Putting the boot in - Josh 365

From the GWPF site:

To reduce CO2 emissions, the EU plans to cut emissions rights for the steel industry. According to the industry, this policy threatens its very existence.

Cartoons by Josh

Comments

[dearieme]

Presumably steel would have been crushed anyway, but the Greens have ensured that it is crushed faster and more completely. Well done, boys, well done.

[Athelstan.]

I don't wager unless I know that I'll win.

I would bet a princely sum, that, the German steel industry would be able to seek and gain special Brussels approval to totally ignore these bold new EU emissions rights cuts.

Waddaya think?

[Robin Guenier]

The Guardian claims Green policies are not responsible for the Tata steel crisis - indeed "Port Talbot may actually have been profiting from efforts to reduce carbon emissions".

[Radical Rodent]

There is no way that this government is going to do anything to save this energy-hungry industry. Its departure will mean that blackouts can be put off for a little bit longer (those that have already occurred in remote parts of Scotland can be – and have been – ignored) – hopefully, until the next government. I suspect that those wishes might not come true.

[ivan]

We shouldn't forget the extra green carbon taxes on energy used that also apply to all industry as well as the general public.

The greens are putting the boot in with both feet.

[NCC 1701E]

Deindustrialise the country, import lots of low wage migrants, pick up the corporate assets and, in the oncoming house price crash, property.

Then the payments to the politicians will be made after they leave; no offshore accounts when it's your Common Purpose bodies with their oath of allegiance to the new Herrenvolk.

[M Courtney]

Robin Guenier, That article in the Guardian isn't complete rubbish.
It does show that the UK has more expensive electricity. And it does explain that privatisation is also a major cause of that problem.

It isn't perfect though. My comment was this (I include it here as my comments usually get deleted by the Guardian).

The green activists living in denial made exactly the same arguments when the aluminium smelting industry closed.
They were wrong then too.

The issue that they have missed - as Tata points out - is that it's not the total cost that cause the closures. It's the relative costs compared with other countries.
If China has caused a glut of steel (and it has) the most expensive plants shutdown. That 1% extra cost in the UK means it's our industry that's destroyed, not Germany's.

Also, the ETS is not a UK scheme. It affects all the plants in Europe and, as such, is irrelevant to the question of why the UK industry is declining.

So, having made this error twice, which industry will the Greens kill next?
My bet is on car making.

[TinyCO2]

To be fair, it's not just the carbon taxes that are killing British industry. It's this current trend to try and service both socialism and capitalism at once. You can either be cheap or ethical (minimum wage, health care, saving the environment). Loads of people claim to buy ethical but grab cheap when nobody is looking. The same applies to countries. If you offer something cheap enough, worries about slave labour, human rights and genuine pollution go out the window. While we can afford some socialism, we can't deviate too much from the balance of quality vs price without losing business and businesses. Who wants bog standard steel at sky high prices? Our split personality leaders love the idea of free capitalism (not least because it's better than socialism) but also want to promise the social earth to voters. They try and bridge the gap with borrowing and selling assets.

Now I don't hold with the idea we absolutely need a steel industry, any more than we needed a coal industry but you need somewhere for people to work that doesn't take a genius. We can't all be computer wiz kids, banking execs or even vlog stars. The biggest mistake Maggie made was not wondering what the miners were going to do after the pits shut. How much money have we frittered over the years on consultants to work out why ex labourers haven't retrained as brain surgeons?

There's also the issue that we could end up starved of steel. At the moment there is plenty but it wasn't long ago people were stealing British drain covers to fulfil China's demand for metal. Things will come around.

At the moment we want it all. Eventually the credit card bill will come with FINAL DEMAND across it and our CO2 emission statement won't be accepted instead of cash.

[michael hart]

Whether The Guardian is correct or not about the carbon tax not being the last straw, they are part of the causative problem. They are generally part of the bien pensant set that hates industry, and thinks we're better off without it. Part of the set that thinks we can all get rich just by buying and selling houses in the London Property market that is pumped up with hot off-shore money from havens like, umm, Panama. Ohh.... that's a second hypocrisy strike against The Guardian when it comes to off-shoring money.

[It doesn't add up...]

M Courtney:

Privatisation is not responsible for our current high electricity prices: a truly private industry would have invested in a risk adjusted lowest cost generation and grid, and not in uncompetitive renewables. It is regulation, taxation and government diktat that has given us our present high cost supply, and also has raised the levels of uncertainty to the point where we now have a forecast supply deficit for next winter because so much plant has been shut down under regulation and taxation - including the Carbon Floor Price that is weighing on the future of steel in the UK.

The history of electricity post privatisation was of falling prices until Labour started interfering with the market, starting with the Utilities Act that gave rise to OFGEM, the big merger boom of 2002 that created the Big 6 oligopoly, and brought an end to investment in new plant.

[stewgreen]

The forever lossmaking, job-shedding, new-venture-failing Guardian is not the best place to look for business advice.

but @Robin don't be sorry for Tata : Their game from the beginning was to capitalise on the emissions trading certificates ..and they have walked away with the profit that they made from that in the early years.*

- And on anti-dumping measures the BBC reported that the EU wanted to introduce them, but a couple of months back.

@Athelstan. It's already true that the German gov had got EU permission to partially exempt its steel industry from Carbon Taxes 2 years before the UK gov got off its backside.

BBC reported that it's convenient for Tata to have UK steel plants close leaving its Dutch operation to benefit from less competition. I wonder if in the last few years they saw the light and invested in upgrades there whilst ignoring the UK.
Bottom line is that if UK plant closes the same steel will be made else where in places with laxer laws producing higher pollution and more CO2.

At the mo 2nd world workers are fairly crap, but they work for less than a quarter of UK salaries. A wise investor could probably get them to work competently at less than half of UK salaries, but it's still a risk cos of corruption/mad gov policy etc.

[Alan Kendall]

Commonly Josh's cartoons are much anticipated and create a smile (sometimes a laugh). The cartoons are closely inspected, someone here spots something to add to the amusement and we're off. Josh's latest is completely different - its subject matter is deadly serious with no opportunity for hilarity, and the manner in which it has been drawn is similarly oppressive.

The only thought I had was that the cartoon might be prescient IF the worker were Chinese and the steel bar had pictographs rather than Roman lettering. And that would offer no humour either because it would mean that.the Green malaise would have spread worldwide.

All in all very depressing.

[stewgreen]

oops my typo above "- And on anti-dumping measures the BBC reported that the EU wanted to introduce them, but a couple of months back. the UK gov vetoed the plan"

[golf charlie]

This is capitalism, Green style.

Make it more expensive to produce steel, everywhere but countries that ignore the Greens. Steel industries under Green Blob mob rule, are driven to closure, those that cling on to life, are wiped out by the market being flooded by cheap steel made by entreprenneurs, mainly in China. China acquires a monopoly on world steel production because nobody else can compete, and what then happens to the price?

What I am not so sure about, can somebody advise please, is what happens to scrap iron now? If scrap iron (and other metals?) currently gets thrown into UK steelworks for recycling, will we now end up with piles of unwanted scrap iron, because it is not economic to ship it to China?

[Radical Rodent]

GC: who knows? Perhaps, once their securing of the monopoly on steel is complete, the Chinese may find it very economic to fly all scrap metal to China, first class. Once you have sold your birth-right, it is no good complaining about the mess of potage.

[kim]

Tax it to oppressive burden, THEN put a fence around it. Like 'Murica jes did.
===================

[Mike Jackson]

It doesn't add up
I'll go part way with your assessment of the energy problem but on balance I'm going to stick with my own pet theory, that 1 you cannot have a successful hybrid energy capability and, 2 there are some things that are better done by single entities.
The mania for privatisation combined with strict regulation just might have worked in the climate of the eighties but the tension between manufacturing, distribution and retail was always going to create problems long term.
Imagine a large superstore in the middle of Birmingham (nothing personal, Birmingham!). It is the only place in Birmingham that sells groceries. Inside Tesco, Sainsbury, Waitrose and Morrison are all competing to sell you an identical range of products which they have manufactured and sold to the owner of the superstore who is also charging them for the privilege of having their product in his store. All the retailers can do is tweak the retail price a bit or offer deals if you promise not buy anybody else's product.
As if that wasn't bad enough about 20 years after this inane system was invented, a bunch of fly-by-night chancers was encouraged to manufacture the same products by a different process which cannot guarantee supply and is so expensive that they need to be paid by the customer to produce it. Not only that, the store owner is obliged to accept that expensive and unreliable product (on those occasions when it is available) and force the retailers to sell it in preference to their own product which is more reliable and cheaper.

If you want cheap and reliable energy you need one organisation responsible for the infrastructure — why not call it the Central Electricity Generating Board (just a name)? — which commissions electricity from where it sees fit and ensures continuity of supply to the end-user. Better still if it owns the generating capacity and the distribution network
Who is responsible for maintenance of equipment, billing, customer care, etc. is irrelevant (as long as it's agreed and done and done properly).
It isn't rocket science!

[stewgreen]

Also relevant is Booker's post 2 days ago "We're following Germany to an energy disaster Christopher Booker"
quoting A-ma Dudd the Climate Change Secretary,

said that “Brexit” would raise our energy bills by £500 million a year.

But in making that “half a billion a year” claim, Ms Rudd must hope that we don’t recall those recent figures from the Office for Budget Responsibility projecting that within four years – due entirely to her own Government’s policies – we will be paying £13.6 billion a year in climate change levies alone,
.............
A long article in Handelsblatt, Germany’s leading business journal, paints a devastating picture of the chaos now resulting from its pursuit of a “green” energy policy remarkably similar to our own
........
last year Germany’s “carbon emissions”, due to increased demand for heating and the burning of cheap “dirty” coal to keep costs down, actually rose.

PS That page features a Bloomberg video ..Is the Telegraph getting taken over ?

[thinkingscientist]

I followed the link from Robin Guenier to the Guardian article:

”There is no doubt that the Port Talbot steelworks is a big energy user. According to reports, it uses as much electricity as nearby Swansea and each year the power bill runs to £60m. But in Simon Evans’ excellent Carbon Brief article, he finds electricity to be between 6 and 8% of the plant’s total production costs. Of this, perhaps 2-3% is due to green policy costs.”

Now reading that, the last sentence was ambiguous, were they implying green policy was 2-3% of electricity costs, or 2-3% of total production costs?

So I followed the link through to the Carbon Brief article (my bold):

”The share of electricity in steel production costs is around 6%, according to one estimate for blast-furnace steel production, used at most major steelworks. The Committee on Climate Change (CCC) says energy makes up 5.2% of costs for “basic metals”, which includes steel. The CCC says it is around 6% for integrated steelworks like Port Talbot.

“EEF’s Warren confirms this. He tells Carbon Brief that electricity accounts for around 6-8% of UK steel production costs. Of the UK electricity cost for heavy industry, he says that about a third — £31.50 per megawatt hour (MWh) — is due to policy costs during the 2016/17 financial year”.

”So, perhaps 2-3% of UK steel production costs might be down to government policy."

(There are further statements in both articles about claims that reduce the actual cost to the steel manufacturer, apparently, but I am more interested in the actual cost of electricity. The kickbacks simply mean that somebody else, ie the rest of us, are paying for the climate polices through general taxation).

Now one third is the rule of thumb I always recall as being the climate policy cost and this clearly confirms it, although the range of figures suggested by the Guardian implies it could be as low as 25 or as high as 50%.

I also note from the Guardian article that according to their graph, UK electricity costs are 80% higher than the average of the other European countries (UK = 9.55; average = 5.32) and they are 27% higher than the next highest two (Germany & Italy).

If your company is making a profit of 1% and you artificially increase total costs to make that a loss of 2%, your industry is not sustainable anymore. And don't forget that much of the other costs associated with the plant will also be affected: wages, fuel for transportation, costs of maintenance etc.

[tomo]

Paul Homewood has a good post up on "Euro" leccy prices for big users (i.e. steel arc furnaces etc.)

I heard that the perennially feather bedded French farmers get a special deal on rural electrons - there's a few ex-pats who are on here - and maybe it's already been covered - some repetition wouldn't do any harm :-) ??

[stewgreen]

But the Economist commenter BUTTONWOOD shows dumbness
Remarkably, many of the leading campaigners for Brexit are sceptics about climate change

"..factor is surely a knee-jerk reaction to what sceptics see as the "liberal" consensus on climate change.."
\\This belief that they are "fearless speakers of truth" gives these campaigners a sense of grievance ..//

In short, it is hard to believe there could be any evidence capable of convincing these campaigners they were wrong. Were London to be basking in 90-degree temperatures in February, while rising sea-levels submerged Florida, they would still deny climate change.

The article originally said Douglas Carswell is a UKIP MEP ...doh

[Mike Singleton]

Anyone else hear the stupidity last week?

Listening to the BBC news channel on my car satellite radio, (need to test my sanity every now and then), they reported that the EU intends to ban the use of CO2 in Champagne and beers, especially German Lagers!!!!!

I didn't catch all the details I was too incredulous.

[TinyCO2]

golf charlie, the company that's thinking of buying Tata UK is going to scrap the current furnaces and build electric smelters to recycle used metal.

[Mike Post]

Mike Singleton

Do you think perhaps it might have been 1 April?

[It doesn't add up...]

Mike Jackson:

I'll grant that the CEGB did more or less ensure the light stayed on (miners' strikes aside), but it was not very efficient, as lower costs after privatisation demonstrated. Of course, the grid infrastructure needs a common ownership (competing grids make little sense - they would in any case make agreements to use each other's assets, as happens e.g. in oil distribution where different companies arrange local offtake exchange agreements to take advantage of whatever local refinery there may be - just because Fawley is owned by Esso doesn't mean you don't get Texaco or Sainsbury's outlets in Southampton which are actually supplied with Fawley's output). The grid has always been one body throughout, even when it was owned in partnership by the RECs.

Green regulation has destroyed sensible grid and generation investment by subsidising connections for remote unreliables and the beefing up of the grid required when you close down major power stations close to the main centres of demand.

[tomo]

Mike Singleton

Helium ? that'd fit the bill and as a bonus - it's running out! - oh noes!

I heard some years back what I assumed was a myth - that Guiness use a special gas cocktail to deliver the black stuff consistently.

[geronimo]

2-3% of production costs is a lot for companies who operate on net margins of 1-2%, as do most big steel makers.

[RockySpears]

I don't remember such a fuss over losing our Aluminium smelters. Rio Tinto at Blyth, Alcan on Anglesey? I live just a few miles from Redcar, so please do not think that I have no understanding of what it is to lose your job, mine went in 2008 after the financial crash.
Defenders of Port Talbot talk about how we NEED steel making: Why? We import the Ore and we import the Coal, why not import the Steel? We do not smelt Copper, we import it, in fact I wonder if there is a single metal we DO NOT import.

Jobs, tradition, families and communities aside, does it really matter? It is gone, move on.

I know energy has a big role to play in the UK not "making" things anymore, that is why Blyth and Anglesey suffered so. What I do not get is people saying we MUST protect THIS industry because we might find a time when we need to make our own steel. What about all the other things we do not make? Why pick out steel as Special.

I am not being defeatist here, only trying to understand: Why now? Why Steel?

RS

[stewgreen]

Any citation for that @TinyCO2
"the company that's thinking of buying Tata UK is going to scrap the current furnaces and build electric smelters to recycle used metal."

A large proportion of the input into any steel furnace is scrap metal
You could possibly get a higher proprotion with an electric arc furnace, but where is all this extra scrap going to come from
Half of a conventional steelworks is the iron making plant and pre-process, like turning coal to coke to mix with iron ore to make sinter before it all goes in the furnace.
..and switching over to new furnaces would take a year

[TinyCO2]

Here you go stewgreen
http://www.bbc.co.uk/news/uk-wales-35962358

[stewgreen]

@Rocky A steelplant employs a town
- An Aluminum plant employs a village ...hence the difference in fuss

Both of those Aluminum plants employed 500 (You got the owneers the wrong way around)
Both Port Talbot and Scunthorpe actually employ 20 times more than that.

Why the difference ...in import cos Aluminium is easy to shape so second processes can take place in the UK
With steel it's best to shape it while it's still hot instead of importing cold product.

[The Dork of Cork]

@Rocky
You may have to modify that statement shortly.

"To why? We import wood chips and stuff."

I am indeed totally against unneeded production for its own sake but the policy here is much deeper then that....see industrial sabotage.

Looking at Uk sub regional data is interesting....
In particular change in elec.consumption over time
Years 2005 (peak) to 2014.

London: -.01%
North east: - 17%

Hint.
The policy is one of financial and wealth concentration rather then looking for a rational production / consumption dynamic.

[stewgreen]

Cheers @TinyCO2 I bet the BBC wishful thinker made this bit up

Mr Gupta would want to change that and instead make what he called "green steel" - in other words make steel by melting and recycling scrap steel using an electric arc

Port Talbot is right next to the sea and that is the whole point : The iron and the coal both come in.
Overseas you build on a iron mine, but still have to bring in the coal, energy and the workforce.

PS Where the heck is the electricity for the furnace gonna come from ..you can't power something that big from wind/solar ?

[The Dork of Cork]

Again if we look at just domestic sub regional consumption.
The North east has the lowest mean and median elec consumption.
Is not the North east coldest? , that springtime North Sea wind and all.
The super cold south east has of course the largest mean and median consumption.

Me thinks we are seeing poverty.

[stewgreen]

@TinyCO2 It's a Bit strange Rotherham has the electric arc furnaces but rolls specialist steels

Talbot rolls much bigger quantities, but doesn't have electric arcs

[stewgreen]

In Australia another steelplant 500Km west of Adelaide is on the edge
@Rocky that's 3,000 workers and built on the iron mine

but we have our renewables revolution ...but no A £300m “energy from waste” project in Teesside that was intended as the biggest of its kind in the world, has been dropped by the company building it

[Rahul Rana]

Tax it to oppressive burden, THEN put a fence around it. Like 'Murica jes did.

[NCC 1701E]

Here are comparative electricity costs for EU steelmakers: https://notalotofpeopleknowthat.files.wordpress.com/2016/04/image12.png

The UK is by far the highest and to claim it will ever be 'Green Electricity' is a pipe dream by Marxist no-nothings who infest Government and whose intention is to deindustrialise.** I worked in steel and aluminium. We must retain blast furnaces and steel converters, otherwise we are at the mercy of pig iron and steel scrap prices, exactly the same problem as aluminium ingots vs scrap processing.

**California has imposed high power costs and now a high minimum wage. 5 million people have left mainly for Texas. They are now culling the service industries. it seems they want to turn Ca back into Mexico and Osborne and Cameron want to turn us into another Islamic failed state.

[TinyCO2]

Stewgreen, there are probably subsidies involved. Subsidies for providing jobs in certain areas, subsidies for recycling, subsidies for shutting off when the grid demands.... There's probably even a subsidy for gift wrapping every 1Kg and sending to a developing country.

[Alan the Brit]

If one imports too much of what can be produced at home, one loses a measure of quality control, despite the so called CE marks stamped all over the place. Just ask the women with breast implants & those people who eat regular pre-packaged meals, we know just how good a quality control the EU Commissioners indulges in!

[stewgreen]

Jesus, This could end up a mess of we'll save the steelplant today, if you sign the ridiculous subsidy contract for 100 years for the Swansea Lagoon

on this page it says "The deal sees Gupta interests take a substantial stake in Tidal Lagoon Plc"

[The Dork of Cork]

The UK is a one trick pony.
It specialises in concentrating rentier flows.

Lets look at mean and median domestic electricity consumption.
Year 2014.
North east: 3,418 kwh
: 2,901 kwh

South east: 4,294 kwh
3,418 kwh

How could such a dramatic difference in consumption patterns be the result of the weather.?

How much colder are the home counties vs semi tropical Newcastle?

[wert]

@rocky

Steel can be imported and you can bet the Chinese will love your decision to move steel industry there.

It won't help the climate, quite the contrary, but it will make you poor as well.

[golf charlie]

Radical Rodent, TinyCO2 & stewgreen,

So at the moment, the UK has no means of using scrap metal?

Will it just pile up somewhere, as we will all have to pay for the privilege to have scrap iron taken away, and with no means of doing anything useful with it, it will be allowed to rust in peace, after the Green recyclers pocket the money, and fly away to their new home in the sun?

I don't think scrap iron mysteriously catches fire and burns for months on end, in the same way other Green Blob recycling schemes go up in smoke, after the Green Blob Greed works out that there is more profit in not recycling.

[Jan Stunnenberg]

'I heard some years back what I assumed was a myth - that Guiness use a special gas cocktail to deliver the black stuff consistently.
Apr 6, 2016 at 3:39 PM | tomo

No myth, however it was not a gas it was fish bladder. pun int. https://www.youtube.com/watch?v=HQlQA67HQhk

[TinyCO2]

The Dork of Cork, the average home in the South East is bigger and wealthier than those in the North East. By and large heating is by gas in both areas so electricity is likely to be TVs etc, maybe even the odd electric car. Electric heating might still remain in flats.

Golf Charlie,there are other places to recycle metal, including abroad. A lot of stolen cars vanish that way as 'scrap'.

[Breath of Fresh Air]

I was advising someone who wanted to start to buy steel recently, he wanted Galvanised and 2 months ago it was chip* as chips, fast forward and the Chinese are no longer exporting Galvanised. Price has rocketed, I got a high offer for him yesterday, if he does not confirm by tomorrow the price goes up the day after.

Steel is a global commodity, as a Steel buyer I offered long term prices subject to a formula all the time and was never taken up. They prefer to try and create shortages and make money, trouble is China has over invested and has too much capacity, too many unpaid loans for redundant assets so they keep churning out. Same happened with solar panels.

*[cheap? TM}

[NCC 1701E]

There are many electric arc remelting furnaces in the UK, but they are for small quantities, 30 tons perhaps, compared with a Blast furnace making iron, then a bottom blown Oxygen conversion to steel, typically 150 tonnes or more each 'blow'.

The end of the blast furnaces would mean the end of mass steelmaking. Gupta wants to offer the carrot of tidal lagoons to the Welsh to con. them into a reduction o0f Port Talbot to perhaps 20% of ts present size and workforce. A con artist of the first degree, but the Welsh are so easy to fool because they believe that the likes of Stephen Pinnock are old fashioned socialists instead of the new voracious State capitalists out to shaft the population (a persona view!)

[The Dork of Cork]

Tiny co2
I am well aware of the Get Carter landscape..
I was trying to be ironic.
The UK is the worlds expert on the privatisation of the commons given its historical pedigree.
May I suggest this physical electricity data is a manifestation of internal income flows between London / home counties and the rest of the "union"

[The Dork of Cork]

From London's perspective fresh fruit coming in from sunny Spain is a more important then steel making "Up North "
One diabolical union has been replaced with another larger scale experiment.
It's happened right under most people's noses.