Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

G8 Meeting: Climate Change Laid To Rest

Politics / Climate Change Jun 18, 2013 - 02:52 PM GMT

By: Andrew_McKillop

Politics

GLACIERS ADVANCE, GLACIERS RETREAT
Revealed by UK media shortly before the start of the G8 meeting near Lough Erne in Ulster, David Cameron's adviser for Europe, Ivan Rogers blocked moves from Germany and France to make climate change a major G8 agenda item.

Ritual whines that this meeting is yet another “last hope for an international agreement that could avert catastrophic climate change” have worn thin, very thin. The real world potential for any international climate change pact setting European-style ETS carbon taxes and tradable permits is zero and not worth talking about. Linked whining about “rising concern” that the UK government is watering down its climate change mitigation ambitions, the same way these are on the point of being watered down in Germany, other European countries and the European Commission, are also not worth talking about – because the die is cast and change is coming.


British climate-correct media, like the 'Guardian' and 'Independent' have predictably claimed that UK Chancellor George Osborne's stubborn refusal to set a 2030 date for “complete decarbonisation” of the British electricity system is not only a threat to Britain but also to Europe's ambitions for a squeaky clean and sustainable world. Osborne is said to be pushing for a slower timetable, and lower targets across the EU for 2020, in the same way as a rising number of other European deciders – possibly including Angela Merkel and her CDU, but only after her “triumphal re-election” in September's national elections. 

AND WHAT ABOUT THE ECONOMY, AS IF THAT MATTERED?
The Lough Erne meeting had much more serious and real issues on the table. The two-day summit focused the “Three T's” of tax, trade and transparency, ranging from how the US FATCA anti-evasion tax on hedge funds and wealthy individuals who use them to dodge taxes will be mirrored by similar legislation to hit tax evaders in Europe and Japan. The planned EU/US free trade deal and measures to make WTO trade regulations more transparent were also high on the agenda. Hopes for the EU/US trade deal are high, even very high, with the term “an economic Nato” being bandied. Potential net benefits to Europe from the package could possibly exceed $75 billion-a-year.

Conversely the spend-and-spend prayer wheel of the climate correct lobby, estimated at 350 billion euros for Germany alone in 2000-2012, and 600 billion euros for 2000-2020 unless its Energiewende is sharply cut back, makes these new hopes small change. UK spending “to avert climate catastrophe” only on its wildly ambitious and technically flawed offshore wind program for 2012-2020 is costed at about $300 billion (₤200bn, €225 bn), before the fatally-predictable upward revisions.

To be sure the Vatican Radio broadcast Pope Francis' appeal to G8 summiteers, saying that “money, politics and economics must serve, not rule”, in particular to fight poverty, eliminate hunger and ensure food security in low income countries – but energy security through extreme spending was not included. The clean energy goal to protect polar bears while driving large sections of the European public into fuel poverty, and out of a job was also absent from the Papal message.

The Pope added that politicians must serve people and promote an ethic of truth. For the much touted, but empty “new paradigm” of creating a sustainable economy based on fighting “carbon effluent” and enriching traders playing the CO2 permits casino while they lose other peoples' money, the avoidance of truth is endemic. The blowback can only be sharp and angry, and is coming.

THE HOME BASE OF NEW NORMAL IS WEAKENING
While the Parti Socialiste government of Francois Hollande stoutly maintains its Holier Than Thou anti-fracking policy – but French oil major Total SA prepares to import US shale gas as LNG and sell it in France – over the Rhine in Germany the glacier is retreating. In a time-hallowed political process of insistent hints and whispers, theatrical denials and short briefings from “anonymous CDU sources” close to power, Angela Merkel is preparing the way for German lawmakers to give approval to fracking (hydraulic fracturing) to produce gas and oil in the country.

When Germany does it, the French will gambol alongside like the obedient poodles they are!

No date is set for the German volte face except “soon after her triumphal re-election” in September, but this alone will do precious little to plaster over Energiewende-gate, AKA the incredible costs of energy transition. The costs of Germany's energy transformation plan – supposedly critical to “global climate stability” - have become so outrageous that German industry is now alarmed. For at least the past 18 months, the plan has become too expensive for Germany, let alone other Europeans, and has spurred a flight of German industry out of the country. The flight targets the home base of shale energy, the United States, but is especially damaging to CDU ideologists still toeing the climate-energy-correct line because Germany's industrialists are also actively seeking to develop shale oil and gas, stranded gas resources, and plain old conventional oil in Europe's neighbor regions of West Asia, the Middle East, North Africa and the eastern Mediterranean, as well as east Africa and further afield.

Like German households, business users look at the bottom line on their energy bills. They are if anything further enraged or dismayed to hear that windpower and solar power can produce electricity at almost zero cost – but power prices go on rising due to the green energy levy, as well as Federal and Lander taxes and charges – which help the funding of bailouts to stricken industries which can't pay the power bill. In certain cases, including the country's largest utility firm E.On special new charges may be permitted by Federal and Lander agencies to cover the firm's disastrous investment in natural gas-fired power production, where every kilowatthour produced is now at a loss due to extreme high imported gas prices, the collapse in European carbon allowance permit prices, and the ever-declining number of hours-per-year that gas fuelled plants operate. 

The crisis faced by E.On also concerns a large number of other European utility companies which heavily invested in cleaner-burning, lower-emission gas-fired plants in the 2005-2010 period, but now have non-performing assets. In a rising number of cases, according to Eurogas chief Jean-Francois Cirelli, this threatens their business survival. The Association of German Chambers of Commerce and Industry puts things starkly: "The U.S. has become much more attractive to companies than Europe".

This in fact means the western older member countries of the EU including Germany – but not the low wage new member countries of east Europe, where monthly salaries for qualified industrial workers can run at 400 euros ($520) or less. German industrialists have seen the writing on the wall which says they are getting sandwiched between eastern Europe with its low labor costs and the USA with its low energy costs – and prices. Germany's rush to green energy has done a lot more than impose “the new paradigm” of low carbon sustainable, at least in politicians' speeches scripted by climate correct ideologues riding the green gravy train. Wholesale electricity prices have been sliding in Germany but this is swamped - as with so much else in Europe – by higher taxes, charges and fees of which many carry the now provocative word “green”. Final utility bills go on rising, by as much as 20% since January 2012 and in 2012 German households paid more than 2.5 times what their American counterparts paid for the same power supply, according to market watcher GlobalData.

INCOHERENT AND DANGEROUS
German industry chiefs are close to saying – in the open – that Energiewende means they have to look outside Germany and will be forced to shed jobs in Germany. Still in private, their domestic strategy features a near-total freeze on investment, and in public includes their strategy of “in-plant energy autonomy”, producing their own energy and cutting away from national supply systems – corporate Energiewende, strictly based on least cost solutions.

This concerns the “domestic agenda”. BMW is readying a second production line at its factory in Moses Lake, Washington, which began operating in 2011. Munich-based major chemical maker Wacker is expanding capacity at its facility in Calvert City, Kentucky and is increasing capacity targets for its new plant being built in Charleston, Tennessee. World-class BASF is expanding its chemicals production facilities in Wyandotte, Michigan and Monaca, Pennsylvania, and may expand its recently opened plant in Freeport, Texas. In every case, cheap shale energy was high up the list of location factors and reasons for the decision to build.
 
Chancellor Angela Merkel, from 2005 until “the Fukushima moment” in 2011 was a staunch defender of nuclear power but from that moment her CDU's energy agenda went radically green. In May 2011 she announced that Germany was abandoning nuclear power. Eight nuclear plants were shut down immediately, and all nine remaining reactors in service will be shut by 2022. Her governments since 2005, as well as German-national European Energy Commissioner Gunther Oettinger, formerly a leading CDU politician, made no serious attempt to prevent the riotous boom and slump in carbon permit prices, which from its 2005 start traced a perfect boom-bust arc to crash in April 2013 when the European parliament voted against a salvage operation for the permits. These permits are now close to worthless – as hot air should be priced! More than ever, Energiewende financing became a play of hot air soundbytes and empty promises – with slugging real world hikes of electricity and gas prices for most final users, including all private consumers.

Previously another back-story, Germany's frantic push to increase the share of renewables in its energy mix has spiralled in cost to the point at which – inside the CDU but not in public – the new “consensus answer” is to Europeanize energy transformation costs by adding them to sovereign debts. This last-ditch gambit for saving the gravy train ride of the dreamers and takers who concocted “the climate correct new paradigm” and for several years hit the jackpot in Germany, is frankly unworkable, but has yet again unsettled Merkel's industrial and business sector supporters. German industry has taken a look and said “Nein danke”, and German householders say the same.

Federal government publicity sites continue showing Internet visitors LED street lighting which turns itself off when nobody is in the street, but does not show the hundreds of millions of kiloWatthours of surplus and unusable electricity shorted-to-ground when too much windpower and solar power is available, but demand is not there. Nor the ever rising number of coal-fired power plants brought on stream to supply consumers in the opposite case. Coal and natural gas, in 2012, supplied about 62.5% of German total power with coal supply increasing fast, and cleaner-burning natural gas falling away, also fast.

Since 2010-2011 the inevitable has happened. The cost spiral of Germany's climate-energy-correct transformation policy has turned electricity prices, and final user gas prices, into an economic liability and a political problem which will not go away. Industry to date has generally borne less of the burden than private consumers, but even industry is starting to feel the pinch.

Speaking at a recent conference in Berlin, Mrs. Merkel promised that "very clear suggestions for reform” will be forthcoming, but behind the scenes these go a lot further than the window-dressing talk about strengthening and improving the electricity grid – at fantastic cost - to better handle surging volumes of solar and wind production, or “adjustments” of still-high subsidies. The plan has to be cut back and the climate change handle has to radically reworked, even abandoned. Merkel knows this now, and shel aso knows that German prosperity depends on making massive changes to the unworkable, unrealistic and unpopular platitudes cobbled together by the pompous and smug advocates of “the new paradigm”.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

Andrew McKillop Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules