WEBVTT - Why Nuclear Power Should Be Ramped Up 0:00:00.160 --> 0:00:02.719 Hi, Meren Talks Money. Listeners, I've got a new column 0:00:02.759 --> 0:00:05.640 out at Bloomberg dot Com. It's all about ices. We're 0:00:05.640 --> 0:00:08.000 coming up to iSER season. We all love an iSER, 0:00:08.039 --> 0:00:10.360 we all like to be an iSER millionaire. But are 0:00:10.400 --> 0:00:13.000 ice is good for the country as well as good 0:00:13.000 --> 0:00:14.880 for you? Now, that's a question we've got to ask. 0:00:14.880 --> 0:00:18.000 Because this is a tax break, are we using it properly? 0:00:18.160 --> 0:00:20.919 There's a case to be made for the brit iSER 0:00:21.440 --> 0:00:24.919 only allowing you to invest your iSER money in companies 0:00:25.200 --> 0:00:28.320 actually listed in the UK. You can read the argument 0:00:28.360 --> 0:00:30.720 for that at Bloomberg dot Com. At the same place, 0:00:30.720 --> 0:00:33.599 you can also find columns from Bloomberg's many other brilliant columnists, 0:00:33.600 --> 0:00:36.040 and be sure to subscribe for access to insightful stories, 0:00:36.120 --> 0:00:44.640 data videos, podcasts, and much more. Welcome to Meren Talks Money, 0:00:44.640 --> 0:00:46.839 the podcast in which people who know the markets explain 0:00:46.880 --> 0:00:50.360 the markets. I'm meren'sumset Web. This week, a conversation about 0:00:50.400 --> 0:00:53.640 the UK's future energy mix with Kafrinport and independent energy 0:00:53.640 --> 0:00:56.880 consultant at what Logic, and after my conversation with Catherine, 0:00:56.880 --> 0:01:00.280 stay tuned for a conversation with Bloomberg energy reporter John 0:01:00.320 --> 0:01:04.200 Morrison Yadron. Hello, thank you so much for joining yesterday. 0:01:04.280 --> 0:01:04.840 My pleasure. 0:01:04.959 --> 0:01:07.120 Okay, we're going to dive right in with a super 0:01:07.120 --> 0:01:10.160 easy question. Isn't it zero possible by twenty fifty? 0:01:10.200 --> 0:01:10.760 Probably not? 0:01:11.440 --> 0:01:12.280 Is it desirable? 0:01:12.440 --> 0:01:15.600 Now, that's a very interesting question. I think that we 0:01:16.240 --> 0:01:20.039 have been focusing very single mindedly on carbon dioxide, and 0:01:20.120 --> 0:01:22.680 some of the policies that we've been adopting in pursuit 0:01:22.680 --> 0:01:25.759 of that aim have caused other harms and are causing 0:01:25.760 --> 0:01:28.240 other harms that aren't really getting the attention that they need. 0:01:28.840 --> 0:01:31.240 I did some work recently looking at the critical minerals 0:01:31.280 --> 0:01:34.240 required for the energy transition and the huge increase in 0:01:34.319 --> 0:01:37.080 mining that's going to be needed. And the problem with 0:01:37.160 --> 0:01:42.040 mining is it's very environmentally harmful. It's often taking place 0:01:42.080 --> 0:01:46.360 in countries which are quite arid, so issues around water supply, 0:01:46.600 --> 0:01:49.800 keep maintaining clean water, availability of water for agriculture and 0:01:49.880 --> 0:01:53.760 human consumption are quite significant. Blasting and so on causes 0:01:53.760 --> 0:01:56.520 a lot of air pollution, and you have huge challenges 0:01:56.560 --> 0:01:59.360 with managing the rights of indigenous peoples on whose land 0:02:00.160 --> 0:02:03.200 or underneath whose land these resources are often found, and 0:02:03.320 --> 0:02:07.120 often that you have a lot of labor and human 0:02:07.200 --> 0:02:09.040 rights abuses associated with them. 0:02:09.320 --> 0:02:11.400 Can I just take you back and ask you about water. 0:02:11.680 --> 0:02:13.480 I think a lot of people won't understand quite how 0:02:13.520 --> 0:02:15.120 water intensive mining is. 0:02:15.680 --> 0:02:17.919 Yeah, So the issue with water comes up in a 0:02:17.960 --> 0:02:21.799 few different ways. One is that miners often deliberately remove 0:02:21.840 --> 0:02:24.400 water from the water table to reduce the risk of 0:02:24.440 --> 0:02:27.280 flooding in their minds. That have been studies in South 0:02:27.280 --> 0:02:31.600 Africa that have shown that water table levels might take 0:02:31.680 --> 0:02:35.040 more than a century to recover, and this affects mooreholes 0:02:35.080 --> 0:02:39.120 that are being used for local people's consumption and for agriculture. 0:02:39.960 --> 0:02:43.480 Water is also used quite extensively in the processing and 0:02:43.560 --> 0:02:47.280 extraction of the minerals from the rock, and so they're 0:02:47.320 --> 0:02:50.239 taking that water away is then unavailable for other uses. 0:02:50.760 --> 0:02:53.600 Then the third area where you have an impact is 0:02:53.639 --> 0:02:56.480 that there's a lot of waste material from mining and 0:02:56.600 --> 0:03:00.920 the extraction of metals from are and you get what's 0:03:00.919 --> 0:03:04.480 called tailings, and they're usually stored in these ponds and 0:03:04.960 --> 0:03:08.040 all sorts of contaminants can leach out of those ponds 0:03:08.080 --> 0:03:12.480 into local water sources, whether that's fresh water or seawater. 0:03:12.600 --> 0:03:16.080 And then that also gets into the food chain, both 0:03:16.360 --> 0:03:19.000 marine let's say, fish, and so on and then people 0:03:19.000 --> 0:03:21.560 eat the fish and get sick or just straightforward drinking 0:03:21.600 --> 0:03:24.880 the water, and so it has a really significant impact. 0:03:25.280 --> 0:03:29.240 And we've seen in South America there's been increasing social 0:03:29.320 --> 0:03:32.600 pressure against mining. So in Panama recently they closed a 0:03:32.680 --> 0:03:36.520 very large copper mine as a result of basically political pressure, 0:03:37.240 --> 0:03:39.960 and now it's a lot harder to open new mines. 0:03:40.280 --> 0:03:42.680 And so you have a population of people, particularly in 0:03:42.840 --> 0:03:46.800 South America and what's called the lithium triangle. I'm really 0:03:46.840 --> 0:03:48.080 objecting to new. 0:03:47.960 --> 0:03:50.680 Extraction in Pritus and Chile. You haven't there around lithium 0:03:50.680 --> 0:03:51.040 minds that. 0:03:51.240 --> 0:03:55.240 Exactly, they're objecting to mining. They're objecting to extraction that 0:03:55.480 --> 0:03:59.240 they say not unreasonably. Then they're not receiving a fair 0:03:59.400 --> 0:04:02.360 share of the economic benefits of all of this. But 0:04:02.400 --> 0:04:05.480 then on the other hand, you have populations in low 0:04:05.560 --> 0:04:09.040 lying Pacific islands and in the Indian Ocean i am, 0:04:09.240 --> 0:04:11.680 you know, clamoring for more action on climate change. So 0:04:11.760 --> 0:04:16.560 you have two populations in fairly sort of underdeveloped and 0:04:16.680 --> 0:04:21.839 more deprived parts of the world with very conflicting sets 0:04:21.839 --> 0:04:25.560 of interests, and so far there really hasn't been any 0:04:25.600 --> 0:04:29.080 effort to balance those and sitting here in the UK, 0:04:29.360 --> 0:04:32.560 or what right do we have anyway to say which 0:04:33.120 --> 0:04:35.120 rights are better than which are the rights and all 0:04:35.120 --> 0:04:37.960 the rest of it. So I think that we need 0:04:38.000 --> 0:04:42.240 to start thinking in a more holistic way about what 0:04:42.279 --> 0:04:45.960 we're doing. And you realize that common dioxide is only 0:04:46.000 --> 0:04:49.159 one part of the puzzle. If we don't have enough 0:04:49.240 --> 0:04:51.640 drinking water, then having clean air isn't going to be 0:04:51.640 --> 0:04:52.640 that much of a comfort. 0:04:52.880 --> 0:04:55.240 Yeah, I'm maintaining with agriculture and so on. So there's 0:04:55.279 --> 0:04:57.880 massive downsides to what we're trying to do exactly, Okay, 0:04:57.960 --> 0:05:01.839 So let's talk then about what the ideal energy mix 0:05:02.440 --> 0:05:03.120 would be. 0:05:03.600 --> 0:05:03.680 Right. 0:05:03.800 --> 0:05:05.719 So we spent a lot of time in the UK, 0:05:05.920 --> 0:05:10.560 in particular under wind energy and solar energy and trying 0:05:10.560 --> 0:05:13.480 to up the level of these particular renewables into our 0:05:13.920 --> 0:05:15.920 energy mix. So we reached a limit. Do you think 0:05:16.200 --> 0:05:17.360 of what we can do there? 0:05:17.880 --> 0:05:18.520 I think so. 0:05:19.000 --> 0:05:21.400 I think solar has some contribution, but it's very much 0:05:21.400 --> 0:05:25.160 at the margin because in our times with peak energy demand, 0:05:25.960 --> 0:05:29.880 it's just not sunny, you know, winter evenings, and we 0:05:30.000 --> 0:05:33.160 haven't found a way of seasonal storage for energy yet 0:05:33.160 --> 0:05:35.760 it's not one that works within Britain. We don't have 0:05:36.240 --> 0:05:41.000 seasonal hydro capability because of our geology, so until some 0:05:41.040 --> 0:05:44.720 other technology is developed, it allows us to store electricity 0:05:44.720 --> 0:05:47.280 from the summer to the winter. That is really not 0:05:47.279 --> 0:05:48.159 that useful. 0:05:47.880 --> 0:05:50.160 Okay, So so simply doesn't work for us beyond a 0:05:50.240 --> 0:05:52.440 certain Yeah, I mean it's. 0:05:52.360 --> 0:05:52.880 Nice to have. 0:05:53.000 --> 0:05:55.200 It feels a bit good as at the margin, but 0:05:55.279 --> 0:05:59.240 without a way to storage at least overnight, if not seasonally, 0:05:59.240 --> 0:06:01.520 it's kind of points you really need. 0:06:01.400 --> 0:06:03.760 To have seasonal storage to move your solar from the 0:06:03.760 --> 0:06:04.520 summer to the winter. 0:06:04.720 --> 0:06:07.120 Yeah. And we have a similar problem surely with wind 0:06:07.160 --> 0:06:09.920 and there's not so much seasonal but intermittent. 0:06:10.120 --> 0:06:10.320 Yeah. 0:06:10.520 --> 0:06:13.200 And intermittency is the big problem with renewables because our 0:06:13.200 --> 0:06:15.520 grid is not designed to deal with it, and because 0:06:15.560 --> 0:06:20.040 we need to create a constant backup system to deal 0:06:20.040 --> 0:06:20.839 with the intermittiency. 0:06:20.920 --> 0:06:25.400 That's exactly right. And so it's extremely expensive. And this 0:06:25.520 --> 0:06:28.279 notion that renewables are cheap because all the wind is 0:06:28.320 --> 0:06:32.240 free is extremely naive because you have to build at 0:06:32.360 --> 0:06:35.479 least the same capacity again either as alternative generation or 0:06:35.520 --> 0:06:38.360 as storage to bridge those gaps when it's not windy. 0:06:38.400 --> 0:06:41.680 So straightway that costs money. But then also you have 0:06:41.720 --> 0:06:44.760 a lot more expenditure on the grid because now this 0:06:45.520 --> 0:06:49.360 renewable generation is very distributed, so instead of having one 0:06:49.400 --> 0:06:52.279 big lump of generation in one place with one cable 0:06:52.320 --> 0:06:56.320 connecting it, now you need lots more cables. And then 0:06:56.360 --> 0:06:59.240 also you have to manage the moment by moment intermittency, 0:06:59.600 --> 0:07:02.520 so this is called balancing, and the balancing costs have 0:07:02.520 --> 0:07:05.200 gone up by billions of pounds a year recently. So 0:07:05.320 --> 0:07:07.680 all of these costs are added on to consumer bills, 0:07:08.040 --> 0:07:10.320 and it's why if you look at a chart of 0:07:11.120 --> 0:07:15.240 retail versus wholesale electricity prices since the beginning of the century, 0:07:15.640 --> 0:07:18.280 you see that retail prices have just gone up sharply, 0:07:18.680 --> 0:07:21.680 whereas wholesale prices sort of wiggled around and done some 0:07:21.800 --> 0:07:25.600 other path. And it wasn't really until September twenty twenty 0:07:25.640 --> 0:07:29.480 one that wholesale prices really drove the retail price, because 0:07:29.520 --> 0:07:33.559 they then rose very significantly. But otherwise that relationship hasn't 0:07:33.560 --> 0:07:36.840 been that strong because the retail price has contained all 0:07:36.880 --> 0:07:40.720 sorts of other elements, wind subsidies in particular. 0:07:40.440 --> 0:07:42.520 So when we'd hold that wind is cheap, it is 0:07:42.640 --> 0:07:47.880 not taking account of the backup power, the cost to 0:07:47.960 --> 0:07:51.480 expand the grid to figure out the balancing and possibly 0:07:51.520 --> 0:07:55.440 also the adding environmental cost of the rare earth metals, etc. 0:07:55.760 --> 0:07:58.480 That we need to create the components. 0:07:58.080 --> 0:08:01.080 Absolutely not and it doesn't so it doesn't include the 0:08:01.160 --> 0:08:04.600 direct costs that currently go on to consumer bills. So 0:08:04.760 --> 0:08:07.520 consumers don't see that rare earth environmental cost, but they 0:08:07.560 --> 0:08:10.560 definitely see the extra grid cost because the network component 0:08:10.640 --> 0:08:11.640 of bills has gone up. 0:08:11.920 --> 0:08:12.400 They see the. 0:08:12.400 --> 0:08:15.040 Extra balancing cost because that also comes in through the 0:08:15.040 --> 0:08:18.080 network component. Now, when I did this work on critical 0:08:18.120 --> 0:08:20.680 minerals recently, I went from being a little bit sort 0:08:20.720 --> 0:08:23.880 of neutral I think maybe we should pause the whole 0:08:23.920 --> 0:08:27.920 wind roll out while we upgrade our grid, to actually 0:08:27.920 --> 0:08:31.720 been quite negative because once you understand the huge amounts 0:08:31.760 --> 0:08:35.880 of additional copper and aluminium that are required to support 0:08:35.920 --> 0:08:38.600 that build out, and they are the two minerals that 0:08:38.640 --> 0:08:41.320 are going to be mostly required for the energy transition, 0:08:41.760 --> 0:08:45.200 the increase in aluminium and copper supply will have to 0:08:45.280 --> 0:08:49.040 be very significant, much bigger than everything else. I mean, 0:08:49.040 --> 0:08:51.560 it takes ten years and billions of pounds to develop 0:08:51.600 --> 0:08:56.040 a new mine, and all those other challenges we mentioned earlier, 0:08:56.080 --> 0:08:59.320 it starts to actually look morally questionable, and so I 0:08:59.360 --> 0:09:03.080 think more sensible strategy is to go for nuclear where 0:09:03.920 --> 0:09:06.520 it fits in with the way grids were designed and 0:09:06.559 --> 0:09:09.240 it doesn't have the intermittency problem. So yes, nuclear has 0:09:09.360 --> 0:09:11.920 very high capital costs. Once you've built it there, it 0:09:11.960 --> 0:09:16.040 can run for sixty years. It's extremely safe. Nuclear and 0:09:16.080 --> 0:09:19.840 solar have the lowest deaths by unit of electricity generation 0:09:19.920 --> 0:09:21.600 of all generation technologies. 0:09:21.880 --> 0:09:24.120 Okay, that's unexpected, and make sure for most people, I 0:09:24.120 --> 0:09:24.920 would say. 0:09:24.840 --> 0:09:29.000 Yes, it is unexpected, but that absent Chernobyl. Aside from Chernobyl, 0:09:29.000 --> 0:09:31.959 there have been no nuclear reated related deaths from any 0:09:32.040 --> 0:09:33.600 nuclear incident worldwide. 0:09:34.440 --> 0:09:37.040 Huma, for example, there were no death related to that. 0:09:37.080 --> 0:09:39.719 The deaths around that were related to the tsunami, not. 0:09:39.920 --> 0:09:44.360 Exactly so at the the consumer plant itself there were 0:09:44.400 --> 0:09:48.000 some fatalities, but this was because you know, things fell 0:09:48.000 --> 0:09:51.360 on people's heads during the earthquake and tsunami. That's not 0:09:51.559 --> 0:09:55.520 a nuclear incident. That's just an earthquake related incident. And 0:09:55.600 --> 0:09:59.360 so you get industrial accidents. And that's why even with solar, 0:09:59.360 --> 0:10:03.679 for example, non zero deaths associated with solar. Obviously solar 0:10:03.720 --> 0:10:08.040 panels themselves are completely inert. But then if you look 0:10:08.040 --> 0:10:11.199 in the mining industry. The mining industry is extremely dangerous, 0:10:11.720 --> 0:10:14.440 very high levels. In fact, all extraction industries oil and 0:10:14.480 --> 0:10:17.240 gas is the same, and coal and so on, so 0:10:17.400 --> 0:10:20.880 all of these other industries. And then of course if 0:10:20.880 --> 0:10:24.800 you're using those materials to build your generation, then that 0:10:24.920 --> 0:10:29.240 it's within that supply chain, and renewables wind in particularly 0:10:29.240 --> 0:10:32.559 you get working at height issues as well. So yeah, 0:10:32.679 --> 0:10:34.680 nuclear has a very strong is you're only. 0:10:34.559 --> 0:10:37.040 In mining, not as dangerous as some other kinds of mining, but. 0:10:37.120 --> 0:10:37.800 There's just less of that. 0:10:37.920 --> 0:10:40.559 You need so little, yes, that it doesn't make any difference. Yeah, 0:10:40.640 --> 0:10:42.520 I wrote about this reason. You're actually saying that you're 0:10:42.520 --> 0:10:45.559 only miss so interesting because it's the most price insensitive 0:10:45.600 --> 0:10:47.439 thing in the world because you only need a tiny 0:10:47.440 --> 0:10:50.040 bit of it in each nuclear plant. But without it 0:10:50.080 --> 0:10:52.440 you can't do anything, so you'll pay anything for it, 0:10:52.480 --> 0:10:56.080 so it's not to have to shut the thing down, right, Yeah, Okay, 0:10:56.120 --> 0:10:57.679 let's go back briefly. I want to come back to 0:10:57.760 --> 0:11:00.080 nuclear and how it's financed and how we should do that, 0:11:00.559 --> 0:11:03.480 but let's go back to the grid. So the grid 0:11:03.520 --> 0:11:06.080 is initially designed to have these big power stations in 0:11:06.120 --> 0:11:09.800 the middle of the country, is sending out constant power 0:11:10.080 --> 0:11:12.920 of heartbeat and never stops, etc. Even with nuclear, if 0:11:12.920 --> 0:11:15.560 we're going to have a lot more electrification, even with that, 0:11:15.600 --> 0:11:16.320 we'd still. 0:11:16.080 --> 0:11:17.040 Need to upgrade the grid. 0:11:17.120 --> 0:11:20.240 Right, Yes, you need to build more generation and you'd 0:11:20.240 --> 0:11:22.960 need to upgrade the grid, but it's a much smaller 0:11:23.040 --> 0:11:26.240 challenge if you're not doing it using a lot of 0:11:26.280 --> 0:11:29.200 intermittent generation. It's the fact that we're having all this 0:11:29.280 --> 0:11:33.240 intermittency which requires a doubling of capacity. So you need 0:11:33.520 --> 0:11:36.199 all of the reliable capacity that you can call on 0:11:36.640 --> 0:11:40.760 your thermal and nuclear generation as well as the wind, 0:11:41.280 --> 0:11:44.000 and it will be much more economically effective and a 0:11:44.080 --> 0:11:46.920 better use of resources to just have that and not 0:11:47.000 --> 0:11:49.320 have the wind. And obviously you're not going to want 0:11:49.320 --> 0:11:52.400 the thermal because of the the carbon emissions, but you 0:11:52.440 --> 0:11:55.720 can have the nuclear which doesn't have the emissions problem. 0:11:56.080 --> 0:11:58.120 Okay, again, I want to come back to Nikle. I'm 0:11:58.120 --> 0:12:00.120 gonna put that one side because I think you're I 0:12:00.120 --> 0:12:02.560 probably both agree that this is the answer, the only answer. 0:12:02.559 --> 0:12:04.520 Everyon want to move away from a fossil fueld. So 0:12:04.600 --> 0:12:06.920 let's go back and talk about fossil fuels a little. 0:12:06.920 --> 0:12:09.160 Because it's hard to imagine a world without them. Right, 0:12:09.200 --> 0:12:12.000 So when we have let's stop oil throwing souper around 0:12:12.040 --> 0:12:15.920 the place, et cetera. Even everybody's plans for net zero 0:12:16.320 --> 0:12:19.360 still have us using fossil fuels, right, Even in net 0:12:19.440 --> 0:12:21.880 zero plans, It don't go away, even in the most ambitious, 0:12:22.000 --> 0:12:25.280 ambitious plans that anybody has. And even now when the 0:12:25.280 --> 0:12:29.840 whole world of talking about reducing fossil fuel use, coal 0:12:30.000 --> 0:12:32.800 and oil and gas use is still rising. Right, we 0:12:32.880 --> 0:12:34.800 might be able to make them slightly fall as a 0:12:34.800 --> 0:12:37.720 percentage of use, but not much. 0:12:38.160 --> 0:12:40.839 No, even in Britain, not coal use, but oil and 0:12:40.880 --> 0:12:42.840 gas use has increased in recent years. 0:12:43.480 --> 0:12:47.120 So when we talk about in the UK not not 0:12:47.320 --> 0:12:51.120 using the shell gas that we could get access to 0:12:51.160 --> 0:12:53.960 if we wanted to, and not producing any more licenses 0:12:54.080 --> 0:12:57.040 for exploration and production in the North Sea, this is 0:12:57.080 --> 0:12:58.080 just silly. 0:12:58.120 --> 0:12:58.480 It is. 0:12:58.600 --> 0:13:00.800 Yeah, So I think the shell questions a little bit 0:13:00.840 --> 0:13:04.679 different when it comes to the North Sea. We should 0:13:04.679 --> 0:13:08.240 really maximize the potential of the North Sea and guess 0:13:08.280 --> 0:13:10.679 as much out of it as we possibly can, because 0:13:10.679 --> 0:13:13.800 the alternative is just imports. And then people say, oh, yes, 0:13:13.840 --> 0:13:16.720 but you know it has to travel around anyway because 0:13:17.200 --> 0:13:19.400 we don't have all the refining capacity, but we still 0:13:19.440 --> 0:13:22.360 control the production emissions, and we do have some refining capacity, 0:13:22.720 --> 0:13:25.480 so that argument doesn't really stack up. As soon as 0:13:25.480 --> 0:13:28.200 you're importing, you really lose control of the supply chain. 0:13:28.920 --> 0:13:32.480 With shale, it's a little bit different because although given adeology, 0:13:32.520 --> 0:13:36.320 we're fairly confident that the gas is there, we can't 0:13:36.360 --> 0:13:39.720 be it's confident that it can be extracted economically. And 0:13:39.760 --> 0:13:42.000 if you look at Poland as an example, you know, 0:13:42.040 --> 0:13:45.640 the Polish would crawl over hot coals to avoid buying 0:13:45.640 --> 0:13:49.600 gas from Russia, and they looked at shale quite extensively, 0:13:49.640 --> 0:13:51.200 and in the end they concluded that L and G 0:13:51.280 --> 0:13:53.880 would be a better approach to get the more Russian gas, 0:13:54.600 --> 0:13:56.760 and so that's the route that they've taken. So it's 0:13:56.800 --> 0:14:00.000 not given that that can be economically. 0:13:59.400 --> 0:14:03.080 Extracted go back to the North Sea. So, if I 0:14:03.120 --> 0:14:05.599 understand you, rightly, is suggesting that there's really become of 0:14:05.679 --> 0:14:09.840 almost a moral imperative to continue to the extent that 0:14:09.880 --> 0:14:12.840 we can produce our own oil and gas, because at 0:14:12.880 --> 0:14:16.040 least we can control it, control its production, control the 0:14:16.080 --> 0:14:18.719 way it's taken out, control the way people who work 0:14:18.720 --> 0:14:21.600 on those rigs are treated, etc. So if we don't 0:14:21.600 --> 0:14:24.000 pull it out ourselves, we're going to be importing it, 0:14:24.320 --> 0:14:27.480 correct and we it's a huge sort of revenue for 0:14:27.560 --> 0:14:31.360 the treasury, So it's just crazy to import it when 0:14:31.400 --> 0:14:34.880 we could produce it ourselves. And the windfall tax terrible. 0:14:36.120 --> 0:14:39.440 I mean the windfall tax was introduced because of political 0:14:39.560 --> 0:14:42.840 outrage and public outrage around people like Shell and BP 0:14:43.040 --> 0:14:46.480 earning huge profits. Now I kind of object to that 0:14:46.560 --> 0:14:49.120 a little bit because nobody's giving them sympathy in years 0:14:49.160 --> 0:14:51.560 when they don't turn huge profits, and when they make losses, 0:14:52.000 --> 0:14:55.080 nobody compensates them when they drill a dry well for example, 0:14:55.640 --> 0:14:57.920 and you know you mentioned the people working in the 0:14:57.960 --> 0:15:00.320 North Sea. It is one of the most dangerous, strong 0:15:00.400 --> 0:15:03.160 jobs that you can do. So I do slightly get 0:15:03.200 --> 0:15:06.360 annoyed when people are throwing stones at these companies as 0:15:06.360 --> 0:15:08.920 if they're evil and terrible, when they're really not. They're 0:15:08.960 --> 0:15:12.680 providing goods and services which are essential to everyday life 0:15:12.680 --> 0:15:14.040 in which we all benefit. 0:15:14.040 --> 0:15:16.480 Than my living standards would collapse absolutely. 0:15:17.880 --> 0:15:21.680 But also BP and Shell only a tiny proportion of 0:15:21.720 --> 0:15:26.280 their global income comes from the UK, so really it's harmed. 0:15:26.280 --> 0:15:29.240 Companies like Harbor Energy. Well, most people have never heard 0:15:29.240 --> 0:15:32.480 of Horbor Energy. Harbor Energy making profits or losses is 0:15:32.520 --> 0:15:35.480 not headline news, and yet it's the biggest operator in 0:15:35.520 --> 0:15:39.240 the North Sea. It's taken a big hit to its 0:15:39.240 --> 0:15:41.640 finances as a result of the windfall tax and as 0:15:41.680 --> 0:15:45.480 a result is reprofiling activities away from the UK. And 0:15:45.560 --> 0:15:49.119 what we're seeing is that across the North Sea operators 0:15:49.160 --> 0:15:51.880 they're are scaling back their activities and we're seeing rigs 0:15:51.920 --> 0:15:54.520 moving out of the area. Now, once these rigs go, 0:15:54.680 --> 0:15:56.720 it'll be really hard to get them back. And obviously 0:15:56.760 --> 0:15:59.720 without rigs you're not going to do anything. So it's 0:15:59.720 --> 0:16:03.120 been really damaging and it needs to go. And this 0:16:03.160 --> 0:16:06.520 is politicians need to avoid these kinds of knee jerk reactions. 0:16:07.120 --> 0:16:11.080 The windfall tax has not achieved what it was intended 0:16:11.120 --> 0:16:13.800 to achieve. All it's done is harm companies that most 0:16:13.800 --> 0:16:15.840 people have never heard of and don't really care about. 0:16:15.920 --> 0:16:18.600 And the belief in the time was that it would 0:16:18.840 --> 0:16:23.240 raise large amounts of revenue without affecting production. Well was 0:16:23.280 --> 0:16:24.280 that the view? It must be? 0:16:24.360 --> 0:16:26.840 Well, I think yeah, And now the government is trying 0:16:26.840 --> 0:16:29.120 to sell we'll have these annual licensing rams as a 0:16:29.120 --> 0:16:32.160 way of signaling ongoing commitment to the region. But the 0:16:32.160 --> 0:16:34.520 best way to signal that commitment would be to get rid. 0:16:34.440 --> 0:16:35.160 Of the EPL. 0:16:35.920 --> 0:16:38.320 Where are the rigs going West Africa? 0:16:38.440 --> 0:16:39.080 West Africa? 0:16:39.280 --> 0:16:42.560 It is certainly not coming back, are they? No? No, 0:16:43.160 --> 0:16:45.400 There's one form of energy that I haven't asked you about, 0:16:45.440 --> 0:16:49.240 and that is bio mass. And one of the big 0:16:49.240 --> 0:16:52.200 conversations I know in the energy world is about drags. 0:16:52.240 --> 0:16:55.520 Is drags good or is drags bad? Right? And I 0:16:55.600 --> 0:16:58.920 think you might be on drags bad side. I think, well, 0:16:59.000 --> 0:17:00.800 first have a claim DRAGS does. 0:17:00.880 --> 0:17:03.640 So. The Drags used to be a coal fired power station, 0:17:04.200 --> 0:17:07.639 and because everyone got very squamish about coal, they decided 0:17:07.640 --> 0:17:11.520 that they would initially co fire with wood pellets and 0:17:11.560 --> 0:17:16.600 then convert to using wood pellets completely. And wood pellet 0:17:16.640 --> 0:17:19.520 biomass is considered and has this sort of very neutral 0:17:19.640 --> 0:17:22.960 cabin accounting, because the idea is that you plant new 0:17:23.000 --> 0:17:26.200 trees and then those trees grow and I absorbed common 0:17:26.240 --> 0:17:29.120 dioxide and that offsets the cobbon dioxide that you're emitting 0:17:29.160 --> 0:17:32.640 by burning the wood. And so DRAGS is a huge 0:17:32.680 --> 0:17:35.399 power station and it burns a lot of wood, and 0:17:35.440 --> 0:17:38.920 this wood is being sourced in the US, and they 0:17:39.000 --> 0:17:41.000 like to say it's mostly wastewood, but it would be 0:17:41.040 --> 0:17:45.600 hard to supply drags using just wastewood. I'm interrupting you 0:17:45.640 --> 0:17:48.159 because I've I've got their table here. I have a 0:17:48.240 --> 0:17:51.159 drag supporter who has sent it to me. Stormal and 0:17:51.200 --> 0:17:53.960 other wood industry residues nineteen point seven percent branches and 0:17:54.000 --> 0:17:57.760 tops three percent, sinning, thirteen point eight percent, low grade 0:17:57.840 --> 0:18:03.120 round wood twenty two percent. That seems pretty valid. Well, 0:18:03.119 --> 0:18:05.560 what they do next is they have to chop it 0:18:05.600 --> 0:18:07.760 all up, they have to dry it out, and they 0:18:07.800 --> 0:18:10.800 have to pelletize it. All of those steps take energy. 0:18:11.640 --> 0:18:13.959 Then they load it onto ships and those ships are 0:18:13.960 --> 0:18:16.639 fueled with bunker fuel, which is the dirtiest bit at 0:18:16.640 --> 0:18:19.280 the bottom of the crack, and then they sail it 0:18:19.320 --> 0:18:22.000 halfway around the world to Yorkshire and then they set 0:18:22.000 --> 0:18:25.320 fire to it. And the emissions from the chimneys at 0:18:25.359 --> 0:18:28.440 Drax when burning wood pellets are higher than they were 0:18:28.480 --> 0:18:31.040 when they were burning coal. So not only is this 0:18:31.160 --> 0:18:33.320 bad for the people of Yorkshire because their air quality 0:18:33.359 --> 0:18:35.159 goes down, it is bad for all the people in 0:18:35.200 --> 0:18:37.960 between Yorkshire and the US because of all the emissions 0:18:37.960 --> 0:18:39.840 from the shipping, and it's bad for the people in 0:18:39.840 --> 0:18:42.440 the US because of all the emissions from drying, pelletizing 0:18:42.480 --> 0:18:43.200 and all the rest of it. 0:18:43.359 --> 0:18:43.960 Okay, how about this. 0:18:44.240 --> 0:18:48.920 Honestly, anybody can plant trees so you could be residual. 0:18:48.920 --> 0:18:52.679 Fiber depellot plants significantly improved the economics of timberland. This 0:18:52.720 --> 0:18:55.600 has contributed greatly to land owners making the eping economic 0:18:55.680 --> 0:18:58.639 decision to shift from let profitable land used like carbon 0:18:58.760 --> 0:19:01.639 nasty cotton in the US planting trees for lumber and biomass. 0:19:02.280 --> 0:19:03.920 Timberlands of the save Lee to the US are now 0:19:03.920 --> 0:19:07.520 growing in size, increasing carbon sequestrations and habitats for the 0:19:07.600 --> 0:19:08.480 nice animals. 0:19:08.920 --> 0:19:13.360 But what you're doing is no, because they're fast growing variety, 0:19:13.520 --> 0:19:15.560 So you're losing biodiversity by doing that. 0:19:16.960 --> 0:19:19.200 Okay, you're just not going to be convinced on this one. 0:19:18.920 --> 0:19:22.879 No, no, no, There are other forms of biomass energy, 0:19:22.920 --> 0:19:24.800 so I think it's always important to be specific that 0:19:24.800 --> 0:19:27.520 we're talking about wood pellet biomass in the context of drags. 0:19:27.960 --> 0:19:30.120 But when you look at the supply chain emissions and 0:19:30.240 --> 0:19:32.320 the fact that the stack emissions are higher than they 0:19:32.320 --> 0:19:34.920 are with coal, then really the best thing that dracts 0:19:34.960 --> 0:19:37.360 could do other than just closing. Would we go back 0:19:37.359 --> 0:19:40.800 to burning coal, and yes, you'll have some emissions ship 0:19:40.800 --> 0:19:42.840 in the coal, but you don't have to dry it 0:19:42.880 --> 0:19:45.119 and pelletize it and do all that other stuff. 0:19:45.119 --> 0:19:46.919 Okay, so it would really the best thing for us 0:19:46.960 --> 0:19:48.960 to do. Absolutely the best thing for us to do 0:19:49.480 --> 0:19:52.520 is to forget about the woodpellers, forget about everything, go 0:19:52.600 --> 0:19:54.320 back to coal and just open up our old coal 0:19:54.320 --> 0:19:56.720 mines again, dig up the coal sticking into drags, and 0:19:56.720 --> 0:20:02.040 then you've got a nice, constant efficient source of power 0:20:02.119 --> 0:20:05.320 that just goes directly into the grid without any of 0:20:05.400 --> 0:20:08.879