Bishop Hill Business speaks up?
Dec 17, 2013 Climate: Parliament There are signs that some members of the business community may finally have decided to speak up about energy policy. Yesterday, the head of oil refiner Ineos criticised the absurd Hinckley Point deal struck by the coalition government:
"Forget it," Mr Ratcliffe said in an interview with the BBC's business editor Robert Peston. "Nobody in manufacturing is going to go near [that price]."
Mr Ratcliffe said: "The UK probably has the most expensive energy in the world.
"It is more expensive than Germany, it is more expensive than France, it is much, much, more expensive than America. It is not competitive at all, on the energy front, I am afraid."
Commenters have noted his remarks on the TV news last night in which he described the freeze on new investment from energy-intensive businesses, scared off by the lunacy of the British political class.
And today, the head of Aggreko has called for politicians to get out of the energy business.
If it signifies anything at all, it's probably too little, too late, but at least the message may be getting through.
Reader Comments (32)
At last but too late.
Mr Ratcliffe quoted £95 per MwHr from Hinckley compared with 45 euros in France. No contest.
It should make even Dopey Davy think.
The 2nd link doesn't work for me.
"Dopey Davey think"
No never, he doesn't think that is the problem.
We have Ed Miliband, Chris Huhne and Ed Davey to thank for this enormous idiocy. As well as the many financially conflicted members of both Houses of Parliament.
This is only the begining and it will get much worse.
Ineos, which was in danger of closing down last month due to union problems and energy costs, has last week signed a supply agreement with a US gas supplier who is selling gas to Ineos at a saving of 75% of UK prices. This is delivered. Ineos are now investing £300m on a new terminal and storage facility. They claim that the new price instantly puts them into profotability.
Lesson for Dopy Dave, FRACKING BRINGS DOWN ENERGY PRICES.
Me neither.
To be fair to Rupert Soames (Aggreko CEO) he has been pointing out for a number of years now that the good ship UK energy policy is perilously close to the rocks. His speech to the Scottish Parliament on Nov 12th 2010 is well worth a view/read:
video
transcript
Unfortunately Salmond did not have the courtesy to stay and listen. Swinney stayed but Soames' warnings seem to have gone over his head.
...We have Ed Miliband, Chris Huhne and Ed Davey to thank for this enormous idiocy....
I wish that were true.
But, of course, they (together with Cameron and all politicians of note) were only doing what their advisers, the scientific establishment and the vast majority of their voters told them to do 10 years ago.
At that time the scientific justification for believing in AGW was obviously poor and suspect - if you looked at the science. But if you looked at what you were being told by pretty much everyone of importance, the science 'was settled'.
What we have to thank for this idiocy is the continual tendency of humans not to think for themselves, but to believe what they are told by someone with authority. This was noted as a problem with democracy by Plato, was documented by Charles Mackay in his 'Madness of Crowds' book, and has not changed a jot in 2000 years - probably not in 20,000...
I am impressed that my first use of the Unthreaded page at 9.51 this morning resulted in a main blog thread half an hour later!
I think that the tenor of the interview, with no attempt at rebuttal of the forthright assessment spelt out to the BBC reporter, was quite remarkable.
With the EU elections fast approaching and the deliberate silencing of Nigel Farage and UKIP doing nothing to lessen his predicted impact on that poll, all else is being relegated to a holding phase on the back burner in order to fight the single most important plank in the establishment front, namely the defence of EU membership at all cost.
Don't forget that it was Tony Bliar who made things much worse by signing up to the EU Renewable Energy Directive that 15% of our energy would come from renewables by 2020, when his advisors had told him to sign up to 15% of our electricity to come from renewables by 2020%. When we are led by politicians who don't know the difference between energy and electricity, then you know we are in the deepest dooh-dooh. Nobody has done anything to correct this error, all they have done is compound the idiocy by introducing the Climate Change Act, "the most expensive suicide note in history".
Government has but few "responsibilities".
Protecting individual rights from majority rule.
Ensuring security.
Keeping the purse-strings in the "people's" hands.
Maintaining oversight and legislative control of "special" interests, in the common weal.
Sadly, ours are all failing at these basics.
There's now a transcript of yesterday's BBC News item here:
https://sites.google.com/site/mytranscriptbox/home/20131216_bb
True, but the £95 rate applies from 2023 onwards, whereas the 45 Euro rate is current, so there isn't any obvious way I can see of knowing which is cheaper.
How many more like Jim Ratcliffe will it take before the UK government wakes up to the disaster for which we are heading..?
I know Ineos are a big company that uses lots of energy and is conveniently located next to a port, but I wonder how many other firms will be looking to import their fuel needs directly and so avoid the coming debacle.
Bloke Down The Pub
I believe INEOS is planning to import Liquified Gas - it is after a cheap source of ethane for chemical processing presumablty to make polythenes
Companies which consume high energy may well leave the country in search of other places with much lower energy prices.
Bloke
Trouble is, when they do the sums and realise it doesn't make economic sense they may well up-sticks and go where the fuel is. Another 10, 20, 500, 2,000 jobs lost to the UK.
But hell, man, Deben and Yeo and May and Beddington and Nurse and Ward and ...... are OK, so f**** you, pleb!
It looks as if Ineos have seen which way the wind is blowing - specifically the "shale gale" from the US.
Alongside the planned Grangemouth import facilities they have just opened a new deep-sea terminal for ethylene in Antwerp, as their website explains:
"INEOS has a very large demand for ethylene, supplied substantially by its own production from several steam crackers across Europe. To balance the shortfall the company has traditionally bought ethylene from other companies that sit on the ARG pipeline. The new one million tonne deep sea terminal now presents an opportunity for INEOS to import competitively priced ethylene from around the world , thereby improving its flexibility."
Ethylene made from natural gas liquids in the US will be dramatically cheaper than European product from oil. The writing is on the wall for oil-based refineries...
It is worth noting that Grangemouth will be importing ethane to feed its ethylene plant - not "shale gas" in the conventional understanding of methane. Also from the website:
"Ineos said it had decided to build a new ethane tank at Grangemouth in Scotland, with imports beginning as early as 2016 after a £150m investment to an import terminal project."
At that committee hearing Tom Crotty of Ineos remarked that, of the 40-something refineries in Europe, only 4 are gas-based - and 2 of them belong to Ineos - which will give them huge cost advantages over oil-based plants as the availability of ethane and natural gas liquids improves. Looks like they plan to be the last one standing.....
Christmas next week
Strictly ,Downton, Eastenders Corrie (misery disaster soap feast) and don't forget the Queens Speech
Followed by a nice covering of snow,
Grid Watch happily watching the festive power spikes on the Dials
See how close we come to the lights going out.
Please explain why it takes power cuts and the threat to civil order to bring politicians to their senses,
Ethane is present in "Shale Gas".
http://www.ft.com/cms/s/0/2b1753c4-6024-11e3-b360-00144feabdc0.html#axzz2nkU0kRD
"The shale revolution has caused a boom in US production of natural gas liquids used as chemical feedstocks such as ethane, and sent their prices tumbling. Ethane has fallen from 91 cents per gallon in 2011 to about 26 cents per gallon today"
I think Ratcliffe is right to be afraid as an energy consumer. Whatever manifestation of a functioning 'energy market' there was circa 10 years ago, has been nearly destroyed by government being co-opted by the anti-industrialists in the green movement. Rebuilding it is going to be a lot harder than they imagine. I still think that the next UK election will be a good one to lose.
The price of energy in Britain - on the planet - is not a concern to the eco-green. We pragmatists or those who are concerned about the size of their after-bills bank account, are. But we are off the arguing mark when we fail to understand that our point is a non-point, and even an anti-point, for the eco-green.
The point is to stop consumption growth. To be truthful, the real point is to reduce the number of consumers on the planet, but barring speeches about the eco-green desire to stop brown, yellow and black people from reproducing (as the "white" Euro-descendats are already flatlined or dropping below their replacement rate, who are the multipliers of the human race right now/). This is not a racist comment: this is a description of the eco-green's desire to reduce the human demand on the planet's resources and "sustainability" from metal extraction to food harvesting. And if population reduction programmes are just too totalitarian even for their public expression, then consumption reduction by making it too expensive to consume is the way they will go.
Energy costs are fundamental to everything we do. If fuel costs are too high, we don't import food or cheap electronics from China. We build smaller, more insulated homes to escape winter heating and summer cooling bills. We walk to the corner store - and move into town, thereby removing our private vehicles from the road. We take a holiday at Brighton Beach instead of Majorca to avoid flying.
High energy costs kill adventure, impulse and frivolity. When you count the change in your pocket first, you tend not to do whatever crossed your mind. That is the eco-green dream: the man or woman who fiddle in the garden and then walk to the pub for a low-alcohol beer produced in the micro-brewery next door from wheat grown in the fields nearby. Except for the ruling elite, of course, who NEED to travel, make connections etc., but the energy consumed in this fashion is not about wants, only about needs.
So energy costs in Britain? Expensive wind or solar power? The point is to reduce our materialistic lifestyle and thereby reduce the human impact on the world. If legislation can't make us stop, the price in the market will.
There is still the too-many-of-us problem, of course, which would/will come back to the eco-green mindset eventually. I'm not sure they know how to handle it. Not without being in charge, that is. Which is actually what they want ....
Two issues here. Firstly, there is no way that France will out compete the UK as long as the Partie Socialist is in government. Secondly, some energy intensive businesses will stay because they sell only into the domestic market.
President Hollande has followed the world socialist mantra and Taxed and spent whilst promising reduction in gov. spending that hasn't happened. Hollande has two more years to destroy the French economy which he has started well and so will finish. It will take at least 7 years for the next gov. to repair the damage which they will not be able to do because of the syndicats, the associations and the new communauté de communes.
So in summary, the UK has nothing to fear from France. They have a lot to fear from the EU commissariate and from Germany. They have the most to fear from their own politicos who must by now be among the most corrupt in western politics and who are controlled by the big greens like greenpiss, WWF and FoE.
Mr Ratcliffe quoted £95 per MwHr from Hinckley compared with 45 euros in France.
True, but the £95 rate applies from 2023 onwards, whereas the 45 Euro rate is current, so there isn't any obvious way I can see of knowing which is cheaper.
Dec 17, 2013 at 2:11 PM | Unregistered Commentersteveta_uk
Except that the French gov. control the prices. They have been told not to do so by the EU commies but have so far ignored them. Our prices rise by about 2 -5 % per an.
A while back in the 'noughties - I was in Washington state where people were pretty peeved that a local aluminium smelter was out of commission due to it being more profitable to simply flog the leccy 1000km further south due to the machinations of Enron.
There are folk in politics and business who seek to squeeze us dry via our ultility bills.
The ransoming of utility services has quite a long and not very distinguished history. Obviously this lot are being cautious - but they're still "at it" and I do wonder if any of the old gang from the good old days are out and about - like John Wakeham - that quiet "can do" man?
Today 45 Euros is about £38 Assume inflation of 3% for the next 10 years and the price rises to 60 Euros = £51 vs £95 per MWH at Hinkley Point. No contest. As fracking gets going I'd expect 3% inflation on powerstation fuel to be very high if new investment was optimised (some hope with the clowns that rule us). The French government/EDF must be laughing "leur chaussettes" off at us.
Stephen Richards, son of mulder
I think you'll find that the 2023 £95 price is actually the price in 2013 pounds they will pay in 2023 and there is certainly an escalator factor built into the charges and subsidies.
In other words, I believe the £95 and the €45 are directly comparable.
Always take anything claimed by a troll with a liberal helping of sodium chloride.
"Always take anything claimed by a troll with a liberal helping of sodium chloride."
Huh?
Adam G; yes, I realise that ethane can be present in shale gas, as can propane, butane, etc..
I made the comment because much of the reporting infers that Ineos will be importing "shale gas" as fuel and most of the debate on shale is about the possible impact on power costs and heating bills. They will be importing feedstock.
However there is a power plant adjoining the site which is currently fed by the same gas system which supplies the refinery and an export terminal for natural gas liquids from the same system. It is not impossible to envisage that terminal being adapted to import LNG for fuel etc - plenty of waste heat from the power station for re-gassing.
It is going to be an interesting few years and will be pretty dire for Europe's petrochem industry if local shale does not get going quickly and at scale.
Rare ray of sunshine through the unremitting gloom...
Headline on the front of the Daily Telegraph this morning, reporting that fracking will be permitted in all but one county (Cornwall - presumably because it sits on granite)...
Around 2800 wells are projected - with upwards of 20000 (actual) jobs...
Them anti-frackers are going to have their work cut out..!
http://www.flooddamagecleanuppros.com
Super Interesting..
Has anyone seen any BBC mention of these price comparisons? Or is it not in the public interest?
Talking of France reminds me of recent news from a colleague who works there. Reports of Cairo hit by first snowfall in more than 100 years, and Jerusalem covered in 20” of snow, was on the French national TV news. You would think it was worthy of mention by the BBC, but not a peep. Maybe it's not in the UK public interest to know that either.
Has anyone seen any BBC mention of these price comparisons? Or is it not in the public interest?
Talking of France reminds me of recent news from a colleague who works there. Reports of Cairo hit by first snowfall in more than 100 years, and Jerusalem covered in 20” of snow, was on the French national TV news. You would think it was worthy of mention by the BBC, but not a peep. Maybe it's not in the UK public interest to know that either.
In business one has to deal with reality, if the product or service is suitably priced and of the right quality no-one buys.
There is now a large group of post National Service left wing middle class arts graduates who have never had to face reality. Consequently, their conceit that they are morally and intellectually superior to those they disagree with has never been challenged. The experience of being called a F... Useless C..... by a corporal or a foreman when they made a mistake and having to work well with people from all sorts of backgrounds, has been denied to them.
I would suggest this flock of lawyers, politicians, public sector administrators, NGO administrators, arts and social science and environmental science academics in many third rate institutions , journalists /writers which I call "The Parasitic Class " are very much like the vast majority of the monastic bodies in the late Middle Ages. They claim to justify their indulgent ways by "Praying for All" but never undertaking the work which supports their comfortable way of life. In the Middle Ages the King Ruled For All, the Knights Fought for All , The Clergy Prayed For All and the rest Worked For All.
Consequently, unless Business is very forthright and clear, I cannot see this conceited parasitic class giving up their comfortable existence. The new reality is the The Status Quo supporting AGW supports many non-technical and poor quality science jobs. Structural and civil engineers building wind turbines could always obtain employment elsewhere but most people , especially those with poor environmental science and arts backgrounds would be worse off.