Monthly Archives: July 2024

Britain, Economic, Energy, Environment, Government, Politics, Society

Great British Energy risks decimating energy security

UK ENERGY POLICY

KEIR Starmer’s aspirations for a carbon-free and energy-secure nation fulfilled at a stroke through the creation of his new quango, Great British Energy (GBE), is at odds with the reality of the situation.

The UK would, of course, welcome a green and pleasant land with cleaner air, lower carbon emissions, cheaper fuel bills, and a reduced dependence on Vladimir Putin and his gas pipelines that run from Russia to the West.

But the truth is the creation of GBE will deliver few, if any, of the bold pledges that Sir Keir Starmer and his Energy Secretary, Ed Miliband, are making.

In the King’s Speech, Sir Keir’s new government confirmed that GBE, the state-owned energy company, will develop, own and operate energy projects such as wind farms, using public money to help spur further private sector investment.

But the £8.3billion of money promised by the Exchequer for Britain’s energy transformation over the term of the current parliament will be a mere drop in the ocean.

In spite of the overblown language, this is a fraction of the sums of money already devoted to “climate reduction” goals by our UK-listed oil firms Shell and BP, as well as domestically owned power suppliers Centrica and Scottish & Southern Electricity (SSE).

Some argue it is reassuring that GBE will be headed up by Juergen Maier, the former boss of German multinational Siemens’s British arm, who might bring some much-needed private-sector experience to the job.

What is less reassuring, however, is the disastrous financial performance of Siemens Energy. It ran up losses of £3.7billion in 2023 alone. Combined with the desperate track record of past Labour governments to command and control the economy through grandiose quangos such as the National Enterprise Board of the 1970s, it looks almost inevitable that GBE will become yet another vast black hole, drawing vast public cash at the expense of other strained public services.

Most critically, by blocking future North Sea oil licences, as Starmer has done, and holding fire on the prospects for new nuclear production, the nation’s energy security is being sacrificed in order to pursue unproven green energy “solutions”.

In doing so, the UK is exposed to the danger of factories being closed, the elderly and poor freezing in their homes, and the lights going out when the wind fails to blow and the sun doesn’t shine.

It is also critical that the UK can maintain a minimum level of electricity production at all times – especially if the Government pursues a mad rush towards electric vehicles which, in many cases, are proving notoriously unreliable.

That is why Centrica-owned British Gas is investing heavily in renewing the nation’s gas storage capacity at Rough off the East Yorkshire coast and exploring other potential sites in Wales.

Not to mention that Starmer and Miliband appear willing to trash 100,000 North Sea oil-related jobs, sabotage Aberdeen, and lose £30billion of new investment in fossil fuels, and the engineering services which go with them, to drive the “green revolution”. Labour believes that by signing an agreement with the Crown Estate – which has command over most of the nation’s coastal waters – it can generate £60billion of new investment. The link to the monarchy alone could potentially attract some foreign investors on the grounds of offering a kind of royal imprimatur. But we shouldn’t get carried away by Labour’s hoopla.

The Crown Estate has much more skill and expertise on redeveloping real estate, such as Dumfries House in Scotland, than it does in energy projects. Despite its prestigious reputation, the Crown Estate’s new agreement with Labour, is at the hands of hard economic facts. The only thing that will attract investors is a competitive entry price. If the price at which energy generated at the offshore windfarms can be sold is set too low to make the projects viable, it will deter bidders.

We learnt this the hard way in a crucial auction last year, when not a single company bid to run a new offshore wind farm. That was because the Tory government had set the energy price too low. Even more seriously, a major proposed investment off the Norfolk coast was temporarily put on hold.

The same thing happened in the US last year when Ørsted cancelled £3.3billion of wind projects because it could not make the financial returns.

Earlier this year, BP also pulled out of its involvement in New York state wind farms – at a heavy cost to investors – because of the difficulty of getting decent returns.

The ultimate goal in all of these wind farm projects may have been lower prices for consumers. The reality is that only by offering a higher energy price to investors will they come forward – and the projects be built. It’s an uncomfortable truth for Labour, who want to be seen to be providing the cheapest energy possible to its citizens.

They have been repeatedly questioned about when, or even if, their “Green New Deal” would deliver lower prices for consumers, but Labour have been unable to answer. So much for cheaper bills and the election manifesto pledge that consumers would be £300 a year better off.

A secondary aim of GBE is to boost our manufacturing sector, creating new skills and employment opportunities to replace those in fossil fuels.

Certainly, this is a perfectly noble aim. But in Britain, we have already sold ourselves out. Most of the solar panels being installed on the roofs of homes and factories across the UK are being built in China at a fraction of the cost they can be made in the UK.

One only has to look at how Beijing is dominating the market for electric cars – and the 50 per cent tariffs imposed by the US and Europe to slow imports – to understand how difficult it is going to be to compete with Asian production.

There is also evidence that Chinese suppliers of wind farm equipment are using cheap Uyghur labour to manufacture wind turbines. It will be all but impossible for UK manufacturers to compete (currently responsible for less than 10 per cent of wind farm components).

There is one area of green technology where Britian does have a competitive quality and engineering advantage. Rolls-Royce, with the assistance of government funding, leads the world in the development of “small modular reactors”. These are mini, simple-to-construct nuclear reactors based on the turbines that power nuclear-powered submarines.

Rolls-Royce believes it is capable of capturing a £250billion global market if it receives the go-ahead from Whitehall for UK production. The Czech Republic has already expressed an interest in buying them.

Tens of thousands of real jobs – not the Potemkin quango roles envisioned by the UK’s new Government – are there to be created.

We can only hope for the success of Great British Energy and the zero-carbon nirvana envisaged by our mission-driven Government.

But there are huge fears in creating a taxpayer-funded white elephant which will decimate our energy security.

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Books, China, Government, Politics, Russia, Society, United States

Book Review: Autocracy, Inc

LITERARY REVIEW

Intro: Standing up to the tyrants in the East

THERE isn’t a more rigorous and engaging analyst of the crimes of the erstwhile Soviet dictatorship than Anne Applebaum, the acclaimed author of the Pulitzer prize-winning history of the Gulag, and also of Red Famine: Stalin’s War On Ukraine.

For her gifts, the historian is also rooted in the present, as a fearsomely active journalist, and the writer’s latest work is an up-to-the moment examination of how modern-day autocracies, not just that of Russia’s President Putin, but also including China, North Korea, and Iran, act as a kind of informal bloc to challenge what they see as the West’s “hegemony”.

It’s unfortunate that the phrase “axis of evil” has already been taken, since that would be a befitting description. Alas, it was inappropriately used by George W. Bush in the wake of the 9/11 attacks to join together Iran, Iraq, and North Korea – which actually had no military or financial links at all.

Russia, China, North Korea, and Iran, do, however, connect in this way, accelerated by Moscow’s war on Ukraine.

The only minor criticism of Applebaum’s formidable book is that it never mentions the Iraq War of 2003–2011 or the later Western intervention in Libya. For these were the developments which not only gave fuel to the anti-Western agenda, but also convinced many – including in the West itself – that we had little moral authority to criticise the military escapades launched by the Kremlin.

Applebaum is especially adept, however, in setting out the remarkable success of modern Russian propaganda – beyond the scope that Stalin could ever have dreamed of – using the worldwide web, and of China’s ability both to control its own people through technology and to censor what was thought to be unstoppable.

At the dawn of the millennium the ever-optimistic U.S. President Bill Clinton proclaimed that the internet would liberalise China, by exposing its people to all the possibilities and opportunities the free world had to offer.

When arguing, on similar grounds, for China to be admitted to the World Trade Organisation, he gave an address in which he ridiculed the idea that Beijing could keep a lid on things.

“Now, there’s no question that China’s been trying to crack down on the internet,” he declared. At that point, as Applebaum records, Clinton gave a wry smile, adding: “Good luck!” – and his audience joined in the laughter.

They are not laughing now. The Great Firewall of China, and even more sophisticated tools than that, have allowed Beijing to succeed, keeping billions of its citizens in a form of intellectual slavery.

In a similar vein, the German political establishment had long believed in the doctrine known as Wandel durch Handel – “change through trade” – the idea that making nice with Moscow in terms of market access would inevitably lead to political and cultural liberalisation. This was most notable with pipelines taking Russian gas to Europe. That dream, or self-interest, in terms of the aspirations of German business, has also been shattered. The kleptocracy just got richer and far  more ruthless. 

As the deputy mayor of St Petersburg in 1992, and in his first public role, the former KGB officer Putin argued that “the entrepreneurial class should become the basis for the flourishing of our society as a whole”. That was music to the ears of Western investors, but Putin was then, already, creaming off vast sums for himself and his associates, via his control of local export licences for raw material.

As Applebaum notes, under Putin’s perpetually renewed presidency this ultimately developed into “a full-blown autocratic kleptocracy, a Mafia state built and managed entirely for the purpose of enriching its leadership”. It was for his leading role in exposing this that Alexei Navalny paid with his life.

Despite his apparent personal austerity and regular crackdowns on colossal financial corruption within the Chinese Communist Party – the inescapable consequence of permanent one-party rule – Xi Jinping is only too happy to make common cause with the multibillionaire plutocrat Putin.

Central, this is because they share a primordial terror of a popular uprising against their regimes: in this context, it was striking how in 2022 Xi suddenly abandoned his hitherto iron-cast Covid lockdown measures after a public revolt threatened to spread to the streets of Beijing and Shanghai.

And the “no limits” friendship which Xi entered into with Putin on February 4, 2022, was specifically designed to demonstrate a kind of solidarity among autocracies, against what they both constantly refer to as the West’s “attempts at hegemony”.

Their joint communiqué denounced “the abuse of democratic values and interference in the internal affairs of sovereign states”. Weeks later, Putin sent his tanks towards Kyiv.

There was a tantalising glimpse of a possible fracture in the relationship at that moment: it seems likley that Xi was not given a warning by Putin of what was about to happen and, some months later, Beijing made public its grave concern about the Kremlin’s threats to use nuclear weapons in Ukraine.

Nevertheless, as Anne Applebaum concludes, the challenge to “Autocracy, Inc” must come from within the West itself.

And, yet, if the forecasts are right, the American people seem likely to elect to the White House (again) their own version of Autocracy Inc: Donald J. Trump.

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Britain, Government, NATO, Politics, Russia, Society, Ukraine, United States

Give President Zelensky what he needs to defeat Putin

UKRAINE WAR

EUROPEAN leaders gathered at Blenheim Palace recently in a symposium that was a conduit for European solidarity. They surrounded Ukrainian president Volodymyr Zelensky in an image of steadfast support.

For Zelensky, he must be wondering how stalwart those allies really are. Two and a half years into Putin’s bloody and violent war, it must increasingly seem to Zelensky that NATO is offering just enough to keep Ukraine limping on – but not enough, anywhere near enough, in smashing Russian forces completely. What else could explain the West’s ambiguity and indecisiveness over the use of long-range weapons to attack targets inside Russia?

The British prime minister, Sir Keir Starmer, has rebuffed Zelensky’s plea that he ditch the UK’s veto on Storm Shadow “bunker-buster” weapons, which have a range of up to 190 miles, easily capable of striking targets in Russia.

As it currently stands, the UK and other allies allow Ukraine to fire long-range missiles defensively at targets on Russian soil near the border, but not offensively or deep into Russian territory.

Such a position is, of course, calculated to avoid provoking Putin into wider retaliation. At the heart of that fear is the ultimate and terrifying prospect that the dictator might reach for the nuclear button, but even less apocalyptic concerns help to dictate policy.

Success in armed conflict can only be achieved if all the elements of the battlefield are dominated. In the traditional doctrine of NATO, this means winning “deep, close, and rear” battles – that is long-range strikes and raids on infrastructure (deep), front-line combat (close), and the essential support mechanisms such as logistics and headquarters (rear).

Just as Russia is hitting Ukrainian cities, factories, and infrastructure, any military general knows it is perfectly reasonable for Ukraine to do the same in order to degrade its enemy’s military capability. But with the current restrictions on missile use in place, Ukraine’s fighting forces can’t execute the “deep” battle. Zelensky is being forced to fight with one arm tied behind his back.

That’s why many are now pressing decision-makers in Washington, London, Berlin, and Paris to authorise the use of long-range weapons, such as the UK’s Storm Shadow, to strike targets inside Russia.

That would likely lead to some escalation. But as in the Cold War, many strategists are confident this war, at least, won’t go nuclear, despite the warnings of those concerned about the UK’s deepening involvement in the conflict.

For one thing, Russian tactics would probably use a tactical nuclear weapon only to stop an enemy breakthrough in Ukraine. Such a breakthrough could only occur in one of the four eastern provinces that Putin has decreed to be forever Russian. Where is the logic in irradiating many square miles of your own soil?

Then there is the relationship between China and Russia to consider. President Xi has so far offered only mild support to Putin and is unquestionably the dominant partner in the relationship. China has consistently opposed the use of nuclear weapons in Ukraine.

Of course, matters could seriously escalate long before it reached nuclear proportions.

A cyber attack on the scale of the IT outage chaos caused by CrowdStrike is well within Russia’s capability, as is severing underwater communications or energy pipelines in the North Sea. And if the Houthi rebels in Yemen were capable of striking Tel Aviv, we cannot rule out a long-range conventional missile strike on a target in Western Europe, even potentially one on the UK.

Nevertheless, military strategists and theoreticians often refer to the concept of “limited war” – that is, restricted in its aims and its geography. The war in Ukraine does indeed have limits, but history has demonstrated that Putin’s ambition is not restrained in the same way.

Before Ukraine there was Chechnya and Georgia. Why, after Ukraine, should we not think there might be Latvia, Lithuania, or Estonia, or even all three? Why not Poland? Anxiety levels are already high in the Baltic States, and one has to wonder why at this moment in their history, both Sweden and Finland recently chose to join NATO. The fear of Russian expansion is tangible on Russia’s borders – no wonder the Poles are spending more than 4 per cent of GDP on defence and building the largest army in Europe.

Any discussion of Ukraine’s prospect of achieving military success must also confront the issue of Donald Trump returning to the White House in November. He has made the claim that he could settle the war in a day with one telephone call. If that’s the case, Ukraine must be given every chance to achieve a position of advantage on the battlefield before that call is made.

If this war is to have a successfully negotiated end, Ukraine must be in the strongest possible position at the start of any talks. The reality is that Putin must be stopped, and Ukraine is the place to stop him. The best means of doing so is by giving Kyiv what it needs to finish the job.

The price of stopping Putin now is far better than paying the price of a wider devastating war – as the history of the last century shows.

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