Updates
March 26, 2013: the harsh realities of life in the US without shale gas and misguided reliance on green energy -- Carpe Diem. Several articles linked at Carpe Diem; previously linked here at MDW; a reminder:
With the worst snow conditions in the country since 1981, it’s worrying, to say the least, that gas supplies are running low. A month ago, The Sunday Telegraph warned in this column of the problems of an energy policy that puts expensive, inefficient green power before coal-fired and nuclear power. There have been a few signs that the Coalition is at last turning its attentions to the issue but, still, not nearly enough has been done. Now we are reaping the consequences.
Because of a misguided faith in green energy, we have left ourselves far too dependent on foreign gas supplies, largely provided by Russian and Middle Eastern producers. Only 45 per cent of our gas consumption comes from domestic sources. -- From The (London) Telegraph, March 23, 2013.And the Brits used to have so much common sense. Britain was even touted as the center of the Industrial Revolution at one time. The good news: the largest wind farm in the world, the London Array, off the Thames River estuary, should start producing electricity this year. Will provide electricity for 750,000 homes.
Original Post
This article speaks volumes about the energy situation worldwide. Reuters is reporting:Centrica on Monday signed its first liquefied natural gas (LNG) import deal with U.S. firm Cheniere Energy for 20-years' worth of shipments starting in late 2018 as prices at home surge due to scant supplies.
The deal, enough to fuel 1.8 million homes, is the first ever long-term LNG supply deal for Britain and a breakthrough for U.S. gas in Europe.
Prime Minister David Cameron welcomed the deal for diversifying the UK's energy mix away from dependency on a small group of existing gas suppliers and for giving Britain its first taste of cheap U.S. shale gas.
Britain currently depends on Qatar for much of its LNG but high prices in Asia have seen supplies earmarked for the domestic market diverted to Japan and South Korea, depleting strategic stockpiles and sending prices to record highs.And deeper in the article:
Qatar and other established exporters refuse to commit long-term supply on anything but prices linked to relatively expensive crude oil, while Centrica has sought market prices.
It was forced to settle for a three-year LNG supply agreement with Qatar in 2011 after talks to secure a 20-year contract fell through.
Despite the deal, Qatari volumes of LNG to Britain plunged by 68 percent in January from a year earlier, according to shipping consultancy Waterborne.And,
Gas prices in the UK are on average three times higher than in the United States at $10 per million British thermal units (mmBtu), although last week's UK price spikes saw that premium widen dramatically.