After the Bay of Pigs disaster, President Kennedy noted: “Success has many fathers, but failure is an orphan.” He was echoing Tacitus: “This is an unfair thing about war: victory is claimed by all, failure is attributed to one alone.” Surprise, surprise . . . The lockdown strategy is increasingly an orphan. Perhaps because: Little by little the truth of lockdown is being admitted: it was a disaster. Public fear was deliberately stoked to justify decisions made on the hoof and based on questionable advice. At least in the UK, though not in Sweden. Below is the overview of the Telegraph, a right-of-centre UK newspaper: It’s time, it says, to face up to the catastrophic legacy of lockdown.
Talking of massive failures . . . The 2nd article begins: How governments and the cult of net zero wrecked the energy market. And continues: The demolition ball of a self-created gas crisis is swinging through Europe. the market is broken and it is governments and do-gooders who broke it. They broke it wantonly, recklessly, touting their saintly intentions, and now we are all reaping the consequences.
Life in Spain
Early this morning from my eyrie, before the mist rose higher and covered the entire view:-
One of those would-be teenage guys I’ve mentioned, seen in the seafood market yesterday:-
What you can’t see is his enormous gut. What he really needed was a kaftan . . .
Yet another near injury/death experience on a crossing yesterday. Admittedly, I do tackle one of these 12 times a day but this was a new one – on A Barca bridge, not O Burgo’s. This time I had to walk round a car that didn’t stop until it was right in front of me . . . Will this ever end? If so, how??
Cosas de Spain/Galiza
A 2nd HT to Lenox for this oddly-titled article on attitudes towards Californians in Lisbon.
So, is there a revolution imminent? When push comes to shove, says Richard North today, no one is going to take very seriously demands to pay their eye-watering energy bills when the net effect is to make a few obscenely rich people [the CEOs of the energy companies inter alia] even richer. Vamos a ver.
OTT again? How decades of complacency have left Germany facing a cold, dark winter. Betrayed by its own elite, the country is at risk of social unrest.
Quote of the Day
Boris Johnson: We have made the long-term decisions, including on domestic energy supply, to ensure our bounce-back can and should be remarkable and that our future will be golden. Does he really think people believe this sort of crap any more? Very possibly he does, safe in his alternative universe. And ahead of a massive upturn in his income from journalism, after-dinner speeches and new books replete with errors and nonsense.
En passant, talking of Johnson’s knowledge of the energy industry, Richard North today says The idiot has the technical acumen of a demented slug. Which is hardly a surprise. But possibly an understatement . . .
Sorry as I feel for my New Zealand friends, it was great to see Argentina defeat the All Blacks on their home turf yesterday. Which must inspire the Italian and Romanian national teams.
Finally, finally . . .
After a long break, my younger daughter has returned to blogging on life in the UK. Here she is on a holiday which isn’t quite what she was used to here in Spain.
For new readers: If you’ve landed here looking for info on Galicia or Pontevedra, try here. If you’re passing through Pontevedra on the Camino, you’ll find a guide to the city there.
1. Covid: Time to face up to the catastrophic legacy of lockdown. The NHS is on the verge of collapse, but this time due to a tsunami of non-Covid patients who were denied treatment during the pandemic
For much of the pandemic, critics of lockdown were condemned as selfish, stupid, uncaring or worse. Their motives were impugned. Their arguments were misrepresented. Asking whether it was proportionate to shut down the country to control a virus that was only a serious threat to the very old and vulnerable was denounced as Covid-denial. Even Tory MPs joined in the witchhunt, with one launching a website devoted to exposing the “errors” of “dangerous” lockdown-sceptics, including respected scientists.
Rishi Sunak’s interview with Fraser Nelson, in which the former chancellor reveals the extraordinary way in which decisions were made during the pandemic, therefore represents something of a turning point. Mr Sunak says that the costs of lockdown were not acknowledged by decision-makers, that raising concerns about the closure of schools was met with silence, and that dissent within Sage meetings was effectively ignored. “You have to acknowledge trade-offs from the beginning,” he says. “If we’d done all of that, we could be in a very different place.”
This is what many opponents of lockdown have been arguing since March 2020. The difference now is that the costs of that policy are impossible to ignore. The NHS is on the verge of collapse, but this time due to a tsunami of non-Covid patients who were denied treatment during the pandemic. Children are struggling to catch up with lost learning. You cannot simply switch an economy off and on again without massive collateral damage. Handouts and the rise of working from home have fuelled a culture of indolence and entitlement among hitherto self-reliant groups.
In these circumstances, it is likely that other former ministers will decide to go public with their misgivings. Mr Sunak was a member of the “quad” responsible for most pandemic policy-making, along with Boris Johnson, Matt Hancock, and Michael Gove. None of them is thought to have much of a future in front-line politics, and so their former colleagues will have fewer reasons to keep quiet about the flawed processes and political cowardice that saw the UK rush into lockdown.
It is important that they do. Left-wing pundits might obsess over whether the Government failed to shut down the country early enough, but the question the public inquiry ought to answer is whether we should have been locked down at all. As the costs mount, more and more people may conclude that it was all a calamitous mistake.
2. How governments and the cult of net zero wrecked the energy market. Putin may be the proximate cause of this crisis, but the reason we were vulnerable was an intentional policy to crush fossil fuel investment: Juliet Samuel, The Telegraph
Ten years ago, I flew to Texas to take a tour of the US’s most productive gas field. The Anglo-Australian mining giant, BHP Billiton, had spent $20 billion buying a slice of the Eagle Ford shale field and was trying to convince investors, via the media, that it had been a good idea.
BHP’s oil chief, Mike Yeager, a genteel, walrus-moustached Texan, hosted us on a flight over the woods and meadows of Eagle Ford in a helicopter, took us to see production wells, and introduced us to officials in a county (population 20,000) generating $71 million in gas tax revenues. BHP would spend a further $20 billion developing the field before eventually selling it to BP for just $10 billion. It had bought at the top.
This investment rollercoaster has been on my mind because it was the last time serious new money was put into oil and gas development. Since then, investment has fallen 60 per cent. With it, the stock of proven “reserves” – fossil fuels found and viable for extraction – has fallen more than 50 per cent.
Now the reckoning has come. With Russia cutting supply, prices are rocketing. Since January last year, US gas prices have risen nearly threefold. European gas is up sevenfold. Bills are following suit. Proximately, this is because of Putin. But the reason we are so exposed to the whims of a murderous dictator is under-investment.
Why has there been such dramatic under-investment and why is it that producers are hesitating, when they would normally respond to soaring prices by pushing up production and investment? Well, after the shale writedowns, governments and corporate governance busybodies didn’t just leave the losers to lick their wounds. They mounted a campaign to shut down investment permanently in the lifeblood of the global economy – energy – in the name of saving the planet. What we are now facing are the consequences of these decisions.
The mistakes span governments, continents and decades. They are going to cause untold hardship for millions. They threaten not just our economy and health, but the durability of the Western alliance. Most ludicrously, they risk making semi-permanent the role of coal as an emergency back-up when it’s the dirtiest fuel of them all.
The original error was not with the science of climate change. It was not with the notion that we should phase out coal. But sometime around 2014-16, regulators, lawyers and politicians began to run with the idea that the trashing of “big oil” (and so on) led by students in feathered war bonnets was costless, popular and green.
What followed was a co-ordinated effort to run down fossil fuel production, seemingly without a thought for the vastly different environmental impacts of gas versus coal or the need for Western economies and people to enjoy a reliable supply of energy. In 2015, the then Bank of England governor Mark Carney (yes, him again) gave a speech talking up the risk of climate “stranded assets” – energy investments that would be rendered worthless by climate change legislation.
The EU excluded gas and nuclear from its list of “green” technologies eligible for “sustainable” grants, investment and the like. The UN issued ethical investment guidelines that discouraged putting new money into fossil fuels. Theresa May rammed net zero through Parliament without scrutiny of the cost and slapped the “price cap” on utility firms, which soon after began to go bust by the dozen. Last year, Rishi Sunak added “supporting the net zero transition” to the Bank’s mandate. And the more production we shut down, the more virtuous we felt.
It wasn’t just in Europe. US officials also took up the mantle. States passed net zero laws that, like ours, had no accompanying energy production strategy. Bureaucrats from California to New York began to pressure insurers and oil firms to account for fossil fuel investments or answer in the courts for “climate fraud”. The Keystone XL oil pipeline was blocked. Investors, taken over by righteous and economically illiterate “environmental, social and governance experts”, pressured oil firms to stop investing and banks to stop funding them, and then went on a marketing binge to sell expensive “ethical” investment products.
Industry saw the writing on the wall. Utilities shut down their long-term gas contracting departments and began to buy gas at the going price on the day, fatally undermining security of supply and making new investment un-financeable. Fossil fuel producers began handing money back to investors. Even state-owned producers, like Qatar, cut investment on the basis that Europe (the UK included) had become an unreliable customer. In the first half of this year, even as Russia began to turn the screws, the West’s seven biggest oil firms spent more on dividends and share buybacks than on capital investment. They were only doing as they were told.
And now? Well, now, as “big oil” might say: “We just walked in to find you here with that sad look upon your face.” Europe needs gas. It is pleading for gas. Instead of flying media to gas fields to court capital, the oil and gas men are being flown to the capitals of Europe and begged to invest. Despite the incredible prices, they hesitate.
The meeting goes like this: “We need you!” say the politicians. The producers scratch their heads as they mull $20 billion, 20-year investments, and wonder whether, when the war is over and the green bandwagon rolls back into town, the politicians will still sound so sweet on them. “Your green targets still say we need to shut down by 2030,” they point out. To which Europe says: “Well, of course. Fossil fuels are evil!”
The upshot is that the market is broken and it is governments and do-gooders who broke it. They broke it wantonly, recklessly, touting their saintly intentions, and now we are all reaping the consequences. The only way to resurrect it is with more government intervention.
One scheme sketched out by Lambert Energy Advisory would see the EU and UK collectively co-ordinate utility companies to offer 15-year contracts for enough gas to replace Russian supply, using a dynamic pricing mechanism (that is, we obviously do not lock in 2022 prices for 15 years). The producers who fill the contracts can come from anywhere except hostile states. Do it right and just watch the investment taps – and then the gas taps – turn on at full flow again. And given the lower emissions of gas versus coal, the planet doesn’t even have to suffer.
The alternative is that we continue with a policy of self-sabotage on a truly industrial scale. Politicians can blather about windfall taxes and price freezes all they want. If they don’t repair the market, it is irrelevant. In the meantime, the demolition ball of a self-created gas crisis is swinging through Europe. Will any of our leaders act to stop it?