Jumping off Mount Gideon

[Friends, I have suffered a little writer’s block, so I resolved to spark some creativity in myself by joining a little local writers group. The leader of the group suggested a title, I Googled the allegedly fictional location and found it existed, and that it was near a wind farm; and Google Maps led me to the rest of my research and inspiration for this piece. Caveat Lector : it’s fictional, even though a lot of it is factual. Also, it’s only a draft, but it needs to settle for a while before I can refine/sift it. ]

Jumping Off Mount Gideon [1]
by Jo Abbess
DRAFT

In the blue-green sun-kissed uplands, west of the sediment-spewing Chocolate River sprung at Petitcodiac village, and north of the shrunken Shepody Lake, its feeder tributaries re-engineered hundreds of years ago; north still of the shale flats jutting out into the Bay of Fundy, rises Mount Gideon, shrouded in managed native Canadian spruce, pine and fir. Part of the ranging, half-a-billion-year-old craton of the Caledonian Highlands of New Brunswick, it is solid ground, and its first European inhabitants must have been hardy. Looking up, the early settlers must have seen the once-bare hinterland looming over the mudstone and sandstone shoreline, with its steep gullied waterways carved by the receding pre-historic icesheets, and it must have been redolent of the mountainous “encampments of the just” [2] where the Biblical Gideon of the Book of Judges [3] trained his elite crack troops and plotted his revenge against the hordes of ravaging Midianites. The fur-trappers and gravel miners on the eve of the 18th Century built a community by the bay, and drove a winding road up through Mount Gideon’s ravines and over its heights, a byway long since eroded and erased and replaced by a functional forestry access track. Ethnic cleansing of the first-come Acadians in the summer of 1755 destroyed much of the larger settlements in the region of Chipoudy, henceforth anglicised to Shepody. Two groups of deportation vigilantes, originally tasked with taking prisoners, burned down the infrastructure and put to death those who hadn’t fled to the woods, and since that day, nobody really lives up on the mount, aside from the occasional lumberjack in his trailer home cached off New Ireland Road, and the odd temporary bivouac of touring hippy couples, en route from Hopewell Rocks to Laverty Falls on the Moosehorn Trail in the national park, via the Caledonia Gorge and Black Hole on the Upper Salmon River. These days there is no risk of social crisis, but an insidious slow-moving environmental crisis is underway. Streams falling from Mount Gideon, spider lines scratched on early parish maps, the West River and Beaver Brook, no longer flow year-round, and there’s very little freshwater locally, apart from a few scattered tarns, cradled in the impervious igneous, plutonic rock of the hinterland. Rainwater does support the timber plantations, for now, but drought and beetle are a rising threat, brought on by creeping climate change. Humans may no longer be setting fires, but Nature is, because human beings have interfered with the order of things.

Mount Gideon isn’t really a proper peak : from its summit it’s clear it’s only a local undulation like other protruding spine bones in the broad back of the hills. Its cap sprouts industrial woodland, planted in regular patterns visible from space, reached by gravel-bordered runnelled dirt track. The former ancient water courses that fall away sharply from the highest point on the weald are filled with perilously-rooted trees, leaning haphazardly out from the precipitous banks of the ravines. The plantations and roadside thickets obscure the view of Chignecto Bay and the strong-tided Minas Passage, where the tidal turbine energy project is still being developed. With no coastal horizon, this could be hundreds of kilometres from anywhere, in the centre of an endless Avalonian Terrane. A silvicultural and latterly agroforestry economy that grew from the wealth of wood eventually developed a dependence on fossil fuels, but what thin coal seams locally have long been exhausted, and the metamorphic mass underfoot salts no petroleum oil or gas beneath. Tanker ship and truck brought energy for tractor and homestead for decades, but seeing little future in the black stuff, local sparsely-populated Crown Land was designated for renewable energy. Just to the north of Mount Gideon lie the Kent Hills, a scene of contention and social protest when the wind farm was originally proposed. For some, wind turbines would mechanise the landscape, cause frequency vibration sickness, spark forest fires from glinting blades, induce mass migraine from flickering sweeps of metal. Windmills were seen as monsters, but sense prevailed, through the normal processes of local democracy and municipal authority, and even a wind farm expansion came about. It is true that engineering giants have cornered the market in the first development sweep of wind power – those hoping for small-scale, locally-owned new energy solutions to the carbon crisis have had to relent and accept that only big players have the economic power to kickstart new technologies at scale. There are some who suspect that the anti-turbine groups were sponsored secretly by the very firms who wanted to capitalise on the ensuing vacuum in local energy supply; and that this revolt went too far. There was speculation about sabotage when one of the wind turbine nacelles caught fire a while back and became a sneering viral internet sensation. When the shale gas 1970s extraction technology revival circus came to Nova Scotia, the wind power companies were thought to have been involved in the large protest campaign that resulted in a New Brunswick moratorium on hydraulic fracturing in the coastal lowlands. The geology was anyways largely against an expansion in meaningful fossil fuel mining in the area, and the central Precarboniferous massif would have held no gas of any kind, so this was an easily-won regulation, especially considering the risks to the Chignecto Bay fisheries from mining pollution.

TransAlta, they of “Clean Power, Today and Tomorrow”, sensed an prime moment for expansion. They had already forged useful alliances with the local logging companies during the development of Kent Hills Wind Farm, and so they knew that planning issues could be overcome. However, they wanted to appease the remnant of anti-technologists, so they devised a creative social engagement plan. They invited energy and climate change activists from all over Nova Scotia, Newfoundland, and the rest of Quebec to organise a pro-wind power camp and festival on the top of Mount Gideon. The idea was to celebrate wind power in a creative and co-operative way. The Crown Land was clearcut of trees as the first stage of the wind farm expansion, so the location was ideal. To enable the festival to function, water was piped to the summit, teepees and yurts were erected, and a local food delivery firm was hired to supply. The ambition of the cultural committee was to create an open, welcoming space with plenty of local colour and entertainment, inviting visitors and the media to review plans for the new wind farm. The festival was an international Twitter success, and attracted many North American, European and even Australasian revellers, although a small anarchist group from the French national territory in St Pierre et Miquelon created a bit of a diplomatic incident by accidentally setting fire to some overhanging trees in a ravine during a hash-smoking party.

Unbeknownst to the festival committee, a small and dedicated group of activists used the cover of the camp to plan a Gideon-style resistance to the Energy East pipeline plan. TransCanada wanted to bring heavy tar sands oil, blended with American light petroleum condensate, east from Alberta. The recent history of onshore oil pipelines and rail consignments was not encouraging – major spills had already taken place – and several disastrous accidents, such as the derailment and fireball at Plaster Rock, where the freight was routed by track to Irving Refinery. The original Energy East plan was to bring oil to the Irving Oil Canaport facility at Saint John, but a proposal had been made to extend the pipeline to the Atlantic coast. The new route would have to either make its circuitous way through Moncton, or cross under the Bay of Fundy, in order to be routed to Canso on the eastern side of Nova Scotia. The Energy East pipeline was already being criticised because of its planned route near important waterways and sensitive ecological sites. And the activist group had discovered that TransCanada had contracted a site evaluation at Cape Enrage on the western shore of the bay. Land jutted out into the water from here, making it the shortest crossing point to Nova Scotia. To route a pipeline here would mean it would have to cross Fundy National Park, sensitive fish and bird wading areas on the marshes and mudflats of the Waterside and Little Ridge, and cross over into the Raven Head Wilderness Area.

Gideon’s campaign had succeeded because of three things. His army had been whittled down to a compact, focused, elite force; they had used the element of surprise, and they had used the power of the enemy against itself. The activist group decided on a high level of secrecy about their alliance, but part of their plan was very public. They were divided into three groups : the Wasps, the Eagles and the Hawks. The Wasps would be the hidden force. They would construct and test drones, jumping off Mount Gideon, and flown out at night down the old river gullies, their route hidden by the topography, to spy on the TransCanada surface works. The plan was that when they had had enough practice the team would be ready to do this on a regular basis in future. If TransCanada did start building a pipeline here, the Wasps would be able to come back periodically and transport mudballs by drone to drop in the area. These squidgy payloads of dirt would contain special cultures of bacteria, including methanogens, that produce methane and other volatile chemicals. The environmental monitoring teams at the site would pick up spikes in hydrocarbon emissions, and this would inevitably bring into question the integrity of the pipeline. The Eagles would start a nationwide campaign for legal assistance, asking for lawyers to work pro bono to countermand the Energy East pipeline route, deploying the most recent scientific research on the fossil fuel industry, and all the factors that compromise oil and gas infrastructure. The Hawks would develop relationships with major energy investors, such as pension funds and insurance firms, and use public relations to highlight the risks of fossil fuel energy development, given the risks of climate change and the geological depletion of high quality resources. Nobody should be mining tar sands – the dirtiest form of energy ever devised. If TransCanada wanted to pipeline poisonous, toxic, air-damaging, climate-changing gloop all across the pristine biomes of precious Canada, the Mount Gideon teams were going to resist it in every way possible.

What the Mount Gideon teams did not know, but we know now, was that some of the activists at the camp were actually employees of the New Brunswick dynasties Irving and McCain. These families and their firms had saved the post-Confederation economy of the Maritime Provinces in the 20th Century, through vertical integration. Internally, within the Irving conglomerate, many recognised that fossil fuels had a limited future, even though some of the firms were part of the tar sands oil pipeline project. They were intending to take full advantage of the suspension of the light oil export ban from the United States for the purpose of liquefying Canadian heavy oils to make a more acceptable consumer product, as well as being something that could actually flow through pipes. They had held secret negotiations between their forestry units and the McCain family farming businesses. Research done for the companies had revealed that synthetic, carbon-neutral gas could be made from wood, grains and grasses, and that this would appeal to potential investors more than tar sands projects. They realised that if the Energy East project failed, they could step in to fill the gap in the energy market with their own brand of biomass-sourced renewables. They calculated that the potential for Renewable Gas was an order of magnitude larger than that of wind power, so they stood to profit as low carbon energy gained in popularity. Once again, in energy, big business intended to succeed, but they needed to do so in a way that was not confrontational. What better than to have a bunch of activists direct attention away from carbon-heavy environmentally-damaging energy to allow your clean, green, lean solutions to emerge victorious and virtuous ?

Notes

[1] This is a fictional, marginally futuristic account, but contains a number of factual, current accuracies.
[2] Bible, Psalm 34
[3] Bible, Judges 6-8

The Delta, The Ramp, The Stretch and The Duck #1

I gave a guest lecture at Birkbeck College, of the University of London on the evening of 22nd February 2017 in the evening, as part of the Energy and Climate Change module. I titled it, “Renewable Gas for Energy Storage : Scaling up the ‘Gas Battery’ to balance Wind and Solar Power and provide Low Carbon Heat and Transport”.

The basic concept is that since wind and solar power are variable in output, there has to be some support from other energy technologies. Some talk of batteries to store electrical energy as a chemical potential, and when they talk of batteries they think of large Lithium ion piles, or flow batteries, or other forms of liquid electrolyte with cathodes and anodes. When I talk about batteries, I think of electrical energy stored in the form of a gas. This gas battery doesn’t need expensive metal cathodes or anodes, and it doesn’t need an acid liquid electrolyte to operate. Gas that is synthesised from excess solar or wind power can be a fuel that can be used in chemical reactions, such as combustion, or burning, to generate electricity and heat when desired at some point in the future. It could be burned in a gas turbine, a gas boiler or a fuel cell, or in a vehicle engine. Or instead, a chemically inert gas can be stored under pressure, and this compressed gas can also be used to generate power on demand at a later date by harnessing energy from decompression. Another option would be holding a chemically reactive gas under pressure, allowing two stages of energy recovery.

As expected, the Birkbeck audience was very diverse, and had different social and educational backgrounds, and so there was little that could be assumed as common knowledge, especially since the topic was energy, which is normally only an interest for engineers, or at a stretch, economists.

I decided when preparing that I would attempt to use symbolism as a tool to build a narrative in the presentation. A bold move, perhaps, but I found it created an emblematic thread that ran through the slides quite nicely, and helped me tell the story. I used Mathematical and Physical notation, but I didn’t do any Mathematics or Physics.

I introduced the first concept : the Delta, or change. I explained this delta was not the same as a river delta, which gave me the excuse to show a fabulous night sky image of the Nile Delta taken from the International Space Station. I demonstrated the triangle shape that emerges from charting data that changes over time, and calculating its gradient, such as the temperature of the Earth’s surface.

I explained that the change in temperature of the Earth’s surface over the recent decades is an important metric to consider, not just in terms of scale, but in terms of speed. I showed that this rate of change appears in all the independent data sets.

I then went on to explain that the overall trend in the change in the temperature of the Earth’s surface is not the only phenomenon. Within regions, and within years and seasons, even between months and days, there are smaller scale changes that may not look like the overall delta. A lot of these changes give the appearance of cyclic phenomena, and they can have a periodicity of up to several decades, for example, “oscillations” in the oceans.

These discrete deltas and cycles could, to a casual observer, mask underlying trends, especially as the deltas can be larger than the trends; so climatologists look at a large set of measurements of all kinds, and have shown that some deltas are one way only, and are not cycling.

Teasing out the trends in all of the observations is a major enterprise that has been accomplished by thousands of scientists who have reported to the IPCC, the Intergovernmental Panel on Climate Change, part of the UNFCCC, the United Nations Framework Convention on Climate Change. The Fifth Assessment Report is the most comprehensive yet, and shows that global warming is almost certainly ramping up – in other words, global warming is getting faster, or accelerating.

Many projections for the future of temperature changes at the Earth’s surface have been done, with the overall view that temperatures are likely to carry on rising for hundreds of years without an aggressive approach to curtail net greenhouse gas emissions to the atmosphere – principally carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O).

From observations, it is clear that global warming causes climate change, and that the rate of temperature change is linked to the rate of climate change. In symbols, this reads : delta T for temperature over t for time leads to, or implies, a delta C for climate over t for time. The fact that global warming and its consequential climate change are able to continue worsening under the current emissions profile means that climate change is going to affect humanity for a long stretch. It also means that efforts to rein in emissions will also need to extend over time.

I finished this first section of my presentation by showing a list of what I call “Solution Principles” :-

1. Delays embed and extend the problem, making it harder to solve. So don’t delay.

2. Solve the problem at least as fast as creating it.

3. For maximum efficiency, minimum cost, and maximum speed, re-deploy agents of the problem in its solution.

In other words, make use of the existing energy, transport, agriculture, construction and chemical industries in approaching answers to the imperative to address global warming and climate change.

JODI Oil and BP #7

I both love and loathe Geography at the same time. I squirm at the irregularities – not the Slartibartfastian squiggly coastlines – but the way that people of differing cultures, languages and political or religious adherences refuse to occupy territory neatly, and deny being categorised properly. Actually, no, that’s just a joke. I love diversity, and migration, and long may culture continue to evolve. I find the differing mental geographies of people intriguing – such as the rift between the climate change science community and those few shrill shills resisting climate change science; for some reason often the very same people ardently opposed to the deployment of renewable energy. How to communicate across psychological boundaries remains an ongoing pursuit that can be quite involving and rewarding sometimes, as the entrenched antis diminish in number, because of defections based on facts and logic. One day, I sense, sense will prevail, and that feels good.

So I like divergence and richness in culture, and I like the progress in communicating science. What I don’t like is trying to map things where there is so much temporal flux. The constantly rearranging list of Membership of the European Union, for one good and pertinent example; the disputes over territory names, sovereignty and belonginess. When it comes to Energy, things get even more difficult to map, as much data is proprietary (legally bound to a private corporation) or a matter of national security (so secret, not even the actual governments know it); or mythical (data invented on a whim, or guessed at, or out of date). And then you get Views – the different views of different organisations about which category of whatever whichever parties or materials belong to. In my struggle to try to understand petroleum crude oil production figures, I realised that different organiations have different ways of grouping countries, and even have different countries in similar-sounding groups.

So I decided that as a first step towards eliminating categorisation overlaps or omissions, I should establish my own geography which was flexible enough to accommodate the Views of others, and permit me to compare their data more knowingly. Here are my first versions :-

1. Country Regional Grouping
I have given up to three levels of geographical detail, and an alternative grouping for most of the main land masses. Here it is in Excel spreadsheet format (.XLS). And here it is as a Comma-Delimited text file (.CSV).

2. Country Regional Comparison
I have compared the definitions of territorial regions between the following organisations and agencies : JODI (Joint Organisations Data Initiative), BP plc (the international company formerly known as British Petroleum), OPEC (the Organization of Petroleum Exporting Countries), EIA (United States of America, Department of Energy, Energy Information Administration), IEA (International Energy Agency of the OECD Organisation for Economic Co-operation and Development) and the United Nations (UN). Here it is as an Excel spreadsheet (.XLS). And here it is as a Comma-Delimited text file (.CSV).

There are some differences. Surprisingly few, in fact, if you only consider countries with significant oil production. I did find quite a lot of spelling mistakes, however, even in documentation that I assume was partially machine-generated.

The result is that I can be fairly confident that if I separate out data for China, Mexico, Israel and Turkey and a few other less significant countries when I compare data sources, any large divergence in numbers will have to be down to the different ways that people count oil rather than the way they categorise territories.

JODI Oil and BP #4

In my seemingly futile and interminable quest to reconcile the differences between the data provided by the JODI Oil organisation and BP as revealed in part by the annual BP Statistical Review of World Energy, I have moved on to looking at production (primary supply), found a problem as regards Africa, and had some confirmation that a major adjustment in how the data is collected happened in 2009.

First – the problem with Africa. The basket “Other Africa” for oil production is far less in the BP data than it is in the JODI Oil data – shown by negative figures in the comparison. For 2015, this is approximately 65% in scale (-3800 KBD) of the summed positive difference between the BP and JODI figures for the named countries (5884 KBD). This reminds me that there was a problem with the refined oil product consumption figures for “Other Africa” as well. Without a detailed breakdown of individual country accounts from BP it is almost impossible to know where these differences arise, it seems to me, or begin to understand why these differences are so large. Maybe I should just ask BP for a full country breakdown – if they’d ever deign to communicate this kind of information with me. Standing by my email Inbox right now… Could be here some time…

It is fairly clear from the comparison for North America that a major shift in understanding by either BP or JODI Oil took place in 2009, as the oil production data converge significantly for that year onwards. There was similar evidence of this in the refined oil products consumption data.

As with the consumption data, the production data for the Middle East region is strongly divergent between BP and JODI. I did read something potentially useful in the JODI Oil Manual, which I would recommend everyone interested in energy data to read. In the notes for Crude Oil, I read : “One critical issue is whether the volumes of NGL, lease or field condensates and oils extracted from bituminous minerals are included. All organisations exclude NGL from crude oil. If condensates are able to be excluded, it should be noted to the JODI organisation(s) of which the country/economy is a member. Most OPEC member countries exclude condensates.” Now, I guess, the struggle will be to find some data on condensates. Of which there are a variety of sources and nomenclature, be they light liquid hydrocarbons from oil and gas production or oil and gas refining/processing/cryoprocessing. There may be faultlines of comprehension and categorisation, such as about who considers NGPL or Natural Gas Plant Liquids from Natural Gas processing plants to be in the category of NGLs – Natural Gas Liquids, and therefore effectively in the bucket of Crude Oil.

I’m no closer to any answers on why BP oil data doesn’t align with JODI Oil data. And it looks like I’ve just opened a whole can of condensate wormy questions.

JODI Oil and BP #3

So after the mystery of why JODI Oil regional refinery products demand data (oil products consumption) is so different from the BP Statistical Review of World Energy for 2016, I took a look at the individual country data supplied by BP and compared it to the JODI Oil numbers.

The first thing that struck me was that there are many items of data that are very similar between the BP and JODI Oil data; and yet there are also a good number that are significantly different – and the vast majority of these show BP reporting much higher oil consumption than JODI. This means that the definitions that BP and JODI are using for oil products consumption must correlate in many cases, when countries make their reports. But it also means that there are some understandings of oil consumption that BP has that do not have cognates in the JODI Oil reports.

The second thing that struck me was that each region in BP apart from North America is showing a total much higher than JODI Oil. Only some of the countries are specifically named in the BP report, and other countries are lumped into the bucket of “Other” within each region. Each “Other” figure is much higher in the BP report than in the JODI Oil data. Part of the reason is clearly going to be because some countries have not been reporting to JODI Oil, or not reporting reliably. For example, for South and Central America, JODI Oil data for Bermuda, Cuba, El Salvador, Haiti and Suriname are all zeroes; and JODI Oil data for Bolivia has zeroes for NOV2015 and DEC2015 (other months average at 63 KBD). But these could all be expected to be low oil products producers; so it is unclear to me where BP thinks consumption is occurring outside of the individually-named countries.

The “Other Africa” line is much higher in BP than in JODI, which looks dubious. I have not looked at this closely, but this might relate to countries such as Nigeria who produce and also consume a lot of oil.

The most significant differences : countries where no JODI Oil data is available : Turkmenistan, Uzbekistan, Israel, Bangladesh, Pakistan; and also countries with medium-to-high BP oil consumption data compared to JODI : Brazil, Venezuela, Belarus, Kazakhstan, Russian Federation, all the named Middle East countries, South Africa, China, India, Indonesia, Malaysia, Singapore, Thailand, Vietnam.

It could be that in some cases the BP data is for all oil consumption – from national refineries and imports; whereas the JODI Oil data is for consumption from a nation’s own refinery. I would need to check this in more detail, but at first glance, the BP oil consumption data for the Middle East is much more divergent from the JODI Oil data than for other regions, and this does not make sense. I know that refinery product self-consumption is increasing in Middle East countries that are in strong economic development, but not all Middle East countries are experiencing increasing national demand, and I cannot imagine that oil products imports are so high in this region as to explain these differences between BP and JODI Oil data.

Another thing to note is that Commonwealth of Independent States (CIS) (formerly known as the “Former Soviet Union”) data divergence accounts for most of the data divergence in the “Europe & Eurasia” region; and that BP oil consumption data for the Russian Federation (which forms a part of CIS) is much higher than the data given to JODI.

I now have too many questions about how and from whom all this data is sourced, how categories of liquid hydrocarbons are delineated, and doubts about how anybody could check the reliability of any of this data. Without more information, I cannot analyse this data further; but maybe looking at oil consumption is not that illuminating. There appears to be a small and steady increase in annual oil demand and consumption over the recent period – this is indicated by both BP and JODI Oil data. The real issues for my analysis are whether oil production is capable of sustainably satisfying this demand-with-small-annual-increases, so my next step is to move to look at liquid hydrocarbons production data.

JODI Oil and BP #2

Previously, I was comparing data from the annual BP Statistical Review of World Energy with the annual averages of JODI Oil data, and when I cast my eye over a table of differences, it was easy to spot that something happened in 2009 – the data from the two sources jumped to more closely correlate. For some countries and product types, if it didn’t happen in 2009, it happened in 2010; but since then some data lines have begun to diverge again. Either somebody was lying prior to 2009 (and by “lying”, I mean, making errors in reporting on hydrocarbon refinery), or something changed in the definitions of the sub-categories of hydrocarbon products from petrorefineries. At this stage, I cannot tell if the corrections were done by BP or by JODI Oil, but the corrections show a step change. This intrigued me, so, here follow a few diagrams and some summary notes.



The example of North America is dominated by a correction in the data for the United States of America (whether the correction was in the JODI Oil data, or in the BP data) for the “Others” category. Since 2009, the data lines have been coming progressively closer, until it seems they are reporting from either the same sources, or using the same industry data to base their calculations on.


Data from South and Central America as a whole is rather random when compared between BP and JODI – however there is a clear correction in the category “Others” in 2009, and perhaps a further correction to both “Light distillates” and “Others” in 2011. Since then, the trend is for BP and JODI data to diverge.




The 2009 correction for the “Europe and Eurasia” region (an artefact) is mainly due to the big correction for the European Union in 2009 for “Light distillates” and “Others”. The data for CIS undergoes a smaller correction, and this is in 2010, for “Fuel oil” and “Others”.


The “Others” category is also adjusted for the Middle East in 2009.


There are minor corrections in the data for Africa in both 2009 and 2010, and recently a large divergence for “Middle distillates”.




Asia Pacific data is corrected for “Light distillates”, “Middle distillates” and “Others” in 2009, reflecting corrections in both China and Japan data.




Corrections in 2009 for OECD data are the main reason for the differences between BP and JODI to snap shut; whilst Non-OECD data still remains divergent.

JODI Oil and BP #1

Once a year BP plc publishes their Statistical Review of World Energy, as they have done for 65 years, now. Recent editions have been digital and anodyne, with lots of mini-analyses and charts and positive messages about the petroleum industry. Whenever energy researchers ask questions, they are invariably directed to take a look at the BP report, as it is considered trustworthy and sound. Good scientists always try to find alternative sources of data, but it can be hard comparing the BP Stat Rev with other numerical offerings, partly because of the general lack of drill-down in-depth figures. Two other reputable data sources are the US Energy Information Administration (EIA) and the JODI Oil initiative. I have already looked at EIA data and data from the National Energy Board (NEB) of Canada recently in order to check on the risks of Peak Oil. Now I’m diving into JODI.

Two of my concerns of the week are to try to understand the status and health of the global economy – which can be seen through the lens of overall consumption of hydrocarbons; and to see if there are changes happening in relative demand levels for the different kinds of hydrocarbons – as this could indicate a transition towards a lower carbon economy. The BP Stat Rev of June 2016 offers an interesting table on Page 13 – “Oil: Regional consumption – by product group”, which breaks down hydrocarbon demand into four main categories : Light distillates, Middle distillates, Fuel oil and Other. The “Other” category for BP includes LPG – Liquefied Petroleum Gases, a blend of mostly propane and butanes (carbon chain C3 and C4), which are gaseous and not liquid at normal room temperature and pressure – so strictly speaking aren’t actually oil. They also have different sources from various process units within petroleum refinery and Natural Gas processing plants. The “Other” category also includes refinery gas – mostly methane and ethane (carbon chain C1 and C2), and hydrogen (H2); and presumably fuel additives and improvers made from otherwise unwanted gubbins at the petrorefinery.

Not by coincidence, the JODI Oil database, in its Secondary data table, also offers a breakdown of hydrocarbon demand from refinery into categories almost analagous to the BP groupings – LPG, Gasoline, Naphtha, Kerosenes, Gas/Diesel oil, Fuel oil, and Other products; where LPG added to Other should be the same as BP’s “Other” category, Gasoline added to Naphtha should be equivalent to BP’s “Light distillates”; and Kerosenes added to Gas/Diesel oil should be analagous to BP’s “Middle distillates. So I set out to average the JODI Oil data, day-weighting the monthly data records, to see if I could replicate the BP Stat Rev Page 13.

Very few of the data points matched BP’s report. I suspect this is partly due to averaging issues – I expect BP has access to daily demand figures, (although I can’t be sure, and I don’t know their data sources); whereas the JODI Oil data is presented as monthly averages for daily demand. However, there are a lot of figures in the BP report that are high compared to the JODI Oil database. This can only partly be due to the fact that not all countries are reporting to JODI – four countries in the Commonwealth of Indepdendent States (CIS) – formerly known as “Former Soviet Union” – are not reporting, for example. I’m wondering if this over-reporting in the BP report might be due to differences in the way that stock transfers are handled – perhaps demand for refinery products that are intended for storage purposes rather than direct consumption is included in the BP data, but not in JODI – but at the moment I don’t have any relevant information with which to confirm or deny this concept.

Anyway, the data is very close between BP and JODI for the United States in recent years, and there are some other lines where there is some agreement (for example – Fuel oil in Japan, and Light distillates in China), so I am going to take this as an indication that I understand the JODI Oil data sufficiently well to be able to look at monthly refinery demand, refinery output and oil production for each region and hopefully reach some useful conclusions.

Peak Oil Redux

Peak conventional crude petroleum oil production is apparently here already – the only thing that’s been growing global total liquids is North American unconventional oils : tight oil – which includes shale oil in the United States of America – and tar sands oil from bitumen in Canada – either refined into synthetic crude, or blended with other oils – both heavy and light.

But there’s a problem with unconventional oils – or rather several – but the key one is the commodity price of oil, which has been low for many months, and has caused unconventional oil producers to rein in their operations. It’s hitting conventional producers too. A quick check of Section 3 “Oil data : upstream” in OPEC’s 2016 Annual Statistical Bulletin shows a worrying number of negative 2014 to 2015 change values – for example “Active rigs by country”, “Wells completed in OPEC Members”, and “Producing wells in OPEC Members”.

But in the short term, it’s the loss of uneconomic unconventional oil production that will hit hardest. Besides problems with operational margins for all forms of unconventionals, exceptional air temperatures (should we mention global warming yet ?) in the northern part of North America have contributed to a seizure in Canadian tar sands oil production – because of extensive wildfires.

Here’s two charted summaries of the most recent data from the EIA on tight oil (which includes shale oil) and dry shale gas production in the United States – which is also suffering.

Once the drop in North American unconventionals begins to register in statistics for global total liquids production, some concern will probably be expressed. Peak Oil just might be sharper and harder and sooner than some people think.

Brexit or Remain ? Evolving Political Realities

I have been looking at some of the finer details of the new BP report – the annual “Statistical Review of World Energy” for 2016. It’s a bit confusing trying to compare it to the 2015 report, to try to see how positions have changed, partly because of the evolving nature of territorial politics of the various countries and their membership of regional blocs. For example, in the 2015 report, the country that calls itself Eire was known as “Republic of Ireland”, but in the 2016 report it is referred to as “Ireland”; and the bloc that BP knew as “Former Soviet Union” is know labelled as “Commonwealth of Independent States”, which has lost Estonia to the European Union, and Georgia, Latvia and Lithuania to the region known as “Europe” – which is not the same as the European Union or OECD Europe. It’s going to take me a few weeks to analyse this report, and compare the data to that available from other sources, such as JODI Oil, which last reported on 20th June 2016.

In the meantime, the country known as the United Kingdom of Great Britain and Northern Ireland – itself a regional bloc – could well vote to secede from the European Union, an Act which, if carried and enacted by the British Parliament, and overseen by whoever is Prime Minister, would consume all the working hours of all civil servants in all Departments of Government for many years. This would be the administrative spanner-in-the-works to beat all bureaucratic snarl-ups – the unpicking of the UK from the EU – as it would involve extensive and detailed work to rewrite and recode the entire British legislative corpus. There wouldn’t be any time left to actually govern the country, or support action on climate change.

But this is what the so-called “Eurosceptics” want – to hold up progress on climate change action. They are as much climate change science deniers as they are European Union-haters. In fact, leading science-denying politicians may have coerced the Prime Minister into agreeing to the EU Referendum in the first place. It really does matter how the UK voters act on 23rd June 2016 in the polling booths. If the UK votes to remain in the European Union, then the Energy Union will continue, and environmental legislation – including measures to combat climate change – will go ahead – bringing energy and climate security. If the UK votes to leave the European Union, where it plays a vital role, then ministers and civil servants will be locked into discussions attempting to negotiate the UK’s changed relationship with the EU for months and months to come. The government won’t be free to attend to policies to alleviate the effects of global recession on the country, or deal with managing immigration, creating employment, the need for building homes, or bailing out failing industry if they spend all their time over the next few years re-drafting laws to remove the effects of European Union from them. More importantly, the UK Government will be too busy undoing European Union to attend to responsibilities to keep to the UK’s Carbon Budget, or developing the renewable energy industries.

Vote Remain. For climate, for security, for society.

New Hands on DECC

So, the Department of Energy and Climate Change (DECC) have a new top dog – Alex Chisholm – formerly the attack beast in charge of putting pressure on the electricity utility companies over their pricing rip-offs when at the Competition and Markets Authority (CMA).

There’s a huge and dirty intray awaiting this poor fellow, including the demonstrable failings of the Energy Act that’s just been signed into law. I’d recommend that he call for the immediate separation of the department into two distinct and individually funded business units : Nuclear and The Rest. Why ? Because nuclear power in the UK has nothing to do with answering the risk of climate change, despite some public relations type people trying to assert its “low carbon” status. Plus, the financial liabilities of the nuclear section of DECC mean it’s just going to bring the rest of the department down unless there’s a divorce.

The UK Government have been pursuing new fission nuclear power with reams of policy manoeuvres. The call for new nuclear power is basically a tautological argument centring on a proposal to transition to meet all energy demand by power generation resources, and the presumption of vastly increasing energy independence. If you want to convert all heating and cooling and transport to electricity, and you want to have few energy imports, then you will need to have a high level of new nuclear power. If new nuclear power can be built, it will generate on a consistent basis, and so, to gain the benefit of self-sufficiency, you will want to transfer all energy demand to electricity. Because you assume that you will have lots of new nuclear power, you need to have new nuclear power. It’s a tautology. It doesn’t necessarily mean it’s a sensible or even practical way to proceed.

DECC evolved mostly from the need to have a government department exclusively involved in the decommissioning of old nuclear power plants and the disposal of radioactive nuclear power plant waste and waste nuclear fuel. The still existing fleet of nuclear power plants is set to diminish as leaking, creaking, cracking and barely secure reactors and their unreliable steam generation equipment need to be shut down. At which point, this department will lose its cachet of being an energy provider and start to be merely an energy user and cash consumer – since there’s not enough money in the pot for essential decommissioning and disposal and DECC will need to go cap in hand to the UK Treasury for the next few decades to complete its core mission of nuclear decommissioning. It doesn’t take too much of a stretch of the imagination to figure out why this department will remain committed to the concept of new nuclear power. It would certainly justify the continuing existence of the department.

The flagship DECC-driven nuclear power project for Hinkley Point C has run aground on a number of sharp issues – including the apparent financial suicide of the companies set to build it, the probably illegal restructuring loans and subsidy arrangements that various governments have made, what appears to be the outright engineering incompetency of the main construction firm, and the sheer waste of money involved. It would be cheaper by around 50% to 70% to construct lots of new wind power and some backup gas-fired power generation plant – and could potentially be lower carbon in total – especially if the gas is manufactured low carbon gas.

In order to stand a chance of making any new low carbon energy investment in the UK, the Department of Energy and Climate Change needs to split – much like the banks have. The risky, nuclear stuff in one team, and the securely certainly advantageous renewable energy stuff in the other team. We will have more wind power, more solar power and more of lots of other renewables in the next 10 years. We are unlikely to see an increase in nuclear power generation in the UK for the next 15. It’s time to split these business units to protect our chances of successful energy investment.

Fields of Diesel Generators

Recently, I had a very helpful telephone conversation with somebody I shall call Ben – because that’s his name, obviously, so there’s no point in trying to camoflage that fact. It was a very positive conversation, with lots of personal energy from both parties – just the sort of constructive engagement I like.

Amongst a range of other things, we were batting about ideas for what could constitute a business model or economic case for the development of Renewable Gas production – whether Renewable Hydrogen or Renewable Methane. Our wander through the highways and byways of energy markets and energy policy led us to this sore point – that the National Grid is likely to resort to “fields of diesel generators” for some of its emergency backup for the power grid in the next few years – if new gas-fired power plants don’t get built. Various acronyms you might find in this space include STOR and BM.

Now, diesel is a very dirty fuel – so dirty that it appears to be impossible to build catalytic exhaust filters for diesel road vehicles that meet any of the air pollution standards and keep up fuel consumption performance. It’s not just VW that have had trouble meeting intention with faction – all vehicle manufacturers have difficulties balancing all the requirements demanded of them. Perhaps it’s time to admit that we need to ditch the diesel fuel itself, rather than vainly try to square the circle.

The last thing we really need is diesel being used as the fuel to prop up the thin margins in the power generation network – burned in essentially open cycle plant – incurring dirty emissions and a massive waste of heat energy. Maybe this is where the petrorefiners of Great Britain could provide a Renewable Gas alternative. Building new plant or reconfiguring existing plant for Renewable Gas production would obviously entail capital investment, which would create a premium price on initial operations. However, in the event of the National Grid requiring emergency electricity generation backup, the traded prices for that power would be high – which means that slightly more expensive Renewable Gas could find a niche use which didn’t undermine the normal economics of the market.

If there could be a policy mandate – a requirement that Renewable Gas is used in open cycle grid-balancing generation – for example when the wind dies down and the sun sets – then we could have fields of Renewable Gas generators and keep the overall grid carbon emissions lower than they would otherwise have been.

Both Ben and I enjoyed this concept and shared a cackle or two – a simple narrative that could be adopted very easily if the right people got it.

Renewable Gas – that’s the craic.

The Lies That You Choose

I have had the great fortune to meet another student of the Non-Science of Economics who believes most strongly that Energy is only a sub-sector of the Holy Economy, instead of one of its foundations, and doesn’t understand why issues with the flow of commodities (which include energy resources) into the system is critical to the survival of the global economy, and that the growth in the Services Industries and Knowledge Economy cannot compensate for the depletion of freshwater, fossil fuels and other raw resources.

This person believes in Technology, as if it can fly by itself, without seeming to understand how Technological Innovation is really advanced by state investment – a democracy of focus. This otherwise intelligent learner has also failed to grasp, apparently, that the only way that the Economy can grow in future is through investment in things with real value, such as Energy, especially where this investment is essential owing to decades of under-investment precipitated by privatisation – such as in Energy – investment in both networks of grids or pipes, and raw resources. And this from somebody who understands that developing countries are being held back by land grab and natural resource privatisation – for example ground water; and that there is no more money to be made from property investment, as the market has boomed and blown.

How to burst these over-expanded false value bubbles in the mind ? When I try to talk about the depletion of natural resources, and planetary boundaries, people often break eye contact and stare vacantly out of the nearest window, or accept the facts, but don’t see the significance of them. Now this may be because I’m not the best of communicators, or it may be due to the heavy weight of propaganda leading to belief in the Magical Unrealism always taught in Economics and at Business Schools.

Whatever. This is where I’m stuck in trying to design a way to talk about the necessity of energy transition – the move from digging up minerals to catching the wind, sunlight and recycling gases. If I say, “Look, ladies and laddies, fossil fuels are depleting”, the audience will respond with “where there’s a drill, there’s a way”. As if somehow the free market (not that a free market actually exists), will somehow step up and provide new production and new resources, conjuring them from somewhere.

What are arguments that connect the dots for people ? How to demonstrate the potential for a real peak in oil, gas, coal and uranium production ? I think I need to start with a basic flow analysis. On the one side of the commodity delivery pipeline, major discoveries have decreased, and the costs of discovery have increased. The hidden underbelly of this is that tapping into reservoirs and seams has a timeline to depletion – the point at which the richness of the seam is degraded significantly, and the initial pressure in the well or reservoir is reduced to unexploitable levels – regardless of the technology deployed. On the other end of the commodities pipeline is the measure of consumption – and most authorities agree that the demand for energy will remain strong. All these factors add up to a time-limited game.

Oh, you can choose to believe that everything will continue as it always seems to have. But the Golden Age of Plenty is drawing to a close, my friend.

Cumbria Floods : Climate Defenceless

I fully expect the British Prime Minister, David Cameron, will be more than modicum concerned about public opinion as the full toll of damage to property, businesses, farmland and the loss of life in Cumbria of the December 2015 floods becomes clear. The flooding in the Somerset Levels in the winter of 2013/2014 led to strong public criticism of the government’s management of and investment in flood defences.

The flood defences that were improved in Cumbria after the rainstorm disaster of 2009 were in some cases completely ineffective against the 2015 deluge. It appears that the high water mark at some places in Cumbria was higher in the 2015 floods than ever recorded previously, but that cannot be used as David Cameron’s get-out-of-jail-free clause. These higher flood levels should have been anticipated as a possibility.

However, the real problem is not the height of flooding, but the short recurrence time. Flood defences are designed in a way that admits to a sort of compromise calculus. Measurements from previous floods are used to calculate the likelihood of water levels breaching a particular height within a number of years – for example, a 1-in-20 year flood, or a 1-in-200 year flood. The reinforced flood defences in Cumbria were designed to hold back what was calculated to be something like a 1-in-100 year flood. It could be expected that if within that 100 years, other serious but not overwhelming flooding took place, there would be time for adaptation and restructuring of the defences. However, it has taken less than 10 years for a 1-in-100 year event to recur, and so no adaptation has been possible.

This should suggest to us two possibilities : either the Environment Agency is going about flood defences the wrong way; or the odds for the 1-in-100 year flood should be reset at 1-in-10-or-so years – in other words, the severity profile of flooding is becoming worse – stronger flooding is more frequent – which implies acceptance of climate change.

The anti-science wing of the Conservative Party were quick to construct a campaign against the Environment Agency in the South West of England in early 2014 – distracting people from asking the climate change question. But this time, I think people might be persuaded that they need to consider climate change as being a factor.

Placing the blame for mismanagement of the Somerset Levels at the door of the Environment Agency saved David Cameron’s skin in 2014, but I don’t think he can use that device a second time. People in Cockermouth are apparently in disbelief about the 2015 flooding. They have barely had time to re-establish their homes and lives before Christmas has been cancelled again for another year.

Will the Prime Minister admit to the nation that climate change is potentially a factor in this 2015 waterborne disaster ?

I remember watching in in credulity as the BBC showed the restoration of Cockermouth back in 2010 – it was either Songs of Praise or Countryfile – I forget which. The BBC were trying to portray a town getting back to normal. I remember asking myself – but what if climate change makes this happen again ? What then ? Will the BBC still be mollifying its viewers, lulling them back into a false sense of security about the risks of severe climate change ? What if there is no “normal” to get back to any more ? Is this partly why the Meteorological Office has decided to name winter storms ?

Can future climate-altered floods be escaped – or are the people of Britain to remain defenceless ?

Energy Security : National Security #4

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

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

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…

Andrea Leadsom : Energy Quadrilemma #1

The energy “trilemma” is the dilemma of three dimensions : how to decarbonise the energy system, whilst continuing to provide affordable energy to consumers, at a high security of supply. The unspoken fourth dimension is that of investment : just who is going to invest in British energy, particularly if green energy booster subsidies and regulatory measures are binned ? The UK Government have in the past few years believed that they need to support new investment in new technologies, but it looks likely that this drive is about to lose all its incentives.

Today, Amber Rudd, Secretary of State for Energy and Climate Change, faces an inquiry into Department of Energy and Climate Change (DECC) accounts and budgetary spending, and some say this could be a prelude for the closure or severe contraction of the whole department. If all Climate Change measures were put into abeyance, or passed over to the new Infrastructure Commission, the only remaining function of DECC could be nuclear power plant and nuclear waste decommissioning. It might have to change its name, even.

At last week’s Energy Live News conference, Andrea Leadsom, Minister of State for Energy at the UK Government’s Department of Energy and Climate Change (DECC), headed up the morning, with a bit of a lead in from ELN Editor Sumit Bose. He said that continuing challenges arose from the optimisation of balancing reserves and demand side management in electricity generation. He said that policy had perhaps swung away from the projection of 100% electrification of British energy, as this would require at least 15% more committed capital expenditure – although there would be savings to be had in operational expenditure. He also said that there is an ongoing budgetary conflict going on in government departments about the public money available to spend on investment in infrastructure (including that for energy). Obviously, the announcement of the Infrastructure Commission is going to help in a number of areas – including reaching for full electrification of the railways – a vital project. Then he introduced the Minister.

Andrea Leadsom said, “This government is determined to resolve the energy trilemma, decarbonising at the lowest cost to the consumer whilst keeping the lights on. In the past we did tend to have crazes on different technologies….”. At this point I wondered if she included nuclear power in that set of crazes, but her later remarks confirmed she is still entrenched in that fad.

Leadsom said, “There’s been a big move to renewable energy technologies, and quite rightly too. We need a wide diversity of electricity sources. We need to try and improve the new nuclear programme…”, at which point I thought to myself, “Good luck with that !”. She said, “Renewable energy has trebled. We need [to fund] that transition from unabated coal, [turn on to] gas and renewables. [But] as we saw yesterday – there is an intermittency of renewables.”

Andrea Leadsom was referring to the previous day, when National Grid has issued their first call for surplus top-up power generation since 2012. Owing to a confluence of weather systems over the UK, the atmosphere was becalmed, and wind power output was close to zero. However, this had already been predicted to happen. The lack of wind power was not the problem.

The problem lay in two other areas. Of the completely inflexible nuclear power plants, three generators were out of action for scheduled maintenance (Hunterston B, Reactor 3; Heysham 1, Reactor 1 and Hartlepool Reactor 1). And so when two coal-fired power plants which normally would have been operational were out of action, and one failed apparently between 12:45pm and 12:51pm (Eggborough, Fiddlers and Rugeley according to various sources) dropping approximately 640 megawatts (MW) out of the system (according to BM Reports data), National Grid had to resort to elements of their balancing “toolkit” that they would not normally use.

The operators generating for the National Grid were able to ramp up Combined Cycle Gas Turbine (CCGT), and various large electricity users with special arrangements with National Grid were stopped using power. By around 18:00 6pm the emergency was over, with peak demand for the evening levelling off at around 48 gigawatts (GW).

Although National Grid handled the problem well, there was a serious risk of blackouts, but again, not because of wind power.

If during the period of supply stress, one of the nuclear power plants had suddered an outage, that would have created the “nightmare scenario”, according to Peter Atherton, from Jefferies, quoted in The Guardian newspaper. The reason for this is that the nuclear power plants are large generators, or “baseload” generators. They have suffered from problems of unreliability over the recent years, and whenever they shutdown, either in a planned or an unplanned manner, they cause the power grid a massive headache. The amount of power lost is large, and there’s sometimes no guarantee of when the nuclear generation can be restored. In addition, it takes several hours to ramp up replacement gas-fired power plants to compensate for the power lost from nuclear.

Yes, Andrea Leadsom, more renewable energy is essential to meet decarbonisation goals. Yes, Andrea Leadsom, renewable energy technologies have an inherent intermittency or variability in their output. No, Andrea Leadsom, National Grid’s problems with power generation during the winter months is not caused by wind power on the system – wind power is providing some of the cheapest resources of electricity. No, Andrea Leadsom, insecurity in Britain’s power supply is being caused by ageing nuclear and coal power plants, and the only way to fix that is to create incentives to develop a plethora of differently-scaled generation facilities, including many more decentralised renewable energy utilities, flexible top-up backup gas-fired power plants, including Combined Heat and Power town-scale plants, and Renewable Gas production and storage facilities.

The Great Policy Reset

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.

What To Do Next

Status-checking questions. I’m sure we all have them. I certainly do. Several times a week, or even day, I ask myself two little questions of portent : “What am I doing ?” and “Why am I here ?”. I ask myself these questions usually because my mind’s wandered off again, just out of reach, and I need to call myself to attention, and focus. I ask these little questions of myself when I do that thing we all do – I’ve set off with great purpose into another room, and then completely forgotten why I went there, or what I came to find or get. I also use these forms of enquiry when I’m at The Crossroads of Purpose – to determine what exactly it is I’m deciding to aim for. What are my goals this day, week, month, age ? Can I espy my aims, somewhere on the horizon ? Can I paddle labouriously towards them – against the tide – dodge/defeat the sharks ? Can I muster the will to carry this out – “longhauling it” ?

I’ve spent a long time writing a book, which I’m sure to bore everybody about for the next aeon. My intention in writing the book was to stimulate debate about what I consider to be the best direction for balanced energy systems – a combination of renewable electricity and Renewable Gas. I wanted to foster debate amongst the academics and engineers who may be my peers, certainly, hopefully providing a little seed for further research. Hopefully also having a small influence on energy policy, perhaps, or at least, getting myself and my ideas asked to various policy meetings for a little airing. But, if I could in some way, I also wanted to offer a bit of fizz to the internal conversations of companies in the energy sector. You see, it may be obvious, or it may not be, but action on climate change, which principally involves the reduction in the mining, drilling and burning of fossil fuels, principally also involves the co-operation of the fossil fuel extraction companies. Their products are nearly history, and so it must be that inside the headquarters of every transnational energy giant, corporate heads are churning through their options with a very large what-if spoon.

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A Partial Meeting of Engineering Minds

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.

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DECC Dungeons and Dragnets

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.

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Nuclear Power Is Not An Energy Policy

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.

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

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 : http://www.joabbess.com/2015/06/01/shells-public-relations-offensive/). 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

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

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.