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What did they expect?

What did they expect?

My house backs on to a railway line which is now exclusively for passenger trains.  It wasn’t always this way though.  There was a time when the relative peace was broken six times a day by the roar of freight trains heading up the Rhymney Valley.  Their destination was the coal washery at Cwmbargoed, from where they would ferry thousands of tonnes of coal per journey to the power station in Aberthaw and the steel works in Port Talbot.  Aberthaw power station closed at the end of March 2020.  And, on 23 February this year, the last coal train made its way down the valley, taking a last load of coal to Port Talbot.  Of the three, that left Port Talbot steelworks the only one still operating… although, and not for unconnected reasons, Port Talbot’s days were also numbered.

Whether Britain should still have been mining Welsh coal rather depends upon how favourable you are to exporting your carbon emissions to someone else’s country.  After all – and despite expensive experimental attempts at hydrogen steel production – if you want to make virgin steel – for example if you had a plan to build and operate thousands of wind turbines – you have to use coal.  That being the case, the least environmentally harmful approach would be to source it from a huge deposit 25 miles away rather than shipping it thousands of miles from Brazil, China, or Kazakhstan.

This, no doubt, was why the otherwise green-leaning Blair government gave the approval for a vast opencast mine just outside Merthyr Tydfil.  As George Monbiot complained at the time:

“The diggers at Ffos-y-fran, on the outskirts of Merthyr Tydfil, are set to excavate 1,000 acres of land to a depth of 600ft.  There has never been a hole quite like it in Britain, and our government’s climate change policies are about to fall into it.”

…click on the above link to read the rest of the article…

Getting vacancies wrong

Getting vacancies wrong

Like everything else that was shut down in 2020 and 2021, Britain’s job market was broken.  As businesses attempted to reopen, they were faced with a massive labour shortage.  Lorry drivers, for example, had all but disappeared.  Skilled construction workers were also in short supply.  But the biggest shortages were in traditionally low-paid sectors such as social care, retail, and hospitality.

One consequence of this “vacancy crisis,” was that it fed into a misguided neoliberal analysis of the sharp rises in prices following lockdown.  A proportion of the price increases were “monetary inflation” – the result of people spending the excess currency creation used to fund business support and workers’ furlough payments during lockdown.  But the majority of the price rises were simply the manifestation of a global economy attempting to incorporate and overcome broken supply chains.  Nevertheless, economists, journalists, and politicians began regurgitating the myths of the 1970s, and especially the fabled “wage-price spiral” in which higher wages would force prices to rise even further.

In those sectors of the economy where skilled workers were in short supply, wages did rise.  But the majority of vacancies were – and are – in low-skilled sectors where pay has remained depressed.  According to Office for National Statistics data, 814,000 of the total 932,000 current vacancies are in traditionally low-paid services; 401,000 in retail, hospitality and social care.  Nor is that low-pay merely a choice by business owners.  Rather, it is the result of decades of neoliberal austerity which has forced retail, hospitality, and social care businesses to be among the leanest and most cost-conscious in the economy.  Prior to the pandemic, this had the benefit (although not for the workers) of keeping those services cheap – a core purpose of neoliberalism.  But it also meant that, faced by labour shortages for the first time in decades, these businesses simply couldn’t afford higher pay because they were already cut to the bone.

…click on the above link to read the rest…

In Brief: The energy death spiral grows; Another bad omen; Hobsons choice

In Brief: The energy death spiral grows; Another bad omen; Hobsons choice

The energy death spiral grows

Although it is far from obvious, Ofgem – Britain’s energy regulator is supposed to act in the interest of energy consumers.  As the UK government explains:

“The Office of Gas and Electricity Markets (Ofgem) regulates the monopoly companies which run the gas and electricity networks.  It takes decisions on price controls and enforcement, acting in the interests of consumers and helping the industries to achieve environmental improvements.”

This will come as a surprise to the millions of UK households struggling to pay energy bills which are – now state subsidies have been withdrawn – higher this winter than last.  Indeed, we are now entering our third winter of eye-wateringly high energy prices, with no obvious respite in sight… the only consolation being that the closure of Britain’s heavy industries has at least prevented widespread power outages so far.

On the downside though, among the millions of households struggling to pay their bills are thousands – and growing – of households who are in default.  Not least because increased energy costs are hitting just at the point when general inflation has eaten into wages, when the Bank of England has jacked up interest rates (causing rents and mortgage payments to spike) and when governments (national and local) have decided to raise taxes to cover their own excessive debt.

So, what to do about the growing outstanding debt to the energy companies?  A genuinely consumer orientated regulator might tell the energy companies to eat the loss – perhaps taking the hit to shareholder dividends or senior management remuneration.  Alternatively, since this issue isn’t going away any time soon, they might tell government that now is the time to bring an end to this quasi-market farce and take the energy monopolies back into public ownership…

…click on the above link to read the rest…

A small and deceptive word

A small and deceptive word

In a previous post I referred to two “highly seductive and misunderstood words.”  I dealt with one of these several years ago when considering the growing number of things that humans can do in theory but can no longer do in practice.  This applied to highly expensive projects like sending humans to the moon or operating commercial supersonic air travel.  But it also applies to more mundane activities like the once ubiquitous automated car washes.  The point being that whenever an activist, politician or journalist uses words like “ought,” “could,” “should,” and “can,” what they most often mean is “can’t.”

This, in turn, implies an unacknowledged powerlessness.  Because these antonyms are almost always preceded by another deceptive word… “we.”  People on what is broadly considered the political right, for example, will explain that “we ought/could/should…” start fracking the Bowland shale deposits in northern England and/or start drilling the oil deposits west of Shetland and/or hurry the development of new nuclear power stations.  Against this, those who identify as being on the left will claim that this is unnecessary because “we can/ought/should…” accelerate the deployment of wind turbines and solar panels, electric vehicles and charging infrastructure.  I have covered the impossibility of both proposals – broadly, that they are too energy and resource expensive compared to the energy they return to be viable in the real economy – in several previous posts.  But what I want to explore here is just how deceptive the word “we” is, since it should be patently obvious that used in these kinds of context, the word “we” actually means “they” – or more correctly, since nobody knows who “they” are – “someone else.”

…click on the above link to read the rest…

Green spin

Green spin

Concern over the steep rise in the price of electricity this winter has paved the way for rehashing the old misinformation about the relative cost of generation.  So it is that Carbon Tracker – a non-profit which seeks to focus financial investment on non-renewable renewable energy-harvesting technologies (NRREHTs) – reports that electricity bills are far higher than they might have been because they are based on expensive gas generation.  As Andy Verity at the BBC explains:

“The way electricity prices are set has pushed UK household bills up by £7.2bn over two years…  Under existing rules, energy suppliers pay the highest price for wholesale electricity no matter how it is made.

“Gas-fired power stations are the most expensive way to generate electricity, but only make about 40% of all electricity used by UK homes.  That means homes pay over the odds for power generated any other way…”

Taken at face value, this is broadly correct.  But there is a great deal which needs unpacking here.  Most notably, the way in which “green” energy policy has had a negative impact on the wholesale gas market.  Because, while Verity points to the post-lockdown shortages and energy self-sanctioning (he misspells it “Russia’s war in Ukraine”) as the cause of the recent price spikes, these are only proximate triggers.  The deeper cause was environmental policy which drove energy companies out of long-term gas supply deals in favour of the – far more volatile – spot market.  In effect, having been told by the state that your industry is being phased out, why bother with long-term investment?  One result was the closure of the massive Rough storage facility in the North Sea – which the state is now pledged to reopen – which would have provided the buffer to iron out most of the upward spike in gas prices in 2021.

…click on the above link to read the rest…

The age of dissonance

The age of dissonance

As the surplus energy available to the economy declines, so the number of things that we can do in theory but can no longer do in practice will grow.  This is the inverse of the technological efficiencies won in the course of three centuries of industrialisation – the peak of which occurred at some point in the last quarter of the twentieth century.

The two obvious apex technologies were the Anglo-French Concorde – the only supersonic passenger aircraft to operate commercially – and the USA’s Saturn Five rocket and associated technologies which propelled three men at a time to the Moon and back.  We didn’t forget how to do those things, and theoretically we could repeat them given enough time and resources.  But energetically, they are now beyond us – the energy cost of doing them is far greater than any benefits they might offer in return.  The humble automated car wash turns out to be a more mundane technology that is disappearing in the rear-view mirror.  It is simply cheaper to pay someone to hose down a car, or cash-strapped car owners can do it themselves.  And following peak oil in November 2018, and with the ensuing energy crisis – exacerbated by lockdowns and economic warfare – gathering pace, we can expect many more of our supposed technological feats to turn into stranded assets.

Another technology – in the broadest sense of the word – that looks set to go the way of the dodo is the once ubiquitous shopping high street.  The once prestigious department stores were already in freefall before SARs-CoV-2 began its world tour.  But two years of lockdowns have devastated retail businesses of all kinds, leaving shuttered-up shopfronts along every high street in the country, with the Welsh city of Newport claiming the record for having a third of its former shops empty.

…click on the above link to read the rest of the article…

When they say money, think energy

When they say money, think energy

The Indian government ruffled a few feathers at the COP this morning, by raising the thorny question of the £722bn they were supposed to receive to aid their transition away from fossil fuels.  Because, when all is said and done, the proposed transition is all about money.  Decommissioning the old fossil fuel infrastructure will not happen unless states and private investors stump up sufficient cash to pay for the materials, equipment and workforce required to do the job.  And at the same time, an entirely different group of workers, materials and equipment will have to be funded to build out the new, bright green infrastructure.

To aid things along, states will also use legislation to force the hands of businesses and households.  The current UK government’s decision to legislate a ban on new internal combustion engine cars from 2030, for example, has forced the car industry to switch investment toward EVs.  The ban on coal power plants from 2025 may provide the more realistic example, however, because of its unforeseen consequences – such as companies closing power stations early to save on maintenance, and the threat to energy security which has now emerged.  Nevertheless, it is some combination of legislation and money which will drive the process.

The same can be said, of course, for any campaigning/political issue.  You can count on one hand the number of campaigns which have called for less state spending and the revoking of laws.  Most often, new law and additional spending underpins demand for reform, while failing to spend and/or legislate is among the biggest sins a government can make.

…click on the above link to read the rest of the article…

Closer to the edge

Closer to the edge

There may well be worse to come.  With the end of the various government support schemes, redundancies have shot up once more.  According to the BBC:Earlier this year when the establishment media was running fear stories about excess savings, the opening up of the economy was predicted to result in a massive consumer boom.  It didn’t happen.  Rather, as happened in the summer of 2020, people emerged from house arrest in need of a haircut, some new – mostly larger – clothing, and a thirst for a pint of beer down the pub.  Once these desires had been sated, most returned to their homes and continued with lockdown spending habits that have now become ingrained.  Not least because, while a small minority at the top may have accumulated £125bn in savings since the first lockdown, the majority of us had been running up even more debt.  The people with savings were hanging onto them while the crisis continued.  Everyone else was unable to consume anyway.  And so, after a brief rally in July, growth fell in August.  Today the UK economy is officially still 0.8 percent smaller than at the start of the pandemic.

“The number of businesses that failed in England and Wales last month was the largest since the Covid pandemic began.  Company insolvencies in September totalled 1,446, increasing from 1,349 in August and 56% higher than the same month last year, data from the Insolvency Service shows…

“The Bank of England earlier this month said one third of small businesses in the UK are classed as ‘highly indebted’, where their debt levels are more than 10 times their cash balances.”

…click on the above link to read the rest of the article…

Is this peak gas?

Is this peak gas?

The recent, spectacular increase in the price of gas has created a sense of crisis not seen outside the financial sector since the early 1980s.  In Europe in general and the UK in particular, it has begun to expose the folly of having an economy entirely dependent upon imports; including imports of the energy that powers everything we do.  The conceit, of course, was that because we have gone much further than anyone else in deploying non-renewable renewable energy-harvesting technologies (NRREHTs) we were somehow less dependent on fossil fuels when events this week show that we are, in fact, more dependent than ever.

The deeper crisis though, is economic because without growing energy we cannot have a growing economy.  This is obscured to some extent by GDP figures which count the movement of bits in bank computers as real economic growth when in reality, they merely add a new mountain of unrepayable debt to an already massive mountain of unrepayable debt.  In the real world where the rest of us live, nothing gets done unless there is sufficient surplus energy to power it.

Setting aside for a moment the environmental imperative to cease polluting the planet, if it were possible to stabilise our fossil fuel consumption at 2019 levels, then we have some 50 years’ worth of accessible (proven reserves) of oil; 53 years of gas; and 115 years of coal.  But flatlining is something that only happens in recessions.  In the economy that we have come to take for granted, year-on-year growth in energy consumption is the precondition for improvements in prosperity:

This suggests that we have far less than 50 years before we run out of oil and gas if we insist on continuing to grow the rate at which we consume it…

…click on the above link to read the rest of the article…

This isn’t going to work

This isn’t going to work

If an energy policy sounds too good to be true, that is usually because it is.  Take, for example, just one of the jigsaw pieces in current policy for reaching net zero by 2050: electric car batteries.  Jillian Ambrose – who should know better – at the Guardian reports this weekend that:

“Ofgem plans to make it easier for electric vehicle drivers to sell the energy stored in their car batteries back to power grid as part of a move to help make the switch away from fossil fuel cars more affordable.

“Under the plan put forward by Great Britain’s energy regulator, electric vehicle drivers could earn money by effectively transforming their cars into mobile power plants by releasing power back to the energy network when demand on the electricity grid reaches a peak.

“If enough drivers take up the chance to make money from their car batteries by using vehicle-to-grid technology, the UK could avoid investing in new power plants with the equivalent generation capacity of up to 10 large nuclear power stations.”

This is wishful thinking on steroids.  While it is true that if all of the UK’s 37 million cars were replaced with battery electric cars, and assuming that all were fitted with a mid-range – 98KW -battery, they could provide 3,100GW of power to the grid – just shy of the 3,200GW from 10 nuclear plants – they could only do it for about an hour.  A battery is not a source of power, it is merely a storage medium.  For comparison, a recent report the Manhattan Institute finds that:

…click on the above link to read the rest of the article…

Exergy-driven crisis

Exergy-driven crisis

Media has little in the way of memory and the rest of us struggle to remember much of what happened more than a week ago.  And so, the narratives we use in an attempt to make sense of the rapidly changing world we are living in, tend to revolve around short-term tribal talking points.  Take, for example, the narrative about Britain having a shortage of lorry drivers.  It tends to be a very short narrative: Britain left the European Union, European lorry drivers went home, Britain has a lorry driver shortage.  Ergo “Brexit Bad!”  Unfortunately, there are more holes than a Swiss cheese in this narrative.  To begin with, driver shortages Across Europe were observable to anyone paying attention more than a decade ago:

“The study provides a concise overview of the road freight transport sector, in the light of the structural issue of qualified driver shortage. In particular, this study analyses the multiplicity of factors affecting labour supply and demand, by taking into due consideration also the impacts of the current EU legislation and the effects of the present economic downturn.”

Since 2009 was before the 2016 Brexit referendum, the 2009 lorry driver shortage could not logically have been the result of Brexit.  Moreover, lorry driver shortages across Europe were sufficient that a Franco-German inspired change of regulation – the so-called “Macron Package” (which requires drivers to use hotels overnight and to return home every eight weeks) – was introduced to halt the impact of cheap and unregulated Eastern European drivers on the road haulage industry of Western Europe; this was not a solely British problem.

The driver shortage doesn’t end there though.  According to the International Road Transport Union (IRU), driver shortages are a truly global problem which governments and media have turned a blind eye to for years…

…click on the above link to read the rest of the article…

A rising tide sinks all boats… eventually

A rising tide sinks all boats… eventually

Have you heard that ice cream causes murder or that global warming has led to an increase in piracy? Apparently in Maine, consuming more margarine leads to more divorces, while increased US spending on science, space and technology results in increases in suicides by hanging, strangulation and suffocation.  Actually, these are examples of spurious or false correlations – entirely unrelated things whose data appear to suggest a causal relationship.  And in these examples, the outcome is little more damaging than a few humorous media articles and a couple of books.

False correlations, however, run deep.  And some can have a pernicious impact on large numbers of us.  Consider for example, the well-worn neoliberal saying that “a rising tide raises all boats.”  It is based on two mistaken premises.  First, that employment is always a route from poverty to prosperity; and second, that an increase in overall employment must benefit everyone.  And it is for these reasons that continued economic growth is the altar upon which all else must be sacrificed.

The evidence for the benefits of economic growth for all is far more nuanced.  In pre-industrial economies where most people worked the land, there is little evidence that much growth occurred beyond that allowed by the ups and downs of the annual harvest.  Indeed, it took the economies of the British Isles until the eighteenth century to re-reach the technological level of the Roman Empire; so what economic growth their had been amounted to a catching up following a major economic collapse.  And even during that period of lethargic growth, various plagues and famines – including the catastrophic Black Death in the fourteenth century – rapidly threw economies into reverse.

…click on the above link to read the rest of the article…

The only thing worse than an energy collapse

The only thing worse than an energy collapse

We learned recently that one of the last coal power stations in the UK is bidding to become the first commercial nuclear fusion plant on Earth.  The news should be taken with a large pinch of salt… nuclear fusion has been 25 years in the future since before I was born and it will likely still be 25 years in the future the day after I die.  Nevertheless, nuclear fusion reactions have been generated; albeit for just a few seconds and at a massive energy cost.  And the physicists and engineers working on the multinational (International Thermonuclear Experimental Reactor) ITER project in the south of France have something of a spring in their step just now; claiming that:

“ITER will be the first fusion device to produce net energy. ITER will be the first fusion device to maintain fusion for long periods of time. And ITER will be the first fusion device to test the integrated technologies, materials, and physics regimes necessary for the commercial production of fusion-based electricity.”

It is worth noting that ITER is an experiment rather than a working power plant.   And just as well; because even its proponents point to an energy return on investment (EROI) of just 10:1 – about half of the return from a wind turbine.  Even this may be a slight of hand, according to Steven Krivit at New Energy Times:

“Widespread false and exaggerated claims made by leaders in the fusion community have caused many people and institutions to convey the incorrect claims to a wide cross-section of the general public. Below, I’ve listed four of several hundred examples I’ve located. Each of these statements, through no fault of the authors, is fundamentally wrong:

…click on the above link to read the rest of the article…

Mere statistics

Mere statistics

For the last half-century, then, we have experienced what might be called “relative energy poverty.”  This is evident in this recollection from Guardian columnist Ian Jack:

…click on the above link to read the rest of the article…

The everything death spiral

The everything death spiral

Inflation is back in the establishment media headlines, as prices are rising across the economy.  But rather like generals fighting the last war, business and economic journalists are dusting off models of inflation last used in the early 1980s.  The idea, for example, that “inflation is always a monetary phenomenon” worked well as a description of the crises of the 1970s when the class structure was flatter and simpler and when planet Earth still contained massive volumes of untapped resources; including decent reserves of energy-cheap energy.

Throughout the post-war years – and largely as a consequence of energy-cheap energy – the workers’ share of the profits from manufacturing and trade had risen.  Various national versions of America’s suburban dream became available to skilled and semi-skilled workers across the developed states.  Where the wartime generation rented small terraced houses, the post-war generation bought roomy semi-detached homes.  Where the wartime generation walked to work, the post-war generation drove a car or rode a motorbike.  Where the wartime generation holidayed at a nearby seaside town, the post war generation took package holidays in Mediterranean resorts.

Insofar as it existed at all, unemployment was a choice or a “frictional” period of a few weeks as workers moved from one employer to another.  Only those few with complex problems, such as disabled people, people with mental illness or people with drug or alcohol dependency tended to be long-term unemployed.  And the lack of a pool of unemployed labour empowered trade unions by undermining management’s ability to threaten the sack.  If workers were fired they could easily find work elsewhere.  And firms that sacked workers often struggled to find replacements.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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