Monthly Archives: February 2013

There is absolutely no need for an energy shortage in the UK, but the indecision of policy makers is making serious problems over the next few years ever more likely. There is no shortage of supply – but the raw materials of the energy business – such as gas and coal, or for that matter wind – have to be converted into power to produce the electricity which is essential for a complex modern economy. If the power stations are not in place electricity can’t be produced. Read more

Oil refinery. Getty Images

The energy market is moving on two very different tracks. Oil prices are stubbornly high and gas prices are low, especially in the US, and look set to fall further across the world. The question is when, if ever, will these two tracks meet?

Let’s start with why the oil price at $114 a barrel for Brent remains so high. There is no physical shortage and demand growth worldwide is minimal. The answer lies in fear of what might happen next. The threat of an open conflict between Israel and Iran may have receded but there are enough uncertainties in the market to keep people nervous. Libya is out of control because of the limited international support for the new government following last year’s military intervention by France and Britain. There is continued nervousness about events in Algeria after the terrorist attack last month and concern about the negative effect on investment of the renewed outbreaks of violence in Iraq. Read more

Getty Images

The negotiations between the UK government and EDF over the contract terms for new nuclear development continue. As well as a sizeable gap on the strike price there is also disagreement on the distribution of risks. In some ways this is just a normal negotiating process but behind the meetings and the attempts at news management are two questions.

The first is whether the UK really needs new nuclear. Read more

Ofgem warns bills could rise as UK may need to import more gas. Getty Images

Alistair Buchanan’s warning about the vulnerabilities of the UK energy supply system is serious and timely. The absence of a clear overall policy for energy supply and consumption means that in his words consumption levels are likely to be dangerously close to maximum capacity at times over the next few years and that UK consumers face the risk both of steadily rising prices and interruptions of supply.

It is impossible to disagree with these conclusions from Ofgem’s report. They are based on facts and hard analysis. Read more

If any company knows about the highs and lows of the British economy, it is Merseyside’s Cammell Laird – one of the oldest names in British shipbuilding.

Founded nearly 200 years ago, its sprawling yards across the river from the city of Liverpool have launched more than 1,350 vessels, from a US Confederate raider to the steamer built for Dr Livingstone’s Zambezi expedition.

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How will Barack Obama tackle climate change? Getty Images

The comments in President Obama’s second inaugural speech on climate change have encouraged campaigners to think that something substantive is about to happen. It is always good to be optimistic, but the hard question is what exactly is he going to do and what will it achieve. Read more

Petrobras is in a mess. The Brazilian state company makes promises year after year, only to disappoint. Worse still, the Brazilian government heaps on the pressure by trying to push up production targets. But it refuses for national political reasons to give the company the means and freedom to deliver.

To start with the good news. Petrobras keeps discovering huge volumes of oil and gas. The Lula field for instance is estimated to hold 8bn bbls of oil, making it a world-class elephant. Offshore Brazil is clearly one of the most prolific new provinces in the world.

That’s the end of the good news. The bad news is that Petrobras seems unable to either set or deliver credible development plans for the resources it holds. Read more

Three weeks after the tragic events at the In Amenas gas facility in Algeria, the companies directly involved and many others with interests in North Africa and across the Middle East are beginning to assess the implications and the choices they face.

Algeria, and indeed the whole of the North African region apart from a few parts of Libya, had been considered relatively safe. Installations including In Amenas were protected by national security forces but were not armed camps. Algeria was considered to be predominantly law abiding – with fewer attempted kidnappings than many other countries around the world. The companies believed they had good relationships with the government in Algiers. Read more