Triple Crunch Log Jeremy Leggett

15.12.06. British Gas, facing a mass exodus of customers, announces first bill reductions for six years. Almost 1m have left in the last year. Parent Centrica has announced plans to lay off 1,300 jobs in the coming months as part of a restructuring.

17.12.06. BIS figures show outstanding derivatives contracts exceed $370 trillion. The market has been growing by double digits every year. Vast amounts of debt are being raised to finance this. This brings to mind the massive amounts loaned for financial speculation ahead of the Wall Street Crash of October 1929.

18.12 06. Gazprom seems to have reversed decision to go it alone on Shtokman gas project: the decision will be taken on which partners to go with in Spring of 2007.

EU heads off US threat of legal action over forcing their carriers to trade carbon with a huge compromise: foreign carriers won’t be included in the EU ETS until 2013. This is a victory for Mandelson, the trade commissioner, over Stavros Dumas, the environment commissioner. It is yet to be approved by member states and the European Parliament. EU carriers will have to trade, and the idea is to auction around 10% of the permits, setting a market price, and giving the rest out free to get the game underway. But, as the FT describes it, in the first phase of the ETS UK electricity generators were also given permits for free, and somehow managed to pass on £300m of costs to consumers.

19.12.06. UK marine species are being driven north by global warming. Many species of barnacles, snails and limpets studied by the Marine Biology Association at 400 sites in the 1950s and again now.

20.12.07. Gazprom strikes a deal with Gaz de France in its latest effort to win European downstream market share. The move gives it a presence in the French market and access directly to industrial customers. The Russian giant is active from Portugal to the Ukraine now, with 25% of the European gas market. In the UK, having hinted at a play for Centrica and been greeted with hostility, it bought a small distributor, Pennine Natural Gas, whose customers include Debenhams.

22.12.06. Undercover reporter shows BNP plan to ride to power on back of global warming, peak oil and the debt crisis. The investigation by Ian Cobain shows the fascist party is planning for the next crisis. Leader Nick Griffin sees “an age of scarcity that will be a once in 200 years opportunity.” He sees an economic crisis as inevitable as a result of the global warming, fuel shortages and rising debt. Addressing a conference of white supremacists and far-right activists in a closed gathering in New Orleans last year, he is heard to say in taped speech: “when the revolution comes - the revolution that is going to sweep away this nightmare - it is going to come in Europe, and it is going to come very suddenly. Bang: one month they don’t support you, the next month – if you’ve done your homework and the circumstances are right – they are prepared to support you.” Griffin believes that the support of just 18% of the electorate would be enough. They’d then be just “one crisis away from power.” A new poll shows that at least 7% of the UK population would consider voting for the BNP, as things stand.

23.12.06. Lord Browne, recently the most admired business leader, now wins the booby prize in a straw poll of City analysts. “It’s a testament to his achievements that he is still around, says an Observer columnist.

UN Security Council approves sanctions against Iran for refusing to suspend uranium enrichment. The resolution bans the supply of materials and technology that could contribute. Bush spoke to Putin to get his agreement. Iran calls the resolution illegal and says it will reconsider its relationship with UN, especially its commitments to the IAEA.

Poll shows majority in UK think religion does more harm than good. 82% think it is a cause of division and tension between people. Only 33% describe themselves as religious. 63% say not.

Archbishop of Canterbury accuses the government of putting Christians at risk in the ME. The UK policy is “shortsighted” and “ignorant,”, he says.

24.12.06. Foreign Office hits back at Archbishop of Canterbury. Its not the policies of the UK that are to blame, it says, “It’s the fact that there are intolerant extremists inflicting pain and suffering on people. These extremists are indiscriminately killing Christians, Muslims, Sunnis and people of all faiths.”

26.12.06. Talks between Gazprom and Belarus over gas price rises break down. Fears grow of the same kind of stand off that brought in the new year in 2006, in the case of Ukraine. Georgia has reluctantly agreed to price rises, and will pay $235 (£115) per cu m. Moldova has also agreed a price rise.

27.12.06. US puts polar bears on its list of threatened species. This is potentially the most significant concession yet on climate change. By equating them with bison and bald eagles, the interior department will have to curtail all activities that threaten their hunting grounds. There are an estimated 22,000 – 25,000 polar bears left in the wild.

31.12.06. Saddam executed on the same day US death toll in Iraq passes 3,000. Execution happened on a Sunni holy day, Eid al-Adha. 60% of those killed were under 25, two dozen were 18, 62 women. UK has 126 dead so far.

1.1.07. UK Government’s Chief Scientific Advisor optimistic about greenhouse progress in 2007. David King points among other things to scope for “G8+EU+5” (India, China, Brazil, Mexico, SA) to make progress with the “Gleneagles dialogue” process. But only if the stabilisation target is 550 ppm CO2e.

El Nino threatens to make 2007 the hottest ever year, climatologists say. Even though the El Nino event developing at the moment looks like being moderate.

Belarus agrees to pay Gazprom double for gas, minutes before expiry of deadline in Moscow’s threat to turn off supply. Gazprom also gets a 50% stake in the Belarus pipeline network. $100 per tcm id the price. This is much better than Georgia, which is paying $235.

See JL blog 20 for summary of July – December inclusive

More than $70 billion invested in renewables last year, and more than 1,200 private equity funds are now active in clean tech. So far 50 RE companies have listed on AIM.

2.1.07. Allstate Insurance pulls out of Delaware, predicting ruinous weather events as a result of global warming. For the moment, no other company follows.

3.1.07. 2006 was the hottest year ever in the UK. Average temperature of 9.7C ….1.1 degrees C above average. The Met office says there is a 60% chance 2007 will be hottest ever globally. Hottest was 1998, also an El Nino year. Ten warmest have all be en in last 12.

Exxon paid $61 m to 43 climate-change denier organisations between 1998 and 2005. So the Union of Concerned Scientists estimates in a report calling ExxonMobil the worst offender in corporate-climate denial.

4.1.07. Oil price hits lowest point for 18 months, $54.90, as a result of an unusually warm winter. New York has not got this far into the year without snow since 1877. Heating oil has not been needed.

Link established between rising sea-surface temperatures and declining fish stocks. German scientists publish the results of a decade-long study of the eelpout in the North Sea. The fish’s oxygen supply is the first to suffer as temperatures go up. Sea-surface temperatures in parts of the North Sea have gone up 1C in the last 4 decades. This is the first time a link has been demonstrated.

David Miliband: British must change every aspect of their lives if we are to tackle climate change. he also says that solar is no good for electricity. "Every part of the way we work, go to school, the way we live is going to have to change." Also: "At the moment solar is really only good for heating your water, not good for powering the electricity in your house. Wind is better for that."

Labour Minister targets airlines over emissions: Environment Minister Ian Pearson dubs RyanAir “the irresponsible face of capitalism.” One flight to NY and back is equivalent in emissions to heating an average EU home for a year. 6.1.07. Ryanair boss calls Minister “foolish and ill-informed” for criticising him.

US presidential hopeful Barak Obama introduces coal-to-liquids legislation. He is from Illinois, a coal state. His bill is co-sponsored by Jim Bunning, a Republican from Kentucky, another coal state. This is the second version of the bill, which aims to build CTL infrastructure via tax incentives, planning assistance and Department of Defense support.

5.1.07. Malaria returns to Italy as climate warms. Italy was declared free of the disease in 1970. Tick-borne encaphalitis is also returning. 20% of the fish now in Med have migrated from the warming Red Sea.

Butterfly and moth species increased fourfold in UK over last 25 years as climate warmed. With a 1C rise and you can expect 14 new species, researchers find.

6.1.07. Israeli defence sources say that Israel will attack Iran’s nuclear facilities if the US doesn’t, and use nuclear weapons in the process. Two squadrons are training with nuclear bunker busters, and the attack will go ahead if the uranium enrichment doesn’t stop.

7.1.07. Russia halts oil exhorts to Belarus in protest at transit tax, also cutting off Germany. President Lukashenko must cancel the oil tax on the pipeline from Russia to the west, says Putin, and stop stealing oil from the pipeline. Lukashenko slapped the tax on after Russia hiked the price Belarus pays for gas. About 40% of exports cross Belarus in the so-called Friendship Pipeline, carrying 1.2 mbd into Europe. Provides 20% of Germany’s needs and 96% of Poland’s.

Iranian oil shortage may mean no exports by 2015, analysts say. The third country with supposedly the third largest reserves in the world seems to be heading towards zero exports. The problem is underinvestment and the highest domestic demand in the world. The mullahs have no incentive to wait 4-6 years to see the fruits of investment. Meanwhile domestic growth is 6% pa.⁵⁶

GM unveils (another) electric car, this time hoping it will spark the firm’s revival. The Volt, a concept car that do 40 miles per charge with a plug-in battery plus onboard recharger, and runs off gasoline or a fuel cell, is unveiled at an international motor show. Hybrid sales have jumped 6 fold over 4 years to 213,000, about 1.5% of all new vehicle registrations in 2006. The Volt is 2-3 years away from the market, GM says.

FT columnist John Kay advises business leaders to treat the green lobby as a religion. “Environmentalism now fulfils for many people the widespread longing for simple, all-encompassing narratives.” Global warming – not clearly Man’s fault, is environmentalism’s Apocalypse myth.

8.1.07. Weaker oil price means OPEC may cancel investment in new production. So says Kuwait’s oil minister Ali Jarrah al-Sabah.

BP oil output falls for the sixth quarter in a row. The City is unimpressed. 3.92 mbd compared to 4.02 a year before.

Tony Blair says it is impractical to limit personal holiday airline travel. The PM says he has no intention of limiting his own.

Unseasonably warm weather in eastern US and UK. “Hedgehogs shun hibernation to gambol amongst blooming daffodils,” says the FT. “Cherry trees blossom and red admiral butterflies soar in the balmy breeze. From sheep to parrots, creatures pop out unseasonal sprogs. January is the new March, and not just in Britain: as Arctic ice retreats, ice rinks are closed across the pond; New Yorkers bask in 22C heat.” But el Nino could also mean cold snaps on the way and death for animals and plants confused about the timing of spring.

Oil falls below $54 for the first time since June 2005 as funds sell. This is a bigger factor in the fall than the weather, Citigroup analyst says.

9.1.07. EU calls for 20% union-wide cut in greenhouse gases by 2020 and 30% globally. Unveiling its energy strategy, the commission said this combination of targets should get the world on track to keep below 2C global average temperature rise above pre-industrial. Otherwise climate change will devastate the Union.

Belarus cancels transit tax on Russian oil. Putin has faced Lukashanko down in this latest example of Russia using energy as an economic weapon.

Blair backtracks on offsetting carbon. After front page scrutiny in the Guardian, and a host of journalists’ questions, now he says he will offset. His recent Miami holiday will cost him less than £90.

10.1.07. Chrysler calls European approach to climate change “quasi hysterical,” and questions climate change as a far off risk whose timing is uncertain. Their chief economist says this at a conference on a platform with his counteparts from GM and Ford, who say nothing to contradict him

China falls behind in its effort cut emissions. Only Beijing and 5 other provinces or minicipalities managed to cut emissions in the first half of 2006 ….by only 2%.

Moscow zoo’s bears can’t hibernate because the weather is too warm. Winter has yet to materialise in the city. The temperature was 5.3C yesterday, when it is normally –18C.

UK Chancellor Brown pledges to set a personal example on climate change, including air travel. Unlike Blair.

11.1.07. Mexico suffers soaring tortilla prices due to corn-based athanol production in the US. The Mexican President promises to act. Tortillas provide most calories for poor families. 80% of the corn is imported from the US.

Exxon cuts ties to greenhouse skeptics including the Competitive Enterprise Institute. Fred Smith, CEO boss, acknowledges this on CNN. Exxon also joins a climate policy action study group set up for 20 companies by WRI.

EU threatens Russia with loss of energy contracts if they turn off oil and gas pipelines again. Energy Commissioner Adris Piebalds says: “We have told them that the disruptions to oil supplies we have seen in the last few days must never, never, happen again.” Supplies were cut during the Belarus face down for 60 hours, 1.6 mb a day, or 12% of EU imports. The EU imports a quarter of its oil and 42% of its gas from Russia. Piebalds calls for investment in renewables, including solar.

12.1.07. BP anticipates the Baker report on refinery safety by announcing that Browne will step down early. The CEO, who presided over a fivefold increase in profits, and a 250% increase in share price, has been made the scapegoat. Tony Hayward is to take over from 1^st August. 16.2: Despite this Browne is still named Britain’s most impressive businessman in a MORI poll.

More conservative shadow ministers offset travel carbon than government ministers. 6 versus 7. Most of the cabinet don’t even offset, including Beckett.

Bush faces rebellion over his plan to send 20,000 more troops to Iraq. And its civil war: “The jihad is now against the Shias, not the Americans (Gdn 13.1)

13.1.07. Baker report slams BP for lapses in safety culture. There are fears within BP that people will have to go to jail over Texas City. The former US Secretary of State blames leadership. John Manzoni, head of refining and marketing, wrote an e-mail bemoaning the fact that he had to visit the refinery after the fire.

OECD report suggests melting glaciers will destroy all but the highest Alpine ski resorts within less than half a century. The industry caters for 70m people a year and is worth E50 bn a year.

Daffodils, normally out in March, are blooming in Cornwall. UK temps of 12C are 9C above the seasonal norm.

14.1.07. M&S announces a £200m environmental plan to go carbon neutral within 5 years. A 100-point plan covers their 460 stores. Offsets will be used only as a last resort. Measures include using unsold food for renewable energy, and labelling on air-freighted food to give customers carbon choice. £200m is allocated to implementing the plan in the next 5 years.

US automakers “in turmoil” as their customers switch to fuel efficiency. The annual Detroit motor show was last week and all is not well. Ford is worst off, with 45,000 job losses from the 300,000 worldwide workforce in a restructuring for which it had to raise over $20 bn by mortgaging its factories. This is an all-or-nothing play. GM meanwhile has shed 34,000 jobs and Chrysler expects a $1.6bn loss for 2006. The price of gasoline has gone up by more than 10% per year since 2002, the cost of steel has gone up, the Japanese are hugely competitive, and now the customers are switching to smaller, greener, vehicles. The Hummer stand at the show was thinly populated.

ExxonMobil meets environment groups to discuss its stance on global warming. A private meeting took place last month with Worldwatch, Interfaith Center on Corporate Responsibility and others. Exxon had long eschewed such meetings, but called this one. WalMart’s experience must have been an influence here.

15.1.07. UK government becomes first to set standards for carbon offset schemes. No details have been worked out yet. Note we need to watch they don’t rule out small projects eg cooking stoves that don’t qualify for Kyoto.

Chief Executive of UK Association of Electricity Producers warns CCS technology is not yet proven. The EU meanwhile is urging its uptake.

Iraqi government will amend law so foreign companies will be allowed profit sharing in Iraqi oil. The law in question is the 1961 law that took Iraqi oil away from the foreign companies.

Blair pushes for officials to be allowed to share data on citizens. He wants to relax the current “over zealous” rules.

16.1.07. Oil sinks below $50 as Saudi Arabia sees no need for a cut in production. OPEC has 3 mbd spare capacity, the Saudis claim.

American scientists and evangelicals join forces in a new organisation to lobby for climate action. Founders include the Interfaith Center on Corporate Responsibility.

British Gas price rises push their market share under 50% as 4 million customers switch suppliers. SSE is the main beneficiary.

17.1.07. Tesco joins the retail carbon-cut competion: 50% UK emissions cuts by 2008, 50% global by 2020, carbon to be labeled on each of its 70,000 products. Tesco has 1,900 stores in 12 countries. £500m is to be spent in the next 5 years on top of a £100m sustainable energy fund. The capex budget is £3bn pa. The retail giant pledges to fly in less than 1% of its products compared to 2-3% today. 25.1. Tesco will face considerable difficulties in calculating embodied energy.

18.1.07. Carbon dioxide levels in 2006 again rose above the long-run average - a record 2.6 ppm rise- raising fears of runaway warming. This is the fourth year of sharp rise out of the last 5. The 1970-2000 average was 1.5 ppm. See JL blog 21, 19.1.07.

Mexico’s tortilla price inflation threatens new President. The mainstay of the nation’s diet is becoming too expensive for the poor as corn stocks fall.

19.1.07. Insurers cancel hundreds of thousands of policies along the US east coast. As insurers realize global-warming risk is high, rates are skyrocketing even where insurance can be bought. The industry lost $71 bn in 2005 catastrophes, incl. Katrina ($45 bn itself).

20.1.07. Chinese fire the first ASAT missile test in a quarter century. There is consternation in the defence community.

First Downing Street official arrested in Cash for Honours fiasco. Ruth Turner, director of government relations. Quote by Tony Blair at the Labour conference: “I only know what I believe.”⁵⁷

21.1.07. BBC runs a David Attenborough special on climate change with results of mass-PC studies. Climate models run on a national PC network show UK average warming will be 1.2C by 2020, 2.5C by 2050, 4C by 2080. Note: London was 9C hotter than the countryside in 2003. Sewers can overflow, and have eg in Glasgow. ABI exec: the UK faces a “worst case” of a £20bn loss by 2080. A 10km long outer barrier for the Thames would cost £20bn …equals the whole national council bill. See JL blog 22, 22.1.07.

Ten US CEOs call on Bush to support 60% by 2050 CO2 cuts. Forming the US Climate Action Partnership (USCAP). Members of the USCAP are CEOs of Alcoa, BP America, Duke Energy, DuPont, Caterpillar, General Electric, Lehman Brothers, FPL Group and PG and E. “It's time for the nation's political leaders to come together and act," Duke Energy chief executive Jim Rogers, told reporters at a news conference in Washington.

Ofgem criticises the UK’s Renewables Obligation as a very expensive way to reduce carbon. £187 to 481 a tonne compared to £12-17 in the ETS. The regulator also attacks the inadequacy of government renewable electricity subsidies.

BT pledges to cut carbon footprint by 80% over next 9 years. This is the boldest corporate target yet, from a company that accounts for 0.7% of UK electricity.

In Mexico, Pemex’s oil production is in decline, internal documents show. There will be 150,000 mbd less exports within a few years. US exports now 1.5 mbd.

22.1.07. Russia extends its oil and gas nationalisation programme: offshore prospects only for Gazprom & Rosneft, TNK-BP under assault. The government is preparing to shut all foreign companies out of ownership of offshore fields, plus private domestics like Lukoil. And in a move reminiscent of Sakhalin, it is saying TNK-BP is not complying with its licence on the giant Siberian Kovytka gas field, which will soon no doubt be owned by Gazprom.

Bush forced to address global warming in his State of the Union address: a 20% cut in petrol within a decade is the best he can do. He hasn’t mentioned GW in his last 5 state of the union addresses.

Almost 50% of Britons say anew Holocaust possible in UK. YouGov survey. 41% believe possible and 36% believe most people would do nothing to stop it.

23.1.07. At the WEF in Davos, trade negotiators try to restart the stalled Doha process, despite the ascent of greenhouse consciousness. This round of efforts to deregulate trade further started in 2001, since when the world has changed somewhat. The list of non-tariff barriers the WEF wants to chop out are many environmental ones including energy efficiency standards.

Climate change “to affect nuclear sites,” says Met Office report for British Energy. eg Storm surges could be 1.7m higher in 2080 than now at Sizewell, and 0.9m at Dungeness. Dungeness is dumping 600 tonnes of shingle a day as things stand. BBC report: “David Norfolk, a member of British Energy's strategy team, said any new power plant could be located further from the sea to provide more of a buffer for any flooding.” Norfolk quote: "We would locate the station within the site in such a position that we don't perhaps have to work quite so hard in maintaining these hard defences - put it further back so we have more land, more space to absorb any water that comes over, to attenuate the energy of the sea.”

WEF poll shows people around the world are losing faith in their leaders. “Politicians are the least trusted leaders, with business leaders everywhere getting better marks from the 55,000 people surveyed in 60 countries. Still, 40% of those surveyed believe that the next generation will be better off, while just 31% believe their children will be in a worse position.”