Wednesday, June 21, 2006

ENERGY SECURITY GLOBAL PRIORITY AS COAL BECOMES WORLD'S FASTEST GROWING FOSSIL FUEL

How fast is global energy use growing? Is climate change getting worse? And will we face a worldwide oil shortage soon? These questions, and more, were addressed at last week's launch of BP's Statistical Review of World Energy. For more than half a century, BP has produced an annual compendium of data on global energy trends. Always of interest, this year's effort left me reassured, but worried too.

The backdrop to this report, of course, is a sharp rise in energy prices - particularly oil. Brent crude averaged $55 a barrel in 2005, up from $38 the previous year. So far in 2006, oil has surged again, averaging $65 a barrel and peaking at $74 in May. For a while the global economy sailed on regardless. But in recent months expensive oil has begun seeping through into inflation. Across the world, interest rates are rising and stock markets convulsing as a result of sky-high energy costs. The UK is not immune. A rate rise is now almost inevitable, possibly as soon as August, after last week's news that inflation had breached the Bank of England's 2 per cent target. Again, the reason is the cost of fuel.

Yet BP's report shows the world is reacting to soaring oil and gas prices by stemming its energy use. In 2005 world energy demand grew by 2.7 per cent, down sharply from 4.4 per cent the previous year. In the US, the world's largest energy consumer, demand actually fell - even though the economy grew by 3.5 per cent. So, for the first time in more than two decades, the US combined above-trend growth with an absolute decline in fuel consumption. That is good news.

BP's data shows that the world is tailoring its energy use, too - switching to relatively cheaper sources. Gas prices, for instance, have risen much less than the price of oil. As a result, global gas demand grew by 2.3 per cent last year while oil use rose by only 1.3 per cent. That, again, is reassuring.

But when you look elsewhere in the report, you discover that coal - the "dirtiest" fuel source - has taken up much of the energy slack. Coal is the world's fastest growing fuel, with consumption up by 5 per cent last year, driven in large part by an almost insatiable demand from power stations in China. This is worrying. The current concentration of carbon dioxide in the atmosphere is 380 parts per million. As the world switches away from expensive oil and gas towards cheap coal, the environment is taking the strain. As Lord Browne, BP's chief executive, observed: "The level of emissions worldwide is now about 20 per cent higher than when the Kyoto protocol was signed in 1997."

Nor is it likely that "renewable" energy sources will come to the rescue. BP stressed its commitment in this area - announcing a 270 million pound investment to create a "biosciences energy research laboratory" attached to a major university. But its report makes clear that wind power accounted for only 0.7 per cent of global electricity production in 2005. Even the much-vaunted use of ethanol generated energy equivalent to a mere 0.4 per cent of global oil use.

Perhaps the biggest long-term concern is that the oil will simply run out - with global production peaking in the near future and then spiralling into decline. Until quite recently, such "peak oil" theories were largely confined to doom-mongers and cranks. But earlier this month the boss of French-owned Total, one of the world's major oil outfits, said global demand was so strong that production could peak as early as 2020.

Browne adopted his most persuasive voice to try to knock this view into touch. "There isn't a shortage of oil reserves," he said. "There really isn't". But buried in BP's report is an interesting - and chilling - fact. Between 1985 and 1995 global oil reserves grew by 3 per cent per year as new fields were discovered. Last year, in contrast, reserves increased by only 0.55 per cent - despite sky-high prices and a desperate search for new oil. I look forward to next year's BP Energy Review, particularly to seeing that crucial figure on the growth in oil reserves.

Sticking with oil, last week I visited Richard Edward - a small, family-run printing outfit in Thamesmead. If you want to understand the business implications of high energy costs, I suggest you give them a call. "High oil prices are killing us," says company executive Louisa Moger. "Our paper suppliers are energy intensive, we're energy intensive and so are our distributors. And just as our fuel costs are going through the roof, competition from Asia means we can't pass these costs on to customers".

This phenomenon - the impact of high oil prices on profitability - is the subject of a new study by BDO Stoy Hayward, the business services firm. It shows that in the past six months the rising crude price has cost UK businesses an additional 11.3 billion pounds. Perhaps inevitably, manufacturing has been hit worst, suffering 2.3bn of additional oil-related costs. As a result, the report predicts a sharp rise in UK manufacturing firms going bankrupt - from 1,800 in 2005 to 2,150 this year. But the report shows the striking detrimental impact of oil in other sectors too - including transport, pharmaceuticals, agriculture and construction. High oil has, so far, provoked UK inflation - and the expectation of higher rates. The impact of the black stuff on profits could soon bring us higher unemployment too.

The Sunday Telegraph, 18 June 2006





KYOTO FOLLY: CARBON COSTS MENACE INVESTMENT IN EUROPE

The rising costs of reducing carbon dioxide emissions by smokestack industries may trigger a shift in major investments in such sectors from Europe to countries where carbon controls are less strict, analysts said. The European Union's carbon market is supposed to control the supply of pollution permits to heavy industry, and so drive cuts in greenhouse gas emissions, as the bloc tries to meet its Kyoto Protocol goals and fight climate change.

The European Commission will press some EU states to tighten permit quotas in the second phase of the trading scheme, from 2008-2012, especially after industry got more permits than it needed last year. But analysts say an overly tough approach could drive up the price of permits, called carbon credits, to as much as 40 euros ($50.48) per tonne in the second phase, from some 15 euros per tonne now.

"In the future, (European) companies may decide to make big investments abroad, say in Brazil, because Europe is too expensive," Michael Grubb, chief economist at the Carbon Trust, a UK thinktank, told a European power conference last week. "There is an option of driving energy-intensive industries out of Europe," he said on Friday.

Europe's Emissions Trading Scheme (ETS) is already changing the way energy-intensive companies conduct business, with costs of carbon emissions influencing strategic, organisational and economic decisions, executives from energy firms and sector analysts said at the conference. Raffaele Chiulli, CEO of energy firm EuroFuels -- part of the world's second-biggest cement maker Holcim -- said rising production costs on the back of carbon prices have already influenced decisions on the location of new production. "This may lead to competitive disadvantage for EU producers against importers from countries not subject to ETS and to loss of market shares," Chiulli told the conference. Buying carbon credits at current prices raises Holcim's production costs by 20 percent and on top of this, the cement maker's costs increase because electricity prices rise as utilities have to factor in carbon market prices, Chiulli said.

The trading scheme controls the emissions of the power, pulp and paper, oil and gas and steel and cement sectors. Its impact can be wider because carbon prices can push up power prices. In a strange twist, power firms -- some of Europe's biggest polluters -- have profited by passing on to consumers the cost of using pollution permits which they need to burn fossil fuels, but which they got for free at the market's outset. To cut their costs further, utilities are investing in green projects in poorer countries to buy pollution reduction units using a Kyoto Protocol tool, as they say CO2 reduction costs in Europe are too high. Such moves are seen by some observers as a precursor for shifting major investments outside the EU.

Reuters, 13 June 2006






CLIMATE CONSENSUS AND THE END OF SCIENCE



It is now firmly established, repeated ad nauseam in the media and elsewhere, that the debate over global warming has been settled by scientific consensus. The subject is closed. It seems unnecessary to labour the point, but here are a couple of typical statements: "The scientific consensus is clear: human-caused climate change is happening" (David Suzuki Foundation); "There is overwhelming scientific consensus" that greenhouse gases emitted by man cause global temperatures to rise (Mother Jones).

Back when modern science was born, the battle between consensus and new science worked the other way around. More often than not, the consensus of the time -- dictated by religion, prejudice, mysticism and wild speculation, false premises -- was wrong. The role of science, from Galileo to Newton and through the centuries, has been to debunk the consensus and move us forward. But now science has been stripped of its basis in experiment, knowledge, reason and the scientific method and made subject to the consensus created by politics and bureaucrats.

As a mass phenomenon, repeated appeals to consensus to support a scientific claim are relatively new. But it is not new to science. For more than a century, various philosophical troublemakers have been trying to undermine science and the scientific method. These range from Marxists who saw science as a product of class warfare and historical materialism -- Newton was a lackey of the ruling classes and pawn of history -- to scores of sociological theorists and philosophers who spent much of the 20th century attempting to subvert the first principles of modern, Enlightenment science.

Reproduced on this page is the latest Wikipedia entry titled "Consensus Science." It sets out a bit of context for one aspect of the use of consensus in science. While the Wikipedia item is a useful, if rough, polemical introduction to the issue, it doesn't begin to plumb the ocean of dense philosophical discourse behind the movement to turn science -- the pursuit of fact, knowledge and truth through the scientific method, based on reason and experiment -- into a great social swamp of beliefs marked by consensus, social arrangements and customarily accepted ideas.

Throughout the 20th century, science was overwhelmed by the sociology of science and "sociological explanations of knowledge." At the extreme, we end up with the idea that there are no facts and nothing is verifiable. "Customs and conventions are seen as the creations of human agents, actively negotiated and actively sustained, under the collective control of those who initially negotiate them.... Scientific knowledge is seen as customarily accepted belief." This is from "Sociological Theories of Scientific Knowledge," an essay by Barry Barnes, University of Edinburgh, in the Routledge Companion to the History of Modern Science (1990).

Most of the recent history of science theory is a series of attempts by one camp after another to demolish the basic principles of science and install a new order based on political and sociological collectivism. While early hard-core Marxist views on science were too crazy to gain support, various "New Marxists" came along with more subtle forms of subversion. "This New Marxism," said Roy Porter of London's Wellcome Institute for the History of Medicine, "has aimed to depriviledge science, restoring it to the same plane as other belief systems."

If science were to become a belief system, then the belief with the greatest number of followers would become established fact and received knowledge. Knowledge based on observation and rational inference would play second fiddle to what Barnes calls "customarily accepted belief." This belief is "sustained by consensus and authority." This is not just one science writer proposing a theory. Barnes is reporting on the mainstream elements of new science thought over more than a century. Ideas come from such well-known brand names such as Marx and Kant, but mostly from a procession of philosophers even most scientists have never heard of. It's a jungle, to be sure, filled with impenetrable language and philosophical jargon. But the trend is clear. Global warming science by consensus, with appeals to United Nations panels and other agencies as authorities, is the apotheosis of the century-long crusade to overthrow the foundations of modern science and replace them with collectivist social theories of science.

"Where a specific body of knowledge is recognized and accepted by a body of scientists, there would seem to be a need to regard that acceptance as a matter of contingent fact," writes Barnes. This means that knowledge is "undetermined by experience." It takes us "away from an individualistic rationalist account of evaluation towards a collectivist conventionalist account." In short, under the new authoritarian science based on consensus, science doesn't matter much any more.

If one scientist's 1,000-year chart showing rising global temperatures is based on bad data, it doesn't matter because we still otherwise have a consensus. If a polar bear expert says polar bears appear to be thriving, thus disproving a popular climate theory, the expert and his numbers are dismissed as being outside the consensus. If studies show solar fluctuations rather than carbon emissions may be causing climate change, these are damned as relics of the old scientific method. If ice caps are not all melting, with some even getting larger, the evidence is ridiculed and condemned. We have a consensus, and this contradictory science is just noise from the skeptical fringe.

Jasper McKee, professor of physics at the University of Manitoba and editor of Physics in Canada, asked recently: "Is scientific fact no longer necessary?" Apparently it's not. "In the absence of hard scientific fact or causal relationships, a majority vote of scientists can determine scientific truth." Perhaps, says Mr. McKee, the great scientific revolution begun in the Renaissance of the 17th century is over and the need for science is gone. "The prospects," he says, "are alarming." In the end, though, real science can only win. If real science produces truth that the consensus method cannot, any consensus will inevitably fail to hold. Until then, however, we will have to live with the likes of David Suzuki.

National Post, 16 June 2006

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Many people would like to be kind to others so Leftists exploit that with their nonsense about equality. Most people want a clean, green environment so Greenies exploit that by inventing all sorts of far-fetched threats to the environment. But for both, the real motive is to promote themselves as wiser and better than everyone else, truth regardless.

Global warming has taken the place of Communism as an absurdity that "liberals" will defend to the death regardless of the evidence showing its folly. Evidence never has mattered to real Leftists


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1 comment:

BIRDZILLA said...

Al Gore is nuts i mean he is crazy and out of his mind i would say he is crazy as a loon but the loon is more intellegent that that wacko