Insight: Tilting at Windmills...
Sunday, July 08, 2012
As I have remarked before, one intriguing aspect of media commentary on the hoped for ‘turnaround’ in global economic fortunes is a perception that the energy industry may play a key role, by dramatic increases in supply, thereby dragging prices, especially oil prices, down.
By David Bamford, OilEdge
For example, see “US economy is stepping on the gas” where one focus is on shale gas (the “Shale Gale”), the investment it is attracting and the new jobs it is creating. When coupled with the emerging wave – that of shale oil - not only is a considerable drain on the US currency to foreign shores going to be avoided but the USA can begin to contemplate domestic energy security, not to say self-sufficiency, for the first time in over 40 years. No doubt Washington will claim that all this results from some sort of government ‘master plan’ – but viewed from the outside, it looks like it is the result of the operation of market economics.
When it comes to ‘master plans’ of course we naturally look to Brussels – OK, OK, I was joking!!
What about the UK? Well, I continue to dig around in the websites that exist under .gov.uk beginning with that for DECC, or to give it it’s full title, the Department for Energy and Climate Change which gives somewhat of a clue as to this body’s priorities. It’s a bit of a struggle to detect anything that could be called an Energy Strategy but I did find the 2011 Annual Energy Statement by the then (since resigned) Minister.
Apparently, DECC’s vision is of steering us away from excessive reliance on fossil fuels and onto clean, green and secure energy; there will be a thriving and globally competitive low-carbon economy. Apparently.
On the supply side, it foresees an interesting mixture of energy sources – renewables, new nuclear, and fossil fuels. Recognising that renewables may be marginal – at least for a while – and ‘new nuclear’ will take a while too, gas features strongly and there is reference to ‘clean’ coal via carbon capture and storage; I’m sure the word ‘oil’ is in there somewhere, I just can’t find it!
So, what is actually happening? Well, there doesn’t seem much sense of urgency but ‘we’ (I use this word in its loosest sense to describe the actions of the folk in Whitehall – elected and unelected) seem to be awfully keen on covering the UK’s countryside and inland seas with windmills and considerably less keen on shale gas……..at least to judge from the two most recent consultations (one from DECC and one from a group of earnest academics). These seem to propose regulations and hurdles which have very little to do with the reality of what happens in actual operations in the USA - I wonder if any members of the panels actually visited there and looked at typical operations in the Bakken, say?
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