Your daily briefing for all the top news in Energy, Technology, Finance, and Politics.
Energy
U.S. Energy Firms Rewarded With Tax Deferrals
WALL STREET JOURNAL
Daniel Gilbert
Energy companies are spending billions of dollars a year to drill in shale formations across the country, sending the nation’s daily oil output up by almost 50% in just the past few years. Techniques like hydraulic fracturing and horizontal drilling, which make it possible to tap petroleum in these new fields, make each well cost millions of dollars. All that spending has allowed drillers to take advantage of incentives in the tax code for drilling and capital expenditures, deferring billions of dollars in income tax.
U.S. Hits China Solar Firms
WALL STREET JOURNAL
Biman Mukherji
The U.S. is shaking up the global solar-equipment industry by imposing heavy antidumping tariffs on Chinese makers, a move that is benefiting not just producers at home but also those operating in Asia and encouraging them to expand.
Anti-Fracking Laws vs. Property Rights
WALL STREET JOURNAL
Merrill Matthews
The growing efforts by state and local governments to stop hydraulic fracturing, or “fracking,” to extract natural gas could end up in the Supreme Court. These efforts may unconstitutionally limit property owners’ ability to profit from their mineral rights.
EPA Emissions Plan Draws Protest in Pittsburgh
WALL STREET JOURNAL
Kris Maher
Several thousand unionized coal miners, electrical workers and others filled this city’s downtown on Thursday to protest the Obama administration’s proposed rule to curb carbon emissions from the nation’s power plants, ahead of two days of hearings on the issue in the city. But in an indication of how the issue has divided the labor movement, several major unions were absent from the protest.
Oregon LNG wins natural gas export license
FUEL FIX
Jennifer Dlouhy
The federal government gave an Oregon project a coveted permit to broadly export liquefied natural gas on Thursday, even as the Obama administration faces criticism for moving too slowly on the proposals.
Northern Courier Approval Highlights Pipeline Politics
FUEL FIX
Brigham McCown
While clearly on a smaller scale than Keystone XL, (Northern Courier is about 90 kilometers in length compared to Keystone’s nearly 1,900 kilometer length) the speed with which Alberta’s Energy Resource Conservation Board completed the rigorous stakeholder outreach, environmental regulation compliance and mitigation process, was astonishingly efficient. After more than five years, the Keystone XL project is still under review, raising suspicion over the American political antics delaying the pipeline.
Technology
China Harasses U.S. Tech Companies
NEW YORK TIMES
Editorial
American businesses should recognize that doing business in China, while potentially lucrative, is bound to be difficult and fraught. The country is ruled by an authoritarian government that has scant concern for the rule of law when it comes to its own people. There is no guarantee that it will treat foreigners any better.
Rivals for T-Mobile could face different regulatory roads
POLITICOPRO (Subscribe)
Tony Romm
A French telecom giant has swooped in with a $15 billion offer for T-Mobile — and an even bigger pitch that such a transaction won’t trigger Washington’s scorn. … But a Sprint and T-Mobile deal surely would face an uphill battle in Washington, where few experts believe the companies have the backing of federal regulators. In contrast, telecom analysts already regard any combination of Iliad and T-Mobile — if it happens — far more favorably.
Inside the stressed-out, time-crunched patent examiner workforce
WASHINGTON POST
Brian Fung
Every year, the U.S. Patent and Trademark Office handles more than 500,000 new patent applications. With those figures only increasing, some patent examiners report they feel too crunched for time. Now, a new study by the National Bureau of Economic Research finds that the pressure to make decisions too quickly may be one reason the patent office grants “bad” patents — approving weak applications that never should’ve been granted in the first place — that allow patent trolls to thrive.
Judge orders Microsoft to turn over data held overseas
WASHINGTON POST
Ellen Nakashima
In a case closely watched in the United States and overseas, a federal judge in New York held Thursday that Microsoft must comply with a U.S. search warrant to turn over a customer’s e-mails held in a server overseas. … [Judge] Preska agreed to stay her ruling to allow the company time to appeal. Microsoft immediately announced its intention to do so.
Google Says It Has the Right to Notify Publishers of ‘Forgotten’ Requests
WASHINGTON POST
Sam Schechner
Facing mounting outcry from European Union privacy regulators over how it is is implementing the bloc’s new “right to be forgotten,” the search giant has gone public to defend its practice of telling websites when some of their content has been removed from some Google searches—arguing such flagging is essential to maintaining a fair balance in the new right.
Alibaba Is Investing Huge Sums in an Array of U.S. Tech Companies
NEW YORK TIMES
Mike Isaac and Michael J. de la Merced
The recent burst of activity — including a half-dozen investments in the United States over the past year or so — comes as the Internet behemoth prepares one of the most highly anticipated market debuts since Facebook’s two years ago. Alibaba is expected to begin trading in September at a market value of perhaps $200 billion, potentially making it one of the biggest initial public offerings ever.
Finance
Argentina’s default case offers clarity on sovereign debt
WASHINGTON POST
Editorial
In the meantime, however, the strict interpretation of borrower responsibilities that the U.S. courts endorsed in Argentina’s case probably won’t burden sovereign debtors, few of whom face anything like the predicament into which Argentina has mismanaged itself. The outcome may actually encourage lenders to provide funds and debtors to use it wisely — rendering debt restructurings less necessary in the first place. Markets thrive on transparency and clarity. And the battle between Argentina and the hedgies has certainly clarified U.S. law, to wit: If you borrow money, sooner or later, you have to pay it back.
Argentina: Solo Deadbeat
WALL STREET JOURNAL
Editorial
The government of Argentina has done it again. By flouting the rule of law and vilifying foreign investors, President Cristina Kirchner succeeded Wednesday in driving the country into its second default in 13 years. This isn’t the global financial disaster predicted by some on the left, but it is sad news for the people of Argentina.
Argentina Is in Default, and Also Maybe in Denial
NEW YORK TIMES
Alexandra Stevenson and Irene Caselli
Argentina may be in default, but you might not know it if you lived in Buenos Aires. Speaking to the nation in a televised news conference on Thursday, Axel Kicillof, Argentina’s economy minister, called it “atomic nonsense,” to say that the country had entered into a default.
What that $34 overdraft fee is really costing you
WASHINGTON POST
Danielle Douglas
Despite this “opt-in” policy, the CFPB said overdrafts continue to impose heavy costs on consumers who have low account balances. About 8 percent of customers at the nation’s largest banks incur nearly 75 percent of all overdraft fees, according to the study. That figure jibes with an earlier study from the Federal Deposit Insurance Corp. that also said nearly 50 percent of young adults incurred overdraft fees, with some recording more than 10 overdrafts in a year.
America’s Business Puzzle: Record Debt and Record Cash
WALL STREET JOURNAL
Theo Francis and Ted Mann
Since 2008, the Fed’s easy cash policies have allowed companies to buy back stock, pay dividends and make acquisitions largely without tapping cash from overseas subsidiaries. By leaving foreign profit overseas, companies avoid the sting of the U.S.’s 35% federal tax rate on it. The result is a peculiar situation in which U.S. companies simultaneously have issued record amounts of debt—both in nominal terms and as a percent of gross domestic product—and hold what appears to be record amounts of cash overseas.
Politics
Republicans deliver another self-inflicted wound
WASHINGTON POST
Dan Balz
Republicans may yet win the elections in November. They may end up in control of both houses of Congress come January. But in the final week before a lengthy August recess, they have shown a remarkable capacity to complicate their path to victory. The latest blow came Thursday in what has become predictable fashion: chaos in the House.
Congress shirks its duty to deal with a humanitarian crisis
WASHINGTON POST
Editorial
The truth is this country cannot maintain a policy that encourages vulnerable Central American children to risk their lives in a highly dangerous trek north. It’s politically unsustainable and morally indefensible. What’s needed, immediately, are resources to handle the influx at the border and accelerate the adjudication of their cases. Congress’s failure to provide them would be nothing short of shameful.
Obama’s Big Mac Attack
WALL STREET JOURNAL
Editorial
Sometimes it seems that President Obama’s appointees are competing for the prize of most outrageous legal invention. Consider National Labor Relations Board general counsel Richard Griffin’s attempt this week to punish McDonald’s for resisting the union agenda.
America’s Hidden Credit Card Bill
NEW YORK TIMES
Laurence Kotlikoff
The fiscal gap — the difference between our government’s projected financial obligations and the present value of all projected future tax and other receipts — is, effectively, our nation’s credit card bill. Eliminating it, would require an immediate, permanent 59 percent increase in federal tax revenue. An immediate, permanent 38 percent cut in federal spending would also suffice. The longer we wait, the worse the pain. If, for example, we do nothing for 20 years, the requisite federal tax increase would be 70 percent, or the requisite spending cut, 43 percent. Even if we do nothing — which, given Washington, is the likeliest outcome these days — we should at least be transparent about our insolvency.
The C.I.A.’s Reckless Breach of Trust
NEW YORK TIMES
Editorial
The accountability and the apologies, however, will have to go much further. It’s not just two senators that the C.I.A. has offended by this shocking action. It is all of Congress and, by extension, the American public, which is paying for an intelligence agency that does not seem to understand the most fundamental concept of separation of powers. That concept means that Congress is supposed to oversee the intelligence community and rein in its excesses. It cannot possibly do so effectively if it is being spied on by the spy agency, which is supposed to be directing its efforts against foreign terrorists and other threats to national security.
Why Democrats Are Ditching the ‘War on Women’
NATIONAL JOURNAL
Emily Shultheis
“[Saying] ‘Republicans are waging a war on women’ actually doesn’t test very well,” said Democratic pollster Celinda Lake. “Women find it divisive, political—they don’t like it.” So Democratic candidates, who need to expand their margins among female voters and bring unmarried women to the polls in November, are shifting the language they use to pitch these issues to voters. Instead of the “war,” Lake said, testing has shown more effective language casts Republicans’ positions as “too extreme” or the GOP as “out of touch with women’s lives.”
