New Energy Bill Is A Disaster
Press Release from The Global Warming Policy Foundation
London, 23 May: With the publication of its draft Energy Bill, the government has announced its intention to reverse the course of energy deregulation.
The Global Warming Policy Foundation warns that any attempt to turn back the clock to the dark period of centralised energy planning will not only damage Britain’s economy, but will almost certainly end in failure, just like other attempts to impose a centralised system of energy controls have failed in the past.
Nigel Lawson, the GWPF’s Chairman, who as Energy Secretary was the architect of Britain’s energy market deregulation in the 1980s, warned:
“The Energy Bill constitutes a disastrous move towards a centrally planed energy economy with a high level of control over which forms of energy generation will be favoured and which will be stifled. The government even seeks to regulate the prices and profits of energy generation.”
The government bases the case for green – and more expensive – energy in large part on the assumption that gas prices will significantly rise in the future. This argument is no longer credible in the light of the growing international abundance of shale gas, not to mention the likely shale gas potential in Britain itself.
North American gas prices have dropped from $15 per million British thermal units to below $2 in just 7 years. This price collapse is an indication of things to come in Europe, once its own vast shale deposits are allowed to be extracted.
“At a time when most major economies are gradually returning to cheap and abundant fossil fuels, mainly in form of coal and natural gas, Britain alone seems prepared to sacrifice its economic competitiveness and recovery by opting for the most expensive forms of energy,” said Dr Benny Peiser, the GWPF’s director.
In any case, the complex and inconsistent measures of the draft Energy Bill are unlikely to provide investors with the certainty they require to make substantial investments.
The proposed contracts for difference (CfDs) are extremely complex and convoluted. Neither the profit guarantees offered for different technologies nor the duration of CfDs is known. The government has not provided any numbers and price guarantees for its favoured green technologies. Investors are therefore thrown into limbo since they cannot calculate whether expensive renewables or nuclear reactors are viable and can compete with less expensive conventional power plants.
This lack of clarity will inevitably lead to constant government amendments and continual intervention, which will act as additional barriers to new entrants in the UK electricity market.
In light of government indecision and investors’ uncertainty, the Energy Bill proposes to give the Secretary of State the exclusive authority to offer green energy companies ‘letters of comfort,’ promising them that they will be guaranteed profits once the specifics of CfDs are finalised and introduced. This is both arbitrary and unconstitutional.
Moreover, it is doubtful that what is proposed is actually workable, let alone economically viable. After all, similar interventions in the past have proved inept and uneconomic. They will almost certainly prove to be highly unpopular when the costs of these measures are reflected in energy bills.
richardscourtney says:
May 24, 2012 at 2:36 pm
Socialism equates to
From each according to ability, and to each according to need.
Excellent news. I need cocaine and dancing girls. When will you, as a self confessed”socialist”, provide me with them?
Richardscourtney is looking at the UK energy market pre privatization with rose coloured specs. The old nationalized companies were unable due to government dictat, to renew any power stations or infrastructure and this fell onto the new privatized companies to pay for. This led to a price rise but prices leveled out and then became probably the cheapest in Europe. Then came ‘green’ energy and the rest is history.
Richard Courtney,
thank you for replying to my post. Your observation on the similarities between our viewpoints is probably true – I would be a socialist if I thought it worked and would provide for better prosperity. Unfortunately, my experience tells me the opposite is the case.
For example, in your response to curious george, your quotation of “each according to his needs, from each according to his ability” tells us nothing about how either of these goals is to be acheived. That is the problem with socialism as far as I see it – nobody has successfully taken these goals and engineered them into a working system. Though, on a brighter note, I do recall an episode of “Star Trek – next generation” involving a Gordon Gekko type business man who was frozen and reawoken in the 24th century. Captain Picard carefully informed him that all want, and needs have been abolished and painted a very utopian socialist picture.
But then I’m thinking – how dull would that be?
Mr Green Genes:
re. your post addressed to me at May 25, 2012 at 1:21 am.
This is a serious discussion. When you were 3 years old your mother should have instructed you on the difference between desire and need. Please return to the discussion when you learn the difference.
Richard
John Marshall:
At May 25, 2012 at 3:33 am you say;
That is absolutely untrue.
There were no “nationalized companies”: there was only the monolithic Central Electricity Generating Board (CEGB).
The CEGB built the existing UK power stations and immediately prior to privatisation the CEGB built CCGT power stations in the ‘dash for gas’ – using your words – due to government dictat.
After privatisation no new power stations have been built and government subsidies have created the pointless building of windfarms.
Electricity prices in each EU country are conveniently tabulated at
http://billothewisp.blogspot.co.uk/2011/06/european-electricity-prices-compared.html
Part of its summary of the tabulated data it presents says;
* Highest prices are in Denmark closely followed by Germany. France is the lowest in Western Europe and Bulgaria is the lowest overall.
* The Danish pay well over twice the price for their electricity compared to the French.
* The Germans pay 190% more for electricity than the French, i.e. nearly double.
* The Italians pay 49% more for their electricity than the French
* The Spanish pay 43% more for their electricity than the French. Half as much again.
* The British pay 12% more than the French.
Richard
youngleftie says:
“Well in a perfect world, this ‘cheap fuel’”
Wind and solar are not cheap. When the government, which essentially controls the power companies through their regulatory boards (Golden Rule #3 – “Never piss off the person holding you by the throat”), says buy, you don’t complain to the courts, you just say “YES, SIR”
“would be paid for by the rich in society, why should they have more than plenty, far too often tax free, whilst OAPs and the poor live in fuel poverty.”
The rich (and their business) can afford to move to avoid taxes. And that may not be far if Scotland plays it smart. There goes your tax base and job base. So now you have high unemployment and have to increase the taxes on the middle class and poor to replace the lost revenue and pay for increased welfare subsidies. This in turn causes the economy to spiral ever lower.
“If not, perhaps a tax on the banks who dished out ridiculous amounts of bad debts and brought the world economy crashing down? Either would be fine.”
Fine. Need a loan, forget it. Need a business load, forget it. No funds available, the government took it all, go ask them for the money. Except the government doesn’t have any left because of growing welfare payments because young cannot find jobs because of the lack of business growth because they can’t get loans and the housing has tanked because no one can get a loan to buy a home.
Vince Causey:
I appreciate your post addressed to me at May 25, 2012 at 7:54 am.
I think we have each said sufficient to demonstrate for others to understand our views and the differences between them. So, I am writing this to show that I genuinely do appreciate your post and to provide a clarification.
Your post says to me
There is no overall “system”. There is only recognition that individuals have different needs and abilities. Hence, socialism decrees that – in so far as is possible – each individual is entitled to what he or she needs to flourish in society and is expected to contribute what he or she can for society to flourish.
The origins of this are the struggle of the ‘Tolpuddle Martyrs’ who were a group of Methodist lay workers who – under the battle cry, “Christ said the labourer is worthy of his hire” – objected to reductions in the pay of farm workers. They were deported to Australia as punishment and their struggle is the origin of British socialism and trade unionism. Much later Karl Marx attempted summarise their ideal in the phrases, “To each according to need, from each according to ability”. The Martyrs are honoured each year by celebrations in the Dorset village of Tolpuddle, and this rally is attended by socialists from around the world. The Martyrs’ Methodist Chapel is now a museum of them and their struggle.
Please note that this ideal does not decree any specific system but asserts that people should be treated on their merits.
To avoid proliferation of examples, I will stick with the one I presented to Curiousgeorge. The socialist ideal says that – in so far as is possible – every individual should be provided with the education that would benefit him or her. Thus, if he or she wants to obtain a university education in e.g. medicine then – if capable of obtaining the academic entry qualifications – society should provide the education (i.e. to each according to need). Society would then expect the resulting qualified physician to perform to expected medical standards (i.e. from each according to ability).
Extending that illustration, the medical student may have ailing dependents (e.g. parents) whose care would prevent him or her from studying. In that case, care for those dependents would be a need which – in so far as is possible – should be provided to enable the student’s studies.
Please note that there is no stipulated system to obtain these objectives. There is an infinite number of possibilities for needs of individuals in my illustration and many ways of meeting those needs, but there is no ‘system’ which decrees how they should be met.
And this is why democracy is so very, very important to socialists. Elections give society as a whole the ability to decide who can get what, and how they can get it, within the available social, fiscal and economic constraints.
It is also why socialists like a ‘mixed economy’. Socialists rarely see one solution as the right solution for every situation. So, they don’t have a stipulated system that applies to everything all the time.
Importantly, socialism inhibits the kind of political disaster that has happened in Greece. There the politicians promised whatever they could think of to offer as a method to ‘buy’ votes. And the populace fell for it with the inevitable resulting economic bankruptcy. This cannot happen when sufficient of the electorate understands there needs to be a balance between what society can provide to people and what people provide to society. People who recognise this will vote against politicians of the “Greek kind’ because they know those politicians are offering the ‘fool’s gold’ of a small immediate benefit followed by immense cost.
I hope that helps understanding.
Richard
Richard,
In a free market economy the workers and the owners/managers reach an voluntary agreement on what “worthy of his hire” will amount to. In a free market workers freely contract – no one is bound in a master/servant relationship – they freely agree to work for a certain wage – and they remain free to quit and sell their labor to someone else for a better return. All the parties are “free” there is no coercion.
Socialism has to interject an arbitrator (government), a third party to determine what the “worthy of his hire” ought to total. Socialism used to be a big advocate of public ownership because it made the task of arbitrating so straightforward. Unfortunately public ownership doesn’t have a very good record as an efficient business model. So Socialism will settle for government indirectly arbitrating what is “fair.”
Here’s the rub: We are less free and less competitive with a third party imposing conditions and rules and costs on our enterprises. Every enterprise has to compete for customers. Enterprises have to compete for the privilege of serving. Your catchphrase… “each according to his needs, from each according to his ability” …it’s not a catchphrase about customers. Free markets force both the workers and owners to place serving the customer in front of their respective immediate interests. Socialism pretends customers are not free, that they simply exist and participate in stasis.
Unions are a great example of how socialism inevitably depends on coercion. Unions wither away where workers are free not to join. Unions constantly seek the state to compel owners and workers to negotiate solely with the union in all matters dealing with employees. The idea of workers free to negotiate on their own, independent of the union is anathema to Unions. Unions ought to be totally free and voluntary associations – but they NEVER end up that way. Socialism always ends up being, not “power to the people” but, “power to the aribtrator
I want to be free – socialism will rob me of my freedom – socialism is the enemy of my freedom. I most of all want to be responsible for myself. I don’t want the government to protect me, to arbitrate for me. I want to be free. I will decide whether or not I’m worthy of my hire.
William Abbott:
Thankyou for your post addressed to me at May 25, 2012 at 1:47 pm.
I think I have clarified my views in my discussion with Vince Causey. Also, there is clear danger that this thread will be completely diverted from its subject if I continue debate of British socialism.
However, I am replying to you with this brief note for two reasons.
Firstly, and most importantly, I appreciate your trouble in sharing your disagreement with my views, and my failure to make any response could imply that I am not grateful for your interest.
Secondly, many who post on WUWT are right-wing Americans with completely delusional misunderstandings of socialism. There is no reason why people of all political views cannot unite in opposition to the pseudoscience of the AGW-scare and in support of real science. However, misunderstandings of differences can hinder that unity; e.g. “communist” is probably the worst possible insult that can be thrown at a socialist, but I have lost count of the number of times socialism and communism have been equated in posts on WUWT.
So, my brief response to your post is to say that I think my fundamental disagreement with your arguments is clear from what I have already written. Indeed, I think your world view is plain wrong; e.g. you say;
Perhaps you are not aware that I have held every elected office up to and including the National Vice President of a TUC-affiliated trade union. Clearly, knowing that, you would not expect me to ignore your false statement about trade unions.
In reality, employers treat their employees well otherwise they face potential union action, and employees seek union protection when they are not treated well.
Industrialists have learned the hard way that union action is more costly than treating their employees well. For example, Henry Ford employed Al Capone to use terrorism as a method to break a strike: no sensible employer would now do that because it is not cost effective.
The crux of our difference is when you assert;
No! On the contrary. Socialism liberates people to fulfil their potential. I am British: I live in the land of the free. I suspect you are American: if so, then you live in the land of people who like to think they are free.
I hope my two above responses demonstrate that you and I do have different world views.
And I hope this brief response to your post shows that I respect our differences and that I have not ignored your post.
In my opinion, the value of this discussion is that it shows it is possible to disagree without being disagreeable, and – if we choose – we who oppose the AGW-scare can maximise our unity so we can utilise the variety of views we encompass (e.g. to understand all those who promote the scare).
Richard
Richard; Courtney and courtesy are a close match. You are indeed courteous. WUWT is full of interesting, thoughtful people. You are right we are a bit off-topic and we oviouslyhave much to argue about. Perhaps when I come to England I can stop by & we will go at it over tea. The UK’s government is making an expensive mess of electric power, but surely somehow – you’ll get the water hot.
Cheers, William
Well, at least they can serve as a bad example…
May it come quickly enough that the USA learns and does not follow.
“If you sight Enron and California as examples of free market gone bad, I’ll think you are truly unobservant.”
What a relief I haven’t. I know the difference between deregulation and simply being regulated in a different, more idiotic manner.
richardscourtney says:
May 25, 2012 at 10:42 am
Mr Green Genes:
re. your post addressed to me at May 25, 2012 at 1:21 am.
This is a serious discussion. When you were 3 years old your mother should have instructed you on the difference between desire and need. Please return to the discussion when you learn the difference.
Richard
Oh dear. Cut and paste /sarc to the end of my post. Then you might get it!
Or then again, maybe not.
William Abbott:
At May 25, 2012 at 5:53 pm you say to me;
I would welcome that: it could be fun for both of us. Let me offer to provide a Cornish cream tea.
And I fear that the proposed UK energy policy makes it likely that we won’t “get the water hot” but will be sharing our tea in the dark.
Mr Green Genes:
Your post at May 26, 2012 at 1:00 am tells me you will never “get it”. That is sad.
Richard
Doug Badgero:
At May 25, 2012 at 6:21 pm you say;
I strongly agree. And this thread shows that many fail to understand the difference which you so clearly state because they are blinded by their ideology.
I remind that my post at May 24, 2012 at 8:38 am concluded saying;
A sensible debate would discuss preferences for either option. Instead, ideologues – on both ‘sides’ – ignore the fact that either option is practical, and they assert their desires for a political instead of a pragmatic decision.
The proposed UK energy policy adopts – indeed, increases – the mistaken adoption of a compromise between the options.
Richard
Here in the UK the government now says there is very little shale gas and they know this because they have had a presentation from Shell and Centrica. They say there are only reserves to supply 5% of our needs. Can someone write back to tell me what the truth is as I don’t believe this stuff. My guess is that Shell and Centrica can see little profit for themselves from shale gas. I thought the UK was thought to have enough for 200 years.
ANH:
The answer to each of your questions is, Yes.
The apparent dichotomy derives from the difference between ‘reserves’ and ‘resources’.
A reserve is the amount of a mineral that can now be obtained at economic cost using existing technology. And – as you quote – concerning UK shale gas “there are only reserves to supply 5% of our needs.”
A resource is the total amount of a mineral that can be obtained using foreseeable technology. And the UK has a shale gas resource equivalent to more than 200 years of usage at present UK usage rate.
Consider this simplified illustration.
Three people each own a field.
Person A has a diamond on the surface of his field.
Person B has 10 diamonds 10 feet below the surface of his field.
Person C has 100 diamonds 100 feet below the surface of his field.
The resource of diamonds is (1+10+100) = 111 diamonds.
But the reserve of diamonds is 1. This is because Person A can recover his diamond from his field at less cost than Persons B and C can recover any of their diamonds. Therefore, Persons B and C cannot compete against Person A in the sellers’ market: Person A can offer to sell at lowest price.
Person A recovers his diamond and sells it.
The resource of diamonds reduces to (10+100) = 110 diamonds.
And the reserve of diamonds increases to 10 because person B can now provide competitively priced diamonds. But the price has risen (in the jargon, ‘low hanging fruit are picked first). And Person C still cannot sell his diamonds because the cost of his diamonds is too high.
Then Person B recovers his 10 diamonds and sells them.
The resource of diamonds reduces to 100 diamonds.
And the reserve of diamonds increases to 100 because person C can now provide diamonds at most competitive price. But the price has risen again.
So, as the resource depletes the reserve increases but the recovery cost and the price both increase. This can mean that an alternative to the resource (e.g. synthetic diamonds) may become cost and price competitive with the resource.
Therefore, it is possible that the diamonds of Persons B and C may never become reserves because their sales price may not be able to compete with the price of an alternative to diamonds.
And additional economic complexities are …
I hope this brief answer is sufficient response to your question.
Richard
Richard Courtney,
Thank you for taking the time to reply to my comments. I always appreciate your comments, and seek them out first when scanning the responses on WUWT. Like you mentioned earlier, the thread is not about socialism per se, and I won’t add anything more that takes it off topic, other than to say that I agree entirely about your ideals, though I put myself in the free market camp and cannot yet call myself a socialist.
However, I would enjoy a full thread devoted to the subject, as it is a matter of some interest to me.
VC
Vince Causey:
Thankyou for your kind and overly generous comment addressed to me at May 27, 2012 at 6:24 am.
Only Anthony can decide what can be or should be the subject of a thread on his blog. Considering the blog rules, I think the thread you want would be difficult for WUWT.
About a decade ago a US right-wing free-marketeer anti-socialist blog hosted a debate about socialism between David Wojick and myself. David is an anti-socialist free-market libertarian, and he is a Marxist. I am a socialist, and I am an anti-Marxist. The first few essays from each of us seemed to cause total confusion for several regulars on that blog. And the debate lasted months because of the interest it generated. Indeed, it would have continued but I insisted that David should have the ‘last word’ because the blog was anti-socialist. Of course, the debate probably failed to change any minds, but it clearly informed many. And if people want to oppose something then I think they are entitled to know what they are opposing.
Richard
Richard,
I cannot see any difference between Socialism and Communism [Marxism]. Communists are just Socialists in a hurry.
The antithesis of Socialism/Communism is not the right wing, it is freedom from tyranny; freedom from those who would steal the labor of honest citizens under the guise of do-gooderism. In fact, the do-gooders are conniving bastards whose ultimate goal is to control the lives, and to thieve the property of the working class.
Economist Frederic Bastiat [formulator of the Broken Window fallacy] explains how Socialists and Marxists loot the citizenry for their own self-interest:
Bastiat died in 1850. There is nothing new under the sun.
Sorry, I should have said Deficit rather than National Debt in my earlier comment regarding the ability of the richest 1000 people to pay this off by their increase in wealth. I also mis-remembered that this was from the increase in their wealth over the last 3 years, not 10 but I now have traced the source – that well know commie/leftists publication the Sunday Times Rich List.
“the 1,000 richest persons in the UK have increased their wealth by so much in the last 3 years – £155bn – that they themselves alone could pay off the entire UK budget deficit and still leave themselves with £30bn to spare which should be enough to keep the wolf from the door.”
http://www.michaelmeacher.info/weblog/2012/04/britains-1000-richest-persons-made-gains-of-155bn-in-last-3-years/
smokey:
You know that I do not ignore your comments. However, on this occasion you ‘have come to the party late’. And the diversion on socialism has been exhausted within the context of this thread.
You are plain wrong because socialism and communism are exact opposites. Please read the thread to understand.
And please read my reply at May 27, 2012 at 9:31 am to Vince Causey to understand why I am refusing to answer your post in a proper manner. I am willing to do it, but not here. Sorry.
Richard
“Communists are just Socialists in a hurry.”
nice quote.
they simply want to dispense with the negotiating phase and keep the guns drawn instead of hidden in a briefcase.
now they have armed the drones. they prepare war against us.
mr courtenay:
smokey is correct. institutions that exist to negate rights are identical in principle and differ only in ‘style’ or degree.
as this entire thermageddon issue merely used mimicry of science as a catspaw to further deprive human beings of their liberty and property, discussion of rights and their defense and protection is, in fact, the only important issue i can see.
leave the job of distracting from the central issue to myles and others who imagine they are in charge of overseeing the narrative. you don’t get to define the issue for anybody but yourself.
gnomish:
Clearly our posts crossed.
Equating me (who has been opposing the AGW-scare since the early 1980s) with Myles Allen (an AGW-promoter) is as daft as equating socialism with communism.
Hold whatever delusions you want, but do not expect me to reply to your ignorance and insults with anything except disdain.
Richard