Tuesday, 25 November 2014

Thornberry: Polly Toynbee Pronounces Fearlessly

The Emily Thornberry affair is right up Polly Toynbee's street, and she thunders into action in the Grauniad's Comment is Free.
Labour must fight off these bogus Tory attacks on class. It is a glorious tradition on the left that people with money join the fight against inequality.
Whoever could she mean ?

Anyhow, the Grauniad is obviously fearful that she'll be covered, not with glory, but with something altogether less fragrant - because they've not allowed any comments.

What a brave class-warrior, eh ?


UPDATE: After some delay, CiF has now facilitated comments.  As SW says in the thread below, they are not entirely sympathetic.  We may guess the moderator has been busy.

Monday, 24 November 2014

Oil price to continue falling this week; outlook weak

A long time since I put any kind of trading thoughts in a post (given how bad my position were/are, I have no right to comment!).

However, this week there is a nice gimme. Firstly, in an effort to try and keep Iran on side against ISIS the major nations have today extended their talks with them for another 6 months. No agreement could be reached on the nuclear aspirations of Iran, so instead of a reversion to previous stance, another roll of the dice has been agreed.

Next up later this week is an OPEC meeting where Iran and others are keep to try and agree a cut in supplies. Sadly for the cartelistas, but happily for everyone else except rabid Environmentalists, it seems unlikely that much will be achieved.

Firstly, desperate countries like Nigeria and Venezuela have no real room to cut exports as they need the money. Secondly, Saudi Arabia seems quite happy to be able to defeat its enemies by creating excess supply. Russia is selling what it can too and is not even in OPEC.

Rather weirdly for Saudi, but also very handily,  low prices cause:

- Problems for US Shale producers
- Problems for Russia and Iran in terms of low prices
- Problems for ISIS in terms of low prices
- Benefits for Europe, China and Japan in terms of helping low prices.

So, why on earth is Saudi going to agree to any major cut? It isn't.

Instead the fall out from today's standstill agreement with Iran and also Thursday non-agreement with OPEC is going to see the Brent and WTI lose another 10% this week in pricing as they head down to the low $60's per barrel.

Sunday, 23 November 2014

UK Power: How Did We Get here?

One of our esteemed Anons asked the following a day or so back:
I'm doing a college essay on "are we in danger of the lights going out and if so, how did we get here?". Anyone know a non-Wiki source of info on annual change in UK generation capacity, ideally showing what's come on stream and what's gone off, for each year since, say, 1997? (My theory is that Blair's dash to close coal and nuclear, replacing with wind chimes and pixie dust, is the culprit, but the facts may not support what seems a likely thesis)
First of all, I don't do the leg-work for college essays.  If you don't like the Wiki page (which admittedly is only a starting-point, and not 100% accurate) you'll see a link to DECC there; and I suggest that Ofgem's security of supply reports, and also the Grid, will be useful sources.

But Old Drew's History Corner can give you a quick top-of-the-head tour of your theory. 
  • yes, we are in danger (well, mild peril) of the lights going out - but more likely they will flicker a bit, then some dirty diesels will swing into action at great cost in £££ and CO2, to save the day
  • how indeed did we get here ?  A question worth posing because it is an absolute bloody disgrace
  • some hark back to the dirigiste days of the CEGB, claiming all would be well if they were still in charge.  This is bollocks: the CEGB gold-plated everything and were inefficient at our expense (no different to British Gas or any other bloated monopoly - but wastrels nonetheless.)
  • the break-up of the CEGB / introduction of competition was a SUCCESS.  A qualified success, which needed much more adroit subsequent regulation in some aspects than it got, see below, but still a success.  Remember: no country had ever introduced competition at the residential level before, and many claimed it was outright impossible
  • it has to be recognised that for approx 15 years during the post-CEGB 1990's and early '00s, firstly under the 'Pool' regime and then 'NETA' (mandatory bilateral trade, much superior to Pool) from 2001, there was no shortage of private £££ pouring into the UK, building a large fleet of big new gas-fired power plants where none (0) (nil) existed before 1991, which effortlessly displaced coal from the #1 slot, materially reducing both electricity prices AND CO2 emissions.  Oh, and the lights stayed on.  Mark well.  (The precise way in which this happened is subtle - but it did not involve government diktat, 'picking winners', or dirigiste subsidies.)
  • unfortunately, in the second half of this period a creeping reintroduction of vertical integration took hold: could have been stopped by regulatory authorities here and in Brussels - but it wasn't, and now it's pretty bad
  • the rot really set in when it was decided (a) to impose a 'green' agenda atop the newly competitive market; and (b) not to rely on the Emissions Trading approach to achieve this (the ETS has its flaws but they could have been corrected, instead of the scheme simply being sidelined.  (To be fair, some say you'd need a carbon import levy as well, which is certainly an arguable point.)
  • don't blame Blair for closing coal.  The EU directive (LCPD) is generally fingered as the proximate cause - but even that's over-simplifying matters.  Only crap old coal plant couldn't make the grade under this directive and the rest will (or could) soldier on for ages (Germany would be dead in the water otherwise). 
  • Blair is a big fan of uranium (as are Brown and Camerosborne). He kept schtumm about this until after the 2005 election - he thought nukes were electoral suicide - after which he hurled us into EDF's arms for a promised "fleet of new nukes".  That was 2008.  Needless to say, EDF has committed to none (0) (nil) at the time of writing, despite bizarre sums of money being offerred to them
  • simplistically, I suggest you blame the subsidy-culture resulting from non-stop governmental meddling (Miliband a big early culprit) that has set in since the green agenda really kicked off.  Would-be developers of new PP's have been on investment strike since they noticed that only suckers (and the Irish, curiously) put their money on the table without demanding a bung
  • finally: why haven't politcians been told the truth about how infeasible the situation is (i.e. that you can't do modern society based on windfarms, or catch up on a decade of non-investment in proper power plants)?  One important answer is that the National Grid gets a guaranteed return on any investment it makes that is mandated by government / regulators.  Their engineers are clever fellows and can 'solve' most problems by, errr, throwing money at them.  So when ministers & civil servants ask: can this be done? the Grid has every incentive to say - yes.  
There are of course other ways of framing this state of affairs but that's my two-minute explanation ...

PS as I have often remarked hereabouts, for a fully-functioning example of a big and equally vital industry that has worked just fine after the introduction of competition & dismantling of monopoly - take natural gas (in the UK as elsewhere).  Excellent levels of competition; massive amounts of new investment without subsidy - in the UK, completely replacing the steeply-declining indigenous North Sea gas production with new import facilities, both pipeline and LNG. etc etc.