Posts Tagged ‘job losses’

The economic mess and structural problems in EU and USA – Part 2

23 januari, 2013

This is the second part about USA. Again, It ain’t pretty to say the least!

Where the same absurd Alice in Wonderland economic and political farce is playing out in the USA. And as in Europe it is, as usual, the common people who are paying the price.

And as in Europe, the US crisis is anything but over regardless of what the political elites are trying to tell the people in USA. In USA the role of ECB is played by the FED (the Federal Reserve), which creates money out of “thin air” to support the gigantic and increasing debt. And to keep the stock market going and lower the price of the dollar.

So that the federal US government can spend your tax money like a drunken sailor.

(See my posts:                                      

The US election – Yes we have NO bananas

How Obama loves the poor SOOO MUCH, especially the black, that they have had the largest single drop in income ever

In three graphs – Obama Economics)

All graphs get bigger when you click on them

USA_jobs2

                                                 USA

In USA, Goldman Sachs and the other investment banks, plus the big Hedge Funds, are pushing leverage to ridiculous and dangerous extremes.

If you read the Comptroller of the Currency, Administrator of National Banks, report for the second quarter 2012 “Quarterly Report on Bank Trading and Derivatives Activities”, you get utterly horrified of the totals of the open derivatives positions in the US market.

Four of the largest U.S. banks are walking an extreme tightrope of risk, leverage and debt when it comes to derivatives.  Below you are going to find just how utterly exposed they are.

But first what is leverage?

Most people do not understand “leverage” and what it actually means. If they did, they would not sleep at night knowing what’s going on right now.

To put it simple: leverage means that these banks etc use a leverage of say 1:50 or 1:100 in their speculations. Which means that they only put up 1 of their own dollars for an investment worth 50 or 100 dollar. Their dollars are “worth” 50 or 100 times more than they actually are.

It ALSO means that IF “things” goes wrong way they LOSE 50 or 100 dollars for every dollar they invested in that trade or position. Or much, much more.

And usually when things goes wrong, it goes very fast when it comes to trading with these kind of leverages. So very quickly, these sums get astronomical. In a couple of days they can literally lose ALL their capital and more.

Nov deficit

 This has happened time and time again. Just to mention a few:

–         Lehman Brothers (was the 4th largest inv. bank in the US).

–          Bear Stearns

–          American International Group

–          Northern Rock (a medium-sized British bank)

–          Washington Mutual

–          American Savings and Loan

–          Landsbanki and Glitnir

–          Barings Bank

–          Société Générale

–          JP Morgan Chase & Co

–          Morgan Stanley

–          Long-Term Capital Management L.P. (LTCM)

As I said before, this is JUST A VERY SHORT LIST

Avalanche

This would not per se be a problem if this were a truly free and capitalist market. Because then these banks would go bankrupt and the owners and investors would lose their money. As they are supposed to do if the do bad business or trades.

But as we all know, this is NOT a free and capitalist market.  Our “dear” politicians have “decided” that these banks with all their wild speculations are too important or to big, to be allowed to fail.

 So instead, they have used taxpayer’s money and put whole countries at risk and in extreme debt just to bail out these banks.

And the banks knows that whatever speculations they do, REGARDLESS of how much or bad they speculate, and as you can see below their speculations are horrific, the politicians are going to bail them out with our tax money.

JP Morgan Chase

Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)

Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)

 Citibank

Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)

Bank Of America

Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)

Goldman Sachs

Total Assets: $114,693,000,000 (a bit more than 114 billion dollars)

Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)

To sum up – TOTAL EXPOSURE TO DERIVATES for ONLY these four banks:

 207, 375, 086, 000, 000 TRILLION DOLLARS!!!!!!!!!!!

TOTAL ASSETS for these four banks:  4,720,464,000,000 TRILLION DOLLARS

So they can “cover” 2,27 % of the Total Exposure with ALL their Assets!

So who is going to pay for the “rest”:  202, 654, 622, 000, 000  TRILLION DOLLARS!!!!!!!!!!! if anything goes wrong?

EmployRecNov2012

Well, we know the answer to that doesn’t we. So far, it’s the common people, i.e. the taxpayers, who had to cover for all the banks bad speculations thanks to our dear politicians.

Take another look at those figures for Goldman Sachs.  If you do the math, Goldman Sachs has total exposure to derivatives contracts that is more than 364 times greater than their total assets!

That is utter insanity, but everyone just keeps pretending that the emperor actually has clothes on.

And why are “our” politicians SO EAGER to protect these speculators?

To put these GIGANTIC sums into perspective lets compare with the GDP from USA and all of EU from 2011

There a lot of different way to calculate GDP and the figures for each year. Add to that exchange fluctuations, conversion rates etc. So the figures below comes from the same source (IMF) to make the comparison easier.  And it is their conversion.

GDP USA 2011 – 15,094,025 billion US dollars

GDP EU 2011 –  17,610,826 billion US dollars

Total GDP for EU and USA 2011: 32,704,851 billion US dollars.

Lets compare these 32,704,851 billion US dollars with TOTAL EXPOSURE TO DERIVATES for  these four above mentioned banks:

207, 375, 086, 000, 000 TRILLION DOLLARS!!!!!!!!!!!

VS

32,704,851 billion US dollars in COMBINED GDP of EU and USA

Anyone see any problem???

Problem solved all right. So just move on, nothing to notice here or worry about.

Because according to out “dear” politicians, bankers and political elites from EU and USA there is NO SERIOUS PROBLEM HERE. The problems in USA and EU are more or less solved etc.

So the ones that put as in the mess in the first place, very “reassuringly” tells us: “We take care of it”.

Yeah sure!

mrzSpendaholic2

Let’s move on to another “bright spot” –the federal budget and debt. The figures are based on the 2012/2013 data:

2012 US Tax Revenue: $2,469,000,000,000

2012 Federal budget: $3,796,000,000,000

2012 Budget deficit: $1,327,000,000,000

US Federal Debt as of January 22, 2013: $16,471,084,067,491

Total interest paid on the debt in 2012: $359,796,008,919

Budget INCREASE between 2012 and 2013: $38,500,000,000

mrzWhat is the

To make these gigantic sums understandable here is how these figures would look like for a “normal” family:

Annual family income: $24,690

Annual family expenses: $37,960.  154% of the annual family income.

Annual family shortfall borrowed from friends/neighbors etc: $13,270.  54% of the annual family income.

Total interest the family paid last year: $3,598 (at near 0% interest).  Nearly 15% of the annual family income

Total family debt (mortgage, auto, credit card): $164,471.This is   666% of the annual family income.

Change in family spending this year: an increase of $385

This looks like a very responsible family wouldn’t you say?

And do you think this family would get any loans from the banks?

When you look at it this way, it really seems absurd. Yet it’s true… a slow motion train wreck. That any person with more than one functioning brain cell can see coming miles away.  Except our “dear” politicians. They are in ACTUAL FACT increasing the spending AND the debt.

Foodstamps%20Oct

Here’s another way to look at the debt ceiling I found in a paper. It’s very symptomatic:

Let’s say you come home from work and find there has been a sewer backup in your neighborhood… and your home has sewage all the way up to your ceilings.

What do you think you should do?

Raise the ceilings, or remove the crap?

Well, or “dear” politicians are franticly at an increasing speed trying to raise the ceiling at the same time as the “sewage” is increasing EVEN MORE.

Yeap, there you have politicians in a nutshell.

Why fix the problem that they themselves caused, when the politicians can pretend that they are the giver of all gods and bearer of all gifts to all the people all the time.

And it doesn’t cost anything for anybody. It’s ALL free forever. And they all lived happily ever after.

Sounds like a wonderful fairytale doesn’t it?

On that “cheerful” note, I stop here.

mrzOur children

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The US election – Yes we have NO bananas

8 november, 2012

I could talk at length of the different aspects of this election and the result. But I will not. That would require a long essay. And that is for another time. So it’s just going to be a quick comment (well sort of), and follow up to my post The betrayal of journalism and the first amendment by the mainstream media in USA

It is a very sad day indeed to see a people voluntarily decide to throw themselves and their country over the cliff.

Let’s look at the economy (the figures are from the Congressional Budget Office):

In the Fiscal Year 2011, the federal government collected $2.303 trillion in tax revenue. Interest on the debt that year totaled $454.4 billion, and mandatory spending totaled $2,025 billion. In sum, mandatory spending plus debt interest totaled $2.479 trillion –. exceeding total revenue by $176.4 billion.

(Mandatory spending includes entitlements like Medicare, Social Security etc. which are REQUIRED by law to be paid. Congress in practical terms do not see this money, it is automatically deducted.)

For the Fiscal Year 2012, which just ended 37 days ago, that deficit increased 43% to $251.8 billion.

In other words, they could cut the entire Federal Government’s discretionary budget – No military, SEC, FBI, EPA, DHS, IRS, etc.- and they would still be in deficit by a quarter of a trillion dollars.

(Discretionary spending includes nearly everything we think of related to government- the US military, the Department of  Homeland Security, IRS, EPA etc.)

The only thing showing any growth in the US, besides the debilitating regulatory burdens, is the national debt. It took over 200 years for the US government to accumulate its first trillion dollars in debt. It took just 286 days to accumulate the most recent trillion (to $16 trillion).

Last month alone, the first month of Fiscal Year 2013, the US government accumulated nearly $200 billion in new debt in just 31 days.

And the numbers will only continue to get worse. 10,000 people each day begin receiving mandatory entitlements. Fewer people remain behind to pay into the system. The debt keeps rising, and interest payments will continue to rise even more. In addition, the dollar is going to decline.

The result, the US government is legally bound to spend more money on mandatory entitlements and interest than it can raise in tax revenue. It will not make any difference how high the federal, state or local government raise taxes, or even if they cut everything.

Another effect of Obama economics is that the poor are getting poorer, especially the black.  Under Obama the poorest Americans has suffered the single largest drop in income ever.

And the Black Americans in the same lowest income quintile have suffered almost double as the average American in the same quintile under Obama:

The drop is – 11.58% in one year (2010) and is at the lowest level ever.

That’s what I call “change”! But I would not call it “hope”.

And the number of people classified as poor are getting larger and larger.

See also my posts

How Obama loves the poor SOOO MUCH, especially the black, that they have had the largest single drop in income ever

In three graphs – Obama Economics

America, You are at a tipping point and you have your last change to stop it – Part 10

America, You are at a tipping point and you have your last change to stop it – Part 9

America, You are at a tipping point and you have your last change to stop it – Part 8

America, You are at a tipping point and you have your last change to stop it – Part 7

America, You are at a tipping point and you have your last change to stop it – Part 6

America, You are at a tipping point and you have your last change to stop it – Part 5

America, You are at a tipping point and you have your last change to stop it – Part 4

America, You are at a tipping point and you have your last change to stop it – Part 3

America, You are at a tipping point and you have your last change to stop it – Part 2

America, You are at a tipping point and you have your last change to stop it – Part 1

Why, Mr President, are you deliberately destroying the American way and committing economic harakiri?

And then of course we have the very disastrous Obama Care.  I wrote 34 posts about it. You can read them here:

Obama Care 34 – Which system do YOU thinks works best?

Obama Care 33 – President Obama is a willful and certified liar

Obama Care 32

Obama Care 31

Obama Care 30

Obama Care 29

Obama Care 28

Obama Care 27

Etc…

Obama Care

Then on top of that, we have the equally disastrous foreign policy. Where the Obama administration systematically have thrown their former allies (Eastern Europe, Britain, Israel, Egypt, Saudi Arabia  etc) under the bus, and helped parties like the Muslim Brotherhood that hate everything that USA and the western world stands for, to power.

See my 19 posts on Syria etc as some examples of that disastrous foreign policy:

How the Assad regime with the help of Russia, Iran, China and Hezbollah transformed peaceful protester to fighters

Here is links to all my posts

Russia’s solution for Syria – More Carpet bombing and Total Destruction

I could go on with many more examples but I think I will stop here.

But as the old saying goes (Joseph de Maistre in a letter from St Petersburg August 1811): a country has the politicians/government that they deserve.  So enjoy!

In addition,  this quote from a reader’s commentary in The Prager Zeitung in March 2010 (translated from Czech) sums it up quite well really:

Multitude of Fools

The danger to America is not Barack Obama but a citizenry capable of entrusting a man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president.

The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America. Blaming the prince of the fools should not blind anyone to the vast confederacy of  fools that made him their prince. The Republic can survive a Barack Obama, who is, after all, merely a fool.

It is less likely to survive a multitude of fools such as those who made him their president.“

P.S. If you are wondering about the title, see this video with music by Spike Jones. There is another long story behind the lyrics but that you have to find out yourself. D.S.

Spike Jone – yes we have no bananas

http://www.youtube.com/watch?v=jT6JkceQ9FU

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How Obama loves the poor SOOO MUCH, especially the black, that they have had the largest single drop in income ever

15 september, 2011

The Census Bureau has just published it latest Income and poverty data for U.S.(2010). The data goes back to 1967.

The report here:

Income, Poverty, and Health Insurance Coverage in the United States: 2010

http://www.census.gov/prod/2011pubs/p60-239.pdf

                         Another hole in one!

It is really a terrifying reading – Under Obama the poorest Americans has suffered the single largest drop in income ever.

Take a look at this chart (done by Justin Hart, http://ihartpolitics.com/?p=308) –

It shows the % change in the lowest quintile median incomes, the poorest Americans, from 1968 (in 2010 dollars)

And the drop is – 6.04% in one year (2010)

And then let’s have a lock at Black Americans in the same lowest income quintile.

They have suffered almost double as the average American in the same quintile under Obama:

The drop is – 11.58% in one year (2010) and is at the lowest level ever.

That’s what I call “change”! But I wouldn’t call it “hope”.

Some other highlights in the name of hope and change:

– Median household money income for the nation was $49,400 in 2010, a decline of 2.3 percent from 2009, in real terms.

– The 2010 official poverty rate for the nation was 15.1 percent, up from 14.3 percent in 2009, with 46.2 million people in poverty, an increase of 2.6 million since 2009. The highest percentage since 1993 (15.1%) and 1982 (15.2%), and the largest number in the 52 years for which poverty estimates have been published.

The 2010 official poverty rate for blacks was 27.4 percent, up from 25.8 percent in 2009, with 10.7 million people in poverty, an increase of 731 000 since 2009. The highest percentage since 1996 (28.4%), and the largest number in 17 years.

– The decline of Real Median Household Income among the15 to 24 years was – 9.3%.

                               Are you extremists?

Obama had three pillars that swept him to power – huge turnout among young (under 30), Hispanics and Blacks. Now the young and Hispanics are gone, down to 43-44% as the rest of the population. So he is toast.

But the blacks are still overwhelmingly behind Obama (around 81%).

The obvious question is why? Since under Obamas “eminent leadership” they have had the biggest drop in income and living standard ever. Not to mention skyrocketing unemployment.

With so much “hope” and “change”, I guess that’s why he is so “popular”.

____________________________________________

A quick update on September 27 to my post:

I wrote:

“Obama had three pillars that swept him to power – huge turnout among young (under 30), Hispanics and Blacks. Now the young and Hispanics are gone, down to 43-44% as the rest of the population. So he is toast.

But the blacks are still overwhelmingly behind Obama (around 81%).

The obvious question is why? Since under Obamas “eminent leadership” they have had the biggest drop in income and living standard ever. Not to mention skyrocketing unemployment.

With so much “hope” and “change”, I guess that’s why he is so “popular”.

Well, it seems that the blacks have started catching on because now Obama is losing the blacks too in a BIG Way

According to a Washington Post/ABC News survey, his favorability rating among blacks has dropped off a cliff, plunging from 83 percent five months ago to a mere 58 percent today a drop of 25 points!

In the election of 2008, he was able to increase black’s participation from 11 percent of the total vote in 2004 to 14 percent. And he carried 98 percent of them.

Way to go Obama!

                Click on the graphs for a larger image

                        Jobb aproval economy

                              State of the country

Some more revealing graphs of Obama economics

This graph shows the job losses from the start of the employment recession, in percentage terms – this time from the start of the recession. This is by far the worst post WWII employment recession.

This graph shows the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers). A very high level.

This graph shows the number of workers unemployed for 27 weeks or more. The level is extremely high.

 

                                          It was Bush’s fault!              

            

See also some of my previous posts:

Hey Obama – You don’t pay your bills so why should I?

In three graphs – Obama Economics

Why, Mr President, are you deliberately destroying the American way and committing economic harakiri?

America, You are at a tipping point and you have your last change to stop it – Part 1

America, You are at a tipping point and you have your last change to stop it – Part 5

America, You are at a tipping point and you have your last change to stop it – Part 6

America, You are at a tipping point and you have your last change to stop it – Part 8

America, You are at a tipping point and you have your last change to stop it – Part 9

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In three graphs – Obama Economics

4 december, 2010

This graph shows the job losses from the start of the employment recession, in percentage terms – this time from the start of the recession. This is by far the worst post WWII employment recession.

 

This graph shows the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers). A very high level.

 

This graph shows the number of workers unemployed for 27 weeks or more. The level is extremely high.

 

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The reality of wind power – Extremely high cost and unreliably

21 mars, 2009

More on the very high cots, high subsidy ant the unreliability of wind power. In this case from Spain where the government have subsidized wind power with OVER 90 % over the market price!

And solar power has been subsidized with OVER 575 % over the market price!

Isn’t it fantastic! Subsides of over 90% and 575% over market price!

I mean with subsides of over 90% and 575% I can turn any lousy money losing business into profit for my self but at a HUGE cost to society and the taxpayers.

And Shell is getting out of wind and solar power business for the same reasons.

Spain has increased its emissions by 40% since signing the Kyoto protocol. And yet, in contrast to the government estimate in 2004 that emissions permits would cost Spanish companies no more than 85 million euros annually, the real cost is now estimated at between 3 billion (government statement) and 15 billion euros (Price Waterhouse Coopers).”

”For the first 15 years, a subsidy of 90% over the market price has been payable, reducing to 80% thereafter. And for solar, in which Spain is also seen as a leader, subsidies have amounted to 575% of the market price for 25 years, then declining to ”only” 460%. With returns of 12 to 20%, the take up has been understandably high (indeed, there have been waiting lists). ”

”And they come at a cost: a renewables subsidy of 2.6bn euros in 2007, with about one third of the total going to the solar sector, which represents only 0.7% of installed capacity and about half the total number of jobs.”

The costs are such that the government has now had to reduce the subsidy for solar power by 30% and cap the amount of new capacity to be installed. This softening of support resulted in 10,000 job losses. Further reductions of subsidies put 40,000 more green jobs at risk. Energy prices are rising to cover losses in the distribution industry, and generators have announced the cancellation of 4.5bn euros of annual investment because they also pay an effective subsidy for renewable energy through the controlled price to the consumer.”

Se also my post among many others:

 Wind Turbines in Europe Do Nothing for Emissions-Reduction Goals

However costly, however uneconomic, however outright irrational you might have imagined windpower to be – the reality is even worse

The Real Cost of Wind and Solar Power!

Who knew a ”free” source of energy – Wind Power could be so expensive?

Overblown: The Real Cost of Wind Power!Carbon Credits Fund Broken Turbine

Article here:

http://www.cambridgenetwork.co.uk/news/article/default.aspx?objid=57640

Date: 20/03/09

Scientific Alliance newsletter 20th March 2009

The reality of wind power and green-collar jobs in Spain

Sometimes, two stories come along which starkly contradict each other. A perfect example is the reporting of Spain’s green credentials. The country is often held up as an example to laggards across the EU of how to invest in renewable energy. Take, for example, a piece in the Times last week, headlined ”Spanish windmills tilt country towards cleaner, greener energy”.

According to this, 30% of Spain’s energy in January and February came from wind and hydro power, thanks to wet and windy weather, and the figure for the year as a whole is expected to be nearer 30% than 20%. For comparison, ”carbon” energy (presumably coal- and gas-fired stations) accounted for 14.3% and nuclear 20.9%. Where the other 35% of energy came from is anyone’s guess: no figures are given. Crucially, the actual contributions of hydro and wind power are not given, but the likelihood is that the bulk of the 30% was hydro power.

Although great strides may well have been made in the last few years, it is difficult to reconcile these figures with those for Spain in 2005 taken from the EU energy portal (www.energy.eu). This gives a figure of 8.7% as the contribution of renewables: pretty much the EU average, and with a target of 20% by 2020. And as for carbon dioxide emissions, Spain is projected in 2010 still to be nearly 24% above its 2012 Kyoto target.

Another view of this situation was given by Dr Gabriel Calzada, Associate Professor of Economics at King Juan Carlos University during the Heartland Institute’s climate change conference in New York last week. In contrast to the Times article, the title was ”Spain’s new energy economy: Boom and bust of the Spanish renewable miracle”.

According to his figures, Spain has increased its emissions by 40% since signing the Kyoto protocol. And yet, in contrast to the government estimate in 2004 that emissions permits would cost Spanish companies no more than 85 million euros annually, the real cost is now estimated at between 3 billion (government statement) and 15 billion euros (Price Waterhouse Coopers).

As for renewable energy, the rapid growth of wind power is not surprising. For the first 15 years, a subsidy of 90% over the market price has been payable, reducing to 80% thereafter. And for solar, in which Spain is also seen as a leader, subsidies have amounted to 575% of the market price for 25 years, then declining to ”only” 460%. With returns of 12 to 20%, the take up has been understandably high (indeed, there have been waiting lists).

The result is that installed wind capacity is just over 10% of the total for the country, although it is unclear whether this is theoretical or makes allowance for a realistic efficiency factor. The buoyant market has created around 50,000 jobs, but these are nearly all for installing new capacity and so do not provide long term employment. And they come at a cost: a renewables subsidy of 2.6bn euros in 2007, with about one third of the total going to the solar sector, which represents only 0.7% of installed capacity and about half the total number of jobs.

The costs are such that the government has now had to reduce the subsidy for solar power by 30% and cap the amount of new capacity to be installed. This softening of support resulted in 10,000 job losses. Further reductions of subsidies put 40,000 more green jobs at risk. Energy prices are rising to cover losses in the distribution industry, and generators have announced the cancellation of 4.5bn euros of annual investment because they also pay an effective subsidy for renewable energy through the controlled price to the consumer.

So, with Kyoto emissions targets almost certain to be significantly overshot and the bubble of green-collar jobs now burst, the Spanish government must be wondering how it managed to waste so much money for so little reward. It is difficult to see an economic recovery in Europe (or the USA) being led by a boom in long-term green-collar jobs.

Shell gets back to basics

The reality of renewable power generation has also dawned on Shell. Several newspapers have carried the story that the company is stopping its investments in wind and solar power because they are simply uneconomic. Last year, it pulled out of a partnership with E.ON to build the 1,000 MW (when the wind blows at the right strength) Thames Array off-shore project.

Environmentalists will argue that such decisions are wrong, because they believe that the future lies with such clean technologies. To compound the offence, Shell is investing more in biofuels, which have been criticised because of the relatively low carbon saving they make and their distorting effect on food prices.

However, doing projects which are not commercially viable is not generally good business. Businesses have to look after their profitability and their shareholders first. In so doing, they are often highly innovative and take significant risks with technologies which give no payback for many years, moving away from renewables does not just mean the company is playing safe. Shell is changing tack for a reason, and that reason is that it sees no prospects of wind power becoming commercially viable for the foreseeable future.

Over the last decade or so, wind turbines have become more efficient, and wind is the renewable power source which needs the lowest subsidy to compete. But Shell does not see a continuation of the trend to the point where wind power will be economically viable without a subsidy. The situation for solar power (as the figures from Spain show well) is much further away from being economically competitive.

Even if wind (and eventually, solar) power become serious options, their intermittency remains a major problem until cheap, high capacity storage is available. In these circumstances, an energy company such as Shell is understandably getting back to basics and pursuing routes where it sees more potential. Biofuels is one of these.

True, this sector also has problems at present and requires subsidies to keep it viable. But the scope for major developments over the next few years is much greater. The first company which can convert waste biomass into a range of energy-dense fuels in a way which is potentially cost-effective has an important first mover advantage in what could be a large sector of the future transport fuels market.

It may turn out that Shell has backed the wrong horse in this particular case. Other companies may make a breakthrough in low-cost photovoltaics, or in some other area. But the point is that there will be a range of options being pursued by companies which all think they can be winners. Some of them will succeed, some will fail; the market will decide. This is a much better way of harnessing creative potential than single-mindedly focussing on just wind and solar power. Objective, hard-headed decision making will give the best results in the long term.

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