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Energy prices jump after explosion at gas hub in Austria

December 12, 2017
tags:

By Paul Homewood

 

From Sky:

 

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UK natural gas prices have jumped to a four-year high after an explosion at one of Europe’s biggest supply hubs.

One person was killed and 18 others were injured in Tuesday’s blast at the plant near Austria’s border with Slovakia.

The explosion set off a fire – and the facility in Baumgarten an der March was evacuated and shut down, according to operator Gas Connect.

Images showed huge flames rising out of the plant – situated 31 miles northeast of the Austrian capital Vienna – which were visible for miles around.

Gas prices in Europe soared on concerns about supply – at a time when consumers are using a lot more energy to fight the winter freeze.

In Britain, Europe’s biggest gas market, gas for immediate delivery soared 35% to 92p per therm, a level not seen since 2013.

The Italian wholesale day-ahead price surged 97% to €47 per megawatt hour, its highest-recorded level.

The market was already rattled by the impact of a crack that forced the closure of a major North Sea pipeline .

Brent crude – which had already been trading around its strongest levels since summer 2015 – rose above $65 a barrel for the first time since June 2015 – after it was announced that the Forties pipeline was to be shut down for a couple of weeks.

Ineos, which operates the Forties network, said on Monday that the small hairline crack was found last week during a routine inspection south of Aberdeen.

Emergency services attended the gas explosion in Austria, including more than 200 firefighters who tackled the blaze.

"I heard a huge explosion and thought at first it was a plane crash," said photographer Thomas Hulik, a resident of a nearby village in Slovakia. "Then I saw an immense ball of flame."

Police said the cause, which is believed to have been "technical", is being investigated.

The plant receives around 40 billion cubic metres of gas each year and redistributes it across Europe, including to Germany and northern Italy.

Gas Connect said there could be interruptions in supply to Italy and Croatia, but not to elsewhere.

Italy declared a state of emergency regarding energy supplies, while Russian gas giant Gazprom said it was working on redirecting gas flows to secure uninterrupted supplies to its clients around Europe.

Slovakia’s main gas transit route to Austria was suspended after the fire, Slovak pipeline operator Eustream said.

https://uk.news.yahoo.com/energy-prices-jump-explosion-gas-135000580.html

 

Of course, any disruption to supplies to Italy will have a knock on effect, as they will have to import from elsewhere, pushing prices even higher.

These events are a classic example of why you should not put all of your energy eggs in one basket. The UK is already relying in gas for half of its electricity, in addition to 20% from coal.

We really would be between a rock and a hard place if this happened when all of our coal plants are forcibly closed.

 

There is an impression that the UK has plenty of its own gas, but this is not the case. According to government data, we import more than we actually produce.

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https://www.gov.uk/government/statistics/gas-section-4-energy-trends

 

 

Most of the imports come from Norway, but presumably these could easily be re-routed if demand from the continent rose sharply.

 

About a third of gas consumption is used in electricity generation, with about the same going for domestic use.

 

This should be a wake up call both to get on with fracking and to keep our coal fired capacity open.

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22 Comments
  1. December 12, 2017 4:14 pm

    Reblogged this on Wolsten.

  2. Ian Magness permalink
    December 12, 2017 4:22 pm

    Jillian Ambrose has just published an article on this subject on the online Green Telegraph. Most surprisingly, there is not a single word, not even a nuance, referring to security of energy supply (surely a key deliverable for any government?) or the failure of our multi-£Bn wind and other renewable power investments to be able to help out in the slightest.
    Strange that.

  3. Joe Public permalink
    December 12, 2017 4:24 pm

    Also of note:

    Forties pipeline ‘will be shut down for weeks rather than days’:

    One of the UK’s most important oil pipelines is still expected to be shut down for “weeks rather than days”, as first images of the repair site were released.
    The Forties pipeline carries crude North Sea oil across land for processing at Grangemouth.
    The crack was discovered last week at near Netherley in Aberdeenshire and a 300m safety cordon is in place.
    Pipeline owner Ineos apologised to “our customers and communities”.
    The Forties pipeline carries about 40% of North Sea crude oil.

    http://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-42322771

  4. December 12, 2017 4:40 pm

    No need to worry, the World Bank says that solar is now so cheap it will not finance any more oil/gas extraction. Clearly timed for this week’s climate conference (where will it be next week, the BBC should know, as they attend them in force?). The Chinese must be laughing like drains.

    • Nigel S permalink
      December 12, 2017 9:33 pm

      Yes, a director of a local ‘community’ solar company told me last week that they got 6p per kWh for their electricity. A little research showed the price was 11p per kWh, about 20% more than Hinckley C. The ‘community’ scheme’s origins are changes to subsidies that meant the original commercial 10MW scheme had to be split into two ‘completely separate’ 5MW schemes to get 11p per kWh.

    • Nigel S permalink
      December 12, 2017 9:49 pm

      Very interesting article in WSJ (paywall) reported by GWPF on the geopolitical consequences of US fracking. We need to get on with it too as illustrated by the crazy Scottish ferry story with LNG fuel (Map 4.1 above) sent by road tanker from Kent.

      ‘Whatever you think of President Trump’s decision to recognize Jerusalem as Israel’s capital, it points to the most important strategic reality in the Middle East: Arab power has collapsed in the face of low oil prices and competition from American frackers.’

      https://www.thegwpf.com/walter-russell-mead-fracking-our-way-to-mideast-peace/

      • Nigel S permalink
        December 12, 2017 9:50 pm

        Sorry, meant to add that to the end of the comments thread.

  5. Vernon E permalink
    December 12, 2017 4:53 pm

    Brilliant data from Paul – how does he do it all so quickly? The BeeB (Daily Politics) today carried a totally one-sided report including interview with our climate change minister who seems to dwell in fantasy land – nothing new there then. But please, for reasons I’ve posted on numerous occasions, let’s not pin our hopes on shale gas.

    • John F. Hultquist permalink
      December 12, 2017 8:21 pm

      What? You prefer chipping the trees in North America?
      Go to Nukes and save our forests.

  6. Michael Urry permalink
    December 12, 2017 4:59 pm

    Why do we get the UK gas prices in pence per therm and the Italian in Euros per mwh? Is it simply to hide the ridiculous prices we pay?

  7. Curious George permalink
    December 12, 2017 5:06 pm

    One pipeline damaged. The End Is Nigh.

  8. tom0mason permalink
    December 12, 2017 5:25 pm

    Anyone else see fracking as, at least, a viable option to keep the energy supplies safer.

    • Joe Public permalink
      December 12, 2017 5:36 pm

      Everyone – except the blinkered.

      • David Richardson permalink
        December 12, 2017 7:56 pm

        So that is just about every politician, all the Green blob and most climate scientists then Joe?

  9. Joe Public permalink
    December 12, 2017 5:34 pm

    The 235-kilometer BBL pipeline connects the Dutch and UK gas markets (the pipeline into Bacton, Norfolk)

    Those of a nervous disposition look away now:

    Exhales sigh of relief …..

  10. Bitter&twisted permalink
    December 12, 2017 7:29 pm

    This is a wake up call to move quickly to diversify our energy supply.
    With Wind and Solar so cheap, it is a no-brainier.

    • December 13, 2017 7:44 am

      Wind/solar-only camping trips in winter would be a great education for the zealots/marketeers … no hot water or food, no heating.

    • Gamecock permalink
      December 13, 2017 12:03 pm

      “With Wind and Solar so cheap” . . . what about the land for it? How much will it cost to take and hold Spain? Or maybe Algeria?

  11. Jack Broughton permalink
    December 12, 2017 8:43 pm

    The “eggs in one basket” and “wake-up call” comments are all too true. We are almost totally dependent upon imported fuel and our storage capacity is now really poor. The UK is totally vulnerable to outside forces of all types in an unprecedented way.

    The only rapid answer is to refurbish the coal fired power stations and get coal storage up while coal is very cheap in world terms. This also requires that the accelerated wrecking of perfectly serviceable coal fired power stations is halted. The nuclear hiatus is of course adding to the concerns about the next decade.

  12. Colin permalink
    December 13, 2017 9:36 am

    I expect an article in the Gaurdian shortly: pipeline incidents show need for decentralised renewable energy supply.

  13. December 13, 2017 12:58 pm

    Several months ago, a group from the coal-producing states called for building some new coal-fired power plants to add diversity to our grid in the Eastern US. Of course, they were wanting to market coal, however, their arguments were well laid out for diversifying our electric grid by additional coal-fired plants. Coal plants are extremely reliable and not as vulnerable to terrorist activities as are pipelines, etc.

    Thanks to fracking, we in this area are awash in natural gas and now that Trump is President, the EPA and environmentalists have been beaten back to an increasingly dull roar. Pipelines are underway through West Virginia. However, using a local reliable source of fuel, such as coal, for power just makes sense. As we are seeing, a diverse power grid is one which is less likely to go down due to a shortage in one sector for whatever reason.

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