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ENERGY ECONOMICS

Can a global financing solution be found?

DEPARTMENTS
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FINANCING ENERGY
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INNOVATION & WEALTH
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MARKET MAKERS
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ENERGY RESOURCES
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ECONOMICS LIBRARY
Welcome to the EfN discussions of Energy Economics.
Energy is the biggest business on the planet and the economic scene is very diverse. Here we will discuss the essentials in some depth. A customer view can be found at sites like the public face of the industry at EnergyUK. You can interact with us via the Economics Blogs or track the most important current events with our filtered Tweets.

Every EfN Avenue and every section starts with an Opener or Primer to set the scene and start the learning curve.



Economics: The Opener


Economics is the theory and study of how money, new products, markets and resources interplay to maintain the many versions of human society.
Our division of the field of Energy Economics is a mere convenience and discussions will be tucked in where they fit best.

The gallery on the left takes you to the four departments openers.

The gallery to the right takes you to stacks of reports. Economists write papers and books and make video presentations but tend not to give illustrated lectures as scientists and technologists do. The Libraries reflect this. It is important for economists, aid agencies, and government departments to keep up by reading these books.

World finances and economies are struggling. It will be 2020 before the western economies will recover to their position of 2005. The crash of 2007-8 showed that deep reforms are needed in the way economies work. This affects every part of our lives.

Here we just list some key questions and common opinions in each area. We seek more expert analysis from Economists.

FINANCE & ENERGY
Banks, Hedge Funds, Globalisation and ruthless searches for profit have clearly failed. Their 'business models' have become detached from the needs of society. Financial institutions are unable to fund energy projects without government commitments and guarantees.

Only 30% of mergers and acquisitions actually make an improvement for the larger enterprise. Takeovers fuelled by huge new debts appear to be just a mechanism for extracting large fees and personal benefits and for evading taxes. The business has to lower all costs and quality to remain solvent. There is a big difference between running on debt and running on investment.

Economic modelling has many unrealistic assumptions. Markets are not self correcting through considered adjustments. Deregulated industry will destroy the environments they exploit. There is no sensible model of human behaviour in economic models. Seeking understanding from statistics of data mountains is like using a stethoscope to diagnose a car engine.

A recent Google study shows a strong correlation between US word searches for debt and the rise and fall of the stock market. Publication of a daily Google 'debt' index would probably provide a catastrophic feed back into huge buying and selling sprees.

The Green movement has captured some 'high ground' with politicians which they are exploiting as part of an anti-nuclear agenda. We are looking at a debt fuelled take-over of the electricity business with governments as the underwriter.

INNOVATION & WEALTH
Discovery and innovation have been the primary engines for the growth of human society. These create new sources of wealth. Stephenson's Rocket train was first used by a colliery but within 50 years railway travel and transport spread around the world. Click the rocket to see the latest evolution of rail travel.

Almost every Nobel Prize in Physics and Chemistry has led to devices in common use. Every western household has 10-20 laser devices.

Rulers love weapons and the development of the atomic bomb gave an immense surge in the funding of science and technology. The USA, Europe and the Soviet Union established a system of national laboratories in many disciplines which continue to create new paths to industrial wealth. The UK has eliminated almost all its national laboratories.

Government investment in research has been necessary to break out from the slow incrementalism of industry Many of the discoveries are ready for commercialisation but remain unexploited. We show how the risk of loss has been reduced to a commercial level by all this effort.

MARKETS
Markets have been running for thousands of years. The emergence of assembly line and mass production techniques has made luxury goods available to all. Industrial civilisation allows for lifestyles only available to the nobility in previous times.
The plethora of goods and services available has made the analysis and understanding of markets very difficult. We are reduced to a few basic principles like:

(i) Markets will always adjust towards the optimal solutions for their pro ducts, manufacture, and distribution.

(ii) Even in a rising market some businesses will fail and others will perform much better than the average. The behaviour is seen as largely unpredictable so the only way to avoid heavy capital losses is to spread the risk across many businesses. This hapless logic extends to spreading risk across many markets, many countries, and many brokers with diverse funds.

(iii) Stock markets are subject to attacks of 'panic' or 'exuberance' when shares are sold off or acquired excessively. These episodes are viewed as being unpredictable.

(iv) Teams and individuals who are successful in profiting from market behaviours are declared to be clever and talented and worth arbitrary salaries and bonuses.

The results of these principles are so poor in practice that we may ask if Nobel Prizes in Economics can be revoked.

These notions are so firmly held that governments now try to create artificial markets for public services like Health, water, social security, the military, education, railways, roads, and almost anything else. These attempts seem to create as many new problems as solutions.

Here we focus on the world's Energy Markets and their confrontations with Governments.

ENERGY RESOURCES

This website addresses all the major sources of energy on the planet. Only humans were able to start and control fires for warmth, cooking, and security. Fire also produced pottery,the metallurgy of gold, copper, bronze and iron, and the chemistry of many other materials.

Water and wind mills have existed for thousands of years and are now evolved by modern technology into significant source of electricity.

The big move to coal started as the heat source for steam engines and then for electricity power stations. Liquid fuels from oil have a much higher energy density and allowed for small, powerful petrol and diesel engines.

Finally, the discovery of Fusion and Fission revealed the highest energy density fuels in the universe. These will take humanity into and out of our own solar system.

We have come to realise that all these resources are finite and all have environmental impacts.We are also aware that cleanup is far more costly than a system managed for minimum damage. We know enough to plan a future over millennia but are not smart enough to implement any plan which impedes near term profits.

The Economics of Energy Resources needs to be balanced between the short and long term requirements. Most of the discussion in the Economics Library is of course on the economics of resources today.
DOCUMENTS
City of London finance cntre
World leaders say ….
Overviews
GOLD BULLION
Bank of England prints money

FINANCE REPORTS
Elms control
Bullet Train; disruptive tech.
INNOVATION REPORTS
Merkel looks down on windmills
Lovins v UAE Nuclear Park
MARKETS REPORTS
opencast coal mine
EXXON loves escalade guzzlers?
RESOURCES REPORTS