Friday, September 30, 2022

How Government Restrictions on Domestic Drilling Drive Up Gas Prices

The term “mineral estate” refers to the ownership of minerals, including oil and natural gas, under the Earth’s surface. The federal mineral estate contains 2.46 billion acres made up of 1.76 billion acres in the Outer Continental Shelf (the ocean floors off America’s coasts) and 700 million onshore subsurface acres.

The state and private land mineral estate is around 1.5 billion acres by comparison. Even though the federal estate is almost 1 billion acres larger than the state and private mineral estate, most of our oil and natural gas comes from private and state lands. For perspective, one billion acres is about six times the size of Texas.

The United States simply doesn’t allow the energy potential from this vast federal estate to be unleashed. Historically, oil from federal lands (onshore and offshore) was consistently under 20% of total U.S. production until the late 1990s. Then, production percentages increased (primarily offshore) to over 30% in the early 2000s and reached a high point in 2009, coincident with declining production on non-federal lands in Alaska and other states.

But the numbers have come back down. According to the Department of Interior and the Energy Information Administration, federal offshore oil production was only about 15% of total U.S. oil production in 2020 and federal onshore production was only about 8%.

These low numbers are expected to get much worse for American consumers because of President Joe Biden’s moratorium that has essentially stopped most new leasing on lands and waters owned by U.S. taxpayers. They will also decline because of the increasing fees, rentals, and royalties—plus regulations—that he has imposed on oil and gas producers through executive actions and that Congress has imposed through the so-called Inflation Reduction Act.

The fact is, trying to produce energy from federal lands is unnecessarily hard, which is why the standout states that have led to the energy revolution—Texas, North Dakota, and Pennsylvania—have low federal land ownership of 1.4%, 4.2%, and 2.5%, respectively.

The impacts of who owns and manages lands are astounding. For example, from 2009 through 2013, oil production from state and private lands increased 61%, but on lands controlled by the federal government, oil production dropped 6%.

States and private landowners aren’t required by distant landlords and “green” interest groups based in Washington or Manhattan to entertain every last objection their lawyers can conjure up to stop investment projects. Instead, they negotiate the terms and conditions of leases, reclamation, and environmental protection with the knowledge that it is their land, their water, and their air that will be affected.

Apparently, states and landowners agree that mutually beneficial contracts are superior to the federal government’s Byzantine rules and regulations and all their second-guessing, armchair quarterbacking, and denials through delays.


Another way government impacts gas prices is through the permitting of pipelines necessary to transport energy in the most efficient, economic, and environmentally sound way. America has, literally, millions of miles of energy pipelines, out of sight and out of danger from surface accidents.

While not connected to the price of gasoline at the pump, it is worth noting that the natural gas system alone has over 3 million miles. Petroleum and petroleum product pipelines account for about another 225,000 miles. The permitting of these pipelines keeps surface transportation incidents with trucks and trains to a minimum, reduces environmental impacts, and is the most economic means of transport.

Denying construction permits simply forces products onto already burdened surface transportation systems, as is the case with Biden’s cancellation of the Keystone XL pipeline cross-border permit on his first day in office. The pipeline would have allowed nearly 1 million barrels per day of Canadian and North Dakota oil to economically be transported to refiners in the Gulf Coast, which would have induced Canada to invest more in the development of its enormous oil sands reserves.

Alberta Premier Jason Kenney stated his province could provide 1 million barrels per day of additional oil to the U.S. within two years if a pipeline were allowed to be built.

Instead of draining our Strategic Petroleum Reserve of 1 million barrels per day of emergency supplies, as the Biden administration has been doing in an attempt to temporarily reduce gas prices, a pipeline would be a strategic investment with one of our closest allies and would benefit both sides of the border. It would also ensure decades of additional safe and secure energy supplies equal to 5% of our current oil use.

Signals From the Government
Often those who oppose the use of oil and gas—and who also recognize that the more of both we produce in North America, the lower their prices will be—will argue that each individual project won’t make a difference or that they will be too long in coming. That’s simply nonsense and is proven wrong by historical facts and the evidence.

In July 2008, prior to the horizontal drilling/hydraulic fracturing revolution that more than doubled U.S. oil production and gave us energy self-sufficiency in 2019, oil was approaching $150 per barrel under President George W. Bush. On July 14, 2008, Bush announced the repeal of a decades-old moratorium on drilling on most of the Outer Continental Shelf first put in place by his father.

Even though any oil leased, discovered, and produced wouldn’t come to market until 10 years in the future, owing to rigorous federal laws and regulations, the price of oil dropped $9.36 immediately upon his announcement, to $136 per barrel.

By the way, none of those areas that were opened for leasing have been leased to date and are still on hold pending actions by the federal government to lease them.

Oil and natural gas are purchased in markets that look to signals from the government about which way the pendulum is swinging in its attitude about future supplies. If the government wants more oil production and takes steps to make it happen domestically, prices will fall. If, on the other hand, the government seeks to regulate, legislate, and increase costs on the domestic production of energy, prices will rise.


The federal government plays a huge hand in the price families and businesses pay for their energy, including what they pay at the pump.

When it comes to energy, more energy means lower prices. Imagine if the federal government embraced increased energy production on the massive federal estate and a larger pipeline system that could more quickly, efficiently, and economically transport it to refineries and its final destinations in an environmentally friendly way. The benefits in terms of lower prices would be massive.


Energy crisis pushes German industry to the brink

German businesses are growing concerned that without an energy price cap, a wave of insolvencies could wash over the country in coming weeks and disrupt the supply chains serving Germany’s largest industrial sectors.

Starved of the abundant Russian energy that long fired the nation’s industrial engine, German businesses have already been curtailing production and halting investments. Business and consumer confidence is tumbling, approaching the lows reached during the 2008 global financial crisis. Germany’s government is now drawing up plans to cap the price of electricity and gas, officials said this week, acting in case a similar proposal by the European Union isn’t enacted swiftly.

Long Europe’s growth engine and its manufacturing nerve center, Germany’s economy has become one of the most vulnerable on the continent. It is likely to grow by just 1.2% this year and shrink by 0.7% next year, by far the worst performance among major industrial economies, according to a forecast published this week by the Organization for Economic Cooperation and Development, a Paris-based think tank. Economists at Deutsche Bank expect a 3.5% contraction next year, driven by shrinking private consumption, investment and net exports.

Four heavyweight German think tanks slashed their growth forecasts for the German economy on Thursday, blaming the energy crisis. They now expect an economic contraction of 0.4% next year, after forecasting growth of 3.1% last spring, according to a twice-yearly report prepared for the federal government. While gas shortages should ease somewhat over time, prices are likely to remain well above the precrisis level, the report warned. “This means a permanent loss of prosperity for Germany.”

More than half of German small and midsize companies now worry that the energy crisis could put them out of business, up from 42% last month, according to a survey published Thursday by the Federal Association of Medium-Sized Businesses, a trade group. “The situation is growing more threatening from day to day,” said the group’s chairman, Markus Jerger.

After initially resisting the decision, Germany’s government is now drawing up plans to cap the price of electricity and gas, officials said this week. Business lobbies have warned that an insolvency wave could be just weeks away and that it could start a chain reaction of business failures. Volkswagen AG, Germany’s flagship car maker, said last week it was concerned about its supply chain because of possible gas shortages this winter.

“I’m very worried... Affordable energy is the foundation of the entire German industry,” says Max Jankowsky, chief executive of GL Giesserei Loessnitz GmbH, a 173-year-old foundry in the east German state of Saxony.

The company sits at the heart of Germany’s large auto industry, which employs around 800,000 people and exports about three-quarters of what it produces. Its clients include BMW AG, Daimler AG and Volkswagen.

Mr. Jankowsky used to pay 100 euros, equivalent to $96, each time he switched on his gas-powered industrial furnace which melts metal to produce the machines that mold car bodies. Today, it costs Mr. Jankowsky about €3,000 each time, a 30-fold increase. To save money, he now turns on the furnace twice a week instead of three times.

Mr. Jankowsky expects his annual electricity bill to increase by €2 million next year, an enormous burden for a family-run firm with €20 million in annual sales. After his previous contract ran out, he started buying gas on the spot market, paying vastly higher prices.

“Next year will be decisive. Supply chains could be reoriented toward countries with cheaper energy,” Mr. Jankowsky says. His customers are currently accepting large price increases, but he expects demand to decline next year.

Even so, he is skeptical of the German government’s plans to subsidize energy use, which he worries will keep prices high while burdening future generations.

“The economy needs to work without subsidies, we always complained about those in China,” he says. He wants the government to produce a road map for guaranteeing supplies of affordable energy. “I don’t see a concept in the federal government,” he says.

One in 10 German auto companies have reduced production as a result of high energy costs, and another third are considering doing so, according to a survey this month by the German Association of the Automotive Industry, a trade group. More than half of companies have canceled or postponed planned investments and nearly a quarter want to shift investments overseas, the trade group says.

Output in Germany’s manufacturing industry is likely to decline by 2.5% this year and by roughly 5% next year, according to Deutsche Bank analysts. Exports, a cornerstone of the country’s recent prosperity, are languishing below prepandemic levels after adjusting for inflation.

With energy prices likely to remain structurally high, only some of the German production facilities priced out of the market are likely to come back on stream, the analysts said. That is likely to reduce the country’s long-term growth potential, which is already under pressure from an aging workforce.

“The current energy-cost and thus inflation crisis is not only a cyclical phenomenon but has a major structural component as well, requiring significant government intervention to prevent serious medium- and long-term damage to Germany’s economic prospects,” says Timo Klein, an economist at S&P Global Market Intelligence.

In addition to sparking an energy crisis, Russia’s war in Ukraine has shaken confidence in a German export model that has prospered by forging deep links with autocratic regimes with fast-growing economies, especially China.

Government officials are now concerned that Germany’s economic dependence on China—it is the country’s largest trade partner and the biggest single market for many German companies—would translate into an even bigger shock for the German economy should Beijing close ranks with Moscow against the West.

“If I see the disruption of the global economy caused by the war of two economic dwarfs, Russia and Ukraine, I am afraid what a [tussle] between China and Taiwan and the U.S…. would cause to the global economy,” says Oliver Betz, managing director of systec Automotive GmbH, an auto supplier based near Munich.

Mr. Betz has roughly 160 staff in China and makes about half of his annual global sales there—about 250 million yuan, equivalent to $35 million. He says he wouldn’t invest in another company in China due to heightened geopolitical risks. Instead he is trying to expand in new markets including India and the U.S. He thinks the transition will be difficult because the markets are very different.

“It will take a long time to substantially replace our Chinese business,” Mr. Betz says.

For now, German unemployment remains low, but that could change as high inflation erodes household spending, economists say. The nation’s unemployment rate edged up to 5.5% in August, largely due to an influx of Ukrainian refugees, according to the federal labor agency. German businesses are likely to furlough some two million staff over the coming months as the economy shrinks, according to Deutsche Bank.

Borrowing costs are rising as the European Central Bank aggressively raises interest rates to combat high inflation.

Even so, Germany’s inflation rate is likely to decline only slightly next year, to 7.6%, still more than double the expected rate in the U.S., according to the OECD.

Thilmann Brot GmbH, which operates 20 bakeries in western Germany, filed for insolvency in mid-September. The family business was unable to pass on increased energy and raw-material costs as customers switched to cheaper alternatives, according to Jens Lieser, the company’s provisional insolvency administrator.


British Labour’s Green Energy Plan Is To Double Down On More Unreliables

The key policy unveiled by Labour is to replace one unrealistic objective with another. Boris Johnson’s aim to have a carbon-free energy grid by 2035 has been brought forward to 2030 by Sir Keir Starmer.

This is to be achieved by quadrupling offshore wind farms, doubling the number on land, and tripling the production of solar power, all within six years, assuming an election in 2024 that Labour wins.

Sir Keir said this would deliver a new era of economic growth and permanently lower energy bills by turning the UK into a green “superpower”.

Countries like China and India have committed to net zero but not for decades – arguing their economies are at different stages from the West.

America has lowered its emissions [thanks to natural gas] and is working on many of the new ‘green’ technologies, but has a target of 2050.

For as long as the biggest emitters are still pumping out CO2, the UK’s contribution is minuscule.

Sir Keir said the aim was to make the UK self-sufficient in electricity by the end of the decade but this is simply not possible.

We will need to continue importing gas for electricity long after 2030 because renewables will not produce enough energy, not least on windless, cloudy days.

Moreover, the way the energy market is currently constructed, electricity from renewables is priced at the same high level as gas.

This needs to change.

Labour’s plan is essentially to make the country more dependent on imported gas, not less, certainly in the medium term.

Using our own resources, including shale, is a better approach.


Europeans increasingly burning trees for energy

European consumers and businesses are increasingly turning to biomass energy sources, including wood-derived fuels for heating and cooling, as the energy crisis continues to wreak havoc across the continent.

The shift to biomass energy, which already accounts for the majority of renewable energy generated in the European Union (EU), has come as the Ukraine crisis disrupts energy supplies and alternate forms of energy production fall short, according to Bioenergy Europe, a leading industry group based in Belgium.

The group said Europe's biomass energy is largely sourced domestically while fossil fuels and green energy technologies are mainly imported.

Amid the crisis, Europeans have been forced to take drastic measures to conserve energy and keep bills low while governments have imposed rationing rules and introduced relief programs.

"During this period of increasing uncertainty due to the war in Ukraine and the ongoing crisis which highlights the EU’s reliance on foreign fossil fuels, bioenergy stands as a clear counterpoint," Maija Lepistö, a spokesperson for Bioenergy Europe, told FOX Business. "Over 96% of the biomass used for bioenergy is being produced domestically within the EU and the rest coming from trusted streams."

Prior to the current crisis, biomass energy accounted for 57.4% of total renewable energy production and nearly 12% of total energy consumed in the EU. Forestry products — such as logging residues, wood-processing residues, fuel wood and wood pellets — are the bloc's main source of biomass for energy, according to the EU's Joint Research Center.

Lepistö said more consumers are turning to biomass energy thanks to it being a "local and affordable" alternative to traditional sources of energy.

"The current energy crisis in Europe has not placed the supply of biomass raw material at risk," she told FOX Business. "Unlike fossil fuels with their high import rates and other renewables supplying their technology from outside the EU, biomass has the benefit of being locally sourced, produced and dispatched as well as supply of the necessary equipment."

"Just as with other markets, the ongoing war is affecting the bioenergy sector," she added. "However, the EU’s internal market can continue supplying bioenergy to the end users, and more businesses and citizens are turning to this renewable, local and affordable solution, which has more potential to grow and (reinforce) the EU’s green goals."

In 2021, the EU consumed a whopping 23.1 million metric tons (MMT) of wood pellets, a year-over-year increase that can be attributed to increased German residential use and an uptick of co-firing of wood with coal in power plants in the Netherlands, according to a U.S. Department of Agriculture (USDA) report.

The report said demand in 2022 is projected to increase by another 1.2 MMT in 2022 due to even greater expansion in residential markets and increasing prices of fossil fuels.

Overall, the vast majority of biomass energy power generation in the EU is generated by the industrial sector at combined heat and power plants, Lepistö added. The remainder produces electricity and transportation fuels.




Thursday, September 29, 2022

Climate Hysteria: A Mass Delusion to Demonize Carbon Dioxide

Climate hysterics like to throw around the world “denier” to castigate those who don’t get with the green agenda. The term is deliberately intended to echo the phrase “Holocaust denier” to those anti-Semites who like to insist that the Holocaust never happened. While the comparison is obscene, it’s certainly true that the Holocaust, like the climate agenda, have something in common: They both reflect a blind fanaticism untethered to actual facts.

Climate hysterics demonize carbon dioxide (CO2) much as Hitler stereotyped Jews. They then demonize their critics as “Holocaust deniers” because the psychological link is to demonize critics of the anthropogenic theory as if they were Jew-haters. However, the term “climate deniers” outside the context of Holocaust denial makes no sense. No rational person would deny that this planet has an atmosphere, weather, and climate. But honestly, it is climate hysterics who hate their critics, seeing them as “evil,” greedy, hydrocarbon-burning capitalists willing to make Earth’s climate unbearably hot and dangerous for all living things.

The Holocaust was a past, documented event. In contrast, the contention that the world might end because we burn hydrocarbon fuels that emit CO2 is a theory based on debatable simulations of future climate possibilities. The hard reality is that radical leftists, like Hitler’s “National Socialist” Nazis, will kill tens of millions to assuage their fears. Using the “denier” language to tar those who do not take a knee to concede to this global warming, climate change irrational fear is a monumental, inexcusable insult to the memory of the six million Jews pointlessly murdered in the insane racial hysteria of the Shoah.

The demonization of CO2 depends on the asserted certainty that burning hydrocarbon fuels that emit CO2, a greenhouse gas that is a trace molecule, present in approximately 0.04 percent of the atmosphere, will generate existential climate change catastrophes. The decarbonization movement would be dead in the water except for the existential fear climate hysterics manufacture over supposed adverse anthropogenic CO2 consequences touted as making Earth uninhabitable for humans.

Ironically, Nazis and climate hysterics understand that the success of prejudicial stereotyping depends on the availability of a charismatic demagogue, a Hitler, capable of triggering irrational fear of the perceived evil subgroup. In other words, the psychology of prejudicial stereotyping depends upon the availability of an Al Gore or Greta Thunberg willing to create permanent fear over myriad existential climate disasters that may never happen.

As astrophysicist and geoscientist Willie Soon has pointed out repeatedly, climate hysterics are “true believers,” impervious to experiential refutation. On August 19, 2022, in a speech delivered to the Doctors for Disaster Preparedness at their annual convention, Dr. Soon showed extensive evidence that the United Nations’ predictions of catastrophic anthropogenic global warming have been wrong for the past 50 years.

U.N. predictions that catastrophic anthropogenic global warming will cause sea levels to rise, wiping nations off the face of the earth, are nothing but fearmongering. But, as Dr. Soon documented, when U.N. predictions fail to materialize, the U.N. merely extends the inevitable happening of the future climate change catastrophe to an anticipated date in the future.

Lowering the Holocaust to the level of a climate debate irreparably demeans what was the most heinous genocidal catastrophe ever perpetrated by human beings against fellow human beings. Having said that, there is a homicidal reality to the neo-Marxist Green New Deal mass delusion, something apparent in today as EU governments, deprived of Russian gas, scramble to forestall the real, existential threat of businesses shutting down and citizens freezing in a long, cold European winter.

In his classic 1954 treatise, The Nature of Prejudice, Harvard psychologist Gordon W. Allport described the psychology of prejudicial stereotyping behind Hitler’s genocidal mania demonizing Jews. That same theory explains why the green movement is intolerant today. The psychology of stereotyping creates generalizations; that is, “overcategorizations,” that become prejudices when ideological convictions “are not reversible when exposed to new knowledge.”

Allport defined ethnic prejudice as follows:

Ethnic prejudice is an antipathy based upon a faulty and inflexible generalization. It may be felt or expressed. It may be directed toward a group as a whole, or toward an individual because he is a member of that group.

Allport further noted that “intense prejudicial antipathies” are likely to result in “vigorously hostile action.” Allport elaborated “extermination” as the most extreme prejudicial form of violent actions in terms of the Holocaust.

Extermination. Lynchings, pogroms, massacres, and the Hitlerian program of genocide mark the ultimate degree of violent expression of prejudice.

Another very important book to emerge regarding the madness of the Nazi era was Eric Hoffer’s 1951 book, The True Believer. In it, he explained that blind adherence to doctrinal ideology is key to the fanaticism necessary to create a successful social or political movement. Thus, wrote Hoffer, active mass movements strive “to interpose a fact-proof screen between the faithful and the realities of the world.”

Hoffer further pointed out that the facts on which a true believer bases his conclusions “must not be derived from his [i.e., a true believer’s] experience or observation.” For true believers, Hoffer insisted, “the ultimate and absolute truth is already embodied in their doctrine, and there is no truth nor certitude outside it.” “To rely on the evidence of the senses and of reason is heresy and treason. It is startling to realize how much unbelief is necessary to make belief possible. What we know as blind faith is sustained by innumerable unbeliefs.”

Hoffer concluded his comments on the importance of ideology (which he calls doctrine) for true believers by commenting in that the fanatical communist refuses to believe any unfavorable report or evidence about Russia. This kind of militant refuses to see “with his own eyes the cruel misery inside the Soviet promised land.”

The same holds true for progressives who transform a supposedly scientific argument about CO2 emissions into their political fight against capitalism. The Green New Deal movement insists we must move entirely to solar energy and wind power because these are not hydrocarbon fuels. The Green New Deal assumes that eliminating the use of hydrocarbon fuels, the energy that fuels capitalism, by moving to the less powerful and less reliable solar energy and wind power is essential to a future committed to social justice.

In a similar vein, in 1965, Herbert Marcuse of the neo-Marxist Frankfurt School published an essay entitled “Repressive Tolerance.” In that essay, Marcuse argued for “liberating tolerance,” a redefinition of “tolerance” that requires the censoring of policies, attitudes, opinions, etc., that are designed to reinforce the dominant repressive and alienating nature of advanced industrial societies like the United States. More simply, Marcuse explained that “liberating tolerance” would mean “intolerance against movements from the Right, and toleration of movements from the Left.” Marcuse left no doubt that his argument for liberating tolerance was central to his goal of negating capitalism to destroy advanced industrial society.

There’s an irony to all this: On the one hand, it’s obscene for climate fanatics to tar their opponents as “deniers” in the same the term is used for people to deny the Holocaust. The first is a well-document historic event, while the second is a highly speculative theory based upon inadequate computer models made to predict future complex climate events. However, the common denominator is that both the Holocaust and the climate movement arise from the same form of rigid, fact-free fanaticism common to all true believers.


As war on gas pipelines escalates, Britain faces national security crisis

As Gazprom warned that the last remaining gas supply to western Europe is at risk of shutdown and gas pipelines are being blown up, Net Zero Watch has written to Liz Truss and Sir Kir Starmer, calling on both leaders to declare an energy emergency, on national security grounds.

In a letter to the Prime Minister and the Leader of the Opposition, Net Zero Watch director Dr Benny Peiser has warned that the sabotage of three Nord Stream gas pipelines in the last 24 hours has brutally revealed how Britain’s energy system and its entire economic and societal stability is exposed to grave external threats.

Dr Peiser writes:

"There is now a serious and growing risk to Britain’s national security due to the extreme vulnerability of the gas pipeline from Norway which provides a third of UK gas supplies.

It is vital that you understand that a similar attack on the Norwegian gas pipeline would, on its own, completely cripple the UK economy. This extreme vulnerability must be fixed as a matter of national priority, and must take precedence over all other considerations.

From a national security perspective, the urgent need is for immediate policy changes that significantly and swiftly increase reliable domestic sources of energy, which means gas and coal, without which the grid and the economy cannot function. I set out below key steps that must be taken.

It is also vital that you understand that no responsible government and opposition can accept this national security risk without taking swift and effect action.”

Emergency agenda

Unconventional gas

All obstacles to the development of unconventional fossil fuel resources in the UK must be removed.

In particular:

* Replace the current traffic light system, based on seismicity, with BS5228-2, the ground-acceleration standard applied to other industries.

* Fossil fuel extraction to be categorised as Nationally Significant Infrastructure under the terms of the Planning Act. This should include projects in Scotland.

* Planning applications for shale wells must cover drilling pads rather than individual wells.

* Get coalbed methane and coal seam gasification projects going again, overruling Holyrood if necessary


* Suspend the Climate Change Act

* Suspend pollution controls on thermal power, thus allowing dual-fuel use of gas-fired plant and the development of ultrasupercritical coal-fired power stations.

* Several coal and nuclear stations to close in next few years. Critical risk that these are not maintained in the meantime. Give them long-term agreements to ensure they remain on the grid and are maintained.


Dr Benny Peiser
Director, Net Zero Watch
m: 07553 361717


Liz Truss will fail without a credible energy plan

Net Zero Watch has said that negative market reactions to the Government’s mini-budget show that domestic and international investors are highly sceptical about what appears to be half-baked policy proposals.

Investors can see that hardly anything is being done to address the underlying reasons for Britain’s economic and energy cost crisis.

Tax cuts in conjunction with astronomical and indeterminate handouts to energy suppliers announced by the Chancellor Kwasi Kwarteng last week have alarmed financiers because they shift the energy cost burden onto the UK’s debt mountain and future generations. As a result, the pound has crashed against the dollar and market reactions have been highly critical.

Net Zero Watch director, Dr Benny Peiser has warned that the country faces years of inflation and in all likelihood a major economic depression unless the government announces radical energy policy reforms:

"The economy looks likely to tank and suffer for years to come because the Government refuses to abandon its suicidal Net Zero targets which are effectively preventing solutions to the catastrophic energy crisis."

Net Zero Watch recently published a plan to rapidly reduce the energy cost burden and put the economy back on a stable footing, but Dr Peiser has warned that time for action is running short.

"Unless the Government introduces a credible plan to bring down the cost of energy significantly and in the short term there is simply no chance for any economic growth plans. Liz Truss and her ministers have to chose between saving the economy and saving Net Zero. There simply isn’t a third way.'

Gordon Hughes and Andrew Montford: Fixing the energy price crisis (pdf)


Dr Benny Peiser
Director, Net Zero Watch
m: 07553 361717


Australia: A major overhaul of Queensland’s energy sector will involve construction of the ‘world’s biggest’ pumped hydro project

This is nonsense. For pumped hydro you need TWO dams, at astronomical cost. Where is the money going to come from? Will it reduce the funding for hospitals, police and pensioners? Realistic cost estimates and realistic statements about how other spending will be affected are needed. There is no sign of either.

When there are so many other needs for funding (ambulancees, housing etc.) already crying out, this proposal is verging on criminal. And for what? To replace s perfectly good electricity supply that we have already. It will buy a few votes from Greenies, that is all

A major overhaul of Queensland’s energy sector will cost $62bn over 13 years and involve construction of the “world’s biggest” pumped hydroelectric power plant project, ending the “reliance” on coal in the state’s publicly owned power plants by 2035.

The goals of the Queensland Energy Plan include hitting a new, higher renewable energy target of 70 per cent by 2032, though the state’s emissions reductions target of 30 per cent below 2005 baseline levels will not change.

The targets will be legislated.

Queensland Premier Annastacia Palaszczuk released the state’s long-awaited 10-year Queensland Energy Plan at her annual state of the state address on Wednesday afternoon, saying the “race was now on” to secure “clean energy supply chains”.

“We must invest now, not just for our climate,” she said. “We must address this issue at the same time we focus on new job opportunities to bring everyone along with the clean energy industrial revolution at our doorstep.”

Ms Palaszczuk confirmed Queensland’s plan was to get 70 per cent of its energy needs from renewable sources by 2032, and 80 per cent by 2035.

Natural renewable resources are energy sources with an endless supply so they can be continuously replenished. Some examples of renewable resources include the wind, sun, geothermal heat and water.

Part of the plan will include building two new pumped hydroelectric plants — one west of Mackay and the other at Borumba Dam by 2035.

There will be a new “SuperGrid” built to connect solar, wind, battery and hydrogen generators across the state.

“The super grid brings together all of the elements in the electricity system with the poles and wires that provide Queenslanders with clean, reliable and affordable power for generations,” Ms Palaszczuk said.

“That super grid delivers around 1500 kilometres of transmission lines from Brisbane up to North Queensland and out west to Hughenden.”

Publicly owned coal fired power plants, which make up the majority of the state’s coal fired assets, would be “converted” to clean energy hubs from 2027. And their “reliance” on coal would be stopped by 2035.

Ms Palaszczuk said this would be “done in a measured way”. “We won’t convert coal power stations until there is replacement firmed generation,” she said. “We will keep our coal fired power stations as back up capacity until replacement pumped hydro energy storage is operational. “We will be able to turn the stations back on if something goes wrong.”

The state will also build a “hydrogen gas ready turbine”.

The energy plan will cost an estimated $62bn between now and 2035, with the funds to be spread across state and federal governments and the private sector.

“By 2035 Queensland … will have no regular reliance on coal and be at 80 per cent renewable energy,” Ms Palaszczuk said. “That’s because we will have more pumped hydro energy storage than the rest of Australia combined. “Today is about being bold with an energy and jobs plan that has tangible aims and palpable outcomes.”

The latest data shows Queensland’s energy mix in 2021/22 was 21.4 per cent renewable, up from 19.6 per cent between August 2020 and July 2021.

The state government has been ramping up its energy-related announcements in the last week, with Ms Palaszczuk travelling out to South Burnett on Monday to reveal a $780m commitment to building Australia’s largest publicly owned wind farm. The Tarong West Wind Farm in the South Burnett would create enough electricity to power up to 230,000 homes.

At a press conference this morning, Energy Minister Mick de Brenni said it would power “the size of the Gold Coast”, and would be the “equivalent of taking 230,000 cars off the road”.

He said existing cattle farmers located near the wind farm would be able to operate as usual.

The project will include up to 150 turbines and generate 500MW, with 200 jobs created during the construction phase and 15 ongoing roles when the farm up and running.

Earlier, the Greens said Queensland risked being “laughed out of the room” over its climate policies, with the party urging the Palaszczuk government to accelerate the closure of coal-fired stations and adopt a transition plan for the workforce.

Greens MP Michael Berkman said Queensland risked breaching its Paris Agreement unless it includes the closure of the state’s power stations by 2030.




European electricity grid hurtling towards disaster, Swiss commodities expert warns

A new paper from the Global Warming Policy Foundation shows that the European electricity grid is hurtling towards disaster, with its constituent nations closing reliable nuclear and fossil-fuelled power stations and hoping that interconnectors will make up the deficit.

According to the paper’s author, Alexander Stahel, a Swiss-based commodities expert, the European grid has relied on French and German power surpluses for many years. However, with nuclear power in both countries being wound down and likely to soon become net power importers, and with fierce international competition for scarce gas supplies, the whole continent is now left hoping for Scandinavian hydro power and occasional surpluses of UK wind to save them.

According to Stahel, the numbers just don’t add up, and he warns that restrictions on fossil fuel investment are making things dramatically worse.

“Fossil fuels are currently vital for keeping the lights on, but we are undermining the industry’s viability. It needs US$300 billion of re-investment every year, for oil and gas alone, just to maintain current production levels.

"However, convinced by policymakers that investments in production will become ‘stranded’, it is not even investing half this amount.”

Stahel says that Europe must simply accept that its decarbonisation targets are not achievable.

Alexander Stahel: “The Crisis of the European Energy System” (pdf)


Adverse Energy Taxes in the Inflation Reduction Act

The process of political meddling in energy markets is endless, an eternal truth that will not prove different for the energy provisions of the Inflation Reduction Act. Most public attention has been directed at the massive subsidies and favoritism directed at unconventional electricity — wind and solar power in particular — and electric vehicles, rather than the tax provisions, less prominent but deeply problematic.

Both sets of policies expand the effort to increase the use of uncompetitive energy expensive, unreliable, and environmentally destructive in place of conventional energyproven, reliable, efficient, and with environmental effects that have been addressed effectively by decades of regulation authorized by past legislation. Such a forced turn toward uncompetitive energy will continue to engender huge adverse effects with few benefits, a reality that policymakers in Europe, California, and elsewhere now have been forced to confront.

The tax provisions of the IRA have received less attention, but are likely to prove equally perverse. First, there is a reinstatement of the Hazardous Substance Superfund Financing tax (section 13601) on crude oil and petroleum products, the previous imposition of which ended in 1995. Put aside the fact that it is not the fossil energy producers or their customers who are responsible for pollution and cleanup problems at the Superfund sites; nor are they to blame for the massive mismanagement of the program over four decades. This tax — 16.4 cents per barrel — will cost energy producers about $1.2 billion per year, an outcome not consistent with the need to expand the availability of reliable energy.

Second, the IRA imposes two new taxes on methane emissions from crude oil and natural gas production. Section 60113 imposes per-metric ton fees ($900 in 2024, rising to $1500 in 2026) for methane emissions exceeding 0.2 percent of natural gas sold from a facility or 10 metric tons of methane per million barrels of oil produced. Section 50263 imposes the (new, higher) royalty rate for natural gas produced from future leases on federal land or the outer continental shelf on all such gas, even that lost because of necessary venting or flaring, with a few exceptions.

Put aside the reality that fossil producers have powerful incentives to minimize losses of natural gas that otherwise could be sold. The central justification for the tax on methane emissions is “climate” policy. U.S. methane emissions are 11 percent of all U.S. greenhouse gas emissions (on a CO2 equivalent basis). Were all U.S. methane emissions — not merely those from oil and gas production — reduced to zero, the global temperature reduction by 2100, using the Environmental Protection Agency climate model, would be 0.015 degrees C, an effect that would not be measurable in that the standard deviation of the surface temperature record is 0.11 degrees C.

Accordingly, the taxes on methane emissions cannot satisfy any plausible benefit/cost test. They are little more than a money grab, with little economic or environmental justification. Moreover, they create perverse political incentives: More methane emissions yield more revenue for the federal government, and so provide a disincentive to reform permitting and other policies so as to facilitate the improvement and modernization of the energy infrastructure, and thus reduce emissions.

Finally, section 50262 increases the royalty rate for oil and gas leases on federal lands and the OCS from 12.5 percent to 16.67 percent, increases the oil and gas minimum acceptable bid from $2 per acre to $10 per acre, and increases fossil fuel rental rates for reinstated oil and gas leases to 20 percent rather than 16.67 percent.

Notwithstanding Beltway rhetoric about “ensur[ing a] fair return for the American taxpayer,” these cost increases will have the opposite effect, by reducing the amount that the fossil producers will be willing to bid initially for the leases. This means that the net effect of the increase in the royalty rate and the obvious attendant decline in the initial bids is a shift of risk from the fossil producers onto the taxpayers, because the initial bids are certain, while the future royalty payments will be determined by future fossil energy prices and other conditions that are subject to substantial uncertainty.

Moreover, the royalty payments are analogous to an excise tax on fossil energy production, while the initial bid is analogous to a lump-sum tax that does not affect production decisions once the bidder obtains a lease. Accordingly, the combination of the increase in the royalty rate and the decline in the initial bids will have the effect of reducing fossil production from the leases that actually are granted, an outcome inconsistent with the goals of a rational energy policy and with the interests of taxpayers.

There simply is no rationale for these tax provisions that can withstand scrutiny. They will reduce the production of conventional energy, which is reliable, concentrated per unit of weight, and complementary with efficient capital investment. They will increase energy costs and reduce economic growth and national wealth, even as they yield no benefits in terms of environmental improvement. Let us hope that a future Congress is led to repeal them.


Experts question environmental and economic value of wind power

“The biggest failure of wind energy, oddly enough, is environmental.”

Wind farms continue to pop up like mushrooms across Michigan’s landscape, and with them, plenty of backlash from energy, economic and environmental public policy experts.

Michigan ranks 15th for total wind generation nationwide, according to a 2021 study released by, which was updated last May. The study reports wind provides 8% of the total electricity consumed by the nation’s homes, government entities and businesses, while contributing 7% to Michigan’s electricity grid.

While proponents tout the environmental benefits of wind over other energy sources, it typically takes 18 months after its full installation before a turbine truly can be said to “have paid off its carbon debt,” according to Kevon Martis, a certified land use planner and zoning administrator for Lenawee County’s Deerfield Township.

Martis explained to The Center Square that the manufacturing and transportation of turbines to their destination typically requires overseas shipping to U.S. ports, followed by over-the-road transport requiring several diesel-fueled 18-wheel semi-trucks per turbine.

“The biggest failure of wind energy, oddly enough, is environmental,” Martis told The Center Square. “Not only do low-energy density devices like wind turbines have an outsized impact on the landscape due to the sheer mass of the machines and the quantity required, wind energy is a very expensive means of CO2 avoidance,” he said.

Martis referenced a study conducted by grid operator MISO “with respect to the Obama-era Clean Power Plan, which showed that wind energy reduces CO2 emissions at a cost of $237/ton while the Obama administration itself only valued the social cost of carbon at roughly $40/ton.”

He also referenced a paper released by the center-left Brookings Institute showing wind energy and solar are not the low-cost means of avoiding CO2.

“Replacing coal with natural gas and nuclear is far cheaper,” Martis said. “So it leaves a serious policy question: If you have $1 billion of ratepayer money to play with, do you want to avoid one unit of CO2 with wind or six or eight units by fuel switching from coal to natural gas or building nuclear power? In fact, the reason the U.S. leads the Western world in CO2 reduction in the electricity sector is precisely because of fuel switching rather than renewable energy development.”

A study released this week reveals that wind turbines pose their own set of reliability and economic problems.

“The High Cost of 100 Percent Carbon-Free Electricity by 2040” details issues related to the complete adoption of carbon-free, renewable energy provided by wind and solar technologies.

The Minnesota-based Center for the American Experiment study was authored by CAE’s Policy Fellow Isaac Orr, Policy Analyst Mitchell Rolling, and Economist John Phelan. Although the study is specifically focused on Minnesota, Orr told The Center Square its conclusions also apply to other states such as Michigan that have adopted carbon-free energy mandates. Michigan-based Consumers Energy, for example, is proposing to generate 63% of all the state’s electricity from renewable sources by 2040.

“Our report found that attempting to power the state of Minnesota using primarily wind, solar, and battery storage would cost a staggering $313 billion through 2050 and cause blackouts in two of the three years we investigated,” Orr said. “Prices would rise, reliability would fall; in essence, it would be the worst of both worlds. This proposal is gambling with the electric grid, which is an incredibly irresponsible thing to do.”

The CAE writers also conclude the state’s renewable mandates would result in the loss of 79,000 jobs and reduce Minnesota’s state gross domestic product by more than $13 billion annually.

“Renewable advocates often claim that wind and solar are the cheapest forms of energy, but our analysis found the true cost of meeting electricity demand with wind and solar was $272 per megawatt hour (MWh) and $472/MWh, respectively, when the cost of battery storage and overbuilding and curtailment costs were factored in,” Orr said. “This means wind turbines and solar panels are much more expensive than the power plants they replace.”

The additional costs of transmission, property taxes, load balancing and other embedded costs would drive wind-generated energy above $270 per MWh, according to the report.

“One of the key failures of the push to so-called green energy is a refusal to accurately account for any associated negatives of using wind or solar,” Mackinac Center for Public Policy Environmental Policy Director Jason Hayes told The Center Square. “While renewable energy advocates strive to track even the most minuscule costs associated with fossil fuels or nuclear energy, they appear to happily ignore many of their benefits, such as being a reliable and affordable source of electricity and transportation fuels.”

Hayes said renewable advocates focus on “claims of reduced emissions from wind and solar, while ignoring or downplaying the growing string of human rights and supply chain issues associated with transition minerals, or how they are eating up ever more acres of land,” he said. “Having a full accounting for the emissions associated with wind and solar is every bit as important as accounting for the emissions from fossil fuels. That full accounting would likely change more than a few minds on the actual value of renewables.”


Tyrannical pseudo-science

As if we haven’t had enough of politicians in our faces in the Peoples Republic of Victoria in the last two and a half years, we now have Dr Monique Ryan in the Federal Parliament courtesy of the Woke and bespoke voters of Kooyong. Dr Ryan is a neurologist and says she is a woman of science; therefore (presumably) she cannot be questioned on her views on Climate Change, after all, she is a scientist and the science is settled

I live outside Melbourne on the edge of the western plains in a tiny town called Toolern Vale, where there are more horses and rabbits than humans. We are 70km from Ballarat and the westerly wind in winter blowing from Ballarat is infinitely colder than any mother-in-law’s kiss. We are very much aware of, and exposed to, climate change, but out here we call it the weather.

I have had a gutful of being hammered with the new climate religion which appears to have little basis in science. Its adherents are a group of virtue-signalling, privileged elites who, in their delirium and zealotry, use selective climate data and extreme language to spread the word via propaganda and are brainwashing our young, infecting our Parliament, and slowly destroying our prosperity.

At present I am paying at least four times the amount I should for electricity despite having a bank of solar panels. In the near future, I can look forward to a completely random electricity supply which will interrupt my ability to earn an income and put me in third-world living conditions. My taxes are propping up the renewables market thereby deliberately sabotaging the supply of essential fossil fuels.

Chris Bowen is hell-bent on forcing me to sell my V8 ute, replacing it with a not-fit-for-purpose EV and, to top it off, wind turbine transmission lines are coming through my neighbour’s property. I hear our Prime Minister thinks the changing climate is a threat to the ‘survival of our way of life’; well Prime Minister, it is not the weather that threatens my way of life, it is your bizarre, delusional, religion-based reaction to it.

News from the UK and Europe informs us that their citizens are soon to enter the winter from hell – not because of the weather per se, but because of a shortage of baseload power and the available power they do have is astronomically expensive. Many people will be unable to afford both food and heating and people will die. Already governments are telling their citizens how they can use the available power.

Is Dr Ryan aware of this situation? If so, does she think the science differs in the southern hemisphere, or that we live in a parallel universe?

Not being a woman of science, I will put it in layman’s terms. Let’s say you walk into a pub and sit down at the bar; the bloke next to you orders a drink, he takes a swig of it and falls to the floor – dead. Would you turn to the barmaid and say I’ll have what he’s having, but make it a double? That is what Dr Ryan wants you to do; despite having already seen the first season of the blockbuster series European Dream – No Electricity, No Industry, No Future, she appears to want us to follow the UK and Europe over the edge of a cliff.

Make no mistake, this is not about saving anything – this is about an entire class of privileged zealots in wealthy seats forcing their religious beliefs onto us. If you question them and ask for a reliable energy source, you’ll be cast out and called a heretic. If you object to following UK/Europe into third-world chaos and misery you’ll be told the science is settled.

In the spirit of science Dr Ryan, I propose an experiment.

The electorate of Kooyong goes off the grid. Wind turbine transmission lines will be run along the Yarra River in Kew and Hawthorn. Solar farms will be built in the parks and golf courses of Balwyn, Canterbury, Deepdene, Hawthorn, Mont Albert, Camberwell, Glen Iris, Kew, and Surrey Hills. The electorate is to function solely on wind and solar-generated power. Limited battery storage will be permitted – baseline domestic batteries, the type the government would install in public housing. In my electorate of Hawk – I volunteer to go off the grid, no renewables, no batteries and I will have a small modular reactor installed in my back paddock.

It’s about time Dr Ryan and the rest of these self-righteous, puffed-up toffs made a real sacrifice on the altar of Climate Change. Money means nothing to the virtue-signalling green electorates, so they should feel some Climate Change piousness by turning their green spaces into wastelands of solar panels and transmission lines; they should live with the result of relying on 100 percent renewables.

Dr Ryan, charity starts at home, lead by example; get out of my face and out of my environment.




Tuesday, September 27, 2022

The revenge of the material economy

America’s narrow escape last week from a major rail-worker strike brought home an important truth: people who make and ship real things – let’s call them material workers – now hold the whip hand over our supposedly ‘post-industrial’ economy. Firms trading non-tangibles – currency, bits and bots – may still hoard the most cash. But when it comes to eating, staying warm and, for many, making a living, the material economy is what matters most.

Yet the material economy has been hugely constrained in recent years – and deliberately so. This has become all too apparent since the war in Ukraine. Back in the pandemic era, thanks to the recurring lockdowns, the biggest winners were the tech giants and their supporters in Wall Street. Now Silicon Valley, suffering from the worst IPO market in 20 years, resembles something akin to a psychiatric ward, while Goldman Sachs is contemplating mass layoffs. Today, many green-energy projects and ESG funds (that is, funds rated as environmentally sustainable) are languishing, despite benefitting from massive government subsidies and relentless public-relations campaigns in recent years. Meanwhile, oil companies, once demonised by climate-obsessed politicians and activists, are now enjoying bumper profits, as are some commodity firms.

The conflict between the material economy and the economy based in ephemera – such as the creative industries, tech and financial services – is likely to define the coming political conflicts both within countries and between them. The laptop elites, led by Silicon Valley, the City of London and Wall Street, generally favour constraining producers of fuel, food and manufactured goods. In contrast, the masses, who produce and transport those goods, are now starting to realise that they still have the power to demand better futures for themselves and their families. Like railway workers, they can threaten to shut things down and win much higher pay.

The prospect of union organisation is spreading even to companies like Amazon and Starbucks. But there could be a backlash to this from employers. If wages rise too quickly, we could end up with a lot of union members without jobs, as the economy weakens and automation, spurred by rising labour costs, kicks in. Already, as California plans to force huge raises for fast-food workers, some fast-food giants are now backing ventures that aim to replace workers with robots.

The biggest threat to the material economy is likely to be the green agenda. Even before Russia’s invasion of Ukraine and the global energy crisis, problems with often unreliable and expensive renewable energy were accelerating the deindustrialisation of the UK and much of the EU – including Germany, which had long been an industrial powerhouse. Energy rationing could be on the horizon in Europe this winter. Globally, energy-price inflation threatens to drive far more bankruptcies than the 2008 financial crisis. And food inflation, which in some countries has been driven by green agricultural policies, has led the percentage of people worldwide experiencing food insecurity to double since 2019.

Good material jobs cannot easily co-exist with Net Zero policies, which are aimed at wiping out fossil fuels in the near term. Trillions of dollars have been spent on global power generated by green energy over the past 20 years, but the percentage of fossil fuels has barely declined. The bulk of greenhouse-gas reductions in recent years has come from switching from coal to natural gas. Yet the negative consequences of trying to eliminate fossil fuels and nuclear power have been profound, both for companies and consumers. Thanks to Germany’s much vaunted ‘energy transition’, German consumers had to endure the highest electricity prices in the world, even before Russia’s invasion of Ukraine. In uber-green California, residents pay up to 80 per cent above the US national average for electricity.

The elites’ turn against the material economy has been going on for at least half a century. It surfaced prominently in the 1972 book, The Limits to Growth, which argued that natural resources were diminishing rapidly and so the world needed to transition to a less materially based economy with slower growth. This mentality has persisted and even grown, even though many green assertions dating back to that period – including warnings of mass starvation in much of the world – turned out to be exaggerated or plain wrong.

The green script has changed slightly over the years in response. It used to warn that scarcity was on its way unless we made radical changes, whereas now it calls for us to create scarcity deliberately. Today, no one talks about ‘peak oil’. Instead, you hear calls to keep fossil fuels in the ground, where they cannot be used.

Another difference between the 1970s and now is that the impetus for Net Zero policies comes not only from green activists and politicians, but also from the financial regime imposed by ‘woke’ capitalists, who have gone to great efforts to deprive fossil fuels of investment.

There are, of course, winners from these new fixations, including makers of electric vehicles (EVs), whose growth will further tax already stressed electric grids in many countries. These policies have made Tesla CEO Elon Musk, at least for now, the richest man in the world. But for the rest of humanity, high energy prices and related inflation are profoundly destabilising and will stoke class divisions. Potential losers include people working in energy, truck drivers, factory workers and logistics workers. A move to ban fracking in the US – which vice-president Kamala Harris has supported – would by itself cost several million jobs, according to a report by the US Chamber of Commerce.

The material-ephemeral divide is already reordering politics in the high-income world. The generally anti-fossil-fuel policies of US president Joe Biden have won the support of barely a third of Americans according to one recent survey, as he continues to use the weight of the entire federal bureaucracy to slow down fossil-fuel investment and development.

The division between the real-world workers and the laptop elite has sparked a resurgence of radical politics on both extremes. We see the rise of far-left politics in France, the United States and throughout Latin America. At the same time, many small-business owners and material workers have rallied to right-wing movements, such as the Sweden Democrats or Marine Le Pen’s National Rally in France. Italy could be next to shift to the far right. In the United States, Trumpism, particularly in its now ugly post-election phase, finds its base largely in states that rely on manufacturing, energy production and food production, like Texas, Oklahoma, Arizona, Indiana, Ohio and Iowa.

In Europe, where real incomes are falling almost everywhere, draconian green policies can no longer be pushed without opposition. When Emmanuel Macron’s government raised green taxes on diesel in 2018, only a few years after the Paris climate agreement was signed, we saw the rise of the gilets jaunes movement. This anti-green unrest is not confined to France. In June 2021, Swiss voters rejected a key referendum to curb CO2 emissions on car and air travel, with most of the support coming from the countryside.

Now, as the energy and economic crises deepen, unrest is spreading throughout Europe, including in usually stable countries like Norway and the Netherlands. A key battleground has been agriculture – the most basic of industries. Farming has become a major target for green zealots, aided by uber-rich environmentalists like Bill Gates. They seek to limit farmers’ use of chemical fertilisers and to force farmers to cull their herds. Dutch farmers are protesting their government’s restrictions on emissions and fertiliser use, which are threatening farms that have been in operation for generations. Recently, the Dutch farmers have been joined by their Spanish, Polish and Italian counterparts.

One can only imagine what might happen if the US or Australian governments – all now dominated by ultra-greens – were to start imposing similar restrictions on their own massive resource-driven economies. I would not like to be the federal agent telling a Montana cattle farmer or an outback sheep operation that their herds must be culled for the good of the planet, or telling a farmer in Iowa that he can’t use fertilisers to boost his output.


North Sea licences to be sped up in race for more oil and gas

Regulators are preparing to slash red tape in the North Sea in a bid to speed up the development of oil and gas wells, as part of Liz Truss’ dash for new energy supplies.

The North Sea Transition Authority (NSTA) is considering cutting the application period for its upcoming new licensing round to a minimum of 90 days, compared to typical rounds of roughly 120 days.

Companies hoping to drill for oil and gas in the North Sea must apply for a licence, with 100 new areas of sea set to be put up for bidding. Securing a licence does not necessarily mean a company can or will drill there.

The North Sea Transition Authority (NSTA) is also trying to identify areas that can be developed quickly as they have known reserves and are close to existing pipes and rigs, which it will try to licence ahead of others.

Insiders cite the “urgency” of getting new supplies online amid a renewed focus on energy supplies across Whitehall.

Russia’s war on Ukraine continues to cause turmoil across energy markets, underlining the importance of securing future fuel supplies.

Cuts to Russian gas flows to Europe have pushed up gas prices for months, forcing the Government to step in and subsidise energy bills for households and businesses at an estimated cost of £60bn over the next six months.

New oil and gas discoveries generally take five or more years to get into production, though that is coming down. Speeding up the licensing process may make a limited difference on its own, but comes on top of other plans in Whitehall to cut bureaucracy. It also aims to send a signal to investors about the Government’s commitment to the basin.

Jacob Rees-Mogg, the Business Secretary, on Wednesday confirmed the UK's first North Sea licensing round since 2020 as he lifted the ban on fracking for gas.

One hundred new licences are set to be issued, thought to include prospects west of Shetland and northern North Sea. Whether they will all get taken up and developed is not clear.

Investment in the basin has fallen considerably over recent years, from about £16bn in 2014 to an expected £4bn this year. Supermajor oil companies have turned to newer prospects elsewhere in the world, while investors have also shifted away from the sector in favour of greener energy.

“Some people think the round will be oversubscribed; some think it will be undersubscribed,” said an industry source. “There may be a lot of companies taking protection acreage – just because you take a licence doesn’t mean you are committing to developing anything. I’m not sure it’s going to be very indicative of anything.”

On Friday, the Treasury named five North Sea fields in development among around 140 infrastructure projects it expects to benefit from cuts to red tape, as part of its new plan for growth. They include the controversial Cambo oil field west of Shetland.

Chancellor Kwasi Kwarteng said on Friday: “The time it takes to get consent for nationally significant projects is getting slower, not quicker, while our international competitors forge ahead. We have to end this.

“We will streamline a whole host of assessments, appraisals, consultations, endless duplications, and regulations.”

Industry sources say they are encouraged by the Government’s recognition of the need for domestic oil and gas supplies, even as the UK moves towards a lower carbon economy in the push to net zero emissions.


Environmentalism Is a Fundamentalist Religion

Today's climate activists resemble nothing so much as a religious movement, with carbon the new devil's spawn. The green movement is increasingly wedded to a kind of carbon fundamentalism that is not only not realistic but will reduce living standards in the West and around the world. And as with other kinds of religious fundamentalism, the climate hysteria is often overwrought and obviously so; a decade ago, the same activists predicted a planetary disaster by 2020 if the U.S. and China did not reduce their emissions by 80 percent—which of course never happened.

This approach is a losing one that reduces the effectiveness of the green lobby. What's needed to combat climate change is a pragmatic approach based on adapting to real and verifiable dangers. And this starts with environmentalists acknowledging the limits of our ability to curb emissions in the short run.

This is not to cede the fight. The reality is what we do in the West means increasingly little. Today's biggest emitters comes from China, which already emits more GHG than the U.S. and the EU combined, while the fast growth in emissions comes increasingly from developing countries like India, now the world's third largest emitter. These countries have developed a habit of blaming climate change on the West, then openly seeking to exempt themselves from net zero and other green goals. And the West's penchant for hyper-focusing on our own state or national emissions misses the reality of where the future problems are actually concentrated.

We aren't just missing the forest for the trees, though. Under the green lobby's current policies, our "war" against climate change is doomed to make things worse for most people, creating what economist Isabel Schnabel calls "greenflation." Higher prices for energy and food, worsened further by the war in Ukraine, are already are forcing countries to adopt massive subsidies for food and gas. In the developing world, billions now face immiseration, malnutrition or starvation. And green targets of zero emissions only make this situation worse.

Residents of rich countries will also suffer from the rapid adoption of current green policies that are focused almost entirely on wind and solar. Germany, for example, suffered the highest electricity prices in the world before Russia's war in Ukraine. In California, residents pay up to 80 percent above the national average for power. Reliance on wind power has made even Texas' grid vulnerable.

The real winners from green policies are not the birds and the bees but tech oligarchs, the uncompetitive U.S. auto industry, and Wall Street.

Given our limited ability to meaningfully reduce emissions, more attention should be placed on adapting, something we're actually good at. Since the beginning of the modern era, technology and science have been employed successfully to changes in temperature and precipitation. In the 1700s, people dealt with a colder climate by planting potatoes, which thrive in cooler weather. They also learned to use waterpower, wind and most critically fossil fuels, which made life bearable in the icy cities of the north and, later, with air conditioning, in the brutally hot south.

The Netherlands, where catastrophic flooding in the sixteenth century prompted an extensive expansion of coastal berms to prevent future floods, represents a classic example of successful adaptation. The Dutch even profitted from rising sea levels by opening new farmlands and expanding their exports to the global economy. Climate change was thus turned into a net plus.

Constructing proper adaptive polices may not be as emotionally satisfying as screaming about "climate criminals," but it could prove far less damaging to the masses of people and to the future of democracies. A regime run by the climatistas is likely to be very authoritarian, with many seeing in the COVID-19 lockdowns a "test run" for top-down edicts over how people live. In a sign of things to come, Switzerland is considering jail terms for those who try to stay too warm this winter.

For us to make progress on climate, the environmental movement needs to give up "utopian fantasies," writes Ted Nordhaus, a longtime California environmentalist, and "make its peace with modernity and technology." Instead of placing all bets on fundamentally intermittent, unreliable and economically problematic solar and wind energy, we should focus more on other options, from nuclear power to hydroelectric generation to continuing to replace coal with abundant, cleaner natural gas.

A smart adaptive policy would start with a serious assessment of costs and risks. If our worry is rising ocean level, we may look into duplicating the sea-wall like that has protected the Texas Port of Galveston for the past century. A gradual shift to more energy efficient vehicles—not just electric cars—would allow for competition from other new technologies like hydrogen, recycled gas, and hybrids. Investment in a more decentralized power system, desalination plants, and better storage of water also could help alleviate damage often traced to climate change.

Nothing short of the stability of the global political economy is at stake.

Where climate hysteria promises only gloom, class conflict and ever-increasing repression, an adaptation scenario allows humans to adjust to a warming world, even as we work to bring down emissions. Adaptation gives us a way of addressing climate change while retaining prosperity, creating opportunities, and showing that, rather than wage a scorched earth policy to save Gaia, we can learn instead to work within its limits.


Australia: fishing being hijacked by Green extremist thinking

The fishing industry in Queensland has been hijacked by greenies and it’s sending professional anglers out of business.

The latest Palaszczuk Government decision has been masqueraded as some sort of “save the fish’’ campaign, suggesting unless fishing bans on Spanish mackerel stocks were made they wouldn’t survive.

Rubbish. Spanish mackerel stocks have been replenished spectacularly in recent years.

It’s a stitch up by a fisheries department that has been infiltrated by conservationists who’d rather eat salad than fish.

This move by Fisheries Minister Mark Furner is just another example of a government caving into the Green movement, which it is tied to at the hip.

Charter boat operator and Cairns Professional Game Fishing Association spokesman Dan McCarthy is furious but not surprised. “Minister Furner and the QLD Labor government seem to always back green extremist ideology over hardworking Queenslanders,’’ he said. “More small businesses are now looking at their life’s work and their futures being trashed to please urban greenies.

Mr Furner’s anti-fishing program has reduced recreational catch to close to zero at one fish per person or two per boat.

Mr McCarthy says it’s the dodgiest science he’s seen. “These include warnings from scientific experts who specialise in Spanish mackerel and fisheries management who have been very critical of the process,’’ he said.

“They’ve used a baseline biomass from 1911. You can’t make this stuff up.’




Monday, September 26, 2022

The trouble with ‘bourgeois’ environmentalism

"The left needs to shake off its ‘bourgeois environmentalism’. It needs to distance itself from the ‘bourgeois environmental lobby’ and make the case for fracking and the building of new nuclear power stations".

Who do you think said this? Some contrarian commentator? A right-winger irritated by eco-loons? Nope, it was Gary Smith, the general secretary of the GMB trade union.

In an explosive intervention in left-wing discourse, Smith has accused Labour of a ‘lack of honesty’ and of ‘not facing reality’ on the energy question. We are living through a severe energy crisis and yet still Labour is sniffy about fracking and down on nuclear power, he says. All because it is in thrall to bourgeois greens who just don’t like industry and modernity very much.

Yes, climate change is a problem, he says, but we need energy. ‘We import a huge amount of fracked gas’ from America, he points out, so why don’t we just frack our own? We should get serious about developing nuclear power too, says Smith.

The GMB represents 460,000 working people, including the majority of workers at the UK’s nuclear-power stations. So it is logical – and good – that Smith would defend the nuclear industry. But his broader point is even more important.

‘(The) question’, he says, ‘is where is the electricity going to come from? We cannot do it by renewables and we cannot rely on energy imports.’ In short, we should get cracking – and fracking – on generating our own abundant sources of energy.

His killer comments concern the aloof, elitist tendencies of green activists. The renewables industry – ‘and many of those who espouse it in politics’ – have ‘no interest in jobs for working-class communities’, he says. He continues:

‘(We) should stop pretending that we’re in alliance with them. The big winners from renewables have been the wealthy and big corporate interests. Invariably the only jobs that are created when wind farms get put up, particularly onshore wind, have been jobs in public relations and jobs for lawyers.’

This is really important stuff. Smith has laid down a gauntlet to the modern left – are you on the side of working-class communities who benefit from well-paid jobs in the energy sector and from the domestic production of energy, or are you on the side of ‘bourgeois’ greens who are offended by any kind of human intervention in nature, whether that’s digging down for gas or unleashing the awesome power contained in uranium?

For far too long, Labour and left-wingers more broadly have been embracing the ideology of environmentalism. This has always struck me as utterly bizarre, because it seems pretty clear that green politics run entirely counter to the interests of working-class communities.

It is not a coincidence that environmentalism is the favoured political pursuit of the upper middle classes, posh influencers, privately educated columnists and even our new King (God save him). Because this anti-industrial worldview, this ideology that looks with such horror upon our mass consumer society, and the masses who partake in it, is the perfect vehicle for the expression of an older aristocratic disdain for modernity.

Environmentalism is a modern manifestation of the 19th-century Romantic reaction against the Industrial Revolution. Only back then it was more honest – it was all puffy-collared rich folk shocked that the serfs who once worked their lands were now headed into teeming new cities to work in factories. Today, the misanthropic scorn for modernity tends to be more deceitfully dressed up. It’s less ‘Who will toil my farmland now?!’ and more ‘What will happen to the air I breathe if millions of gammon are driving to Aldi every day?’.

Smith, who made these comments in an interview with the New Statesman, is dead right: ‘bourgeois’ is exactly the right word for modern environmentalism. It is alarming that the left has bought into all this middle-class green nonsense. I trust Spectator readers will forgive me for quoting Trotsky, but he did say that the task of left-wing revolutionaries was to bring about the increase of ‘the power of man over nature and the abolition of the power of man over man’. The modern left does the precise opposite of this. It seeks to shrink man’s power over nature and to boost man’s power over man, via new forms of authoritarianism and censorship. Please, right-wingers, I implore you: stop calling modern leftists ‘Trots’.

Gary Smith has done something incredibly important. He hasn’t only put pressure on Labour to think seriously about fracking and nuclear. He has also forced the left to ask itself why it has lost touch with working-class concerns and found itself so beholden to posh pursuits like ‘saving the planet’. A left that represents bourgeois interests is of no use to anyone. Except, of course, the bourgeoisie.


NY governor's insane green power scheme likely to raise New Yorkers’ power costs

The green-energy movement has been very good for Wall Street, and not so good for consumers. Energy prices remain stubbornly high because environmentalists control vast swaths of government on both the federal and state levels mandating inefficient windmills, solar panels and other costly boondoggles.

Meanwhile, the Wall Street cash register keeps ringing. Money managers sell high-cost funds investing in environmental causes to unsuspecting buyers, and banks tap into businesses that receive green subsidies.

The latest example of Wall Street’s green cash machine at work: Blackstone’s investment in so-called “clean hydropower” that will bring this allegedly spotless electricity to New York City residents. The project is being sold as a clean and cost-efficient way to put a cap on our skyrocketing energy cost

The reality might be much different.

Gov. Hochul and the state Public Service Commission recently approved a plan that was 10 years in the making. A decade ago, Blackstone, a private-equity firm with $881 billion under management, made a hydro-transmission outfit known as Transmission Developers Inc., or TDI, one of its portfolio companies, with a grandiose vision of making it a player in the state’s utility market.

Now that’s playing the long game, and it gives you an indication of how the people at Blackstone smartly bet that the left’s obsession with everything green would be a huge business opportunity someday.

That day is now. TDI will soon be laying 338 miles of transmission cable lines from hydro stations in Canada through the floor of the Hudson River, all the way to New York City — to provide power to some 1 million homes when the project is completed in 2026.

It’s pretty complex stuff that is made even more daunting given the costs involved. Just a few months ago, the project was slated to run no higher than $4.5 billion. It’s now at $6.1 billion because of the immense amount of infrastructure and manpower necessary to carve cables through hundreds of miles of land.

But it’s happening. Financing terms, as Fox Business was first to report last week, will be announced later this month or next. They include Blackstone cobbling together bank loans to cover $5 billion in costs. Blackstone is responsible for another $1 billion, comprising the only equity stake in the transaction.

That’s a lot of money for a private-equity firm that has traditionally prospered by taking private companies in tech or hospitality, fixing their operations, and then selling them at a profit. But Blackstone thinks it’s well worth it. People there privately estimate they will easily double their investment in a couple of years.

One big reason Blackstone is so giddy is New York’s embrace of everything green — virtually guaranteeing it a huge payday. Recall former Gov. Andrew Cuomo’s shuttering of the Indian Point nuclear plant and his plans to slash fossil fuels in the state to be replaced by green substitutes that Hochul has fully embraced.

That is leaving a huge hole in the state’s power grid. TDI and its transmission line — dubbed the Champlain Hudson Power Express, or CHPE — will become one of the only games in town as city dwellers face surging electricity costs amid shrinking supply.

Yes, a sweet return for doing God’s work on the environment, and I don’t begrudge Blackstone for cashing in. A spokeswoman said “this project . . . will deliver consistent, reliable, clean power to New Yorkers.”

My beef is with New York state officials who have failed to level with consumers over why they want to embrace a Rube Goldberg-like approach to energy when simpler solutions exist (i.e., clean and increasingly safe nuclear and, yes, natural gas, which is cleaner than coal).

First: There’s no guarantee that transmission lines running under the Hudson will work as envisioned and reach the near 100% efficiency of Indian Point. Also, the project might not be that environmentally sound. Hydro power sounds clean since it comes from water flowing through dams way up in Canada. Still, some green groups are raising a stink because the construction might endanger fish and cause pollution.

State officials are also not telling New York consumers that this whole effort might do little to stop the spiraling cost of energy, people with direct knowledge of the project tell me. Project supporters say while reducing CO2 emissions, CHPE will lower rates by $17.3 billion over 25 years. Sounds like a lot until you put it through a little logic: The “reduction” will be more than offset by massive increases in energy costs because of the inefficient green push, and Hochul won’t dare increase the supply of energy through more efficient nuclear power or she will face the wrath of the Democratic party base. Ditto for more natural-gas-created electricity.

Blackstone as a green savior also comes with a significant caveat: Hydro-Quebec, the Canadian utility supplying the power to TDI, is allowed to throttle some of its power supply during the winter months. Canadian winters are notoriously harsh and when power is needed closer to home, less energy might flow to New York City. (Hydro-Quebec says it can only throttle “capacity,” which it calls an “insurance product,” and will deliver power all year.)

As we all know, winters in New York are also no bargain. Thus this deal is no bargain — unless you’re Blackstone.


UK: Net zero rules watered down in scramble to boost North Sea drilling

Jacob Rees-Mogg has significantly watered down net zero restrictions on North Sea oil and gas projects as ministers push for a drilling spree to boost Britain’s energy security.

In a victory for fossil fuel companies, a “checkpoint” that new developments must pass to get approval will no longer feature tests requiring regulators to take account of the carbon emissions they could generate.

The quiet shelving of the proposal comes as the Government prepares to open a new licensing round that could grant more than 100 permits for drilling in the North Sea.

Oil and gas companies said the decision would ensure “more control over our own economy” and make the UK “less dependent on other countries”.

But the revised checkpoint was branded a “sham” by green campaigners, who have called for a halt to all new oil and gas licences and threatened a barrage of legal action.

Jacob Rees-Mogg, the Business Secretary, said the need for domestic energy production had become more urgent after Russia’s invasion of Ukraine sent oil and gas prices soaring.

Under Liz Truss, the Government has vowed to make the UK energy independent by 2040.

Mr Rees-Mogg said: “To get there we will need to explore all avenues available to us through solar, wind, oil and gas production – so it’s right that we’ve lifted the pause to realise any potential sources of domestic gas."

The original “climate compatibility checkpoint” proposed last year included six tests that new developments would have to meet.

These would measure the oil and gas industry’s efforts to reduce the emissions created by extraction itself, the UK’s status as a net importer or exporter of energy, progress in moving to greener sources of energy and whether extracting fossil fuels from new developments was consistent with the UK’s commitment to reach net zero emissions by 2050.

The fifth test would have specifically considered indirect carbon emissions – known as “scope 3” – created when companies further down in the supply chain burned the oil and gas that had been extracted.

And the sixth would have considered the “global production gap”, or whether the proposals for further drilling would prevent United Nations climate targets from being reached.

The Government said it had decided to scrap the fifth test because it “understands that North Sea operators do not control the final destination of crude oil that they produce, or how it is used once it arrives at its final destination”.

On the six test, it said: “The government accepts that producers globally will ultimately need to leave some oil and gas in the ground in order to meet global climate targets.

“However, in practice, global carbon emission reductions are far more likely to be attributable to reductions in global consumption of oil and gas rather than a proactive curtailment of global production, unilateral or otherwise.”


Climate models ‘a global bank risk’

Bank regulators could cause “major systemic risk to the global financial system” if they continue to use climate models with little understanding of the uncertainty inherent in model projections, some of Australia’s most senior climate scientists have said.

The warning, published in the August issue of the journal Environmental Research, comes as ­efforts to assess risks to the financial system associated with climate change are growing.

Lead author Andy Pitman, ­director of the ARC Centre of ­Excellence for Climate System Science, told The Weekend Australian: “Climate models are very valuable tools for many applications but they are not something I want used to decide investment strategies for my superannuation.”

The central issue is the difference between weather and climate and the inability of models to predict weather events at city scale.

Professor Pitman said attempts to use dynamical downscaling to get far higher resolution data was “excellent science but not science designed for the financial sector”.

Climate risk is a growing concern for financial market regulators and central banks.

In 2017 a group of central banks and financial supervisors formed the Network for Greening the Financial System (NGFS), to work out how to future-proof the global financial system from climate change.

The network hypothetical scenarios provide a common reference point for understanding how climate change (physical risk) and climate policy and technology trends (transition risk) could evolve in different futures.

The network’s climate-risk methods are rapidly emerging as the de facto standard.

The Reserve Bank has said it will use network-derived climate scenarios in its internal analysis of climate-related risks.

According to the Environmental Research paper, the network’s efforts commonly combine the use of integrated ­assessment models to obtain changes in global mean temperature and then use coupled climate models to map those changes on to finer spatial scales.

But the UNSW scientists, warn that deep uncertainty exists in climate projections, at local scales, that cannot be ignored.

The paper said “if all central banks use a methodology that is systematically biased, this could itself lead to major systemic risk to the global financial system”.

The main problem is that climate models are not designed to predict the weather.

“While it is understood that ‘weather’ (the day-to-day variability) and ‘climate’ (the average of the day-to-day variability over several decades) are not interchangeable, and despite acute risks being weather-related, ‘weather and climate’ tend to be combined when discussing material risks to the financial sector,” the paper said.

“Unfortunately, physical climate models do not represent weather-scale dynamical responses or how weather changes the interactions between the thermodynamic and dynamical responses to global warming ­reliably. This is linked, in part, to the spatial resolution used by the models (approximately 100 × 100km pixels) which are too coarse to capture weather-scale processes.

“Broadly, this introduces a ­serious limitation in determining future climate risk for the financial sector.

“Material extremes will almost always be weather-scale phenomena which are least skilfully simulated by existing global climate models.”

The paper said the current NGFS scenarios do not represent the range of plausible climate outcomes at a country level and most banks, insurers and investors are using these scenarios without fully accounting for uncertainty.