climate-change

White House To Republicans: ‘Get The Job Done’

December 19, 2011

With some Republican opposition toward a short-term payroll tax cut extension out in the open, the White House responded on Sunday with its own intentions. In a rare Saturday session, the Senate easily passed a measure that extends the popular middle-class cut. The deal was expected to pass in the House on Monday — until sources said that Republicans are threatening to squelch the two-month resolution. White House Communications Director Dan Pfeiffer released a statement Sunday evening, prodding the GOP to refrain from resorting to politics on this issue. The bipartisan compromise passed in the Senate yesterday received 89 votes, including 39 Republican votes, and Speaker Boehner himself just yesterday called it a “good deal” and a “victory.” The near 90 percent approval by the Senate reflected the view by the overwhelming number of Senate Republicans — as well as Democrats — that the best way to achieve the Presidentâs goal of ensuring that taxes were not increased on 160 million Americans as we enter the New Year was to support this bipartisan compromise. If House Republicans refuse to pass this bipartisan bill to extend the payroll tax cut, there will be a significant tax increase on 160 million hardworking Americans in 13 days that would damage the economy and job growth. After months of opposition, we are glad that Republicans were finally showing a willingness to not raise taxes on middle class families. As the President said yesterday, it is inexcusable to do anything less than extend this tax cut for the entire year, and Congress must work on a one year deal. But they should pass the two month extension now to avoid a devastating tax hike from hitting the middle class in just 13 days. Itâs time House Republicans stop playing politics and get the job done for the American people. Earlier in the day, House Speaker John Boehner (R-Ohio) confirmed that House Republicans oppose the deal passed by the Senate. Boehner appeared on NBC’s “Meet The Press,” making it clear that his GOP cohorts are against any type of short-term solution. “I believe that two months is just kicking the can down the road,” Boehner said. “It’s time to just stop, do our work, resolve the differences and extend this for one year.” The two-percent payroll tax break has been reaped by some 160 million Americans over the last year. Within Saturday’s Senate measure, President Barack Obama and Democrats were willing to concede on the contentious Keystone XL pipeline — agreeing to language requiring the administration to make a decision within 60 days.

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The ‘World’s Worst Ecological Oil Catastrophe’

December 18, 2011

USINSK, Russia (AP) â On the bright yellow tundra outside this oil town near the Arctic Circle, a pitch-black pool of crude stretches toward the horizon. The source: a decommissioned well whose rusty screws ooze with oil, viscous like jam. This is the face of Russia’s oil country, a sprawling, inhospitable zone that experts say represents the world’s worst ecological oil catastrophe. Environmentalists estimate at least 1 percent of Russia’s annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world’s largest oil producer, responsible for 13 percent of global output. Oil, stubbornly seeping through rusty pipelines and old wells, contaminates soil, kills all plants that grow on it and destroys habitats for mammals and birds. Half a million tons every year get into rivers that flow into the Arctic Ocean, the government says, upsetting the delicate environmental balance in those waters. It’s part of a legacy of environmental tragedy that has plagued Russia and the countries of its former Soviet empire for decades, from the nuclear horrors of Chernobyl in Ukraine to lethal chemical waste in the Russian city of Dzerzhinsk and paper mill pollution seeping into Siberia’s Lake Baikal, which holds one-fifth of the world’s supply of fresh water. Oil spills in Russia are less dramatic than disasters in the Gulf of Mexico or the North Sea, more the result of a drip-drip of leaked crude than a sudden explosion. But they’re more numerous than in any other oil-producing nation including insurgency-hit Nigeria, and combined they spill far more than anywhere else in the world, scientists say. “Oil and oil products get spilled literally every day,” said Dr. Grigory Barenboim, senior researcher at the Russian Academy of Sciences’ Institute of Water Problems. No hard figures on the scope of oil spills in Russia are available, but Greenpeace estimates that at least 5 million tons leak every year in a country producing about 500 million tons a year. Dr. Irina Ivshina, of the government-financed Institute of the Environment and Genetics of Microorganisms, supports the 5 million ton estimate, as does the World Wildlife Fund. The figure is derived from two sources: Russian state-funded research that shows 10-15 percent of Russian oil leakage enters rivers; and a 2010 report commissioned by the Natural Resources Ministry that shows nearly 500,000 tons slips into northern Russian rivers every year and flow into the Arctic. The estimate is considered conservative: The Russian Economic Development Ministry in a report last year estimated spills at up to 20 million tons per year. That astonishing number, for which the ministry offered no elaboration, appears to be based partly on the fact most small leaks in Russia go unreported. Under Russian law, leaks of less than 8 tons are classified only as “incidents” and carry no penalties. Russian oil spills also elude detection because most happen in the vast swaths of unpopulated tundra and conifer forestin the north, caused either by ruptured pipes or leakage from decommissioned wells. Weather conditions in most oil provinces are brutal, with temperatures routinely dropping below minus 40 degrees Celsius (minus 40 Fahrenheit) in winter. That makes pipelines brittle and prone to rupture unless they are regularly replaced and their condition monitored. Asked by The Associated Press to comment, the Natural Resources Ministry and the Energy Ministry said they have no data on oil spills and referred to the other ministry for further inquiries. Even counting only the 500,000 tons officially reported to be leaking into northern rivers every year, Russia is by far the worst oil polluter in the world. âNigeria, which produces one-fifth as much oil as Russia, logged 110,000 tons spilled in 2009, much of that due to rebel attacks on pipelines. âThe U.S., the world’s third-largest oil producer, logged 341 pipeline ruptures in 2010 â compared to Russia’s 18,000 â with 17,600 tons of oil leaking as a result, according to the U.S. Department of Transportation. Spills have averaged 14,900 tons a year between 2001 and 2010. âCanada, which produces oil in weather conditions as harsh as Russia’s, does not see anything near Russia’s scale of disaster. Eleven pipeline accidents were reported to Canada’s Transport Safety Board last year, while media reports of leaks, ranging from sizable spills to a tiny leak in a farmer’s backyard, come to a total of 7,700 tons a year. âIn Norway, Russia’s northwestern oil neighbor, spills amounted to some 3,000 tons a year in the past few years, said Hanne Marie Oeren, head of the oil and gas section at Norway’s Climate and Pollution Agency. Now that Russian companies are moving to the Arctic to tap vast but hard-to-get oil and gas riches, scientists voice concerns that Russia’s outdated technologies and shoddy safety record make for a potential environmental calamity there. Gazpromneft, an oil subsidiary of the gas giant Gazprom, is preparing to drill for oil in the Arctic’s Pechora Sea, even as environmentalists complain that the drilling platform is outdated and the company is not ready to deal with potential accidents. Government scientists acknowledge that Russia does not currently have the required technology to develop Arctic fields but say it will be years before the country actually starts drilling. “We must start the work now, do the exploration and develop the technology so that we would be able to … start pumping oil from the Arctic in the middle of this century,” Alexei Kontorovich, chairman of the council on geology, oil and gas fields at the Russian Academy of Sciences, told a recent news conference. The same academy’s Barenboim said, however, that Russian technology is developing too slowly to make it a safe bet for Arctic exploration. “Over the past years, environmental risks have increased more sharply compared to how far our technologies, funds, equipment and skills to deal with them have advanced,” he said. In 1994, the republic of Komi, where Usinsk lies 60 kilometers (40 miles) south of the Arctic Circle, became the scene of Russia’s largest oil spill when an estimated 100,000 tons splashed from an aging pipeline. It killed plants and animals, and polluted up to 40 kilometers (25 miles) of two local rivers, killing thousands of fish. In villages most affected, respiratory diseases rose by some 28 percent in the year following the leak. Seen from a helicopter, the oil production area is dotted with pitch-black ponds. Fresh leaks are easy to find once you step into the tundra north of Usinsk. To spot a leak, find a dying tree. Fir trees with drooping gray, dry branches look as though scorched by a wildfire. They are growing insoil polluted by oil. Usinsk spokeswoman Tatyana Khimichuk said the city administration had no powers to influence oil company operations. “Everything that happens at the oil fields is Lukoil’s responsibility,” she said, referring to Russia’s second largest oil company, which owns a network of pipelines in the region. Komi’s environmental protection officials also blamed oil companies. The local prosecutor’s office said in a report this year that the main problem is “that companies that extract hydrocarbons focus on making profits rather than how to use the resources rationally.” Valery Bratenkov works as a foreman at oil fields outside Usinsk. After hours, he is with a local environmental group. Bratenkov used to point out to his Lukoil bosses that oil spills routinely happen under their noses and asked them to repair the pipelines. “They were offended and said that costs too much money,” he said. Activists like Bratenkov find it hard if not impossible to hold authorities to account in the area since some 90 percent of the local population comprises oil workers and their families who have moved from other regions of Russia, and depend on the industry for their livelihood. Representatives of Lukoil denied claims that they try to conceal spills and leaks, and said that no more than 2.7 tons leaked last year from its production areas in Komi. Ivan Blokov, campaign director at Greenpeace Russia, who studies oil spills, said the situation in Komi is replicated across Russia’s oil-producing regions, which stretch from the Black Sea in the southwest to the Chinese border in Russia’s Far East. “It is happening everywhere,” Blokov said. “It’s typical of any oil field in Russia. The system is old and it is not being replaced in time by any oil company in the country.” What also worries scientists and environmentalists is that oil spills are not confined to abandoned or aging fields. Alarmingly, accidents happen at brand new pipelines, said Barenboim. At least 400 tons leaked from a new pipeline in two separate accidents in Russia’s Far East last year, according to media reports and oil companies. Transneft’s pipeline that brings Russian oil from Eastern Siberia to China was put into operation just months before the two spills happened. The oil industry in Komi has been sapping nature for decades, killing or forcing out reindeer and fish. Locals like the 63-year-old Bratenkov are afraid that when big oil leaves, there will be only poisoned terrain left in its wake. “Fishing, hunting â it’s all gone,” Bratenkov said. ___ Bjoern H. Amland contributed to this report from Oslo, Norway. ___ Nataliya Vasilyeva can be reached at http://twitter.com/natvasilyevaap Environmentalists estimate at least 1 percent of Russia’s annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world’s largest oil producer, responsible for 13 percent of global output. Oil, stubbornly seeping through rusty pipelines and old wells, contaminates soil, kills all plants that grow on it and destroys habitats for mammals and birds. Half a million tons every year get into rivers that flow into the Arctic Ocean, the government says, upsetting the delicate environmental balance in those waters. It’s part of a legacy of environmental tragedy that has plagued Russia and the countries of its former Soviet empire for decades, from the nuclear horrors of Chernobyl in Ukraine to lethal chemical waste in the Russian city of Dzerzhinsk and paper mill pollution seeping into Siberia’s Lake Baikal, which holds one-fifth of the world’s supply of fresh water. Oil spills in Russia are less dramatic than disasters in the Gulf of Mexico or the North Sea, more the result of a drip-drip of leaked crude than a sudden explosion. But they’re more numerous than in any other oil-producing nation including insurgency-hit Nigeria, and combined they spill far more than anywhere else in the world, scientists say. “Oil and oil products get spilled literally every day,” said Dr. Grigory Barenboim, senior researcher at the Russian Academy of Sciences’ Institute of Water Problems. No hard figures on the scope of oil spills in Russia are available, but Greenpeace estimates that at least 5 million tons leak every year in a country producing about 500 million tons a year. Dr. Irina Ivshina, of the government-financed Institute of the Environment and Genetics of Microorganisms, supports the 5 million ton estimate, as does the World Wildlife Fund. The figure is derived from two sources: Russian state-funded research that shows 10-15 percent of Russian oil leakage enters rivers; and a 2010 report commissioned by the Natural Resources Ministry that shows nearly 500,000 tons slips into northern Russian rivers every year and flow into the Arctic. The estimate is considered conservative: The Russian Economic Development Ministry in a report last year estimated spills at up to 20 million tons per year. That astonishing number, for which the ministry offered no elaboration, appears to be based partly on the fact most small leaks in Russia go unreported. Under Russian law, leaks of less than 8 tons are classified only as “incidents” and carry no penalties. Russian oil spills also elude detection because most happen in the vast swaths of unpopulated tundra and conifer forestin the north, caused either by ruptured pipes or leakage from decommissioned wells. Weather conditions in most oil provinces are brutal, with temperatures routinely dropping below minus 40 degrees Celsius (minus 40 Fahrenheit) in winter. That makes pipelines brittle and prone to rupture unless they are regularly replaced and their condition monitored. Asked by The Associated Press to comment, the Natural Resources Ministry and the Energy Ministry said they have no data on oil spills and referred to the other ministry for further inquiries. Even counting only the 500,000 tons officially reported to be leaking into northern rivers every year, Russia is by far the worst oil polluter in the world. _Nigeria, which produces one-fifth as much oil as Russia, logged 110,000 tons spilled in 2009, much of that due to rebel attacks on pipelines. _The U.S., the world’s third-largest oil producer, logged 341 pipeline ruptures in 2010 – compared to Russia’s 18,000 – with 17,600 tons of oil leaking as a result, according to the U.S. Department of Transportation. Spills have averaged 14,900 tons a year between 2001 and 2010. _Canada, which produces oil in weather conditions as harsh as Russia’s, does not see anything near Russia’s scale of disaster. Eleven pipeline accidents were reported to Canada’s Transport Safety Board last year, while media reports of leaks, ranging from sizable spills to a tiny leak in a farmer’s backyard, come to a total of 7,700 tons a year. _In Norway, Russia’s northwestern oil neighbor, spills amounted to some 3,000 tons a year in the past few years, said Hanne Marie Oeren, head of the oil and gas section at Norway’s Climate and Pollution Agency. Now that Russian companies are moving to the Arctic to tap vast but hard-to-get oil and gas riches, scientists voice concerns that Russia’s outdated technologies and shoddy safety record make for a potential environmental calamity there. Gazpromneft, an oil subsidiary of the gas giant Gazprom, is preparing to drill for oil in the Arctic’s Pechora Sea, even as environmentalists complain that the drilling platform is outdated and the company is not ready to deal with potential accidents. Government scientists acknowledge that Russia does not currently have the required technology to develop Arctic fields but say it will be years before the country actually starts drilling. “We must start the work now, do the exploration and develop the technology so that we would be able to … start pumping oil from the Arctic in the middle of this century,” Alexei Kontorovich, chairman of the council on geology, oil and gas fields at the Russian Academy of Sciences, told a recent news conference. The same academy’s Barenboim said, however, that Russian technology is developing too slowly to make it a safe bet for Arctic exploration. “Over the past years, environmental risks have increased more sharply compared to how far our technologies, funds, equipment and skills to deal with them have advanced,” he said. In 1994, the republic of Komi, where Usinsk lies 60 kilometers (40 miles) south of the Arctic Circle, became the scene of Russia’s largest oil spill when an estimated 100,000 tons splashed from an aging pipeline. It killed plants and animals, and polluted up to 40 kilometers (25 miles) of two local rivers, killing thousands of fish. In villages most affected, respiratory diseases rose by some 28 percent in the year following the leak. Seen from a helicopter, the oil production area is dotted with pitch-black ponds. Fresh leaks are easy to find once you step into the tundra north of Usinsk. To spot a leak, find a dying tree. Fir trees with drooping gray, dry branches look as though scorched by a wildfire. They are growing insoil polluted by oil. Usinsk spokeswoman Tatyana Khimichuk said the city administration had no powers to influence oil company operations. “Everything that happens at the oil fields is Lukoil’s responsibility,” she said, referring to Russia’s second largest oil company, which owns a network of pipelines in the region. Komi’s environmental protection officials also blamed oil companies. The local prosecutor’s office said in a report this year that the main problem is “that companies that extract hydrocarbons focus on making profits rather than how to use the resources rationally.” Valery Bratenkov works as a foreman at oil fields outside Usinsk. After hours, he is with a local environmental group. Bratenkov used to point out to his Lukoil bosses that oil spills routinely happen under their noses and asked them to repair the pipelines. “They were offended and said that costs too much money,” he said. Activists like Bratenkov find it hard if not impossible to hold authorities to account in the area since some 90 percent of the local population comprises oil workers and their families who have moved from other regions of Russia, and depend on the industry for their livelihood. Representatives of Lukoil denied claims that they try to conceal spills and leaks, and said that no more than 2.7 tons leaked last year from its production areas in Komi. Ivan Blokov, campaign director at Greenpeace Russia, who studies oil spills, said the situation in Komi is replicated across Russia’s oil-producing regions, which stretch from the Black Sea in the southwest to the Chinese border in Russia’s Far East. “It is happening everywhere,” Blokov said. “It’s typical of any oil field in Russia. The system is old and it is not being replaced in time by any oil company in the country.” What also worries scientists and environmentalists is that oil spills are not confined to abandoned or aging fields. Alarmingly, accidents happen at brand new pipelines, said Barenboim. At least 400 tons leaked from a new pipeline in two separate accidents in Russia’s Far East last year, according to media reports and oil companies. Transneft’s pipeline that brings Russian oil from Eastern Siberia to China was put into operation just months before the two spills happened. The oil industry in Komi has been sapping nature for decades, killing or forcing out reindeer and fish. Locals like the 63-year-old Bratenkov are afraid that when big oil leaves, there will be only poisoned terrain left in its wake. “Fishing, hunting – it’s all gone,” Bratenkov said. ___ Bjoern H. Amland contributed to this report from Oslo, Norway. ___

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Canada: EU Green Fuel Proposal Singles Out Tar Sands

December 16, 2011

* Canada says EU green fuel proposal singles out tar sands * EU tar sands plan threatens Canada’s economic interests * EU vote on fuel quality directive seen this month By Marie Maitre PARIS, Dec 16 (Reuters) – The European Union must not single out Canada’s unconventional oil in a proposed ranking of fuels, said a government representative of Alberta, home to the bulk of Canada’s oil wealth, calling for an equal treatment with other fuels. Cal Dallas, Alberta’s Minister of International relations, told Reuters the EU tar sands proposal could damage the reputation of Canada’s most lucrative export, but he declined to say if Ottawa could take the case to the World Trade Organization. “I remain hopeful that we will be able to come to a reasonable solution,” Dallas said in an interview in Paris as part of a European tour due to take him to the WTO in Geneva, and to Britain, a traditional ally of Canada. Britain, home to oil majors BP and Royal Dutch Shell , has led opposition to the EU proposal to label oil derived from Canada’s huge reserves of tar sands, as highly polluting in a proposed green fuel ranking. “We support the idea of measuring these fuels and the move to a lower-carbon environment but we feel that as it (the EU fuel quality directive or FQD) is currently proposed we are being penalised,” Dallas said. “The data for other fuel sources is not transparent, is not available, and is not being considered in the development of the directive.” The EU ranking assigns tar sands a default greenhouse gas value of 107 grams of carbon per megajoule, informing buyers it has more climate impact than conventional crude with 87.5 grams, EU sources have said. The EU green fuel ranking completes legislation introduced in 2008, when the bloc agreed to reduce the carbon intensity of its transport fuels by 6 percent by 2020. Dallas said Alberta’s oil industry was making headway in improving its environmental track record. Extracting oil from a mix of sand and clay is energy and water intensive. “Any development of this scale does have an impact,” he said, adding: “There are tremendous advances that have been made in terms of water use, in terms of the energy required to extract the resource, and the level of monitoring is rising.” The FQD pauses a “reputational issue” to Canada, home to the world’s third largest oil reserves after Saudi Arabia and Venezuela, Dallas said. Ottawa has lobbied hard to build acceptance of oil derived from tar sands, which it sees as vital to its economic future. But Dallas said investments will continue to pour in on Alberta even if the EU goes ahead with current plans as international majors have already spent billions of dollars to develop production. “Fuel derived from oil sands is going to be an essential component of our immediate future,” Dallas said. “The investment plans that are openly discussed and published contemplate hundreds of billions of dollars of investments in the future. There is a strong set of indicators that global investors will continue to make commitments to develop the oil sand resources.” Dallas also shrugged off any temptation Canada may have to limit foreign companies’ access to its vast oil resources. “I don’t contemplate that there will be any change and one of the reasons why we are seeing this level of investments from around the globe is that we are a very predictable, very secure democracy that has offered a very transparent set of rules for business and investments.” (Reporting by Marie Maitre; editing by Jason Neely)

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Experts Say BP Ignored ‘Numerous Warnings’ Before Gulf Spill

December 14, 2011

WASHINGTON (AP) â BP and the oil industry drilling in the Gulf of Mexico lacked the proper safety attitude to handle the large risks of deep-water drilling, leading to the many bad decisions behind the nation’s worst offshore spill, a panel of expert engineers said Wednesday. Despite better safety practices, the experts worried that the improvements could fade without new steps. They pointed to NASA and how lessons the agency learned after the 1986 Challenger disaster eventually dimmed, leading to the 2003 Columbia disaster. The report’s release coincided with the government’s announcement of the results of the first auction of offshore oil leases off the Gulf of Mexico since the April 2010 spill. They drew $337.7 million in winning bids for 191 tracts in the western Gulf off the coast of Texas. BP had the fourth most successful bids, 11 totaling $27.5 million, far behind ConocoPhillips’ 75 winning bids. The National Academy of Engineering, which advises the federal government, cited errors that combined to make the well platform explode and oil spill, but noted a problem with the safety culture underlying last year’s 172 million gallon spill at BP’s Macondo well in the Gulf of Mexico. “The industrial management involved with drilling the Macondo well had not adequately understood and coped with the system safety challenges presented by offshore drilling operations,” the 136-page report said. “This raises questions about the industry’s overall safety preparedness, the ability to handle the complexities of the deep-water operations, and industry oversight to approve and monitor well plans and operational practices and personnel competency and training.” That’s a problem because the report called drilling in the Gulf’s deep waters “some of the most complex and most risky ventures conducted by commercial enterprises.” Experts said a deficient safety culture led BP to rely on blowout preventers â a 57-foot-tall, 400-ton system of well control devices â as equipment that just couldn’t fail. The trouble is that even before the well blowout, “there were numerous warnings to both industry and regulators about potential failures of existing” blowout preventers, the report said. The report pointed to studies in 2001, 2002, 2004, and a 1999 well blowout and fire off the Louisiana coast. “One needs to understand that they do not work all the time,” said panel chairman Donald Winter, a former Navy secretary and engineering professor at the University of Michigan. BP and all the industry had “a misplaced confidence that the blowout preventer could provide a guarantee if you will, an insurance policy, against a blowout.” Panel member Roger McCarthy, a private engineering consultant who has investigated past oil spills, said blowout preventers are treated like drilling’s circuit-breakers, but there’s no safety group certifying them in the same that Underwriters Laboratories approves key electrical safety devices in homes. Winter said the safety culture issue was apparent in the industry’s attitude toward risks involved in drilling: Instead of acknowledging that there are risks and that industry officials need to make intelligent decisions comparing risk and business decisions, they had an unrealistic attitude that their actions never added risks. Like other studies of the BP spill, the report highlighted several technical failures behind the disaster, with no lone cause. But Winter said the bad decision that was uppermost to him was the decision to abandon the well temporarily, which is normal, even though the cement poured in the well failed important pressure tests. “Once they made the decision to basically disregard the tests,” it set the chain-of-events for all that followed, Winter said. In a statement, BP said it “has acknowledged its role in the accident and has taken concrete steps to further enhance safety and risk management throughout its global operations.” The experts do say drilling safety has improved in the Gulf of Mexico. “We think it is indeed in fact a reasonable process to continue drilling at this point in time,” Winter said at news conference. “But further improvements in safety can in fact be made and should be made.” The independence of the National Academy of Engineering means the report is likely to carry more weight in Congress than some of other investigations. Republican lawmakers have criticized prior reports by a presidential commission saying that the panel was biased. A joint federal investigation also has inherent conflicts of interest because the committee was comprised of those who regulate the offshore drilling industry. Since the disaster, the Obama administration has reorganized the offshore drilling agency and boosted safety regulations. But Congress has yet to pass a single piece of legislation to address safety gaps highlighted by the disaster. House Republicans, meanwhile, have passed bills to jump start offshore drilling. ___ Associated Press writer Dina Cappiello contributed to this report. ___ Online: The National Academy of Engineering report: http://bit.ly/vQK3ai The National Academy of Engineering, which advises the federal government, cited errors that combined to make the well platform explode and oil spill, but noted a problem with the safety culture underlying last year’s 172 million gallon spill at BP’s Macondo well in the Gulf of Mexico. “The industrial management involved with drilling the Macondo well had not adequately understood and coped with the system safety challenges presented by offshore drilling operations,” the 136-page report said. “This raises questions about the industry’s overall safety preparedness, the ability to handle the complexities of the deep-water operations, and industry oversight to approve and monitor well plans and operational practices and personnel competency and training.” That’s a problem because the report called drilling in the Gulf’s deep waters “some of the most complex and most risky ventures conducted by commercial enterprises.” Experts said a deficient safety culture led BP to rely on blowout preventers – a 57-foot-tall, 400-ton system of well control devices – as equipment that just couldn’t fail. The trouble is that even before the April 2010 well blowout, “there were numerous warnings to both industry and regulators about potential failures of existing” blowout preventers, the report said. The report pointed to studies in 2001, 2002, 2004, and a 1999 well blowout and fire off the Louisiana coast. “One needs to understand that they do not work all the time,” said panel chairman Donald Winter, a former Navy secretary and engineering professor at the University of Michigan. BP and all the industry had “a misplaced confidence that the blowout preventer could provide a guarantee if you will, an insurance policy, against a blowout.” Panel member Roger McCarthy, a private engineering consultant who has investigated past oil spills, said blowout preventers are treated like drilling’s circuit-breakers, but there’s no safety group certifying them in the same that Underwriters Laboratories approves key electrical safety devices in homes. Winter said the safety culture issue was apparent in the industry’s attitude toward risks involved in drilling: Instead of acknowledging that there are risks and that industry officials need to make intelligent decisions comparing risk and business decisions, they had an unrealistic attitude that their actions never added risks. Like other studies of the BP spill, the report highlighted several technical failures behind the disaster, with no lone cause. But Winter said the bad decision that was uppermost to him was the decision to abandon the well temporarily, which is normal, even though the cement poured in the well failed important pressure tests. “Once they made the decision to basically disregard the tests,” it set the chain-of-events for all that followed, Winter said. In a statement, BP said it “has acknowledged its role in the accident and has taken concrete steps to further enhance safety and risk management throughout its global operations.” The experts do say drilling safety has improved in the Gulf of Mexico. “We think it is indeed in fact a reasonable process to continue drilling at this point in time,” Winter said at news conference. “But further improvements in safety can in fact be made and should be made.” The independence of the National Academy of Engineering means the report is likely to carry more weight in Congress than some of other investigations. Republican lawmakers have criticized prior reports by a presidential commission saying that the panel was biased. A joint federal investigation also has inherent conflicts of interest because the committee was comprised of those who regulate the offshore drilling industry. Since the disaster, the Obama administration has reorganized the offshore drilling agency and boosted safety regulations. But Congress has yet to pass a single piece of legislation to address safety gaps highlighted by the disaster. House Republicans, meanwhile, have passed bills to jump start offshore drilling. ___ Associated Press writer Dina Cappiello contributed to this report. ___ Online:

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Texas Adopts Rules On Fracking Chemical Disclosure

December 13, 2011

HOUSTON — Texas regulators have adopted rules requiring oil and gas drillers to disclose on a website the chemicals they use in hydraulic fracturing operations. The Texas Railroad Commission adopted rules Tuesday to enforce a law passed by the Legislature earlier this year. Texas has been a pioneer in efforts nationwide to force drillers to be more open about chemical-laced water pumped into the ground to crack dense rock formations to withdraw oil and gas. The process is known as fracking and some environmental groups fear the chemicals could taint water and pollute the air. Texas will require companies to disclose chemicals but not concentrations. Other states, such as Colorado, require disclosure of concentrations.

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Charles Kolb: Santa Clause

December 12, 2011

Steptoe & Johnson LLP is a first-rate national law firm. Some years ago, when I was general counsel at a large national charity, we retained Steptoe to handle a series of complex tax and pension issues that related to the charity’s former management, three members of which went to federal prison for their misdeeds. The members of the firm were outstanding, their advice was sound, and we prevailed in the matter. Last week, a Steptoe & Johnson attorney whom I do not know — but who somehow got my name on a mailing list — sent me a thoughtful electronic holiday message that was to the point: “Season’s Greetings from Steptoe & Johnson”. What caught my attention was the fact that this otherwise cheerful message was followed by two paragraphs of beautifully crafted lawyerlike prose that are known in the legal profession as “boilerplate.” Here’s the first paragraph: “Internal Revenue Service Circular 230 Disclosure: As provided for in Treasury regulations advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purposes of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.” This language prompted me to reread and reassess the holiday message. (After all, even though I no longer bill my time in six-minute increments, I’m a recovering attorney and can’t help myself.) As a strict constructionist, for the most part, I’m pretty sure that the message did not — and was not intended to — constitute advice. The sender was not urging me to take any specific action such as to “Have A Merry Christmas.” Nor was he suggesting how I might enjoy the holiday season. As I construe the text, he was simply tipping his hat in my direction as a friendly acknowledgement of the time of the year. Think “Good morning!” or “Hello!” Besides, on its face, it seemed “intended or written to be” a secular “greeting.” Fortunately, the content did not appear to have anything whatsoever to do with taxes or, heaven forbid, penalties under the Internal Revenue Code. The second paragraph was a bit more complex: “The information contained in this e-mail message is intended only for the use of the individual or entity to which it is addressed. It may contain information that is privileged, confidential, or otherwise protected from disclosure under applicable law. If the reader of this transmission is not the intended recipient or the employee or agent responsible for delivering the transmission to the intended recipient, you are hereby notified that any dissemination, distribution, copying or use of this transmission or its contents is strictly prohibited. If you have received this transmission in error, please notify the e-mail sender at [attorney's name]@steptoe.com. Thank you.” Now I’m beginning to perspire a little around my collar. You see, the text of the Steptoe greeting from which I am preparing this column was actually forwarded to me by one of my work colleagues. The message was intended for him, not for me. But, in my defense, I would note that the information in no way seems “privileged or confidential,” since millions of my fellow Americans will be having similar thoughts and conveying similar sentiments at about the same time. Yet, I must still acknowledge, the message was sent to my colleague and not to me, and I know how a good litigator could make me twist and turn over the futility of such a trivial distinction. (In law school we learned the marvelous phrase “a distinction without a difference.” You feel that the school has earned your tuition dollars when you strut about having mastered that alliterative mouthful.) And yet, I can’t really take such a warning seriously. Since attorneys are known for being extremely cautious and risk averse (that’s why they are better at slicing pies than baking them), I would also expect to have found accompanying warnings about how this message is protected by the work-product and attorney-client privileges. It surely was drafted on firm time and therefore constituted a billable hour for some client — but it might have been pro bono. Who knows? In either event, one can never be too careful in today’s world. That’s what evidence classes in law school are intended to teach you. In the event, however, that the above-referenced distinction might offer an insufficient defense, I intend to show that I actually received the same message from the same Steptoe partner on my own e-mail account — although I seem to have permanently deleted it. This fact suggests to me a mass e-mailing, rather than a personal message. The problem remains, however, that I cannot show that I did not receive the aforementioned message in error. (Before going to law school, I did study philosophy in graduate school, where I learned how difficult it is to prove a counterfactual. I know I did well in graduate school, and I only wish I could recall the grade I got in my evidence class. There might be some relevance here.) The last three years have not been good ones for the legal profession. Hiring is down. Law firms are shrinking, and there is the beginning of a movement — especially among corporate clients — to question the law firm business model. That model in the past assumed that clients would foot the bill as young associates progressed up the learning curve. Today’s clients are becoming more cost-conscious and are demanding pre-negotiated fees for handling specific matters (the equivalent of HMOs in health care versus the fee-for-service model that rewards volume over value and inflates costs). In turn, some firms are now looking to the law schools and asking why the professional training remains wedded to a 19th century model based on analyzing mostly appellate court decisions rather than spending more time on clinical and other programs that prepare future lawyers for what legal practice will be really like. As a society, we are choking on laws and regulations. Philip Howard’s first best-seller (now reissued 17 years later) was The Death of Common Sense: How Law Is Suffocating America , and it made a strong case for reforming a system that is now hurting our country on several levels — in relationships between individual citizens as well as in our overall global competitiveness. I know that this Steptoe & Johnson attorney meant well. At the same time, the reality is that we have become an overly litigious society. Just to be sure — and to cover myself from any future potential liability in having received the holiday message by mistake, and to do as requested by the firm — I intend to reply to this very thoughtful lawyer in a manner which I believe will be both appropriate and effective for all parties concerned: “Many thanks! And the Season’s Best to You!” Charles Kolb is the President of the Committee for Economic Development in Washington, D.C. He served in the first Bush White House from 1990-1992 as Deputy Assistant to the President for Domestic Policy and in the Department of Education as Deputy Undersecretary for Planning, Budget and Evaluation (1988-1990). The views in this article are solely the author’s.

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Speculative Investors Played Larger Role Than Thought In Driving House Bubble

December 12, 2011

LAS VEGAS — A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states. Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an “undocumented” dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it. More than a third of all U.S. home mortgages granted in 2006 went to people who already owned at least one house, according to the report. In Arizona, California, Florida and Nevada, where average home prices more than doubled from 2000 to 2006, investors made up nearly half of all mortgage-backed purchases during the housing bubble. Buyers owning three or more properties represented the fastest-growing segment of homeowners during that time. “This may have allowed the bubble to inflate further, which caused millions of owner-occupants to pay more if they wanted to buy a home for their family,” the researchers noted. Investors defaulted in large numbers after home values began to drop in 2006. They accounted for more than 25 percent of seriously delinquent mortgage balances nationwide, and more than a third in Arizona, California, Florida, and Nevada from 2007 to 2009. As a result, millions of homeowners saw their home values decline so that they were worth less than the original purchase price. Foreclosures skyrocketed as people couldn’t or refused to pay their underwater mortgages. Residential construction also languished, putting hundreds of construction workers in the hardest-hit states out of work. The report concludes that lenders and regulators must limit speculative borrowing to avoid future housing busts. For example, in China, government officials are now requiring higher down-payments and mortgage rates on investment homes, according to the report. In Nevada, which has the nation’s highest foreclosure rate, the housing market remains weak, with home prices continuing to fall in the Las Vegas area, where most of the state lives. Home prices were down 7.3 percent in November compared to a year before, according to the Greater Las Vegas Association of Realtors. That means the median price dropped from $134,900 to $125,000 in one year. More than half of all home sales were purchased with cash. Paul Bell, president of the real estate association, said amateur investors were behind the soaring home values seen during the first half of the last decade, but noted those buyers were simply taking advantage of how easy it was to buy homes at the time because of questionable lending practices and government pressure on banks to promote home ownership. “There was blame to go around for everybody,” Bell said. The market has now shifted so that cash investors are helping Las Vegas recover by buying multiple vacant homes, fixing them up and selling them, Bell said. “If we did not have the serious investors in the market … we would have many neighborhoods in a very run-down condition,” he said.

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PHOTOS: Oakland Longshoremen Sent Home During ‘Occupy The Ports’ Protest

December 12, 2011

By TERRY COLLINS, Associated Press OAKLAND, Calif. (AP) â Most longshoremen at the Port of Oakland were sent home Monday after Wall Street demonstrators blocked entrances as part of a coordinated West Coast port blockade effort. Shipping companies agreed with workers’ concerns that the protests were creating unsafe working conditions and released about 150 out of about 200 workers on the morning shift, said Craig Merrilees, spokesman for the International Longshore and Warehouse Union. Workers in unaffected parts of the port remained on the job. Several hundred people began picketing at the Port of Oakland before dawn and blocked at least two entrances. A long line of big rigs sat outside the gates, unable to drive into the port. Police in riot gear monitored the scene as protesters marched in an oval and carried signs with messages such as “Labor and Occupy Unite,” an invitation to the powerful dockworkers union join their push against corporate greed. No major clashes with police or arrests were reported. Longshoremen arriving for the morning shift at the two affected port terminals did not try to enter due to what union officials said were safety concerns. Some longshoremen said they weren’t willing to cross the demonstrators’ picket lines. Protesters cheered and declared victory when they learned about the partial shutdown, then dispersed. Another march on the port is planned later in the day. Port spokesman Isaac Kos-Read said the facility remains open. “There’s been disruptions throughout the morning shift. We’ve done our best to minimize those disruptions,” Kos-Read said. “We’ve kept the port largely operational.” It’s unclear whether the longshoremen will be paid for the missed work. Union officials say longshoremen were not paid after Occupy Oakland protesters blockaded the port Nov. 2. DeAndre Whitten, 48, an Oakland longshoreman for 12 years, said it was his understanding he would be losing about $500 in pay for the day. But he said he supported the protest effort. “I’m excited. It was way overdue. I hope they keep it up,” Whitten said. “I have no problem with it. But my wife wasn’t happy about it.” Leaders of the ILWU, which represents thousands of longshoremen, spoke out in recent weeks against the coordinated effort by Occupy protesters to blockade ports from Anchorage to San Diego. In Southern California, as many as 400 demonstrators gathered in a park then marched in heavy rain to the Port of Long Beach. Before most dispersed about 9 a.m., they targeted a dock facility leased by SSA Marine, a shipping company partially owned by giant investment firm Goldman Sachs. Beating drums and waving flags, dozens of protesters, gathered outside a fenced area at the port, part of a sprawling complex that spans parts of Los Angeles and Long Beach. Police repeatedly warned that they faced arrest if they crossed the fenced area. Officers later started pushing the protesters further back. They spilled into the street, blocking access to the pier and holding up truck traffic. At least one person was taken into custody. Protesters mostly remained in a parking lot so there were no major disruptions to operations, port spokesman John Pope said. In Ventura County, about 150 protesters picketed outside the entrance to the Port of Hueneme. No arrests were reported. In Oakland, the protests halted truck traffic at least two gates. Truck drivers, union and port officials and Oakland politicians have said the protests will hurt the incomes of people who have little connection to Wall Street. “This is joke. What are they protesting?” Christian Vega, 32, who sat in his truck carrying a load of recycled paper from Pittsburg said Monday morning. He said the delay was costing him $600. “It only hurts me and the other drivers. We have jobs and families to support and feed. Most of them don’t,” Vega said. Oakland Mayor Jean Quan also urged protesters to consider the impact on port workers. “Thousands of people work at the Port of Oakland every day. Thousands more in agriculture and other industries also depend on the Port of Oakland for their daily wages,” Quan said. Oakland protester Alex Schmaus, 26, said he believed the attempted shutdown was for the greater good of workers. “We’re trying to make things better for them,” Schmaus said. In San Diego, a few dozen protesters converged on the port as part of the blockade effort. Police spokesman Gary Hassen says four people were arrested, most for failure to disperse or refusal to comply with police orders but one for an unspecified traffic violation. He says there’s been no violence. ___ Associated Press writers Robert Jablon and Christina Hoag in Los Angeles and Marcus Wohlsen in San Francisco contributed to this story.

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It Gets Better: Creepy Investment Manager Strikes Again

December 11, 2011

Remember Mike? That erratic investment manager who authored that crazy email to Lauren after a horrific first date? Well, it gets better! He’s back with another breakup email installment. Now his venom is against Danielle, a woman he met for “45 seconds” after she advertised a rental space for film shoots on Craigslist five years ago. (Note: Danielle’s name has been changed) Written in the same style as the earlier email that landed on Reddit , Danielle explains in an email to The Luxury Spot how she received repeated phone calls and emails from Mike, until she threatened to contact the police. Below is Mike’s most recent “reconciliation” email sent to Danielle a few months ago forwarded to The Luxury Spot . Perhaps this might be a good time for Mike to check himself into the world’s first stalker clinic that just opened in London last week. —-Forwarded Message—- From: [Mike] Date: Sat, Oct 22, 2011 at 11:51 am Subject: Re: Hi Danielle To: Danielle Hi Danielle, I’m disappointed. In my opinion, we should have met. I think we should meet. We could be friends. Even though you treated me badly in the past, I contacted you in May in the spirit of reconciliation, humanity, and generosity. I think meeting would have been the right thing to do. After all, I explicitly mentioned that I wasn’t asking you out on a date (see my email sent in May below). Why did I ask you if you were in a relationship? I asked that because I’m a curious person by nature. The more information I know, the better. The more information I know about a situation, the more I know what to expect (and not expect) from the situation. If I didn’t ask you in the email, I would have asked in person if we had met. FYI, I suggest that you keep in mind that emails sound more impersonal, harsher, and are easier to misinterpret than in-person or phone communication. After all, people can’t see someone’s body language or tone of voice in an email. I’ve considered the possibility that you might have a boyfriend now. But if I were your boyfriend, I wouldn’t have a problem if you had met with me. After all, it wouldn’t be a date and we wouldn’t be doing anything romantic; it would just be platonic. In fact, I once dated a woman and she went out platonically with her ex-boyfriend on a regular basis and I didn’t have a problem with that. Obviously, I practice my own philosophy. People shouldn’t be possessive. When people are in a relationship, they should trust each other. Your boyfriend should trust you with respect to your going out with other people. I wish you would appreciate how much we had in common. We presumably still have a lot in common. (I’m assuming that your current personality is similar to your personality several years ago.) People don’t grow on trees. I can definitely envision us being friends- great friends actually. In my opinion, if we don’t become friends, it would be a shame and tragic in a micro sense. (An example of something tragic in a macro sense would be an earthquake that kills a lot of people.) Loyalty is a quality that I value a great deal. I wish you were loyal to me. Obviously, if a friendship is a two-way street. If you don’t want to be friends, then it’s your fault. It’s not my fault, I reached out this year. Several years have gone by; enough time has passed since 2006. Before you hung up on me the last time we talked, you said you were “sorry.” Well, this is the opportunity for a reconciliation. After sending this email, there isn’t much more for me to say on the issue of friendship between us. I hope you appreciate that I’m very intelligent and have excellent judgment. (By the way, I certainly don’t think I’m perfect.) I displayed excellent judgment even when I was anxious in 2006. I didn’t over-idealize you; I was right about how much we had in common. In addition, I was correct when I stated that you were mistaken when you said that you were not interested in a relationship. I said that you were too young and that, unless something horrible happened to you (e.g., your getting hit by a truck), you would get into a relationship in the future. That seems to have turned out to be the case. In terms of human interaction, there is a spectrum. On one end of the spectrum, people don’t socialize at all. At the other end of the spectrum, people spend the rest of their lives together. There’s a lot of scenarios in between those extremes. It shouldn’t be an all-or-nothing thing. I understand that it is common for two people to not socialize after a romance doesn’t work out (or after a romance doesn’t materialize). However, just because something is common doesn’t necessarily mean it is optimal. For example, obesity is common in many countries (including the U.S.). However, being obese is not optimal. In my opinion, we should meet and be friends. If you want to meet, then let me know and I can call you and we can make plans to meet. If you don’t want to meet, I would appreciate it if you would email me back to let me know that you have read my email. Best, Mike

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BP Cited For 5 More Alleged Violations Related To Blown-Out Well

December 7, 2011

NEW ORLEANS (AP) – Federal regulators have issued a second set of violations against BP for activities related to the blown-out well that led to the deaths of 11 rig workers and the worst offshore oil spill in U.S. history. The Bureau of Safety and Environmental Enforcement issued five violations Wednesday. The violations claim BP failed to conduct an accurate pressure integrity test and failed to suspend drilling operations “when the safe drilling margin identified in the approved application for permit to drill was not maintained.” Federal regulators in October cited BP PLC for seven violations and contractors Transocean Ltd. and Halliburton for four violations apiece. BSEE director James Watson says the second round of violations is based on “additional regulatory violations by BP.” BP has 60 days to appeal.

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NRC Chairman: Nuclear Industry Must Heed Lesson Of Japan

December 7, 2011

WASHINGTON — The nation’s nuclear safety chief said Tuesday he is worried that U.S. nuclear plant operators have become complacent, just nine months after the nuclear disaster in Japan. Gregory Jaczko, chairman of the Nuclear Regulatory Commission, said recent instances of human error and other problems have endangered workers and threatened safety at a handful of the 65 nuclear power plants in the United States. Workers at nuclear plants in Ohio and Nebraska were exposed to higher than expected radiation levels, Jaczko said, while three other plants were shut down for months because of safety concerns – the first time in more than decade that several plants have been shut down at the same time. The Crystal River nuclear plant in Florida and Fort Calhoun in Nebraska remain shut down, while the earthquake-damaged North Anna plant in Virginia reopened last month after being shut down for three months. Jaczko said he was not ready to declare a decline in safety performance at U.S. plants, but said problems were serious enough to indicate a “precursor” to a performance decline. “We need to make sure that (nuclear) licensees continue to do the right thing for safety. That’s the number one thing going forward,” Jaczko said at a meeting with reporters at NRC headquarters. “There are some things we want to keep an eye on to make sure we are not seeing really true declines in performance.” Jaczko said incidents at Cooper Nuclear Station in Nebraska and Perry Nuclear Power Plant in Ohio “almost led to workers getting very, very significant doses” of radiation. Jaczko blamed the incidents on human error and improper work plans. The incidents show the need to focus on more than plant construction and technical solutions that provide increased protection against earthquakes, floods and fires, Jaczko said. “The softer side of the safety business can have a real impact,” he said, referring to plant operations and worker performance. In response to the disaster at Japan’s Fukushima Dai-ichi plant, the NRC approved a number of steps to improve safety at the nation’s nuclear power plants, which have a total of 104 nuclear reactors. The changes are intended to make the plants better prepared for incidents they were not initially designed to handle, such as prolonged power blackouts or damage to multiple reactors at the same time. “This has been a year driven by events in Japan,” Jaczko said. Even so, the year was remarkable for natural disasters at home. The North Anna plant in Virginia shut down when an Aug. 23 earthquake caused peak ground movement about twice the level for which the plant was designed. Other U.S. reactors were threatened by severe flooding in the Midwest and tornado damage in the Southeast. The NRC has conducted a greater number of special inspections this year – 20 so far – than at any point in recent memory, Jaczko said. The inspections were all prompted by site-specific concerns, but could indicate broader problems, Jaczko said. Tony Pietrangelo, senior vice president of the Nuclear Energy Institute, an industry group, called the past year “challenging,” but said the industry is in broad agreement with the NRC’s response to the Japan crisis. Specifically, he said the industry is ready to adopt most of the commission’s short-term reforms, including one to improve response to prolonged power outages, most likely through additional equipment such as portable pumps, battery chargers, hoses and even bulldozers. “We are committed to addressing lessons learned from Fukushima through expeditious actions in concert with our regulator, but not at the expense of our focus on day-to-day safe and reliable plant operations,” Pietrangelo said. Two plants, Fort Calhoun and the Browns Ferry nuclear plant in Alabama, have been placed at the NRC’s highest level of concern and are subject to additional inspections and public meetings, Jaczko said. Both have had repeated safety problems. Two other plants, the Perry plant in Ohio and Susquehanna in Pennsylvania, are at the next-highest level of scrutiny. Ninety-one of the nation’s 104 nuclear reactors were performing at the highest level and operating with the normal level of inspections. On other issues, Jaczko said staffing limitations caused by a flat budget could delay license renewals for existing nuclear plants. “There are resource limitations,” he said. It “may take us a little bit longer to get through the reviews” for license renewals. Jaczko also said he is “very comfortable” with the steps the agency took to close out its review of the Yucca Mountain nuclear waste dump in Nevada. An inspector general’s report released last June said Jaczko intimidated staff members who disagreed with him and withheld information from members of the commission to gain their support. Several high-ranking employees at the independent agency complained that Jaczko delayed and hindered their work on the Yucca project. Jaczko said the actions he took were consistent with the law. “Sometimes when you have difficult decisions, you have challenging conversations. I think in the end the agency did its job,” he said. Republicans have accused Jaczko, a Democrat and former aide to Senate Majority Leader Harry Reid of Nevada, of political bias in directing the NRC to stop work on its review of Yucca Mountain. Jaczko denies any wrongdoing. ___

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A CNBC Mention, Positive Or Negative, Causes Stock Prices To Rise

December 5, 2011

For most companies, just getting mentioned on CNBC is enough to send stock prices rising — and it doesn’t seem to matter if the news is good or bad. A recent study from a Ph.D. candidate at UC Berkeley shows that a company’s stock price is likely to climb if that company is named on the business network CNBC. And it doesn’t have to be in the context of a compliment: Prices show a tendency to rise even if CNBC is reporting something negative about the company. The findings may strengthen the suspicions of anyone who believes that media coverage has a distorting influence on the market. And they may be cause for exasperation for anyone trying to decode the movements of stock prices — a game that has lately become harder to play , with rampant economic uncertainty leading markets to show as much volatility in 2011 as in any year in recent memory. Reza Shabani, the author of the paper, offers a few different theories for why bad press on CNBC might result in a price bounce for a company’s stock. When a company is mentioned on CNBC, Shabani says, it reminds investors that the company exists. Some investors might decide they want to own stock in that company, and thus buy it, while others might decide they no longer want to own stock in that company, and sell it. The key point, according to Shabani, is that any investor can buy stock in the company, while only those who already own the stock can sell it. Therefore, the net effect tends to be a buy-in for the stock and a rise in share prices. Shabani’s paper isn’t the first time CNBC has been linked with significant market movements. Critics have long accused the network of amplifying and accelerating trends in the market . In 2001, the financial columnist James Surowiecki wrote in The New Yorker that CNBC ” distorts the way the market works and helps turn what should be a diverse, independent-thinking crowd of investors into a herd acting upon a single collective thought .” And years later, Daily Show host Jon Stewart charged CNBC with fostering an atmosphere of irresponsible exuberance that hastened the financial crisis. But CNBC isn’t the only media outlet thought to wield an outsize influence on the markets it covers. Indeed, research suggests that any financial journalist can cause investors to hear the news a certain way through something as simple as her choice of metaphors .

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Loopholes, Corporate Tax Dodging Costing Developing Countries Billions: Report

December 5, 2011

It’s no secret that many multinationals have become particularly adept at exploiting tax loopholes. Nor is it a surprising that the U.S. federal deficit is widening as a result. What’s not as publicized, however, is that developing nations are also feeling the heat. Developing countries have lost hundreds of billions of dollars due multinational corporations’ ability to both legally and illegally avoid taxes, and a lack of adequate monitoring by regulators, according to a recent report from the European Network On Debt and Development. Between 2005 and 2007 in sub-Saharan African countries alone, nearly $27 billion was shifted illegally due to trade mispricing — or when companies manipulate trade access borders for profit — the report found. But multinational corporations are also using legal means to pay less in taxes, including setting up subsidiaries and administrative units in countries with near-zero tax rates and allocating the value of what the company creates to the most favorable region. The report mirrors others indicating that many multinational corporations are getting increasingly skilled at avoiding taxes. Nearly 300 of America’s most profitable corporations paid an average tax rate of 18.5 percent between 2008 and 2010, according to an October study from Citizens for Tax Justice. That’s compared to the actual corporate tax rate of 35 percent, nearly double the rate actually paid. The CTJ report also found that 30 highly-profitable companies paid a negative tax rate between 2008 and 2010, even though they took home a combined $160 billion in pre-tax profits. Some corporations are pushing for more ways to make it easier for them to avoid taxes. Companies such as Apple and Google have hired more than 160 lobbyists to encourage Congress to reinstate a repatriation tax holiday, according to Bloomberg. The tax holiday on offshore profits would save the companies more than $1 trillion if passed. But corporations already take advantage of a variety of tax loopholes. Some use the “active financing exception,” which allows companies to avoid paying taxes on overseas profits if the company got those profits by “actively financing” a deal, according to The New York Times . Companies also commonly take advantage of the “accelerated depreciation” rule , which allows them to write off investments faster than they wear off, according to The Washington Post . The companies then subtract the falling value of the investments from their taxable income.

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China Signals Coming Shift In Measuring CO2 Limits

December 2, 2011

DURBAN, South Africa — An influential Chinese analyst says his country may adjust how it measures carbon emission targets as early as 2020, bringing it more in line with Western governments and signaling a possible opening in international climate negotiations. Xu Huaqing, a senior researcher for China’s Energy Research Institute, was quoted Friday in the semiofficial China Daily as saying Beijing could set absolute caps on its carbon emissions – comments later confirmed privately by one of China’s top climate negotiators on the sidelines of the international climate talks in South Africa. It was the first time China has mentioned a timetable toward a hard emissions cap, the article said, and was seen as a significant move by veteran China watchers. Until now, China has spoken of emissions controls purely in terms of energy intensity, or the amount of energy it uses per unit of economic production. It pledged last year to reduce its energy input by 40 to 45 percent from 2005 levels by 2020. China is the world’s largest emitter of heat-trapping greenhouse gas and a main foil of industrial countries in U.N. negotiations on an accord to control global emissions. Virtually every statement, official or from one of China’s approved think tanks like the energy institute, is parsed and dissected by delegates seeking departures from its public positions. Most other countries have set targets for controlling emissions in absolute terms. The European Union, for example, has committed to slash total emissions by 20 percent from 1990 levels by 2020. The change in emissions limits does not mean that China will begin reducing them immediately. As its economy grows, its emissions will continue to rise, probably into the 2030s, Xu was quoted as saying. Jake Schmidt, of the Natural Resources Defense Council, said Xu is considered a conservative, and his words carry more punch than if they came from one of the more liberal analysts of the think tank. “Sometimes China floats ideas from groups like the ERI,” that carry weight even though they are not official policy, Schmidt said. Su Wei, head of the Chinese delegation at the 192-party talks, confirmed Xu’s comments in a private meeting with nongovernment organizations late Thursday. But Su said the shift would be dependent on the state of China’s development at the time, said Fuquiang Yang, also of the U.S.-based Natural Resources Defense Council who once was a researcher for Xu’s prestigious think tank. Elaborating on Xu’s statement, Su told the nonprofit groups that a shift to absolute caps depended on how far China had moved toward a low-carbon economy, whether it had improved its energy efficiency, and whether it can obtain and deploy new technologies. It also wanted to see efficiency reflected in Chinese consumer behavior, said Fuquiang. In a public meeting Friday, Su said China needed to continue its development. Although it would do its part in fighting climate change, he said, China “needs to have a reasonable consumption of energy … Emissions must grow to meet the needs of the people.” The climate talks began Monday and continue next week with the arrival of higher ranking delegations. The U.N. said it expected 12 heads of state, mostly from Africa, and 136 Cabinet ministers to attend the final four days of talks, which are due to end Dec. 9.

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Newt Denies Global Warming

December 1, 2011

Republican presidential candidate Newt Gingrich on Wednesday said it’s unclear whether man-made global warming is real. “I believe we don’t know,” he told Fox News’ Sean Hannity in a Wednesday night interview. In 2008 Gingrich appeared in an ad with then-House Speaker Nancy Pelosi urging action on climate change. “We do agree that our country must take action to address climate change,” he said, sitting on a sofa with Pelosi in front of the U.S. Capitol. The former House speaker recently said that the ad was “the dumbest thing I’ve done in recent years.” Earlier in his career, Gingrich co-sponsored a 1989 bill stating that climate change was “resulting from human activities.” In the Hannity interview, Gingrich also outlined what he would do within the first hours of being president. “We would have about two hours after the inaugural address, we would stop and sign between 100 and 200 executive orders and presidential findings,” he said. “For example, the very first executive order we’ll sign will terminate all of the White House czars as of that moment. So they’ll all be gone. The goal is, by the time President Obama lands in Chicago, we will have dismantled about 40 percent of his government by signing a whole series of extensive orders. He also predicted an instantaneous economic recovery if President Barack Obama is voted out of office: “The economy starts to recover late on election night, when people realize Obama is gone. Literally that night, you’ll see businesses making hiring decisions. You’ll see investors making investment decisions. You’ll see folks going ahead with new startups who were waiting and with bated breath.”

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Don McNay: Why Occupy Needs to Work With the One-and-a-Half Percenters

November 28, 2011

“You don’t know me but you don’t like me” -Dwight Yoakam and Buck Owens Occupy Wall Street and I share a unique kinship. On the same week that Occupy Wall Street became a worldwide social movement, I released a bestselling book, Wealth without Wall Street: A Main Street Guide to Making Money. I didn’t know about them and they didn’t know about me but we have common goals and points of contention. We are both opposed to how Washington bailed out Wall Street in 2008. We both want to reduce the power of Wall Street in Washington and over our daily lives. My book, Wealth Without Wall Street, advocates the Arianna Huffington concept of Moving Your Money from Wall Street banks to Main Street banks. Occupy Wall Street put rocket fuel behind the Move Your Money movement. I’m hearing from throngs of people who did it. Every time someone from OPW gets pepper-sprayed, has a tea gas canister shot in their head, or gets rousted by police directed by New York ‘s Mayor Michael Bloomberg ( a billionaire dilettante), thousands of others quietly move their money in protest. That “silent majority” inspired by the demonstrators will be people who help make the impact everlasting. Wealth Without Wall Street said that economic protests, like those organized by Gandhi and Martin Luther King, are far more effective than protesting. If Americans set up their lives so that we depend less on Wall Street and Washington, both entities will notice. We will be hitting them in the place where it hurts the most: their wallet. There are several ways to hit Wall Street in the wallet. Moving your money and your investments away from Wall Street is the movement that is picking up steam but cutting up your credit cards, where Wall Street makes of its profits, is another one. My idea of looking to start your own business is going slow but the idea of supporting small business has gotten far more attention since Occupy Wall Street started. A lot of attention has been given to the 99 percenters. That label has been a dilemma for me. I’ve qualified for a financial services honor called the Million Dollar Round Table for twenty-five consecutive years. That means that I’m in the top one percent some years and in the top two percent in other years. In other words, you can call me a one and a half percenter. Although my heart and beliefs are with the people getting pepper-sprayed in the parks, my income is closer to the people who are ordering the police to roust them. As a person sitting on Main Street, I can see how the protesters are having an impact. Bank of America backed off its plan to charge five dollars a month for using debit cards after a protest fueled by OPW knocked it down. I see reference after reference to how OPW is changing the debate in Washington. I need OPW to keep doing what they are doing and know it. OPW may or may not know that they need the “one and a half” percenters when they translate their protests into long-term success. I’ve studied social movements academically and see we are at a turning point. Violent crackdowns, like those are taking place in major cities, can either result in dissipating a movement or angering a nation to take its side. People are angry at Wall Street and that is not going away, no matter how many times Bloomberg and like-minded cronies bash on the people who are peacefully protesting. The anger needed to be channeled into economic action. Where the protests should go next is not against the big banks, it should go against the large institutions placing billions in those banks. When alumni and significant givers protest their alma maters placing money in Wall Street banks, which will make a huge impact. The same will hold true if business pension funds are managed by people not affiliated with pension funds. If voters start throwing out politicians who place taxpayer dollars in Wall Street banks, real change and real reform will be possible. I’m like a lot of “One and a half” percenters. Neither of my parents finished high school and I worked to get a number of advanced degrees. I think Wall Street is putting out average Americans, like the people I grew up with. The financial and political systems are extremely unfair and Wall Street has gotten out of control. I’m glad someone is protesting as it has taken from 2008 to get from anger to marching in the streets. On the hand, Americans are a nations of strivers and achievers. Someone, somewhere, we all want to have access to the American dream and have that legacy for our children. Financial success may be improbable but it should never be labeled as impossible. To propose limits and impeding a rise to the top will never be bought into by those who seek upward mobility. Those sleeping in parks and those who make reasonable high incomes look different, dress different and live in different neighborhoods. The line from the song, “you don’t know me but you don’t like me” holds true and needs to be overcome. Once all sides realize they have common goals and can help each other, those goals will be achieved. Don McNay, CLU, ChFC, MSFS, CSSC is the bestselling author of the book Wealth Without Wall Street: McNay, who lives in Richmond Kentucky, an award-winning financial columnist and Huffington Post Contributor. You can learn more about him at www.donmcnay.com He is the Chairman of the Board for the McNay Settlement Group (www.mcnay.com) which provides structured settlement consulting for injury victims, lottery winners, and the families of special needs children. McNay founded Kentucky Guardianship Administrators LLC, which assists attorneys in as conservators and setting up guardianship’s. It is nationally recognized as an administrator of Qualified Settlement (468b) funds. McNay is a Life and Quarter Century Club member of the Million Dollar Round Table .

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Occupy Philly Deadline Passes

November 28, 2011

PHILADELPHIA — A deadline set by the city for Occupy Philadelphia to leave the site where it has camped for some two months passed without scuffles or arrests as police watched nearly 50 demonstrators lock arms and sit at the entrance of Dilworth Plaza. The scene outside City Hall was far different from encampments in other cities where pepper spray, tear gas and police action resulted in the removal of long-situated demonstrators since the movement against economic disparity and greed began with Occupy Wall Street in Manhattan two months ago. Occupy Philadelphia has managed to avoid aggressive confrontations so far, and on Sunday night there was hope the City of Brotherly Love would continue to be largely violence-free. “Right now, we have a peaceful demonstration,” said Philadelphia Police Chief Inspector Joe Sullivan, nearly 45 minutes after the 5 p.m. deadline. Along the steps leading into the plaza, nearly 50 people sat in lines, their arms linked, refusing to leave. A police presence was heavier than usual but no orders to leave had been issued. The mood was upbeat in the hours before the evening deadline, with groups playing music and singing hymns. A few dozen tents remained scattered on the plaza, along with trash, piles of dirty blankets and numerous signs reading, “You can’t evict an idea.” “We can definitely claim a victory,” said Mike Yaroschuk, who was in the process of dismantling his tent. “We’ve opened a lot of minds, hearts and eyes.” Yaroschuk said he was leaving the plaza not because of the city-issued deadline but because of a request by unions whose workers will be involved in the long-planned construction project there in the coming weeks. He said Occupy’s efforts to draw attention to economic inequality and corporate influence on government were more important than its physical location. “This place is not a key battle for me … This is a marathon, not a sprint,” he said. Elsewhere on the East Coast, eight people were arrested in Maine after protesters in the Occupy Augusta encampment in Capitol Park took down their tents and packed their camping gear after being told to get a permit or move their shelters. Protesters pitched tents Oct. 15 as part of the national movement but said Sunday they shouldn’t have to get a permit to exercise their right to assemble. Occupy leaders said a large teepee loaned by the Penobscot Indians and a big all-weather tent would stay up. The Augusta arrests came when police say people jumped a waist-high, wooden fence on the governor’s mansion lawn and some climbed a portico to the building and unfurled an Occupy banner. As many as 50 protesters, some holding signs and beating a drum, gathered near the Blaine House gates. In Los Angeles, another deadline was getting closer, too, for hundreds of demonstrators to abandon their weeks-old Occupy Los Angeles protest. Although city officials have told protesters they must leave and take their nearly 500 tents with them by 12:01 a.m. Monday, just a handful were seen packing up Sunday. Instead, some passed out fliers containing the city seal and the words: “By order of Mayor Antonio Villaraigosa, this notice terminates your tenancy and requires you to attend the Occupy L.A. Eviction Block Party,” which the fliers’ said was scheduled for 12:01 a.m. Others attended teach-ins on resistance tactics, including how to stay safe should police begin firing rubber bullets or breaking out tear gas canisters and pepper spray. Back in Philadelphia, Steve Venus was fortifying the area around his tent with abandoned wood pallets left over from those who had already packed up. He said the $50 million construction project, including a planned ice skating rink, was not a good enough reason for Occupy Philadelphia to leave the plaza. Venus, 22, said that by enforcing the deadline, the city was essentially telling Occupy supporters “your issues are not important. The only issue that’s important is the ice skating rink.” On Friday, Mayor Michael Nutter expressed support for the movement’s ideals but said protesters must make room for the long-planned project, which they were told of when they set up camp Oct. 6. Nutter was out of town Sunday, but his spokesman reiterated that “people are under orders to move.” “We’re monitoring the situation and we expect people to leave immediately,” spokesman Mark McDonald said. Members of the governing body of Occupy Philadelphia, the general assembly, previously approved a move to a plaza across the street after union officials stressed the hundreds of jobs being created by the Dilworth reconstruction. But that vote mistakenly assumed protesters would be able to pitch tents there. Graffiti, lack of sanitation and fire hazards, including smoking in tents, were among the city’s chief concerns at Dilworth, which had about 350 tents at the height of the movement. The encampment also attracted significant numbers of homeless, although the plaza had long been frequented by that population even before the camp was established. The city did issue a permit to an Occupy Philadelphia faction called Reasonable Solutions that planned to continue demonstrating across the street beginning Monday. However, activities are limited to between 9 a.m. and 7 p.m., and no overnight camping is allowed. ___ Associated Press Writers Andrew Dalton in Los Angeles and Glenn Adams in Augusta, Maine, contributed to this story.

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Robert Kuttner: Europe on the Brink

November 28, 2011

Europe is now on the very edge of an economic abyss. And Germany is finding that it cannot survive as a smug island of fiscally conservative prosperity while the rest of Europe goes down the tubes. It is anybody’s guess whether Europe’s leaders will shift course in time. If they fail, it won’t be pretty. The fact that Germany’s fate is now more closely linked to that of its neighbors actually offers a ray of hope. Until last week, Germany had been the safe haven. As speculators pulled money out of other countries, in a bondholders’ equivalent of a run on the bank, German government debt was oversubscribed, causing interest rates on German bunds (government bonds) to fall below 2 percent. The spread between German rates and the rates that “weaker” countries had to pay to sell their bonds was treated as a precise barometer of market confidence in a given nation’s debt. For the Germans, this was a huge windfall. My friend Sony Kapoor, who directs the progressive think tank Re-Define in Brussels, calculated that Germany’s cheaper borrowing costs due to the panicky bond-market flight from nations like Greece, Italy, Spain, Portugal and Ireland saved the Germans some $26.7 billion in interests costs between 2009 and 2011, and another $20 billion in low-interest bonds already locked in for the future. (It is no accident that the word Schadenfreude — translated as joy at another’s misfortune — is a uniquely German coinage.) But then on Thursday, as Americans were taking a day off for Thanksgiving, the unthinkable happened. Germany had trouble selling its bonds. The bond market, in its panic, was fleeing even the safest haven. Europe is now approaching a Lehman Brothers moment, where nobody trusts anybody else’s promise to repay a debt. Not to be joyful at another’s misfortune — the crisis will keep cycling back to haunt the United States — but the fact that contagion has now reached German shores is more than poetic justice. The European Central Bank, with its concern for fiscal discipline and price stability Ã¼ber alles , operates with a deeply Teutonic soul. It is the tribal successor to the German Bundesbank, the most risk-averse and inflation-phobic of all central banks. This view, however, is no virtue when the greater peril is general panic and deep deflation. In 1873, the British financial journalist Walter Bagehot pointed out that the Bank of England kept the banking system functioning by serving as a lender of last resort in times of crisis. This is what the European Central Bank refuses to do. Or, to be more precise, the ECB, despite its qualms, is now shoveling money at commercial banks but will not support national bond markets. That tells you something about who really runs the show — bankers. This double standard also reflects German policy preferences. Better to teach a lesson to nations in fiscal distress, even if the consequence is to drag down the entire European economy. But now that turkey of a policy has come home to roost. Whatever its other failings, and they are legion, our own Federal Reserve under Ben Bernanke has not been shy about buying the securities of both shaky banks and the U.S. Treasury. Had the Fed failed to do so, our economy would be even further under water. Bernanke’s failing has been in the regulatory side. He is still far too trusting of markets. The European Summit of Oct. 26, with its offer of partial debt relief for Greece and a new pot of borrowed funds for beleaguered European banks, might as well have happened in the 19th century. The crisis has now moved to a whole other phase, where the remedies that looked adequate even a month ago (and were not) are not impressing panicky money markets. Many mainstream critics argue that the European Central Bank should stop dithering and support sovereign bond markets. Others go further and call for a common European fiscal policy and common European sovereign bonds. Still others contend that the Euro was doomed from the start; putting Greece and Italy in the same currency with Germany and the Netherlands was never a good idea, because this denies countries with weak economies of temporary crises the option of devaluing. All of these criticisms have some merit, yet all miss the deeper point. Once we get through the management of the immediate panic — which is not yet assured — we need to treat the deeper disease. This crisis occurred because bankers and shadow bankers (such as the hedge funds that are betting against Europe’s bonds) have too much power . Bankers had too much power when they invented the highly leveraged toxic securities that caused the collapse, and now they have too much power over the fate of entire nations as political leaders seek to clean up the mess that the bankers made. The ability of governments to finance their debts should not be dependent on the caprices of private speculators. Does that sound crazy? It was national policy in the U.S. in the 1940s, when the Federal Reserve pegged the rate on government bonds, and it was international policy in the 1950s and 1960s during the Bretton Woods era — a period of high growth and broadening prosperity. There is no shortage of technical ways out of this crisis. But the political precondition to all of them is to dethrone the rule of the bankers. Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril .

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Shoppers Visit Stores In Record Numbers

November 27, 2011

More Americans hunted for bargains over the weekend than ever before as retailers lured them online and into stores with big discounts and an earlier-than-usual start to the holiday shopping season. A record 226 million shoppers visited stores and websites during the four-day holiday weekend starting on Thanksgiving Day, up from 212 million last year, according to early estimates by The National Retail Federation released on Sunday. Americans spent more, too: The average holiday shopper spent $398.62 over the weekend, up from $365.34 a year ago. Art and Anna Destrada from Port Chester, N. Y., were among the holiday shoppers. They started shopping on Thanksgiving evening at a Walmart store, went to various malls in New Jersey on Friday, and got some deals at Macy’s on Saturday. They spent a total of $2,000 on gifts for themselves and others, including a Wii videogame console, clothing and jewelry. “We’ve saved for Christmas and put away money all year,” says Anna Destrada, 49. “We stayed within our means so we can make a few splurges.” The results for the first holiday shopping weekend show that retailers’ efforts to lure shoppers during the weak economy are working. Some like Wal-Mart Stores Inc. and J.C. Penney have been making a stronger push online to better compete with the likes of rival Amazon.com. And major chains like Macy’s, Target, Best Buy extended the traditional start to the shopping season by opening their doors at midnight on Thanksgiving evening instead of the pre-dawn Friday hours of years past. But the question remains whether retailers’ will be able to hold shoppers’ attention throughout the remainder of the season, which can account for 25 to 40 percent of a merchant’s annual revenue. After all, Americans are still very driven by deep discounting and they’re more conscious of their spending budgets. Overall, holiday spending is expected to grow by a modest 2.8 percent to about $466 billion, according to the NRF. A fuller picture on spending will come Thursday when major retailers report their November sales figures. But for now, experts agree that retailers will likely have to continue to discount to get shoppers to spend. “The big question is: How do you close the season?” says Hana Ben-Shabat, a partner at A. T. Kearney’s retail practice. “This is a very promotional driven shopper.” Indeed, the earlier hours – which meant earlier door-buster deals – on Black Friday seemed to be what drew many shoppers in over the weekend, particularly the younger crowd. According to the National Retail Federation, 24 percent of Black Friday shoppers were at stores at midnight. That’s up from 9.5 percent the year before when only a few stores were open during that time. Of those shopping at midnight on Black Friday, 37 percent were in the 18-to-34 age group. “Black Friday has evolved from an early morning shopping activity to a late night entertainment,” says Ellen Davis, spokeswoman at The National Retail Federation. “A lot of people stayed up until 1 a.m. or 2 a.m. to go shopping, and then went to bed.” The remainder of the day went well, too. Mall of America, the nation’s largest mall, broke its Black Friday record with about 210,000 shoppers. And Taubman Centers, which manages or leases 26 shopping centers in 13 states, says sales were up anywhere from mid- to low double digits on Friday, compared with a year ago. Overall, Black Friday sales were $11.4 billion, up 7 percent, or nearly $1 billion from the same day last year, according to a report by ShopperTrak, which gathers data from 25,000 outlets across the country. It was the largest amount ever spent on that day and the biggest year-over-year increase since 2007. Additionally, customer counts climbed 5.1 percent that day compared with a year ago. Online shopping on Black Friday was especially strong. Research firm comScore reported on Sunday that online spending jumped 26 percent on Black Friday to $816 million, compared with $648 million on the same day a year ago. Some experts worry the strong start will cannibalize sales during the remainder of the season. Indeed, many people who headed to the malls after Black Friday weren’t spending. At the Crabtree Valley Mall in Raleigh, N.C., it was busy on Saturday, but many shoppers did not have bags. Likewise, at Pioneer Place mall in Portland, Ore., on Saturday, a number of shoppers were doing more window-shopping for the best deals than actual buying. David Van Veen, 25, for one, says he was looking for deals on work clothes. But he says he’ll likely wait to get gifts and other holiday items – perhaps when the deals are better – later in the season. “I’ll wait until Dec. 23 to start shopping I think,” he says. ____ Retailer Writers Christina Rexrode in Raleigh, N.C., and Sarah Skidmore in Portland, Ore., contributed to this report.

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Charles Rothstein: American Midwest Deserves Another Look

November 27, 2011

I recently attended a great conference for venture investors and managers where the main topic seemed to be the importance of investing in capital-starved or emerging markets, thereby garnering favorable terms amid low competition for the best deals. Around the room, West Coast managers nodded their heads in agreement… only to return to their Sand Hill Road offices and continue investing in the most competitive venture capital market in the country. And the limited partners in attendance? Many admitted they agreed with the premise of deal-sourcing in emerging markets but in practice keep their money in the traditional coastal players they’ve always backed. So is the idea of investing in capital-poor markets actionable? Many international emerging markets require investors to hedge currency risks, political landmines and the challenges of opening up Western markets once the product or service takes off. Fortunately, there’s a region with many characteristics of an emerging market but that trades in the U.S. dollar and is openly accessible to the world’s largest consumer markets — the United States’ own Midwest. I run a venture capital firm in Michigan, a state that has the resources, heritage and fundamentals to prosper in the new economy but is currently limited by its lack of capital. According to CNBC’s 2011 “America’s Top States for Business” Rankings, Michigan is among the top ten most innovative and technologically advanced states yet ranks a lowly 31st in “access to capital,” a startling disparity compared to other top technology and innovation states: Our Midwest neighbor states are in similar but less drastic predicaments, making the entire region prime for venture investors and limited partners looking for opportunity. On average, Midwest venture-capital investments yield a premium over investments in the top venture markets; Midwest companies are more capital efficient as they do not need as much capital to grow as companies operating in other venture markets: The Midwest has the infrastructure and workforce to compete in new economy sectors, such as clean technology, information technology, life sciences/health care and advanced manufacturing. Now we need venture limited partners and managers to recognize the opportunity. Certainly a few firms are already profiting: the biggest Internet IPOs of the past three months will both be Midwest-based — Angie’s List of Indianapolis and Groupon of Chicago. Will the rest of my friends from the coasts, both limited partners and venture investors, do more than just nod heads at a conference when thinking about the Midwest as an “emerging market” and join us here?

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Brazil Says Chevron Oil Slick Has Shrunk

November 22, 2011

SAO PAULO — Brazil says the size of an oil slick at a well operated by Chevron Corp. off the coast of Rio de Janeiro state is more than 80 percent smaller than it was four days ago. Brazil’s National Petroleum Agency says in a statement posted Tuesday on its website that the oil slick on the water’s surface now covers 0.78 square miles (two square kilometers) compared to the 4.63 square miles (12 square kilometers) registered on Nov. 18. The agency also says the oil slick continues moving away from Brazil’s coastline. Rio de Janeiro state’s Environment Secretary Carlos Minc still warns the oil could reach beaches west of the city of Rio that are popular with tourists. The petroleum agency has said that up to 3,000 barrels of oil have spilled into the Atlantic Ocean. (This version CORRECTS APNewsNow. Corrects location of beaches in paragraph 5. LPA please translate)

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Deborah Frett: What You Need To Know About Gen Y Women & The Workplace

November 22, 2011

The key to recruiting, supporting and retaining Gen Y workers may require unlearning what we “know” about this cohort and relearning the importance of flexibility, equality and inclusivity for business success. Last week, Business and Professional Women’s Foundation (BPW) Foundation released findings from our national survey on Gen Y women’s workplace expectations and experiences. The responses from more than 660 women across the United States identified important challenges related to gender discrimination, work-life balance, and intergenerational workplace dynamics that employers cannot afford to ignore. Here are our top four reality checks on popular literature. 1. Popular Literature Says : Gen Y women do not believe gender discrimination is a problem in today’s workplace. BPW Survey Says : Where do those women live and work? Over 75 percent of Gen Y women in our survey identified gender discrimination as a moderate or severe problem in today’s workplace. And almost 50 percent of Gen Y women had observed or experienced gender discrimination in the workplace. There is a difference between what Gen Y women believe about gender — that equality should be the norm — and how organizations and colleagues practice gender. Gen Y women experience stereotyping, unequal compensation, inequality of opportunities, different standards and sexual harassment. The discrimination and inequalities young working women face are rooted in the ways in which organizations, supervisors and colleagues understand what it means to be a man or a woman. Employers should identify and address the sources of discrimination and inequality in their organizations — perceptions, policies and practices. 2. Popular Literature Says: Employers should design programs to meet Gen Y women’s work-life balance demands. BPW Survey Says: Programming alone won’t address Gen Y women’s demands. They are looking for a holistic approach to work-life balance that will require employers to rethink the “ideal worker.” The ideal worker is often an employee who demonstrates devotion and commitment through time — being available any time and for however long an employer needs. Work is important to Gen Y women but is not the only sphere of life. Gen Y women also identified family, friends, hobbies, exercise and volunteering as important aspects of life. These women are not interested in mistaking their jobs for their life. Tackling work-life issues requires a critical examination of the “ideal worker” and how employers measure and evaluate an employee’s commitment. 3. Popular Literature Says: Identify Gen Y values and then design workplace programs around their values. BPW Survey Says: Good luck with that. Gen Y women hold disparate values. Top career values varied by occupation, type of employer and the presence of children. For example, women in management valued achievement most while women in administrative capacities valued creativity and women in sales/marketing valued compensation most. Our survey results contain two messages for employers. First, it’s really difficult to determine key work values for Gen Y women because values are mediated by social difference (e.g. gender, race, occupation and education). Second, you don’t need to determine values in order to offer the benefits Gen Y women need and create enabling environments for success. Gen Y women’s workplace values did not impact their perspectives on employer benefits. Overall, Gen Y women want their basic needs met. Two of the three most important benefits reported were: healthcare insurance and retirement plans. And, regardless of what Gen Y women expect to achieve through their work, five features enable them to do their best at work: understanding goals and expectations; having open communication channels; receiving encouragement from co-workers and supervisors; having their voice heard and understanding their role and responsibilities. 4. Popular Literature Says: If you want to improve inter-generational workplace dynamics, focus on increasing awareness of generational differences. BPW Foundation Says: Yes, but that’s not all. BPW Foundation asked about generational conflict, but Gen Y women identified age bias as a more pressing workplace issue. Survey results indicate that Gen Y women experience a double jeopardy — gender and age. Gen Y women who had experienced gender discrimination were more likely to report generational conflict or discrimination than those who had not. Fifty-one percent of Gen Y women who observed or experienced gender discrimination also reported generational discrimination. The types of generational or age discrimination reported included being perceived as incompetent or inexperienced because of age; name calling such as “kid” and girl”; being passed over for promotions because of age and being held to different standards because of age. Identifying and addressing age and gender discrimination may be an important strategy for improving inter-generational workplace dynamics. The full report, From Gen Y Women to Employers: What They Want In The Workplace And Why It Matters is available for download at Business and Professional Women’s Foundation.

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Brazil Oil Spill: Official Sees Big Fine In Chevron’s Future

November 21, 2011

SAO PAULO — Brazil is expected to fine Chevron nearly $28 million for an ongoing offshore oil spill, Rio de Janeiro state’s environment secretary said Monday. Carlos Minc said the national government will also ask Chevron to pay for damages caused by the Atlantic spill. “We believe the accident could’ve been avoided. There was an environmental crime,” Minc told Globo TV and other Brazilian media. “They hid information and their emergency team took almost 10 days to start acting.” Chevron Corp. officials have accepted responsibility for the spill but reject accusations they did not notify local authorities quickly enough or properly manage cleanup operations. Minc said he considers the fine lenient, but it’s the maximum allowed under current Brazilian law. The fine has not been officially announced because the government was still waiting for a final report by local investigators. Minc said officials would also analyze imposing further fines on Chevron based on state laws in Rio de Janeiro, and that Brazil’s National Petroleum Agency could even consider banning the company from operating in Brazil for a limited time. “There was negligence,” Minc said. “Rio will not allow any kind of environmental impunity.” He said Chevron, based in San Ramon, California, will be expected to pay about $5.6 million in reparation for the damage to the environment. “We are still calculating the costs,” he said. “Part of that money we want to use to increase the monitoring of our ocean.” Brazilian President Dilma Rousseff was expected to meet with the national environmental minister and its mines and energy minister later Monday to discuss the oil spill and determine the government’s actions. The National Petroleum Agency said more than 110,000 gallons (416,300 liters) of crude oil may have reached the ocean floor since the lead began on Nov 7. George Buck, chief operating officer for Chevron’s Brazilian division, said Sunday the spill occurred because Chevron underestimated the pressure in an underwater reservoir. Chevron was drilling an appraisal well about 230 miles (370 kilometers) off the northeastern coast of Rio de Janeiro when the leak started as crude rushed upward and eventually escape into the surrounding seabed. The oil has leaked through at least seven narrow fissures, all within 160 feet (50 meters) of the well head on the ocean floor. Eighteen boats work on a rotating basis on the slick, with a varying number of vessels working simultaneously, Buck said. The leak is a test for Brazil as huge offshore oil finds have been announced recently, with estimates they could hold at least 50 billion barrels of oil. Brazil has had bigger oil spills. In 2000, crude spewed from a broken pipeline at the Reduc refinery in Rio de Janeiro’s scenic Guanabara Bay, dumping at least 344,400 gallons (1.3 million liters) into the water. Just a few months later, more than 1 million gallons (3.8 million liters) of crude burst from a pipeline operated by state-controlled oil company Petrobras into a river in southern Brazil. Brazil’s worst oil disaster was in 1975, when an oil tanker from Iraq dumped more than 8 million gallons of crude into the bay and caused Rio’s famous beaches to be closed for nearly three weeks. ___

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Chevron Takes The Blame For Brazil Oil Spill

November 20, 2011

SAO PAULO — An ongoing oil spill off the Brazilian coast occurred because Chevron underestimated the pressure in an underwater reservoir, the head of the company’s Brazil operations said Sunday. George Buck, chief operating officer for the Brazilian division of the San Ramon, California-based company, told foreign journalists that Chevron “takes full responsibility for this incident,” and that “any oil on the surface of the ocean is unacceptable to Chevron.” But Buck rejected accusations the company did not notify authorities quickly enough after the leak was detected and that it did not properly manage cleanup operations. Chevron was drilling an appraisal well about 230 miles (370 kilometers) off the northeastern coast of Rio de Janeiro when the leak began Nov. 7. The drilling fluid that is pumped down the center of the drill as it works, lubricating and stabilizing the pressure of the bore hole, was not heavy enough to counter the pressure coming from the oil reservoir, Buck said. That caused crude to rush upward and eventually escape through a breach in the bore hole and leak into the surrounding seabed. The oil then made its way to the ocean floor and has since leaked through at least seven narrow fissures, all within 160 feet (50 meters) of the well head on the ocean floor, Buck said. Brazil’s National Petroleum Agency has said it’s possible more than 110,000 gallons of oil have spilled into the Atlantic Ocean. Buck would not provide an estimate on the total size of the leak, but said the agency figure was “in the ballpark.” He added that the slick currently contains about 756 gallons (2,860 liters) of oil, a figure not confirmed by Brazilian regulators, though they have said it has been significantly reduced since Chevron successfully carried out the first stage of capping the well Thursday. Buck estimated that 420 gallons to 4,200 gallons (1,590 liters to 15,900 liters) a day are still leaking from the seabed cracks. He declined to guess when the leaks would stop, saying it was hard to predict how long it would take the oil that rushed up the bore hole to make its way to the ocean floor, or even how much of it eventually would. The slick has never threatened the coastline or Rio de Janeiro’s world-famous beaches, instead floating toward the southeast, away from land. The leak is one of the first major tests of offshore drilling safety for Brazil since massive offshore oil finds that are estimated to hold at least 50 billion barrels of oil. Brazilian officials are counting on their country being one of the globe’s top oil-producing nations before this decade is out, and politicians are locked in heated battles about how to divide the future royalties. Unlike in the U.S., the offshore drilling has produced little debate over safety within Brazil, where most citizens see the oil as key to the nation’s economic future and its emergence as a global power. The government is even working on a nuclear-powered submarine, which it says it wants to use to patrol and protect the finds. But both the lead Brazilian Federal Police investigator looking into the spill and the environment minister for Rio de Janeiro state have harshly criticized Chevron, saying the company was not prepared to handle the incident. Investigator Fabio Scliar said Chevron had to be told about the leak by Brazil’s state-controlled oil company, Petrobras, which operates a rig in the area where the leak occurred. He also has accused the company of not using proper methods for cleaning up the spill. He says Chevron is putting sand on the slick to make the oil sink to the ocean floor, and that the company is not using enough manpower or boats in the cleanup. Buck, however, said Chevron has not used sand or any chemical agents on the oil slick. Instead, he said, boats are driving through the slick to break it up while others skim the ocean surface to collect oil. Eighteen boats work on a rotating basis on the slick, with a varying number of vessels working simultaneously, Buck said. He said that in the first days after the leak, a storm and ocean swells of 20 feet (6 meters) prevented the boats from safely working. Carlos Minc, the Rio de Janeiro state environment minister, said that Chevron, which is a partner with Petrobras on the well, likely faces fines of at least $5.5 million. “We’re going to show this gang that they can’t come here and create whatever environmental mess they want,” Minc was quoted by the O Globo newspaper as saying in its Sunday edition. “I want to see the CEO of Chevron swim in that oil.” The drilling contractor for the Chevron Corp. well is Transocean Ltd., the owner of the Deepwater Horizon rig that oil company BP PLC was leasing at the time of last year’s Gulf of Mexico oil spill, the largest in U.S. history and one that dwarfs this Brazilian leak. At its peak, BP’s Macondo well was spewing more than 2 million gallons (7.5 million liters) a day. Brazil itself has had bigger oil spills than this one. In 2000, crude spewed from a broken pipeline at the Reduc refinery in Rio de Janeiro’s scenic Guanabara Bay, spewing at least 344,400 gallons (1.3 million liters) into the water. Just a few months later, more than 1 million gallons (3.8 million liters) of crude burst from a pipeline operated by state-controlled oil company Petrobras into a river in southern Brazil. Brazil’s worst oil disaster was in 1975, when an oil tanker from Iraq dumped more than 8 million gallons of crude into the bay and caused Rio’s famous beaches to be closed for nearly three weeks.

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Alison van Diggelen: Solyndra: A Venture Capitalist’s View

November 18, 2011

Yesterday in D.C., Steven Chu defended his department’s handling of the DoE loan guarantee to Solyndra. But here in Silicon Valley, what’s the impact of Solyndra’s failure on the venture capital industry? In this exclusive Fresh Dialogues interview, Andrew Chung , the newest member of the Khosla Ventures investment team, shares his views on the Post Solyndra Era. Will the failure of Solyndra have a significant impact on private sector cleantech investment? How does Chung respond to critics who say that cleantech investment is a disaster? The downside “Downstream, there are other investors who are a bit more skittish about investing in following rounds…” The upside “In the past twelve months, we have three companies that have gone public and generated over $1.1B in profits for the firm. …It’s possible to make money in cleantech and drive a lot of change and drive significant returns.” The future “It’s still relatively early… we are in the second inning of an extra inning game, in the development of this industry.” “(At Khosla Ventures) we continue to be incredibly excited about the cleantech opportunity … we just raised a $1.1B fund, half of it is going to be in cleantech.” Check back soon for more highlights from our interview with Chung: On America’s comparative advantage vis a vis China On what we can learn from China’s cleantech policies On Chung’s motivations for investing in cleantech The interview was recorded at the Cleantech Open in Silicon Valley, November 15, 2011 Read more, see transcripts, photos and check out other exclusive interviews with Tom Friedman, Paul Krugman, Vinod Khosla and many other experts at Fresh Dialogues Archives and join the conversation at the Fresh Dialogues Facebook Page

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Elise Lelon: The Fraud of Authentic Leadership

November 9, 2011

Leaders who describe themselves as “authentic” are like sentences that start with, “To be honest” or “The truth be told.” More often than not, they’re warning signs of lies to come. Whenever big cheeses proclaim “authentic leadership” as their effective guiding principle, chances are they’re not so authentic, and they may not be effective or principled either. Take Herman Cain — pre-sexual harassment accusations. His self-titled book, This is Herman Cain! My Journey to the White House , is an I-am-who-I-am autobiography that begins as straightforward as it gets with: “My name is Herman Cain.” In it, he describes himself as an anti-politician who disdains Washington’s smoke and mirrors. He writes: “I don’t do teleprompters — I like to say I’m a leader not a reader,” and “We need leadership, not more position-ship.” All this unapologetic plain speak from a man who, in his press conference yesterday, did some positioning and re-positioning of his own. Cain addressed the mounting harassment allegations against him by saying, “I have never acted inappropriately with anyone period.” A few minutes later, he went on to contradict his emphatic denial by admitting that there is a possibility he might remember differently in the future, and that he wouldn’t be surprised if more accusations followed. In so doing, Cain showed the same slight of hand that he routinely contests. The self-pronounced “CEO of Self” appears challenged by having to execute on his own leadership promise to be who he really is. These days, it’s in vogue — not just for politicians, but also for business chieftains and organizational executives alike — to hang the authentic banner over their heads during speeches and in the taglines of branding campaigns. To be fair, our culture’s current emphasis on authenticity is, at least in part, an understandable backlash against the betrayal of the Enrons, John Edwards and Madoffs who conned us. As a nation, we’re still smarting from having our good faith profoundly violated. To reassure their employees, customers, shareholders and communities that they are not capable of such duplicity, many leaders give lip service to being transparent. Sure, we want our leaders to tell the truth and behave consistently with the values they espouse. And, yes, it makes more sense to boast about one’s authenticity than deceit, but why make a point of mentioning it at all? The answer to that question lies not only in the shattered collective trust of hard working employees, once loyal voters and all-in-investors-gone-bankrupt. The call to authenticity is also heralded by the full access and full disclosure culture of social media, omnipresent paparazzi and 24/7 news. What we’re left with is a group of leaders who publicly promote themselves as real . Therein lies the rub. Promotion and realness may not be contradictory by definition, but frequently, they are cut from separate cloths. Consider reality television. As viewers, we know that the table-turning brawls and salacious trysts are probably not real. They are “situations” developed by writers who know what sells. And yet, something in us wants to believe that the story lines are true. Producers of these shows bank on our desire to see “real life” unedited and promote their shows as such. But, they are paid for creating and promoting the appearance of reality, not for being real. Self-proclaimed “authentic leaders” are often less dramatic than episodes of The Housewives of Wherever , but beware. They may be directing similar charades. While they come in all shapes and sizes, leaders who make a habit of publicizing their genuineness fall into three categories: The “Beacon of Blind Spots,” the “I’m Gonna Be Me Defense” and the “People-Pleasing Wool-Puller.” Read below to see if any of the following descriptions sound familiar. The “Beacon of Blind Spots” leader is the kind who is not aware how unaware she is. On the one hand, she might be unsure exactly what she stands for. The idea of presenting herself as human, fallible, and figuring-it-out-as-she-goes serves as a comforting CYA blanket to hide behind. On the other hand, the “Beacon of Blind Spots” may clearly articulate what she stands for, but be entirely unaware that she is not the thing or things for which she stands. One example of the “Beacon of Blind Spots” is Lee Raymond, former Chairman and CEO of Exxon Corporation, who once said : “Everyone in this company works for the general good — and I am the general of that general good.” Despite what sounds like socially conscious concern for the well being of the world outside of Exxon, Raymond abandoned his role as “general of the general good” because of two critical blind spots: human rights and global warming. As a result, although he drove profits up, many non-shareholders saw him as the general of more harm than good. For example, Forbes said that Raymond made “deals with regimes that lean(ed) toward the diabolical.” Under his leadership, human rights activists charged Exxon Mobil with supporting repressive regimes in Indonesia. In addition, Raymond dismissed global warming as a non-issue — a shortsighted position that had destructive impact on both his company and the environment. The “I’m Gonna Be Me Defense” (sometimes referred to — even in the most bipartisan of circles — as “The Sarah Palin”) plays the down-home, love me with my warts, hunting riffles, and all card. Here’s the problem with this kind of “authentic leader”: one can be both authentic and inept at the same time. It’s just authentically bad leadership. This type of leader tends to have some boundary issues — for example, over-sharing at organizational pep rallies or with family snapshots on company websites (or on television programs, as the case may be). While the show-and-tell nature of these leaders may border on inappropriate, the bigger hazard is when the overly personal exposure is actually a cover-up for professional incompetence. For these leaders and their followers, letting it all hang out usually leads to letting a lot of hopeful constituents down. On the cover of a biography about his career called Chainsaw , former CEO of Sunbeam Corporation, Al Dunlap, poses with a gun in each hand, two leather, cartridge belts crisscrossing his chest with bullets running end to end, and a black bandana wrapped around his head. A classic example of the “I’m Gonna Be Me Defense,” Al Dunlap was brought into Sunbeam because of his image as a tough but effective turnaround guy. In his own book, Mean Business: How I Save Bad Companies and Make Good Companies Great , Dunlap promotes this badass image with pride. Dunlap writes: “You’re not in business to be liked. Neither am I. We’re here to succeed. If you want a friend, get a dog.” Ironically, by the end of his tenure, Dunlap needed more than a dog to dig him out of his own mess. Boldly being his “Rambo in Pinstripes” self by laying off 6000 Sunbeam employees (50% of the workforce), and closing down dozens of warehouses, factories and offices, Dunlap ended up not succeeding after all. Soon following his own turnaround victory announcement, it was determined that Dunlap had questionable financial management practices. Under his very “authentic” leadership, Sunbeam ended up $2 B in debt, with a $200 M shortfall and the threat of $1.7 B in bank loans being called the quarter before Dunlap was fired. And last but not least insidious, there is the “People-Pleasing Wool-Puller”. A charismatic communicator, this leader is a master of all things interpersonal. The good news is that they tend to be intelligent, shrewd negotiators and goal-driven catalysts. The bad news is that they’re also manipulative and often narcissistic. While they might frame their authenticity as being of service to you , the bottom line is that, like everything else in their lives, the authenticity gig actually serves them . (The two are not mutually exclusive, except when push comes to shove and the leader has to choose between two sets of interests.) Unlike the “Beacon of Blind Spots,” this leader has x-ray vision. He is acutely aware of what you want to hear and is brilliant at telling it to you. So brilliant, in fact, that you don’t realize how every feel-good conversation leaves you impressed by his magnificence, rather than your own. The “People-Pleasing Wool-Puller” is generous with favors, the ultimate Trojan Horse. But, hidden inside the belly of those good deeds are self-serving motives. This leader intentionally uses his guiles to make you feel at ease, telling you implicitly or explicitly, “What you see is what you get.” But, make no mistake. What you see has very little to do with what you get. In the end, it’s all about what you don’t see and what he gets that counts. Among the long list of “Wool Pullers” in our recent memory are: Dennis Kozlowski, former CEO of Tyco International, who will forever be infamous for throwing a people pleasing $2 M birthday party in the Mediterranean for his wife; the formidable, finger-pointing, “I did not have sexual relations with that woman”-denying, Bill Clinton; Former Enron CFO, Andrew Fastow, and CEO, Kenneth Lay; and of course, Bernie Madoff, who spent years pleasing his investors with unreasonably good returns and arguing that, in today’s regulatory environment, it is “virtually impossible for a violation to go undetected” — all the while masterminding a $65 B Ponzi scheme that cheated not only SEC rules but his investors’ life savings. Truly authentic leaders show their stripes through their actions, not by practicing down-to-earth intonations with voice coaches or doing Tyra Banks-style “Smeyes” in front of mirrors. Highly intelligent people tend not to wear their IQ scores on their foreheads, and seriously wealthy people generally don’t speak much about money. So wouldn’t it follow that leaders who are being real are busy just being, instead of selling themselves as such? To be honest, authenticity isn’t a bad word. But, whether you’re a titan of industry, a guy running for office, or just an everyday Joe, it’s probably best to use the term “authentic” in reference to something other than yourself.

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Coast Guard Approves Plan To End BP Oil Spill Cleanup

November 9, 2011

NEW ORLEANS — BP will no longer be responsible for cleaning up oil that winds up on shores of the Gulf Coast unless officials can prove it comes from the company’s well that blew out in 2010, causing the worst offshore spill in U.S. history, according to a plan approved by the Coast Guard and obtained by The Associated Press on Tuesday. The plan marks the near end of the cleanup phase of the oil spill, according to the Nov. 2 agreement. Now, BP will turn its attention to restoring areas damaged by the spill that began on April 20, 2010, when the Deepwater Horizon drilling rig exploded, killing 11 workers. About $1 billion has been set aside for those projects, an official says. About 90 percent of the Gulf coast has been deemed clean, according to officials. The plan spells out protocol for when an area still needs to be cleaned and when BP’s responsibility for that ends. Louisiana officials wouldn’t give their approval because they were concerned about what they perceived as a lack of long-term monitoring in the document. They also complained that the Coast Guard gave them only five days to review the plan, according to a letter sent to the agency by Garret Graves, a top aide to Gov. Bobby Jindal for coastal affairs. That concern was echoed by Ralph Portier, an oil spill cleanup expert with Louisiana State University. “If we have learned anything from Valdez and Ixtoc, there needs to be an awareness for long-term monitoring,” Portier said. He was referring to the Exxon-Valdez tanker spill in 1989 in Alaska and the 1979 Ixtoc oil rig spill in the Gulf of Mexico. He said the Coast Guard should have a plan to respond to problems that may arise. Despite the concerns, the Coast Guard said its finalized plan would apply to Louisiana and all the Gulf states. New oil that shows up on clean shores would be treated “as any kind of oil response,” said Coast Guard spokeswoman Lt. Suzanne Kerver. Officials would try to determine where it came from. If a link to BP’s now-plugged Macondo well was found, then the Coast Guard would ask the oil giant to clean it up. Kerver says the shoreline plan outlines “the standard for clean.” BP can now start work on restoring areas damaged by the spill. Restoration plans could entail plantings, placing new sand on beaches and establishing new marsh. “This is an important milestone in the recovery process for the Gulf Coast,” said Mike Utsler, head of BP’s Gulf Coast Restoration Organization. Utsler said BP has set aside $1 billion. The company is responsible to try to fix the plant and wildlife ecosystems that were disrupted by the spill. “We still have ongoing cleanup in sensitive wildlife nesting habitat and archeological sites,” said Coast Guard Capt. Julia Hein, the federal on-scene coordinator. “However, there are significant portions of our coastline that are ready to move into the next phase, so that the Gulf Coast can start restoration projects critical to help heal the region.” Edward Owens is a technical adviser for BP and a veteran of the cleanup of the 1989 Exxon Valdez spill in Alaska. He said the Gulf cleanup was in its final stages. “We call it the polishing stages, where you try to get that nice shine on your car,” he said. Under the plan, the cleanup standards will depend on the terrain. A bit more oil will be allowed to remain on remote wild beaches where intense cleanup could do more damage. On beaches where people live and play, BP will be off the hook once there is no visible oil or oil is “as low as reasonably practicable” to clean up. Marshes will be deemed clean when there is no thick oil left or when officials decide that it’s best to let nature clean up the mess.

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The ‘Underground’ Gas Pipeline Business

October 22, 2011

by Nicholas Kusnetz, ProPublica The gas pipeline industry is hardly glamorous. But it is lucrative and loosely regulated. Last weekend, two oil and gas pipeline companies announced they would combine to create the biggest such firm in the U.S. when Kinder Morgan offered more than $20 billion to buy El Paso. If the deal goes through, the companies say, the behemoth would become the continent’s fourth largest energy corporation. While the pipeline business has operated largely, well, underground, several recent accidents have drawn attention to safety and the web of regulations that governs the nation’s 2.3 million miles of gas pipelines. A growing controversy over a plan to build a major oil pipeline from Canada’s Tar Sands to Texas has also spotlighted industry practices. On Monday, the Senate passed a pipeline safety bill that would increase fines, hire more inspectors and implement stronger safety standards. The industry has supported the measure, but some advocates have called for larger changes. Here’s a primer on the industry and its regulations. The Regulations The system that regulates natural gas pipelines is complex and, critics contend, lax. “There isn’t much regulation and it doesn’t really work,” said Rick Kessler, who sits on the board of the advocacy group Pipeline Safety Trust. Kessler is also a federal lobbyist on energy issues, but he does not represent pipeline companies. To build a pipeline to transport gas from Pennsylvania to New York, company X would have to seek a permit from the Federal Energy Regulatory Commission and prove that the line is needed. If the company convinces FERC of the need and that the proposed route is appropriate, the government could grant company X the right to seize property through eminent domain if it can’t work out deals with landowners. If the pipeline were not going to cross state lines a state commission would generally oversee the siting of the line. Texas is one of the more industry-friendly states on siting. It grants companies relatively wide latitude to seize property for new lines. Once a line is approved, a different agency takes over to handle safety issues. The federal Pipeline and Hazardous Materials Safety Administration sets minimum safety standards, which states can supplement. If a pipe crosses state borders, enforcement generally falls to the federal government, while most states inspect lines that don’t leave the state. But whether the regulators are from Washington or the states, “They don’t come out and necessarily walk the pipeline,” said Richard Kuprewicz, a former pipeline engineer for Arco who is now a consultant. In fact, it is generally the pipeline operators themselves who inspect their own lines and report problems. Most government oversight involves checking the paperwork, making sure that things are up to code. “It’s compliance with the regulations,” Kuprewicz said. “It’s not, ‘Are you safe or not.’” The pipeline industry points to its safety record. Despite several high profile accidents – such as the explosion that killed 8 people in San Bruno, Calif., last year – the number of incidents has not changed dramatically in recent years. There are typically about 275 gas pipeline accidents a year that kill 10 to 15 people and injure about 65 to 70. There was a jump in the number of accidents on transmission lines from 2002 to 2004, but the numbers have generally held steady since then, according to PHMSA . The industry group for interstate transmission lines, the Interstate Natural Gas Association of America, did not respond to requests for comment. Lydia Meigs, a spokeswoman for the American Gas Association, which represents the utilities that operate most of the 2 million miles of shorter distribution lines (the type of lines involved in recent high-profile accidents) said the industry is best suited to enforce best practices. Critics disagree, pointing to the San Bruno explosion, where the operator didn’t run tests that could have detected the faulty weld that eventually failed. There’s also an entire class of pipelines that is largely unregulated. There are an estimated 200,000 miles of gathering lines – pipes that lead from wells to processing plants – in sparsely populated areas for which PHMSA does not set safety standards (the agency does regulate such lines in higher density areas). Most states do not regulate these lines either, so there is no reporting on any leaks that may be found. Siting is generally worked out by energy companies and landowners. These rural gathering lines are considered to be low risk not only because relatively few people live near them but also because they are generally smaller and operate at lower pressures than the lines that send gas from state to state. But in March, a federal advisory committee found that newer gathering lines , particularly those in shale gas development areas, are running at higher pressures and that operators should be required to submit safety reports. PHMSA, the federal regulator, is now considering whether to issue new regulations to cover these lines. Currently, PHMSA has 125 inspectors to cover 290,000 miles of gas and liquids lines, while about 300 state inspectors oversee the remaining 2.2 million miles, according to PHMSA. The Business The industry is dominated by a handful of companies, including El Paso, Enbridge and Williams Gas Pipeline, according to Fadel Gheit, an oil and gas analyst with Oppenheimer and Co. Kinder Morgan, for example, currently operates more than 37,000 miles of lines, carrying not only gas but also oil and carbon dioxide. Last year, the company had a net income of $1.3 billion on $8 billion in revenue. The Federal Energy Regulatory Commission sets guidelines for what companies can charge to transport gas. The rates are based on market supply and demand and on the amount of money the company has to spend to build and maintain the line. A gas producer such as Exxon will generally buy a certain amount of transmission capacity and negotiate a rate within FERC’s guidelines. “It’s like buying a seat on a flight,” Gheit said. It’s a relatively predictable industry, Gheit said, because supply and demand don’t fluctuate wildly from year to year. When a company builds a line, it generally locks in long term contracts. Increased gas development has led to a push for new lines. FERC has approved dozens of new projects over the past couple of years. The Interstate Natural Gas Association of America says that, due to projected increases in production and consumption, the industry will need to build 35,600 miles of transmission lines and 414,000 miles of gathering lines by 2035, at a cost of nearly $140 billion dollars. Key Pipeline Stats* Miles of all types of pipelines, gas and liquid – more than 2.5 million Miles of federally regulated gas transmission andgathering lines – 321,000 Miles of gas distribution lines – about 2 million Miles of unregulated gas gathering lines – about 210,000 *Source: Pipeline and Hazardous Materials SafetyAdministration

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Dozens Arrested After Occupy Arizona Protests

October 17, 2011

PHOENIX — Authorities in Arizona arrested nearly 100 people after two separate protests in support of the Occupy Wall Street movement. The 53 arrests in Tucson and 46 in Phoenix on Saturday night came hours after peaceful protests against financial institutions as part of a series of such demonstrations across the country. Police said demonstrators in each city failed to leave parks at curfew. Phoenix police said protesters marched from a downtown rally at Cesar Chavez Plaza to Margaret T. Hance Park on Saturday evening and the park had a posted 10:30 p.m. closing time. “As the park closing hour passed, many of the demonstrators refused to leave,” said police spokesman Sgt. Trent Crump, adding that officers told the protesters “to leave or be subject to arrest.” Crump said “a large group remained and refused to leave the park,” resulting in 46 arrests for criminal trespass, a misdemeanor. “Most of those arrested were passive in nature and no injuries were reported to either officers or demonstrators,” he said. The names of the 46 arrested weren’t immediately provided by Phoenix police. In Tucson, about 100 miles south of Phoenix, police said 53 demonstrators were arrested after they remained in Military Plaza Park after the 10:30 p.m. closing time Saturday. An estimated 150 protesters were at the park at the time and they were told they would be arrested if they didn’t leave, said Sgt. Matt Ronstadt, a Tucson police spokesman. Tucson Police Chief Roberto Villasenor addressed the remaining demonstrators at 11:15 p.m. and officers began issuing criminal citations for violating the city’s code by remaining in a city park after hours. Ronstadt said no police force was used during the citation process and all 53 were released pending a court appearance. The Tucson rally began around noon Saturday and drew an estimated 500 people. About 1,000 people attended the Occupy Phoenix event that began with an afternoon gathering at Cesar Chavez Plaza. By 5 p.m., many protesters had marched to Margaret T. Hance Park and their numbers continued to dwindle throughout the evening. After police repeatedly ordered protesters to leave, a line of about 100 helmeted officers, many carrying batons, formed around 11 p.m. PDT. The arrests began around midnight after a group of demonstrators sat on the ground, refusing to move. Police slowly escorted them away one-by-one. The arrests appeared peaceful and there were no signs of violence between the officers and a crowd of less than 100 people still milling about the park, which had officially closed by late evening. Protester Davin Wright, 31, described the scene as generally peaceful, but he said police acted roughly during some of the initial arrests. “Anyone who thought they were going to be crunching skulls; it’s not going to happen,” he said. Later, a dozens of people remaining inside the park withdrew to the street as the line of officers slowly walked toward them. Groups have been turning out across the country to express anger over costly health care and rising unemployment, and to cast blame on corporate interests for the economic pain they say all but the wealthiest Americans have endured since the financial meltdown. The Occupy Wall Street protests started Sept. 17 in front of the New York Stock Exchange.

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Report: Tax Cuts For The Wealthy Cost U.S. Millions Every Hour

October 14, 2011

Tax cuts for Americaâs top earners are costing everyone, every hour of every day, a new report from the National Priorities Project finds. Tax cuts for the wealthiest five percent of Americans cost the U.S. Treasury $11.6 million every hour, according to the National Priority Foundation. Americaâs top earners will get an average tax cut of $66,384 in 2011, while the bottom 20 percent will get an average cut of $107. The report comes as party leaders wrangle over the best way to curb the nationâs budget deficit, protesters around the world demonstrate against income inequality and corporate greed and Republican presidential candidates offer their economic plans to voters. Former pizza company CEO and Republican presidential candidate, Herman Cain, has been getting lots of attention in recent weeks for â999 Planâ which would cap the corporate, income and sales tax rates at 9 percent. President Barack Obama unveiled his deficit reduction plan last month , which aims to curb the national debt through a combination of tax cuts and increased spending. The plan includes a proposal to increase taxes on millionaires — the so-called Buffett rule, name for famed billionaire investor Warren Buffett. In an August op-ed in The New York Times , Buffett argued that lawmakers should put an end to tax breaks for the âsuper-rich.â After Obama announced the proposal Republican leaders criticized the Buffett rule calling it âclass warfare.â Still, there are some Republicans who support increasing taxes on the wealthy. Former Federal Reserve Chairman Alan Greenspan — a registered Republican — told CNBC earlier this month that he supports allowing the George W. Bush-Era tax cuts for the wealthy to expire. That could because the tax cuts are weighing on the national debt. The non-partisan Center for Budget and Priorities found that the Bush tax cuts costs about the same as the shortfall from Social Security in the ten years after they were signed into law. If the U.S. reverted to Clinton-era marginal tax rates, the U.S. Treasury would net an additional $72 billion annually , according to Citizens for Tax Justice. In addition, increasing taxes on the wealthy could also help to narrow the widening wealth gap. The net worth of the bottom 60 percent of U.S. households — about 100 million households — is lower than that of Forbes 400 richest Americans. Tax cuts for the wealthy provided Americans making more than $1 million with a $128,832 benefit, while Americans earning from $40,000 to $50,000 got an $860 benefit on average .

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Walmart Warehouse Under Investigation By California Labor Officials

October 14, 2011

WASHINGTON — Investigators in California have discovered numerous labor law violations at a massive warehouse handling Walmart goods, according to state officials. At the warehouse in Riverside County, Calif., operated by Walmart contractor Schneider Logistics, inspectors with the state labor department found that two of the temporary staffing agencies who supply manual labor have not been keeping track of how much money workers are owed. One firm, Impact Logistics, Inc., was issued a $499,000 fine for not providing itemized wage statements to the workers who unload and load products at the facility. The company was also issued a warning for failing to maintain time records, and another staffing agency, Premier Warehousing Ventures, was issued a similar warning. There are around 200 workers at the warehouse. Impact Logistics did not return a phone call seeking comment. Jim Pittman, chief operating officer of Premier, said the company plans on proving that it was actually in full compliance with the law. “My employees mean the world to me,” Pittman said. “It is our intent to abide by all of the labor laws whether it be in California or the other states we work in.” None of the workers in the warehouse are employed directly by Walmart, but labor department officials said the products inside were bound for Walmart stores. Dan Fogleman, a Walmart spokesman, said the company has reached out to Schneider to assess the situation. “This facility is run by a third party, and this is an issue involving some of their subcontractors,” Fogleman said. “Although we’re not involved in this matter, the contracts we have in place with third parties require that they follow the law, and thatâs something we fully expect.” State Labor Commissioner Julie A. Su told HuffPost that many workers were not given proper pay stubs, and it appears that some may not have been paid for all the time they worked. Although many workers have already been interviewed on-site and off, she said the agency will be carrying out a fuller investigation in the coming weeks. Su added that the layers of subcontracting in warehouse work can make it difficult to enforce labor law. “Certainly thatâs one of the challenges,” she said. “Warehouses are one example of the ever-increasing contracting out of labor. It’s difficult for enforcement, and in many instances it’s a deliberate effort to avoid compliance.” Wage and safety complaints are not uncommon in American warehouses. The Morning Call recently chronicled the sweatshop-like conditions for workers toiling in an Amazon distribution center in Pennsylvania. Workers there said the supervisors refused to open bay doors citing the possibility of employee theft, and the warehouse grew so hot on some days that ambulances waited outside at the ready to treat workers for heat exhaustion. Schneider, the Walmart contractor, was not cited in the California inspection, since the workers are employed directly by the labor staffing agencies and not by the warehouse company. A Schneider spokeswoman told HuffPost in a statement that the company has cooperated with the investigation: “We expect the agencies we work with to comply with all California and federal labor laws. We believe that we are in full compliance with applicable laws and regulations. We expect our vendors to fulfill their responsibilities as well.” The Riverside facility is one in a massive network of warehouses in California’s Inland Empire region. Many of the facilities receive clothing, electronics and other dry goods coming from China that are bound for retail stores throughout the United States. Some of the country’s biggest retailers use warehouses in the area, but workers in the warehouses are often employed through layers of subcontracting, blurring the lines of accountability. Sheheryar Kaoosji, research and policy director at the worker advocacy group Warehouse Workers United, told HuffPost that the allegations against the temp companies operating in the Riverside facility are common in Inland Empire warehouses. He said the mostly Latino workers are often hired on a temporary basis and end up earning around the minimum wage. Temp workers are more vulnerable to alleged abuses than direct hires, he said, and many of them are paid according to a confusing piece-rate schedule. “Workers don’t know how much they’re being paid — they’re not showed on their paychecks,” Kaoosji said. “Five or six years ago, there was a higher percentage of direct hires. That’s been slowly eroding. Every year there are more people employed through the agency.” In addition to the Riverside facility, Schneider Logistics operates an extensive Walmart distribution center outside Chicago, Ill. Earlier this year, workers at that facility filed a class-action lawsuit against Schneider accusing the company of violating labor laws. At the time, Robert Hines, who has worked on a temporary basis in Chicago-area warehouses for years, told HuffPost that he wasn’t compensated for what was often grueling work in the Schneider-operated facility. “I noticed after a couple of weeks that my checks didn’t match my hours,” said Hines, who claims he was shorted on overtime as well. “People are breaking their backs, trying to feed their families and be right.” Citing the California case, Su said that without proper pay stubs it can be impossible for a worker to know whether or not he’s been paid appropriately. “In this industry and others like it, this example makes it very clear that the failure to provide a wage statement is part and parcel of an effort to exploit workers,” she said.

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Offshore Safety Chief Pushes For Stiffer Fines

October 13, 2011

WASHINGTON — The head of the offshore drilling safety agency is telling Congress current fines for offshore violations need to be much stiffer. Michael Bromwich, head of the Bureau of Safety and Environmental Enforcement, says the maximum civil penalty for a violation offshore should be “well into the six figures” per day, per incident. The maximum fine was $35,000 per day at the time of the Gulf blowout. Bromwich called that amount “trivial” for profitable companies spending up to $1 million a day leasing an offshore rig. Bromwich’s statement comes a day after BP was cited for seven violations, and its contractors Transocean and Halliburton, four apiece, stemming from the Gulf spill. Massachusetts Democratic Rep. Edward Markey says based on his calculations, the most BP could be fined is $21 million.

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Two Peas In A Pod: City Council Votes 11-0 For Occupy LA

October 13, 2011

This story comes courtesy of The City Maven . By Alice M. Walton The Los Angeles City Council voted 11-0 today to formally support the Occupy LA protesters who have taken over the lawns of City Hall as part of a campaign to draw attention to corporate Americaâs influence over government. The one sticking point of the resolution, which was introduced by Councilmen Richard Alarcon and Bill Rosendahl, was its connection to the Responsible Banking Ordinance that has languished in committee for more than a year. Ultimately, the council reached a compromise to hear the banking issue in the Budget and Finance Committee on or before Nov. 21, with the item going to the full council for a discussion â but not a vote â that same week. Members of Occupy LA addressed the council for more than an hour and a half before the vote. Though speakers were a bit more focused than they were during yesterdayâs meeting, their messages still ranged from regulating banks to ending all wars to extending Los Angeles Unified School Districtâs academic year. None of those issues are overseen by the Los Angeles City Council. The proposed Responsible Banking Ordinance would require financial institutions that do business with the city of Los Angeles to report annually on their lending activities and community reinvestment goals. Whereas yesterdayâs public comment period included a violinist, today City Hall was treated to a spoken word performance and a song performed by a man with a ukulele. Absent from the vote were Councilmen Mitch Englander, Paul Krekorian and Ed Reyes. Occupy-LA-Resolution

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Frank Kameny, Gay Rights Pioneer, Dies At 86

October 12, 2011

WASHINGTON — Frank Kameny, who was fired from his job as a government astronomer in 1957 for being homosexual and became a pioneer in the gay rights movement, died Tuesday at his home in Washington. He was 86. Bob Witeck, a friend of Kameny’s for three decades, confirmed his death. Kameny had been in failing health, and a medical examiner said he suffered a heart attack or heart failure, Witeck said. Witeck said plans for a memorial in November were being discussed. Kameny had been a government astronomer for just five months when he was asked to meet with federal investigators. They told him they had information he was homosexual and he was dismissed. Kameny didn’t leave quietly, however. He contested his firing by the U.S. Civil Service Commission by writing letters to the agency, both houses of Congress and eventually the White House. He sued and lost in lower courts, but pressed on with a lengthy brief in 1961 that is now regarded as the first civil rights claim based on sexual orientation to be brought to the U.S. Supreme Court. Soon after, he co-founded the Mattachine Society of Washington, which advocated for equal rights for gays and lesbians. In 1965, Kameny and 10 others became the first to stage a gay rights protest in front of the White House and later at the Pentagon and elsewhere. Many of Kameny’s signs as well as buttons and leaflets from that time are now housed at the Smithsonian’s National Museum of American History.

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Power Utility Sued After Massive Texas Wildfire

September 28, 2011

FORT WORTH, Texas — A utility knew about wildfire dangers amid Texas’ severe drought but failed to remove dead trees and branches near power lines that sparked the most destructive wildfire in state history, an attorney said Tuesday after filing a lawsuit for some families who lost their homes. A Texas Forest Service investigation into the Sept. 4 Bastrop fire near Austin determined that the blaze started after wind gusts caused limbs and a dead tree to topple onto power lines. However, the report did not blame Bluebonnet Electric Cooperative for the blaze that destroyed more than 1,500 Central Texas homes and left two people dead. Bluebonnet CEO Mark Rose released a statement Monday saying the fire was a “terrible incident” brought on by high winds, hot temperatures and historic drought in heavily wooded areas – but those conditions were beyond anyone’s control. He also said the trees that first caught fire were on private property and outside the utility’s rights-of-way. But attorney William Rossick, who filed a lawsuit Monday on behalf of three residents, said Bluebonnet had the right – and the responsibility – to remove dead trees and trim branches on private property, and both of these areas were close to easements. At a Bluebonnet annual membership meeting in May, Rose “stressed that we should all pray for rain” and told the group that wildfires had scorched more than 330,000 acres so far, while more than 2 million acres of the state was in severe drought, according to minutes of the meeting posted on Rossick’s website. “A reasonable utility company would have been vigilant in policing their pine forests,” Rossick said. The lawsuit accuses Bluebonnet of negligence and seeks compensation for property damage, mental anguish, medical expenses, physical impairment and court costs. According to the Public Utility Commission of Texas, no agency oversees the trimming of trees and branches around power lines.

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Euro zone considers leveraging EFSF: EU’s Rehn

September 24, 2011

WASHINGTON (Reuters) – The euro zone is exploring the possibility of leveraging its bailout fund, the European Financial Stability Facility, to better support euro countries, Economic and Monetary Affairs Commissioner Olli Rehn said. Speaking at a seminar on the sidelines of the annual meetings of the International Monetary Fund, Rehn said this could only be explored once new operational powers for the EFSF are ratified by the 17 countries using the euro. This is likely to happen by mid-October. “Once that is done it is essential that we focus on both the long-term perspective of further fiscal integration and, in parallel, whether there are conditions to introduce some kind of euro bonds like the blue or red bonds — partly European, partly national bonds,” Rehn said. “In the meantime we need to build a bridge and I think this bridge will be developed on the basis of the current reform of the EFSF and as one part of that next stage we are contemplating the possibility of leveraging the EFSF resources to have more firepower and thus have a stronger financial firewall to support our member states that are doing the right thing,” Rehn said. Billionaire investor George Soros, also present, said several ways of leveraging were being explored: “Turning the EFSF into a bank is one, making it function as an insurance company could be another one, and using it to provide the first tranche of a guarantee, thereby relieving pressure on the others, could be yet another,” Soros said. “There are a number of options, and I am glad they are all being explored, because something needs to be done,” he said. (Reporting by Jan Strupczewski, Editing by Chizu Nomiyama )

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Alaskans Get $1,174 Checks From State’s Oil Wealth

September 20, 2011

JUNEAU, Alaska — Most Alaska residents will soon be getting a check for $1,174 simply because they live there. Each person’s share of the state’s vast oil wealth was announced with much fanfare in Anchorage Tuesday, with Gov. Sean Parnell ripping open a gold-colored envelope to reveal the number. This day is so widely anticipated in Alaska that the announcement of the Permanent Fund Dividend amount was carried live on television statewide, and dozens tuned in to watch a live webcast by the governor’s office. This year’s check is the smallest since 2006 and $107 less than last year’s amount, which was $1,281. Parnell warned the amount could diminish more in the future, given market volatilities and the fact that oil production in the state is declining. Nonetheless, he called this year’s amount “healthy.” State Revenue Commissioner Bryan Butcher said 647,549 Alaskans were deemed eligible to receive dividends, and about $760.2 million is expected to be paid out. Most Alaskans will get their dividends by direct deposit Oct. 6; the rest will receive checks in the mail. The 2010 U.S. Census put Alaska’s population at 710,231. Already, Alaskans are making plans for how they’ll use their dividends, from paying bills to putting the money toward a new car to buying sled dogs. Retailers are advertising “PFD” sales. So is Alaska Airlines, whose offer is popular in a state where few communities are connected to a road system and the cost of going to the nearest city to shop – or just get away – adds up fast. While the extra money is a great perk, it doesn’t always go far in a state where some rural residents pay $7 or more a gallon for gasoline and one study showed food costs for a week could run into the hundreds of dollars for a family of four. Vern Weiss owns Moochers Bar and Grill in Nenana, a community of about 380 people 55 miles southwest of Fairbanks. He said he spends about the amount of last year’s check in a week on food and beverages for his business. Still, every bit helps. The economy in that area is tough, and he said he has barely been able to make sure his employees are paid. A dividend check, he said, can help pay a lot of little bills. Voters passed a constitutional amendment in 1976 to establish the Permanent Fund as a way to stretch out the state’s oil wealth for future generations. At the time, Alaska had just experienced a construction boom spurred by a $900 million bonus payment from energy companies for oil discoveries. Today, state government relies heavily on oil revenues to run, and most Alaska residents receive a dividend check; people have to live in the state for a year to be eligible to apply. The amount of investment earnings allocated to dividends is based on a five-year rolling average of the permanent fund’s performance. The market hit from the U.S. recession and ensuing economic slump are factored into the most recent period. Still, Tuesday was “a happy day for Alaskans,” Butcher said. State labor department economist Neal Fried said there’s no question the dividend has an impact on Alaska’s economy but he’s seen no research to quantify just how big the bump is. The way people treat their dividends likely varies with their individual circumstances and even how long they’ve been getting the extra money, he said. Butcher, who used to work at the Alaska Housing Finance Corp., said October tended to be the month when many people caught up with mortgage payments. Parnell said one of his great duties as governor is being able to announce the annual dividend, calling it a “unique duty that 49 other governors likely wish they had.” He said he and his wife, Sandy, would likely put their dividends toward the cost of college for their two daughters. Last year, $783.4 million was paid to 611,522 people, according to the Alaska Permanent Fund Dividend Division. The fund ended the recent fiscal year with a balance of $40.1 billion. Alaskans received their largest dividend – $2,069 – in 2008, according to the dividend division. In 2006, the dividend was $1,106.96. Bosco Olson Sr., city administrator of Hooper Bay, said dividend announcement day is like Christmas, with the town’s 1,100 residents patiently waiting and excited. Olson, whose town is about 500 miles west of Anchorage, said he’s considering using his dividend for a new lead dog or two for his sled dog team.

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Solyndra Executives To Plead The Fifth At Hearing

September 20, 2011

WASHINGTON — Two of Solyndra’s top executives announced on Tuesday they will invoke their Fifth Amendment rights and refuse to answer any questions about the company’s collapse at an upcoming House hearing. Lawyers representing Solyndra CEO Brian Harrison and CFO W.G. Stover told the House Energy and Commerceâs subcommittee on Investigations and Oversight that their clients have been counseled to decline all lines of questioning in light of the Justice Department’s criminal investigation, Reuters reported . “[D]ue to the ongoing Department of Justice investigation and on the advice of their counsel, they will be unable to provide substantive answers to the Subcommitteeâs questions and that present circumstances require both gentlemen to exercise their fifth amendment rights in the face of questioning that might occur,” wrote Solyndra in a statement. “The company is not aware of any wrongdoing by Solyndra officers, directors or employees in conjunction with the DOE loan guarantee or otherwise, and the company is cooperating fully with the office of the United States Attorney for the Northern District of California in its investigation. Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-Fla.) on Tuesday issued a statement blasting Solyndra’s executives for reneging on written assurances that they would testify and implored them to reconsider the decision. Who exactly are Solyndraâs executives trying to protect and what are they trying to hide? Despite repeated assurances that they would testify voluntarily and answer questions this Friday, today we received the news that these executives â who had plenty to say to federal officials when securing half a billion dollars in taxpayer funding for their venture â plan to invoke their Fifth Amendment right against self-incrimination and will not answer questions from Congress… Both Mr. Stover and Mr. Harrison will be sworn in under oath this Friday. We have many questions for Solyndraâs executives on their dealings with the Obama administration, their efforts to secure federal support for a project that appeared doomed from the outset, and why they made certain representations to Congress regarding their dire financial situation just two months ago. We would encourage Mr. Harrison and Mr. Stover to reconsider this effort to dodge questions under oath and hide the truth from those American taxpayers who are now on the hook for their $500 million bust. Once touted as a model for green energy, Solyndra received a $535 million federal loan guarantee from the federal government, before laying off 1,100 workers and and filing for Chapter 11 bankruptcy earlier this month. Read the full statement from Solyndra below: Today Solyndraâs President and CEO, Brian Harrison, and its CFO, Bill Stover, communicated to Chairman Stearns and Members of the House Subcommittee on Oversight and Investigations that, due to the ongoing Department of Justice investigation and on the advice of their counsel, they will be unable to provide substantive answers to the Subcommitteeâs questions and that present circumstances require both gentlemen to exercise their fifth amendment rights in the face of questioning that might occur. The company is not aware of any wrongdoing by Solyndra officers, directors or employees in conjunction with the DOE loan guarantee or otherwise, and the company is cooperating fully with the office of the United States Attorney for the Northern District of California in its investigation. The company believes that the record will establish that Solyndra carefully followed the rules of the competitive application process, starting in December 2006 under the Bush administration and continuing under the Obama administration. The Department of Energy (DOE) conducted extensive due diligence on Solyndra prior to final approval of the DOE loan guarantee. Consistent with the DOE loan guarantee program requirements, all loan proceeds were used to build out the companyâs state of the art Fab 2 facility from green field to a working fab that was already producing panels at an annual run rate of over 100 megawatts when operations were suspended in connection with the Chapter 11 reorganization filing. At the same time Solyndra was successfully building out its Fab 2 facility, the competitive landscape for solar photovoltaic panels was changing dramatically. Market conditions led to an oversupply of panels worldwide, which had a substantial negative impact on pricing of the companyâs panels and the companyâs ability to rapidly ramp its sales. As late as August, the company believed that existing investors and the DOE would come to a financing arrangement that would have secured the capital the company needed to achieve positive cash flow from operations. The Companyâs investors had offered a transaction pursuant to which the required capital would have been invested, however, the terms of such transaction were not acceptable to the DOE. Ultimately, it was a failure to secure this financing that left the company with no other option but to seek to reorganize through a bankruptcy filing under Chapter 11. The decision to suspend operations and file for reorganization has had a devastating effect on the companyâs talented workforce as well as a negative impact on the businesses of Solyndraâs valued partners, suppliers and customers. This was not a decision taken lightly. The majority of Solyndraâs workforce was in the United States and the company did all that it could to keep these manufacturing jobs that are so vital to the country, in place. A small number of employees remain while Solyndra evaluates options, including a sale of the business and the licensing of its advanced CIGS technology and manufacturing expertise in order to maximize the value of the assets for Solyndraâs creditors, including the DOE. The company is confident that the investigation will clarify the facts surrounding the events leading to the DOE loan guarantee to Solyndra and looks forward to a time when its executives can more freely discuss their views on these events.

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Japan wants to convey stance on strong yen at G20: Azumi

September 20, 2011

By Leika Kihara TOKYO (Reuters) – Japan hopes to explain its stance on the strong yen and how it is hurting the country’s economy at this week’s Group of 20 finance leaders’ gathering, Finance Minister Jun Azumi said on Tuesday. Azumi also said that he wants to hear from his European counterparts how they plan to deal with the region’s debt problem, which he said will be discussed at the G20 meeting. “If not for the yen rises, Japan’s economy would have expanded more,” Azumi told a news conference after a cabinet meeting. “There’s a feeling Japan’s economy is at a standstill, so I would like to explain our stance (on the strong yen) when I meet senior officials from around the world,” he said. Azumi and Bank of Japan Governor Masaaki Shirakawa are expected to attend the meeting of G20 finance leaders on Thursday in Washington to discuss global economic developments, followed by meetings of the International Monetary Fund and World Bank that extend into the weekend. Japan intervened unilaterally in the currency market and the BOJ eased monetary policy last month in a joint attempt to stem sharp rises in the yen that threatened to derail a fragile economic recovery. It has held off from stepping into the currency market since then but Japanese policymakers have persisted with verbal warnings to the markets against pushing the yen up too far, helping to keep the Japanese currency below a record high hit against the dollar in August. The government also unveiled an outline of measures to help ease the pain to the economy from the strong yen, focusing on expanding programs to support employment. (Additional reporting by Tetsushi Kajimoto; Editing by Edmund Klamann)

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Unions Start Passing Out The Picket Signs

September 18, 2011

LOS ANGELES — A union representing workers at three major grocery chains in Southern California distributed picket signs Sunday, as the clock ticked toward the end of a three-day notice period required before calling a strike. Union negotiators intend to keep talking if a resolution appears to be in sight when the period ends at 7:10 p.m. They also stressed that members could keep working beyond that time. “Our workers will stay on the job until at least midnight, and possibly longer if negotiations are moving ahead,” said Mike Shimpock, spokesman for United Food and Commercial Workers Local 770, one of the unions representing the 62,000 workers seeking a new contract. If little progress is made toward settling disagreements over health benefits, negotiators said they will tell members to walk off the job. The grocery workers have been working without a contract since March, while in discussions with negotiators for The Vons Cos. Inc.; Ralphs Grocery Co., a subsidiary of The Kroger Co.; and Albertsons, owned by Supervalu Inc. Representatives for the supermarket chains said last week they were disappointed that the unions had taken that step but remained committed to reaching an agreement. Kendra Doyel, a spokeswoman for Ralphs, said Sunday the supermarkets remained hopeful a deal would be reached before the deadline. Calls to representatives for Albertsons and Vons were not immediately returned. A four-month strike and lockout that began in 2003 cost Ralphs and other grocery chains an estimated $2 billion. Both sides in the current dispute announced in July that they had reached a tentative agreement on the employers’ contributions to pension benefits, but payments to the union health care trust fund remained a major sticking point. Union members voted overwhelmingly to reject the health care proposal offered by the chains and to authorize their leaders to call a strike. Union officials said they were responding to what they characterized as the chains’ delaying tactics when they issued the required 72-hour notice Thursday evening to cancel the contract extension under which they had been working.

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Andrea Ragnetti: Asia: Economic Impact of Culture?

September 18, 2011

In business circles, one of the most popular topics of conversation is Asia and its booming economies. Much of this talk still focuses on the traditional areas of low cost manufacturing and a growing middle class. Many Westerners still view Asia as a market, albeit a growing one, and from the viewpoint of exports, goods and/or production. In the meantime, Asia is moving west. Investments are far reaching — in New York City alone, Chinese investments in real estate surpass $1 billion , including leases at 1 World Trade Center and the Empire State Building. Less obvious but equally impactful, however is the subtle “cultural colonization” transpiring on the global stage. It is a process that reminds me of the dual track followed by the American influence on Europe after the Second World War. In those years, the US started to massively export their products to a recovering Europe. This push backed by their enormous internal consumption, the innovativeness of their business approach, and the financial support that they were giving to the ailing European economies. At the same time, Americans were also exporting culture. American music, cinema, way of living — they all became an inspiration and an aspiration for our societies. In a sense, the US was also “colonizing” us in a more intangible way. While that has never been completely accepted by Europe, and the “American way” has always been also criticized and at times ridiculed, it is true that America was establishing not only a financial influence on Europe, but also a cultural one, and one reinforced the other. Now look at Asia and China in particular. We are increasingly interested in a holistic approach to health, one based on concepts like energy flows and balance and as a result, we are consuming great amounts of homeopathic remedies, acupuncture, reflexology, massage chairs, and the like. Indeed, even the UK National Health Service (NHS) has been offering acupuncture for the past several years. In the 90s, the West embraced Feng Shui and today, home buyers and designers are seeking enhanced wellbeing, health and wealth by embracing ‘Vastu,’ an ancient practice based on the energies of the earth, water, air, fire and space. It’s not just for Asian homeowners; Vastu Shastra is being applied to corporate buildings, including the first Microsoft building in Kirkland, WA. The list continues — there are more and more Asian influences in our gastronomy. Increasingly, we look at the quality of Asian “services” as an example to pursue for our service industry (think Asian airlines, or Asian hotel chains). And so on. In some cases, the quest for Asian investment goes hand in hand with promotion of culture. Case in point, Liverpool. Today, facing high unemployment, a diminished manufacturing sector and twice the national average of people on benefits, the city is casting its view overseas for investment, with China top of the list. As noted in a recent Economist article , the city’s investment arm, Liverpool Vision has established an office in Shanghai and developers are looking for Chinese investment to rejuvenate Liverpool’s dockyards with plans including a 60-story ‘Shanghai tower.’ And what will visitors come across when they tour the new Museum of Liverpool? The East meets West exhibit documenting the city’s twinning with Shanghai; and an online area to explore Asia trade and artifacts. Equally, entrepreneurs across Asia are enjoying the economic advantages of exporting their culture. Indeed, the Shaolin Temple is one of the most powerful Chinese brands today and the temple has ‘exported’ its cultural activities via its kung fu performance troupes, establishing Shaolin kung fu and meditation centers across US and Europe and licensing of its name for film, cartoons and other productions. Over the past few years, I have also witnessed a lot of multinational companies, like General Electric, Philips, Siemens and many others, relocating their product development organizations to Asia, and populating them with local talents. General Electric talks openly of “reverse innovation,” sourcing concepts and ideas from Asia for the global market. This will allow the cultural influence to translate into products that will be “invented” in Asia and will become a hit in the West, thus reinforcing the impact of that region on the world economy. Isn’t all this somehow similar to what I described for the US? And if that is true, shouldn’t we look at Asia with different eyes, as a source of trends and inspiration, rather than as a “market” for our economies? But also, shouldn’t we also recognize that culture too has a powerful economic value? I think it is an interesting question to ask ourselves, particularly at a time when cultural initiatives are under increasing pressure of big budget cuts, the ones we believe are necessary to secure our economies.

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Marc Joseph: Build It and They Will Learn

September 17, 2011

Last week the White House released their “American Jobs Act” proposal. Two ideas that caught my eye included preventing up to 280,000 teacher layoffs, and modernizing at least 35,000 public schools by supporting new science labs, Internet-ready classrooms and renovations at schools across the country, in rural and urban areas. No matter what your political outlook is on life, these are two parts of the act that all Americans must agree our society needs to keep our country moving forward in this highly competitive world. I heard on NPR this morning that there is now a 1 in 3 chance this country is heading back into recession. None of us can afford that. Whether you are working at a small business, a large business, a non-profit organization or for the government, we all need jobs to pay the rent. The Wall Street Journal recently said that “the global economic recovery has stalled.” As is noted by ABC News today , President Obama says his initiative will help put to work the “more than 1 million unemployed construction workers ready to get dirty right now.” What sensible American can argue with that? We need to stack the deck on immediate job creation to improve our odds of staying out of another recession. I was pleased to see yesterday in The New York Times that the White House honored its pledge to speed up government payments to small business contractors, reducing the payment time from 30 days to 15 days. This small gesture in itself helps create jobs because it frees up cash. These are the little things government can do to keep this economy moving. Saving teacher jobs and updating our schools, though, is not a little item on the agenda that can be fixed by an executive order. As The Huffington Post is reporting today, Tacoma, Wash. teachers are on strike despite a judge’s order to return to work. These teachers have the guts to put it all on the line to stand up for what is right for our kids. I am sure teachers all over the country would join them if they thought they would not lose their job the next day. But why, as a socially conscious society, are we forcing these dedicated teachers to abandon what they love in the classroom to protest what we all know is the right thing for our kids? This brave group in Tacoma represents our country’s conscience. How can we let our school buildings fall apart, and how can we not guarantee our children a first-class education? Our representatives in Washington can help fix this embarrassing situation we are forcing on our kids, by talking instead of arguing. In business you negotiate and work things out to move your business forward. With all of these businesspeople and lawyers as part of our government, why can’t they see this? I wish we all had the courage of the Tacoma teachers. Every company, every community should be pushing our representatives in Washington to do the right thing. Fund teachers, fund school building, and this, in the short run, will help our economy get back on track.

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Analysis: Wary retailers play safe with holiday hiring

September 16, 2011

By Dhanya Skariachan NEW YORK (Reuters) – People looking for a temporary retail job this holiday season will have better luck at dollar stores and discounters than at department stores and middle market apparel chains, as the anemic U.S. economy keeps other retailers cautious. Discounter Target Corp , which hired more than 92,000 seasonal workers last year, and home shopping channel QVC Inc are among the few that plan to hire more temporary workers. “The biggest area (of hiring) will be in the discounters, who will have new shoppers in their stores who are moving down from the middle market. The upper end seems to be fairly stable, but it is the middle end of the spectrum that I think will be very minimalist in their hiring,” said John Challenger, chief executive of global outplacement firm Challenger, Gray & Christmas. Chains including J.C. Penney , Kohl’s , GameStop , Toys R Us and Crate & Barrel told Reuters they plan to hire roughly the same number of seasonal workers as last year. “They are being very conservative because they just don’t know what to expect,” Elizabeth Moughan, senior manager of retail and hospitality marketing at Kronos, said. “There was a little bit of false optimism for a while.” But that was earlier this year, before fear of the slowing U.S. economy took hold. Consumer spending accounts for almost 70 percent of the economy. “If you had asked me 4-5 months ago, I think they were much more optimistic,” Challenger said, referring to retailers. “We have now had consecutive quarters where the GDP has been revised downwards.” A quarter of the retailers surveyed by the Hay Group said they were hiring fewer seasonal workers this year, while more than two-thirds see seasonal hiring at the same level as last year. Only 10 percent plan to hire more. The survey included responses from chains including Charlotte Russe, Coldwater Creek , DSW , Macy’s , Michael’s Stores and Pier 1 . For a graphic on holiday hiring, click http://r.reuters.com/nex73s More than a quarter of Americans surveyed by America’s Research Group said they planned to spend less this holiday season. In addition to hard-to-please shoppers, retailers face rising costs of cotton and other raw materials, forcing them to find other ways to save money. “They are … looking to sell a lot more product with less promotion and probably with less inventory, which means less product in the store, which means you need less people to help push the product through the store,” Craig Rowley, vice president of Hay Group’s retail practice, said. A bigger push to sell online is another reason why retailers are seeking fewer temporary workers in stores during the biggest selling season of the year, retail experts said. “E-commerce is rocking and rolling, and more and more customers are willing to go online to do their shopping, and more and more retailers are creating a very effective ecommerce strategy,” Rowley said. “That is taking some of the sales out of the stores.” Nineteen percent of chains said they will hire fewer seasonal staffers in stores this year due to the increase in their online sales, Hay Group said. This decline may be offset by the 19 percent that say they will hire more seasonal workers in distribution centers to support the uptick in online orders. LAST MINUTE HIRING Many chains will delay holiday hiring because they can afford to do it. “Retailers will have the luxury of being very choosy about who they hire because there will be many who want those jobs,” Challenger said. “Many retailers wait until they see people in their stores.” “In the past, people would double their staff levels for holiday shopping. We are just not seeing them do that,” said Becca Dernberger, vice-president of Manpower’s Northeast Division. “There is a wait and see approach.” Merchants agreed. “Over the last two years, we have hired seasonal workers a bit later than in previous years,” Melissa Childers, manager of corporate recruitment at Crate & Barrel, said. Merchants have also becoming better at finding other ways to get work done. “Retailers manage not just the headcount but the hours that they use,” Daniel Butler with the National Retail Federation said, adding that many chains now have “floater staff.” “From time to time, they are not on their regular staff, they don’t show up on the regular schedules but they come and work holidays and big promotions and help cover vacations, kind of on an on-call basis,” Butler said. (Reporting by Dhanya Skariachan, Phil Wahba, Liana Baker in New York and Jessica Wohl in Chicago; Editing by Richard Chang)

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Rocky Kistner: Intelligent Design; the Little Light Bulb Maker That Could

September 15, 2011

About an hour from the birthplace of Thomas Edison, in a cul-de-sac of a suburban industrial park outside Cleveland, is the biggest energy-saving light bulb company you never heard of. That company — TCP Inc — is part of a money-saving lighting business that is revolutionizing the way consumers think about light in their homes. For more than a decade, TCP (Technical Consumer Products), has been quietly stealing the thunder — and engineering staff — of its much more recognizable Cleveland neighbor, GE. But TCP has become the mouse that roared. It’s leap-frogged larger traditional lighting companies in a global quest to make innovative energy-efficient bulbs of the future. Thanks to companies like TCP, new watt-cutting lights are an easy way for consumers to slash their rising utility bills. And the bulbs will only get better. TCP now produces more energy-efficient compact fluorescents (CFL) than any other, making in-house brands for giant consumer outlets like Home Depot. Company engineers continue to use their technical wizardry to improve light bulb characteristics, including new quick starting and dimable CFLs to highly efficient 50,000 hour LEDs that will save customers big bucks long into the future. And starting next year, TCP will be producing a new and improved incandescent that is 50 percent more efficient. For those fans of Edison’s original bulb design, people can stop hoarding. TCP has solidified its role as an innovation leader by developing an energy-efficient incandescent with the same traditional shape, but that uses half the watts. TCP’s Ohio headquarters and bulb warehouse All photos: Rocky Kistner/NRDC Also on tap next year are plans to expand its Cleveland engineering and warehouse facility to start making highly efficient CFLs. That’s a welcome relief for an economy desperate for new employment opportunities. TCP officials say even more U.S. jobs will be created as light bulb manufacturing becomes more automated, reducing the incentive to base plants overseas. Bringing home jobs is an important objective of Ellis Yan, TCP’s founder and president. As a U.S. college student, Yan recognized the value of a more efficient light bulb, a technology that hadn’t changed much in a century. Yan grasped the importance of the CFL after it was invented by former GE engineer Ed Hammer (now a TCP consultant) during the energy shocks of the 1970s. GE didn’t actually produce the early CFLs since there wasn’t an efficient way to make them. Each one had to be made by hand. So in 1993, Ellis and his brother Soloman formed TCP and began manufacturing them in their native China, a country where labor was cheap enough to hire thousands of workers to bend the glass into curly-q-bulbs one by one. But times have changed. TCP quickly developed an automated system that now has the capacity to crank out nearly two million bulbs a day at its manufacturing plants in China. And more of those manufacturing jobs will be brought to the U.S. next year when the company begins making CFLs at a new production line in Ohio. TCP lighting assemblers and engineers in the lab Looking forward, TCP will continue to create more efficient bulbs, thanks in no small part to people like Tim Chen, TCP’s chief engineer. Chen worked for nearby GE until he was talked into joining TCP’s ambitious bulb designing team three years ago. Since then, Chen has helped the company overcome some of the most important CFL technical challenges; slow start up, no dimability and poor color temperature. TCP now makes bulbs that can be dimmed and start up quickly, producing different color temperatures of light that people can use in different settings of their house. The new designs and lighting technology advances have turned the sometimes ridiculed curly-cued CFLs into bulbs consumers have come to embrace. Chen says his engineering feats are due to the company’s philosophy of taking risks to solve specific problems. “I give all the credit to our founder (Ellis Yan),” Chen said. “He said this is the problem, you go solve it. Lots of companies aren’t willing to take that risk.” Tim Chen and his engineering colleagues are given free rein to solve the vexing problems that lighting engineers face everywhere. They huddle in their labs, tinkering with electrical components and gasses that squeeze more energy efficiency into each bulb and improve the color and lighting variability each one puts out. Vast trays of lights blink on and off in a ceaseless effort to create bulbs that are more efficient, durable and more pleasing to the eye. TCP Chief Engineer Tim Chen and racks of bulbs undergoing testing in Ohio. Engineers say in the future, the light bulbs of the world may all talk to each other the way computers do now. They may be smart enough to turn on and off automatically, and perhaps even change the color and temperature of the light depending on the mood of the moment. Bulbs someday could even outlive the people who bought them. Who knows, maybe they will be passed down through the generations. These are the kinds of things TCP engineers will be grappling with as the demands of the world change. But one thing is for certain; the light bulb of the future will in no way look and act like the common incandescent light that dominated the world for so long. They no longer will be your grandfathers’ bulbs. For future generations — and a sustainable planet — that is a very good thing.

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How Banks Cause World Hunger [GRAPHIC]

September 14, 2011

Banks are among some of the most hated companies in America , largely for their role in causing a global financial crisis. That reputation could only get worse thanks to one of their more controversial practices: Food Speculation. Banks and other financial speculators are increasingly “betting on food prices in financial markets,” according to this infographic from the World Development Movement . Food prices now account for 70 percent of total expenses in some of the world’s poorer households, hitting a record high in February . Looking forward, the OECD estimates that over the next decade cereal prices will rise 20 percent. That’s still less than meet prices, which are expected to jump by nearly a third . Here is the infographic from the World Development Movement :

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Andrea Learned: Sustainability Thought Leadership: Shift or Show?

September 13, 2011

What if your thought leadership got you very little recognition today but contributed to an incredibly significant cultural shift that made a positive difference for generations to come? It is an interesting question at a time when business leadership should be poised to jumpstart the sustainability movement, but could a preference for “show” keep the desperately needed “shift” from happening? A Businessrespect.net article about Upward Spiral , the Howard Schultz/Starbucks effort to stand against partisan divisions in Congress, explores this topic. The writer makes the point that the well-intentioned, Schultz-spearheaded campaign may be too quickly looking like a campaign for Schultz himself, and that could make the greater cause less successful. To quote the article: Entirely pragmatically — quiet influence is far more powerful. It means that once people have been influenced, ways can be found for them to rationalise the shift to their supporters by claiming authorship of their new position. It means that things can change, because the authors of change don’t feel they have to get the credit. Therein lies the lesson: no matter how worthwhile the cause, businesses must be careful about the way the message is crafted and communicated, and be clear on whether their intention is a true perspective shift or a quick show in the public eye. Especially for the sustainable business evolution, the goal is for innovative thinking to be taken seriously and to inspire and empower others to continue working together for the change. The legacy of Ray C. Anderson, founder of Interface Inc. , presents a good example of the shift approach. Only recently passed away, this “radical industrialist” and sustainability pioneer first changed his own ways and then inspired other business leaders and large corporations to do the same. Though Anderson did get media recognition and gain a name for his crucial role in the business sustainability cause later in his own process, that attention was the result of the many steps he took and the steady influence he wielded all along the way. What does this mean for sustainability thought leadership overall? Can slow, steady and relatively under-the-radar steps toward perspective shift win the race, or do we need Twitter-worthy cover stories and press conferences held by big-name business leaders to reach mass sustainability influence? At this moment in time, I believe we need to focus on the shift over the show. Patagonia’s founder, Yvon Chouinard, is another example of someone who, like Anderson, has made a huge difference in the broader sustainable business shift. Though his name is very familiar within the climbing/outdoor industry and to those closely watching the development of the sustainable economy, Chouinard’s less recognized work in helping develop cooperative business exchanges will likely matter more in the long run. Take the Organic Exchange as one example. Now called the

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David Hone: Six Topics for the Presidential Candidates

September 9, 2011

As another Republican candidate debate came and went, it has become fairly clear that the issue of climate change isn’t going to get much of a hearing, apart perhaps from some questioning of the science. While climate change may not be the defining issue of the moment in the USA, given the long term importance of the subject it would nevertheless be useful to understand how the various candidates for office might seek to shape the energy and climate policy landscape through this decade. The climate issue will almost certainly come back to confront a president in office through to 2017 and is probably inescapable for a candidate with ambition to serve through to 2021. Six areas of discussion and debate that could be on the agenda over the coming year would ensure both a better understanding of the subject and the range of potential policy directions that might be pursued by the next president: Carbon pricing: Many economists have said that the most effective way of beginning the long and complex task of managing carbon dioxide emissions is to put a price on the right to emit CO2 from power stations, industrial sources and transport. Although carbon pricing exists in some areas under regional and state based systems, a consistent national approach has yet to be developed. Energy options: Over the past decade the US has developed a major biofuels industry, become a leader in wind power deployment and significantly increased natural gas production. More recently new vehicle CAFE standards have been agreed. All of these offer real opportunity for significant emissions reduction, but need to be part of a broader energy policy framework that includes emissions management as an objective. The United States has already indicated its intention through the UNFCCC to reduce its greenhouse gas emissions by 17% by 2020 relative to 2005 and these options, if managed within the context of this goal, offer the possibility of success. International positioning: As a major current emitter and the largest cumulative historical emitter, it is important that the United States (with the EU, Canada, Australia, China, Japan and others) lead on the global task of managing CO2 emissions. But going it alone (or in a small club) isn’t a sustainable outcome. The USA will need to work with partners such as the EU and China to encourage and ultimately ensure global participation in the task of emissions reduction. Technology policy: Technology will play a long term role in the management of emissions. This will include scaled up use of technologies that the US already has experience with such as wind, biofuels and nuclear, together with new energy technologies such as solar and carbon dioxide capture and storage. New policies will be required to promote the development, demonstration and deployment of these and other technologies and to grow the technical skill base required to support this endeavor. Looking beyond 2020: With the 2020 energy picture now taking shape, longer term objectives need to be considered to ensure investment decisions made over the coming decade are compatible with the desired direction for 2030 and beyond. For example, should the USA have a recognized policy goal to reduce carbon dioxide emissions very substantially (this means something like an 80% reduction) over the first half of this century? Adaptation: Extreme weather events of recent years and current heat and drought extremes have at least demonstrated that a considerable response effort would be required should climate trends result in an increased frequency and/or intensity of such events. Sea level change may also pose a challenge for some areas as we head towards the middle of the century. Although the USA has a considerable response capacity, there is merit in beginning to fashion a more robust policy approach to physical climate change.

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Christine Bader: Is Steve Jobs the Next John Browne?

September 8, 2011

Environmental damage threatens another CEO’s otherwise successful legacy. Steve Jobs is one of the most admired CEOs of all time. He transformed his company from a middling player into one of the world’s largest and most successful businesses. He transcended mere leadership of his industry to transform the way we interact with information and with each other. But following fast on the heels of Jobs’s announcing his retirement was the latest in a series of revelations of how Apple has inflicted serious harm on people and the environment. Last week, renowned Chinese environmentalist Ma Jun released another damning report on pollution by Apple suppliers. In May, three workers died and 16 were injured by an explosion at a factory where iPads are manufactured, the latest in a string of deaths and labor abuses associated with Foxconn , one of Apple’s major suppliers. Last year, in spite of documentation of numerous problems, Jobs said its factory in China “is not a sweatshop. ” Pollution and human rights abuses cannot be offset by great products. Steve Jobs — and all other CEOs — must be judged on how they affect people and planet as much as how they affect the company’s share price. An increasing number of investors agree . Those who doubt that business success can be overshadowed by social and environmental issues need look no further than another once-revered CEO: John Browne of BP. By taking over Amoco and Arco, Browne transformed the former British Petroleum from a “two-pipeline company” (with major assets only in the North Sea and Alaska) to a true supermajor. In 1997, he earned praise from environmentalists and the wrath of his oil titan peers by becoming the first head of a major energy company to acknowledge the realities of climate change and urge action. Browne was anointed “The Sun King” by the media, frequently voted Britain’s most-admired chief executive, and even knighted with the honorific “Lord” by the Queen of England. But then came the Texas refinery explosion that killed 15 people in 2005, followed by the rupture of a pipeline the following year that oozed 200,000 gallons of oil into the Alaskan tundra. Both occurred on Browne’s watch. And of course, last spring saw the Deepwater Horizon rig explode to such disastrous effect in the Gulf of Mexico. Browne had stepped down by then, but some speculate that he created the cost-cutting and risk-taking culture that led to the Gulf disaster. Browne’s achievements are no less historic. He shifted the global debate about climate change. He created new models for resource development in Azerbaijan , Indonesia , and elsewhere, in which the company partnered with human rights groups and grassroots organizations to ensure that local communities benefited from the company’s presence. (I worked on such projects for BP under Browne’s tenure.) Yet those acts weren’t enough to prevent major harm elsewhere — harm that permanently defined BP in the eyes of many. While Apple may not be able to wreak damage on the same scale as BP, it is not too much to ask any company to take responsibility for safety and environmental standards in its supply chain. Apple is making efforts in this area, but they seem to be coming up short: The company earned a mediocre “Room for Improvement” from the Enough Project in its study of the 21 largest electronics companies to assess progress toward conflict-free supply chains. It earned a similarly lackluster 4.9 out of 10 in Greenpeace’s Guide to Greener Electronics , primarily for its lack of disclosure about its supply chain. In his new role as chairman, Jobs should start by announcing that henceforth Apple will be as much of a leader on social and environmental issues as it has in every other aspect of its performance. He should set up a task force of external experts including Ma Jun, give them free reign to inspect Apple’s supply chain, and have them publish regular reports on their findings. Apple should also catch up with the rest of the business world and publish its suppliers list. HP has been publishing its list since 2008. Nike began doing so in 2005 after similar criticism to what Apple is facing, and is still doing so today without the negative repercussions that they claimed would ensue. There is no question that Jobs’s leadership of Apple gifted us with beautiful products that have revolutionized how we interact with information and each other. But worker deaths, factory pollution, and lack of disclosure are not the hallmarks of a great company, nor of a great leader. Steve Jobs needs to tackle those issues with the same relentless focus that has made Apple such a success — so far.

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Tar Balls On Alabama Beaches To Be Tested

September 6, 2011

GULF SHORES, Ala. — Heavy surf churned up by Tropical Storm Lee sent tar balls rolling onto Alabama’s prime tourist beaches, and officials said Tuesday that they plan to test the black and brown globs to find out if they’re related to last year’s oil spill. Brandon Franklin, the coastal plans manager for the city of Gulf Shores, said officials are collecting samples that will be sent to Auburn University for testing. The exact origin of the tar balls is still unclear, and BP isn’t taking responsibility for the tar balls just yet. It has sent survey teams to conduct post-storm assessments along coastal beaches to determine what may have developed on the beaches and barrier islands as a result of Lee. The oil giant is prepared to mobilize response crews to affected areas if necessary, spokesman Tom Mueller said. Orange Beach Mayor Tony Kennon said most of the tar balls there were very small. The tar balls visible at Gulf Shores ranged from the size of a marble to nearly the size of a baseball. Connie Harris of Alabaster, Ala., had stayed at a condominium in Gulf Shores over the Labor Day weekend with three friends. When she returned from a beach walk, she had to scrub her feet with soap and a wash cloth, she said. “When we walked on the beach, we had tar on our feet,” Harris said. Grant Brown, a spokesman for the city of Gulf Shores, said he had been told the situation wasn’t as bad as last year, when oil fouled beaches all along the Gulf Coast because of the BP oil spill. But it was significant, he said. “It confirms our fear that there are tar mats just offshore and that we may have more tar coming in whenever there’s a storm,” he said. Elsewhere, the remnants of Lee have knocked out power to thousands, churned up rough ocean surf and drenched areas with rain that left some rivers and creeks topping their banks. At least four people have died because of the storm, including a swimmer who went missing off the Alabama coast. ___ Associated Press writer Harry Weber contributed to this report from Atlanta.

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Halliburton Sues BP Over Deepwater Well Blowout

September 2, 2011

NEW ORLEANS — BP PLC has engaged in a “cover up scheme” to hide its culpability for the deadly rig explosion that spawned last year’s massive oil spill in the Gulf of Mexico, one of the oil giant’s partners in the drilling project claims in a newly filed lawsuit. Halliburton Energy Services Inc.’s suit, the latest of several that the project’s partners have filed against each other, accuses BP of concealing critical information about the deepwater well that blew out on April 20, 2010. Halliburton, which did cement work on BP’s Macondo well, claims in Thursday’s suit that BP provided false information about the location of pockets of oil and gas around the well before the blowout. Halliburton says knowing the location of those zones is critical for a cementing job. “Profit and greed” were BP’s motives for concealing the information, the lawsuit alleges. Halliburton says it likely would have insisted on redesigning the well’s production casing if it had known about an additional hydrocarbon zone that BP allegedly failed to disclose. “Such changes would have cost BP millions of dollars on a well that was already painfully over budget and behind schedule,” says the suit, filed in a Harris County, Texas, state court. In response to the suit, which seeks unspecified monetary damages, BP spokesman Scott Dean accused Halliburton of trying to deflect blame and divert attention from its role in the disaster. Dean said “multiple independent investigations” have identified “serious problems” with the cementing of the well. “BP has accepted its responsibility for responding to the spill and is accordingly paying costs and compensation,” Dean said in a statement. “In contrast, Halliburton has refused to accept any responsibility or accountability. As BP has said repeatedly, it expects other parties to accept their responsibilities and bear their share of the costs.” Halliburton’s suit accuses BP of intentionally omitting information about the location of hydrocarbon zones from its own report on the causes of the blowout. Halliburton also claims BP withheld the same information from government investigators. In addition to suing BP in the Texas state court, Halliburton also said Friday that it is amending existing claims against BP in federal court to include fraud allegations. U.S. District Judge Carl Barbier in New Orleans is presiding over tens of thousands of claims resulting from the oil spill, including the suits that companies filed against each other.

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