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30 comments on The situation in the UK

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brutus on January 6, 2006 - 3:44am Permalink | Subthread | Parent | Comments top
Volatility

For instance, gas is below $10 in the States. Why isn't anybody talking about that? It was $15, 2 weeks ago.

Are you trying to make people feel better by saying that in 2 weeks the price of gas swung 33% and that it currently resides 500% above the price the oil companies were promising just a couple years ago? What happens to an economy with that kind of energy volatility?

Yes, society can handle it, but not until society realize it has a problem, and if you think the people in the United States understand we have problem, your wrong. Remember we all realized 30 years ago that the supply of fossils fuels on this planet was finite and all we've done in that time is burn more.

And yes the speculators and the arbitragers love volatility.

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Oil CEO on January 6, 2006 - 4:26am Permalink | Subthread | Parent | Comments top
I missed where you were dialing in to say how non-volatile gas prices have been for the last 10 years. 3 months of semi-high prices and it's the end of the world? Please. You still can't tell me what the price of gas is in London.

I checked, but the Financial Times wants $300 for a subscription so I can read the article titled "Gas markets calm down." Maybe you have a subscription.

When I get around to it I'll post a chart I've got doing a crude-to-NG BTU comparison. I really wouldn't start even thinking about gas until is moves past 20. In fact, we want it past 20. That will give more incentive to the industry to promote it. We are going to need gas as a substitute for oil. We need to start building that infrastructure now. Low prices, no investment. We may need to see oil go above 100 in order to push up gas accordingly. WE STILL FLARE RIDICULOUS AMOUNTS OF GAS for no other reason than there is no infrastructure there to contain it.

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Roger on January 6, 2006 - 6:13am Permalink | Subthread | Parent | Comments top
Come on, we all know that the UK has a problem with her domestic Oil and Natural Gas production. In the second half of 2005, there has been warnings about the UK not having enough Natural Gas this winter, with potential shut-off of factories in case of severe cold temperatures. Well... the severe colds still have to come, but in the mean time Oil and Natural Gas production in the UK are now a staggering 13% down!!!
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brutus on January 6, 2006 - 1:30pm Permalink | Subthread | Parent | Comments top
I missed where you were dialing in to say how non-volatile gas prices have been for the last 10 years. 3 months of semi-high prices and it's the end of the world?

Hmm gas prices rising 500% in the last several years and that's not volatile? You might ask Calpine about that. Gas past 20 will allow the industry to promote it, as opposed the building of over 90% of new US electricity generation of the past ten years being natural gas fired and much of that capacity idle, it is in desperate need of promotion.

The US economy is built on cheap fossil fuels, the question is how that economy changes with more expensive fossil fuels and whether you can do it without a crisis. With a world economy growing at 2005 speed, natural gas will never be 2.50 as the oil companies promoted for the last ten years. All that infrastructure and even more the ability to "secure" it, say for example like we're doing in Iraq, is going to be expensive and that money is going to come from somewhere. The whole world wants it, not just Europe and the US.

I'm all for expensive fossil fuels, its necessary, but transitioning to new sources isn't going to be painless.

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