Category Archives: Industry Jobs Oil Economics

Obama’s New War on Oil/Gas, EPA his Weapon

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First there was coal….now…it is oil and gas….his weapon? The EPA

Obama has given battle plans to General McCarthy, Secretary of the EPA

The Obama administration’s war on coal continues.

Speaking recently before a D.C. green group, Resources for the Future, U.S. Environmental Protection Agency head Gina McCarthy emphasized her belief that Congressional Republicans would find it difficult to roll back the newly-finalized rules for the Clean Power Plan which will, in effect, largely put an end to the use of coal as a fuel source for electricity generation in the name of doing something meaningful about global warming.

McCarthy projected victory despite the almost certain reality of extensive and lengthy litigation over the rules. To her “the extensive comment record and completed litigation over EPA’s underlying authority to regulate carbon under the Clean Air Act are sticking points for a future Administration intent on reversing the rules,” said an analysis of her remarks by Capital Alpha Partners, a Washington firm producing public policy research for institutional investors.

“The Administration is resolute with respect to climate change, and we think McCarthy’s remarks speak to the survival of the rules as a legacy priority for the President, on par with healthcare reform and Iran diplomacy,” the firm said in a recent update.

Legacy or no legacy, the Clean Power Plan will prove very expensive to implement. It will intrude on the governing authority of the different states, will push electricity rates through the roof (as Obama promised he would do in his 2008 campaign for president), kill countless jobs in coal and related industries, and make a severe dent in U.S. electricity generating capacity. Even without full implementation, because the handwriting is already on the wall Wyoming and West Virginia look like they are slipping into a recession with most of the other big coal states likely to follow within a few quarters.

What we get for that is a scintilla of reduction in the generation of so-called greenhouse gases that is almost certainly not worth the enormous expense and the promise of more, not just where coal is concerned, but across the entire energy sector.

Barack Obama’s quiet war on oil

Politico: The oil and gas industry is in the crosshairs of the administration’s eco-agenda, even if Shell gets its Arctic drilling permit.

President Barack Obama’s enemies have long accused him of waging a “war on coal.” But a very different war on oil and gas is coming next.

The newest phase of Obama’s environmental agenda has the oil and natural gas industry in its crosshairs, with plans to curb greenhouse gas pollution from rigs and refineries, tighten oversight of drilling on public lands and impose a strict ozone limit that industry lobbyists slam as “the most expensive regulation ever.”

The administration still might hand some modest victories to the industry along the way — as early as Friday, for example, the Interior Department may give Shell Oil a final green light for expanded drilling off Alaska’s Arctic coast. And unlike the massive climate rule that the EPA issued for power plants last week, the administration’s actions on oil and gas will be quieter, more piecemeal and harder to track.

Still, the oil industry’s top lobbying group says it’s facing a “regulatory avalanche or a tidal wave” — one that some of Obama’s critics have been bracing for.

The administration has “ridden this horse as far as it wants to ride it,” GOP energy lobbyist and strategist Mike McKenna said in an interview, tying the oil and gas crackdown to Obama’s efforts to make wind and solar power more competitive. He said Obama and his team “have always been very clear-eyed about their strategy: they want to make affordable, dependable, traditional fuels like oil, gas and coal more expensive. … This is just the natural rush at the finish line.”

But greens say it’s past time for Obama to start reining in oil and gas as the next step in the climate legacy that he’s made such a priority for his second term. For these activists, the EPA’s power plant rules represented only a down payment.

“We’ve seen the administration willing to take on King Coal,” Jamie Henn, co-founder of the climate activist group 350.org, said in a recent interview. “They’ve got to go after bigger bad guys, like Big Oil and the Koch brothers.”

Environmentalists say the upcoming actions still won’t hit drillers and refiners as hard as EPA is hitting coal-burning power plants.

For example, the administration promised this year to slash oil- and gas-related emissions of methane — an especially potent greenhouse gas — by as much as 40 percent from 2005 levels by 2025. But that level of reduction is “not hard, nor is it particular costly” to achieve, Environmental Defense Fund Vice President Mark Brownstein said.

Unlike the tectonic realignment away from coal underway in the power sector, thanks in part to the EPA’s rules, “nothing would be required of the oil and gas industry that would cause it to have to fundamentally rethink how it does business,” he added.

Republicans in Congress may yet succeed in stopping or slowing down some of the multiple regulations that oil and gas hate the most during final negotiations on funding the government beyond next month. But GOP leaders have little to no appetite for risking a government shutdown to bury the regulations. And the refinery and ozone regulations are both tied to court-ordered deadlines this fall, making it harder for lawmakers to stop the train.

The limits on toxic air emissions from refineries that EPA proposed last year could cost more than $20 billion to implement, according to industry estimates, though the American Petroleum Institute said on Thursday that it hopes to see the final version significantly scaled back. EPA’s projected price tag was much smaller, at $239 million in total costs for the new emissions standards. Much more here.

 

 

 

 

 

Obama’s Summer Reading List

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CBS reported: You can’t golf all day.

President Obama packed plenty to read for his two weeks vacationing with his family in Martha’s Vineyard.

Here are Obama’s six summer reads, a mix of critically acclaimed fiction and nonfiction, obtained first by ABC News:

  • All That Is, by James Salter
  • All The Light We Cannot See, by Anthony Doerr
  • The Sixth Extinction, by Elizabeth Kolbert
  • The Lowland, by Jhumpa Lahiri
  • Between The World and Me, by Ta-Nehisi Coates
  • Washington: A Life, by Ron Chernow

Let’s examine one of them:

Between the World and Me and reviewed by the Christian Science Monitor has some interesting facts and demonstrates volumes of envy, blame and plight.

In his 1978 biography of James Baldwin, Louis H. Pratt called the eminent 20th-century African-American writer a man “concerned with the destruction of the fantasies and delusions of a contented audience … determined to avoid reality.” Baldwin was born poor in New York City and personally knew racial intolerance. With regard to race, Pratt’s Baldwin was a “disturber of the peace” – one who revealed uncomfortable truths to a society mired in complacency. Thirty-five years later, Nobel Prize-winning author Toni Morrison now invokes Baldwin’s legacy in praising Ta-Nehisi Coates’s powerful new memoir Between the World and Me: “I’ve been wondering who might fill the intellectual void that plagued me after James Baldwin died. Clearly it is Ta-Nehisi Coates.”

Coates, a national correspondent at The Atlantic, has, in “Between the World and Me,” crafted a highly provocative, thoughtfully presented, and beautifully written narrative concerning his own misgivings about the ongoing racial struggle in America. In this slender (176 pages) volume Coates is also, like Baldwin before him, set on revealing similar “uncomfortable truths” to 21st-century America. Coates’s prose is addressed to his 15-year-old son Samori. In the wake of all the recent tragedies involving black men and boys at the hands of police – Michael Brown’s death in Ferguson, Missouri in particular – Coates says he cannot help but fear for Samori’s life.

Writing ruefully and with a hint of resignation, Coates writes to Samori about the way that “those who believe they are white” have been essentially “pilfering” the bodies of African Americans throughout the course of American history. In the wake of these many recent and lethal confrontations between law enforcement and black Americans, Coates expresses little hope that there will be meaningful change any time soon. The Rev. Clementa Pinckney, slain with eight parishioners in a church in Charleston, S. C.; the alleged “suicide” of Sandra Bland in Waller County, Texas; and the death of Samuel DuBose at the hands of a University of Cincinnati police officer, are all just more grist for what Coates sees as a mill of misery, mistrust, and hopelessness.

Coates refers to the greater white American population as “Dreamers” – living in a “Dream” festooned with sentimental mythology such as “perfect houses with nice lawns,” “ice cream socials,” “the Cub Scouts,” “block associations,” and “Memorial Day cookouts.” In Coates’s mind, this mythology has clouded any real appreciation or empathy for those for whom the “Dream” is unattainable. As Coates writes to his son, “even your relatively privileged security can never match a sustained assault launched in the name of the Dream.” In Coates’s telling, there are just too many who have become victims of it: Michael Brown, Trayvon Martin, Tamir Rice, John Crawford, Jordan Davis, and Kajieme Powell, are just a few.

In one powerful passage, and in a direct appeal to those who would look away from the numerous black fatalities in recent years, Coates asserts: “America believes itself exceptional, the greatest and noblest nation ever to exist.… One cannot, at once, claim to be superhuman and then plead mortal error. I propose to take our countrymen’s claims of American exceptionalism seriously, which is to say I propose subjecting our country to an exceptional moral standard.”

Having grown up in West Baltimore, the son of William Paul Coates, a former Black Panther and Vietnam War veteran, Ta-Nehisi Coates (his hyphenated first name is the Egyptian translation for ancient Nubia, from which his family originated), was prodigious at reading and writing in his youth and subsequently attended Howard University – “The Mecca” – in Washington, D.C. As a teenager, Coates eagerly consumed the writings of historian and Howard professor Chancellor Williams, whose book, “Destruction of Black Civilization” became a revelation to him. This introduced Coates to the excesses of European colonialism and its disastrous effects in plundering the cultures and economies as well as the bodies of Africans and their countries.

Once at Howard, Coates was drawn to the vast African-American holdings of the Moorland Spingarn Research Center, where Coates’s father once worked. He would “draw out my pen, and one of my black-and-white composition books. I would open the books and read, while filling my composition books with notes on my reading, new vocabulary words, and sentences of my own invention.”

But while Coates was discovering himself, he also became disillusioned by the realization that those black thinkers and writers whose works he devoured at the library often were antagonistic to, and worked against, one another. The one intellectual Coates found close identity with at that time was Malcolm X.

“He was the first political pragmatist I knew, the first honest man I’d ever heard,” Coates writes. “He was unconcerned with making the people who believed they were white comfortable in their belief. If he was angry, he said so. If he hated, he hated because it was human for the enslaved to hate the enslaver, as natural as Prometheus for hating the birds.”

Coates then does a slow burn over another touchy subject – a quote attributed to the Nobel prize-winning writer Saul Bellow: “When the Zulus produce a Tolstoy, we will read him.” Coates found satisfaction in a quote by author Paul Wiley, who replied in kind, “Tolstoy is the Tolstoy of the Zulus.… Unless you find a profit in fencing off universal properties of mankind into exclusive tribal ownership.” As a result, Coates, who admitted error in having originally accepted Bellow’s remark as valid, at last repudiated it as “racecraft,” where, in effect, racism becomes race.

“The Struggle,” as Coates wrote to Samori, named for Samori Toure, who fought against French colonizers in Guinea during the 19th century, often “escapes our grasp.” He quotes Harvard law professor Derrick Bell, who called blacks “faces at the bottom of the well.” But Coates optimistically adds “But there really is wisdom down here, and that wisdom accounts for much of the good in my life. And my life down here accounts for you.”

Coates emphasizes that although blacks in America have endured the hardships of slavery – having been relentlessly “carried off and divided up into policies and stocks” – he has taught his son to “respect every human being as singular,” though that respect must also extend into the past. He writes eloquently about how “You cannot forget how much they took from us and how they transfigured our very bodies into sugar, tobacco, cotton, and gold.”

One moving event Coates relates involves the day he took his young son to see the film “Howl’s Moving Castle” in Manhattan. While exiting the theater, Coates’s dawdling son was angrily pushed on an escalator by a white woman. Coates became enraged and responded accordingly. He expresses personal shame for his loss of temper, noticing to his horror that Samori was intensely frightened by his reaction. Coates was enraged that someone had “invoked their right over the body of my son,” but also expressed regret that in seeking to defend his son, he had actually “endangered” him.

Perhaps the most emotionally wrought episode in the book involves the death of a young man with whom Coates had studied at “The Mecca” – Prince C. Jones, Jr., who Coates learns was killed in an altercation with a Prince George’s County, Virginia policeman who happened to be black, and who had a dismal record in his tenure on the force. Hearing that the unarmed Jones was struck with five bullets (of 16 shots aimed at his Jeep), Coates felt a need to seek out Jones’s mother, about whom he wondered, “How did she live?” Coates found her on the outskirts of Philadelphia in an affluent gated community.

Dr. Mabel Jones made a pact with a friend as a young girl that she would become a doctor and escape the difficult childhood she had lived under her sharecropper father. She subsequently matriculated at Louisiana State University on full scholarship and later served in the Navy.

Earning her medical degree, she specialized in radiology (she said she knew no other black radiologists) and rose to the head of radiology of her hospital. She told Coates that Prince (who she called “Rocky” in tribute to her grandfather, who went by “Rock”), was part of that “one third” of Howard students who were “tired of having to represent.” They were the ones who managed to break away to the suburbs, only to find that they “carried the mark with them and could not escape” – being patronized as “parables of diversity.”

Coates can hardly believe Dr. Jones’s remarkable stoicism in telling him about the night her son died and her control in the face of his having been “plundered.” Driving back after their talk, Coates found himself thinking of his son, of the Dreamers, and of the importance of continuing to struggle. “I do not believe we can stop them, Samori, because they must ultimately stop themselves.… Hope for them. Pray for them, if you are so moved.” It is an appeal to empathy and understanding that has fallen on the deaf ears of so much of America throughout its history.

Coates finishes powerfully, expressing the urgent need of this understanding, together with corrective action, in one stirring passage: “The Dreamers will have to learn to struggle themselves, to understand that the field for their Dream, the stage where they have painted themselves white, is the deathbed of us all.”

The message here is clear: Our national conscience must acknowledge, as difficult as that may be, that there remains a steel-hardened distance between black and white in this country, forged by past and present transgressions. But at the same time, there is the hope that it can be tempered by an appeal to an America that sees itself as “exceptional,” but has failed to extend that belief in exceptionalism to many of its citizens.

“Between the World and Me” follows other important writings by Coates, including his 2008 memoir “The Beautiful Struggle” and his 2014 Atlantic article, “The Case for Reparations.”

Much of what Coates writes may be difficult for a majority of Americans to process, but that’s the incisive wisdom of it. Read it, think about it, take a deep breath and read it again. The spirit of James Baldwin lives within its pages.

 

 

Cyber-attack on Power Grid Paralysis

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Cyber Attacks on the Power Grid: The Specter of Total Paralysis

Posted in General Security, Hacking, Incident Response on July 27, 2015

The Incidents

Imagine that one day you wake up and trading is halted on the New York Stock Exchange (NYSE) floor; meanwhile systems at United Airlines and the Wall Street Journal newspaper appear out of order.

It is not a scene from a movie; it happened on July 8, when trading at the NYSE stopped around 11:30 a.m. ET.

According the media, the temporary interruption of the services mentioned was a fateful coincidence and the events are unrelated, but the incidents have raised once again the question of the real security of critical infrastructure.

White House spokesperson Josh Earnest confirmed that the incidents weren’t caused by cyber-attacks. President Obama had briefed on the glitch at NYSE by White House counterterrorism and Homeland Security adviser Lisa Monaco as well as Chief Of Staff Denis McDonough.

“It appears from what we know at this stage that the malfunctions at United and at the stock exchange were not the result of any nefarious actor,” said Department of Homeland Security Secretary Jeh Johnson. “We know less about the Wall Street Journal at this point except that their system is back up again as is the United Airline system.”

Which is the impact of a cyber-attack on a critical infrastructure? Are critical infrastructure actually secure?

A major attack on a critical infrastructure like a power grid would cause chaos in the country by interrupting vital services for the population.

The current scenario

The Stock Exchange, transportation, and media are critical to the infrastructure of a country. A contemporary failure of these systems could cause serious problems to the nation, especially when the incident is caused by a cyber-attack.

“I think the Wall Street Journal piece is connected to people flooding their web site in response to the New York Exchange to find out what’s going on.” FBI Director James Comey told the Senate Intelligence committee. “In my business we don’t love coincidences, but it does appear that there is not a cyber-intrusion involved.”

Sen. Bill Nelson, D-FL, the top Democrat on the cyber-security subcommittee, told Fox News that the NYSE incident has “the appearance” of a cyber-attack and noted the coordination of multiple sites.

Thus far, the temporary outage at the New York Stock Exchange, United Airlines and the Wall Street Journal’s website were the results of tech glitches, but we have to consider the US infrastructure remains vulnerable to cyber-attacks that would cause serious problems and would be costly.

To compound the scenario, there is the rapid increase in the number of cyber-attacks, at least of those we fail to detect, and its complexity.

The DHS’s Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) has issued its new ICS-CERT MONITOR report related to the period September 2014 – February 2015. The ICS-CERT MONITOR report

According to the report, the Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) received and responded to 245 incidents in Fiscal Year 2014, more than half of the incidents reported by asset owners and industry partners involved sophisticated APT. ICS/SCADA system were also targeted by other categories of threat actors, including cyber criminals, insider threats and hacktivists.

“Of the total number of incidents reported to ICS-CERT, roughly 55 percent involved advanced persistent threats (APT) or sophisticated actors. Other actor types included hacktivists, insider threats, and criminals. In many cases, the threat actors were unknown due to a lack of attributional data.” states the report.

Analyzing incidents reported by sector, it is possible to note that the majority of the attacks involved entities in the Energy Sector followed by Critical Manufacturing. About 30 percent of the incidents hit infrastructures in the energy sector, meanwhile Critical Manufacturing (i.e. manufacturing of vehicles and aviation and aerospace components) accounted for 27 percent.

The threat actors used a significant number of zero-day vulnerabilities to compromise industrial control systems through the exploitation of web application flaws.

The most common flaws exploited by attackers include authentication, buffer overflow, and denial-of-service . Noteworthy among ICS-CERT’s activities included the multi-vendor coordination that was conducted for the ”

“Noteworthy among ICS-CERT’s activities included the multi-vendor coordination that was conducted for the “Heartbleed” OpenSSL vulnerability. The team worked with the ICS vendor community to release multiple advisories, in addition to conducting briefings and webinars in an effort to raise awareness of the vulnerability and the mitigation strategies for preventing exploitation” states the ICS-CERT report to explain the coordination activities sustained by the agency to address principal vulnerabilities.

The ICS-CERT MONITOR report confirmed that the attackers used a vast range of methods for attempting to compromise control systems infrastructure, including:

Figure 1 – ICS -CERT Attack Methods

Unfortunately, it is quite difficult to attribute an incident to a specific threat actor. In the majority of cases, these offensives have gone under the radar over the years due to high level of sophistication of the Tactics, Techniques, and Procedures (TTPs).

The victims were not able to identify the threat actors. Neither the attack vector exploited by hackers for 38 percent of the reported incidents,

“Many more incidents occur in critical infrastructure that go unreported,” states the ICS-CERT MONITOR report. “Forensic evidence did not point to a method used for intrusion because of a lack of detection and monitoring capabilities within the compromised network”.

US power grid vulnerable to cyber attacks

The US power grid is a privileged target for various categories of attackers, terrorists, cyber criminals, and state-sponsored hackers. Daily, they threaten the backbone of the American society. Security experts and US politicians are aware that the national power grid is vulnerable to a terrorist attack.

“It’s possible; and whether it’s likely to happen soon remains to be seen,” explained by the former Secretary of Defense William Cohen“ on “The Steve Malzberg Show.”

Attackers have several options to hit a power grid, from a cyber-attack on SCADA systems to an EMP attack, according to Cohen.

“You can do it through cyber-attacks, and that’s the real threat coming up as well. We have to look at cyber-attacks being able to shut down our power grid, which you have to remember is in the private sector’s hands, not the government’s. And we’re vulnerable,” Cohen added. “It’s possible and whether it’s likely to happen soon remains to be seen.”

“That’s because the technology continues to expand and terrorism has become democratized. Many, many people across the globe now have access to information that allows them to be able to put together a very destructive means of carrying out their terrorist plans. We’re better at detecting than we were in the past. We’re much more focused in integrating and sharing the information that we have, but we’re still vulnerable and we’ll continue to be vulnerable as long as groups can operate either on the margins or covertly to build these kind of campaigns of terror.” said Cohen.

Former Department of Homeland Security Secretary Janet Napolitano shared Cohen’s concerns. A major cyber-attack the power grid was a matter of “when,” not “if.”

State-sponsored hackers, cyber terrorists are the main threat actors, but as confirmed by a recent research conducted by TrendMicro, also the cybercrime represents a serious menace.

Former senior CIA analyst and EMP Task Force On National Homeland Security Director, Dr. Peter Vincent Pry, told Newsmax TV that that a cyber attack against the power grid could cause serious destruction and loss of life.

Not only US power grid are under attack. In January 2015, the British Parliament revealed that UK Power Grid is under cyber-attack from foreign hackers, but the emergency is for critical infrastructure worldwide.\

Figure 2 – SCADA control room

Arbuthnot confirmed the incessant attacks on national critical infrastructure and he doesn’t exclude a major incident, despite the enormous effort spent at the National Grid.

“Our National Grid is coming under cyber-attack not just day-by-day but minute-by-minute,” Arbuthnot, whose committee scrutinized the country’s security policy, told a conference in London last year. “There are, at National Grid, people of very high quality who recognize the risks that these attacks pose, and who are fighting them off,” he said, “but we can’t expect them to win forever.”

The power grid is a vital system for our society and the cyber strategy of every government must consider its protection a high priority, a terror attack would leave entire countries sitting in the dark.

A hypothetical attack scenario and estimation of the losses

What will happen in case of a cyber-attack on a critical infrastructure in the US? Which is the economic impact of a cyber-attack against a power grid?

According to a poll conducted by researchers at the Morning Consult firm from May 29 to May 31, cyber-attacks are just behind terrorism attacks on the list of biggest threats to US. The research allowed the experts to estimate that the insurance industry could face losses of about $21 billion. That poll was conducted by interviewing a national sample of 2,173 registered voters.

Nearly 36 percent of voters consider acts of terrorism at the top of a list of major security threats, followed by cyber-attacks at 32 percent.

Figure 3- Morning Consult firm poll results

The Lloyd’s of London has conducted a very interesting study, Business Blackout, that describes the impacts of a cyber-attack on the national power grid.

It is the first time that the insurance industry has elaborated on a similar report. Obviously, the estimates provided are merely indicative due to the large number of factors that can influence the costs.

According to the report prepared by Lloyd’s of London in a joint effort with the University of Cambridge’s Centre for Risk Studies, cyber-attacks would have a catastrophic impact on multiple types of insurance.

The attack scenario described by Business Blackout illustrates the effects of a malware-based attack on systems that controls the national power grid. The attack causes an electrical blackout that plunges 15 US states and principal cities, including New York City and Washington DC, into darkness. Nearly 93 million people will remain without power in the scenario hypothesized by the study.

The attackers spread the ‘Erebos’ Trojan through the network with the effect of compromising the electricity generation control rooms in several locations in the Northeastern United States.

According to the researchers, the attack will cause health and safety systems to fail, disrupting water supplies as electric pumps fail. The chaos will reign causing the failure of main services, including transportation. The malware is able to infect the Internet and search and compromise 50 generators that it will destroy, causing prolonged outages in the region.

The total of claims paid by the insurance industry has been estimated to be included in the interval comprised between $21.4b and $71.1b, depending on the evolution of the scenarios designed by the researchers.

The researchers involved in the simulation have calculated the economic losses could range from $243 million to $1 trillion, depending on the number of components in the power grid compromised by the attack.

“Economic impacts include direct damage to assets and infrastructure, decline in sales revenue to electricity supply companies, loss of sales revenue to business and disruption to the supply chain. The total impact to the US economy is estimated at $243bn, rising to more than $1trn in the most extreme version of the scenario.” states the report.

The experts analyzed the historical outages, estimating that currently the power interruptions, most of which last five minutes or less, already cost the US about $96 billion. The cost related to a prolonged outage is likely to be included in the range of $36 billion to $156 billion. The Commercial and industrial sectors are the sectors most impacted by the attack on the power grid due to their dependency on the electricity supply.

“Evidence from historical outages and indicative modelling suggests that power interruptions already cost the US economy roughly $96bn8 annually.9 However, uncertainty and sensitivity analysis suggest this figure may range from $36b to $156b.” continues the report. “Currently over 95% of outage costs are borne by the commercial and industrial sectors due to the high dependence on electricity as an input factor of production.”

As explained in the report, it is important to identify the risks related to a possible cyber-attack and adopt all the necessary measures to mitigate them. The protection of critical infrastructure like a power grid is an essential part of the cyber strategy of any Government.

Obama Prematurely Removed Trade Restrictions with Iran

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It must have been some waivers that government officials signed that allowed renewed trade with Iran despite no trade under the Bush Administration and in most cases going back to the Carter administration.

Full details on lifted sanctions with Iran is found here.

The exception for the waiver appears to be under the guise of ‘humanitarian reasons’. So exactly how would Marlboro/Philip Morris or Coca Cola exactly be allowed for humanitarian reasons? I don’t know either but read on….the story gets worse.

U.S. Boosts Trade to Iran, Despite Sanctions

WSJ:

The Standard Chartered affair has laid bare a transatlantic rift between the U.S. and Europe over Iran sanctions.

U.K.-listed bank Standard Chartered agreed Tuesday to pay a $340 million sum to a New York regulator to settle allegations it broke U.S. money-laundering laws in handling Iranian customers’ transactions.

The allegations, which were made public by the New York state Department of Financial Services last week, led some U.K. political figures to accuse the regulator of seeking to undermine London as a financial center.

Now there are more grumblings this side of the pond as European companies realize they suffer more from recent Iran restrictions than their U.S. counterparts–and that such advantage may stem in part from better corporate access to decision-makers in Washington than in Brussels.

The Wall Street Journal reported Thursday morning that U.S. exports to Iran were increasing despite mounting enmity between both sides, while European Union exports to Tehran were falling.

Oral-B mouth wash, made by Procter & Gamble Co. of Cincinnati, Ohio, is still on display at local corner shops in Iran—the company confirms it still sells to Iran legally. Coca-Cola Co.’s Coke soft drink is sold in cafes and supermarkets. The Atlanta-based multinational says its syrup is still being legally exported to Iran and bottled by Khoshgovar Co., whose commercial manager Valid Nejati confirmed the information. “There have been no issues” with receiving payments, a Coca-Cola spokesman said.

To be sure, the penalties enforced against European banks for breaching sanctions on Iran were not focused on trade in foodstuffs, as a U.S Treasury official points out.

But European companies say their banks are increasingly refusing to handle letters of credit because they fear they could run into trouble in the U.S. because financial sanctions there have become so complex.

By contrast, the growth of U.S. sales to Iran largely stems from a decision in October to replace the previous cumbersome approval process with a blanket license for non-sanctioned food items, says Michael Burton, a Washington-based sanctions lawyer at Arent Fox.

While some European cereal traders say they can’t find banks to issue letters of credit for Iran, the U.S. this year restarted wheat exports to the Islamic Republic after a two-year gap.

As of last year, the vast majority of U.S. goods were medical preparations or equipment—31%– , pulpwood and woodpulp—25% and agricultural goods and food–17%

But U.S. permits even extend to goods such as cigarettes, though they are not covered by the blanket license and are subject to more stringent control than foodstuffs.

In April, Philip Morris International Inc. obtained a specific licence from the U.S. Treasury, “to sell cigarettes to customers for import into Iran,” a spokesman for the company said, although it has yet to make use of the authorization.

But expect no miracle to explain why Iranians may be allowed to buy Marlboros but not drive the new Peugeot in the future. To put it simply: when it comes to pleading its case with decision-makers, Corporate America does it better.

Mr. Burton also said U.S. companies benefit from well established channels in Washington to plead for sanctions exemptions, while their European peers, “don’t have the same mechanism to lobby the EU bureaucracy.”

For instance, Washington-based lobby group USA*Engage has successfully campaigned for the extension of a humanitarian exemption for food, agricultural products and medical goods from Iran sanctions.

Richard Sawaya, the director of USA* Engage, said “we have been in perpetual conversation with lawmakers and the Treasury,” on keeping the exemption. The primary aim of USA*Engage is humanitarian, but it can also benefit U.S. companies, Mr. Sawaya said, adding its focusis not limited to Iran.

USA*Engage is an offshoot of the Washington-based National Foreign Trade Council, whose board includes Procter & Gamble. More reading here.

*** Don’t go away yet…now due to the Iran deal concluded, the United States is on the hook to help Iran sell its oil.

Washington, 7 August (Argus) — The US administration is taking steps to ensure that Tehran’s oil customers can continue to purchase Iranian crude during an interim period before a nuclear agreement can be fully implemented and sanctions lifted.

The US Treasury and State departments late today issued guidance for how they will handle Iranian oil and petrochemical exports in the wake of a 14 July agreement the US and its P5 + 1 negotiating partners reached with Tehran. That accord swaps sanctions relief for nuclear concessions.

During the nuclear negotiations, Iran’s oil exports have been limited to 1mn-1.1mn b/d, down from 2.5mn b/d before the sanctions were imposed in 2012. Six countries — China, India, Japan, South Korea, Taiwan and Turkey — buy oil from Iran.

Under US law, President Barack Obama is authorized to impose sanctions on banks in countries that refuse to reduce their purchases of Iranian oil significantly. The US is pledging not to impose sanctions on financial institutions in those countries. And the US will not target non-US companies that help facilitate those purchases.

Obama on 5 August questioned the feasibility of trying to cut Beijing off from the US financial system, since the Chinese “happen to be major purchasers of our debt.” He warned such an effort “could trigger severe disruptions in our economy” and raise questions about the dollar’s role as the world’s reserve currency.

The US also will allow 14 companies to export petrochemicals from Iran. US administration officials estimate it will take six to nine months before compliance with the nuclear provisions can be assured and sanctions can be lifted.

The Republican-controlled Congress is scheduled to vote by 17 September on a resolution of disapproval to demonstrate their unhappiness with the nuclear agreement. That measure is likely to pass, prompting President Barack Obama to veto the resolution. Obama will need 34 Democrats in the Senate or a third of the House of Representatives to sustain his veto.

But Obama is suffering Democratic defections. Yesterday, New York senator Charles Schumer, who in 2017 is expected to become the Democrats’ new leader in the Senate, said yesterday he will oppose the deal.

Iran produced 2.88mn b/d in July, up from 2.85mn b/d in June, making it Opec’s third largest oil producer. Iranian officials have said repeatedly their oil sector needs $150bn-$200bn in new investment. US officials estimate

 

California: Pay Bribe for Drivers License

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California Governor Jerry Brown is perpetuating a national security crisis and yet no one in any Federal capacity is even considering discipline, a memo or other consequence.

Governor Brown opened the pathway for 1.4 million illegals to get a drivers license while others pay a bribe in the case they cannot read English or pass a written test.

In 2010, the illegal phenomena began by the Obama administration when it came to omitting background investigations of illegals and the trucking industry took notice.

Eleven employees of New York’s Department of Motor Vehicles have received indictments for participation in a fraudulent CDL testing scheme.

Brooklyn’s U.S. District Court issued indictments Oct. 24 for 11 DMV security workers at five NYC-area centers. Applicants allegedly paid $1,800 to $2,500 for test answers and escort assistance through the DMV process.

There was and continues to be a mission to stop illegal trucking with the mission statement noted here.

California DMV employees allegedly traded cash for licenses

FNC: At least 100 commercial truck drivers paid up to $5,000 each to bribe California Department of Motor Vehicles employees for illegal licenses, federal authorities said on Tuesday.

Officials said up to 23 traffic accidents could be related to the fraud, though there were no fatalities.

Emma Klem, a 45-year-old Salinas DMV employee, and trucking school owner Kulwidner Dosanjh Singh, 58, both pleaded guilty Tuesday to commit bribery and identity fraud, U.S. Attorney Benjamin Wagner said.

Two other DMV employees in Salinas and Sacramento and two other Central Valley trucking school operators have been arrested on similar charges.

The employees changed computer records to falsely show that drivers had passed written and behind-the-wheel tests after they were bribed by the owners of three truck-driving schools between June 2011 and March 2015, according to court documents.

“Individuals who use their positions to obtain commercial drivers’ licenses for unskilled and untested drivers jeopardize our nation’s security and safety. Allowing unqualified drivers to operate heavy commercial trucks on our highways is honestly quite chilling,” said Carol Webster, acting assistant special agent in charge of the U.S. Homeland Security Investigations office in Sacramento.

 

DMV examiners Andrew Kimura, 30, of Sacramento and Robert Turchin, 65, of Salinas were indicted last week on charges of conspiracy, bribery and fraud in connection with identification documents, along with trucking school owners Pavitar Dosangh Singh, 55, of Sacramento, and Mangal Gill, 55, of San Ramon.

Pavitar Singh and Kimura have pleaded not guilty, while Turchin and Gill are expected to be arraigned on Friday in U.S. District Court in Sacramento.

Kimura’s attorney, William Portanova, said his client is a good person caught in an unfortunate situation, “but we’re going to work through it and help this young man.”

Class A commercial drivers’ licenses are required to operate trucks, including 18-wheel cargo semitrailers. They are tougher to obtain than regular driver licenses. Applicants must pass both a written test and a behind-the-wheel test that is offered at a limited number of DMV locations, including Salinas.

The DMV has canceled or revoked more than 600 licenses that are potentially linked to fraud, including 100 that were pinpointed by investigators, DMV chief investigator Frank Alvarez said. Drivers can retake the tests, sometimes after a hearing, and Wagner said none are likely to be prosecuted during the ongoing probe because investigators are targeting the organizers.

It is the latest in several similar bribery schemes in recent years, including a Fresno case involving 15 people that resulted in a sentence of more than five years in federal prison for the DMV ringleader in 2013.

Alvarez said his department is considering additional safeguards to prevent employees from altering computer records, and it’s attempting to better screen its 10,000 employees and the way it issues commercial drivers’ licenses as it tries to prevent more bribery and fraud crimes.

The charges filed in federal court in Sacramento allege three separate conspiracies. Two of them purportedly involved Gill, who owns trucking schools in Fremont, Lathrop, Fresno and Salinas.

The third involved Pavitar Singh, owner of a school in Sacramento. His attorney, Anthony Capozzi of Fresno, and an attorney for Klem did not return telephone messages.

Christopher Morales of San Francisco, attorney for Kulwinder Singh, said his client is a good family man who recognizes that he erred when he “took shortcuts” to help members of the Indian community who had trouble passing the tests.

His client and Klem face up to five years in prison when they are sentenced Nov. 17.

No attorneys were listed for the two defendants who have yet to appear in court