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“the tories have shot themselves in the foot on the windfall tax” said one snp figure. “it is less clear that they are champions of the oil and gas sector.”
hunt admitted scottish o&g had lost out, allowing nationalists to characterise it as a raid on scottish resources ahead of the general election expected this year. “westminster has once again sold out the ne of scotland to fill the pockets of the uk treasury” says stephen ***** snp leader at westminster.
the scottish greens have called for a reversal of the “perverse mechanism” within the wft that gives o&g producers 91p tax relief for every £1 invested in uk operations, rather than making this available for renewables.
hypocrisy and blatant lies. the greens conveniently omit that wind farms do not pay a wft unless they earn exceptional profits over £75 per mwh or are operating under existing cfds. pretty indefensible when they’ve been banging on about how cheap renewables are for over a year (9x cheaper?).
there is a desperate need for educating the public but instead we get the likes of hugh fearnley-whittingstall (a cook) being allowed to pontificate his eco-zealotry on what is considered one of the top political programmes on bbc this morning without challenge.
the renewable lobby is beginning to look shrill and out of ideas. most of what they preach has been proven to be hyperbole and propaganda. the standard article (frac 22:53) is an example. business can also see the damage and attacks that labour threaten the o&g industry. are they hoping the crocodile will eat them last?
Https://datawrapper.dwcdn.net/N76ms/3/
Not a solar farm with 35 miles of me (even better if you live in Kent). Only one onshore windfarm in Wales - none in England. Scottish obduracy slowing up the wind farm coverage of the East - Highland clearance almost complete.
I'm a dummy but this is where I am. Pricing of anything is not perfect so the fiendishly complicated CfD system is a bit like democracy. Not perfect but (seemingly) the best we've got). It applies across the board for everything. Trainers and T-shirts from pennies to thousands is an example. So we accept it and few understand it. The market is expected to find its own level eventually.
This is my explanation. With interest rates close to zero and the West in an environmental religious crusade whipped up by demagogues and dodgy science they demanded we go backwards towards more inefficient and expensive energy and at the same time demonise the hydrocarbons that had made life so much better for billions.
It went swimmingly for the first few years as hydrocarbons just got cheaper (shale) and the renewable technology followed a similar path. Covid and the Ukraine war impacted this but it would have happened anyway imo as the world and commodities move in cycles. Between 2014 and 2022 the path for renewables was following O&G pricing. The expectation was that O&G would run out and become more expensive whilst technology and pricing for wind would go in the oppposite direction. This did happen in the UK until the auction for AR5 in September 2023 which didn't receive ANY bids. This is an example of governments trying to predict the future. There is a massive amount of money in funds looking to fund state pensions and the like which means energy is always a "go to " investment because of predictability and government backing - closer to gilts than fashion. There is a vested interest in creating another predictable form of investment from tax gathering and revenue from tax paying utility (energy) users. This is also sunk capital and many politicians have publicly chained themselves to the lies and exaggerations that surround renewables thereby trapping themselves. The initial shortfall in this policy was funded by a windfall tax on the easiest scapegoat that handily fitted the narrative; the UK O&G industry. This is now coming to an end as basically the industry struggles to make a profit now and future investment has all but dried up.
Hiding this from the public is getting more difficult by the day and we are seeing erstwhile champions of wind backing out of deals (Orsted, Vattenfrall) and asking for even MORE subsidies via the CfD auctions. Now, there is only so much lipstick you can put on a pig and resistance is building towards the eco-zealots and their crusade which demands that cost NOW is not a consideration. There is a better afterlife for all those that sign up to this new religion. That doesn't explain why churches are empty on Sundays - they can't all be going on marches.
This leaves the electricity energy suppliers with a problem. Their new deals with the wind farms will reflect the REAL WORLD which the likes of Orsted and Vattenfall are already facing. Prices can only go UP. Sell that to to the public.
The proposed administrative strike price for AR6 is £73 £/MWH, in 2012 prices
"The Administrative Strike Prices presented have been calculated in real terms on the basis of a 2012 price level. To convert this into a more recently available price base, a Consumer Price Index (CPI) index can be used1,2. As an illustration, this formula is provided below. CPI Adjustor £2012→£current = CPIcurrent/AverageCPI2012 For stakeholders to convert the Administrative Strike Prices into the most recently available price base (September 2023 at time of publication), the following CPI inflator should be used: 1.3736. "
So in today's money that is £100.27 £/MWh
Were medieval payments that granted full or partial remission to sinners. These continue to this day and are now termed "renewable subsidies". You don't actually get any benefits financially but you supposedly feel better with a promise of future redemption. In the past it funded cathedrals and crusades as well as fine food and fine robes for bishops and pontiffs. Today it is simply redirected as foreign dividend. Read this and weep:
https://open.substack.com/pub/davidturver/p/offshore-wind-follow-the-money?r=lx6e9&utm_campaign=post&utm_medium=email
C. 9.15 on Sunday with Laura Kuenssberg
In response to a questionh of where Labour will find the money for public services RR replied "initial injection of cash by closing tax loopholes "
LK replied "they're crumbs" to which RR responded " - £1.5bn for VAT & business rates (private schools) and £7BN OVER THE COURSE OF THE PARLIAMENT by closing the loopholes" - she didn't say O&G but it couldn't have been anything else. It does shoew the paucity of ideas of where the money will come from. The Tories emptied the pot on O&G. That's £7bn over 5 years and I'd suggest it's front loaded.
Https://twitter.com/Ed_Miliband/status/1765836121248797155
He couldn't look more ridiculous if he tried.
This guy is hilarious: https://www.youtube.com/watch?v=8DAbUUbA1IY
Hi L7 - it appears to be from Bloomberg - https://www.worldoil.com/news/2024/3/6/uk-chancellor-extends-north-seal-oil-and-gas-windfall-tax-into-2029/
To comply with the sef-imposed modelling of OBR it looks to me that it is a kinda 5 year plan so they had to tack on an extra year to tidy it up. Pretty meaningless imo because it is the equivalent of the "sprint to clean energy by 2030" of Ed Miliband. That and the great rapture of NZ by 2050. Dates plucked out of the air. We can all do that with a certain amount of mystification (usually foumnd in religious dogma) and cod-economics that the public willnever understand (I'm with the public).
It looks like Labour have accepted the budget and it remains to be seen how "growth" will happen with less efficient and more expensive energy. We can't all join the ranks of climate.org activists or work on wind farms.
This morning the future looks rosy for O&G UK if you look at the alternatives. The numbers that Frac mentions mean there is another hole in the finances that will need filling.
Https://twitter.com/7Kiwi/status/1765447201793217003
Government sneaks out AR6 budget on day of the Budget. Over £1bn (£1.4bn in today's money) to be allocated to renewables, up 351% on AR5. Of that, £800m to offshore wind and some of that to bail out projects that bid too low in AR4. Bills going up again
Strike prices confirmed at well above current market rates too. So, renewables are not cheaper than gas. £1.4bn is £50 extra per household on electricity bills. What the Chancellor giveth in NI cuts, he taketh away in electricity bills
*Norwegian CfD wind auction on 18 March. will be interesting.
Email from Rachel tonight,
"Ronald-
Today’s Budget is more of the same. Once again, the Tories failed to deliver the change Britain needs.
They promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down.
This Budget was all spin and no substance - covering up 14 years of failure and broken promises with a last-ditch attempt to save their own skin ahead of this year’s general election.
The Tories know they have only one chance to win the election: buying it.
They raised the spending caps for their own benefit. And now they want you to thank them for handing back £5 for every £10 they’ve raised in tax."
She then asked for a donation.
I don't blame the Tories for Covid or the Ukraine war and I don't think the weather always has to be declared a crisis or an emergency. Would things have been better under Labour with the once in a generation events?
The shrillness and the need to always apportion blame on someone else makes the Labour missives as readable as those from juststopoil.
Hunt skimmed over the NS and it is clear that for them [Tories] the caravan has moved on. It was probably indefensible to permit the industry to make windfall profits gainst a background of media hype and activism over the past 2 years since the Ukraine war. The cure for low prices is low prices and that seems to be happening with natural gas. For oil it is more complex but neither party can ignore the tax revenue and I reckon it is now being cemented in both parties future plans although it looks like ther'll be only one winner, Labour. If there is NO investment in the NS then this tax revenue is at risk. Even if Miliband does his worst the opposition within his own party from Rachel and the Unions will ensure he is left to play in the corner with GB Energy whilst the grown-ups manage the Nation's finances. There are enough within there own party let alone a Tory opposition to ask why electricity prices aren't cheaper and the 9X cheaper quote will be regularly aired.
In some ways it's win/win for us. I expect Brent to remain high and with our tax advantage we can afford to be choosy regarding new deals. I hope you're right about more departures Frac because for some there is no economic future yet the importance of oil doesn't diminish or go away. Expediency always rules in politics and imports versus losing tax revenues means ther'll only be one outcome.
Hi M - it confuses ne no end and I'm British. The likes of jso are in their death throes and looking increasingly silly. They have been abandoned by politicians and Dale Vince (a millionaire from subsidies). I'm sure they still have a hard core that would willingly drink the Kool-Aid but they are basically irrelevant now. Ordinary people are now questioning the costs of "transition". Politicians number one priority is to be elected. If the propaganda appears to work they'll either adopt it or conveniently not question the numbers or bring reality to the debate. i just think that real life has intervened and is more powerful than dogma that doesn't have a phsics, economic or science background. You can't fool people all of the time.
"climate activists for a free palestine" - one of the posters from a protest at liverpool street station. the climate contingent present staged a "die-in". i travelled from liverpool st. for many years and i would have remonstrated with the protestors if my journey was delayed. i doubt any of them had the sense to consider that one of the main supporters of palestine is iran who make their money from - guess which commodity? there were also "queers for palestine" who perched for the present the fact that many islamic regimes have the death penalty for ****sexuality. i'm no fan of israel but they are democratic and embrace personal freedoms that the protestors would not be granted in many countries.
labour leapt on the green bandwagon because it supported their election plans. there are several suspect politicians promoting renewables one being barry gardiner who accepted £425,000 from christine lee & co who were declared by mi5 to be an agent working for the chinese communist party. i mention this because gardiner only really came on my radar as an inquisitor at the trial of linda cook (a.k.a. 'environmental audit committee').
once in power i expect labour to push climate activism into the long grass as more pressing demands are made of them. the tories will have a field day as they will be able to use real figures for renewable costs.
*barry gardiner is extreme left of labour. interestingly jeremy hunt is also described as a left of centre tory.
I think you're right there Dumbly. On BBC Newsnight a few minutes ago they zeroed in on the OBR checking the Tories homework and there was emphasis at the chart for public debt as a % of GDP and fiscal headroom that they need to show going lower in 2028 and I suppose to reinforce the trend/message they extended the EPL to 2029. It is a measure for the here and now which is the run up to an election. I am more relaxed now - there is never a danger of politicians shying away from self preservation which trumps economics every time.
It is not necessary to believe in the overriding primacy and urgency of the energy transition or Net Zero to have a sincere and sound commitment to environmental issues and human welfare. The obsessive focus of public debate on one issue, to the exclusion of rational argument about costs and other consequences of such policies, is a disgrace for politicians, advisers and the media. All politics and policymaking is about choices, often complex and contentious. Net Zero and the energy transition are presented as being a necessity that does not involve large costs. The ‘necessity’ part of the argument is patently untrue – we can choose to set a target date for the energy transition of 2040, 2050, 2060 or beyond. That is exactly what China, India and many other countries are doing. The issue of costs is a little more complicated, because the argument relies upon a deliberate confusion between initial or transitional expenditures and average costs in the long run. For the avoidance of doubt, the average cost of using renewable energy is generally higher than reliance on fossil fuels. But even if the average cost of using renewable energy were low, the argument entirely neglects the very large initial capital investments required for the transition. This money must be found from somewhere. The belief that a country can simply incur debt of 100% of GDP to finance the transition ignores economic and financial reality. This is why the term ‘energy transition’ is so important. We have inherited a capital stock and an economy, built over more than a century, that relies upon fossil fuels. To replace that capital stock to use renewable energy instead is a project that involves huge expenditures as well as social and economic dislocation, plus the sacrifice of a portion of our national income.
source - : https://mailchi.mp/cd067d7b8405/former-world-bank-economist-warns-of-energy-transitions-fiscal-risks-201336?e=35cf3821be
Other countries are veering away from the dogma. Maybe an election would enable us to do the same. Both parties seem in thrall to the extremists. In a few months they won't be.
Whilst on Balkan proverbs I always remembered this one - especially thinking of Ed.
A body was found in one of the interminable disputes that plague the region. It had been abused and the eyes gouged out suggesting more than the ongoing dispute was involved. One man present said, "they say his brother did this" another replied, "Ah, that explains it."
haven't read this yet https://mailchi.mp/cd067d7b8405/former-world-bank-economist-warns-of-energy-transitions-fiscal-risks-201336?e=35cf3821be