Wednesday, Oct 22, 2008
Hard Times Approaching on the Horizon
The Guardian: Russia, Iran & Quatar Announce Cartel that will control 60% of world's gas supplies
As I've mentioned ad nauseam, the present financial 'crisis' is merely a monumental stuff-up over the handling of notional forms of wealth. The real wealth (underpinning the actual value of its representational forms - one example: currency) is being depleted and diminished at an alarming rate or, as in this case, being corralled by the new energy world powers. Britain is effectively finished. Its economy has basically depended on a global economic system which has now contracted alarmingly, and its indigenous energy supplies - vital for any sort of manufacture or production - are approaching exhaustion point. Its one thing to seize oil from a weakened state like Iraq, but who's going to start a war with Russia? Or its ally Iran, with its ability to block oil supply via the Hormuz Straits?
13 Comments
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1. mark wadsworth said...
The Russians and Iran need our money more than we need their oil. Even better, it appears that current crude prices are less than their break even cost of production. Hurrah for free markets, bringing autocracies to their knees!
2. lierbag said...
There are plenty of other nations competing for the same limited resources - therefore there will always be a buyer. Only now, we'll all have to deal with a cartel manipulating supply and price. Geographically, we're also the last customers but one (Ireland being the last stop on the line) of a very long pipeline - subject to bidding wars along the way, maintenance problems and possible terrorist attack. Then you have the certainty that at some point, producer nations start to conserve exports for their own domestic use - and aren't selling at any price. QAs for current crude prices, OPEC is currently looking at ways to drive the prices back up again. 'Hurrah for free markets' indeed.
3. plato said...
Looks like alternative energy resources need to be promoted to the number 1 investment and developement spots. At the same time creating the benefits of less pollution. This will create a strong internal economy and less international friction.
This is a whole new industry waiting to flourish. A chance for this country to save itself.
All that is required is good government. You know, the UK could lead the way, the technology is already here.
4. shipbuilder said...
Absolutely, Plato. Is our main/only alternative to importing fossil fuels really importing nuclear fuels instead?
We need to get a grip and be self-reliant - locally based power generation. Had a fraction of the cash spent on other things been diverted to a renewable overhaul of the UK grid, we would be in a much stronger situation now.
5. shipbuilder said...
The sad fact is that becuase of the abundance of oil, other fossil fuels and free markets, the technology of energy production, energy storage, energy conservation and the energy efficiency of transport and buildings have all stagnated to an embarrasing degree. Is there any huge difference between the construction of a house now and 100 years ago? Cheapest and shiniest rules, unfortunately.
6. shipbuilder said...
Actually, instead of free markets, I should probably have said capitalism, or the prioritisation of profit.
7. sold out said...
don,t worry people.Gordon brown has already announced his "loft lagging" initiative to conserve energy and create jobs for the soon to be unemployed.
The thought of an ex banker/estate agent/property developer/BTL parasite sweating away in some loft next summer, makes me smile.
8. mountain goat said...
Time to reopen more of our coal mines.
9. renting2 said...
sold out and mountain goat - let's get the two together an put all the "ex banker/estate agent/property developer/BTL parasite sweating away in some" mine next summer!
10. planning4acrash said...
Nonsense liarbag. We have 400yrs supply of coal, shedloads of oil, but fake environmentalists are being used to block investment. Why? Because the rulers know that the middle class is too rich to be dependent on the state, so will want it dismantled.
11. lierbag said...
P4C said: 'Nonsense liarbag. We have 400yrs supply of coal, shedloads of oil, but fake environmentalists are being used to block investment. Why? Because the rulers know that the middle class is too rich to be dependent on the state, so will want it dismantled'.
Do you have any verifiable figures to back any of these assertions up, or are you just making it up as you go along? Your 'good news' about coal is based on a meaningless figure; 400 years? Based on what rate of consumption? And how is it to be harnessed, in view of binding EU legislation on carbon emissions? The 'shedloads of oil' peaked in 1999 - which is why the infrastructure has increasingly been sold off, and why the Exchequer is currently losing revenues approaching £4-5bn per year, and our imports are up. Wake up at the back!
12. lierbag said...
A recent correspondent to the 'Daily Telegraph' expresses it better than I could:
'BP's Statistical Review 2008 reckons the UK's coal reserves as 155 million tonnes of anthracite and bituminous, lasting at the present production rate for 9 years. Over 70% of the UK's coal consumption is imported, so there is no indigenous sustainability.
It also shows the world's reserves as 847 billion tonnes, lasting but 133 years at the current extraction rate. Then half of it is sub-bituminous and lignite with a low heating value, so a doubling of consumption means that only around 30 years of the good stuff is left at most. German experts reckon on a peak in production in 2025.
Individual countries like the US and Russia will most likely conserve their large reserves for internal use, leaving the rest of us without it.'
Somewhat less than '400 years' then. But then, what would BP know?
13. mark wadsworth said...
Lierbag, there is a difference between reserves (= what you can extract profitably at today's prices) and resources (=what we know is there). In other words, if price of coal falls 25%, the amount of reserves might go down by half. If price goes up 25%, reserves go up by half, and so on.
Methinks P4AC might have been referring to resources.