Chris Huhne wins £1bn funding for carbon capture technology

Funding is half the sum originally requested but allays fears the coalition would drop costly commitment altogether

Chris Huhne
Chris Huhne, the energy and climate change secretary. Photograph: Dave Thompson/PA

The energy secretary, Chris Huhne, has won a battle to secure £1bn from the Treasury to pay for the development of demonstration technology to capture and bury carbon emissions from power plants.

Although only half the sum requested by the Department of Energy and Climate Change (Decc), it allays environmentalists' fears that the coalition would drop the costly commitment altogether.

There is less good news for another plank of the green economy: the Treasury has apparently squeezed proposals for a green investment bank. Huhne wanted £6bn in public money to set up a bank – which was announced by the last Labour government and was a Tory manifesto commitment – that can unlock private sector funds by encouraging investment in risky green technologies.

It now seems likely that £2bn of money largely already pledged by the government for green projects will be corralled into a watered-down green fund. "It will look like a chunky announcement, in reality most of the money is there but it's being brought into one place," said an adviser to Decc.

In other spending areas there is mixed news, according to government sources:

• A 10% increase in money for nuclear decommissioning.

• £400m for the proposed renewable heat incentive for small-scaleprojects such as ground-source heat pumps.

• £60m funding to upgrade north-eastern ports critical for the go-ahead of factories building blades for wind turbines.

• A 10% cut to so-called feed-in tariffs – the subsidy for small renewable projects such as solar panels on houses.

The coalition hopes the package will help the prime minister in his claim to lead the "greenest government in history" and help the Lib Dems recover from their low poll rating. A recent YouGov survey showed threequarters of Lib Dem voters wanted clean energy spending protected or increased.

Developing carbon capture and storage (CCS) is seen as a vital step towards crafting an energy sector that will help Britain meet its legally bound target for reducing greenhouse gas emissions over the next 20 years. But the project requires up-front funding and there had been fears that the project would lose out in the comprehensive spending review on Wednesday. The Tory climate minister Greg Barker said in a speech last month that some "very good [low carbon] projects" would have to be scaled back.

Huhne is said by sources close to the process to have fought a tough fight to clinch extra funding. Despite joining the star chamber at the end of September – normally allowed once cabinet ministers settled their department's budgets with the Treasury – he battled right up until the close of play on Friday for key gains. He was supported by two Conservatives – the Cabinet Office minister, Oliver Letwin, and the junior Decc minister and former Tory treasurer, Lord Marland.

The Treasury will transfer the funds to Decc from the sale of assets, which surprised officials who expected all proceeds from asset sales to go towards paying down the deficit.

A party source said: "Chris fought really hard on CCS. He has not got all the money he wanted – only half that he argued for – but bear in mind the Treasury weren't going to give him anything."

Huhne has taken a serious hit on his programme budget. Warm Front, which provides grants for insulation and heating for the less well off, will get "slashed pretty bad" one observer said. There will be increased social price support - going from nothing presently to £300m - which will help reduce bills for poorer customers but it is unlikely to compensate for the upset caused by bringing an end to the programme and the Lib Dems expect to be attacked by Labour.

The original plan was for the UK to have four CCS demos, and there are still doubts about how the rest will be funded. The coalition had supported the Labour government's plan for four CCS demos but industry insiders had been concerned they would not go for a levy on bills to fund the remaining three because it would end up having to count towards the government expenditure tally. This appears to remain the case.

Other gains made by Huhne will – barring last-minute changes – include protecting the budget for nuclear decommissioning which, far from being ring-fenced as had been the original intention, was the target of Treasury cuts. Instead Huhne has secured an increase from £2bn to £2.2bn. There will also be the necessary funding to enable a £60m upgrade of ports in the north-east to go ahead, supporting multinational companies in locating windfarm factories nearby – something they couldn't do without the port upgrade.

The environmental community will be displeased that the government is to cut the subsidy to people sending their own energy back to the grid. It is not clear when the 10% reduction will come into effect.


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  • SteveTen

    18 October 2010 8:20PM

    Why no reference to the Lib Dems' U-turn on nuclear power, which was ruled out in their election manifesto ('a far more expensive way of reducing carbon emissions than promoting energy conservation and renewable energy.') and which they now support?

    Huhne says there will be no public subsidy for new nuclear power (see Ministerial statement).

    http://www.decc.gov.uk/en/content/cms/news/en_statement/en_statement.aspx

    Yet then shows that there almost certainly will be:

    '... unless similar support is also made available more widely to other types of generation.' 'New nuclear power will ..... benefit from any general measures that are in place or may be introduced .... to encourage investment in low-carbon generation.' '... we are not ruling out action by the Government to take on financial risks or liabilities for which it is appropriately compensated or for which there are corresponding benefits.' 'The UK .... currently caps operators’ liability at £140m.' (A pittance) '...the Government has not ruled out the maintenance of a limit on operator liability set at an appropriate level...' 'We will not rule out the Government providing support to industry in the normal course of the business of government, for example through the activities of the Office for Nuclear Development in taking forward the actions to facilitate the deployment of new nuclear power in a similar manner to the facilitation of other energy types.'

    Evidently a good day to bury bad news.

  • LiberalSweden

    18 October 2010 8:44PM

    Not a bad result after the mess of the last few years. Sad that the funding for Warm Front is cut. That was a clear win win win. Clearly not so much of a win for the Tories not to demand cuts

  • Ecojustice2

    18 October 2010 8:55PM

    Good they're not wasting the money on something like child benefits, and instead investing the money in something that will benefit our children's future.

  • Monbiotwatch

    18 October 2010 10:06PM

    The apparent decision to mess around with the feed-in tariffs just six months into the new scheme (and despite all their "green" noises in Opposition criticising Labour's scheme for not being generous enough), means that no-one will ever be able to trust this Government ever again with any green investment.

  • Hotneck

    19 October 2010 12:21AM

    "There is less good news for another plank of the green economy: the Treasury has apparently squeezed proposals for a green investment bank. Huhne wanted £6bn in public money to set up a bank – which was announced by the last Labour government and was a Tory manifesto commitment..."


    ----------------------------------------------------------------------


    YEAR: 2015 (hypothetically thinking)
    "Chris Huhne now belongs to one of the richest families in the UK having invested early in a green investment bank..................."


    I coud comment so much more on this Guardian article but I just know the game will soon be up in less than 2 years. I know Gore got rich quick via a sleight of hand but these guys have missed the boat. :o)

  • franksw

    19 October 2010 7:07AM

    Carbon Capture Storage, and we need this for ultra carbon clean and cheap Nuclear power ? Or has he seen the need to running coal power plants plants as a 90% spinning reserve since the windmills are so unpredictably inefficient.

    Double power costs, who cares, except the impoverished, the weak and the old and all for the increasingly discredited scare that CO2 might increase global temperatures to take us back to the glorious warm days of the Roman Empire.

    Of course Hulme might not be mad but realizes that he (or rather we the electorate) has no choice but to just pragmatically implement diktats from the unelected and remote EU beaureaucrats.

    An absolute waste of money.

  • Ausername

    19 October 2010 10:19AM

    "Or has he seen the need to running coal power plants plants as a 90% spinning reserve since the windmills are so unpredictably inefficient."

    Wind farms don't need "90% spinning reserve". UKERC is the report to read if you want to get the true picture.

    Wind generation is predictable enough to be incorporated into the grid with little disturbance,certainly less disturbance than when nuclear was introduced to the grid. You can see National Grid's predictions and the actual production on the web. Scroll down to the Wind Forecast Out-turn graph.

    "Double power costs,"

    Wind energy is one of the cheapest of the renewable energy technologies. It is competitive with new clean coal fired power stations and cheaper than new nuclear power. The cost of wind energy varies according to many factors. An average for a new onshore wind farm in a good location is 3-4 pence per unit, competitive with new coal (2.5-4.5p) and cheaper than new nuclear (4-7p). Electricity from smaller wind farms can be more expensive.

    RenewableUK

    "and all for the increasingly discredited scare that CO2 might increase global temperatures to take us back to the glorious warm days of the Roman Empire."

    You need to brush up on what the science predicts. A short introduction in the form of a cartoon.

    If you want it simpler than that Act Now! is about as short as it gets.

    "Of course Hulme might not be mad but realizes that he (or rather we the electorate) has no choice but to just pragmatically implement diktats from the unelected and remote EU beaureaucrats."

    What a surprise, anti-EU as well as anti-science. In fact the EU is hardly dictating anything other than to promote carbon trading.
    What limited steps the EU has taken have been at the urging of a small number of governments, including the UK government.

  • HenryBrubaker

    19 October 2010 10:38AM

    Carbon Capture is surely a bad practical joke. According to the Country File report (or perhaps better described as 15 mins of pro-AGW propaganda at the license fee payers expense) the other evening which george monbiot took part in, they suggested that it takes 25% of a stations power to run the carbon capture euipment. So we will need a lot more stations to0 provide the power we need.

    This is lunacy. Spending inordinate amounts of money to 'save the world' based on dodgy and possibly corrupt science.

    If even a fraction of this money was put towards actually helping people in the here and now and actually mitigating the effects of 'climate change' the world would be a better place.

    But there is no profit in feeding people is there? Its easier to make a few (billion?) quid to provide unnessesary technology to people who have no option of paying. What could be better for a power company et al thanto have to provide an extra station for every 4 they currently run in order to remove a natural gas that feeds plants. History will look back on us as a nation of mugs robbed by swindling 'environmentalists'

    No wonder the wheels are falling of this scam...its lunacy!

    Also while Im on, can someone ask Mr Monbiot (surely time for Sir Monbiot is it not!!) just to pop over and explain what he meant by 'futureclimate breakdown' on his part on the Climate Change show, I mean Country File.

  • SirBevois

    19 October 2010 10:52AM

    CCS is a joke within the power industry. It was a totally unproven technology the industry threw as a bone to Government in the attempt to gain some funding get some debate going on the reduction in Generation capacity over the next 15 years.

    It only works on a very small scale.

    In a conventional large coal power station, it makes Units that run at around 38% efficiency into units that run at 25% efficiency at best.

    And that's just the KNOWN effects on generating electricity. All the actual storage of the carbon is complete pie in the sky (or should that be pie in the ground?)

  • johntherock

    19 October 2010 11:11AM

    Beat me to it there, Oldbrew!

    Better to look around for the bigger picture than to kneejerk away in one's armchair....

    CCS is after all at the R&D stage. If (Sir Bevois) it works on a very small scale, then R&D should be able to make it work on bigger and bigger scales. After all, we have gone from burning coal in the grate at home to burning it in huge power stations.

    Cheers - John

  • apdavidson

    19 October 2010 11:27AM

    £1 billion will be money well spent if it delays the main offshore wind decisions until AR5. This is because unlike AR4, shameless propaganda based on major scientific 'errors', AR5 will be objective science from those who still have careers. It helps that Pachauri is in place because his defects are well known.

    As for AR5, it is very likely it will dismiss CAGW but will warn of secondary effects. I can live with that because then we'll have the industrial infrastructure for an enhanced nuclear programme with nominal wind power at less than 20% of maximum demand and other, much more reliable generation.

    This is because battery cars will be replaced by much better fuel-cell vehicles and the extension of that technology to give decentralised CHP in homes and commercial premises will mean less offshore wind, less wasted heat from the standby plant which produces c. 70-80%.of so-called 'wind energy'.

    I'm quite happy to see a programme to increase the life of offshore windmills from the present c. 7 years to the hoped-for 30 because after 2025 or so, if the dc interconnects are built, we can export that power to an energy-starved Europe and make money out of it instead of foisting a massive burden on the economy, which is what the Marxists want, justified by the false CAGW scare.

  • Ausername

    19 October 2010 11:33AM

    "This is because unlike AR4, shameless propaganda based on major scientific 'errors', AR5 will be objective science from those who still have careers."

    If AR5 says that the problem is not as pressing as we thought earlier then I and every other campaigner I know will be delighted. However, at the moment that is just wishful thinking. We can't stop in the hope that the science has changed, all the indications are that the science has not changed other than in the imagination of deniers.

  • apdavidson

    19 October 2010 11:45AM

    Ausername: 'all the indications are that the science has not changed other than in the imagination of deniers.'

    Do you think I'm the only scientist not from climate science who sees the holes in the arguments or that many in climate science are realising there are problems in basic physics and that AR4 purporting certainty out of nothing was a disgrace?

    This is not to say the majority of work has not been done diligently, rather that because the programme came to be used for personal agendas, its authority has been wasted.

    Those responsible are being sidelined. Change your record: it's getting boring.

  • Ausername

    19 October 2010 11:54AM

    "According to the Country File report (or perhaps better described as 15 mins of pro-AGW propaganda at the license fee payers expense) the other evening which george monbiot took part in, they suggested that it takes 25% of a stations power to run the carbon capture euipment."

    Didn't see the programme. Your description of it is probably wide of the mark though.

    The early plants are expected to consume something like 25-33% of the output to power the process. That is not sustainable but it is likely that as the engineering is improved this will reduce to below 10%, which would be well worth it as a stopgap on the road to sustainability.

    Will the costs be reduced as knowledge is gained? Almost all forms of generation go through this process and there is no reason why CCS should not do so too. My Scottish friends tell me that the people working on the tiny trial plant at Lonagannet discovered a number of ways of reducing energy input, which will be used if the larger trial plant is funded and approved. If that is built then I imagine they will make all sorts of improvements on an industrial scale plant, though still one which only captures 1/6 of the carbon dioxide output of the plant when running at full output. One of the current four units is to be left as a standby, the other three are being fitted with emission reduction equipment for a longer life and the larger trial CCS plant will capture half the output of one unit.

    "dodgy and possibly corrupt science."

    Deniers have yet to land a blow on the science. They have landed a handful of blows on other parts of the IPCC reports and process, none of which were serious.

    "But there is no profit in feeding people is there?"

    Climate campaigners are not making a profit out of their campaigning.

    If you look at the members of Stop Climate Chaos you will find organisations which sadly have too much experience of feeding people, not that this is something they make a profit out of. Christian Aid, CAFOD, Tearfund, Oxfam and the Salvation Army do a lot of feeding people. They know who is already being affected by climate change, it isn't rich westerners.

  • Ausername

    19 October 2010 11:57AM

    "Do you think I'm the only scientist"

    Some months ago I recall you claiming that you were a retired engineer with a background in electricity systems in Australia. Now you are a scientist. Whatever.

  • Ausername

    19 October 2010 12:10PM

    Doubters about CCS should look at the academic work that has been done in Scotland. It has been funded by companies that would benefit from a CCS programme, but that does not automatically invalidate the work. If there are flaws in the work they can be pointed out.

    The engineering expertise of Scottish Power (power stations), National Grid (pipelines) and Shell (oilfields) can hardly be challenged, even if it is sometimes misplaced. I have campaigned against Scottish Power and Shell, but acknowledge they are usually fairly good at engineering. Aker have developed the capture process and it has already been tested on a small scale at Longannet.

    It seems to me that there is a good basis to try a large scale experiment and see how well CCS works on a largish scale. Others are doing the same around the world. That isn't an argument for building Hunterstons or Kingsnoths now on the assumption that CCS will work in the future, especially as if the trial is at Longannet that will not test pre-combustion carbon capture, but it will test post-combustion capture, compression, transmission and storage.

  • apdavidson

    19 October 2010 12:12PM

    Ausername: 'Some months ago I recall you claiming that you were a retired engineer with a background in electricity systems in Australia. Now you are a scientist. Whatever.'

    If that's what you want to believe, so be it!

  • PeterMG

    19 October 2010 12:58PM

    Just another scheme that reduces efficiency. Just about every green scheme does this at present. When we should be investing in efficiency and building on a long history of achievement we instead have brainless politicians trying to control engineering. If good engineering decisions where allowed we would not have any wind farms or solar plants, but have spent all that money on reducing fuel consumption of all manner of products.

    But no lets promote a technology that has yet to be proven on an industrial scale, reduces the efficiency of the power plant, and where it has not been successfully demonstrated that the CO2 will remain in the ground. You couldn’t dream this rubbish up, yet this is what we have for a political class. Perhaps they need to spend a week in a history class because matters are coming to a head.

    The election in the US in a couple of weeks will be a pointer to what is about to happen. When you ignore the majority of your electorate to service the demands of a few activist groups you will be treated very harshly.

  • TurningTide

    19 October 2010 1:46PM

    Ausername:

    They know who is already being affected by climate change, it isn't rich westerners.

    So there wasn't famine in the Third World before "rich westerners" showed up?

  • HenryBrubaker

    19 October 2010 1:53PM

    Oldbrew above brings up the use of CO2 to help extract more oils for wells. What a cracking idea! The question I have is this: Is it easier to extract CO2 from the atmosphere for this purpose or does it make more sense to use CO2 from carbon capture plants?

    Carbon Capture is utter lunacy for it intended 'purpose'. The idiotic idea of pumping a natural gas into the ground is well....seriously? Our children will laugh at us 'you spent how much pumping fresh air into the ground????'

    And if britain alone was to use this rubbish, i mean technology, how much difference to the amount of CO2 in the atmposphere would it make? Would it be measureable as a percentage of the total amount? I would imagine none whatsoever and insignificantly tiny.

    Huhne is a laughing stock, but his 'jokes' are not funny. They are squandering your money and my money based on hooey science more akin to astrology and eugenics than real science to make their corporate pals rich.

    The sooner the AGW train runs of the rail the better for us all.


    And now let us await Ausernames wonderful rebuttal.

  • Ausername

    19 October 2010 2:09PM

    "Research paper from American academics is threatening to blow a hole in growing political support for carbon capture and storage as a weapon in the fight against global warming. CCS "is not a practical means to provide any substantive reduction in CO2 emissions, although it has been repeatedly presented as such by others.""

    Those who keep up with the debate will have read the response to that paper, entitled Why the Economides Model is a Bumblebee of an Analysis.

  • Wyndley1857

    19 October 2010 2:13PM

    What happened to Ed Miliband's four 'clean coal' plants announced in April 2009, which were to be up and running by 2020?

    http://news.bbc.co.uk/1/hi/uk_politics/8014295.stm

  • Ausername

    19 October 2010 2:16PM

    "The idiotic idea of pumping a natural gas into the ground is well....seriously?"

    It is something the oil industry has done for a long time. Since the 1970s in North America, but no so far in the North Sea.

    This is elementary information, which those who have read the studies would know.

  • Aliententacles

    19 October 2010 4:10PM

    Surely warm front should be expanded to include solid wall insulation and not cut?
    It has 4 major benefits:
    1. It reduces the CO2 production of the poorest households
    2. It reduces poverty
    3. It increases health (people living in properly warmed homes)
    4. It increases employment in some of the poorest areas of the UK

    As a previous poster said. It is win, win, win and win. How is this a project that should be cut?

  • Ausername

    19 October 2010 4:33PM

    "Surely warm front should be expanded to include solid wall insulation and not cut?"

    Yes it should. Reducing demand is always what environmentalists urge first, but politicians prefer big things they can get in the papers snipping a ribbon at the opening ceremony.

  • Frankone

    19 October 2010 6:19PM

    His IQ is clear from the picture, as if his support for the CO2-drives-climate scam wasn't evidence enough already. Of course CCS is absurd, and not feasible. Besides it would be a waste of perfectly good CO2 that could usefully contribute to agriculture and the general greening of the planet. The only thing in its favour is that some of the nastiest greenies don't like it.

  • NoSurrenderMonkey

    19 October 2010 6:36PM

    No. The CCS money simply is money wasted on pumping CO2 into the ground for no reason.

    CO2 enhanced oil recovery has been looked at before in connection with the North sea. It was considered for the Norwegian Gulfaks field, but dropped as economically unviable. Shell also considered it for its Draugen field in Norway, but dropped it. Again, it was technically feasible, but not commercially viable, even with a substantial contibution from the Norwegian state.

    CCS at Longannet should proceed with funds from the players involved, not the taxpayer or the domestic electricity customer. If there is an economic case for CO2 EOR, let them take the risk. An investment of a mere singular billion should hardly be beyond the scope of the likes of Shell.

    What will happen is what happened at Draugen, the EOR was forgotten and the project became on of stuffing air into a hole under the sea. If we're going to spend money on that, why not just save everyone a lot of time and money and just spend the money on benefits for people to sit and watch TV at home? - or perhaps some aircraft for our aircraft carriers?

  • NoSurrenderMonkey

    19 October 2010 6:47PM

    Sorry, that comment was addressed to ausername and jontherock

    By the way, yes, CO2 EOR has been used in the States - sourced by opening up naturally occurring CO2 concentrations. Green: "does not compute". That's right! Perhaps their government doesn't really believe in the likelihood of runaway climate change - just a thought....

    They had to look into what they called "anthropogenic" CO2 because there wasn't sufficient of the lovely, cheap, naturally occurring stuff. They found that industrial sources required substantial state subsidy, even with EOR revenue.

    http://adv-res.com/pdf/v4ARI%20CCS-CO2-EOR%20whitepaper%20FINAL%204-2-10.pdf

  • bassireland

    19 October 2010 7:47PM

    Just settling down for a game of denier bingo and guess what, franksw manages a lie (I'm sure frank you'll find a way of saying it wasn't what you meant but you clearly intended to imply that every 1MW wind turbine would need a 900 kW spinning reserve), a prediction of financial doom (it'll increase costs for the poor the weak and the old), a denial that CO2 is a greenhouse gas (again frank I know you tried to put plausible deniability in) along with an assertion that even if it is warming is good and the climate in Roman times was warmer and wonderfuller. All in 4 short paragraphs. Taken with Hotneck's evidence-free assertions of financial impropriety that's a full house I think.

    @apdavidson: get off this board now! You have a paper to write remember!

  • euangray

    19 October 2010 7:57PM

    Ausername

    Doubters about CCS should look at the academic work that has been done in Scotland. It has been funded by companies that would benefit from a CCS programme, but that does not automatically invalidate the work. If there are flaws in the work they can be pointed out.

    Funny how it "does not automatically invalidate the work" when some vested interest proposes something you happen to agree with, but if an oil company puts a single penny towards any organisation remotely critical of AGW/CC/CD alarmism, that is intant and total invalidation of every document and utterance that organisation has ever made or will ever make.

    EG

  • euangray

    19 October 2010 8:00PM

    Ausername

    It is something the oil industry has done for a long time. Since the 1970s in North America, but no so far in the North Sea.

    Nasty evil BP have been doing it for several years in their Magnus field, to name but one.

    EG

  • CO2isGHG

    19 October 2010 8:08PM

    CCS is after all at the R&D stage. If it works on a very small scale, then R&D should be able to make it work on bigger and bigger scales

    Not necessarily. But no doubt with enough money, time and effort thrown at it, CCS would work technically.

    Whether it will ever work economically is remote. Factor in significant rise in world coal prices for example and CCS is dead in the water:

    High coal prices and CCS don’t mix

    see
    http://peakoil.com/consumption/richard-heinberg-china%E2%80%99s-coal-bubble-%E2%80%A6and-how-it-will-deflate-u-s-efforts-to-develop-clean-coal/


    In any case CCS raises the cost of electricity dramatically

    CCS used for enhanced oil recovery from depleted oil wells in the north sea?

    Burying CO2 to recover oil to be burned liberating CO2?

    Who pays for the magical CO2 injection that boosts my oil company revenues?

    Ans: the tax payer and electricity bill payers.

    BINGO!

  • euangray

    19 October 2010 8:26PM

    CO2isGHG

    Whether it will ever work economically is remote

    Increasing fuel consumption by 30-40% to generate the same amount of electricity from coal is very unlikely to ever make economic sense.

    EG

  • Jacksavage

    19 October 2010 10:51PM

    Progress of a sort. The Guardian are at least starting to use a photograph of the Hoon which makes him look like the arse he patently is.
    I am curiously heartened.

  • Ausername

    20 October 2010 2:01PM

    "Funny how it "does not automatically invalidate the work" when some vested interest proposes something you happen to agree with, but if an oil company puts a single penny towards any organisation remotely critical of AGW/CC/CD alarmism, that is intant and total invalidation of every document and utterance that organisation has ever made or will ever make."

    Your assertion is not supported by the facts. I don't always do it, but when I criticise something I tend to give an example of where it is wrong, often by linking to a rebuttal of it rather than wasting my time doing a rebuttal.

  • Ausername

    20 October 2010 2:07PM

    "Increasing fuel consumption by 30-40% to generate the same amount of electricity from coal is very unlikely to ever make economic sense."

    That would be true, if CCS increases fuel consumption by that amount when fully developed.

    But the best estimates are that during development it will increase fuel consumption by 25-33% for the first plants, reducing to less than 10% when it is fully developed. The little trial currently at Longannet has already shown cost reductions.

    What is the objection to a larger trial? It will either show that the best estimates are right or that they are wrong. If they are wrong then CCS is unlikely to go much further. If they are right then it is worth considering. Is it the fact that the best estimates might be right which concerns some?

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