Category Archives: miscellaneous
Rio Tinto’s first-half profit soars 93%, investors getting $3bn back
Shareholders will receive $2bn on the dividend side and $1bn of share buybacks.
Aug 2, 2017
The company’s iron ore business delivered 80% of the group’s underlying earnings. (Image of the Paraburdoo operation, in the Pilbara, courtesy of Rio Tinto)
Rio Tinto (ASX, LON:RIO), the world’s second largest miner, gave its shareholders an early Christmas present Wednesday as it declared its biggest interim dividend in the company’s 144-year history, thanks to climbing commodity prices that made first-half profit jump an impressive 93%.
The Anglo-Australian company also said it will increase its share buy-back program this year, as net profit for the first six months of the year came in at $4.14 billion, more than double the $2.13 billion it logged in 2016, yet slightly short of market expectations.
Rio will return a total of $3 billion to shareholders: $2 billion on the dividend side and $1 billion of share buybacks.
Further payouts could come “down the track” after Rio closes its $2.45 billion sale of Coal & Allied to Yancoal, expected to happen in the third quarter of 2017.
Chief executive Jean-Sebastien Jacques said the results unveiled today show the firm’s “very simple strategy” was working. “But we believe there is more we can do,” he noted, adding that further payouts could come “down the track” after Rio closes its $2.45 billion sale of Coal & Allied to Yancoal (ASX:YAL), estimated for the third quarter of 2017.
The London-based miner’s performance is a clear reflection of a reverse in the mining industry’s fortunes, as companies big and small are now benefiting from a recovery in prices of commodities including iron ore, which is Rio’s key commodity, as well as aluminum and even coal.
Should that rally fade, however, there’ll be no more cash flow from coal for Rio Tinto to fall back on, warned Wednesday Bloomberg analyst David Fickling. “And its copper-mine stakes — hit by strikes this year at Escondida in Chile and Grasberg in Indonesia, plus the vast cost of reaching full production at Oyu Tolgoi in Mongolia — aren’t producing enough earnings to make up the difference,” he wrote.
Fickling’s comments are based on the fact that the company’s shareholders receive dividends based on a policy set up in February 2016, which ensures between 40% and 60% of underlying earnings are paid out to investors as a dividend every six months. The old approach saw them receive guaranteed dividend payments, but Rio had to re-evaluate it to better reflect volatile commodity cycles, such as the one that took the whole industry down in 2015.
“These are strong results: operating cash flow was $6.3 billion and we met our $2 billion cash cost reduction target six months early,” said chief executive Jean-Sebastien Jacques.
The company’s iron ore division contributed 80% of Rio Tinto’s underlying earnings. The miner, the world’s second largest producer of the commodity, generated almost 130 million tonnes of the steelmaking ingredient during and received an average price of $67.80 a tonne in the period, 26% more than just a year ago.
Mining jobs in Canada to go begging: MiHR report
About half of the vacancies in key mining occupations likely to go unfilled in next 10 years
July 30, 2017
A torrent of retirements over the next 10 years is poised to wreak havoc on the mining labour market in Canada.
While the unemployment rate in mining, quarrying and oil and gas has improved in 2017 from the summer of 2016 – from 10% to 7% – the next decade is going to be challenging for the industry as it seeks to replace older workers who are turning in their coveralls and enjoying their golden years. So says a new report from the Mining Industry Human Resources Council (MiHR), which projects 87,830 workers will need to be hired over the next decade under a baseline scenario. If mining expands, the need for miners and associated professions climbs to 130,410, and under a contraction, shrinks to 43,200.
“One of the most significant challenges facing Canada’s mining industry is establishing a sustainable supply of labour that is able to withstand the economic volatility that characterizes the sector,” notes the report. The report suggests that there will be a 47% gap (demand exceeds supply) for technical occupations, 56% for supervisors and foremen, 18% for skilled trades and 10% for production workers.
According to MiHR’s forecasts, the industry will need to hire roughly 18,210 people in these occupations from 2018 to 2027, but is only expected to secure 8,670 new entrants, leaving a total gap of 9,540 – meaning about half of all vacancies will go unfilled.
“This poses a significant risk to mining operations, given that a thin labour supply has the potential to derail projects, drive up the cost of finding workers and ultimately undermine an operation’s ability to run competitively,” reads an executive summary of the report.
That obviously calls for a new generation in mining, with key education programs needed to improve the labour supply.
“The incoming generation of new entrants are vitally important to the health of mining’s future labour supply, especially prospective students,” says the report.
It noted nearly half (47%) of hiring requirements will be met by retiring workers, which places a significant burden on employers.
“Each retiree takes with them a unique set of skills and knowledge, and those leaving with experience create a void that is difficult to fill,” says MiHR.
Factors exacerbating the tight mining labour market include:
- Age and retirement: Older workers have surged from 11 per cent in 2007 to 16 per cent in 2016, while younger workers have dropped from 13 per cent to 5 per cent over that same period.
- Lack of gender parity: While women represent nearly half of the Canadian labour force, they make up only about 19 per cent of the labour force in mining.
- Economic volatility: economic downturns and upswings result in widely fluctuating demand for labour and this instability can affect a mining employer’s ability to secure labour.
- Remoteness: Mining operations often exist in remote parts of the country with extremely low populations lacking skills. It is common for employers to source workers from other regions of Canada.
Supreme Court of Canada confirms First Nations have no veto power over resource projects
By Nelson Bennett, Business in Vancouver
July 28, 2017, 2:45 p.m.
Image: Kinder Morgan Canada
Just days after the new NDP government said it would work to implement a declaration that ostensibly gives First Nations in B.C. a veto over projects like the Trans Mountain pipeline expansion, the Supreme Court of Canada ruled no such veto exists.
“Overall, the decisions are positive for project development in Canada,” said Robin Junger, an expert in aboriginal law for McMillan LLP and former head of the B.C. Environmental Assessment Office.
On one hand, David Eby, the NDP’s new attorney general, confirmed last week what Junger has previously said to be the case – that his government doesn’t have the legal authority to deny permits for the pipeline expansion.
Those are statutory decisions made by civil servants, not political decisions to be made by cabinet ministers.
On the other hand, last week Premier John Horgan issued a mandate to Scott Fraser, minister of Indigenous Relations and Reconciliation, to work with First Nations “to establish a clear, cross-government vision of reconciliation to guide the adoption of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).”
That declaration has a clause that states that indigenous people have the right to “free prior and informed consent” on development projects within their asserted territory.
On the surface, that sounds like the NDP would be handing the Tsleil-Waututh of Burrard Inlet a veto, since they deny the federal government’s and Kinder Morgan Canada’s right to expand the pipeline in their territory – the Burrard Inlet in Burnaby.
But as the federal Liberals discovered when they too promised to implement UNDRIP, actually giving it legal force would require a constitutional amendment, which is why the federal Liberals abandoned it.
Two Supreme Court of Canada decisions issued on July 26 made it abundantly clear that, while the federal government has a duty to consult, that does not mean that First Nations can veto a project.
In one ruling, the Supreme Court of Canada ruled that regulators like the National Energy Board (NEB) can represent the federal Crown in executing the duty to consult First Nations, but that those consultations must be real, not lip-service.
In the Clyde River Inuit case, the Supreme Court ruled that the NEB has the authority to represent the Crown in executing its duty to consult, but that, in that particular case, it had failed to do so properly. The court ruled the NEB’s consultation failed to properly address the Clyde River Inuit’s concerns.
The other case, involving the Chippewas of the Thames First Nation decision, is particularly relevant to the Trans Mountain pipeline expansion. In that case, the court ruled that the consultation with the Chippewas had been adequate.
The Chippewas were objecting to a reversal and expansion of a pipeline owned by Enbridge. The Supreme Court ruled against the Chippewas in that case and in doing so affirmed that, provided consultations are adequate, First Nations don’t have the legal authority to stop developments in their territory.
“The duty to consult does not provide a ‘veto’ for indigenous peoples over Crown decision,” Blake, Cassels & Graydon LLP explains in a legal brief on the two cases.
So what does that mean for the NDP’s promise to implement UNDRIP? Junger said it is clear that it has no legal force.
“This is the law,” Junger said. “No elected person can change the law by statements.”
“Courts have interpreted Section 35 of our Constitution as saying there’s no veto. So I think don’t any government would have the power, even by legislation, to make that change. It would have to be a constitutional amendment. You can’t make it law by saying you endorse it.”
John Ivison: Shocks to Canada’s natural resource sector should be the real cover story
As the prime minister graces the cover of Rolling Stone, the real news this week is how two major natural resources projects have been scuttled by government and the courts
The National Post
July 26, 2017
6:39 PM EDT
Petronas considered building the Pacific Northwest LNG project on Lelu Island near Prince Rupert, B.C.Handout/Pacific Northwest LNG
The fawning front cover of the latest Rolling Stone, which features Justin Trudeau and wonders wistfully, “Why can’t he be our President?” also touts a headline promising to explain how the Trump administration is destroying the U.S. Environmental Protection Agency.
Many Canadians will rejoice at the contrast — and, it’s true, few would exchange Trudeau’s golden aura for Trump’s tangerine tincture.
But the idea that Trudeau is getting everything right — particularly when it comes to balancing environmental protection and growing the economy — is fallacious.
The government is touting the International Monetary Fund’s forecast that Canada will lead the G7 in growth this year. But there is a lag before government action affects the economy. The warning this week from the Chamber of Commerce that Canada’s climate-change plan and other measures are raising the cost of doing business in this country to breaking point is a canary in the coal mine, gasping from exposure to the toxic gases of too many taxes and too much regulation.
This has not been a good week for the reputation of this country’s natural resource sector. On Tuesday, the $36-billion Pacific NorthWest liquefied natural gas project was cancelled, ostensibly because of poor global prices but really because of the reduced attractiveness of the Canadian market for investment.
This was compounded Wednesday by a Supreme Court of Canada decision to block seismic testing in Nunavut because of opposition by local Inuit, who said they had not been consulted adequately before the National Energy Board gave oil companies permission to search for oil and gas in northern waters.
There was some good news for industry in a companion Supreme Court decision that suggested the courts do not equate the constitutional duty to consult with a veto over development.
The court looked at a claim by the Chippewas of the Thames First Nation in southwest Ontario, who claimed they had not been consulted adequately over the reversal of the Enbridge-owned Line 9 pipeline between Sarnia and Montreal.
The court judged that the Chippewas were informed the National Energy Board would hold hearings; were granted funding to participate; and subsequently filed evidence outlining their concerns about increased ruptures and spills.
The NEB approved the project, on the basis that the impact of the reversal of an existing pipeline would be minimal and mitigated by conditions imposed on Enbridge. The Supreme Court agreed.
While the Court ruled the Chippewas were consulted, it said the Inuit of Clyde River were not given adequate opportunity to participate in the NEB process into offshore seismic testing for oil and gas in Nunavut.
The Court said the Inuit had a constitutional right to harvest marine mammals like whales, seals and polar bears. It said it was undisputed that the testing could negatively affect hunting rights and that the proponent of the project did not make clear to the Inuit what the impact might be, nor give sufficient opportunity for participation in the process. Unlike in the Line 9 case, there were no oral hearings and no participant funding.
“These cases demonstrate that the duty to consult has meaningful content but that it is limited in scope. The duty to consult is rooted in the need to avoid the impairment of asserted or recognized rights that flow from the implementation of the specific project at issue; it is not about resolving broader claims that transcend the scope of the proposed project,” the court concluded.
The Supreme Court appears to have struck a legitimate balance between rights and development that benefits Canadians. Ottawa, on the other hand, is still searching for symmetry.
In its most recent survey the Canadian Association of Petroleum Producers forecast that oil and gas capital expenditure in Canada will fall to $44 billion this year, nearly half the $81 billion spent in 2014.
CAPP blamed the dramatic change, in part, on “continuing uncertainty” in Canada’s policies and regulations, which are seen as “increasingly more stringent and costly.”
While politicians blamed poor global LNG conditions for the Pacific NorthWest decision, similar projects have gone ahead in Australia and the U.S.
The situation is likely to be compounded by changes to federal environmental assessment legislation being contemplated by the Trudeau government. The aim is to “restore trust” in the assessment process, according to the government but industry fears reviews will become the venue to implement broader public policy — notably on Indigenous reconciliation and climate change.
The expert panel that submitted its recommendations to the government urged that assessments move beyond the “bio-physical environment” to encompass all impacts likely to result from a project, according to the “five pillars of sustainability” — environmental, social, economic, health and cultural impacts.
Chamber of Commerce president Perrin Beatty said the changes would make the system “unworkable” and end of investment in Canada’s natural resources sector.
Beatty is not some swivel-eyed loon, bent on rapacious exploitation of the environment. His organization has backed carbon pricing while calling for the government to countervail cost increases with relief elsewhere.
But the balance of environmental protection and economic growth that Trudeau trumpets has been weighed heavily in favour of the former.
In addition to new carbon taxes, businesses find themselves facing rising electricity costs, federal government fee increases, Canada Pension Plan hikes, richer minimum wages and higher Employment Insurance rates than would have been the case had the government not increased EI costs.
Such is the flighty nature of international capital, Beatty’s warning may have come too late — the Canadian system may already have been judged unworkable and investment in new major energy projects reallocated to other jurisdictions.
The experience of Pacific NorthWest suggests projects can be approved and built elsewhere in the world more quickly and cheaply, with far less uncertainty than in Canada.
The Liberal government is going to have to create a more focused, predictable regulatory regime or Canadians will face a future of lower living standards, higher taxes and bigger debt. Glossy profiles in the house organ of middle-aged Democrats are poor compensation for that.
Many of you are not aware of my second career path – artist management – which I have not done for 4 years. I was privileged to work with Kenny Shields and Streetheart; Kenny passed away recently – he will be missed as a great person, artist, friend, father and husband.
5-years ago today, this photo was taken at the Travelodge in Saskatoon. It was of a supper with the artists I was working with at the time; Kenny Shields/Streetheart, Jully Black, and Donny Parenteau. See also http://www.ericandersonmanagement.com
To save the planet, we must ignore anti-nuclear ideologues
The Globe and Mail
Published Thursday, Jul. 20, 2017 5:01PM EDT
Last updated Thursday, Jul. 20, 2017 5:44PM EDT
There might be a way for the world to meet its carbon-reduction targets that does not involve building more nuclear power plants. The problem is, no one has come up with one. Until that happens, politicians need to get real about nuclear energy’s essential role in saving the planet.
Unfortunately, most of them still have their heads stuck in their solar panels.
The latest greener-than-thou politician to make the perfect the enemy of the good is France’s awkwardly titled Minister for the Ecological and Inclusive Transition, Nicolas Hulot. This month, Mr. Hulot announced the shutdown of as many as 17 of France’s 58 nuclear reactors over the next eight years as part of President Emmanuel Macron’s promise to cut his country’s reliance on nuclear-generated electricity to 50 per cent from 75 per cent by 2025.
Mr. Hulot says he has “absolute faith” in renewable power sources, mainly wind and solar energy, to fill the gap. But as Germany shows, closing emissions-free nuclear power plants, more often than not, leads to burning more fossil fuels to produce power. That’s because wind and solar remain intermittent power sources, while nuclear, coal and natural gas plants can run full-steam 24/7.
In a report last month, the International Energy Agency said “premature closure of operational nuclear power plants remains a major threat to meeting targets,” set under the 2015 Paris climate agreement, to prevent global temperatures from rising more than two degrees above preindustrial levels by the end of the century.
But don’t try telling that to Mr. Hulot. A former star television journalist tapped by Mr. Macron to boost his credibility with environmentalists, Mr. Hulot is France’s version of David Suzuki. In 2012, he sought the presidential nomination for France’s anti-nuclear Green Party. He appears unmoved by expert warnings that France will pay a heavy environmental and economic price if he sticks to his nuclear-reduction plan.
France has long been at the forefront of nuclear research and its nuclear industry, led by state-owned Areva and Électricité de France, is a global leader. But just as some Canadian ideologues want to shut down the oil sands, France’s green ideologues want to shut the country’s reactors.
This promises to be hugely expensive and, ironically, make it much harder for France to meet its greenhouse gas reduction targets under the Paris climate agreement. Wind and solar are unreliable power sources, so “we are obligated to have something else to take over” from nuclear, French climate scientist François-Marie Bréon told Agence France-Presse following Mr. Hulot’s announcement. That “something else” is inevitably fossil-fuel-generated electricity.
The French paradox is being repeated across Europe, where Germany, Spain, Belgium and Switzerland have committed to phasing out nuclear power. This will not only prevent the closing of the continent’s coal plants, it will also increase Europe’s dependence on Russian natural gas, making Vladimir Putin even more powerful than he is now.
In the United States, nuclear power is up against not only opposition from environmentalists but also against fierce lobbying by the powerful American Petroleum Institute. Without a carbon tax, cheap natural gas has hurt the competitiveness of existing nuclear plants. The API, which represents natural-gas producers, seeks to quash the financial incentives that some states provide to enable existing nuclear plants to stay open. Wind and solar power are heavily subsidized. So, the reasoning goes, why shouldn’t emissions-free nuclear power plants be similarly rewarded?
Keeping existing nuclear power plants open is only half the battle. The world needs more nuclear. China and India are adding nuclear power capacity but not fast enough to replace plants being closed in the developed world. Even Britain’s Hinkley nuclear station, set to open in 2026, won’t make up for British capacity reductions before then.
The IEA projects that nuclear capacity additions of 20 gigawatts annually are needed to meet the Paris accord targets by the year 2100, but the world is far off the mark. Nuclear “retirements due to phase-out policies in some countries, long-term operation limitations in others, or loss of competitiveness against other technologies” mean that as much as 50 GW of nuclear capacity could be lost by 2025 alone. Politicians who cave to the anti-nuclear lobby are deluding themselves or misleading voters when they insist wind and solar can make up the difference.
“Increasing nuclear capacity deployment could help bridge the [two-degree scenario] gap and fulfill the recognized potential of nuclear energy to contribute significantly to global decarbonization,” the IEA report said. It called for “clear and consistent policy support for existing and new capacity, including clean-energy incentive schemes for development of nuclear alongside other clean forms of energy.”
Vous écoutez, Monsieur Hulot?
WRITTEN BY JAMES EDWARD KAMIS, GUEST POST ON JANUARY 19, 2017
Antarctica’s Larsen Ice Shelf Break-Up driven by Geological Heat Flow Not Climate Change
Figure 1) North tip of Antarctic Continent including Larsen Ice Shelf Outline (black line), very active West Antarctica Rift / Fault System (red lines), and currently erupting or semi-active volcanoes (red dots).
Progressive bottom melting and break-up of West Antarctica’s seafloor hugging Larsen Ice Shelf is fueled by heat and heated fluid flow from numerous very active geological features, and not climate change.
This ice shelf break-up process has been the focus of an absolute worldwide media frenzy contending man-made atmospheric global warming is at work in the northwest peninsula of Antarctica.
As evidence, media articles typically include tightly edited close-up photos of cracks forming on the surface of the Larsen Ice Shelf (Figure 2) accompanied by text laced with global warming alarmist catch phrases.
This “advertising / marketing” approach does in fact produce beautiful looking and expertly written articles. However, they lack subsidence, specifically a distinct absence of actual scientific data and observations supporting the purported strong connection to manmade atmospheric global warming.
Working level scientists familiar with, or actually performing research on, the Larsen Ice Shelf utilize an entirely different approach when speaking about or writing about what is fueling this glacial ice break-up.
They ascribe the break-up to poorly understood undefined natural forces (see quote below). Unfortunately, comments by these scientists are often buried deep in media articles and never seem to match the alarmist tone of the article’s headline.
“Scientists have been monitoring the rift on the ice shelf for decades. Researchers told NBC News that the calving event was “part of the natural evolution of the ice shelf,” but added there could be a link to changing climate, though they had no direct evidence of it.” (see here)
Figure 2) An oblique view of crack in the Antarctic’s Larsen C ice shelf on November 10, 2016. (NBC News Article credit John Sonntag / NASA via EPA
This article discusses what more properly explains what is fueling the Larsen Ice Shelf break-up. A theory that is supported by actual scientific data and observations thereby strongly indicating that the above mentioned undefined natural forces are in fact geological.
Let’s begin by reviewing the map atop this article (Figure 1). This map is a Google Earth image of the local area surrounding, and immediately adjacent to, the Larsen Ice Shelf, here amended with proven active geological features.
If ever a picture told a thousand words this is it. The Larsen Ice Shelf lies in and among: twenty-six semi-active (non-erupting but heat-flowing) land volcanoes, four actively erupting land volcanoes, two proven semi-active seafloor volcano (seamounts), and a proven actively heat flowing major fault system named the West Antarctic Rift.
Not shown on this map are known seafloor hydro-thermal vents (hot seafloor geysers), likely heat emitting fractures, and prominent cone-shaped seafloor mountains that are most likely seamounts (ocean volcanoes).
This geological information paints a very clear and compelling picture that the Larsen Ice Shelf is positioned in an extremely active geological setting. In fact a strong case can be made that the Larsen Ice Shelf owes its very existence to a down-faulted low valley that has acted as a glacial ice container (see research on the Bentley Subglacial Trench of the West Antarctic Rift / Fault).
Next let’s review in more detail a few of the key very local areas on the Figure 1 map which will help clarify the power and recent activity of these areas.
First up, the Seal Nunataks area which is labeled on the Figure 1 map as “16 Semi-Active Volcanoes“. In general, these volcanoes lie within and push up through the northern portion of the Larsen Ice Shelf (Figure 3).
More specifically, the Larsen Ice Shelf is formally divided into three sub-areas: northern “A” segment, central “B” segment, and southern “C” segment. The 16 Seal Nunataks‘ volcanoes are strongly aligned in a west to east fashion and are designated as the boundary between the Larsen “A” and B” segments.
This 50-mile-long and 10-mile-wide chain of visible land volcanoes has likely been continuously volcanically active for at least the last 123 years based on limited amounts of data from this remote and largely unmonitored area.
Each time humans have visited this area they have recorded obvious signs of heat and heated fluid flow in the form of: fresh lava flows on volcanoes, volcanic ash on new snow, and volcanic debris in relatively new glacial ice. Remember, these observations only document volcanic activity on exposed land surfaces, and not the associated volcanic activity occurring on the seafloor of this huge volcanic platform.
More modern research published in 2014 by Newcastle University is here interpreted to indicate that the Larsen “B” portion of the greater Larsen Ice Shelf pulsed a massive amount of heat in 2002. Research elevation instruments showed that a huge portion of the Larsen “B” area quickly rose up, likely in response to swelling of underlying deep earth lava pockets (mantle magma chambers).
This process heated the overlying uplifted ground. This heated ground then acted to bottom melt the overlying glaciers (quote below). This is an awesome display of the power geologically induced heat flow can have on huge expanses of glacial ice.
“Scientists led by Newcastle University in the UK studied the impact of the collapse of the giant Larsen B ice shelf in 2002, using Global Positioning System (GPS) stations to gauge how the Earth’s mantle responded to the relatively sudden loss of billions of tonnes of ice as glaciers accelerated. As expected, the bedrock rose without the weight but at a pace ‚Äì as much as 5 centimetres a year in places ‚Äì that was about five times the rate that could be attributed by the loss of ice mass alone”, said Matt King, now at the University of Tasmania (UTAS), who oversaw the work.
“It’s like the earth in 2002 was prodded by a stick, a very big stick, and we’ve been able to watch how it responded,” Professor King said. “We see the earth as being tremendously dynamic and always changing, responding to the forces.” Such dynamism – involving rocks hundreds of kilometres below the surface moving “like honey” – could have implications for volcanoes in the region. Professor King said. (see here)
Figure 3) Map of the Seal Nunataks 16 Semi-active volcanoes relative to the three Larsen Ice Shelf segments, “A”, “B”, and “C” (see here). Also, a historical aerial photo of several Seal Nunatak volcanic cones pushing up through the Larsen Ice Shelf.
It is clear that the vast Seal Nunataks’ volcanic plateau at the very least pulsed significant amounts of heat and likely heated fluid flow in the following years: 1893, 1968, 1982, 1985, 1988, 2002, 2010.
The next key local area on the Figure 1 map is portion labeled as “6 Semi-Active Volcanoes” of which two are seamounts (seafloor volcanoes) and four are land volcanoes. All of these geological features are known to be currently emitting heat and heated fluid flow, however the rate and volume of this flow is not well understood. The most noteworthy feature is Deception Island, which is a huge six-mile-wide collapsed land volcano (caldera).
This volcanic feature: extends a great distance outward and downward into the surrounding ocean, has been earthquake active in the years 1994 / 1995 / 1996, and has moderately erupted in the years 1820, 1906 / 1910 / 1967 / 1969 / 1992.
Early explorers used the harbor created by this collapsed volcano, however, on occasion they had to abandon their moorings when the seawater in the harbor boiled (see quote below). More modern research stations in the 1960s had to temporarily abandon the island due to moderate eruptions.
“The fifth volcano, off the northern tip of the Antarctic Peninsula, is a crater that has been ruptured by the sea to form a circular harbor known as Deception Island. Beginning in the 1820s, it was used as shelter by sealing fleets from New England and later by whalers.
On occasion, water in that harbor has boiled, peeling off bottom paint from the hulls of ships that did not escape in time. An eruption a decade ago damaged research stations established there by both Britain and Chile.
This volcano and the two newly discovered ones on the opposite side of the peninsula, the longest on earth, are thought to be formed by lava released from a southeastward-moving section of the Pacific floor that is burrowing under the peninsula in the same process thought to have formed the Andean mountain system farther north, in South America.” (see here)
The last two key local areas on the Figure 1 map are labeled as “1 Erupting and 5 Semi-Active Volcanoes” and “3 Erupting Volcanoes. These two areas represent major currently erupting land volcanoes that are spewing huge amount of ash into the atmosphere, and most importantly, massive amounts of heat and heated fluid flow into the surrounding ocean (see here and here).
These ongoing eruptions all lie along, and are generated by, deep earth faulting associated with the northern extension of the West Antarctic Rift / Fault System (red lines on Figure 1 map). The reader is directed to previous Climate Change Dispatcharticles detailing heat flow and volcanic activity along this West Antarctic 5,000-mile-long fault system (see here and here)
Reviewing how mega-geological forces drive Earth’s internal heat engine also has direct bearing on what is fueling the Larsen Ice Shelf Break-up as follows:
- Earth is undergoing an extremely active period of volcanic and earthquake activity during the last three years especially major deep ocean fault systems such as those associated with the Pacific Rim of Fire and Icelandic Mid-Atlantic Ocean Rift. It makes perfect sense that the West Antarctic Rift / Fault System which underlies the Larsen Ice Shelf has also become more active of during this time frame.
- The 2015-2016 El Ni√±o Ocean “Warm Blob” has now been proven to be caused / generated by “natural forces”, and not manmade or other purely atmospheric forces. These natural forces are almost certainly geological as per numerous previous Climate Change Dispatch articles (see hereand here). If geological forces have the power to warm the entire Pacific Ocean, they can certainly act to warm the ocean beneath the Larsen Ice Shelf.
- Climate scientists favoring manmade Global Warming continue to force fit all anomalous warming events into an atmospheric framework because this is the only abundant data source they have available. However, there is very little global atmospheric data that supports rapid local Larsen Ice Shelf melting or local rapid ocean warming. Most global atmospheric data indicates that the Antarctic atmosphere is cooling or not changing temperature.
- The surface of our planet is 70% water and 90 % of all active volcanoes are present on the floor of Earth’s oceans. Quite amazingly only 3-5% of the ocean floors have been explored by human eyes, and virtually none of this area is monitored. This is especially true in the nearly unexplored / completely unmonitored deep regions of the oceans in and around the Larsen Ice Shelf.
- It just makes sense that if major rift / fault zones that from the boundary of Earth’s outer crustal plates that have the power to move entire continents 1-2inches per year, certainly have the power to warm oceans as per the Plate Climatology Theory. The Weddell Sea which surrounds the Larsen Ice Shelf, no problem.
In summary huge amounts of research and other readily available information clearly indicates that the Larsen Ice shelf lies within a geologically active region. Media reports that do not mention this aspect relative to the potential cause of bottom melting and subsequent break-up of the Larsen “A”, “B”, and “C” glaciers are best characterized as “Fake News” and not “97% Proven / the Debate is Over” news.
Thankfully there are smaller media venues such as Climate Change Dispatch that provide scientists with a platform to present viable alternative explanations to complicated climate and climate-related events, specifically in this case…. Antarctica’s Larsen Ice Shelf Break-Up is Fueled by Geological Heat Flow and Not Climate Change.
James Edward Kamis is a Geologist and AAPG member of 42 years with a B.S. and M.S. in geology who has always been fascinated by the connection between Geology and Climate. More than 12 years of research / observation have convinced him that the Earth’s Heat Flow Engine, which drives the outer crustal plates, is also an important driver of the Earth’s climate. The Plate Climatology Theory (plateclimatology.com) was recently presented / published at the annual 2016 American Meteorological Society Conference in New Orleans, LA. (see here)
http://news.nationalgeographic.com/2016/11/foehn-winds-melt-ice-shelves-antarctic-peninsula-larsen-c/ Warm Winds not Climate Change but from Geologically Warmed Ocean.
http://www.seeker.com/three-volcanoes-erupting-nasa-satellite-2031377713.html Three Volcanoes North of Antarctica Erupt at Once
http://earthobservatory.nasa.gov/IOTD/view.php?id=87995 Bristol Island Eruption May 1, 2016
http://www.ldeo.columbia.edu/research/blogs/operation-icebridge-scientists-map-thinning-ice-sheets-antarctica Lamont Doherty Involvement in Operation Ice Bridge Antarctica
http://www.academia.edu/5715929/Volcanic_tremors_at_Deception_Island_South_Shetland_Islands_Antarctica Deception Island South Shetland Islands Antarctica
http://www.smh.com.au/environment/fire-and-ice-melting-antarctic-poses-risk-of-volcanic-activity-study-shows-20140520-zrj06.html Mantle Under Larsen Shelf Rises and Activates Volcanoes.
http://earthsky.org/earth/new-glimpse-of-geology-under-antarcticas-ice Bentley Subglacial Trench in West Antarctica
https://www.nasa.gov/pdf/121653main_ScambosetalGRLPeninsulaAccel.pdf Map Larsen Ice Shelf
http://www.sciencedirect.com/science/article/pii/089598119090022S Deception Island and Bransfield Strait
Why Commodity Traders Are Fleeing the Business
The number of trading houses has dwindled, and the institutional, pure-play commodity hedge funds that remain are few.
By Shelley Goldberg
July 12, 2017, 3:00 AM CST July 12, 2017, 11:32 AM CST
Copper, the “beast” of commodities.
Photographer: John Guillemin/Bloomberg
Profiting from commodity trading often requires a combination of market knowledge, luck, and most importantly, strong risk management. But the number of commodity trading houses has dwindled over the years, and the institutional, pure-play commodity hedge funds that remain — and actually make money — can be counted on two hands. Here is a list of some of the larger commodity blow-ups:
The largest and most successful commodity trading house in its day caved, triggered by copper trading
The New York branch of this large German conglomerate lost $1.5 billion in heating oil and gasoline derivatives
Yasuo Hamanaka blamed for $2.6 billion loss in copper scandal
Dissolves after misreporting natural gas trades, resulting in Arthur Andersen, a ‘Big 5’ accounting firm’s fall from grace
Energy hedge fund folds after losing over $6 billion on natural gas futures
One of the best-performing hedge funds in 2011, closed its doors in 2012, shrinking from $2 billion to $1.2 billion on crude oil bets
Brevan Howard Asset Management
One of the largest hedge funds globally. Closed its $630 million commodity fund after having run well over $1 billion of a $42 billion fund
The sister and energy trading arm of Phillip Brothers, ranked (1980) the 15thlargest U.S. company, dissolves
Vermillion Asset Management
Private-equity firm Carlyle Group LP split with the founders of its Vermillion commodity hedge fund, which shrank from $2 billion to less than $50 million.
Amid the mayhem, banks held tightly to their commodity desks in the belief that there was money to be made in this dynamic sector. The trend continued until the implementation of the Volcker rule, part of the Dodd-Frank Act, which went into effect in April 2014 and disallowed short-term proprietary trading of securities, derivatives, commodity futures and options for banks’ own accounts. As a result, banks pared down their commodity desks, but maintained the business.
Last week, however, Bloomberg reported that Goldman Sachs was “reviewing the direction of the business” after a multi-year slump and yet another quarter of weak commodity prices.
In the 1990s boom years, commodity bid-ask spreads were so wide you could drive a freight truck through them. Volatility came and went, but when it came it was with a vengeance, and traders made and lost fortunes. Commodity portfolios could be up or down about 20 percent within months, if not weeks. Although advanced trading technologies and greater access to information have played a role in the narrowing of spreads, there are other reasons specific to the commodities market driving the decision to exit. Here are the main culprits:
- Low volatility: Gold bounces between $1,200 and $1,300 an ounce, WTI crude straddles $45 to $50 per barrel, and corn is wedged between $3.25 and $4 a bushel. Volatility is what traders live and breathe by, and the good old days of 60 percent and 80 percent are now hard to come by. Greater efficiency in commodity production and consumption, better logistics, substitutes and advancements in recycling have reduced the concern about global shortages. Previously, commodity curves could swing from a steep contango (normal curve) to a steep backwardation (inverted curve) overnight, and with seasonality added to the mix, curves resembled spaghetti.
- Correlation: Commodities have long been considered a good portfolio diversifier given their non-correlated returns with traditional asset classes. Yet today there’s greater evidence of positive correlations between equities and crude oil and Treasuries and gold.
- Crowded trades: These are positions that attract a large number of investors, typically in the same direction. Large commodity funds are known to hold huge positions, even if these only represent a small percent of their overall portfolio. And a decision to reverse the trade in unison can wipe out businesses. In efforts to eke out market inefficiencies, more sophisticated traders will structure complex derivatives with multiple legs (futures, options, swaps) requiring high-level expertise.
- Leverage: Margin requirements for commodities are much lower than for equities, meaning the potential for losses (and profits) is much greater in commodities.
- Liquidity: Some commodities lack liquidity, particularly when traded further out along the curve, to the extent there may be little to no volume in certain contracts. Futures exchanges will bootstrap contract values when the markets close, resulting in valuations that may not reflect physical markets and grossly swing the valuations on marked-to-market portfolios. Additionally, investment managers are restricted from exceeding a percentage of a contract’s open interest, meaning large funds are unable to trade the more niche commodities such as tin or cotton.
- Regulation: The Commodity Futures Trading Commission and the Securities and Exchange Commission have struggled and competed for years over how to better regulate the commodities markets. The financial side is far more straightforward, but the physical side poses many insurmountable challenges. As such, the acts of “squeezing” markets through hoarding and other mechanisms still exist. While the word “manipulation” is verboten in the industry, it has reared its head over time. Even with heightened regulation, there’s still room for large players to maneuver prices — for example, Russians in platinum and palladium, cocoa via a London trader coined “Chocfinger,” and a handful of Houston traders with “inside” information on natural gas.
- Cartels: Price control is not only a fact in crude oil, with prices influenced by the Organization of Petroleum Exporting Countries but with other, more loosely defined cartels that perpetuate in markets such as diamonds and potash.
- It’s downright difficult: Why was copper termed “the beast” of commodities, a name later applied to natural gas? Because it’s seriously challenging to make money trading commodities. For one, their idiosyncratic characteristics can make price forecasting practically impossible. Weather events such as hurricanes and droughts, and their ramifications, are difficult to predict. Unanticipated government policy, such as currency devaluation and the implementation of tariffs and quotas, can cause huge commodity price swings. And labor movements, particularly strikes, can turn an industry on its head. Finally, unlike equity prices, which tend to trend up gradually like a hot air balloon but face steep declines (typically from negative news), commodities have the reverse effect — prices typically descend gradually, but surge when there’s a sudden supply shortage.
What are the impacts? The number of participants in the sector will likely drop further, but largely from the fundamental side, as there’s still a good number of systematic commodity traders who aren’t concerned with supply and demand but only with the market’s technical aspects. This will keep volatility low and reduce liquidity in some of the smaller markets. But this is a structural trend that feasibly could reverse over time. The drop in the number of market makers will result in inefficient markets, more volatility and thus, more opportunity. And the reversal could come about faster should President Donald Trump succeed in jettisoning Dodd-Frank regulations.
(Corrects attribution of Goldman’s review of commodity operations in third paragraph.)
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Fear of radiation is more dangerous than radiation itself
By David Ropeik:
He is an instructor in the environmental programme of the Harvard Extension School, and an author, consultant and public speaker who focuses on risk perception, communication and management. His latest book is How Risky Is it, Really? Why Our Fears Don’t Always Match the Facts (2010). He lives near Boston, Massachusetts.
Photo by Gregg-Webb-IAEA
The fear of ionising (nuclear) radiation is deeply ingrained in the public psyche. For reasons partly historical and partly psychological, we simply assume that any exposure to ionising radiation is dangerous. The dose doesn’t matter. The nature of the radioactive material doesn’t matter. The route of exposure – dermal, inhalation, ingestion – doesn’t matter. Radiation = Danger = Fear. Period.
The truth, however, is that the health risk posed by ionising radiation is nowhere near as great as commonly assumed. Instead, our excessive fear of radiation – our radiophobia – does more harm to public health than ionising radiation itself. And we know all this from some of the most frightening events in modern world history: the atomic bombings of Japan, and the nuclear accidents at Chernobyl and Fukushima.
Much of what we understand about the actual biological danger of ionising radiation is based on the joint Japan-US research programme called the Life Span Study (LSS) of survivors of Hiroshima and Nagasaki, now underway for 70 years. Within 10 kilometres of the explosions, there were 86,600 survivors – known in Japan as the hibakusha – and they have been followed and compared with 20,000 non-exposed Japanese. Only 563 of these atomic-bomb survivors have died prematurely of cancer caused by radiation, an increased mortality of less than 1 per cent.
While thousands of the hibakusha received extremely high doses, many were exposed to moderate or lower doses, though still far higher than those received by victims of the Chernobyl or Fukushima nuclear accidents. At these moderate or lower doses, the LSS found that ionising radiation does not raise rates of any disease associated with radiation above normal rates in unexposed populations. In other words, we can’t be sure that these lower doses cause any harm at all, but if they do, they don’t cause much.
And regardless of dose, the LSS has found no evidence that nuclear radiation causes multi-generational genetic damage. None has been detected in the children of the hibakusha.
Based on these findings, the International Atomic Energy Agency estimates that the lifetime cancer death toll from the Chernobyl nuclear accident might be as high as 4,000, two-thirds of 1 per cent of the 600,000 Chernobyl victims who received doses high enough to be of concern. For Fukushima, which released much less radioactive material than Chernobyl, the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) predicts that ‘No discernible increased incidence of radiation-related health effects are expected among exposed members of the public or their descendants.’
Both nuclear accidents have demonstrated that fear of radiation causes more harm to health than radiation itself. Worried about radiation, but ignoring (or perhaps just unaware of) what the LSS has learned, 154,000 people in the area around the Fukushima Daiichi nuclear plants were hastily evacuated. The Japan Times reported that the evacuation was so rushed that it killed 1,656 people, 90 per cent of whom were 65 or older. The earthquake and tsunami killed only 1,607 in that area.
The World Health Organization found that the Fukushima evacuation increased mortality among elderly people who were put in temporary housing. The dislocated population, with families and social connections torn apart and living in unfamiliar places and temporary housing, suffered more obesity, heart disease, diabetes, alcoholism, depression, anxiety, and post-traumatic stress disorder, compared with the general population of Japan. Hyperactivity and other problems have risen among children, as has obesity among kids in the Fukushima prefecture, since they aren’t allowed to exercise outdoors.
Though Chernobyl released far more radioactive material than Fukushima, fear caused much more health damage still. In 2006, UNSCEAR reported: ‘The mental health impact of Chernobyl is the largest public health problem caused by the accident to date … Rates of depression doubled. Post-traumatic stress disorder was widespread, anxiety and alcoholism and suicidal thinking increased dramatically. People in the affected areas report negative assessments of their health and wellbeing, coupled with … belief in a shorter life expectancy. Life expectancy of the evacuees dropped from 65 to 58 years. Anxiety over the health effects of radiation shows no signs of diminishing and may even be spreading.’
The natural environment around the Chernobyl and Fukushima Daiichi accidents adds evidence that ionising radiation is less biologically harmful than commonly believed. With people gone, those ecosystems are thriving compared with how things were before the accidents. Radiation ecologists (a field of study that blossomed in the wake of Chernobyl) report that radiation had practically no impact on the flora and fauna at all.
The risk from radiophobia goes far beyond the impacts in the immediate area around nuclear accidents. Despite the fact that radiation released from Fukushima produced no increase in radiation-associated diseases, fear of radiation led Japan and Germany to close their nuclear power plants. In both nations, the use of natural gas and coal increased, raising levels of particulate pollution and greenhouse gas emissions.
Neither country will meet its 2020 greenhouse gas emissions-reduction targets. Across Europe, fear of radiation has led Germany, France, Spain, Italy, Austria, Sweden and Switzerland to adopt policies that subsidise solar, wind and hydropower over nuclear as a means of reducing greenhouse gas emissions, despite the fact that most energy and climate-change experts say that intermittent renewable energy sources are insufficient to solve the problem. In the United States, 29 state governments subsidise wind and solar power, but only three offer incentives for nuclear, which produces far more clean power, far more reliably.
Fear of radiation has deep roots. It goes back to the use of atomic weapons, and our Cold War worry that they might be used again. Modern environmentalism was founded on fear of radioactive fallout from atmospheric testing of such weapons. A whole generation was raised on movies and literature and other art depicting nuclear radiation as the ultimate bogeyman of modern technology. Psychologically, research has found that we worry excessively about risks that we can’t detect with our own senses, risks associated with catastrophic harm or cancer, risks that are human-made rather than natural, and risks that evoke fearful memories, such as those evoked by the very mention of Chernobyl or Three Mile Island. Our fear of radiation is deep, but we should really be afraid of fear instead.