Russo/Green Propaganda

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A new theme has emerged for opponents of shale gas.  The argument goes like this: fossil fuel companies engaged in the shale gas business in the USA are losing money.  They’ve invested more in the industry than they’ve recovered.  This proves that the whole shale gas story is a con.  It just doesn’t work in economic terms, so let’s not waste time pursuing it in the UK.

This of course ignores the massive positive impact that shale gas has had in the USA (and I was in Texas looking at shale gas operations just a couple of weeks ago).  Communities transformed, wealth and jobs created, house prices up, the balance of payments given a massive boost, import dependency cut, jobs previously “off-shored” to Asia coming home.  At it ignores a great deal more, as well.

The issue was brought to my attention by my good friend and Stroud PPC Caroline Stephens, who sent me a link to a programme from  Russia Today . 

It’s worth a quick look.  But we need to ask ourselves what the agenda is here.  The clue is in the broadcaster’s name: Russia Today.  The Russian economy is hugely dependent on fossil fuel exports — over 50% of government revenues come from these exports So gas and oil are fundamental to Russia’s economy, and gas means Gazprom.  The Russians are desperate to stop shale gas operations in Europe, so as to protect this vast chunk of their economy.

This is not just a paranoid minority view.  There have been rumours for months that Russia and Gazprom have been supporting the “green” NGOs that spread mendacious and scurrilous anti-fracking propaganda, and recently no less a figure than Anders Fogh Rasmussen, Secretary General of NATO, added his voice to the story.  If The Guardian says it, it must be true !

Second point.  There’s nothing the least unusual in new industries investing more than they get back during the early days.  The investment will continue to pay back for years, so investors may not worry too much if the profits don’t show up till later.  And here’s a parallel example from a wholly different industry:

Amazon is more than a bookseller: it’s nothing less than a bold attempt to change the face of retailing using IT and the web.  I think many would say it is succeeding — especially those booksellers and other retailers who say it’s driving them out of business.  Amazon has been around for best part of twenty years.  Its sales could well reach $100 billion in the current year.  It sells more than 100 million distinct products.  Yet founder Jeff Bezos has said that Amazon’s objective is market leadership rather than short term profit, and its very modest profits in relation to sales are evidence of this policy . So no, there’s nothing unusual about an industry making low profits in the initial period — and a rather long initial period for Amazon’s long-suffering shareholders.  So it may be with shale gas.

But third, there’s a much more fundamental point.  The US has a law prohibiting the export of fossil fuels . This has been in place since 1975, and perhaps made sense in the context of the oil crises of the ‘70s.  It doesn’t make sense now, as the US is set to become the world’s largest oil producer.  There is a strong case being made by the industry to relax restrictions on gas exports.  Indeed a draft resolution  to that effect was passed at the ALEC Conference in Dallas which I attended a couple of weeks ago.

As a result of the US law, and the ban on exports, there is currently a glut of natural gas in the USA, so prices are depressed.  This is not, as Greenpeace would have you believe, a measure of the failure of the industry.  It’s a measure of success, resulting from the huge output of gas.  I hope that America’s legislators will have the wisdom to relax the export restrictions.  The effect will be that US gas producers will be able to command global prices for gas, some three times higher than current domestic US prices.  That may be tough for domestic US consumers, but it will be very good news for the American balance of payments, for the US Treasury, and so for USA Inc.

It will also eliminate another distortion which I found in the US energy market.  Gas is so cheap that nuclear is finding it difficult to compete.  Current nuclear power stations are just keeping their noses above water, but in today’s pricing environment, no one is going to invest in new nuclear capacity.  A relaxation of export restrictions on gas would remove this market distortion, and make investment in nuclear attractive again.  That must be good for America’s long-term energy security — and the Greens can console themselves that more nuclear will help cut emissions (if that makes them feel better).

Shale gas is a huge opportunity for the UK and Europe.  It’s time to slap down the mendacious green agitprop.

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41 Responses to Russo/Green Propaganda

  1. There’s no question that we need gas, now and for the future, only, where it comes from. The CBI is very clear that the economic argument for hydraulic fracking in the UK is strong, mainly because of the benefits it brings as a whole. There is cross party support (with the exception of the Greens.) And gold standard regulations. The argument against it is emotional, and with the possibility of outside influence from powerful interests. There is still a need for more data which can only be collected by experimental drilling, we should push on with this urgently whatever the concerns. Only by collecting this data can the concerns be properly considered.

  2. Thomas Fox says:

    Well put fenbeagleblog not only are the Greens meddling in anti oil and gas but also in CAP food regulation It appears to be some EU left wing communist conspiracy to control all people from the centre alas not as we understand democracy ?

  3. David H. Walker says:

    Gotta wonder what will happen to Russia’s strategic efforts if the US does decide to compete in their “fossil” fuel market. How will they look at Crimea?

    • Roger Helmer MEP says:

      Indeed. Dropping the US ban on gas exports would be good for the USA, good for the UK, good for Europe, bad for Gazprom & Mr. Putin.

      • catalanbrian says:

        I am not so sure that it is the “mendacious green agitprop” that needs slapping down, but the “frack at all costs” lobby. Yes fracking in the UK and other parts of Europe may well produce cheap energy, but on the other hand it may well not. There is evidence of this already in Poland, once considered to have great potential for shale gas, where flow rates from exploration wells have been considerably below expectations. In any event this energy source, however vast it may be, is still finite and should not be squandered willy nilly whilst there are perfectly adequate renewable options (including nuclear) available to us. UKIP and its supporters seem to have forgotten just how quickly we squandered the vast amount of North Sea oil and gas that we once had.

        As I have said before we should be looking at increasing the amount of our energy supplied by renewables, not reducing it as UKIP’s muddled and unrealistic energy policy demands. And, equally importantly, we should be minimising the amount of energy that we waste (poorly insulated houses; lights left on when not needed; items on standby; excessive street lighting etc, etc).

        I would suggest that this is not “mendacious green agitprop” but clear, sensible thinking that puts the wellbeing of ourselves, our children and our grandchildren at the forefront of our energy policy.

  4. Ex-expat Colin says:

    I saw the BRICS arrangement while the World Cup went on. My guess is that Putin is rearranging his plans significantly. I note that a new world type bank has been setup by BRICS to counter the WB and the IMF. Talk in the BRICS domain is about less reliance on the US dollar.

    RT is interesting and so is NHK. There are distinct tribal problems in the Far East that could spread or perhaps get somewhat worrying. Things are moving….away from the West I’d say.

  5. David says:

    It will not surprise me if our leaders screw up and mess up this wonderful resource, maybe sell it to China, rather than UK and its people getting the benefit. We were, well the gov of the time, labour , daft enough in 1947/8 to give russia our jet engine.

    • Roger Helmer MEP says:

      But in the broadest sense, it doesn’t matter that much if we sell gas abroad (for money!) or use it locally. It doesn’t matter too much how the benefit is shared between consumers, shareholders, the Treasury or whatever, so long as this potentially vast wealth gets into the UK.

      • David says:

        Hi Roger,

        Yes thats fine what you say, my concern is that we dont do the best deal, or give to much % away, or sign away to much power over the shale, look at the concerns over the Post office sell off.

      • David says:

        Ive no problem selling the fuel as long as its a fair price.

      • DICK R says:

        As long as we can keep the thieving hands of Brussels off it ,remember the fishing industry.

  6. Richard111 says:

    Fracking is not new! Been a routine procedure for 60 years or so in the oil and gas industries. Propaganda works well with people who never look anywhere except at TV screens.

  7. Mike Stallard says:

    The Middle East is exploding into a thousand different – and sometimes very barbaric – factions. Baroness Ashton and the other Commissioners are trying to take over the Ukraine from the Russians, who do not appreciate our version of EU democracy…
    So our all important oil supplies are growing more and more precarious. Without them, we cannot eat, we cannot travel, we cannot heat our houses and we cannot write stuff on blogs for Mr Helmer.
    And yet we self righteously ban the exploitation of the huge reserves, which lie beneath our feet!

  8. DICK R says:

    IF fracking causes pollution who cares we need the energy , if the ecolunatics want to live in draughty mud huts ,let ’em, I for one have no intention of living in a third world hovel just to please those arseholes !

    • catalanbrian says:

      Now Dick, that is a really well thought out and sensible comment isn’t it?

      • DICK R says:

        It is a perfectly logical position to take, the ecolunatics if they so wish , are quite welcome to follow their consciences , but how often do you see them denying themselves all the advantages of modern life, good food, clothes, transport housing etc.?
        There is a price to be paid for everything, a little pollution is one of them , we must be realistic and accept it .

      • catalanbrian says:

        But Dick. Reducing our reliance on fossil fuel energy does not mean that we have to live in “third world hovels”. It does mean that we perhaps have to think a bit more about turning lights off, using low energy appliances and to increasing the amount of power supply from renewable sources, but is that not a wise thing to do anyway.
        I do not live in a third world hovel and I have as much electricity as I need from my solar panels as I am not connected to the grid. My heating is from wood that I have grown and sawn up myself and the only fossil fuel that I use is diesel to power my car and my tractor and very occasionally my generator and a bit of petrol to power various bits of machinery such as chainsaws. If you were to visit my house I am sure that you would not think that you were in the house of an “ecolunatic”, but in a pretty normal rural house. I also happen to enjoy good food, good wine and decent clothes, so it is possible to do it and with very little sacrifice.

    • Brin jenkins says:

      Some pollution happens from time to time, I saw the Torrey Canyon tanker wreck unfold and boy was it a mess, hellish for perhaps 3 months. The following year one had to look a bit for the mess but over 5-6 years nature did dealt with the problem. Now a few older locals can point out a patch of what was crude oil on remote rocks above the water line. Its turned to a friable soil material with salt resistant coastal plants thriving in it.

      Nature is wonderful.

  9. DICK R says:

    One or two volcanic eruptions release billions of tons of CO2 , Methane , sulphur ,CFC s , and all the other baddies that make the ecolunatics piss their pants in fear , far more than all the industry and so called man made pollution that could ever have been be caused in the past or will ever be caused in the future .

  10. David says:

    Catalanbrian

    Have you seen the well thought out actions, behaviour of the protesters. The so called “peace brigade” are far from that, Just like the Anti fachist,s , badly behaved also in many cases.

  11. David says:

    I have read some time back that it takes about 70,000 wind generators to replace 1 power station, where we going to put all those Brian, doubt we will see them all revolving at once, totally unrealistic devices,& policy.

    • catalanbrian says:

      Not so. You have presumably read misinformation put out by the anti wind lobby. The actual figure is somewhat less than 10% of the number you quote.

    • Brin jenkins says:

      The problem as Brian knows is much green generation is not when required. A bit like having all your cooked breakfasts for the whole year on one morning. Much will wasted, generators turned off overnight when demand falls, 28% is lost in National Grid transmission. Every wind generator is designed 5 times over its expected output to cover less than the maximum winds expected. Imagine if all of our power generators had to be 5 time larger than needed on optimum days, all that extra copper and expense to cover a false green theory that reverses normal science to support its claim!

      Photo Voltaic farms are even more dubious. During July the maximum output is delivered during daylight hours. In February output fall to just 12%, this is in shortened daylight hours just when UK load demand peaks.

      This is without costing in all the idling standby generators kept ready for the expensive balancing act to reduce blackouts. The 10% was thought to be the maximum renewable possible, over that we have an increasingly unstable load/supply situation.

      http://www.gridwatch.templar.co.uk/

      We must be mad.

  12. DICK R says:

    Given a few more years exposed to North Sea gales and immersion in sea water there is not going to be much left of the precious off shore wind farms ,the maintenance costs on theses useless monstrosities will be catastrophic.

    • catalanbrian says:

      Er, but have not oil platforms been in use in the North Sea for many years? You are allowing your anti wind hysteria to take control of your senses, I am afraid.

      • DICK R says:

        There are far fewer oil platforms and I know from experience they are manned 24 hrs per day and the maintenance is an ongoing battle with the elements

      • catalanbrian says:

        Your knowledge from experience is incorrect, or out of date. In the North Sea roughly half of the oil and gas platforms in the UK sector are unmanned. I cannot comment on other areas. You should also be aware that the Maunsell forts constructed during WW2 in the North and Irish Seas are still there, despite little or no maintenance since being decommissioned in the 1950s.

      • David says:

        Hardly comparable items Brian.

      • catalanbrian says:

        Please explain. What is not comparable? And why?

      • David says:

        A fort constructed from massive stones, or concrete with little if any electronics, generator, is nothing like a wind turbine, chalk & cheese.

      • catalanbrian says:

        I think that you will find that the electronic stuff is some considerable distance above the sea, so is unaffected by it. Indeed it is much further from the sea than the complicated electronic stuff on board ships which controls modern shipping, and that seems to be OK. In any event is not the height of the tower one of the complaints made by the anti brigade – that they can be seen from miles away and thus blight the landscape/seascape?

      • David says:

        So all the electrics are at the top eh, no wires coming down and under the sea, sort of wifi power.
        Still it only has to deal with a trickle of power now and again. Good for 25 year then, how old did you say the dissused forts were?

      • catalanbrian says:

        That is a facile comment, and you know it. Presumably there are also great problems with leakage on the undersea cables that join the UK to the continent? And the design life of most offshore wind turbines is 20 years, so yes good for 25 years, especially the newer ones with concrete structures which are likely to last for some 50 years.

      • David says:

        Yes I do know it., I still think wind turbines are expensive for the power produced.

      • Brin jenkins says:

        Brian we have a so called wave hub off Hayle in Cornwall. This was built at tremendous cost from our green levy taxes and yet I understand nothing is connected to it after some 5 years.

        Breaking news! The first experimental device is to be connected. If the mooring chains haven’t rusted away yet. I needed to renew my top chain every 4 years on average for my Twister class yacht.

        It strikes me the budget is unlimited in some quarters, truly innovative inventions like the Tornado Machine are squashed at every turn. This device runs on sea water chilling it in the process. Think physics, how much energy is used to heat a ton of water by 1 degree C? Tornado’s produce ice crystals releasing a great deal of power and are a natural phenomenon unlike a wind turbine .

      • catalanbrian says:

        But, Brin, you are using individual failures (I am not familiar with this wave hub) to make general criticisms and that is not logical. Likewise I know nothing about the Tornado Machine. As I have repeatedly said my concerns are more about minimising our extraction of finite fossil fuel resources than climate change (although this is also a serious matter that we need to try to deal with) and this can be achieved in two ways. We either reduce our reliance on fossil fuels by increasing the amount of energy produced by renewable resources, or we seriously cut back on our power consumption, or a combination of both.

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