Covid-19 Crisis highlights dependency on Fossil Fuels

Delusional Statements in Media made about Climate Change and Coronavirus Crisis

You may have read some puzzling statements in the media recently along the lines of "we must ensure the economic recovery from Covid-19 tackles climate change" or depressing pleas like "we must not forget the even bigger crisis we face - climate change". 

The harsh reality for the climate hysteria movement is that the majority of (PPE) personal protection equipment that have being used during the coronavirus pandemic are made from hydrocarbons, i.e. petroleum based products.

Disposable gloves are made from either nitrile, vinyl or latex. The first two are made from ethylene, propylene and PVC (polyvinyl chloride), all of which are manufactured from materials extracted during the petroleum refinery process.  Latex gloves are made from natural rubber but of course that must be shipped from Malaysia using, what else, but diesel to fuel the ships.

The most popular face masks are the blue polypropylene masks. Polypropylene is manufactured using propene. Propene is produced from fossil fuels, mainly crude oil but in recent years China has used gasified coal. Propene is the second most important product used in the petrochemical industry, after ethene (which is used in PVC production).   

Then there is the issue around food hygiene. There will be increased pressure on shops to cover all food in the wake of the Covid-19 crisis. Plastic, produced from the distillation of crude oil, is of course the most popular cover used. 

So, the Covid-19 crisis only highlights the dependency we have on fossil fuels. Attempting to link climate change to the enormous challenge posed by the Covid-19 crisis is delusional given the worldwide dependency on oil in fighting the virus from masks and gloves to the transport needed to transport them and other necessities like food around . 

But if they really wanted to reduce emissions anyway, they would have to bring all that manufacturing back to Europe and produce everything we need here. 

EU Fossil Fuel Imports have Increased

Surprise, Surprise - The Renewables Program has Failed

One might expect that after installing all this renewable energy, that European Union countries would be importing less fuel. But the failure of their ideologically driven energy policies can now be understood by this simple graph. Gas imports are well up, and even oil and coal are slightly higher as compared to 2007. If the ultimate goal is to "divest" from fossil fuels , then we have got no further on. Perhaps it's time to do a proper cost benefit analysis before we go any further?

Back to Fossil Fuels

One third of Ireland's exports is Medical and pharmaceutical products but yet we are still reliant on China for medical supplies during the coronavirus crisis. Coal obsessed China. 

During the crisis, the obsession with renewables has being dispensed with and we are now as a nation happy to use fossil fuels guilt free again. 

Where hospitals get their energy from :

Cargo ships are keeping the nation fed during the crisis. 

How are cargo ships fueled ?  Heavy fuel oil and marine diesel oil.

And equally important are the diesel fueled lorries going up and down the motorways.  

When the chips are down in a crisis like we are now in, reliable energy sources are essential. It's just a fact that fossil fuels are the only option that meets that requirement right now. If Extinction Rebellion got their way, the deaths from coronavirus would be much greater.

ESB Profits show that Wind Energy has not Reduced Reliance on Fossil Fuels

ESB operate most of the fossil fuel powered generators in Ireland. Their gas, peat and coal generating plants amount to about 3,400 MW. Hydro about 400MW and wind about 450MW. So about 80% of their generation is from fossil fuel sources.

Given that Ireland now has in total about 3,500MW of wind, we should, if the wind energy supporters are right, see wind energy eroding profits in ESB generation.

But their latest results show that their Generation and Trading business has increased it's profits by    € 26 million to € 70 million. Although there was lower running in Moneypoint, this was more than offset by a higher margin in gas plants. 

A breakdown of this profit is not given, but we can safely assume that most of it came from fossil fuel generation since that comprises 80% of their business as I have shown above. It is indicative that during the same period, there was an impairment charge (i.e. a write down) of €1.8 million for a wind farm.

So almost a decade on from Ireland's Renewable Energy Action Plan which stated that :

Renewable energy reduces dependence on fossil fuels, improves security of supply, and reduces greenhouse gas emissions creating environmental benefits while delivering green jobs to the economy, thus contributing to national competitiveness. 

 we can now see that wind energy does not reduce dependence on fossil fuels, rather, it maintains dependence on it.

Fossil Fuel Divestment Bill a Token Gesture and Commerically Reckless

The Irish Government is set to divest over €300 million of it's investments in mostly US fossil fuel companies. This paves the way for more investments in renewables, including the Irish wind sector which as this blog has shown has been making losses in recent years. 

BP data shows that oil, natural gas and coal will still be the dominant energy sources in the future even with rapid growth in renewables. 

BP Data

In transport, oil will comprise over 80% of the energy sources used by 2040. 

The mission statement of the NTMA (National Treasury Management Agency) is to manage public assets and liabilities commercially and prudently.  The fossil fuel divestment bill is at odds with this mission statement as it's purpose is to divest from the most profitable energy markets and from energy sources that will be in high demand for many more years to come. The NTMA do not seem to have carried out a commercial assessment of renewable sources like wind energy. Is it commercially viable or not ? The fact that many Irish wind energy companies are selling up and divesting from the wind energy business altogether might give you a clue. 

The farcical nature of the discussion that took place around the Bill was on full display in the Dail (Irish parliament) with contributions made like this one by Michael D'Arcy of Fine Gael :

I am concerned about something that is happening now, which I see in my own county, whereby people are objecting to everything. It is everywhere. Wind farms are objected to. We brought in new controls to keep turbines back from property boundaries, which is appropriate. There are objections to solar farms. People are creating fear and doubt and saying the craziest things about renewable energies that are clean and tested and have been for decades. It has to stop or we will never meet these targets.  Events like what happened with the Apple data centre in Athenry cannot continue. People who object to a project because it is close to them are wrong in so doing.

It doesn't take too much research to learn that data centres will consume more fossil fuels and make it harder to meet our targets. But here we have somebody in government who believes the opposite. I was waiting for him to say the sun revolves around the earth next.

The fossil fuel divestment bill is a token gesture, will have zero impact on global emissions and will result in losses for the taxpayer.

Ireland's Debt Problem

An economic policy based on rising debt and low corporate tax rates is not and never was sound policy - by Owen Martin

While the Irish media make a fuss over who will be the next leader of Ireland's biggest political party (Fine Gael), everybody ignores the real elephant in the room. According to the European Banking Authority, Ireland has the largest combined private and government debt as a percentage of GDP in the EU and two thirds higher than that of the US. 

 I'm not sure how this graph is not sending shockwaves through the Trump obsessed Irish media and political establishment - From EBA 

   
While Greece, Italy and Portugal have higher Government debt, Ireland's private sector debt to GDP dwarfs those countries. Which means that for the size of Ireland's economy, it's private sector has taken on alot of debt.

But not only businesses and industry. We have the 5th highest household debt as percentage of net disposable income in EU with about twice as much debt as income per household. This may explain how we rank so high in numbers of new cars across the EU.   People are taking out car loans that perhaps they can't really afford. It shows that we as a nation are still addicted to debt.

https://data.oecd.org/hha/household-debt.htm

Denmark, Netherlands, Iceland and Norway all have higher household debt than Ireland but these countries are doing much better when it comes to Government debt as percentage of GDP. Ireland ranks 5th in terms of Government debt to GDP. So while Greece and Italy have higher levels of government debt, they have about half of the household and private sector debt. Denmark's high level of household debt doesn't seem as bad considering they have half of Ireland's Government debt to GDP. 

https://data.oecd.org/gga/central-government-spending.htm#indicator-chart

Norway have the wealthiest government in Europe. In fact, they are far ahead of second place Luxembourg and Finland. Norway has slightly more household debt than Ireland. But that kinda makes sense - they are a wealthy country. Ireland has the 5th poorest Government in Europe (Italy and Greece lie at the bottom). Our government has dismal revenue, in part thanks to our low corporation tax rates. Yet we carry roughly the same household debt as Norway and have an even higher private sector debt to GDP.  This is called "living beyond our means".  Yes, Ireland could do with the € 13 billion in tax revenue owed from Apple. Laughably, the Irish government is appealing this decision. 

https://data.oecd.org/gga/general-government-financial-wealth.htm#indicator-chart

Irish Govt has the worst revenue in Europe yet reject a €13 billion EU tax ruling made in Ireland's favour

Of course if all that debt was used wisely, perhaps we could become richer. We are reliant on Norway's gas which arrives to us through UK pipelines. The Irish government have banned fracking so this dependence will continue for the foreseeable future. Imagine if some of that debt was being used to extract our own gas reserves.

Ireland spends the most on health after Iceland in Europe, yet we still have a permanently dysfunctional health system. 

Ireland has the third highest electricity prices in Europe.

The Irish government takes pride in divesting from fossil fuels and pushing through massive renewables and electricity infrastructure programmes that cost billions and without any proper assessment in the name of climate change.  We pride ourselves on having a massive welfare program and our representatives want to take in more refugees (without any proper assessment). Green/Left politicians cry out as to why we don't do more to tackle climate change, take on more debt (One cannot go the EIB looking for €5 million or €10 million; one needs to go looking for €2 billion. It is there.) and take in more refugees. Ireland is trying to save the world on a sinking ship but our politicians and media don't even realize we are on one.  Have we learned anything from the crash in 2008 ?


POSITIVES

On the positive side, exports are still strong and benefit from the stronger dollar as against the euro. If we went back to our own currency, it would be a strong one as the above graph shows. Presumably thanks to our exports. However, the weaker sterling is not good for exports to Britain. There is a chance that Ireland may actually benefit from Brexit if companies there relocate to Ireland. 

https://data.oecd.org/gga/general-government-deficit.htm#indicator-chart

Ireland has managed to get out of it's budget deficit abyss and back to something fairly normal. If Multinationals move out we could see some real problems, but we would no longer see the massive distortions to our GDP anymore. Perhaps that could be a good thing in the long run. Living on a false economy (now known as Leprechaun economics) is what got us into trouble last time.

I can't see how Ireland's economic fundamentals are much different to that of the Celtic Tiger era.   If anything, things have got worse.

Ireland the First Country to Divest from Fossil Fuels (Or Is It?)

The Irish government has passed a bill forcing the Ireland Strategic Investment Fund (ISIF) to divest from fossil fuel companies.  Apparently, we are the first country in the world to do so. 

When I checked the ISIF website, I couldnt find one company representing fossil fuels. I contacted ISIF on Monday but have yet to receive a response.  I also asked the TD responsible for the bill, Thomas Pringle, he said there were 132 companies including the Dakota pipeline company for a total of €133 million but that no list was available.

A document on the ISIF website states :

for example may include projects in sectors such as water, telecoms, broadband, energy (wind/other renewables/energy efficiency) and forestry. 

This document was published in July 2015, well before the recent bill about fossil fuels was enacted. So I'm still in the dark as to what exactly Ireland has divested from. 

The North Dakota pipeline is owned by Energy Transfer Partners which is an oil and gas company. However, one of their directors, Rick Perry, who was appointed as Secretary for Energy by President Trump, helped erect 11,000MW of wind energy during his term as Governor for Texas. So they are not exactly anti renewables. 

This fact neatly explains the futility of such a bill. If you installed 11,000MW of wind in Ireland, you would still need oil and gas. If you've stopped investing in oil and gas and bet everything on renewables, then the lights go out.  

With Ireland recently banning fracking, it looks like we will be completely dependent on others for reliable energy sources. Not exactly something to be proud of.