What happens when Gas Pipelines blow up.....

First published on www.williambowles.info for those with an interest in blown up gas pipelines and what happens and what plans the UK should anyone use such crude diplomacy. Copyright ... Forth Coming UK Energy Deficit FCUKED.

Note that it is 12 months today that T Blair first discussed the need for building nuclear power stations...see here

04/08/04 The Economic Consequences of the War on Terror
THE BIG BANG THEORY – The Bigger the Bang, the Louder the Silence by Edward Teague


Late sleepers in Ath, 30 km SW of Brussels were woken by a massive explosion at 8.55 am on Friday July 30th 2004. Fire and Emergency crews had been called earlier at 8.30 am to the Ghislengien Industrial Estate to investigate the strong and persistent smell of gas in the area but no evacuation of workers or local residents had been started.
Days after this massive explosion which left a crater said to be dozens of metres deep, reports are confused and totally lacking in detail. A huge incendiary fireball (”a mini Hiroshima” a resident described it), with a massive, soaring thick black reeking cloud, was in or near a cardboard box factory. A nearby motorway was closed. Between 12 and 16 people died immediately and some 200 were injured of whom 35 who suffered massive burns (many of them emergency service staff) and are not expected to survive.

A natural gas pipeline from Zeebrugge on the Belgian coast to Lille in France had exploded, possibly resulting from physical damage caused by local building work at the adjacent Diamant Boart plant which finished on 16th July. Several insurance companies are involved and lead insurer Assuralis estimate damages to be in the order of 100Mn Euros – approximately the annual retails sales of Nestle Kit-Kat in the UK.


The appointed examining magistrate Gerard Bresnoux has set up 2 resident experts on site.

Beyond these simple facts, and notification of the hurried arrival from holiday of the King of the Belgians and the Prime Minister Guy Verhofstadt who promised an “inquiry”, the World's press – judging from all available Web Press searches – has nothing further to add since Saturday July 31st.

The local newspaper La Dernier Heure and the Carrefours supermarket chain has set up a disaster fund for victims and their families which will close on August 20th 2004.

The UK media offered no comment or analysis on this massive and lethal incident and turned to the important issues of the day, Cherie Blair's swimwear, Lady Di's non-functioning fountain and the endless sex sagas of the denizen's of London's Soho Square.

Silence. A silence induced by an unwillingness to either rule out the possibility of terrorist action or even identify how such an accident (if that is what it is – and nobody is saying yet) punches a hole in the alleged UK “Energy Policy”.

DASHING FOR GAS

Consequent with the smashing of the coal miners and their Unions and the coal pits which fed the electricity power base of the UK, Margaret Thatcher encouraged the building of gas fired power stations in a so-called, “dash for gas”. Gas, a by-product of the North Sea Oil industry was abundant and, more important for the Balance of Trade, free, excepting extraction costs.

The old “Town Gas” produced as a by-product of coal has been replaced with North Sea Gas. This arrives via the world's longest undersea gas pipeline, 474 kilometres from the Shearwater and Elgin North Sea Fields – the SEAL Interconnector that arrives at Bacton. For years we have been shipping gas (what we economists call exporting) through the Interconnector, a 235 kilometre 1 metre diameter pipe to Zeebrugge. However SEAL production is declining alarmingly and we now have to operate a so called “reverse flow” (what we economists call “importing”) from time to time, this takes over a day to reverse directions and due to lack of pressurisation can only import gas at one third the rate we use to export it. Zeebrugge is planned to install 2 compressors by the end of 2005 and 4 by the end of 2006 and more after that so we can in future years import gas almost as fast as we have been exporting it. (Importing at a higher cost, naturally, than we previously exported it.)

The Zeebrugge terminal also receives Liquified Gas by boat that is fed into their “Huberator” operated by the Belgian company Fluxsys. France has two pipelines feeding gas from the North Sea one from the Zeebrugge Huberator (the now severely damaged pipe, which Fluxsys have elaborately but successfully by-passed) and another direct from Norway's Statoil via their Zeepipe both feeding Gaz de France. This belt and braces policy has thus ensured French national supplies, at least during the low consuming summer months.

However beyond the massive local damage, deaths, injuries and dislocations to the area, the blast can also damage pipelines forward and backward as massive pressure surges through the system. To fully establish the extent of the damage, repair costs and time schedule for repairs will take some time.

Examination and evaluation is being undertaken now. Whatever the news is, it will not be good. But don't expect to learn too much, like the investigation into the power cuts in London last autumn, the reports will remain “commercially confidential”. The last thing anyone in Government (UK or Belgian) wants, is for a public discussion about the safety and security of gas supplies, especially in the UK.

This is not to say the Mandarinate do not think about such matters. Since July 2001 a Joint Energy Security and Supply Working Group (JESS) has been examining the issues involved and has produced four reports, the last in May this year.

True to the fashion of such Inter-Departmental committees they take minutes, spend years and say nothing and always gloss over the really tricky bits. They consider both the “short term” and the “long term issues”, they seek market liberalisation, diversity of sources, the political realities etc., and of course they wonder about “physical unplanned interruptions” – which probably means something like the Big Bang last Friday in Belgium. (And now the Russians blowing up Georgian Power Lines are switching of the taps in Ukraine 25-1-06)

Long on evaluation, short on horizons, fuzzy with facts, they effortlessly fudge their Inter Departmental futures, safe that another annual report gets them 12 months closer to their Pension. No doubt somewhere in Whitehall shelves are groaning with Emergency Plans covering any “physical unplanned interruptions”, which they previously had no doubt prepared for CJD, Foot & Mouth, Immigrants legal and illegal, weaponry, body armour, equipment, required to fight in Iraq, etc., etc.,

ONE YEAR AGO IN ARIZONA


The Belgian explosion is mirrored trans-Atlantically in a little reported incident last year in Tucson. On June 30th the 8", 47 year old mild steel gasoline pipeline carrying 60,000 barrels per day of refined gasoline from El Paso to Phoenix Arizona, burst at the junction of Grant Road and Silverbell Drive due to “stress corrosion cracking”.

The pipeline operated by Kinder Morgan Partners who have $21Bn of pipelines and storage tanks throughout the USA, eventually made good the repairs, but not before the pump price for gasoline in Phoenix reached a price gouging $4 a gallon as supplies had to be trucked in from California.

There were two refineries shut down in California due to breakdowns and the late summer Labor Day weekend was looming.

Nationwide gasoline prices soared and they hit new highs in Canada. Refinery shutdowns for maintenance were hit by the massive power outage and plants shut in Ontario, Detroit and Joliet, Illinois.

Mr Kinder (Ex CEO Enron and friend of Kenny Lay) and Mr Morgan (also ex Enron) had to spend $10Mn repairing their pipeline, however they had had a good year previously. They improved Earning per Share by 29% and they had “reviewed the dividend in the light of recently enacted Federal Tax Legislation on dividends “ . That was Kenny Lay's friend Dubya who removed double dividend taxation, which meant they could (and did) boost the dividend by 167%.

With gas prices hovering around $2 gallon (3.8 litres in the US gallon compared with 4.6 litres in UK gallon) and over winter natural gas prices up 30% now hovering at $6 per 1,000 British Thermal Units up from last year's $4 the American consumer is facing big and bigger energy bills.

ENERGY ALERT

Energy is a fundamental requirement and cost to homes and industry in the US, Europe and Japan. In the OECD demand for gas is scheduled to rise from 250 Billion Cubic Feet (BCF) with 200 BCF produced within the OECD to a total demand by 2030 of 900 BCF, the growth in supply will come from outside the OECD from Russia, the Caspian, the Middle East and North Africa with some spectacular increases also from Bolivia and Peru.

This involves longer supply chains, more vessels to carry Liquified Natural Gas, (LNG). It is calculated that the world fleet of LNG carriers will rise in 25 years from a current 128 to 450 and that 60% of that gas will be used in power (electricity) generation. Many LNG terminals will have to be built both for export and import, potentially and lethally explosive real estate on the maritime coasts of the US and Europe.(Noe the worries now arsing from building 2 YES that is TWO LNG terminals in Milford Haven Harbour and the failure to disclose the Safety Reports etc.,)

The National Weather Service in the US expects a major Hurricane every 70-80 years. One is overdue. If a Force 4 or 5 step Saffir Simpson hurricane force scale hits the Gulf of Mexico this year, the impact on gas and gasoline supplies in the US will make 9/11 look like a tea party in terms of economic cost to the US economy. An economy already saddled with massive and rising double deficits on trade and internal budgets. Interest rates will rise, the dollar dive further and electors will freeze in their November homes, just when they are about to go out and vote. Alex, the first in the new season's Atlantic alphabetic tagging, a puny 90 miles per hour hurricane started the season rather late this week off the Carolina coast – keep watching!


The Belgian Big Bang, a modest blip in gas supplies (as far as we know), the Tucson pipe failure, are simply straws in the harsh winds blowing about increasingly scarce resources with almost unlimited world wide demand. They point up the concerns of a steadily rising crude oil price (Over $44 a barrel today / $20, 18 months ago) piggy backed by a rising natural gas price, fragility of extended trading routes, and ever increasing geo-political problems in the source countries. Live in the Northern States of the US? – get the wood burning stove serviced and go out into the forest and get those logs chopped. Live in the UK? Well JESS says the 2004/5 winter season is “indicating tightness of natural gas supplies”, but adds parenthetically and cautiously, (as Mandarins do) this is based on, “ a calculation of theoretical demand not a projection from actual demand”. Use gas to heat the home? Get the chimney swept and go buy some woodland.

Nobody commented when Chavez and Castro built up the anti-US alliance as they visited Iraq, Libya, Indonesia, and Iran in 2000. Nothing was said when in late 2000 the UN let Saddam selling his oil in Euros and not dollars and Chavez was doing deals with Castro. The silence was tangible.

Systems breaking down, pipelines blowing up – silence. Nobody listening? Or nobody talking?

Edward Teague