Politics

Two years and one month after the death Muammar Gaddafi, the continuing power struggle in Libya is beginning to affect the oil market. So far the impact is slight, indicating the extent of OPEC’s spare capacity. The bigger risk will come if the instability spreads from Libya across North Africa or to other parts of the region. For investors, events in Libya are a reminder that any investments in the Middle East carry a large political risk. Read more

UK-based energy companies who have held investor relations meetings in the US in recent weeks have encountered a bleak response. The UK energy sector, they were told, is “uninvestable”. This is the market’s response to two months in which the certainties of the UK energy market have been undermined by politics. Given the scale of new investment required as old capacity is retired, this stark conclusion is very damaging and must be addressed by the Chancellor in his autumn statement on December 5. Read more

Nowhere is the failure of the talks between the international community and Iran over Tehran’s nuclear programme more welcome than in Riyadh. A fudged deal would have given legitimacy to the government in Tehran and confirmed the weakness of the strategic alliance between Saudi Arabia and the US.

More important still, it would have raised the prospect of the Saudis having to make serious cuts in oil production and exports to support the price of the output from Opec, the oil producers’ cartel. These are cuts the kingdom can ill afford. But, sooner or later, Iran will be on its way back into the oil market. Read more

The fate of proposals to reform the Mexican oil and gas industry, now being considered by the country’s lawmakers, matters well beyond Mexico itself. The outcome could reshape the energy sector in a number of important countries. Read more

Sir John Major has hit some raw nerves in the UK government with his comments on “lace curtain poverty” and the harsh impact of rising energy bills. But to pin the blame on the energy companies is wrong and runs the risk of making a bad situation worse.

The former British prime minister alleges that the companies – unnamed but presumably the utilities and the suppliers of raw materials to those utilities – are profiteering. I hope he will show us all the detailed evidence. If that evidence exists, and if there is a cartel of any sort, it is a matter for Her Majesty’s constabulary. 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

With the world’s population growing by almost 10,000 a day, and more and more people in Asia and Latin America enjoying access to effective spending power for the first time, the energy business should be a thriving and happy place.

It is not. Across the sector, the mood is downbeat. The talk is of building resilience against risks and threats. Read more

As the smoke of briefings from the government PR machine clears, the shape of the deal to secure the development of the new nuclear station at Hinkley Point in Somerset is becoming clearer. As mere consumers we are not allowed to know the full facts – that privilege is given, it seems, only to the companies involved and the French and Chinese governments. But we can piece the story together. Read more

For the first time in more than a century Turkey has the potential to play a crucial role in the world economy. Its geographic position offers the tantalising prospect of the country becoming one of the key transit routes for both oil and gas from four different regions – southern Russia, central Asia, the Middle East and now from the newly discovered gasfields of the eastern Mediterranean. The only question is whether politics and emotions will get in the way. Read more

At a painfully slow speed the consensus on climate change is building. There is a human impact on the climate as a result of greenhouse gas emissions. Those who seriously question this view are now reduced by the sheer weight of the evidence in the new Intergovernmental Panel on Climate Change report to the level of the eccentrics who maintained that the earth was flat long after the reality had been proved. Read more

The German election later this month might seem to be about to produce more of the same. On the eurozone currency crisis – as Quentin Peel wrote in the Financial Times a couple of weeks ago – the expectation of a big reform plan once Angela Merkel wins re-election has given way to the realisation that nothing much will change unless the markets force a radical response. Austerity and crisis management are the watchwords, and only a major event such as a collapse in the credibility of Italian debt repayment will force Germany to address the need for a full-scale resolution of the problem. That could involve the creation of a tighter EU core, or a reluctant acceptance that the euro as designed cannot work without a backstop funding mechanism in the form of Eurobonds. Nothing in the election campaign has provided a clue as to which of these alternatives will prevail.

Similarly on energy policy the election is beginning to look like a breakpoint which could have wide implications across Europe. But the direction of change remains uncertain and dangerously dependent on the precise make up of the next coalition government. Read more

The report of the public administration selection committee of the UK House of Commons into the workings of Whitehall earlier this week sounds like a dull read. It is not. This is a serious document which deserves to be read by anyone who cares about how power is exercised in modern government. It also carries an undertone of barbed malice, some deserved, some not which fans of CP Snow will much enjoy. 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

It is always a pleasure to have a good laugh. I am, therefore, grateful to the Scottish National party for announcing their new energy policy. Read more

Robert Mugabe has “won” another election in Zimbabwe. In plain English for “won” read “stolen”. The people of Zimbabwe are condemned it seems to suffer under dictatorial rule for even longer. The conventional wisdom is twofold. First, that there is nothing to be done, short of a full scale invasion – something no one has the stomach for. And secondly that things will get better when Mr Mugabe, now 89, finally passes on. I would challenge both statements.

The chances that Mr Mugabe’s death or incapacity will be followed by a transition to a normal pluralist democracy are slim. The current regime is not totally dependent on him. The ruling party and the cadre around them are well entrenched and clearly doing very well out of the country’s natural resource and mineral wealth, even if very little of the money stays in Zimbabwe. Mr Mugabe’s successor could easily be a military or security chief who is part of this ruling clique. Those in power may have too much to lose to give up easily. 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

Businesses which rely on continuing public subsidies or particular formulations of public policy always carry added risk. The reality is that public policy changes. For a brief period there is full-hearted support, often driven by a crisis or a sense of looming danger. But the attention span of electorates and policy makers is short. Something else happens, another crisis looms and a new priority takes precedence.

The news last week that Siemens is to close its solar business is just one of many indications that for the renewables sector times have changed. Read more

Organisations die when they become irrelevant. That is what is happening to the G8 which, for reasons I can’t understand, continues to exclude China. When the G8 was formed in the 70s to bring together the leaders of the world’s main economic powers at a time of crisis and recession, China was tiny in global economic terms and focused on its own internal political struggles. Now it is at the heart of the global economy. Excluding the Chinese in favour of Canada or Italy is insulting. Read more

July promises to be a busy month in Whitehall Place, the home of the UK’s Energy and Climate Change Department. Unfortunately, however, despite the prospect of a flurry of activity it seems as if all key decisions will still be left on hold. Read more

If Samuel Beckett had made Godot a woman he would have called her Angela. That is the joke in Berlin where every policy is on hold and everyone – from the members of the Eurozone to the prospective nominees for the new European Commission – is waiting for Angela. And she in turn is waiting for the results of the election on September 22nd. Then and only then will we know the shape and balance of the next coalition Government. The result is a period of deep uncertainty, not least over energy policy which is frozen by indecision. Read more