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27/08/15

Three Quarters Of UK Manufacturers Want Green & Climate Policies Reformed

Wales's First Minister: Soaring Energy Prices Are Crippling Welsh Industry 


As many as 73% of manufacturers want to see legislative reform of the UK's current environmental and climate change policies, according to a new survey by the manufacturers organisation EEF. Respondents claimed that existing regulations are harming their international competitiveness. Earlier this year, EEF’s senior climate and environment policy adviser warned that large UK manufacturers could be forced to move their operations overseas if countries cannot agree a unilateral cap on emissions at the Paris climate talks, thanks to the burden of environmental regulation. --Brad Allen, Edie News, 27 August 2015
  



 
The UK Government must do more to curb energy prices which are “seriously disadvantaging” Welsh industry, according to Carwyn Jones. The First Minister was reacting to news that 250 jobs are under threat at Llanwern steel works as Tata Steel prepares to mothball its hot strip mill there. Unions have warned that “communities will be destroyed” as a result. Speaking on BBC Radio Wales, Mr Jones said Tata, which is one of South Wales’ biggest employers is just one example of businesses in Wales struggling with the cost of energy prices in Britain, which are must lower across the rest of Europe. --Sion Morgan, Wales Online, 27 August 2015
 
 
 
1) Three Quarters Of UK Manufacturers Want Green & Climate Policies Reformed - Edie News, 27 August 2015
 
2) Wales’s First Minister: Soaring Energy Prices Are Crippling Welsh Industry - Wales Online, 27 August 2015
 
3) It’s The Right Climate To Scrap The Department of Energy and Climate Change - City A.M., 27 August 2015
 
4) Reality Check: DECC’s Oil Price Forecast Updated - Bishop Hill, 27 August 2015
 
5) The Ever-Changing Story Of Flip-Flop Stern - Bishop Hill, 27 August 2015
 
6) Obama’s Next Target: Natural Gas - Editorial: The Wall Street Journal, 24 October 2015
 
7) Green NGOs Threaten To Sue EPA Over Shale Gas Regulations - Financial Times, 27 August 2015

 
 
 
As the government grapples with how to continue to drive down its deficit, abolishing DECC should be a key priority: it would both provide vital savings and encourage a new emphasis on cost-effective policy-making. Unlike other cuts across government, splitting up the department would have absolutely no material impact on the public. Moreover, the current political climate is favourable for such action. With green opposition deeply divided and ineffective, it is an ideal opportunity for the government to abolish this unnecessary arm of the state without much fuss (although, in practice, it is likely to happen after the Paris conference). Such a move would be good for cost-effective energy policy, good for consumers and good for the Exchequer. --Benny Peiser & Daniel Mahoney, City A.M., 27 August 2015

 

I thought it might be interesting to see how the DECC fossil fuel price forecast - you know, the one that is said to justify all those subsidies, feed-in-tariffs and renewables obligations. The comparison is startling - I've added a dot with today's Brent crude price. The claim that decarbonisation would only cost a few percentage points off GDP seems to have been a fairy story. --Andrew Montford, Bishop Hill, 27 August 2015
 
 
Lord Stern has mounted his high horse, ready to slay the dragon of opposition to anything he deems a good idea at the time. The problem is that Lord Stern’s views seem fluid to say the least. Back in 2009 he was telling the world that rich nations would have to forgo growth in order to stop climate change. Now he is telling us that portraying economic growth and climate change action as being in conflict is “diversionary” and a “misunderstanding of economic development”. The question readers want answered is “Does Lord Stern ever actually mean anything he says?” --Andrew Montford, Bishop Hill, 27 August 2015
 
  
 
America’s natural gas boom has been a rare economic bright spot, and even President Obama likes to take credit for it. But as his term winds down, the Administration is waging a war of regulatory attrition to raise drilling costs and reduce its competitive advantage over wind and solar power. Our guess is that this is the real political purpose behind the wave of new drilling rules. The Administration has made coal its main fossil-fuel target, but the green lobby also has natural gas in its sights. A frontal assault is too politically risky, which is why regulatory attrition is the preferred approach. --The Wall Street Journal, 24 October 2015
 
 
 
 
Environmental groups are threatening to sue the US environmental regulator, alleging it is failing in its duty to tackle a surge in earthquakes that they blame on the American shale revolution. The groups on Wednesday said they were preparing a lawsuit against the Environmental Protection Agency for not curbing the disposal of wastewater by oil companies, a practice that scientists say has triggered a spike in seismic activity. --Barney Jopson, Financial Times, 27 August 2015
 
 
 
 
1) Three Quarters Of UK Manufacturers Want Green & Climate Policies Reformed
Edie News, 27 August 2015
 
Brad Allen
 
As many as 73% of manufacturers want to see legislative reform of the UK's current environmental and climate change policies, according to a new survey by the manufacturers organisation EEF. 

Respondents claimed that existing regulations are harming their international competitiveness.
 
There are at least 10 pieces of legislation affecting manufacturers on waste alone, with another five key pieces of legislation that relate to energy consumption and greenhouse gas emissions.
 
One-in-two-out
The Government, in contrast, says it has saved business £1.5bn in the last four years through its Red Tape Challenge, which aims to simply and abolish unnecessary regulation.
 
Specifically David Cameron pledged to slash 80,000 pages of environmental guidance and has introduced a one-in-two-out rule, to gradually reduce the cost of compliance.
 
However, manufacturers surveyed by EEF say these efforts have made little difference. Only 7% said the changes had saved their company time and 9% said they had saved their company money.[...]
 
Earlier this year, EEF’s senior climate and environment policy adviser told edie that large UK manufacturers could be forced to move their operations overseas if countries cannot agree a unilateral cap on emissions at the Paris climate talks, thanks to the burden of environmental regulation.
 
Full story
 
 
 
2) First Minister: Soaring Energy Prices Are Crippling Welsh Industry
Wales Online, 27 August 2015
 
Sion Morgan
 
The UK Government must do more to curb energy prices which are “seriously disadvantaging” Welsh industry, according to Carwyn Jones. The First Minister was reacting to news that 250 jobs are under threat at Llanwern steel works as Tata Steel prepares to mothball its hot strip mill there.
 
Unions have warned that “communities will be destroyed” as a result.
 
Speaking on BBC Radio Wales, Mr Jones said Tata, which is one of South Wales’ biggest employers is just one example of businesses in Wales struggling with the cost of energy prices in Britain, which are must lower across the rest of Europe.
 
Full story
 
 
 
 
3) It’s The Right Climate To Scrap The Department of Energy and Climate Change
City A.M., 27 August 2015
 
Benny Peiser & Daniel Mahoney
 
THE Department of Energy and Climate Change (DECC) is small compared to other government departments, with a gross annual expenditure of just £5.7bn. However, as the government grapples with how to continue to drive down its deficit, abolishing this arm of the state should be a key priority: it would both provide vital savings and encourage a new emphasis on cost-effective policy-making.

The abolition of DECC would not be difficult to achieve. Energy policy could be transferred to the Department for Business and climate policy moved to the Department for Environment, Food and Rural Affairs (DEFRA). Indeed, in practice, many of DECC’s current responsibilities could be shifted relatively simply. For example, Nuclear Decommissioning – which accounted for 59 per cent of gross expenditure at DECC last year – could be moved to DEFRA with ease. Furthermore, many unnecessary green expenditure items could be phased out altogether. Spending in areas such as Renewable Heat, Carbon Capture and Storage and on the Committee on Climate Change should all be scrapped.

Merging DECC into other government departments would bring the UK in line with other developed nations too. Australia recently abolished its Climate Commission, transferring its essential functions to the Environment Department. Were the UK to introduce similar efficiencies along with the removal of wasteful spending, the Exchequer could save £380m by 2020-21, according to analysis by the Taxpayers’ Alliance.

Green activists claim that abolishing the department would send out the wrong “signal” in advance of the UN Climate Conference in Paris later this year. However, this PR approach is not in the interests of the consumer. Amber Rudd, the department’s secretary of state, is right to stress that DECC’s new priority is to keep the cost of policy “as low as possible for hardworking families and businesses.” This pragmatic focus on cost-effectiveness should be the government’s number one priority, not costly PR and token policies. 

There are a number of other compelling reasons to abolish DECC, not least its failure to control costs for consumers. Figures from the Office for Budget Responsibility suggest that, by 2020-21, the limits set for renewable subsidies are due to be 20 per cent higher than permitted, while DECC’s mismanagement has led to a policy-driven increase in energy bills of more than £100 per household annually over the past five years – despite falling oil prices. Moving energy policy to the Department for Business would give ministers a fresh impetus to ensure that costs for consumers and businesses are driven down, not pushed further up. 

When it comes to necessary savings across Whitehall, the abolition of DECC would be easy pickings. Unlike other cuts across government, splitting up the department would have absolutely no material impact on the public. Moreover, the current political climate is favourable for such action. With green opposition deeply divided and ineffective, it is an ideal opportunity for the government to abolish this unnecessary arm of the state without much fuss (although, in practice, it is likely to happen after the Paris conference). Such a move would be good for cost-effective energy policy, good for consumers and good for the Exchequer.

Dr Benny Peiser is the director of the Global Warming Policy Forum. Daniel Mahoney is a senior researcher at the Global Warming Policy Forum.
 
 
 
4) Reality Check: DECC’s Oil Price Forecast Updated
Bishop Hill, 27 August 2015
 
Andrew Montford
 
I thought it might be interesting to see how the DECC fossil fuel price forecast - you know, the one that  is said to justify all those subsidies, feed-in-tariffs and renewables obligations. The comparison is startling - I've added a dot with today's Brent crude price.
 

http://www.thegwpf.com/content/uploads/2015/08/DECC-forecast.png 
The claim that decarbonisation would only cost a few percentage points off GDP seems to have been a fairy story.
 
In related news, GWPF have again called for DECC to be closed down.
 
 
 
 
5) The Ever-Changing Story Of Flip-Flop Stern
Bishop Hill, 27 August 2015
 
Andrew Montford
 
Lord Stern has mounted his high horse, ready to slay the dragon of opposition to anything he deems a good idea at the time. The problem is that Lord Stern’s views seem fluid to say the least.
 
Back in 2009 he was telling the world that rich nations would have to forgo growth in order to stop climate change.
 

 
 
Now he is telling us that portraying economic growth and climate change action as being in conflict is “diversionary” and a “misunderstanding of economic development”.
 


 
The question readers want answered is “Does Lord Stern ever actually mean anything he says?”
 
Full post & comments
 
 
 
6) Obama’s Next Target: Natural Gas
Editorial: The Wall Street Journal, 24 October 2015
 
America’s natural gas boom has been a rare economic bright spot, and even President Obama likes to take credit for it. But as his term winds down, the Administration is waging a war of regulatory attrition to raise drilling costs and reduce its competitive advantage over wind and solar power.
 
The latest effort came last week when the Environmental Protection Agency issued its new rule to slash emissions of methane, a byproduct of oil and gas drilling. The industry will be required to cut methane emissions by 40% to 45% over the next decade from 2012 levels. The rule spares existing wells that make no changes, but all new or modified wells will have to install costly new methane mitigation systems.
 
The rule follows new ozone limits proposed by the EPA last November, new limits issued in March on hydraulic fracturing on public lands, new moratoriums on drilling in and around Alaska, and a potential rule cracking down on greenhouse gas emissions from drilling on federal lands. Keep in mind the states already regulate natural-gas drilling, and they’ve done it well enough to avoid major accidents.
 
Methane has long been a target of the green lobby because it is viewed as an especially potent contributor to global warming. Yet the EPA’s own research shows methane emissions from drilling have been declining rapidly.
 
The EPA’s Greenhouse Gas Inventory acknowledged this year that methane emissions from natural gas production have fallen 35% since 2007. That’s despite a 22% increase in gas production over the same period. The EPA last year found that methane emissions from hydraulically fractured gas wells had fallen 73% from 2011 to 2013. Overall methane emissions are 17% lower than in 1990.
 
The industry has every incentive to capture methane emissions because it’s also a valuable energy source that can be used to produce electricity and heat. The more methane that drillers capture, the better the return on their investment. The industry has already unleashed an array of technologies to prevent leakage from drilling, transportation and processing, and innovation is improving those tools.
 
The new EPA rule will impose large new costs for little benefit. In 2013 methane emissions counted for about 9% of U.S. greenhouse gas emissions. Of that 9% about 3% are subject to the new rule, which would cut them in half. A Cato Institute study notes that even if the U.S. ceased all carbon emissions “now and forever,” the effect would be to reduce the rise in temperatures by the end of the century by 0.10 degrees Celcius. The methane rule’s contribution would be a mere 0.002 degrees Celsius.
 
The rule will nonetheless do immediate harm to a drilling industry that is already under pressure from falling global energy prices. The shale gas revolution has created hundreds of thousands of jobs, reduced costs for U.S. manufacturers, raised millions in taxes and royalties for government, and increased U.S. energy security. The new costs will reduce the marginal return on drilling, which means fewer new wells.
 
Our guess is that this is the real political purpose behind the wave of new drilling rules. The Administration has made coal its main fossil-fuel target, but the green lobby also has natural gas in its sights. A frontal assault is too politically risky, which is why regulatory attrition is the preferred approach.
 
Full editorial
 
 
 
7) Green NGOs Threaten To Sue EPA Over Shale Gas Regulations
Financial Times, 27 August 2015
 
Barney Jopson
 
Environmental groups are threatening to sue the US environmental regulator, alleging it is failing in its duty to tackle a surge in earthquakes that they blame on the American shale revolution.

The groups on Wednesday said they were preparing a lawsuit against the Environmental Protection Agency for not curbing the disposal of wastewater by oil companies, a practice that scientists say has triggered a spike in seismic activity.
 
Earthquakes linked to oil and gas production have unnerved residents in Oklahoma, Texas and elsewhere, and have become an unexpectedly pressing problem for the US fracking boom that has upended energy markets.
 
The groups threatening to sue the EPA, their usual ally, say it has a legal obligation to update rules on the disposal of wastewater from oil production, which have not changed since 1988.
 
“We think EPA’s failure to act is particularly egregious in light of the shale boom and the vast amount of waste it has generated,” said Adam Kron, a lawyer at the Environmental Integrity Project, which is part of the coalition. “We’re flying blind here. We need to have some rules in place.”
 
The EPA would not comment on the lawsuit threat. But it said existing rules include requirements related to seismicity and that it would continue to work with states to address potential concerns.
 
The oil and gas industry is trying to fend off regulations that would require it to overhaul its practices or spend more money, as it buckles under the strain of sub-$40 a barrel US crude.
 
“Anything that raises costs right now is a problem,” said Kim Hatfield, president of Crawley Petroleum and an officer of the Oklahoma Independent Petroleum Association.
 
While fracking involves shattering rocks by blasting liquids underground, that procedure is not what the US Geological Survey blames for the quakes.
 
Instead, the USGS points to the way oil companies handle unwanted water released as a byproduct of fracking, which is pumped into separate subterranean wells where scientists say it causes the reactivation of formerly stable faults.
 
Full story
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