Sunday, December 26, 2021



Sitting on massive amounts of untapped oil and gas, Britain faces 'national energy crisis'

Good Energy, EDF and trade body Energy UK are calling on the Government to urgently intervene after the cost of gas in wholesale markets rose by more than 500 per cent in less than a year.

Emma Pinchbeck, chief executive of Energy UK, described the situation as a 'nationwide crisis', telling BBC Radio 4's Today programme: 'Domestic energy prices are going to go up 45% to 50% in the spring.

Iain Duncan Smith blamed Russian president Vladimir Putin for 'driving up prices' by restricting supply and said Europe was 'in his hands'. He insisted Boris Johnson should be telling 'crusties' objecting to exploiting the UK's resources to 'get lost'.

'The answer is very simple. We should be getting our own gas,' he told MailOnline.

'We are sitting on an island on top of gas and oil. We used to be net exporters, we are now net importers and it's not because we've run out - it's because successive governments stopped exploration and stopped development.

'So the result is now that we are reliant on dodgy regimes like Putin and others for our gas, and that may salve the conscience of a few fanatical environmentalists, who don't want the UK to get gas.

'But we still require gas, otherwise we shut down. And that means we've made ourselves reliant on these dodgy regimes.'

Sir Iain pointed to supplies in the North Sea as well as untapped shale gas on land. 'Why would we allow Putin and these other dangerous leaders to hold us to ransom when we have our own oil and gas?' he said. 'These guys will drive up the price by cutting supply.

'Who the hell wants to be in the hands of that despotic man Putin or in the hands of the Chinese or in the hands of the Belarusians, or in some of the dodgy regimes that exist in other parts of the world where we're having to try and beg borrow or steal gas?'

'Just tell these crusties that spend their time protesting they still live off gas, even if they don't like it,' he added.

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U.S. shale gas to the rescue of fuel-starved Europe

Cold-stricken Europe is drawing a flotilla of U.S. liquefied natural gas cargoes amid an energy crisis that has sent gas prices to record levels.

Facing a winter shortage and little relief from the continent’s main supplier Russia, natural gas in Northwest Europe is trading for about $57.54 per million British thermal units, up almost a third from a week earlier. That’s roughly $24 higher than Asian prices and more than 14 times higher than gas being sold on U.S. benchmark Henry Hub.

More than two dozen U.S. LNG cargoes that are still waiting for their final destination orders appear to be headed to gas-starved Europe.

Out of 76 U.S. LNG cargoes in transit, 10 tankers carrying a combined 1.6 million cubic meters of the heating and power plant fuel have declared destinations in Europe, shipping data compiled by Bloomberg shows. Another 20 tankers carrying an estimated 3.3 million cubic meters appear to be crossing the Atlantic Ocean and are on a path to the continent. Nearly one-third of the cargoes come from Cheniere Energy Inc.’s Sabine Pass LNG export terminal in Louisiana, the shipping data shows.

U.S. LNG export terminals are operating at or above capacity after reaching record flows on Sunday. Asia is typically the top destination for U.S. LNG cargoes, but that has changed this winter with the significant premium for gas in Europe.

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Germany’s energy surrender

One might expect that a country suffering a generational energy crunch would be trying everything possible to expand supply. Yet Germany is proceeding with the closure of three nuclear power plants—around half of the country’s nuclear power generation—by the end of the year.

Ten years ago 17 nuclear reactors produced about a quarter of Germany’s electricity, but the 2011 Fukushima accident prompted former Chancellor Angela Merkel to phase out nuclear. Six reactors remain: Three will close this month, with the remaining three ceasing operations next year. It’s hard to think of a more self-defeating policy on economic, climate and geopolitical grounds.

The closures have been expected for years, but keeping the reactors open for their previously planned lifetimes could have helped alleviate some of the pain Germans are feeling now as rising global demand drives up the cost of energy. German one-year forward electricity prices have hit €300 per megawatt hour. For comparison, the 2010 to 2020 average was under €50 per megawatt hour.

The antinuclear move has support from many of Germany’s climate-change obsessives, but abandoning carbon-free nuclear power has had predictable results on emissions. Coal was the country’s top energy sources in the first half of 2021, generating more than a quarter of Germany’s electricity. Wind and solar produced 22% and 9%, respectively, as nuclear has fallen to around 12%.

France, which relies heavily on nuclear power, puts out about half as much carbon dioxide per capita as Germany. The French also are coping with high energy prices as a result of nuclear outages and greater exposure to skyrocketing natural gas prices. But Paris is responding by building more nuclear reactors.

Berlin—at the self-made mercy of the sun and wind—is now deepening its reliance on Russian gas to keep the lights on. This is the background explanation for its weak response to Russia’s aggression in Ukraine. Germany’s staunch support for the Nord Stream 2 gas pipeline from Russia, despite opposition from allies, undermines the West’s response to Vladimir Putin's designs to dominate Eastern Europe.

Germany is now pushing to keep nuclear power off the European Union’s list of “environmentally sustainable economic activities,” a designation that could lower the cost of financing nuclear projects. It’s bad enough that the Germans have undermined their own energy security, but they shouldn’t foist their self-destructive policy on the rest of the Continent.

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Europe’s Industrial Firms Flash Warning on Energy Costs

Steelmakers, glass manufacturers and other energy-hungry businesses in Europe are calling on governments to take action to stop record gas and electricity prices from hobbling the region’s economy.

Prices for natural gas in Europe shot to all-time highs again this week after flows from Russia, the continent’s main supplier, dropped just as cold weather boosted demand and √Člectricit√© de France SA moved to turn off a nuclear-power plant for safety reasons. The moves made the continent the hottest gas market in the world, prompting ships carrying chilled U.S. gas to Asia to change course and head to Europe, where they could fetch more for their cargoes.

The flotilla of tankers helped cool gas prices at the end of the week. Even after tumbling Friday, benchmark Dutch gas futures were still more than six times as high as a year ago at €110 ($124.71) a megawatt hour. Wholesale electricity prices have rocketed across the continent, too.

The rise in power prices led Europe’s largest aluminum smelter, Aluminium Dunkerque, to shut down around 3.7% of its production in early December, the company said. A company representative declined to comment on whether continued increases could lead to further shutdowns.

Zinc operations run by Nyrstar in northern France, meanwhile, plan to close for maintenance in January. The metals company, owned by commodities trader Trafigura Group Pte. Ltd., said it made the decision because French power prices look set to be high and volatile in early 2022.

Executives at industrial firms in France said they shouldn’t pay for electricity at prices that reflect the natural-gas shortage because, unlike Germany or the U.K., France gets most of its electricity from nuclear-power plants. Businesses in Spain are in a particular quandary because fixed-price power contracts are less common than in France or Germany, exposing them to prices in the spot market.

Energy prices in Europe first surged in early fall. Businesses that need ready supplies of gas and power have broadly been able to pass the bill through to customers, quickening the pace of inflation in the U.K. and the eurozone. But isolated cases of disruption will proliferate if prices stay at historically high levels and authorities don’t cushion the blow, according to groups representing the companies.

“The ongoing situation has severely impacted the competitiveness and profitability of energy-intensive sectors,” a group of associations representing Europe’s glass, steel, cement and other industries said in a statement Wednesday. “A prolonged period of unbearably high energy prices could lead to severe losses.”

The associations asked national governments to deploy tools the European Union has said member states can use to blunt the impact of the price surge. For instance, the EU said in October governments could lower taxes or levies on gas and power without violating the bloc’s rules on state aid if all energy consumers benefited.

Prices for carbon permits that utilities and other emitters are required to own under the EU’s emission-trading scheme have also jumped this year. In their statement Wednesday, the industry associations said the market should be changed to prevent sudden jumps in energy prices and stop businesses moving carbon-intensive operations outside the bloc.

A spokesman for the EU’s executive body said it was closely monitoring the rise in energy prices.

Production of zinc—used in construction, autos and goods such as washing machines—is among the industries most exposed to the energy squeeze. Output cuts have already raised prices for the metal and analysts at Citigroup expect many other zinc smelters to follow Nyrstar’s Auby plant in curtailing production or shutting altogether.

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My other blogs. Main ones below

http://dissectleft.blogspot.com (DISSECTING LEFTISM )

http://edwatch.blogspot.com (EDUCATION WATCH)

http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)

http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)

http://snorphty.blogspot.com/ (TONGUE-TIED)

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