Category Archives: Resource Based Economy

Multinational oil giant Chevron has lost its appeal against a multimillion-dollar tax bill issued by the Australian Taxation Office, setting the scene for the tax man to challenge other companies with dubious tax schemes.

While Chevron's appeal to the Full Federal Court is not the end of the matter the company has told Fairfax Media it may appeal to the High Court the case has emboldened Tax Commissioner Chris Jordan to go after other multinationals.

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Big companies can get very creative with their tax avoidance strategies, including global resource giants Chevron and Shell.

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Get to know the online retail giant before it sets up shop on Australian shores.

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Australias spending on road and rail is picking up the slack from housing construction. Michael Pascoe comments.

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Ahead of a meeting with suppliers, Malcolm Turnbull says it's essential businesses and families have access to reliable and affordable gas,

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The decision to abolish 457 temporary work visas is presented by Malcolm Turnbull as putting the interests of Australians first.

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Former police officer Adam Watts details the lengths his insurance company went to deny him his workers compensation after being medically discharged from the force.

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No, Australia isn't suffering a housing bubble. Sydney and to a lesser extent Melbourne might be, but the whole nation is starting to pay the price for it.

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Australia has more economic challenges than just Sydney and Melbourne housing prices, for example wages growth is stubbornly low and so is inflation. Michael Pascoe comments.

Big companies can get very creative with their tax avoidance strategies, including global resource giants Chevron and Shell.

The Australian Taxation Office has already issued tax bills totalling $2.9 billion to seven large companies.

The Chevron case was in many ways a major test case for the ATO, and will have global implications for the way tax paid by large companies is assessed.

The ATO has been fiercely battling Chevron in court over unpaid taxes between 2004 and 2008.

The case examined the tax deductibility of a $2.5 billion inter-company loan made from a Chevron subsidiary in Delaware to Chevron Australia.

The Full Federal Court unanimously agreed with the ATO that Chevron used a series of loans and related-party payments worth billions of dollars to slash its tax bill by about $300 million.

The agency has to date spent more than $10 million in out-of-pocket expenses in the the Chevron case and was hoping for a win.

The ATO will now be able to challenge other companies with similar transfer pricing arrangements.

In 2015, Chevron paid itself $2.2 billion in interest payments; that amount is over half of the $3.9 billion in offshore interest payments to related parties that the ATO reported for the offshore oil and gas industry in its recent submission.

"We are heartened by the outcome," an ATO spokesman told Fairfax Media. "This is the first matter to reach an Australian court which tests how our transfer pricing rules apply to interest paid on a cross-border related party loan.

"In short, the Court did not accept the proposition that the Australian subsidiary group of Chevron should be allowed to claim interest on the basis that its borrowings should be judged under the transfer pricing rules as if it was a standalone 'orphan' company separate from the rest of the Chevron Group."

"This decision is significant and has direct implications for a number of cases the ATO is currently pursuing in relation to related party loans, as well as indirect implications for other transfer pricing cases."

The ATO noted that Australia's transfer pricing rules have been further strengthened since the years under consideration in the Chevron decision, and there were also tougher domestic laws including the Multinational Anti-Avoidance Law and Diverted Profits Tax.

But a Chevron spokesman signalled this may not be the end of the battle. "Chevron is disappointed [with] today's decision ... We will review the decision to determine next steps, which may include an appeal to the High Court of Australia.

"As recognised by the trial court in the dispute, the financing is a legitimate business arrangement and the parties differ only in their assessments of the appropriate interest rate to apply."

He said Chevron Australia was one of Australia's largest investors and employers and since 2009 had paid almost $4 billion in federal and state taxes and royalties.

The tax and business community have also been keenly watching the case.

"The ATO's win against Chevron should send a strong signal to all multinationals that these blatant tax avoidance schemes will be challenged," said International Transport Workers Federation senior researcher Jason Ward. The union, which represents workers on the offshore LNG projects of WA, has been a vocal critic of Chevron.

"With this judgement, Chevron should be forced to change the current $42 billion loan which is already being audited by the ATO. If the current larger scheme is not restructured, Australians will lose billions more in future tax revenue."

KPMG tax partner Grant Wardell-Johnson said the case would have global ramifications. Companies could no longer postulate that a subsidiary is completely independent of its parent.

"You cannot treat it as if it were an orphan," he said. "Rather you must take into account the common ownership in determining the appropriate consideration."

The Tax Institute's senior tax counsel Robert Deutschsaid "multinationals should as a matter of urgency review their existing offshore financing arrangements in light of this decision".

"The decision may yet be appealed to the High Court but there is neither certainty that such an appeal will be made nor, if made, that it would be successful," he said. "For the moment all parties should proceed on the basis that the Full Federal Court has provided the final word on this matter."

Chartered Accountants tax leader Michael Croker said:"This is such an important win for the ATO and will influence many conversations with other multinational companies."

He said the Chevron decision could influence government thinking on the need for further statutory limits on interest deductibility, noting Labor's worldwide gearing ratio policy.

"But there are those who say Australia's resource based economy and substantial infrastructure needs mean we cannot be too proscriptive on interest deductions," he said. "One model is to impose restrictions but allow the Treasurer to authorise higher gearing for nation-building projects."

Shadow assistant treasurer, Andrew Leigh, said the decision highlighted the importance of closing debt-shifting loopholes. "For all its hot air, the Turnbull Government has consistently opposed Labor's fair measures to tighten the rules that let multinationals use internal loans to shift profits offshore," Mr Leigh said.

Australian Greens finance spokesperson Sarah Hanson-Young said Chevron had fought for almost 15 years against paying its fair share of tax to Australians. "The Chevrons and Adanis of this world do not need, or deserve, handouts from the Australian taxpayer when billions are being ripped out of our school system and our young people are struggling with record cost-of-living expenses".

The Senate inquiry into corporate tax avoidance, which has looked at profit-shifting techniques used by tech giants including Apple, Google and Microsoft will now shift its full focus to the oil and gas industry. New hearings are expected to take place in Perth on April 28.

As outlined by both Chevron and the ATO in the Senate hearing in 2015, the new $42 billion loan, like the smaller $2.5 billion loan in the court case, is a hybrid loan structure. It reduces profits in Australia and makes tax-free interest income in Delaware.

The Delaware parent company, which has no office and employees, pays an annual filing fee to the state of Delaware of $US175 and no tax on interest income.

Chevron admitted in the Senate hearings that this larger loan, under audit by the ATO, could reduce corporate income tax payments in Australia by $15 billion. But tax experts say the actual impact could be much larger.

The ATO will be releasing detailed guidance to help companies with related party loans comply with Australia's transfer pricing rules.

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Multinationals tax dispute: Chevron loses appeal, ordered to pay about $300m to ATO - The Sydney Morning Herald

Ten years from now, respondents believe that emerging market economic development will be driven by increasing levels of education, modernizing infrastructure and innovation. The study found that institutional investors see the shift from "old economy" to "new economy" fueling fundamental change across these markets.

"Institutional investors see the evolution of emerging market countries from resource-based, commodity-dependent economies to more diversified and dynamic economies as the dominant trend for the next decade," said Andrew McCollum, Managing Director at Greenwich Associates. "As that transformation takes hold, investment managers' ability to generate alpha will require a much more integrated investment process that focuses on bottom-up fundamentals but blends top-down macroeconomic and political perspectives."

Demand for external expertise on emerging markets in institutions is growing. The study found that nearly a quarter of endowments, foundations and corporate pensions with less than $1 billion in AUM say they expect to hire a new emerging market equity manager in the coming year, as do nearly 20% of public funds of the same size.

"Once again institutional investors are looking beyond today's markets to how they can effectively meet their future return targets," saidJohn McDonough, Head of Distribution and Marketing at OppenheimerFunds. "We remain committed to bringing them unique insights that come from being at the forefront of global investing for almost 50 years."

In contrast to some investors shifting towards beta strategies, 78% of U.S. institutions participating believe that active strategies will be their main vehicle for obtaining emerging market exposures in the next ten years. In addition, respondents noted that 85% of European and 31% of U.S. institutions expect to incorporate environmental, social, and governance (ESG) principles into their investments in emerging countries.

Interviews were conducted by Greenwich Associates with 121 institutional investors, from the U.S. and Europe, between November 2016 and February 2017.

To read the report visit: https://www.ofiglobal.com/institutional-investors/ico/institutional-perspectives

About OppenheimerFunds

OppenheimerFunds, Inc., a leader in global asset management, is dedicated to providing solutions for its partners and end investors. OppenheimerFunds, including its subsidiaries, manages more than $228 billion in assets for over 13 million shareholder accounts, including sub-accounts, as of March 31, 2017.

In 2016, OppenheimerFunds launched a Revenue Weighted ESG Strategy which focuses on U.S. large-cap equities with highly rated ESG practices, anda Revenue Weighted Global ESG Strategy, which focuses on global large- and mid-cap equities with highly rated ESG practices.

Founded in 1959, OppenheimerFunds is an asset manager with a history of providing innovative strategies to its investors. The firm's 15 investment management teams specialize in equity, fixed income, alternative, multi-asset, and revenue-weighted-ETF strategies, including ESG. OppenheimerFunds and its subsidiaries offer a broad array of products and services to clients, who range from endowments and sovereigns to financial advisors and individual investors. OppenheimerFunds and certain of its subsidiaries provide advisory services to the Oppenheimer family of funds, and OFI Global Asset Management offers solutions to institutions. The firm is also active through its Philanthropy & Community initiative: 10,000 Kids by 2020, reaching children with introductions to math literacy programs. For more information on the firm, visitoppenheimerfunds.com.

An investment in the strategy is subject to investment risk, including the possible loss of principal amount invested. Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes, regulatory and geopolitical risks. The stocks of companies with favorable ESG practices may underperform the stock market as a whole. The alternate weighting approach employed by the strategy (i.e., using revenues as a weighting measure), while designed to enhance potential returns, may not produce the desired results.

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OppenheimerFunds and Greenwich Associates Release Report on ... - PR Newswire (press release)

Alberta added an impressive 20,000 full-time jobs in March, according to Statistics Canada, suggesting the province's resource-based economy is enjoying a significant rebound.

But will Premier Rachel Notley, Finance Minister Joe Ceci or any other member of Alberta's New Democratic Government get any credit for this development from the Opposition and its mainstream media auxiliary? Don't hold your breath.

Opponents of the government continue to repeat the same old claims about the state of the economy they were making a year ago, two years ago, and three years ago about PC premier Jim Prentice, pretty much word for word.

Meanwhile, next door in Saskatchewan -- home of Premier Brad Wall, who a well-known Alberta right-wing Opposition figure not long ago declared to be the real leader of Western Canada -- that province was shedding jobs in the same time period.

According to the same Statistics Canada report, employment declined in Saskatchewan by more than 5,000 jobs in March.

Since Saskatchewan's economy like Alberta's is resource dependent, this suggests that when it comes to real jobs for real people, Premier Notley's approach of continuing to fund basic services and programs is more effective at keeping the economy ticking along than Wall's idiologically motivated austerity.

And since Saskatchewan's economy measured by Gross Domestic Product as well as its share of the national GDP and its population is always about a quarter of Alberta's, perhaps we could extrapolate that, all things being equal, if Saskatchewan were the same size as Alberta it would have lost about...20,000 jobs.

On the other hand, the overall unemployment rate remains higher in Alberta -- probably partly because so much of the Canadian oil industry is headquartered in Calgary and partly because more people are looking for work again now that the economy is perking up and there are more grounds for optimism here in Alberta. Nevertheless, that means there's still something for opponents of Notley's government to point to when the facts don't support their narrative...for the moment, anyway.

Just the same, by any normal measure, the Alberta economy remains strong. "The Alberta economy as a whole is robust...certainly relative to other provinces," University of Calgary economist Trevor Tombe recently told a Postmedia reporter, who buried the good news, but at least covered it. "I'd still say it's the strongest economy in Canada."

For its part, the federal statistics agency noted: "Employment in the province has been on an upward trend since the autumn of 2016."

Alberta's recession this time has been shallower than it was in either 2008 or 1981, Tombe noted in a tweet the day the Statistics Canada numbers came out -- both earlier recessions took place while the Progressive Conservative Party was managing the economy.

Nor does the province's expected debt-to-GDP ratio of about 7-per-cent seem like a problem by any economic yardstick, despite the Opposition's best efforts to raise debate to a hysterical pitch over the size of the provincial debt.

Alberta's two main conservative opposition parties, and to a significant degree the mainstream media, have spent the past two years loudly and continually denouncing the NDP for the economic conditions the province faced -- even though the most significant factor, the impact of the international price of oil on our historically one-note economy, was well beyond the provincial or even the federal governments control.

Now that the measures they have taken seem to be bearing some fruit, conservatives appear to have nothing much to say about this situation and the media has gone very, very quiet. The conservative parties, at least, have an excuse, being focused as they are on their efforts to join together in a tiny-tent social-conservative-dominated Frankenparty.

They're bound to argue the good economic news is all caused by factors outside Alberta, and has nothing to do with NDP policies -- in other words, the only thing consistent about conservatives is their ideologically driven inconsistency.

For its part, the energy industry seems to be quietly supportive of what the Notley Government has been doing, which may also account for some conservative discomfort with the issue.

Indeed, the Alberta government's most effective critics nowadays, if not its loudest ones, may be found in the environmental movement.

Meanwhile, the orange-clad Edmonton Oilers are back in the National Hockey League playoffs for the first time since 2006. If they do better than the Calgary Flames, Wildrosers and PCs will presumably try to blame the NDP for that, too.

This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.

Image: David Climenhaga

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Silence on the right and in the media about NDP role as Alberta adds an impressive 20000 full-time jobs - rabble.ca (blog)

Saudi Arabia blazed the global debt capital markets with its first-dollar denominated Islamic bond offering. The $9 billion bond attracted more than three times as many bids as were offered. The money will provide additional breathing room to the governments finances, just as the $17.5 billion international bond debut last year, which was the largest of its kind in emerging markets. The borrowings, along with rising non-oil revenue, should help arrest the decline in foreign-exchange reserves since 2015.

Understandably, reserves are an essential policy toolkit that all nations covet. They provide insurance against shocks. Unlike many emerging economies, Saudi Arabia saved a lot during the oil boom of the 2000s. Just like a family savings plan, reserves can be used to prevent a balance of payment crisis and provide economic and financial stability.

Oil prices have come a long way. Brent crude has jumped by more than 50 percent from $29 per barrel in January 2016 to $55 per barrel now. Although its true that Saudi Arabias foreign assets are declining, the pace is slowing in absolute terms. But why are they falling in the first case?

Foreign assets for Saudi Arabia, as well as other resource-based economies, decline when a price shock takes place. At the onset of a price shock, there is an adjustment period between expenses and revenue. For Saudi Arabia, 2015 was an adjustment year as foreign assets declined by $115 billion from a peak of $724 billion. The drop slowed in 2016 to $80 billion. Had it not been for $28 billion in accumulated past due private sector arrears, which were paid in 2016, foreign assets would have declined at a much slower pace.

In 2015, $116 billion was the draw down as Brent crude plunged dramatically from $99 per barrel to $52 per barrel. The extent of the dive took most economists and pundits by surprise. As the realization that oil prices could very well remain low for some time sunk in, the authorities embarked on a defining project to dramatically alter the way the countrys economy was managed: Vision 2030 and the 2020 National Transformation Plan.

The urgency that defines the economic agenda is based on the crux of the principal: Saudi Arabia cannot rely on one volatile, ever-changing source of income. Oil prices could have entered a structural shift that doesnt afford Saudi Arabia the luxury of waiting until prices recover. Much has been said already about the new normal in oil prices: a stronger dollar, a secular decline in demand in oil consumption in advanced economies, and the growth of shale point to new oil price equilibrium.

The fiscal adjustment, although equally ambitious, is a necessity in order to arrest the depletion of foreign reserves and generate new sources of non-oil revenues. New fiscal realities are impacting all. The cuts to public allowances that came in October demonstrate the governments determination to build a new economy. The vestiges of a bloated public sector have to be tackled. There isnt a perfect time and for as much as civil service reform is an ever-discussed topic, there is something today being done to address that.

Fees are in the offing, which had been seen as taboo. The structure of the economy will change as price inefficiencies are adjusted. Fees paid by commercial entities and households, as well as all kinds of municipality charges, have to be revamped. This is something the United Arab Emirates has done successfully. In Saudi Arabia, municipal fees have remained unchanged, until four months ago, for more than 60 years.

Monthly data point to a deceleration of reserve depletion this year against 2016 and 2015. Reserves fell 13.3 percent in February from a year earlier, compared with a 17.3 percent drop in February 2016. Reserve depletion typically spikes in the early months of each year due to overall expenses and gradually slows down as the year ensues.

Saudi Arabia has options. In the 1990s, when oil took a steep dive, reserves fell to $38 billion in 1999 when the economys size was $166 billion. Local debt was issued and the kingdom kept its currency peg to the dollar. Today, debt to GDP is below 15 percent, which allows for plenty of space to issue debt before the governments 30 percent ceiling is reached. It can raise billions of dollars from the international debt market as its economy grows in size, since the numerator is the determining factor. Even under the worst case scenario if the economy grows below trend, it will still be able to borrow at least $117 billion in additional debt before the ceiling is reached and still maintain one of the lowest debts-to-GDP ratios within the Group of 20.

Although Saudi Arabia has an open capital account, import cover is often seen as a relevant measure of how long a shock -- of revenue in the case of the kingdom -- can be weathered. Three months coverage is typically used as a benchmark. Saudi Arabias import coverage was just below 28 months, and even if foreign assets are depleted by around 8 percent annually, coverage will by 2020 be one percentage point above the 2015 global average of 12.8 months. This will be enough to cover the recommended reserve buffer as per the International Monetary Fund for commodity intensive economies.

Business sentiment is improving in Saudi Arabia even if headline growth remains low due to falling oil output. Absent of a spike in oil prices, slowing foreign-reserve depletion will also hinge upon tapping debt capital markets again. Saudi Arabia has made a successful imprint in global markets by wooing investors and tightening yield spreads. This is just the beginning.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story: John Sfakianakis at jsfakia@gmail.com

To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net

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Saudi Bonds Provide Much-Needed Breathing Room - Bloomberg ... - Bloomberg

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House prices up, condo prices down in Regina News Talk 980 CJME "While the city's resource-based economy has placed significant strain on the real estate market over the past two years, recent increases in the price of oil have positively impacted buyer sentiment, contributing to an upswing in sales activity in the ... Canada's Two Largest Real Estate Markets Head in Opposite Directions in the First Quarter of 2017Canada NewsWire (press release) all 45 news articles »

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House prices up, condo prices down in Regina - News Talk 980 CJME

Dozens of articulated dump trucks rolled down a rough dirt road alongside the Peace River Tuesday, moving some of the eight million cubic metres of dirt that must be dug to get down to bedrock that will anchor the south end of the Site C dam and the power station.

An NDP government, said a campaigning Liberal Leader Christy Clark, would hand everyone a pink slip by killing the $8.8-billion dam.

But the project, NDP Leader John Horgan argued, has been a boon for workers coming from somewhere else, not British Columbia. An NDP government would refer Site C to the B.C. Utilities Commission for an assessment and Mr. Horgan refused to say if the megaproject is too far advanced in construction to be halted.

The project and how to proceed is among the starkest differences between the visions of both major party leaders as the election campaign enters its second week. The Green Party has said it would kill the project if given a chance.

The Liberals have sought to turn Site C into a wider allegory of their openness to resource jobs, contrary to an NDP that the Liberals say is dismissive of large-scale projects such as the dam and LNG growth. Mr. Horgan has argued his platform includes a five-year plan to create jobs by building capital projects such as schools, hospitals and rapid transit.

Both major party leaders turned up at campaign events Tuesday wearing hard hats.

Ms. Clark visited a cement plant in Fort St. John to promote the BC Hydro project that currently has about 2,000 workers on the payroll. She said only her party would complete the dam.

If its the NDP, it would be dead. If its the Greens, it would be deader.

Construction began two years ago and Ms. Clark had vowed to get the project past the point of no return before the election. However, during her campaign visit to the provinces northeast, the Liberal Leader warned it was still possible for a future government to kill the project.

Indeed, a UBC academic paper to be released Wednesday suggested the entire project should at least be put on hold on the grounds that it is providing expensive energy that isnt needed. The paper, written in part by two environmental consultants and produced by the schools Program on Water Governance, calls the business case for Site C uneconomic.

Said Mr. Horgan on Tuesday: The only people who have said this is a good idea are Liberals.

BC Hydros construction manager, Bob Peevers, told reporters during a tour of the site on Tuesday that the project is absolutely past the point of no return.

As of the end of 2016, the most recent figures available, Crown-owned BC Hydro had spent $1.5-billion on the project, with another $2.5-billion locked into contracts.

In addition to the money that has been spent, the landscape has already been dramatically altered.

Already, 980 hectares of land have been cleared and eight million cubic metres of dirt have been moved.

Construction is expected to peak in 2020, with the dam to be in service by 2024. But Mr. Horgan noted that Site C has no agreement in place to ensure that British Columbians get jobs on the project, suggesting that would not be the case with the capital projects plan.

The BC Liberal government approved the project without a regulatory review, saying it is needed to meet the provinces future energy needs.

But critics say the megaproject is not the best way to meet those electricity needs.

Local First Nations have been among the fiercest critics of Site C because they say the valley that will eventually be flooded is an important part of their traditional territories.

Chief Roland Willson of the West Moberly First Nations said Tuesday that in addition to the flooding, BC Hydro has refused to listen to appeals to avoid an ancient grave site and a traditional gathering site in its road construction plans.

Chief Willson said the Crown corporation has mapped out an alternate route, but will not change its plans to pave over the grave.

They are being bullies on this, he said in an interview. They know full well there is a grave site there and we have presented solutions to them, but they have balked at everything.

Ms. Clark, who last fall made a reconciliation visit to the Cheslatta First Nation, whose graveyard and village was flooded to make way for the Kenney Dam in 1952, told reporters she would leave BC Hydro to resolve the issue.

A huge majority of First Nations in the region are supportive of Site C because of the jobs it would bring, she told reporters in Fort St. John.

A Hydro official said Highway 29 will be realigned along the shore because it is the safest route for the travelling public, and will have fewer technical challenges. Hydro also insists that no grave has been identified a point that is disputed by the local First Nations.

During her tour of the Inland Concrete facility, Ms. Clark was cheered by workers as she defended the project and said urban voters have to understand the need for resource development in B.C.

The closer you are to a resource-based economy, the closer you are to understanding how important it is we get to yes on resources and building infrastructure, she said.

We do need to do a lot of work to bridge that rural-urban divide. People in Vancouver need to know that they live in the most logging-dependent community anywhere in the province.

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BC Liberals, NDP spar over Site C dam - The Globe and Mail

To the editor:

The Fryeburg area historically has been a natural resource-based economy. Having lived here for 50 years, I have seen six lumber mills close (two in Fryeburg) within 15 miles of town, and most of our local farms have stopped farming. These businesses had provided real estate taxes to run our schools and towns. These mills and farms provided many good jobs and employment for trucking operators delivering raw materials and picking up finished products. It has been very disheartening to see my three children and many of their friends choose to leave our communities to find good-paying jobs with benefits elsewhere.

A possible Poland Spring bottling plant is a resource-based business with up to 80 good-paying jobs with benefits. This really translates to 80 families being supported with income and healht insurance. That could be up to 400 people plus independent contractors and suppliers.

These are good permanent jobs that would keep and attract young people to our communities, jobs that cant be relocated because you cant move the natural resource.

We should invite companies that bring new dollars from outside the state to set up shop with us, especially when they offer clean long-term employment. The water they would bottle is replenished by rain and still ends up in the Atlantic Ocean Basin. With a railroad system nearby they could reduce the amount of traffic on our highways.

Some discussion has been made that Poland Spring is owned by a multinational corporation.

Some of our best companies, like Dearborn, are now owned by multinational corporations. Hunting, a multinational, and Harmac Steel are now owned by people from away.

If a spring water bottling plant was built here, it couldnt just relocate and go away. Currently, Poland Spring is permitted and allowed to extract water in Freyburg. So, they will use this water either by trucking it to another bottling site or establishing a new bottling plant here and bringing security of jobs and income.

I would look forward to having a new, sustainable business in town that offered young people a future, a company that would contribute to our tax base with real estate and business property taxes which would help fund our schools and towns.

Elbridge Russell

Fryeburg

Originally posted here:

Elbridge Russell: Bottling plant would be a resource-based business - Conway Daily Sun

According to the Property and Environment Research Center (PERC), Indian lands hold an estimated 30 percent of the nations coal reserves west of the Mississippi and 20 percent of known oil and gas reserves in the United States. But, especially in the case of coal, even if fewer environmental regulations revive the industry, automation has significantly decreased the need for jobs. (Photo and Infographic: Honor the Earth / FiveThirtyEight)

A couple of years ago a tribal leader showed me an abandoned lumber mill near the village of Tyonek, Ala. The company promised jobs and, for a couple of decades, there were jobs. But after the resource was consumed, the mill closed, the company disappeared, and the shell of the enterprise remains today.

This same story could be told in tribal communities across North America. Sometimes the resource was timber. Other times gas and oil. Or coal.

The lucky communities were left with a small toxic dump site. More often there was major cleanup work required after (plus a few more jobs). In the worst case scenario, a Superfund site was left behind requiring government supervision and an even greater restoration effort. But all along, and in each case, the accompanying idea was that jobs would be a part of the deal.There would be construction jobs to build the mine, pipeline or processing plant. Then there would be truck driving jobs moving materials, a few executive jobs (especially in public and community relations) and, of course, the eventual supervision of the cleanup (especially if the tribal government had its own environmental protection agency).

That was the deal. But its one that is no longer true. Now the resource is extracted, pipelines are built, and toxic waste is left behindand the promised jobs are limited to the initial construction jobs.

The renewed effort to build the Keystone XL pipeline is a classic example of this shift. When President Donald J. Trump signed the executive order to approve the project he promised thousands of jobs. Thats true enough for the construction phase, but only 35 employees would be needed to operate the pipeline, according to the State Department report.

Keystone, at least, is prospective jobs. New ones. But the bigger challenge for the Navajo Nation, the Crow Nation and some 30 tribes with coal reserves or power plants is that new deal for resource-based plants and extraction does not create as many jobs.

The numbers are stark.

The U.S. Energy and Employment Outlook 2017 shows that electricity from coal declined 53 percent between 2006 and 2016. Over that same period, electricity from natural gas increased by 33 percent and from solar by 5,000 percent.

Coal is still a major source of energy. But its in decline. Coal and natural gas account for two-thirds of all electricity generation in the United States. And thats expected to remain so until at least 2040, when the market share declines to a little more than half.

But because the market's long-term trend isdown, tribes that develop coal will not share in the rewards of either major profits or in a spike in jobs.

The only hope for this shrinking industry is to export the coal to other countries (something that will be extremely difficult because so many other nations have already agreed to the Paris climate targets). As Clark Williams-Derry has reported for the Sightline Institute:

Robust, sustainable Asian coal markets were never a realistic hope for U.S. coal exporters: the transportation costs were too high, the competition too fierce, and the demand too unstable. So the coal industrys PR flacks may continue to spin tales about endless riches in the Asian coal market, the financials are telling a much more sobering story: that the coal export pipe dream continues to fade away, leaving a bad hangover on the coal industrys balance sheets and a lingering bad taste in the mouths of coal investors and executives alike.

On top of that, Derry-Williams points out that Chinas coal consumption has fallen for three consecutive years.In theinternational context,coal is the most polluting of the three types of fossil fuels. More than 80 percent of the worlds known coal reserves need to stay in the ground to meet global warming targets.

There are jobs in the energy field, but, as the Department of Energy report puts it: Employment in electric power generation now totals 860,869 (and) the number of jobs is projected to grow by another 7 percent but the majority will be in construction to build and install new renewable energy capacity.

Electricity generation in the United States over the last 16 years. (Source: U.S. Energy Information Administration)

The green economy is taking over. (Trump or no Trump.)

The extractive economy (much like the farm economy a generation ago) reached its peak, probably back in 2014. Oil and gas employed 514,000 people. Today its 388,000. Coal and extraction related jobs peaked at 90,000 and now that number is about 53,000.

Indian Countrys development of coal (or not) has been the story so far in the Trump era.

Last month Interior Secretary Ryan Zinke signed a memorandum lifting restrictions on federal coal leasing. He said the war on coal is over. Then he quoted Crow Tribal Chairman Darrin Old Coyote saying, there are no jobs like coal jobs.

U.S. Interior Secretary Ryan Zinke signs an executive order on his first day to expand access to public lands. (Caption / Photo: Yellowstone Public Radio / Dept. of Interior)

Aday later the Northern Cheyenne Tribe filed suit. The tribe said the Interior Department did not consult it prior to lifting the restrictions. It is alarming and unacceptable for the United States, which has a solemn obligation as the Northern Cheyennes trustee, to sign up for many decades of harmful coal mining near and around our homeland without first consulting with our Nation or evaluating the impacts to our Reservation and our residents, Northern Cheyenne Tribe president L. Jace Killsback said in a news release. There are 426 million tons of coal located near the Northern Cheyenne and on the Crow Nation.

Meanwhile in Alaska, another coal project was put to rest in a tribal community. The village of Tyonek has been opposed to the Chuitna Coal Project. (Previously: Mother of the Earth returns to Tyonek.) After a decade of planning, PacRim Coal suspended the project last month because an investor backed out. The project could be brought back to life. But thats not likely, because coal is a losing bet for any investor.

According to Alaska Public Media that meant a joyful celebration in Tyonek. The president of the village Native Council, Arthur Stanifer said, What it means for us is our fish will continue to be here for future generations, also our wildlife, like the bears and the moose and the other animals will be secure and theyll be here. Theyll have a safe place to be.

Andwhat of the jobs? Thats the hard part. The prospects for extraction-related jobs are about to be hit by even more disruptive forces. For example in the oil fields of North Dakota one of the great paying jobs is truck drivingmoving material back and forth. But already in Europe companies are experimenting and will soon begin the shift to self-driving vehicles. Its only a matter of time before that trend takes over elsewhere because it fits the model of efficient capitalism. Self-driving trucks dont need rest breaks, consume less fuel and have fewer accidents. That same disruption of automation is occurring across the employment spectrum. Jobs that can be done by machines, will be.

So if jobs are no longer part of the equation, does natural resource extraction benefit tribal communities?

The answer ought to include a planwhere the United States government and tribes work together to replace these jobs. Retrain workers and invest in the part of the energy sector thats growing: renewable fuels. But thats not likely to happen in Trump Era.

("The New Deal for Tribes: Resouce Extraction & Toxic Waste (Minus the Jobs)" was originally published on the author's websiteTrahantReports.comand some images were added by Rural America In These Times.Follow Markon Twitter @TrahantReports.)

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Some Tribal Economies Depend on Resource Extraction, But These Days that Doesn't Translate into Jobs - In These Times

Conservative leadership hopeful Lisa Raitt was in Whitehorse April 10 to tell Yukoners about her plan for the party.

She addressed a small crowd of around 20 people at a Whitehorse hotel, telling them Canadians had to make Prime Minister Justin Trudeau a one-term prime minister.

Raitt served as Minister of Natural Resources in 2008, labour minster in 2010 and transport minister in 2013 under former Prime Minister Stephen Harper.

She is the second candidate to stop in Whitehorse after Maxime Bernier visited in mid-February.

There are 14 candidates vying for the leadership. Few have released a northern-specific policy. Former Veterans Affairs Minister Erin OToole released a northern platform last week that collected endorsements from Yukon Party MLAs Stacey Hassard, Wade Istchenko and Scott Kent.

While Raitt didnt touch on her plan for the North during her visit, her campaign later released a list of priorities.

Her plan for the North centres on a base-plus approach infrastructure funding instead of per capita funding predictable transfer payments and continuing the mineral exploration tax credit.

Her plan also touched on healthcare and food security.

Raitt also talked about some of the Conservatives regular themes, including repealing the carbon tax and lowering taxes on businesses.

What (businesses shouldnt) have to think about is the stack of forms they have to fill out every single day that takes away from their ability to find more customers, she said.

She heavily criticized Justin Trudeau for his failed electoral reform promise, for not appointing enough judges throughout the country and for his talking points about the middle class.

Delays in the justice system have resulted in charges dropped in several high profile cases in Quebec and Ontario over the past few weeks, including murder charges.

Being the government, you dont have the luxury of continuously consulting and not making decisions when the fabric of society is dependent upon it, she said.

If you dont stop the Trudeaus after their first four years, the damage they inflict on the country just gets worse every single year.

On marijuana legalization, she said she was concerned about the health impact on people under the age of 25 and people driving while intoxicated.

She called medicare broken, especially when it comes to supporting relatives of people with dementia, autism and rare diseases.

On the issue of crime, she stood by Harpers tough-on-crime laws, which created mandatory minimum sentences for certain crimes.

If you lay a hand on a child its fair to have mandatory minimum, she said. But we have to do a better job of two aspects, one is drug addiction, the other one is mental health.

Asked whether she would be willing to work with Yukons three First Nations who dont have a self-government agreement, she said she had talks with the National Chief of the Assembly of First Nations.

All he wanted to hear from me was that Id be willing to work with him, she said. Id be wiling to work with anyone to make sure we got to the right place.

Raitt said she has the most experience of all the candidates running in the CPC race.

I have something that the rest (of the candidates) dont have: Im a mom from the GTA that grew up in Cape Breton, she said.

Those are three segments of the electorate the Conservatives lost to the Liberals, she said: suburban women, Ontario voters and all of Atlantic Canada.

Several prominent Yukon Party members were also present Monday, including former Premier Darrell Pasloski, Hassard, and Yukon Party MLAs Patti McLeod and Brad Cathers.

Pasloski endorsed Raitts candidacy, saying she understands challenges of resource-based economy because she was raised in rural Nova Scotia and because of her cabinet experience.

She is the kind of conservative that we need to lead our party, he said.

Raitt reassured her fellow Conservatives that she could keep the party united.

Kevin OLeary may not be my choice for leader but he is a lot of Canadians choice for leader and you have to respect that, she said.

She said many of the 14 leadership candidates ran to raise profiles.

Contact Pierre Chauvin at .(JavaScript must be enabled to view this email address)

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Lisa Raitt makes campaign stop in Whitehorse - Yukon News

The following is a press release from Friends of Netarts Bay WEBS:

Lush forest, distant waterfalls and outstanding vistas are all part of this trek to the end of Cape Lookout. This free hike is hosted by the Friends of Netarts Bay WEBS and is part of the Explore Nature series of hikes, walks, paddles and outdoor adventures. Explore Nature partners include volunteer community and non-profit organizations, offering meaningful nature-based experiences highlight the unique beauty of Tillamook County and the work being done to preserve and conserve the areas natural resources and natural resource-based economy.

This moderate to difficult five-mile journey takes you to the Cape Lookout headland, which extends more than a mile out into the ocean. Towering over 800 feet above sea level, the cape offers sweeping views of Sandlake watershed, seasonal glimpses of migrating whales, and confirms the amazing beauty of Tillamook County.

Although this hike has a stunning backdrop, the trail itself can be muddy and slick. Also, expect to navigate over stair stepping tree roots. Portions of the trail parallel the cliffs edge and do not have guardrails.

Friends of Netarts Bay WEBS is a non-profit organization dedicated to sustaining the Netarts Bay area through education and stewardship. Find out more at http://www.netartsbaytoday.org.

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'Explore Nature' sets Cape Lookout hike - The News Guard