What on earth is Friends of the Earth problem with natural gas?

ben-jerrys-ice-cream-102541The Friends of the Earth, or as the inadvertent gods of spell check once named them here, the Fiends of the Earth, recently overstepped the line from being guardians of the planet to just another fund-raising scam.

They added a fly in leaflet included in the UK magazine Private Eye and the London Sunday Times. Others, including Cuadrilla Resources, are making official complaints, but this is mine. I’ll just stick to the big issue here:

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Natural Gas trend-spotting: Enormous Changes of Tiny Detail

paleyaleyTwo recent events in the UK highlighted trends in natural gas that although they may now appear subtle are encouraging and significant longer term.

The first was last weeks European Shale Gas and Oil Summit in Manchester. It seems to me I get invited to so many “summits” that the term has long been devalued. Nevertheless, I had been invited months ago and figured a night in Manchester was karma payback for being at the truly useful, and great fun, International Student Energy Summit in Bali back in June. I am by the way happy to report that Manchester continues its trend of proving my southern cosmopolitan prejudices consistently wrong.

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Will the lights go out? Probably not.

BIRTHDAY CANDLELet me assure everyone I have no wish to be proven right, to say, “I told you so”, if the lights go out in the UK this winter -or next. I tend to think not, but the idea that the possibility is even taken seriously is symptomatic of something pathological within the UK body politic.

British, or to be exact English journalists, who insist they reflect voters’ views to politicians, have a variant of Schadenfreude, joy at the bad luck of others, that is especially clinical. The English must be the only people who derive pleasure or worse, a malicious self satisfaction, from contemplating their own misfortunes.

The When Will The Lights Go Out meme has provided an autumnal festival of self-abasement for years. I appeared in a BBC News piece on the subject back in 2004, when even I thought gas was running out.

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Positive Natural Gas: The new “untouchable”

6KG 14 4L SG295 Steel Cooking LPG.jpg 200x200The US shale revolution is echoing across the world, some times in places far away from its sources as in LNG. More initials are in a multilevel good news story in how even humble LPG is joining the party. 

Liquefied Petroleum Gas, long a niche product used by the poor to cook and the rich to barbecue, has become a rare bright spot amid a broad commodities rout, riding on the wave of strong economic growth in India and parts of Southeast Asia.

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A US shale to LNG Tsunami warning.

resistanceUK shale opponents consistently say UK shale production will be priced against volatile (i.e. rising) international gas prices as an argument against shale: The same old tired “It won’t change anything, so it’s pointless to even try” meme.

This,of course, is when they aren’t saying UK shale won’t be economic because international gas prices are falling. UK journalists outside of some very smart trade ones, have even less success thinking about wholesale gas prices than they do with the ins and outs of petroleum geology and oil and gas production. Thus, Greenpeace and Friends of the Earth can disinter cherry picked research from a distant shale past of 2012, doubtful at the time and irrelevant today, and as usual, it gets cited as gospel truth in the mainstream press. After all, why would Greenpeace lie. Unfortunately, Greenpeace and FoE have yet to reach their Volkswagen moment.

International gas pricing is an incredibly complex subject, in which A rarely leads to B and C sometimes travels to D via K. More and more, the letters we need to understand in Europe are simple: LNG. Liquified Natural Gas is the only way of joining natural gas markets across oceans, and when markets are physically connected, prices follow.This is a big picture view that doesn’t include the detail which so often disrupts it. LNG is open to multiple disruptors and one can blame US shale sometimes but warm summers (northern winter) in Argentina or nuclear plant closures in Japan or China’s economy change things too.

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Fracking and falling fuel prices: Another non controversy.

gaspricesGreenpeace have been saying UK shale won’t affect prices for so long it’s become conventional wisdom. As usual they’re half right. But which half? 

A key UK-centric issue is that the pricing structure of UK gas and electricity lacks any sort of transparency. In the US, and several markets besides, strong regulators ensure strict links with wholesale gas prices, and they go up, and down, with local and global markets, often monthly.

The UK holds a unique view where “competition” is the cause of lower prices, an idea that’s laughable in that other energy field, petrol/gasoline retailing. The costs of filling up a car are essentially the same within local areas. One could perhaps save money by driving 50 miles, but it rather defeats the point. 

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