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Time for a "Russian energy weapon" scare?

by Jerome a Paris Tue Jan 5th, 2010 at 09:50:52 AM EST

Britain facing gas shortages as freezing weather continues

Britain is braced for the prospect of running short of gas as the country is gripped by one of the coldest winters for a century.

For the second time ever, the National Grid yesterday issued a warning to energy providers that demand for gas is threatening to outstrip supply.

The article notes that the first time that warning was issued was in March 2006. when I look at my Russian-Ukrainian gas series, I see a large concentration of articles at that time (the first crisis with Ukraine was actually in early January of that year), suggesting that politicians in the UK found it expedient to blame problems on some familiar and plausible enemy rather than own up to their lack of energy policy.

Hopefully, this time, the big announcements due later his week on offshore wind (as discussed in my story below) will provide a better way for the British government to talk about energy. But just in case, let me provide a link to my November story: Some predictions on the forthcoming Russian-Ukrainian gas 'crisis'...


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is that we have pretty tense situations on the energy front - oil is above $80 again - despite being in the middle of the worst recession in decades, and despite an unprecedented fall (the first ever, in fact) in power consumption in Western countries last year.

Of course, very cold weather explains the stress, but imagine what it would have been if the baseline consumption have been the "normal" few % higher...

The resilience of our energy infrastructure seems to be weakening.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Jan 5th, 2010 at 09:53:58 AM EST
Luis's diary: It's cold

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Jan 5th, 2010 at 09:57:06 AM EST
Here's an 'American take' from Peter Doran, from the Center for European Policy Analysis in Washington: 'Europe Should Stop Whining and Find Its Own Gas'.

Europe's disorganized approach to energy security once again threatens to leave its citizens out in the cold. After Russia and Belarus failed to agree on tariff rates for crude oil exports when the previous agreement expired on New Year's Eve, Russia briefly cut off oil supplies to its smaller neighbor. This left Western Europe, which relies on Belarus to re-export much of its oil supply, facing the possibility of energy disruptions in the dead of winter. This dispute is just the latest example of how Europe is paying the price for its unwillingness to invest in new energy sources...

Unless Europeans are prepared to match the Chinese dollar for dollar (or rather, euro for yuan), EU policymakers need to develop alternatives to provide their citizens with meaningful energy security. As of now, Europe still has a number of viable strategic options.

The European Union needs to tackle its energy problems as a collective, instead of a haphazard collection of individual states only looking out for their short-term interest. Europe should develop an approach modeled off NATO's collective security pact, where members -- potentially including the United States -- would agree to share reserves and help each other in the event of a future energy disruption. Nowhere is this more necessary than in Central Europe, which is most dependent on Russia. Brussels has provided countries with a variety of regulatory options, and Central European governments must ensure that they synchronize their laws to provide the strongest possible protection against foreign energy monopolies and predatory behavior in the marketplace. Finally, Europe must abandon its emphasis on pipelines and look for other options to diversify its energy supply. Liquid natural gas transported in tanker ships, for example, would allow Central European consumers greater access to the global market for energy, forcing Russia to compete alongside producers from Qatar and Nigeria.

Barroso was correct: Europe needs a more unified response to energy. However, rhetoric alone will not heat European homes and businesses during the next crisis. If the European Union is going to deliver more than pipe dreams, it will have to bring its policy in line with its ambitions.

Doran's focus seems entirely on fossil fuels and willfully overlooks Europe's investment in wind and solar. There are other ways to heat homes in Europe other than burning natural gas.

Swapping pipelines for tankers seems to me to be ignoring the problem that dependency on a foreign source of energy creates. Is exchanging reliance on floating pipelines in the form of supertankers any more secure than a relinace on overland pipelines?

Reading between the lines, I question Doran's suggestion that the EU would benefit from a NATO-like alliance for energy disruption with the USA, especially without equal consumer prices for oil-derived products and a mishmash of building codes for insulation and energy efficiency. Why should Europeans subsidize cheap energy for Americans?

by Magnifico on Tue Jan 5th, 2010 at 02:48:14 PM EST
That's a really stupid article, based on a number of faulty arguments.

  1. In spite of all historical experience and evidence, Russia is not a reliable gas exporter.

  2. Nations that have invested heavily in security of supply should let nations that have not done so become free riders.

  3. LNG is tradrf on a global spot market (in the real world, most of the time there are long term fixed price contracts, just like with pipelines).


Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Jan 5th, 2010 at 02:56:12 PM EST
[ Parent ]

This left Western Europe, which relies on Belarus to re-export much of its oil supply, facing the possibility of energy disruptions in the dead of winter.

Russian oil transiting through Belarus can only reach a few old refineries in Central Europe. Russia doesn't like using these pipelines because they lead only to fickle clients (who know they are the only paying customers and thus have leverage) or to FSU refineries which find creative ways not to pay.

Europe had no shortfall in oil - oil can be found on the seaborne market rather easily (and most Russian exports go through waterways controlled by EU countries, ie the Baltic Sea or the Mediterranean...)


Unless Europeans are prepared to match the Chinese dollar for dollar (or rather, euro for yuan), EU policymakers need to develop alternatives to provide their citizens with meaningful energy security.

Erm, yes, we can easily buy oil given that our consumers pay oil products 5 times the price of oil thanks to high taxation...

And we are developing alternatives: wind. France did nuclear


The European Union needs to tackle its energy problems as a collective, instead of a haphazard collection of individual states only looking out for their short-term interest.

Hmm... let's see. France did nuclear and gas import diversification (including the very LNG terminals that the article moans about later). Germany did long term gas import contracts. The Netherlands did long term rationing of the production of the Groningen field. Denmark did long term support to wind, translating into world leadership.

Deregulated markets? Err....


members -- potentially including the United States -- would agree to share reserves and help each other in the event of a future energy disruption.

Erm... Europe doesn't have reserves (well, the UK and Norway still do for a short while). We do have strategic storage, as coordinated by the IEA "a sort of energy NATO" - and in fact we did send some of our strategic reserves to the US following Katrina...


 Central European governments must ensure that they synchronize their laws to provide the strongest possible protection against foreign energy monopolies and predatory behavior in the marketplace.

foreign monopolies are not bound by our domestic laws. They don't have to sell if we don't show them the interest to do so. We can't regulate them if they don't want to.


Europe must abandon its emphasis on pipelines and look for other options to diversify its energy supply. Liquid natural gas transported in tanker ships,

Pipelines to Europe can deliver gas only to Europe. LNG tankers can deliver gas to whomever will pay for it. How is that superior? (the diversification argument works, but it's not about pipelines vs LNG per se).

Barf.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Jan 5th, 2010 at 03:36:19 PM EST
[ Parent ]
Wind is not much of a solution to gas shortages, either for heating, or as peak electricity dispatch generation, and solar actively makes things worse by hitting its lowest output exactly when demand peaks.

If we want to get rid of the volatility of the gas market, we need an energy policy that makes gas unnessesary, both for electricity and heat -
heat:
 For low density areas, the country side and suburbs, heat pumps have very good economics - Short time scales for repayment of the investment, and very low maintainance and operating costs, but for the cities where there isnt a convenient garden or field to bury pipes in, the only alternatives to gas heating is electric resistance heaters and district heating.

Carbon neutral district heating means "Build nukes in city centers" what with windmills not producing much waste heat, and while that would probably become politically possible if people wiev it as a choice between that and freezing, it also means we would need a nuclear design that was easily scaled to the size of the city in need of heating, rather than the actual current situation of "reactors come in a choice of Enourmous, gigantic, and mindnumbingly large" -

Electric resistance heating works with any source of power, and if designs with heatsinks are employed, could do demand management by heating said sink at night during minium power demand and price, but this also means that power needs to be cheap and reliable, which again, means nukes, tough this solution plays nicer with the actually existing designs, and lets you place the reactors where you like.

Peak electricity dispatch: Only even remotely economic way to displace gas here, is with pumped storage facilities, which are not strictly speaking generation, but more a way to turn base generation into peak generation.

by Thomas on Fri Jan 8th, 2010 at 05:04:01 AM EST
The problem is not so much that we use gas for power generation, but that we use it for baseload generation. That's what's wrong with current policies.

Gas-fired plants are the ideal complement to wind in that they can step in when wind is not available (and hydro or pumped storage is not), so the goal is not to eliminate gas, but to keep for the most valuable roles.

For district heating, I doubt that nukes can do it. The Danes have been pursuing biomass CHP plants and that can be peplicated in a number of places.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 8th, 2010 at 09:13:32 AM EST
[ Parent ]
Garbage incinerators also produce heat that's put to use in district heating. Hypothetically, they could also drive generators, but I don't know whether they actually do at present.

Of course, incinerating garbage does pose the problem of rendering unrecoverable a number of non-renewable raw materials that could otherwise have been reused. Whether this will become a dealbreaker remains to be seen, but it is a problem that we will have to deal with, because burning off perfectly good reusable resources is a luxury we can ill afford in this century.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Jan 8th, 2010 at 01:34:06 PM EST
[ Parent ]
Garbage incinerators also produce heat that's put to use in district heating. Hypothetically, they could also drive generators, but I don't know whether they actually do at present.

The new garbage incinerator here in Uppsala is a state-of-the-art CHP system. A bit over 100 MW IIRC.

Of course, incinerating garbage does pose the problem of rendering unrecoverable a number of non-renewable raw materials that could otherwise have been reused.

This problem is easily overcome. When Sweden signed the antipersonell mine ban treaty and couldn't use AP-mines anymore, we renamned them "defence charges". Hence, we got the brilliant idea of renaming garbage incineraion "energy recycling". ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Jan 8th, 2010 at 02:55:33 PM EST
[ Parent ]
It's not the energy I'm worried about.

It's the copper, aluminium and iron that goes up in the air and is scattered to the winds...

Or, at best, is oxidised so far into uselessness that recovering them becomes a real energy hog.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Jan 9th, 2010 at 03:36:01 PM EST
[ Parent ]
burning off perfectly good reusable resources is a luxury we can ill afford in this century

Butning off perfectly good petrochemical feedstuffs is another thing we can ill afford.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Sat Jan 9th, 2010 at 03:39:44 PM EST
[ Parent ]
The nuke people I've been talking with discounted nuclear in the district heating role, because they can make power instead, and that's more valuable. Sure, if you reduce power generation a bit you will get far more energy back in the form of 100 degree water, but you can only sell that at capacity during a few winter months. During the rest of the year you'll have an oversized nuke. That costs money. What if you instead build a small reserve turbine that you shut down during the winter? Well, these turbines are pricy. They might well cost hundreds of millions of euros. It's hard to make that work economically when you by definition need to keep this reserve turbine offline as long as the district heating system is online.

Of course, a week after they've explained that it was an economic impossibility Fortum went out and said they'd like to incorporate district heating for Helsingfors (Helsinki) when they build their new nuke at Lovisa...

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Jan 8th, 2010 at 02:51:28 PM EST
[ Parent ]
Any power plant can be used for district heating because the temperature of the outside cooling circuit (the cold temperature of the heat engine) is usually high enough to be used for heating pipes.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sat Jan 9th, 2010 at 03:41:29 PM EST
[ Parent ]


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