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Written by Aberdeen Press and Journal
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Thursday, 15 December 2005 |
THE UK energy crisis is deepening. With the spot-market price of gas
hitting £1.70 per therm late-November compared with about 25p just
weeks ago, major industrial users are switching fuels, where possible,
or shutting down/restricting manufacturing.
Sectors like steel, chemicals and heavy engineering are already being
hit hard, with the Confederation of British Industry levelling
criticism at 10 Downing Street. A catalogue of strategic blunders by
Government and the North Sea oil&gas industry, coupled with
complacency, could deliver the coup de grace to what little remains of
British manufacturing unless a rapid fix is found.
But there is no easy solution, as became evident at the European Autumn
Gas Conference staged in London late-November. This is despite the fact
that the European Union has, within close reach, 60% of the world's
known gas reserves and UK supplies from Norway will increase
dramatically post 2007. Some delegates said the push towards a European
market based on short-term contracts was lunacy, while others promoted
the transition, which was kicked off by Britain's gas privatisation.
And great concern was expressed about LNG (liquefied natural gas)
supplies. Seen by the Government as a lifebelt, conference delegates
were told that LNG was mostly bypassing Britain and that global
competition for supplies outstripped availability with no sign of a
let-up. Some delegates went so far as to say that they wanted tighter
market regulation in the UK, not less. Energy understands that this
took Energy Minister Malcolm Wicks by surprise. John Sheed, Total Gas
& Power UK director, warned of increasing complexity of supply as
the EU gas industry was liberated, and that current shortages in
Britain indicated "just how fragile the current system is". "It takes
very few days of peak demand before there's trouble," said Sheed. ...
David Haynes, manager LNG services at Advantica, said there was a rash
of LNG projects worldwide, with up to 70 in the US and as many as 50 in
Europe. However, he said the European total would likely pan out at
about 25-30. "Potentially, we're seeing 30% of UK gas being supplied by
LNG from about 2008. However, it (the LNG) might not turn up. "We don't
actually have enough energy supply potentially in the world at the
moment to feed the demand that people are talking about in the
industry."
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Original article Aberdeen Press and Journal
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