Started Hosted Blog

Started Hosted Blog

Recently my blog that I hosted myself at k-lenz.name/LB for close to 20 years went down with a database error.

I considered investing some time to find and fix the error. Then I decided I would rather use that time to start over with this new hosted blog.

Leave the technical side to people who know what they are doing and pay a small amount of money.

I will probably figure out how to point the old address to this new one. I will also need to figure out how to deal with all the old content.

20 Gigaton is 50 btc

The solution to the global warming emergency is to radically reduce fossil fuel production by a long term production schedule modeled on the Bitcoin schedule.

That one started out with 50 bitcoins every 10 minutes, which is now down to 6.25 after the third halving in May of this year.

Since this is my proposal and my blog, I get to decide on the fossil fuel production schedule. I want to start from 20 gigatons of CO2, which would be the equivalent of the 50 bitcoins when the system started.

I will take a moment to explain that number. Then I will write a bit about how to distribute the production quota.

In 2018, global CO2 emissions were around 36.6 gigatons of CO2.

Around 55 percent of that was absorbed by carbon sinks like forests and oceans, leaving only about 45% to accumulate in the atmosphere and raise the record to 417 ppm in late May.

That means a little over 20 gigatons were absorbed by sinks. So if we start out with that number, we emit exactly as much as was absorbed in 2018. That in turn would mean avoiding to dig the hole deeper and increase the ppm value.

I also note that starting with 20 in 2020 is easy to remember, just like the three goals of the EU for 2020 (reduce CO2 emissions and energy use by 20 percent and get a 20 percent share for renewable).

Then it would be fun to do exactly the same as Bitcoin. Go to 10 gigatons 4 years later and keep going down by 50% every four years.

That would be a long term production schedule which would enable people to plan ahead.

And it would be the kind of radical change that would be required. Sorry, but the “solutions” tried until now just fall way short of having any chance of working.

This would also give a large boost to fossil fuel prices. Imagine a world where oil production is guaranteed to go down by half every four years. It does not take any financial genius to understand that the oil would be worth way more in such a world.

That of course leaves the small problem of who would be in charge of issuing and distributing the production quotas. If this problem is impossible to solve, I might as well be talking about creating a second moon for my new world (hello 1Q84).

I think that this problem can be solved by looking at what Bitcoin did. Just model the production quota issuing and distributing on Bitcoin.

Volker Quaschning Wrong

That is a “man bites dog” headline. Stop the presses, I found a point where I disagree with his opinions. Does not happen often.

Quaschning recently blasted the new German hydrogen strategy, saying it is only done in order to misdirect people away from the government’s renewable energy policy failures, that hydrogen is extremely expensive and has no chance to reach the climate goals.

I think that is a bit too harsh. Like Jakob Schlandt here.

This is a new policy that will invest 9 billion Euros. That is much closer to the kind of money people should throw at the climate emergency. Of course orders of magnitude too small amounts, but it is a good start.

I agree that the renewable energy policy in Germany in recent years was a disaster. But these 9 billion certainly will not be invested in glossy PR brochures. They will start moving things. And I for one root for their success.

I am reminded of nuclear fans 10 years ago objecting to renewable energy with insightful comments like “the sun does not shine at night”, being mainly motivated by the fact that renewable energy is in competition with nuclear. This feels like Quaschning does not like hydrogen because he thinks it detracts from the renewable energy policy he favors.

And it is true that green hydrogen is expensive now. But so was solar in 2000. Wait a couple of years and see what those 9 billion in initial investment can do.

I think hydrogen will be needed a lot in a renewable energy future. Mainly for the time slots and areas where demand of the grid is not enough to use all of the supply. If your grid does not exist yet or the power line capacity is not enough to transport all the renewable energy, it will be very useful to be able to store the energy. And it does not matter much how high the cost is, because the alternative is always to just throw away the electricity.

I also disagree with the idea that hydrogen will not help solving the climate emergency. It won’t be able to do so alone, of course. All green hydrogen will always need renewable capacity built.

But it may very well be an important piece of the puzzle.

If this hydrogen strategy is as successful as the 2000 Law on Priority for Renewable Energy, Germany will have scored the second decisive goal in this match against the climate emergency.

I for one hope that happens as one part of the European Green Deal.

German Hydrogen Strategy

According to this Handelsblatt article by Klaus Stratman, the German Cabinet will approve the Hydrogen Strategy that has been discussed for some time now tomorrow.

I have been writing lots of posts about hydrogen on this blog over the years. So I welcome the fact that Germany will put some effort in getting green hydrogen to scale.

Green hydrogen is of course hydrogen made from electricity that is generated from renewable sources. Once you have massive amounts of that, you can forget about the problem of having not enough electricity on a windless winter night. You can also displace fossil fuel from industrial processes like making steel.

There are lots of ideas floating around. Most of them seem to try again to make the auction model work that has failed so clearly in the renewable energy sector.

But anyway, there will be some substantial money flowing into this direction. The article mentions 7 billion Euro for hydrogen in Germany and another 2 billion for “international partnerships”.

I wonder if the latter might include some cooperation with Japan. Japan is also interested in solutions to the climate emergency. Japan also has some interest in hydrogen. Japan is also spending massively to restart the economy after the Corona crisis.

One interesting thing about hydrogen is that you can ship it around the globe. While there are no power lines connecting Japan and Germany, you could easily ship hydrogen in either direction over that distance.

So if you meet in the middle, say in the Mongolian desert, start some massive wind energy investments and start splitting some water, you could ship the resulting hydrogen to both Germany and Japan from there, even without any power lines available yet.

Anyway, it will be interesting to see what gets actually adopted tomorrow.

German Offshore Wind Law Draft

Just published by the Federal Economy Ministry and approved by the Cabinet. Germany wants to achieve 20 GW until 2030 and 40 GW until 2040.

As usual now prices are set by auctions, with a new twist. Since people are starting to bid 0 cents (meaning no feed-in tariff payments at all) the new law wants to have a second round of bidding on the costs of the power lines. Bidders who are ready to pay more for the privilege of connecting their project to the grid will be more likely to succeed.

The law also wants to coordinate the process of building power lines with the process of building offshore wind to avoid having wind projects finished without power lines.

Actually, that would not be a problem now. You can always mine bitcoins until the power line is finished, which is a much better way of using the energy than just producing nothing while waiting. And the really interesting thing would be to start making green hydrogen with these projects. You don’t need a power line in that case to ship the energy and you can ship it wherever you want world wide.

Muttitt on OPEC

Greg Muttitt has published a chapter on “What role for OPEC in the last generation of oil” in the 2020 “Handbook of OPEC and the Global Energy Order” which is available behind a paywall of GBP 175.

Muttitt kindly mailed me his contribution, so I was able to read it before buying the book (I intend to do so later).

As is clear from the public blog abstract here, the author shares my opinion that production limits are one way to solve the climate emergency. OPEC is in the business of limiting oil production over quotas. So it was interesting for me to learn from a specialist in the field.

The picture is not pretty. OPEC has tried to delay climate policy, even denying the science at earlier stages. They do not have much power to solve the problem by themselves, since many oil producers are not members and many members depend massively on the oil export revenue.

The article does contain some good news. OPEC has evolved their positions. And there may be hope they adopt a reasonable policy.

But what might that be? What could OPEC actually do about reducing supply?

There is one thing that all OPEC members and all oil producing non-members can easily agree upon: Reducing production is a worthwhile goal and someone else should reduce. The trick is to agree about who needs to cut how much.

Recent unfortunate developments of the oil price showed that the need to reduce production in order to sustain price may be even more urgent than the need to reduce it for climate protection. The climate emergency will only end human civilization a couple of decades later, while an oil price collapse may have very severe consequences for producers immediately.

So how should the burden of reducing production quotas be allocated? Obviously OPEC alone can’t solve that, since OPEC controls only a part of the market.

It was also interesting to note that the Ecuador Yasuni-ITT proposal of leaving oil in the ground in exchange of receiving international assistance worth half the value of the resource was resisted by Germany, and failed for that reason. If so, that may make it difficult to just sell non-production assurances on the market, because no such market exists.

As noted earlier, my solution to this problem is to have a market for production quotas which would work over a new cryptocurrency pegged to bitcoin mining. We know that bitcoin mining reliably reduces the mined amount by half every four years. We know that there is no need to trust any organization like OPEC to achieve that. We know that it would be very easy to allocate the production quotas over normal market forces.

I have no idea if this would actually work. But reading this chapter has confirmed me in my opinion that any solution based on OPEC does not have much of a chance either.

German EEG Reform Decided at Cabinet

Now the German Cabinet has decided to go ahead with the idea of radically changing the system of financing renewable energy in place since 20 years. In the future, much of the revenue will come from the federal budget. And that in place will come from a price of 25 Euro per ton of CO2.

The problem with that is of course that this may destabilize the system. With a large bill for COVID related expenses coming up, it may be difficult to come up with the necessary funds in every fiscal year.

Also, this makes the whole system “state aid” under EU law, giving the EU Commission veto power over all German legislation in the field. Which would be a bad idea with the less than stellar record of the Commission, which was one of the harmful forces pushing for the change to an auction system.

Unfortunate, but the main success of the EEG is a done deal. Bringing cost way down in the last 20 years is a success that can’t be reversed, whatever happens in the future.

JK Rowling Does not Need to Understand Bitcoin

She just said she does not understand Bitcoin on Twitter and asked people to explain. And got lots of answers in a short time.

I don’t understand Bitcoin either. At least not at the expert level some people who are concentrating full time on it.

But that does not matter much.

The unique thing about Bitcoin is that you need to trust no one to use it.

The common thing about Bitcoin is that you don’t need to understand it to use it. Do you understand how the CPU in your personal computer works? Do you use a computer?

So Rowling could go ahead and buy some bitcoins right now. On the other hand, she is not necessarily the target audience for the project. Someone in her position is well served by the traditional financial system, or any financial system for that matter.

Bitcoin shines when the alternatives are of dubious value. That’s why search interest for Bitcoin beats interest for Harry Potter in Venezuela right now.

And it beat Harry Potter by a factor of about five for a month in late 2017 in worldwide search interest. And it may well get there again.

But to answer to the request of “explaining Bitcoin” briefly:

It is the native currency of the Internet. Trustless, P2P and international. Any civilization that like humans has distributed computing like the Internet will obviously adopt a blockchain currency.

EU Court of Justice Decisions Binding Unconditionally?

Sven Giegold just reported on a fast answer to his letter to EU Commission President von der Leyen.

He is the leader of the Green Party in the European Parliament and does not agree with the recent decision of the German Constitutional Court on the PSPP program.

Von der Leyen approves of his position. She writes that “obviously” decisions of the EU Court of Justice are binding for Member States courts. And she says that the Commission is now reading the decision and is thinking about starting an infringement procedure.

I would recommend thinking real hard about starting such a fight.

It may be true that the Commission could win. Obviously the Court of Justice will not be specially inclined to approve of the idea that its own 2018 decision in the matter is, in the words of the German Constitutional Court, “not comprehensible and must be considered arbitrary from an objective perspective”.

Then what? Try to get Germany to comply with that, force the German Constitutional Court to obey? How is that supposed to work? Over financial sanctions under Article 260?

I also recall that this fight is about how much Germany is supposed to pay for other Member States, especially under the current coronavirus crisis circumstances. There is no way at all to force the German Parliament to come up with even one Euro for this effort. And there is no way to release German taxpayer funds without the approval of Parliament, necessary for each measure separately.

And the idea that the EU Court of Justice commands unconditional obedience from all Member States courts is “obviously” wrong, at least as Germany is concerned. Under the German Constitution, there are some basic values that can not be compromised under any circumstances (Article 79). And under Article 4, Paragraph 2 of the Treaty on the European Union, these basic values command respect from the EU institutions.

Any EU institution leaving that premise will find it difficult to get support in Germany. That includes the Court of Justice, who like the Commission is bound by this guarantee.

Michael Moore Admits Failure

Michael Moore just posted about his anti-renewable propaganda film.

As he writes:

“we have failed”

That is certainly true. That film failed to grasp basic facts on renewable energy. That film attacks Bill McKibben in bad faith. That film tries to slow down the only possible way to reduce fossil fuel use.

While it is true that the transition to renewable energy should be much faster, the last thing we need for that to happen is attacks on renewable. Leave that to the fossil fuel and nuclear crowd.

On the other hand, as I said before, all these talking points have been debunked over and over. There may have been one or two people taking them seriously ten years ago, when it was still open to debate if renewable energy would be enough to solve the problem.

Now I think that Moore not only failed to provide any useful information in his film. I also think he failed in his effort to slow down renewable energy.

German Green Decision on Abolishing Renewable Law

As Klimareporter explains, the recent proposal by German green politicians to abolish the law on renewable energy has found a majority at their recent party convention.

They are going after one of the key elements of the 2000 law, which is funding by electricity users, as opposed to funding by taxpayers.

They want to reduce the surcharge by 5 cents by July of this year, passing the bill for that to the German federal taxpayer. Fortunately, these Green politicians are not now in charge, the Green party is in opposition.

Again, this is a very bad idea. The German federal budget will be massively strained by the corona crisis. Even if the Federal Government listens to the German Federal Constitutional Court, who just put a brake on the idea of Germany paying for the big corona-deficits in other EU Member States’ budgets, contrary to the present way of handling these costs, there is no guarantee that the necessary funds can be found.

This idea was rejected for a reason when the law was enacted in 2000.

At the time, people did not know that the EU Court of Justice would see this as decisive for the question if Member State legislation on renewable energy needs EU Commission approval, effectively denying the German legislators another important power and transferring it to the EU, with the consent of said German legislators very much in doubt.

But now we know. The Court decided in March last year that the present system is not State Aid because it is not financed by taxes. Changing that as this Green proposal wants gives the EU Commission again veto power over German renewable energy law.

At the time the reason was simply that the system would be way more stable that way. If you need to find money in each year’s federal budget, there is no way for investors to be sure they get the tariffs promised for 20 years.

I still think that is a valid concern.

On the other hand, if this Green proposal succeeds in getting rid of one of the most important elements of the 2000 law, the damage is mitigated a lot by the simple fact that the law has been working as intended for more than a decade. Even if all federal support for renewable energy stops tomorrow, nothing can change the massive reduction in prices already in place.

But it still feels odd to see the Green party of all possible actors to disregard the warning of Hans-Josef Fell and push for this reckless experiment. Not quite as disappointing as having Michael Moore publish an anti-renewable propaganda piece (and get massive attention for that garbage), but it comes close.