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The deal reached at last week’s European summit on climate change will satisfy no one. The non-binding Europe-wide targets place no responsibility on national governments and provide none of the confidence necessary for the essential investments in supply and infrastructure that are yet to be made. Poland may be the short-term winner – reflecting a clear shift in European decision-making to the east – but the summit failed to address the hard reality that current policies are not working. A new approach is needed.

The fractious debate which led up to the summit should be understood as marking the end of the “consensus” on energy policy established in 2008. Anyone wanting to understand the details of the debate should read the excellent summary produced by Carbon Brief which spells out the positions of the key states on major issues. Read more

Older UK readers will remember the Green Goddesses – fire engines held in reserve for moments of national emergency. At the height of a crisis army drivers would maintain an essential service. Well, lo and behold, some new Green Goddesses are to be created as the government launches its “emergency electricity reserve”. Read more

It is impossible to understand the outlook for energy prices – internationally or at the domestic level – without looking carefully at what is happening in the gas market. The simplistic assumption is that because demand is rising, prices must also increase inexorably. This assumption underpins a lot of official forecasts and the business plans of some optimistic producers. The reality is much more complicated. The emergence of a spot market suggests that there is a strong chance of prices falling over the next decade. Read more

The details of the deal to build Britain’s new nuclear reactors at Hinkley Point are becoming clearer: a basic cost of £16bn, a quiet increase of £2bn since the last parliamentary statement on the issue less than six months ago. It guarantees a unit price of £92.50 per megawatt hour for the electricity produced, stretching four decades into the future, and the UK government in effect underwrites the investment. Read more

Do renewables represent the future of the energy business or a minor contributor in a sector which will continue to be dominated by hydrocarbons? That will the underlying question at the FT Renewables conference this week. The answer looks to be the latter but financial engineering or a major technical breakthrough could yet change things. Read more

The importance of China in the global energy economy can hardly be overstated. Chinese consumption drives the world market prices of oil, gas and coal. According to a new forecast from the US Energy Information Administration, China could well become the largest importer of oil in the world as soon as this autumn. But how secure is the Chinese economy and what would happen to the energy market if the glory days come to an end.?

To illustrate the current reality lets look at a few statistics. Read more

Energy policy has barely surfaced as an issue in the Australian election. Both of the main parties are committed to moving to an emissions trading system but neither seems likely to impose prices which fundamentally shift Australia’s energy mix away from hydrocarbons. The greater impact on the energy sector will come from international developments and that is where events are adding to Australia’s existing natural advantages. Read more

Month by month, the consequences of the shale gas revolution in the United States are working their way through the international energy market. There has been much discussion of whether the US will permit shale gas exports in any quantity. But even before that is decided the growth of shale gas production in the US is already having an impact. The reduced need for US gas imports leaves supplies from Trinidad, North Africa and elsewhere to find a new home. That means that gas prices in Europe and Asia will fall. And even more important, shale gas is displacing coal from the US power generation sector. Read more


The collapse of the European emissions system over the last few weeks is a serious indicator of the loss of interest in the issue of climate change among the top policy makers, especially in Germany. Unless the market can find a new credibility the whole structure of the European climate agenda looks vulnerable. Read more

The news that Exxon is to build a $10 bn LNG export facility in Texas marks another significant step forward in the story of shale gas and its disruptive impact on the world energy market. Those who want a parallel for the painful process through which so many of the established forces of the industry on one side and the lobby groups on another have struggled to come to terms with the reality of shale gas over the last three years should read John Heilbron’s fascinating book on GalileoRead more

Access to energy is now crucial for India’s continued development. But the scale of the challenge and the changes required could alter the whole structure of governance and the way in which the Indian economy works over the next few years.

A seminar held at Kings College London earlier this week looked at the issues – investment, trade, energy security and the impact of energy on the balance between the urban and the rural communities. We produced more questions than answers but even the questions are instructive. Read more

A report from the Grantham Institute and the Carbon Tracker initiative, titled “Unburnable Carbon”, has produced a studied silence from the energy industry. The study, published last week, is privately being dismissed as the predictable conclusions of people who don’t understand business. But investors should take it more seriously because it opens up some very interesting questions about what energy companies are doing with their money.

In summary, the report says the investment of more capital to find hydrocarbons is a waste of money. More than enough has been already identified to fulfill the world’s needs if we are to meet the carbon limits implied by international agreements on climate change. Under those agreements, carbon use will be reduced over the next four decades, leaving substantial supplies stranded. On this basis, some companies – and therefore the funds which hold them – are carrying dangerous levels of risk, based on the false assumption that the international agreement will never be implemented. The companies are overvalued because some of their assets will never be used.

I have two points of doubt about this thesis. Read more

Climate pessimists, shale gas deniers, Opec ministers and (most important of all) investors in the energy sector should read the new Energy Outlook to 2040 produced by Exxon Mobil. It is an excellent piece of work, even if there is one important omission. Read more