Green disinformation: worse than we thought

The other day, I mentioned a report by a pair of NGOs on the subject of fossil fuel subsidies, noting that the usual suspects in the mainstream media had failed to mention that in the UK oil companies are subject to a supertax on top of the Corporation Tax to which all companies in the country are subject.

It now seems that the report was even more misleading than we thought.

The report by Oil Change International is a complete distortion of facts. The authors have described as “subsidies” normal deductions of expenses and capital costs from revenues for calculation of taxable income. These are procedures which are followed in all fiscal systems in all countries for all forms of business and investment endeavors. Under normal definitions of “subsidy” the United States has no subsidies for the oil and gas industry which is why Obama has taken no steps to reduce them.

I wonder if Roger Harrabin is going to investigate?

Public relations, not research

The UK Energy Research Centre - a proud member of the green blob, and a taxpayer funded one to boot - has launched a pair of reports into shale gas today, with a big bash to be held at the Royal Institution. As far as I can see the reports themselves have not been made public, and everybody is reporting the press release. This is usually a sure sign that something dicky is going on.

The headline is that shale gas development in the UK will not make a difference to prices. I assume this meanst that they are just channelling previous reports on the subject, but without the reports it's hard to say. I very much get the impression this is PR rather than research.

Update on Nov 12, 2014 by Bishop Hill

I have now located the report. This bit (p.36) is interesting:

This project has not been about shale gas in the UK ... The bottom line is that the industry in the UK is still in its infancy and a 2-3 year exploration programme is required before we can even begin to answer key questions about flow rates and prospects for commercial development at scale.

There is a passing reference to the scale of likely shale gas development being insufficient to significantly reduce prices, but that is it. So unless I am mistaken, the headlines this morning are indeed nothing to do with research and everything to do with PR.

Another disinformation frenzy

Another day, another wave of environmentalist disinformation mindlessly regurgitated by the mainstream media. This time the great green propaganda machine is looking at a report by a pair of NGOs concerning what it calls "subsidies" to oil companies.

The UK Government is providing £750m a year in tax breaks to North Sea oil and gas, despite a pledge five years ago to end fossil fuel subsidies, campaigners said.

A further £414m in public money is going into fossil fuel exploration overseas — from Siberia in Russia to Brazil, India and Nigeria — a report by the Overseas Development Institute and Oil Change International said.

So once again we have the old canard about removal of double taxation being a "subsidy", repeated without question by STV and old BH friends like the Herald's Rob Edwards, the BBC's Roger Harrabin, and of course the Guardian.

Not one of them mentions the double taxation that is charged to oil companies. Not one.

Update on Nov 11, 2014 by Bishop Hill

Remarkably, the Carbon Brief's coverage is less biased in a green direction than the BBC's.

Fracking up a storm

Nick Grealy, the shale gas guru, reports that he is part of a bid to drill for shale gas and oil beneath the streets of London.

We think the rocks under London have more promise than many believe. This century’s geological history from North America, Argentina, Australia and China is clear: Some of the least likely “conventional” candidates for shale gas and oil end up being the most productive. We have geologists, geophysicists and geochemists on our team. Most of all, we’d love a geo-telepathist. But in the meantime, we’ll need to explore before we can talk about production. Before that stage, we can build excitement about the way we think different: Producing oil and gas from under consumers in an urban setting is a new way of thinking about sustainable energy.

That should certainly set the cat among the pigeons, although as Nick reveals in his posting, one of the areas his group has targeted is less than a kilometre from his own home. So let nobody say he is not walking the walk.

This promises to be interesting.

The green blob and shale

The Lords' Economic Affairs Committee report on shale gas was published some months ago, but there was a "motion to take note" of it yesterday. The transcript is here. There is much of interest, not least the fact that nobody now seems to be taking a stand against shale - even Bryony Worthington.

So where do we stand then? Lord Hollick explains:

What, then, stands in the way of rapid development of this promising natural resource? In a word, it is bureaucracy. The regulatory regime is complex, unwieldy and slow with many government agencies sharing responsibility for approving fracking applications. The process is bedevilled by complexity; it lacks transparency, accountability and consistency. Cuadrilla, one of the companies seeking to drill for shale gas, estimated that it could take up to 16 months to navigate the process of obtaining permission to start drilling. We were told that local authorities were not adequately resourced to deal expeditiously with the approval process. Will the Government take steps to ensure that local authorities have the necessary resources?

We recommended that the Government appoint a lead regulator to address these shortcomings. To get an overall grip and provide authoritative leadership of this important opportunity, we also recommended that the Chancellor chairs a sub-committee of the Cabinet to turn the Government’s enthusiasm into action. The Department of Energy and Climate Change’s frankly flaccid, complacent response to our report provides ample evidence of why that leadership is so badly needed.

I would have thought that closing DECC completely might be the way forward.

Barton Moss comes up trumps

IGas has just told investors about the results of its exploratory drilling at Barton Moss outside Manchester and it looks like excellent news:

The key results from the Barton Moss well cores...are as follows:

• Total Organic Carbon ("TOC") analysis indicates values of up to  5.72% with an average of ca. 1.9%
• The thermal maturity measurements of the shale places the shale in the gas generating window as per the basin model predictions

Click to read more ...

Powerless

 News is breaking of a major fire at the Didcot B gas fired power station in Oxfordshire. From the photos, this a big one which will put it offline for a long time. The station's cacacity is 1300MW or thereabouts, so it represents a pretty serious erosion of the UK's already paper-thin safety margin. Time to start praying for a mild winter.

Updated 11.54am 20 October 2014 and 13.58pm. TM

Peter Atherton, energy analyst at Liberum Capital, said that the risk of blackouts this winter was now far higher due to the UK's "meagre capacity" to absorb unexpected events.

Dorian Lucas, energy analyst at Inenco, said the long term impact of the fire on the UK's power supply could be "significant" if the damage takes some time to repair.

Calling Ed Davey, calling Ed Davey....

Updated...we would like to hear what you have to say now. 

The Old Lady of Eco Street

The Governor of the Bank of England, Mark Carney first came to the attention of BH readers when, at the time of his appointment, it was noted that his wife Diana was (and is) a fervent supporter of the green movement (and redistribution as well as being against conspicuous consumption).

It's therefore interesting to read today that Mr Carney has told a World Bank seminar that fossil fuels must remain unused:

Mark Carney has re-emphasised his support for the idea that oil companies’ reserves could be stranded assets – still valued by investors, but ultimately going to embody losses.

“The vast majority of reserves are unburnable,” the Bank of England governor said – if the world is to avoid catastrophic climate change.

Thinking of hydrocarbon deposits as stranded assets has gained prominence in recent years, helped by movements like the US student drive to persuade university endowments to disinvest from fossil fuel companies.

Apparently Mr Carney wants companies to report more holistically on their business strategy and "how it relates to stakeholders of all kinds, now and in the future...[so that] all groups can express their view, and influence the allocation of capital and credit today".

Given Mrs Carney's views on equality, and Mr Carney's views on outsiders giving their opinions on allocation of private assets, could the Carney family please allocate some of their (considerable) capital to mine?

The underpinning of energy policy collapses

UK energy policy has one key predicate, namely that fossil fuels are going to get inexorably more expensive. This is, not to put too fine a point on it, the sine qua non of the whole renewables programme. Renewables, we are told, will save consumers money, and only if we dig much deeper might we discover that in fact we are actually being told that renewables are being forecast to be cheaper than fossil fuels in the future.

For years that forecast has looked ever more implausible, as all around us a revolution in unconventional oil and gas has caused fossil fuel prices to fall. Now, finally, the government has been forced to respond and to reduce its forecast prices.

Burning gas for power is currently far cheaper than electricity from wind farms, which receive billions of pounds in subsidies from consumers.

Yesterday however the Department of Energy and Climate Change released new forecasts slashing its power and gas price forecasts for later this decade by as much as 20 per cent.

But ministers have repeatedly argued that gas prices will keep on rising, eventually making green energy good value for money.

This is a bit of a nightmare for the greens in government, and it is hard to imagine that the government and its advisers are not going to have to reassess the whole renewables programme. No doubt it is not beyond the wit of the bureaucrats in DECC to come up with some plausible explanation of why renewables will get much cheaper in the future, but it will be interesting to see just how much they have to wriggle first.

Calling a bluff

The FT is reporting some new research by investment bank Lazard, which claims that in some parts of the US wind and solar are now cost-competitive with gas fired power.

Costs have fallen and efficiency has risen for solar panels and wind turbines, the investment bank found, to the point that in areas of strong wind or sunshine they can provide electricity more cheaply than fossil fuel plants.

I asked Ed Crooks, the author of the article, whether this wasn't just levelised costs rearing their ugly head again. He confirmed that it is, but argues that the impact of intermittency is low.

Click to read more ...

Dixon of crock green

BH favourite Richard Dixon points us to this article in a dicky-looking journal called Environmental Health Perspectives. Sound the alarm, cries the great man:

New US study shows living near gas wells, including #fracking sites, is bad for your health.

The study is here. A few interesting features:

• The authors suggest the study is "hypothesis generating" not conclusive.
• The study was funded by green billionaires.
• The underlying survey was performed with the assistance of an anti-fracking group.

Sheesh.

Shale gas getting cheaper

People like BNEF talk about UK shale gas being expensive and hard to extract, although they have not, to the best of my knowledge, ever published the report that they claim justifies their position. In the meantime evidence continues to surface that the technology of shale gas extraction is developing apace.

Just a year or so ago we were talking about breakeven points of $6 for most shale plays in the USA, but as Natural Gas Intelligence reports, US producers seem quite able to get product to the surface at prices below $5:

Click to read more ...

The ASA is a kangaroo court

Americans tend to be completely taken aback when they learn that the UK has a body that rules on what can and cannot be said in the public sphere; they see the Advertising Standards Agency as an affront to the hallowed principle of free speech. A ruling against an advertisement in the Telegraph by US unconventional gas company Breitling suggests that they are right to do so.

This is not the first time that the ASA has been called on to adjudicate in a shale gas case. Last year, shale gas operator Cuadrilla was hauled up in front of them after a complaint about a leaflet it had distributed. Some of the ASA's ruling was bizarre. For example, a statement that

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Closing submissions

The closing submissions for the planning inquiry into Dart Energy's coalbed methane project at Airth have been published and for sheer entertainment value it's going to be hard to better m'learned friends' summary of the evidence submitted by our old friends Professor David Smythe and Dr Marian Lloyd-Smith

The Professor is retired and has been since 1998. He agreed he has been out of mainstream geology since 1998, because as he put it he had no longer has “slaves” to do “donkey work” for him. When the question was put directly again he answered with a simple “yes” that he has been out of the mainstream for fifteen years. Since his retiral he has lived in the South of France running a little business (in fact a B&B).

Click to read more ...

Renewables cannot sustain civilisation

The other day we were considering the concept of EROI, the amount of energy you get out of a given technology for the amount you have to put in. Specifically we were looking at the figures for solar PV in Spain.

With splendid timing, the Energy Collective has published a post considering EROI for the full gamut of energy technologies. At first glance the story looks not too bad, with wind and solar PV (so long as it's in a desert) above the minimum level of 7 that the article says is needed to sustain a modern society (breakeven EROI of 1 is not really worth the bother). The problem arises when you have to start storing all energy from renewables, which as their adherents suggest is the key to having them compete with fossil fuels.

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