It seems that there is a growing view that gas is part of decarbonising the world to save it from Climate Change. The term ‘Climate Change’ is itself a euphemism for ‘Global Warming’ as the latter is a bit more threatening, like we have ‘new prices’ rather than ‘price rises’.
Natural gas is largely methane, which is carbon and hydrogen and burns to carbon dioxide and water. But methane is itself also a greenhouse gas, far more potent than carbon dioxide in terms of its warming effects, and quite a lot of it escapes into the atmosphere unburnt, especially if it is released by fracking. One may remember Jeremy Buckingham’s videos of him lighting the gas coming out of the river in Grafton. Carbon Capture and Storage or CCS is a bad joke, with the fossil fuel industry getting grants to research this. My view it is merely a tactic to play for time, like the search for the ‘safe cigarette’. It allows them to keep doing what they are doing, as regulators hope for a technofix.
The fossil fuel industry was in Egypt and seems did quite well, getting agreements to cut down on coal, but not gas and oil. And Australia’s approval for more gas was not criticised here, presumably because Europe is in such a mess with no Russian gas that they had become dependent on.
The cost of extracting gas has not changed, but Australia’s gas companies can just charge the world’s prices and can pocket the extra margin, known in economics as ‘super normal profits’. It might be noted that silly Liz Truss in the UK was going to subsidise gas for the people, i.e. simply give the extra profits to the gas companies by creating a taxpayer debt; a Tory idea of ‘welfare’. In Australia we just let the money go from consumers to the companies with few royalties. Norway and Qatar benefit from their resources- we don’t.
It seems that the COP meeting in Egypt was overshadowed by the G20 and the ASEAN meetings, but it is also likely that Egypt was leaned on by its affluent neighbours, the Middle East fossil fuel producers.
Here is a summary- it is not encouraging. The much-praised Albanese government has not done enough!
It is about market failure. When public power utilities were privatised a market was set up and power producers could bid into a market to supply at a certain price for each period of time. But obviously if someone bid in at a low price for part of the market, they would then watch as others bid in higher and made more money. So the price to all producers was set at the last bid, so the cheap producers made a lot of money.
There were a few problems. The amount of electricity needed varies widely. Coal fired power is not very flexible-it needs a constant load, cannot be stopped and can vary its output only slowly and within a limited range. When renewables came, solar is only in the daytime, and wind varies, so the system had a problem with ‘stability’- the ability to dispatch power when it was needed.
Another problem was rorting, though no one wanted to talk about this. There were big players who could withhold power so that there was a shortage; the price went up, and then they all cashed in. ‘Imperfect competition’ as economists would call it. No one wanted to build coal plants and there was not enough storage to let renewable energy last overnight or for dull or windless days. So the Morrison government said that gas was a ‘transition fuel’ and more gas plants would be built.
Meanwhile the Australian gas industry agreed to massive export contracts on the assumption that they could frack Australia as the US had been fracked. But the environmentalists realised the harm this did and resisted. So our price of gas went up. So the companies pressured the Albanese government, which is now breaking its election promises and approving fracking. Sorry environment- what is a bit of permanently polluted groundwater and desertification between friends?
Of course years ago, publicly owned utilities run by professional engineers were charged with providing electricity and gas to the public on a non-profit basis. They charged enough to cover their costs with some money for maintenance and future planning. The price was the average price of generation, not the most expensive component. The model worked quite well and could again. The change to a ‘market’ was ideological.
At an international level, the problem is similar, but it all being blamed on Russia, which is only partly true. Naturally in a globalised world, we are also affected by the European gas market, but less directly, especially if we frack to get out of it; which is a very bad solution, substituting a long-term problem for a short-term one.
There are claims and counter claims for how much electric vehicles (EVs) improve the greenhouse gas situation. The production of batteries is quite energy-intensive, so a large battery car takes about twice as much energy to produce as a normal Internal Combustion Engine (ICE) car.
The ‘payback’ time for that extra energy is about 2 years based on the number of km an average (UK) driver does per year.
But the key variable is how the electricity is generated, both in making the battery and in running the car. If it is made in Asia with coal fired electricity to manufacture the car and then charged with coal powered electricity, there is very little benefit. If the battery is produced by renewable electricity and the car charged with renewable electricity, the savings are more than two thirds by 150,000km.
If you keep your old ICE car for 4 years, it will have produced about the same amount of greenhouse gas as it takes to produce a new electric car. Looked at it the other way, it takes 4 years for a new electric car to pay for itself from an emissions point of view as against paying just for the petrol of an existing ICE car.
The media is trumpeting how successful the doughty Ukrainians have been against the Russian aggressors, and the war crimes of the Russians assassinating civilians and destroying civilian facilities. There has been a lot of discussion about Russia’s lack of success; Putin’s surrounding himself by Yes-men and getting wrong information or having political insecurity or mental health problems. This is all somewhat hopeful. Russia is still immensely more powerful than the Ukraine and is likely to get control of the skies, which will give them an even greater advantage.
The West seemed surprised initially by the Russian invasion as they had assumed that if everyone was involved in trade and had increasing national incomes that there would be no war. Since 2000 Russia’s per capita income had risen much more rapidly than the European average since they had increased their fossil fuel exports.
The Social Democrats in Germany had been happy to buy Russian gas on the assumption of trade guaranteeing peace. Germany was also building the Nordstream gas pipeline under the Baltic Sea to make it easier to get Russian gas. Currently Europe overall gets 40% of its gas, 27% of its oil and 46% of its coal from Russia.
After the invasion, the West initially started sanctions in a very unified effort. The rouble fell dramatically from about 13 US cents to 7, but as European countries continued to buy the gas the Russian economy was seen to be less damaged. So the rouble has recovered to about 11, either because the Russian economy is holding up due to the continued income, or that peace is likely to be negotiated soon. Sadly, the former explanation is more likely.
Europe will take some time to make the infrastructure changes to replace Russian gas with liquefied US gas, as the methane gas has to be frozen to minus 160 degrees at atmospheric pressure before it liquefies (or minus 83 at 45 atmospheres of pressure) and then transported by ship at high pressure to ports that can distribute it. Europe currently takes 120 Billion cubic metres (Bcm) of Russian gas. Also production cannot be ramped up quickly. The US has said that it can produce and extra 15 Bcm by the end of the year and 50 by 2030. Australia and Qatar, the other big exporters do not have much uncontracted gas. Environmental limits on fracking have stopped Australia increasing production. Germany has cut its dependence on Russian gas from 55% to 40%, but major cuts would do a lot of harm to their economy. (SMH 28/3/22)
Russia will also try either to get control of Ukraine or to get some part of it, or demonstrate its power in other ways so that it can claim victory. There is a small eastern area of Moldova with a Russian separatist movement and there is a temptation for Russia to link them to Crimea by capturing Odessa and the Baltic coast of Ukraine. The idea that they are defeated may be very premature.
Here is a graph of the Rouble v. US dollar, which shows the Russian currency has largely recovered.
It is interesting that a recent (UK) Telegraph column by Ben Marlow quoted in the SMH 5/4/22 urges stronger sanctions are needed if they are to be successful.
Opinion
The West must wage total economic war against Putin
By Ben Marlow
April 4, 2022 — 11.02am
Russia’s pledge to reduce military activity around Kyiv, as part of what it calls “de-escalation”, has rightly been met with scepticism in the West, though sadly not nearly enough.
The move has prompted talk at the highest levels about whether sanctions should be lifted if Russia retreats and commits to peace. The possibility of sanctions removal was first raised by Antony Blinken, US secretary of state, a fortnight ago, on the basis that Vladimir Putin agreed to an “irreversible” withdrawal from Ukraine.
Then in an interview last weekend, Britain’s foreign secretary Liz Truss said the West could relent if Moscow withdraws and commits to “no further aggression”. This is naive in the extreme and suggests America, Europe and Britain have learnt nothing about Russia’s psychotic regime. Have they forgotten what two decades of appeasement achieved?
Putin played the West for fools right up until the invasion. Even now, Emmanuel Macron continues to pander to Russia’s warmongering leader with zero to show for nearly 20 phone conversations and a little tête-à-tête in Moscow.
Indeed there is a strong argument for doing the opposite – instead of lifting sanctions, the international community should be preparing to hit the Kremlin with a new round of even more punishing measures, not least because the current ones are clearly losing their effectiveness.
The sanctions that were imposed on Russia at the end of February were unlike anything seen before in terms of speed, scale and Western collaboration. But they certainly couldn’t be called exhaustive and the impact has clearly waned.
The Russian economy has not been crushed despite all the excitable predictions from analysts and commentators. It suffered something akin to a financial heart attack and though a full recovery will take some time, it hasn’t proved fatal and there are signs it is already on the mend thanks to the decisive action of highly regarded central bank governor, Elvira Nabiullina.
The Russian stock market has reopened after a month-long deep freeze.
A temporary stop on equity sales by non-residents, along with a short-selling ban and a short trading window, was introduced. Although there are obviously questions about how sustainable such interventionary measures are, a crash was averted.
Russia’s banking system has stabilised. Measures such as capital controls and freezes on foreign exchange deposits have helped to prevent a run on the country’s banks.
The West needs to leap into action, pressing home its advantage with a new round of sanctions that completely devastate the Russian economy, starting with a full energy embargo. Without that sanctions will ultimately fail.
Helped by a doubling of interest rates and a ban on residents transferring money out of Russia, the rouble has staged a strong rally. After slumping as much as 33 per cent against the US dollar the day after Russia’s invasion, it is now close to pre-war levels of 85 to the dollar. It might have been a nice soundbite but the rouble has not been “turned to rubble” as Joe Biden declared last week in Poland.
Much of the recovery is artificial but as long as oil and gas receipts continue to flood into the country, Russia can keep rebuilding its hard currency reserves and weather the storm.
“Self-sanctioning” in the shipping industry has been a resounding failure. Oil tankers continue to arrive in Russian ports. Traffic in March has been only slightly lower than it was a year ago, and is higher than it was during the same month in 2016 and 2015, according to research from the Institute for International Finance. Even when the discount on Russian crude is factored in, oil revenues are near record levels, the IIF says.
That’s not to say that sanctions have been toothless. Goldman Sachs is forecasting a 10 per cent downturn in Russia this year, while Barclays predicts a 12.4 per cent slump. But while Barclays expects another 3.5 per cent decline in 2023, Goldman thinks growth will have returned already with GDP expanding by 2.4 per cent and has pencilled in a record current account surplus of $US200 billion by the end of the year.
The West needs to leap into action, pressing home its advantage with a new round of sanctions that completely devastate the Russian economy, starting with a full energy embargo. Without that sanctions will ultimately fail.
Germany could withstand the shock. Robert Habeck, its own economic minister, has admitted that it would at least be able to make it through the summer. It is just too afraid to inflict further hardship on the German people, but if Lithuania and Poland are prepared to then why shouldn’t Europe’s biggest economy? They are even more dependent on the Kremlin’s oil and gas.
It may not come to that, of course, if Putin follows through with a threat to turn off the taps because the West refuses to meet Russian demands to pay for gas in roubles.
There also needs to be a widening of the ban on Russian banks using the Swift payments system. Just seven have been cut off from using it, and of the five biggest, Sberbank is the only one that has been shut out.
What else can be done? Wally Adeyemo, the US deputy Treasury secretary, has talked about additional export controls – some experts advocate for a full commodities ban or at least a broader raw materials embargo – and Volodymyr Zelensky has called for a trade and shipping blockade, something Adeyemo has refused to rule out. There should also be punishment for Western companies that continue to do business in Russia.
But as things stand, if the price Putin was meant to pay for his invasion was the crippling of Russia’s economy, then sanctions have undoubtedly failed.
Almost unbelievably, NSW Planning Minister Andrew Roberts has scrapped requirement of his predecessor Rob Stokes that fire and flood risks be considered in planning approvals. This is only a week after the worst floods in history, and a few months after the worst bushfires.
His excuse was that he had a priority to act on affordable housing. No doubt flood-prone land is cheaper.
One might think that It is almost impossible to explain such stupidity, but we might note that the Property Council and the Urban Taskforce supported the decision, with the usual disparagement of ‘red tape.’
We might also note that Minister Roberts started working in Parliamentary offices at the age of 22, worked for Flagship Communications as a PR person and was cited by journalist Chris Masters as the liaison person between Alan Jones and John Howard’s offices. Flagship Communications was the PR company for the Orange Grove development, which set up a ‘factory outlet’ and turned it into a full blown shopping complex (until it was shut down by then-Premier Bob Carr after lobbying from Westfield). He became an MP at the age of 33 as member for Lane Cove.
There has been quite a lot of negative reaction to his planning decision in the letters columns.
Here is the SMH story:
NSW Planning Minister scraps order to consider flood, fire risks before building
NSW Planning Minister Anthony Roberts scrapped a requirement to consider the risks of floods and fires before building new homes only two weeks after it came into effect and while the state was reeling from a deadly environmental disaster.
Mr Roberts last week revoked a ministerial directive by his predecessor Robert Stokes outlining nine principles for sustainable development, including managing the risks of climate change, a decision top architects have branded “short-sighted” and hard to understand.
But a spokesperson for Mr Roberts said the minister had been “given a clear set of priorities to deliver a pipeline of new housing supply and act on housing affordability” by Premier Dominic Perrottet.
The president of the NSW chapter of the Australian Institute of Architects, Laura Cockburn, said the decision was difficult to understand “after the recent devastating floods and with bushfires still scorched in our memory”.
The revoked directives had sought to address “risk-management and resilience-building in the face of such disasters”, Ms Cockburn said.
“In the midst of our current flood and housing crises, why would a government choose to remove planning principles aimed at disaster resilience, and delivering affordable housing?” she said. “This is a short-sighted decision that could have enduring negative impacts.”
Mr Roberts’ spokesperson said: “The minister did not consider that the planning principles due to take effect on March 1 would assist in delivering his priorities so discontinued the principles and issued a new ministerial direction to that effect.”
Mr Roberts’ move coincides with expectations the government will also scrap or substantially change the new Design and Place State Environmental Planning Policy (SEPP) under consideration for apartments and homes. The policy stresses sustainability, quality and liveability by requiring, for example, better ventilation.
Mr Stokes’ directive on sustainable development, issued on December 2 but in effect from March 1, was designed to simplify the planning system, cut red tape and put people first. It said housing should meet the needs of the present “without compromising those of the future”. It was scrapped on March 14.
These principles are also reflected in the new design policy developed by the office of the State Architect. It is being reviewed.
Mr Stokes directed the planning department, developers and councils to also consult Indigenous landowners, consider the risk of climate change, and provide the public with information about the risks of natural disasters where they developed, lived or worked.
“Land use should be compatible with the level of risk of an area, such as open space or playing fields in flood-prone locations,” Mr Stokes’ statement of principles said.
Many in the property industry expect Mr Roberts will abandon plans for the new Design and Place SEPP.
Luke Achterstraat, NSW executive director of the Property Council of Australia, supported Mr Roberts’ move. With NSW facing a shortage of about 100,000 dwellings, the council backed any measure that sought to reduce red tape and activity that would “unblock” the planning system.
“The added significance of why we support the Minister’s announcement is that he has doubled down on housing supply and affordability, and has recognised the industry has been in an elongated process of policy reform.”
He said the Property Council expected the new Design and Place SEPP would either be set aside or substantially changed. Mr Achterstraat said the government’s own modelling found they would cost an additional $2.3 billion.
The chief executive of Urban Taskforce Australia Tom Forrest also applauded Mr Roberts’ decision.
“Planners were confused. Lawyers were aghast. Developers were exasperated. It is great to see this unwelcome initiative abandoned,” Mr Forrest told The Urban Developer, which first reported Mr Roberts’ policy change.
Stephen Albin, an analyst and principal of consultants Urbanised, advised Mr Stokes on the scotched principles.
He was disappointed to see Mr Stokes’ principles abandoned when NSW’s planning system needed reform. “The definition of stupidity is doing something again and again, and expecting another result,” he said. “We wanted a modern planning system that was inclusive.”
Ms Cockburn said she hoped the latest change by Mr Roberts would not impede the significant efforts to design places to meet the needs of their communities in the Design and Place SEPP.
Architects across Australia are also campaigning for new planning policies that ensure clearer standards and codes to protect consumers from worsening impacts of climate change, including new controls for building in floodplains.
A recently released research report by Climate Valuation found a million homes nationwide will be “at high risk of devastating riverine flooding by 2030 without investment in adaptation and mitigation”.
The future of building on floodplains will also form part of the inquiry into the NSW disaster that has left nine people dead and thousands with damaged homes.
The AUKUS submarine deal is bad for Australia on many fronts.
It is bad financially as the submarines are very expensive, so we will have a lot less of them. It is bad in that they will not be available for a long time, so we will be short in the meantime.
It is of course bad environmentally as if/when nuclear submarines are sunk there will be radio activity released at random locations around the world. Technologically nuclear submarines may be more vulnerable than at first thought. Because the nuclear reactors produce heat, they raise the water temperature, which can be detected by satellites. How vulnerable this makes them remains to be tested in practice.
These nuclear submarines are long-range attack submarines, which the US have to project power- read attack Chinese shipping. We do not want to attack China, so they are not appropriate for us. We need defence submarines to operate in our more local area.
Once we have the submarines, whenever that is, we will have to build a base for them, which the US will want to use. So we will be paying for a base that makes us a nuclear target principally for the Americans’ interest. We will be locked into the US global military system.
In reality, there are now two world powers. One is rising, and one is fading. Our major trading partner, China is rising, and the other, the US, is spending far too much on military hubris, neglecting its domestic problems and its wage structure has made its industries uncompetitive. Its military-industrial complex seems to want to create tensions to sell arms, which the US economy subsidises and now relies on. This is not a good economic model for the world. For Australia to hitch its fortunes to fantasies of bygone hegemony is foolish indeed.
China is extremely unlikely to ‘invade’ Australia. They are on the east end of the world’s greatest land mass and are building the belt and road initiative to get to the markets of both Asia and Europe. Australia is a quarry and a food source and provided we trade fairly they have no need for geographical expansion down here. If they were to attack us, the US would look at its options and decide whether it could possible defend us and at what cost, and that would happen in a global context, not due to some sentimental or historic tie. We should remember what happened in WW2 when we were threatened and appealed to Britain. They sent two token battleships which were promptly sunk by Japanese aircraft off Singapore, said they would take us back when they had beaten the Germans, and declined to give us back the troops that we had in North Africa. East Timor was invaded the week after the US Secretary of State had visited Jakarta. It is extremely unlikely that the US did not agree not to interfere; they were playing a global game as might have been expected. Sorry East Timor. Sorry Australia?
On the submarines, the US got a good deal. Australia signed up for inappropriate vessels at some future date at some yet unknown price, and will have to build a base that the US can use. The British had a little glimpse of being a world colonial power again, which must have delighted the fantasies of Boris Johnson, who thinks he is the reincarnation of Winston Churchill. Australia upset the French, upset the Chinese, upset the Indonesians, locked ourselves into a dangerous alliance against our major trading partner, signed a blank cheque, and hugely restricted our future policy options, but gave Mr Morrison a few good headlines when he was looking bad politically. It was another milestone in the triumph of hubris and lobbying over sensible policy.
Since Australia already has a bad reputation for tearing up submarine contracts, we might as well use this reputation to tear up the AUKUS one. The only hope is that Labor, having won the election by being hopelessly timid, might actually be brave enough to look at the situation afresh.
Just when you think it could not get any worse- it does. There has been relatively little about Australia’s appearance and presentation at the Glasgow climate summit and the reaction to it; the media being preoccupied with the fact that President Macron of France called Scott Morrison a liar, and chasing abducted Cleo Smith in WA.
Australia has had a SANTOS stall at its exhibition at the Glasgow Climate Summit. Santos is spruiking its carbon capture and storage, subsidised by guess who? You and me as taxpayers, facilitated by Energy Minister Angus Taylor who is charged up with a $2.3 million donation from Santos to the Liberal Party.
Carbon capture is a complete nonsense. Coal is more or less solid carbon. To do some basic chemistry, a mole of carbon weighs 12gm and occupies 5.3 cubic centimetres. When it combines with oxygen it weighs 44gm and becomes CO2, a gas which takes up 22.4 litres which is 22,400 cubic centimetres or 422.6 times the volume of the original carbon at atmospheric pressure. To capture the CO2, and then compress and store it will almost certainly take more energy than was released in burning it. To halve the volume of a gas, you have to double the pressure, which takes 101 Joules of energy per litre per atmosphere. The carbon dioxide is also able to penetrate barriers, such as going through solid concrete, and the sites suggested for the carbon storage are at 31 degrees, when carbon dioxide does not become a solid until minus 78 degrees. So the whole process cannot be economic or sensible, and no ‘technology’ will make it so.
Everything in the above paragraph is high school chemistry, so no great knowledge is required here. Only those venal or wilfully ignorant can dispute this. How the myth of Carbon Capture and Storage can still be peddled is beyond belief, excepting the explanation attributed to Napoleon, ‘In politics, absurdity is no impediment’.
The fact that Australia could have a Santos stall in its display in Glasgow shows the extent to which the Morrison government is willing to make us an international laughing stock for the sake of their $23 million, not to mention the subsidies, the greenhouse effects and the delays caused by this policy.
The other quote that seems apposite is Greta Thunberg’s, ‘Blah, blah, blah’.
Trucking giant Toll Holdings tells its drivers to avoid toll roads as they are not worth the time savings. It might be noted that Air Freight to Melbourne is actually taken by trucks, the only thing being sky high is the prices.The toll roads have the price levels befitting a private monopoly of Transurban. They were sold as lessening congestion. They have taken the money and now we have done nothing for our rail network. There was an article in the SMH of 29/9/21 and also this one:
Federal Resources Minister Keith Pitt gave $20 million for gas exploration for fracking in the Betaloo Basin in an uncontested grant. The grant was to Empire Energy that donates to both major parties, but seems to prefer the Liberals as they flew Energy Minister Angus Taylor and Liberal fundraiser, Ryan Arrold around the NT site (Guardian 20/8/21).
The Betaloo Basin is in the centre of the Northern Territory, and the grant application was the subject of Court proceedings brought by the Environmental Centre (NT) and the Environmental Defenders Office. It seems that undertakings were given not to give the grants, but they went ahead despite the assurances given to the Court. The Australian Government Solicitor (AGS) said somewhat lamely that they can only do what their clients say. The Resources Minister, Keith Pitt was criticised by the Federal Court judge, Justice John Griffiths, but it seems that this will make no difference either to the outcome or to the Minister’s career. Presumably the idea that he would be charged with contempt of court is fantasy.
We seem to have reached the point of a third world country where the Government gives whatever it likes to its mates and due process is a distant memory.
Labor might be marginally better, but the benchmark has now been set very low. Companies are becoming accustomed to governments bending to their will and will be reluctant to leave the ‘new norm’. The only answer is a Swiss-style democracy with referenda as the main source of power and citizens able to overturn government decisions. We need proportional representation and an end to the two-party duopoly so that all decisions are made on the floor of the parliament, not in back-room deals. This will take a change to the Constitution, but this well overdue in any case, and we might as well do a thorough job of it. The Swiss also have provisions to change their constitution without a fuss.
The composition of the US High Court, especially on the issue of abortion has had more publicity in Australia than our own stacking of the judiciary and major government bodies. Where are the records of all this? Has it just continued quietly under the radar with George Brandis and Christian Porter?
The Liberals have been masters of putting conservative people and ?mates in the judiciary and on bodies such as Clean Energy, which they did not manage to abolish. This will naturally make it very hard for the country to move on when they are voted out. The judiciary are appointed for life- about the only people in the country left in that position, and these major Government bodies have appointments with quite long tenure, so that change will be both hard and delayed. Years ago these problems would have been in the hands of relatively unsackable career public servants.
We presume that Matthias Cormann had a miraculous change toward clean energy once he got to the OECD and did not have to toe the Morrison government line. But people who have spent their working life in an industry are unlikely to do the same. Once again it is the Liberals standing in the way of progress for as long as they can.
