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Goodbye, climate agenda! Fracking could restart in weeks in Britain – ‘Use all the tools at our disposal to ensure our energy security’

Fracking could restart in weeks as crunch report into reopening drill sites due in days

27 June 2022

1) Fracking debate set to prise open Tory party cracks
The Sunday Times, 26 June 2022

2) Fracking could restart in weeks as crunch report into reopening drill sites due in days
The Sun, 24 June 2022

3) Poor families will be paid not to use electricity at certain times
The Times, 27 June 2022

4) Benny Peiser: ‘Forget about Partygate, if the Government can’t bring down the cost of energy they’re toast’
GB News, 26 June 2022

5) French energy giants tell households to ration supplies ahead of looming winter shortage
The Daily Telegraph, 26 June 2022

6) John Constable & Debra Lieberman: The energy of nations and the creation of wealth
Financial Post, 24 June 2022

7) John Dizard: Europe’s energy hole
John Dizard, 26 June 2022 

8) Russian gas cuts threaten world’s largest chemicals hub as German firms contemplate shutdown
The Wall Street Journal, 27 June 2022

1) Fracking debate set to prise open Tory party cracks
The Sunday Times, 26 June 2022

A blue-on-blue row over fracking is expected to reignite this week as dozens of Tory MPs increase pressure on ministers to overturn a moratorium on drilling.

Kwasi Kwarteng, the business secretary, will receive a British Geological Survey (BGS) report in the coming days on whether scientific developments have made the extraction of shale gas safer. He said last week that while it would inform his “next steps” on whether to lift the ban, the government would be “led by the science” and support from “local communities”.

Senior backbenchers have expressed concern that the BGS review ignores “scientific strides that have been taken since 2019”. The Net Zero [Scrutiny] group of Tory MPs and peers, who are sceptical about the government’s green agenda, have launched a campaign urging Kwarteng to use the review to “unlock” domestic supplies to bolster energy security.

In a statement on [the Net Zero Watch] website yesterday, the group pointed to statements by the Oil and Gas Authority, the Royal Society and research sponsored by the business department that they say show “fracking can be conducted safely”.

Craig Mackinlay, who chairs the group, said since April his constituents had been paying up to 54 per cent more for gas than in October “because we have been meeting more and more of our gas needs from the Russian-dominated European market, while our domestic supplies have sat idle”. Sir Iain Duncan-Smith, the former Tory leader, added: “We are sitting on an island of oil and gas and it is absolutely absurd we aren’t using it.”

Fracking involves drilling into the earth and directing a high-pressure mixture of water, sand and chemicals at a rock layer to release the gas inside. It is opposed in rural areas and by environmental groups and was suspended in England in 2019 after a report on earth tremors by the Oil and Gas Authority.

Chris Skidmore, a former science minister who chairs the rival Net Zero Support Group of Tory MPs, said: “The UK has shown international leadership in showing the rest of the world how to decarbonise and create new sovereign forms of energy through wind and nuclear for the future. We don’t need fracking. Even if there wasn’t an environmental crisis, oil and gas are industries of the past.”

Skidmore also warned that restarting fracking would only compound the Tories’ electoral woes across rural areas of the country.

2) Fracking could restart in weeks as crunch report into reopening drill sites due in days
The Sun, 24 June 2022

FRACKING could restart in weeks as a crunch report into reopening drill sites is due in days.

A British Geological Survey paper examining the safety of drilling for energy is expected on Business Secretary Kwasi Kwarteng’s desk.

He said he would “consider the next steps” — but insisted he would only give it the go-ahead if locals backed it

In a speech yesterday he vowed Britain should “use all the tools at our disposal to ensure our energy security”.

And he said that when Russian tanks rolled into Eastern Ukraine it focused minds on to generating “the fossil fuels we need here at home”.

Mr Kwarteng said: “It’s an imperative, it’s not a mere option. We have always been clear that shale gas could be part of our future energy mix.

“But we need to be led by the science and above all we need to have the ongoing support of local communities.”

Green campaigners say Britain should not be digging for more dirty and polluting fossil fuels, which are destroying the planet.

But those in favour of fracking, which was suspended in 2019, welcomed the news.

Ex-Brexit chief Lord Frost said: “The decision about fracking can’t be delegated to scientists.

“Ministers have to make their minds up, on the basis of scientific advice, but also broader factors like energy security and whether people can afford their energy bills.

“The Government has to take a lead and do the right thing — which is to resume fracking.”

3) Poor families will be paid not to use electricity at certain times
The Times, 27 June 2022

Millions of households could be paid to use less electricity at peak times this winter under plans from the National Grid to reduce the risk of blackouts.

The company responsible for keeping the lights on is working urgently to establish a scheme to pay consumers with smart meters to ration their usage voluntarily when supplies are scarce.

It believes that this could be a cheaper and greener option than paying fossil fuel power plants to generate more electricity, as Russia restricts the gas supplies to Europe and stokes fears over security of supply.

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The proposed scheme by National Grid’s electricity system operator (ESO) would reward households for shifting the time at which they carry out power-hungry activities such as cooking, using the washing machine or charging electric vehicles.

Households typically pay 28.34p for each kilowatt-hour of electricity they use, but could instead potentially be paid as much as £6 for each kilowatt-hour that they avoid using at peak times, according to initial proposals seen by The Times.

Full story

4) Benny Peiser: ‘Forget about Partygate, if the Government can’t bring down the cost of energy they’re toast’
GB News, 26 June 2022

Net Zero Watch Director Benny Peiser reacts to 90% of UK firms being worried about the cost of green targets and energy.

Click on image to watch the interview


5) French energy giants tell households to ration supplies ahead of looming winter shortage
The Daily Telegraph, 26 June 2022

France’s top three energy suppliers have called households and businesses to prepare to ration electricity and gas as Russia’s invasion of Ukraine fuels fears of shortages this winter.

In an unusual intervention, the bosses of Engie, EDF and TotalEnergies, appealed to French households and businesses to limit consumption of energy, electricity, gas and oil products.

Catherine MacGregor, chief executive of Engie; Jean-Bernard Lévy, who heads up EDF; and Patrick Pouyanné, chairman of TotalEnergies; made the plea in French newspaper Le Journal du Dimanche.

They said: “For months now, the European energy system has been under great strain and the French energy system has not been spared. Russian gas deliveries by pipeline have fallen sharply for some countries, including France.

“Although increasing, imports of liquefied natural gas (LNG) are still too limited to compensate for these decreases. The alert level for gas stocks at the European level is therefore high and rationing measures have been put in place in some countries.

“The soaring energy prices that result from these difficulties threaten our social and political cohesion and impact too heavily on the purchasing power of families.”

Fears have been growing on the Continent that building up energy reserves and diversifying production will not be enough as the bloc weans itself off Russian imports.

Other EU countries are preparing to ration energy, such as Germany and the Netherlands. France is less dependent than its neighbour on Russian gas deliveries as it covers close to 70pc of its electricity needs from nuclear energy.

Officials are yet to set out how rationing would work in practice, though it is thought to include restrictions on usage being imposed on businesses and households during morning and evening peaks.

Full story

6) John Constable & Debra Lieberman: The energy of nations and the creation of wealth
Financial Post, 24 June 2022

Faltering or falling energy consumption, particularly electricity, is not an indication of a healthy economy

Since 2007, something historically unprecedented has been happening in most Western economies — energy consumption is in a nosedive.

U.K. energy use has fallen by 30 per cent to quantities not seen since the 1950s, while the rest of Europe has regressed 30 years to 1990s levels. The U.S. is following suit. Whereas total energy consumption had been flatlining, it then fell 13 per cent by 2020, approaching levels not seen since the mid-1990s. A subsequent post-covid increase gives one hope but may not reverse the trend.

This downward spiral also holds for electricity usage, the very index of a modern society, with the U.K. dropping over the past decade to levels last seen in the 1970s. The Canadian case is less dramatic but still concerning: both total energy and electricity consumption have flatlined over this period, and since 2018 have begun to decline.

Faltering or falling energy consumption, particularly electricity, is not an indication of a healthy economy. You might think otherwise — it’s evidence of increased efficiency, right? For some individual consumers, in the short run, potentially, yes. For society as a whole, in the longer run, emphatically not. As a rule, gains in efficiency will increase demand for the now cheaper goods or services, or save energy for another purpose, so total consumption rises. Savings from LEDs, for example, will first be translated into more lighting. (Who knew a lit driveway looked so pretty?)

And when that demand becomes satisfied it will be spent on vacations, better health care, and education, and further out in the economic system on roads or defence. Like cash, energy is never left on the table, and given its availability, there is no limit to possible improvements in human well-being. Put simply, efficiency fuels welfare-enhancing consumption.

Energy demand is falling because of environmental policies, including subsidies to modern renewables such as wind and solar. As distasteful as this might sound, it is nonetheless true. So far, both the U.S. and Canada are relatively minor players, the U.S. having spent a mere US$125 billion between 2008-2018, and while Canadian national totals are lower, the province of Ontario alone is reported to have spent about US$30 billion in the period 2006 to 2014. But the EU, where the biggest energy collapse is observed, has spent a staggering US$800 billion since 2008, a total that has been increasing at $US70 billion a year. And the U.K., a country of 65 million people, is shelling out well over US$10 billion every year.

The intention of these subsidies was to reduce costs, but the gamble has not paid off — nor will it so long as Mother Nature and her laws of physics are at the table. Wind and solar remain stubbornly expensive for consumers in spite of a blizzard of misinformation and propaganda claiming otherwise.

How did we get here? The answer lies in our intuitive understanding of “energy” itself. The human mind contains programs enabling us to reason about survival-dependent concepts — mating, food, co-operation. The “physics of energy” is not such a concept. Without science we lack the lens to focus effectively on energy, leaving us more or less “energy-blind.” Energy is a strange concept — in the strict scientific sense it isn’t a substance, such as coal or oil, but instead an abstract property of all substances, namely the capacity to cause change in the world, to do work.

Moreover, energy varies in quality, not just quantity. To support complex society a fuel must be of high quality, that is, structured so that it has the potential to do a lot of work. In thermodynamics, this is referred to as a fuel’s degree of “disorder” or “entropy.” Greater disorder equals greater entropy equals less work. But our “energy-blindness,” the inability to easily grasp thermodynamic principles, means that we must rely on physics to see — and what it reveals is that fossil fuels and uranium are highly ordered and rich in their potential to do work, making them cheap, while wind and solar are the reverse.

In fact, to render wind and solar functional requires much additional work and resources, both often supplied by fossils. Transforming renewables into useable grid electricity relies on turbines and photovoltaic panels, themselves complex and expensive states of matter, to say nothing of the management costs of buffering the electricity system against their variability.

The sunshine and wind might be free, but their extraction, conversion, and delivery to market are not. If you are concerned about carbon dioxide emissions, as we are, then it is critical to acknowledge our energy-blindness and follow the physics: fossil fuels are the necessary bridge to a nuclear-based, low-carbon future. The optics of wind and solar are superficially attractive but their promise of a green, low-carbon nirvana is empty. But don’t blame us, blame Mother Nature.

At stake are the creation and maintenance of wealth. The availability of high-quality energy created the tools and technologies that make human lives healthier, longer, and more fulfilling. Mortality rates, particularly for children, are extraordinarily low by historical standards. Many people in the world today, not just the richest, have temperature control in their homes, low levels of pathogens in their food supplies, transport essentially at will, phones, and access to vast information-storage systems. These highly improbable states exist only by virtue of the work done by energy-dense fuels such as fossils and nuclear.

By spending heavily on wind and solar, world leaders are degrading the quality and productivity of national energy supplies, causing rising costs and falling consumption. The causal linkage is on display across the West. This will damage not just the ability to create new wealth, but also to maintain a complex, pleasant and secure environment in which to live and raise our families, and this damage is already happening.

Before you dismiss us as Chicken Littles screaming that the sky is falling (though we are and it is), we grant that the world currently looks far from dystopian. Countries where energy consumption is plummeting don’t feel much pain … yet. And there is a good reason for that. One country is increasing its energy use, propping up Western consumption with exports and giving us a false sense of well-being. That country is, of course, China.

Since the West began its energy starvation diet, Chinese energy consumption has increased by over 50 per cent and its electricity consumption has increased by 200 per cent, overtaking the U.S. by a large margin. China, unlike the EU, U.K. and U.S., is still 90 per cent reliant on fossil fuels and nuclear. What’s more, only some of the immense wealth these fuels are generating is being exported. What is China doing with the rest? Time will tell.

But right now, as a matter of urgency, we must reverse the decline in Western energy quality and consumption by ending impoverishing renewable subsidies and clearing the path for fossil fuels and nuclear. Toying with low-density, thermodynamically incompetent renewables is an indulgence we cannot afford. With the Chinese economy on an energetically sound footing and those in the West not, the world has turned upside down. The economic consequences of this reversal are serious, the security implications terrifying. Our energy blindness is both costly and dangerous.

John Constable is energy director of the Global Warming Policy Foundation in London and author of its forthcoming study Europe’s Green Experiment: A costly failure in unilateral climate policy. Debra Lieberman is a professor of psychology at the University of Miami and author of Objection: Disgust, Morality, and the Law (OUP, 2018).


7) John Dizard: Europe’s energy hole
John Dizard, 26 June 2022 

European leaders believe they are part of the rich world, with the power to determine their future. After they return from their sacrosanct holidays in late August, they may begin to realize that is no longer true. Russia is pulling the plug. And nobody, including America, is coming to their rescue at the last minute.

World financial markets have been attempting to put a price on their dread of some disastrous event. I think that event will come in July, with a near-complete Russian shutdown of energy exports to Europe. Ukrainian solidarity flags are cheap. War is expensive.

Of course, the European Union has a plan for the coming crisis. Or, rather, many plans. To start, there is the expectation that American or Qatari LNG can come quickly to replace Russian gas. Climate goals (supposedly frozen into law) can be temporarily set aside so coal powered electric plants can be restarted. Gas storage facilities will be filled in time for winter.

Rationing will be imposed on European industry’s use of natural gas. Renewable energy, grid upgrades, and EVs will take over, eventually. Any necessary sacrifices will be shared in a fair manner.

No. This is all a day late and a euro short. Europe was saved from energy disaster this year thanks to China’s lockdowns (which released some LNG supplies) and unusually warm weather. Without that compounded good luck, Europe would have already suffered major power blackouts and industrial shutdowns.

But China’s LNG import terminals have re-opened with the end of its Covid lockdowns. And now that Europe has abandoned its climate goals to revive coal fired power plants, there is little, if any, non-Russian coal left to buy on international markets.

And Europe’s natural gas rationing plans are based on giving priority to household consumption, along with hospitals and other emergency services. The political leadership has yet to understand, for example, that if the EU’s fertilizer producers are not assigned priority access to available gas supplies then a cold, dark winter will be followed by food shortages next year.

Putin and his allies were slow to grasp the shortcomings of Russian military technology and leadership in the Ukraine campaign. But now they get it. Ukrainians can just be ground down by artillery storms while they’re cut off from Russian pipeline gas and access to their Black Sea ports. Their European allies can ultimately be bullied into accepting a humiliating strategic defeat and unfavorable terms for a temporary peace.

The Russian fossil fuel producers know that oil and gas reservoirs can be damaged by production shut-ins and restarts. This is more of a problem for oil wells than gas wells, but according to the reservoir engineering people I have spoken to, a three or four-month shut-in by Russian gas producers would not cause too much long term damage. For Europe, though, such an interruption of supplies would be catastrophic, particularly in winter.

The Americans are too politically divided and leaderless to spend much more public money on opposing Russia. If the Republicans succeed in retaking either the House or the Senate in November, they will insist on Europe’s providing a bigger share of allied support for Ukraine.

Even before then, American energy exports to Europe have been unexpectedly reduced. The giant Freeport LNG liquefaction plant on Quintana Island, Texas, will be shut down for months after an explosion in early June, shortly before Russia drastically cut back on its European gas exports. Nearly 70% of the Freeport plant’s production this year had been sent to Europe. There is now no spare capacity left in the US.

The Putin-verse has been shown just how clueless, divided and vulnerable Europe could be, even in the face of obvious threats. Germany has little military capacity and limited interest in expanding it, let alone projecting power beyond its borders. France now has a divided government or will when a cabinet is finally formed. Southern European countries show little conviction in confronting Russia. The Nordics can defend themselves, but can’t save the rest of Europe from political and strategic paralysis.

Even now, faced with Russian energy blackmail, European utilities and major industrial users cannot get approval for long term procurement contracts for additional fossil fuel supplies. And it’s true that such deals would be contrary to Europe’s clean energy policy commitments.

But you can see how this makes foreign fossil fuel suppliers reluctant to make huge capital investments in export capacity to meet European demand, given that that Europe is committed to dumping their business as soon as possible. There is already a global shortage of qualified workers such as pipeline welders, oil field workers and coal mine equipment operators. Why should they be committed to projects serving only a short-term demand spike? Those people can’t be moved around like inconvenient paragraphs in party platforms.

American national energy policy is equally incoherent. But there is more “project on project” risk for investments intended to supply European markets than there is in America. The fossil fuel production facilities (mines and drilling rigs) need to be matched with more expensive transport facilities (LNG liquefaction terminals, LNG carriers and shore terminals) with correspondingly longer payout periods.

Planning permissions have, historically, been easier to obtain in the US. The US has made much softer commitments to reductions in fossil fuel use. Maybe that was morally wrong, but then we see how Europe’s “firm” commitments to decarbonization can be dropped when they become inconvenient.

All this is not to say America will be insulated from a European-centered energy crisis. Apart from the epic financial costs for American investors, banks and corporations, the US industrial base is closely integrated with Europe’s. Americans have close family and personal friendship ties with Europe.

One way or another, though, America will survive the European energy catastrophe. Political and economic freedom in Europe may not.

8) Russian gas cuts threaten world’s largest chemicals hub as German firms contemplate shutdown
The Wall Street Journal, 27 June 2022LUDWIGSHAFEN, Germany—For years, BASF, one of the world’s largest chemicals companies, built its business model around cheap and plentiful Russian natural gas, which it uses to generate power and as feedstock for products that make it into toothpaste, medicines and cars.

Today, dwindling Russian gas supplies are proving a threat to the company’s vast manufacturing hub here—the world’s largest integrated chemical complex spanning some 200 plants. Earlier this month, Russia started throttling back its supply of gas to Germany and other European countries. In response, company executives are doing what was unthinkable just a few months ago: considering how to potentially shut down the complex if gas supplies fall further.

The threat isn’t just to BASF and its 39,000 employees in Germany. Because BASF and other chemicals companies sit at the beginning of most industrial supply chains, their disruption would reverberate well beyond the sector, threatening Europe’s economy at a time of high inflation and slowing growth. A throttling of BASF’s ammonia output, a key ingredient in fertilizers, could exacerbate the world’s growing food crisis, analysts say.

“Stopping production here would be a mammoth task,” Peter Westerheide, BASF’s chief economist, said from an office overlooking Ludwigshafen’s dense matrix of pipelines, plants and railroads. “We’ve never faced such a situation before,” he said. “It’s difficult to imagine.”

Germany’s dependence on Russian gas has risen after successive governments moved to close the country’s last nuclear power plants and to phase out coal, leaving only gas and renewable energies as alternatives. Many homes in Germany use gas for heating and the country is home to the biggest manufacturing sector in Europe, a voracious consumer of the fuel.

Last Thursday, Berlin triggered the second of a three-step emergency gas plan that, in its last step, could cut off gas supplies to some companies. The move came after Russia reduced deliveries to Germany via the Nord Stream pipeline to 40% of its capacity. Moscow blamed the shortfall on missing turbine parts due to sanctions.

German officials called it an economic attack. Germany currently receives about 35% of its gas imports from Russia, from around 55% before the Ukraine war.

Chemicals companies such as BASF are more vulnerable than other industrial players because natural gas is critical for most of their processes. Some 60% of the gas BASF consumes in Europe is used for power and steam generation. The other 40% is used as a feedstock, or raw material for its products.

At BASF’s Ludwigshafen site—a city within a city with over 60 miles of roads, some eight restaurants and a wine cellar—natural gas is fed into an intricate system of pipes and spigots to reach plants making ammonia and acetylene, a compound used in plastics and pharmaceuticals. The site is responsible for as much as 4% of German gas demand.

“To put it plainly: There is no short-term solution to replace natural gas from Russia,” BASF Chief Executive Martin Brudermüller said in April.

At the heart of the Ludwigshafen operation are two steam crackers, one of which takes up an area the size of 13 soccer fields. These large furnaces—which are typically operated with natural gas—“crack” naphtha, a petroleum product, into the basic components for subsequent production.

Managers figure that if gas supply stays above 50% of Ludwigshafen’s maximum demand, they can continue to operate by reducing the load and using substitutes. If gas supply falls significantly below that over a sustained period, they would have to stop production, the company said. The threat of gas rationing is growing and Russia is likely to continue to curtail gas deliveries, German officials and analysts say.

The site employs around a third of BASF’s total workforce. While chemical plants stop production for scheduled and officially required maintenance, an immediate shutdown of the whole complex can lead to critical plant damages and significant safety risks.

“Everything is interconnected and depends on other parts of the complex,” Mr. Westerheide said. “Costs are high to stop and start. This is an extreme scenario that we very much like to avoid.”

With gas now becoming rarer and more expensive, BASF is racing to find alternatives—and finding that few exist in the short term.

Germany’s VCI chemical industry association said the chemicals sector, the country’s largest industrial gas consumer, requires around 135 terawatt hours of gas a year. The industry can save only two to three terawatt hours by using alternative fuels, VCI said.

Longer term, BASF is working on reducing its dependence on fossil fuels by increasing energy efficiency and switching to renewables in the power supply. Last year, it invested in an offshore wind park and signed long-term supply contracts for green electricity. But while replacing gas-powered electricity is technically possible, the renewables supply isn’t yet enough to meet demand, analysts say.

When it comes to feedstock, BASF has pilot projects for chemicals recycling and increasingly uses biofuel feedstocks, including biomethane. However, these approaches won’t be able to substitute fossil fuels at large scale soon, analysts say.

“In the short and medium term, BASF would still need gas,” said Arne Rautenberg, a fund manager at Union Investment, an investor in BASF. “There really is no way around it.”

Amid its European challenges, the company has been increasingly looking to China. It is already building a $10 billion production site in Zhanjiang, southern China. The company says that China, the largest and fastest-growing chemicals market in the world, is central to its growth strategy. High energy costs in Europe and the economic war with Russia make this focus more attractive.

Pivoting to China, however, will also take time—the company currently derives around 14% of its revenue from China, according to FactSet, compared with around 40% from Europe—and bears political risks.

The German government has embarked on a broad rethink of its relationship with China amid concern in the West about Beijing’s authoritarian drift at home and its more aggressive posture abroad. That shift, aimed at reducing Germany’s strategic and economic dependence on Beijing, has accelerated after Russia’s invasion of Ukraine, which China has refused to condemn.

“You have to be there where the market is, and China is a huge chemicals market,” said Sinischa Horvat, chairman of BASF’s works council. “But you also have to consider: Am I making myself even more dependent on something or am I in a healthy balance? That will be the challenge for the future.”