Old Globe

Labor’s Climate Bill is an economic precipice

The Spectator, 08 August 2022
   In what The Australian called a ‘capitulation of the Greens’, the government’s Climate Bill has passed the House of Representatives. Its passage through the Senate is a formality.

With the Bill’s central requirement being that greenhouse gas emissions fall by 43 per cent (from the 2005 base), it amplifies the 28-30 per cent formal reduction level set by the previous Coalition government. In pursuit of decarbonisation to combat a mythical ‘climate crisis’, the Bill is designed to stymie the use of coal and gas. In doing so, it will increase the costs of mining, manufacturing, and other services; it will also increase costs in the farming sector – including by diverting the use of productive agricultural land into a carbon sink.      ..... Read online      ..... pdf

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Wrecking a Nation One Electricity Bill at a Time

Quadrant Online, 29 July 2022
   The first thing to recognise is that for many years now governments — Labor and Coalition alike — have been hard at work destroying the low-cost electricity market that Australian businesses and consumers once enjoyed . The second thing to note is that there is an actual undertone of energy realism — yes, really! –about the Albanese government, but it is no portend of good news: “You’ll know what we’re up against when your electricity bill arrives,” the Treasurer said on Thursday (July 28). That would be the bill we were assured during election season would fall by $275 once Labor waved its magic wand. 

We can see the degeneration of Australia’s electricity security graphically presented in the chart below which tracks July electricity    ..... Read online

Politicians destroy nuclear when the world needs it most

The Spectator, 25 July 2022
   Human advancement has rested on harnessing increasingly dense sources of energy from non-human origins. Animal power, burning wood, wind technology, and water power were crucial in allowing early civilisations to develop.

The Industrial Revolution that gave humanity income levels 10-100 times higher than those of antiquity was driven by hydrocarbons which brought over 100 times the power density of wind.

Nuclear, with 10,000 times the power density of coal, has been heralded as ‘the next step’ for the last fifty years.      ..... Read online     .....pdf

Europeans punished by expensive renewables backed by Russian gas

The Spectator, 14 July 2022
   Europeans are now paying heavily for their shift in abandoning coal and nuclear and adopting renewable energy supported by Russian gas.

Across the continent, coal generators have been closed as have nuclear facilities in a headlong pursuit of the ‘transition’ to renewables. Throughout the Western world, that transition has been touted as inevitable by the ‘experts’ now dominant within government and among their advisory detritus.

Only this week Australia’s very own CSIRO           ..... Read online     .....pdf

The (expensive) brave new world of ‘clean energy’

The Spectator, 09 July 2022
   The market was working pretty well 20 years ago and is not expected to be much larger by 2030. It involved a capital asset base in terms of transmission at about $22 billion and for the electricity energy itself, in today’s dollars about $100 billion.

We now have two national plans for the future: Rewiring the Nation,  ..... Read online     .....pdf

Climate Justice? Victoria’s fresh assault on businesses

The Spectator, 01 July 2022
   Last week’s restoration of the electricity market, following the regulator assuming full control on June 15, means the energy crisis is apparently over. But spot prices remain at around $230 per megawatt hour – a mere sixfold their historical levels. As for gas, well that’s still price-controlled and consequent supply shortages are causing business closures.

Victoria has done his bit to create the crisis.

Premier Dan Andrews tripled the royalty tax on coal – the straw that broke the back of the Hazelwood Power Station, which produced a quarter of the state’s electricity. Then, as with South Australia’s  .... Read online  ...pdf

Climate Change's 'Pigouvian' tax

The Spectator, 27 June 2022
   Rod Sims, formerly head of the ACCC, advocates a carbon tax as a ‘Pigouvian’ solution to the global damage which he says is being created as a result of burning coal, gas, and oil.

A ‘Pigouvian’ tax is set at a level where the damage from distorting the economy, which any tax inevitably causes, is offset by the rectification that it brings about. Such a tax is generally considered superior to having the government centrally determine measures to redress inadvertent damages resulting from production. This is because it incentivises firms to seek out the cheapest solutions and avoids governmental failures inherent in ‘winner picking’

Henry Ergas points out that the proposal Rod Sims .... Read online  ...pdf

Standard of living to fall sharply

The Spectator, 24 June 2022
   In the pre-Covid days, strike activity was fast disappearing. In Europe, the average days lost from strikes more than halved.

In Australia, the fall was even more dramatic – from over 500 strike days per 1,000 workers in the 1970s, to just 14 in the decade to 2020.

Suddenly, in Europe a spate of strikes is underway. They are in England and threatened in France, Spain, Italy, and even Germany. These are taking place ‘amid spiralling increases in the cost of living’ which describes EU annual wage increases averaging 2 per cent compared to price increases of 8.8 per cent.     ..... Read online     .....pdf

Albo's war against Capitalism

The Spectator, 21 June 2022
   Seeking to disabuse critics of the notion that his interest and expertise in economics were Whitlamesque, Anthony Albanese released a couple of pages of an undergraduate essay on economics he wrote nearly 40 years ago. The material was replete with supply and demand curves to burnish his credentials on any sceptic.

Mr Albanese’s economics degree was from the ‘political economy’ school of Sydney University – which had a strongly Marxian focus – stressing on how the economy should best be managed by those who consider themselves well able to understand and manipulate it. The university mentors favoured central direction rather than what they perceived as the anarchy and heartlessness of the market system. ..... Read online     .....pdf

Politicians have sabotaged the energy market

The Spectator, 13 June 2022
   'After a decade of denial and delay, Australia deserves a better future – one with cheaper power, more jobs, and less emissions,’ said Energy Minister Chris Bowen, in his last media release prior to gaining government.

Mr Bowen advocated replacing coal generators with wind and solar, with their shares of electricity supply to increase from 30 per cent to 82 per cent by 2030. To facilitate this, he proposed spending $80 billion on transmission, thereby quadrupling its present costs.

He also ridiculed a Morrison government that ‘does not believe renewables are the cheapest form of energy, or that the    ..... Read online     .....pdf

Customers won't like the new energy game

The Spectator, 3 June 2022
   Right now in Australia, we are seeing some smaller electricity retailers being forced out of the market and voluntarily shedding customers. One example came this week, when ReAmped Energy told customers they should leave because bills were set to double.

These sorts of retailers have gained a few percent of the overall market by offering cheap prices via wholesale purchases on the electricity spot market, which is usually cheaper than arranging supplies through long-term contracts with generators.

But with shortages of electricity (which are from time to time inevitable) come very high spot market prices. What we are  ..... Read online     .....pdf

This is worse than we thought

The Spectator, 24 May 2022
   It’s much worse than we thought.

The ALP will govern in its own right, but will be forced into extreme positions by a Green-left Senate.

The first thing to recognise is that the result demonstrates a new consensus.

There are some differences between the ALP, the Coalition, the Teals, and the Greens. To placate its funders within the union movement the ALP will seek to abolish the ‘gig’ economy and promote a 5 per cent wage rise, something the Greens would also support. But that apart, the consensus represents a goal of abandoning the fossil fuel    ..... Read online     .....pdf

The Seinfeld election: a show about nothing

The Spectator, 17 May 2022
   With the virus abating, and with the confected anger over supposed government inadequacies for compensation owed to those harmed by adverse weather conditions losing topicality – the issues that should be dominating the present election campaign are taxation, spending, energy costs, industry policy, and defence.

The Coalition and the ALP have tried to minimise their differences on these matters.

For its part, the Coalition has little alternative after five years of clothing itself in the ALP policies it claims to oppose. It has been spending in Whitlam-esque proportions since its MPs ..... Read more     .....pdf

Build More Dams

Letter to the Editor, Regulation Economics (from Viv Forbes) - 12 May 2022

   Since the days of Joseph in ancient Egypt, droughts have periodically rationed water and food supplies for humans and wildlife. Sensible peoples store water, but it is about 40 years since Australians built a big dam – young Aussie engineers have no damn experience.

Even beavers build dams and weirs to provide long-term wetlands and food supplies along rivers. Dams also moderate floods downstream.

See here for pictorial comment (right):
 

Foolish children and Green politicians think that floods are caused by carbon dioxide, but farmers know that it is La Nina that brings flooding rains to Eastern Australia             ..... Read more

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The politics of an energy dystopia

The Spectator, 10 May 2022

   We are seeing unprecedented prices in the Australian gas and electricity wholesale markets.

The first five days of May saw electricity prices average over $400 per MWh in Queensland and NSW, and over $150 per MWh in Victoria and South Australia. Compare this with the historical average daily prices of $40-$80 per MWh.

Forward electricity prices for 2023 averaged 122 per cent higher than in 2021. 

 ...... Read online     ..... pdf

Stoking the fires of energy policy

The Spectator, 26 April 2022

   Stung from previous election losses, the ALP is at pains to deny that it will introduce a carbon tax. The Coalition is trying to claim a Labor government would do so.

That aside, both sides are seeking to marginalise environmental issues and their all-important impact on the economy. Many on the government side believe the Matt Kean dogma that there is an inevitable ‘transition’ away from coal, while others feel obliged to murmur assent in the face of popular support for that same view, funded as it is by subsidy-dependent renewable energy interests.

In fact, we already have carbon taxes and an ALP ..... Read online     ..... pdf

Scomo, Albo, and their fantasy Net Zero policies

The Spectator, 15 April 2022

   Both the ALP and the Coalition have the same Net Zero goal for 2050, but that time frame is, at best, aspirational and is contingent upon technological breakthroughs many of which verge on the fantasy.

A 2030 time-horizon is a more realistic means of comparing the two sides of politics.

For 2030, the Coalition has a goal of a 26 per cent reduction in emissions compared to the base year of 2005 and hopes to achieve a 35 per cent reduction with its present policies.

The ALP is targeting a 43 per cent reduction on  ..... Read online     ..... pdf

Renewables subsidies: $22 billion by 2030

The Spectator, 5 April 2022

   Energy Minister Angus Taylor noted that the Commonwealth Budget added $1.3 billion to assist uneconomic renewable energy, bringing the total support to $22 billion by 2030. Added to direct budget support are the regulatory subsidies that force consumers to pay for otherwise unviable wind and solar energy as well as the networks that have to be built to bring their energy to market. 

Green energy enthusiasts and vested interests fraudulently claim wind and solar are cheaper than coal-generated electricity. Some also concoct data purporting to prove that fossil fuels benefit from enormous subsidies.

..... Read online     ..... pdf

You can't save the world with Net Zero

The Spectator, 24 March 2022

   Ever since socialism’s credibility collapsed in 1990, environmentalism has increasingly dominated the political agenda. Central to this was the global warming scare and its implications for energy supply and economic activities in general.

Environmentalists’ pressures ensured that this agenda was widely embraced. Every Western country agreed to pursue ‘Net Zero’ carbon emissions, replacing hydrocarbons with wind, solar, and prospectively hydrogen as power sources. In most countries, this was combined with rejecting another environmentalist bogeyman – nuclear power.

China, India, and other burgeoning economies ..... Read online     ..... pdf

Will war end the climate alarmist zeal of the central banks?

The Spectator, 21 March 2022

   Faced with implacable opposition from the Senate, Sarah Bloom Raskin, President Biden’s pick for supervising banks within the Federal Reserve (Fed), has withdrawn her candidature. During the Obama administration, she was one of the Fed’s seven governors and a Treasury deputy secretary.

Her rejection by the Senate was a result of her expressed intent ‘to incentivise a rapid, orderly, and just transition from fossil fuels and other high-emission investments’.

Not so long ago, that opinion would have not been a barrier to the job – indeed her appointments under Obama faced   ..... Read online       ..... pdf

Practicalities in addressing autocrats’ aggression

The Spectator, 11 March 2022

   The shock of the Russian invasion of Ukraine is that it demonstrated a form of aggression most people thought belonged to an earlier time.

Following the Napoleonic era, a war of conquest against a recognised sovereign state was considered legitimate only if fought in the name of national self-determination.

National self-determination remained a worthy goal in the Wilsonian world of 1918, but its practicalities were always uncertain in the mix of languages and what were deemed to be ‘races’ that still characterised Europe. Even territorial claims based on national coherence disappeared post-1945, though in certain circles aggression     ..... Read online       ..... pdf

Fresh gunpowder in the nostrils of politics

The Spectator, 2 March 2022

   Fresh gunpowder in everyone’s nostrils has brought a new political reality.

It was only this month that US Army Secretary, Christine Wormuth demonstrated where her focus lies by introducing emission reduction plans, which would de-fang her nation’s military with features like:

  • Investing in an all-electric non-tactical vehicle fleet by 2035.

  • Significantly reducing operational energy and water use.

  • Buying electricity from carbon-pollution-free generation sources.

  • Reducing direct greenhouse gas emissions that result from Army

       ..... Read online       ..... pdf

Closing coal? The real victims are Australian energy consumers

The Spectator, 23 February 2022

   If software billionaire Mike Cannon Brookes is Australia’s latest corporate raider, his bid for AGL redefines the whole notion of a corporate raider.

Historically, corporate raiders have sought to profitably reinvigorate under-performing assets, but Mr Cannon Brookes ostensibly seeks to close down the target firm’s assets whether or not they are under-performing. Cannon Brookes is the junior partner in the bid which is led by Brookfield, a $250 billion real estate developer and manager with renewable energy comprising about ten per cent of its assets.

AGL has developed from a Sydney gas         ..... Read online       ..... pdf

Let’s remove government regulations that undermine electricity

The Spectator, 17 February 2022

   Today’s announcement of the early closure of the Eraring power station means that, with the Liddell station scheduled to close next year, almost half of New South Wales coal generation capacity will have closed.

Contrary to the propaganda, those closures are not because the coal stations have become uneconomic. They are due to competing energy supplies – wind and solar – having been subsidised by governments. This lowers the market price when those intermittent sources are running (while raising the overall price to consumers) and imposes stop-start costs on coal generators.

The loss of the coal generators will mean much ..... Read online       ..... pdf

Future Policy Directions For Australian Electricity Supply

A Submission to the Draft 2022 Integrated System Plan for the National Electricity Market of the Australian Energy Market Operator (AEMO)

9 February 2022

................ ..... Read submission here