Category Archives: Current Affairs

India, London and natural gas. Connected more than you may think.

There’s a great natural gas story brewing in India.  Since there were 1.4 million British Indians in the 2011 census, and not many are members of the Friends of the Earth judging by this from their website..

We are keen to encourage applications from people currently under-represented in the environment movement, for example, black and minority ethnic people, and women in senior positions.

…the UK natural gas industry is missing a trick in explaining not only the advantages of shale to this important community here in the UK but to their families back home. They certainly won’t hear it from Friends of the Earth.

Continue reading India, London and natural gas. Connected more than you may think.

Observer Fact Check on UK Shale Gas

Andrew Rawnsley is the Chief Political Correspondent of the Observer, so what he says today about fracking will be read by many people who know little or nothing  about it. They won’t be educated by this and I’ll only refute the main premise here:

Frack-heads talk feverishly about the reservoirs of shale gas being the equivalent of Britain’s share of the original North Sea oil reserves. If that were to prove true, this would indeed provide a rich source of energy for Britain and a big boost to tax revenues for the Treasury. Some Tories even believe that shale gas could do for David Cameron what the black stuff did for Margaret Thatcher. The shale deposits under Lancashire alone, so they claim, could power the country for more than half a century. When they get really carried away, they reimagine Blackpool as the “Dallas of the North” with kiss-me-quick hats swapped for stetsons. Climate-change deniers are prominent among the frack-heads. Yet it also seems to offer something to greens because shale gas emits half as much carbon dioxide as coal.

Well, it is only human to dream and the temptation to fantasise about miraculous treasures is all the greater if you are a politician looking for relief from many more bleak years of austerity. The trouble with their dream is that it is very risky for Britain.

Continue reading Observer Fact Check on UK Shale Gas

Shale Gas: The View from Japan

A very good introduction to shale gas comes from Asahi Shimbun, Japan’s second largest newspaper, in a series that covers the US, Europe, China and Japan in well balanced detail that we can only dream about from the UK press. Given that the UK insists that gas prices will inevitably rise from Japanese demand, this provides a good reality check. Who are you going to trust? Those who say UK energy prices will inevitably rise based on Japan LNG  demand, or the Japanese themselves.

The usage of renewable energies also needs to increase, yet renewables will not be able to meet Japan’s huge energy demand any time soon. As a result, the country will remain heavily dependent on gas for the foreseeable future.

This makes the shale gas boom especially good news for Japan.

Another way of looking at it is that if the shale gas boom is good for Japan, it is catastrophic for the constantly rising gas price scenario spun by DECC, Centrica, CBI, the BBC and even the FT. Yet here we have a newspaper with a circulation (7 million) that the UK press could only dream about, especially since the Shimbun is a serious quality newspaper. The other contrast is how the Japanese government, especially post Fukushima when it has to promote national recovery on one hand and finds itself the majority shareholder in companies like Tokyo Electric Power on the other, is happy to talk up the national interest instead of being a disinterested observer as in Europe.

Continue reading Shale Gas: The View from Japan

UK Shale Gas or not, UK gas prices will come down

A key rationale for the UK government energy strategy is gas prices will be expensive.This from the BBC’s Roger Harrabin:

Prices won’t be certain either. There’s a popular notion that gas will be a cheap source of power. The truth is, it’s impossible to predict whether volatile gas prices in the 2020s will be cheap or expensive.

Nevertheless we can see from mulitple other sources that the UK government is making a dangerous bet that they will increase. A root cause is the outdated notion that a shale boom will have no discernible impact outside North America due to a combination of apart from bad geology, environmental opposition in “crowded” Europe and the fundamental continuation of the oil gas link which will lead to increasing gas prices. On oil, one has to consider surging US oil production is going to have a moderating effect on oil prices.Oil is far more likely to fall than rise for structural reasons as not only US, but also Chinese, Australian, Canadian, Argentinian and Russian shale oil hits markets as Iraqi oil production also surges post 2015. We’re not running out of either gas or oil anytime soon. But to go back to the link, two recent stories show that the oil/gas link is simply falling to pieces. First from Europe, where until now, Statoil has provided a lot of oil linked gas to Europe based on long term contracts, but new contracts are linked to spot markets:

The gas is priced at competitive terms related to German and NW European hubs. The gas will be delivered through existing pipeline infrastructure from the Norwegian Continental Shelf, with the bulk of the deliveries going to Germany

Continue reading UK Shale Gas or not, UK gas prices will come down

Why is the Japanese Government smarter than the UK’s?

In the you can’t judge a book by its cover category I must recommend the Natural Gas Daily published by Interfax Energy. Very complete and seemingly unbiased news about LNG and shale but from the surprising source of Radio Moscow way back. If you have the money, buy it.

Now let’s recall how informed Ed Davey, the Secretary of State for Energy and the director of the CBI are. According to them, Asian demand is going to push up prices for Europe. But what if we had this story from Japan, via Interfax:

Japan is committed to challenging the long-held view that Asian buyers are willing to pay high, oil-indexed prices for LNG to safeguard security of supply, analysts have told Interfax. This shift has ominous implications for the future of Australia’s increasingly expensive LNG sector and could jeopardise future expansions.

The concern follows comments made last month by Japanese Trade Minister Yukio Edano that Japan is experiencing an “outflow of national wealth” as a result of the high-priced, oil-indexed LNG import contracts on which the country has become increasingly reliant for power generation since 2011.

Speaking at the LNG producer Consumer Conference in Tokyo on 19 September, Edano called on countries to “brainstorm new measures as an alternative to the crude oil- linked pricing system”. The comments were supported by the world’s second-largest LNG importer, South Korea.

“LNG imports have grown rapidly since the nuclear crisis, shooting up from 70 million tons [mt] in 2010 to an expected 90 mt in 2012. For Japan, how to procure cheap LNG is a significant challenge to address both for the public and private sectors,” Edano told delegates.

The “paradigm shift” caused by shale gas makes oil-linked indexing “less reasonable”, he added. If new suppliers from North America, Russia and Africa enter Asian markets in a few years, “it will no longer be reasonable”, Edano said, noting that Japan will shortly begin studying the creation of an LNG futures market. 

Continue reading Why is the Japanese Government smarter than the UK’s?

How gas can help renewables. If they would only let it

Last week at the Shale Gas and the Environment conference I had a chance to try and engage Tony Bosworth of Friends of the Earth, Dr Stephan Singer Director Global Energy Policy WWF and David Kennedy Chairman, for a few more weeks, of Committee on Climate Change. On Thursday, I debated Doug Parr, Chief Scientist of Greenpeace UK.

What is notable in Europe is that we seem to be stuck with many greens, who have yet to get out of the ignorance, denial and anger stages of a cognitive dissonance over shale gas, and are not yet ready to start discussions about moving forward towards actually cutting carbon.  They too often confuse talking about cutting carbon with achieving it. That’s one reason why this site is called No Hot Air. No Hot Air means not only a carbon free future, but a realistic way of getting there.

Stephan S. is someone the shale industry can do business with. The others still have to learn that talking about climate change is far easier than actually achieving it. Kyoto has produced nothing at all. Copenhagen was a catastrophe, Rio ridiculous and Durban a disaster. But just as Einstein classified insanity, many greens continue to repeat the same actions and expect different outcomes. I can agree with them on climate change: Failure is not an option. The UK greens remain obsessed not with cutting carbon but on meeting outdated and unachievable targets. Or is it keeping the subsidies associated with them?

We don’t have a climate crisis, we have a coal crisis. If we stop burning coal, we solve the climate crisis on a global scale. Obsessing about UK targets that wouldn’t move the needle one way or the other is pointless posturing. The issue isn’t one of carbon production, but of consumption. Greens need a reality check on what is really at stake.

European greens, unlike many of their US counterparts insist natural gas is a short term dirty solution that takes away from what they believe is an energy future just around the corner. The reality as these slides, used in the Greenpeace debate show is that gas, like renewables is going to be here for a long time. So we better start getting along because it’s up to them whether or not gas will act in concert with renewables.

These two slides show the reality of the UK generation mix over the course of February 2012:

Continue reading How gas can help renewables. If they would only let it

How to save the earth in two easy steps

This from The Atlantic is worth reading in full, as it fleshes out a bit of my recent thinking over how shale gas can not only slow down climate change but actually start to reverse it. Here are some highlights:

You may not believe me, but I have news about global warming: Good news, and better news.

Here is the good news. US carbon emissions are decreasing rapidly. We’re down over 10% from our emissions peak in 2007. Furthermore, the drop isn’t just a function of the Great Recession. Since 2010 our economy has been growing, but emissions have kept on falling. The reason? Natural gas. With the advent of “fracking” technology, the price of gas has plummeted far below that of coal, and as a result, essentially no new coal plants are being built. Although gas does release carbon, it only releases about half as much as coal for the same amount of electricity. This is why — despite our failure to join the Kyoto Protocol or impose legal restrictions on CO2 — the United States is now outpacing the rest of the developed world in reducing our contribution to global warming.

Continue reading How to save the earth in two easy steps

The shale gas debate in France is just starting

While not denying the disappointment of President Hollande’s speech on shale gas at Friday’s Environmental Summit,  it is dangerous, for reasons I can’t reveal, to think it’s done, dusted and put away for the next five years.

Notably the shale gas debate is hitting the headlines in France far more than in the UK, and the majority of newspapers have criticised the decision (although I underline it’s too early to say exactly what that decision was).

Out of many pieces we have two significant ones. First Arnaud Montebourg, key member of the Hollande administration and in case any one forgets, one who gave Hollande a run for his euro during the Presidential Primary

So, shale gas, case closed? Not quite, says Arnaud Montebourg. “This is a debate that begins and that is important to fundamentally transform the country,” said the Minister of Productive Recovery after the first day environmental conference, which ends Saturday in Paris. “I think the debate will be open during the conference environment,  and among companies that use a lot of electricity, consumers are attached to an electricity price cheap, those who use alternative means of transportation that do not give CO2, in short all those who today are seeking solutions to change France are welcome in this debate, “

Montebourg is from the left of the Socialist Party and his strength among young urban voters especially is far stronger than the votes of the Greens, who received less than 3% of the first round.

Continue reading The shale gas debate in France is just starting

Cameron to stop dithering? Or is it too late for shale?

According to the Sunday papers on the eve of the first week of September as we wake up to find that the UK remains Olympic Champion in putting things off, fighting words from the PM:

David Cameron has signalled has vowed to show his “fighting spirit” to “cut through the dither” holding back Britain.

In an article in the Mail on Sunday, the Prime Minister hinted at a series of initiatives designed to breathe new life into the country’s flagging economy.

These included bringing forward controversial measures to boost growth by relaxing planning rules.

Here’s hoping. The reality is that shale gas and shale oil in the UK have been hampered by the government who just don’t seem interested.  The Tory press and people like The GWPF may put this as a battle between the coalition partners, but  I think the Tory party is prisoner of special interests headed by Centrica:

The Independent on Sunday has learned that industry experts made clear at a meeting attended by senior ministers, including David Cameron and Ed Davey, the Lib Dem energy secretary, that the UK’s reserves were smaller than first thought and could be uneconomical to extract.

Continue reading Cameron to stop dithering? Or is it too late for shale?