Once more the news is dominated by Brexit fallout, and so is this edition of Blowout, starting with protests from a segment of the UK community which seems to have a different perspective on the meaning of the word “democracy”.
They simply won’t take “Brexit” for an answer.
Tens of thousands of protesters angered by Britain’s historic vote last week to leave the European Union marched down London’s up-market Park Lane Saturday, many of them hoping that divorce from the bloc will never actually happen. They say they’ve been cheated by a campaign deceit and false promises, chanting “We are the 48%, no more lies, no more hate.” Organizers said around 50,000 people had joined the march by midday, and while the protest attracted all walks of life, millennials appeared to make up the bulk of the crowd. “The votes were called but people were told lies,” said 29-year-old Loveday Newman, wearing a T-shirt bearing a big red heart with “Europe” scrawled on it. “I understand it’s the outcome of a democratic vote but it’s still a democracy, and being part of that I hope we can contest the outcome. I hope we remain. I am European. Britain is just stronger in,” she said.
Following on from the potpourri of Brexit articles below are some selected non-Brexit news items that herald our eventual return to normal reporting, including OPEC oil output at record highs, global nuclear power growth the highest in 25 years, Germany to stay with coal, Sweden approves sale of Vattenfall’s German lignite plants, Diablo Canyon shutdown approved, renewables and the Australian elections, and last but not least, the rapid decrease in global satellite temperatures since the El Niño peak.
After an initial slump in the first two trading days following the Brexit vote, the index of Britain’s top 100 companies regained all its losses by Wednesday and is now at its best level since last August. The remarkable rebound has surprised analysts, with Chris Beauchamp, a senior market analyst at the spread betting group IG, saying: “Of all the post-Brexit outcomes discussed across the City over the past few months, ‘buying frenzy’ was not one that was viewed as very likely.” Part of the reason for the recovery is the growing belief that article 50, the mechanism to trigger the UK leaving the EU, will not be triggered for months, whoever ends up with the prime minister’s job. So in some senses it is business as usual for the moment, and the City tends to take a rather short-term view of events. On top of that, the falls in the immediate aftermath of the vote convinced many investors there were bargains to be had.
Wall Street Journal: Brexit, the Pound and Stock Prices: A Volatile Mix
Central bankers can still sway markets. Bank of England Governor Mark Carney’s strong indications Thursday of looser monetary policy to come sent stocks surging and the pound down. Foreign investors have two diverging forces to keep an eye on. In local terms, the U.K. is the winner: the FTSE 100 closed up 0.3% on June 29 from June 23, the day of the vote. By contrast, Germany’s DAX fell 6.3% over that period. But viewed through the lens of the dollar, things look different. The U.K. index has fallen 8.3%, German shares 7.8%. The movement in the pound is a big price cut for foreign investors. For U.K. shares, a positive factor is that big multinational companies should be given a boost, as foreign earnings are worth more in sterling; hence the large-cap FTSE 100 has fared much better than the domestically focused FTSE 250. Even so, the scale of the rebound in the FTSE 100 appears to rely on either the dubious assumption that Brexit is avoided, or an equally questionable view that the move won’t have broad implications beyond the U.K. The move in the euro has been more muted. The backdrop of weak eurozone growth and lackluster earnings makes it particularly vulnerable if a British exit causes more political contagion.
There is a very real possibility the United Kingdom will get its second female leader before the United States gets its first. The favorite to replace Cameron was widely seen as former London mayor Boris Johnson, until the face of the “Leave” campaign made the shock decision to withdraw from the race on Thursday. This left one clear favorite — Home Secretary Theresa May. Although the 59-year-old was on the losing side of the bi-partisan referendum, she kept a far lower profile than many of her pro-“Remain” colleagues. May became favorite for the leadership earlier on Thursday, after Johnson’s key pro-Brexit ally — Justice Minister Michael Gove — announced he would run against his collaborator. This saw several senior Conservative lawmakers defect from supporting Johnson to Gove’s camp, precipitating Johnson’s decision to withdraw hours later. May’s closet challenger is Gove, a man who man who once told the BBC: “I could not be prime minister, I’m not equipped to be prime minister, I don’t want to be prime minister.” That was just one of several occasions Gove assured the public he did not want the top job. He admitted as such when he announced his leadership bid, but said events since the referendum “have weighed heavily with me” and changed his mind.
The Conservative leadership contender Andrea Leadsom appears to have taken a swipe at the frontrunner, Theresa May, saying the next leader must be a Brexit supporter rather than someone “who is reluctantly following the wishes of the people”. Leadsom is reportedly odds-on to become May’s closest rival on the ballot paper that will decide Britain’s next prime minister, as Michael Gove fails to land significant backing from fellow Conservative MPs after he forced out Boris Johnson from the contest. According to Sky News research, May has the backing of 95 Tory MPs, while Leadsom has the support of 20. Crabb is ahead of Gove with the backing of 22 MPs to the justice secretary’s 18, while the final contender, Liam Fox, trails behind with the support of seven MPs.
The future of energy and environmental policy in the United Kingdom and the European Union has been thrown into question following the U.K.’s vote to leave the E.U. last week, despite promises from the current Conservative Party leadership that the country would deliver on commitments. “The UK’s role in dealing with a warming planet may have been made harder by the decision last Thursday,” said Amber Rudd, the U.K. Energy and Climate Change secretary, on Thursday at a conference on business and climate. “However we choose to leave the EU, let me be clear: we remain committed to dealing with climate change.” The most immediate question on the minds of advocates for action on climate change may be what Brexit means for the Paris Agreement on climate change agreed to last year by nearly 200 countries. The agreement requires 55 countries representing 55% of the world’s emissions to ratify the agreement before it can enter into force. The E.U. and its 28 constituent countries—which make up 12% of global emissions—were widely expected to adopt the agreement in unison, according to a CarbonBrief report. But … it remains unclear whether E.U. representatives will wait for the U.K. to formally depart before ratifying. If so, that could push back ratification months if not years later than expected.
The two front-runners to succeed David Cameron as prime minister set the U.K. on a collision course with European Union leaders after both said they were in no hurry to trigger the mechanism that would start Britain’s withdrawal from the bloc. Michael Gove said the legal notification won’t be made this year if he becomes prime minister, echoing comments made by Theresa May. The foot-dragging sets up a clash with the 27 remaining heads of government, who said this week that the U.K. needs to move “as quickly as possible” to start the two-year Brexit process.“We control the timing of when we trigger Article 50, and we will do it when we’re good and ready,” Gove, the justice secretary in Cameron’s government, told reporters in London on Friday as he set out his bid for the leadership of the ruling Conservative Party. He said his government would conduct “extensive preliminary talks” before invoking the article, adding: “We need to make sure we have the best possible deal.” Launching her leadership campaign on Thursday, May, the favorite with bookmakers and the candidate with the most support among Conservative lawmakers so far, said the new government would need to agree on a negotiation strategy first, so “Article 50 should not be invoked before the end of this year.”
France’s President has said the implementation of the Brexit can-not be cancelled or delayed as Eurosceptics “begin to realise” the benefits of remaining in the EU. Francois Hollande echoed comments made by some other European leaders who have called for the UK to start the process of leaving the EU immediately. “But the decision has been taken – it can not be delayed or it cannot be delayed or cancelled. Now we must take the consequences.” Speaking after a meeting with British Prime Minister David Cameron on the sidelines of the centenary commemorations of the Battle of the Somme, he told the AFP news agency: “Being in the European Union has its advantages and I think that is what the British are beginning to understand, what those who are tempted by the Brexit are going to reflect upon. “But the decision has been taken – it can not be delayed or it cannot be delayed or cancelled. Now we must take the consequences.”
Wall Street Journal: Oil Rebounds from Brexit Fears
Oil prices rose Friday and chalked up their best week in more than a month on subsiding fears about the Brexit referendum’s impact on crude demand. Buyers are still coming back into the market, picking up oil along with stocks and other commodities as they take advantage of the selloff that pounded those assets after Britain’s vote a week ago to exit the European Union, brokers and analysts said. Many bank analysts have said Britain’s economy is too small and spinoff impacts will be too limited for an economic slowdown that could cut oil demand growth substantially. U.S. crude for August delivery settled up 66 cents, or 1.4%, at $48.99 a barrel on the New York Mercantile Exchange. It finished the week with three winning sessions in the last four, pushing gains of $1.35 a barrel, or 2.8%, the biggest gains in one week since mid-May. Brent, the global bench-mark, rose 64 cents, or 1.3%, to $50.35 a barrel on ICE Futures Europe. It also had three winning sessions in the last four and weekly gains of $1.31 a barrel, or 2.7%—the largest since mid-May.
Although the ruling Conservative Party is not required to call an election until 2020, most political observers expected Prime Minister David Cameron to be replaced by the leader of the campaign for a British exit from the EU, Boris Johnson, who would then want a fresh mandate from the public. That was the thinking, anyway, until an extraordinary sequence of events unfolded, starting with an announcement from Michael Gove, the Leave campaign’s ideologue, who was expected to run Johnson’s campaign to become the new leader of the Conservatives, and hence prime minister. Gove, the justice secretary, released a statement on Thurs-day saying that he did not think Johnson, his ally in the Leave campaign, was up for the job of running the country, and he wanted to be prime minister himself. Under normal circumstances, this kind of disarray inside the Conservative Party — with the resignation of a prime minister and a deep divide between the factions opposed to and in favor of EU membership — should present an opportunity for the opposition Labour Party. That party, however, has been busy with a civil war of its own. In the aftermath of the referendum, and driven partly by speculation that there might be an election soon, about 80 percent of the party’s members of Parliament have called for their leader, Jeremy Corbyn, to step down. Corbyn, who was accused of being lukewarm about the EU, has refused — pointing out that he was chosen not by his fellow MPs, but by a clear majority of the party’s members and paying supporters in a direct election held just 10 months ago. A poll of Labour members released on Thursday suggested that he would easily win a new vote.
The UKIP index, Conservative vote share, and UKIP vote share variables are all significant and positive predictors of a vote to leave the European Union. Importantly, the UKIP Demographic Favorability Index has the most substantive effect on increasing the Leave vote, while the percentage of the vote obtained by UKIP in the most recent council election has the second largest effect — an effect almost double the effect of the conservative vote share coefficient. Support for UKIP … does a far better job predicting Leave than does local authority sup-port for the Tories. If this referendum were about traditional Euroskepticism, then one might ex-pect the relationship between Conservative Party vote share and the Leave vote to be much stronger than the relationship between the Leave vote and measures of UKIP support. But the most fascinating finding is actually the interactive relationship between the UKIP index and the Labour share of local authority vote in the last election. The Labour vote share variable is significant and negative, but the interaction term is significant and positively signed. This essentially means that UKIP-friendly demographics provided Leave with an extra push in areas that have supported Labour in past council elections. Put another way, the arguments made by UKIP were more effectively deployed in Labour-areas that were older, whiter, less educated, and with higher levels of constituents employed in blue-collar occupations.
Australian Financial Review: Merkel is not going to do Brexit any favours
As usual in European Union politics there has been a bewildering cacophony of opinions, from the hostile to the bizarre, about how to handle Britain’s demand to pull up the drawbridge and leave. Don’t pay too much attention to the usual provocative comments by the French, the self-serving European-ist rhetoric of the Brussels bureaucrats and the extended episode of Fawlty Towers playing out in the British Conservative Party. The only person worth listening to this week was German Chancellor Angela Merkel. Merkel’s comments are rarely colourful but they really matter. Once again, after weathering the Greek debt crisis and the Syrian refugee drama, Merkel is the one who has the job of saving Europe. She runs the country that is the motor of the European economy. With her methodical manner, centre-right politics and pragmatic instincts she potentially can help make the best of this mess without destroying the crucial trade and political ties that bind the EU and Britain. Yet in the past week Merkel has staked out a position that is tougher than Britain might have been hoping for. “My only advice to our British friends is: Don’t delude yourself about the necessary decisions that need to be taken,” she told the German parliament. If you think Brexiters can change her mind look at how Merkel has forced Greece to go through five years of austerity as a condition for German bail-outs. The bright spot for Brexiters in Merkel’s statements this week was that she slapped down the other EU leaders who wanted to run Britain out of the EU tomorrow. “No need to be nasty,” she said.
Australian: Brexit: Death of the European dream
The EU is in crisis. More importantly, Europe itself is in crisis. There is even talk of the death of Europe. Yet hope may lie in the very fact that Europe is not the EU, and the EU is not Europe. Europe is a region beset by crisis and stagnation. It is in trouble on multiple fronts. All of its troubles are exacerbated by the EU. If the EU could be diminished in an orderly way, Europe could prosper, and lead, again. Nothing is harder in international relations than arranging an amicable divorce. The only thing harder is perhaps reforming an organisation, which has be-come overweening and counterproductive, towards more modest aims and functions. And hard-est of all is putting a terminal organisation to sleep. Consider the two great European counter-models. Czechoslovakia decided it wanted to be what it always really was, two nations. So it became the Czech Republic and Slovakia. The bust-up had its elements of bitterness and many tense negotiations over resources, reciprocal obligations and the like. But it was well handled and the two nations have both prospered. By contrast, at the end of the Cold War no fiction was more widely held than the idea that Yugoslavia should remain a single nation. The result was the Balkan Wars and all the death and misery they entailed. The EU, of course, was completely impotent in this crisis, which was solved eventually by American power. So will Brexit look metaphorically (hopefully there will be no bullets anywhere) more like the velvet divorce of Czechoslovakia or the economic equivalent of the Balkan wars?
Britain’s flagship energy project, Hinkley Point C, is hanging by a thread as critics inside key backer EDF use the political turmoil from the Brexit vote to try to derail the already delayed £18bn scheme. Jean Bernard Levy, the EDF group chief executive, and the French and British governments, have in recent days insisted they are as committed as ever to a positive final investment decision being taken as soon as possible. But well-placed sources in Paris have told the Guardian that the already divided EDF board, which must make that decision, is in danger of fracturing further as former supporters of the project worry about Brexit. “The situation for Levy was already very delicate,” said one source. “But it has become a lot more difficult because there is so little certainty around the British government,” they added. “No one could know today which way a vote [of the board on Hinkley] would go.” Those arguing against the project say it is impossible to make any decisions when it is unclear who will be the future prime minister, chancellor of the exchequer and energy and climate change secretary.
Wall Street Journal: France tells EDF to proceed with Hinkley Point despite Brexit
French Economy Minister Emmanuel Macron on Tuesday dismissed the questioning of Hinkley Point that arose following the Brexit vote. Hinkley Point would be beneficial for EDF, for the U.K. and for the French nuclear industry as a whole, Mr. Macron said on Tuesday. “Nothing indicates there is any British change on the project,” he said. Mr. Macron reiterated that the French government backs the project as it will create jobs in France and boost the different units of Areva, the beleaguered state-owned nuclear engineering firm being dismantled by the government after years of massive losses. He insisted EDF would likely make the final in-vestment decision on Hinkley Point during the summer.
Times of India: Opec oil output hits record high in June on Nigerian rebound
Opec’s oil output has risen in June to its highest in recent history, a Reuters survey found on Thursday, as Nigeria’s oil industry partially recovers from militant attacks and Iran and Gulf members boost supplies. Supply from the Organization of the Petroleum Exporting Countries has risen to 32.82 million barrels per day (bpd) this month, from a revised 32.57 million bpd in May, the survey based on shipping data and information from industry sources found. Opec’s June output exceeds January’s 32.65 million bpd, when Indonesia’s return as an Opec member boosted production and output from the other 12 members was the highest in Reuters survey records, starting in 1997. The biggest increase in June of 150,000 bpd came from Nigeria, where output had fallen to its lowest in more than 20 years due to militant attacks on oil facilities, due to repairs and a lack of major new attacks since mid-June. Iran managed a further supply increase after the lifting of Western sanctions in January, sources in the survey said, although the pace of growth is slowing. Gulf producers Saudi Arabia and the United Arab Emirates increased supply by 50,000 bpd each, the survey found. Saudi output edged up to 10.30 million bpd due to higher crude use in power plants to meet air-conditioning needs.
Paso Robles Press: Diablo Canyon nuclear plant shutdown approved
The California State Lands Commission (CSLC) voted unanimously to approve the renewal of Pacific Gas & Electric Company’s Diablo Canyon Nuclear Power Plant lease on Tuesday, June 28. Through this decision, Diablo Canyon has taken the first steps toward completion of the decommission process. This is a direct result of PG&E’s joint proposal with the State of California, the International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees, Friends of the Earth, the Natural Resources Defense Council, Environment California and the Alliance for Nuclear Responsibility, to decommission the plant by 2025 and replace that technology with green house gas free energy generation technology.
Global addition to capacity in 2015 hit 10.2 gigawatts, the highest growth in 25 years, the IEA’s Executive Director Fatih Birol told a nuclear conference in Paris. “We have never seen such an increase in nuclear capacity addition, mainly driven by China, and also South Korea and Russia,” he said, also noting growth in India. “It shows that with the right policies, nuclear capacity can increase,” Birol added. However, Birol said the sector was still facing some tough challenges which governments must tackle in order to meet the United Nations target of curbing global warming following the Paris climate agreement. Nearly 200 nations reached the landmark accord last December in Paris, to cut carbon dioxide emissions and limit global warming below 2 degrees Centigrade. To meet the 2 degrees target, the share of nuclear power, which, although opposed by environmental groups for its contamination risks, is clean in CO2 emissions terms, needs to increase substantially from 11 percent today to close to 20 percent by 2040, Birol said.
Both before and after the Paris climate agreement, analyses by authorities including the International Energy Agency and the United Nations Framework Convention on Climate Change found that countries’ promises to cut their emissions just weren’t ambitious enough to keep the world within the “safe” climate range that lies at the core of the Paris agreement. Such analyses suggested, again and again, that without more ambitious action on the part of individual countries, global greenhouse gas emissions would still rise in the future, and warming might peak at temperatures well above 2 degrees Celsius. Now, in a study in Nature, a large team of researchers reaffirm this troubling conclusion in a sweeping manner, by not only reexamining the individual country pledges — also known as Intended Nationally Determined Contributions, or INDCs — but also conducting a meta-analysis of all the past analyses that have already determined that the Paris pledges fall short. And they, too, find after taking stock of all of this research that the current pledges are likely to leave temperatures at 2.6 to 3.1 degrees Celsius warmer than pre-industrial levels by the year 2100, assuming that the pledges themselves are adopted and only their unconditional parts are realized. Indeed, under the pledges, the full carbon “budget” that we have left to emit if we want a good chance of staying below 2 degrees Celsius of warming could be emitted by 2030, the research finds.
Planet Ark: Germany waters down climate protection plan
Germany has abandoned plans to set out a timetable to exit coal-fired power production and scrapped C02 emissions reduction goals for individual sectors, according to the lat-est draft of an environment ministry document seen by Reuters on Wednesday. An earlier version of the draft document that was leaked in May had suggested that Germany should phase out coal-fired power production “well before 2050” as part of a package of measures to help Berlin achieve its climate goals. The new version, which was revised following consultation with the economy and energy ministry, has also deleted specific concrete C02 emissions savings targets for the energy, industry, transport and agriculture sectors.The document forms the government’s national climate action plan for 2050 and lays out how it plans to move away from fossil fuels and achieve its goal of cutting CO2 emissions by up to 95 percent compared to 1990 levels by the middle of the century. The original proposals met with hefty opposition from unions, coal-producing regions and business groups who said it would cost jobs and damage industry. Christoph Bals, policy director at environmental NGO Germanwatch, criticized the changes. “Seven months after the successful climate summit in Paris the government is capitulating to the interests of the fossil fuel industry and missing the chance to give the economy a modernization impulse by presenting clear plans,” he said.
At the widest point of the Greater Thames estuary, 12 miles north of the Kent coast and 12 miles south of Essex, lies the London Array – the largest operational offshore wind farm in the world. Completed in 2013, after 10 years of planning and construction, it covers an area of 40 square miles – roughly the same size of Bristol – and comprises 175 individual turbines laid out in neat rows like an enormous nursery flower bed. “Standing on a boat in the middle of the wind farm surrounded by these machines is awesome,” says Jonathan Duffy, the farm’s general manager. “Knowing the turbines around you are generating electricity for more than half a million homes from the breeze passing through is a great feeling.” Offshore wind is not only clean and increasingly cheap, it is also among the most popular energy sources in Britain, exploiting the wealth of a well-buffeted coastline without impacting on local landscapes. “When you com-pare it to other technologies, it’s a fairly sure bet,” says Duffy. “It’s a mature technology and it’s a very effective way of installing new power on to the grid.” Duffy hopes to constantly improve the plant’s efficiency, and last December, the plant broke its own output record, generating 369,000 megawatt hours (MWh) of electricity in one month. “We have very good reliability,” says Duffy. “The turbines are designed for 20 years, but we may be able to revisit our calculations and extend their lives.” By 2036, larger and cheaper installations in British waters will probably have matched the output of the London Array but, with luck, those 525 blades will spin for many years more, harnessing the turbulent British weather for the common good.
US News & World Report: Sweden backs sale of German coal mines to Czech group
Sweden’s Social Democratic government said Saturday it is endorsing the sale of state-owned Vattenfall AB’s four coal mines and mining assets in Germany to Czech investors, sparking harsh reactions from environmentalists. “The deal is of strategic importance for the company and that it is financially best option,” Enterprise and Innovation Minister Mikael Dam-berg said. “The value of selling is higher than to keep and continue operating the business.”He didn’t disclose details about the price. Climate minister Isabella Lovin of Sweden’s Environment Party told a joint news conference the government “had thoroughly investigated the deal but didn’t find any formal reasons to reject it.” In April, Czech energy company Energeticky a prumys-lovy holding, or EPH, signed an agreement to acquire the Swedish state-owned utility’s loss-making assets in Germany. EPH made the bid together with PPF Investments, a private equity group. The Swedish company seeks to shift its energy strategy. Vattenfall had made large write-downs on its operations in Germany. Environmentalists have called on Sweden’s government to stop the sale and dismantle the coal assets to prevent climate-warming CO2 emissions.
Guardian: US solar power market hits all-time high
The US solar industry expects to install 14.5 gigawatts of solar power in 2016, a 94% increase over the record 7.5 gigawatts last year, according to a new market report by GTM Research and the Solar Energy Industries Association. Revenues from solar installations also increased 21% from 2014 to more than $22bn in 2015.For the first time, more solar systems came online than natural gas power plants – the top source of electricity in the US – in 2015, as measured in megawatts, said Justin Baca, vice president of markets and research at the Solar Energy Industries Association. This year, new solar is expected to surpass installations of all other sources, said the US Energy Information Administration. The rise of solar energy use, especially by homes and businesses with panels on their roofs, is gradually transforming the electricity industry. For more than a century, power plant owners and utilities have controlled the energy delivery service, and some of them enjoy a monopoly. “We were just a tiny little speck 10 years ago, and now we are really up there with the major established generating technologies,” said Baca. “It’s amazing.”
The Australian renewable energy sector is preparing for a possible blow if the Coalition wins the election on Saturday. A tweet this morning by The Australian Solar Council says there are “rumours of a push for another review of the Renewable Energy Target [RET] after the election”. Green energy publication Renew Economy quoted John Grimes, head of the not-for-profit organisation, as saying that conservative politicians have already tried to “destroy” the RET and they will try again. In early 2014 the Australian government appointed global warming skeptic Dick Warburton as head of a planned review of the RET scheme, which at that time called for 41,000 GWh of large-scale renewable energy generation in 2020. After many months of uncertainty the RET was cut. In June 2015 the Australian government and the Opposition reached a compromise deal and cut the target to 33,000 GWh. The RET review resulted in a period of stagnation for renewables investments. The market has been slowly recovering in the past year, but Renew Economy says concern is mounting that big utilities and coal power generators in the country will push for another review.
Australia’s election is too close to call and the final result may not be known for some time as counting continues in tightly run seats. It is unclear if the ruling Liberal-National has won the 76 lower house seats it needs to form a ruling majority. If it has not, it will need support from minor parties and independents to hold on to power. The Labor Party will not gain enough seats to form government. But it has improved strongly on its 2013 election result of 55 lower house seats, making particularly strong gains in Tasmania and New South Wales.
The Version 6.0 global average lower tropospheric temperature (LT) anomaly for June, 2016 is +0.34 deg. C, down 0.21 deg. C from the May value of +0.55 deg. C. This gives a 2-month temperature fall of -0.37 deg. C, which is the second largest in the 37+ year satellite record…the largest was -0.43 deg. C in Feb. 1988. In the tropics, there was a record fast 2-month cooling of -0.56 deg. C, just edging out -0.55 deg. C in June 1998 (also an El Nino weakening year). The rapid cooling is from the weakening El Nino and approaching La Nina conditions by mid-summer or early fall.