Guardian: “The UK’s fracking pioneer Cuadrilla was prevented by the Environment Agency from using a hazardous chemical at its drilling site in Sussex, local residents have been told. But permission was granted for another chemical despite concerns over its safety.” Banned: antimony trioxide. Allowed: oxirane. Known as an oxygen scavenger, it is used to prevent corrosion.
Guardian: “Senior bankers will face up to seven years in jail if they are found to have committed a new offence of reckless misconduct being proposed by the government as part of a series of measures to clean up the City in the wake of the 2008 banking crisis.” Read more
FT: “Ineos, a privately owned chemicals group, has asked for an infrastructure loan guarantee from the UK government to convert its Grangemouth plant in Scotland to run on cheap US shale gas.” Read more
Jeremy Leggett describes in Green Futures how systemic risks to energy and finance also come with opportunities.
The scene: Slough, UK, September 2010.
An opening ceremony with a difference. Solar roof tiles, glistening on the roofs of eight homes as though rained on under a grey autumn sky, can provide all the electricity the homes use, with plenty left over to power the battery car that the families living in the community share. Four technologies are each capable of heating the whole of the airtight, triple-glazed, development: air-sourced heat pumps, ground sourced heat pumps, a biomass boiler, and solar thermal panels.
SSE, the British utility, and investor in Solarcentury, has built this development for some of its workforce, as a showcase for what could be done. Half Britain’s carbon emissions come from buildings. Half those come from residential buildings. These homes use no coal, no gas, no oil, no nuclear. They go beyond Zero Carbon.
Ian Marchant, SSE CEO, gives a speech.
This is a stunning glimpse into the future, he says. These homes took just 8 months from beginning building to occupancy.
Chris Huhne, Secretary of State for Energy and Climate Change, follows him.
Low-carbon energy is going to be a massive industry, he says. Congratulations to all.
Back to London, I have a meeting at GE with Mark Elborne, their UK CEO. We have another demonstration project to talk about: solar schools, a flagship within GE’s sustainable cities programme. We are destined to hit the front page of GE’s website: a £50 million minnow partnered with a £100 billion giant.
I recount my morning with SSE to Elborne with a pride I can’t disguise.
Just wait until we marry this kind of technology up in a few years time with the storage technologies we are working on, he says. Then we’ll see some changes in energy markets.
This is a good day at work.
Back home in Holland Park, I am dragged back to earth. A meeting of my flat-dweller neighbours convenes. We have all been thrown in purgatory in past months as the owner of the mansion next door builds an underground cinema in his back garden. Platoons of Polish builders troop in and out of the mansion. Our flats shake all day in the incessant jackhammer hell they create. The owner of the mansion has moved out for the duration. We his neighbours can’t.
He is an investment banker. He is spending his bonus, or part of it.
The passage you just read is an extract from my book, The Energy of Nations: Risk Blindness and the Road to Renaissance, in which I set out my best-guess scenario for how systemic risks in our global energy and finance systems will play out in the years ahead, and analyse the implications. Amid the mega-risks there are also opportunities for society. As the story unfolds, a potential good-news future scenario emerges, which I think of as a ‘renaissance’.
Since the dot.com crash, I have developed an ex-academic’s passion for studying the patterns of play in energy markets, and in the financial markets where they pertain to energy. I have logged and analysed these patterns in a 2005 book, Half Gone and, since 2006, on my website [www.jeremyleggett.net]. Today I observe four global systemic risks directly connected to energy that threaten capital markets and hence the global economy. They involve oil depletion, carbon emissions, carbon assets, and shale gas. A market shock involving any one of these would be capable of triggering a tsunami of economic and social problems, and there is no law of economics that says only one can hit at one time.
There are other systemic risks in the energy sector, of course. Persistence with and proliferation of nuclear power risks spawning nuclear devices with which terrorists could take out cities, or weapons that could make nuclear war between nations more likely. The growing use of water in most forms of energy production could accelerate an already grave global water crisis. And so on. But in my book I concentrate on the four systemic risks that I have most direct vocational experience of.
I also write about a fifth risk. Ongoing systemic risk in the financial sector may at first glance seem to have nothing to do with energy. But I share a common view, fashioned with the benefit of hindsight as are the views of so many interested in the 2007 credit crunch and the 2008 financial crash, that they were indirectly connected to energy. Peak panic about the toxicity of mortgage-backed securities followed shortly after the highest ever oil price in history: $147 per barrel in July 2008. Could the high price of gasoline have had anything to do with all those owners of shiny new homes in American suburbs defaulting on their sub-prime mortgages? How could it not.
How best to describe the risks, and analyse the dangers? I have chosen to do this in the course of a historical account, rooted in my own experiences. I hope a chronological narrative approach will interest the reader more than a conventional format, while giving me the opportunity to recount how my own thinking has evolved over the years in the stoking of the serial crisis that faces society today.
Larry Elliot in the Guardian: “There will be those who say that this (recovery) is all an illusion – they are both wrong and right. Wrong, because it is clear from the data that the pickup is for real. Right, because growth is only meaningful if real living standards are rising, which requires wages and salaries to be going up more rapidly than prices.” Read more
Guardian: “Life bans on rogue traders and large company fines as Financial Conduct Authority and Ofgem launch investigations. The European parliament is expected this week to vote through tough new legislation that would allow Brussels – and London – to crack down much harder on rogue traders in financial and energy markets.” Read more
Observer: “Campaigners have warned that Britain is hurtling towards a new economic crisis, and call for a £50bn “Green New Deal” to create more sustainable growth and better-paid jobs and equip the country for a low-carbon future. ….Five years on from their first demands for a radical reworking of Britain’s business model, the Green New Deal group, which includes Green party MP Caroline Lucas, economist Ann Pettifor and tax expert Richard Murphy, says the need for an alternative approach is greater than ever.” Read more
SolarPowerPortal: “The latest results of DECC’s public attitudes tracker show that solar continues to be the most popular generation technology in the UK, with 81% of those surveyed expressing support for the deployment of solar across the UK. In each of the six waves of research carried out by DECC, solar has come out as the most supported renewable technology.” Read more
FT: “The state-owned Chinese nuclear group that is in talks to invest in Britain’s new nuclear programme wants greater operational control of any new plants it finances, potentially creating a national security headache for the government. China General Nuclear Power Group (CGN), is in talks with EDF of France on sharing the cost of building a new plant at Hinkley Point, Somerset, which has an estimated price tag of £14bn.”
FT: “First it was windmills, then it was fracking. Now solar farms are provoking outrage around the country as companies rush to install record numbers before an important subsidy is cut next year.” ” Read more
Solar Power Portal: “The British public would prefer to have a solar farm located near them rather than a fracking well, according to a YouGov poll commissioned by the Solar Trade Association. The poll reveals that the British public are seven times more likely to welcome a local solar farm than a gas fracking field.” Read more
FT: Production fell by nearly a third between 2010 and 2012 to 1.55m boe/d and it is now expected to fall further to between 1.2m and 1.4m boe/d this year. Malcolm Webb, chief executive of UK Oil and Gas says the steepness of the decline was far greater than that expected of a maturing oil and gas basin. Read more
Guardian: “Hundreds of activists blockaded the Balcombe oil drilling site in Sussex owned by the fracking company Cuadrilla, as well as its Lichfield headquarters and the offices of its PR firm in London.” Read more
Guardian: “Thousands of people marched through the Sussex countryside on Sunday in the biggest show of strength to date for the UK’s anti-fracking movement, the start of a three-day campaign against exploratory drilling near the village of Balcombe in west Sussex.”
Guardian: Caudrilla suspends operations at Balcombe during protests.
FT: Philip Fletcher, chair of the Church’s group on mission and public affairs, compares condemnation of fracking to the mistaken belief that the combined measles, mumps and rubella (MMR) vaccine was not safe. Read more
Guardian: “This is no ordinary closure. Tilbury claimed latterly to be the biggest biomass plant in the world, providing 10% of Britain’s renewable power, and was a pioneer in the field of low-carbon generation.” Read more
Guardian: “Households in England and Wales cut their energy use by a quarter between 2005 and 2011 as prices soared, government figures show. The sharp fall was probably caused by a mix of efficiency measures and environmental awareness, as well as steep price rises, the Office for National Statistics (ONS) said.” Read more