The Government is coming under increasing pressure to scrap green charges that contributed to the closure of the Redcar plant. The Teesside site, which has produced steel for 160 years, will be mothballed with the loss of 1,700 jobs, its Thai owners SSI UK announced yesterday. Another 4,000 jobs are expected to be lost among contractors on the site and in the supply chain. Yesterday trade body UK Steel called on ministers to remove hefty green charges that steel plant owners are forced to pay on top of their electricity bills. –Peter Campbell, Daily Mail, 29 September 2015
The Global Warming Policy Forum is calling on the Government to scrap Britain’s unilateral Carbon Floor Price which is contributing to the crisis of UK steel and other energy intensive industries. The GWPF has been consistently warning about the rising policy cost of electricity prices which are expected to increase by 47% by 2020 for large industrial energy consumers. The UK’s extra large users of electricity are already paying nearly twice as much for power as the EU average. —Global Warming Policy Forum, 30 September 2015
The Governor of the Bank of England has entered the controversial world of climate change – telling the BBC that, if there is no action now, global warming could become one of the biggest risks to economic stability in the future. The Governor said that the vast majority of oil and gas reserves already discovered could now be “stranded” if new rules on carbon emissions are enforced by governments. The oil and gas would be unusable. – Kamal Ahmed, BBC News, 30 September 2015
The energy business is entirely familiar with the concept of stranded assets. Now, however, a new concept has been introduced: the idea that some assets, specifically hydrocarbons, will inevitably be stranded and left undeveloped as the world reduces its hydrocarbon consumption in order to avoid the risks of climate change. I believe [this assumption] is completely unrealistic. This is a fairly dismal conclusion but when it comes to something as potentially serious as climate change it is best to be absolutely realistic. Campaigns about disinvestment create convenient enemies but solve nothing. –Nick Butler, Financial Times, 28 September 2015
The Governor of the Bank of England, Mark Carney, has once again been trying to use his position to bully the insurance industry into supporting the green movement. His speech last night at Lloyds of London was fascinating – a blend of pseudoscience, green activism and big state interventionism the likes of which one rarely finds outside DECC and Defra. As far as I can see, Carney’s big idea was that more should be done “to develop consistent, comparable, reliable and clear disclosure around the carbon intensity of different assets”. This really comes across as quite otherworldly. As was noted in the FT a few days ago, the stranded assets argument is a myth. Moreover, the insurance industry does not price risk based on what [climate models] say the world is going to look like in a hundred years’ time. –Andrew Montford, Bishop Hill, 30 September 2015
The list of countries where fracking could unlock oil and gas reserves grew this year. The U.S. Energy Information Administration (EIA) released its newest “World Shale Resource Assessment” this year, adding Chad, Kazakhstan, Oman, and the United Arab Emirates to more than 40 countries with shale reserves. This year’s survey found the world had 7,576 trillion cubic feet (TCF) of ‘unproved technically recoverable’ shale gas reserves. This number has grown since the first survey, in 2011, which estimated 6,622 TCF of the resource. —State Impact Pennsylvania, 25 September 2015
In 1980, the economist Julian Simon challenged doom-mongering biologist Paul Ehrlich to a bet that the prices of any five metals would be lower in 10 years’ time. He won, and made his point: over the long run, technological progress means commodity prices are likely to fall in real terms. From the early 2000s, many investors forgot that lesson. Falling commodity prices are a cheering reminder that, in a phrase Simon used as the title of his 1981 book, human inspiration is “the ultimate resource”. –Editorial, Financial Times, 31 August 2015
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