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February 2008 Edition Wheeler Machinery Company
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EVENTS
MINING-RELATED MUSCULOSKELETAL INJURIES & DISORDERS PRESENTATION On March 25, there will be a presentation on mining-related musculoskeletal injuries and disorders by Joseph Webster, MD, Medical Director, Miners Hospital. It will be held at 392 Union Hall, 2650 S 8959 W, Magna, UT, from 7 - 8:30 PM. Light refreshments will be served. Sponsors are: University Health Care, Miners Hospital & United Steelworkers Active Retirees (SOAR). For more information, contact Shauna at 1-866-864-6377 (toll-free)
ST. LOUIS-BASED ARCH COAL Arch Coal Inc., which owns and operates three coal mines in Utah, reported that it had net income of $175 million in 2007, down from $261 million in the previous year. But Steven Leer, chairman and chief executive of the St. Louis-based company, was not crying the blues, even though the per share value of Arch Coal stock slid to $1.21 from $1.80. Arch's mines in the West - including Utah's Skyline, Sufco and Dugout Canyon mines - performed well in the fourth quarter of 2007. With operating costs down $3.02 per ton, the company's Western Bituminous Region saw its operating margin increase to $2.70 per ton, overcoming a decline in the average sales price of coal.
BHP BILLITON LAUNCHES SYDNEY, Australia — BHP Billiton Ltd. launched a formal bid for rival mining company Rio Tinto Ltd. valued at $147.4 billion — the largest ever mining takeover offer. BHP, the world's largest mining company, said it is offering 3.4 BHP shares for every Rio Tinto share, an increase from its initial and informal proposal of a three-for-one, all-share takeover, the Melbourne-based BHP said in a statement. Rio Tinto, which owns Kennecott Utah Copper, has so far refused to enter into talks with its rival on a bid, which it said significantly undervalued the company. Rio Tinto's chairman Paul Skinner said the company would carefully consider BHP Billiton's offer and asked shareholders not to take any action yet. "The boards of Rio Tinto will consider the terms of the proposal carefully in the light of all circumstances and will make a further statement once they have completed this assessment," Skinner said. BHP, which made an initial approach in November, had until Tuesday to formalize its offer or walk away for six months after a U.K. Takeover Panel ruling. The offer applies to both companies in the Rio Tinto Group: the Australian-listed company Rio Tinto Ltd. and British-listed Rio Tinto PLC. The bid was subject to regulatory approvals in Australia, the U.S., Europe and elsewhere, and to 50 percent shareholder approval, BHP Billiton chief executive officer Marius Kloppers said at a news conference in Sydney. He said the proposed merger would deliver efficiency benefits worth $3.7 billion a year and raise the value of shareholdings in both companies. "There is widespread support for compelling logic of the proposal to combine companies," Kloppers said. BHP Billiton's approach to Rio Tinto was complicated last week when Aluminum Corp. of China and Alcoa Inc. bought a 12 percent stake in Rio Tinto's London-listed stock, which equated to a 9 percent stake in the whole group. Kloppers said the development was interesting but did not affect BHP Billiton's offer. BHP Billiton said it had already secured a committed bank financing facility of $55 billion. Under the offer, Rio Tinto would hold 44 percent of the combined entity. BHP Billiton's previous approach on Nov. 8 equated to 36 percent of the merged group. If the offer is successful, BHP Billiton said it will return up to $30 billion to shareholders through a share buyback within 12 months of completing the acquisition. BHP posted a net profit of $6.02 billion in the six months ended Dec. 31, down 2.4 percent from a year earlier because of moderating global growth. The company's profit for the last half of 2006 was $6.2 billion. BHP Billiton is already the world's largest diversified mining company, and Rio Tinto is the third-largest. Steelmakers in China, Japan and Europe have protested BHP Billiton's bid for Rio Tinto, contending that a takeover would give it too much influence over global iron ore supplies and pricing. The Rio Tinto purchase by Aluminum Corp. of China — a Chinese government-owned company also known as Chinalco — and Pittsburgh, Pa.-based Alcoa followed rumors that some Chinese entity might try to block BHP Billiton's takeover bid for Rio Tinto. Chinalco President Xiao Yaqing said this week in Australia that the stake that Chinalco took in Rio Tinto reflected his company's confidence in the global economic outlook and the ability of Rio Tinto's management. He suggested Chinalco might be prepared to sell its stake in Rio Tinto as part of a BHP bid "if the return is attractive." Chinalco and Alcoa have said they have no intention to raise their stake in Rio Tinto, although they reserved the right to participate in a takeover offer within the next six months.
KENNECOTT EAGLE GETS OK TO DIG FOR NICKEL, COPPER Kennecott Eagle Minerals Co. has received final approval from Michigan to begin construction of an underground nickel mine in the Upper Peninsula. Michigan's Department of Natural Resources authorized a land surface-use agreement and a post-mining reclamation plan with Kennecott for its Eagle Mine, which also will produce some copper. The mine is expected to employ hundreds over the next decade in construction and excavation work. The land-use agreement covers 120 acres of state-owned land where surface facilities will be built to service mine operations and with the portal to the underground deposit. The reclamation plan is designed to return the land to pre-mining conditions. Kennecott estimates the mine will generate a $50 million royalty for Michigan's Natural Resources Trust Fund, which buys recreational lands for public use.
KENNECOTT OPTS FOR INCREMENTAL Instead of touting its vast vision for Salt Lake County's west bench, Kennecott now will pitch its projects one Daybreak at a time. The copper giant confirmed Thursday that it no longer will push for approval of its entire 41,000-acre master plan for west-bench development. Growth still will come, officials say, but in pieces. Kennecott insists its blueprint hasn't changed - sprawling foothill communities, thousands of new jobs and perhaps a first-ever Oquirrh Mountain ski resort - but the building boom will pop up here and there as the company determines whether the property is better mined for real estate or minerals. "This has always been a very long-term project for us," said Jim Schulte, vice president of long-range planning. "The vision is fully intact. We have every expectation that, over the course of decades, that vision will be implemented." While mining operations are expected to continue until 2036, Kennecott already has unveiled plans to transform its sprawling west-side holdings - stretching from the Great Salt Lake to the Bingham Mine south of Herriman - into massive residential and business communities that someday could house up to a quarter of Salt Lake County's population. That development - projected over the next 50 to 75 years - could bring 200,000 homes to the rolling Oquirrh foothills and create 109,000 jobs, according to the University of Utah's Bureau of Economic and Business Research. It also could include the valley's first west-side ski resort - with elevations reaching 9,350 feet. Kennecott's timeline hasn't changed. Neither have plans to complete South Jordan's Daybreak, where the copper company has carved a quaint west-side community that someday will stretch over 4,200 acres. But open-space advocates worry about how effectively the county can push for land preservation without a comprehensive master plan of west-bench development. "We have less information to deal with," said Lorna Vogt, the county's open-space program manager. "I don't know if that will mean we have less land in the future." Kennecott leaders expect to huddle soon with county officials to discuss future developments. Schulte wouldn't say where those new neighborhoods would sprout, only that they likely would resemble Daybreak. Until then, Kennecott's days of ore are far from fading. The company reported $1.6 billion in earnings last year with sizable spurts in copper, silver and gold production.
U. HONORS 4 DISTINGUISHED ALUMNI PLUS NOBEL WINNER University of Utah alumni honored four of their best Wednesday, along with another who has provided the school international distinction. At its Founders day celebration, the Alumni Association honored a long-time chemistry professor, Temple University's first female president, a Utah coal mining czar and founding owner of the Colorado Rockies major league baseball team, all of whom attended the school. Nobel Prize winner Mario R. Capecchi, whose role at the U. has been as researcher and teacher, was also included, as all were given distinguished alumni awards during the association's 50th year. "This gives us an opportunity to recognize some extraordinary alumni, as well as recognize someone whose contributions are so significant, we wish we could call him one of our own," said U. President Michael K. Young. He said they were picked from among hundreds for "doing things that make us proud." Carbon County native J. Brett Harvey, president and CEO of CONSOL Energy, was honored for work in the coal mining industry. He led a recent pledge for zero mining accidents. David Grant, who has taught at the U. for decades, was recognized for his pioneering work in nuclear magnetic resonance spectrometry. Grant, who has a building named for him on campus, said he'll "stay till they kick me out the door." Distinguished alumna Ann Weaver Hart has stood at the helm at Temple University since 2002. "I would like to be remembered as someone who is committed to the importance of higher education," she told nearly 500 U. alumni and community members Wednesday at a celebration held in the Little America Hotel. Rockies team owner Charlie K. Monfort was drawn to Utah for the skiing but stayed for the university, he said, adding that his time at the U. "helped shape my beliefs, my goals and my character." "What a great school," he said. The four were joined by Nobel Laureate Capecchi, who continually credits the university and its surrounding community for providing a comfortable research environment. He was honored in December during the annual Nobel Prize event in Sweden as a winner in the physiology or medicine category and was lauded for seminal genetic research. The alumni association also announced awarding of a full-tuition scholarship to Lynette Avril, a graduate student studying post-traumatic stress disorder in the field of educational psychology and counseling. "We're a university that has been doing remarkable things," Young said. "And we've been doing remarkable things for the past 157 years with the enormous and powerful support of the alumni." The U.'s anniversary banquet marks a week-long celebration including a student queen, speakers, dances, oratory and writing contests.
MINE COMPANY TO PUT UP CRANDALL CANYON MEMORIAL The families of the six Crandall Canyon mine disaster victims still buried in its collapsed workings are closer to having one source of solace - a secluded memorial where they can be closer to their loved ones. Murray Energy Corp., which owns Crandall Canyon, said Thursday it will build the memorial in a small, elevated meadow just uphill from the mine. Protected by flanking trees, that isolated perch will enable mourners to see the mountain in which the victims are entombed while looking at the memorial, designed largely by Sheila Phillips. Her son, Brandon, was one of the six miners fatally trapped by the catastrophic collapse of the mine's walls on Aug. 6. "It's pretty up at that end of the canyon," said Phillips, of Orangeville. The solemn site will have a semi-circle of six stone monuments inscribed with the names of the still-missing six - Phillips, Juan Carlos Payan, Kerry Allred, Manuel Sanchez, Don Erickson and Luis Hernandez. Visitors may meditate on them while seated on three benches bearing the names of would-be rescuers Gary Jenson, Brandon Kimber and Dale Black, all of whom were killed Aug. 16 in a second implosion of the mine's walls. "It means a lot to us, that we will have a place to go to," said Nelda Erickson, Don's widow, who worked closely with Phillips in her consultations with Dave Shaver, a project engineer with UtahAmerican Energy, Inc., the Murray Energy subsidiary that operated Crandall Canyon. Noting that the killed rescuers' families at least had a chance to bury their loved ones, she said "the rest of us families needed that to. And we can see the mountain where they're at in the background." Shawn Clapp, a minister from the Emery County town of Ferron, informed the families Thursday that memorial plans had been finalized and read them a statement from Murray Energy president and CEO Robert Murray. "This memorial, at this serene place, will be an enduring symbol of our miners' sacrifices and our devotion to them and their families," Murray said. Erickson praised Shaver for finding a suitable location on company property and working out other details. The memorial will be reached via a 300-foot walking trail from a parking lot just up-canyon from the mine site. "We pretty much knew what we wanted, and Dave really helped us out a lot, [telling us] these are the steps you need to take," she said. Mike Mower, Gov. Jon Huntsman Jr.'s aide and a key figure in helping organize plans to build the memorial and a more-public monument on the outskirts of Huntington, said "we appreciate the company and its employees working so closely with the families in designing and building the kind of memorial they envisioned." He said private fundraising is ongoing for the Huntington memorial. Murray officials declined to reveal the cost of the memorial in Crandall Canyon. Construction will begin when weather allows.
AT UTAH MINING ASSOCIATION
As in past years, the top Association priority for the entire month of February is the Utah legislative session, which began on January 21st and ends on midnight March 5th. This year's 2008 session has been dominated by three major issues: additional funding for education; discussions on how to begin reform in Utah of the ever increasing health care insurance costs; and efforts to address illegal immigration. Since 2008 is a re-election year, legislators were initially talking about some type of tax rebate but these discussions ended when the state revenues were reported to be nearly $350 M less than last year. Even though the legislature had the third highest surplus ever – over $700 M – there was insufficient monies to consider a tax rebate after assessing all of the state's "priority" budgetary needs. Education will continue to receive record levels of funding, but the UEA will continue to complain the funding was still not enough. In the area of health care, legislation will be enacted – HB-133 sponsored by Representative Dave Clark -- to establish a task force to look at this issue in a comprehensive way to make recommendations to the legislature on what should be done. On immigration, Senator Hickman has put together a major bill SB-81, that will implement several measures including the prevention of knowingly hiring illegal immigrants by Utah businesses. Two major pieces of legislation in the mining arena that are expected to pass include: SB-224, which will establish an Office of Coal Mine Safety under Utah's Labor Commission; and SB-135, which will make the sales tax exemption for pollution control equipment permanent. Under discussion is also a statewide sales tax increase of 0.05% to provide additional funds for road construction throughout the state. After the conclusion of the 2008 Utah legislature session on March 5th, I will provide all UMA members a complete summary of the key mining-related bills. TECHNOLOGY COULD HELP MINE SAFETY A Washington company is the first to receive federal approval to proceed with wireless tracking technology that could resolve a mine-safety weakness evident in August's Crandall Canyon disaster - the inability to locate individual miners underground. The federal Mine Safety and Health Administration (MSHA) said it had authorized the use of Venture Design Services Inc.'s wireless communication and tracking system in underground mines. That approval does not guarantee Venture Design's system will work in all underground situations, said MSHA official Dave Chirdon, particularly if mine workings are ravaged by a physical calamity, such as two wall collapses that killed nine miners and injured six others in August at the Crandall Canyon mine in Emery County. But it shows the system "is safe to use in a gassy atmosphere," Chirdon said, clearing the way for companies to install it in their mines, if they choose. "This is a big step for us because it's the first wireless tracking system. This is a different technology that hasn't been available before." Jim Barrett, Spokane-based research and development manager on Venture Design's system, said his company's technology can come within 75 feet of showing where a miner is, can track the miner's movement on a big-screen monitor, and will be adding a two-way, text-messaging service. Up to now, electronic messages could be sent from the surface to points underground but not vice versa. If this system had been in place at Crandall Canyon, he said, it could have avoided the need to drill multiple holes to gain some information about the locations of six trapped miners. "That becomes important, not only to saving the rescuers' lives, but also to [helping family members] desperate for information about the status of their loved ones." Scott Matheson, who led a commission appointed by Gov. Jon Huntsman Jr. to see what more the state could do to improve mine safety, expressed interest in the system's "applicability to the deep underground mining conditions we have in the state. I hope Utah coal operators already are evaluating its use," along with a state technical advisory committee likely to be set up. Representatives of the United Mine Workers of America and the National Mining Association also applauded efforts to develop the technology. Barrett said the technology has been used since May in West Virginia, which is requiring its mines to have tracking systems prior to a June 2009 federal mandate for mines nationwide. Since 2006, MSHA has approved 36 communications and tracking systems featuring other technologies. Another 41 applications, including some wireless based, are in the approval pipeline.
WASHINGTON - The nation's largest mine union complained that President Bush's budget slashes the coal mine safety program by $10 million after a year in which 33 workers were killed in American mines. "President Bush has told America's coal miners that he doesn't care about making the improvements so clearly needed to keep them safe and healthy on the job," United Mine Workers of America International President Cecil E. Roberts said in a statement, calling the cut "absurd." The Mine Safety and Health Administration, however, said it spent millions last year purchasing equipment and completing backlogged inspections that do not need to be part of the new budget. Funding for coal safety under MSHA had increased to $155 million, but Bush's 2009 fiscal year budget proposes $145 million for that program. The budget change comes after a deadly year in mines nationwide, including the Crandall Canyon Mine disaster that claimed nine lives in central Utah. The mine union says 232 people have died in American coal mines since Bush took office. "People all over America - indeed, all over the world - asked: 'How can this happen? How can it be that American coal miners are still getting killed on the job?' " Roberts asks. "The answer is clear. Miners are being killed because of neglect on the part of their government." MSHA spokesman Matthew Faraci countered that the president's spending plan actually boosts the coal safety program and MSHA overall because the agency spent $20.4 million on programs that won't be needed next year while only dropping the coal safety budget by $10 million from what Congress doled out this year. "This budget proposal demonstrates a strong commitment to mine safety and would provide MSHA with vital resources it needs to help protect miners' safety and health," Mine Safety and Health Administration chief Richard Stickler said after unveiling the budget. The office released a PowerPoint presentation showing a $19 million increase between the agency's fiscal year 2008 and 2009 requests. The comparison, though, doesn't show $20 million Congress added to the agency's request this year. News of potential cutbacks doesn't sit well with the families of the Crandall Canyon tragedy. Any reduction in MSHA's coal-mine safety budget is "bewildering" to Steve Allred, a resident of the Emery County town of Cleveland. His brother, Kerry, was one of the six miners entombed by the initial failure of the Crandall Canyon mine's walls Aug. 6. "I don't understand politics and maybe there's something there I don't understand, but this totally blows me away after so many people died, especially with what happened at the Crandall Canyon mine," he said. "If the safety [measures] had been there and implemented correctly, those men would never have died, my brother being one of them."
MINE-RESCUE EFFORT MUST BE BEEFED UP Underground coal mines will have to beef up their mine-rescue teams, making sure that their members live closer to the work site and have more training, under a rule finalized by the federal Mine Safety and Health Administration. MSHA was required to improve overall mine rescue capability, mine emergency response times and rescue-team efficiency by the Miner Act of 2006, passed by Congress after rescue system weaknesses were made fatally clear by a Jan. 2, 2006, explosion at the Sago mine in Upshur County, W.Va. The investigation determined one miner was killed outright in an early morning explosion. A dozen others survived and erected barricades deeper in the mine to protect them from deadly gases until help arrived, but rescuers would not come for 41 hours. By then, all but one of the barricaded miners died of asphyxiation. Investigators also learned the first mine-rescue teams did not arrive on site until 5 1/2 hours after the explosion. Congress ordered MSHA to rectify the problems by the end of 2007. Five weeks late, the rule published seeks to accomplish the goal by requiring mines to have two certified mine-rescue teams, each of whose members must have 96 hours of annual training, up from the 40 previously required. Some training must be done in simulated smoke to resemble an actual disaster, and at mines where rescuers might be called to action. Five-member rescue teams also must display their skills in two mine-rescue contests a year. The rule also requires miners to be able to reach a stricken mine within an hour from a prearranged meeting point. At a public hearing in Salt Lake City in late October, Utah Mining Association President David Litvin called this provision "tremendously burdensome and in some cases unfeasible" in the West, where long distances separate mines outside scattered rural communities. He and Kevin Tuttle of the Rocky Mountain Coal Mine Rescue Association also asked MSHA for optional learning exercises to a mine-rescue contest. But both the distance and rescue-contest measures were part of the final rule. Mike Dalpiaz, a Price-based vice president on the United Mine Workers of America's international executive board, said the changes are "a very good start" to making mines safer but that much more needs to be done to give MSHA the resources, technical abilities and political will to fulfill its mission. "A lot of the smaller mines are complaining that it's a burden to have two teams, but that should be the last of their worries," he said. "Let's be safe and hope the good Lord you never have to use them." In a related matter, MSHA officials are distributing stickers, magnets and business cards with a toll-free number - 800-746-1553 - that people can call confidentially to report hazardous or dangerous conditions at mines.
Return to Top of Page BYU RESEARCH: MAKING CASE FOR CLEANER COAL POWER Coal gasification, an expensive but cleaner way to convert coal into energy, will likely become more widespread, potentially offering breakthroughs in curbing emissions that exacerbate global warming and weaning the U.S. from foreign energy, a Utah researcher predicted at a major scientific conference in Boston on Friday. As regulatory frameworks evolve to address growing alarm over greenhouse emissions associated with coal combustion, gasification will become increasingly attractive on economic grounds, according to Brigham Young University's Larry Baxter, who spoke at the American Association for the Advancement of Science's annual gathering. "Global warming issues may create gasification's best chance for success," Baxter said of the technology that uses heat and pressure to separate hydrocarbons and biofuels into their gaseous components - mainly hydrogen, carbon dioxide, carbon monoxide and water. "Gasifiers produce a nearly pure carbon dioxide stream that may be more easily captured and stored than most other processes." And gasification makes it easier to keep other pollutants associated with coal burning, such as sulfur and nitrous oxides, from reaching the atmosphere. Currently, coal accounts for more than half of the nation's and nearly all of Utah's power generation. Gasification also can yield transportation fuels in a reasonably efficient manner. A boom in this technology could open new doors for resource extraction in Utah, which holds large reserves of high-quality coal. In generating power, the process uses the waste heat from gasifying coal to drive a turbine. This technology has the potential to produce electricity with much higher thermodynamic efficiency than traditional steam turbines, but those gains are lost when the technology is used to clean up emissions. Given coal's abundance and the preponderance of infrastructure to produce and burn it, this and other fossil fuels will remain a chief component for power generation, experts say. "Our challenge is to continue to do that and at the same time reduce the impact of carbon emissions," said Dianne Nielson, Gov. Jon Huntsman Jr.'s energy adviser. "Whatever we do to develop Utah's coal resource, it has to be the best technology in terms of air quality and carbon emissions." Gasification technology has been available since World War II when Nazi Germany developed it to produce diesel. China, one of the most coal-rich and energy-hungry nations, currently puts gasification to widespread use. But "gasification has never really found its footing in the Meanwhile, Europe is pursuing a different "clean coal" technology for power generation called oxy-fuel combustion, in which the coal is burned in the presence of mostly oxygen, outputting a stream of pure carbon dioxide that is easily captured, compressed and injected underground, according to Kevin Whitty, a professor at the University of Utah. Whitty is "optimistic, but not necessarily hopeful" for gasification's prospects. "It's getting over that big hurdle of having a few successful demonstration plants," he said. The main reason gasification has remained on the chalkboard is the unlevel playing field enjoyed by existing facilities, Baxter said. Most of the cost of generating power stems from the construction of power plants. "That's why we have such old power plants," Baxter said. "Once a plant is paid off the cost of generation goes way down. And the old plants don't face the same regulatory pressure regarding emission standards." As society puts a greater premium on reducing harmful emissions, however, the cost of conventional power will soar as industry makes new investment to comply with future restrictions, he predicted. "The rest of the developed world is working on it and is making progress," Baxter argued. Under current economic models, power produced by gasification costs 30 percent more than the conventional coal-fired model, about 8 cents per kilowatt hour for gasification versus 6 cents for burning coal. Add carbon dioxide capture and storage, however, and the cost goes way up for both models, but the cost differential disappears because gasification simplifies the process of sequestering the greenhouse gas. "It's still going to be more expensive than current techniques, but it will be cost-competitive compared with most other processes that include CO2 capture and storage," Baxter said. "Coal gasification in the future could become as important as coal combustion is to us right now.''
GOVERNORS NOT READY TO MOVE AWAY FROM COAL WASHINGTON - Governors pushing alternative energy development are not shying from coal, a major culprit in global warming but also a homegrown energy source and an economic lifeline for many states. Leaders of coal-rich states say clean-coal technology is a must. "Next-generation coal is going to need to continue to be part of our energy future for this country," said GOP Gov. Tim Pawlenty of Minnesota, chairman of the National Governors Association. Next-generation coal refers to capturing and sequestering or storing the carbon that coal produces. The NGA also envisions reducing or eliminating emissions as coal is burned. Clean-coal technology is a rallying cry for many coal-producing states. They say it is possible to continue relying on the fossil fuel while minimizing its impact on the environment. EMISSIONS COSTS INCREASE Investments in coal power are becoming riskier as the price of greenhouse-gas emissions is factored into the cost of the fuel, according to a report by a consulting firm whose clients include the U.S. Energy Department. Proposed coal-fired stations across the U.S. are being canceled or delayed as pending regulation of heat-trapping gases threatens returns on investments, Synapse Energy Economics Inc. said. The prospect of climate-change legislation in the U.S. has turned forecasting the operating costs for coal power plants into guesswork, according to Tuesday's report. Investors want more information on how greenhouse-gas limits will affect coal plants while the U.S. Congress is investigating government loans for coal stations that lack emissions controls for greenhouse gases. Moody's Investors Service said U.S. utility owners face the risk of downgrades to their credit ratings as they grapple with limits on carbon dioxide. "From a financial investment and ratepayer point of view, you've got to consider the costs because it's a financial train wreck coming down the road," said David Schlissel, a senior consultant at Synapse, based in Cambridge, Mass., and lead author of its report. More than 20 planned coal-fired plants were canceled in 2007 and 36 others were delayed, Synapse said. PacifiCorp, a utility unit of MidAmerican Energy, called off plans for a 700-megawatt coal station in Wyoming because the company couldn't fix the future costs of greenhouse-gas regulation, said PacifiCorp spokesman David Eskelsen. MidAmerican Energy is 80 percent-owned by Warren Buffett's Berkshire Hathaway Inc. PacifiCorp has 10,000 megawatts of generating capacity in six states, 6,500 megawatts of which come from coal. The threat of regulation has pushed some utilities to turn to renewable power, energy efficiency and in some cases natural gas power plants. PacifiCorp operates as Rocky Mountain Power in Utah, Idaho and Wyoming. "Because of the political uncertainly regarding carbon regulation, construction of coal plants is not currently in the company's 10-year plan," Eskelsen said in an interview. "Until we have some certainty about what that regulation could be, we don't know." Congress is debating legislation that would limit greenhouse-gas emissions from utilities, refineries and large manufacturers. One measure approved by a Senate committee in December would set a price on carbon through a market for emissions credits. Climate-change legislation will probably have "significant effects on industry economics, operations and capital investment," Moody's Vice President Scott Solomon said in a statement. "New rules would likely force the industry to spend billions of dollars on compliance." The cost of global-warming gases are not properly accounted for in long-term risk forecasts by rating agencies such as Standard & Poor's, said Michael Dworkin, director of the Institute for Energy and the Environment at the Vermont School of Law. As a result, utilities should be investing heavily in renewable energy such as wind and solar power, Dworkin said at a conference at the New York Society of Security Analysts. "If you are $1 billion in your investment in a $2 billion facility and it turns out it's going to cost $3 billion, you don't quit," Dworkin said. "Coal plants are long-term, all-or-nothing investments. You have to think over decades." The U.S. needs to spend at least $1.4 billion a year through 2030 on research and development to reduce greenhouse-gas emissions, the Electric Power Research Institute, an industry think-tank, said in a January article in its member magazine. Much of the research is needed to develop ways to capture and store carbon dioxide from coal-fueled plants, the largest single contributor to greenhouse gas emissions and source of half the nation's power, it said. Equipment to capture carbon dioxide from power plants isn't commercially available, Larry Monroe, senior research consultant for Southern Co., the largest U.S. electricity producer, said in a meeting with financial analysts. The equipment might increase the cost of a typical plant by 75 percent, and as much as 30 percent of the power generated at a coal-burning station might be used up in capturing carbon dioxide and compressing it into a liquid for permanent storage, he said. The volume of carbon dioxide produced annually by U.S. coal plants is 2 billion metric tons, enough gas to fill Lake Michigan four times, Monroe said. Southern's utilities supply 4.3 million homes and businesses in Georgia, Alabama, Florida and Mississippi. All four states allow the utilities to pass to customers the cost to comply with environmental regulators, Chief Executive Officer David Ratcliffe told analysts.
ENERGY
SITLA GETS $3.5M IN AUCTION OF The School and Institutional Trust Lands Administration, or SITLA, received almost $3.5 million in last month's auction of 44,000 acres of scattered parcels with potential natural resource development. Winning bidders focused largely on oil and gas properties. SITLA leased 35,700 acres for exploration and production of those resources, taking in $3.4 million total. The highest winning bid was $1,400 an acre, while the average lease price was $96 per acre, said spokesman Dave Hebertson. SITLA also leased 5,750 acres of metalliferous minerals lands for $5,750, 1,905 acres of tar sand properties for $40,000 and 640 acres of potash lands for $2.5 million. Besides the amount of their winning bids, companies acquiring leases will pay yearly rental fees and royalties on any mineral production. Funds benefit Utah's public schools and 11 other public institutions. NUCLEAR, COAL ENERGY RENEWABLE? Nuclear and coal-fired electricity would be considered for renewable-energy credits along with solar, wind and geothermal resources under a bill that aims to reduce carbon emissions. The bill, SB202, sponsored by Sen. Curtis Bramble, R-Provo, would offer soft targets for public-power and corporate utilities to make renewable energy 20 percent of their electricity mix by 2025 if the companies find it cost-effective to do so. The loophole could let the utilities off the hook because the bill has no stick, only carrots, including a provision that would allow the companies to pass on to consumers any cost increases because of technology or renewable-energy upgrades. The Senate Transportation and Public Utilities and Technology committee on Monday unanimously advanced Bramble's bill. SB202 is an adaptation of a Rocky Mountain Power proposal that surfaced this past year during meetings of the Governor's Blue-Ribbon Advisory Council on Climate Change. On Oct. 16, Rocky Mountain Power sent to the state Department of Environmental Quality a five-page memo outlining what became the bones of Bramble's bill. Just days before the utility sent the memo, Gov. Jon Huntsman Jr. released a scientific study that found gross carbon-dioxide emissions in Utah are rising at a faster rate than the rest of the nation. On Monday, Dianne Nielson, Huntsman's energy policy adviser, told the committee the governor supported the bill. Nielson's statement disappointed some conservation advocates who put months of work into the Blue-Ribbon panel's renewable-energy initiative subcommittee, which rejected Rocky Mountain Power's proposal at least twice. In December, Rocky Mountain Power and its parent company, PacifiCorp, abandoned plans to build three new coal-fired power plants because of market uncertainty. Bramble's bill could possibly allow the utilities to fulfill their targets with nuclear and "clean" coal-fired energy, which aren't renewable like solar, wind or geothermal resources.
STATE CHIEFS MEET TO TALK ENERGY EFFICIENCY WASHINGTON - Utah Gov. Jon Huntsman Jr. joined with his counterparts from across the nation this weekend to hammer out a recommendation to the next president on improving energy efficiency and weaning the country off foreign fuel sources. Huntsman, who met in governors-only sessions at the National Governors Association conference in Washington, said he hoped to see the group pass on a litany of suggestions to the next president on improving the nation's use and production of energy sources. The Utah governor said in an interview that the NGA hopes the recommendation would be "something that we could leave on the doorstep of the newly elected president and the secretary of energy, whoever that might be." The policy statement hits on energy efficiency and climate change and details what governors are doing in their own states to attack those problems. The recommendation does not force Utah or any state to follow any regulations but instead suggests how the country could become a world leader in energy efficiency. Governors on Saturday discussed the role of traditional electricity sources in the nation's energy future, according to the NGA, and heard from utility companies on their plan to infuse a mix of coal, nuclear and renewable energy sources to meet the growing need for power. Huntsman said Utah - where renewable energy resources account for about 322.7 megawatts of electricity generation in the state - has already tapped into the types of suggestions being made by the NGA. The state produces energy through wind, biomass, geothermal and hydro production. "It's actually very consistent with what we are doing," Huntsman said. "A lot of other states are not yet doing [them], but we're kind of already on the vanguard of a lot of these recommendations. And we're trying to pick up the pace a bit." Huntsman is the incoming president of the Western Governors Association, which is pitching the Clean and Diversified Energy Initiative. That plan suggests a 20 percent boost in energy efficiency by 2020. Huntsman takes over as head of the WGA this summer. In addition to the energy policy, governors are scheduled to chat about the nation's surface transportation policy and finance systems, and improving struggling schools.
FEDS SAY MONEY LACKING FOR PLANNED WASHINGTON - The radioactive waste pile on the banks of the Colorado River will just have to wait. Despite a congressional mandate to remove the mountain of uranium tailings and contaminated soil by 2019, Energy Secretary Samuel Bodman told House members that his department won't finish the project until 2025 or later. That infuriated Rep. Jim Matheson, D-Utah, who has repeatedly pressed the department to quickly remove the pile outside of Moab, which threatens the drinking water of 30 million downstream users. "It just seems like this thing is going on forever," Matheson said after the House Energy and Commerce hearing. "More disturbing is that they would ignore an act of Congress." Matheson added a provision in the latest defense bill requiring the Energy Department to remove the Moab tailings by 2019. This was only the latest deadline in a plan that has remained in flux. Sen. Orrin Hatch, R-Utah, said, "I have no doubt that, with a little creativity, the earlier deadline can still be met. I certainly haven't given up on that." The uranium tailings span 130 acres at the edge of the Colorado River, where studies have found that uranium and ammonia are contaminating the water. The tainted dirt is left over from a uranium-processing mill that was operated by Charlie Steen's Atlas Mineral Corp. The company closed the mill in 1984 and filed for bankruptcy in 1998. Two years later the Energy Department took control of the site. Its original plan was to move the uranium tailings out on rails, finishing up by 2012. But last year Bodman told Congress that budget constraints have pushed that deadline back another 14 years to 2028. And even when pushed by Matheson, Bodman reiterated that his department won't rush to clean up the Moab site, saying it is less of a priority than other "higher risk" contamination projects throughout the country. Bodman named the Savannah River site as one of those priority projects. The site in western South Carolina is loaded with chemical and nuclear waste. But the department has awarded a contract with EnergySolutions and is moving forward with plans to ship the tailings to a safe site in Crescent Junction, according to department spokeswoman Megan Barnett. "We are committed to moving the mill tailings pile in a safe and expeditious manner away from the Colorado River," she said. In the end, it all comes down to funding. President Bush has budgeted $30.5 million for the next fiscal year. But the department would need more than $45 million next year to keep on pace to reach the 2019 deadline. Matheson promised to fight for more money, but he also said Bodman has used the funding as "an excuse." "It seems like every step of the process is taking longer," Matheson told the secretary during the hearing. "I don't understand why it is one delay after one delay after one delay, and I don't think it is simply budget." He claimed the staffers charged with leading the removal effort are dragging their feet on a number of issues, including the debate about whether to remove the tailings by truck or by train. Matheson also criticized the Energy Department for not releasing a year-by-year budget for the Moab cleanup, which could cost as much as $500 million in all. "My question is: Where is the plan?" Matheson said. Barnett said that plan is in the works. The department is teaming with EnergySolutions to develop an annual cost and work plan. Right now, the department is only looking five years in the future, when it hopes to have removed 2.5 million tons of the 16 million tons of contaminated waste.
UTAH SIERRA CLUB CHALLENGES PERMIT The Utah chapter of the Sierra Club is appealing an air-pollution permit state regulators approved four years ago for the Sevier Power Plant in Sigurd. The environmental group filed its petition for review by the Utah Court of Appeals nearly a month after the state Air Quality Board completed its own review of the state-issued license and reaffirmed it. The plant would generate 270 megawatts, enough electricity to serve about 135,000 homes. But local residents and the Sierra Club have said the plant would bring few benefits to the community - the electricity would be sold outside the area - and would pump pollutants into the area's air. The Sigurd plant has been under fire since the state Division of Air Quality issued an air permit four years ago. The Sevier Power Co., which is proposing the plant, has said for months that it expected the permit to wind up in court. TRIBUNE'S ANALYSIS OF 'ROADS ISSUE' IS FLAWED The recent Tribune editorial, "End run: Road claims must be decided one at a time," contends Kane and Garfield counties' lawsuit, Kane v. Kempthorne, is about alleged damage caused by off-road vehicles. The lawsuit is actually about Bureau of Land Management's failure to consider the counties' property rights which were granted to the counties as historic rights of way across federal lands by the U.S. Congress. Kane and Garfield counties are appealing the U.S. District Court's decision and are optimistic regarding further guidance from the 10th Circuit Court of Appeals. The Grand Staircase-Escalante National Monument Plan purports to close hundreds of historic county highways enjoyed by the public for at least 42 years and in many cases 100 years or longer. The issue is not about resource damage because public travel on historic county roads does not threaten public land resources. Typically, public land resources are not located on county roads. The Tribune's solution to the "roads issue" is confusing. On the one hand, The Tribune claims Utah's recordation of all roads will result in "unending and expensive court battles." On the other hand, The Tribune claims the counties must prove all road claims in a court of law. The Tribune also failed to consider the 10th Circuit's recognition of the congressional policy of preserving the status quo of RS2477 rights of way as of the uses established by 1976. The 10th Circuit acknowledged the counties' ability to act within the scope of their rights of way without the prerequisite of adjudication or burden of proof. The most viable and direct resolution to the RS2477 issue is for the state to initiate a statewide quiet title action. It should take place before our witnesses have passed on. Kane County has recently approved a countywide quiet title effort on all of its roads at controversy. — * Mark W. Habbeshaw is a Kane County commissioner.
U.S. JOB CUTS ANOTHER HIT TO ECONOMY WASHINGTON - A crucial pillar of the country's economic well-being has cracked. U.S. employers cut jobs last month for the first time in more than four years, a shower of pink slips that was starkest signal yet the economy is grinding to a halt if it hasn't already toppled into recession. Conditions are deteriorating, according to the latest employment snapshot by the Labor Department, which showed nervous employers slicing payrolls by 17,000. The country hadn't seen such a nationwide job loss since 2003, when employers were still struggling to recover from the last previous recession. ''We are certainly on thin ice,'' said John Silvia, chief economist at Wachovia. And even President Bush, normally a cheerleader for the economy, said there were ''serious signs'' it was weakening. Wall Street, however, took the news in stride. The Dow Jones industrials rose 92.83 points to 12,743.19. Job losses were widespread in January. Factories, construction companies, mortgage brokers and real estate firms were among those eliminating jobs - casualties of the housing bust and credit crunch. The government cut jobs for the first time since July. All those cuts swamped job gains in education, health care, retailing and elsewhere. The unemployment rate actually dipped slightly to 4.9 percent, from 5 percent in December, as people left the labor force. Wage growth also slowed, another indication of belt-tightening. Smaller wage gains could make people who still have jobs - already squeezed by high energy prices - reluctant to spend, further hurting the economy. President Bush prodded Congress anew to quickly pass an economic rescue package. To help ease the credit crisis, the Federal Reserve announced it would provide cash-strapped banks with an additional $60 billion in short-term loans through auctions later this month. The Fed started the auctions in December and has already provided $100 billion in loans to banks. With fears of recession growing, the Fed has gotten much more aggressive - ordering two big interest-rate reductions in just over a week. The unemployment rate had shot up in December to 5 percent, from 4.7 percent in November. The magnitude of that increase - something not seen since right after the September 2001 terror attacks - set off alarms. In the past, such a big increase has signaled the economy was starting a recession or already in one. The 17,000 drop was in total payrolls - both government and private employers - in January, the first monthly decline since August 2003. The government sliced 18,000 positions, while private employers added just 1,000, the fewest in nearly a year. FACTORY ORDERS FOR YEAR WORST SINCE 2002 WASHINGTON - U.S. factories saw demand for their products rise in December by the largest amount in five months, a spot of welcome news that failed to change the picture of an economy struggling to stay afloat. For all of last year, total orders - durable and nondurable goods - placed with U.S. factories went up by just 1.4 percent. It was the worst performance since 2002, when the economy was struggling to recover from the 2001 recession. In 2006, factory orders rose by 5.1 percent. The Commerce Department said that orders placed with U.S. factories rose by 2.3 percent in December. That was an improvement from the 1.7 percent gain posted in November and marked the biggest increase since July. The performance in December was slightly better than the 2 percent rise that economists were forecasting. Still, Richard Yamarone, economist at Argus Research, likened the December uptick to ''a candle in the hurricane.'' Orders for ''durable'' - big-ticket goods, such as cars, that are expected to last at least three years - rose by 5 percent in December, up from a 0.5 percent advance in November. Demand for ''nondurable'' goods - including clothing, textiles and beverages - dipped, however by 0.4 percent in December, compared with a 3 percent rise in November. Manufacturers have been hard hit by the housing bust and a struggling automotive sector. They also continue to cope with fierce competition from overseas producers. Against that backdrop, factories eliminated 28,000 jobs in January and have cut 269,000 jobs over the past 12 months, the government reported last week. The economy as a whole lost 17,000 jobs last month. That marked the first nationwide loss of jobs since August 2003, when employers were still working to get back on their feet after the recession. A more forward-looking report suggested manufacturing gained some ground in January. The Institute for Supply Management's index of factory activity rose last month to a reading of 50.7, an improvement from the dismal reading of 48.4 posted in December, which suggested the sector had shrunk at that time. A reading above 50 indicates growth, and below that level indicates contraction. SERVICE-SECTOR DROP SINKS DOW NEW YORK - Lingering hopes that the U.S. economy might avert a recession withered Tuesday after the nation's service sector - its banks, travel companies, contractors and stores, among others - shrank for the first time in five years. It was unwelcome news for many investors, who were beginning to believe that the Federal Reserve might engineer a way out of the worst economic slowdown since 1991. Stocks tumbled, with the Dow Jones industrial average losing 370 points, its biggest point drop since August. Much of the talk was not about whether there would be a recession, but about how bad it might be. ''The number's so terrible it's almost beyond belief, especially among the optimists,'' said Scott Anderson, senior economist at Wells Fargo & Co. ''I think the writing's on the wall. More and more economists are talking about recession, and whether it'll be a severe or mild one.'' The January reading from the Institute of Supply Management ''was about as big a shock as you can probably get,'' said Joel Naroff, chief economist at Commerce Bancorp. Anderson said he believes January may end up being the official start of a recession. Many businesses already suspect as much. Moving company Allied Van Lines filed for bankruptcy saying it had fallen victim to the downturn in the housing market and its own heavy debt load. Charming Shoppes Inc. - which runs the Petite Sophisticate and Lane Bryant clothing stores - said it would cut 200 jobs and close 150 stores. Stocks of rental car companies plunged after Dollar Thrifty Automotive Group Inc. slashed its 2007 earnings guidance. The company said it sees weak demand in the travel market and soft used-car sales. Small businesses also were feeling the slowdown. Ryan Kaminski, who runs a Mexican restaurant in Sarasota, Fla., said the squeeze he has felt as both a business owner and a consumer since last summer is growing worse. The restaurant's traffic started thinning out last summer, pulling 2007 sales down 10 percent from a year earlier, and so far this year sales are down 15 percent from a year ago. ''I used to be able to find a person from any trade - carpenters, electricians, plumbers - in the restaurant every day,'' he said. ''Since the housing market crashed, it's just dried up. Those type of customers are just gone.'' Kaminski, 31, said he and his wife don't spend much anymore either. ''We've cut out eating out and we didn't go on vacation last year,'' he said. ''It's getting bad.'' Executives surveyed for the service sector report by the Institute for Supply Management fretted over the economy, high oil prices, the falling stock market, lower customer demand, stiffer competition and sluggish sales, said Anthony Nieves, chairman of the trade group's non-manufacturing business survey committee. The ISM's new composite index measuring the health of the service sector was 44.6 in January, below the level of 50 that indicates expansion. The group's measure of non-manufacturing business activity fell to 41.9 in January from a revised reading of 54.4 in December - its largest drop ever. Economists surveyed by Thomson Financial/IFR had expected a slight slowdown but had still forecast growth, with a median estimate of 53. The last time the ISM reported that the service sector shrank - that is, registered less than 50 - was March 2003. ''I think it will be tipping plenty of people over the edge'' in convincing economists that the U.S. is in a recession, said Nigel Gault, chief U.S. economist at Global Insight. Gault said that in March 2001, the beginning of the last recession, the index had a break-even reading of 50. And during that recession, the index hung around 48 or 49 - several points higher than January's reading. ''This is an absolute collapse of this index,'' he said.
BUSH SIGNS RESCUE PACKAGE TO JUMP-START ECONOMY WASHINGTON - President Bush signed legislation on Wednesday to send $300 to $1,200 rebate checks to millions of Americans as a "booster shot" for the economy. Rebates are to go out beginning in May to taxpayers and low-income people, including seniors living off of Social Security and veterans who depend on disability checks. Businesses would get tax breaks for investing in new plants and equipment. "I know a lot of Americans are concerned about our economic future," Bush said. "Our overall economy has grown for six straight years, but that growth has clearly slowed." Several dozen members of Congress, including House Speaker Nancy Pelosi, stood on the stage behind Bush as he signed a bill to fend off a possible recession. He said the stimulus package was achieved after he talked with leaders of Congress in January about "whether or not we could come together to provide a booster shot for our economy - a package that is robust, temporary, and puts money back into the hands of American workers and businesses." Most taxpayers will receive a check of up to $600 for individuals and $1,200 for couples from the Internal Revenue Service, with an additional $300 per child. People earning at least $3,000 and those who owe little or no taxes would get $300 for singles, $600 for couples. Those making more than $75,000 and couples with income exceeding $150,000 are to get smaller rebates - $50 less per $1,000 they make over those thresholds. "Americans struggling with the high cost of energy, groceries and health care will soon receive relief, and our economy will get a timely, targeted, and temporary boost - thanks to our bipartisan stimulus package," Pelosi said. "This package gets money into the hands of Americans struggling to make ends meet, helps families with children, cuts taxes for small businesses that will create new jobs and stimulates our slowing economy." Economic analysts generally believe the $168 billion package Bush signed will help prevent the current downturn from ballooning into a crisis. But if the rebates don't spur a consumer spending spree strong enough to cure what ails the economy, Congress is ready to throw more money at the problem. Bush said the measure was "large enough to have an impact." Democrats and Republicans who put aside deep differences to craft the plan and rush it to enactment joined the president at the White House for the signing ceremony in the East Room. The package is designed in part to inoculate lawmakers from voter blame should the economy continue to lag as the November elections bear down. Congressional leaders already are considering more economic rescue measures that could include transportation spending, unemployment aid and measures to address the housing crunch that's at the root of the current economic doldrums. In the meantime, economists are debating how effective the rebates will be, with critics arguing that debt-burdened consumers will use the money to pay bills rather than spending the checks and spurring growth. An Associated Press-Ipsos poll found that only 19 percent of those surveyed said they planned to spend their rebate checks. Forty-five percent said they would pay bills, while 32 percent said they planned to invest the money. The last time the government sent out rebates, in 2003, recipients spent a little less than a third in the first six months, and about two-thirds within the first year, according to findings by the University of Michigan Survey of Consumers, cited by congressional tax analysts. After rebates were sent out in 2001, just 22 percent said they would mostly spend them - rather than saving the money or using it to pay off debt - and only one-third of the rebate was spent in the short run, according to the same study.
BEIJING - China's trade surplus grew by 22.7 percent in January over the same month last year as foreign demand for exports stayed strong despite worries about slowing global growth, according to data reported Friday. The latest figures appeared likely to fuel demands by China's trading partners for action on trade barriers and currency controls. Some American lawmakers are calling for punitive tariffs on Chinese goods if Beijing fails to act quickly. January's trade gap totaled $19.5 billion, the government's Xinhua News Agency said, citing data from the Chinese customs agency. Exports in January rose 26.7 percent to $109.7 billion, while imports grew by 27.6 percent to $90.2 billion, according to Xinhua. But compared to previous months, the surplus shrank. It was the first time since April that China has reported a monthly trade gap below $20 billion. In December, it totaled $22.7 billion, and in October it reached a monthly record of $27 billion. China has continued to rack up multibillion-dollar monthly surpluses despite government efforts to rein in exports of steel, plastics and other goods that it deems too dirty or energy-intensive. Economists say a slowing American economy might cut demand for Chinese goods slightly, but they still expect China to continue to run a large surplus with the United States. Friday's trade data suggested that China could expect strong growth this year despite a possible slowdown in the United States, a key export market. The managing director of the International Monetary Fund said Friday that China might be affected by a U.S. slowdown but its economy still should expand by about 10 percent this year. That would be down from 11.4 percent growth in 2007. ''While we are experiencing a decrease in growth in advanced economies, it is even more necessary than before to have a high level of growth in China,'' said Dominique Strauss-Kahn, who was in Beijing for meetings with Chinese leaders.
FOR FIRST TIME, OIL CLOSES ABOVE $100 NEW YORK - Oil futures shot higher, closing above $100 for the first time as investors bet that crude prices will keep climbing despite evidence of plentiful supplies and falling demand. At the pump, gasoline prices rose further above $3 a gallon. There was no single driver behind oil's sharp price jump; investors seized on an explosion at a 67,000-barrel-per-day refinery in Texas, the falling dollar, the possibility that OPEC may cut production next month, the threat of new violence in Nigeria and continuing tensions between the U.S. and Venezuela. The fact that there was no overriding reason for such a price spike could be a bad omen for consumers already bearing the burdens of high heating costs and falling real estate values. Many recent forecasts have said oil demand growth this year will be less than initially expected, yet prices continue to rise. That suggests they may continue rising as the weakening dollar attracts new investors to the futures market. And rising oil prices mean higher gasoline prices. ''As the economy weakens, it's going to be met with $3.50 and $3.60 gasoline,'' said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm. ''And that really spells trouble for the consumer.'' Light, sweet crude for March delivery rose $4.51 to settle at a record $100.01 a barrel on the New York Mercantile Exchange after earlier rising to $100.10, a new trading record. It was the first time since Jan. 3 that oil had been above $100. Oil prices are still within the range of inflation-adjusted highs set in early 1980. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling. ''I really think . . . crude oil's going to soar through $100,'' Cordier said. At the pump, meanwhile, gasoline prices jumped 1.8 cents to a national average price of $3.032 a gallon, according to AAA. In Utah, AAA reports regular gasoline averaging $2.98 a gallon.
FEDERAL GOVERNMENT INCREASES FINES WASHINGTON - The government will raise by 25 percent the fines it levies against employers who knowingly hire illegal immigrants, officials said. Attorney General Michael Mukasey and Homeland Security Secretary Michael Chertoff announced the increase, which is the first boost in fines in nearly a decade. Immigration and Customs Enforcement, the federal agency responsible for investigating illegal hirings, has stepped up its enforcement of the employer sanctions law in the past year, leading to a dozen major busts. Currently, fines range from $275 to $11,000 depending on the offense. The agency says some penalties could include at least six months in jail. Between Oct. 1, 2006 and Sept. 30, 2007, ICE fined employers more than $30 million for violating immigration laws. ICE arrested 92 employers and 771 employees. The agency also began deportation proceedings for more than 4,000 people who were working in the country illegally.
RECESSION LOOMS DESPITE FED'S WASHINGTON - The Federal Reserve, for all its power, faces tough new limits on its ability to keep the economy out of a recession. Even though the Fed slashed short-term interest rates twice in January, home mortgage rates have edged up steadily in the last few weeks, and credit for businesses is as tight as it was when financial markets seized up last August. Last week, the central bank found itself facing hints of a problem the United States has not seen in decades: stagflation, the mix of slumping growth, sharp spikes in o il and food prices and a rising pace of overall inflation. The Labor Department reported that consumer prices jumped 4.3 percent in January, compared with one year earlier. That was the biggest jump in more than two years. Even after excluding the volatile prices for food and energy, inflation was up 2.5 percent - well above the central bank's unofficial target of 1 percent to 2 percent. A few hours after the report on consumer prices, Fed officials acknowledged that they had reduced their forecast for growth this year to an anemic pace of 1.3 percent to 2 percent and that joblessness is likely to climb to 5.3 percent from 4.9 percent today. The Fed's new forecast, however, assumes that growth will be all but stagnant for the first six months of this year before the economy gets a lift in the second half from the economic stimulus package Congress recently passed, as well as from the Fed's own decisions to sharply lower interest rates. To be sure, inflation is nowhere near the double-digit rates of the late 1970s, and many economists agree with Fed officials that inflation will cool as the economy slows. But the combination of rising prices and stalling growth, aggravated by the deepening downturn in housing and credit markets, has put the Federal Reserve in a box of its own making. On one hand, officials are cutting interest rates to keep the economy growing at a time when oil prices are surging, credit is tightening and major financial institutions are shell-shocked from the housing and mortgage busts. On the other, the fear of rising inflation makes it more difficult for the Fed to jolt the economy with another wave of cheap money. Lower interest rates have already pushed down the value of the dollar, which in turn prompted oil-producing countries to push for higher oil prices. ''They are walking a very fine line right now,'' said Stephen Cechetti, a professor at Brandeis International Business School. ''They are trying to maintain their low-inflation credibility at the same time they are dramatically cutting interest rates. The facts are that growth is falling quickly, and that inflation is high and rising.'' Nowhere have the Fed's limitations been more apparent than in the home mortgage market. Even though the central bank slashed short-term interest rates twice in January, in part to stabilize the housing market, investors remained so worried about the longer-term outlook that mortgage rates have edged up steadily in the past three weeks. ''What's disturbing and scary is that the Fed is doing all the right things - cutting rates, and saying they'll do more - but it's not doing anything,'' said Michael Menatian, president of Sanborn Mortgage, based in West Hartford, Conn. ''We have hundreds of customers who want to refinance, but they're locked out.'' Fed officials do not see themselves as powerless. The central bank stunned investors by slashing rates twice in January, once at an unscheduled emergency meeting on Jan. 21 and again at a scheduled policy meeting on Jan. 30. Those moves brought the Fed's benchmark overnight lending rate down just 3 percent. According to minutes of both meetings, released last week along with policymakers' latest economic projections, Fed officials were increasingly worried that plunging confidence in financial markets would lead to a self-fulfilling prophecy of tighter credit conditions, stalling activity in the real economy and even more fear in financial markets. But at least some Fed policymakers were also worried about rising inflation. William Poole, president of the St. Louis Fed, dissented from the first rate cut on Jan. 21 and Richard Fisher, president of the Fed's Dallas branch, dissented from the second one on Jan. 30. The new Fed forecast, a compilation of the individual projections by Fed governors and the presidents of the regional Fed banks, anticipates that inflation will slow down in response to slower economic growth and that consumer prices will rise 2.1 percent to 2.4 percent this year. Fed policymakers made it clear they were willing to reduce interest rates to prevent a serious downturn, even if inflation was slightly higher than they wanted, according to the minutes. In a nod to the more aggressive inflation-fighting members on the Fed's policymaking committee, the minutes also noted that policymakers should be ready to reverse course rapidly if the prospects for growth improve. ''All this sets the stage for a difficult dilemma for the Fed,'' Bernard Baumohl, managing director of the Economic Outlook Group, a forecasting firm in Princeton, N.J., wrote in a report to clients. ''The only sure way the central bank can keep inflation expectations subdued is to tighten monetary policy and raise interest rates until investors, employees and business leaders are convinced that prices will remain low and stable.'' CONSUMER CONFIDENCE PLUNGES WASHINGTON - In more bad economic news, consumer confidence and home prices posted sharp declines while higher costs for such basics as food and energy left wholesale inflation rising at the fastest pace in a quarter-century. The new reports raised the threat of a return of "stagflation," the economic curse of the 1970s in which economic growth stagnates at the same time that inflation continues racing ahead. The 1 percent January jump in wholesale prices was led by a surge in the prices of energy, food and prescription drugs and followed a report last week that consumer prices had risen by a bigger-than-expected 0.4 percent because of price pressures in the same areas. Over the past 12 months, wholesale prices rose by 7.4 percent, the largest yearly gain since late 1981. Analysts warned consumers to brace for more bad inflation news with crude oil prices rising to records above $100 per barrel and with more evidence that the prolonged jump in energy prices is starting to break out into more widespread price problems. Meanwhile, the New York-based Conference Board reported that its confidence index fell to 75.0 in February, down from a revised January reading of 87.3. The drop was far below what analysts had forecast and put the index at its lowest level since February 2003, a period that reflected anxiety in the leadup to the Iraq war. A third report showed that home prices, measured by the S&P/Case-Shiller Index, dropped by 8.9 percent in the fourth quarter of last year, compared to the same period in 2006, the steepest decline in the 20-year history of the index. "Home prices across the nation and in most metro areas are significantly lower than where they were a year ago," said Yale University professor Robert Shiller, one of the index's creators. "Wherever you look, things look bleak." Analysts said rising inflation, slumping home prices, a turbulent stock market and an economy flirting with a recession were all combining to rattle consumers' nerves. "There is no evidence that the recent collapse in consumer confidence is going to turn around any time soon," said Brian Bethune, senior economist at Global Insight. He said the drop in confidence will lead to a cutback in consumer spending that will trigger a brief recession in the first half of this year. And he cautioned that "severe negative dynamics" at present could make the forecast of a mild recession too optimistic. The Bush administration insisted that the recently passed $168 billion economic stimulus bill, which will provide rebate checks to millions of families and tax breaks to encourage business investment, should stabilize the economy. White House press secretary Dana Perino said President Bush had been briefed on all the economic figures released and was closely following developments. "We're in a softening period," she said. "And the question is, how soft is it going to be and how steep is the downturn going to be?" Federal Reserve Chairman Ben Bernanke is scheduled to deliver the central bank's twice-a-year economic report to Congress today - testimony that will be closely followed to see whether the uptick in inflation will divert the Fed from what became in January an aggressive rate-cutting campaign to combat a possible recession. Fed Vice Chairman Donald Kohn, in a speech, said the Fed remained concerned about the weak economy, signaling the possibility of further rate cuts. While noting recent "disappointing" news on inflation, he said, "I do not expect the recent elevated inflation rates to persist," in part because the slowing economy should ease pressure on wages. The 1 percent jump in wholesale prices in January followed a 0.3 percent decline in December and a 2.6 percent spike in November. The wholesale report said that energy prices jumped 1.5 percent, as gasoline prices rose by 2.9 percent and the cost of home heating oil soared by 8.5 percent. Food costs jumped by 1.7 percent, the biggest monthly increase in three years. Core wholesale inflation, which excludes food and energy, posted a 0.4 percent increase, the biggest increase in 11 months and double what analysts had expected. This gain was led by a 1.5 percent spike in the cost of prescription and nonprescription drugs as well as higher costs for books, autos and plastic products.
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4-6 High Altitude Revegetation Workshop, Hilton Hotel, Fort Collins, Colorado. For more info. call Wendell Hassell at 303-422-2440. 7-8 Alternative Energy: Seeking Climate Change Solutions, Marriott University Park, Salt Lake City. For more info. visit www.law.utah.edu/stegner 11-13 Coal Ash Professionals Training Course, Hilton Palacio del Rio Hotel, San Antonio, TX. For more info. visit: www.undeerc.org/coalash08/agenda.asp 13 Utah Energy Discovery Conference, Marriott Hotel, 75 S. West Temple, Salt Lake City, UT, 8:00 a.m to 5:00 p.m. For more info. visit: http://ustaredc.byu.edu/ 18- 22 Alaska Miners Association Conference, Westmark Fairbanks Hotel & Conference Center, Alaska. For more info. visit www.arcticminers.org 20 The Governor's Utah Economic Summit, Grand America Hotel, Salt Lake City. For more info. visit: www.utaheconomicsummit.com 25 Mining-Related Musculoskeletal Injuries & Disorders, 392 Union Hall, 2650 S 8959 W, Magna, UT from 7 - 8:30 PM. Light refreshments will be served. For more info. contact Dana Hughes at 801-585-1326 or 1-866-864-6377 or by e-mail to dana.hughes@hsc.utah.edu
10-11 Climate Change and the Natural Resources Industry, Phoenix, AZ. For more info. visit www.rmmlf.org 30-1 RMCMI Colorado-Utah meeting, Grand Junction, CO. For more info. visit www.rmcmi.org
8-9 Counting The Cost of Climate Change: Policies and Carbon Issues Conference. Little America, Salt Lake City. For more info. contact Maegan Peck at mpeck@energystrat.com
1-5 International Technical Conference on Coal Utilization & Fuel Systems, Sheraton Sand Key, Clear water, Florida. For more info. visit www.coaltechnologies.com 10 UMA Educational Golf Touranment, Riverbend Golf Course, Riverton, Utah 14-19 American Society of Mining & Reclamation, Richmond Marriott, Richmond, VA. For more info. visit http://www.cses.vt.edu/revegetation/ASMR_2008.html 17-18 Safety First: Be part of the solution to prevent substance abuse in the mines. University of Utah Campus, Salt Lake City, Utah. Details regarding registration fee and lodging will be available early in 2008. See website: uuhsc.utah.edu/uas 29-1 RMCMI Convention, The Canyons, Park City, Utah. For more info. visit www.rmcmi.org
14-15 UMA 93RD ANNUAL CONVENTION, GRAND SUMMIT HOTEL, PARK CITY, UTAH
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