Guest essay by Eric Worrall
What do you do, if governments are threatening to impose damaging new taxes on your business, in the name of combatting “climate change”? The answer is surprisingly simple. It is a clever solution which creates a devastating setback, for politicians who were hoping to raise serious revenue from carbon taxes.
Back in 2014, E.ON split into two businesses – a politically favoured “renewable” business, and a bucket which contained their old school fossil fuel business assets.
According to the Wall Street Journal (in 2014);
E.ON, Germany’s largest utility company by market value, said it wants to shrink its core to focus on renewable energy, its distribution network and providing customer solutions.
The split will provide a clear distinction between business portfolios that vary in risk, with each company appealing to different investor groups, E.ON said.
Utilities in Europe have been hit hard by a surge in renewable energy generation, which Germany and European Union governments have heavily subsidized in the hope of curbing carbon-dioxide emissions. But the resulting oversupply of electricity has depressed wholesale prices, rendering power generation from conventional plants unprofitable.
E.ON said the renewables-focused EON SE would have low volatility and could tap growth potential from the transformation of the energy market.
Read more: http://www.wsj.com/articles/e-on-se-to-split-into-two-companies-1417388121
Why does this strategy benefit investors? The reason is it catches green politicians in an economic pincer. Politicians know that their economies can’t do without the old fossil fuel generators, and other carbon intensive assets. By isolating carbon intensive businesses in a separate corporate entity, business strategists turn carbon politics into a macroeconomic game of chicken. Raise carbon taxes, and nobody in the corporate world will come to the aid of stricken carbon intensive businesses. They will be allowed to simply collapse. No carbon taxes will be raised, and politicians will be left with the consequences – job losses and economic damage.
It gets better. European politicians are too committed to green subsidies and carbon pricing to openly reverse their carbon pricing and green subsidy policies. But they also can’t afford to let energy intensive businesses which are important to their national economies collapse. European politicians are now being forced to pay subsidies, not only for renewables, but also for unfashionable, energy intensive businesses, to keep them from closing.
The Department of Energy and Climate Change (Decc) has declined to comment ahead of a formal announcement today, but has previously argued these subsidies would ensure security of supply by providing a payment for reliable sources of capacity to ensure they delivered energy when needed.
“This will encourage the investment we need to replace older power stations and provide backup for more intermittent and inflexible low-carbon generation sources,” it has said.
But analysts believe it highly unlikely that any companies would have submitted bids to construct new super-efficient gas-fired plants at the price of £15-£20.
“This low price is better for consumers but it looks like it is being used just to keep existing coal, nuclear and gas-fired plants running. You have to wonder whether these plants would have remained open anyway and really need these capacity payments,” said one analyst. Energy companies say privately that they need the payments to modernise and refurbish plants that would otherwise close.
The subsidy game appears to be spreading and accelerating beyond energy generation. Resource giant BHP has also demerged carbon intensive assets into a separate business.
BHP Billiton has also modelled the impact on its balance sheet of a range of different carbon prices.
The demerger earlier this year of BHP Billiton’s most carbon intensive assets into a new entity named South 32 had also improved the resources giant’s climate risk profile, AMP Capital head of ESG investment research Ian Woods said.
“Carving out the aluminium assets into South 32 has enabled BHP Billiton to reduce its carbon emissions by around one third, in exchange for a relatively small drop in market capitalisation”.
Anyone who thinks aluminium plants can be allowed to fail – I doubt anyone is more than a few yards away from something which is made of aluminium. Be it the tin foil in your kitchen drawer, the corrosion resistant window frames in your new double glazing, the aluminium flashing which keeps your roof from leaking, the lightweight high tech engine block in your new car – its a long list. Yet as BHP indicated, Aluminium is not a major part of their market capitalisation. Now the energy intensive Aluminium business has been spun into a separate company, its not BHP’s problem anymore.
The British steel industry is already in my opinion playing this game. As WUWT reported, the British Steel industry is demanding subsidies, to keep the doors open. A major steel business in Britain just collapsed, with devastating job losses in a working class area. If steel receives support, Aluminium will demand similar support, then copper, then plastics and pharmaceuticals. There is a long list of businesses which are in a position to fragment into de-merged entities, each of which can then separately demand subsidies and special treatment from politicians, on pain of devastating macroeconomic damage if they collapse.
What can governments do to halt this explosive growth of corporate subsidy gaming? There is only one strategy which might work. They could attempt to reset the game, and restore a level playing field, by removing the excessive subsidies for renewables which initiated this ugly mess. In an environment where businesses survive or fail by their ability to solicit political favour, private investment is a risk, especially in unfashionable sectors, regardless of how vital they are to the overall economy.
A renewed and genuine commitment to a level playing field would in time restore confidence, and would allow market forces to begin to function normally once again. This subsidy gaming would never work in normal market conditions. In a healthy market, bankrupt factories are quickly acquired and re-opened by new investors. Only in a damaged, subsidy driven market, do political fashions take precedence over economic opportunities.
The same thing is happening in the US. Good riddance to bad climate rubbish.
Yes, it’s difficult to dial back all those subsidies. This is what happens when government distorts markets. The affected organizations change behavior to minimize risk. I think most of us here saw something like this coming!
if the government paid people $1 million dollars to have only 1 leg and 1 arm, there would soon be lots and lots of millionaires with only 1 arm and 1 leg.
governments make all sorts of grand plans. in these plans there are winners an losers. those that are on the losing side of the plan quickly take steps to move to the winning side. the steps they take are rarely anticipated in the original plans.
there has never been a government that was smarter than the market for long.
There is a law for that. It’s called the ‘Law of Unintended Consequences’.
http://www.energytribune.com/78844/europes-renewable-energy-the-law-of-unintended-consequences
http://dailycaller.com/2014/06/16/what-germany-can-teach-us-about-subsidies-for-renewable-energy/
“They could attempt to reset the game, and restore a level playing field…”
Alternatively, governments could nationalize all the energy-sector businesses. One might guess this alternative is far more attractive to the progressive politicians and governments driving this mess. That nationalization is a recipe for a stagnant economy and eventual widespread poverty is of no concern to them.
That’s what taxes are for. To stop anti-social behavior.
And if you want certain kinds of anti-social behavior, you subsidize it.
g
“Alternatively, governments could nationalize all the energy-sector businesses.”
That just makes them collapse a little slower. Management will be incompetent, employees will demand ever more money, and users will abandon them as their products become uneconomic.
Its the inevitable outcome of killing the goose that lays..
Leftish politics are there to ensure ‘social justice’ or ‘protect the planet’ – not to create wealth and lift people out of poverty – its simply not on their radar, which is why in general leftish governments destroy almost everything else but ‘social justice’ and the ‘environment’…
I’m not convinced they don’t destroy the “environment,” if you look at history.
Huge wind farms and solar arrays that scar the landscape and kill wildlife in their millions is not destruction of the environment?
I’m guessing that Navarre was thinking of the environmental devastation from the old Soviet Union and the current China.
We need to be able to ‘plus’ comments like this. Right on target, as well as the followup comments.
+1 to the +1
Make out of it what you will but this is apt:
http://www.bbc.com/news/uk-scotland-north-east-orkney-shetland-34471449
asybot
October 8, 2015 at 12:40 am
The UK supreme court just got together a bunch of worlwide greenies to find ways of defeating people like Trump who hate green
our lot must’nt have wised up soon enough?
Alcoa on Vic has either shut down or is close to doing so
resulting job losses over the last few years in an area where other employment is scant hasnt helped local small towns one whit.
let alone costs of importing the same product, just as,or more ..polluting(ha) elsewhere instead.
Assuming the Oz in your moniker is indicative of something.
“Anyone who thinks aluminium plants can be allowed to fail”,
The UK has also lost all bar one of its’ smelters, so they cannot be that important. Do not worry, I am sure the Chinese can take up any slack that appears. Just the West destroying itself, nothing to see here.
@ rockeyspears, +10
It becomes more complicated than appears on the surface. Here in N.Z. our only aluminium smelter is totally powered by hydro-electricity. In theory this should make it a preferred production facility, but instead Rio Tinto the owner keeps threatening to close it down and transfer production elsewhere. The question becomes “Why?”. Various answers can be proposed:
The low wage N.Z. economy is too high a wage economy and should be replaced with a “non-wage” (effectively) economy.
N.Z. governments have been caught up in the evil CO2 myth and have legislated extra costs onto the electricity buyer. This results in our low CO2 production of electricity to be very expensive to buy. (In my case a bill for 348 kWh, 1 month supply, was NZ$126.50. or at current rates US$82.80 which is about 23.8 US cents /kWh.) I doubt that Rio Tinto pays anything like this price but the cost of electricity may be far higher than they would pay in most of the world. They are after all in a competitive industry and must try to keep costs down. To do this at the expense of a country which has tried its best to price them off the market seems just.
CH***T Richard who are you with?, ours is near $400.00 kiwi a month.
Never mind, i’ll move in with you.
Got room for two cats, two kids, the missus and me?
WHAT? 348 kWhrs (82 $ US)
Our electricity is hydro: rate level 1 0.07970/kWh $ kWhr used 545 kWh + $43.44
level 2 0.11950/kWh Free (because we did not exceed.)
basic $ 5.29 ( 0.17640/day for 30 days ). Another ( I presume a line fee) fee $ 2.44. Taxes $2.56
$53.73 Can = ~$40 US for 31 days, 545kWh. 1/2 0f NZ rates, Who runs NZ’s hydro? Crooks?
I was also under the impression that there was a fair amount of Geo. Are the geographical problems ( distances, a few numbers of customers etc an influence? If so how lavish are the head offices of NZ’s power companies in Auckland??)
Eric says:”…made of aluminium. Be it the tin foil…”
Looks funny written like that. Tin made of aluminum.
I noticed that too. Should have been “aluminum foil”.
Make that “could have been”. It depends on which side of the Atlantic your English comes from.
Used to be TIN FOIL back before the 40’s Was rather expensive to make unless you had a good source of hydro power and took a while to replace tin foil. Then Reynolds rolled out Reynolds Wrap (in 1947.) Thus, most people over 60-65 will still call it Tin foil.
usurbrain – yes, being well over 65 I still mostly call it tin foil
It’s still “silver paper” to me for some reason (never made of silver of course). Tin-foil is still common when referring to people who want to ward off mind-bending rays from whoever is the current baddy of the day – I hardly ever seen anyone referring to aluminium-foil hats – it is always the “tin-foil hat brigade”.
“people who want to ward off mind-bending rays”
Think of all the electromagnetic energy surrounding us that didn’t use to be there, from megawatt TV, weather radar and radio stations to cell phone towers and HV lines; maybe the “tinfoil hat brigade” are the smart ones.
Tin, having a higher density, wards of destructive mind rays far more efficiently than mere aluminium.
If you do have to settle on aluminium foil for your beanie, make sure to get that heavy duty extra wide kind.
And double up too. A wet cloth between the layers should help block some of the faster neutrons they are using to beam their instructions into your cerebrum.
And don’t forget to pull out any teeth with metal fillings…that is how they find you to begin with.
I doubt that ” tin foil ” was ever actually tin. Tin is a quite valuable metal, and I don’t think it would be used in a throw away situation in any amount. Tin plating of steel maybe, but pure tin foil; I doubt it.
As it turns out, in 1957, the Decca Recording Company in England (London records elsewhere), made a unique recording, that is still to this day regarded by many as the best musical recording ever produced.
It was Georg Solti, conducting the Vienna Philharmonic Orchestra and a star studded opera cast in the first complete recording of Richard Wagner’s ” Das Rheingold. ”
In Wagner’s instructions for one scene, where the Gods are forced to stack up a mound of gold to hide the Goddess Freia, from the giants, the score requires the sound of gold bricks being piled up, which would have a peculiar clunk characteristic of the softness of gold.
Well no bank was going to lend the recording studio, a mountain of gold to do that scene and record it.
So they decided to use bricks of solid tin, which is similarly soft, and sounds not unlike gold when you stack it.
Well the pile of tin ingots itself was worth a small fortune, so while they were recording the sound of the piling up tin bricks there was an armed guard protecting the pile of tin.
The programme notes that come with the recording, have photographs of that pile of tin ingots.
So no I don’t think there ever was real ” tin ” foil used.
The original Decca LP recordings of that music, still to this day sound a lot better than the re-mastered CD version of exactly the same recording made from the original 16 track tapes of the original recording.
Analog LP records, don’t come with that annoying quantization noise that all CDs have, in music with a large dynamic range. (the quiet passages sound shitty).
g
There certainly was tin foil before aluminum. It can be rolled very thin like gold foil, which is not that expensive. I have no idea how common it was, wikipedia says it was used for food. Tin plating used to be inside cans too.
“faster neutrons they are using to beam their instructions into your cerebrum”
No, no, no, not neutrons silly, but bio electric fields or microwaves. My Goodness, have you not heard of CIA’s MK Ultra where “The Agency poured millions of dollars into studies examining methods of influencing and controlling the mind, and of enhancing their ability to extract information from resistant subjects during interrogation.”:
https://en.wikipedia.org/wiki/Project_MKUltra
Beware; you may already be an unwitting “tool”……
See that is the difference, tin foil hats stops that silliness cold, aluminium on the other hand has a non-conductive passivation layer which allows leakage of the rays into the brain. Aluminium foil take 3 or 4 plies and none of the seams can overlap, to match one layer of real tinfoil; those aluminized-mylar space-blankets are useless!
And not to forget the metal fillings in teeth that make excellent low volume radio receivers. Why what better way to activate nefarious sub-liminal mind control. That’s why all of my fillings are non-conductive.
https://news.google.com/newspapers?nid=1111&dat=20071122&id=k_YkAAAAIBAJ&sjid=KxIGAAAAIBAJ&pg=1721,9027189&hl=en
Maybe I don’t get the point but it seems that there will be fewer and fewer corporations independent of the state. How does that differ from the Fascist state run by Mussolini or, if these corporations fail and become state run entities, the Soviet Union? I really don’t see the light at the end of the tunnel. All I see is a train.
Remember when Fascist meant exactly that? For those of us that do what you say is exactly correct. By today’s definition it would mean a vast right-wing conspiracy is at work to send jobs and industry overseas to exploit cheap labor working in dungeons.
Recall all of those Soviet state stores with queues outside, and crappy subsidized bread inside. What could be more essential than bread for the masses, and how did that work out for the Soviet Union?
Leftists always have a terrific reason for distorting the markets, and always seem surprised when it does not turn out well.
As I wrote a few days ago, we are well on our way to forgetting all of the savagely painful lessons of 20th century state socialism. What used to be called “state ownership of the means of production” is now called “regulation”. In both cases central planners, rather than markets, become the master. The consequences of this mistake will be the same dreadful ones that they’ve always been.
A Muscovite walks into a store, and spends some time walking around looking at the empty shelves.
After a while he goes to the shop-keeper and says, “so, I see that you don’t have any bread at all”.
The shop-keeper corrects him, “no, WE are the grocers. WE don’t have any vegetables…The shop where they don’t have any bread is the bakers across the road.”
I have altered this joke slightly in translation. Once again, the commissar has vanished!!!
More here: https://en.wikipedia.org/wiki/Russian_political_jokes
WHAT? 348 kWhrs (82 $ US)
Our electricity is hydro: rate level 1 0.07970/kWh $ kWhr used 545 kWh + $43.44
level 2 0.11950/kWh Free (because we did not exceed.)
basic $ 5.29 ( 0.17640/day for 30 days ). Another ( I presume a line fee) fee $ 2.44. Taxes $2.56
$53.73 Can = ~$40 US for 31 days, 545kWh. 1/2 0f NZ rates, Who runs NZ’s hydro? Crooks?
I was also under the impression that there was a fair amount of Geo. Are the geographical problems ( distances, a few numbers of customers etc an influence? If so how lavish are the head offices of NZ’s power companies in Auckland??)
I think my first answer ended up in a cloud somewhere so here again.
@TYoke, Growing up in the 50’s and 60’s in western Europe I remember that well. ( It was still a war ravaged territory btw) If it had not been for the Marshall Plan and the following capitalist structure that made people think and work for themselves and the improvement of their families and communities we would still be mired in poverty, alas the last few years have seen a return to the “Glory Days” of that (all over the world) failed socialistic system. It is becoming very scary indeed.
There maybe a third leg to this story. “A major steel business in Britain just collapsed, with devastating job losses in a working class area. If steel receives support, Aluminium will demand similar support, then copper, then plastics and pharmaceuticals.” I wonder if the major stock owners started, backed or invested in overseas competing businesses?
The last I checked, most of the European steel industry (and big chunks in the USA) is owned by India-based firms.
The Redcar steel plant is owned by a Thai company and was its UK arm. They had bought it from an Indian company so already happened. As far as I know there is no raw aluminium smelting left in the UK.
Is Fort William gone? I thought we had 1 left.
Yes, Gerry, you’re right.
“Forty years on, the smelters are now industrial relics, regarded as an economic failure and a classic example of a Government attempt to pick winners that backfired.
Niall MacKenzie, head of the Institute for Innovation Studies at the University of Wales, says the venture was doomed from the start because of the heavy reliance on subsidies, compounded by blunders by electricity generators and management shortcomings.”
http://www.telegraph.co.uk/finance/newsbysector/energy/8949707/Chancellor-too-late-to-save-Britains-alumium-smelters.html
rockyspears.
I, too, wondered about Fort William. Trains regularly go to and from the aluminium works at Fort William (they go through the town where I live) so I wondered if the author of the DT article had overlooked Fort William or else do they not process raw aluminium. The works at FW are owned by Rio Tinto Alcan and their website has an article headed: ‘Rio Tinto aluminium smelter in Fort William’. This says that ‘Alumina is brought to Fort William by train after being processed, from bauxite in Ireland’. Does that means it’s not raw aluminium? However, clearly smelting of some sort goes on there.
Iceland is a big aluminium smelter.
The Alcan aluminiukm smelter in Northumberland (powered by a coal-fired power station) closed in 2012 with the loss of 500 jobs . It was the largest employer in the county.
Rio Tinto Alcan chief executive Jacynth Cote was quoted by the BBC as saying: “… It is clear the smelter is no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation.”
The Carbon Price Floor, introduced in 2013 meant that UK aluminium- and steelmaking was paying twice the rate of European competitors in ‘green’ levies, taxes and subsidies. The situation was even worse when cvomparing Asian and US costs.
Government was well aware of this, in fact they even commissioned research which proved the case: ICF International (for the Department of Business Innovation & Skills, BIS), ‘An International Comparison of Energy and Climate Change Policies Impacting Energy Intensive Industries in Selected Countries’ (11 July 2012). Despite warnings about the result they went ahead with CPF legislation.
I was wondering what the main component of aluminium is, was it Bauxite?. Where does that come from and who has the monopoly on that? ( I thought it was in South America, if some one can help sort that out it may help in the discussion). It may also indicate why production of aluminium has moved all over the world. Because it also takes huge amounts of electricity to make Al and for a while in Canada Hydro was a big helpful cheap factor, Alcan wanted to build dams ( James Bay and in BC) to both provide electricity for themselves but also to feed the electricity net, they were stopped by the “Greens”. ( been going on for decades).
Pharmaceuticals should not be included in your list of examples.
Energy costs are very low against profit and are not a significant part of their costs.
Also, they already receive an astonishing level of state backing in the form of regulations that discriminate against competition and consumer choice.
My father once worked as a site engineer for Astra Zeneca. He spent some time concerning himself with reducing the costs of the construction of a production facility.
One day a senior manager came to see him and discuss progress.
My father explained that some small aspect had stalled in order to find a more cost effective solution.
The manager stopped him and explained, “you should understand that the cost of this entire facility will be reimbursed by the first week of production. So don’t worry about costs. We just want to see it up and running as soon as possible.”
You’re right about government interference via subsidies, Eric. Businesses aren’t going to just roll over and they will take measures to protect their business. If subsidy farming is more profitable than your core business, the perfectly reasonable reaction is to back out of your core business and switch to subsidy farming.
If politicians are going to “save the world” (which doesn’t need saving, or need us for that matter), the honest thing to do is to stop pussyfoot around by subsidizing this and that and taxing the other. They should just come right out and impose a 20% on everything save-the-world tax. That should give them enough moolah to buy the necessary votes to stay in power and continue to enrich themselves and their cronies. But then no one expects honesty from politicians.
H.R.
October 6, 2015 at 5:01 am
“If politicians are going to “save the world” (which doesn’t need saving, or need us for that matter)”
————————-
The world doesn’t need us? What does the world need?
All life on the planet benefits from increased atmospheric CO2. Life has an appetite and will eat itself into bare cupboards. Some would make the case that CO2 and life reach a balance just above the level needed to sustain life. Some have noticed that CO2 levels during interglacial periods inexorably diminish to levels detrimental to life, until the whole process resets with each new Ice Age.
It must be in our nature, to buy into guilt trips.
Alan,
I don’t assume the Earth is sentient. The Earth doesn’t know or care whether or not there is life on it. It didn’t rejoice at its own formation and will not know or notice when it is eventually engulfed by our dying Sun. The Earth doesn’t care a whit whether or not we save it. Who do you write to if you want to let the Earth know you’re its buddy, you’re here to help, and you’re going to save it? What difference does it make to the Earth which, if any, life forms are on its surface? Where does the Earth record that in its diary? The Earth is not sentient, yet a fair portion of humanity anthropomorphizes the Earth.
Now humanity’s interest in the state of the Earth and humanity’s stake in making sure humanity remains around for as long as possible is another matter. Stewardship of the Earth by humanity is in humanity’s best interest but again, the Earth doesn’t need saving.
Earth, the world, life… hardly the same terms.
Since humanity’s additions to atmospheric CO2 are known to have led to an increasingly vibrant biosphere, have those CO2 emissions been in our best interest?
Alan responded in part to H.R.;
“[…] have those CO2 emissions been in our best interest?
You bet your sweet bippy they have, Alan! Vegetarians and second-hand vegetarians everywhere should be rejoicing.
I’d venture to say humanity would be doing itself a big favor if we could get atmospheric CO2 up around the 700-800 ppm level. I just wish we could get the global average temperature up another 3-4C,*** but I’m not sure we can manage that without some unintended consequences. Now if we could just get the Earth out of the current Ice Age… Oh well. Have to wait on that one.
.
.
.
.
*** Can I get an ‘Amen’ from the Canadians?
“You bet your sweet bippy
——————-
There’s a blast from the past and I’ll throw in an “Amen” for Dave Madden, a Canadian cast member of the old “ Rowan & Martin’s Laugh- In.“
“What do you do, if governments are threatening to impose damaging new taxes on your business, in the name of combatting “climate change”?”
You pass the costs onto the consumers.
The Jonathan Gruber videos where he said that Ins. companies would pass on their higher Obamacare costs to consumers is the same thing. (And because of this, the middle class is mainly the group that is funding healthcare for the poor because there are far more middle class people than rich people. Same applies to the great society programs where SS taxes were raised and used to fund them. Now with a carbon tax, the middle class again is going to be funding more social programs and paying down the debt/deficit.)
We can thank the ‘intelligent’ people of the left for seeing these things in advance…
Even better, the know nothings will then blame the insurance companies for the higher prices, rather than the politicians that caused it.
“You pass the costs on to the consumers”
That’s really all that voters need to know about economics, and politics. Politicians are expert at concealing the costs of their stupid thievery.
Anthony, time to report the September global temps. Disappointingly “cold” for the warmists too.
http://www.drroyspencer.com/latest-global-temperatures/
How come the El Nino has not kicked in yet?
Perhaps it has. The stars have been aligning for the start of a cooling cycle. Perhaps the el nino has covered it up?
Hot spots elsewhere may be cooling.
Mankind and his economic entities can adapt to anything. Except of course a 2C degree increase in average global temperature. We all just lie down and die if that happens.
Reblogged this on Climatism and commented:
“Only in a damaged, subsidy driven market, do political fashions take precedence over economic opportunities.”
Ahhh the ‘politics’ of ‘climate change’ shining through again …. and again.
Very interesting read. Watch that space.
Nice one Eric Worrall. Thx WUWT.
Alcoa has followed the Bhp lead by splitting off high intensity energy business, namely upstream refining. It leaves downstream free to make money and a struggling upstream to get subsidies.
Leo Smith says:
… and of course the health service on which we all rely.
Not much point in wealth without health.
Many right oriented people have been conned by this AGW scam, too. Reducing it to a left/right slanging match is not productive.
Unfortunately Mike . like with many other statist programs, Obamacare will end in poorer quality healthcare and greater expenses. (Wait until the new rates are released)
As far as the UK is concerned a lot of this is happening already. No surprise that steel is following aluminium out of the country. Oil refining has been reduced such that most fuels are imported because of energy costs here. Glass-making would be another that might join them soon given that Pilkington is foreign owned. So in addition to re-organising the business structure, relocating out of the country is the other response. And we all know that the great green jobs don’t exist to re-employ the workforce and so going green kills jobs. Sadly somebody is probably going to have to become a basket case to ram it home to the dumb politicians or stage mass protests and uprisings.
Australia now no longer refines oil, it is all imported (Even though we can make liquid fuels from an abundance of coal easily, just there is now no political will to do so and also oil is “cheap”). The car industry, and all other supporting industries, will be gone in 2016 save for the design departments. What else does Australia make? Well, not much in terms of volume. No value add is added to the likes of iron ore, it simply is dug out of the ground and sent somewhere else (China). Aluminium will probably go the same way. Incidentally, Waterford Crystal is no longer made in Waterford, Ireland. I am not sure if that was due to labour and/or energy costs.
The old “watermelon” tag is changing from green-on-the-outside-red (as in socialist/communist or somewhere on that spectrum)-on-the-inside to green-on-the-outside-“in-the-red”-everywhere. And all to solve a non-problem…
You will not change progressive polis (cameron, Obama, EU) without violence. They understand nothing else EXCEPT a complete wipeout at an election but that can’t happen because ALL polis like money. It’s why they are there and green means lots lots lots of money.
The subsidies, rebates, free loans, and other measures making it appear that Renewables sell for less on the grid (which the middle class make up for in taxes) is exactly what is causing the coal and nuclear power plants to ask for subsidies and even throw in the towel. The USA is headed down the same death spiral as Germany – and China and India see it and are building 400 new Nuclear power plants, 600 new coal plants. Already you can not fill up a shopping cart of items Made in the USA at the average home improvement store. Soon, there will be only service companies in the USA, and even that is going overseas. Just read of a Fortune 500 taking steps to move their entire accounting department overseas. Good luck for your kids.
Good friends of ours just bought a 4 bedroom house on an acre of land for $30,000 an hour outside of Atlanta. The previous owners couldn’t make the payments, the bank foreclosed, and no one else stepped up with the money.
This is the hidden cost of misguided government policies. In effect, all the surrounding property has been driven down in value. Peoples savings, much of which is in the value of their houses, have been wiped out by the lack of jobs as industries have simply closed their doors.
This is a huge hidden tax. Hundreds of thousands of dollars taken from millions of property owners as misguided policies have wiped out the value of property across the country. This is by means an isolated event. Look at Detroit.
This is by NO means an isolated event. Look at Detroit.
Is an hour out of Atlanta actually “out” enough?
$30,000 an hour is a lot, inside or outside of Atlanta 🙂
This just in, and off-topic: Accuweather, that entity in State College PA, home of you know who, is backing off the AGW theme for Joaquin.
Their explanation is: “A very unusual combination of weather factors came together in just the right way to produce rainfall rates rarely experienced”
Accuweather has been one of the more reliable adherents to the “faith” and to see them play this in a neutral fashion is somewhat interesting
There is certainly an element of playing “chicken” by energy-intensive industries with governments but when you can simply slash your basic energy costs by over 60% by relocating to more business friendly climes, it’s a no brainer.
Pointman
It just occurred to me, maybe that is why Osborne announced that councils could keep business rates, …. because soon there won’t be any.
Great move George.
Moving to places where all that is needed to do business are envelopes stuffed with cash. Doesn’t matter what the “official” climate change policies are in these locations.
The best way to slash your basic energy costs is to move to more climate friendly climes. That is somewhere warmer.
This problem largely is the result of allowing governments to run deficits. It is simple to think up millions of grand ideas, no matter how stupid, so long as you don’t have to pay for them.
Force governments to live within their means, as the rest of us have to, and you will quickly weed out the waste. Otherwise, freedom will collapse under the seer weight of debt, as more and more people discover they can vote to give themselves a bigger and bigger share of a quickly shrinking pie.
Totally agree. As much a conflict of interest as allowing banks to have shareholders and depositors. The commoner aka taxpayer or depositor, always loses.
Without depositors, there is no bank.
How is it a conflict of interest for any company to have both owners and customers?
the conflict of interest lies in the potential for the owners to use the depositors funds to offset the owners risk. for example, if you were a store owner, and asked for your customers to pay in advance, and at the same time asked your creditors for 30 days to pay. then used the delay between the two to pay yourself a huge salary. so long as you grew the business fast enough you would be OK, even if you were running at a loss. As soon as you stopped growing you would close your doors and move on to another business, leaving a lot of unhappy people in your wake.
That risk occurs with any business that handles money.
If you can figure out a way to operate a bank without either deposits, or owners, please let Obama know.
I was just implying that both parties, shareholder and depositor, cannot get maximum return. One has to suffer. Hence conflict.
The socialist realised this along time ago. It what Obama did. He still hold 47% of the vote because he is still promising loads a money to the unemployed and unemployable. The higher the socialists / progressives drive unemployment the more votes they get.
Atlas shrugged in an interesting way! This kind of versatility is the hallmark of the private sector. The totalitarians have never been a match for free enterprise. Hammers and sickles vs piledrivers and combine harvesters. These are the guys that really brought down the iron curtain. Why do we let these mice play? Maybe because they are no match to the doers and thinkers in free enterprise.
What was it Hillary once said when told that her health care plan would force small companies out of business?
Something like: Is it my fault if an undercapitalized business fails?
Looks like it is now the govts fault that heavily capitalized businesses are failing.
Old news. The power company I worked for closed a 3-unit, 660 MW coal-plant that was powering an aluminum plant in Ohio (which had to close of course) — due to EPA crap. That was decades ago.
Same here for Alcan, next door to Wylfa, a nuclear power plant, now gone and Alcan mothballed
This story reminds me about the time back in the 1970s (I think) that the UK government raised or added a luxury sales tax on luxury boats. They did not consider that luxury boat buyers could go somewhere else to buy boats. In their attempt to soak the rich and get more vote buying taxes the boat builders went out of business. Now the UK government had several people and a company, who were paying taxes now on the dole. I would have thought the government would have realized their error and stopped the tax before the business went under.
I always wondered if the boat business ever came back.
Same thing happened in the US in the 1980’s.
The boat industry still hasn’t recovered.
Sunseeker, Princess, Fairline, Sealine and Oyster manufacture in the UK although, with the exception of Fairline, have foreign owners.
Wow Billy those Sunseeker are nice.
This is an excellent about the consequences of stupidity, er, I mean subsidy, in the energy biz. Thank you!
Left out the word “article”.
The end result of such a green energy evolution has been nicely analyzed by Euan Mearns based on European energy prices: http://euanmearns.com/green-mythology-and-the-high-price-of-european-electricity/
Pethefin
Thanks for the link – an interesting article and some very useful sites mentioned in the subsequent discussion.
I saw the headline in today’s Independent (UK paper) that renewables have become cheaper than conventional generation here. Hoping that someone will analyse their analysis in due course.
Big businesses love regulation from the government, they can afford the cost and buyoff the politicians but small companies can’t do either and lose their competitive edge thus eliminating them as competition and cementing big corporate monopolies and incidentally big campaign donations to big government politicians.
Exactly. But most of my leftist acquaintances totally fail to grasp this point.
And hence they invariably applaud the imposition of apparently restrictive regulations that in the long game will show themselves to benefit the big corporations that such people apparently despise.
Major vacuum cleaner manufacturers have relished the introduction of the vacuum cleaner power limit regulations in Europe. They all played along. It is small producers and the consumers who will lose out.
“It gets better…”
Not for us, the public. I attended speech a few years ago delivered by then British Deputy PM Nick Clegg. He described planned climate policies as a win-win. I can’t remember his exact words, but his gist was that even if AGW did turn out to be a load of nonsense (I had the impression he might be privately sceptical), they would be a great way of raising extra state revenue from energy companies – no mention of how the energy companies would obtain their money. Idiot politicians see ‘climate change’ as the most brilliant way yet to raise tax revenue and redirect it into the pockets of party financiers and their preferred voting blocs, with a gullible public (in their view) falling over each other to hand over their money in the name of saving the planet. Now it has started to hit us in a big way. Most affordable cars are no longer a tax write off for the self employed, the fuel escalator continues to punish workers outside London who need to travel, indirect energy taxes are so high that even the middle classes (those who cannot afford ‘eco-homes’) now have to restrict spending on travel, food, education, childcare and leisure or freeze during the winter. I have had to give up my household contents insurance, raised by £400 p/a due to unspecified and unjustified ‘increased flood risk’ – a look into the issue reveals well funded collusion between the green blob and the insurance industry in the form of scare-PR campaigns (despite no increased precipitation trend in the UK). Energy companies and financiers may be busy trying to find new and more imaginative ways to line their pockets with subsidies – they will always survive, but when the green bubble bursts, it will be the politicians who will have their backs against the wall. This sounds appealing right now, but historically nations undergoing severe economic hardship tend to elect very nasty extremist governments offering radical quick-fix solutions (all part of the plan for the most vocal eco-zealots who smell power), leading to further poverty and misery. CAGW is without a doubt the most potentially catastrophic belief system the world has seen since Stalinism.
++100
+1000
“it will be the politicians who will have their backs against the wall.”
The politicians originally responsible will never lose anything (that’s the nice thing about being “political”) as they will simply move on into a PR area or as a shill for corporate like in the US. The new politicians will now win by being “different”, same ol’ shell game which most of the public never catches on to. Gee just who to vote for, LOL.
Next time that you upload the contents of my brain onto the internet – could you be polite enough to ask in advance!!!
But you missed a bit – not only are the forces of Green zealotry and the insurance companies conspiring to increase the perception of risk. But the Green Blob and associated environmentalist meddling is conspiring to increase the actual risk. As seen in Somerset, where the suspension of dredging in the 1990’s has lead to silted drainage channels, which are prone to flood.
http://www.telegraph.co.uk/news/earth/flooding/10655005/The-flooding-of-the-Somerset-Levels-was-deliberately-engineered.html
Thanks, Eric Worrall. Very good article.
Yes, governments have distorted markets profoundly for pursuing a Chimera.
Civilizations can self-destruct, and not only by nuclear war, a war on carbon can do it too.
Bloomberg just posted an article on it’s website that will make your blood boil, kind of like this article does.
http://www.bloomberg.com/news/articles/2015-10-06/solar-wind-reach-a-big-renewables-turning-point-bnef
The turning point they describe is that so much renewable capacity has been added and since the power it generates is “free” (after you’ve paid for the capital costs) the capacity factor of fossil fueled plants is so low that it’s driving up the cost of fossil fuel electricity to the point where it’s less competitive than renewables. This is considered great news by the author. They go on the add that as they build storage capacity out they’ll need less back up power for the renewables as well. So you build solar with a capacity factor less than 20%, wind with a capacity factor of 25%, back up storage for the intermittency (are we talking hour or days??) and everyone gets “free” electricity. I guess there is no interest and capital to write down, no maintenance, not taxes but somehow, the “free” renewables get billed at triple the rate of the fossil energy. How stupid do these reporters think people are? How naive are journalists that they can print this nonsense?
Sean October 6, 2015 at 8:32 am
“How stupid do these reporters think people are?”
History shows people to be very stupid.
More likely uninterested and too mentally lazy to learn the fundamentals for themselves. Way easier to assume that the MSM and AGW “97%” group are correct and go back to reality shows, sports, video games and social media.
I believe humans invented language to facilitate lying to each other. We all have a predisposition to believe.
Wind is only free if there is wind. Wind is a resource that can’t be depended on. Recent information reveals that average wind speeds have decreased in the western U.S. over the past five years compared to the previous five years average. There is no way that future wind resources can be predicted unlike other fuels that can be used to produce power.
Wind is just like any other source of fuel. If you run out of fuel the “motor” stops.
Re “wind is only free if there is wind”.
This is true, of course. But critically, electricity or useful mechanical work extracted from the wind is never free. Since the process of extracting energy from the wind is expensive.
It is even more expensive if you attempt to do it in shallow sea water.
It is even more expensive if you attempt to do it from floating platforms in deep sea water.
It is even more expensive if you create so much wind generating capacity that other parts of the grid must be adapted to cope with the fluctuations in delivered power.
And on and on.
Here in the UK off-shore wind electricity is costing over four times the current wholesale rate.
And that is before you factor in other spending on additional grid infrastructure costs and so-called “innovation”.
That doesn’t sound like free to me!!!
Bloomberg is a top Bilderberg conspirator.
It’s a variation of the Nigerian scams where emails claim you have won millions in a lottery you never entered. The mentality is the same, the appeal of something for free overwhelms all commons sense and rational thought. Greed and sloth overcometh working for a living.
So what works for Nigerian scam artists also works for empty-headed reporters and their readers.
BTW I am emailing the author to explain to him that food is free also, just a simple act of nature. All you have to do is subtract the costs of growing, harvesting, processing, packaging and transportation and it is completely free like renewable energy.
I’m afraid no matter how stupid journals think people are the people will always be more stupid.
‘European politicians are now being forced to pay subsidies, not only for renewables, but…’
If only this statement were true then there would be none of this nonsense.
It is European consumers and taxpayers who are paying.
As Margaret Thatcher pointed out, Governments have no money.
Fox News…” Former United Nations General Assembly President John Ashe accepted more than $500,000 in bribes from Chinese businesspeople in exchange for help obtaining lucrative investments and government contracts, according to federal court documents unsealed Tuesday, sparking an investigation into whether bribery is “business as usual at the U.N.”
The U.N. is nothing but corruption !!!!
Since 1948!
++100000
“In a healthy market, bankrupt factories are quickly acquired and re-opened by new investors.”
Ah, so that how the world’s largest sewing machine factory in Clydebank has kept going since Singer’s had to close it. http://www.singersewinginfo.co.uk/kilbowie/
Ah, so that how the Ravenscraig steel works in Motherwell kept open after its owners decided it was no longer viable.
https://en.wikipedia.org/wiki/Ravenscraig_steelworks
Ah, so that’s how all the shipyards on the River Clyde have kept going since they virtually all went bankrupt.
Ah, so that’s how all the locomotive works in Glasgow have managed to keep going since they all went bust.
The Hillman/Rootes car factory in Linwood?
The Coats cotton factory in Paisley?
Aye, laddie, let’s dream on.
It wasn’t the health or otherwise of the economy which permanently closed these factories. The plain fact is that other places were becoming more efficient at making the same products. But I suppose it all begs the question as to what counts as a ‘healthy market’.
Sure grant tax benefits to emerging markets for investment. Of course .gov ALWAYS reverses its decision when it starts to catch on be profitable and craps the emerging market out then too. To increase tax on those fossil producers or anyone in this junk laden global economy isn’t going to anyone any good. The best you can hope is to seal any tax havens that are setup for funneling cash away by global corp. not little joe. Obama and others wont go there though, cause they’re crony-fascists, if they were anything different the market would’ve tanked when Obama entered office.
Why does that line make me think of Al Gore?
He’s gained his wealth by playing both ends against the middle. As long as the “green” can be directed his way, he’s all for it.
100 or years ago he would have been running the “shell game” at a carny.
No, he would have been running a church, then, too.
Some time ago on WUWT there was a study of all alternative electricity and fuel sources and how they compared to fossil fuel in terms of co2 and did they save any petroleum or coal. Wind and ethanol from corn (maize) were a break even. I can not find that post. Help.
Europe is going bankrupt thanks to several forces with global warming hysteria being one of the major forces but also passively allowing millions of very angry young male Muslims into Europe means more disruptions and even destruction of entire countries. This suicidal policy is quite amazing to watch. Aghast.
There is a solution to this on-slot:
https://pgtruspace.wordpress.com/2015/10/05/middle-east-refugee-solution/
will we take advantage of the opportunity presented to us?…pg
When government determines winners and losers in an economy, instead of acting as an impartial referee it becomes a cancer, crippling if not destroying healthy economic growth.
Bureaucrats always destroy the society they manage ALWAYS! It is us or them!
WE don’t need them…pg
Ronald Reagan told you this would happen. To paraphrase, govt does this if it runs tax it, if stops subsidize it.
And history repeats sigh…
carbon emitting has devastatingly damaged the environment of earth…. steps should be taken to reduce it
C or CO2???? Surely C.
Where did this carbon, which we have been “emitting” come from?
As far as I am aware, it came FROM the “environment of earth”.
We haven’t emitted it. We have simply put it back where it started!!
But jokes aside, you will have difficulty convincing anyone here that your alarmism is supported by any real science. Keep trying, if you like. But you had better come up with a more sophisticated argument, if you plan to convince anyone.
As a carbon-based life-form, how does it feel to be declared that you are composed of pollution?
That man-made global warming ruse has from the beginning been a planned fraud – as testified by the IPCC itself: http://cleanenergypundit.blogspot.co.uk/2011/10/west-is-facing-new-severe-recession.html ;
latest considerations are at http://cleanenergypundit.blogspot.co.uk/2015/08/midsummer-musings.html