Self-sufficiency steel? Ore? Coal, oil ... gas storage ..?

The old debate we often return to, has surfaced again a propos of steel manufacturing.  To what extent is self-sufficiency in strategic commodities and capabilities to be maintained?  Procured?  Or even desired?  Some have strong inclinations to one extreme or the other, whatever the prevailing circumstances.  I tend to say that there's no immutable answer, no formulaic way of "optimising".  War and peace are critical input variables: but also the key given fixed externalities.  China has no oil, as I once diplomatically reminded a Chinese commissar who had just scorned Europe's enthusiasm for electricity interconnection and stated that a nation should not rely on imports of such a vital resource.

In the here and now, I and many others would put primary steel manufacturing on the strategic side of the line.  Clearly, Starmer has taken the same view at Scunthorpe (though curiously unmoved by Port Talbot, as the Welsh Nats bitterly remind him and indeed by Grangemouth / SNP), leading others to note that those vital "raw materials" we were all on the edge of our seats waiting for ten days ago, came from, errr, elsewhere (abroad).

Then comes Nils Pratley, extending the debate to gas storage and specifically, Centrica's huge offshore Rough storage facility.  Pratley is usually quite sound, and here he sets out a reasonably balanced range of pros and cons.

Steel was a security risk. What about UK gas storage? The government refused to allow steel furnaces to be turned off. Should it be happy with just six days of stored gas?

So here we go again.  

Nobody could disagree that now and for many years to come, gas ticks the 'strategic necessity' box.  Since we ceased to be self-sufficient in natural gas in terms of production from our own territorial waters (the early 00's), without any government intervention or subsidy the miracles of the free market secured a healthily diverse range of import sources and facilities through which to convey them.  How so?  We've told this story before.  

Because the decline of indigenous production could be, and was, seen coming a mile off, demand remained strong, and the companies involved were themselves strong, capable and confident. And that's where we are: able (as the energy crisis of 2021-3 showed) to withstand remarkable buffeting from the global market, and still keep homes warm.  For sure, the cost of doing so [i.e. paying world prices] was to some extent socialised, but the means of doing so were free-market means.  

And all this happened without Rough, which had been "permanently shut down" (© Centrica 2017 et seq) some years before as being uneconomic to its owners, the Tory government having more than once declined to bail them out.  But lo!  Miraculously, it transpired Rough had not been permanently shut down, but merely mothballed, and was rapidly pressed back into service by Centrica to avail itself of the profitable opportunities presented by Putin's gas crisis.

See, here's the problem in this very particular case: Centrica has form as a would-be subsidy-farmer.  That's the trouble with going down the "strategic" road.  Just like "green" or any other government-favoured enthusiasm, once the subsidies are spotted, every man-jack starts greenwashing / strategy-washing or whatever.  It becomes very hard to disentangle what could be a respectable strategic case from their self-interested special-pleadings.  

Even in 2025, with that recent crisis experience in hand, for all the ticks that natural gas puts in the 'strategic necessity' box, I'm not sure Centrica should be indulged.

ND 

British Steel [2]: where IS *Immingham*?

As recounted here before, in every energy co I worked for I always took every sensible opportunity to visit the plant - and make my staff do the same.  In an intrinsically physical business, a decent first-hand understanding of the hardware, the people that operate it, and the issues they must deal with, is IMHO damn' important for every one of a multitude of reasons.  (That includes getting the most and the best out of those folks on a sustained and sustainable basis, BTW.) 

With that as one's attitude, one quickly gets to share the disdain of the folks at the plant for those who treat the industrial nitty-gritty as something rather alien that happens somewhere, who-knows-quite-where, but in any case a long way from London & the Home Counties.  Is "Teeside" on the River Tee, perhaps?  It is in this spirit that over the past few days I have caught two different broadcasters offering the following couple of gems:

    "Scunthorpe get its raw materials** from somewhere called Immingham ..."

    "... the port of Immingham, in the North East of England"

That would be, errr, the second largest port by tonnage in the UK - wherever this obscure place might actually be.  Finally and at last, today I heard "... from Immingham, 20 miles to the East".  A simple and correct relativistic formulation which absolves them from knowing where either town actually is.  

Of course it's also somewhat rich to hear Greens and progressives of the non-labourist ilk eulogising belatedly over retaining a domestic, coal-fuelled virgin steel manufacturing capability, for building all that wonderful Net Zero kit, new houses etc etc, doncha know?  Well yes, here at C@W and its BTL friends, we always did know.  Pig-ignorant metro-gits.

ND

_________

** I swear the whole weekend went past without that convenient blanket euphemism "raw materials" being explicated as dirty old iron ore and COAL 

Are they mad? The new legislation on British Steel

Extremely odd things are happening all over just now and perhaps we are becoming inured to disturbing novelty.  In the UK, some might date this to 2015 and the rise of Corbyn, passing through Brexit, in an ever-rising, ever-accelerating crescendo of covid, Ukraine and now the daily lunacies of Trump.

Personally, however, I have rarely been more shocked than when I read this today: 

Emergency legislation allowing the government to instruct companies to keep loss-making steel operations in England open, or face criminal penalties for their executives, were passed yesterday during an extraordinary sitting of parliament.

For context: I bow to no man on the strategic imperative of being able to make steel in this country.  (Obviously, not everyone need agree.)  Nor do I object to swift and decisive use of the levers of power: in fact, more often I am criticising the inertia and lack of imagination of those who hold those levers limply in their idle hands.  

And I don't have the time to read up on the exact legislation in full, which may, I suppose, in the round be less shocking than the above summary suggests.  

But ... criminal penalties?  For an economic "offence"?  Obviously, there are such liabilities upon employers that flout health and safety regulations.  But financial affairs are intrinsically civil matters: are there any other even vaguely equivalent precedents?  The "personal liability" precedent that came immediately to mind to this former councillor was Thatcher's legislation on local authorities: to prevent rogue "socialist" councils like Lambeth and Liverpool from taking the piss at annual budget time, she made the chief finance officer personally liable for balancing the budget, with powers granted to the said official to impose balance if the democratically elected members persisted in mulishly voting for infeasible financial plans.  But these were not criminal matters.  Is Starmer proposing to bang up Chinese nationals ..?  Who was it that thought a sober grey lawyer would at least bring stable, rule-of-law government to the land?

Legislate in haste, repent at leisure.  In the wrong hands this precedent will be a joy to every mad leftist and green in the land.  You pick a piece of policy, and declare it a criminal offence to carry out any act inconvenient for said policy, property rights be damned.  What am I bid for failure to install heat pumps?  "Well, climate change threatens the well-being of everyone on the planet, it's preventing genocide we are talking about here!  It's obviously a criminal matter!!"   You can generate further nightmares for yourself.  Or indeed, generate a few prime candidates of your own for criminalisation!  It needn't only be leftists that play the game: we can all join in, see how they like that.  We are constrained only by the limitations of our imagination. 

Am I alone in my state of shock at all this?  Or do I just need to read the whole thing properly, and calm down?

ND

They Know, Really

Under a bold headline (that was doubtless written before even beginning to draft the article) -

Green policies are not responsible for the Tata steel crisis

- the Grauniad proceeds to cite all manner of confused and confusing stuff.  Credibility is not much enhanced by their quoting of that well-known authority and general arse John 'Bummer' Gummer: “There’s no evidence at all that there’s been offshoring of industry from Britain because of our green policies. For most industries, the energy element is extremely small and the amount of extra cost from the green levies is so small as not to be in any way crucial.”

But they do also publish this handy and illuminating graph from DECC:

Michael White in the same organ on the same day doesn't want to blame Brussels, but can evidently interpret the graph perfectly well for himself.

Last but not least, painful for progressives to admit, Ed Miliband’s 2008 Climate Change Act, which committed Britain to being a “world leader in reducing CO2 emissions” didn’t help. It now looks like the kind of vanity project which has hurt UK industry without doing much good. And don’t forget that in his “hug a huskie” phase Cameron whipped Tory MPs to vote for the bill too. It was a pricing gift to rival steelmakers, an example of the kind of moral imperialism as arrogant and self-regarding in its own way as the old-fashioned variety or more recently unilateral nuclear disarmament. What a painful learning curve we are on.

ND

"UK Industrial Policy" - Echoes of Hollow Laughter

Being somewhat embroiled in my own industrial policy just now, this post will be short.  The headlines on Tata and the British steel industry, alongside the steady drip of crazy news on EDF's Hinkley Point nonsense, make for desperate reading.  Show me one government minister of any industrial experience, let alone 'proven track record of success', as the job application ought to read.

The rumbling UK issue of the first half of this year must soon become entangled with these fiascos.  Cameron, surely, will be pressed to go ('cap in hand' as they always put it) to Brussels for some kind of bail-out triumph.  The 'remain' camp, presumably, would ideally like Brussels to bung Tata a direct EU 'solidarity' sub: that ain't gonna happen.  So the best they can hope for is an approval for some UK taxpayer-funded bailout - which isn't so easy to spin as a reason for staying in, is it?  ("See how quickly Mr Juncker approved a breach of his own rules on state aid, isn't it wonderful?!")

But how can the EU be called in aid of Hinkley?  They've already twisted themselves in knots to approve the tens, nay hundreds of billions of state aid on offer to the beast.  I realise there are no limits to the deviousness of the frogs and Juncker and Mandy and all these disreputable types, so nothing should be ruled out.  

Still, their creativity will be stretched to come up with anything plausible on these two fronts in the next couple of months.  If they succeed, there will be a long queue for referenda across the entire continent, hahah.

ND