The Myth of Fossil Fuel Subsidies- Ignorance, Misinformation, and Blatant Lies

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”

This idea, usually attributed to Joseph Goebbels, is central to propaganda and misinformation in all societies, not merely Nazi or Stalinist states.   It raises its ugly head in multiple ways in our otherwise enlightened society, not least in the propaganda spread by the Green movement.  Big lies, smaller lies, misinformation, ignorant assumptions passed off as truth, and illogical arguments, all feature in the call for an end to ‘taxpayer subsidies’ for fossil fuels.

The Australian Greens and their acolytes have been very vocal about ending fossil fuel ‘subsidies’.  A quick internet search reveals a green-sponsored organisation called Market Forces http://www.marketforces.org.au/ which has been promoting this meme.

Time for a Reality Check.

Ignorance: 

From the Market Forces website:

“How your taxes subsidise fossil fuels

There are a number of national tax-based subsidies that encourage fossil fuel production and consumption, adding up to a huge total of around $12 billion each year.

By far the largest contributor to the tax-based subsidies total is the Fuel Tax Credit Scheme, which provides around $6 billion worth of credits and grants to cover the tax paid on fuel to reduce its overall costs to heavy users. It is estimated that some 20% of these fuel tax credits go directly to fossil fuel producers. We have included the full amount as it all goes to supporting the consumption of fossil fuels.”

From the ATO:

“Fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) that’s included in the price of fuel used in:

machinery

plant

equipment

heavy vehicles

light vehicles travelling off public roads or on private roads.

The amount depends on when you acquire the fuel, what fuel you use and the activity you use it in….

Some fuels and activities are not eligible including fuel you use in light vehicles of 4.5 tonnes gross vehicle mass (GVM) or less, travelling on public roads.”

People who have never operated a business are unaware that these are tax credits for the expenses of operating businesses, in particular transport and off-road equipment.  Transport costs directly contribute to the cost of living, particularly in more remote areas, so tax credits are in effect a subsidy for ordinary Australians.  The fuel excise that we all pay was designed to raise money for road maintenance- including the roads that electric cars and bicycles use.  Operators of equipment that doesn’t use roads- farm and mining equipment, fishing boats, industrial plant, the things that actually earn money for the economy– should not have to subsidise the taxes of everybody else.

Market forces also nominate as “Subsidies for fossil fuels” Accelerated Depreciation concessions and concessional excise on avgas and jet fuel.  However aircraft don’t use roads either, and accelerated depreciation assists all business reinvestment- not just for petrol vehicles.  If you buy an electric car for business use, you can claim accelerated depreciation on it as well.

The people behind Market Forces are merely displaying their ignorance about running a business and how the economy actually works for their benefit.

Misinformation:

“Public finance for fossil fuels

The Australian government continues to support the expansion of the fossil fuel industry by using public funds to finance fossil fuel companies and projects.

…..

EFIC is Australia’s ECA, which is a semi-governmental financial institutions that provides loans, insurance and guarantees to support the international operations of local companies, or to projects that hold some national value. ECAs often lend far more than commercial banks and offer long-term, low-interest debt that makes a project much more bankable.

While EFIC doesn’t lend to local coal projects, it loaned over $1 billion to the massive Ichthys LNG project of the coast of Northern Australia at the end of 2012.

On top of this, EFIC provided a total of more than $400 million in finance to national and international fossil fuel projects in 2013 and 2014.

……

Australia also holds shares and plays a significant role in two IFIs, otherwise known as multilateral development banks, the World Bank Group and the Asian Development Bank. Through Australia’s involvement in these institutions, we have contributed a total of almost $300 million worth of finance to the global fossil fuel industry over the past two years.”

This is misinformation.  Loans have to be repaid at some point in the future so should be regarded as cost neutral over the long term.  As well, these projects promote much infrastructure other than “huge, dirty coal power developments”.

The Greens appear to be against not just fossil fuels, but any development that might be good for the human race- roads, railways, ports, electricity, all mining, mechanised agriculture- which the people of underdeveloped nations desperately need.

Finally, Blatant Lies:

Market Forces also identifies “direct handouts”:

“Direct contributions and handouts to the fossil fuel industry

There are a number of federal and state bodies and initiatives that directly contribute to the expansion and continuation of the local fossil fuel industry….

Geoscience Australia is a government body that engages in fossil fuel exploration activities as one of its major operations. With a specific focuses (sic) on offshore reserve development, Geoscience Australia also provides exploration data and other support to fossil fuel companies.

This federal government institution devotes $29 billion dollars to exploration annually, and this figure is added to by extra funding from within the national budget.”

$29 billion dollars?  You’d think somebody might have noticed!

From the Geoscience Australia website:

“Geoscience Australia is Australia’s pre-eminent public sector geoscience organisation. We are the nation’s trusted advisor on the geology and geography of Australia. We apply science and technology to describe and understand the Earth for the benefit of Australia.”

The 2014-15 Annual Report for Geoscience Australia shows expenditure of $198.8 million, offset by revenue of $59.2 million- a long way short of $29 billion!  And that $198.8 million is spent on many other projects besides minerals exploration, of which fossil fuel exploration is one part.

This is a blatant lie, and a big one.

Continuing:

“… capital injections to state-owned electricity generators. In 2014, these injections totalled more than $600 million”  in Queensland and Western Australia.

The authors fail to mention the millions in dividends that the Queensland government has stripped out of electricity providers over the past few years- does this mean Queensland taxpayers are being subsidised by fossil fuel?  From ABC News (7 October 2015):

“The Energex annual report, released last week, shows dividends paid to the State Government rose from $406 million in 2014 to $1.3 billion in the 2014-2015 financial year.

Alliance of Electricity Consumers lobby group spokesman Jonathan Pavetto told 612 ABC Brisbane Ergon dividends rose from $400 million to $1.9 billion over the same period.”

It seems the government got its money back.

Market Forces goes on to claim:

“The worst offender, Queensland, has spent over $2.2 billion of public money over the past two years on rail and port infrastructure, much of which supports fossil fuels and coal exportation in particular.”

None of this money (apart from routine maintenance) has been spent on coal lines- none have been built in the past five years.  The Greens and their sympathisers are very fond of public transport, especially electric trains.  $4.4 billion is to be spent from 2013 to 2018 on suburban trains for the south east corner around Brisbane.  More than $170 million was spent on the existing Citytrain network in 2014-15 alone, plus the new line to Redcliffe worth $1147 million, $300 million contributed by the Queensland government.  Queensland Rail’s 2014-15 Annual Report lists considerable expenditure on regional lines- not the coal network- replacing bridges and improving track.

Rail and port expenditure can be regarded as an investment meant to raise more than is spent.  Queensland’s mineral rail lines for years have subsidised passenger services, including the Citytrain network in Brisbane.  QR made a profit of $223 million in 2014-15- very largely due to mineral freight traffic.  A dividend of $179 million is payable to the Queensland government in 2016.

As Government owned corporations, all ports “operate according to commercial principles, raise their own revenue and make dividend and tax equivalent payments to the Queensland Government.”  The same applies to Queensland Rail.  Investment in coal terminals is a commercial investment decision, not a subsidy or a handout.  Taxpayers can expect to get their money back.

Far from taxpayers subsidising fossil fuels, coal and gas extraction subsidises taxpayers through mining royalties, rail freight and port charges, and taxes.

Conclusion:

The Market Forces website is full of the misinformation, ignorance, and outright lies that Global Warming Enthusiasts delight in using.

But what else can you expect from an organisation that is an affiliate of Friends of the Earth, and many of whose team have backgrounds with Greenpeace and the Greens.

Antarctic Trends

Data from UAH Version 6.0 show the South Polar region to be unique in that it has a Pause, if not very mild cooling, for the whole of the satellite record, since December 1978. In this post I dig in a little deeper, and also look at surface data from Australia’s Antarctic bases.

Fig.1: Monthly TLT for the South Polar region (60- 85 S)

Fig. 2: Three Monthly TLT

Both plots show no evidence of any warming. However, Land areas are warming:

Fig. 3: SP Land: 3 month means

While the Ocean area is cooling:

Fig. 4: SP Oceans: 3 month means

Summers are warming:

Fig. 5: South Polar Summers (Yearly)

While winters are cooling rapidly:

Fig. 6: South Polar Winters

Especially Ocean winters, when the sea ice is at its greatest and thickest extent.

Fig.7:  SP Ocean Winters

Perhaps the sea ice insulates the atmosphere from the water below the ice? If so, in summer, with sea ice extent much reduced, the atmosphere above the ocean should be warmed much more than above the land, which is almost totally covered by ice. Let’s check:

Fig.8:  SP Ocean Summers

Fig.9:  SP Land Summers

Nope- TLT above land area is warming at four times the rate of ocean areas.

It’s not a great mystery. Here’s why.

We should not read too much into whether individual months create records or not, nor should we stress about the seasonal differences. Here’s an example of individual Octobers.

Fig.10: Octobers from 1979-2015

Note the rising and falling pattern: a series of below average Octobers is followed by a series of above average Octobers.  A trend using only Octobers would show warming, as the record starts with below average Octobers and ends with above average. (Just like some global datasets!)

These patterns are evident, but with different values, in all months, which is why winters appear to be cooling and summers appear to be warming.

Fig.11:  SP Ocean Junes from 1979-2015

The most we can say is that the long term trend of ALL months shows no evidence of any warming, i.e. a Pause.

So is this just an artefact of the fairly short satellite record? We can check against surface data from Australia’s Antarctic stations at Mawson and Davis. (There is insufficient overlap to make a useful splice between closed and open sites at Casey.) These stations are on the coast far from the Antarctic Peninsula.

Fig. 12:  Monthly mean temperatures, Mawson Base

There is a Pause, or slight cooling, over the past 62 years.

Fig. 13: Monthly mean temperatures, Davis Base

At Davis, a Pause, or slight warming, over the past 47 years.

The Pause in the South Polar region is real.

The Pause Update: March 2016 (Complete)

The complete UAH v6.0 data for March have been released. I present all the graphs for various regions, and as well summaries for easier comparison.  The Pause refuses to go away, despite greatly exaggerated rumours of its death.

These graphs show the furthest back one can go to show a zero or negative trend (less than +0.1C/ 100 years) in lower tropospheric temperatures. I calculate 12 month running means to remove the small possibility of seasonal autocorrelation in the monthly anomalies. Note: The satellite record commences in December 1978- now 37 years and 4 months long- 448 months. 12 month running means commence in November 1979. The graphs below start in December 1978, so the vertical gridlines denote Decembers. The final plotted points are March 2016.

As I intimated in the previous post, there have been some small changes in the data. Some slope values have changed slightly.

[CLICK ON IMAGES TO ENLARGE]

Globe:

Sorry, GWEs, The Pause, for more than half the record, is still an embarrassing reality! For how much longer we don’t know.

And, for the special benefit of those who think that I am deliberately fudging data by using 12 month running means, here is the plot of monthly anomalies, which shows that The Pause is over by my rather strict criterion:

I will continue posting these figures showing these scarey trends from monthly anomalies. The Pause will return sooner with monthly anomalies than 12 month means of course.

Northern Hemisphere:

The Northern Hemisphere Pause refuses to go quietly and remains at more than half the record. It may well disappear in the next month or two.

Southern Hemisphere:

For well over half the record the Southern Hemisphere has zero trend.

Tropics:

Tropical Oceans:

Northern Extra Tropics:

The Pause by this criterion has ended in this region, however note that the slope since 1998 is one tenth of the slope for the whole period.

Southern Extra Tropics:

Hmmm!

Northern Polar:

The Pause here has shortened.

Southern Polar:

As the trend exceeds -0.1, this region is cooling for the entire record.

USA 49 States:

Australia:

The next graphs summarise the above plots. First, a graph of the relative length of The Pause in the various regions:

Apart from  the North Polar, whose Pause is shorter, and the Northern Extra Tropics, whose Pause has ended, all other regions have a Pause of 18 years or longer- including the South Polar region which has been cooling for the whole record,

The variation in the linear trend for the whole record, 1978 to the present:

Note the decrease in trends from North Polar to South Polar.

And the variation in the linear trend since June 1998, which is about halfway between the global low point of December 1997 and the peak in December 1998:

The only region to show strong warming for this period is the North Polar region: the Northern Extra Tropics has very mild warming: all other regions are Paused or cooling.

12 month means will continue to grow for the next few months, so the Pause may disappear shortly, and may not reappear until early 2018.  The impact of the coming La Nina will be worth watching.

The Pause Update: March 2016 (Preliminary)

Well my last post certainly stirred up some Global Warming Enthusiasts who found it difficult to get their heads around the continued existence of The Pause.  What will they make of this month’s update?  The Pause refuses to go away, despite greatly exaggerated rumours of its death.

Dr Roy Spencer has just released UAH v6.0 data for March.  This is a preliminary post with graphs only for the Globe, the Northern Hemisphere, the Southern Hemisphere, and the Tropics.  Other regions will be updated in a few days’ time when the full data for March are released.  (These preliminary figures may change slightly as well.)

These graphs show the furthest back one can go to show a zero or negative trend (less than +0.1C/ 100 years) in lower tropospheric temperatures.    I calculate 12 month running means to remove the small possibility of seasonal autocorrelation in the monthly anomalies.  Note: The satellite record commences in December 1978- now 37 years and 4 months long- 448 months.  12 month running means commence in November 1979.  The graphs below start in December 1978, so the vertical gridlines denote Decembers.  The final plotted points are March 2016.

Except for the Tropics, where The Pause has reduced by three months, in other regions it has remained at the same length.

[CLICK ON IMAGES TO ENLARGE]

Globe:

Sorry, GWEs, The Pause is still an embarrassing reality!  For how much longer we don’t know.

And, for the special benefit of those who think that I am deliberately fudging data by using 12 month running means, here is the plot of monthly anomalies, which shows that The Pause is over in monthly anomalies by my rather strict criterion:

I will continue posting these figures showing these scarey trends from monthly anomalies.  The Pause will return sooner with monthly anomalies than 12 month means of course.  Meanwhile, shudder at the thought of 18 years and 4 months with a frightening trend of +0.15C +/-0.1C per 100 years.

Northern Hemisphere:

The Northern Hemisphere Pause refuses to go quietly and remains at nearly half the record.  It may well disappear in the next month or two.

Southern Hemisphere:

For well over half the record the Southern Hemisphere has zero trend.

Tropics:

The Pause has shortened by three months, but is still well over half the record long.

In a few days the full dataset will be released and graphs for the other regions will be plotted as soon as possible.  As I will be doing Jury duty for the next four weeks, posts and comments are likely to be few, and brief.