Guest essay by David Archibald
During World War II, one Russian physicist realized that the United States was working on an atomic bomb when articles about high energy nuclear reactions disappeared from the physics journals he subscribed to. As an interested observer of coal-to-liquids (CTL) developments, I got the same feeling when reading the programme for the World CTL Conference 2013 held in Shanghai on 16th April. There was almost nothing about China’s CTL projects.
We all know that China has building coal-fired power stations at the rate of one a week. They are also building a number of CTL projects. News on these projects now seems to come largely from Western equipment suppliers. For example, the MAN Group of Germany announced the sale of compressors for the Shenhua Ningxia CTL project. The compressors will be used to make 40,000 tonnes per day of oxygen which equates to CTL production of 120,000 barrels per day.
Shenhua is China’s largest coal company. The Shenhua website doesn’t mention the Shenhua Ningxia CTL project which would have a capital cost of the order of $10 billion. In fact the company’s news section on its website hasn’t been updated for a year. It seems that news on CTL projects in China has gone dark.
Why would that be? Let’s go on to look at the state of fill of the Chinese strategic petroleum reserves as outlined in this document. China has accelerated the rate of build and fill of its strategic petroleum reserves in the last few years. It could reach its formal target of almost 700 million barrels, equivalent to the US strategic reserve, by 2015. This graph shows the comparative size of the US, Japanese and Chinese strategic petroleum reserves:
I believe that the reason China has gone dark on its CTL projects is because it considers that they give the country a competitive advantage. Shenhua has stated that its first CTL plant, a direct liquefaction facility in the Ordos Basin, has an all-in cost of $60 per barrel and that it is very profitable. Now any company, and any country, in the world that has coal deposits could copy Shenhua’s successful example and start making money from their own CTL projects. That isn’t happening. Why might that be?
A big clue is in the quote following from an interview with an International Energy Agency analyst. The role of the International Energy Agency, based in Paris and largely funded by the United States, is to talk down the oil price as a counterpoint to OPEC. It is not to be confused with the Energy Information Administration, part of the US Government.
“During a recent briefing in Washington, D.C., IEA analyst Laszlo Varro was pessimistic about CTL. “Essentially, energy policy needs to replicate a war blockade,” he said. “The only country that has meaningful investments in coal to liquids is China.”
Varro added, “It’s a big carbon dioxide factory.”
With the EPA in the United States hell bent on closing down existing coal-fired power stations using carbon dioxide emissions as the excuse, getting funding for a new coal-burning facility of any sort is going to be a difficult sell. The consequence of that is that the United States is denying itself its largest potential source of liquid transport fuels commercially viable with current oil prices and technology (that definition allows me to avoid mentioning the Green River Shale).
Let’s put the potential for liquid fuels from coal in the United States into perspective. In the four weeks up to 17th May, the Unites States produced an average of 7.315 million barrels per day which is an annual rate of 2.670 billion barrels. In those same four weeks, the United States had net petroleum imports that were slightly higher at 7.324 million barrels per day which is an annual rate of 2.673 million barrels. All up that is an annual consumption rate of 5.343 billion barrels. For those who still think that the Bakken Formation in North Dakota has untold wealth and should be factored in, the United States Geological Survey recently released an assessment of that formation’s potential of 7.4 billion barrels of undiscovered, potentially recoverable oil. So the potential of the Bakken accounts for about one and a half years of the current consumption rate.
The United States currently burns about one billion tonnes of coal per annum in power stations. Put through CTL plants, that one billion tonnes could make 2.2 billion barrels of liquid transport fuels, largely replacing the imported component of oil demand and making the country energy independent. It is not the price of oil that is stopping that from happening. It is the witchcraft and voodoo of official climate science. Of course the electric power coming from coal would have to come from another source, but that is doable too.
Now let’s go back to that quote from the International Energy Agency analyst: ”energy policy needs to replicate a war blockade.” and “the only country that has meaningful investments in coal to liquids is China.” It seems that one of the reasons that China is investing in coal-to-liquids is that it expects to be subject to a war blockade in a war that it will start itself. On the other side of the Pacific, the United States, which will do the heavy lifting in any such war started by China, is handicapped by denying itself a potential supply of liquid transport fuels and the optimum allocation of its resource endowment. That, dear readers, is the worst consequence of the witchcraft and voodoo that is the current state of official climate science.
Congrats to Europe. Welcome back.
It sounds like good news, but green-politics is so deeply ingrained that I won’t believe it until I see some more tangible results.
looks like they are salvaging something from the wreckage.
The goal was to turn the world population into serfs owned by the government by using high cost energy as control. It appears unlike their ancient ancestors they do not have the stomach for it. Capitalism is still alive and kicking.
Don’t bet on it Bob. We in the UK are still subjected to the Climate Change Act and are ruled by a metropolitan elite like Cameron/Clegg and their climate change acolytes who don’t want to know anything about the real world.
http://www.theccc.org.uk/tackling-climate-change/the-legal-landscape/global-action-on-climate-change/
R E Snape
Just noticed. the hockey stick is back. see electricity prices graph.
Don’t forget that the EU budget that was accepted recently allocated 25% of its funding to green issues. The EU has a long history of re-running votes until the ones in control get the result they want. Whither democracy?
you honestly think that a ruling elite who ban the use of olive oil in a bottle on a restaurant table unless it has the required packaging, labeling and source, will change anything based on this?
Straight bananas anyone?
We just need a Greece, Cyprus or Spain to say enough is enough. Unfortunately I only see a civil war doing this.
R E Snape
Not to worry, sooner or later reality will rise up and bite your elites, and bite them hard. The problem is the continuing harm being done to the innocent during the interim.
Ray
It’s no blo.dy surprise. Summer starts in few days time, in SW London today temperature at midday was only 11C, for tomorrow forecast is 9 to 10, with snow showers in the west of England. Daily max temperatures have been in steep fall for some months now.
http://www.vukcevic.talktalk.net/CET-Dmax.htm
Wait until things happen before you jump for joy. I see more rules and regulations imposed if fracking is undertaken which will render costs higher than ever. It is the EU way.
The idea of the EU was drempt up by two French communists so do not expect any common sense policies promoted by democratic vote. You only have to see the new rules about olive oil to see what a bunch of idiots they are in Brussels.
Since the US levels of CO2 production have dropped due to natural gas, it is possible to have both lower energy prices and a drop in CO2 production.
If they want to help the biosphere, they’ll burn as much CO2-producing, plant-greening, biosphere-expanding fossil fuels as they want. (“Want” defined by free market forces, of course.)
Besides, it will help get them out of the clutches of Russia, who isn’t going to be committing economic suicide with stupid green policies but rather is trying to gouge Europe with their over-inflated gas prices. Promoting shale gas development in their own countries simply removes Russia’s hangman’s noose from around the necks of the EU and makes them more prosperous.
Someday they’ll start tearing down that horrible forrest of windmill turbines they’ve allowed to fester their once-beautiful landscapes. That will probably happen right after those less-than-efficient, inferior-duty machines start falling apart.
I hope the EU has budgeted for the cleanup.
If the EU actually reverses course and embraces cheaper energy over “sustainability”, will the 10:10 campaign folks be running adds showing rogue commissioners exploding?
What’s significantly missing is any acknowledgment that global warming ain’t what it was cracked up to be – the media refuses to acknowledge their huge part in creating climate hysteria. So what else is new?
Here in Scandinavia all the politicians and the MSM are all global warming zealots. It is going to be interesting to see how this is presented in the media.
Cheaper energy led to more jobs. Gosh, who would have thought?
Love it or hate it, the most cheapest source of energy is still fossil fuels. Other chemical methods may be developed (and soon), but none are yet available on a large enough scale.
I will believe it when I see it. There will be much wailing and knashing of teeth from the greenatic fringe. Cameron has all the backbone of a field of corn in a stiff breeze. His glove puppet, Clegg, has so much green on him he is going mouldy. Ed Davey has his head so far up his own jacksy that he uses a leather belt for a tie. Until a few more MP’s grow a pair they will do nothing for fear of losing their cushy little all expenses (+) paid velvet seats and having to go and get a real job.
It will take another lustrum, or perhaps even two, of no warming before the CAGW paradigm finally collapses and politicians turn away from their panic-stricken carbon strangulation policies.
It’s the same in Australia with the millions squandered on solar and wind ‘reshiftable’ power bills and now listen to the gall of the leader of the Greens who along with Labor in coalition have implemented a carbon tax to deliberately raise the price of energy-
http://www.adelaidenow.com.au/federal-election/greens-promise-electricity-prices-to-drop-under-proposed-review/story-fnho52jl-1226649500714
Their answer to the train wreck is to set up another Gummint agency to monitor rising power prices. Unfreakingbelievable!
“From a common point in 2005, three lines diverge widely to reflect the fact that prices in Europe are now 37 per cent higher than those in the US, and almost 20 per cent higher than those in Japan.”
—
That is not correct. The chart was normalized to prices of 2005, in order to show diverging recent trends; however, the absolute prices in Europe were already higher as of 2005.
Good point, Michael Palmer. Eurocrats weren’t born yesterday, and have plenty of minions to make statistics look less unfavourable. They’ve been playing this game longer than most of us.
Now go the whole hog and return to using coal fired stations. Here in the UK the idiots are converting from coal to imported wood clippings.
I wonder what the USA graph would look like if PG&E’s increased costs for electrical energy was removed from the graph as the costs for PG&E in the residential market look a lot like Europe’s:
PG&E Rates over time (E-1 residential rates)
Date AVG
Jan-05 0.12229
May-06 0.13733
Mar-10 0.15818
Jun-10 0.18895
Nov-11 0.18259
12-Jan 0.18299
7/1/2012 0.18703
5/1/2013 0.19362
philjourdan says:
May 23, 2013 at 7:15 am
According to a Ragone plot, gasoline is one of the best energy sources around when compared to “other chemical methods”. However, another energy source outdistances any “chemical method” known by at least an order of magnitude, and likely several!
This source is illustrated on the Ragone plot comparing it with most others here:
http://pesn.com/2013/05/20/9602320_VINDICATION–3rd-Party-E-Cat_Test-Results-show-at-least-10x-gain/
I copied and pasted my spreadsheet of PG&E AVG E-1 residential rates incorrectly above: The corrected Avg price for a kwh of electrical energy from PG&E (E-1 rate schedule) is noted below:
Date AVG
Dec-97 0.12229
Jan-05 0.13733
May-06 0.15818
Mar-10 0.18895
Jun-10 0.18259
Nov-11 0.18299
12-Jan 0.18577
3/1/2012 0.18703
7/1/2012 0.1859
5/1/2013 0.19362
@ RockyRoad says: May 23, 2013 at 8:32 am
I just read about E-Cat (perhaps we read about it at the same place?). It is too early to tell if that will have practical applications and usage. But it does look very promising!
Yes, philjourdan–I’m waiting with bated breath, too. Physicists have ignored weak forces while experimental chemists have embraced them. It will be interesting to see what wins the energy competition–hot fusion that’s always 20+ years in the future, or LENR that may be realized this year or next.
We live in exciting times.
Old news: Stupid is as stupid does.
Anti-industry EU policies/regulation, deficit spending on scams; Resultant: EU 27 million unemployed. Three EU countries facing bankruptcy. EU consumer subsides to ‘green’ energy 400 billions euros since 2004. Estimated ultimate Germany subsidy to ‘green’ energy based on current policy 1 trillion euros.
This is new: The environmentalists are at least applying basic arithmetic analysis to energy requirements of the developing world Vs soft energy.
Predicted out come, post epiphany (understanding of reality) that soft energy does not work, nuclear energy only viable option if there is a climate crisis?
Lesser of two evils. Climate crisis disappears.
… mainstream environmental movement teetering between apocalyptic thinking and utter disarray. Plunging headfirst into this challenge comes PANDORA’S PROMISE, … …acclaimed documentary filmmaker Robert Stone that recently premiered at the Sundance Film Festival. Three years in the making and filmed on four continents, this meticulously researched and beautifully crafted film asks whether the most viable option we have to tackle climate change might be the one technology we fear the most: nuclear power.
http://www.rottentomatoes.com/m/pandoras_promise_2013/
http://www.rottentomatoes.com/m/pandoras_promise_2013/
For all you posting from the EU, let me tell you what the situation looks like from Texas, where I am. (In the Natgas biz, of course) Over here, we HOPE your leaders continue to pay lip service to your problems while doing nothing, and we HOPE that your governments don’t figure out how to start taking advantage of all the cheap energy they could have if they were competent. You know why? Because every week now, another manufacturing plant shuts down in the EU and moves to Texas, to take advantage of our unlimited energy supplies. This has put us in one of the biggest economic booms I have ever seen! Just saw the numbers, state population increased by 465,000 in just the last 12 months. Imagine how much economic activity it takes to build the facilities to feed and house that many people – it’s like having to build a new city for half a million people every year! If anybody out there needs a job and doesn’t know how to find one, well Texas is the place you need to be!
Any acts of rationality on the part of the EU leadership might slow things down here, but I’m pretty sure that we’re safe from that happening anytime soon – and when it does happen we’ll be so far ahead of you economically that you’ll never catch up.
Oh, and for the Aussies out there reading, if you didn’t know, Ford is shutting down all of its Australian plants soon because of your carbon tax. They’ll mumble other reasons, but that’s the big one. Guess you’ll buy all of your cars from China now. Congratulations!
Didn’t I just read that Ford is closing its plants in Australia. One of the reasons being “high costs”?
http://www.reuters.com/article/2013/05/23/australia-ford-announcement-idUSS9N0C402820130523?feedType=RSS&feedName=rbssEnergyNews&rpc=43
Any reduction in green subsidies will be more than compensated in tax hikes. Do not expect prices for customers to drop. The EU is insolvent and will take all they can and then some.
Looks like this is the new trend:
http://www.powerlineblog.com/
ENVIRONMENTALISTS FOR NUCLEAR POWER
Very interesting, short article.
Now, here in the US, we’ll just see whether Der Fuehrer (aka Obomination) of Summary Executions, Benghazi, IRS, AP/Fox, HHS Protection Racket, EPA CO2 Pollutant, and Crony Capitalist fame will recant his green idiocy. Not likely, methinks, with all his gauleiters in Congress (e.g., Boxer and Whitehouse) crying global warming behind the Oklahoma tornado.
If Congress had gone along with Obama’s demands for limits on CO2 emissions the U.S. would have ended up as the only country whose economy was handicapped by this B.S.
Which is exactly what the so-called paranoids were claiming would happen back when the Kyoto protocols were being pushed.
But how many years lost, how much competitiveness lost, how many jobs lost, and how much will it cost to put right the damage to our environment, our economies and our lives?
“In a report on the Electricity Market Reform published today, the Committee on Climate Change presents new analysis showing that there are significant economic benefits from investing in a portfolio of low-carbon technologies through the 2020s rather than investing in gas-fired generation.
The report finds that investment in a portfolio of low-carbon technologies could save consumers £25-45 billion, rising to £100 billion with higher gas and carbon prices.”
from http://www.theccc.org.uk/pressreleases/government-commitment-to-support-investment-in-low-carbon-technologies-would-secure-significant-savings-for-uk-consumers-23-may-2013/
This is so good to hear, and yes, of course it’ll take time. The point is they have woken up and are looking to get things in motion for a shift away from Green. This shift in mind-set is a must and should be celebrated.
I bet the Greens are feeling a bit… er… green right now, and not with envy, either. Poor dastards.
Louise says:
May 23, 2013 at 11:55 am
“In a report on the Electricity Market Reform published today, the Committee on Climate Change presents new analysis showing that there are significant economic benefits from investing in a portfolio of low-carbon technologies through the 2020s rather than investing in gas-fired generation.”
And? Do you believe them, Louise?
Finally something sensible comes out of the EU.
DirkH, in the spirit of open debate, I thought I would just point out that there are other views. How to choose which of them to believe is a different issue altogether. The description of the make-up of this committee can be found here http://www.theccc.org.uk/about/structure-and-governance/committee-on-climate-change/. They don’t appear to be leftist/greenpeace/activist people but others can judge for themselves. That’s why I posted – debate should include positions and information from all aspects.
Re CCC report: Nice to see that Mr Yeo and Lord Deben are earning their money.
JF
http://www.rolls-royce.com/news/press_releases/2013/power_generation_contract.jsp
(48% efficient if electric only 78% IIRC as combined heat and power. Quick to build. Burns gas. Saves letting the lights go out, rationing, riots. Obviously a non-starter then.)
Encouraging words from Cameron. Lets hope they were inspired by the arrival of common sense rather than driven by the kick up the butt that the recent successes of UKIP at the polls delivered to the Conservatives, Labour, Liberals.
Indeed the swing to UKIP not only came from nowhere but was so great that the 3 main parties might have begun to fear that UKIP could go from nowhere to a majority in parliament in one hit. The next general election might actually be interesting.
I guess for those of you on the other side of the pond that would be like the Tea Party on steroids, but in the end the American public wimped out so it was more like the Tea Party on valium. Maybe at the next UK election the UK public might also wimp out, we’ll see.
Certainly ten years perhaps a generation.
Louise says (May 23, 2013 at 12:25 pm): “That’s why I posted – debate should include positions and information from all aspects.”
No debate necessary. If “investment” in “green” power requires government “encouragement” (i.e. mandates and/or taxpayer money), then it’s not economically viable. If the market chooses “green” without government intervention, then it is.
Louise says:
May 23, 2013 at 12:25 pm
… They don’t appear to be leftist/greenpeace/activist people but others can judge for themselves. That’s why I posted – debate should include positions and information from all aspects.
You are naïve if you believe that the members of the CCC don’t have vested interests or are not activists. Just google ‘Deben conflict of interest’.
It’s the 23rd May, 2140hrs GMT and in here in Selsey, southern England the air temperature is 6C with a stiff breeze blowing. My house is cold but I cannot afford to put the heating on because I burned my annual heating budget in the first three months of this year. Electricity and gas ( not petrol, for US readers) prices have risen to levels many can no longer afford.
The sector of the population most likely to turn out to vote here is the over-50s, we are the ones, those on fixed incomes, who are most impacted by the ever-rising costs of any form of energy. Gas is up, electricity is up, even petrol costs more than US$2 per litre.
Our increased energy prices have driven up the price of almost all foods, public transport, such as buses and trains, is no longer affordable but the cost of simply staying alive rises inexorably.
Everyone in my age group with whom I speak is vociferous in their condemnation of the Climate Change Act and the Greens who foisted it upon us. Our big three political parties are losing massive numbers of supporters because of their unwillingness to repeal the one Parliamentary Act which is devastating this country. Some are turning to the nascent UKIP party, others are leaving this country whilst others are simply turning their backs on the whole political process and will no longer vote for anyone.
This link shows how “resilient” our energy policy really is:- http://www.dailymail.co.uk/news/article-2297296/British-gas-reserves-run-dry-36-HOURS-freezing-householders-turn-heating-up.html
And here’s one of the many news articles which serve to fuel the rising disgust which we British have for our ‘Government’. “They couldn’t run a whelk stall ” is a very common opinion!
http://www.berwick-advertiser.co.uk/news/local-headlines/fallago-rig-wind-turbines-start-turning-1-2939469
The head of states of the EU don’t really matter. What Germany wants Germany now gets. Even the French who once thought that through the EU they could ride the German industrial machine to greater world influence now accept their junior role. The German’s didn’t want this primacy but they now have it. In Germany, the Greens often hold the balance of power so even though they get only a few percentage of the total votes they wield a huge amount of power.
It is just possible the EU bureaucracy, with its well-deserved reputation for idiocy and expensive dictats, may have seen the light. Since the beginning of the year some reasonably sensible stuff has been emerging out of Brussels – the recent banning of olive oil jars in restaurants being an obvious exception.
The EU has for so long been a promoter of bureaucracy, unnecessary expensive regulations and dangerous greenie fads that it is difficult to believe it can change.
However, shale gas, may be the Eurozone’s only hope for economic salvation.
Pampered lifestyles for pointless bureaucrats in Brussels are going to require economic salvation – and they know this all too well. Hence, the change of heart about fracking.
The hilarious part is that an aggressive fracking campaign will do more to lower carbon output than all the wind turbines and solar cells that have been built so far. Lower gas prices and stable EU gas production will save money too! The reason that Denmark has such high emissions is that it, like other EU countries does not want to rely on a Russian billionaire for winter heat & power.
To .
wws says:
May 23, 2013 at 9:45 am. You were right on the money about Ford here in Australia. They have just announced that they are packing up and leaving in 2016. Reason they gave was our costs here are double Europe and four times Asia (Read ”Carbon Tax” for costs here in Australia).
In reply to: “Louise says: May 23, 2013 at 11:55 am
“In a report on the Electricity Market Reform published today, the Committee on Climate Change presents new analysis showing that there are significant economic benefits from investing in a portfolio of low-carbon technologies through the 2020s rather than investing in gas-fired generation.”
William: Hi Louise,
The devil is in the details. There appears to be no way to simplify this any further.
The cost to Western countries to reduce carbon emissions worldwide (not locally) by 80% has been underestimated by a factor of five to ten, all costs in (see below for details). The Western tax payers will not accept war time like sacrifices which would be required to support a carbon limiting world deal. There is only so much GDP for taxation. There needs to be tax dollars for education, health care, roads, bridges, police forces, to run governments, and so on. Tax payers hope to retire by 65 and need to have some surplus funds to save for retirement.
The Committee on Climate Change assumes a world tax on carbon and carbon calculations for all goods manufactured. i.e. The cost of pants manufactured in China would include a tax on the carbon to manufacture the pants and to transport the pants to Britain. The carbon goods tax is assumed to keep a level playing field and move manufacturing back to Western countries and/or avoid more job loss to low cost energy/labour countries.
The Committee on Climate Change do not include in their economic calculations the cost to the Western tax payers to get agreement from the developing countries.
India and China have stated that they will not sign on to a binding world carbon capping agreement until they reach the same economic prosperity as the Western countries and in addition they have requested that Western countries reduce their carbon emissions by 80% before the developing countries need to act.
And in addition they are asking that the Western countries transfer a percentage of Western GDP every year to assist the developing countries in the transition to a super low carbon economy.
And in addition some of the developing countries would like compensation for historical past CO2 emissions from the Western countries. This would in particular disadvantage Britain.
There is zero chance of a reaching a world agreement on CO2 emissions. Western voters would not support it. Developing countries will not stop their development to protect against a non-existing problem (The science does not support boiling oceans or even slightly high warming.) unless the Western countries are willing to bankroll the madness.
http://www.theccc.org.uk/wp-content/uploads/2013/04/CF-C-Summary-Rep-web1.pdf
Reducing the UK’s carbon footprint and managing competitiveness risks Committee on Climate Change, April 2013: Competitiveness
In theory, UK climate policies could cause the production of goods and services to shift overseas and they would be imported instead. This would reduce emissions as measured on a production basis, but not on a consumption basis
Trends in the UK’s carbon footprint
The UK’s carbon footprint has increased over the past two decades, as growth in imported emissions has more than offset reductions in production emissions. However, our analysis shows that offshoring of industry in response to low-carbon policies has had at most a minor impact in reducing production emissions, and the carbon footprint would have increased more had production emissions not been reduced.
The UK’s future carbon footprint
To achieve the climate objective 2, there is a need for a global deal to substantially cut global emissions over the next decades. A consequence of this would be that the UK’s carbon footprint would fall.
Competitiveness risks of carbon budgets
. These risks exist for energy-intensive industries where low-carbon policies could have a disproportionate effect on costs, impacting on profits, location and investment decisions. However, our analysis suggests that policies already announced by the Government should be sufficient to address competitiveness risks for energy-intensive industries to 2020. These would continue to be manageable beyond 2020 in a carbon-constrained world where other countries commit to and deliver the emissions cuts required to achieve the climate objective. If other countries were to depart significantly from this course, an assessment of global ambition and therefore ambition in UK carbon budgets would be required, rather than of competitiveness risks per se.
What we have witnessed in the past is control, control, by the bureaucrats. Shades of Orwell’s, 1984 (actually too close for comfort). But they are learning ever, so slowly, that no one can control the climate. Switch on, switch off.
Welcome to a truly green Europe.
What is rarely noted is that often such policies are “brown” not “green”. In order to substitute something for “carbon”, other things need to be done. How “green” was the 3 gorges dam in China? Would you dam all the major rivers for Hydro in Europe? Nuclear is or can be green (LFTR especially), but they don’t want to do that either. The windmills aren’t merely quixotic, they kill birds and change weather more than anything a few ppm of CO2 could do. Nor do they want them where the wind is (nor tidal power where tides are, etc.).
Over the last 8 years, the price for energy paid by the average UK household has risen from about £600 to about £1470 per year, It has more than doubled in the past 8 years.
The UK government keeps on telling UK citizens that its green energy policy is only adding about £70 to the bill. The government suggest that it will only add a further £70 or so over the next few years but the consumer will be paying less for energy due to energy savings, more efficient electricial equipment, more efficient central heating boilers, better insulation, smart meters which will cut electricity usage.
The UK government is being very misleading. Already the average bill includes about £700 (not £70) to cover green energy costs and policy. Presently, the UK media has not explained this to the public and the bills issued by energy companies are not transparent.
About a month ago, the head (may be he was the financiakl directo) of Scotish & Southern Energy, which is one of about 5 large energy producers in the UK, was interviewed by the BBC. In this interview he said that the cost of supply (ie., the costs of producing and supply electricity to the consumer) represented about 50% of the bill total. He was rather vague as to how the other 50% of the bill was made up, and since the BBC do not like going off message, he was not really pressed on this. However, the picture he painted in broad terms was that that 50% was made up of two components. Half was made up by direct costs associated with green renewable energy. The other half was made up of costs forced on the industry by UK government policy. With regard to the latter he mentioned, costs with the energy company has to bear in providing subsidiseed home insulation for households that qualify for cheap insulation, and costs relating to subsidies which the energy company has to bear with reagrd to fuel poverty.
As noted the BBC interviewer did not remark on this extraordinary comment highlighting that only half of the bill relates to the cost of supply and that half of the bill relates to matters other than production and supply costs of energy. The BBC did not ask the director to elaborate on the the other 50% of the bill total.
So there you have it. Of the average £1470 bill, only 50% represents the costs of energy production and supply. About £730 covers costs associated directly or indirectly with UK green energy policy. About £370 is paid to cover the extra costs of green energy (presumably the costs associated with the minimum tarrif paid to windfarms with represpect to energy supplied by them to the grid and the feed in tarriffs paid to consumers who supply ‘excess’ energy to the grid). about £370 covers the costs of subsidising house insulation (there are loft insultaion, cavity wall insulation, subsidised central heating boiler changes, fuel pumps, and even double glazing schemes whereby energy companies subsidise the installation of these to customers who qualify for the subsidy) and about £370 goves to cover the company for schemes designed to help those in fuel poverty. The latter is particularly ironic. Government policy raises energy costs so high that many are forced into fuel poverty, with the result that the average cionsumer has to pay even higher prices to help those forced into fuel poverty. If UK policy had not been to hike the average energy bill so much there would be far fewer in fuel poverty and hence this part of the bill (which is about a quarter of the bill) would be lower.
People fail to understand that companies never pay any expense (the same is so with company tax which is much in the news because of so called company tax evasion). Every expense of a company is paid for by the consumer (those who buy its products or pay for its services). So any expense that a company has to pay is passed onto consumers, or more accurately consumers who can afford to pay. Those on welfar benefits or very low paid often recieve handouts (sometimes routed via the company by way of discounts, lower tarriffs, or by way government handouts such as tax credits or welfare payments).
So it is the consumer who has to pay the costs associated with providing cheap insulation or double glazing to the less well off, or who has to cover the bad debts pertaing to those who cannot pay their bills and defaults. It is the consumer who pays the generous feed in tarriff paid to the few wealthy people who can afford to spend £25,000 to £30,000 fitting solar arrays on their large houses, or the wealthy land owner who can instal some wind turbines on their large estate and get paid generous feed in tarriffs, and even paid when their turbine does not produce energy.
If only their was political will the cost of energy in the UK could be halved overnight by abollishing all the incidental green energy elements associated with the bill. Indeed, if the UK was to concentrate on energy production from coal with no CCS (the UK has enough coal for 1000 years or more) then the costs of supply could also be reduced.so that there could be even greater savings.
Those in the UK will have to wait for the MSM to highlight the true costs behind the fiasco of the UK green energy policy.
tz2026 says:
May 23, 2013 at 5:47 pm
“Welcome to a truly green Europe.
What is rarely noted is that often such policies are “brown” not “green”….”
////////////////////////////////////
This is true.
In the UK ,we are closing down coal fired generators and converting them to burning biomass. Biomass is not green. It has a significantly lower calorific value than coal and wnet burn it produces more CO2 per Kwh than does coal. That is not green.
Drax is a coal fired generator build on a coal pit. Not much energy (and hence CO2) is required to get fuel to the power plant. Now that it is being converted to biomass, it requires wodd 9wood chippings) sourced from forests in America to be shipped all the way from america to the UK. That too is not very green. If people want to be green, they should simply leave the forest in place in america and not destroy an old and natural forest.
Wind turbines are not green. A lot of CO2 is produced in their manufature, transportation to site, erection (including the requirement for substantial quantities of concrete) and connection to the grid, not to mention the precious metals involved and pollution in China. Once erected, they do not save CO2 emissions since they require almost 100% back up by conventionally fuelled generators which power generators are not working at optimum efficiency and produce more CO2 than they would do if sun at peak efficiency mode. Not a single conventional power station has been closed any where in the world as a result of being made redundant by windfarms.
That says it all. The flagship policy does not result in the reduction of CO2 emissions so what is the point of them. It certainly is not that they produce energy cheaply. Nor is it that they produce energy reliably and dependably. Their is no economic case, no security case, nor green environmental case for windfarms. That is the mad world of EU politics led by green zealots and pressure groups.
This posting seems to have inherited all the comments from the previous posting on the relative energy costs of EU, USA and Japan, and that post seems to have been disappeared.
Is something broke?
re steveta_uk
Yes, same for me.
Hang on, all the comments above relate to a 23 May article. Not the current one.
Here is a consequence of the global warming scare.
WWS’ comment about the boom in Texas is yet more confirmation that Europe is in deep trouble.
In my view the US is only at the very start of a recovery/expansion similar to that after WWII. At the moment we are seeing the “first wave” with investment going into production of the resources and first-level processing. As well as providing cheap utilities, that will reduce the cost of commodities like basic chemicals, plastics, fertilisers, etc.. In turn that will encourage the onshoring of manufacturing as the cheap utilities and commodities, with the saving in shipping, will negate the cost advantages of China et al. Each of these phases will bring with them the further expansion of support industries, services, suppliers, etc..
Sadly I fear that Europe is going to be hammered between the resurgent US and the ever-growing China and India. That may well end up in massive protectionism which leads down a very dark road.
Returning to the theme of CTL; it may be booming in China but it is also healthy in S. Africa. They set up a major industry to provide fuel during the years of the apartheid embargoes. It is still running: 50% of jet fuel is CTL- sourced, for example. There is also the potential for underground gasification which avoids sending people underground and/or ripping up the countryside. I believe there is a pioneer project in southern Australia where UGCG will be used to provide feedstock for fuel synthesis and to generate power.
More significantly…why only focus on CTL? Surely Gas-to-Liquids is at least as viable? Shell’s huge Qatar project is booming. While present gas supplies may not match coal, would anyone bet against us mastering gas extraction from methane hydrates?
Heh, I was wondering why Archibald was ignored. That’s unusual. But ignoring China is ignorant, and usual.
==============
When blogging about the Shenhua Ningxia CTL project last month, I concluded:-
That is, my political conclusion is China is putting the prosperity of 20% of the world’s population before pseudo-science. Keeping quiet is Chinese PR. Aside from oil coming from politically unstable areas, Chinese demand is rising faster than global output. An oil blockade like in 1973 would stop Chinese growth in its tracks, causing political unrest. China starting a war would be even worse, causing the economy to contract.
“wws says:
May 23, 2013 at 9:45 am”
Yes, Ford made the announcement yesterday. 1200 shopfloor jobs to go in 2016, ok so they have a few years. This will have a downstream and detrimental effect on suppliers too, with estimates of 10,000 indirect jobs lost. Ford plans to keep design and development teams however. Costs were cited as the main reason, wages here are higher than in the US. Making cars here costs twice as much as in the EU zone and four times as much as Asia. The CEO also stated energy costs, which in Victoria where Ford is based, are rising steeply. Of course energy intensive industries like car makers are being stung for AU$23 tonne of CO2. And yet, we have people in Aus who strongly believe the “proice ohn cahbon” has no impact on the inputs to production.
“TomB says:
May 23, 2013 at 9:47 am”
Ford has made operating losses of AU$600mil over the last 4 years even after receiving AU$2bil over the last 10 years from federal and state Govn’ts. The Australian Govn’t keep stating they are focusing on jobs and growth in the manufacturing base however, they have deliberately made energy intensive industries less competitive simply by introducing a tax on energy, the so called price on carbon. I have yet to see a wind or solar powered Bessemer Converter. With all the other taxes companies have to pay (Such as the payroll tax: A tax for each employee) its no wonder they are pulling out.
Rumour is there is a large direct coal to liquids plant on the go in the NW of China. It is not a Sasol plant which is the indirect process (Fischer-Tropsch). If it is sorted out well, it will be much cheaper than oil.
Hey you Boks, what is the break-even cost for Sasol? It used to be $29/bbl, not so? Even if it is $60, what’s the (economic) point of drilling?
Jimbo says:
May 24, 2013 at 3:45 am
“Here is a consequence of the global warming scare.”
That is truly sad, Jimbo. But I am reasonably certain that Gore, Hansen, Trenberth, Mann et al. don’t give a $#!+ about who they scare with their disinformation as long as they get their share of the Climate Ca$h (along with the rock-star fame they seek).
OK, shut down every one of the million odd wells in the US,stop all imports, and use nothing but Bakken oil ( just one layer of the Bakken three forks complex) and you will use it up quickly. Big deal. Can you spout any other meaningless statistics?
Do you have any idea how many prospective shales are in the US? The world? Coal liquifaction will be running against a strong current, a gusher actually.
observa says:
May 23, 2013 at 7:42 am
It’s the same in Australia with the millions squandered on solar and wind ‘reshiftable’ power bills and now listen to the gall of the leader of the Greens who along with Labor in coalition have implemented a carbon tax to deliberately raise the price of energy-
http://www.adelaidenow.com.au/federal-election/greens-promise-electricity-prices-to-drop-under-proposed-review/story-fnho52jl-1226649500714
Their answer to the train wreck is to set up another Gummint agency to monitor rising power prices. Unfreakingbelievable!
=====
No its about their usual cr*p standard idea..
cos the Jobs??? the Liar reckons Labor created were ALL greenbums on seats..and they want more so people who ARE the bums on govvy seats and rellies etc will vote for em to keep their paypackets.
while the rest of aus starves n shivers.
Election cant come soon enough!
Louise above may well be right–not because market forces drive energy production and market forces do not like “green” power, but because the financial class will make money and lots of it by investing in the government’s favored technologies, with ample government funding. Good for them, and bad for the rest of us who have to live on the funding we earn, and pay the unnecessarily inflated prices for the government’s favored technologies if we want heat in our homes.
Side note–here in the midwest, a very nearly coldest-on-record spring is ending. It’s been cold and wet, and farmers can hardly get the corn in the ground.
[snip – over the top -mod]
Rocky Road,
You mta want to read this.
http://www.nbcnews.com/id/46342612/ns/technology_and_science-science/t/fraud-claims-over-e-cat-cold-fusion-machine-heating/#.UZ9rs0o0-Sp
Nice article, David.
China is completely focused on economic growth, which means they focus on plentiful, cheap energy.
kim says:
May 24, 2013 at 4:07 am
Heh, I was wondering why Archibald was ignored. That’s unusual. But ignoring China is ignorant, and usual.
**MODS – there is something funny about this thread. All the first responses, e.g. Bob Tisdale: “Congrats to Europe. Welcome back.” – I’ve seen these before, they are responses to a different thread on Europe back-tracking on energy policy – a thread which seems to have disappeared. Have two threads somehow blobbed into one? The responses specifically to David Archibald’s article only come later in the thread.
@ Jakehig, 3:56 am
Conforming to the Orwell adage…”Ignorance is Bliss”….is the near total general population information on Gas-To-Liquid. This process, patented in 2006 by a TAMU professor has proven highly successful and scalable to even the smallest, low production stripper wells. Converting Natural Gas into very clean burning, pure gasoline at way below market rates. Combining G-T-L and C-T-L would be a reasonable policy…but not the current federal directive.
Meet the “New Chu….same as the Old Chu” ! ! !
The Senate gave unanimous, 97-0 approval to MIT professor Ernest Moniz as Secretary of Energy this week. He has stated that “debate on global warming is not even an option”. Yesterday the Poser-in-Chief teleprompter message was….”that the internet was the new terrorism”. Expect unicorns and rainbows to be the only allowable WUWT “debate” topics in the future.
<It seems that one of the reasons that China is investing in coal-to-liquids is that it expects to be subject to a war blockade in a war that it will start itself.
Maybe China plans to grab the Senkaku islands? I hope they dont do it this week or next, I’m in Japan.
The entertaining part is that China imports American coal. Probably not physically the same coal as what they use in the CTL process, but resources are fungible. CTL increases demand for coal. The US serves that demand for a raw resource.
Separately, we participate in the oil market. We don’t participate in converting the low value resource into the high value resource.
Effectively, our CO2 policy is turning us into a mining colony for China where we provide the raw materials and we buy the refined good. We just don’t participate in the profitable conversion process.
richard verney says:
May 23, 2013 at 10:38 pm
“Over the last 8 years, the price for energy paid by the average UK household has risen from about £600 to about £1470 per year, It has more than doubled in the past 8 years…………………….”
People get the government they deserve. We, in the US, have Obama, you in the UK have whatever. Never would have thought this before, but I might be willing to trade with you…..soon.
It seems that one of the reasons that China is investing in coal-to-liquids is that it expects to be subject to a war blockade in a war that it will start itself.
=======
Those that forget the lessons of history are doomed to repeat them. The Japanese attack on Pearl followed the US embargo of Japanese oil exports during the 1930’s. The Chinese likely suspect the same tactics may at some point be used on them.
I think these are the wrong blogs for this.
“vboring says:
May 24, 2013 at 6:52 am”
As well as Aussie coal and LNG sold to them at silly low prices! Seriously, AU$4 per tonne LNG!
“phlogiston says:
May 24, 2013 at 6:50 am”
Eyes on Aus. Buying land and resources at “alarming” rates, but not for our “leaders” apparently.
Shenhua has stated that its first CTL plant, a direct liquefaction facility in the Ordos Basin, has an all-in cost of $60 per barrel and that it is very profitable. Now any company, and any country, in the world that has coal deposits could copy Shenhua’s successful example and start making money from their own CTL projects. That isn’t happening. Why might that be?
I spent a year, a couple of years ago installing equipment for Shenhua near their CTL facility. When I asked one of their top officials about the plant, he indicated it was strictly a pilot project and they were lucky to produce any where near $40/bbl. I think that was their break even goal. The impression he gave me (for what it’s worth) is that they had a long way to go.
The leftists have always “known” fossil fuels are killing the planet. The only proof they ever needed was their own beliefs and feelings. Facts have no place in this debate for them.
So peak oil can be pushed back somewhat?
DA and others, a little fact checking. The cheapest CTL is an ExxonMobol process, not FT (SASOL). The reason no plants have been built is the cost is at least $120/bbl according to the most recent EM public estimates. Some might be post peak oil, since the IMF estimates oil will be around $200/bbl by 2020 due to peaking production. Raises separate issues about peak coal production, specifically in the US, for which I recommend Rutledges presentation available on his website at CalTech.
As for tight oil (fracked source rock) the TRR for the US has just been optimistically reestimated at about 27Bbbl. This must be viewed with some skepticism, since 15Bbbl is the Monterey shale which is very different than the others (portions not yet in the oil window, folded, faulted). And North America has over half of the worlds tight oil resource in place. So that does not spell much relief either.
Chinas command economy might allow uneconomic CTL for strategic reasons. The US won’t. Europe and Australia are learning how foolish costly green energy can be when the rest of the world won’t play.
That said, my books have argued for a wiser transportation fuels policy to avoid the disruptions that otherwise are inevitably coming within a decade, although Willis Eschenbach strongly disagrees (but, unusual for him) without much fact checking.
A seven-month-old baby girl survived three days alone with a bullet in her chest beside the bodies of her parents and toddler brother.
Argentines Francisco Lotero, 56, and Miriam Coletti, 23, shot their children before killing themselves after making an apparent suicide pact over fears about global warming.
Their son Francisco, two, died instantly after being hit in the back.
http://www.dailymail.co.uk/news/article-1254619/Baby-girl-survives-shot-chest-parents-global-warming-suicide-pact.html#ixzz2UDNlnzhC
The above is from a comment on Steve Goddard’s blog. When death occurs because of the fright people like Hansen have put in folks heads that is the worst consequence. Killing your own kids over fear of global warming. God help us all.
David,
The real, important implication of your article seems lost or too much on the majority of commenters here, that China is gearing itself up for an oil blockade because it intends or expects to get into a serious military confrontation with the United States. Of course what you are suggesting is that they are expecting a blockade, not necessarily a war, but it was such a resource restriction that sent Japan on its final course against the US and Britain, and a resource and economic restriction that sent Germany onto the path of WWII. So the distinction might be a fine one.
China is spending all the money it formerly received from the rest of the world, buying, exploiting and receiving the benefit of resources around the world. All these resources are eminently seizable by the host countries, a quality not lost on either China or the hosts. I have felt that China’s view is that the American currency they use to buy into the Canadian oilsands, for example, is pure paper, a meaningless and valueless item except for what it can get into China right now. Remove an iron ore deposit in Africa and bring it home? That is good. If the mine itself gets confiscated later, doesn’t matter: the money was just paper sitting in vaults somewhere – as China did not move it into the public sphere as a capitalist government would have.
The problem with a global conflict with China is that China has always, and I mean for thousands of years, been full up of the problem of maintaining control of its own, large population. The heroic attempts to unify its culture, right down to having the same time zone!, reflect the recognized problem of disparate perceptions of needs, desires and loyalties. Had China the same outlook of a Western culture, it would have been creatinng an empire long ago. Even Viet Nam and Cambodia weren’t overrrun, which in a German-Austria way, would have been easy. Same with North Korea.
So if we grant that China has not the desire, from a pragmatic point, for traditional empire development, but still has the human desire to control (and benefit from) more tomorrow than today, would it not make more sense that China is seeking to fix its economic top-dog position?
Energy costs are the underlying basis for all civilization. Our imaginations of the world as seen in the ’60s were rooted in cheap energy. Nuclear power was going to be so cheap as to not require metering, just a hookup and fee. Not quite, but with “free” power, you can fabricate almost anything, run anything. We’d all still drive Detroit iron with 455 hp engines if they were cheap to own and operate.
What I see with what you write is that China is pursuing a course of energy self-sufficiency at a long-term, low and stable energy cost. The rest of the world, focused on quarterly returns now more than ever, hopes to get through through smarts, agilility and a profound naivivite about luck and technology (the largest being that high tech makes expensive things cheap, as if my life today costs less than yesterday, which is why I work less than yesterday, right?). The future of Western civilization is one of higher and higher energy costs due to depletion of easy oil, gas and coal, the failure of nuclear fission to solve problems of deterioration and waste disposal, the failure of nuclear fusion period, and an eco-green focus on very expensive green energy AND a cost-based reduction in fossil fuels.
If China, which has a huge brown coal inventroy, low perm and gassy (which is why so many explosions and deaths occur in China every year, outside of poor safety practices) though they are compared to American and Canadian coal, and can invent high quality CTL processes which it prevents from exporting (as America did with computer technology), it can maintain a manufacturing base even as its lifestyle costs increase. Western countries will continue to export jobs to China if on a consumer level the costs are lower. It would take a trade war driven by import duties, to stop that, the result of which would be more a misery for the West than China as energy, not labour, would be the stumbling block.
Chinese focus on cheap energy will offset its rising labour costs. In the West, rising energy costs can only be nullified by reducing labour costs if the West is to stay competitive. But lower wages mean less consumption. As Chinese living standards – admittedly lower than those of the West – rise, under an energy cost scenario, Western living standards will have to drop.
Government-led CTL in China shows that China is pragmatic, while America and the West is ideological. China is creating a future it can depend on, while America is depending on a future it hopes to create. For those of us whose invest, it is like pitting companies that make toothpaste and toilet paper against any of the wonders of the last hightech bubble: all toothpaste investors are still here, but there are very few (though rich) bubble buyers.
Doug Proctor
Costa Rica is hardly even a punctuation mark in the Chinese essay, but does offer an insight. President Laura Chinchilla hopes her Asian guest will agree to further investments, on his visit next month. We need a dependable highway for Recope [State ‘refining’ monopoly – which currently only distributes imported fuels: its out-of-service refinery will re-start after an 80% Chinese-financed retrofit] to portion out combustibles.
Tico soccer fans will celebrate China’s construction of its National Stadium gift – ~USD$90 million – as they drive Chinese vehicles, powered by Chinese-refined fuel, over a Chinese-built highway, if Madame President seals the deal. Can anyone say, “force projection?” Decades of industrialized-West donations guaranteed a quiet neighborhood for the crucial Panama Canal. Debased US dollars now contribute to this secure Pacific-Atlantic trade route.
Who doesn’t benefit?
JT,
Costa Rica is a GOOD example, actually: it demonstrates a principle that we in the West don’t follow – all profit, no matter how small, is Good.
We must recall that even Germany did not intend to physically occupy Russia after it won the war. Germany intended to demilitarize Russia, create a consumer of German goods and receive “tribute”, mostly as resources. When you consider that China has not bothered to take Taiwan, even in the very beginning, you see that physical occupation in mature cultures is recognized as not always desireable, let alone do-able.
An economically dependent nation is useful – outside of the Roman, British or American model, wherein the dependent nation is disrespected and abused. Canada is in such a relationship with the United States, a benign relationship that lacks a certain amount of respect but is certainly not abusive. If China can cultivate relationships such as the US-Canadian one, they will be able to rise to the top of the pile without fear of rebellion or other trouble. It is questionable whether they can do this, but is true that they have a lot of experience with strategies and tactics of various kinds. And, as I described earlier, they are pragmatic.
Pragmatism is what the world needs. Not expediency, but pragmatism: what really works in the long-term at the least cost and greatest benefit, while not fertiilizing the seeds of its own destruction. If creating a one-world culture really isn’t workable – which history says it isn’t – then you have to find some way to live well with the variety. America tries to impose a Western way of life whereever it goes, and this strategy fails repeatedly – because it goes against cultural natures. If China can work the work so that we look to it WITHOUT RESENTMENT for our material welll-being, then we will support them with admiration rather than envy or jealousy.
But this post is about cheap energy being developed in China. Coal, CTL. Scrubbers will eliminate the air pollution (other than CO2 release) for them as it did for the West in the 70s. Electricity at stable, low price. What a good idea that the market doesn’t seem to value, for the same reason, I suspect, that Detroit continued to put out large cars when Japan outsold them with the small: of a capital efficiency basis, it is “better” to spend $1 and rake in $2 this year, than spend $5 and rake in $7.50 this year, even though at the end of the year you’ll have 50% more money in your pocket with the second scenario than with the first. We in the West see perception as more important than practice, as any eco-green who opposes the XL pipeline will acknowledge (a “line in the sand”, not a point of global significance).
Perhaps the Chinese face is the true face of the Jetsons: with enough cheap power, even a car can be made to fly.
Back during the ’70s Arab Oil Embargo, VW did a paper study on turning their coal in Germany into methanol for motor fuel using nuclear process heat. Made Gallon Of Gasoline Equivalent fuel at something like 70 ¢ or so (with 1/2 $ as a possible target). Yes, 50 to 70 ¢ / gallon gasoline equivalent.
At the same time, Mobil Oil invented a process using a zeolite catalyst to turn methane into gasoline and built a plant in New Zealand. The same approach can be used with the coal / methanol process to make the end product actual gasoline.
Nothing prevents turning gasoline and coal into methanol, ethanol, butanol (drop in replacement for gasoline in existing cars, though smell isn’t pleasant) or even plain old gasoline.
My best guess of “present dollars” is that it would run about $2.80 to $3.xx / GGE or actual gallons (US) of gasoline; but I’ve not done the inflation calculation (again…) in a couple of years. It’s always been very close to the present price of gasoline (usually a bit below, right now, about $1 / gallon below in California…)
China is just aware of this, and doing something about it. (We are aware of it and being stupid).
Oh, and worth noting is that Friends Of Obama make money on the deal. Warren Buffett bought Burlington Northern rail road a few years back for Birkshire Hathaway. ( I hold BRKA stock, FYI, so I benefit too, in a small way). He had sold the stake in China Petroleum company(s?) and moved into the largest shipper of coal from mine to port to China… So it’s important to make sure that coal doesn’t stay in the USA and get used in the USA… Need to sell it to China and ship it out so “friends of the administration” can make money on their investments…
Were I in charge, I’d have a high temperature Molten Salt Reactor built next to a coal mine and putting finished gasoline and Diesel and kerosene into pipelines at prices such that we would tell OPEC to go pound sand… instead, we stay on the hook to OPEC oil and sell our coal to China while shipping jobs there. This is not an accident.
wacko
” It seems that one of the reasons that China is investing in coal-to-liquids is that it expects to be subject to a war blockade in a war that it will start itself. “
It seems that one of the reasons that China is investing in coal-to-liquids is that it expects to be subject to a war blockade in a war that it will start itself. On the other side of the Pacific, the United States, which will do the heavy lifting in any such war started by China, is handicapped by denying itself a potential supply of liquid transport fuels and the optimum allocation of its resource endowment.
David,
A valid synopsis!
Consider also that US interest payments on our national debt, much of it owned by China through their purchase of US Treasury bonds, bills, and notes, will be sufficient to fund China’s aggressive expansion of their naval and air forces.
We are paying them to get another arms race going, a race that we will be severely disadvantaged in because of our bankrupt Treasury and imbecilic energy policies.
MtK
War with China ? to what end ?? The only player that would gain out of such an event would be the USA, in potentially wiping out out most of their foreign owned debt. But then of course nobody would lend to them ever again 🙁
Some of you blokes need to keep taking the tablets 🙂
David Archibald.
Thanks. Thought provoking.
Here are more details for the commercial side of China’s coal to fuel.
Yang and Jackson (2012 Fig 2) report that China’s gasoline consumption in 2010 was about 72 million tons and its methanol production capacity was about 38 million tons. Furthermore “at full capacity the coal-based methanol industry would be still able to substitute more than half of China’s gasoline supply by 2015.”
“Roughly 1.4 t of methanol can replace one ton of gasoline (Li, 2008). Because methanol is usually priced at one third to one quarter the price of gasoline (Table 1), blending methanol in gasoline in China is currently profitable, even if illegal in some places.”
“In light of recent developments in China, US policy researchers may re-examine the US experience and consider how China’s growing methanol economy could affect coal and other raw material prices and whether methanol fuels might make a comeback in the United States.”
China’s growing methanol economy and its implications for energy and the environment, Chi-Jen Yang , RobertB.Jackson Energy Policy 41 (2012) 878–884
See also the followup:
China’s coal price disturbances: Observations, explanations, and implications for global energy economies, Chi-Jen Yang, Xiaowei Xuan, Robert B. Jackson, Energy Policy 51(2012) 720-727
Yang et al., provide a detailed estimate of the costs of coal based methanol in China, which appears to be competitive with gasoline.
Geez, this below seems a bit over the top when you consider that in recent times the US have not required any other party or assistance of any sort to start a war.
” It seems that one of the reasons that China is investing in coal-to-liquids is that it expects to be subject to a war blockade in a war that it will start itself. “
Steven Mosher says:
May 24, 2013 at 2:45 pm
For your consideration: http://www.iias.nl/sites/default/files/IIAS_NL59_3233.pdf
China has 1,500 museums of national humiliation. Why would that be?
Oh look! Someone has started a Boycott China website: http://www.boycott-china.net
A US China war is in neither’s best interest. Where would the US get all of our cheap products so much in demand here and where would China get millions of dumb customers with lots of money to buy all their cheap crap? China is an excellent example of how well facism can work. Communism has morphed into facism just as in the US free enterprise has morphed into crony capitalism on its way to facism. Seems that trade can keep the peace up to a point, until someone runs out of resources the other one needs and decides they are strong enough, or the other is weak enough, that they can just take what they need. That is the real danger. Peace through strength is the key. Giving away our nuclear weapons through stupid treaties is the biggest danger to the US right now. Obama is the personal incarnation of that danger.
Whats the problem? Its what all western leftists want.. Then they can see about saving the world when their entire family is sent off to a reeducation (slave labor) camp for a few generations..
Im not even sure I would fight for them.. In fact I would not.. So after all our professional solders are killed in battle they would have to turn to people like me and my son to defend these vile despicable progressives.. Both of our lives are far to valuable to throw away on BS liberal democracy..
Let the women and non white North Americans and Europeans fight for their government.
Let them bleed out their favorite sons and daughters..
The only time I/we get put to the front of the line is when its time to die? I think not.
David L. Hagen says:
May 24, 2013 at 7:29 pm
Interesting papers, with thanks. I hadn’t realised that half of Chinese coal consumption goes to the non-power sector. Methanol is not a good fuel though – very hygroscopic and low energy density. Might as well go straight to diesel from the synthesis gas.
A poem from China: (author unknown)
What do you want from us?
When we were the Sick Man of Asia,
We were called the Yellow Peril.
When we are billed to be the next superpower,
We are called The Threat.
When we closed our doors,
You smuggled drugs to open markets.
When we embrace free trade,
You blame us for taking away your jobs.
When we were falling apart,
You marched in your troops and wanted your fair share.
When we tried to put the broken pieces back together again,
Free Tibet you screamed. It was an Invasion!
When we tried Communism,
You hated us for being Communist.
When we embrace Capitalism,
You hate us for being Capitalist.
When we had a billion people,
You said we were destroying the planet.
When we tried limiting our numbers,
You said we abused human rights.
When we were poor, you thought we were dogs.
When we loan you cash, you blame us for your national debts.
When we build our industries,
You call us Polluters.
When we sell you goods,
You blame us for global warming.
When we buy oil,
You call it exploitation and genocide.
…
What do you really want from us?
Think hard first, then answer …
Because you only get so many chances.
Enough is Enough, Enough Hypocrisy for This One World.
We want One World, One Dream, and Peace on Earth.
This Big Blue Earth is Big Enough for all of Us.
http://articles.washingtonpost.com/2008-05-18/opinions/36805476_1_human-rights-free-speech-free-trade
Looks to me to simply be a matter of good management.
If you have a fast growing economy with a huge population growing rapidly wealthier, you know future energy demands will be large. If you happen to have limited oil and some amount of coal reserves (including all that you buy and stockpile from overseas), then developing this technology seems eminently practical.
Simply a case of a country putting practicality ahead of ridiculous green ideology. A good investment.
Jim G says:
May 25, 2013 at 6:43 am
…..Giving away our nuclear weapons through stupid treaties is the biggest danger to the US right now. Obama is the personal incarnation of that danger.
>>>>>>>>>>>>>>>>>>>>>>>>
Clinton already beat him to it link and what military secrets Clinton did not hand to the Chinese they are stealing Pentagon directly accuses China of hacking to steal U.S. defense intelligence.
Gail Combs says:
May 26, 2013 at 10:14 am
Jim G says:
May 25, 2013 at 6:43 am
…..”Giving away our nuclear weapons through stupid treaties is the biggest danger to the US right now. Obama is the personal incarnation of that danger.
>>>>>>>>>>>>>>>>>>>>>>>>
Clinton already beat him to it link and what military secrets Clinton did not hand to the Chinese they are stealing Pentagon directly accuses China of hacking to steal U.S. defense intelligence.”
I believe Obama promised Medvedev even more, on the mic, unknown to him, to come after the recent election. It can always get worse, you know.
Following the successful end of the second world war, a group of people spent their lives hunting down the most foul members of the ideology that instigated the war and atrocities.
Now maybe I am just a bitter and twisted person but the worst consequences of the global warming scam, have fallen on the poor.
I would not see a problem with hunting down and exposing every opportunist and politician who has promoted this nonsense for so long.Civil damages suits before afflicted jurors would be fair payback for their past and present actions.
Justice demands, that these artists be given, what they demanded for all others and caused for the worlds poor.
So poverty, no carbon energy based anything, no affordable and reliable electricity for promoters of CAGW should be the best consequences of the scare.
Reclamation of misappropriated public treasure is in order as well.
For some reason I keep thinking we are reliving pre-revolution France, but on a global scale.
A timely piece of analysts. Thank you.
We’ve had exponential abrasiveness here inThe Land Downder for more than 40 years of building inefficient wind farm arrays that have been judged politically incorrect by whicever side of conformist fashion rules at the time.
Some of these hugely expensive wind farms, inclding one on the edge of the Centralan deserts. and another here near my home in Canberra, have been opposed disparately by both the ecomaniacs and the aggressive mining unions.
We have a plethora of consultancies ever poised to profit by regurgitating political sophistry, but few seem to present with enough cred to mould political will.
Australia has stubbornly ignored opportunity for contemporary new generation fixed coastal and light portable thorium based nucear energy reactors. An inexact portion. of ‘climate change’ theory is partly responsible. Electoral ballot box fears are another.
But the mention here in this essay of potental Red China ambition actoss the Pacifc is more chilling, as we enter debate on framing our Defence options: Armed neutrality; or outsourcing security; or beefing up homeland defence spending and sorting out alliances.
– Theo. Bennett