Aletho News

Low hope for low carbon

By Andrew McKillop | Excerpts | March 22, 2010

Annexed to the climate change and global warming hysteria that received its political kiss of death at the failed Copenhagen “climate summit” in Dec 2009, the rationale for why everybody sensible has to be so concerned about this threat to humanity is that clean and green energy will save us. Not only “the climate” and “the ecology,” including polar bears, low lying countries from Holland to the Maldives, coral reefs, Himalayan glaciers, people living along tropical storm tracks and all the rest — but also jobs in our cities. Along with green jobs, the new crusade for low carbon energy would cut oil import bills to nothing, balance trade with the rest of the world, improve national finances and strengthen the national currency. Everything is possible!

Green growth strategies flourished in the 2003-2009 period, in the wake of constantly rising oil prices and spiraling hysteria about climate change. The bottom line of the climate change priests and soothsayers was that low carbon green energy, developed as the only way to save us from climate apocalypse, would or could also save the economy.

In fact, only high oil prices and high energy prices can make green energy feasible without depending on government aid, the carbon finance circus, and coming carbon taxes, but this is not a politically correct argument. Preferred approaches are to use public funds to sponsor and when it gets necessary, bail out carbon finance gamblers, and supply a raft of public funds to subsidize the green energy fantasies of the corporate elite.

These fantasies already have a bad track record in the short period since “going green” became big business, from about 2003. Several started with a death wish for early bankruptcy, the most recent and biggest example being US maize-based bio-ethanol fuels production, which rode a boom-bust speculative finance cycle through 2005-2008. Making car fuels from food grains and vegetable oils is not only a way to generate high food prices leading to food riots in poor countries, but an expensive, inefficient, low-yielding method to substitute a small amount of present demand for oil-based car fuels. Today’s production overcapacity for windmills and solar photovoltaic power already threatens a repeat of the epic biofuels boom-and-bust, during which even Bill Gates managed to lose money (about US$44 million). Hard-headed short sellers of bio-fuel company stocks, like Steve Cohen’s SAC Capital LLC made hundreds of millions of dollars on the certain and sure collapse of share prices in this overblown sector during 2007.

Coming soon, really big corporate losses feeding short selling profits for some, huge losses for small investors, and demands for government bailouts from the Too Big To Fail among corporate losers, will be generated by the electric car boom-and-bust.

WHY THE HYSTERIA ?

Climate change advocacy and carbon finance have grown together in the OECD countries with corporate interests frenetically wrestling for the widening range of constantly changing government subsidies, aid, carbon credits, clean development offsets, feed-in tariffs and tax favors to develop alternate energy. Advocacy is necessarily tinted with hysteria of the type “We are saving you from death — You don’t ask the price.”

Politicians, who always appreciate any pitch that captivates the child-brained crowd, quickly warmed to global warming hysteria. This was despite its far-out apocalyptic “message” that unparalleled disasters including Biblical-style floods will strike the planet before the end of this century — unless the People behave. Unless the average car buyer gets to like electric and hybrid cars (despite the braking problems), recycles household rubbish to make it easy grubbing out metals, glass and plastic, buys a bicycle imported from China, rides in buses or trains but patriotically buys a government subsidized oil fueled car, pays more for organic and “bio” food, uses less electricity, saves oil in countless ways, and goes green in every confusing and conflicting way they are told.

Maintaining public angst, and public approval were unfortunately confused as being exactly the same thing by political, media and corporate spin doctors. Constant exaggeration of the invented climate menace was decided necessary. This led the high priests of hype, such as Al Gore, Rajendra Pachauri, James Lovelock, James Hansen and other climate change gravy train riders to desperately rival each other, and babble ever more ridiculous fire-and-brimstone at the microphone. Drifting always further in delirious wafts and spirals of lies, distortion, exaggeration and blatant propaganda, the high priests of hype were too stupid, too arrogant to see the end coming in late 2009.

THE CONVERGING PLANKS

Rising hype on global warming soon overshot into stratospheric data fraud by UN credible (that is IN credible) high level experts on climate change, led by former railway engineer Rajendra Pachauri and failed politician Al Gore. The spin and hype on global warming catastrophe was however welcomed by political elites in 2008-2009 as a handy way to take the tiny public mind off gargantuan meltdowns in the finance, bank and insurance sector, and the massive bailouts for government-friendly corporate thieves, gamblers and fools.

Agitprop was needed because the economy went out of control. Recession did serious damage not only to real people and their real jobs, but collateral damage to the credibility of politicians, running the magic New Economy hands free, with only the fingers of their corporate finance friends on the economic jugular vein. These greedy fingers squeezed a lot too hard in 2008, with the result being the house of cards fell apart, needing strenuous diversionary tactics.

Any faltering of economic growth, any loss of credibility in the ability of exactly the same politicians, and exactly their same corporate friends to magically restore the economy when it temporarily (of course) stops growing are two more menaces, needing energetic response. Credibility for “global warming catastrophe” was worked into the same set of political elite fears, as corporate green energy player fears of a decline in government subsidies for their newest and best boom-bust gimmick.

In such strenuous and stirring circumstances, climate extremism and doomsterism richly larded with fake facts from junk science was a basic need. Governments must have their purse strings prized open, and kept open by the corporate and policy elite. Politicians need to be loved and admired, or at least re-elected for their far-seeing decisions. Media owners and operators who revel in Great Causes which sell newsprint, and like to imagine they still control what Mr and Mrs Average think, were quick to come on board for the climate crisis ride. They also stayed too long, forgetting that Internet and even word of mouth were working against them.

Overcapacity of wind power and solar electric power manufacturing capacities is now widespread in many countries, even in China and India, as the “low hanging fruit” of the best sites, the biggest subsidies, the largest public support and acclaim is used up — and oil prices although rising are still far behind the peak attained in 2008. As the economic rationale declines, huge new green energy ventures shift toward ego-trips for politicians, and become purely prestige. Chinese vice minister for Industry and IT, Miao Wei, described massive wind farms in China as essentially “vanity projects,” March 11, 2010 in part due to probable rapid wear and tear of turbines increasingly located in hostile locations, such as China’s dusty deserts, and increasingly in deep water offshore wind-farms ever further from land.

Staying credible is always most difficult as the curve of public knowledge rises, and the new gimmick does not deliver. Probably the biggest threat to corporate and Big Government low carbon energy and the related fantasy of the sustainable economy, is loss of credibility for the “menace of catastrophic climate change.” If the menace isn’t so dire as it seemed before the massive failure of the Copenhagen climate summit in December 2009, why should governments rack up even more debt, to finance unsure, high cost low carbon energy with public loans, grants and support? This is the question that kills, like a wooden stake for errant low flying vampires.

AL GORE STILL HOPEFUL

Al Gore is not fazed by the Copenhagen rout and continues to announce with eye popping sincerity and conviction (in a February 28 interview with the New York Times) that the world faces “unimaginable calamity” from global warming. He added we must all act now to save human civilization as we know it (perhaps a reference to Afghan war, football, Twitter and Facebook?).

Going further because time is limited to less than a century, the selected, tried and tested members of the global warming hysteria circus, with rich pickings from the corporate and political elite’s full adoption of global warming hysteria, are now fighting to stay up the greasy pole. Following the Copenhagen rout and Climategate, the gravy train riders are likely to go one mile further in their fantasies, and need all the ammunition they can grab. Now joined to their predication of the coming apocalypse, “unimaginable calamity” also includes high oil prices, placed by Al Gore at a price level around $80 a barrel. Even if the consumer herd has forgotten the polar bear’s plight and prefers Haiti quake stories to threats of the Maldives sinking (under a million tonnes of concrete tourist coastal works), they will rise like wounded tigers if gasoline prices rise another 50 cents a gallon. Al Gore hopes !

Al Gore rolls his eyes at the microphone and thunders the killer numbers — the oil bill of the USA costs “hundreds of billion dollars a year.” To be sure, Gore also reminds his uncritical if not brain dead admirers that oil exporter countries are run by dangerous and hostile regimes, uninterested and perhaps not even believing in climate change. And that is dangerous.

The most recent record annual net oil costs of the USA achieved a little more than two of those Al Gore “hundreds of billions,” reaching about $220 billion in 2007. This can be compared with the $1,300 billion US budget deficit for fiscal year 2010 recently announced by Obama, or the cumulative amount of financial bailouts to Wall Street by Paulson, under G W Bush, and Geithner under B H Obama in 2008-2009. This totaled at least $1,500 billion. Similar budget deficits, up to 12% of annual GNP, apply in Europe and state bailouts of corporate financial gamblers in Europe have cost similar amounts as those in USA, well above $1,200 billion in 2008-2009.

* This raft of debt-based spending mostly to bail out reckless gamblers in the finance sector would cover roughly 10 years of total OECD oil import costs at an average $100 a barrel.

Al Gore and the ‘extreme global warming community’ have to stay hopeful, and maintain the hype because signs of flagging interest or “conviction” by political and corporate leaders is starting to show in their careful avoidance of climate crisis sound-bytes, post-Copenhagen. Most OECD heads of state, at least before Copenhagen, vied with each other to beat Al Gore with heart-wrenching appeals to citizen concern, calling the failed and bizarre conference held in a Scandinavian capital in deep winter, “the last chance to save the planet from global warming catastrophe.”

This talk has been glaringly absent since December, suggesting OECD heads of state, notably of the US, Germany, France and UK could soon backtrack on their so-sincere conviction that their voter masses need a politically forced, ultra rapid development of “green energy”. […]

ENERGY TRANSITION AND ECONOMIC ROUT

Debt financing of everything, especially the ever rising and unreal goals set for energy transition by heads of state and political leaders in the big oil importer countries, will continue being needed until and unless carbon taxes and trading attain the annual turnover able to generate the funding needed for the ever larger targets announced by political leaders. Another condition for generating the finance needed for these plans includes a return to economic growth. Present carbon finance and trading are proudly estimated by the World Bank as attaining $126 billion in 2008-2009, but trickle-down and spin-off from trading gains and losses on a raft of complex and ramifying climate change paper, to real spending on real world green energy is low.

Falling credibility of climate change hysteria from extremists like Al Gore and Rajendra Pachauri, and lower-rank members of the climate change circus, such as “Gaia philosophy” writer James Lovelock, James Hansen and Club of Rome intellectuals now suggests falling pay-checks and cheap finance loans for the gambling community. At this time, orating about Apocalypse Now from climate change and always going further in bending the shock figures and statistics could be a losing strategy. The risk is clear: the climate change circus has now talked itself off-stage.

Before the Copenhagen rout, announced goals of energy transition in the OECD countries had attained extreme and impossible highs, for example 80% reductions in CO2 emissions and implied cuts of 80% in the dependence on fossil energy by 2040, as announced with a winning smile by Obama, and the leaders of Germany, France and UK before the climate summit. To keep the public and consumers happy, and make their targets for energy substitution with low carbon yet more fantastic, yet more impossible, these leaders added that total energy production and consumption would keep on growing. Thanks to the green economy, economic growth would not only be restored but also “strengthened.”

Financing needs were never spelled out for these playful fantasies, but can be guessed, and are probably in the 15-30 trillions of US dollars range to 2040, at current dollar values. This can appear possible, but in real terms is impossible. Achieving this kind of long-term transition of the global energy system and forgetting the ideological quest “to save human civilization as we know it,” would need a real Marshall Plan for Energy. More likely, current-crop leaders of the OECD are on track to produce a real Economic Armageddon, becoming more possible each day. […]

Steven Chu, Al Gore, Rajendra Pachauri and many other defenders of a forced march to energy transition either avoid any discussion of cutting energy consumption, or claim that growth in total energy consumption is entirely possible. In the case of Chu however, there is already de facto admission that “greening” electricity supply will need growth of nuclear power, the Smart Grid, and major advances in energy storage. Again in the US case the very fuzzily-defined and technologically fragile domain of “advanced energy storage” is already forecast as needing tens of billions of dollars investment, on top of the tens of billions of dollars that Obama has made available for nuclear power because of its ability to generate constant baseload power. Smart Grid development, to be sure, is also forecast as needing tens of billion dollars investment in the next 10-15 years.

Exactly like national debt, budget deficits and bailouts for “too big to fail” finance sector gamblers, the dozens of billions add on to the hundreds of billions elsewhere. On the ground, almost nothing happens. Apart from the critical and basic lack of realism of most targets and costs of current-crop plans for energy transition, the most basic unreality concerns a very simply question: Who will pay for the Brave New World of soft energy? An even more basic question is: Do we need energy transition?

VHeadline.com oil industry commentator Andrew McKillop can be contacted at: andrew.mckillop@gsoca.com

March 25, 2010 - Posted by aletho | Deception, Economics, Science and Pseudo-Science | Al Gore, Global warming, James Lovelock, Sustainable energy, United States