MINING

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RETREADS FOR THE MINES
(Source: Paydirt 4/07)

To get a mine into operation today, a company gets permission from appropriate environmental agencies, a letter of credit from the bankers — and a nod from the tire guy down the street.

While that may sound a bit facetious, it's not all that far from the truth.

Fortunately, a major tire dealer and recapper is helping to loosen up what is arguably the most serious bottleneck in mining today, but tires for big trucks are in such tight supply that even this effort— despite how badly it is needed — is proving to be difficult.

Purcell Tire Co. said its Purcell Mine Group has launched an expanded retreading operation for large haulage tires with wheel diameters of 51 inches and larger.

The Potosi, Mo.-based firm invested more than $5.5 million in molds and curing line to become the only tire-retreading company in the world to offer segmented-mold retread systems designed to produce both 4000R57 and 46/90R57 haulage tires, as well as 52/80x57 through 55/80R57 tires.

Purcell Tire said that although major manufacturers, which include Michelin, Goodyear and Bridgestone, are continuing to increase capacity for these tires, the shortage is expected to continue through 2012.

"All of them are adding production," said Al Chicago, Purcell Tire president, "but if mineral prices stay where they are, there won't be enough tires."

Chicago said he knew of instances where mines that were justified by demand and economics could not be built because the operator could not get a contract for tires. That, in turn, helps keep mineral prices higher.

But just having a retreading facility isn't enough. Purcell Tire has to come up with carcasses that have enough rubber left on them to go through the process.

All major firms interested

"Every giant mining company has visited our plant and wants to get in line" for the retreads, Chicago said. With a single mold, the plant can turn out three of the large tires every two days. Another mold is expected to be in operation soon.

But the company has to forfeit about 20 percent of a tire's rubber, and thus 20 percent of its life, so that the retreader can form a bond for the new cap. "What they have to do is give up part of the tread to save the casing," Chicago said.

The problem with this is that mines don't have spares. Even with the best tire-preservation strategies in place, most mines have just enough tires to get the job done. And that's taking in the best scenario. "Right now there are mine trucks around the world that are setting on blocks because they can't get tires."

To try to find sets of usable carcasses so that it can begin the process of trading out tires, Purcell Tire and its partners are scouring the world. "We've been all over the world buying casings," he said.

And the company has found that what was once waste that could be hauled off at minimum cost has now become a precious commodity. Almost-used-up casings now go for as much as $10,000 and still have to be shipped to Missouri from as far away as Russia or Chile.

The typical 57-inch tire for a behemoth truck might sell for $28,000 under contract, while a retread would sell for about 60 percent of the price of a new tire.
But that dynamic has changed, though Chicago pointed out that Purcell Tire charges only its normal-market cost to retreading the tires, because it's interested in serving its customers on a long-term basis.

The tire manufacturers that Purcell Tire represents, Michelin and Goodyear, are behind the retreading operation and are helping the company find carcasses. So is Caterpillar, which uses the Purcell retreads on some of the new equipment it sends to mines. Typically Cat sells its equipment "barefooted," but in some cases, it's expected to provide the service of finding tires.

All mines good for retreads?

Different mines have different tire needs.

In general, however, retreads will work as well as the new tires which Purcell Tire offers. "If a new tire is running well at a property, a retread will run well," Chicago said. If the tire runs about 12,000 to 14,000 hours, it can be retreaded. In less strenuous environments, where a tire runs considerably longer, it may not be as good a candidate, since the casing may be more fatigued, he said.

Generally, a carcass can be recapped two or three times, depending on the casing's durability.

Mines today are doing everything they can to increase tire life. Suppliers are helping. At a recent seminar for operators in Tucson, for example, Cat had extensive sessions on techniques for improving mine haulage roads and in turn improving tire life.

In some cases, where the terrain is not too bad, Purcell Tire has been able to connect the mine owner with Chinese tire manufacturers to fill in the demand.

A lot of these tires are running in Mexico for example, Chicago said. "A mine may have a choice — block their trucks up or buy a Chinese tire."

Tire-manufacturing capacity

Not a lot of large tires are made each year. The 57-inch tire, which is aimed the 240-ton haulage trucks as well as some large front-end loaders, is made in quantties of only a few thousand a year.

The same is true for the 63-inch tire for trucks carrying 300 tons or more.

Typically a truck will go through about two sets of tires a year: Firms without contracts may have to pay as much $80,000 for a tire on the black market.

It isn't easy for a manufacturer to boost its output, since not only does it have to have a mold, but curing capacity as well. It's not easy to give up a spot in curing, since demand for other tires also has increased.

So by adding 500-600 tires a year what is available for the mines, Purcell Tire hopes it can made a significant difference in the industry's ability to do its job. Another mold coming on line in a year or so would enhance that even more.

"If a mine can get some casings and start feeding in some retreads, they can increase their capacity," Chicago said.

For more information, visit the webs at www.purcelltire.com.

ENERGY

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BUSH'S HALF-MEASURE: HIS GLOBAL-WARMING PLAN TOO LITTLE, TOO LATE (Source: Tribune Editorial, Salt Lake Tribune, 6/4/07) George W. Bush may, finally, be getting serious about global warming. Or, with just a year and a half remaining in his second term, the president may be trying to fend off withering criticism at home and abroad by talking the talk, with no real intention of purposefully walking the walk. With his long and sorry record of denial and obfuscation regarding human-caused climate change, and international efforts to combat it, there is no way to judge the sincerity of Bush's call Thursday for global cooperation to reduce greenhouse-gas emissions. Significantly, Bush's policy reversal came just days before he was to attend this week's annual meeting of the Group of Eight leading nations, where climate change tops the agenda. The immediate significance of Bush's proposal is this: The United States - the world's top emitter of greenhouse gases - no longer is the only major power disputing the efficacy of international cooperation to reduce global warming

"The United States takes this issue seriously," Bush said. He proposed a series of meetings this fall between the top 10 to 15 polluting nations, including rapidly developing China and India, that would lead by 2009 to an agreement in which each country would set its own, non-binding targets for reducing emissions over the next 10 to 20 years. They also would work toward a longer-term plan.

The huge missing pieces in the Bush initiative are mandatory goals for greenhouse-gas reductions and a protocol for international enforcement, as in the 1997 Kyoto accord aimed at slashing emissions by 5 percent below 1990 levels in 2012 . Bush envisions voluntary goals, but gave no indication what the U.S. reduction target might be or how it might be achieved.

It is doubtful that German Prime Minister Angela Merkel, who is hosting the G8 assembly, will see Bush's johnny-come-lately proposal as anything more than an effort to neutralize more aggressive plans. The White House already has rejected a German plan, backed by Britain and Japan, that would require a 50 percent reduction in global greenhouse-gas emissions by 2050.

The challenges posed by global warming are too dire for the U.S. to be proposing vague and voluntary half-measures. The international community, and a majority of Bush's constituents, increasingly and rightly are demanding more aggressive measures. And it appears that Bush will keep resisting them until he leaves office.

 

BUSH PROPOSES TALKS ON WARMING
(Source: Michael A. Fletcher and Juliet Eilperin. Washington Post Staff Writers, 5/31/07)

President Bush sought to take the initiative on global warming talks in which the administration had previously been a reluctant participant, offering to launch negotiations aimed at having the world's most prolific polluters agree on long-term goals for reducing greenhouse gas emissions.

The proposal, which Bush unveiled in a speech outlining his priorities for the Group of Eight summit in Germany next week, signaled a shift in the administration's often-criticized approach to combating global warming while offering what the president called a "new framework" for addressing the issue.
Though the president is still not backing a mandatory cap on carbon dioxide emissions, he made it clear that he would like the United States to play a major role in shaping global environmental policy after the Kyoto Protocol expires in 2012.

"In recent years, science has deepened our understanding of climate change and opened new possibilities for confronting it," Bush said. "The United States takes this issue seriously. The new initiative I am outlining today will contribute to the important dialogue that will take place in Germany next week."

The White House said Bush's proposal has drawn positive reactions from several European leaders, including German Chancellor Angela Merkel, who has called for more prescriptive measures for limiting global warming. Still, environmentalists and their supporters in Congress criticized Bush's proposal as a weak substitute for cutting greenhouse gas emissions through binding rules.

Bush's speech came as several members of the Group of Eight have been pressing -- despite U.S. opposition -- for specific cuts in greenhouse gases as part of the June 6-8 summit in Heiligendamm, Germany. The German proposal calls for limiting the worldwide temperature rise this century to 3.6 degrees Fahrenheit and cutting global greenhouse gas emissions to 50 percent below 1990 levels by 2050, both of which the administration rejects as impractical.

By contrast, Bush is calling for a new set of talks aimed at bringing together a broad array of nations -- including China, India, Brazil and members of the European Union -- to negotiate goals for cutting greenhouse gas emissions after 2012. This new discussion, which would run parallel to the U.N. framework that produced the Kyoto Protocol, could include specific reduction objectives as well as voluntary measures.

Bush refused to ratify the Kyoto Protocol, which required industrialized nations to bring greenhouse gas emissions below 1990 levels by 2012, calling the plan -- which excluded many fast-growing countries such as India and China -- unworkable.

Instead of specifying binding targets, the Bush proposal will call on the 15 nations responsible for 80 percent of the world's greenhouse gas emissions to set what his top environmental adviser calls "aspirational goals" for cutting emissions. Individual countries could meet those targets through a broad portfolio of actions, including increasing vehicle fuel-efficiency standards and the deployment of cleaner energy-generating technology.

"Each country will develop its own national strategies on a midterm basis in the next 10 to 20 years on where they want to take their efforts to improve energy security, reduce air pollution and also reduce greenhouse gases," said James L. Connaughton, chairman of the White House Council on Environmental Quality.

Bush's announcement is the latest in a series of moves he made this week in hopes of blunting criticism of his administration by the G-8 nations as he prepares to leave for the summit in Germany. Earlier this week, he announced new economic sanctions against Sudan in response to the crisis in Darfur.

He also called on Congress to double the U.S. funding commitment in the battle against the global AIDS crisis and nominated Robert B. Zoellick, a longtime diplomat and well-respected internationalist, to head the World Bank. Zoellick would take over from Paul D. Wolfowitz, who proved to be a polarizing figure during his two years as head of the bank. In his speech yesterday, Bush also urged modest increases in funding for a program that provides education to the world's poorest children and for a program aimed at strengthening capital markets in Africa.

While some European leaders appeared impressed with Bush's proposal, it came under heavy fire from key members of Congress. "It is vitally important for America and this president to reengage internationally on this issue and agree to targets for reducing heat-trapping pollution," said Rep. Edward J. Markey (D-Mass.), chairman of the House committee on global warming. "Instead, all President Bush is willing to do is engage in fruitless discussions until the very end of his administration."

Virtually without exception, environmentalists questioned why Bush has devised a plan that lacks mandatory cuts in greenhouse gas emissions.

"The president is not offering commitments, and he's not asking for commitments, and without them we won't get the job done," said Elliot Diringer, director of international strategies for the Pew Center on Global Climate Change. "The administration has done all it can to squelch discussion of future climate commitments. This could keep them off the table until the end of this administration."

Stephen L. Johnson, administrator of the Environmental Protection Agency, said in an interview that what the president announced is a "a global strategy" aimed at bringing in fast-growing countries that have not had to make the same emissions cuts as other nations. He noted that the EPA has calculated that by 2015 developing countries will outpace developed nations in greenhouse gas emissions.

"This is the right time and the right place to do it," Johnson said. "There is greater certainty, and it's that certainty that's why the president is concerned, and why we're all concerned, about global warming."

AIR QUALITY PANEL BACKS DOCTORS' POLLUTION STUDY PRESCRIPTION
(Source: Judy Fahys, Salt Lake Tribune, 6/7/07)

Air pollution kills 1,000 Utahns prematurely every year and costs as much as $4 billion a year in health care expenses.

Facts like these have been a driving force behind a campaign by Salt Lake City physician Brian Moench's group to update Utah's air-quality laws - laws that will get a new, in-depth scientific review in coming months, thanks to a decision Wednesday by the state Air Quality Board.

The panel voted unanimously to support the Utah Physicians for a Healthy Environment's request to make sure state air-quality laws are as tough as the science suggests they should be. The work will begin with appointment of a panel of health and science experts who can review current research on the health damage caused by air pollution, which will advise the state about the adequacy of those laws.

"We're confident in what the process will show," said Moench, who said he was pleased that the air board has taken the group's concerns seriously.

"It's hopeful," said Cherise Udell, founder of Utah Moms for Clean Air, a spin-off advocacy group.

While the idea of studying the effectiveness of pollution regulations may seem dull, the fact that the review is taking place in Utah might be called radical. State law says that air regulators are not permitted to make laws "more stringent than the corresponding federal regulations which address the same circumstances."

The health-based review requested by the physicians is allowed under one condition that is also in the law: "that corresponding federal regulations are not adequate to protect public health and the environment of the state."

The air-quality board has set an aggressive timetable of eight months to conduct the review, but Air Quality Director Rick Sprott pointed out that the schedule might be too ambitious for the all-volunteer expert panel, given that similar reviews on a national level have taken years.

It's likely, he added, that the group will take on one pollutant at a time, probably beginning with PM 2.5 - microscopic panels of soot known to cause health damage and to be unusually high in Utah during winter inversions. Another to be addressed will likely be mercury - an element that can cause neurological damage and that has been detected in wildlife statewide.

Sprott, who will become director of the Utah Department of Environmental Quality after a Senate confirmation vote later this month, noted that Gov. Jon Huntsman Jr. has made improving Utah's air quality a priority. "He's very anxious to get the problem solved," Sprott said.

Moench said his group doesn't want the panel's work to be dragged out. He also said his group will offer suggestions about science-panel members. "We want to ensure the panel is, in fact, independent."

The doctors group formed this winter after a harsh three-week inversion in Salt Lake City. The mothers group formed soon after.

G-8 LEADERS GET SERIOUS ON CLIMATE
(Source: Claudia Kemmer, Associated Press, 6/8/07)

HEILIGENDAMM, Germany - Group of Eight leaders including President Bush agreed to call for substantial global emissions reductions to fight global warming and cited a goal of a 50 percent cut by 2050.

European leaders hailed the deal as progress in the wrangling between Europe and the United States over global warming, with the Europeans pushing mandatory cuts and the U.S. resisting.

German Chancellor Angela Merkel, who shepherded the deal as chair of the G-8 summit in this seaside resort in northern Germany, called it ''very great progress and an excellent result.'' With Bush resisting concrete cuts, it had appeared Merkel's summit would fall short of her goal of a substantial deal on climate change.

''We agree that we need reduction goals and obligatory reduction goals,'' she said.

But the language of the declaration appeared to be well short of a full commitment. It called for the countries to ''seriously consider'' following the European Union, Japan and Canada in seeking to halve emissions by 2050.

Merkel, who has made climate change the centerpiece of Germany's G-8 leadership, had lobbied fellow leaders on the issue for months. The G-8 is Germany, the United States, Russia, Britain, Italy, France, Canada and Japan.

''No one can escape this political declaration; it is an enormous step forward,'' she told reporters.

British Prime Minister Tony Blair was asked if there was ''wiggle room.'' He said the final result would depend on upcoming U.N. climate change negotiations.

''However, there is now a process to lead to that agreement, and at its heart is a commitment to a substantial cut,'' he said. ''What does substantial mean? That serious consideration is given to the halving of emissions by 2050.''

Blair called the deal ''a major, major step forward.''

But Annie Petsonk, a lawyer for the advocacy group Environmental Defense, said the summit hadn't agreed on a 50 percent cut - only on a call for all major emitters to seriously consider that option.

''Importantly, they have agreed to negotiate a new agreement under the U.N. Framework Convention - bound by the obligation to avert dangerous climate change,'' she said. ''But it may be that the president is simply kicking the can down the road to the next administration to get the job done.''

Petsonk said the key to getting an agreement in these new talks will be for the United States to impose a mandatory national cap on its own greenhouse gas emissions, without which other nations would be reluctant to join along. ''All eyes are on Congress now. If America wants to lead, it's clear that Congress will have to do it,'' she said.

On the first full day of the summit, Bush waxed nostalgic about this last summit with friend and Iraq war ally Blair, who leaves office June 27.

''I'm sad about that,'' Bush said.

On climate change, Bush's national security adviser, Stephen Hadley, said the ideas in the G-8 declaration were in the proposal the president issued last week. Bush called for having the top 15 polluters meet to set a long-term goal for reducing harmful emissions, and decide for themselves how much to do toward meeting it.

''The president made clear last week that he accepted the principle of a long-term goal,'' Hadley said during a telephone briefing with reporters. ''I think it's very consistent with some ideas that the president had last week, but it was also consistent with ideas that have been advanced by others.''

The document endorses the U.N. framework for climate change talks, a key demand from Merkel. But it did not commit to Merkel's target under which global temperatures would be allowed to increase by no more than 2 degrees Celsius (3.6 degrees Fahrenheit) before being brought back down. Experts say the 50 percent emissions reduction is needed to meet that goal.

Bush has opposed mandatory cuts and maintains that developing nations such as China, India and Brazil must be included. He also says economic growth cannot be sacrificed for progress on climate change, and stresses cleaner technology and biofuels as ways to reduce dependence on fossil fuels.

Climate talks will begin within the U.N. framework with a meeting of environment ministers at a U.N. climate change conference in Bali, Indonesia, in December.

The conference will seek to come up with a successor to the 1997 Kyoto Protocol, which commits industrial countries to cut emissions by 5 percent below 1990 levels. The U.S. signed the treaty but did not ratify it because it did not apply to developing countries such as China and India.

The top U.N. climate official said the agreement was ''very important progress'' because it committed the countries to come up with a successor to the Kyoto Protocol by 2009.

''The important thing is to get the negotiations going, rather than to decide what the outcome is going to be,'' said Yvo de Boer, executive secretary of the U.N. Framework Convention on Climate Change.

''I know Chancellor Merkel is declaring victory, but in fact President Bush has shut the door in the faces of the other seven leaders at the table,'' said Philip Clapp, president of the U.S.-based National Environmental Trust, pointing to the ''seriously consider'' phrase.

''That is a far cry from the United States having signed up to any such reductions,'' he said.

 

GUVS SEE MONEY IN SAVING PLANET
(Source: Glen Warchol, Salt Lake Tribune, 6/12/07)

DEADWOOD, S.D. - While many Americans see global warming and the country's dependence on oil as impending disasters, there are those who view finding solutions to these complex problems a colossal money-making opportunity.

"When there's a big unsolved problem or a huge market opportunity that advanced technology can solve, the venture capital industry has been there," venture capitalist Ray Lane told the conference of the Western Governors' Association. "The world's climate is changing and so is the energy business in the Western states. This is a serious challenge to civilization and a staggering business opportunity for the West."

The governors gathered for three days to discuss the West's energy resources and the nation's needs, and Lane told them one thing they already know: "Political pressure from the American public for action is rising rapidly . . . political will is solidifying."

A parade of experts briefed the Governors' Association, composed of leaders from 19 states plus representatives from western Canadian provinces and American Pacific territories, on clean energy solutions from wind, crops, solar energy and the region's enormous reserves of coal.

The group kicked off the conference by formally calling on the federal government to pump billions into energy research with a focus on coal. The West, as one speaker said, is the "Saudi Arabia of coal."

Utah's Gov. Jon Huntsman Jr. said the nation's energy needs and the economic development opportunities are the "yin and yang" of the same issue. "Entrepreneurial business opportunities will be created through this," Huntsman said. "I can't think of another time in recent history that we have stood at the doorstep of such opportunity."

Lane, a partner in the venture capital firm Kleiner Perkins Caufield and Byers, said the opportunities for venture capitalists in the West will dwarf those of Silicon Valley during the rise of the computer and the Internet, with one big difference: Government, at all levels, will have to be a full partner.

"Without policy changes and incentives, we will take too long to bring these technologies to commercial scale," Lane warned.

"The energy crisis is exerting the pressure to move forward on technology," said South Dakota Gov. Mike Rounds, outgoing WGA president. "But the opportunities are there for states within the growth of those industries."

John O'Donnell, president of the solar energy innovator Ausra Inc., told the governors that government, including the states, will have to join in the risks by guaranteeing loans to energy start-ups, if not by lending money outright. In return, pioneering states will see high-tech energy industries bloom within their borders.

But the venture capitalists and the entrepreneurs seemed to part ways from the governors on research emphasis. The states want to focus on development of technology to use coal reserves, whether it be by converting them to cleaner-burning gas or by pumping coal-burning plants' carbon emissions underground or by some other, yet to be discovered, method.

Lane called for thinking beyond the "conventional wisdom" of using coal.

"Instead of high-cost, high-risk approaches [of coal technology], we need a source of zero-carbon electric power that won't destroy the economy while saving the planet.

"Western wind, solar, geothermal and biomass resources are the solution," he said.

"The Western states and western Canada have an economic opportunity unparalleled in history to power the world in the 21st Century."

GLOBAL WARMING FUTURE: DROUGHT, WILDFIRE, FLOODS AND PESTILENCE
(Source: Glen Warchol, Salt Lake Tribune, 6/13/07)

DEADWOOD, S.D. - Top climate scientists offered Western governors an assessment on the impacts of global warming that sounded like something out of the Old Testament: drought, wildfire, floods and pestilence.

More importantly, the governors themselves put to rest any remaining doubt on a human role in the problem.

"Are there any respected scientific organizations left that dispute what you are saying?" asked Utah Gov. Jon Huntsman Jr., adding, "and you can't say the White House and Congress."

"Where there is skepticism, it is coming from an increasingly small number of individuals who have some kind of ax to grind," of a moral or religious point of view, said Christopher Field, director of global ecology at the Carnegie Institution of Washington. "There is not a reputable organization in the world that opposes the core conclusions."

The scientist's briefing only reinforced what the Western Governors' Association that represents 19 Western U.S. states had been hearing during the three-day conference. Greenhouse gases spewed by automobiles and coal- and gas-fired power plants are increasing the Earth's temperature. Global warming of even a few degrees causes flooding in coastal cities, deadly urban heat waves, longer and more severe droughts, and possibly the onslaught of tropical diseases, such as malaria.

The governors must grapple with how the policies of their individual states can impact a global problem with solutions that will take 10 to 50 years to put in place, the scientists said.

"In 2007, we have to design an energy system for 2050 to 2100," said Field. "That will require incentives and leadership."

Wyoming's Gov. Dave Freudenthal asked, for instance, if nearly sacrosanct Western water laws would be a barrier to adapting to global warming.

"Most of the water systems are already over-allocated. Somehow there have to be shifts," Field said. "A lot of current water law makes it difficult to make those changes."

Freudenthal, incoming chairman of the Western Governors' Association, vented some of the frustration his colleagues share in making policy to meet the almost-apocalyptic predictions.

"You're asking us to base policy on your data. How damn sure are you of this data?"

The scientists acknowledged that while the science is good, more data needs to be gathered and analyzed for detailed local projections.

"If we were really sure, we wouldn't bother to monitor," said Peter Kareiva, The Nature Conservancy's chief scientist.

"We are not going to reduce the growth of need in energy and we need to understand the economics of it," Freudenthal said later. "It is important we move aggressively on this. But whenever we would push [energy experts about] how much will it cost and how soon it can be done, the discussion became less precise."

Freudenthal and incoming vice chairman Huntsman pledged to keep the group focused on high energy costs and climate change.

"It is clear that this is certainly the issue of our time and it makes no sense for us to ignore what is the 900-pound gorilla of policy decisions," said Freudenthal. "We are looking for the silver lining in a black cloud."

 

NORTHERN REGIONS COULD SEE A SILVER LINING IN CLIMATE CHANGE
(Source Michael Hill, The Associated Press, 6/15/07)

It's not in Al Gore's PowerPoint presentation, but there are some upsides to global warming.

Northern homes could save on heating fuel. Rust Belt cities might stop losing snowbirds to the South. Canadian farmers could harvest bumper crops. Greenland may become awash in cod and oil riches. Shippers could count on an Arctic shortcut between the Atlantic and Pacific. Forests may expand. Mongolia could see a go-go economy.

This is all speculative, even a little facetious, and any gains are not likely to make up for predicted frightening upheavals elsewhere. But still ... might there be a silver lining for the frigid regions of Canada and Russia?

"It's not that there won't be bad things happening in those countries. There will be _ things like you'll lose polar bears," said economic professor Robert O. Mendelsohn of the Yale School of Forestry & Environmental Studies. "But the idea is that they will get such large gains, especially in agriculture, that they will be bigger than the losses."

Mendelsohn looked at how gross domestic product around the world would be affected under different warming scenarios though 2100. Canada and Russia tend to come out as gainers, as does much of northern Europe and Mongolia.

This is largely because of projected gains in agricultural production in those areas. Many researchers believe that if the world warms up, the sweet spots for growing crops will migrate toward the poles. Some people claim the phenomenon is already manifesting itself in bountiful forsythia blooms in Vermont and maple sap flowing in upstate New York in January.

"I've been betting on it for years," said Chris Loken, a Hudson Valley apple grower who years ago diversified his LoveApple Farm with an eye toward warmer weather.

Amid acres of apple trees lined up along bucolic hills in Ghent, N.Y., Loken planted stands of peach, apricot and plum. Frosty upstate New York winters are not always kind to those trees, but the 75-year-old farmer is counting on a trend of milder winters.

"This farm here has been set up for the future," he said.

The future may have arrived already in icy Greenland, where fishermen are thrilled by the return of cod and farmers are reporting higher yields.

"Maybe the turnips get a little bit bigger, and the potatoes get a little bit bigger, but that's important," said Kenneth Hoegh, a government agricultural adviser. "We are right on the edge here for agriculture."

Jesper Madsen, who directs Arctic research at the National Environmental Research Institute in Denmark, said Greenland's agricultural gains would seem like small potatoes economically if the retreating ice there clears the way for more oil drilling.

Still, people shouldn't start planting banana trees in Boise or book a beach vacation in Iceland just yet. A likely warm-up would be gradual and might even be mitigated if the world cuts greenhouse gas emissions.

 

CHINA MAY LEAD IN GREENHOUSE GASES
(Source: Mitchell Landsberg, Times Staff Writer, 6/21/07)

BEIJING — It was only three months ago that international energy officials revised a prediction that China would surpass the United States as the world's largest producer of greenhouse gases by 2009 or 2010. It could happen, they warned, as early as the end of this year.

That may have been conservative.

China's emissions of carbon dioxide, the most significant greenhouse gas, already have exceeded those of the United States, according to a report released this week by the Netherlands Environmental Assessment Agency.

The study estimated that the surging demand for power from China's rapidly expanding economy caused carbon dioxide emissions to rise by 9% in 2006. That increase, coupled with a slight decline in the United States, meant that China's emissions for the year surpassed those of the U.S. by 8%, the Dutch report said.

A top official of the International Energy Agency, considered the authoritative source on global energy use and fossil fuel emissions, said Wednesday that there was little practical difference between his estimates and those by the Dutch agency. "It is either this year, or it was 2006, or it will be 2008," said Fatih Birol, the agency's chief economist.

While not familiar with the Dutch researchers, he said, that what is important is the way China and the richer countries of the industrialized world respond to the changing situation.

Neither the United States nor China have ratified the 1997 Kyoto Protocol setting limits on greenhouse gas emissions. And as recently as this month's Group of 8 summit of leading industrialized nations in Germany, President Bush cited China as a reason for his continuing opposition to mandatory measures, which critics say impose specific standards on the most economically advanced nations but not on the developing world.

"We all can make major strides, and yet there won't be a reduction until China and India are participants," Bush told reporters at the G-8 conference.

The Dutch report signals a remarkable turn of events for a country that, though the world's most populous, was a distant also-ran among energy consumers until the last several decades, when the Communist government began market-oriented economic reforms. It also underscores the urgency felt in other global capitals about reining in China's greenhouse emissions.

 

URANIUM CLEANUP TO GET ROLLING
(Source: Robert Gehrke, Salt Lake Tribune, 6/21/07)

The Energy Department awarded EnergySolutions a $98.4 million contract to begin removing 16 million tons of uranium tailings and contaminated soil from the banks of the Colorado River near Moab.

But Rep. Jim Matheson, D-Utah, says the plan for moving a fraction of material by 2011 is not ambitious enough and hopes the department steps up its cleanup efforts.

Under the four-year contract, EnergySolutions will do the initial work on moving the tailings by rail to Crescent Junction, north of Moab, and bury it in a containment pit there.

"These contract awards will bring the Department of Energy one step closer to watching the mill tailings being loaded and moved away from the Colorado River," said Don Metzler, director of the Moab project.

EnergySolutions spokesman Mark Walker said the company expects to take about six months to plan the project and should begin the actual moving of the tailings sometime early next year.

As many as 150 workers are projected to haul about 2 million tons of material before the contract lapses. But that leaves more than 14 million tons behind, and Matheson said he wants the project to move faster.

"This contract award announcement is months overdue," he said. "The proposal calls for just one-eighth of the tailings pile to be moved by 2011. That's not acceptable, given the hazard posed by the location of the project. I expect a much more expeditious performance, including meeting my completion deadline of 2019."

The Energy Department decided in 2005 to move the uranium tailings, a pasty toxic remnant of ore refining at the Atlas Corp. mill. The mill closed in 1984 and the company filed for bankruptcy in 1998, leaving in place a small remediation fund and an inadequate earthen cap on the pile.

The tailings pile now sits just outside Arches National Park and studies have found that toxic chemicals such as ammonia are seeping into the groundwater and nearby Colorado River, alarming the 25 million residents down river who rely on the river for their drinking water and threatening four species of endangered fish.

The department had estimated it would take seven to 10 years to finish the cleanup, but since then has set 2028 as its target date for completion - which has been criticized by Matheson and Sen. Bob Bennett, R-Utah.

Bennett said he was "encouraged" to see the contractor selected, but "I made it clear to DOE that 21 years was an unacceptable timetable for cleanup, and I'll continue to make sure this process moves forward expeditiously."

Metzler said the department will know more about the time line and costs for removing the pile once EnergySolutions develops its schedule.

"This definitely is a step in the right direction for everyone, and the environment, too," Metzler said.

Steve Creamer, CEO of EnergySolutions, said he is "delighted with the contract."

"It is particularly satisfying to be performing this work here at home in Utah," Creamer said. "I'm proud of our team at EnergySolutions and the confidence that DOE has placed in us to complete this work."

The Atlas contract is a significant boost for EnergySolutions, which in March announced it would be going public, issuing $500 million in stock to help cover $764 million in outstanding debt.

Metzler said that over the past five years, the Energy Department has drained and treated more than 83 million gallons of contaminated water from the pile to prevent it from reaching the river. It also has cleaned up and re-vegetated 70 acres of the former mill site.

The department also awarded a contract for up to $22 million to S&K Aerospace Inc., of St. Ignatius, Mont., to provide administrative, records management, training, telecommunications and infrastructure services.

THE WEST MUST GIVE CHINA INCENTIVE TO CURB EMISSIONS
(Source: Gwynne Dyer, Salt Lake Tribune, 6/25/07)

The United States is off the hook: Last year China overtook the U.S. to become the world's biggest emitter of carbon dioxide. "The tall tree attracts the wind," and from now on China will be the main target of the criticism that used to be directed at the United States for refusing to accept binding limits on its greenhouse gas emissions.

What's particularly striking is the speed with which China has passed the United States. In 2005 its CO2 emissions were 2 percent lower than those of the U.S.; in 2006 they were 8 percent higher. Yet China only has four times the population of the United States, and the average Chinese is nothing like a quarter as rich as the average American. In fact, the vast majority of Chinese don't even own cars. So why does China produce so much CO2?
One reason is cement. The pace of building in China is so intense that the country produces 44 percent of the world's cement (the U.S. produces 4 percent), and cement production is a major source of greenhouse gases. The main culprit, however, is coal, which accounts for 70 percent of China's energy consumption.

China already burns more than twice as much coal as the United States, and almost as much as everybody else in the world combined. In the race to keep up with soaring energy demand, it is building 550 new coal-fired power stations (they are currently opening at the rate of two a week) and nobody has the time to experiment with clean-burning coal technologies that are still new even in the West. So China's emissions will continue to race ahead of everybody else's.

But climate change will affect the lives of ordinary Chinese people and the government and the experts know it. One government study last year predicted a 37 percent fall in crop yields within the next 50 years if current trends persist. Since we may assume that climate change will be having comparable effects elsewhere and that even a rich China will be unable to make up the shortfall by importing food, that prediction implies mass starvation. Don't they care?

Of course they care, but they are in a high-stakes poker game and they cannot afford to blink. There is going to have to be a global agreement on curbing greenhouse gas emissions within the next five to 10 years or the world faces runaway climate change, but countries like China and India must get special terms or their hopes of a prosperous future are doomed.

Put yourself in China's shoes. Five hundred years ago average incomes in Europe, India and China were about the same. Then the Europeans got the jump on everybody else technologically, grew unimaginably rich and powerful, and conquered practically the whole world. They also industrialized, and for 200 years it was their industries, their cities, their vehicles that poured excess CO2 and other greenhouse gases into the atmosphere.

Now the rich countries are concerned about the consequences. Now they are even willing to curb their emissions (though some rich countries less so than others) - but they can easily afford to because they are already rich and bound to remain so.

Whereas if China imposes the same kind of curbs on its emissions, then it will not become a country where most people are prosperous and secure in this generation, or perhaps ever. The same goes for India and all the otheronce-poor countries that are now experiencing very rapid economic growth. So the deal must be that they get to keep on growing fast and the rich countries take the strain.

There are two main ways for the developed countries to take the strain. One is to cut their own emissions very deeply, leaving some room for the developing countries to expand theirs. The other way is to pay directly for cuts in the emissions of the developing countries: Pay them to adopt clean-burning coal technologies, pay them to build renewable energy sources, pay them not to cut the rain-forests down. Pay them quite a lot, in fact, because otherwise we all suffer.

The developing countries will never get that deal unless they demonstrate that they are unwilling to curb their emissions without it. That is what they are doing at the moment and it's not actually a poker game at all. It is a game of chicken.

 

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LEGISLATIVE & TAX

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CANNON LASHES OUT AT DEMS FOR OIL SHALE DELAY
(Source: Thomas Burr, Salt Lake Tribune, 6/27/07)

WASHINGTON - Rep. Chris Cannon charged Wednesday that the House had "put the brakes" on oil shale development in Utah, Colorado and Wyoming by passing a measure to prohibit more permits until an in-depth study was completed.

The measure, added to the Interior Appropriations spending bill, says no permits can be issued for oil shale development on public lands while the studies are proceeding, a move Cannon said was a "major step backward."
"Cowed by the environmental lobby, the majority [Democrats] today voted to put the plug back into one of the most promising and viable new sources of oil we have in the entire nation - the oil shale we have right here in Utah," Cannon said after an amendment he offered to limit the ban to Colorado failed.

Cannon said during the House floor debate that oil shale in the West holds the potential of having triple the amount of crude oil in Saudi Arabia and that it's no secret environmentalists don't want oil shale production to succeed.
"At a time when the price of consumer goods and services are soaring, in large part because of the cost of energy resources, why would we intentionally hinder our ability to develop our promising resource," he said.
Rep. Mark Udall, D-Colo., however, said that he was concerned about the fast-paced approval of oil-shale leases and development of a boom-and-bust economy.

"Oil shale has potential as an energy source, but Colorado's Western Slope has had experience with a rush to development that ended up hurting our region's economy," said Udall. "My legislation will ensure that oil shale is developed in a responsible way."

BISHOP'S PROVISION FOR PARKS PASSES
(Source: Thomas Burr, Salt Lake Tribune, 6/28/07)

WASHINGTON - The U.S. House approved a provision pushed by Rep. Rob Bishop, R-Utah, to prevent federal agencies from condemning private land near public parks and monuments.

The amendment to the Interior Appropriations bill prohibits federal agencies from using any public funds to use eminent domain to take parcels from a property owner living near federal lands.

"While there are legitimate uses for eminent domain, the Department of the Interior too often uses the threat of condemnation to persuade landowners into becoming 'willing sellers,'" Bishop said in a statement. "This amendment removes that threat and protects our constituents."

Bishop cited the 2005 U.S. Supreme Court ruling, Kelo v. The City of New London, that allowed a government to condemn private land to build commercial enterprises and other recent "abuses" of eminent domain as the reason for the amendment.

Bishop failed in two other amendments he pushed. One would have shifted some $32 million in the spending bill to boost border security on federal lands.

Another amendment that failed would have prohibited funding in the bill from being given to nonprofit groups that are suing the agency from which they are seeking the funds.
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BERNANKE FORECASTS AN ECONOMIC COMEBACK
(Source: Jeannine Aversa, Associated Press, 6/5/07)

WASHINGTON - Federal Reserve Chairman Ben Bernanke predicted the economy will rebound from its anemic start of the year even if the housing slump persists. Wall Street slid, taking the news as a sign the Fed won't lower interest rates.

Economic growth in the year's first three months nearly stalled, logging just a 0.6 percent pace. It was the worst quarterly showing in more than four years.

However, Bernanke said he believes some forces that figured prominently in that poor performance - including a bloated trade deficit and cutbacks by businesses in inventory investment - ''seem likely to be at least partially reversed in the near term.''

Bernanke made his comments via satellite to an international monetary conference in Cape Town, South Africa. In his talk, he stuck to the Fed's forecast that the economy in coming quarters will advance ''at a moderate pace, close to or slightly below the economy's trend rate of expansion.''

Some economists put the economy's trend, or normal growth rate, at around 3 percent to 3.25 percent.

On Wall Street, stocks fell as investors took Bernanke's remarks to suggest the Federal Reserve has little reason to lower interest rates any time soon. The Dow Jones, having slid more than 100 points earlier in the session, closed down 80.86 points to 13,595.46.

The Fed meets next June 27-28, and many economists predict policymakers will again hold a key interest rate steady at 5.25 percent, where it has been for a year. ''The Fed remains comfortably on the sidelines,'' said Scott Anderson, economist at Wells Fargo Economics. Many economists think rates will stay where they are for the rest of this year.

Even with Bernanke's hopeful outlook, the Fed chief made clear once again that the painful residential real estate downturn, which started in many parts of the country last year, ''appears likely to remain a drag on economic growth for somewhat longer than previously expected.''

Residential construction probably will remain ''subdued for a time'' until builders can pare down a backlog of unsold new homes, he noted.

But, thus far, the housing market's problems haven't spread through the broader economy in a significant way, Bernanke said.

On the inflation front, Bernanke said underlying inflation, which excludes food and energy prices, remains ''somewhat elevated'' despite some improvements. Bernanke again clung to the Fed's forecast that underlying inflation seems likely to moderate gradually over time. Still, he said, there is a big risk to the economy if that forecast doesn't materialize.

Besides discussing the economy, Bernanke also talked about troubles plaguing both lenders and borrowers with high-risk ''subprime'' mortgages provided to people with spotty credit histories.

Foreclosures and delinquencies have spiked as rising interest rates and falling home prices made it difficult for some people to keep up with their payments.

Bernanke, as he said in a speech last month, predicted there will be further increases in delinquencies and foreclosures this year and next as interest rates on many subprime adjustable-rate loans will go up as they reset. Some analysts estimate that nearly 2 million adjustable-rate mortgages will reset to higher rates this year and next.

However, Bernanke repeated his belief that troubles in the subprime mortgage market are ''unlikely to seriously spill over to the broader economy or the financial system.''

CHINA SURPLUS HITS $22.5B, 3rd HIGHEST EVER
(Source: Salt Lake Tribune, 6/12/07)

China's politically sensitive trade surplus soared in May to the third-highest monthly level on record, according to government figures released Monday, amid growing pressure from U.S. lawmakers for sanctions against Beijing.

The surplus hits $22.5 billion (16.9 billion euros), up 73 percent from last May, the Chinese customs agency said on its web site. Exports jumped 28.7 percent to $94 billion (70 billion euros), while imports rose 19.1 percent to $71.6 billion (53.6 billion euros). China has promised to narrow its yawning trade gap under pressure from Washington and other governments, but economist say multibillion-dollar surpluses are likely to continue.

DESPITE GAS PRICES, RETAIL SALES SURGE IN MAY BY 1.4%
(Source: Associated Press, 6/13/07)

WASHINGTON - Consumers brushed off rising gasoline prices and slumping home sales to storm the malls in May, pushing retail sales up by the largest amount in 16 months.

The Commerce Department reported that retail sales surged by 1.4 percent last month, compared to April, double the increase that analysts had been expecting. Retail sales had fallen by 0.1 percent in April.

The May strength was widespread with auto dealers, department stores, specialty clothing stores and hardware stores enjoying an especially good month.

Sales would have been strong even without last month's big jump in gasoline prices, which saw prices top $3.20 per gallon. Excluding sales at gasoline stations, overall retail sales would still have been up 1.2 percent.

Meanwhile, a second report showed that businesses increased their inventories held on shelves and back lots by 0.4 percent in April, slightly higher than the 0.3 percent gain that Wall Street had expected.

Businesses had drawn down inventories in the first three months of this year, a factor that helped slow the economy's growth to a barely discernible 0.6 percent rate in the January-March period. That was the weakest performance in more than four years. But inventory rebuilding is expected to help contribute to a rebound in growth in the second quarter.

The strong showing for retail sales caught analysts by surprise. They had been forecasting a more moderate rebound of 0.7 percent.

The increase should ease fears that consumer spending, which accounts for two-thirds of the economy, could falter in coming months under the impact of the surge in gasoline prices, the significant correction in housing and recent increases in interest rates. The 1.4 percent increase in May sales was the biggest one-month advance since a 3.3 percent surge in January 2006.

SUMMERTIME VIEW
(Source: Jeff Thredgold, Tea Leaf, 6/13/07)

The U.S. Economy -- Picking Up

The first quarter's pathetic 0.6% real (inflation adjusted) annual growth pace should be followed by a 2.2%-3.2% growth rate over the next 12 months, more in line with the 3.2% real growth pace of 2005 and 2006. Both the broad services sector and the manufacturing sector have shown recent signs of improvement. Financial market players are less concerned about the chance of recession... and more concerned about solid economic growth aggravating inflation. It's always somethin'!

The Federal Budget -- Revenues Surge

A budget deficit of $150 billion or less (the smallest in six years) seems on tap for fiscal year 2007, which ends next September 30. Surpluses at the state and local level offset the nation's shortfall. Powerful gains in individual and corporate tax revenue, tied to income and investment tax cuts of recent years, are today's reality. When you cut tax rates, you typically generate more tax revenue. Of concern? Budget challenges become more daunting in coming years.

Employment -- Labor Shortage

The nation's unemployment rate averaged 4.6% over the past 18 months, below the averages of the '70s, the '80s, and the '90s. The issue of tighter labor availability—especially for skilled workers—will challenge businesses of all shapes and sizes. Growth of the labor force in coming years? The slowest ever.

Inflation – Oil Unknown

Most forecasters see 2007 consumer inflation near 2.5%-2.8%. By comparison, the Consumer Price Index rose 2.5% last year, 3.4% in 2005, and 3.3% in 2004. The direction of oil prices has a great deal to do with subsequent inflation pressures.

The Federal Reserve – Gone Fishin'

The Federal Reserve has been on the monetary sidelines since June 2006, following 17 consecutive 0.25% hikes (to 5.25%) between June 2004 and June 2006 in the critical federal funds rate. Prior to that period, the federal funds rate was at a 46-year low of 1.00% for 12 months.

Most forecasters expect the Fed to remain on hold through the end of the year, with some expecting a small rate cut late in the year. Making it interesting? A vocal minority of economists still expect the Fed to tighten later in the year.

Long-Term Interest Rates – Global Pressures

Thirty-year fixed-rate mortgages rose to the 6.50%-6.80% range in mid-June as signs of strong global economic growth raised inflation anxiety. However, don't listen to those who might talk of 7.5 0% to 8.00% to 8.50% mortgages just around the corner. It won't happen.

Home Prices – Realistic Pricing

Surging home prices on both coasts and in the Southwest during 2002 to2006 gave way to a buyers' market more recently. The simple reason? The average American home rose 53.53% between March 31, 2002 and March 31, 2007. Florida?...up 102.12%. California? ...up 98.80%. Nevada?...up 95.75%. Arizona?...up 93.76% (source: OFHEO). Home owners and "investors" simply became too greedy, requiring the current painful downward adjustment in many markets. We expect greater home price strength in the nation's interior as relative values (compared to the coasts) are attractive.

The Global Economy -- Solid Growth

Strong global economic growth continues, following impressive growth during the prior four years. Solid growth for 4-5 consecutive years is the first such occurrence since the early 1970s. Risks to ongoing solid growth include any major terrorist atrocities (especially on American soil), much higher oil prices, and a worsening of Middle East tensions.

Japan, the global community's second largest economy, returned to modest economic growth during the past few years after a decade of economic stagnation. Stronger consumer spending at home and rising exports to China have benefited the Japanese economy.

Powerful Chinese economic growth and higher Chinese stock prices of recent years have led to further steps by political leaders to slow the economy down. Excessive growth has also led to serious environmental damage, with polluted air in major cities and poisoned rivers the norm.

Strong Indian economic growth also remains on track, although an infrastructure of two-lane national highways and antiquated airports, sewers, and water systems must be addressed. Most other economies in the Pacific Rim are performing reasonably well.

The European economy has improved, with real growth near 2.7%-3.0%, the best in six years. Germany and France still struggle with jobless rates nearly double those in the U.S. and Japan. Long-delayed labor reforms bode well for greater European competitiveness in coming years. The European Central Bank has raised its key short-term interest rate eight times since late 2005 to keep inflation under wraps. An additional hike or two could occur later this year.

By various measures, Russia has now surpassed Saudi Arabia as the world's largest oil producer. Moves toward greater governmental control and lesser individual freedoms are worrisome to both the citizenry and Kremlin-watchers around the globe. President Putin still talks of stepping down in 2008... we'll see.

Various South American countries struggle with high taxes and stifling regulatory burdens. Oil-rich Venezuela remains a political powder keg, with oil production now in decline.

Canadian economic growth has slowed, although the energy-rich Western provinces are booming. The nation's most recent unemployment rate of 6.1% was a 33-year low. The Mexican economy is growing at a reasonable pace, with the immigration issue highly charged on both sides of the Rio Grande.

The Bottom Line?

U.S. economic performance is likely to return to a more solid pace, following sluggish first quarter growth. In addition, we expect: a declining budget deficit... tighter labor availability... modest inflation pressures... relative stability in both short- and long-term interest rates... soft coastal housing markets, with more solid interior performance... and an anxious but impressive global marketplace.

 

EMPLOYERS HARD-PRESSED TO FILL JOBS
(Source: Lesley Mitchell, Salt Lake Tribune, 6/14/07)

The latest unemployment report is out, and it shows what employers such as Lagoon amusement park already know - the job market is so tight it's a struggle to remain fully staffed.

Utah continues to lead the country in job creation, with employment growth of 4.5 percent for the year that ended in May, the Utah Department of Workforce Services said. The state has been creating jobs at a high rate, well above the national average of 1.4 percent, since January.

In all, about 54,000 jobs have been created in the Utah economy in the past year, raising total employment in Utah to 1.25 million. That's an average of 4,500 new jobs in the state per month.

For Lagoon, a regional attraction that employs about 2,500 people during its peak summer season, staffing the park is even more difficult than last year, said Dick Andrew, executive vice president of marketing.

While minimum wage is $5.15 per hour, he said Lagoon couldn't pay that and get enough workers. He said the company starts workers at $7 and throws in perks to draw teenagers and anyone else in need of a summer job.

There's free park admission for each worker and discounted park admission several times each summer for their families. The park also offers discounted food and an employee cafeteria.

New this year is a "bounty" - as much as $100 in free food - to employees who bring a friend or family member in to apply for a job who ends up being hired.

More than ever, the park has to be creative in its recruiting, Andrew said. "It seems like everybody already has a job."

The numbers support that statement.

Utah's unemployment rate was 2.5 percent in May, the same as in April and markedly lower than the national average of 4.5 percent.

Economists generally consider Utah to be in a state of "full employment" - meaning virtually anyone who wants a job can find one, although it may not be at the pay rate they desire. Only about 33,100 Utahns were unemployed in May, compared with 39,600 in May 2006.

So when will Utah's hot job market cool down?

Last year, economists had predicted it would slow by now.

Today? "It seems like we'll keep rolling along at this level through the end of the year," said Mark Knold, chief economist for the Department of Workforce Services. "It could be two years down the road before we see any noticeable slowdown."

The high rate of new jobs is creating headaches for employers, many of whom are struggling not only to recruit but to retain workers. For workers, the tight labor market means higher wages and more job security.

Knold said he had thought such low unemployment would eventually slow job growth because employers couldn't fill positions.

But they are still able to find workers, which leads Knold to believe that many new hires are from out of state, especially from areas plagued by high unemployment.

Aside from recruiting out of state, companies are offering creative incentives to get the workers they need.

SOS Technical, a Utah technology staffing company, is giving referral bonuses to help its client companies fill available positions. To jazz things up, the company recently began offering an Apple iPod Nano as an alternative to a cash bonus to anyone who refers someone who gets hired by one of their client companies, said Jake Smith, account manager of SOS Technical in Salt Lake City.

Cold hard cash remains a popular incentive, especially in industries with pronounced worker shortages such as nursing and long-haul trucking. Trucking company Sharp Transportation in Wellsville, for example, offers a hiring bonus of $1,000 payable to employees who remain on the job for at least a year. There are also referral bonuses of about $300 for existing employees who refer a friend.

Mark Adams, who handles recruiting for the 90-employee company, said he polls other employers and updates his company's incentive offers regularly.

"It is definitely hard to find drivers," he said. "You have to be as competitive as you can be."

David Rose, a site leader for call-center operator Convergys in Murray, has increased the referral bonuses in recent months in a bid to get more job applicants.

The company, which employs about 6,500 people in Utah, used to offer up to $500 in referral fees to an employee who brings in a new hire. To get the full referral bonus, the new employee has to stay on the job for at least six months. The bonus being offered right now has been increased to as much as $750.

Depending on the job, the company also has been offering signing bonuses to help fill positions.

 

HOME BUILDING DIPS IN UTAH, U.S.
(Source: Tribune Staff and Wire Services, Salt Lake Tribune, 6/21/07)

Construction of new homes nationwide - including Utah - fell in May as home builders coped with rising interest rates and the nation's crisis in subprime lending.

Housing, which is struggling through its biggest downturn in 16 years, is expected to continue to face troubles in the months ahead before likely starting to stage a rebound in 2008.

The Commerce Department reported Tuesday that construction of new homes and apartments dropped by 2.1 percent last month to a seasonally adjusted annual rate of 1.474 million units, 24.2 percent below the level of a year ago.

The May decline was in line with expectations and reflected weakness in the South and West, which offset construction gains in the Northeast and Midwest.

Permits, considered a good barometer of future activity, rose by 3 percent in May but that followed a 7.1 percent plunge in April. The increase last month came from a rebound in permits for apartment construction, which can be volatile. Applications for single-family homes fell by 1.8 percent and have been down four of the past five months.

Utah's home-building industry also has slowed down substantially this spring. Builders along the Wasatch Front took out permits for the construction of 1,188 single-family homes in May, down from 1,373 in May 2006.

Home builders are facing new problems with the recent spike in mortgage delinquencies - which means more homes are being dumped on the market - and a rise in mortgage rates over the past month. Freddie Mac's national survey for 30-year mortgages hit an 11-month high of 6.74 percent last week.

The National Association of Home Builders reported that its survey of builder sentiment sank in June to the lowest level in 16 years. The three major components of the index - sales, sales expectations and buyer traffic - all posted declines.

Construction of single-family homes dropped 3.4 percent last month, while construction of apartments rose by 3.1 percent.

By region of the country, construction activity fell by 19.7 percent in the West and 1.6 percent in the South. Construction was up 15.7 percent in the Northeast and 15.5 percent in the Midwest.

U.S. ECONOMY EXPECTED TO EXPAND IN COMING MONTHS
(Source: Salt Lake Tribune, 6/22/07)

The U.S. economy should expand modestly in coming months as a healthy job market continues to trump weakness in housing prices, a gauge of future business activity showed on Thursday.

The Conference Board said its index of leading economic indicators rose a higher-than-expected 0.3 percent in May, boosted by rising stock prices, higher consumer expectations and the availability of jobs.

Economists said that jobs should continue to be plentiful, despite an unexpected surge in jobless claims last week.

The Labor Department reported Thursday that unemployment claims totaled 324,000 last week, up 10,000 from the previous week, to the highest level since mid-April. While the big increase was unexpected, analysts said it did not change their view that the labor market remains hardy.

 

FED LEAVES RATES UNCHANGED
(Source: Martin Crutsinger, Associated Press 6/28/07)

WASHINGTON - The Federal Reserve left a key interest rate unchanged on Thursday, expressing new optimism on economic growth and lower inflation.

Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep the federal funds rate, the interest that banks charge each other, at 5.25 percent, where it has been for the past year.

Analysts believe that Fed officials could remain on hold through the rest of this year and well into 2008. Investor hopes that the weakening housing market could trigger rate cuts in coming months have faded as the economy has showed signs of a rebound.

The Fed decision means that banks' prime lending rate, the benchmark for millions of consumer and business loans, will remain unchanged at 8.25 percent, where it has been for the past year.

In a statement explaining its actions, the Fed continued to say that its greatest concern was that the risk of inflation will not moderate as expected.

But the Fed dropped a description in previous statements that inflation was ''elevated.'' Instead, it expressed some optimism about recent developments, saying ''Readings on core inflation have improved modestly in recent months.''

The statement said that ''a sustained moderation in inflation pressures has yet to be convincingly demonstrated.''

David Jones, chief economist at DMJ Advisors, said the Fed's comments signaled that the central bank is prepared to leave rates alone for the rest of this year.

 

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SAFETY

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MSHA MAY BE MORE STRINGENT, RIGID IN MINE SAFETY ENFORCEMENT
(Source: Dorothy Kosich, 6/8/07)

ELKO, NV - U.S. mining health and safety legal expert Mark Savitt warned Nevada mining health and safety professionals that the Mine Safety and Health Administration (MSHA) has become more stringent and rigid in the past year, and is discouraging dialog and discussion.

In a presentation to the Western Underground Mining Association Conference at the Mining Expo, Savitt claimed that mining health and safety attorneys are being "cut out of the whole [discussion] process" by the Mine Safety and Health Administration.

For years, MSHA relied on a federal statute that was rigid, and based on a 50-year old management and safety model, according to Savitt. That situation didn't improve when Congress came down on MSHA "very hard" and in "very nasty ways" by enacting the Miner Act of 2006, he added. The U.S. Congress was reacting to a series of domestic coal mining fatalities.

Savitt claimed that MSHA is responding to congressional demands for increased mine safety by "trying very hard to be more stringent." He said mining operators are beginning to see evidence of MSHA's stringent stance on the citations issued by the agency.

"Congress is essentially counting citations and looking at dollar amounts" rather than allowing MSHA to encourage a health and safety environment that allows mining operators to use regulations are a strategy to drive people toward safer behavior at mines, Savitt asserted.

The situation forces mining to adopt a combined safety, production, cost, and liability approach to mine health and safety, he suggested. Savitt said a culture of behavior-based, liability-reduction programs is slowly emerging at minesites. For instance, MSHA has now levied the $220,000 maximum individual civil penalty in three instances. However, the agency has not yet chosen to put anyone in jail as is provided by the new regulations.

Managers may be in for a rude awakening when they finally realize they personally face hefty civil penalties and jail time under a wider range of circumstances than previously existed in MSHA regulations.

Meanwhile, Savitt called MSHA citations "the great unknowns" in the agency's new regulatory strategy. Forinstance, that the difference among "no negligence," "low negligence" and "moderate negligence" used in new MSHA citations "is worth a lot of money" to a mining company in terms of the fines levied, Savitt explained.

In a March alert published by the Patton Boggs law firm (of which Savitt is a managing partner), Savitt and fellow attorney Henri Sanjet warned "large mine operators should be aware that simply as a result of the size of their operations, their penalties will increase in greater proportion than those of the rest of the industry, due both to penalty "points" for operator size and a new category of penalty points for repeat violations of the same standard per inspector day."

To mitigate a portion of management liability, Savitt encouraged mining operators and health and safety officials to maintain a written record of when mine employees have been disciplined for safety violations. A verbal warning does not count as discipline with MSHA and labor unions opposed to actually disciplining employees for safety issues in writing.

Finally, Savitt advised mine safety and health managers to refrain from volunteering extra information not specifically requested by inspectors during MSHA inspections due to the potential consequence of increasing the mining operation's overall liability.