Thursday, 13 October 2011
CCNet – 13 October 2011
The Climate Policy Network
Shale Gas May Save Europe’s Economy
Huge swathes of Britain are up for grabs in a new round of gas exploration licences which the government is due to issue soon. Could this be the answer to cheaper energy bills? Looking over the maps he drew up for the Department of Energy and Climate Change (DECC), Nigel Smith, a geologist working for the British Geographical Survey, highlights which areas of the UK contain the most potential for gas exploration. "Kent, Surrey, Sussex, Hampshire, the Wessex Basin - and that could include the Isle of Wight and Dorset," he says. "Scotland...the Midland valley, too." -- Simon Cox, BBC News, 13 October 2011
Shale-gas production in Europe could reach 35 billion cubic metres a year (cm/y) by 2020, or about 20% of EU member states’ output now, with Poland and the UK the leading producers, says a new report. --Helen Robertson, Petroleum-Economist, 12 October 2011
When we learn that one in four families are going to struggle to pay their bills in four years’ time, as Deutsche Bank predicted this week, that is going to concentrate a lot of minds. As are the latest dire unemployment figures. It could be that the wind is now blowing against green taxation and carbon tomfoolery. Perhaps Mr Osborne’s apparent conversion in Manchester last week, when the Chancellor appeared to reverse climate change policy by suggesting we let the EU take the lead, is a sign of things to come. --Stephen Doughty, Daily Mail, 12 October 2011
The pattern of failure tells us several things: that the Obama administration’s understanding of green jobs was poorly conceived, and also that the execution was incompetent. These failures are likely to play a significant role in the 2012 campaign because they support an argument that works well with independents. It is clear that the Obama administration doesn’t know how to create jobs. In the midst of the worst recession in three quarters of a century, it chose to subordinate real job creation to vague and illusory green fantasies. --Walter Russell Mead, Via Meadia, 12 October 2011
AFTER more than a decade of political argument, the House of Representatives has this morning passed legislation to put a price on carbon, paving the way for Australia's most dramatic economic reform in more than a decade. But opposition leader Tony Abbott said he was more determined than ever to axe the carbon price if he became prime minister. “We will repeal this tax, we will dismantle the bureaucracy associated with it,” Mr Abbott said. “I am giving you the most definite commitment any politician can give that this tax will go. This is a pledge in blood this tax will go. --The Australian, 12 October 2011
Lord Rees of Ludlow and Lord Giddens are addressing the wrong problem about climate change (“Whoever said global warming was dead?”, Oct 13). One possible scenario for 2050, no less possible than any projected on the basis of climate models, is that we are in the middle of a deep solar minimum, and it is only the CO2 pumped into the atmosphere over the previous 100 years that is staving off cold climates that would lead to crop failure and mass starvation. The uncertainty is not only in the science and in the scenarios, but in what is a reasonable response today. As an engineer I see energy security as the urgent, largescale and real problem in the UK over the next decade. That should be the focus of action now, with reduced CO2 emissions being a collateral benefit. --Professor Michael J Kelly FRS, Prince Philip Professor of Technology, University of Cambridge. The Times, 14 October 2010
1) Shale Gas May Be Britain's Answer To Cheaper Gas Bills - BBC News, 13 October 2011
2) Europe Has Huge Shale Gas Potential, New Report - Petroleum-Economist, 12 October 2011
3) Nuclear Power Likely To Grow, Royal Society Says, So Nations Should Plan Ahead - Science Insider, 12 October 2011
4) Stephen Doughty: The Wind Is Now Blowing Against Climate Taxes And Carbon Tomfoolery - Daily Mail, 12 October 2011
5) Kyoto Protocol Set To End In Durban - Times Live, 12 October 2011
6) Walter Russell Mead: The Green Ball And Chain - Via Meadia, 12 October 2011
7) Australia: Tony Abbott Makes A 'Blood Pledge' To Repeal Carbon Tax After It Passes Lower House - The Australian, 12 October 2011
1) Shale Gas May Be Britain's Answer To Cheaper Gas Bills
Simon Cox
Huge swathes of Britain are up for grabs in a new round of gas exploration licences which the government is due to issue soon. Could this be the answer to cheaper energy bills?
Looking over the maps he drew up for the Department of Energy and Climate Change (DECC), Nigel Smith, a geologist working for the British Geographical Survey, highlights which areas of the UK contain the most potential for gas exploration.
"Kent, Surrey, Sussex, Hampshire, the Wessex Basin - and that could include the Isle of Wight and Dorset," he says.
"Scotland...the Midland valley, too."
Mr Smith's map also includes vast areas of central England and the Welsh borderland - although the rock formations in those parts of Britain are trickier to drill.
Underground opportunities
This first data on potential UK shale gas reserves has ramped up interest in domestic gas exploration.
Several companies are chomping at the bit to get their hands on one of the new licences the government is planning to issue.
Mr Smith thinks these are going to prove incredibly popular.
"I think there's going to be a fantastic uptake. I have seen the interest building up over the last two years," he says.
"Everybody's waiting with bated breath for the next round to come about."
Shale gas is a by-product of shale rock. Trapped in prehistoric clay thousands of metres underground, it is released by blasting the rock with water and chemicals to release pockets of gas.
It used to be far too expensive to mine, but recent developments in drilling technology have now made it commercially viable.
In fact, drilling for shale gas is already underway along the Lancashire coast, not far from Blackpool.
Cuadrilla, the first company to drill for shale gas in the UK, estimates there are around 200 trillion cubic feet of gas reserves in Lancashire alone - just a fraction of which could provide gas for the whole of the UK for several years.
Cuadrilla says these significant reserves also present the prospect of new jobs, estimating over 5,000 workers could be needed should the Lancashire drill reach peak production.
With shale reserves locked underground across much of Britain, there is huge potential in many areas.
In a business park in Bridgend, South Wales, is the modest HQ of Coastal Oil and Gas. Company boss Gerwyn Williams says he cannot wait for the next round of licences to be issued.
The company already owns 17,000 square kilometres of land in South Wales, Somerset and Kent where they hope to drill for shale gas.
Mr Williams says the UK has yet to wake up to the resource sitting beneath it.
"There's a lot of shale… and a lot of areas that haven't yet been taken up, so I think there's going to be a lot of interest in the next round," he says.
"We're looking forward to it".
Coastal Oil and Gas estimates there are £70bn worth of shale gas reserves in South Wales alone - the corporation tax from this could make a pretty big dent in the UK deficit.
However, mining engineers and energy investors speaking to BBC Radio 4's The Report were sceptical about some of the estimates of shale gas reserves being made - largely because the companies making them are not listed on the stock exchange.
"They can say the moon is made of green cheese, it's not subject to the normal reporting requirements of the stock exchange," says Professor Paul Stephens, a senior research fellow in energy at think tank Chatham House.
Professor Stephens says he hopes firms like Cuadrilla are right, "but don't hold your breath," he says.
Cuadrilla's chief executive Mark Miller stands by his company's estimates, and says aside from jobs and energy security, households across the UK could also benefit from the shale gas boom, in the form of lower bills.
"If this follows the same trend as in other successful oil and gas markets, you could see energy prices turn the corner and go down as a result of having your own supply in your own country," he says.
Environmental concerns
The UK currently imports around a third of its gas, and this is expected to rise to 80% by 2020, so a new domestic supply would certainly be welcome - but that is unlikely to lead to cheaper bills anytime soon, if at all.
Plus, if Britain is going to exploit its shale gas reserves, it will have to convince the growing band of groups forming across the UK to protest against shale gas drilling.
Top of the list of concerns is the side-effect of "fracking" - the process of blasting rocks with water and chemicals to release the gas.
While DECC and the Environment Agency are both convinced this will not affect local water supplies, campaigners like Louise Evans are sceptical.
Ms Evans runs a caravan park in Cowbridge, South Wales, half a mile from a proposed gas well.
"There's never going to be a guarantee it's safe, but it's a very new method and we're calling for a moratorium so that everyone can take a step back from it," she says.
So far, the cause of campaigners like Ms Evans has garnered limited support from parliament, with just 15 MPs signing a motion for such a moratorium.
As well as fears of pollution, shale gas exploration has also raised concerns about noise disturbance and the visual blot of gas drills appearing on the landscape.
Rick Rule, an energy broker with Sprott Asset management in Vancouver, says drilling disruption is sure to be an issue.
"People might be disturbed by the presence of a drilling rig in an otherwise pastoral scene... and there would be a visual impact in an area for 4 or 5 years," he says.
However, he also believes the UK must seize the opportunity while it can. "The future for shale gas in Britain is very bright," he says.
But the Energy Minister Charles Hendry is not getting too excited just yet.
"We do see [shale gas] as a game changer in places like the United States, but we don't see the same pace of change or potential here in the UK at the moment.
"But we will obviously watch very carefully the developments which happen."
The Report is on BBC Radio 4 Thursday 13 October at 20:00 BST. Listen to the full programme via the iPlayer or download the programme podcast.
2) Europe Has Huge Shale Gas Potential, New Report
Helen Robertson
Shale-gas production in Europe could reach 35 billion cubic metres a year (cm/y) by 2020, or about 20% of EU member states’ output now, with Poland and the UK the leading producers, says a new report.
Unconventional Gas World Production & Drilling Forecast, a study by consultants Douglas Westwood, claims shale-gas output in Poland and the UK could reach 11 billion cm and 2 billion cm respectively by 2020.
Poland has been aggressively promoting domestic shale-gas drilling and last month Cuadrilla Resources claimed to have discovered 5.7 trillion cm in northern England. Prospects for developing shale-gas resources beyond North America are “looking good”, said analyst Joseph Dutton, author of the report.
Huge potential
Although North America will continue to dominate the global shale-gas sector – US production totaled 136 billion cm in 2010, according to the Energy Information Administration (EIA) – there will also be “rapid development” of shale gas in Europe, Asia, Australasia and China, the report said. Growth in Asiay will “outstrip all other regions”, with production set to rise by 1,000% between now and 2020, to reach 65 billion cm/y.
“China has a very optimistic and forthright attitude to any kind of economic development and it doesn’t have the same issues from a regulatory point of view that Europe does,” Dutton said. “The potential in China is huge.” With shale-gas reserves estimated by the EIA to be 36 trillion cm. China is pushing development of the resources in a bid to avoid a 5 billion cm/y gas-supply shortfall from 2015....
The International Energy Agency (IEA) estimates global unconventional-gas reserves – including tight gas, shale gas and CBM – to be around 921 trillion cm, with 98 trillion cm in Europe alone. Global unconventional production will make up one-third of gas-supply growth, says the IEA, with shale gas and CBM from China and Australia important contributor.
3) Nuclear Power Likely To Grow, Royal Society Says, So Nations Should Plan Ahead
Daniel Clery
Despite the ongoing events at the Fukushima nuclear plant in Japan, Britain's Royal Society, for one, believes that a renaissance of nuclear power construction is likely. If so, it says in a report released today, then governments and international bodies need to develop coherent long-term policies that take account of not just nuclear safety but also security, proliferation risk, and managing the whole fuel cycle from cradle to grave. "Spent fuel can no longer be an afterthought and governments worldwide need to face up to this issue," Roger Cashmore, head of the U.K. Atomic Energy Authority and chair of the Royal Society working group that drafted the report, said in a statement.
Some countries, such as Germany and Switzerland, have decided to abandon nuclear power and projections for growth are low in Europe and the United States. But elsewhere enthusiasm remains high. In China, Southeast Asia, and Russia, there are plans for dozens of new plants. The panel estimates that there could be 10 new nuclear nations by 2030.
The panel's first recommendation is that all countries should place their civil nuclear programs under international safeguards run by the International Atomic Energy Agency (IAEA), so that spent fuel cannot be diverted for weapons use. Those countries that already have nuclear weapons should separate their civil and military nuclear programs. To make nuclear technology more easily available to countries without increasing proliferation risk, the report favors having countries that already have nuclear know-how offer cradle-to-grave fuel cycle services to those that don't, so that spent fuel ends up in a country that can safely reprocess or store it. Some countries (the United States and Russia) have offered such services, as well as some companies.
The panel views the trend for nuclear industries to amalgamate into multinational companies as a positive development, bringing more transparency to the industry. It suggests the setting up of a World Nuclear Forum, made up of CEOs and government leaders, to discuss nuclear developments and responsibilities. Spent fuel, the panel says, should be reprocessed only when there is a clear plan for its use and that plan should minimize the amount of separated plutonium. Where plutonium is separated, it should be made into new mixed oxide fuel as soon as possible and reused in reactors designed for the purpose.
Learning the lessons of Fukushima, the panel says that only a minimal amount of spent fuel should be stored near reactors. Centralized stores away from reactors are more secure and, if the fuel must be stored in water, it recommends against packing it too densely. Dry storage is safer in the long run, it adds. But it is the responsibility of governments and the nuclear industry to plan for the final disposal of nuclear waste at the outset. "Fukushima has shown that we cannot be complacent about the safety of nuclear power. However, the same principle must apply to nuclear security and nonproliferation. Both governments and the nuclear industry need to seriously reassess their responsibilities in these areas," Cashmore says.
4) Stephen Doughty: The Wind Is Now Blowing Against Climate Taxes And Carbon Tomfoolery
Perhaps George Osborne’s apparent conversion in Manchester last week, when the Chancellor appeared to reverse climate change policy, is a sign of things to come.
Green taxes were invented in 1996, about a decade after the green lobby and its supporters began to get very excited about man-made climate change.
Since then green taxes have been piled up to the point that they now bring in more than £40 billion a year, much more than enough to cover the shrinking national defence budget.
However all the terrible effects of climate change that we were promised have been delayed. Unless I have missed it, not a single low-lying island in the Indian or Pacific oceans has been swallowed by the supposedly rising sea. The ice cover in Greenland is melting rather less than some publishers would have us believe.
In this country we have more trouble with snow than heatwaves. The scientists who acted as the priesthood of the greenhouse effect have gone quiet since the embarrassing business about the e-mails and the UN’s Intergovernmental Panel on Climate Change has turned out to be less than precise with its evidence.
When was the last time you met anyone who believed in it? Outside, that is, Whitehall, the professional green movement, its student supporters, and the BBC. Growing numbers of people have decided the emperor has no clothes.
So why are we paying £40 billion a year to combat climate change?
Actually, I don’t mind the taxes on petrol or air fares. The Government has to raise money somehow, and if ministers wish to slap green paint over taxation that is a matter voters can think about at election time, when they can also consider whether they want higher or lower taxation.
Taxes have always been collected under false pretences. Income tax was a temporary emergency measure levied to pay for the war against Napoleon. Nobody even pretends National Insurance contributions really pay for people’s health and welfare bills.
I applaud when George Osborne has the honesty to admit that air passenger duty is ‘fundamentally a revenue raising duty.’
But what I do not applaud is the continuing effort to look greener-than-thou by spending vast sums of taxpayers’ money on incredibly expensive and highly impractical green energy while singling out the most productive industries for destructive carbon reduction levies.
The chemical industry – worth £30 million a day to the economy – is under severe pressure and likely to disappear abroad. Meanwhile, there is big money to be made in wind farms, which cause more anger in rural England than new housing estates.
They don’t work when the wind doesn’t blow, as happens in cold snaps when the energy is needed, and they produce power that is often unwanted when it does.
My favourite is a towering windmill stuck beside the M4 motorway with the intention of impressing passing drivers with how green somebody or other is, partly because this one has been shown to cost exactly twice as much to run as the value of the electricity it produces.
Carbon credits that harm industry and the argument over future energy supplies have direct and immediate effect on few people. Electricity and gas bills, on the other hand, do.
So when we learn that one in four families are going to struggle to pay their bills in four years’ time, as Deutsche Bank predicted this week, that is going to concentrate a lot of minds. As are the latest dire unemployment figures.
Politicians have judged there are votes in being green, which is why Mr Cameron made a fuss about putting a wind turbine on his Notting Hill home, and why he posed with the huskies in Norway five years ago calling for more effective taxes to reduce carbon emissions.
Greenery has also provided a playground for LibDem ministers who might otherwise want to get their hands on more serious levers of power.
It could be that the wind is now blowing against green taxation and carbon tomfoolery.
Perhaps Mr Osborne’s apparent conversion in Manchester last week, when the Chancellor appeared to reverse climate change policy by suggesting we let the EU take the lead, is a sign of things to come.
5) Kyoto Protocol Set To End In Durban
Durban is set to be the deathbed of the Kyoto Protocol as climate change negotiators are unlikely to renew it when they descend on South Africa next month for a meeting on its future.
However, Environmental Affairs Minister Edna Molewa said parties to the UN's 17th annual Convention on Climate Change will most likely keep the protocol in place while they seek a new legally binding climate change agreement.
The Kyoto Protocol, which expires in December next year, is an international agreement binding the world's most industrialised nations to reduce their greenhouse emissions by 5% of their 1990 levels.
Addressing the media in Pretoria yesterday, Molewa said a second commitment to the protocol was not likely because countries such as China and India were reluctant to sign without the US, which was not party to the original Kyoto Protocol.
Alf Wills, head of South Africa's climate change negotiating team, said the parties had three options:
To keep the protocol as it is or develop a new one which will be acceptable to the US and other developed countries;
Negotiate a new protocol acceptable to everyone, including the US; or
Reach a deadlock, which will imply the immediate end of the Kyoto Protocol.
"All three options are on the table, but we are likely to keep the Kyoto Protocol for a transitional period while we negotiate a new agreement," Wills said. "We need to respect every country's interest."
6) Walter Russell Mead: The Green Ball And Chain
Environmentalism has been the bane of the Obama administration from the beginning. The Copenhagen summit, the cap and trade fiasco, Solyndra: every time the administration tries to go green, it comes up with egg on its face.
The Obama administration’s environmental issues continue to grow. With the Solyndra failure looming large over the administration’s attempts to create green jobs, other U.S.-backed energy projects are having similar problems. From the Wall Street Journa l:
While Solyndra LLC’s flameout has fueled criticism of federal initiatives to encourage alternative power sources, the solar-panel maker is hardly the only disappointment among U.S.-backed energy programs.
That’s evident in California, which was awarded $4.6 billion by the Energy Department as part of the 2009 Recovery Act far more than any other state to fund programs in energy efficiency and other areas.
A program to install insulation and other energy-saving improvements in homes that received $185.8 million has been hobbled by delays, and a plan to remodel buildings to be more energy-efficient, which received $113 million, has struggled to persuade enough home and building owners to upgrade, according to California officials.
That isn’t all; a Department of Labor program to create green jobs has largely misfired. It has created only 2 percent of the projected jobs and the cost per job created is more than $120,000.
The pattern of failure tells us several things: that the administration’s understanding of green jobs was poorly conceived, and also that the execution was incompetent. These failures are likely to play a significant role in the 2012 campaign because they support an argument that works well with independents. Whether or not you believe in stimulus, Republicans can argue, it is clear that the Obama administration doesn’t know how to create jobs. In the midst of the worst recession in three quarters of a century, it chose to subordinate real job creation to vague and illusory green fantasies.
This is a narrative that damages the administration on some key points. It reinforces the GOP charge that an ‘out of touch’, ‘elite’ administration subordinated the interests of ordinary working Americans to service the whims of Prius-driving gentry liberals. And it suggests that beyond any ideological problems, the untested president and his academy and foundation based appointees are unable to solve real world problems.
A smarter approach would have been to get the economy running well first, then worry about tweaking the machine. It is now too late for that; President Obama will be dragging a green ball and chain behind him in the 2012 race.
7) Australia: Tony Abbott Makes A 'Blood Pledge' To Repeal Carbon Tax After It Passes Lower House
AFTER more than a decade of political argument, the House of Representatives has this morning passed legislation to put a price on carbon, paving the way for Australia's most dramatic economic reform in more than a decade.
After claiming two prime ministers, two opposition leaders and severely wounding the authority of Julia Gillard, a carbon price is now on a clear path to being entrenched in law.
The government's carbon tax package was passed 74 votes to 72, with applause from the government benches as legislation was passed with the support of independents Tony Windsor and Rob Oakeshott, and Greens MP Adam Bandt.
Labor frontbenchers embraced the Prime Minister following the vote, while Coalition MPs jeered and urged Kevin Rudd to congratulate her.
Mr Rudd then kissed Ms Gillard on the cheek and offered his congratulations, to cheers from opposition benches.
Speaking before the final vote, Ms Gillard said future generations would enjoy the benefits of the historic reform.
But as the 18 carbon tax bills head for a vote in the Senate before the end of the year, Tony Abbott gave his “pledge in blood” to dismantle the tax in government.
Ms Gillard said 160 million tonnes of carbon would be cut from the atmosphere by 2020 under her carbon tax.
“You'll be able to see the biggest polluters changing their conduct and behaviour,” Ms Gillard told ABC Radio.
Ms Gillard says Mr Abbott will be unable to dismantle the tax because it would involve taking associated compensation measures from pensioners and families.
But Mr Abbott said he was more determined than ever to axe the carbon price if he became prime minister.
“We will repeal this tax, we will dismantle the bureaucracy associated with it,” Mr Abbott said.
“I am giving you the most definite commitment any politician can give that this tax will go. This is a pledge in blood this tax will go.
“If the bills pass today this will be an act of betrayal on the Australian public. We will repeal the tax, we can repeal the tax, we must repeal the tax.”
The Global Warming Policy Foundation, 1 Carlton House, London SW1Y 5DB
Director: Dr Benny Peiser
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