He accurately predicted the trends that have shaped the last decade. Ahead of the collapse of 2008 his Trends Journal newsletter issued a forecast that stock markets, which had just hit all time highs, would buckle in the first quarter of the year and that an unprecedented recession would blanket the global economy. He said the decline in financial markets would then be followed by disillusionment in America’s political and economic systems, leading to the rise of a third-party and widespread protests across America. And while officials the country over tried to assuage fears in the populace, he cautioned that the middle class would continue to be destroyed through taxation, regulation and fiscal incompetence.
His foresight was 20/20.
Now, renowned trend forecaster Gerald Celente warns that, despite establishment claims of recovery and growth, things are about to get a whole lot worse.
Celente isn’t suggesting that a massive collapse is going to happen in the future.
He says we’re already in it – and it’s taking hold right before our eyes across the entirety of the globe:
This selloff in the emerging markets, with their currencies going down and their interest rates going up, it’s going to be disastrous and there are going to be riots everywhere…
…So as the decline in their economies accelerates, you are going to see the civil unrest intensify.
If you want to know a business that will thrive in 2014, it may well beguillotines because these are ‘Off with their heads’ moments.
Meanwhile, they just passed laws in Spain to stop people from protesting. But all the laws in the world do not feed starving people. All the laws in the world do not put roofs over people’s heads.
That’s why you are going to see heads roll.
…you can already see chaos engulfing the world as the Fed’s global financial scheme is collapsing. This collapse is engulfing the entire world, from Russia, to South Africa, into China and emerging markets across the globe.
Should protesters in the U.S. threaten the status quo in any way they will be dealt with like the people who took to the streets in the Ukraine, Egypt, Iran, and Greece.
In fact, a Federal court recently upheld Congressional legislation passed in 2012 that allowed the herding of protestors into so-called “free speech” zones, and to charge those who assemble at “official functions” designated as areas of “national significance” with federal crimes punishable by one year in prison.
Under that verbiage, that means a peaceful protest outside a candidate’s concession speech would be a federal offense…
Carefully controlled protests involving individuals who have been bused in by their respective political party or union leaders are often televised by the mainstream media in an effort to give Americans a false sense of freedom.
When these protests turn to uprising and riots because millions of people can no longer keep a roof over their heads or food in their bellies, you can bet that those involved will be dealt with swiftly and behind the cloak of terrorism secrecy laws like the National Defense Authorization Act which essentially gives the government the right to detain anyone, for any reason, for an indefinite amount of time.
But the real question here is, why would the government need laws like this?
Why would they be war-gaming and simulating economic collapse scenarios and civil unrest?
Why are they continuing to borrow trillions of dollars from foreign creditors and injecting the domestic economy with tens of billions of dollars on a monthly basis?
The only plausible answer, given the current economic climate in America and sentiment on Main Street, is that the authorities at the highest levels of our government know that something very bad could happen.
And they confirmed this in two letters issued by two different Treasury Secretaries over the last several years. Most recently, the Treasury department noted that failure to satiate our nation’s never ending appetite for debt would have a “catastrophic effect” on our economy:
Credit markets could freeze, the value of the dollar could plummet, US interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.
Not only might the economic consequences of default be profound, but those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation…
The fall-out from our current economic climate is going to be unprecedented. For those who deny this is happening, understand that the above warning comes directly from our Treasury Department. They’re the money guys. And they are telling us what’s going to happen.
And be assured it won’t just be stock markets that drop precipitously.
What we’re talking about here is the collapse of the economy of the United States of America – the richest nation on Earth.
The consequences will be devastating on every level and those of us on Main Street will be taking the brunt of the impact.
Imagine a situation where jobs continue to be shed by the hundreds of thousands every month without abatement. A situation where the price of basic essentials like energy and food rise without restraint. A situation where medical care is so expensive that average Americans will go bankrupt trying to pay for government mandated coverage. A situation where whatever money you do have in savings becomes worthless because our currency loses credibility around the world.
This is what’s happening right now.
The scary version: There is no way to turn this around. It’s just going to get progressively worse.
This is the depression.
A few days ago, in the aftermath of Argentina’s shocking devaluation announcement, we showed the one most important chart for the future of that country’s economy: the correlation between the value of the Arg Peso and the amount of Central Bank foreign reserves, both crashing. And as we predicted when we, before anyone else, started our countdown of Argentina’s reserves, once the number hits zero it’s game over for the Latin American country. Or rather, game over again, considering the number of times in the past Argentina has defaulted. Unfortunately over the past week, things for the Central Bank have gone from bad to worse and were capped overnight with the following headline:
- ARGENTINE CENTRAL BANK SAYS RESERVES FELL $170M TO 28.1B TODAY
To summarize: Argentina has now burned through $2 billion in less than two weeks, the fastest outflow since 2006, and a trend which if sustained (and we see no reason why it would change), means it has just over half a year left of reserves projecting a linear decline. However, since the lower the amount of reserves, the faster the withdrawals will come, it is safe to predict that the endgame for Argentina will come far sooner, just as its suddenly crashing bonds seem to have realized.
Which is perhaps why, as Argentina’s La Nacion reports, the country is suddenly, and long overdue, scrambling to raise $10 billion to “counter the flight of capital” from the country.
Alas, it just may be too late.
According to the website, Argentina’s economy minister Axel Kicillof secretly approached international banks, the same one he has been criticizing over the past months, with a simple request: please give me $10 billion. Alas, considering the country’s track record of “honoring” its debt repayment promises, not even promising the required interest rate of +? will do much to generate interest in this particular offer banks can not refuse. Or, rather, can and will.
From La Nacion, Google translated:
Nacion reporters say that the meeting was held in strictest confidence, just in the days before major upheaval in the exchange market. When asked about it, the Economy Ministry spokesman did not confirm nor denied the information, in ABA did not respond to calls from this newspaper.
It is imperative for Argentina to get the dollars that can counter the flight of capital, which in January alone cost the Central Bank (BCRA) U.S. $ 2.499 billion of its reserves. It was the biggest drop since 2006, when the country repaid its entire debt of more than U.S. $ 9 billion to the International Monetary Fund (IMF).
The minister confided bankers requesting leave to look for dollars abroad, either by issuing new debt or through commercial credit lines that banks could get. Some entities, according to sources consulted by the NATION, and would have set to work to organize a tour to Kicillof investment to New York this month.
In other words, Argentina will be meeting Goldman shortly. So, in the aftermath of the Denmark Dong affair, we can probably expect another government “overhaul” in a few months, mediated by everyone’s favorite vampire squid who is about to make Argentina an offer it can’t refuse. Or maybe even Goldman won’t touch this any more:
The order of Kicillof, noted the sources, was debated this week between ABA bankers. Although they pledged to work in private they also recognized that it will be difficult in the current context for Argentina to access fresh funding at a reasonable rate of interest and, especially, in the amounts the Government needs, somewhere around U.S. $ 10,000 million.
It gets worse:
In addition, they assert, although the Government intends to solve their conflicts with the Paris Club and Repsol, the devaluation of 18.6% recorded in January, the highest in the last 12 years,quite complicated negotiations, and that sowed new doubts about the ability to repay debt Argentina.
Yes, well, losing 20% of your investment “gains” overnight due to an arbitrary decision by the government does kinda make one want to invest in said government for a bit to quite a bit. As for the inflationary panic that has already gripped the country, and which we already commented on, well – it’s only just begun.
Still, all of the above is largely expected, and was perfectly predictable by anyone not caught up in overconsumption of hopium pills, or having their head stuck in the sand of denial. The one thing wedid learn is something which will soon make the front pages of all serious media publications around the globe.
After sharp declines in recent weeks, a sovereign dollar bond Bonar 17 yielded 16.2% yesterday…. Several weeks ago Kicillof announced his intentions to return to the debt markets. The National Social Security Administration (Anses) began in early January to sell their bonds in the market Bonar 18 to contain the escalation of the “dollar bag” on one hand, but also to begin to make a curve in the medium term rates.
Curious what the BONAR is? Courtesy of this handy glossary of Argentine financial terms and acronyms, we now know that it is the formal name of an Argentina dollar-denominated bond issued under domestic law. Or, as in the case of Greece, precisely the instrument that will quite soon be crammed down due to non-existent covenant protection for creditors.
In other words, in a worst case for Argentina scenario, watch as hundreds of millions of BONARs suddenly deflate to nothing in a bidless market.
On Tuesday night, January 28, President Obama delivered his State of the Union address. After experiencing the shenanigans over the last five years, nothing said in the speech surprised me. I saw the same defiance and arrogance – the same disregard for the rule of law and the U.S. Constitution – that have characterized the Obama years from day one.
But when I read through the media’s post-game analysis, I could not help but think: What speech were they watching!?
Consider The Hill newspaper, which commended the president for his “genial tone” and for “praising” some of his “long-time foes.” The speech was “less partisan and pointed than many expected,” The Hill reported.
Yes, Obama tossed out a few bones to the Republican leadership. But does this indicate a policy shift toward reason and respect for the rule of law? No, it does not.
And does it really matter if the president uses his polite words when he describes how he is going to continue to completely undermine the U.S. Constitution? Not to most Americans.
As The Hill described: “Obama promised to unleash a torrent of new executive actions.” In the president’s own words [Emphasis added]:
“What I offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class, and build new ladders of opportunity into the middle class. Some require congressional action, and I’m eager to work with all of you.”
“But America does not stand still — and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”
“Let’s make this a year of action. That’s what most Americans want: for all of us in this chamber to focus on their lives, their hopes, their aspirations.”
All this follows President Obama’s thinly veiled threat issued earlier this month prior to a cabinet meeting: “I have a pen and I have a phone,” the president said, noting that he would not wait for Congress to act.
(By the way, that “year of action” sounds like a Marxist revolutionary dog whistle to me.)
Perhaps the best spin on the president’s imperialistic speech came from Politico: “Obama didn’t entirely ignore Congress.” [Emphasis added.]
Oh, well that’s a comfort.
Folks, do you see the emptiness in President Obama’s expressed willingness to “work with Congress?” What kind of negotiation can there be when the president has stated that he will act unilaterally if he doesn’t get his way?
And “genial tone” notwithstanding, we don’t have to pay much attention to what Barack Obama says anymore, except to ascertain threats to the Constitution and the rule of law. After an endless stream of broken promises, he has no credibility left. We simply must look at what Barack Obama has done.
Let’s take just one example: Congress, with the full support of the American people, rebuffed the president’s illegal alien amnesty legislative initiatives. After attempts to “work with Congress” failed, Obama implemented amnesty via executive fiat. Sure, he dressed it up in bureaucratic-speak, “selective deportation,” “deferred action,” etc., but at the end of the day, illegal aliens were allowed to stay in the country despite living here in defiance of the law, some of them dangerous criminals.
Then stealth amnesty became official Obama policy. And now it might just become the law of the land, if press reports about the Republican Party’s plans to cave on the issue are to be believed.
Here’s another example: On January 16 alone, President Obama signed 23 executive orders designed, as Senator Charles Grassley (R-IA), stated to “poke holes in the Second Amendment.” Reuter’s called it the “biggest gun control push in generations.” And Congress had no say in the matter.
This is the “Chicago Way.” And we are about to see it run rampant in Washington over the next three years on every issue under the sun. That’s the message I get from the president’s speech and the president’s “executive actions.”
When it comes to encapsulating the danger Barack Obama and the Chicago Way represents to our country and our way of life, Senator Ted Cruz (R-TX) put it best in an opinion column he penned for The Wall Street Journal: “Of all the troubling aspects of the Obama presidency, none is more dangerous than the president’s persistent pattern of lawlessness, his willingness to disregard the written law and instead enforce his own policies via executive fiat.” (This is a worthwhile read, so take a look if you have the time.)
Let me close with this. The president has called for a “year of action.” So let’s give him what he’s asking for. Let’s not simply complain about the corruption and lawlessness. Let’s take every single action we can to confront the Obama threat to our Constitution. You see, this is what I love so much about the work we do at Judicial Watch. We refuse to serve as spectators to the country’s demise under this president, or any president. We take action. We file lawsuits. We investigate. We publicize the results of our work. In a word, we are relentless.
Will you join us in our pursuit of justice against Obama corruption? Please click here if that’s a yes!
Judicial Watch Challenges Obama Administration’s Attack on Religious Freedom with High Court Brief
The monstrosity that is Obamacare is offensive for too many reasons to count. I’ve detailed many of them in this space. From the mandate to purchase insurance, to the taxpayer dollars used to fund Obamacare propaganda, to the numerous times the president has rewritten his own law in furtherance of his political interests – and in defiance, I might add, of the limits to his power as articulated in the U.S. Constitution.
But among all of these offenses, one that many Americans find most objectionable is the provision of the law that requires employers to provide contraceptive and abortifacient services for women – a provision that is now under consideration by the nation’s High Court. Judicial Watch jumped into the legal fray this week by filing a Supreme Court amicus curiae brief.
Thankfully, the Supreme Court ruled just days ago that a group of Colorado nuns, the Little Sisters of the Poor, could have a temporary reprieve from the contraception mandate while they fight the law in court. But what if you are a for-profit company that also objects to contraception due to religious beliefs? No such luck. This administration thinks business owners aren’t protected by the First Amendment.
And that’s what happened to Hobby Lobby, an arts and crafts chain with 588 stores nationwide as well as an online presence. The beliefs of this company are clear: life begins at conception. And yet, under Obamacare, this company would be forced to provide contraception and abortifacients in violation of these religious beliefs.
This flagrant violation of religious freedom is the reason the company is fighting the law in court, reaching all the way to the Supreme Court. (Fox News reports that there are at least 40 other lawsuits from other companies challenging the law.)
And it’s the reason why we are right there with them.
As JW makes clear in its Supreme Court brief, the Obama administration is in clear violation of the 1993 Religious Freedom Restoration Act (RFRA), which, in accordance with the First Amendment protection of the free exercise of religion, prohibits the federal government from substantially burdening religious exercise without compelling justification.
Terming the Department of Health & Human Service’s (HHS) mandate an “unprecedented grab for power,” the Judicial Watch’s amicusbrief argues:
The challenged regulation … is not simply the consequence of poor political choices; it is the product of a dangerous entanglement of Congress and an Executive agency that ultimately tramples on religious liberties.
In an unprecedented grab for power, the U.S. Department of Health and Human Services (“HHS”) has not only unilaterally authored, enacted, and changed the contraceptive mandate, but it now seeks to redefine a separate act of Congress – the Religious Freedom Restoration Act – to preserve its power grab. This simply cannot stand.
We also argue that the owners of Hobby Lobby and other businesses should not have to choose between “fidelity to [their] faith or the imposition of unimaginable fines.” The brief also reminds the Court of James Madison’s words in the Federalist Papers: “an elective despotism was not the government we fought for.”
JW hopes the Supreme Court upholds the lower court ruling in this case. In June 2013, Hobby Lobby won a victory in the U.S. Court of Appeals for the Tenth Circuit, resulting in the Obama administration petitioning the Supreme Court to review the case. The Supreme Court agreed to review the Hobby Lobby case in November, and is expected to begin hearing oral arguments in March with a ruling by late June.
Here’s a statement I offered to the press in connection with the filing of our brief:
What is at stake in this case is the First Amendment right to religious freedom. It is a pivotal battle in the Obama administration’s War on Religion. This Obama assault, through Obamacare, on the Christian Church is without modern precedent. To force Americans to violate their consciences or lose their livelihoods must be met with strenuous resistance by the Supreme Court. James Madison’s warning against “elective despotism” could not be more apt in describing the crisis caused by this Obama administration anti-Christian policy.
Now as this case works towards ultimate resolution in June, members of Congress are also weighing in with dueling briefs. This week 19 Democratic Senators filed a brief “arguing that ‘secular’ businesses should not be exempt from the mandate,” reports Fox News. (We’ve already countered that argument.)
Some Senate Republicans, meanwhile, have a different view: “The ability to practice the faith we choose is one of our great constitutional rights. The Obama administration’s contraceptive mandate stomps on that right,” Sen. David Vitter said in a statement as he joined Ted Cruz, R-Texas; John Cornyn, R-Texas; and Mike Lee, R-Utah in filing a brief of their own.
Folks, this threat to our God-given liberties is happening because lawless leftists in the Obama administration have seized control of our healthcare, leaving personal health decisions in the hands of Washington politicians and bureaucratic committees.
The Supreme Court should rule by June.
Judicial Watch Fights Cover-Up of “Air Obama” Taxpayer-Funded Vacations
I close this week with more news from Judicial Watch’s investigation of “Air Obama.”
Many Americans have been forced to put their own vacation plans on hold due to a sputtering economy. A recent Harris poll indicated that 34% of Americans have held back on travel because they are worried about the bleak economic outlook.
But the sacrifices of the American people notwithstanding, the First Family seems to have no trouble asking taxpayers to foot the bill for their lavish vacations. I’ve documented some of these trips in previous Weekly Updates, most recently just last week, when I reported that a JW investigation showed that Obama/Biden President’s Day vacations cost taxpayers $295,437.
This week, I report to you that JW has amped up its investigations of “Air Obama,” filing Freedom of Information Act (FOIA) lawsuits against the U.S. Secret Service and the U.S. Department of Defense to obtain records detailing the amount of government funds spent on seven separate lavish trips taken by Barack Obama and the Obama family throughout 2013.
The Secret Service Freedom of Information Act (FOIA) lawsuit, pursuant to a series of FOIA requests from June to August 2013, seeksinformation from the Secret Service about “the use of U.S. Government funds to provide security and other services” to:
- “First Lady Michelle Obama, Malia Obama, Sasha Obama, and any companions on a June 2013 trip to Ireland.”
- “President Barack Obama and any companions on a June – July 2013 trip to Africa.”
- “First Lady Michelle Obama and any companions on a Summer 2012 trip to London, England for the Olympics.”
- “President Barack Obama and any companions on a December 2012 trip to Honolulu, Hawaii.”
- “President Barack Obama and any companions on an August 2013 trip to California.”
- “President Barack Obama and any companions on an August 2013 trip to Martha’s Vineyard, Massachusetts.”
The Secret Service failed to substantively respond to these FOIA requests, and has effectively shut down Judicial Watch’s inquiries about First Family travel.
On January 13, Judicial Watch filed a separate FOIA lawsuit against the U.S. Department of Defense seeking further “records concerningFirst Lady Michelle Obama’s June 2013 trip to Ireland.”
Let’s take these trips one by one to cover what we know so far according to press reports.
- With the Ireland trip, after a brief stop in Belfast, where the President was taking part in a G-8 summit, the First Lady departed on her own, apparently aboard Air Force Two, for her side trip to Dublin. According to WashingtonDossier.com, though the White House claimed the trip was for diplomatic purposes the itinerary showed, “She and her daughters will visit the Trinity College library to explore President Obama’s Irish family roots, attend a performance by the world-famous Riverdance troupe, and visit the Wicklow Mountains national forest.”
- In a June, 2013, article, on Michelle Obama’s trip to Ireland, the Washington Times reported, “The cost of the two-day trip in Ireland and Northern Ireland has been estimated at around $5 million. U.S. taxpayers pay the cost of the first family’s travel.” The Times reported that the First Lady stayed at a $3,300-per-night hotel suite in Dublin and enjoyed a “typical Irish lunch” with U2 frontman Bono.”
- In June, 2013 Fox News reported that the President Obama’s July trip to Africa “with the first family tagging along,” was projected to cost taxpayers an estimated $100 million. According to a confidential planning document obtained by the Washington Post, “Military cargo planes will airlift in 56 support vehicles, including 14 limousines and three trucks loaded with sheets of bulletproof glass to cover the windows of the hotels where the first family will stay. Fighter jets will fly in shifts, giving 24-hour coverage over the president’s airspace, so they can intervene quickly if an errant plane gets too close.”
- According to Examiner.com , on First Lady Michelle Obama’s 2012 trip to the London Olympics, she “was seen taking shopping sprees through London and sporting a $6,800 jacket to a reception, on a trip paid with taxpayer funds.” In January, 2012, Judicial Watch obtained records from the Department of Defense revealing that the Obama’s 2009 trip to Copenhagen, Denmark, in a failed effort to secure the 2016 Olympics for the city of Chicago, cost in excess of $467,175.
- Barack Obama’s vacations to Honolulu, Hawaii, have been estimated by the Hawaii Reporterto cost the taxpayers an annual average of $4 million. But, according to WashingtonDossier.com, the 2012 Hawaii vacation may have cost even more: “This year, Obama returned from Hawaii to complete a deal on the Fiscal Cliff and then jetted back to Honolulu, where he is now engaged in Part 2 of his vacation. The second roundtrip flight added about $3.24 million to the tab this time, bringing the cost of the 2012-1013 vacation to well over $7 million.” The White House has failed to provide exact figures.
- While the total cost of Barack Obama’s August, 2013 trip to California, where he appeared on The Tonight Show, is still being withheld, the Washington Timesreported, “At $180,000 per flight hour to operate the presidential aircraft, the trip cost taxpayers more than $1.8 million just for the flying time to California and back. That doesn’t include two 50-minute flights in California on Marine One, the presidential helicopter; or the cost of lodging dozens of White House staffers and Secret Service agents overnight, or the cost of 20-vehicle motorcades at the various stops.”
- In August, 2013, the Obama family vacationed in Martha’s Vineyard, Massachusetts, where, according to U.S. News & World Report, “At a time when many more cash-strapped Americans are stuck at home instead of vacationing at the beach, President Obama next week will lead an entourage of several dozens to exclusive Martha’s Vineyard island at a cost of millions to taxpayers.”
No wonder these records have been so difficult to come by! These trips are an utter embarrassment for certain, but this is no reason to withhold information from the American people. Quite the contrary. The more shameful the behavior the greater the need for transparency. But that’s not what we’re seeing out of this administration.
The Obama administration is in cover-up mode on the costs of the Obamas’ travel. The Secret Service has, in contemptuous violation of law, simply stopped answering our FOIA inquiries. It seems that our “king” does not want taxpayers to know how much he’s spending on his unnecessary travel.
It’s been this way from the very beginning. JW began investigating these Obama trips dating back to the newly minted First Couple’s “date night” in New York. We’ve had to scratch and claw to get the records. And thanks to the diligence of our investigation and legal teams, we’ve been more successful than anyone else exposing these trip costs.
Click here to see for yourself all that we’ve uncovered.
But now the Obama administration, evidently tired of being called out on the Obamas’ excesses, is trying to shut down our inquiries by violating the Freedom of Information Act.
Now the Obama gang is going to have to answer to the courts.
Until next week…
Posted by Jeff Rubin on January 27th, 2014
Judging by pump prices, Canadian drivers might think oil companies were rolling in profits that only move higher. Lately, though, the big boys in the global oil industry are finding that earning a buck isn’t as easy as it used to be.
Royal Dutch Shell, for instance, just announced that fourth quarter earnings would fall woefully short of expectations. The Anglo-Dutch energy giant warned its quarterly profits will be down 70 percent from a year earlier. Full year earnings, meanwhile, are expected to be a little more than half of what they were the previous year.
The news hasn’t been much cheerier for Shell’s fellow Big Oil stalwarts. Exxon, the world’s largest publicly traded oil company, saw profits fall by more than 50 percent in the second quarter to their lowest level in more than three years. Chevron and Total, likewise, are warning the market to expect lower earnings when fourth quarter results are released.
What makes such poor performance especially disconcerting to investors is that it’s taking place within the context of historically high oil prices. The price of Brent crude has been trading in the triple digit range for three years running, while WTI hasn’t been far off. But even with the aid of high oil prices, the supermajors haven’t offered investors any returns to write home about. Since 2009, the share prices of the world’s top five publicly traded oil and gas companies have posted less than a fifth of the gains of the Dow Jones Industrial Average.
The reason for such stagnant market performance comes down to the cost of both discovering new oil reserves and getting it out of the ground. According to the International Energy Agency’s 2013 World Energy Outlook, global exploration spending has increased by 180 percent since 2000, while global oil supplies have risen by only 14 percent. That’s a pretty low batting average.
Shell’s quest for new reserves has seen it pump billions into money-devouring plays such as its Athabasca Oil Sands Project in northern Alberta and the Kashagan oilfield, a deeply troubled project in Kazakhstan. It’s even tried deep water drilling in the high Arctic. That attempt ended when the stormy waters of the Chukchi Sea crippled its Kulluk drilling platform, forcing the company to pull up stakes.
Investors can’t simply count on ever rising oil prices to justify Shell’s lavish spending on quixotic drilling adventures around the world. Prices are no longer soaring ahead like they were prior to the last recession, when heady global economic growth was pushing energy prices to record highs.
Costs, however, are another matter. As exploration spending spirals higher, investors are seeing more reasons to lighten up on oil stocks. Wherever oil producers go in the world these days, they’re running into costs that are reaching all-time highs. Shell’s costs to find and develop oil fields, for instance, have tripled since 2003. What’s worse, when the company does notch a significant discovery, such as Kashagan, production seems to be delayed, whether due to the tricky nature of the geology, politics, or both.
Shell ramped up capital spending last year by 50 percent to a staggering $44 billion. Oil analysts are basically unanimous now in saying the company needs to rein in spending if it hopes to provide better returns to shareholders.
Big Oil is discovering that blindly chasing production growth through developing ever more costly reserves isn’t contributing to the bottom line. Maybe that’s a message Canada’s oil sands producers need to be listening to as well.
“What will Congress do about it,” asks Dr. Paul of the president’s threat. “Do you think the Republican leadership, the John Boehners of the world will stand up to him?”
Ron Paul explains that his mission is not as a politician, but as an educator. And thanks to Gov. Ventura fo mentioning Dr. Paul’s educational arm, the Ron Paul Institute for Peace and Prosperity!
Watch the whole interview:
State Department Releases Flawed Keystone XL Final Environmental Review In Super Bowl Friday Trash Dump | DeSmogBlog
The State Department has released theFinal Supplemental Environmental Impact Statement (SEIS) for the proposed northern leg of the controversial and long-embattled TransCanada Keystone XL tar sands pipeline.
In a familiar “Friday trash dump” — a move many expected the Obama administration to shun — John Kerry’s State Department chose to “carefully stage-manage the report’s release” on Super Bowl Friday when most Americans are switching focus to football instead of political scandals. **See bottom of this post for breaking analysis**
Anticipating the report’s release, insiders who had been briefed on the review told Bloomberg News the SEIS — not a formal decision by the State Department on the permitting of the pipeline, but rather another step in the department’s information gathering — “will probably disappoint environmental groups and opponents of the Keystone pipeline.”
And, indeed, the new report reads: “Approval or denial of any one crude oil transport project, including the proposed Project, remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States.”
This reiterates one of the earlier draft’s most heavily criticized conclusions that the pipeline is “unlikely to have a substantial impact on the rate of development in the oil sands,” and thus avoids a comprehensive assessment of those climate impacts.
In June 2013, President Obama said in a speech announcing his Climate Action Plan at Georgetown University that he would only approve the permit if it was proven that “this project does not significantly exacerbate the problem of carbon pollution.”
The final environmental review is being released on the heels of damning revelations about the close ties between the Canadian pipeline builder, TransCanada and Environmental Resources Management (ERM). ERM was hired by the State Department to conduct the environmental review.
Friends of the Earth president Erich Pica did not mince words in his reaction to the State Department’s new report, telling the National Journal, “The State Department’s environmental review of the Keystone XL pipeline is a farce. Since the beginning of the assessment, the oil industry has had a direct pipeline into the agency.”
ERM Group: A History Tied to API
Over the past two years, DeSmogBlog has published a number of articles documenting controversial projects — in Peru, the Caspian Sea, Delaware and Alaska — that the ERM Group has approved. In each case the projects have been permitted and have eventually resulted in spills or severe environmental damage.
ERM Group is a dues-paying member of the American Petroleum Institute, which has spent over $22 million lobbying on behalf of Keystone XL.
Timing of the Release
The Final SEIS also precedes a heavily anticipated State Department Inspector General’s report addressing these potential conflicts-of-interest between TransCanada, ERM and the State Department, as has been covered here onDeSmogBlog. It also occurs on a Friday afternoon before the Super Bowl, with attention of much of the American public diverted.
Environmental groups and opponents of the Keystone XL pipeline were surprised by the timing and suddenness of the report’s release. The surprise was not shared by supporters of the pipeline.
For days, industry reps have been claiming that the SEIS would be released this week. The loudest voice was that of Jack Gerard, chief executive of the American Petroleum Institute (API), who speaking to Reuters last week said, “It’s our expectation it will be released next week,” citing sources within the administration.
ERM Group is a dues-paying member of API. Of this clear conflict and the timing of the release, Steve Kretzmann of Oil Change International wrote:
Jack Gerard was apparently briefed by “sources within the Administration” on the timing and content of the report. Before the environmental community. Before Congress. Before anyone else.
If that doesn’t prove once and for all what a corrupt process this has been, I don’t know what will. The oil industry, which has had this process rigged since the word go, are the first to know, because of their cozy and corrupt role in this process.
Green Groups Respond
Jim Murphy of National Wildlife Federation asked this of the decision before the State Department:
The question going into the State Department’s final environmental impact statement is this: Who will State listen to? Will State reverse course after listening to the Environmental Protection Agency experts who criticized the first draft as ‘inadequate‘ and the second draft as ‘insufficient’ on climate impacts, oil spill risks, and threats to water resources? Will it listen to Goldman Sachs, who called Keystone XL key to expanding tar sands production and all the carbon pollution that goes along with it?
What about Canada’s own government or the oil industry, which has repeatedly said Keystone XL is needed to realize tar sands growth plans that Canada projects will cause its own carbon emissions tosoar 38% by 2030? Or will State stand by the oil industry consultants it hired to write that first draft currently being investigated forconflicts of interest?
During the State of the Union, President Obama said he wanted to be able to look into the eyes of his children’s children and say he did everything he could to confront the climate crisis. How exactly does he plan on explaining to his grandchildren how building a 800,000 barrel a day tar sands pipeline like Keystone XL helped solve climate change? The twisted logic in the State Department’s environmental assessment might provide some political cover in DC, but it will be small comfort for future generations who have the bear the impacts of the climate crisis.
Over 76,000 citizens have pledged an oath of civil disobedience if Keystone XL gets the final green-light from President Obama. Though that decision will probably not be made for months.
Green Groups Take Action
In anticipation of the report’s release, a diverse coalition of 16 environmental organizations sent a petition to Secretary of State John Kerry, insisting that the scope of the environmental review is far too narrow and that an entirely new review is necessary.
Citing the National Environmental Policy Act, or NEPA, the groups threaten legal action if the environmental review doesn’t consider the cumulative impact of related projects, like the Keystone XL and the proposed Alberta Clipper expansion.
The groups write:
The National Environmental Policy Act (NEPA) requires that an EIS consider the cumulative impacts of the proposed federal agency action. Cumulative impacts are defined as: “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.”…
The Keystone XL DSEIS fails to address the cumulative effects of Keystone XL and Alberta Clipper, especially the growth-inducing effects that the combined 1.3 million bpd of additional pipeline capacity would have on the rate of tar sands extraction in Canada.
The groups signing the petition include: Sierra Club, Bold Nebraska, Center for Biological Diversity, For Love of Water, Friends of the Earth, Institute for Agriculture and Trade Policy, Labor Network for Sustainability, Michigan Environmental Council, Minnesota Environmental Partnership, Minnesota Public Interest Research Group, Michigan Land Use Institute, National Wildlife Federation, Natural Resources Defense Council, Oil Change International, Rainforest Action Network and 350.org.
“The State Department will open a 30-day comment period on Feb. 5, and the agencies will have 90 days to weigh in,” The Washington Post explained. “After a decision is issued other agencies have 15 days to object, and if one does, the president must decide whether or not to issue the permit.”
DeSmogBlog will continue to feature in-depth analysis of the Keystone FEIS and responses from energy, climate and policy experts.
**UPDATES WILL BE ADDED BELOW AS ANALYSIS ROLLS IN**
BusinessWeek points to this section on the paltry job creation: Once constructed, Keystone XL “will support only 50 U.S. jobs–35 permanent employees and 15 temporary contractors.”
Ben Jervey contributed reporting to this article.
Image credit: Kris Krug.
The frozen opalescent lake and thin, gray sky fade together into white light where the horizon should be. Tall, skeletal grasses shiver on the beach in a wind that makes any sliver of exposed skin burn. The Arni J. Richter, an icebreaking ferry, is about to pull away from Northport Pier for its second and final trip of the day to Washington Island. It’s loaded with food and fuel for the more than 700 hardy residents who call the remote island, just north of Door County peninsula in Wisconsin, home.
People have lived on Washington Island for over 160 years. They’re proud of their tight-knit community and their Icelandic heritage. But life on the island is threatened. For the past 15 years, islanders have watched Lake Michigan slowly disappear. Last January, the lake hit a record low, 29 inches below the long-term average as measured since 1918. The Richter Ferry was just inches away from grounding in some spots along its increasingly treacherous six-mile route to the island.
The Great Lakes, which contain one-fifth of the world’s above-ground fresh water supply, are sometimes referred to as America’s “northern coast.” As communities along the rest of the nation’s shorelines brace for rising waters brought by climate change, however, and spend billions on replacing sand swept out to sea in storms, the communities of the Great Lakes find themselves with more and more sand and less and less water.
“The island depends on the ferry for everything,” said Hoyt Purinton, President and Captain of the Washington Island Ferry Line and great grandson of the ferry’s first captain. “If the ferry can’t get to the island, the island won’t survive. Even if you could find another way to get food and fuel over there, if there’s no easy way for tourists to make the trip, the fragile island economy dies and the community and culture goes with it.”
As the lake retreats, some people blame the Army Corps of Engineers for dredging projects that widen channels leading out of Lake Michigan. Others wonder if the watershed can no longer support the 40 million people in the U.S. and Canada who now rely on the lakes for their drinking water.
Increasingly, scientists believe that climate change is driving the warming waters and setting up a new regime in the Great Lakes that may lead to lower lake levels and a permanently altered shoreline.
Ever since the 1990s, Lake Michigan has been predominantly below its long-term water level average, and trending downwards. Water levels plummeted precipitously in the late 1990s, after a strong El Niño event warmed up the waters.
“That event drastically increased water temperatures,” explained Drew Gronewold, a physical scientist at NOAA’s Great Lakes Environmental Research Laboratory(GLERL). “Over the course of just one year, water temperatures went up by 2.5 degrees Celsius. That’s huge. And the cycle is reinforcing; one really warm year led to more than a decade of dropping lake levels.”
As the lake warms, it’s changing the water levels, as well. Most evaporation on the Great Lakes occurs in the fall when the lake is still warm from the summer, but the air has turned cold and dry. When the water is warmer than usual, the peak evaporation season begins earlier and lasts longer into the early winter. Warmer water also leads to less ice formation and fewer days of ice cover.
Ice cover also impacts lake levels. It prevents evaporation from the lakes during the winter and for as long as it lasts into the spring. And it affects how warm the water will be that year, and thus the rate of evaporation — the more ice cover, the colder the water stays into the summer and fall, leading to less evaporation. The reverse is also true — less ice cover will lead to warmer water and more evaporation.
“The 1998 El Niño gave us a taste of what we can expect to see on the Great Lakes in a changing climate,” said Don Scavia, Co-Director of the Great Lakes Integrated Sciences and Assessments (GLISA). “The El Niño-driven warmer temperatures are a surrogate for what the future climate might be. The lower lake levels during that time may be a signal of what might be happening under longer term climate change.”
In other words, last winter’s record low lake levels are a glimpse of what a warmer climate in the region would do to the lakes — a glimpse that so far has lasted 15 years, set off by one hot summer.
At Newport State Park, one of five state parks in Door County, the vanishing water has changed the shoreline dramatically. The beach, once a wide expanse of silky mustard-colored sand that on a hot summer day would be crawling with a hundred sunscreen-smeared tourists, is now covered in tall reeds, marsh grasses, mud and exposed rocks sheathed in slick green slime. There is no inviting sand, just a marshland down to the water’s edge and the water is clogged with tangled clumps of matted algae like something pulled out of a shower drain.
“I used to constantly get complaints about the appearance of the beach,” said park manager Michelle Hefty. “I’ve been confronted about the grasses encroaching onto the sand and berated about the quantity of insects near the water. It just doesn’t look like that postcard perfect beach anymore.”
Financially, Newport has struggled to keep afloat as tourists seek more manicured picnic spots.
“We’ve had the same budget for the past decade,” said Hefty. “But our costs keep on going up with the increasing price of gas and electricity, while our revenue is shrinking with fewer numbers of visitors.”
Tourism is big business on the Door County peninsula and surrounding islands. According to the Door County Visitors Bureau, tourists pumped $289 million into the local economy in 2012 and supported 2,498 jobs.
State funding only accounts for about 20 percent of the park’s budget; 80 percent of management expenses are supposed to be provided for by park sticker sales and campsite fees.
“We’ve cut back wherever we can,” stressed Hefty. “We don’t plough unless we absolutely have to, we groom the cross-country ski trails less often to save on gas, we turn the thermometer down in the office and pile on the sweaters, but we’re barely breaking even.”
According to Jim Sarkis, founder and principal broker at Sarkis & Associates Realtors, waterfront property values in Door County are also taking a hit — declining by 30 to 35 percent over the last five years.
“Of course, it’s impossible to tease out how much of that decline is because of the lower lake levels and how much of that is just a reflection of the recession and the struggles of the U.S. housing market in general,” said Sarkis, who has been a realtor in Door County for 37 years.
There are some clues, however. Ten years ago, a small private dock would add around $150,000 to the value of a waterfront home. Today, the added value is nothing. That’s because across the county docks which once stood in several feet of water, now appear suspended in the air, legs out of water, sometimes reaching out across nothing but sand and tall grasses.
“The value of those docks was the water around them,” said Sarkis. “Now that that’s gone, they’re really not much more than an elevated bench. If you own a boat, you’ll have to rent a slip in a harbor where they’re dredging.”
Sarkis explained that more and more the phrase “water view” is more appropriate than “waterfront.”
“People can still enjoy the sunsets, even if the water isn’t exactly lapping at their back door,” said Sarkis. “But I have definitely taken clients to properties and had people jokingly say ‘I thought you were showing us a waterfront property’ as they walk the two hundred, maybe four hundred feet down to where the water now sits.”
The winter of 2013-2014 is shaping up to be very different from what the Great Lakes have become accustomed to over the last 15 years. Thanks to the polar air drifting down from Canada, Lake Michigan saw some of its earliest ice in years. Scientists are predicting that if the ice lasts, the lake level could go up by as much as a foot this year. And the colder water could be setting up the lakes for a couple years of recovery.
“The good news is that while in some ways there is a lot of inertia in the Great Lakes system, there is also a lot of interannual variation in the water levels,” said GLISA’s Scavia. “The Great Lakes probably have some time to prepare for the lower lake levels we suspect will come in the future. The key is to use the time, not hope that problem has gone away.”
While this winter’s cold will buy some time for the Great Lakes, scientists emphasize that many concerns and unanswered questions remain. One of the great unknowns in the story of water levels on the Great Lakes is how precipitation patterns will change in the years to come. Some models suggest that precipitation is actually expected to increase, which may help to offset declines caused by increased evaporation.
“The general consensus right now, looking at a broad range of models that have been developed for the Great Lakes, is that there is a big range of variability, but there appears to be a decreasing trend in water levels over the next century,” said Gronewold.
One well-studied aspect of changing precipitation patterns in the Great Lakes is the increasing frequency and severity of spring storms. These powerful downpours, which occur around the same time as farms are being prepared for planting, mean that vast amounts of phosphorus are being washed into the lakes, leading to toxic algae blooms and massive dead zones.
“We’ve seen this mostly on Lake Erie so far,” explained Scavia. “But the problem is starting to be seen in Lake Michigan, as well, and we should expect it to get worse.”
Back at Northport Pier where the Washington Island Ferry loads, a massive dredging project is underway to alleviate some of the stress on the boats and communities that depend on their regular arrival. Work began in September to deepen and widen the half mile channel that leads into Detroit Harbor where the ferry docks on the island. The project will cost about $7 million, $5.2 million of which is being provided by Wisconsin’s Harbor Assistance Program. Washington Island is responsible for the rest of the expenses which will be made up for by removing the dredged sediments.
The project will deepen the channel by three feet to bring it to a total of 17 feet below the low water line, widen the channel by 20 feet and remove 134,500 cubic yards of sediment.
Despite the temporary respite this winter, ferry boat captain Purinton remains concerned about the long-term changes he’s observing on the lake. “I hope people don’t look at the last nine months of cold weather and stop planning for low lake levels,” he said. “That would be a huge mistake. This is the first what I like to call ‘real’ winter that we’ve had in years and years. I think what’s happening now is the anomaly, not the years before.”