Saturday, September 20, 2008
News From BOM Correspondents - 8
Following a week of Barnett and a week of market mayhem, it's high time to catch up on news and links from BOM correspondents:
Soaring cost of hippies
A Reader highlights a fascinating Wall St Journal article which spells out how oil and gas majors are set to profit from the hippies driving us into renewable energy:
"The green opponents of new coal-fired plants are nowadays the most dependable allies of the big gas companies such as Gazprom, Shell or BP...
Wind turbines generate electricity very irregularly, because the wind itself is inconsistent. Therefore wind turbines always need backup power from fossil fuels to keep the electricity grid in balance. Gas turbines are the best way to do this...
Most European countries force consumers to subsidize electricity from wind power. This makes "renewables" a very safe investment compared with other energy businesses, where swings in commodity prices can be large.
As Europe's big integrated oil and gas companies—such as Shell, BP and Total—invest more and more in Liquid Natural Gas, they are also lobbying hard for a world-wide carbon-emissions trading system that would further increase the advantage of gas over coal.
In the U.S. the same thing is happening. The problem for the natural gas industry in the U.S. is that gas is still relatively inexpensive compared with market prices elsewhere in the world. There are no facilities for LNG export. This may explain why Shell, BP, Chevron and T. Boone Pickens are investing in wind power. It's a clever strategy to add value to their gas assets by boosting demand.
These gas players can afford to lose money on wind power in the short term to reap huge profits in the long term. In fact, this was the strategy first implemented by Ken Lay of Enron in 1990s. Enron was the power and gas company that started the first large-scale manufacturing of wind power in the U.S. It also brought up the ideas for a cap-and-trade system, to increase the competitive edge of gas over coal."
Good to know that an extremely ill-wind for taxpaying consumers is blowing a lot of good in someone's direction. Well done Greenpeace.
Meanwhile, Jeremy P highlights the latest news from the EU's catastrophic Emmissions Trading Scheme (ETS). As BOM readers will know, ETS carbon permits are dished out free to industrial energy users, who can then make a packet by selling them, often to public sector organisations like NHS hospitals, which need them to run their heating boilers. Now:
"Dozens of multinational firms stand to benefit from a windfall, which comes from the over-allocation of carbon permits...
...up to 9m extra annual permits have been allocated to 200 companies across almost all sectors of the British economy, from steel and cement making, to car manufacturing and the food and drink industry. Dozens of household names such as Ford, Thames Water, Astra Zeneca and Vauxhall are among the companies that could benefit...
One of the largest over-allocation of permits is to Castle Cement, which makes a quarter of all British cement at three works in Lancashire, north Wales and Rutland. The figures show carbon dioxide emissions from the three plants have fallen from 2.3m tonnes in 2005 to 2.1m tonnes in 2007. Yet, under the ETS, the firm has been handed enough permits to produce 2.9m tonnes CO2 for each of the next five years - an annual surplus of 829,000 permits... worth £83.5m over the five years."
Of course, there is a simple solution to this increasingly costly nonsense - stop listening to hippies, and instead start jailing them when they commit clear acts of criminal damage.
Still, at least the government does read BOM. It is following the advice we offered here and is abolishing the entirely useless £15m pa EnergyWatch. Hurrah!
[Yes, OK, as per, they're not really abolishing it, just wrapping into another quango... but they are apparently promising to sack 90% of the quangocrats].
Soaring cost of NHS Direct
NHS Direct? That useless phone service that tells you to see a doctor? Surely, it's been canned, hasn't it?
Er, no. In fact, taxpayers have just shelled out an undisclosed amount to design its brand new corporate logo - a blue balloon.
Postman Patel has the jaw-clenching details (HTP Zizania).
Soaring cost of fascist superstate
Motorist John B was already pretty hacked by the EU's "fines for motorists not carrying spare lightbulbs that anyway cannot be fitted without taking them to a garage". But it's about to get a whole lot worse:
"...car manufacturers will no longer be forced to provide parts and computer codes to independent garages so they can carry out repairs on the vehicles. Instead motorists will have to have their cars fixed at the manufacturer's dealership workshops, where charges are up to 40 per cent more. The average hourly charge at an independent garage is £55.63 compared to £94.70 at a dealership garage, according to recent figures."
As we've blogged many times, the cost of government is so much more than just tax and spend. When last sighted EU regulations were estimated to be costing Britain £120bn pa, or £2 grand a year each.
Soaring cost of perverts in the park
You've probably already seen this one, but from the original Shropshire Star story (HTP Mr Brillo):
"Council staff on the lookout for paedophiles have been ordered to stop and quiz any adults found walking in Telford Town Park without a child. Anyone who wants to go to the park but is not accompanied by at least one youngster will have to explain why they are there.
The policy came to light after two environmental campaigners dressed as penguins were thrown out of the park last month when caught handing out leaflets on climate change.
Telford & Wrekin Council said Rachel Whittaker and Neil Donaldson of the Wrekin Stop War pressure group were ejected because they had not undergone Criminal Records Bureau checks or risk assessments before entering the park" (and watch the vid here).
Yes, it's another OTT nanny/police state commonsense over-ride. Yet according to the Audit Commission, four-star Telford & Wrekin Council is one of our very best - which tells us something about the way the AC rates councils. And as Mr Brillo asks, what does this outrage cost local Council Tax payers?
(As it happens, Tyler himself has suffered park pervert suspicion. While waiting for his car to be MOT'd last year, he sat down on a nearby park bench to munch a sandwich. Within a couple of minutes he noticed two mothers were eyeing him in a very hostile manner from the childrens' playground area. With a horrible jolt, he suddenly realised they thought he was a perv. He swiftly moved on, feeling a mixture of embarrassment and anger, and wondering WTF we can't just put everyone's mind at rest by locking away the actual offenders for life (because as everyone now understands, it's an incurable condition).
More links to follow...