Friday
Apr112014
by 
Bishop Hill
Bishop Hill All over at Barton Moss
Apr 11, 2014 Energy: gas Greens With iGas having completed their work at Barton Moss - they have extracted the required samples, with very encouraging preliminary results it seems - the protestors are now shutting up shop and heading home (or more likely to some other demonstration that might provide them with a "ruck").
Mindful of the criticism they received for the sea of detritus they left behind in Balcombe it seems that they are going to organise a clean-up party this time.
In related news, Mr Putin is hinting about supply problems in future and wholesale gas prices are on the rise.
Reader Comments (25)
According to the article, there are only ten people left in any event. Not much of a protest any more!
I do not have any problem with these protesters as long as they are not breaking the law. They may be misguided and , worse, they may play a small part in delaying our finding out whether we are going to be able to exploit shale oil and gas...but they are entitled to their protest.
A hint from Putin is more reliable than a cast iron promise from Cameron.
All over at Barton Moss, starting again at Daveyhulme?
http://www.manchestereveningnews.co.uk/news/greater-manchester-news/fracking-trafford-igas-plans-barton-6949021
Jack
I agree with you, pestiferous as they are on occasion.
Provided:
- they don't break the law;
- they don't cause actual injury to persons or property;
- the police take the necessary steps to ensure free passage on the highway, and
- ditto to charge anyone who breaks the law,
then let them get on with it. In the long run they are (in the words of Don Camillo) like a pair of cockroaches trying to bring down St Peter's in Rome by gnawing at the columns! Already the whole anti-fracking thing is cold news. I suspect that any further revival this summer will be no more than a dead-cat bounce and if they have any sense the developers will do as little as possible between mid-July and mid-September to provide the crusties with publicity opportunities.
That explains why I saw one of these protesters walking down the A556 towards Northwich a couple of days ago. He looked like Papa Lazarou from the league of gentlemen and had a board hung around his neck with the word Fracked written on it. A truly bizarre site.
I gave him a parp of the horn and a friendly two fingered wave as I sped past in my gas guzzler. Childish but enjoyable.
The BBC sees no irony in the "UN set to warn countries over 'dash for gas'" at the same time as reporting sabre rattling by Putin.
Putin has the typical Russian eye to the main chance. A weak US President intent on killing off American Industry because of miss conceived climate worries, reduced military spending in the West and Crimea is Russian again. We can do nothing because Putin controls the gas taps. What a wonderful situation our government has got us into, threats to our gas supplies and they are too scared of the greens to start fracking.
Don't get too excited by "rising" gas prices. Here's what has happened in recent months to UK gas for May delivery:
http://www.barchart.com/charts/futures/NFK14
We're seeing a small bounce after a sharp sell-off. It's quite typical for hedgers to pay premium prices at the early signs of trouble (i.e. a while back), and then lose out as reality is not nearly so damaging to supply in practice.
A longer term perspective on prices for delivery next Feb
OK, at the risk of sending this off into the territory of conspiracy madness, what influence are Russian gas interests having behind the scenes of fracking protesting across Europe.
That accusation has been levelled in Bulgaria where protesting is also occuring and Gazprom are very active.
Sad but with comic irony. The communist-led NUM strikes of the 70s made Thatcher determined to seek an alternative to coal at all costs, despite 200 years of it still in the ground. She started Hadley centre to discredit coal and promote nuclear power but then, thanks to free-market mythology, decided to sell off the nuclear industry (continued by Thatchers fanboy Blair). Those free markets of course preferred coal and gas to more nuclear. So we now buy most of our coal and a large portion of our gas from a Russia now led by an ex-KGB boss. UK socialists meantime have swapped their tee shirt slogans from 'Coal not Dole' to 'E-On F-Off'.
@JamesG: "Sad but with comic irony..."
You called? :-)
JamesG:
Our gas supply from Russia is zero. Gazprom has a subsidiary that trades gas and supplies about 1% of our overall demand under contract to Centrica. It sources that gas either by buying in in Belgium/Holland, and shipping it by pipeline when the pipelines are flowing in that direction, or by buying it locally from other suppliers. If Gazprom were to renege on that contract it would have no impact on supply, as the same gas would be available from whoever currently sells it to Gazprom.
Gazprom did have plans to extend the Nordstream pipeline all the way to the UK, in which case we would be supplied by Russia. I don't see much chance of that coming to fruition for a variety of reasons.
I thought they were moving because they'd run out of, er, gas.
Yes we don't buy gas from Russia, but when we getting fracking that means world supply is bigger therefore putting a downward pressure on prices, which only us skeptics like.
BigOil is on the side of the DramaGreens cos they both want higher prices
... also Poland etc. who do buy gas from Russia can buy the non-Russian gas that we used to buy if we start using our own fracked gas.
We might not get our gas from Russia, but we are affected by its actions. We get some of our gas from Europe, some from US, and some from Qatar, to name a few. If Europe suddenly lost a major supplier of their gas, then they will start looking elsewhere to keep up the supply. That means looking at the same suppliers we use which means our supply chain is affected in some way. So either the suppliers increase their output to match the demand and everything is honky-dory or they increase the prices to cope with the demand and everything goes to hell in a hand basket.
Do the anti fracking protesters really have any real influence either on politicians or on public opinion? Most of us are too busy earning a living to get involved with such capers even if we wanted to. I can't really see ordinary working people having much time for them. For politicians to sit up and take notice these people would need popular support which, it seems to me, they don't have. I suppose they could qualify as useful idiots for politicians who are already opposed to fracking to point to and claim that they have support but who is going to believe that?
SadButMadLad:
One of the paradoxes of a supply problem in the Eastern EU is that some top-up supplies will come in the form of LNG imported into the UK, and then gasified and piped via interconnector pipelines to Holland and Belgium - so the gas goes through the UK on its way, giving us security of supply. There are limits to the pipeline capacity for this route, but there are also limits to Continental LNG import capacity, which would be redundant if there were no supply issue from Russia, Our vulnerabilities are rather different: problems with pipelines from Norway have caused some unexpected shortages at times in recent years, and our domestic production has declined faster than forecast (partly because of Osborne's earlier tax grab causing fields to become uneconomic to maintain). Interruption to LNG is perhaps less of a risk, although Japan has certainly bought Qatari gas post Fukushima that we were buying. We have burned less because CCGT power stations were made unprofitable by green measures, whereas coal ones benfited from sharply lower international coal prices that offset the taxes.
The anti fracking protestors are almost certainly breaking the law by camping in the side of the road. But, given that police never arrest "travellers " for doing pretty much the same, it would be unfair to prosecute the anti frackers if they're not obstructing or threatening people.
So they get to make a point, though probably not the one they thought they'd make.
If Centrica doesn't know what percentage of gas they buy is from Russia then I don't know why anyone else would be so certain:
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10715674/Where-is-our-gas-coming-from-Centrica.html
"Britain’s largest utility doesn’t know how much of the natural gas generating our electricity and heating our homes is Russian"
Two things though are certain; a) exports to Europe accounted for 39% of Gazproms 2013 sales, and b) the last time Ukraine supplies were cut off the UK suppliers hiked gas prices by a significant amount and the EU was (unjustifiably) blamed for grabbing the remaining gas before us: Britain being at the far end of the pipes.
But possibly more important is the fact that around 40% of our coal is coming from there.
http://www.carbonbrief.org/blog/2013/04/decc-energy-statistics,-march-2013
Maybe the USA will fill the coal gap. In any event we hope this kick-starts UK and European shale gas extraction but it won't happen overnight. Decent governments should have seen this coming and prepared a plan B.
In the meantime, we are being encouraged in the media to eat less baked beans to reduce the amount of - er - methane in the atmosphere, because methane has suddenly become more 'deadly' than CO2..!
To quote Mick Jagger: 'Its a gas, gas gas...'
JamesG: 'Decent governments should have seen this coming and prepared a Plan B...'
Governments, decent or otherwise, never have a Plan B. They have Plan A, and they will pursue that even if it leads
straight into a brick wall because it is what they have decided, therefore it MUST be right..
Low energy lightbulbs come to mind...
Tamiflu...
I'd better stop now...
It is a matter of public record that Centrica signed a three year deal for 2.4bm (0.8bcm/year) with Gazprom which only starts deliveries in October:
http://uk.reuters.com/article/2012/09/20/centrica-gazprom-idUKL5E8KKM8L20120920
We know the origins of the gas from the North Sea (some of which is produced by Chinese owned Nexen, but none by Russian interests - not that they have any alternative to piping ashore to the UK by law) and imported as LNG, none of which comes from Russia (or as yet from the US either at least until Sabine Pass starts up). That just leaves the flows on the interconnector pipelines to Holland and Belgium. The Netherlands produces more gas than it consumes, and exports to Germany and Belgium as well as the UK. No gas flows from Russia through the Netherlands, because the pipelines do not operate in that direction, although gas is imported from the UK allowing greater export volumes to Germany at certain times. That just leaves Belgium. Out of 19.2 bcm of imports in 2011 just 0.3bcm were from Russia (via Germany). The interconnector actually connects to Zeebrugge, and therefore in practice is supplied from the adjoining Zeepipe from Norway when it flows to the UK, or from the Netherlands or Zeebrugge LNG terminal when that is out of action.
In 2013 the UK's gas trade was as follows:
From Belgium 3.3bcm
From Netherlands 7.8bcm
From Norway 27.9bcm
LNG 9.3bcm (mainly Qatar)
Total import 48.3bcm
to Belgium 2.5 bcm
to Netherlands 1.6 bcm
to Ireland 4.9 bcm
Total export 9bcm
Now perhaps you will understand that Gazprom has to buy its supplies to the UK. In fact, their main motivation for doing so is to gain experience of markets that are not priced on an oil linked basis, and to improve their trading acumen and trading relationships.
It's true we have rather more in the way of imports of Russian coal and oil (both crude and diesel/gas oil and refinery feedstock). The oil comes from the Baltic ports, limiting the size of ships and making export to destinations further afield rather expensive. It is in any case easy to trade into alternative oil supplies - and likewise for coal. Ships are flexible.
Thanks for the numbers, It doesn't add up ....
It adds up.
It doesn't add up...
I have no doubt that Gazprom would suffer badly from Putins chest-puffery but since he already collapsed the Ruble and then sent a blackmail letter to every country in the EU I'm pretty sure logic is not what drives him.
But sure that's just Europe. The UK gas price though rose by 17% last time Ukraine's supply was cut (per the link I gave) and in the last 4 years the UK gas providers have increased prices by around 30-40% so there is either genuine gas scarcity or opportunist profiteering going on by gas traders. If it's as easy as you say to fill the gas gaps then it must be the latter but perhaps you can enlighten on that score. Either way though it seems we'll suffer another price hike if Putin keeps waving his dick around.
Take a look at the longer term UK NBP gas price chart
There are several features to note:
When we were well supplied with gas from the UKCS and Norway prices were much lower - even though we were exporting gas to the Continent. The volume was limited by the pipeline capacity, so additional gas could not be exported to raise our prices to their levels. The seasonal behaviour of prices is quite clear, reflecting very considerable demand seasonality.
After 2004, the UK started to become dependent on other imports - i.e. LNG and gas purchased on the Continent. Prices became highly volatile, especially when there were problems with Norwegian supplies via the Langeled pipeline direct to the UK.
The price spike in 2007/8 was driven by the banking collapse, as money flowed into commodities as a safe haven. The sharp economic downturn then caused a price collapse, on which the spike from the 2009 Ukrainian supply problems seems like a small blip.
Supply subsequently became more predictable, leading to much greater stability in prices. The reaction to the Ukraine has mostly been a sell-off after hedgers had bought in expectation of rising prices (and SSE doubtless bought extra to make its recent fixed price offer 18 months forward). We're now headed into spring with an opportunity to ensure that storage is filled ahead of winter.
Thus far it appears as though Putin's objectives were a) to prevent the EU from colonising Ukraine, which it appeared to be agitating to do; b) to secure Sevastopol/Crimea for its navy in the light of Ukrainian instability; and c) to protect ethnic Russians in Eastern Ukraine (possibly gong so far as to annex it). He has turned the screw on Ukrainian gas supply, not without some justification since thy have been unable to pay for it. Supply into Germany via Nordstream has continued unhindered. It has been the EU itself which has been pouring cold water on the South Stream project to supply Bulgaria, Hungary etc. which was supposed to start gas deliveries in late 2015. It's not clear the EU has a viable alternative plan.
It seems improbable that Putin will be more ambitious than that - Poland is a NATO member, whose invasion would trigger a much stronger military response. It makes much more sense for Putin to bask in the glory of achieving the achievable, and re-uniting more ethnic Russian territory. Perhaps he will want to annex Chelsea? ;)