Gas prices in Britain could halve after 2030 because of the global shale gas revolution, according to a report by Navigant that is at odds with the latest government forecasts. Analysts said that the findings further undermine the Government’s economic justification for building expensive wind farms and nuclear reactors, which is based on an assumption that fossil fuel prices will keep rising so consumers will eventually save money. –Tim Webb, The Times, 18 July 2013
The Government appeared to scale back its offshore wind programme, which spooked the industry. Maf Smith, deputy chief executive of RenewableUK, an energy trade association, warned: “The Government risks undermining confidence by scaling back on its ambitions. The scenarios set out today show that Government is still in mixed minds about the role of renewables.” –Tim Webb, The Times, 18 July 2013
The U.K.’s shale gas, an untapped resource that has polarized politicians and environmentalists, will help refiners and chemical makers be competitive by cutting costs and curbing imports from rivals, Ineos Group AG said. Britain’s shale will be “of massive importance as a protection against low-cost petrochemicals from abroad,” Tom Crotty, director of the producer that has plants in Scotland and France, said by telephone. –Nidaa Bakhsh, Bloomberg, 18 July 2013
Thousands of dirty diesel generators are being secretly prepared all over Britain to provide emergency back-up to prevent the National Grid collapsing when wind power fails. And under the hugely costly scheme, the National Grid is set to pay up to 12 times the normal wholesale market rate for the electricity they generate. –James Delingpole, Mail on Sunday, 14 July 2013
Going green could see power bills go through the stratosphere – and many families go into the red. Yesterday energy giant npower said the Government’s environmental policies would help to cause a 19 per cent rise in fuel costs by 2020. Price comparison service energyhelpline think npower’s prediction is way too OPTIMISTIC — and say the average annual bill could soar to £2,000 by 2020, pushing many homes into fuel poverty. –Simon English, The Sun, 17 July 2013
The government has published revised planning guidelines for shale gas development which Fallon told Politics.co.uk would make the process more straightforward. Shale gas firms will pay out up to £10 million per site, totalling an estimated £1.1 billion of community benefit. An extra £100,000 will be paid out for sites where hydraulic fracturing – the controversial process known as ‘fracking’ – takes place. –Alex Stevenson, Politics.co.uk, 27 June 2013
‘We seem to be losing the communications battle,’ the Met Office’s chief scientist complained six months ago. With global warming, science morphs seamlessly into political campaigning. There is the obsession with secret funding sources and with the ideological motivations of non-adherents, things the philosopher Karl Popper identified as telltale signs of a pseudoscience. Amidst all the agitprop, there is a nugget of science: no 15-year period of global temperature yields a statistically significant trend. But then, to its embarrassment, neither could the Met Office demonstrate a statistically significant trend in global temperature for the last 130 years. –Rupert Darwall, The Huffington Post, 17 July 2013
A combined-cycle gas turbine (CCGT) in Slovakia owned by E.ON, the world’s largest investor-owned electric utility service provider, will close in the fall of 2013. E.ON says that the reasons for closure are the low electricity and carbon prices. What’s more, according to the company, the unmanaged, heavily subsidized growth of renewables and the resulting collapse of the EU emissions trading scheme are rendering in particular gas-fired power plants in Europe—which have already been hit by the recession-driven decline in power demand—largely uneconomic to operate. –The Daily Fusion, 16 July 2013
Tim Webb
Gas prices in Britain could halve after 2030 because of the global shale gas revolution, according to a report that is at odds with the latest government forecasts.
Surging shale gas production in the United States and China and lower oil prices mean that gas prices will fall from nearly 70p a therm today to 60p by the end of the decade and then rise gently, according to a report by Navigant.
The consultancy was commissioned by the Department of Energy and Climate Change (DECC) to study the impact that booming global unconventional gas production will have on UK prices over the next 20 years.
Its findings contrast with DECC forecasts, also published yesterday, in which prices will rise to 73½p over the same period. Under Navigant’s best-case scenario, in which Britain and other parts of Europe become leading shale gas producers after 2020, gas prices would fall to 50p by 2030 and to 35p soon thereafter.
Analysts said that the findings further undermine the Government’s economic justification for building expensive wind farms and nuclear reactors, which is based on an assumption that fossil fuel prices will keep rising so consumers will eventually save money.
DECC’s publication of the forecasts coincided with additional details on how it plans to subsidise a new wave of low-carbon forms of electricity generation to meet ambitious environmental targets and keep the lights on.
Ministers have argued that despite the high upfront cost of building nuclear reactors and wind farms, they will work out cheaper in the long run compared with gas because they believe that prices will rise.
But if Navigant is correct and prices fall, consumers will not fully benefit through cheaper energy bills because under the Government’s plans gas plants will mainly be used as back-up for wind farms when the wind does not blow.
Peter Atherton, a Liberum Capital analyst, said that the Government had failed to take into account properly the impact of the shale oil and gas phenomena of the past few years.
“The Government’s economic case for decarbonising has not changed,” he said. “It’s based on the premise that fossil fuels are becoming increasingly scarce and will push up prices. This argument now looks perilously weak.
“The chance of it not being the case has maybe gone up from 20 per cent to 50 or 60 per cent because of the impact of shale oil and gas. But despite this development, the policy has not changed one iota.”
A DECC spokesman stuck by the Government’s official forecasts, pointing out that its scenario for gas prices is as low as 42.2p by the next decade. “Forecasting gas prices is extremely challenging,” he said. “Most analysts say that gas prices will remain firm over the long term.”
The Government also appeared to scale back its offshore wind programme, which spooked the industry. Last month officials forecast that Britain’s capacity of 3.3 gigawatts could increase to between 12GW and 16GW by the end of the decade. But under one scenario published yesterday, only 9GW would be in operation by the end of 2030.
Even under a central scenario, only 18GW would be installed by then, suggesting that the Government believes the construction of new offshore wind farms will slow markedly in the next decade.
Maf Smith, deputy chief executive of RenewableUK, an energy trade association, warned: “The Government risks undermining confidence by scaling back on its ambitions. The scenarios set out today show that Government is still in mixed minds about the role of renewables.”
Nidaa Bakhsh
The U.K.’s shale gas, an untapped resource that has polarized politicians and environmentalists, will help refiners and chemical makers be competitive by cutting costs and curbing imports from rivals, Ineos Group AG said.
Britain’s shale will be “of massive importance as a protection against low-cost petrochemicals from abroad,” Tom Crotty, director of the producer that has plants in Scotland and France, said by telephone.
Chemical makers may benefit from cheaper gas should shale be exploited in Britain, which has seen North Sea supply wane as fields age. The government is keen to tap reserves in northwest England in a bid to replicate the surge in U.S. output that cut energy costs and boosted the economy. Environmental groups and residents have said the drilling may contaminate ground water.
Ineos needs gas as feedstock for chemicals production and as a fuel to operate its sites. The company is “talking to lots of people” about potential supplies from U.K. shale fields, Crotty said yesterday, without elaborating.
Britain’s nascent shale industry is also attracting interest from refiners. Essar Energy Plc (ESSR), a unit of Mumbai-based Essar Group, is in “preliminary talks” with potential shale gas suppliers, Andrew Turpin, a London-based spokesman, said by phone, declining to identify any. Essar uses gas to generate steam for boilers at its Stanlow refinery in northwest England.
Estimates Raised
The government said in June that shale-gas fields in northern England are twice as large as previously estimated, and may hold as much as 1,300 trillion cubic feet. A recovery rate of 10 percent — similar to fields in the U.S — would give the U.K. enough gas to meet demand for about 47 years.
Explorers Cuadrilla Resources Ltd., IGas Energy Plc (IGAS) and Dart Energy Ltd. (DTE) have licenses in British shale areas. Centrica Plc (CNA), the largest energy supplier to U.K. households, agreed in June to buy a 25 percent stake in Cuadrilla’s permits in northern England, becoming the biggest company to enter the country’s shale industry.
The government plans to give tax breaks to stimulate exploration and production from shale, which involves blasting a mixture of water, sand and chemicals below ground to fracture rock and release the fuel, a process made possible by advances in drilling technology.
“We’ve got a favorable investment climate here,” said Menno Koch, an executive at Lambert Energy Advisory Ltd. in London. “If it works at a technical level, we could have commercial production in five to 10 years.”
3) Britain’s Dirty Energy Secret: Subsidised Diesel Generators To Prevent Blackouts
Mail on Sunday, 14 July 2013
James Delingpole
Thousands of dirty diesel generators are being secretly prepared all over Britain to provide emergency back-up to prevent the National Grid collapsing when wind power fails.
And under the hugely costly scheme, the National Grid is set to pay up to 12 times the normal wholesale market rate for the electricity they generate.
One of the main beneficiaries of the stopgap plan is the Government itself, which stands to make hundreds of millions of pounds by leasing out the capacity of the generators in public-sector property including NHS hospitals, prisons, military bases, police and fire headquarters, schools and council offices.
But the losers will be consumers who can expect yet further hikes in their electricity bills in the name of ‘combating climate change’.
This scheme is a direct consequence of the renewable energy policy adopted by the Coalition but first developed by Tony Blair in response to EU renewables directives to reduce Britain’s carbon emissions by 20 per cent by 2020.
As more and more wind turbines are built to replace fossil fuels, so the National Grid will become increasingly unstable because wind power is intermittent, unpredictable and unreliable.
Wind now constitutes about ten per cent of Britain’s energy mix. Under current Government targets, the plan is to increase this to 25 per cent by 2020.
However, some experts, such as economist Professor Gordon Hughes in a report for the Global Warming Policy Foundation, warn that such a high proportion of renewables is unsustainable, because of the dramatic ebbs and flows of power being supplied in the grid.
Last year, Professor Hughes estimated the cost of creating this wind capacity by 2020 to be £124 billion. To produce the same amount of energy from gas would cost just £13 billion.
The National Grid’s eye-wateringly expensive solution to counter the instability of wind power is known as the Short Term Operational Reserve, or STOR, to generate a reserve capacity of eight gigawatts (GW) by 2020, the equivalent of about five nuclear plants.
The diesel-generators will provide immediate computer-controlled back-up for that significant period when the wind turbines are not working, but at a hefty premium.
Currently the wholesale price for electricity is around £50 per megawatt hour (MWh) but diesel-generator owners will be paid £600 per MWh.
At 12 times above the market rate, this represents a bigger cash bonanza even than that currently enjoyed by wind developers, who receive a subsidised price of between two and three times the market rate, depending on whether their turbines are on land or offshore.
Although STOR was devised in April 2007 and modified in December 2010, it has not been widely advertised by the Coalition. Besides making energy considerably more expensive, it would appear to make a mockery of David Cameron’s promise to lead the ‘greenest government ever’.
Any benefits of the supposedly ‘clean’ energy produced by wind turbines are likely to be more than offset by the dirty and inefficient energy produced by their essential diesel back-up.
‘Yes it may stop the lights going out, but as a way of producing energy it’s a complete nonsense,’ said Dr Benny Peiser of the Global Warming Policy Foundation.
‘Burning diesel is nearly as dirty and CO2-intensive as burning coal. But worse than that, it is so unnecessarily costly and inefficient.’
Not everyone is complaining, though, as canny businessmen have spotted a lucrative opportunity in the Government policy.
4) The Sun: Our Rising Bills For Going Green
The Sun, 17 July 2013
Simon English
GOING green could see power bills go through the stratosphere – and many families go into the red.
Yesterday energy giant npower said the Government’s environmental policies would help to cause a 19 per cent rise in fuel costs by 2020.
They added that energy firms’ subsidies of wind and solar power and the price of better energy efficiency will see annual bills rise £240 to £1,487 from £1,247.
Support for low-carbon technologies alone would add £82 to the average energy bill by 2020, say npower, up from £34 in 2013.
Power costs
Rising cost … how power is likely to be burning up your pounds by 2020
Greg Barker, minister for energy and climate change, countered: “Global gas prices, not green policies, have been primarily pushing up energy bills. That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.”
Price comparison service energyhelpline think npower’s prediction is way too OPTIMISTIC — and say the average annual bill could soar to £2,000 by 2020, pushing many homes into fuel poverty.
Director Mark Todd said: “Our fear is that this is the prelude to yet another storm — and when the storm comes, it will be much worse than the Government or npower forecast.”
5) EU Renewable Energy Subsidies Make Natural Gas Plants Uneconomic
The Daily Fusion, 16 July 2013
A combined-cycle gas turbine (CCGT) in Slovakia owned by E.ON, the world’s largest investor-owned electric utility service provider, will close in the fall of 2013. E.ON says that the reasons for closure are the low electricity and carbon prices. What’s more, according to the company, the unmanaged, heavily subsidized growth of renewables and the resulting collapse of the EU emissions trading scheme are rendering in particular gas-fired power plants in Europe—which have already been hit by the recession-driven decline in power demand—largely uneconomic to operate.
The Renewable Energy Road Map sets the target of producing 20% of total EU energy consumption from renewable energy sources by 2020, as well as measures for promoting renewable energy sources in the electricity, biofuels and heating and cooling sectors. While during the first three months of 2013 green energy investment in the EU declined by 22 percent, some $40.6 billion was invested in the industry during this period.
As announced at the beginning of this year, E.ON is restructuring its conventional generation fleet in ways that will swiftly improve the fleet’s competitiveness. Alongside further cost reductions and efficiency improvements, E.ON is studying whether to close a number of its power plants in Europe and will take decisive action in cases where closing proves necessary.
6) Rupert Darwall: Global Warming – From Science to Agitprop
The Huffington Post, 17 July 2013
‘We seem to be losing the communications battle,’ the Met Office’s chief scientist complained six months ago.
With global warming, science morphs seamlessly into political campaigning, Bob Ward’s article, ‘The Corruption of the Public Debate on Climate Change,’ being a fairly typical example of the genre.
There is the obsession with secret funding sources and with the ideological motivations of non-adherents, things the philosopher Karl Popper identified as telltale signs of a pseudoscience.
Amidst all the agitprop, there is a nugget of science: no 15-year period of global temperature yields a statistically significant trend. But then, to its embarrassment, neither could the Met Office demonstrate a statistically significant trend in global temperature for the last 130 years.
That doesn’t mean observed temperatures did not rise – they did – or that global warming, whether man-made or not, did not happen. Rather it illustrates the sheer difficulty in demonstrating whether the rise is outside a range of random natural variation and of moving from the physics of the test tube to the immense complexity of the atmosphere.
Bert Bolin, the first chairman of the IPCC, acknowledged that global warming was not something ‘which you can prove.’ In one of his last lectures, the late Stephen Schneider – one of the most intellectually able of all climate scientists – asked his students whether the science of anthropogenic climate change was settled. Dumb question, he answered. ‘Climate science is not like test tube science,’ Schneider said. ‘You don’t falsify.’
Although codified by Popper in the 1920s, falsifiability was the standard set in the Scientific Revolution and used with devastating effect by Lavoisier in his demolition of the phlogiston theory of combustion. Instead of seeking evidence that would falsify, climate science follows a much older injunction, one from the Beatitudes: ‘Seek and ye shall find.’
As Popper argued, evidence can be found for virtually any proposition, so when global temperatures don’t rise as anticipated, evidence is sought in ocean temperatures, sea ice extent and glacier retreat.
The absence of a falsifiability test renders the science of global warming inherently weak. Instead acceptance of the central proposition of global warming – that the earth’s atmosphere is rapidly warming thanks to man’s activities – marks a reversion to pre-scientific standards, principally its reliance on consensus, peer review and appeals to authority.
Computer simulations of future temperature rises cannot be verified. In the words of the mid-20th century Nobel physicist PW Bridgman, to correctly predict only has a past tense.
The provisional findings of climate science cannot explain how global warming, which was little more than a scientific curiosity for much of the 20th century, became a political phenomenon that defines our age. Indeed, the first two scientists to have quantified the effect of the Industrial Revolution on global temperatures, Svante Arrhenius and Guy Stewart Callendar, both thought global warming would be beneficial.
The explanation for global warming’s potency is the rise of environmentalism, following publication of Rachel Carson’s Silent Spring, arguably the single most important book since the Second World War. Environmentalists believe that in destroying fragile ecosystems, humans are imperilling their own survival.
Whilst scientists in the early 1970s signed manifestos predicting the imminent collapse of industrial civilization, the first environmental wave quickly collapsed in the economic stagnation of the 1970s. With the return of economic growth in the 1980s, global warming became environmentalism’s killer app.
In 1957, the American scientists Roger Revelle and Hans Suess pointed out that mankind was carrying out a large-scale geophysical experiment. Prejudging the results of a scientific experiment is bad science, yet this one simultaneously generates powerful calls to halt the experiment before it is concluded by invoking the precautionary principle.
‘What is called objectivity consists solely of the critical approach,’ Popper wrote. But questioning climate science science undermines collective action to save the planet, so critics and sceptics must be marginalised and delegitmised. No one knows the outcome of the geophysical experiment. But the results of the politico-scientific experiment are now in, and include the demotion of the scientific standards established by the Scientific Revolution.
Rupert Darwall is the author of The Age of Global Warming (2013) published by Quartet Books
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