Embattled Navajo coal plant is a preview of what’s ahead as coal declines across the U.S.

ThinkProgress

Embattled Navajo coal plant is a preview of what’s ahead as coal declines across the U.S.

“It tied us to those jobs and didn’t allow us to diversify.”

Nexus Media          November 6, 2017

https://i0.wp.com/thinkprogress.org/wp-content/uploads/2017/11/navajo_generating_station_from_the_south_with_lake_powell.jpg?resize=1280%2C720px&ssl=1Navajo Generating Station, Arizona. CREDIT: Wolfgang Moroder

By Jeremy Deaton

It looks like it doesn’t belong there. The lonely, aging power plant stands out against the red desert, connected to the nearest town by a single, crumbling road. It will soon become an artifact, a relic from when coal was king.

If the Navajo Generating Station (NGS) closes — as it is set to do in 2019 — it will leave the local communities with 800 fewer jobs and a massive dent in revenue. But opponents to the plant say the cost to human health has been too high, and it’s time to turn to alternative sources of energy and jobs.

The plant is facing a future familiar to many coal-fired power plants, struggling to compete with smaller, more nimble natural gas-fired generators, wind farms, and solar arrays.

“You know the old saying, ‘You make money if you buy low and sell high’? They’re buying high and selling lower,” said David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis (IEEFA).

If the Navajo Generating Station shuts down, locals will lose some 800 jobs, both at the plant and in the nearby Kayenta mine, which supplies coal to the generating station. Facing unemployment rates upwards of 40 percent, the Navajo and Hopi tribes are eager to protect those jobs, to say nothing of the revenue the operation provides.

“The Navajo Nation is so dependent on the jobs and the revenue for their budget. It’s really sad because, looking forward, it just doesn’t seem to be a sustainable economic enterprise,” Schlissel said. “I have no idea who would put their money here.”

https://i0.wp.com/thinkprogress.org/wp-content/uploads/2017/11/nav2.jpg?w=800&crop=0%2C0px%2C100%2C588px&ssl=1Credit: Stephanie Smith, Grand Canyon Trust

Some, however, are happy to see the plant and the mine close down. While the operation is the cornerstone of the local economy, it is also a symbol of exploitation. Built on sacred land and without the consent of traditional leaders, the operation has better served its corporate owners than the tribes themselves. Thanks to a one-sided lease brokered by the federal government, for decades the Navajo and Hopi tribes received pennies on the dollar for every ton of coal mined.

Critics of the plant see its closure as an opportunity to create new businesses owned and operated by Native Americans in tourism, agriculture, and energy. Experts believe the tribes could repurpose much of the existing infrastructure associated with the Navajo Generating Station — including power lines to populations centers — to support new solar and wind projects. The transition to renewable energy sources would be difficult, but it could breathe life into the community.

In many ways, the embattled plant is a microcosm of a story unfolding across the country. As coal loses ground to natural gas and renewable energy, coal miners and plant operators are looking to the Trump administration to keep them afloat. But there is only so much policymakers can do. The Navajo Generating Station offers a preview of what’s to come.

https://i2.wp.com/thinkprogress.org/wp-content/uploads/2017/11/nav3.jpeg?w=800&crop=0%2C0px%2C100%2C519px&ssl=1The Navajo Generating Station as viewed from above. CREDIT: Ken Lund

The rise and fall of the Navajo Generating Station

The story of the Navajo Generating Station dates back to the late 19th century, when government surveyors discovered expansive reserves of copper on land inhabited by Hopis, Navajos, and a handful of Mormon settlers. As Judith Nies explains in Unreal City, a history of coal power in the Southwest, President Chester A. Arthur worried that Mormons would snatch up the mineral-rich land at a time when demand for coal was on the rise.

In 1882, Thomas Edison flipped the switch on the world’s first commercial coal-fired power plant, and it was clear that the electrification of the United States would drive up demand for coal. That same year, Arthur signed an executive order creating an Indian reservation that spanned a large swath of Arizona coal deposits. The president’s order would keep coal reserves out of the hands of Mormon settlers, giving the federal government the opportunity to exploit those resources at a future date.

That day came nearly a century later, as the rapid growth of Los Angeles, Las Vegas, and other cities in the Southwest spurred investments in coal power. In 1966, Navajo and Hopi leaders signed a lease allowing coal giant Peabody Energy to mine 40,000 of acres of their reservation. The lawyer who represented the Hopi tribe also represented Peabody, and he did much better work for the coal company than he did for the Native Americans.

The Peabody lease “violated every guideline that the Department of Interior had set up for leasing on public lands: no competitive bidding, no automatic renegotiation clauses, a fixed rate rather than a percentage royalty rate,” Nies writes. At that time, the royalty rate on federal lands was $1.50 per ton of coal, but under the terms of the lease, the Hopi and Navajo tribes would earn just 37 cents on each ton of coal mined. Hopi leaders decried the lease as “arbitrary, capricious, an abuse of discretion.”

https://i0.wp.com/thinkprogress.org/wp-content/uploads/2017/11/1-gwhq-imladlinn9mib9veq1.jpeg?w=1280&crop=0%2C0px%2C100%2C744px&ssl=1The Kayenta Mine. CREDIT: Doc Searls

The deal was a giveaway to Peabody, but Nies writes the lease was “about more than money. It was about growth — the power to pump water into Phoenix, air-conditioning to Los Angeles, and the electricity to light the giant casinos and cool thousands of homes in Las Vegas as the population doubled and then tripled every year.” All of it depended on a steady supply of cheap electricity.

In 1973, Peabody began operations at the Kayenta mine. Three years later, the Navajo Generating Station came online, delivering power to customers across the Southwest. The tribe mined coal, exported electricity, and raised revenues, but the biggest winners were Peabody energy and the power utilities that owned the plant. “The Navajo Nation really didn’t get its fair share out of those operations,” said Brett Isaac, a Navajo solar entrepreneur. “It tied us to those jobs and didn’t allow us to diversify.”

Now, with the plant set to close, workers are worried about how they will make ends meet. “A lot of the miners and plant operators, they are pretty much lifelong employees of that operation,” Isaac said. “I have an uncle who has worked at the Peabody mine since right out of high school. The next week after graduation he started working at the mine. He’s never had to apply for a job.”

Until recently, coal was the country’s cheapest and most abundant source of power, and utilities relied on large facilities like the Navajo Generating Station to provide reliable electricity. In recent years, however, coal has lost ground to other power sources. Wind and solar are growing cheaper by the day, while advances in hydraulic fracturing have made natural gas more affordable than coal. Small, gas-fired power plants can ramp up and down more quickly than large, coal plants, allowing them to track consumer demand more closely.

https://i1.wp.com/thinkprogress.org/wp-content/uploads/2017/11/nav4.jpg?w=574&crop=0%2C0px%2C100%2C284px&ssl=1Natural gas has overtaken coal as the largest source of electricity in the United States. Coal production is expected to continue its long decline. Credit: Energy Information Administration

“All of the major utilities in the region, who are already co-owners of the plant, have decided for economic reasons that it’s cheaper for them to produce their own power or buy power from gas and renewables,” said Roger Clark, a program director at the Grand Canyon Trust, a conservation group based in Arizona.

“The outlook has gotten dimmer and dimmer as the years have past,” Isaac said. “We knew we would have to diversify, but we didn’t think it would be this sudden.”

The Navajo Generating Station is in an especially precarious position. Because the plant is situated 4,000 feet above sea-level, where the air is thinner, the coal burns less efficiently than it would at a lower elevation. The plant is also hundreds of miles away from major markets like Las Vegas and Los Angeles, and some electricity is inevitably lost en route. Utilities would rather generate power from solar, wind or natural gas closer to where it’s being used.

“For one thing, you’re not having to pay 800 people to run the mine and the power plant,” said Clark. At a gas-fired power plant, “a shift might be three to five people. At the Navajo Generating Station, it’s several hundred people.”

The high cost of generating coal power is only one problem. There is also the human cost of operating the mine,  which has left a generation of workers with black lung disease. The power plant ,  which is the seventh-largest source of carbon pollution in the United States, along with a host of toxic chemicals that worsen asthma, provoke heart attacks, and shorten lives. Pollution from the plant can be seen as far away as the Grand Canyon.

“You can see the haze,” said Isaac, who lamented the years of operation. “What did it actually cost us? People getting sick.”

https://i1.wp.com/thinkprogress.org/wp-content/uploads/2017/11/nav5.jpeg?w=1000&crop=0%2C0px%2C100%2C750px&ssl=1Navajo Generating Station, Arizona. Credit: Myrabella

A power plant on life support

Perhaps more than the Hopi and Navajo tribes, Peabody is determined to keep the Navajo Generating Station open. The coal company said it has found a number of potential buyers for the plant, but it has not disclosed any names, and it seems unlikely that investors would be lining up to purchase the generating station. IEEFA projects it would cost upwards of $400 million to keep the plan online through the end of 2019, and it could cost more than $2 billion in subsidies to keep the plant running through 2030.

Peabody has an ally in Trump administration, though, which is desperate to make good on its promise to rescue the coal industry. In addition to rolling back dozens of environmental safeguards, the administration is pushing regulators to compel utilities to buy costly, polluting coal power. It has made the Navajo Generating Station a priority, not simply because the federal government has an ownership stake in the plant.

“If NGS closes, it will be very damaging for the administration,” Mike McKenna, who served on Trump’s transition team, told ClimateWire. “Closure is a preventable tragedy. The administration needs to prevent it.”

https://i0.wp.com/thinkprogress.org/wp-content/uploads/2017/10/navajo-generating-station.jpg?w=1280&crop=0%2C0px%2C100%2C976px&ssl=1Trump administration throws weight behind keeping Arizona coal plant open

Owners want to wash their hands of unprofitable coal plant.

Representatives from Peabody Energy recently met with officials at the Department of the Interior and the Department of Energy, as did Navajo and Hopi leaders. Interior Secretary Ryan Zinke is exploring options for keeping the plant open, including erecting a high-powered solar facility that would be compatible with the current operation.

“Since the first weeks of the Trump administration, one of Interior’s top priorities has been to roll up our sleeves with diverse stakeholders in search of an economic path forward to extend NGS and Kayenta Mine operations after 2019,” Zinke said in a statement in June. The administration has yet to put forward a plan to stave off the plant’s closure.

https://i1.wp.com/thinkprogress.org/wp-content/uploads/2017/11/nav6.jpeg?w=800&crop=0%2C0px%2C100%2C535px&ssl=1Window Rock, a sandstone formation on the Navajo reservation. CREDIT: Ben FrantzDale

An uncertain future for the Navajo and Hopi tribes

It’s unclear how locals could replace the jobs and revenue from the Navajo Generating Station, but experts have a few ideas. A recent report from IEEFA proposed that the Bureau of Reclamation, Peabody, and the utilities that own the plant “provide a substantial core of replacement jobs that require skill sets similar to those of the existing workforce.”

The report also recommended the tribes invest in infrastructure, tourism, agriculture, and water. Clark pointed to the infrastructure associated with the power plant, which includes a water pump, power lines, and an electric railroad that runs from the mine to the generating station. “All of these things might be able to be repurposed into a renewable-energy powered water system,” he said.

The power plant uses as much as 30,000 acre-feet of water each year, water that is siphoned from Lake Powell using a large pump, Clark explained. “If the power plant is taken down, that pump is a stranded asset, which also might complement the fact that the Navajo Nation itself has a legitimate claim to every bit of that water that the power plant is using plus another 20,000 acre-feet,” he said.

The Navajo tribe could build solar arrays to power the pump, which could be used to carry water from Lake Powell to the current site of the plant, a high point in the region. Water could then be fed to other parts of the reservation. “The water itself may be worth more than the coal to the Navajo Nation,” Clark said.

https://i2.wp.com/thinkprogress.org/wp-content/uploads/2017/11/nav7.jpeg?w=800&crop=0%2C0px%2C100%2C531px&ssl=1Lake Powell. Credit: Wolfgang Staudt

The Navajo tribe could also invest in clean energy, both to sell across state lines and to provide power locally. “Other states don’t buy coal power anymore,” Isaac said, “but other states will buy renewable energy. So, we’re looking for ways that we can capitalize on that.”

2012 report from the National Renewable Energy Laboratory found that “neither solar, wind, nor geothermal power alone can replace all the types of benefits currently provided by [the Navajo Generating Station]. They might in aggregate, however.” The IEEFA report found that solar power could “replace some of the lost generation capacity, jobs, and revenue” from the plant’s closure.

Isaac said that many Navajos doubt the viability of clean energy, so they built mobile solar power units to bring electricity to parts of the reservation that are off the grid — around a third of homes on the Navajo Reservation lack power. “I wanted to build something that people could touch,” Isaac said. “Essentially, we’re building stories, because that is hopefully what’s going to encourage communities to shift.”

https://i1.wp.com/thinkprogress.org/wp-content/uploads/2017/11/nav8.jpg?w=800&crop=0%2C0px%2C100%2C548px&ssl=1One of Isaac’s mobile solar units. Credit: Brett Isaac

The Department of Commerce has awarded some $420,000 to the Navajo and Hopi tribes to help them cope with the plant’s closure, money that could be used to implement some of these ideas. Even if the plant stays online for a few more years, it is inevitable that it will close sooner rather than later. Any effort to keep the plant open distracts from the hard work of creating new businesses. Isaac says the Navajo tribe needs to look beyond coal for jobs and income.

“We seriously thought we couldn’t survive without that royalty. We couldn’t survive without those jobs. We kind of put ourselves in a corner when it came to how to discuss the economic impact,” Isaac said. “It’s going to hurt, but we are a lot more savvy than we give ourselves credit for.”

Jeremy Deaton writes for Nexus Media, a syndicated news-wire covering climate, energy, policy, art and culture.

Paradise Papers-The wealthy men in Trump’s inner circle with links to tax havens

The Guardian

Donald Trump-Paradise Papers

The wealthy men in Trump’s inner circle with links to tax havens

The president promised to bring trillions of dollars back to the US, but many around him are no strangers to the offshore world

https://i.guim.co.uk/img/media/8f385be2d22834ceecf3a4602be11f436120cbac/1_0_3716_2230/master/3716.jpg?w=620&q=20&auto=format&usm=12&fit=max&dpr=2&s=347ecba80a521ee7d389a733c795d11eDonald Trump: ‘Bring the money back. We’re rebuilding America.’ Photograph: AP, Guardian Design Team

Jon Swaine and Ed Pilkington, New York        November 5, 2017 

On the election trail in 2016, Donald Trump promised tax reforms to tempt major US companies back onshore and “bring back trillions of dollars from American businesses that is now parked overseas”.

As the first anniversary of his election victory looms this week, Trump and fellow Republicans are trying to drive those tax reforms through Congress.

On November 1st, Trump reiterated his commitment:

“Finally, our plan will bring back trillions of dollars from offshore … that will come pouring back into our country that will be put to work and will be spent by our companies that could never get the money back for many years. Bring the money back. We’re rebuilding America.”

But Trump is surrounded by wealthy individuals who have legally either sheltered their own investments or presided over policies to keep company profits or clients’ funds out of reach in tax havens.

Gary Cohn

https://i.guim.co.uk/img/media/ff79a309abadd61a1d25a666cb7692a5cf46ebf6/362_188_2259_1355/master/2259.jpg?w=620&q=20&auto=format&usm=12&fit=max&dpr=2&s=52fc20cf64ae9da502ea89010ba10b8cPhotograph: Kevin Dietsch/EPA

Trump’s chief economic adviser, who is the driving force behind the White House tax reform effort, is no stranger to offshore finance. The leaked documents reveal that for various periods between 2002 and 2006, Cohn was president or vice-president of 22 separate entities in Bermuda for Goldman Sachs.

As head of the bank’s commodities and then equities divisions, Cohn spearheaded the bank’s purchase of companies from a financial arm of General Motors, GMAC Commercial Holding of Bermuda.

The Bermuda companies specialized in real estate, and though all were based on the island, they also had registered addresses at 85 Broad Street in New York City, the headquarters until 2009 of Goldman Sachs.

In 2012, the companies were struck from the Bermuda registry, a move that strips defunct or inactive companies from the records.

In a statement, Goldman Sachs said it did manage a fund that invested in Asia, but paid taxes on its income from the fund “in all relevant tax jurisdictions”. Of Cohn, the company said it was common for its employees to be officers of its legal entities and they were not paid for these additional roles.

Cohn, who did not respond to requests for comment, stood down from the Bermuda companies in 2006, around the time that he took up the position of president at Goldman Sachs.

Rex Tillerson

https://i.guim.co.uk/img/media/410b802d56101a2ffa27fd7e76a3ce1b52bd1cc2/75_164_2067_1240/master/2067.jpg?w=620&q=20&auto=format&usm=12&fit=max&dpr=2&s=751240c04de1cc268a3b22ec39161788Photograph: Altaf Hussain/Reuters

The US secretary of state is named in the leaked files as a director of an offshore firm used in a multi-billion dollar oil and gas venture in the Middle East that became embroiled in controversy.

Tillerson was a director of Marib Upstream Services Company, incorporated in Bermuda in 1997. The company was tied to ExxonMobil, the American oil and gas corporation that Tillerson later led as chief executive. At the time, Tillerson was president of ExxonMobil’s Yemen division.

ExxonMobil and Hunt Oil, another Texas-based firm led by Tillerson’s close friend Ray Hunt, ran a $5bn venture to export 61m barrels of natural gas a year from fields in Marib, western Yemen. Hunt had discovered the fields in the mid-1980s and brought in ExxonMobil to help develop them.

Yemen later moved to nationalize the gas-drilling operation, banishing the ExxonMobil, Hunt firm when its 20-year exploration contract expired in 2005. The Texans claimed they were entitled to an extension and sued Yemen for $1.6 billion. The case was arbitrated at the International Chamber of Commerce, where Yemen prevailed.

A report published last year by the campaign group Citizens for Tax Justice said ExxonMobil had at least 35 subsidiaries in tax havens such as the Bahamas, Bermuda and the Cayman Islands – and was holding approximately $51bn offshore while Tillerson was CEO.

A state department spokesman did not respond to a request for comment.

Steven Mnuchin

https://i.guim.co.uk/img/media/fcae69a77b55b1523290c3df7c4996577f3714e4/0_25_3000_1800/master/3000.jpg?w=620&q=20&auto=format&usm=12&fit=max&dpr=2&s=a5e0b755df0f58949b083764dad09279Photograph: Anadolu Agency/Getty Images

The US Treasury secretary’s former bank financed offshore private jets for wealthy clients, including a billionaire Yemeni businessman whose son is wanted for rape and murder in the UK.

CIT Bank, where Mnuchin was deputy chairman, provided customers with financing structures for personal aircraft priced at tens of millions of dollars, which customers used to legally avoid sales taxes and other charges.

One leaked file from October 2015 shows CIT billing an Isle of Man company $430,993 for an installment on a $30 million Dassault Falcon 2000EX jet. Other files say that the ultimate owner of the Isle of Man company is Shaher Abdulhak Besher.

Besher, an ally of the former Yemeni president Ali Abdullah Saleh, has a business portfolio spanning drinks bottlers, telecoms and several other industries.

His son Farouk Abdulhak, 30, is wanted in London on suspicion of raping and murdering Martine Vik Magnussen, a 23-year-old student, who was found dead in a basement in Fitzrovia in May 2008. He denies the allegations.

Mnuchin is not named in the leaked documents and it is unclear whether he was aware of the arrangements. The financing for Besher was set up by CIT in 2012, before Mnuchin’s arrival. The arrangement continued through Mnuchin’s tenure. Mnuchin was paid $11.2m by CIT in 2016, before leaving to join Trump’s administration. CIT sold its aircraft financing division last year.

A spokeswoman for CIT said: “CIT complies with all laws, regulations and ethical standards in pursuit of its business.” An attorney for Besher said he declined to comment. Treasury spokespeople did not respond to multiple requests for comment.

Randal Quarles

The Trump administration’s most senior banking watchdog appears in the Paradise Papers in connection with an offshore bank that is under investigation by US authorities for possible tax evasion.

Quarles, Trump’s vice-chairman for supervision at the Federal Reserve, is named in the files as an officer of two firms incorporated in the Cayman Islands by the Carlyle Group, the private equity giant where Quarles was a partner until 2013.

The files detail transactions between one of Quarles’s offshore vehicles and Butterfield, a Bermuda-based bank in which Carlyle had led a $550m investment in 2010. That stake was one of several in distressed banks bought up by a new specialist team at Carlyle, including Quarles, following the 2008 financial crisis.

In November 2013, federal authorities secured court orders requiring a group of US banks to disclose information on Americans “who may be evading or have evaded federal taxes” via undisclosed affiliated accounts at offshore banks including Butterfield. They said 81 such accounts at Butterfield had already been disclosed.

Butterfield said in its last annual report that it was cooperating with US authorities and had set aside $5.5m to pay penalties that may arise from the inquiries.

Quarles told ethics regulators this year that he held assets worth between $5m and $25m in a Carlyle fund that held a stake in Butterfield. He said he intended to sell his holdings in that and most other Carlyle funds.

A Federal Reserve spokesman said Quarles “had no specific responsibilities, was not delegated any responsibilities by the board, and received no income for this position” at the offshore company, and had divested from Butterfield when he joined the government.

Jon Huntsman

https://i.guim.co.uk/img/media/01a504e181d9355b012ef2e3ca1b8b66eed11755/586_441_4454_2672/master/4454.jpg?w=620&q=20&auto=format&usm=12&fit=max&dpr=2&s=01f331ce073b361a86700e8e0d7daaf1Photograph: Rick Bowmer/AP

Trump’s new US ambassador to Russia helped lead a previously undisclosed offshore company, according to the leaked files.

Huntsman, the former Utah governor, was listed as a director of HICI International Sales Corporation in a confidential filing to authorities in Barbados, where the company was formed in 1999. The offshore vehicle was set up to carry out overseas sales for Huntsman ICI, an industrial chemicals branch of Huntsman Corporation.

The filing said HICI was owned by Huntsman ICI Holdings LLC in the US, where Huntsman was vice-chairman and manager. In 2000, Huntsman ICI reported making a $151m profit on revenues of $4.4bn.

HICI was a foreign sales corporation, a type that allowed Americans to exempt 32% of overseas income from US taxation under 1984 reforms signed by Ronald Reagan. The US closed the loophole in 2007.

Troy Keller, a spokesman for Huntsman Corporation, said of HICI: “It existed for just a few years and it participated in a US government-created program to promote exports.”

Huntsman Corporation did not report the offshore vehicle in its public filings to the Securities and Exchange Commission (SEC). Subsidiaries in tax havens may be omitted from public filings if they comprise less than 10% of a company’s assets, investments, or income.

The leaked files did not detail how much revenue passed through HICI. When he ran for president in 2012, Huntsman said his stakes in Huntsman companies were worth up to $50m.

Kenneth Juster

Trump’s ambassador to India benefited from the offshore business of his former investment company and its billion-dollar purchase of a shipping corporation.

Juster is named in the Paradise Papers as a beneficial owner of a Bermuda-based branch of Warburg Pincus, a private equity firm where he was a partner before joining the Trump administration.

Juster, who was a senior economic adviser to the president until this summer, declared holdings in Warburg Pincus worth up to $5m to ethics officials this year.

He was separately listed among Warburg partners in compliance documents relating to the buyout firm’s 2011 purchases of Triton Container International, a shipping container leasing company, and its sister firm International Asset Systems, which makes cargo tracking software.

A state department official said in an email: “Mr Juster has, at all times, fully disclosed and properly reported these financial interests on his US federal income tax returns. He also has timely filed and fully paid all US federal income tax liabilities in connection with the ownership of these interests.”

Carl Icahn

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Icahn, a friend and former adviser to Trump, owns a $250m mining company spread across three tax havens and structured in a way that limits the information it must disclose to US authorities.

The leaks detail how Icahn holds a controlling stake in Ferrous Resources, a Brazilian mining company officially based on the Isle of Man. It in turn owns a pair of holding companies in Luxembourg and Malta, which operate iron mines in Brazil.

All three jurisdictions offer low- or zero-tax regimes for corporations, making them destinations of choice for foreign businesses seeking to legally lower their tax bills. A report in 2015 by Citizens for Tax Justice said Icahn operated 20 subsidiaries in offshore tax havens.

Icahn was a special adviser to the president until August and has a net worth of about $16.6bn, according to Forbes.

An email unearthed in the Paradise Papers said the structure of Ferrous Resources meant it escaped some disclosure requirements under an Obama-era law aimed at preventing offshore tax avoidance. The structure of Ferrous Resources was in place when Icahn bought the company.

Icahn was separately identified in the documents as having been a director for 11 years of Scientia Health Group, an investment company based in Bermuda in which he and his wife, Gail, held a stake. The firm’s investors also included the celebrity chef and lifestyle guru Martha Stewart and the disgraced film mogul Harvey Weinstein.

Jesse Lyn, general counsel for Icahn Enterprises, said: “We invested significant sums to save Ferrous from bankruptcy and to date have lost hundreds of millions of dollars on the investment.” Lyn said Icahn formerly held a small stake in Scientia which had “nothing to do with the company’s tax planning or structuring”.

Tom Barrack

https://i.guim.co.uk/img/media/d849971078527b07846d48a8df9366d96a8615fd/1663_623_1684_1010/master/1684.jpg?w=620&q=20&auto=format&usm=12&fit=max&dpr=2&s=0e70801651057135bb6c453b0d248594Photograph: Bloomberg via Getty Images

The chairman of Trump’s inaugural committee leads a $58bn real estate investment trust that channels some of its profits to the low- or no-tax jurisdictions of Luxembourg, the Cayman Islands and Lebanon.

Barrack, who has described himself as one of the president’s “closest friends for 40 years”, appears in the Paradise Papers through offshore subsidiaries of Colony NorthStar, of which he is CEO.

In 2011, Appleby helped devise a rolling credit facility linking Barrack’s US-based investment funds with a pair of Cayman-Islands-based subsidiaries dealing in troubled real estate, which the lawyers asked him personally to approve.

A confidential chart in the leaked documents suggested money would flow from the funds in Delaware to a Cayman Islands entity, Colony Distressed Credit Fund II Feeder A, which was “exempted”, meaning it paid no local taxes. The chart suggested the money would then be repatriated in a complex web to a separate Delaware subsidiary closer to the parent company.

Barrack was an early endorser of Trump for president, co-founding the Rebuilding America Now Super Pac, which pumped $ 23 million into the 2016 race. He was rewarded by being invited to deliver a keynote address at the Republican national convention.

Barrack declined to clarify whether he was aware that Colony was passing money through a subsidiary in the Cayman Islands or whether the feeder funds were set up to reduce tax payments. The firm said: “Colony NorthStar is in strict compliance with the letter and spirit of all applicable rules for cross-border business, as we have been for more than 25 years.”

Jay Clayton

Trump’s SEC chairman received income from a hedge fund based in the Cayman Islands.

Clayton disclosed to the government ethics office before taking up the SEC job that he received income from Mount Kellett Capital Partners (Cayman) LP, the offshore subsidiary of a US hedge fund. A proposed structure chart in the leaked Appleby files shows a complex web of ties that were created between the Cayman Islands offshoot, its head company, and other offshore subsidiaries.

According to his ethics disclosure, Clayton received income from Mount Kellett through a trust set up for partners of Sullivan & Cromwell, the law firm where he worked for many years. In March, he agreed to divest from the fund within 90 days of taking up his SEC post.

Clayton declined to say how much he received annually from the Cayman Islands subsidiary, or to comment on how his involvement offshore would affect his new role as overseer of offshore investments.

As a corporate lawyer, Clayton gained a reputation for his close ties to Wall Street. As SEC chairman, his role is to protect investors and ensure the smooth working of the markets. Within that an important function is to keep an eye on the offshore interests of companies and hedge funds.

Trump has encouraged the SEC to eradicate many regulations. One of Clayton’s first moves was to allow private companies to be more secretive in the process of going public.

Ben Carson

https://i.guim.co.uk/img/media/55fcf1fea6c3be10ea80632c603a5d7d43239585/279_80_1969_1181/master/1969.jpg?w=620&q=20&auto=format&usm=12&fit=max&dpr=2&s=53fed7398df3d52c5ce3b11f269679d6Photograph: Carlo Allegri/Reuters

A biotechnology company headed by Carson, Trump’s housing and urban development (HUD) secretary, set up offshore firms that could have reduced its tax bill.

The Paradise Papers contain files on two subsidiaries of Vaccinogen in Bermuda that date from Carson’s time as chairman of the Baltimore-based biotechnology company. The offshore vehicles were established as holding companies for “intellectual property related to the treatment of cancer and other diseases”, according to the files.

Offshore holding firms can be used to lower corporate tax bills for firms that make money from inventions or creative productions. Typically the offshore entity holds the intellectual property, leases it back to the parent company, and collects the royalties or revenues from its use. Tax havens such as Bermuda impose no tax on company profits. Vaccinogen did not respond to a request for comment.

The specific arrangements of Vaccinogen’s firms were not clear. One file named Michael A Bloom as a contact. An attorney with that name in New York states that he once “represented a publicly traded US pharmaceutical company in connection with IP tax migration and tax planning”. Bloom did not respond to an email.

Carson, a retired neurosurgeon, stood down as chairman of Vaccinogen in May 2015 after announcing that he was running for the Republican presidential nomination.

Raffi Williams, a spokesman for HUD, did not respond to several requests for comment. Williams eventually said questions should be directed to Carson’s personal attorney, and then declined to identify that attorney.

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Woman Fired For Flipping Off Donald Trump’s Motorcade

HuffPost

Woman Fired For Flipping Off Donald Trump’s Motorcade

Jennifer Bendery,  HuffPost         November 6, 2017

WASHINGTON ― You may have seen this photo of President Donald Trump’s motorcade winding down a wooded road last week as a woman on a bicycle pedaled by ― giving the middle finger to Trump.

https://s.yimg.com/lo/api/res/1.2/pnlJ3.myz.7PWMAIVK4htA--/YXBwaWQ9eW15O3c9NjQwO3E9NzU7c209MQ--/http://media.zenfs.com/en-US/homerun/the_huffington_post_584/f29a8d4f3e2d376ef68b326bdf5e9ebbThe picture, snapped by a White House photographer traveling with the president as he left his golf course in Sterling, Va., went viral almost immediately. News outlets picked up the story when it appeared in a White House pool report. Late-night talk show hosts told jokes about the encounter and people on social media began hailing the unidentified woman as a “she-ro,” using the hashtag #Her2020.

The woman’s name is Juli Briskman. Her employer, government contractor Akima LLC, wasn’t so happy about the photo. They fired her over it.

In a Saturday interview with HuffPost, Briskman, a 50-year-old mother of two, said she was stunned that someone had taken a picture of her giving Trump the middle finger.

As the photo circulated online, Briskman decided to tell Akima’s HR department what was happening when she went to work on Monday. By Tuesday, her bosses called her into a meeting and said she had violated the company’s social media policy by using the photo as her profile picture on Twitter and Facebook.

“They said, ‘We’re separating from you,‘” said Briskman. “Basically, you cannot have ‘lewd’ or ‘obscene’ things in your social media. So they were calling flipping him off ‘obscene.’”

Briskman, who worked in marketing and communications at Akima for just over six months, said she emphasized to the executives that she wasn’t on the job when the incident happened and that her social media pages don’t mention her employer. They told her that because Akima was a government contractor, the photo could hurt their business, she said.

Virginia is an employment-at-will state, meaning employers can fire people anytime and for any reason. But Briskman said what’s been particularly infuriating is that a male colleague kept his job after recently posting lewd comments on his Facebook page that featured Akima LLC as his cover photo. She said this colleague was reprimanded for calling someone “a fucking Libtard asshole” on Facebook, but was allowed to delete the post and keep his job.

“How is that any less ‘obscene’ than me flipping off the president?” she asked. “How is that fair?”

A request for comment from Akima was not immediately returned.

https://s.yimg.com/ny/api/res/1.2/Onqqk.SlSKJloz7U5Gqwlg--/YXBwaWQ9aGlnaGxhbmRlcjtzbT0xO3c9ODAw/http://media.zenfs.com/en-US/homerun/the_huffington_post_584/79671159fb9d3a458145a58e0a477ca1Asked what she was thinking when she saw Trump’s motorcade roll up next to her, Briskman said it was a gut reaction to flip him off.

“He was passing by and my blood just started to boil,” she said. “I’m thinking, DACA recipients are getting kicked out. He pulled ads for open enrollment in Obamacare. Only one-third of Puerto Rico has power. I’m thinking, he’s at the damn golf course again.”

“I flipped off the motorcade a number of times,” she added.

Briskman, a Democrat, said she plans to look for a new job with an advocacy group that she believes in, like Planned Parenthood or PETA.

Despite getting fired, she said she has no regrets about the attention her public show of displeasure with Trump received. In fact, she said she’s happy to be an image of protest that resonates with many Americans.

“In some ways, I’m doing better than ever,” she said. “I’m angry about where our country is right now. I am appalled. This was an opportunity for me to say something.”

Community Gardens are spreading across the USA!

EcoWatch

Community Gardens are spreading across the USA! November 4, 2017

via Rob Greenfield Outspeak 

Community Gardens are spreading across the USA!via Rob Greenfield Outspeak

Posted by EcoWatch on Sunday, November 5, 2017

By 2050, there will be 50 cities with populations of over 10 million

EcoWatch

Welcome to the world of the megacity.    November 4, 2017

Read more: http://bit.ly/2v8yrYZ

Welcome to the world of the megacity. Read more: http://bit.ly/2v8yrYZ

Posted by EcoWatch on Friday, November 3, 2017

Trump Is a ‘Blowhard,’ ‘I Don’t Like Him’ and I Voted for Hillary, George Bush Says in New Book

Newsweek

Trump Is a ‘Blowhard,’ ‘I Don’t Like Him’ and I Voted for Hillary, George Bush Says in New Book

Greg Price, Newsweek        November 4, 2017

https://s.yimg.com/lo/api/res/1.2/JnTKEDxkh.IZvpIXdqRTNg--/YXBwaWQ9eW15O3E9NzU7dz02NDA7c209MQ--/http://media.zenfs.com/en-GB/homerun/newsweek_europe_news_328/87fd1297dc2f28d14e15a0d96746bf1fTrump Is a ‘Blowhard,’ ‘I Don’t Like Him’ and I Voted for Hillary, George Bush Says in New Book

Update | Both former President Bushes had choice words for current President Donald Trump in a new book scheduled to be published later this month, with the elder Bush reportedly calling the billionaire commander-in-chief a “blowhard” and flatly stating he does not “like” him.

Presidents George Bush and George W. Bush, the 41st and 43rd top executives respectively, spoke to author Mark K. Updegrove for the book “The Last Republicans.” It detailed the relationship between the father-and-son presidents and how they were fretful of what Trump had done to the Republican Party.

Furthermore, both ex-presidents admitted they did not vote for Trump. The elder Bush pulled the lever for Democrat Hillary Clinton while the younger told Updegrove he voted for “none of the above.”

Trending: Alaska Wants To Drill For More Oil To Cover The Costs of Climate Change

“I don’t like him,” George Bush said in May 2016 according to a The New York Times on Saturday. “I don’t know much about him, but I know he’s a blowhard. And I’m not too excited about him being a leader.

Trump, who started his first trip to Asia as president on Friday, shot back in a statement that the Iraq War was “one of the greatest foreign policy mistakes in American history,” and challenged both Bushes legacies and effect on the GOP.

“If one Presidential candidate can disassemble a political party, it speaks volumes about how strong a legacy its past to presidents really had,” the statement to CNN on Saturday read. “And that begins with the Iraq war, one of the greatest foreign policy mistakes in American History. President Trump remains focused on keeping his promises to the American people by bringing back jobs, promoting America First foreign policy and standing up for the forgotten men and women of our great country.”

George W. Bush took umbrage with Trump’s divisive brand of political machinery, a common accusation the current president faced along the campaign trail as throughout his first year in office.

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“You can either exploit the anger, incite it,” he said, “or you can come up with ideas to deal with it.”

Trump ran as an anti-establishment Republican, made famous by his “drain the swamp” promise and slogan, and the younger Bush president admitted his brother and former GOP presidential candidate Jeb “didn’t fit with the mood.”

“If you’re angry with the powers that be you’re angry with the so-called establishment, “Bush said, “and there’s nothing more established than having a father and brother that have been president.”

The comments were striking since former U.S. presidents traditionally avoid criticism of the White House incumbent but Donald Trump’s ascension changed that tradition.

The Bushes also made a not-so-veiled statement following President Trump’s comments in the wake of the deadly Charlottesville, Virginia, protest in August.

“America must always reject racial bigotry, anti-Semitism, and hatred in all forms,” their joint statement read, according to CNN. “As we pray for Charlottesville, we are reminded of the fundamental truths recorded by that city’s most prominent citizen in the Declaration of Independence: we are all created equal and endowed by our Creator with unalienable rights,” they said in a joint written statement on Wednesday. “We know these truths to be everlasting because we have seen the decency and greatness of our country.”

The book will be published Nov. 14.

This story was updated to include President Trump’s response to the Bushes comments.

State should end discussion, take action on Line 5 Pipeline

Detroit Free Press

State should end discussion, take action on Line 5

Dave Dempsey Published        November 4, 2017

https://www.gannett-cdn.com/-mm-/8aea98eeccde942b5fba7741a828ffc01a87aa8b/c=136-0-2264-1600&r=x404&c=534x401/local/-/media/2016/06/22/DetroitFreePress/DetroitFreePress/636022041297697813-dfp-locgrey-1110-1-1-89CGAMQR-L706800715.JPG

(Photo: Ellen Creager/Detroit Free Press)

When the police pulls a resident over for going 100 mph in a 55-mph zone, they don’t cluck their tongues — they click their ticket books.

But when Michigan’s state government catches Enbridge Energy putting the Great Lakes at risk by failing again to disclose dangerous conditions on its Line 5 oil pipelines in the Mackinac Straits, the response is paralysis. The state has again caught Enbridge ignoring its legal obligation to be a proper steward of the submerged land that the state allows the company to occupy with its pipeline.

But all we’re hearing out of Lansing, and particularly Attorney General Bill Schuette is an expression of disappointment.

The difference between strict enforcement of laws against individuals and giving an oil transport giant chance after chance to meet its fundamental responsibility not to harm public waters is as stark as the difference between a single speeding motorist and a catastrophic oil spill fouling the drinking water source for millions.

The accumulation of studies, evidence of pipeline delamination and bends in June, and now exposed metal with likely corrosion, signals a dangerously flawed and ultimately incurable pair of sunken pipelines.

It’s time for our state government to stop treating the 1963 Constitution, statutes, and common law that protect our lakes as nice but meaningless environmental policy statements and start treating them as the duty the people through the Constitution and our courts have mandated.  More than ever, it’s time to shut down Line 5.

Dave Dempsey, Senior Advisor, FLOW, Traverse City

The world is warming even faster than expected. Trump isn’t going to act. The rest of us need to step up

Los Angeles Times  Editorial

The world is warming even faster than expected. Trump isn’t going to act. The rest of us need to step up

http://www.trbimg.com/img-59fcff2d/turbine/la-1509752615-yd2sqylozi-snap-image/1150/1150x647The coal-fired Plant Scherer, one of the nation’s top carbon dioxide emitters, in Juliette, Ga. on June 3. (Branden Camp / Associated Press)

By The Times Editorial Board, Contact Reporter     November 4, 2017

The global climate is in trouble, worsening faster than experts believed only two years ago, and ambitious international steps to address the problem have been insufficient thus far. In December 2015, nearly every nation on earth committed themselves to the Paris Agreement to reduce greenhouse gas emissions, a concerted effort to limit the rise in global temperature to no more than 2 degrees Celsius above pre-industrial levels. But scientists now say that threshold is too high — the line must be held at 1.5 degrees to prevent the climate change that’s already underway from becoming catastrophic.

Representatives of the nations that signed the Paris agreement meet this week at a United Nations climate conference in Bonn to take stock of where the world is right now, and of individual nations’ efforts to curtail emissions. The Trump administration is sending a career diplomat to the conference (which also will be attended by Gov. Jerry Brown, a key figure in organizing sub-national efforts to reduce emissions) even though President Trump has begun the process of withdrawing from the pact, possibly the single most dangerous step he has taken. While the U.S. government’s policy is to move backward — Trump wants to burn more fossil fuel, not less — state and local governments, other countries around the world and international corporations are all moving forward.

But the plans on the table are not enough. The United Nation’s own Emissions Gap Report released Oct. 31 found that “the gap between the reductions needed and the national pledges made in Paris is alarmingly high,” and that emissions must be throttled back even further. Nations also could help by pursuing reforestation programs, developing carbon storage technologies and adopting smarter agricultural and wetlands-management policies. Given the UN’s latest findings, attendees at the Bonn convention must come up with a strategy for accelerating global efforts to reduce emissions and ensure that the world reaches net-zero greenhouse gas emissions by 2050.

If the president won’t lead on climate change, Congress must.

Even that may not suffice. A new report by the World Meteorological Organization concluded that carbon dioxide increased in the atmosphere at record speed last year and has reached a level not seen in more than 3 million years. At that time, the average atmospheric temperature was 3 degrees Celsius warmer than today, which melted glaciers in Greenland and the Antarctic and pushed sea levels at least 30 feet higher than they are now.

Currently, scientists are predicting sea-level rise in terms of feet, not inches, which would inundate coastlines, destroy infrastructure worldwide and displace tens of millions of people. We’re already seeing increased storm strength, more frequent flooding and deeper droughts, all ascribed to global warming.

More troubling is that last year’s increase came despite a global slowdown in the burning of fossil fuels. Some scientists fear we may be reaching a “feedback loop” in which warmer air in the Arctic thaws permafrost, which releases trapped methane (and carbon dioxide), which in turn feeds the rise in the air temperature. Others, relying on historic comparisons to previous warming cycles, think that the risk from tundra emissions might not be significant, but that increased rainfall in the tropics, which leads to microbial processes that release methane, could be. In either scenario, it will be crucial to offset the increases by reducing the amount of methane released from such human activities as drilling, cattle ranching and rice farming.

Individual actions are important too. One person’s carbon footprint is small, but in a country of 326 million people and a global population of 7.4 billion, individual actions add up quickly.

Still, strong policies by major emitting nations — the U.S. is second on that list behind China — are the best hope to arrest the rise in global temperatures. And that’s a difficult political lift, particularly in a country led by a man who believes climate change is a hoax. Fortunately, a majority of Americans accept the science Trump and some of his appointees so rigorously rebuff. Climate change was woefully underplayed in the last election cycle, and it needs to be made a major part of the 2018 congressional elections. If the president won’t lead on this issue, Congress must. The world is changing, and we need to do much, much more to limit the most devastating effects, from rising seas to fiercer storms to extended droughts. We created this mess, and became a wealthy nation in the process. We have both a moral and existential duty to act, and to act quickly.

US report contradicts Trump team: Warming mostly man-made

McClatchy D.C. Bureau

US report contradicts Trump team: Warming mostly man-made

AP Science Writer               November 03, 2017

http://www.mcclatchy-wires.com/incoming/xxd9sv/picture182611091/alternates/LANDSCAPE_1140/Climate_Reports_47605.jpgFILE – In this Saturday, Sept. 3, 2016 file photo, water from Roanoke Sound pounds the Virginia Dare Trail in Manteo, N.C., as Tropical Storm Hermine passes the Outer Banks. A massive U.S. report released Friday, Nov. 3, 2017, concludes the evidence of global warming is stronger than ever and that more than 90 percent of it has been caused by humans. Since 1900, the reports said Earth has warmed by 1.8 degrees 1 degree Celsius) and seas have risen by 8 inches.

Washington: A massive U.S. report concludes the evidence of global warming is stronger than ever, contradicting a favorite talking point of top Trump administration officials, who downplay humans’ role in climate change.

The report released Friday is one of two scientific assessments required every four years. A draft showing how warming affects the U.S. was also published.

Despite fears by some scientists and environmental advocates, David Fahey of the National Oceanic and Atmospheric Administration and several authors said there was no political interference or censoring of the 477-page final report.

“A lot of what we’ve been learning over the last four years suggests the possibility that things may have been more serious than we think,” said Robert Kopp of Rutgers University, one of dozens of scientists inside and outside the government who wrote the reports.

Since 1900, Earth has warmed by 1.8 degrees (1 degree Celsius) and seas have risen by 8 inches. Heat waves, downpours and wildfires have become frequent.

Energy Secretary Rick Perry and Environmental Protection Agency chief Scott Pruitt have repeatedly said carbon dioxide isn’t the primary contributor to global warming.

It’s “extremely likely” — meaning with 95 to 100 percent certainty — that global warming is man-made, mostly from the spewing of carbon dioxide into the atmosphere from the burning of coal, oil and natural gas, scientists concluded.

“Over the last century, there are no convincing alternative explanations,” the report said.

Scientists calculated that human contribution to warming since 1950 is between 92 percent and 123 percent. It’s more than 100 percent on one end, because some natural forces — such as volcanoes and orbital cycle — are working to cool Earth, but are being overwhelmed by the effects of greenhouse gases, said study co-author Katharine Hayhoe of Texas Tech.

“This period is now the warmest in the history of modern civilization,” she said.

For the first time, scientists highlighted a dozen “tipping points” of potential dangers that could happen from warming, things that Hayhoe said “keep me up at night.”

They include the slowing down of the giant Atlantic Ocean circulation system that could dramatically warp weather worldwide, much stronger El Ninos, major decreases in ice sheets in Greenland and Antarctica, which would spike sea level rise, and massive release of methane and carbon dioxide from thawing permafrost that could turbo-charge warming.

Researchers did not provide an estimate of how likely tipping points would occur, but “there is certainly some chance of some of these things happening,” Fahey said.

The report also documented how different climate change-caused events can interact in a complex way to make life worse such as the California wildfires and Superstorm Sandy five years ago.

The world’s oceans are under a “triple threat” — the water is getting warmer, more acidic and seeing a drop in oxygen levels, Hayhoe said.

In a 1,504-page draft report on the impacts of climate change, scientists detailed dozens of ways global warming is already affecting parts of the U.S.

Scientists said global warming is already sickening, injuring and killing Americans with changes to weather, food, air, water and diseases. And it’s expected to get worse, hurting the economy, wildlife and energy supply.

“Risks range from the inconvenient, such as increasing high tide flooding along the East Coast related to sea level rise, to … the forced relocation of coastal communities in Alaska and along the Gulf Coast,” the draft report said.

Outside experts said the reports are the most up-to-date summary of climate science.

“It shows that if anything the findings of scientists have become more dire” since 2013, said University of California, Berkeley climate scientist Zeke Hausfather, who wasn’t part of the work.

Related:

Engadget: Federal report says humans are the cause of climate change

Mallory Locklear, Engadget         November 4, 2017 

Today, over a dozen federal agencies released the Climate Science Special Report, which is a product of the National Climate Assessment — a Congressionally mandated review that takes place every four years. In it, hundreds of scientists from dozens of government agencies and academic institutions present evidence that supports the existence of a human-caused warming planet and all of the consequences that come with it. “This assessment concludes, based on extensive evidence, that it is extremely likely that human activities, especially emissions of greenhouse gases, are the dominant cause of the observed warming since the mid-20th century,” the report stated. “For the warming over the last century, there is no convincing alternative explanation supported by the extent of the observational evidence.”

The special report notes that each of the last three years have set temperature highs and that global temperature averages have risen by 1.8 degrees Fahrenheit over the last 115 years. It also warns that weather disasters like hurricanes and floods that have cost the US $1.1 trillion since 1980 could become more commonplace if action isn’t taken to reduce our emissions. “The frequency and intensity of extreme high temperature events are virtually certain to increase in the future as global temperature increases (high confidence). Extreme precipitation events will very likely continue to increase in frequency and intensity throughout most of the world (high confidence),” said the report.

Also noted, was the importance of reducing emissions for any hope of curtailing the negative outcomes of climate change. “The magnitude of climate change beyond the next few decades will depend primarily on the amount of greenhouse gases (especially carbon dioxide) emitted globally. Without major reductions in emissions, the increase in annual average global temperature relative to pre-industrial times could reach 9°F (5°C) or more by the end of this century,” the report stated.

The report released today — an exhaustive compilation of research totaling over 600 pages and peer reviewed by the National Academy of Sciences — is just the first of two. A second, longer volume detailing the regional impacts of climate change is not yet finalized, but is open for public comment and will soon undergo peer review. Somewhat surprisingly, today’s report was approved by the White House even though the Trump administration has repeatedly worked against efforts to combat climate change including removing the US from the Paris Accord, placing a climate change denier at the helm of the Environmental Protection Agency (EPA), and nominating one to lead NASA. Under the Trump presidency, the EPA has stopped researchers from speaking about climate change and deleted climate change information from its website while the Department of Agriculture has pressed its staff to not refer to climate change in their communications.

In regards to the report released today, Penn State University geo-scientist Richard Alley told NPR, “This is good, solid climate science. This has been reviewed so many times in so many ways, and it’s taking what we know from … a couple of centuries of climate science and applying it to the U.S.” Michael Mann, director of the Earth System Science Center at Penn State University told the New York Times, “This new report simply confirms what we already knew. Human-caused climate change isn’t just a theory, it’s reality. Whether we’re talking about unprecedented heat waves, increasingly destructive hurricanes, epic drought and inundation of our coastal cities, the impacts of climate change are no longer subtle. They are upon us. That’s the consensus of our best scientists, as laid bare by this latest report.”

Read the full Climate Science Special Report here. Climate Change Special Report

GOP’s ‘Cruel and Unusual’ Tax Plan Cuts Wind Forecast in Half

Bloomberg

GOP’s ‘Cruel and Unusual’ Tax Plan Cuts Wind Forecast in Half

By Brian Eckhouse           November 3, 2017

From Climate Changed

  • Wind industry would add 19 gigawatts under plan, BNEF says
  • Republican Senator Grassley supports wind tax credit

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iLAqazV4V03o/v0/-1x-1.jpgPhotographer: Andrew Harrer/Bloomberg

House Republicans’ proposed tax-reform plan would slice wind development in half, according to a forecast Friday by Bloomberg New Energy Finance.

The London-based research group had expected the U.S. to add 38 gigawatts of new wind power through 2020. Based on the proposal released Thursday, that figure would fall to 19 gigawatts because it slashes a key federal subsidy.

The plan would cut the federal production tax credit for wind power by about a third, from $24 per megawatt-hour in 2017 dollars to $15 per megawatt-hour. It would also change the requirements to qualify for the subsidy, which is already scheduled to be phased out.

“The wind industry was ramping up for its final push under the credit,” Alex Morgan, a New York-based analyst at BNEF, said in an interview Friday. “This would diminish those boom years.”

Here’s how: the Republican proposal wouldn’t allow projects to qualify for the full credit unless they can demonstrate “a continuous program of construction,” from the end of last year through completion.

Under the current rules, developers are eligible to claim the full credit through 2020 if they spent at least 5 percent of total project costs before the end of last year — even if physical construction was months, or even years, away.

Buying turbines before the end of 2016 was a popular way to capture the credit. About 41 gigawatts qualified for the full credit through buying turbines or equipment in 2016 alone, although many weren’t expected to be completed until 2020, according to Morgan. Much of that equipment has been warehoused.

The proposal may face resistance from fellow Republicans like Chuck Grassley, the powerful senator from wind-rich Iowa, who supports the production tax credits.

“This isn’t set in stone,” Morgan said. “Maybe it’ll be edited out by Monday.”

But the proposal surprised the industry. Developers had expected the tax credit would be preserved, given the phase out agreed to just two years ago.

And then there’s this: unlike solar power, wind power is most robust in Republican strongholds like Texas and the Plains.

“Some Republicans don’t realize that 80 percent of benefits of wind power is going to Republican areas of the country — and to Republican voters,” said Mike Garland, chief executive officer of Pattern Energy Group Inc. and Pattern Energy Group LP, which together own 2.2 gigawatts of U.S. power. “It’s cruel and unusual punishment to go after one energy sector.”