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Struggling to Make a Profit, Fracking Investors are Searching for the Exit

DeSmog

Struggling to Make a Profit, Fracking Investors are Searching for the Exit

Banks and investors have given up on the U.S. fracking industry, which is bad news for current investors who waited too long to get out.
Justin Mikulka                         
 
Photos adapted by: Justin Mikulka

The outlook is increasingly bleak for oil and gas companies. The beginning of this year has seen the highest number of companies announce bankruptcy during the first quarter in five years. Eight oil and gas companies announced they were filing for bankruptcy during the first quarter of 2021.

Meanwhile, earlier this month The Financial Times noted that of 500 privately owned oil and gas companies in the U.S., 400 are losing money and unlikely to ever pay back their large debts. According to the Financial Times, the remaining companies are focused on a “last gasp” effort to look profitable to potential buyers in order to “secure a profitable exit.”

If they can’t secure a “profitable exit” that will help them pay back their debts, the most likely outcome is bankruptcy.

As Adam Waterous, head of the private equity group Waterous Energy Fund, told the Financial Times: “This business is broken. The industry is going through a multiyear process of wringing capital out of the sector, not bringing new capital in.”

Investors appear to be done with the fracking industry as they realize that the only people making money are the Wall Street banks and shale company executives. With investors losing interest in the fracking industry — and banks no longer interested in loaning money to fracking companies  —  there is a lack of new money available to prop up the struggling fracking business model.

The U.S. fracking boom has all the echoes of the U.S. housing and mortgage financing boom of the early 2000s — and this is bad news for the industry. It’s a trend that’s been lurking for years.

As DeSmog reported in 2018, quoting from The Big Short, a book about the lead up to the 2008 financial crisis: “All these subprime lending companies were growing so rapidly, and using such goofy accounting, that they could mask the fact that they had no real earnings, just illusory, accounting-driven, ones. They had the essential feature of a Ponzi scheme: To maintain the fiction that they were profitable enterprises, they needed more and more capital to create more and more subprime loans.”

Like the housing bubble, the fracking bubble continued despite huge losses because companies were able to borrow more money to keep producing oil — that they then sold for a loss.

As Michael Lewis, author of The Big Short, pointed out, to keep a Ponzi scheme going requires a constant influx of new money because there are no profits. When the new money sources dry up — the scheme collapses.

Shale Investors Looking for Greater Fools

An April article by Bloomberg reports that the business strategy for private shale company owners is to now “escape” the industry altogether.

These investor plans to escape the fracking business, however, require willing buyers — or as they are known in this part of the business cycle, “greater fools.” This is the idea that you can make money from overpriced assets because there will always be someone else, the fool, willing to buy it at an even higher, inflated price. However, if there are no willing buyers, these investors will find themselves “holding the bag” — essentially stuck with a worthless investment.

The fracking company owners looking to escape by selling their companies know the financial numbers better than anyone — that explains their urgency to get out. As the Financial Times noted, most of these companies have debts far greater than any future potential income, making bankruptcy a near certainty in the future.

Bankruptcy has been a popular approach for many big shale companies — like Chesapeake Energy and Whiting Petroleum — but the ability to emerge from bankruptcy requires banks agreeing to loan more money to the company. If that option is unlikely, the company’s assets will be sold off, which is another unattractive option at this point with 400 oil and gas companies finances and assets making them “unsaleable.”

This cycle of foolish buying and selling resulted in the housing crisis when there was no one to keep buying, and it appears to be happening now with the fracking industry. The housing crisis was preceded by the creation of a whole industry of “house flippers” who borrowed money to buy houses to then resell for a profit. And the same has been seen with fracking.

As DeSmog wrote in 2018 about fracking giant Chesapeake Energy, its business model involved flipping land leases for oil and gas production, more than actually producing oil and gas. This approach — where fracking management teams are in the business of flipping companies for big gains more than extracting fossil fuels — was widespread with shale companies and highly lucrative for executives.

The business of flipping assets requires that there always be a well-funded “greater fool” willing to pay for them. As the money is drying up for the fracking industry the scheme is being revealed and — like the 400 U.S. shale companies the Financial Times described as “unsaleable” — those left holding the bag now are likely to lose big.

The early days of the fracking boom saw some tremendous success stories with flipping fracking assets with one of the biggest being the sale of XTO’s natural gas assets to Exxon in 2009 for $41 billion. Eventually even Exxon’s CEO Rex Tillerson admitted the company “probably paid too much”; that deal is now viewed as one of the worst deals in the history of oil and gas, resulting in Exxon writing off at least $20 billion of the investment last year. However, it was a great price for the owners of XTO.

More recently, in February, Equinor decided to cut its losses with the U.S. shale industry and sold its Bakken assets for $900 million. That’s far less than what Equinor paid when it  first entered the Bakken in 2011 with an investment of $3.8 billion.

As these examples show, when everyone wants to escape a market, the usual outcome is very few do and those that do get out take huge losses.

The Return of Liar Loans

In January 2019, the Wall Street Journal reported that shale wells were not producing as much oil as the companies had promised investors. That article recounted a story from an oil industry conference where the idea that companies would properly estimate the potential future oil production brought a round of laughter from the conference attendees.

Why were fracking companies consistently overestimating the value of oil wells and reserves? “Because we own stock” was the answer from one conference attendee. This open admission that companies were lying about the value of their oil and gas assets to pump up their stock prices, combined with “lax corporate governance in the oil patch”, as a 2020 Reuters article describes, was a warning sign that the shale business was broken — and actively misleading investors.

One of the biggest problems behind the housing crisis were so-called liar loans. These were loans made to borrowers who lied about their income and assets to qualify as borrowers — even though the banks knew they were lying.

The same basic thing has happened with the fracking industry. In the oil business loans are based on a company’s reserves which refers to the amount of oil the company says they can produce from its assets. Banks lend against these assets in something known as reserve-based lending. What has happened in the fracking industry is that many companies may have been misleading about how much oil they can produce from their reserves.

Last year, DeSmog wrote about how reserve based lending for the fracking industry was a big problem. At the time, it was estimated that banks wrote off around $1 billion in reserve based loans for shale companies in 2019, exceeding their total losses for the past 30 years.

In December 2020, S&P Global wrote about the dim outlook for fracking companies and the banks that had loaned them money which included insights from Chris Holmgren, managing director for energy credit and risk management for Wells Fargo.

“The core reserve-based lending model began to break down. It became not successful in grasping the risks involved in shale development,” Holmgren said. “Lenders began to realize that they made decisions based on exaggerated potential.”

In the housing crisis they were liar loans. In the shale crisis they are “exaggerated potential” loans.

As expected, bankruptcies of shale companies are now on the rise in 2021 despite much higher oil prices. Just like many homeowners who borrowed money to buy houses they couldn’t afford based on their income, too many shale companies borrowed money to buy assets that will never produce enough income to pay back the money that was borrowed — even with higher oil prices.

In March, the CEO of Occidental Petroleum, Vicki Hollub, explained to attendees of leading oil industry conference CERAWeek that the economics of the shale industry were quite difficult when it came to producing profits.

“The profitability of shale,” she said, “is much more difficult than people ever realized.”

This fact is no longer a secret, which is why many fracking investors and banks are looking for a way to escape — but that escape seems unlikely.

Wells Fargo’s Holmgren described what could be the epitaph of the U.S. fracking revolution: “Banks are losing money and investors are stuck in investments they can’t get rid of.”

Justin Mikulka is a freelance writer and audio and video producer living in New York. Justin has a degree in Civil and Environmental Engineering from Cornell University.

Poverty soared to a pandemic high last month

Poverty soared to a pandemic high last month

Martha C. White                     

 

More than a year into the Covid-19 pandemic, it is becoming clear that the economic pain has not abated for many Americans — and is worsening for some.

 

Researchers at the University of Chicago Harris School of Public Policy and the University of Notre Dame Department of Economics are using monthly Census data to capture a nearly real-time snapshot of American poverty. Last month, even as the unemployment rate fell and more states relaxed restrictions on business operations, the poverty rate hit a pandemic high of 11.7 percent — a full percentage point greater than it was in early 2020.

For some of the most marginalized populations, the rate of poverty in March was even higher. Black poverty had retreated from the 23.3 percent high it touched last August but, at 21.2 percent, remained close to double that of the overall rate. Childhood poverty soared to a rate of 17.4 percent, and was high for less-educated people, as well, rising to 22.2 percent among those with only a high school education or less.

In both January and February of 2020, the poverty rate held steady at 10.7 percent — although even those metrics masked the challenges faced by some populations. Black poverty, for instance, was 20.7 percent in February 2020, compared to a rate of 8.9 percent for whites. The poverty rate for people without any college education was also elevated, at 19.6 percent in February 2020.

Experts say the monthly research illustrates just how instrumental Congressional fiscal aid such as the CARES Act and subsequent stimulus programs at keeping families out of poverty have been — and offers a glimpse of what could happen once those programs wind down if employment has not rebounded significantly.

“It’s astonishing that we’re seeing a high now. It does underscore how vulnerable so many people are that we still have not recovered enough that once the government aid starts tapering down… you can’t just cut off this aid overnight before the jobs come back,” said Andrew Stettner, senior fellow at the Century Foundation. “You’d hope by now things would have recovered,” he added.

Significantly, the researchers found that the poverty rate actually dropped in the early months of the pandemic, hitting a trough of 9.1 percent in May. James Sullivan, an economics professor and director of the Lab for Economic Opportunities at the University of Notre Dame and one of the research authors, said this was almost certainly a function of the combination of $1,200 stimulus payments that were distributed to most Americans, expanded unemployment benefits including benefits for gig and self-employed workers, and an extra $600 weekly benefit on top of existing state benefits.

“I feel like the most important takeaway from the work we’ve been doing since the start of the pandemic is the clear relationship between poverty and government relief efforts,” he said. “At the time, people were a little bit surprised, but then you look at the magnitude of the CARES Act, and it really makes sense that poverty would fall in the short run.”

The pandemic wreaked havoc on the finances of millions of households, but that pain was not spread evenly. Many people who were able to make the transition to working from home kept their jobs — although some did have their pay or hours reduced. But for people who worked in shuttered hotels, restaurants and malls, there were no alternatives.

“The economic impacts of the pandemic have been incredibly disparate,” Sullivan said. More recently, economists have noted the K-shaped recovery that has bifurcated Americans into haves and have-nots in the ensuing months.

The project’s authors note that while the unemployment rate has improved markedly since last April, weekly jobless claims filed still are being filed at a rate five times higher than before the pandemic. Sullivan suggested the April snapshot might show a brighter picture, though, since more families will have received financial assistance from the $1.9 trillion American Rescue Plan signed into law last month. “The latest relief package is going to provide significant additional resources to households, but we haven’t seen that in the data yet,” he said.

Stettner said those dollars would benefit the broader economy, not just the recipients. “Overall, the economy is doing very well, given the pandemic. That has a lot of do with the fact that we’ve supported people at the bottom. A lot of the consumer spending in our economy is by low- and middle-income workers. When they don’t have money, the economy suffers,” he said.

As a result, he added, it is important for policymakers to keep their foot on the gas and commit to fiscal support until the labor market recovery picks up steam. “In many sectors of the economy, it’s not going to open overnight,” Stettner said. “It’s going to take time for that activity to ramp back up.”

Indigenous Food Sovereignty Movements Are Taking Back Ancestral Land

Civil Eats

Indigenous Food Sovereignty Movements Are Taking Back Ancestral Land

From fishing rights off Nova Scotia, to grazing in Oklahoma and salmon habitats on the Klamath River, tribal groups are reclaiming their land and foodways.

By Melissa Montalvo                           March 31, 2021

 

The first day of commercial fishing in 2019 on the Klamath River. (Photo courtesy of the Yurok Tribe)The first day of commercial fishing in 2019 on the Klamath River. (Photo courtesy of the Yurok Tribe)

Last November, escalating tensions between the Mi’kmaq First Nations people exercising their fishing rights and commercial fishermen in Nova Scotia resulted in an unexpected finale: A coalition of Mi’kmaq tribes bought 50 percent of Clearwater Seafoods, effectively giving them control of the billion-dollar company and one of the largest seafood businesses in North America.

The Mi’kmaq people, who compose 13 distinct nations in Nova Scotia alone, have relied on fishing for tens of thousands of years and were granted treaty rights to a “moderate livelihood” by Canada’s Supreme Court. Despite these protections, the Mi’kmaq faced resistance, hostility, and even violence from commercial fishermen when exercising their rights.

By becoming majority owners of Clearwater Seafoods, the Mi’kmaq gained full ownership of Clearwater’s offshore fishing licenses, which allow them to harvest lobster, scallop, crab, and clams in a large area extending from the Georges Bank to the Laurentian Channel off Cape Breton. Tribal leaders hope the purchase guarantees the food security and economic sustainability of Mi’kmaq communities for generations.

Indigenous food sovereignty activists across the world stood in solidarity with the Mi’kmaq and applauded their unexpected victory. The deal represents a growing trend: Indigenous people are regaining access to—and control of—their traditional foodways.

For centuries, Native Americans in the United States have endured countless atrocities, from massacre to forced removal from their ancestral lands by the federal government. This separation from the land is inextricably tied to the loss of traditional foodways, culture, and history.

Now, there is growing momentum behind the Indigenous food sovereignty movement. Over the past few decades, Native American tribes in the U.S. have been fighting for the return of ancestral lands for access to traditional foodways through organizing and advocacy work, coalition building, and legal procedure—and increasingly seeing success.

In recent years, the Wiyot Tribe in Northern California secured ownership of its ancestral lands and is working to restore its marine habitats; the nearby Yurok Tribe fought for the removal of dams along the Klamath River and has plans to reconnect with salmon, its traditional food source; and the Quapaw Nation in Oklahoma has cleaned up contaminated land to make way for agriculture and cattle businesses.

“A big part of [land reclamation] is for food sovereignty,” stressed Frankie Myers, vice chairman of the Yurok Tribe. “We depend on the land to eat, to gain protein. It’s what our bodies were accustomed to, it’s what we as a people are accustomed to—working out in the landscape. It’s where we feel home. It’s good for our mental health. Oftentimes, folks have to be reminded that [food] is our original medicine.”

At the heart of the tribes’ different approaches to food sovereignty is a shared common goal: reclaiming ancestral lands for habitat restoration, access to healthy, culturally relevant diets, and economic opportunity.

In Eureka, an Unprecedented Land Return—and the Restoration of Marine Habitats

Between California’s northern coastline and the redwood forests, the Wiyot Tribe has practiced its way of life for centuries, celebrating ceremonial dances on Tuluwat Island, its place of origin. The island sits in the Arcata Bay of the present-day city of Eureka and provided access to essential nourishment, including oysters, clams, mussels, and fish.

A historical photo of Tuluwat Island, before the Wiyot Tribe began reclamation work. (Photo courtesy of the Wiyot Tribe)A historical photo of Tuluwat Island, before the Wiyot Tribe began reclamation work. (Photo courtesy of the Wiyot Tribe)

“For us, it’s a giant Costco. Everything that we needed was right there,” explained Ted Hernandez, Wiyot tribal chairman and cultural director, in a recent interview.

That was until 1860, when gold-rush era settlers ambushed and massacred between 80 and 250 Wiyots peacefully gathered on Tuluwat Island for a renewal ceremony. The surviving Wiyots were forced off the island and moved to Fort Humboldt, where Wiyots say that nearly half of the tribe died of exposure and starvation. They were then forcibly relocated to reservations at Klamath, Hoopa, Smith River, and Round Valley. In the early 1900s, a local church group bought land to house the Wiyots on what is known today as the Old Reservation. But after briefly losing federal recognition and a lack of potable water, the tribe moved to the Table Bluff Reservation, where it currently resides.

In 2000, after an acre and a half of the ancestral Tuluwat Island went up for sale, tribal elder Cheryl Seidner organized fundraisers to buy it for $106,000. This purchase gave the tribe momentum and hope that it could secure more land. Seidner led the Wiyots in negotiations with Eureka city leaders, and the city agreed to return most of the island to the tribe in 2019.

“With Tuluwat, it’s the first example of a city ever repatriating land to a tribe, which I think is great—but it’s also pretty sad that that never happens,” said Adam Canter, a natural resource specialist for the Wiyot Tribe.

Since then, the Wiyot people have used local community partners, volunteers, and state and federal resources to clean up the island, which was left in toxic disarray after years as the site of a shipyard for non-Native commercial fishermen. “There was a huge [Environmental Protection Agency] cleanup there,” said Canter, who leads the restoration effort. “The soil was contaminated with dioxins and pentachlorophenol oils, and all kinds of bad stuff.”

Tuluwat Island in 2011, after the Wiyot Tribe began restoration work. (Photo courtesy of the Wiyot Tribe)Tuluwat Island in 2011, after the Wiyot Tribe began restoration work. (Photo courtesy of the Wiyot Tribe)

But this hasn’t deterred the Wiyots, who are 600 members strong and have a vision of restoring the crucial marine and land habitats that have for so long nourished the tribe. The Wiyots hope to improve health outcomes for tribal members and create a sustainable food system that emphasizes food sovereignty and security. “Now we’re in the process of completing that healing process by bringing back the traditional plants that were . . . in the waterways so our eels, and our oysters can grow back in the bay,” explained Hernandez. “And once that’s complete, then we can start the healing process for the whole world. But in order for us to do that, we need our traditional foods.”

In her role as natural resource technician-in-training, Wiyot tribal member Hilanea Wilkinson is working on removing invasive species and reintroducing native, edible plants to the island. She sees her work as even more urgent in light of the ongoing pandemic. “It has really shed light on the need for sustainable food for lots of reservations and Native communities—all communities,” she said. “Native communities are in more rural areas and don’t have easily accessible grocery stores.”

The Wiyot Tribe is also bolstering its food sovereignty movement through education. Currently, it’s fundraising to build the Food Sovereignty Lab & Cultural Workshop in partnership with Humboldt State University’s (HSU) Native American Studies program. The goal is to indigenize the HSU campus and inspire future generations of Indigenous botanists and biologists who can help preserve Native American communities’ food security and sovereignty.

California’s Largest Tribe Restores Crucial Salmon Habitats

About 100 miles north of the Wiyot, the Yurok Tribe, California’s largest, is working to restore once-thriving salmon populations, which are culturally and spiritually significant in addition to being a major food source.

The Yurok people reside along the Klamath River, which was once a bustling artery that connected Northern California tribes and provided a food system of salmon, berries, elk, and acorns. Since the construction of the Klamath River Dams in the early 1900s for hydroelectric power and farmland irrigation, the salmon populations have been devastated to near-extinction. Most notorious was the Klamath River Fish Kill of 2002, where the U.S. Fish and Wildlife Service estimates that 34,000 salmon died from infection in a disaster caused by warm water temperatures and low dam water flow rates (Some counts say as many as 70,000 salmon died.)

Dwayne Davis, a Yurok Fisheries Department watershed restorationist, planted hundreds of trees for a salmon habitat restoration project on the lower Klamath River. (Photo courtesy of Matt Mais/Yurok Tribe)Dwayne Davis, a Yurok Fisheries Department watershed restorationist, planted hundreds of trees for a salmon habitat restoration project on the lower Klamath River. (Photo courtesy of Matt Mais/Yurok Tribe)

Since the early 2000s, the tribe has built coalitions with local community groups and advocated for dam removal to state and federal authorities. They recently celebrated a historic agreement to remove four obsolete dams along the Klamath River (Iron Gate, Copco 1 and Copco 2 in California, and J.C. Boyle in Oregon) to clear the river and revive the traditional salmon runs.

If all goes according to plan, the four dams will be officially decommissioned by 2023 in what would be the world’s largest dam removal project.

“We know from generations past that if we let the salmon die, then we follow along with [them],” said Myers. “The median [household] income on the upper reservation where I live is $11,000. The protein that salmon provides is actual sustenance people need to live.” (In California, the median household income is $75,235, according to the U.S. Census Bureau.)

While awaiting the final green light from the Federal Energy Regulatory Commission on dam removal, the Yurok Tribe is collaborating with the U.S. Bureau of Reclamation, Fish, and Wildlife Service, Bureau of Land Management, California Department of Fish and Wildlife, and California Department of Water Resources to build the Blue Creek salmon sanctuary—a permanently protected portion of the salmon’s river habitat—and restore native plants to the area.

They’ve also secured control of more than 60,000 acres of ancestral lands, through both direct purchase and a land transfer from Western Rivers Conservancy.

Building a beaver dam analogue on Yurok land. (Photo courtesy of Matt Mais, Yurok Tribe)Building a beaver dam analogue on Yurok land. (Photo courtesy of Matt Mais, Yurok Tribe)

Ultimately, the Yurok Tribe hopes to become a fully sovereign nation that can sustain its people, both physically and economically, from the Klamath River and its salmon. “There is a way to survive and live and thrive here in the basin that isn’t just hunter-gatherer,” Myers said. “Because we used to have . . . an economy that was also based on salmon, and we feel like we could get there again.”

Restoring a Toxic Wasteland for Cattle Grazing and Agriculture

Across the country, in Northeast Oklahoma, the Quapaw Tribe has been working on land cleanup for its own food sovereignty initiatives. The Quapaw, or O-Gah-Pah (meaning “downstream people”), were a plains tribe that inhabited present-day Arkansas along the Mississippi River. When the Quapaw were moved to Indian Territory (present-day Oklahoma) in 1834, they could no longer practice their traditional hunting and gathering, according to Devon Mihesuah, co-editor of Indigenous Food Sovereignty in the United States. Out of necessity, they became ranchers, like many others relegated to reservations.

In the 1890s, lead and zinc were discovered on Quapaw land. In the documentary “Tar Creek,” Quapaw members described how the U.S. Bureau of Land Management and Department of the Interior often leased this land to mining companies without tribal approval, or through coercion. These companies mined lead and zinc to supply the war efforts until the 1970s. The mines, now long-abandoned, have polluted local water and land, leading to developmental delays in Indigenous and non-Indigenous children.

While the local residents of the nearby towns all received buyouts to relocate, the Quapaw people are still on their land and determined to make it hospitable again. The tribe secured a contract with the EPA more than a decade ago to remediate the land at the Tar Creek Superfund Site and repurpose the land for agriculture. The tribe has also seen recent success protecting tribal land sovereignty in Oklahoma.

“We are reclaiming it little by little and regaining land. And we’re doing whatever we can [to] remediate and put it back into ag use,” says Mitchell Albright, Quapaw tribe member and agriculture director.

Today, the restored land is used for more than 1,000 cattle and bison grazing under the Quapaw Cattle Company. The Quapaw have also been able to grow row crops (canola, non-GMO corn, soybeans, and wheat primarily used for animal feed) on restored lands, and they have built greenhouses to grow heirloom, pesticide-free vegetables. In 2017, the Quapaw Tribe also opened the country’s first tribally owned, USDA-approved cattle processing plant.

With rural geography, the Quapaw know the difficulties in transporting mainstream foods to their tribe. That’s why their priority is self-sufficiency, along with cultural preservation and job creation.

Through their farm, they supply the casino and restaurants located on the reservation. They also boast a coffee roaster, craft beer production, and a strong honeybee pollination program. Albright recalls that when he took over as ag director around eight years ago, there were around 15 employees. Today, there are upwards of 100.

“There’s gonna be a time—maybe not in our lifetime, but at some point—[when] maybe you can’t go to Walmart or your local grocery store and get what you need to survive,” Albright said. “And that’s what I love about Native people when they come together. They come up with ideas [that] can feed our people.”

The Future of Indigenous Food Sovereignty

Myers sees the land reclamation work of his and other tribes as more pressing than ever in light of climate change. “[We are at] the frontlines of this war to reclaim our history, our land, our culture . . . We have a system that can not only be saved but restored. And not just kept from going extinct, but being able to flourish in abundance. We’re ready for some victories.”

Deb Haaland speaks to a consituent in Sept. 2020. (Photo courtesy Rep. Deb Haaland's office)Deb Haaland speaks to a consituent in Sept. 2020. (Photo courtesy of Rep. Deb Haaland’s office)

The confirmation of Secretary Deb Haaland (D-New Mexico) to lead the Department of the Interior is a huge symbol of hope to the nation’s 574 federally recognized tribes. As a member of the Laguna Pueblo tribe of New Mexico, Haaland has firsthand understanding of Indigenous issues such as land sovereignty. Although the #LandBack movement wants Haaland to endorse land reparations for Indigenous people, and she has so far refrained from doing so, Myers and others say her confirmation is enormously significant.

Myers is optimistic about the way forward. “We’ve gone a few hundred years never having anyone in that seat that understood the tribes from a member’s perspective. And now we do,” he said. “Regardless of what happens, things are going to get better because there’s an understanding that was never there before.”

This article was updated to correct the spelling of the Quapah phonetical and to update the name of Western Rivers Conservancy.

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Melissa Montalvo is a freelance writer who primarily focuses on the food and agriculture industry, cantinas, and all things Mexico.

Post-pandemic boom poised to get smacked with severe shortages

Post-pandemic boom poised to get smacked with severe shortages

Victoria Guida                                 April 17, 2021

 

 

With the economy set to boom this year and government aid inflating bank accounts, American businesses and consumers are ready to splurge. That is, if they can find enough of what they want to buy.

Production and shipping bottlenecks have cropped up around the world, a result of the coronavirus pandemic; severe weather events like the winter storm in Texas; a shortage of computer chips serious enough to spur President Joe Biden to summon CEOs to the White House; and even that ship that got stuck for days in the Suez Canal. Federal Reserve surveys show that delivery times are more delayed than at any time since 1951.

Compounding those difficulties is the unexpectedly sharp rebound in many sectors of the U.S. economy — an uneven reopening that makes it all the more difficult to predict what people will spend money on and ensure that supply is there to meet demand.

All of this raises the stakes for the Fed. Despite the raft of positive headlines around soaring consumer purchases and lower jobless claims, the disruptions have led to an uptick in costs for companies in industries from furniture to food. That could lead to a surge in inflation if passed along to consumers, putting a drag on Biden’s hopes for a robust recovery and fueling pressure on the central bank to raise rates far earlier than it wants to.

“The economy’s a fine web where everything’s matched together, and that got torn apart by the pandemic,” said Jason Furman, a professor at Harvard University and a former chief economist to President Barack Obama. “We’re just hoping it all comes back together.”

Supply chain problems have been unfolding throughout the pandemic, as people radically shifted what they bought — canned beverages instead of fountain drinks, sweatpants instead of suits — toppling the normally efficient order of global supply chains.

Higher prices, at least temporarily, would bring supply and demand back into balance, a dynamic that the Fed — as the country’s inflation cop — has been watching closely. The central bank has argued that any price increases due to supply disruptions will only have a short-term effect on inflation data, and Chair Jerome Powell says the Fed won’t act to raise interest rates unless there is a more long-term, concerning shift upward in price levels.

“There’s a difference between essentially a one-time increase in prices and persistent inflation,” Powell said last week. “Inflation tends to be dictated by underlying inflation dynamics in the economy, as opposed to things like bottlenecks.”

Still, the Fed’s anecdotal analysis of different regions of the country, known as the “Beige Book,” this week showed that supply chain disruptions were cropping up in nearly every industry, the caveat to an otherwise optimistic outlook for the economy.

“This supply disruption is getting to the breaking point where we’re going to have to start raising prices, and we’re going to see inflation,” said Jim Bianco, head of financial analysis firm Bianco Research.

In the meantime, a key question is how markets will react as inflation rises, even if it’s only temporary. So far, the Fed has attributed gradual increases in yields on U.S. government debt to the brightening outlook for the economy, a scenario that should bode well for stocks as well as bonds, since faster growth is also positive for the long-term performance of corporations.

But if yields were to rise sharply because bond investors are spooked about inflation, that could lead the Fed to pull back its support for the economy sooner than expected, popping financial bubbles and hurting the latest record-breaking stock market rally.

“If rates are rising because real growth is causing a huge demand for credit — great,” Bianco said. “But if rates are going up because inflation is occurring, that is a problem for the stock market.”

The most high-profile supply problem is the global computer chip shortage, fed by a surge in demand for tech products as millions of people moved to work from home. That’s rippled out to hurt industries like auto manufacturing, with cars now so dependent on computerization.

Biden convened a group of CEOs to discuss the problem on Monday, and he said there is bipartisan support to boost funding for U.S. semiconductor manufacturing. His own infrastructure plan would set aside $50 billion for that purpose. But the results of that effort would take years to manifest and would do little to address the crunch in the near term.

Other shortages might be resolved more quickly, with mismatches driven more by the difficulty of advance planning in a situation that continues to be highly uncertain.

“It’s easier to turn the lights out at a plant than to ramp up,” said Diane Swonk, chief economist at Grant Thornton. “The rebound in goods in many cases was a surprise.”

The reopening of many restaurants, for example, has sparked a rise in purchases of single-serve ketchup packets, but there’s only so much capacity to produce those at once. And unless it’s clear that the higher level of demand is going to be sustained, companies might not want to invest in expanding their production capacity.

“If I were in the aluminum can business, I’d be reluctant to be ordering new machines until I knew what the fountain business looked like,” said Scott Miller, a senior adviser at the Center for Strategic and International Studies. “I’d be doing a lot of market research in Florida and Texas, where bars and restaurants are reopened, to determine how much of the shift is temporary and how much is permanent.”

The Dead Sea is dying. Drinking water is scarce. Jordan faces a climate crisis

The Dead Sea is dying. Drinking water is scarce. Jordan faces a climate crisis

Nabih Bulos                              April 15, 2021
GHOR HADITHA, JORDAN -- APRIL 10, 2021: A ground has sunk with the appearance of multiple sinkholes at the former grounds of the Numeira Salt company in Ghor Haditha, Jordan, Saturday April 10, 2021. The Dead Sea is shrinking at a rate of anywhere from 3 to 5 feet a year, and in the last three decades, the Dead SeaOs level has fallen almost 100 feet. The rate of loss is accelerating, as are the sinkholes; they now number in the thousands, like a rash spreading on the exposed seabed. (Marcus Yam / Los Angeles Times)
One of multiple sinkholes at the former grounds of the Numeira Salt company in Ghor Haditha, Jordan. The Dead Sea is shrinking at a rate of anywhere from 3 to 5 feet a year. (Marcus Yam / Los Angeles Times)

 

The first time people here saw a sinkhole, they thought a small asteroid had slammed into the Dead Sea’s salt-encrusted shore.

Then others appeared.

One swallowed the edge of a state-owned building. Another opened near a house and forced the family to move. Worried farmers scanned their fields and abandoned their harvests. At one point, a chunk of highway collapsed, disappearing several stories deep and leaving a lone PVC pipe that ran like a high-wire over the crater.

Finally, the residents of Ghor Haditha realized, the problem was literally beneath their feet, a symptom of the Dead Sea’s death and a disturbing measure of the parched land Jordan has become. This small kingdom has long ranked high on the list of water-poor countries. But a mix of a ballooning population, regional conflicts, chronic industrial and agricultural mismanagement and now climate change may soon bring it another distinction: the first nation to possibly lose viable sources of freshwater.

The sinkholes are a harbinger of a future in a Middle East precariously balanced on dwindling resources. With the Dead Sea — a lake, really — shrinking at a rate of 3 to 5 feet a year, its saltwater is replaced by freshwater, which rushes in and dissolves subterranean salt layers, some of them hundreds of feet below. Cavities form, and the soil collapses into subsurface voids, creating sinkholes.

In the last three decades, the Dead Sea’s level has fallen almost 100 feet. The rate of loss is accelerating, and sinkholes now number in the thousands, like a rash spreading on the exposed seabed.

“When I was younger, the water used to reach all the way up to that field,” said Hassan Kanazri, a 63-year-old tomato farmer, as he pointed to a spot some 300 yards away from the water’s edge. He stepped onto a patch of dark brown earth speckled with holes; the soft dirt gave way underfoot.

“We can’t use tractors here. The land is too weak, so we’ve had to plow manually,” he said.

Hassan Kanazri stands beside a sinkhole
Hassan Kanazri stands beside a sinkhole in Ghor Haditha, Jordan. (Marcus Yam / Los Angeles Times)

 

The sinkholes are a piece of a larger danger revealing how Jordan’s perennial thirst is worsening. A virtually landlocked desert kingdom with few resources, the country’s yearly decrease in rainfall could lead to a 30% reduction by 2100, according to Stanford University’s Jordan Water Project. Jordan’s aquifers, ancient groundwater reservoirs that take long to replenish, are being pumped at a furious pace, even as the pandemic has increased demand by 40%, the Water Ministry says. And precarious finances mean desalinization, which serves some of Jordan’s richer neighbors, is — for now — too expensive an option.

“The situation here is bleak,” says Water Ministry spokesman Omar Salameh. “Without a huge amount of support to execute development projects, Jordan doesn’t have the resources to provide water.”

To understand the crisis one need only take a drive on Highway 40, which stretches east from Amman toward the Iraqi border. With the capital in the rearview, you cross through to the Azraq wetlands — once a lush, water-filled stopover for migratory birds now decimated by over-reliance on an aquifer there — before you reach a vast expanse of desert. Some 92% of the country gets less than 200 millimeters — about 8 inches — of rainfall per year, with only nine countries in the world getting less annual precipitation than Jordan.

A sinkhole by the Dead Sea
A deep sinkhole along the salt-encrusted shoreline near Ghor Haditha. (Marcus Yam / Los Angeles Times)

 

Though Jordan is uniquely challenged, it’s a preview of what the region faces as a whole. Middle Eastern nations top the list of most water-stressed countries, the World Resources Institute says.

The region is also a “global hotspot of unsustainable water use,” according to 2017 World Bank report, and whatever water is available is further degraded by brine discharge from desalination, pollution and untreated wastewater. Poor water quality costs governments as much 2.5% of their gross domestic product.

Making matters worse are broiling summers, with the Max Planck Institute for Chemistry projecting average daytime temperatures to exceed 116 degrees Fahrenheit and reaching almost 90 by night. (And it’s not just estimates; the temperature in Mitribah, in northern Kuwait, reached 129 degrees in 2016.)

Rooftop water storage containers in Amman, Jordan.
Water storage containers cover rooftops in a dense neighborhood of Amman, Jordan. (Marcus Yam / Los Angeles Times)

 

Much of Jordan’s water problem is a simple matter of math: In the 1950s, its population numbered half a million people. Now there are more than 10 million, housed in a country whose water supply, researchers say, can’t sustain a population exceeding 2 million. Residents make do with 135 cubic meters, or about 36,000 gallons, of water per person per year; the U.N. defines “absolute scarcity” at 500 cubic meters per year.

That population explosion is less a result of Jordanians’ fertility than it is of the country’s reputation as a so-called oasis of stability in a not-so-stable neighborhood.

Palestinians pushed out by the creation of Israel in 1948 and the subsequent 1967 conflict; Lebanese escaping civil war in the ’80s; Iraqis fleeing U.S. bombardment and sanctions; more than a million Syrians after 2011, along with Yemenis and Libyans — if there’s a regional conflict, Jordan is probably hosting its refugees.

A 2016 census estimated the number of refugees at 2.9 million, and that’s including the approximately 1 million migrant workers in the country.

“The Syrian crisis alone raised demand for water an average of 20%,” Salameh says. It’s double that amount in northern areas of the kingdom, where most of the refugees reside, he adds.

It’s little better on the supply side, where Jordan has to contend with the tyranny of geography.

Go north from Ghor Haditha, past the baptismal site of Jesus Christ on the Jordan River (now reduced to a sewage-contaminated trickle in some parts); continue east along its main tributary, the Yarmouk River, where Lawrence of Arabia once tried and failed to blow up an Ottoman railroad, and you encounter the Al Wehda Dam, a 360-foot concrete embankment on Jordan’s border with Syria.

Jordan's Al Wehda Dam
The Al Wehda Dam, a 360-foot concrete embankment, near Harta, Jordan. (Marcus Yam / Los Angeles Times)

 

Its capacity of 110 million cubic meters makes it Jordan’s largest dam, a reliable source of more than a third of the country’s water supply. But it’s never been more than half full. That’s because Syria, which controls the Yarmouk River’s flow into Jordan, has built upstream more than 40 dams and thousands of wells to irrigate its own crops, leaving Jordan with only a fifth of its share.

A river is full of green algae
Green algae in the Yarmouk River, which flows to the Al Wehda Dam. (Marcus Yam / Los Angeles Times)

 

“We were supposed to expand the dam and build a hydroelectric plant. The plan was we would get water, and the Syrians would get power,” said Munther Maayeh, one of the dam’s managers. “But the water we receive from the Syrians isn’t anywhere near enough for that.”

Israel too has diverted some 600 million cubic meters of water in the Sea of Galilee — another lake — from the Jordan River. The result has been a 90% plunge in the river’s flow to a paltry 200 million cubic meters per year. (Under the 1994 peace agreement, Israel regularly conducts transfers of water from the Jordan River to the kingdom.)

To make up the shortfall, Jordan increasingly turned to nonrenewable water sources such as aquifers. Jordan has 12 of them, but is already pumping 160% more than it should for them to be replenished; 10 are all but depleted.

The low supply coupled with burgeoning demand has forced the government to ration water delivery. In practical terms, that means most homes don’t get municipal water more than once a week. Many residents turn to illegal drilling of wells, Salameh says.

On the outskirts of Amman, water tank trucks back up to a communal well equipped with 9-foot-high faucets. Raafat Awamleh, a driver with his 8-year-old son, Shahem, by his side, climbed up the side of his truck, slipped a rubber hose over one of the faucets and placed the other end into his tank.

“People call us from all over Amman to deliver water,” Awamleh said, adding that the area had some six similarly equipped communal wells. The coronavirus cut a portion of his business, including water deliveries to farmers, but he expected work to pick up soon.

“In the summer we have to do this all the time,” he said. “It just gets too hot and people need water.”

Jordan’s internal topography plays a role as well. More than half of Amman’s water supply, for example, comes from the Al Disi aquifer, some 200 miles south. Another portion is taken from the Azraq aquifer, 50 miles east.

Shahem Awamleh and his father fill a water tank truck.
Shahem Awamleh reacts as he and his father fill a water tank truck at a community well near Amman, Jordan. (Marcus Yam / Los Angeles Times)

 

“That’s a huge expense on the state treasury,” Salameh says, estimating the cost at $4 per cubic meter from aquifer to tap. Power requirements for pumping water amount to more than a sixth of the country’s total power production, the government says.

The failure of Jordan’s water management is increasingly apparent, says Raed Dawood, founder and head of Eco Consult, a water-use consulting firm. Rickety infrastructure means more than half of the water leaks out of pipes or is stolen. State subsidies for agriculture, a sector that consumes slightly more than 50% of Jordan’s water supply while contributing only 3% to 4% to its GDP, give farmers little incentive to use new — and expensive — irrigation techniques or choose crops that are more profitable.

“Water productivity here is about $1.50 per cubic meter. It’s $100 in the Netherlands,” Dawood says, adding that Jordan’s top crops are tomatoes and cucumbers, low-profit plants that consume a lot of water.

To make a point, he walks out of his office and returns with a plate of dates. They were plump, with a singed caramel-colored skin. The variety is known as Medjool and the kingdom is famous for them, Dawood says. This kind of crop, he adds, could more than quadruple the value farmers get out of their water.

A man shows Medjool dates
Hamzah Rashaydeh inspects a stem from date fruit clumps at Tadros Farm. (Marcus Yam / Los Angeles Times)

“We have to be selective and careful in what we grow,” he says.

“All these things are matters of policy, and yes, we’re a scarce-water country, but we have to use it effectively.”

A farmworker trims a date tree.
A farmworker prepares to trim a date tree at Tadros Farm in Karamah, Jordan. (Marcus Yam / Los Angeles Times)

 

Back in Ghor Haditha, increasing industrialization, much of it centered around the Arab Potash Co., is exacerbating the water problem. The company, along with its Israeli counterpart, pumps Dead Sea water to extract minerals, adding to the sea’s retreat and compounding sinkhole formation, says William Ajalin, a resident and head of a local environmental association.

On the rooftop balcony of the association’s building, he points to the main highway bisecting Ghor Haditha: On one side lies the Dead Sea, the foot of the Karak mountains on the other.

“People are already too afraid to do anything on the side by the Dead Sea,” he says.

“Of course we’re worried this is making it worse.”

But a change of behavior, including better conservation, would have to go beyond villages like Ghor Haditha to cities, especially Amman, says Ammar Khammash, an architect who specializes in eco-friendly projects.

“We cannot continue like we did in the ’70s and ’80s. All the water of Azraq, we flushed it down the toilets of Amman,” he says. The solution, he says, is to incorporate water storage capacity in every building.

“Governments like big projects, but the solution involves smaller pieces: A place like Amman needs to become a ‘sponge city’ where every house doesn’t waste a single drop.”

A man picnics by the Dead Sea.
Nabeel Musa smokes as he picnics along the salt-encrusted shore near Ghor Haditha. (Marcus Yam / Los Angeles Times)

 

For now, the government is exploring other venues, such as Red to Dead, a joint project with Israel and the Palestinian Authority. It aims to build a desalination plant in Aqaba, Jordan’s sole outlet on the Red Sea, and dump the briny water to replenish the Dead Sea. The project has been on the books since 2005 without much progress.

In any case, relations between Jordan and Israel have reached a nadir, with diplomatic spats flaring over the last year between Israeli Prime Minister Benjamin Netanyahu and King Abdullah II. The last such incident was resolved Monday when Netanyahu approved Amman’s request for extra water rations from the Jordan River, almost a month after the Jordanian government asked for it. (The peace agreement allows for Jordan to request additional water supplies.)

That has forced the kingdom to look inward, conducting deep-water exploration of desert areas and drilling wells more than a mile deep. Those efforts are expected to yield 70 million cubic meters of water by the project’s end. It’s expensive, but essential at a time when the kingdom’s relations with its neighbors over water remain a challenge.

“You can’t predict what the political situation is going to be,” Salameh says.

“As long as there is no horizon for peace in the area, Jordan will remain vulnerable to the challenges imposed on it by its situation with water.”

(This is the second in a series of occasional articles about how climate change and water scarcity are affecting the politics and landscape of the Middle East.)

No community should suffer this’: Florida’s toxic breach was decades in the making

‘No community should suffer this’: Florida’s toxic breach was decades in the making

Paola Rosa-Aquino                               April 11, 2021

It’s been a week since a significant leak at a long-abandoned fertilizer plant in the Tampa Bay area threatened the surrounding groundwater, soil, and local water supplies.

Last weekend, officials ordered more than 300 families living near the 676-acre Piney Point plant site in Manatee county to evacuate. The sheriff even emptied out his jail’s first floor of inmates in case a “20-foot wall of water” came rolling their way.

By Monday, local officials said they thought the crisis had been averted; they lifted evacuation orders on Tuesday afternoon. But what they meant was that imminent catastrophe had been postponed. The long-term, slow-moving crisis of toxicity, decades in the making, remains – and is echoed at dozens of radioactive ponds across the state.

“We’re nowhere near out of the woods yet on this – there’s a long way to go,” says Glen Compton of ManaSota-88, an environmental non-profit that has been urging officials for decades to do something about the industrial waste pile.

Piney Point has a long history of polluting the water and air around it, dating to when the plant was built in 1966, Compton says. Just two years later, in 1968, Compton founded ManaSota-88 to oppose the site’s phosphate mining. (“The 88 stood for 1988 because we were supposed to solve all the problems within 20 years,” Compton says. “So now, the 88 stands for 2088.”)

Effluent spews from a pipe into a ditch at Port Manatee, where a breach in a nearby wastewater reservoir on the site of a defunct phosphate plant forced an evacuation order.
Effluent spews from a pipe into a ditch at Port Manatee, where a breach in a nearby wastewater reservoir on the site of a defunct phosphate plant forced an evacuation order. Photograph: Octavio Jones/Reuters

 

Within a year of Piney Point being built, its original owners – a subsidiary of Borden, the glue and milk company – were caught dumping waste into nearby Bishop Harbor, a marine estuary that flows into Tampa Bay. The plant repeatedly changed hands throughout the years, all the while continuing causing numerous human health and environmental disasters and incidents.

In 1989, for instance, a 23,000-gallon leak of sulfuric acid from a holding tank forced the evacuation of hundreds of people.

After the owner went bankrupt, the Piney Point fertilizer plant was shut down in 2001. But the waste from more than three decades of phosphate mining still sits in massive piles at the site – the environmental equivalent of a ticking time bomb. An intense storm could easily send overflow, for instance.

Before phosphate can be used to help crops grow in fertilizer, it goes through a polluting chemical process. Phosphate ore mined from the soil is treated to create phosphoric acid – a main component of fertilizer. Phosphogypsum is the radioactive waste left over. For every ton of desirable phosphoric acid produced for fertilizer, more than five tons of phosphogypsum waste remains.

The fertilizer industry that produced that waste then dumps it in large piles known as “gyp stacks” – mountains hundreds of feet tall and hundreds of acres wide. And at the top of these mountains are huge lagoons, containing hundreds of millions of gallons of wastewater that is highly acidic and radioactive with heavy metal contaminants. A breach at another stack in the state after a 2004 hurricane led to millions of gallons of polluted water being spilled into Tampa Bay.

This toxic industry has plagued the state for decades. Central Florida is the phosphate capital of the world; the state produces 80% of the phosphate mined in the US, as well 25% of the phosphate used around the world. An estimated 1 billion tons of phosphogypsum is housed in about two dozen stacks that dot the Florida landscape, some looming as high as 200ft, each with its own pond of acidic wastewater on top. And every year, about 30m more tons are added to them.

“Florida can’t keep ignoring the catastrophic risks of phosphate mining and its toxic waste products,” says Jaclyn Lopez, Florida director at the Center for Biological Diversity. “No community should have to suffer the consequence of this toxic legacy for some corporation’s short-term financial gain.”

According to Compton, what happens at Piney Point sets a precedent in Florida regarding industrial waste from phosphate mining. “Everything that can go wrong has gone wrong here,” he says.

A view of a wastewater holding pond in Piney Point, Florida, in October.
A view of a wastewater holding pond in Piney Point, Florida, in October. Photograph: Satellite image ©2021 Maxar Tech/AFP/Getty Images

 

About 223 million gallons remained in the leaking pond at Piney Point on Friday, according to the Florida department of environmental regulation; so far, about 215m gallons of wastewater have been pumped into Tampa Bay. Still, environmental advocates fear how the plant’s toxic stew might affect water quality: on Wednesday, the state agency said there were elevated levels of phosphorous detected where wastewater was being discharged.

Two additional stacks with wastewater containment ponds remain at Piney Point, and officials fear an unaddressed breach could lead to a sudden rush of water out of the other two stacks, which are more toxic and acidic. If that were to happen, Compton says, “we’d expect to see major impacts to Bishop Harbor, which is one of the prettiest places in the state of Florida”.

Should either of those stacks fail, he adds, the harbor “would be totally annihilated. It is really not too strong a term to use.” The nutrient-laden water could fuel algae blooms, endangering already vulnerable marine life.

At the end of Wednesday, with pumps still gushing out millions of gallons of wastewater, state senators passed an amendment that would allocate $3 million – what appears to be the first tranche of funds in a $200m plan to close and clean up the site – to dispose of the wastewater.

Compton says the plan entails building a well injection in order to get rid of the wastewater – an idea facing opposition from surrounding residents, national organizations, and anybody who has an interest in agriculture in the area. “When you put wastewater into the ground, you really have no idea where it goes next. There’s no 100% foolproof way to monitor which way the aquifer flows and where it ultimately ends up.”

The Piney Point site is shaping up to be a costly environmental catastrophe, and Compton thinks the fertilizer industry should be accountable for disposing of its waste, rather than passing the cost on to taxpayers. But even with talks of the fertilizer plant’s cleanup and closure on the horizon, he’s not optimistic the threat of pollution from its wastewater will soon disappear.

“There’s a local saying that if you go to a Manatee county commission meeting 50 years from now, there’s two things that’ll be on the agenda: sewage spills and Piney Point,” Compton adds. “This isn’t going away anytime soon.”

NC pastor: People are leaving church — because of churches

NC pastor: People are leaving church — because of churches

Kate Murphy                  

The author is pastor of The Grove Presbyterian Church in Charlotte.

Earlier this week Gallup released polling data showing that less than 50% of Americans report belonging to a faith community. Back in 1970, when Gallup first began tracking this data, more than 70% of Americans belonged to religious communities. As a pastor, when I heard this news, I thought of a little known passage in the 10th chapter of the book of Ezekiel when the prophet watches in horror as the Glory of God leaves the temple.

 

That’s not the standard response to news like this. The party line is to blame “this generation” for being less faithful, or “the media” for corrupting hearts or “the government” for taking prayer out of school. Once we’ve finished blaming those outside our communities, we turn to those inside and pressure them to give more, work more, sacrifice more to reverse the trend. But I don’t think any of that is a faithful response.

Because, while church membership is declining, people are still as hungry for the things of God as they ever have been. People are still seeking justice, forgiveness, hope, love and belonging. People are still desperate for mercy, for meaning, for second chances. People are still seeking the Holy, and the Holy One is still seeking people. So the problem isn’t with those outside the church, and it certainly isn’t with God. The problem — and it is a problem — is with us. The problem is that most of the church in America looks more like America than the body of Christ.

The church makes the news for all the wrong reasons — seminary leaders who passionately denounce Critical Race Theory but are silent about the white supremacy that forms their curriculum and institutions. Pastors who care more about not being called racist than learning how to meaningfully participate in racial reconciliation. Christians who care more about defending their right to buy a weapon than advocating to end police brutality.

Jesus — whose parents had to flee to a foreign country to save his life — has followers who advocate to close the borders to desperate refugees. Christians shouldn’t be outraged about 666 pairs of so-called ‘Satan Shoes’ but completely resigned to voter disenfranchisement, the school-to-prison pipeline, the resegregation of public schools, the opioid crisis or the epidemic of mass shootings. And speaking of Little Nas X, believers should be horrified by his ‘Call Me By Your Name’ video — not because of the raunchy imagery but because we managed to convince a young boy that he was more likely to find love in Hell than inside the body of Christ.

I love the church. But I love Jesus more, and the church has done a terrible job being faithful to the way of Jesus. When we who love the church see these numbers, we shouldn’t kid ourselves. People aren’t rejecting Jesus — they are turning away from churches that represent him badly. Churches that are full of programs instead of prayer, full of doctrine but empty of mercy. Turning away from church that lies is the first step towards the truth.

Which brings me back to the prophet Ezekiel — who was called by God to prophesy judgment, not against outsiders, but against the egregious unfaithfulness of his fellow believers. In Ezekiel’s day, people loved the rituals of worship more than the God they worshiped, people loved their religious identity more than the shalom of God. And so, in anguish, God leaves their sacred building behind. But God never abandoned the people.

On the cross, Jesus cried out “it is finished.” Injustice is finished, greed and poverty are finished, hatred is finished, violence, enmity and alienation are finished. All of those old powers are condemned and crucified. On the cross, the righteousness of God’s self-giving love was unleashed to infect all the earth with holiness. Resurrection life has come. And the church, the true body of Christ full of his Spirit–the multi-ethnic, multi-lingual, multi-generational, full of love, generosity, healing, transformation, forgiveness, joy and mutual flourishing, real church welcomes all.

Local congregations may or may not be about the new thing God is doing. When they are — they are irresistible. When they are not, well, God may leave our buildings — but God will not stop being God.

What the church needs is not more members, but more Jesus — not revival but repentance. What we should fear is not people who refuse to belong to churches, but churches who refuse to belong to Jesus.

Letters to the editor will return Wednesday.

Yellen pushes minimum corporate taxes, ending fossil fuel breaks, to pay for infrastructure

Yellen pushes minimum corporate taxes, ending fossil fuel breaks, to pay for infrastructure

David Lawder                     April 7, 2021

 

WASHINGTON, April 7 (Reuters) – U.S. Treasury Secretary Janet Yellen on Wednesday fleshed out the details of a corporate tax hike plan linked to President Joe Biden’s infrastructure investment proposal, aiming to raise $2.5 trillion in new revenues over 15 years by deterring tax avoidance.

Yellen’s plan relies on negotiating a 21% global minimum corporate tax rate with major economies and a separate 15% minimum tax on ‘booked’ income aimed at the largest U.S. corporations. Dozens of big U.S. companies have used complex tax strategies to reduce their federal tax liabilities to zero.

Yellen said that promised boosts in U.S. capital investment by corporations and turbocharged growth failed to materialize after Republican tax legislation in 2017 cut the corporate rate to 21% from 35%.

Instead, the Trump-era cuts halved U.S. corporate tax collections as a share of economic output to 1% from its long-term 2% average, according to data from the Organization for Economic Cooperation and Development. The average for the 37 OECD member countries is 3.1%.

“Our tax revenues are already at their lowest level in a generation. And as they continue to drop lower we will have less money to invest in roads, bridges, broadband and R&D,” Yellen said.

The bulk of U.S. tax collections https://www.reuters.com/article/us-usa-trump-taxes-revenue-explainer/explainer-the-4-trillion-u-s-government-relies-on-individual-taxpayers-idUSKBN26J30F are deducted from the regular paychecks of individual wage earners, but Biden has pledged not to raise any taxes on Americans earning less than $400,000 a year.

The Treasury plan seeks to end provisions in the 2017 tax cuts that Democrats say provide continued incentives for companies to shift investments, intellectual property and profits to lower-tax countries.

Its biggest target is revamping the 2017 tax act’s first stab at a minimum tax, the 10.5% Global Intangible Low-Taxed Income tax (GILTI). Treasury would eliminate a U.S. deduction for the first 10% of income from foreign assets and raise the GILTI minimum rate to 21%.

GILTI, which acts as a kind of “top-up” tax to offset lower rates in other countries, would be applied on a country-by-country basis, rather than a global average rate, which Democrats say encourages some use of tax havens. This change alone could raise $500 billion in revenue over a decade, Treasury said.

Treasury would also replace a separate 10% Base Erosion and Anti-abuse Tax (BEAT), aimed at preventing shifting profits to entities in tax havens, with a new 21% tax that aims to deny deductions on income from countries that do not agree to a global minimum tax. It is rebranding this as the SHIELD tax, for “Stopping Harmful Inversions and Ending Low-Tax Developments.”

A Treasury official told reporters that this new tax would act as an incentive for countries to agree to a global minimum tax by denying companies the benefits of using tax havens.

FOSSIL FUEL BREAKS

The Treasury plan also would eliminate a range of tax breaks for the fossil fuel industry, a move it said would raise revenues by $35 billion over 10 years. It will replace these with new clean energy tax incentives including for electric vehicles and efficient electric appliances.

Treasury also is proposing a new 15% alternative minimum tax for large corporations, based on booked income reported to shareholders, to ensure that they cannot use complex tax avoidance schemes to pay no taxes.

Treasury said it estimates that some 45 corporations would have seen an average $300 million additional annual tax liability under the proposed minimum, raising some $13.5 billion in new revenues.

(Reporting by David Lawder, David Shepardson, Jarrett Renshaw and Tim Gardner; Editing by Heather Timmons, Andrea Ricci and Chizu Nomiyama)

‘Allergic reaction to US religious right’ fueling decline of religion, experts say

‘Allergic reaction to US religious right’ fueling decline of religion, experts say

Adam Gabbatt                            April 5, 2021
<span>Photograph: Evan Vucci/AP</span>
Photograph: Evan Vucci/AP

 

Fewer than half of Americans belong to a house of worship, a new stud shows, but religion – and Christianity in particular – continues to have an outsize influence in US politics, especially because it is declining faster among Democrats than Republicans.

Just 47% of the US population are members of a church, mosque or synagogue, according to a survey by Gallup, down from 70% two decades ago – in part a result of millennials turning away from religion but also, experts say, a reaction to the swirling mix of rightwing politics and Christianity pursued by the Republican party.

The evidence comes as Republicans in some states have pursued extreme “Christian nationalist” policies, attempting to force their version of Christianity on an increasingly uninterested public.

This week the governor of Arkansas signed a law allowing doctors to refuse to treat LGBTQ people on religious grounds, and other states are exploring similar legislation.

Gallup began asking Americans about their church membership in 1937 – and for decades the number was always above 70%. That began to change in 2000, and the number has steadily dropped ever since.

Some of the decline is attributable to changing generations, with about 66% of people born before 1946 are still members of a church, compared with just 36% of millennials.

Among other groups Gallup reported, the decline in church membership stands out among self-identified Democrats and independents. The number of Democratic church members dropped by 25% over the 20-year period, with independents decreasing by 18%. Republican church members declined too, but only by 12%.

David Campbell, professor and chair of the University of Notre Dame’s political science department and co-author of American Grace: How Religion Divides and Unites Us, said a reason for the decline among those groups is political – an “allergic reaction to the religious right”.

“Many Americans – especially young people – see religion as bound up with political conservatism, and the Republican party specifically,” Campbell said.

“Since that is not their party, or their politics, they do not want to identify as being religious. Young people are especially allergic to the perception that many – but by no means all – American religions are hostile to LGBTQ rights.”

Research by Campbell shows that a growing number of Americans have turned away from religion as politicians – particularly Republicans – have mixed religion with their politics. Campbell says there has always been an ebb and flow in American adherence to religion, but he thinks the current decline is likely to continue.

“I see no sign that the religious right, and Christian nationalism, is fading. Which in turn suggests that the allergic reaction will continue to be seen – and thus more and more Americans will turn away from religion,” he said.

The number of people who identify as non-religious has grown steadily in recent decades, according to Michele Margolis, associate professor of political science at the University of Pennsylvania and author of From Politics to the Pews. More than 20% of all Americans are classed as “nones”, Margolis said, and more than a third of Americans under 30.

“That means non-identification is going to continue becoming a larger share of population over time as cohort replacement continues to occur,” Margolis said. But she agreed another factor is the rightwing’s infusion of politics with theism.

“As religion has been closed linked with conservative politics, we’ve had Democrats opting out of organized religion, or being less involved, and Republicans opting in,” she said.

Christian nationalists – who believe America was established as, and should remain, a Christian country – have pushed a range of measures to thrust their version of religion into American life.

You virtually have to wear religion on your sleeve in order to be elected

Annie Laurie Gaylor

In states including Louisiana, Arkansas and Florida, Republicans have introduced legislation which would variously hack away at LGTBQ rights, reproductive rights, challenge the ability of couples to adopt children, and see religion forced into classrooms.

The governor of Arkansas recently signed into law a bill that allows medical workers to refuse to treat LGBTQ people on religious grounds. Montana is set to pass a law which would allow people or businesses to discriminate, based on religion, against the LGBTQ community.

“Do not make me NOT do what my God tells me I have to do,” said the Republican Montana congressman John Fuller, a supporter of the law.

Alison Gill, vice-president for legal and policy at American Atheists, who authored a report into the creep of Christian extremism in the US, warned that the drop-off in religious adherence in America could actually accelerate that effort, rather than slow it down.

“Surveys of those who identify with Christian nationalist beliefs consistently show that this group feels that they are subject to more discrimination and marginalization than any other group in society, including Islamic people, Black people, atheists, [and] Jewish people,” Gill said.

“They are experiencing their loss of prominence in American culture as an unacceptable attack on their beliefs – and this is driving much of the efforts we are seeing to cling on to power, undermine democracy, and fight for ‘religious freedom’ protections that apply only to them.”

The influence of religion over politics is stark, Gill said.

“America perceives itself to be a predominantly religious society, even if the facts no longer agree. Politicians often feel beholden to pronounce their religious faith – and are attacked for a perceived lack of it,” she said.

While the danger of a rightwing backlash is real, Annie Laurie Gaylor, co-founder of the Freedom From Religion Foundation, said that the Gallup data suggests the US is moving in a positive direction.

“We have this constitutional separation of church and state in America, and our constitution is godless, and it says you can’t have a religious test for public office, and yet you virtually have to wear religion on your sleeve in order to be elected,” Gaylor said.

“There is movement [away from religion], and we’re just delighted to see this. We think it’s great that Americans are finally waking up.”

Florida county fears “imminent” reservoir collapse

Florida county fears “imminent” reservoir collapse

Li Cohen                  April 4, 2021

 

Some residents in Manatee County, Florida, were evacuated from their homes over Easter weekend as officials cited fears that a wastewater pond could collapse “at any time.” Florida Governor Ron DeSantis declared a state of emergency for the area on Saturday.

 

County officials said the pond, located at the former Piney Point phosphate processing plant, has a “significant leak,” according to CBS affiliate WTSP-TV. The Manatee County Public Safety Department told people near the plant to evacuate due to an “imminent uncontrolled release of wastewater.”

“A portion of the containment wall at the leak site shifted laterally,” said Manatee Director of Public Safety Jake Saur, “signifying that structural collapse could occur at any time.”

Manatee County Public Safety Department initially sent out emergency evacuation notices on Friday for those who were within half a mile of Piney Point, and by 11 a.m. Saturday, evacuation orders were extended to people within one mile north of the reservoir’s stacks of phosphogypsum — a fertilizer waste product — and those within half a mile to the south of the site. Surrounding stretches of highway were also closed to traffic.

Related: Bacteria on Florida beaches proves deadly

Mandatory evacuations were extended an additional half mile west and one mile southwest of the site on Saturday evening. Manatee County Public Safety Department said that 316 households are within the full evacuation area.

The closure of U.S. 41 will be expanded south from Buckeye Road to Moccasin Wallow Road. Moccasin Wallow Road will be closed west of 38th Avenue East. There are an estimated 316 households in the evacuation area. Those households will all receive an emergency alert to evacuate.

Phosphogypsum is the “radioactive waste” left over from processing phosophate ore into a state that can be used for fertilizer, according to the Center for Biological Diversity.

“In addition to high concentrations of radioactive materials, phosphogypsum and processed wastewater can also contain carcinogens and heavy toxic metals,” the Center said in a statement on Saturday. “For every ton of phosphoric acid produced, the fertilizer industry creates 5 tons of radioactive phosphogypsum waste, which is stored in mountainous stacks hundreds of acres wide and hundreds of feet tall.”

Manatee County Commissioner Vanessa Baugh said in a statement Saturday that the “public must heed that notice to avoid harm.”

Officials are on site conducting a controlled release of water, roughly 22,000 gallons a minute.

The water that is currently being pumped out by officials in order to avoid a full collapse is a mix of sea water from a local dredge project, storm water and rain runoff. The water has not been treated.

“The water meets water quality standards for marine waters with the exception of pH, total phosphorus, total nitrogen and total ammonia nitrogen,” the state said in a statement. “It is slightly acidic, but not at a level that is expected to be a concern, nor is it expected to be toxic.”

Florida Commissioner of Agriculture Nikki Fried wrote a letter to DeSantis on Saturday urging an emergency session of the Florida cabinet to discuss the situation. She wrote that the leaking water is “contaminated, radioactive wastewater,” and noted that this leak is not the property’s first.

“For more than fifty years, this Central Florida mining operation has caused numerous human health and environmental disasters and incidents,” Fried wrote. “There have been numerous, well-documented failures — which continue today — of the property’s reservoir liner, including leaks, poor welds, holes, cracks and weaknesses that existed prior to purchase by the current owner, HRK Holdings, and exacerbated since.”

Video of a Manatee County Commissioners meeting provided insight into what happened prior to the leak. On Thursday afternoon, Jeff Barath, a representative for HRK Holdings, the company that owns the site, appeared emotionally distressed while briefing the Manatee County Commissioners about the situation.

“I’m very sorry,” he said. He told commissioners he had only slept a few hours that week because he was trying to fix the situation, and through tears, said he first noticed “increased conductivities within the site’s seepage collection system” 10 days prior on March 22. This system, he said, offers drainage around the gypsum stacks.

He said he immediately notified FDEP of his concerns.

“The water was changing around the seepage. We went into a very aggressive monitoring program,” he said, to find out where the seepage was coming from.

They discovered the south side of the stack system had “increased in conductivity” and that the acidity of the water, which is normally around a 4.6, had dropped to about a 3.5, which indicated an issue.

After a few days, the water chemistry had not improved and water flows were increasing from about 120 gallons a minute to more than 400 gallons per minute in less than 48 hours, Barath said. Last Saturday night, the flow rates increased to “rates that I could not even estimate to you,” he said.

Water was filling the stacks so quickly that the ground was starting to rise, Barath said. This “bulging” was temporarily stabilized but then extended hundreds of feet.

Barath submitted a report to the state on March 26, according to the state-run “Protecting Florida Together,” website, which was created by DeSantis to allow more transparency about state water issues.

“I was anticipating that the gypstack itself was destabilizing at a very rapid rate and recommended that we consider an emergency discharge,” he told commissioners. He said he feared that “overpressurizing” the system would result in “complete failure.”

“I’ve spent most of my days and nights constantly monitoring all aspects of this gypstack system and identifying failure points within it,” he said, noting that failure points were happening “constantly, I mean hourly.”

The Florida Department of Environmental Protection said that it ordered the company to “take immediate action” to prevent further leaks. On March 30, the department said that “pipes at the facility are repaired” and controlled discharges were initiated to prevent any pressure buildup.

However, based on Barath’s testimony at the meeting, the situation was far from over. He concluded his address by saying they were doing “everything possible to prevent a true catastrophe.”

On Friday, another leak was detected in the south containment area of the facility. Despite overnight work to attempt to stop this and other leaks, Manatee Director of Public Safety Jake Saur said on Saturday that the situation was “escalating.”