Category Archives: Energy
Andrew Pendleton (New Economics Foundation) reminds us that since Margaret Thatcher first stood on the steps of Number 10 in 1979, successive UK governments have chosen to withdraw all but the barest bones of support from Britain’s foundational industries, of which steel is one. He questions whether any owner of steel manufacturers in the UK could thrive in the hostile environment UK governments have created.
Failed by the current government’s blind faith in markets, Pendleton writes, the people of Scunthorpe and many other places have had no voice whatsoever in how the economy was run, until ‘the blunt instrument of the EU referendum’. The loss of this significant company will intensify the sense of loss that contributed to the Brexit vote
There are risks in selling to the Turkish Military Pension Fund or to the Chinese Jingye Group, about which very little is known, industrially, but the interest of foreign buyers suggests that British Steel is seen as a potentially viable asset.
Many tonnes of steel will be needed to build a cleaner economy – for wind turbines, electric vehicles and the rail lines made in Scunthorpe, critical to a decarbonised economy. As Pendleton points out, steel production is ‘problematic’ for climate change – but steel production in Scunthorpe can be ‘greened’ by investing to reduce its carbon emissions, eventually reaching zero as coal-free production (below) becomes the norm.
In Germany, Thyssenkrupp recently demonstrated running a steel blast furnace completely on hydrogen – opening up the prospect of zero-emissions steel production by using renewable hydrogen.
Hydrogen will become cheaper as current methods, which rely on creating hydrogen fuel from purified water, are superseded by less expensive technologies such as one being developed by Stanford researchers, who have been separating hydrogen and oxygen gas from seawater via electricity.
And millions of tonnes of carbon used in shipping will be saved by using steel close to where it is manufactured
Pendleton sees the current economic model, ‘now the default preference of our policy-makers’, as absurd; in Fife, steel fabrication firm BiFab is in mothballs (right) while energy giant EDF imports the casings for the turbines on its new offshore wind farm from Indonesia.
He points out that Indonesia and some of our European neighbours’ governments habitually intervene to ensure that ‘foundational industries’ have guaranteed supply chains and amply-filled order books.
British Steel owners Greybull, a private investment company which owns many other industries, are unlikely to be seriously affected, but the company’s workforce, its suppliers, Scunthorpe and the wider economy will. It will be a disaster, politically and economically. Andrew Pendleton ends:
“Nothing short of immediate nationalisation is needed; anything less will be a betrayal of a whole town and will send shockwaves through the UK’s industrial heartlands . . .
“It is not too late for the government to step in and take the company over, which would have the immediate effect of keeping people in work and the economy of a town afloat. This is absolutely government’s proper role. But it shouldn’t stop there. After nationalisation should come a three-pronged approach:
- focus on industrial strategy for British Steel in order to secure its supply chains
- fill up its order book with a proactive procurement policy.
- and create a worker owned company who could then benefit from an ownership dividend
“Given the UK’s need to invest and build green infrastructure, such as railways, steel is of national strategic importance”.
Read Andrew Pendleton’s article here.
Over the past few years we’ve seen a trend in which the Labour Party has become Greener and the Green Party has become “Leftier”. I fervently wish for further rapprochement.
While feeling despair at the head-in-sand attitudes and empty rhetoric in much of Westminster, Whitehall and the City – especially the City – I was enthralled by a presentation given in my constituency of Stroud last month by Alan Simpson, Jeremy Corbyn and John McDonnell’s advisor on climate change and sustainable economics. If anyone is unfamiliar with his policy ideas, I urge them to look him up and read these essays.
A future Labour government will do its utmost to adopt Simpson’s plans, which include:
- local renewal energy cooperatives,
- an agricultural policy reset to penalise high greenhouse gas emissions,
- a far more locally-based economy (community wealth building – thriving in many locations and now to be adopted in Stroud),
- a far more integrated, publicly-owned transport system…
- and of course real measures to curb tax “avoidance” by the heavyweight national and global corporations, and tackle our hideous income inequality.
- First and foremost though – greenhouse emissions must be HALVED every ten years.
We should all be taking notice of the wonderful Greta Thunberg’s message
Real change can’t come too soon, and the only way we’re ever going to see real change in the UK is to put a Labour/Green government? into power at the earliest possible opportunity.
I can’t see how diluting the non-Conservative vote at the next general election is going to achieve anything except more Tory-led acceleration to destruction.
I realise some will find their tribal loyalties tested – but the nightmare we’ve created transcends such petty concerns.
Media 104: The fight-back? Seriously flawed FT article on the next 30 years of fossil fuelled energy
The message from the article’s author, Nick Butler: “Loved or not, the energy companies will still be giving us products we need and they will thrive over the next three decades . . . Wind and solar power are of limited value in meeting industrial energy requirements”.
He stresses the continuing weighting of investment in favour of oil and gas against renewables and focuses on the latest long-term international outlook, which “paints a picture of the world to 2050, on the basis of current policy, reasonable expectations of economic and population growth across the world”.
Sounds good: but this report “comes from the US Energy Information Administration — an independent agency in September”. However, according to its hyperlink and Investopedia, the Energy Information Administration (EIA) is a government agency formed in 1977.
In addition to this incorrect information, the author attribution – ‘energy commentator for the FT and chair of The Policy Institute at King’s College London’ – fails to add his significant previous employment as Senior Policy Adviser in the Prime Ministers policy unit and BP’s Group Vice President for Strategy and Policy.
Not so: a scroll through the report saw no input from such companies and a word search of the report, using the names of three of the largest oil companies, found ‘no results’.
He concedes that the energy transition is indeed happening (see Bloomberg, above) but asserts that its impact is small and “on this analysis will largely remain focused on the generation of electricity”.
The report, Butler continues, gives a picture of two very different worlds.
“On the one hand, in the developed OECD countries energy demand in volume terms thanks to efficiency gains, minimal population growth and public policy — is static to falling and the supply is getting progressively cleaner. In the rapidly growing Asian economies, population increases and the desire to escape poverty are pushing up both demand and emissions shows an inherently unsustainable future. The trends it describes are a recipe for serious global warming and climate instability.”
As the website of UK Oil & Gas PLC (UKOG) reminds us, there is no alternative (TINA): oil is indispensable: it heats homes, provides fuel for water, air and road transport and is used in plastics, fertilisers, detergents, paints and medicines.
Is Butler unaware of research under way to redesign many of these products to eliminate oil use. The use of electric heating is growing and of electric road and waterway transport, mainly ferries? And though emissions will be reduced by increasing localisation of supplies, there will be some need for clean shipping; for nearly three years the first Chinese 2000-tonne electric cargo ship has been in business. Japan and Norway are also working in this sector, with Japan’s Komatsu Ltd developing its first electric-powered digger.
Many commentators see the need to phase out long-distance air travel, but there will always be the need for some air transport during emergencies and the BBC reports progress towards such a capability: July’s Paris Airshow saw the launch of the world’s first all-electric nine-passenger aircraft for which orders are now being placed
Years ago, Dave Lindorff wrote about ‘ecological cataclysm’: “it is useful to look at the hypocrisy of the energy companies when it comes to an even worse crisis threatening life itself on the planet – rapid climate change due to increasing carbon in the atmosphere”.
His advice is more reliable than Butler’s: Watch What Big Oil Does, Not What It Pays to Have Said.
In 2018, one of the longest dry spells on record left part of the Rhine in Germany at record low levels for months, forcing freighters to reduce their cargo or stop using the river altogether. Some inland ports lay idle and it is estimated that millions of tons of goods had to be transported by rail or road, raising costs significantly – twice or three times as much by rail and around five times as much by road, according to Handelsblatt Today.
The Rhine is vitally important to life and commerce in the region. Roughly 80% of the 223 million tons of cargo transported by ship in Germany each year travels the Rhine, which links the country’s industrial heartland to Belgium, the Netherlands and the North Sea. Parts of the Danube and the Elbe – Germany’s other major rivers – were also drying up.
The slump in the river’s water levels dented Germany’s economic growth by 0.4% in the final quarter of 2018 and by 0.3% in the preceding three months, according to estimates from JPMorgan economist Greg Fuzesi in January. Fuzesi said at the time he anticipated a 0.55% contribution to GDP in the first quarter of this year as the river’s water levels normalize. At least 0.7 percentage points had been shaved off economic growth last year, adding to a series of shocks that almost tipped the nation into a recession.
- Ships carrying the large and heavy components of a wind farm could no longer reach Kubler’s Mannheim terminal.
- Because they cannot be carried on rail, or for more than a couple of miles on roads, Kübler’s storage area at its terminal lay empty.
- This stopped the building of the wind farm.
- A trade group in Germany put farmers’ losses at several billion dollars.
- The German chemical giant BASF had to decrease production at one of its plants because the Rhine, whose water it uses to cool production, was too low.
- Gas stations in the region that relied on tankers to deliver from refineries in the Netherlands ran out of fuel.
- About half of Germany’s river ferries stopped running, according to the Federal Waterways and Shipping Administration
- River cruise ships had to transport their passengers by bus for parts of their journey.
- Thousands of fish in the Swiss section of the river died because of the heat and low oxygen levels.
- In November, natural gas prices increased 13% throughout Europe as coal barges could not reach coal-powered plants.
- The world’s largest chemical company BASF, which operates the world’s largest integrated chemical plant on the western bank of the Rhine, said the overall cost of 2018 dry season was $285 million.
- Steel maker ThyssenKrupp could not receive raw materials to one of its mills in Duisburg, forcing the company to delay its shipments to customers including automotive giant Volkswagen.
- Contargo, which usually moves approximately 50,000 containers a month on around 40 barges, was forced to reduce its operations to three barges. Its statement noted the situation had become so extreme that barges could no longer navigate the Middle Rhine without danger.
- Tourism was among the hardest hit sectors since the river is frequently used by boats cruising up and down the Rhine to visit castles, vineyards and other sights.
In January and February this year, Rhine barge operators introduced a low water surcharge on exports and imports, as – we noted – did Montreal shipping companies, when, due to the lower water level of the St Lawrence river, ships had a limited loading capacity and fewer containers could be loaded on board,.
Bloomberg reported that water levels at many Rhineland locations were now back to normal for the time of year and barges that handle hundreds of fuel shipments up and down the river each year were able to reach all destinations fully loaded — something they had not been able to do for months, according to Rotterdam-based broker Riverlake Barging.
BASF’s CEO Martin Brudermueller is calling for new locks and dams to be built to keep the river navigable in dry season. The shipping lane could be made deeper, but that would take years, if not decades, and would cost millions.
“Our research shows an increase in instability,” said Hagen Koch, who studies rivers at the Potsdam Institute for Climate Impact Research. “The extremes are going to happen more often.” The Rhine’s flow relies not just on annual rainfall, but also on enormous long-term reserves of water in the Alps. Melting snow and glaciers, as well as Lake Constance, feed the upper parts of the river, but with climate change, those reserves are lower. There are reasons to believe such weather will become more frequent with a warming climate.
He reports that a study by parliament’s international development committee, chaired by MP Stephen Twigg (left), concluded that the government needed more joined-up thinking when it came to climate change policy: “MPs have lambasted an “incoherent” aid policy in which Britain allocates billions to tackling climate change abroad while spending the same amount supporting fossil fuel projects”.
UKEF allocates billions to tackling climate change abroad but gives the same amount to fossil fuel projects.
Evidence had been presented that between 2010 and 2016 UK Export Finance (UKEF), which supports trade abroad, spent £4.8 billion on schemes that contributed to carbon emissions. These included financing for offshore oil and gas extraction in Ghana, Colombia and Brazil. A sum, almost identical to the £4.9 billion, was spent by different agencies from 2011-17 on supporting projects to tackle climate change in developing countries.
The committee said: “The only context in which it is acceptable for UK aid to be spent on fossil fuels is if this spend is ultimately in support of a transition away from fossil fuels and as part of a strategy to pursue net zero global emissions by 2050 . . . Currently, the support provided to the fossil fuel economy in developing countries by UK Export Finance is damaging the coherence of the government’s approach to combating climate change and this needs to be urgently rectified.”
UKEF, the much-criticised and renamed Export Credits Guarantee Department, is the UK’s export credit agency which underwrites loans and insurance for risky export deals as part of efforts to boost international trade.
The committee also found that other wings of the UK overseas development sector, including groups such as the Prosperity Fund, which supports economic growth, were backing carbon-intensive projects.
In October one such proposal was announced: the financing of an expansion of an oil refinery in Bahrain which would allow its total output to increase up to a maximum of 380,000 barrels per day
“Given the urgency and scale of the challenge, spending climate finance has to be more than a box-ticking exercise to meet a commitment,” the committee wrote. “Climate finance must be spent strategically, it needs to be spent with urgency and it has to be transformative.”
Representatives from the Grantham Research Institute (LSE) (a site well worth visiting) gave evidence to the committee. They were critical of the latest economic strategy from DFiD in which, they pointed out, climate change “only receives a brief mention under the sector priorities of ‘agriculture’ and ‘infrastructure, energy and urban development’, while ‘extractive industries’ including oil, gas and mining are highlighted as a priority sector for support with no mention of climate change considerations”.
Mr Twigg said that the UK policy of reaching “net zero emissions” should extend to the government’s work abroad, as well as at home. “It is welcome that in recent weeks climate change has taken its rightful place at the top of the news agenda,” he said. “The scale and seriousness of the challenge to be confronted must be reinforced and reflected upon daily if we are to take meaningful steps to combat it.
Rory Stewart, the international development secretary (left), said that the report “makes for sobering reading . . . Although we have done much already to tackle climate change, I feel strongly we can do more. I am going to make tackling climate change increasingly central to DFID’s work. As international development secretary I want to put climate and the environment at the heart of what this government does to protect our planet for future generations. As climate extremes worsen it is the world’s poorest countries and communities which will be most affected, but this is a global issue.”
Adam McGibbon, Climate Change Campaigner at Global Witness, said: “As the world reels from the news that we have twelve years to prevent catastrophic climate breakdown, today’s announcement by the government is staggering. The UK claims to be a climate leader, but it continues to spend billions pumping fossil fuels out of the ground abroad.
And in the Western Daily Press, 6 May 2019, Paul Halas from Stroud describes government policy-making as being, “hobbled by its vested interests and metaphorical flat-Earthers”. He ended:
“In times of war, research, development and manufacture increase exponentially. What faces us now is no less than a war against Climate Change, which will take an unprecedented effort and unanimity of purpose to win. It’s not one we can afford to lose”.
On Tuesday, the Institute for Public Policy Research launches its Environmental Justice Commission (EJC) and people are coming together across Conservative, Labour and Green parties to serve on it – leading figures from business, academia, civil society, trade unions, youth and climate activism.
Ed Miliband, Labour MP for Doncaster North and a former leader of the Labour party; Caroline Lucas, Green MP for Brighton Pavilion and Laura Sandys, a former Conservative MP for South Thanet, have written about this and many readers’ comments are well worth reading. Important points made are summarised below
Too often the issue of climate change seems marginal to the public’s concerns, when it is in fact central.
This will be done by committing to a Green New Deal (GND), with an unprecedented mobilisation and deployment of resources to tackle the accelerating climate crisis and transform our economy and society for all. Read more on the Green New Deal website.
Its aims are to:
- mobilise a carbon army of workers to retrofit and insulate homes, cutting bills, reducing emissions and making people’s lives better
- move to sustainable forms of transport and zero-carbon vehicles as quickly as possible, saving thousands of lives from air pollution
- end the opposition to onshore wind power and position ourselves as a global centre of excellence for renewable manufacturing
- protect and restore threatened habitats and
- secure major transitions in agriculture and diets that are essential if we are to meet our obligations.
People have been asking how we can revive communities that have been left out of prosperity. They ask whether they and their children will be able to get work and also what the quality of that work will be and what skills will be needed. ECJ believes GND has the potential to do this.
The areas of policy mentioned above answer the immediate economic concerns of people for jobs and hope. Green jobs must be secure and decently paid, with a central role for trade unions in a just transition for all workers and communities affected.
The commission will aim to help the UK to take a lead, believing that there is economic and societal advantage in doing so. An increasing number of people, young and old, see that the way we run our economy is damaging our climate, our environment and our society, but that, crucially, it is within our power to change it for the better. And change it we must.
The cartoon by Joel Pett (above), Pulitzer Prize-winning editorial cartoonist for the Lexington Herald-Leader, states that whether global warming is real or not, the proposed measures are beneficial to everyone.
On the left of the cartoon a man asks, “What if it’s a big hoax and we create a better world for nothing?” On the right the question is answered in the form of a list on a screen, showing what would be gained:
- energy independence,
- preserve rainforest,
- green jobs,
- livable cities,
- clean water and air,
- healthy children, etc., etc.
When discussing how society should respond to climate change, consensus might well be achieved by presenting this cartoon’s message.
Media 97: An inconvenient truth? A Dutch reader notes UK’s ZERO coverage of 40,000 climate change demo in Amsterdam
She writes: “*zero* coverage in the UK over climate demo Sunday 10th in Amsterdam?! 40,000 people at climate change demo in Amsterdam and it RAINED heavily all day … we got soaked to our underwear …)!!”
An online search today saw no UK coverage on the first four ‘result’ pages – only American and European coverage.
Adding wryly: “When 40 yellow vests get together it’s shared all over the planet…
The demonstration, the first of its kind in the Netherlands, drew around 40,000 people despite heavy rain, according to Agence France-Presse.
“The high turnout is the proof that people now want a decisive policy on climate from the government,” Greenpeace, one of the march organizers, said in a statement.
The Netherlands could be especially vulnerable to the rising tides brought on by climate change. Much of the country already sits below sea level, and some of its land is sinking.
While the U.S. has been backpedalling out of global climate change agreements like the Paris accord, Dutch lawmakers have passed ambitious climate change laws, seeking a 95% reduction of the 1990 emissions levels by 2050.
In January, however, a Dutch environmental research agency said the government is lagging behind its goals. “We are under sea level, so we really need to do something about it,” said a 21-year-old climate studies student at Amsterdam University.
Students around the world have been leading protests to prompt their governments to address climate change. A worldwide school strike is planned for later this week. Greta Thunberg, a Swedish teenager widely known for her climate change activism, said on Twitter that at least 82 countries plan to participate in the upcoming protest.
Will British media fail to report the forthcoming school strikes as well as this one?
Inrix has analysed traffic density in more than 200 cities in 38 countries. In London drivers spent 227 hours a year in traffic and the cost was £4.9 billion, or £1,680 per driver due to lost productivity. Across Britain, the cost was £7.9 billion. After London the worst UK city was Birmingham, then Glasgow, Manchester, Bristol, Edinburgh, Sheffield, Leicester, Leeds and Liverpool. London has more traffic jams than any other city in western Europe and is the seventh most congested in the world. Read more on Inrix’ ‘scorecard’.
Graeme Paton, Transport Correspondent of the Times, reports on these research findings published today which show that drivers were stuck in traffic for 178 hours on average last year.
Trevor Reed, transport analyst at Inrix, said that if congestion is not addressed, it will continue to have serious consequences for national and local economies, businesses and citizens in the years to come.
‘Driven by necessity’ – poor public transport
RAC research has shown that drivers are becoming more reliant on their cars because of poor standards of public transport. Rod Dennis, spokesman for the RAC, said, “This is a serious concern when you consider the limited physical space in our cities and the growing pressures to move large numbers of people around to get to their places of work and leisure.
“Those cities that are best placed to grow will be those that are developing public transport systems that suit the needs of their citizens.”
To this end, a more reliable railway system, could attract drivers and large freight companies to use rail and more use should be made of the country’s waterway network. 22 British towns or cities already have water taxis, buses or ferries.
London leads the way, carrying passengers and freight by water
London’s river bus operator, MBNA Thames Clippers, alone carried more than 4 million passengers in 2018 and the city also leads the way in carrying bulky materials on its waterways instead of its roads.
Most readers will have noted the numbers of lorries amidst the traffic jams and experienced delays due to tailbacks of many miles due to slow-moving abnormal and sometimes hazardous loads.
Full use should be made of routes which can take such freight by water. Above: a transformer carried by Robert Wynn and Sons.
A forthcoming report (Gosling 2019) notes, in its Freight Carbon Review, “The Department for Transport explained in 2017 that waterways are ‘attractive for the environmental benefits they provide, and the reliable congestion-free freight access they offer over alternate modes’.”
Road users and all concerned about air-pollution will welcome action to transfer more freight from roads to inland waterways, a declared UK government objective.