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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…

Our Predicament Re-stated

Our Predicament Re-stated

There is a meme doing the rounds on social media… a picture of a vegetable patch, captioned “the time is coming when only those who know how to grow food will survive.”  The idea being that, as our complex civilisation breaks down, we will be forced to return to a far simpler economy, where most people revert to roles within agriculture and food production.  As with most memes, it functions as a thought-stopper… one which hides the obvious reality – backed by millennia of experience – that, in fact, “it will be the people who know how to force others to grow food,” who will be the real winners in the post-industrial economy.

At a deeper level though, the meme is an example of the way we delude ourselves into believing that a positive version of collapse – usually in the form of managed de-growth – is possible, and that those promoting such a view will be the ones who inherit whatever benefits it offers.  History says otherwise, of course.  Life in pre-industrial civilisations was mostly short, brutal, and often marred with chronic pain.  The best most people could hope for was life in an institutional version of slavery, where at least serfdom laid some nominal responsibilities on the clergy and the nobility who ruled over them.  And again, it was those with the wherewithal to protect and/or steal food by force who got to rule and to enjoy the few luxuries on offer.

Not that most of those promoting some version of the “green” techno-psychotic vision of a future of wind turbines and electric cars are likely to fare any better.  Sure, the WEF neofascists and their politician acolytes are currently making a play to cling on to power as industrial civilisation collapses…

…click on the above link to read the rest…

Why Just Stop Oil will win

Why Just Stop Oil will win

The billionaire-funded group is an offshoot of Extinction Rebellion, and as the name suggests, they have just one aim; to see the UK stop using oil entirely.  Although, tellingly, the one thing the group seem determine to avoid disrupting is the flow of oil from Britain’s handful of remaining oil refineries… something which would serve to emphasise just how dependent a complex industrial economy like the UK is upon a steady flow of oil and oil products.

For the most part, opposition to Just Stop Oil has focussed on the disruptive nature of their protests, which involve either blocking roads or disrupting the sporting events enjoyed by people who are largely powerless to do anything about energy policy.  Although perhaps the hope is that if they piss-off enough ordinary people, they will go out and vote for politicians who want to ban oil.  But even in the unlikely event that people respond in this way, the bigger problem is not that the political class doesn’t listen, but that the political class has already consumed rather too much of the Just Stop Oil Kool-Aid.  Indeed, the man being touted as Britain’s next Prime Minister has pledged to make a rapid transition to the utopian net zero, including a pledge to end any further oil and gas extraction in the North Sea.

…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…

Tim Watkins: Anatomy of the Crisis

Tim Watkins: Anatomy of the Crisis

Welcome to the oil death spiral

Welcome to the oil death spiral

There is something deeply tragic about watching people who would be dead within a fortnight without oil nevertheless calling for oil – and fossil fuels more broadly – to be banned immediately.  It is possible, of course, that these people believe that food grows inside supermarkets or that the chemicals used to provide clean drinking water can be beamed to the waterworks using Star Trek technology.  The hard reality though, is that every aspect of modern living – even for those of us surviving on the margins – depends upon oil… and not just any old oil.  The workhorse behind the modern, hi-tech western economies is the roughly 30 percent fraction of an average barrel of oil called diesel.

Take a look around the room where you are reading this.  Every item your eyes land upon was, at some point in its life, transported on a truck – if you are in the UK, a large part of it will have arrived on a ship from Asia too.  Almost all of those trucks used diesel as a fuel.  Some smaller trucks and vans may have used petrol (gasoline) and an even smaller number may have been electric… but only the small ones – you cannot run a large semi using batteries (at least, not if you want to leave some space for cargo).

Take another look around the room for anything made from or with plastic, or anything which is painted or dyed.  These, too required oil in their manufacture.  Almost everything made of metal or requiring metal as a component began life in the bucket of a diesel-powered crane, which loaded it as an ore onto a diesel-powered mining truck, which delivered it to a fossil fuel-powered grinding machine which, in turn moved the crushed ore to a fossil fuel (coal or gas)-powered smelter.

…click on the above link to read the rest…

Central banks are stealing underpants

Central banks are stealing underpants

Let’s talk about supply shocks.  Cast your mind back to the beginning of March 2020.  Remember how everyone panic bought pasta and toilet paper?  Except that it didn’t really happen – at least on a large scale.  What happened was, in their usual underhand way, the establishment media paid supermarket managers to hide the toilet rolls just out of shot while they photographed the empty shelves.  And then there was that time when the photographer got one of his mates to load a shopping trolley with multi-packs of toilet rolls to give the impression that this was commonplace.  But there were shortages.  Not from panic buying, but simply from the additional demand as we all added one or two extra items to our weekly shop.  In a just-in-time supply system, that is all it takes to create a shortage.

There was more though.  When lockdown began, there was a massive switch from what we might call the wholesale supply chain into the – usually much smaller – retail supply chain, as big consumers like schools, offices, factories, hotels and restaurants dramatically cut consumption even as a newly created army of homeworkers sought to increase theirs.  For example, most eggs would previously have been consumed in the wholesale sector, where they are packaged in cartons of thirty or more.  In the retail sector, eggs come mostly in half-dozen and dozen cartons.  So that, at the beginning of lockdown there was an egg shortage because of the shortage of egg cartons.  Toilet paper was affected in a similar way as demand for the large, wholesale rolls used in offices and factories slumped even as demand for household size rolls rocketed.

…click on the above link to read the rest…

In Brief: OPEC and out, Prices up – inflation down, Constructive ambiguity, The essential difference, Pet cemetery, Another fuel

In Brief: OPEC and out, Prices up – inflation down, Constructive ambiguity, The essential difference, Pet cemetery, Another fuel

OPEC and out

The political fallout from the OPEC+ decision to cut its oil production target by two million barrels a day – which would leave the world economy around six million barrels a day short of its pre-pandemic peak – is sufficient to push us closer to collapse.  The Biden administration, who optimistically believed the President had secured a 200-million-barrel deal with the Saudis to replenish the USA’s strategic reserve, have treated the announcement as tantamount to a declaration of war.  Although there is no law of physics that says oil producing states have to provide the west with cheap oil.

The decision is yet another Western own goal in an economic war that the west is clearly losing.  It was the Biden administration’s decision to refuse new licenses for US domestic production which, despite depletion, could still fill the gap left by OPEC+ cuts (although the USA – like the UK – still needs to import heavy oil).  It was also their decision to empty the strategic reserve, which is meant for dire emergencies, solely to keep pump prices down ahead of next month’s mid-term elections.  Elections that Biden’s team may well lose, as Michael Shellenberger reminded Americans this week, the situation:

“… poses political risks for Democrats who, in the spring of 2020, killed a proposal by President Donald Trump to replenish the SPR with oil from American producers, not OPEC+ ones, and at a price of $24 a barrel, not the $80 a barrel that the Biden White House promised to OPEC+. At the time, Trump was seeking to stabilize the American oil industry after the Covid-19 pandemic massively reduced oil demand…

…click on the above link to read the rest…

Since when did banks produce energy?

Since when did banks produce energy?

It takes a special kind of cynical self-interest to make people pay twice for something they already cannot afford, while claiming you are doing them a favour.  This though, is the energy price relief package announced by Liz Truss yesterday.  The package plays that old political card of being not quite as bad as it might otherwise have been, while still being a lot worse than it was.

Politically, the announcement confirms a great deal of what we suspected.  In recent years there has been a growing belief that the Versailles-on-Thames technocracy pulls the strings and that incoming prime ministers are simply given their script on arrival in 10 Downing Street – this is born out by an energy package – drawn up by technocrats over the last six weeks – which is wholly at odds with Truss’s policy announcements during her leadership campaign.  The announcement also demonstrates that despite her third-rate tribute act, Truss is no Margaret Thatcher, nor even the economic liberal that she claims… because a true libertarian – and likely Saint Margaret herself – would have allowed the energy companies to go bust rather than ignore the inflationary impact of state intervention… so now we know.

The package itself involves capping the average energy bill at £2,500 for the next two years, rather than the immediate rise to £3,549 and the anticipated rise above £6,000 in 2023.  There is also a reduction on the regressive standing charge for electricity as the various green levies are removed.  A reduction in VAT is also expected in future, and the national £400 bill reduction, together with the £650 for people on low incomes remains and may be extended next year.

…click on the above link to read the rest…

In Brief: Trading safety, An inflection point, The crisis of under-consumption, A reign of decline

In Brief: Trading safety, An inflection point, The crisis of under-consumption, A reign of decline

Trading safety

Within the inner sanctum of one of the world’s oldest and most esteemed universities, an ageing professor sits in a battered leather armchair.  Oblivious to the day-to-day sensations within the room – the slow tick and tock of an antique grandfather clock, the shimmering particles of dust caught in the beam of sunlight making its way through the sash window, or the odour of the worn, dusty and tea-stained carpet – our professor meditates upon the deeper mysteries of the universe.  In the adjacent reception sits a dragon secretary, whose main role in life is to guard the inner sanctum and to ensure that none of the mundane workings of a modern university be allowed to disturb the professor’s haven of tranquillity.

After three decades of neoliberal governments turning universities from bastions of knowledge and inquiry into the individual units of a cargo cult-based Ponzi scheme, this vision of a university may be but a reflection of a lost past.  It is, however, a metaphor for the way in which the human brain works – just like the dragon secretary – to prevent any of the millions of pieces of data that flood in through the senses from disturbing peace of mind.

When the mechanism – which psychologists call the “Affective Signalling System,” which causes us to seek pleasure and avoid danger – works properly, any sudden change in the environment will be allowed to enter the conscious mind.  This is a safety mechanism wired in by ancestors who needed to know if that rustle in the grass or snapping of a twig might indicate the presence of a predator hungry for a hominid meal.  And even within that tranquil inner sanctum, the odds are that our professor will notice immediately if the old grandfather clock stops ticking.

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

Nobody could have seen it coming

Nobody could have seen it coming

Eighteen months ago, the UK average annual combined gas and electricity bill was £1,287.  Later this week, we expect to learn that it will rise to £3,582 in October and to £4,266 in January 2023.  Not, in reality, that anybody is going to pay that amount.  All but those at the very top of the income ladder will instead cut back on energy use, with those at the bottom forced to self-disconnect.  The problem is far worse for business users, who are not “protected” by the price “cap” imposed by the regulator.  Energy is often the third largest cost – after wages and taxes – to businesses which have already been struggling with higher input and debt-servicing costs.  What this is pointing to is a major affordability crisis this winter, with growing concerns for public health and the likelihood of a recessionary wave of business insolvencies.

As with the 2008 crash, the Versailles-on-Thames establishment are keen to point out that “nobody could have seen it coming.”  After all, “Putin’s invasion of Ukraine,” coming just as the economy was staggering out of a two-year pandemic – itself arriving just months after the UK finalised Brexit – amounts to a combination of events which would have been considered outlandish in a work of fiction…  except that a work of partial fiction – a docudrama – accurately set out the main causes of the UK’s current energy woes eighteen years ago.

In 2003, BBC programme makers began work on a series called “If… ,” which aimed to explore the future crises which required political leaders to act immediately, using drama to make the point.  The three series, which were broadcast between March 2004 and May 2006, tackled issues like the impact of obesity on public health, the growing disparity between rich and poor, and intergenerational conflict between the boomers and millennials…

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

Net zero is dead – so what now?

Net zero is dead – so what now?

There is a deep irony that Europe’s wind turbine factories were among the first to close in the face of our growing energy crisis.  Nevertheless, it goes a long way to demonstrating the fundamental flaw in the net zero project – while the harvested energy of the wind may be renewable, the technologies that do the harvesting are not.  Indeed, these supposedly “green” technologies depend upon complex global supply chains powered by fossil fuels at every stage of their manufacture, transportation, deployment, maintenance, and decommissioning.  But that inconvenient truth was never allowed to get in the way of the technocratic net zero fantasy – aka “the great reset,” “the green new deal,” or “the fourth industrial revolution.”

It wasn’t, you see, just us who were “energy blind.”  Indeed, those at the bottom of the income ladder tend to be more aware of the importance of energy – including having enough calories to ward off hunger – than the technocrats and elites at the top of the pyramid, who tend to believe that they are perched up in the clouds solely due to their own efforts, rather than to having burned their way through a mountain of coal and an ocean of oil to generate their theoretical wealth.  And so, they sold us this children’s story about how complexity and science don’t really matter, and that so long as we all wish hard enough, we could replace all of the coal, gas and oil with sunlight, wind and pixie dust.  And in doing so, nothing would really change, and we would all own nothing but still live happily ever after.

…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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