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October 2008 Edition
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AT UTAH MINING ASSOCIATION IT'S TIME TO VOTE! Everyone in America is talking about the importance of the upcoming November elections. Both Presidential candidates – Barack Obama and John McCain – are campaigning on the need for "change." We live in a democracy that allows each of us to have a say in who runs our country and how our country is run. America is a nation of many voices, and on Election Day -- November 4 -- every voice counts! It is very easy to be blase about the importance of voting and take a "whatever, who cares" kind of attitude. You have to go to a polling station which takes some time out of your day and may cost you a few bucks in gas. But these are a small price to pay for the right to vote. In some countries people are literally dying to be able to cast a ballot and make a difference. There are many good reasons to exercise your right to vote: 1. Casting a vote allows you to express a choice among candidates who wish to become our representatives in government. It's up to each voter to learn about each candidate and to make an informed decision. Failing to vote is tantamount to saying you don't care. Most people have opinions about the way our government should be run, and the voting process is the best way to express these preferences. 2. Voting allows each citizen to support their democratic government. If a majority of citizens chose not to vote, democracy becomes irrelevant. Voting shows that you support the democratic process and exercises your right to freedom of speech. 3. Supporting the democratic electoral process shows candidates that they are and must be accountable to the public. 4. Voting sets a good example for others. Remember, your children observe all that you do and learn from your example. Civic awareness is an important part of their training as a member of a democracy. Discuss the candidates with your family and make a point of mentioning your vote, or wearing the pin distributed at many polls that reads "I voted today." Voting also sets a positive example to neighbors, friends, and family who may be uninterested in or unfamiliar with our country's electoral system. 5. Finally, taking time to vote reflects pride in your nation and its government. Our country is a beacon of liberty for the rest of the world. Let everyone know that you care enough about America's future and its leaders to have a say in the election's outcome. Never surrender your right to speak your mind via the voting box. The future of our country depends on your vote! In the Utah elections, I would urge all UMA members to carefully consider voting for Constitutional Amendment B. This amendment to the Utah Constitution would allow certain portion of severance tax monies from natural resources – minerals, oil and gas – to go into a permanent trust. The legislature has already established the Permanent State Trust Fund, and once voters approve Constitutional Amendment B, we can begin building the fund with severance tax money. Utah needs to think more about future generations. It is time for our state to do what some of our neighboring states are doing - direct severance tax revenues into a trust fund. Eventually the trust fund will get large enough that the interest alone can sustain many key infrastructure programs. However, for that to happen in Utah, the state's Constitution must be amended, hence Constitutional Amendment B.
EVENTS SUPPORT AMENDMENT B If there is an issue on the Utah ballot this year that is a no-brainer and ought to be approved overwhelmingly, it is Constitutional Amendment B. Here's why! Utah is abundant in natural resources, especially minerals, oil and natural gas. As the resources are extracted, they are taxed. The severance tax amounts to tens of millions of dollars each year. It is money that summarily goes into the general fund and is spent as it is earned. That's not necessarily wise. One day the resources will be depleted and the state will have little to show for it. Utah needs to think more about future generations. It is time for our state to do what some of our neighboring states are doing - direct severance tax revenues into a trust fund that will eventually get large enough that the interest alone can sustain many key government programs, especially education. However, for that to happen in Utah, the state's Constitution must be amended, hence Constitutional Amendment B. The legislature has already established a Permanent State Trust Fund, and once voters approve Constitutional Amendment B, lawmakers can begin building the fund with severance tax money. In deference to future Utahns as well as wise fiscal practices, KSL strongly endorses Constitutional Amendment B. A YES vote is most certainly in order.
COMMODITY PRICES END THEIR BULL RUN, HOUSTON - The global financial panic and the economic slowdown have put at least a temporary end to the commodity bull market of the past seven years, sending prices tumbling for many of the raw ingredients of the world economy. Since the spring and early summer, when prices for many commodities peaked amid fears of permanent shortage, wheat and corn - two cereals at the base of the human food chain - have dropped more than 40 percent. Oil has dropped 44 percent. Important metals such as aluminum, copper, nickel and platinum have declined by a third or more. The swift turnaround is the brightest economic news on the horizon for consumers, putting money into their pockets at a time they need it badly. Gasoline prices in the U.S. are falling precipitously - by about 24 cents over the past five days, to a national average of $3.21 a gallon on Monday - and analysts say they could go below $3 a gallon this fall, down from a high of $4.11 a gallon in July, as demand falls. In Utah, regular is $3.460 per gallon and diesel is $3.783. Prices for most commodities remain elevated by historical standards, and they rose a bit on Monday amid the broad market rally, particularly oil. But the trend seems to be downward as traders weigh the prospect that the global economic crisis will lead to sharp drops in demand. The big question at this point is whether prices will drop all the way to historical norms or whether Asia's continuing economic boom has set a floor. The rapid commodity decline has eased fears of inflation, one of the reasons central banks were able to lower interest rates around the world last week in an effort to salvage economic growth. It also represents a fundamental shift of view that is driving markets these days. A scant few months ago, Americans were seen as participants in a bidding war with the emerging Chinese, Indian, Russian and Brazilian middle classes for a basket full of products. But that was before an extreme slowdown in demand for things as diverse as gasoline and aluminum and the retreat of investment money from commodity futures into safer havens like government bonds. The commodity bust began before last week's broad market declines, though the panic has exacerbated the pressure on commodities. Oil dropped by 10 percent on Friday alone, but then recovered some of that loss on Monday to settle at $81.19 a barrel, far below its high in July of $145.29. Some analysts, while welcoming the recent declines, believe prices are likely to remain above historical norms. Food, in particular, could be a continuing problem: Prices are still too high to allow many people in developing countries to afford adequate diets. Nor have the recent declines been passed along in American grocery stores, at least as of yet. Big increases in world wheat production because of increased acreage in the U.S., Canada, Russia and much of Europe have brought wheat prices to less than $6 a bushel Monday from nearly $13 in March. Soybean and corn prices also are easing.
RIO TINTO TO SINK $300M INTO SMELTER Rio Tinto, parent of Kennecott Utah Copper, said Wednesday it will invest an additional $300 million into the modernization of the Kitimat aluminum smelter in British Columbia. The company already has allocated $200 million to the project, which is designed to increase yearly production from 250,000 tons to 400,000 tons. Rio Tinto said the new smelting technology also will reduce greenhouse gas emissions by 40 percent.
STATE'S WATER RIGHTS OVERLORD The state's top engineer, who found himself in water wars with Utah lawmakers and neighboring Nevada, announced Thursday he is stepping down. Jerry Olds, 57, who has worked for the Utah Division of Water Rights since he was a student in 1972 and has served in his current post for seven years, is leaving Dec. 15. "I've decided there's never a good time to retire," Olds said, "and it's probably in my best interest to try something else." Olds points to automating millions of water-rights records as his greatest achievement. But he isn't done yet. Before he departs, he is laboring to finalize negotiations with the Ute and Navajo tribes over their water rights. The Division of Water Rights also is handling several high-profile projects, including a fight with Nevada over its plan to tap an aquifer in the Snake Valley and send water to Las Vegas. Since becoming Utah's top water official, Olds has urged the Legislature to clarify his responsibilities under a vague state statute. In the meantime, he vowed to do his best to follow the law as he interpreted it. But a couple of decisions, including one on a water-rights request by eastern Utah's Roosevelt, angered lawmakers who believed the state engineer shouldn't have the right to "forfeit," or take away, water rights. This year the Legislature passed HB51, sponsored by Rep. Patrick Painter, R-Nephi, that sapped the state engineer's authority in favor of the courts. Painter has said that wasn't his intent, but Olds says that's how he reads the measure. "We have limited resources. Every decision the state engineer makes is subject to judicial review," Olds said. "Is that how the Legislature wants this office to spend limited resources?" Even lawmakers who tangled with Olds respect his work, said Rep. Ben Ferry, R-Corinne. "Jerry is a terrific state engineer," Ferry said. "He has not shied away from issues that have been percolating for years that other state engineers haven't tackled. One thing about Jerry is he's fair, both ways. He plays no favorites." Mike Styler, executive director of the Utah Department of Natural Resources, praised Olds' professionalism. "I have appreciated Jerry's calm demeanor on controversial issues."
IRON COUNTY MINE OFFICIALLY REOPENS; CEDAR CITY - Thursday's official opening of an iron mine west of Cedar City was a blast. Literally. About 100 dignitaries gathered at Iron Bull Mining and Milling to watch a ceremonial rock blast in the open-pit mine. "This puts the iron back in Iron County," said County Commissioner Wayne Smith. Donald Foot, president and CEO of Salt Lake City-based Palladon Ventures, said ore is ready to be loaded onto railcars as soon as work ends at a Long Beach, Calif., port where ore will be taken to be loaded onto China-bound barges. Once in China, the ore will be concentrated and smelted by a Chinese conglomerate, Foot said. Representatives of the Chinese company, China Kingdom, were not at Thursday's ceremony, but visited the mine earlier this month and liked what they saw, Foot said. A five-year contract, valued at $1 billion, is in place. "They were ecstatic," he said. "They were impressed and surprised by [the mine's] size and potential, and excited to work long-term with the site." The mine, which started stockpiling ore last month, has a 25-member staff and is expected to eventually employ about 120 workers. Future plans call for a concentrator at the site that would use no chemicals in the mechanical process and allow a higher-grade concentrate to be shipped overseas. Palladon purchased the mine, which closed in 1996 for economic reasons, for $10 million in 2005 and invested another $10 million in upgrades. It will be operated under contract with Hurricane-based Gilbert Development Corp. Pug Urry, a veteran miner who worked 28 years at the old mine, said the return of the operation, which began in 1852 by Mormon pioneers, will have a positive impact on the community and thanked the company. ''You have my heartfelt thanks,'' Urry said.
VISITOR CENTER AT BINGHAM MINE TO CLOSE FOR THE SEASON ON SUNDAY The visitor center at Kennecott Utah Copper's Bingham mine will close for the season Sunday. Company spokesman Kyle Bennett said the visitor center is susceptible to bad winter weather because of its elevation - 6,340 feet above sea level. The visitor center will reopen in April. The 6,000-square-foot facility is at the edge of the open-pit mine, which is 2 1/2 miles wide, and affords views of heavy equipment in operation. The visitor center also features displays about Utah's mining history. Through Sunday, the visitor center will be open from 8 a.m. to 8 p.m. daily. Tax-deductible admission fees are $5 for automobiles, $25 for minitour buses and $50 for a bus. Bennett said the money goes to the Kennecott Utah Copper Visitor Center Charitable Foundation, which then makes donations to selected Salt Lake Valley organizations.
MINE GOES ALL OUT FOR MOCK MINER RESCUE WELLINGTON - The mock disaster call came into the Dugout Canyon mine office about 4 a.m. Thursday: There's a fire near an underground section where a longwall mining crew was working. Ten miners were unaccounted for. For the rest of Thursday, mine-rescue team members and other personnel at Arch Coal Co.'s mine in the Book Cliffs responded to a changing script of scenarios as they tried to locate and rescue the "missing" miners. The first move by the company dispatcher who took the call was to alert law-enforcement authorities, who knew ahead of time a disaster drill was under way. Still, since emergencies always involve local agencies, Carbon County sheriff's deputies were dispatched to set up roadblocks on the road to the mine. Castleview Hospital in Price went into emergency response mode, eventually receiving four "victims" who required various levels of treatment. Nielsen advised Arch Coal officials as they developed the surprise drill, as did John Urosek, the federal Mine Safety and Health Administration's chief of mine emergency operations. Eager to test new technology in the drill, Urosek brought two robots to Dugout Canyon as well as a communications system to connect a command center on the surface to an underground fresh air base, used by mine-rescue teams as a launching point for forays into trouble zones. These new robots have upgraded batteries that will allow travel farther into a mine. They also are equipped with cameras and microphones so handlers can communicate with miners who might have sought refuge in newly installed shelters. "We're excited when they can go somewhere remote where we don't want to put a man in harm's way or we can get a trapped miner out quicker," he said. The disaster scenario confronted rescuers with simulated smoke that limited visibility to 18 inches, said rescue-team member Andy Tweddell. He appreciated the realistic training, noting "if you do go into a bad situation, you will have training to do your job." Arch Coal shut its longwall machine down for the day, delaying mining of 15,000 tons of coal. It was worth it, said Dugout Canyon general manager Erwin Sass. "This sends a positive message to our employees and the community that we will treat them like we would like to be treated ourself, with respect and dignity."
Return to Top of Page ISSUES RAISED OVER SAFETY OF COAL ASH Environmentalists and local critics of a proposed electric-power plant are raising a new concern about plans to bury thousands of tons of coal ash at a new landfill. Members of the Sevier County Planning Commission are set to consider the fly ash disposal site at their regular meeting tonight. Critic Dick Cuminsky thinks any decision would be premature. "So far, no serious questions have been asked by the commission about the air pollution and the water pollution from the ash pit," said Cuminsky, a member of Sevier Citizens for Clean Air and Water. Bruce Taylor, of Sevier Power Co., said health and safety concerns will be addressed in the landfill-license request reviewed by state Division of Solid Waste. In Utah, as in many other states, fly ash is not considered a hazardous waste, he said. "We're hopeful [about getting approval], but you never know until you go through the process," he said. The Sevier Power Co.'s proposed plant in Sigurd has been under attack ever since it was proposed. And, even with seven years of public review behind it, the plant continues to be the target of opposition. This morning, a separate citizens group is scheduled to appear before the Utah Supreme Court to argue that county voters deserve an opportunity to determine the plant's fate. On Thursday, the Sierra Club will argue before the high court that the plant license should be revoked because it illegally ignores the pollutants blamed for climate change. Also, Cuminsky will argue that state regulators improperly extended the plant's application deadline. A letter went out last week to raise awareness about health and environmental dangers the fly ash will pose. Groups signing it included Cuminsky's, the Sierra Club, Utah Physicians for a Healthy Environment, Utah Moms for Clean Air, Citizens for Dixie's Future and the National Parks and Conservation Association. The letter, which also went to state health and environmental officials, notes that fly ash, the waste from coal-burning, would be trucked about 35 miles from the proposed coal-fired plant in Sigurd to the 11-acre disposal site off Highway 24. Pollutants in the ash include arsenic, cadmium, zinc, sulfates, lead, mercury and other substances that cause cancer, affect the nervous system or create respiratory illness, the critics say. "We want them to understand the hazards associated with coal ash before green-lighting the dump site," said Jim Kennon, also of Sevier Citizens. "There's no reason to gamble with our health, our water and our economy." Taylor, of the power company, says the criticisms don't reflect the reality. "This would be the cleanest-burning coal plant in the United States," he said. "We are the epitome of clean coal technology, but we haven't been able to turn a shovel."
POWER PLANT UP TO VOTERS Within hours of hearing oral arguments, Utah's Supreme Court ruled Wednesday to place a Sevier County citizens initiative back on November's ballot. That order overturned a mid-September 6th District Court decision to yank it off. Proposition 1 will allow voters to weigh in on a proposed coal-fired power plant to be built near Sigurd. Plans for the 299-acre facility have been progressing through the county's planning process for more than two years and the concept has driven an emotional wedge between opponents and supporters. According to its terse order, the high court's full opinion will come later, "in due course." The complete ruling is expected to address whether SB53, passed by the 2008 Legislature to put some restrictions on local initiatives, is constitutional. "It's quite remarkable," attorney Jeff Owens said of the court's decision to grant his clients' petition for extraordinary relief. For Owens, 30, it was his first time arguing a case before the state Supreme Court. Power plant opponents applauded the news as a victory for democracy. "We're elated," Jim Kennon with Sevier Citizens for Clean Air and Water said in a statement. "It's a good thing we now have the right to vote on something like a power plant that will have a long-term impact on our quiet, peaceful community." The brisk court order stunned attorneys representing the Sevier Power Co. "I'm not only puzzled, I'm surprised," said Fred Finlinson, a Saratoga Springs land-use attorney. "We're looking at our options for a rehearing." At the heart of this case is Sen. Brent Goodfellow's SB53, which sailed through the Legislature with broad support and took effect May 5. The new law prohibits the use of local initiatives to enact or change land-use ordinances. It also prohibits initiative efforts related to a city or county's implementation of land-use laws. In April, the Attorney General's Office said that courts would likely strike down SB53 because it restricts a fundamental right guaranteed by the Utah Constitution. On May 2, a group dubbed the Right To Vote committee submitted more than enough signatures to Sevier County, but Sevier Power's attorneys argued that SB53 nullifies that effort because county officials failed to validate the signatures until June 20. Owens argued that SB53 is overly broad and unconstitutional. Cass Butler, an attorney representing Sevier Power, argued that Article 6 of the state Constitution has limits. What's more, Butler added, Sevier County has already mailed out 175 absentee ballots without Proposition 1. "Perhaps they mailed those ballots out at their own risk," Justice Michael Wilkins responded during Wednesday's hearing. Proposition 1 would amend the county's conditional use ordinance to require a public vote before permits are approved for any coal-fired power plant. Finlinson, pointing to the county's approval of a planned unit development overlay zone in June 2006 - enacted specifically for this facility - said initiative proponents are two years too late and seek to amend the wrong section of the law. "It's a heavy burden to make [the county] change all the ballots for this election," he added.
ENERGY
SHOSHONE TRIBE BREAKS GROUND ON GEOTHERMAL PLANT HONEYVILLE - Shoshone Nation members are turning up the heat in Box Elder County - with a geothermal plant. Tribal leaders from the Northwestern Band of Shoshone Nation broke ground on a 100-megawatt power plant. The power will be sold to the city of Riverside, Calif. It's the first of five geothermal plants planned by a partnership of the Shoshone Nation and investors. Shoshone chairman Bruce Parry says his people once used the region's hot water when they camped in winter. Now, he says, the tribe is back to its original energy source. The first steam plant is planned for a spot near Honeyville, about 25 mile south of the Utah-Idaho border.
WIND POWER: MILFORD LEADS THE WAY The Dutch were on to something when they built windmills to pump water out of the polders. Down in Milford, Utah, too much water has rarely been a problem, but, as in The Netherlands, the weather and terrain in Milford Valley do produce reliable wind, and modern windmills can harness it to generate electricity. That's the basis for the Milford Wind Corridor project, which would generate 300 megawatts of electric power, enough for 247,000 homes. An outfit called FirstWind LLC proposes to spend $400 million to build 159 turbine towers in the valley and transmit the juice to California via a substation built for the Intermountain Power Project. As a source of renewable energy, it's hard to see a down side. The Bureau of Land Management has found no significant environmental impact in its assessment. One might argue that the huge turbines, which are 262 feet tall, are ugly, but compared to the air pollution that coal-fired power plants produce, that strikes us as an excellent trade-off. Of course, wind isn't as reliable as a coal fire, although longtime residents of Beaver County might dispute that point. As it happens, the Milford Valley is one of only two valley wind corridors in the southern Rocky Mountain region that the Department of Energy identified in its atlas of wind energy resources. The valley is a wind tunnel between two large desert basins, so it's just the place for a wind farm. This wind power will find its way to California because that state has passed one of the most ambitious renewable energy standards in the country. It requires electric utilities to increase their supplies from renewable energy resources by at least 1 percent of their retail sales annually, until they reach 20 percent by 2010. We hope that Utah takes similar steps to wean this state from its reliance on coal-fired power. The Legislature has made a start by creating tax credits for producers of renewable energy, and Gov. Jon Huntsman has signed on to the West Governors' Association goal of developing 30,000 megawatts of clean energy by 2015 from traditional and renewable sources. Wind energy must be part of that diversified portfolio.
OBAMA, MCCAIN ON ENERGY: Joe Biden thought he was flaying John McCain's approach to energy development when, during the Oct. 2 vice presidential debate, the Delaware Democrat summed up the GOP policy as "drill, drill, drill." But McCain's running mate, Alaska Gov. Sarah Palin, corrected her opponent. "The chant," she said without a trace of irony, "is 'drill, baby, drill.' " That adaptation of the '60s race-riot slogan, "burn, baby, burn," swept the Republican convention a month earlier. Delegates' shouts seemed determined to resurrect McCain's failed "drill here, drill now" policy he tried to pass off in summer as a solution to high gasoline prices. Now, McCain has intensified his platform, promising to rid the nation of foreign oil, clean up the air, address climate change and ensure Americans have dependable energy sources. So has Democratic presidential nominee Barack Obama - with many similar suggestions. So how do the two contenders stack up on energy? Their differences lie essentially in emphasis, with Obama trying to convince voters that renewable, cleaner energy deserves as much if not more attention as conventional carbon-based choices. "Obviously, our top priority should be to replace our reliance on fossil fuels," he told the Greeley (Colo.) Tribune. The Illinois senator's voting record has been solidly behind this approach. He wants 25 percent of the nation's electricity to come from renewable sources by 2025. He wants to improve energy efficiency by 50 percent by 2030. And he wants to end business as usual with oil companies. In June 2007, Obama voted to remove oil- and gas-exploration subsidies. The same month, he voted to make oil-producing and -exporting cartels illegal. He also backs windfall profit taxes on petroleum companies. McCain, too, vows to push alternative energy, though his record is less clear. His campaign Web site depicts wind turbines, but the policy statements are mostly about helping the nuclear industry build 45 new reactors; McCain sees nuclear energy as a solution to global warming. The Arizona senator has voted against 20 solar or renewable-energy incentive bills. He advocates a market approach and wants renewable energy to go head to head with the wealthy carbon industry. "We need to unleash the competitive forces of the free market to encourage clean alternatives - wind, solar, tide, nuclear and clean coal," McCain said in June. But it wasn't until the renewable-energy tax credits were tacked on to the Oct. 1 financial-bailout bill that McCain finally voted in favor of renewables, as did Obama. The bill includes a one-year production tax credit for wind energy, with an eight-year extension for investment tax credits for solar projects. The market responded immediately to the provisions, with share prices of solar-energy companies shooting up 10 percent. That looked like vindication for Obama's position that the government should have a role in promoting renewable energy. In 2003 and 2005, McCain voted against offshore drilling and against Bush energy bills. Obama backed the Bush 2005 Energy Policy Act, which included a directive to develop oil shale and tar sands. Obama said his yes vote hinged on the renewable-energy provisions in the bill. McCain said the bill was corporate welfare for "Big Oil giveaways." For years, McCain massaged his maverick image by opposing tax cuts for oil companies. This year, he accepted millions of campaign dollars from Bush-backing energy interests, according to the Center for American Progress. While McCain has pocketed more money from oil companies, Obama has received more contributions from Big Oil employees. An August report from OpenSecrets.org shows McCain has scooped up $1.3 million in oil-related contributions to Obama's $394,000. That could be fallout from Obama's push for greater fuel economy in vehicles. Four years ago, Obama said he wanted automakers to increase standard fuel economy to 40 miles per gallon and would require ethanol in the fuel supply. In 2006, he sponsored legislation raising the standard fuel economy 4 percent a year until 2018. In June, he advocated $150 billion to focus on clean-coal technology, further development of plug-in hybrid cars, commercialization of wind and solar power and other measures. In February, Obama sponsored a successful bill that gives a tax credit for installing E85 ethanol pumps at gas stations. McCain has shifted his ethanol position at least twice. In 2003, he declared ethanol wouldn't boost energy independence. During an Iowa campaign appearance in 2006, he called ethanol "a vital alternative energy source." This year, he reverted to anti-ethanol. The Democratic and Republican nominees do sometimes agree. Neither wants to drill for oil in the Arctic National Wildlife Refuge. Both want to curb industrial emissions. Both want to auction pollution rights in a cap-and-trade system. Both would further investigate "clean-coal" technologies. Neither has taken a position on oil shale, a crucial question for Utahns, though both voted to end the shale-exploration moratorium when they answered "aye" to the $700 billion financial-bailout bill.
KEEP DRIVING TOWARD FUEL FREEDOM During the last few weeks of congressional activity addressing the financial markets crisis, the crucial debate over drilling and energy exploration both offshore and in Western states like Utah has been momentarily forgotten. Prior to the financial crisis, the U.S. House passed an energy bill, which then stalled in the Senate. Energy issues have since been overshadowed by more immediate national needs, but will return. While the bill passed by the House is seriously flawed, Rep. Jim Matheson deserves praise for adding an amendment that would open federal lands in Utah to responsible oil shale development. Utah's congressional delegation has been united on working toward a solid U.S. energy future, while at times disagreeing on some particulars. The American people — up to 80 percent — strongly support greater development of domestic energy resources. With gasoline prices bound to remain high, voters recognize the need to loosen the stranglehold of foreign oil by developing our own nation's resources in environmentally sound ways. The two biggest flaws in the bill passed by the House are billions in new taxes on offshore energy producers, and the minimum 50-mile offshore limit — far beyond coastal horizons — that restricts drilling where the most viable reserves are located. This pending measure grants small increases in offshore exploration and drilling, while tagging on excessive "no drill zones" and new taxes on offshore oil/energy producers. It is as if some in Congress are saying, "We'll allow you to drill offshore, but not where there is any oil or gas, and we'll tax and fee away any financial incentives to drill." The agenda for some appears to be the near-term elimination of fossil fuels — such as Utah's oil and oil shale, coal and natural gas. Things have changed temporarily since the bill passed the House, partly due to public pressure. The moratoria on offshore drilling and oil shale leases on federal lands were allowed to expire. The bailout package did hike some oil taxes, but not to the extreme levels some would like to see. Both issues will be back on the table after the November elections. We are calling upon Utah's delegation, especially our senators, to continue to fight for low energy taxes and responsible energy development in Utah. Imposition of new energy taxes leads to a simple question: Who do you suppose will really pay them? Every consumer knows who will pay, and it's not the energy companies. If you wish to reduce the supply of a good or service, tax it excessively. Such taxes will mean lost jobs, less available energy and higher prices. It makes no sense to single out domestic energy producers for punitive treatment. Every gallon of fuel produced domestically means one less gallon imported from abroad. As to developing oil shale here in Utah, false rhetoric from environmental extremes abounds. The latest oil shale technologies greatly reduce water usage and carbon emissions over older technologies. Today's oil shale technologies are superior to the much-heralded corn ethanol processes on both counts, and are improving. Sen. Orrin Hatch has worked especially hard for oil shale development and its potential vast economic benefits for America and Utah. Oil shale deposits here in the Intermountain West contain approximately 1.2 trillion to 2 trillion barrels of oil equivalent — nearly eight times current Saudi reserves. Much has been said in this election season about renewable energy sources. While wind and solar are needed, the notion that they will somehow "solve" our near-term energy problems without expanded production of domestic oil, gas and coal is unrealistic. Together they only provide around 2 percent of our current energy. Projections are that global energy demand will increase at least 50 precent by 2030. Skyrocketing worldwide demand means our energy future will be much more challenging. We are already facing the possibility of "rolling electricity blackouts" here in the West by 2009. We applaud urgent efforts to develop renewable energy for tomorrow, while insuring America's energy future and Utah's economic prosperity by exploring and producing all possible energy sources today. Our associations and all our member companies call upon Sens. Hatch and Bob Bennett, along with our congressmen, to continue their vigilant efforts on these issues.
BLM CLEARS WAY FOR MILFORD WIND CORRIDOR MILFORD - The federal Bureau of Land Management issued a permit Monday giving a Massachusetts company permission to build 159 power turbines 10 miles northeast of Milford. As for the project's environmental impact, the BLM said it had received a "finding of no significance," clearing the way for the project's construction, which is expected to start next month. The Milford wind corridor project would generate 300 megawatts of electric power, which will be transmitted to Southern California and is enough for 247,000 homes. Plans for First Wind's 262-foot-tall structures set on 40 acres elicited no negative comments from area residents, according to the bureau.
NRC POSTPONES DECISION ON ITALIAN Nuclear waste from Italy won't be rolling into Utah anytime soon. The Nuclear Regulatory Commission said Monday it is postponing a decision on whether low-level radioactive waste from Italy can be buried in Tooele County. In order to grant a license, federal regulators must be sure that the waste has somewhere suitable to go, and they won't have that assurance unless a federal court ruling clears the way, the NRC said. A court decision is not expected for more than a year. Bill Sinclair, deputy director of environmental quality for Utah, said the NRC's delay has the effect of upholding the power of the eight-state "Northwest Compact" to block Salt Lake City-based EnergySolutions from disposing of foreign waste at its mile-square disposal site in western Utah. "That's important," said Sinclair, deputy director of environmental quality for the state and Utah's representative on the Northwest Compact governing committee. The Italian waste question has transformed over the past year into a larger debate over who oversees low-level nuclear waste in the United States, where EnergySolutions has taken all but a small percentage of the nation's low-level waste for years. EnergySolutions requested a federal judge's ruling last spring. The company says the Northwest Compact's authority does not extend to the Utah disposal site, because it is privately owned and operated, free to do international business. But the state and the compact say Congress set up the regional waste program to control the flow of all low-level radioactive material in and out of the eight-state region. Under a contract that has been in effect since 1991, the compact has permitted EnergySolutions to operate a low-level waste site within compact boundaries, but foreign waste is not specifically allowed. Jill Sigal, EnergySolutions' senior vice president for government relations, called the postponement "very reasonable." "You can't read into it one way or the other quite frankly," she said. "We maintain our view that our license application meets the requirements for the NRC to grant the license." More than a year ago, EnergySolutions asked NRC for a license to import 20,000 tons of low-level waste from Italy, process most of it in Tennessee and then haul 1,600 tons of waste to Utah for disposal. Italy, which began dismantling its nuclear reactors two decades ago, has no low-level waste disposal of its own. Congress also has stepped into the fray. Democratic Reps. Jim Matheson of Utah and Bart Gordon of Tennessee have introduced legislation to ban most foreign waste. "What we have is a company asking to dump foreign waste in this country, even though there's no state willing to take it, " said Matheson, "and it's created a policy vacuum that leaves us vulnerable to becoming the world's nuclear garbage dump." Matheson said the delay will give the bill's supporters time to get the import ban signed into law. The NRC said in its order Monday that it would await the court ruling unless the company finds some other way to dispose of the foreign waste. The delay means NRC will not decide whether the state of Utah and anti-nuclear groups can have a formal hearing on the matter. The NRC fielded more than 2,900 mostly negative comments on the license request.
GREEN GROUP: BLM IGNORED LAWS WASHINGTON - The Bureau of Land Management is running roughshod over federal laws to push out oil shale development without a chance for public comment, The Wilderness Society charged Tuesday. The Washington-based environmental group alleged in a letter that the BLM ignored federal law to expedite commercial development of oil shale without allowing the public a chance to object to land management plans in Utah, Colorado and Wyoming. Twelve plans are being amended to address oil shale production on federal lands in the West, though the plans do not deal with leasing the lands for extraction. Nada Culver, senior counsel for The Wilderness Society's BLM Action Center, said the BLM violated federal law by denying the public their "basic right to protest" the plans. "This administration willingly sacrificed good governance in favor of using their last days in office to fork more public lands over to the oil and gas industry," Culver said. The environmental group said that when draft land management amendments were released earlier this year they brought in some 105,000 comments in a 120-day period. But the 12 amendments - which the group says are being fast-tracked to move forward on oil shale development - did not adjust any of the amendments after the comments. The BLM doesn't dispute that it passed over a protest period on amending the land management plans to address oil shale, but maintains there will be plenty of time for the public to weigh in on proposed oil shale leases. Utah BLM spokeswoman Megan Crandall says the Interior Department approved the land management plan amendments without a protest period because of a congressionally mandated timeframe in the 2005 Energy Policy Act. But, she adds, "the main issue here is that even though they approved it without the BLM protest period, it's important to recognize that before any leasing of land for oil shale is even done, there will be additional [National Environmental Policy Act] analysis." She says at that stage there will be "ample opportunity" for public input. Congress had barred the BLM from finalizing rules on leasing federal lands for oil shale extraction in previous years, but did not renew the ban this fiscal year. That development opens the possibility of leasing federal lands for oil shale extraction, though that is expected to take a long time. Supporters say oil shale represents a vast domestic reserve of energy. Oil shale is actually sedimentary rock that when heated produces a chemical mixture known as kerogen that can be processed into a synthetic oil for use in jet or diesel fuels. Environmental groups say the technology is lacking for full-scale commercial production of oil shale.
EPA AIMS TO GET THE LEAD OUT - OF THE AIR WASHINGTON - Three decades after removing lead from gasoline, the Environmental Protection Agency is slashing the amount of the toxic metal that will be allowed in the nation's air by 90 percent. EPA officials, under a federal court order to set a new standard by midnight Wednesday, said the limit would better protect public health, especially for children, who could inhale lead particles released from smelters, mines and waste incinerators and ingest it after it settles on surfaces. Exposure to even low levels of lead early in life can affect learning, I.Q. and memory in children. Lead can cause cardiovascular, blood pressure and kidney problems in adults. ''Our nation's air is cleaner today than just a generation ago, and last night I built upon this progress by signing the strongest air quality standards for lead in our nation's history,'' the EPA chief, Stephen Johnson, said Thursday. ''Thanks to this stronger standard, EPA will protect my children from remaining sources of airborne lead.'' The new limit, 0.15 micrograms per cubic meter, is the first update since 1978, when the government helped phase out leaded gasoline. It is 10 times lower than the old standard, 1.5 micrograms per cubic meter. The EPA estimates that 18 counties in a dozen states will violate the new standard. That means state and local governments must find ways to further reduce lead emissions. The new limit is in the lower end of a range recommended in May by the agency's independent scientific advisory panel. By contrast, the Bush administration did not follow its own staff's advice or its science advisers when it set health standards for smog and soot that were less stringent than recommendations. The EPA also said it would require lead to be measured in 101 cities and near sources that release at least 1 ton of lead per year. A representative for the Association of Battery Recyclers said the new standard would be difficult to meet. Several members of the group, which represents 14 facilities that recycle lead from car batteries, met two weeks ago with White House and EPA officials to seek a less stringent standard. ''We have put in the best controls and we are going to still have compliance problems,'' said Robert Steinwurtzel, a lawyer for the group. Environmentalists hailed the move but said the agency could have done more to monitor emissions and ensure the standard is met. The EPA said the cost of the reductions would be from $150 million to $2.8 billion, but the standard would produce economic benefits of $3.7 billion to $6.9 billion. In calculating the benefits, the agency assumed that children would be smarter and earn more money as a result of less lead in the air.
UTAH SAYS IT WILL RESUME LEAD CHECKS Monitoring for lead in Utah stopped in 2005 after results over several years showed levels about 1/20th of the old national standard, said Bryce Bird of the Utah Division of Air Quality. "We'll need to start monitoring again," he said. Although lead levels in Salt Lake City and Ogden will be checked because of their large populations, he added. They are expected to fall at about half the maximum allowed under the tougher, new standard. The Kennecott Utah copper smelter and exhaust from old, private aircraft are responsible for the largest share of lead in Utah's air, Bird said.
UTAH RIVERS COUNCIL CRITICIZES BLM PLANS Rivers that should have been recognized with special status for their wild and scenic qualities have been spurned in long-term plans for federal lands in Utah, the Utah Rivers Council alleged this week. The U.S. Bureau of Land Management identified about 1,000 miles of river that could have qualified, but kept only 314 segments on the Green, Colorado, Dolores and San Juan rivers and the Fremont Gorge in final plans for six separate regions in southern Utah. Rivers Council spokesman Mark Danenhauer questioned the integrity of the BLM, saying the agency didn't document its decisions properly nor provide explanations on how it decided which river segments were suitable for federal wild and scenic designation. BLM Utah official Don Banks defended the agency, saying it followed all guidelines and policies required in the wild and scenic river review. The Utah Rivers Council plans to protest the BLM action as the agency prepares to finalize six resource-management plans for the Price, Richfield, Moab, Kanab, Vernal and Monticello regions.
European Union leaders agreed to stick to ambitious plans to cut greenhouse gas emissions 20 percent ty 2020, but divisions oer how to share out the cuts were widened y ears about the effect of the financial crisis. Italian Prime Minister Silvio Berlusconi threatened to veto the plan unless changes were made to lessen the burden on Italian industry. "Our companies are in no state to take on costs like those we thought about last year," he told reporters. The leaders of eight eastern European countries said the E.U. must balance the drive to reduce carbon emis- Despite those concerns, French President Nicolas Sarkozy said all the leaders agreed to work to find a final agreement on the package before the end of the year. "The [credit] crisis should not lower our ambitions," Sarkozy said. "No one said that they wanted to renounce the objectives." The plan would cost governments and business billions of dollars to implement new technologies, develop renewable energy sources and reduce emissions from cars and factories. Berlusconi said that was unfair because competitions in China and the United Sates would not have to face such a burden. The leaders of Poland, Hungary, Romania, Bulgaria, Slovakia, Latvia, Lithuania and Estonia took a similar stand, saying their countries had already made great cuts in carbon emissions since emerging from communism in the late 19l80s and that "should be recognized" now.
SEPTEMBER TALLY OF JOB LOSSES, 159K, WASHINGTON - Jobs are vanishing at the fastest pace in more than five years with pink slips likely to keep stacking higher in the months ahead, an urgent signal the country may be careening toward a deep and painful recession just as Americans prepare to elect a new president. Whether that's Democrat Barack Obama or Republican John McCain, one of them will be dealing with the weakest employment climate in years. Increasingly skittish employers dropped the ax even harder in September, chopping payrolls by 159,000 - more than double the cuts made just one month before. It was the ninth straight month of job losses. A staggering 760,000 jobs have disappeared so far this year. The Labor Department's report, released Friday, also showed that the nation's unemployment rate was 6.1 percent, up sharply from 4.7 percent a year ago. Over the last year, the number of unemployed people has risen by 2.2 million to 9.5 million. "Washington, the labor market has a problem," said Joel Naroff, president of Naroff Economic Advisors. "Firms are hunkering down and running as lean as possible. . . . We are likely to see more months of job losses before conditions turn around." The unemployment rate for blacks shot up to 11.4 percent, the highest since late 2003. Even with Congress' unprecedented $700 billion financial bailout, the faltering economy and the jobs market probably will get worse. Many believe the economy will jolt into reverse later this year - if it hasn't already- and will stay sickly well into next year. The unemployment rate could hit 7 or 7.5 percent by late 2009. If that happens, it would mark the highest since after the 1990-91 recession. Some economists say the jobless rate could rise even more before the situation improves. Pressure is growing on Federal Reserve Chairman Ben Bernanke to do an about-face and lower a key interest rate in a bid to revive the economy. Many now think that will happen at the Fed's next meeting on Oct. 28-29 or even earlier. The hope riding on such a move would be to spur nervous consumers and businesses to spend more freely again. They've clamped down as housing, credit and financial problems intensified last month, throwing Wall Street into chaos. On Wall Street, the Dow Jones industrials slid 157.47 points after relief over the bailout plan's passage gave way to worries about the economy. Friday's employment snapshot is the last before America goes to the polls in November. Mounting job losses, shrinking paychecks, shriveling nest eggs and rising foreclosures all have weighed heavily on American voters. The economy is their No. 1 concern. An Associated Press-GfK poll earlier this week showed that likely voters now back Obama 48 percent to McCain's 41 percent. They believe Obama is better suited to lead the country through the financial turbulence. "I will rebuild the middle class and create millions of new jobs by investing in infrastructure and renewable energy," vowed Obama. McCain pledged to "open markets around the globe for our products, cut taxes and expand domestic production of energy ... I will create jobs and get the economy on the right track." White House spokesman Tony Fratto called the latest employment figures disappointing "but not unexpected given the shocks to the economy." The 159,000 tally of total job losses - government and private payrolls - was the most since March 2003, when the labor market was still struggling to get back on its feet after being knocked down by the 2001 recession. The picture was even darker for private employers. They cut 168,000 jobs last month, the 10th month of such losses. The pink slips were widespread. Manufacturers (especially auto makers), home builders, retailers, securities and investment firms, hotels and motels, accountants and bookkeepers, architects and engineers, and legal services all cut back. So did temporary help firms - usually a barometer of future hiring. That overwhelmed employment gains by the government, in education, health care and elsewhere. Cost-cutting employers are getting rid of workers as companies chafe under all the economy's problems. Companies announcing layoffs in September included Hanesbrands Inc., Hewlett-Packard Co., Schering-Plough Corp., Alaska Airlines and Alcoa Inc. Spooked consumers and businesses have pulled back so much that some analysts fear the economy could stall out - or even worse - shrink in the July-to-September quarter. Many predict the economy will contract in both the final quarter of this year and the first quarter of next year, meeting the classic definition of a recession. "The economy was on the way down even before the latest tightening in the credit crunch," said Nigel Gault, economist at Global Insight. Wage growth for workers is slowing, meaning they'll be more hard-pressed to spend and help the ailing economy. Average hourly earnings rose to $18.17 in September, a 0.2 percent increase. That was half the pace logged in the previous month. Over the past year, wages have grown 3.4 percent, but paychecks aren't stretching as far because of high food and energy prices. Strains on Americans were sorely evident. The number of consumer bankruptcy filings rose about 29 percent in September from a year ago, the American Bankruptcy Institute reported Friday. The financial crisis that intensified in September is forcing a seismic shake-up on Wall Street. Lehman Brothers, the country's fourth-largest investment bank, filed for bankruptcy protection. A weakened Merrill Lynch, deciding it couldn't go it alone anymore, found help in the arms of Bank of America. AIG was thrown a financial lifeline. And, the last two investment houses - Goldman Sachs and Morgan Stanley - decided to convert themselves into commercial banks to better weather the financial storms. The number of banks that have failed this year are up sharply from last year. On Friday, Wachovia Corp. said it will be acquired by Wells Fargo & Co. wiping out Wachovia's previous plan to sell its banking operations to rival suitor Citigroup Inc.
HOUSE APPROVES $700B WALL WASHINGTON -- With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush, who quickly signed it. ''We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the vote, although he conceded, ''our economy continues to face serious challenges." Underscoring that somber warning, the Dow Jones industrials, up more than 200 points at the time of the House vote, had fallen into negative territory an hour later. They fluctuated as the afternoon wore on. The final vote, 263-171 in the House, capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act. There were 58 more votes for the measure than an earlier version that failed on Monday. ''We all know that we are in the midst of a financial crisis," House Republican leader John Boehner of Ohio said shortly before casting his vote for a massive government intervention in private capital markets that was unthinkable only a month ago. ''And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen," he said. House Speaker Nancy Pelosi, D-Calif., said the bill was needed to ''begin to shape the financial stability of our country and the economic security of our people." Treasury Secretary Henry Paulson pledged to begin using his new authority quickly, and Federal Reserve Chairman Ben Bernanke said the central bank would work closely with the administration. Wall Street welcomed the action, but investors also were buffeted by a bad report on the job market. The Labor Department said employers slashed 159,000 jobs in September, the largest cut in five years and further evidence of a sinking economy. At its core, the bill gives the Treasury Department $700 billion to purchase bad mortage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit in the U.S. economy has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand, and adversely affecting consumers seeking financing for mortgages, cars and student loans. Some state governments have also experienced difficulty borrowing money. The House vote marked a sharp change from Monday, when an earlier measure was sent down to defeat, largely at the hands of angry conservative Republicans. On Friday, 91 Republicans joined 172 Democrats to support the bill, while 108 Republicans and 68 Democrats opposed it. Twenty-five Republicans and 33 Democrats switched their votes from ''no" to ''yes." One Democrat who supported Monday's version, Rep. Jim McDermott of Washington, opposed the bill Friday. One Republican who didn't vote Monday, Rep. Jerry Weller of Illinois, voted ''yes" on Friday. Several of the Democrats who switched were members of the Congressional Black Caucus who said presidential candidate Barack Obama had pledged to support legislation easing the burden on consumers if he wins the White House. Republican presidential candidate John McCain also lobbied for the measure, according to aides who declined to release a list of lawmakers he called. Following Monday's vote, Senate leaders quickly took custody of the measure, adding on $110 billion in tax and spending provisions designed to attract additional support, then grafting on legislation mandating broader mental health coverage in the insurance industry. The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the major party presidential candidates and outside groups joined forces behind the measure. In addition, the measure was changed to broaden the federal government's deposit insurance program, and the Securities and Exchange Commission loosened a regulation to ease the impact of the distressed assets on the balance sheet of financial institutions. Despite occasionally strong criticism of the added spending and tax measures, the maneuvers worked - augmented by a sudden switch in public opinion that occurred after the stock market took its largest-ever one-day dive on Monday. ''No matter what we do or what we pass, there are still tough times out there. People are mad - I'm mad," said Republican Rep. J. Gresham Barrett of South Carolina, who opposed the measure the first time it came to a vote. Now, he said, ''We have to act. We have to act now." Rep. John Lewis, D-Ga., another convert, said, ''I have decided that the cost of doing nothing is greater than the cost of doing something." Critics were unrelenting. ''How can we have capitalism on the way up and socialism on the way down," said Rep. Jeb Hensarling of Texas, a leader among conservative Republicans who oppose the central thrust of the legislation - an unprecedented federal intervention into the private capital markets. It was little more than two weeks ago that Paulson and Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential. White the main thrust of their initial proposal was unchanged, lawmakers insisting on greater congressional supervision over the $700 billion, measures to protect taxpayers and steps to crack down on so-called ''golden parachutes" that go to corporate executives whose companies fail. Earlier in the week, the legislation was altered to expand the federal insurance program for individual bank deposits, and the Securities and Exchange Commission took steps to ease the impact of the questionable mortgage-backed securities on financial institutions. In the moments before the vote, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, pledged ''serious surgery" next year to address the underlying causes of the crisis. If anything, the economic news added to the sense of urgency. The Labor Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. The news of the payroll cuts came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 percent. Typifying arguments the problem no longer is just a Wall Street issue but also one for Main Street, lawmakers from California and Florida said their state governments were beginning to experience trouble borrowing funds for their own operations. Pelosi said, ''We must win it for Mr. and Mrs. Jones on Main Street." One month before Election Day, the drama unfolded in an intensely political atmosphere. Members of the Congressional Black Caucus credited Obama with changing their minds. Reps. Elijah Cummings and Donna Edwards, both Maryland Democrats, were among them. They said Obama had pledged if he wins the White House that he would help homeowners facing foreclosure on their mortgages. He also pledged to support changes in the bankruptcy law to make it less burdensome on consumers. Obama's rival, Republican Sen. McCain, announced a brief suspension in his campaign more than a week ago to try and help solve the financial crisis. Republican Rep. Sue Myrick of North Carolina, who switched her vote to favor the measure, said, ''I may lose this race over this vote, but that's OK with me. This is the right vote for the country." Myrick said she hadn't heard from McCain as she made up her mind about how to vote. ''They told me he was going to call me. He didn't," she said. The vote on Monday had staggered the congressional leadership and contributed to the largest one-day stock market drop in history, 778 points as measured by the Dow Jones Industrials.
BANK FAILURES MAY RISE IN '09 SAN FRANCISCO -- Here's a safe bet for uncertain times: A lot of banks won't survive the next year of upheaval despite the U.S. government's $700 billion plan to restore order to the financial industry. The biggest question is how many will perish and how they will be put out of their misery -- in outright closures by regulators scrambling to preserve the dwindling deposit insurance fund or in fire sales made under government pressure. Enfeebled by huge losses on risky home loans, the banking industry is now on the shakiest ground since the early 1990s, when more than 800 federally insured institutions failed in a three-year period. That was during the clean-up phase of a decade-long savings-and-loan meltdown that wound up costing U.S. taxpayers $170 billion to $205 billion, after adjusting for inflation. The government's commitment to spend up to $700 billion buying bad debts from ailing banks is likely to save some institutions that would have otherwise died, but analysts doubt it will be enough to avert a major shakeout. "It will help, but it's not going to be the saving grace" because a lot of banks are holding construction loans and other types of deteriorating assets that the government won't take off their books, predicted Stanford Financial analyst Jaret Seiberg. He expects more than 100 banks nationwide to fail next year. The darkening clouds already have some depositors pondering a question that always seems to crop up in financial panics despite deposit insurance: Could it possibly make more sense to stash cash in a mattress than in a bank account? "It sounds like a joke," said business owner Mauricoa Quintero as he recently paused outside a Wachovia Bank branch in Miami. "But it sounds safer than the turmoil out there right now." Not as many banks are likely to fail as in the S&L crisis, largely because there are about 8,000 fewer today than there were in 1988. But that doesn't necessarily mean the problems won't be as costly or as unnerving; banks are much larger than they were 20 years ago, thanks to laws passed in the 1990s. "I don't see why things will be that much different this time," said Joseph Mason, an economist who worked for the U.S. Treasury Department in the 1990s and is now a finance professor at Louisiana State University. "We just had a big party where people and businesses overborrowed. We had a bubble and now we want to get back to normal. Is it going to be painless? No." With more super-sized banks in business, fewer failures could still dump a big bill on the Federal Deposit Insurance Corp., the government agency that insures bank and S&L deposits. The FDIC's potential liability is rising under a provision of the bailout that increases the deposit insurance limit to $250,000 per account, up from $100,000. Using statistics from the S&L crisis as a guide, Mason estimates total deposits in banks that fail during the current crisis at $1.1 trillion. After calculating gains from selling deposits and some of the assets of the failed banks, Mason estimates the clean-up this time will cost the FDIC $140 billion to $200 billion. The FDIC's fund currently has about $45 billion -- a five-year low -- but the agency can make up for any shortfalls by borrowing from the U.S. Treasury and eventually repaying the money by raising the premiums that it charges the remaining banks and S&Ls. Through the first nine months of the year, 13 banks and S&Ls have been taken over by the FDIC -- more than the previous five years combined. The FDIC may be underestimating, or at least not publicly acknowledging, the trouble ahead. As of June 30, the FDIC had 117 insured banks and S&Ls on its problem list. That represented about 1 percent of the nearly 8,500 institutions insured as of June 30. Entering 1991, about 10 percent of the industry -- 1,496 institutions -- was on the FDIC's endangered list. Although the FDIC doesn't name the institutions it classifies as problems, this year's June 30 list didn't include two huge headaches -- Washington Mutual Bank and Wachovia. Combined, WaMu and Wachovia had more than $1 trillion in assets; the assets of the 117 institutions on the FDIC's watch list totaled $78 billion. Late last month, WaMu became the largest bank failure in U.S. history, with $307 billion in assets, nearly five times more, on an inflation-adjusted basis, than the previous record collapse of Continental Illinois National Bank in 1984
PLATINUM GETS DENTED IN THE Platinum is losing its glamour. At Friday's lows, spot-month futures on the New York Mercantile Exchange were down 38% on the year and 59% from the record set in March as the global economic slowdown pinches industrial use. Platinum could fall further on weakness in the auto sector, but then stabilize or rise modestly as investment liquidation runs its course and due to potential for output cuts as the price approaches the cost of mining, analysts said. The impetus for the early year peak was worries about tight supplies exacerbated when South Africa state-owned utility Eskom Holdings Ltd. announced electrical shortages that curtailed mining output. "Supply was being outpaced by demand," said Bart Melek, global commodity strategist with BMO Capital Markets. "We had a massive rally way above the marginal cost of production." Since then, the auto industry has slumped. This hurt platinum demand because its main industrial use is for catalytic converters. Nearby October platinum Friday fell $22.60, or 2.3%, to settle at $957 a troy ounce. Most-active January lost $20.80, or 2.1%, to $965.80. James Moore, an analyst with TheBullionDesk.com, said platinum's recent move is cyclical, reflecting changed fundamentals. Moreover, he said, the fundamentals perhaps were "overexaggerated" as prices soared at the start of the year. But he doesn't look for the recent slide to continue muchlonger because a "delicate balance" remains in the market. "Eskom has already said they can't increase their energy capacity for at least another five years," Mr. Moore said. "The producers are struggling against rising costs and having to excavate metal from much deeper ore bodies. This has a massive impact on their bottom line." If profitability suffers, downward price corrections such as the current one could prompt producers to shut down some of their operations, he said. "In my view, it would be naive to think that the market is going to continue lower," Mr. Mbore said. "We may see some further downside initially, but then look for it to possibly stabilize around $1,000 to $1,300 for the latter part of the year and heading toward next year." BMO's Mr. Melek estimated that the cash costs of production for platinum-mining operations are between $700 and $1,000 an ounce. "They might still go lower," he said of platinum prices. "But they ultimately will have to rebound because we're hitting the marginal cost of production for many producers." CPM Group analyst Carlos Sanchez also said there could be more selling pressure, but prices may soon stabilize. Not only has platinum been hurt by concerns about reduced motor vehicle production, but expectations are for a shift toward smaller vehicles at a time of high fuel prices. Smaller engines require less platinum group metals for auto catalysts, Mr. Sanchez said. Meanwhile, no further supply disruptions have occurred in South Africa lately, he said. But at the same time, he said, many investors already may have sold some positions. You may go to $900," Mr. Sanchez said. "But they're already low compared to what they have been the last couple of years. So you may not have further selling."
FINANCIAL CHAOS COULD GIVE BIRTH TO GLOBAL RECESSION PARIS - European governments pledged Monday to safeguard bank deposits in a bid to stem financial panic, but they stopped short of a coordinated strategy to break the grip of a credit crisis that threatens to set off a protracted recession across the continent, sending markets tumbling on both sides of the Atlantic. The lack of orchestration - despite pledges to the contrary from European Union officials on Monday and a plea from the head of the International Monetary Fund to step forward with concrete plans - raised the prospect that the European Central Bank would need to help mop up the mess by cutting interest rates. The crisis that began in the United States has rapidly spun out of control in Europe, with television footage of ministers rushing to bail out some of the largest banks and a succession of meetings in Paris over the weekend feeding a climate of fear that has dried up the flow of credit just as some economies head for recession. With Europe showing few signs of developing a coordinated response to the crisis, there is very little on the horizon to calm rattled investors and a growing belief that the crisis could tip the world into a global recession. With European stocks being hammered - the FTSE index of British stocks down 7.9 percent, the DAX index of German stocks down 7.1 percent and the CAC index of French stocks down 9.0 percent - finance ministers gathered ahead of a meeting in Luxembourg on Monday to address the crisis and discuss sharply increasing the level of deposit insurance across all 27 European Union member states. But other bold Europe-wide approaches to the crisis have not yet emerged. Earlier Monday, Germany ruled out contributing money to a pan-European effort, even as officials said they were considering a broad package to shield the nation's banks. Authorities in Austria moved to match Germany's decision on Sunday to guarantee bank deposits, and Spain pledged to follow suit. Denmark went further, announcing it would also guarantee loans that banks make to one another overnight as banks continue to recoil from doing business among themselves. Farther away, Iceland, one of the world's hardest-hit countries from the credit turmoil, fell deeper into crisis as the government halted trading in all financial stocks after the banking sector neared collapse.
SLOWING EXPORT MACHINE IS Export growth is expected to fall sharply in coming months, dimming what had been one of the few bright spots for a sputtering U.S. economy. Many U.S. producers are already seeing a slump in new orders and growing hesitation on the part of foreign buyers to move forward on previously negotiated deals. The outlook has dimmed so quickly that economists are having a hard time keeping their projections current. Global Insight, an economic forecasting and consulting firm, announced on Friday that it was nearly halving its projection for fourth-quarter real export growth to 0.73% from 1.34%. "But what we've seen in the last few days suggests we'll see even more trade deterioration," said Paul Bingham, the group's trade economist. Mr. Bingham said a global recession is now all but certain, which will take a bite out of all types of trade. Much of this year's export boom was driven by surging prices for commodities such as iron ore and soybeans, fueled in part by a wave of infrastructure spending world-wide by countries rushing to expand rail networks, mines and power plants. This benefited U.S. producers of mining machines, cranes, tractors and conveyor belts. U.S. coal exports surged, as did shipments of diesel engines, computers and scrap metal. The events of recent weeks have pushed down commodity prices and raised doubts about the future strength of these markets. Exporters are also getting burned by slumping U.S. consumer spending. A slice of U.S. exports feeds a circular dynamic in global trade, with foreigners snapping up U.S.-made machines, chemicals and parts to make products that are ultimately sold in U.S. stores. Consider guitar strings. D'Addario & Co., based in Farmingdale, N.Y., is a major producer, selling strings both in retail stores across the U.S. and overseas, as well as to factories, mostly in Asia, which make guitars sold by U.S. retailers. James D'Addario, the company's chief executive, said string exports to Asian factories surged 40% earlier this year, in part, he believes, to ramp up for the Christmas season, which had been expected to be strong for guitars. A big part of that demand is due to the latest version of the Guitar Hero videogame. But as U.S. consumers, nervous about their jobs and savings accounts, slash spending, the chances of strong holiday sales have dimmed. "I'm expecting there'll be warehouses full of guitars at the end of this year," said Mr. D'Addario. Paul Block is also concerned about sales. His company, Galkin Automated Products Corp. in West Babylon, N.Y., makes machines that produce mattresses. He said some people are still buying, but mostly those who see this as an opportunity to press for better prices. "There are people all over the world who know how to wheel and deal," he said. The upshot is that exports will no longer serve as the counterweight to weakness in the domestic economy. Over the past year, real goods exports surged by $114 billion, or 12%, up across every major category. They now make up nearly 13.5% of gross domestic product, the highest percentage since World War II. "Export-oriented manufacturers are going from being a real source of growth to just barely hanging on," said Mark Zandi, chief economist at Moody's Economy.com, an economic research and consulting firm in West Chester, Pa., adding that each day the credit markets remain in serious distress increases chances that the outlook for exporters will darken even further. Cyril Bath Co. is among those already seeing trouble signs. The Monroe, N.C., maker of aerospace parts and machinery estimates that incoming orders have fallen 25% in the last month. It saw sales nearly double last year to $23 million, for instance, with exports accounting for all the growth. Michael Zimmer, Cyril Bath's CEO, said overseas customers are delaying orders, and he worries that the trend could accelerate if the global turmoil continues unabated.
BORROWING DROPS FOR FIRST TIME SINCE '96 WASHINGTON - Consumer borrowing fell in August for the first time in more than a decade as households, battered by rising job layoffs and the decaying economy, cut back sharply on their use of credit. The Federal Reserve said Tuesday that consumer borrowing fell at an annual rate of 3.7 percent in August, before the financial crisis became acute in September, forcing the government to approve a $700 billion rescue of the financial industry. August's decline in consumer credit marked the first time that total borrowing had fallen since a 4.3 percent rate of decline in January 1998. The weakness reflected a big decline of 5.4 percent at an annual rate in the category that includes auto loans and a 0.8 percent rate of decline in the category that includes credit cards. The 3.7 percent rate of decline for overall borrowing followed a 2.4 percent rate of increase in borrowing in July. Consumer borrowing, which the Fed defines as all loans not secured by real estate, totaled $2.58 trillion at an annual rate in August, down by $7.88 billion from the July level. That was a much weaker performance than the $5.25 billion increase in borrowing that economists had been expecting. The economy is being battered at the moment by rising job layoffs, a prolonged housing slump and the most severe credit squeeze in decades as banks cut back on their lending in the face of record defaults for home mortgages.
AS THE U.S. ECONOMY FALTERS, WHITHER CHINA? The U.S. economy faces a massive economic downturn, with job losses on both Wall Street and Main Street, tightening credit availability and large increases in public debt. The U.S. economy is not undergoing a mere recession but a basic restructuring, as finance is transformed from a high-profit industry to a more constrained, sobered sector. Those watching China's rise to modernity wonder what will be the effects of the U.S. economic slowdown and reconfiguration on China's real economy? Although China's financial sector is greatly underdeveloped, growth in its real economy, driven by manufacturing, has boomed over the past couple of decades. Manufacturing growth has been spurred by increasing demand for inexpensive goods in the United States, Europe and Japan. The range of goods produced in China is wide, from steel beams and plant machinery to toys, MP3 players and sporting goods. The United States alone has accounted for around a third of China's exports in the past few years. But with an increasing unemployment rate, dampening consumer and business credit and declining growth, the United States may not be able to sustain its demand for goods from China. Add tightening labor regulations as well as inflation, and China is looking at a large potential manufacturing decline for the next several years. Some argue that increasing domestic demand in China will make up for a slowdown in U.S. demand. But half of China's $600 billion GDP - $300 billion - is the amount the United States has been pumping into China's economy in the past couple of years. Domestic spending is currently around a third of GDP at about $200 billion. This means that, should China's economy continue to be based on manufacturing, it will have to change what it manufactures to fit the needs of Chinese consumers, without losing jobs. Second, Chinese citizens will have to change their degree of consumption, saving much less in order to consume more goods. All things being equal, this would dampen future growth. And finally, China would have to drastically reduce the number of people living in poverty in rural areas in order to maintain growth into the future. Each one of these conditions would constitute a major change in the Chinese economy. The most likely scenario is that China's rapid pace of growth will be arrested as the U.S. economy is transformed. China will have to be nimble in order to adjust to dwindling overseas demand, changing its very economic core. Underlying all of this is the fact that U.S. economic woes signal not just a short-term crisis of confidence, but a long-term structural change. Its trading partners will need to adapt accordingly.
CHINA'S ECONOMY FEELS CHILL SHANGHAI, China (AP) -- The laid-off factory workers and slumping car sales indicated China's booming economy was not immune to the global meltdown. New figures confirm it: China's economy is still growing, but at the slowest pace in five years. The National Statistics Bureau said Monday the economy expanded by just 9 percent in the third quarter, the slowest rate since 2003, when growth plummeted during the SARS outbreak. By comparison, the economy grew 10.6 percent in the first quarter and 10.1 percent in the second quarter of 2008.
POLL FINDS HIGH ANXIETY WASHINGTON (AP) -- With little relief in sight, people are getting more anxious about the slumping economy and how it affects them. The share of people who believe the country is moving in the right direction has plunged in just a few weeks, from 28 percent in September to 15 percent in October, according to an Associated Press-Yahoo News poll of likely voters that was released Monday. At the same time there is a drop in those surveyed who say they are happy about the way things are going in their own lives. Now 59 percent say they are personally happy, compared with 70 percent last month. The magnitude of the financial meltdown and its impact on the overall economy is hitting people hard across the social and economic spectrum. Strikingly, one-third are worried about losing their jobs, half fret they will be unable to keep up with mortgage and credit card payments, and seven in 10 are anxious that their stocks and retirement investments are losing value, according to the poll. Also, there is widespread distress about being able to afford unexpected medical expenses and children's college expenses, and having to postpone retirement because their savings have eroded, the survey found. "I'm just a normal person trying to get by in life," said Mary Huss, 57, an unemployed social worker from Salinas, Calif., who is facing cash shortages and questions about how she will pay her medical costs and her teenagers' college expenses. "And yet I feel fortunate that I'm not in the place where a lot of Americans are where they're losing their homes." The AP-Yahoo News poll, conducted by Knowledge Networks, has repeatedly interviewed a group of about 2,000 people since last November in an effort to get a person-by-person view of how the country is reacting to the presidential campaign and the events affecting it. The picture the survey paints of those who have grown less happy since September is telling. One-third are retirees. James Haste, 78, of Arvada, Colo., is among those who have watched their retirement savings shrink. In September he said the nation was headed in the right direction. Now he is among the 84 percent who say it is hurtling off track. The retired engineer lists the financial crisis, the energy situation and rising unemployment as the top problems. "Markets are going to come back, but not soon," he said. Banks and other financial institutions "are going to have to write off a lot of bad stuff, and who's going to take the hit? The banks can't do it if they're going to stay in business. It's a slow process." A Republican, Haste said he sees government bailouts such as the $700 billion plan passed by Congress this month and the Treasury Department's plans to buy shares in major banks as necessary evils. Overall, 54 percent said they approved of the rescue plan, 28 percent disapproved and the rest had no opinion. The poll shows how financial worries have permeated all corners of society, with some hit harder than others: -While about one-third overall worry about financing a child's college education, six in 10 people under age 45 are anxious about it. -53 percent worry they will have to work longer because their retirement savings have dwindled, and 66 percent of people in their 40s feel that way. -One-third worry about losing their job, but nearly half in their 30s and 40s do. -Forty-six percent of whites and 62 percent of blacks worry about making mortgage and credit card payments. -Sixty-six percent overall are concerned about facing major medical bills, including 78 percent of unmarried women. -Nearly eight in 10 college graduates worry that the value of their stocks and retirement investments is falling. Public approval of both President Bush and Congress has followed the downward spiral of financial markets, the survey showed. The poll found that 25 percent said they approved of the way Bush was handling his presidency, down from 32 percent in August. Remarkably, just 3 percent said they strongly approve of the job Bush is doing, compared with 51 percent strongly disapproving. Just 11 percent said they approved of the job Congress is doing, while virtually no one gave lawmakers strong approval. Anderson Lee, 21, a caregiver from Bowling Green, Ohio, is among those saying the country is heading the right way. "Certainly there are some problems we're facing now with the economy and overseas issues," Lee said. "But we've faced larger problems in the past. That spirit of working together and working to make the country better will drive us through the problems we're facing." Donna Gasior, 43, a professor at a Detroit-area community college, said the stock market tumble is having a "huge effect because pretty much everyone's retirement funds are in the stock market." She said she believes she has time to recoup but her 69-year-old mother "gets a majority of her income just from investments." A Democrat, Gasior said that "mismanagement and policies have really come home to roost with the economic collapse we're seeing. I think things have been on the wrong track for a long time." The AP-Yahoo News poll included 841 likely voters, was conducted from Oct. 3-13, and has a margin of sampling error of plus or minus 3.4 percentage points. Included were interviews with 373 Democrats, 252 Republicans and 214 independents. The poll was conducted over the Internet by Knowledge Networks, which initially contacted people using traditional telephone polling methods and followed with online interviews. People chosen for the study who had no Internet access were given it for free. --- AP Director of Surveys Trevor Tompson, News Survey Specialist Dennis Junius and writers Christine Simmons and Alan Fram contributed to this report.
JOB LOSSES ACCELERATE, ADD TO U.S. WOES WASHINGTON - Unemployment claims, already well into recession territory, are rising even faster than expected, leading economists to warn Thursday that the worst is yet to come. As the Labor Department released bleak new numbers on the job market, Goldman Sachs, Chrysler and Xerox all announced they were cutting workers by the thousands, adding to the woes of an economy beset by tighter credit and wobbly banks. The government said new applications for unemployment insurance rose 15,000 last week to a seasonally adjusted 478,000, above analysts' estimates of 470,000. Jobless claims above 400,000 are considered a sign of recession. The White House, in unusually stark language, acknowledged the economy is going through what spokeswoman Dana Perino called a ''rough ride.'' ''We expect our GDP [gross domestic product] number next week not to be a good one and the next quarter to be tough as well,'' Perino said. The Commerce Department will release its first estimate of third-quarter economic performance Thursday, and Wall Street analysts project it will show the economy contracted by 0.5 percent, according to Thomson/IFR. Many economists expect the decline to continue into the current quarter and the first three months of 2009, if not longer. The classic definition of a recession is at least two consecutive quarters of negative growth. Currently, the unemployment rate is 6.1 percent. Unemployment peaked at 6.3 percent in 2003 after the brief recession of 2001. It peaked at 7.8 percent in the 1991-92 recession, and above 10 percent in 1982. The Goldman Sachs Group Inc. said it would cut about 3,260 jobs, or 10 percent of its work force. Also on Thursday, Chrysler LLC said it would cut 1,825 jobs and Xerox Corp. said it plans to eliminate 3,000 positions, or 5 percent of its work force. Other companies have announced reductions this week: Yahoo Inc. is cutting 10 percent of its employees, or 1,500 people, drugmaker Merck & Co. is eliminating 7,200 positions, and financial services firm National City Corp. will shed 4,000 jobs. The impact of the job losses is rippling through the economy. As jobs disappear, foreclosures rise when out-of-work homeowners can no longer make mortgage payments. Spending is falling, too. Americans who still have jobs are worried about keeping them, and those who have lost jobs must watch every penny. Consumer spending accounts for about 70 percent of the economy, and economists estimate it fell by more than 3 percent last quarter in what would be the first quarterly drop in 17 years. Utah employment Employment growth in the state has slowed to crawl - Utah added only 1,800 jobs overall in the year that ended in September out of a statewide work force of nearly 1.3 million. That's down substantially from a peak gain of 5.4 percent and 54,000 jobs in the year that ended June 2006. The state still is doing better in terms of job growth than most other regions where anemic growth has given way to substantial job losses.
FED CUTS INTEREST RATE TO 1 PERCENT WASHINGTON -- The Federal Reserve has slashed a key interest rate by half a percentage point as it seeks to revive an economy hit by a long list of maladies stemming from the most severe financial crisis in decades. The central bank on Wednesday reduced its target for the federal funds rate, the interest banks charge on overnight loans, to 1 percent, a low last seen in 2003-2004. The funds rate has not been lower since 1958, when Dwight Eisenhower was president. The cut marked the second half-point reduction in the funds rate this month. The Fed slashed the rate by that amount in a coordinated move with foreign central banks on Oct. 8. In a brief statement explaining Wednesday's action, the Fed said that the ''intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and business to obtain credit." The central bank said that ''downside risks to growth remain" holding out the promise of further rate cuts if needed. The rate-cut decision was unanimous. Federal Reserve Chairman Ben Bernanke and his colleagues pledged that they would ''monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability." Wall Street had staged its second biggest point surge ever on Tuesday with the Dow Jones industrial average climbing by 889 points in anticipation of the Fed's action. Trading was more subdued on Wednesday with the Dow actually slipping into negative territory immediately after the announcement, but surged up by about 200 points in late-afternoon trading. Many analysts said they believe the Fed will not stop at 1 percent if officials see the need to cut rates further. Some are forecasting another half-point move at the Fed's last meeting of the year on Dec. 16. But other economists said with rates already so low, the Fed may decide to hold at 1 percent, leaving some room for a further reduction if needed next year should the country's economic troubles intensify. David Jones, chief economist at DMJ Advisors, said the Fed's rate cut will be followed over the next week by similar action in other major countries as they grow more concerned that the recession that began in the United States is spreading to their regions. But he said a section of the Fed's statement where it listed all the efforts taken so far to battle the slowdown was a signal the central bank believes it has done enough for now. Other economists disagreed, saying the Fed clearly lowered its worries about inflation while raising concerns about economic growth. Sung Won Sohn, an economist at the Smith School of Business at California State University, said he believed the Fed will make the ''momentous decision" to move the funds rate to zero if events in coming months show such an action is needed to battle the global credit crisis. In its statement, the Fed indicated it had room to lower rates because the spreading economic weakness was lowering the risks that inflation would get out of control. Indeed, the weakness has caused dramatic declines in the price of oil and other commodities. While many economists believe the country has already fallen into a recession, they think the aggressive efforts by the Fed to cut rates and take other actions to unfreeze credit markets will keep the country from plunging into a prolonged and deep downturn. The Fed's action was expected to be quickly followed by a reduction by commercial banks in their prime lending rate, the benchmark for millions of consumer and business loans, by a similar half-point. The central bank also announced that it was lowering its discount rate, the interest it charges to make direct loans to banks, by a half-point to 1.25 percent. This rate has become increasingly important as the central bank has dramatically increased direct loans to banks in an effort to break the grip of the credit crisis. Bernanke pledged in a speech earlier this month that the Fed ''will not stand down until we have achieved our goals of repairing and reforming our financial system and restoring prosperity." In addition to the rate cuts, the Fed has been moving to pump billions of dollars into the banking system to help unfreeze markets that seized up in dramatic fashion last month. The ensuing meltdown of financial markets caused the Bush administration to successfully lobby Congress to pass on Oct. 3 a $700 billion rescue package to make direct purchases of bank stock and buy up bad assets as a way of getting financial institutions to start lending again. That money started flowing earlier this week with $125 billion going to nine of the nation's biggest banks. Other industries, including automakers and insurance companies, are in talks with the administration to get a share of the bailout funds. And there is pressure from lawmakers to deploy some of the bailout resources to provide mortgage guarantees to encourage more banks to rework home loans to stem a record tide of foreclosures.
MINING EXCAVATOR COULD BRING 422 JOBS Cementation USA Inc. was the kind of company Gov. Jon Huntsman Jr. hoped to attract in identifying energy and natural resource development as a "cluster" industry vital to the state's future. The subsidiary of a Canadian mining company owned by an even larger, South Africa-based multinational, Murray & Roberts, Cementation USA excavates massive shafts and builds underground infrastructure for hard-rock mines. Current clients include Kennecott and its parent company, Rio Tinto. Over the next decade, Cementation USA expects to develop enough business to employ 422 people at its new U.S. headquarters in Sandy. Fourteen now work at that office, formally dedicated Wednesday in a ceremony attended by representatives of the Governor's Office of Economic Development (GOED), which in June gave the company $3.3 million in tax credits payable over 10 years. The financial incentive helped convince Cementation executives in Ontario, Canada, to pick Salt Lake over three other Western cities, said Michael Nadon, president of U.S. operations. But there were other motivating factors, too. "Salt Lake is central to mining regions of Nevada, Arizona, Idaho and Utah. It's a great transportation hub, with our projects are all over the West. And we saw it as a beautiful city to settle in with families, an easy place to attract people to - we're hiring engineers all the time - with skiing, golf, the weather," Nadon said. "We've been here a few months and we're happy we made that decision." Those are sweet words to Derek Miller, GOED's managing director. "It makes me feel really good to hear testimonials like that from someone else, rather than having it come from [me], a guy whose job is selling the state," he said. "The motto of 'Life Elevated.' This is the translation in real terms, having someone move here." Miller also cited Murray & Roberts' 106-year history as evidence that Cementation "is one of those companies with a long history that are probably as recession-proof as anyone - because of the markets they work in." Cementation USA's main projects now are the excavation of a 28-foot diameter shaft, 7,000 feet down to a deep ore body outside of Phoenix; cutting an 11 percent grade ramp for Kennecott Minerals to a nickel and copper deposit in Michigan's Upper Peninsula; and developing a shaft for Hecla Mining Co.'s Lucky Friday mine east of Coeur d'Alene, Idaho.
SURPRISE: ORDERS FOR DURABLE GOODS WASHINGTON - Orders to U.S. factories for big-ticket manufactured goods posted an unexpectedly strong showing in September - the largest gain in three months - on a surge in demand for airplanes and autos, government data showed Wednesday. The Commerce Department reported Wednesday that orders for durable goods rose by 0.8 percent, surprising economists who had expected a decline. Orders had fallen by 5.5 percent in August, which was the biggest setback in nearly two years. The September increase was the largest gain since a 1.4 percent rise in June, but all the strength came in the transportation sector. Demand for commercial aircraft, an extremely volatile category, shot up by 29.7 percent and orders for motor vehicles rose by 3 percent, the biggest gain in more than a year. The big increase in orders for motor vehicles probably reflected the use of incentive packages by automakers trying to spur lagging demand during a generally dismal sales year. Outside of transportation, orders fell by 1.1 percent after a 4.1 percent drop in August. The back-to-back declines in these areas indicated the pressures facing manufacturing now as the U.S. economy appears to be falling into a recession.
BAD RECESSION LOOMS AS ECONOMY SHRINKS WASHINGTON - Let the economists debate all they want. This is a recession. Scared and often broke, Americans stopped buying everything from cars to corn flakes in the July-September quarter, cutting back spending by the largest amount in 28 years and jolting the national economy into what could be the most painful downturn in decades. Analysts will be studying the figures for months before confirming the meltdown recession of 2008. But the result is no longer in doubt. With retailers bracing for a grim holiday buying season, the economy isn't just slowing; it's actually shrinking, the government said Thursday. It reported that the nation's gross domestic product declined at an annual rate of 0.3 percent in the year's third quarter and consumers' disposable income took its biggest drop on record. In simpler words, ''The train went off the tracks,'' said Brian Bethune, economist at IHS global Insight. Wall Street took comfort in the fact that it wasn't even worse. The Dow Jones industrials rose 190 points. But it looks as if tougher times are still ahead. Economists believe consumers are cutting back even more right now, and they predict a much larger economic decline - anywhere from a 1 to 2 percent rate - during the current October-December period. That would meet a classic definition of a recession - two straight quarters of shrinking GDP. Clobbered by pink slips, shrinking nest eggs and falling home values - consumers are holding ever tighter to their wallets. The new report said Americans' disposable income fell at an annual rate of 8.7 percent in the quarter, the largest in records dating back to 1947. The dismal news came just days before the nation picks the next president. Whether Democrat Barack Obama or Republican John McCain wins the White House, he will inherit a deeply troubled economy and a record-high budget deficit that could cramp his spending plans. Each side said the new figures supported its political case. More than in recent recessions, consumers - the lifeblood of the economy - are bearing the brunt of the country's housing, banking and other ailments. The third-quarter decline in their spending was the first in 17 years, and the 3.1 percent annualized cutback was staggering - the most since the spring of 1980 when the country was in the grip of what some call the worst downturn since the Great Depression. Walloped by such a huge pullback, the economy toppled into negative territory. The latest reading on GDP, which measures the value of all goods produced within the United States, showed a rapid turn from the 2.8 percent growth rate logged in the second quarter. The new figure was the worst since the 1.4 percent rate of decline in the third quarter of 2001, when the nation was suffering through its most recent recession. Democrats on Capitol Hill are pushing for another stimulus package and are weighing whether to hold a lame duck session before the new president takes office. A collapse of the housing market and locked-up lending have produced the worst financial crisis to hit the country in more than 70 years. To cushion the fallout, the Fed slashed interest rates on Wednesday by half a percentage point to 1 percent, a level seen only once before in the last half century. Fed Chairman Ben Bernanke has warned that the country's economic weakness could last for some time - even if the government's unprecedented $700 billion financial bailout package and other steps do succeed in getting financial and credit markets to operate more normally.
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1-5 Northwest Mining Association Annual Meeting, John Ascuaga's Nugget, Reno, Nevada. For more info. visit: http://www.nwma.org/convention.asp 2-4 Power Gen International 2008, Orlando, Florida. For more info. visit: http://pgi08.events.pennnet.com/fl//index.cfm 3-5 Western Renewable Energy Development Summit, Hilton Del Mar, San Diego, CA. For more info. visit www.infocastinc.com/western 8-10 Energy Efficiency Summit East, Almas Temple, Washington, DC. For more info. visit www.infocastinc.com/efficiency 10-12 Energy Planning & Resource Procurement Summit, Royal Sonesta Hotel, New Orleans, LA. For more info. visit www.infocastinc.com/energy
2009
26-28 Grid-Scale Energy Storage, San Diego, CA. For more info. visit www.infocastinc.com/grid
9-13 Global Uranium Symposium, Keystone, CO. for more info. visit: www.u2009.org
MSHA 16-Hour Training for Metal/Non-Metal Surface Miners, 8 a.m. to 5:00 p.m. Cost $175 Utah Safety Council, 801-478-7878 or 800-933=-5943 For more info. visit http://www.utahsafetycouncil.org/training/mine_health.asp November 11-12, 2008 MSHA 8-Hour Annual Training for Metal/Non-Metal Surface Miners, 8 a.m. to 5:00 p.m. Cost $75 Utah Safety Council, 801-478-7878 or 800-933=-5943 For more info. visit http://www.utahsafetycouncil.org/training/mine_health.asp
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