Today on New Scientist: 3 September 2010

All today’s stories on newscientist.com at a glance, including: why your brain flips over visual illusions, the new Gulf oil rig fire, and the unpredictable “sixth extinction”

Banks Grow Wary of Environmental Risks

Blasting off mountaintops to reach coal in Appalachia or churning out millions of tons of carbon dioxide to extract oil from sand in Alberta are among environmentalists’ biggest industrial irritants. But they are also legal and lucrative. (Above: surface mine (mountaintop removal mine) in West Virginia.)

For a growing number of banks, however, that does not seem to matter.

After years of legal entanglements arising from environmental messes and increased scrutiny of banks that finance the dirtiest industries, several large commercial lenders are taking a stand on industry practices that they regard as risky to their reputations and bottom lines.

In the most recent example, the banking giant Wells Fargo noted last month what it called “considerable attention and controversy” surrounding mountaintop removal mining, and said that its involvement with companies engaged in it was “limited and declining.”

The bank was a small player in the sector, representing about $78 million in bonds and loan financing for such companies from 2008 to April of this year, according to data compiled by the Rainforest Action Network, an environmental group tracking the issue.

But the policy shift by Wells Fargo follows others over the last two years, including moves by Credit Suisse, Morgan Stanley, JPMorgan Chase, Bank of America and Citibank, to increase scrutiny of lending to companies involved in mountaintop removal — or to end the lending altogether.

HSBC, which is based in London, has curtailed its relationships with some producers of palm oil, which is often linked to deforestation in developing countries. The Dutch lender Rabobank has applied a nine-point checklist of conditions for would-be oil and gas borrowers that includes commitments to improve environmental performance and protect water quality.

In some cases, the changing policies represent an attempt to burnish green credentials in areas where the banks had little interest, and there is no indication that companies engaged in the objectionable practices cannot find financing elsewhere.

Still, banking analysts and others suggest that heated debate over climate change, water quality and other environmental considerations is forcing lenders to take a much harder — and often uncomfortable — look at where they extend credit, and to whom.

“It’s one thing if your potential borrower is dumping cyanide in a river,” said Karina Litvack, the head of governance and sustainable investment with F&C Investments, an investment management firm based in London. “But if they’re dumping carbon dioxide into the air, which is not exactly illegal — what do you do? Banks are in kind of a quandary, because they are competing for business, and if they get holier-than-thou and start to play policeman, they risk allowing other banks to take that business.”

Environmental risk has been on the radar for lenders since the 1980s and early 1990s, when courts began forcing some measure of responsibility on banks for the polluting factories, superfund sites and other environmental problems that had, to one degree or another, been facilitated by their financing.

Congress passed a law in 1996 that limited the exposure of lenders on this front, but since then, most major banks have developed environmental risk management divisions as part of their commercial banking due diligence efforts.

Now, the rise of murkier issues like global warming, along with increasing scrutiny by environmental groups of banks’ investments in many other industries — like oil and gas development, nuclear power, coal-fired electricity generation, oil sands, fuel pipeline construction, dam building, forestry and even certain types of agriculture — are nudging lenders into new territory.

“We’re taking a much closer look at a much broader variety of issues, not all of which are captured under state and local laws,” said Stephanie Rico, a spokeswoman for the environmental affairs group at Wells Fargo.

Ms. Litvack, of F&C Investments, pointed to large protests last week by many climate activists outside the Royal Bank of Scotland in Edinburgh. At least a dozen protesters have been arrested in demonstrations against the bank’s financing of oil sands development in Canada.

The Royal Bank of Canada, meanwhile, responding to intense pressure from environmental advocates denouncing the bank’s financing of oil sands projects, hosted 18 international banks in Toronto in February for “a day of learning” on the “regulatory, social and environmental issues” surrounding the oil sands.

Globally, banks and environmental advocates are seeking to make things easier by developing best practices and other voluntary standards. Citigroup, JPMorgan Chase and Morgan Stanley helped initiate the Carbon Principles, which aim to standardize the assessment of “carbon risks in the financing of electric power projects” in the United States. Several international financial institutions — including HSBC, Munich Re and others — have formed the Climate Principles, which aim to encourage the management of climate change “across the full range of financial products and services,” according to the compact’s Web site.

In the United States, mountaintop removal mining has become both increasingly common and contentious, as coal companies vie to feed the nation’s appetite for inexpensive electricity. An expeditious and disruptive form of surface mining, it involves blasting off the tops of mountains and dumping the debris in valleys and streams below.

A report published in May by the Sierra Club and the Rainforest Action Network estimated that nine banks were the primary lenders for companies engaged in mountaintop removal mining in Appalachia, and that they had provided nearly $4 billion in loans and bond underwriting to those companies — chiefly Massey Energy, Patriot Coal, and Alpha Natural Resources — since 2008.

The Rainforest Action Network, which has headed a campaign to highlight financial institutions with connections to the mining, said this month that the policy shifts were chipping away at the financing.

Citing Bloomberg data, for example, the group noted that Bank of America — listed as recently as 2008 as one of the “syndication agents” on a $175 million revolving line of credit to Massey Energy — has eliminated that and all other connections to the company. The group also pointed to JPMorgan, which had previously underwritten $180 million in debt securities to Massey, but no longer has any financial ties to that company. In May, the bank said it would be subjecting all future engagements with companies involved in mountaintop removal mining to “enhanced review.”

Some environmental groups have criticized that and other policies as providing too much wiggle room — and whether any of it has any real impact is an open question. Mining industry representatives say such policies often fail to consider laws already in place requiring coal companies to limit their environmental impact, and to restore former mine sites when they are finished.

Carol Raulston, a spokeswoman for the National Mining Association, an industry group, said that most of the policies in question position the banks to phase out lending over time — and only to companies that primarily engage in mountaintop removal mining. “Companies are still getting financing for their projects,” she said.

Roger S. Hendriksen, the vice president for investor relations for Massey Energy, suggested that environmentalists were overstating things, and that his company was having no trouble securing financing.

“While some banks no longer provide financing for companies conducting surface mining, there are many who will,” Mr. Hendriksen said. “We have and will continue to replace their services with alternate bank providers with little difficulty.”

But Rebecca Tarbotton, the executive director of the Rainforest ActionNetwork, said in a published statement that the banks’ moves nonetheless send “a clear signal that these companies have a high risk profile and that other banks should beware.”

“Bottom line,” she added, “as access to capital becomes more constrained it will be harder for mining companies to finance the blowing up of America’s mountains.”

Source:
New York Times, “Banks Grow Wary of Environmental Risks“, accessed September 1, 2010

From the Inbox: You can save turtles!

Sea Turtles in Trouble Habitat destruction, both on land and in water, capture in commercial fishing gear, and pollution threaten to drive loggerheads to extinction. Human activity has endangered loggerheads existence, but you can help save them. Act Now to Protect Loggerheads	THE COMPASS, 8/31 Oceana updates from the North, South, East, and West Sea Turtles in Trouble Oceana in the Gulf Vote for Oceana Pristine Punta de Choros Protected from Coal-Fired Power Plant Morocco Bans Driftnets Stay in the Oceana Loop
Oceana in the Gulf Earlier this month, Oceana set sail on a two month research expedition to study the damage done by the BP oil spill disaster. Oceana crew and experts will tag sharks, assess fragile ecosystems, and study underwater oil plumes. Help support our research expedition. Give today and your gift will be matched, up to $50,000
Vote for Oceana With just one vote a week, you can help secure $200,000 for ocean conservation. As a part of a new corporate social responsibility effort from American Express and TakePart, every three months, five charities will be chosen to each receive $200,000 in funding from American Express. The new round just opened yesterday, so vote today to help protect sharks, turtles, and your oceans. Vote for Oceana once a week
Pristine Punta de Choros Protected from Coal-Fired Power Plant Fantastic news for endangered blue whales, Humboldt penguins, and Chile! Chilean President Sebastian Piñera persuaded Suez Energy not to build its power plant near the marine protected area of Punta de Choros. He also asked his cabinet to review all the industrial projects being considered in the country to see whether they could affect protected areas. Learn more about this victory
Morocco Bans Driftnets Great news in the battle against illegal fishing: Morocco has passed an amendment banning the use, possession, manufacture or sale of driftnets. Known as “curtains of death,” driftnets are a type of illegal fishing gear that can be nearly 100 feet high and 12 miles long. Because they are so indiscriminate, driftnets snag whatever’s in their path, including many marine mammals and other endangered species. Read more
Stay in the Oceana Loop Want to know the latest ocean news? Be the first to get new action alerts? Make sure that you are an Oceana fan on Facebook and follow us on Twitter for all things Oceana.

Today on New Scientist: 2 September 2010

All today’s stories on NewScientist.com including: the flaws in criminal profiling, a birds-eye view of hurricane Earl and weird water inside planets

A birds-eye view of hurricane Earl

An astronaut on the International Space Station has captured a serene-looking view of hurricane Earl – but things aren’t so calm down below

‘Medical marijuana’ hits the small screen

The first advert for medicinal cannabis was aired on television this week in California. Is this a sign of things to come, asks Catherine de Lange

Once-in-a-century salmon run hits Canada’s West Coast

It’s good news for British Columbia’s salmon fishermen, particularly those situated on the Fraser River - this year’s Sockeye salmon run is the largest one seen in 100 years.

Every year Vancouver resident Stephen Ottridge takes hamburgers or steak to his street’s annual summer block party. This year he arrived with a salmon large enough to fill the whole barbecue.

“There is a cornucopia of salmon this year, so we decided to treat the block to some,” Ottridge said from the city on Canada’s Pacific Coast, where marine experts are both puzzled and delighted by the unexpected glut of the bright-red, succulent fish.

After years of declining sockeye numbers and a struggling fishing industry, the Pacific Salmon Commission last week said it now expects 25 million sockeye will return to the Fraser River (left) this year — more than double its earlier forecast and the best run since 1913. Industry insiders expected wholesale and retail prices for the fish to drop due to the abundance.

Last year, slightly more than a measly 1 million sockeye made their way back to their spawning grounds, prompting the Canadian government to close the river to commercial and recreational sockeye fishing for the third straight year.

The reasons for the salmon bonanza remain a mystery, but what has helped is that it has coincided with a “dominant-run” year, said Carl Walters, a fisheries expert at the University of British Columbia’s zoology department.

“Every fourth year is the dominant year when the biggest run comes in. The year after that is sub-dominant. Then you get two really low runs,” Walters said.

Twenty years of declining sockeye in the Fraser River led the Canadian government to launch an investigation last year into the disappearance of the fish at a time when numerous theories abound.

These include that climate change may be reducing food supply for salmon in the ocean, and that rising temperatures in the river may have weakened the fish.

Commercial fish farms that the young Fraser River salmon pass en route to the ocean have also been blamed for infecting them with damaging sea lice, a marine parasite.

While consumers are enjoying cheap salmon for the first time in years — prices for fresh sockeye are down about 30 percent from a year ago — the fishing industry is struggling to cope with the sudden bounty.

“It is an amazing thing but the problem is that this has come along when the market has been lost. Now we have all this fish and we can’t do a lot with it,” said Bob Fraumeni, owner of FAS Seafood Producers, which operates a West Coast commercial fishing fleet and retail outlets.

There are reports of fish rotting on boats as fishermen run out of ice and freezer space, and of tempers flaring as boats jostle for space on the water.

For now though, most are enjoying the bumper harvest.
The spectacle of the returning salmon has wowed many fisherman. Steve Johansen told the Vancouver Courier:

“Seven miles of solid sockeye—jumping, boiling, finning on the surface of the water. I’ve fished all my life and I’ve never seen this.”

But Johanson cautioned that this year’s unexpectedly strong return did not mean the future for sockeye salmon is bright. The size of the return was not expected and many are stunned by the abundance of salmon. But those who know say the return will result in “overspawning” where too many future offspring will compete for scarce resources, resulting in a decrease in the survival rate for the young fish reported.

Meanwhile, despite the fears for the future of the industry, the people are enjoying the bounty that has dropped onto their plates.

“I’ve been in the business for 20 years and I’ve eaten sockeye from everywhere and this is, in my opinion, the best-tasting Canadian sockeye around,” said George Heras, president of family-owned Seven Seas Fish Market in Vancouver.

Source:
Reuters,“Once-in-a-century salmon run hits Canada’s West Coast“, accessed August 31, 2010
Digital Journal,“BC’s Sockeye salmon run the biggest seen in 97 years“, accessed August 31, 2010

From the Inbox: Tell Obama: Save Polar Bears and Stop the Next Drilling Disaster

It’s outrageous! Right now, the Obama administration is setting the stage for America’s next offshore oil disaster.

Even as millions of gallons of oil from BP’s botched Deepwater Horizon drilling operation pollute the Gulf and threaten the people and environment of the Gulf of Mexico, the administration has so far failed to act to protect Alaska’s fragile and remote Chukchi Sea — prime habitat for America’s threatened polar bears — from a similar catastrophe.

To help prevent the next drilling disaster and protect the lives of our polar bears, Defenders has joined with our friends at CREDO Action in a new campaign to stop harmful offshore drilling in this sensitive area — but we need your help to win!

Please read the message below and take action to save our polar bears!

– Rodger Schlickeisen, President, Defenders of Wildlife

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Tell Obama: Stop the Next Drilling Disaster Obama must act now to save an irreplaceable way of life. Obama’s support for drilling in the Chukchi could doom this sensitive area’s polar bears and native communities. Dear Friend, Last month, a federal court in Alaska found that the Bush administration violated the law when it approved oil and gas leasing in Alaska’s Chukchi sea without sufficient information and analysis about risks to the Arctic environment. A different court found similar flaws with Arctic drilling plans in 2009. Yet, President Obama’s administration has so far failed to revisit protections for the Chukchi - arctic waters off Alaska’s coast that are home to some of America’s remaining polar bears and key to the survival of Inupiat Eskimo communities. Please urge President Obama to take action now to save polar bears, bowhead whales and other wildlife - and the Alaska Native communities that rely on their health to survive - by preventing the next offshore drilling disaster. The Obama administration has asked the court in Alaska to allow activities that would pave the way for drilling to proceed, potentially jeopardizing an area key to the survival of not only polar bears, but also bowhead whales, Pacific walrus and other wildlife. The Gulf oil disaster clearly demonstrates the terrible risks of offshore drilling: Sea birds coated in oil and unable to fly; Seas turtles poisoned by toxic waters; and Wildlife habitat fouled by oil. And it could be much worse in the Chukchi. Thirty years after the Exxon Valdez disaster, there is still no effective, proven technology to clean up oil spills in broken sea ice conditions in Arctic waters, such as those found in the Chukchi Sea… a problem that could doom rare Arctic whales, threatened polar bears and other wildlife to extinction and destroy Inupiat communities if drilling proceeds. Help stop the next offshore drilling disaster! Tell President Obama to pull the illegal leases sold in the Chukchi Sea and halt seismic testing in the Arctic this summer. The courts and scientists have all said that more information is needed about the Arctic environment before we even consider drilling in its ice covered seas that are cloaked in darkness most of the year. The recent court decision provides the perfect opportunity for the Obama administration to take that time and really make sure we can protect the environment - before we jeopardize this fragile place, its wildlife and the people who count on it for the survival of their communities. To avoid another catastrophic offshore drilling disaster like the one now threatening the communities and wildlife of the Gulf of Mexico - and another Exxon-Valdez-like oil spill - we need a responsible approach to protecting the Chukchi. The Valdez spill decimated fisheries and continues to impact local wildlife and Alaskan communities to this day. And the Gulf oil disaster has killed thousands of animals and will impact the region’s fragile ecosystems for years to come. Alaska native communities, polar bears… and the rest of America deserve better. Please send President Obama a message right now. Thanks for all you do, Becky Bond Political Director CREDO Action

Today on New Scientist: 1 September 2010

All today’s stories on NewScientist.com including: wonder conductors set to cool computers, self-healing concrete, and the world’s new longest animal

Volcano wakes from four-century sleep

A Sumatran volcano dormant for 400 years has erupted, spewing smoke and ash several kilometres into the air