Bond Traders Bet Next Ecuador President Can Stave Off Default

Maria Elena Vizcaino and Zijia Song
Sat, August 19, 2023


(Bloomberg) -- As Ecuadorians prepare to vote for a president Sunday amid its most violent election cycle in memory, investors are betting an unexpected rally in the country’s battered bonds isn’t finished.

The assassination of presidential candidate Fernando Villavicencio and a shocking rise in crime has made security and stability a focus of the election. That’s raised the chances a conservative, market-friendly candidate will at least make it to a second round in October, and reduces the odds of an outright win by a leftist ally of former President Rafael Correa.

Ecuador’s dollar bonds, in turn, jumped to their highest levels in a month, returning an average of 9% since the murder — compared to a loss of 1.9% across emerging market government bonds. Strategists from Citigroup Inc., JPMorgan Chase & Co. and EMFI Group are among those to recommend buying the debt.

“There could be more upside to the bonds from current prices if a market-friendly candidate makes it to the second round,” said Jared Lou, a money manager at William Blair in New York, who holds the debt. “Recent events highlight the deteriorating security situation in Ecuador.”

The violence adds to political chaos unleashed earlier this year when lawmakers mounted a campaign to impeach President Guillermo Lasso, who responded by dissolving congress, triggering snap elections. A second-round will be held in October if no candidate gets an absolute majority Sunday — or at least 40% of valid votes with a 10 percentage point lead over the runner-up.

In large part, the trade in Ecuador bonds is a bet that whoever wins the presidency will be able to stave off default in the 18 months they will be in office — serving out the remainder of Lasso’s term.

The next large payments on the country’s $15.5 billion of sovereign bonds come due in 2025, the same year the next election will be held. Defaulting would be costly for any party looking to stay in power, said Mauro Favini, a senior portfolio manager at Vanguard, which holds the debt.

“I don’t think any government can govern under default and stay in default and pretend to be a successful economy,” said Favini. “It’s a very shortsighted strategy.”


Still, the country — which has defaulted 11 times since its history — remains highly distressed.

Investors demand an extra 17.5 percentage points of yield to hold Ecuador’s dollar debt, on average, over similar US Treasuries. And the market for credit-default swaps — a type of insurance against default — suggests a 91% chance the government will start missing payments within five years.

“Based on fundamentals it is cheap,” said Ricardo Penfold, a managing director at Seaport, “but that is trumped by politics and their serial defaulters status.”

Even after their recent rally, Ecuador’s bonds have handed investors losses of around 18% this year, the worst performer among emerging markets, according to a Bloomberg index. Fitch Ratings slashed the country’s credit score deeper into junk Wednesday, saying reforms to address Ecuador’s financing challenges won’t go through in the 18-month presidential term.

Most-Likely Scenarios

For investors, a best-case scenario in the first round would be a strong showing by right-wing candidate Jan Topic. He’s seen as the biggest contender for Correa’s hand-picked candidate Luisa Gonzalez, who polls have showed leading the race. It’s also the most likely outcome as Topic’s focus on security has helped him advance in the polls since Villavicencio’s death.

A runoff vote between her and center-right candidate Otto Sonnenholzner or Christian Zurita — the former journalist who’s replacing Villavicencio — would also be welcomed by the market. Investors would fret a runoff between Gonzalez and Indigenous leader Yaku Perez.

“The person who wins this election doesn’t actually matter that much,” said Sarah Glendon, an analyst at Columbia Threadneedle in New York. “They’re not in office long enough to get very much done.”

The composition of congress, where all seats are up for grabs, will be key for the next administration, Glendon said. On top of that, money managers will monitor for a referendum that, if approved, could lead to a 12% drop in the country’s oil output, Fitch estimates.

“The saving grace, at least for the short term, is the technical picture,” Citigroup strategists led by Dirk Willer wrote in a report. “The country maintains a decent fiscal standing and debt payments remain relatively low until 2025, which suggests a restructuring could be avoided in the near term.”

--With assistance from Stephan Kueffner.

Most Read from Bloomberg Businessweek

Net-Zero Goals Won’t Slow Down Oil Exploration

Editor OilPrice.com
Sat, August 19, 2023 

Underinvestment in oil and gas exploration has been a scarecrow for energy security for several years now.

Various industry executives, most notably perhaps those from the Middle East oil kingdoms, have warned that unless investment in new exploration rebounds, energy security will be compromised on a global scale.

Wood Mackenzie recently had some good news for these executives: investment in new oil and gas exploration is recovering and is set to average $22 billion annually over the next four years. Despite the billions being channeled into the transition away from hydrocarbons.

At the same time, there is a connection between the transition and the rebound in new exploration spending in oil and gas. That connection has to do with the new demands that the transition has created for exploration and production companies – pressure to focus on assets with a low emissions profile, for instance, and stricter environmental requirements that would make some discoveries unviable.

“While this rebound might surprise some, it must be seen in context. Exploration went through a boom during 2006-2014 and spend peaked at US$79 billion (in 2023 terms),” Julie Wilson, Wood Mac’s director of global exploration research, said.

“But in the prior six years, the average was US$27 billion per year in 2023 terms. While spending will increase, it won’t return to anywhere close to past highs and there will likely be a ceiling on the increase.”

Related: Recycling Breakthrough Makes Plastic Waste A High Value Commodity

In other words, as the recovery in spending is taking place amid a double-down on the transition, it will be constrained by that transition. Yet it is taking place despite the constraints, which is quite telling. Because the calls to end the hydrocarbons industry have only been growing louder since the start of the year.

Indeed, one campaign group dubbed Oil Change International slammed the Inflation Reduction Act as being “one of the biggest handouts to the fossil fuel industry in US history.

According to that group, “With tens of billions dollars in giveaways for the oil and gas industry, provisions expanding fossil fuel leasing, and incentives for dangerous and unproven technologies designed to keep the fossil fuel industry in business like Carbon Capture and Storage (CCS), hydrogen, and Direct Air Capture (DAC), this law will not accomplish what we need to have a livable future.”

Indeed, the IRA has money allocated for carbon capture and storage tech. It also has a lot more money to be spent on wind, solar, EVs, and charging infrastructure, and so does the EU. The West is definitely going all in on the energy transition, despite all the challenges that have emerged recently.

If spending oil new oil and gas exploration is taking place in this context, then there must be a very good reason for it, and that reason is not the record profits oil and gas companies made last year. They are part of the reason but not the whole of it. The whole of it is energy security.

The gas squeeze that pushed European prices sky-high last year reminded a lot of people embracing the transition that it does not really enhance energy security. It could, at some point, but that would take time, a lot more money and solving several major problems with wind, solar, and EVs. Right now, however, the only sources of energy that do provide energy security are the hydrocarbon sort.

The transition advocates were not the only ones reminded of that fact of life. The oil and gas industry itself may have temporarily forgotten it and got a wake up call last year. So now, spending is on the rise. And the industry is tying it to achieving transition goals.

“Continued investments in oil and gas will be needed to make sure that the energy transition happens in a balanced way with a secure supply of affordable and increasingly lower-carbon energy. We will contribute to this balanced transition by focusing our investments on the most profitable and carbon-competitive projects,” Shell’s Integrated Gas and Upstream Director, Zoe Yujnovich, said last month.

Indeed, a fact not often voiced by the transition advocates, both in political circles and outside them, is the fact that the transition away from hydrocarbons depends strongly on those same hydrocarbons.

The raw materials for the transition equipment are produced using machines that run on hydrocarbon fuels. The equipment itself is produced using energy from hydrocarbons—think China, solar panels, and coal powered furnaces—and there are hydrocarbon ingredients in that equipment—think wind turbine blades and epoxy resins.

In other words, spending on new oil and gas exploration is rebounding because, first, demand trends have demonstrated quite clearly that the world’s thirst for hydrocarbons is not falling but rising and, second, because the energy transition away from hydrocarbons depends on them.

There could certainly be a ceiling somewhere in there as investors flock to new opportunities arising from governments’ transition efforts, shunning the bad reputation of oil and gas. Yet just how high this ceiling will be remains to be seen. Ultimately, energy security would always trump everything else, however noble it might be.

By Irina Slav for Oilprice.com

SpaceX Posts Q1 Profit, Abandons Bitcoin Holdings; Cryptocurrencies Crash

HARRISON MILLER
08/18/2023

New SpaceX financial documents reported by the Wall Street Journal provide a rare look into Elon Musk's private rocket company. Cryptocurrency prices swung wildly after the late Thursday report, which revealed SpaceX sold its bitcoin holdings.

SpaceX posted a Q1 2023 profit of $55 million on $1.5 billion in revenue after two years of major, but narrowing losses, the WSJ reported.

The Hawthorne, Calif.-based company recorded $5.2 billion in total expenses for 2022, increasing from $3.3 billion in 2021. Fiscal 2022 revenue doubled to $4.6 billion with a loss of $559 million, improved from a loss of $968 million the year prior.

SpaceX generated $2 billion in capital from issuing stock last year, up from $1.5 billion in 2021. The company is valued around $150 billion following an employee stock sale in June.

Property and equipment expenses totaled $5.4 billion during last year and 2021 with significant research and development costs.

Meanwhile, results benefited from several moves. The company executed price increases for Falcon rocket missions. SpaceX boosted its Starlink prices for U.S. residential subscribers in 2022. In April, SpaceX raised the price of Starlink services by 9% to $120 per month for residential customers where internet capacity is limited. Subscribers in locations with excess internet capacity received a price cut to $90 from $110.

The company launched a Falcon 9 rocket carrying 22 Starlink satellites on Wednesday and the Falcon 9 returned to earth that evening. The next SpaceX launch is scheduled for Aug. 21. The next mission in the company's collaboration with NASA is set to launch Aug. 25.

SpaceX Sells Bitcoin Holdings

SpaceX sold its bitcoin holdings after writing down the value by $373 million in 2021 and 2022, the WSJ reported. Tesla (TSLA) had sold 75% of its bitcoin holdings last year.

Meanwhile, bitcoin, ethereum and other cryptocurrency prices tumbled late Thursday, but it was unclear if the SpaceX report was the cause.

Crypto liquidations reached over $1 billion over the past 24 hours as of Friday morning, Coinglass data shows. The bitcoin drop below $28,500 caused "material volumes" of long-bitcoin orders being liquidated, combined with spot-selling ahead of order dates. That sparked the main sell-off, Decentral Park Capital trader Lewis Harland told CoinDesk.

Bitcoin price fell as low as $25,392.05 Thursday evening, hitting a two-month low. It's trading near $26,000 late Friday, down 6.6% over the past 24 hours. Bitcoin had already retreated from about $28,600 to $27,600 on Thursday before the SpaceX news, as a strong dollar and risk-off trading weigh on cryptocurrencies.

Bazooka made a mint blowing bubbles. Now it's being snapped up for $700 million.

Amritpal Kaur Sandhu-Longoria, USA TODAY
Fri, August 18, 2023 


Bazooka Candy Brands, which includes the popular bubble gum and candies, just sold for $700 million.

The Wall Street Journal reports that private equity firm Apax Partners will buy the company from former Disney chief executive officer Michael Eisner's private investment firm The Torante Company, and private equity group Madison Dearborn Partners.

Bazooka was acquired back in 2007 when it was under The Topps Company Inc., which also manufactured trading cards. The trading card arm was later sold to Fanatics, and Eisner and MDP held on to the candy division, which was later renamed as Bazooka Candy Brands.

Gas prices spike: Americans face more sticker shock at the pump as gas prices hit 10-month high. Here's why

Who owns Bazooka?

Bazooka Candy Brands is a division of The Bazooka Companies, Inc. and markets lollipop brands such as Ring Pop, Push Pop, Baby Bottle Pop, and Juicy Drop and Bazooka Bubble Gum.

The brand was originally known as Topps Chewing Gum, and produced a “Topps Gum” out of its factory in Brooklyn, New York. The company developed Bazooka Bubble Gum after World War II and launched it in 1947. By 1953, the first Bazooka Joe comics made its debut, and the gum's sale expanded into international markets.

In 2022, Bazooka celebrated its 75th anniversary.

Biden’s infrastructure building boom is missing one thing: Workers

Shannon Pettypiece
Sun, August 20, 2023 

On the front lines of efforts to rebuild the country’s infrastructure under a plan central to President Joe Biden’s re-election pitch are the inmates in the Mansfield and Richland correctional institutions in Ohio.

Prisoners are attending a local community college program training them to climb 150-foot cellphone towers to install and repair equipment needed to expand broadband and 5G internet access, preparing them for jobs that companies have been desperate to fill once they leave incarceration.

“We’ve got more jobs than people,” Ohio Lt. Gov. Jon Husted, a Republican who leads the state’s workforce efforts, said in an interview. “In the past, someone would have said, ‘You’re spending this money [on inmates] and taking my job.’ But now, nobody wants these jobs. Nobody’s waiting in line for these jobs. They can’t find anybody to take them.”

Expanding broadband access is just one of the areas in which state and industry officials are scrambling to find workers as $550 billion in new federal infrastructure funds from the Infrastructure Investment and Jobs Act, which was passed in 2021, begins to come their way. But with unemployment hovering around historic lows, they are turning to whatever untapped pockets of potential workers they can find to fill the hundreds of thousands of jobs economists expect the federal spending to create.

Tower technician install broadband transmitters on a radio tower on the western edge of Emporia, Kansas in September 2022. (Mark Reinstein / MediaPunch/IPx via AP)

“There’s a real math problem of where do these workers come from,” said Mike Bartlett, the program manager for postsecondary and workforce success at the National League of Cities. “We’re seeing cities and localities turn to alternative pools of talent or talent that was always there but wasn’t always necessarily tapped or folks who had barriers to entering the labor market.”

Finding and training enough workers will be key to achieving the ambitious infrastructure goals that have become central to Biden’s re-election bid as he makes the case for how his policies have boosted the economy.

Biden traveled last week to Wisconsin, where he talked about how the federal government is helping replace aging bridges, improve the Milwaukee airport, expand high-speed internet access and replace lead pipes. He went on to attack Republicans for having voted against the plan.

“We used to be No. 1 in the world in infrastructure, but over time we slipped to the 13th-best infrastructure — 13th-best infrastructure in the world from No. 1,” Biden told the crowd in Wisconsin. “How can you be the best economy in the world with a second-rate infrastructure? Not a joke — how can you do that?”

But the wave of federal dollars comes at a time when companies have already been struggling to find workers, particularly in some fields that will be needed the most to complete the infrastructure projects, like welders, electricians and broadband technicians. The Association of Builders and Contractors, a trade group representing the commercial and industrial construction industry, estimates there will be 500,000 unfilled construction jobs this year. The group expects most of the hiring related to the infrastructure law to start next year and ramp up throughout 2025 and 2026.

“We’re in this situation where we’ve already got this skilled labor shortage, and now we’ve got all this money that’s coming in,” said Ben Brubeck, the vice president of regulatory, labor and state affairs for Associated Builders and Contractors, a national trade group. “It’s sort of a perfect storm of things happening right now.”

The construction worker shortage, which the industry has been struggling with for years, is largely being driven by a wave of baby boomers who are retiring from the industry and a lack of new workers coming into the construction trades, Brubeck said.

Meanwhile, the building boom has continued in the private sector, including for new semiconductor manufacturing plants spurred by separate legislation to encourage companies to build chip production facilities in the U.S. In Ohio, for example, work on a $20 billion Intel semiconductor facility began last year and will need an estimated 7,000 workers.

All that competition for workers could result in projects’ being delayed and costing more because of higher wages, on top of material costs that are already up 40% since before the coronavirus pandemic, Brubeck said.

“There’s a lot of concern that taxpayers aren’t really getting the best bargain for their investments,” he said. “There are going to be some serious delays, I think, because there won’t be enough labor in certain markets.”

Biden administration officials said the increases in wages and competition among workers aren’t necessarily a bad thing. They hope the jobs created by the new infrastructure law come with good pay, benefits and worker protections. The administration is also instituting policies to encourage the hiring of unionized workers for the jobs and to make sure the labor force comes from the communities where the projects are being built.

​​“The way we look at it is that a strong jobs market is a good thing,” a senior administration official said. “The idea that employers have to compete to provide good jobs is a feature, not a bug, of the president’s economic theory.”

Still, the administration has been working with local governments and employers on a variety of programs to try to build up that workforce with training and apprenticeship programs, with a focus on trying to bring more women and people of color into the workforce and recruiting workers from lower-income areas.

One of those programs is aimed at lower-income single mothers in Missoula, Montana, which hopes to use the federal dollars to repair its aging water infrastructure and modernize its energy use to reduce carbon emissions. Mayor Jordan Hess said the city is working with other communities and the Labor Department to find ways to remove child care barriers that have been keeping single moms out of the job market.

“If we’re going to build a new economy, we’ve got to figure out the workforce,” Hess said.

In the area of broadband internet, 23,000 to 35,000 more workers will be needed to meet the increased demand spurred by $65 billion in federal funds to improve internet access to some of the 30 million people who live in areas with no broadband access, according to the Government Accountability Office.

In Ohio, the first group of eight inmates started training as tower technicians in May and is expected to be fully trained by December. Twice a week, the inmates, who meet certain safety criteria, travel outside the prison to a training program run by a local community college. Once they are fully certified, the inmates will be able to start working in the job as salaried employees several months before they are released so they can save up money to have for housing and transportation once they are released, which studies have found helps lower recidivism.

The director of the state Department of Rehabilitation and Correction, Annette Chambers-Smith, said employers across a variety of industries, who once would have refused to hire ex-convicts, have been coming to the department looking for workers. She sees it as a win not just for employers, but also for the inmates.

“We release about 18,000 people a year, and those are all people that need jobs and will be more successful if they go into the workforce,” Chambers-Smith said. “We already know that if we can get someone a job, they’re much less likely to re-offend. Jobs and housing are what helps keep people free.”

The program being offered to the inmates is also available free to any worker across the state who is interested in the positions, she said.

In some ways, the inmates are well-suited for the work. Jennifer Sanders, the superintendent of the Ohio Central School System, which provides education and training to prisoners, said a criterion she was given by the companies that will go on to employ the tower technicians is that they have to be risk-takers to be willing to work 150 feet in the air.

“I kind of chuckled. I was like, ‘Oh, we’ve got that covered,’” Sanders said. “We want to make sure that our employers see the value of hiring this clientele. It’s been interesting, because the employers, I think, are very hopeful this population will be an answer for them.”

This article was originally published on NBCNews.com

The Climate Crisis and Colonialism Destroyed My Maui Home. Where We Must Go From Here

Kaniela Ing
Fri, August 18, 2023

As I watched the flames of the wildfires consume my beloved Maui, it felt as if the very pages from the Book of Revelations were coming alive.

Homes, sacred structures, and institutions flattened. Over 100 lives were lost, with a thousand more unaccounted for. Even the ancient 150-year-old Banyan tree, a guardian of my youth, was marred by the inferno. Each ember seemed to tell a tale, a memory, a piece of a narrative that connected countless generations.

The harrowing wildfires paired with a fierce hurricane wasn't just a tragedy. It felt like Goddess Papahānaumoku—Earth Mother, herself—raging at humanity's hubris. The disturbing silence left by the missing and the mourned souls tells of a disaster that's unnatural, shaped by the human hand—a byproduct of the dangerous dance between climate change and centuries of colonial greed.

While West Maui is no stranger to wildfires, the magnitude of the blaze that tore through Lāhainā is emblematic of a changing climate. Our once-wetland haven has been transformed into a vulnerable tinderbox. Compounding the problem was Hurricane Dora—made fiercer by the warming climate—which propelled the fire further. All of this underscores a painful truth: the first and most severely impacted by the climate crisis are often indigenous, Black, brown, and low-income communities. These groups have contributed the least to climate change, but have suffered the most, and must be prioritized in our transition to a better world.

We can't ignore the scars of history which set the stage for this disaster. Before the hotels, before Hawaii was known as a state or even a territory (and way before its illegal annexation), Lāhainā was the cradle of our civilization. It was the heart and capital of the Hawaiian Kingdom. The waters were so abundant that boats once surrounded the iconic Waiola Church. Kamehameha The Great’s palace stood tall at the town’s center, keeping watch over the shoreline.

Read More: The History Lost in the Maui Wildfires

But at the turn of the 20th century, American sugar barons came to exploit Hawaii's rich resources. They disrupted Lahaina's water supply and brought highly flammable grasses to Hawaii—the very ones that ignited with ferocity last week. Their heirs went on to monopolize land, marginalizing our indigenous population in the process.

Their legacy and extractive way of life endures. Maui’s most dominant corporations today, like Alexander & Baldwin, embody the legacy of those same barons who once sought to profit from our fertile lands. Their ethos of extraction and destruction persists in Maui’s most dominant industries: land speculation and tourism. These industries seek to destroy much of Hawaii’s natural beauty while gatekeeping sections of it for the privileged few.

This timeline of Hawaiian history could be experienced first hand by a walk down Lāhinā’s Front Street just two weeks ago. You could see milestones of our history represented in the street’s restaurants, stores, and historic buildings: from royalty, to whaling, sugar, tourism, and luxury. Today, much of Front Street is burned to the ground. It’s a potent and harrowing reminder of the terminal point of the exploitative trajectory Hawaii has been on for decades.

My greatest fear is that this trajectory of exploitation will continue in the recovery from the Maui wildfires. As whispers of reshaping Lāhainā emerge, with wealthy developers eager to mold it to their vision, our generation’s vision for social and environmental justice grows even firmer. Our recovery from the wildfires can’t just be about combating climate change—it has to be about returning control of our cherished lands to the people who hold them dear.

Read More: Why the History of Hawaii Makes People Fear Lahaina's Future

The future of Maui should be more than just a haven for tourists. Our land should cater to local needs over external desires. Instead of vast monocrops, we should diversify, nurturing fields that feed our own people. Our approach to housing must be rooted in necessity: We need to build homes to actually shelter our people, not to line the pockets of distant investors. With the Department of Hawaiian Homes fully funded for the first time and various land trusts eager to lend a hand, the moment is ripe to provide our many unsheltered Kānaka Maoli with homes that dignify their heritage.

The people of Maui, especially survivors, are taking charge of the recovery process, reshaping the blueprint for our island's restoration. We're picturing a community-driven, just recovery that not only reconstructs Maui but also fosters new leadership among Maui residents—from collaboratively rebuilding a school one day to advocating at the county council the next. As we rise from the ashes, our rebuilding efforts must champion hoʻomana Lāhui—the spirit of collective empowerment.

At the national level, it's past time for President Biden to officially recognize the climate crisis by declaring a climate emergency. This would enable him to halt the destructive fossil fuel production driving these disasters. Furthermore, substantial federal investments on the scale of trillions are required to prevent catastrophes like this one in the future and prioritize the welfare of working families in mitigation and recovery efforts.

Any climate solution would be incomplete without justice at its core. Kānaka Maoli, Native Hawaiians, should be central to the rebuilding and recovery efforts. We should have the authority to manage our lands and resources.

In these heartrending times, it's challenging to see beyond the immediate pain. But there’s a silver lining in our resilience. The wildfires of Maui, while devastating, have also ignited a spark in us. They’ve awakened a renewed commitment to not just rebuild, but to redefine what Hawaii stands for. This is our home, our history, our legacy. And it's our collective responsibility to ensure that Hawaii’s future is carved out of respect, understanding, and love for its past.

Just like the Banyan tree, Lāhainā may have faced devastation, but its roots are deep and resilient. As the Banyan regrows its branches—and recolors itselves with budding leaves—so too, will Lāhainā flourish again.

California's big bloom aids seed collectors as climate change and wildfires threaten desert species

AMY TAXIN
Sat, August 19, 2023 at 11:10 PM MDT·4 min read



2 / 18

California Desert Seed BankingPaperboy bush (Salazaria Mexicana) seedpods dangle from blooms on branches after this winter's historic rains, Wednesday, June 12, 2023, in the Mojave Desert near Joshua Tree, Calif. Flowers that haven't been seen in years bloomed across Southern California this spring after massive winter downpours, creating not only colorful landscapes but a boon for conservationists eager to gather desert seeds as an insurance policy against a hotter and drier future. (AP Photo/Damian Dovarganes)

JOSHUA TREE, Calif. (AP) — Flowers that haven't been seen in years bloomed across Southern California this spring after massive winter downpours, creating not only colorful landscapes but a boon for conservationists eager to gather desert seeds as an insurance policy against a hotter and drier future.

In the Mojave Desert, seeds from parish goldeneye and brittlebush are scooped up by staff and volunteers working to build out seed banks in the hope these can be used in restoration projects as climate change pressures desert landscapes. Already this summer, the York Fire burned across the Mojave National Preserve, charring thousands of acres in the fragile ecosystem including famed Joshua trees.

“This definitely highlights the importance of proactive seed banking as a fire management tool and how challenging it can be to keep up with the fire threats,” said Cody Hanford, joint executive director of the Mojave Desert Land Trust.

Wildfires across the West can be deadly and wreak havoc on local communities, with residents forced to evacuate and homes turned to ash. But they also can destroy large tracts of land and wildlife habitat in places such as the Mojave Desert, where they are becoming more commonplace due in part to the spread of invasive grasses prone to burning quickly, fueling flames, experts said.

Seeds long have been banked throughout the United States in a wide range of habitats. Initially, they were collected as a way to preserve rare and exotic plant species, but efforts now also focus on gathering from commonly-found plants that are increasingly in demand as climate change elevates the risk of wildfires and the growth of invasive species that can crowd out native vegetation.

Hanford said it's too soon to know what restoration might be needed in the Mojave National Preserve, where firefighters have largely contained the blaze. But fires like these encourage the land trust, which buys desert land for conservation, to expand its seed collection efforts, sending staff and volunteers out to gather seeds, clean and jar them for storage.

The process is manual and time-consuming. In Joshua Tree, California, volunteers head out on hiking trails when flowers are blooming to chart where plants are located and return to collect seeds when they are ready to harvest, said Madena Asbell, the land trust’s director of plant conservation programs.

The seeds are placed in paper bags or buckets, taken back and cleaned by hand or using an air-blowing device that removes chaff so they can be stored by the thousands in neatly labeled jars in refrigerators.

Asbell said her organization is ramping up collection thanks to grant funding and just as the rainy winter led plants like paper bag bush to bloom for the first time in years.

“2019 was the last wet year we had,” she said.

Seed banking efforts are underway across the country through a program aimed at putting seeds into long-term storage and using them for projects aimed at bolstering restoration. Funding for the federal Bureau of Land Management's program has increased in recent years, though demand for seeds to restore lands burned by wildfire or wildlife habitat far outstrips the supply, experts said.

In California, there are more than 4,000 seed collections through this program, representing more than 1,300 species of plants. That covers about a fifth of the state's known plant species, according to the agency.

“We have so much land to restore and not enough seeds to restore it all,” said Katie Heineman, vice president of science & conservation at the Center for Plant Conservation.

This year, however, presents a golden opportunity for seed banking in California due to winter storms that drenched the state, covered the mountains in snow and replenished rivers. The Chicago Botanic Garden, for example, has three times as many seed collectors in Western states this year as last, officials said.

More collections also are being made by Bureau of Land Management crews in the Mojave Desert region, the agency said.

One of the challenges in collecting seeds in this area is that it's so vast, and restoration is best achieved with plants from the same general location. Seeds previously collected by the land trust therefore won't necessarily be a fit for future restoration efforts after the York Fire, Hanford said.

While the need for restoration isn't unique to the West, the scale is much greater because of the size of the region's wildfires, said Kayri Havens, chief scientist at Chicago Botanic Garden.

“As our climate changes, places we thought in the past we wouldn’t have to restore, we’re finding out we have to restore," Havens said. "The Mojave Desert now burns. It was not a place that had wildfire problems 30 years ago."

UK

Voters won't accept 'economic destruction' to reach net zero, union leader warns Keir Starmer
Dominic Penna
Sun, August 20, 2023

Gary Smith, the general secretary of the GMB union, said a rush to abandon oil and gas would be a “disaster” - GM/PA

Voters will not accept “economic destruction” to achieve net zero, one of Britain’s biggest unions has warned Sir Keir Starmer.

Gary Smith, the general secretary of the GMB union, said a rush to abandon oil and gas would be a “disaster” and urged the Labour leader to rethink his green objectives.

The debate around net zero, which Britain is legally obliged to reach by 2050, has intensified after a surprise Tory victory at the Uxbridge by-election last month, with Labour blaming its defeat on the backlash to the expansion of London’s ultra-low emissions zone (Ulez).

However, Sir Keir’s party still plans to place its decarbonisation agenda at the heart of its offering at the next general election, with its multi-billion-pound Green Prosperity Plan designed to mimic Joe Biden’s big spending on environmental policies.

Warning that politicians had displayed a “dishonesty” about the costs of hitting climate targets, Mr Smith suggested Labour risks throwing away its double-digit poll lead if it does not strike the right tone on the issue.

Sir Keir Starmer plans to place decarbonisation at the heart of Labour's offering at the next general election - Anadolu/Anadolu

“The danger is if they get the discussion wrong on oil and gas and how we heat our homes and how we power industry, it becomes Ulez on steroids,” he told the Sunday Express.

“I think Labour got it wrong [in Uxbridge]. I think it was ill-thought-through what they said, and I hope their position is changing as they face up to the realities of the complexities and challenges of net zero.

“If politicians don’t listen, don’t take people with them, there will be a backlash and it will be to the Right.”

Reform UK, the insurgent Right-wing party led by Richard Tice, has called for a referendum on the 2050 net zero target.

A number of Conservative backbenchers echoed its calls for a popular vote last week, although the idea was subsequently rejected by Rishi Sunak.

In a broadside at Sir Keir’s plans to ban the granting of new licences to explore oil and gas fields in the North Sea, Mr Smith added: “Allowing oil and gas to wither will be a disaster for national security.

Energy policy promises to be a major issue in the next general election - Igors Aleksejevs/iStockphoto

“I think there has been a fundamental dishonesty at the heart of our politics about how complex energy is and about how costly any transition is going to be. People are not going to tolerate economic destruction to try to achieve net zero.”

Sir Keir has sought to moderate Labour’s image on environmental issues in the wake of disruptive high-profile stunts by climate campaigners including Greenpeace and Just Stop Oil in recent weeks.

Writing in the Times earlier this month, he described the demands of Just Stop Oil as “contemptible” and insisted he would work with oil and gas giants to secure a managed transition to net zero based on investment in newer technologies such as carbon capture.

The Conservatives have sought to exploit the political divide on the issue, with Grant Shapps, the Energy Security Secretary, indicating Labour’s strategy would cause blackouts, while Mr Sunak has pledged to achieve net zero in a “proportionate and pragmatic” way.

Cargill Tests 123-Foot-Tall Sails in Effort to Slash Fuel Burn

Jack Wittels and Gerson Freitas Jr
Sun, August 20, 2023 at 5:01 PM MDT·5 min read





(Bloomberg) -- The world’s largest agricultural trader hauls 225 million tons of cargo around the globe each year on hundreds of colossal vessels. Now one of those ships is being powered, in part, by wind.

The Pyxis Ocean, an 80,000-ton bulk carrier chartered by commodity giant Cargill Inc., just finished her maiden voyage from Shanghai to Singapore after the installation of two massive steel and composite-glass “sails.” It’s the first ship to be retrofitted with two WindWings, each 37.5 meters (123 feet) high. They can cut the vessel’s fuel use by roughly a fifth, designer BAR Technologies says. If the trial goes well, Cargill hopes to add sails to as many as 10 more vessels.

“It’s going to make the new fuels a lot more affordable,” said Jan Dieleman, president of Cargill’s ocean transportation business. “Wind is there for free.”

If more operators and shipowners find ways to tap renewable sources like wind to propel their mammoth fleets, the notoriously dirty shipping sector could be on course to clean up its act. The industry spews as much carbon dioxide into the atmosphere each year as 283 coal-fired power plants, according to the latest greenhouse gas study from shipping’s global regulator, the International Maritime Organization. Although shipping is under increasing regulatory pressure to cut emissions, switching away from oil products is a major logistical challenge and expensive undertaking. The vast majority of the world’s fleet runs on conventional fuel made from oil, according to a report released last year from DNV, a ship classification society. The new generation of ships on order is also far from oil-free.

Wind “is one of these technologies that — even if we switch to zero-carbon fuels in the future — the ship owner, the ship operator, the charterer will see a benefit,” said Santiago Suarez de la Fuente, a ship performance manager at classification society Lloyd’s Register.

Of course, wind-powered travel is about as far from a newly invented technology as it comes. But since the multi-mast trading vessels that once ruled the seas ceded their dominance during the 19th century to powerful steamships powered by fossil fuel, the technology has been slow to make a comeback. Pyxis Ocean joins a miniscule fleet of just over two dozen large commercial vessels already operating with some form of wind-assisted propulsion today, according to the International Windship Association.

For Cargill, America’s largest private company, curbing fuel usage would be another step toward reducing emissions in its global supply chains by 30% per ton of product by the end of the decade.

Still, quantifying precisely how big a dent wind-assisted propulsion will make in future emissions isn’t easy: Performance depends on a ship’s route, how many sails are installed and, of course, the wind. Dieleman says he isn’t expecting the Pyxis Ocean, which is owned by Mitsubishi Corp.’s shipping arm and currently en route to Brazil, to make a return on investment for between seven and 10 years, if ever — it is, after all, a prototype. That said, if fuel prices were to suddenly surge, as they did last year, payback time would shorten.

The sails were added at a Cosco shipyard in Shanghai, China. The project received some funding from the European Union. Other financial details weren’t disclosed.

Cargill says one of the advantages of rigid sails like WindWings, which were produced by Yara Marine Technologies, is the way they can be added to existing ships, not just new construction. If a vessel is already running on a clean fuel, like green methanol, wind can cut costs; if a ship is still burning oil, wind can also cut emissions. Yara Marine said some large crude carriers could fit as many as six of the sails.

“This decade, energy efficiency is the most important thing to do to your fleet,” said Claus Graugaard, chief technology officer at the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, a nonprofit.

Estimated Fuel Savings

On an average route, each WindWing sail can save 1.5 tons of oil-derived fuel per day, according to designer BAR Technologies


The Pyxis Ocean, which has two sails, can save about 1,095 tons a year, almost 20% of what a Kamsarmax ship typically annually consumes


If three WindWing sails were to be installed on a Kamsarmax, fuel savings could be about 30%


Cutting one ton of oil-derived marine fuel use equates to saving a little over three tons of CO2 emissions

Yara Marine and BAR Technologies also have a deal to install four WindWings on another ship. BAR Technologies’ Chief Executive Officer John Cooper forecasts half of the orders for new tankers and bulkers will include some sort of wind-assisted propulsion in three years.

The global shipping regulator recently set new ambitions for cutting the industry’s greenhouse gas emissions, including reaching net-zero by or around 2050. The European Union has gone further, including shipping in its emissions trading scheme starting next year. Given the push to clean up the sector, shippers may someday start to rethink how they navigate the globe.

“We’re always used to going the shortest way,” Dieleman said. “Now, you might want to go the way where there’s more wind.”

Most Read from Bloomberg Businessweek

Japan's nuclear plants are short of storage for spent fuel. A remote town could have the solution

MARI YAMAGUCHI
Fri, August 18, 2023

This photo taken on Aug. 2, 2023, shows the Nagashima island of Kaminoseki town, southwestern Japan. A Japanese town says it has agreed to a geological study to determine its suitability as an interim storage site for spent nuclear fuel. Kaminoseki, a small town in the southwestern prefecture of Yamaguchi, says it will accept the offer of a survey by Chugoku Electric Power Co., one of two major utility operators, along with Kansai Electric Power Co., whose spent fuel storage pools are almost full. (Kyodo News via AP)

TOKYO (AP) — A Japanese town said Friday it has agreed to a geological study to determine its suitability as an interim storage site for spent nuclear fuel.

Kaminoseki, a small town in the southwestern prefecture of Yamaguchi, said it would accept the offer of a survey by Chugoku Electric Power Co., one of two major utility operators, along with Kansai Electric Power Co., whose spent fuel storage pools are almost full.

The Japanese government is promoting the greater use of nuclear power as a low-carbon energy source, but the country's nuclear plants are running out of storage capacity.

The problem stems from Japan's stalled nuclear fuel recycling program to reprocess plutonium from spent fuel for reuse. The government has continued to pursue the program, despite serious technical setbacks. A plutonium-burning Monju reactor failed and is being decommissioned, while the launch of the Rokkasho reprocessing plant in northern Japan has been delayed for almost 30 years.


After the meltdown of the Fukushima Daiichi nuclear power plant in 2011, many reactors were temporarily taken offline and their restarts delayed, helping to reduce the spent fuel stockpile.

However, when Prime Minister Fumio Kishida's government decided to reverse a phaseout and maximize nuclear power as clean energy, concerns over the lack of storage space were rekindled.

Earlier this month, Chugoku put forward a proposal to build a storage facility jointly with Kansai Electric, but the plan was met by angry protests from residents, who surrounded the mayor and yelled at him.

Chugoku Electric’s plan to build a nuclear power plant in Kaminoseki has been stalled for more than a decade since the Fukushima Daiichi disaster, delaying subsidies for the remote town, whose population is aging and shrinking.

“The town will only get poorer if we just keep waiting,” Kaminoseki Mayor Tetsuo Nishi told a televised news conference Friday. “We should do whatever is available now."

Kansai Electric, Japan's largest nuclear plant operator, is urgently seeking additional storage for spent fuel: the cooling pools at its plants are more than 80% full. The company pledged to find a potential interim storage site by the end of this year.

About 19,000 tons of spent fuel, a byproduct of nuclear power generation, is stored at power plants across Japan, taking up about 80% of their storage capacity, according to the economy and industry ministry.

The continuation of spent fuel reprocessing program and the delay have only added to Japan’s already large plutonium stockpile, raising international concern. Japan also lacks a final repository for high-level nuclear waste.

An intermediate facility is designed to keep nuclear spent fuel in dry casks for decades until it is moved to a reprocessing or to a final repository. Experts say it is a much safer option than keeping it in uncovered cooling pools at their plants.

If the storage is actually built, it will be the second such facility in Japan. The only other one is in Mutsu, near Rokkasho, which is reserved for Tokyo Electric Power Co. and a smaller utility.