Are UK natural gas supplies secure this winter ? The margin of security gets smaller and smaller - and gas more expensive.

Gazprom reduced natual gas supplies to Ukraine at 0700 GMT today - Current debts have been cleared but the parties cannot agree on a price for future deliveries.

Ukraine was paying US $179.50 per 1,000 cunic metres, Gazprom now want US$250 pMcfm. and the Ukraine is said to have offered to pay US$201 per 1,000 pMcf.

This will not affect European domestic supplies in the near terms but if there was a lengthy stand off the effects could be felt as the Ukraine siphoned off supplies which pas throughfor Europe for their own use.

Looming UK natural gas shortages

Rune Likvern has posted a 2 part analysis entitled Will the UK Face a Natural Gas Crisis this Winter? on the Oil Drum Europe. Part 1 October 18th and Part 2 December 18th which with the usual well informed comments makes essential reading if you wish to grasp what is happening to UK energy security. (click on any image to enlarge)

This chart illustrates the case made by Forthcoming UK Energy Deficit FCUKED over a decade - the trend is clear, gas usage is increasing, rincipaly because nuclear production - green line (due to the disastrous and continuing reactor problems detaield here for years) is declining and the ultimate reduction in coal generation as the EU Fuel Directive results in the closure of antique coal generation plants.

The role of natural gas in the next 5 years has therefore becoem increasingly critical.

The UK has several sources of natural gas ;

1. Indigenous supplies from the North Sea / Morecambe Bay etc ... which are declining - National Grid figures show that current production averages 190 Mcm/d. This corresponds to approximately a 10% decrease over the corresponding period a year ago.

2. The newly opened Langeled pipeline joining the UK to the Ormen Lange field offshore mid-Norway. This pipeline goes via the Sleipner hub (see map) at which point Ormen Lange gas can come to the UK or be diverted to continental Europe. The other main pipeline is the Tampen Link joining Norway's northern oil fields to the UK's FLAGS pipeline system. This may pipe gas from Statfjord and other Norwegian oil fields to St Fergus in Scotland.

3. The UK is also joined by two interconnectors to Europe. The Dutch interconnector was bult to export UK gas to Holland and is currently an export only link. The Belgian interconnector may pump gas both ways and can be used to balance UK and European supplies.

4. LNG imports enter via terminals are concentrated in Wales and the Thames estuary and are developing their capacity . The South Hook facilities in Wales have been developed as a joint venture between Qatar Petroleum and EXXON Mobil .

Note : Net nat gas imports as modeled average 108 Mcm/d during the next 12 months. This corresponds to a very slight (<>

However due to very limited capacity to store gas - the UK can only store 4% of annual consumption compared with say 20-25% in Holland and Germany.

This storage is based on ;

1. Long Term (Rough, capacity of 3 340 Mcm and max flow rate of 42 Mcm/d),

2. Medium Term (Hornsea, Hole House Farm, Hatfield Moor, Humbly Grove; total capacity of 767 - 837 Mcm and max total flow rate of 37 Mcm/d)

3. Short Term (Avonmouth, Dynevor Arms, Glenmavis, Partington; total capacity of 260 Mcm and max total flow rate of 48 Mcm/d).

The total storage capacity of these facilities at the end of May 2008 was 4 367 - 4 437 Mcm, according to data from BERR. This amount corresponds to about 4% to 5% of annual consumption.

Based on these figures the latest BERR and Department of Energy and Climate Change (DECCA)and Nationa grdi information RUne Likvern has attempted to simulate the possible inputs of natural gas / usage and weather and the impact on draw down from storage

This indicate he says , medium term storage (yellow) is forecast to be emptied by late January, and that long-term storage (blue) is forecast to be emptied by mid February. The amounts shown are a combination of actual and forecast amounts. The darker shades represent development to date; the lighter shades represent the forecast period. (For a more detailed analysis go to the article).

UK Natural Gas prices

The price of natural gas in U. K. is important, because it helps determine the amount of imported natural gas available, both as pipeline imports and as LNG imports. Presently U.K. nat gas is traded at around 60 p/therm (day ahead) at NBP. (remember in Euros and US$'s actual contract costs expressed in sterlig have been rising the last few months.

At 60 p/therm suppliers would not be attracted ins hipping to the UK . Based on prices as they are today, it seems to Rine Likvern that a price in excess of 100 p/therm will be needed to move additional supplies to the U. K.

In November 2008, Russian natural gas was trading in Germany at around 110 p/therm (US$ 16 - 17/Mcf) at present exchange rates. If this reflects nat gas prices at the margin from Continental Europe (plus transport and administrative costs etc.), this suggests that U.K nat gas day ahead prices need to exceed 120 p/therm this winter to attract any meaningful supplies from Continental Europe.

The situation with LNG is less clear as contracts tend to be for long periods and spot cargoes are not readily available.

Don't expect to see your gas bills shrink and as the proportion of gas used to generate electricity increases your electricity bills won't either.

What happens if we start running out of gas ?

A lot of gas is supplied on interruptible contracts but domestic demand cannot be cut off - see the rawtenstall explosion when 14,000 homes had to each be visited to re-started by experts to ensure no air had entered the system to produce an explosive air/gas mix.

Quite simple ...

The Government are way ahead - domestic gas rationing in UK, this would be done by rolling 3 hour electricity blackouts - as most central heating systems rely on a continuous electricity supply. The government has it all planned - see http://www.berr.gov.uk/files/file35360.pdf !

Maybe a gas fire with a piezo spark starter would work and gas rings / ovens could be used - but not as heaters as they are not flued and Carbon monoxide could build up.

So lay in the candles, a camping stove - primus , propane gas, easily heated / cooked food , plan for vulnerable people , children , the elderly and get out the board games if the TV doesn't work. In the long term install a wood stove.

Warning signs in the oil industry

Apparently as the world oil price slumps much of the North Sea oil fields become uneconomic and the rumour mill says Conoco in Aberdeen are believed to have sent out letters of intention of redundancy. The very real threat here is that the North Sea is decommissioning - leading energy analyst Euean Mearns says if oil prices don't recover quickly then 2009 may see a flood of applications to shut down the rust belt - with Brent in front of the queue. See Bow Valley Divests Interest in UK North Sea's Peik Asset 29th Decemeber 2008

See Petrol price hits three-year low as crude falls again as tesco cuts prices today on the forecourt for regular unleaded to 82.9 p litre - Diesel is now averaging 99.72p a litre - the lowest price since November 2007 . Elsewhere Royal Dutch Shell Plc, and StatoilHydro ASA, Norway’s biggest oil producer, are among companies that deferred or canceled at least 14 projects this year in Alberta’s oil sands. Shell postponed a near-doubling of production in Canada’s oil sands .

Shtokman project on hold as financing hiccups

Russian gas monopoly OAO Gazprom owns 51% of Shtokman Development, a joint venture with France’s Total SA, - 25% stake, with Norway’s StatoilHydro ASA, holding 24%. Yuri Komarov, chief executive of Shtokman Development AG is on record saying he is concerned about financing caused by the "credit crunch".

Located in icy waters 550 kilometers into the Barents Sea, Shtokman is estimated to hold 3.8 trillion cubic meters of gas and 37 million tons of gas condensate, or enough to meet U.S. demand for six years.

Early estimates of costs to develop the field top $20 billion, and the consortium expects up to 70% of the development cost for the project’s first phase to be raised from capital markets.

The massive Arctic project will remain economically viable if oil prices stay around $50 or $60 a barrel.

UK Government does more mean less ?

From a diverse range of sources it appears that the Brown Gubment payroll has swelled even more ..

1.There are now 121 ministers, whips or law officers.

2. The eager beaver crew has also got bigger Paul Waugh says ( adding in 5 backbenchers with titles as regional ministers' assistants and 2 who are "government representatives" (ie, "envoys"), 44% of the all Labour MPs have an official government post of some kind.

3. After his shuffle the Brown Cabinet has 23 members ...another 10 ministers have the right to attend on some or all occasions.

4. Canny Scot at saving the bawbees Brown has secured the services of 13 ministers or whips working without a ministerial salary.


The indefatigable and glamorous Torygraph hackette Rosa Prince ( see pic) tells us she has been truffling around the 15 members of the 2001 Labour intake who signed the letter calling for Tony Blair to shuffle off his immortal coil and let Gordy take on the heavy responsibilities of state.

Well their loyalty has been rewarded ;
Chris Bryant - Parliamentary Secretary, Office of the Leader of the House of Commons
Tom Watson - Parliamentary Secretary, Cabinet Office (described by Tony as "disloyal, discourteous and wrong" for signing the letter urging him to go.)
Sion Simon - Parliamentary Under Secretary of State, Department for Innovation, Universities and Skills
Wayne David - Parliamentary Under Secretary of State, Wales Office
Ian Lucas - Assistant Government Whip
Hywel Francis - Chairman, Welsh Affairs Select Committee
Mark Tami - Assistant Government Whip
Kevan Jones - Parliamentary Under Secretary of State, Ministry of Defence
Mark Lazarowicz - Special representative of the Prime Minister on carbon trading working with the Secretary of State for Energy and Climate Change.

Ann McKechin - Parliamentary Under Secretary of State, Scotland Office - and one time romatically linked with Kelvinside MP Gorgeous George Galloway.

Chris Mole - Assistant Government Whip

Which leaves Khalid Mahmood, ***Jim Sheridan, David Wright, David Hamilton still waiting for the phone to ring.

*** he took the seat from geoff (now unbelievably Lord Rooker) who sponsors the Improving The Prospects Of People Living In Areas Of Multiple Deprivation In England and he chairs the chairs the Project Advisory Group a member of which is Sukhvinder Kaur Stubbs (Oxford First) who is the Director of the Barrow-Cadbury Trust (and a Sikh)- she is also a member of the regional development agency, Advantage West Midlands . She also stood against Mr Khalid ( a community development officer ) as a Labour Party candidate and lost amongst tales of vote rigging and was said in scurrilpous articles to be a bedmate of the noble Lord.

Labour's Perry Barr branch executive committee voted to continue campaigning to have the selection of Khalid (a Kashmiri Muslim) over-turned and to force an investigation into an unusually large number of postal votes cast in Mr Mahmood's favour.

Almost half the 290 members in Handsworth ward, a Mahmood stronghold, applied for a postal vote - a virtually unprecedented percentage in constituency selection meetings.

Pre-election complaints against Mahmood included his sudden disappearance from Birmingham for over a year shortly after first being elected city councillor, and the mysterious and unexplained collapse of the council-backed British Kashmiri Association with huge debts in 1994.
see also Khalid Mahmood: A long-term embarrassment for Labour

Mr Mahmood is probably not ministerial material under Gordon. But watch out for the rise and rise of Sukhvinder Kaur Stubbs (pic)

This hurts us more than it will hurt you.

"“promoting a competitive financial services sector leading the world and supporting continued economic innovation.”...remeber that was the Bush plan ... now Hank the Bank according to the Guradian today ...An insider said Paulson dictated the terms after summoning chief executives on Monday. "It wasn't a debate."

More bollocks from Hank ... Government owning a stake in any private U.S. company is objectionable to most Americans, me included. Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable." ...This hurts me more than it hurts you.

Harvey Pitt briefly held the Chairmanship of the US Securities and Exchange Commission (SEC) for two years until 2003 when he resigned on election day.

He is quoted by the BBC as having said yesterday on BBC World News, "We've got a 21st century financial services marketplace and a 19th century regulatory model."

He further added that there was a lack of transparency both within and between organisations and businesses in the financial / insurance sectors in the US.

Belatedly he has placed his finger on the problem that has been glaringly evident to many outside the incestuous world of international finance. The current problems of credit lockdown are a SYMPTOM not a CAUSE.

The falire to close down credit both with individuals (when were you last chased down a mall to open anew Credit card ?) businesses but also between banks and quasi (investment) banks - resulting in the soaring LIBOR rate (whose calculation has been rigged for years - see Friday, April 18, 2008 British Bankers Association caught lying about LIBOR rates ) only reflects that the gig is up for the lying bankers.

Banks of all shapes, sources and sizes have been producing fraudulent balance sheets and declaring non-existent profits and paying massive bonuses and dividends for years -

1. Lloyds bank was offering a higher yield on shares than on their best deposit accounts.
2. 60% of Sacks of Gold Gross Trading profit went in remuneration of staff.
3. leveraging of 30 - 1 was (and still is) common , ie they borrowed £30 for every £1 deposits.

The result is not lack of confidence but confusion, wrought by criminal behaviour of many (but not all) - politicians bereft of ideas have decided to throw the taxpayers money at the problem.

Hank was on the blower again the last few days but we couldn't help him... he had this crazy idea of buying into banks, taking preference shares with a 5% coupon (so he gets his (taxpapyers) money back in 20 years).

Apparently hidden away somewhere was the power for him to do this with the money in his swag bag.

Can you imagine the organisation that must be put in place to oversee this massive shareholding in banks ? Who will staff it ?

Maybe the guys lining Wall Street round the corner from the door marked EXIT at Lehman Bros.

In the UK Gordon Brown...

...says he doesn't want to run banks... Ho.Ho.Ho...This on the day when the Cabinet are ready to give the go ahead to having a National database on every individual which will have details of our web browsing, phone calls .....?

Is this the end of the beginning ? NO way...not even the begining of the start of the early part of the financial holocaust that is on it's way. Especially on those nations where financial jugglery has overtekn real economies, where people make things and sell things with worth, asset value and utility.

Next up for a shock horror explosion of concern and worry is the insurance industry.

One good bit of nes is that the EU is dismantling the nonsense of carbon trading .... Old Lord Patel's Almanac says you will here no more about Global warming in 5 years time as wesern economies fight energy costs to keep their populations fed and watered.

Gordon's Bulimic Vision in Japan - Throwing it all up and away.

No 10 Downing Street has a Strategy Unit. In September 2007, the Prime Minister commissioned them to undertake a major project on food and food policy.

This was :
1 To to review the main trends in food production and consumption in the UK.
2 To analyse the implications of those trends for the economy, society and the environment
3 To assess the robustness of the current policy framework for food
4 To determine what the objectives of future food strategy should be and the measures needed to achieve them.

They produced an Analytical report in January this year which is not available at the web page alocated ..." This report is being updated and should be available shortly. "

Food Matters - Towards a strategy for the 21st Century is a 145 page report published today by the Strategy Unit ... and must not be confused with the Gallagher report also issued today by the Ministry of Transport ... easily done if you read the Press. It is this report which contains the information

"UK consumers spend an average of £420 per household each year on food that they
then throw away."

It was of course fed to pigs ever since the war, and until the Foot and Mouth Outbreak in 2001 (in which 7 million sheep and cattle were killed at a cost of £8Bn.) that this used to be collected and fed to pigs. There were said to be 2 origins of this outbreak, illegally imported food and the failure to sterilize pig feed by boiling. This was never proven.

This figure (according to a footnote) of £420 per household comes from Waste and Resources Action Programme WRAP (2008) The Food We Waste "consumers throw away 4.1 million tonnes of food that could have been eaten – worth an average of £420 per household – every year" Except that the BBC report on 8th May 2008 of the study, "the first of its kind in the world (?)" as " consumers throw away 4.1 million tonnes of food " based on a survey of 2,138 households (out of 23 Million) and gave 2 figures for total cost of £9Bn and £10.2Bn which suggest there might be some lurking inaccuracies in the figures. (See update No 10 Press release)

The end result of this 10 month study is (unsurprisingly):

The Prime Minister has asked the Cabinet Office to establish and support a Food Strategy Task Force to monitor ongoing developments in the food system and food markets, to drive forward implementation of all the measures in this report and to publish regular updates on progress.

Overall there appear to be 4 strands or conclusions ...

1. Long term decline in food prices is over (Perhaps)
2. 70,000 premature deaths due to diets failing to matched nutritional guidelines (perhaps - more late night TV ads to the slothful) (Estimate in In quality-adjusted life years, Department of Health Page 29 no further source is provided)
3. Food is safer than ever to eat in the UK (Good)
4. The food chain has huge environmental impacts (around 18% of UK greenhouse gas (GHG) emissions are related to food production and consumption).Page 9 "On-farm GHG emissions are set to be the focus of increasing attention in the years ahead"

This last is a curious conclusion and resort to ES.17 (Page 12 de-mystifies (slightly))

Around 18% of UK GHG emissions are related to food production and consumption.
Nearly half of these emissions come from farms, mostly in the form of methane
and nitrous oxide that fall outside current UK domestic targets for carbon
dioxide (CO2),and are beyond the scope of the EU Emissions Trading Scheme and
other carbon pricing mechanisms.

The source for this highly suspect statement is Office of National Statistics (2007) Environmental Accounts, Spring 2007. See chart 2.2 for 2004 at top of post . GHG emissions 52/731,000=7.1% Acid rain = 500 / 3308 15.1% - % 'ages as total of UK. So where the 18% figure comes from is a mystery, unless in some curious mathematical way they are combined. basically it is totally meaningless, nor is any attempt made to justify it, except by an obscure out of date footnote.


More recent figures are available a were published as the Office of National Statistics (2007) Environmental Accounts, Spring 2008. published on the 3rd of June 2008
GHG = 6.9% Acid Rain = 19.1 %
So (if the figures are to be believed) Agriculture is producing less GHG - cows farting less ?

Something to brag about surely ?

ES.51 Finally, a Joint Research Strategy for Food will be prepared to ensure better coordination of departments’ food-related research spending. The strategy will identify priorities for research, and undertake monitoring and dissemination arrangements. The strategy will define a ‘virtual’ research programme that cuts across the work of those departments, and will link to Research Councils and other funders.

The report goes on an on in this vein, bold aspirations, and negligible content. Acres of committee meetings, cross departmental seminars beckon, .....international conferences....oh and (p 123) thanks are due to ... Deloitte & Touche LLP you bet.

Delivering the Government's Vision .....

here is the Kicker ....7.3 Resource implications There are no additional public expenditure implications of this report within the current Spending Review period (2008–11).

Which is probably why of only two figures used, which have been checked they appear to be inaccurate. Anyway the report is interesting as it has Gordon's signature - graphologists could work on that for a long time.... has he got any other crayons inhis box ?

PS : NO 10 have issued a Press release in which they say ,

"The food chain creates 18% of UK greenhouse gas emissions. Farming and fishing contribute around half of this total." This is NOT what the report says , it does not even mention fishing and there is no explanation how the 18% figures is arrived at. Isn't Gordon supposed to be ace at arithmetic?

"A third of the food bought for home consumption is wasted – 6.7 million tonnes." We have shown above that the figure of 4.1 Mn tonnes was used in the WRAP report - an error of 60%.

"If UK diets met nutritional guidelines, 70,000 premature deaths could be prevented each year. " No source is provided for this calculation or how it is arrived at other than to say it is a "Department of health Estimate".

These are not just picky points. If basic facts and figures , much publicised, are used in quotes for the PM in a No 10 Downing Street Press release cannot be relied upon for accuracy, it is difficult to see on what basis any judgements can be made.

UPDATE Tuesday a BST On reflection the whole report is bollocks- Still puzzling over this bit ..."The strategy will define a ‘virtual’ research programme "

Man on Mission Impossible - Henry Paulson stalks Europe for ideas

Henry Paulson the Secretary of State at the US Treasury , Eagle Scout , ex Chairman and CEO of Goldman Sachs has been "doing Europe" . Germany on Tuesday. ...yesterday he was at Chatham House and talking about the current state of chassis in the world. Text here

He kicked off, .. the US economy is going through a rough period. As they have been chalking up an eye watering overeseas and budget deficit ever since George Bush slapped his boots on the desk in the Oval Office, they certainly have been going through a rough period.

Nobody noticed, because that nice avuncular Mr Greenspan kept interest rates down ...reeel low so everyone could share in Democracy's pie and the War on Terror, the War on Iraq, The War on Afghanistan, the War on Drugs, meant that the Federal Government were spilling out funds everywhere.

Everyone, everywhere shared in the bonanza as the Chinese scooped up Treasury Bonds with zilch yield and decling value.

However someone (eventually) noticed that all these borrowings rested on a crock of shit of alphabetic nightmares and persistent lies called quailtly "securitised loans" and fraudulent Balance Sheets . Now nobody has got any money even to make end meet never mind to lend to anybody. Believe me, when you are paying the salary cheques these banks have been paying it's no surprise there is nothing left to lend... hence there are a few folks losing their jobs.(Citigroup losing 13,000 alone this year..er..so far)

Anyway Good 'ol boy Beorge has noticed that his term of Office is ending and it's election time and the natives are getting restless. So the first thing Henry tells us (after telling us things are bad, reeeel bad )is that, hey just around the corner the good times will roll.... well hopefuly until the election is over and Uncle George Sam is, Henry says, " injecting $150 billion into the US economy now when it’s most needed (Election Time). To date, almost 95 million payments totaling over $78 billion have been sent". How ? By that 'ol mainstay of conservative / liberal economic policies a tax dodge.

Hey , Paul tells us, it's working , "Consumer spending data in May show these payments are
helping families weather this period of slow growth and higher food and gas prices."

Now when people tell me in the retail business ..."Last week we had a really good week" I know for certain that they know next week will be a stinker.

Same with Paul , first the good news now the bad news is ..." ... the US economy is facing a trio of headwinds: high energy prices, capital markets turmoil and a continuing housing correction."

Market Stability

This is the new voodoo man, why Alastair Darling announced in his Mansion House speech that it was intended to form a new Financial Stability Committee which would would "guide the Bank's operations in this field".

Paul identifies 3 Tranches (?)

1. ( or if you want the longer version " first and foremost, our number one priority") promoting market stability and limiting the impact on the broader economy as we work through today's institutional and markets stresses. (bit short on the detail there about how you do this..never mind, plod on)

2. Implementing the appropriate policy responses to recent events to address the deficiencies in our markets which the current problems have exposed.(bit short on the detail there, what policies ?, what deficiencies ? what problems exposed?)

3.Improving our overall financial regulatory structure to better prevent and address future turmoil.

All this will of course take time - even more so finding out why the previous "robust" , well engineered, systems and controls, processes, ... didn't work last time.

Then Paul let loose a fascinating and modestly accurate statistical detail , financial institutions worldwide have raised over $338 billion.

Institutions in the US and the U.K. have raised capital equal to 95 and 96 % of their recognized losses..in Europe, the gap is wider; there, institutions have raised only 56 % of their recognized losses so far - led no doubt by the Belgians and the cheese eating surender monkeys.

Just note that word "recognised", does that mean ;

1. That's the losses they have identified and calculated and published.
2. WE know (nudge,nudge , wink, wank.... because that's how bankers talk, like out of the sides of our mouths like Goodfellas - or is it the Mason's ?.), WE know that there is a still a bundle in the cupboard that we will eventually haul out , hopefully when the fucking sun starts shining again and we have some more notional profits to write it off against).

Oh by the way the US$ which was US$1 = 1 Euro on the illegal invasion of Iraq .. well you need US$1.60 today to buy 1 Euro.

Anyway back to Henry - who has NO worries about paying his mortgage, grocery bills or how to fill his gas tank..

Well Henry wants financial institutions to continue to strengthen balance sheets by raising capital, de-leveraging or reviewing dividend policies - you bet with the Fed in New York and the Bank of England lending money out the Discount window for all sorts of crap as security, just to keep a semblance of a banking market going.... have you seen the mortage closings this month ... and God help the small businessman.

Policy response

The US is well prepared for considering Policy issues ....Henry says. "In the United States, the Treasury Department, the Federal Reserve, the Securities and Exchange Commission and the Commodities Futures Trading Commission worked together through the President's Working Group on Financial Markets, the PWG, " ...the guys who oversaw and masterminded this fucking disaster of zero credit, economic slowdown and the federal de-housing policy ... have already got their handmaidens of Apocalypse hard at work the ..." US regulators, investors, financial institutions and credit ratings
agencies have begun to implement these and other recommendations, which include

1. Stronger mortgage origination oversight (But not why it was so pisspoor before)
2. National licensing standards (But not why they were so pisspoor before) for mortgage brokers, and 3. To improve market infrastructure (But not why they were so pisspoor before)
4. Regulatory oversight (But DEFINITELY not why they were so pisspoor before)
5. Risk management practices (But not why they were so pisspoor before)
6. Steps to address valuation issues (But not why they were so pisspoor before)
7. Policies and practices related to the credit ratings agencies (the new whipping boy)
8. The mortgage securitization chain.... on which it is worth considering what good 'ol boy Greenspan had to say a few years ago at a Fed Bankers conference.

Alan Greenspan
Federal Reserve System’s Fourth Annual Community Affairs Research Conference, Washington, D.C. April 8, 2005

"Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early 1990s.

.....we must conclude that innovation and structural change in the financial services industry have been critical in providing expanded access to credit for the vast majority of consumers, including those of limited means.

This fact underscores the importance of our roles as policymakers, researchers, bankers, and consumer advocates in fostering constructive innovation that is both responsive to market demand and beneficial to consumers. "

Would a public beheading be good enough to correct those policies of "quite efficiently judg(ing) the risk" ? This was the guy who said at a conference in Abu Dhabi in March this year ...".“For people who say we and the rest of the Central Bank should have raised flags, I say we did,”

But Henry wants to go further ..."to address not only the specific policy issues that gave rise to recent turmoil, but also the outdated nature of the US financial regulatory system. Few, if any, defend our current balkanized system as optimal." ... which is odd because that is precisely what Gordon Brown did 10 years ago in producing his masterful Tri-Partite and useless tri-umvirate of eunuchs , led by blinkered timid men allowed the uncontrolled bankers to ride a coach and horses through regulatory controls for a decade. He (and that smiling but vacuous twat Balls) balkanised the Bank of England, they didn't make it independent.

Even further ..." the G7 tasked the Financial Stability Forum, the FSF, to analyze the underlying causes of the turbulence and offer proposals for change."

"Today's priority is clearly market stability. However, looking beyond the immediate turmoil, we need to design carefully and put in place a stronger capacity for resolution and crisis intervention that reinforces market discipline."

Fine words, sweetly spoken, we could go on but read the text if you really want more.

To be fair to the Feds (that's the FBI not the unelected bankers) they moved fast , as they did with Enron, and hauled off the miscreants from Bear Stearns in public with handcuffs cuffs.. now there's nothing to see, let's move on.. now this carbon market looks really ripe for making a few bucks...how do we trade these allocations ? Well, say we bundle 'em up, a Sri Lankan pig farm (CARBO) with a single Idaho corn refiner (MON) and a wannabe maker of electric batteries (OXIDE) ... bundle it / securitise it / name it ? CARBON MON-OXIDE .... hey isn't that toxic ? Maybe, but what a great name CMO's . ... just think, a simple text fix in the software for the CDO's and away we go ..

Now the First Tier CMO's will be Libor plus, say 120 points ? .. get Owen & Avery , Sidley Austin - what's that hot chick called , she'll fix the detail?

Hands up those who believe that the 8 points above under Policy Response outlined by the poacher turned gamekeeper, drafted from Sacks of Gold to Gubment are going to make the slightest dent on the banks, investment funds, hedge funds, sovereign funds (with increasing and autonomous power), the money laundering drug gangs, the squillionaire silovaki.. no .. hands up, we can't count ... no hands up ...

Damn ..now Gemma says she's had a tough day and wants a gentle rub down with patchouli oil and how about a Manhattan ?

HM Treasury brainwashed by carbon trading - well in the case of Kitty and Hilary it just needed a light rinse

Brainy, beautiful, dutiful Kitty Ussher , Economic Secretary to the Treasury, gave a speech to the Institute of Chartered Accountants of England and Wales (ICAEW) at their "Making carbon markets work' event on the 4th October 2007.

This can be consulted at the HM Treasury website as 32 numbered paragraphs ... No 32 consists of two words.... Thank you.

She kicks off by repeating the mantra of the meddling classes ..."I believe carbon trading can play a very significant part, and in fact needs to play a very significant part, in the way that we tackle climate change, both here in Britain and worldwide." Carbon trading she says has to be credible, effective and accountable... which judging by Round One of the ETS it is none of those things.

Well versed in the Stern report's nonsense she picks up on the need (and importance) to give carbon a global price, we can cost the damage of carbonemissions – we can internalise the externality, to use the economists’ jargon - reminding us of course that she is practised in the dismal science.

Of the many ways of creating that price – HMG she says believes that a very important way of doing this is the trading of carbon emissions - not only that , but here is the really scary bit -
"We want it to be strengthened in the future, with limits that tighten over time to create scarcity, and we want it to be expanded – to cover more sectors and more gases, and also to link, eventually, with schemes in other countries."

" ....carbon pricing can only be fully effective if we can create a global price ... which means a global carbon market."

It must have been at this stage that here deep brown eyes started whirling as she set off on a global journey - California .. indeed other US States - it won't be easy - challenging - opportunities ... financial services.

It must have beenat this stage that the asembled accountants stood on their chairs and cheered.
" .... global carbon trading market is worth $30 billion a year – and we expect it to increase significantly in future. This is a new market, and a new opportunity for the UK, and for London in particular ....." London is already the world’s leading financial centre for emissions ..." there musn't have been a dry pair of Calvin Kleins in the room.

Adrenalin racing the pert, petite brain box rattled on ... annual turnover ... environmental goods and services sector... £25 billion in the UK ....... double ....... creating at least 100,000 jobs.

The assmebled money jugglers rolled in the aisles with glee.

"So there are some real opportunities for a green economy and a growing economy – and carbon trading can be at the heart of that." - M & C Saatchi never came out with a better line - just feel it , roll it round your mouth ...."real opportunities for a green economy and a growing economy " all those nights at Balliol studying the rhetoricians.

a green economy and a growing economy - remember that one , you are going to hear it very often.

... er ...32. Thank you.

Now her boss has produced his 3 year Stalinist Plan Pre-Budget Report and her pal Environment Secretary Hilary Benn has added a few hard edges to all this hgh flown rhetoric.

The new measures young and vibrant Hilary announced include:

* Air Passenger Duty to be replaced with a 'per plane' tax from 1 November 2009 to make the tax better fit the environmental impact. So far this is just a "good idea" and HMG will be consulting.

* A commitment (?) to increase the use of auctioning for EU Emissions Trading Scheme (ETS) permits for Phase III, with a significant increase in the level of auctioning for large electricity producers to improve the efficiency of the scheme and tackle windfall profits that have occurred in this sector;

* Confirmation (?) that Climate Change Agreements will be extended until 2017, subject to state aid clearance; and

* Measures to encourage energy efficiency and new technologies, including a push in Europe to speed up action to improve energy efficiency in consumer goods and to reduce the rate of VAT for the most energy-efficient products, consulting on the UK's product standards and providing incentives for businesses to install microgeneration.

The Government will also aim to ensure that future phases of the EU ETS will continue to recognise the carbon savings delivered by Combined Heat and Power (CHP) facilities.
Internationally, a fund will be established at the World Bank as a mechanism for delivering the international element of the Environmental Transformation Fund, announced in this year's Budget.

Which means we will have to wait until Europe approves / catches up / agrees.

The contribution of the UK to global warming is virtually zero. The sole contribution we can make is to reduce fossil fuel consumption - we need to do this as the forthcoming UK energy deficit looms. (FCUKED) - exhortation, fancy trading schemes manufactured, massaged by nameless unelected civil servants whilst the City money juigglers skim the cream is no way to do it.

The only way to cut fossil fuel consumption is to make it too expensive. Tax it. We have been taxing oil at hideously punitive rates for decades throughout Europe - if serious we have to impose those taxes harder and wider.

Carbon trading is just another chip being forged in the casinos of the city, nicely timed to slot in as the trading of "securitised Special Purpose Vehicles" hits the buffers, following mis-sold pensions, and endowment policies (remember those ?).

Severn Power - Burning more gas we haven't got for electricity we probably won't be able to afford

Carron Energy is a private energy company founded in 2003 by Alex Lambie and Shezad Abedi . It was initially backed by Rutland Fund Partners the UK private equity firm that specialises in turnaround and recovery acquisitions .

How Rutland acquired the Uskmouth power plant for £33 Mn, from the Receivers of AES in 2004 and sold it on to Carron for £125 Mn in 2006 for £125 million and made over four times its investment in 20 months, generating an internal rate of return of 150 percent is a fascinating tale told here.

A Five year secured finance facility of £125m was arranged by Deutsche Bank with Strategic Value Partners and Trafalgar Asset Managers .

The three-year darkspread hedge (balancing the value of power against the cost of coal), agreed with Morgan Stanley will also deliver predictable income, further supporting the value of the funding raised.

The arcane and huge world world of energy wholesaling and trading is inherently risky, fundamentally affected by weather patterns, but also the volatility of those regions which supply oil, gas and to alesser extent coal. One US group, Amaranth Advisors, lost $6bn (£3.19bn) off the back of falling prices of natural gas when they bet the farm (firm) on a rise on natural gas prices and were wiped out - well their investors were.

If energy prices fall (see previous post) as a knock on from the US/EU Credit Crunch as demand is hit, many of these cute energy hedging schemes / carbon trading deals could turn VERY sour, may not seem such a good bet... but what do we know ?

Read about the exotic and risky world here of ,"Dispatchable independent power producer supply contract:", "Variable-quantity options "Fixed price per MWh multiplied by variable amount" - a game which it appears most players, use other people's money, butthose with very strong nerves use their own.

This fascinating article which interestingly enough quotes MrAbedi in a former role as, chief executive of Bright-Spark Energy Risk Consultancy in London, who , " sees the (energy) industry structure changing so quickly in the underlying markets that counterparties need margin to cover non-quantifiable or non-hedgeable risk. £

It also quotes Carlos Blanco, vice-president at FEA, a software firm in California who says, "Exotic options, when properly structured, hedged and understood, provide power market participants with a potent tool, giving them the flexibility to manage and transfer inherent business risks to other parties with natural offsets or different degrees of risk tolerance.”

Which sounds an awful lot like snake oil to some people around here.

It also quotes E-lecTrades Anil Suri, “Over the next few years, innovative deal structures will surface to rationally price and allocate the unique risk of power supply. That just means there are even more exotics to come.”

You bet, and we smell singed wallets in the air. ... a step along the road to selling mortgages on double-wides to Viet vets with a habit.

Having purchased Uskmouth A and B coal-fired power station, on the banks of the River Usk near Newport they set about the plan that AES had to install a gas powered station on the site.

The Department for Business, Enterprise and Regulatory Reform,(DBBA) formerly the Department of Trade and Industry (DTI) (presumably because we have no more Trade and there is very little Industry left to damage or destroy, has given the go-ahead for Severn Power, - a wholly ownwed Carron Energy company to build a new £400 million, 800MW CCGT (Combined Cycle Gas Turbine) power station on the site of Uskmouth A power station - Uskmouth B a 360MW coal fired unit will continue to operate alongside to the proposed CCGT power station.

Site works have already commenced, to prepare the site for building and to create environmental landscaping features that are an integral part of the development. Severn Power is due to start commercial operation in 2010 following a 30 month construction (Siemens are the preferred bidder) period and four months of commissioning.

A gas supply for the new plant will be delivered by extending the local gas distribution network, which is owned by Wales and West Utilities. The pipeline will be connected using the latest below ground horizontal drilling techniques which will mean minimal disruption to the land above it the pipeline route. (it says in the Press release - but one has recall of a horizontal drilling in Iraq to tunnel under the Euphrates which went horribly wrong.)

It was only 15 months ago that Severn Power submitted proposals under the terms of Sections 14 and 36 of the Electricity Act 1989 (as amended) to the Department of Trade and Industry, which then conduct a consultation, including the local authority and other interested bodies. Section 36 covers the application for a permit to build a power station, and Section 14 the burning of gas.

So UK plc closes coal fired power - and build even more gas burning units and place even more national reliance on a product to heat and light our homes and power industry on what is increasing in price, and whose sources of supply we have negligible control.

.. and it's in the hands of folks who engage in darkspread hedging who trebled their money juggling assets from the receivers.

We hope it all works out nicely for them.

Institute for Animal Health - an unhealthy concern Part 2

The Daily Telegraph have picked up today on the funding and staff cuts at IAH and quote Peter Ainsworth, the shadow environment secretary...

"I am worried about reports we have seen in recent months about funding cuts to the institute and remarks made by the director of the IAH saying he is being asked to run a Rolls-Royce service on the budget of a Ford Cortina. That might have something to do with it."

It is therefore interesting to note submission the House of Commons Select Committee on Science and Technologyon 23rd November 1999 explained their role and the problems with MAFF funding.

"The Biotechnology and Biological Sciences Research Council (BBSRC) sponsors eight Research Institutes which represent a major element of the Science Base underpinning the agriculture, food and environmental industries. The funding for these institutes is drawn from a range of sources; overall the BBSRC's strategic grant accounts for 36 per cent of total funding, and MAFF and other government departments account for 28 per cent. Over the past 15 years, the decline in MAFF and other departmental funding has put major pressure on the BBSRC's Science Vote to meet redundancy and other costs. "

They go on to quantify the effects on funding ...

2.3 The decline in MAFF research expenditure has placed serious pressures on the BBSRC's science budget income over the past decade and a half. Following the 1972 White Paper "A Framework for Government Research and Development" (Cmnd 5046), £19 million was transferred from the then Agricultural Research Council to MAFF as the "customer department". This sum would be worth around £90 million in 1999 prices, while MAFF research spending within the BBSRC institutes currently runs at just over £30 million. The gap between these figures represents a loss of funding broadly equivalent to the total Science budget expenditure on institute-based research in 1999-2000. The decline has caused the Council to reduce employment in the institutes from 5,750 in 1982 to 3,400 in 1999.

2.4 Over that period, there have been some 1,800 compulsory redundancies and 700 voluntary redundancies, funding for which has predominantly had to be found from within the AFRC/BBSRC Science Vote.

This represents a very significant loss to science

It also means that money to be spent paying people for undertaking scientific research was actually spent on providing generous terms of redundancy - presumably to the older more experienced staff.

If therefore you turn to the same committtee meeting November 2006 you find that there is eveidently a reluctance for DEFRA (the successor to MAFF) to continue funding at the same level. Exposing a major hole in the funding of scientific institutes. For example, the Chairman placed his concerns (and the public's ) very squarely ..

Q171 Chairman: But it is very difficult to reconcile that with the need to have a science facility on tap for when you, as a government, need it when there is an outbreak of foot and mouth or bird flu arrives or whatever. How do you reconcile those two things of maintaining the institute base or, if it is not going to be the institute base, what will it be—the universities?

Lord Rooker: No, I might say the two examples you give are bird flu and foot and mouth and we make sure that our procedures are in place to account for that. We have to account—

Q172 Chairman: But you do not know what you are going to account in the future.

It is instructive to read the whole day's events to appreciate the quality of the mind of Geoff Rooker who attempts to explain a reduction in funding to the IAH is not a cut .. or a cut is not a reduction ... or

We have Dr Harris to thanks for nailing the bastard ,but it does expose how the IAH and associated Research Institutes are being underfunded, understaffed and not the places where graduates naturally seek employment, as their funds, facilities and reputation decline.

Q192 Dr Harris: That is consistent with the government evidence regarding this which is why I was asking you about it. On this question of cuts, Lord Rooker is very clear that there were no cuts, but the impression out there is that there have been cuts in Defra funding, as you are aware, possibly because the figures reduced for funding. Last year, 2004-05, for the Institute of Animal Health it was £9.6 million from Defra and it is now £8 million in 2005-06, for IGER in 2004-05 it was £8.2 million and it is now £7.1 million and from Defra for the Rothamsted Research Institute it was £6.4 million in 2004-05 and it is now £5.1 million in 2005-06, so that is a reduction year on year in the funding from Defra for those three organisations. In what way is that reduction not a cut?

It is worth remembering that it was only in August 2006 that it became apparent that The DEFRA / Rural Payments Agency (RPA) had paid about 500 farmers £30,000 each too much, while about 800 have been overpaid by £7,000... a loss of over £20Mn.

Of course it was not until March this year that the scale of the RPA cock up revealed that the UK would be obliged to pay fines of up to £500Mn which would come out of DEFRA budgets.

With her fucking crazy European Trading Scheme for carbon and the RPA fiasco and the rundown of funding for agricultural research Mrs "Mad Cow" Beckett (and Gordy whose Treasury happily mopped up the savings to squirt elsewhere) have a lot to answer for.

PS : The Foot and Mouth outbreak in 2001 led to between 6.5 million and 10 million animals being destroyed and cost as much as £8.5bn.

Pic is Lord Rooker (left) being introduced to HOL in 2001 by Lord Bernard Donohugh. They make a lovely couple.

Carbon Offsetting - how everyone in the media is discovering what a fucking fraud it is

Channel 4 have a Dispatches program tonight exposing the fraudulent "carbon offset" bizniz which Lord Patel has been doing for a long time -see all these posts.

It is called The Great Green Smoke Screen Channel 4 News science correspondent Tom Clarke dissects the many 'solutions' to global warming being marketed to onsumers, from tree-planting and carbon offsetting to green energy tariffs, and reveals how attempts to buy our way out of climate crisis may (good weasel word here - don't commit yourself Tom) be making things worse.

He is not the only one.. this is a good place to start ...

"Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power" a product of the Dag Hammarskjold Foundation.Which they call their Development Dialogue 2006:September, no.48 You can download (PDF alert) the whole 350 odd pages or (recommended) 6 seperate chapters.

OR

Better still obtain a free copy by e-mailing Kajsajsa.overgaard@dhf.uu.se or (in Britain only) larrylohmann@gn.apc.org or secretariat@dhf.uu.se or Fax: +46-18-12 20 72

This is how they outline the plot in an arch and quaint fashion but does give you an idea of the content - read and judge for yourself.

Chapter 1 A new fossil fuel crisis/ In which the growing climate crisis is traced mainly to the mining of coal, oil and gas; the dangers to survival and livelihood are outlined; the political nature and implications of the problem explored; and reasonable and unreasonable solutions sketched.

Chapter 2 ‘Made in the USA’ / A short history of carbon trading In which the surprising story is told of how corporations, academics, governments, United Nations agencies and environmentalists united around a neoliberal or ‘market’ approach to climate change emanating from North America.

Chapter 3 Lessons unlearned / In which carbon trading, contrary to slogans about the universal eff ectiveness of markets in dealing with environmental and social problems, is shown to be ill-suited to addressing climate change. The experience of the US in pollution trading is demonstrated to be an argument not for, but rather against, making carbon markets the centrepiece of action on global warming.

Chapter 4 Off sets / The fossil economy’s new arena of conflict In which it is shown how projects designed to compensate’ for continued fossil fuel use are helping to dispossess ordinary people of their land, water, air – and futures.

Chapter 5 Ways forward / In which the claim that ‘there is no alternative’ to carbon trading is dissected and set aside, and emerging alliances for a more democratic and effective climate politics are explored.

Pollution trading the authors have belatedly recognised is a completely new idea, foisted on the world by a small circle of neoliberal institutions in the US. Surprise - Surprise !! Pollution trading’s main appeal is that it promises to save make money for the rich over the short term.

As a pollution control policy, it is sure to fail..... ahem .. in Europe where it HAS been tried ...it has FAILED ... the ETS market closed on Friday at just 12 cents, the lowest ever....having made a lot of traders, lawyers, accountants, banks very rich on the way and many credulous investors much poorer.All credit to media lens for finally realising what twats they have been all these years as the wool has been ever so gently pulled over their eyes... quite how difficult is it to deprive children of their candy ?

Pssssst.... want to stop somebody doing something? - tax and regulate, admittedly it has limited itility eg. European fuel taxes cf USA ... but of course it depends what you do with the taxes you raise.. the European Gubments just piss them up against the wall.

Anyway read the report - 350 pages but it's big type on artfully landscaped pages and the text boxes a la US textbooks makes reading easier ... the Bibliography is excellent. See also ....See also "Obscenity' of carbon trading" by Kevin Smith in the BBC Green Room , he is a researcher with Carbon Trade Watch, a project of the Transnational Institute which studies the impacts of carbon trading on society and the environment.Also by him "Stern Words While in Europe They are trading Hot air" also at (http://www.thepolitician.org/)

"Labour MP Gerry Steinberg described the scheme as a ‘mockery’ and an ‘outrageous waste of public money’.""A massively generous allocation resulted in windfall profits for some of the UK’s most polluting companies, to the collective value of £940 million according to Franck Schuttelar, an analyst at the energy-trading firm Gaselys

.""Waiting yet more years to learn further lessons from the next round of
ineffective emissions trading is a luxury we don’t have."

See also his "Carbon Cop outs" - He is also co-author of The Carbon Neutral Myth: offset indulgences for your climate sins, forthcoming in January 2007.See also Climate Fraud and Carbon Colonialism: The New Trade in Greenhouse Gases (pdf alert)by Heidi Bachram CAPITALISM NATURE SOCIALISM VOLUME 15 NUMBER4 (DECEMBER 2004)
"The changes necessary to avert climate catastrophe are simple enough, namely, a switch away from fossil fuels and to renewable energy like solar and wind, along with a reduction in energy use generally."

You can watch Channel 4 Live on the net anywhere by going here and logging in.

An infuriating program with a few nuggets of information and a lot of footage of the telegenic reporter sitting at a laptop loking puzzled.

It has been said before ... carbon offsets are the equivalent of the mediaeval church selling indulgencies - if you don't know what they are Google it.

There is one effective way to reduce carbon dioxide emissions - and New Zealand have recently introduced it. An energy tax. Not the complete answer, not the only answer but a good start. Carbon trading just fills the wallets of financiers and their lawyers, advisors, consultants, and PR boosters. They found their top shill in the hapless, hopeless, chinless Margaret Beckett who thankfully appears to have gone to that great Caravan in the sky.

Biofuels plc - all that is green is not golden

Lord Patel advised readers that on Friday 30 June 2006, Rt. Hon. Tony Blair, MP., the Prime Minister visited the Biofuels Corporation to open their Seal Sands plant -Teesside 1 where he met Mike Buzzacott BA. FCCA the Chairman and accountant who took over in March this year after 34 years at BP and was Group VP Petrochemicals.

Well there was a lot of happy talk about bright prospects... that have gone horribly sour in 12 months.

Now one year later the Company have put out a note for their Investors and shareholders on proposed re-structuring of the group .. and notification of an EGM on the 23rd July at 10.30 am when Investors will need to accept liquidation or under terms proposed in which Barclays effectively write off a debt of £40Mn they will take 94% of a new holding company (Newco) which will run the company.

Mike Buzzacot who 12 months ago was glad handing the PM says ..."The Board has concluded that ,given the existing financial structure..... The Board has accordingly succeeded in agreeing the terms of restructuring with Barclays ... unanimously recommended by the Board"

The Board explain that problems with the plant design (they are currently claiming against the suppliers Energea Umwellttechnologie GmbH for a "potential claim in respect of design deficiencies) higher vegetable oil prices, lower biodiesel prices - depressed by US biofuel production subsidies, and the high $/£ exchange rate have impacted plant operation, sales and profitability.


Fixed Assets are boooked at £34 Mn. with Liabilities of £96 Mn. and shareholders with negative £62 Mn and trading losses last year of £32 Mn.


Following the restructuring the Company (Biofuels plc) will own 6% of what is left and the shares will cease to be traded on the AIM market.

Poor old Tony, as soon as he walked away the share price started dropping.

One of the Directors leaving is Clare Spottiswoode CBE well known as Director General of OFGAS where she had a spat with US smooth but tough guy Richard Giordano, when she demanded BG be split so that it no longer had an interest in restricting access to gas pipes to keep its retail prices high - now of course making Centrica an assailable target for GAZprom.

Tony Blair and Gordon Brown are apparently much impressed with this forceful lady and Downing Street and the Treasury asked her for advice over the then head of head of the telecoms regulator, David Edmonds about the take up of Broadband services. (Why do they so like tough lady cookies ? Sally Morgan, Anji Hunter, Carole Chaplin, the simply beautiful Lady Amos, Ruth Turner, Shriti Verdara , Baroness Scotland, Tessa Jowell, Patricia Hewitt ...mother figures or repressed homosexuals ?) - at the time she was also a Director of British Energy.

Claire Spottiswoode has also been a Director of Booker plc and when appointed to Biofuels was deputy Chairman at British Energy, a Director of Oslo based Petroleum Geophysical Services, and Chairman of Economatters a subsidiary of Crisil the Indian Credit Rating Agency ,director of Tullow Oil and Advanced Technology (UK). - un surprisingly she also Chairman of a Children's Nursey aptly called Busy Bees.

EconoMatters is the holding company of Gas Strategies Consulting Limited, Alphatania Limited, Overview Conferences Limited and Gas Matters Limited and was founded by Ms. Clare Spottiswoode Chairman, James Ball President and Chief Mentor, and David Ledesma Managing Director and Chief Executive who sold out to CRISIL on December 17th 2003.

They publish the excellent review journals for the gas industry Gas Matters, Gas Matters Today, LNG Focus and GasMatters Online - at the time Lord Patel, an avid reader felt Mr Ravimohan made a very shrewd move and got a bargain....and he also represented the vision of the emerging Asian energy players.

If you want to be well informed on Natural Gas / LNG / Energy matters these are essential reading - try this round up on the global LNG market and current / future demand and supply trends.

as a taster..

"In Barcelona , Mohamed Hassan Marican said that “LNG demand is expected to grow to 375 million tonnes by 2015” – an average of 10%/year – while “current forecasts indicate LNG production capacity will grow at about 8%/year until 2015, almost doubling the current volume”.

However, Marican introduced a note of realism by going on to point out that there have been few new project launches in recent times. Contrary to expectations at the start of 2006, the only green-field liquefaction project to reach final investment decision last year was Peru LNG. Moreover, several projects currently under construction are facing substantial delays.

“There are now serious concerns,” said Marican, “that there will be a supply crunch by 2010”.

You don't see that in the City Pages... now go and read about New Zealand's recently introduced energy / carbon tax - the world's first. it is not the only answer, it isn't the complete answer but ot sure as hell beats the fucking crazy carbon trading scheme the gamablers and munni jugglers of Europe are forcing down our throats.

Monbiot devisor of the Calculus presents the Monbiot Demon Rule on BBC Radio 4 "Any Questions"

It is a reflexive response from a lifetime of listening which combines probably with a deep personal sense of poor self worth mixed with a monastic wish for self flagellation that Lord Patel insists all staff listen to the weekly edition of the BBC 4 "Any Questions" program and the odious, repeated and otiose interjections of David Dimblebore (or is it the other one ?).

Probably if strapped to an ECG, the news that intellectually challenged ex MP Peter Tatchell had been worked over by the thugs of OGPU or NKVD or FSU (FRU even) whilst marching unwisely around Moscow this week, demanding liberation of homosexuals from the repressive state organs of Mr Putin and been reduced to a semi - vegetative state (difficult to tell with this type of agitateur who approaches each and every "issue" with an open mouth and a closed mind) meaning he couldn't as advertised attend.

That potential ECG would have registered a tremor on the appropriate Richter scale of something like 9, when it was announced that George Monbiot, the incessant yapping lap dog of Metropolitan muttering classes had been hastily pulled (like Becks for England at the last minute) into the team.

Sure enough the twin Aunt Sallies of "climate change" and "Crusader George Bush" were propped up and the other George like the Saint he would paint himself, sallied forth... comparing Trofim Lysenko to George Bush.

Now to compare the war criminals and gangsters like Stalin and George , nation's leaders, one who fixed elections and the other who simply ignored them is perhaps reasonable. It doesn't advance many arguments however. But George has heard of a man who does.

Trofim Lysenko Трофи́м Дени́сович Лысе́нко was a hard working , diligent scientist of ex peasant stock (social mobility existed in regal Russia even though they had few Grammar Schools, if any), he developed and introduced wheat crops that could by seed treatment (Vernalisation) could be autumn sowed, extending their range of cultivation and yield, amongst many other crop improvements. Benefits that still persist throughout the world of temerate agriculture as a direct result of his pioneering and basic crop research.

He was a supporter of the French 18th century biologist Lamarck, and his theories on evolution .... more as an antidote to Darwinism, a stance which Stalin was happy to support (and admire - a rare commodity in Satlin's Russia) - just as many millions in George's Empire believe in "Intelligent Design" - and not a few in Tony's Academies.

Lamarck's theories were regularly ridiculed in a Victorian world attuned by T H Huxley to Darwinsm - much as Clarence Mitchell sells Madeleine to the mawkish masses today - he was if you wish to use a modern metaphor , Charlie Darwin's Max Clifford. As today a shorthand had to be produced, a "sound bite". Science to be understood by the multitude, had to be reproduced to simplistic terms - and the term was, "acquired characteristics" and much was the guffawing at pictures of Giraffes with long necks who had grown Lamarck surmised, in a world before Mendel, Crick and Watson, Jacques Monod and AG Darnell, by stretching their necks to reach higher and higher uneaten tree leaves, a characteristic they passed on in their "germ" to their offspring.

Such was the position up until the 1960's when Monbiot was struggling to understand the principles of biology, or to put it in a way he would understand, Lamarck bad, Lysenko bad, Darwin Good. It was only in the early post war world that the nature of the genome began to be understood and a few brave souls, Prof. Blower at Manchester University, Prof (?) Maynard Smith at London, began to understand that the genetic map was not a fixed and immoveable plan but was susceptible to continuous change both in construction an effect. (What we have learnt to call genetic expression - we have of course also learnt that Darwin should have called his book "Origins of Species") This was of course the period when scientists such as J D Bernal,(author of "The Social Function of Science" and the 3 Volume History of Science that James Burke plagiarised for his excellent TV series "Connections). Lancelot Hogben, and Needham and later medawar were, through contact with the Soviets to make such great changes (drien to some extent by Popperianism) in the understanding of the philosophy and history of science.

Today the science of "developmental genetics" the role of mdRNA and other transpositional elements is understood that we now realise that Lamarck was nearly right, Lysenko perhaps even righter and the post war geneticists struggling with those tantalisng saliva glands of Drosophila melanogaster even righter still.

So Trofim Lysenko was in many respects a remarkable and worthy scientists who did a great deal to improve agriculture and the understanding of the operation of what we now call the genome.

Lysenko was of course the obedient (and latterly the willing) tool of the Soviet State, of Stalin , but curiously was never a member of the Communist Party up to his death in 1976 - we first hear of him from a dissident Medvedev, who retailed the gosip of Popovsky the scheming of Vavilov, the dirty work of Beria. Of course Lysenko invented results and told lies about the cropping and productivity of his work, was boastful, - he would probably have have been killed if he hadn't. Well might Monbiot have had impressed upon his childish and childlike brain that LYSENKO WAS BAD.

This demonisation of Lysenko of course would go uncriticised, unchecked in most polite, even impolite scientific company, after all, incuriosity is an "inherited charactersitic" of newspaper journalists and politicians. The audience lapped it up and cheered porky george to the roof. Mr McNulty the willing henchman and bootlicker of Johnny "Hammer of the English" Reid at the Home Offjeering at President George's ideas (which none of has yet seen but will certainly preclude (Thank God) ideas of a global carbon market) he will present at the G8 conference next week. Remember of course that George VI's objections are probably more to do with the fact that the USA cannot control such an international market than of any inherent ineffeciency in that market to produce the desired end of lowered carbon dioxide emissions. To George VIth , The World Bank is a GOOD THING so long as it's run by a Yanqui, even if he is a dreadfully corrupt lying, goat and war criminal. NOTE the only difference with Zoelleck the "Enforcer" at the StateDepartmentto make sure Condi did as she was told is that we know he is a war criminal, nobodu is sure yet whether he supped in the salons of Madame Palfrey.

The only thing that will work says this polymath, architect of the rising Police State, anxious to star in the other George's company is a world carbon market. So blissfully ignorant is he of what goes down on he street, it is difficult to beleive he would know how to buy even a bag of tomatoes from Camden Market - and certainly never understand Lysenko's early experiments on tomato breeding which he lied so fabulously about to Vavilov and friends. He certainly has no understanding of the murky goings on at that squalid casino at the end of Threadneedle Street as Harold Macmillan called the Stock Market. No doubt Lord Cohen friend, confidante and financier of the Chanceller nee Prime Minister who has made the odd bob in that market will put him right when he slides effortlessly into the seat to be vacated by the midget Karaoke King,and representative at the Court of King Tony for Israel, My glittering Lord Levy (still out on bail by the way).

The incurious press simply forget that the closing price per tonne of carbon (a EuropeanTrading Unit - ETU) on Friday was Euro 0.30 and just over 12 months ago was trading at Euros 16. They also omit the truth that for all the millions (of tons and pounds / Euros) traded, for all the brokers, lawyers, traders, not a single less ton of carbon dioxide was produced in the whole of Europe last year and in fact by official EU calculations (which are probably accurate to plus/minus 20%) increased.

Just to re-iterate. The Monbiot Calculus = think of a number, make it bigger.

The Monbiot Demon Rule = think of a foreigner, Ridicule, mock, demonise, shout him down.

There. feeling better now. Switch off the ECG. Panic attack over.

Carbon Trading scam, Single Payments Fiasco .. thanks to wanker, Sir Brian Bender

The Financial Times (Fiona Harvey and Chris Bryant) have just woken up to the fact thatthe Defra /EU Emissions Trading Scheme is a financial scam which Lord Patel has beendetailing for over 3 years.

Readers might wish to turn to the Proceedings of the Public Accounts Committee Wednesday 12 May 2004 when they had the opportunity to discuss the scheme with Sir Brian Bender,***Chief Secretary DEfRA(who was soon to move onto the DTI see pic ) this exchange at Q64

Q64 Mr Jenkins: May I put to you that the real priority here was to create a market and not to reduce emissions?

Sir Brian Bender: It was both but creating a market centre in the City of London was a prize. Whether it is 50/50 or 60/40 I think is impossible to answer but it was part of the prize that the City would be the place, and we would look back to the early 2000 years as a time when the decision had taken place where this new commodity trading was centred in the City of London.

Effectively, as Lord Patel has long stated that this is simply another casino and the ETS/Carbon trading is just another supply of chips for them to trade play with.

How it works was displayed in stunning detail a few questions further on...(The company
in question was Ineos Fluor who had taken over part of ICI at Northwich in Cheshire)

Q66 Mr Jenkins: I will give you an example and you can tell me if I am right or wrong on this one then. A company was producing HFC-23 and had a bit of a problem and it built an incinerator. That incinerator takes out 97% of HFCs. The incinerator cost them £1.5 Mn to build but they received off of you £23 Mn plus substantial income from the sale of their surplus allowances. Was that the plan they submitted to you they were going to build an incinerator for £1.25 million thereby dramatically reducing their emissions, and then we paid them £23 million to do it. Was that a good purchase?

After a great deal of waffle from a Mr Derwent from the Ministry Mr Jenkins rather testily asked ..

Q68 Mr Jenkins: Do you not see that as an example of the taxpayer thinking that is a waste of their money?

Mr Derwent: I find it difficult to respond because it is the business of this Committee to come to that conclusion.

Later on we get another straighforward example of the scam at work ..

Q75 Mr Allan: I wanted to pick up another point which is almost the reverse of that, a
concern that the market might take off. To go back to Sir Brian's point about the relationship between this and other schemes, is it likely that we might see firms like the Corus Group or BG Group buying in cheap tonnage from the Ineos Fluors and Invista UKs to meet their Climate Change Agreements and making a profit from the taxpayer purely on paper without doing any savings at all in terms of preventing gases getting into the atmosphere. Is that an economic possibility that we should be worried about?

Mr Derwent: The answer to that is yes, and that is why we accept that the methodology we have used has led to an oversupply in the UK market.

or even more at Question 78

Q78 Mr Allan: If we look at some of the companies—Ineos Fluor £43 million, Invista UK £26.7 million, Shell UK £23.4 million (they probably need the money) BP £18.9 million — the question does remain that we have been giving large sums of public money to the biggest companies in the country which surely anyway would have done these emissions reductions anyway. These are the companies that can raise the money on the market to buy the upgraded equipment they need. You have not demonstrated at all, have you, that we are hitting the companies which we really need to be hitting, the small and medium enterprises, which are the ones who cannot afford to invest in cleaner technology?

Edward Leigh, the Conservative MP and chair of the Public Accounts Committee, finally observed that the scheme ‘seems to be paying [the four companies] £11 million for keeping emissions down to levels they had already achieved before they joined’.

Labour MP Gerry Steinberg described the scheme as a ‘mockery’ and an ‘outrageous waste of public money’.

To be fair to the FT their John Kay, a financial journalist, did say , ‘when a market is created through political action rather than emerging spontaneously from the needs of buyers and sellers, business will seek to influence market design for commercial advantage’.

In fucking spades.

***Sir Brian,is the son of a professor, is 58, married (to Penelope) with two children. He was a Grammar School lad, took a physics degree and a PhD from Imperial College, London, and in 1973 he joined the Civil Service - at the DTI.

In the Callaghan Government young Brian Bender was working closely with ministers. He did 2 years 76/77 bag carrying for the Trade Secretary, Eric Varley. It was the era when Albert Booth was Employment Secretary, Denis Healey was Chancellor of the Exchequer and the coming man of Government was a svelte, sideburned charmer called Roy Hattersley.

After his stint at the DTI in the 1970s Brian Bender was promoted to Europe, returning briefly to the DTI in 1982 to work on steel issues. Under John Major's Government and in the early years of the current Labour Government Sir Brian (as he became in 1998) was seen as a high-flyer, even as a possible future Cabinet Secretary, and received plenty of brownie points when he ran Tony Blair's "delivery" unit. Then he went to DEfRA to help Mrs Beckett continue the destruction of the UK fishing and farming industry.

Readers will probably have freshly in mind that DEfRA lost millions of taxpayers money which will come (at the insistence of Gordon Brown) from Departmental Budgets over the Farmers Single Payment scheme. ..... and who was the top man at DEfRA when the decision to adopt the failed paymwent scheme which has cost over £500Mn ...arise Sir Brian Bender.

The eternnal mystery is that this guy is still in his fucking job at the DTI ... we will watch with interest which companies seek his help on their Boards when he is finally put out to pasture.

The Great Pensions swindle - How Actuaries calculated the loot - and Directors carried it off

Life insurance surfaced as a business at the end of the eighteenth century. It's popularity was based upon the then fashionable hobby of European Monarchs with declining fortunes and rapacious mistresses to promote Royal Lotteries. It was a business described by Ambrose Bierce in his Devil's Dictionary as

" An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who runs the table"

That there was an equivalence in the public mind between Lotteris and Insurance was of the class of simple mathematical delusions such as the European Emissions Trading scheme and Carbon Credits.

Lotteries are based upon a fixed basis - the odds are transparent and calculable if miniscule. The first companies claimed that the forecasting of human longevity could be calculated on much the same principles.

A Unitarian MinisterThomas Bayes led a quiet but busy life attempting to follow the first attempts to determine a way of calculating probability and in a sense it's twin - randomness. Laplace had determined what he called inverse probability - from which Bayes developed a calculus that entitles the user to assign a defineable numerical value to the credibility of our judgements about antecedent eventson the basis of past (and present) observations.

His thoughts were posthumously published in a memoir to the Royal Society in 1763 taken from a scholium found amongst his papers.

This was communicated by another Unitarian Minister. Dr. Price. Dr. Pprice was the first actuary of the Equitable - whose blue blooded members made the most massive losses of any such funds in the last ten years.

It is said that actuaries are people who find acountancy too exciting. Their role and function is decribed by the American Society of Actuaries at their website

An actuary is a business professional who analyzes the financial consequences of risk. Actuaries use mathematics, statistics and financial theory to study uncertain future events, especially those of concern to insurance and pension programs. ......

Their work requires a combination of strong analytical skills, business knowledge and understanding of human behavior to design and manage programs that control risk.

This really is pious bollocks - their motto says more - and well may they trade mark it. Risk is opportunity.

Here is a true tale of a Pilgrim who struggled in the Slough of Actuaries in the City of London and discovered what a lying bunch of fucks they are.

A graduate of Oxford, a skilled, lauded mathematician was successful in obtaining a post- graduate position at one of the major and renowned City of London Actuaries whose name is known and revered and respected.

Companies who have pension schemes have to regularly demonstrate that the funds in the scheme cover the calculated and accruing liabilities of the members. The members will vary with new staff, new mensioners, deaths of pensioners etc., which with income in the period is a relatively simple task to perform, but laborious.

This - (I speak 13/14 years ago) did not benefit greatly from use of desk top PC's , spreadsheets and was undertaken in a mechanical fashion on paper as inherited from it's earliest exponents. The "Partners" really did not take to these new fangles computer thingy's.

The next stage was to calculate the liabilities on the fund, current members in benefit, members who would qualify before the next review etc., and further calculations over different time horizons.

To do this there are essentially 3 variables to determine

1) Members in benefit and their benefits
2) Forecasts of income required as members retired and drew benefit which involved determining length of life expectation - which relied heavily on the Bayesian assumptions - which were as good as the past (and present) observations.(Life tables)
3) Income from funds invested, which may be in a variety of froms, land, agricultural holdings, shares, bonds etc.,

As a back office toiler our eager entrant would prepare these calculations which were essentially simple and iterative and were a grade of high level clerking. The final result would a be a report to present to the Board of the company involved stating what funds were required to maintain it's liquidity.

This would be borne (at considerable cost the Board of the Company) to their Directors who would look at it and say -- "aaah £120 Mn, that seems rather a lot Jonathan (or Torquil, or Robin) the Board think it should be along the lines of ... what shall we say ... £50Mn .. we realise of course this will require extra work, and costs, but of course ... anyway perhaps you will be joining us at Ascot next week and will have it done by then."

Our tyro would then have to recast the figures , the liabilities were essentially (unless a mistake was made) were fixed, it depended upon the income... Perhaps if we look at the rise in the value of agricultural land - the return on equities .... the partner might suggest .... and tap a port red rich nose.

A report would be prepared and presented and passed.

Which allowed the company to declare profits boosted by the sums (sometimes it was zero)not paid into the pensions, the shares rose, the Directors share options would be happily timed(and coincidentally) to ride the crest of the wave ... until next year. On a constantly rising equities market everyone was happy.

Our toiling calculatrix got fed up and suggested that it would save him a great deal of time, energy and frustration if they just asked the board what they wanted to pay and prepare a report accordingly. How could they arrive at such fundamentally unsound and variable assumptions between clients all investing in the same market - he enquired. If Company X expected equities to return 6.2 % why did Company Y expect a 9% return ?

Torquil (or Robin or Jasper) called in our graduate and explained that really he didn't think he fitted in there, he didn't really seem to understand the service the company offered. He explained that he understoon only too well what the service was - spurious valuations of pension funds and their liabilities.

Torquil (or Robin or Jasper) suggested that the company could offer him 3 months salary if he would sign a non - disclosure agreement and leave instantly. He hung on for 6 months pay. Got it. .. and left. He now holds a global position with a US$54Mn pharmaceutical company.

Essentially in the early 90's two frauds were perpetrated by Actuaries - one they persisted in using out of date (and known to be out of date) life tables. It was claimed this was an aid to "consistency" - indeed it was .... consistently wrong. People were simply living healthier and longer so the demands on the funds had a more extensive life that they were calculating. This REDUCED the expected liabilities, now and over time.

To augment this basic fallacy the gradual growth in the numbers of women in senior positions which again distorted longevity assumptions.

Improvident and unproveable assumptions were made about returns on funds, which as the income was repeatedly cut, inadequate cover for incorrectly calculated labilities grew exponentially until the shortfalls in funding were exposed when reality kicked in and the dot.com bubble simultaneously popped.

New life tables were introduced and greater honesty was to be found, regulations was improved, irate, well fed educated judges , barristers ansd stocbrokers in Equitable exposed the huge under fundings , which "emerged" - - a grammatical inexactitude - they were always there, artfully concealed in the confidential Actuarial reports which were limited in circulation to the Trustees of the Fund (s) who would keep bumping into each other at Boodle's, Ascot, Wimbledon, the Masters' Gaudy Night at Christ Church kept the secrets well hidden in a jumble of figures and false assmptions.

So when the Chancellor made his raid on the pension funds in 1997 it was difficult to see or hear any cries from the leaders of the FTSE 100 companies (check) . They had been raiding them for long enough - there is after all, Honour among thieves.

The accumulated underfunding on pension funds was at one time calculated in the 10's of Billions 60/70/80/90 Billion, who knows ? Gordon's £4Mn a year by removing tax relief is hardly , as they say in the curious world of Accountancy practised in the City - Material.