Boiling over: Steve Baker, Boris Johnson and the cost of Net Zero
In this newsletter:
1) Govt finally admits installing heat pumps can cost up to £35,000 and could increase fuel bills
Building News, 1 June 2021
2) Gas boiler ban may kill Net Zero agenda, green campaigners fear
iNews, 31 May 2021
3) The EU’s Net Zero plan faces political blowback
Financial Times, 31 May 2021
Financial Times, 31 May 2021
4) Boiling over: Steve Baker, Boris Johnson and the cost of Net Zero
Maggie Pagano, Reaction Life, 29 May 2021
5) Andrew Stuttaford: The Costs of Net Zero — A Warning from Britain
National Review, 26 May 2021
Maggie Pagano, Reaction Life, 29 May 2021
5) Andrew Stuttaford: The Costs of Net Zero — A Warning from Britain
National Review, 26 May 2021
6) Joe Biden: Russian pipelines Da, American pipelines, Njet
Tom Finnerty, The Pipeline, 28 May 2021
7) How to beat stupid, green West: OPEC, Russia seen gaining more power with Shell Dutch ruling
Reuters, 1 June 2021
Tom Finnerty, The Pipeline, 28 May 2021
7) How to beat stupid, green West: OPEC, Russia seen gaining more power with Shell Dutch ruling
Reuters, 1 June 2021
8) How to beat stupid, green West II: Russia deepens China ties with expanded energy exports
Nikkei Asia, 6 January 2021
Nikkei Asia, 6 January 2021
8) How to beat stupid, green West III: Putin bets on Asia to rely on Russia's cheap coal for decades to come
Bloomberg, 30 May 2021
Bloomberg, 30 May 2021
Full details:
1) Govt finally admits installing heat pumps can cost up to £35,000 and could increase fuel bills
Building News, 1 June 2021
Heat pumps could cost homeowners up to £35,000 each, can emit noise which breaches legal limits and could increase fuel bills, the government has admitted.
Building News, 1 June 2021
Heat pumps could cost homeowners up to £35,000 each, can emit noise which breaches legal limits and could increase fuel bills, the government has admitted.
The green heating systems, which work by absorbing heat from the environment, are a core part of the government’s plans to make homes more energy efficient to help it achieve net zero carbon emissions by 2050.
Ground Source Heat Pump Association chair Laura Bishop said the government had provided no promises on how it would incentivise homeowners to install heat pumps.
But the Department of Business, Energy and Industrial Strategy (BEIS) has said it faces a number of challenges in persuading homeowners to install the devices and conceded that it was “uncertain” what the “optimal solution” was.
At an online event for the industry on the issue last month, BEIS outlined the obstacles which it faces in achieving its target of installing 600,000 heat pumps each year by 2028 in the 24.5 million homes that need them.
It said that installation takes an average of 2.5 days but could take “several weeks” because of the need of some customers for a new electricity connection or fuse upgrade from the distribution network operator, while radiators and pipework might also need to be replaced.
It said that air source heat pumps, which generate heat from the air, can create noise that could breach permitted development regulations if too close to a neighbour’s window, which it admitted could be difficult to avoid in many buildings.
And it said that many homes will not have enough space for the kit, which includes either an outdoor unit or ground array, added piping, a control unit, a hot water tank and a buffer tank.
Aesthetics are another issue, with one in 16 ‘green early adopters’ being dissatisfied with how the heat pumps looked once installed.
BEIS said that cost is also a barrier to widespread adoption. Air source heat pumps are priced between £7,000 and £14,000 while ground source heat pumps, which get heat from holes drilled into the ground, cost from £15,000 to £35,000, with installation prices driven up further by the limited number of trained installers.
There are currently around 3,000 to 4,000 heat pump installers in the UK, compared to more than 130,000 gas boiler installers, but BEIS admitted that issues remain with “installation quality and consistency” even among those who are trained to install heat pumps.
It added that if the systems were poorly installed or fitted in buildings with high heat losses, they could increase fuel bills.
Laura Bishop, director of renewable energy engineering consultancy Infinitas Design and chair of the Ground Source Heat Pump Association (GSHPA), said the government had so far provided no clarity to the heat pump industry on how it plans to incentivise uptake.
Admitting that many homeowners would not be able to afford heat pumps at the current prices, she said: “It’s an issue because what we need is the volume to make the price come down but we still don’t have any promises from the government.
“If costs don’t come down because we’ve not been promised the volume, we’ll still be here in five years with the same prices.”
She said that that she “fully expects” the government’s heat and building strategy, which is set to be announced in the next few weeks, will contain “contentious points”.
“It’s going to be a very delicate policy. On the one hand, the government has got very stringent and very ambitious net zero targets but on the other hand they’ve got to balance up how that’s going to effect real people.”
But she added that if the government does not do something “drastic”, it will never be able to hit its net zero targets.
Full story
2) Gas boiler ban may kill Net Zero agenda, green campaigners fear
iNews, 31 May 2021
Public support for the UK’s net-zero emissions goal could evaporate if households are forced to pay thousands of pounds to switch to green heating systems, climate groups have warned.
Ground Source Heat Pump Association chair Laura Bishop said the government had provided no promises on how it would incentivise homeowners to install heat pumps.
But the Department of Business, Energy and Industrial Strategy (BEIS) has said it faces a number of challenges in persuading homeowners to install the devices and conceded that it was “uncertain” what the “optimal solution” was.
At an online event for the industry on the issue last month, BEIS outlined the obstacles which it faces in achieving its target of installing 600,000 heat pumps each year by 2028 in the 24.5 million homes that need them.
It said that installation takes an average of 2.5 days but could take “several weeks” because of the need of some customers for a new electricity connection or fuse upgrade from the distribution network operator, while radiators and pipework might also need to be replaced.
It said that air source heat pumps, which generate heat from the air, can create noise that could breach permitted development regulations if too close to a neighbour’s window, which it admitted could be difficult to avoid in many buildings.
And it said that many homes will not have enough space for the kit, which includes either an outdoor unit or ground array, added piping, a control unit, a hot water tank and a buffer tank.
Aesthetics are another issue, with one in 16 ‘green early adopters’ being dissatisfied with how the heat pumps looked once installed.
BEIS said that cost is also a barrier to widespread adoption. Air source heat pumps are priced between £7,000 and £14,000 while ground source heat pumps, which get heat from holes drilled into the ground, cost from £15,000 to £35,000, with installation prices driven up further by the limited number of trained installers.
There are currently around 3,000 to 4,000 heat pump installers in the UK, compared to more than 130,000 gas boiler installers, but BEIS admitted that issues remain with “installation quality and consistency” even among those who are trained to install heat pumps.
It added that if the systems were poorly installed or fitted in buildings with high heat losses, they could increase fuel bills.
Laura Bishop, director of renewable energy engineering consultancy Infinitas Design and chair of the Ground Source Heat Pump Association (GSHPA), said the government had so far provided no clarity to the heat pump industry on how it plans to incentivise uptake.
Admitting that many homeowners would not be able to afford heat pumps at the current prices, she said: “It’s an issue because what we need is the volume to make the price come down but we still don’t have any promises from the government.
“If costs don’t come down because we’ve not been promised the volume, we’ll still be here in five years with the same prices.”
She said that that she “fully expects” the government’s heat and building strategy, which is set to be announced in the next few weeks, will contain “contentious points”.
“It’s going to be a very delicate policy. On the one hand, the government has got very stringent and very ambitious net zero targets but on the other hand they’ve got to balance up how that’s going to effect real people.”
But she added that if the government does not do something “drastic”, it will never be able to hit its net zero targets.
Full story
2) Gas boiler ban may kill Net Zero agenda, green campaigners fear
iNews, 31 May 2021
Public support for the UK’s net-zero emissions goal could evaporate if households are forced to pay thousands of pounds to switch to green heating systems, climate groups have warned.
It is “politically untenable” to expect households to pay for the full costs of heat pumps, according to climate campaigners, following reports that the UK Government is planning a forced switch to green heating without generous subsidy schemes in place.
Heat pumps typically cost about £10,000 – significantly more than traditional gas boilers – but climate experts say they will be essential in decarbonising home heating.
Reports suggest that the Government is considering banning the installation of new gas boilers by 2035 but ministers have set out little detail on how households will be expected to pay for the switch to heat pumps.
Campaigners say that any date for banning new gas boiler installations is irrelevant without subsidies to help households pay for greener heating.
They warn that ministers risk losing public support for the UK’s commitment to move to a net-zero economy if they do not soon set out a plan for funding the transition.
“If you start talking about regulations banning things, before you’ve introduced the financial support to help people make the change, then that is just going to go down really badly with people,” Ed Matthew, the campaigns director for the climate think tank E3G, told i.
Doug Parr, the chief scientist and policy director at Greenpeace UK, said that the risk of losing public support for the net-zero agenda was “significant” if the Government failed to convince people that they would be looked after during the transition.
The Government is drawing up plans for a “clean heat grant”, which could offer homeowners a grant of £4,000 towards green heating systems. But activists say this will not be generous enough to convince most households to switch, and it will only run from 2022 until 2024.
E3G is calling for the government to fund at least two-thirds of the upfront cost of a heat pump for households, bringing the total cost in line with a new gas boiler. Other groups say the subsidy must be high enough to ensure a heat pump costs no more than a standard gas boiler.
Meanwhile Mike Childs, head of science, policy and research at Friends of the Earth, told i: “It’s absolutely clear that what the Government can’t do is force people to not replace their boilers, and yet spend thousands of pounds more on a more expensive heat pump when people don’t necessarily have that money in their bank account.”
“It’s clearly politically untenable and ridiculous to put out there.”
Full story
Heat pumps typically cost about £10,000 – significantly more than traditional gas boilers – but climate experts say they will be essential in decarbonising home heating.
Reports suggest that the Government is considering banning the installation of new gas boilers by 2035 but ministers have set out little detail on how households will be expected to pay for the switch to heat pumps.
Campaigners say that any date for banning new gas boiler installations is irrelevant without subsidies to help households pay for greener heating.
They warn that ministers risk losing public support for the UK’s commitment to move to a net-zero economy if they do not soon set out a plan for funding the transition.
“If you start talking about regulations banning things, before you’ve introduced the financial support to help people make the change, then that is just going to go down really badly with people,” Ed Matthew, the campaigns director for the climate think tank E3G, told i.
Doug Parr, the chief scientist and policy director at Greenpeace UK, said that the risk of losing public support for the net-zero agenda was “significant” if the Government failed to convince people that they would be looked after during the transition.
The Government is drawing up plans for a “clean heat grant”, which could offer homeowners a grant of £4,000 towards green heating systems. But activists say this will not be generous enough to convince most households to switch, and it will only run from 2022 until 2024.
E3G is calling for the government to fund at least two-thirds of the upfront cost of a heat pump for households, bringing the total cost in line with a new gas boiler. Other groups say the subsidy must be high enough to ensure a heat pump costs no more than a standard gas boiler.
Meanwhile Mike Childs, head of science, policy and research at Friends of the Earth, told i: “It’s absolutely clear that what the Government can’t do is force people to not replace their boilers, and yet spend thousands of pounds more on a more expensive heat pump when people don’t necessarily have that money in their bank account.”
“It’s clearly politically untenable and ridiculous to put out there.”
Full story
3) The EU’s Net Zero plan faces political blowback
Financial Times, 31 May 2021
For a growing number of EU governments and some green activists, Brussels ambitions’ risk throwing Europe’s poorest inhabitants further into energy poverty by making them shoulder the burden of the bloc’s rush towards net zero. The political blowback has been so fierce it is still not guaranteed that Brussels will go ahead with the plan.
Financial Times, 31 May 2021
For a growing number of EU governments and some green activists, Brussels ambitions’ risk throwing Europe’s poorest inhabitants further into energy poverty by making them shoulder the burden of the bloc’s rush towards net zero. The political blowback has been so fierce it is still not guaranteed that Brussels will go ahead with the plan.
At the start of the year, the German government quietly launched a novel system of carbon pricing that could revolutionise who pays for the cost of polluting in Europe.
Since January, the EU’s largest economy has introduced a de facto tax of €25 per tonne of carbon on petrol, diesel, heating oil and gas to ramp up the cost of dirty energy and incentivise greener ways of living. It means millions of Germans will be paying more at the petrol pumps and in their heating bills.
Germany’s experiment, known as the National Emissions Trading Scheme, is enlisting consumers to help the country meet its aggressive emissions reduction targets.
The German carbon pricing model may soon go Europe-wide. Brussels is using it as a blueprint for its plans to extend the emissions trading scheme — its carbon pricing market — to swaths of the economy this summer as part of its goal of becoming the world’s first net zero emissions continent by 2050.
Climate scientists and economists largely agree that putting a prohibitively high price on CO2 — using a market-driven system or more crude carbon taxes — is an indispensable way to encourage consumers and companies into switching to greener ways of living.
Frans Timmermans, EU vice-commissioner for the Green Deal, has hailed Europe’s carbon pricing instrument as a “cornerstone” of the EU’s environmental agenda “because it’s been so successful”.
“It has put a price on carbon,” he says. “It is a huge incentivising instrument and it is clear that we need to expand it.”
But even before the new scheme is introduced, it is generating a storm of opposition. For a growing number of EU governments and some green activists, Brussels ambitions’ risk throwing Europe’s poorest inhabitants further into energy poverty by making them shoulder the burden of the bloc’s rush towards net zero.
They fear that without an accompanying system of mass state subsidies and financial compensation, carbon pricing will be a regressive tool that will punish millions of Europe’s poorest families who live in rented or social housing and are stuck with petrol-driven cars — ultimately serving to undermine public support for the EU’s ambitious climate goals.
Europe’s politicians are acutely aware of the French experience, when President Emmanuel Macron’s 2018 plan for petrol tax rises prompted the gilets jaunes protest movement.
The political blowback has been so fierce it is still not guaranteed that Brussels will go ahead with the plan.
“Right now the people directly impacted by Europe’s carbon price are a few thousand companies rather than millions of people,” says Pascal Canfin, a French MEP and head of the European parliament’s environment committee. He warns that Brussels will have to offer ways to alleviate the hit on consumers who face higher electricity bills, or risk “creating a major economic shock for the poorest households”.
Full story (£)
Since January, the EU’s largest economy has introduced a de facto tax of €25 per tonne of carbon on petrol, diesel, heating oil and gas to ramp up the cost of dirty energy and incentivise greener ways of living. It means millions of Germans will be paying more at the petrol pumps and in their heating bills.
Germany’s experiment, known as the National Emissions Trading Scheme, is enlisting consumers to help the country meet its aggressive emissions reduction targets.
The German carbon pricing model may soon go Europe-wide. Brussels is using it as a blueprint for its plans to extend the emissions trading scheme — its carbon pricing market — to swaths of the economy this summer as part of its goal of becoming the world’s first net zero emissions continent by 2050.
Climate scientists and economists largely agree that putting a prohibitively high price on CO2 — using a market-driven system or more crude carbon taxes — is an indispensable way to encourage consumers and companies into switching to greener ways of living.
Frans Timmermans, EU vice-commissioner for the Green Deal, has hailed Europe’s carbon pricing instrument as a “cornerstone” of the EU’s environmental agenda “because it’s been so successful”.
“It has put a price on carbon,” he says. “It is a huge incentivising instrument and it is clear that we need to expand it.”
But even before the new scheme is introduced, it is generating a storm of opposition. For a growing number of EU governments and some green activists, Brussels ambitions’ risk throwing Europe’s poorest inhabitants further into energy poverty by making them shoulder the burden of the bloc’s rush towards net zero.
They fear that without an accompanying system of mass state subsidies and financial compensation, carbon pricing will be a regressive tool that will punish millions of Europe’s poorest families who live in rented or social housing and are stuck with petrol-driven cars — ultimately serving to undermine public support for the EU’s ambitious climate goals.
Europe’s politicians are acutely aware of the French experience, when President Emmanuel Macron’s 2018 plan for petrol tax rises prompted the gilets jaunes protest movement.
The political blowback has been so fierce it is still not guaranteed that Brussels will go ahead with the plan.
“Right now the people directly impacted by Europe’s carbon price are a few thousand companies rather than millions of people,” says Pascal Canfin, a French MEP and head of the European parliament’s environment committee. He warns that Brussels will have to offer ways to alleviate the hit on consumers who face higher electricity bills, or risk “creating a major economic shock for the poorest households”.
Full story (£)
4) Boiling over: Steve Baker, Boris Johnson and the cost of Net Zero
Maggie Pagano, Reaction Life, 29 May 2021
Move over Dominic Cummings. The gun-slinger the Prime Minister should be even more wary of is Steve Baker, the MP who is gathering ammunition for what promises to be a fascinating shoot-out to query one of his hallmark policies: reaching Net Zero by 2050.
Maggie Pagano, Reaction Life, 29 May 2021
Move over Dominic Cummings. The gun-slinger the Prime Minister should be even more wary of is Steve Baker, the MP who is gathering ammunition for what promises to be a fascinating shoot-out to query one of his hallmark policies: reaching Net Zero by 2050.
Baker has started his media blitz with an attack on the PM’s wheeze for gas boilers. In an article for the Sun this week, Baker warned that plans to ban gas boilers within 14 years and replace them with more eco-friendly heat pumps would land thousands of people in poverty.
What’s more, he warned that going ahead with such a barmy plan would trigger a political crisis bigger than the revolts over the Poll Tax in 1989.
Baker is particularly furious that householders who refuse to install new boilers by that date with greener – and more expensive – alternatives are being threatened with financial penalties of some sort. An earlier policy to fine those who refuse to replace them has apparently been dropped by Downing Street.
He writes: “The process is going to hit everyone but let us be under no illusion, the poorest will pay the highest price for these carbon neutral fantasies.” The most likely alternative to a gas boiler, he points out, is an electric heat pump which costs around £10,000 to install. In older properties, that might cost more because of the new fittings required.
Gas boilers are the G-spot of the government’s ambitious going green campaign. Pointing out that it is the poorest that will be hurt the worst is a clever populist move.
Yet Baker is right. The government’s plan to force people to replace boilers with some sort of sophisticated heat pump is – at the moment – simply daft. Sadly it reminds you of previous government attempts to plead with drivers – with financial incentives – to give up petrol and go for diesel instead. Look how that one turned out; disingenuous at best if not downright deceptive.
Baker has form in campaigning, and picking the ambiguities around boilers as his first line of attack is a way of bringing the whole issue of the exorbitant Net Zero programme to the red tops and stirring up support. He knows how to go for the gullet, having chaired the European Research Group (which pushed for a hard-Brexit) and, latterly, the Covid Recovery Group.
But Baker is taking on a bigger battle, one which will pit him against what can only be described as Borisnomics: the PM’s promise to go Net Zero by 2050 which could be one of the most expensive policy pledges in British economic history. In another article for The Critic magazine, he explained why the government’s climate change policy needs more investigation and why he had joined Lord Lawson’s Global Warming Policy Foundation. As he puts it, “one of the very few organisations that has been challenging current orthodoxies, one which government and officials have been trying hard to ignore.”
An engineer by training, Baker explained he felt compelled to look more closely at the Net Zero pledge after seeing the way green issues dominated the last election. He reckons the bill for decarbonising the economy is estimated to surpass £100,000 per household.
“Whitehall claims the number is lower, but won’t let anyone see their calculations. Figures like these may be tolerable for the zoomocracy who govern us today, but what of the rest of the population? Ordinary families — not least in the former “Red Wall” seats — are going tosuffer most.”
“The more I study, the more concerned I become that we are launching a ruinous economic experiment when we can least afford it. With their radical plan to fully decarbonise the entire economy by 2050 — “net zero” — that is just what Conservative ministers are embarked upon.”
And we know that decarbonising will cost billions – if not trillions – as no one has yet costed it. It won’t just be replacing heat pumps, that will be beyond the wallet of most UK householders, but electric cars, holidays abroad and so on.
The point about the debate that Baker is stirring up is precisely this: we don’t know the cost of going green. And it doesn’t matter how green you are or want to be, what we know is that the cost will fall on the taxpayer. There is no green god or goddess who will hand down the greenbacks in a free-for-all. The cost will fall on us, as we have already seen from rocketing electricity prices which have doubled over the last 20 years because of heavy government subsidies going to wind farm operators.
That is why Baker’s questions deserve proper rigorous due diligence and investigation. It is not honest to demand that householders replace their ageing gas or oil boilers with new green ones without government subsidies, at the very least.
The problem is very few people dare stand up and say they query what’s going on and it takes someone brave – some would say bonkers – like Baker to do so. By contrast, it’s easy for Boris and his Borisnomics to make these promises as he knows he will have been long gone when he has to face up to the bill.
Yet we need to know what the costs are of switching over from fossil fuels – and make the choice freely. If consumers are duped as they were over diesel, then they may well rise up and protest and they would be right to do so.
Core to this debate is technological innovation. Weirdly, it’s this that is being ignored in the race by politicians to be seen to be the greenest, with Johnson being one of the prime offenders.
As Carlos Tavares, boss of Stellantis, the world’s fifth biggest car maker, said a few weeks ago, one of the problems with government-issued deadline diktats is that engineers are not being given time to come up with more efficient technologies than electric batteries.
Like Baker, Tavares also warned that cars will become so expensive that only the wealthy will be able to afford them. We are nowhere near having sufficient renewable energy to power either the heat pumps or the batteries that charge the cars.
Hydrogen is still too expensive and other technologies are in their infancy. But they will come. They always do.
5) Andrew Stuttaford: The Costs of Net Zero — A Warning from Britain
National Review, 26 May 2021
In a last desperate, if unnecessary, effort to ensure that she would be remembered as one of Britain’s worst prime ministers, Theresa May ensured that the U.K. would be obliged by law to reach net-zero carbon emissions by 2050, a gesture that will make little or no difference to the climate, will be extraordinarily economically destructive, and will almost certainly end in miserable failure.
The U.K. was the first G7 country to make such a commitment, and it has not been the last. Lemmings are like that. Here in the U.S., the Biden administration boasts of having “set a course for the United States to tackle the climate crisis at home and abroad, reaching net zero emissions economy-wide by no later than 2050.” It will be worth Americans’ while to keep an eye on Britain’s trudge to the solar-powered uplands.
Here’s a small detail from a Guardian report from the time when May announced her initiative:
"Last week No 10 [Downing Street] dismissed claims from the chancellor [finance minister], Philip Hammond, that such a target would cost £1tn and could thus require spending cuts to public services."
If the economics of Britain’s net zero were hazy in 2019, they are not much clearer now. Prime Minister Boris Johnson is known neither for his command of detail nor for his willingness to confront unpleasant facts.
But unpleasant facts have a way of emerging.
And that brings me to gas boilers.
Bloomberg (from January):
"The adoption of heat pumps by homeowners and landlords will play a pivotal role in the U.K. meeting its commitment to achieve carbon neutrality by 2050. Progress on them can serve as a near-term benchmark for the nation as a whole. Prime Minister Boris Johnson wants to install 600,000 heat pumps annually by 2028, a 20-fold increase from the current rate in a country where less than 1% of the homes use the technology. That means convincing millions of people to rip out their oil and gas boilers and adopt a technology most people haven’t heard of—and many can’t afford . . . Heat pumps typically cost almost three times as much as a gas boiler, and they only work in well-insulated homes."
The U.K. is, of course, famous for its “well-insulated homes.”
The implications of this are sinking in. [...]
In The Critic, Conservative MP Steve Baker adds a few more details on the expense that comes with the Tories’ climate plans:
"Costs are already clocking up at an extraordinary rate, with consumers forced to pour about £11 billion into renewables through their energy bills. Large offshore windfarms can each receive three or four hundred million pounds in subsidy, every year. The largest, Hornsea 1, will take more than half a billion pounds a year. Larger ones are coming. It’s no wonder the drive for renewables has led to electricity prices nearly doubling, a rise that looks likely to continue for decades to come. This is only the start . . ."
Baker notes:
"If ministers don’t obtain and maintain the consent of the public for Net Zero now with full and frank explanations of the costs and changes ahead — as they relentlessly have not during the panic of the pandemic — eventually there will be a terrible revolt. Fear will not be enough. Even the “nudging” government scientists currently engaging in it confess that, “using fear as a means of control is not ethical” and it “smacks of totalitarianism”. Is this really who we want to be?"
Full post
7) How to beat stupid, green West: OPEC, Russia seen gaining more power with Shell Dutch ruling
Reuters, 1 June 2021
Climate activists who scored big against Western majors last week had some unlikely cheerleaders in the oil capitals of Saudi Arabia, Abu Dhabi and Russia.
Defeats in the courtroom and boardroom mean Royal Dutch Shell, ExxonMobil and Chevron are all under pressure to cut carbon emissions faster. That’s good news for the likes of Saudi Arabia’s national oil company Saudi Aramco, Abu Dhabi National Oil Company and Russia's Gazprom and Rosneft.
It means more business for them and the Saudi-led Organization of the Petroleum Exporting Countries (OPEC).
"Oil and gas demand is far from peaking and supplies will be needed, but international oil companies will not be allowed to invest in this environment, meaning national oil companies have to step in," said Amrita Sen from Energy Aspects consultancy.
Full story
8) How to beat stupid, green West II: Russia deepens China ties with expanded energy exports
Nikkei Asia, 6 January 2021
Doubling of coal trade aimed to supplant that with Australia
Russian President Vladimir Putin and his Chinese counterpart Xi Jinping tour the Kremlin after their talks in Moscow in June 2019. (Kremlin via Reuters)
MOSCOW/BEIJING -- Eyeing an opportunity to strengthen energy exports to China, Russia has launched new ventures and pipelines that will deliver coal, natural gas and petrochemicals to the world's largest energy consumer.
One of these projects envisions doubling Russia's coal exports to China -- enough to replace imports from Australia, with which China's relations have deteriorated.
Chinese President Xi Jinping and Russian President Vladimir Putin agreed to pursue greater cooperation across a range of fields, including large-scale energy and industrial projects, in a phone call on Dec. 28.
Describing 2020 as an "extraordinary year," Xi said that "true gold can stand the test of fire, and the difficult period has given more prominence to the unique strength and great value of the China-Russia relationship," according to China's official Xinhua News Agency.
"By strengthening strategic cooperation, China and Russia can effectively resist any attempt to suppress and divide the two countries, and meanwhile forge a solid shield to safeguard international fairness and justice," he said, suggesting that the two countries form a united front against headwinds from the U.S. and Europe.
Elgaugol, the company behind the Elga coal project in the Russian Far East, agreed on Dec. 15 to launch a joint venture with China's Fujian Guohang Ocean Shipping (Group) that will export metallurgical coal to China. The Elga project is expected to ship 30 million tons of coal to China in 2023, which would almost double Russia's total coal exports to China from about 33 million tons in 2019.
The countries' cooperation on coal is partly intended to deliver a blow to Australia. China has imposed restrictions on several Australian exports, including coal, after Canberra called for an independent inquiry into the origins of the coronavirus outbreak.
About a quarter of China's coal imports came from Australia in 2019. Elgaugol Director-General Aleksandr Isaev said his company will replace most of the shipments to China from the U.S. and Australia.
Full story
What’s more, he warned that going ahead with such a barmy plan would trigger a political crisis bigger than the revolts over the Poll Tax in 1989.
Baker is particularly furious that householders who refuse to install new boilers by that date with greener – and more expensive – alternatives are being threatened with financial penalties of some sort. An earlier policy to fine those who refuse to replace them has apparently been dropped by Downing Street.
He writes: “The process is going to hit everyone but let us be under no illusion, the poorest will pay the highest price for these carbon neutral fantasies.” The most likely alternative to a gas boiler, he points out, is an electric heat pump which costs around £10,000 to install. In older properties, that might cost more because of the new fittings required.
Gas boilers are the G-spot of the government’s ambitious going green campaign. Pointing out that it is the poorest that will be hurt the worst is a clever populist move.
Yet Baker is right. The government’s plan to force people to replace boilers with some sort of sophisticated heat pump is – at the moment – simply daft. Sadly it reminds you of previous government attempts to plead with drivers – with financial incentives – to give up petrol and go for diesel instead. Look how that one turned out; disingenuous at best if not downright deceptive.
Baker has form in campaigning, and picking the ambiguities around boilers as his first line of attack is a way of bringing the whole issue of the exorbitant Net Zero programme to the red tops and stirring up support. He knows how to go for the gullet, having chaired the European Research Group (which pushed for a hard-Brexit) and, latterly, the Covid Recovery Group.
But Baker is taking on a bigger battle, one which will pit him against what can only be described as Borisnomics: the PM’s promise to go Net Zero by 2050 which could be one of the most expensive policy pledges in British economic history. In another article for The Critic magazine, he explained why the government’s climate change policy needs more investigation and why he had joined Lord Lawson’s Global Warming Policy Foundation. As he puts it, “one of the very few organisations that has been challenging current orthodoxies, one which government and officials have been trying hard to ignore.”
An engineer by training, Baker explained he felt compelled to look more closely at the Net Zero pledge after seeing the way green issues dominated the last election. He reckons the bill for decarbonising the economy is estimated to surpass £100,000 per household.
“Whitehall claims the number is lower, but won’t let anyone see their calculations. Figures like these may be tolerable for the zoomocracy who govern us today, but what of the rest of the population? Ordinary families — not least in the former “Red Wall” seats — are going tosuffer most.”
“The more I study, the more concerned I become that we are launching a ruinous economic experiment when we can least afford it. With their radical plan to fully decarbonise the entire economy by 2050 — “net zero” — that is just what Conservative ministers are embarked upon.”
And we know that decarbonising will cost billions – if not trillions – as no one has yet costed it. It won’t just be replacing heat pumps, that will be beyond the wallet of most UK householders, but electric cars, holidays abroad and so on.
The point about the debate that Baker is stirring up is precisely this: we don’t know the cost of going green. And it doesn’t matter how green you are or want to be, what we know is that the cost will fall on the taxpayer. There is no green god or goddess who will hand down the greenbacks in a free-for-all. The cost will fall on us, as we have already seen from rocketing electricity prices which have doubled over the last 20 years because of heavy government subsidies going to wind farm operators.
That is why Baker’s questions deserve proper rigorous due diligence and investigation. It is not honest to demand that householders replace their ageing gas or oil boilers with new green ones without government subsidies, at the very least.
The problem is very few people dare stand up and say they query what’s going on and it takes someone brave – some would say bonkers – like Baker to do so. By contrast, it’s easy for Boris and his Borisnomics to make these promises as he knows he will have been long gone when he has to face up to the bill.
Yet we need to know what the costs are of switching over from fossil fuels – and make the choice freely. If consumers are duped as they were over diesel, then they may well rise up and protest and they would be right to do so.
Core to this debate is technological innovation. Weirdly, it’s this that is being ignored in the race by politicians to be seen to be the greenest, with Johnson being one of the prime offenders.
As Carlos Tavares, boss of Stellantis, the world’s fifth biggest car maker, said a few weeks ago, one of the problems with government-issued deadline diktats is that engineers are not being given time to come up with more efficient technologies than electric batteries.
Like Baker, Tavares also warned that cars will become so expensive that only the wealthy will be able to afford them. We are nowhere near having sufficient renewable energy to power either the heat pumps or the batteries that charge the cars.
Hydrogen is still too expensive and other technologies are in their infancy. But they will come. They always do.
5) Andrew Stuttaford: The Costs of Net Zero — A Warning from Britain
National Review, 26 May 2021
In a last desperate, if unnecessary, effort to ensure that she would be remembered as one of Britain’s worst prime ministers, Theresa May ensured that the U.K. would be obliged by law to reach net-zero carbon emissions by 2050, a gesture that will make little or no difference to the climate, will be extraordinarily economically destructive, and will almost certainly end in miserable failure.
The U.K. was the first G7 country to make such a commitment, and it has not been the last. Lemmings are like that. Here in the U.S., the Biden administration boasts of having “set a course for the United States to tackle the climate crisis at home and abroad, reaching net zero emissions economy-wide by no later than 2050.” It will be worth Americans’ while to keep an eye on Britain’s trudge to the solar-powered uplands.
Here’s a small detail from a Guardian report from the time when May announced her initiative:
"Last week No 10 [Downing Street] dismissed claims from the chancellor [finance minister], Philip Hammond, that such a target would cost £1tn and could thus require spending cuts to public services."
If the economics of Britain’s net zero were hazy in 2019, they are not much clearer now. Prime Minister Boris Johnson is known neither for his command of detail nor for his willingness to confront unpleasant facts.
But unpleasant facts have a way of emerging.
And that brings me to gas boilers.
Bloomberg (from January):
"The adoption of heat pumps by homeowners and landlords will play a pivotal role in the U.K. meeting its commitment to achieve carbon neutrality by 2050. Progress on them can serve as a near-term benchmark for the nation as a whole. Prime Minister Boris Johnson wants to install 600,000 heat pumps annually by 2028, a 20-fold increase from the current rate in a country where less than 1% of the homes use the technology. That means convincing millions of people to rip out their oil and gas boilers and adopt a technology most people haven’t heard of—and many can’t afford . . . Heat pumps typically cost almost three times as much as a gas boiler, and they only work in well-insulated homes."
The U.K. is, of course, famous for its “well-insulated homes.”
The implications of this are sinking in. [...]
In The Critic, Conservative MP Steve Baker adds a few more details on the expense that comes with the Tories’ climate plans:
"Costs are already clocking up at an extraordinary rate, with consumers forced to pour about £11 billion into renewables through their energy bills. Large offshore windfarms can each receive three or four hundred million pounds in subsidy, every year. The largest, Hornsea 1, will take more than half a billion pounds a year. Larger ones are coming. It’s no wonder the drive for renewables has led to electricity prices nearly doubling, a rise that looks likely to continue for decades to come. This is only the start . . ."
Baker notes:
"If ministers don’t obtain and maintain the consent of the public for Net Zero now with full and frank explanations of the costs and changes ahead — as they relentlessly have not during the panic of the pandemic — eventually there will be a terrible revolt. Fear will not be enough. Even the “nudging” government scientists currently engaging in it confess that, “using fear as a means of control is not ethical” and it “smacks of totalitarianism”. Is this really who we want to be?"
Full post
6) Joe Biden: Russian pipelines Da, American pipelines, Njet
Tom Finnerty, The Pipeline, 28 May 2021
Let me get this straight. Recently, Russian hackers shutdown North America's largest pipeline for days, massively disrupting the supply chain on the eastern seaboard and leading to shortages and price spikes. Eventually Colonial, Inc, the line's owner, paid a $5 million ransom to get it up and running again, a decision about which the Biden administration officially had no opinion. Of course, anyone with half a brain knows that's a lie, that they must have been working both sides, pushing Colonial to towards a course of action (presumably the one they took) on the one hand, and engaging their Russian counterparts about it on the other.
Well, the cyberterrorists got what they asked for, and now the Putin regime have gotten their dearest wish as well: the Biden Administration will allow construction of the Nord 2 pipeline project which will enable Russia to satisfy Germany's appetite for oil and gas (which has become more voracious since Germany embarked on its foolhardy Energiewende policy) without passing through Ukraine, a country where anti-Russian sentiment is rife. Moreover, Biden is waiving existing sanctions on the company building the pipeline and its president, Putin ally and former Stasi officer Matthias Warnig, to get the project done.
This is surprising, as Team Biden have been very open about their opposition to Nord Stream 2, fearing it would shift the balance of power in the region by getting Germany addicted to cheap Russian energy, boosting Russia's economy, and further subordinating the smaller countries in the region to the larger. Just this February, Jen Psaki was uncompromising when she articulated the administration's view on the matter:
"Our position on Nord Stream 2 has been very clear, and it remains unchanged. President Biden has made clear that Nord Stream 2 is a bad deal. It’s a bad deal because it divides Europe, it exposes Ukraine and Central Europe to... Russian manipulation, and because it goes against Europe’s own stated energy and security goals."
And then suddenly Bidenettes backed down. Something strange is going on here. Foreign policy analyst Rebeccah Heinrichs tweeted sarcastically, "How absolutely wild is it that Russians attacked a US pipeline while gas prices were already high and like two days after the US company pays the relatively small ransom Biden lifts sanctions on Nord Stream 2." It's definitely suspicious.
Then again, the two events might be unrelated. What is indisputable, however, is that this move looks ridiculous in light of Biden's anti-pipeline domestic policy. As Dan Foster put it, "Killing energy jobs in Oklahoma and creating them in St. Petersburg is so comically inept and villainous you could never even try it without the entire press in your back pocket."
Full post
Tom Finnerty, The Pipeline, 28 May 2021
Let me get this straight. Recently, Russian hackers shutdown North America's largest pipeline for days, massively disrupting the supply chain on the eastern seaboard and leading to shortages and price spikes. Eventually Colonial, Inc, the line's owner, paid a $5 million ransom to get it up and running again, a decision about which the Biden administration officially had no opinion. Of course, anyone with half a brain knows that's a lie, that they must have been working both sides, pushing Colonial to towards a course of action (presumably the one they took) on the one hand, and engaging their Russian counterparts about it on the other.
Well, the cyberterrorists got what they asked for, and now the Putin regime have gotten their dearest wish as well: the Biden Administration will allow construction of the Nord 2 pipeline project which will enable Russia to satisfy Germany's appetite for oil and gas (which has become more voracious since Germany embarked on its foolhardy Energiewende policy) without passing through Ukraine, a country where anti-Russian sentiment is rife. Moreover, Biden is waiving existing sanctions on the company building the pipeline and its president, Putin ally and former Stasi officer Matthias Warnig, to get the project done.
This is surprising, as Team Biden have been very open about their opposition to Nord Stream 2, fearing it would shift the balance of power in the region by getting Germany addicted to cheap Russian energy, boosting Russia's economy, and further subordinating the smaller countries in the region to the larger. Just this February, Jen Psaki was uncompromising when she articulated the administration's view on the matter:
"Our position on Nord Stream 2 has been very clear, and it remains unchanged. President Biden has made clear that Nord Stream 2 is a bad deal. It’s a bad deal because it divides Europe, it exposes Ukraine and Central Europe to... Russian manipulation, and because it goes against Europe’s own stated energy and security goals."
And then suddenly Bidenettes backed down. Something strange is going on here. Foreign policy analyst Rebeccah Heinrichs tweeted sarcastically, "How absolutely wild is it that Russians attacked a US pipeline while gas prices were already high and like two days after the US company pays the relatively small ransom Biden lifts sanctions on Nord Stream 2." It's definitely suspicious.
Then again, the two events might be unrelated. What is indisputable, however, is that this move looks ridiculous in light of Biden's anti-pipeline domestic policy. As Dan Foster put it, "Killing energy jobs in Oklahoma and creating them in St. Petersburg is so comically inept and villainous you could never even try it without the entire press in your back pocket."
Full post
7) How to beat stupid, green West: OPEC, Russia seen gaining more power with Shell Dutch ruling
Reuters, 1 June 2021
Climate activists who scored big against Western majors last week had some unlikely cheerleaders in the oil capitals of Saudi Arabia, Abu Dhabi and Russia.
Defeats in the courtroom and boardroom mean Royal Dutch Shell, ExxonMobil and Chevron are all under pressure to cut carbon emissions faster. That’s good news for the likes of Saudi Arabia’s national oil company Saudi Aramco, Abu Dhabi National Oil Company and Russia's Gazprom and Rosneft.
It means more business for them and the Saudi-led Organization of the Petroleum Exporting Countries (OPEC).
"Oil and gas demand is far from peaking and supplies will be needed, but international oil companies will not be allowed to invest in this environment, meaning national oil companies have to step in," said Amrita Sen from Energy Aspects consultancy.
Full story
8) How to beat stupid, green West II: Russia deepens China ties with expanded energy exports
Nikkei Asia, 6 January 2021
Doubling of coal trade aimed to supplant that with Australia
Russian President Vladimir Putin and his Chinese counterpart Xi Jinping tour the Kremlin after their talks in Moscow in June 2019. (Kremlin via Reuters)
MOSCOW/BEIJING -- Eyeing an opportunity to strengthen energy exports to China, Russia has launched new ventures and pipelines that will deliver coal, natural gas and petrochemicals to the world's largest energy consumer.
One of these projects envisions doubling Russia's coal exports to China -- enough to replace imports from Australia, with which China's relations have deteriorated.
Chinese President Xi Jinping and Russian President Vladimir Putin agreed to pursue greater cooperation across a range of fields, including large-scale energy and industrial projects, in a phone call on Dec. 28.
Describing 2020 as an "extraordinary year," Xi said that "true gold can stand the test of fire, and the difficult period has given more prominence to the unique strength and great value of the China-Russia relationship," according to China's official Xinhua News Agency.
"By strengthening strategic cooperation, China and Russia can effectively resist any attempt to suppress and divide the two countries, and meanwhile forge a solid shield to safeguard international fairness and justice," he said, suggesting that the two countries form a united front against headwinds from the U.S. and Europe.
Elgaugol, the company behind the Elga coal project in the Russian Far East, agreed on Dec. 15 to launch a joint venture with China's Fujian Guohang Ocean Shipping (Group) that will export metallurgical coal to China. The Elga project is expected to ship 30 million tons of coal to China in 2023, which would almost double Russia's total coal exports to China from about 33 million tons in 2019.
The countries' cooperation on coal is partly intended to deliver a blow to Australia. China has imposed restrictions on several Australian exports, including coal, after Canberra called for an independent inquiry into the origins of the coronavirus outbreak.
About a quarter of China's coal imports came from Australia in 2019. Elgaugol Director-General Aleksandr Isaev said his company will replace most of the shipments to China from the U.S. and Australia.
Full story
9) How to beat stupid, green West III: Putin bets on Asia to rely on Russia's cheap coal for decades to come
Bloomberg, 30 May 2021
Russia is spending more than $10 billion on a railroad that will help it ramp up coal exports to Asia. It's even mobilizing prisoners to speed up construction.
Bloomberg, 30 May 2021
Russia is spending more than $10 billion on a railroad that will help it ramp up coal exports to Asia. It's even mobilizing prisoners to speed up construction.
European governments are drawing up plans to phase out coal, U.S. coal-fired power plants are being shuttered as prices of clean energy plummet, and new Asian projects are being scrapped as lenders back away from the dirtiest fossil fuel.
And Russia? President Vladimir Putin’s government is spending more than $10 billion on railroad upgrades that will help boost exports of the commodity. Authorities will use prisoners to help speed the work, reviving a reviled Soviet-era tradition.
The project to modernize and expand railroads that run to Russia’s Far Eastern ports is part of a broader push to make the nation among the last standing in fossil fuel exports as other countries switch to greener alternatives. The government is betting that coal consumption will continue to rise in big Asian markets like China even as it dries up elsewhere.
“It's realistic to expect Asian demand for imported coal to increase if conditions are right,'' said Evgeniy Bragin, Deputy Chief Executive Officer at UMMC Holding, which owns a coal company in western Siberia’s Kuzbass region. “We need to keep developing and expanding the rail infrastructure so that we have the opportunity to export coal.’’
The latest 720 billion ruble ($9.8 billion) project to expand Russia’s two longest railroads — the Tsarist-era Trans-Siberian and Soviet Baikal-Amur Mainline that link western Russia with the Pacific Ocean— will aim to boost cargo capacity for coal and other goods to 182 million tons a year by 2024. Capacity already more than doubled to 144 million tons under a 520 billion ruble modernization plan that began in 2013. Putin urged faster progress on the next leg at a meeting with coal miners in March.
“Russia is trying to monetize its coal reserves fast enough that coal will contribute to GDP rather than being stuck in the ground,” said Madina Khrustaleva, an analyst who specializes in the region for TS Lombard in London.
Putin is betting that his country’s land border with China and good relations with President Xi Jinping make it a natural candidate to dominate exports to the nation that consumes more than half of the world’s coal. His case is helped by the fact that Australia, currently the number one coal exporter, is facing trade restrictions from China amid a diplomatic dispute over the origins of the coronavirus.
Full story
And Russia? President Vladimir Putin’s government is spending more than $10 billion on railroad upgrades that will help boost exports of the commodity. Authorities will use prisoners to help speed the work, reviving a reviled Soviet-era tradition.
The project to modernize and expand railroads that run to Russia’s Far Eastern ports is part of a broader push to make the nation among the last standing in fossil fuel exports as other countries switch to greener alternatives. The government is betting that coal consumption will continue to rise in big Asian markets like China even as it dries up elsewhere.
“It's realistic to expect Asian demand for imported coal to increase if conditions are right,'' said Evgeniy Bragin, Deputy Chief Executive Officer at UMMC Holding, which owns a coal company in western Siberia’s Kuzbass region. “We need to keep developing and expanding the rail infrastructure so that we have the opportunity to export coal.’’
The latest 720 billion ruble ($9.8 billion) project to expand Russia’s two longest railroads — the Tsarist-era Trans-Siberian and Soviet Baikal-Amur Mainline that link western Russia with the Pacific Ocean— will aim to boost cargo capacity for coal and other goods to 182 million tons a year by 2024. Capacity already more than doubled to 144 million tons under a 520 billion ruble modernization plan that began in 2013. Putin urged faster progress on the next leg at a meeting with coal miners in March.
“Russia is trying to monetize its coal reserves fast enough that coal will contribute to GDP rather than being stuck in the ground,” said Madina Khrustaleva, an analyst who specializes in the region for TS Lombard in London.
Putin is betting that his country’s land border with China and good relations with President Xi Jinping make it a natural candidate to dominate exports to the nation that consumes more than half of the world’s coal. His case is helped by the fact that Australia, currently the number one coal exporter, is facing trade restrictions from China amid a diplomatic dispute over the origins of the coronavirus.
Full story
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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