Posts Tagged ‘environment’

China revamps bureaucracies as Xi tightens grip — A “regulatory windstorm” against financial risk — “financial security” is essential to national security

March 13, 2018
No automatic alt text available.

China has unveiled a sweeping revamp of its government bureaucracies, breaking up traditional power structures as President Xi Jinping attempts to fuse the ruling Communist party into the day-to-day operations of the state.

Among the biggest changes is the creation of a National Supervision Commission that combines party discipline and state judicial functions, reversing a division of labour that has been in place for decades.

The revamp also includes the merging of its banking and insurance regulators in an effort to plug regulatory loopholes that have enabled shadow bank activity, the latest move in Beijing’s “regulatory windstorm” against financial risk.

Other changes include the reshuffle of oversight of the environment, land and natural resources into two new ministries, according to a state council document. China’s rubber-stamp parliament is expected to approve the plan formally this week.

“Now the party institutions and government institutions dovetail,” Liu He, a top adviser to Mr Xi, wrote in the People’s Daily, the Communist party’s media mouthpiece.

“Strengthening the comprehensive leadership of the party is a core issue. The party, the army, the government, the people, the schools, north, south, east, west and centre, the party leads them all,” he wrote.

The revamp will cut the number of ministry-level agencies by eight and deputy-ministry level agencies by seven, according to the State Council, which co-ordinates government ministries.

“The next step is to firmly support the authority of the party and the centralised and unified leadership of the party,” the statement said. “It is the hope of the people and the wish of the grass-root units” of the party.

“It’s much more of a rationalisation, trying to consolidate functions among ministries, rather than a downsizing,” said Dali Yang, a Chinese policy expert at the University of Chicago. For multinational companies “the rationalisation (of ministry functions) could make the government easier to deal with. But the centralisation of powers means negotiations might also be tougher.”

For instance, health ministry reforms will cement the co-ordination between health and state insurance fund officials over drug procurement, which in recent years has given the government greater leverage to negotiate with companies to lower drug prices, said Qiu Min, an analyst at Huachuang securities. “In the future multinationals won’t have to communicate with so many departments,” he added.

But fusing the party and state structures unwinds reforms set in motion at the beginning of the reform period, to establish a professionalised civil service that can manage a complex modern economy.

Beijing agency merger targets financial risk

The combination of the China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission (CIRC) is part of a plan to merge, axe or newly create more than a dozen agencies.

Chinese policymakers have since last year prioritised tackling financial risk, with President Xi Jinping describing “financial security” as essential to national security. Mr Xi has also called for an end to the pursuit of economic growth at all cost, which has led to dangerously high debt levels, with non-bank lending comprising an increasing share.

The government “must attach great importance to preventing financial risk and safeguarding national financial security”, the parliament said. Combining the two agencies aims to “solve the problems of unclear regulatory responsibility, overlap and regulatory blank spaces”, it added.

The move will help address “regulatory arbitrage”, where financial institutions have shopped between agencies to take advantage of the most favourable rules under which to issue financial products.

“Chinese banks and insurance companies are interacting their business in recent years. It’s hard to separate this interaction, and regulators need more and more co-ordination,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis in Hong Kong. “It is an absolute must for China since shadow banking and banks are totally interrelated.”

Follow @gabewildau on Twitter


Poland guilty of breaching air quality norms, top EU court finds — financial penalties if Poland does not comply swiftly

February 22, 2018

The European Commission took Poland to court in 2015, saying the country had failed to rein in air pollution. The court also noted that Poland’s plans to meet EU air quality standards were not effective enough.

Warsaw's Mermaid of Warsaw wearing a pollution mask

The European Court of Justice on Thursday found Poland guilty of violating air quality norms and warned of financial penalties if Poland did not comply swiftly.

The case was brought against Poland in December 2015 by the European Commission, which found that the daily limit for harmful air pollutants had been regularly breached in most parts of the country between 2007 and 2015.

The European Commission has also warned of legal action against nine other EU members, including Germany, if they did not come up with concrete plans to rein in air pollution.

Read moreGermany’s air pollution: Clean up or pay up

Under a 2008 EU rule, member states are obliged to limit air pollution to protect human health. More than 400,000 people die prematurely across the bloc every year due to poor air quality, according to recent estimates.

Ineffective plan

The court also found Poland’s plans to curb air pollution ineffective, saying the existing plans would not bring air quality in line with EU standards between 2020 and 2024.

Read moreCan free public transport really reduce pollution?

Poland argues that its economic and financial situation makes an earlier implementation of EU law difficult.

“[Poland’s argument] cannot, in itself, justify such long deadlines for putting an end to those excesses,” the court said.

ap/ng (dpa, AFP)

German court considers banning diesel cars in cities to tackle pollution, protect public health

February 22, 2018


Cars pass by a sign reading ‘environment zone’ and allowing entrance just for cars with low emissions recognizable on a green sticker in Frankfurt, Germany. (dpa via AP)
BERLIN: A German court began considering Thursday whether authorities should ban diesel cars from cities in order to lower air pollution, a move that could have drastic consequences for the country’s powerful auto industry.
The Federal Administrative Court in Leipzig is hearing an appeal by two German states against lower court rulings that suggested driving bans for particularly dirty diesel cars would be effective and should be seriously considered as a means of protecting public health.
The court has said a verdict could be issued as early as later Thursday. If judges reject the appeal, dozens of cities would have a few months to enact measures to remove heavily polluting diesel vehicles from the roads — an administrative nightmare for local authorities and a heavy blow to drivers who bought cars they were promised met emissions standards.
Image result for diesel vehicles, photos, showing exhaust
The original court cases were brought by the group Environmental Action Germany, which accuses the government of putting automakers’ interests before people’s health.
“We expect to be protected, that decisions will be taken which bring down emissions to a level that provides a healthy living for us,” said Axel Friedrich, a representative of the group.
German car manufacturer Volkswagen was found three years ago to have used in-car software to cheat on US diesel emissions tests. The discovery resulted in large fines and costly buybacks for VW in the US, but the German government has refrained from punishing VW, a major employer that’s partly owned by the state of Lower Saxony.
Apart from hitting Volkswagen and other German carmakers, officials warn that a ban could paralyze bus companies, garbage collection services and tradespeople who rely heavily on diesel vehicles.
The European Union is also putting pressure on Germany and other countries for failing to rein in air pollution.
In a bid to avoid punitive action by the EU, German officials recently proposed a series of steps to reduce harmful emissions, including making public transport free on days when air pollution is particularly bad, and requiring taxis and car-sharing companies to use electric vehicles.
Image result for diesel vehicles, photos, showing exhaust
Automakers are particularly worried about another government proposal: forcing them to physically upgrade millions of vehicles that don’t conform to emissions limits.
Protesters outside the Leipzig court said a diesel ban would make a positive difference in their lives.
“When I cycle, especially in winter, I have to breathe the emissions,” said Manfred Niess from Stuttgart. “I avoid breathing in deeply so as not to inhale all the poison.”

Four Indonesian provinces, including Riau, declare disaster alerts for forest fires

February 21, 2018

 Image may contain: cloud, sky, nature and outdoor

Smoke rises from a peatland fire in Pekanbaru, Riau on Feb 1, 2018. It is one of 73 detected hot spots causing haze on the island of Sumatra. PHOTO: AFP

JAKARTA – Four Indonesian provinces – including one that sits at Singapore’s doorstep – are officially on disaster alert after a rising number of hot spots were detected within their boundaries.

Riau, South Sumatra, West Kalimantan and Central Kalimantan provinces have declared disaster alert status, said Dr Sutopo Purwo Nugroho, the spokesman for the country’s disaster management agency (BNPB), in a press statement on Wednesday (Feb 21). All four provinces are located around the equator, with Riau being closest to Singapore.

The disaster alert status means that the national government in Jakarta will be able to step in more easily and with less red tape to deal with raging fires, deploy troops and provide logistics and funds, Dr Sutopo said.

“The number of hot spots has continued to increase. In the past week, the most number of hot spots was found in West Kalimantan province. Pontianak is blanketed by haze,” Dr Sutopo said.

In the past 24 hours through 7am on Wednesday, there was a total of 78 hot spots across Indonesia, according to the Terra and Aqua satellites, based on a confidence level of between 30 per cent and 79 per cent.

West Kalimantan province recorded the highest number at 23 hot spots, followed by West Java at 14, Central Kalimantan with 12, Riau at nine, Riau Islands and Papua each with four, Central Java three, West Papua, East Java and Maluku each with two, and Banka-Belitung Islands, North Maluku and South Sumatra each with one.

 Image result for Riau, South Sumatra, West Kalimantan , Central Kalimantan, indonesia, map

Indonesian provinces located near the equator are now in their first phase of the dry season, which usually runs from early in the year to some time in March. The rainy season then sets in at these provinces in March and lasts till May before another, more intense dry season from June to September.

“Forest and plantation fires usually pick up in the second (June-September) dry season there,” Dr Sutopo said.

The authorities are stepping up their efforts to manage forest and plantation fires. There will be more land and air operations, regular patrols and tighter law enforcement, Dr Sutopo said. Public campaigns against slash-and-burn tactics and on public health are also being ramped up, he added.

Indonesia is deploying joint forces from BNPB’s provincial branches, the armed forces, forestry agency fire fighters, city fire fighters, and civil security officers, among others, Dr Sutopo added.

BNPB has also kept aircraft ready for cloud seeding and helicopters for water bombing.


Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1.
Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1, 2015. Photo: Getty Images


Singapore Central Business District, or CBD skyline is covered with a thick haze.


Image may contain: one or more people

An Indonesian woman and a child walk on a bamboo bridge as thick yellow haze shrouds Palangkaraya on Oct 22, 2015. AFP photo


Cambodia jails two environment activists for filming sand export activity

January 26, 2018

Image result for cambodia, sand export, photos

A huge haul of river sand dredged in Cambodia

By Prak Chan Thul

U.N. plans international panel to tackle plastic waste in oceans

January 25, 2018


The United Nations will form a panel to discuss measures to reduce plastic waste in the oceans, a source close to the matter has said.

Members of the panel, to be recommended by U.N. member countries, will study what options are available, what alternatives to plastic there can be and how effectively they could help remove around 10 million tons of such waste flowing into the oceans every year, the source said Saturday.


The panel will discuss policies that would include a potential legally binding international treaty and give guidance about what steps could be introduced in developing nations in particular, where the situation has become grave.

The panel will meet once or twice a year and report their discussions at the fourth session of the U.N. Environmental Assembly, to be held in Nairobi in March 2019, according to the source.

Some 8 million to 12 million tons of plastic waste are estimated to flow into the oceans every year, greatly affecting marine ecosystems and environments. There will be more plastic than fish in the oceans by 2050, according to an estimate by the United Nations.

The European Commission has adopted a policy to ensure that all plastic packaging is recyclable by 2030.


Discarded plastic bottles and other garbage blocks the Vacha Dam, near the Bulgarian town of Krichim, on April 25, 2009. Single-use plastic containers like bottles and plastic bags are “the biggest source of trash” found near waterways and beaches, according to the nonprofit Ocean Conservancy.

Among developing countries, Kenya and Rwanda have banned the use of plastic shopping bags, but some are still lagging behind in adopting such measures.

Pollution from microplastics, which are created from plastics that break into small pieces with a diameter of less than 5 millimeters while floating in the sea, is also becoming a serious issue.

As microplastics absorb hazardous chemicals, they pose a danger to sea birds and fish that ingest in accidently.

Hideshige Takada, professor at Tokyo University of Agriculture and Technology, said the need to strengthen such measures is increasing and it is important for societies to reassess their reliance on plastic.

Read also:

The Oceans Are Drowning In Plastic — And No One’s Paying Attention — “We’re being overwhelmed by our waste.”

Donald Trump After one Year With Davos Up Next

January 19, 2018

Much of the attention on US President Trump focuses on what he says and tweets. But in his first year in office he has already had a significant impact on key issues affecting people in the US and around the world.

Donald Trump (Reuters/A.P. Bernstein)

International Trade

Donald Trump has made it repeatedly clear that he prefers bilateral trade agreements over multilateral ones. Since he took office, the US President has stopped the United States’ participation in negotiations over a Trans-Pacific Partnership (TPP) and put negotiations over a free trade deal between the US and the European Union (TTIP) on hold. In addition, he threatened to cancel the North American Free Trade Agreement (NAFTA), forcing Mexico and Canada to re-negotiate the terms of the agreement. Meanwhile, America’s competitors are continuing their efforts to reduce trade barriers between them: The European-Canadian free trade agreement CETA went into effect in 2017, and 11 countries on both sides of the Pacific are continuing their efforts to establish a Trans-Pacific Partnership agreement without the US. Although China is not part of the TPP negotiations, Trump’s critics fear that the US withdrawal will further strengthen China’s influence on commerce in Asia and the Pacific region.

Trump signing an orderTrump signed an executive order withdrawing the US from the TPP

Read moreOpinion: Donald Trump’s policies have fed China’s rise as world power

Business and Finance

Donald Trump’s first year in office was a good year for shareholders and other investors in the stock market: The Dow Jones Industrial Index rose from 18,589 points on the day after Trump’s election to more than 25,800 in mid-January. Compared to that, the Dow rose only moderately in President Obama’s first year in office (in the middle of the global financial crisis), but Obama also saw the Dow more than double over his full eight years in office: from just over 9,000 to more than 18,000. Also, under Trump the unemployment rate decreased from 4.8 percent a year ago to 4.1 percent today (when Obama took over from George W. Bush though, the unemployment rate was at around 8 percent).

Trump’s biggest legislative achievement, a tax reform signed into law at the end of December, reduces the corporate tax rate from 35 to 21 percent, and reduces income taxes for individual citizens across the board while doubling standard deductions. By far the biggest share of those cuts, however, benefits companies and high earners: Taxpayers earning more than $700,000 (€574,000) a year, who make up 1 percent of all taxpayers, will receive 20 percent of the total tax cut. And while the tax cuts for businesses are permanent, the reductions for individual taxpayers will expire after 10 years. The tax cuts are financed on credit, leading to an increase in the federal budget deficit of about $1 trillion over the next 10 years, according to the non-partisan Joint Committee on Taxation.

Health and Social Security

Trump and the Republicans in Congress failed to repeal and replace the Affordable Care Act (ACA), also known as Obamacare, the signature bill of Trump‘s predecessor in the White House. But in the 2017 tax reform, they did manage to repeal the “individual mandate,” a provision that demands that every American has to have health insurance, or otherwise pay a penalty. Without the Individual Mandate, less young and healthy Americans will be inclined to buy health insurance, leading to higher premiums for everybody else. The bipartisan Congressional Budget Office estimates that, as a result, the number of uninsured Americans could increase by up to 13 million. Meanwhile, leading Republicans in Congress — including House Speaker Paul Ryan — are advocating reductions on future spending on social security and other so-called entitlement programs — partly to offset the increase in the federal budget deficit caused by the 2017 tax reform.

Public discourse/Newspeak

Book presentation Fire and Fury: Inside the Trump White House Trump has left his mark on public discourse

What Donald Trump has done to public discourse is best summed up by stating that since his taking office it is generally no longer advisable to quote the president of the United States in the presence of children. Just in time for the first anniversary of his inauguration, Trump made sure to remind people, when he described Haiti and African nations as“s***hole countries,” something he later denied.

But it is not just the fact that the president has coarsened public discourse and routinely utters falsehoods at a staggering pace, (according to the Washington Post, who tracks his remarks, he made more than 2,000 false or misleading claims since taking office) with one of his earliest erroneous claims concerning the crowd size following immediately after his inauguration.

 Trump’s war against fake news

At least as disconcerting is the fact that the Trump administration has apparently shunned various words and phrases from public websites. According to a new report from the EDGI (Environmental Data and Governance Initiative), an international group of researchers, “climate” is a key word that has been rephrased or scrubbed from Trump administration websites, especially from the pages of the Environmental Protection Agency (EPA). While the scrubbing of words like “climate” from government websites has been confirmed, media reports that other agencies like the Centers for Disease Control (CDC) have banned the usage of certain words have been denied by officials.

Shrinking the government

Under Trump the size of the federal workforce has been shrinking. At the end of September, according to official data, the US government had 16,000 fewer permanent employees than at the end of 2016.

Beyond reducing the number of permanent employees the Trump administration has also still not filled many key governmental positions. In fact, according to the nonpartisan Partnership for Public Service which tracks the confirmation process, the Trump administration has still not filled 245 of 633 key positions that require Senate confirmation, among them such important posts as that of ambassador to South Korea.

Appointment of judges

Probably one of the most lasting impacts — and certainly most irreversible since it is a lifetime position — of the Trump presidency is his appointment of Neil Gorsuch to the Supreme Court. At 50, which is young for a Supreme Court judge, the conservative Gorsuch will likely remain at and shape the highest court for years to come. But Trump’s success at appointing conservative judges to the bench extends beyond the Supreme Court. Trump has also managed to get 19 additional top level judges confirmed by the Senate, among them a record number of 12 circuit court judges, which will likely leave their judicial imprint on the country for decades to come.

Foreign policy

While Trump continues to criticize NATO member states for not contributing enough, he has upped the money and American personnel dedicated to defend the alliance’s Eastern flank. Beyond Europe, Trump has engaged in what is widely viewed as a dangerous name-calling game with North Korea’s leader regarding the country’s rapidly advancing nuclear weapons program and Pyongyang’s aggressive behavior. By recognizing Jerusalem as Israel’s capital as well as charting a tougher course vis-à-vis Cuba and the Iran nuclear deal, Trump has reversed decades of US foreign policy on the former and his predecessor’s stance on the latter issues. Generally though, many observers find that the Trump administration led by a president who is deeply unpopular in many parts of the world, still lacks a coherent foreign policy strategy.

Read moreDonald Trump’s presidency: Taking stock and looking ahead


Protests against Trump's DACA plansTrump’s immigration policy has sparked protests across the country

With the number of illegal border crossings down by 40 percent at the US-Mexican border last year according to official figures and an ongoing crackdown on undocumented immigrants by the Trump administration, immigration is one of the issues where the president has had a deep impact affecting tens of thousands of people in the US and around the world. While Trump’s travel ban against several countries is still tied up in the courts, the administration has signaled it will end the protected status that allows more than 200,000 people from El Salvador, Haiti and Nicaragua to remain in the United States. Trump has also ended the DACA program and repeatedly hammered the diversity lottery program that enables some 50,000 people from various countries to come to the US per year and wants to end it. And even though illegal border crossings have already dropped significantly, Trump still wants to fulfill his promise to build a wall along the US-Mexican border.


One of Donald Trump’s first decisions as President was to name Scott Pruitt as head of the Environmental Protection Agency (EPA). A very controversial choice, as Pruitt is an outspoken climate-change skeptic who believes that the authority of the agency he now leads should be drastically reduced. As attorney-general in Oklahoma, he repeatedly sued the EPA. Since taking office, Pruitt loosened regulations designed to reduce pollution from coal and gas power plants, vehicle emissions, mining, landfills and oil and gas drilling. A new and controversial proposal by the EPA would also allow offshore drilling along most coastlines of the US. In addition, the Trump administration has given the Green Light to controversial projects such as the Keystone XL oil pipeline, oil drilling in the Arctic National Wildlife Refuge in Alaska and a review of the size of dozens of protected areas throughout the country; Last, but certainly not least, Trump also pulled the US out of the Paris climate change agreement.

USA Nebraska Keystone Pipeline By giving the green light for the Keystone Pipeline Trump reversed his predecessor’s stance

Consumer Protection

Reducing regulations for businesses is one of the main themes of the Trump administration not only with regard to the environment, but also when it comes to consumer protection. In a move mirroring Trump’s approach towards the EPA, he appointed Mick Mulvaney, a fierce critic of the powerful Consumer Financial Protection Bureau, as its new (temporary) director. The bureau, or CFPB, was established in the wake of the 2008 financial crisis to protect consumers against malpractice from banks and other financial service providers. Meanwhile, the Federal Communications Commission, led by Trump-appointee Ajit Pai, scrapped the so-called net neutrality regulations that prohibited broadband providers from blocking websites or charging for higher-quality service or certain content. Pai argues that less regulation will increase competition, thus lowering prices for consumers and fueling innovation. But critics fear that broadband providers could favor big companies which can afford to pay for high-speed internet and better access for their products, while small businesses and start-ups would be disadvantaged, giving costumers less choice.

Trump Administration Proposes Massive Expansion of Oil Drilling — “We’re going to become the strongest energy super power,” Secretary of the Interior Ryan Zinke says

January 4, 2018

Plan would open 90% of offshore areas for drilling starting in 2019

WASHINGTON—The Trump administration wants to open up nearly all the country’s offshore areas for oil drilling, leasing areas off places like Florida and California for the first time in decades, and reversing an Obama-era policy.

Secretary of the Interior Ryan Zinke announced Thursday that his department is planning the largest number of oil-lease sales in U.S. history starting next year. It would open up 90% of offshore land for drilling as part of a five-year plan. It reverses an Obama-era plan that would have kept only 6% of the same acres available for drilling.

“We’re going to become the strongest energy super power,” Mr. Zinke said in a call with reporters. “We certainly have the assets to do that.”

While the plan is likely to please the oil industry and its supporters who want more access to domestic oil lands, it is already meeting opposition even from Republicans. Florida Gov. Rick Scott said Thursday he opposes opening drilling off Florida, and he has support from environmental groups and the tourism industry.

“It’s absolutely radical,” said Diane Hoskins, climate and energy campaign director at Oceana, an environmental group focusing on the world’s oceans and an opponent of expanded coastal drilling. “Expanding offshore drilling threatens the livelihood and the coastal economies that rely on a healthy ocean.”

Write to Tim Puko at

California Poses Problem for GOP as 2018 Dawns

January 1, 2018

Party policies ranging from taxes to immigration cast a shadow over midterm prospects

California is the nation’s most populous state, home to 53 seats in the House, reservoir of 55 Electoral College votes—and a growing political problem for Republicans as the 2018 midterm election year dawns, Gerald F. Seib writes.


California is the nation’s most populous state, home to 53 seats in the House of Representatives, reservoir of 55 Electoral College votes—and a growing political problem for Republicans as the 2018 midterm election year dawns.

GOP fortunes have been declining for the last two decades in California, a trend that may be accelerating. The recently passed tax-cut bill, with its limits on deductibility of state and local taxes and mortgage interest, seemed almost designed to strike at high-tax states with pricey real estate such as California. As a result, two of the 12 GOP House votes against the measure came from California representatives, while some of the state’s Republicans who voted for the measure did so with misgivings.

Meanwhile, President Donald Trump’s immigration policies are widely unpopular in a state with a large population of Hispanics and Asian-Americans. Both the state and the city of San Francisco are suing the administration over its attempt to cut federal funds to so-called sanctuary cities, which decline to help federal authorities find and deport illegal immigrants.

The president’s decision to withdraw from the Paris climate accords, and his tendency to dismiss fears of global warming, cut against the grain in California, home of some of the country’s most environmentally attuned citizens. Republican efforts to undo Obamacare also are an irritant in a state that has tended to strongly support the law.

Add it all up and a bad situation for Republicans could easily get worse. Democrats already hold both of California’s Senate seats, its governorship, virtually all statewide offices and 39 of its 53 House seats.

Now even some of the 14 House seats California Republicans do hold are in jeopardy in this year’s midterm election, when control of Congress hangs in the balance. Half of those Republican incumbents come from districts carried by Democrat Hillary Clinton in the 2016 presidential contest.

The Cook Political Report rates eight of the 14 House districts Republicans hold as highly competitive this year, and calls three of them tossups, meaning Democrats’ chances of seizing them are roughly equal to the GOP’s chances of retaining them.

In short, in a year in which Democrats will be gunning to take over 24 House seats to win back control of the House, California sits atop their target list.

“These Republican incumbents are still in a very difficult position,” says Dan Schnur, a former Republican political consultant who now is a professor at the University of Southern California’s Annenberg School of Communications.

He wrote a piecein the Los Angeles Times recently asserting that California Republicans “have been left hanging by their national party leadership, whose focus seems to be squarely on the needs of their colleagues in more conservative parts of the country.” The Los Angeles Lakers, he noted, have more players on their roster than California Republicans have representatives in Congress.

Mr. Schnur thinks the new tax cut, despite provisions that are problematic in California, may prove a marginal benefit to some of the California Republicans, because it will help energize the GOP base and shift the focus of debate toward economic issues and away from the social issues that separate many Californians from the national Republican party.

Still, he adds, “the biggest challenge for these suburban Republicans is more cultural than it is legislative. They’re are a lot more uncomfortable with Trump’s behavior than they are with his policy agenda.” Immigration, he adds, looms as “the biggest challenge for Republican incumbents.”

Even if Republicans manage to hold their own in this year’s midterm elections, the state is likely to remain a forbidding land for the GOP in presidential politics.

It’s hard to believe now, but California was, not so long ago, a bedrock for Republican presidential ambitions. Its stash of electoral votes “gave Republicans a near lock on the presidency in the 1970s and 1980s,” notes the Almanac of American Politics.

That began turning in the 1990s. Among other factors, Gov. Pete Wilson won re-election while supporting Proposition 187, a ballot measure designed to ban state aid to illegal immigrants. Republican fortunes among Hispanics began to decline, and the party’s broader fortunes followed suit.

By 2012, then-President Barack Obama carried California with 60% of the vote. In 2016, Mrs. Clinton won 62% of the vote, and 900,000 more raw votes than did Mr. Obama four years earlier.

Four of California’s counties switched from Republican to Democrat in 2016, including Orange County, long a bastion of Republican party conservatives.

Orange County hadn’t gone Democratic since the time of Franklin Roosevelt. Now the two conservatives who represent the county in Congress, Reps. Dana Rohrabacher and Darrell Issa, are among the House’s most imperiled incumbents — and were the two Californians who voted against the just-passed tax bill.

Write to Gerald F. Seib at

Russia Bets on Shale Oil to Defend Its Spot as Top Producer of Crude

December 29, 2017

With many Soviet-era oil fields in decline, Russia will need new sources by the mid-2020s if it wants to maintain production

Image result for KRASNOLENINSKOYE OIL FIELD, Russia, photos

Companies like Gazprom Neft are leading Moscow’s drive to replicate the U.S. shale boom

KRASNOLENINSKOYE OIL FIELD, Russia—This western Siberian oil field is called “Red Lenin,” but its reserves have a distinctly American ring: shale.

The future of the Russian oil industry could lie in the vast Bazhenov shale formation, the largest in the world. Russia has become the biggest global producer of crude oil with almost no contribution from shale, a sometimes technically difficult and expensive resource to pump.

Only Americans have really gotten shale right so far, but the Kremlin is taking the first steps to unlock Russia’s potential.

Companies like PAO Gazprom Neft are leading Moscow’s drive to replicate the U.S. shale boom, experimenting with a uniquely Russian, state-controlled approach to fracking that contrasts with the free-for-all among independent producers in Texas and North Dakota.

“The Bazhenov is a huge prize,” says Alexei Vashkevich, Gazprom Neft’s exploration director.

The Kremlin is offering tax breaks for shale production and encouraging collaboration among companies and other players such as research institutes, hoping that fracking can help stave off a reckoning for its oil industry.

Mr. Vashkevich, who worked on the Bakken Shale formation in North Dakota for Hess Corp., said Russian shale will develop in a fundamentally different way from U.S. counterparts.

Alexei Vashkevich, Gazprom Neft’s exploration director.Photo: Davide Monteleone for The Wall Street Journal

Russia’s giant oil companies aren’t renowned for the kind of risk-taking, innovation and speed at the heart of shale producers’ success in the U.S.

“Here, 90% are big players with a culture of secrecy. Historically, we are slower,” Mr. Vashkevich said. Other challenges include an underdeveloped services sector and extreme weather.

No significant shale production is expected before the mid-2020s. With the Bazhenov’s complex and varied geology and other risks companies face here, executives and analysts are wary of making output forecasts.

“I don’t think anyone is going to be jumping up and down in 2020 and saying [shale] is the savior of the Russian oil industry,” said James Henderson, director of the natural-gas program at the Oxford Institute of Energy Studies, an independent research organization.

But the size of the Bazhenov—which holds almost as much oil as all the known U.S. shale plays, according to the U.S. Energy Information Administration—offers a chance for Russia to maintain its prized position as the world’s top producer of crude in coming decades.

Developing shale is important to the ambitions of Russian President Vladimir Putin, whose government depends on oil and gas for around one-third of federal budget revenues. In Mr. Putin’s 17 years as Russia’s leader, crude has fueled spending that has underpinned his popularity at home and efforts to spread influence abroad.

No automatic alt text available.

Russia’s main Soviet-era fields are declining, and the country will need new sources by the middle of the next decade if it wants to maintain its production, oil executives and industry analysts say.

U.S. and European sanctions over Ukraine have hurt Russian companies’ ability to get the technology needed for hydraulic fracturing and horizontal drilling, the techniques used to blast oil out of shale formations. But sanctions aside, few countries besides the U.S. and Canada have had real success with fracking, an often high-cost technique that rewards entrepreneurial risk taking and benefits from a looser regulatory regime. Efforts have sputtered in China, Poland and Romania, while fracking isn’t allowed in Germany and France over public concerns over the technique’s impact on the environment, particularly drinking water.

Until recently, Russian oil officials had focused on new conventional projects and old Soviet fields, where they boosted production by making scores of small gains. The result was that Russia surpassed Saudi Arabia as the world’s biggest producer of crude oil, pumping a post-Soviet record of over 11 million barrels a day in 2016. Improving output at conventional oil fields will remain an important piece of staving off decline in Russian production.

Gazprom Neft, Russia’s fourth-largest oil producer, is seen as a leader in Moscow’s drive to replicate the U.S. shale boom.

Gazprom Neft has revamped its approach to shale. Previously focused on a partnership with Royal Dutch Shell PLC, it is now moving ahead with new technologies to squeeze out oil from the Bazhenov and, hopefully, begin real production at the start of the next decade.

The company is working with technical universities and service providers on a methodical strategy. Mr. Vashkevich says it has drilled 18 wells of some 120 that he says it will need to find the sweet spot for the production rate and technology costs.

The control room at the Gazprom Neft science and research center in St. Petersburg.Photo: Davide Monteleone for The Wall Street Journal

At a well pad on the Red Lenin field, reached by roads that turn to sludge in fall rains and freeze over in winter, a couple of engineers check progress at a site surrounded by seemingly endless forests. Much of the work is done at a gleaming drilling hub in the center of St. Petersburg, where the company’s top minds monitor drilling.

Russian oil companies have an advantage that U.S. firms didn’t have: The Bazhenov formation lies underneath existing oil fields, meaning much of the infrastructure to develop it is already in place.

Early results are promising, executives say: Gazprom Neft says it has achieved about half the daily production at wells that it needs for commercial production.

Still, even the company doesn’t expect a production boom. It forecasts that shale oil from the Bazhenov could make up 2.5% of its total oil-and- gas production in 2025.

“It will take a little longer, but we’ll get there nonetheless,” Mr. Vashkevich said.