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  • Energy Security : National Security #4

    Posted on November 29th, 2015 Jo No comments

    Previously, I summarised and sketched the situation regarding Europe’s policy of developing the “Southern Gas Corridor”, to provide Natural Gas supplies from resources that are not the Russian Federation and its satellite countries. My conclusion from a British perspective was that the United Kingdom should be very cautious in widening its military engagement in the region to include a proposed bombing campaign against Syria. Increasing violence in the region will harm energy transport projects and damage existing infrastructure. By way of example, renewed conflict between the Turkish government and the Kurdish Workers’ Party or PKK has been suggested as the incentive behind recent destruction of gas pipelines, events that have suspected of being assisted by Russian “forces”, an alliance that appears to have a history.

    The British Prime Minister David Cameron has recently made his case for an air campaign in Syria, and it is to this that I turn. It is a political document, and so naturally enough contains language that is contestable. For example, in the first paragraph, the Prime Minister writes, “Whether or not to use military force is one of the most significant decisions that any government takes. The need to do so most often arises because of a government’s first duty: the responsibility to protect its citizens.” The UK is already using military force across the border from Syria, in Iraq, as the document outlines later on, so it is curious that David Cameron feels he has to appeal to the Foreign Affairs Select Committee regarding very similar action in Syria. There is a significant level of evidence to reasonably argue that attacking Islamic State with an air campaign will lead to reprisal attacks in the UK from Islamic State sympathisers, so air strikes against Syria might damage national security in Britain.

    To understand this, you would need to understand the appeal that Islamic State philosophy has to a small group of deluded, desperate, brainwashed activists. For those who aren’t Islamic State adherents, it would be hard to understand the “death cult” fundamentalism enshrined in its philosophy, so it would be impossible to understand why there would be anyone prepared to sympathise with Islamic State and wish to support it by the use of massacre and suicide. But if you want to understand how provocation of Islamic State by aerial bombardment could precipitate violent responses on the streets of Europe, all you need to do is look at the evidence from Paris and Brussels coming in the last few weeks. When all the talk was about young people being seduced by the insane rhetoric of Islamic State and running away to fight in Syria, it all seemed harmless enough – although tragic and bewildering for their families. But now European nationals have returned home as secret trained suicide bombers, and recruited their peers and sometimes siblings and other relatives to the Islamic State cause, it’s no longer a sad tale of teenage and twenty-something obsession. To extend the British air campaign into Syria won’t fix this problem, neither will closing borders.

    When David Cameron says, “it is … vital that the Government can act to keep this country safe”, he says it in defence of the use of violent attack or “force”, but there are obviously more human, humane, cheaper, cyber, public relations, political ways to keep the UK safe. He writes, “Throughout Britain’s history, we have been called on time and again to make the hardest of decisions in defence of our citizens and our country”, but it appears that he hasn’t learned any lessons from the last century, especially the last 21 years. Every time that the UK has been involved in a major aerial bombardment campaign, things have gone badly, either for British armed forces, or British nationals – not to mention the citizens of other countries, who in some cases, if they’ve survived being carpet bombed, have been documented as starting to hate Britain because of British warfare. It’s a short step from hating Britain to sympathising with a rhetoric of anti-British violence, so it could be relatively rationally explained that British air campaigns of the last few decades have weakened our defences.

    David Cameron writes, “Today one of the greatest threats we face to our security is the threat from ISIL. We need a comprehensive response which seeks to deal with the threat that ISIL poses to us directly, not just through the measures we are taking at home, but by dealing with ISIL on the ground in the territory that it controls. It is in Raqqa, Syria, that ISIL has its headquarters, and it is from Raqqa that some of the main threats against this country are planned and orchestrated.” However, bombing Islamic State on the ground in the territory it controls won’t diminish the threats to the United Kingdom from Islamic State trained or inspired “operatives” and disciples who have never even travelled to the Middle East, and in fact, it is unlikely that any of the people living in the territory that Islamic State inhabits would have anything to do with violent attacks against the United Kingdom, inside the United Kingdom. The suicide bombers in Paris were not Syrian or Iraqi. And although Islamic State claimed responsibility for the attacks, it is unclear how Syrian and Iraqi leaders in Islamic State could have orchestrated them. What good would bombing Islamic State in Syria and Iraq do in making Britain safer ?

    David Cameron writes, “We must tackle ISIL in Syria, as we are doing in neighbouring Iraq, in order to deal with the threat that ISIL poses to the region and to our security here at home”, but you can’t fight an ideology with guns or silence their extremism with bombs. He also writes, “We have to deny a safe haven for ISIL in Syria. The longer ISIL is allowed to grow in Syria, the greater the threat it will pose”, but the question is, a threat to whom and what ?

    This is beginning to sound like the propaganda that was once designed to oppose the man who is still the official leader in Syria, Bashar al-Assad. And in fact, David Cameron’s appeal includes him later, when he says British aims should be to “secure a transition to an inclusive Government in Syria that responds to the needs of all the Syrian people and with which the international community could co-operate fully to help restore peace and stability to the whole country. It means continuing to support the moderate opposition in Syria, so that there is a credible alternative to ISIL and Assad.”

    Later again, he writes, “Some have argued that we should ally ourselves with Assad and his regime against the greater threat posed by ISIL, as the ‘lesser of two evils’. But this misunderstands the causes of the problem; and would make matters worse. By inflicting brutal attacks against his own people, Assad has in fact acted as one of ISIL’s greatest recruiting sergeants. We therefore need a political transition in Syria to a government that the international community can work with against ISIL, as we already do with the Government of Iraq.” There is also the comment, “Assad regime’s mass murder of its own people”.

    So it seems there has not been a reversal : Assad is still not in favour, despite Assad’s military campaign against Islamic State. Let’s just recap here on the “killing his own people” concept, an accusation levelled at the leaders of both Iraq and Libya before the UK bombed them. In Syria’s case, Assad’s repression of anti-government elements was accepted by the “international community” for some time, until the crackdown on the “Arab Spring” protests which lead to a civil war – during which, arguably, Assad’s forces committed crimes against humanity.

    But if you think about it, since the “Arab Spring” was possibly largely a result of the exercise of Internet-fed “soft power” by American intelligence agencies and their allies, it would be logical and reasonable for Assad to attempt to quell it, and to attempt to keep social stability. So how does that make Assad a bad person ? And what justifies the international community demanding that he be removed from power ? And why were no representatives of the Syrian government or any of the Syrian opposition parties – “anti-Assad forces” – invited to the International Syria Support Group (ISSG) in Vienna at the end of October 2015 ? David Cameron should not include the removal of Assad from leadership in his appeal to bomb Islamic State in Syria. The parties in the Syrian civil war need to come to a negotiated settlement, but this is a separate issue to the question of the UK fighting the influence of Islamic State by bombing in Syria.

    If Assad is not good enough for Syrian leadership, and the anti-Assad forces are not good enough for Syrian leadership, and Islamic State is not good enough for playing any part in Syrian governance, then what is David Cameron really arguing for ? The clue may lie in this, “putting Britain’s full diplomatic weight, as a full member of an international coalition, behind the new political talks – the Vienna process. It means working through these talks to secure a transition to an inclusive Government in Syria that responds to the needs of all the Syrian people and with which the international community could co-operate fully to help restore peace and stability to the whole country. It means continuing to support the moderate opposition in Syria, so that there is a credible alternative to ISIL and Assad. It means using our aid budget to alleviate the immediate humanitarian suffering. It means insisting, with other countries, on the preparation of a proper stabilisation and reconstruction effort in Syria once the conflict has been brought to an end. And it means continuing, and stepping up, our effort here at home to counter radicalisation.”

    Aside from the humour in trying to identify who is “moderate” in the Syrian conflict, since all the opposition groups appear to be belligerent and divisive, there is a commitment within a commitment here. What David Cameron is apparently arguing for is not only the involvement of British forces in an air campaign – but also an occupied Syria – occupied by the armed forces of the economically and politically powerful nations of the world. It’s worked so well in Iraq, of course (not), that it deserves to be replicated (not).

    But hang on – this is not Britain’s agenda – this is an American agenda – and it should be resisted.

    It would be very costly, not only economically, but also in terms of Britain’s reputation abroad. It could spark further hatred of the United Kingdom, and could lead to further acts of terror and sabotage in Europe. Do we really want to risk that ?

    How about a genuinely non-violent response to Islamic State ? Instead of interference with the state of Syria – which could well become destabilising – just look at Iraq and Libya.

    A common factor with Iraq and Libya is that energy production, storage, transmission, distribution and supply has obviously been affected by the warfare and uprisings in Syria – and it seems that Islamic State have been selling Syrian oil to finance their resistance to all the other militaries in the region. Some of that money could have been used to finance terrorism in other countries, as well.

    An American-led occupation of Syria would obviously assist in stabilising the energy sector, and ensuring safe passage for gas and oil, for example in pipelines and power grids. But Europe’s desire for Natural Gas from non-Russian sources should not be any kind of reason for the UK to bomb and occupy Syria.

  • Energy Security : National Security #3

    Posted on November 26th, 2015 Jo No comments

    Although the Autumn Statement and the Spending Review are attracting all the media and political attention, I have been more interested by the UK Government’s Security Review – or to give it is full title : the “National Security Strategy and Strategic Defence and Security Review 2015″, or (SDSR), document number Cm 9161.

    Its aim is stated in its sub-heading “A Secure and Prosperous United Kingdom”, but on matters of energy, I would suggest it fails to nail down security at all.

    In my analysis, having dealt with what appears to be a misunderstanding about the nature of hydrocarbon markets, I then started to address the prospect of Liquefied Natural Gas (LNG) imports from the United States.

    My next probe is into the global gas pipeline networks indicated by this mention of the “Southern Gas Corridor” in Section 3.40 : “…measures to protect and diversify sources of [energy] supply will become increasingly important, including the new Southern Corridor pipeline, US liquid natural gas (LNG) exports, further supplies of Australian LNG, and increased supply from Norway and North Africa.”

    First of all, and perhaps of secondmost importance, the “Southern Gas Corridor” is more of a European Union policy suite than an individual pipeline. In fact, it’s not just one pipeline – several pipelines are involved, some actual, some under construction, some cancelled, some renamed, some re-routed, and some whose development is threatened by geopolitical struggle and even warfare.

    It is this matter of warfare that is the most important in considering the future of Natural Gas being supplied to the European Union from the Caspian Sea region : Turkmenistan, Iran, Kazakhstan, Georgia and Azerbijan. Oh, and we should mention Uzbekistan, and its human rights abuses, before moving on. And Iraq and Syria – where Islamic State sits, brooding.

    Natural Gas is probably why we are all friends with Iran again. Our long-lasting dispute with Iran was ostensibly about nuclear power, but actually, it was all about Natural Gas. When Russia were our New Best Friend, Iran had to be isolated. But now Russia is being a tricky trading partner, and being beastly to Ukraine, Iran is who we’ve turned to, to cry on their shoulder, and beg for an alternative source of gas.

    So we’ve back-pedalled on the concept of waging economic or military conflict against Iran, so now we have a more southerly option for our massive East-to-West gas delivery pipeline project – a route that takes in Iran, and avoids passing through Georgia and Azerbaijan – where Russia could interfere.

    The problem with this plan is that the pipeline would need to pass through Syria and/or southern Turkey at some point. Syria is the country where Islamic State is currently being bombed by the United States and some European countries. And Turkey is the country where there has been a revival of what amounts pretty much to civil war with the Kurdish population – who also live in Iraq (and the edges of Syria and Iran).

    Russia is envious of the southerly Southern Gas Corridor plan, and jealous of its own version(s) of the gas-to-Europe project, and influence in Georgia and Azerbaijan. So perhaps we should not be surprised that Russia and Turkey have had several military and political stand-offs in the last few months.

    We in the United Kingdom should also be cautious about getting dragged into military action in Syria – if we’re thinking seriously about future energy security. Further destabilisation of the region through military upheaval would make it difficult to complete the Southern Gas Corridor, and make the European Union increasingly dependent on Russia for energy.

    In the UK, although we claim to use no Russian gas at all, we do get gas through the interconnectors from The Netherlands and Belgium, and they get gas from Russia, so actually, the UK is using Russian gas. The UK gets over half its Natural Gas from Norway, and Norway has been a strong producer of Natural Gas, so why should we be worried ? Well, it appears that Norwegian Natural Gas production may have peaked. Let’s re-visit Section 3.40 one more time : “…measures to protect and diversify sources of [energy] supply will become increasingly important, including the new Southern Corridor pipeline, US liquid natural gas (LNG) exports, further supplies of Australian LNG, and increased supply from Norway and North Africa.”

    The problem is that nobody can fight geology. If Norway has peaked in Natural Gas production, there is little that anyone can do to increase it, and even if production could be raised in Norway through one technique or another (such as carbon dioxide injection into gas wells), it wouldn’t last long, and wouldn’t be very significant. Norway is going to continue to supply gas to its other trading partners besides the UK, so how could the UK commandeer more of the Norwegian supply ? It seems likely that “increased supply from Norway” is just not possible.

    But back to the Southern Gas Corridor. It is in the United Kingdom’s security interests to support fresh gas supplies to the European Union. Because we may not be able to depend on Russia, we need the Southern Gas Corridor. Which is why we should think very, very carefully before getting involved in increased military attacks on Syria.

  • Energy Security, National Security #2

    Posted on November 24th, 2015 Jo No comments

    The UK Government’s Security Review (SDSR), published 23rd November 2015, regrettably shows traces of propaganda not supported by current data.

    For example, the report states in Section 3.40 that : “…measures to protect and diversify sources of [energy] supply will become increasingly important, including the new Southern Corridor pipeline, US liquid natural gas (LNG) exports, further supplies of Australian LNG, and increased supply from Norway and North Africa.”

    I have already addressed my recommendation that the writers of this report should be more careful to distinguish between Liquefied Natural Gas (LNG) which is a methane-rich product that can substitute for Natural Gas; and Natural Gas Liquids (NGLs) which is a methane-poor product that cannot substitute for Natural Gas.

    However, assuming that the writers of the report are talking about cryogenically stored and transported Natural Gas-sourced energy gases, there is a problem in assuming that the United States will be exporting any large amounts of LNG to Europe any time soon. In fact, there are several problems.

    Just because the business and political press have been touting the exciting prospect of US LNG exports, doesn’t mean that the data backs up this meme.

    First of all, although American Natural Gas production (gross withdrawals from oil and gas wells) continues to grow at a rate that appears unaffected by low Natural Gas prices, the production of shale gas appears to have plateau’d, which might well be related to Natural Gas prices.

    Secondly, although exports of Natural Gas as a whole and exports of Natural Gas by pipeline remain healthy, LNG exports have fallen since the heady days of 2010-2011.

    Next, although the oil and gas industry proposed lots of LNG export terminals, only a handful are being constructed, and there are already predictions that they will run under-capacity, or won’t get completed.

    And further, as regards potential future LNG customers, although China is rejecting LNG imports for a variety of reasons, mostly to do with falling economic growth rates, none of that LNG currently comes from the United States. And China is planning to develop its own onshore Natural Gas and will take LNG from the Australia/Indonesia region.

    The bulk of US LNG exports go to Taiwan and Japan, and Japan is unlikely to restart many nuclear power plants, so Japan will continue to need this gas.

    On top of all this, the United States is a very minor LNG exporter, so major change should be considered unlikely in the near term.

    And it any LNG is heading for Europe, it will probably end up in France, perhaps because they need a better backup plan for their turbulent nuclear power plants.

    All of which adds up to a puzzled look on my face. How can the British Government reasonably expect the commencement of significant quantities of American LNG exports to arrive in the UK ? The only reason they believe this is because there has been American propaganda, promulgated through media of all kinds, for the last five or so years, to convince the world that the USA can achieve greater energy independence through the “explosion” in shale gas production.

    It’s a story told by many successive US Governments – that the US can achieve greater energy independence, but the reality is very, very different.

    The UK Government should not believe any narrative of this nature, in my view, nor include it in national security analyses.

    …to be continued…

  • Energy Security, National Security #1

    Posted on November 24th, 2015 Jo No comments

    Our assiduous government in the United Kingdom has conducted a national security review, as they should, but it appears the collective intelligence on energy of the Prime Minister’s office, the Cabinet Office and the Foreign Commonwealth Office is on a scale of poor to dangerously out of date.

    No, LNG doesn’t stand for “liquid natural gas”. LNG stands for Liquefied Natural Gas. I think this report has confused LNG with NGLs.

    Natural Gas Liquids, or NGLs, are condensable constituents of gas-prone hydrocarbon wells. In other words, the well in question produces a lot of gas, but at the temperatures and pressures in the well underground, hydrocarbons that would normally be liquid on the surface are in the gas phase, underground. But when they are pumped/drilled out, they are condensed to liquids. So, what are these chemicals ? Well, here are the approximate Boiling Points of various typical fossil hydrocarbons, approximate because some of these molecules have different shapes and arrangements which influences their physical properties :-

    Boiling Points of Short-Chain Hydrocarbons
    Methane : approximately -161.5 degrees Celsius
    Ethane : approximately -89.0 degrees Celsius
    Propane : approximattely -42.0 degrees Celsius
    Butane : approximately -1.0 degrees Celsius
    Pentane : approximately 36.1 degrees Celsius
    Heptane : approximately 98.42 degrees Celsius

    You would expect NGLs, liquids condensed out of Natural Gas, to be mostly butane and heavier molecules, but depending on the techniques used – which are often cryogenic – some propane and ethane can turn up in NGLs, especially if they are kept cold. The remaining methane together with small amounts of ethane and propane and a trace of higher hydrocarbons is considered “dry” Natural Gas.

    By contrast, LNG is produced by a process that chills Natural Gas without separating the methane, until it is liquid, and takes up a much smaller volume, making it practical for transportation. OK, you can see why mistakes are possible. Both processes operate at sub-zero temperatures and result in liquid hydrocarbons. But it is really important to keep these concepts separate – especially as methane-free liquid forms of short-chain hydrocarbons are often used for non-energy purposes.

    Amongst other criticisms I have of this report, it is important to note that the UK’s production of crude oil and Natural Gas is not “gradually” declining. It is declining at quite a pace, and so imports are “certain” to grow, not merely “likely”. I note that Natural Gas production decline is not mentioned, only oil.

    …to be continued…

  • Paris, Nexus

    Posted on November 20th, 2015 Jo No comments

    When François Hollande, the French President, called the Friday 13th November 2015 attacks in Paris “an act of war”, I’m not sure if he could have guessed that many of those involved in the violence would turn out to be originally from Brussels. He couldn’t declare war against Belgium.

    For France to ramp up aerial bombardment of strongholds of Islamic State in Syria seems perhaps incongruous, when most of the attackers have been determined to be European and acting independently of any caliphate command.

    The Paris terror massacres, despite being “homegrown”, have impacted the whole world, because so many of the victims were tourists, students or other kinds of visitor or immigrant to France. And the cause promoted by the terrorists was also international – a kind of religiously-motivated death cult – although I’m sure no deity of any calibre would sanction such an abuse and termination of life.

    The events, besides the obvious violence, were intentionally cynically ironic – even down to the choice of the date. There was a certain flavour of American movie films about many of the details of the attacks, as if the terrorists were inspired by recent movie films, and sick minds sought to make life imitate art. For example, in the recent movie film “Spy”, one of the protagonists prevents a bomb being set off at a rock concert. And in the movie film “Spectre”, the bombing of a stadium is also narrowly averted. Islamic State are known for their mastery of social media and theatrically-produced videos – perhaps this Hollywoodisation should not be a surprise.

    Yet, despite the horror of these events, and the violent warfare and security lockdowns that could be unleashed in response, the Paris attacks must still be considered a symptom of something that poses less of a risk to European and global security than climate change.

    Climate change, like violent zealots, will kill indiscriminately, in all parts of the world, and in far greater numbers – people of all nations, creed and deed.

    Climate change is already destabilising countries, by affecting rainfall, crops and harvests, and this will inevitably lead to heightened levels of hunger, thirst and competition for resources; and so to conflict, and a new wave of climate refugees, which will place social burdens on all economies.

    Migration will add to security issues in host countries, not because of the attitudes of the refugees and migrants, but because of the time it takes to assimilate, and for migrants and native citizens to adapt.

    Added to which, climate change is likely to seriously impact global productivity, and this will make everybody poorer, and there is a natural association between rising poverty and rising crime.

    The Paris attacks may prove to have been funded by oil money, if there is a direct link between the attackers and Islamic State – which is making use of Syria’s petroleum to support its campaigns. And those who are buying that oil are essentially supporting the terrorism and conflict.

    Despite the severity of the violence being underpinned by this production and consumption of oil, its contribution to the risk of dangerous climate change is a far worse outcome.

    We have to look beyond the injustices and immorality of the current moment to the permanent damage of long-term environmental destabilisation.

    Humankind’s attempts to address climate change, and the terror attacks of an oil-sponsored death cult and its sympathisers, both make Paris their nexus this November. And because of the terror attacks, the democratic movement that plans to gather in Paris is more likely than ever to be disbanded.

    The official climate talks will go ahead, despite rumours and indications that they would be cancelled, but the civil society meetings, held outside the official venues, including the faith group “Pilgrimage to Paris” will be met with battle-ready security barriers and increased militarised policing aimed at breaking up mass gatherings. Lobbyists for the energy industry will be permitted to attend the official talks, but the ordinary citizens will be barred.

    Looking at the Paris attacks from a broad view, it is hard to understand why the violence was committed. I don’t know what the attackers hoped to achieve – was it perhaps a provocation – to engage the energy of more of the world’s military and police forces and deflect resources from ensuring long term security ? Do Islamic State hope to precipitate a global war and the end of the world ? They shouldn’t waste the lives of young brainwashed acolytes in suicide missions and violent attacks on innocents – the world is already burning its way through its fossil fuels to a climate changed hell on Earth.

    Although many of the impacts of Islamic State and climate change could be similar, there is a basic difference. Although Islamic State lives, and increasingly dies, through adherence to fake and misleading narratives, climate change is all too true a tale. Islamic State should not feel invincible in Raqqa – not because of drones and bombers – but because climate change will make Syria uninhabitable in all likelihood within 25 years.

    There are unlikely to be any bold new energy investment policies coming out of the Paris 2015 COP21 climate change talks : people still seem to be negotiating national contributions to adaptation funds instead of discussing how the oil, gas and coal industries will transition to low carbon energy. But at least we’re talking. It’s better than fighting.

  • The Great Policy Reset

    Posted on November 6th, 2015 Jo No comments

    Everything in the UK world of energy hit a kind of slow-moving nightmare when the Department of Energy and Climate Change stopped replying to emails a few months ago, claiming they were officially ordered to focus on the “Spending Review” – as known as “The Cuts” – as ordered by George Osborne, Chancellor of Her Majesty’s Treasury.

    We now know that this purdah will be terminated on 25th November 2015, when various public announcements will be made, and whatever surprises are in store, one thing is now for certain : all grapevines have been repeating this one word regarding British energy policy : “reset”.

    Some are calling it a “soft reset”. Some are predicting the demise of the entire Electricity Market Reform, and all its instruments – which would include the Capacity Auction and the Contracts for Difference – which would almost inevitably throw the new nuclear power ambition into a deep dark forgettery hole.

    A report back from a whispering colleague regarding the Energy Utilities Forum at the House of Lords on 4th November 2015 included these items of interest :-

    “…the cost of battery power has dropped to 10% of its value of a few years ago. National Grid has a tender out for micro-second response back up products – everyone assumes this is aimed at batteries but they are agnostic … There will be what is called a “soft reset” in the energy markets announced by the government in the next few weeks – no one knows what this means but obviously yet more tinkering with regulations … On the basis that diesel fuel to Afghanistan is the most expensive in the world (true), it has to be flown in, it has been seriously proposed to fly in Small Modular Nuclear reactors to generate power. What planet are these people living on I wonder ? … A lot more inter connectors are being planned to UK from Germany, Belgium Holland and Norway I think taking it up to 12 GWe … ”

    Alistair Phillips-Davies, the CEO of SSE (Scottish and Southern Energy), took part in a panel discussion at Energy Live News on 5th November 2015, in which he said that he was expecing a “reset” on the Electricity Market Reform (EMR), and that the UK Government were apparently focussing on consumers and robust carbon pricing. One view expressed was that the EMR could be moved away from market mechanisms. In other discussions, it was mentioned that the EMR Capacity Market Auction had focussed too much on energy supply, and that the second round would see a wider range of participants – including those offering demand side solutions.

    Energy efficiency, and electricity demand profile flattening, were still vital to get progress on, as the power grid is going to be more efficient if it can operate within a narrower band of demand – say 30 to 40 GW daily, rather than the currently daily swing of 20 to 50 GW. There was talk of offering changing flexible, personal tariffs to smooth out the 5pm 17:00 power demand peak, as price signalling is likely to be the only way to make this happen, and comments were made about how many computer geeks would be needed to analyse all the power consumption data.

    The question was asked whether the smart meter rollout could have the same demand smoothing effect as the Economy 7 tariff had in the past.

    The view was expressed that the capacity market had not provided enough by way of long-term price signals – particularly for investment in low carbon energy. One question raised during the day was whether it wouldn’t be better just to set a Europe-wide price on carbon and then let markets and the energy industry decide what to put in place ?

    So, in what ways could the British Government “reset” the Electricity Market Reform instruments in order to get improved results – better for pocket, planet and energy provision ? This is what I think :-

    1. Keep the Capacity Mechanism for gas

    The Capacity Mechanism was originally designed to keep efficient gas-fired power plants (combined cycle gas turbine, or CCGT) from closing, and to make sure that new ones were built. In the current power generation portfolio, more renewable energy, and the drive to push coal-fired power plants to their limits before they need to be closed, has meant that gas-fired generation has been sidelined, kept for infrequent use. This has damaged the economics of CCGT, both to build and to operate. This phenomenon has been seen all across Europe, and the Capacity Market was supposed to fix this. However, the auction was opened to all current power generators as well as investors in new plant, so inevitably some of the cash that was meant for gas has been snaffled up by coal and nuclear.

    2. Deflate strike prices after maximum lead time to generation

    No Contracts for Difference should be agreed without specifying a maximum lead time to initial generation. There is no good reason why nuclear power plants, for example, that are anticipated to take longer than 5 years to build and start generating should be promised fixed power prices – indexed to inflation. If they take longer than that to build, the power prices should be degressed for every year they are late, which should provide an incentive to complete the projects on time. These projects with their long lead times and uncertain completion dates are hogging all the potential funds for investment, and this is leading to inflexibility in planning.

    3. Offer Negative Contracts for Difference

    To try to re-establish a proper buildings insulation programme of works, projects should be offered an incentive in the form of contracts-for-energy-savings – in other words, aggregated heat savings from any insulation project should be offered an investment reward related to the size of the savings. This will not be rewarding energy production, but energy use reduction. Any tempering of gas demand will improve the UK’s balance of payments and lead to a healthier economy.

    4. Abandon all ambition for carbon pricing

    Trends in energy prices are likely to hold surprises for some decades to come. To attempt to set a price on carbon, as an aid to incentivising low carbon energy investment is likely to fail to set an appropriate investment differential in this environment of general energy pricing volatility. That is : the carbon price would be a market signal lost in a sea of other effects. Added to which, carbon costs are likely to be passed on to energy consumers before they would affect the investment decisions of energy companies.

  • A Partial Meeting of Engineering Minds

    Posted on July 14th, 2015 Jo No comments

    So I met somebody last week, at their invitation, to talk a little bit about my research into Renewable Gas.

    I can’t say who it was, as I didn’t get their permission to do so. I can probably (caveat emptor) safely say that they are a fairly significant player in the energy engineering sector.

    I think they were trying to assess whether my work was a bankable asset yet, but I think they quickly realised that I am nowhere near a full proposal for a Renewable Gas system.

    Although there were some technologies and options over which we had a meeting of minds, I was quite disappointed by their opinions in connection with a number of energy projects in the United Kingdom.

    Click to Read More !

  • DECC Dungeons and Dragnets

    Posted on July 14th, 2015 Jo No comments

    Out of the blue, I got an invitation to a meeting in Whitehall.

    I was to join industrial developers and academic researchers at the Department of Energy and Climate Change (DECC) in a meeting of the “Green Hydrogen Standard Working Group”.

    The date was 12th June 2015. The weather was sunny and hot and merited a fine Italian lemonade, fizzing with carbon dioxide. The venue was an air-conditioned grey bunker, but it wasn’t an unfriendly dungeon, particularly as I already knew about half the people in the room.

    The subject of the get-together was Green Hydrogen, and the work of the group is to formulate a policy for a Green Hydrogen standard, navigating a number of issues, including the intersection with other policy, and drawing in a very wide range of chemical engineers in the private sector.

    My reputation for not putting up with any piffle clearly preceded me, as somebody at the meeting said he expected I would be quite critical. I said that I would not be saying anything, but that I would be listening carefully. Having said I wouldn’t speak, I must admit I laughed at all the right places in the discussion, and wrote copious notes, and participated frequently in the way of non-verbal communication, so as usual, I was very present. At the end I was asked for my opinion about the group’s work and I was politely congratulational on progress.

    So, good. I behaved myself. And I got invited back for the next meeting. But what was it all about ?

    Most of what it is necessary to communicate is that at the current time, most hydrogen production is either accidental output from the chemical industry, or made from fossil fuels – the main two being coal and Natural Gas.

    Hydrogen is used extensively in the petroleum refinery industry, but there are bold plans to bring hydrogen to transport mobility through a variety of applications, for example, hydrogen for fuel cell vehicles.

    Clearly, the Green Hydrogen standard has to be such that it lowers the bar on carbon dioxide (CO2) emissions – and it could turn out that the consensus converges on any technologies that have a net CO2 emissions profile lower than steam methane reforming (SMR), or the steam reforming of methane (SRM), of Natural Gas.

    [ It’s at this very moment that I need to point out the “acronym conflict” in the use of “SMR” – which is confusingly being also used for “Small Modular Reactors” of the nuclear fission kind. In the context of what I am writing here, though, it is used in the context of turning methane into syngas – a product high in hydrogen content. ]

    Some numbers about Carbon Capture and Storage (CCS) used in the manufacture of hydrogen were presented in the meeting, including the impact this would have on CO2 emissions, and these were very intriguing.

    I had some good and useful conversations with people before and after the meeting, and left thinking that this process is going to be very useful to engage with – a kind of dragnet pulling key players into low carbon gas production.

    Here follow my notes from the meeting. They are, of course, not to be taken verbatim. I have permission to recount aspects of the discussion, in gist, as it was an industrial liaison group, not an internal DECC meeting. However, I should not say who said what, or which companies or organisations they are working with or for.

    Click to Read More !

  • Nuclear Power Is Not An Energy Policy

    Posted on June 23rd, 2015 Jo No comments

    The British Government do not have an energy policy. They may think they have one, and they may regularly tell us that they have one, but in reality, they don’t. There are a number of elements of regulatory work and market intervention that they are engaged with, but none of these by itself is significant enough to count as a policy for energy. Moreover, all of these elements taken together do not add up to energy security, energy efficiency, decarbonisation and affordable energy.

    What it takes to have an energy policy is a clear understanding of what is a realistic strategy for reinvestment in energy after the dry years of privatisation, and a focus on energy efficiency, and getting sufficient low carbon energy built to meet the Carbon Budget on time. Current British Government ambitions on energy are not realistic, will not attract sufficient investment, will not promote increased energy efficiency and will not achieve the right scale and speed of decarbonisation.

    I’m going to break down my critique into a series of small chunks. The first one is a quick look at the numbers and outcomes arising from the British Government’s obsessive promotion of nuclear power, a fantasy science fiction that is out of reach, not least because the industry is dog-tired and motheaten.

    Click to Read More !

  • Shell and BP : from “Delay and Deny” to “Delay and Distract”

    Posted on June 3rd, 2015 Jo No comments

    Shell, BP and some of their confederates in the European oil and gas industry have inched, or perhaps “centimetred”, forward in their narrative on climate change. Previously, the major oil and gas companies were regularly outed as deniers of climate change science; either because of their own public statements, or because of secretive support of organisations active in denying climate change science. It does seem, finally, that Shell in particular has decided to drop this counter-productive “playing of both sides”. Not that there are any “sides” to climate change science. The science on climate change is unequivocal : changes are taking place across the world, and recent global warming is unprecedented, and has almost definitely been attributed to the burning of fossil fuels and land use change.

    So Shell and BP have finally realised that they need to shed the mantle of subtle or not-so-subtle denial, although they cling to the shreds of dispute when they utter doubts about the actual numbers or impacts of global warming (for example : However, we have to grant them a little leeway on that, because although petrogeologists need to understand the science of global warming in order to know where to prospect for oil and gas, their corporate superiors in the organisation may not be scientists at all, and have no understanding of the global carbon cycle and why it’s so disruptive to dig up all that oil and gas hydrocarbon and burn it into the sky. So we should cut the CEOs of Shell and BP a little slack on where they plump for in the spectrum of climate change narrative – from “utter outright doom” to “trifling perturbation”. The central point is that they have stopped denying climate change. In fact, they’re being open that climate change is happening. It’s a miracle ! They have seen the light !

    But not that much light, though. Shell and BP’s former position of “scepticism” of the gravity and actuality of global warming and climate change was deployed to great effect in delaying any major change in their business strategies. Obviously, it would have been unseemly to attempt to transmogrify into renewable energy businesses, which is why anybody in the executive branches who showed signs of becoming pro-green has been shunted. There are a number of fairly decent scalps on the fortress pikes, much to their shame. Shell and BP have a continuing duty to their shareholders – to make a profit from selling dirt – and this has shelved any intention to transition to lower carbon energy producers. Granted, both Shell and BP have attempted to reform their internal businesses by applying an actual or virtual price on carbon dioxide emissions, and in some aspects have cleaned up and tidied up their mining and chemical processing. The worsening chemistry of the cheaper fossil fuel resources they have started to use has had implications on their own internal emissions control, but you have to give them credit for trying to do better than they used to do. However, despite their internal adjustments, their external-facing position of denial of the seriousness of climate change has supported them in delaying major change.

    With these recent public admissions of accepting climate change as a fact (although CEOs without appropriate science degrees irritatingly disagree with some of the numbers on global warming), it seems possible that Shell and BP have moved from an outright “delay and deny” position, which is to be applauded.

    However, they might have moved from “delay and deny” to “delay and distract”. Since the commencement of the global climate talks, from about the 1980s, Shell and BP have said the equivalent of “if the world is serious about acting on global warming (if global warming exists, and global warming is caused by fossil fuels), then the world should agree policy for a framework, and then we will work within that framework.” This is in effect nothing more than the United Nations Framework Convention on Climate Change (UNFCCC) has put forward, so nobody has noticed that Shell and BP are avoiding taking any action themselves here, by making action somebody else’s responsibility.

    Shell and BP have known that it would take some considerable time to get unanimity between governments on the reality and severity of climate change. Shell and BP knew that it would take even longer to set up a market in carbon, or a system of carbon dioxide emissions taxation. Shell and BP knew right from the outset that if they kept pushing the ball back to the United Nations, nothing would transpire. The proof of the success of this strategy was the Copenhagen conference in 2009. The next proof of the durability of this delaying tactic will be the outcomes of the Paris 2015 conference. The most that can come out of Paris is another set of slightly improved targets from governments, but no mechanism for translating these into real change.

    Shell and BP and the other oil and gas companies have pushed the argument towards a price on carbon, and a market in carbon, and expensive Carbon Capture and Storage technologies. Not that a price on carbon is likely to be anywhere near high enough to pay for Carbon Capture and Storage. But anyway, the point is that these are all distractions. What really needs to happen is that Shell and BP and the rest need to change their products from high carbon to low carbon. They’ve delayed long enough. Now is the time for the United Nations to demand that the fossil fuel companies change their products.

    This demand is not just about protecting the survival of the human race, or indeed, the whole biome. Everybody is basically on the same page on this : the Earth should remain liveable-inable. This demand for change is about the survival of Shell and BP as energy companies. They have already started to talk about moving their businesses away from oil to gas. There are high profile companies developing gas-powered cars, trains, ships and possibly even planes. But this will only be a first step. Natural Gas needs to be a bridge to a fully zero carbon world. The oil and gas companies need to transition from oil to gas, and then they need to transition to low carbon gas.

    Renewable Gas is not merely “vapourware” – the techniques and technologies for making low carbon gas are available, and have been for decades, or in some cases, centuries. Shell and BP know they can manufacture gas instead of digging it up. They know they can do the chemistry because they already have to do much of the same chemistry in processing fossil hydrocarbons now to meet environmental and performance criteria. BP has known since the 1970s or before that it can recycle carbon in energy systems. Shell is currently producing hydrogen from biomass, and they could do more. A price on carbon is not going to make this transition to low carbon gas. While Shell and BP are delaying the low carbon transition by placing focus on the price of carbon, they could lose a lot of shareholders who shy away from the “carbon bubble” risk of hydrocarbon investment. Shell and BP need to decide for themselves that they want to survive as energy companies, and go public with their plans to transition to low carbon gas, instead of continuing to distract attention away from themselves.

  • Why Shell is Wrong

    Posted on June 2nd, 2015 Jo No comments

    So, some people do not understand why I am opposed to the proposal for a price on carbon put forward by Royal Dutch Shell and their oil and gas company confederates.

    Those who have been following developments in climate change policy and the energy sector know that the oil and gas companies have been proposing a price on carbon for decades; and yet little has been achieved in cutting carbon dioxide emissions, even though carbon markets and taxes have been instituted in several regions.

    Supporters of pricing carbon dioxide emissions urge the “give it time” approach, believing that continuing down the road of tweaking the price of energy in the global economy will cause a significant change in the types of resources being extracted.

    My view is that economic policy and the strengthening of carbon markets and cross-border carbon taxes cannot provide a framework for timely and major shifts in the carbon intensity of energy resources, and here’s a brief analysis of why.

    1.   A price on carbon shifts the locus of action on to the energy consumer and investor

    A price on carbon could be expected to alter the profitability of certain fossil fuel mining, drilling and processing operations. For example, the carbon dioxide emissions of a “tank of gas” from a well-to-wheel or mine-to-wheel perspective, could be made to show up in the price on the fuel station forecourt pump. Leaving aside the question of how the carbon tax or unit price would be applied and redistributed for the moment, a price on carbon dioxide emissions could result in fuel A being more expensive than fuel B at the point of sale. Fuel A could expect to fall in popularity, and its sales could falter, and this could filter its effect back up the chain of production, and have implications on the capital expenditure on the production of Fuel A, and the confidence of the investors in investing in Fuel A, and so the oil and gas company would pull out of Fuel A.

    However, the business decisions of the oil and gas company are assumed to be dependent on the consumer and the investor. By bowing to the might god of unit price, Shell and its confederates are essentially arguing that they will act only when the energy consumers and energy investors act. There are problems with this declaration of “we only do what we are told by the market” position. What if the unit price of Fuel A is only marginally affected by the price on carbon ? What if Fuel A is regarded as a superior product because of its premium price or other marketing factors ? This situation actually exists – the sales of petroleum oil-based gasoline and diesel are very healthy, despite the fact that running a car on Natural Gas, biogas or electricity could be far cheaper. Apart from the fact that so many motor cars in the global fleet have liquid fuel-oriented engines, what else is keeping people purchasing oil-based fuels when they are frequently more costly than the alternative options ?

    And what about investment ? Fuel A might become more costly to produce with a price on carbon, but it will also be more expensive when it is sold, and this could create an extra margin of profit for the producers of Fuel A, and they could then return higher dividends to their shareholders. Why should investors stop holding stocks in Fuel A when their rates of return are higher ?

    If neither consumers nor investors are going to change their practice because Fuel A becomes more costly than Fuel B because of a price on carbon, then the oil and gas company are not going to transition out of Fuel A resources.

    For Shell to urge a price on carbon therefore, is a delegation of responsibility for change to other actors. This is irresponsible. Shell needs to lead on emissions reduction, not insist that other people change.

    2.   A price on carbon will not change overall prices or purchasing decsions

    In economic theory, choices about products, goods and services are based on key factors such as trust in the supplier, confidence in the product, availability and sustainability of the service, and, of course, the price. Price is a major determinant in most markets, and artificially altering the price of a vital commodity will certainly alter purchasing decisions – unless, that is, the price of the commodity in question increases across the board. If all the players in the field start offering a more expensive product, for example, because of supply chain issues felt across the market, then consumers will not change their choices.

    Now consider the global markets in energy. Upwards of 80% of all energy consumed in the global economy is fossil fuel-based. Putting a price on carbon will raise the prices of energy pretty much universally. There will not be enough cleaner, greener product to purchase, so most purchasing decisions will remain the same. Price differentiation in the energy market will not be established by asserting a price on carbon.

    A key part of Shell’s argument is that price differentiation will occur because of a price on carbon, and that this will drive behaviour change, and yet there is nothing to suggest it could do that effectively.

    3.   A price on carbon will not enable Carbon Capture and Storage

    Athough a key part of Shell’s argument about a price on carbon is the rationale that it would stimulate the growth in Carbon Capture and Storage (CCS), it seems unlikely that the world will ever agree to a price on carbon that would be sufficient to stimulate significant levels of CCS. A price on carbon will be deemed to be high enough when it creates a difference in the marginal extra production cost of a unit of one energy resource compared to another. A carbon price can only be argued for on the basis of this optimisation process – after all – a carbon price will be expected to be cost-efficient, and not punitive to markets. In other words, carbon prices will be tolerated if they tickle the final cost of energy, but not if they mangle with it. However, CCS could imply the use of 20% to 45% extra energy consumption at a facility or plant. In other words, CCS would create a parasitic load on energy resources that is not slim enough to be supported by a cost-optimal carbon price.

    Some argue that the technology for CCS is improving, and that the parasitic load of CCS at installations could be reduced to around 10% to 15% extra energy consumption. However, it is hard to imagine a price on carbon that would pay even for this. And additionally, CCS will continue to require higher levels of energy consumption which is highly inefficient in the use of resources.

    Shell’s argument that CCS is vital, and that a price on carbon can support CCS, is invalidated by this simple analysis.

    4.   Shell needs to be fully engaged in energy transition

    Calling for a price on carbon diverts attention from the fact that Shell itself needs to transition out of fossil fuels in order for the world to decarbonise its energy.

    Shell rightly says that they should stick to their “core capabilities” – in other words geology and chemistry, instead of wind power and solar power. However, they need to demonstrate that they are willing to act within their central business activities.

    Prior to the explosion in the exploitation of deep geological hydrocarbon resources for liquid and gas fuels, there was an energy economy that used coal and chemistry to manufacture gas and liquid fuels. Manufactured gas could still replace Natural Gas, if there are climate, economic or technological limits to how much Natural Gas can be resourced or safely deployed. Of course, to meet climate policy goals, coal chemistry would need to be replaced by biomass chemistry, and significant development of Renewable Hydrogen technologies.

    Within its own production facilities, Shell has the answers to meet this challenge. Instead of telling the rest of the world to change its economy and its behaviour, Shell should take up the baton of transition, and perfect its production of low carbon manufactured gas.

  • The Price on Carbon

    Posted on June 2nd, 2015 Jo No comments

    Although The Guardian newspaper employs intelligent people, sometimes they don’t realise they’ve been duped into acting as a mouthpiece for corporate propaganda. The “strapline” for the organisation is “Owned by no one. Free to say anything.”, and so it seemed like a major coup to be granted an interview with Ben Van Beurden of Royal Dutch Shell, recorded for a podcast that was uploaded on 29th May 2015.

    However, the journalists, outoing editor Alan Rusbridger, Damian Carrington and Terry McAllister probably didn’t fully appreciate that this was part of an orchestrated piece of public relations. The same day as the podcast was published, Shell, along with five other oil and gas companies wrote a letter to officials of the United Nations Framework Convention on Climate Change (UNFCCC).

    Favourable copy appeared in various places, for example, at Climate Central, The Daily Telegraph and in the Financial Times where a letter also appeared.

    In the letter to Christiana Figueres and Laurent Fabius of the UNFCCC, Shell and fellow companies BP, BG Group, Eni, Total and Statoil, wrote that they appreciate the risks of the “critical challenge” of climate change and that they “stand ready to play their part”. After listing their contributions towards a lower carbon energy economy, they wrote :-

    “For us to do more, we need governments across the world to provide us with clear, stable, long-term, ambitious policy frameworks. This would reduce uncertainty and help stimulate investments in the right low carbon technologies and the right resources at the right pace.”

    “We believe that a price on carbon should be a key element of these frameworks. If governments act to price carbon, this discourages high carbon options and encourages the most efficient ways of reducing emissions widely, including reduced demand for the most carbon intensive fossil fuels, greater energy efficiency, the use of natural gas in place of coal, increased investment in carbon capture and storage, renewable energy, smart buildings and grids, off-grid access to energy, cleaner cars and new mobility business models and behaviors.”

    The obvious problem with this call is that the oil and gas companies are pushing responsibility for change out to other actors in the economy, namely, the governments; yet the governments have been stymied at every turn by the lobbying of the oil and gas companies – a non-virtuous cycle of pressure. Where is the commitment by the oil and gas companies to act regardless of regulatory framework ?

    I think that many of the technological and efficiency gains mentioned above can be achieved without pricing carbon, and I also think that efforts to assert a price on carbon dioxide emissions will fail to achieve significant change. Here are my top five reasons :-

    1. Large portions of the economy will probably be ringfenced from participating in a carbon market or have exemptions from paying a carbon tax. There will always be special pleading, and it is likely that large industrial concerns, and centralised transportation such as aviation, will be able to beat back at a liability for paying for carbon dioxide emissions. Large industrial manufacture will be able to claim that their business is essential in sustaining the economy, so they should not be subject to a price on carbon. International industry and aviation, because of its international nature, will be able to claim that a carbon tax or a market in carbon could infringe their cross-border rights to trade without punitive regulatory charges.

    2. Those who dig up carbon will not pay the carbon price. Fossil fuel producers will pass any carbon costs placed on them to the end consumers of fossil fuels. A price on carbon will inevitably make the cost of energy more expensive for every consumer, since somewhere in the region of 80% of global energy is fossil fuel-derived. Customers do not have a non-carbon option to turn to, so will be forced to pay the carbon charges.

    3. A price on carbon dioxide emissions will not stop energy producers digging up carbon. An artificial re-levelising of the costs of high carbon energy will certainly deter some projects from going ahead, as they will become unprofitable – such as heavy oil, tar sands and remote oil, such as in the Arctic. However, even with jiggled energy prices from a price on carbon, fossil fuel producers will continue to dig up carbon and sell it to be burned into the sky.

    4. A price on carbon dioxide emissions is being touted as a way to incentivise carbon capture and storage (CCS) by the authors of the letter – and we’ve known since they first started talking about CCS in the 1990s that they believe CCS can wring great change. Yet CCS will only be viable at centralised facilities, such as mines and power plants. It will not be possible to apply CCS in transport, or in millions of homes with gas-fired boilers.

    5. A price on carbon dioxide emissions will not cause the real change that is needed – the world should as far as possible stop digging up carbon and burning it into the sky. What fossil carbon that still enters energy systems should be recycled where possible, using Renewable Gas technologies, and any other carbon that enters the energy systems should be sourced from renewable resources such as biomass.

  • Shell’s Public Relations Offensive #2

    Posted on June 1st, 2015 Jo No comments

    And so it has begun – Shell’s public relations offensive ahead of the 2015 Paris climate talks. The substance of their “advocacy” – and for a heavyweight corporation, it’s less lobbying than badgering – is that the rest of the world should adapt. Policymakers should set a price on carbon, according to Shell. A price on carbon might make some dirty, polluting energy projects unprofitable, and there’s some value in that. A price on carbon might also stimulate a certain amount of Carbon Capture and Storage, or CCS, the capturing and permanent underground sequestration of carbon dioxide at large mines, industrial plant and power stations. But how much CCS could be incentivised by pricing carbon is still unclear. Egging on the rest of the world to price carbon would give Shell the room to carry on digging up carbon and burning it and then capturing it and burying it – because energy prices would inevitably rise to cover this cost. Shell continues with the line that they started in the 1990s – that they should continue to dig up carbon and burn it, or sell it to other people to burn, and that the rest of the world should continue to pay for the carbon to be captured and buried – but Shell has not answered a basic problem. As any physicist could tell you, CCS is incredibly energy-inefficient, which makes it cost-inefficient. A price on carbon wouldn’t solve that. It would be far more energy-efficient, and therefore cost-efficient, to either not dig up the carbon in the first place, or, failing that, recycle carbon dioxide into new energy. Shell have the chemical prowess to recycle carbon dioxide into Renewable Gas, but they are still not planning to do it. They are continuing to offer us the worst of all possible worlds. They are absolutely right to stick to their “core capabilities” – other corporations can ramp up renewable electricity such as wind and solar farms – but Shell does chemistry, so it is appropriate for them to manufacture Renewable Gas. They are already using most of the basic process steps in their production of synthetic crude in Canada, and their processing of coal and biomass in The Netherlands. They need to join the dots and aim for Renewable Gas. This will be far less expensive, and much more efficient, than Carbon Capture and Storage. The world does not need to shoulder the expense and effort of setting a price on carbon. Shell and its fellow fossil fuel companies need to transition out to Renewable Gas.

  • Amber Rudd : First Skirmish

    Posted on May 29th, 2015 Jo No comments

    As if to provide proof for the sneaking suspicion that Great Britain is run by the wealthy, rather than by the people, and that energy policy is decided by a close-knit circle of privileged dynasties, up bubbles Amber Rudd MP’s first whirl of skirmish as Secretary of State for Energy and Climate Change : her brother Roland is chairperson of a lobbying firm, Finsbury, which is seeking to get state approval for a controversial gas storage scheme at Preesall, near Fleetwood, on behalf of the developers, Halite Energy of Preston, Lancashire.

    Whilst some claim there is a starkly obvious conflict of interest for Rudd to take part in the decision-making process, the Department of Energy and Climate Change (DECC) could have denied it, but have instead confirmed that the potential reversal of a 2013 decision will be made, not by Rudd, but by Lord Bourne.

    New gas storage in the United Kingdom is a crucial piece of the energy infrastructure provision, as recognised by successive governments. Developments have been ongoing, such as the opening of the Holford facility at Byley in Cheshire. Besides new gas storage, there are anticipated improvements for interconnectors with mainland Europe. These are needed for raising the volume of Natural Gas available to the British market, and for optimising Natural Gas flows and sales in the European regional context – a part of the EC’s “Energy Union”.

    An underlying issue not much aired is that increased gas infrastructure is necessary not just to improve competition in the energy markets – it is also to compensate for Peak Natural Gas in the North Sea – something many commentators regularly strive to deny. The new Conservative Government policy on energy is not fit to meet this challenge. The new Secretary of State has gone public about the UK Government’s continued commitment to the exploitation of shale gas – a resource that even her own experts can tell her is unlikely to produce more than a footnote to annual gas supplies for several decades. In addition, should David Cameron be forced to usher in a Referendum on Europe, and the voters petulantly pull out of the Europe project, Britain’s control over Natural Gas imports is likely to suffer, either because of the failure of the “Energy Union” in markets and infrastructure, or because of cost perturbations.

    Amber Rudd MP is sitting on a mountain of trouble, undergirded by energy policy vapourware : the promotion of shale gas is not going to solve Britain’s gas import surge; the devotion to new nuclear power is not going to bring new atomic electrons to the grid for decades, and the UK Continental Shelf is going to be expensive for the Treasury to incentivise to mine. What Amber needs is a proper energy policy, based on focused support for low carbon technologies, such as wind power, solar power and Renewable Gas to back up renewable electricity when the sun is not shining and wind is not blowing.

  • The Great Transition to Gas

    Posted on April 8th, 2015 Jo No comments

    Hello, hello; what have we here then ? Royal Dutch Shell buying out BG Group (formerly known as British Gas). Is this the start of the great transition out of petroleum oil into gas fuels ?

    Volatile crude petroleum oil commodity prices over the last decade have played some undoubted havoc with oil and gas company strategy. High crude prices have pushed the choice of refinery feedstocks towards cheap heavy and immature gunk; influenced decisions about the choices for new petrorefineries and caused ripples of panic amongst trade and transport chiefs : you can’t keep the engine of globalisation ticking over if the key fuel is getting considerably more expensive, and you can’t meet your carbon budgets without restricting supplies.

    Low crude commodity prices have surely caused oil and gas corporation leaders to break out into the proverbial sweat. Heavy oil, deep oil, and complicated oil suddenly become unprofitable to mine, drill and pump. Because the economic balance of refinery shifts. Because low commodity prices must translate into low end user refined product prices.

    There maybe isn’t an ideal commodity price for crude oil. All the while, as crude oil commodity prices jump around like a medieval flea, the price of Natural Gas, and the gassy “light ends” of slightly unconventional and deep crude oil, stay quite cheap to produce and cheap to use. It’s a shame that there are so many vehicles on the road/sea/rails that use liquid fuels…all this is very likely to change.

    Shell appear to be consolidating their future gas business by buying out the competition. Hurrah for common sense ! The next stage of their evolution, after the transition of all oil applications to gas, will be to ramp up Renewable Gas production : low carbon gas supplies will decarbonise every part of the economy, from power generation, to transport, to heating, to industrial chemistry.

    This is a viable low carbon solution – to accelerate the use of renewable electricity – wind power and solar principally – and at the same time, transition the oil and gas companies to become gas companies, and thence to Renewable Gas companies.

  • Renewable Gas : A Presentation #2

    Posted on March 6th, 2015 Jo No comments

    So, this is the second slide from my presentation at Birkbeck, University of London, last week.

    When making an argument, it is best to start from consensus and well-accredited data, so I started with government analysis of the energy sector of the economy in the United Kingdom. Production of Natural Gas in the UK is declining, and imports are rising.

    I did not go into much detail about this chart, but there is a wealth of analysis out there that I would recommend people check out.

    Despite continued investment in oil and gas, North Sea production is declining, and it is generally accepted that this basin or province as a whole is depleting – that is – “running out”.

    Here, for example, is more DECC data. The Summary of UK Estimated Remaining Recoverable Hydrocarbon Resources, published in 2014, had these numbers for UK Oil and Gas Reserves :-

    billion barrels of oil equivalentLowerCentralUpper
    Oil and Gas Reserves4.58.212.1
    Potential Additional Resources1.43.46.4
    Undiscovered Resources2.16.19.2

    The summary concluded with the estimate of remaining recoverable hydrocarbons from the UK Continental Shelf (offshore) resources would be between 11.1 and 21 billion barrels of oil equivalent (bboe).

    Other data in the report showed estimates of cumuluative and annual oil production :-

    billion barrels of oil equivalentCumulative productionAnnual production
    To date to end 201241.30.6 (in 2012)
    To date to end 201241.80.5 (in 2013)
    Additional production 2013 to 20307.00.44 (average 2014 to 2030)
    Additional production 2013 to 20409.10.21 (average 2031 to 2040)
    Additional production 2013 to 205010.40.13 (average 2041 to 2050)

    Another source of estimates on remaining oil and gas resources, reserves and yet-to-find potential is from the Wood Review of 2014 :-

    billion barrels of oil equivalentLow caseMid-caseHigh case
    DECC reference122235
    Wood Review1224

    So it’s clear that British oil and gas production is in decline, and that also, reserves and resources to exploit are depleting. The Wood Review made several recommendations to pump up production, and maximise the total recoverable quantities. Some interpreted this as an indication that good times were ahead. However, increased production in the near future is only going to deplete these resources faster.

    OK, so the UK is finding the North Sea running dry, but what about other countries ? This from the BP Statistical Review of Energy, 2014 :-

    Oil – proved reserves
    Thousand million barrels

    At end 1993

    At end 2003

    At end 2012
    United Kingdom4.54.33.0

    Natural gas – Proved Reserves
    Trillion cubic metres

    At end 1993

    At end 2003

    At end 2012
    United Kingdom0.60.90.2

    Oil and gas chief executives may be in denial about a peak in global crude oil production, but they don’t challenge geology on the North Sea. Here’s what BP’s CEO Bob Dudley said on 17th February 2015, during a presentation of the BP Energy Outlook 2035 :-

    “The North sea is a very mature oil and gas province and it will inevitably go through a decline. It peaked in 1999 at around 2.9 millions barrels per day and our projections are that it will be half a million barrels in 2035″.

    That’s “inevitably” regardless of the application of innovation and new technology. New kit might bring on production sooner, but won’t replenish the final count of reserves to exploit.

    So what are the likely dates for Peak Oil and Peak Natural Gas production in the North Sea bordering countries ?

    Norway : by 2030.

    The Netherlands : peaked already. Due to become a net importer of Natural Gas by 2025.

    Denmark : net importer of oil and gas by 2030.

  • Zero Careers In Plainspeaking

    Posted on March 5th, 2015 Jo 1 comment

    There are many ways to make a living, but there appear to be zero careers in plainspeaking.

    I mean, who could I justify working with, or for ? And would any of them be prepared to accept me speaking my mind ?

    Much of what I’ve been saying over the last ten years has been along the lines of “that will never work”, but people generally don’t get consulted or hired for picking holes in an organisation’s pet projects or business models.

    Could I imagine myself taking on a role in the British Government ? Short answer : no.

    The slightly longer answer : The British Government Department of Energy and Climate Change (DECC) ? No, they’re still hooked on the failed technology of nuclear power, the stupendously expensive and out-of-reach Carbon Capture and Storage (CCS), and the mythical beast of shale gas. OK, so they have a regular “coffee club” about Green Hydrogen (whatever that turns out to be according to their collective ruminations), and they’ve commissioned reports on synthetic methane, but I just couldn’t imagine they’re ever going to work up a serious plan on Renewable Gas. The British Government Department for Transport ? No, they still haven’t adopted a clear vision of the transition of the transport sector to low carbon energy. They’re still chipping away at things instead of coming up with a strategy.

    Could I imagine myself taking on a role with a British oil and gas multinational ? Short and very terse and emphatic answer : no.

    The extended answer : The oil and gas companies have had generous support and understanding from the world’s governments, and are respected and acclaimed. Yet they are in denial about “unburnable carbon” assets, and have dismissed the need for Energy Change that is the outcome of Peak Oil (whether on the supply or the demand side). Sneakily, they have also played both sides on Climate Change. Several major oil and gas companies have funded or in other ways supported Climate Change science denial. Additionally, the policy recommendations coming from the oil and gas companies are what I call a “delayer’s game”. For example, BP continues to recommend the adoption of a strong price on carbon, yet they know this would be politically unpalatable and take decades (if ever) to bring into effect. Shell continues to argue for extensive public subsidy support for Carbon Capture and Storage (CCS), knowing this would involve such huge sums of money, so it’s never going to happen, at least not for several decades. How on Earth could I work on any project with these corporations unless they adopt, from the centre, a genuine plan for transition out of fossil fuels ? I’m willing to accept that transition necessitates the continued use of Natural Gas and some petroleum for some decades, but BP and Royal Dutch Shell do need to have an actual plan for a transition to Renewable Gas and renewable power, otherwise I would be compromising everything I know by working with them.

    Could I imagine myself taking on a role with a large engineering firm, such as Siemens, GE, or Alstom, taking part in a project on manufactured low carbon gas ? I suppose so. I mean, I’ve done an IT project with Siemens before. However, they would need to demonstrate that they are driving for a Renewable Gas transition before I could join a gas project with them. They might not want to be so bold and up-front about it, because they could risk the wrath of the oil and gas companies, whose business model would be destroyed by engineered gas and fuel solutions.

    Could I imagine myself building fuel cells, or designing methanation catalysts, or improving hydrogen production, biocoke/biocoal manufacture or carbon dioxide capture from the oceans… with a university project ? Yes, but the research would need to be funded by companies (because all applied academic research is funded by companies) with a clear picture on Energy Change and their own published strategy on transition out of fossil fuels.

    Could I imagine myself working on rolling out gas cars, buses and trucks ? Yes. The transition of the transport sector is the most difficult problem in Energy Change. However, apart from projects that are jumping straight to new vehicles running entirely on Hydrogen or Natural Gas, the good options for transition involve converting existing diesel engine vehicles to running mostly on Natural Gas, such as “dual fuel”, still needing roughly 20% of liquid diesel fuel for ignition purposes. So I would need to be involved with a project that aims to supply biodiesel, and have a plan to transition from Natural Gas to Renewable Gas.

    Could I imagine myself working with a team that has extensive computing capabilities to model carbon dioxide recycling in power generation plant ? Yes.

    Could I imagine myself modelling the use of hydrogen in petroleum refinery, and making technological recommendations for the oil and gas industry to manufacture Renewable Hydrogen ? Possibly. But I would need to be clear that I’m doing it to enable Energy Change, and not to prop up the fossil fuel paradigm – a game that is actually already bust and needs helping towards transition.

    Could I imagine myself continuing to research the growth in Renewable Gas – both Renewable Hydrogen and Renewable Methane – in various countries and sectors ? Possibly. It’s my kind of fun, talking to engineers.

    But whatever future work I consider myself doing, repeatedly I come up against this problem – whoever asked me to work with them would need to be aware that I do not tolerate non-solutions. I will continue to say what doesn’t work, and what cannot work.

    If people want to pay me to tell them that what they’re doing isn’t working, and won’t work, then fine, I’ll take the role.

    I’d much rather stay positive, though, and forge a role where I can promote the things that do work, can work and will work.

    The project that I’m suitable for doesn’t exist yet, I feel. I’m probably going to continue in one way or another in research, and after that, since I cannot see a role that I could fit easily or ethically, I can see I’m going to have to write my own job description.

  • Renewable Gas : A Presentation #1

    Posted on March 2nd, 2015 Jo No comments

    Last week, on the invitation of Dr Paul Elsner at Birkbeck, University of London, I gave a brief address of my research so far into Renewable Gas to this year’s Energy and Climate Change class, and asked and answered lots of questions before demolishing the mythical expert/student hierarchy paradigm – another incarnation of the “information deficit model”, perhaps – and proposed everyone work in breakout groups on how a transition from fossil fuel gas to Renewable Gas could be done.

    A presentation of information was important before discussing strategies, as we had to cover ground from very disparate disciplines such as chemical process engineering, the petroleum industry, energy statistics, and energy technologies, to make sure everybody had a foundational framework. I tried to condense the engineering into just a few slides, following the general concept of UML – Unified Modelling Language – keeping everything really simple – especially as processing, or work flow (workflow) concepts can be hard to describe in words, so diagrams can really help get round the inevitable terminology confusions.

    But before I dropped the class right into chemical engineering, I thought a good place to start would be in numbers, and in particular the relative contributions to energy in the United Kingdom from gas and electricity. Hence the first slide.

    The first key point to notice is that most heat demand in the UK in winter is still provided by Natural Gas, whether Natural Gas in home boilers, or electricity generated using Natural Gas.

    The second is that heat demand in energy terms is much larger than power demand in the cold months, and much larger than both power and heat demand in the warm months.

    The third is that power demand when viewed on annual basis seems pretty regular (despite the finer grain view having issues with twice-daily peaks and weekday demand being much higher than weekends).

    The reflection I gave was that it would make no sense to attempt to provide all that deep winter heat demand with electricity, as the UK would need an enormous amount of extra power generation, and in addition, much of this capacity would do nothing for most of the rest of the year.

    The point I didn’t make was that nuclear power currently provides – according to official figures – less than 20% of UK electricity, however, this works out as only 7.48% of total UK primary energy demand (DUKES, 2014, Table 1.1.1, Mtoe basis). The contribution to total national primary energy demand from Natural Gas by contrast is 35.31%. The generation from nuclear power plants has been falling unevenly, and the plan to replace nuclear reactors that have reached their end of life is not going smoothly. The UK Government Department of Energy and Climate Change have been pushing for new nuclear power, and project that all heating will convert to electricity, and that nuclear power will provide for much of this (75 GW by 2050). But if their plan relies on nuclear power, and nuclear power development is unreliable, it is hard to imagine that it will succeed.

  • 20 Letters

    Posted on November 22nd, 2014 Jo No comments

    [ Video : George Marshall of the Climate Outreach Information Network launching his new book "Don’t Even Think About It" on the communication of climate change at the Harvard Book Store, whereto he had to fly, thereby causing significant personal carbon dioxide emissions. This YouTube does not feature Ian Christie, but is not entirely unrelated to his address, which is documented in the text below. ]

    Ian Christie of the Sustainable Lifestyles Research Group (SLRG) at the University of Surrey came to speak to the Green Christian Annual Members Meeting today under the heading “Sustainable Living : Why we struggle and how we can change”, and presided over three facilitated workshops on Church, Community and Campaigning. He was introduced as working with the Centre for Environmental Strategy at the University of Surrey, and having helped to pull together “Church and Earth”, the Seven Year Plan for the Church of England, as a response to the Alliance of Religions and Conservation initiative which culminated in the “Many Heavens, One Earth” Windsor Conference in November 2009. Ian Christie has also done project work with the Foundation for Democracy and Sustainable Development and the think tank Theos. He has been environmental advisor to the Bishop of Kingston.

    Ian Christie joked that his colleague Tim Jackson, who has written a best-selling book “Prosperity Without Growth”, sometimes feels he is on a permanent global tour, given the huge impact his work has had worldwide. The “paradox” is that his carbon footprint is enormous. Yet clearly there is great benefit from travel to present the messages from Tim’s research. This illustrates the clash of goods and values that is always present in our attempts to reduce our impacts and change lifestyles. Ian said that we shouldn’t beat ourselves up too much about our carbon emissions-filled lifestyles – many of us are doing reasonably well in not very promising circumstances. It’s not surprising that we haven’t made much progress in sustainable living – this is perhaps the biggest challenge humanity has set itself.

    Ian said, “Between 5% and 10% of the population (and this figure hasn’t changed over the last several years) are consistently trying to live as sustainably as they can in all areas of their lives. Meanwhile, another small segment – maybe 10% – 15% don’t care at all. The other two-thirds or more, including myself, are in the middle ground. We get confused. We sometimes give up on making particular changes. We might feel that taking the trouble on environmental issues is a bit of an effort – because other signals are not there, because other people are not doing it. Anyone who thinks we can bring about environmental “conversion”, person by person – it’s too difficult.”

    He went on to say, “As advocates of change, we don’t tell positive stories very well. We environmentalists have been much better at telling the alarming or apocalyptic event, rather than explaining the diagnosis of unsustainability. There’s a lack of supporting infrastructure for doing the sustainable things in everyday life. People get locked-in to high-carbon behaviours. We might want to do the green, sustainable thing but we can’t. The idea that “joy in less” is possible can seem unbelievable.” He went on to explain that, “consumption can make us feel good. More can be more. I get a thrill going into John Lewis sometimes, all those bright and shiny things. It’s amazing they’re available for sale and that I can afford them. Consumerism can feel like it is bringing real benefits. It can be fun.”

    Ian Christie remarked about the RESOLVE research at Surrey on the sense of “threatened identities”, a feeling that can arise when we’re asked to change our lifestyles – an important part of our identity can seem to be at stake. There is a lack of positive incentives and collective success stories. He gave an example – one where people cooking for their families want to recreate the cosy, nourishing food of their childhoods, or feel that they are giving a ‘proper meal’ to their loved ones, and they do that by using meat. These people find it hard to be told that they need to give up eating meat to save the planet. Another example, when people are told to cut down on car driving – there is a feeling of a loss of freedom, an assault on the idea that I can go where I like and do what I want to do. “Climate change is perhaps too big, distant or complicated for us. It is certainly too much for any one person to deal with”.

    Ian Christie spoke about the clash of desires and values – and that St Paul got there first (Romans 7:15-17) (and St Augustine, but paraphrased). He joked that he has discovered that many people had a dirty secret, which he calls “Top Gear Syndrome” – “you’d be surprised how many environmentalists like watching Top Gear”. He also mentioned what he termed “Copenhagen Syndrome” – where environmentalists feel that they need to attend every meeting on climate change – and so they fly there. People like to go to exotic places – many Greens included.

    Ian Christie emphasised that we can’t get to sustainable living one person at a time. He said that this amounted to a “Collective Action Problem” or (CAP). He showed us an image of what is commonly called a Mexican Stand-Off – where a group of three people have their weapons at each other’s throats and nobody will back down – each of the three major groups in society thinks that the other two should take the lead. So governments think that businesses and citizens should act. And citizens think that government and businesses should act. And businesses think that their consumers and governments should act.

    Ian said that there is a clear finding from social research that people feel safety in numbers – we like to feel that we fit in with our peers and neighbours – for example, in some cultures like America, people would rather make everyone feel comfortable than break out of normative behaviour or views. Individual households have a low perception of “agency” – feeling that they can make any significant change – that they don’t have sufficient capacity to act – “no clout”, as one member of the audience commented.

    Ian gave some examples of attitudes of people’s attitudes on environmental lifestyles : “I will even though you won’t – even though no one else steps forward”; “I will – but it’s never enough”; “I might if you will” or even, “I know you won’t, so don’t ask me”. He said that Collective Action Problems need to be addressed by all actors needing to be engaged. He said that there would be “no single ‘best buy’ policy” and that action will tend to be in the form of “clumsy solutions”. He said that people need “loud, long and legal” signals from government, consistent messages and incentives for change.

    Ian Christie said there is a community level of action possible – “communities of practice”. He recommended that we look up the CLASL research done by Defra/WWF. He mentioned “moments of change” – times of transition in life – and whether these might be appropriate times to offer support for alternative choices. He said that action by individuals cannot be guaranteed by giving messages to people as if they are only consumers, rather than citizens. If we say that something will save people money, they won’t necessarily act in ways that support a shift to sustainable lifestyles. We need to address people’s intrinsic values as well as material self-interest.

    Ian talked about some of the results of the research from the DEFRA-funded SLRG project, which is coming to an end. He spoke about the evidence of “Rebound Effects”, where people make savings on their carbon dioxide emissions by energy efficiency gains or other measures, and then spend the saved money in ways that can increase greenhouse gas emissions, like taking holidays by aeroplane – he mentioned the Tesco offer to “turn lights into flights”, where people were being encouraged to buy energy efficient light bulbs in exchange for Air Miles – “it’s going to make things much worse”. He said that research showed that re-spending (reinvestment) is what matters and that we need to go to the source of the emissions, through a carbon tax, for example.

    Ian Christie said that it is very limited what we can do as individual households. Lots of policymakers have thought to get through to people at moments of change – although there used to be no evidence. People’s habits and networks can be restructured for example when they move home, have a child or retire – a “habit discontinuity”. Research has now shown that there is a small but significant effect with house-movers – who are much more likely to act on information if they are given well-timed and designed information packages on green living – but only a small minority are truly motivated. He asked “how do we magnify this effect ?” The sheer act of moving house makes people amenable to change. Research has also shown that there might be a willingness amongst new parents – who would express more pro-environmental values as a result of having a new child – but are less capable of acting on these wishes. The reverse was found in those entering retirement – they wanted to live more frugally – but didn’t necessarily express this desire in terms of sustainable living.

    Ian said that the “window of opportunity” for introducing lifestyle change might be quite limited, perhaps a few months – and so people would not sustain their new habits without “lifestyle support systems”. People might not want to hear from a green group, but could be open to hearing from a church, or their Health Visitor, or Mumsnet. Maybe even a hairdresser ? One project that he recommended was PECT, the Peterborough Environment City Trust, which is acting as a facilitator for encouraging changes. He said people get demotivated if they feel businesses and governments are not doing the same thing. He mentioned avenues and approaches for increasing the sense of agency : framing environmental issues in : moments of change, local food growing, community energy groups, frugality, health and well-being…

    Ian Christie said that Church of England work on “Shrinking the Footprint” was poised to make fresh progress, with leadership from the new lead bishop on the environment, Rt Revd Nicholas Holtam.

    Ian Christie suggested that positive activities could inspire : why could a church not turn an emergency feeding centre – a food bank – into a food hub – a place where people could come for tools, seeds and food growing group support ? What about Cathedral Innovation Centres as catalysts for sustainable living schemes ? Why not partner with the National Trust or the National Health Service over environmental issues ? He said the NHS has a Sustainable Development Strategy – “one of the best I’ve seen”. How about calling for a New Green Deal for Communities ? One reason why the Green Deal has been so poorly supported has been it has been promoted to individuals and it’s much harder to get individuals to commit and act on projects.

    Ian pointed towards good intervention concepts : “safety in numbers” approaches, moments of change, congregation spaces, trusted peers in the community, consistent messages. He recommended Staying Positive : “look how far we’ve come”; we have two decisive decades ahead; Business As Usual is failing – CEOs are breaking ranks; cities are going green – and the churches are waking up to ecological challenges.

    In questions, I asked Ian Christie why he only had three social groups rather than four. I said that I see businesses broken down into two categories – those that produce energy and those that consume energy to provide goods and services. I said there were some excellent sustainable development strategies coming out of the private enterprises consuming energy, such as Marks and Spencer. He said that yes, amongst the fossil energy producing companies, there is a massive challenge in responding to climate change. He pointed to Unilever, who are beginning to see themselves as pioneers in a new model of sustainable business. There is a clear divergence of interest between fossil fuel producers and companies whose core business is being put at risk by climate disruption.

    When asked about whether we should try to set the economy on a “war footing” as regards climate change, Ian Christie said “we aren’t in a war like that. We ourselves, with our high-carbon consumption, are ‘the enemy’, if we want to put it like that. We are not in a process where people can be mobilised as in a war.” He said that the churches need to bring climate change into every talk, every sermon “this is how we do Christian witness”.

    In discussion after the breakout workshops, Ian Christie said that we need to try to get to local opinion-formers. He said that a critical mass of communication to a Member of Parliament on one subject could be as few as 20 letters. He said that mass letter writing to MPs is one way in which others seeking to influence policy “play the game” in politics, so we must do it too. For example, we could write to our churches, our leaders, our democratic representatives, and demand a New Green Deal for Communities, and in letters to political candidates for the General Election we could say it would be a critical factor in deciding who we vote for. In the General Election in 2015, Ian said that it could be a five-way split, and that the “green issue” could be decisive, and so we should say that our vote will go to the greenest of candidates.

    Ian said we should try to audit our church expertise, and that we should aim for our churches to give one clear overall narrative – not an “environmental narrative”, but one that urges us to be truly Christian. He said that it was important that church leaders talk the talk as well as walk the talk – making it normal to talk about these things – not keeping them partitioned. The weekly sermon or talk in church must tell this story. He said that people disagree for really good reasons, but that the issue was one of trying to create a setting in which disagreement can get somewhere. He mentioned the work of George Marshall and the Climate Outreach Information Network as being relevant to building narratives that work on climate change out of a silence or absence of dialogue.

  • UKERC : Gas by Design (2)

    Posted on November 14th, 2014 Jo No comments

    This week, I had the opportunity to join the launch of the UKERC’s latest research into the future of gas. The esteemed delegates included members of a Russian Trade Delegation and several people from the US Embassy. Clearly, the future of gas is an international thing.

    [continued from Gas by Design ]

    Mike Bradshaw, Warwick Business School = [MB]

    [MB] I’m somewhat daunted by this audience – the report is aimed perhaps for informed public audience. The media [ambushed us on the question of shale gas, shale gas attracted more attention] but things we didn’t cover much about there we can cover here. It’s been a real rollercoaster ride in the gas industry. Any flights of fancy (in the report) are our faults and not theirs [reference to work of colleagues, such as Jonathan Stern at Oxford Institute for Energy Studies]. A set of shortcomings dealing with the issue of Energy Security. There is a tendency to think that oil and gas are the same. They’re not. The framework, the actors and the networks, trade statistics, policies [much different for gas than for oil]. [In the UK for example we are seeing] a rapid increase in import dependence [and in other countries]. Need to [pay] particular understanding on what will happen in far-flung places. Today, the US-China agreement could influence gas demand. [In the literature on gas, some anomalies, perhaps]. Academics may not understand markets. [What we are seeing here is] the globalisation of UK gas security – primarily Europeanisation. There is growing uncertainty [about] the material flow of gas. [Threshold] balance in three sectors – strong seasonality, impact of climate and temperature [on gas demand]. The Russian agreement with Ukraine [and Europe] – the one thing everybody was hoping for was a warm winter. While the gas market is important [industrial use and energy use], domestic/residential demand is still very significant [proportion of total demand], so we need to look at energy efficiency [building insulation rates] and ask will people rip out their gas boilers ? For the UK, we are some way across the gas bridge – gas has enabled us to meet [most of] our Kyoto Protocol commitments. Not long until we’ve crossed it. Our coal – gone. With coal gone, what fills the gaps ? Renewable electricity – but there is much intermittency already. We’re not saying that import dependency is necessarily a problem. Physical security is not really the problem – but the [dependence on] the interconnectors, the LNG (Liquefied Natural Gas) imports – these create uncertainties. The UK also plays a role as a gas exporter – and in landing Norwegian gas [bringing it into the European market]. I’m a geographer – have to have at least one map – of gas flows [in and out of the country]. The NTS (National Transmission System – the high pressure Natural Gas-carrying pipeline network – the “backbone” of the gas transmission and distribution system of National Grid] has responded to change – for example in the increasing sources of LNG [and “backflow” and “crossflow” requirements]. There are 9 points of entry for gas into the UK at the moment. If the Bowland Shale is exploited, there could be 100s of new points of entry [the injection of biogas as biomethane into the gas grid would also create new entry points]. A new challenge to the system. [The gas network has had some time to react in the past, for example] LNG imports – the decision to ramp up the capacity was taken a long time ago. [Evolution of] prices in Asia have tracked the gas away [from the European markets] after the Fukushima Dai-ichi disaster. And recently, we have decided to “fill up the tanks” again [LNG imports have risen in the last 24 or so months]. Very little LNG is “firm” – it needs to follow the market. It’s not good to simply say that “the LNG will come” [without modelling this market]. The literature over-emphasises the physical security of the upstream supplies of gas. [The projections have] unconventional gas growing [and growing amounts of biogas]. But it’s far too early to know about shale gas – far too early to make promises about money when we don’t even have a market [yet]. Policy cannot influence the upstream especially in a privatised market. The interconnectors into the European Union means we have to pay much more attention to the Third EU Energy Package. Colleagues in Oxford are tracking that. The thorny question of storage. We have less than 5 bcm (billion cubic metres). We’d like 10% perhaps [of the winter period demand ?] Who should pay for it ? [A very large proportion of our storage is in one place] the Rough. We know what happens – we had a fire at the Rough in 2006… Everyone worries about geopolitics, but there are other potential sources of problems – our ageing infrastructure […] if there is a technical problem and high demand [at the same time]. Resilience [of our gas system is demonstrated by the fact that we have] gas-on-gas competition [in the markets] – “liquid” gas hub trading – setting the NBP (National Balancing Point). [There are actually 3 kinds of gas security to consider] (a) Security of Supply – not really a problem; (b) Security of Transport (Transit) – this depends on markets and (c) Security of Demand – [which strongly depends on whether there is a] different role for gas in the future. But we need to design enough capacity even though we may not use all of it [or not all of the time]. We have mothballed gas-fired power plants already, for reasons you all know about. We already see the failure of the ETS (European Union Emissions Trading Scheme) [but if this can be reformed, as as the Industrial Emissions Directive bites] there will be a return to gas as coal closes. The role of Carbon Capture and Storage (CCS) becomes critical in retaining gas. CCS however doesn’t answer issues of [physical energy security, since CCS requires higher levels of fuel use].

    [Question from the floor] Gas has a role to play in transition. But how do we need to manage that role ? Too much focus on building Renewable Energy system. What is the impact on the current infrastructure ? For managing that decline in the incumbent system – gas is there to help – gas by design rather than gas by default.

    [Question from the floor, Jonathan Stern] [In your graphs/diagrams] the Middle East is a major contributor to gas trade. We see it differently. The Qataris [could/may/will] hold back [with expanding production] until 2030. Iran – our study [sees it as] a substitute contributor. Oil-indexed gas under threat and under challenge. If you could focus more on the global gas price… [New resources of gas could be very dispersed.]Very difficult to get UK people to understand [these] impacts on the gas prices [will] come from different places than they can think of.

    [Question from the floor] Availability of CCS capacity ? When ? How much ? Assumptions of cost ?

    [Question from the floor : Tony Bosworth, Friends of the Earth] Gas as a bridge – how much gas do we need for [this process] ? What about unburnable carbon ? Do we need more gas to meet demands ?

    [Answer – to Jonathan Stern – from Christophe McGlade ?] The model doesn’t represent particularly well political probabilities. Iran has a lot of gas – some can come online. It will bring it online if it wants to export it. Some simplifications… might be over optimistic. Your work is helpful to clarify.

    On gas prices – indexation versus global gas price – all the later scenarios assumed a globalised gas price. More reasonable assumptions.

    On CCS : first [coming onstream] 2025 – initially quite a low level, then increasing by 10% a year. The capital costs are approximately 60% greater than other options and causes a drop in around 10% on efficiency [because making CCS work costs you in extra fuel consumed]. If the prices of energy [including gas] increase, then CCS will have a lesser relative value [?].

    On availability of gas : under the 2 degrees Celsius scenario, we could consume 5 tcm (trillion cubic metres) of gas – and this can come from reserves and resources. There are a lot of resources of Natural Gas, but some of it will be at a higher price. In the model we assume development of some new resources, with a growth in shale gas, and other unconventional gas. Because of the climate deal, we need to leave some gas underground.

    [Answer from the panel] Indexation of gas prices to oil… Further gas demand is in Asia – it’s a question of whose gas gets burnt. [Something like] 70% of all Natural Gas gets burned indigenously [within the country in which it is produced]. When we talk about “unburnable gas”, we get the response “you’re dreaming” from some oil companies, “it won’t be our fossil fuels that get stranded”. LNG models envisage a different demand profile [in the future, compared to now]. When China [really gets] concerned about air quality [for example]. Different implications.

    [Question from the floor, from Centrica ?] What’s in the model for the globalised gas price – Henry Hub plus a bit ? There is not a standard one price.

    [Question from the floor] On the question of bridging – the long-term bridge. What issues do you see when you get to 2030 for investment ? [We can see] only for the next few years. What will investors think about that ?

    [Question from the floor] [With reference to the Sankey diagram of gas use in the UK] How would that change in a scenario of [electrification – heat and transport being converted to run on electrical power] ?

    [Question from the floor] Stranded assets. How the markets might react ? Can you put any numbers on it – especially in the non-CCS scenario ? When do we need to decide [major strategy] for example, [whether we could or should be] shutting off the gas grid ? How would we fund that ? Where are the pinch points ?

    [Answer from the panel] On the global gas price – the model does not assume a single price – [it will differ over each] region. [The price is allowed to change regionally [but is assumed to arise from global gas trading without reference to oil prices.] Asian basin will always be more expensive. There will be a temperature differential between different hubs [since consumption is strongly correlated with seasonal change]. On stranded assets – I think you mean gas power plants ? The model is socially-optimal – all regions working towards the 2 degrees Celsius global warming target. The model doesn’t limit stranded assets – and do get in the non-CCS scenario. Build gas plants to 2025 – then used at very low load factors. Coal plants need to reduce [to zero] given that the 2 degrees Celsius targets are demanding. Will need gas for grid balancing – [new gas-fired power generation assets will be] built and not used at high load factors.

    [Answer from the panel] Our report – we have assume a whole system question for transition. How successful will the Capacity Mechanism be ? UKERC looking at electrification of heating – but they have not considered the impact on gas (gas-to-power). Will the incentives in place be effective ? The Carbon Budget – what are the implications ? Need to use whole system analysis to understand the impact on gas. Issue of stranded assets : increasingly important now [not at some point in the future]. On pinch point : do we need to wait another three years [for more research] ? Researchers have looked more at what to spend – what to build – and less on how to manage the transition. UKERC have started to explore heat options. It’s a live issue. Referenced in the report.

    [Question from the floor, from Richard Sverrisson, News Editor of Montel] Will reform to the EU ETS – the Market Stability Reserve (MSR) – will that be enough to bring gas plant into service ?

    [Question from the floor] On oil indexation and the recent crash in the crude price – what if it keeps continuing [downwards] ? It takes gas prices down to be competitive with hub prices. [What about the impact on the economic profitability of] shale oil – where gas driving related prices ? Are there some pricing [functions/variables] in the modelling – or is it merely a physical construct ?

    [Question from the floor, from Rob Gross of UCL] On intermittency and the flexibility of low carbon capacity. The geographical units in the modelling are large – the role of gas depends on how the model is constrained vis-a-vis intermittency.

    [Answer from the panel, from Christophe McGlade] On carbon dioxide pricing : in the 2 degrees Celsius scenario, the price is assumed to be $200 per tonne. In the non-CCS scenario, the price is in the region of $400 – $500 per tonne [?] From 2020 : carbon price rises steeply – higher than the Carbon Floor Price. How is the the 2 degrees Celsius target introduced ? If you place a temperature constraint on the energy system, the model converts that into carbon emissions. The latest IPCC report shows that there remains an almost linear trend between carbon budget and temperature rise – or should I say a greenhouse gas budget instead : carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The emissions pledges of the [European Union ?] have been adopted by this model – also the development of renewable energy and fuel standards. No exogenous assumptions on carbon pricing. On intermittency – the seasonality is represented by summer, winter and intermediate; and time day generalised as morning, night, evening and peak (morning peak). [Tighter modelling would provide more] certainty which would remove ~40% of effective demand [?] Each technology has a contribution to make to peak load. Although, we assume nothing from wind power – cannot capture hour to hour market. The model does build capacity that then it doesn’t use.

    [Answer from the panel] On carbon pricing and the EU ETS reform : I wouldn’t hold my breath [that this will happen, or that it will have a major impact]. We have a new commission and their priority is Poland – nothing serious will happen on carbon pricing until 2020. Their emphasis is much more on Central European issues. I don’t expect [us] to have a strong carbon price since policy [will probably be] more focussed on social democracy issues. Moving to a relatively lower price on oil : Asia will hedge. Other explorters currently sticking to indexation with oil. The low price of wet gas (condensate) in the USA is a result of the over-supply, which followed an over-supply in NGLs (Natural Gas Liquids) – a bumpy road. Implications from USA experience ? Again, comes back to watching what is happening in Asia.

    [to be continued…]

  • Steve Chalke : Ecosystem Faith (2)

    Posted on November 13th, 2014 Jo No comments

    Here is the SoundCloud recording of Reverend Steve Chalke’s address at the Pray and Fast for the Climate event on 1st November 2014 :-

  • UKERC : Gas by Design

    Posted on November 12th, 2014 Jo No comments

    Today I attended a meeting of minds.

    It’s clear to me that the near-term and mid-term future for energy in the United Kingdom and the European Union will best be centred on Natural Gas and Renewable Electricity, and now the UK Energy Research Centre has modelled essentially the same scenario. This can become a common narrative amongst all parties – the policy people, the economists, the technologists, the non-governmental groups, as long as some key long-term de-carbonisation and energy security objectives are built into the plan.

    The researchers wanted to emphasise from their report that the use of Natural Gas should not be a default option in the case that other strategies fail – they want to see a planned transition to a de-carbonised energy system using Natural Gas by design, as a bridge in that transition. Most of the people in the room found they could largely agree with this. Me, too. My only caveat was that when the researchers spoke about Gas-CCS – Natural Gas-fired power generation with Carbon Capture and Storage attached, my choice would be Gas-CCU – Natural Gas-fired power generation with Carbon Capture and Re-utilisation – carbon recycling – which will eventually lead to much lower emissions gas supply at source.

    What follows is a transcription of my poorly-written notes at the meeting, so you cannot accept them as verbatim.

    Jim Watson, UKERC = [JW]
    Christophe McGlade, University College London (UCL) = [CM]
    Mike Bradshaw, Warwick Business School = [MB]

    [JW] Thanks to Matt Aylott. Live Tweeting #FutureOfGas. Clearly gas is very very important. It’s never out of the news. The media all want to talk about fracking… If we want to meet the 2 degrees Celsius target of the United Nations Framework Convention on Climate Change, how much can gas be a part of this ? Is Natural Gas a bridge – how long a ride will that gas bridge be ?

    [CM] Gas as a bridge ? There is healthy debate about the Natural Gas contribution to climate change [via the carbon dioxide emissions from burning Natural Gas, and also about how much less in emissions there is from burning Natural Gas compared to burning coal]. The IPCC said that “fuel switching” from coal to gas would offer emissions benefits, but some research, notably McJeon et al. (2014) made statements that switching to Natural Gas cannot confer emissions benefits. Until recently, there have not been many disaggregated assessments on gas as a bridge. We have used TIAM-UCL. The world is divided into 16 regions. The “climate module” seeks to constrain the global temperature rise to 2 degrees Celsius. One of the outcomes from our model was that export volumes [from all countries] would be severaly impacted by maintaining the price indexation between oil and gas. [Reading from chart on the screen : exports would peak in 2040s]. Another outcome was that gas consumption is not radically affected by different gas market structures. However, the over indexation to the oil price may destroy gas export markets. Total exports of natural gas are higher under the 2 degrees Celsius scenario compared to the 4 degrees Celsius scenario – particularly LNG [Liquefied Natural Gas]. A global climate deal will support gas exports. There will be a higher gas consumption under a 2 degrees Celsius deal compared to unconstrained scenario [leading to a 4 degrees Celsius global temperature rise]. The results of our modelling indicate that gas acts as a bridge fuel out to 2035 [?] in both absolute and relative terms. There is 15% greater gas consumption in the 2 degrees Celsius global warming scenario than in the 4 degrees Celsius global warming scenario. Part of the reason is that under the 4 degrees Celsius scenario, Compressed Natural Gas vehicles are popular, but a lot less useful under the 2 degrees Celsius scenario [where hydrogen and other fuels are brought into play].

    There are multiple caveats on these outcomes. The bridging period is strictly time-limited. Some sectors need to sharply reduce consumption [such as building heating by Natural Gas boilers, which can be achieved by mass insulation projects]. Coal must be curtailed, but coal-for-gas substitution alone is not sufficient. Need a convincing narrative about how coal can be curtailed. In an absence of a global binding climate deal we will get consumption increases in both coal and gas. In the model, gas is offsetting 15% of coal by 2020, and 85% by 2030. With Carbon Capture and Storage (CCS), gas’s role is drastically reduced – after 2025 dropping by 2% a year [of permitted gas use]. Not all regions of the world can use gas as a bridge. [Reading from the chart : with CCS, gas is a strong bridging fuel in the China, EU, India, Japan and South Korea regions, but without CCS, gas is only strong in China. With CCS, gas’s bridging role is good in Australasia, ODA presumably “Offical Development Assistance” countries and USA. Without CCS, gas is good for Africa, Australasia, EU, India, Japan, South Korea, ODA and USA.]

    In the UK, despite the current reliance on coal, there is little scope to use it as a transition fuel. Gas is unlikely to be removed from UK energy system by 2050.

    [Question from the floor] The logic of gas price indexation with the oil price ?

    [CM] If maintain oil indexation, exports will reduce as countries turn more towards indigenous at-home production of gas for their domestic demand. This would not be completely counter-balanced by higher oil and therefore gas prices, which should stimulate more exports.

    [Point from the floor] This assumes logical behaviour…

    [Question from the floor] [Question about Carbon Capture and Storage (CCS)]

    [CM] The model does anticipate more CCS – which permits some extra coal consumption [at the end of the modelling period]. Gas-CCS [gas-fired power generation with CCS attached] is always going to generate less emissions than coal-CCS [coal-fired power generation with CCS attached] – so the model prefers gas-CCS.

    [to be continued…]

  • Contracts for Difference Risks

    Posted on November 10th, 2014 Jo No comments

    The UK Government’s Electricity Market Reform (EMR) is a moving feast, or “trough”, if you are of the opinion that any state subsidy is a subsidy too far. My, how people complained and complained about the Renewables Obligation (RO), perhaps one of the world’s best stimuli for pushing forward wind power development. Yes, some rich engineering firms and rich landowners got richer on the back of the RO. What do you expect ? The wealthy always leverage their capital. But at least the RO has produced some exceptional wind power generation numbers. In the period 2017 to 2018 however, the RO is set to be staged down and replaced by several elements in the EMR, most notably, the CfD or Contracts for Difference, otherwise affectionately and quite inaccurately described as the FiT CfD – Feed-in Tariff Contracts for Difference.

    The basic plan for the CfD is to guarantee to new electricity generators, or old generators building new plant, a definite price on power sold, in order to ensure they can get debt and equity invested in their projects. However, this is a huge state intervention and potentially entirely scuppers the efforts to create a market in electricity. More dangerously, although the CfD is supposed to encourage the freeing up of capital to support new energy investment, it might fail in that, at least in the short-term, and it may even fail to make capital cheaper. This is due to the new kinds of risk associated with the CfD – particularly because of the long lead time from auction to allocation, and the cap on allocations. The CfD is designed to create project failures, it seems.

    I recently attended an event hosted at the Queen Elizabeth II Conference Centre in Westminster in London, called Energy4PowerLive 2014 and managed by GMP. The first session I attended was in the RenewablesLive 2014 stream, and featured a panel discussion between Andrew Buglass from Royal Bank of Scotland (RBS), Philip Bazin of Triodos and Steve Hunter, Investment Director of Low Carbon.

    What follows is not verbatim, and is based on my handwritten notes, and my handwriting is appalling, so that sometimes, even I cannot read it.

    [ Andrew Buglass, Managing Director and Head of Energy, Royal Bank of Scotland (RBS) : “Financing CfD projects – initial impressions from a lender” ]

    [You may have an interest in the actions of] RBS [heckle from the audience, “We own it !”]. We built our first renewable energy project in 1991 – an onshore wind turbine. Now we [have helped] finance 9 gigawatts of renewable energy. I have 15 minutes – only possible to scratch the surface of CfDs [Contracts for Difference – a subsidy under the UK Government Department of Energy and Climate Change (DECC) Electricity Market Reform (EMR))]. The EMR journey has been a very long one – four years. We have offered advice to the government – about the bankability of the policy. DECC have a different policy perspective – they are going over here [in this direction] whether or not… [Their aim was to] encourage new sources of investment debt and equity, [currently] not here in the UK. […] Matt Hancock, new [energy] minister […] £115 [billion ?] […]. Half of £100 billion needed by end of decade. The EMR framework is [intended] to bring in new sources of debt and equity – its ability to track that into the market. I’m not going to review whether the EMR will be successful. It’s a “Nought to Sixty” question [reference to how quickly it takes for cars to accelerate], how quickly is capital going to be delivered [getting up and running]. There will be a big step up in terms of work […] how are different counterparties [countersigning parties in the CfD contracts] responding ? Now is the time to deliver on the [practical economics] for those to decide whether to invest or not. Need to engage the ratings agencies – getting debt from bond markets – to convince Standard and Poor etc to convince […] The first projects are going to take a long time – cutting their teeth. Cost, availability, terms of debt. The risks that will [come into play] :

    [At the start of the EMR discussions] we highlighted that small generators found it hard to get PPAS [Power Purchase Agreements]. With the CfDs “lender of last resort” “offtaker of last resort” […] may support less strong balance sheets for PPAs. Great – because we need a lot more liquidity in PPAs. [However] the basis risks on the strike price compared to the reference price – if this is [changed, different] – a concern about whether they might be matching in the middle [and so conferring no benefit to having arranged the CfD]].

    In offshore wind – wild – the economics of generating. In onshore wind power, the wholesale price has less of a way to fall [because of many years of learning and maturing of supply chains etc].

    The CfDs are to be linked to CPI [Consumer Price Index] rather than the RPI [Retail Price Index]. This may seem like a not very important difference – but at the moment you cannot hedge against the CPI. […] we recommend RPI – linked to lock in. Can’t do that with CPI.

    [Risk] especially during construction. The CfD does not pick up during construction – need to see [how this pans out].

    Twenty pages of the CIL clause – doesn’t seem to give you much protection – what is a “foreseeable change in law” ? Unless you’re a big utility you will not have been tracking [policy and legislation] for the last ten years. Big risk ? In the RO [Renewables Obligation], CIL risk was set to the offtaker. Law firms are going to really agonise [over this in the CfD].

    Risk relating to managing CfD contract during its lifetime. There is a risk from the termination of a CfD – more than in the RO. May need to do more work to keep lender involved to manage termination risk.

    Leads to a gloomy approach – in banking paying back on time is good – anything else is bad.

    The EMR has cross-party support, but this is the most interventionist approach since the CEGB (Central Electricity Generating Board market). The politicians are saying “no, no, we’d never change anything” – from three parties. It would help if there were a public statement on that (I get calls about “too many turbines”). Initial projects will probably take longer to start than [under] RO. Collectively fund pragmatic solutions.

    [ Philip Bazin, Head Project Finance Team, Triodos Bank : “Financing CfD projects – initial impressions from a different bank” ]

    Triodos was established in 1980, and started in the UK in 1995 with the acquisition of Mercury […] Our portfolio in the UK is still relatively small. Over a third of the £500 million is in renewable energy. Our investment […] basis of positive social and environmental outcomes. […] Core lending of £1 to £15 million finance […] construction […] and up to 15 years [on loan repayment]. Smaller developers – best fit. The bank is almost becoming part of the supply chain in the bidding process. Give a forward fixed rate of interest. We’ve had to think about how we provide this derivative. Discussions with PPA providers. Feeling that most a lot of new players. The whole rush around CfD was quite unhelpful. We haven’t been engaging with any bidders for this round [of CfDs]. Our customers are small generators or community groups. Smaller projects are risk-averse and would [probably] use the RO instead of the CfD [for now]. These markets are going to find this new structure [offputting]. Not ideal if you’re a professional investor. [Andrew has explained the risks well] The biggest one for me is the risk of failing to achieve your LONGSTOP DATE [failure to start electricity generation by an agreed date], which would risk a termination [of the CfD subsidy agreement. This would destroy the economics of the whole project and therefore the investment]. What protections do you have as a sub-contractor ? Another point is about wayleaves. [If you can’t get your wayleaves in time…] Fundamentally, the [CfD] mechanism is bankable. [However] in trying to fix a problem it [may] have created a total mess. Don’t know if more capital will be going into projects.

    [ Steve Hunter, Investment Director, Low Carbon : “CfDs from an equity perspective” ]

    [Our business is in] Solar PV, Onshore wind, CSP in the Mediterranean area. We get there when project developer is doing land deals. We have a cradle-to-grave perspective. Land planning and grid access are major risks [and the guarantee of biomass feedstock for a biomass project]. The WHOLESALE POWER PRICE RISK – someone needs to take it. Your view depends on your equity horizon. For us, the two big changes [from the RO] are the introduction of the ALLOCATION RISK and the removal of the power price risk. Don’t know the budget for allocation. Only know one month before the [CfD] auction ! The government has not released [a budget] for “emerging technology”. Timing : doesn’t really work for solar. The idea of CfD versus RO for solar will not work. [It’s all down to the project lifecycle] – you could be waiting 14 or 15 months for a CfD allocation after making a bid, but grid connection deals are now closing in [at around 12 months – if you do not take up your grid connection permission, you will lose it]. At the moment there is no competition between technologies. Is there enough CfD set aside for offshore wind projects ? Yes. If CfDs are intended to deliver technology-neutral [energy mix] – it doesn’t yet. The REFERENCE PRICES for me are the significant risk. This is entirely new for CfDs. Because the CfD intended to bring lower cost of capital – there is an implication for return [on investment] to the investor. Government will set [the reference prices]. Government just released [for some technologies] – decreased [in a forward period]. The Government may have a very different view on forward power prices… These reference prices come out of the air [there seems to be no basis for them]. When is final not final ? When it comes from DECC. If consider 2018/2019 September, the tightest budget, you could afford 1,000 MW of offshore, [if there is a change in the reference price] you could only afford 700 MW. In the TEC Register from National Grid – download this – there is 1,000 to 1,200 MG in the pipeline onshore. If I was a wind developer with [grid] connection dates after the end of the RO, you can bet I’ve already bid [for a CfD allocation] already. The political risk of changing the RO. May be a small amount of solar – but anyway it’s too expensive. If the CfD is only to support onshore wind power – is it achieving its goals ? There will almost certainly be some modification [to the CfD or the reference prices ?]. Transparency ? Oversupply ? [Oversight ?] of setting reference prices. Increase in frequency of the CfD auction would be helpful. Would give developers more time to bid. Technologies like solar PV that could deliver large savings… If no large solar is built… They could put a minimum in [for the subsidy allocated to each technology] – more positive. CfD represents long-term support. If the industry drives down the cost of renewable energy, CfD gives us an infill fix on revenue. It will give that certainty to get debt [and equity] in. It may be the support mechanism we need in the long-term. It could be the support mechanism we need for renewable energy…

  • European Referendum : Corpse Factory

    Posted on November 9th, 2014 Jo No comments

    So I was in a meeting on a dateless date, at an organisation with a nameless name, with some other unidentifiable people in the room with me. For some reason I had been invited, I cannot think why. Ah, yes, I can. I was invited to attend because, apparently, I am a “campaigner”. I am, allegedly, somebody who buys into the notion that communications should serve the purpose of directing public attention and support towards a particular outcome, decided in advance by a political elite. And it seems, if I believe something is right, and that a message needs communicating, I will take action, but never invoice, because I am a believer. Well let me tell you right here and now, I am not that person. I may have that reputation, but really, I despise propaganda : the deliberate formation of a murmur of Tweet starlings, or the collective wall-to-wall newspaper coverage of the same story, the scandal story hauled out to scare the horses and herd them to the salt water shore, the faux narrative of collective political or social will for change.

    I want to believe that even though I am occasionally paid to communicate a story (but most often not), that my narrative, and importantly my agenda, is my own. I will not be co-opted. I shall not be defined by storytelling, I shall not be paid for spreading information – for if I were to be telling money-backed tales, I may end up peddling lies. And I do not want lies to be spoken. I am an ontologist. My ontology is :-

    IT IS
    IT IS.

    and not

    IT IS
    IT IS,

    There is no “therefore” in what I write. When I say “should”, like, “we should adopt renewable energy”, it’s your choice as to whether you agree with me. You shouldn’t read anything and be swayed or directed, except by the force of reason based on evidence. I am the photographer, the recorder, but not the public relations consultant. And I am especially not an unsalaried volunteer. I paint the future using my own perspective, my own understanding, my own research, my own best judgement, but I am not telling people what to think. Although I go slightly beyond merely noting and analysing what is happening, to articulate possible futures, I am not a persuader.

    I do not want to write the script for the actions of the readers or listeners. I do not want to precipitate a revolution, or dehydrate the horses before leading them to the river bank. I want to describe rather than proscribe or prescribe. I want to scribe the way I see things, I do not do it in order to create waves or push buttons or light beacons. The facts should speak for themselves, and if anybody consumes my communication, they should be free to act as they feel fit, or suits. I am not a paid-for, paid-up, in-the-pocket campaigner. I am not spun round other peoples’ fingers like a talking puppet. I am a free person.

    So, there I was in this meeting, and the people in the room were discussing an event that is likely to take place. It appears from some analysis that the next British Government could well be another Coalition Government, with the Conservative Party having only a shaving of a majority for rule. And when they have crossed the i’s and dotted the t’s and formed a currently impossible political marriage, which I’m guessing will involve the Green Party as well as the Liberal Democrats, then they will need to live up to their promise to hold a referendum on British participation in the Grand European Experiment – economic union with other European countries.

    But nobody talks about Europe. Except to complain. In the meeting I attended, the hosts of the meeting were consulting for ways to highlight the Europe Question, and to give it a pro-Union light.

    For me, it’s facile. The United Kingdom of Great Britain and Northern Ireland is just a bunch of mediocre-sized islands off the coast of the European continent. Something like 80% of UK trade is with European countries, because Europe is our gateway to the rest of the global market, and you always do the most trade with your neighbours. It’s natural. Can anybody seriously suggest we ditch the Common Market – the agreements that European countries have come to to ensure common standards of goods and services, common terms and conditions of trade and common legal processes regulating trade ? So we want to reserve some kind of sovereignty over some kinds of decisions ? Why ? The UK is heavily involved in the central European institutions and governance bodies. We have massive input. We vote for MEPs. Why should things not go our way ? And even if things don’t go perfectly our way, will the negotiated compromises be so bad ? Subsidiarity – making decisions at the lowest/best/most appropriate level of administration – that’s still going to keep a lot of British control over British affairs. Surely the UK suffers a greater risk of interference from any pan-Atlantic trade deal that it does from Europe ?

    The UK have made commitments. Our Parliament has agreed that we need to work on climate change, social justice and economic stability. We have implicitly agreed that to address climate change we need Energy Change and environmental regulation; to achieve social justice we need human rights, justice, health, education and a benefits system; and for economic stability we need economic stimuli – for example, in national infrastructure projects. In terms of climate change and Energy Change there is so much we need to do. If we stay in Europe, all of this will be so much easier. Within the European project for energy market harmonisation is the work on standards to achieve gas and electricity grid harmonisation. The improvement and augmenting of interconnections between countries, and the provision of wider energy storage, will enable the balanced use of renewable energy. Governments need to create incentives for deploying renewable energy. Governments need to create mechanisms to leverage and facilitate renewable energy deployment. Without Europe, outwith Europe, it will cost us more, and be more complex. Within Europe, it will be easier.

    So, in the meeting I attended, I put forward my vision : if the UK stays in Europe, it will be easier to handle problems of energy – improving and replacing infrastructure and plant, co-ordinating the uptake of new renewable energy technologies and dealing with emerging energy security issues. Why, the North Sea, as everybody knows, is draining dry, and we can only build certain levels of relationship with countries outside the European Union, such as Russia. If the UK left the EU, the EU would be competitors with the UK for Russian Natural Gas, for example. I said I thought that energy security was a good thing to explain to people and a good reason to raise support for UK’s continued participation in Europe.

    So, somebody else in the meeting, who shall remain faceless and nameless, poured very cold water on this idea. They seemed to disbelieve that the UK faces risks to energy security. Instead, they suggested that the pro-Europe argument should be based on how the UK can “keep our place at the table”. How out of touch can one get, I thought to myself ? This kind of patrician argument is not going to wash. Appealing to some non-existent pride in the UK’s continued role as stakeholder in the European project is going to go down like a lead balloon. It’s a vote loser, for sure.

    What most people care about first is money. Their money. Any appeal to their pockets is going to help. We live in tough times – thanks to Government austerity policy – and we still cannot get a handle on public borrowing and spending. Because of the Government’s austerity policy.

    So how about we cast it like this : your energy is going to get much more expensive if the UK abandons the European community of nations. Plus, your lights could genuinely go out, unless you, the people, either as taxpayers or billpayers, fork out for new energy investments that the energy companies haven’t made for 20 years. Because of privatisation. Without taking part in the European energy market harmonisation, and the European development of new and renewable energy infrastructure, plant and networks, your bills could significantly rise/spiral out of control. If European companies were required to sell energy assets back to the UK, because the UK pulled out of Europe, we would be in a very fine mess indeed. Do you really want this kind of chaos ? Energy policy in the UK is already bad enough.

    The facts are available to those who search : British production of oil and gas from the North Sea is declining at something like 6% a year. The UK became a net energy importer between 2004 and 2006 (depending on how you define it). The Netherlands will become a net Natural Gas importer in the 2020s. Norway’s Natural Gas will reach a peak some time in the 2020s. It’s no good thinking that because the UK is a “gas hub”, and that British finance can currently spin up gas imports to the UK, that this situation is going to remain true. Within 10 to 15 years, I think that the UK will face significant competition for Natural Gas supplies with other European countries. Better to be in the debating chamber, surely, rather than scratching at the wind-and-rain-splattered window from outside ? So can the UK forge a gas alliance with countries outside the European Union, and apart from Norway ? A gas import alliance that sticks ? And that isn’t demolished by competition from the rest of the European Union for gas supplies that come through pipes sitting in European Union territory ? OK, the UK might want to leave full European Union membership, and join Norway in the European Economic Area, but will this guarantee beneficial import status for Natural Gas from countries that supply the full members of the European Community ?

    I said, instead of trying to talk about direct opposites – either Inside Europe or Outside Europe – let’s talk about how things can be helped by wider co-operation. The European Union was founded on energy treaties – coal and nuclear energy (and steel), and now Europe needs to move to a union forged on renewable power and Natural Gas – and later Renewable Gas – and it’s going to be so much easier to do if the UK stays at the party.

    The North Sea needs re-developing. Not for oil, but for wind power. This is going to happen best with full cross-border co-operation. Already, the UK has agreed to play a large part in the “North Sea Offshore Grid” wind power project in league with Ireland, Germany, Denmark, Sweden, The Netherlands, Belgium and France. And Luxembourg, strangely, although it doesn’t have a coast. Unlike new nuclear power, which could be decades in construction, offshore and onshore wind in Europe can be quick-build. If you want new power, you pick wind and solar. And, despite policy fumbles, this is happening. Actually, in the end, who really cares about subsidies for renewable energy, when the most capital-heavy organisations in the world start backing renewable power ? In some ways, I don’t care who brings me low carbon energy, and I don’t care if I have to pay for it through my tax or my bills, I just want it to happen. OK, offshore wind power is for the big boys, and you’re never going to get a diversity of suppliers with this project, and the dreams of decentralised energy are vapours, whisked away by giant engineering firms, but at least renewable energy is going to happen. One day people will realise that for the newspapers to rehearse the arguments of High Net Worth Individuals, and for sheep-like energy ministers to complain about onshore wind power and solar farms, is just a way to keep small electricity generators out of the energy markets, and allow the incumbent energy players to keep making profits. But when the need for a multiplicity of small energy installations becomes critical, I think this tune will change.

    I can see all this. But, because I am not a spin meister, or spin meistress, or a campaigner, I’m not going to be crafting fine messages to share with my networks on this particular subject. I did start (see below), but then I thought better of it. I dislike the use of social media, web logging and journalism to push an agenda. The trouble is, I know that the people who are vehemently against the European endeavour have so many trigger arguments tested and ready to deploy, such as : immigration, regulations, budgetary demands. None of these stand up to scutiny, but they are very easy props on which to deploy Corpse Factory scares and scandals, up there with the War on Terror. The pro-European segment of the population always stays so silent. If there were to be a Referendum on Europe today, I can pretty much guarantee a kneejerk exit. The British public act collectively by reflex. They never re-analyse their position. They mob, gang and plunder.

    I don’t think pro-Europe organisations know how to sell Europe. But they shouldn’t need to “sell” Europe. European membership should be an obvious best choice. So why should I try to talk up Europe ? I couldn’t have any influence, as one lone voice, against the Daily Mails, Daily Expresses and Daily Telegraphs of this world. And anyway, it’s not really my fight to fight. I don’t have a job title that reads “arch propagandist”. I am not that person. It does not become me. I prefer straight-talking, not mind-bending.

    I won’t get invited back. That’s just fine. I am not a volunteer campaigner. I’m not a political pusher. I’ve only played the role of “evangelist” on climate change, renewable energy and good policy because sometimes there is little else I can think of that might help or make a difference. But I don’t have any influence. And I don’t want any. I am just going to continue telling it the way I see it. Giving my perspective. I cannot guarantee any outcomes. And anyway, I prefer democratic engagement over salesmanship. Don’t ask me to sell your ideas, your policies, your projections. I don’t want to.

    Full membership of the European Union is the logical option for the United Kingdom, no matter how many tired dead donkey corpses the rabid tabloid media keep digging up to appall us all. Sooner or later, we also need to consider joining the Euro currency, and I predict we will, but I’m not your convincer on that argument, either.

    “What has Europe ever done for us ?”

    Common Climate : Common Cause : Common Market

    On climate change, the United Kingdom has secured the Climate Change Act, legislation with broad-based support across all political parties. The UK shares the concerns of other European countries about the potential risks and impacts from climate change in our geographical region. Society-level change in response to climate change includes energy change – changing the sources and use of energy – and changing policies for land use to include planting forests and energy crops. Within the European Community, the UK has worked to secure region-wide legislation on renewable energy, energy efficiency, waste control and air quality. All of these contribute to the response to climate change, and have developed action on climate change into a common cause. In addition to regulatory change, the European Community is seeking to develop trading mechanisms to enable carbon dioxide emissions control, and it working to develop a common market in carbon.

    Common Future : Common Purpose : Common Interest

    Common Values : Common Opportunities : Common Voice

    Common Security : Common Goals : Common Networks

    Common Infrastructure : Common Society : Common Protection

    Common Standards : Common Framework : Common Development

  • Climbing the Concern Ladder

    Posted on October 25th, 2014 Jo No comments

    How do we get things changed in a democracy ? The model of political campaigning that has been established over the last century is failing us. In the past, if there was a problem, a small group of people could create a fuss about it, march some placards to somewhere relevant, write some letters, talk to some dignitaries, chain themselves to some railings, occupy a lobby, get some press, and after some years, maybe, get something done.

    These days there are just too many complaints for them all to be heard. Philanthropic, charitable and political messages crowd the stage. In this age of social media, the campaign metaphor has been replaced by a ladder of concern. Concern is expressed. Hopefully others will find that they too are sufficiently concerned, and reflect that concern through some medium. And slowly, it is hoped, this concern climbs the ladder of attention, until it is visible, audible. The entitled and endowed middle classes catch the concern, and repeat it. Lots of emails fly. George Monbiot writes about it in The Guardian. Some speeches are made at serious meetings. Angelina Jolie is invited to grace a conference. And then, hopefully, this concern hits the people who have some kind of leverage over the problem, and they act.

    Action is almost guaranteed if the concern is the result of a specific outrage, committed by a specific person or group, and has a specific solution. But otherwise, who knows ? How universal and impactful does a concern need to be before it gets acted upon ? And surely some things don’t need campaigns, because the governments already know enough about problems such as people trafficking, slavery, animal welfare, crime and torture ? After all, things such as prostitution and illegal drug trade are included in national economic statistics.

    I took public transport today in London and I was doused in outrage pouring from advertisements asking for charitable giving to prevent the inhuman practice of Female Genital Mutilation (FGM). As I read these appeals, I felt two overwhelming sensations – one of intense anger that children are being permanently injured because of insane and unjustifiable, hateful beliefs about female sexuality. And a second feeling of dragging despair that giving a small donation every month to this organisation would have very little impact on abusive culture, which leads to many forms of violation, not just the unimaginably painful and destructive incision and even resection of a child’s clitoris and the sewing together of her labia, leading to permanent nerve damage, lasting wounds, loss of sexual function, complications from incontinence, ruined relationships, injuries from sexual intercourse, and serious medical risks during childbirth, and possibly the need for reconstructive surgery.

    This is a problem which cannot be fixed by expressing normal murmurs of concern, building a wave of concern that climbs a ladder of concern, or making monthly token charitable payments. This concern is not susceptible to a campaign. What this problem needs is regulation, legislation, policing. This concern shouldn’t have to compete with all the other concerns out there, like distressed retired donkeys, threatened butterflies, meltdown polar bears, de-forested orangutans and by-catch dolphins. Some things just shouldn’t happen. They just shouldn’t be tolerated. And they shouldn’t be lost amongst an avalanche of other concerns. This problem is so serious that it should be an automatic priority for all the authorities, co-ordinating to detect and prevent it. This concern shouldn’t have to campaign for funds. Or attention.

    Switch to BBC News. Roger Harrabin reports that “The UK’s chief scientist says the oceans face a serious and growing risk from man-made carbon emissions. […] Sir Mark Walport warns that the acidity of the oceans has increased by about 25% since the industrial revolution, mainly thanks to manmade emissions. […] He told BBC News: “If we carry on emitting CO2 [carbon dioxide] at the same rate, ocean acidification will create substantial risks to complex marine food webs and ecosystems.” […] The consequences of acidification are likely to be made worse by the warming of the ocean expected with climate change, a process which is also driven by CO2.”

    Media Lens Editors reported this piece. My reaction was – who would be paying attention to this ? This is not the “dangerous climate change comes from global warming” story, this is the “other” carbon problem, the decimation of marine productivity and the whole pyramid of life, resulting from increasing levels of dissolved carbon dioxide in seawater because of higher levels of carbon dioxide in the air. The overwhelmingly major causes of this problem are irrefutably and definitely fossil fuel combustion, and its seriousness is hard to deny, even though Roger Harrabin attempts to make light of it by devoting column inches to a laboratory crab who isn’t getting with the programme.

    Ocean acidification is a concern that shouldn’t get lost in amongst other concerns. It should be paid serious levels of attention. And not just by middle class philanthropists who work for non-governmental organisations and charities. And yet, cursory analysis of the segmentation of the population who treat BBC News as a main and trusted information source may suggest that the only readers who would act on this piece are exactly these middle class charity staff, or at a push, retired middle class charity staff.

    My Media Lens comment was, “Right expert. Right message. Wrong audience. Wrong medium. The UK Government’s chief scientist. OK. Good. Ocean acidification. OK. Good. No quibbles about whether or not extra carbon dioxide in the atmosphere is a real problem or not (as known as “climate change” or “global warming”, which is real by the way). The BBC News. Wrong medium. Wrong audience. The only people going to listen to this are those who already know about the problem but are still as powerless to act as they were yesterday. The UK Government should present this information to the oil, gas and coal companies with a polite request for them to unveil their plan of action in the face of this undeniable problem.”

    There is no reason why this story should be covered in BBC News by Roger Harrabin. What can anybody reading it do about the problem ? There is no purpose for this article. It is a pointless statement of concern, or rather, a belittling rehearsal of the concern. Unless this article, and the thousands like it, lead to the Government demanding answers on Energy Change from the fossil fuel companies, there is no point in reporting it, or in this case, disparaging it with faint humour.

    The only time that ocean acidification should appear in a media piece is to report that the problem has been presented to the architects of increased ocean carbon dioxide, and answers have been requested.

    And who are the architects of increased atmospheric and ocean carbon dioxide ? Those who mine fossil fuels. Those companies like BP and Shell, ExxonMobil, and all the coal extraction companies should act. They should offer us alternative non-fossil fuel energy. And the news should be about how these companies are taking action to offer us Renewable Hydrogen, Renewable Methane, solar power, wind power and Zero Carbon transport fuels.

    Answers from the past will simply not do. Trying to assert that somebody needs to pay for pollution won’t prevent pollution occurring. Carbon taxes or carbon pricing won’t work – since they won’t prevent the mining of fossil fuels – and if fossil fuels are mined, of course they will be burned. Carbon combustion quotas won’t work – since economic wealth is based on burning carbon, so many forces will conspire to maintain levels of fossil fuel combustion. Carbon mining quotas won’t work, since the forces for increasing mining quotas are strong. Carbon trading won’t work, since it won’t reduce the amount of fossil fuels mined – because, obviously, if fossil fuels are mined, they will be burned.

    I am tired of reading about climate change, global warming, freshwater stress and ocean acidification in the news. It seems there is nothing I can do that I have not already done that can provide a solution to these problems. Enough with communicating the disaster. I want to read about engineering and energy companies who have switched business models to producing Zero Carbon energy. I want to hear how energy security concern is taking oil, gas and coal companies towards Renewable Everything.