In this newsletter:
1) Europe’s energy crisis is about to get worse as winter arrives
Bloomberg, 28 November 2021
2) European gas shortage will push up fertiliser costs and food prices
Financial Times, 27 November 2021
3) Welcome to Net Zero: 25% of Scots live in fuel poverty while the poor are self-disconnecting from energy supply because they can no longer afford to pay their bills
The Scotsman, 29 November 2021
4) UK’s energy system is ‘broken’, warns industrial group
Financial Times, 29 November 2021
5) Andrew Montford: Blundering blindly into an energy emergency
The Conservative Woman, 29 November 2021
6) Llewellyn King: How Europe triggered an energy crisis, and now is paying dearly for it
Forbes, 27 November 2021
The Conservative Woman, 29 November 2021
6) Llewellyn King: How Europe triggered an energy crisis, and now is paying dearly for it
Forbes, 27 November 2021
7) Benny Peiser: After COP26, with a looming energy crisis, is there a realistic alternative to Net Zero?
8) Germany urges US Congress not to sanction Putin’s pipeline
Axios, 28 November 2021
9) Diane Francis: EU regulations may yet disarm Vladimir Putin’s pipeline weapon
Atlantic Council 28 November 2021
10) Douglas Murray: Climate extremists have terrified a generation into not wanting children
The Daily Telegraph, 27 November 2021
Atlantic Council 28 November 2021
10) Douglas Murray: Climate extremists have terrified a generation into not wanting children
The Daily Telegraph, 27 November 2021
Full details:
1) Europe’s energy crisis is about to get worse as winter arrives
Bloomberg, 28 November 2021
With the prospect of blackouts and fights for supplies, there’s a growing sense of foreboding before the cold weather has even really hit.
Bloomberg, 28 November 2021
With the prospect of blackouts and fights for supplies, there’s a growing sense of foreboding before the cold weather has even really hit.
Energy prices in Europe are repeatedly breaking records even before winter really kicks in, and one of the most damaging cost crunches in history is about to get worse as the temperature starts to drop.
A super price spike in the U.K. last month forced some industrial companies to cut production and seek state aid, a harbinger for what could play out widely in Europe just as it contends with a resurgence of the coronavirus. For governments, it could mean tension with neighboring countries by moving to protect supplies. For households, it could mean being asked to use less energy or even plan for rolling blackouts.
The trouble is that any fix is unlikely to come from the supply side any time soon, with exporters Russia piping only what it has to and Qatar saying it’s producing what it can. The energy industry is instead faced with relying on “demand destruction,” said Fabian Roenningen, an analyst at Rysted Energy.
“We have seen it over the last couple of months already, and in many industries, it will most likely continue and even increase,” he said from Oslo. “It’s just not profitable to operate for a lot of the players in the current market conditions.”
The outlook adds to the sense of foreboding in Europe. The region is back at the epicenter of the pandemic again with Covid-19 cases surging and fears about a new variant identified in South Africa swirling the globe. Restrictions are being tightened in some countries, while household budgets are being squeezed by rampant inflation. On top of that, freezing weather could mean the lights going out. A return to lockdown like in Austria would help curb power demand, though few governments want to do that.
France, Europe’s second biggest economy, is particularly at risk. The possibility of a chill in January and February is causing concern for the nation’s grid operator. Availability at nuclear stations, the workhorse of the French power system, is low after the pandemic delayed the maintenance of some reactors, according to a report on Nov. 22.
Power prices there are near a record as a cold blast creeps into France and is expected to take hold by Monday when workday demand starts to rise.
Last winter, the grid operator appealed to households to use less energy at peak times and activated some demand reduction contracts with manufacturers when things got really tight. The next step would be to reduce voltage across the network and then rolling blackouts of two hours per region as a last resort. All that would come ahead of a presidential election.
“If there’s a deep cold snap and there’s no wind, things could become tight given the lesser availability of nuclear plants and the recent closure of dispatchable generation assets using coal,” said Nicolas Goldberg, a senior manager in charge of energy at Colombus Consulting in Paris. “If it’s getting really cold and there’s no wind, it may become a problem.”
France is also a key exporter of electricity to neighboring countries, meaning that the effects of a crisis would reverberate in Germany, Spain, Italy and Britain. Maximum demand is expected to be 79.6 gigawatts on Monday, still some way off the record 102 gigawatts from February 2012.
The situation is already so dire this early in the winter season because of a blistering rally in natural gas prices. Stores of the fuel, used to heat homes and to generate electricity, are lower than usual and are being depleted quickly. Analysts have warned that gas stores could drop to zero this winter if cold weather boosts demand.
Rolling blackouts are a possibility, warned Jeremy Weir, chief executive officer of Trafigura Group, a Swiss commodity trading house on Nov. 16.
“If the weather gets cold in Europe there’s not going to be an easy supply solution, it’s going to need a demand solution,” said Adam Lewis, partner at trading house Hartree Partners LP.
On the supply side, what Russia does next will be key. President Vladimir Putin signaled he would help Europe with more supplies to stabilize the market, but while shipments have recovered after a slump at the start of November, they are low compared with last year. How much gas Russia sends to Europe in December remains an even bigger mystery.
The long-awaited start of the Nord Stream 2 pipeline to Germany from Russia would ease the continent’s energy crunch. The project is finished, but has run into regulatory hurdles and it’s unclear when flows will start.
Qatar, the world's biggest exporter of liquefied natural gas, says it’s already producing gas at full capacity. The Gulf nation, which has low production costs thanks to an abundance of easy-to-extract fuel, has ordered six more LNG ships from South Korea on top of four tankers purchased from China in October.
If things get really bad, countries could resort to curbing sales of natural gas to other regions. An even more extreme scenario could see them halt flows of gas and power to one another, sparking political acrimony and hitting economies.
The European Union has what it calls solidarity principles that are supposed to prevent any state blocking exports of power or gas and leaving another member short, especially when it comes to supplies for households.
The solidarity, though, has never been tested in a wide-scale crisis and grid operators say that they’re allowed to stop or alter power flows through inter-country cables if they have security of supply issues. When the nicknamed “Beast from the East” hit at the end of February 2018, it was quite late into the heating season. This year, it’s likely that a less severe weather event could have a similar impact.
“It shows how exposed Europe’s power system is to the volatility in commodity prices,” said Roenningen in Oslo. “In the short term, there’s not a lot that can be done.”
2) European gas shortage will push up fertiliser costs and food prices
Financial Times, 27 November 2021
Europe’s natural gas shortage is nearly certain to have more serious social and political impacts than the gasoline price increases that are proving uncomfortable for the Biden Administration.
The problem is one that goes beyond an immediate threat of energy poverty, or even the possibility of rolling blackouts in the event of prolonged cold spells.
Natural gas accounts for about 80 per cent of the variable costs of essential nitrogen fertiliser components such as ammonia. The ammonia price in Europe roughly tripled between January and March. Expensive fertiliser pressures food supplies.
Freezing in the dark while hungry does not make happy voters. At best, over the next year or two European farmers will have to absorb large increases in the price of fertiliser, perhaps skimping on applications of it. That leads to lower crop yields and so higher food prices.
If the prices for Europe’s natural gas imports remain high, part of its domestic fertiliser manufacturing industry could shut down for prolonged periods, or even close permanently. Already, in October, the choking gas market led to substantial temporary curtailments in European fertiliser production by companies including Yara, BASF, CF Industries and Fertiberia.
And no, that capacity could not simply be replaced by more intensive recycling of food waste, sewage, or raw manure. European recycling is already quite efficient.
It gets worse. The natural gas price increases and shortages affect the nitrogen-based components of farmer’s fertilisers. But there are now also significant price increases in other principal mineral fertilisers such as phosphate and potash, along with sulphur.
Europe imports most of those raw materials, along with an increasing proportion of its natural gas. Foreign producers, though, have been limiting exports this year to support their domestic agriculture. China, which is the world’s largest phosphate producer, suspended or severely limited exports of phosphate-rich fertilisers starting in late July. The cuts are expected to last until June of next year.
Russia has announced restrictions on nitrogen and phosphate fertiliser exports for six months effective from December 1. This in effect subsidises domestic farms, which both reduces the domestic prices of food and supports Russia’s grain exports.
Some of the Russian and Chinese phosphate exports will be filled by OCP, the Moroccan phosphate monopoly. Even before that added demand, OCP’s earnings before interest, tax, depreciation and amortisation surged by 48 per cent in the first half.
This is not the end of fertiliser trade restrictions that will affect Europe. Up to now, EU trade sanctions on the Lukashenko regime in Belarus have not included the higher grades of potash from the mines owned by Belaruskali, the state monopoly. On December 8, though, delayed US sanctions on Belarus kick in, which are intended to cut off nearly all its potash exports — about a fifth of the world supply.
Much Belarusian potash is exported through highly visible dedicated port facilities in Lithuania. This makes it hard for Belarus to avoid sanctions through this outlet. Belarus could export through rail links in Russia, but the country has its own significant potash producer, Uralkali.
One would guess that Uralkali and its friends will take care of their own interests first, which probably include avoiding the US sanctions regime. Along with any possible increase in Uralkali’s exports, some of the drop in Belaruskali’s market share could be made up by increased potash shipments from Nutrien, the Canadian fertiliser group which has huge potash resources in Saskatchewan.
Nutrien’s third-quarter report, issued in October, disclosed that its ebitda from potash sales was already up 131 per cent this year. Anticipating the sanctions on Belarus, Nutrien said it would “surge production to an annualised run-rate of 17m tonnes during the fourth quarter”. Not for free, of course: Nutrien’s prices for potash products sold outside North America have risen 105 per cent this year.
Of course fertiliser prices have surged in the past, only to decline again as producers increased capacity and farmers cut back on their fertiliser use. Spikes similar to what we are seeing now came in early 2008, peaking a few months before the global financial crisis.
The difference this time, particularly in Europe, is that climate policy means there is no finance available for natural gas production expansion. Farmers can skimp on potash and phosphate applications for a season or two, but yields will decline quickly without nitrogen fertilisers.
The conundrum of cutting carbon emissions while maintaining food production has not been solved.
A super price spike in the U.K. last month forced some industrial companies to cut production and seek state aid, a harbinger for what could play out widely in Europe just as it contends with a resurgence of the coronavirus. For governments, it could mean tension with neighboring countries by moving to protect supplies. For households, it could mean being asked to use less energy or even plan for rolling blackouts.
The trouble is that any fix is unlikely to come from the supply side any time soon, with exporters Russia piping only what it has to and Qatar saying it’s producing what it can. The energy industry is instead faced with relying on “demand destruction,” said Fabian Roenningen, an analyst at Rysted Energy.
“We have seen it over the last couple of months already, and in many industries, it will most likely continue and even increase,” he said from Oslo. “It’s just not profitable to operate for a lot of the players in the current market conditions.”
The outlook adds to the sense of foreboding in Europe. The region is back at the epicenter of the pandemic again with Covid-19 cases surging and fears about a new variant identified in South Africa swirling the globe. Restrictions are being tightened in some countries, while household budgets are being squeezed by rampant inflation. On top of that, freezing weather could mean the lights going out. A return to lockdown like in Austria would help curb power demand, though few governments want to do that.
France, Europe’s second biggest economy, is particularly at risk. The possibility of a chill in January and February is causing concern for the nation’s grid operator. Availability at nuclear stations, the workhorse of the French power system, is low after the pandemic delayed the maintenance of some reactors, according to a report on Nov. 22.
Power prices there are near a record as a cold blast creeps into France and is expected to take hold by Monday when workday demand starts to rise.
Last winter, the grid operator appealed to households to use less energy at peak times and activated some demand reduction contracts with manufacturers when things got really tight. The next step would be to reduce voltage across the network and then rolling blackouts of two hours per region as a last resort. All that would come ahead of a presidential election.
“If there’s a deep cold snap and there’s no wind, things could become tight given the lesser availability of nuclear plants and the recent closure of dispatchable generation assets using coal,” said Nicolas Goldberg, a senior manager in charge of energy at Colombus Consulting in Paris. “If it’s getting really cold and there’s no wind, it may become a problem.”
France is also a key exporter of electricity to neighboring countries, meaning that the effects of a crisis would reverberate in Germany, Spain, Italy and Britain. Maximum demand is expected to be 79.6 gigawatts on Monday, still some way off the record 102 gigawatts from February 2012.
The situation is already so dire this early in the winter season because of a blistering rally in natural gas prices. Stores of the fuel, used to heat homes and to generate electricity, are lower than usual and are being depleted quickly. Analysts have warned that gas stores could drop to zero this winter if cold weather boosts demand.
Rolling blackouts are a possibility, warned Jeremy Weir, chief executive officer of Trafigura Group, a Swiss commodity trading house on Nov. 16.
“If the weather gets cold in Europe there’s not going to be an easy supply solution, it’s going to need a demand solution,” said Adam Lewis, partner at trading house Hartree Partners LP.
On the supply side, what Russia does next will be key. President Vladimir Putin signaled he would help Europe with more supplies to stabilize the market, but while shipments have recovered after a slump at the start of November, they are low compared with last year. How much gas Russia sends to Europe in December remains an even bigger mystery.
The long-awaited start of the Nord Stream 2 pipeline to Germany from Russia would ease the continent’s energy crunch. The project is finished, but has run into regulatory hurdles and it’s unclear when flows will start.
Qatar, the world's biggest exporter of liquefied natural gas, says it’s already producing gas at full capacity. The Gulf nation, which has low production costs thanks to an abundance of easy-to-extract fuel, has ordered six more LNG ships from South Korea on top of four tankers purchased from China in October.
If things get really bad, countries could resort to curbing sales of natural gas to other regions. An even more extreme scenario could see them halt flows of gas and power to one another, sparking political acrimony and hitting economies.
The European Union has what it calls solidarity principles that are supposed to prevent any state blocking exports of power or gas and leaving another member short, especially when it comes to supplies for households.
The solidarity, though, has never been tested in a wide-scale crisis and grid operators say that they’re allowed to stop or alter power flows through inter-country cables if they have security of supply issues. When the nicknamed “Beast from the East” hit at the end of February 2018, it was quite late into the heating season. This year, it’s likely that a less severe weather event could have a similar impact.
“It shows how exposed Europe’s power system is to the volatility in commodity prices,” said Roenningen in Oslo. “In the short term, there’s not a lot that can be done.”
2) European gas shortage will push up fertiliser costs and food prices
Financial Times, 27 November 2021
Europe’s natural gas shortage is nearly certain to have more serious social and political impacts than the gasoline price increases that are proving uncomfortable for the Biden Administration.
The problem is one that goes beyond an immediate threat of energy poverty, or even the possibility of rolling blackouts in the event of prolonged cold spells.
Natural gas accounts for about 80 per cent of the variable costs of essential nitrogen fertiliser components such as ammonia. The ammonia price in Europe roughly tripled between January and March. Expensive fertiliser pressures food supplies.
Freezing in the dark while hungry does not make happy voters. At best, over the next year or two European farmers will have to absorb large increases in the price of fertiliser, perhaps skimping on applications of it. That leads to lower crop yields and so higher food prices.
If the prices for Europe’s natural gas imports remain high, part of its domestic fertiliser manufacturing industry could shut down for prolonged periods, or even close permanently. Already, in October, the choking gas market led to substantial temporary curtailments in European fertiliser production by companies including Yara, BASF, CF Industries and Fertiberia.
And no, that capacity could not simply be replaced by more intensive recycling of food waste, sewage, or raw manure. European recycling is already quite efficient.
It gets worse. The natural gas price increases and shortages affect the nitrogen-based components of farmer’s fertilisers. But there are now also significant price increases in other principal mineral fertilisers such as phosphate and potash, along with sulphur.
Europe imports most of those raw materials, along with an increasing proportion of its natural gas. Foreign producers, though, have been limiting exports this year to support their domestic agriculture. China, which is the world’s largest phosphate producer, suspended or severely limited exports of phosphate-rich fertilisers starting in late July. The cuts are expected to last until June of next year.
Russia has announced restrictions on nitrogen and phosphate fertiliser exports for six months effective from December 1. This in effect subsidises domestic farms, which both reduces the domestic prices of food and supports Russia’s grain exports.
Some of the Russian and Chinese phosphate exports will be filled by OCP, the Moroccan phosphate monopoly. Even before that added demand, OCP’s earnings before interest, tax, depreciation and amortisation surged by 48 per cent in the first half.
This is not the end of fertiliser trade restrictions that will affect Europe. Up to now, EU trade sanctions on the Lukashenko regime in Belarus have not included the higher grades of potash from the mines owned by Belaruskali, the state monopoly. On December 8, though, delayed US sanctions on Belarus kick in, which are intended to cut off nearly all its potash exports — about a fifth of the world supply.
Much Belarusian potash is exported through highly visible dedicated port facilities in Lithuania. This makes it hard for Belarus to avoid sanctions through this outlet. Belarus could export through rail links in Russia, but the country has its own significant potash producer, Uralkali.
One would guess that Uralkali and its friends will take care of their own interests first, which probably include avoiding the US sanctions regime. Along with any possible increase in Uralkali’s exports, some of the drop in Belaruskali’s market share could be made up by increased potash shipments from Nutrien, the Canadian fertiliser group which has huge potash resources in Saskatchewan.
Nutrien’s third-quarter report, issued in October, disclosed that its ebitda from potash sales was already up 131 per cent this year. Anticipating the sanctions on Belarus, Nutrien said it would “surge production to an annualised run-rate of 17m tonnes during the fourth quarter”. Not for free, of course: Nutrien’s prices for potash products sold outside North America have risen 105 per cent this year.
Of course fertiliser prices have surged in the past, only to decline again as producers increased capacity and farmers cut back on their fertiliser use. Spikes similar to what we are seeing now came in early 2008, peaking a few months before the global financial crisis.
The difference this time, particularly in Europe, is that climate policy means there is no finance available for natural gas production expansion. Farmers can skimp on potash and phosphate applications for a season or two, but yields will decline quickly without nitrogen fertilisers.
The conundrum of cutting carbon emissions while maintaining food production has not been solved.
3) Welcome to Net Zero: 25% of Scots live in fuel poverty while the poor are self-disconnecting from energy supply because they can no longer afford to pay their bills
The Scotsman, 29 November 2021
More than a quarter of Scots who have sought fuel poverty advice have admitted to rationing and self-disconnecting their home energy supply because they cannot afford to pay their bill.
The Scotsman, 29 November 2021
More than a quarter of Scots who have sought fuel poverty advice have admitted to rationing and self-disconnecting their home energy supply because they cannot afford to pay their bill.
The Lights on to Lights Off report by social enterprise Wise Group, found that despite a 139 per cent increase in people seeking debt relief support, there has only been a 41 per cent increase in debt relief given out by energy firms, which has resulted in more people disconnecting from the grid year-round.
The report highlighted the case of a former lawyer from Glasgow who spent most of his day in a sleeping bag while being unable to heat his home and a pensioner recovering from heart surgery at home with his chronically ill wife who could not keep the house warm.
The findings also included a disparity in the use of energy inefficient and expensive electric heating between households rationing energy and the ONS average.
People are choosing to disconnect themselves from their energy supplier due to being unable to pay bills.
Wise Group chief executive Sean Duffy said: “Almost a quarter of Scots live in fuel poverty. As a result, vulnerable people are choosing to self-disconnect their energy supply to save money, and as the temperatures drop, the decision to choose between eating and heating becomes increasingly stark.
”We have seen increasing numbers choosing to disconnect their energy supply, or at risk of self-disconnection for a variety of reasons. These households are hidden from the traditional ‘in debt’ description of the ‘vulnerable customer’ because they have chosen to disconnect.”
He added: “Behind these shocking figures are real stories of people wrapped in a duvet all day to keep warm, scared of sending their kids to school smelling of damp, unable to boil the kettle or cook their dinner, terrified of the next energy bill.
“Sadly, many communities in Glasgow, and across Scotland and the north east of England, are already leading the way in energy reduction – as they are simply unable to afford it. Often families in fuel poverty are paying the price of energy inefficiency in their home and higher prices for metered energy use.”
4) UK’s energy system is ‘broken’, warns industrial group
Financial Times, 29 November 2021
The UK’s energy system is “broken” and climate change targets without detailed policies threaten to drive industry overseas, the head of one of the country’s most advanced glass manufacturers has warned.
British heavy industries from steel to chemicals have been severely affected by the energy crisis in recent months with glass producers, whose goods tend to be lower-margin, among the worst hit. Earlier in November power prices were rising again, renewing pressure on industrial groups.
Steve Keeton, managing director of the UK subsidiary of Nippon Electric Glass, a large Japanese special glass manufacturer, said that the surge in energy prices would almost wipe out its operating profit this year.
The UK government’s ambition to race ahead in cutting emissions to net zero by 2050 without the required investment and policies to overhaul the power system threatens to create a bleak outlook for industry, he added.
“If the rules or regulations are such that you have to be carbon neutral first and you can’t see how you do it with the infrastructure supplied here then [production] might be done elsewhere,” Keeton said.
The Wigan-based site employs more than 300 people and makes glass fibres, which reinforce plastic to make composites used in wind turbine blades and lightweight cars — key for electric vehicles with heavy batteries. Last year it made an operating loss of £1.5m on turnover of £44m, according to Companies House accounts.
Brian Stewart, Keeton’s predecessor who now runs VitriTech, a developer of speciality glass products, echoed the warning that the future of manufacturing sites would be at risk because of high energy costs. “Non-UK owned glass manufacturers are putting pen to paper,” he said.
Saint-Gobain, Nippon Sheet Glass, Guardian Glass and Ardagh Group are other large foreign glass manufacturers with a presence in the UK.
Keeton said his company was paying a premium for “100 per cent renewable energy” but also having to fork out for higher electricity prices largely driven by a rise in gas prices. “The current system is broken,” he said.
He added that the government had been failing to create an environment for businesses to succeed in a fair and competitive manner.
As an example, he said the £30m-£40m cost of renewing a glass furnace would rise by about 50 per cent to add enough electrical capacity to decarbonise operations, while facing significant uncertainty about the future price of that electricity.
“I would argue that’s not the environment we can be successful in,” he said.
He urged the government — which has floated loans that industry says it does not want or need — to update the grid, bolster gas storage and form a long-term energy strategy.
The UK government said it was supporting energy-intensive businesses to cut their bills and reduce carbon emissions, including through a £315m fund, as well as planning to create a secure supply of energy via its Energy White Paper.
The government said: “Ministers and officials continue to engage constructively and regularly with industry to understand and to help mitigate the impacts of high global gas prices. Our priority is to ensure costs are managed and supplies of energy are maintained.”
Glass industry executives say that profits have been depressed by Chinese dumping over the past decade. The EU decided last year to impose tariffs between 20 and 100 per cent on glass fibre imports from China and Egypt.
The UK has not adopted similar duties post-Brexit, said Keeton, while developers of the country’s wind power projects buy cheap glass fibre from China since procurement requirements do not sufficiently encourage local or environmentally friendly sourcing, he said.
8) Germany urges US Congress not to sanction Putin’s pipeline
Axios, 28 November 2021
The German government has urged members of Congress not to sanction the Nord Stream 2 pipeline, arguing that doing so will "weaken" U.S. credibility and "ultimately damage transatlantic unity," according to documents obtained by Axios.
The report highlighted the case of a former lawyer from Glasgow who spent most of his day in a sleeping bag while being unable to heat his home and a pensioner recovering from heart surgery at home with his chronically ill wife who could not keep the house warm.
The findings also included a disparity in the use of energy inefficient and expensive electric heating between households rationing energy and the ONS average.
People are choosing to disconnect themselves from their energy supplier due to being unable to pay bills.
Wise Group chief executive Sean Duffy said: “Almost a quarter of Scots live in fuel poverty. As a result, vulnerable people are choosing to self-disconnect their energy supply to save money, and as the temperatures drop, the decision to choose between eating and heating becomes increasingly stark.
”We have seen increasing numbers choosing to disconnect their energy supply, or at risk of self-disconnection for a variety of reasons. These households are hidden from the traditional ‘in debt’ description of the ‘vulnerable customer’ because they have chosen to disconnect.”
He added: “Behind these shocking figures are real stories of people wrapped in a duvet all day to keep warm, scared of sending their kids to school smelling of damp, unable to boil the kettle or cook their dinner, terrified of the next energy bill.
“Sadly, many communities in Glasgow, and across Scotland and the north east of England, are already leading the way in energy reduction – as they are simply unable to afford it. Often families in fuel poverty are paying the price of energy inefficiency in their home and higher prices for metered energy use.”
4) UK’s energy system is ‘broken’, warns industrial group
Financial Times, 29 November 2021
The UK’s energy system is “broken” and climate change targets without detailed policies threaten to drive industry overseas, the head of one of the country’s most advanced glass manufacturers has warned.
British heavy industries from steel to chemicals have been severely affected by the energy crisis in recent months with glass producers, whose goods tend to be lower-margin, among the worst hit. Earlier in November power prices were rising again, renewing pressure on industrial groups.
Steve Keeton, managing director of the UK subsidiary of Nippon Electric Glass, a large Japanese special glass manufacturer, said that the surge in energy prices would almost wipe out its operating profit this year.
The UK government’s ambition to race ahead in cutting emissions to net zero by 2050 without the required investment and policies to overhaul the power system threatens to create a bleak outlook for industry, he added.
“If the rules or regulations are such that you have to be carbon neutral first and you can’t see how you do it with the infrastructure supplied here then [production] might be done elsewhere,” Keeton said.
The Wigan-based site employs more than 300 people and makes glass fibres, which reinforce plastic to make composites used in wind turbine blades and lightweight cars — key for electric vehicles with heavy batteries. Last year it made an operating loss of £1.5m on turnover of £44m, according to Companies House accounts.
Brian Stewart, Keeton’s predecessor who now runs VitriTech, a developer of speciality glass products, echoed the warning that the future of manufacturing sites would be at risk because of high energy costs. “Non-UK owned glass manufacturers are putting pen to paper,” he said.
Saint-Gobain, Nippon Sheet Glass, Guardian Glass and Ardagh Group are other large foreign glass manufacturers with a presence in the UK.
Keeton said his company was paying a premium for “100 per cent renewable energy” but also having to fork out for higher electricity prices largely driven by a rise in gas prices. “The current system is broken,” he said.
He added that the government had been failing to create an environment for businesses to succeed in a fair and competitive manner.
As an example, he said the £30m-£40m cost of renewing a glass furnace would rise by about 50 per cent to add enough electrical capacity to decarbonise operations, while facing significant uncertainty about the future price of that electricity.
“I would argue that’s not the environment we can be successful in,” he said.
He urged the government — which has floated loans that industry says it does not want or need — to update the grid, bolster gas storage and form a long-term energy strategy.
The UK government said it was supporting energy-intensive businesses to cut their bills and reduce carbon emissions, including through a £315m fund, as well as planning to create a secure supply of energy via its Energy White Paper.
The government said: “Ministers and officials continue to engage constructively and regularly with industry to understand and to help mitigate the impacts of high global gas prices. Our priority is to ensure costs are managed and supplies of energy are maintained.”
Glass industry executives say that profits have been depressed by Chinese dumping over the past decade. The EU decided last year to impose tariffs between 20 and 100 per cent on glass fibre imports from China and Egypt.
The UK has not adopted similar duties post-Brexit, said Keeton, while developers of the country’s wind power projects buy cheap glass fibre from China since procurement requirements do not sufficiently encourage local or environmentally friendly sourcing, he said.
5) Andrew Montford: Blundering blindly into an energy emergency
The Conservative Woman, 29 November 2021
IT looks as though the energy crisis is about to hit hard.
The Conservative Woman, 29 November 2021
IT looks as though the energy crisis is about to hit hard.
An industry expert has already warned that factories will probably have to be switched off over the winter to conserve scarce gas supplies for households. This followed another warning, that the electricity price cap is likely to be lifted by 40 per cent (yes, that is 40 per cent) in the spring. Net Zero Watch, where I work, has called on the Prime Minister to declare an emergency.
This worrying news finally seemed to have been enough to awaken at least one minister from his slumbers. Kwasi Kwarteng, the man in charge of the nation’s energy policy, took to Twitter to defend what he sees as the Johnson government’s achievements in reducing reliance on ‘volatile gas from abroad’ and ensuring ‘greater energy independence’.
‘£1.7billion for large nuclear!’ he trumpeted. ‘£210million for small modular nuclear!’ he beamed.
As a way of demonstrating the almost complete disconnect between Westminster and the needs of the country, this was hard to beat. Hinkley Point C nuclear power station will not come on stream for another five years at best, and the money recently awarded to Rolls-Royce, ostensibly for small modular nuclear, is best understood as a way to stop the company from sinking, taking with it the country’s independent nuclear deterrent. Don’t expect a Rolls-Royce SMR in your town any time soon.
And while SMRs are an exciting new technology, Rolls is a long, long way from market, apparently not even having a design yet. Others are much further forward. A company called Nuscale has completed design approval for its SMR in the USA and hopes to start building in a year or two. The Japanese are even further ahead, with a 30MW SMR up and running.
The point of small reactors is, of course, to try to reap economies of repetition, by building multiple units to identical design in a factory. Before that can happen, anyone who wants to build one here has to overcome the formidable – and probably insurmountable – barrier of the UK’s nuclear licensing regime. Established to deal with traditional large reactors – in other words, one-off designs – and testing every nut and bolt to destruction, this is a process that is entirely inappropriate for the new approach to nuclear.
Indeed, an industry insider recently told me that it would take ten years and cost £500million to get a £200million SMR through the process. In a sane world, we would simply adopt US and Japanese design approvals and start building. But Whitehall will never let that happen, and so it’s not just Rolls-Royce SMRs that are likely to be conspicuous by their absence in coming years.
Could gas save the day? The UK is lucky to be on top of a vast reservoir of the stuff; there are decades of our needs down there. Here again, the government stands in the way. The moratorium on fracking, introduced in 2019, remains in place, so the wellheads are closed and the pumps stand idle. Manufacturing industry, meanwhile, wonders whence its supplies are going to come. Even if we were to overcome the doubts of investors and the mobs of green protesters and get the onshore industry going again, regulation and planning constraints make it unlikely that meaningful quantities of gas would flow soon. This would be the work of six years, not six months.
Is there anything that could be done on shorter timescales? Well, you might think about replacing old gas-fired power stations with new ones. The improved efficiency would at least reduce demand for gas from electricity generators, but politicians of every shade of opinion having convinced the markets that the aim of policy is to shut these plants down for good, it is implausible that anyone will invest in new plant until we have an administration that rejects the scaremongering climate narrative.
In essence, then, there is nothing we can do about securing a domestic supply of energy – and therefore the nation’s energy security – for this winter, and probably not for several more winters. We have to hope that LNG (liquefied natural gas) imports can be secured for 2022 onwards in volumes sufficient to save the day.
That said, how much manufacturing industry, or how much of the energy supply industry, will survive the winter remains to be seen. The cold months promise to be interesting for everyone, and who knows what the country will look like by the spring? In a lecture in London last week, Steve Koonin, a former scientific adviser to President Obama, wondered whether western countries’ ill-considered climate policies might eventually lead to societal unrest or even breakdown. I think he’s right. Looking at the speed with which the energy crisis is unfolding in front of us, he may be proved correct much sooner than he thought.
Andrew Montford is Deputy Director of the Global Warming Policy Forum
This worrying news finally seemed to have been enough to awaken at least one minister from his slumbers. Kwasi Kwarteng, the man in charge of the nation’s energy policy, took to Twitter to defend what he sees as the Johnson government’s achievements in reducing reliance on ‘volatile gas from abroad’ and ensuring ‘greater energy independence’.
‘£1.7billion for large nuclear!’ he trumpeted. ‘£210million for small modular nuclear!’ he beamed.
As a way of demonstrating the almost complete disconnect between Westminster and the needs of the country, this was hard to beat. Hinkley Point C nuclear power station will not come on stream for another five years at best, and the money recently awarded to Rolls-Royce, ostensibly for small modular nuclear, is best understood as a way to stop the company from sinking, taking with it the country’s independent nuclear deterrent. Don’t expect a Rolls-Royce SMR in your town any time soon.
And while SMRs are an exciting new technology, Rolls is a long, long way from market, apparently not even having a design yet. Others are much further forward. A company called Nuscale has completed design approval for its SMR in the USA and hopes to start building in a year or two. The Japanese are even further ahead, with a 30MW SMR up and running.
The point of small reactors is, of course, to try to reap economies of repetition, by building multiple units to identical design in a factory. Before that can happen, anyone who wants to build one here has to overcome the formidable – and probably insurmountable – barrier of the UK’s nuclear licensing regime. Established to deal with traditional large reactors – in other words, one-off designs – and testing every nut and bolt to destruction, this is a process that is entirely inappropriate for the new approach to nuclear.
Indeed, an industry insider recently told me that it would take ten years and cost £500million to get a £200million SMR through the process. In a sane world, we would simply adopt US and Japanese design approvals and start building. But Whitehall will never let that happen, and so it’s not just Rolls-Royce SMRs that are likely to be conspicuous by their absence in coming years.
Could gas save the day? The UK is lucky to be on top of a vast reservoir of the stuff; there are decades of our needs down there. Here again, the government stands in the way. The moratorium on fracking, introduced in 2019, remains in place, so the wellheads are closed and the pumps stand idle. Manufacturing industry, meanwhile, wonders whence its supplies are going to come. Even if we were to overcome the doubts of investors and the mobs of green protesters and get the onshore industry going again, regulation and planning constraints make it unlikely that meaningful quantities of gas would flow soon. This would be the work of six years, not six months.
Is there anything that could be done on shorter timescales? Well, you might think about replacing old gas-fired power stations with new ones. The improved efficiency would at least reduce demand for gas from electricity generators, but politicians of every shade of opinion having convinced the markets that the aim of policy is to shut these plants down for good, it is implausible that anyone will invest in new plant until we have an administration that rejects the scaremongering climate narrative.
In essence, then, there is nothing we can do about securing a domestic supply of energy – and therefore the nation’s energy security – for this winter, and probably not for several more winters. We have to hope that LNG (liquefied natural gas) imports can be secured for 2022 onwards in volumes sufficient to save the day.
That said, how much manufacturing industry, or how much of the energy supply industry, will survive the winter remains to be seen. The cold months promise to be interesting for everyone, and who knows what the country will look like by the spring? In a lecture in London last week, Steve Koonin, a former scientific adviser to President Obama, wondered whether western countries’ ill-considered climate policies might eventually lead to societal unrest or even breakdown. I think he’s right. Looking at the speed with which the energy crisis is unfolding in front of us, he may be proved correct much sooner than he thought.
Andrew Montford is Deputy Director of the Global Warming Policy Forum
6) Llewellyn King: How Europe triggered an energy crisis, and now is paying dearly for it
Forbes, 27 November 2021
European countries are facing the highest prices for gas and electricity in history, leading to economic damage, and possible blackouts and frozen homes and businesses this winter.
Murphy’s law states, “Whatever can go wrong, will go wrong.” A theatrical adage takes another view, “It will be alright on the night.”
Europe has taken the second adage as its natural gas supply position, and it isn’t going well. European countries bet that natural gas spot prices would be low and that they could pick and choose and contain any commercial bad manners from supplier Russia with their combined market power. In short, “alright on the night.”
But Murphy’s law has prevailed.
Now Europe, from the Mediterranean Sea to the Arctic Circle, is wondering how it could all have gone so wrong so quickly and why European countries are facing the highest prices for gas and electricity in history, leading to economic damage, and possible blackouts and frozen homes and businesses this winter.
The temptation is to blame Russia for manipulating or, as some say, weaponizing the supply of gas to Europe. But didn’t Europe know what would happen? Russia isn’t known as a benevolent nation.
If Russia is to blame — which prima facie appears to be the case, as Europe gets fully half its natural gas from Russia — then the Europeans are to blame too. The gas buyers of Europe and their political masters bet that Russia needed their market more than they needed Russia’s gas.
It was a gamble and Europe lost. Russia won and has been cutting flows of gas into Europe, sometimes by two-thirds; then, capriciously, increasing them after the damage was done — increasing them to keep the markets see-sawing and prices and the future unsteady.
At the heart of that bad bet was the belief of many gas buyers that they could do better in the spot market than they could if bound to long-term, fixed contracts, some of them take-or-pay. Now the buyers who have long-term, fixed contracts are safe but worry if their suppliers will call force majeure and cut supplies.
So far, I am told in extensive telephone calls with traders, facilitators, lawyers, and an expert on global energy and diplomacy, that fixed contracts are holding firm. Even Gazprom, Russia’s giant energy company, needs to have some security in its gas exports.
Here are the elements of the energy crisis, which began in Europe but is buffeting the rest of the gas-dependent world.
First, world economic activity bounced back from its forced hibernation as a result of Covid-19 with more vigor than expected. From Brazil to China, factories and commercial activity boomed, increasing electricity demand and concurrently natural gas demand.
Then Europe suffered a wind drought. For most of the summer and the fall, wind speeds have been at some of the lowest levels for the past 60 years.
European Grid Destabilized
This has brought the stability of the European grid, with its growing wind dependence, into question and has been particularly damaging in the United Kingdom. There, where it was an act of faith that its offshore wind farms were dependable. But starting in April, the wind gave out, even in the North Sea — its gales transformed into zephyrs.
All this pointed up that the UK’s energy policy has been in chaos for decades. New nuclear has been delayed, and there was never much natural gas storage built in the UK, partly due to confidence in the spot market and the reliability of wind power. “They were caught at the end of the Russian pipeline,” one London trader told me.
At the other end of the scale, Malta (population about 540,000) in the Mediterranean has been an example of how a liquefied natural gas (LNG)-to-power and hedging strategy can avoid chaos and price spikes.
Malta doesn’t have much land for wind farms or utility-scale solar. When it decided to switch from heavy fuel oil to natural gas to fuel its power stations in 2013 (implemented in 2017), it realized that it needed to do a thorough examination of the perils of life as a gas-dependent nation.
The small island-state demanded a five-year, fixed-price for electricity and natural gas – the key was a fixed-supply contract with the State Oil Company of the Azerbaijan Republic (SOCAR), although none of the contracted gas comes from Azerbaijan. As a result, according to a source familiar with Maltese energy affairs, the island isn’t emitting 2 million tons of carbon annually at today’s price of 120 million euros a year. The source attributes this carbon emissions reduction to the 2013 set contract price for LNG.
Dorian Ducka, Albania’s former deputy minister of energy and industry, now an international energy consultant, says that Malta is in a better position than other EU islands which haven’t switched to gas. He singled out Spain’s Canary Islands for which, he says, LNG would have been a natural conversion. At present, power generators in the Canaries are emitting substantial carbon and particulate matter into the atmosphere and have some of the highest electricity prices in Europe.
The wind shortage this fall has unnerved Europe. Suddenly, gas is seen as vital to the future, not as a resource on the way out the door because of its climate-change impact.
Across Europe, renewables have lost ground in public acceptance as fuel bills have gone up and winter approaches. Nuclear is getting a fresh look, and France has already committed to boost it.
Last winter was particularly severe across Europe, which led to a larger drawdown in gas reserves than normal. While this winter is predicted to be less severe, already prices for gas, which are four times what they were in March, will make for a hard winter for many.
U.S. Role in European Crisis
The United States has also played a role in the European energy crisis. When President Donald Trump trashed the Iran nuclear deal, signed in 2015 by the United States, Iran, China, Russia, the UK, France, and Germany, and reimposed sanctions, anticipated Iranian gas didn’t flow into Europe.
Likewise, long U.S. opposition to Nord Stream 2 affected certification of the Russia-to-Germany pipeline. In May, the Biden administration reversed policy and waived its objections. The pipeline is now finished and awaits German certification — now in doubt with a new, greener government in Germany. Russia may choose to force that issue.
Full post
Forbes, 27 November 2021
European countries are facing the highest prices for gas and electricity in history, leading to economic damage, and possible blackouts and frozen homes and businesses this winter.
Murphy’s law states, “Whatever can go wrong, will go wrong.” A theatrical adage takes another view, “It will be alright on the night.”
Europe has taken the second adage as its natural gas supply position, and it isn’t going well. European countries bet that natural gas spot prices would be low and that they could pick and choose and contain any commercial bad manners from supplier Russia with their combined market power. In short, “alright on the night.”
But Murphy’s law has prevailed.
Now Europe, from the Mediterranean Sea to the Arctic Circle, is wondering how it could all have gone so wrong so quickly and why European countries are facing the highest prices for gas and electricity in history, leading to economic damage, and possible blackouts and frozen homes and businesses this winter.
The temptation is to blame Russia for manipulating or, as some say, weaponizing the supply of gas to Europe. But didn’t Europe know what would happen? Russia isn’t known as a benevolent nation.
If Russia is to blame — which prima facie appears to be the case, as Europe gets fully half its natural gas from Russia — then the Europeans are to blame too. The gas buyers of Europe and their political masters bet that Russia needed their market more than they needed Russia’s gas.
It was a gamble and Europe lost. Russia won and has been cutting flows of gas into Europe, sometimes by two-thirds; then, capriciously, increasing them after the damage was done — increasing them to keep the markets see-sawing and prices and the future unsteady.
At the heart of that bad bet was the belief of many gas buyers that they could do better in the spot market than they could if bound to long-term, fixed contracts, some of them take-or-pay. Now the buyers who have long-term, fixed contracts are safe but worry if their suppliers will call force majeure and cut supplies.
So far, I am told in extensive telephone calls with traders, facilitators, lawyers, and an expert on global energy and diplomacy, that fixed contracts are holding firm. Even Gazprom, Russia’s giant energy company, needs to have some security in its gas exports.
Here are the elements of the energy crisis, which began in Europe but is buffeting the rest of the gas-dependent world.
First, world economic activity bounced back from its forced hibernation as a result of Covid-19 with more vigor than expected. From Brazil to China, factories and commercial activity boomed, increasing electricity demand and concurrently natural gas demand.
Then Europe suffered a wind drought. For most of the summer and the fall, wind speeds have been at some of the lowest levels for the past 60 years.
European Grid Destabilized
This has brought the stability of the European grid, with its growing wind dependence, into question and has been particularly damaging in the United Kingdom. There, where it was an act of faith that its offshore wind farms were dependable. But starting in April, the wind gave out, even in the North Sea — its gales transformed into zephyrs.
All this pointed up that the UK’s energy policy has been in chaos for decades. New nuclear has been delayed, and there was never much natural gas storage built in the UK, partly due to confidence in the spot market and the reliability of wind power. “They were caught at the end of the Russian pipeline,” one London trader told me.
At the other end of the scale, Malta (population about 540,000) in the Mediterranean has been an example of how a liquefied natural gas (LNG)-to-power and hedging strategy can avoid chaos and price spikes.
Malta doesn’t have much land for wind farms or utility-scale solar. When it decided to switch from heavy fuel oil to natural gas to fuel its power stations in 2013 (implemented in 2017), it realized that it needed to do a thorough examination of the perils of life as a gas-dependent nation.
The small island-state demanded a five-year, fixed-price for electricity and natural gas – the key was a fixed-supply contract with the State Oil Company of the Azerbaijan Republic (SOCAR), although none of the contracted gas comes from Azerbaijan. As a result, according to a source familiar with Maltese energy affairs, the island isn’t emitting 2 million tons of carbon annually at today’s price of 120 million euros a year. The source attributes this carbon emissions reduction to the 2013 set contract price for LNG.
Dorian Ducka, Albania’s former deputy minister of energy and industry, now an international energy consultant, says that Malta is in a better position than other EU islands which haven’t switched to gas. He singled out Spain’s Canary Islands for which, he says, LNG would have been a natural conversion. At present, power generators in the Canaries are emitting substantial carbon and particulate matter into the atmosphere and have some of the highest electricity prices in Europe.
The wind shortage this fall has unnerved Europe. Suddenly, gas is seen as vital to the future, not as a resource on the way out the door because of its climate-change impact.
Across Europe, renewables have lost ground in public acceptance as fuel bills have gone up and winter approaches. Nuclear is getting a fresh look, and France has already committed to boost it.
Last winter was particularly severe across Europe, which led to a larger drawdown in gas reserves than normal. While this winter is predicted to be less severe, already prices for gas, which are four times what they were in March, will make for a hard winter for many.
U.S. Role in European Crisis
The United States has also played a role in the European energy crisis. When President Donald Trump trashed the Iran nuclear deal, signed in 2015 by the United States, Iran, China, Russia, the UK, France, and Germany, and reimposed sanctions, anticipated Iranian gas didn’t flow into Europe.
Likewise, long U.S. opposition to Nord Stream 2 affected certification of the Russia-to-Germany pipeline. In May, the Biden administration reversed policy and waived its objections. The pipeline is now finished and awaits German certification — now in doubt with a new, greener government in Germany. Russia may choose to force that issue.
Full post
7) Benny Peiser: After COP26, with a looming energy crisis, is there a realistic alternative to Net Zero?
A Zoom lecture by Dr Benny Peiser, director of Net Zero Watch, organised by the Irish Climate Science Forum (ICSF) and Climate Intelligence (CLINTEL).
A Zoom lecture by Dr Benny Peiser, director of Net Zero Watch, organised by the Irish Climate Science Forum (ICSF) and Climate Intelligence (CLINTEL).
The Zoom lecture takes place on Wednesday, 1 December 2021, at 7pm Dublin/London Time (GMT)
Benny Peiser: "After COP26, with a looming energy crisis, is there a realistic alternative to Net Zero?"
Dr Peiser will provide an overview of the geopolitics and conclusions of COP26, and why it failed to overcome the international and increasingly‐polarised divide. He will give some personal views on the current state of the climate debate and on how any dialogue on climate science is being eclipsed by the growing concerns about the cost of Net Zero. He will outline the deepening public divide about Britain's Net Zero plans, with particular reference to the immense technical, economic and political challenges of Boris Johnson's “Net‐Zero 2050” strategy. His views will be of keen interest to those involved in similar climate/energy debates in other counties, and his presentation will be followed by a Q&A and discussion session.
To register please email: icsfcomm@gmail.com
Benny Peiser: "After COP26, with a looming energy crisis, is there a realistic alternative to Net Zero?"
Dr Peiser will provide an overview of the geopolitics and conclusions of COP26, and why it failed to overcome the international and increasingly‐polarised divide. He will give some personal views on the current state of the climate debate and on how any dialogue on climate science is being eclipsed by the growing concerns about the cost of Net Zero. He will outline the deepening public divide about Britain's Net Zero plans, with particular reference to the immense technical, economic and political challenges of Boris Johnson's “Net‐Zero 2050” strategy. His views will be of keen interest to those involved in similar climate/energy debates in other counties, and his presentation will be followed by a Q&A and discussion session.
To register please email: icsfcomm@gmail.com
8) Germany urges US Congress not to sanction Putin’s pipeline
Axios, 28 November 2021
The German government has urged members of Congress not to sanction the Nord Stream 2 pipeline, arguing that doing so will "weaken" U.S. credibility and "ultimately damage transatlantic unity," according to documents obtained by Axios.
Why it matters: At a time when roughly 100,000 Russian troops are massing at its border, Ukraine views Nord Stream 2 as an existential threat to its security. The pipeline would circumvent Ukrainian transit infrastructure and deliver Russian gas directly to Germany, eliminating one of the last deterrents Ukraine has against an invasion.
Context: President Biden says he opposes the pipeline, but waived sanctions this spring in order to avoid alienating a key U.S. ally over a project that was already close to completion.
Biden and German Chancellor Angela Merkel struck a deal in July in which Germany agreed to take action — including pushing for sanctions at the EU level — if Russia "used energy as a weapon" against Ukraine and Europe.
Some experts say that's already happening, as Russia has stoked Europe's energy crisis and suggested that soaring gas prices could be alleviated by expediting Nord Stream 2's certification.
Dissatisfied Senate Republicans are now pushing for new sanctions as an amendment to the annual must-pass defense bill, with a vote possible as soon as this week.
Driving the news: In an attempt to reassure Congress, the German embassy in Washington privately detailed what retaliatory action against Russia could look like in a "non-paper," which is typically used in closed discussions to convey candid policy positions.
A Nov. 19 document marked as "classified" outlines steps Germany would take at the national level, including "strong public messages" condemning Russia's behavior; "assessing" the suspension of future political meetings; and reviewing "possible" restrictions on future Russian fossil fuel projects — not including Nord Stream 2.
At the EU level, the document says Germany is "actively participating in the process to identify options for additional restrictive measures," without going into further details.
The paper claims that Nord Stream 2 currently presents "no threat to Ukraine as long as reasonable gas transit is ensured," and refers to potential sanctions on the pipeline as "a victory for Putin" because it would divide Western allies.
Between the lines: The paper is intended to show how serious Germany is about its commitments in the July joint statement, which the Biden administration has held up as the basis for waiving sanctions. But it will do little to satisfy Ukraine or Nord Stream's critics on Capitol Hill.
An adviser to Ukrainian President Volodymyr Zelensky told Axios that Ukraine is "shocked, saddened, and confused" by Germany's efforts to save Russia's "most dangerous geopolitical project." Zelensky himself took to Twitter this month to urge senators to support sanctions.
Top Biden officials like energy envoy Amos Hochstein, who has previously said Russia is "getting close" to using energy as a weapon against Europe, have also been lobbying Democrats in Congress not to support sanctions in order to avoid straining relations with Germany.
Full story
Context: President Biden says he opposes the pipeline, but waived sanctions this spring in order to avoid alienating a key U.S. ally over a project that was already close to completion.
Biden and German Chancellor Angela Merkel struck a deal in July in which Germany agreed to take action — including pushing for sanctions at the EU level — if Russia "used energy as a weapon" against Ukraine and Europe.
Some experts say that's already happening, as Russia has stoked Europe's energy crisis and suggested that soaring gas prices could be alleviated by expediting Nord Stream 2's certification.
Dissatisfied Senate Republicans are now pushing for new sanctions as an amendment to the annual must-pass defense bill, with a vote possible as soon as this week.
Driving the news: In an attempt to reassure Congress, the German embassy in Washington privately detailed what retaliatory action against Russia could look like in a "non-paper," which is typically used in closed discussions to convey candid policy positions.
A Nov. 19 document marked as "classified" outlines steps Germany would take at the national level, including "strong public messages" condemning Russia's behavior; "assessing" the suspension of future political meetings; and reviewing "possible" restrictions on future Russian fossil fuel projects — not including Nord Stream 2.
At the EU level, the document says Germany is "actively participating in the process to identify options for additional restrictive measures," without going into further details.
The paper claims that Nord Stream 2 currently presents "no threat to Ukraine as long as reasonable gas transit is ensured," and refers to potential sanctions on the pipeline as "a victory for Putin" because it would divide Western allies.
Between the lines: The paper is intended to show how serious Germany is about its commitments in the July joint statement, which the Biden administration has held up as the basis for waiving sanctions. But it will do little to satisfy Ukraine or Nord Stream's critics on Capitol Hill.
An adviser to Ukrainian President Volodymyr Zelensky told Axios that Ukraine is "shocked, saddened, and confused" by Germany's efforts to save Russia's "most dangerous geopolitical project." Zelensky himself took to Twitter this month to urge senators to support sanctions.
Top Biden officials like energy envoy Amos Hochstein, who has previously said Russia is "getting close" to using energy as a weapon against Europe, have also been lobbying Democrats in Congress not to support sanctions in order to avoid straining relations with Germany.
Full story
9) Diane Francis: EU regulations may yet disarm Vladimir Putin’s pipeline weapon
Atlantic Council 28 November 2021
Russian President Vladimir Putin is currently pushing hard to secure fast track certification for his Nord Stream 2 pipeline, but these efforts will likely prove no match for the European Union’s anti-trust laws and regulatory system.
On November 17, a German regulator ordered Russia’s gas giant, Gazprom, to comply with EU anti-trust restrictions. Such compliance is non-negotiable and states that the owner of a pipeline cannot be the same entity as the owner of the natural gas it transports. Simply put, it is illegal in the EU for Gazprom to own the pipelines that carry its gas.
This requirement strikes at the heart of Putin’s pipeline scheme because it has the potential to drastically reduce his ability to control Europe’s energy market, play favorites, punish countries, and isolate Ukraine.
In line with EU regulatory requirements, Gazprom cannot direct its pipeline subsidiary to deploy abusive practices such as price fixing, predatory pricing, price discrimination, or monopolization.
These regulations mirror laws first developed by America in the late nineteenth century to reduce the power of the country’s so-called “robber baron” industrialists. They have since been widely adopted internationally to prevent similar abuses.
Gazprom argues that the official pipeline owner of Nord Stream 2 is a separate Swiss subsidiary. However, Moscow’s attempts to claim that this Swiss subsidiary is independent from Gazprom are about as credible as saying that Gazprom itself is independent from the Kremlin.
Besides, Switzerland is not part of the EU, which means its companies can flout EU laws and regulations. Instead, the regulator has insisted the pipeline be subject to German laws. In order to comply, Gazprom must transfer the pipeline to a German-based subsidiary. The entity must also be financially and legally independent from its Russian parent.
The regulator has suspended certification of the pipeline until Gazprom meets these requirements. This will likely postpone the process at least until March 2022 at the earliest. Further delays are anticipated as the European Commission must approve any new arrangement.
The significance of this regulatory regime should not be underestimated. The German regulator is autonomous and will supervise the new German Nord Stream 2 company on its territory. It has the power to prohibit and fine unlawful behavior.
More importantly, the European Commission must approve any new ownership arrangement and will likely require that the same de-linking of ownership (a process known as “unbundling”) be imposed on Gazprom in all EU countries. The EU Parliament has voted against Nord Stream 2 specifically because of concerns that Russian control of the pipeline would imperil the continent’s future energy security.
Besides European laws, Putin’s pipeline project also faces renewed opposition from the US Congress, which is preparing mandatory sanctions designed to stop the completed pipeline’s entry into service.
These sanctions feature as an amendment to the National Defense Authorisation Act, a sweeping defense policy bill that Congress passes every year. Congress approved similar sanctions a year ago, but US President Joe Biden changed course in spring 2021 in order to repair relations with Russia’s pipeline partner, Germany.
Encouraged by this US green light, the Kremlin has become noticeably bolder in its weaponization of energy supplies during the second half of 2021. Russia’s refusal to meet growing European demand helped spark an energy crisis and drove gas prices to record highs while leaving Europe’s gas storage facilities dangerously empty as the winter season approached.
With this show of strength, Putin appears to have been hoping to pressure Germany into the rapid certification of Nord Stream 2. However, he may have overplayed his hand.
The increasingly aggressive nature of Russia’s energy tactics in recent months has clearly unnerved some European leaders. A parallel Russian military build-up on the Ukrainian border has significantly added to these concerns.
The primary objective of the economically and logistically unnecessary Nord Stream 2 project has always been to bypass Ukraine. This will remove Moscow’s dependency on the Ukrainian transit system and potentially pave the way for a dramatic escalation in Putin’s seven-year military campaign to force Ukraine back into the Russian sphere of influence.
With a new government now entering office in Germany, few in Berlin wish to be accessories in a Kremlin plot to extinguish Ukrainian statehood. Olaf Scholz, Germany’s chancellor-in-waiting, has recently stated his support for Ukraine’s EU membership aspirations.
Meanwhile, the coalition agreement of the new German three-party government states, “the German government will continue to assist Ukraine in restoring its full territorial integrity and sovereignty,” a clear reference to the return of Crimea and the Donbas region from Russian occupation to Ukrainian control.
The Nord Stream 2 saga is still far from over. Putin will continue to push for certification and will use the many geopolitical tools at his disposal to do so, but he may have gone too far and has set off too many alarms to expect an easy ride. The regulatory obstacles that lie ahead may yet prove the undoing of his best-laid plans.
Atlantic Council 28 November 2021
Russian President Vladimir Putin is currently pushing hard to secure fast track certification for his Nord Stream 2 pipeline, but these efforts will likely prove no match for the European Union’s anti-trust laws and regulatory system.
On November 17, a German regulator ordered Russia’s gas giant, Gazprom, to comply with EU anti-trust restrictions. Such compliance is non-negotiable and states that the owner of a pipeline cannot be the same entity as the owner of the natural gas it transports. Simply put, it is illegal in the EU for Gazprom to own the pipelines that carry its gas.
This requirement strikes at the heart of Putin’s pipeline scheme because it has the potential to drastically reduce his ability to control Europe’s energy market, play favorites, punish countries, and isolate Ukraine.
In line with EU regulatory requirements, Gazprom cannot direct its pipeline subsidiary to deploy abusive practices such as price fixing, predatory pricing, price discrimination, or monopolization.
These regulations mirror laws first developed by America in the late nineteenth century to reduce the power of the country’s so-called “robber baron” industrialists. They have since been widely adopted internationally to prevent similar abuses.
Gazprom argues that the official pipeline owner of Nord Stream 2 is a separate Swiss subsidiary. However, Moscow’s attempts to claim that this Swiss subsidiary is independent from Gazprom are about as credible as saying that Gazprom itself is independent from the Kremlin.
Besides, Switzerland is not part of the EU, which means its companies can flout EU laws and regulations. Instead, the regulator has insisted the pipeline be subject to German laws. In order to comply, Gazprom must transfer the pipeline to a German-based subsidiary. The entity must also be financially and legally independent from its Russian parent.
The regulator has suspended certification of the pipeline until Gazprom meets these requirements. This will likely postpone the process at least until March 2022 at the earliest. Further delays are anticipated as the European Commission must approve any new arrangement.
The significance of this regulatory regime should not be underestimated. The German regulator is autonomous and will supervise the new German Nord Stream 2 company on its territory. It has the power to prohibit and fine unlawful behavior.
More importantly, the European Commission must approve any new ownership arrangement and will likely require that the same de-linking of ownership (a process known as “unbundling”) be imposed on Gazprom in all EU countries. The EU Parliament has voted against Nord Stream 2 specifically because of concerns that Russian control of the pipeline would imperil the continent’s future energy security.
Besides European laws, Putin’s pipeline project also faces renewed opposition from the US Congress, which is preparing mandatory sanctions designed to stop the completed pipeline’s entry into service.
These sanctions feature as an amendment to the National Defense Authorisation Act, a sweeping defense policy bill that Congress passes every year. Congress approved similar sanctions a year ago, but US President Joe Biden changed course in spring 2021 in order to repair relations with Russia’s pipeline partner, Germany.
Encouraged by this US green light, the Kremlin has become noticeably bolder in its weaponization of energy supplies during the second half of 2021. Russia’s refusal to meet growing European demand helped spark an energy crisis and drove gas prices to record highs while leaving Europe’s gas storage facilities dangerously empty as the winter season approached.
With this show of strength, Putin appears to have been hoping to pressure Germany into the rapid certification of Nord Stream 2. However, he may have overplayed his hand.
The increasingly aggressive nature of Russia’s energy tactics in recent months has clearly unnerved some European leaders. A parallel Russian military build-up on the Ukrainian border has significantly added to these concerns.
The primary objective of the economically and logistically unnecessary Nord Stream 2 project has always been to bypass Ukraine. This will remove Moscow’s dependency on the Ukrainian transit system and potentially pave the way for a dramatic escalation in Putin’s seven-year military campaign to force Ukraine back into the Russian sphere of influence.
With a new government now entering office in Germany, few in Berlin wish to be accessories in a Kremlin plot to extinguish Ukrainian statehood. Olaf Scholz, Germany’s chancellor-in-waiting, has recently stated his support for Ukraine’s EU membership aspirations.
Meanwhile, the coalition agreement of the new German three-party government states, “the German government will continue to assist Ukraine in restoring its full territorial integrity and sovereignty,” a clear reference to the return of Crimea and the Donbas region from Russian occupation to Ukrainian control.
The Nord Stream 2 saga is still far from over. Putin will continue to push for certification and will use the many geopolitical tools at his disposal to do so, but he may have gone too far and has set off too many alarms to expect an easy ride. The regulatory obstacles that lie ahead may yet prove the undoing of his best-laid plans.
10) Douglas Murray: Climate extremists have terrified a generation into not wanting children
The Daily Telegraph, 27 November 2021
Instead of combating this alarmist ideology with facts and reason, our authority figures have only pandered to it
The Daily Telegraph, 27 November 2021
Instead of combating this alarmist ideology with facts and reason, our authority figures have only pandered to it
In many ways it is a miracle that the human species has survived at all. Never mind the various natural disasters to which we have been prey, we have had to survive that greatest challenge to our species: ourselves. And yet somehow we are still here, thanks to people having children and raising families through the bleakest imaginable periods.
People still had children in the midst of the Black Death and the Great Plague. During centuries of pestilence and famine people still raised families. Even throughout the horrors of the 20th century and in the shadow of nuclear annihilation, humankind continued to express hope in the future through the gift of new life.
So it is not just strange but alarming that our era is seeing an increase in the number of people who believe that it is not just their choice, but their duty, to avoid having children. An analysis carried out earlier this year found that the “movement to not have children owing to fears over climate change is growing and impacting fertility rates quicker than any preceding trend in the field of fertility decline”.
It is an increasingly popular view, parroted by celebrities and politicians alike: “Why have children when we are facing climate change?”
The Left-wing US congresswoman Alexandria Ocasio-Cortez has said that young people are asking a “legitimate question” when they say: “Is it OK to still have children?”
Pop star Miley Cyrus has mulled the same dilemma. “We’re getting handed a piece of s--- planet,” she said in one interview, “and I refuse to hand that down to my child. Until I feel like my kid would live on an earth with fish in the water, I’m not bringing in another person to deal with that.”
One wonders what delegation of marine experts and fishermen might satisfy Miley’s concerns and assure her that the conditions for reproduction were indeed in place again.
Yet while it is easy for adults to scoff at such insane scare-mongering, the evidence suggests that many young people do not dismiss such talk, nor laugh at it. They are taking it deadly seriously. And the adults are failing to correct them.
In a speech to headteachers earlier this month, the headmistress of Benenden School, Samantha Price, said that teachers and other adults should take children’s climate worries far more seriously than they currently do. Rather than dismissing them, Mrs Price said that children should be encouraged so that their “passion” for subjects from sustainability through to equality does not “end up just going by the wayside”.
While Price drew the line at pupils following Greta Thunberg’s lead in abandoning lessons to make their point, she did say that their “ideas” on how to improve the climate should be raised within their schools.
And, in its way, Price’s speech was a prime example of the problem that a generation of adults have set up for the next generation. Children do not leap forth into the world with original worldviews, let alone planetary solutions of their own. They first repeat what they have been told and then tend to go from there.
For a generation, politicians and others have told children the most doom-laden stories possible. They have told them that the apocalypse is imminent. They have told them that they may never even get to grow up. They have told them that capitalism is destroying the planet and killing its inhabitants. They have failed to explain that capitalism has raised a billion people out of extreme poverty just in the 21st century so far.
Instead, they have taken the most fanatical rhetoric into the mainstream, claiming that our planet is on the cusp of annihilation and only a return to some sort of pre-industrial society could possibly save us.
They have given a megaphone to the most radical climate alarmists, and almost everybody in positions of authority has joined in parroting the same megaphoned message.
Only a few years ago Boris Johnson could be seen in these very pages telling people that we needed to cool the rhetoric on global warming. Fast-forward to earlier this month in Glasgow and the same Boris Johnson could be found telling Cop26 that we had just one minute left to save the planet.
Of course, young people do not just listen to celebrities and political leaders, they also notice what is permitted in the world around them. And in the UK at present you are allowed to get away with pretty much anything so long as you say that you are doing it in the name of saving the planet. Or “insulating” Britain’s homes, to use the most bathetic recent slogan of this offshoot of the extremists at Extinction Rebellion.
This alarmist movement is much closer to an end-time cult than anything resembling scientific activism. Their claims do not stand up to the most basic scrutiny. But if you are a member of Extinction Rebellion the problem is not what you say, the problem is that there is almost nothing you are not allowed to do.
You are allowed to prevent newspapers from leaving the print factories (as XR did last year) and receive the most minimal slap on the wrist for this assault on the free press. You can plonk yourself in the centre of the nation’s highways, trying to cause maximum disruption to an economy still desperately struggling to get back to normal.
And if you do that then the police will most likely just stand around, observing you with interest. Though woe betide any member of the public who does the job the police should do and haul these protestors out of their paths. We built up to this moment.
Two years ago XR extremists carried out criminal damage on the UK headquarters of the energy giant Shell. Rather surprisingly they were actually arrested and put on trial. The judge in their case declared that the majority of the defendants had absolutely no defence under the law. And yet a jury found all the accused “not guilty”.
One of the defendants crowed afterwards that the fact that no jury would convict them for their crimes was a sign of “truth”.
“A broken window is a just response to a breaking world,” he said, imperiously.
The verdict was less a sign of truth than it was an invitation to anarchy. Because of course if you decide that we are all about to die there is very little you might not permit to be done to stop it.
Instead of countering such extremism, figures in authority everywhere have been giving out the message that it is acceptable to do the most outrageous things, and make the most outrageous claims so long as you are doing so in defence of “the planet”.
At the centre of this is a terrific fallacy. For the younger generation are merely repeating what they have been told. And because they are young they are highly likely to become defeatist or depressed.
Not just because the situation has been presented as so appallingly bad. But because there is no way that they are yet informed enough to come up with the sort of innovative solutions that will be needed to allow our whole planet to some day come off fossil fuels. They inevitably bash against the limits of their own knowledge, because they have been taught what to think, rather than how to think.
And so this feeds this strange contemporary delusion that we must feel that the future is completely certain before we can consider bringing children into the world. Or that the optimal financial or climactic positions must be in place. And that unless this future is assured then reproduction is not just a pain but an outrage. As it happens we have countered this before.
In the autumn of 1939, C S Lewis preached a remarkable sermon at the University Church in Oxford. One part particularly stands out today.
For, as Lewis says, human life “has always been lived on the edge of a precipice”. We have always had to live with terrible shadows before us. But as he puts it: “If men had postponed the search for knowledge and beauty until they were secure, the search would never have begun.”
It is the same when it comes to reproduction. If our species had always waited for the optimal conditions to be in place for reproduction then we would not be here today. The conditions never were optimal. Other species might choose their own paths. But mankind is different from them.
As Lewis concludes: “[We] propound mathematical theorems in beleaguered cities, conduct metaphysical arguments in condemned cells, make jokes on scaffolds, discuss the last new poem while advancing to the walls of Quebec, and comb their hair at Thermopylae. This is not panache; it is our nature.”
That remains quite as true today as it was in 1939. Today’s climate extremists have terrified a generation. In order for there to be a next generation, this one should be not further terrified, but better educated and better consoled.
People still had children in the midst of the Black Death and the Great Plague. During centuries of pestilence and famine people still raised families. Even throughout the horrors of the 20th century and in the shadow of nuclear annihilation, humankind continued to express hope in the future through the gift of new life.
So it is not just strange but alarming that our era is seeing an increase in the number of people who believe that it is not just their choice, but their duty, to avoid having children. An analysis carried out earlier this year found that the “movement to not have children owing to fears over climate change is growing and impacting fertility rates quicker than any preceding trend in the field of fertility decline”.
It is an increasingly popular view, parroted by celebrities and politicians alike: “Why have children when we are facing climate change?”
The Left-wing US congresswoman Alexandria Ocasio-Cortez has said that young people are asking a “legitimate question” when they say: “Is it OK to still have children?”
Pop star Miley Cyrus has mulled the same dilemma. “We’re getting handed a piece of s--- planet,” she said in one interview, “and I refuse to hand that down to my child. Until I feel like my kid would live on an earth with fish in the water, I’m not bringing in another person to deal with that.”
One wonders what delegation of marine experts and fishermen might satisfy Miley’s concerns and assure her that the conditions for reproduction were indeed in place again.
Yet while it is easy for adults to scoff at such insane scare-mongering, the evidence suggests that many young people do not dismiss such talk, nor laugh at it. They are taking it deadly seriously. And the adults are failing to correct them.
In a speech to headteachers earlier this month, the headmistress of Benenden School, Samantha Price, said that teachers and other adults should take children’s climate worries far more seriously than they currently do. Rather than dismissing them, Mrs Price said that children should be encouraged so that their “passion” for subjects from sustainability through to equality does not “end up just going by the wayside”.
While Price drew the line at pupils following Greta Thunberg’s lead in abandoning lessons to make their point, she did say that their “ideas” on how to improve the climate should be raised within their schools.
And, in its way, Price’s speech was a prime example of the problem that a generation of adults have set up for the next generation. Children do not leap forth into the world with original worldviews, let alone planetary solutions of their own. They first repeat what they have been told and then tend to go from there.
For a generation, politicians and others have told children the most doom-laden stories possible. They have told them that the apocalypse is imminent. They have told them that they may never even get to grow up. They have told them that capitalism is destroying the planet and killing its inhabitants. They have failed to explain that capitalism has raised a billion people out of extreme poverty just in the 21st century so far.
Instead, they have taken the most fanatical rhetoric into the mainstream, claiming that our planet is on the cusp of annihilation and only a return to some sort of pre-industrial society could possibly save us.
They have given a megaphone to the most radical climate alarmists, and almost everybody in positions of authority has joined in parroting the same megaphoned message.
Only a few years ago Boris Johnson could be seen in these very pages telling people that we needed to cool the rhetoric on global warming. Fast-forward to earlier this month in Glasgow and the same Boris Johnson could be found telling Cop26 that we had just one minute left to save the planet.
Of course, young people do not just listen to celebrities and political leaders, they also notice what is permitted in the world around them. And in the UK at present you are allowed to get away with pretty much anything so long as you say that you are doing it in the name of saving the planet. Or “insulating” Britain’s homes, to use the most bathetic recent slogan of this offshoot of the extremists at Extinction Rebellion.
This alarmist movement is much closer to an end-time cult than anything resembling scientific activism. Their claims do not stand up to the most basic scrutiny. But if you are a member of Extinction Rebellion the problem is not what you say, the problem is that there is almost nothing you are not allowed to do.
You are allowed to prevent newspapers from leaving the print factories (as XR did last year) and receive the most minimal slap on the wrist for this assault on the free press. You can plonk yourself in the centre of the nation’s highways, trying to cause maximum disruption to an economy still desperately struggling to get back to normal.
And if you do that then the police will most likely just stand around, observing you with interest. Though woe betide any member of the public who does the job the police should do and haul these protestors out of their paths. We built up to this moment.
Two years ago XR extremists carried out criminal damage on the UK headquarters of the energy giant Shell. Rather surprisingly they were actually arrested and put on trial. The judge in their case declared that the majority of the defendants had absolutely no defence under the law. And yet a jury found all the accused “not guilty”.
One of the defendants crowed afterwards that the fact that no jury would convict them for their crimes was a sign of “truth”.
“A broken window is a just response to a breaking world,” he said, imperiously.
The verdict was less a sign of truth than it was an invitation to anarchy. Because of course if you decide that we are all about to die there is very little you might not permit to be done to stop it.
Instead of countering such extremism, figures in authority everywhere have been giving out the message that it is acceptable to do the most outrageous things, and make the most outrageous claims so long as you are doing so in defence of “the planet”.
At the centre of this is a terrific fallacy. For the younger generation are merely repeating what they have been told. And because they are young they are highly likely to become defeatist or depressed.
Not just because the situation has been presented as so appallingly bad. But because there is no way that they are yet informed enough to come up with the sort of innovative solutions that will be needed to allow our whole planet to some day come off fossil fuels. They inevitably bash against the limits of their own knowledge, because they have been taught what to think, rather than how to think.
And so this feeds this strange contemporary delusion that we must feel that the future is completely certain before we can consider bringing children into the world. Or that the optimal financial or climactic positions must be in place. And that unless this future is assured then reproduction is not just a pain but an outrage. As it happens we have countered this before.
In the autumn of 1939, C S Lewis preached a remarkable sermon at the University Church in Oxford. One part particularly stands out today.
For, as Lewis says, human life “has always been lived on the edge of a precipice”. We have always had to live with terrible shadows before us. But as he puts it: “If men had postponed the search for knowledge and beauty until they were secure, the search would never have begun.”
It is the same when it comes to reproduction. If our species had always waited for the optimal conditions to be in place for reproduction then we would not be here today. The conditions never were optimal. Other species might choose their own paths. But mankind is different from them.
As Lewis concludes: “[We] propound mathematical theorems in beleaguered cities, conduct metaphysical arguments in condemned cells, make jokes on scaffolds, discuss the last new poem while advancing to the walls of Quebec, and comb their hair at Thermopylae. This is not panache; it is our nature.”
That remains quite as true today as it was in 1939. Today’s climate extremists have terrified a generation. In order for there to be a next generation, this one should be not further terrified, but better educated and better consoled.
The London-based Net Zero Watch is a campaign group set up to highlight and discuss the serious implications of expensive and poorly considered climate change policies. The Net Zero Watch newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.netzerowatch.com.
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