Union Throws a Curveball in Battle for U.S. Steel

Story by Al Root •1d

An employee looks at coils of steel

The battle for United States Steel has already taken a number of unexpected twists and turns. Investors just got another one.

Thursday, The United Steelworkers, or USW, essentially backed a bid by Cleveland-Cliffs (ticker: CLF) to acquire U.S. Steel (X) by assigning its right to bid for the steel company to Cleveland-Cliffs. That matters because an agreement between the Union and U.S. Steel specifies that if the Union bids, the company isn’t allowed to accept other offers unless the board determines they are superior.

A second condition of the labor agreement is that any buyer must reach a deal with the union before a merger can be closed, but a buyer can also simply assume the conditions of the existing labor contract.

The agreement and rights transfer give the union “de facto veto power on a potential sale of the whole company,” Cleveland-Cliffs said in an emailed statement.

U.S. Steel disagrees. “We are aware that the USW has transferred [rights] to Cleveland-Cliffs…while the [basic labor agreement] provides the USW with [certain rights], it does not provide the USW or its assignee the right to veto any transaction,” the company said in an emailed statement. “Our commitment and ability to conduct a comprehensive and thorough review of strategic alternatives to maximize value for our stockholders remain unchanged.”

Both sides appear to be publicly debating. Nothing definitive is decided. The assignment essentially gives Cleveland-Cliffs the right to match the best offer the U.S. Steel Board receives. Price per share, however, doesn’t always determine the best bid. The mix of cash and stock can matter. Sometimes investors prefer one over the other. The Cleveland-Cliffs bid is a mix of cash and stock.

Related video: US Steel Rejects $7.25 Billion Bid From Rival Cliffs (Bloomberg)

The biggest Deal News this morning? US Steel rejecting a $7.25

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The ability to close a transaction matters as well. KeyBanc analyst Philip Gibbs pointed out in a report earlier this week that a Cleveland-Cliffs-U. S. Steel combination would draw antitrust scrutiny. Both companies are big players in the North American iron ore and automotive steel markets.

The Union move is the latest episode in the takeover drama. U.S. Steel itself kicked it all off, announcing Sunday it was pursuing strategic alternatives after receiving “multiple bids” for the company or some of its assets.

Cleveland-Cliffs then disclosed on Sunday a cash and stock bid valued at $35. Steel service center Esmark then came in with a $35 per share all-cash bid on Tuesday. Wednesday, Reuters reported that ArcelorMittal (MT) was considering a bid. ArcelorMittal didn’t respond to a request for comment.

Union President Thomas Conway called the potential ArcelorMittal bid foolish shortly after the Reuters report. ArcelorMittal actually sold its U.S. operations to Cleveland-Cliffs in 2020. A re-entry into the U.S. industry would be a surprise.

U.S. Steel stock rose 0.9% Friday to close at $30.99. The S&P 500 and Dow Jones Industrial Average were both roughly flat.

At about $31 a share, U.S. Steel stock is up about 36% for the week. Still, shares are trading a few dollars below the bids, indicating investors aren’t sure what will happen.

There are reasons for the discount. The concern about market concentration is one factor. The fact that the union doesn’t seem to favor ArcelorMittal is another. And Gordon Haskett analyst Don Bilson pointed out that Esmark’s bid didn’t include any information about how the $7 billion to $8 billion purchase would be financed.

There is a lot for investors to think about. After a week of excitement, it appears more drama lies ahead.

About 80% of U.S. Steel employees in North America and Slovakia are covered by collective bargaining agreements.

Write to Al Root at allen.root@dowjones.com

Cleveland-Cliffs (CLF) Gets Rights to Bid for U.S. Steel

it will undertake all the obligations outlined in the agreements between U.S. Steel and the USW

 

Zacks Equity Research
Fri, August 18, 2023 

Cleveland-Cliffs Inc. CLF has announced that it has been granted the exclusive right by the United Steelworkers (USW) to bid under their Basic Labor Agreement with United States Steel Corporation X. This assignment positions Cleveland-Cliffs as the sole viable purchaser with the capability to acquire the entirety of U.S. Steel. Moreover, CLF has committed that upon the successful completion of a transaction, it will undertake all the obligations outlined in the agreements between U.S. Steel and the USW that pertain to U.S. Steel employees.

Cleveland-Cliffs Inc. Price and Consensus

Cleveland-Cliffs Inc. Price and Consensus

In adherence to the collective bargaining agreement with U.S. Steel, any prospective sale of the entire company or assets represented by USW necessitates the support of USW. Through this assignment, the USW's authority to bid on such prospective transactions has been transferred to CLF. The transfer and assignment of USW's rights are exclusively applicable to Cleveland-Cliffs.

Earlier, U.S. Steel's board had declined a proposal from Cleveland-Cliffs for the acquisition. The board cited several grounds for its decision, including Cleveland-Cliffs’ refusal to sign a non-disclosure agreement.

Shares of CLF have declined 17.1% over the past year compared with a 2.4% decline of its industry.

Zacks Investment Research

Cleveland-Cliffs’ second-quarter 2023 adjusted earnings of 69 cents per share matched the Zacks Consensus Estimate. Revenues fell 5.6% to $5,984 million in the quarter. The top line, however, beat the Zacks Consensus Estimate of $5,727 million.
Zacks Rank & Key Picks

Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, sporting a Zacks Rank #1 (Strong Buy), and L.B. Foster Company FSTR, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The earnings estimate for CRS’s current year is pegged at $3.36, indicating year-over-year growth of 194%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 49.5% in the past year.

The consensus estimate for FSTR's current year is pegged at 53 cents, indicating year-over-year growth of 112.5%. FSTR beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 134.5%. The company’s shares have rallied 27.6% in the past year.

GEMOLOGY

Fountains of diamonds erupt from Earth's center as supercontinents break up

Stephanie Pappas
Fri, August 18, 2023 

Rough diamond, precious stone in mine.

The breakup of supercontinents may trigger explosive eruptions that send fountains of diamonds shooting up to Earth's surface.

Diamonds form deep in Earth's crust, approximately 93 miles (150 kilometers) down. They are brought up to the surface very quickly in eruptions called kimberlites. These kimberlites travel at between 11 and 83 mph (18 to 133 km/h), and some eruptions may have created Mount Vesuvius-like explosions of gases and dust, said Thomas Gernon, a professor of Earth and climate science at the University of Southampton in England.

Researchers noticed that kimberlites occur most often during times when the tectonic plates are rearranging themselves in big ways, Gernon said, such as during the breakup of the supercontinent Pangaea. Oddly, though, kimberlites often erupt in the middle of continents, not at the edges of breakups — and this interior crust is thick, tough and hard to disrupt.

"The diamonds have been sat at the base of the continents for hundreds of millions or even billions of years," Gernon said. "There must be some stimulus that just drives them suddenly, because these eruptions themselves are really powerful, really explosive."

Gernon and his colleagues began by looking for correlations between the ages of kimberlites and the degree of plate fragmentation occurring at those times. They found that over the last 500 million years, there is a pattern where the plates start to pull apart, then 22 million to 30 million years later, kimberlite eruptions peak. (This pattern held over the last 1 billion years as well but with more uncertainty given the difficulties of tracing geologic cycles that far back.)

For example, the researchers found that kimberlite eruptions picked up in what is now Africa and South America starting about 25 million years after the breakup of the southern supercontinent Gondwana, about 180 million years ago. Today's North America also saw a spike in kimberlites after Pangaea began to rift apart around 250 million years ago. Interestingly, these kimberlite eruptions seemed to start at the edges of the rifts and then marched steadily toward the center of the land masses.

To figure out what was driving these patterns, the researchers used multiple computer models of the deep crust and upper mantle. They found that when tectonic plates pull apart, the base of the continental crust thins — just as the crust up top stretches out and forms valleys. Hot rock rises, comes into contact with this now-disrupted boundary, cools and sinks again, creating local areas of circulation.

These unstable regions can trigger instability in neighboring regions, gradually migrating thousands of miles toward the center of the continent. This finding matches the real-life pattern seen with kimberlite eruptions starting near rift zones and then moving to continental interiors, the researchers reported July 26 in the journal Nature.

But how do these instabilities cause explosive eruptions from deep in the crust? It's all in the mixing of just the right materials, Gernon said. The instabilities are enough to allow rock from the upper mantle and lower crust to flow against each other.

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This churns together rock with lots of water and carbon dioxide trapped within it, along with many key kimberlite minerals — including diamonds. The result is like shaking a bottle of champagne, Gernon said: eruptions with a lot of explosive potential and buoyancy to drive them to the surface.

The findings could be useful in searching for undiscovered diamond deposits, Gernon said. They might also help explain why there are other types of volcanic eruptions that sometimes occur long after a supercontinent breakup in regions that should be largely stable.

"It’s a fundamental and highly organized physical process," Gernon said, "so it’s likely not just kimberlites responding to it, but it could be a whole array of Earth system processes that are responding to this as well."

Joe Manchin’s Extremely Annoying Political Strategy Is Backfiring

Jess Coleman

NEW REPUBLIC
Fri, August 18, 2023 

When, in December 2021, West Virginia Senator Joe Manchin announced he would vote “no” on President Biden’s signature legislative proposal, the Build Back Better Act, the reaction boiled down to: “Well, what did you expect?” After all, Manchin, despite being a Democrat, is from deep-red West Virginia, and politicians from deep-red states simply cannot vote in favor of major progressive policies championed by the leader of the Democratic Party. That’s just politics, dummy. That Biden and his fellow Democrats even tried was treated in some circles as painfully naïve: Unless Democrats learn that basic lesson and bring centrists into the fold, they’ll never achieve a vibrant, sustainable majority. Or so sayeth the conventional wisdom.

So when Manchin announced last week that he is considering leaving the Democratic Party to become an independent, his rationale was hardly difficult to predict. “The brand has become so bad,” he said, drawing on the oft-repeated talking point that the Democrats have lept too far left. In other words—and in contravention of all logic, given the results of the 2022 midterms—Manchin simply cannot in good conscience remain with a party that, in substance and style, provides no room for leaders seeking to appeal to a moderate, bipartisan electorate.

Don’t be fooled. Manchin’s charade is hardly one of principle. It’s one of total desperation.

There are no secrets about Manchin’s political situation at home. After being reelected in 2018 by just 3 percent, in a year in which Democrats vastly outperformed expectations nationally, Manchin has an enormous hill to climb with his reelection looming in 2024. But the West Virginia senator doesn’t seem to have much interest in taking responsibility for the electoral crisis in which he has enmeshed himself. Instead, he’d like us to believe the political forces around him have simply left him no choice: Both sides have drawn too far to the extremes, leaving no political home for the critical mass of centrist West Virginians who sent him to Washington. Hence the need to chart a new path on his own.

The framing echoes a convenient perspective that is adored by the media and political establishment: Elections are not won with base voters, but through a small slice of persuadable, moderate swing voters, perpetually lurking just outside of frame. Democrats, in turn, need to have some Joe Manchins—those politicians who embody the voters who are key to electoral success—lying around to be taken seriously. The failure to keep these soi-disant moderate saviors on hand reveals a fundamental structural deficiency for the party writ large.

But if it’s true that Manchin is such a political genius—uniquely capable of surviving as a Democrat in a deep red state—you would expect that his victory is owed to a broad cross section of voters from a variety of political camps. Alas, that’s the complete opposite of what happened in 2018. According to CNN exit polls, Manchin garnered the votes of 64 percent of those who identify as moderates, and just 23 percent of conservatives. Those numbers are roughly in line with what New York Senator Kirsten Gillibrand achieved that same year: 70 and 18 percent, respectively. The reality is Manchin barely made it over the finish line in roughly the same way Democrats all around the country win their seats: by running up the numbers with voters on the political left—Manchin won 80 percent of self-identified liberals in 2018.

Indeed, as The New Republic’s Alex Pareene observed in 2021, Manchin is actually far more reliant on Democratic voters than many of his blue state counterparts. While someone like Gillibrand can afford to lose large swaths of Democrats in a state where they are in ample supply, Manchin needs to pull virtually every registered Democrat in his state to win. Against all logic, Manchin approached Biden’s first term as if the rules that governed his electoral hopes were precisely opposite to reality. Instead of rewarding his most loyal voters—dyed-in-the-wool liberal Democrats—by delivering for them in Washington, Manchin has spent his latest term going out of his way to alienate his base and position himself in a political no man’s land: personally steamrolling key Democratic priorities while siding with his party on most routine issues and appointments.

In short, Manchin made a bet. He believed he could rely on the support of Democrats and spent nearly all his time trying to appeal to a tiny, if not nonexistent, group of voters who are up for grabs and have no real allegiance to either of the two dominant political parties. It hasn’t worked out the way Manchin anticipated, and this is where he now finds himself—orchestrating a last-ditch, hopeless effort to create a new political reality from thin air.

It is possible Manchin never had a shot at reelection, had fortune and circumstance not permitted him to avail himself of 2018’s political trends, we’d already have a Republican holding that West Virginia senate seat. But the broader lesson is crucial for those in the media and elected leadership who constantly insist that disregarding the Democratic base in service of pursuing the allegedly vast rewards that come from focusing solely on the views of the so-called centrist, swing voters is the only viable path to victory in American politics. Those who subscribe to this view should explain why the two most notable Democrats who aggressively pursued this approach—Kyrsten Sinema and Joe Manchin—are currently fighting for their political lives, while other red-state Democratic senators such as Sherrod Brown of Ohio and Jon Tester of Montana have consistently survived—and remain loyal to the party’s big priorities even when their electoral hopes face massive headwinds.

Mostly, we have to understand something simple about Manchin: We are not watching a political genius at work. He’s not on the verge of revealing a masterful plan to pull off another miracle in West Virginia. This is a desperate politician squirming for his political life after making a series of catastrophic political decisions. Manchin has hardly proven that the Democratic Party is mortally wounded due to its failure to leave room for the center left. All he’s done is reinforce a very basic rule in politics: Doing the opposite of what your voters want is an idiotic election strategy.

U.S car industry would lose $5.5 billion if workers strike, report says. So far, negotiations have been rife with ‘theatrics and personal insults‘

Paolo Confino
Fri, August 18, 2023

UAW president Shawn Fain 

A United Auto Workers strike could cost the industry billions of dollars, according to a report released Thursday, highlighting the huge stakes involved in an upcoming union vote on whether to authorize a walkout.

If the UAW were to strike for just 10 days it could lead to economic losses of $5.5 billion across the entire industry, forecasts consulting firm Anderson Economic Group. The estimate takes a comprehensive view, factoring in losses to workers and manufacturers, alongside the ripple effects a strike could have on car dealers and parts suppliers.

The UAW represents about 146,000 workers at the so-called Big Three U.S. car manufacturers: General Motors, Ford, and Stellantis—the company created from the merger of Fiat Chrysler and PSA Group in 2021. Union chapters are scheduled to vote on whether to authorize a strike next week. Meanwhile, the current labor agreement is set to expire on Sept. 14, and the UAW has already said it will not extend the current deal.

By AEG’s calculations the strike would lead to lost wages of $859 million and manufacturer losses of $989 million, meaning that the union and automakers would lose $1.8 billion, as a direct result of the strike. AEG then roughly doubled that figure to calculate what it considers the true value of those losses to the firms, which brings the total estimated losses to $3.5 billion. The analysis goes on to include another $2.1 billion in losses from suppliers and car dealerships would incur as a result of a work stoppage.

“Consumer and dealer losses are typically somewhat insulated in the event of a very short strike,” AEG vice president Tyler Theile said in a statement. However, because inventories were about one-fifth of what they were in 2019, the last time the UAW went on strike dealers and customers could be affected “much sooner,” Theile said.

The 2019 strike lasted around six weeks and only took place at General Motors plants, rather than across all the Big Three. Even though it was limited only to GM, the strike cost workers $1 billion in wages and GM $2 billion in lost production. If a strike were limited to just a single automaker this time as well it would lead to around $1.4 billion in total losses, according to AEG. And that’s just for a 10-day strike, meaning costs could balloon even more should it go beyond that.

The UAW and the Big Three still have work to do

The union and the Big Three are still far from agreement on key issues this time around. Union demands include a 40% pay increase, guaranteed pensions for new hires, cost-of-living increases, and a request to hire all temporary workers as full-time employees. UAW president Shawn Fain has said he expects workers to be able to secure big gains in upcoming negotiations so long as they are prepared to strike for them

However, Fain’s outspokenness and bullishness about the contract talks was met with skepticism, particularly from Stellantis, which has 43,000 union employees. The company’s chief operating officer, Mark Stewart, claimed the union’s requests might lead to job cuts down the line. In a letter to employees, first reported by Reuters, Stewart accused Fain of “theatrics and personal insults” when the union president hosted a Facebook livestream in which he threw a Stellantis contract offer into the trash.

Disagreements with the UAW aren’t the only workforce-related problems Stellantis has faced this year. In April, the company offered both factory and corporate workers buyouts in an effort to trim its headcount.

Stellantis declined to comment on AEG’s report, but said negotiations with the UAW bargaining committee were “constructive and collaborative.” Ford, GM, the UAW, and AEG did not respond to a request for comment.

General Motors, the largest of the three companies, also criticized the union’s demands. The company said the union’s proposal would limit its ability to adjust to future market conditions.

Meanwhile, Ford has reportedly started preparing salaried, corporate employees for factory jobs, according to the Detroit Free Press. The company has asked engineers and other white-collar workers to take over duties such as filling parts orders and driving forklifts.

Rare New England tornado lifts car from a highway as strong storms damage homes and flood roads

MARK PRATT and PATRICK WHITTLE
Updated Fri, August 18, 2023 












2 / 12
New England Severe WeatherFallen trees block the road in a residential neighborhood, Friday, Aug. 18, 2023, in Johnston, R.I., after severe weather swept through the area. (AP Photo/Michael Dwyer)

A rare Rhode Island tornado lifted a car off a highway Friday as severe weather swept already storm-weary New England, damaging homes, flooding roads and toppling trees.

Tornadoes were reported in several spots in Rhode Island and southern Massachusetts. The National Weather Service said there were at least four tornadoes in the two states, and it was investigating a potential fifth in eastern Connecticut. No injuries were reported.

Firefighters rushed to help the startled motorist on Interstate 295 in Johnston and found her shaken but unharmed by the tornado, which lifted her car 10 feet off the highway, Johnston Fire Chief David Iannuccilli said.

Motorist George Viau saw it all happen, looking on in awe as the funnel appeared and the sedan with its lights on began to spin. The vehicle spun around at least once before being deposited on the highway near a guardrail, he said.

"Honestly I was little nervous. Maybe more than a little nervous,” said Viau, a commercial fisherman. “I watched what it did to the car, and I wondered what it if comes down the highway toward us. There was no exit.”

The tornado crossed the highway, and also moved through wooded areas and residential neighborhoods, Iannuccilli said. Meteorologist Glenn Field with the National Weather Service said the tornado was confirmed by radar and carried tree limbs and other debris aloft.

Tornado touchdowns also were confirmed in North Attleborough and Mansfield, Massachusetts, which are about a half-hour's drive from Johnston, and a tornado was spotted in Weymouth, Massachusetts, about an hour away, the weather service said. Another touched down briefly in Stoughton, Massachusetts, which is about 40 minutes from Johnston, the service said. And a fire official said a tornado damaged three homes in North Providence.

The weather service said it expected to release a complete assessment of the tornadoes on Monday.

Across New England, storms damaged homes and cars and made for hazardous driving. A few thousand power outages were reported. High winds damaged a home in Brockton, Massachusetts.

The hardest-hit communities in Rhode Island were Johnston and Scituate, with less damage in North Providence, Cumberland and Providence, said Melissa Carden, state emergency management spokesperson. Most damage reports were of toppled trees and downed power lines.

The storms took down about 100 trees at Highland Park Memorial Cemetery in Johnston, cemetery president Joseph Swift said.

Parts of Vermont, meanwhile, faced the possibility of flash flooding even as residents and businesses rebuild from extensive flooding this summer.

The weather service said central, northeastern and southern Vermont were under a hazardous weather outlook into Friday night, with the forecast calling for thunderstorms capable of producing flooding. Damaging winds were also possible.

Rain was expected in Vermont into Saturday, with some areas getting as much as an inch (2.5 centimeters). Storms earlier in the summer dropped as much as two months' worth of rain in parts of the state in the span of a couple of days.

Rockingham and Strafford counties in New Hampshire and York County in Maine were under flood advisories on Friday, while Essex County, Massachusetts, was under a flood warning.

New England usually gets only a few tornadoes a year, said Hayden Frank, a weather service meteorologist. Most — but not all — are relatively weak.

In 2011, a powerful tornado killed three people and caused severe damage in western Massachusetts.

And in 1953, an exceedingly powerful tornado killed 94 people and injured nearly 1,300 in central Massachusetts, including the city of Worcester. It last nearly 1 1/2 hours and damaged or destroyed 4,000 buildings.

For Viau, who witnessed the twister, the story didn't end on the highway.

He said the tornado continued five miles (eight kilometers) farther and hit his home, leaving a tree across his driveway and busting up his outdoor table and chairs. His smoker was destroyed and his grill dented.

His upstairs neighbor grabbed his children and fled with them to the basement as the tornado thundered through. “It was mean and vicious,'' Viau said. "It was one of the scariest things of his life.”

___

Pratt reported from Boston and Whittle from Portland, Maine. Associated Press writers David Sharp in Portland and Kathy McCormack in Concord, New Hampshire, contributed to this report.

___

COAL IS THE ORIGIN OF CAPITALI$M

There’s more coal being shipped by sea than ever before

Greg Miller

FREIGHTWAVES
Fri, August 18, 2023 

Chinese coal demand is fueling higher volumes at sea. (Photo: Shutterstock/Parilov)

Clean, green renewables are on the rise. Coal, the dirtiest fuel, is dying. Or so the energy transition line goes. The reality, according to the International Energy Agency (IEA), is that global coal production, consumption, and seaborne volumes are all at all-time highs in 2023.

Coal isn’t dying yet globally, just in the West. It’s still alive and kicking in Asia — and still growing globally as a result. That’s bad news for greenhouse gas emissions, but good news for owners of the dry bulk ships that transport coal, particularly as America exports more of its own mining output via long-haul voyages to Asia.

“Demand to ship coal has been a good support for the dry bulk market over the first half of the year,” said ship brokerage BRS on Thursday. “Despite coal demand in Europe and North America resuming its downward trend, Asia has provided an offset as demand continues to grow there.”

Seaborne coal volumes are predicted to reach 1,335,000 million metric tons this year, topping 2019’s record of 1,331,000 tons, the IEA said in its recently released midyear outlook.

BRS estimated that coal shipping demand measured in ton-miles (volume multiplied by distance) rose 9% in January-July versus the same period last year.

Record consumption and production

The IEA estimates that global coal demand will reach 8.39 million tons this year, up slightly from last year’s all-time high. Three out of every 4 tons of coal will be consumed in China, India, and Southeast Asia. China alone is expected to account for 56% of global consumption.

“As Europe cuts down on its coal-fired power generation to be in line with its green energy transition, China and India have continued to add further capacity at levels that far exceed the current pace of power plant retirements,” said ship brokerage SSY on Monday.

SSY noted that 86% of Chinese coal plants are less than 20 years old, and 52% are 10-20 years old. “Considering that the average lifetime of a coal power plant is 40 years, a full capacity phaseout like the one targeted by Europe is unlikely to be replicated,” said SSY.

On the supply front, the IEA expects global coal production to reach a new high this year, topping last year’s record of 8.63 million tons, with China, India and Indonesia accounting for over 70% of the total.

According to BRS, rising domestic production in India reduced that country’s coal imports by 7% year-on-year in January to July, to 134 million tons. BRS said the drop mostly affected demand for Indonesian coal aboard Capesize bulkers (vessels with capacity of around 180,000 deadweight tons or DWT).

In contrast, this year’s high Chinese domestic production is being complemented by higher imports, a plus for dry bulk shipping.

China imported 211.8 million tons of coal in the first seven months of 2023, a 77% surge from the same period last year, said BRS. Indonesia has been China’s biggest seaborne supplier, followed by Russia and Australia.

US exports higher share of production

The U.S. was once the world’s largest coal producer but has fallen down the ranks. Current production is less than half the 2008 peak. Even so, America’s exports are now on the rise. Weaker domestic demand (due to environmental regulations and cheap natural gas) leaves more production to sell overseas.

The U.S. Energy Information Administration (EIA) predicts that the U.S. will export 90 million tons of coal this year, up 16% versus 2022. Exports are projected to rise further, to 94 million tons, in 2024.

The EIA expects 22% of U.S. production to be exported next year. In 2008, when U.S. coal output peaked, only 7% of production was exported.

US coal CEOs focus on exports

International sales prospects were highlighted by executives of U.S.-listed coal producers on second-quarter conference calls during recent weeks.

Paul Lang, CEO of Arch Resources (NYSE: ARCH), said that around 20% of his company’s production is sold in North America, with 80% sold in the seaborne market — half to Asia, the rest to Europe and South America.

“What we’ve seen is an ongoing, significantly increased amount going to Asia,” said Lang. “It wasn’t all that long ago that we had minimal volumes going into the Asian market.”

According to Deck Slone, Arch Resources’ senior vice president of strategy, “We focus a huge amount of attention on building out that Asian presence. That’s where the growth is going to be.”

Lang added: “If we ultimately have to, we’re ready to go 100% exports.”

Mitesh Thakkar, CEO of Consol Energy (NYSE: CEIX), said exports accounted for 78% of Consol’s second-quarter recurring revenue. Consol is pursuing “a strategic shift toward export demand growth,” he said.

Bob Brathwaite, Consol’s senior vice president of marketing, said, “We’ve shipped cargoes to new end users into India, into China and also into Indonesia.”

Joseph Craft, CEO of Alliance Resource Partners (NASDAQ: ARLP), said, “We’re totally focused on the international markets.”

According to Jim Grench, CEO of Peabody Energy (NYSE: BTU), “We see the seaborne markets as the growth markets in demand, for both metallurgical and thermal coal. As we’ve stated many times — and it hasn’t changed — our focus is on the seaborne markets.”

Canal delays positive for shipping rates

Most U.S. coal exports headed to Asia are loaded aboard Panamaxes (bulkers with capacity of 60,000-99,000 DWT) and routed through the Panama Canal.

This year, drought conditions in Panama are causing extensive delays and reroutings. These inefficiencies render the U.S. export trend even more positive to Panamax freight rates, because delays and rerouting tie up more vessel capacity.

Ship brokerage Braemar reported Tuesday that 80 bulk carriers were waiting to transit the canal, up from 59 at the end of July.

Braemar expects bulkers returning from Asia to avoid the Panama Canal and instead go via the Suez Canal or Cape of Good Hope on their ballast (empty) legs. “These longer ballasts should tighten the supply of tonnage in the Atlantic and provide support [to rates] in the coming months, particularly as grain enquiries in the U.S. Gulf pick up going into September.”

Canal-related diversions should also extend Panamax bulkers’ laden (full) legs.

BRS reported earlier this month that “coal-laden ships out of the Atlantic are deviating from their preferred Panama Canal route due to increasing transit times. Any changes to the fronthaul trade routes will increase voyage days from about 35 days via the Panama Canal to 50 days via the Suez Canal for coal loaded at the U.S. port of Burnside [Louisiana] to discharge in Rizhao, China.”

This Canadian satellite was supposed to last 2 years in space. It's now celebrating 20

Elizabeth Howell

SPACE.COM
Sat, August 19, 2023 


The satellite was only supposed to last two years. But it's still healthy at 20.

Canada's Scisat is defying all lifetime expectations at a crucial time in human history, helping track the effects of human-driven climate change. Throughout its long lifespan — its 20th launch anniversary fell on Aug. 12 — Scisat has been providing consistent data to help us heal Earth's atmosphere, if we take the time to pay attention.

Three things have allowed the Canadian Space Agency to keep operating the satellite for so long, program lead Marcus Dejmek told Space.com. First, the satellite needs little fuel to stay stable in its orbit. Data products are also constantly tweaked to track more gases and chemical species, even with aging (if healthy) instruments. Finally, a fit satellite and constant updates together allow Scisat to deliver relevant products for its users, driving enough demand to keep government budgets flowing.

"Also, I wouldn't be doing my job if I didn't say that part of this answer was to have a dedicated group of staff that operate and understand the spacecraft hardware over time," Dejmek emphasized. Just like a car, satellites need servicing, but instead of oil changes, the little Scisat receives software updates and hardware adjustments. "The people there are just great, and they're the frontline of the success."

Related: Earth is getting hotter at a faster rate despite pledges of government action

Scisat was developed and built for $63 million CAD in 2003 (roughly $97 million CAD or $71 million USD at today's rates, although inflation differs between the two countries.) NASA flew it for free on Pegasus, which is an air-launched rocket now operated by Northrop Grumman. That flight was in exchange for Canada's robotics contributions to the space shuttle program (the spacecraft was still running then) and the International Space Station, which pays for science and astronaut seats.

Related: Artemis 2's Canadian astronaut got their moon mission seat with 'potato salad'

The small satellite — only about the area of a queen-sized bed — uses two scientific instruments to identify gases and particles in Earth's atmosphere. Under scientific leadership from a coalition of Canadian universities, Scisat scrutinizes erosion of our planet's protective ozone layer. This layer blocks harmful radiation from the sun before the rays reach Earth's surface.

an aerial view of the sun setting above a large bank of clouds. layers of color in the sky show a fading from bright orange above the cloud bank to dark blue at the top of the picture

The stratosphere, a crucial zone in Earth's atmosphere when it comes to gas exchange and climate change. (Image credit: Shutterstock)

Among Scisat's many achievements is finding pollutants in the atmosphere never spotted from space before. An example is the refrigerant gas HCFC-142b, which was used to replace chlorofluorocarbons. Chlorofluorocarbons were a common product in refrigerants, foams, aerosol sprays and solvents until the late 1980s. The ozone-eroding substances are not as common today after the Montreal Protocol of 1987; nations that signed that protocol gradually phased such substances out.

Scisat also tracks atmospheric pollutants like soot and other particles from forest fires. This year has been Canada's worst on record for wildfires. A chunk of the country equivalent to the size of Greece has been burned already, Canadian federal data indicates: 51,000 square miles (13.3 million hectares). That size is nearly seven times Canada's yearly average over the past decade.

As it's only August, the season is not nearly over; this month, a raging wildfire in the Northwest Territories sparked evacuations of the city of Yellowknife. Another set of Quebec wildfires in June created smoke so thick that Venus-like yellow skies glowed above New York City. The plume even carried across the ocean to Europe.

Related: Smoke from Canadian wildfires chokes US Midwest, reaches Europe (satellite photos)

Scisat during testing at the Canadian Space Agency's David Florida Laboratory in Ottawa, Ontario in 2002. (Image credit: Communications Research Centre Canada)

"It's clarified that there should be a growing concern that more frequent and intense wildfires are eroding the ozone layer, and they could therefore 'delay the ozone recovery in a warming world,'" Dejmak said of Scisat, quoting a March 2023 Nature paper using the mission's data.

Scisat not only tracks pollutants but can help map them out by altitude. An instrument known as a Fourier transform spectrometer allows the satellite to gaze at trace gases below in vertical distribution, which essentially means in slices of Earth's atmosphere. Both of Scisat's instruments also record spectra (light signatures) of sunlight shining through the atmosphere; this process lets scientists analyze chemical elements in the air.

And that's not all Scisat has done recently. In a Science publication, scientists tracked water vapor in the stratosphere from the massive Tonga volcano eruption of 2022. The satellite has generated at least 70 high-impact papers since its launch 20 years ago, Dejmak said. The data will continue to be useful even after the mission eventually ends no sooner than 2024, based on current funding.

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While Canada is not building a direct successor for Scisat yet, the country is in the early stages of developing WildFireSat, which would be optimized to track active fires and to alert first responders on the ground as early as possible.

The 20-year-old Scisat also brings up an issue that has also been discussed in NASA and European Space Agency circles: making sure that new missions go up to replace or enhance the satellites that will eventually age out.

NASA's Karen Germain, director of the agency's Earth Science Division, spoke in a July 20 livestreamed climate change event about how important it is to keep a variety of missions in space.

"This wide diversity of observations sustained over time has taught us much of what we understand about how and why the Earth system, including climate, is changing," she said, noting the science includes aspects like the energy cycle, climate variability and changes in the atmosphere.

"Our science isn't done until we've communicated it," Germain added, saying that is especially true when it comes to public safety. "This has never been more important or compelling than it is today."

Meta's news ban is preventing Canadians from sharing vital information about the wildfires ripping through western Canada

INSTAGRAM, FACEBOOK, ETC. ETC.

Katie Hawkinson
Sat, August 19, 2023 

Meta began blocking access to Canada's domestic news sites on August 1.Maxar Technologies/Handout via Reuters

• Meta banned Canadian users from viewing or sharing news content on its platforms August 1.

• Now, residents say the ban has prevented people from sharing vital news as wildfires tear through western Canada.

• Canada's Heritage Minister labeled the ban "reckless" and called on Meta to lift it immediately.

Canadians say Meta's news ban is having tangible consequences as they try to share news about a series of devastating wildfires prompting evacuations in Northwest Territories and British Columbia.

In June, Canadian lawmakers passed a bill that would require companies like Meta and Google to pay news outlets to share their content. In response, Meta banned users in Canada from viewing or sharing news content on its sites beginning August 1.

"Meta's reckless choice to block news before the Act is in force is hurting access to vital information on Facebook and Instagram," Canadian Heritage Minister Pascale St-Onge tweeted Friday. "We are calling on them to reinstate news sharing today for the safety of Canadians facing this emergency. We need more news right now, not less."

In the Facebook group "Yellowknife Current Events," this reality is all too clear. Here, residents are posting copied-and-pasted versions of news articles and live reported updates to circumvent the ban and continue sharing vital information about the wildfires.

One Northwest Territories resident, Poul Osted, told the BBC residents have resorted to sharing partial screenshots of news stories to keep one another updated on wildfire-related developments, such as the status of highway closures.

"Oftentimes this means you don't get the whole story, or have to go searching the web for verification," Osted said.

As of August 19, there are more than 200 active wildfires in the Northwest Territories. Yellowknife — a city of about 20,000 people — and several nearby communities are currently under a Level 3 evacuation order, meaning residents are under orders to leave immediately.

And in British Columbia, just southwest of the Northwest Territories, officials have declared a state of emergency as nearly 400 wildfires burn and thousands are evacuated from the city of Kelowna and the surrounding region, CBC News reports.

A Meta spokesperson told Insider in a statement that people in Canada can still use other features to share information about the wildfires.

"In times of crisis, Safety Check allows people to request support, check on loved ones and access updates from reputable sources," the spokesperson said. "People in Canada can continue to use our technologies to connect with their communities and access reputable information, including content from official government agencies, emergency services and non-governmental organizations."

Canadian weather maps were not changed to exaggerate global warming

Gwen Roley / AFP Canada
Fri, August 18, 2023 

Social media users are sharing two Canadian weather maps that use different colors to illustrate similar temperatures, claiming the hues were changed between 2018 and 2022 to exaggerate global warming. This is misleading; the meteorologist featured in the images told AFP he temporarily used software with another color scheme after his computer crashed.

"I guess a 'red hot' 19 degrees in 2021 is warmer than a green 20 degree day from four years ago," says the caption of an August 14, 2023 Facebook post with more than 2,400 shares.

The post includes a photo with two screenshots of weather reports in Canada.

The first forecast, dated July 9, 2018, illustrates temperatures ranging from nine to 29 degrees Celsius (about 48 to 84 degrees Fahrenheit) with green and yellow. The second map, labeled "July 26," uses red and orange to shade in areas with temperatures between 12 and 27C (about 54 to 81F).


The photo comparison circulated elsewhere on Facebook with the same caption. Similar claims have spread online since at least summer 2022 -- including a post from Alberta Legislative Assembly Member Todd Loewen, who has since become the province's minister of forestry, parks and tourism.

Screenshot of a Facebook post taken August 18, 2023

Screenshot of a Facebook post taken August 18, 2023

"Could this be the media pushing a government agenda?" says an August 10, 2022 post with the photo on Twitter, which is being rebranded as "X."

AFP has previously fact-checked claims that meteorology reports in the United Kingdom, Sweden and Germany were manipulated to exaggerate the severity of global warming. The posts about Canada are similarly misleading.

Peter Quinlan, a Global News meteorologist who appears in both screenshots, told AFP the colors vary between the photos because he had to use weather mapping software with different palette settings for a week in 2018.

"My computer just crashed one week," said Quinlan, who is based in Saskatoon, Saskatchewan. "Then I had to use my colleague's computer to complete my weathercasts. And back then they happened to have a different temperature color contour on their national temperature map."

In 2018, Global News meteorologists selected their own palettes for forecasts, he said. But by the end of 2022, the company standardized the colors.

A reverse image search reveals the second photo in the posts is a screenshot from a July 26, 2022 Global News broadcast (archived here).

Quinlan's forecast from July 9, 2018 (archived here) does feature cooler colors. But similar videos from June and August of that year show deeper oranges and reds -- similar to those in the 2022 broadcast (archived here and here).

This screenshot taken August 18, 2023 shows a June 8, 2018 Global News broadcast featuring Peter Quinlan

This screenshot taken August 18, 2023 shows a July 9, 2018 broadcast in which Quinlan used mapping software with different color settings

This screenshot taken August 18, 2023 shows an August 8, 2018 broadcast in which Quinlan returned to using his own software

This screenshot taken August 18, 2023 shows a July 26, 2022 Global News broadcast

When the screenshots first circulated in 2022, Quinlan responded to social media inquiries about the color change with the same explanation about his computer (archived here).

"They just posted it and said, 'this is the narrative' or 'this was the reason why' -- that we were trying to really draw attention to warming or whatever it may be," Quinlan told AFP. "So, I just felt like I needed to address it at least once so that people would have that."
Scientific consensus

Most scientists agree climate change is to blame for more extreme weather events (archived here).

The Intergovernmental Panel on Climate Change said in its most recent report (archived here) that human activities have "unequivocally" caused global warming. July 2023 was the hottest month on record, according to the EU's Copernicus Climate Change Service.

A 2019 report from Environment and Climate Change Canada (ECCC) concluded the country is seeing more climate change effects as it warms at a faster rate (archived here).

"Observed changes in temperature extremes indicate that warm events are becoming more intense and more frequent, while cold events are becoming less intense and less frequent," said Eleni Armenakis, an ECCC spokeswoman, in an email on August 18, 2023.

In 2021, Canada recorded its hottest temperature ever at 49.6C (121F) in Lytton, British Columbia -- a town that was decimated by a wildfire days after the record was set.

The province faced another severe heatwave in summer 2023. Other parts of the country, including the Northwest Territories capital of Yellowknife, were evacuated due to wildfire threats.

More of AFP's reporting on climate change misinformation is available here.

WGA West Cancels Monday L.A. Pickets Ahead of Hurricane Hilary’s Expected Arrival

BreAnna Bell
Fri, August 18, 2023

The Writers Guild of America has canceled its scheduled pickets in Los Angeles for Monday “in an abundance of caution” ahead of Hurricane Hilary’s expected arrival.

The guild plans to resume pickets on Tuesday outside of Disney, NBC Universal, Radford and Warner Bros., Amazon, Fox, Netflix, Paramount, Sony, and TV City.

The category 4 tropical storm is expected to deliver harmful flooding to the southwestern U.S. as it climbs up the coast along the California-Mexico border. For the first time in history, the National Hurricane Center has issued a tropical storm watch which is in effect for the area including the Orange County-Los Angeles County area and Catalina Island.

On Friday morning, Hurricane Hilary was located nearly 360 miles south of Cabo San Lucas, Mexico, moving northwest at 10 mph with sustained winds of 145 mph.

Forecasters project the hurricane will lessen in strength after moving up from Mexico, but will bring heavy rainfall to Southern California, which, according to NBC News, mostly on Sunday and Monday.

SAG-AFTRA has yet to announce any coming changes in plans in preparation for the storm. As of Friday mid-afternoon, pickets are still scheduled to resume on Monday. A rep for the guild did not immediately respond to Variety’s request for comment, but sources say that a cancellation is likely.

The pickets are just one set of events that have experienced changes due to the coming weather. The Hollyshorts film festival closing night has switched locations from the Hollywood Highland Ovation Center’s outdoor courtyard over to Bardot’s indoor venue. (Originally, only the afterparty was scheduled to be held at Bardot.)

The Palm Springs and Yucca Valley areas of the Southern California desert are likely to be among the most affected, and Joshua Tree National Park will be closed from Saturday until Tuesday.