In this newsletter:
1) Green Britain: Six in ten British factories at risk of going under as energy bills soar
Bloomberg, 3 September 2022
2) Conservative-run council loses power after £1bn spree on green energy
The Times, 3 September 2022
3) Christmas goes dark as councils cancel Christmas lights
Sunday Express, 4 September 2022
4) John Constable: Know why your fuel bills are soaring? 20 years of 'renewables' lies
Daily Express, 2 September 2022
Sunday Express, 4 September 2022
4) John Constable: Know why your fuel bills are soaring? 20 years of 'renewables' lies
Daily Express, 2 September 2022
5) Green transition will deliver repeat inflation shocks, TCorp’s chief economist warns
The Australian, 4 September 2022
6) Dominic Lawson: Russia, like the USSR, will stand or fall on oil and gas
The Sunday Times, 4 September 2022
The Australian, 4 September 2022
6) Dominic Lawson: Russia, like the USSR, will stand or fall on oil and gas
The Sunday Times, 4 September 2022
7) German Greens deny report of U-turn on nuclear plant extensions
Bloomberg, 4 September 2022
Bloomberg, 4 September 2022
8) No Atlantic hurricanes this summer for first time since 1941
The Epoch Times, 1 September 2022
The Epoch Times, 1 September 2022
9) “Smart” thermostat locks customers out, declares “energy emergency”
Reclaim the Net, 2 September 2022
Reclaim the Net, 2 September 2022
Full details:
1) Green Britain: Six in ten British factories at risk of going under as energy bills soar
Bloomberg, 3 September 2022
Bloomberg, 3 September 2022
Soaring energy bills are threatening to put six in 10 British manufacturers out of business, according to a survey that lays bare the extent of the crisis facing the next prime minister.
MakeUK, the lobby group for UK factories, said that nearly half of manufacturers have experienced a jump in electricity bills of more than 100% in the past year.
“The current crisis is leaving businesses facing a stark choice,” the report said. “Cut production or shut up shop altogether if help does not come soon.”
The UK’s new prime minister will be announced on Monday, with Liz Truss expected to beat Rishi Sunak, her rival in the Conservative Party leadership race. The government is under intense pressure to announce a wider package of support to help consumers and businesses cope with an unprecedented surge in global energy costs.
Britain’s factory sector is already in decline, according to a purchasing managers’ index published by S&P Global this week. MakeUK’s survey said that 13% of factories now have reduced hours of operation or are avoiding peak periods, while 7% are halting production for longer stretches.
“Emergency action is needed by the new government,” said Stephen Phipson, MakeUK’s chief executive officer. “We are already lagging behind our global competitors.”
2) Conservative-run council loses power after £1bn spree on green energy
The Times, 3 September 2022
MakeUK, the lobby group for UK factories, said that nearly half of manufacturers have experienced a jump in electricity bills of more than 100% in the past year.
“The current crisis is leaving businesses facing a stark choice,” the report said. “Cut production or shut up shop altogether if help does not come soon.”
The UK’s new prime minister will be announced on Monday, with Liz Truss expected to beat Rishi Sunak, her rival in the Conservative Party leadership race. The government is under intense pressure to announce a wider package of support to help consumers and businesses cope with an unprecedented surge in global energy costs.
Britain’s factory sector is already in decline, according to a purchasing managers’ index published by S&P Global this week. MakeUK’s survey said that 13% of factories now have reduced hours of operation or are avoiding peak periods, while 7% are halting production for longer stretches.
“Emergency action is needed by the new government,” said Stephen Phipson, MakeUK’s chief executive officer. “We are already lagging behind our global competitors.”
2) Conservative-run council loses power after £1bn spree on green energy
The Times, 3 September 2022
Ministers have stripped a council of control of its finances amid “serious concerns” about financial mismanagement after it invested nearly a billion pounds of public money in green energy schemes.
Conservative-run Thurrock council in Essex borrowed £815 million from the Treasury and other councils over seven years – nearly four times its annual spending on services – to invest in renewable energy projects, including more than 50 solar farms.
Yesterday the Department for Levelling Up, Housing and Communities said it had “serious concerns about the financial management of the council and the risk this poses to local services”.
The department has handed control of the borough’s finances to Essex county council, which has been given three months to report on the scale of the problem.
The decision led to the resignation yesterday of Rob Gledhill, the Tory leader of the council. He said: “Whilst I welcome the support from Her Majesty’s government it has become clear over the past few months that the situation regarding council investments, and subsequently its finances, has not been as reported.”
The decision to strip the council of its powers was made by Greg Clark, the levelling up secretary, who has responsibility for local government matters. It follows an investigation by the Bureau of Investigative Journalism, which said last month that £138 million of public money was unaccounted for.
It also reported that consultants hired by the council had discovered that the solar farms were not worth enough for Thurrock to recoup the money it had invested, with the shortfall being as much as £200 million, the equivalent of more than £3,000 for every home in the borough.
Full story
9) “Smart” thermostat locks customers out, declares “energy emergency”
Reclaim the Net, 2 September 2022
Thousands of Xcel customers in Colorado were locked out of their smart thermostats, meaning they had no control of the temperatures in their homes. The company said the problem was caused by an “energy emergency.”
Tony Talarico explained how he was not able to turn up air conditioning while at his partner’s home in Arvada.
“I mean, it was 90 out, and it was right during the peak period,” Talarico said. “It was hot.”
The thermostat displayed a message saying he could not turn up the cooling because he had been locked out due to an energy emergency.
“Normally, when we see a message like that, we’re able to override it,” Talarico said. “In this case, we weren’t. So, our thermostat was locked in at 78 or 79.”
Social media was filled with thousands of such complaints on Tuesday, some saying they had been locked out of the thermostat at temperatures as high as 88 degrees.
Speaking to Contact Denver7, Xcel confirmed that some customers had been locked out of their thermostats for hours on Tuesday. Vice President of Customer Solutions and Innovation Emmett Romine said that the 22,000 customers who could not control their thermostats had registered for the Colorado AC Rewards program.
“It’s a voluntary program. Let’s remember that this is something that customers choose to be a part of based on the incentives,” he said. For participating in the program, customers received $100 in credit and $25 annually.
According to Romine, by signing up to the program customers agreed to give up some control in order to save money, energy, and make the system more reliable.
“So, it helps everybody for people to participate in these programs. It is a bit uncomfortable for a short period of time, but it’s very, very helpful,” said Romine.
He added that it was the first time in the six years since the program was launched that customers were not able to override their thermostats. He said there was an “energy emergency” caused by hot weather, heavy usage of air conditioners, and an unexpected outage in Pueblo.
But customers like Tolarico did not know that the company had that much control.
“To me, an emergency means there is, you know, life, limb, or, you know, some other danger out there — some, you know, massive wildfires,” Talarico said. “Even if it’s a once-in-a-blue-moon situation, it just doesn’t sit right with us to not be able to control our own thermostat in our house.”
see also Andrew Montford: Survival of the richest: Smart homes and energy rationing (pdf)
Conservative-run Thurrock council in Essex borrowed £815 million from the Treasury and other councils over seven years – nearly four times its annual spending on services – to invest in renewable energy projects, including more than 50 solar farms.
Yesterday the Department for Levelling Up, Housing and Communities said it had “serious concerns about the financial management of the council and the risk this poses to local services”.
The department has handed control of the borough’s finances to Essex county council, which has been given three months to report on the scale of the problem.
The decision led to the resignation yesterday of Rob Gledhill, the Tory leader of the council. He said: “Whilst I welcome the support from Her Majesty’s government it has become clear over the past few months that the situation regarding council investments, and subsequently its finances, has not been as reported.”
The decision to strip the council of its powers was made by Greg Clark, the levelling up secretary, who has responsibility for local government matters. It follows an investigation by the Bureau of Investigative Journalism, which said last month that £138 million of public money was unaccounted for.
It also reported that consultants hired by the council had discovered that the solar farms were not worth enough for Thurrock to recoup the money it had invested, with the shortfall being as much as £200 million, the equivalent of more than £3,000 for every home in the borough.
Full story
3) Christmas goes dark as councils cancel Christmas lights
Sunday Express, 4 September 2022
Sunday Express, 4 September 2022
Skyrocketing energy bills have already impacted Christmas celebrations up and down the country as councils cancel light switch-on events.
As councils tackle ever-increasing energy bills, city centres will be forced to sacrifice some of the usual festive cheer this winter. The traditional Christmas light switch-on sees towns turn on their festive illuminations with market stalls, small fairground rides and musical entertainment.
However, as families and businesses begin to struggle to afford their energy bills for the upcoming winter, councils are facing pressure to justify the cost of such celebrations.
Guildford Borough Council has cancelled its event with leader Joss Bigmore, saying it was due the council facing “significant financial challenges”.
Mr Bigmore added that the council “cannot afford or justify value for money for such an additional significant cost”.
Other councils including Budleigh Salterton in Devonshire has cancelled its switch-on because the council “could not take on the cost of the lights in the economic climate”.
According to Ely in Cambridgeshire, the council typically spends £9,000 on its annual event and can no longer justify spending such money amid the cost of living crisis.
Full story
4) John Constable: Know why your fuel bills are soaring? 20 years of 'renewables' lies
Daily Express, 2 September 2022
As councils tackle ever-increasing energy bills, city centres will be forced to sacrifice some of the usual festive cheer this winter. The traditional Christmas light switch-on sees towns turn on their festive illuminations with market stalls, small fairground rides and musical entertainment.
However, as families and businesses begin to struggle to afford their energy bills for the upcoming winter, councils are facing pressure to justify the cost of such celebrations.
Guildford Borough Council has cancelled its event with leader Joss Bigmore, saying it was due the council facing “significant financial challenges”.
Mr Bigmore added that the council “cannot afford or justify value for money for such an additional significant cost”.
Other councils including Budleigh Salterton in Devonshire has cancelled its switch-on because the council “could not take on the cost of the lights in the economic climate”.
According to Ely in Cambridgeshire, the council typically spends £9,000 on its annual event and can no longer justify spending such money amid the cost of living crisis.
Full story
4) John Constable: Know why your fuel bills are soaring? 20 years of 'renewables' lies
Daily Express, 2 September 2022
THE UK's energy crisis has been in the making for more than 20 years and is the result of the incompetent policies of Mr Blair, Mr Brown, Mr Cameron, Mrs May, and Mr Johnson, and all their hapless energy minsters and advisors too numerous to name.
Today’s rapidly rising household electricity bills are a consequence of unrealistic energy and climate policies that forced us to use low quality and unreliable renewable energy, giving the illusion of diversity and security, while discouraging the high-quality sources such as coal, nuclear, and gas that provide a truly robust and secure supply. This has left the UK critically dependent on one high quality fuel alone, natural gas, much of which now has to be imported. It really is that simple, and with the Ukraine war, those chickens have come home to roost.
How did this happen? And how can we have an energy cost crisis caused by imports when we have so much so-called “home grown” renewable energy on the system.
The answer is that the Government’s hugely expensive renewables policy –£50 billion in total since 2002 and rising at the rate of about £10 billion a year – has actually caused the problem, wrecking our fuel diversity by driving coal off the system and resulting in a nuclear decline.
But because renewables such as wind and solar are unreliable they contribute nothing to security of supply, the policies have put the whole burden of system reliability on natural gas, the domestic production of which has been actively suppressed by the UK Government.
At the heart of this problem is the fact that wind and solar are of very low physical quality (for those that care, it has high entropy), changing in strength uncontrollably over time, with wind in particular varying hugely over all timescales from seconds and minutes to years and even decades.
Physically speaking that means it is a very disordered and chaotic source of energy that is hard to predict
Consequently, although wind and solar now account for about 16 percent of our electricity, and all renewables including tree-burning biomass about 40 percent of our electricity, the electricity system as a whole has become critically dependent on natural gas to guarantee security of supply.
Coal has been closed own (and even blown up by Alok Sharma, the former Secretary of State for the Department of Business), and the fleet of nuclear power stations has declined, and gas has been left to hold the fort.
But the volume of gas needed in any year fluctuates with the wind and the sun, so the power companies who need to buy the gas cannot use long-term contracts to reduce those gas buying costs and instead must buy on shorter term arrangements which are more expensive.
To make things worse, the Government’s mistaken emphasis on renewables has actively discouraged exploration for natural gas (and oil) in the North Sea, and Government has even banned fracking for shale gas.
This is bizarre, bordering on perverse, given that renewable energy needs support from gas-fired generation. What were they thinking of? Lunch perhaps.
And finally, wind and solar themselves are intrinsically and unavoidably expensive. Consumers of all kinds, from households to factories, need reliable electricity supply on demand.
That means that the low physical quality of wind and solar energy has to be corrected in some way before it is delivered as electricity in the wall socket.
That correction happens in several stages, firstly as the wind or sun is gathered by the extremely complicated and expensive wind turbines and solar panels, then by fiendishly expensive grid sticking plasters such as Battery Energy Storage Systems (BESS), but also and most importantly by coal or gas-fired generators stepping in or out of the market to smooth the up and down fluctuations of wind and sun. This is expensive.
Of course, we have all been told that there are huge reductions in the cost of electricity from wind turbines and solar panels, but there is a lot of smoke about, and one or two mirrors too.
The truth, which we can see in audited financial statements, is that the lifetime productivity of wind and solar remains low at best and capital costs to build wind and solar remain very high while operational costs, for offshore wind for example, are rising.
However, Government ministers are ignorant of these facts and have been completely taken in by the falling cost spin put out by the industry.
As a result of these errors the UK has become extremely exposed to surges in the gas price caused by external emergencies, such as the invasion of Ukraine.
But if it hadn’t been Ukraine it would have been some other unexpected event, a massive rise in Chinese gas demand for example, or a huge pipeline accident in Europe.
Our gas-dependent renewables policy was an accident waiting to happen, and a price crisis all but certain at some point.
Without the climate policies, and the overcommitment to wind and solar, we would have a more diverse fuel supply, including modern high-efficiency and lower-emitting coal as well as more nuclear, meaning that we could increase use of those fuels and reduce gas to contain costs to consumers in times of emergency.
Even our existing gas generators would be newer and more efficient, further protecting us against the fuel cost.
Sadly, that isn’t where we are. Instead, we have an energy crisis that is so severe that we have to put our longer-term goal of reducing emissions on hold while we fix the current problems and rethink our path to a lower carbon future
The renewables error, which started with Mr Blair and has been endorsed by every subsequent Prime Minster, has cost us 20 years of progress on climate change and an absolute fortune on the national energy bill.
Today’s rapidly rising household electricity bills are a consequence of unrealistic energy and climate policies that forced us to use low quality and unreliable renewable energy, giving the illusion of diversity and security, while discouraging the high-quality sources such as coal, nuclear, and gas that provide a truly robust and secure supply. This has left the UK critically dependent on one high quality fuel alone, natural gas, much of which now has to be imported. It really is that simple, and with the Ukraine war, those chickens have come home to roost.
How did this happen? And how can we have an energy cost crisis caused by imports when we have so much so-called “home grown” renewable energy on the system.
The answer is that the Government’s hugely expensive renewables policy –£50 billion in total since 2002 and rising at the rate of about £10 billion a year – has actually caused the problem, wrecking our fuel diversity by driving coal off the system and resulting in a nuclear decline.
But because renewables such as wind and solar are unreliable they contribute nothing to security of supply, the policies have put the whole burden of system reliability on natural gas, the domestic production of which has been actively suppressed by the UK Government.
At the heart of this problem is the fact that wind and solar are of very low physical quality (for those that care, it has high entropy), changing in strength uncontrollably over time, with wind in particular varying hugely over all timescales from seconds and minutes to years and even decades.
Physically speaking that means it is a very disordered and chaotic source of energy that is hard to predict
Consequently, although wind and solar now account for about 16 percent of our electricity, and all renewables including tree-burning biomass about 40 percent of our electricity, the electricity system as a whole has become critically dependent on natural gas to guarantee security of supply.
Coal has been closed own (and even blown up by Alok Sharma, the former Secretary of State for the Department of Business), and the fleet of nuclear power stations has declined, and gas has been left to hold the fort.
But the volume of gas needed in any year fluctuates with the wind and the sun, so the power companies who need to buy the gas cannot use long-term contracts to reduce those gas buying costs and instead must buy on shorter term arrangements which are more expensive.
To make things worse, the Government’s mistaken emphasis on renewables has actively discouraged exploration for natural gas (and oil) in the North Sea, and Government has even banned fracking for shale gas.
This is bizarre, bordering on perverse, given that renewable energy needs support from gas-fired generation. What were they thinking of? Lunch perhaps.
And finally, wind and solar themselves are intrinsically and unavoidably expensive. Consumers of all kinds, from households to factories, need reliable electricity supply on demand.
That means that the low physical quality of wind and solar energy has to be corrected in some way before it is delivered as electricity in the wall socket.
That correction happens in several stages, firstly as the wind or sun is gathered by the extremely complicated and expensive wind turbines and solar panels, then by fiendishly expensive grid sticking plasters such as Battery Energy Storage Systems (BESS), but also and most importantly by coal or gas-fired generators stepping in or out of the market to smooth the up and down fluctuations of wind and sun. This is expensive.
Of course, we have all been told that there are huge reductions in the cost of electricity from wind turbines and solar panels, but there is a lot of smoke about, and one or two mirrors too.
The truth, which we can see in audited financial statements, is that the lifetime productivity of wind and solar remains low at best and capital costs to build wind and solar remain very high while operational costs, for offshore wind for example, are rising.
However, Government ministers are ignorant of these facts and have been completely taken in by the falling cost spin put out by the industry.
As a result of these errors the UK has become extremely exposed to surges in the gas price caused by external emergencies, such as the invasion of Ukraine.
But if it hadn’t been Ukraine it would have been some other unexpected event, a massive rise in Chinese gas demand for example, or a huge pipeline accident in Europe.
Our gas-dependent renewables policy was an accident waiting to happen, and a price crisis all but certain at some point.
Without the climate policies, and the overcommitment to wind and solar, we would have a more diverse fuel supply, including modern high-efficiency and lower-emitting coal as well as more nuclear, meaning that we could increase use of those fuels and reduce gas to contain costs to consumers in times of emergency.
Even our existing gas generators would be newer and more efficient, further protecting us against the fuel cost.
Sadly, that isn’t where we are. Instead, we have an energy crisis that is so severe that we have to put our longer-term goal of reducing emissions on hold while we fix the current problems and rethink our path to a lower carbon future
The renewables error, which started with Mr Blair and has been endorsed by every subsequent Prime Minster, has cost us 20 years of progress on climate change and an absolute fortune on the national energy bill.
5) Green transition will deliver repeat inflation shocks, TCorp’s chief economist warns
The Australian, 4 September 2022
The transition away from fossil fuels to a low-emissions future could result in inflation spikes every few years in the next two decades – a problem central banks won’t be able to control and governments won’t be able to subsidise their way out of.
That’s the view of TCorp chief economist Brian Redican, who says he is uncertain whether the low-inflation environment of the last three decades before the Covid-19 pandemic will return, as many in the market expect.
“The debate at the moment is about how aggressive central banks need to be to get rid of this current inflationary period, and whether they’re actually going to have the internal fortitude to bring inflation down,” Mr Redican, previously the chief economist at Macquarie, said.
“And the debate really is about how long inflation will persist, whether that is six months or 12 months or 18 months, until (central banks) get it under control.
“My question is whether these kinds of episodes will become more frequent in the future. If that’s the case the economic and financial market landscape could look very different.
“What are some of the forces that could actually make these episodes more frequent? The move towards net zero I think may be one of them,” Mr Redican added.
Central to those concerns are energy market shocks which are hard to predict, and even harder to control.
European leaders are already bracing for the prospect of supply cuts and sustained price hikes after Russian oil firm Gazprom again halted the key Nord Stream pipeline indefinitely at the weekend, hours after G7 leaders agreed to implement a price cap on Russian oil.
In Australia, the Reserve Bank warned in August that it expected elevated energy prices to remain as a result of unplanned maintenance problems at several coal-fired power plants over recent months. Market instability abroad has also raised the price of thermal coal, affecting local costs.
Mr Redican said it was these types of issues that would – “every two, or three or even four years” – have a profound effect on energy prices and send inflation surging.
“Then we’ll get another one of these negative supply shocks where you get a heatwave in the Northern Hemisphere … the wind turbines are not able to supply the power that people need, and so countries revert back to fossil fuels, in particular gas, and that drives up gas prices markedly, as we’re seeing at the moment,” he said.
“So inflation is kind of running along that 2 per cent and suddenly you get these adverse weather effect, inflation spikes up to five or six or seven per cent.
“The question is, how should central banks kind of react to that? Do they again, raise interest rates aggressively as they’re doing now or should they take a more medium-term approach and try to smooth the cycle … if the shocks are not just going to be a one off, but recur more frequently.”
Full story
6) Dominic Lawson: Russia, like the USSR, will stand or fall on oil and gas
The Sunday Times, 4 September 2022
The Australian, 4 September 2022
The transition away from fossil fuels to a low-emissions future could result in inflation spikes every few years in the next two decades – a problem central banks won’t be able to control and governments won’t be able to subsidise their way out of.
That’s the view of TCorp chief economist Brian Redican, who says he is uncertain whether the low-inflation environment of the last three decades before the Covid-19 pandemic will return, as many in the market expect.
“The debate at the moment is about how aggressive central banks need to be to get rid of this current inflationary period, and whether they’re actually going to have the internal fortitude to bring inflation down,” Mr Redican, previously the chief economist at Macquarie, said.
“And the debate really is about how long inflation will persist, whether that is six months or 12 months or 18 months, until (central banks) get it under control.
“My question is whether these kinds of episodes will become more frequent in the future. If that’s the case the economic and financial market landscape could look very different.
“What are some of the forces that could actually make these episodes more frequent? The move towards net zero I think may be one of them,” Mr Redican added.
Central to those concerns are energy market shocks which are hard to predict, and even harder to control.
European leaders are already bracing for the prospect of supply cuts and sustained price hikes after Russian oil firm Gazprom again halted the key Nord Stream pipeline indefinitely at the weekend, hours after G7 leaders agreed to implement a price cap on Russian oil.
In Australia, the Reserve Bank warned in August that it expected elevated energy prices to remain as a result of unplanned maintenance problems at several coal-fired power plants over recent months. Market instability abroad has also raised the price of thermal coal, affecting local costs.
Mr Redican said it was these types of issues that would – “every two, or three or even four years” – have a profound effect on energy prices and send inflation surging.
“Then we’ll get another one of these negative supply shocks where you get a heatwave in the Northern Hemisphere … the wind turbines are not able to supply the power that people need, and so countries revert back to fossil fuels, in particular gas, and that drives up gas prices markedly, as we’re seeing at the moment,” he said.
“So inflation is kind of running along that 2 per cent and suddenly you get these adverse weather effect, inflation spikes up to five or six or seven per cent.
“The question is, how should central banks kind of react to that? Do they again, raise interest rates aggressively as they’re doing now or should they take a more medium-term approach and try to smooth the cycle … if the shocks are not just going to be a one off, but recur more frequently.”
Full story
6) Dominic Lawson: Russia, like the USSR, will stand or fall on oil and gas
The Sunday Times, 4 September 2022
Hydrocarbons fund Putin’s aggression. Shale gas will help us temper it
As the last leader of the USSR is laid to rest, we are inundated with explanations of why it was that the Soviet Union disintegrated. In Russia, under a leader determined to reverse that loss of empire, Mikhail Gorbachev himself is given much of the blame. In the West, Ronald Reagan is given much of the credit. No one has mentioned the true agent of change (or what Vladimir Putin would call catastrophe). In a word: hydrocarbons. More specifically, a sharp and sustained slump in the oil price.
If Yegor Gaidar, the former Soviet apparatchik and later (briefly) acting Russian prime minister under Boris Yeltsin, were still alive, he would be making this point. Two years before his death in 2009, Gaidar explained it — from the inside — in his book Collapse of an Empire: Lessons for Modern Russia. His starting point was that Moscow, then as now, had only one significant source of hard currency earnings: its vast oil fields (later augmented by Siberian gas), which supplied not only the eastern bloc but also the West. The USSR even owned hundreds of petrol stations in the United Kingdom, under the Nafta brand, providing an outlet for the only one of its products coveted by western consumers.
The petrol stations were sold in 1987 as part of a desperate drive for cash by the Kremlin. The reason for that desperation? The crude oil price had plummeted and threatened the USSR’s ability even to finance sufficient imports of grain to avoid bread shortages. Gaidar wrote: “The timeline of the collapse of the Soviet Union can be traced to September 13th 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically . . . During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms. As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive.”
Until then Saudi Arabia had acted, within the Organisation of the Petroleum Exporting Countries (Opec), as “swing producer”, cutting back its own production in order to keep global crude oil prices above a certain level. This was a boon to North Sea producers: at one point in 1985, the UK was producing more oil than Saudi Arabia. I was then the energy correspondent for the Financial Times, at the same time that my father was chancellor of the exchequer. In 1985, at an emergency Opec meeting I covered, Sheikh Yamani invited me up to his top-floor suite at the InterContinental hotel in Geneva, to hector me, in his charming way, along the lines of “Why doesn’t your father have more care about the oil price and reduce output from the North Sea?” Of course, the then Conservative administration had no intention of becoming a sort of associate of the Opec cartel.
Unlike the Thatcher government, the Soviets raised vast foreign currency borrowings on the basis that the oil price would stay high; but by 1989, western financiers, led by Deutsche Bank, pulled the plug. It was clear to Gorbachev that the aid the USSR then needed from the West would not be forthcoming if it suppressed uprisings in, most significantly, Poland and later East Germany. Again, to quote Gaidar: “The only option left for the Soviet elites was to begin immediate negotiations about the conditions of surrender.”
Putin, by contrast, has been greatly favoured by the fact that his years in power have coincided with a period of steady — and sometimes precipitate — rise in the oil price. And just as the Soviet invasion of Afghanistan, in December 1979, had followed a sharp increase in its hydrocarbon revenues (in the wake of the Iranian revolution and the consequent doubling in the oil price), every one of Putin’s military adventures followed a period of surge or prolonged strength in the crude oil market. This was the case with the invasion of Georgia in 2008, the annexation of Crimea in 2014 and, most recently, the full-scale invasion of Ukraine.
It is a matter of confidence, and, as regards Europe’s increasing reliance on Russian gas, a belief that the West is in no position to retaliate. Our job is to prove that confidence is misplaced. Certainly, Putin seems to have been taken aback by the way western governments acted to freeze about half of the $600 billion of foreign currency reserves that Moscow had built up — almost entirely through its sales of oil and gas — as a form of financial buffer following its annexation of Crimea.
More than $1 trillion of the estimated revenues from oil and gas since Putin took over in 2000 have gone to the Russian military; Moscow’s annual spend on defence has risen more than sevenfold. Here, though, there is a parallel with the problems that afflicted the Soviet Union. Not only has over-reliance on oil and gas stood in the way of developing other industries; there have been grotesque inefficiencies in the way the military budget has been spent. In the Russia of today, that has been augmented by prodigious levels of corruption — one of the reasons the Russian invasion of Ukraine has not, to put it mildly, gone according to plan.
As for those cursed Russian hydrocarbons, what should be the West’s response? On Friday, the G7 group of the leading western economies agreed to impose, by December, some sort of purchase price cap on Russian oil. But they gave no hint of what that price cap would be, or how it would be implemented.
As far as this country is concerned, the obvious policy response to Moscow’s manipulation of gas supply would be for the new prime minister to reverse the onshore shale gas moratorium kept in place by Boris Johnson. If even just 10 per cent of the reserves estimated by the British Geological Survey are recoverable, that amounts to 50 years of domestic supply at current consumption levels. The departing PM has been an adamantine advocate of offshore wind farms, claiming, with customary hyperbole, that Britain would become “the Saudi Arabia of wind”. But since wind power is intermittent (and the coldest days are often the stillest), gas is the ideal back-up fuel. The more wind power is relied on, the more we need such back-up.
In March, the business secretary, Kwasi Kwarteng, pronounced that “the UK has no gas-supply issues . . . and fracking would come at a high cost to communities”. Those words must be eaten, rapidly. Liz Truss has declared she will back shale-gas production “if local communities support it”. That qualification leaves the matter unclear.
Like it or not, we are in a confrontation with Russia, and, as during the Cold War, hydrocarbons are the key to Moscow’s fortunes in the conflict.
There were zero named tropical storms or hurricanes between July 3 and Aug. 30, which is the first time such a phenomenon has occurred in more than 80 years, forecasters noted this week.
“It has been surprisingly and freakishly quiet in the Atlantic,” University of Miami hurricane researcher Brian McNoldy told The Associated Press this week, pointing out that weak Tropical Storm Colin fizzled out on July 2 and there’s been nothing since.
A review of the National Hurricane Center’s (NHC) forecast maps shows there is one tropical depression in the northern Atlantic Ocean that appears to be heading north further into the ocean. There are no other depressions, although there is one disturbance that has a 60 percent chance of forming into a named storm in the next 48 hours.
“For the first time since 1941, the Atlantic has had no named storm (e.g., tropical storm or hurricane) activity from July 3rd-August 30th,” wrote Colorado State University hurricane researcher Phil Klotzbach on Twitter.
It’ll be the first time since 1941 that the Atlantic has gone from July 3 to the end of August with no named storm, Klotzbach told AP. Since 1950, only 1997 and 1961 had no named storms in August and 1961 then went hyperactive in September, including deadly Carla, he said.
Just late last week, the computer forecast models predicted three maybe four storms forming, including one becoming a major hurricane with winds of more than 110 mph, Klotzbach added.
Full story
As the last leader of the USSR is laid to rest, we are inundated with explanations of why it was that the Soviet Union disintegrated. In Russia, under a leader determined to reverse that loss of empire, Mikhail Gorbachev himself is given much of the blame. In the West, Ronald Reagan is given much of the credit. No one has mentioned the true agent of change (or what Vladimir Putin would call catastrophe). In a word: hydrocarbons. More specifically, a sharp and sustained slump in the oil price.
If Yegor Gaidar, the former Soviet apparatchik and later (briefly) acting Russian prime minister under Boris Yeltsin, were still alive, he would be making this point. Two years before his death in 2009, Gaidar explained it — from the inside — in his book Collapse of an Empire: Lessons for Modern Russia. His starting point was that Moscow, then as now, had only one significant source of hard currency earnings: its vast oil fields (later augmented by Siberian gas), which supplied not only the eastern bloc but also the West. The USSR even owned hundreds of petrol stations in the United Kingdom, under the Nafta brand, providing an outlet for the only one of its products coveted by western consumers.
The petrol stations were sold in 1987 as part of a desperate drive for cash by the Kremlin. The reason for that desperation? The crude oil price had plummeted and threatened the USSR’s ability even to finance sufficient imports of grain to avoid bread shortages. Gaidar wrote: “The timeline of the collapse of the Soviet Union can be traced to September 13th 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically . . . During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms. As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive.”
Until then Saudi Arabia had acted, within the Organisation of the Petroleum Exporting Countries (Opec), as “swing producer”, cutting back its own production in order to keep global crude oil prices above a certain level. This was a boon to North Sea producers: at one point in 1985, the UK was producing more oil than Saudi Arabia. I was then the energy correspondent for the Financial Times, at the same time that my father was chancellor of the exchequer. In 1985, at an emergency Opec meeting I covered, Sheikh Yamani invited me up to his top-floor suite at the InterContinental hotel in Geneva, to hector me, in his charming way, along the lines of “Why doesn’t your father have more care about the oil price and reduce output from the North Sea?” Of course, the then Conservative administration had no intention of becoming a sort of associate of the Opec cartel.
Unlike the Thatcher government, the Soviets raised vast foreign currency borrowings on the basis that the oil price would stay high; but by 1989, western financiers, led by Deutsche Bank, pulled the plug. It was clear to Gorbachev that the aid the USSR then needed from the West would not be forthcoming if it suppressed uprisings in, most significantly, Poland and later East Germany. Again, to quote Gaidar: “The only option left for the Soviet elites was to begin immediate negotiations about the conditions of surrender.”
Putin, by contrast, has been greatly favoured by the fact that his years in power have coincided with a period of steady — and sometimes precipitate — rise in the oil price. And just as the Soviet invasion of Afghanistan, in December 1979, had followed a sharp increase in its hydrocarbon revenues (in the wake of the Iranian revolution and the consequent doubling in the oil price), every one of Putin’s military adventures followed a period of surge or prolonged strength in the crude oil market. This was the case with the invasion of Georgia in 2008, the annexation of Crimea in 2014 and, most recently, the full-scale invasion of Ukraine.
It is a matter of confidence, and, as regards Europe’s increasing reliance on Russian gas, a belief that the West is in no position to retaliate. Our job is to prove that confidence is misplaced. Certainly, Putin seems to have been taken aback by the way western governments acted to freeze about half of the $600 billion of foreign currency reserves that Moscow had built up — almost entirely through its sales of oil and gas — as a form of financial buffer following its annexation of Crimea.
More than $1 trillion of the estimated revenues from oil and gas since Putin took over in 2000 have gone to the Russian military; Moscow’s annual spend on defence has risen more than sevenfold. Here, though, there is a parallel with the problems that afflicted the Soviet Union. Not only has over-reliance on oil and gas stood in the way of developing other industries; there have been grotesque inefficiencies in the way the military budget has been spent. In the Russia of today, that has been augmented by prodigious levels of corruption — one of the reasons the Russian invasion of Ukraine has not, to put it mildly, gone according to plan.
As for those cursed Russian hydrocarbons, what should be the West’s response? On Friday, the G7 group of the leading western economies agreed to impose, by December, some sort of purchase price cap on Russian oil. But they gave no hint of what that price cap would be, or how it would be implemented.
As far as this country is concerned, the obvious policy response to Moscow’s manipulation of gas supply would be for the new prime minister to reverse the onshore shale gas moratorium kept in place by Boris Johnson. If even just 10 per cent of the reserves estimated by the British Geological Survey are recoverable, that amounts to 50 years of domestic supply at current consumption levels. The departing PM has been an adamantine advocate of offshore wind farms, claiming, with customary hyperbole, that Britain would become “the Saudi Arabia of wind”. But since wind power is intermittent (and the coldest days are often the stillest), gas is the ideal back-up fuel. The more wind power is relied on, the more we need such back-up.
In March, the business secretary, Kwasi Kwarteng, pronounced that “the UK has no gas-supply issues . . . and fracking would come at a high cost to communities”. Those words must be eaten, rapidly. Liz Truss has declared she will back shale-gas production “if local communities support it”. That qualification leaves the matter unclear.
Like it or not, we are in a confrontation with Russia, and, as during the Cold War, hydrocarbons are the key to Moscow’s fortunes in the conflict.
7) German Greens deny report of U-turn on nuclear plant extensions
Bloomberg, 4 September 2022
Germany’s Green Party denied a report that it will back a plan allowing some of the nation’s nuclear power plants to continue operating beyond a previously set phase-out date, as the nation confronts its worst energy shortages in decades.
Bild reported that leaders of the Greens, a member of Germany’s ruling coalition, discussed the issue on a call Thursday evening -- before Friday’s announcement by Russia’s Gazprom PJSC that its key gas pipeline to Europe won’t reopen as planned.
The officials decided they could support extending the life cycle of two out of three German atomic power plants -- currently slated to go off-line at the end of the year -- through next summer, Bild reported.
A Green Party spokesman told Bloomberg News that Saturday’s Bild report was inaccurate, and cautioned against what was termed wild speculation.
The issue is likely to come up in talks this weekend, according to Bild, which said Economy Minister Robert Habeck will present the results of a keenly awaited report studying the feasibility of the nuclear power option.
Both a government official said the stress test results aren’t expected this weekend. Talks in Berlin are expected to focus on a third relief package to help German households and companies cope with soaring energy bills.
Germany has been inching toward keeping the reactors open as it faces an energy supply crunch triggered by reduced supplies of Russian gas. The earlier determination to exit nuclear power permanently by the end of 2022 has long been a core tenet of the Green Party’s policy demands.
Full story
Bloomberg, 4 September 2022
Germany’s Green Party denied a report that it will back a plan allowing some of the nation’s nuclear power plants to continue operating beyond a previously set phase-out date, as the nation confronts its worst energy shortages in decades.
Bild reported that leaders of the Greens, a member of Germany’s ruling coalition, discussed the issue on a call Thursday evening -- before Friday’s announcement by Russia’s Gazprom PJSC that its key gas pipeline to Europe won’t reopen as planned.
The officials decided they could support extending the life cycle of two out of three German atomic power plants -- currently slated to go off-line at the end of the year -- through next summer, Bild reported.
A Green Party spokesman told Bloomberg News that Saturday’s Bild report was inaccurate, and cautioned against what was termed wild speculation.
The issue is likely to come up in talks this weekend, according to Bild, which said Economy Minister Robert Habeck will present the results of a keenly awaited report studying the feasibility of the nuclear power option.
Both a government official said the stress test results aren’t expected this weekend. Talks in Berlin are expected to focus on a third relief package to help German households and companies cope with soaring energy bills.
Germany has been inching toward keeping the reactors open as it faces an energy supply crunch triggered by reduced supplies of Russian gas. The earlier determination to exit nuclear power permanently by the end of 2022 has long been a core tenet of the Green Party’s policy demands.
Full story
8) No Atlantic hurricanes this summer for first time since 1941
The Epoch Times, 1 September 2022
The Epoch Times, 1 September 2022
“It has been surprisingly and freakishly quiet in the Atlantic,” University of Miami hurricane researcher Brian McNoldy told The Associated Press this week, pointing out that weak Tropical Storm Colin fizzled out on July 2 and there’s been nothing since.
A review of the National Hurricane Center’s (NHC) forecast maps shows there is one tropical depression in the northern Atlantic Ocean that appears to be heading north further into the ocean. There are no other depressions, although there is one disturbance that has a 60 percent chance of forming into a named storm in the next 48 hours.
“For the first time since 1941, the Atlantic has had no named storm (e.g., tropical storm or hurricane) activity from July 3rd-August 30th,” wrote Colorado State University hurricane researcher Phil Klotzbach on Twitter.
It’ll be the first time since 1941 that the Atlantic has gone from July 3 to the end of August with no named storm, Klotzbach told AP. Since 1950, only 1997 and 1961 had no named storms in August and 1961 then went hyperactive in September, including deadly Carla, he said.
Just late last week, the computer forecast models predicted three maybe four storms forming, including one becoming a major hurricane with winds of more than 110 mph, Klotzbach added.
Full story
9) “Smart” thermostat locks customers out, declares “energy emergency”
Reclaim the Net, 2 September 2022
Thousands of Xcel customers in Colorado were locked out of their smart thermostats, meaning they had no control of the temperatures in their homes. The company said the problem was caused by an “energy emergency.”
Tony Talarico explained how he was not able to turn up air conditioning while at his partner’s home in Arvada.
“I mean, it was 90 out, and it was right during the peak period,” Talarico said. “It was hot.”
The thermostat displayed a message saying he could not turn up the cooling because he had been locked out due to an energy emergency.
“Normally, when we see a message like that, we’re able to override it,” Talarico said. “In this case, we weren’t. So, our thermostat was locked in at 78 or 79.”
Social media was filled with thousands of such complaints on Tuesday, some saying they had been locked out of the thermostat at temperatures as high as 88 degrees.
Speaking to Contact Denver7, Xcel confirmed that some customers had been locked out of their thermostats for hours on Tuesday. Vice President of Customer Solutions and Innovation Emmett Romine said that the 22,000 customers who could not control their thermostats had registered for the Colorado AC Rewards program.
“It’s a voluntary program. Let’s remember that this is something that customers choose to be a part of based on the incentives,” he said. For participating in the program, customers received $100 in credit and $25 annually.
According to Romine, by signing up to the program customers agreed to give up some control in order to save money, energy, and make the system more reliable.
“So, it helps everybody for people to participate in these programs. It is a bit uncomfortable for a short period of time, but it’s very, very helpful,” said Romine.
He added that it was the first time in the six years since the program was launched that customers were not able to override their thermostats. He said there was an “energy emergency” caused by hot weather, heavy usage of air conditioners, and an unexpected outage in Pueblo.
But customers like Tolarico did not know that the company had that much control.
“To me, an emergency means there is, you know, life, limb, or, you know, some other danger out there — some, you know, massive wildfires,” Talarico said. “Even if it’s a once-in-a-blue-moon situation, it just doesn’t sit right with us to not be able to control our own thermostat in our house.”
see also Andrew Montford: Survival of the richest: Smart homes and energy rationing (pdf)
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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