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“Fossil Fuels are a strategic asset” say people watching UK and EU perfect gas storm

It’s not even winter yet but suddenly all eyes are on the gas prices

Dutch TTF Gas prices in crude oil equivalent now trading at $148/barrels.

Gas through the roof…

Thanks to fear of climate change voodoo many nations in the EU have effectively stopped exploring for gas and decided not to frack their shale deposits to get cheap gas too. (In Australia too). Vainglorious governments aimed to change the weather instead of having cheap electricity and lo, wind-towers were built everywhere.

What could possibly go wrong? Nearly everything.

Even the massive size of the European market hasn’t saved them from price rises so large that retail suppliers are collapsing, and fertilizer factories are closing.

Its a great way to give your enemies the upper hand

The wind drought in spring and summer meant that wind farms failed.  Then the Russians squeezed gas supply in to the EU looking suspiciously like they were hoping to push up prices and pressure Germany into approving the controversial Nordstream 2 pipeline.  Now the Kremlin is suggesting a quick approval will alleviate the gas shortage (they’re just trying to help). In the latest news one large interconnector between the UK and France has suffered a fire and broken down and won’t be restored til March next year.

The GWPF points out that gas prices in Europe are three times higher than in the USA “where fracking is widely used and shale gas is cheap and abundant.”

Power prices soar after key electricity cable between UK and France catches fire

UK FlagBritish electricity prices jumped by 19 per cent to £475 per megawatt hour on Wednesday. A key electricity cable between Britain and France has been shut down after a fire, sending wholesale prices soaring. The fire will reduce imports from France until the end of March 2022, the National Grid has warned.

The bad news starts to unfold. With fertilizer factories closing, there may be food shortages:

In the UK two energy suppliers have collapsed under the price surge:

Sept 8th, 2021:   The record energy market surge has claimed its first casualties after two UK suppliers collapsed, leaving almost 100,000 customers without an energy supplier. PfP Energy and MoneyPlus Energy both ceased trading as the UK’s gas market reached a fresh record high on Tuesday while electricity market prices surged to levels not seen since 2008.

Fertilizer factories have been shut due to the high gas prices:

Record energy prices have forced two fertiliser plants in the north of England to shut down and brought steel plants to a halt, in some of the clearest signs that the energy crunch engulfing Europe could deal a blow to the UK’s economic recovery.

UK’s meat industry warns CO2 shortage could hit food supplies within two weeks

LONDON – Britain’s meat industry on Friday warned that an impending shortage of carbon dioxide (CO2) could cause massive disruption to food supplies within two weeks. The gas is used to stun animals before slaughter, in the vacuum packing of food products to extend their shelf life, and to put the fizz into beer, cider and soft drinks. Britain’s food supply chain, already creaking from an acute shortage of heavy goods vehicles (HGV) drivers and the impact of Brexit and COVID-19, is heavily reliant on fertiliser producers for CO2 which is a by-product of their production process.

Energy bills are set to soar:

Energy bills will soar by hundreds of pounds within weeks after dozens of cash-strapped suppliers withdrew their cheapest deals from the market because of soaring wholesale prices. Suppliers pulled their cheapest fixed-rate offers yesterday…  So few cheap deals are available that Compare the Market, which specialises in comparing cheap deals, temporarily closed its energy comparison service last night.

Suddenly energy self sufficiency is looking appealing

Gas prices are rising in the US as well, and even the US is paying attention.

Europe’s Climate Lesson for America

UK FlagUS Flag, Flying.As wind power flags, energy prices are soaring amid fuel shortages.

Wall Street Journal

Electricity prices in the U.K. this week jumped to a record £354 ($490) per megawatt hour, a 700% increase from the 2010 to 2020 average. Germany’s electricity benchmark has doubled this year. Last month’s 12.3% increase was the largest since 1974 and contributed to the highest inflation reading since 1993.

European natural-gas spot prices have increased five-fold in the last year. Some energy providers are burning cheaper coal, but its prices have tripled.

The U.S. is the world’s largest gas producer, but it isn’t immune from turmoil in energy markets. Natural gas spot prices in the U.S. have doubled over the past year in part because producers have increased exports to Europe and Asia. Exports are up more than 40% during the first six months this year over last.

Guess who benefits if the US adopts “low carbon” anti gas policies?  Russia, Iran and China,

This underscores how fossil fuels are a U.S. economic and strategic asset. The Biden Administration’s plan to curtail oil, gas and coal production by regulation would empower adversaries, especially Russia, Iran and China, which are the world’s three largest gas producers after the U.S.

Americans are already feeling the pain of rising energy prices. Electricity and utility gas prices were up 5.2% and 21.1%, respectively, over the last 12 months in August.

Anacortes Refinery, Washington. USA

Anacortes Refinery, Washington,  by Walter Siegmund

As I said in June, the EU was already being forced back to burning coal because no one was building gas plants because the experts all said they’d be stranded assets:

God’s joke on governments that try to control the climate with their electricity grid: 

Europe talks itself out of building gas plants in order to stop global warming, then after an extra cold winter, they also run out of gas, and now they have to go back to burning coal.

Spooked investors weren’t funding many gas plants now that the glorious renewable era was here and policy makers were all wearing their Hydrogen badges, and waving their carbon capture wands. In the last year all the geniuses of the European Investment Bank, the IEA, the European Commission were saying “gas is over” and it would be a stranded asset.

 

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