Thursday, December 11, 2008
Finally! After a year and a half of delays, a date has been sketched in for the commissioning of South Hook LNG. Funnily enough, this date pretty much co-incides with the commissioning of a number of other LNG terminals, too. One of them is called Adriatic LNG, in the Mediterranean, and the other is Golden Pass LNG on the other side of the Atlantic in the US.
So do they have anything else in common?
Well, as it happens they do, and they go by the name of Exxonmobil and Qatargas. These two companies have majority interests in all three terminals. So here goes my theory...
Our brand spanking new supersized Q-Max tanker loads up in Qatar, and makes it's way up the Suez canal. Once in the Mediterrannean, it has a choice. It can either make it's way to the Adriatic Terminal, or head out the straits of Gibraltar towards either South Hook, or Golden Pass on the other side of the Atlantic. It all depends on where it can get the best return. If it can get a good price in the UK, it'll go to the UK. If the prospects are better in the US, it'll go there, and ignore the UK, until wholesale gas prices rise enough to justify bothering with us. In the industry, they call it "Arbitrage".
The date sketched in for South Hook is early 2009. Golden Pass is mid 2009. Then we're back into Winter 2009, when Gas prices tend to rise, and Exxon and pals can take their pick while we freeze...
Welcome to the brave new world of LNG!
Monday, August 25, 2008
On the 22nd of August, a small but significant step occurred on the road to Irish Unification. EirGrid, the Irish Republic's state-owned electricity transmission system operator, bought SONI - the company that runs the electricity transmission system for Northern Ireland.
The operation (but not ownership) of the North's electricity system will now be effectively the responsibility of an arm of the Irish State. EirGrid falls under the jurisdiction of the Irish Minister for Communications, Energy and Natural Resources.
The move has been widely welcomed across the board and touted as an important step towards the creation of a Single Electricity Market for the whole of the Island. Eirgrid and it's counterpart in the 6 counties, Northern Ireland Electricity, have also been co-operating to create an integrated North-South interconnector from County Tyrone to County Cavan.
While the move should I think be welcomed it also provides a sad contrast to us here in Cymru, where the National Grid grid not only treats North and South Wales as two separate entities, but doesn't even acknowledge a coherent welsh identity at all.
In any case, it may come as no surprise to learn that Sinn Fein have welcomed EirGrid's move. But does Ian Paisley know about it? If he did, he'd probably blow a fuse...
Friday, August 22, 2008
Amid all the hoo-haa over the massive price hikes announced by Centrica and co. this summer, what was less publicised in the media was the fact that companies like Centrica have been quietly buying up drilling licenses for a massive gas resource that is sitting, quite literally, under our feet. This resource, known as Coal Bed Methane, is deeply intertwined with the history of coal in areas like South Wales, but has never been a large scale commercial prospect. Until now.
Coal Bed Methane is basically gas that became "locked" into coal seams as they were laid down millions of years ago. It's tapped by punching into these virgin seams with drilling rigs, and drawing off the released gas. As North Sea gas reserves have begun to decline, and global prices for gas have risen in lock-step with Oil, "niche" prospects like CBM have become increasingly attractive. In the US, for example, it now accounts for around 10% of production. And south Wales, as any ex-miner will tell you, has some of the gassiest coal in Europe.
If CBM is going to take off anywhere, it's going to be here.
Over the last few months the Department for Business, Enterprise and Regulatory Reform has been selling off "licensing blocs" to prospect for this resource, including large areas of south Wales like the Rhondda and Caerffili. The Welsh Assembly has no formal input into this process, and the amount that BERR is raking in for selling these licenses is not a matter for public record. BERR's own figures show that South Wales is sitting on an onshore gas resource of around 13 trillion cubic feet, comparable in quantity to Norway's massive Ormen Lange field, one of the largest gas fields in Western Europe.
Unlike South Wales, however, Norway is not a privatised paradise, and the Norwegian State has taken steps to ensure that the benefits of Norways' significant energy resources are felt by all it's citizens. To this end - while the Tories in Britland were busy privatising anything that wasn't bolted down - in 1990 it established the Petroleum Fund of Norway. This fund, via the Norwegian Government, is owned by the people of Norway, and it's value now stands at around $300 billion dollars. Profits are used to fund social welfare programmes.
Not bad for a small nation of 4.7 million souls...
Of course, if Labour in Wales was a genuine Socialist party it would argue that the significant gas resource now being eyed up by the big energy firms should be taken into collective ownership on behalf of the people of Wales. It could either be used to provide cheap, locally available gas to the local population, or sold onto the wider market, and the profits used to provide support and subsidy to poorer sections of our society. Or both.
But Labour in Wales is in hock to a government in London that is dogmatically wedded to what Andrew Davies AM likes to refer to as "market-based" solutions. As escalating gas prices hammer low income families even before winter kicks in this year, the big energy companies are preparing to open up a new "gas frontier" across some of the poorest areas of the United Kingdom. Given that the Valleys derived little benefit from the exploitation of it's coal resources the first time round, what reason is there to expect that they will benefit any more this time?
If ever an opportunity presented itself to wrongfoot Labour on a socialist issue, in their core constituency, exposing all their talk of "clear red water" as little more than empty rhetoric, this is it.
Saturday, August 09, 2008
A BBC news item on Friday casts a revealing light on the extent to which the so-called "Green" movement has drifted from its roots. Powys county council, besieged by multiple applications for wind farms, has put it's foot down and decided to put the whole thing on hold. It's main objection revolves around road access to some of the wildest and most remote sites in Wales. Councillor Wynne Jones, the Cabinet member for Regeneration and Development said;
"Unless there are major improvements to the roads where the construction traffic would have to travel, then we would have no choice but to recommend refusal of these developments."
In response, Friends of the Earth have called for Assembly ministers to ""intervene and to discuss with them how we can overcome this as soon as possible".
But wouldn't FoE do the Welsh environment a better service by questioning the thinking behind the whole crazy scheme in the first place? Whatever happened to the slogan "Small is Beautiful" that inspired groups like FoE in the first place?
After all, in the 1970s, in the early days of the green movement, thinkers like E F Schumacher questioned the entire rationale behind large scale "mega projects" and decried the tendency towards "bigness" in modern thinking. Schumacher, a pioneer who cared passionately about people as much as the environment, coined a term which has clearly been forgotten by groups like FoE. "Appropriate technology" - small-scale, decentralised projects which were relevant to the needs of the communities they served, "as if people mattered".
Can anyone say that about these projects?
Everything about them is top-down, driven by little more than an abstract, bureaucratic target which is effectively part of little more than a marketing exercise by the Welsh Assembly.
Meanwhile, in it's zeal to impose these targets on local authorities, it seems the Assembly has grossly underestimated the cumulative impact of a series of projects, which, taken together, will transform the landscape of mid-Wales forever.
Isn't it always the way with such top-heavy exercises?
Wind technology started in Wales around 30 years ago as little more than a number of small, innovative projects pioneered by ventures like the Centre for Alternative Technology in Machynlleth. They were grassroots, local projects, which generally attracted little opposition. As the corporate world has taken an increasing interest in wind technology, however, the tendency has been for the size of the turbines to grow, and the numbers to multiply. It's no surprise, therefore, that local opposition has tended to multiply in direct proportion, as their impact on the landscape has become ever more intrusive.
So are Friends of the Earth now going to call on the Assembly to build bigger roads to make this ever expanding project happen? And could they do such a thing with a straight face?
The mind boggles. But one thing's for sure - If E F Schumacher was alive to see the slick, corporate monster the movement he inspired has mutated into, I'm pretty sure he wouldn't be turning in his grave, he'd be spinning.
Monday, July 07, 2008
It's all here. LNG terminals, a high pressure gas pipeline shipping gas to a wealthier neighbour, eminent domain (compulsory purchase in this country), protected areas at risk, peoples safety compromised, communities united in opposition.
South Wales? Nope. Oregon, USA. But the parallels are uncanny nonetheless.