In this newsletter:
1) US-Europe trade tensions heat up over Biden's green subsidies
Financial Times, 27 February 2023
2) Tesla scales back German battery plans, won over by U.S. incentives
Reuters, 21 February 2023
3) Audi mulls U.S. factory as Biden's green subsidies draw German carmakers
Automotive News Europe, 24 February 2023
4) Expert sees increasing risks for battery investments in Germany
Deutsche Press Agentur, 26 February 223
5) Middle classes cannot afford electric cars, warns Vauxhall owner
The Daily Telegraph, 23 February 2023
6) Welcome to Net Zero: BASF to cut 2,600 Jobs as energy crisis hits German industry
Bloomberg, 24 February 2023
7) Much of German industry unlikely to survive Net Zero as it faces $1 trillion bill to plug massive power gap
Bloomberg, 25 February 2023
8) Joseph C. Sternberg: The Ukraine War lesson Europe refuses to learn
The Wall Street Journal, 23 February 2023
Reuters, 21 February 2023
3) Audi mulls U.S. factory as Biden's green subsidies draw German carmakers
Automotive News Europe, 24 February 2023
4) Expert sees increasing risks for battery investments in Germany
Deutsche Press Agentur, 26 February 223
5) Middle classes cannot afford electric cars, warns Vauxhall owner
The Daily Telegraph, 23 February 2023
6) Welcome to Net Zero: BASF to cut 2,600 Jobs as energy crisis hits German industry
Bloomberg, 24 February 2023
7) Much of German industry unlikely to survive Net Zero as it faces $1 trillion bill to plug massive power gap
Bloomberg, 25 February 2023
8) Joseph C. Sternberg: The Ukraine War lesson Europe refuses to learn
The Wall Street Journal, 23 February 2023
9) Energy companies are scaling back oil and gas investment in high-tax Britain
Financial Times, 27 February 2023
10) Steve Goreham: Green Energy: The greatest wealth transfer in history
Master Resource, 21 February 2023
Financial Times, 27 February 2023
10) Steve Goreham: Green Energy: The greatest wealth transfer in history
Master Resource, 21 February 2023
11) Jerome Booth: Have We All Gone Mad? Why groupthink is rising and how to stop it
The New Culture Forum
12) And finally: China's real agenda: Ramping up coal plant approvals despite emissions pledge
AFP, 27 February 2023
The New Culture Forum
12) And finally: China's real agenda: Ramping up coal plant approvals despite emissions pledge
AFP, 27 February 2023
Full details:
1) US-Europe trade tensions heat up over Biden's green subsidies
Financial Times, 27 February 2023
EU officials fear Biden’s climate law will undermine the bloc’s own efforts to drive green investment
Joe Biden’s administration hopes to unleash a green revolution by offering hundreds of billions of dollars in subsidies to clean energy companies, but the US president’s flagship legislation also threatens to spark a fresh trade war.
The Inflation Reduction Act, which was passed by US Congress last summer, earmarks around $369bn in grants, loans and tax credits for the rollout of renewable energy and clean technologies across the US.
Since the law passed, $90bn of investment has been committed to clean energy projects in the country, ranging from solar panel factories to electric vehicle plants and battery hubs.
And, across many sectors, companies are rewarded for building equipment nationally, or sourcing components and critical minerals from the US or countries that the US has a free trade agreement with.
As a result, the law has alarmed US trading partners, including Europe and Japan, who fear they will lose out to the US on new jobs and business investment. French President Emmanuel Macron said recently that the new climate law threatened to “fragment the West”.
European Union officials have also accused Washington of discriminating against European companies and breaking global trade rules overseen by the World Trade Organization — particularly in the electric vehicle sector, where companies score the full tax credit if they manufacture cars in North America.
David Kleimann, a trade expert and visiting fellow at Bruegel, the European think-tank, says that, while the IRA is a welcome piece of climate legislation, it also includes “trade-distortive subsidies” including provisions to manufacture in the US, which are prohibited under World Trade Organization rules.
In response, the EU is working on its own raft of green subsidies, beginning with proposals to loosen up the bloc’s strict state aid rules. However, corresponding subsidies on either side of the Atlantic have prompted concerns that companies will “subsidy shop” — playing governments against each other and locating their businesses in the most lucrative domain.
Full story
Financial Times, 27 February 2023
EU officials fear Biden’s climate law will undermine the bloc’s own efforts to drive green investment
Joe Biden’s administration hopes to unleash a green revolution by offering hundreds of billions of dollars in subsidies to clean energy companies, but the US president’s flagship legislation also threatens to spark a fresh trade war.
The Inflation Reduction Act, which was passed by US Congress last summer, earmarks around $369bn in grants, loans and tax credits for the rollout of renewable energy and clean technologies across the US.
Since the law passed, $90bn of investment has been committed to clean energy projects in the country, ranging from solar panel factories to electric vehicle plants and battery hubs.
And, across many sectors, companies are rewarded for building equipment nationally, or sourcing components and critical minerals from the US or countries that the US has a free trade agreement with.
As a result, the law has alarmed US trading partners, including Europe and Japan, who fear they will lose out to the US on new jobs and business investment. French President Emmanuel Macron said recently that the new climate law threatened to “fragment the West”.
European Union officials have also accused Washington of discriminating against European companies and breaking global trade rules overseen by the World Trade Organization — particularly in the electric vehicle sector, where companies score the full tax credit if they manufacture cars in North America.
David Kleimann, a trade expert and visiting fellow at Bruegel, the European think-tank, says that, while the IRA is a welcome piece of climate legislation, it also includes “trade-distortive subsidies” including provisions to manufacture in the US, which are prohibited under World Trade Organization rules.
In response, the EU is working on its own raft of green subsidies, beginning with proposals to loosen up the bloc’s strict state aid rules. However, corresponding subsidies on either side of the Atlantic have prompted concerns that companies will “subsidy shop” — playing governments against each other and locating their businesses in the most lucrative domain.
Full story
2) Tesla scales back German battery plans, won over by U.S. incentives
Reuters, 21 February 2023
Reuters, 21 February 2023
BERLIN -- Tesla has begun assembling battery systems at its plant in Germany but will focus cell production in the U.S. in light of tax incentives under the Inflation Reduction Act (IRA), a spokesperson said on Wednesday.
The EV maker is also preparing to produce cell components such as electrodes, some of which will be sent to the U.S. from its site in Gruenheide in the state of Brandenburg, the spokesperson said.
Cars produced at the Brandenburg site, which is just outside Berlin, would in the "near future" contain batteries assembled locally, the spokesperson added.
"The focus of Tesla's cell production is currently in the United States due to the framework created by the United States Inflation Reduction Act (IRA)," the spokesperson said in a statement.
EU leaders have expressed concern that local content requirements of much of the $369 billion of subsidies in the IRA will encourage companies to abandon Europe for the United States.
Full story
3) Audi mulls U.S. factory as Biden's green subsidies draw German carmakers
Automotive News Europe, 24 February 2023
Audi may build a factory in the U.S. in light of the Inflation Reduction Act, it said, the latest company to consider investments in the country to take advantage of the offered under the Inflation Reduction Act (IRA).
The Volkswagen Group brand sold around 190,000 cars in the U.S. last year, accounting for 11 percent of its total sales.
Audi does not have a plant in the U.S. and is at present not eligible for tax incentives and subsidies offered under IRA for vehicles sourced and made in North America.
"The IRA has made building a U.S. plant for electric cars very attractive," Audi CEO Markus Duesmann said in an interview with German newspaper Frankfurter Allgemeine Sonntagszeitung in comments that were later confirmed by the company.
Duesmann said that a decision had not yet been made but that the IRA made it far more attractive to build electric vehicles in the U.S. Asked whether Audi would build a plant itself or do so together with other VW brands, Duesmann said: "Both are possible. But the probability that we do it within the group is high."
Duesmann's remarks reinforce comments made in October to Automotive News by Oliver Hoffmann, head of technical development for Audi, who said the company was considering a U.S. assembly plant in the U.S.
Full story
4) Expert sees increasing risks for battery investments in Germany
Deutsche Press Agentur, 26 February 223
Automotive expert Ferdinand Dudenhöffer sees growing risks for investments like those made by U.S. electric carmaker Tesla in battery production in Germany.
"We believe that the ramp-up of electric mobility will be disrupted - partly because subsidies have been cut in Germany," the director of CAR - Center Automotive Research in Duisburg told the Deutsche Presse-Agentur. "This makes internal combustion vehicles cheaper again for customers. With that, you need fewer batteries in Europe." At the same time, he said, there are high electricity prices in Germany.
Tesla has shifted priority for battery manufacturing to the U.S. because of tax reasons, leaving open when complete batteries will be manufactured in Germany. However, the company does not want to abandon this production in Germany: The plan is still to manufacture complete batteries in Grünheide, the company says. The focus of cell production is currently in the U.S. because of the U.S. framework with tax breaks for battery production, it said.
Dudenhöffer spoke of a deterioration for the location. He had made similar comments in the "Süddeutsche Zeitung" (Wednesday). "Especially the decision of Tesla should be taken very seriously in Berlin," the economist told dpa. If U.S. President Joe Biden's so-called inflation-fighting law remains as it is, he said, German automakers will try to install batteries in the United States. "If production capacity is not built up in Europe, or built up later, you usually run behind in terms of economies of scale."
The auto expert believes the situation is further complicated by increased energy costs as a result of the Ukraine war in Germany. "This puts us at a great disadvantage, especially in cell production," Dudenhöffer said. "I wouldn't rule out Tesla taking another look at this investment decision."
Full story
5) Middle classes cannot afford electric cars, warns Vauxhall owner
The Daily Telegraph, 23 February 2023
Demand for electric cars slumps as energy crisis makes them more expensive to run
Motorists are rapidly losing interest in electric cars as the cost of power surges and petrol and diesel prices continue to fall, the AA has suggested.
The proportion of car buyers considering purchasing an electric model this year has slumped to less than a fifth compared with one in four a year ago, its research found.
It came as the boss of Stellantis, which owns Vauxhall, warned that the middle classes cannot afford the cost of electric cars without the support of state subsidies.
Carlos Tavares, chief executive of Stellantis, said: “The most significant problem of electrification is the affordability for the middle classes.
“That's what we are now fighting against – how fast can we reduce the costs to bring the EV [electric vehicle] to the level of affordability that people can pay for without subsidies.”
The up-front cost of plug-in vehicles has become unaffordable for many as rampant inflation makes models even more expensive. For example, a Volkswagen Golf costs from around £25,000, while a similarly-sized all-electric VW ID.3 starts at about £36,400. Prices for Nissan's battery-powered Leaf start at £29,000, while its combustion engine model Juke starts at £20,700.
At the same time, falling prices at the pump means many drivers are holding onto petrol and diesel cars for longer.
After rocketing following Russia’s invasion of Ukraine, petrol prices have declined from highs of more than 191 pence per litre in the summer to an average of 148.4 pence per litre. Meanwhile, diesel prices have fallen to the lowest level since just after the start of the Ukraine war.
Higher wholesale gas prices have also driven up electricity prices, making it most expensive to charge an electric vehicle both at home and on the road.
A lack of charging points on Britain's roads have also put the adoption of plug-in vehicles under strain. Just one new public charger was built for every 53 electric cars sold last year, according to the Society of Motor Manufacturers and Traders (SMMT).
Full story
6) Welcome to Net Zero: BASF to cut 2,600 Jobs as energy crisis hits German industry
Bloomberg, 24 February 2023
The EV maker is also preparing to produce cell components such as electrodes, some of which will be sent to the U.S. from its site in Gruenheide in the state of Brandenburg, the spokesperson said.
Cars produced at the Brandenburg site, which is just outside Berlin, would in the "near future" contain batteries assembled locally, the spokesperson added.
"The focus of Tesla's cell production is currently in the United States due to the framework created by the United States Inflation Reduction Act (IRA)," the spokesperson said in a statement.
EU leaders have expressed concern that local content requirements of much of the $369 billion of subsidies in the IRA will encourage companies to abandon Europe for the United States.
Full story
3) Audi mulls U.S. factory as Biden's green subsidies draw German carmakers
Automotive News Europe, 24 February 2023
Audi may build a factory in the U.S. in light of the Inflation Reduction Act, it said, the latest company to consider investments in the country to take advantage of the offered under the Inflation Reduction Act (IRA).
The Volkswagen Group brand sold around 190,000 cars in the U.S. last year, accounting for 11 percent of its total sales.
Audi does not have a plant in the U.S. and is at present not eligible for tax incentives and subsidies offered under IRA for vehicles sourced and made in North America.
"The IRA has made building a U.S. plant for electric cars very attractive," Audi CEO Markus Duesmann said in an interview with German newspaper Frankfurter Allgemeine Sonntagszeitung in comments that were later confirmed by the company.
Duesmann said that a decision had not yet been made but that the IRA made it far more attractive to build electric vehicles in the U.S. Asked whether Audi would build a plant itself or do so together with other VW brands, Duesmann said: "Both are possible. But the probability that we do it within the group is high."
Duesmann's remarks reinforce comments made in October to Automotive News by Oliver Hoffmann, head of technical development for Audi, who said the company was considering a U.S. assembly plant in the U.S.
Full story
4) Expert sees increasing risks for battery investments in Germany
Deutsche Press Agentur, 26 February 223
Automotive expert Ferdinand Dudenhöffer sees growing risks for investments like those made by U.S. electric carmaker Tesla in battery production in Germany.
"We believe that the ramp-up of electric mobility will be disrupted - partly because subsidies have been cut in Germany," the director of CAR - Center Automotive Research in Duisburg told the Deutsche Presse-Agentur. "This makes internal combustion vehicles cheaper again for customers. With that, you need fewer batteries in Europe." At the same time, he said, there are high electricity prices in Germany.
Tesla has shifted priority for battery manufacturing to the U.S. because of tax reasons, leaving open when complete batteries will be manufactured in Germany. However, the company does not want to abandon this production in Germany: The plan is still to manufacture complete batteries in Grünheide, the company says. The focus of cell production is currently in the U.S. because of the U.S. framework with tax breaks for battery production, it said.
Dudenhöffer spoke of a deterioration for the location. He had made similar comments in the "Süddeutsche Zeitung" (Wednesday). "Especially the decision of Tesla should be taken very seriously in Berlin," the economist told dpa. If U.S. President Joe Biden's so-called inflation-fighting law remains as it is, he said, German automakers will try to install batteries in the United States. "If production capacity is not built up in Europe, or built up later, you usually run behind in terms of economies of scale."
The auto expert believes the situation is further complicated by increased energy costs as a result of the Ukraine war in Germany. "This puts us at a great disadvantage, especially in cell production," Dudenhöffer said. "I wouldn't rule out Tesla taking another look at this investment decision."
Full story
5) Middle classes cannot afford electric cars, warns Vauxhall owner
The Daily Telegraph, 23 February 2023
Demand for electric cars slumps as energy crisis makes them more expensive to run
Motorists are rapidly losing interest in electric cars as the cost of power surges and petrol and diesel prices continue to fall, the AA has suggested.
The proportion of car buyers considering purchasing an electric model this year has slumped to less than a fifth compared with one in four a year ago, its research found.
It came as the boss of Stellantis, which owns Vauxhall, warned that the middle classes cannot afford the cost of electric cars without the support of state subsidies.
Carlos Tavares, chief executive of Stellantis, said: “The most significant problem of electrification is the affordability for the middle classes.
“That's what we are now fighting against – how fast can we reduce the costs to bring the EV [electric vehicle] to the level of affordability that people can pay for without subsidies.”
The up-front cost of plug-in vehicles has become unaffordable for many as rampant inflation makes models even more expensive. For example, a Volkswagen Golf costs from around £25,000, while a similarly-sized all-electric VW ID.3 starts at about £36,400. Prices for Nissan's battery-powered Leaf start at £29,000, while its combustion engine model Juke starts at £20,700.
At the same time, falling prices at the pump means many drivers are holding onto petrol and diesel cars for longer.
After rocketing following Russia’s invasion of Ukraine, petrol prices have declined from highs of more than 191 pence per litre in the summer to an average of 148.4 pence per litre. Meanwhile, diesel prices have fallen to the lowest level since just after the start of the Ukraine war.
Higher wholesale gas prices have also driven up electricity prices, making it most expensive to charge an electric vehicle both at home and on the road.
A lack of charging points on Britain's roads have also put the adoption of plug-in vehicles under strain. Just one new public charger was built for every 53 electric cars sold last year, according to the Society of Motor Manufacturers and Traders (SMMT).
Full story
6) Welcome to Net Zero: BASF to cut 2,600 Jobs as energy crisis hits German industry
Bloomberg, 24 February 2023
“High energy prices are now putting an additional burden on profitability and competitiveness in Europe,” BASF Chief Executive Officer Martin Brudermüller said
BASF SE plans to cut 2,600 jobs and reduce production in Germany as Europe’s biggest chemical producer braces itself for a future without cheap Russian gas.
The company is closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in 700 job cuts at its main Ludwigshafen site in Germany.
BASF also forecast lower earnings this year and said it will end a stock buyback early because of a deteriorating global economy. The shares fell as much as 7% in Frankfurt, the most since June.
Overall, the cuts will reduce BASF’s workforce by about 2% through 2024. They’re some of the biggest yet by a German company amid an energy crisis prompted by Russia’s invasion of Ukraine, and more are set to follow. Chemical maker Lanxess AG has said investments will go to more competitive locations including the US, while foreign manufacturers with operations in the country, including Dow Inc. and Ford Motor Co., have announced thousands of job reductions.
“High energy prices are now putting an additional burden on profitability and competitiveness in Europe,” BASF Chief Executive Officer Martin Brudermüller said in a statement in which he also cited “overregulation, slow and bureaucratic permitting processes, and in particular, high costs for most production input factors.”
Full story
see also: BASF to downsize ‘permanently’ in Europe. World’s biggest chemicals company says high energy costs make region increasingly uncompetitive
7) Much of German industry unlikely to survive Net Zero as it faces $1 trillion bill to plug massive power gap
Bloomberg, 25 February 2023
Germany has set aside more than €260 billion ($275 billion) to deal with the immediate risks of an energy crisis triggered by Russia’s war in Ukraine, but the ultimate fix will be much costlier — if the country can pull it off at all.
The pending price tag for future-proofing the country’s energy system is projected to amount to over $1 trillion by 2030, according to BloombergNEF. The costs include investments in upgrading power grids and above all new generation to manage the phase out of nuclear and coal plants, handle increased demand from electric cars and heating systems, and meet climate commitments.
The transition will require the installation of solar panels covering the equivalent of 43 soccer fields and 1,600 heat pumps every day. It also needs 27 new onshore and four offshore wind plants to be built per week, according to a wish list presented by Chancellor Olaf Scholz during a recent visit to Volkswagen AG’s headquarters in Wolfsburg.
“This is a bold undertaking — possibly the boldest project since the reconstruction of Germany,” Vice Chancellor Robert Habeck, who oversees climate and energy policy, said earlier this month.
Around 250 gigawatts of new capacity will have to be installed by 2030 — when power demand is expected to be about a third higher than it is now — according to estimates from Germany’s network regulator and think tank Agora Energiewende.
To put the scale of the challenge in context, the required generation is enough to cover current household demand for all 448 million people in the European Union. The additions will be a mix of renewables and gas-fired plants — that might one day be converted to run on hydrogen.
It will be a long road to get there. This week, the government announced it will prepare tenders this year for gas plants that account for about a tenth of that capacity. And for renewable expansion, setting up a single wind mast can takes as long as seven years to clear Germany’s red tape.
BASF SE’s plans to cut 2,600 jobs as it faces strains from the energy crisis is a sign of the urgency. The chemical giant’s operations in Germany swung to a loss during the second half, and it’s now closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in 700 job cuts at its main Ludwigshafen site.
Full story
8) Joseph C. Sternberg: The Ukraine War lesson Europe refuses to learn
The Wall Street Journal, 23 February 2023
BASF SE plans to cut 2,600 jobs and reduce production in Germany as Europe’s biggest chemical producer braces itself for a future without cheap Russian gas.
The company is closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in 700 job cuts at its main Ludwigshafen site in Germany.
BASF also forecast lower earnings this year and said it will end a stock buyback early because of a deteriorating global economy. The shares fell as much as 7% in Frankfurt, the most since June.
Overall, the cuts will reduce BASF’s workforce by about 2% through 2024. They’re some of the biggest yet by a German company amid an energy crisis prompted by Russia’s invasion of Ukraine, and more are set to follow. Chemical maker Lanxess AG has said investments will go to more competitive locations including the US, while foreign manufacturers with operations in the country, including Dow Inc. and Ford Motor Co., have announced thousands of job reductions.
“High energy prices are now putting an additional burden on profitability and competitiveness in Europe,” BASF Chief Executive Officer Martin Brudermüller said in a statement in which he also cited “overregulation, slow and bureaucratic permitting processes, and in particular, high costs for most production input factors.”
Full story
see also: BASF to downsize ‘permanently’ in Europe. World’s biggest chemicals company says high energy costs make region increasingly uncompetitive
7) Much of German industry unlikely to survive Net Zero as it faces $1 trillion bill to plug massive power gap
Bloomberg, 25 February 2023
Germany has set aside more than €260 billion ($275 billion) to deal with the immediate risks of an energy crisis triggered by Russia’s war in Ukraine, but the ultimate fix will be much costlier — if the country can pull it off at all.
The pending price tag for future-proofing the country’s energy system is projected to amount to over $1 trillion by 2030, according to BloombergNEF. The costs include investments in upgrading power grids and above all new generation to manage the phase out of nuclear and coal plants, handle increased demand from electric cars and heating systems, and meet climate commitments.
The transition will require the installation of solar panels covering the equivalent of 43 soccer fields and 1,600 heat pumps every day. It also needs 27 new onshore and four offshore wind plants to be built per week, according to a wish list presented by Chancellor Olaf Scholz during a recent visit to Volkswagen AG’s headquarters in Wolfsburg.
“This is a bold undertaking — possibly the boldest project since the reconstruction of Germany,” Vice Chancellor Robert Habeck, who oversees climate and energy policy, said earlier this month.
Around 250 gigawatts of new capacity will have to be installed by 2030 — when power demand is expected to be about a third higher than it is now — according to estimates from Germany’s network regulator and think tank Agora Energiewende.
To put the scale of the challenge in context, the required generation is enough to cover current household demand for all 448 million people in the European Union. The additions will be a mix of renewables and gas-fired plants — that might one day be converted to run on hydrogen.
It will be a long road to get there. This week, the government announced it will prepare tenders this year for gas plants that account for about a tenth of that capacity. And for renewable expansion, setting up a single wind mast can takes as long as seven years to clear Germany’s red tape.
BASF SE’s plans to cut 2,600 jobs as it faces strains from the energy crisis is a sign of the urgency. The chemical giant’s operations in Germany swung to a loss during the second half, and it’s now closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in 700 job cuts at its main Ludwigshafen site.
Full story
8) Joseph C. Sternberg: The Ukraine War lesson Europe refuses to learn
The Wall Street Journal, 23 February 2023
The lesson Europe absolutely refuses to learn: Green energy is incompatible with energy security, which makes it incompatible with national or continental security.
Perhaps we were all slightly unfair to Europe. In the immediate aftermath of Russia’s invasion of Ukraine a year ago, many observers had low expectations for how politicians and voters on the Continent would respond to the first war of its kind in nearly 80 years. Europeans have actually begun absorbing one of the two great lessons from this disaster. Unfortunately, they’re strenuously resisting the other.
Focusing first on the positive, the war has caused Europeans (mostly) to internalize that they do indeed inhabit a dangerous world — and, more to the point, a dangerous neighborhood.
Americans shouldn’t underestimate how shocking a new war on European soil has been to Western Europeans, let alone such a war perpetrated by a power with which they were accustomed to doing profitable business. The shock isn’t only the war, but its brutality. It’s likely that historians will come to view the release in April of photographic evidence of Russian war crimes in the Ukrainian town of Bucha as a key moment. So too with reports that Russian bombs targeted seemingly any apartment block or hospital they could find.
It’s no use noting that Europeans should have known better about the ends and means of Vladimir Putin’s regime. The reality is that despite the evidence of Chechnya and Georgia, to cite only two examples, they didn’t.
But now they are starting to. The dawning realization has manifested itself in a growing willingness to supply Ukraine with weapons even at the cost of antagonizing Mr. Putin, in Swedish and Finnish determination to join the North Atlantic Treaty Organization, in Berlin’s promise to expand German military spending, in Europe’s newfound wariness of repeating in China the strategic and commercial mistakes it made with Russia.
And yet. It understates the problem to suggest Europe’s prior lack of interest in strategy and defense arose only because the Continent foolishly bought into end-of-history malarkey after the fall of the Soviet Union. A more practical motivation was that the end of history happens to be cheap: Resources once devoted to defending Europe from the vicissitudes of “history” could instead be diverted to social projects.
European voters and politicians over the past year began the difficult task of deciding what they might be willing to do for their own and their neighbors’ defense. But they haven’t seriously discussed the far trickier question of what they are prepared not to do — in terms of social-welfare projects, green-energy boondoggles or the like—to pay for it. Expect this argument to become fiercer, and the sense of purpose less sure, as rising interest rates trigger acute fiscal strains.
Speaking of energy boondoggles, that is the lesson Europe absolutely refuses to learn: Green energy is incompatible with energy security, which makes it incompatible with national or continental security.
I know, I know—disruption of the supply of energy imports from Russia is supposed to have highlighted the necessity of developing wind and solar (and now hydrogen) as a local alternative. Except that these energy sources are more costly and less stable than fossil-fuel or nuclear workhorses. They are worse for the environment once one considers the mess made while mining and refining the rare-earth minerals that go into renewable tech. And since China controls much of the global supply chain for those minerals, green energy merely replicates in Asia the form of energy dependence Europe now loudly bemoans regarding Russia.
A serious European leader would point out that energy security that holds advanced economies hostage to the weather and Beijing is no security at all. Such a leader would instead make the case for exploiting European sources of shale gas that could power an economy such as Germany’s for decades, or nuclear. Someone might even point out that rare-earth deposits exist in Europe and tapping them is a central component of any wind-and-solar plan worth taking seriously.
Alas, European leaders are proving deeply unserious. A year ago in this space, I hinted that one post-Ukraine bellwether would be whether Berlin could make its peace at long last with nuclear energy. It hasn’t, despite a panicked decision in the autumn to extend the service of its three remaining reactors a little longer.
There is some ground for optimism to the extent that now Europe’s energy neuroses at least are controversial in a way they weren’t before. A pro-nuclear coalition in Germany slowly is finding its voice, and a tentative debate about shale-gas fracking has begun in that country as well.
From the Ukraine war’s earliest days one suspected Europe’s problem wouldn’t be ignorance of the dangers facing it, but rather a refusal to address them. The surprise of the past year has been that this refusal persists even as Europe—and not just Ukraine — pays the price for the Continent’s perverse willingness to go dark before it gets smart.
Perhaps we were all slightly unfair to Europe. In the immediate aftermath of Russia’s invasion of Ukraine a year ago, many observers had low expectations for how politicians and voters on the Continent would respond to the first war of its kind in nearly 80 years. Europeans have actually begun absorbing one of the two great lessons from this disaster. Unfortunately, they’re strenuously resisting the other.
Focusing first on the positive, the war has caused Europeans (mostly) to internalize that they do indeed inhabit a dangerous world — and, more to the point, a dangerous neighborhood.
Americans shouldn’t underestimate how shocking a new war on European soil has been to Western Europeans, let alone such a war perpetrated by a power with which they were accustomed to doing profitable business. The shock isn’t only the war, but its brutality. It’s likely that historians will come to view the release in April of photographic evidence of Russian war crimes in the Ukrainian town of Bucha as a key moment. So too with reports that Russian bombs targeted seemingly any apartment block or hospital they could find.
It’s no use noting that Europeans should have known better about the ends and means of Vladimir Putin’s regime. The reality is that despite the evidence of Chechnya and Georgia, to cite only two examples, they didn’t.
But now they are starting to. The dawning realization has manifested itself in a growing willingness to supply Ukraine with weapons even at the cost of antagonizing Mr. Putin, in Swedish and Finnish determination to join the North Atlantic Treaty Organization, in Berlin’s promise to expand German military spending, in Europe’s newfound wariness of repeating in China the strategic and commercial mistakes it made with Russia.
And yet. It understates the problem to suggest Europe’s prior lack of interest in strategy and defense arose only because the Continent foolishly bought into end-of-history malarkey after the fall of the Soviet Union. A more practical motivation was that the end of history happens to be cheap: Resources once devoted to defending Europe from the vicissitudes of “history” could instead be diverted to social projects.
European voters and politicians over the past year began the difficult task of deciding what they might be willing to do for their own and their neighbors’ defense. But they haven’t seriously discussed the far trickier question of what they are prepared not to do — in terms of social-welfare projects, green-energy boondoggles or the like—to pay for it. Expect this argument to become fiercer, and the sense of purpose less sure, as rising interest rates trigger acute fiscal strains.
Speaking of energy boondoggles, that is the lesson Europe absolutely refuses to learn: Green energy is incompatible with energy security, which makes it incompatible with national or continental security.
I know, I know—disruption of the supply of energy imports from Russia is supposed to have highlighted the necessity of developing wind and solar (and now hydrogen) as a local alternative. Except that these energy sources are more costly and less stable than fossil-fuel or nuclear workhorses. They are worse for the environment once one considers the mess made while mining and refining the rare-earth minerals that go into renewable tech. And since China controls much of the global supply chain for those minerals, green energy merely replicates in Asia the form of energy dependence Europe now loudly bemoans regarding Russia.
A serious European leader would point out that energy security that holds advanced economies hostage to the weather and Beijing is no security at all. Such a leader would instead make the case for exploiting European sources of shale gas that could power an economy such as Germany’s for decades, or nuclear. Someone might even point out that rare-earth deposits exist in Europe and tapping them is a central component of any wind-and-solar plan worth taking seriously.
Alas, European leaders are proving deeply unserious. A year ago in this space, I hinted that one post-Ukraine bellwether would be whether Berlin could make its peace at long last with nuclear energy. It hasn’t, despite a panicked decision in the autumn to extend the service of its three remaining reactors a little longer.
There is some ground for optimism to the extent that now Europe’s energy neuroses at least are controversial in a way they weren’t before. A pro-nuclear coalition in Germany slowly is finding its voice, and a tentative debate about shale-gas fracking has begun in that country as well.
From the Ukraine war’s earliest days one suspected Europe’s problem wouldn’t be ignorance of the dangers facing it, but rather a refusal to address them. The surprise of the past year has been that this refusal persists even as Europe—and not just Ukraine — pays the price for the Continent’s perverse willingness to go dark before it gets smart.
9) Energy companies are scaling back oil and gas investment in high-tax Britain
Financial Times, 27 February 2023
Financial Times, 27 February 2023
Oil and gas companies are scaling back North Sea operations and prioritising investment outside the UK because of the government’s windfall taxes, the industry’s trade body has warned.
David Whitehouse, the new chief executive of Offshore Energies UK, said 95 per cent of members surveyed had been “negatively impacted” by the levy and were “looking to invest elsewhere”, adding that “this leaves the UK reliant on overseas imports and puts the UK’s energy security at risk”.
The energy profits levy was introduced last year to capture more of the bumper profits made by oil and gas producers following a surge in prices after Russia’s invasion of Ukraine. The government has since raised the levy, bringing the total tax rate on the sector to 75 per cent, although there is also a generous investment incentive that allows a 91p tax saving for every pound invested in the UK.
Harbour Energy, the biggest oil and gas producer in the North Sea, is planning to cut back and review its North Sea operations while TotalEnergies of France, another big player in British waters, is cutting investment in the UK by 25 per cent as a result of the windfall tax.
EnQuest has deferred drilling at its Kraken oilfield as a result of the levy and US-owned Apache has cancelled a drilling contract in the North Sea, arguing the tax had made the region “less competitive”.
Whitehouse warned that the “super tax is hitting all offshore companies hard, large and small, not just those who make headlines”.
Full story
10) Steve Goreham: Green Energy: The greatest wealth transfer in history
Master Resource, 21 February 2023
We are in the midst of history’s greatest wealth transfer. Government subsidized wind systems, solar arrays, and electric vehicles overwhelmingly benefit the wealthy members of society and rich nations. The poor and middle class pay for green energy programs with higher taxes and higher electricity and energy costs. Developing nations suffer environmental damage to deliver mined materials needed for renewables in rich nations.
Since 2000, the world has spent more than $5 trillion on green energy. More than 300,000 wind turbines have been erected, millions of solar arrays were installed, more than 25 million electric vehicles (EVs) have been sold, hundreds of thousands of acres of forest were cut down to produce biomass fuel, and about three percent of agricultural land is now used to produce biofuel for vehicles. The world spends about $1 trillion per year on green energy. Government subsidies run about $200 billion annually, with more than $1 trillion in subsidies spent over the last 20 years.
World leaders obsess over the need for a renewable energy transition to save the planet from human-caused global warming. Governments deliver an endless river of cash to promote adoption of green energy. The Inflation Reduction Act of 2022 provided $370 billion in subsidies and loans for renewables and EVs. But renewable subsidies and mandates overwhelmingly favor the rich members of society at the expense of the poor.
Wind systems receive production tax credits, property tax exemptions, and sometimes receive payments even when not generating electricity. Landowners receive as much as $8,000 per turbine each year from leases for wind systems on their land. Lease income can be quite high for a landowner with many turbines. In England, ordinary taxpayers pay hundreds of millions of pounds per year in taxes that are funneled as subsidies to wind companies and wealthy land owners.
In the US, 39 states currently have net metering laws. Net metering provides a credit for electricity generated by rooftop solar systems that is fed back into the grid. Solar generators typically get credits at the retail electricity rate, about 14 cents per kilowatt-hour. This is a subsidized rate, which is more than double the roughly five cents per kilowatt-hour earned by power plants. Apartment residents and homeowners that cannot afford to install rooftop solar pay higher electricity bills to subsidize homes that receive net metering credits. Rooftop solar owners also receive federal and state tax incentives, another wealth transfer from ordinary citizens.
US federal subsidies of up to $7,500 for each electric car purchased, along with additional state subsidies, directly benefit EV buyers. The average price of an EV in the US last year was $66,000, which is out of reach for most drivers. A 2021 University of Chicago study found that California EV owners only drive 5,300 miles per year, less than half the mileage for a typical car. Most electric cars in the US are second cars for the rich.
A mid-size electric car needs a battery that weighs about a 1,000 pounds to provide acceptable driving range. Because of battery weight, EVs tend to be about 50 percent heavier than gasoline cars, which causes increased road damage. But EVs don’t pay the road tax included in the price of every gallon of gasoline. EVs should pay higher road taxes than traditional cars, but today this cost is borne by everyday gasoline car drivers.
Renewable systems require huge amounts of special metals. Electric car batteries need cobalt, nickel, and lithium to achieve high energy density and performance. Magnets in wind turbines require rare earth metals, such as neodymium and dysprosium. Large quantities of copper are essential for EV engines, batteries, wind and solar arrays, and electricity transmission systems to connect to remote wind and solar sites. According to the International Energy Agency, an EV requires about six times the special metals of a gasoline or diesel car. A wind array requires more than ten times the metals of a natural gas power plant on a delivered-electricity basis. The majority of these metals are mined in developing countries.
Almost 70 percent of cobalt is mined in the Democratic Republic of the Congo. Indonesia produces more than 30 percent of the world’s nickel. Chile produces 28 percent of the copper. China produces 60 percent of the rare earth metals. These nations struggle with serious air and water pollution from mining operations. Workers in mines also suffer from poor working conditions and the use of forced labor and child labor practices. But apparently no cost is too great so that rich people in developed nations can drive a Tesla.
To top it off, the European Union recently approved a Carbon Border Adjustment Mechanism (CBAM). The CBAM will tax goods coming from poor nations which aren’t manufactured using low-carbon processes. CBAM revenues will be a great source of funds for Europe’s green energy programs that benefit the wealthy.
Full post
11) Have We All Gone Mad? Why groupthink is rising and how to stop it
The New Culture Forum
David Whitehouse, the new chief executive of Offshore Energies UK, said 95 per cent of members surveyed had been “negatively impacted” by the levy and were “looking to invest elsewhere”, adding that “this leaves the UK reliant on overseas imports and puts the UK’s energy security at risk”.
The energy profits levy was introduced last year to capture more of the bumper profits made by oil and gas producers following a surge in prices after Russia’s invasion of Ukraine. The government has since raised the levy, bringing the total tax rate on the sector to 75 per cent, although there is also a generous investment incentive that allows a 91p tax saving for every pound invested in the UK.
Harbour Energy, the biggest oil and gas producer in the North Sea, is planning to cut back and review its North Sea operations while TotalEnergies of France, another big player in British waters, is cutting investment in the UK by 25 per cent as a result of the windfall tax.
EnQuest has deferred drilling at its Kraken oilfield as a result of the levy and US-owned Apache has cancelled a drilling contract in the North Sea, arguing the tax had made the region “less competitive”.
Whitehouse warned that the “super tax is hitting all offshore companies hard, large and small, not just those who make headlines”.
Full story
10) Steve Goreham: Green Energy: The greatest wealth transfer in history
Master Resource, 21 February 2023
We are in the midst of history’s greatest wealth transfer. Government subsidized wind systems, solar arrays, and electric vehicles overwhelmingly benefit the wealthy members of society and rich nations. The poor and middle class pay for green energy programs with higher taxes and higher electricity and energy costs. Developing nations suffer environmental damage to deliver mined materials needed for renewables in rich nations.
Since 2000, the world has spent more than $5 trillion on green energy. More than 300,000 wind turbines have been erected, millions of solar arrays were installed, more than 25 million electric vehicles (EVs) have been sold, hundreds of thousands of acres of forest were cut down to produce biomass fuel, and about three percent of agricultural land is now used to produce biofuel for vehicles. The world spends about $1 trillion per year on green energy. Government subsidies run about $200 billion annually, with more than $1 trillion in subsidies spent over the last 20 years.
World leaders obsess over the need for a renewable energy transition to save the planet from human-caused global warming. Governments deliver an endless river of cash to promote adoption of green energy. The Inflation Reduction Act of 2022 provided $370 billion in subsidies and loans for renewables and EVs. But renewable subsidies and mandates overwhelmingly favor the rich members of society at the expense of the poor.
Wind systems receive production tax credits, property tax exemptions, and sometimes receive payments even when not generating electricity. Landowners receive as much as $8,000 per turbine each year from leases for wind systems on their land. Lease income can be quite high for a landowner with many turbines. In England, ordinary taxpayers pay hundreds of millions of pounds per year in taxes that are funneled as subsidies to wind companies and wealthy land owners.
In the US, 39 states currently have net metering laws. Net metering provides a credit for electricity generated by rooftop solar systems that is fed back into the grid. Solar generators typically get credits at the retail electricity rate, about 14 cents per kilowatt-hour. This is a subsidized rate, which is more than double the roughly five cents per kilowatt-hour earned by power plants. Apartment residents and homeowners that cannot afford to install rooftop solar pay higher electricity bills to subsidize homes that receive net metering credits. Rooftop solar owners also receive federal and state tax incentives, another wealth transfer from ordinary citizens.
US federal subsidies of up to $7,500 for each electric car purchased, along with additional state subsidies, directly benefit EV buyers. The average price of an EV in the US last year was $66,000, which is out of reach for most drivers. A 2021 University of Chicago study found that California EV owners only drive 5,300 miles per year, less than half the mileage for a typical car. Most electric cars in the US are second cars for the rich.
A mid-size electric car needs a battery that weighs about a 1,000 pounds to provide acceptable driving range. Because of battery weight, EVs tend to be about 50 percent heavier than gasoline cars, which causes increased road damage. But EVs don’t pay the road tax included in the price of every gallon of gasoline. EVs should pay higher road taxes than traditional cars, but today this cost is borne by everyday gasoline car drivers.
Renewable systems require huge amounts of special metals. Electric car batteries need cobalt, nickel, and lithium to achieve high energy density and performance. Magnets in wind turbines require rare earth metals, such as neodymium and dysprosium. Large quantities of copper are essential for EV engines, batteries, wind and solar arrays, and electricity transmission systems to connect to remote wind and solar sites. According to the International Energy Agency, an EV requires about six times the special metals of a gasoline or diesel car. A wind array requires more than ten times the metals of a natural gas power plant on a delivered-electricity basis. The majority of these metals are mined in developing countries.
Almost 70 percent of cobalt is mined in the Democratic Republic of the Congo. Indonesia produces more than 30 percent of the world’s nickel. Chile produces 28 percent of the copper. China produces 60 percent of the rare earth metals. These nations struggle with serious air and water pollution from mining operations. Workers in mines also suffer from poor working conditions and the use of forced labor and child labor practices. But apparently no cost is too great so that rich people in developed nations can drive a Tesla.
To top it off, the European Union recently approved a Carbon Border Adjustment Mechanism (CBAM). The CBAM will tax goods coming from poor nations which aren’t manufactured using low-carbon processes. CBAM revenues will be a great source of funds for Europe’s green energy programs that benefit the wealthy.
Full post
11) Have We All Gone Mad? Why groupthink is rising and how to stop it
The New Culture Forum
Interview with GWPF chairman Dr. Jerome Booth, former chairman of Anglia Ruskin University as well as a British economist, author & emerging markets investor.
In his new book "Have We All Gone Mad? Why Groupthink is Rising and How to Stop it", Dr. Booth investigates why some of us have abandoned reason in favour of trite memes, intolerance and hatred. Have we all gone mad? Or can we identify the patterns and causes of what is happening and try to stop it?
Dr. Booth argues that, whilst we like to think of ourselves as rational, human beings are fundamentally irrational creatures – and nowhere is that more apparent than in the fug of groupthink we see around us, from the boardroom to social media. Of the various forms of collective irrationality, groupthink is particularly dangerous. It involves adherence to a faulty consensus, often has a binary moral dimension (one is seen as either virtuous or evil) and is sustained through fear to challenge.
Counter-intuitively, the most intelligent and erudite amongst us are particularly susceptible, and when groupthink takes hold, vigorous efforts are made to shut down debate and to bully and punish transgressors. As a result, toleration, liberalism, history, reason and science are under threat. Mass groupthink amongst both the elite and the masses affects millions of people. It has led to financial mismanagement leading up to the 2008 crisis and beyond; poor decision-making at the onset of Covid-19; exaggerated, unchallenged claims which have motivated nonsensical policies; and distortions in academia and journalism. To order Dr. Booth's book, or for more information, please see here: Have We All Gone Mad? Why groupthink is rising and how to stop it
Watch the full interview here
12) And finally: China's real agenda: Ramping up coal plant approvals despite emissions pledge
AFP, 27 February 2023
In his new book "Have We All Gone Mad? Why Groupthink is Rising and How to Stop it", Dr. Booth investigates why some of us have abandoned reason in favour of trite memes, intolerance and hatred. Have we all gone mad? Or can we identify the patterns and causes of what is happening and try to stop it?
Dr. Booth argues that, whilst we like to think of ourselves as rational, human beings are fundamentally irrational creatures – and nowhere is that more apparent than in the fug of groupthink we see around us, from the boardroom to social media. Of the various forms of collective irrationality, groupthink is particularly dangerous. It involves adherence to a faulty consensus, often has a binary moral dimension (one is seen as either virtuous or evil) and is sustained through fear to challenge.
Counter-intuitively, the most intelligent and erudite amongst us are particularly susceptible, and when groupthink takes hold, vigorous efforts are made to shut down debate and to bully and punish transgressors. As a result, toleration, liberalism, history, reason and science are under threat. Mass groupthink amongst both the elite and the masses affects millions of people. It has led to financial mismanagement leading up to the 2008 crisis and beyond; poor decision-making at the onset of Covid-19; exaggerated, unchallenged claims which have motivated nonsensical policies; and distortions in academia and journalism. To order Dr. Booth's book, or for more information, please see here: Have We All Gone Mad? Why groupthink is rising and how to stop it
Watch the full interview here
12) And finally: China's real agenda: Ramping up coal plant approvals despite emissions pledge
AFP, 27 February 2023
BEIJING: China last year approved the largest expansion of coal-fired power plants since 2015, according to a study published Monday (Feb 27), despite its vow to begin phasing down the use of the fossil fuel in just three years.
The coal power capacity that China began building in 2022 was six times as much as that in the rest of the world combined, the report by the Centre for Research on Energy and Clean Air (CREA) in Finland and the Global Energy Monitor (GEM) added.
"China continues to be the glaring exception to the ongoing global decline in coal plant development," GEM research analyst Flora Champenois said.
"The speed at which projects progressed through permitting to construction in 2022 was extraordinary."
China is one of the world's biggest emitters of the greenhouse gases driving climate change, such as carbon dioxide (CO2).
President Xi Jinping has pledged that China will peak its CO2 emissions between 2026 to 2030 and reduce them to net zero by 2060, moves seen as essential for keeping global temperature rise well below two degrees Celsius.
The report warned that even if Beijing sticks to those commitments, the current coal power expansion will make meeting them "more complicated and costly".
A total of 106 GW of new coal power projects were approved in 2022 - the equivalent of two large coal plants per week - it said.
Plants accounting for around a third of that capacity have already begun construction, with some gaining permits, securing financing and breaking ground "within a matter of months".
China relies on coal for nearly 60 per cent of its electricity.
Most of the new coal projects have been approved in provinces hit by crippling electricity shortages due to record heatwaves in the last two years.
Full story
The coal power capacity that China began building in 2022 was six times as much as that in the rest of the world combined, the report by the Centre for Research on Energy and Clean Air (CREA) in Finland and the Global Energy Monitor (GEM) added.
"China continues to be the glaring exception to the ongoing global decline in coal plant development," GEM research analyst Flora Champenois said.
"The speed at which projects progressed through permitting to construction in 2022 was extraordinary."
China is one of the world's biggest emitters of the greenhouse gases driving climate change, such as carbon dioxide (CO2).
President Xi Jinping has pledged that China will peak its CO2 emissions between 2026 to 2030 and reduce them to net zero by 2060, moves seen as essential for keeping global temperature rise well below two degrees Celsius.
The report warned that even if Beijing sticks to those commitments, the current coal power expansion will make meeting them "more complicated and costly".
A total of 106 GW of new coal power projects were approved in 2022 - the equivalent of two large coal plants per week - it said.
Plants accounting for around a third of that capacity have already begun construction, with some gaining permits, securing financing and breaking ground "within a matter of months".
China relies on coal for nearly 60 per cent of its electricity.
Most of the new coal projects have been approved in provinces hit by crippling electricity shortages due to record heatwaves in the last two years.
Full story
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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