Energy & Environment 2015 Article 665 770

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FUEL FOR THOUGHT 26/4

6 MARCH TO 5 MAY
(All dates refer to 2015 unless stated otherwise)
FACTS AND EVENTS
ENERGY AND CARBON FINANCE
CLIMATE SCIENCE AND SCIENCE POLITICS
ENERGY POLICY AND CLIMATE POLITICS
CARBON FUELS AND NUCLEAR
GREEN TECHNOLOGY AND FUELS
CARBONPHOBIA: BENEFICIARIES AND ENEMIES
NUCLEAR DEVELOPMENTS
EPILOGUE
FACTS AND EVENTS
Context
Netanyahu wants a war against Iran but [the author] thinks an imperfect
compromise would be better than a futile war. He wants Iran to cease all
nuclear activities, which would man war He won warm applause from his
Republican friends. Obama now ants only one year warning before the building
of a bomb. Israel should have asked to become a partner to these talks. (Philip
Stephens FT 6 March)
The world faces a growing threat of nuclear conflict. Netanyahu is wrong; the
deal with Iran is the best on offer. Russia has started to boast with his nuclear
arsenal, after new START negotiations and get back to weapons reduction
negotiations, have been abandoned. One third of Russias military budget goes
to bolstering its nuclear prowess. At global level, the NT has attracted little or
no support from weapons states. (The Economist 7 March)
The dismantling of the Ottoman Empire created the festering sore that is todays
Middle East. (Rogan book review, Economist 7 March)
The view now is that trade and globalisation have increased inequality in the US.
(L. Summers FT 9 March)
Joseph Nye believes that US world dominance will continue because the EU is
too fractured, Japan too old, Russia too corrupt, India too poor, Brazil too
unproductive and Chinawill keep growing but faces many internal
challenges and is not open towards immigrants. (Time 23March)
Is the USA getting ready for global war? According to the Marshall Institute:
Iran views the U.S. and Israel as its principal enemies and over the past three
decades Iran has very intentionally created a network of terrorist surrogates able
to target U.S. interests and Israel. The terror or militant groups it supports are
HAMAS, Lebanese Hezbollah, the Palestinian Islamic Jihad, the Taliban, and
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Energy & Environment Vol. 26, No. 4, 2015
Iraqi Shia groups. (24 March)

Jerusalem has become a place of hostility, especially between Muslims and
Jews, (The Battle for Jerusalem, Time April 6)
Rulers once sent in the cavalry when they wanted to redraw the map. Now the
main battleground is economicCompeting trade regimes are becoming as
important as military alliances The grammar of commerce but the logic of
warMultilateral institutions are becoming a battleground for geopolitical
competition. (Mark Leonard, FT 24 March)
Are we facing a clash between geo-economics and geopolitics? Can a globally
integrated economic and financial union survive rising competition between
great powers?....On present trends, the answer is probably not. ( P. Stephens, FT
27 March)
USA and China are heading for a frosty peace Things are going to be
tough. (Martin Wolf FT 1 May)
In April oil price experienced its strongest monthly gain since 2009 leading
many to hope that the worst of the oil rout was over. (FT 2/3 May)
For 200 years or so, first Europe and then the US achieved a kind of world
dominance that is now slipping into history. [This] should inspire not fear but
curiosity. ( M Mazower, FT 14 April)
The World Bank predicted that that India will overtake Chinas economic
growth rate in 2017. (FT 7 March)
The question is not beating ISIS. Its what comes afterwards. More than ever,
that question needs an answer. (Time 9 March)
In 2015 four big UN conference to save the world: on disasters, on (Japan), on
sustainable development goals (MDGS) in New York Sept; in July Addis Ababa
raising money for development, selecting projects for funding; and lastly of
course, the funder (?) in Paris on tackling climate change. A climate treaty
with teeth is what western diplomats and the Economist seem to desire most
but targets are vague but even in climate bickering continues so though much
is being done already. Will more than words be produced? Diplomatic tourism
is certainly involved, funded by tax payers. (Economist 28 March)
Civil War in Middle East has started with Saudi military involvement in Yemen,
raising the temperature of a simmering cold war between Sunni Arab states and
Shia rival Iran. (FT 27 March)
Without abundant fuel and power, prosperity is impossible: workers cannot
amplify their productivity, doctors cannot preserve vaccines etc. Nearly 700
million Africans rely mainly on wood or dung, and 600 million have no
access to electric light. Britain with 60 million people has nearly as much
electricity-generating capacity as the whole of sub-Saharan Africa, minus South
Africa, with 800 million. (Matt Ridley blog 29 April) jjkarlock@gmail.com>
The 2016 US presidential election is now well under way but the Californians
(and Silicon Valley) are missing. This political passivity seems to relate to angry
Hispanics because the Republicans promoted anti-illegal immigration policies.
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The current Democrat is 76 years old. Clinton is unlikely to become a

Californian Perhaps Jeb Bush against Hilary Clinton? The new dynasties? (FT
7/8 March)
American officialsare diligently tightening the screws of economic sanction
imposed on Iran and anybody trying to trade with it. (Economist 7 March)
The fate of Obamas immigration overhaul now lies in the hands lawyers, will
be part of litigation that could go all the way to the Supreme Courts. A similar
fate awaits the Administrations new EPA mandates that are meant to curb
climate change. These lawsuits are both a symptom and a cause of partisan
gridlock in Washington. (Time, 9 March)
47% of US jobs are at high risk of becoming automated in the next 20 years. (R
Foroohar, Tim 16 March)
What might happen after such a deal [with Iran], traditional allies of USA are
worried, especially Saudi Arabia but also Turkey. Iran is already taking over
Iraq, with its power in Arab lands expanding. Obama seems to be aiming at a
self-regulating balance of power in the region once Iran is reintegrated. Only
Iran may have a clear and inexorable strategy. (D Gardner FT 16 March)
Obama is considering supplying Kiev with arms, supported by Poland, UK and
Lithuania, Germany remains opposed. (FT 20 March)
Hacking threats from abroad have been declared a national emergency by
Obama, with executive orders permitting sanctions on attackers. (FT 2/3 April)
In 2010 the Supreme Court allowed Super-political action committees to raise
unlimited amounts of presidential candidates, Mr. Bush wants to expand this
Right to Rise further to overcome any restriction on co-ordinating strategy with
the official team supporting candidates.. (FT 23 April)
The Clinton Foundation is received multimillion dollar donations from
connection with Canadian firm Uranium One later taken over by Russias Rosatom
giving the Russian control over a significance share of US uranium production and
other uranium interests, making Bill and Hilary rich. (FT 24 April)
Save in the dreams of diehard neoconservatives, the US lacks the resources and
political will for generational projects to transform the Middle East. (P. Stevens
FT 24 April)
Obama faces uphill struggle over his trade deal with East Asia, TPP, especially
with his own Party. Many Americans are worried about more jobs migrating to
Asia and the Republicans are divided over TPP. Negotiations have missed many
deadlines and a whiff of panic has entered. Why is China excluded?
(Economist 28 March and 25 April)
Democrats are divided over this emotional issue (TPP) opposed by the left and
lead by Elizabeth Warren. Should Obama be given fast track authority to go
ahead? (FT 27 April) This authority had still not materialise by early May with
few Democrats in Congress in favour. (FT 4 May)
The ECB president will launch the 1.1 bn programme next week hoping to see
the gradual recovery of the EU economy with a growth forecast of 1.5%
compared to the current 1%. (FT 6 March)
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Rejecting Russia as we are stupidly doing.is throwing Russia into the arms of
China. (Marie Le Pen, quoted in FT 6 March)
Juncker (EU presidents called for the creation of a EU army to counter Russia
and show we are serious about defending European values.; and a former EU
economic chief slammed his successors in the Commission for repeatedly
failing to punish France for flouting EU deficit limits. France needs reforms in
the labour market and business environments. (FT 9 March)
The weakness of the euro triggers talk of dollar parity, down to 1.10 from 1.40
in early 2014. (FT 10 March)
There was much relief in Ukraine when the IMF approved a bail-out for Ukraine
of $17.5 bn, no-more than a a sticking plaster and France was granted an extra
2 years from Brussels to get it budget deficit below 3%. But even Germany has
at times ignored the Eurozones macro-economic imbalance procedure.
(Economist 14 March)
There are signs that Europes economy is turning a corner, with a strong dollar
making one euro almost equal to the dollar QE may have averted a prolonged
period of dangerous low inflation and weak growth, just as hoped...or we just
dont know the impacts of QE until we collect evidence... it would be wise to
keep an open mind. (FT 23 March)
Unemployment in the Eurozone is expected to remain around 10% even after
QE of 1.1trillion. (Letter FT 27 March)
QE may be masking the pain of a potential Greek exit, but if one member leaves
it shakes the pillars of mutual commitment and economic partnership. Greeces
output is small, 2% of Eurozone GDP but could have systemic consequences.
Such an s massive impairments on loans. (E Moore and J Lewin, FT 30 March)
The EUs 28 governments find it hard, and sometimes undesirable, to operate
common foreign and security policy. [They] should avoid setting itself
unrealistic ambitions. (Tony Barber FT 31 March)
The most indebted countries is Europe in terms of euro-denominated debt are
Italy and France, followed by Germany. The UK has had a trade deficit for 30
years. A commission has called for a revolution in export culture. (FT 8 April)
Nordic states have stepped up their defence co-operation as a response to
Russian military threat in the Baltic Sea region. (FT 11/12 April)
Europe needs to worry about lacking a big digitals platforms. But reining in
Google is no solution, claims the Economist. (18 April)
The biggest threat to the future of the EU is not euro-related (but) would stem
from a collapse of the Europe needs the Deutsche Bank as its champion - the
others heavy weights are all American. (John Gapper FT 23 April)
EU states cannot agree on what to do with the growing number of refugees [or
migrants?] arriving by sea from Northern Africa. (FT 25 April)
Hopes rise for a revival of the eurozones economic fortunes with a rise in
business loans to credit starved businesseslending conditions are finally
beginning to loosen; but inflation is still well below the ECBs 2% target. And
the Greek issues continues to threaten growth. (FT 30 April)
Trends stared by the ECBs QE programme of euro 60bn a month asset
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purchasing sent share prices soaring and the euro tumbling. This reversed in
April with equities beginning to experiences losses and the euro raising by 4%.
Has Draghi lost his magic touch? (FT 4/5 May)
The EU will need mechanisms for the eurozone to deal with sovereign default,
the integration of banking and labour markets, and fiscal policy. Can Britain opt
out of all of this? ( W. Munchau, who thinks that Brexit happened in 1991, FT 4
May)
Ukraine warns its debtholder that it cannot pay the war-ravaged country
seeks to stave off default. Debts are of the order of $15 bn, and its foreign
exchange reserves have shrunk to $5.6 bn. (FT 15/16 March)
Oligarch Kolomoisky calls for the state take-over of privatised industrial assets
to raise cash for struggling economy Ukraine should not get any money from
IMF until illegally privatised property was returned to the state. Dispute
between the oligarchs are intensifying and the president is not keen to open a
Pandoras box. (R Olearchy and Guy Chazan, FT 21/22 March)
Ukraines president warns the regional governor of one of the oligarch
mentioned below) to remove armed men - a pocket army - from the head quarter
of the oil company - Ukranafta - over which he is battling to retain control. He
has already funded militias opposed to the pro-Russian groups in the East. (FT
24 March)
Ukraines finance minister begs for financial support to rebuild the economy; the
current $15bn debt restructuring, a part of a $40bn IMF led bail-out, was only a
first step. (Olearchyk FT 24 Mar)
Ukraines revolution13 months ago was aimed, above all, to overturn the
corrupt oligarchic system that had ruled the country for two decades. If the firing
of one of the oligarchs Kolomoisky - descents into all-out war between
arguably Ukraines two most powerful men, it is perilous indeed. (Editorial
FT 26 March)
Ukraine is struggling to repay debts; investors confidence low and some
Ukrainian groups now excluded from capital markets. (FT 8 April)
Yet several months after Russian soldiers appeared in Ukraines Donbass region;
Putin continues to deny that his country is at war. A majority of the public
believes him.
International efforts to shore up Ukraines finances rely on it reaching a dent
restructuring agreement with bond holders to bridge a $15bn gap GDP is
estimated to have fallen by 15% in first quarter of 2015, Government is working
hard to rescue corruption and reform the energy sector and opening the gas
market to investors. A small group of oligarchs still dominates economic life.
(Editorial FT 29 April)
After the surrender, allow Syriza to claim victory at home - good advice but
will it be heeded? Negotiations can only be successful if both sides can
legitimately claim victory. (Marcel Fratzscher FT 10 March)
Grexit and what will happen to Greece debated: Greeces bill to EU might
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include it structural funds (largely paid for by Germany), free military protection
and a claim against Greece for fraudulent entry to the single currency. (Letter FT
16 March)
Last year the Greek economy grew for the first time since 2007, and is expected
to grow by 2.5% this year, twice the Eurozone average, (D R Cameron, Yale,
Letter FT 20 March)
Athens has submitted a new list of reforms estimating that these could raise
6bn this year. It needs 7.2bn. (FT 2/3 April)
Greece is not completely sovereign as ECB limits what it can do; the possibility
of Grexit returns. Europe is demanding in a few weeks what previous
governments were unable to deliver in a few years. (R. Moghadan of Morgan
Stanley FT 8 April)
In Russia, Tsipras bargained against Brussels, with some success. No cash for
Greece but joint investment in agro-industry and food production, as well as for
a gas pipeline from the Turkish-Greek border, i.e. extending the planned Turkish
Stream gas pipeline from Russia to Turkey and via Greece into EU. (FT 9 April)
Greece paid its debt this month, but will exhaust its reserves at end of April;
hence perhaps a visit to Putin. Default likely unless more reforms demanded by
Brussels made. (FT 8 April)
Greece is moving ever closer to a debt default, but gold miners are
demonstrating against the government for withdrawing a license on
environmental grounds. By end of April Athens must pay monthly pensions and
public sector salaries; IMF repayment due on 12 May and Eurozone finance
ministers meet in Latvia on 24th April. (FT 18/19 April)
The IMF tells Greece to set aside politics and deliver agreed measures. These
reforms are to unlock 7.2bn. It got until May/June. W. Munchau argues that
defaulting on the IMF and ECG is the only route open to Greece Nobody has
ever done this m, but it need not mean Grexit. (FT 20 April)
Athens caves in and ordered local authorities to hand over spare cash, causing
serious internal rebellion. (FT 22 April)
Syriza cancels anti-poverty projects but signed a 500 million deal for
upgrading maritime patrol aircraft. (FT 23 April)
At a meeting in Riga the Eurozones finance chiefs frustration with Greece
boiled over as Greece was accused of backtracking. Athens remain desperately
short of cash and may default in May. Default by Greece, now expected, need
not lead to Grexit. It already defaulted on private sector creditors in 2012; it
could also issue scrip (instead of euros) but this would require capital control.
(Economist 25 April)
Greece could default by mid-May. Will Syriza survive the bail-out talks? (FT 1
May)
If UK left the EU (Brexit) bans and financial services would be most exposed,
but preferential trade deals in other economic sectors could be negotiated. (FT 9
March)
Tony Blairs imminent departure revealed many business interest His corporate
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roster has included Petro-Saudi, JP Morgan and an Abu Dhabi wealth fund.
Palestinians have been scathingly critical of him. (FT 16 March)
In UK the largest fall in capital investment (by state) between 2009 and 2013
were in education, communities and local governments. Schools fell by 55% in
real terms and local government and communities by 62%. Government made
no clear distinction between capital expenditure and maintaining assets. (FT 18
March)
The Oxford Union is often referred to as the last bastion of free speech in the
Western world. The ethos of the union is that more speech, not less, is the
answer. And it seems that, when it comes to tackling pernicious, Islamist ideas,
the government is happy to leave the Oxford and Cambridge unions to it. Herein
lies the problem. Their exemption from the legislation implies that because their
members are, well, a bit posh, they are somehow better equipped to hear and
debate with extremist speakers. (Spiked 18 March)
British politics has rarely been so unpredictable. (Economist 20 April)
Number of UK taxpayers with annual incomes over 2m has surged. The
Queen is no longer the wealthiest Brit and even dropped out of the richest 300
for first time UK now has 117 billionaires with combined wealth of 25 bn.
Top dog is a Ukrainian.( FT 27 April)
Even the FT favour growth-promoting borrowingthe argument that the UK
economy was in a grossly unsustainable state in 2007 is largely expose
rationalisation, what had been missed: the vulnerability of the UKs financial
sector to a global crisis. (M Wolf , FT 29 April)
Finland is also in economic difficulties with 3 years in recession and being the
worlds fastest aging country and is unlikely to back a third bailout for Greece.
Germany is angered by Greek war damage claims, asking for more than 160
bn for damage done during 2 WW. (FT 12 March)
US-British tensions grew sharply when Britain agreed to join Chinese led
financial institutions in defiance of American wishes, reflecting cold
calculations that is a British interest in Asian Infrastructure investments. (FT 16
March)
Germany should do its part (and make concession to Greece) in order to
rebalance the huge imbalances in the Eurozoneand boost domestic demand.
(Letter FT 4 May)
Russian politics has been bereft of guiding ideas. adversaries are called
fascists. (A Nekrasov (FT 30 March)
Putin promised to refrain using relations with Greece to divide the EU. For him
rapprochement with Greece is mainly about gas. In this, no change since mid2000 when Russia pledged to turn Greece into a natural gas hub if it signed up
to the now discarded South Stream pipeline. Greece needs to escape default.
Dreams of Russian investment will quickly fade. (Economist 11 April)
Russia lifted its ban on sales of advanced air-defence system to Iran and opposed
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by USA and Israel whose ire was directed more at USA than Russia. Israels
leaders have recently become quite friendly with Putin. Both Israel and Russia
gain from the current arms race between Saudi Arabia, UAE, Iran and Iraq.
The Russians accused the USA of deploying military trainers in the combat zone
of eastern Ukraine as violence resurges as the renewal of sanctions talks looms
in July. The west fears the cutting off of Ukraines exports and accused Russia
of deploying additional air defence. (FT 24 April)
Russia lost more than20 m citizens [in WW 2]the number who died in the
siege of Leningrad exceeded the total losses of British and US forces combined
in the entire war. (FT 4 May)
Chinas financial diplomacy attracts attention and criticism. Its main creditors
are Venezuela ($56.3bn, Russia ($30bn), Ukraine ($18bn) and Ecuador ($5.3bn),
Myanmar $20bn and Argentina ($19bn. Some are likely to default. China lend
$119bn to Latin American governments since 2005. (FT 18 March)
Chinas New Silk Road project linked to the AIIB - Asian Infrastructure
Investment Bank -envisages $40bn of investment to build transport
infrastructure across Eurasia, the South China Sea (80% of which are claimed by
China) and Indian Ocean, with Beijing taking place once held by Venetian
bankers. Behind much of this is the failure of the US to permit China and other
developing nations a greater role in both World Bank and IMF. Israel has now
followed the UK in joining the AIIB, with only Japan remaining @loyal to US.
(For details see FT 18 March and 7 April; Time 20 April)
Pirelli is being taken over by the Chinese National Chemical
CorporationChinas brokers, insurers and asset managers are on the hunt for
acquisitions overseas. (FT 24 March)
China is seeing its economy the worlds second largest slow more and more,
raising questions about the growth in global oil demand. Morgan Stanley
slashed its price targets for an array of commodities because of slumping
Chinese industrial activity. Nickel, iron ore, copper, coking coal, and other
metals are likely to see tepid demand as China disappoints. (Oilprice.com 26
March)
China, Japan and South Korea seek to ease tensions as their foreign ministers
meet in Seoul. But only Seoul is likely to join the AIIB which is causing alarm
in Washington. Might a northern Asian economic bloc excluding the USA be
formed? (FT 20 March) Japan was also considering to become a member. (Time
6 April)
IMF warns worlds leading economies of prolonged period of low growth,
making debt reduction more difficult. World Bank pledges to work with Chinese
led Asian infrastructure bank. (FT 8 April)
In China uncomfortable questions are being asked about the relationship
between the military and the Communist party. Technically the flatter controls
the former, but Party control needs to reassert itself. While defence expenditure
has risen 10-forld, it remains small as percentage of GNP. Power is being
projected increasingly in the western Pacific. (FT 9 April)
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China is acting to stimulate its slowing economy, freeing up cash for lending and
cutting reserve requirements for banks. The current growth target for 2015 is 7
%. (FT 20 April)
Chinese property developers can avoid lending restrictions by labelling
buildings as green or energy efficient; both concepts tend to be loosely
defined. (FT 24 April)
278 million migrant workers moved to the cities during last 3 decades, supplying
the Chinese economy with cheap labour. This supply is running dry and the
population is ageing leading to slower growth, loss of competitiveness and
increasing the urgency for reform. (FT 5 May)
New heads for all three national oil companies (CNPC, Cnooc and Sinopec)
have been appointed, a major reshuffle as part of the current anti-corruption
purge. One new appointee is Wang Yupu, currently head of the Chinese
Academy of Engineering. (FT 5 May)
Chinas leader think the UK is quaint, broke and insignificant. (Prospect 25
April)
Lee Kuan Yews Singapore provided the model for the Chinese leadership: a
wealthy, docile population controlled by a small elite. (FT Obituary 24 March)
His life spanned the last vestiges of colonialism; the advent of affluence; the
introduction of democracy, albeit flawed and limited; the spread of globalisation,
the decline of Japan and the rise of China; and now, the retreat to nationalism.
(Time April 6)
Japanese people have been robbed of their confidence: so far Abenomics
massive monetary stimulus - has turned into a squeeze, and structural reforms
have not worked. Government calls on businesses to spend their war chests. (FT
30 March)
So far Abenomics has done more for asset prices than it has for the real
economy. (Henny Pender FT 8 April)
Japan needs to boost the productivity of a shrinking workforce and remain on
track in clearing its debts. It is investing money and effort into curbing Beijings
influence in the region, and hence supports the ASEAN Abe is determined to
revive the third largest economy in the world. (FT 27 March)
Is Yemen Saudis Afghanistan, as Iran hopes? (Economist 4 April which
describes the nuclear deal as not yet real.)
Isis militants in Iraq bulldoze lost Assyrian city of Nimruda symbol they
consider idolatrous. (FT 7/8 March) They are pushing into areas south of
Damascus, but lost Tikrit in Iraq.
Stockholm cancelled a military deal with Saudi Arabia after an unusually
frank diplomatic bust up over human rights (sharia law and floggings).The
arms and training deal had threatened to tear apart the centre-left coalition The
Arab League criticised Sweden. Margot Wallstrom was blocked from
addressing it in Cairo. (FT 11 March)
Yemen is sliding into civil war and Libya is soaring up the Italian domestic
agenda with some urging the use of troops to protect vital installations, including
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crucial energy facilities. Even some in London are now questioning their
aggressive neutrality. Libyan oil production has slipped from 1.4 million
barrels in 2012 to 0.5 m in mid March when 2 fields in the west restarted
production. London and Washington want reconciliation, and this means with
Islamists. (FT 20 March)
The elected Libyan government is seeking to open an international bank account
to control the flow of oil revenues. The move would avoid the Islamist
government in Tripoli. (Oilpricecom 7 April)
Rival administrations in Libya are dogged by allegations of corruption and
incompetence and lack resources. The countrys oil wealth is grossly
mismanaged; oil accounts for 90% of total revenues and there are arguments
overbuying weapons from France.(FT13 April)
Saudi- led air attacks have failed to halt Houthis rebels in Yemen, further
dividing Sunni and Shia in Middle East, but Pakistan refused to join the fight for
fear of domestic repercussions. (FT 7 April)
Saudis had requested troops, ship and aircraft to restore power to former
president who has fled country in face of rapid advances from the Houthis and
their ally Ali Saleh, the former president. (FT 11/12 April)
The American have moved naval forces into the areas saying they were
monitoring Iranian vessels that could be providing weapons to the Houthis.
Islamists are also advancing in Kenya because of its appeal to its 2 million
Somalis, and beyond, to disgruntled Muslims along the coast. (Economist 11
April)
Afghanistan won a pause in the withdrawal of American forces, America sent

more than $1 trillion on this country since 2002. (coal 28 March)
On April 1 the Palestinians officially joined the International Criminal Court in
the Hague, opening the door for the prosecution of alleged war crimes in the
west Bank, Gaza and East Jerusalem by Israel. Israel is not a member of the
Court and opposed the ICC. (Time 13 April)
Dubai is hoping for an end to sanction in Iran has triggered a nascent gold rush
over access to its market, especially in Dubai. Entrepreneurs are gathering. (FT
20 April)
Palestinians militants are preparing for the next Gaza war, aid agencies warn.
(FT 24 April)
Iran faces growing pressure over nuclear negotiations as sanctions and lower oil
price bite; economists fear the country could fall into a tailspin if nuclear
negotiations with the west fail. (FT 6 March)
Even western powers know that any nuclear agreement can happen only thanks
to the guidance of the supreme leader, said a conservative politician. The
winner of any deal will be the Islamic republic, not reformists who wanted to
surrender to western powers and give up the whole nuclear programme. (Cited
by N. Bozorgmehr FT 7/8 March)
Republican Senators have written to Irans leader opposing their own president
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stating that they would undo any agreement. ( Time 23 March) This clouding
resumption of talks with Iran. The republicans say they want to stop Iran getting
nuclear weapons, threatening more severe sanctions. (FT 16 March)
Iran is celebrating the 64th anniversary of the nationalisation of its oil resources
which sealed Mossadeghs heroic status. Will Rouhani the current president
deliver an interim nuclear agreement? He is ready to be hanged for itbut Iran
must sign to save the country. (FT 21/22 March)
Negotiations continued and a framework agreement reached optimism
gives way to pessimism and exhaustion but there are 2 more weeks. Ad
experts have until end of June to flesh out an agreed framework, with relief
from sanctions imposed on Iran remaining an issue. (FT 2 April)
The nuclear deal with Iran has raised Tehrans hopes to revive its oil industry,
30m stored barrels could boost exports within weeks. By not cutting production
Saudi Arabia ushered in a period of lower prices to force rivals dependent on
expensive oil to curb output. The strategy is working. (FT 7 April)
Irans relationship with Saudi Arabia descended to a point of crisis. Iran and
Saudi Arabia are fighting a proxy war over control of Yemen, but now Iran is
stepping up the pressure. The Iranian media is calling for an international
boycott of Saudi oil due to the Arab kingdoms attack on Houthi rebels in
Yemen. (Oilpricecom 7 April)
On 14 April a rare bi-partisan victory over the Iran nuclear deal: Congress now
has 30 days to review a final accord over Iran (in June), and the right to approve
the lifting of sanctions it originally imposed on Iran. (Economist 18 April)
A growing regional problem in west Africa is blamed on Nigeria, the inability

to police its oily creeks in the delta, not to mention Boko Haram. The blackmarket is flourishing and sabotage of gas pipelines affects neighbours. Nigeria
has consistently failed to fulfil its gas supply contract with Ghana, causing it to
fall short by as much as a third of power supply every day. Fuel smuggling and
gas hold-up affect the whole region which remains the economic engine of west
Africa. (Economist 7 March)
The victor of the postpone election, former general Muhammadu Buhari was
announced. A peaceful transition to a new rule seems possible but hand-over
will not take place until 29 May. The transition is not likely to be smooth. (FT 1
April)
Buharis party, the All Progressive Congress (APC) has support in Lagos, but the
Niger delta area is still smarting from the toppling of Goodluck (PDP) who was
the first leader from a southern oil producing area. The PDP had ruled for 16
years. (FT 13 April)
Brazils dream of becoming one of the worlds top five oil producers by 2020
is fading, share price is lowest ever and its Supreme Court will now investigate
more than 30 Congressmen and senators over the scandal The break-even point
for its famed pre-salt deposits is $ 45, and average extraction costs last year
were $32 a barrel. (FT 26 March) Brazil is considered to have the 8th largest oil
and gas deposits, Iran the most followed by Venezuela, Saudi Arabia and then
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Russia, Canada, Qatar and Iraq. (FT 26 March)

The Petrobras scandal widens and deepens - reflecting a bureaucracy out of
control; or weak infrastructure, complex bureaucracy and an irresponsible
political elite. (FT26 March)
The Brazilian real has devalued by almost 20% this year. (FT 31 March)
Brazils Supreme Court will investigate more than 30 congressmen and senators
in relation to Petrobras corruption scandal. Over 1 million people protest.
Widespread disrespect for law and order is admitted. Brazil may now be facing
its worst recession in a quarter of a century. (FT 16 April) The public is calling
for the impeachment of the president Ms Rousseff and she is not likely to win a
second term in October. (Economist 25 April)
Venezuelas national Statistics Institute has not produced production figures
for the state oil corporation, or any poverty data political manipulation of
statistics is alleged, elections are later this year; the severity of the economic and
social crisis is allegedly being supressed. (Economist 4 April)
The economy in Venezuela continues sliding by 7% this year. The president rails
against the USA and promises to radicalise the revolution. Corruption is rife
especially and contraband trade in subsidised gasoline is said to cost the state
more than $2bn a year (FT 20 April)
Venezuela is not expect3ed to default this year despite a 60% chance of doing
so, according to market observers. (FT 11 March)
The politics of fear won the day in Israel with an unpopular prime minster
securing a third term. Will the USA still veto the recognition of Palestine at the
UN? (D. Gardener FT 20 March)
The day Netanyahu spoke in Washington, the Iranian Foreign Minister rejected
the 10 year restriction on Irans nuclear energy programme. Has bargaining been
pushed too far? (J Klein Time 16 March)
Doomed to endless occupation (by Israel) will make young Palestinians more
not less violent, (Schama, FT 21/22 Mar)
Finance
One of the worst performing investment groups, Aberdeen, lost 27bn in
business since mid-2013 because of downturn in developing markets. Flows are
getting worse. (FT 28 April)
China expects a greater economic slowdown than expected, but the Partys
prescriptions seem to be more of the same. (FT 6 March)
The slump in the oil market, together with the wider fall in the general price
level, means that the real return on cash is positive across much of the developed
world..In the meantime there is good news in the here and nowthe emerging
markets are struggling in a hostile environment with China slowing, commodity
prices falling and the dollar rising strongly. (John Plender Ftfm 9 March)
With the drop in oil prices, Texans began to ask whether they have done enough
to build long-term prosperity; unemployment fell from 9.9% in 2009 to 2.8 last
December, thanks to the fracking boom, but this has ended. So far 38% of all job
cuts in USA are accounted for by the oil and gas industry. Workforce training
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initiatives are spreading. (Digging for the downturn, B Jopson. (FT 7/8 March)
Euro has fallen to a near 12 year low against dollar because of bond buying spree
of ECB and expected interest rate rise in USA. (FT 11 March)
Bank of England warns that it would be extremely foolish to stimulate
monetary policy as oil prices fall, unless. Governments and companies are
exploiting historic low financing rates. (FT 11 March)
Advanced countries still have low interest rates [some approaching zero],
because they are still in a managed recession. The malady is deep, it will not
end soon. Vigorous monetary stimulus has produced but meagre results
indicating how weak these economies are. They are not victims of central
bankers, but of contractionary forces in the world economy a glut of savings
and a dearth of good investment projects. (Martin Wolf FT 18 March)
Nasdag plans to halve the cost of trading energy with the launch of a new, low
cost futures exchange. Energy futures are a rare market where competition does
exist, albeit between only two- CME and ICE. (FT 12 March)
Britains higher employment rate may have been achieved by little more than a
dual labour market which discriminates against the young and inexperienced.
Youth unemployment is about 3 times that of the over 25s. (C. Giles FT 12
March)
Eon had a record annual deficit of euro 3.2bn because renewables have squeezed
out conventional power earnings.clean power now has favourable access to
the grid and while renewables are heavily subsidised low oil prices and fall in
rouble have not helped. 45% of conventional power sources owned by RWE
were not making money. (FT 12 March)
Royal Dutch Shells CEO earned more than 20 million last year, after the oil
company poured millions of pounds into his final salary pension pot and footed
a UK tax bill on his relocation to the Netherlands His bonus was 80% higher
than that of his predecessor: He was not treated differently from other Shell
employees, said Shell. (FT 13 March)
Eni, Italian oil major, was first to cut dividends and billions of assets are to be
sold. A more robust company is to emerge capable of facing a period of lower
oil prices. (FT 14/15 March)
IEA warns that recovery from low oil prices around $45 a barrel is unlikely
while stabilising fluctuations are likely. Global demand is forecast for 2015 as
93.5m b/d, and consumption was still growing in 2014. Total US production is
not expected to abate until second half of 2015 with output still rising though
much less so than in 2014. Losses in Libya and Iraq were offset by higher
supplies from Saudi Arabia and Angola. It estimated global demand this year to
93.5m b/d suggesting that demand is still rising. (FT 14/15 March)
First Islamic green bonds expected this year (EF 18 March)
Ineos launches a pro-fracking campaign in NW England having bought
exploration rights from IGas. It hopes to spend 138m to drill for shale gas.
Drilling permission has been granted in Cheshire and west of Manchester; the
gas is to supply the Grangemouth refinery and petrochemical complex which
supplies 70% of fuels sold in Scotland. (FT 11 March)
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Genel Energy shares are trading at a discount- BUY! It is the largest independent
producer of oil and gas in the Kurdistan region of Iraq. An interim deal with
Baghdad should facilitate regular export payment to KRG. Genel, though
unsuccessful in in Africa it is to recommence work in Somaliland. (FT 14
March)
German equities emerged as the main beneficiaries of the ECBs quantitative
easing programme Drax should continue to benefit from a significantly weaker
euro and cheaper monetary policy; lower oil prices were another boon for the
market. What will happen in USA? (FT 17 March)
The most deprived areas in England have suffered the most severe public
financing cuts, Rowntree Foundation research concluded. (FT 18 March)
The ECB is considering banning Greek lenders from adding to their government
debts which could increase discord with creditors and cut Greece off from key
source of funding. Merkel hopes for a break through next week. (FT 20 March)
Britains economy is growing and unemployment low, but productivity has not
improved and remains below continental standards. Structural weakness has not
been addressed. (Wolf FT 20 March)
US budgets have become more about theatrics and scoring points than serious
efforts to fund government. (FT 20 March)
IMF very badly led (by a non-economist) leaving dispute settlement to
politicians and lurching from debacles to debacle, including the Cyprus Bank
haircut, renewed securitisation worldwide, two ridiculous IMF programmes in
Ukraine, and repeated failures to warn over Greece. (Letter, FT 20 March)
The drop in oil price is showing in more transparent wealth funds and now
constitutes a material change. Norways $850 bn oil fund holds 1.3% of
worlds equity market capitalisation. The total wealth of all sovereign funds is
estimated as $7.1 trillion, with $4.3tn is dependent on revenue streams from oil
and gas. Sovereign wealth funds are increasing in number, the oldest started in
Texas in 1854. Some outflows may occur, even in Saudi Arabia. (FTfm 23
March)
Concern over climate change, is not reaching board level, complains F&C
Investments, a UK fund house and calls for long and robust risk management.
the idea of stranded assets needs to be taken on board by investment consultants.
(FTfm 23 March)
The prices of all those commodities (iron ore, copper, coal, oil and gas) have
slumped because of oversupply You cannot abolish boom and bust.
(Interview with CE of BHP Billiton who also object4ed to oil and gas groups
using greenhouse arguments as a marketing ploy. (FT 23 March)
The transition to low and no-carbon energy sources will be difficult, but
necessary. Walking away by simply selling off assets through divestment will
not help. (CEO for the Californian Public Employees Retirement System (FT
23 March)
Emerging markets Brazil Turkey, South Africa that used low-cost dollars to
finance external debts are now facing serious problems as participants of the
largest boom in dollar dominated borrowing since the financial crisis. Financing
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its debt will cost Turkey this year more than half its economic output,
Indonesias debt is even higher. (FT 24 March)
Economists have downgraded forecasts for the American economy. Investors
are shunning transport stocks which are assumed to give the best indication of
the underlying economy. (FT 27 March)
UKs Centrica chief was paid 6.3m a year in bonuses but may get only 3.8
million. executive pay has become a contentious issues as electricity prices
have soared and in 2013 one CEO did no0t take his bonus, conceding that trust
with consumers needed to be rebuild. (FT 27 March)
Shell and Taqa (Abu Dhabi) are planning to cut hundreds of jobs in the North
Sea, but are resisted by trade unions Capital spending is also being cut and
increase borrowing. The equal time-shift rota is one issue, i.e. 2 weeks on and
3 weeks off, and longer hours, rather than 2 on and 3 off. Trade unions are
considering action. (FT 27 March)
A weaker oil price and falling Australian dollar have helped miners (Fortescu
Metals and Rio Tinto and BHP) to cut their productions costs. (FT 27 March)
Re AIIB being joined by UK against Foreign Office (and US) advice: . The
US controls the World Bank the most hated development bank in the southern
hemisphere and does not want rivals for that valuable franchise. Osborne (UK)
should ensure that AIIBs headquarter comes to UK. HSBC is also moving to
Birmingham a nice pagoda in the city centre that will help Chinese bankers fell
at home. (Jonathan Guthrie FT 27 March)
Average cost of production per barrel for North Sea crude was 4.40 in 2004; in
2014 it was 18.50. (FT 30 March)
US drivers are consuming more petrol thanks to lower fuel prices and a
rebounding economy. (FT 31 March)
Australia plans to join AIIB, conditionally, despite US concerns. One issue is its
governance and transparency.no one country should control the Bank. (FT 30
March)
Private equity is flowing into Africa after IMF forecast 5.75 % growth there,
higher than in the source area of these funds, the Middle east where growth
forecast have been slashed to 3.3% after oil prices halved. (FT 31 March)
Oil majors are hoarding their cash flows preparing for a barren period. The
problem to replace their oil reserves will only worsen as exploration spending
declines. Energy companies have already reported the biggest decrease in oil
reserves in six years. They shed more than a bn barrels of reserves last year. Big
discoveries have dwindled, it is claimed. (FT 1 April)
Sensitive oil price: Brent jumped up by 3.5% ($57.02) in response to the
news that there was a slower than expected build-up in US inventories and
a drop in production in previous week. (FT 2 April)
Electoral uncertainties in 7 European countries this year should be an
additional deterrent for investors, particularly for potential buyers in highly
regulated sectors such as utilities and media. To see off all the dangers hanging
over European Mergers &Acquisitions, the power of the dollar will need to be
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truly Herculean. (P Jenkins FT 13 April)

Frances refusal to countenance exploiting shale gas deposits will cost it up to 293
billion and 225,000 jobs over the next three decades, according to a confidential
government report. The report, which came down in favour of waterless
fracking, was leaked to the media yesterday after it had been shelved by
President Hollandes Socialist-led cabinet. (Times 13 April)
The falling oil price has led energy companies stocks on a merry dance, with
lower share prices boosting dividend yields Shell is down 17% since the
beginning of September, with tit proposed take-over of GBG Group
contributing. (P. Skypala FT 14 April)
The CEO of Pirelli Provera sold the firm, fifth largest tyre manufacturer in world
to China as part of a 7bn takeover by China National Chemical Corporation..
(FT April)
Big investors want banks to stop paying bonuses that exclude fines and
restructuring costs. (FT 20 April)
The fall in oil price has not curbed fracking as much as expected there is little
sign of a bust in Americas shale business whatever Saudi expectations may
have been more than 2/3rds still have a healthy balance sheet, though borrowing
for frackers has become a little more expensive and the number of oil rigs in
America has fallen by half since October but oil production is still growing. The
ability to cut costs has been one reason, price of labour , steel and other inputs
has fallen There is no sign of investments shifting away from unconventional
oil with output globally still rising Barring big geopolitical upsets oil prices are
unlikely to rise sharply. (Economist 18 April)
Average cost of production per barrel for North Sea crude was 4.40 in 2004; in
2014 it was 18.50. (FT 30 March)
Geopolitics and regulations will reverse globalisation of capital markets in next
5 years, with Asia developing financial centres that rival London and New York,
PwC predicts. (FT 14 April)
A surge in the US dollar wiped more than $20bn from first quarter sales of
Apple, the US largest company; only some companies disclose enough
information for calculating the dollars effect on sales. (FT 27 April)
Chad could cancel all or part of its $1 bn debt with help of IMF and World Bank.
(FT 28 April)
Politicians are mesmerised by polls, while chief executives are enslaved to the
stock price. (E. Luce FT 27 April)
Beijing struggles to recapitalise the provinces after years of unsustainable
borrowing and investment; the national economy is now growing gat slowest in
six years, but local debt has surged. (FT 29 April)
Boards should pay more attention to shareholder concerns, say major
companies, including Citigroup, Bank of America and GE, while Black Rock,
the worlds largest asset manager, does not do so itself at this time. (FT 29
April)
QE by the ECB has continued to suppress government borrowing costs, but the
same cannot be said for corporate debts. In the meantime, the eurozones
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experiment with negative interest rates continues. (FT 29 April)

Crude $50.75 Brent 59.32 both up. OIL prices jumped because of civil war in
Yemen, with Saudis becoming militarily involved and there are fears about
Middle East trade routes. (FT 27 March) By late April oil traders feel outlook is
positive with crude oil price stabilising after final lows. Others expressed
caution at FT Global Commodities Summit in Switzerland, with Tony Hayward,
of former BP fame, dismissing the idea of the US as a swing producers, claiming
that its supply chain was being decimated. Regulation was driving investors
out of Europe into Asia. (FT 28 April)
Hybrid bonds are aback in fashion, especially among utilities. They are
securities that offer a robust return given low interest rates and are attractive
attracted because they can be easily terminated or transformed into equity.
Centrica and Total have been attracted. (FT 2 April)
The UK Guardian Media Group is to sell its fossil fuel investments (20million
out of 800m) because of concern over climate change - part of The Guardians
Keep it in the Ground campaign. And as such part of Bill McKibbens
divestment drive in USA. The principal objective of GMG is to influence fund
managers. (FT 2 April)
Ukraines hope of reaching a compromise hangs in the balance. Negotiations
begin in April (FT 2 April) In Kharkis, its second largest city with close
economic links to Russia but outside the rebel controlled area, financial
insecurity now worries people more than terrorism. (Economist 11 April)
Why did Shell pay such a high price for BGs assets? Perhaps to mollify
shareholders with a fairy tale based on a$90 forecasts to survive in a $60 world.
It is hard to see the net values creation for shareholder. (FT Letters 13 April)
$1 trilliolon is being returned to shareholders by US companies as cash is being
diverted from investment into buybacks and dividend- because of concern over
global economic outlook. (FT 13 April)
The IMF advises Greece to design economic reforms rather than hope for a
grand bargain to unlock 7.2bn. (FT 17 April)
Russia accuses USA of aiding rebels in the North Caucasus where Moscow Is
having difficulties with Chechnya and its rulers, as low level fighting continues
in Donbas region with the EU warning the Ukraine to implement a ceasefire in
full or giving Russia an excuse to renege on the Minsk ceasefire. In the Ukraine,
its president tackles oligarchs stranglehold on economy. Three are mentioned
all with strong links to energy (power generation, natural gas and
petrochemicals) and includes Ukraines richest man Akhmetov. A former
partner of Gazprom is still holed up in Vienna challenging US extradition on
corruption charges. (FT 27 April)
Big oil vigorously slashes costs, reorganises and refashions relations with
suppliers and states, thanks to crash in price of crude just the therapy the
industry needed. We will have to survive at a $60 or even less, said Occidental
Petroleum. (- Ed Crooks and C Adams) However, lower commodity prices cheaper oil and gas, did not make up gains made by increased demand during
682
cold period, weighing on Centrica, UKs largest energy supplier. (FT 28 April)
TPP and TTIP are diverging; the latter has become controversial in Europe
where opt-out clauses promised by the Commission are liable to challenge at
the WTO (say the Americans), while the former is looks like nearing
completion but is criticised for being anti-Chinese, using trade as a weapon.
Obama would need fast-track authority which he is likely to get from
Republican free-traders in Congress and Senate. (FT 29 April; Economist 25
April)
Ukraine has avoided first hurdle in drive to avoid financial collapse. (FT 28
April)
The US recovery has lost momentum, hence interest rate rise in summer
unlikely. The rise in the dollar and impacts of oil price drop are blamed. (FT 30
April)
The Church of England joins in what the FT calls the fight to demonise fossil
fuels. It is to sell 12 million in companies active in thermal coal and tar sands.
(FT 1 May)
Impact Investment is increasing in popularity (i.e. seeking positive social and
environmental impacts) is attracting more investors according to J P Morgans
social finance team, with energy one area forecast to receive the largest share.
(FTfm 4 May)
Almost half of impact capital is deployed in developed markets, which implies
that the invisible hand is failing to carry out is self-appointed task of ensuring
that what is needed is supplied. (S Grene FTfm 4 May)
The financial crisis has taught us that a credit based financial system is
inherently unstable and prone to excess, which has debilitating economic and
social consequences. (FTfm 4 May).
The geopolitical landscape is shifting dramatically, away from US leadership
and governance and towards a multipolar world marked by rising global
insecurity and geopolitical conflict. (S. Subramanian FTfm 4 May)
Nasdq argues that energy markets are a monopoly dominated by CME group
and Intercontinental Exchange, and has set up its own new energy market
challenging reigning two 2 oil and gas future exchanges CME and
Intercontinental Exchange. (FT 4 May)
Science
An ultra-luminous quasar has been discovered - SDSS JO100+2802 - that is
420trillion times brighter than our sun; (FT Magazine 7/8 March)
We have been witnessing a strong recovery in Arctic sea ice volume and
thickness in the last three years. (Paul Homewood 14 April)
None of the leading CSIRO scientists, including all climate science research
heads, had their contracts renewed. (Eric Worral, EIKE 16 March)
The leader of Boko Haram believes that the world is flat and rain is made by
God, but has computers in his office, objecting to western education but not
products. (Economist 28 March)
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683
Water shortage are threatening in Iran with the $500 million Seymareh dam
now completed after 17 years but almost redundant for lack of water; some now
think this money should have been invested in renewables. (FT 20 March)
Both satellite data sets released for March show a drop in global temperatures
for the second month running. According to both UAH and RSS, current
temperatures are now below where they were at the start of last year. By the end
of May, I would expect to see the 12-month averages begin to drop. Meanwhile,
1998 and 2010 temperatures remain well above anything seen last year. (Paul
Homewood 6 April)
After significant recent loss, there has been a rapid recovery In Arctic Sea Ice
Volume Back to 2006 Levels. (Paul Homewood March 23)
Nitrous Oxide (N2O) is also a greenhouse gas watch its fate when Greenpeace
becomes interested. (WUWT 8 April)
Roy Spencer reports that, after three years of hard work, UAH have now
released the new Version 6.0 temperature dataset. The main result is that the new
version reduces the warming trend since 1979 from 0.140C to 0.114C/decade.
(WUWT 8 April)
Part of the global ocean conveyor belt that helps regulate climate around the
North Atlantic, show no significant slowing over the past 15 years. The data
suggest the circulation may have even sped up slightly in the recent past.
(NASA News, 25 March)
Michael Mann, Pennsylvania States notorious ClimateGate e-mail figure,
received close to $6 million promoting scary scientific conclusions serving
governments goal of control over energy sources, $3.6 million of it from the
NSF. The radical Environmental Defense Fund has collected $2.8 million in
federal grants since 2008. (R Arnold Heartland 19 April)
For global climatic effects of the Tambora volcanic eruption in 1815, see
Economist 11 April. Cooling dried out the planet. The signs of an 1809 eruption
of unknown location can be seen in Arctic and Antarctic ice sheets.
Melting Arctic sea ice, a keenly watched measure of global climate change, has
paused, sharpening debate on whether humans or natural variability are to
blame for the earlier decline. (Graham Lloyd, The Australian, 4 April)
An international team of eminent climatologists, physicists and statisticians has
been assembled under the chairmanship of Professor Terence Kealey, the former
vice-chancellor of the University of Buckingham by the GWPF, London. He
says: Many people have found the extent of adjustments to the data surprising.
While we believe that the 20th century warming is real, we are concerned by
claims that the actual trend is different from or less certain than has been
suggested. (Friends of Science 30 April) Albert Jacobs
Whether the scientists statements are measured or inflammatory, the media
invariably warns that this will plunge Britain and Europe into a new ice age,
pictures of the icy shores of Labrador are shown, created film of English
Channel ferries making their way through sea ice are broadcast... And so the
circus continues year after year. (Richard Seager, Lamont-Doherty Earth
Observatory of Columbia University)
684
Multi-year ice has been steadily building up for the last few years, and now
stands at the highest level since the winter of 2007, before much of it was swept
out of the Arctic basin in 2007 and 2008. (Countering scare stories on by BBC
about Arctics permanent ice cover disappearing. (Paul Homewood 4 May)
Emissions
Diesel fumes are the latest emission threat as carmakers fight creeping
demonisation of diesel fuel. The debate seems to be switching from CO2 to
particulates and nitrogen dioxide. (FT 12 March)
New Delhi has stopped releasing statistics about its air pollution It now has the
worlds dirtiest air, according the WHO. Modi is clamping down on anything
seen as distracting from Indias international image. (FT 12 March)
India wants to double coal productions within 5 years. (FT 1 April)
Global emissions from fossil fuel combustion, claims IEA, have ground to a halt
for the first time in 40 years interpreted as a sign that efforts to tackle climate
change may have been far more effective than thought. (Oilprice.com 13 March)
Global greenhouse gas emissions flattened unexpectedly in 2014, marking the
first time in decades that the global economy expanded while carbon emissions
did not... The major reason was Chinas ongoing crack down on major polluters
and its impressive effort at reining in the consumption of coal. Chinas coal
consumption and its overall level of emissions declined in 2014, and OECD
countries have to some extent decoupled their economic growth from energy
consumption. (Oilprice.com 13 March)
An unnamed IEA scientist said concentrations not emissions need to be capped
- all part of the preparation for the Paris Conference. (FT 13 March)
European car manufacturers face billions of fines from the Commission if they
fail to comply with CO2 emissions standards of 90-95 gm per km by 2020-21.
Electric cars could achieve this, but so could updated internal combustion engine
technology and better aerodynamic. (E Moore FT 24 March)
Russia is the fifth biggest emitter of GHGs in the world, after China, the USA,
EU and India, according to WRI. Green groups argue that forests are a false way
to meet an emissions target, and that sinks are usually invoked to avoid the
cost of switching to cleaner energy resources or reducing real carbon pollution.
(Paul Homewood 7 April)
Weather conditions created an air pollution alert in London. The toxic mix
relating to local car emissions and imports was dangerous to health. Air quality
in London is among the worst in Europe. Diesel emissions are largely blamed.
(FT 10 April)
Smog in Beijing is declining according as planned under its 2013 air pollution
control plan, Greenpeace admits but air quality generally remains poor in China
and is becoming a political liability. (FT 22 April)
Two thirds of new cars sold in UK have such low carbon emission ratings that
they need not pay tax for the first year UK buys more plug-in cars, heavily
subsidised, than any other EU country, but only 15,000 out of 22.5 million are
involved. Up to 50,000 premature death in UK are ascribed to air pollution.
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685
Incentivised scrappage schemes are being discussed London may introduce an

ultra-low emission zone in 2020. (FT 28 April)
UK highest court said government must speed up efforts to meet EU air quality
standards send a shiver through the diesel car industry which claims that diesel
engines are cleaner than ever. (FT 30 April)
Policy
Motor fuel in most remote areas in UK will become cheaper with aid of a 5%
discount from 31 May. And fuels duty will remain froze, decided the UK
government prior to the coming May election. (FTMoney 7 March)
UK Investors in bioenergy projects will be offered guidance on the
environmental and social sustainability of new projects via a new international
standard. (ENDS Report 19 March)
Gazprom faces large fine if found guilty of breaking anti-trust and pricing rules
by Brussels, The ant-trust action began in 2011, with Gazprom charging some
countries much more than othersincendiary political tension is reported
Gazprom still has a chance to settle but Russia could turn off the tap
completely. Exploitative pricing is the legal issue. (FT 16 March)
European car manufacturers face billions of fines from the Commission if fail to
comply with C02 emissions standards of 90-95 gm per km by 2020-21. Electric
cars could achieve this, but also argues one lobby, updated internal combustion
engine technology and better aerodynamic. The challenge is great given the
growing demand for large cars and limited appetite for electric and hybrid cars.
(FT 24 March)
Protests are mounting in Switzerland against a proposed change in the
constitution that would enable government to protect the climate, e.g. increase
taxation (Klima- und Stromabgaben). (klima-schwindel.com 28 April).
The publication of formal greenhouse gas reduction commitments by the US and
Russia will give a strong boost to upcoming UN climate talks. (ENDS Report 2
April)
DECC rebuffs MPs on fracking and environment: Exploiting shale gas is
compatible with meeting carbon budgets and environmental impacts can be
handled through the existing regulatory regime, insists DECC. (ENDS Report 2
April)
A Senate committee voted to prohibit the Environmental Protection Agency
from using secret science to back its regulations. (WUWT April)
The UK Budget barely mentions energy efficiency or climate. But MPs from
each of the three main parties have supported calls for a new Office of Resource
Management. (Paul Homewood 2o April)
A debate has begun in UK about its slump in productivity. The gap other G7
countries has increased and is felt by Labour its biggest economic challenge.
High energy costs are not mentioned among the theories put forward, but
collapse in the rate of growth of total factor productivity, as the use of older
and worse machines, are. (FT 20 April)
686
A group of European scientists call for a global zero-carbon society by 2050.

(Grantham Institute 22 April)
Angela Merkels Christian Democrats Demand Lowering German Climate
Targets. (Rheinische Post, 1 May 2015)
The Conservative Party won UK elections outright, cheering the financial and
energy sectors. (B-C Hull, 8 May) The Conservatives might have won
decisively, but the future of the Union is still uncertain. (Peter Riddell, Prospect,
9 May)
Technology
Solar power in US, still dependent on subsidies. (Care, March 2015)
The US Sunlight Solar Farm has 8 million panels spread out in the Californian
desert generating energy for about 160,000 homes and taking up 3,800 acres.
..Undoubtedly a wonder a first of its kind. And as it turns out, it may also be
its last. However, solar power is now a $15bn business in USA, employing more
people than coal mining. In 2011 the price of silicon began to fall rapidly and
Chinese subsidized PV panels began flooding the market, but are such large
project is sustainable asked Time 9 March)
Liquid immersion technology to cool computers is becoming attractive outside
the military and may save energy using air conditioning. (FT magazine 7/8
March)
Fuel cell technology, e. by Intelligent Energy, may be the changing face of
British manufacturing, with emphasis not on manufacturing but on design and
engineering. (Economist 21 March)
The emerging landscape of generative design tools will play an important role
in net-zero buildings (From Building Information Modelling and the net zero
building, (Energy World March)
Chinas Hanergy reports soaring revenues with the share price of its thin film
having risen by 1,800 % in 2 years making its owner one of the richest men in
China. The panels are made in Chinese factories and reported profits five times
those of its nearest rival, US First Solar, but analysts are now questioning its
model and valuation: will shareholders be able to pay for the purchased
equipment? The company employs about 2000 people. (FT 31 March)
RUMM is to cut the energy bill of British business by up to 4bn annually by
changing behaviour- described as giving access to the UKs first low carbon
psychologist. The technology, an invention of the University of South Wales,
will provide real time consumption data for its users is selling fixed-fee five year
contracts and specialises in heavy industry. Energy management is becoming big
business in UK as energy costs are expected to rise. (FT 2 April)
Do not confuse LNG (liquid natural gas) and CNG (compressed NG). Im not
aware of many cars or buses burning LNG but lots both burn CNG. In the US,
over 50% of refuse trucks sold in 2014 burned CNG. (Greg Freemyer 23 April)
China promises to end export tariffs on rare earth after losing a case in the WTO. It
is has to most of the worlds deposits of these strategic materials. (FT 24 April )
The Global Carbon Capture and Storage Institute estimates that there are 22
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687
CCS projects currently operating or under construction in the entire world. What
will the effect be of low oil price? (Energy World March)
Tesla is, having had little success with its battery car so far, is now calling itself
an energy innovation company and launched a new battery costing $3,500. This
is to allow homes and businesses to store energy, e.g. when power costs are
lowest. Large market is expected during next decade.it will take a long time
before its battery business will produce returns, all still in category of utopian
dreams. (FT 2/3 May)
Carbon fuels and nuclear
On 20 March: Crude $44.13 and Brent $54.02. (FT) On April 17: $55.21 and
$63.1, (CO2 no price quoted). On 5 May oil prices had risen to Crude $
59.32 and Brent $ 66.32. On 16 March oil prices fell to a 6 year low in reaction
to growing stocks of domestic crude. Number of rigs still declining, but Opec
expects full impacts to show only in next few months. Capacity utilisation at
Cushing is at 69%. (FT 17 March)
Boom era of oil demand is in past says - forecast economic growth is slowing
everywhere, including China and Brazil and Russia. In spite of wealth transfer
to consumer countries, the outlook, according to IEA is getting murkier global oil demand is not expected to recover until 2020. The Saudis remain
determined to protect their market share and oppose the marginalisation of the
use of oil. In fact OPEC output rose sharply in March led by Saudi Arabia which
pumped 10.29mb/d above its recent peak in 2013 of 10.2 mb/d, adding to a
supply glut. Yet Brent has rallied by 30% since January. (FT 17 April)
Despite weakening of global energy markets the 2015 BP Energy Outlook
expects global energy demand to rise by 1.4%, gas helping to squeeze out coal
from power generation. An interconnector between France and Spain (HVDC)
has been built, including a tunnel through the Pyrenees and will increase the
export potential of renewables into Europe. A subsea link between Norway and
Germany has yet to be built. (Energy World April)
Deep changes in supply and demand in recent year, with price of Brent halved
since June 2014, have created uncertainties as lower oil prices and cuts in
capital expenditure are starting to take their toll Production growth may slow
down. (FT 16 April)
Glencore is cutting its thermal coal output but the wider response to falling
prices has been to raise output to counter falling prices. The thermal coal market
is blighted by oversupply but the worst may be over. Strategy may be involved
a negotiations with Japan over a large annual supply contract have started. The
largest coal producers are Glencore, Anglo-American and Rio Tinto. An
Australian bank expects the rally in coal prices to fizzle out. (FT 6 March)
Rockhopper Exploration is back drilling off the Falkland Islands in contested
waters. Its partner Premier Oil owns stakes in 4 wells to be drilled; Statoil further
delays drilling deep inside the Arctic Circle in the Barents Sea, blaming falling
oil price and high operating costs It hopes to develop a new oil hub on Norways
north costs. This development has been postponed. (FT 7/8 March)
688
China and Russia will agree this year to pipe gas from western Siberia China via
the @power of Siberia pipelines , a deal that continue to shift Russia towards
China allowing Russia to choose between exporting gas to Asia or Europe.
Chinese companies will be allowed to invest directly into the Russian upstream.
Overland rail, road and pipe networks are to be part of the New Silk Road
economic belt (FT 9 March)
Energy ministers revelation that Areva and EDF might merge, reduced share
price in EDF. (FT 10 March)
Only a couple of the 40 oil tankers originally chartered to store crude offshore
have actually been used. It is an expensive strategy and current conditions are
not (yet?) attractive enough to encourage large amounts of floating storage, with
16 of UK output of crude. Nevertheless supply exceed demand by about 1.5,
barrels a day new tanks are being constructed on land. (FT 10 March)
Whiting, the largest producers of unconventional oil and gas with 163,000 bpd
in North Dakota is looking for a buyer if oil prices falls below $50; the money
may run out in 18 months. (FT 11 March)
Chevron expects a sharp slowdown in production growth to bring demand and
supply into to balance in 2016 moving prices upward. This year it hopes to
increase its output in Kazakhstan. (FT 11 March)
On 10 March is was reported that the attempt to use super tankers to store crude
oil offshore faced difficulties when crude price rose again and with it the
differential between Brent crude and crude from shale oil which is not wanted
by US refineries. (FT)
Areva ended its strategy of leading high profile new build nuclear projects and
will work more closely with EDF. (FT 16 March)
Norways oil fund supports proxy access which allows shareholders a formal
right to propose r their own director candidates. This focus on governance came
after reported its second worst returns in past decade. (FT 14/15 March)
Oil exploration and discoveries near the borders with central Asia during the
1990s are involved, with investigations now picking away at the networks of
Mr. Xis predecessors. (FT 17 March)
US Shale industry shows remarkable resilience, stepping up activity even if oil
price remains below $75less than half of companies are reducing capital
expenditure in 2015 cf to 2014. . (Total is auctioning part of its most productive
gas field in North Sea. Austrian, Japanese and Kuwait companies seem
interested. (FT 16 March)
Ineos, the Swiss chemicals firm based at Grangemouth is spending hundreds of
millions on a charm offensive to persuade Scots to accept fracking. The
company said I would pay 45 of shale gas revenues to landowners and
homeowners, and 2% towards community projects. (FT 18 March)
Chinas oil company Petrochina has become a target of Beijings anti-corruption
purge, several senior executives have been claimed so far .The second in
command is being investigated as a member of a gang. (FT 17 March)
The Stranded assets report names companies with dirtiest coal stations (EF 18
March)
Fuel for Thought
689
Gulf Keystone Petroleum active in Kurdistan is in trouble, with increased net

losses and a search for take-over partners. Delays in promised payments by
regional government has
Modi has difficulties in delivering multinationals friendly policy, as shown by
new and unexpected tax bill of $1.6bn for Cairn Energy to which it reacted
angrily. (FT 18 March)
As UK taxes on oil producer were reduced, ENQuest promised to boost
investment and cut productions costs in North Sea. Further development in
British waters are planned in spite of impairments on two key fields. (FT 20
Mar)
On March 1 UK government announced tax cuts for the oil and gas companies
operating in the North Sea, the petroleum revenue tax will decline from 30 to
20%. Revenue from this sector had already declined by almost one half, to
4,7bn. Drastic cuts in operating costs will also be needed. (Economist 21
March)
As the gap between domestic and internationally traded crude prices widened (to
about $5 in mid-March) the campaign by producers against US crude export
restrictions grew stronger, competitors abroad getting a higher price. Most US
shale oil productions becomes uneconomic if oil price below $40 a barrel. WTI
was $46 at the time. Some argued that the export restrictions are helping OPEC
to smothers production. US crude exports have increased since December but
mainly to Canada and are still less than 5% of production. (FT 26 March)
Tullow is also involved in a dispute over offshore oil field disputed between
Ghana and Ivory Coast, an areas expected to add substantially to its cash flow
and profits. Tullow had been down rated because Ghanas sovereign rating was
lowered. The estimated 2 year wait for a decision is likely to wipe off 16% of
Goldman Sachs valuation for Tullow. (FT 4 April)
US output of fossil fuels is at an all-time high, yet MLP - master limited
partnerships the haulers and storers of energy, a financing structure not an
industry - are suffering. Some of their business has become fully exposed to
falling prices. (FT 7 April)
US shale oil production seems to have peaked at last. But will the world glut
end... The higher the oil price rises in short term, the greater the likelihood that
discipline among US shale producers breaks down, bringing the oil price down.
(FT 18/19 April)
Vitol, the Worlds largest independent oil trader thinks crude oil prices have now
hit bottom. Commodity traders had been buying cheap crude for storage
(contango buying) but price differential with spot market prices has narrowed.
All are hoping for lifting of sanction against Iran. (FT 22 April)
Eni has called for cooperation between OPEC, the US and Russia to avoid a
repeat of destabilising price moves, investment in the industry should be
encouraged. Enis CEO hoped for a price of about $70 a b for crude. The oil
market is particularly vulnerable to swings because of the growth in futures and
other financial derivatives. Eni greatest concern is of course Libya, the security
of its people and assets there. It is currently keeping the lights on in Tripoli.
690
Considering threat from Libya as bad in not worse than that from Ukraine, Eni
as the first energy major to cut its dividend. (Dr. S. Ghouri and Dr. A. Ansari
Economist April)
The UK government let it be known that it would not oppose any attempt to
take over BP - seriously weakened... No comment from BP. Exxon is
mentioned as potential buyer; Dudley not keen on a megamerger. (FT 27 April)
South Africa, which has two big coal plants now under construction each one
with a capacity of about 4,800 megawatts. A single plant of this size will
consume some 15 million tonnes of coal a year, according to Eskom which is
building the plants. (GWPF 27 April)
The Chinese have issued a one belt one road directive aimed at building
infrastructure links from China to Europe and the rest of Asia, extending to
Nigeria and Zimbabwe for which railway contracts have been signed. It pledged
$40bn to an infrastructure plan last year. (FT 29 April)
The sunflower movement in Taiwan is anti-nuclear and the leader of the KMT,
the ruling nationalist party says he wants Taiwan to become nuclear free.
Brussels has blocked Hungarys Euro 12 bn nuclear deal with Russia, a decision
that will further inflame tensions between Moscow and the EU. A 1,200
megawatt reactors was to be built at Paks, south of Budapest. Brussels feared
that this would further increase Hungarys energy dependence on Russia. (FT 13
March)
Hungary has agreed to EU demands to diversity its nuclear fuel supply,
removing a main obstacle to its Kremlin backed nuclear expansion. (FT 26
March)
Domestic nuclear rivalries in China (CCNC and CGN) are affecting foreign
relations as they jostle to promote their own reactors design, e.g. in Argentina,
Japan and UK. A third generation design is to appeal to overseas buyers. CGN
is hoping to build in Essex, the Bradwell site, while Hinkley Point is in hands of
CCNC. There is no single unified design. (L Hornby, FT 28 April)
ENERGY AND CARBON FINANCE

The Markets Right Now Are in Flux, and in Trouble (Energy Finance 2015
Conference, New York City Received 16 March)
Trendy renewable ideas such as solar manufacturers or climate change funds
have run agroundbe careful. (D McDermott, Chelsea Financial Service,
Financial Times 4 March)
Oil price has stabilised at around $50 per barrel, well below the level where
weaker companies in the sector can stay healthy but private firms and hedge
funds have rushed into energy junk bonds. Some companies are not expected to
survive for 2 years. (FT 8 April)
Fuel for Thought
691
Green Bonds Flourishing but What is Green?

The green bond market has grown explosively over past 3 years, from $3.1 bn to $36.9
bn. 18 countries have so far issued them, including assorted entities: supra-nationals,
corporates and municipal authorities. But standards need raising; what is green? The
raised money, the investor is told, must be spend on projects or investments with a
positive environmental impact. What does this mean? Big insurance companies claim
that they are already very much aware of their exposure to climate stress, from
extreme weather events to droughts and regular flooding. Green bonds suit insurance
companies, positive effect should be more than just side effects and communities
might be made more resilient. Investment must be profitable. The World Bank is
now working with others to build standards for green bonds, but others institutions
are not required to follow this lead. There is the matter of transparency which applies
to the WB, but which not all investors like. Also, there is no agreement on what
counts for greener for the purposes of each case, its up to the investor Investors
can be helped by an NGO Climate Bonds Initiative that helps the WB with a data
bases, certification standards and promoting conversations around these. Green is not
black or whiteEven among climate scientists there is no agreement, according to Mr
Lewin head of responsible investment at Zurich Insurance Company. (Cited in FM 9
March)
Renewables: Sunny Future Predicted by Some
Alex Thursby, CEO of NBAD, writes in the foreword to his report: Some of the
reports findings may surprise you. For example, renewable energy
technologies are far further advanced than many may believe: solar photovoltaic
(PV) and on-shore wind have a track record of successful deployment, and costs
have fallen dramatically in the past few years. In many parts of the world,
indeed, they are now competitive with hydrocarbon sources. (Oilpricecom
March)
Some predicts that by 2020 offshore wind will be cheaper than gas- and coalfired power (onshore wind already is) and promises that in solar we will present
something totally disruptive in November. Some people still believe that
renewable energy is a costly European (German) hobby.
As Giles Parkinson of the Australian website Reneweconomy reports, just
recently one of the biggest banks in the Middle East, the National Bank of Abu
Dhabi, has come out with a report showing that fossil fuels can no longer
compete with solar technologies on price. It also says that the vast bulk of the
$US48 trillion needed to meet global power demand over the next two decades
will come from renewables.
Dont Repeat Mistakes
The shale genie is now out of the bottle. Even if the current low price drives out some
high-cost oil producersin the North Sea, Canada, Russia, Iran and offshore, as well
as in Americashale drillers can step back in whenever the price rebounds. As Mark
Hill of Allegro Development Corporation argued, the frackers are currently
experiencing their own version of Moores law: a rapid fall in the cost and time it takes
692
to drill a well, along with a rapid rise in the volume of hydrocarbons they are able to
extract. And the shale revolution has yet to go global. When it does, oil and gas in
tight rock formations will give the world ample supplies of hydrocarbons for decades,
if not centuries. Lurking in the wings for later technological breakthroughs is methane
hydrate, a seafloor source of gas that exceeds in quantity all the worlds coal, oil and
gas put together.
So those who predict the imminent exhaustion of fossil fuels are merely repeating
the mistakes of the U.S. presidential commission that opined in 1922 that already the
output of gas has begun to wane. Production of oil cannot long maintain its present
rate. Or President Jimmy Carter when he announced on television in 1977 that we
could use up all the proven reserves of oil in the entire world by the end of the next
decade. (Excerpt Matt Ridley /GWPF 14 March)
On the Benefits of Low Oil Price
Low oil prices are good for the government, but not so good for the oil majors. Italian
oil giant Eni became the first of the oil multinationals to slash its dividend due to low
prices and also moved to suspend its share buy-back plan. Eni announced plans to pay
0.8 euros per share rather than the 1.12 euros it paid out in 2014. The move was not
taken well by investors the companys stock tanked by nearly 5% on the
announcement. Still, CEO Claudio Descalzi put on a brave face, claiming that he was
building a more robust Eni capable of facing a period of lower oil prices. The
dividend has long been prioritized by the oil majors, needing to be protected at all
costs..OPEC released its monthly oil market report on March 16, in which it argued
that North American shale will face a contraction later this year. However, the oil
cartel also saw some production declines for the month, as Libya, Iraq, and Nigeria
continue to struggle with violence and low oil prices. Libya, in particular, is facing a
crisis. Spain raised the prospect of a European Union embargo on Libyan oil if the
countrys two political factions did not make headway on peace. Cutting off Libyas
only economic lifeline almost certainly would not bring a swift end to political
impasse in Libya, but the EU is clearly becoming impatient with the ongoing violence
just across the Mediterranean. (Oilpricecom 19 March)
Russia and Low Oil Price
Russian President Vladimir Putin re-emerged from a 10-day absence that fuelled
many-a-rumour speculation ranged from a palace coup, to a secret birth of a child,
even to some wondering whether the Russian President met an early demise. The
Kremlin offered no explanation, but Putin appeared to be just fine. Despite his
seemingly good health, the Russian economy continues to buckle under the weight of
low oil prices. And that, according to Bloomberg, has Putin increasingly angry at a
once close ally: Rosneft head Igor Sechin. Putin is reportedly blaming Sechin for
rising debt at the state-owned oil firm, perhaps stemming from the purchase of TNKBP in 2013. Also, his role in borrowing billions of rubbles that sent the currency
plummeting in December 2014 has raised the ire of the Russian President. There are
rumours that Sechin could be on his way out, but those reports are unconfirmed.
Nevertheless, the fraying of the relationship suggests low oil prices are taking a toll on
Fuel for Thought
693
Putins inner circle. (Oilpricecom 19 March)

How the US Shale Revolution Changed the World
Oil producers praying for relief from low oil prices might take heart from the lost jobs
and idled rigs in the US. But the American strengths that made the boom
entrepreneurial culture, depth of knowledge in oil and gas, innovation and supportive
capital markets are now being deployed to keep it alieve. Recent history suggests it
would be rash to bet against them.Consumers enjoying lower fuel prices resulting
from the US shale boom should watch out for the turbulence following it its wake. (Ed
Crooks Oil Crash, FT Weekend Magazine 25/26 April)
BP and Fridman Trying to Buy into the North Sea
Background: In 2008 BP effectively ceded control of TNK-BP to M. Fridman and
AAR (Alfa-Access-Renova when Dudley left Russia and then in 2011 did a share
swap and Arctic exploration deal with Rosneft, something AAR tried to stop, the UK
High Court later agreed an blocked the BP-Rosneft tie-up; a little later Rosneft did the
same deal with ExxonMobil Within month TNK-BP was acquired by Rosneft and
Alfa got $14bn in cash BP also did very well out of this, it had earned $19bn in
dividends over the life of TNK-BP and came away with $12.5bn in cash and a 20%
stake in Rosneft, all for an initial $7.5bn. (G Chazan and J Turnbull, The Alpha
Oligarch FT 6 March)
Summary: Oligarch and Putin friend Fridman tried to buy Dea from RWE in the
North Sea, but was opposed by the UK Government and eventually gave in:
The Economist advises the UK government to be a bit nicer to foreigners
wanting to risk their cash in the North Seas bracing climate. Lord Browne, with
whom he has a long tussle over TNK, described Fridman as a superb
negotiator A bigger worry, says the Economist, should be the future of the
North Sea where oilmen are not encouraged. (7 March)
RWE posted a net loss of 2.8bn for 2013 but decided against a split unlike Eon
but is slashing costs and selling exploration and production unit Dea, to oligarch
Fridman who is opposed by UK government (FT 9 March)
On March 11 RWE is reported to have warned that a power glut will lead to a
sharp fall in profits as coal generation was being undercut by subsidised
renewables. Fossil fuel power plants were no longer making profits with
renewables now account for a quarter of Germanys power output. Eon is
splitting up and RWE is also investing in renewables with an emphasis on wind
farm and growth in energy technology such as the Nest thermostat, selling in
UK since 2014. RWE has been cutting jobs and selling Dea to Russian
billionaire. (FT 11 March)
Fridman bows to pressure and offers his North Sea gas fields acquired from Dea
(RWE) for 5 bn. The fund that owns Dea, L1 Energ run by Lord Browne
believes that a legal case (against UK government) is robust but would be
expensiveno final decision. (FT 18 March)
694
BP Going Green Again?

BP is reported to be urging policy-makers to put a price on carbon. (EF 24
April)
BP is selling a major North Sea asset a stake in the Central Area Transmission
system (gas pipeline) to Astin Infrastructure Partners, a private equity firm. as
it continues to wind down its exposure in the oil and gas basin that is grappling
with the collapse of crude prices but remains committed in spite of
divestment. Massive restructuring is under way. BP remains one of the biggest
investors in the North Sea. (FT 24 April)
Falling Cost of Solar is Solace
Even in the Arab world solar power is becoming attractive in spite, it is claimed of
plentiful hydrocarbons and heavy subsidies. Experts and investors are said to believe
that solar power could become an important contributor. The main reason given is
the 75% drop in the 75% costs solar panels during past 5 years meaning that the cost
of solar electricity has halved since 2010. However, the expert quoted is the president
of Saudi Arabias ACWA one of the regions biggest renewables developers, part of
consortium with the Spanish engineering company TSK which has already made a
land-mark deal with the Dubai Electricity and Water Company to finance , build and
operate a 100 MW PV plant in the emirate. Even with oil is down to $20 a barrel, it is
argued, solar power will soon make economic sense in the Arab world.
Unsurprisingly, the Middle East Solar Industry Association plans for a 1,8oo MW
project worth $2.7 bn by perhaps 2020, with Jordan already planning to obtain 10% of
its power from renewables by 202, and Morocco having the most ambitions clean
energy target, hopes to increase its solar capacity through CSP, concentrated solar
power with a generating capacity of 160MW expected later this year. The Director the
International Renewable Energy Agency is also hopeful, believing in growth through
public agencies in spite of the fall in the oil price. The political will is there. (S Jenkins.
Investing in the Arab World Report FT 31 March)
NB: Youth unemployment in the region is large, for the under 25s it remains at 25%.
Boosting Renewables
This topic dear to The Economist reports that investment in wind and solar
power rose by a sixth last year to $270 bn partly because of tax credits i.e.
subsidies in the rich world. America offers 30% tax credit for solar power. Large
installations make more commercial sense than small ones, with half solar
investment now made in China because of worries about energy security rather
than climate. Also, investor now get more energy per dollar and the cost of
battery storage has fallen sharply. (Economist 11 April)
However the outlook for biofuels is less rosy; investment is dwindling and
scepticism is growing; some companies are giving up. Several algae-to-fuel
ventures in USA are switching to the manufacture of high-value chemicals and
only two advanced fuels - turning waste cooking oil and other fats into diesel ,
and making ethanol from cellulose by enzymatic hydrolysis, are still capable of
large-scale production. According to new EU rules recently agreed by EU
Fuel for Thought
695
Parliament, the use of first generation biofuels must be capped to prevent

hurting food supplies. However, there is no shortage of bright ideas, some
involving genetic modification, in the biotech research sector. (Economist 18
April)
The question of state support for ethanol (Federal renewable fuels standards RFS) is no longer a party political issue in US. [American petrol must contain
10% ethanol made mainly from corn, to the delight of the farming lobby, but
there has been opposition, especially from Democrats and people worried about
global poverty.] Now even some Republicans now call for a 30% ethanol
standard for petrol to free the US from dependence on foreign oil. In 2013
Obama proposed relaxing these standards; now even Mrs Clinton who once
voted against RFS, is in favour of keeping the 10% regulations. (Economist 25
April)
Who Benefits from Coal Divestment?
Youve got to hand it to Alan Rusbridger: hes a great contrarian indicator. The
editor of The Guardian launched his valedictory campaign to demand
divestment from fossil fuels with a wrap-around promotion and the papers full
moral force. The usually left-wing Guardian was going out of its way to help the
plutocrats make money, a job usually reserved for us here at the FT. Investors
should have listened, thanked Mr Rusbridger, and done the exact opposite. It
turned out he was a perfect contrarian indicator. He picked a six-year bottom in
the US benchmark oil price, West Texas Intermediate. He lit a carbon-based
bonfire under crude prices: WTIs now up 30 %, the biggest rally over such a
short period since 2009 (and before that, 2002)If the [fossil fuel] divestment
campaign succeeds, the example of tobacco shows the likely effect. As a sector
its been shunned by many investors for a long, long time, while demand from
addicts around the world has held up nicely. As a result, tobacco shares have
been the best-performing investment over the past century for those willing to
buy in (the same applies to lots of sin stocks: a higher cost of capital implies
a higher return for those who supply the capital). (James Mackintosh, Financial
Times, 27 April)
What may Prince Charles gain from jumping on this bandwagon? The FT is
certainly a strong supporter having surveyed the scene in UK, which is imitating
developments in USA. Six universities have joined, as have charitable trusts and
the British Medical Association. The Church of England still holds shares in
Anglo-American, Shell and BP. On opposite page in TF, Total asks for
substantial investments in the cleanest fossil fuel, natural gas. (FT 27 April)
The divestment movement gathers pace, according to Chris Flood, with climate
change a top priority, and Dutch pensioners now following the Church of
England as well as numerous universities, especially in the USA. In California
lawmakers are considering whether to require two pensions funds to divest
from coal-related investments The FTSE launched ex-fossil fuel indices in June
2014 and retail investor focused vehicles are under discussion in US. Women
and the young are most likely to divest from coal. (FT 4 May)
696
UK Green Energy Promoting Politician Makes Money: Tim Yeo (South Suffolk)
Remunerated directorships: AFC Energy; company developing alkaline fuel cell
technology. Remuneration to date has included 2.5 million share options. (Updated 21
January 2013) Last: Received payment of 3,350, 14 February 2014. (Registered 13
March 2014)
Remunerated employment, office, profession etc. Adviser to Edulink Consultants;
providers of education services in Dubai and Uganda. Address: PO Box 500697,
Dubai, UAE. I advise on the running of Victoria University, Kampala, where I am
Chair of the University Council, including advice on academic standards, marketing
and the development of the curriculum.
Payment of 7,500 on 4 September 2014. Hours: 20 hrs. (Registered 29
September 2014)
Adviser to Meade Hall & Associates, 1 Meade Mews, Causton Street, London
SW1P 4EG, a strategic communications consultancy. I advise on matters
relating to the construction of new nuclear power stations in Europe. Last
Payment of 8,000 on 6 October 2014. Hours: 35 hrs. (Registered 14 October
2014)
Donor: Waste2Tricity Ltd. Amount of donation (or estimate of the probable
value): fares and accommodation at a total of 3,500, of which the air fare was
approx. 2,700 Destination of visit: Bangkok. Purpose of visit: fact-finding trip
to learn more about the energy from waste sector in Thailand.
Registerable shareholdings (a) Anacol Holdings Ltd.; a family investment company;
(b) AFC Energy (shares and share options); Eco City Vehicles plc. Shareholding below
registerable value in Eco City Vehicles plc; distributes and services London taxis.
Miscellaneous: Unremunerated director of ITI Energy Limited; suppliers of
gasification equipment. I have not received any financial benefit from this
directorship. From Register of Members Financial Interests: Part 1 as at 9th March
2015. (Excerpts, Paul Homewood 10 March)
CLIMATE SCIENCE AND SCIENCE POLITICS;

Remote Sensing Systems have shown no global warming at all for 220 months,
from Dec. 1996 to March 2014. Other research shows that the av. surface
temperature of the Earth is only 0.8C warmer than that recorded in 1900
which may be down to natural variability.
Versus
Even if CO2 emissions remain as they are today, we will still go over the 2C
target. Uncertainty in our knowledge just means we cant tell exactly when but
it will likely occur between 2040 and 2060. (Foster and Peiser Daily Express 22
April)
There is a greenhouse effect, it is enhanced by additional CO2 but the sensitivity
of the surface temperature to CO2 is small. There is no need to worry for the
climate even if every last tonne of fossil fuel is burned. (William Kininmonth)
Fuel for Thought
697
Remember the Hockey Stick?

The hockey stick eliminated the Little Ice Age (LIA). It was problematic to their
human induced warming hypothesis because it preceded their modern instrumental
record and indicated warming was primarily due to emergence from the nadir starting
circa 1680. They (IPCC?) wanted an increase but only during the period they could
control, namely the instrumental record of approximately 120 years. Jones produced
this in the blade of the hockey stick with the claim temperatures increased 0.6C over
this period, which he said was beyond the range of any previous increase and therefore
caused by humans. It was as ridiculous as the rest of the hockey stick because the error
range on his data was 0.2C or 33%. (Tim Ball 16 March)
Why the Hiatus? Damning Study Challenges CO2-Temperature Relationship
The ongoing global warming hiatus, per satellite measurements, surprised
climatologists because computer climate projections never indicated a short- or longterm reprieve. Scientists anticipated temperatures to move in tandem with steadily
increasing levels of CO2 which didnt happen and nevertheless they insist that
its only a matter of time before warming re-emerges. Thats what the data reveals.
According to NOAA, the data also shows that global carbon dioxide measurements for
the last seven days average around 400 parts per million, up from 380 ppm during the
same period in 2005. Without question, CO2 measurements continue to climb, which
begs the question: Why havent temperatures? A damning new study reinforces what
sceptics have long suspected: The relationship between the two isnt as clear-cut as
were led to believe. In what would otherwise be labelled a game changer outside
the mainstream media, The Daily Caller writes, A study by scientists at Germanys
Max Planck Institute for Meteorology found that man-made aerosols had a much
smaller cooling effect on the atmosphere during the 20th Century than was previously
thought. Why is this big news? It means increases in carbon dioxide emissions likely
cause less warming than most climate models suggest. The study is even listed on the
American Meteorological Society website. As significant as the finding is, however,
expect the study to receive the same conniving response from man-made global
warming evangelists as do sceptics offering their viewpoint. (Al Pekarek 3 April)
Salby Brings Good News: CO2 Emitted because of Rising Temperature?
Professor Salby addressed German scientists and, according to EIKE. Used strict
methodology supported by observation to show that atmospheric temperature is
primarily (80%) responsible for the emission and concentration of CO2 in the
atmosphere. Not the reverse. The remaining 20% are mainly due to atmospheric
moisture. Together they act on the biosphere and other sources and sinks of CO2. Also
CO2 remains in the atmosphere no longer than 2-7 years. (EIKE 13 March)
http://www.eike-klima-energie.eu/news-cache/neue-studie-zur-CO2-konzentrationanthropogener-anteil-irgendwo-zwischen-0-und-max-30-vortrag-von-prof-murrysalby-am-13315-in-essen/
698
A Scientific Conclusion
And any CO2 emissions reduction is unlikely to be useful to control climate. From ice
core records for our current benign Holocene interglacial it is clear that the previous
millennium 1000 2000 AD was the coldest in the last 10,000 years, some 3.0C
lower than the Holocene climate optimum, ~9000 years ago. At 10,000 years old our
current benign Holocene interglacial is now long in the tooth. That would seem to
point to a coming real glaciation either this century, next century or in this millennium.
That in combination with the current Dalton minimum solar characteristics means that
real cooling as opposed to warming is more than likely to be imminent. Any future
cooling is likely to make any warming, whether man-made or not, that occurred in the
late 20th century look wholly beneficial but trivial and entirely irrelevant. (Ed
Hoskins/essay in WUWT 13 March
Snippets from the Discussion
Complaints Roy Clark .The Earth stopped warming some 18 years ago and is now
starting to cool back towards another Little Ice Age. In addition to fraudulent climate
models, the process of homogenization and averaging used to produce the global
climate averages from the weather station data has been used to create additional
warming in the climate record. At least half of the surface temperature warming
is a result of fraudulent homogenization. This is a complete disgrace. The APS
[American Physical Society] has been fooled by climate astrology and bribed to
abandon the Second Law of Thermodynamics in favour of environmental alchemy. All
of the IPCC reports should be rejected and a scientific and criminal fraud investigation
conducted into the IPCC. Global warming/climate change/climate disruption is a
multi-trillion dollar fraud. (Roy Clark to Climatesceptics 9 April)
Comments Stephen Cell: I would probably be classified by Arthur as Opinion 2,
that absorption of IR by gases in the atmosphere does increase its temperature above
what it would be without those gases (if the atmosphere only contained nitrogen and
oxygen, without water vapour or carbon dioxide), but that the incremental effect of
human emissions of CO2 have only a minor incremental effect, and that there are
strong negative feedbacks that would prevent runaway warming. There are sound
scientific reasons for this opinion. First of all, water vapour is a much stronger
absorber of IR radiation than CO2, over a much wider range of wavelengths, and the
concentration of water vapour in the atmosphere is about 10 to 60 times that of CO2
(depending on temperature and humidity). This means that any absorption of IR
radiation by CO2 is overwhelmed by that of water vapour. The warming effect of
water vapour on the atmosphere has been estimated as about 30 C, but since 70% of
the Earths surface is covered by liquid water, there will always be evaporation of
water from the oceans, followed by clouds and rain over land, and the average water
vapour content of the atmosphere is unlikely to change.
Secondly, CO2 absorbs IR radiation very strongly over a narrow band of
wavelengths between about 13 and 17 microns, and is nearly transparent elsewhere in
the IR spectrum. At the current concentration of about 400 ppm, as demonstrated by
Jim Barrante, over 95% of the available energy in that band of wavelengths is already
absorbed within 100 meters of the Earths surface, so that if the CO2 concentration
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were doubled due to human emissions, the additional energy absorbed would be only
a few percent of the energy in that band of wavelengths, and less than 0.1% of the
energy over the entire IR spectrum (most of which is already absorbed by water
vapour). The incremental energy absorption by additional CO2 is therefore minimal.
Thirdly, most of the AGW protagonists (Opinion 1) theorize that a warming of
the atmosphere would occur at constant relative humidity, and the additional water
vapour in the atmosphere would absorb more IR radiation (at wavelengths outside the
CO2 absorption band) and amplify the warming effect of CO2. But maintaining
constant relative humidity while increasing the air temperature requires evaporation of
water into the atmosphere, which requires heat transfer from the air to liquid water. .
his strong negative feedback is probably enough to prevent thermal runaway due to
CO2 emissions alone.
Fourthly, the AGW protagonists use computer models to predict the future
temperature of the atmosphere, and automatically assume that the temperature of the
Earths water and ice will follow that of the atmosphere, resulting in (according to
them) massive melting of ice caps in Antarctica and Greenland, which would flow into
oceans and raise sea levels, causing massive flooding of coastal areas. But it is wrong
to assume that the temperature of the Earths water and ice will automatically follow
air temperatures. About 3,000 times more heat is required to warm 1 cubic meter
of water by 1 C than to warm 1 cubic meter of air by 1 C, and about 240,000 times
more heat is required to melt ice to 1 cubic meter of water, than to warm 1 cubic meter
of air by 1 C. Even if, in an extreme case, the global average temperature of the
atmosphere were to increase by 5 C, transferring the heat to oceans and icecaps would
result in a negligible sea level rise. This is borne out by the fact that Global Climate
Models (GCM) run using 1979 as a starting point baseline have over-predicted the
actual temperature rise thus far by a factor of 2 to 4. Until the models can be tuned
or adjusted so that they can accurately simulate the past (1979-2014), there is no
reason to believe that they can accurately predict the future. ..The goal of science is to
observe nature and develop theories that model its behaviour, so that this can be
harnessed for the benefit of mankind. But if nature (reality) does not follow a theory
designed to instil fear among the general public, the theory needs to be changed.
(Steven Zell 8 April)
Comments David Burton: Atmospheric CO2 is like food colouring or ink in a tub
of water, with the tub of water sitting outside in the sunshine. In other words, CO2 in
the atmosphere is a dye. It colours the atmosphere in non-visible parts of the light
spectrum, but it greatly affects the passage and absorption of light at those
wavelengths. The reason that additional CO2 has only a small GHG effect is not
because theres so little of it, it is because there is already so much of it in the
atmosphere! For a very in-depth, authoritative treatment of this subject, I recommend
Princeton Physicist Will Happers UNC lecture about the IR absorption and emission
characteristics of CO2:
Shaming The Royal Society?
This is far cry from the motto of British Royal Society nullius in verba (do not
swear by the words of any [master]), adopted when it was founded in 1660. [It has now
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disappeared from its home page.] In the chapter 10 (of his book) on scientific integrity
the matter of Sir Paul Nurse, Nobel laureate for the discovery of an important
biochemical process, Secretary General of the prestigious European Molecular
Biology Organization, President of the Royal Society, at the occasion of his election
to President of the British Science Association, is examined. Nurse gave an interview
(September 2014) with the headline Climate sceptics should be crushed and buried.
It caused a row among climate sceptics in Britain but Nurses attack was somewhat
misunderstood. It did not concern the sceptical scientists as such, but local politicians
who give an ear to these sceptics.
I approached this President with a question: Are you yourself familiar with the
molecular physical theory of the behaviour of gasses which absorb and emit in the IR?
Have you any knowledge of meteorology, climatology and the applied modelling in
the fields? He avoided an answer but was kind enough to respond by returning email: I am afraid that the press reports you have read misrepresented my position.
What I said was that one of the dangers facing science was public figures distorting
science for political, ideological and religious reasons. When asked by a journalist
how they should be dealt with I said that scientists should work with them to explain
the science and correct their distortions. When asked if they ignored that repeatedly
I made the point that they should be strongly criticized indicating that, as history has
shown, in the end the evidence will bury such distortions. I cannot imagine that you
disagree with that position
I could not, especially not when Nurse continued his explanation with: I have
criticized those who refuse to accept the evidence and those who overstate the
evidence. What makes Nurse believe that the current mainstream view for
evidence of man-made global warming (AGW) is better than the evidence presented
by sceptics which throws doubt on the thesis? He confirms in fact that it originated
from the consensus culture developed under the guidance of the political movement of
the UN panel IPCC. Should we not need to reconsider the value of supposed scientific
integrity from that point of view, making sure that also famous scientists who feel
inclined to make strong public statements are obliged to give adequate answers to the
Arons questions, especially when beyond their own expertise in a particular
discipline? We cannot expect by definition that well-known scientists will be able to
judge thoroughly the quality of the work of colleagues in other disciplines, but anyone
should be able with the above questions at hand to recognize when we may suspect
serious mistakes in the application of the scientific method as formulated above.
The most fundamental error is to mistake the hypothesis for an explanation of a
phenomenon which is in essence the basis of scientific criticism on the anthropogenic
global warming concept. Scientists who are especially involved in environmental
research will certainly argue that care for the environment should also be seen as part
of scientific integrity in a wider sense than what is just expressed in rules, procedures
and protocols. Should we dare to assume that scientists who are critical of
particular methodologies in the environmental sciences, e.g. the post-normal science
approach, show a lack of integrity of any kind? In political disputes about
environmental care in which scientists also participate, the complaint can be heard that
the neglecting of environmental threats may be due to extreme liberalism that is the
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request for absolute freedom to behave as you like. However, this was not the
meaning of the bearing of the liberalism advocated by Bertrand Russell. Russells plea
for liberalism (in science and education) concerns the basic Socratic advice: Do not
be too strongly convinced of your own view. (Arthur Rorsch to Climatesceptics 16
March)
Opinions Differ Greatly Among Sceptics
It may be useful to define the different opinions in the AGW discussion in some more
detail. .
Opinion 1. AGW protagonists adhere to the view that the earths greenhouse effect
is caused by radiation processes inside the troposphere. It based on the greenhouse
gas theory revived after the Villach conferences 1980, 1985 and in 1989 propagated
by the WMO as the exclusive paradigm. The theory includes that there are
especially positive feed-back mechanisms active when CO 2 concentration
increases. This leads to the assumption that run away effects must be foreseen.
Opinion 2. That of AGW antagonists, also named luke-warmers, who accept the
greenhouseGAS theory, but are of the opinion that under the pressure of the IPCC
indoctrination the effect of the gasses is exaggerated and that possible negative feed
back have been neglected.
Opinion 3. That of extreme AGW antagonists, sometimes called slayers, who do
not believe at all in the greenhouseGAS theory; who think the gas theory is bluntly
nonsense and who base their opinion that any greenhouse effect shown by the
troposphere, can be explained in other ways than by IR absorbing and emitting
gases. During the disputes over the last decade I think I can recognize an additional
Opinion 4. This is adhered to by many geologists, astronomers, physicists and
process engineers, with a view on the effect of IR absorbing and emitting gases in
between 2 and 3: They may have an effect but it is not significant and we still lack
proof to take a position.
I belong to the group with opinion 4. It seems to me highly unlikely that a minor
component in the atmosphere like CO2 could have a strong effect on the complex
atmospheric system in which many forces, who influence each other mutually, are
active. The more I listen to arguments presented by group 1 to 3. I feel inclined to join
group 3, despite the fact I feel pretty sure that some of their arguments are poor. To
continue to adhere to a greenhouseGAS theory, seems to me to be even more poorly,
because of current observations, and especially the way these observations are being
interpreted in the light of peoples pet hypothesis. We should continue this discussion
by providing answers to three major questions, formulated by Aarons in Marks of
Scientific Literacy, in Teaching Introductory Physics (New York: John Wiley and
Sons, 1997), 345-6.
http://people.westminstercollege.edu/faculty/pconwell/teaching/mark_of_sci_literacy.
pdf
How do we know?
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Why do we believe?
What is the evidence for?
(Arthur Rorsch to Climatesceptics discussion group 8 April)
A Message from Fred Singer
http://news.heartland.org/newspaper-article/2015/04/14/good-science-prevailsrenowned-scientist-fred-singer-talks-climate-chan is worth reading, and re-reading a
couple of times... Youre quire correct; there is indeed a wide variety of scepticism
among scientists, ranging from those who are lukewarmers who go along with IPCC
except to say warming is no big deal, to those who deny the existence of a greenhouse
effect. My position is somewhere in the middle. I accept the theoretical existence of a
greenhouse effect. In other words, I recognize carbon dioxide, water vapour, and other
gases in the atmosphere can absorb infrared radiation and have a potential effect on
climate. On the other hand, I am not convinced these effects really exist to any
appreciable extent, so I am definitely not a lukewarmer, but I am not a denier.
A Promise to Lord Monckton
One of the IPCC lead authors in Tasmania interrupted my talk when I showed the full
Bode graph and said: Have you published this? No, I replied. But you must, he
said. This changes everything! Yes, I said, I rather think it does. If the Bode equation
is inappropriate for loop gains >1, then it may also be inappropriate for loop gains <1.
It may at least in its unmodified form be the wrong equation altogether. And
without it one cannot get away with claiming the absurdly high and unphysical
sensitivities the IPCC profits by asking us to believe in. (Brief excerpt from Chris
Monckton: Where the complex climate models go wrong. (WUWT 16 March)
Rahmsdorf Discredited?
The FAZ then writes that, An independent expert assesses the estimation skeptically,
adding: Climate scientist Martin Visbeck of the GEOMAR Helmholtz Centre for
Ocean Research in Kiel sees Rahmstorfs interpretation of the results critically: The
studys focus on the sub-polar part of the Atlantic and the spectral analysis are
interesting, he says. But there are other AMOC assessments that point to a completely
other development. The paper does not offer any strong indication of the development
of the AMOC during the past fifty years. When a warmist dismisses another
warmists science, then you know its likely pretty slipshod. (WUWT 24 March)
UK Met Office: The Big Myths That Need To Be Exploded
When searching ancient climate records for parallels with the current situation,
scientists point to the handful of instances where the Earths temperature shifted
quickly because of surges in CO2 linked to volcanic activity. Such rapid warming
events are often linked in the fossil record to mass extinctions. In common with
naturally occurring sudden global temperature changes, scientists can explain the
warming observed this century only by factoring in the large rise in CO2 emissions
linked to human activity rather than volcanos. The sun is ultimately responsible for
warming the Earth, so it seems reasonable that changes in solar activity would
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influence climate. But can changes observed in the sun explain global warming?
Scientists dont think so. The suns activity rises and falls roughly on an 11-year cycle,
while temperatures have been rising steadily for a century. If you just look at global
average surface temperatures, there is a small effect that you can associate with solar
energy, says Prof. Jo Haigh, an atmospheric physicist at Imperial College London.
But its a very small signal that cant possibly have done more than greenhouse gas.
(Grantham Institute 5 May)
The Arctic is Only Melting IF.
As HH Lamb wrote in 1982:
The cooling of the Arctic since 1950-60 has been most marked in the very same
regions which experienced the strongest warming in the earlier decades of the
20thC, namely the central Arctic and northernmost parts of the two great continents
remote from the worlds oceans, but also in the Norwegian-East Greenland Sea.A
greatly increased flow of the cold East Greenland Current has in several years
(especially 1968 and 1969, but also 1965, 1975 and 1979) brought more Arctic sea
ice to the coasts of Iceland than for fifty years. In April-May 1968 and 1969, the
island was half surrounded by ice, as had not occurred since 1888. Such sea ice
years have always been dreaded in Icelands history because of the depression of
summer temperatures and the effects on farm production.. The 1960s also saw
the abandonment of attempts at grain growing in Iceland, which had been resumed
in the warmer decades of this century after a lapse of some hundreds of years
To draw any conclusions about Arctic ice or temperatures, using data that begins at the
coldest point of the cycle is utterly worthless and grossly misleading. But this is
climate science we are talking about. (Paul Homewood 15 and 16 April)
Is Global Average Temperature a Meaningful Concept?
Abstract
Physical, mathematical and observational grounds are employed to show that there is
no physically meaningful global temperature for the Earth in the context of the issue
of global warming. While it is always possible to construct statistics for any given set
of local temperature data, an infinite range of such statistics is mathematically
permissible if physical principles provide no explicit basis for choosing among them.
Distinct and equally valid statistical rules can and do show opposite trends when
applied to the results of computations from physical models and real data in the
atmosphere. A given temperature field can be interpreted as both warming and
cooling simultaneously, making the concept of warming in the context of the issue
of global warming physically ill-posed. (Christopher Essex, Department of Applied
Mathematics, University of Western Ontario, Bjarne Andresen, Niels Bohr Institute,
University of Copenhagen and Ross McKitrick, Department of Economics, University
of Guelph Received 19 March)
The Role of Forests?
The existence of polar forests during the Mesozoic and Early Nenozoic era in
areas that are now tundra or polar desert unambiguously tells us that conditions
704
in the past were once considerably warmer than they are in these regions today
mild winters, usually above freezing and possibly up to 5 degrees C. with warm
summers reaching 50 degrees are suggested. Was more oxygen in the air?
(David Beerling The Emerald Planet, 2007 p.125)
Forestry, agriculture and land-use changes account for nearly 25 %of global
greenhouse gas emissions, second only to the energy sector. New research led by
Imperial College London on partially-logged tropical rainforests suggests that
these forests are probably emitting more carbon than assumed, because they
contain a high proportion of dead wood. (News from the Grantham Institute 5
May)
Shame on UK Royal Society
Five years ago, I was one of 43 Fellows of the Royal Society the first and arguably
still the most prestigious scientific organisation in the world who wrote to our thenpresident about its approach to climate change. We warned that the Society was in
danger of violating its founding principle, summed up in its famous motto Nullius in
verba or dont take anothers word for it; check it out for yourself. The reason for
our warning was a Society document which stated breezily: If you dont believe in
climate change you are using one of the following [eight] misleading arguments. The
implication was clear: the Society seemed to be saying there was no longer room for
meaningful debate about the claim that the world is warming dangerously because of
human activity, because the science behind this was settled. We hoped we would
persuade the Society to rethink this position. That document was revised so that the
uncertainty involved in trying to model the climate was admitted. But since then the
Society has become more, not less dogmatic despite the fact that since we sent that
letter, it has become evident that there is even more uncertainty than previously
thought. Carbon dioxide levels in the atmosphere have continued to rise, but since
1998 there has been no statistically significant rise in global temperatures at all.
This flies in the face of the confident predictions made by nearly all the climate
computer models that the temperature would continue to rise as it did from 1975 to
1998. More than 60 different explanations have been proposed to explain why this
pause or hiatus has happened, and their sheer number is the clearest evidence that
the system that climate scientists are seeking to model, is irreducibly complex.
Human-sourced carbon dioxide is at best one of many factors in causing climate
change, and humility given this complexity would be the appropriate stance. Yet the
Society continues to produce a stream of reports which reveal little sign of this. The
latest example is the pre-Christmas booklet A Short Guide to Climate Science. Last
year also saw the joint publication with the US National Academy of Sciences (NAS)
of Climate Change: Evidence and Causes, and a report called Resilience. With these
documents, the Society has lent its name to claims such as trends towards increasing
more extreme weather and more climate casualties that simply do not match realworld facts.
Both the joint report with the NAS and the Short Guide answer 20 questions on
temperatures, sea-level rises and ocean acidification. But a report today by the
academic council of the Global Warming Policy Foundation, which includes several
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Society Fellows and other eminent scientists, states the Society has left out parts of
the science, so the answers to many of the questions ought to be different. I have
personal experience of this selectivity. Last year, at the request of the president, I
produced a paper that urged the Societys council to distance itself from the levels of
certainty being expressed about future warming. I said it ought to have, at least, a plan
B if the pause should last much longer, so calling the models into still more serious
question. I got a polite brush-off.
The great 20th Century physicist, Richard Feynman, wrote in his autobiography:
Details that could throw doubt on your interpretation must be given, if you know
them. You must do the best you can if you know anything at all wrong, or possibly
wrong to explain it. If you make a theory, for example, and advertise it, or put it out,
then you must also put down all the facts that disagree with it, as well as those that
agree with it. This the Royal Society has failed to do. The reason for this lack of
nuance seems to be that policymakers say they want scientific certainty. As an
engineer, I find that amazing: we remain legally liable for what we say professionally,
so will always qualify our statements. But the misleading lack of qualification in the
statements made by the Royal Society and others is creating policy nonsense.
The Climate Change Act requires the UK to cut its CO2 emissions by 80 % from
1990 levels by 2050 at mind-boggling cost. Generating electricity from windmills
has contributed to electricity prices increasing by twice the level of inflation over the
last decade, with further huge rises to fund renewable energy to come. Aluminium
production is highly sensitive to energy prices, and most of the UK smelters have
closed down helping us reduce UK emissions, but also exporting jobs. No one
describes the consequence: we now import that aluminium from China, leading to CO2
emissions from shipping it here. Worse, most electricity in China is produced by coal,
not gas, as in the UK. We are exacerbating the original global problem of global CO2
emissions, yet also pointing fingers at the Chinese. We really are leading the world in
climate change hypocrisy. The project to solve the climate change problem is a
modern version of the biblical Tower of Babel.
We do not know how much the project will cost, when it will have been completed,
nor what success will look like. During my time as a government departmental Chief
Scientific Adviser, I was always aware that politicians made the final decision on any
issue on the balance of all the evidence. For this reason, civil servants are trained to
draw their attention to all the upsides and downsides of taking a particular course of
action. Those who fail to provide balance are not giving advice, but lobbying. It is
with the deepest regret that I must now state that this is the role which has been
adopted by the Royal Society. And when scientists abandon neutral inquiry for
lobbying, they jeopardise their purpose and integrity. (Professor Michael Kelly,
The Mail On Sunday 14 March 2015) who is the Prince Philip Professor of
Technology at Cambridge University and Fellow of the Royal Society;
http://www.dailymail.co.uk/news/article-2995239/Why-Royal-Society-wrongclimate-change-devastating-critique-world-s-leading-scientific-organisation-oneFellows.html
706
ENERGY POLICY AND CLIMATE POLITICS

Mr. Obama said last week that he had committed the U.S. to leading the world
in combating the threat of climate change. (Colleen McCain Nelson, The Wall
Street Journal, 27 April 2015)
Market forces alone, bereft of ethical values, cannot solve the intertwined
crises of poverty, exclusion, and the environment. (Vatican, quoted in Peter
Foster: Red-Green Alliance Captures The Vatican, Financial Post, 29 April)
No minister, not even a prime minister, can predict in our uncertain and unstable
world what may happen over the next five years. (Shirley Williams, Letters FT
1 May)
A new European electricity interconnector has been inaugurated and finance
agreed with the aim of transmitting at least 10% of power across national
frontiers by 2020 as part of the Energy Union. (Energy World April)
Global Policy
Good Riddance
Rajendra Pachauri resigned as chairman of the Intergovernmental Panel on Climate
Change (IPCC) today. It was a long time coming. As a journalist who has followed his
career for the past five years, writing enough to fill a full-length book, my assessment
of 74-year-old Pachauri is a harsh one: He has been a non-stop train wreck. Today, he
finally exited the stage. In true Pachauri fashion, his resignation letter is a two-page
love letter to himself. You wouldnt know that recent allegations of sexual assault,
stalking, harassment, and uttering threats suggest strongly that he is a longtime sexual
predator. You wouldnt know that this latest scandal has profoundly undermined the
credibility of the IPCC in the run-up to the UN climate summit scheduled for Paris in
December.
Instead, Pachauri talks about all the wonderful things that happened during his 13year reign. He refers to priceless assets and unmatched contributions. And to the
close friends and colleagues who urged him to finish his term rather than quit early.
(Neglecting to mention the calls for his resignation issued by the Sunday London
Times, the Financial Times, the Daily Telegraph, the Sunday Telegraph, and the New
Scientist over the years.) Pachauris letter talks about his greatest joy and his
sublime satisfaction. And about religion: For me the protection of Planet Earth, the
survival of all species and sustainability of our ecosystems is more than a mission. It
is my religion and my dharma.
http://nofrakkingconsensus.com/2015/02/24/rajendra-pachauris-resignation-letter/ 24
Feb) Received from Leigh Palmer 22 March )
Missed Pledges
China, Japan, Canada and Australia have missed a UN Deadline to file pledges on
cutting emissions prior to Paris meeting in December. Pledges are not expected to keep
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warming below 2C, a limit that governments agreed, should not be breached. The
USA, Mexico and EU countries, as well as Russia, Switzerland and Norway have
made pledges. The director of the European Climate Foundations campaign blamed
the non-pledgers for not divesting from increasingly stranded fossil fuel assents. (FT
1 April)
World Bank/IMF Partners on Climate Action
Taking a whole page advertisement in the FT (17 April) CEOs from 45 companies
with operations in 150 countries, in the spirit of the World Economic Forum called
upon governments to take bold action at the Paris climate conference (COP21) . to
secure a more prosperous world for all of us.we stand to work together with the
international community to help deliver practical climate solution. (Go to
medium.com/@climateCEOs. The list of companies includes HSBC, Volvo, Arup,
Deutsche Post, Enel, GDF Suez, Iberdrola, Philip Lighting, Pension Danmark,
Statkraft, Swiss Re, Unilever, Veola and The Weather Company.
Van Ypersele for Chairman: A Terrible Choice?
With the resignation of R. Pachauri as Chairman of the IPCC, the vice-Chair
since 2008 Jean-Pascal van Ypersele is looking for a promotion. In his campaign
for election he is making ritual statements about the IPCC continuing to act in a
scientifically rigorous yet policy neutral way. As Donna Laframboise puts it, an
entity that is policy neutral doesnt advocate any particular response to a given
situation. Yet Prof. Yperseles piece in The Guardian states humanity knows
it must stop ignoring the inconvenient truth of climate change, something at
odds with a UN-conducted poll of 7.2 million people ranking a climate change
deal last as a concern. Moreover, two years after he first became in IPCC
official in 2002, Prof. Ypersele got into bed with Greenpeace by coordinating a
report on how climate change might affect his home country of Belgium. As Ms.
Laframboise says about the report: In van Yperseles vision of 2044, Belgium
is in a state of emergency. It suffers from unbearable heat, drought, and overflowing morgues. The high-speed train between Paris and Berlin has derailed
because the rails have been deformed by extreme heat. The Mediterranean Sea
has flooded the Nile Delta, making Egypt a land of refugees.
http://nofrakkingconsensus.com/2015/03/16/van-ypersele-a-terrible-choice-for-ipccchairman/ (Friends of Science Extracts - 2015-03-29)
Vatican - New Ally of Green Lobby?
There was no discussion at this weeks Vatican conference en route to Pope
Franciss encyclical on climate change. Whats to discuss? Anybody who
disagrees is an apostate, destined for damnation. The important point is to stop
them bringing climate hell to earth. The event along with an accompanying
statement confirmed that the Vatican has become an arm of the godless
United Nations, and an unabashed shill for its murky Sustainable Development
Goals. The Vaticans climate change statement [Climate Change and the
Common Good: A Statement Of The Problem And The Demand For
708
Transformative Solutions], according to Foster, peddles eco-liberation theology

based on the tedious demonization of markets and capitalism. Godliness is
now to be replaced by deep de-carbonization. (Peter Foster, Financial Post, 29
April )
Republican senators view global deal to reduce emissions as executive
overreach President Barack Obama and Congress are headed for another power
clash on the international stage, as key Senate Republicans challenge his efforts
to forge a global pact on climate change. The White House considers the
agreement with nearly 200 nations a historic opportunity to reduce greenhousegas emissions world-wide. But some GOP senators view it as executive
overreach, and they are quietly considering ways to warn other countries that the
president doesnt speak for them and may not be able to deliver on his promises
to slash emissions..The GOP effort to throw up a roadblock comes as the
president pursues a lasting legacy on climate change through the international
accord. It also reignites a debate about balance of powers, with the executive and
legislative branches clashing over the limits of the presidents authority The
Wall Street Journal, 27 April 2015 Colleen McCain Nelson
Pope Francis is expected to deliver an encyclical letter on climate change, urging
the risks to be considered, in June this year. (FT 1 May)
Heartland Message to Vatican
On May 3, Jeffrey Sachs, a Columbia University professor and special adviser to
UN Secretary General Ban Ki-Moon, wrote a commentary condemning global
warming deniers that appeared on a Catholic website called Pewsitter. Since he
takes aim specifically at The Heartland Institute, a reply seems to be in order. Sachs
wrote about an event convened by Pope Francis on global warming and sustainability
at the Vatican in Rome the prior week. Observing that only alarmists and advocates of
population control most notably, Jeffrey Sachs were on the program, I decided
Heartland should send some real scientists and other experts to Rome to provide a
different opinion. Our delegation to Rome consisted of the following individuals, all
of them willing to travel a great distance on short notice and participate without
honoraria:
E. Calvin Beisner, Ph.D., national spokesman for the Cornwall Alliance for the
Stewardship of Creation
Hal Doiron, former NASA Skylab and Space Shuttle engineer
Richard Keen, Ph.D., meteorology instructor at the University of Colorado
Christopher Monckton, chief policy advisor to the Science and Public Policy
Institute (SPPI)
Marc Morano, executive editor and chief correspondent, ClimateDepot.com
Tom Sheahen, Ph.D., vice chairman of the Board of Directors of the Science and
Environmental Policy Project (SEPP)
Elizabeth Yore, J.D., former general counsel at the National Center for Missing
and Exploited Children in Virginia.
(Heartland Institute 8 May)
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Financial Times Promotes Global Carbon Price to End the Climate Gamble
1. Carbon pricing has been called for by one of the worlds biggest traders of
agricultural commodities Olam of S pore, alleging that because carbon is free,
we use it indiscriminately. This was announced at the FT Commodities Global
Summit where rising populations, water shortages and genetically modified
crops (a good thing) were also discussed. Olam gas spend 6 years mapping its
own global carbon footprint and stated that half its profit came from the benefits
of nature. Climate change was seen as one of six developmental challenges for
global agriculture, the others being food, water, energy security, sustainable
economic growth and poverty. (Report from Lausanne, FT 23 April)
2. On Monday 27 the FTfm, s writing as Authority on Global Fund management
exposed the climate change gamble by castigating and naming corporate
schemes taking climate risks,. In fact nearly half the wolds investors were
outed by the Asset Owners Disclosure Project. (AODP) which reports an
extraordinary level of complacency among institutional investors. Only 9
investors received AAA ratings from AODP, which included an Australian
Local Government pension fund, KLP Norway and the UKs Environment
Agency Pension Fund. Behind this study is an associate professor at the Harvard
Business School who threatens investors with the loss of a great deal of money.
Also cited with approval is the director of the stranded assets Programme at
Oxfords Smith School of Enterprise who is quoted as saying , that climate
change and risks associated with other environmental factors are financially
material.the evidence is large and growing constantly (The asset owners)
consultants need to up their game and so do trustees.. The reported concludes
by quoting a Mr. Poulter the founder of AODP, as noting that belonging to a
group calling for divestment from risky investments is not the same as doing a
lot. (M Marriage: Nearly half worlds biggest investors heavily exposed to
environmental risks: Climate change gamble exposed. Not many of those
signing are doing a lot, says one observer. (FTfm 27 April)
Creating a Market for the Acts of God? The Reinsurance Sector May Collapse
This is the warning for the $575 bn industry to those who hope to protect themselves
from earthquakes, hurricanes and other disasters, according to Cass Business School.
This is warning of banking style meltdown is it continues to make dangerous changes
reminiscent of the 2008 sub-prime mortgage crisis. The World Bank has already issued
catastrophe bond, but so far and in general disaster insurance linked securities have
largely been confined to developed countries with investors buying at a record pace.
[Will climate change be covered soon? Even if man-made?] (FT 29 April)
Air Pollution Why Worry When?
Increasing prosperity brought better living standards and, ultimately, big moves to
clean up both air and water. Only 60 years ago, London was a city of black buildings
and recurrent smog, caused mainly by smoke from coal fires. Now, we may worry
about particulates from car exhausts, but the air is incomparably cleaner than our
parents had to breathe. Problems remain, but we have the resources to do something
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about them. So, another recent headline prompted by the same spike in air pollution
read Longer-term thinking needed on air pollution. This story makes the point that
pollution such as sulphate aerosols or carbon exhaust particulates may be a mixture of
locally-generated material and some which is blown in on the wind. It is the particular
set of weather conditions which determines whether a really bad day occurs. In
prosperous countries, a clean and safe living and working environment is a higher
priority than in poorer ones, where people have to cope with conditions Europeans
havent experienced for many decades. This same transition will happen in China,
India, Brazil and other currently low- and middle-income countries. Continued rapid
urbanisation will create more pressures, but improved technology and the availability
of more resources will more than compensate. So, it is right that we continue to
improve air quality in our cities, for the benefit of ourselves and future generations,
and economic growth will give us the wherewithal to do so. But in the meantime we
are distracted by costly attempts to reduce another form of pollution, the carbon
dioxide emissions which are deemed to be the primary driver of global warming. In
truth, the jury is still out on the degree of warming and the impact this may have, but
at the same time its very clear that CO2 is also essential for life. (Excerpt: Scientific
Alliance 17 April)
USA Policy
Obamas New Climate Policy
On March 5, OFA sent letters to various scientists, and others, over the Presidents
signature, claiming that the biggest obstacle to fighting climate change (what used to
be called global warming) is political. The letter, states the subject is Stand up for
science, and states that OFAs web site has identified certain politicians as climate
change deniers and urges the recipients to take action. A key point made in the letter
is:
We need to listen to our friends at NASA and the 97 percent of climate scientists
who agree that climate change is real, man-made, and happening right now.
Now is the time for serious action, not excuses or outright denial.
As of the morning of March 15, Eastern US time, the letter was no longer on the web
site of OFA. However, on the web site Master Resource, nuclear engineer James Rust
posted a copy similar to the one SEPP had received from another source, including the
critical sentences cited above.
SEPP reviewed three surveys that contained a phrase similar to 97 percent of
climate scientists. It found significant misrepresentation and/or manipulation by
those producing the results, after the surveys. For example, the survey published in
Eos was sent to over 10,000 geoscientists, to which over 3,000 responded. Yet, the
individuals responsible for the survey emphasized the responses of only 79. Of these,
77 were reported to be convinced that global warming was real threat and man-made.
This is not to say that those reporting the results of these surveys, or the editors of the
journals publishing the results, intended that they are used for such blatant political
purposes, which is secondary. What is of primary concern is that surveys of such low
quality are published in scientific journals and that these surveys are being used to
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promote the expansion of central government-powers. (From Ken Haapala, WUWT/

SEPP 15 March)
Interior Secretary Leaves Coal Out of the U.S. Energy-Development Equation
SNLs Christopher Coats is out with a perceptive article that notes what wasnt said
yesterday by Interior Secretary Sally Jewel in a speech on federal energy-development
priorities.
When Jewel did mention coal in a wide-ranging energy-policy presentation, Coats
reports, it was to call for reforms in a federal coal-lease program that grants Powder
River Basin coal producers a subsidized advantage. Heres what Jewel said about that:
When it comes to reform, we need to improve how we do business as a federal
government plain and simple. Part of that is making sure the American taxpayer is
getting a fair return for the use of natural resources on their public land. Coals going
to continue to be an important part of our energy mix in the future, but that government
accountability office and our own inspector general and members of Congress from
both sides of the aisle agree that the federal coal lease program needs reform.
Excerpts from the SNL article: We need to ask ourselves, are taxpayers and local
communities getting a fair return from these resources? How can we make this
program more transparent and competitive? How do we manage the program in a way
that is more consistent with our climate change objectives? (IEEFA.org, March 18)
No Fracking Pollution
New environmental safeguards have been announced for feral lands subjected to
fracking. The proposed regulations are condemned by oil and gas industry, but
government promises a an appropriate balance between health and safety and
economic growth of an revolutionary technology that has made big contributions to
the recovery, with regulators struggling to keep up The regulations cover well bores,
waste water disposal and public disclosure of chemicals used. The US is now the
worlds biggest natural gas producers. The Sierra Club is angry, all fossil fuels should
be kept under ground. (B Jopson, FT 21/22 March)This move will be closely watched
elsewhere.
Diverting Attention from Real World Problems? Earth Day Threats
Climate change is the greatest threat that faces humans today, and as a nation, the
United States must act before it is too late, declared President Barack Obama in his
2015 Earth Day Proclamation. Visiting the Everglades today, Obama said, Climate
change can no longer be denied.
On its 45th anniversary, Earth Day 2015 has gone mainstream. Across the United
States people from all walks of life engaged in enthusiastic actions to protect the planet
and voiced dire warnings about the consequences if we fail. U.S. government agencies
have entered into four collaborative landscape partnerships - in southwest Florida,
Hawaii, Washington and the Great Lakes region - to help build resilience in regions
vulnerable to climate change. (News from WASHINGTON, DC, April 22 Earth Day,
2015 (ENS)
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Witch Hunts or Culture Wars?

The three Senators sent a letter to CATO demanding information on sources for
funding for projects they do not like. CATOs Patrick Michaels posted the response by
John Allison, President and CEO of CATO, which was polite but appropriate. Prior to
becoming President of CATO, Allison was President and CEO of BB&T, a bank that
did not fall for any of the games played by federal enterprises underwriting mortgage
loans for those with poor credit (which was politically fashionable under the Clinton
and Bush administrations. Among other points, Allison cites the op-ed by Richard
Lindzen The Political Assault on Climate Skeptics which appeared in the Wall Street
Journal and was discussed in WUWT. Lindzen is now a distinguished senior fellow at
CATO. Perhaps other organizations will respond to these Senators in a similar fashion
and point out to the Senators abuse of authority. Climate change means many
different things to different people. (WUWT 7 March)
Biofuel Politics Wag the Tail: Dont Mess with RFSs
A governor and his son lobby for ethanol and expect presidential candidates to
endorse it
Talk about the Norfolk terrier tail wagging the Great Dane. If they are to have any
hope of winning their partys nomination, Republican presidential hopefuls better
support ethanol mandates, Hawkeye State politicos told potential candidates at the
recent Iowa Agricultural Summit in Des Moines. Dont mess with the RFS,
Republican Governor Branstad warned, referring to Renewable Fuel Standards that
require refiners to blend increasing amounts of ethanol into gasoline. It is the Holy
Grail, and I will defend it, said Rep. Steve King, another Iowa Republican. It is vital
for reducing carbon dioxide emissions and preventing dangerous climate change and
weather extremes, said others. Corn ethanol is big in Iowa, the March 7-8 Ag Summit
kicked off the states 2016 election debates, big-time GOP donor Bruce Rastetter made
his fortune from ethanol and hosted the event, and the first presidential primary will
be held in Iowa. Moreover, Gov. Branstads son Eric directs the multi-million-dollar
Americas Renewable Future campaign, which co-sponsored the summit and hopes to
convince increasingly sceptical voters that the federal government must retain the RFS
or even expand it. Failure to back the RFS means sayonara to any White House hopes,
candidates were told. Some cited national security as a justification. The RFS
reduces demand for foreign oil, Jeb Bush asserted. Biofuels are a way for America to
fuel itself, said Mike Huckabee. Every gallon of ethanol is one less gallon you
have to buy from people who hate your guts, Lindsay Graham added. Others focused
on allegedly unfair competition Scott Walker recanted his previous opposition and
said someday the ethanol industry wont need these mandates, but right now it needs
government assistance, because we dont have a free and open marketplace.
Bush and Santorum added that ethanol boosts corn-state economies and creates
jobs in small town and rural America. Chris Christie said the RFS is what the law
requires and we need to comply with it. Rick Perry seemed to say its time to end
federal mandates and let states pick winners and losers. Thats fine. But now that
they have bowed to the biofuel gods, kowtowed to the small cadre of Iowa corn
growers, sought the blessings of crony capitalist campaign contributors, and repeated
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the standard deviations from facts about green energy, climate change and national
security, perhaps they will pay closer attention to other candidates, and to whats
actually happening in the energy and climate arenas. Presidential hopefuls Marco
Rubio, Ted Cruz and Rand Paul remained firm in their belief that the RFS should be
phased out now. Cruz has joined Senators Mike Lee (R-UT), Pat Toomey (R-PA),
Dianne Feinstein (D-CA) and others in sponsoring bills to abolish the corn ethanol
RFS over five years. Biofuels problem is not lack of access or unfair competition.
Its that the world has changed since ethanol subsidies and mandates were enacted in
2005. Back then, people more plausibly believed we were running out of petroleum,
and global warming might become a serious problem. But then hydraulic fracturing
took off. Gasoline prices have plunged, making ethanol much less cost-competitive.
The last thing we need is more citizen cash for crony capitalist cellulosic capers.
(Excerpt from Governor and his Son lobby for ethanol and expect presidential
candidates to endorse by Paul Driessen, received 14 March)
Judith Currys on Lafayette Debates and Congressional Hearing
At the Congressional Hearing that I attended last Wednesday, one of the
Congresswomen made opening remarks that said something like Welcome to the
Science Committee, the last place on earth where climate change is still debated. Lets
face it that seems sort of true. Instead of genuine debate, we have one side shouting
denier, and the other side shouting green alarmist, and reasonable people trying to
have a reasonable discussion about the issue get dismissed with one of these two
epithets, which acts to polarize reasonable people. The House of Representatives
Committee on Science, Space and Technology Hearing on the Presidents UN Climate
Pledge has now concluded. My testimony can also be downloaded here [House
science testimony apr 15 final].
Judith Currys verbal testimony
The central issue in the scientific debate on climate change is the extent to which the
recent (and future) warming is caused by human-caused greenhouse gas emissions
versus natural climate variability that are caused by variations from the sun, volcanic
eruptions, and large-scale ocean circulations. Recent data and research supports the
importance of natural climate variability and calls into question the conclusion that
humans are the dominant cause of recent climate change. This includes:
The slowdown in global warming since 1998
Reduced estimates of the sensitivity of climate to carbon dioxide
Climate models that are predicting much more warming than has been observed
so far in the 21st century
While there are substantial uncertainties in our understanding of climate change, it is
clear that humans are influencing climate in the direction of warming. However this
simple truth is essentially meaningless in itself in terms of alarm, and does not
mandate a particular policy response. We have made some questionable choices in
defining the problem of climate change and its solution:
The definition of dangerous climate change is ambiguous, and hypothesized
catastrophic tipping points are regarded as very or extremely unlikely in the 21st
century. Efforts to link dangerous impacts of extreme weather events to human-caused
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warming are misleading and unsupported by evidence.

Climate change is a wicked problem and ill-suited to a command and control
solution. It has been estimated that the U.S. national commitments to the UN to reduce
emissions by 28% will prevent three hundredths of a degree centigrade in warming by
2100. The inadequacies of current policies based on emissions reduction are leaving
the real societal consequences of climate change and extreme weather events largely
unaddressed, whether caused by humans or natural variability. The wickedness of the
climate change problem provides much scope for disagreement among reasonable and
intelligent people. Effectively responding to the possible threats from a warmer
climate is made very difficult by the deep uncertainties surrounding the risks both
from the problem and the proposed solutions. The articulation of a preferred policy
option in the early 1990s by the United Nations has marginalized research on broader
issues surrounding climate variability and change and has stifled the development of
a broader range of policy options. We need to push the reset button in our deliberations
about how we should respond to climate change. (Slightly shortened, Judith Curry
statement of 15 April, posted on April 17, 2015 [Ed.: Best I have read on the subject]
US Policy
Michigan v EPA
This case was argued on 25 March concerns regulation of mercury, arsenic and other
toxins (not CO2). New regulations would cost $9.6billion, which is not disputed, but
the amount of harm done and who should decide, are. The Cato Institute argues against
EPA sees, sees new regulations as a Trojan horse aimed at removing regulatory power
from states to Washington. The court seems divided along liberal- conservative lines.
Should cost-benefits be taken into account before deciding to curb pollution? A
decision is expected by summer. (Economist 28 March)
The Battle over Coal Heats Up
Senate Majority Leader Mitch McConnell has taken his campaign to kill EPA cleanair rules nationally, according to the New York Times, which reports that McConnell
has made appeals to all 50 state governors. McConnell and his staff are coordinating
with lawyers and lobbying firms to try to ensure that the state plans are tangled up in
legal delays, report Coral Davenport.
McConnell is working also to undermining the presidents participation in
international climate treaty negotiations this fall in Paris: The idea is to create
uncertainty in the minds of other world leaders as to whether the United States can
follow through on its pledges to cut emissions.
Additional excerpts: Weve seen modern lobbying strategies that become a very
large campaign, coordinated with states and localities, but weve never seen a Senate
majority leader or House speaker in front of it, said James Thurber, director of the
Center for Congressional and Presidential Studies at American University in
Washington. Its quite clever. Its sophisticated and unusual.
Mr. McConnell opened his campaign on March 3 with an op-ed article published
in The Lexington Herald-Leader in Kentucky with the headline, States should reject
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Obama mandate for clean-power regulations. Mr. McConnell urged governors to

refuse to submit climate change compliance plans to the E.P.A. The majority
leader is a master tactician, said Scott Segal, a lobbyist with the law firm Bracewell
& Giuliani and the director of the Electric Reliability Coordinating Council, which
represents power companies. He understands the legal vulnerabilities, and hes
acutely aware that not all solutions go through traditional legislative channels. (J
Flood Inst. For Energy Economics 19 March)
NB: The US governments energy consumption has been lowest since 1975, bulk
of decline due to decline in jet fuel consumption by 40% and reduced use by
facilities Nevertheless the US government remains one of the largest energy
consumers in the world with 1 quadrillion Btu.
Delay South for Power Plant Climate Rule
House Republicans are preparing a bill that would delay implementation of the Obama
administrations climate rule for power plants and let state governors veto compliance
plans. Rep. Ed Whitfield (R-Ky.), chairman of the House Energy and Commerce
Committees panel on energy and power, unveiled the draft legislation Monday that he
worked on with Rep. Fred Upton (R-Mich.), the full committee chairman, and other
members. The draft bill would delay the EPAs rule until all court challenges are over
and let governors block any plans to implement the regulation whether from the
state or imposed by the EPA if they think it would significantly increase electricity
rates or harm reliability. (Timothy Cama, The Hill, 23 March)
Hydraulic Fracturing Politics
Republicans on Friday roundly rejected the Obama administrations rules for
hydraulic fracturing on federal land and pledged to fight them. The GOP warned
that the regulations will hamper the nations economic recovery that has been
bolstered by the boom in natural gas and oil production, much of which depends
on fracking. Americas energy boom is one of the best things going for our
economy, and keeping it going should be one of the federal governments top
priorities, Speaker John Boehner (R-Ohio) said in a statement. Instead, the
Obama administration is so eager to appease radical environmentalists that it is
regulating a process that is already properly regulated. (T. Cama, The Hill, 20
March)
The administrations new rules for hydraulic fracturing on federal lands will add
to the cost of shale oil and gas drilling operations and hamper an industry thats
been front and centre in the economic recovery. Given this presidents allegiance
to the environmental lobby, this may be the whole point of the new rules to
stop fossil-fuel development in order to make expensive renewable energy the
only alternative. But a new study from the Brookings Institution hardly
conservative in its orientation suggests the biggest victims of these new rules
will be the poorest Americans, wholl have to pay higher energy costs.
(Editorial, Investors Business Daily, 24 March/ GWPF 24 March)
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Opposition to Climate Deal

On March 31 U.S. President Barack Obama unveiled a major framework for
how the U.S. will reduce its greenhouse gas emissions over the next ten years.
The plan is a follow up to the landmark agreement between the U.S. and China
to bring down carbon emissions. It is also the official American submission to
the United Nations for the climate negotiations set to take place in Paris at the
end of the year. The U.S. plans on cutting emissions between 26 and 28 percent
by 2025, which is an extension of Obamas previous goal of a 17 percent
reduction by 2020. Nobody has high hopes for Paris, but what matters much
more is what each country actually does domestically. Obama has already
unleashed the EPA on the electric power sector, and new regulations set to be
finalized this summer will champion renewable energy and natural gas at the
expense of coal. (OIlpricecom.31 March)
President Barack Obama and Congress are headed for another power clash on
the international stage, as key Senate Republicans challenge his efforts to forge
a global pact on climate change. The White House considers the agreement with
nearly 200 nations a historic opportunity to reduce greenhouse-gas emissions
world-wide. But some GOP senators view it as executive overreach, and they are
quietly considering ways to warn other countries that the president doesnt speak
for them and may not be able to deliver on his promises to slash emissions.
(Colleen McCain Nelson, The Wall Street Journal, 27 April 2015/GWPF 29
April)
The Obama administrations plan for U.N. climate change talks encountered
swift opposition after its release Tuesday, with Republican leaders warning other
countries to proceed with caution in negotiations with Washington because
any deal could be later undone. Republican critics say the administration lacks
the political and legal backing to commit the United States to an international
agreement. Some observers said that resistance to the administrations climate
policies leaves foreign governments questioning whether Obamas
commitments can last. (Valerie Volcovici, Reuters, 1 April)
From a Letter to Senators
Dear Senators Cruz, Inhofe and Rubio: I am writing you as chairs of the
Subcommittee on Space, Science, and Competitiveness, of the Senate Environment
and Public Works Committee, and of the Committee on Oceans, Atmosphere,
Fisheries, and Coast Guard. I am an independent researcher who studies global
warming and climate change, and I am probably best known for my articles at the
science weblog WattsUpWithThat, where I would be considered an investigative
reporter.
I have a few very basic questions for you about climate model-based science. They
are:
Why are taxpayers funding climate model-based research when those models
are not simulating Earths climate?
Why are taxpayers funding climate model-based research when each new
generation of climate models provides the same basic answers?
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Redundancy: why are taxpayers funding 5 climate models in the U.S.?

Why arent climate models providing the answers we need?
Example: Why didnt the consensus of regional climate models predict the
timing, extent and duration of the Californian drought?
(From Bob Tisdale Independent Climate Researcher, WUWT 14 April)
EU Policy
The Global Vision: Growth, Competitiveness and Decarbonisation
Brussels vision for the Paris global climate agreement is revealed in a submission of
intended nationally determined contributions which merely reaffirm targets set in
2014, i.e. to reduce EU emissions [which ones precisely?] by at least 40% of 1990
levels by 2030. Each nation is expected to submit an INDC before summer. The EUs
final INDC is to be submitted as part of its Energy Union proposal (see below). The
EU also put out a communication giving a blueprint for tackling global climate
change beyond 2020, warning that the 1.5 0 C target is up for discussion in Paris. The
EU says it is seeking a transparent and dynamic legally binding agreement at COP21.
UK CBI sees this goal as ambitious but achievable if the right policies are in place.
A formal UN negotiating text was agreed in February in an 89 page document.
(Energy World April)
And at Home: The Energy Union - A Grand Centralising Project
The Nationalisation of Energy Policies rather than a more logical progress towards
single market has been characteristic, with the Energiewende and its lavish subsidies
as prime example, and UK supporting nuclear while Poland subsidises inefficient coal
mines. Hence the brave attempt of Maros Selcovic to negotiate an Energy Union - the
most ambitious plan since the Coal and Steel Community.. a grab-bag of policies,
promises and compromises. a political confection Some ambitions have been
lowered, there will be no single European buyer for Russian gas, and no new EU
regulator with teeth but government should stop capping prices below cost and
instead helping the poor with welfare, More cross border electricity interconnectors
are to be built. The most contentious idea is to inject the commission into negotiations
between governments and third parties suppliers (to guarantee compliance with EU
law) While the mentioning of Russia is avoided Gazprom is meant. At the moment is
can still charge Poland 40% more for gas than Germany, Hungary is opposed, others
speak of solidarity. Climate change goals are ambitions (40% emission cut from
1990 levels) but rests on the shale revolution in America which has turned the
transatlantic gap in energy prices into a chasm deterring investors and making
electricity in Europe on average twice as high as in USA second are the close ties
with Russian imports though this weapons is now weaker with increase storage and
internal distribution Hence the defensive flavour of the Energy Union A half-baked
project comparable to the banking union that only worked once EU close to
economic catastrophe. Even a unified internal market will not lead to energy selfsufficiency, but imports directions may change (good news for Turkmenistan) and a
gloomier prospect for Gazprom. But the free flow of energy, like that of people it is
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not obvious that Europeans are in the mood for a grand project. (Economist 7 March)
Emissions Trading Repaired?
The EU Parliament has voted for a market stability reserve (MSR) for CO2
emission to boost weak prices in the EU carbon market. This is meant to come
into force 2019, not 2021 as the Commission had wished, and is to boost the
price of carbon allowance to between 17 and 35 per tonne. Member States
still have to ratify. Backloaded allowances would be transferred to this reserve
rather than put back into market. 300 million unallocated allowances would be
made available [given for free] to break-through industrial innovation projects.
This means, according to industry, that the current oversupply of allowances will
be eliminated around 2023. This MRS should increase the revenue of member
states, not cost them as is likely for East European states who are opposing the
scheme. ETS has not been swiftly reformed, complained the European Wind
Energy lobby which sees the MRS agreement as suppressing carbon prices and
delaying Europes efforts to move towards a low carbon energy mix. (Energy
World April)
Important reform to revive the moribund carbon prices is expected in Brussels
once Poland and other eastern bloc countries had given up their opposition. The
Czech Republic broke ranks first making market reform almost certain The ETS
trading scheme covers 11,000 factories and companies and is described as the
largest cap-and-trade market for C02 in the world, now has a glut of 2bn surplus
allowances, but reforms are to push the price up to 40 by 2030, all seen as part
of the fight against climate change. German and the UK pushed hardest for the
reform wanting a stability reserve to be introduced as early as 2017 while
Poland relying much on coal wanted to push this back to 20121, but opponents
failed to keep the line; The Czechs broke. They were hoping to trade in
concessions elsewhere. Voting in the European Parliament is expected in July.
The current carbon price remains around 7.50, recovering slowly. (FT 1 May)
EU RED Tape Creating Energy Zombie Industry
Thus the heading in FT, citing chief of the Spanish CEO of Abengoa, one of the EUs
largest green power generators, green power suppliers are becoming living dead
because governments are taking too long to decide what energy mix they want. This
is especially true in the biofuel sector where companies do not know whether to
struggle on or shut down a decade ago subsidies and other mandates encouraged the
biofuels to create in industry worth Euro 15bn, but worries about making fuels form
crops and deforestation led to a rethink three years ago. A vote id due in the European
Parliament about continuing subsidies to biofuels, but Abengoa has already put plants
on hold in Germany. A pity, he says from a technological point of view European
companies are leading the race for clean energy. (P Clark FT 13 April)
Polish Troubles
Poland spent 0.09% of GDP on R&D, the lowest of any big EU economy but is
the blocs top beneficiary with 14 bn. Energy is still state controlled and
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described as inefficient, risk-averse and far less aggressive than global privately
held rivals in funding innovation. (FT 24 March)
Poland are pushing ahead with building more coal power plants. The energy
market information provider ICIS report: More than half of Polands new major
power generation projects to be built in the next four years will be coal-fired in
spite of strict targets imposed by the EU on its member countries, capacity
projections show. However, to lessen exposure to volatile European carbon
prices, the country is also building more gas-fired generation and new electricity
interconnections to open up opportunities for further imports of cheaper power
from neighbouring countries. While most traders and analysts polled by ICIS
admit Poland is slowly shifting away from its reliance on coal, they were at odds
over what impact the new capacity might have on the wholesale electricity
market. Some said an increase in supply will push wholesale prices down while
others argue any new investment would have to be priced in on the wholesale
market so it could be recouped. (Paul Homewood 13 April)
But - EU Member States Reassert Sovereignty over Energy Policy
European Union governments have reasserted their authority over their national
energy policies, before leaders meet to discuss the blocs plans for Energy Union on
Thursday (19 March). A more effective, flexible market design is needed that will
integrate renewables, according to draft summit conclusions, obtained by EurActiv.
Any public energy subsidies at national level must not unbalance the internal market,
the text says. But the new design should ensure the right of Member States to decide
their own energy mix is respected, states the leaked paper, which is dated yesterday
(16 March). In the weeks before the summit, diplomats thrash out a draft agreement,
which is subject to change. EU heads of state and government usually agree on a set
of political conclusions at the end of each European Council. The reference to national
sovereignty, added since the last draft, is significant. Especially as the latest
conclusions now stress that national resources can add to energy security. Energy
security can also be increased by having recourse to indigenous measures, as well as
safe and sustainable low carbon technologies, the new conclusions say. Turmes, a
Green from Luxembourg, named the United Kingdom, France, the Netherlands and
Poland as the biggest culprits among Member States jealously guarding their energy
mix. Poland, whose former premier Donald Tusk is now European Council President,
is keen to protect its coal and investigate fracking. France has an influential nuclear
industry. The UK government has agreed to expand its Hinckley nuclear power plant
and is keen to look into fracking. It also does not want to be seen as ceding any more
powers to Brussels, especially in the run up to Mays national elections. The UKs
relationship with the EU is a major issue in that vote, which could lead to a Brexit
referendum. The latest draft looks like a UK/Polish wish list for nuclear and
fracking, Brook Riley, campaigner for Friends of the Earth Europe, said. (EurActiv,
17 March)
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Towards and Energy Union?

We have agreed in Europe that we will transition to a low-carbon energy system, the
first stage of which should be reached by 2030. But there is a great deal of uncertainty
about how the system should be adapted to make a smooth transition possible.
Policymakers and regulators are uncertain about what the rules should be what they
should do to make the transition a success. Energy companies are uncertain about what
their roles will be what they should do to be successful in 2030. Specifically, they
will address the following questions:
What kind of regulations are needed to stimulate investment and innovation in
generation, distribution, interconnection, efficiency and smart technologies?
How should renewable energy be integrated into the system without
endangering security of supply?
How will the roles of established players evolve: producers, utilities, traders,
distributors, system operators, regulators? Who will the new players be?
How to keep the price of energy affordable and competitive for industry and
consumers?
(From invitation to join the Webinar-debate25 March. (Energy Post 17 March)
No Common Position in Visegrd Group
Tensions between Central Europe states Poland Hungary Slovakia and the Czech
Republic are rising over energy and how to respond to events in Ukraine. Poland is
less dependent on Russian energy than Hungary; Poland is more worried about
military security. Hungary, Slovakia and the Czech Republic are more critical of
sanctions against Moscow and in spite of the recent agreement on a common position
on the proposed energy union - that would allow to negotiate gas purchases as a bloc
- key differences remain on plans to integrate Europes energy market to which
Hungarys Orban remains opposed. (FT 20 March)
Avoiding Damage from TTSP?
The European Union is being outpaced by the rest of the world on business conditions,
a trend that hampers the economic recovery and limits future growth, according to a
study from employers federation BusinessEurope. This is calling for an energy
chapter in the proposed Trans-Atlantic Trade and Investment Partnership with the
U.S., and also supports improved interconnections between France and Spain so that
Portugal can play a bigger role in liquefied natural gas, or LNG. We need to come to
a stable situation with Russia, and at the same time we would like to diversify, Beyrer
said. Overall on energy, we have much higher political costs in Europe, he said,
citing renewable-energy policies that cause market distortion and environmental
efforts that are out of sync with global standards. If the rest of the world doesnt sign
on to the EUs ambitions for reducing emissions targets, he said it may be time for
Europe to discuss our level of ambition to avoid economic damage. BusinessEurope
is calling for an energy chapter in the proposed Trans-Atlantic Trade and Investment
Partnership with the U.S., and also supports improved interconnections between
France and Spain so that Portugal can play a bigger role in liquefied natural gas, or
LNG. EU energy prices are twice as high as in the U.S., its harder to start new
Fuel for Thought
721
companies, and the EU is the only major economy where investment in broadband
infrastructure has declined, according to its 2015 Reform Barometer report EU
governments have reasserted their authority over their national energy policies, before
leaders meet to discuss the blocs plans for Energy Union on 19 March .
Environmental campaigners fear this keeps the door open for national governments to
frack for natural gas, and mine and use other fossil fuels. (R Christie EurActiv, 17
March)
EUs Green Energy Debacle Shows Futility of Unilateral Climate Policies
Benny Peiser warns that, from the EU experience, power rates will soar while
industries depart. For the last 20 years, Europe has felt a duty to set an example
through radical climate policy-making at home. Political leaders were convinced that
the development of a low-carbon economy based on renewables would give Europe a
competitive advantage. While the EU did manage to reduce CO2 emissions
domestically, this was achieved by shifting energy-intensive industries overseas,
where energy and labour are cheap and which are now growing faster than the EU. Of
all the unintended consequences of EU climate policy perhaps the most bizarre is the
detrimental effect of wind and solar schemes on the price of electricity generated by
natural gas. Many gas power plants can no longer operate enough hours to recover
their investment. They incur big costs as they have to be switched on and off to backup renewables. (GWPF 14 April)
Supply Security May Dominate Policy
Geopolitics continue to dominate the energy world especially with regard to matters
of energy supply and security. Nowhere is this more evident than in the recent
conflict in the Crimea with its knock-on the effect on Euro-Russian relations. Europe
is now seeking possible new suppliers. (Oilprice.com 30 April)
An Invitation to Sustainable Energy Week
The EU has a 27% target for renewable energy in 2030. This means, in practice, a
target of 45% renewables in the electricity mix. This revolution in renewables cannot
be left to develop without a blueprint. It has to be a revolution by design to ensure it
will be smooth, safe and cost-effective.
A thorough analysis of the consequences of a high share of variable generation for
the European electricity system is critical to ensure its economic and technical
viability. Energy Post, with the kind support of EDF, Europes largest utility company,
invites you to discuss the latest challenges and possible solutions at an evening debate
forming part of the programme of the EU Sustainable Energy Week (EUSEW). EDF
has conducted an in-depth study which analyses what a 60% share of renewable
electricity means for the European energy system. Until now, this has only been used
inside the company for strategic purposes. To mark this years EUSEW forum, EDF
has agreed to share its findings to stimulate this crucial debate. (From Energy Post 6
May)
722
Historic Deal?
In Brussels this week a historic deal was reached between the European Parliament
and the Member States on the reform of the EU Emissions Trading Scheme. The
largest carbon trading scheme in the world has been in the doldrums for years. Now it
seems it will be revitalised after all. (Energy Post 8 May)
German Policy
On the Brink of an Energy Crisis?
Some 39 power plants across Germany could be decommissioned later this year
which could jeopardize the security of supply, precipitating a huge energy crisis in
the coming years as more plants are shuttered, according to the German Association
of Energy and Water Industries the countrys main utilities lobby. The reason: the
flood of solar and wind energy on the grid has caused wholesale electricity prices to
collapse all while retail rates have skyrocketed. As a result, conventional power
plants run fewer hours than originally planned, in many cases acting as backup power
only. So the utilities are asking for a bail-out. (Dailycaller.com 13 April) From Ian
Cameron <iancameron257@gmail.com> 18 April
Who Pays for the Energiewende?
The prospect of the German taxpayer paying to cover nuclear reactor shutdowns is a
live one as utilities continue to struggle, according to a government report. As part of
the countrys energy transition policy, A. Merkels government decided to phase out
nuclear power by 2022 but the expense involved in storing the waste and
decommissioning the plants may prove beyond power companies. Utility executives
say more specifics on plans are needed. There are still no clear answers to many
fundamental questions involving final and intermediate storage, dismantling [reactors]
and transporting radioactive waste, said Frank Mastiaux, chief executive of EnBW
Energie Baden-Wrttemberg AG, one of Germanys largest utility companies.
Concrete concepts have long been promised, but there is nothing yet in sight. That
move forced EnBW and Germanys other big utilitiesE.ON SE,RWE AG and a unit
of Swedens Vattenfall ABto book billions of euros in write-downs on nuclear assets
and increase their provisions for early decommissioning of the facilities. The
provisions now total about $40bn ( 37bn). The cost could ultimately top 50bn.
And that money might have to be covered by taxpayers if a power company faces
insolvency or some other scenarios, the government report warned. Based on the
current legal situation, there are risks that the financial provisions set aside by the
nuclear operating companies arent sufficient and therefore it cant be ruled out that,
in a worst-case scenario, significant costs...could fall on the public, said the report
commissioned by the economy ministry and prepared by lawyers, auditors and tax
consultants. Meanwhile storage of nuclear waste is also emerging as a growing
problem with the government now aiming to designate a disposal site by 2031, though
subsequent geological exploration and construction could delay any opening to about
2050. Until a final disposal site is found, all waste will be stored temporarily. Keeping
interim facilities safe is expensive with E.ON recently stating that delays in finding a
Fuel for Thought
723
disposal site will cost the German nuclear industry $2.82bn ( 2.6bn).One of these
days, maybe politicians will consult reality before they embark on their fantasy
policies. But there again (From Paul Homewood 24 March)
Some 50 Power Plants Applied for Decommissioning
The economic viability of some 53% or 39 of the power plants planned for
construction in Europes largest economy by 2025, has been called into question,
German energy industry association BDEW said... investors were nervous
because of lacking profitability for coal- and gas-fired power stations because of
competing energy supplies from subsidised renewable power, and a tougher
carbon emissions regime. Germany, which is due to phase out nuclear energy by
2022, could face supply bottlenecks in the next few years. (Vera Eckert, Reuters,
13 April 2015)
Over 50% of planned new build is now doubtful: every second planned power
station faces being abandoned and investments are drying up since even latest
type of gas fired power station are no longer profitable. 50 existing power
stations could be closed this year. The Energiewende approached a critical
turning point: Renewable energy is to become the mainstay of the German
energy mix. (EIKE 13 April)
Climate To be Saved by Germany (Am deutschen Wesen soll das Klima genesen)
Critics are upset by the way top politicians, including Steinmeier and Merkel, are
trying to persuade the public to support the German suicide attempt on their own
industrial infrastructure, politely described as Energiewende. On her visit to Japan
Merkel advised the Japanese to rapidly replace nuclear power by solar and wind.
(Summarised from Fred F. Mueller, EIKE, 18 April. [The Japanese politely rejected
the advice a few weeks later.]
Climate Tax Battles Begin
A serious battle has erupted over the Klima-abgabe (climate tax), with Forum
kologisch-Soziale Marktwirtschaft (FS) declaring that over 50 scientists are
publically supporting Economics Minister Gabriel, urging him to implement the tax
immediately and fully. Otherwise the 2020 objective of Germany to be a
Klimaschutz-Vorreiters an example to others were endangered. In any case, this
climate tax was no more than the absolute minimum for preventing Germanys climate
objectives from being endangered. However, trade unions and the energy industry
remain critical. (Translated and abbreviated from press release 22 April)
The German target is a 40% reduction of emissions by 2020; the climate tax is to
contribute an additional fall of 22 million t of CO2. Carbon trading alone is considered
inadequate. (See Der nationale Klimabeitrag konomisch vernnftig und kologisch
notwendig, www.foes.de/pdf/2015-03-FOES-Hintergrundpapier-Klimabeitrag.pdf)
Elektromobilitt Should be Subsidised
In order to assist the break through to Elektromobilitt environment minister
Hendricks has proposed subsidising electric business vehicles (Dienstwagen)) FOS
724
agrees but demands that the money should be raised by increasing the cost of climate
damaging vehicles This would cost the state nothing but smooth the path towards
climate friendly mobility. (FoS press release 24 April)
PIK Having Second Thoughts?
Among the CAGW fortresses around the world the Potsdam Institute for Climate
Research in Berlin is the strongest and most outspoken in Europe. So it is news when
they announce in a Press Release that natural variability has been underestimated and
that we are currently facing a cooling period. (Friends of Science 2O April) Albert
Jacobs <afjacobs@telus.net>
UK policy
The Office for Budget Responsibility warned Spending on public services is
about to plunge at a rate more severe than anything we have yet seen. (FT 26
March)
Expansion of State Power
In a new report Central Planning with Market Features: how renewable subsidies
destroyed the UK electricity market, published by the Centre for Policy Studies on 18
March, Rupert Darwall shows that recent energy policy represents the biggest
expansion of state power since the nationalisations of the 1940s and 1950s and is on
course to be the most expensive domestic policy disaster in modern British history.
Darwall shows that:
The electricity sector is being transformed into a vast, ramshackle Public Private
Partnership, an outcome that promises the worst of both worlds state control
of investment funded by high cost private sector capital, with energy
companies being set up as the fall guys to take the rap for higher electricity bills.
Post-privatisation gains in productivity are now being reversed as a result of
plunging labour productivity. By 2013, three quarters of the productivity gains
recorded between 1994 and 2004 had been lost.
Competition between electricity suppliers is an expensive sideshow (which
Ofgem estimated cost 730m in 2008) if it does not drive competition between
generators and market investment in the most efficient generating technologies.
Government policies aim to hide the full costs of intermittent renewables,
which as a result are systematically understated. In addition to their higher plantlevel costs, renewables require massive amounts of extra generating capacity to
provide cover for intermittent generation when the wind doesnt blow and the
sun doesnt shine.
Highly subsidised wind and solar capacity flooding the market with near
random amounts of zero marginal cost electricity wrecks the economics of
conventional power stations. It is therefore impossible to integrate large amounts
of intermittent renewables into a private sector system and still expect it to
function as such.
As a result, the State has stepped in with a patchwork of interventions to support
prices. Because revenues are dependent on continued government interventions,
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725
private investors end up having to price and manage political risk, imparting a further
upwards twist to electricity bills. Without renewables, the UK market would require
22GW of new capacity to replace old coal and nuclear. With renewables, 50GW is
required, i.e. 28GW more to deal with the intermittency problem. Then there are extra
grid costs to connect both remote onshore wind farms (8 billion) and even more
costly offshore capacity (15 billion) a near trebling of grid costs. No British
government has yet to produce an analysis demonstrating renewables are the most
efficient way of cutting carbon dioxide emissions. Neither has any government
published any value-for-money analysis to justify the use of high cost private sector
capital against a public sector comparator using the States balance sheet. Including
capacity to cover for intermittency and extra grid infrastructure, the annualised capital
cost of renewables is approximately 9 billion. Against this needs to be set the saved
fuel costs of generating electricity from conventional power stations. For gas, this
would be around 3 billion a year at current wholesale prices, implying an annual net
cost of renewables of around 6 billion a year. (Energy Live News 19 March)
http://www.energylivenews.com/2015/03/19/e-on-withdraws-gas-power-plant-fromgrid/
NB: Wind turbines are currently supplying just 0.3% of UK electricity demand.
Coal, gas and nuclear are contributing 84.2%, and the French are helping out with
6.1%. (Paul Homewood 5 April)
Decline of Coal??
One third of Britains electricity was provided by the coal-fired power sector over the
last six months, despite the loss of 5 GW of coal plants over the last two years. In the
October 2014 to end of March 2015 period, coal provided 33 % of total power
generation, compared to gas at 25% and nuclear at 18 %. Paul Verrill, director of
energy data specialists EnAppSys, told Power Engineering International: Coal-fired
power stations continued to provide the bulk of power generation for the GB
electricity market during winter 2014-15. The total power mix for the period is:
Coal:
12,768MW; 33 %
Gas:
9,577MW; 25 %
Nuclear:
6,926MW; 18 %
Wind:
4,459MW; 11 %
Interconnectors:
2,186MW;
6%
Biomass:
1,810MW;
5%
Hydro:
987MW;
3%
Solar:
215MW;
1%
Talk of closures is interesting. I recently asked DECC, under FOI, to provide a list of
power plants either due or expected to close by 2025. They have told me that they may
claim exemption under Commercial Interests, though they are still considering.
Note also the wonderful contribution made by solar! The actual figure is 0.55%! (Paul
Homewood 30 April)
726
The UK Offshore Wind Sector

This growing development along British Coasts, with The Crown Estate as a major
actor - as the manage of the UK seabed and source of much technical advice,
should interest Energy policy people. Since 2015 the Energy Institute and the Crown
Estate have supported the work of the G9 Offshore Health and Safety Association to
pull together and share their collection of offshore wind resources. (Energy World
March)
THE SUN CLOUDING OVER OR THE WIND DROPPING
UK renewable energy producers are facing a tougher time Government-set tariffs are
becoming more sophisticated , producers are having to bid for the right to produce,
with the lowest cost bidder winning, perhaps prices have fallen too low. Solar was
not expected to bid below 120 per megawatt hour, but did. UK wholesale price for next
winter is estimated at about 45 but even offshore wind traded at lower than expected.
Given competition with conventional power, if replaced be renewables, means that in
competition only the cheapest conventional source will survive, as has happened in
Germany where CO2 emissions have increased because of higher coal use and despite
a 25 % renewable capacity. (FT Lex 17 March)
UK Response to EU Energy Efficiency Directive a Boon for Bureaucracy and
Energy Professionals
This Directive requires all member states to introduce a programme of regular energy
audits for large organisations. The UK governments response is ESOS, the energy
savings opportunity scheme, intend to meet the 20% reduction in primary energy
demand by 2020 demanded by the EU. The UK considers a large organisation to have
more than 1250 employees, or a specified turnover and balance sheet. Total energy
demand will have to be reported by 5 December 2015 covering: buildings, industrial
processes and transport and identify cost effective energy savings opportunities. And
submit a formal notification to the Environment Agency confirming that they have met
the requirement of ESOS in each compliance period, participants bear legal
responsibility for compliance and penalties up to 50,000 can be imposed. A register
of Professional Energy Consultants and Chartered Energy Managers is available from
the Energy Institute which offers its help to companies to make the most of the energy
efficiency measures identified . (Energy World March 2015)
Winter Gas Prices Likely to Rise
Centrica announced that UKs storage capacity for cut would reduce sharply for six
months. Its only so-called long-range storage facility below the North Sea and
representing 72% of existing UK storage capacity was affect5ed by integrity
problems, implying drop of 29% in capacity. The Rough gas field lies off the
Yorkshire coast and has been used for storage since 1985. Gas is injected into the wells
in summer for use in winter if needed. Gas flows from Continent and Norway could
be increased if needed, but risk higher prices. The UK can store the equivalent for only
19 days compared to 97 days on continent. (FT 28 March)
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727
Closure of Power Stations

Hard on the news that the Longannet coal fired power station will close next year,
there is another blow to the UKs energy security. E.ON have announced that they are
withdrawing their 900MW gas power station from the UK grid. Energy Live News
report: E.ON has announced its Killingholme CCGT plant will no longer contribute
to grid capacity. The gas power station on the banks of the Humber estuary has
900MW of Transmission Entry Capacity (TEC) which will now no longer be available
to National Grid. E.ON has also said the power station is at serious risk of permanent
closure, subject to the outcome of an ongoing tender for National Grids Supplemental
Balancing Reserve (SBR) service. E.ON UK Chief Executive, Tony Cocker, said:
..The reality, however, is that the market conditions for gas-fired power stations are
extremely difficult and without support from the SBR contract, permanent closure is a
real and present risk to Killingholme. Over the last few years we have invested billions
in the UKs energy infrastructure but there is no doubt that the challenging operational
environment continues to provide uncertainty and risk that must be addressed.
Killingholme, which was entered into the recent UK Capacity Market Auction but was
unsuccessful, is a Combined Cycle Gas Turbine comprising two 450MW modules.
Approximately 50 people in total are employed at the North Lincolnshire site. E.ON
have not ruled out redundancy as a possibility if the SBR tender is unsuccessful. Gas
power stations are finding it difficult to compete against subsidised renewables and
cheap coal, and not only in the UK. Intermittent operation simply does not cover costs,
without a guarantee of payment for back up capacity under the Capacity Market
Mechanism. The dilemma is that as coal power stations and old nuclear are removed
from the mix in the next 5 to 10 years, and as wind power capacity rapidly expands,
the need for dozens of new gas fired power stations becomes ever more pressing. What
chance is there of these being built when existing ones, with their capital costs already
paid for, cant afford to stay operational? As one commenter on the website puts it:
Heaven help us all! (Paul Homewood, Not a Lot of People Know That 27 March)
Deindustrialisation?
Three years ago, Britains last major aluminium smelter, Lynemouth, was closed. This
followed the closure of the Anglesey plant in 2009. An industry, that used to boast of
production figures of 300,000 tonnes a year, is now reduced to the tiny Lochaber plant,
rated at 43000 tonnes. The reasons for these closures was well documented at the time,
and the major one was high energy costs, largely due to UK climate policies The
independent think tank, Civitas, published this report at the time: (The Demise Of The
UK Aluminium Industry by Paul Homewood 20 April)
Confusion, Contradiction or Just Party Politics?
Low-carbon economy is at heart of Labours energy strategy: A greener, lowcarbon economy based on a decarbonised energy sector, with major structural
changes to energy, transport and other national infrastructure priorities dominate
Labours 2015 manifesto
New offshore regulator to be funded by oil and gas firms: The new Oil and Gas
Authority will be funded by the same companies it regulates through a system
of fees and levies, DECC has confirmed. (ENDS weekly 16 April)
728
UK Professional Energy Policy Debates 2015

2 June - UK North Sea: policy and strategies for economic recovery: The North Sea
oil and gas industry faces a challenging time. The decline in profitability of the sector
has been exacerbated by the near-50% drop in oil price, making the sector a difficult
operating environment. The establishment of the Oil and Gas Authority and the recent
reform of the fiscal regime announced in the Budget are steps in the right direction but
it is essential that the industry tackles costs and improves profitability in order to
continue to attract investment. Policy makers and companies must work together to
maintain operations and competitiveness and this debate will discuss challenges,
policy and solutions needed for economic recovery of the North Sea.
13 October - The new governments energy policy: The next government faces
critical energy and environment issues irrespective of the General Election outcome.
Businesses and investors will need to know what is going to happen to decarbonisation
policies, how the next government plans to accelerate the transition to low-carbon
economy, and what role the UK intends to play at the COP21 summit.
15 December - UN Climate Change Conference COP21: where next for energy
policy? Conventional energy resources continue to account for more than 80% of the
worlds energy supply and they come with an environmental penalty that cannot be
ignored. COP21 should be a decisive step in the negotiation of the future international
post-2020 agreement, including both developed and developing countries. Held a few
days after the COP21 meeting, the debate will discuss directions for future energy
policy in light of the outcomes of the Paris meeting. (Energy Institute News 21 April)
Vickie Naidu events@energyinstnews.org
ENA Recommendations for New Government
Energy Networks Association has outlined ten priority areas which a new Government
must consider to ensure secure and affordable networks which will deliver the
transition to a low carbon economy. General Election 2015: The Agenda for Energy
Networks calls on the Government to deliver a stable regulatory environment and
effective connections policy; investment in skills and innovation; increased
interconnector capacity and the right conditions for long term infrastructure planning.
The vital role of the gas networks and green gas is also emphasised, alongside the need
to continue supporting fuel poor communities through connections to the gas grid.
David Smith, Chief Executive of ENA said, Our energy networks underpin all
aspects of life in modern society, and the conversations around their future should
involve the widest possible group of stakeholders. New MPs will need to be engaged
in the energy debate over the next Parliament and beyond and The Agenda for Energy
Networks sets out ten requirements to help networks deliver for customers through
high performance and lower costs. (UK Energy Networks 21 April)
Party Politics
PreElection Comment: Whoever wins this miserable election, the outcome is
likely to be the same: higher and stealthier taxes, more patronising gimmicks
and more complication (giving lie to the belief in free markets). (Johnathan Eley
FT Money 2 May) The Labour Partys manifesto promise to set a legal target
Fuel for Thought
729
to remove carbon from our electricity supply by 2030 referred to repeatedly

by the Labour leader in speeches since September 2013 and during the election
campaign could result in a huge increase in energy costs for households and
businesses. The findings also raise questions about Mr. Milibands promises to
tackle what he calls Britains cost-of-living crisis and freeze energy prices for
two years. The Telegraphs figures have been reviewed by three energy experts
on condition of anonymity as they wanted to remain politically impartial. Ed
Milibands commitment to eliminate the vast majority of carbon from the UK
power sector by 2030 could cost Britain more than 200bn, according to
analysis conducted by The Telegraph. The analysts refused to be named. (Paul
Homewood 5 May)
Post-election Hope: The Conservative Partys victory in the UK General
Election means that it will be able to put its own man in at the top of the
Department of Energy and Climate Change. The result of the election should
help to move forward the establishment of an onshore shale gas industry in the
UK as the Conservatives are fully behind drilling for shale gas in the country.
(J. Mainwaring, /GWPF 8 May)
Russian Policy
Sharp Drop in Emissions
According to official CDIAC data, Russian emissions fell from 643MtC in 1990 to
495MtC in 2013. In other words, Russian emissions are already down to 77% of 1990
levels. Therefore, the best Putin is offering, is to reduce these by a further 2% to 7%
of 1990 emissions. When the forest fudge factor [contested and referring to absorption
of CO2] is accounted for, it is quite likely that Russian emissions wont fall at all.
Putins offer is not a deal, just smoke and mirrors. (Paul Homewood, Not A Lot Of
People Know That, 2 April)
Following the collapse of communism in 1990, a lot of old and inefficient heavy
industry shut down in Russia and the rest of the communist bloc, with the result that
emissions of CO2 fell sharply in the years after. According to the official CDIAC data,
Russian emissions fell from 643MtC in 1990 to 495MtC in 2013. In other words,
Russian emissions are currently already down to 77% of 1990 levels. Therefore, under
Putins proposal, the best he is offering is to reduce by a further 2% to 7% of 1990
emissions. When the forest fudge factor is accounted for, it is quite likely that Russian
emissions wont fall at all. The chart below shows how sharply CO2 emissions fell
after 1990 in Russia, and how they have gradually been increasing since 1998. This is
in stark contrast to falling emissions in the US and Europe during recent years. (Paul
Homewowod 7 April)
Gazprom versus Brussels
Gazproms subtle threat to European Union members [is] the prospect of
negotiating a gas deal collectively. Gazproms chief said that a single price for
the entire EU would be much higher than what individual countries receive,
words that no doubt were intended to scuttle Europes motivation to play
730
hardball. Some countries receive preferential prices that could go away if the
EU wants a single price, Gazprom seemed to suggest. But the EU fired back.
The EUs Competition Commissioner had some tough words aimed at Moscow.
M. Vestager was in Washington said she would take a hardline on energy
companies that harm rivals, block energy flows from one EU country to
another, or threaten to close the tap. Gazprom was not mentioned by name.
Her comments also carry some extra weight coming on the heels of formal
charges that the EU filed against Google for violating anti-trust laws.
(Oilprice.com 20 April)
Gazprom was put by Brussels in the anti-trust dock, charged with illegally
abusing its gas market power, charges that were made before the Ukraine crisis.
Gazprom tried to settle the issue last week and the EUs response may further
antagonise Moscow. The EU has already outlined plans to reduce its energy
reliance on Russia. This is in essence an anti-trust battle and the dispute could
worsen. Bad timing! (FT 22 April)
In December Gazprom had cancelled its project to deliver Russian gas to
southern Europe but hoped for a mutually acceptable and civil solution of
current conflict the EU. The Commissions formal antitrust case accuses
Gazprom of illegally abusing its dominant market position in eastern Europe.
The case may not be decided for several years. Gazprom has already made some
adjustments, removing clauses that forbid the resale of its gas, and has
negotiated lower prices in Lithuania and other countries. (FT 23 April)
Gazprom is looking for a settlement and has 12 weeks to deal with the charges
which could mean $1.2 bn of legally mandated changes to its business model.
the EU now has ferocious prosecutorial powers. But Gazprom is already
losing market share in Europe and cannot endanger its export revenues.
The question of fair gas prices exercises EU experts , it is inherently difficult
to determine what is a fair price and avoid meddling with a smooth
functioning market, and deciding what is excessive pricing, e.g. by Gazprom,
remains difficult, even for the Commission trying to punish the Russian state.
(FT 28 April)
Gazprom profits were down 86% last year: heavy foreign exchange losses,
protracted dispute with Ukraine and mild weather are to blame. (In future lower
gas prices will transmit the full impact of falling oil price as well. (FT 30 April)
Energy expert Pierre Noel argues that Brussels is blaming Gazprom for its own
failings; high prices in eastern Europe have less to do with restrictive business
practices than EU rules. All of Europe - not just NW - needs a European gas
transport system ignoring borders as in US. This could have been created in
Europe. (FT 30 April) A UK professor disagreed pointing to the very weak
starting base only 30 years when EU gas markets were utterly partitioned and
that substantial liberalisation had now taken place, something Gazprom was
trying to undermine. (Letters FT 4 May)
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731
Other Policies
Norway at a Turning Point: Exactly fifty years after the beginning of its impressive
offshore adventure, Norway is facing significant changes. 2015 is set to bring a drop
in offshore investments by 20 percent and a further ten percent in 2016. An almost
stable production level is predicted at least for the coming five years. A loss of 10,000
to 15,000 jobs is expected. A drastic fall in revenue for companies active on the
Norwegian continental shelf (NCS) and an equally heavy fall in tax income for the
Norwegian state is unavoidable. These are the parameters Norway is currently looking
at. The country with just 5.2 million inhabitants became, according to some criteria,
the richest country in the world, but has now reached a turning point. However, as a
representative of a foreign oil company put it, There is no reason to be pessimistic.
(Reiner Gatermann EER 16 April)
Quebec joined Californias cap-and-trade carbon market in 2014, and on April 13,
Ontario announced it will do the same. In the announcement, Ontario Premier
Kathleen Wynne said her government was doing so as to protect the air we breathe,
the water we drink and the health of our children and grandchildren. She went on to
say: Climate change is already hurting our environment, causing extreme weather
like floods and droughts, and hurting our ability to grow food in some regions. Over
the near term, it will increase the cost of food and insurance, harm wildlife and nature,
and eventually make the world inhospitable for our children and grandchildren. In
fighting climate change, Ontario has already been at war with the provincial economy.
A chart in the Financial Post depicts six years (2009-2014) of nearly flat electricity
demand as the cost goes up 50%. During that time the province shut its coal plants,
reducing CO2 emissions by 10 million tonnes at an annual cost of $4 billion, or
$400/tonne. Thats a long way from the $30/tonne cited by the Ontario government as
an effective carbon tax. (Reuters 13 April)
Australias Policy Now Politically Correct: Australia is taking strong action on
climate change. Between 1990 and 2014 the economy nearly doubled in size and our
population grew strongly, while greenhouse gas emissions remained broadly the same.
Australias emissions per capita have reduced by 28 % since 1990 and by 20 % since
2000. (Excerpt from
ww.dpmc.gov.au/sites/default/files/publications/Issues_Paper_greenhouse_gas_1.pdf)
Ukraine: Economic and political turmoil there has led to a significant reduction in
energy consumption which should have eased the countrys key economic burden its
heavy dependence on dollar-priced hydrocarbon imports. In 2014 natural gas
consumption alone went down by 16 % to 42.6 bcm, and imports fell by 8.3 bcm to
19.5 bcm. Falling demand and cheap crude also decreased Ukraines natural gas bill
which went down from $12 billion in 2013 to $8.8 billion in 2014. (Danila Bochkarev
EER 16 April)
Indias Climate Policy: India has voluntarily announced efforts to reduce emission
intensity by 20-25 per cent by 2020 from the 2005 level without reckoning the
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emissions from agriculture sector, Lok Sabha was informed today. Environment
Minister Prakash Javadekar said during Question Hour that though India was a party
to United Nations Framework Convention on Climate Change and its Kyoto Protocol,
it did not have legally binding greenhouse gas (GHG) emission reduction
commitments. (Press Trust of India, 29 April /GWPF)
The Modi government has cancelled the registration of nearly 9,000 foreignfunded NGOs that failed to file their annual returns. The order, quietly issued on
April 6, came days before the Centres effort to tighten the grip on prominent
NGOs that receive foreign funds like Greenpeace India and the Ford
Foundation. The security establishment has been advocating a hard line on
foreign-funded NGOs for years. But it was only after a change of regime at the
Centre that the home ministry started the groundwork for the crackdown. (A.
Tikku, Hindustan Times, 28 April)
NB: Indias renewed pledge to reduce the emissions intensity of its GDP by 20 25% in 2020 compared to 2005 levels is more than 5 years old and was originally
submitted to the Copenhagen Accord on 30 January 2010.
CARBON FUELS AND NUCLEAR

The narrative arc of coal bears an uncomfortable resemblance to that of
investment bankingThe big money has shifted to the handful of US and
Chinese titans able to cope with the regulatory burden. (Giles Wiles, FT
Comment, 7/8 March)
Oil and gas are now buyers markets The market is global and open. (Nick
Butler FT 9 April)
Shale oil has transformed US energy security and rattled leaders of rival oil
countries from Riyadh to Caracas. (FTWeekend Magazine 225/26 April)
Blame the USA
The present oil price collapse is because of over-production of expensive tight oil. The
collapse occurred because of the inability of the world market to support the cost of
the new expensive oil supply from shale, oil sands and deep water. Demand was
progressively destroyed during the longest period of sustained high oil prices in
history from 2010 through 2014. Since the early 2000s, the price of oil was largely
insensitive to the fundamentals of supply and demand as long as prices were less than
about $90 per barrel. The chart below [not shown here] shows world liquids supply
minus demand (relative supply surplus or deficit), and WTI oil price. (A. Berman,
Oilprice.com 6 April)
Deepwater Horizon Finance Dissected
100million gallons of oil were lost by BP in to Gulf of Mexico 5 years ago, and 11
people killed and while BP set aside $42 billion, enough to fund the UK health service
for 3 months - the final bill is likely to be higher which could deter investment in
Fuel for Thought
733
America. Some lessons have been learnt, e.g. about the toxicity of some dispersants,
and better technologies developed such as a geospatial reference system, and
improved blow-out preventers. Deepwater Horizon cost BP far more than the
sanctions on Russia over the Ukraine. Even NOAA admitted that it was too early to
assess the damage, the environmental effects of oil remains disputes as to the extent to
which the accident drove away tourists. Lawyers note that the efforts BP made to take
full responsibility and compensate victims quickly counted for nothing in court.
Shelving Oil and Gas Projects
China National Offshore Oil Corp (Cnooc) has decided to shelve its shale gas project
in Anhui province in the latest sign that the shale gas revolution that transformed the
US energy industry is unlikely to replicate itself in China. Chinese and international
oil companies are cutting spending following a steep slide in crude prices over the past
year, and expensive shale projects are begin targeted. Cnooc joins larger Chinese firm
PetroChina, which has already sharply scaled back on shale project in Sichuan
province that it was developing with Royal Dutch Shell. (Lucy Hornby, FT ?)
Facing Reality on Shale. Now that frontrunner Chevron has recently decided to quit
Romania after earlier having given up on Poland and Lithuania, it is time to face
reality, writes A. Mihalache of the Bucharest-based Energy Policy Group in an
important post-mortem of the shale gas era in Central and Eastern Europe. There is not
going to be any shale gas revolution in this part of the world, she notes. Instead,
policymakers should focus on what really matters: improve the investment climate
and develop conventional resources. Elsewhere in the EU, shale gas is also struggling.
The only country that is still holding the fracking flag high is the UK. But even here
resistance is mounting. In January, the Scottish government established a moratorium
on planning permits for fracking, an example that has been followed by Wales and by
many local councils in England. Still, notes energy analyst and journalist in an article
for Energy Post, it would be premature to conclude that shale gas has no future in the
UK. The Scottish government has no real intention to stop fracking: the moratorium,
he argues, is primarily intended as a move by the Scottish National Party to secure
votes for the general elections in May. His interpretation is at least partly confirmed
by Scottish Minister of Energy who, in an email interview says that unconventional
gas could potentially play a part in supplementing renewables in Scotland. (Energy
Post 10 April) Energy Post)
Advice to USA on Oil Exporters
The US should stop battling in the global oil price war with one hand tied behind its
back and abandon its 1970s regulations which ban the export of crude oil, only very
slightly relaxed recently. These regulations are defended as a support for Americas
energy security, but will actually increase its net imports. The US has created excess
supply and without cut backs by OPEC, global oversupply can only be corrected by
the price mechanism, i.e. forcing high cost producers out of the market. . All import
controls on oil should be abandoned, says FT editorial. (FT 10 March)
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Oil Price Fall and Implications

When it comes to geopolitical events affecting oil prices, there is no shortage of
possibilities. Whether it is the outbreak of a war, a terrorist attack, a massive
industrial accident, or a financial crisis, these events usually take the oil markets
by surprise. It is not too often that there is a major geopolitical event that will
have enormous influence over oil prices yet is known ahead of time. But we are
in the midst of one of those rare moments: we are arriving at the deadline for the
negotiations over Irans nuclear program, with the clock running out at midnight
on March 31. The two sides are furiously negotiating, trying to overcome their
differences to make history. A comprehensive agreement between Iran and the
West was always going to be extraordinarily difficult and would involve painful
concessions on both sides. But there is some indication that a deal is there to be
grabbed if the major world powers want it. The Russian Foreign Minister had
previously bailed on the talks, saying that he would only return if a deal looked
realistic. However, he did in fact decide to fly back to Switzerland and re-join
the talks on March 31 as there were signs of progress. The chances are high.
They are probably not 100 percent but you can never be 100 percent certain of
anything. The odds are quite doable if none of the parties raise the stakes at the
last minute, Russian Foreign Minister Lavrov told Russian media in Moscow.
The outcome of the negotiations will have an immediate effect on the price of
oil, one way or another. If the parties come to terms and reach a truly historic
resolution to such an intractable problem it could lead to the removal of
sanctions on Iran and the return of Iranian oil to the global market. Iran could
probably ramp up production by an additional several hundred thousand barrels
per day over the course of a few months with the potential to ultimately add
around 1 million barrels per day. Still, if a deal is sealed in Switzerland, the oil
markets will react immediately, most likely falling by several dollars per barrel.
(Oilpricecom, 31 March)
The Nova Scotia island of Cape Breton is yet another example of economic
damage wrought by over-reliance on a fossil-fuel industry, Reuters reports this
week in an article on how a downturn in tar-sands development 3,000 miles
away is hurting a local economy. 5,000 to 10,000 people from Cape Breton,
population 136,000, commuting to Alberta to work in a tar-sands industry that
is faltering as oil prices remain low. He notes tar-sands layoff have been handed
down recently by Suncor Energy, which said last month it would cut 1,000 jobs,
the Canadian unit of Saipem SpA which laid off about 1,000, and Royal Dutch
Shell Plc, which cut 300 jobs . Cape Breton is another example how the 60
% slide in oil prices since last June has rippled far and wide, affecting property
markets in Alberta and North Dakota, helicopter sales in Houston, the Canadian
dollar and national interest rates. Once an industrial powerhouse fueled by
now-closed coal mines and steel mills, the island has turned into an exporter of
labor. Many young workers head to Fort McMurray in northern Alberta, lured
by big paychecks awaiting at oil sands projects clustered around the
city.(IEEFA 19 March)
Mexico is reducing taxes for energy groups wanting to develop the countrys oil
Fuel for Thought
735
and gas resources for fear that falling crude price will made companies submit
lower bids Pemex 77 year oil monopoly will end this year with contracts to be
awarded in July adjustment to new market conditions. (FT 10 March)
Rig counts are still falling, but at a much slower rate than in recent weeks. Saudi
Arabia increased its price for oil it is exporting to Asia, an indication that rising
demand could provide a lift to global prices as 2015 continues to unfold. On
April 7, oil prices were up again after taking a bit of a breather. The day before
marked extraordinary price gains for both WTI and Brent. WTI is now solidly
above the psychological threshold of $50 per barrel, trading at $53. Brent,
jumping up above $58 pb, is closing in on the next threshold of $60 pb. Despite
the price gains, things are not looking good for the crude-by-rail industry. A
series of oil train derailments and explosions struck the rail industry earlier this
year. But now fresh data from the Association of American Railroads strikes
another blow: the fall in oil prices is starting to cut into the volume of shipments
on the railways. As drilling activity falls in places like North Dakota, which
accounts for the lions share of oil train shipments, fewer and fewer trains are
making their trips across the country. Rail shipments fell by 7% in March from
a year earlier. (Oilpricecom 7 April)
Oil prices continue to show some strength, closing out the week near their
highest levels for 2015. The EIA reported another slight decline in oil
production in the US, the third decline in four weeks... Crude inventories did
rise, however, indicating that there is still a lot more production than refineries
can handle. But on the other hand, gasoline stocks were drawn down by 2.1
million barrels, suggesting demand is gaining some momentum. Once again, the
picture is as clear as mud, but signs are starting to point in the direction of a more
balanced market.... Bloomberg projects that if WTI reaches $65, an additional
500,000 barrels per day could come online by the end of 2016 as the backlog of
wells awaiting completion is worked through. (Oilprice.com 24 April)
The oil equipment and services is suffering as less equipment is ordered,
especially for fracking. Maintenance is reduced and buyers of equipment
demand reduce prices by up to 20%. However, oil production in North Dakoda
has still to fall significantly. (FT 30 April)
Why did Saudis Force Out High Cost Suppliers?
As if to rub salt in the wounds of the US shale industry, Middle East OPEC oil
rig count has jumped by 19 rigs to 155 units in February 2015 setting a new rig
count record for the region. Since 2005 the supergiant oil fields of the region
developed symptoms of mortality and increased drilling has been required to
combat natural production declines in order to maintain production at static
levels. (Euan Mearns March 16)
Last fall, as oil prices crashed, Ali al-Naimi, Saudi Arabias petroleum minister
and the worlds de facto energy czar, went mum. He still popped up, as is his
habit, at industry conferences on three continents. Yet from mid-September to
the middle of November, while benchmark crude prices plunged 21 % to a fouryear low, Naimi didnt utter a word in public. According to Claudia Cattaneo,
736
the Saudi strategy to quickly push prices to uneconomic levels was typical of
what we have come to expect from the Middle East. For 20 years, Bloomberg
Markets reports in its May 2015 issue, the worlds US$2 trillion oil market has
parsed Naimis every syllable for signs of where supply and prices are heading.
Twice during previous routsamid the Asian financial crisis in 1998 and again
when the global economy melted down 10 years later Naimi reversed oils
free fall by orchestrating production cutbacks among members of OPEC. This
time, he went to ground. At the cartels semiannual meeting on Nov. 27 in
Vienna, he shot down proposed output reductions supported by a majority of the
12 members in favor of a more daring strategy: keep pumping and wait for lower
prices to force high-cost suppliers out of the market. Oil prices fell a further 10
% by the end of the next day and kept going. Having averaged US$110 a barrel
from 2011 through the middle of 2014, Brent crude, the global benchmark,
dipped below US$50 in January. What they did was historic, Daniel Yergin,
the pre-eminent historian of the oil industry, told Bloomberg in February. They
said: We resign. We quit. Were no longer going to be the manager of the
market. Let the market manage the market. Thats when you got this sort of
shocked reaction that took prices down to those levels we saw. (Article
supplied by Greg Freemyer who comments that the article implied that the
Saudis were trying to protect share of the overall share of oil in the energy
market not their own or OPECs share, as widely interpreted.
According to another analysis, the real reason for the Saudis having given up
supporting a high oil price is that they have given up believing in peak oil, and
this means that oil may well never see $100 again. $20 may be the bottom
line if the peak oil theory is bunkum and it makes sense to pump a lot more oil.
And if demand declines, then it makes sense to pump as much as possible as
soon as possible. (Alphaville, FT 21 March)
Saudi Arabia reiterated its position that it would not unilaterally cut oil
production in order to prop up prices. The leading OPEC member said that it
would consider production cuts only if other non-OPEC producers did as well.
The advisor to Saudi Arabias oil minister, spoke at a conference in mid-March
in which he said that OPEC sat down with Russian and Mexican officials last
fall to discuss coordinated production cuts. However, when Russia and Mexico
decided against cutting output, OPEC decided to leave its production quota
unchanged. Saudi Oil Minister Ali al-Naimi said on March 22 that Saudi Arabia
is now pumping 10 million barrels per day, suggesting a 350,000 barrel-per-day
increase over February. He emphasized once again that Saudi Arabia would not
go it alone in balancing out the oil markets. (Oilprice.com 26 March
Oil: Plans and Predictions
Canada and Petronas of Malaysia are offering the native community in Canada US$
880 m for supporting a LNG project that will include liquefaction on a British
Colombia island. Social and legal licences are now needed to access land used by the
first nation people. Canada hopes to increase energy exports to Asia and has proposed
to reduce taxation of the LNG terminal. Shell is also leading a LNG project in Canada,
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737
which was boosted by its acquisition of BG Group. (FT 2/3 March)

Pemx, Mexicos state oil company is expected to produce 2.29 9 mbd instead of the
2.43 last year. The state budget is to be rewritten with spending cuts and job losses
expected. Mexico finances a third of its budget from oil. Six out of ten jobs are in the
informal sector. (FT 8 April)
PetroChina Chinas biggest oil major is looking for swaps of its North American
assets with international rivals to staunch losses on high-cost deposits; unconventional
assets in Canada are central to a company that has also suffered from nearly 2 years of
anti-corruption enquiries Executives working in Canada have been detained, big losses
are now expected, hence the wish to restructure and co-operate. (FT 27 March)
Chinas 2 largest state-backed oil traders are dominating crude oil contracts,
helping to lift Mideast oil price. Chinaoil and CNPC bought a quarter of the worlds
global daily demand in April. (FT 29 April)
Shale Pains
The latest data from the U.S. Energy Information Administration predicts that shale
output will decline by 57,000 barrels per day in May. It will be led by losses of 23,000
bpd in the Bakken, a decline of 33,000 bpd in the Eagle Ford, and 14,000 in the
Niobrara.... The total number of active oil and gas rigs fell below 1,000 for the first
time in over four years. The ongoing pain in Americas shale fields are a bullish sign
for oil prices, which have posted substantial gains recently. Oil traders have been
waiting for signs of a genuine decline in production, and we may finally be arriving.
(Oilpricecom 14 April)
Exxon Bidding for BP?
On 6 March it was reported that ExxonMobil was buoyant and weathering the
storm, even showing signs that it was happy about low crude prices. Its CEO Rex
Tillerson advised the world to settle in for a period of low oil prices. Exxon faced no
shortage of acquisitions, and potential sellers were getting in touch. A bid for BP was
not impossible but one researcher suggests five other smallish companies. (Ed
Crooks FT 6 March; A Massoudi FT 9 April)
Shell Acquires BG
Instead Exxon Mobil acquired the British BG group, the oil sectors most
dramatic response yet to the slide in the price of crude. BG is described as
Shells smaller rival, acquired in a 47 bn deal, which will increase Shells
ailing 13bn reserve base by one quarter and production by 21%, Shell had been
struggling to boost production and increase its reserves. However, it has paid a
high price, its plans are based on the assumption of a return to oil price of $90
ab, and some troubled new assets are involved, especially in Brazil and
Australia were projects are experiencing cost overruns and delays. But no
change in dividend policy was expected. Royal Dutch Shell is the worlds
leading private-0wned player in the natural gas sectors with deep reserves,
738
global reach and leading edge technology such as offshore floating production
systems. Bankers and shareholders must be delighted, says Nick Butler. Who is
next? Restructuring is on the agenda. (FT 9 April) The deal is however raising
fear about job losses in Scotland, both companies are operating in the North Sea
Further job cuts there have not been rules out. Speculations that this deal might
happen have been around for20 years, adds Guy Chazan. (FT 10 April)
This deal will be scrutinised by regulators worldwide, but the EU Commission
is not expected to block it but will focus on the combined entitys leading
position in the LNG market and could force divestiture there. Brussels is likely
to become the main regulators In Brazil BG will turn Shell into the largest
foreign oil company, possibly attracting its anti-trust commission In China
mergers are overseen by the commerce ministry and will probably ask Cnooc
for advice which is already a partner of BG which was poised to become
Chinas biggest LNG supplier. A move by Exxon to break up the Shell-BG deal
is not impossible, it has the firepower, but another company is more likely. (FT
10 April)
According the The Economist BG had long been a problem with great
prospects but troubled operations and lately a weak share price. Shell is now
paying shareholders a 50% premium on what their holdings were worth just
beforehand. Shell is now the worlds third largest gas producer (after Gazprom
and National Iranian OC) and ahead of Exxon, Saudi Amoco, Qatar, PetroChina,
BP and Pemex. Gas is now more promising business than oil with growing
markets, abundant supplies and greater environmental friendliness than oil BG
brings promising assets in east Africa, Kazakhstan and Trinidad as well as more
troubled investments in Egypt and more prosperous Australian project
producing gas from coal. Shell is now heavily into offshore gas having had less
luck with shale ventures in China and America Other deal may follow.
(Economist 11-17 April)
And on 11/12 April the FT points out that Shells Ben van Beurden despite
imparting a sense of mission to the deal with BG, Shells share price lost 10%.
Van B is betting on an oil price recovery that may never happen. Asset sales and
cost cuts will not be enough to sustain dividend. The UK Treasury can now look
forwards to a 235 m windfall. (FT Money 11/12 April); and the investing
public will be sacrificed to the oil-money gods. (John Dizard, FTfm 13 April)
Who is Heading for the Exit?
While the rest of the world is heading for the drilling exits four Middle East countries
are preparing to expand market share. The International oil rig count (excluding N
America) has begun to fall and this will inevitably lead to declining oil production.
The decline in drilling will in fact be more pronounced than shown here since in
offshore areas like the North Sea, rigs are on long-term contracts and companies are
currently stacking these rigs. A significant part of the drilling cost is men and
materials and many companies operating offshore are simply choosing to not use rigs
that they have paid for. US oil rig count continues to plunge and total rigs will soon
reach the level of the 2009 lows. Notably gas rig count has now joined in the plunge
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739
and one is left wondering where this will leave US plans for self-sufficiency in natural
gas let alone plans to export LNG. US natural gas production was still rising in
December 2014, according to the most recent data I could find.
The oil price has succumbed to gravity with both Brent and WTI down 4% on
Friday. WTI is back to $45, close to its low of $44.12 reached on January 9th. If that
does not hold then the industry is in for a renewed bout of extreme anxiety and pain.
It has been reported that the IEA was claiming that CO2 emissions did not rise in 2014.
(http://euanmearns.com/blowout-week-63/).
While the IEA want to claim victory in the war against CO2 I tend to wonder if this
is not symptomatic of chronic weakness in the global economy that is implicated in
the precipitous fall in the oil price. Low oil prices are terrible for producers, but for
consumer nations depressed prices present new opportunities. China and India are
expected to stockpile more oil for their strategic petroleum reserves this year.
(Oilprice.com 13 March)
In Houston, an oil town two thirds of the growth in crude production 2009-2014 took
place in Texas, cheap oil has not created disaster because employers keep moving in
because others are already there. Sprawl make for a city that attracts people and jobs,
it can respond quickly to demand for new housing and office space having no zoning
rules. But there is also misery and disappointment, the number of drilling rigs has
fallen by 38% since December; many small manufacturer and suppliers are sure to go
bust. (Economist 14 March)
Growing Unrest in Gulf: Saudi-Iran Confrontation in Yemen
The Saudi Arabias attack on rebels in Yemen threatens to ignite tensions
between regional rivalries in the Middle East. The proximate cause was the
advance by Houthi rebels on Aden where the Yemeni President is located. Saudi
Arabia spent several weeks secretly reaching out to its regional allies to build
support for an attack on the Houthis, signing up support from Turkey, Egypt, and
an array of Gulf States. The advanced knowledge of the United States
government appears to be a matter of dispute, with some top level Pentagon
officials saying they were only given one hours notice before the attack.
Nevertheless, the U.S. is providing logistical support refuelling and satellite
imagery. This attack comes at an awful time which may not be a coincidence.
The negotiations between the P5+1 nations and Iran are coming down to the
wire. The outlines of a deal are visible, but the sides are hoping to use the next
few days to seal the deal. Saudi Arabias attack on Houthi rebels is not just about
Yemeni stability. It is a proxy war between Saudi Arabia and its Gulf allies on
one side, and Iran on the other. .In the meantime, the price of oil spiked by
about 5% after the surprise attack by Saudi Arabia. There is little threat of a
supply disruption through the straits of Bab el Mandeb the Egyptian Navy
moved in to secure the narrow passageway on the same day as the Saudi attack.
Also, the U.S. Navy routinely patrols the waterway, and just across the strait in
Djibouti, the U.S. has a major military base. There is little to no chance that
740
these military powers will allow oil supplies to be disrupted. In that context, the
price spike could be temporary There are still some fundamental reasons to
think that oil prices will remain weak over the next few months. We have
discussed in detail the shrinking capacity of the U.S. to divert oil into storage. In
Edmonton, Canada as well another critical oil storage hub oil storage is at a
record high. Also, Saudi Arabia last week reiterated its position to maintain
production at elevated levels, and even appeared to ramp up production in
February. The supply picture still looks pretty grim. But the big market mover
in the coming days will be the outcome of the aforementioned negotiations with
Iran over its nuclear program. (Oilprice.com 27 March) (OilPrice Intel
admin@oilprice.com)
The Houthis, with Iranian support, ousted the president Mansour Hadi who was
US backed. The Saudis now have 150,000 troops and 100 fighter jets engaged
in Yemen, half of its entire military, and rallied at least another 9 countries,
including Egypt, Jordan and Kuwait to its cause with the US providing
intelligence and logistic support. The only way the region calms down is if the
Saudis and Iranians reach some kind of understandingit is possible for
enemies to talk even as their allies wage war on the battlefields of the Middle
East [reference to nuclear talks].(Time 13 April)
The Saudis find themselves in a precarious position following Pakistans
decision to pursue a $7.5 billion pipeline project with Iran. As Saudi Arabia is
already occupied with the conflict in Yemen, as well as the looming threat posed
by the Islamic State, keeping Iranian regional ambitions in check may prove
increasingly difficult, especially in light of progress made in the nuclear talk
with the P5+1. We also look at the biggest deals, mergers, acquisitions and
technological updates in the energy sector this past week. (Oilprice.com 17
April)
More Oil Price Drop Impacts
Another reason why oil prices may not surge much higher than where they are
now is that Saudi Arabia is clearly stepping up its production levels in order to
keep the pressure on high cost producers. Saudi Arabia is dipping into its spare
capacity the only real reserve potential in the world in order to raise output
to their highest levels in decades. Those additional flows, pushing OPEC
production well above its stated quota, will keep the market saturated. Over the
longer-run, if Saudi Arabia produces flat out and shrinks its spare capacity to
low levels, the markets will grow nervous about inadequate backup supplies and
will bid up oil prices. But in the near-term, higher Saudi output will keep prices
from rising much beyond the $55-$70 range. Spare capacity is particularly
important to guard against unexpected geopolitical events. The war in Yemen
which is not affecting oil supplies at the moment and in all likelihood wont in
the future is an example of one type of unforeseen event that can breakout with
little warning. Although Yemen is not a significant oil producer, the Gulf of
Aden sees a lot of oil traffic an estimated 4.7 million barrels per day. Saudi
Arabia, despite announcing it was calling off airstrikes, continued to pound
Fuel for Thought
741
Houthi rebels in Yemen this week. The violence is likely adding a few dollars
per barrel to the price of oil, a geopolitical risk premium that had become all too
familiar in recent years but largely absent over the last 9 months amid a glut in
supply. (Oilprice.com 24 April)
The Gulf states are beginning to feel the pinch, in spite of official
pronouncements to the contrary, spending is being trimmed and capital
expenditure is being rescheduled, investment plans are becoming more cautious
The oil slump, according to IMF, has translated into a 380bn revenue shortfall,
increased spending was mainly in Qatar related to the expected Fifa World Cup
in 2022 Oman and Bahrain are most hit by lower oil prices. (FT 28 April)
The Gulf States now seek UK a security pledge if nuclear accord implemented,
pressing for weapon sales to give them qualitative advantage vis-a-vis the
Islamic Republic. US officials have promised to oppose the expansion of Irans
regional influence, e.g. by supporting Hizbollah in Lebanon. USA has already
increase military aid to Egypt and supported action in Yemen. But Obama
believes ultimately there will have to be dialogue between Iran and Saudi
Arabia. (FT 2 May)
On May 2 the new Saudi king Salman bin Abdel Azziz as-Saud set up a supreme
council for Saudi Aramco, the state oil company, headed by his son, deputy
crown prince also called Salman to oversee the oil company via this Council
which also includes ministers of finance, economy and the governor of the
central bank, among others. UK observers doubt that SAs oil policy will change
substantially, it has always been a political decision agreed by the very top level
executive and the oil ministry. The decision let market forces rebalance the
global supply paved the way for the prices of Brent crude to drop to $45 ab
earlier this year, from $115 ab in June. (FT 2 May)
Tehran Appeals to Saudi King
On 10 April Tehran urged the Saudi monarchy to stop genocide in Yemen, accused
US of distorting the nuclear deal and protested against the Saudis denying entry to
Iranian pilgrims to Mecca; and Iranian Parliament called for ending state-organised
pilgrimages to Saudi Arabia. In Cairo fears were expressed that the proxy war between
the Saudis and Iran will create conditions for the expansion of jihadi. Isis is already
expanding in Syria threatening Damascus. (FT 10 April)
Iran-USA Nuclear Negotiations Affect Oil
The deadline for reaching agreement with was 24 March, and the outlines of a
deal are ready. Britain, China, UK, France and Germany are also involved and
met on 4 march, the aim being to make the time taken for Iran to make weapongrade uranium. In return for fewer sanctions, Iran would cut the number of
centrifuges and export its 2,00kg stockpile of low-enriched uranium to Russia or
converted to uranium oxide. Also, changes would have to be made to one reactor
so that no plutonium could be produced, all this to remain in force for 10 years
when staged relaxation would begin and negotiations would start again. In return
Iran demands an end to all sanctions immediately. No reliable inspection regime
742
has as yet been agreed. (Economist 7 March)

The above talks have reached a crunch point (FT 11 March) and beyond with
agreement said to be edging closer but it is still not known what form the deal
will take. Most expects a fact sheet rather than a formal memorandum and
certainly no signed agreement. ..they were continuing on 2nd April when a
framework agreement was reached to be concluded in June. (FT 28/29 March).
The sanctions imposed on Iran are somewhat leaky but the country has been
working hard to prepare its oil fields for their lifting. There has been an increase
in capacity but getting back to 1970 production levels will be a long job
Chinese and Russian involvement does not make up for absence of big Western
companies who are currently looking for ways to cut their expenditure Big
changes in oil and gas laws by Iran would be required. Better incentives will be
needed. (Economist 4 April)
Iran has the right, as a signatory to the Non-Proliferation Treaty, to process lowgrade uranium for peaceful purposes. (Time 13 April)
According to US Energy Info Administration Iran has the worlds fourth largest
crude oil reserves and the second largest natural gas reserves, but its exports
have been cut by half because of sanctions. (Time 13 April)
Although Iran has been producing oil since the beginning of the 20th century, it
still has vast oil and gas reserves that have been massively underdeveloped.
Owing to a combination of international isolation and a dearth of capital and
expertise, much of Irans oil and gas reserves have not been picked over. If a
nuclear deal can be reached with the West, the door could swing open for a few
lucky companies. (Oilprice.com 24 April)
Graft Prevails - The Petrobras Saga
On 20 April is was reported that investor optimism was rising as the embattled
state-owned oil company was expected to emerge from the crippling corruption
scandal without defaulting on its $137 bn debt. The company must release its
financial results by end of May, which may shift its problems from legal to
operational challenges including increasing output. (FT 20 April)
Brazils greatest corruption scandal was fed by Petrobras raising of the biggest
ever equity bid of $70bn which meant easy pickings given the easy credit and
soaring commodity prices enjoyed by Brazil and fellow Bric nations. Brazil is
experiencing its biggest ever corruption scandal, while in Switzerland a whistle
blower revealed almost $15bn of Venezuelan money stashed in HSBCs private
bank. In Argentina the wealth of its President has almost multiplies 20 fold
since 2003. Mexicos President wife house belonged to a construction company
favoured with public contract, and the son of Michelle Bachelet of Chile made
a quick buck from $million property deal and is accused of influence peddling
One estimate is that graft costs Latin America about 2% of GNP per year, and
regional GNP has tripled to $6tn in past 145 years. (J. Rathbone FT 30 March)
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Iraq Facing Crisis

In the Middle East, Iraq is facing an economic crisis. The combined effect of low oil
prices and the security threat presented by the Islamic State have sapped the Iraqi
government of much needed revenue. Iraq survives on oil exports, so just like other oil
producers it has seen its budget upended because of the price collapse. The situation
has become so bad that the Iraqi government reportedly sent letters to the major
private oil companies operating in the country, asking them to cut back on their
investment. The reason for such a seemingly counterproductive request is because the
government can no longer reimburse the companies for the costs of developing oil
fields. As a result, several major oil companies operating in Iraq have proposed
significant spending reductions and project delays. BP (NYSE:BP) offered to pare
spending from $3.5 down to $3.25 billion. Russias Lukoil (MCX: LKOH) plans on
reducing spending from $2.3 down to $2.1 billion. ExxonMobil (NYSE: XOM)
decided to leave its spending levels unchanged. Royal Dutch Shell (NYSE: RDS.A),
on the other hand, offered the largest reduction, dropping spending from $2.4 billion
down to just $1.5 billion. For now, the largest oil fields in Iraqs south are operating
normally, but if investment is scaled back, Iraqs ambitious plans to ramp up
production over the long-term will take a hit. Consequently, the projections for future
Iraqi oil production will likely need to be revised in the months ahead. Back in the
U.S., the oil industry is stepping up its campaign to convince the federal government
to allow crude oil to be exported from American shores. (Oilprice.com 13 March)
Russian Oil Pain and Delay
Russia is also continuing to show signs of pain from low oil prices. Reuters confirmed
that Russian President Vladimir Putins signature natural gas pipeline to China will be
delayed. The news agency reported several weeks ago that a Russian official close to
the matter hinted that Gazproms Power of Siberia project could be delayed as
Russia focuses on a western project called Altai. Altai is set to be completed by 2019,
sending 30 billion cubic feet of natural gas to western China. However, the much
grander Power of Siberia project that will connect gas fields in eastern Russia to
eastern China will now be delayed by three years, pushing its completion date back to
2022, a Gazprom spokesperson confirmed. Separately, state-owned oil firm Rosneft
is delaying another massive project. The combination of sanctions and low prices for
liquefied natural gas (LNG) has upended the economics of the Sakhalin LNG
expansion. Sakhalin, an island off the Pacific Coast of Russia, is the site of a large
LNG facility that Rosneft was developing in conjunction with ExxonMobil (NYSE:
XOM). The project, which consists of 5 million-toe-per-year liquefaction capacity,
was originally set to come online in 2018, but will now be delayed by at least two
years at least, or more likely it will be postponed for three to five years because of
lack of funds and low fuel prices, a Rosneft source told Reuters. Officially, Rosneft
insists that nothing is delayed. But with a major Arctic oil project already delayed, and
now with the natural gas pipeline to China and Sakhalin also facing significant delays,
it appears that sanctions and low oil prices are inflicting serious damage on Russias
long-term energy picture. (Oilpricecom 7 April)
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US Oil Company Losses Started

The earning of American production operations of the worlds largest oil
companies have turned to losses, with Exxon Mobil and ConocoPhillpis
reporting losses on their oil and gas production at home RD Shell has disclosed
a loss of $1.1 bn in the upstream business in America and Statoil has also
reported losses from out upstream operations in North America and Gulf of
Mexico, BP reported a $545 m loss on its US production business and Shell a
56% drop in earning. No ones costs can be covered by current gas prices, said
one expert; everybody is showing either a loss in the Americas, or very close.
Yet Shell and Statoil remain optimistic. assets can improve significantly. But
most companies are cutting costs. (FT 1 May)
Nevertheless, ExxonMobil was the top payer of dividends taking the crown from
Apple according to S&P 500. Returning capital to shareholders has become
popular as investors seek blue-chip companies that offer regular pay-outs.
Spending on large, long-term projects has declined. There are not a lot of places
to go for [unearned] income. (FT 2/3 May)
BP Mexican Gulf Troubles Not Yet Over
On March 10 Ed Crooks reported on the culture change inside BOP because of
the accident.. At the time, Lorde Browne talked about fundamental changes,
his successors tried to deliver (Hayward and Dudley) with BP now attempting
to remake itself follow in the footsteps of Exxon and Piper Alpha. No evidence
of this having happened is given, but BP now has Operating Management
System which is to deliver safe, responsible and reliable activity. Before the
disaster it had a number of management systems but the new one has not yet
been tried. Employees have undergone much more training and have to accept
career-changing shifts in reporting structures and jobs. This goes to the very core
of the organisation and also its profitability. Allegedly, competitors are still
playing catch-up, not with BO but with Exxon. (FT 10 March)
BP is accused by USA authorities of misinterpreting and misapplying data to
show that the Gulf of Mexico has recovered faster than it really has, following
the 2010 oil spill. At issue is the Natural Resources Damage Assessment which
is to produce the final official reckoning of the harm done. BP has already spent
$1.3bn on funding NRDA but there is no end in sight, and there could be another
trial at the end with BP paying both costs and making good the damages. BP
says the data show that there had not been long term damage to fish or bird
populations. These conclusions were inappropriate and premature, say
opponents. According to BP affected coastline had shrunk to o.7 miles by early
2014 with only 1,100 miles of the 16,000 miles of shoreline including bays and
inlets, saw any trace of oil, and most of that was only trace or light oiling. Crude
evaporated quickly and was broken down, says BP, and consumed by microbes.
Many scientists are and presumably want to continue to be involved rigorous,
scientific process of injury assessment. The trustees of NRDA want everything
to be restored ad before the leak, and all who have suffered damage, to be
compensated. $47 bn have so far been paid out. (Ed Crooks FT 18 March)
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But Oil Refiners Experience Healthy Revenues

After a long period of gloom oil refiners in Europe, e.g. in Sardinia are experiencing
healthy revenues, making up the income of oil majors from losses upstream. As input
costs have declined with the fall in crude prices in mid-2014, there has been a pick-up
in refining margins since December. There has been rising demand for petrol and
diesel in Europe. Not only refinery operators and traders like Vitol and Gunvor have
benefitted, but also oil majors Shell and Total. Already in the 4thh quarter last year
there had been a 9% increase in output. But Total remained unconvinced that the high
margins for refiners would continue for long. There is still overcapacity in Europe and
additional capacity is coming on stream later this year in Middle East. The refinery in
Sardinia owned by Sars of Italy has the largest refining capacity in the Mediterranean
and is well placed for exports to Russia. Refining problems in Venezuela and a fuel
crisis in Nigeria are also helping the demand for European products, with Russia a
major destination. (A Raval FT 18 March)
Cheap Energy Matters Most to the Poor
Hence the hopes of the coal industry rested on growing demand in emerging
economies; but even here decline in demand for coal is faster than expected because
of growth in energy efficiency, pollution control measures and stiffer competition.
The tide is turning against coal in most countries. The Dow Jones Total Coal Market
index has fallen by 67% in last 5 years. High cost deep mines are worst hit and in
America 24 coal corporations have gone bust in last 3 years. In China, consumption
dipped slightly in spite of economic growth. By next year all coal-fired plants in
Beijing will have closed down. Still, coal continues to provide 40% of global
electricity and the amount of electricity generated by cleaner ultra-supercritical
plants is increasing by burning powdered coal at very high temperatures. In the USA
the Supreme Court is hearing a challenge by the industry concerning EPA regulation
that allegedly fail in their duty to take cost of environmental measures into account.
The green lobby wants 80% of coal to stay in the ground. They are trying to control
the flow of capital towards coal and this is the greatest threat to the industry. Carbon
tracker hopes that $100 billion worth of planned capital spending risks being stranded
by 2035. (Economist 28 March)
Is Coal Dead?
Titled Coal Is Dead: Its Time to Accept It, the column prematurely declares the
demise of the industry, which in truth is a long way from dead just yet, but it does offer
some insight into the very difficult straits facing coal producers. Heres an especially
astute passage:
The big problem for coal isnt regulation, its competition. Coal supporters like
to blame regulation for coals current demand problems. Thats part of the
problem, but the bigger problem is competition. As coal plants age, it is now
more cost-effective to build natural gas plants, wind, and even solar power
plants to replace them.
The real culprit isnt the Obama administration. Its not Big Green, regulators or
crazed mine inspectors. Its competition, plain and simple, and its global in scope. The
746
commentary explains the investment case against coal, which is no longer a costefficient source of energy, having handed that mantle to wind and solar, and it warns
investors off coal stocks that include Peabody Energy, Arch Coal, and Alpha Natural
Resources. It goes so far as to recommend stock picks in the solar-energy sector, an
unexpected piece of advice, to say the least, on a site affiliated with Fox News.
Incidentally, Sun Power and Sun Edison, two of the big U.S. solar companies, are
headquartered in California, the state Fox loves to hate. The overarching truth about
coal is that the worlds biggest and fastest-growing countries, most notably China and
India, are turning away from it because coal is such a drag on their economies.
(Excerpt IEEFA Org 17 April)
More Coal Burn in South Africa
One of the most energy-starved regions on the planet, southern Africa, is gearing up
to build a fleet of more than a dozen coal plants to eliminate rolling power cuts. South
Africa, Botswana, Malawi, Mozambique, Zambia, Zimbabwe and Tanzania are all in
the process of putting together agreements with independent contractors to build coalfuelled thermal electric plants. If theres one thing that southern Africa has plenty of,
its coal. According to the Southern Africa Development Communitys master plan for
energy, proven coal reserves are about 32 billion tonnes of economically recoverable
reserves; the estimated total resources are more than ten times that figure. (Gavin du
Venage, The National, 25 April /GWPF)
Coal Optimism in Pakistan: Thanks to China
Out of the total $45 billion investment in Pakistan, China will invest up to $37 billion
in various energy projects while give $8 billion concessional loan for infrastructure
development projects of Pak-China Economic Corridor project. He said that the
energy projects with Chinese support would generate a total of 16,500MW electricity,
adding the work on 10,400 MW projects would be completed by 2018 in the first
phase. While projects of 60,00MW will be completed in the second phase, he added.
In Thar, Ahsan said that 10 coal-based power plants will be installed on commercial
basis which will generate up to 6,600MW electricity from coal. (Business Recorder,
I8 April)
India Wants Coal
A new era of development is set to dawn on the underdeveloped interior Sindh,
specially Tharparkar, as inclusion of Thar Coal mining and power project in the
prioritised energy schemes under the multi-billion China-Pakistan Economic
Corridor (CPEC) will help overcome financial challenges being faced by it. This
venture will open not only unprecedented economic opportunities but also prove
to be a panacea for energy shortages that are stifling economic growth.
(Associated Press of Pakistan, 19 April)
The Geological survey of Pakistan reveals that 175 billion ton of coal is buried
under the Thar Desert. These coal reserves alone are equivalent to total
combined oil reserves (375 Billion Barrels) of Saudi Arabia and Iran. The coal
deposits in Thar can change the fate of the country if utilised in a proper way.
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747
The coal reserves at Thar Desert are estimated around 850 trillion cubic feet
(TCF) of gas, and are worth USD 25 trillion. According to experts, if this single
resource is used properly, we not only can cater to the electricity requirements
of the country for next 300 years but also save almost four billion dollars in
staggering oil import bills. (Rafaqat Hussain, Pakistan Observer, 26 July 2014)
India is hoping a new China-backed multilateral lender will fund coal-based
energy projects, an official said, putting it in direct conflict with the World Bank,
whose chief has maintained that it would stick to its restrictions on such lending.
A senior Indian official told Reuters the Asian Infrastructure Investment Bank
(AIIB), sponsored by China, is expected to allow funding of coal-fired power
plants that the World Bank has almost totally blocked. When you have 1.3
billion people starved of electricity access and the rest of the world has created
a carbon space, at this point denying funding is denying access to cheap energy,
said the official, who spoke on condition of anonymity. (M Kumar and T
Munroe, Reuters, Nov. 2014)
The End for Coal in UK
Domestic production is approaching the end in the UK, an industry that once
employed more than 1 million people and drove the first industrial revolution will
disappear with little fanfare but much local bitterness. Coal will be imported for the
few remaining power stations. No more smog but feelings of betrayal. (Giles Wilkes,
Wanted: bankers to electrify the British economy, FT 7/8 March)
But Not in India and Japan
India wants to double coal productions within 5years. Better energy supplies are
essential for turning India into a manufacturing powerhouse as is planned by
prime minister Modi. 54.5% of India electricity is derived from coal, compared
to 1.3% from nuclear and 2% from renewables. Modern coal mining machinery
is about to arrive from China. In the recent past coal mines had been handed out
for free, and the cancellation of this highly corrupt policy last year hit many of
Indias most powerful industrial tycoons hard, the resulting scandal even
touching the previous PM. Iron and bauxite are now also to be auctions off to
gain income for government. India is the worlds third largest coal producer
after China and the USA, followed by Australia and Indonesia. (FT 1 April)
Indian Prime Minister Narendra Modi signalled on Monday he would not bow
to foreign pressure to commit to cuts in carbon emissions, instead pledging to
use more clean energy and traditional methods to lead the fight against climate
change. The Indian government has said it needs to emit more to industrialize
and lift millions out of poverty. (Reuters, 6 April)
Greenpeace Indias all seven bank accounts have been frozen with immediate
effect. The Central government has suspended the registration of the
organisation, including its branches and units for six months beginning
Thursday. The order comes against the backdrop of government reports raising
concerns that the United Kingdom has been showing interest in the
organisations India operations.(-D.h Pandey, The Hindu, 10 April)
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The Indian government has frozen seven bank accounts belonging to

Greenpeaces India arm and suspended the environmental groups foreignfunding license for allegedly violating rules governing overseas currency
transfers. It is the latest move to block activities of non-profits that some
officials regard as anti-development. (i.e. assisting in stopping the development
of coal in central India). (J. Sugden, WSJ/ GWPF 10 April)
One country not turning away from coal is Japan. The island nation has no
significant indigenous energy sources and has relied on energy imports to power
its modern economy. But after shuttering more than 50 nuclear reactors after the
Fukushima meltdown, Japan has needed even more imported fossil fuels. As it
struggles to bring some of its reactors back online amid widespread public
opposition, Japan is increasingly turning back towards coal even as much of the
world moves away from it. Japan could see 7.26 gigawatts of new coal capacity
over the next ten years. (Oilprice.com 13 March)
Battling for Return to Nuclear in Japan
A Japanese court has blocked the reopening of a nuclear power plant on the west coast
of the main island although it had obtained permission from the nuclear regulator, a
blow to the Abe government. An industry that once produced nearly a third of Japans
electricity remain paralysed TEPCO wants one power station to be restarted; its losses
are he and wants to see all reactors restarted now and has poured $2 bn into reinforcing
the facility against earthquakes and tsunamis. On April 22 a court in Kyushu had
rejected attempts to block the restart of 2 reactors and Kyushu Electric expect to
generate power again in July A different ruing was handed down a week earlier in
Fukui province and restart of 2 reactors was refused. Government hopes to continue
with the nuclear restarting programme, with new regulations being described by
governments among the worlds strictest. (Economist 18 and 25 April)
New Nuclear Trouble for Hinkley and UK Power Supply
There seems to be more trouble brewing for the new nuclear power plant
planned for Hinkley Point, with news that a very serious fault has been found in
the pressure vessel at the Flamanville plant in France. Flamanville uses the same
reactor as the one proposed for Hinkley. Hinkley is already running late, and
there are still challenges to overcome with Austria objecting to the subsidies
agreed. There are now fears the Chinese may pull their funding out. With the rest
of the UK coal plants due to shut in the next few years, the challenge of keeping
the lights on in ten years time is becoming ever more difficult. (Paul
Homewood 21 April)
The European Commissions decision on Hinkley Point was published in the
Official Journal on Tuesday, and there now commences a two month period
whereby potential objections from Austria, Luxembourg and other entities can
be recorded. If the decision is contested it may prove a fatal blow to the UKs
nuclear power ambitions due to the lengthy delays that would entail. Dr Dorte
Fouquet, Partner, BBH Brussels who has been advising Vienna on the matter of
their objection to Britains flagship nuclear power project on the basis of State
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749
Aid contravention, told an audience at Platts Power Summit in central London

that if Vienna presses on with its challenge it could set back construction of the
Hinkley Point C project for around 8 years based on average case statistics. She
added that were it to go unchallenged this decision would be practically the end
of the internal market. The Austrian government has already indicated in recent
weeks that it will not be deterred in pursuing action against the Commission
once the decision enters official law. Their challenge is a curious mix of both
opposing nuclear, and opposing subsidies. I say curious because there is no EU
law prohibiting nuclear, while the subsidy mechanism, Contracts for Difference,
has not been challenged when it has already been used for renewable energy
projects. If the Austrians do decide to challenge, then it leaves UK energy
policy in tatters. Hinkley Point was scheduled for coming on line in 2024, but it
seems it could be put back to after 2030. Where the hell we are going to get our
energy from in the meantime is anybodys guess. (Paul Homewood 30 April)
GREEN TECHNOLOGY AND FUELS

Unfortunately the rules of the game are not set by the rules of scientific
knowledge but by the rules of economics and development which work on
perception, and where money goes is not always where the best technology is.
The best technology does not always win. (Prof Bailey on the use of graphene in
a lightbulb, Interview FT 28/28 March; graphene was first isolated in
Manchester in 2004 by 2 Russians who received a Nobel Prize.
Asias contribution to saving the planet has not been in innovation but the
massive application of old-fashioned Chinese overinvestment to renewable
energy businesses... by last year there were more than 5000 Chinese solar
manufacturersand helped to spread low-costs solar power across the globe.
(Book review of The Greening of Asia FT 4 May)
Most Innovation in China
KIC InnoEnergy, an EU-funded company that invests in innovative energy startups
and educational programmes, conducted a three-year global study to find out who are
the most innovative players in R&D and industry in sustainable energy. And guess
what? In research the number one institution in the world is ... the Chinese Academy
of Sciences. Not only that, but overall Chinese research institutions proved to be well
ahead of their EU and US peers in a wide range of sustainable energy areas, including
wind, ocean and solar power, smart grids and intelligent buildings. In a fascinating
interview we had with Diego Pava, CEO of KIC InnoEnergy, he reminded us that all
the top Chinese policymakers are engineers. In Europe they are mostly lawyers and
economists. Some consolation: in industrial innovation Europe and the US are still
ahead of China in sustainable energy. But if we are to survive in this Darwinistic
race, says Pava, we should start to act a lot more forcefully. For example, impose
tariffs on products from countries that play by unfair rules. (Energy Post 13 March)
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CCS Needs of the Sword of Damocles

The Energy Technologies Institute, once so optimistic about this technology in
the UK, now sees a long way to go before this technology can be applied at a
commercial scale. Driven by the target of an 80carbon dioxide reduction by
2050, the technology will certainly be needed, the author asserts while
admitting that this will only happen if a low carbon target is linked to the
security of future energy supplies . The heading of article paints a different
picture, asserting that CCS is a vital part of future UK energy infrastructure .
Too much money and too many reputations may indeed have been invested in
possible another white elephant or vanity project, now waiting for the needed
finance. The author pleads We are currently appraising submissions from
organisations after we announced plans to seek partners to deliver a project to
identify the next phase of sited deep under the seabed in the North Sea and other
UK waters to sore the carbon dioxide emissions from coal and gas power
stations and heavy industry plants The project is being funded with up to 2.5
mn from the DECC. Nothing will happen without government intervention, the
author admits.
(Andrew Green, CCS Programme manager Energy World March)
A second article on CCS, [in contrast to above] proclaims that collapsing prices
threaten CCS optimism. This refers to the Boundary Dam project in Canada,
meant to be the first commercial CCS plant, but now likely to be uneconomic.
On the other hand, the it is also claimed that the CCS technology is increasingly
being deployed across a wide range of industries and will have bright future if
the EU does eventually get behind CCS given that and the sword of Damocles
hangs over the entire CCS debate, namely the environmental catastrophe that
could await the world if it uses up is remaining reserves of fossil fuel. After all,
uncited scientists have calculated that 80% of coal reserves should remain in the
ground and the Middle East should agree to keep much its oil and gas reserves
untouched. (N. Anyadike Energy World March)
A third reports outlines CCS developments at the Norwegian Mongstad, at
Peterhead in Scotland where Shell and DDE are planning a CCGT power station
that is to discard CO2 into the North Sea soring it in a depleted gas field called
Goldeneye, if built.and at the White Rose project associated with Drax power
station in Yorkshire where, if built, a 2bn project would capture 2 million
tonnes of CO2 a year. The analysis concluded that CCS is now at the cusp of
widespread deployment. Will critical mass, as hoped, be reached in 20016?
(David Appleyard Energy World March)
CETO Submarine Wave Power Off Western Australia
Making use of the Roaring Forties Carnegie Energy of Perth has been working since
1999 on Ceto technology giant floats 11 m across and resembling macaroons. They
generating 240kW per buoy and are tethered to the seabed from an island. Made of
steel and filled with seawater and foam, they are slightly heavier than water. As
swimmers know, one dives under nor through a wave the swell is then enough to
generate power. Military bases around the world may be. Near Perth They already help
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to power a desalination plant on Garden Island and Australias largest naval base
which gets electricity and desalinated water. The future is to be wave farms.
(Economist 13 March)
From Energy Generator to Infrastructure Company?
Many such reports from around the world California, Canada, Australia, Europe
all have with the same message: renewables can deliver our energy for electricity,
heating and transport. What does this mean? Well, the whole point about renewables
is: no fuels renewable energy production is a manufacturing process rather than an
extraction process. Which means: anyone can get in on the action. Oil giants, oil wars,
oil shocks, oil spills can all go out the window. It implies that the most important
energy issues to be resolved come to be focused around distribution. How to deliver
energy to the customer. In other words, around infrastructure. Some key questions:
should we have a large, interconnected grid across Europe, to make it possible, for
example, to transmit offshore wind from the North Sea to the Ruhr area, or solar power
from Spain to the UK? Or should we invest more in distribution grids, smart grids,
micro-grids even? Or both? How will electric transport be connected into this system?
How important are our gas grids in this constellation? Which brings me back to my
original question. Could a company like Shell play a part in developing the new energy
infrastructure that Europe and other parts of the world will need? (Energy Post 24
April) <info@energypost.eu>
UK Green Technology Research Sustained
UKs largest sustainable energy research centre receives funding boost of more than
600,000 for the Universitys Centre for Renewable Energy Systems Technology
(CREST0) to further develop its research in next generation photovoltaics. Nanoco
Group Plc, which designs, develops and manufactures quantum dots, solar inks and
other nanomaterials, received a grant of 399,562 from Innovate UK (formerly the
Technology Strategy Board) as part of its joint project with CREST to progress its
work in printable solar cell technology.The aim of the two-year project, which has
a total value of more than 800,000, is to optimise the firms semiconductor material
which converts sunlight into electricity. The technology consists of nanoparticles of
CIGS (Copper, Indium, Gallium and Selenium), which is used to create a printable ink
to fabricate thin film photovoltaic modules. The ink can be applied to glass surfaces,
flexible, thin metal sheets or polymers. These can then be used on structural fabrics on
buildings or covers for car parks. CREST has also been awarded a grant of 206,631
from the Engineering and Physical Sciences Research Council (EPSRC) to assist
Nanoco to increase the efficiency of its solar ink. (Loughborough University 5 May)
Eco-Friendly Lorries?
The European Parliament gave its final approval to new EU rules for safer and more
eco-friendly lorries, the long-haul tractor-trailers designed to transport cargo.
Manufacturers can develop more aerodynamic trucks which will reduce fuel
consumption, cut emissions of greenhouse gases, and enhance road safety. (ENS News
Editor 18 March)
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Recycling Drops Needs Encouragement

Most plastics are derived from oil, and when prices were high, recycling was all the
rage. This is coming to an end. Will higher landfill taxes keep the recycling industrysorting, shredding, pellet making and reuse , making containers going? There has
already been a drop in demand for recycling and recycled materials and the industry
is calling for more legislation to enforce the reuse of waste materials. (FT 1 May)
UK Modular Nuclear Reactor Progress
A small home-grown modular reactor is to restore the fortunes of the stalled nuclear
stations programme in UK and its growing reliance on foreign firms. The proposed
small modular reactor would be much cheaper and could be built in under seven years,
it is claimed by Rolls-Royce and Sheffield Universitys Nuclear Advanced
Manufacturing Research centre. Similar to units used to propel nuclear submarines.
Many small reactor units could be combined and while considered an attractive
proposition, MPs considered it commercial viability still unclear but called for more
research in March. Similar nuclear engineering research promising a 100% British
made small reactor is also going on at Newcastles Penultimate Power UK, an industry
consortium which expects its electricity costs to be comparable with offshore wind.
The current UK nuclear programme Is not making speedy progress: the French and
Chinese are still haggling over costs for the planned new conventional power station
at Hinkley Point where 4000 construction workers there have been laid off by EDF.
(FT 8 April)
About Grids and other Inventions: Obliteration
One of the key issues faced in the energy sector today: what will be the future role(s)
of the electricity grid, or rather, the grids, because there are different types of course:
distribution, transmission, interconnection, micro, smart. Energy Posts Brussels
editor had a fascinating interview with someone who might well be called Mister Grid:
Andr Merlin, who is currently President of Medgrid, a consortium of companies
(including Alstom, EDF, Siemens and Areva) who want to create new highways for
sustainable electricity in the Mediterranean. But he is also former Chairman of both
RTE, the French TSO, and ERDF, the main French DSO, as well as former President
of CIGRE, the global association for high-voltage power grids. Merlin believes that
expanding the main grids the interconnections between countries is key not just to
the integration of renewables in Europe, but also to the creation of a common
European energy market (Energy Union). To ensure that the grid interconnections
will be able to play this key role (as vectors of solidarity), their development should
become a shared competence of the EU and individual Member States, says Merlin.
He thinks the EU should set up regional (i.e. supranational) Independent System
Operators, like in the US, which should be responsible for investments and operations.
An intriguing suggestion. Some people of course have a different view. They believe
the future rather lies in decentralised power production connected by local smart
grids, with a strong role for demand response systems. This, however, says Merlin not
realistic, and even, for the moment, utopian. So what to think of the vision of
someone like Tony Seba, famous American hi-tech guru and entrepreneur? In his new
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book Clean Disruption, Sheba predicts that Silicon Valley will obliterate the
existing energy industry. Solar and wind (with battery storage) will take care of all
power needs, he writes, and self-driving electric cars will relegate the current car
industry to horse-and-buggy status. And this by 2030! Over the top? Perhaps. But
Sebas argumentation is interesting. (Excerpt Energy Post 17 April) Energy Post
<info@energypost.eu>
CARBONPHOBIA: BENEFICIARIES AND ENEMIES

The new security environment is not just bad weather, its climate change,
according to the Head of the Estonian Defence Force. (The Economist 7 March)
Lessons need to be learnt [to deal with climate change] from other fields, such
as the abolition of slavery. (Jim Skea cited in Energy World March)
Five billion people are still heating water and scrubbing clothes by hand, while
one billion use half the worlds energy. (Glen Cayley Shell UK and Ireland, in
Energy World March)
Everything Bad Caused by Climate Change
According to Newsweek:
The horrific Ebola outbreak was a function of rising CO2 writing, Ebola and
Climate Change: Are Humans Responsible for the Severity of the Current
Outbreak? This March they hawked the notion that the brutalities of the War in
Syria are due to global warming firing off that Climate Change Helped Create
Conditions for War in Syria, Study Suggests. And now, with tragic deaths from
the earthquake-caused avalanche in Nepal, not even the ground we walk on is
safe from the devastating effects of climate change, as Newsweek blathers
More Fatal Earthquakes to Come, Warn Climate Change Scientists: Climate
change may play a critical role in triggering certain faults in certain places
where they could kill a hell of a lot of people, says Professor McGuire. Some
of his colleagues suspect the process may already have started.
http://www.newsweek.com/nepal-earthquake-could-have-been-manmadedisaster-climate-change-brings-326017.html (WUWT 29 April)
We must give up the greedy behaviour that was so necessary for our huntergatherer ancestors to survive and instead become truly social beings, living
together in comfort and sustainably, without using fossil fuel. (Excerpt from
Vatican statement on Climate Change, April 2015)
It is an absolute requirement to restrict global warming to 2C; to do so will
require action and co-operation from the highest-emitting companies. (Alan
Brown, chairman of CDP and a governor of the Wellcome Trust, while admitting
that majority of dirty companies from whom we are asked to divest, are
essential to the economy and play an important role in securing a low-carbon
future. Is this a call for more subsidies? (Ftfm 4 May)
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Divestment Campaign Dismissed

W. Happer, Chairman of the George C. Marshall Institute, is leading an effort to
persuade American museums to reject calls in an open letter dated March 24, 2015, by
a number of scientists that U.S. museums of science and natural history divest
themselves of investments and donations from fossil fuel interests. Not only would
such an ill-advised move deny these vital American institutions much-needed funding
to keep them open to the American public, it would also lend credence to the erroneous
belief that fossil fuels are a great evil rather than the only cheap and efficient form of
energy readily available to continue to lift hundreds of millions of our fellow human
beings out of a life of poverty, starvation, and disease. Professor Happer, along with a
number of other members of the Marshall Institute board and distinguished scientists,
responded to the open letter with one of their own on April 16, 2015, and urged the
boards and management of Americas science and natural history museums to reject
the exceptionally bad and misguided advice in the letter. (George C. Marshall Institute
16 April)
Glasenberg, CEO of Glencore, said although climate change issues are part of the
political, societal and regulatory landscape, we do not believe that the global energy
reality will economically support carbon measures that would prevent us from fully
utilising our fossils fuels reserved. The FT added a quote by the chairman of Carbon
Tracker, Jeremy Leggett [Ed.: solar energy entrepreneur and Greenpeace hero of long
ago], saying that high cost producers (or carbon fuels) could find it difficult to make
economic returns or meet investment hurdles. (Quoted in FT 1 May)
And An Ecomodernist Manifesto: The New Optimist Religion?
To say that the Earth is a human planet becomes truer every day. Humans are made
from the Earth, and the Earth is remade by human hands. Many earth scientists express
this by stating that the Earth has entered a new geological epoch: the Anthropocene,
the Age of Humans. As scholars, scientists, campaigners, and citizens, we write with
the conviction that knowledge and technology, applied with wisdom, might allow for
a good, or even great, Anthropocene. A good Anthropocene demands that humans use
their growing social, economic, and technological powers to make life better for
people, stabilize the climate, and protect the natural world. In this, we affirm one longstanding environmental ideal, that humanity must shrink its impacts on the
environment to make more room for nature, while we reject another, that human
societies must harmonize with nature to avoid economic and ecological collapse.
http://www.ecomodernism.org/manifesto/ (From Climate Etc 20 April)
UK Science Lobby Joins Earth League to Prepare for Paris
The Earth League, a consortium of 17 world-leading scientists including Prof Sir
Brian Hoskins, have drawn up a wish list of the essential elements that should lie at
the heart of the global climate deal to be agreed at the UNFCCC COP 21 negotiations
in Paris this December. This list includes not only scary prophesies but 8 policy
proposals. The Earth Statement, released to coincide with Earth Day, summarises
recent science on climate change, particularly regarding risks of impacts, such as sealevel rise and potential tipping points in the climate system, which may lead to
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irreversible changes. One of the tipping points highlighted in the statement is the
melting of parts of Antarctica. Recent research, such as a study by Prof. Martin Siegert
from Grantham Institute on melting of the Totten Glacier in East Antarctica, suggests
that ice melt in Antarctica has reached a point where it may now be irreversible.
According to the Chair of the Earth League, Johan Rockstrom, we are on a
trajectory that will leave our world irrevocably changed, far exceeding the 2C mark.
This gamble risks disaster for humanity with unmanageable sea-level rise, heat waves,
droughts and floods. Later this year governments will meet in Paris to agree on a deal
aiming to limit global warming to 2C, an internationally agreed threshold for
avoiding dangerous climate change. The statement calls on world leaders to step up
their ambition to ensure an equitable and science-based global climate agreement in
Paris, and outlines the eight key features that the group believe are fundamental to a
successful deal. Professor Sir Brian Hoskins, Chair of the Grantham Institute, and
member of the Earth League said:2015 is the critical year for humanity to decide to
move towards sustainability, including limiting climate change. Less than 2C is still
achievable and choosing this path will provide a huge stimulus for innovation. The
Earth Leagues eight essential elements of climate action are:
Governments must put into practice their commitment to limit global warming
to below 2 Celsius in order to limit unprecedented climate impact risks.2. The
agreement must be based on the remaining global carbon budget the limit of
what we can still emit in the future which must be well below 1000 Gt CO2,
to have a reasonable chance to hold the 2 Celsius line.
In the agreement, countries must commit to deep decarbonisation, starting
immediately and leading to a zero-carbon society by 2050 or shortly thereafter.
This will require a fundamental transformation of the economy.
Equity is critical. Every country must formulate an emissions pathway
consistent with deep decarbonisation. For the sake of fairness, rich countries and
progressive industries can and should take the lead and decarbonise well before
mid-century.
Targeted research, development, demonstration and diffusion (RDD&D) of lowcarbon energy systems and sustainable land use are prerequisites to unleash a
wave of climate innovation.
The agreement should provide the starting point for a global strategy to reduce
vulnerability, build resilience and deal with loss and damage of communities
from climate impacts, including collective action and scaled-up support.
Countries must agree to safeguard carbon sinks and vital ecosystems, such as
forests, which is as important for climate protection as the reduction of
emissions.
Governments must urgently realise new scales and sources of climate finance for
developing countries to enable our rapid transition to zero-carbon, climateresilient societies. (Grantham Institute Newsletter 17 March)
Sending Shell Elsewhere?
Two huge oil rigs belonging to Royal Dutch Shell, parked at the Port of Seattle, are
preparing for a summer sailing to the Alaskan Arctic and for exploratory drilling.
756
However, they may have to move elsewhere to Prince Rupert in British Columbia or
Dutch Harbor in Alaska because environmental activists are arguing loudly that
the Port should scuttle that lease as part of a proxy war over climate change. A
coalition of groups have sued and on Friday learned their lawsuit will go forward.
(Seattle Times from Ken Schlichte 24 March)
Social Science Research Seeks IPCC Participation (and Funding)
Never mind that the science foundation of WG I of the IPCCs work is slowly
disappearing into the quicksand, David Victor writing in Nature on April 1 about
Climate change: Embed the social sciences in climate policy, calls for the IPCC
process to be extended to include insights into controversial social and behavioural
issues. In particular, he wants to enlarge the Panels superstructure of mitigation and
abatement programs (WG III) to Embed the Social Sciences in Climate Policy. A
lucrative source of employment awaits the graduates of social university programs
comments Albert Jacobs. (10 April)
Climate Justice A New Target?
The Grantham Annual Lecture 2015, by Mary Robinson, President, Mary Robinson
Foundation dealt with Climate Justice, with reference to two of the most important
international agendas of our time the Post-2015 Development Agenda to be adopted
in New York in September and the new climate agreement to be decided at COP21 in
Paris in December. Climate justice, which links human rights, development and
climate change, allows us to observe the linkages between the challenges we face.
Abstract
Climate change threatens to undermine, and even reverse, the positive development
gains made over the course of the Millennium Development Goals. Moreover,
without equitable access to sustainable development, the developing world will be
locked into traditional fossil fuel development pathways and this will ultimately
result in dangerous climate change. Climate justice, which links human rights,
development and climate change, allows us to observe the linkages between these
two great challenges facing our global community. Applying a climate justice lens
to the 2015 processes can help to ensure that both result in policy and action that
is good for people as well as the planet.
Applying a climate justice lens to the 2015 processes can help to ensure that both
result in policy and action that is good for people as well as the planet. (Grantham
Institute 17 March)
Climate Wars in US Senate
Senator Sheldon Whitehouse , a Rhode Island Democrat, was miffed that people
criticized him and equally liberal Senate colleagues Barbara Boxer (CA) and Ed
Markey (MA) for attacking skeptics of dangerous manmade climate change like
Spanish Inquisition tormentors. In his view Global warming is the most serious
threat we face today. Financial incentives can affect behavior, which is why the
public and Congress need to know who funded the skeptics research. And companies
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that produce harmful products want to foment uncertainty about well-established

health and safety risks: fossil fuel interests and climate chaos skeptics are just like the
tobacco industry. No wonder Mr. Obama is repackaging the climate issue under
the equally false and ridiculous mantras of ocean acidification, and carbon
pollution causing allergies and asthma. Our oceans are not becoming acidic. Its not
carbon its carbon dioxide, the miracle molecule that makes all life on Earth
possible. And neither CO2 nor planetary warming has anything to do with allergies or
asthma. (Excerpt, Paul Driessen received 21 April)
Denialists Ignored- Debate Over
The views of researchers skeptical of the theory humans are causing potentially
catastrophic climate change have become scarce in news stories covering the topic. A
recent study by George Mason University researchers published in the trade magazine
Journalism found contrarian views on the subject are no longer welcome in many of
the nations newspapers. The authors of Covering Global Warming in Dubious
Times: Environmental Reporters in the New Media Ecosystem, interviewed nearly a
dozen journalists who regularly report on climate change, formerly known as global
warming. The George Mason study quotes one reporter as saying, there is pretty
much understanding across the board in the United States media now that this is real,
this is true, its happening, [and] were responsible. That debate is over. [Thus] in this
day and age, including climate denialists (sic) in a story about climate change is
generally irrelevant. News editors encourage reporters to deny there is an ongoing
debate over humanitys role on climate change, the study found. Journalists (who
requested anonymity in the study) reported, this practice of ignoring skeptics was
largely supported by their managers and editors. (Heartland 1 March)
British Establishment Supports Climate Scare
According to the head of the National Trust, a large and influential charity,
climate change is now the Trusts biggest problem the reporter still used
global warming- mentioning coastal erosion effects on grand houses, bugs in
furniture and books - as evidence. She promised to cut the Trusts energy use by
a fifth by 2020. (FT 23 March)
The Prince of Wales International Sustainability Unit: Deforestation is
Emission Source assumes that ending deforestation will protect the climate or
rather, that tropical forest emissions will fall to safe level. We must act, says the
Prince, to protect trees because they absorb CO2. (FT 23 March)
Witch Hunt Against Climate Sceptics Continue
For the personal experiences and views of Prof. Richard Lindzen, Prof. Lennart
Bengtsson and Dr. Willie Soon, see WUWT 24 April noting that according to The
Conversation, Liberal Democracy is old fashioned, its antiquated institutions
produce climate change paralysis , which the authors suggest can be resolved, by
transferring democratic powers to unelected panels of national and trans-national
bureaucrats. (WUWT Eric Worrall 24 April)
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Moral Authority Wanted

The Pontifical Academy of Sciences on Tuesday, April 28 is hosting a workshop titled
Protect the Earth, Dignify Humanity to raise awareness and build a consensus
among people of faith that human activity is causing catastrophic global warming. The
Heartland Institute the worlds leading think tank promoting scientific skepticism
about man-caused global warming is bringing real scientists to Rome next week to
dissuade Pope Francis from lending his moral authority to the politicized and
unscientific climate agenda of the United Nations. The Vaticans summit features two
men Ban Ki-Moon, secretary-general of the United Nations, and Harvard economist
Jeffrey Sachs who refuse to acknowledge the abundant data showing human
greenhouse gas emissions are not causing a climate crisis and there is no need for a
radical reordering of global economies that will cause massive reductions in human
freedom and prosperity. Heartlands experts will send this message to Pope Francis:
Please do not put the enormous weight of your moral authority behind the discredited
and scandal-prone United Nations Intergovernmental Panel on Climate Change
(IPCC). Instead, speak out for the poor and disadvantaged of the world who need
affordable and reliable energy to escape grinding poverty. The Holy Father is being
misled (Heartland Institute Heads to Rome to Advise Pope Francis on Climate
Policy, WUWT 24 April)
Marc Morano, together with Christopher Monckton (one of the Heartland delegation)
only narrowly made it into the carefully stage-managed conference where as known
climate sceptics they were apparently not welcome. Ah. So you made it in here?
said a somewhat surprised looking member of the Vatican press team to Morano, when
he realised that he had bypassed the Vaticans security and infiltrated the press
pack..the three sceptics were watched very carefully throughout the proceedings
lest they attempt to ruffle the feathers of key speakers Ban Ki-Moon, economist
Jeffrey Sachs and Cardinal Turkson, the Ghanaian priest who has been co-ordinating
the Vaticans position on climate change. In the end, Secretary-General Ban did
answer a similar question, albeit one expressed more delicately by a journalist from
the Catholic media, when he was asked what his views were on those members of the
Catholic community who had reservations about the Popes position on climate
change. Perhaps this was a response to Bans rather bold and very moot declaration
that Religion and science are united on the need for action on climate. I dont think
faith leaders should be scientists, said Ban Im not a scientist. What I want is their
moral authority. Business leaders and all civil society is on board. Now we want faith
leaders. Then we can make it happen. (Excerpt Morano 28 April)
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NUCLEAR DEVELOPMENTS 3 MARCH early 4 May

International
No growth in carbon dioxide emissions in 2014 16 March Global carbon dioxide
emissions from the energy sector in 2014 were at the same level as in 2013, according
to preliminary figures from the International Energy Agency. It suggests that policy
responses, rather than economic factors, led to the zero growth in emissions.
TVEL signs fuel pellet supply contract for Tarapur reactor 3 March TVEL, Russias
nuclear fuel manufacturer, has signed another contract with the Indian Department of
Atomic Energy for the supply of enriched uranium fuel pellets produced by TVEL
subsidiary Elemash.
IAEA safety review for Chinese small reactor 22 April Chinas ACP100 multipurpose small modular reactor design is to undergo a safety review following the
recent signing of an agreement between China National Nuclear Corporation and the
International Atomic Energy Agency (IAEA).
Fukushima cesium on US coast well below levels of concern, say scientists 8
April Scientists at the Woods Hole Oceanographic Institution have for the first time
detected the presence of small amounts of radioactivity from the 2011 FukushimaDaiichi nuclear power plant accident in a seawater sample from the shoreline of North
America.
Pathway agreed to reach Iran resolution 7 April A framework agreement has been
reached between Iran and the P5+1 group of six world powers in restricting Irans
nuclear program to peaceful uses only. The agreement was brokered after extended
talks in Lausanne, Switzerland.
South Korea wins revisions to nuclear treaty with USA 22 April South Korea may
one day be able to enrich uranium to produce non-weapons grade nuclear fuel under a
deal reached with the USA. The agreement also ensures that the USA will provide
South Korea with a stable supply of fuel for its nuclear reactors.
Obama proposes nuclear cooperation between USA and China 22 April Barack
Obama has issued a presidential determination, published in the Federal Register, on
a proposed agreement for cooperation between the USA and China concerning the
peaceful uses of nuclear energy.
Russia, Myanmar reaffirm nuclear cooperation 26 March Russia and Myanmar
have agreed to cooperate in nuclear energy, Rosatom said today, during the first of a
two-day working visit to the Southeast Asian country by its deputy director general
Nikolay Spassky.
Russia and Jordan agree $10 billion construction project 25 March Russia and
Jordan have signed an intergovernmental agreement on cooperation in the construction
and operation of the Middle Eastern countrys first nuclear power plant. The document
was signed by Sergey Kirienko, Rosatom director general and Khaled Toukan,
chairman of the Jordan Atomic Energy Commission.
Korea extends nuclear cooperation to Qatar 9 March South Korea and Qatar are to
cooperate on the training of nuclear experts and on the construction of a research
reactor under a memorandum of understanding signed between the two countries.
Saudi Arabia and Argentina form R&D joint venture 9 March State-owned R&D
companies from Argentina and Saudi Arabia have set up a joint venture company,
760
Invania, to develop nuclear technology for Saudi Arabias nuclear power program.
IAEA team completes review of Indian regulator 30 March A peer review of
Indias nuclear regulatory framework has found a strong commitment to nuclear safety
in the country but recommends that the independence of its nuclear regulator be
strengthened.
BAE Systems gets funding to complete submarine design Saudi Arabia teams up
with Korea on SMART 4 March At least two South Korean-designed SMART
reactors could be built in Saudi Arabia following the signing of a memorandum of
understanding between the two countries. Korea and Saudi are to jointly promote the
reactor in the global market.
US queries French uranium imports 10 March The US Department of Commerce
is querying the status of a minority of US imports of French low-enriched uranium in
2013-2014 under antidumping legislation.
Westinghouse, Hochtief partner on decommissioning services 27 March
Westinghouse and German construction company Hochtief AG have teamed up to
offer decommissioning, decontamination and remediation services for Germanys
nuclear power plants.
Argentina, Bolivia sign agreement to develop nuclear energy 31 March Argentina
and Bolivia have signed a cooperation agreement to promote and develop
infrastructure and institutions for the peaceful use of nuclear energy, the Bolivian
ministry of hydrocarbons and energy said on 28 March.
Areva signs Jaitapur agreements 13 April Areva has signed two agreements with
Indian companies in preparation for the project to construct six EPR units at Jaitapur
in Maharashtra state. The agreements were signed during a visit to Paris by Indian
prime minister Narendra Modi.
Erdogan approves Turkey-Japan nuclear agreement 10 April Turkish President
Recep Tayyip Erdo?an has approved parliaments ratification of an intergovernmental
agreement with Japan to build a nuclear power plant at Sinop, according to a statement
on his website.
Westinghouse continues talks with Bulgaria on Kozloduy 7 7 April Westinghouse
Electric Company and the Bulgarian government are in talks to set a structure and
timeline for their agreement to build a seventh reactor at the Kozloduy nuclear power
plant.
Rosatom plans Chinese expansion with new office 10 April Rosatom plans to open
a regional centre in China as early as the middle of this year, the Russian state
nuclear corporation announced. The announcement followed a decision taken by the
companys committee on strategic partnerships, alliances, mergers and acquisitions.
Canada-India contract strengthens nuclear ties 16 April A long-term uranium
supply contract signed by Cameco and Indias Department of Atomic Energy has been
welcomed by the two countries prime ministers as they look to further cooperation
and collaboration between their nations..
Russias Rosatom outlines plans for Argentina 24 April Russias Rosatom has
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released details of an inter-governmental agreement to build Argentinas sixth nuclear

power reactor.
Areva wins deal to supply Energoatom with enriched uranium 27 April French
engineering company Areva has for the first time signed a contract with Energoatom
for the supply of enriched uranium to be used at Ukraines nuclear power reactors. The
first batches will be delivered in 2015. Endergoatom operates all of Ukraines 15
nuclear units in commercial operation at four sites, Khmelnitsky, Rovno, South
Ukraine and Zaporozhe. The contract was signed on 24 April at Energoatoms office
in Brussels. Areva won a tender for the contract not only due to its most attractive
price proposal, but also because of the minimum risks to Energoatom foreseen by the
contract, the Ukrainian company said. Areva and Energoatom are old partners,
they said, and an agreement has been in force since 2011 regarding plans for used fuel
and radioactive waste management in Ukraine, including storage, transportation and
reprocessing
Europe and Russia
Paks nuclear expansion needs new fuel terms 16 March Hungary must renegotiate the
fuel supply portion of a deal for two Russian reactors at the Paks nuclear power plant
after terms proved unacceptable to the Euratom Supply Agency. Subsequent reloads,
rules in the European Union require all power plants to have more than one fuel
supplier in the long term.
Euratom approves Paks II fuel supply contract 21 April Euratom, the nuclear
watchdog of the European Union, has approved a contract between Hungary and
Russia on nuclear fuel supply for the Paks II expansion project. At a press conference,
Jnos Lzr, Prime Minister Viktor Orbns chief of staff, said the European
Commission had officially informed the Hungarian government the same day that the
Euratom Supply Agency has signed the contract between the two countries
Electrabel contends nuclear tax calculation 8 April Electrabel has described as
confiscatory the tax Belgium seeks to levy on nuclear power plant operators based
on new calculations by the countrys electricity and gas market regulator.
EOn to spin off nuclear assets to Uniper 28 April Uniper is the name of the nonrenewable company to spin off from EOn. The name means Unique Performance and
the company will own stakes in 17 operating reactors across Germany and Sweden.
Sellafield clean-up costs reach GBP53 billion 5 March The estimated cost of
decommissioning and cleaning up the Sellafield site in the UK has increased to GBP53
billion ($81 billion), the National Audit Office has noted. The increase has been
attributed to a better understanding of the tasks involved.
The UK Ministry of Defence has awarded BAE Systems 13 March - the British
defence, aerospace and security company - the funding needed to complete the design
of a successor to the Royal Navys Vanguard class submarines.
Britain remains key to Arevas strategy, says UK CEO 6 March The UK is one of
the two key markets for Areva, together with China, as it is where the group sees
growth, the French engineering companys UK chief executive officer Robert Davies
762
told World Nuclear News in an interview.

Urencos results good, despite challenging market 6 March The Urenco group
posted a net income 20.2% up on the previous year. The company plans to slow the
rate of installation of new capacity at its US plant from 2016, while the start date for
a UK facility for deconversion has been pushed back to 2017.
Nuclears share of UKs power production dips to 19% 26 March Nuclears share
of UK electricity generation decreased last year by 0.6 percentage points on 2013 to
19.0% - or 63.8 TWh - owing to outages in the second half of the year, new data
released by the Department of Energy and Climate Change showed.
Bespoke equipment trial completed at Dounreay 25 March A trial of bespoke
equipment to lift off the top plate of the Dounreay Fast Reactor in Scotland in order to
remove trapped fuel elements has been completed successfully, the Nuclear
Decommissioning Authority said on 19 March. The authority said decommissioning
the 50-year-old experimental reactor is one of the most technically challenging
projects in its estate.
First radioactive waste removed from Magnox storage pond 24 March The very
first radioactive sludge has been removed from the First Generation Magnox Storage
Pond (FGMSP) at Sellafield in north-west England. The FGMSP is one of the sites
four Legacy Pond and Silo facilities.
Magnox expands with merger of RSRL 1 April The UKs Magnox Limited and
Research Sites Restoration Limited (RSRL) have merged to form a single organization
operating as Magnox Limited. The combined business will be responsible for 12
nuclear sites.
Job cuts as final decision on Hinkley Point C remains 9 April EDF Energy says it
has almost completed early site preparation works for the planned Hinkley Point C
project. However, pending a final investment decision, some 400 jobs at the site are at
risk.
Mini subs retrieve Sellafield isotope gear 23 April Miniature submarines are being
used to recover cobalt cartridges dating back to the 1950s from storage ponds at the
UKs Sellafield site. The cartridges were used for producing isotopes for medical and
industrial applications.
Areva plans to cut costs by $1.1 billion by 2017 4 March Areva has a two-part
strategy aimed at refocusing on its core business of nuclear power, aiming to make
savings of about 1 billion ($1.1 billion) over the next few years, following a record
loss in 2014 of 4.83 billion ($5.38 billion).
New vessel head delivered to Tihange unit 25 March Areva has delivered a
replacement reactor vessel head for unit 3 of Electrabels Tihange nuclear power plant
in Belgium. The company has also been awarded a contract to supply a new vessel
head to a US utility.
Frances larger reactors OK for 40 years, says regulator 31 March French nuclear
regulators have found no generic elements that would compromise the safety of the
countrys 1300 MWe nuclear reactors over a 40-year operating life.
Areva looks to consolidate German activities 15 April Arevas German subsidiary,
Areva GmbH, has announced plans to consolidate its activities. The move, in response
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to Germanys changing nuclear power market, would result in the closure of its
engineering services facility in Offenbach.
Request to operate Forsmark 2 at increased power 6 March Forsmark Group AB
has applied to the Swedish nuclear regulator to operate permanently unit 2 of the
Forsmark nuclear power plant at a higher power level. The unit has been in trial
operation for the past two years following a 12% power uprate.
Vattenfall opts for early closure of Ringhals units 28 April Declining profitability
and increased costs have forced Swedish utility Vattenfall to decide to close units 1
and 2 of the Ringhals nuclear power plant earlier than previously planned. The
decision would see the units shut between 2018 and 2020, rather than around 2025.
Swiss repository experiment enters monitoring phase 24 March The underground
tunnel in which the Full-scale Emplacement Experiment will be carried out at the
Mont Terri Rock Laboratory in Switzerland has been sealed and monitoring has
begun. The experiment aims to simulate the conditions within a repository containing
high-level radioactive waste.
Swiss regulator calls for off-site emergency response centres 4 March Having
already improved on-site emergency protection measures, Switzerlands Federal
Nuclear Safety Inspectorate is now ordering nuclear power plant operators to ensure
that off-site measures are also boosted.
Swiss decommissioning company gets in position 10 March Swiss nuclear operator
Alpiq has founded a new company to offer integrated nuclear plant decommissioning
services in readiness for the post-operation stage of the countrys nuclear power sector.
Finland starts building plug for repository tunnel 1 April Posiva, the Finnish waste
management company, said it has started construction of a heavy plug for the
demonstration repository tunnel at its final repository and waste encapsulation plant at
Olkiluoto. The underground characterisation facility is known as Onkalo.
New cooling towers completed at Loviisa 22 April The construction of a new
backup air-cooling system independent of seawater cooling has been completed at the
Loviisa plant in Finland. It is the first time such a cooling system has been used at a
nuclear power plant.
Turkish uranium project moves to permitting 24 March Anatolia Energy is eyeing
a 2016 start up for its Temrezli uranium project after submitting an application for an
environmental impact assessment with Turkeys Ministry of Environment and Urban
Planning.
Turkey ratifies agreement for new plant at Sinop 2 April Turkeys parliament has
ratified an intergovernmental agreement with Japan to construct a nuclear power plant
at Sinop. The two countries signed the so-called host government agreement in
October 2013.
Ground broken for Turkeys first nuclear power plant 15 April Government and
company officials launched construction of Turkeys first nuclear power plant on 14
April. The Russian-designed Akkuyu plant in Mersin, on the Mediterranean coast, is
the first of three nuclear power plants the country plans to build to help boost its
economy and reduce its dependence on fossil fuel imports.
764
Russia offers nuclear desalination bundle 4 March Rusatom Overseas is aiming to

sell desalination facilities integrated with large capacity nuclear power plants to
Russias export markets.
Energoatom seeks to extend links with Westinghouse 11 March Energoatom has
announced plans to increase its cooperation with Westinghouse that include an
expansion in the use of the US-based companys nuclear fuel, a memorandum aimed
at familiarising Energoatom personnel with the AP1000 reactor design, and
Westinghouses participation in a future fuel fabrication plant in Ukraine.
Belarus project unaffected by fall in rouble against euro, says ministry 12 March
Belarusias energy ministry has rejected media reports that claim changes in the value
of the Russian rouble against the euro have negatively impacted its project with Russia
to build a nuclear power plant at Ostrovets.
Rosenergoatom plans tender for decommissioning feasibility study 30 March
Rosenergoatom plans to launch tender at the end of April to conduct a feasibility study
for preparing nine reactors for decommissioning between 2016 and 2020. A subsidiary
of Rosatom, Rosenergoatom operates all of Russias civilian nuclear power plants.
Russia completes design of underground radwaste research laboratory 1 April
Russias national operator for radioactive waste management (NO RAO) has
completed the design documents for an underground research laboratory to study the
feasibility of final disposal of solid high-level radioactive waste (HLW) and solid
medium-level long-lived wastes in the Nizhnekansky granitoid rock massif in
Zheleznogorsk. The waste would be stored at a depth of 450-525 m.
NO RAO is a federal-state unitary enterprise set up in March 2012 for handling all
nuclear waste materials and final disposal of radioactive waste. Its functions and tariffs
are set by the Ministry of Natural Resources. Its branches are at Zheleznogorsk, which
is in Krasnoyarsk, Seversk in Tomsk, Dimitrovgrad in Ulyanovsk and Novouralsk in
Sverdlovsk. NO RAOs parent company, state nuclear corporation Rosatom, is now
studying the documents, NO RAO deputy director Denis Egorov said in a statement,
following a meeting of Rosatoms scientific and technical council on the final stage of
the nuclear fuel cycle.
NO RAO has received local government approval in the Chelyabinsk and Tomsk
regions on the final disposal of low- and intermediate-level wastes (LLW/ILW) at the
sites of Mayak Production Association in Ozersk and Siberian Chemical Combine
(SCC), based in Tomsk. Plans to establish repositories for 300,000 cubic metres of
LLW/ILW are to be in place by 2018. NO RAO said in October last year that it aimed
to build the underground laboratory in the Nizhnekansky granitoid rock massif by
2024.
Russia originally focused site selection on the Kola Peninsula. In 2003,
Krasnokamensk in the Chita region, 7000 km east of Moscow, was suggested as the
site for a major used fuel repository. Then in 2008, the Nizhnekansky granitoid rock
massif was put forward as a site for a national deep geological repository. Rosatom has
said that phase one of the facility is to be designed to hold 20,000 tonnes of
intermediate- and high-level wastes, which will be retrievable. Public hearings on the
Nizhnekansky granitoid rock massif were held in July 2012. It was identified in the
November 2013 Regional Energy Planning Scheme as a planned repository site.
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Moscow-based RosRAO, another Rosatom subsidiary, began operations in 2009 for

the management of used nuclear fuel, non-nuclear radioactive waste, and
decommissioning services, especially of submarines. Then NO RAO was created to
consolidate these activities as the national manager of Russias used nuclear fuel and
radioactive waste. Now, RosRAO aims to be a global provider of back-end fuel cycle
services.
Russia postpones BN-1200 in order to improve fuel design 16 April
Rosenergoatom has reportedly postponed construction of the BN-1200 sodium-cooled
fast neutron reactor at the Beloyarsk nuclear power plant indefinitely on the need to
improve fuel for the reactor and amid speculation about the cost-effectiveness of the
project.
Chernobyl 1-3 enter decommissioning phase 13 April The Chernobyl nuclear
power plant in Ukraine has officially entered the decommissioning phase, following
approval by the countrys nuclear regulator. The first phase of decommissioning is the
so-called final shutdown and preservation stage, which is expected to take ten years.
Rosatom feels no direct impact from sanctions, says Kirienko 28 April US and
European Union-imposed economic sanctions on Russia have had no direct impact on
Rosatom, but the state nuclear corporation regularly faces pressure from Western
governments and negative publicity in the media, its director general has said.
Arson suspected cause of forest fire near Chernobyl 29 April Firefighters were
battling to extinguish Ukraines worst forest fire in 23 years, but state officials said its
spread towards the site of the Chernobyl nuclear power plant had been halted. Prime
Minister Arseniy Yatsenyuk said that the situation was already under control and that
there had been no changes to levels of background radiation.
Chernobyl Shelter Fund gets $200 million funding boost 30 April The European
Bank for Reconstruction and Development has secured the funding required to
complete the Chernobyl New Safe Confinement by the end of 2017. The giant
structure is being built to cover the destroyed reactor 4 on the site of the 1986 nuclear
accident in Ukraine.
Asia and Middle East
Transfer of Fukushima clean-up waste gets go-ahead 3 March The transfer of
radioactive soil and waste generated from clean-up work following the March 2011
accident at the Fukushima Daiichi plant to a provisional storage site has been approved
by the governor of Fukushima prefecture and the mayors of Futaba and Okuma.
Takahama 2 cleared for ten more years 9 April Unit 2 of Kansai Electric Power
Companys Takahama nuclear power plant in Japans Fukui prefecture has been
granted a ten-year operating life extension by the countrys nuclear regulator.
Economic cost of Japans nuclear shutdown 14 April Nuclear power benefitted the
Japanese economy by some 33 trillion over the years, said Masakazu Toyoda of the
Institute of Energy Economics, Japan (IEEJ), and the country risks wasting this in its
slow progress to restart its reactors.
Court halts restart of Takahama reactors 14 April The restart of units 3 and 4 of
Kansai Electric Power Companys Takahama nuclear power plant, expected by the end
766
of this year, has been blocked by a temporary injunction. Kansai said it will appeal the
ruling.
Court ruling clears way for Sendai restarts 22 April A court had ruled against a
petition opposed to the restart of units 1 and 2 of the Sendai nuclear power plant in
Japans Kagoshima prefecture. The units now look set to resume operation later this
year, the first of the countrys reactors to be restarted since the Fukushima Daiichi
accident in 2011.
Nuclear power at pre-Fukushima state, says leading Russian scientist 10 March
Experts agree that the global nuclear power industry has returned to its preFukushima state and pessimistic forecasts of a slowdown in its development have not
materialized, Leonid Bolshov, director of the Nuclear Safety Institute of the Russian
Academy of Sciences, said in an interview with Russian news agency RIA Novosti.
Tsuruga 2 sits on active fault, NRA concludes 26 March The restart of unit 2 of the
Tsuruga nuclear power plant in Japans Fukui prefecture has been thrown into doubt
after the Nuclear Regulation Authority accepted a report compiled by a panel of
experts that concluded the unit sits upon an active fault line. However, plant owner
Japan Atomic Power Company says it still plans to apply for safety checks in order to
restart it.
Tepco reschedules water purification target 16 March More than 90% of the
contaminated water stored on the Fukushima Daiichi site will be treated by the end of
May, two months later than originally planned, Tokyo Electric Power Company
(Tepco) announced.
China resumes new reactor approvals 10 March The Chinese government has
approved construction of two more units at the Hongyanhe nuclear power plant in
Liaoning province, marking the first approval for new reactors in four years.
Third generator arrives for Tianwan 3 10 March The third of four Russian-produced
steam generators has now been delivered to the construction site of unit 3 of the
Tianwan nuclear power plant in Chinas Jiangsu province.
Construction starts on Hongyanhe 5 30 March China has resumed construction of
new nuclear power plant projects after a hiatus of 15 months. Construction of the fifth
unit of the Hongyanhe plant in Liaoning province began on 29 March.
Construction cleared for Chinas first Hualong One units 16 April Chinas State
Council has given final approval for construction of units 5 and 6 of the Fuqing
nuclear power plant in Fujian province. They will be demonstration units for the
domestically-developed Hualong One reactor design.
Porvairs role in Chinas small modular reactor development 14 April Porvair
Filtration Group has announced its role in the High Temperature Gas-Cooled Reactor
currently being developed at Tsinghua University in China. The British company said
the technology has the potential to create affordable and reliable energy in some of the
worlds poorest and most remote countries.
Preparations continue for initial CAP1400 units 27 April Construction of Chinas
first two CAP1400 reactors at Shidaowan in Shandong province awaits final approval.
However, site preparations for the units are well advanced with the pouring of concrete
for the foundations of the first units conventional island having now begun.
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767
Khan compensated for Mongolian expropriation 3 March The Mongolian

government must pay Khan Resources $100 million in compensation for its 2009
cancellation of the companys uranium licences, an international arbitration tribunal
has ruled.
KHNP hacker demands money to withhold documents 12 March A hacker who
launched a cyber attack on Korea Hydro and Nuclear Power (KHNP) last December
has released more files and demanded money in return for not exchanging sensitive
information with third countries.
UAE applies for first nuclear operating licence 27 March The Emirates Nuclear
Energy Corporation has submitted its application for an operating licence for the first
two units at the Barakah nuclear power plant.
North America
NRC to supplement Yucca Mountain environmental impact statement 13 March The
US Nuclear Regulatory Commission will prepare a supplement to the Department of
Energys environmental impact statement on the proposed geologic repository for
spent nuclear fuel and high-level radioactive waste at Yucca Mountain in Nevada. The
public were informed via a notice in the Federal Register.
USA explores waste options alongside Yucca 25 March A new Department of
Energy initiative on radioactive waste disposal could finally bring some progress to
the nations long-neglected nuclear waste management policy, said Marv Fertel, the
head of US trade body the Nuclear Energy Institute.
NEI urges US to keep sight of nuclear 23 April As the US administration releases
the first instalment of an ongoing program to draw up a roadmap for the countrys
future energy policy, the Nuclear Energy Institute is urging the Department of Energy
to include the electricity generation portfolio - especially nuclear energy - in its longterm planning.
Westinghouse gets approval for SMR testing 18 March The US Nuclear Regulatory
Commission has approved Westinghouses testing approach for its small modular
reactor design. Approval is a significant step toward design certification and will
reduce the time ultimately needed to license the Westinghouse SMR, the company
said.
Energy Fuels clear to continue Canyon mine operations 9 April The USAs largest
conventional uranium producer has won a court battle to continue with mine
development and uranium production at the Canyon mine - a permitted high-grade
uranium deposit located in northern Arizona.
US plant gets go-ahead for high-performance fuel 2 April The US Nuclear
Regulatory Commission has cleared the Perry nuclear power plant in Ohio to begin
using GNF2 high performance fuel.
Work starts on Iter central solenoid 15 April Fabrication of the central solenoid of
the Iter fusion project has been started by the USAs General Atomics. The solenoid due for delivery in 2019 - will be one of the largest superconducting electromagnets
ever built.
768
US nuclear plants celebrate performance 17 April Latest reliability and safety

indicators for US nuclear power plants continue a pattern of consistently high results
dating back more than ten years, according to the US Nuclear Energy Institute (NEI).
Meanwhile, an NEI study has shown that Floridas nuclear plants contribute over $1.4
billion per year to the states economy.
Plans announced for New Mexico used fuel store 30 April Holtec International and
Eddy-Lea Energy Alliance have announced plans for a consolidated interim used
nuclear fuel storage facility in south-eastern New Mexico
Call for swift action on Illinois law 30 April State and community leaders in Illinois
have called on lawmakers to enact a bill to promote low carbon energy as a matter of
urgency if the state is to avoid costly economic impacts from nuclear power plant
closures.
First licence for ESBWR 1 May The US Nuclear Regulatory Commission has
approved DTE Energys combined construction and operation licence for Fermi 3, the
first construction licence to be awarded to GE Hitachis Economic Simplified Boiling
Water Reactor (ESBWR) reactor design.
First licence for ESBWR 1 May The US Nuclear Regulatory Commission has
approved DTE Energys combined construction and operation licence for Fermi 3, the
first construction licence to be awarded to GE Hitachis Economic Simplified Boiling
Water Reactor (ESBWR) reactor design.
Southern Hemisphere
Australian senator shares nuclear vision 12 March State senator S.Edwards is
advocating for nuclear energy to become part of South Australias energy mix,
importing and recycling used nuclear fuel to generate energy and revenue for the state.
Queensland uranium plans in question 16 March The Queensland Resources
Council has called on the government of the Australian state not to rush into a decision
on whether to reinstate a ban on uranium mining that was lifted in 2012.
Namibia commissions demonstration uranium plant 26 March Bannerman
Resources has officially opened a heap leach demonstration plant at the Etango
uranium project in Namibia.
Minister approves Australian uranium project 24 April The Kintyre uranium
project in Western Australia has received environmental approval from the countrys
federal
government.
EPILOGUE
Buying an Eco-home?
The FT on 14 March advertised, with colour photos, five of these properties: in
California, France, Oxfordshire and Turkey and USA. Most were adorned with solar
panels and possessed wind turbines, some had rainwater collectors, not to mention
obligatory spas and whirlpools. Prices ranged from $1.59 million (Turkey), $30
million (solar and geothermal near New York), 2.75 million (UK with solar panels
and air-source heat pump) to $2.39 million (California, with EcoBatt insulation,
recycled steel, Solarban glass and - like all the others - Led lighting. The French house
Fuel for Thought
769
costs only 1.29 million with passive solar energy, but was close to beaches and an
airport. (FT 14/15 March)
A Message for Pope Francis
Who Persuaded the Pope, asks Paul Driessen and then argues that it is not climate
change but energy restrictions based on climate fears that threaten the poor.
Pope Francis plans to deliver an encyclical on climate change this summer. To pave
the way and outline the Popes positions, the Vaticans Pontifical Academy of Sciences
is holding a workshop on the topic, April 28 in Rome. Cardinal Peter Turkson,
director of the Pontifical Council for Justice and Peace and an author of the draft
encyclical, says the UNs Intergovernmental Panel on Climate Change has determined
that our planet is getting warmer. Christians have a duty to help the poor,
irrespective of the causes of climate change, and address what Pope Francis
apparently believes is an imminent climate crisis. The encyclical will likely present
global warming as a critical moral issue and increase pressure for a new climate
treaty. That raises serious questions, which I have addressed in many articles and
which prompted Dr. E. Calvin Beisner and the Cornwall Alliance for the Stewardship
of Creation to write an open letter to Pope Francis.. At the most fundamental level,
too many IPCC reports and the apparent new papal position represent the rejection of
Judeo-Christianitys illustrious tradition of scientific inquiry.. As Nobel Prizewinning physicist Richard Feynman explained, we begin with a guess about a law of
nature. Then we compute the consequences that would result if our hypothesis is
correct and compare actual observations, evidence and experimental data to the
predicted consequences. If the hypothesis and predictions are borne out by the
observations, we have a new rule. But if the hypothesis disagrees with the
experiment, it is wrong, Feynman says. That is honest, genuine science. Alarmist
climate science is precisely the opposite. That distorted version of science began with
the hypothesis that carbon dioxide and greenhouse gas emissions from fossil fuels
cause global warming. It served as the basis for computer models that assume rising
CO2 and GHG levels will cause planetary temperatures and sea levels to soar, and
hurricanes, tornadoes, floods and droughts to increase in number and intensity. The
models predicted many such scenarios over the coming decades.
But Earth
stopped warming 18 years ago; no major hurricane hit the USA for a record 9-1/2
years; seas are rising at barely seven inches per century; and even IPCC experts agree
that long-term trends in weather disasters are not out of historic norms and are not
attributable to human causes. The CO2-driven global warming disaster hypothesis and
models do not reflect reality and are obviously wrong. Just eight years ago, Pope
Benedict XVI warned that any proposed solutions to global warming and climate
change must be based on solid evidence, and not on computer models, unsupported
assertions and dubious ideology. Pope Francis apparently does not share his
predecessors view about climate change fears. However, if he is truly committed to
advancing science, the poor and creation, he should reject climate chaos claims unless
and until alarmists can provide solid evidence to back up their assertions and models.
He should recognize that the issue is not global warming or climate change. It is
whether human actions now dominate climate and weather fluctuations that have been
770
common throughout Earth and human history and whether those actions will cause
dangerous or catastrophic changes in the future. (Excerpt Paul Driessen 27 May)
Good News?
According to New data from the Harvard Public Opinion Project: Only 55 % of
survey participants agreed with the statement that Global warming is a proven fact
and is mostly caused by emissions from cars and industrial facilities such as power
plants. Twenty % held the belief that Global warming is a proven fact, and is mostly
caused by natural changes that have nothing to do with emissions from cars, and the
remaining 23 % who answered the question believe that Global warming is a theory
that has not been proven yet. Even more surprising, these numbers are the same
across the board for participants between 18 and 29 years old,
http://www.iop.harvard.edu/sites/default/files_new/IOPSpring15PollExecSumm.pdf

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FUEL FOR THOUGHT 26/4

Energy & Environment Vol. 26, No. 4, 2015

Iraqi Shia groups. (24 March)

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The current Democrat is 76 years old. Clinton is unlikely to become a

Energy & Environment Vol. 26, No. 4, 2015

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Afghanistan won a pause in the withdrawal of American forces, America sent

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A growing regional problem in west Africa is blamed on Nigeria, the inability

Energy & Environment Vol. 26, No. 4, 2015

Russia, Canada, Qatar and Iraq. (FT 26 March)

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Energy & Environment Vol. 26, No. 4, 2015

truly Herculean. (P Jenkins FT 13 April)

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experiment with negative interest rates continues. (FT 29 April)

Energy & Environment Vol. 26, No. 4, 2015

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Incentivised scrappage schemes are being discussed London may introduce an

Energy & Environment Vol. 26, No. 4, 2015

A group of European scientists call for a global zero-carbon society by 2050.

Fuel for Thought

Energy & Environment Vol. 26, No. 4, 2015

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Gulf Keystone Petroleum active in Kurdistan is in trouble, with increased net

Energy & Environment Vol. 26, No. 4, 2015

ENERGY AND CARBON FINANCE

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Green Bonds Flourishing but What is Green?

Energy & Environment Vol. 26, No. 4, 2015

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Putins inner circle. (Oilpricecom 19 March)

Energy & Environment Vol. 26, No. 4, 2015

BP Going Green Again?

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Parliament, the use of first generation biofuels must be capped to prevent

Energy & Environment Vol. 26, No. 4, 2015

CLIMATE SCIENCE AND SCIENCE POLITICS;

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Remember the Hockey Stick?

Energy & Environment Vol. 26, No. 4, 2015

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ENERGY POLICY AND CLIMATE POLITICS

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Energy & Environment Vol. 26, No. 4, 2015

Transformative Solutions], according to Foster, peddles eco-liberation theology

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Energy & Environment 2015 Article 665 770