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« 50 to 1 | Main | Quote of the day »
Thursday
May022013

Lords of misrule

I thought yesterday's Liberum Capital note was very interesting, particularly the suggestion that investors reckon that government energy policy is risible. When one thinks about it, the idea that voters would tolerate the vast spike in energy costs that our political masters seem to want is preposterous.

It's interesting then to see today's House of Lords report on EU energy policy (see here, BBC coverage here). Their lordships have decided that there are two things putting off potential investors: the incorporation of a minimum carbon price into the ETS and the lack of a requirement for a fixed proportion of renewables in the energy mix by 2030.

The calculation seems to be that investors will be enticed in if the public are fleeced sufficiently; big bad capitalists will simply be unable to resist all that easy money. Liberum, on the other hand, seem to have thought things through a little further, asking themselves whether the public will tolerate being fleeced to the extent envisaged in Westminster and Brussels. They conclude, correctly in my opinion, that transfers to big business on this scale will be seen as intolerable.

The difference in opinion between the real world and the political world is rather stark, don't you think?

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Reader Comments (27)

It's the difference between sanity and insanity.

May 2, 2013 at 10:19 AM | Unregistered CommenterJohn Silver

The Westminster bubble is intact and growing in strength. Of course it is the civil servants behind it who are pulling the strings.

May 2, 2013 at 10:23 AM | Registered CommenterPhillip Bratby

If it costs £376 billion by 2030 paid by around 18 million UK households its an average c. £21,000 extra per household budget.

May 2, 2013 at 10:30 AM | Registered CommenterPharos

I have a friend who works in DECC, and he assures me there is no awareness of the absurdity of their energy policy. They are true climate change believers. The only good news is that they are working very hard to get nuclear up and running, but it's too late to be of help now.

Nothing is going to change until the lights begin to go out. Then it's going to get very interesting very quickly, when people realise what's been done to them.

May 2, 2013 at 10:33 AM | Unregistered CommenterStuck-Record

The difference between the Commons and the Lords, 'care in the community' and Rampton secure hospital.

May 2, 2013 at 10:35 AM | Unregistered CommenterAthelstan.

Almost all the political establishment buys into this nonsense. Artificially raising our energy costs may be seen as intolerable - but what can consumers do about it?

Miliband is wedded to it, it's central to Lib Dem policy, and Lord Snooty is too lofty to take voters' pain seriously.

May 2, 2013 at 10:45 AM | Unregistered CommenterJohn Page

British leaders are making some truly bizarre decisions in an effort to reduce carbon dioxide emissions and comply with European renewable electricity mandates. For example, they are converting a coal-fired plant to burn wood chips that are shipped from the United States. A wood burning plant qualifies under the European rules for meeting electricity generation mandates from renewable energy for the purpose of reducing carbon dioxide emissions from energy producing sources. But this move is sheer lunacy for it will increase rather than decrease emissions while increasing the price of electricity to consumers. Yet the British parliament has whole-heartedly embraced the move. Have legislators gone mad?

http://www.instituteforenergyresearch.org/2013/04/30/climate-change-madness-do-the-europeans-know-what-they-are-doing/ (h/t http://tomnelson.blogspot.co.uk/2013/05/us-doubles-estimate-of-shale-oil.html#links)

I think some of our legislators have gone mad, driven insane by the panic over carbon dioxide. A panic wholly unwarranted by observation and analysis of the climate system. Others have not gone mad, at least in the short-term, if sanity is defined in terms of their determined pursuit of their own financial or ideological self-interest.

May 2, 2013 at 10:56 AM | Registered CommenterJohn Shade

Well, if the DECC robots believe stuff like the WMO report that last year was the hottest ever despite the cooling effects of La Niña which goes to show it would have been even hotter without it, summer sea ice in the Arctic is dangerously low, and we are suffering from more droughts, floods and hurricanes than ever (as reported on R4 by R Harrabin with great glee this morning), then they will continue along this path of fleecing us rotten and destroying our economy.

I hope my kids can become economic refugees somewhere else in the world...........

May 2, 2013 at 11:00 AM | Unregistered CommenterGrumpy

It's the difference between those who have to fund their own lives (The People), and people who live out of the public trough (The Party).

May 2, 2013 at 11:10 AM | Unregistered CommenterRick Bradford

" Liberum, on the other hand, seem to have thought things through a little further, asking themselves whether the public will tolerate being fleeced to the extent envisaged in Westminster and Brussels. They conclude, correctly in my opinion, that transfers to big business on this scale will be seen as intolerable" Quite so. So big business isn't going to get into bed with the government until it knows that the - for want of a better word - subsidies are sustainable. Who wants to get involved in a project that has a 40-50 year lifespan, probably might not move into 'profit' until year 30, when the other party might well try and change the terms of the deal half-way through? The PPE - boy researcher - MP route is all very well, but you have to be able to deal properly with people you are expecting to invest a great deal of expertise and money in your project, whatever it is. Changing the deal on an electoral whim is not the way to recruit the people and money you need. Just as trust in practically every British institution has collapsed, so too has it collapsed in the Government. For the simple reason that it behaves so idiotically, run by feckless children as it is, that no man of substance is going to waste his time or money trusting it.

May 2, 2013 at 11:29 AM | Unregistered Commenterbill

John Page 10:45AM...'...but what can consumers do about it?'

How about a mass campaign of non-payment of bills? Or partial payment, with consumers only offering to pay the basic cost and not the subsidies/ 'green' taxes?

May 2, 2013 at 11:36 AM | Unregistered CommenterPhil D

The only way to get energy costs down is to stop using renewables or at least stop paying the subsidies. Rewewables will then stop on their own.

May 2, 2013 at 11:42 AM | Unregistered CommenterJohn Marshall

The inelastic rubber band of price/demand has been abused. It served well while in the elastic range, but has been stretched into the plastic range and is now deformed. Fractures are appearing. I fear it will not return to its former state. Stand back. Get out of the way!

May 2, 2013 at 11:57 AM | Unregistered CommenterRobin Pittwood

Stuck-Record

I have a relative, a senior civil servant, that works in the DECC and is completely sold on CAGW. It's impossible to have a rational conversation with them - "You're not a denier are you?!"

Needless to say, they have next to no knowledge of the science and classifies CO2 as "pollution". They have no ability to put the warming in a historical context beyond the 20th century, for example is baffled when I tell them that we are at a low level of atmospheric CO2 on a geological time scale etc etc.

I wonder if all government departments have civil servants working with such low levels of knowledge and more disturbingly low levels of curiosity. My gut feeling is, that the civil service selects specifically these type of people. They want drones not boat rockers.

May 2, 2013 at 12:03 PM | Unregistered CommenterBuck

Buck said,

I wonder if all government departments have civil servants working with such low levels of knowledge and more disturbingly low levels of curiosity. My gut feeling is, that the civil service selects specifically these type of people.

I work in a company developing a product which requires frequent contact with people at the Environment Agency, on matters such as environmental impact of pollutants in the atmosphere (true pollutants, not CO2). Their lack of knowledge of very basic chemistry concepts is astonishing. They are unable to understand any argument you make. What happens is that you have to hire external consultants who have some credibility with the EA to confirm that what you're telling them is correct. They're like, "I will not sign anything until someone I know I can trust tells me it's ok".

May 2, 2013 at 12:31 PM | Unregistered CommenterPeter B

I hope the iron rule is proven in spades and soon.
AGW hype and rent seeking is costing Americans untold billions in insurance costs.
But that is nothing compared to what you are facing with your power grid.

May 2, 2013 at 1:00 PM | Unregistered Commenterlurker, passing through laughing

May 2, 2013 at 10:45 AM John Page

Lord Snooty's daddy-in-law, Bart., is raking in far too much in subsidies for Snooty to do anything but drink the Kool-Aid.

May 2, 2013 at 1:39 PM | Unregistered CommenterEvil Denier

How strange that exactly the same issue - lack of knowledge - produced the UK Governments re-organisation of Primary Care in the NHS - getting rid of the PCT's who on the whole cost shedloads of money, had no knowledge or training to treat patients and yet told GP's what the could and could not prescribe. The result was the "postcode lottery" we all became very angry about.

I had to deal with these PCT's on a limited but regular basis and I was always frustrated and gobsmacked by the lack of knowledge displayed coupled with the arrogant stance that they were always right.

And yet here we have the DECC - equally sparse of true knowledge but brimming with the arrogance of the truly ignorant but sadly no sign that a "re-organisation" is on the cards.

May 2, 2013 at 1:45 PM | Unregistered CommenterDoug UK

FFS, here in Britain we cry out for a competent department of energy, only devoted to securing plentiful energy at the cheapest price.

What we have been lumbered with, is a department of climate change advocacy - a ministry made up of common purpose numpties and green peace shills working very hard to sabotage British manufacturing and the remnants of the British industrial base.

Blame it mostly on the EU and it's lunatic CO2 emissions policy.

However it must be said and emphasized: in the EU - the British are the most ardent and devoted adherents of the green agenda. For this almost mystical belief in CAGW - culpable all - are our [mainly Oxford] educated numbskull arts graduate politicians. Grounded and fundamental to all of this - the left has turned the educational establishment and all of academia - from primary through to tertiary education - into one big school of global warming.

DECC civil servants - are like most kids fresh from school, in that they do not have the ability to think through aught - that's the idea. The senior positions are held over for true believers in the 'CAGW faith' - you do not get on at the DECC unless you are of common purpose, or are able to 'walk the walk and talk the talk'.

Vote UKIP - scrap the DECC.

May 2, 2013 at 2:42 PM | Unregistered CommenterAthelstan.

Elections have consequences, until you progress so much into tyranny that hey don't. Then God help us!

May 2, 2013 at 3:56 PM | Unregistered CommenterAndres Valencia

Back in the days of the Dept of Energy, I had a colleague who was seconded to the Dept for a while. He couldn't wait to get back to the real world where things could actually get done. Things are far worse nowadays. We are sunk until DECC is scrapped and some engineers are given a chance.

May 2, 2013 at 4:05 PM | Registered CommenterPhillip Bratby

"The difference in opinion between the real world and the political world is rather stark, don't you think?"

Masterful understatement, Mr Montford.

If I generally didn't believe in conspiracy theories, I would say that something is afoot.

May 2, 2013 at 5:13 PM | Unregistered Commentermichael hart

Andres Valencia:

Elections have consequences, until you progress so much into tyranny that [t]hey don't. Then God help us!

I believe He aims to help us before we reach that stage. But it's important we face the fact that would-be tyrants have an interest in this space. Paranoia may overplay the probability; prudence is mindful of the possibility.

May 2, 2013 at 5:32 PM | Registered CommenterRichard Drake

Yesterday the Daily Mail had an article about a survey that showed that lots of people were worried about energy prices but very few were worried about climate change.

Fears over fuel bills surge to record high: But climate change is top concern for just one in 20
http://www.dailymail.co.uk/news/article-2317194/Fears-fuel-bills-surge-record-high-But-climate-change-concern-just-20.html?ito=feeds-newsxml

However, not all the results of the survey would be welcome to sceptics. The article said "the number of people who said they supported renewable energy rose to 82 per cent, 3 per cent up on a year ago. "

On the subject of forms of renewable energy the article said "solar panels were one of the most popular and onshore wind power one of the least."

Energy Secretary Ed Davey said: ‘The findings show energy and climate change issues are at the forefront of people’s minds.

He said it also showed ‘clear public support for the Government to continue in its efforts of developing for low-carbon, home-grown forms of energy’.

May 2, 2013 at 8:11 PM | Unregistered CommenterRoy

Peter B and Doug UK - I work for a company that tries to develop space products and has to deal with the equivalent of DECC viz ESA -the European Space Agency. The reactions our developers get from them is strikingly like your reports. Their lack of knowledge is incredible and is coupled with breath taking arrogance. Do you see a picture building here?.........

May 2, 2013 at 10:05 PM | Unregistered CommenterJackie

If you read pages 153-154 of the autobiography of Sir Fred Hoyle, Home is Where the Wind Blows you will find that Hoyle - and all of the astronomers and astrophysicists that he and Sir Eddington knew - believed the interior of the Sun was mostly iron, until 1946 when Hoyle’s two misleading papers on stellar composition and source of energy were adopted without debate or discussion as cornerstones of the:

1. Standard Solar Model of Hydrogen-filled stars, and the
2. Big Bang Model of Hydrogen-synthesis from nothing at time, t = 0

The Climategate scandal that erupted in 2009 is the direct result of sixty-three years (2009 – 1946 = 63 yrs) of government deception to protect mankind from possible annihilation with energy stored as rest mass in the cores of heavy atoms like U and Pu, some planets like Jupiter, ordinary stars like the Sun, and galaxies like the Milky Way.

That same source of energy - neutron repulsion - is the creator, destroyer and preserver of all atoms, lives and worlds in the solar system.

Oliver K. Manuel
Former NASA Principal
Investigator for Apollo

May 2, 2013 at 10:28 PM | Unregistered CommenterOliver K. Manuel

The cluelessness of government bureaucrats extends way outside the scientific field, believe me. Having dealt with the Department of Media Culture and Sport over many years, a complete lack of knowledge of the world outside their offices appears to be a basic job requirement.

May 3, 2013 at 2:36 AM | Unregistered Commenterartwest

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