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Triple Crunch Log                                                                                                            

joint-highest among 38 analyst estimates compiled by Bloomberg.66

ITPOES Letter to FT: Gas crunch that will prove a wake-up call for consumers. Sir, Your report “Ofgem foresees looming threat to gas supplies” (January 13) raises some serious concerns over national energy security. The “gas crunch” identified in your report is probably going to be matched, or exceeded, in its effect on the UK economy by a similar “oil crunch”. This prospect was first identified by the Industry Task Force on Peak Oil and Energy Security (ITPOES) in its report dated October 2008. Oil supply has very similar characteristics to gas, except that the run-down in indigenous production is more advanced and the availability of oil is more limited with respect to future demand. (The ability to extract “tight” gas from shale, at economic prices, has transformed the near-term international prospects for future gas supply.) A second report from ITPOES, updating and reinforcing the case, will be published by us on February 10. For those interested in the future security of UK energy supplies, it should be essential reading. From businesses to consumers, it is a wake-up call to every one of us about the future implications for our daily lives.

Richard Branson, Founder, Virgin Group; Philip Dilley, Chairman, Arup; Jeremy Leggett, Chairman, SolarCentury; Ian Marchant, Chief Executive, Scottish and Southern Energy; Brian Souter, Chief Executive, Stagecoach Group67

BP joins with Sinopec in talks about shale gas exploration and development in China. Shell and Petrochina already have a shale gas programme. The deal hinges on Chinese access to western technology.68

Shell faces renewed investor pressure over tar sands. A coalition has forced a resolution onto the agenda of the May AGM calling for the Shell audit committee to do a review of risks. Catherine Howarth, chief executive of FairPensions, ­coordinator of shareholder opposition to the tar sands investments: “All (shareholders) are united in ­registering concern with the risks involved in Canadian oil sands. We expect that Shell's 2010 AGM could prove a ­watershed in the history of corporate accountability.”69

French nuclear industry in crisis as EDF and Areva go to war. EDF says Areva has halted uranium supplies and stopped removing spent fuel for treatment in an increasingly bitter row over their contractual relationship. The heads of the two state operators are asking Sarkozy to adjudicate. Areva supplies 68 per cent of the uranium used in EDF's reactors. EDF, which provides 77% of French electricity from its nuclear plants, has stocks for several months.  The row has been cited as one of the factors behind France's failure to secure the contract to build reactors in Abu Dhabi.70

Germany removes nuclear waste from a salt dome repository that has “proven unstable”. Thousands of barrels of low-level waste are to be removed from Germany's Asse radioactive waste disposal facility. The country's Federal Office for Radiation Protection (Bundesamt für Strahlenshutz, BfS describes the job as a “major scientific and technological challenge.”71

EON boss calls for rethink on retiring all coal fired power plants to make sure lights don’t go out. “There is a question mark over keeping one or two of these oil or coal fired plants mothballed to secure supplies for a few days per year when we get these conditions,” Paul Golby says.72

Coalition letter in Guardian urges higher solar UK feed-in-tariffs for UK. Signatories include the Home Builders Federation, the Federation of Master Builders, the National Housing Federation, many companies, and NGOs.73

Larry Elliot says “enjoy it while it lasts”: global credit bubble is far from over, and much depends on China. “Everybody knows what should happen in theory: the Chinese need to boost domestic consumption rather than relying on exports. Otherwise, with America unable to act as the world's consumer of last resort, the world is going to be flooded with goods that nobody wants. The lack of global demand will force down prices, making the threat of deflation extremely real and adding to pressure for trade barriers.”74

NY Times editorial describes “how retirees saved the banks”, and get a terrible deal in the process. “Measly savings yields are central to the government effort to buy time for the banks to earn their way back to health. It is important to rebuild the banks. But more attention must be paid to the collateral damage from that effort.  Here’s what’s happening: By lowering the short-term interest rate it controls to virtually zero and creating lending programs, the Federal Reserve has enabled banks to borrow cheaply. The banks re-lend that cheap money, but not necessarily to consumers and businesses. They can, for example, lend it to back to the federal government by buying Treasury securities, and earn a nice spread between their cost of funds and Treasury yields. At the same time, banks are awash in deposits, much of it from investors who have pulled their money out of riskier investments. With money rolling in, big banks don’t need to compete with one another for savers, which further depresses the interest on offer. The result is presumably healthier banks and certainly poorer savers. Or, as William Gross, the legendary bond investor told The Times’s Stephanie Strom: “It’s capitalism, I guess, but it’s not to be applauded.” 75

19.1.10. Could China be the next Enron, Thomas Friedman asks. Maybe, after the Google fiasco. James Chanos, the investor who started the shorting of Enron stock and made a fortune, has said that China is akin to Dubai only 1,000 times worse. On 12th of January, Friedman concluded he was unlikely to be right. The reasons for his doubts started with the $2 trillion of foreign currency reserves.76 But today, he revises his view. After the government-backed hacker raid on Google, Friedman thinks “Command China” is increasingly at work with “Network China.” For this reason, Freidman thinks the Communist Party is worth shorting.77

20.1.10. UN drops deadline for emissions commitments under Copenhagen Accord. With the 31 January deadline looming, only 20 countries have filed. So the commitment becomes a “soft” target Un chief of climate Yvo de Boer decides.78

China's renewable energy consumption accounted for 8.3 percent of the total energy in 2009. So says an official from the National Energy Administration, Shi Lishan. China consumed 3 billion tonnes of standard coal equivalent in 2009, more than 90 percent from traditional fossil fuel sources, with over 70 percent from coal. China intends to raise total hydropower capacity to 300 gigawatts and wind power capacity to 150 gigawatts by 2020, Shi says. Total installed nuclear capacity should reach 80 gigawatts by 2020, while solar capacity should rise to 20 gigawatts.79

IPCC leader has to back down from claims Himalayan glaciers would melt by 2035. “One paragraph, buried in 3,000 pages of reports and published almost three years ago, has humbled the head of the UN's IPCC. Facing global outcry, Rajendra Pachauri backed down and apologised today.” JL: So, another blow to credibility that will reverberate endlessly around the world, while the torrent of scientific bad news passes the the great

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