Hutton and his New Labour "Lack of Energy Policy" Policy is FCUKED

There were wild scenes yesterday at the HQ of The Forth Coming UK Energy Deficit (FCUKED) when the the Labour Party train currently driven by John Hutton "Total lack of an Energy Policy" finally hit the buffers.

New Labour now have to face , after 12 years that ;

1. UK oil production is in rapid decline and the UK are now nett importers. (click graph to enlarge)
2. UK Natural gas production is in very rapid decline and we are now nett importers.
3. UK Coal fired Power stations (none of which have been built for 25 years) need either to be closed to meet EU imposed pollution limits - or simply become uneconomic.
4. UK Nuclear power outputs are falling faster than planned due to age / breakdowns

The brute fact is that the UK has been dancing on the edge because ;

1. Power producers have been running coal plants at the limit to sweat the assets whilst they can before forced closure.
2. We have had mild winters when the mothballed gas fired plants have just managed when required to pull us through.

Now we are faced with a total reliance of imported oil, gas and coal and that global forces have driven costs sky high -jhe expressed a comical belief that coal suppies were from friendly suppliers.

1. The Australians simply cannot keep up with Chinese demand for coal and we can easily be priced out of the market as shippers are happier to turn round quicker with the shorter China run. Austrilai has also suyffered catastophic floods in their Queensland coal fields which have hit their exporting capacity.

2. The South African state power company ESKOL has demanded that they stop shipping the best quality coal and let them use it instead of the waterlogged poor quality coal.

Of course the Government have not been idle in the Locust Years, plans have been put in place ;

1. A scatter of small low output, intermittent wind farms have been built (at a fabulous cost and a cost burden on the rest of the generating industry)- Total output on even the most generous assessment is not 2% of demand which rises at almost that level every year. Any further expmansion on a large scale - offshore, Lewis etc., have major technical / safety implications in running the National Grid and / or spending huge sums on expanding it.

For example there also similiar implications for gas supplies the very latest fields in production include several High Pressure, High Temperature (HPHT) reservoirs which typically are at 15-20,000 feet depth. Working at these depths is clearly testing current technology to its limits. Examples of such fields are Elgin/Franklin (Total) and Shearwater (Shell-Esso).

2. Foreign owned LNG terminals have been built but again the UK will compete (especially with the US) for supplies - there are also massive security / safety problems with gas. The Bacton gas terminal explosion 2 weeks ago requires explanation. The Newcastle terminal is reliant on a foreign owned and largely unproven re-gasification technology.

3. Storage of gas is hugely inadequate and the offshore North Sea Rough storage has had major problems. Until the mid-1990s, UKContinental Shelf (UKCS) gas was mostly produced from ‘dry’ gas reservoirs and, as a result of summer/winter swing in demand, producers could make use of lower gas demand in the summer to allow their gas reservoirs to recover. Many of these
earlier dry gas fields are now largely depleted and have neither the volume of gas left nor the resilience they once had. Most gas reservoirs developed since 1990 are ‘wet’ (i.e. the gas is associated with liquids, which could be crude oil, condensate or natural gas liquids). These reservoirs are much more complicated to operate and manage and the economics is often dictated by the liquids (eg Rough) . Liquids reservoirs do not cope well with swing and are typically operated in constant flow conditions. Also, the plant required to produce and process such mixed flows of fluids is more complex than that needed for dry gas alone.

4. Nuclear power plants (first discussed publicly by Tony Blair in January 2005) are still a sparkle in anyone's eye - production cannot be expected within 10 years.

5. When God distributed natural gas he did it not only in remote areas but often those with horrid political problems - Nigeria / Middle East or technical - Norwegian Arctic with attendant costs implications.

So now John Hutton faces the decision about the E.ON Kingsnorth power station in Kent and realises he has 2 choices;

1. Approval of this plant (which will be rapidly followed by several more)
2. Qualified approval with the demand that any plant must have integrated (as yet unknown and obviously unproven) carbon - capture technology which will probably double costs and load the project with high and unknown costs down the line.

What will he decide ? Well of course , faced with the fact that Planning Consent has gone through, there is no (or little) local opposition, he will fudge it, allow it to go thorugh with promises that E.ON "look at", "consider", "review the position" at some time between now and the end of life as we know it.

... and the possibility that if they cannot build a plant without those restrictions the German based E.ON, major partners in the North Stream Baltic Russian / EU pipeline will simply walk away.

He said according to the Times yesterday : “Our leadership role is best promoted by the actions we take on capping emissions, carbon pricing and supporting the development of new carbon capture and storage technology. Not by gesture politics.”

So Phase one of capping resulted in zero reduction in emissions ( and a massive windfall for the power companies). Carbon pricing is a fantasy world and a market dreamed up by the money jugglers in the City.... and new carbon capture and storage technology is like Nuclear Fission technology ... over the hill and away with the faeries as far as power production is concerned

Paradoxically the Party that talks sense on a future energy policy is UKIP - you are advised to you are advised to read their analysis and prognosis.

Here is a rough graph of how they see things until 2025 - they say 2020 but there isn't a cat in hell's chance of having the Nuclear power in place by then. Sensibly they see that the core production has to be by juggling gas / coal/ nuclear power - wind , solar, district heating, methane wastes, hydro will in the foreseeable future - say 25 years ,will always be a minority source.




For an always intelligent and thoughtful analysis of UK Energy Policy go to The Oil Drum (Europe) and information on FCUKED here