Gas Market Continues To Tighten
By Paul Homewood
Fracking, anyone?
From the Telegraph:
Energy bills are expected to rise when the temperature falls this winter, as the price of gas soars amid a squeeze on supplies and storage.
The price for winter gas is close to 50pc higher than it was this time last year and experts expect prices to rise further, with costs passed on to households and businesses.
Supply jitters have unsettled the market in the wake of a cold spring, while the rising price of oil and carbon allowances drive costs higher still. Although major energy companies typically buy about half their gas a year before it is used, many smaller firms secure a tenth of their supply in advance, threatening higher bills for consumers or financial strain for providers.
In the UK market, winter gas prices are 71.75 pence per therm compared to 48.85p/th ahead of the previous winter.
Dutch and German traders are paying €25.58/MW (£23.13) for winter gas compared to €17.02/MW this time last year. Even buying gas one month in advance commands prices not seen since early 2015. Energy markets are riding high after European gas stores were depleted by the freezing temperatures brought by the “Beast from the East”. Local gas production has also continued to fall. Gas stores stand only 58pc full, compared with 77pc this time last year and despite substantial injections over the summer.
The task of replenishing these stores has become more difficult because North Sea production is dwindling and global gas players would rather sell in Asia where returns are higher.
US energy giant ConocoPhillips said last week that its Theddlethorpe Gas Terminal in Lincolnshire supplied its last gas to the grid earlier than expected after 46 years of production.
Meanwhile, gas production from the Netherlands is due to fall by a quarter compared to last year after the government agreed to wind down output from the giant Groningen gas field following earthquakes, after decades of drilling.
Shipments of gas via super-chilled tankers of liquefied natural gas are likely to remain in short supply as sellers divert cargoes to Asia, where prices are as much as a quarter higher than in Europe.
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NOT A LOT OF PEOPLE KNOW THAT 
How soon would large-scale fracking in the UK make a difference, assuming the reserves are where expected?
I wish there were a simple answer to that. Unlike the USA where a landowner owns all that is beneath his land, gold, oil, gas, coal etc. and can allow fracking quite easily on his land, the UK is very different. In the 1930s all oil and gas under the UK became Crown property and remains so today. This is why land owners seldom want to allow fracking – they get little from it except agro from the Greens.
Because the land owner can charge what he wants for access it is still possible for him to extort plenty of money. Of course, with the enhanced ability to drill sideways, it might be the people on the edge who get this!
IMO it is instinctive government policy NOT to look for gas. They would not want Britain to reindustrialize and become strong again, would they? For one thing, that might throw a spanner into the work of art that is their remoaner strategy.
In the USA, the landowner only controls the mineral rights beneath his land if he specifically owns them. My late father was a stickler for that and I grew up hearing about it. I OWN the mineral rights beneath my 5 acres because my parents made certain when they bought this property in 1937 that they OWNED the mineral rights. Many around here do not and have deep mines beneath their property which has led to many a sunken livingroom.
West Virginia is awash in natural gas from both the Marcellus and Utica shales. Generally with the fracking, there are pools of landowners who come to agreement with the gas drilling companies. It is not as simple as holding them up to whatever you want. We are developing some pretty good legislation which protects both sides in the matter.
Two pipelines are under construction right now which will take gas to the ports of the Norfolk, VA area. Perhaps we can interest Germany in a bit our WV gas instead of Putin’s.
Sadly western Europe would rather play martyr than embrace a safe proven technology.
For us European readers:
1 Therm = 29.3071kWh
So: “In the UK market, winter gas prices are 71.75 pence per therm compared to 48.85p/th ahead of the previous winter.” >>>
‘In the UK market, winter gas prices are 2.448p/kWh compared to 1.667p/kWh ahead of the previous winter.’
About 15 years ago the UK was self sufficient in gas. Now, although we use less gas, we import nearly half the gas we use. Fracking should be a priority for the Government and the nutters in the environmental lobbies should be ignored.
Frack, baby, frack!
And then you can export some gas to France where our enviro-mad energy minister doesn’t approve of fracking either. And also plans to reduce France’s “dependence” on nuclear to 50%.
We live in interesting times, Phillip my friend. Perhaps we had better pray that the warmists’ forecasts are right after all. Only joking. I think. But the alternative hardly bears thinking about!
The rest of the UK should refuse Scottish wind power unless Scotland gets fracking – if you ask me.
(Being able to dump/take power as they like enables them to install far more windmills than would normally be possible in a country/energy market the size of Scotland, and costs the rest of the UK’s bill payers dear?)
Independence also plays a part, an independent Scotland would immediately start drilling IMHO.
Yes, not something I want to happen, but I’m sure it would too. The latest figures showed that every Scot is ever-increasingly subsidized by the rest of us, thanks to ‘the formula’. Scots are not currently living in an economic reality, and are enjoying an advantage that will vanish overnight.
Frack or freeze
Frack or freeze
The CPRE have taken a stance on this. This is just one of several initiatives. I wish they’d stick to protecting the Green Belt:
http://www.cpre.org.uk/what-we-do/energy-and-waste/fracking/frackturedcommunities
CPRE are wrong to be organising local residents or the wider public into opposing planning permissions for fracking. Adequate gas supplies are essential for the nation’s wellbeing when fuel costs are rocketing at the present time, to say nothing of the contribution that home-produced gas will make to the country’s economy. Decisions on the siting of fracking plants therefore cannot and must not be left to a few selfish local opposition groups, wrongly motivated by CPRE who I believe are stepping outside of their role in opposing such a vital national asset purely on visual amenity grounds. The CPRE should not be consulted on whether fracking will ‘spoil the local landscape’ Unlike oil wells or coal mines, fracking plants will have minimum visual intrusion on the landscape, but will offer massive benefits to the country at large. Let’s get on with it without further intrusion by short sighted opposition groups and CPRE, we are already overdue in getting fracking underway in this country.
It is fascinating to read about all this winter storage and realize that none of it can help the plan to reduce CO2 emissions to zero to keep us from catastrophic warming?
“…this winter storage…”
Forward contracting is not storing – it is relying on other people to store or have capacity.
Making heating your homes and lighting them is designed deliberately to become increasingly prohibitive – that’s the plan and it’s all going swimmingly.
Until people start getting angry about the green madness and demanding that their political
masters– ah representatives (no don’t laugh) drop the green agenda – the madness will continue.Stop voting for liblavcon or, it’s lights out.
Coal, we need to go for coal – steam = electricity.
Oh dear,
maybe we’ll know more just after the October/November cold snap hits. 😉
Emergency!!!
We’ll have to build many more wind and solar ‘farms’ quickly – before the winter sets-in……
Get yer wallets and chequebooks out!