‘They would not listen to us’: inside Arizona’s troubled $53bn chip plant

Michael Sainato
Mon, August 28, 2023 

Photograph: Jonathan Ernst/Reuters

Posed in front of an American flag and a large banner reading “A Future Made in America Phoenix, AZ,” Joe Biden told a crowd of assembled workers, supporters and media last December: “American manufacturing is back, folks.”

Eight months on, the Phoenix microchip plant – the centerpiece of Biden’s $52.7bn US hi-tech manufacturing agenda – is struggling to get online.

Related: Why is the US about to give away $52bn to corporations like Intel? | Robert Reich

The plant’s owner Taiwan Semiconductor Manufacturing Company (TSMC), the largest chip maker in the world, has pushed back plans to start manufacturing to 2025, blaming a lack of skilled labor. It is trying to fast-track visas for 500 Taiwanese workers. Unions, meanwhile, are accusing TSMC of inventing the skills shortage as an excuse to hire cheaper, foreign labor. Others point to safety issues at the plant.

The success of the plant – in a crucial swing state – is likely to get even more scrutiny as Biden prepares for the 2024 election cycle and US tensions with China over technology, and Taiwan, escalate.

Biden signed the Chips and Science Act, which includes $52.7bn in loans, grants and other incentives, and billions more in tax credits for manufacturers to produce the chips in the US, in August 2022.

The Arizona project is the flagship in the president’s efforts to tout the law’s effects and TSMC’s promised $40bn investment in US chip production plant is one of the largest foreign investments in US history and the largest ever in Arizona.

The stakes could not be higher. Semiconductor chips are the essential components of computers, smartphones and other electronic devices, and the coronavirus pandemic exposed how vulnerable the US had become to imported chips. About 12% of semiconductor chips are made in the US, down from 37% in 1990. Boosting US production will add thousands of jobs as well as securing US supplies at a time of worsening relations with China, whose rapidly growing industry accounts for about 9% of global semiconductor sales.

The Phoenix semiconductor manufacturing facility, or “fab”, is a huge undertaking, encompassing a 1,000-acre area north of Phoenix, set to include two fab facilities. Construction is expected to generate 21,000 construction jobs, with the workforce at the facilities estimated at about 4,500, and thousands of additional jobs at suppliers in the area.

But the construction of the plant has been hampered by accidents and misunderstandings, according to insiders who spoke to the Guardian.

A former supervisor at the site explained all contractors at the site operate under the management of two companies affiliated with TSMC, United Integrated Services (UIS) and Marketech International Corp, and blamed delays on disorganization from management and a lack of knowledge by bosses from Taiwan on adhering to safety codes and regulations in the US.

If you disagreed, they threatened “to take work from you and give it to somebody else”, they said. They requested to remain anonymous for fear of retaliation from their general contractor employer. “Then the non-union contractors couldn’t get enough guys out there who were skilled enough.”

They said when they started working at the site, all workers went through a safety training program, but out in the field, they never saw the people who ran that program or safety protocols enforced.

“There were multiple general contractors all in the same little areas, all of them saying different things. Nobody ever coordinated anything; everybody was always in each other’s way, people were storing material everywhere, and it was constantly holding up little projects,” they said.

The TSMC founder, Morris Chang, left, shakes hands with the Nvidia president and, CEO Jensen Huang, right, at the TSMC facility under construction in Phoenix. 

Photograph: Ross D Franklin/AP

They explained the main contractors would give them a priority task to complete, but that it would change daily, or they would completely change their mind, making it impossible to complete tasks and add to delays.

“When you have to put stuff up, tear it down, put it up, tear it down, literally five or six times, that’s going to cost five or six times the original quote, probably more because you have to get demolitions involved,” the worker said. “This was constantly the whole process. Everything was rushed. They weren’t giving us actual blueprints, just engineer drawings. It felt like a design-as-we-go type of deal. The information we were getting was really strange, never complete, and always changing. We would get updates constantly and these were big updates to the point where we would have to start pulling things down.”

The worker also criticized frequent evacuations of the job site that occurred mostly due to false alarms and other communication issues that delayed work. They described long traffic lines and wait times to travel in and out of the job site that worsened whenever it rained because of the mud and said the constant turnover of contractors for different job tasks made it even more hectic.

They also noted that portable toilets were too few and were never properly cleaned or stocked with toilet paper and soap, probably resulting in workers getting sick. The worker said instead of calling 911 for safety emergencies, workers were directed to call an internal safety hotline, but that those medical services always took a long time to respond.

“I’ve never been on a job site like this. A job site this big with this many people, you have to be super safe, everything kind of has to slow down because you’re always in somebody’s way, so you have to have a perfect plan if you want to pull this off,” they concluded. “I think they need to get those Taiwan contractors out of there because they are not used to building in America at all. They’re hiring us as professionals to give them a quality installation and advice and direction on how to install things, but they would not listen to us at all.”

Workers and local unions have disputed TSMC’s characterization of the workforce and reasons for the delays. The Arizona Pipe Trades 469 is currently petitioning against TSMC’s application for 500 visas for workers from Taiwan to build the facilities.

A TSMC spokesperson characterized these new visa applications as part of a new phase of construction in the project to install process equipment.

“To ensure this critical phase of tool installation goes smoothly and successfully, it is a very common practice in the semiconductor industry to have a very limited number of experienced specialists from different overseas locations onsite to assist with important steps in the process. These experienced individuals have deep familiarity with our supplier equipment and will partner with our strong local workforce during this phase,” said the spokesperson in an email.

In an op-ed, Aaron Butler, president of the Arizona Building and Construction Trades Council, criticized TSMC’s announcement as an attempt to endanger American jobs and disputed claims from TSMC that the US workforce lacks the experience and skills required to complete construction.

“Blaming American workers for problems with this project is as offensive to American workers as it is inaccurate,” Butler wrote. “TSMC is blaming its construction delays on American workers and using that as an excuse to bring in foreign workers who they can pay less.”

In June, the American Prospect reported the site had been dogged by mistakes, injuries, safety issues. TSMC has refused to sign a project labor agreement with local labor unions, leaving the majority of the workforce to non-union contractors, and unions have reported an influx of Taiwanese workers at the job site in lieu of union-backed positions after incentive wages were cut for electricians at the site.

Another former worker at the site in 2022 who requested to remain anonymous for fear of retaliation from their contractor employer, told the Guardian they experienced numerous issues working on the site, from not being paid for hours worked to health issues from chemical exposure on the site.

“The guys were spraying fireproof chemicals on the I-beams. It didn’t matter if you were having lunch, they’d just spray right above you. Everyone out there had the same cough. I’m sure it was because of that. I left the job and my cough cleared up a month later,” the worker said.

TSMC did not respond to specific safety complaints and issues, but a spokesperson said in an email, “TSMC is deeply committed to workplace safety in the operation of all our facilities, along with each of our active construction projects, including TSMC Arizona. We are regularly audited against known safety standards by organizations such as Arizona Department of Safety and Health (ADOSH). TSMC also conducts its own internal audits of safety records against state and national figures.

“In Arizona, our recordable safety incident rate is nearly 80% lower than nationally reported figures, and our lost-time incident rate is almost 96% lower.”

TSMC’s only other US fab, located in Camas, Washington, experienced similar issues in its construction and development. It first opened in 1998, but plans to build additional factories at the Wafertech site never panned out.

In a 2022 interview, TSMC’s founder, Morris Chang, said the facility struggled to find enough staff and that costs exceeded expectations and told the then House speaker, Nancy Pelosi, during a visit to Taiwan the same year that US efforts to rebuild chip manufacturing domestically were “doomed to fail”. In 2013, the IBEW union attempted to organize electricians at the site but were met with staunch anti-union resistance from the company.

A former Wafertech employee who requested to remain anonymous due to signing a non-disclosure agreement told the Guardian that Wafertech told American employees during an all-staff meeting that they were all lazy. (In July 2023, a popular Taiwanese YouTube channel accused the Arizona workers on the TSMC site of being lazy.)

“We were in shock and angry. The man that told us we were lazy during the all-employee meeting was the president of Wafertech at the time, Steve Tso,” they said. “Anyone in the hi-tech world understands how tightly these processes are run. Nothing is done without a procedure in place. To say that there are no Americans to do this part of the job is nonsense.”

A local representative for Wafertech did not comment directly on the remarks from Chang or the former employee but said in an email that WaferTech had been a successful member in the TSMC family over the past 20 years. “Internal employee meeting communications are confidential, but my recollection from those early days is that all of us were asked to give 100% effort to help Wafertech succeed.”

One of the former TSMC workers concluded that workers were being buffeted by the political drama between the US and China. TSMC is economically vital to Taiwan, which has faced increasing diplomatic and military pressure from China as the company is expanding its global production with historic investments in the US.

“A lot of us feel TSMC is only dealing with the union and trying a little bit at all because they want that Chips Act money, they’re chasing it,” they added. “The US is just worried about getting their microchips because of all the drama with China and we’re kind of dragged into it.”

First Ugandan charged with 'aggravated homosexuality' punishable by death

Reuters

Updated Mon, August 28, 2023 



Christopher Street Day LGBTQ+ Pride parade

KAMPALA (Reuters) - A 20-year-old man has become the first Ugandan to be charged with "aggravated homosexuality", an offence punishable by death under the country's recently enacted anti-gay law, prosecutors and his lawyer said.

Defying pressure from Western governments and rights organisations, Uganda in May enacted one of the world's harshest laws targeting the LGBT community.

It prescribes life in prison for same-sex intercourse. The death penalty can apply in cases deemed "aggravated", which include repeat offences, gay sex that transmits terminal illness, or same-sex intercourse with a minor, an elderly person or a person with disabilities.

According to a charge sheet seen by Reuters, the defendant was charged on Aug. 18 with aggravated homosexuality after he "performed unlawful sexual intercourse" with a 41-year-old man. It did not specify why the act was considered aggravated.

"Since it is a capital offence triable by the High Court, the charge was read out and explained to him in the Magistrate’s Court on (the) 18th and he was remanded," Jacqueline Okui, spokesperson for the office of the director of public prosecutions, told Reuters.

Okui did not provide additional details about the case. She said she was not aware of anyone else having been previously charged with aggravated homosexuality.

Justine Balya, an attorney for the defendant, said she believed the entire law was unconstitutional. The law has been challenged in court, but the judges have not yet taken up the case.

Balya said four other people have been charged under the law since its enactment and that her client was the first to be prosecuted for aggravated homosexuality. She declined to comment on the specifics of his case.

Uganda has not executed anyone in around two decades, but capital punishment has not been abolished and President Yoweri Museveni threatened in 2018 to resume executions to stop a wave of crime.

The law's enactment three months ago drew widespread condemnation and threats of sanctions. Earlier this month, the World Bank suspended new public financing to Uganda in response to the law.

The United States has also imposed visa restrictions on some Ugandan officials, and President Joe Biden ordered a review of U.S. aid to Uganda.

(This story has been refiled to remove duplicated word 'the' in paragraph 1)

(Editing by Aaron Ross and Peter Graff)

‘Threatened and vulnerable’: Cop City activists labeled as terrorists pay high price

Timothy Pratt in Atlanta
Mon, August 28, 2023


Before boarding a flight from San Francisco to New York last month, Luke “Lucky” Harper was pulled aside and subjected to a search of his body and his belongings in front of other passengers waiting to board.

The experience would have been even more upsetting if it wasn’t the third time in several weeks. Harper was also searched in airports in Nashville, Tennessee and Salt Lake City, Utah. His name was called out on a loudspeaker; officials swabbed his hands, seeking traces of explosives.

Related: ‘Daily horrors are happening there’: dark side of jail where Trump surrendered

The 27-year-old aspiring writer had recently been released from jail in Dekalb county, Georgia, after being arrested on state domestic terrorism charges at a music festival on 5 March. He is one of 42 people facing the same charges in Georgia in connection with continuing protests against a planned police and fire department training center known as “Cop City”. Another dozen or so people have been arrested and charged with felony stalking of a police officer – after handing out flyers – and money laundering, among other charges. Some were jailed in solitary confinement for days without explanation.


Although nearly a year has passed since the earliest arrests, no one has been indicted. The terrorism charges have been denounced as part of a “broader attempt to smear protesters as national security threats” in a letter by Human Rights Watch, Amnesty International and other groups.

As with Harper, the lives of the arrestees have been upended. Some have lost jobs or been barred from attending school. Most are living with the psychological impacts of the criminal justice system being wielded against them with little to no publicly released evidence of having committed any crimes. At least 13 of them have posted fundraisers online to help with everything from housing to mental health.

Harper was arrested after arriving at the public park near the Cop City site the day before a 5 March music festival, part of a week of activities against the training center.

“I was there because I was curious,” Harper said.

He had never been to the forest before. During the festival, at least 100 people walked into the woods, crossed a creek and knocked over a fence where construction of the training center had begun. Some of them threw rocks and burned equipment. Harper was arrested hours later and accused of participating, in part due to his clothes being muddy and to a photo allegedly showing him at the scene.

Related: Philadelphia police change narrative in killing of Eddie Irizarry by officers

During his arrest, police separated several dozen people according to where they were from – Georgia or elsewhere. All 23 arrested that day were charged with domestic terrorism and only two were not Georgia residents. This is notable because the state has consistently labelled the movement against Cop City as the work of “outsiders”, in part because of the out-of-state residences of those arrested.

The arrests have also produced a chilling effect on the movement against the training center, which persists in its third year and came to global attention after police shot dead Manuel “Tortuguita” Paez Terán, an environmental protester, in a January raid on the forest – the first incident of its kind in US history. The state says Paez Terán shot first, but video footage from police nearby raises the possibility that one officer wounded another in the raid. A special prosecutor is evaluating the case.

The arrests mark the first time in the US that state domestic terrorism charges have been brought in connection with environmental or other protests. The underlying statute has been challenged in court as “unconstitutionally vague”, according to attorney Stanley L Cohen, who filed the petition. One of the two prosecuting agencies – the Dekalb county district attorney’s office – withdrew from the cases altogether in late June, leaving the state attorney general to pursue them.

But none of that has altered the state’s approach. On 31 May, Atlanta police staged a Swat-style raid in an Atlanta neighborhood, entering a house with long guns drawn. They arrested Marlon Kautz and two colleagues at the Atlanta Solidarity Fund, one of nearly 100 similar organizations across the country that helps arrested protesters with bail, legal defense and related needs.

Demonstrators protest Copy City outside the Atlanta city hall on 5 June 2023. Photograph: Erik S Lesser/EPA

The three were charged with money laundering and other financial crimes. Within days, a judge presiding over their bail hearing said he didn’t find the state’s case “real impressive”.

Georgia’s governor, Brian Kemp, called the three “criminals [who] aided and abetted domestic terrorism”. Speaking to the Guardian in June, Jocelyn Simonson, who analyzes bail funds in her new book, Radical Acts of Justice, said the arrests were “unprecedented”.

Reached at a co-working space recently, Kautz summed up the state’s approach as “repression that seems motivated by fear … [as] nothing seems to be working to slow down the movement”. Having police arrest him and his colleagues at gunpoint and take their computers, files, phones and other belongings has been “incredibly disruptive”, he said. The group also runs a project collecting and distributing “tons of produce” each week at a handful of Atlanta locations; donors withdrew support for several months because of fear of getting swept up in the arrests – meaning people who counted on free food were also affected.

The arrests, Kautz said, “are within the legal system, but outside the trial system – to make people feel uncertain, threatened and vulnerable all the time”.

“It’s bad for my mental health. It affects my ability to focus,” he said, adding that at the same time, “I’m not changing anything I’m doing.”

Kautz has seen community members show concern about being targeted by authorities after their arrests; several asked him “if it was safe to [volunteer to] collect signatures” from voters for a referendum in an upcoming election on whether Cop City should be built. “That captures the level of fear that they have.”

Speaking on the phone during the last week of a summer camp in Michigan, Charley Tennenbaum was admiring a yellow butterfly that had landed on their hand. It was an appreciated moment of calm in nature, only weeks after being released from nearly three months in jail. Tennenbaum, who uses they/them pronouns, was one of three arrested in late April for posting a flyer on mailboxes in a Bartow county neighborhood where one of the state patrol officers who shot Tortuguita lived.

The flyer called the officer a “murderer” and was addressed to the neighborhood’s residents. It made no threats. Tennenbaum was arrested and charged with felony intimidating a police officer. The FBI tried to pressure them into being interviewed. For their first four days in jail, police kept them in solitary confinement with lights on for 24 hours.

The case “raises serious first amendment concerns”, the ACLU of Georgia told the Guardian at the time.

“It is also part of a broader pattern of the state of Georgia weaponizing the criminal code to unconditionally protect law enforcement and to silence speech critical of the government,” the organization said.

Tennenbaum was supposed to spend the summer working at the summer camp, but lost the opportunity after being denied bond several times. A prosecutor from the state’s attorney general office convinced a judge in the rural county that records showing Tennenbaum had bought and been reimbursed for art supplies for a children’s event at the forest near the proposed Cop City site was evidence that they were somehow linked to domestic terrorism.

Fear is always used to send a message to the larger movement – and also to tie up energy, momentum, money and time 

Journalist Will Potter

“Getting arrested has absolutely changed my life,” Tennenbaum said. After being released from jail and driving from Georgia to Michigan, their car got a flat tire. On pulling over to the side of the road while calling for help, there was a knock on the window. A police officer asked, “Do you need any help?”

“I had a brief moment of panic,” they recalled. “Every police encounter feels like it could go wrong.”

Tennenbaum has also been doxed on social media by rightwing extremist Andy Ngo. The worst part: “People close to me were included in my doxing …[and] could be harmed.”

They live in Atlanta, but are afraid to go back. Their bond conditions – as with most of the arrestees – include not having contact with a host of people the state connects to the movement against Cop City.

“Atlanta is still my home, but it’s scary … I may want to go somewhere – but if a certain person is there – ,” Tennenbaum said.

Arrestees, attorneys and legal experts who have spoken with the Guardian about Cop City arrests to date have noted that the state may wind up not moving on the charges for years, only to later drop them.

“The way these processes take so much time is a form of punishment that is normalized,” said Tennenbaum, who is 36. “I may be dealing with this until I’m 40.”

After hearing about the Cop City arrestees, journalist Will Potter, author of Green Is the New Red, said it “feels like flashbacks”. Potter’s book details the federal government’s legal campaigns against animal rights and environmental groups such as Earth First and the Animal Liberation Front, in the 1990s and 2000s.

“From my reporting on the history of government tactics,” he said, “fear is always used to send a message to the larger movement – and also to tie up energy, momentum, money and time.”

The idea, Potter said, is to marginalize dissent; his research has led him to doubt “if the charges actually matter” to the state. “I’m not convinced … the plan is to solve a crime, or to protect the public,” he said. “It’s all political theater.”

BRICS Represents Nearly Half Of Global Population


Editor OilPrice.com
Mon, August 28, 2023 

Following the 15th annual BRICS summit, which was held in Johannesburg, South Africa last week, the bloc of five major emerging economies announced the admission of six new members.

Iran, Saudi Arabia, Egypt, Ethiopia, Argentina and the United Arab Emirates are set to formally join the group on January 1, 2024 to expand the bloc’s footprint in the Global South and grow its economic and political clout on the world stage, establishing a real counterweight to the Western-dominated G7.


As Statista's Felix Richter notes, the new bloc will represent roughly 46 percent of the world population, account for 29 percent of the world’s gross domestic product in nominal terms and 37 percent of global GDP at purchasing power parity.


You will find more infographics at Statista

“We shared our vision of BRICS as a champion of the needs and concerns of the peoples of the Global South. These include the need for beneficial economic growth, sustainable development and reform of multilateral systems,” South African president Cyril Ramaphosa said at a press briefing announcing the outcomes of the summit. He also indicated that the addition of the six new members is just the beginning of the bloc’s expansion process.

“As the five BRICS countries, we have reached agreement on the guiding principles, standards, criteria and procedures of the BRICS expansion process, which has been under discussion for quite a while,” he said. “We have consensus on the first phase of this expansion process, and further phases will follow.”

Interestingly, the new additions don’t move the needle too much in either category, as the new BRICS which will continue to be dominated by China and India, both in terms of population and economically. Combined, the six new members will account for roughly 10 percent of the group’s aggregate GDP, as Saudi Arabia is the only trillion dollar economy among the new entrants.

By Zerohedge.com

Global inflation pressures could become harder to manage in coming years, research suggests

CHRISTOPHER RUGABER
Updated Sun, August 27, 2023

 Federal Reserve Chairman Jerome Powell, left, chats with economist Philip Jefferson outside the Jackson Hole Economic Symposium near Moran in Grand Teton National Park, WY., Friday, Aug. 25, 2023. 

(AP Photo/Amber Baesler, File)

JACKSON HOLE, Wyoming (AP) — Rising trade barriers. Aging populations. A broad transition from carbon-spewing fossil fuels to renewable energy.

The prevalence of such trends across the world could intensify global inflation pressures in the coming years and make it harder for the Federal Reserve and other central banks to meet their inflation targets.

That concern was a theme sounded in several high-profile speeches and economic studies presented Friday and Saturday at the Fed’s annual conference of central bankers in Jackson Hole, Wyoming.

For decades, the global economy had been moving toward greater integration, with goods flowing more freely between the United States and its trading partners. Lower-wage production overseas allowed Americans to enjoy inexpensive goods and kept inflation low, though at the expense of many U.S. manufacturing jobs.

Since the pandemic, though, that trend has shown signs of reversing. Multinational corporations have been shifting their supply chains away from China. They are seeking instead to produce more items — particularly semiconductors, crucial for the production of autos and electronic goods — in the United States, with the encouragement of massive subsidies by the Biden administration.

At the same time, large-scale investments in renewable energies could prove disruptive, at least temporarily, by increasing government borrowing and demand for raw materials, thereby heightening inflation. Much of the world's population is aging, and older people are less likely to keep working. Those trends could act as supply shocks, similar to the shortages of goods and labor that accelerated inflation during the rebound from the pandemic recession.

“The new environment sets the stage for larger relative price shocks than we saw before the pandemic,” Christine Lagarde, president of the European Central Bank, said in a speech Friday. “If we face both higher investment needs and greater supply constraints, we are likely to see stronger price pressures in markets like commodities — especially for the metals and minerals that are crucial for green technologies.”

This would complicate the work of the ECB, the Fed and other central banks whose mandates are to keep price increases in check. Nearly all central banks are still struggling to curb the high inflation that intensified starting in early 2021 and has only partly subsided.

“We are living in this world in which we could expect to have more and maybe bigger supply shocks,” Pierre-Olivier Gourinchas, chief economist at the International Monetary Fund, said in an interview. “All of these things tend to make it harder to produce stuff and make it more costly. And that is definitely the configuration that central banks dislike the most.”

The shifting patterns in global trade patterns sparked the most attention during Saturday's discussions at the Jackson Hole conference. A paper presented by Laura Alfaro, an economist at Harvard Business School, found that after decades of growth, China's share of U.S. imports fell 5% from 2017 to 2022. Her research attributed the decline to tariffs imposed by the United States and the efforts of large U.S. companies to find other sources of goods and parts after China's pandemic shutdowns disrupted its output.

Those imports came largely from such other countries as Vietnam, Mexico and Taiwan, which have better relations with the United States than does China — a trend known as “friendshoring.”

Despite all the changes, U.S. imports reached an all-time high in 2022, suggesting that overall trade has remained high.

“We are not deglobalizing yet,” Alfaro said. “We are seeing a looming ‘Great Reallocation' " as trade patterns shift.

She noted that there are also tentative signs of “reshoring” — the return of some production to the United States. Alfaro said the United States is importing more parts and unfinished goods than it did before the pandemic, evidence that more final assembly is occurring domestically. And the decline of U.S. manufacturing jobs, she said, appears to have bottomed out.

Yet Alfaro cautioned that these changes bring downsides as well: In the past five years, the cost of goods from Vietnam has increased about 10% and from Mexico about 3%, adding to inflationary pressures.

In addition, she said, China has boosted its investment in factories in Vietnam and Mexico. Moreover, other countries that ship goods to the United States also import parts from China. Those developments suggest that the United States hasn't necessarily reduced its economic ties with China.

At the same time, some global trends could work in the other direction and cool inflation in the coming years. One such factor is weakening growth in China, the world's second-largest economy after the United States. With its economy struggling, China will buy less oil, minerals and other commodities, a trend that should put downward pressure on the global costs of those goods.

Kazuo Ueda, governor of the Bank of Japan, said during a discussion Saturday that while China's sputtering growth is “disappointing," it stems mainly from rising defaults in its bloated property sector, rather than changes to trade patterns.

Ueda also criticized the increased use of subsidies to support domestic manufacturing, as the United States had done in the past two years.

“The widespread use of industrial policy globally could just lead to inefficient factories,” Ueda said, because they wouldn't necessarily be located in the most cost-effective sites.

And Ngozi Okonjo-Iweala, director-general of the World Trade Organization, defended globalization and also denounced rising subsidies and trade barriers. Global trade, she asserted, often restrains inflation and has helped significantly reduce poverty.

“Predictable trade," she said, "is a source of disinflationary pressure, reduced market volatility and increased economic activity. ...Economic fragmentation would be painful.”

Foxconn Loses Bid to Toss EV Maker Lordstown From Chapter 11 Bankruptcy

Jonathan Randles
Mon, August 28, 2023 


(Bloomberg) -- Foxconn Technology Group lost a bid to kick Lordstown Motors Corp. out of bankruptcy, a win for the troubled electric vehicle maker as it attempts to find a new owner for its business.

Judge Mary Walrath on Monday refused to dismiss Lordstown’s bankruptcy case. She rejected Foxconn’s claim that the struggling EV startup improperly sought Chapter 11 protection to gain an unfair edge in a legal dispute between the companies over a deal to make Lordstown’s flagship Endurance trucks.

Lordstown said it was running low on cash before it filed bankruptcy in June and facing an exodus of employees and customers after Foxconn said it was prepared to exit a production partnership. Under the circumstances, Judge Walrath said Lordstown had a valid reason for filing bankruptcy and is now pursuing a reasonable strategy for repaying its creditors by attempting to sell the business.

Thomas Lauria, a lawyer representing Lordstown, said the Ohio-based manufacturer is formulating a debt repayment plan and is hopeful that it will find buyers in Chapter 11 for all or parts of its business. Potential buyers have until Sept. 8 to submit bids for the company’s assets, according to court documents.

“We expect to have one-or-more purchasers,” Lauria said.

Besides its dispute with Foxconn, Lordstown said it’s already used Chapter 11 to try and resolve other costly legal disputes. On Monday, Judge Walrath approved a $40 million settlement of Karma Automotive LLC’s allegations that Lordstown lifted designs and technology to develop its Endurance truck.

The bankruptcy is Lordstown Motors Corp., 23-10831, US Bankruptcy Court for the District of Delaware.

Most Read from Bloomberg Businessweek

Canada Walks Diplomatic Tightrope In Caucasus


Editor OilPrice.com
Mon, August 28, 2023

Canada is raising its diplomatic profile in the Caucasus, as domestic and foreign policy considerations are pushing Ottawa into the thick of the Nagorno-Karabakh conflict.

Canadian Foreign Minister Mélanie Joly is expected to attend the opening of a Canadian embassy in Yerevan in September. Canada is also set to become the first third-party state to join the EU Mission in Armenia (EUMA), under which unarmed observers monitor conditions along Armenia’s side of the frontier with Azerbaijan. The mission strives to “contribute to human security in conflict-affected areas in Armenia,” as well as foster better Armenian-Azerbaijani relations. Canada’s observers will be drawn from the ranks of the Royal Canadian Mounted Police, a source with direct knowledge of the arrangement told Eurasianet.

Canada’s interest in South Caucasus security appears connected to an ongoing diplomatic tussle with Turkey. Canadian officials announced their decision to join the EU monitoring mission just days after NATO’s annual summit in Lithuania, where Ottawa reportedly reopened talks with Turkey about the export of Canadian defense technology. Canada canceled military export permits to Turkey in 2021, after receiving “credible evidence” that Turkey transferred Canadian-made technology to Azerbaijan that was then used to great effect in the 2020 Nagorno-Karabakh war. “This use was not consistent with Canadian foreign policy, nor end-use assurances given by Turkey,” said former Canadian foreign minister Marc Garneau.

In exchange for supporting Sweden’s NATO bid, Turkey is demanding that its NATO allies, Canada included, drop embargoes on defense technology. A Reuters report cited an unnamed Turkish official as saying it was unacceptable for NATO allies to impose export restrictions on each other.

During the 2020 Nagorno-Karabakh war, drones played a major role in helping Azerbaijan recapture large swathes of territory. Amidst the fighting, Armenian forces shot down a Turkish-made TB2 Bayraktar drone, which was equipped with what Armenian Prime Minister Nikol Pashinyan said was an “ultramodern optical unit that was produced in Canada.” The component was indeed the MX-15D targeting system, made by Canadian defense manufacturer L3 Harris Wescam. “It’s the brains of the system,” Chris Kilford, Canada’s former military attaché to Turkey, told Eurasianet.

Without sufficient air defenses, the Armenian military suffered heavy losses from attacks by Azerbaijan’s fleet of TB2s. And it was this Canadian component that was critical to the drones’ effectiveness.

“I think what will happen is that the embargo will be lifted, but it will come with certain export controls,” Kilford said. Canada is hoping, it appears, that by joining the EU border monitoring mission in Armenia, it can hedge against any potential political fallout of lifting the embargo. Prime Minister Justin Trudeau’s government doesn’t want to create complications for NATO by maintaining the embargo, but neither does it want to alienate a small, but influential domestic constituency, the country’s Armenian diaspora community.


“The government here might be weighing up the domestic damage that could be done by lifting the embargo,” Kilford said, referring to the potential for vocal diaspora opposition. Canada’s next federal election won’t take place until 2025, but the popularity of Trudeau’s Liberal Party is sagging, and the government already faces an uphill struggle to retain power.

Joly already seems to be vigorously courting diaspora support. On August 20, she met with representatives of a diaspora organization, the Armenian National Committee of Canada (ANCC), during which they presented policy recommendations to ease hardships faced by Armenians in Karabakh. Joly also spoke at an annual festival of diaspora Armenians, held in Montreal from August 18-20, saying that Canada would play an active role in troubleshooting Karabakh-related issues. “It is important for Canada to play a very important role in the region,” Joly said in a video distributed via the @301arm channel on the platform formerly known as Twitter. “Armenians are facing a real threat in Artsakh.” Joly’s use of the term Artsakh, which is the Armenian word for the contested enclave, certainly pleased her Montreal audience, but its use in diplomatic dealings would be sure to alienate Azerbaijan.

While Kilford believes the embargo will ultimately be lifted, Canada could still block Turkey from importing the targeting pods from L3 Harris Wescam. Yet, even if Canada does so, the Turkish defense industry appears close to producing a suitable replacement. After Canada initially canceled its permits, Turkey developed its own targeting system for TB2s called CATS, made by Turkish defense manufacturer Aselsan. “I’ve visited many of Turkey’s arms manufacturers over the years. If they have to rely on their own CATS systems, it will become better and better,” Kilford said.

The main reason for Canada’s increased engagement with Armenia, Kilford says, is to exert a greater degree of influence over future developments, including the possible normalization of relations between Armenia and its Turkic neighbors.

While the EU monitoring mission has faced criticism over its inability to deter sporadic fighting along the border, it is still useful “in the margins,” said analyst Eric Hacopian. The patrols increase the potential political cost Azerbaijan could pay for conducting potential military operations on Armenian territory, he added.

By Fin DePencier via Eurasianet.org

India to launch solar observatory mission Aditya-L1 this week

Jagmeet Singh
Updated Mon, August 28, 2023 

Image Credits: ISRO

India is launching its first space-based solar observatory mission called Aditya-L1 to study the sun — just days after the successful landing of the country's moon rover mission Chandrayaan-3.

The launch of Aditya-L1 will take place at 11:20 pm PT on September 1 (11:50 am IST on September 2) from Satish Dhawan Space Centre in South India's Sriharikota using the polar satellite launch vehicle (PSLV-XL), India's space agency Indian Space Research Organization (ISRO) announced on Monday. After the launch, the spacecraft will require approximately 109 days to reach a halo orbit around the Lagrange point 1 (L1), which is between the sun and Earth, about 933,000 miles away.

ISRO aims to better understand coronal heating, coronal mass ejection, pre-flare and flare activities and their characteristics, dynamics of space weather and propagation of particles and fields through the Aditya-L1 mission. The 3,300-pound satellite comprises a number of science, observation and experimentation payloads, including four remote sensing payloads.

Aditya-L1, codenamed PSLV-C57, has various scientific goals, such as examining solar upper atmospheric dynamics, investigating chromospheric and coronal heating, observing on-site particles and plasma environments, and studying the physics of the solar corona and its heating mechanism. The mission also aims to identify drivers for space weather.

In 2008, Aditya-L1 was originally conceptualized as Aditya ("sun" in Hindi) to study the solar corona — the outermost layer of the sun's atmosphere. However, ISRO later renamed the mission Aditya L-1 to expand its objective and project it as a full-fledged observatory for studying solar and space environments.

The Indian government allocated approximately $46 million for the Aditya-L1 mission in 2019, though updates on the mission costs have not been disclosed yet.

Last week, the space agency grabbed international attention for the successful landing of its Chandrayaan-3 mission, which was launched in July as the successor to Chandrayaan-2 that crashed in 2019. The remarkable achievement of the spacecraft made India the first country to land on the lunar south pole and the fourth nation globally to make a soft landing on the moon, after the former Soviet Union, U.S. and China

India sets September launch date for mission to study the sun

Reuters
Updated Mon, August 28, 2023 

BENGALURU (Reuters) -India's first space-based observatory to study the sun will be launched on Sept. 2, the country's space agency said on Monday.

The announcement, in a post on messaging platform X, formerly known as Twitter, comes days after India became the first country to land a spacecraft on the unexplored south pole of the moon.

The Aditya-L1, India's first space-based solar probe, aims to study solar winds, which can cause disturbance on earth and are commonly seen as "auroras".

The craft, named after the Hindi word for the sun, will be launched from the country's main spaceport in Sriharikota using India's heavy-duty launch vehicle, the PSLV, which will travel about 1.5 million km (932,000 miles), the agency said.

"The total travel time from launch to L-1 (Langrange point) would take about four months for Aditya-L1," the Indian Space Research Organisation (ISRO) said in a post on X.

The government sanctioned the equivalent of about $46 million for the mission in 2019.

ISRO has not given an official update on costs and did not immediately respond to a call seeking comment.

India has achieved a reputation for successful space launches at cut-throat costs. It's latest moon mission had a budget of about $75 million- less than that of Hollywood space thriller "Gravity".

(Reporting by Nivedita Bhattacharjee in Bengaluru; Writing by Sakshi Dayal; Editing by Louise Heavens and Mike Harrison)

Japan suspends H-IIA rocket launch for moonshot because of strong wind

Updated Mon, August 28, 2023 

H-IIA No. 47 is on the launching pad at Tanegashima Space Center on the southwestern island of Tanegashima

By Kantaro Komiya and Rocky Swift

TOKYO (Reuters) - Japan's space agency suspended a planned launch on Monday of a rocket carrying what would be the country's first spacecraft to land on the moon, with operator Mitsubishi Heavy Industries (MHI) citing high winds.

Although the H-IIA rocket, the Japanese flagship launch vehicle, has a 98% launch success rate, unsuitable wind conditions in the upper atmosphere forced a suspension 27 minutes before the planned liftoff.

"High-altitude winds hit our constraint for a launch... which had been set to ensure no impact from debris falling outside of pre-warned areas," said MHI H-IIA launch unit chief Tatsuru Tokunaga.


Strong winds of nearly 108 kph (67 mph) were observed at an altitude of 5,000-15,000 metres (16400-49200 ft), Japan Aerospace Exploration Agency (JAXA) safety manager Michio Kawakami said. Multiple typhoons around Japan could have affected the wind conditions, he added.

The new launch date has not been decided, but will be no sooner than Thursday because of necessary processes such as re-fuelling, Tokunaga said. MHI and JAXA have said a launch could take place as late as Sept. 15.

The rocket was to be launched from JAXA's Tanegashima Space Center in southern Japan on Monday morning; it had already been postponed twice since last week because of bad weather. It will mark the 47th H-IIA Japan has launched.

'MOON SNIPER' MISSION

The rocket is carrying JAXA's Smart Lander for Investigating Moon (SLIM), which would be the first Japanese spacecraft to land on the moon. Tokyo-based startup ispace's Hakuto-R Mission 1 lander crashed on the lunar surface in April.

JAXA was planning to start SLIM's landing from lunar orbit in January-February 2024 after Monday's launch, aiming to follow the success of India's Chandrayaan-3 moon exploration mission this month.

Dubbed the "moon sniper", the SLIM mission seeks to achieve a high-precision landing within 100 metres of its target on the moon's surface - a technological leap from conventional lunar-landing accuracy of several kilometres, according to JAXA.

The rocket is also carrying an X-Ray Imaging and Spectroscopy Mission (XRISM) satellite, a joint project of JAXA, NASA and the European Space Agency.

H-IIA, jointly developed by JAXA and MHI, has been Japan's flagship space launch vehicle, with 45 successful launches in 46 tries since 2001. However, after JAXA's new medium-lift H3 rocket failed on its debut in March, the agency postponed the launch of H-IIA No. 47 for several months to investigate the cause.

Despite its goal to send astronauts on the lunar surface in the late 2020s, Japan's space missions have faced recent setbacks, with the launch failure of the Epsilon small rocket in October 2022, followed by an engine explosion during a test last month.

(This story has been refiled to restore a deleted 'a' in paragraph 1)

(Reporting by Kantaro Komiya and Rocky Swift; Editing by Kim Coghill and Gerry Doyle)

The SpaceX Starship Explosion Blew A Hole In The Ground And Burned Part Of A Texas State Park

José Rodríguez Jr.
Mon, August 28, 2023


Photo: Patrick T. Fallon / AFP (Getty Images)


The damage caused by the SpaceX Starship explosion on April 20 is coming to light, and the environmental destruction the blast left behind in Boca Chica is more extensive than wildlife officials expected. It took just under four minutes after launch for several engines aboard Starship to malfunction — leading to the blast — but the failed attempt left a 385-acre debris field and sparked a 3.5-acre fire, as Bloomberg reports.


Chunks of concrete and twisted rebar were strewn along the perimeter of the blast, shocking U.S. wildlife scientists who visited the former launch pad. Fish and Wildlife Service officials were not allowed onsite until 48 hours later, which made them suspicious due to the delay. When they were allowed to survey the damage, FWS found the pad site was totally destroyed in the explosion and chunks of concrete had been scattered around, even into the nearby surf.

The officials, biologists working with the Fish and Wildlife Service, privately expressed disbelief at the extent of the scene, records obtained by Bloomberg News show. “The explosion was so extensive it sent concrete chunks flying into the surf,” said one email from Chris Perez of the FWS to colleagues. The environmental damage was due to the tremendous amount of force required to get the world’s largest rocket off the ground.

In the aftermath of the explosion and ongoing investigation overseen by the feds, Fish and Wildlife officials told the U.S. Department of Interior that SpaceX may have to re-design the entire launch pad, and added that the site “probably won’t see another launch for a while.”


Officials questioned the lack of flame-suppression technology at the site, which is standard across the launch industry. The SpaceX launch site had no flame diverters, no flame trenches, nor a water deluge system. These are used to “dampen and divert the intense forces, heat and gases” created during a launch.

But since these were absent from the launch pad, the force of the explosion reportedly let loose a “‘rock tornado’ of power, heat and gas” that blew a hole in the ground under Starship. And debris went flying, harming a public state park and endangering local flora and fauna. Government agencies, including the FAA and FWS may require further environmental safety measures before clearing another launch attempt — in the wake of the latest damage. Elon Musk’s space firm has long wrought both direct and indirect harm to the region.

Photo: Patrick T. Fallon / AFP (Getty Images)

The Starship rocket is supposed to ferry humans to the Moon and, eventually, to Mars, but the world’s biggest rocket is still struggling to get off the ground. Elon Musk has referred to such incidents as part of his “successful failure formula,” according to Reuters.

A senior adviser to SpaceX said the company embraces failure when its consequences are low. But who gets to decide when consequences are low or not? Musk? SpaceX? The residents of the region where Musk has set up shop? Or maybe the flora and fauna?


In light of the harm SpaceX keeps causing South Texas, Musk should amend the formula and call the explosion a failure, simply put. Then, Musk could take responsibility and adopt safety measures that experts have been recommending for years, which would help ensure SpaceX keeps working toward a safe launch without incurring more damage to the area.

Photo: Patrick T. Fallon / AFP (Getty Images)

Photo: Patrick T. Fallon / AFP (Getty Images)

More from Jalopnik

Pope says 'backward' U.S. conservatives have replaced faith with ideology

Associated Press
Mon, August 28, 2023

Pope Francis arrives for his weekly general audience in the Pope Paul VI hall at the Vatican, Wednesday, Aug. 23, 2023. Pope Francis has blasted the “backwardness” of some conservatives in the U.S. Catholic Church, saying they have replaced faith with ideology and that a correct understanding of the church envisages doctrine developing over time.

 (AP Photo/Andrew Medichini, File) 

ROME (AP) — Pope Francis has blasted the “backwardness” of some conservatives in the U.S. Catholic Church, saying they have replaced faith with ideology and that a correct understanding of Catholic doctrine allows for change over time.

Francis’ comments were an acknowledgment of the divisions in the U.S. Catholic Church, which has been split between progressives and conservatives who long found support in the doctrinaire papacies of St. John Paul II and Benedict XVI, particularly on issues of abortion and same-sex marriage.

Many conservatives have blasted Francis’ emphasis instead on social justice issues such as the environment and the poor, while also branding as heretical his opening to letting divorced and civilly remarried Catholics receive the sacraments.

Francis made the comments in a private meeting with Portuguese members of his Jesuit religious order while visiting Lisbon on Aug. 5; the Jesuit journal La Civilta Cattolica, which is vetted by the Vatican secretariat of state, published a transcript of the encounter Monday.

During the meeting, a Portuguese Jesuit told Francis that he had suffered during a recent sabbatical year in the United States because he came across many Catholics, including some U.S. bishops, who criticized Francis’ 10-year papacy as well as today’s Jesuits.

The 86-year-old Argentine acknowledged his point, saying there was “a very strong, organized, reactionary attitude” in the U.S. church, which he called “backward.” He warned that such an attitude leads to a climate of closure, which was erroneous.

"Doing this, you lose the true tradition and you turn to ideologies to have support. In other words, ideologies replace faith,” he said.

“The vision of the doctrine of the church as a monolith is wrong,” he added. “When you go backward, you make something closed off, disconnected from the roots of the church,” which then has devastating effects on morality.

“I want to remind these people that backwardness is useless, and they must understand that there’s a correct evolution in the understanding of questions of faith and morals,” that allows for doctrine to progress and consolidate over time.

Francis has previously acknowledged the criticism directed at him from some U.S. conservatives, once quipping that it was an “honor” to be attacked by Americans.

Pope Francis laments "reactionary," politicised, US Catholic Church

Philip Pullella
Mon, August 28, 2023 

Pope Francis leads the Angelus prayer from his window at the Vatican


By Philip Pullella

VATICAN CITY (Reuters) - Pope Francis has lamented what he called a "reactionary" Catholic Church in the United States, where he said political ideology has replaced faith in some cases.

In the 10 years since his election, Francis has been criticised by conservative sectors of the U.S. Church who are opposed to reforms such as giving women and lay Catholics more roles and making the Church more welcoming and less judgmental towards some, including LGBT people.

Francis made his comments on Aug. 5 in a private meeting in Lisbon with members of the Jesuit order, of which he is a member, during his trip for World Youth Day. They were published on Monday by the Jesuit journal Civilta Cattolica.

In a question-and-answer session, a Portuguese Jesuit said that during a sabbatical in the United States, he was saddened that many Catholics, including some bishops, were hostile to the pope's leadership.

"You have seen that in the United States the situation is not easy: there is a very strong reactionary attitude. It is organised and shapes the way people belong, even emotionally," the pope responded.

Religious conservatives in the United States often have aligned with politically conservative media outlets to criticise the pope over a host of issues such as climate change, immigration, social justice, his calls for gun control and his opposition to the death penalty.

"You have been to the United States and you say you have felt a climate of closure. Yes, this climate can be experienced in some situations," Francis said.

"And there, one can lose the true tradition and turn to ideologies for support. In other words, ideology replaces faith, membership in a sector of the Church replaces membership in the Church," he said.

Francis said his critics should understand that "there is an appropriate evolution in the understanding of matters of faith and morals" and that being backward-looking is "useless".

As an example, he said some pontiffs centuries ago were tolerant of slavery but the Church evolved.

One of the pope's fiercest American critics, Rome-based Cardinal Raymond Burke, wrote in an introduction for a recent book that a meeting of bishops called by Francis for this October to help chart the future of the Church risked sowing "confusion and error and division".

(Reporting by Philip Pullella; Editing by Angus MacSwan)

How an Oil Giant Took Control of Biden's Billion-Dollar Bet on Carbon Capture

Kevin Crowley
Mon, August 28, 2023 





(Bloomberg) -- When Occidental Petroleum Corp.’s Vicki Hollub introduced the idea of “net zero oil” two years ago, few outside the chief executive officer’s inner circle knew what she meant. It was easy for climate-minded critics to dismiss the rhetoric as a greenwashing ploy from an embattled oil executive trying to stay relevant in a world transitioning away from fossil fuels.

But Hollub’s vision keeps moving closer to reality. This month she helped convince the Biden administration — which has been hostile to Big Oil — to spend hundreds of millions of dollars on the technology behind the industry’s most ambitious moonshot to keep fossil fuels alive.

Occidental won one of two major US Department of Energy grants to develop hubs for direct air capture, or DAC. That means Occidental will be in charge of an experimental facility built in Kleberg County, Texas, designed to pull carbon dioxide from ambient air and bury it underground. Hollub followed this milestone federal grant days later by agreeing to a $1.1 billion deal to buy Carbon Engineering. The Canadian startup is Occidental’s technology partner on the government-backed project as well as another another DAC plant in West Texas that — according to the company’s claims — will produce emissions-free crude oil.

The speed with which Occidental and DAC has captivated the Biden administration is alarming for environmentalists and some scientists. DAC remains by far the most expensive way to capture carbon, and the technology is largely unproven outside one small plant in Iceland. There are serious questions about whether the large quantities of power the process needs will offset the climate benefits. The loudest critics insist DAC should never be used to justify fossil-fuel extraction.

“Occidental has great technical strengths, and there’s a strong case that we will need gigaton-scale carbon removal,” said Danny Cullenward, senior fellow at Kleinman Center for Energy Policy at the University of Pennsylvania. “But when you have an oil company whose leadership is vocal about DAC providing a social license to continue oil production 80 years in the future, it’s directly at odds with a strategy that gets us to climate stabilization.”

Occidental declined to comment for this story, but referred to Hollub's previous comments stating that Occidental is ready to meet whatever level of demand exists in the future with lower- or zero-emissions oil.

The company’s plan for carbon-removal technology reach far into the future. Occidental’s first DAC plant won’t be operational until 2025 at the earliest — yet in the 10 years that follow, it has ambitions to build 100 DAC plants. If it succeeds, Occidental will become a world leader in a carbon-removal market that could be worth $150 billion a year by 2050, according to BloombergNEF.

All while Hollub plans on using the promise of DAC to keep the core oil business thriving.

Carbon dioxide has been central to Occidental’s business for decades. Before it became a big US shale player over the past 10 years, the company would buy aging domestic oil fields from larger rivals. To squeeze out the last dregs of crude, Occidental would pump CO2 into wells in a process called enhanced oil recovery, or EOR, that’s been used since the 1970s. It was a dependable business that paired well with riskier bets overseas.

But when Hollub was general manager of Occidental’s Permian EOR operations in 2011, she realized the company was limited not by the amount of oil in the ground, but by the availability of CO2. It was an odd problem, particularly because global warming is chiefly caused by its abundance of in the atmosphere. Hollub figured that if there was a way of extracting that CO2 from the air, it would be good for business and the environment, she told Bloomberg Green’s Zero podcast last year.

The problem is that for CO2 to be useful — for oil recovery or any other industrial application, such as putting the fizz in soda drinks — it needs to be in a concentrated, pure stream. And despite a 50% rise in atmospheric CO2 since pre-industrial times, the planet-warming gas makes up only 0.04% of ambient air.

Around the same time, David Keith, then a professor at the University of Calgary, was working on that exact same problem: How to turn dilute CO2 in the air to a concentrated stream for industrial processes. His startup, Carbon Engineering, used giant fans and liquid solvents to filter the gas from the atmosphere and won backing from billionaires including Bill Gates and Canadian oil sands tycoon Murray Edwards.

Carbon Engineering’s successful pilot plant in 2015 quickly attracted the attention of Hollub and other oil executives, who liked the idea of a climate solution that didn’t pose a direct threat to their core business of selling fossil fuels. If a DAC plant could pump more CO2 into the ground than would be produced by the resulting barrel of crude, then that oil could be considered “net zero,” according to Hollub.

Occidental invested in Carbon Engineering alongside Chevron Corp. in early 2019, pledging to accelerate commercialization of the startup’s technology. In the intervening years, however, outside factors threatened to derail the whole project. That includes Oxy’s $55 billion acquisition of Anadarko Petroleum that sunk the company’s stock and incurred the wrath of activist investor Carl Icahn. Hollub survived calls for her resignation, only for Covid-19 and plunging oil prices to hammer the company’s stock once again in 2020.

Through it all, Hollub stuck with her commitment to carbon capture. Occidental became the first US oil company to lay out an “ambition” to become fully net zero by 2050, including customer emissions. That put it ahead of US peers like Exxon, Chevron and ConocoPhillips, which have so far declined such measures.

Occidental’s talk of zeroing-out emissions in 2020 came alongside a pledge to build the world’s largest DAC plant in the Permian Basin, using Carbon Engineering’s technology. “This not only helps us to help the world by reducing CO2 out of the atmosphere, it will help our shareholders too by lowering our costs of enhanced oil recovery,” Hollub said at the time.

“[W]hen you have an oil company whose leadership is vocal about DAC providing a social license to continue oil production 80 years in the future, it’s directly at odds with a strategy that gets us to climate stabilization.”

Hollub has been cautious so far about spending too much of Occidental’s own money. Instead, she put the company’s investment dollars into quicker-payback efforts such as drilling for oil in the Permian.

When US President Joe Biden took office, the oil industry saw a chance to gain support for carbon capture, which had backers on both sides of the aisle. Occidental spent more than $10 million on direct lobbying in both 2021 and 2022, an increase of more than half over the previous decade’s annual average, and more than both Exxon and Chevron.

The company was a big winner in both those years’ major pieces of legislation: the Bipartisan Infrastructure Law and the Inflation Reduction Act. The IRA’s tax credit for regular carbon capture — the type that gathers a concentrated stream of CO2 from a refinery smokestack, for example — increased 70% to $85 a ton. And the credit for DAC became even more generous, rising to $160 a ton.

By the time the IRA passed in August 2022, Occidental’s finances had improved thanks to rising oil prices. Hollub hailed the IRA as “a net very positive bill” for the company, and within months she was touting the potential of the company building 100 DAC plants. It will be another year at least before the first is built, meaning Occidental would have to construct nearly 10 each year to hit that target. Even if the initial plant and the government-backed DAC hub capture and bury 1 million tons of carbon a year each — the upper end of the target for Occidental’s first — they would negate less than 0.1% of US energy-related emissions.

Corporate polluters are already clamoring for the technology they view as being able to generate high-quality carbon credits to offset their own emissions. Already, companies such as All Nippon Airways, Airbus, Shopify and Thermo Fisher have bought carbon removal credits from 1PointFive, Oxy’s DAC subsidiary.

While Hollub sees major potential to grow this market, she also has the option of using the CO2 to produce more of Occidental’s lifeblood: crude oil.

“We need to extend the life of oil production, because it’s the most intensive energy source and so we need to do it for the world — it makes the world a better place,” she said on Bloomberg Green’s Zero podcast last year. “Too many people are focusing on killing energy sources, rather than killing emissions. The common enemy that we all have are the emissions.”

Hollub has said the company’s DAC strategy doesn't necessarily mean producing more oil. She wants her company to be ready to meet whatever level of demand exists in the future with lower- or zero-emissions oil. But there’s reason to worry that the promise deploying DAC tomorrow will come at the expense of emissions reductions today. Oil companies are some of the main culprits that have driven greenhouse gas emissions to record highs in the first place.

“We have, after all, been locked in a dirty energy economy for over 250 years since the time of the industrial revolution,” said Ben Kolosz, a carbon-removal expert at University of Hull’s Energy and Environment Institute. Oil companies need a “paradigm shift to occur” before people see them as manager of carbon dioxide, and that takes time. “But it will happen, it’s just a question of when.”

The oil industry is far from alone in seeing an enormous future for technologies that can pull CO2 from the air. No less an authority than the UN-backed scientists on the Intergovernmental Panel on Climate Change see carbon removal as crucial in in getting to net zero. So too do researchers at the International Energy Agency and within the US government. This is especially in sectors like plastics and aviation fuels that are hard to clean up through other means.

But if carbon removal is not paired with other, more decisive forms of emissions reduction, then it will be counterproductive, warned Andrew Logan, a senior director at Ceres, a nonprofit coalition of investors and companies advocating for sustainability. Logan’s preferred counterpart, like many climate experts, is reducing fossil fuel production. That, however, is not something listed on Occidental’s agenda next to its bold new DAC efforts.

“It’s a shiny technology that would allow the world to avoid making hard decisions about energy use and continue business as usual,” Logan said. The danger is that focusing on DAC may be a way “not to take other, harder steps needed to decarbonize in the near term.”

Bloomberg Businessweek