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When the greenwash peels
Among the biggest confidence tricks used by the Green New Great Reset crowd was the sale of “renewable electricity” to the virtue signalling middle classes. The con ought to have been easy enough to debunk. After all, there is only the one wire which connects your house to the Grid. And when you switch to a “green” electricity supplier, the engineers do not come around to fit a separate renewable energy cable. The self-identified “educated class” though, turn out to be not quite as bright as they would have us believe. As Anna Tims and Miles Brignall at the Guardian report:
“Households on green energy tariffs who assumed they would be unaffected by soaring gas prices have been shocked to be told their electricity bills are rising, despite them being signed up to a renewable supply.
“Suzanne Taylor has been told that her fixed daytime tariff with the renewable energy supplier So will double from 16p to 32p a unit if she renews it this month. ‘So is blaming the current energy crisis,’ she says. ‘Its website says that 100% of its electricity is supplied from renewable sources so why would it be affected by gas prices?’”
In fact, wind power – the UK’s main renewable source – accounts for less than a quarter of the electricity we consume. In an exceptionally good month, wind may be has high as 31.5 percent of our electricity, but in a bad month this can fall as low as 11 percent. Solar provides at best some seven percent, and controversial biofuel – which includes the non-renewable forest consumption at Drax – provides up to eight percent. Nuclear is the main zero-carbon source, providing around 15 percent. But with all but two of the UK’s coal plants now closed, and the remaining two earmarked for decommissioning in 2024, gas is the only source available to us to balance the intermittency of wind – providing anywhere from a third to half of our electricity.
While the corporations that own the UK’s wind farms benefit from legislation that obliges the Grid to buy their electricity first, consumers are on the hook for the expensive gas required to fill the intermittency gap between supply and demand. As Tims and Brignall explain:
“Campaigners have warned that people could be misled by sales talk that fails to reflect the complexity of the green energy market.
“’Essentially, you should consider your electricity to have the same carbon footprint as everyone else’s no matter what tariff you are on,’ says Josie Wexler, a researcher at Ethical Consumer. ‘Ofgem [the energy regulator] should be forcing companies to be much more honest about what ‘100% renewable’ really means’.”
Those who signed on for what was sold as “100 percent renewable electricity” are waking up to another nasty shock. So-called “green energy” is not subject to the energy price cap which provides a degree of protection to the majority of households on ordinary packages:
“As customers are finding to their cost, some of the specialists are not covered by Ofgem’s price cap on variable tariffs. Ecotricity, Good Energy and Green Energy have a permanent exemption because their variable deals are ones that customers have chosen to be on, and because they support the generation of renewable energy.
“While the price cap means a typical unit price for electricity of 21p a kWh, Good Energy and Ecotricity’s are set are about 34p…”
There was, of course, only one way in which the corporate deployment of non-renewable renewable energy-harvesting technologies (NRREHTs) could lower our collective carbon footprint – by making electricity so expensive that only the rich could afford to use it. Now that the price of fossil fuels – which NRREHTs depend upon at every stage of their manufacture, transportation, deployment and maintenance – is spiralling upward, the true cost is revealed – eco-socialism for the corporate elite, eco-austerity for everyone else.
What an ancient Sufi philosopher might have said about peak oil demand
Among my favourite stories attributed to the twelfth century Sufi philosopher Mullah Nasruddin, is the one where he is being plagued by a group of children begging for food or money. In frustration and annoyance, Mullah Nasruddin turns to the children and says, “if you hurry, they are giving away sweets at the town hall.” With this, the children run away in the direction of the town hall. But moments later, Mullah Nasruddin begins running after them. When Mullah Nasruddin’s companion catches up with him, he asks, “why are you following them? You made up that story about them giving away sweets.” To which Mullah Nasruddin replies, “yes. But it might be true…”
Another way of expressing this is, “be careful about believing your own bullshit.” It is a warning that the senior management at the International Energy Agency would do well to pay heed to. Because they have been peddling the fake “peak oil demand” narrative harder than any organisation on Earth.
The unevidenced idea behind peak oil demand is that as various economic processes are electrified, and as people exchange petrol and diesel cars for electric ones, global demand for oil will fall so rapidly that supply will exceed demand. For this reason, investment will switch from fossil fuels to renewable technologies, causing demand to fall even further. Eventually, a full transition away from fossil fuels will be achieved, thereby saving the planet from climate change.
As fairy stories go, it is a reasonably pleasant one. But it bears no resemblance to our fossil carbon-fed global economy as it emerges from lockdown. Demand for fossil fuels in general, and oil in particular, is as high – and growing – as it has ever been. And as national economies begin to emerge from the Covid pandemic, supply which was lost and investment which didn’t take place over the past two years, a huge gap has opened up between the supply of oil that we were supposed to need and the missing supply of oil that the global economy demands. As Irina Slav at Oil Price reports:
“The International Energy Agency is looking for 200 million barrels of oil. The crude has not been displaced, it seems. Rather, there is a 200-million-barrel gap between the agency’s own global inventory calculations and what it observed in the global oil supply.
“Per a Bloomberg report, the IEA had calculated that, based on certain supply and demand assumptions, global oil stocks last year should have declined by 400 million barrels. Instead, they declined by 600 million barrels…
“Tightening global supply has been identified by analysts as the main cause of the latest oil price rally, coupled with strong demand. This is not the first time the IEA has underestimated the strength of oil demand.
“One recent example of this underestimation occurred last year when it released its Road Map to Net Zero, in which the agency called for the immediate suspension of all new oil and gas exploration. Months later, the IEA was calling for more oil and gas investments.”
The IEA is far from the only organisation that has seriously deluded itself about the possibility of running a fossil fuel economy without fossil fuels. In the UK, our entire government is running headlong into an economic collapse by prematurely ending fossil fuel extraction and use before its preferred NRREHTs have even made it off the laboratory test bench. Nevertheless, the reality of our predicament – which is also seen in the massive hikes in gas prices – is that we have burned our way through all of the cheap and easy fossil fuel deposits and are increasingly dependent upon the expensive and difficult remainders.
It won’t be a transition to “green technologies” which causes demand for fossil fuels to fall. Rather it will be prices spiralling upward to the point that only the global rich can afford them. It is peak oil demand of a kind… but not the one they’ve been dreaming of.
How inflation really works
Among the biggest – and largely unseen – political problems of the post-neoliberal economies that are emerging out of the pandemic, is what we might call the tyranny of averages. In an economy in which the distance between rich and poor is not too great, talking about an average wage or an average standard of living may broadly cover most of the bell curve. But in an economy as unequal as ours has been allowed to become, average figures serve to obscure more than they reveal.
Take this week’s inflation figures, which have been largely driven up by essential items like energy, fuel and food. As Robert Plummer at the BBC reported yesterday:
“Prices have gone up at their fastest rate in nearly 30 years – but there is worse to come, experts have warned. Soaring food costs and the energy bill crisis drove inflation to 5.4% in the 12 months to December, up from 5.1% the month before, in another blow to struggling families.
“The last time inflation was higher was in March 1992, when it was 7.1%. And with gas and electricity costs set to rise further in the spring, analysts predict it will reach that level again.”
We have become so used to this lazy form of reporting – simply rehashing the press release – that we seldom question what these numbers might mean in the real world; and particularly for those at the bottom of the economic heap. This time though, author Jack Monroe, who once struggled to feed herself and her son on just £10 a week in the austerity years following the 2008 crash, did some real journalism, by checking how much the essential foods that poorer people have to live on have risen in price since last year. I would urge readers to read the entire piece, but here are a few of the highlights that the establishment media failed to notice:
“This time last year, the cheapest pasta in my local supermarket (one of the Big Four), was 29p for 500g. Today it’s 70p. That’s a 141% price increase as it hits the poorest and most vulnerable households.
“This time last year, the cheapest rice at the same supermarket was 45p for a kilogram bag. Today it’s £1 for 500g. That’s a 344% price increase as it hits the poorest and most vulnerable households…
“And just to add:
- an upmarket ready meal range was £7.50 ten years ago, and is still £7.50 today.
- a high-end stores ‘Dine In For Two For £10’ has been £10 for as long as I can remember.
- my local supermarket had 400+ items in their value range, it’s now 91 (and counting down)…
“The system by which we measure the impact of inflation is fundamentally flawed – it completely ignores the reality and the REAL price rises for people on minimum wages, zero hour contracts, food bank clients, and millions more.”
In short, the headline inflation figures completely miss the much faster rate at which the price of essentials is rising in comparison to the discretionary items that wealthier consumers buy. The bigger economic problem here is that while most of us are going to have to switch spending from discretionary to essential items as prices increase, most of us also work in the discretionary sectors of the economy where spending is going to have to decrease. Hence we face the double whammy of rising prices and unemployment… or “stagflation.”
Which came first, the money or the price?
In an otherwise well-argued presentation about rising energy prices, Neil McCoy-Ward asserts that the reason that gas prices have increased is because of all the new currency that the government has created. This is stock Austrian School nonsense based on a false negative correlation between employment and prices. The belief is that governments print money, which is then used to pay workers. Workers then spend the additional money, causing prices to rise. So if McCoy-Ward is correct, too many of us used our furlough money to buy gas last summer, driving prices up to record highs this autumn.
If this sounds like BS, it is because it is. The increased prices – which are not going away anytime soon – are the result of a combination of factors:
- the large, cheap and easy gas fields are in decline
- short-term pandemic and long-term climate policies have deterred investment in opening new gas deposits
- competition for gas as the global economy emerges from pandemic disruption is far greater than two years ago
- The closure of coal power stations, the failure to deploy new nuclear and the worldwide adoption of non-renewable renewable energy-harvesting technologies which depend upon gas for back-up have all driven global demand to new highs
- Unlike oil, gas is expensive to transport by sea, leaving regions like Western Europe vulnerable to falling supply from Russia and the North Sea
- Loss of storage facilities have left Europe – and especially the UK – vulnerable to short-term volatility in the gas markets.
Note that none of these factors require that more of us – businesses and households – have to have been buying more gas prior to the price increase. Perhaps the best we can say is that the people responsible for setting the retail price of gas may have based their decisions on the assumption that there will be enough currency in circulation for us to pay. Although it is more likely that most households – and many businesses – will respond to higher prices by cutting back on use.
The idea that the money comes first seems to be based on events in Germany in 1923-24 when – largely as a spite to the French – the German government deliberately slashed the value of its currency in order to meet the nominal cost of war reparations while only paying a tiny fraction of the true value. The inflation of the 1970s – which was in part due to America’s deficit funding of the Vietnam War – is also held out as an example of how state spending causes inflation.
It is worth, however, contrasting these examples with the impact of the Marshall Aid funding of Western Europe and Japan in the aftermath of the Second World War. If state spending causes inflation, then we might expect the period after the war to have been stagflationary. On the contrary though, once the initial reconstruction had been completed, government money printing helped to power the massive 1953-73 post-war boom.
Energy is, of course, the element which is missing in most explanations of inflation. So long as there is adequate potential surplus energy available, government currency creation can – as Keynes et al. argued (but didn’t understand) – provide the demand to encourage investment in developing the untapped surplus energy for new production. In the wake of World War Two, surplus energy came in the form of the massive untapped oil deposits of North America and the Middle East. And it was the peaking of US oil and the higher price of OPEC oil which created the conditions in the 1970s in which further currency creation created inflation rather than new production. In the same way, it was European peak coal together with the absence of adequate oil reserves that led to the economic woes of the 1920s – unlike the oil rich USA’s “roaring twenties” – which were particularly hard on a German state also forced to pay war reparations.
Rather than preceding price increases, the currency creation comes second, precisely because in better times it had resulted in new growth. But the process is not robotic. Faced with inflation, we have two choices. First, we might bring forward purchases if we expect them to be more expensive later. This is particularly true of big-ticket items like houses, cars and household goods. But, paradoxically, knowing that the price of essentials like food, fuel and utilities are rising far faster, we might decide to set money aside for a rainy day.
Previous inflations were caused not – or at least not directly – by the issuing of new currency, but rather by panic buying in the face of shortages later on. That is, as more and more currency is taken out of circulation to sit under the proverbial mattress, businesses experience declining sales which result in bankruptcies and unemployment. And the worse it gets, the more we experience shortages until, eventually, even essentials like food are in short supply. At which point – rather like the toilet paper shortages in spring 2020 – we all separately cease saving and begin buying… driving prices into the stratosphere.
Hopium fails
Trees might be efficient at removing carbon from the atmosphere – after all, that’s where all of that wood comes from – but human technologies were never likely to succeed. One reason for this is that the atmosphere is very, very, big – roughly 5.5 quadrillion tons of gas. But the carbon dioxide content is very small – just over 412 parts per million. And we keep adding more than 40 billion tons of the stuff every year. As I explained in 2018:
“So any machine that is going to attempt the task – even assuming 100 percent efficiency – would need to hoover up 2,470 tons of atmosphere to capture just 1 ton of carbon dioxide; and it would have to do this roughly a thousand times a second to keep up with our ongoing emissions.”
As a rule of thumb, it takes more energy to remove carbon from the atmosphere than the energy it took to put it there in the first place. And since fossil fuels still make up four-fifths of the energy we use, that would pretty much guarantee that any carbon capture device we were foolish enough to deploy would have a negative CROCI – carbon reduction on carbon invested – score.
This was hypothetical when I wrote about it in 2018. But we now have a practical example of the failure of carbon capture technology in the shape of Shell’s Quest plant in Alberta, Canada. As Anya Zoledziowski at Vice reports:
“Shell’s Quest carbon capture and storage facility in the Alberta tarsands captured 5 million tonnes of carbon dioxide at its hydrogen-producing plant in its Scotford complex between 2015 and 2019.
“But a new report from human rights organization Global Witness found the hydrogen plant emitted 7.5 million tonnes of greenhouse gases in the same timeframe… To put that in perspective, the ‘climate-forward’ part of the Scotford plant alone has the same carbon footprint per year as 1.2 million fuel-powered cars, Global Witness said.”
According to Shell, the $1bn plant is a demonstration project. But what it actually demonstrates is that the whole Green New Great Reset, techno-utopian version of net zero is a non-starter, and that the sooner we stop throwing good money after bad on these corporate big-ticket fantasies, the sooner we can start on the hard task of shrinking our way of life down to something that operates within Earth limits.
Behind the headline jobs figures
Just as most people rely on headlines as a substitute for real news, so most journalists rely on headline statistics as a substitute for research. So it was earlier this week when media outlets reported on falling unemployment. At face value, the Office for National Statistics employment figures suggest an economy which is booming as we put the pandemic behind us. Unemployment was down 0.4 percent, and employment up 0.2 percent on the quarter. There were 409,000 more people on the payroll at the end of 2021 than there had been in February 2020. Job Vacancies are at an all-time high too – 1,247,000, an increase of 462,000 from its pre-coronavirus January to March 2020 level – although the rate of growth has stalled.
Scroll down below the headlines though, and we find a couple of figures that take the sheen off the story. Pay is falling:
“Single-month growth in real average weekly earnings for November 2021 fell on the year for the first time since July 2020, at negative 0.9% for total pay and negative 1.0% for regular pay.”
We collectively worked 2.6 million fewer hours than in the previous quarter, and 33.5 million hours less than in the first quarter of 2020. It would seem that “building back better” involves many of us having to settle for part time employment at lower rates of pay than before the pandemic:
“The number of part-time workers decreased strongly during the pandemic, but has been increasing since April to June 2021, driving the increase in employment during the latest three-month period.”
The high number of vacancies in the UK are also deceptive because they tend to be concentrated in sectors which traditionally pay poorly as well as being in regions where fewer people are available for work. That is, they are a product of a mismatch between where the available workforce lives and where the employer is located. As Alexandra Heal, Delphine Strauss, Gill Plimmer and Alice Hancock at the Financial Times explain:
“UKHospitality, the trade body, said staff shortages were being felt more sharply in London, which traditionally relied on EU workers. Other pinch points are in coastal and holiday destinations where the ‘staycation’ boom led to soaring demand for staff over the summer.
“One key issue is that many workers left the industry during the pandemic because payments under the government’s furlough scheme did not cover lost tips, leaving them with significantly less than their usual earnings. Meanwhile, more young people than usual have stayed in education, shrinking the pool of potential recruits to the industry…
One factor behind the labour shortages may be a mismatch between the places where jobs are open and those where workers are available. Vacancies are furthest above pre-pandemic levels in the north-east of England and in other parts of the country where health, education and thriving sectors such as distribution account for a bigger share of jobs.”
Things could be a lot worse, as anyone who lived through the mass unemployment of the late 1970s and early 1980s can attest. Nevertheless, the data behind the headlines undermines the establishment propaganda about a booming economy which is poised to go from strength to strength.
As you made it to the end…
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