rising energy prices inevitable

Publié le 3 août 2006 par FOSSILIST

RISING ENERGY PRICES INEVITABLE

http://www.bnp.org.uk/news_detail.php?newsId=1054

Wham! – British Gas owner Centrica has said it plans to raise gas bills by 12.4% for its 10.7 million customers. The firm's electricity customers will also face a 9.4% increase in their bills from September. British Gas said "unprecedented high wholesale energy costs" had made the price increases necessary.

Wham! - Gas prices for customers of EDF Energy are set to rise 19 per cent, it has emerged. From Monday (31st) customers of the energy provider will have to fork out an extra 19 per cent for gas and eight per cent more for electricity. These latest rises come after EDF increased gas prices 15 per cent and electricity prices five per cent in March.
Wham – Crude oil prices have soared by 300% since 1999.
There is no escape from spiraling prices and customers switching from one supplier to another are only finding a short reprieve.

What is going on?

The rising tensions in the Middle East, a principle source of both oil and gas is a minor factor which has added a few dollars but there is something much more fundamental about the price of both fuels, which realtes to basic demand and supply.

The answer is that the global price hikes in both oil and gas are a result of increasing demand worldwide, especially from the likes of India and China undergoing rapid industrialization and the fact that it is now costing energy companies more to extract, process and distribute dwindling resources of finite fuels.

It’s called Peak Oil and it’s a crisis of potentially catastrophic proportions. For those interested in the science of Peak Oil please see our comprehensive reports we compiled last year.

Illustration

By way of illustration in layman’s language let’s take a single oil field, it has a fixed and finite capacity determine by the geology of the area. Let’s say oil starts bubbling to the surface after the drill has only gone down 50ft into the oil bearing rock, pumping it out is easy and the drilling company is making a nice profit on the early sales. However as the drill goes down deeper it proves to be more demanding in terms of energy costs to power the drill and the pumps and running costs of paying the men so while the drilling company is still making a living the profit is not as much as it was in the early days. Then comes a point when the costs of drilling deeper to get the remaining few barrels out of the oil well become too costly that for the drilling company to survive it needs to raise the cost of its sales. The price of oil goes up.

Now let’s look at the global scenario, those oil fields which were the easiest to tap into have been largely exhausted. It is a fact of life that we always go after the easiest pickings first, like literally picking apples from the orchard – we will take the ones that are within arm’s reach first of all, only when we have no more apples within arm’s reach will we trouble ourselves to either climb into the branches or go to the effort of sourcing a ladder, carrying it to the orchard and repeatedly stepping up the ladder against one tree before stepping down and moving on the next apple tree.

The oil reserves remaining are the more difficult to tap into. It is not just a case of having to drill deeper but accessing the reserves in the first place, ferrying equipment and men across more inhospitable terrains, further from the markets, the need to build longer pipelines to convey the oil from source to processor and from processor to market. It costs the drilling companies more in terms of energy to reach and extract the black stuff.

As it is with oil, so it is with gas, for basic scientific reasons relating to the chemistry of oil and gas, reserves of both are often close together in the same geographical area. The North Sea contains both gas and oil, but the UK is now a net importer of gas. Much of this gas comes from the Caspian and Siberia, both areas which have large oil reserves.

Inescapable

It is an inescapable fact that for simple supply and demand the cost of oil and gas will carry on rising, when the cost of oil rises the cost of everything dependent on consuming oil prices; not just plastics and petroleum, not just pesticides and artificial fertilizer, but the cost of conveying those cotton T-shirts knocked out of Chinese sweatshops for 50p a throw, the cost of flying those strawberries in from the Canaries but everything that is imported and conveyed by air sea, truck and train.

The political and social implications of the rising costs of all goods will be profound and this is where the British National Party comes into play. As a political party we cannot postpone the inevitable crisis, it will provide us a party and us as a nation with both overpowering threats to our liberty and very survival but contrastingly massive opportunities for change for the better in how we handle everything from food production, source our clothing, deal with policing and schooling to making decisions for our own people’s interests. It doesn't have to be a doom laden scenario, but a massive opportunity for change to a healthier, eco-friendly existence on a human rather than a mega-corp industrial scale.

Voters take to new ideas, even radically new ideas when the system that they have trusted, worked with, admired and felt comfortable with falls apart. We are going to make a lot of noise about Peak Oil because it is yet another example of how the current political process has failed the people of this country, how the short-sightedness of most of our corrupt, incompetent and downright traitorous politicians is very shortly going to create one awful mess and we rightly identify those individuals, those systems, those institutions that have been responsible for that collapse.

British Gas raises energy prices

British Gas says it is experiencing a 'difficult year'

British Gas owner Centrica has said it plans to raise gas bills by 12.4% for its 10.7 million customers.

The firm's electricity customers will also face a 9.4% increase in their bills from September.

British Gas said "unprecedented high wholesale energy costs" had made the price increases necessary.

News of the fresh round of price rises came as British Gas reported record losses of £143m during the first six months of the year.

'Annus horribilis'

Earlier this week, rival EDF Energy announced it would be raising gas bills by 19% from next Tuesday, while Scottish Power said two weeks ago that it would also be increasing bills.

British Gas increased prices by 22% in March, but since then the cost of wholesale gas has risen by 30%.

Continued volatility in winter gas and power prices in the UK provides further uncertainty for the second half of the year

Sam Laidlaw, chief executive, Centrica

Q&A: Gas price pressure

"Gas prices for the fourth quarter of this year stayed extremely high and, faced with substantial losses in British Gas Residential Energy, we have had to take the difficult decision to raise retail prices again," said Centrica's chairman Roger Carr.

But price comparison website Uswitch condemned the latest round of price rises at British Gas.

"The public assurance given earlier in the year by British Gas following their record price rises in February have been rendered meaningless to their customers today," said Anne Robinson, Uswitch's director of consumer policy.

"They face further price rise misery in what has become the 'annus horribilis' for UK households," she said.

'Volatility'

The British Gas price hike in March prompted some customers to switch supplier, and by the end of the six month period 432,000 energy accounts had been lost.

Mark Todd, head of Energyhelpline, said the recent price rises announced by suppliers would probably continue for the next year.

He urged consumers to "protect their interests and actively seek the best deals on the market" to save themselves on average £400 per year.

The losses at British Gas led to Centrica seeing overall pre-tax profits drop from £894m to £569m in the six months to 30 June.

"Continued volatility in winter gas and power prices in the UK provides further uncertainty for the second half of the year," said Centrica chief executive Sam Laidlaw.

Centrica said it would concentrate on "driving cost reductions and improving customer services as well as accessing competitive new sources of gas and power".

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The firm intends to build a new power station at Langage in Devon and has agreed a new coal-linked contract with the massive Drax power plant in North Yorkshire.

Centrica said expansion in Europe remained "high on the management agenda", while in North America the firm would continue to target business customers in Canada, Northern US and Texas.