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181 comments on Why oil costs over $140 per barrel: the failure of leadership
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181 comments on Why oil costs over $140 per barrel: the failure of leadership
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Euan,
I am not convinced that we will get the Norwegian gas supplies we need. About 3-4 months ago someone either from the Norwegian govt, or one of the oil/gas companies, announced that they could no longer guarantee gas exports to the UK since continental Europe was their top priority. A source told me that what it boils down to is the Norwegians have contracted all their available gas to continental Europe, and if the Europeans take all the gas available under contract there will be little or none left for the UK. Unfortunately I cannot find the original article in the media, I think it must have been from one of the several newsletters I get. And nothing comes up on Google now. But you have to wonder why this was not on the front page of every British newspaper?
On the other hand, ExxonMobil/Qatar have said that they are ready to send 15 million tonnes per annum of LNG to the UK, starting I believe some time this year. This is just over 20 bcm/year natural gas, so could make up for any Norwegian shortfall. I don't know of anyone who has actually seen or is aware of the contractual details, but my guess is that the UK will be offered delivery first, as long as they are willing to pay more than anyone else. Given that Japan in particular has been paying over $20 per million btu for LNG over the last winter, it means that UK gas prices will have to rise quite a bit more than 40% to guarantee delivery. Doubling would be more like it, especially if the USA gets desperate for supplies this autumn/winter, which is looking increasingly likely. My best guess is that we will get some of the 15 M tonnes, but not all of it.
Our new (rented) flat incidentally has a useable fire place in the lounge, a feature I think is about to become very important in the UK. We will be well stocked up with smokeless coal this winter, and candles. I think the gas central heating system will not work when there is no electricity.
Hello Doug
below is a link to an article in the Guardian form 20. April 2008 about said subject;
http://www.guardian.co.uk/business/2008/apr/20/oil.householdbills
The company Gassco does not sell gas, but operates all Norwegian transport systems and receiving facilities.
Our middle case has net oil exports from Norway and Russia approaching zero in the 2025 time frame.
Hmm, well far be it from me to point up, but the pipelines exporting gas towards europe could easily suffer 'an accident' if the gas going towards the UK weren't maintained.
Thus Gassco might find their priorities rearranged, like it or not, that is a possibility.
Normally the operator of a LNG plant will try to run it at a year around optimum, which could be 90 % of nameplate capacity. This would for 20 Bcm/a turn into 1,5 - 1,8 Bcm/month or 50 - 60 Mcm/d as a continuos flow.
This is the difficult part with LNG, it is hard to adjust the process to the seasonal swings in demand.
Another way to do this is to let LNG constitute part of the base load and then let the domestic gas fields handle the huge swings in seasonal and daily demands. I don’t know if this is happening?
In a world of logic, the LNG in-port would be owned by UK gov plc and would be the supplier of last resort for domestic/essential methane only. Presumably the liquified product can be stored, at high energy density, 'indefinitely' as required, with evaporation pressure vented into the gas grid. Makes a lot more sense than pressurising room temp gas elsewhere.
[OK, on second thoughts, I have lost confidence in any gov management ability..]
They can't get more storage facilities for Natural gas through the planning system - so are totally exposed to a cold snap in the winter.
We now have a yahoo group for UK TOD'ers - 10 members at the moment- if anyone else wants to be on the list to check out comments please e-mail me from my profile - unless you choose it no mail will be delivered to your personal e-mail box, but it should be handy for specific discussion of UK issues where there is not an appropriate thread on TOD, and any suggested measures.
Cheers.
Dave
Any update on following from Guardian June 11 ...?
best, PhilH
That's interesting, but they still need to source gas in summer for storage for use in winter.
I don't know how that application is progressing, but here is an overview of the lack of storage in the UK:
http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/11/afx5104269.html
If nat gas was to be sold on parity with oil (using an oil price of US$144/bbl) based on energy content it would cost US$24 MMBtu or approximately 120 p/therm at the trading point or the beach.
Nat gas contracts (futures) for December 2008 in UK recently obtained 108,96 p/therm.