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The Economics of Zoning, Explained

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What are zoning laws, how do they work, and what are their economic effects?

This explainer is intended to be a guide to the purposes and mechanics of local land-use regulations, including zoning, as well as the economic debates over their effects, especially on the housing market, and how to reform them.

1. What Zoning Is

Zoning is a set of laws that regulate how property owners may use their land, in particular by drawing zones where certain uses are and are not permitted. Most zoning laws are local ordinances adopted by county or municipal governments, but some are state laws adopted by legislatures or executive agencies.

While zoning regulates building, “zoning codes” are different from “building codes.” Building codes are standards for construction meant to address life safety issues, such as fire safety and energy efficiency.

Planners and local governments often treat “zoning” separately from other land-use or development regulations. Regulations affecting the subdivision of land, the layout of site plans, and environmental standards like those having to do with development activities near wetlands or above aquifers are all closely related to zoning. Sometimes these laws are found in zoning ordinances and sometimes in separate ordinances. “Master plans” are typically advisory documents meant to inform zoning changes, but in practice, they often diverge sharply from what zoning ordinances actually allow.

Zoning is a relatively recent phenomenon in the United States. New York City adopted the first comprehensive zoning ordinance in 1916, but cities had implemented piecemeal land-use regulations before this date.[1]

Zoning quickly spread nationwide. Under Secretary of Commerce Herbert Hoover, the federal government adopted a draft “zoning enabling act” in 1924 and promoted its enactment by state legislatures. Most states quickly adopted zoning enabling acts in the 1920s. Excluding the then-territories of Alaska and Hawaii, the last state to adopt a zoning enabling act was Washington (1935).

Before zoning, land use was regulated through private covenants: contracts that limited how landowners could use their property, and that “ran with the land,” meaning they passed to future buyers and renters. Private covenants are still important in the US, but they are now used mainly for two purposes: creating conservation easements that limit development on agricultural land or wilderness, and establishing homeowners’ associations that manage common facilities and regulate development in a single neighborhood.

Why did zoning start in the 1910s and 1920s? One reason may be the rise of the automobile, which allowed workers for the first time to live far from their jobs. As suburban neighborhoods grew, residents sought to keep urban uses at a distance. Zoning was a tool for that separation.

Progressive Era optimism about the ability of experts to use scientific principles to re-engineer daily lives through government also played a role. Within the field of urban planning, the early progressives’ ambitions gave way in the 1940s and 1950s to even grander “high modernist” visions to redesign cities according to abstract principles of beauty and order (Scott 1998). These ideological commitments played a role in the American “urban renewal” projects of the 1950s and 1960s that bulldozed neighborhoods, widened roads, drove highways through the centers of cities, and rezoned land to require large parking lots and front yards.

Some scholars still debate whether racism played a role in the development and spread of zoning. Certainly, some cities tried to use zoning for racial and socioeconomic segregation, even after the Supreme Court struck down explicitly racial zoning in 1917. But there were also prominent black advocates of zoning (Glock 2022). FDR’s Federal Housing Administration (FHA) used redlining — excluding certain neighborhoods from their mortgage guarantee program — to reinforce urban segregation. To this day, many zoning boundaries follow the red lines that the FHA drew suspiciously closely (Rothstein 2017; Trounstine 2020). Urban renewal policies, especially interstate highway construction, damaged urban working-class areas of cities, both predominantly black and ethnic-white (Peterson 2023). Perhaps the most supportable conclusion is that racism sometimes played a role in the purposes to which zoning was put, but the level of racism in society is not a good predictor of the stringency of zoning over time, since especially restrictive forms of zoning first emerged in the 1960s and then spread to fast-growing regions during the period from the 1970s through the 2000s.

In fact, a social trend that tracks better with the rise of especially restrictive zoning is the spread of anti-growth environmental attitudes in the 1960s and 1970s (Fischel 2015). During this era, environmentalism was closely associated with anti-population-growth views, and ultra-low-density zoning seems to have emerged first in places with strong environmental movements. Up to the present day, local Sierra Club chapters have often been key vehicles for anti-housing activism (Elmendorf 2023), despite the fact that low-density zoning in metropolitan areas tends to encourage sprawl.

2. How Zoning Works

The basic role of zoning is to separate potentially annoying or noxious uses from residential neighborhoods. Economist William Fischel calls this “good housekeeping zoning” (Fischel 2015, 325).

Traditional zoning isn’t the only way to regulate nuisances. One former city planner and zoning skeptic notes that, rather than dividing a city into districts with different permitted uses, ordinances could simply specify that obnoxious uses may not locate within a certain distance from an existing home (Gray 2022). Under traditional zoning, a nuisance use can be located close to a home so long as it’s just over the line in a zoning district where that use is allowed.

From early on, zoning went beyond regulating genuine nuisances. The famous Euclid v. Ambler Supreme Court case that upheld the constitutionality of zoning in 1926 was about an ordinance that forbade the building of apartments in one part of the village of Euclid, Ohio. The majority opinion held that restricting apartments was a reasonable use of the government’s police power, since “very often the apartment house is a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district,” and apartment houses in residential districts “come very near to being nuisances” (272 US 394–95).

Today, almost all zoning ordinances limit residential densities, even in the most densely populated neighborhoods in the country. Setting aside land for detached, single-family housing is also standard. Single-family zoning is virtually unknown outside the US and Canada (Hirt 2014), but limits on residential densities are near universal (Hughes 2025). Limits on densities may, within reason, safeguard the value of residential properties in a neighborhood.

Another application of zoning is to make sure that new development “pays its own way.” If new development requires building roads or expanding schools, zoning regulations can require the development to pay enough in property taxes to cover the marginal cost of providing these services. Requiring that new homes purchase a lot of land with their house, through minimum lot sizes, might be a roundabout way of doing this.

Another, arguably simpler way of ensuring that developments make fiscal sense for the local community is to use narrowly constructed impact fees. Impact fees are payments that property owners have to make in order to build a certain kind of development. These funds can then be used to upgrade infrastructure, hire teachers, or otherwise fulfill the need created by the new development.

Like any other government exaction, impact fees can be — and often have been — abused. They only make sense if they cover the net cost of a development to local property taxpayers. Since development typically raises the value of property substantially, it always pays at least part of its own way. The most credible academic research on this question suggests that multifamily housing and small-lot single-family subdivisions tend to pay their own way fully through their added property tax revenues, at least when it comes to school enrollment impacts (Gallagher 2016; 2019). If that’s true, then it wouldn’t make sense to impose school impact fees on these types of developments.

If a property owner wants to do something that is prohibited under zoning, localities offer processes for various exceptions. It’s impossible for a zoning ordinance and a zoning map to anticipate all possible valuable uses for every specific piece of land for all time. The most typical process is to obtain a “variance,” or a waiver of the zoning regulations in a particular instance.

Alternatively, the map itself can be changed through a rezoning — but this process usually makes sense only for large projects. These processes are at least somewhat discretionary; a property owner is never entitled to a variance or a rezoning.

3. Understanding Your Local Zoning

To see what kinds of regulations your area has, you can look up your local zoning or development ordinances and zoning map. Here’s what to look for.

In larger towns that have the assistance of professional staff in drawing up regulations, ordinances will typically have a table of uses and a table of dimensional regulations. The table of uses will tell you what uses are allowed or prohibited in each district, and the table of dimensional regulations will tell you the minimum and maximum requirements for lots and buildings.

Figure 1 shows a portion of a table of uses from Nashua, New Hampshire’s zoning ordinance. Like the vast majority of other zoning ordinances in the US, the Nashua ordinance considers a use prohibited unless it is expressly permitted. Some uses are only permitted if they are “accessory” to specific other uses, that is, they are not the main use of the land. Some uses are neither permitted nor prohibited outright, but require a special permit from a land-use board. These special permits are typically offered on a partially discretionary basis, such that a landowner has to prove that the new use will meet pre-established criteria.

As you can see from Figure 1, the commercial uses that happen to be listed here — different kinds of lodging establishments — are not a permitted use in any of the residential districts, but they are in the downtown and business districts, and they are allowed by a special permit in some of the urban residential districts. This kind of separation of uses is typical.

Home businesses, however, are treated as an accessory use. Most zoning ordinances will allow home-based businesses in at least some neighborhoods, but they typically impose restrictions such as maximum square footage or maximum number of employees, to limit the size and impact of these businesses.

The zoning districts in the columns of Figure 1 are plotted on a zoning map. Figure 2 displays a portion of the zoning map for Nashua. There are two types of zoning districts on this map: base districts and overlays. Base districts correspond to the regulations that apply outside an overlay. An overlay district modifies the regulations in the base district in certain respects (but not others). These modifications could make the regulations stricter or less strict.

Finally, Figure 3 shows a portion of Nashua’s table of dimensional regulations. These regulations limit how much you can build. Maximum density regulations limit the number of dwelling units you can build per acre. Minimum lot sizes tell you how much land you must have per house. Minimum setbacks tell you how far back the building must sit relative to lot lines. Maximum setbacks are less common but are gaining in popularity as planners lose interest in the high-modernist ideal of low-slung buildings surrounded by seas of grass and asphalt. Floor area ratios limit how much floor space you can build relative to the size of the lot; they’re an especially complex way to limit building space. Finally, minimum open space percentages, sometimes specified as maximum lot coverages, are in theory justified as a flood-prevention measure, making sure there’s enough space for rainwater to permeate the soil. To use them properly for flood prevention, however, they would need to scale with the size of lots and the flood-proneness of the surrounding area. It might be more efficient sometimes just to pay people to keep some land as open space.

Regulating uses and dimensions aren’t all that zoning ordinances do, but they’re among the most consequential. A nationwide project to map and tabulate key zoning ordinances affecting housing development is underway: the National Zoning Atlas. If you’re lucky enough to have your area covered by this atlas, you can dig into the data and see what types of housing are allowed where. The “snapshots” tool lets you compare jurisdictions by the percentage of land area they make available for certain types of housing.


4. The Consequences of Zoning

Economists pay attention to zoning because zoning makes it harder and more costly to build housing. Zoning is also often the only tool residents possess to limit nearby land uses that may lower their own property values without constituting true nuisances.

Everyone agrees zoning raises the cost of housing, but debate continues over whether it does so primarily by restricting supply, or also by increasing demand. If zoning is a wise tool for regulating nuisances and making neighborhoods more pleasant, it should boost housing demand as well as constrain supply.

Zoning limits housing supply in two ways: raising monetary costs and raising time costs. We have already seen the first of these. Zoning often requires more land to be used to build than a property owner might prefer to buy. Zoning can also raise the monetary cost of building by requiring particular building features, such as parking spaces.

Zoning also raises the time cost of building housing. Getting approvals, especially for special permits or variances, takes time — often an uncertain amount of time.

Zoning raises the cost of housing in a way that more closely resembles a fixed, per-unit tax than a tax that scales with the value of the property (“ad valorem”). Developers have an incentive to develop higher-priced properties, so that the fixed “land use tax” represents a smaller proportion of the ultimate sale price. For this reason, we should be cautious about attributing rising housing costs solely to larger and higher-quality homes. Houses are probably inefficiently large and high-quality, especially in more regulated regions. Lots of Americans want starter homes but are unable to find them, because even a small house is costly to build in a manner consistent with zoning.

Some economists have found that zoning can raise the demand for housing and make neighborhoods nicer to live in, compared to the alternative of completely unregulated land use (Speyrer 1989; Lin 2024; Gyourko and McCulloch 2024).

Quite a few studies have found that stricter zoning makes housing development more costly and less efficient, and may even account for the otherwise hard-to-explain decline in construction productivity in the United States (Siegan 1972; Glaeser et al. 2005; Hsieh and Moretti 2019; Molloy 2020; D’Amico et al. 2024).

One of the most startling examples of this phenomenon comes from Palo Alto, California, home to Stanford University and the headquarters of HP and the former headquarters of Tesla. Even at the very center of the global tech economy, most of the housing in Palo Alto is restricted to low-slung, single-family neighborhoods because of zoning laws. The only part of town where housing is legal to build at significant density is far away from corporate headquarters, next to San Francisco Bay and industrial port facilities. Still, it receives all the major residential construction (Ellickson 2022).

On the one hand, it’s understandable that homeowners in Palo Alto are nervous about allowing big apartment buildings down the block. On the other hand, the economic costs of freezing their neighborhoods in amber are gigantic. In principle, you could make Palo Alto homeowners better off by allowing high-density construction in their neighborhoods and giving them a big chunk of the increase in land value that results.[2] But traditional zoning doesn’t have mechanisms to authorize side payments of this kind.

The national evidence that zoning stringency and housing costs correlate is quite strong. For example, Figure 4 shows that in counties with stricter zoning, the ratio of median home value to median household income is higher.

Now, the causality might go both ways. Places that are nicer to live in or boast faster wage growth will have higher housing demand and therefore higher prices and population growth. That population growth might prompt these places to tighten their zoning regulations, yielding a partly spurious correlation between regulatory stringency and housing costs.

But if that alternative causal channel were the main explanation, it would be surprising to see more strictly regulated areas experiencing slower population growth. That argument depends on zoning being the result of rapid growth, rather than the cause of high costs and slow growth. If more strictly regulated places show high costs and slow growth, that should fortify our conclusion that the high costs are a consequence of strict zoning.

And that’s exactly what we do see. Figure 5 shows the relationship between zoning stringency and net migration rates at the state level. States with stricter zoning are losing people to states with looser zoning. This chart likely understates the negative causal effect of zoning on net migration, since states with historically high migration were more likely to tighten zoning in the first place.

These charts are suggestive and easy to understand, but from economists’ perspective, the only gold-standard evidence of causal effects comes from interventions that are more plausibly random. Careful studies of zoning regulations changes generally find that when regulations are loosened, housing production goes up, and housing costs go down, relative to the counterfactual — but the effect on costs depends on the geographic scale of the change (Cheung et al. 2023; Greenaway-McGrevy 2023; Büchler and Lutz 2024). Localized changes have almost no effect on local housing costs, while a regional change has a substantial effect on regional housing costs.

Zoning should also make commercial and industrial development more difficult and costly. In many cases, however, communities are more willing to allow commercial development than residential, since it shifts some of the property tax burden away from residential owners. This remains an area of future research, and state policymakers have been exploring ways to relax zoning rules for home-based commercial uses, such as childcare.

5. Options for Reform

Policymakers have looked to zoning reform in recent years as a way to bring down housing costs. This is a partial list of reforms that states and cities have been trying.

5.1. Institutional and Process Reforms

Process-level zoning reforms currently being tried include:

  • Providing a quick appeals process or appeals board for zoning denials to reduce the time cost of development.
  • Tightening who has standing or may challenge housing-friendly rezonings.
  • Compensating owners for regulatory takings. Under current jurisprudence, the federal Constitution only requires compensation for regulatory takings that eliminate economically viable uses of land, necessitating state-level reforms.[3][4]
  • Raising voter turnout by aligning local election calendars to state elections, as a motivated minority of anti-building homeowners have outsized pull in off-cycle elections (Einstein et al. 2020).
  • Using “shot clocks” to limit the time local boards can delay permit applications.
  • Allowing builders to use certified third-party inspectors and other private agencies.
  • Centralizing zoning, allowing state government to define all the possible zoning districts that its local governments can use, allowing local governments to then map these districts as they like. This approach raises the risk that anti-housing groups will focus on state-level influence.
  • Decentralizing zoning by allowing neighborhoods or even single streets to opt out of local zoning, if they recognize the financial benefit in allowing more housing to be built.
  • Making covenants more attractive, including authorizing city governments to use their own resources to enforce private covenants (Gray 2022).

5.2. Zoning Preemption

State governments could simply preempt local zoning in some areas, giving landowners defined rights to develop certain kinds of housing.

  • Build starter homes. In 2025, Texas enacted the first limit on minimum lot sizes in cities, making it easier to build subdivisions of small-lot homes.
  • Promote “missing middle” reforms. Some states have ended single-family zoning in larger cities or in areas that have access to water and sewer infrastructure, allowing developers to build out the “missing middle” typologies: duplexes, triplexes, and fourplexes.
  • Reduce parking minimums. Parking minimums are one of the most irrational land-use controls, and more than 100 cities have limited or abolished them.
  • Legalize accessory dwelling units. Quite a few states have now passed laws giving single-family homeowners the right to build a small apartment or tiny home on their lot.
  • Legalize manufactured housing. States are increasingly requiring local governments to allow manufactured housing wherever they allow single-family housing.
  • Legalize single-room occupancies, allowing dorm-like arrangements with shared kitchens or bathrooms, which function as the lowest rung on the housing ladder and may do the most to reduce homelessness.

5.3. Financial Incentives

Many states now offer some financial incentives or technical assistance to local governments that want to reform zoning in a housing-friendly direction. Some states now give additional infrastructure dollars to local governments that permit more housing. New Hampshire’s Housing Champions program is an example. The ROAD to Housing Act that recently passed the US Senate would do the same with some federal funds.
 
Financial incentives work best when localities must demonstrate a real increase in permitting, not just a legal change, as a condition of continuing to receive the incentive. Localities have innumerable ways to block or discourage projects they don’t want, so actual permitting data reveal a community’s regulatory stance more accurately than the text of its zoning ordinances.

6. Advantages and Alternatives to Zoning

Many Americans believe that zoning serves useful functions in protecting their quality of life and property values. In established neighborhoods, private covenants are difficult to create, making zoning the primary way to govern land use. Economics helps clarify the tradeoffs of zoning and how it can be reformed to serve its essential functions at lower cost.

For more on the politics and economics of zoning and how to reform it, see my AIER white paper, “Unbundling Zoning.”

References

Bernstein, David E. 1999. “Lochner, Parity, and the Chinese Laundry Cases.” Wm. & Mary L. Rev. 41: 211.

Büchler, Simon, and Elena Lutz. 2024. “Making Housing Affordable? The Local Effects of Relaxing Land-Use Regulation.” Journal of Urban Economics 143: 103689.

Cheung, Ka Shing, Paavo Monkkonen, and Chung Yim Yiu. 2023. “The Heterogeneous Impacts of Widespread Upzoning: Lessons from Auckland, New Zealand.” Urban Studies 61 (5): 943–67.

Coase, R.H. 1960. “The Problem of Social Cost.” Journal of Law and Economics 3 (1): 1–44.

D’Amico, Leonardo, Edward L Glaeser, Joseph Gyourko, William R Kerr, and Giacomo AM Ponzetto. 2024. Why Has Construction Productivity Stagnated? The Role of Land-Use Regulation. No. 33188. National Bureau of Economic Research.

Einstein, Katherine Levine, David M. Glick, and Maxwell Palmer. 2020. Neighborhood Defenders: Participatory Politics and America’s Housing Crisis. Cambridge University Press.

Ellickson, Robert C. 2022. America’s Frozen Neighborhoods: The Abuse of Zoning. Yale University Press.

Elmendorf, Chris. 2023. “How Major Environmental Groups Ended Up on the Wrong Side of California’s Housing Crisis.” Mother Jones, November 17. https://www.motherjones.com/environment/2023/11/green-groups-housing-crisis-ceqa-environmental-density-nimby/.

Fischel, William A. 2015. Zoning Rules!: The Economics of Land Use Regulation. Lincoln Institute of Land Policy.

Gallagher, Ryan M. 2016. “The Fiscal Externality of Multifamily Housing and Its Impact on the Property Tax: Evidence from Cities and Schools, 1980-2010.” Regional Science and Urban Economics 60: 249–59.

Gallagher, Ryan M. 2019. “Restrictive Zoning’s Deleterious Impact on the Local Education Property Tax Base: Evidence from Zoning District Boundaries and Municipal Finances.” National Tax Journal 72: 11–44.

Glaeser, Edward L., Joseph Gyourko, and Raven Saks. 2005. “Why Is Manhattan So Expensive?: Regulation and the Rise in Housing Prices.” Journal of Law and Economics 48 (2): 331–69.

Glock, Judge. 2022. “Two Cheers for Zoning.” American Affairs 6: 36–52.

Gray, M. Nolan. 2022. Arbitrary Lines: How Zoning Broke the American City and How to Fix It. Island.

Greenaway-McGrevy, Ryan. 2023. “Can Zoning Reform Reduce Housing Costs? Evidence from Rents in Auckland.” Working Paper No. 16. Preprint, University of Auckland Economic Policy Centre.

Gyourko, Joseph, and Sean E. McCulloch. 2024. “The Distaste for Housing Density.” NBER Working Paper 33078.

Hirt, Sonia. 2014. Zoned in the USA: The Origins and Implications of American Land-Use Regulation. Cornell University Press.

Hsieh, Chang-Tai, and Enrico Moretti. 2019. “Housing Constraints and Spatial Misallocation.” American Economic Journal: Macroeconomics 11 (2): 1–39.

Hughes, Samuel. 2025. “The Great Downzoning.” Works in Progress, November 24. https://worksinprogress.co/issue/the-great-downzoning.

Lin, Chuanhao. 2024. “Do Households Value Lower Density: Theory, Evidence, and Implications from Washington, DC.” Regional Science and Urban Economics 108: 104023.

Molloy, Raven. 2020. “The Effect of Housing Supply Regulation on Housing Affordability: A Review.” Regional Science and Urban Economics 80 (C): 1–5.

Peterson, Sarah Jo. 2023. “The Myth and the Truth About Interstate Highways.” In Justice and the Interstates: The Racist Truth About Urban Highways, edited by Ryan Reft, Amanda K. Phillips de Lucas, and Rebecca C. Retzlaff. Island.

Power, Garrett. 1983. “Apartheid Baltimore Style: The Residential Segregation Ordinances of 1910-1913.” Maryland Law Review 42 (2): 289–328.

Rothstein, R. 2017. The Color of Law: A Forgotten History of How Our Government Segregated America. Liveright. https://books.google.com/books?id=SdtDDQAAQBAJ.

Scott, James C. 1998. Seeing like a State: How Certain Schemes to Improve the Human Condition Have Failed. Yale University Press.

Siegan, Bernard H. 1972. Land Use Without Zoning. Rowman & Littlefield.

Sorens, Jason. 2018. “The Effects of Housing Supply Restrictions on Partisan Geography.” Political Geography 66 (September): 44–56.

Sorens, Jason. 2021. Residential Land Use Regulations in New Hampshire: Causes and Consequences. Josiah Bartlett Center for Public Policy.

Speyrer, Janet Furman. 1989. “The Effect of Land-Use Restrictions on Market Values of Single-Family Homes in Houston.” Journal of Real Estate Finance and Economics 2 (1): 117–30.

Trounstine, Jessica. 2020. “The Geography of Inequality: How Land Use Regulation Produces Segregation.” American Political Science Review 114: 443–55.

Endnotes

[1] For example, in 1915 San Francisco adopted an ordinance forbidding laundries in certain neighborhoods. Because these laundries were overwhelmingly Chinese-owned, this was a way of trying to keep Chinese workers out of wealthier neighborhoods (Bernstein 1999). Between 1911 and 1917, Baltimore, Louisville, and other cities adopted ordinances forbidding blacks and whites from living in neighborhoods majority occupied by members of the other race, ordinances struck down by the US Supreme Court in Buchanan v. Warley (1917) (Power 1983). 

[2] This kind of deal is what economists call a “Coasean bargain” (Coase 1960). It makes no sense for regulations to prohibit people from making m utually beneficial exchanges. 

[3] Arizona and Florida have laws requiring local governments to compensate landowners if they take away much of the value of their property through new zoning laws. Oregon had such a law, but it was radically scaled back. 

[4] Penn Central Transportation Co. v. New York City, 438 US 104 (1978). 3): 454-466.

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‘The right thing’: Paxton, Cornyn trade blows in Texas primary but unite for Trump’s Iran strikes

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WACO, TEXAS — Two of this primary season’s fiercest rivals have one thing in common: unflinching support for President Donald Trump’s decision to strike Iran.

Texas Attorney General Ken Paxton and Sen. John Cornyn, R-Texas, are both leaning into their relationship with Trump and their record of support over the years as they vie for the Republican nomination in Texas’ contentious Senate primary. While it’s a crowded primary, including Rep. Wesley Hunt, R-Texas, all eyes are on Paxton and Cornyn. 

And as they push for Trump’s coveted endorsement in the final stretch of their intense campaign, their support of the president has remained unwavering.

Paxton told Fox News Digital outside his final campaign event ahead of the March 3 primary that he believed Trump ‘did the right thing’ with Operation Epic Fury. When asked what voters were saying, he said, ‘No one wants foreign wars.’

‘But the reality is, when you’ve got a country that’s trying to build nuclear weapons, that is willing to use them, and that has demonstrated terrorist activity for decades, 40 or 50 years, you’ve got to deal with that, or eventually it comes to you,’ Paxton said.

Cornyn had a front-row view of Trump’s decision.

Chairman of the Joint Chiefs of Staff Gen. Dan ‘Raizin’ Caine said Tuesday during a press conference at the Pentagon that Trump gave the go-ahead to launch Operation Epic Fury while en route to Corpus Christi, Texas, to promote his energy agenda.

Cornyn and others from the Texas delegation were on Air Force One when Trump gave the order. When asked by Fox News Digital whether he was aware of the plan while traveling with the president, Cornyn said Trump was ‘a very cool customer.’

‘He asked us whether we supported a strike on Iran,’ Cornyn recalled. ‘The members of Congress who were there in the cabin of Air Force One all raised our hands and said we did support that, recognizing the gravity of the decision and that only the president, as commander in chief, could make it.’

In Washington, D.C., lawmakers are grappling with the decision, with members of both parties calling for a vote to limit Trump’s war powers in the region. Both Paxton and Cornyn said they are open to debate on the matter.

Cornyn argued it comes down to a simple choice.

‘I want to know who’s standing on the side of American peace and security, and who’s standing on the side of a nuclear-armed Iran,’ Cornyn said. ‘I think that’s the choice.’

How long the country remains involved in the operation remains an open question. Trump said in a video address that the U.S. would continue operations ‘until all of our objectives are achieved,’ but later suggested it could take ‘four weeks or less.’

Some Senate Democrats, including Sen. Andy Kim, D-N.J., argued the strike was ‘the same dangerous and foolish decision’ former President George W. Bush, a fellow Texan, made more than two decades ago in the Middle East.

‘I think the president is doing his best to get in and out. Bush was into nation-building, a very different approach to things. I do not think that’s Trump’s idea here or his endeavor,’ Paxton said. ‘I’m very confident that he’s going to do whatever he can to take them out, and he’s encouraging the people in Iran to take their country back.’

‘He’s not encouraging us to move in and help them do that,’ Paxton added. ‘We’re just taking out the bad guys, and then it’s up to them to build their country in a way that they see fit.’

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Pelosi’s war powers flip-flop exposed in resurfaced Obama-era clip contradicts Trump criticism on Iran

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A clip of former U.S. House Speaker Nancy Pelosi, D-Calif., has resurfaced online where she flatly defended the then-Obama administration’s decision to strike Libya — without the congressional authorization she believes President Donald Trump should have secured before conducting his own strikes over the weekend.

‘You’re saying that the president did not need authorization initially and still does not need any authorization from Congress on Libya?’ a reporter asked Pelosi at a press event back in 2011.

‘Yes,’ Pelosi answered plainly.

The unambiguous answer contrasts sharply with Pelosi’s view of Trump’s strikes against Iran on Saturday.

In a joint effort targeting Iranian military leadership, the U.S. and Israel killed Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday, citing an imperative to halt Iran’s pursuit of developing a nuclear weapon.

Pelosi swiftly condemned the operation.

‘President Trump’s decision to initiate military hostilities into Iran starts another unnecessary war which endangers our servicemembers and destabilizes an already fragile region,’ Pelosi said in a post to X.

‘The Constitution is clear: decisions that lead our nation into war must be authorized by Congress.’

Pelosi, alongside other Democrats, is pursuing a war powers resolution that would limit Trump from taking further military action against Iran without express congressional approval.

Trump’s strikes bear similarity to President Barack Obama’s decision to strike Libya in 2011 under Operation Odyssey Dawn.

In that operation, Obama ordered a series of strikes against Libya in March 2011, looking to deter Muammar Gaddafi from attacking civilian protesters.

Gaddafi, known as the ‘Mad Dog of the Middle East,’ was the ruler of Libya from 1969 to 2011. He had a long and complicated relationship with the U.S. — at times aligning with national objectives and, at others, governing in a manner the U.S. couldn’t ignore.

The final straw came in the Libyan revolt of 2011, when demonstrations broke out in Benghazi and other cities. Like recent uprisings in Iran, Gaddafi met the threat to his rule with crushing force, marching his forces toward several Libyan cities that had resisted his power.

In what he described as attempts to uphold international law, Obama said the U.S., in partnership with the North Atlantic Treaty Organization (NATO), had taken the strikes to protect Libya’s civilians to protect Libya’s civilians.

‘We struck regime forces approaching Benghazi to save that city and the people within it,’ Obama said in remarks after the attacks.

The strikes did not kill Gaddafi.

Gaddafi was killed later that year at the hands of revolutionaries in October.

While Obama said he had consulted a bipartisan group of congressional lawmakers, he did not pursue a declaration of war before carrying out his strikes.

‘So, for those who doubted our capacity to carry out this operation, I want to be clear: The United States of America has done what we said we would do,’ Obama said.

Pelosi’s office did not respond to a request for comment on whether she saw any key differences between the attacks carried out by Obama and those now ordered by Trump.

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US Embassy struck by drones in Saudi Arabia as Americans instructed to shelter in place

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The U.S. Embassy in Riyadh was hit by two drones from Iran on Monday as Americans in Saudi Arabia were instructed to shelter in place. The embassy was empty at the time of the hits and no injuries were reported as a result of the attack.

On Tuesday, the embassy issued a security alert saying that the shelter in place order for Jeddah, Riyadh and Dhahran remained in effect, and it added that U.S. citizens throughout Saudi Arabia were advised to remain indoors. It also advised U.S. citizens to ‘avoid the embassy until further notice’ due to the attack.

‘We advise all U.S. citizens to maintain a personal safety plan. Crises can happen unexpectedly while traveling or living abroad, and a good plan helps you think through potential scenarios and determine in advance the best course of action,’ the embassy’s Tuesday alert read.

In the security alert, the embassy urged U.S. citizens to shelter in place, monitor its website for updates, enroll in the State Department’s Smart Traveler Enrollment Program (STEP), ensure their passports are valid for potential short-notice travel, remain aware of their surroundings, avoid demonstrations and large gatherings, follow local authorities’ instructions and monitor official information sources for the latest updates.

Secretary of State Marco Rubio in a video posted on X urged Americans in the Middle East to register with STEP, saying that it would allow them to see the latest safety and security guidance amid the ‘cowardly attacks’ from Iran.

Saudi Arabia’s Foreign Ministry released a statement condemning the attack, saying ‘the repetition of this cowardly and unjustified attack blatantly violates all international norms and laws, including the 1949 Geneva Convention and the 1961 Vienna Convention on Diplomatic Relations.’

‘The Kingdom emphasizes that the repetition of this flagrant Iranian behavior, which comes despite the Iranian authorities’ knowledge that the Kingdom has affirmed it will not allow its airspace or territory to be used to target Iran, will push the region toward further escalation,’ the foreign ministry’s statement read.

Iran has launched attacks in the region against Israel and several countries that have U.S. interests in retaliation for the U.S. and Israel’s joint military offensive known as Operation Epic Fury. Saudi Arabia condemned the retaliation on Feb. 28.

‘The Kingdom of Saudi Arabia expresses its rejection and condemnation in the strongest terms of the blatant and cowardly Iranian attacks that targeted the Riyadh Region and the Eastern Province, which were successfully intercepted,’ the Saudi Foreign Ministry’s Feb. 28 statement read. ‘These attacks cannot be justified under any pretext or in any way whatsoever, and they came despite the Iranian authorities’ knowledge that the Kingdom had affirmed it would not allow its airspace or territory to be used to target Iran.’

Amid the retaliatory strikes, the State Department has ordered the evacuation of non-emergency personnel and their families from Kuwait, Bahrain, Iraq, Qatar, Jordan and the United Arab Emirates.

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Americans in more than a dozen Middle East nations urged to flee

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The State Department on Monday urged Americans to depart immediately from more than a dozen countries across the Middle East, warning of ‘serious safety risks’ as the Iran war intensifies.

Assistant Secretary of State for Consular Affairs Mora Namdar said U.S. citizens should leave from Bahrain, Egypt, Iran, Iraq, Israel, the West Bank and Gaza, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates and Yemen.

The department said Americans who need help arranging departure via commercial means can contact the State Department 24/7 at +1-202-501-4444 from abroad or +1-888-407-4747 from the U.S. and Canada.

The travel push was amplified by the State Department’s official travel account, which urged Americans abroad to enroll in the Smart Traveler Enrollment Program, or STEP, at step.state.gov to receive the latest security updates from their nearest U.S. embassy or consulate.

Officials have warned that conditions in the region remain volatile, and that security situations can change quickly as fighting tied to the Iran conflict continues.

The warnings come days after the United States launched Operation Epic Fury, striking command-and-control centers, Iranian air defense capabilities, missile and drone launch sites.

In a Feb. 28 Worldwide Caution security alert, the State Department said Americans worldwide, and especially those in the Middle East, should exercise increased caution, monitor local security alerts and expect potential travel disruptions, including periodic airspace closures.

The evacuation push follows a cascade of security alerts issued by U.S. embassies across the region since Saturday, many ordering or recommending Americans to shelter in place.

At least nine U.S. missions, including Bahrain, Iran, Kuwait, the United Arab Emirates, Saudi Arabia, Iraq, Jordan, Qatar and Israel, have issued repeated shelter-in-place directives or advisories over the past several days.

In multiple cases, embassy personnel and their families were ordered to remain at home, with Americans urged to stay in secure structures away from windows and be prepared for incoming missiles or drones.

In Saudi Arabia, the embassy in Riyadh closed Tuesday after two Iranian drones struck the building, prompting expanded shelter-in-place orders for Jeddah, Riyadh and Dhahran. No injuries were reported.

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New satellite images show fires, naval base damage across Iran after US-Israeli strikes

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New satellite images offer a stark look at the devastation inside Iran after U.S.-Israeli strikes, while also revealing the damage left behind by Tehran’s retaliatory attacks across the region.

According to U.S. Central Command, which oversees American military operations across the Middle East, U.S. forces struck more than 1,250 targets during the first two days of Operation Epic Fury.

Planet Labs satellite imagery captured burning ships and damaged facilities at the Konarak base in southern Iran, as well as significant destruction at Iran’s naval headquarters in Bandar Abbas on the Persian Gulf, reflecting the scale of the strikes on military infrastructure.

Imagery from Vantor shows the Choqa Balk drone facility in western Iran was hit, along with damage to other key military and strategic sites targeted in the U.S.–Israeli strike campaign. 

Radar systems at the Zahedan air base in eastern Iran — near the country’s borders with Pakistan and Afghanistan — were also struck.

The two facilities are about 800 to 900 miles apart, underscoring the broad reach of the coordinated strikes.

Additionally, satellite imagery from Planet Labs shows thick smoke plumes rising above Tehran, signaling explosions and fires inside the Iranian capital.

The smoke underscores how the conflict has moved beyond isolated military sites and into the heart of Iran’s political center.

Iran responded with missile and drone strikes of its own, expanding the conflict across the region. Satellite images reveal damage to the port city of Sharjah in the United Arab Emirates. The city of Sharjah is the third most populous after Dubai and Abu Dhabi.

The Jebel Ali Port, the region’s largest maritime hub, was also targeted, underscoring how the retaliation extended beyond military sites to key infrastructure.

The U.S. has warned that further retaliation could follow, as both sides signal they are prepared for additional rounds of strikes. Pentagon officials said U.S. forces in the region remain on high alert and have publicly cautioned that any new attacks on U.S. citizens would prompt a forceful response.

With damage now visible from western Iran to the Persian Gulf, the coming days could determine whether the confrontation stabilizes — or spirals into a wider regional war.

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Blackrock Silver Receives First of Three Key Permits for the Tonopah West Project

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Blackrock Silver Corp. (TSXV: BRC,OTC:BKRRF) (OTCQX: BKRRF) (FSE: AHZ0) (‘Blackrock’ or the ‘Company’) is pleased to announce the issuance by the Nevada Department of Environmental Protection (NDEP), through the Bureau of Air Pollution Control, the Class II Air Quality and Surface Disturbance Permit (the ‘Permit’) for the Company’s Tonopah West mineral project (‘Tonopah West’) located along the Walker Lane Trend in Nye and Esmeralda Counties, Nevada, USA.

The Permit allows for the disturbance of up to 150 acres (60.7 Hectares) at Tonopah West with appropriate dust control measures and an ongoing program using the best practical methods to prevent particulate matter from becoming airborne. The term of the Permit is five (5) years, which can be extended and modified as Tonopah West moves toward permitting and construction of its proposed exploration decline, test mining and bulk sample extraction programs.

Data collection continues for the hydrogeological and geochemical programs that will form the basis for the Water Pollution Control Permit. Five humidity cells are in process to review acid generating potential of the waste and mineralized lithologies that will be encountered and transported to the surface during the tunneling and construction of the exploration decline including stockpiles for mineralized material mined as part of the bulk sample program.

The hydrogeological program is designed to understand the groundwater dynamics focused on potential flow and volumes to support required management and disposal as needed during the test mining and bulk sample phase of the program. Waste dump, stockpiles and portal entry engineering designs are on schedule and will be completed and used to calculate surface disturbance that will be the cornerstone for the Modification to the Nevada Reclamation Permit. The permitting process is on schedule with all permits anticipated by mid-2027. Once all permits are in hand, the Company will decide when to commence with the exploration decline, test mining and bulk sample extraction programs at Tonopah West.

Qualified Persons

Blackrock’s exploration activities at Tonopah West are conducted and supervised by Mr. William Howald, Executive Chairman of Blackrock. Mr. William Howald, AIPG Certified Professional Geologist #11041, is a Qualified Person as defined under National Instrument 43-101 – Standards of Disclosure for Mineral Projects. He has reviewed and approved the contents of this news release.

About Blackrock Silver Corp.

Blackrock Silver Corp. is an American-focused emerging primary silver developer systematically advancing the high-grade Tonopah West Project, situated in the historic ‘Queen of the Silver Camps’ in a jurisdiction consistently ranked as one of the top mining regions globally. The Company is backstopped by a veteran board and technical team with a proven track record of discovering, financing, and building major precious metal mines in Nevada and globally. Blackrock is committed to establishing a secure, high-margin, domestic supply of silver and gold.

Additional information on Blackrock Silver Corp. can be found on its website at www.blackrocksilver.com and by reviewing its profile on SEDAR+ at www.sedarplus.ca.

Cautionary Note Regarding Forward-Looking Statements and Information

This news release contains ‘forward-looking statements’ and ‘forward-looking information’ (collectively, ‘forward-looking statements‘) within the meaning of Canadian and United States securities legislation, including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements in this news release relate to, among other things: the Company’s strategic plans; the Company’s permitting initiatives at Tonopah West, including the anticipated receipt of all permits by mid-2027; the proposed commencement of an exploration decline, test mining and bulk sample extraction programs at Tonopah West; the Company’s de-risking initiatives at Tonopah West; estimates of mineral resource quantities and qualities; estimates of mineralization from drilling; geological information projected from sampling results; and the potential quantities and grades of the target zones.

These forward-looking statements reflect the Company’s current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include, among other things: conditions in general economic and financial markets; accuracy of assay results; geological interpretations from drilling results, timing and amount of capital expenditures; performance of available laboratory and other related services; future operating costs; the historical basis for current estimates of potential quantities and grades of target zones; the availability of skilled labour and no labour related disruptions at any of the Company’s operations; no unplanned delays or interruptions in scheduled activities; all necessary permits, licenses and regulatory approvals for operations are received in a timely manner; the ability to secure and maintain title and ownership to properties and the surface rights necessary for operations; and the Company’s ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive.

The Company cautions the reader that forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: the timing and content of work programs; results of exploration activities and development of mineral properties; the interpretation and uncertainties of drilling results and other geological data; receipt, maintenance and security of permits and mineral property titles; environmental and other regulatory risks; project costs overruns or unanticipated costs and expenses; availability of funds; failure to delineate potential quantities and grades of the target zones based on historical data; general market and industry conditions; and those factors identified under the caption ‘Risks Factors’ in the Company’s most recent Annual Information Form.

Forward-looking statements are based on the expectations and opinions of the Company’s management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made. The Company undertakes no obligation to update or revise any forward-looking statements included in this news release if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For Further Information, Contact:

Andrew Pollard
President and Chief Executive Officer
(604) 817-6044
info@blackrocksilver.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/286059

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Syntholene Energy Corp. Closes Oversubscribed $3.75 Million Non-Brokered Private Placement

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Proceeds to be used to Accelerate Procurement and Component Assembly for Demonstration Facility Deployment in Iceland

Syntholene Energy CORP. (TSXV: ESAF,OTC:SYNTF) (FSE: 3DD0) (OTCQB: SYNTF) (the ‘Company’ or ‘Syntholene’) is pleased to announce that it has closed its previously announced non-brokered private placement for aggregate gross proceeds of $3,750,000 (the ‘Financing’).

‘We are thrilled to have successfully closed this financing, which reflects strong investor confidence in Syntholene’s technology and vision,’ said Daniel Sutton, Chief Executive Officer. ‘These proceeds will accelerate the development of our demonstration facility in Iceland as we continue to advance our mission of delivering cost-competitive, carbon-neutral synthetic fuel.’

An aggregate of 8,333,333 units (each, a ‘Unit‘) were issued at a price of $0.45 per Unit pursuant to the Financing, with each Unit comprised of one common share of the Company (a ‘Common Share‘) and one non-transferable common share purchase warrant (a ‘Warrant‘). Each Warrant is exercisable into one additional Common Share at an exercise price of $0.63 for a period of two years from the date of issuance, subject to an acceleration provision whereby the Company may accelerate the expiry date of the Warrants if the daily trading price of the Common Shares equals or exceeds $0.90 on the TSX Venture Exchange for a period of ten consecutive trading days, in which case the Warrants will expire on the 30th day after the date on which notice is given by news release (the ‘Acceleration Provision‘).

Gross proceeds from the Financing are expected to be used toward the procurement and assembly of components for the Company’s planned demonstration facility in Iceland, and toward corporate marketing initiatives, investor relations and working capital.

In connection with the Financing, the Company entered into a fiscal advisory agreement dated February 11, 2026 with Canaccord Genuity Corp. ( ‘Canaccord‘), pursuant to which the Company and Canaccord agreed to extend the right of first refusal under the agency agreement between the Company, Canaccord and other agents dated September 18, 2025 to a period ending 18 months from closing of the Financing, and for the Company to pay certain fees to Canaccord in connection with the Financing. On closing of the Financing, Canaccord was paid a cash commission of $112,032, issued 248,960 non-transferable broker warrants, 111,111 corporate finance shares and 111,111 non-transferrable corporate finance warrants. Each broker warrant is exercisable into one Common Share at $0.45 per share for a period of two years from the date of issuance. Each corporate finance warrant is exercisable into one Common Share at $0.63 per share for a period of two years from the date of issuance, subject to the Acceleration Provision.

In addition, the Company entered into a finders’ fee agreement dated March 2, 2026 with Haywood Securities Inc. (‘Haywood‘), pursuant to which the Company agreed to pay certain fees to the Canaccord in connection with the Financing. On closing of the Financing, Haywood was paid a cash commission of $7,992 and issued 17,760 non-transferrable broker warrants. Each broker warrant is exercisable into one Common Share at $0.45 per share for a period of two years from the date of issuance.

All securities issued pursuant to the Financing are subject to a statutory hold period of four months and one day from the date of issuance, in accordance with applicable securities laws. The securities offered pursuant to the Financing have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release does not constitute an offer to sell or a solicitation of an offer to buy securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The Financing constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (‘MI 61-101‘), as certain related parties of the Company participated in the Financing as follows: John Kutsch, director and officer acquired 1,455,556 Units for $655,000, Grant Tanaka, Chief Financial Officer acquired 111,111 Units for $50,000, and Anna Pagliaro, director acquired 22,222 Units for $10,000. Pursuant to Sections 5.5(b) and 5.7(1)(a) of MI 61-101, the Financing is exempt from the requirement to obtain a formal valuation and minority shareholder approval in respect of this transaction as the Company is not listed on the specified markets set out in MI 61-101 and the fair market value of the consideration from the related parties participating in the Financing is not greater than 25% of the market capitalization of the Company. The aforementioned directors disclosed their interest in the Financing to the board of directors of the Company, and the disinterested members of the board approved the Financing and related party transactions under applicable corporate law. In connection with the Financing, each investor in the Financing entered into a standard form of subscription agreement with the Company containing customary terms for a private placement of the nature of the Financing. The Company did not file a material change report in respect of the Financing at least 21 days before the closing of the Financing, which the Company deems reasonable in the circumstances in order to complete the Financing in an expeditious manner.

Early Warning Disclosure – Acquisition by John Kutsch

John Kutsch, a director of the Company, acquired 1,455,556 Units pursuant to the Financing for aggregate consideration of $655,000 representing a price of $0.45 per Unit. Immediately prior to closing of the Financing, Mr. Kutsch beneficially owned, directly or indirectly, 15,583,467 Common Shares, 543,400 Options, 100,000 RSUs and 2,386,755 deferred consideration shares (‘DCSs‘), representing approximately 22.6% of the issued and outstanding Common Shares on a non-diluted basis and, assuming the settlement of all RSUs into Common Shares, exercise of all Options into Common Shares and issuance of all DCSs, approximately 25.86% of the issued and outstanding Common Shares on a partially diluted basis. Immediately following closing of the Financing, Mr. Kutsch beneficially owns, directly or indirectly, 17,039,023 Common Shares, 543,400 Options, 100,000 RSUs, 2,386,755 DCSs and 1,455,556 Warrants, representing approximately 21.96% of the issued and outstanding Common Shares on a non-diluted basis and, assuming the settlement of all RSUs into Common Shares, exercise of all Options and Warrants into Common Shares and issuance of all DCSs, approximately 26.23% of the issued and outstanding Common Shares on a partially diluted basis. The Common Shares held by Mr. Kutsch are held for investment purposes and were acquired for investment. Mr. Kutsch has a long-term view of the investment and may acquire additional securities of the Company either on the open market, through private acquisitions or as compensation or sell the securities on the open market or through private dispositions in the future depending on market conditions, general economic and industry conditions, the Company’s business and financial condition, reformulation of plans and/or other relevant factors. Certain securities held by Mr. Kutsch as subject to Tier 2 escrow in accordance with TSXV policies, as described in the Filing Statement dated November 30, 2025, a copy of which is filed on the Company’s profile on SEDAR+.

A copy of John Kutsch’s early warning report will be filed on the Company’s profile on SEDAR+ (www.sedarplus.ca) and may also be requested by mail at Syntholene Energy Corp. Suite 1723, 595 Burrard Street, Vancouver, BC V7X 1J1, Attention: Corporate Secretary or phone at 604-684-6730.

About Syntholene

Syntholene is actively commercializing its novel Hybrid Thermal Production System for low-cost clean fuel synthesis. The target output is ultrapure synthetic jet fuel, manufactured at 70% lower cost than the nearest competing technology today. The company’s mission is to deliver the world’s first truly high-performance, low-cost, and carbon-neutral synthetic fuel at an industrial scale, unlocking the potential to produce clean synthetic fuel at lower cost than fossil fuels, for the first time.

Syntholene’s power-to-liquid strategy harnesses thermal energy to power proprietary integrations of hydrogen production and fuel synthesis. Syntholene has secured 20MW of dedicated energy to support the Company’s upcoming demonstration facility and commercial scale-up.

Founded by experienced operators across advanced energy infrastructure, nuclear technology, low-emissions steel refining, process engineering, and capital markets, Syntholene aims to be the first team to deliver a scalable modular production platform for cost-competitive synthetic fuel, thus accelerating the commercialization of carbon-neutral eFuels across global markets.

For further information, please contact:
Dan Sutton, CEO
comms@syntholene.com
www.syntholene.com
+1 608-305-4835

Investor Relations
KIN Communications Inc.
604-684-6730
ESAF@kincommunications.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of applicable securities laws. The use of any of the words ‘expect’, ‘anticipate’, ‘aims’, ‘continue’, ‘estimate’, ‘objective’, ‘may’, ‘will’, ‘project’, ‘should’, ‘believe’, ‘plans’, ‘intends’ and similar expressions are intended to identify forward-looking information or statements. All statements, other than statements of historical fact, including but not limited to statements regarding the proposed use of proceeds of the Financing, development of the test facility, commercial scalability, technical and economic viability, anticipated geothermal power availability, anticipated benefit of eFuel, and future commercial opportunities, are forward-looking statements.

The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including without limitation the assumption that the Company will be able to execute its business plan, including that it will use the proceeds of the Financing, if any, as described herein, that the Company will be able to advance its planned test facility, that the eFuel will have its expected benefits, that there will be market adoption, and that the Company will be able to access financing as needed to fund its business plan. Although the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature, they involve inherent risks and uncertainties.

Actual results could differ materially from those currently anticipated due to a number of factors and risks, including, without limitation, Syntholene’s ability to meet production targets, realize projected economic benefits, overcome technical challenges, secure financing, maintain regulatory compliance, manage geopolitical risks, and successfully negotiate definitive terms. Syntholene does not undertake any obligation to update or revise these forward-looking statements, except as required by applicable securities laws.

Readers are advised to exercise caution and not to place undue reliance on these forward-looking statements.

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES

Corporate Logo

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/286066

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Why Do Investors Keep Buying Century Bonds?

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Every few years, the century bond returns — not exactly with a bang, but with a new, shiny calculation involved. 

As reported by the FT and Bloomberg last month, Google’s parent company has been busy tapping the bond market for everything from 3-year to 50-year bonds in several major markets (US, Switzerland, UK). Now it’s trying for the ultimate prize: a century bond.

Century bonds are exactly what they sound like: a bond, often issued by a government or a long-lived institution like a university, that runs for a hundred years, often at interest rates somewhat above prevailing market rates or reference rates. For the issuer, they make a ton of sense, generationally and actuarially: They receive funds for investments right now, lock in financing costs for a long time, and face no financing rollover risk. 

It’s more of a puzzle why buyers show up for these issuances, especially since the market participants have very recent examples of being seriously burned. As a bondholder of extremely long-dated bonds, you’re always living in financial terror, waiting for rates to rise and inflict multiplied damage on the market value of your investment. Since bond prices move inversely with interest rates, the effects are more pronounced the further into the future — the longer-dated — the bond is. The loss of market value on a hundred-year bond when interest rates increase is far greater than on a ten- or two-year bond. When it does, this “dangers of duration,” as FT journalist Robin Wigglesworth has called it, completely undermines your finances for decades on end.

The last two times century bonds popped out of academic obscurity, they got a well-deserved bad rap. In the 1990s, several large companies tried them — and locked in steep and expensive rates in the five-percent region while interest rates kept falling toward zero for decades. In the late 2010s, with ZIRP dominating the world’s financial markets and trillions of mostly government debt traded at negative yield, we started seeing new players dusting off this old idea, since money now was just so cheap to be had: Universities like UPenn, Virginia, Oxford, and Rutgers took in funds for a hundred years in the two to four percent range. Then the opportunistic governments (including Ireland, Belgium, Mexico, Argentina) also successfully placed century bonds at eye-poppingly low rates. The most extreme participant was Austria, whose perfectly timed century bonds — of 2.1 percent in 2017, and then 0.85 percent and even zero percent right on the cusp of the ‘rona inflation — saved its taxpayers a fortune. 

Logic alone dictates that if you sell debt due in 2120 for zero percent or 0.85 percent a year, and then CPI (and thus your incomes and tax revenues) rise to upward of 10 percent for a few years, you’re doing great. Indeed, bond math logic made that exercise even more painful, with some of these placements trading at cents on the euro a few years after issuance, vaporizing bondholders’ money. 

Enter Big Tech: The AI Investment Needs Meet Underwater Pension Systems

With Alphabet/Google’s placements in November, and now its Swiss franc and sterling placements, it’s the first time a big tech company has dared to come back to this perilous market since the 1990s. 

What’s so odd about this hunger for long duration is that in the 2010s and during the pre-inflation pandemic years, at least bond investors collectively were starved for yield, ready to do anything to eke out a few extra basis points of return. In 2026, there are still positive yields to be had. The mystery, then, is not why Google issued but why investors rushed in. 

The $20-billion USD placement finalized at treasury yields+95 bps, while the GBP bond of £5.5, about $7.5 billion, placed at 120 basis points above gilts; the £1 billion century bond was ten times oversubscribed, according to Reuters, and carries a coupon of 6.125 percent until 2126. With the fairly recent history of century bond investors burning obscene amounts of money on mistaken duration bets, the question remains: Why were these long-maturity debt placements massively oversubscribed, at rate spreads of only about a hundred basis points above safe assets? 

Three candidate explanations. 

First, defined-benefit pension funds are extremely hungry for long-dated debt. Reinsurers and life insurance providers, too. They have long-dated liabilities that rise and fall in (net present) value with interest rates; owning equally long-dated assets compensates somewhat for that. “Strong demand from UK pension funds and insurers has made the sterling market a go-to venue for issuers seeking longer-dated funding,” reported Tasos Vossos for Bloomberg.

Second, the large embedded rate-leverage is kind of capital efficient. Bond funds don’t buy individual issuances in isolation, but compose a portfolio with a combined desired outcome, constantly micromanaging exposure and duration vis-à-vis a benchmark index. Remarked Marcus Ashworth in an opinion piece, 

Buyers of these types of security are looking to dynamically balance the risk of an entire portfolio rather than caring about annual coupon weights. Ultra-long debt allows portfolio managers to barbell their duration needs by buying more 10-year liquid debt rather than illiquid 20- to 50-year maturities.

Which is, perversely, why riding that zero-percent Austrian century bond all the way to the basement between 2020 and 2025 could have been beneficial to certain bond portfolios that paired it with other investments. When rates fall, these bonds soar, letting market participants ride the convexity game in a broad macro rate (and now also FX) game. Under functional monetary regimes with price predictability, long-dated debt is both efficient and common — think about the perpetual British Consol, the financial instrument that made the British Empire.

Plus, there’s a ton of capital-intensive bond market efficiency involved in going way out on maturity. Explains quant researcher Navnor Bawa discussing the news on his Substack: 

A one percent decline in long-term rates generates approximately 40-50 percent capital appreciation on century bonds versus 15-20 percent on 30-year debt  —  making it the most capital-efficient duration exposure available for institutions positioning for lower long-term rates.

Third, this time is different and bond investors have inflation fatigue. Many might just believe that what happened during the pandemic was a once-in-a-generation one-off event and that central bankers will do better going forward. If inflation settles back near its more usual two to three percent, or indeed rates fall back toward zero in an easy/easier monetary policy regime, locking in long real duration today at slightly higher rates might look clever rather than reckless.

This might all work out great for the issuers, and bondholders will celebrate their contribution to the AI revolution… for a few years until we have the next bout of runaway inflation prints. Most likely, the investors in these oversubscribed bonds are setting themselves up for financial troubles, by the sudden jolt of interest rates jumping higher or the slow, gradual erosion of fiat purchasing power.

The spread over sovereign credit says something about the balance sheet strength and the optimism surrounding AI-related big tech investments, certainly with behemoths like Google. Funding operations at these rates show either incredible creditworthiness — with Google and the current wave of AI optimism, at least believable — or devastating mispricing. 

Investors got the memo about AI capacity building needs, loud and clear. With collective bond market amnesia, that was about the only meaningful bit they took away. 

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Six Takeaways from the Supreme Court’s Tariff Ruling

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On Friday, the Supreme Court issued its 6-3 opinion in the Learning Resources, Inc. v. Trump, and if you’ve spent any time reading or watching the news in the past few days, you’ve probably seen some version of “the Court struck down Trump’s tariffs.” 

While true, the analysis also strips out almost everything that matters. Here’s what the decision actually does (and does not) mean:

1) This is not a ruling against tariffs. It’s a ruling against one way of imposing them.

First and foremost, it’s important to understand that the Court very clearly did not say that all Presidentially imposed tariffs are unconstitutional, period. It also did not say anything about the justifications that the President gave for imposing the tariffs: lowering trade deficits or curtailing fentanyl smuggling. What the Court did say is that the International Emergency Economic Powers Act (IEEPA) does not, in and of itself, give the President the authority to impose tariffs. All other tariff powers remain intact. This report from the Congressional Research Service provides a useful overview of each of these powers and their limits.

While these powers could, in theory, replace many of the tariffs that President Trump originally imposed under IEEPA, they cannot replace all of the tariffs, and they each require additional hurdles or have specified limits. 

Section 122, which the President has already used, only allows tariffs up to 15 percent to address “balance-of-payment deficits.” Some have time limits, while others require reports, investigations, and consultations with foreign governments. 

Importantly, though, none allow the President to impose tariffs because he didn’t like how he was talked to by a fellow head of state.

2) The case turned on seven words

The International Emergency Economic Powers Act of 1977 authorizes the President to “regulate… importation… during a declared national emergency.” The entire case turned on these seven words and whether they included the power to impose tariffs. Six justices of the Court said “no.” Justice Roberts, writing the majority’s opinion, held that tariffs are fundamentally a taxing power, not a foreign affairs power, and that they differed in kind, not just degree, from the trade tools that IEEPA explicitly authorizes.

The Court also pointed out that no President had ever used IEEPA to impose tariffs before. While this is not in and of itself a winning argument (there is, after all, a first time for everything), it is still meaningful. Whenever an administration claims new power from a decades-old statute, the major questions doctrine throws up a red flag.

3) The Major Questions Doctrine is here to stay

This ruling is the latest, and possibly the most consequential, application of the major questions doctrine to date. Briefly, this relatively new doctrine contends that any time “an agency seeks to decide an issue of major national significance, its action must be supported by clear congressional authorization,” (emphasis original). 

In their 2001 opinion in Whitman v. American Trucking Associations, Inc., the Court said, “Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions — it does not, one might say, hide elephants in mouseholes.”

Justice Gorsuch, in a concurring opinion, put this clearly, writing, “the President claims, Congress passed that power on to him in IEEPA, permitting him to impose tariffs on nearly any goods he wishes, in any amount he wishes, based on emergencies he himself has declared. He insists, as well, that his emergency declarations are unreviewable. A ruling for him here, the President acknowledges, would afford future Presidents the same latitude he asserts for himself. So another President might impose tariffs on gas-powered automobiles to respond to climate change. Or, really, on virtually any imports for any emergency any President might perceive. And all of these emergency declarations would be unreviewable. Just ask yourself: What President would willingly give up that kind of power?”

It is for this reason, the Court’s majority held, that Congress must clearly give the power to the President. The President cannot simply assert that he has Article I powers.

4) The Dissent Deserves a Fair Hearing

Justice Kavanaugh, writing in dissent, accepts the validity of the major questions doctrine, but questions whether it applies in this particular case. He cites Justice Gorsuch’s four “telling clues” from West Virginia v. EPA (which can be found on pages 746–748) and argues on pages 35–44 of the Court’s opinion that at least three of them do not apply. 

For example, he argues that in 1976, Congress and the Court understood that the phrase “adjust the imports” found in Section 232 of the Trade Expansion Act allowed the use of fees to do so despite this word not appearing in the Act. Since IEEPA was passed one year later in 1977, Justice Kavanaugh argues that the phrase “regulate… imports” also authorizes the imposition of fees, of which tariffs are but one option. Indeed, as he writes, “Any citizens or Members of Congress in 1977 who somehow thought that the ‘regulate… importation’ language in IEEPA excluded tariffs would have had their heads in the sand.”

The majority had responses to this, primarily pointing out the difference in the scale of what President Trump was doing versus what Presidents Ford or Nixon had done. Likewise, reasonable people can debate whether tariffs are a “tax” or a “fee” (hint: they’re a tax) and the semantic/legal differences therein. But as Kavanaugh points out, this is in direct opposition to the Court’s previous stance that the major questions doctrine is not a “magic words” test, whereby the Court is essentially requiring that Congress use very specific words to allow very specific actions by agencies, including the President. 

5) Refunds Are a Possibility

In addition to the above, Justice Kavanaugh is also the only Justice to bring up the issue of refunds in the Court’s ruling, and he does so only four times. He notes that “The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others,” and that “Refunds of billions of dollars would have significant consequences for the US Treasury.” In a sense, he’s saying that American importers write the tariff check but pass on at least some of the tariff burden to American consumers in the form of higher prices. If the refund process happens, the refunds will all go to the American importers, not the end consumers. This process, as he acknowledges, will be “a mess.”

Indeed, we’re already seeing tariff refund cases submitted. FedEx has filed with the US Court of International Trade, and there are reasons to believe that they will not be alone. Will companies seeking refunds all be required to file individual lawsuits, and if so, in which court? Or will they be allowed to file a class-action lawsuit?

6) This Is Exactly What Checks and Balances Look Like

The easy, attention-grabbing headline that this is a win for free traders or a setback for economic nationalists is tempting, but misleading. The more important insight from this, whether you agree with the majority or the dissent, is that this is exactly how the system is supposed to work.

The White House pushed the boundaries of a statute beyond what its text and history would allow. Private parties challenged that action in court. The judicial branch reviewed it and overturned the White House.

Justice Gorsuch, on page 46, summarizes it nicely: “For those who think it important for the Nation to impose more tariffs, I understand that today’s decision will be disappointing. All I can offer them is that most major decisions affecting the rights and responsibilities of the American people (including the duty to pay taxes and tariffs) are funneled through the legislative process for a reason… In all, the legislative process helps ensure each of us has a stake in the laws that govern us and in the Nation’s future. For some today, the weight of those virtues is apparent. For others, it may not seem so obvious. But if history is any guide, the tables will turn and the day will come when those disappointed by today’s result will appreciate the legislative process for the bulwark of liberty it is.”

The question before the Court was never “are tariffs good or bad?” The question was whether one person should be allowed to impose or alter tariffs against any nation at any time and for any reason he alone determines is an “emergency,” with no Congressional approval or judicial review. And the answer to that question, for now at least, is “no.”

That said, let’s not confuse this legal victory for an economic one. The President has already implemented new tariffs under Section 122, has promised that other countries won’t be celebrating for long, and has assured his supporters that he will “Keep Calm and Tariff On.” This Administration was not surprised last May when the International Trade Court ruled against it, and has long promised that they have alternative plans ready to go if needed.

Still, this ruling is a victory for dispersed power, constitutional limits, and legislative accountability. And we should celebrate it as such.

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