Non Rio news

Brexit guarantee

Reacting to the wide scale dismay over possible funding cuts, the UK government has committed about £6 billion a year to guarantee post-EU funding in areas such as farming and scientific research. But critics argue it doesn’t go far enough. Indeed, I would argue its very worrying as it suggests the government simply does not get the message.

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The UK receives billions in research funding from the EU

Take research funding. A clause in the government guarantee implies it only applies to research funding contracts signed before the autumn statement comes out. Given that many of those grants went in the bin on the 24th of June it is highly unlikely they could be resurrected between now and then. That’s not how academia works.

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For UK farmers subsidies are their main source of income

I’ve been quite busy the last week with resit exam marking, I’ve got viva resits coming up and the start of term. It would be mid-October before I or anyone else in academia could get around a table. And it would then take a few weeks or months for the EU to then okay everything. Keep in mind most of the EU research at risk involves collaborative research projects, across multiple states, so even with Brexit it will involve the EU. And typically the EU will only provide a portion of the funds, we then source the rest from private industry. Naturally the private sector, worried about the economic impact of Brexit might still say no.

And what about freedom of movement? A leave supporting MP only recently realised Brexit might leave EU citizens in limbo, nah you think! If I need to recruit a PhD student or a Research Assistant with a specific and narrow set of skills, its questionable if I can do that if I’m only restricted to the UK. Any doubt about my ability to recruit and the other partners (public and private) in the EU will still be asking me to take my name off the application. The fact that the government doesn’t realise any of this just shows you how out of touch they are.

More importantly this announcement more or less confirms what I’d warned before the referendum. That you can forget about that £350 million a month. The UK will still need to pay the EU for access to the single market. Keep in mind Norway pays something like 90% per capita of what they UK pays, we’ll suffer the drop in tax revenue that comes with leaving the EU (due to reduced trade) and we have to come up with several billion more a year extra too.

In short the UK is already worse off and we’ve not even got to the tricky parts of the negotiations yet (where we have to agree to call Cheddar “reconstituted lard” and English wine as “Du Vin Roast beef”).

China warns the UK over Hinkley C

The Chinese have issued a strongly worded warning to the UK over the threat to the Hinkley C deal. As always, this goes way beyond a simple nuclear power plant. It shows what sort of pressures the UK will face post-Brexit.

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China unveil’s its prototype reactor at Hinkley point

Leave campaigners, will argue that they can get a trade deal quicker off other countries than the EU can, which often takes years or decades to negotiate a deal. This is true, in much the same way I could buy a car tomorrow in ten minutes flat….if I didn’t mind going to a dodgy Arthur Daley type and taking whatever cut and shut banger he offered! Getting a good deal means haggling and much arm twisting. The EU can do this because they are one of the world’s largest collective economy’s. The UK can’t because the Chinese (or US) will have the UK over a barrel. Its their way or the highway.

Hence, I suspect Hinkley C will still go ahead, regardless. Its an offer the British can’t refuse.

Leave turf war

Speaking of international trade, there’s a bit of a turf war going on between Boris Johnson and Liam Fox. Both argue that they are entitled to negotiate future international trade agreements. I’m wondering if Theresa May has, rather ghoulishly, taken a leaf out of Hitler’s book. In that he would often put people he didn’t like in departments with overlapping responsibilities and then sit back and watch them squabble.

In short one has to wonder if a number of the Brexiter’s are being set up to fail. Hence when the article 50 business is kicked into the long grass and ignored until after the next election, nobody can complain, and its the Brexit camp who will get the blame.

Norwegian…based in Ireland?

I travelled to Scandinavia over the summer. One thing that I found surprising to learn that the budget airline Norwegian is flagged in Ireland. Why? Well simple, because Ireland is in the EU. Norwegian has big plans to expand across the Atlantic and they know how protective the US is of its businesses (land of the free…but only if you contribute to my congressional campaign!).

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Norwegian Airlines…..flagged in Ireland

Indeed the Americans have raised concerns about how European budget airlines operate. Its also alleged that Norwegian plan on using air crews hired in from Asia for its Transatlantic operations. While I would tend to agree, budget airlines are pushing things a bit too far, but this is clearly a case of the pot calling the kettle black. American airlines have become notorious for squeezing the margins and pushing their pilots way too hard. There have in fact been several air crashes in the US that are blamed on pilot fatique.

So the reality is, all of this is just excuses, because the Americans realise that Norwegian is the thin end of the wedge. What they really fear is Ryanair bringing its not inconsiderable network and low cost model across the Atlantic (they have plans to do so, although they are currently on hold) and driving their airlines out of business. Who knows, if Michael O’Leary has his way, American cabin crew might have to stop being so rude and bossy to passengers!

But obviously the point is that if Norwegian wasn’t based in the EU, the Americans would have just told them to hit the road. But because they are based in an EU country, they have to at least negotiate. This explains the dilemma faced by Easyjet. Its probable that Ryanair will follow Norwegian and expand into the US market. Easyjet will face the choice of being a short haul British based company (hoping that any restrictions on migrant and travel doesn’t mean a dwindling market share). Or leave the UK, likely register in Ireland themselves, and become an international airline.

Yes, Ireland a nation of 4.5 million could well have more airlines in a few years time than the UK a nation 11 times larger! All thanks to Brexit.

When the generations fall out

An interesting article I came across regarding baby boomers, from another blogger. They enjoy a remarkably good deal. Many managed to buy a large house before such things became expensive, they’ve retired on a final salary pension in their 60’s, when most younger generations (or the generation before them) retired on a less generous settlement later….if at all! And a triple lock on their pensions, plus the ring fencing of certain elements of the NHS budget means they’ve been spared the harsh austerity the rest of society has had to endure.

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And to cap it all we have the Brexit vote, where baby boomers overwhelmingly voted to leave, a final two fingered salute to succeeding generations. Indeed, its worth noting that baby boomers are also the worst generation for environmental damage and the most likely generation to be climate change deniers…..and likely to be Trump voters.

In short, there’s a very serious risk of the generations falling out. Many of those flocking to labour and Corybn are young (and angry) millennials. While its unlikely they will win this time around, as the baby boomers die off, its inevitable that the younger generations will gain control and suffice to say there will be a day of reckoning.

Recall, as I pointed out in a prior article Brexit does complicate matters as far as national debt. Any default or “haircut” on national debts will hit pensioners, baby boomers in particular very hard. Many could see their income wiped out. The chances that the millennials will see their incomes squeezed yet further to pay off these debts (run up paying for baby boomers cosy life style and a failure of past governments to tax baby boomers more while they were working), after this generational betrayal, its slim to none.

Italian banks

And speaking of which, the trigger event for a sequence of sovereign debt defaults could be about to strike. There’s been further concerns expressed about the health of Italian banks. Italy is at risk of economic turmoil if a referendum goes against the government.

Now any Brexiters who feel smug and say this is why we need to get out of the EU, well no. The entire global economy is interconnected. If Italian banks go down and risk bringing down Italy, the impact will be felt worldwide. And its pensions and savers in the UK who will have to take a hit.

Ultimately, the world’s governments will face a difficult choice, bailout Italy (not an easy thing), or risk a contagion of debt spreading through the whole economy. A default of Italy would of course leave investors worrying about who is next and whether “safe as the bank of England” is really that safe. Which could make things very difficult for governments dependant on credit (such as the UK).

First contact?

Another interesting story revolves around a mystery object exo-planet hunters have discovered. They’ve concluded there’s something odd about a star some 1,000 light years from Earth. Some are arguing that it could be signs of an alien mega structure known as a Dyson’s Swarm. While unlikely, the very fact its being seriously considered is of interest (no scientists wants to be a member of the “I saw a flare” club, so they won’t announce this unless they’ve evidence to back that up). Its good to know there might be intelligent life in the universe…because there’s bugger all down her on Earth!

Trump’s minions

How can you not mention Trump, he’s like a sort of virus. However its more his minions that I want to talk about. Being a spokesman for the cult of Trump has got to be a pretty awful job (worth seeing Trevor Noah’s take on this here). Your boss says the most insane batshit crazy stuff, you have to try and row back on it, no he didn’t say that…..okay he did (after being confronted with a video of him saying it), but that’s not what he was trying to say….Only, for Trump to come out and reverse course again two minutes later. Its likely he’s killed the career of Rudy Giuliani, Chris Christie and Newt Gingrich.

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However, another tactic of Trump’s minions is to try and out Trump Trump. Take his chief Spokesperson Katrina Pierson. She’s an ex-Tea party candidate who proved to be a little too crazy even for the tea party (she’s wears a necklace….made from bullets!). She’s regularly gone beyond Trump in craziness, recently blaming the US invasion of Afghanistan on Obama (leaving TV journalists speechless). When the insanity of what she was suggesting was pointed out, she tried to blame her microphone (an excuse both she and Trump have used in the past…perhaps we should start a kickstarter fund for her and Trump to buy a hearing aid?).

And Trump has recently announced changes to his campaign team. His campaign chief Paul Manafort, under pressure over payments to him linked to Putin, has been pushed aside. Instead Trump’s brought in the boss of Breitbart (a man referred too as “the most dangerous political operator in America”) and allegedly also ex-Fox News chief Roger Ailes. Which incidentally does raise some awkward questions as to what was going on over at Fox News during that whole Trump v’s Megyn Kelly saga (keeping in mind, Ailes was Meygn’s boss).

One has to worry what sort of fruitcake’s Trump will dig up to form his cabinet, in the increasingly unlikely event of him being elected. Its no wonder some are arguing that Trump doesn’t actually want to be president, he only did it to further his TV career and is now deliberately sabotaging his own campaign.

Let me draw you a picture

One of the problems with climate change deniers is that they will waffle along, making spurious contrarian claims at such a rate one can’t debunk them all, or quote misleading information (often doctored or deliberately misinterpreted). In a recent debate in Australia Brian Cox managed to outwit climate denier and member of the neo-fascist “One Nation”, Malcolm Roberts, by bringing along a graph of the data that he claimed didn’t exist.

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Naturally this led Mr denier to claim the data, collected by NASA, was “doctored”, leading Brian Cox to question Roberts whether he also believed NASA hadn’t landed on the moon. While this might seem a bit of an unfair jibe, but as I’ve pointed out before the idea that dozens of agencies around the world, universities, NASA, ESA, the Met Office, the Tyndall centre, Scripp’s institute, the US military, etc. could all independently conduct studies (often relying on different data sets gathered in different ways) and reach the same conclusion. This leaves one only one of two alternatives, a) the evidence supporting climate change is rock solid, or b) all of these agencies worldwide are engaged in one massive global conspiracy, that makes faking the moon landing seem simple. So if you believe the climate data is doctored, then it is legitimate to question whether said individual is a tinfoil hat wearing conspiracy theorist.

Also deniers need to realise that they’ve been “found out”. The website “Skepticalscience.com” now has an easy to browse list of many prominent climate contrarians, listing their favoured climate myth and the information to debunk them. They also have a complete list of all climate denier myths along with the counter arguments, filed at a range of different levels (e.g. a simple quick explanation, or the hard scientific one). So in truth all you need to do to combat a climate denier these days is have a smart phone or I-pad and this website open on it.

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In defence of EU regulations

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Thanks to those pencil pushing killjoy’s in Brussels we’re not allowed to let children work in factories like this anymore!

In amongst the bigoted BS about migrants, the Brexit brigade will often trot out the phrase freeing us from burdensome EU regulations. It was a central part of Michael Gove’s rambling speech (which for some reason reminded me of Marlon Brando’s monologue from Apocalypse Now) regarding Brexit (he also made various wild claims, such as the fantasising that the EU will break up if the UK leaves…and then claim that the UK will get a better trade deal from a now non-existent EU….rather than a worse deal from 24 different countries!).

This is a falsehood, because if there’s one thing that we can guarantee will happen post-Brexit, its that the UK will still be subject to many pages of EU rules (oh, and EU citizens will still be able to come over here in unlimited numbers…oh and we’ll be paying for the EU to administer all of that too). Why? Well firstly because there is no way the EU will sign a free trade deal with the UK if we don’t, nor indeed will any of the other trading blocks. But also because it is in the UK’s interest to keep those rules….unless you fancy turning the country into North Korea!

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Thanks to “burdensome EU regulations” accidental deaths are falling across the EU

What the Brexiters don’t mention is that these “burdensome” EU regulations are mostly devoted to setting safety standards , protecting the environment and workers rights. In other words stopping kids being exposed to dangerous chemicals contained within toys (or air pollution), making sure food doesn’t poison us, preventing workers being maimed at work and making sure you aren’t impaled on the steering column in the event of a car crash. So unless there’s anyone whose okay with taking a few chances (i.e. you want to expose your kids to carcinogens and see workers losing hands and feet at work like back in the old days), I suspect most of these regulations will be staying. Not least because so much trade depends on it.

Let us take the car industry by way of example. Across the EU car makers, or the producers of car parts, are subject to a long list of regulations. These rules keep us safe and mean that despite the fact that year on year the number of cars has been growing, the number of road deaths have been falling for some time now. And as I discussed on my energy blog a few years ago, the benefits of these regulations are all too easy to see.

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EU regulations help keep car drivers safe, while also allowing vehicles like this British made car to be exported more easily, while keeping insurance premiums down

I would note that the EU rules relating to vehicle safety are (arguably) weaker than those in the US (we’ll discuss the reasons for that later), notably in that they don’t absolutely require a vehicle crash test (simulations and calculations to prove safety will do) for cars sold in small volumes. This loophole is crucial to many smaller UK car makers (think Caterham, Morgan, TVR, etc.) who rely on it to stay in business (and why importing UK made sports cars into the US is a bit of a minefield).

These rules on vehicle safety are not dictates from Brussels, but are the result of years of negotiation between governments, safety bodies, academics, car makers and insurance companies to try and find a compromise that everyone is happy with. These regulations are important because car companies and insurers rely on them both in terms of setting bench marks for acceptable levels of safety that they can design too (while giving insurers the confidence to insure those cars). But also to back them up in court, they will often cite “complying with all specified safety standards” in the event of a lawsuit. So long as they can prove their car was within the regulations it means that A) a lawsuit is less likely to succeed and B) there are legal liability limits to how much they can be made to pay out. However, if for some reason the court finds that they failed to meet the regulations (as has happened in the past), the sky is the limit. Lawsuits with eyewateringly high pay outs have been the end result.

So if post-Brexit the UK government were to follow Gove’s advice to relax or in anyway loosen the “burdensome” EU rules on vehicle safety, the end result would be the collapse of the UK car industry. Insurers would refuse to insure UK made vehicles, the EU and US authorities would ban the sale of UK made cars or car parts within their borders and the driving public would stop buying them (after all which car are you going to drive your kids around in?). UK vehicle manufacturers would have to move abroad (or ignore the UK rules, adopt the EU rules and pay the costs of arranging for inspection and enforcement themselves).

Similarly the aircraft industry is tightly regulated (and again, the US FAA regulations are arguably stricter than those in Europe). “Airsafe” parts are quite literally “reassuringly expensive” as a result. So much so there’s actually a big black market in counterfeit or non-standard aircraft parts, which the authorities (and the airlines) are trying to crack down on. And again, the airlines, aircraft makers, insurance industry and the regulators themselves (who have been sued in the past for not regulating airlines enough!) all rely on these rules both to protect planes and passengers (airlines don’t like losing aircraft, not a good business model to go around killing your customers!), but also protect themselves from lawsuits and limit their liability in the event of an air crash. If an airline or aircraft maker breaks these rules or is found in non-compliance, the result is usually a massive payout, customers boycotting your planes and usually the collapse of the airline in question.

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So again remove these “burdensome” EU regulations and you’d have all of the UK’s aircraft industry and airlines relocating overseas, under threat of them being banned from US or EU airspace if their planes included any cheap British knock off parts. And of course the insurance companies would refuse to insure these aircraft and passengers would likely refuse to fly in them.

Finally, let us consider food. Listen to the Brexiters they’ll have you believe Brussels has 26,000 words devoted to regulating cabbages (not true! As the Beeb’s “more or less” discusses). Farmers represent a problem for the leave camp. Country folk are naturally conservative and distrustful of foreigners, but many farmers are heavily dependant on both EU farm subsidies and trade with the EU. Indeed studies have shown that in the event of Brexit farmer incomes will be on average £34,000 worse off and food prices will increase.

The leave camp have tried to counter this by preposterously suggesting that much of the increased food price will go to farmers (actually it represents an increase in their costs as they find it more expensive to important consumables from the continent) and that subsidies will remain (I’ve yet to hear a single mainstream politician confirm that the UK government can afford to pay such subsidies).

Ignoring such obvious fallacies, the leave camp also try to claim that farmers will be freed from EU “red tape” by voting to leave. In which case, I hope farmers like the taste of their own produce, cos its all you’ll be eating from now on! Much of this “red tape” relate to food safety and environmental protection, so the EU will immediately ban all produce that does not meet its standards (as likely will other trade bloc’s too). And you would even struggle to sell such produce within the UK. Supermarkets know their customers. They know that customers will react to the slightest hint of risk when it comes to food safety by boycotting said products. Customers also demand that products meet various environmental standards (dolphin friendly Tuna, fair trade coffee, free range eggs, no GM crops, etc.). There’s been enough food scares in the past for them to know not to take any chances and the would cease to stock any food that they know that even a minority of customers will refuse to buy.

So I’m afraid, these EU rules and reg’s will be staying and as noted earlier, like Switzerland and Norway, we’ll be paying the EU to send bureaucrats to the UK to make sure we are compliant. Indeed I would argue the other way, in the event of Brexit don’t make our rules weaker than the EU, make them stronger. You will recall I pointed out that in some areas US regulations are actually stricter than those in the EU. In part this is because the US is a more litigious society, so the regulations have been tightened over the years to match this. On which point, the UK tends to be fairly litigious compared to the continent. So post-Brexit we’d expect a natural creep upwards of regulations, rather than downwards.

However, some accuse the US of using its tough regulations on trade as a defacto means of protectionism. They know US firms have to set the bar pretty high to meet the demands of US consumers, so it makes no odds to them if the rules are strict……but it might make a Chinese competitor think twice before entering the US market (or allow them to halt the sale of UK made Cadbury chocolate bars). To those Republicans who say “big government get off my back”, I say can you sign the following legal disclaimer in which you accept full personal liability and responsibility for any injury, death, maiming, disability, dismemberment, loss of livelihood, destitution or HMO refusal (due to “prexisting conditions”) that may impact on you, your family, children, partners, pets or acquaintances from big government getting off your back.

So in a post-Brexit world, I would argue the opposite would be a sensible strategy, make the UK reg’s stronger than the EU’s to protect UK trade. Okay those very same neo-liberal types arguing for Brexit will be rolling around and chewing the carpet when they realise what they’ve gotten themselves in for, companies will whine a lot about red tape and all this form filling, but it would be a entirely rational decision. Of course, push things too far and companies will eventually get the hump and leave the UK for countries that are less heavily regulated.

There is a happy medium between enough regulation to keep us all safe and keeping the insurers and financial services industry happy, but not burdening companies with too much red tape. If only we had some sort of organisation that could find that happy medium?..oh ya we do, its called the EU!

Reserves v’s Resources

This is a reposting of something I put up on my energy blog recently regarding recent stories claiming large oil and gas finds:

In amongst the election news there’s been a lot of news on the oil and gas front that’s had my spider senses tingling….as in I sense the distinct consistency of grade A Bull$hit!

Consider the story of what was described as “the world’s largest oil field” under Gatwick in South Eastern England, with talk of “up to 100 billion barrels of oil”. This comes on the back of media reports over the last few years highlighting the scale of the UK’s shale gas and shale oil resources. Consider for example this typically Cornocopian piece from a libertarian.

A clue to the truth behind all this can be gained by actually bothering to read the report from the BGS that sparked all of this speculation. And in particular skipping to the bottom and checking out the references. You will immediately note how quite a few of them are not new, some go back many years to as early as the 1960’s. This is not really surprising because its long been known by geologists that this formation of shale existed for quite some time. What the BGS has been attempting to clarify recently is how big this hunk of rock is and what level of gas and oil is concentrated within in it, i.e. how big are the resources of gas and oil within the formation.

There is a world of a difference between saying there’s 100 billion in resources (i.e. gas/oil that is we know is located in a certain area, but may not be economic or technically possible to extract) under our feet and 100 billion in reserves (oil and gas which we know can be accessed and drilled economically).

Incidentally, anyone who wants to know more about the process of oil discovery and drilling, I’d advise taking a look at this webseries of video’s  by an Oil and Gas professor (Dr Lau), who does a good overview of the topic.

A quick look at figure 2 will help illustrate the point I’m making. As you can see only about 7% of the world’s fossil fuel resources are classified as reserves. The rest is certainly there, it exists, but the problem is that much if it isn’t necessarily in a form that’s easily extractable. It could be too deep to drill into, it could be under a mile of ocean, the rock between us and it may present problems, there could be a large underground aquifer between us and the oil (a significant problem for much of the UK’s shale resources in fact), the oil/gas might be in lots of little fields that are too far apart to be economic to drill, or it might be in waters claimed by another country. Or more often than not, a combination of factors may apply.

And a big part of the problem here is that its often far from clear, when a company starts drilling, what the situation is. Many people have this image of an oil well as being like a tank of oil under the ground. Actually a more accurate view is that of a lair of sand, soil, gravel or “source rock” trapped between two impermeable barriers. So less a tank and more a sponge….but a sponge buried under several miles of earth and rock! While the oil immediately close to our drill might well flow up naturally under pressure, or it can be pumped out, stuff further way is harder to access. We have to drill more holes…at a couple of million a pop. Or even start pumping stuff down there to force the oil out. Fracking may be called for to stimulate flow.

At some point, and we won’t necessarily know when, we’ll no longer be getting enough oil or gas out of our well to make it economically sensible to keep production going. So the well is capped. And keep in mind the industry average for oil well recovery ratios (what comes out v’s what stay’s in the ground) is about 40%, with a range of about 10-55% for conventional production. That is to say that on average 60% of the oil in a typical field is left in the ground. And recovery ratio’s tend to be poorer in new oil fields (particularly with unconventional oil and gas), largely because the drillers are still feeling they’re way around the underground elephant.

So if for example in this Gatwick field we were to identify a reservoir of oil with say 1 million barrels in place and let’s assume we can recover that for a cost of $10 million, would it be worth our while to drill? The media or the cornucopian’s types will probably say, well of course, but let’s think about that.

At current oil prices (let’s assume $60/bbl) and assuming average rates of recovery (so 400,000 bbl actually recovered), we’ll make $24 million, which doesn’t sound bad. But what if we end up only getting 10% out? Or because of unexpected complications (e.g. a load of FoE protesters occupies the rig for several months, we hit several gas pockets, we end up drilling a dry hole and need to start again, etc.) our costs jump to £30 million. Or perhaps several of these things happen, what then? Well, in this case we’re loosing our shirts is what happens, even if the oil price goes up to $120!

And this is the reason why a lot of oil finds worldwide will turn out to be minions that the oil majors simply chuck back in the sea and ignore, hence the massive difference between global reserves and resources.

To draw an analogy, if we were to assume you could book all resources and treat them as reserves, then nobody by the sea, such as a ship wreck survivor, could ever die of thirst, as after all he’s surrounded by water. However if we consider the amount of trouble its going to be to separate out the water from its salt content, we realise he’s going to be struggling to extract enough to survive. And only then if he can build some sort of solar still. Listen to the cornucopian’s and they’ll have you believe he’ll have a swimming pool with a jacuzzi up and running by his first week! B) By contrast, someone by a small mountain pond, is in a substantially better position. While his water resource is smaller, its in an easily accessible form. So long as he doesn’t over-produce and drain the pond dry, he’s always going to have at least some water available.

Hence why talk in the UK comparing the Gatwick find to Ghawar field in Saudi Arabia is laughable. Is it being seriously suggested that the UK holds more oil than the rest of Europe (including Russia and central Asia) combined? Ghawar field, represents a proven reserve of oil that has been producing for 50 years, while only relatively small quantities of oil have been produced in Southern England. Again to give you a comparison, Ghawar’s peak production is in the order of 5 million barrels a day (out of a Saudi total close to 10 million bbl/day), oil fields in Southern England output about 20,000 bbl/day.

Similarly any suggestion that the US holds “100 years of shale gas” is simply not accurate. This analysis assumes that 100% of Shale resources could be recovered (they can’t!), with a recovery factor of 100% (shale formations tend to have recovery factors well below the 40% mention earlier). A more reasoned analysis suggests 11 to 21 years of supply. The EIA estimates that Shale Gas has increased US resources by 27% and worldwide by 32%. A lot of gas yes, but not quite the massive game changer that is often suggested.

This brings us to the final point in figure 2, production v’s reserves. Again you will notice that annually only about 1.2% of world energy reserves are produced per year, or if we focus on oil alone, about 8% comes out per year. The fact is we can’t simply extract oil or gas at any arbitrary rate of our choosing. A higher production rate often means more drilling, more pumps, more costs and again beyond a certain tipping point, its not going to be economic nor technically feasible to up production. Too high a rate of production also risks causing technical problems, which will in the long term limit the amount of oil we ultimately extract from our reservoir. So large reserves, nevermind large resources don’t automatically mean a high rate of production.

And of the world’s oil resources (conventional and unconventional) annual oil production is but 0.8% of these resources. So you understand how laughable stupid the ravings of some cornocupians, like our libertarian fantasist earlier, sound when they imagine being able to drain the UK’s shale resources away (with a recovery ratio of 100%!) in just 50 years! To draw another analogy if we we’re to send a load of cornocupians to the sides of a large lake and get them to extract water using just spoons and sponges, while I took a small pond and a foot pump, who do you think would achieve a higher rate of production?

So you may enquire given everything I’ve said why are the companies behind these finds spreading such falsehoods. Well for the very same reason why the oil and gas companies are laying off staff. With the recent drops in oil price, nobody wants to invest in finding more oil, which is really bad news if you are head of a oil exploration firm. Of course the best way to attract some suckers investors to fill the company coffers is some good oil fashioned snake oil salesmanship, which the media have been more than happy to promote free of charge. Keep in mind that one of the key promoters of this story also just happens to be a city firm who specialises in oil and gas investment.

Similarly the shale gas promoters have been selling the myth that shale is some new magically energy source developed by professor Dumbledore at Hogwarts. In truth, the first fracking of oil wells dates back to 1949. Certainly the fracking technology used today is very different, the scale is larger, the depth and pressures are different. But the basic idea that we could use it to extract the oil and gas from the shale resources we’ve long known existed is not a new idea.

Anyone who doubts me, go to your universities library some evening and go through the oil and gas journals of a few decades back (say 60’s to 80’s, whatever’s on microfilm was my rationale) and you will see the odd paper or journal pop up relating to “hydraulic fracturing”. I found several going all the way back to the 1960’s….including one crazy one which thought of using fracking to dispose of nuclear waste! 88| (they went a bit nuts in the 60’s, all those drugs! :crazy:).

Again, the oil and gas industry has been attempting to suggest otherwise, as they have a very specific agenda. Which is basically that the existing reserves of oil they hold are rapidly depleting. There reserves are also uncompetitive compared to those held by Middle East producers. And the “let’s steal the Arab’s oil” gambit appears to have failed rather dramatically. So plan B is to con the rest of us into paying over the odds for domestic oil and gas, while ignoring the urgent matter of climate change and the fact that unconventional oil and gas production often comes with a much higher rate of pollution and a higher carbon footprint.

So given these factors, yes you can go with the dodgy “cowboy” fracker, whose offering a “too good too be true” deal. Or do you go with the science, which says we need to engage in a long term strategy to get off oil. Nothing spectacular, but a long term commitment towards energy conservation, renewables and generally living within our means.

Tales from the Climate wars

A couple of recent stories from the environmental movement might be of interest. This is particularly topical as there is a new documentary film out called “Merchants of Doubt” (based on the book of the same name) which exposes the tactics used by climate change deniers and their links to the fossil fuel industry. Indeed, its pointed out that many of the same tactics used by deniers are similar to those employed by Big Tobacco.

Mega drought risk threat confirmed by NASA
The effects of climate change will not be spread equally across the globe. Some areas might see some benefits, crops yields increasing for example, other regions will suffer some limited effects, but some parts of the globe are going to see very severe effects. Indeed whole areas will see dramatic and quite devastating climate shifts. One of the regions which it has long been suspected could see a major reversal of fortunes, is the Mid-Western states of the United States, where it is feared climate change could lead to droughts and desertification, turning the entire region from the bread and beef basket of America, into a mix of desert and steppe.

These fears are not idle scaremongering, but are based on the knowledge that in the past, when the world was only a few degrees warmer, most of the US Mid-West WAS a desert, so that it would return to that state after a spell of human induced planetary warming is hardly controversial. The region has also suffered from several persistent droughts in recent years. Anyway a new study by NASA scientists has taken data from past drought events and essentially rolled things forward to suggest that so-called “thousand year” drought events might become a little more common. Droughts which last for 30 to 50 years at a time are a possibility by the centuries end, with an 80% chance of a 35 year drought.

Naturally such events would dramatically alter the landscape, rendering a large chunk of America unable to support its current population. Imagine the Dust Bowl of the 1930’s magnified twenty fold. Ironically, of course the Mid-West happens to be the home of the Tea Party types who are sceptical of climate change and want big government off their back. Well be careful what you wish for. After all, how is the rest of America going to react to this? Throw government money at the problem….or suggest to the tea party types that they’ve made their bed, now lie in it!

Climate denier outed
The climate denier camp will frequently flag up the words of one particular climate scientist who takes a dissenting view of climate, while ignoring the other 97% of climate scientists who reach the opposite conclusion. Indeed, deniers are fast running out of material as the number of true “denier” climate scientists is becoming so rare, they should really talk to the UN about getting climate change deniers put on the endangered species list or something (my plan, fence of parts of Texas, capture the likes of Monckton and Co. with some sleeping darts, move them in and try to get them to breed :))).

Take for example John Christy, one of the few vaguely credible climate skeptic’s. However, he doesn’t deny that humans are influencing the climate, his bone of contention is to what degree we’re responsible, an issue referred too as “climate sensitivity”…..of course Fox News or the Daily Mail tend to gloss over such pesky points, but then again, it doesn’t take much to be a “climate expert” on Fox, merely being an accountant will do for them!…like you can be a “British terror expert” just by being a dim witted racist!

But I digress, anyway one of the problems with such trends is that more often than not, these climate change deniers get outed as being in receipt of large amounts of cash from some dubious sources. Of course, the right media is quick to airbrush such individuals out of history at this point.

Well they just managed to catch a whooper. The denier Willie Soon, whose name and credentials have been used to endorse many papers denying climate change, some of which have been used to support Republican friendly legislation, has just been outed. Documents reveal he’s been on the take for sometime and may have received as much as $1.2 million from several oil companies. This is a rather serious blow to the denier movement, as his name happens to endorse numerous papers by other deniers. Wipe out them from the scientific record and their ain’t a lot left.

And this comes on the back of the Berkeley Surface Temperature Study last year. Funded by the fracking barons the Koch brothers, who probably hoped they’d come with with yet more drivel for the denial machine. Instead its authors largely agreed with the conclusions of the IPCC. Talk about an own goal!

The Ice Age Myth cometh
An all too common myth you’ll hear from deniers is that “scientists predicted an Ice age back in the 1970’s”. Even the BBC seems to have been taken in by this one, as they’ve brought it up in a piece on climate change as recently as this very night.

The truth is that while the media did get taken in by a number of rather vocal scientists, the vast bulk of scientists and the weight of the science published, during this period, predicted not cooling but warming due to increasing carbon dioxide levels. The main reason for this misunderstanding was the issue of sulfur emissions, however further information on these, plus a more precise idea as to the triggering and ending of ice ages, quickly cast doubt on these predictions.

From 1965 to 1979 just seven peer reviewed papers predicted cooling, while 42 related to probable global warming. By 1975 the US National Academy of Sciences while, certainly keeping an open mind on things, had taken the view that global warming from carbon emissions seemed the more serious risk.

So if anything this “cooling” myth is proof of how a small but vocal minority of scientists can lead astray journalists looking for a sensationalist story.

Harvard Endowment campaign
There’s a campaign growing in Harvard university, driven by current and past students, for the universities massive $32 billion endowment fund, to exclude fossil fuel companies. As you can imagine this is being resisted by many of Harvard’s wealthier Alumni (the sort who bought their degree by their parents giving a large chuck of cash into that endowment fund!).

However it could set a long term trend that would be very damaging to fossil fuel companies, where like arms dealers, many refuse to lend or invest in them for ethical reasons. Its the sort of thing that could easily have a significant impact at bringing about serious action on climate change.

Abandoning the sinking ship
And perhaps recognising the consequences of stories such as the above, the PR firm Edelman has apparently ended its long running relationship with the American Petroleum Institute. This is probably driven by the fact that there is an increasing rift opening up within the capitalist world between the fossil fuel companies who want to ignore climate change. And other industries who recognise it as a threat to their very existence.

Take the insurance industry, they have been increasingly vocal about the risks posed by climate change. The insurance industry is seeing an alarming increase in claims from large storms and extreme weather events, which in turn is leading to both an increase in premium to offset this. They are also increasingly reluctant to insure people in certain high risk areas, forcing people living there to either go without insurance (wiping out the value of their home) or resort to federally funded schemes. As I’ve pointed out before, one could argue we’re already paying a defacto carbon tax in terms of the money needed to prop up these schemes.

Either way, it does show that the cracks are starting to grow and the climate denier bubble is at risk of bursting, as much for practical financial reasons as anything else.

Changing Weather patterns
We tend to consider climate change as some sort of long range threat that our children have to worry about. However the effects its having on global weather patterns are actually becoming all to obvious. While temperatures have been unusually cold in the North East of the US, by contrast Alaska, northern Canada and central Europe is unusually warm for this time of year. This is of course is no huge surprise, its well known that the Jet Streams play a key role in set weather patterns.

For example, remember those storms last year? Well, that is believed to be related to the movement of the jet stream from its normal path to instead wind up focused on the UK for several weeks in a row. And yes, you guessed it, this is one of the predicted consequences of climate change.

The money pit
I’m generally skeptical of nuclear power for a variety of practical reasons. For example the relatively slow rate at which reactors can realistically be built, which is but a fraction of the current build rate of renewables. So slow in fact, that its questionable whether new reactors can be built quickly enoough to replace the existing fleet as its retired. Then there’s the problem that nuclear is something of a one trick pony, good for baseload power, but not really much use for intermediate or peaking load power, or indeed the 80% of our energy use that isn’t electricity.

But above all else its the costs that have me worried. The capital costs to build new plants are colossal, far exceeding the numbers for any alternative and these construction costs are likely to be exceeded by the bill to clean up the mess afterwards.

And the problem with decommissioning is that the costs keep on being inflated upwards. The bill to clean up Sellafield has now risen to £53 billion, a £5 billion rise in just one year. This is merely one part of a total clean up bill for current decommissioned reactors that works out at an eye watering £70 billion. I recall a few years ago, having to tell off some environmentalist for claiming that the cost of decommissioning in the UK was over $100 billion. I told him that he was exaggerating a tad….well at current exchange rates its about $108 billion, so he was actually underestimating it! 88|

Suffice to say this is not small change. Such a hefty bill is going to represent a significant cost to the exchequer for years to come. Which raises the question as to whether its such a good idea to be doubling down on nuclear, with Hinkley C, a plant that will require a subsidy rate of about 68% per kWh (at present electricity prices) and that’s before we even start to consider decommissioning costs. Would it not seem more sensible to spend that money instead on something like energy efficiency programmes, greater use of CHP, or Tidal Power?

Nepal Trekking Disaster

Freak weather in Nepal recently led to a rash of deaths on the slopes of the Annapurna circuit, a very popular long distance trek for tourists. Most of the deaths seem to have been due to a combination of exposure and avalanches in the region of the +5,000m Thorung La pass. With nearly 40 or more dead (and that only seems to include the westerners, not locals!) this is one of the worst mountaineering disasters in history. This comes on the back of a pervious accident where an avalanche swept away many Sherpa’s from the slopes of Everest, leading to the equivalent of industrial action on the slopes of Everest. This tragedy raises many worrying questions.

Firstly, obviously unseasonal weather does tend to hint at climate change as being a factor. While as always, one can’t tie climate change to any specific weather event (difference between climate and weather) but inevitably such events are going to become more common. There have been several similar freak weather events in the UK as well over the last twelve months.

Secondly based on survivor accounts it sounds like many were first led up the mountain in fairly appalling conditions. This violates normal mountaineering logic which says in such conditions you’re safer going down and waiting out the weather lower down. Then when it became obvious that staying put wasn’t an option, they started heading down in conditions neither they nor their guides were equipped to cope with. Indeed some stories tell of guides leaving essential safety gear behind to lighten their loads.

A key factor in the 1996 Everest disaster was the commercial pressure on two competing teams. The guides (both of whom perished) felt that as their clients were paying for the summit, they had an obligation to get them to the top. For example, one of the guides, Rob Hall, had a golden rule about turning around by 2 pm even if within spitting distance of the top (to ensure sufficient time to descend and avoiding the late afternoon thunderstorms that can occur on high mountains). On this one occasion he ignored this rule.

Also the client and guide relationship saw the clients abdicating a lot of their responsibilities onto the guides on the assumption that they were suitably equipped and able to get them down in an emergency. Jon Krakauer, writer of the infamous account of the disaster “into thin air” noted how one of the guides was not only climbing without oxygen (thus rendering himself too weak to aid clients effectively) but had jettisoned his rucksack too (obviously by climbing without oxygen he had to lighten his load) and thus had no rescue or emergency gear. So we can see similarities here with events in Annapurna.

In the UK there was a period where climbing accidents by university clubs was exceptionally high. The mountain rescue teams, in coalition with the McOS and BMC set a system of training for clubs which sought to redress this. Firstly by providing training in key skills such as navigation, winter climbing, avalanche awareness, etc. But also to help the clubs develop a safety conscious culture.

Having one leader leading a group of barely proficient (and potentially unfit) students up a hill isn’t a good idea. The safety of the group is entirely dependent on the skills of the leader (and in Annapurna the experience of guides can be patchy at best). Also, what if the leader is the one who has an accident?

Instead it’s better to have a group more evenly skilled party, such that the main role of the “leader” is more organisational (e.g. book the minibus and accommodation, work out the route, etc.) and the party isn’t solely dependent on him. After all I’m pretty experienced myself but I have been known to “explore alternative destinations” :DD and its handy to have someone therefore also looking at the map willing to step in and double check what I’m doing, or looking out for signs of danger I might have missed.

Crucially by ensuring everyone is suitably equipped and trained it means that if someone becomes separated from the party (fairly easy in a white out), they have a good chance of making it down by themselves safely, without any assistance. And it’s also important not to let people exceed their own ability. The main job of a party leader in a well-run club is often to say no to people and discourage them from going uphill if it’s obvious that they aren’t suitably equipped (e.g. the types who show up in jeans and trainers with no rain gear! :no:) or aren’t fit or experienced enough to handle the route.

These sorts of rules need to be applied in future to trekking routes such as Annapurna . Many in the mountaineering community are also calling for better communication, in particular of weather reports, standardised training of guides, high altitude shelters and as noted a more safety conscious attitude from the trekkers. This could mean guides having to disappoint clients, by preventing them going further when it’s obvious they aren’t suitably equipped or fit enough or where the weather conditions just don’t make it safe anymore.

While some will grumble and complain, in the end they paying for safety and need to be realistic about their own abilities. As they say the golden rule of mountaineering is:

“going to the top is optional, coming back down is compulsory”

You have trodden on the forbidden lawn

I recently commented on my energy blog about the success of community ownership schemes for renewables in Germany. In Germany about 46% of renewable energy schemes are owned by individuals, farmers or community co-operatives, while the 4 major German energy companies own a mere 5%. This means that as locals own the renewables, they have greater say in their deployment and directly benefit from them (e.g. a share of any subsidies). While in the UK where you so much as try to put up a flag pole and twenty seconds later there’s a community action group formed to oppose it.

There have been efforts to export these policies of community ownership both to the UK and the US. However, as I describe on my blog, the major energy companies have been opposing these moves, obviously fearful of the loss of market share. For example, they’ve been very slow to connect such schemes up to the grid or started charging outrageous fees to do this.

Well now the Tories have started to get in on the act. They have been increasingly accused of blocking such schemes for seemingly spurious reasons and in effect seem to be trying to covertly move the goal posts in terms of what’s required to get approval for such co-operative schemes. The only people who benefit from this are the major energy companies.

And it’s not just a problem in the UK. Arch climate denier Tony Abbott of Australia is attempting to renege on previous commitments towards renewable energy, not because they are too costly but because they’ve been too successful. Recent falls in the prices of renewables and increasing manufacturing rates means renewables in Australia are set to not only hit the target set by the previous labour government but exceed them, which clearly Abbott does not want to see happen, even though it’s been pointed out the only people who will benefit from these measures are Australia’s coal companies…how happened to donate handsomely to his campaign.

While I can understand a government reacting to changing business conditions and for example spending the same money on renewables, but demand of the companies that they install more hardware (which recent price drops should allow). But, as I’ve discussed in another post on my energy blog, it beggar’s belief that a government would do something as anti-business as punishing a company for being too successful. It’s the equivalent to, say, a train company actual hitting its targets for punctuality and then finding its reward was to not have its franchise renewed.

The negative signal such polices sent to investors seems to be that energy markets are regarded as a closed shop. Renewables, energy efficiency and anything else who might break up the cosy cartel aren’t welcome.

Hoovering up some trouble

This a reprint of something I put up recently on my energy blog:

There was much talk this last week or so about new legislation from the EU to limit the power rating of vacuum cleaners. Inevitably, this got the wholly eared anti-EU brigade worked up into a right old frenzy . The EU wants to ban beloved Henry the vacuum cleaner the Daily Mail claims….actually we have a Henry at work and unlike the tabloids I actually checked its power rating and at 1,200 Watts it’s not effected by present limits, although it might fall foul of the reg’s in a few years time.

Indeed the swivel eye’d UKIP types failed to notice that the bulk of the Hoover’s that would be affected tended to be cheaper ones, often coming from Asia, while the more expensive and often more energy efficient ones, such as Britain’s Dyson for example, will scarcely be affected by this (although Dyson is worried about the future direction of this legislation). You’d have been forgiven for a moment into thinking UKIP were lobbying on behalf of Chinese manufacturers and against British jobs.

It is important to put this legislation in the proper context. In effect what the EU is doing, a measure approved by heads of government in 2010 and 2013 (including Cameron I might add). This builds on efforts to limit the emissions from cars and road vehicles, which saw increasingly stringent measures being gradually applied. This has seen dramatic reductions in emissions from vehicles, with the benefits of improved fuel economy and reduced air pollution.

Then as now, the naysayers argued that this legislation was impossible to implement, it won’t work, people want cars with big engines, they won’t buy ones with smaller engines, the car industry would collapse and Europe would become one giant Cuba where people would hang onto the old gas guzzler well past its use by date rather than swap it for some Trabant type EU approved cars. Needless to say the opposite proved to be true.

Most people (other than Jeremy Clarkson) don’t care what size engine their car has, so long as it delivers the level of performance they are looking for. So if by for example using better engine management, or fitting a turbocharger, a car manufacturer can get a 1L engine to do the same job as previously you’d have needed a 1.4L (a tactic called “engine downsizing”), most car buyers don’t really care. Indeed many will take the 1L option with its lower road tax, better fuel economy and lower running costs. As I described in a previous post, once forced to change by legislation, car makers quickly discovered all sorts of tricks they could pull to reduce emissions and improve fuel economy of cars.

My car (a Clio) for example gets about 48 mpg, while the latest version of the Clio (a hybrid) is about to be launched in France boasts a fuel economy of 141 mpg. While it will probably deliver closer to 70-90 mpg (by my reckoning) on non-BEV and comparable drive cycle to the older version, we’re still talking of a near halving of fuel consumption.

And sales of cars, in particular the more fuel efficient ones has soared while it is the gas guzzlers that are heading more and more for the scrap heap. Indeed while European and Japanese car makers have increased market share since this process started, US car makers (who managed to lobby Congress under G. W. Bush to scrap efficiency measures) went bankrupt as customers voted with their feet and choose more fuel efficient European and Japanese cars instead.

So in essence the plan is to do the same to electrical goods, not just vacuum cleaners but hair driers, fridges, toasters, washing machines, etc. And this is based on reports from within the scientific literature which detail how such reductions are possible, through better design of such products. And as Britain’s Dyson have long demonstrated, a more powerful motor doesn’t guarantee you a cleaner with good suction, no more than a car with a large engine guarantee’s anything other than a higher fuel bill

But does this legislation go too far? Well yes and no I’d say, the devil is in the detail. For example Dyson, while broadly in favour of this directive is attempting to have a judicial review of how the system rates different vacuum cleaners. Given that it tests them empty this puts his bag-less units at a disadvantage over its rivals.

It is also worth remembering that the point of legislation against vehicles wasn’t just about carbon emissions and energy efficiency, but about all the other nasties coming out of a vehicle’s tail pipe (NOx, SO2, COx, etc.). These emissions represent a major health hazard, which is hardly fair on the many people (particularly those with chronic lung conditions) who choose not to drive but still have to inhale the fumes every time they go outside. Similar smoking bans were justifiable given that not everyone chooses to smoke and the rest of us would rather not have come home smelling like an ashtray.

Of course equally it’s important to remember where the electricity to run a hoover comes from i.e. likely a fossil fuel plant, including in the UK still some coal fired stations, with a massive level of emissions (and again its not just carbon dioxide we’re worried about). But that said, there is a bit of a difference between the indirect emissions from a hoover and the direct emissions from a car.

Also the success of previous legislation covering vehicle emissions, improved building standards or the phase out of the old incandescent bulbs, was a good rapport with the industry itself. Indeed incandescent bulbs were never actually banned, the manufacturers voluntarily withdrew them from sale (admittedly under the threat of an outright ban). This doesn’t seem be the situation in the case of vacuum cleaners.

It is also important to assure the public that the products on sale will be able to do the same job as previously; otherwise you’re going to get the sort of hysteria with people hoarding light bulbs due to the mistaken belief that they are cheaper (which is only true if the electricity was free!) or because they don’t produce the “correct” lighting (the consumer group Which? have a buyer’s guide that addresses a number of these issues).

To me this highlights the need for a carbon tax in place of VAT. It would work like this, the VAT rate for any product would be calculated according to the product’s lifetime carbon footprint. Thus products with a relatively low carbon footprint and high efficiency will come with a very low rate of VAT (or possibly even zero), cheaper made but less efficient products would pay a higher rate of tax, probably to the point where it made no economic sense to buy them.

Furthermore this tax would apply to the full life cycle of the product. Therefore when the time came to get rid of the car/vacuum cleaner/fridge some of the tax (say 50% of it) would be repaid if it was disposed of sensibly (e.g. recycled), noting that an up-front surcharge would have already been applied at purchase for its disposal (a number of EU states already have this policy, where you pay for a product’s end of life disposal the day you buy it). This would of course solve a whole host of problems, notably fly tipping.

While one can accuse the EU commission of being a little heavy handed and somewhat undiplomatic, the fact is that the only limitations of consumer choice they are implementing is removing the option to choose to get screwed over by a product which seems to be cheaper but actually works out as having much higher running costs (and thus an higher overall cost of ownership).

But this legislation is no excuse for the Tabloids and their allies UKIP (who seem to have done very little over the last few years to stop this bill’s passage through the EU) to stir up panic buying just to suit their agenda by creating a false controversy. Indeed I might also note that the Daily Mail seemed to be trying to profit from this by offering to sell its deluded readers some cheap knock off stock. Either way it shouldn’t distract from the need to improve energy efficiency as a key part of our future energy strategy.

Tories plan to decimate Green energy

Hidden away within the recent Queen’s speech was a series of commitments to dismantle many of the Green energy policies brought in under both the last government and indeed the previous Major government. Obviously fearful that labour might win the next election, the Tories are taking a leaf out of G.W. Bush’s play book and trying to hammer through as much legislation as possible favourable to their pay masters.

The Tories, aided by their lib dem lackies, firstly plan to make it easier for shale gas drillers to frack under people’s homes (wonder what that will do to house prices?). And this comes on the back of news that the US shale gas boom is running out of steam (not that this should come as a surprise to anybody who has been paying attention to the facts rather than the propaganda) and that even the US is now talking about the need to kerb emissions. Its as if the Tories were living in a cocoon through the winter storms (presumably in a coffin holding a handful of grave soil ;D).

And should protesters against fracking try to stop this drilling, the Tories are also seeking to tighten up trespass laws with another bill they’ve slipped into the queen’s speech.

Perhaps more serious is the threat to fiddle with building standards. The Tories are now proposing to relax current standards for new buildings intended to ensure that new build structures are more energy efficient.

This is a hugely significant move. As I’ve pointed out before, as much as 30-40% of the UK’s final energy consumption involves providing heat to buildings. By contrast electricity is just 20% of the UK’s final energy consumption (and quite a bit of that goes towards heating!). So any measure that can reduce the energy consumption of buildings would go along way to both reducing the UK’s carbon emissions and reducing the peak demand for energy in winter (thus improving energy security).

And it would also mean saving money for not just householders, but also the government (by reducing the scale of the winter heating allowance…of course the Tories want to get rid of that too!). Not to mention less cases of pensioners freezing to death in winter in leaky cold houses. Such measures are also intended to counter the mistakes of the past. The fact is that the UK has in past housing booms thrown up lots of cheaply built but expensive to maintain houses which were poorly insulated, leaky, damp and without putting much thought into support infrastructure (e.g. drainage to avoid flooding, public transport to reduce the dependency for cars, etc.).

Obviously one doesn’t want to repeat the mistakes of the past, so given these facts, the previous Labour government introduced strict limits and tough new building codes. These went so far as to suggest that all new homes should be zero carbon by 2016. These rules were no bolt from the blue, but built on measures previously introduced by the Major government and indeed measures the current coalition originally supported.

The justification for the changes the Tories now propose (in what is another U-turn on the environment…anyone still remember that “greenest government ever” pledge!), is that these tough building standards are curbing house building (by making the costs of building homes more expensive). So given that the Troy plan for the next election is to trigger a housing bubble (and thus an artificial spur of growth), these building standards are proving more than a little inconvenient.

However its worth reflecting on the consequences of such a policy. It was all well and good throwing up cheap leaky homes in the 70’s, 80’s and 90’s when the world was awash with cheap fossil fuels, but that is not the case anymore. Anyone buying these homes will essentially be locking themselves into a future of many decades of ever higher gas bills (while the zero carbon homes come with much lower running costs).

And of course, where is all the gas to run these homes going to come from? As I’ve previously discussed it is highly implausible to suggest the UK can rely on Shale gas and with events in Ukraine the security of supply of the UK’s gas supplies is under greater threat than it ever has been before. Obviously in such circumstance’s creating a whole new generation of natural gas users is hardly a sensible strategy, no more than previous Tory policy to get rid of energy efficiency grants intended to allow existing households to refurbish homes (make them more air tight, better insulation, etc.)

As a token gesture, the Tories do include a measure to introduce a 5p charge on plastic bags. A good idea, as I’ve discussed before, but clearly a classic example of bait and switch, as can be observed from the fact that the Daily Mail, which is usually allergic to anything environmental, actually praised this measure.

In short the Tory plan is to gut the environmental budget, repeat all of the mistakes of the past, leading to a Britain in future with yet more leaky, badly built, flood prone homes. The unfortunate owners of these new homes will find themselves trapped with the millstone of negative equity around their neck in a home they cannot sell and cannot afford to heat (once the shale gas fantasy runs its course).

Climate Change Hypocrisies

One is often confronted by the ineptitude of politicians :**: and their habit of putting presentation and vote winning ahead of doing the job we voted them to do and indeed our taxes pay them to do. This can range from the usual banning conkers and cheese races :no: to an inability to sort out the most basic local problems. However nowhere is this more evident than the politics of climate change.

In general terms all the major political parties except the general idea that climate change is real, its happening and we need to do something about it. With the exception of the US Republicans (notably the Tea party types) and certain other lunatic’s on the extremes (UKIP seem to think flooding is the fault of gays!) this is not a controversial issue. However when the thorny issue of actually doing something about climate change rolls around, there is often a strong reluctance of any politicians to doing anything concrete. In part this is because they worry that action against climate change might be unpopular in the short term and that might cost them votes.

Of course I would counter the claim that action against climate change is not necessarily going to be unpopular. The lowest hanging fruit is energy conservation, which means measures such as lagging lofts, more fuel efficient cars, better public transport, changing planning laws to make new buildings more energy efficient, encouraging the use of CHP by industry and large energy users, subsidizing domestic use of renewables, etc. I fail to see how any of this is likely to be unpopular with anyone…other than “Lord” Monckton :crazy: (note he’s not actually a lord, just likes to pretend to be one!)….or the Shale Gas industries newest lobbiest, David Cameron :lalala:.

Furthermore if, for example, the government was to bring in a carbon tax to discourage fossil fuel use and level the playing field for renewables (.e.g to encourage electric cars over petrol powered ones). I’d argue that this new tax should be brought in at the same time as VAT, Petrol duty and Vehicle Excess Duty and other related taxes are gradually reduced and ultimately withdrawn, with the carbon tax essentially taking their place. Hence the tax burden on the public should remain more or less the same and for those who make the right choices get to see a cut in their taxes.

And since we’re talking about, the insurance industry would argue we’re already paying a defacto carbon tax as a result of the increased costs to insurance premium’s worldwide, or the fact more and more are forced into government guaranteed insurance schemes all as a result of climate change.

But yes, okay, there is certainly a “perception” that measures to tackle climate change will be unpopular with voters used to their two SUV’s in the garage, 3,000 mile Caesar salads and two foreign holidays a year lifestyle.

However, I put it to any politician standing in the murky flood waters of Somerset that if there’s anything less popular than getting people to pay a little bit more in tax (for certain things) and conserving energy, its explaining to thousands of angry flood victims why there house has been under water for 3 weeks and there’s sod all we can do about it.

The flooding in the Somerset levels has seen the finger of blame go in all directions, from penny pinching tories cutting back on flood defences, conservationists opposed to dredging, the actions of the farmers themselves, etc. But certainly, while we can’t tie climate change to any one specific weather event, this is the sort of stuff its predicted we’ll see more of in future as a consequence of climate change.

Now the problem for politicians with that is, it means in future more standing in muddy fields and floods, more angry locals shouting at them. I mean would you want to be the local Tory MP in Somerset come next election time? Would you want to be a Tory major of London or PM in charge after London floods? And London and the south east is one of the very locations climate scientists fear will become more vulnerable to flooding, unless a lot of money is spent on new flood defences.

And extreme weather events, whatever the reasons, can swing an election. As I pointed out before, its possible that storms and floods in the US on the eve of the vote 2012 election, coupled with Romney’s climate scepticism, probably swung the votes in several key states Romney had to win (such as Florida) Obama’s way. And the reason why Merkel’s conservatives in Germany are such enthusiastic supporters of the “Energiewende” is in part because the CSU’s lack of empathy with flood victims and unwillingness to take action on climate change, cost them the 2002 election, a fact they are very slow to forget.

The Katrina effect
Furthermore there is also the expense of it all to consider. After Owen Patterson got run out of Somerset with his tail between his legs, the government realising how inept this made them look pushed the panic button. They immediately signed up to a whole host of expensive measures (such as dredging and new flood defences), that may or may not actually have any effect. The army was even deployed to help out. Although it’s turned out that they aren’t really needed. But it does show how the government is running scared on this issue all of a sudden.

This is a phenomenon I refer to as “the Katrina effect”. Where like George W. Bush, a politician is partially responsible for the severity of a flood (e.g. by cutting back spending on flood defences to save a few pennies) and then when the media go and make a big deal out of it, he’s forced on this massive guilt trip to make a lot panicky and often expensive promises to atone for his previous sins…at the expense of the tax payers, some of which may not actually be terribly effective.

As the 2006 Stern report made clear, even in the worst case scenario the costs of mitigating climate change will be vastly lower than the costs for fire fighting the consequences, quite apart from the loss of life and loss of political face, and the financial costs of panicky Katrina like responses to said disasters.

Consequently I put it to politicians, not only do they have a professional and moral obligation to do something about climate change while we still can, but it’s in their own long term interest to do so.

What happened to Economic Growth?

The financial crisis that struck the world back in 2008 seems to have no end. Four and bit years in we’re in the middle of one of the longest economic stagnation in history. Already some are calling it “the Long Recession” or “the Great Recession”. But why is it that economies, particularly those in the West can’t seem to dig themselves out of the mud?

One can concoct various theories. Certainly the mess left over from what amounted to a thinly disguised Ponzi scheme (otherwise known as the Housing Bubble….or perhaps more accurately “the Thatcher/Reagan Bubble”) didn’t help matters. Normally governments would rely on good old fashioned Keynesian policies to get them out of danger here. However the sheer volume of debt for some countries has largely prevented a recovery. While America under Obama (who has attempted to spend his way out of trouble) seems to be handling things better than the UK or parts of Europe, the good times are certainly not rolling again across the pond.

Others would pin the blame on the policy of austerity pursued in several countries. As I’ve discussed at length as regards Europe and the UK, such polices are almost certainly inhibiting growth and slow down economies. So clearly this is having an impact. Indeed a couple of weeks ago, two free market economists who have long argued in favour of Austerity were caught out by a Grad student, who pointed out a load of errors in an economics paper that they had published (should we really be letting people this bad at maths run the world economy?). The ratings agencies seem to agree and yet another one chose to cut the UK’s credit rating recently.

What about peak oil?

However, perhaps the most radical idea is that is that the real reason why the global economy has stagnated is due to the fact that oil prices hit and unheard of high of £147 per barrel in 2008….right about the same time as the crash, likely (so some believe) due to the fact that our planet had essentially hit the limit of oil production capacity (i.e. we just “discovered” one of “the limits to Growth”). I mentioned before how Wikileaks discovered that the Bush Adm. was applying considerable pressure then on OPEC to raise output, but when they failed to do so, many in the Adm. considered the possibility that this was because OPEC didn’t have the production capacity any more (i.e. OPEC production capacity had peaked).

In this article James D. Hamilton, an energy economist, argues the case that one of the key causes of the present recession was the high oil price and we’re not recovering because of constrained supplies of oil.

Others, notably the Post-Carbon Institute from California (a few video’s from them available here) argue that the spike in prices in 2008 represented the world crossing the Rubicon of the end of cheap oil. While there is still plenty of oil, coal and natural gas left, what’s left is much more expensive to produce and cannot be sucked out of the ground at any arbitrary rate of our choosing. They suggests that unless or until some means of growing the planet’s energy supply is initiated, the global economy will simply never recover, indeed we ain’t seen nothing yet!

And before anyone starts wailing about Shale Gas/Tight oil, as I discuss in this post, it’s probable that much of the hype about Shale gas is just that (hype!). In a further more recent post I point out that data (from the EIA and DoE) suggests that the amount of Shale gas/oil that is commercially viable is not nearly as large as previously thought and that output in the US from these resources is never going to be able to meet more than a fraction of the America’s current energy needs.

The Energy – Growth link

That energy and economic growth are linked is not in itself a controversial statement (this paper discusses the topic). I recall a few years ago being at an energy conference where this guy stood up and stated that growth in any economy boiled largely down to two factors:

1) Available energy resources and

2) Technology, notably any technology that allows one to better utilise energy resources

Political issues, whether the regime is led by hardline communists, fascists, free-marketeers or lefty-liberals, matters little. Without a good reliable source of energy an economy will collapse, with it in spades even the most incompetent and clueless government can still see an economic boom.

Energy slavery

And if you think about it they’ve got a point. The industrial revolution was heralded in by the availability of coal. An elite athlete can output about 500 Watts of energy, an ordinary human about 250 Watts while doing hard manual labour, a horse roughly 750 Watts (i.e. literally 1 hp). 1 kg of coal contains about 35 MJ of energy …..or if you consumed that kg over an hour (and used it with say 30% efficiency) enough energy as generated by 6 stout men, 12 labourers or 3 hefty horses. Consider that back at the beginning of the industrial age a bag of coal cost just a few pence it should give you a good idea of why the global economy took off in such spectacular fashion. As it meant a factory owner could literally buy the labour of hundreds of additional “energy slaves” for the price of a few shillings.

Indeed we can trace many boom’s in economic history to booms in energy production. The roaring twenties matches the oil boom in the US, the industrialisation of Communist Russia ran parallel with them opening up the nation’s vast coal and oil reserves. As I mentioned in a prior post Thatcher and Reagan’s “boom” happens to coincide with the end of the 1970’s oil shocks and the North Sea oil industry boom. Clinton happened to be in power at the same time that oil prices dropped spectacularly (graph of that here), likely leading to an increased rate of economic growth.

And the economic downswings? Well the collapse of the Soviet Union (nice article about that here) just happened to start a few years after the country hit a peak in oil production (Russian oil output has since recovered, implying this was an artificial peak caused by soviet mismanagement of oil fields). To make matters worse the soviets had also mismanaged their farming system (overuse and over dependence on fossil fuel based fertilisers, this is also how they ended up draining the Aral Sea). Also at about the same time (in March 1988) a dispute broke out within OPEC . Several countries, notably Iraq and Iran (who were at war), had been cheating on their quotas (selling more oil than they were supposed too). The Saudi’s responded by very publicly cheating on their quota. But they miscalculated and pumped too much oil and the price of oil collapsed. This drove down the revenue the Soviets gained from their diminishing oil output, quickly bankrupting them.

The recession under G. Bush senior happens to coincide with a spike in oil prices due to Iraq’s invasion of Kuwait. The 70’s recessions of course occurred at the same time as the oil shocks of that era. And as noted the 2007 crash happens to correspond to a flat lining of supply and a spike in oil prices.

Critiques?

Of course I would note that I don’t personally quite buy into this “energy is the root of all growth/good/evil in the world” view point. As I noted earlier, what policies a government applies to its management of resources can have a huge impact on their utilisation.

While the economies of the West are in the doldrums, the economy in China and the other so-called “BRICS” are still growing (not as spectacularly as before yes, but still growing). There is also no link between the Wall Street Crash and the great depression of the 20’s and 30’s (the greatest economic downturn in history) and a decline in energy indicators (indeed the opposite is true, energy prices were falling, supplies increasing).

Germany is currently one of the few European economies that is growing, yet energy prices have risen slightly (due to their efforts to increase the use of renewable energy) while overall energy consumption per capita is falling (due to energy efficiency programs). This sort of suggests it’s possible to still grow an economy in the absence of cheap energy while actively reducing energy consumption.

So clearly there is more to economic growth than simply “energy”. Economic policies are important as well as numerous other factors. That said, its certainly not easy to maintain an economy without a reliable supply of energy and I do worry that outside of a few so-called “energy economists” few mainstream economists seem to factor in the importance of energy to economic performance as much as they should.

There may be trouble ahead…..

And that last point is worrying because I’m also unfamiliar with any mainstream economist who seems to have factored in the consequences of our fossil based energy supply entering into a state of terminal decline, so called “peak oil”.

Now I’m not going to split hairs over when peak oil is going to happen (or indeed if it’s already struck), but suffice to say the world’s reserves of fossil fuels are finite, we’ll hit a peak eventually. And even the more optimistic voices suggest the 2030’s and as the Hirsch report points out, that’s still too close for comfort and not nearly enough time to get ready.

If indeed this energy – growth link is true, the result is going to be that post-peak the global economy will stagnate and decline for decades on end with little or no respite. In other words we could see a lengthy period where all the economic indicators are either flat or pointing downwards.

Now if that were to happen one has to ask how then are nations going to pay off their sovereign debts? How indeed are most people going to pay off their mortgages? Who’s going to pay you’re pension? Who will feed China? (actually that’s a silly question President Hu has retired, I should be asking “how will Xi (pronounced “she”) feed China?” :DD).

There are of course solutions, a couple of which I discuss here and here. However, as I also point out many of the “unconventional” fossil fuel based options simply aren’t compatible with a policy of averting dangerous climate change. Indeed a recent report suggests that such a policy could be little more than a fool’s errand. However, the problem with all these options, be it more renewables, nuclear, or again unconventional fossil fuels, is the time it takes to build these systems on the scale we’d need and the enormous capital costs involved in the initial construction phase (we’re literally talking many tens of trillions of dollars here). And in a falling economy who is going to pay for all of that?

Again just to put a number on things, if we assume a modest post peak oil (and only oil) decline rate of just 3%. To offset that and maintain business as usual, would mean bringing online 169 GW’s of power generation capacity (operating with a capacity factor of 90% and boasting a 100% conversion efficiency to end users! ). To replace it with unconventional fossil fuels, 3% per year would necessitate an annual loss of 2.5m bbl/day of production capacity. To put that in context, a recent report by the PCI suggests that the entire Tight oil/Shale oil output across North America will peak in 2017 at an output level of about 2.2m bbl/day (i.e. twenty years of drilling of unconventional oil across America will struggle to cancel out 1 year’s loss of production post-peak oil….what do we do the following year?).

Don’t Panic….we’ll not yet!

There are some in the peak oil movement (so called “doomers”) who seem to delight in going around scaring people about it. In the energy research field it’s the equivalent of sneaking up behind someone and saying “boo”. I’m not trying to do that. There are like I said, solutions. Indeed arguably the best solution is simply energy conservation and better recycling of materials (costs little or nothing to do and saves money!).

But the point is that any solutions to this problem aren’t the sort of thing we can string together the night before. We’re talking here about long term problems that require long term solutions, which will take decades to gradually implement. Solutions which, in order to be successful, require long term commitments both from governments, corporations and international bodies. And indeed most important of all, us the people who are going to pay for all of this, to recognise that we have a problem here and the longer we ignore it, the harder it will be to fix.

For example, many complain that the hysteria over the millennium bug was silly. We spend several years worrying about it and nothing happened. I would counter however that perhaps the reason why nothing happened was because we spend several years worrying about and did everything possible to ensure that the bug won’t bite. The same equally applies to issues such as climate change and peak oil.