Nevada legislators with rental properties voted against bills helping tenants

By Jessica Hill Las Vegas Review-Journal
December 3, 2023 -

At least six Nevada legislators who own rental properties voted against bills affecting rentals — from capping rent increases for seniors to increasing transparency on rental leases — prompting concerns about special interests’ influence on government.

The four different pieces of legislation passed the Democratic majority Legislature along mostly party lines, although they were ultimately vetoed by Republican Gov. Joe Lombardo, who later received criticism for rejecting the bills related to tenants rights and eviction reform.

Democrats say the legislation would have eased the Silver State’s affordable housing shortage, curbed eviction rates and increased transparency in rental agreements, while Republican legislators — some of whom were landlords themselves — argue the bills would have stymied the development of affordable housing units and created onerous burdens on landlords.

Political science and housing policy experts, however, called into question the conflict of landlords voting on legislation relating to rentals.

Nevada’s citizen legislature is made up of legislators who either have jobs that allow them to step away for six months every other year or are retired, said Ben Iness, coalition coordinator for the Nevada Housing Justice Alliance.


Many legislators are real estate agents, landlords or others involved in the housing industry, he said.

“What that means is that when we get these really promising, exciting, urgent and crucial tenant protection bills, that there’s this conflict of interest where they just kind of hit these walls,” Iness said. “It’s a weird conflict and dynamic.”

Fred Lokken, a political science professor at Truckee Meadows Community College, thinks it is a conflict of interest for legislators who own rental properties to then vote on legislation regarding rentals.

While legislators did not violate the state’s ethics policies, which Lokken said are not the most stringent, the best practice would be for legislators to recuse themselves, he said.

“It looks like they have something to lose if they approve the legislation,” Lokken said.

Legislators who own rental properties and voted against the bills say they properly disclosed their rentals with the secretary of state. They also say it was not a conflict of interest to vote on the bills because they would not have been impacted differently than any other person owning rentals.

Sen. Jeff Stone, R-Henderson, who owns Stone Premier Properties with his wife and has nearly 80 units, according to his financial disclosure, said a conflict of interest arises if a legislator votes for something that has a direct nexus to their profitability without affecting other people in their profession.

If he were to vote against rent control, he is not looking out just for himself, he said. Rather, “it applies to every landlord in the state of Nevada.”

Fixing Nevada’s housing crisis

A shortage of affordable housing continues to plague the Silver State. Las Vegas households must make at least $113,186 annually to afford a mortgage, according to Redfin, an online real estate brokerage, while the average annual household income is around $86,000.

To afford a fair market rent on a two-bedroom apartment that rents for $1,455, Nevadans must make nearly $30 an hour, according to a study from the National Low Income Housing Coalition, while the average hourly rate in Las Vegas is $17.89, according to ZipRecruiter.

The four bills — Senate Bill 335, Assembly Bill 218, Assembly Bill 340 and Assembly Bill 298 — aimed to curb evictions and provide tenants with more rights and transparency.


Senate Bill 335 would have continued an eviction prevention measure that temporarily delayed summary evictions for up to 60 days for people with pending applications for rental assistance. Since that bill was vetoed in June, more than 30,000 Nevadans have been evicted, according to the National Housing Justice Alliance.

Assembly Bill 218 would have prohibited a landlord from charging a tenant an amount that exceeded the amount of rent under the written rental agreement and would have required a landlord to provide a tenant with at least one method to pay rent that did not require a fee. It also would have allowed a tenant to bring civil action against a landlord if they charged more than the agreed amount in a lease.

Assembly Bill 340 would have established a new summary eviction procedure for tenants by putting the onus on the landlords rather than the tenant to initiate the eviction process, Iness said.

Assembly Bill 298 would have capped rent increases to no more than 10 percent for people 62 or older or those who rely on Social Security. It also would have required a landlord who collects an application fee from a prospective tenant to refund it if the landlord gave the unit to someone else or did not conduct the activity for which the fee was collected, such as a background check. The bill also would have required a rental agreement to include explanations of each fee charged during a rental term.

A couple of Republican legislators owning rental property crossed party lines to vote yes on that bill, although it was ultimately vetoed by Lombardo.

Legislators’ responses

According to their most recent financial disclosures from the beginning of 2023, there are nine Republican legislators who either own rental properties or whose spouses do: Stone, Heidi Kasama, Gregory Koenig, Rich DeLong, Melissa Hardy, Danielle Gallant, Carrie Buck, Alexis Hansen and Ira Hansen.

There are also 11 Democrats who either own rental properties or their spouses do, according to their financial disclosure statements: Lesley Cohen, Reuben D’Silva, Sandra Jauregui, Cameron “C.H.” Miller, Erica Mosca, Richard “Skip” Daly, Edgar Flores, Max Carter II, Sabra Smith Newby and Angie Taylor. Most Democrats, however, voted for the legislation.

Stone said he and his wife are compassionate landlords who do not take advantage of their tenants. They have had to raise rents to cover the rising property taxes and insurance rates, but the increases have been between 4 and 5 percent. He has also never evicted any of his tenants, he said.

Sen. Buck, R-Henderson, said her husband rents a three-bedroom home to a family who have been there for 12 years without any rent increases. Because of the singular nature of the property and its limited assessed value, the property did not meet the threshold to be considered a conflict of interest, she said.

Buck said she carefully considered the housing bills’ potential impact on Nevadans.

“Nevada is facing a housing crisis,” Buck said in an email to the Review-Journal. “The legislation I voted against, along with my Republican colleagues, would have increased rents and put homeowners further out of reach.”

Assemblywoman Alexis Hansen, R-Sparks, said she and Ira Hansen own their grandparents’ home and the building in which their plumbing business is located. Since her first session in 2019, she has made known her experience facing eviction as a child and owning a home and rental property as an adult.

“I am fully aware and lived the difficulties of maintaining stable housing while growing up,” she said in an email. “My votes reflect my difference of opinion on what the solutions or reasons for housing instability might be.”

Assemblyman DeLong said he owns two rental properties in Nevada, one commercial and another residential. He said all four of the bills went through committees he did not serve on, and when the bills came to the floor, he viewed them as he did all other bills by asking if they established good policy for Nevada. None of the bills directly affected his rental property business, he said.

Legislators Hardy and Koenig also apparently own rental properties, according to their most recent disclosures, however they are located outside of Nevada, so therefore would not have been impacted by the proposed legislation.

Sen. Daly, who owns one rental where his father-in-law lives in Sparks, went against his party and opposed Senate Bill 335 because he felt it was too one-sided and went too much against the landlord, he said. He voted for the other housing bills because he felt they were fair and did not create much of a burden on a landlord.

Daly said all the legislators he has encountered in both parties and both houses take disclosures seriously.

“I don’t see people try to make legislation favor themselves,” Daly said. “If they were trying to, it would be apparent and they’d be called on it. … I don’t think we should go mining for perceived missteps that don’t exist.”

The governor’s role

The Nevada State Democratic Party accused Lombardo of favoring developers who funded his gubernatorial campaign over the best interests of Nevadans by vetoing the legislation.

“It’s despicable that in the middle of an affordable housing shortage, Lombardo and legislative Republicans denied Nevadans relief from skyrocketing housing costs so that many of them could reap the financial benefits,” party spokesperson Stephanie Justice said in a statement.

Lokken, the political science professor, echoed those concerns and said this is reflective of too much influence from private interests — from mining to gaming to developers — in state government.

In response, Lombardo’s office referred the Review-Journal to his veto messages, where Lombardo took issue with the bills because they placed onerous burdens on Nevada’s residential rental markets and created additional hurdles for landlords.

“Not only would this make the eviction process more time consuming, it would also make it more costly — potentially worsening availability and accessibility to residential properties for those looking to rent,” Lombardo said of Senate Bill 335. “Since this bill would not serve to improve the landscape of Nevada’s residential renting market, I cannot support it.”

The impact

Nicholas Irwin, an assistant professor of economics and real estate at UNLV, said each of the bills would potentially have had different impacts on either the demand side — renters — or the supply side — landlords.

“Anytime the government gets involved with the market, especially a market like housing which is a pretty competitive market, it can have the potential to create efficiencies in the market,” he said.

Delaying evictions would have constrained the supply in the marketplace, Irwin said. Having some housing units tied up in an eviction process limits the market and creates a shortage, he said. Putting rent caps in place causes developers to limit the number of units in general, Irwin said. It can also lead to a person living in a house they otherwise may not be able to afford, he said.

Assembly Bill 340 would have clarified the eviction process and Irwin does not think it would have made a big impact on the housing market, he said.

Irwin said Assembly Bill 218 would have just provided more information to renters and made them aware of extra fees.

“If people are fully informed at the beginning, that just eliminates some of the inefficiencies in the market,” he said.

Irwin thinks some of the best solutions to address housing instability is providing incentives for developers to build affordable housing through tax breaks.

Contact Jessica Hill at jehill@reviewjournal.com. Follow @jess_hillyeah on X.

Billionaire tax rests on a disputed $14,729 refund at the US Supreme Court

Greg Stohr, Bloomberg News on Dec 4, 2023


WASHINGTON — Democratic dreams of imposing a wealth tax on the richest Americans risk being snuffed out by the U.S. Supreme Court in a dispute over a $14,729 bill.

Calls to tax assets in addition to income have grown since Senator Elizabeth Warren ran for the White House on the issue in 2020, with President Joe Biden’s 2024 budget requesting a “billionaire minimum tax” to ease the federal deficit. But in a case set for argument Tuesday, the justices will consider whether the Constitution effectively precludes Congress from putting a levy on stock holdings, real estate and other wealth.

“The case literally could involve trillions of dollars and directly affect the way our economic and tax systems work because it calls on the court to decide whether a wealth tax might be constitutional,” said John Yoo, a University of California at Berkeley law professor who helped draft a brief in the case for the anti-tax group FreedomWorks.

The court’s decision to take up the case puts the justices in the middle of the partisan battle over the nation’s tax and budget policies. The court is likely to rule next year in the middle of the presidential election campaign.

The case stems from a 2017 tax law provision that aimed to collect hundreds of billions of dollars on earnings accumulated and held overseas by big multinational companies. The provision, known as the mandatory repatriation tax, was part of a Republican-backed tax overhaul passed during Donald Trump’s presidency.

Taxpayers Charles and Kathleen Moore are seeking a refund of the $14,729 in taxes they paid on their ownership of a stake in KisanKraft Machine Tools Private Ltd., an Indian company that supplies tools and equipment to farmers.

The Moores invested $40,000 almost two decades ago, acquiring 13% of the company’s common shares. Although the KisanKraft has grown steadily since then, it has reinvested its earnings rather than distributing them to shareholders as dividends. The Moores, who are represented by the conservative Competitive Enterprise Institute, contend that they can’t be taxed since they never realized any gains.

Along the way, the Moores are arguing for a narrow interpretation of the Constitution’s 16th Amendment, the 1913 provision that empowered Congress to levy an income tax.

Alito Controversy

The Moores themselves have become a subject of scrutiny. Company documents indicate Charles Moore might have been more involved with KisanKraft than the couple revealed in the legal proceedings. He was a director of the company for five years and received thousands of dollars in travel-reimbursement payments, according to the company’s filings with India’s Ministry of Corporate Affairs, and he engaged in transactions that suggest he was more of an insider than a passive outside shareholder.

One of the Moores’ lawyers, David Rivkin of Baker & Hostetler, sparked another controversy when he co-wrote two article that described conservative Justice Samuel Alito in favorable terms. The articles, which appeared in the Wall Street Journal’s opinion section, gave Alito a forum to discuss calls for stronger ethics rules and the leak of the court’s 2022 abortion opinion.

Alito then rejected Democratic demands that he recuse himself from the Moore case, saying in an unusual statement that “there was nothing out of the ordinary about the interviews in question.”

The Moore case drew relatively scant attention when the court granted review last June, just as it was releasing a flurry of opinions at the end of its 2022-23 term. Outside groups and individuals have since filed more than 40 friend-of-the-court briefs underscoring the potential impact.

Tax ‘Chaos’

A victory for the Moores could cause “chaos” across the federal tax code and invite litigation over a swath of provisions enacted over decades, said Chye-Ching Huang, executive director of the Tax Law Center at New York University’s law school. She said the Moores and their allies are using the prospect of a wealth tax as a “diversion” in the case.

“What they don’t want the court to be focusing on is the very real damage their theory could have on the existing tax regime,” Huang said.

The Biden administration says the court can uphold the mandatory repatriation tax without making any judgment on a hypothetical wealth tax. Quoting from a 1943 Supreme Court case, U.S. Solicitor General Elizabeth Prelogar said the court traditionally “does not decide whether a tax may constitutionally be laid until it finds that Congress has laid it.”

Prelogar, the administration’s top Supreme Court lawyer, said a wealth tax, which would be levied on assets at a particular point in time, would be “fundamentally distinct” from an income tax, which targets economic gains over a period of time. She contends undistributed corporate earnings constitute income under the 16th Amendment.

The 16th Amendment authorizes Congress “to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States.”

Biden rejected an outright wealth tax as advocated by Warren during the 2020 campaign but has since embraced a scaled-back version. His most recent budget would require taxpayers worth more than $100 million to pay a minimum of 25% on their capital gains each year, whether they sold assets for a profit or continue to hold them. Biden touted it at this year’s State of the Union Address as a “billionaire minimum tax.”


The case, which the court will decide by late June, is Moore v. United States, 22-800.

_____

(With assistance from Michael Rapoport.)


©2023 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.
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No lettuce for Florida manatees this winter: Experts end feeding trial after two years

Max Chesnes, Tampa Bay Times on Dec 4, 2023


TAMPA, Fla. — For the past two winters, Florida wildlife biologists have experimented hand-feeding lettuce to hungry manatees in the Indian River Lagoon as the animals’ natural food source, seagrass, was in short supply from pollution problems.

This winter, though, there won’t be another feeding trial.

Wildlife experts say there are two main reasons for that decision: There’s enough seagrass in the Mosquito Lagoon — where manatees linger during the colder winter months — for the population to eat this winter, according to an announcement from the Florida Fish and Wildlife Conservation Commission.

The commission also said “there are currently no indications that manatees in this region are in poor or compromised body condition” due to a manatee die-off that began in 2021. A record 1,100 animals died that year, many from starvation in a human-fueled seagrass famine.

A federally designated “Unusual Mortality Event” is still underway for manatees on the Atlantic coast, and the U.S. Fish and Wildlife Service announced in October the agency is reviewing whether manatees should be reclassified as an endangered species.

The decision not to continue feeding manatees comes after state wildlife experts met with staff from the U.S. Fish and Wildlife Service and reviewed data from the previous two winters, according to the Florida wildlife commission.

“After careful consideration, the agencies are not providing manatees with a supplemental food source at the beginning of the winter season,” reads the announcement from Florida wildlife experts. “However, staff developed a contingency plan for supplemental feeding which they will implement if needed.”

Patrick Rose, an aquatic biologist and executive director of Save the Manatee Club, said he supports the decision to end the feeding trial, but added the caveat that there needs to be regular, in-depth monitoring to ensure manatees in the Indian River Lagoon are keeping their health.

“There’s much more vegetation available than there was at the worst part of the Unusual Mortality Event. But there’s still a long ways to go for the system to be fully recovered,” Rose told the Tampa Bay Times in an interview on Monday evening.

“By no means is the Mosquito Lagoon in great shape,” Rose said. “But it’s not at a point where it would be appropriate to continue the supplemental feeding.”


©2023 Tampa Bay Times. Visit at tampabay.com. Distributed by Tribune Content Agency, LLC.

Manatees dubbed ‘Romeo and Juliet’ to be freed from Miami Seaquarium after activist outcry

By Chris Nesi
Published Dec. 3, 2023

This version of Romeo and Juliet could have a happy ending.

A pair of aging manatees living in “ever-deteriorating conditions” at a Florida aquarium since 1956 will be relocated following complaints by an animal rights group and a damning report by the USDA about the conditions at the park.

The US Fish and Wildlife Service (FWS) said the manatees, named Romeo and Juliet after Shakespeare’s famous star-crossed lovers, will live out their remaining years in a sanctuary where their medical and social needs can be more carefully attended to, according to the Guardian.

Drone footage captured last month by advocacy group UrgentSeas and posted on X provided a bird’s-eye view of Romeo, 67, living in dismal isolation at the Miami Seaquarium.

In the heartbreaking video, the mammal was shown swimming all by himself in the brackish water of the aquarium’s dilapidated “Pompano Pools,” which are closed off to the public, where the animal rights group said he’s confined “all the time.”

 

“Manatees are semi-social animals and suffer psychologically when not living in pairs or groups,” read the caption on the video, which had been viewed more than 3 million times.

The release of the footage was part of the group’s #FreeRomeo campaign which had been active on social media.

Former marine mammal trainer and UrgentSeas founder Phil Demers, who has described Romeo’s lonely life as “Groundhog Day in hell,” was overjoyed at the news of the mammals’ imminent freedom.

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The manatees have been at the aquarium since 1956.TikTok/@urgentseas

“It’s a humbling experience to be a part of such a powerful and effective movement. It’s every activist’s dream to inspire change. I’m incredibly proud of the work of UrgentSeas,” he said.

A scathing inspection report by the USDA in July cited multiple failings by the aquarium to provide its animals with proper veterinary care and adequate living facilities.

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Inspectors found the aquarium was out of compliance with requirements.TikTok/@urgentseas

In one example, after an associate veterinarian’s employment was terminated by the Seaquarium on March 23, a single vet was left to care for the 46 marine animals and “hundreds of birds, fish, sharks and rays housed at the facility,” the USDA wrote in its report.

The inspectors also found the aquarium was out of compliance with requirements to keep “primarily social” animals like manatees housed at all times with “at least one compatible animal of the same or biologically related species.”

As a result of the report, the Miami-Dade Board of Commissioners set a deadline of Dec. 15 for the Seaquarium to address its numerous violations. UrgentSeas had planned to hold a demonstration at the Seaquarium the next day.

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Juliet the manatee, 61, (left) swimming with a manatee named Phoenix at the Miami Seaquarium in 2014.AP

A spokesperson for Miami-Dade Mayor Danielle Levine Cava told the Guardian that the Commission had issued a notice of default to The Dolphin Company, the Mexico-headquartered parent of Miami Seaquarium and that it was prepared to exercise its “option to all available remedies within the law” should it fail to meet its deadline to remedy the infractions.

FWS has not revealed the future home of Romeo and Juliet but told the Guardian that it’s looking at facilities that are part of the manatee rescue and rehabilitation partnership, a cohort of accredited aquariums, zoos and marine life centers where the animals can enjoy a vastly improved quality of life.

“FWS takes the health and welfare of manatees in managed care seriously [and is] working with an experienced team of manatee rescue and rehabilitation experts through the MRP to assist with the transport effort of manatees from Miami Seaquarium,” the Service said in a statement to the Guardian.

The mammals are expected to be transported to their new home as early as next week.

Johnson & Johnson is pushing to settle baby powder cases linked to asbestos

Jef Feeley, Bloomberg News on Dec 4, 2023


Johnson & Johnson is making a push to resolve lawsuits claiming its talc-based Baby Powder causes cancer linked to asbestos exposure to avoid facing some jury trials next year, according to people familiar with the effort.

A trio of law firms have reached agreements for settlements covering about 100 cases, said the people, who declined to be identified because they weren’t authorized to speak publicly. The financial size of the accords are being kept private, the people added.

The deals may be mentioned Tuesday as part of J&J’s investor presentation at the New York Stock Exchange if company officials update shareholders about the plan for corralling the decadelong talc litigation, the people said. The session’s main focus is the company’s long-term growth outlook and product pipeline.

The company is striving to find a way to resolve all current and future baby powder cases after a judge nixed its attempt to settle them for $9 billion as part of a unit’s bankruptcy filing. The deals are part of the manufacturer’s multipronged strategy to deal with the lawsuits, which have created a drag on its shares.

J&J declined to comment.

‘Hammered by Juries’

“It looks like they are finally stepping up to the plate and acknowledging they are going to have to settle cases to be done with this,” said Carl Tobias, a University of Richmond professor who teaches mass-tort law. “Ridding themselves of trial settings can only work in their favor since they’ve been getting hammered by juries.”

The New Brunswick, New Jersey-based company pulled its talc-based powders off the market in the United States and Canada in 2020, citing slipping sales. The world’s largest maker of health care products replaced talcum with a cornstarch-based version. J&J vowed to remove all its baby powders containing talcum powder worldwide by the end of this year.

J&J faces a spate of jury trials early next year over allegations that its executives knew since the early 1970s that talc contained trace amounts of asbestos, which can cause a cancer called mesothelioma, but failed to alert consumers or regulators. J&J contends that its talc-based products don’t cause cancer and it has marketed Baby Powder appropriately for more than 100 years.

The company faces more than 50,000 suits accusing it of concealing baby powder’s cancer risk to protect its iconic product. Most of those claims are from women with ovarian cancer. The majority of the cases are consolidated before a federal judge in New Jersey.

Inventory Settlements

J&J has reached agreements to do so-called inventory settlements with law firms such as Kazan, McClain Satterley & Greenwood, and Levy Konigsberg to resolve all their mesothelioma cases, the people said. The company has come to similar terms with the Motley Rice firm, the people added.

Joe Satterley, a Kazan lawyer who has won and settled multiple talc cases against J&J, declined to comment on whether he’s settled his inventory of mesothelioma cases. Joe Rice, Motley Rice’s co-founder, also declined to comment. Moshe Maimon, a Levy Konigsberg lawyer who has won talc cases at trial, didn’t immediately respond late Monday to phone and email messages seeking comment.

The settlements resolved a case that was already on trial in state court in Oakland, California, in November and will head off trials that were supposed to start in January and March in state court in New Jersey, the people said. J&J still faces a mesothelioma case in state court in Minnesota later this month, the people added.

Besides getting trials off the calendar, J&J is trying to clear the way for a third bankruptcy filing to resolve the talc litigation in its entirety. Erik Haas, J&J’s lawyer overseeing the talc litigation, said in an October earnings call that the company was “pursuing a consensual resolution of the talc claims through another bankruptcy.”

The consolidated case is In Re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, 16-md-2738, U.S. District Court for the District of New Jersey (Trenton).


©2023 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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Mom of transgender student says family has received outpouring of support, but lost their privacy

“There is a long history in this country of outing people against their will — forced outing, particularly of a child, is a direct attempt to endanger the person being outed”

Scott Travis, South Florida Sun-Sentinel on Dec 4, 2023


FORT LAUDERDALE, Fla. — The mother of the transgender student at the center of a controversy involving Monarch High’s girls volleyball team has issued a statement saying the family had both received support and suffered a loss of privacy in the past week.

The mom, Jessica Norton, is also one of five employees who has been reassigned from Monarch High during an investigation. The school district is investigating whether school officials allowed Norton’s daughter to violate a 2021 state law that bans students who are born male from playing on girls’ teams.


Norton is an information management specialist at the school who also has served as a volleyball coach.

The reassignments or suspensions of the five employees, which also included Principal James Cecil, prompted two days of student walkouts last week.

Many of the students voiced support for Norton’s daughter, chanting messages such as “Let her serve.”

“The outpouring of love and support from our community this past week has been inspiring, selfless and brave,” Norton said in a statement released from the Human Rights Campaign, an LGBTQ rights group that has defended the family in a legal battle. “Watching our community’s resistance and display of love has been so joyous for our family — the light leading us through this darkness. I want everyone to know that we see you, and we are so grateful for you.”

Norton added, “A lot of things were taken from my family this week — our privacy, sense of safety, and right to self-determination.

“There is a long history in this country of outing people against their will — forced outing, particularly of a child, is a direct attempt to endanger the person being outed,” she said. “We kindly ask everyone to respect our family’s privacy, and to give our family the space we need to speak to our experience on our own terms and timeline.”

The family has been fighting a legal battle for more than two years. The family sued the state in hopes of overturning the 2021 law, known as the “Fairness in Women’s Sports Act.” The lawsuit doesn’t name the student or her school and identifies her parents by their first names. A judge ruled in favor of the state last month but has allowed the student to file an amended complaint.

_____


©2023 South Florida Sun-Sentinel. Visit sun-sentinel.com. Distributed by Tribune Content Agency, LLC.

Panama Canal jam sends ships sailing continents out of the way

Ruth Liao, 

Bloomberg News

 Dec 4, 2023

The Panama Canal, the century-old engineering marvel that revolutionized global trade, is being squeezed shut by drought and forcing shippers worldwide to face a painful choice.

They can wait in line for days or weeks, as low water levels limit the number of ships passing through the 50-mile waterway, carrying cars, consumer goods, fruit and fuel. They can pay millions of dollars to jump ahead in the queue, if a ship with a booked reservation drops out. Or they can sail an entire continent out of the way, sending their ships around the southern tips of Africa and South America, or through the busy Suez Canal.


Each choice adds cost, at a time when governments around the world are struggling to tame inflation. And the bottleneck will only worsen in the coming months as Panama enters its annual dry season, which typically begins in December and lasts until April or May.

“We face less capacity, more trips, higher costs and a less efficient supply chain,” said Paul Snell, chief executive officer of British American Shipping, whose company moves about 20,000 to 40,000 containers per year. “Everyone’s going to have to get creative and decide what they’re going to do.”

Gatun Lake, which forms a key stretch of the canal system and provides fresh water for its locks, saw little rain this year, as El Niño triggered a withering drought. So the Panama Canal Authority has ratcheted back the number of ships allowed to pass, from an average of 36 to 38 per day in the past to an expected 18 in February, half the normal amount. The authority also reduced draft levels — how low a vessel can sit in the water — meaning some ships must carry less cargo. Even if the rains return on time next year, traffic congestion and draft restrictions will linger long into 2024.

Many companies, particularly those moving fuels from the U.S. Gulf Coast to Asia, have been willing to pay extra to ensure their ships get through. The authority holds auctions whenever a ship with a reservation cancels, and slots this year have gone for as much as $4 million. A year ago, the average auction price was around $173,000, according to data from Waypoint Port Services. “It’s just astronomically out of control,” said Francisco Torné, one of the firm’s country managers for Panama.

Money for an auctioned slot comes on top of the canal’s usual transit fee, which depending on the vessel’s size can be close to $1 million. Companies spent $230 million on auctions this year through Nov. 20.

Other shippers opt for detours that can add thousands of miles and more than a week at sea — sometimes through perilous waters. The Pyxis Pioneer, carrying liquefied petroleum gas, in November steered through the wind-whipped Strait of Magellan near South America’s southernmost point, followed by a Chilean load of gasoline products headed to New York and an oil tanker from southern Mexico bound for the U.S. Gulf. Ships from the Gulf Coast or eastern U.S. that may have sailed to Asia via the canal now head in the opposite direction, rerouting around South Africa’s Cape of Good Hope or through Egypt’s Suez Canal.


Each route adds 10 days to three weeks to the trip, depending on how fast the vessel sails. According to Avance Gas Holding Ltd., about 50 very large gas carriers are now on return voyages to the U.S. via the Suez Canal or the Cape of Good Hope, up from 10 vessels in July.

“I sleep better at night knowing that I am going around the cape or Suez and not waiting in line, especially when it starts to be really desperate and you pay $4 million,” said James Allen, vice president of liquefied natural gas chartering and operations at Cheniere Energy Inc., speaking at the Wood Mackenzie gas and LNG conference in London

Shipping companies are trying to pass along the extra costs to their customers. Hapag-Lloyd AG, Mediterranean Shipping Co. and Maersk all have announced new Panama-related surcharges in recent months. Economist Inga Fechner of ING Research said the effect on commodity and consumer prices has been muted by sluggish global demand. But the higher shipping costs will have a trickle-down effect in the long run, ultimately hitting consumers.

“It’s getting more costly, and looking for alternative routes will increase costs and maybe also weigh on prices in the end,” she said.

Oil and gas vessels, container ships hauling all manner of cargo, and grain carriers dominate traffic through the canal. The U.S. is a major exporter of grains — soybeans, corn, wheat — to Asia, much of it typically leaving the Gulf Coast and traveling through Panama. But low water levels on the Mississippi River have already prompted some American growers to put their grain on trains to the Pacific Northwest and ship it to Asia from there. Enrico Paglia, research manager at shipping services firm Banchero Costa, said overall U.S. grain exports to Asia have fallen 26% this year compared to 2022, and grain flows through the canal have decreased 37% percent.

Should the canal bottleneck worsen, it’s likely other major grain exporters such as Brazil, Ukraine and Russia may step in to fill the gap for U.S. products in Asia, Paglia said. Already, Brazilian grains have been more actively traded because of the canal's increased restrictions, he said. “So, potentially, U.S. grain exporters will be hit hardest by the disruption to trade flows," Paglia said.


Snell of British American said the clogged canal forced his company to stop shipping fresh-cut ferns from Seattle to Rotterdam’s flower markets. The business found work-arounds for other products from the U.S. West Coast, hauling nuts and dried fruit from California to Houston or Norfolk, Virginia by rail, then transferring them to container ships bound for Europe. But added transit time is an issue for fresh fruit, particularly from countries such as Chile and Peru that ship to the eastern U.S. and Europe through the canal. Cherry season in Chile will start to peak in January, and grapes, plums, nectarines and blueberries all could have a hard time reaching market, said Ignacio Caballero, director of marketing for Frutas de Chile, a trade group representing Chilean fruit growers.

“Considering we are going to reach our peak of season at the peak of the problem in the canal, this affects us importantly,” he said.

Nikolay Pargov, chief revenue officer for container shipping platform Transporeon, said container ship operators are already booking alternative routes to avoid the canal for 2024. The rigid routes of container ships – which for some shipping companies have thousands of customers to consider for each vessel – make it more difficult to re-route them at the last minute.

“For shippers, they need to accept the longer transit times, and the financing of it,” he said.

(With assistance from Kyle Kim, Anna Shiryaevskaya, Elizabeth Low and Brendan Murray.)


©2023 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

NASA and Boeing chase jet contrails with

 science of climate impact in doubt

AKA CHEMTRAILS

Dominic Gates, The Seattle Times on Dec 3, 2023

Scientific debate is getting heated over what to do about airplane contrails — the wispy lines of water vapor you often see trailing behind a jet.

Those harmless-looking vapor trails sometimes spread out to form thin cirrus clouds. Environmental activists and nonprofits focused on climate change routinely assert contrails contribute more to global warming than the carbon dioxide emitted from jet engines.

The aviation industry, under pressure to do something, has stepped up research into contrails.

In October, Boeing and NASA conducted flight tests out of Everett with a NASA DC-8 research plane flying behind a 737 MAX 10 to sniff its exhaust and analyze its contrails to test if so-called sustainable aviation fuel, or SAF, may reduce their incidence.

And Google, in a partnership with researchers at Breakthrough Energy — the Seattle-based climate action research group founded by Bill Gates — conducted a small experiment with American Airlines to test whether commercial pilots could avoid regions of the atmosphere likely to induce contrails. A larger trial with multiple air carriers, including Alaska Airlines, is planned for next year.

But last week, the consensus that contrails are so bad for the planet that we need to quickly find ways to reduce them was shattered.

David Lee, author in 2021 of the most influential study of the impact of aviation on the climate and chair of the U.N. Intergovernmental Panel on Climate Change's aviation working group, published a new and trenchant assessment of the myriad scientific uncertainties around the subject.

Co-authored by prominent U.K. climate researchers, the paper concludes that "the fundamental premise" that contrails are important enough to mitigate "is not yet established."

Beyond the uncertainty in the scale of the contrail warming effect, Lee points to a related cooling impact that could potentially cancel it out.

Lee argues that the data on aviation's non-CO2 impacts — chiefly the contrails and the effect of engine emissions on cloud formation — is so uncertain that any action to mitigate them "may be of limited effect or have unintended consequences."

He notes that rerouting planes to avoid airspace susceptible to inducing contrails means burning more fuel and emitting more CO2, which remains in the atmosphere for centuries while contrails dissipate in days.

Complex science and possible approaches

Contrails form when water vapor condenses around aerosols emitted by jet engines — particles and droplets, mainly soot and sulfur — to form ice crystals in the high altitude cold.

Most contrails dissipate quickly. Some spread out and persist as high, thin cirrus clouds.

These clouds can partially cool the planet during the day as they reflect sunlight away from Earth. However, the high, cold clouds also trap surface heat that would otherwise escape into space — a "greenhouse effect" parallel to that of CO2.

The overall impact of the contrail-induced clouds is warming, especially at night when there is no solar reflection.

The science is so complex that the scale of the contrail impact on the climate has always been very uncertain.

It varies not only according to the time of day or night but to the type of surface below. The scientific models of cloud formation remain highly imperfect.

Yet in recent years environmental activists have settled on data in Lee's 2021 assessment as proof that the warming effect of contrails is greater than that of the CO2 spewed from the engines.

Although the cited data comes with a colossal margin of error, that assertion has been repeated in the press and become the accepted basis for efforts to reduce contrails.

In an interview, Marc Shapiro, director of Breakthrough Energy's contrails project, cited the most recent IPCC assessment, which is based on Lee's 2021 paper: that contrails contribute between 1% and 2% of total human-caused climate change.

"That's staggering," Shapiro said. "Most people are astounded to hear that."

So Breakthrough, in collaboration with Google, is focused on finding ways for airplanes to avoid making contrails.

For this year's initial trial, Google used artificial intelligence to analyze satellite imagery, weather and flight data, and develop contrail forecast maps on 35 American Airlines routes.

Going one way, pilots flew over or under regions where the models indicated atmospheric conditions favored contrail formation. On the reverse leg, they flew straight through, ignoring the possibility of contrails.

The avoidance measures resulted in a 54% reduction in contrail-induced clouds, Shapiro said.

Next year, they plan "a much larger trial with multiple airlines," repeating the experiment on thousands of flights.

Shapiro acknowledged the fuzziness in the data about the impact of contrails but said the uncertainty "is overstated by the academic community."

It tends to lead to a conclusion that there's nothing to be done, he said, "and I really disagree with that."

Echoing that view, Matteo Mirolo, sustainable aviation manager for Transport & Environment, Europe's leading clean transportation advocacy group, said in an interview it's "important not to cross the line, where uncertainty is taken as an excuse for inaction."

Mirolo said operational changes to reduce contrails, like those Google and Breakthrough are promoting, should be an easy and cheap way to reduce aviation's contribution to global warming compared with reducing CO2 emissions.

In a phrase often used by climate activists on the subject, he called contrail prevention "low-hanging fruit" for the aviation industry.

But Lee, a professor of atmospheric science at Manchester Metropolitan University in England, pointedly dismissed that notion in an article posted on his university's website highlighting the new paper.

"There are no simple silver bullets or low-hanging fruit to solve the problem," Lee said.

Smaller impact

Political pressure to reduce contrails has grown strongest in Europe.

Beginning in 2025, European airlines will be required to monitor, report and verify the non-CO2 climate effects of their flights. By 2028, after an impact assessment, the European Commission has to make a proposal to address these effects — with contrails as the most salient.

This political push is premised on the belief that contrails are much worse for the earth's atmosphere even than greenhouse gases, and that belief arose from data in Lee's major 2021 assessment.

The analysis is cited by the IPCC, environmentalists, Boeing and NASA, and remains the definitive study of aviation's climate impact.

But interpretations vary, hence Lee's new effort to clarify its meaning.

The 2021 paper had offered "best estimates" from an analysis of multiple research studies that pegged contrails as by far the largest of aviation's non-carbon impacts, with just 34% of aviation's total warming effect contributed by carbon emissions and fully 57% by contrails.

However, that quantitative estimate for contrails is exceptionally mushy. It comes with an error margin of plus-or-minus 70%.

Drew Shindell, a professor of Earth Science at Duke University who assessed climate impacts for the IPCC, said the lack of rigor in the analysis of clouds and their formation creates the "enormous uncertainty" around the impact of contrails.

The latest IPCC estimate of the contribution of contrails and aviation-induced cirrus clouds to total global warming from all human activity is 0.7% to 3.7%.

Shindell said recent studies suggest it is "likely towards the low end of the [IPCC] range."

"The overall assessment is that it's probably in fact, very small," he said. "I don't personally think that it is something we have to worry about more than the CO2. I don't think the science supports that."

Even Shapiro of Breakthrough, whose research focus is on reducing contrails, said that "to be totally frank, our numbers are coming up on the low end of David Lee's [2021] estimates as well."

"There is kind of a growing consensus, the numbers in that paper are too high," he said, though quickly insisting that "it's not like coming out as insignificant."

Efforts to reduce contrails questioned

Lee's new assessment sharply critiques the misreading of his data.

The new paper states that the uncertain warming effect of contrails may be offset because the aircraft aerosols that trigger contrails also change how clouds form in complex ways that have an even less clear, but possibly larger, cooling effect.

Because of the uncertainty around how aerosols interact with clouds, with numerous studies showing wildly different results, the 2021 assessment hadn't even ventured an estimate for that.

Lee's new paper concludes that these competing factors taken together "could have a net positive or net negative" effect on global warming.

Lee specifically criticizes contrail avoidance solutions such as Breakthrough's.

In an email, Lee expressed concern about the "seemingly large (and in my view, ignorant) enthusiasm for navigational avoidance of contrails" because of the extra CO2 emitted.

The warming effect of that additional CO2 "lasts virtually forever," Lee wrote.

In addition, his paper says forecasting of atmospheric conditions is currently not sufficiently accurate to provide reliable contrail predictions.

His paper argues for more research and "careful analysis in order that perverse outcomes are avoided, and strategic investment decisions are based on a solid evidence base."

Breakthrough's Shapiro, responding to the Lee paper's rejection of contrail avoidance, counters that flying above or below contrail regions injects the same aerosols into the air, and so their likely cooling impact on cloud formation will be unaffected.

And Google's account of the American Airlines trial cites research suggesting that with sophisticated contrail avoidance "the total fuel impact could be as low as 0.3%."

"I believe this caution comes with a real climate opportunity cost," Shapiro wrote in an email.

Shapiro said that even if contrails end up being half a percent of total human climate impact rather than 2%, "that's still astounding."

"I'm not sure that changes my motivation or my approach to the problem," he said.

David Fahey, director of the National Oceanic and Atmospheric Administration's Chemical Sciences in Boulder, Colo., and a co-author with Lee of the influential 2021 paper, called the newly published assessment by Lee and his collaborators "stunning."

Fahey concurred that the uncertainties in the scientific models undermine the case for rushing to implement solutions.

He said climate activists pushing for immediate action on contrails are "painting a target in the sky and saying, 'That's the enemy.'"

Because there are so many unknowns, "we need to not do that," Fahey said, adding that Lee's new paper is "an antidote to the Kool-Aid drinking that's going on."

Boeing and NASA team up to study contrails

In the NASA/Boeing contrail study in October, pilots were not avoiding contrails but hunting them to gather data.

NASA research pilot Andy Barry flew the four-engine DC-8 research plane loaded with emissions sensors and cameras behind the Boeing MAX 10, which was painted in the colors of its eventual owner, United Airlines.

For three weeks, they took off on 5-to-6-hour flights seeking the right atmospheric conditions for contrails.

On the MAX, instruments drew in outside air and analyzed it.

In the much larger, heavier NASA chase plane, more instruments drew in the air from the MAX engines' exhaust — whether contrails were visible or not — and analyzed its composition.

Since a big part of the study was to examine how fuel might reduce contrails, the MAX was fitted with partitioned fuel tanks. The wings held a low-sulfur version of regular kerosene-based jet fuel. The center tank held 100% sustainable aviation fuel produced from biomass, oils and waste. Both fuels burn cleaner than regular jet fuel, producing less soot and aerosols.

With eight to 10 engineers in the back monitoring the instruments, the pilots flew one flight segment burning one type of fuel, then turned back and repeated the maneuver in the same air space burning the second fuel.

For Barry, it was tricky and demanding flying.

Communicating via radio with the Boeing jet, the NASA pilots aimed for a target air space about 200 feet wide and high, some 4 to 5 miles behind the Boeing jet.

They had to avoid the wake coming off the Boeing jet's wingtips that generated whirling vortices of doughnut trails behind it. And on days when there were strong crosswinds, they had to adjust laterally to find the exhaust stream.

"It's a small piece of sky to be in a moving environment," said Barry, interviewed in the DC-8 cockpit. "It's a highly turbulent environment, and that's why everyone's strapped in with five-point harnesses."

"We're doing this for 400-mile legs, and hand-flying all of this. Let's just say it's fatiguing," he said. "No autopilot is going to put you in this sweet spot to sample the data."

The complexity and uncertainty around contrail formation was illustrated on days when the pilots would spot an airplane in a neighboring pocket of air with a 20-mile contrail.

Barry said he'd think "it's gonna be easy today" to find contrails — "then we start getting on condition and there's nothing or it's a half-mile contrail."

Lee's new paper, while it warns contrail avoidance may increase carbon emissions, states that reducing contrails by burning SAF that also reduces carbon "could potentially be a 'win — win.'"

The results from the October flight tests will be published next year.

Aside from the work on contrails, the outcome should confirm a separate, substantial public health benefit from SAF. The lower aerosol emissions from the fuel will reduce pollution around airports all over the globe.

Dilemma for aviation

The aviation industry's goal of reducing carbon emissions to "net zero" by 2050 is fraught with major costs and heavy uncertainty.

Developing new aircraft technologies while vastly scaling up production of SAF is both immensely expensive and perhaps unattainable.

In contrast, reducing contrails, while not easy, seems enticingly possible.

Lee asserts that reducing carbon emissions should remain the priority.

Via email, he summed up aviation's dilemma and urged caution.

"As environmental scientists, we operate routinely with uncertainty," Lee wrote. "However, what is far more difficult to deal with is the uncertainty of being completely 'wrong' and doing permanent damage to climate in the process."

(c)2023 The Seattle Times Distributed by Tribune Content Agency, LLC. ©2023 The Seattle Times. Visit seattletimes.com. Distributed by Tribune Content Agency, LLC.