Flip-flop…back to your 10th March 22;22 post; so let me immediately make one thing clear, I am not expecting the Uk to either worry about, or actually supply, Europe in shale gas. In basic numbers, never mind EU gas CONSUMPTION, as the UK roughly consumes around HALF of the entire EU PRODUCTION, their energy prices and security can not be our concern.
And lets remember that the UK is not the only country sitting on shale energy. Russia unfortunately is also rich in shale gas, BUT China and the U.S. are likely to become the largest shale EXPORTERS, with Argentina and Mexico fairly close behind, but quite how that can be piped to Europe, again that is not currently our concern, but will help keep a lid on market prices/volatility.
But in the context of your post 10th March , just taking the U.S. as an example of what we could do domestically, they are first satisfying domestic demand (and security) before exporting shale gas – with the following (I’m sure arguably) positive repercussions mentioned in the link below.
“How the U.S. shale boom will be felt around the world”
www.cnbc.com/id/101416763
I’ll get to MARKET PRICES and storage in a moment, but the security of UK GAS supplies clearly is our problem, especially when we consider our usage in split into 3 roughly equal sectors; our electricity generation, our domestic/heating uses and our Industries – all nationally imperative to our daily lives, especially as electricity power ‘outages’ are already due within a few years, or the first severe/prolonged UK winter.
For the sake of my argument, lets assume that the estimated figures on shale gas reserves are correct and the 10% recovery statistic is correct. The UK apparently has 1.300 trillion cubic feet of ONSHORE shale gas (just across 11 counties, never mind the rest) and if only 10% of that is recoverable, on back-of cigarette packet calculations, that is around 50-years of OUR needs. And that is without the OFFSHORE shale gas, potentially estimated to have reserves several times our proven onshore reserves.
Safety of lifting the (fracked) gas aside, why would we choose not to get both the energy and economic benefits of shale energy, while other countries blessed with the ‘stuff’ see all the domestic potential benefits and start exploration/lifting? Storage of 30, 60, or even 90-days gas supplies MAY protect us from short term energy ‘shocks, but storage will not protect us from medium to long term upward price trends.
To expand on my storage view, I’ll reiterate an earlier point, in an already ‘tight’ energy market, most country gas producers to my knowledge are not sitting on huge excess capacity that can be turned up at a moments notice, so the majority of their ‘product’ has been bought (possibly months before in the Futures markets) in fixed quantities and fixed prices. So in an energy ‘shock’, that can last for years as a threat or event, there is a bun fight for any spare energy e.g. gas, just as the price has rocketed (remembering markets ‘discount’ good or bad news into a price often several months ahead).
And currently whether we doubled our storage or not, the UK (as an importer) has to join that bun fight and pay whatever they have to,
Now you could rightly turn my earlier information back on me and say, let the other countries exporting shale gas stop the price rises, but that can no more be relied on than say OPEC, meeting and then collectively lowering the amount of oil lifted to maintain an oil price ‘around $90 to $110 that they consider both protects the countries within with higher production costs, and is ‘fair’ to all. And the richer the emerging countries become, the more energy their populations will need/consume, putting further upward pressures (that currently doesn’t exist) on energy prices.
Finally, I agree shale gas will not solve our energy problems now, but IMO whether financially or practically, with electricity outages soon, we have left it far too late to explore and nationally invest in ‘alternatives’, as no decisions were made when we HAD the money and time.
If we had acted on policy statements around 2005, we would be on schedule to replace nuclear energy in 2015 to STOP those outages, rather than having just started on them. If as a nation in the 2000’s we would have made less profligate 'fat government' choices and invested more time and money in renewables, one again we would also be tapping that energy now.
Instead we are heading for £1,500,000,000,000 (£1.5 trillion) of national debt by 2015, and in the likelihood of an anti business Labour administration coming in until 2020, the ONLY way of reducing the interest on that debt, never mind the principal amount, is by business profits/growth, spending cuts, and/or tax rises. Isitmebut is it a stretch to see under Labour lower business growth, less spending cuts and more taxes?
This to my mind puts the final nail in national renewable energy investment and makes the fracking tax receipts and energy supply/security, for all businesses and consumers, somewhat of a national necessity.