Jeremy Leggett's Triple Crunch Log

Comment on HMG’s decision to take their illegal FiT plan to the Supreme Court.

Jeremy Leggett: “We have been expecting this but we hoped that Ed Davey would see sense and not take the appeal. If we are lucky this is just a cynical exercise to limit the market to 3rd March and they will withdraw in a few weeks. If not, and they really are serious about a Supreme Court appeal, then the implications for the renewables industry are deeply worrying. Two weeks ago, Ministers reassured the industry that they wanted to see 4 million solar homes in the UK by 2020. This appeal completely undermines that claim. They need to stop rewriting the scheme, end the constant stop-start and provide long-term stability and meaningful returns for investors and customers and give certainty to the 30,000+ employees of this successful industry – one of the few that is actively creating jobs in this country. If the appeal is successful it will allow Government to change feed-in tariffs whenever it chooses, even for projects that are already installed and supposedly guaranteed the feed-in tariff. At a stroke, this would undermine investment in all UK renewables, not just PV, and show investors that the UK government simply cannot be trusted. Fortunately their arguments are weak. They are the same ones unanimously rejected by the Court of Appeal so I wouldn’t give them much chance of success. Sadly, this appeal has the whiff of farce about it. First they try to woo private capital into infrastructure; then they mismanage it; now they go to the Supreme Court to argue for sovereign default to cover their tracks. I just hope the new Secretary of State actually understands what his lawyers are doing.”

“Prepare for a golden age of gas”: Martin Wolf.

In the FT. The title doesn’t match the content. “This revolution could prove to be a Faustian bargain. Care needs to be taken over how – and how swiftly – the technology is introduced: environmental costs might prove heavy.”

“No peak oil – why then is Saudi opening old wells for heavy crude?”

OilPrice.com: The Damman field, shut down 30 years ago, is one such. It is now in a metropolitan area.

Citigroup says shale oil means peak oil is dead.

WSJ: “After decades of decline, ‘U.S. oil production is now on the rise, entirely because of shale oil production,’ said Citigroup. Shale oil could add almost 3.5 million barrels a day to US oil production between 2010 and 2022 and has already slashed 1 million barrels a day from U.S. oil imports. One day it may allow the U.S. and Canada to be self-sufficient in oil, it said.”

Outlook for global oil supply grim even before latest Iran threats.

FT: “Risks to output, once confined to the Middle East, are now spreading to Africa. Inventories are low. And the ability of Saudi Arabia to make up for any shortfall is being called into question. “Not since the late 1970s-early 1980s has there been such a serious threat to oil supply,” a report by Deutsche Bank said.

The underpinnings of climate scepticism: extract from “The Carbon War”.

In 1993 I addressed the annual US-Europe coal conference with Harlan Watson, who later headed the USA’s climate negotiation team. This is the man, and the constituency, I saw that day.
Extract from The Carbon War (Penguin 2000) p 127……Watson reached his recommendations. “What should you do, you might ask? Let me make several suggestions. First, and foremost, you must put aside your differences and get properly organised to address the issue. You need to speak with one voice. Second, you must get timely, credible and relevant information to the political decision makers, to the media, and to the public at large. Third, you need to follow closely the activities of both the INC and the IPCC, and, to the extent possible, actively participate as NGOs through trade associations.” Then, finally, to the bottom line. “Do not underestimate what you are up against. In the US, it is the combined forces of the environment community and Vice President Gore and his powerful allies in the Administration. In the past, business interests throughout the world could rely on the United States to maintain sanity in the international environmental arena – this was certainly true during the Climate Change Convention process. Well, my friends, that is not the case today, and it is time to pull up your socks, roll up your sleeves, and get to work.”
Watson finished, relishing the applause.
Constance Holmes (a coal lobbyist) fixed me with her hard stare. It seemed to be my turn. The subsequent scene was best described by the Energy Daily, an industry journal, a week later. “Global warming had an apparent cooling effect at the sixth US-European coal conference last week, as industry representatives emptied out of the conference room before an address on the issue by an internationally known environmental representative. As Greenpeace’s Jeremy Leggett took the stage, attendees left in droves, leaving perhaps 30 coal industry representatives to listen to their opposition.”
After the session was over, they took me off to another room, and a press conference for the benefit of the half-a-dozen journalists covering the conference. Most of them worked for coal industry journals. Constance Holmes again took the chair, and launched straight into the question that she evidently thought would most effectively skewer me. How could the West provide the technologies necessary to reduce carbon dioxide emissions in the Third World if revenues were being drained by carbon taxes?
Just watch and see how revenues will be drained if global warming takes off as the IPCC predicts, I said. And anyhow, who said carbon taxes would have a negative economic impact? The carbon-fuel industries, mostly. Many studies suggested exactly the reverse, and the tax could even be made fiscally neutral.
Harlan Watson at that point volunteered to give the trade press his view of what was motivating environmentalists in their advocacy of carbon taxes, and indeed any measures to limit greenhouse-gas emissions. The problem, he said, was that after the collapse of communism, and the exposure of command economies as recipes only for disaster, the old left had been found themselves with nowhere to go. They had elected in large numbers to switch to the environmentalists’ bandwagon.
Fighting hard to keep the flame away from the blue touch paper now, I tried to paint a picture of a representative group of my colleagues for the journalists, and show just how many million miles Watson was away from the truth. Consider the head of Greenpeace’s delegation at the climate talks, I invited them, the senior diplomat who would by now doubtless have been an Ambassador; the concerned lawyers working on a fraction of the salary they could have made in industry; the intelligent young graduates who applied in hundreds for every grinding administrative assistant’s job.
After we finished answering questions, I turned to Watson immediately. I had managed to put the flame out by now. “You were in danger of getting a bit near to your philosophical underpinnings there, Harlan,” I laughed. “Did I understand you correctly? Do you seriously think that we are all old communists?”
His shiny face was twitching as he tried to hold my gaze. “I think there are many who have that agenda,” he said in a constricted voice.

Libertarian thinktank bankrolls climate sceptics with millions from carbon industries.

DeSmogBlog receives confidential documents from an “insider” at the Heartland Institute, based in Chicago. Guardian: “The Heartland Institute, founded in 1984, has built a reputation over the years for providing a forum for climate change deniers. But it is especially known for hosting a series of lavish conferences of climate science doubters at expensive hotels at New York’s Time Square as well as in Washington DC. …The papers indicate that discrediting established climate science remains a core mission of the organisation, which has received support from a network of wealthy individuals – including the Koch oil billionaires as well as corporations such as Microsoft and RJR Tobacco. ….The importance of one or two wealthy individuals to Heartland’s operations is underscored by a line in the fundraising document noting that a foundation connected to the oil billionaire Charles Koch had returned as a donor after a lengthy hiatus with a gift of $200,000 in 2011. “We expect to ramp up their level of support in 2012 and gain access to the network of philanthropists they work with,” the document said. ….The documents suggest several prominent voices in the campaign to deny established climate science are recipients of Heartland funding. They include…Fred Singer ($5,000 per month, plus expenses).

Eon threatens to stop offshore wind power investments in Germany.

Der Spiegel: “The company said it will put two large projects on hold unless the grid operators speed up the construction of power lines. … The German government plans to increase the share of green power to 35 percent of power consumption by 2020 from 20 percent at present. A decisive part of that increase is to come from offshore wind farms. …There has been growing criticism of delays in building wind farms in the North Sea and Baltic. In January, the German Transport Ministry provided figures which outline the scale of the task Germany faces. The plan is to have 10,000 wind turbines in operation off Germany’s coasts by 2030. It currently only has 27. The aim is for the windfarms to produce 25,000 megawatts of power — so far, it’s just 135 megawatts. Energy company RWE has also complained about delays in power line construction.”

Iberdrola backs subsidies freeze on Spanish renewables, and wants British nuclear

Spain’s biggest power utility by market value says it is a sensible move for a country that has been paying too much for electricity it does not need. “What we were doing was irrational,” says Ignacio Galán, chairman. “It makes no sense. Spain is installing the most expensive technologies in Europe instead of looking for those which are cheapest.” One analyst says they fear retrospective cuts in tariffs from government. Another says a nuclear windfall tax is what they should worry about. As for plans in Britain, Galan says: ”The area that has the most uncertainty is the area of nuclear. We still don’t know how it’s going to be properly paid – what the return will be. The decision to go ahead (in a consortium with GDF Suez) is not going to be taken until the moment the framework is clear and predictable enough, with enough remuneration for those investments.”

“End the Big 6 Energy Fix” public campaign launches.

Caroline Lucas speaking for 100 public figures: “First, we are calling on the Government to impose a similar levy to the one it has imposed on North Sea oil companies and the big banks. Over time, such a levy could raise billions, revenues that could be ring-fenced and used to ensure that every home is insulated and highly energy-efficient – starting with the homes of the fuel-poor. This would form part of a Green New Deal and would help to create thousands of new skilled jobs. Second, to prevent energy companies from passing the cost of any levy on to customers, we want the Government to give Ofgem the power to cap prices. This could be linked to the wholesale price to make energy prices fairer. Third, we want the Government to launch a public inquiry into the Big Six energy companies.”