistics as you'd care to come up with," said the report, as well as the long shadow cast by the financial crisis.

Financial Times Survey: Banks' Brexit Relocations By March 2019 Much Lower Than Feared --In the run-up to the recent agreement on phase I of Brexit, there was mixed news on the extent to which jobs in the City of London would be relocated to other European hubs, primarily Frankfurt. On one hand, we discussed the meeting between US Commerce Secretary, Wilbur Ross, and executives of JPM, Goldman, HSBC and other banks at Wilton’s restaurant during his trip to London in early November. The banks warned that they were close to a “point of no return” on moving jobs. A group of large financial institutions with big London operations, led by Wall Street’s pre-eminent banks, have told the US commerce secretary that Britain’s unstable government and slow progress in Brexit planning may force them to start moving thousands of jobs out of City in the near future. The warnings came on Friday during a closed-door meeting between executives from the banks, which included JPMorgan Chase, Goldman Sachs and HSBC, and Wilbur Ross during the US commerce secretary’s visit to London, according to people briefed on the discussions. A week earlier, we reported the head of Swiss bank, UBS, saying that the possibility that a fifth of its 5,000-strong UK workforce would be shifted was now unlikely to materialise following some “regulatory and political clarification about what we need to do”. We can now, thanks to a survey by the Financial Times, get a better idea of the likely London exodus by March 2019 after the newspaper reviewed public statements by fifteen of the UK’s biggest financial institutions and conducted interviews with more than a dozen executives about Brexit plans. According to the newspaper, the number is…The UK’s biggest international banks are set to move fewer than 4,600 jobs from London in preparation for Brexit — just 6 per cent of their total workforce in the financial centre — according to Financial Times research. The FT analysis contrasts with consultants’ original claims that tens of thousands of jobs could move from London after Brexit — including an EY study this week that claimed 10,500 could leave on “day one”.

Figures show children worst hit by library cuts -  More than 100 branch libraries closed in the last year, according to official figures, with library campaigners warning that the cuts hurt children in big cities such as Birmingham and Sheffield the most. The Chartered Institute of Public Finance and Accountancy’s annual survey of Great Britain’s libraries paints familiar picture: for the seventh year running, the number of branches and paid staff declined. There are now 3,745 branches remaining in England, Scotland and Wales, down by 105 since 2016, while the number of paid staff has declined by 5% compared with a year ago. These falls come alongside a drop of £66m in total spend on council-run libraries, with visits down by 3% year on year, and by 14% over the last five years. The decline, according to the CIPFA figures, is almost across the board: book issues fell by 6.3% in the last year, and by 25.1% in the last five years. Book stock held is also down by 2.6%. “We’re now almost to the point that it’s beyond repair. There’s no stopping it unless something really dramatic happens,” said library campaigner Tim Coates.  According to analysis by Coates, the former Waterstones managing director turned libraries advocate, loans of children’s books in England have dropped by 22% in the last five years, due to “the burden of the collapsing libraries falling on children in big cities”. Across Birmingham, for instance, the decline in children’s book loans increased to 32%. In Newcastle, it is 35%, and in Sheffield 56%. . “Buying children’s books costs so little in the great scheme of council expenditure – you would have thought they would give priority to looking after children, but they don’t.”

Amazon UK Drivers Reportedly Forced To Urinate In Bottles To Hit 200 Packages A Day Quota -- Amazon delivery drivers in the UK are asked to deliver up to 200 packages a day while earning less than minimum wage for agencies contracted by Amazon. The drivers reportedly have to keep schedules so tight they are forced to skip rest breaks and urinate in bottles, according to an investigation by UK's Sunday Mirror. The report comes weeks after the newspaper reported on brutal work conditions at an Amazon UK warehouses. "If the drivers return to the Amazon depot without having made enough attempts to deliver parcels, or if they can’t work for any reason, they risk having their pay cut, being fined or denied future shifts," reports the Mirror.  The allegations surfaced after investigative reporter Dan Warburton spent a day with an Amazon delivery driver so he could experience the "impossible" schedules that often exceed their 11 hour shifts - a limit mandated by UK law. The Sunday Mirror reports: I hopped in a white van to spend a day with one driver and experience first-hand the intolerable pressures they face from “impossible” schedules. Many routinely exceed the legal maximum shift of 11 hours and finish their days dead on their feet. Yet they have so little time for food or toilet stops they snatch hurried meals on the run and urinate into plastic bottles they keep in their vans. They say they often break speed limits to meet targets that take no account of delays such as ice, traffic jams or road closures. Warburton's report comes on the heels of a similar investigation by the BBC in November, which also found Amazon drivers working for Amazon subcontractor 'AHC Services" were forced to work over 11 hours and earned less than minimum wage, while also having to urinate in bottles and defecate in bags.

Gas shortage to push up UK bills after ‘perfect storm’ of energy problems - Households and motorists have been warned to expect sharp rises in gas bills and petrol prices after a “perfect storm” of supply problems as the winter freeze begins.The shutdown of the North Sea’s most important oil and gas pipeline system on Monday was compounded by an explosion at a major processing facility in Austria, which is the main point of entry for Russian gas into Europe.After the incidents, wholesale gas prices hit their highest level for six years, rising by more than 50pc in the space of 24 hours, raising fears that the increase will be passed on to customers.Oil prices have climbed so steeply that motoring organisations are warning of a 3p per litre increase at the pumps by Christmas.MPs have told energy companies that any hike in bills for consumers would be a “disgrace” because wholesale prices are agreed well in advance. Ian Liddell-Grainger, the Conservative MP and member of the parliamentary business and energy select committee, said: “Passing on price rises to the consumer would be totally unfair because it’s not their fault and this is nothing to do with them.“The big energy companies buy their gas and oil about six months in advance, so there should be no need to increase bills. “They should continue to honour their commitments to consumers. If they pass this on to their customers, it would be a disgrace.”