The energy and economic fundamentals

Here is a series of fundamental points, and then a question: To pay off our existing debts we need the economy to grow Economists are expecting there will be a source of energy to power that growth But cheap oil has run out, oil is ‘peaking’ — supply may match but will no longer exceed …

EU faces 20 years of rising energy costs

An EU report has been leaked, which describes five scenarios for how we might meet our energy and carbon-reduction targets by 2050. Details are sketchy, and clearly depend on assumptions about the costs of investments, the life-cycles of new generating capacity, depreciation policies, and levels of government subsidy. Some of the projections seem lower than …

“Oil surges on hopes of bank rescue deal”

The volatility we have come to expect in oil showed its face again as oil closed up around 8%-10% on the week on news of a nearing deal on the Eurozone crisis. We can expect this to continue. High oil prices will dampen the economy, which drive prices down again, so will grow the economy …

Eurozone crisis inches closer to resolution

The IMF meeting in Washington on Sunday failed to reach agreement on how to resolve Greece’s bailout problem. Various options are on the table, which (indicatively) would involve a write-down of the net present value of creditors’ holdings by around 20%, five percent, or even “none at all.”

Oil price volatile — two scenarios foreseen

Having fallen earlier this week, oil prices have risen again, to around £112/barrel. The reason — US commercial crude stocks fell by 7.3million barrels, ten times the forecast amount. Inventories are now at their lowest levels since January. Prices rose after Libyan output dropped earlier this year. Full production (1.6m barrels/day) is currently forecast to …

Shale gas found in Lancashire

Mark Miller, chief executive of Cuadrilla, says that enough shale gas has been found beneath Blackpool and Preston to supply all Britain’s gas need for “more than 56 years”. He declined to say how much of that would be recoverable. In the US, ten percent has proved to be a typical recovery rate, meaning that …

German Bundeswehr report on peak oil

In November 2010 the German Bundeswehr (‘Federal Defence Force’) was embarrassed to find that a study by its Future Analysis department had leaked to the Internet. Nearly a year on and the report has been published in full, translated into English. With commendable German clarity and efficiency it reports as follows (direct quotations except where [square-bracketed], …