Monday, June 5, 2017

GWPF Newsletter: US Power Producers Switch Back To Cheaper Coal








German Conservatives Call For Radical Change Of Climate Policy

In this newsletter:

1) US Power Producers Switch Back To Cheaper Coal
Reuters, 5 June 2017 
 
2) German Conservatives Call For Radical Change Of Germany’s Climate Policy
 
3) Unblocked: Shale Oil Starts Flowing Through The Dakota Access Pipeline
The American Interest, 4 June 2017 
 
4) Tom Switzer: Trump Dump’s Paris Deal & The End Of The West
The Sydney Morning Herald, 5 June 2017
 
5) John Constable: Energy Cost Is Why We Disagree About Climate Policy
GWPF Energy, 4 June 2017
 
6) Clive James: Climate Alarmists Won’t Admit They Are Wrong
The Australian, 4 June 2017

Full details:

1) US Power Producers Switch Back To Cheaper Coal
Reuters, 5 June 2017 

A shift in relative prices has spurred a modest shift in power generation away from natural gas and back towards coal.

U.S. natural gas prices have tumbled by more than 10 percent since late May as hedge funds start to liquidate a near-record bullish position accumulated in the expectation of a tighter market that failed to materialise.

Hedge funds and other money managers reduced their combined net long position in the two main futures and options contracts linked to Henry Hub prices by 584 billion cubic feet in the week to May 30. […]

In addition, the number of rigs drilling for oil has risen by more than 400 since May 2016, and many of these oil wells are producing large volumes of associated gas since February 2016.

Gas output is still down compared with year ago levels but the pace of decline has slowed and there are indications that production is about to start rising.

At the same time, higher gas prices are rationing consumption by electricity generators, especially owners of combined-cycle plants that operate as baseload and consume large volumes of fuel.

Power producers paid an average price of $3.36 per million British thermal units for gas in March 2017 up from just $2.23 in March 2016.

Coal costs have actually fallen to just $2.08 per million British thermal units compared with an average of $2.18 in the same month last year.

The shift in relative prices has spurred a modest shift in power generation away from natural gas and back towards coal.

Combined-cycle power plants ran at slightly reduced rates in March 2017 compared with March 2016 and March 2015, according to the U.S. Energy Information Administration.

Coal-fired power plants, on the other hand, saw a sharp increase in capacity utilisation, running at an average of 45 percent of their full capacity, up from just 36 percent in the same month last year.

Full story

See also: US Coal Production On The Rise As Gas Prices Go Up

2) German Conservatives Call For Radical Change Of Germany’s Climate Policy
Die Tagesschau, 3 June 2017
Arnd Henze

Two days after the decision by US President Donald Trump to withdraw from the Paris climate agreement, the conservative wing of the ruling Christian Democratic Party (CDU) is demanding a radical change in Germany’s climate policy.

A statement submitted to the ARD Capital Studio, the “Berliner Kreis (Berlin Circle)”, which includes numerous federal and communal politicians of the Christian Democratic Union (CDU), calls for an end to “moral blackmail” by climate research and a “farewell to unilateral German CO2 targets.”

Doubt In Climate Models

The statement was discussed today at an internal meeting of the “Berlin Circle” which took place in the executive committee room of the Parliamentary party (CDU/CSU) in the Berlin Reichstag. The authors, among them Philipp Lengsfeld and Sylvia Pantel, are contesting a “solitary role of the greenhouse effect” and oppose a one-sided negative view of the consequences of global warming.

According to the paper, “the opportunities associated with the melting of polar sea ice (ice-free northern passage, new fishing opportunities, raw material extraction) are probably even greater than possible negative ecological effects”. The UN’s IPCC is said to have turned into a kind of “world salvation circus”. However, it is its model predictions on which “increasingly aggressive political objectives, in particular CO2 reduction targets” are based.


The conservative “Berlin Circle” calls for a move away from the two-degree goal.

“Two-Degree Goal No Longer Achievable”

The “Berlin Circle” is particularly critical of the federal government’s climate policy. It claims that the goal of limiting global warming to two degrees Celsius is “no longer realistic”. Accordingly, it is wrong trying to close the gap by “aggressive policy measures to reduce CO2”. “Even in Germany it is no longer politically sustainable to implement such a policy which would surely lead to massive social upheavals”.

German Climate Policy As A Negative Example

According to the authors’ views, German climate policy should therefore no longer focus on mitigating climate change, but on adapting to changes. Germany’s current policy has not been an international model, but a “negative example”.

Specifically, the criticism is directed primarily against the promotion of solar and wind power. The document says that the Renewable Energy Act (EEG) cannot be reformed and should be abolished accordingly. The promotion of e-mobility and the requirements for energy-related refurbishment of homes should also be reassessed.

No Word About The Paris Agreement

The Paris Climate Agreement is not mentioned in the paper. The rejection of the two-degree goal, however, represents a fundamental contradiction to the objectives of the Paris deal which was agreed by 193 states in December 2015.

Only yesterday, Chancellor Angela Merkel called the Paris agreement “irreversible” and “a vital instrument for our planet, our societies and our economies”. It was important, she said, not to let the decision by the US government to withdraw stop others to “move ahead more than ever”.

A New Conservative Front Against Merkel

The declaration of the “Berlin Circle” is a targeted campaign against the chancellor and her role as party chairman. Until now, the conservative alliance had concentrated on refugee policy and internal security, thus uniting  the considerable displeasure which exists within the Christian Democratic Party.

With its attack on Germany’s climate policy the right wing of the party has now opened a new front against Merkel – and this demonstratively in the executive committee room of the Parliamentary party.

Translation GWPF

Full story (in German)

3) Unblocked: Shale Oil Starts Flowing Through The Dakota Access Pipeline
The American Interest, 4 June 2017 

Just four months after President Trump gave the Dakota Access pipeline the green light, oil is flowing through the controversial piece of oil infrastructure.

The WSJ reports:

The Dakota Access Pipeline is part of a system that transports oil from the Bakken and Three Forks production areas in North Dakota to a storage hub outside Patoka, Ill., and later to terminals in Nederland, Texas. […]

Energy Transfer Partners LP, one of the pipeline’s owners, said the $3.8 billion pipeline spans nearly 1,180 miles and can transport as much as 470,000 barrels of oil daily.

Ramping up the amount of oil that can flow through the pipeline will take time, according to ESAI Energy, a consulting firm that has tracked the progress of the project. The pipeline is expected to hit 75% of its capacity by the end of the year.

The Dakota Access is an important piece of pipeline infrastructure that will help alleviate bottlenecks in America’s oil supply chain. The U.S. has the world’s largest network of pipelines, but much of our new oil production (courtesy of the shale boom) is underserved by existing pipes. The shale boom came on so quickly that we’re still playing catch up in connecting shale formations in remote parts of the country (in this case, in the Bakken shale fields of North Dakota). Dakota Access will help producers get their product to market in a safer, cheaper manner.

Full post

4) Tom Switzer: Trump Dump’s Paris Deal & The End Of The West
The Sydney Morning Herald, 5 June 2017

This time the West really is divided, probably irrevocably.

In the early 1990s, my friend Owen Harries made a startling observation: that the collapse of Soviet Communism would mean the "collapse of the West".  The West, he explained in Foreign Affairs, has been and would remain a culture defined by representative democracy, the rule of law, the market economy and so on. But a common civilisation is one thing; political unity is another.

"The West," Harries pointed out, has been usually divided politically: think of Europe's wars. "It took the presence of a life-threatening overtly hostile 'East' to bring [the 'West'] into existence" as a strategic entity. "It is extremely doubtful whether it can now survive the disappearance of that enemy." The political unity of the Cold War would give away to differences of national interests and strategies.


Trump's climate call

US President Donald Trump has withdrawn America from the Paris climate change agreement, but Australia will not follow according to the energy minister.
It has taken a quarter century, but Harries' prediction has come true. The clash between the Europeans and the Americans over NATO and the Paris climate treaty could prove to be breaking points in the political West. True, there have been earlier rifts: Suez, Vietnam, Iraq come to mind.

But this time the West really is divided, probably irrevocably. This is not just because of Donald Trump's boorish behaviour. It is also because of broad historical forces, as Harries set out in his landmark essay. […]


Then there's climate change. When Trump announced the US withdrawal from the Paris deal, he unleashed a mass hysteria in Europe unmatched even by the Brussels backlash against his failure to reaffirm Article V (NATO's mutual defence clause).

In Europe, climate change has become a fundamentalist religion, with Paris as its article of faith. The adherents of this new faith want the Americans on trial because their leader has blasphemed.

Yet Trump is simply keeping a key election pledge: he wants to roll back excessive and harmful rules that cost jobs and increase energy prices. Domestic energy production, especially natural gas and oil, is imperative to reviving growth and lifting wages, especially in energy states.

In the US, the Senate is required to ratify international treaties by a two-thirds majority. Yet Obama joined Paris without its consent. Why? Because he knew the pact would be overwhelmingly defeated. (In 1997, the Senate voted 95-0 to reject Kyoto.)

In any case, Paris is weak and futile: even green activists lament it's neither binding nor enforceable. Still, many US lawmakers believe US courts would have used the deal to provide legal justification for Obama-era regulations. In scrapping Paris, Trump made good political and economic sense.

Moreover, Trump's decision could have the salutary effect of getting politicians to craft more sensible proposals. Growth and innovation – not carbon taxes and regulations – are the best way to deal with climate change.

Full post

5) John Constable: Energy Cost Is Why We Disagree About Climate Policy
GWPF Energy, 4 June 2017
Dr John Constable: GWPF Energy Editor

By withdrawing the United States from the Paris Agreement President Trump has put the burden of proof on those private investors and nation states that believe renewable energy is economically beneficial. Far from being a disaster, this is a step towards a reasonable and spontaneously attractive climate change policy.

Like many of those vilified for their views on the subject of climate change, President Trump is more of an energy policy sceptic than an anti-rational “denier” of atmospheric science. He senses, and with good reason, that the aggregate of energy policies proposed to mitigate climate change brings with it the threat of major wealth destruction and a reversal of several centuries of exponential increases in human well-being.

Mr Trump sees this from his own national perspective, believing, again with good reason, that the policies are extremely and comparatively disadvantageous to the United States. However, this narrow view is a subset of and entirely compatible with the broader conclusion that renewable energy policies will be damaging to human prospects at the global level, however much they may favour certain countries in the short term.

Those who disagree with him are, for the most part, either explicitly or implicitly affirming the contrary proposition, namely that the renewable energy transition envisioned is already economic and will bring enhanced global prosperity.

That is the black and white of the matter; you either think that the low carbon energy policies make sense, or you don’t, and it is this root level division that provides the most profound explanation of why we disagree to any extent about climate change. If there were no differences of opinion about energy, there would be hardly any disagreement about climate change policy.

Furthermore, this account not only explains the fact of the quarrel, but also the haut en bas and moralising tone of Mr Trump’s critics. If you believe that economic, low-emitting renewable energy is already available, then it will also seem to you that only ill-will and stupidity prevents its adoption, and thus that President Trump’s decision to withdraw from the Paris Agreement is ignorant at best and probably malign.

But his views are neither of these things. The reasoning is certainly elliptical, and the manner is brusque, to say the least, but in the last analysis he simply has a different view about the economic consequences of renewable energy, views that are in fact widely held amongst both specialists and the general public.

The case for renewables is not proven, and in spite of a rolling barrage of positive PR round the industry there are still very good grounds for reserving judgment. Even if the claimed equipment cost reductions are real, and this is extremely dubious in the case of wind power, the economic lifetimes remain deeply uncertain, and the electricity system integration costs for uncontrollable generators are without doubt extremely high. Upbeat babble about electricity storage, smart metering and ingenious demand management cannot conceal the fact that these “solutions” all tend towards increasing the capitalization of the electricity sector, thus greatly reducing its productivity, a clear recipe for higher consumer costs and for deeply unpleasant macroeconomic impacts.

As with many problems in technology and commerce, a resolution to this matter cannot be delivered politically or administratively. It is, to use Easterly’s convenient phrase, not a matter of administrative deployment, but a research question, the answer to which can only be discovered by free experiment and the taking of risks. Indeed, the President’s de facto rejection of state support for alternative energy actually brings this discovery closer.

A number of US corporates and other interests are now declaring that they will continue to invest in low carbon technologies in spite of the President’s decision to withdraw from the Paris Agreement. Fine. Let them do so. If the enthusiasts are right, then renewable technologies will sweep the board through fundamental and real advantage, bringing general benefit. If they are wrong, the lesson will be learned painfully and in full public view but with limited malinvestment.

So in pursuit of truth, let us remove all the deep market coercions that are currently feeding the suspicions of President Trump, amongst others. Delete the portfolio standards, abolish the tax credits and income support subsidies, and make the ‘alternative’ technologies pay their costs on the system and earn their their place in the wholesale markets through normal competition. And by all means do the same for equivalent subsidies to fossil fuels, though green campaigners will be disappointed to find that these are not nearly as common as they think.

Many “Parisians” are now consoling themselves with the thought that a Trump presidency cannot last more than eight years at the most. That is an evasion. The reality to which Mr Trump has given voice is enduring. It can be temporarily suppressed, but it will not go away. The disagreement about energy is not trivial. Cheap energy is the cause of prosperity. Climate policies grounded in anything other than cheap energy will not be sustainable.

6) Clive James: Climate Alarmists Won’t Admit They Are Wrong
The Australian, 4 June 2017

When you tell people once too often that the missing extra heat is hiding in the ocean, they will switch over to watch Game of Thrones, where the dialogue is less ridiculous and all the threats come true. The proponents of man-made climate catastrophe asked us for so many leaps of faith that they were bound to run out of credibility in the end.


Author Clive James at his home in London.


Now that they finally seem to be doing so, it could be a good time for those of us who have never been convinced by all those urgent warnings to start warning each other that we might be making a comparably senseless tactical error if we expect the elastic cause of the catastrophists, and all of its exponents, to go away in a hurry.

I speak as one who knows nothing about the mathematics involved in modelling non-linear systems. But I do know quite a lot about the mass media, and far too much about the abuse of language. So I feel qualified to advise against any triumphalist urge to compare the apparently imminent disintegration of the alarmist cause to the collapse of a house of cards. Devotees of that fond idea haven’t thought hard enough about their metaphor. A house of cards collapses only with a sigh, and when it has finished collapsing all the cards are still there.

Although the alarmists might finally have to face that they will not get much more of what they want on a policy level, they will surely, on the level of their own employment, go on wanting their salaries and prestige. [….]


Climate Change: The Facts 2017 edited by Jennifer Marohasy

Even now that the global warming scare has completed its transformation into the climate change scare so that any kind of event at either end of the scale of temperature can qualify as a crisis, Australia remains the top area of interest, still up there ahead of even the melting North Pole, ­despite the Arctic’s miraculous ­capacity to go on producing ice in defiance of all instructions from Al Gore. A C-student to his marrow, and thus never quick to pick up any reading matter at all, Gore has evidently never seen the Life magazine photographs of America’s nuclear submarine Skate surfacing through the North Pole in 1959. The ice up there is often thin, and sometimes vanishes. […]

They came out of the grant-hungry fringe of semi-science to infect the heart of the mass media, where a whole generation of commentators taught each other to speak and write a hyperbolic doom-language (“unprecedent­ed”, “irreversible”, et cetera), which you might have thought was sure to doom them in their turn. After all, nobody with an intact pair of ears really listens for long to anyone who talks about “the planet” or “carbon” or “climate denial” or “the science”. But for now — and it could be a long now — the advocates of drastic action are still armed with a theory that no fact doesn’t fit.

The theory has always been manifestly unfalsifiable, but there are few science pundits in the mass media who could tell Karl Popper from Mary Poppins. More startling than their ignorance, however, is their defiance of logic. You can just about see how a bunch of grant-dependent climate scientists might go on saying that there was never a Medieval Warm Period even after it has been pointed out to them that any old corpse dug up from the permafrost could never have been buried in it. But how can a bunch of supposedly enlightened writers go on saying that? Their answer, if pressed, is usually to say that the question is too elementary to be considered. 

Alarmists have always profited from their insistence that climate change is such a complex issue that no “science denier” can have an opinion about it worth hearing. For most areas of science such an insistence would be true. But this particular area has a knack of raising questions that get more and more complicated in the absence of an answer to the elementary ones. One of those elementary questions is about how man-made carbon dioxide can be a driver of climate change if the global temperature has not gone up by much over the past 20 years but the amount of man-made carbon dioxide has. If we go on to ask a supplementary question — say, how could carbon dioxide raise temperature when the evidence of the ice cores indicates that temperature has always raised carbon dioxide — we will be given complicated answers, but we still haven’t had an answer to the first question, except for the suggestion that the temperature, despite the observations, really has gone up, but that the extra heat is hiding in the ocean. 

It is not necessarily science denial to propose that this long professional habit of postponing an answer to the first and most elementary question is bizarre. 

Full essay

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.

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