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Airstrike on remote Yemen hospital kills at least seven

Attack in rebel-controlled Saada province accompanies 4th anniversary of Saudi intervention in civil war

At least 7 individuals, consisting of 4 kids, have actually passed away after an airstrike struck the entryway to a health center in a remote rebel-controlled location of Yemen , Save the Children has actually stated.

Two more individuals are unaccounted for and 8 were hurt after a western-backed union rocket exploded a gas station beside Kitaf medical facility in Saada province on Tuesday early morning, the charity stated.

The medical facility had actually simply opened for the day and numerous personnel and clients were coming to the structure. One health care employee and their 2 kids are amongst the dead, according to the organisation, which moneys the center.

Local media released photos of the structure, which appeared to have actually been levelled.

No remark was right away upcoming from the Saudi-led military union operating in Yemen to release the nation from Houthi rebels and bring back the banished federal government.

The attack accompanied the 4th anniversary of the Saudi union intervention in Yemen’s civil war, which has actually eliminated a minimum of 60,000 individuals, left half the nation’s 22 million population food insecure and triggered the worst cholera break out in modern-day history.

“We are stunned and horrified by this outrageous attack,” stated Helle Thorning-Schmidt, Save the Children’s president.

“Innocent kids and health employees have actually lost their lives in what appears to have actually been an indiscriminate attack on a healthcare facility in a largely inhabited civilian location,” she stated. “Attacks like these are a breach of worldwide law.”

The union and the western federal governments who provide it with arms have actually been consistently criticised by rights groups and dispute displays for battle projects which have actually struck schools, health centers, funeral events and wedding event celebrations, eliminating countless civilians.

Yemen’s federal government and Saudi Arabia implicate the Houthis of utilizing civilians as human guards. The Houthis have actually introduced long-range rockets into neighbouring Saudi Arabia and targeted Saudi ships in the Red Sea.

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Who keeps buying California’s scarce water? Saudi Arabia

Saudi-based Almarai owns 15,000 acres of an irrigated valley but what business does a foreign food production company have drawing resources from a US desert?

Four hours east of Los Angeles, in a drought-stricken area of a drought-afflicted state, is a small town called Blythe where alfalfa is king. More than half of the towns 94,000 acres are bushy blue-green fields growing the crop.

Massive industrial storehouses line the southern end of town, packed with thousands upon thousands of stacks of alfalfa bales ready to be fed to dairy cows but not cows in Californias Central Valley or Montanas rangelands.

Instead, the alfalfa will be fed to cows in Saudi Arabia.

The storehouses belong to Fondomonte Farms, a subsidiary of the Saudi Arabia-based company Almarai one of the largest food production companies in the world. The company sells milk, powdered milk and packaged items such as croissants, strudels and cupcakes in supermarkets and corner stores throughout the Middle East and North Africa, and in specialty grocers throughout the US.

Each month, Fondomonte Farms loads the alfalfa on to hulking metal shipping containers destined to arrive 24 days later at a massive port stationed on the Red Sea, just outside King Abdullah City in Saudi Arabia.


  • Alfalfa at Fondomonte Farms in Vicksburg, Arizona

With the Saudi Arabian landscape there being mostly desert and alfalfa being a water-intensive crop, growing it there has always been expensive and draining on scarce water resources, to the point that the Saudi government finally outlawed the practice in 2016. In the wake of the ban, Almarai decided to purchase land wherever it is cheap and has favorable water conditions to produce enough feed for its 93,000 cows.

In 2012, they acquired 30,000 acres of land in Argentina, and in 2014, they bought their first swath of land in Arizona. Then, in 2015, they bought 1,700 acres in Blythe a vast, loamy, agricultural metropolis abutting the Colorado river, where everything but the alfalfa seems cast in the hue of sand. Four years later, the company owns 15,000 acres 16% of the entire irrigated valley.

But what business does a foreign company have drawing precious resources from a US desert to offset a lack of resources halfway around the globe?

What Fondomonte Farms is doing is merely a chapter in the long story of water management in the west, one that pierces the veil on the inanities of the global supply chain how easy it is to move a commodity like alfalfa, or for that matter lettuce or clementines or iPhones, across more than 13,000 miles of land and sea, how much we rely on these crisscrossing supply lines, and at what cost to our own natural resources.



An astonishingly good rate

Though Blythe is a desert, it is adjacent to the lower Colorado river, a river that supplies water to roughly 40 million people and irrigates 4m acres of land.

Bart Miller, Western Resource Advocates healthy rivers program director, says that over the last 80 years, due to the growth of proximate cities such as Denver, Los Angeles and Phoenix and the expansion of large-scale farms, demands on the river have steadily climbed. The river is also shrinking due to climate change. It has endured a nearly two-decade-long drought, with only waning rain and snowpacks to supply its flow. As a result, the river is at a record low.

The state of the Colorado river can be traced, in part, to a water claim approved by the federal government all the way back in the 1800s when a British gold rush-era prospector named Thomas Blythe first laid eyes on the desert expanse adjacent to the rushing Colorado river and submitted a water claim application to the federal government.

That 1877 water claim, now owned by the Palo Verde Irrigation District, ensures that Blythe has unquantified water rights for beneficial use; in other words, as much water as those living and farming within the district could possibly need in this water-scarce region, and for free.

The Palo Verde Irrigation District is not allowed to sell the water not to the company Calistoga, say, for bottled water, but not to their farmers, either. Blythe farmers are thus only charged to cover the water districts overhead $77 an acre-foot a year, an astonishingly low rate.

In other places, people are charged according to how much water they use and are thus incentivized to use less. In Blythe, no matter how much he uses, a farmer gets his water for a cheap, flat rate.


  • Alfalfa fields and storage warehouses at Fondomonte Farms

Its no surprise, then, that Fondomonte chose to set up shop here. While Saudi Arabia has enacted laws to manage their water resources, in the US we are still governing our water based on compacts made in the 1800s before the western cities had boomed, before suburban sprawl, before factory farming and a global supply chain and, of course, before climate change.

Water from the Colorado might be limited, but in Blythe, while they still have it, its there for the taking.

Getting the water from the river to Blythe is a complicated engineering feat. Its a really unique system, explains JR Echard, assistant manager of the Palo Verde Irrigation District, as he traces how the water moves throughout the valley on a map on his office wall.

Were in the desert, Echard said, but we live next to a massive river and have rights to it. Thomas Blythe might have appeared crazy to want to build an empire of agriculture out here in the desert but, in Echards eyes, Blythe was on to something.

The Colorado river powers a meticulously managed system of canals and dams. Southern water districts like Palo Verde estimate their constituents water needs and submit corresponding orders to the Parker and Hoover dams upstream which then release the requested water as though turning a great industrial tap. Once in Blythe, the diverted water moves downward into the valley below with the help of gravity and into a 250-mile system of canals that wind through 100,000 acres of cropland.

The canals are outfitted with electronic gates that can be opened and closed with the click of a mouse from the Palo Verde Irrigation Districts offices.


  • The Diversion dam on the lower Colorado river, regulated by the PVID

In California, everyones after whatever water they can get. Because of the low supply, the Palo Verde Irrigation District is currently three years into a 30-year fallowing contract when farmers are paid not to plant a portion of their fields so the water can instead be sent to cities with the Metropolitan Water District, which supplies water to big cities like San Diego and Los Angeles.

Fondomonte inherited a fallowing contract, so they are restricted from planting a portion of their land each year. This drives the company mad, an employee whom I will call Jim, told me. He asked not to be named for fear of reprisal from Fondomonte. Alfalfa-hungry Fondomonte would prefer to plant every inch.

Despite its agricultural prowess, 23% of Blythe residents live in poverty (compared with 12% nationally). The town is home to 21,000 people 6,000 of whom are incarcerated in one of the towns two state prisons. The prisons were supposed to bring economic development to the city, Echard told me on our way back from the dam as we sped alongside one of the primary canals. But it hasnt done much at all.

Fondomonte, on the other hand, has been a boon. Everyone wants to be working here, Jim told me. Not only does the company employ more than 100 locals full-time as compared with the part-time or seasonal labor found on most farms and with 401ks, vacation and health insurance, but they also support local farmers by purchasing their alfalfa to add to their bales and ship overseas.

There are a lot of exporters here, Jim said of US farmers and farm operations selling their crops to overseas markets. They have been exporting from here for 30 or 40 years. I dont see how this farm is any different.

The Saudis, theyre here buying up at a good price, Echard explained. Theyre just the same as everyone else. They buy local. Its a shot in the arm for the economy.


  • A field of alfalfa in Blythe, California

But is it an outrage?

The thing about alfalfa is that its perennial; you can grow it all year and stagger the planting in the fields so that theres nearly always a new crop of alfalfa ready to be cut as well as planted. Once its cut, it keeps growing, and they cut it again. A crop can last up to five years, but Fondomonte generally rips up and replants after two or three; any longer than that and the alfalfa grows more stem-heavy, and thus drops in quality.

Each day on their massive, gated farm headquarters, Fondomonte employees take samples of the alfalfa and test its quality: the higher the ratio of leaves to stems, the better the quality, and thus the better the milk the cows will produce.

Almarai only wants the highest quality, Jim explained. He broke open a bale with his hands as if tearing off a piece of bread. The outside of the alfalfa was brown, but just inside, was a vivid and surprising green.

Fondomonte employs some of the most hi-tech mechanisms big ag has to offer computer programs that combine with satellite and drone imagery to delineate the soil characteristics of each speck of land, drones take videos of production in progress, and the company is currently improving their own system of intra-farm canals and electronic gates so that they can irrigate each field with the touch of a button from behind a computer screen in the office. Its all part of their ongoing effort to maximize their efficiency and crop quality, thus their profit, thus their empire in Saudi Arabia perhaps, eventually, here as well.

If its raining, the employee told me, the farm manager can just farm from behind his desk. They are entirely self-sufficient, and have expertise in constructing a hi-tech alfalfa empire having already done it in Saudi Arabia.


  • The storage barns at Fondomonte Farms and a PVID irrigation ditch in Blythe, California

Dan Putnam, an alfalfa expert and UC Davis professor, explained US-grown alfalfa has long been shipped overseas, long before Almarai. Alfalfa is the third largest economic product in the US, but only 4% is exported annually. In the western states, however, which are high producers close to shipping ports to major export markets like China, Saudi Arabia and Japan, about 15% is exported each year. These high-export states are also the states that happen to be grappling with drought, meaning that the most water-strapped states are shipping much of their water overseas, in the form of alfalfa.

When Almarai first began purchasing land in the western US, environmentalists, and many average citizens, were outraged. Saudi Hay Farm in Arizona Tests States Supply of Groundwater, said an NPR article in November of 2015. Saudi Arabia is Outsourcing its Drought to California, wrote Gizmodo.

Yet Putnam takes umbrage with the outrage over alfalfa exports. Why, he wonders, are people so much more outraged over alfalfa using water here only to be shipped overseas, what about almonds, a water intensive crop of which 70% of Californias harvest is shipped overseas. Or oranges? Or lettuce?

I suggested to him that it might have something to do with the fact that alfalfa isnt seen as food its just a plant, a mega-crop divorced, in common perception, from its value as food. But as the basic element of a larger food chain of the dairy and meat industry, alfalfa, Putnam claims, is critical.

I have a T-shirt, he told me. Alfalfa: ice-cream in the making.



  • Grant Chaffin, owner of Chaffin Farms (left). The baby potatoes grown at Chaffin Farms, Blythe

Putnam, along with many farmers I spoke to, urges people to consider how much water crisscrosses the globe in the current supply chain. Its not just alfalfa, and its not just agriculture. People will find goods at the cheapest prices, and companies in areas with unstable resources will relocate elsewhere.

While its hard to then make a clear calculation of exactly how much US water is being poured into alfalfa and then shipped overseas (some evaporates, some filters back into the soil, some is deposited back into the river downstream) its clearly not nothing. But who knows how long it will last. For the survival of that country, Putnam said of Saudi Arabia, they will look to other parts of the world.

On our way back from the dam to the district offices, Echard drove me up along the access roads to get a panorama of the canals, and past some bright fields of alfalfa. We then drove to a part of valley where, in partnership with various environmental organizations, the Palo Verde Irrigation District had planted a large grove of trees to revive some of the habitat that once stretched so abundantly along this part of the Colorado. In August, he told me, it can be 115F (46C) outside, but under this canopy of trees, it might be 20 degrees cooler.

Here in the middle of the desert, weve got a little forest, he said, proudly. Like the river, this forest, too, is a manmade environment; mans footprint is everywhere.

As we drove back to the office, I pointed out some nice bushy trees along the canal. Oh, those are saltcedar, Echard said. An invasive species from Asia that drain the water table and leave salt deposits in the soil, which destroys the other plants. No one wants it, he said, as he yanked the truck into gear and headed back out again amid the bright carpets of alfalfa stretching in all directions.

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The Aramco Accounts: Inside the Worlds Most Profitable Company

  • Saudi energy giant made $33.8 billion in very first half of 2017
  • Tougher royalty routine enforces greater taxes as oil rates increase

It &#x 2019; s a foundation of the international economy, offering and producing 10 million barrels of oil every day. For 4 years the monetary efficiency of Saudi Aramco has actually been one of the greatest tricks in international service, restricted to a small circle of executives, federal government authorities and princes.

Now, a very first glance of the state oil giant &#x 2019; s financial resources reveals Aramco produced $33.8 billion in earnings the very first 6 months of 2017, quickly overtaking U.S. titans like Apple Inc. , JPMorgan Chase &&Co. and Exxon Mobil Corp.

The numbers seen by Bloomberg News provide financiers the most comprehensive set of information yet to examine the possible worth of a once-in-a-generation offer for monetary markets: Aramco &#x 2019; s proposed going public. And with Aramco creating the bulk of Saudi Arabia &#x 2019; s earnings, the accounts likewise supply sovereign bond financiers with a special insight into the kingdom &#x 2019; s monetary health.

Asked to talk about the figures, Saudi Aramco stated in a declaration: “”This is unreliable, Saudi Aramco does not discuss speculation concerning its monetary efficiency and financial program. &#x 201D;

Among the most appealing truths: The business is nearly completely devoid of financial obligation and delights in production expenses performing at a portion of the market requirement, the figures reveal.

But Saudi Arabia &#x 2019; s reliance on the business to fund military and social costs, in addition to the luxurious way of lives of numerous princes, puts a heavy concern on its capital. Aramco &#x 2019; s tax expense increases steeply as oil costs increase. Together with raised capital costs, that &#x 2019; s most likely to restrict the scope for dividend payments after a share sale.

The accounts, prepared to an IFRS requirement, likewise reveal Aramco &#x 2019; s level of sensitivity to oil costs. In the very first of half of 2016, when unrefined balanced $41, the business made $7.2 billion in earnings. This year, earnings are most likely to be considerably greater than 2017 after the current rally in oil to more than $70 a barrel.

World-Beating Profit

Saudi Aramco goes beyond a few of the most significant names in international service

Source: Bloomberg

Note: For business that do not report on the basis of the basic fiscal year, an equivalent duration is utilized

Saudi Crown Prince Mohammed bin Salman, who &#x 2019; s made the Aramco IPO an essential part of his aspirations to prepared the kingdom for the post-oil age, has actually recommended the business &#x 2019; s worth at $2 trillion, a figure that would raise a record $100 billion by offering a 5 percent stake. That would overshadow the record $25 billion raised by Chinese web seller Alibaba Group Holding Ltd. in 2014.

Some oil market experts, executives and experts, consisting of Sanford C. Bernstein &&Co. and Rystad Energy AS, have actually questioned the $2 trillion target, recommending that a figure in between $1 trillion and $1.5 trillion is more sensible.

Peer Comparison

Investors can see how Aramco compared with other energy giants for the very first half of 2017

Source: Bloomberg, business reports

( 1) Cash circulation changed by working capital and, when it comes to Aramco, $21.4 billion owed to the business from the federal government (2) Production for all business is the yearly average for 2016, the most current figures readily available for Aramco

Investors still put on &#x 2019; t understand precisely when, or perhaps whether, the share sale will occur, and till today they had no info on the business &#x 2019; s monetary position. The sale, consisting of a global listing in New York, London or Hong Kong, was at first arranged for 2018, however is now most likely postponed till 2019.

Rise of a Giant

Saudi oil output has actually grown to more than 10 million barrels a day because Aramco was nationalized

Source: BP Statistical Review of World Energy

Two essential metrics financiers will utilize to measure the evaluation of the business are capital generation and dividend payments.

According to Bloomberg estimations based upon the information, Aramco produced adjusted capital from operations of $52.1 billion in the very first half of in 2015, when Brent unrefined balanced almost $53 a barrel. In the very same duration, Shell created money from operations of almost $21 billion in spite of pumping a quarter of the oil and gas that Aramco produces.

Bloomberg News changed the capital generation by including $21.4 billion that the Saudi federal government owes the business for services Aramco supplies to the kingdom and state-owned business. The monetary information stated that Aramco and the federal government remained in discuss a settlement since mid-2017 and the business didn &#x 2019; t anticipate the offer to materially vary from the cashes owed.

For a more in-depth breakdown of the essential Aramco figures, click on this link.

The dividend, while big, isn &#x 2019; t big set versus other market leaders. Aramco paid a money circulation to the federal government of $13 billion in the very first half of 2017. That compares to investor payments of $6.4 billion by Exxon and $7.8 billion by Royal Dutch Shell Plc , although those 2 combined produce less oil than Aramco.

Modest Recovery

Aramco'’s figures cover a duration when oil was just beginning to recuperate from a cost downturn

Source: Bloomberg

The factor for the minimal money generation is tax: Aramco pays a 50 percent earnings tax and an extra variable royalty on profits.

The monetary information examined by Bloomberg reveals that Saudi Arabia enforced a brand-new moving royalty scale in January 2017, widening the scope of the levy and increasing the minimal rate as oil rates increase.

Before the modifications, Aramco paid a royalty of around 20 percent on petroleum and improved items exported, about 7 million barrels a day. Now, it imposes the royalty for the entire of the business &#x 2019; s oil liquids production, more than 10 million barrels.

The royalty is set at minimal rate of 20 percent for oil costs approximately $70 a barrel, 40 percent in between $70 and $100, and a 50 percent in excess of $100.

It &#x 2019; s uncertain whether Saudi Arabia prepares any additional modifications to the tax routine prior to the IPO.

To check out a Gadfly column on Aramco appraisal situations, click on this link.

Aramco is likewise investing greatly. Inning accordance with the information, the business &#x 2019; s reported capital investment were $14.7 billion in the very first half of 2017, well ahead of the $8 billion to $9 billion reported in the exact same duration by Exxon and Shell.

There &#x 2019; s plenty to cover financiers. Aramco produces from a few of the biggest, lowest-cost fields on the planet and invested simply $7.9 billion in production and production expenses in the very first half of in 2015, inning accordance with the information.

Using a rough step of overall oil, condensate and gas production, Aramco invested less than $4 per barrel to pump hydrocarbons, compared with likewise rough estimations of around $20 a barrel for Exxon and Shell.

Aramco is likewise almost financial obligation complimentary, reporting overall loanings of $20.2 billion at the end of the very first half of 2017, balanced out by money and money equivalents of $19 billion.

No matter what last assessment Aramco accomplishes, the very first take a look at the business &#x 2019; s books shows the incredible offer the kingdom cut in 1976 to totally nationalize the business. It’sed a good idea the leaders of Chevron Corp. and Exxon about $1.5 billion for their shares.

And even after an IPO, Aramco will stay even more than a huge oil business, both within the kingdom and beyond. Its huge fields, strung through the Saudi desert, are crucial for international financial development and geopolitical security.

At house, the gush of money will continue to underpin the kingdom &#x 2019; s decades-old social agreement for several years to come: generous state handouts in return for the political commitment that keeps stability in the birth place of Islam.

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