Viking Supporters Co-operative
Viking Chat => Off Topic => Topic started by: albie on May 26, 2022, 02:04:35 pm
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Well, Sunak has diverted attention from the need to reform the energy sector, while giving incentives for fossil fuel extraction.
More help for low income groups than the Labour policy, which is needed short term.
Politically clever from Sunak, with Rachel Reeves talking ignorant drivel in reply.
The "Energy Profits Levy" includes an "investment allowance" which applies to UK extraction of fossil fuels. This tax incentive amounts to a carrot to the energy industry to directly pursue extraction for export to international markets.
Here is an explainer of the Energy Profits Levy;
https://twitter.com/emilygosden/status/1529791323225595904/photo/1
And the Investment Allowance;
https://twitter.com/DrSimEvans/status/1529795087395442688/photo/1
The elephant in the room is what is not there.
1)
No reduction in the price cap to prevent future big increases in consumer costs, so the £800 increase in October could be the first of many.
2)
No plan to take infrastructure provision into public control....so National Grid remains a private company.
3)
No increase in funding for energy efficiency, such as home insulation.
The least cost method of reducing energy poverty, with a long term benefit.
No significant attempt to realign the energy industry, just financial support to mitigate the first phase of increases in fuel bills.
The energy companies will give some of their early profits back, and then recoup the money via higher bills.
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I should have mentioned that the poorest households are hit much more heavily than the better off as a result of inflation;
https://twitter.com/TheIFS/status/1529341497086124032
Energy price increases are a key driver of this difference.
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But all Tory MPs voted against a windfall tax, was it last week?
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But all Tory MPs voted against a windfall tax, was it last week?
Red meat to socialists.
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It has the important caveat that there are allowances for investment. That's important and makes it more sensible. Trick is to ensure the companies don't try and pass the hit on to customers, the big risk when there's a price cap (hence not favouring them).
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No Pud, that is not quite correct......it favours a particular type of investment.
The allowance is for UK extractions, which is effectively a 91p in the £ subsidy to the fossil fuel industry.
OFGEM could impose a lower price cap, but has no plans to do so.
Prices will rise under this scenario.
It is probably the biggest subsidy from consumers to the fossil fuel industry yet devised.
Why would you choose to incentivise fossil fuel recovery, in preference to directing investment to energy efficiency?
That same tax concession would give a much better return to UK policy objectives if it was aimed at a massive insulation boost. Instead, it will generate future returns to the energy conglomerates, trans national corporations unconcerned with the UK consumer interest.
As I said, politically Sunak has outplayed the slow witted Labour Party....but the consequences longer term for those in fuel poverty will be severe.
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Albie, the North Sea will be the replacement for mostly the Russian Energy market in the EU, nearer and with a more dependant supplier ally in ourselves, but will give us leverage in our negotiations with the EU.
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Albie, the North Sea will be the replacement for mostly the Russian Energy market in the EU, nearer and with a more dependant supplier ally in ourselves, but will give us leverage in our negotiations with the EU.
I doubt the N Sea has sufficient, affordable reserves to replace Russian hydrocarbons.
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Albie, the North Sea will be the replacement for mostly the Russian Energy market in the EU, nearer and with a more dependant supplier ally in ourselves, but will give us leverage in our negotiations with the EU.
Oil and gas is extracted from the North Sea by private companies who sell it to the highest bidder - there is a thread about it.
Or are you sugessting the Tories should nationalise them?
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RD , when I was involved in the industry admittedly in the 1980's and 90's the companies roughly used a price of $18 a barrel for investment purposes anything above and they invested heavily.
Seems a silly price now, but, if the present price stays about where it is for any length of time, with the more up to date satellite exploration techniques there will be a lot of hydro carbons both on land and at sea still to be found, plus the techniques of extraction could quite easily make redundant fields profitable again.with injection and extraction valves to pressurise old wells and existing.
Wilts if you don't think that governments and private companies at that level don't talk to each other with tax payers money and private investment at that level you are not as clever as I think you are.
The companies will have been well aware of the benefit of future tax benefits on investments in this country well before the announcement today, and will have agreed the one off tax payment knowing they will come out of it smelling of roses before lunch time, in fact they will have read the chancellors brief before the announcement in all probability.
Then there is the deeper water, some very big fields are known but costs at the time made it uneconomical, well they might not be any more.
There are big bucks and economic power to go for now that a year ago were not on the table both for the western world and some big companies, it will be very interesting how it pans out, Russia and China could well be the driving force for the industry now.
The oil field stopped in Dorset a few years ago and fracking by local objections could come under intense pressure now as the gas fields in other places will too.
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I simply don't believe consumers can afford hydrocarbons priced at this high level.
We can already see it's causing a recession.
We need a balance. Cheap enough to create economic growth and profitable enough to fund exploration.
I think we're out of kilter, we are already starting to see demand destruction.
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You may be right Selby - but did you miss this:
BP to review all North Sea investment in light of windfall tax:
https://www.telegraph.co.uk/business/2022/05/26/ftse-100-markets-live-windfall-tax-bp-share-price-energy/
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You may be right Selby - but did you miss this:
BP to review all North Sea investment in light of windfall tax:
https://www.telegraph.co.uk/business/2022/05/26/ftse-100-markets-live-windfall-tax-bp-share-price-energy/
Wilts, as you will know, the investment money requirement will be massive.
Maybe Mr Starmer will help them to overcome any issues they have with funding new investment ideas.
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You may be right Selby - but did you miss this:
BP to review all North Sea investment in light of windfall tax:
https://www.telegraph.co.uk/business/2022/05/26/ftse-100-markets-live-windfall-tax-bp-share-price-energy/
Wilts, as you will know, the investment money requirement will be massive.
Maybe Mr Starmer will help them to overcome any issues they have with funding new investment ideas.
No need to worry it's all coming from yet another shake of the magic money tree.
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You may be right Selby - but did you miss this:
BP to review all North Sea investment in light of windfall tax:
https://www.telegraph.co.uk/business/2022/05/26/ftse-100-markets-live-windfall-tax-bp-share-price-energy/
Wilts, as you will know, the investment money requirement will be massive.
Maybe Mr Starmer will help them to overcome any issues they have with funding new investment ideas.
No need to worry it's all coming from yet another shake of the magic money tree.
RD, I dearly hope you are right.
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You may be right Selby - but did you miss this:
BP to review all North Sea investment in light of windfall tax:
https://www.telegraph.co.uk/business/2022/05/26/ftse-100-markets-live-windfall-tax-bp-share-price-energy/
Wilts, as you will know, the investment money requirement will be massive.
Maybe Mr Starmer will help them to overcome any issues they have with funding new investment ideas.
No need to worry it's all coming from yet another shake of the magic money tree.
RD, I dearly hope you are right.
The magic money tree never turns out to be free...
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Albie, the North Sea will be the replacement for mostly the Russian Energy market in the EU, nearer and with a more dependant supplier ally in ourselves, but will give us leverage in our negotiations with the EU.
Selby,
This is a non runner.
The EU have indicated a developed plan to decarbonise in the wake of the loss of Russian supplies.
This will accelerate withdrawal from fossil fuels at pace, to a conclusion within 5 years.
Very difficult to see a role for North Sea hydrocarbons in this scenario.
The investment supported by the levy is for resources that will take some time to come on stream.
It makes very little sense in terms of the market going forwards.
Why support new oil and gas exploration in preference to non carbon technologies, or to energy efficiency via widespread insulation of leaky housing stock?
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The Telegraph has woken up to the missing expenditure;
"when the Treasury talked about the £15bn package today they left off an extra £6 billion of spending commitments.
They costed up the extra £200 of the £400 off energy bills but… not the original £200 (which as of today is not being paid back)."
Not too good at doing the books, are they?
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Crikey! If that's true Albie, some poor Civil Servant, undoubtedly being harrassed for a quick answer for another unplanned political volte face, without time to think, to reflect, will lose his job over it.
I had dealings with the Cabinet Office in a former life - during the times of Cameron and May. Used to go meet them tbh. When you got to know the guys who actually did the work their main complaint was always the lack of clarity about policy, the changes in direction and the constant demands from their political leadership for instant answers. And in Mrs May's case there was the further irritation of her being constitutionally unable to delegate anything. Stuff used to get delayed for weeks waiting for her to get through the pile in her inbox. I know that's true cos it happened to a pretty significant project I was involved with.
BobG
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Yes Bob, no doubt someone lower down the food chain will be found a less demanding role.
Still, Sunak should be having his homework checked before making a major announcement. It does show this was thrown together in a last minute rush.
Incidentally, the subsidy to invest in oil and gas is in direct contravention of the agreement reached at Cop26 in Glasgow just a few months ago.
https://twitter.com/adamvaughan_uk/status/1530141768406032387/photo/2
Both photos from the New Scientist guy show the stark contrast between the 2 positions.
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I can't get that page to load Albie. Keeps telling me 'server not found'. I'm using Firefox. Does it need some other browser?
BobG
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Bob,
It opens for me in Firefox, so I don't know why it will not for you.
Try his main twitter page;
https://twitter.com/adamvaughan_uk
Scroll down to the post 3 down, then click on the photo (there are 2).
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Thank you Albie. I'm not sure if I should be crying now I've seen it though. I guess it reinforces my remark earlier today that the sophistication, or otherwise, of an electorate plays a huge role in what politicians get up.
This one is a downright abomination given the state of health of the planet. Did somebody mention Glasgow? Tbh, I can only think of one real reason why mendacious shit like this has been put forwards.
BobG
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It gets even worse, because as far as I can see, the investment tax break for oil and gas companies does not apply to the electricity generators.
Sunak has given a competitive advantage to oil and gas industry investment, not to the whole energy market.
This is important if the policy objective is to move from legacy fossil fuels to use electric for heat and transport.
A 91p in the £ discount on exploration investment, without the same incentive in the sector that the UK needs to grow, makes little sense unless the real objective is to support the business costs of the legacy industry.
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The issue is, they don't think renewables are reliable.
They trust fossil fuels, they are proven.
Where this leaves the climate issue... Well, it's green crap isn't it?
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Reliability has not been an issue with renewables for many years, RD.
Sun shines, wind blows and the moon pulls on the tide....more than enough to get by.
Probably more seen by Bozo as a profit opportunity for party supporters.....like Covid was with the payouts for unusable PPE at excessive profit margins for people with no track record of providing the stock.
As for share buy-backs, well there is a golden gift horse not to be ignored!
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They need power suppliers that drive income for the government not what they have to subsidise, and quickly with the infrastructure that is mostly in place, plus there is whatever Albie says a ready made market on our doorstep.
It would also give the Steel and Engineering industries a rapid expansion while the renewable market has shown its inadequacy to keep up with market demand and is still requiring government subsidies, remove them and most renewable companies would withdraw from the market even now.
Pound for pound the investment returns will be much quicker on line as would tax revenue, and investors follow the money not the ideals, its just a matter of fact.
And it gives the nuclear industry time for the development of small reactors as RR are developing and Nuclear Fusion to be looked into.
The 25% levy for green energy will come under scrutiny as bills go up, and with an election coming up would be a vote winner down the line nearer to an election and they could say look what we have done for you, at little detriment to power supplies as Hydro Carbons ramp up in the mean time.
So in short, big export earnings, an infrastructure already in place, tax returns for the government, little lost for UK industry as most renewable companies are based abroad, and a relatively quick fix compared with the infrastructure being put in place for renewables an Industry that like the Chinese we could get into on the back of Hydro carbons we know are at our disposal, and to part satisfy the greens at the cost of just changing a date to 2100.
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All good Selby if it wasn't for the fact that if we don't rapidly reduce carbon emissions now then we know and we can already see there are very serious consequences coming our way.
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Do we RD or is it some experts idea of what will happen like the forecasts of doom in the Covid crisis and their vision of how to handle it.
I listened to a scientist the other day on the radio who quoted known numbers that the highest carbon readings recorded on Earth was in the Jurassic period with the number of active volcano's and it coincided with the highest number of Floral and animal numbers on Earth.
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Do we RD or is it some experts idea of what will happen like the forecasts of doom in the Covid crisis and their vision of how to handle it.
I listened to a scientist the other day on the radio who quoted known numbers that the highest carbon readings recorded on Earth was in the Jurassic period with the number of active volcano's and it coincided with the highest number of Floral and animal numbers on Earth.
The Jurassic - when most of the UK was under water - is this the comparison you are drawing Selby?
Or did 'your expert' forget that bit? Along with the fact we are loosing more species to extinction through climate change every year at the fastest rate ever.
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Jesus.
Mike Graham. Reinforcing pensioners' ignorance since 2006.
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The spread of Human living space and the destruction it brings of natural living habitat is responsible for species disappearing together with the wide spread use of insecticides Wilts and you well know it.
As for the higher water levels nobody I have ever heard factor in the use of water by human consumption that grows every day in both Industry and sustainability when predicting higher water levels the use of sea water world wide de salinizing it will become much more prevalent in years to come as fresh water consumption rises and natural water courses disappear. It will become one of the human race's major consumption problems in years to come.
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Talking of one of the best predicters on Covid, and hey presto the font of all knowledge. the Christmas cancelling expert himself.
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I don't know about all that Selby, what I do know is personally I am experiencing weather conditions that don't seem right. Right now all the summer flowers are blooming early because it feels like summer has started early again.
But beyond our own little patch we are seeing extreme fire seasons all around the globe. Canada, California, Siberia, Iberia, Scandinavia and Australia. This spring temperatures in Northern India and Pakistan are extreme already. We see the ice melt everywhere. I just don't believe these sorts of things are just a coincidence. They are real and seem to be growing in severity year by year.
I know that's not scientific but the global temperature charts are.
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The save the world educated idiots might not know but India have purchased 250% more oil and gas since the war in Ukraine started and at a discount, and are saying to the rest of the world, you look after your patch , we will look after ourselves.
And get ready the banks will push up interest rates, they have done it all my life every 15 years or so let the mortgage debt get big on fairly low rates and then hit it with rate rises.
The youngsters having one or two holidays abroad a year, a BMW or MERC on the drive, all the latest gadgets, and living beyond their means will have to pick up the tab now.
I can't see the bankers being left out of the big profit game, there will be more pain coming along for the chancers.
Could walking to school become more popular instead of the school run at last?
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Selby,
Much ado about nothing...what does this have to do with Sunak and the Energy Profits Levy?
Some facts to consider;
https://www.carbonbrief.org/analysis-cutting-the-green-crap-has-added-2-5bn-to-uk-energy-bills/
As an aside, what do you think the UK should do to reduce consumer energy bills, and respond to climate change?
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Albie I would make it a matter of planning that all new buildings would have to have solar energy and the facility to export excessive energy into the grid, and that would include all massive ware houses.
All new buildings to have triple glazing and no direct entrances with triple door entrances also which is common in the Scandinavian countries.
Rain water collection tanks built into estates for agricultural and industrial purposes and washing. Install many more water turbines in water courses and connect them to the grid, they are relatively easily maintained work 24hrs and can generate and be used in different sized water courses, there are quite a few installed in Wales on small water courses that serve small villages and a larger one in the river Aire near Methley next to a flood wear.
I would look to move away from EV's to Hydrogen cars and Vehicles unless the manufacturers moved to self charging EV's while in motion which would reduce the need to stop to charge the batteries.
Build the RR mini Nuclear power stations, and push for nuclear fusion.
Generate more electricity with incinerators burning waste and would generally look at every way we could generate electricity cheaply.
Introduce pay per mile road tax, and make public transport cheap and accessible by taxing a cup of coffee a pound a cup, beer is taxed all coffee is imported is just water and powder and anyone willing to pay £2-80p plus for a cup and half a beer is £2 and includes tax deserves to pay over the odds.
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A much better response Selby, with some good points.
Still not clear on the Energy Profits Levy plan from your point of view, and how energy costs can be made more affordable short term.
Some problems though;
1)
Hydrogen cars are a niche market which has been squeezed by the fall in battery costs.
They may have a role when green hydrogen is available, but it is more likely to gain a foothold in industries like steel production.
All the big vehicle manufacturers are committed to EV going forwards.
2)
The RR small modular nuclear do not yet exist.
It is a research project a long way from production, with no indication of costs.
3)
Waste incineration turns organic carbon to carbon dioxide at the point of combustion, which adds to greenhouse gases.
All incinerators use propane burners, so the net energy balance needs to account for this.
Using the products of fossil fuel industries, such as plastics, to generate energy is the same as burning those fuels direct.
Much better to recycle these products as feedstocks for other industries, reducing the demand for new resources.
Agree on the rest.
Public transport promotion and road tax per mile are obvious solutions.
If we agree that road tax per mile is a sensible option, then can we agree that rail fares per mile should also be encouraged? After all, we want the price between modes to be fully understood by all, don't we?
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Albie, Hydrogen is on the back burner because the industry has already committed to batteries and spent big bucks not because it is better for the customers, and is miles behind in infrastructure, and its main selling point it is cheaper will be tested when in about seven years the power train starts to drain big time and the cars are next to worthless.
The ones to suffer will be the enthusiasts who rushed in and splashed out at the novelty.
Combustion in incinerators is being improved all the time with higher temperatures and metals being available and are being used more and more. The nuclear mini stations want to be pushed quickly as does fusion as there is a possible large market and fusion is the dream and only big investment would get the best out of them so the government has a role to play.
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Selby,
Nobody in the auto industry agrees with you about hydrogen for cars, that is just the reality of the market direction of the sector. Far from being worthless, the batteries are the most valuable element in an EV, and have secondary uses.
You seem to think that batteries will remain as at present, when in truth the development of new battery capability is moving at lightening speed. There is minimal hydrogen infrastructure in the UK for vehicles.
RR do not have regulatory approval yet for small modular reactors. Construction time is given as 6 years by RR, should the regulation and finance hurdles be overcome. They are not a likely solution in this decade.
SMR are pitched at private investor capital according to RR on their site, but in the UK private venture capital has declined conventional nuclear on grounds of cost.
To make a business case, RR need to show that they could match the falling cost of electricity production from wind and solar.
These are about 4x cheaper than ordinary nuclear at the moment, and that gap is widening.
I thought you were a market capitalist, but some of the solutions you prefer have no support from the investment community.
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Decent summary of the missed opportunity of the Energy Profits Levy here;
https://www.theguardian.com/environment/2022/may/31/sunak-uk-oil-subsidy-could-have-insulated-2m-homes-says-thinktank
If it were really about helping low income groups with energy costs, then this is the direction which should have been taken.
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Reading that, Albie, you really do have to wonder what the hell is going on in Government these days. Surely they can't be as stupid as to think the 91% tax break is a good policy? If we believe that, then what other reasons are there? Favours for friends? Or selves? Can anyone think of ANY other reason that isn't as mendacious as these two? I can't.
BobG
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It used to be called pandering, Bob.
Special favours for "special interests", it is a hallmark of this government.
Labour were no better, with Reeves replying to Sunak cheering copying Labour policies, seemingly unaware of Thatcher and windfall taxes from the early eighties, or the wider energy poverty implications. The woman is as dull as dogshit.
Selby won't want to read this piece in New Scientist, which gives some detail on the waste created by small modular reactors;
https://www.newscientist.com/article/2322252-mini-nuclear-power-stations-may-produce-more-waste-than-large-ones/
That should sink the ship with private venture capital for good.
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Labor in Oz attempted to gain govt by your prescription method Albie and posted every policy under the sun which allowed the government and murdoch to tear it all to pieces and we got morrison.
Albo changed all that, he 'shadowed' the govt, low key and determined and is now in power with a majority. I don't expect anyone to follow Oz politics but if you do you will see hopefully politics off the front page. If he gets it right his next term will be the one where he is allowed by the public to turn to the left.
Politics is a long game, I thought you would understand that.
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''This $30 billion project plans to power Singapore with Australian solar''
''The project, led by Sun Cable, aims to provide 3.2 gigawatts of dispatchable electricity, through 4200 km of high voltage direct current (HVDC) submarine cable and 12,500 hectares of solar arrays. It could power up to 15 per cent of Singapore’s electricity needs from 2028''
https://createdigital.org.au/30-billion-australia-asia-powerlink-project/
Most of the technology for this type of generation and transmission is already here.
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Really not seeing your point, Syd (post 43)...how does the election in Oz relate to the Energy Profits Levy, or Rachel Reeves failure to understand what Sunak was doing?
There is a big difference between keeping your powder dry and simply failing to understand what is on the table!
Reeves was outflanked by Sunak from the left, with a much bigger package of consumer support than Labour proposed.
She failed to demand Ofgem reduce the price cap, did not understand the negative impact of the 91p in the £ tax incentive, and still thinks that the private model of the energy sector can be made to work.
Latest from the shadow treasury team is a push back against the good sections of the Sunak announcement, the call to show helping low income groups does not cause inflation;
https://www.theguardian.com/business/2022/may/30/labour-urges-spending-watchdog-assess-impact-chancellors-21bn-package
This is just nonsense.
The £21bn cost of living emergency package will have a low impact on inflation, relative to other actions, and substantial borrowing is a good thing if it brings relief to fuel poverty.
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Let me know when the tories start to take dictation from labour Albie and I'll mark it in my diary.
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Right on cue, the UK govt is announces approval for new gas extraction with the Shell Jackdaw project, rejected in October before Cop26.
https://www.greenpeace.org.uk/news/jackdaw-permit-greenpeace-reaction/
Despite the excuse that the gas will help to offset Russian gas, it will in reality be sold on international markets.
The timing during the four-day Jubilee weekend speaks volumes.
It shows the tension between climate change policies, and energy costs and security issues.
A solution that meets both objectives is available at lower cost than this subsidy to the fossil industry.
Unleash the lawyers!
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Reading that, Albie, you really do have to wonder what the hell is going on in Government these days. Surely they can't be as stupid as to think the 91% tax break is a good policy? If we believe that, then what other reasons are there? Favours for friends? Or selves? Can anyone think of ANY other reason that isn't as mendacious as these two? I can't.
BobG
I note that in 2 full days nobody, nobody, has put forward a single reason why our beloved Government has implemented this 91% tax break for an industry the government is committed to phasing out asap. BB is noticeably absent for one. We can only conclude therefore that, somewhere, this is yet more corruption from the most corrupt government this country has seen in not quite 200 years.
BobG
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Bob, I am going to take a wild stab in the dark here - but might it have something to do with the £ millions in funding people connected with the fossil fuel industry have donated to Johnson & the Tory Party?
https://www.mirror.co.uk/news/politics/fresh-sleaze-claims-tories-take-25439527
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Ooh! I never thought of that!
Bob
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With the added advantage of a war with those that want action on global warming.
'woke, sciency, lefties want to let the british public freeze'
'poor british families, teachers, nurses, cannot afford to fry chips'
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Boris and his boys may be partial to a bung, and bribery and corruption may be part of the business expenses of the fossil industry, but there is also a bigger problem at play.
The energy multinationals make their money on units of energy sold....the higher the price per unit, the greater the profit return.
So they have zero interest in demand reduction, or energy efficiency.
If the UK insulated its leaky older housing, and put high energy efficiency standards into codes for new build, the likes of Shell and BP would have a lower domestic demand for their product.
Now if B+C is the method of getting Bozo onside, then preventing energy efficiency becomes as important as the green light for new exploration.
So hit the poor and middle income groups with a triple whammy....
1) avoid the windfall tax by getting consumers to foot the bill for new exploration and development costs,
2) crank up the bills with Ofgem allowing the price increases,
3) and continue to sell the fossil fuel to the uninsulated customers.
Lock in this model for the energy sector by including some new nuclear, with high costs per unit index linked into the future, and you have a roadmap to rising returns.....Eye watering infrastructure cost borne by the public purse, of course!
Until the climate emergency really kicks ass at least.
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Very well put Albie
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I think you should endeavour to spread your message to a far wider audience Albie. Complex subjects made intelligible, sense, practicality and an eye for the rtidiculous in both political posturing and political action. The world needs you to speak loudly Albie.
BobG
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Cheers Bob, thanks for that.
I do post stuff elsewhere, but it is very handy to put things here to see the reaction from a range of perspectives. The pushback sometimes shows something interesting.
We all start as Rovers fans, but in here we get to explore different topics and understand how others see the world.
One of the big plusses of the internet, if folk can step back from being rude to someone because they see things differently to you.
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Albie, the big problem on here is that too many posters only see their side of the argument and hardly ever understand that other people have a different point of view which to them is perfectly reasonable.
Insults are commonplace too.