TPT January 2018

G LOBA L MARKE T P L AC E

G LOBA L MARKE T P L AC E

the regulation of oil, gas and mineral profits around the world. According to a directive from the White House, the US, which joined EITI in 2014 during the term of President Barack Obama, is parting company with 51 other member-nations in the organised effort to fight corruption in the oil and gas sector. EITI participants are required to disclose not only their revenues from oil, gas and mining assets, but also what they paid various governments. India’s Financial Express pointed out that a 2014 report from the Organisation for Economic Co-operation and Development (OECD) – analysing more than 400 international bribery cases – showed that almost two-thirds of them involved just four industries: resource extraction, construction, transportation and storage, and communication. “EITI put more information in the hands of the public,” Michael Ross, executive director of the Project on Resources Governance and Development at the University of California (Los Angeles), told Reuters. “It involved the US government disclosing all the money it was getting from oil, gas and mining companies and getting these companies to publicly disclose the payments they were making.” President Donald Trump has complained that EITI implementation does not “fully account for the US legal framework.” Whatever that might mean, the Financial Express took note of speculation that a factor in the withdrawal is the disinclination by Mr Trump’s administration to pay arrears in EITI dues that run to hundreds of millions of dollars. Irrespective of motivation, the decision was widely deplored, not least by the Oslo, Norway-based EITI itself. “[Our endeavour] is making important gains in global efforts to address corruption and illicit financial flows,” the EITI board said. “It’s important that resource-rich countries like the US lead by example.” › The oil abundance of the US is very apparent, and according to the Energy Information Administration production continues to grow. Topping 2 million barrels per day (bpd) for the first time, US crude oil exports hit a record 2.133 million bpd in the last week of October. The agency said average daily production stood at 9.55 million barrels, up by 46,000 bpd from a week earlier and from 8.52 million bpd a year earlier. A voluntary alliance of the ten major oil and gas companies in the world announces its first Climate Investments recipients In its first specific action aimed at supporting more efficient engine technology and the growth of low-carbon technologies, on 27 October the Oil and Gas Climate Initiative (OGCI) said that it had made its first three investments. As reported by Tsvetana Paraskova on the energy news site Oilprice.com (27 October), undisclosed amounts of venture capital will go to cement and concrete maker Solidia Technologies (Piscataway Township, New Jersey); Achates Power (San Diego, California), which develops vehicle

The US economy Even with no appreciable accomplishments out of Washington, positive economic trends continue to buoy the US Closely watched third-quarter 2017 results clearly showed that Hurricanes Harvey and Irma had little adverse effect on the economic expansion in the US, estimated at an annual rate of 3 per cent. As noted in late October by Gina Chon, the Washington columnist for Reuters Breakingviews , an increase in goods made-but-not-sold helped; but so did global growth and healthy corporate earnings. Growth in consumer spending, which makes up two-thirds of US economic output, slowed to 2.4 per cent but was expected to rebound as the effects of the hurricanes faded. And rising inventories contributed just over 0.7 per cent to growth, suggesting that companies think consumer demand may pick up. Other positive signs in the quarter included a 3.9 per cent increase in business investment, which had been lagging; and a 2.3 per cent increase in exports, which added more than 0.4 per cent to economic growth over-all. These were aided by global expansion, with world economic growth in sync for the first time in years and Europe catching up with the US. The International Monetary Fund projected an increase in the global economy of 3.6 per cent in 2017 and 3.7 per cent growth this year. Whether or not President Donald Trump succeeds in getting the corporate income tax rate cut to 20 per cent from a (maximum) 35 per cent, companies were doing well. The Nasdaq reached a record high after tech groups like Amazon and Microsoft reported strong third-quarter earnings. And, with a jobless rate of 4.2 per cent, the US is nearly at full employment. Ms Chon of Reuters cautioned (27 October) that protectionism could put these positive economic trends at risk. She sees harmful trade policies as the biggest danger, including disintegration of the North American Free Trade Agreement (NAFTA) among Canada, the US and Mexico. With negotiations on NAFTA not going well, she wrote, “The best that can be said is that Mr Trump has not yet done the economy harm.” Oi l and gas The US exits a global anti-corruption effor t that compels oil, gas and mining companies to disclose revenues and payments On 2 November it was announced that, effective immediately, the US was withdrawing from the Extractive Industries Transparency Initiative (EITI), founded in 2003 to advance

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JANUARY 2018