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Gas: They Want Our Bacon!
It has just been released that the UK came within 6 hours of seeing itself deprived of its eggs and bacon as gas supplies across the entire country depleted to danger levels on March 22nd. That meant that had it gone below that level and had the country not managed to get that supply flow open again, there would have been severe gas-supply cuts to many households in the country. But, it’s not only why that was allowed to happen that springs immediately to mind, but we might also wonder why that wasn’t revealed by the National Grid (that keeps data on the supply of gas in the UK) to the public before a few days ago.
Contrary to what has been reported recently, new investigations have just been released to show that the energy suppliers of the UK were in actual act withholding gas supplies from the country and have been accused of market manipulation. Prices have soared over the past two years for gas. Wholesale gas, which supplies both households and also electricity generation (so there is a knock-on effect from gas to electricity) are now at 70p per therm. That is a fall, but it’s still cooking up a storm. That price is way beyond the previous highs that we have seen. This time last year, prices stood at 57p. May 2009’s price amounted to a mere 28p per therm. Some are saying that energy produces are holding back on the goods in an attempt to control the market and up the prices.
The Liquefied National Gas terminal near London (Isle of Grain site) is used by BP and other major suppliers such as Centrica. On the very same day that the British ‘cuppa’ nearly ran dry because the country could only boil six hours’ worth of kettles, that terminal had a reserve of 40%. Similarly, the Liquefied National Gas site of South Hook (Wales), supplied by Total and ExxonMobil, had a reserve on the same day of 52%. Prices have now fallen to 70p a therm, but on March 22nd they reached the record high of 150p per therm. Were they in cahoots? Have they been manipulating the public, the state and the market?
Energy suppliers have issued statements that prices in the UK may have to rise again to cover increasing costs in the industry. The British Department of Energy and Climate Control is now threatening those suppliers with a state intervention in price control to maintain supplies to British customers, unless the industry gets its act together. BP has already been landed with a fine amounting to hundreds of millions of dollar in the US and some are calling for the same sort of action in the UK in an attempt to halt market manipulation of prices. BP was fined in 2007 and had to pay out the hefty sum of $373m to the US Department of Justice (for environment crimes and fraudulent trading agreements). Between April 2003 and February 2004 they were found to have fixed prices and manipulated the propane market. It was the highest fine ever imposed by the Commodity Futures Trading Commission (CFTC) in the US. It was a sign back then that the Commission and the US Department of Justice were not prepared to accept market manipulation. The British government has not been so categorical and it looks like energy suppliers have been cooking the market price in a fry-up of greasy manipulation in the UK.
However, it has already been brought to light that three of Europe’s largest oil exploring companies (Royal Dutch Shell Plc., Statoil ASA and BP Plc.) are already under investigation from the European antitrust regulators of the European Commission for price collusion, causing prices to inflate. The British government has stated that oil companies will need to cooperate to the full with the European Commission in the investigation over price-fixing. They have allegedly fixed prices and distorted the market since 2002. BP has already posted a first-quarter profit in the region of more than $4 billion this year, earning more than 30% over what experts said they would. Not bad for one of just many of the companies that has been withholding gas from the UK in a bid to get more money and boost prices in an already over-inflated market. What will they be asking for next? Suppose they’ll be wanting their cake and to be able to eat it. Let’s hope for all of us that the EU Commission hits them hard and that prices come back to where they should be!
Originally Posted http://www.tothetick.com/gas-they-want-our-bacon
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Isn't all the natural gas storage in the UK controlled by Crown Estates, a monopoly owned by the royal family? The queen and her insane inbred family needs MOAR MONEY dammit and right now.
"The queen and her insane inbred family needs MOAR MONEY dammit and right now."
Its great to be the Queen!:
Queen's £38m a year offshore windfarm windfall - because she owns the seabed
http://www.dailymail.co.uk/news/article-1323228/Queens-38m-year-offshore...
The Queen's husband loves the money but...:
Philip dismisses wind farms as 'a useless disgrace' and says people who back them believe in a 'fairy tale'
http://www.dailymail.co.uk/news/article-2063836/Prince-Philip-blasts-win...
The queen's family would be a huge step up from the malignant socialist and islamist cancers that are currently infecting England.
I gave you an up-tick for being willing to acknowledge and state the truth; but don't expect many more of them. Anti-elite sentiment runs strong here in the land of the un-free and the home of the rave.
You are off the wall
Off the hook, maybe.
Where are the criminal charges?
Yeah, appears the rule-of-law is just as dead there as in the U.S.
Feb Gas consumption would seem to suggest that the UK is maintaining its consumption at the expense of non sov euroland.
feb gas consumption in OECD Europe down 14 %
-6.8 % Year to date.
http://www.iea.org/stats/surveys/natgas.pdf
Czech republic – 20.4 % !
Finland – 24.4 %
France – 14.5 %
Germany – 14.1 %
Italy -17.8 %
Germany , Italy and the UK are the biggest consumers & have equal ~ levels of nat gas consumption.
Only sov UK is keeping up consumption at +.02 %
Spain – another medium scale user is down – 18.3 %
Netherlands (a big consumer) -10 %
Does Russia export to all of these countries?
One can see why Russia might be a bit nervous, with all this "austerity" (now we see where's it's occurring) and the threat of the Cyprian NG in the hands of the West.
fascinating. we're recovering over here...not much, but still a recovery has been in the offing for some time now. this should be resource price positive...which it was initially ("the Great Double Top") but now those prices are rolling over. you're looking at a fight over the American consumer unlike any other. i think people will move to these lower prices as well...but it's just a thought right now. the word when Google first appeared was "free." that was the title of a great book about that company. "free" is a dangerous...if not the MOST dangerous thing. "gives people ideas" as they say. we shall see how the market opens tomorrow. should be a wild week actually...."the exact opposite of the 90's."
I remember picking up a daily telegraph paper from that time with some gas shortage headline.
They were waiting for some LNG ship from Qatar or something.
The private utilties must destroy demand to maintain the rate of profit.
No new money must be spent on Nuclear or coal plants or whatever as it would dilute money claims over the market state system of extraction which requires scarcity.
James Meeks classic poetic look at the UKs energy disaster – especially post privatization.
A must read and the audio is great.
http://www.lrb.co.uk/v34/n17/james-meek/how-we-happened-to-sell-off-our-electricity
But the UK has been successful so far in externalizing these malinvestments.
See below
Thank you so much for the link to the James Meek article. It's absolutely delicious. I've been reading it slowly and thinking about what I already knew of these matters for an hour now; it's just beautiful. Human Stupidity in action. The academics with their theories of markets and business who've never been in business are just wonderful. It's a grand comedy, really. And of course, it was the inspiration for Enron, which was conceived as a criminal enterprise from day one; specifically to "import" this madness into the USA.
THe Qatari tankers are at sea awaiting the highest spot price before docking
Double post.
here come the American LNG tankers waiting to do the same thing...
@Sandmann
Therefore the Jap devaluation should help the UK energy balance as they are both the biggest buyers.
Yeah, one can clearly see the competition heating up here. This is how the US manages to escape (for now) the meltdown: it's the better-looking horse at the glue factory; horses 1 and 2 are dueling it out for first and second, and soon the placements will be known, after which the factory starts back to grinding...
No. The devaluation just means they'll ship longer strings of digits to Dubai. They're still going to buy what they need; t hey just shift the notional "price".
@Sat
We are no longer living in the "normal" post world war growth world.
The gas is simply not available for everybody.
The normal inflation of yesterday ...think 1970s was about dividing more digits into more BTUs
Now it means more digits into less (net) BTUs
Eventually this extreme level of globalization where countries don't really trade between their true domestic hinterlands (they just farm /extract the spice) will not be able to continue no matter how much inflationary juice they put into the financial box.
Its not monetary credit juice we need.
Its adding real fiat tokens in peoples accounts.
Then local resources will be used again.
http://www.youtube.com/watch?v=4bvMiwXRXf4
I'm well aware that it's not sustainable; and is merely another example of human folly. My only statement is that it will not help Grt. Britain; what I hope is understood is "next year", for instance.
@Sat 800
A extreme example of a negative energy hinterland for the "core"
Irish 2009 SEAI energy forcecast TPES.
Y2008 : 16,356 ktoe
Y2012 : 15,561 Ktoe
Y2020 : 17,052 Ktoe
Reality
Y2012 : 13,189 KToe
Given the rising population also these are the dynamics of a future famine within a decade or 2.
The EU has been the greatest disaster to hit Ireland since the Tudor banking conquest & their ranch system of extraction.
The idea is to run a declining amount of energy BTUs through more and more labour units (so as to extract labour value) until the total implosion of the society.
Much of the decline has been in oil
Forecast of 2009
Y2008 :8,964
Y2012 : 8,181
Y2020 : 9,952
Reality
Y2012 : 5,984
"Grt Britain" is a pretty big chunk for an individual to take on...
If you're looking to speculate then may you get all that's coming to you.
The TREND (as I and Cork note) is CLEAR. If you're looking out for actual needs (rather than "wants" for purposes of speculation) then, and yet another of the CLEAR things made repeatedly on ZH, reduce your dependencies! The House is stacked against you if you're looking to play the game- eventually you're going to dial up zero as the multiplier.
hmmm. "flash crashes." hmmmm.
Just nationalize it already. Problem solved.
The Bank of England needs to get it's ass in gear and start printing some natural gas.
Did anyone notice that the author of the post said, and repeated, Liquified National Gas; for Liquified Natural Gas; I think that's a good clue as to how smart the author was. And along the same lines; if the Bank of England did print Gas; I suppose it really would be "National Gas"; but I wonder if you could cook with it?
The blizzard of CB printing usually stays in the financial markets where it hyperinflates equiites, bonds, and mostly, derivatives. Which is a zero sum game of bidding higher and lower for the same worthless instruments.
But bad things happen when it leaves the playpens of the paper exchanges. It's when it hits real world real assets the supply driven and demand driven inflation starts screwing up real life. When they tried it in wheat, they got riots in Islamic Africa.
Even though it has no effect on the West's open-ended Soft Depression, really, it's better CB printing remained the hand lube for the financial market circle jerkle.
Good old fashioned Fascism is back in vogue. Different cast, different location, same general story line.
Facism, also known as Corporatism, the partnership of national government and large, usually monopoly, coporations.
But we all know who's the senior partner, don't we?
It could have been a pricing experiment or it could just have easily been either a cock up or series of cock ups.
This is very old "news". Pivotfarm's efforts to whip up our indignation at "greedy energy companies" is pathetic.
Hint: it's the govt's fault, you dumb peckerwood! The Dept of Energy and Climate Control??? What could possibly go wrong??
Yeah; I laughed out loud at that one. They really fell for the bullshit over there. The pathetic little underfunded University, (really should be in quotes), that the UN bought to start off the whole, "let's pretend it's science" program was located in the North Industrial Wasteland of England; so I suppose they were easily infected. The British themselves have had a drolism for generations now; they routinely refer to the Board of Trade, as "Bored of Trade"; which would be funny if it weren't true. It's always the government; in so far as they are supposed to govern; but instead they go into a swoon over the revealed truths of the mediums and their ectoplasm and table knocking.
Ah, the bleat of the Far Right Alternate Universe. Gubmint! Gubmint! Gubmint!
Corporations have been withholding supplies almost since the beginning of the oil industry. Call them pacts, cartels, trusts, agreements, associations, doesn't matter. Overproduction and the fall of demand have always been endemic. Indeed, the only real profits Enron ever made were by shutting down energy plants.
Please tell me you're an employee. It's offensive to work for multibillion dollar multinational corporations for free.
Get your head out of your ass. The corporations do that because they OWN the government. Since corporations are synthetic entities that only exist thanks to government charter, BY DEFINITION the problem is government.
dude..I am stealing your corps are syn. entities line
+1000
Not sure where you're going with this. The people who create a corporation and register it with the state Secretary of State aren't government employees, they have no public duties (they're keen on telling everyone), they just hide behind the legal fiction of a corporate entity. Gives them immunity from certain laws like paying their debts, paying personal income taxes, personal liability for torts, that sort of thing.
The Gambino Family doesn't have a legal charter filed with the Secretary of State, but they seem to have a lot of influence with the local government. Lots of influence. So legal recognition isn't vital.
If, just for fun, you call corporation influence with government 'corruption' and further, for the heck of it, call corruption a bad thing, it makes the question of who controls who a little clearer.
They're performing a government-only function: creation of a limited liability corporation. It is not the will of the people or any market to allow such a thing to exist.
Meanwhile a lot of elderly fret about keeping warm. Only god knows how many have perished in recent years at the hands of these bastards.
You must mean the bastards who told them; over and over again, on National Television; that "snow would soon be a thing of the past"; as global warming took hold; and planned accordingly. The overall system; which is only semi-functional is mandated by the Government.
How many people have perished in the past without the advantages of natural gas?
Your post leads to the idea that natural gas is a right and an atrocity has occurred with that "right" isn't available. That is inccorrect. If I take your view point, why aren't you bitching about the millions in other impoverished areas that don't even have natural gas? So who is the real bastard?
Interesting straw man. Though the natural gas industry, like any other industry, externalizes part of their cost to the larger society, and it's only convenient for both parties to take out payment in kind, that's too old fashioned to be cool. Still, you're hearing things not said.
Anyway, a business without a body count is for pussies!
Oh, boo-hoo-hoo, let's wail about freezing british pensioners, too! Are you insane? Do you have any fucking idea how the Govt (again!) pays their energy bills? STFU!
The 'free market' works best fact-free. Governments avoid gathering facts about death-by-poverty and the corporate management avoids being nationalized.
Misplaced morality about government assistance is the usual divide and conquer wheeze. Paid by the post? Or on retainer?
Wht bother at all to cook that garbage food that is British food.
Yep, in Hell, the Brits are the lovers, the Germans cook the food, the Italians are the lawyers, and the frogs are in charge ....
It's not garbage in our house. Local free range chicken, Hereford beef, Welsh lamb, Gloucestershire Old Spot pork and Tamworth loins, grass-fed geese, superb cheeses, and all the fresh seasonal vegetables you could want, including Evesham asparagus (rounds of gras), Pembroke new potatoes, strawberries, raspberries, Perry, Wye Valley bitter from Norfolk barley..... I could be here all night.
The cost of cheap natural gas in the US is high gas prices elsewhere.
Dafuq? Nat-gas isn't oil. Some of it's exported but much of it is more locally sourced in pipelines, as in, not crossing the oceans. ya, I'm stretching "local" a bit there.
Maybe you're meaning all the inflation exportation via the currency wars.