 | Oilwatch Monthly December 2008 | The Oil Drum: Europe | How to keep on financing wind farms when banks have no money left. |  |
107 comments on Will the UK Face a Natural Gas Crisis this Winter? (Part 2 of 2)
Comments can no longer be added to this story.
| Show without comments | PDF version
107 comments on Will the UK Face a Natural Gas Crisis this Winter? (Part 2 of 2)
Comments can no longer be added to this story.
| Show without comments | PDF version
User login
Personnel
Editors
Contributors
Peak Oil Primers
Archives
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- July 2006
- June 2006
- May 2006
- April 2006
- March 2006
Vital Trivia
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
Rune,
Thanks for a very detailed post. From figure 08, it appears that coal fired electricity could replace more NG in spring and autumn, if LNG or European imports do not allow NG storage to be replaced. Are there limitations due to building stockpiles of thermal coal over summer or port facilities that would limit more coal fired electricity?
You have not mentioned possible domestic NG rationing. In the US in the late 1970's this occurred, and this winter in Western Australia there was also industrial rationing and voluntary domestic reductions of NG and electricity. In neither case was it a disaster to the economies. The population is willing to make big reductions if asked and if its a temporary measure, as long as politicians can demonstrate they are fixing the problem. It seems in the UK better home insulation and more efficient gas heaters or replacing NG with heat pumps would be a big help in reducing winter NG demand.
On figure 08 are all sources on the scale of Gwh electricity production or energy used? Thus is nuclear producing less Gwh of electricity than NG?
Some months ago I read a report outlining EU treaties with England which required the UK to shut down coal-fired electrical genration on some sort of a mutually agreeable time table. The speculation was that this could become impractical should NG supplies diminish. Any insight to how such agreements will effect the near term situation?
Dear Rockman,
During the next decade to 2018, A large proportion of our coal fired base load is scheduled to come offline in order to comply with EU directives. At the same time, about half of our ageing nuclear base load is due to be decomissioned. If no substitute is supplied in the form of new nuclear generation or alternatives, then we face at least 30% shortfall in base load by about 2015. EDF have recently suggested that the gap will be filled by gas turbine generation. Although the gas turbine solution is a relatively cheap solution as far as capital and plant is concerned It is unlikely to be secure regarding source of fuel. The credit crunch may even kill off these plans and quite possibley the plans for renewables.
Regrettably the UK has had an extreme free market philosphy to energy for over 20 years now. The strategic implications have never really been understood by our scientifically illiterate leadership, or actually, studiously ignored. This can be blamed on both ruling parties. Both are equally guilty.
The big question now for whoever is in power is whom do they fear most? The wrath of the electorate? or the wrath of Brussels? I would suggest that Brussels will come second to the electorate and these coal fired power stations will be retained and extended. A bargain will be struck before Brussels is blamed for switcching the lights off. However we will be rationed in the coming winters, especially if cooling takes us to the kinds of scenarios of the 1970's. I anticipate 'carbon foot print' rationing based on a national ID scheme to be used as the fig leaf and pretext and as a 'solution' to this self inflicted problem.
Rgds
Dropstone
Thanks for all the details dropstone. All I could remember from the report was a sense of potential conflict between the EU and the UK. Unfortunately we have suffered from the same political shortcomings you have. Perhaps it's our shared ancestral genes. Despite all the good reasons and grand expectations for alternative energy here we will no doubt become more dependent upon coal IMHO. Most here don't understand that coal has been the foundation of our industrial expansion for the last 20 years or so. Basically THE source of increased electrical generation. Though gasoline (via cheap oil) has allowed a very comfortable swing towards suburban expansion, coal has been an increasing basis of our economy. Certainly this does not bode well for those folks living along the world's seashores. To whatever effect man might be contributing to global warming I cannot see it abating anytime soon. Like it or not, coal is the next tool of economic expansion.
Unless, of course, the genes of our politicians suddenly mutate into a higher form of life. Yes...I know...wishful thinking.
Neil,
First thanks (it takes a lot of work to get insights into UK nat gas supplies/demand)
Presently I have no good data on stockpiles for thermal coal.
Diagram 08 leaves the impression that a lot of electricity generation may be switched from nat gas to coal thus freeing up nat gas capacities for other users.
Diagram 08 also illustrates how coal substituted for nat gas after the fire on the Rough storage facilities (long term) in February 2006. It also shows that oil (distillates) to some extent was used to (apparently) substitute for nat gas.
You are right that nat gas rationing is an option. The UK nat gas market is liberalised so it would appear a very dramatic step, as (physical) rationing as I see it would require the involvement of the UK Government.
It is of course possible with voluntary rationing, but then nat gas consumers need to be informed why and I guess this would also require the involvement of the Government.
It takes time and money to improve home insulation and/or install more efficient heaters, but these are truly steps helping reduce consumption.
The diagram shows fuel used for electricity generation in MTOE (Million Tons Oil Equivalent).
BP Statistical Review recommends a conversion factor of 12 000 kWh for 1 TOE.
Thank you Rune. This is a masterful post!
I'm curious as to how exactly one would physcially ration domestic natural gas ?
Even if your meter could somehow cut you off after a certain volume per time period there is the issue of safety with cutting off supply. The system would need flushing and pilots relit etc.
Ration by price, yes, tiered tariffs with punative use over a certain volume. But evem then how do you set that ? Per residence, per size of residence, number of occupants, income of occupants ? It's a minefield.
If the gas goes out in deep winter then the electricity grid will quickly follow as everyone plugs in their resistance heaters.
orbit,
I think you hit the nail on the head by describing rationing in a liberalized market as a minefield.
Moreover, from my understandings you are right about cutting supplies after a preset amount of nat gas has been supplied to a customer. If the nat gas system becomes fully depressurized it requires experts to flush, repressurize etc. and start it up again. This is a time-consuming effort. I have heard some numbers (based on studies carried out in/for UK) referred to as how long it would take to do this if a whole area was affected. Problem is available experts to carry out such a task.
What you describe in what I quoted above is what I envision as a very, very nasty scenario.
Rune
Rune & all,
thanks for the impressive post and interesting discussion. I would like to make a more general point first. We are heading towards a future in which societies will have to deal with situations of increasing scarcity. This becomes a "minefield" when the present situation is regulated by the market and the nature of the commodity makes it difficult to let market mechanism reach an equilibrium point via higher prices and demand destruction. The only alternative is a kind of centrally planned allocation, i.e. rationing. This is done via a process shaped by existing and emerging power structures, negotiating tables and simple decisions by default (e.g. upstream customers receive the commodity downstream don't). I see the concept of a "government" stepping in as a simplification, although possibly a useful one.
The example of natural gas appears in my eyes to be of great importance: due to its inelasticities and limited predictability, it is a market in which a situation of normality can turn into one of severe scarcity in few weeks.
Now some interesting questions arise:
- To what extent is it possible in the NG grid to produce "rolling blackouts" similar to those permitting to ration electricity among a population of consumers? From what has been said this is much less viable than with electricity.
- Are there (in UK and elsewhere) contingency plans such as orders of priority (which customer has to be served first) or planned procedures in order to empower decision makers, set up negotiating tables, and the like.
I should add that this is a line of research I would like to follow from the point of view of conflict management strategies. My technical understanding is limited but as far as I understand many industrialized countries rely on a steady NG supply in a free market environment under very naive assumptions that this is a reliable, safe state of affairs.
Thanks!
Thank you for bringing in an interesting perspective to the debate.
From what I understand, the physical nature of nat gas makes it more difficult to ration through methods like “rolling blackouts”, because it is difficult to be certain that everyone at the end of the day has kept a little overpressure in the system thus keeping air out. If the system becomes totally depressurized the chances are air will enter the system Air and nat gas is an explosive combination if ignited.
I have no firm information on plans for order of priority during an actual shortage. Politically I would assume households, hospitals and institutions highly vulnerable from shortfalls would get priority. (Just guessing here)
Then again, gas in a liberalized market flows to the highest bidder, and I guess it would be difficult for a government to intervene during such a situation.
What about customers who has contracted deliveries for a longer term should these be subject to rationing?
I can well understand that such a situation would become quite interesting from the view of conflict management.
How does a critical mass of people react when one of their vital support systems stops functioning?
“rolling blackouts” of ...Electricity.. will be the way to limit natural gas consumption.
No electricity no combiboilers working less nat gas consumption .
Rune,
A more realistic plot would be to compare the amount of electricity produced, thus wind power now accounts for 4% of electricity consumption and with another 12% under construction, approved or planned could replace some of the NG especially in winter months.
Neil1947,
The diagram below
has been lifted out of "ENERGY MARKETS OUTLOOK" December 2008 (made public today)
by DECC ( (UK) Department of Energy and Climate Change).
The document can be downloaded from here (large pdf).
The pie chart above lists wind as 1 % of UK electricity generated In 2007.
Chart 4.2 (page 23) in the "ENERGY MARKETS OUTLOOK" shows a pie chart of UK electricity generating capacity by technology and it also lists wind as 1 %.
Hydro pumped storage generated electricity? After accounting for the electricity it buys to run the pumps and some real world inefficiencies, it is a usually an electricity sink. If the plant is on a river or some other place that also produces conventional hydro power, then only the part that is generated as a result of water that was pumped, flowing back down should count as pumped storage, the rest, (the river flow,) should be counted as regular hydro.
Most likely, that chart is double counting it with something else, (probably the base load nuclear plants.)
Rune,
I looked at the new Energy Markets Outlook report that BERR made public today. In the I little I looked at it, I didn't see the natural gas problem highlighted. Instead, it seems to be relying on things that won't work.
These are some charts I found. Chart 5.11 shows LNG is expected to ramp up much more slowly that capacity, and 2009 is still expected to be low, even with the new capacity.
Chart 5.12 indicates that while quite a lot of storage has been proposed, very little of it is under construction. The National Grid base line indicates (according to the text) that the National Grid doesn't think that all of the proposed construction will be built.
In the next few years, Chart 5.14 indicates that the hope is that somehow, more pipeline gas will come from Norway, and a little from the Continent, which I suppose is ultimately Russia. Your post tells us this is not likely to happen.
Gail, thanks.
I have just been looking on the nat gas part of that document, and I have different expectations based upon the descriptions of the methods National Grid has used to forecast future Norwegian UK supplies. This because Norwegian sales are company based, that is each owner in a gas field is free to sell its gas into the market it prefers (which means the highest bidder), which may be UK, Belgium, France, Italy, Germany etc.. Germany by Chancellor Merkel asked (during a visit this spring to Norway) for more Norwegian nat gas.
However, in this post I will focus on supplies this winter. I take it as when the diagrams shows 08/09, 09/10 etc. that it means Contractual Years (which starts 01. Oct. and lasts till 30. Sep. the next year.)
I think it is important to bear in mind that The Energy Markets Outlook from DECC is used by, amongst others, many of the commercial actors to plan their investments and strategies. Chart 5.11 would tell all the commercial actors that most likely the UK market is adequately supplied with LNG this winter, so I doubt anyone would venture into LNG speculation based upon this Energy Outlook. The information in an official governmental publication bears much more weight (and it should do!) than a post on an excellent energy blog.
During the contractual year 2005 (01. Oct. 2005 till 30. Sep. 2006) total UK LNG imports were just above 2,7 Gcm (Bcm) according to data from BERR/DECC and it looks like they expect pretty much the same this contractual year (2008/2009).
Norwegian supplies for this contractual year on an annual basis could be quite accurate. However what counts is average daily supplies during the winter season, and last January and February Norwegian supplies was on average close to 90 Mcm/d (based upon data from BERR/DECC. I doubt the Norwegian supplies on average daily basis may go beyond 90 Mcm/d this winter. They could of course on a single day or two days in a row reach as high as 105 - 108 Mcm/d. What counts; are total deliveries during a month.
Chart 5.1.2 just expresses that there will not be a huge future expansion of UK nat gas storage capacities.
Chart 5.14, I will also expect Norwegian nat gas supplies to grow towards contractual year 2011 (this based upon decisions to tie in some of the Norwegian fields presently under development to UK gas systems like SAGE and FLAGS. For contractual year 2007 (ended September 2008) UK imports from Norway was 23,5 Gcm (Bcm) (data from DECC/BERR).
The forecast imports beyond contractual year 2011 could be or could not be, dependent on potential clauses to extend running contracts as these expires.
Regarding imports from Norway, do you mean that while imports from Norway are not going up this year, they may go up in the next two contract years? I am not familiar with SAGE and FLAGS.
I expect annual nat gas imports from Norway to increase this Contractual Year, but average daily deliveries (based on total monthly deliveries) this winter I expect to be close (at best) to last winter that is approximately 90 Mcm/d.
Yes, I now expect imports from Norway to UK to grow towards 2011, but beyond 2011 it becomes really difficult to tell, imports could remain level, but most likely they will decline as some of the running contracts expires.
FLAGS; Far North Liquids and Associated Gas System, pipeline system on UKCS gathering gas from several fields and landing it in St. Fergus, Scotland.
SAGE is also a UKCS pipeline system for wet gas terminating in St. Fergus.
Rune,
This is another graph from the new ENERGY MARKETS OUTLOOK report, showing National Grid ranges of annual demand and UK Continental Shelf production. Somehow, they are forecasting in their base case a year of non-decline. (Actually it looks like that is for last year, and we know that didn't happen!) It is strange how these forecasting agencies can so often make the near future look much better than the past!
Click for larger image.
Gail,
From Contractual year 2006 to Contractual Year 2007 (Gross withdrawals/production) minus operators own use (fuel gas and gas used for reinjection) there was a decline of around 1 % according to data from DECC/BERR. In other words the production was pretty level from Contractual Year 2006 to Contractual Year 2007.
What counts for this post is the decline from Contractual Year 2007 to Contractual Year 2008 (which started 01. October 2008).
The annual decline in Chart5.6, which you so kindly have copied in above, from Contractual Year 2007 (ended September 2008) to Contractual Year 2008 (ending September 2009) is measured to close to 10 % using Photoshop and Adobe Acrobat.
Next year by this time we will know the actual figure.
Yes, I have assumed an average 10 % decline in my simulations which this post also describes.