HYDROCARBONS ARE AN ALBATROSS

SNC-Lavalin shares spike after announcing sale of resources oil and gas business

SNC-Lavalin Group Inc. shares surged more than 11 per cent after the company took steps to reduce risks by moving away from construction and oil to focus on its engineering services business.

© Provided by The Canadian Press

The shares gained $2.52 to $25.31 in Tuesday trading on the Toronto Stock Exchange after dipping to an intraday low of $22.62.

The gains came after the Montreal-based company signed a deal to sell its resources oil and gas business to Kentech Corporate Holdings Ltd.

The business, which represents about 90 per cent of SNC's resources segment revenues, includes a backlog of $745 million and about 7,100 employees.

The transaction is expected to close in the second quarter, subject to regulatory approvals and customary closing conditions.

SNC said the oil and gas business will be classified as an "asset held for sale" in its fourth quarter of 2020 and is expected to result in a fair value writedown in the range of $260 million to $295 million.

At closing, the company said the transaction is expected to generate a gain on the sale in excess of the fair value writedown, after accounting for the elimination of a foreign exchange adjustment.

A charge of $95 million on the retained resources business will also be taken in the fourth quarter of 2020.

"The sale of the oil and gas business further simplifies ... our business and allows us to enhance our focus on growing our high potential core engineering services business," stated CEO Ian Edwards.

SNC decided to dramatically alter its business strategy in July 2019 after sustaining heavy losses from large projects that often generated cost overruns.

The company also announced that it has completed a review of its legacy litigation and commercial claims and will increase its provisions by $140 million and reduce its commercial claims receivable by $155 million.

In addition, following a review of its remaining three Canadian light rail infrastructure projects, SNC says it will take a $90-million charge, most of which it says is due to COVID-19 challenges and the decision to not recognize associated revenue at this time.

It said the projects are progressing well but strict lockdowns have restricted the number of workers it can get to these sites.

The REM electric train project in Montreal is 40 per cent complete, the Trillium Line in Ottawa is expected to be 80 per cent done by the end of the year, and the Eglinton Crosstown in Toronto is most advanced at 80 per cent complete.

Edwards told analysts during a conference call that the company's efforts are better focused on growing its business than continuing to toil to make the oil and gas business being sold more profitable.

Industry analysts said the changes should allow SNC to alter its focus.

"Overall, the charges/provisions cause noise in the near-term, but these announcements do put the oil and gas business in the rear view, and should allow the company to focus on the engineering services and nuclear business going forward," stated Sabahat Khan of RBC Dominion Services.

Added Benoit Poirier of Desjardins Capital Markets: "We believe these announcements will significantly derisk the story by reducing the company’s exposure to resources LSTK (lump-sum turnkey) projects, the biggest source of risk for SNC."

The company's financial results should be much more predictable beginning in the first quarter, which should trigger a narrowing in the valuation gap between SNC and its peers, added Yuri Lynk of Canaccord Genuity.

"Once the REM, Trillium, and Eglinton LSTK projects are completed, the company will be operating essentially as a highly predictable and cash generative fee-for-service business."

This report by The Canadian Press was first published Feb. 9, 2021.

Companies in this story: (TSX:SNC)

Ross Marowits, The Canadian Press

State actors have done 'significant harm' to Canadian companies, says head of spy agency

NO MENTION OF USA CIA 

© Sean Kilpatrick/The Canadian Press CSIS director David Vigneault holds a press conference on Parliament Hill in Ottawa on Thursday, July 16, 2020. In a speech today, he warned that "the greatest strategic threat to Canada's national security comes from…

The head of Canada's spy agency said today Canadian companies in almost all sectors of the economy have been targeted by hostile foreign actors — and named Russia and China as two of his main sources of concern.

"The threat from hostile activity by state actors in all its forms represents a significant danger to Canada's prosperity and sovereignty," said David Vigneault, director of the Canadian Security Intelligence Service, in his first public speech in three years.

"Our investigations reveal that this threat has unfortunately caused significant harm to Canadian companies."

Vigneault said Canada's biopharmaceutical, health, artificial intelligence, quantum computing, ocean technology and aerospace sectors face particularly severe threat activity because they work largely within academia and small start-ups.

"They have been compromised and have suffered losses from human and cyber-enabled threats," he said in a virtual speech to the Centre for International Governance Innovation.

"CSIS has observed persistent and sophisticated state-sponsored threat activity for many years now and we continue to see a rise in the frequency and sophistication of this threat activity."

Vigneault's speech builds off his 2018 address sounding the alarm over economic espionage — a growing source of concern for the intelligence agency, which historically has focused on countering violent extremism.

"While violent extremism remains an ongoing threat to our safety and a significant preoccupation for CSIS, the greatest strategic threat to Canada's national security comes from hostile activities by foreign states," Vigneault said today.

"Historically, spies were focused on obtaining Canadian political, military and diplomatic secrets. While these secrets are still attractive, today our adversaries are more focused on intellectual property and advanced research held on computer systems in small start-ups, corporate boardrooms, or university labs across the country."

State actors target employees, students

The director singled out Russia and China as bad actors — another shift for the intelligence community in the past few years.

"It is no secret that we are most concerned about the actions by the governments of countries like Russia and China. But we should also not discount that threat activity evolves and can originate from anywhere in the world," he said.

Hostile actors are known to target employees, former employees, students, professors, contractors and business associates to gain access to an organization's IT systems, he said.

"An insider acting at the behest of a threat actor can compromise a system and cause damage, or open a backdoor to allow access from across the street or across the ocean. They can steal information outright, and walk it out the door on a flash drive," Vigneault said.

While Vigneault has talked about the covert actions of Russia and China in front of parliamentary committees, his comments today mark the first time he has named the two countries in a speech.

Food, supply flights grounded, operations halted as protest continues at Nunavut mine

IQALUIT, Nunavut — Flights have been grounded and most operations suspended at an open-pit iron ore mine on Nunavut's Baffin Island as protesters upset about its expansion plan continue to block the site's road and air strip.

© Provided by The Canadian Press

Hunters from Arctic Bay and Pond Inlet set up the blockade last Thursday, after travelling two days by snowmobile to get to Baffinland's Mary River mine.

The mine, which is about 150 kilometres south of Pond Inlet, works on a rotating schedule, with employees flying in and out every few weeks. The company said there are 700 workers currently at the site.

"Food and supply flights have been suspended, as well as employee and contractor transfers, search and rescue flights, and other North Baffin air traffic support services provided by the Mary River airstrip," Baffinland said in a statement Monday.

The company said it has had numerous meetings with organizers at the blockade and in Pond Inlet. It also said it has asked the hunters to "relocate off the airstrip and allow runway maintenance to take place and flights to resume.

"So far these discussions have not yielded any progress," Baffinland said.

The hunters said they set up the blockade because their voices aren't being heard at environmental hearings on the mine's proposed expansion.

The expansion, if approved, would double its iron ore output to 12 million tonnes and build a 110-kilometre railway from the mine to the ocean to transport it. The railway would be the first in Nunavut and the most northern one in Canada.

Some hunters and community members in the North Baffin region have also said they worry the mining company is moving too fast and not properly considering the effects an expansion would have on wildlife, including narwhal and caribou.

The protest group stationed at the air strip and mining road has grown to include 15 hunters. Rallies in support of the hunters also took place across Nunavut on Monday.

In Iqaluit, where the temperature hovered around an unusually warm 3 C, a group of about a dozen people gathered outside the elders' centre.

Abraham Kublu, who grew up in Pond Inlet and sat on its hamlet council for 17 hears, held a sign in Inuktitut that said Baffinland is rushing its expansion.

"We should be respecting our land. For so many years, the community of Pond Inlet has been raising a lot of concerns," Kublu said.

Kublu said he believes Baffinland doesn't have enough information about how the mine's expansion would affect wildlife on the north side of Baffin Island.

In Taloyoak, in western Nunavut, protesters gathered carrying cardoard signs, with some reading, "We support Pond Inlet and Arctic Bay" and "No to Baffinland."

In Pond Inlet on Friday and Saturday, when the temperature was about -38 C, protesters gathered outside the community hall while hearings on the mine's proposed expansion took place.

Among the concerns are that caribou will not be able to cross the proposed railway and increased ship traffic will drive away marine mammals.

The mine’s shipping port in Milne Inlet opens onto narwhal habitat and lies within Tallurutiup Imanga, a national marine conservation area. The proposed expansion would see 176 ships travel in and out of Milne Inlet each year.

“If they start doing 12 million tonnes a year, our marine mammals will be completely extinguished in our area," Inuarak said.

Mumilaaq Qaqqaq, Nunavut's member of Parliament, said in a statement her office has reached out to federal Minister of Natural Resources Seamus O'Regan "to attempt to mediate the situation at Mary River."

"The ongoing protests are about encouraging continued consultations and dialogue. I look forward to Baffinland, the minister and community members being able to sit back at the table and discuss how to move forward in everyone's best interests," Qaqqaq said.

Baffinland has said its expansion plans will include mitigation measures to protect wildlife, such as caribou crossings on the railway and reduced ship speeds to minimize disturbances to marine life.

The company has also signed a benefit agreement worth $1 billion over the life of the mine with the Qikitani Inuit Association, the regional Inuit organization that represents the affected communities. The agreement will only take effect if the expansion is approved.

This report by The Canadian Press was first published Feb. 8, 2021.

Emma Tranter, The Canadian Press

Work on Trans Mountain pipeline resumes after safety review

The expansion of the Trans Mountain pipeline is once again underway after the company suspended all work following the death of one worker and serious injury of another.

© The Canadian Press Construction work continues on the

 Trans Mountain pipeline along Airport Road at 

Tranquiile Road in Kamloops, British Columbia on October 9, 2020.

Construction was stopped on Dec. 17, 2020, to allow the company to do a safety review, with the company saying: "We must improve the safety culture and performance on our project.”

Read more: Entire Trans Mountain expansion work halted until 2021 after workers killed, injured on the job

In a news release on Monday, Trans Mountain said the restart process has begun, and the 7,000 workers would be heading back to their sites.

"As part of the safety stand down process and the investigations into the incidents, the company and its contractors identified opportunities for enhancements to safety measures, some of which may have been contributing factors to the events of the past few months," the company said.

"The company focused on and reviewed matters of compliance, communication, near-miss worksite reviews and reporting, and workers’ fitness for duty, as a post-incident investigation revealed an isolated case of a worker failing a drug and alcohol test."

Read more: Father of 4 identified as worker killed at Trans Mountain pipeline site in west Edmonton

Trans Mountain said the Canada Energy Regulator and other regulators are still independently investigating the incidents, which the company is co-operating fully with.

Trans Mountain said it has taken "immediate steps to enhance the safety culture" and to ensure procedures and practices at its various workplaces are "of the highest safety standards."

"The restart process will begin with the safety re-training and re-orientation of all supervisors and workers – before construction resumes," Trans Mountain said.

"All employees and management are personally committed to keeping all aspects of workplace safety paramount, so all workers will remain safe on the job and go home safely each day to their loved on

According to its website, specific safety enhancements at Trans Mountain include:

More rigorous job-site safety training, particularly regarding the safe operation of equipment in proximity to other workers and communication between workers

Enhanced worksite inspections and regular audits

Rigorous incident and near-miss reporting supported by corrective action plans and systems

Upgraded communications equipment and protocols for its effective operation on job sites

Strengthened site supervision and the identification of daily site safety champions

Better prior safety planning around higher-risk work, including the completion of detailed worksite plans to control personnel movements, heavy equipment locations and supervisory responsibilities

Augmented fitness for duty assessments, including drug and alcohol testing

Increased hiring and training of personnel specifically responsible for ensuring safety during higher-risk work and day-to-day operations

The new safety protocols are in addition to COVID-19 protocols that are already in place, the company said.

A worker was seriously injured and hospitalized on Dec. 15 during an on-site incident at the Burnaby Terminal in B.C., where the 1,150-kilometre long pipeline ends.

That was seven weeks after a 40-year-old employee of a contractor leading the pipeline work in Edmonton died at the worksite just outside the city.

Samatar Sahal was caught and pinned under a crossbeam of a trench box that was being disassembled.

-- With files from Global News' Karen Bartko

Polar vortex breaks temperature records across Prairies, bitter cold expected to linger

© Kayle Neis/The Canadian Press

 A pedestrian walks by River Landing beside the South Saskatchewan River during an extreme cold warning in Saskatoon, Sask. in this file photo from Jan. 25, 2021. 

A polar vortex continues to bring bitter cold to the Prairies, resulting in cancellations of schools and buses in all major Prairie cities.

A mass of cold air arrived on Sunday, setting daily temperature records in Alberta, Saskatchewan and Manitoba.

According to Environment Canada, 22 cold-weather records were broken throughout the three provinces.

The coldest temperature was recorded in Uranium City, about 1,045 kilometres northwest of Regina, where it was –48.9 C, breaking a previous record of –40 C set in 2019.

In Alberta, the lowest temperature was recorded in Fort Chipewyan, about 710 km northeast of Edmonton, where it was –47.3 C, breaking the previous record of –45.6 C set in 1936.

Edmonton International Airport was close to breaking a daily record. The temperature reached a low of –43.8 C, with the previous record set on the same day in 1994 at –43.9 C.

In Manitoba, the temperature was a bit higher — but not by much. The community of Roblin, about 405 km northwest of Winnipeg, set a new record of –42 C, breaking the previous record of –40.6 set in 1972.
Bone-chilling cold here to stay

Monday will be another brutal day of bone-chilling temperatures for the Prairies.

Environment Canada has issued an extreme cold weather warning for most of Alberta and Manitoba and for the entire province of Saskatchewan.

"An Arctic ridge of high pressure has allowed for a very cold air mass to settle over southern Saskatchewan and southern Manitoba," the weather agency said on its website.

Along with winds of 10 to 20 km/h, extreme wind chill values between –40 and –50 are expected over most of southern Saskatchewan.

In Alberta, including Edmonton and Calgary, temperatures will feel like –55 with the wind chill factored in.

Environment Canada says the bitterly cold air will remain over the Prairies for much of the next week.

Schools, buses cancelled throughout Prairies

Aside from bringing in record-low temperatures, the bitter cold has also brought many students a day off.

Buses have been cancelled by school divisions in major Prairie cities including Winnipeg, Regina, Saskatoon and Edmonton.

© Evan Mitsui/CBC

Buses were cancelled by school divisions in major cities across the Prairies.

Most school buses do not run if temperatures feel like –40 to –45 with the wind chill, depending on the division.

Additionally, several school divisions throughout Alberta and Manitoba have closed schools or cancelled classes, citing safety concerns brought on by the cold.

In Saskatchewan, schools remain open.

See a billion years of Earth plate tectonics movement in just 40 seconds

Carole King's song I Feel the Earth Move would be the perfect soundtrack for a stunning new video that shows a billion years of plate tectonic movement on Earth condensed into 40 seconds.

© The international Gemini Observatory/NSF's National Optical-Infrared Astronomy Research Laboratory

This image of Earth was captured by NASA.

An international team of geoscientists created a model of tectonics that lets us witness the radical changes in how our planet looked over an eon of time. Continents shift. Oceans reshape. The world is almost unrecognizable until we move closer to modern times.

Plate tectonics is a theory about large pieces of rock ("plates") that move over the planet's mantle. These plates can account for radical changes in the locations of landmasses over long stretches of time.

The scientists published a paper on the model in the March 2021 issue of the journal Earth-Science Reviews.

"On a human timescale, things move in centimeters per year, but as we can see from the animation, the continents have been everywhere in time," said co-author Michael Tetley in a University of Sydney statement on Monday. "A place like Antarctica that we see as a cold, icy inhospitable place today actually was once quite a nice holiday destination at the equator."

The video isn't just a novelty. The University of Sydney said the ability to model plate tectonics like this will help scientists understand not just the physical movement of the plates, but also "how climate has changed, how ocean currents altered and how nutrients fluxed from the deep Earth to stimulate biological evolution."

The story of plate tectonics is tied into the story of our planet's habitability. "With this new model," said geoscientist Dietmar Muller, "we are closer to understanding how this beautiful blue planet became our cradle."

Betelgeuse is dimming and is in the early stages of going supernova

Scientists have kept their eyes glued to the star Betelgeuse since last year, after reports show the red supergiant was dimming – but a new study finds it still has more than 100,000 years until the event.

An International team of scientists suggest the star is in the early core helium-burning phase, when a star burns helium in to carbon, which is one of the final steps before supernova.

Researchers involved with the analysis, also found that smaller brightness variations of Betelgeuse have been powered by stellar pulsations, along with the star’s location being closer to Earth than previously thought.

 An International team of scientists suggest the star is in the early core helium-burning phase, when a star burns helium in to carbon, which is one of the final steps before supernova

The team is led by Dr. Meridith Joyce from the Australian National University (ANU), who used evolutionary, hydrodynamic and seismic modeling to analyze the brightness variation of Betelgeuse.

This allowed researchers to uncover the star was currently burning helium in its core.

This happens when the core of a star reaches about 100 million degrees, which causes three helium nuclei to collide and fuse to form a carbon nucleus.

© Provided by Daily Mail

 The team is led by Dr. Meridith Joyce from the Australian National University (ANU), who used evolutionary, hydrodynamic and seismic modeling to analyze the brightness variation of Betelgeuse

Sometime after this event, the core collapses, causing an explosion that results in a nebula - regions of dust and gas in interstellar space.

Because of this thorough investigation, the team also found that stellar pulsations driven by the so-called kappa-mechanism is causing the star to continuously brighten or fade with two periods of 185 (+/-13.5) days and approximately 400 days.

But the large dip in brightness in early 2020 is unprecedented, and is likely due to a dust cloud in front of Betelgeuse, as seen in the image.

NASA's Hubble Space Telescope found the dimming was likely due to a traumatic outburst that ejected hot material into space - covering Earth's view of Betelgeuse.

Data had shown a dust cloud formed when the superhot plasma ejected from the star, which cooled and formed a dust cloud that blocked light from Betelgeuse's surface.

© Provided by Daily Mail NASA's Hubble Space Telescope found the 2020 dimming was likely due to a traumatic outburst that ejected hot material into space - covering Earth's view of Betelgeuse

Betelgeuse’s size has been a mystery to the scientific community, but the latest study determined it has a radios 750 times of the sun.

This information also allowed researchers to determine the star is only 530 light years from Earth, instead of 700 light years as previously believed.

Their results imply that Betelgeuse is not at all close to exploding, and that it is too far from Earth for the eventual explosion to have significant impact here, even though it is still a really big deal when a supernova goes off.

What is the ionosphere? (And who is Steve?)

A dense layer of molecules and electrically charged particles, called the ionosphere, hangs in the Earth's upper atmosphere starting at about 35 miles (60 kilometers) above the planet's surface and stretching out beyond 620 miles (1,000 km). Solar radiation coming from above buffets particles suspended in the atmospheric layer. Radio signals from below bounce off the ionosphere back to instruments on the ground. Where the ionosphere overlaps with magnetic fields, the sky erupts in brilliant light displays that are incredible to behold.  

© Provided by Space This image, taken from the International Space Station, shows Earth's glowing, colorful aurora alongside lights coming from the cities on our planet's surface down below. When electrically-charged particles from the sun interact with gases in Earth's ionosphere, they create visual displays called auroras.

Where is the ionosphere?

Several distinct layers make up Earth's atmosphere, including the mesosphere, which starts 31 miles (50 km) up, and the thermosphere, which starts at 53 miles (85 km) up. The ionosphere consists of three sections within the mesosphere and thermosphere, labeled the D, E and F layers, according to the UCAR Center for Science Education.

Extreme ultraviolet radiation and X-rays from the sun bombard these upper regions of the atmosphere, striking the atoms and molecules held within those layers. That powerful radiation dislodges negatively charged electrons from the particles, altering those particles' electrical charge. The resulting cloud of free electrons and charged particles, called ions, led to the name "ionosphere." The ionized gas, or plasma, mixes with the denser, neutral atmosphere.

Read more: China's Tianwen-1 mission will inspect the Red Planet's ionosphere


The concentration of ions in the ionosphere varies with the amount of solar radiation bearing down on the Earth. The ionosphere grows dense with charged particles during the day, but that density subsides at night as charged particles recombine with displaced electrons. Entire layers of the ionosphere appear and disappear during this daily cycle, according to NASA. Solar radiation also fluctuates over an 11-year period, meaning the sun may put out more or less radiation depending on the year.

Explosive solar flares and gusts of solar wind stir up sudden changes in the ionosphere, teaming up with high-altitude winds and severe weather systems brewing on the Earth below.
Light up the skies

The scorching-hot surface of the sun expels streams of highly charged particles, and these streams are known as solar wind. According to NASA's Marshall Space Flight Center, solar wind flies through space at about 25 miles (40 km) per second. Upon reaching the Earth's magnetic field and the ionosphere below, solar winds set off a colorful chemical reaction in the night sky called an aurora.

When solar winds whip across Earth, the planet stays shielded behind its magnetic field, also known as the magnetosphere. Generated by churning molten iron in the Earth's core, the magnetosphere sends solar radiation racing toward either pole. There, the charged particles collide with chemicals swirling in the ionosphere, generating the spellbinding auroras.

Related: Why auroras are different in the northern and southern hemispheres

Scientists have found that the sun's own magnetic field squishes the Earth's weaker one, shifting auroras toward the night side of the planet, as reported by Popular Mechanics.

Near the Arctic and Antarctic circles, auroras streak across the sky every night, according to National Geographic. The colorful curtains of light, known as the aurora borealis and aurora australis, respectively, hang about 620 miles (1,000 km) above the Earth's surface. The auroras glow green-yellow when ions strike oxygen particles in the lower ionosphere. Reddish light often blooms along the auroras' edges, and purples and blues also appear in the nighttime sky, though this happens rarely.

"The cause of aurora is somewhat known, but it is not entirely resolved," said Toshi Nishimura, a geophysicist at Boston University. "For example, what causes a particular type of color of aurora, such as purple, is still a mystery."

Who is Steve?

Beyond auroras, the ionosphere also plays host to other impressive light shows.

In 2016, citizen scientists spotted a particularly eye-catching phenomena which scientists struggled to explain, Space.com previously reported. Bright rivers of white and pinkish light flowed over Canada, which is farther south than most auroras appear. Occasionally, dashes of green joined the mix. The mysterious lights were named Steve in homage to the animated movie "Over the Hedge" and were later rebranded as the "Strong Thermal Emission Velocity Enhancement" ⁠— still STEVE for short.

"We've been studying the aurora for hundreds of years, and we couldn't, and still can't, explain what Steve is," said Gareth Perry, a space weather scientist at the New Jersey Institute of Technology. "It's interesting because its emissions and properties are unlike anything else we observe, at least with optics, in the ionosphere."

According to a 2019 study in the journal Geophysical Research Letters, the green streaks within STEVE may develop similarly to how traditional auroras form, as charged particles rain down upon the atmosphere. In STEVE, however, the river of light seems to glow when particles within the ionosphere collide and generate heat among themselves.
Communication and navigation

Though reactions in the ionosphere paint the sky with brilliant hues, they can also disrupt radio signals, interfere with navigational systems and sometimes cause widespread power blackouts.

The ionosphere reflects radio transmissions below 10 megahertz, allowing the military, airlines and scientists to link radar and communication systems over long distances. These systems work best when the ionosphere is smooth, like a mirror, but they can be disrupted by irregularities in the plasma. GPS transmissions pass through the ionosphere and therefore bear the same vulnerabilities.

"During large geomagnetic storms, or space weather events, currents [in the ionosphere] can induce other currents in the ground, electrical grids, pipelines, etc. and wreak havoc," Perry said. One such solar storm caused the famous Quebec blackout of 1989. "Thirty years later, our electrical systems are still vulnerable to such events."

Scientists study the ionosphere using radars, cameras, satellite-bound instruments and computer models to better understand the region's physical and chemical dynamics. Armed with this knowledge, they hope to better predict disruptions in the ionosphere and prevent problems that can cause on the ground below.

Additional resources:
Check out a slideshow of fantastic auroras from National Geographic.
Learn how GPS works with the Smithsonian National Air and Space Museum.
Watch an animation of the Earth's magnetic field in action, from Nova and the Khan Academy.

Corporations should stop funding climate science deniers in Congress


In the wake of the mob assault on the Capitol and Republican lawmakers' attempt to overturn Joe Biden's election, nearly two dozen corporate campaign donors announced that their political action committees (PACs) will temporarily suspend contributions to the 147 senators and representatives who voted against certifying the Electoral College vote. Another four dozen corporations went even further, pausing all PAC donations.

© Getty Images 

Corporations should stop funding climate science deniers in Congress

This unprecedented capital strike signals that a growing number of CEOs recognize that congressional (and presidential) actions leading up to and culminating on Jan. 6 crossed the line: Denying the legitimacy of a free and fair election poses an existential threat to democracy.

Even more lawmakers, however, are in denial about another existential threat that is no less dangerous. They reject the scientific consensus that human activity - mainly burning fossil fuels - is causing a climate crisis and are standing in the way of federal action. Corporations should permanently cut off their funding because time is running out.

Indeed, 2020 tied 2016 as the hottest year on record, according to NASA. Likewise, there were a record 22 weather and climate disasters across the country last year with a price tag exceeding $1 billion, according to the National Oceanic and Atmospheric Administration (NOAA). Since 2016, billion-dollar disasters in the United States have cost more than $600 billion, a record for a five-year span.

Despite the incontrovertible evidence, the number of climate science deniers and obstructionists in Congress increased since last November's election. There were 150 at the start of the 116th Congress, but by my count, there are now 172 who deny climate science or, in a few cases, accept scientific reality but say the private sector should take care of the problem, not the government. They make up two-thirds of the 261 Republicans in Congress, as well as two-thirds of the 147-member "Sedition Caucus" that challenged the Electoral College results on Jan. 6.

The GOP, which has the distinction of being the world's only major climate-denialist party, is wildly out of step with its base. According to a poll conducted last October by the Conservation Coalition and the Conservative Energy Network, three-quarters of Republican voters want the government to take steps to reduce carbon emissions, while 84 percent between the ages of 18 and 54 say they would like their state to become a national leader in promoting the growth of renewable energy.

Why is the GOP oblivious to public opinion? Follow the money. Since the 2016 election cycle, 86 percent of the $181.9 million oil and gas industry PACs and employees donated to federal candidates went to Republicans. The coal industry chipped in less, but 96 percent of the $11 million its employees and PACs contributed went to Republicans. Some of that money went to 132 of the Sedition Caucus members, who received $8.8 million from 65 fossil fuel industry corporate PACs alone, according to a recent Public Citizen report. Thus far, only one of those companies has vowed to suspend its PAC contributions.

Would freezing corporate PAC contributions have much of an impact? It certainly sends a message, but PAC money accounts for a relatively small percentage of total campaign funding. By law, PACs can only give a candidate up to $5,000 for each primary and general election and corporations contribute more money via trade associations, issue-based groups and individual executives' contributions.

That said, suspending corporate PAC donations could discourage donations by company employees, who are swayed by their CEO's political preferences. A 2016 analysis in the Harvard Business Review examining data from more than 2,000 companies between 1999 and 2014 found that employees on average donated three times more to candidates endorsed by their CEO than to candidates their CEO did not support.

It remains to be seen how long corporations will withhold their PAC donations. It is all too easy to appear high-minded just after an election, when campaign contributions drop off, only to ramp them back up in advance of the next election cycle. Given the Biden administration's plans to transition to a clean energy economy, fossil fuel companies will likely want to fund their friends on Capitol Hill. But like corporations in other sectors, they should end their PAC donations for members of Congress who refuse to accept reality about election results as well as climate change. Likewise, all companies should restrict their executives' donations and stop financing the secretive "dark money" groups that support denialist lawmakers. Otherwise, they will continue to aid and abet the subversion of U.S. democracy and the destruction of the planet.

Elliott Negin is a senior writer at the Union of Concerned Scientists

Deserted debts stir disquiet in the mysterious world of Dubai Inc

By Davide Barbuscia

© Reuters/SATISH KUMAR FILE PHOTO

 View of Burj Khalifa the tallest building from the Business Bay area in Dubai

DUBAI (Reuters) - Dubai's debts have always been something of a mystery for investors but since the coronavirus pandemic hit its economy, things have got hazier, some say.

Over the past 12 months, two firms with links to Dubai’s government and its ruler, respectively, have said they would not meet hundreds of millions of dollars' worth of debt repayments, a rare step in the Middle Eastern business hub, where debts are typically renegotiated and state support is often seen as implicit.

One of the firms, Dubai Holding, the investment vehicle of Sheikh Mohammed bin Rashid al-Maktoum, Dubai's ruler, told creditors that it would not service a $1.2 billion loan owed by its subsidiary Dubai Holding Investments Group and was prepared to pursue liquidation for the unit, according to a source and a document sent to investors in December and reviewed by Reuters.

The second firm, state-owned property developer Limitless, told creditors last March it wasn't able to meet payments for a loan worth about $1.2 billion, according to a company document seen by Reuters. It has since been seeking to restructure the debt.

Dubai Holding, which has $35 billion in assets and holdings in property and the hospitality sector, declined to comment on the debts of its subsidiary and repayment plans for other units. A Limitless spokeswoman told Reuters its restructuring discussions with lenders were continuing but did not comment further. Creditors to the company included Dubai banks such as Emirates NBD, Mashreqbank and Dubai Islamic Bank. They declined to comment.  

© Reuters/Satish Kumar Subramani FILE PHOTO: 

General view of Business Bay area, after a curfew was imposed to prevent the spread of the coronavirus disease (COVID-19), in Dubai

The moves by Dubai Holding and Limitless have weakened the assumption that state support is a given, investors say, prompting some creditors to reassess their appetite for and exposure to Dubai-linked debt.

With tens of billions of dollars worth due for repayment over the next few years, some lenders are selling their exposures or making provisions for future losses, three banking sources told Reuters.

The price of Limitless debt has fallen sharply in the secondary market, according to price sheets reviewed by Reuters. The price of Islamic bonds issued by property firm Meraas, which was incorporated into Dubai Holding last year, has fallen steadily this year, according to Refinitiv data.

Dependent on trade and tourism, Dubai's economy has buckled under the strain of the pandemic and low oil prices. Forking out to support so-called government-related entities (GREs) would be a further strain on the public purse.

"The recent defaults have highlighted long-standing concerns about high public and private sector leverage against a backdrop of low growth and a very weak real estate market characterized by chronic over-capacity," said Cedric Berry, a Fitch analyst.

"In itself, a policy of more limited support is positive for the government’s finances and creditworthiness. However, there is limited transparency on the GREs’ balance sheets and the challenging economic environment has increased the risk that some entities could still require financial support, putting pressure on government finances."

The Dubai media office did not respond to Reuters queries on Dubai's indebtedness, Dubai Holding's exposures or the city state's plans to tackle the liabilities of state entities.

The United Arab Emirates Central Bank, asked whether it was encouraging banks to make provisions for outstanding Dubai debt, declined to comment.

"A TOUGH LINE TO DRAW"

In the case of Limitless and of Dubai Holding Investments Group, neither the state nor Dubai Holding had any contractual obligation to pay creditors.

Dubai Holding was only responsible for interest payments on the $1.2 billion loan and at its maturity it told creditors that it was "prepared to pursue an insolvent liquidation in the absence of any feasible alternative," a document sent to investors in December showed.

Dubai’s government explained its approach to GREs in the prospectus for a rare public sale of sovereign debt last year. The sheikhdom said that if such companies were unable to fulfil their debt obligations, the government may, "at its sole discretion, decide to extend such support as it may deem suitable."

But some investors have been working off the basis that there was an implicit government guarantee, two bankers said, a sentiment reinforced by Dubai's support for Emirates Group, the state-owned airline, during the coronavirus crisis.

The flag carrier was given a $2 billion equity injection by the state last year. An Emirates spokeswoman told Reuters that none of its debt has a guarantee by the government or by the Investment Corporation of Dubai, its sovereign wealth fund.

Investor confusion has been compounded by the fragmentation of Dubai's debt. Some sits under the government, some under its sovereign wealth fund, and some under the umbrella of Dubai Holding, the investment vehicle of Dubai's ruler - a major force in developing the local economy.

"It comes back to the same old argument, which is where does the ruler in his private capacity stop and the obligations of the emirate start. When you talk about an absolute monarchy, it’s a tough line to draw," a banker at a Dubai lender said.

Some of the debts owed by Limitless, the property developer, were trading at 20 cents on the dollar in December, down from 30 cents a few months earlier, according to secondary loan trading price sheets reviewed by Reuters.

Banks' provisions for bad and doubtful debts in the United Arab Emirates amounted to nearly $42 billion as of November last year, up from $36 billion at the end of 2019, according to central bank data.

Non-performing loans are expected to account for 7.6% of total loans in 2020, up from 6.5% a year earlier, the Institute of International Finance has estimated.

ABU DHABI

A dearth of statistics makes it difficult to get a full picture of Dubai’s financial situation. Its sovereign bonds are not rated by credit rating agencies and the city state has mostly used private placements and bilateral loans to raise capital.

The government said in August that its debt levels were equivalent to around 28% of 2019 gross domestic product, but that figure goes up to over 100% of GDP, according to estimates by research firms and ratings agencies, if debt raised by GREs is also taken into consideration.

In its bond prospectus last year, Dubai's government said it had no official estimate for GRE debt.

London Based Capital Economics has estimated that before the end of 2024 $38 billion of Dubai GRE debt is due for repayment, much of it in 2023.

Many of the debts date from the 2008-09 financial crisis. Back then, oil-rich Abu Dhabi gave Dubai a bailout helping its neighbour to support its state-controlled companies. Debts were renegotiated and extended.

This time around, no help has been forthcoming.

Abu Dhabi and Dubai were in talks last year to prop up Dubai’s economy by linking up assets in the two emirates, sources told Reuters at the time. Dubai denied the report.

Abu Dhabi did not respond to a request for comment.

A perception that Abu Dhabi would, however, support Dubai if required is factored into the price of Dubai sovereign debt, according to traders.

Bonds sold by Dubai last year which are due to mature in 2050 are currently trading at a premium of just over 1 percentage point over Abu Dhabi's paper with the same maturity, despite Abu Dhabi having a top credit rating and much larger financial wealth.

"Dubai benefits from perceived backing from Abu Dhabi, which is still an extremely strong credit, and could choose to provide support if needed," said Richard Briggs, investment manager at GAM.

($1 = 3.6728 UAE dirham)

(Additional reporting by Saeed Azhar; Editing by Carmel Crimmins)