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Triple Crunch Log                                                                                                            

things change. In 2006, Wood Mackenzie predicted the US would be the biggest importer of LNG by 2010. Ths industry says it now has enough supply for 100 years.128

UK renewables industry welcomes microgeneration feed-in tariffs announcement. JL: “Feed-in tariffs are going to be a big boost for the industry and for the first-time, homeowners can see a decent financial return. We estimate homeowners can save and earn more than £1,000 per year for 25 years, increasing with inflation (of energy bills), giving a payback in around 10 years.”129 “That’s a better return on investment than you’d get from a bank.”130 “The scheme could lead to 100,000 new jobs in the UK solar industry by 2020.”131

UEA scientist hid climate data flaws, Guardian investigation by Fred Pearce shows. Chinese data used in 1990 to demonstrate only a small warming contribution from cities were inadequate - the locations having been lost - and Phil Jones of UEA withheld the information when it was requested under Freedom of Information. Jones also asked other climatologists to delete e-mails relevant to FOI requests.132

Nonetheless, concludes Fred Pearce, “the ‘climategate’ scandal is bogus and based on climate sceptics lies. Claims based on e-mail soundabites are demonstrably false – there is manifastly no evidence of clandestine data manipulation.” Palin, Inhofe and others have quoted “evidence” cut-and-paste together by professional sceptics who have used two devices: quoting out of context, and juxtaposing quotes from e-mails sometimes written ten years apart, as though related.133

US deficit will be nearly 11% of GNP this year, and more shockingly isn’t projected to get below 5% before 2020. NYT: “For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors. Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded.”134

“Old Davos” is in retreat, Gideon Rachman argues in the FT. At the World Economic Forum, confidence has been shaken in the old belief – firmly held since the end of the cold war - that globalisation is good. Protectionist ideas are returning, and now it is the eastern nations that try to persuade the western that free trade is essential. Sarkhozy’s keynote address was an attack on financial capitalism. He made one Russian delegate nostalgic for the old days he remembered in the Soviet Union. Sarkhozy argues for a “carbon frontier tax” on the goods of countries that don’t act on climate change. Also, says Rachman: “Banker bashing rivalled skiing as the most popular sport at this year’s forum.”135

Petroleum Review assesses risk of “rapid rise in criminality in the oilfields” to Iraqi production, which the oil minister hopes will rise from 2.5mbd now to 12 mnd by 2016: more than Saudi Arabia and Russia. There are 13 regiments of the Oilfield Protection Force in the Basra region alone. Gun battles between this oil police force and local militias are now “frequent.” Locals are going to have to do most of the work: BP’s expats are expected to number only in the tens. Also in this ussue: OPEC spare capacity is not certain: it may be as low as 3 or as high as 6 mbd, 50-80% of it in Saudi Arabia and Kuwait. Chinese buyers of new cars face a three month delay despite round the clock shifts in factories.136 (L)

Even promoters of new more efficient tar sands technology are sceptical of lifting production much: water use and gas use remain huge issues, with even CERA saying it could take up to 15 years to commercialise new more efficient technologies. 1.7 mbd of projects have been cancelled or delayed indefinitely since the oil price fell for $147.137 (L)

Flawed arguments underly carbon trading, and massive fraud will be inevitable if it takes off. So an article in Petroleum Review argues. The value of total transacted carbon trades in 2008 was $126bn - $92bn of that in the EU ETS – up from $63 bn in 2007. If the US and others follow the EU, the market would be four times higher by 2014, en route to being bigger than oil and gas trading. Enron- and sub-prime-type malfeasance would then be inevitable. Traders have moved effortlessly from Enron to the property market to the carbon market. Fraudulent deals have already started: in Asia, Austrlia and most notably in Europe, where taxpayers lost €5bn in a so-called carousel fraud involving VAT. When governments changed their tax laws to close the VAT loophole, carbon trading dropped as much as 90% in some countries.138 (L)

Wind and PV comprise more than half all new power generation in 2009: 55%. Renewable energy installations in Europe totalled 61% of all new power generation in 2009 (25.9 GW). 10.1 GW of wind was installed, up 23% on 2008. At 39% of the total this was the single biggest source. Natural gas was second at 26% and PV third on 16%. Data come from EWEA.139

2.2.10.Paul Volcker issues a plea direct to Congress to support his Wall Street reforms. No member of the Senate Banking Committee has yet voiced outright opposition.140

IPCC chief Pachauri refuses to apologise for one mistake in a 3,000 page report (an un-peer-reviewed reference to Himalayan glaciers melting by 2035). To do so would a “populist” measure, genuflecting to a “factory” of sceptics looking for harmful “pinpricks” in the massively comprehensive and professional work of the IPCC, he asserts, for which the mistake was completely out of character.141 In another interview he accuses un-named companies of backing sceptics who are guilty of “skullduggery of the worse kind.”142 And note: the Himalayan claim never made it to the Summary for Policymakers – the gold standard for negotiators, and was barely referred to in the press.143

3.2.10. Ofgem warns that only state intervention can keep the lights on. Energy bills may go up by 25% by 2020, as energy companies raise £200bn to invest in essential new generation. Many will be unable to afford to heat homes as a consequence. There is also a real risk of the lights going out by mid decade. Reform is urgently need: deregulation has failed, a free market approach is “no longer an option,” obligations may be to supply may be required of energy companies (just as banks face capital requirements), and nationalisation of power may be required. All this comes in Ofgem’s Project Discovery report, published today, after a consultation that began in October 2009. Already some are supportive of Ofgem’s proposal that there should be a central buyer for energy. Andrew Watkin, head of energy at property consultancy, Carter Jonas: “a centralised renewables market might sound Stalinesque but it may be what is required to bring a structure and concerted strategy to the major campaign of the coming years – creating energy and protecting its supply.” 144 145 Ofgem once enthusiastically advocated dergulation, but the financial crisis has changed regulator Alistair Buchanan’s mind. The big energy companies are not making the investments needed to replace old coal and nuclear plants.146

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