1. Rod,
    Can’t see the fist pic on GoogleChrome. OK on Safari but I have to click to get it … The other pics do not need a click…

  2. William Tucker said that we were no longer building stuff in North America. We are losing our manufacturing skills.

    For example, welders are needed for nuclear plants and are hard to find in the US.

    When naysayers are vowing to block the UK with its nuclear renaissance, they are not only tackling the environment and cheap energy; they are killing a will to re industrialize Britain.

    It is time to realize that the myth of the educated and the service industry cannot fill all the jobs. Look at Europe. Building stuff is good too. But you need reliable and cheap energy.

    Germany has chosen to de industrilize itself. Let’s hope the UK walks away from an European Union that is too heavily influenced by German righteous thinking.

      1. How is Germany choosing “to de industrialize itself” (despite evidence to the contrary)?

        Apparently, your “evidence to the contrary” is that German industrial production has increased at a net rate of only 0.4% per decade in the past five years. During the 1960’s the rate of increase in Germany was almost 80% per decade.

        I don’t know what bizarre point you think that you’re trying to make, but please keep going!

        1. @Brian Mays.

          And how is this evidence of deindustrialization, as you suggest?

          If you need some help, you might want to consult the following:

          Deutsche Bank: “German Industry: Tangible Production Growth in 2014.”

          McKinsey & Company: “Manufacturing the future: The next era of global growth and innovation.”

          I really can’t find a source that confirms what Daniel is saying. We compare countries of similar scale and advanced economy. Germany stands at the top of the list. France and UK are both in economic hardship or decline. Germany is bucking the trend. In 2010, “manufacturing sector accounted for 18.7 percent of GDP in Germany and 11.7 percent of GDP in the United States.” It has a current account surplus (which is not a sign of de-industrialization). Manufacturing accounts for more than 80% of it’s exports. It’s industries are very efficient.

          German manufacturing is exempt from EEG surcharges (for now). Smaller businesses get subsidies. Given the scope and history of these timely and strategic choices in business reform, investment and labor markets, much of it to favor industrial and export production, I’m not sure how you can say Germany is “choosing deindustrialization.” They appear to be doing exactly the opposite. Energy policies are focused on advanced technology development and innovation, and are consistent with this. If anything, the German economy is over-industrialized (as some here have suggested), and could benefit from a bit re-balancing (especially in growth of wages).

          I’m not sure why you say my points are “bizarre.” I feel I have been relatively straightforward and clear.

          1. @EL

            Looking backward to statistics and forward via official statements of intent, it’s difficult to disagree with you.

            However, I believe that Germany has chosen a path that is fraught with risk. This year, Germany will still produce about 100 billion kilowatt hours of nuclear electricity. The cost of electricity is already increasing, even though it is getting away with giving industry an enormously good deal that does not reflect its true share of the cost.

            As the remaining nuclear plants are shut down, Germany will become more dependent on fossil fuels. It’s much vaunted renewables will never be reliable; they will be able to replace the nuclear portion when the wind and sun are favorable, but that is not all that often in Germany.

            Germany can remain industrial as long as it can keep power rates low for industry, but its neighbors and other EU community members are gong to be putting a lot of pressure on Germany over its rising emissions and its unpredictable electricity export/import demands.

            It still seems like seppuku to me, but I guess we’ll see. It is not a path that I recommend and it is a path that I would fight ever step of the way if suggested here.

          2. Rod
            As the remaining nuclear plants are shut down, Germany will become more dependent on fossil fuels. It’s much vaunted renewables will never be reliable
            Even with the present reduced renewable installation rate they can close their 9 NPP’s in the period until 2023 and still not be more dependent on fossil.
            And after grid adaptation (~2016) the rate will rise again.

            Germany has chosen a path that is fraught with risk …renewables will never be reliable
            Since the share of renewable (a.o. wind+solar) became substantial, electricity supply reliability for customers doubled. The annual total outage time went down from 30min. to 15min. In nuclear countries UK, France it is 60min.

            There is no discussion about reliability in Germany as all experts are convinced 100% renewable with (pumped) storage can deliver excellent reliability, also due to far better distributed electricity generation.

            Germany spent ~$200mln on consultancy studies in the nineties before they decided in 2000 to follow this Energiewende scenario (50% renewable in 2030, 80% in 2050).

            other EU community members are gong to be putting a lot of pressure on Germany over its rising emissions
            For sure not as non of them reached the Kyoto targets, while Germany surpassed them already.

            its unpredictable electricity export/import demands.
            Wind and solar electricity supply is better predictable than big (nuclear) power plant supplied electricity. As such big power plants sometimes do fail in a second, more spinning spare etc is needed.

            Furthermore, they have (enough) pumped storage capacity to absorb fluctuations. Practice shows that Germany is helps nuclear France with sudden needs if >2 NPP’s are off, while it becomes cold.

          3. My problem with German energy “research” Bas is they lack a unbiased critical approach. You illustrate that propensity gloriously but also I dont really trust their economic numbers either.

            Beyond that, two ongoing challenges illustrated in the following stories:

            Germany miscalculates

            Germany’s population will decline to 65-70 million by 2060. That would be as much as 17 million fewer residents, or a decline of 15% to 21% within 50 years.

            Within that population, the balance will shift significantly. At the moment, those aged over 65 are around 20% of the total population.

            In 2030, the group of persons aged 65 and older will account for 29% of the total population; in 2060, every third person (34%) will be at least 65 years old. ( http://www.economist.com/blogs/buttonwood/2013/11/demography )

            FT: Grexit or Bankruptcy for Greece Within the Next 4 Years

            The Financial Times article was entitled “Germany’s coalition will have to break promises.” It characteristically mentions that the leaders of the ruling coalition would not follow through with their promises to the German voters because there is “a lack of preparation by the political class for what will hit it in the next four years. The big threat to Germany over the next four years is not demography but the unfolding eurozone debt crisis. No matter which crisis resolution scenario prevails, some promises made to the electorate are going to be broken.” ( http://greece.greekreporter.com/2013/12/02/ft-grexit-or-bankruptcy-for-greece-within-the-next-4-years/ )

            The higher costs they have incurred in energy while increasing pollution are going to be a added stress in coming difficult times. The German century is inevitably nearing its end. Low energy, no frontiers, no plans for expansion and virtually no growth.

          4. Don’t discount biomass from foreign sources to play a big role in their Energiewende. It’s far more reliable than solar and wind. Just import shiploads of trees from the US, Canada, and Brazil, then burn them in FBCs or cyclone furnacea or gasify them and route the syngas through a combustion gas turbine or ICE. There’s more than enough biomass throughout the world to power a state Germany’s size.

            It will be amusing when their green transition is a source of deforestation worldwide. But, well, they wanted this and, sometimes, you get what you want.

          5. No, I do not trust German financial numbers:

            German ministers used Irish shell firms to balance budget

            Mr Eichel’s successor, Mr Steinbrück, continued the practice – covering the state’s pension liabilities with securitised pension obligations. To save taxes on the transactions, Berlin set up further companies in Ireland, named German Postal Pensions Securitisation 1 and 2. ( http://www.irishtimes.com/business/economy/german-ministers-used-irish-shell-firms-to-balance-budget-1.1613637 )

          6. Germany has over 7.6 trillion euros in pension liabilities. Its GDP is around 2.5 trillion euros.

            Its main pension vehicle is a pay as you go system – funds are not saved or invested.

            Smaller more private funds exist but who knows what the funding level is.

          7. @Dave
            green transition is a source of deforestation
            So only sustainable wood (woods owners committed to replant).
            But still this generated debate because of the transport fuel. That makes electricity from wood only ~95%(?) green. Which implies it has no big future as it is ‘sure’ that after 2050 the new target will become 100% renewable electricity (my estimation). Few months ago I read a decision not to extend the use of biomass (cannot remember where).

            The debate about upgrading the 80% renewable electricity 2050 targets is warming, as shown by starvinglion who mis-interpretated the pdf slightly. Though published by the Umweltbundesamt, it is only a contribution to the debate about a 95% GHG reduction in 2050 concerning all energy in line with some targets of the greens (assume many greens work in such environment agency).

            I doubt whether Germany will reach their own target of 40% GHG reduction in 2020 (Kyoto is 20%). Not impossible, but then the grid upgrades really need to speed up. This summer Merkel installed a new law which tackles the NIMBY delays as far as possible in a democratic society.

            There is no discussion whether 100% renewable electricity (with reliable supply, etc) is possible. The last study of 2010 confirmed it again (after the studies of the nineties) and advocates an upgrade of the 2050 target from 80% renewable electricity towards 100%.

            I assume intellectual Germans feel they are getting to far behind Denmark, which has 100% renewable for all energy in 2050.

          8. @John
            Thought, this was an energy blog. Not sure what you try to tell with these here well-known economic/political issues. My opinion:
            Population decline
            A debated issue since 2000. If it becomes a real issue (which I doubt very much), Germany can open the door for students and (intellectual) immigrants further.

            Estimation range that we get 0%-60% of our money back. The euro-zone policy regarding bail-outs is in discussion.

            My opinion: no help at all is best. So governments can no longer lend so much (or have to pay impossible interests). Bankruptcy is preferable as history shows that the deep crisis creates real restructuring and hence fast recovery. Greece did little last 3years as it was not absolute necessary. So they still are not competitive.

            lower retirement age (63) for people that worked 45years
            The crisis in the eighties also rising (youth) unemployment. Then we decided:
            – Important for the youth (our future) to have work.
            – No more work will be generated shortly in such ‘crisis’ situation. Even without crisis the volume of work to produce the same amount of goods etc will go down due to automation.
            So the logic decision to distribute the available amount of work better among the population. Hence retirement for those who wanted with 61years (80% of salary until 65, then pension), and employer stimulation to hire youth. That helped great!

            Now we forgot and did the opposite. Pension from 65 towards 67, etc.
            And of course, as the volume of work did not rise, huge unemployment under our youth.
            And no speedy end to the crisis.
            Our right wing government even took other measures that deepened the crisis such as raising taxes, creating insecurity about pension levels (so people start to save more money), less mortgage tax deductions (so now people pay them off), etc. Just following the recommendations of IMF and directions of EU as obeying cows.

          9. And how is this evidence of deindustrialization, as you suggest?

            EL – I suggested nothing of the sort. In spite of your obvious character flaws, please at least have the decency to attribute claims and suggestions to their proper owners. That was Daniel’s claim, not mine, and his claim was not limited only to Germany.

            Since you didn’t understand the first time, I’ll explain it again. All I suggested was that your historical evidence clearly didn’t support the contrary claim that you made.

            The supplementary “evidence” that you have provided, while speculative in nature, seems to indicate that German industry is merely treading water, and this is before the consequences of the latest phase of German energy “policy” (more like energy dogma) have had any chance to take effect.

            It still seems like seppuku to me, …

            Rod – No, that’s more appropriate to describe energy policy decisions in Japan over the past couple of years. 😉

            German energy policy decisions remind me of some of their other bad decisions, like deciding to invade Russia, not once, but twice in the twentieth century. I predict that recent German decisions will result in the Russians having the last laugh in the twenty-first century.

            Russia is serious about energy. Germany is still playing with tinkertoys.

          10. EL – I suggested nothing of the sort. In spite of your obvious character flaws, please at least have the decency to attribute claims and suggestions to their proper owners. That was Daniel’s claim, not mine, and his claim was not limited only to Germany.

            @Brian Mays.

            What are you talking about? I made a claim that evidence runs contrary to Daniel’s statement that Germany is undergoing or choosing deindustrialization. You took issue with this evidence. It now appears that you agree with my general statement, and that “evidence to the contrary” does indeed suggest Germany is maintaining an industrial position (despite significant regional and global headwinds).

            Can you please make up your mind? It appears you are confusing many people here (perhaps even including yourself)?

            You wrote:

            a net rate of only 0.4% per decade in the past five years

            I’m wondering if you could explain this to us. A great deal appears to have become garbled in the translation.

          11. It appears you are confusing many people here …

            EL – Once again your evidence is less that satisfactory. The only person who appears to be confused is you, so “many people” = you. But at least on one point we can firmly agree, you are confused.

            “a net rate of only 0.4% per decade in the past five years” … I’m wondering if you could explain this to us. A great deal appears to have become garbled in the translation.

            No translation is required, just some simple math. I used your link. I downloaded the data used for the graph that you claimed as “evidence.” From these data, I determined that the industrial productivity rose by 0.2% from September 2008 to September 2013, the latter date being the latest value in the series.

            Note that 0.2% per five years is 0.4% per decade. This isn’t a difficult calculation.

          12. Note that 0.2% per five years is 0.4% per decade.

            @Brian Mays

            So you’re making up numbers now to support a flawed argument?

            The growth rate for the last decade is 24.5% (not 0.4%). When there are real numbers available, why use made up hypothetical ones. Yes, we all understand there was a global recession that took a sharp turn around September of 2008. Was there anything else you wished to bring to our attention by this unusual and fanciful math?

            2003-09-01 87.2087175188600
            2013-09-01 108.5331098072090

          13. So you’re making up numbers now to support a flawed argument?

            EL – The only think that is being made up is that lie you just told.

            Everything that I have written is entirely accurate.

            For what it’s worth, there are the historical numbers for increase in industrial production by decade:

            1960’s 79%

            1970’s 26%

            1980’s 15%

            1990’s 7% (probably an effect of reunification)

            Industrial production rapidly increased in the first part of the 2000’s, increasing at a rate of 40% per decade from 2000 to the beginning of 2008. However, nobody that I am aware of, including Daniel, is claiming that Germany decided to deindustrialize ten years ago. So why are you using ten-year-old numbers? Do you really think that is relevant to anything?

            If anything, it’s more logical to presume that this increase in industrial production was a major factor in convincing the Germans to cancel their planned nuclear phase-out in 2009.

            As for the severity of consequences of the reintroduction of the phase-out resulting from a fit of hysteria over the tsunami in Japan, only time will tell. Certainly, we will not know how bad it will be by looking at old figures covering a period of time when all of the German nuclear plants were running and performing well.

          14. EL – The only think that is being made up is that lie you just told.

            @Brian Mays

            I didn’t tell any lies, Brian. You did. Growth over last decade was 24.5%, and not 0.4% as you falsely report.

            German industrial growth has held up well through the debt crisis in Europe and global recession. Eurozone has been lagging, and Germany has been bucking the trend. Industrial growth for last 5 years in UK: -10%. Industrial growth for France for last 5 years: -11.2%.

            However, nobody that I am aware of, including Daniel, is claiming that Germany decided to deindustrialize ten years ago. So why are you using ten-year-old numbers?

            Is this how wish to win a debate. Lying again. I am not using 10 year old numbers. The last decade spans from 2003 to 2013. If you wish to speak of a deficit of decency, please give your own comments a bit more careful thought (and stop lying or misreading data as you have done so unambiguously above). It doesn’t help your argument any, especially when you falsely accuse others of things that are not true.

          15. EL – This is becoming extremely boring and tedious, so this is the last time I’m going to waste any energy on it. If you want the last word, then fine … take it.

            However, you have continually misrepresented what I have said, first by attributing Daniel’s words to me, then by misreporting or misunderstanding my figures. I’ll give you the benefit of the doubt and assume that this is simply a case of poor reading comprehension on your part.

            My exact words, as you can see above, are the following (emphasis added to drive the point home): “German industrial production has increased at a net rate of only 0.4% per decade in the past five years.”

            Since math is clearly not your strong suit, I’ll show the calculation. Going from 108.3319 (9/2008) to 108.5331 (9/2013) is an increase of 0.19%. Since this increase was over five years that means that the average rate is 0.037%/year or about 0.4%/(10 years).

            Finally, I should point out that if you are using data that span from 2003 to 2013 to determine trends, then you are looking at a trend that began in 2003, which is ten years ago. I guess this is too subtle of a point for you to understand, but I’m beyond caring at this point. I’m confident that anyone else who is reading this (and is probably as bored to tears with this subject as I am) understands what I’m saying.

          16. 0.4% per decade in the past five years

            @Brian Mays.

            This is a meaningless number. I believe most people here know that. No further debate is required.

          17. @Rod Adams.

            Brian did not describe a flattening curve. He picked two peaks on a graph, and made an incorrect statement about a decade long growth pattern. I’m quite surprised you you don’t see the error in this?

          18. @EL : The way you’re claiming to get upset about the interpretation of your numbers is tiring.
            You provided one link here where the industrial production ends up essentially flat over the last few years http://www.indexmundi.com/g/g.aspx?c=gm&v=78

            And another one where a zoom on the period since 2000 clearly shows that production did not fully recover from the 2009 drop, and is perfectly flat since then :

            Electricity is not everything in an economy. It is perfectly defensible that the strong increase that can be seen on this graph between 2004 and 2008 was due as explained by ZachF to salary restriction in Germany and massive exportations to other European countries that were growing at the cost of a large commercial deficit.

          19. Electricity is not everything in an economy.


            If this is your argument, then we are in agreement. Growth statistics show clear impact of global recession, and Euro-zone debt crisis. German resilience in industrial production is due to a number of factors as I have highlighted: policy decisions at the national level, reform of labor and trade markets, investments in advanced and innovative technologies, highly skilled and productive workforce, monetary issues in Eurozone (a la Zachf), and more. Germany is an outperformer (as I have suggested with numerous links), and is projected to have stronger growth in 2014 (in line with many of it’s trade partners).

            To point to the largest and most successful economy in the Eurozone, outperforming it’s neighbors and with the largest share of manufacturing as share of GDP (and positive growth prospects despite significant regional and global headwinds) and say it is not competing or is undergoing deindustrialization is not very well substantiated. I’ve provided a great deal of evidence (national statistics, investor banking summaries, consultant reports, new reports, and the like) to make my case. Others have inaccurately suggested growth is 0.4% for the decade, or chosen one issue (high cost of retail consumer electricity or non-competitive labor costs) as a single factor accounting for this growth (or it’s lack thereof).

            This is exasperating … I agree. I have made a robust case that looks at multiple considerations (and pointed to the success of German economy despite significant odds). Others have made information up. Zachf made a very interesting and compelling case, and I engaged him on it. He did not reply to those observations (here and here) and the discussion went no further.

  3. Off-topic perhaps, just though these comments interesting:

    Nobody Builds Reactors For Fun Anymore

    …”For any technological development to be possible, the technology needs to drive itself with the fuel of Darwinian innovation. It needs to generate all possible ideas – including the weird ones – and then fish out the best while ruthlessly weeding out the worst. … Nothing like this happened with nuclear power. It was a technology whose development was dictated by a few prominent government and military officials and large organizations and straitjacketed within narrow constraints. … The result was that the field remained both scientifically narrow and expensive. Even today there are only a handful of companies building and operating most of the world’s reactors. ”

    The future of nuclear power: Let a thousand flowers bloom

    1. Wonderful article.  It includes a quote I’ve seen before, but puts it in context very nicely.

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