Sure, gas prices are stupid high at the moment; oil is high but coming down (and the government should do some short-term patching up for those on lowest incomes to help them through), but I have faith that 'capitalism' and 'free markets' will sort this out within a year and we'll wonder what the fuss was all about.
For a start, the Yanks could stop being so prissy about Venezuela and Iran, for some long-held grudges that date back decades and have no real substance (see also: Cuba). Or the rest of the world could tell the Yanks to go stuff themselves and recommence buying oil from Venezuela and Iran (who are no worse than the Saudis, I'm not picking sides here).
There was, until a few months ago, global demand/consumption for oil and gas of X and a global supply/production of X, give or take, with clearing price $Y. We could live with that. Both supply and demand are inelastic, the slightest change in supply or demand leads to large short term fluctuations in price, but it always reverts to some sort of equilibrium (extraction cost for higher cost producers + profit margin).
In the short term, Russia will be selling less to European countries and more to other countries; but in turn those other countries will be buying less oil and gas from 'wherever they used to buy it'; so European countries can start buying from 'wherever those other countries used to buy it'* and we'll get back to $Y, plus or minus a bit.
Of course, there are short term practicalities to sort out with pipelines and shipping, and on average, supply routes will be longer (hence more expensive) than before, but that's small change in the grander scheme of things.
As far as electricity goes, the UK can - short term - start using coal and oil again (in the power stations that haven't been completely wrecked yet), and longer term, continue/press ahead with nuclear power stations (these options not available to the Germans, who are the idiots who got us into this mess). There seem to be plenty of new wind farms sprouting up, maybe they'll work out something clever with wave or tidal power... The more diverse your sources are, the better.
One swallow doth not make a summer, but it's still nice to see a swallow once in a while. Or, on a similar note, here.
* India is currently buying more from Russia and correspongly less from the Saudis, Russian oil being cheaper for them.
Labour news: Sue Gray and budget update
7 hours ago
30 comments:
"Should have gone fracking" as TW delights in telling us.
And we still could but TPTB don't seem to want to.... I wonder why?
Sh, another idea worth trying.
I think you'll find gas pricing will be on the rise tomorrow after NS1 was shutdown (permanently).
The Czech's are out of the street protesting. Be interesting to see if the government can magic up enough money to stop the same in the UK.
M, we shall see...
@Matt
"Be interesting to see if the government can magic up enough money to stop the same in the UK."
But it ain't about money - its about the actual physical supply. Printing the money and showering it from helicopters won't solve this one - we just ain't got enough to go around because of all the green fuckwittery over the last 20 years which has left us exposed to Vlad and his crazy plans.
Our whole way of life depends on cheap and reliable power and just remember fuel) poverty is what Greta and co in the Green Blob actually want - so suck it up plebs and be happy.
The yanks learned from the oil shock and energy crisis of the 70s that they needed to ensure diversity of supply. They tolerated OPEC and medium resulting prices because it made exploration viable around the world. They have nuclear and now fracking. Compare that to recent German policies which sacrificed diversity of supply for singleminded environmental goals. If we build more nuclear, start fracking, and continue with renewables, the conversation has to include diversity of supply, not just cost.
Sh, they don't want 'fuel poverty'. They want 'affordable green energy' and 'equality'. LOLZ. Which is like wishing for square triangles that look round.
OTOH, agreed with all that.
OTOH Seconded
Happened upon a TikTok clip the other day with an interview with a Brit blokey operating a decent sized proof of concept atmospheric CO2 to petrol/diesel plant - efficiently and scalably. He could not understand why politicians and bureaucrats weren't rushing to him to scale it all up...especially as the fuel he makes lacks the impurities that are in mineral oil. And hence vehicles that run on his fuels burn cleaner and in the case of his diesel with little to zero black smoke.
All you need he said was electricity and water and the leccie could easily come from 'sustainable' generation.
He also pointed out that there were at least a billion ICE engined vehicles in the world and that to electrify that whole fleet would cost at least 50 trillion USD. Let alone electrifying every other ICE engined vehicle, aeroplane, ship and gadget.
MW as Milton Friedman said. If you aim for equality you'll get neither equality nor freedom. But if you aim for maximum freedom you'll get a lot more equality.
@ Shiney
Partially true, but not the whole story. We can shake the magic money tree to give people enough to pay the huge energy costs now.
Yes, there is limited supply, so what will happen is that poorer countries won't be able to compete and so will go without (or more likely buy from Russia).
What won't happen is that prices will come down. If anything, it'll be a race between European countries to out spend each other to keep the lights on.
L, agreed. But I distinguish between 'the freedom of corporatists, oligarchs, landlords, slave holders and members of government' to do what they want' and 'being free from exploitation and rent-seeking from the aforementioned list'.
M, short term, it's all shit. Long term i.e. within a year or so, it will all be back to normal.
MW. Agreed. MF agreed with that - in spades, doubled. He used the abbreviated statement, I think, just to get the argument going. Your points are implicit as the 'takers' de facto deny everyone else's freedom.
" which has left us exposed to Vlad and his crazy plans."
What, like his "crazy plan" to build a second gas pipeline to Germany to give them security of supply if there were problems with the first one, which "crazy plan" has now been carried out, but the Germans are refusing to use it, even though their industries are shutting down left, right and centre and it looks like the population is going to freeze this winter?
B I think S was thinking about Vlad's 'crazy plans' to annexe most of Ukraine...(or not so 'crazy plans' if you look at it from Vlad's POV.
Matt: "I think you'll find gas pricing will be on the rise tomorrow after NS1 was shutdown (permanently)"
Sure, Monday, market on open, the BBC shown price shot up from £400 (I think it's £, might be $) to about £550. I think that 'the markets' knew perfectly well that NS's would be shut down sooner or later and that was already in the price. As at now, Tuesday midday, it's back down to £400. By end of week, it could be £300 or £700, who knows?
MW - The BBC futures number seems to be for delivery in October '22. If you want an idea of what Jan '23 is going to be like, take a look at https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5351153
Sure, the curve may follow current prices, but for any supplier buying now, that's the price they'll have to pay.
@M "They don't want 'fuel poverty'. They want 'affordable green energy' and 'equality'. LOLZ."
I was being ironic when I said Fuel Poverty - and I assume you got that, as affordable green energy == fuel poverty (for the plebs, not TPTB, obvs). I mean even Grta said so at the COP fest.
@Matt - but we already shook the Magic Money Tree to the tune of 300bn to spaff away to keep the old 'uns 'protected' from Wu-Flu (ha ha).... not sure much will fall out without MAJOR consequences down the road. Yes, it may well be the only short term sticking-plaster available, but we need additional supply ASAP so lets get fracking.
@B and @L - maybe I should've only put the quote marks around just the crazy bit - NS1&2 were perfectly rational from Vlad's and Mutti Angela's POV. Pity the Cia and US Neo Cons didn't agree.
L, oh, those plans. We in the west can do crazy much better than that. We've just invented "reverse sanctions", where we try to persuade another country to stop doing something of which we disapprove by rewarding them and punishing ourselves. What's a boring old invasion compared to a new concept in international relations?
M, those numbers seem the same to me whatever maturity
Sh, I know you were being ironic. So was I.
B, the Western "crazy" started when Mutti decided to shut nuclear power stations in case Germany suddenly became an earthquake zone (now partially reversed) and shut coal fired power stations (along with other 'green' frippery) and become dependent on Putin for gas instead as some sort of insane transition to a fantasy world.
Clearly, sooner or later Putin was going to use this as blackmail, I mused on this years ago in a different context. Now all European countries (incl. UK, which for once is not to blame) have to extricate themselves from this, which as we can see is expensive and painful.
I doubt it will benefit Putin longer term, or else he would have never sold us gas in the first place.
M, your analysis of Putin's motives only make sense if you assume he is a power crazed despot bent on world domination. Russia had lots of gas, the rest of Europe wanted gas, why shouldn't Russia sell us gas? It's just international trade. Not everything has to be part of a deep-laid plot. In any case your "Putin blackmail" idea is completely shot out of the water by the fact that it is the Germans who are refusing to import gas from Russia via Nordstream 2, not the Russians who are refusing to sell it.
Gas prices are high because Russia was selling gas cheap and keeping the price down. This annoyed the Yanks because they couldn't sell us LNG. Once Russia was out of the market, gas prices could be raised to a point where US LNG is competitive in Europe. Without Russia coming back into the market, the price is unlikely to sink below that point. See also council houses keeping rents down.
We've known for decades now that fossil fuels are not a reliable or sensible source of energy. Such a significant proportion of them are controlled by unstable and unfriendly regimes, you're placing yourself at the mercy of some not nice folks. Even after becoming a net exporter, the US has to deal with volatile prices as it's an internationally traded commodity. They also have to deal with the externalities of fossil fuel extraction. Net importers and exporters have to deal with the externalities of fossil fuel pollution.
Wind and solar are just missing cost effective storage solutions, but many of these are coming on board. I'd take the stable cost of wind + solar production + rapidly decreasing mass storage costs over fossil fuels. No need to get theocracies and petro thugs involved.
Note that I've not even mentioned climate change in case you're wondering :-) The risks and costs of fossil fuels make renewables + storage a no brainer to me even if it turns out that the thousands of scientists have somehow gotten their sums wrong
M, the best way to store renewable energy is to use it to make synthetic hydrocarbon fuels. Energy density of a lithium-ion battery is about 0.5MJ/kg. Energy density of petrol is 45.8 MJ/kg. Li-ion batteries are about the most efficient form of electrical energy storage.
@ mombers
Please enlighten the rest of us on what cost effective and commercially viable new storage solutions are coming on line.
Because, we ain't invented any new chemistry recently so the energy density is still crap as Baynard outlines.
B: "you assume he is a power crazed despot bent on world domination"
1. Putin IS a power-crazed despot, as all his ex-mates who 'fell out of windows' and the imprisoned/poisoned journalists and political opponents will attest.
2. He is not bent on 'world' domination. But he has openly stated is he is keen to take over any lands/people he vaguely believes 'belong' to Russia (Ukraine, possibly Baltic states, parts of Moldova and Poland, ex-Soviet republics, heck knows, Finland used to be 'Russian' etc). Basically, as much as he thinks he can get away with.
3. That's a mix of playing the tough guy to shore up support for his regime plus keeping control of all oil and gas or pipelines that might compete with Russian sources.
4. I suggest that you stop believing the propaganda pumped out by Russia Today.
M, when have I said anything different about diversity of electricity generation, especially where electricity is concerned? I just distinguish between a) actual 'pollution' (harmful to human or animal life) and b) any CO2 related nonsense based on Hansen's sleight of hand maths re the 33 degrees greenhouse effect.
As to security of supply, domestically produced coal and fracking tick my boxes, not just wind power. We can do open cast coal mining and use the holes for hydro, reservoirs, rubbish dumps or nature/adventure parks (like Adrenalin Quarry near Plymouth).
B and Matt, we're not scientists, sooner or later they will crack the storage thing, even if it's the good old-fashioned way of pumping water uphill (in which case, former open cast mines might come in handy) to arbitrage difference between night-time and day-time electricity costs and smooth out capacity. Maybe synthetic fuels will be the answer, who knows? Maybe split water into H2 and O2 and then burn those to generate electricity? No idea.
Bayard - Sanctions ALWAYS hurt most those that apply them. Once upon a time the RN could enforce total blockades of unfriendly people, but not any more. The world is much more connected and even the US with it's 5 Ocean fleets can't do it.
M et al. A gallon of petrol is a fantastic 'battery'...
@MW burning coal is a terrible idea. It's got low energy density so you need to dig up loads of it, wasting energy and causing environmental damage, as well as fatalities or severe injuries for mining workers. It produces poisonous ash and smoke, internalising the cost of which would make it completely uneconomical. Fracking - how much would need to be done to move the dial on prices? US gas is up to 10 times cheaper for sure, but the amount of fracking to get enough local gas produced within Europe would be huge.
Storage solutions are a huge technological frontier:
-winching weights and and down mineshafts
-storing heat in sand 'heat batteries'
-use old EV batteries
Demand management also very exciting - plug your car in overnight, turn dishwasher on etc and the grid gives you cheap power to make sure it's ready in the morning
L, that is not always true. Depends on relative size of economies. So USA being arseholes to Cuba hurts Cubans more than it hurts the Yanks. If Cuba played arsehole, it would also hurt them more.
M, "It's got low energy density so you need to dig up loads of it, wasting energy"
You get more energy out than you put in, that's what matters. Sure, there are downsides, but it all depends on how you estimate and WEIGHT these costs.
As to storage, I'm not a scientist. Good old-fashioned gravity storage (uphill reservoirs) has always worked. Warmth is the lowest value energy (apart from sound energy) so these sand batteries are bollocks for electricity storage.
But like you say, demand shifting is a go-er, so warm up water at night and pump it round a communal heating system by day. Tried and tested and it works.
So far there are no commercially viable storage systems suggested.
Thinking "we're not scientists, sooner or later they will crack the storage thing" is exactly what got us here via stupid politicians who imagined they could "nudge" technology into existence just by putting something onto statute.
M, loads of people are pushing loads of storage ideas, claiming that theirs is cheapest and best*.
They are a mix of scientists, dreamers and outright fraudsters. Some clever businesses will sift through all this and implement what actually works, is good value and profitable etc. I have no idea which it is and have no prejudice or preference whatsoever.
Like I keep saying, gravity storage for hydro has always worked, there is not dispute there. That might have seemed mad when first suggested, but it works.
* Just like anything to do with electricity. The nuclear people say that nukes are cheapest and best, so do the wind farmers, the solar panellists, the coal burners. They all look at marginal costs in an ideal world and ignore over-runs, set up costs, decommissioning costs, pollution mitigation.
But they all shout about the hidden costs associated with other forms of electricity generation. It's all estimates and what weight you apply - how do you compare "A bit pricey but 100% reliable" with "much cheap but dependent on imports (or the wind blowing, the rain falling etc)"?
I have no idea.
All I know is that we used to get this right in olden times (for about a century since electricity became as important as it is) and have seldom had power cuts (a few dozen hours in the 1970s, fifty years ago, pretty good going), electricity was affordable for most.
Also, the Grid was set up by the government, as was the case in most civilised countries and generation was done by competing, private providers. You understate the costs to get a contract and end up selling at a loss? Your problem, not the government's or the taxpayers'.
"wasting energy and causing environmental damage, as well as fatalities or severe injuries for mining workers. It produces poisonous ash and smoke"
Any conversion of energy from one form to another is inherently wasteful. We don't take into account the low efficiencies of renewable energy (how much of the energy in the wind, water or sunlight do we actually end up capturing, compared to the total that's there?), so why should we get all concerned about the inefficiencies in burning fossil fuels? There isn't much you can do with coal, apart from burn it to produce heat and thus electricity. It's not like oil, which we need to make a huge range of chemicals and substances. Coal has an energy density sixty times that of Li-ion batteries. Thus it is better to store energy as unburnt coal than it is to store it in a battery.
Getting anything out of the ground causes environmental damage and that includes the raw materials needed to build the machines that capture renewable energy. The days when coal mining was a particularly hazardous undertaking are long in the past, also the days when coal furnaces put out poisonous gases. Most of the ash from coal fired power stations is used to make insulated building blocks and scrubbers recover the sulphur from the flue gases, which is used to make gypsum for plaster.
Mark, do you believe everything the MSM tells you, including about AGW? Of course you don't. Then why do you believe anything? Any organisation that is prepared to lie to you about the climate is prepared to lie to you about anything under the sun and that includes Russia. The more they want you to believe something, the more likely it is to be a lie, thus we can probably accept the weather forecast as a best guess, but we can't accept the climate forecast. We can believe the results of the latest FA cup match, but we'd do well to take the results of the latest military action in Ukraine with a large bag of salt.
"4. I suggest that you stop believing the propaganda pumped out by Russia Today."
My views on Russia are as much informed by propaganda pumped out by Russia Today as yours on climate change are informed by propaganda pumped out by Big Oil. I would suggest you stop believing the propaganda pumped out by the western MSM. The powers that be have long ago decided that we, the people, need to be afraid of something, that there needs to be a threat hanging over our heads, a fearful population being so much easier to control. Climate change, Russia and the occasional pandemic fit the bill nicely. Although there is still the occasional well-researched piece, the vast majority of news and reportage comes from just five press agencies. If you ever google a major news story, you will see the same lines repeated word for word by a huge variety of "sources" within the MSM. The Germans had a word for it, Gleichschaltung. Narrative control is very easy these days, as you must have noticed in your researches into the AGW scam.
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