But they will be saving the planet! ‘25% of British households won’t be able to pay energy bills’


By: - Climate DepotApril 1, 2022 7:35 AM

https://mailchi.mp/aff9171a5bae/25-of-british-households-wont-be-able-to-pay-energy-bills-188090?e=0b1369f9f8

Energy cost crisis

A quarter of British households won’t be able to pay energy bills by October

1 April 2022

1) Energy cost crisis: 25% of British households won’t be able to pay energy bills by October
Manchester Evening News, 1 April 2022

2) Boris Johnson opens the door for a fracking revival
The Daily Telegraph, 31 March 2022

3) Boris Johnson’s push for solar energy risks funding Chinese genocide, senior Tories warn
iNews, 31 March 2022

4) IER Podcast: Benny Peiser and Francis Menton on Net-Zero
Institute for Energy Research, 30 March 2022

5) Canada’s Conservatives reject Trudeau’s Net Zero plans
Canadian Press, 30 March 2022

6) Mike Pompeo: War in Ukraine shows why world needs US energy dominance

7) Geopolitical implications of the ongoing shortages for global natural gas
Goehring & Rozencwajg, 31 March 2022
1) Energy cost crisis: 25% of British households won’t be able to pay energy bills by October
Manchester Evening News, 1 April 2022

Meanwhile five million people will struggle to pay for electricity from April

The largest increase of energy bills in living memory has come into effect, with the average household now paying out almost £700 more a year for their bills. Charities have warned that 2.5 million more households are set to fall into “fuel stress,” where they are spending at least 10% of their total budgets on energy bills.

As a 54% increase to Ofgem’s price cap hits bills, the Resolution Foundation think tank said the number of English households in fuel stress was set to double overnight from 2.5 to five million. Resolution Foundation senior economist Jonathan Marshall said: “Today’s energy price cap rise will see the number of households experiencing fuel stress double to five million.

“Another increase in energy bills this autumn hastens the need for more immediate support, as well as a clear, long-term strategy for improving home insulation, ramping up renewable and nuclear electricity generation, and reforming energy markets so that families’ energy bills are less dependent on global gas prices.”

Citizens Advice said around five million people would be unable to pay their energy bills from April, even accounting for the support the government has already announced. It warned this number would almost triple to one in four people in the UK – more than 14 million – if the price cap rises again in October based on current predictions.

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2) Boris Johnson opens the door for a fracking revival
The Daily Telegraph, 31 March 2022

The Prime Minister halts order to seal three fracking wells to ‘evaluate options’ amid energy crisis


A pro-fracking demonstrator protests outside Blackpool Football Club on the opening day of the public inquiry
Cuadrilla was originally ordered to seal the three testing wells in Lancashire by June 30 CREDIT: Reuters

The company spearheading Britain’s stalled fracking industry has been thrown a lifeline by the Government in the clearest sign yet that ministers are rethinking their stance on shale gas.

Cuadrilla, the energy producer, said it had been given a stay of execution after it received orders for three testing wells in Lancashire to be filled with concrete by June 30 following an effective ban on fracking in the UK.

The company said it would temporarily plug the wells in northwest England and consider its options before a new deadline of June 2023.

The decision by the North Sea Transition Authority, the regulator for the oil and gas industry, comes just days before Boris Johnson and Kwasi Kwarteng, the Business Secretary, are expected to set out the UK’s new energy supply strategy.

The Prime Minister has come under renewed pressure to reverse a 2019 moratorium on fracking as European leaders scramble to wean the Continent off Russian gas.

Francis Egan, chief executive of Cuadrilla, said a decision to start fracking would help to reduce and “potentially halt” expensive gas imports from abroad, including from Russia.

He said: “I would like to thank the Prime Minister and the Business Secretary for seeing the light and realising – just in time – how absurd it would have been to force us to pour concrete down Britain’s only two viable shale gas wells in the middle of an energy crisis.

“But this suspension will have a cul-de-sac ending unless we now reverse the moratorium preventing us from using the wells (and others like them) to get shale gas out of the ground and flowing into British households.”

The North Sea Transition Authority said that “if no credible re-use plans” are in place by the deadline of June next year it “expects to reimpose decommissioning requirements”.

Cuadrilla had applied for the extension on March 28 amid signs from the Government that it was open to reconsidering its stance on the practice as energy security rises up the agenda in the wake of the Kremlin’s invasion.

Fracking involves blasting a mixture of water, sand and chemicals underground to release trapped gas.

Estimates suggest there are 1,329 trillion cubic feet of shale trapped in rocks from Scotland to Sussex.

However, the practice was placed under moratorium in England in 2019 before any commercial gas was produced following repeated protests from local communities and green campaigners after causing earth tremors.

Mr Johnson is expected to order a review of the evidence leading up to the ban as part of the UK’s energy supply strategy expected next week.

He is believed to have asked ministers in early March to look again at whether fracking can help diversify the UK’s energy supplies, as the Ukraine war threatens to worsen a global gas shortage.

Britain gets little gas directly from Russia but only produces less than 40pc of its own gas, with the rest imported from Norway, Qatar and elsewhere.

Advocates of fracking claim that Britain could use the technique to access vast reserves of shale gas, with just 10pc of resources available enough to make the UK self-sufficient for 50 years.

Fracking is widely used onshore in the US where it has helped revolutionise their oil and gas industry, but sceptics argue replicating that in the UK would be difficult as the geology is different and the UK is more crowded.

The Climate Change Committee, the Government’s advisers, has also warned that any production would need to be done in line with the UK’s net-zero ambitions.

A spokesman for the Business Department said: “Cuadrilla applied for an extension and the independent regulator approved the company’s application.

“The pause on the development of shale gas in England remains in place.”

3) Boris Johnson’s push for solar energy risks funding Chinese genocide, senior Tories warn
iNews, 31 March 2022

The Prime Minister Boris Johnson risks funding a solar energy market built on “genocide” with his plans to dramatically increase the UK’s energy supply from the renewable source, Tory MPs have warned.

The PM is looking to radically increase the amount of energy the UK produces from renewables as part of his efforts to wean the country off oil and gas imports in the wake of Russia’s invasion of Ukraine.

But senior Tories have issued a warning over his plans to turn to more solar due to concerns that the solar energy market is dominated by China, with nearly half of all solar panels worldwide made in Xinjiang, where Beijing is accused of carrying out a genocide of the Uighur Muslim minority ethnic community.

One Tory backbencher told i: “The UK cannot be seen to be shifting its energy reliance from one autocracy in Russia to another in China. The Prime Minister must be aware that buying solar comes with immense risk of funding a market built on genocide.”

The source added: “There is also the issue that the vast majority of solar panel production in China is powered using coal, which means the UK would just be displacing its carbon output.”

The concerns were echoed by Tom Tugendhat, Tory chair of the Foreign Affairs Committee and co-chair of the China Research Group, who warned of deepening ties with Beijing.

“Renewable energy is the future, but we’ve got to prioritise energy security,” he told i.

“The UK still imports most of our solar panels from China. Deepening our reliance on China and the coal powered energy they use is a false economy.”

According to the latest data, eight of 10 of the world’s largest solar companies are Chinese and China dominates the global supply chain for photovoltaic modules, including polysilicon, which is used in their construction.

The US has already slapped several Chinese silicon producers with sanctions linked to human rights abuses in Xinjiang.

Last year US authorities seized four shipments from Canadian company Canada Solar because the firm used silicon sourced from China.

Canada Solar is currently the primary developer earmarked to build the UK’s largest solar farm, called Mallard Pass in Lincolnshire.

The Government is already increasingly turning to solar to make efficiency savings on its own estate, with the Ministry of Defence last year completing the first of 80 solar farms it intends to build on its land.

The farm, located in one of its training bases in Leconfield, East Yorkshire, used thousands of panels built by Trina Solar, which has links to slave labour in Xinjiang, according to a major report into the industry by Sheffield Hallam University.

Business Secretary Kwasi Kwarteng is understood to have tabled proposals to treble the UK’s solar capacity and double onshore wind generation by 2030 as part of the forthcoming energy security plan.

The Prime Minister is expected to place less emphasis on using onshore wind to increase renewable energy production, despite it being a cheaper and quicker energy source than offshore wind.

Any push to build more onshore wind farms is likely to face stiff opposition from his own backbenchers, who are opposed to seeing the countryside give up to wind turbines.

Mr Johnson made sure that he stressed the potential of offshore wind, rather than onshore, during his appearance in front of the Liaison Committee earlier this week.

Any attempt to significantly increase solar energy production is also likely to meet similar opposition, with several high profile Tories also opposed to seeing rural land being used by solar farms.

i understands Mr Johnson has given private assurances to his MPs that any increase in solar capacity will be limited to urban settings, but there are serious doubts that urban locations alone would be enough to meet the UK’s needs to develop sufficient energy security.

The Prime Minister’s official spokesman insisted on Thursday that both onshore and solar would be crucial to the UK’s energy production, adding that onshore wind “remains an important part of the energy mix”.

“As you’ll know, it accounts for around a quarter of installed renewable capacity in the UK. We have committed to a sustained increase of locally imported inshore wind along with other renewables such as solar and offshore in the 2020s and beyond,” the spokesman said.

The wrangling over the use of solar, onshore wind and, in particular, nuclear power generation to boost the UK’s energy sovereignty has meant the energy strategy has been delayed by six weeks.

It has also prompted calls from Tory MPs to demand a further exploration of fracking in the UK, despite the Government placing a moratorium on the practice.

The UK regulator on Thursday suspended its order to concrete over two of Cuadrilla’s fracking wells for a year, sparking speculation that the Government could be about to give the green light to shale gas production, despite fierce local opposition.

Arch-rebel Tory MP Steve Baker welcomed the decision claiming it would be the “greenest, cheapest, and most secure way to meet our [energy] needs is to ensure that we have a thriving shale gas industry here in the UK”.

And he urged the Government to include a review of the moratorium in next week’s strategy. But any shift to shale gas would spark a severe rebellion on both the front and backbenches, with one minister telling i this month that they were adamant they would quit if fracking were given the go ahead.

4) IER Podcast: Benny Peiser and Francis Menton on Net-Zero
Institute for Energy Research, 30 March 2022

Benny Peiser, Director of the Global Warming Policy Foundation, and Francis Menton, founder of the Manhattan Contrarian, join the show to discuss what “net-zero” energy policies have done to electricity prices in Europe and where similar proposals are popping up in the United States.

Listen to the podcast here

5) Canada’s Conservatives reject Trudeau’s Net Zero plans
Canadian Press, 30 March 2022

Canada’s Conservatives continue to reject the target the Liberal government set for reducing greenhouse gas emissions by 2030, as the party searches for a new leader who will decide its approach to tackle climate change.

On Tuesday, the federal government released its plan for how it hopes to achieve its latest goal, which is to cut carbon-related pollution by 40 to 45 per cent from 2005 levels by the end of the decade.

Tory environment critic Kyle Seeback says the party doesn’t support that plan. Instead, it favours the target the Conservative government set back in 2015 under the leadership of former prime minister Stephen Harper.

When he came into office later that year, Prime Minister Justin Trudeau signed onto the plan, committing under the Paris agreement to reduce the country’s greenhouse gas emissions to 30 per cent below 2005 levels by 2030.

Last year Trudeau increased those targets ahead of international climate talks in the fall, saying Canada now aims for 40 to 45 per cent below 2005 levels.

“It’s great to intend things and to hope for things,” Seeback said on Tuesday. “What we need (are) actual plans that result in emission reductions and what we get from this government are plans that cost a lot of money.”

He pointed out that the Liberals have failed to achieve past climate goals and dismissed the plan presented Tuesday as lacking in details about the impact the reductions would have on resource-based industries and taxpayers.

“I’m all for aspirational things, but at the end of the day, what we need are plans that actually work and don’t have incredibly catastrophic effects on the Canadian economy.”

Conservative leadership contenders will need to address their ideas for the country’s approach to climate change as they compete for the party’s top job. The new leader is set to be announced Sept. 10.

Much of the party’s support comes from Western Canada, home to oil-producing provinces that want to ensure the sector’s survival. At the same time, the Tories have also had to deal with criticism that they didn’t present a plan to properly tackle climate change during the 2019 federal election campaign.

Candidates have kicked off the first weeks of the current race by championing a rallying cry from 2019 that remains popular with the grassroots: a promise to scrap the carbon price.

That’s something many members are excited to hear after former leader Erin O’Toole promised a carbon price of his own in an effort to course-correct during the most recent election.

Ottawa-area MP Pierre Poilievre has been beating that drum and plans to hold a rally in the nation’s capital Friday against the scheduled rise in the federal charge, which is set to take effect that day.

Poilievre didn’t directly answer when asked whether he supports the current government’s 2030 targets, but in a statement Tuesday said Trudeau would “drive up energy prices at home and oil production abroad.”

He is campaigning on a promise to build more pipelines and end Canada’s foreign oil imports. When it comes to combating climate change, he vows to reduce emissions through “technology and not taxes.”

“These technologies include carbon capture, emissions-free nuclear power and helping other countries shut down their coal-fired power plants by exporting them cleaner natural gas, nuclear power and hydroelectricity,” Poilievre said in a statement.

Full story

6) Mike Pompeo: War in Ukraine shows why world needs US energy dominance
Fox News, 30 March 2022

President Biden is only now waking up to the wisdom of the Trump administration’s policies in Europe: It took a war to shake him from his slumber. 

As the Russian war against Ukraine rages on, the Biden administration continues to respond with confusion and weakness. Central to President Biden’s failures throughout this crisis and before it has been his administration’s hostility to American energy.

During his recent address to our European allies in Poland, Biden stated, “we have to stay fully, totally, thoroughly united.” Unity without direction, though, is not worth much when it comes to deterring our adversaries.

Deterrence only works when our enemies know our mettle and believe our capabilities can pose a credible risk to their plans or objectives. And in fact, Biden’s recent remarks on the relationship of sanctions and deterrence makes one wonder if comprehends the concept. This is why the Trump administration sought to make our alliances stronger. We called for our NATO allies to meet their spending commitments and actually made real progress toward this goal.

Critically, we also ensured our allies were not dependent on Russian energy. We sanctioned and stopped the completion of the Nord Stream 2 pipeline, and by establishing American energy independence and dominance, we were able to ship the world’s cleanest fossil fuels to our partners cheaply and efficiently.

As secretary of state, I know that it took an effective combination of diplomacy, tough negotiations, and unleashing our own energy industry to bring about this goal. Energy dominance gave America enormous power and was an essential tool in our diplomatic efforts.  Nearly every discussion I had with presidents, prime ministers and foreign ministers involved American energy.

President Biden is only now waking up to the wisdom of the Trump administration’s policies in Europe: It took a war to shake him from his slumber.

The Biden administration is now, belatedly, pursuing a partnership with the European Union to reduce European reliance on Russia for its energy needs. This partnership will be immensely difficult to achieve, for the Biden administration has undercut central tenets of American energy dominance, which is essential to meet Europe’s energy needs, should that continent fully cut itself off from Russian supplies.

It is important to note that the Trump administration had, in the course of a single term, achieved energy dominance. The administration of which I was a part also embraced nuclear power as energy’s future; we committed resources to its development.

The abandonment of these policies by President Biden gave Vladimir Putin immediate power and leverage in Europe. The flow of Russian oil, natural gas and coal enriched Putin’s circle, solidifying his domestic power, while also giving him direct leverage over consuming states, especially Germany, and worst of all, financed his build up to war.

These were avoidable circumstances that the Biden administration gifted to Putin through its backward energy policies.  For example, European countries have depended on Russia for their coal, with Russia shipping more than one-third of its coal production there. Will President Biden fill this critical need, or will he return to his empty rhetoric and continue to crush our domestic coal industry?

Driven by progressive activists screeching about climate change, President Biden’s administration has been hostile to American oil, natural gas, coal and nuclear power from Day One. If not for the enactment of policies that hampered these vital sectors of our economy, both the United States and Europe would have been in a much better position strategically and might have deterred Putin’s illegal war in Ukraine.

Inflation and high energy prices at home are crushing all Americans. Soaring costs for fertilizer and fuel are devastating American farmers, and the rising cost to fill up at the gas station are a literal tax increase on American families. Revitalizing our energy industry would alleviate these burdens quickly, and it can be done because it’s exactly what we did in the Trump administration.

We understand that Americans are concerned about clean energy, and that is why we need to continue to support renewables and nuclear energy as key elements of a new national policy of electricity for humanity, but American oil and natural gas are the answer in the short and even long term.

President Biden should immediately reverse his order canceling the Keystone XL pipeline and commit his administration to reestablishing American energy dominance. Such policies would go a long way toward stabilizing both our domestic and foreign challenges. It would provide certainty in the American energy market and reduce prices quickly.

Though this seems like a solution so simple that even Joe Biden could figure it out, we shouldn’t hold out hope he will. The Biden administration’s skewed vision of reality has placed climate change – not the American economy or our security – as its top priority, and this is sadly unlikely to change. It was telling that the climate czar John Kerry – not our secretary of state – was the first senior official to make official visits to both Russia and China. By projecting climate change as our top priority above everything else, Team Biden will continue to project weakness.

We must unleash the power of American energy; we must redouble our efforts to export clean energy, including liquified natural gas and clean coal, to our allies in Europe and in the Indo-Pacific.

If President Biden is unwilling to do this, if he is unwilling to lead our country rather than listen to the singularly focused climate activists who are currently driving the White House’s failed policies, then we should ensure his administration is redirected by Republican acumen: by our winning big in the upcoming midterm elections, reversing his green-obsessed energy policy, and getting back to American energy dominance.

Mike Pompeo is a Fox News contributor, former U.S. secretary of State, and former director of the Central Intelligence Agency. He is a distinguished fellow at the Hudson Institute.

7) Geopolitical implications of the ongoing shortages for global natural gas
Goehring & Rozencwajg, 31 March 2022

Without US liquefied natural gas (LNG), Europe may well have frozen literally to death this winter. We believe what is happening with global natural gas is a harbinger of things to come for the rest of the energy complex as well.

North American readers could be forgiven for not appreciating how fast international gas markets have turned from surplus to deficit. In May 2020, European 1-month ahead natural gas prices (as measured by the TTF index) reached $1.24 per mcf – an all-time low. By December 2021, prices had spiked to $59.97 per mcf (equivalent to $360 per barrel oil). Prices have pulled back but remain at $25 per mcf (equivalent to $150 per barrel oil) – higher than any other time in the past 20 years. LNG prices into Asia, as measured by the JKM Japan-South Korea Swap Index, bottomed at $2.00 per mcf in 2020, rallied to $49.00 in 2021 and have now settled back to $25 per mcf.

Factories have been forced to shut across the UK, Europe, and Asia after not being able to secure natural gas. Nitrogen based fertilizers rely on natural gas as a key feedstock, and as a result CF closed several facilities in the UK. The agricultural section discusses how the natural gas crisis will impact our food supply.

As the Northern Hemisphere winter draws to a close, there is relief in sight as heating demand wanes. However, there are lingering consequences that will persist. For example, despite using record-high prices to attract imports, Europe was unable to stop inventories from drawing relative to seasonal averages. Based upon the most recent data, European natural gas storage stands at 1.3 tcf – the lowest absolute level for this time of year since 2011. European storage typically ends the winter heating season at 36% capacity by the end of March. Currently, storage is only 35% full, with seven weeks of withdrawal still to come. On average, storage draws by another 14 percentage points between now and the end of the withdrawal period. If withdrawals average even half the normal rate, European storage will end the season way below the 30% capacity – the same level that produced last year’s crisis. Unless natural gas injections are dramatically accelerated throughout the spring and summer, Europe risks heading into next winter with dangerously low inventories once again. How will they source the gas?

Europe’s natural gas shortage has impacted geopolitics as well. Russian exports to Europe have fallen by half compared with seasonal averages. Currently, Russia sends gas to Europe via Ukraine and Poland. Nord Stream 2 would circumnavigate these countries and deliver gas directly into Germany, allowing Russia to threaten Ukrainian energy security without simultaneously threatening all of Europe. The United States has warned Russia against using Nord Stream 2 as a political bargaining chip and has proposed sanctions on gas flowing through Nord Stream 2. With the pipeline now complete, the next step is for German regulatory authorities to approve the project which is unlikely until at least the second half of the year. In the meantime, Europe must import all its Russian gas via Ukraine with substantial risk for disruption.

These dynamics left European LNG buyers scrambling to bid away global cargos. Much of this demand has been met by US exports which has been dubbed “freedom gas.” Middle Eastern cargos meant for Japan were recently diverted to Europe as well which further tightens the Asian market. The current European tightness may be blamed on unreliable renewables, cold weather, or Russian posturing, but ultimately the underlying cause has been strong Asian demand. European utility buyers felt they could source LNG cargos only to realize that incredibly strong Asian demand had drawn away any available excess supply. This trend will only accelerate from here. As countries get richer, they demand not only more energy but also cleaner energy. Natural gas is a much cleaner-burning fuel than coal and many emerging market economies have steadily sought to shift from the former to the latter. This shift will only accelerate going forward. For a more detailed discuss on the reasons behind the strength in LNG demand, please read the essay: “LNG Demand Set to Surge” in our 4Q20 letter.

Natural gas in the US is expensive by recent standards, but cheap compared with the rest of the world. After bottoming in June 2020 at $1.48 per mcf, Henry Hub spiked to $6.31 by January 27th before settling back to $4.00. While these were some of the highest prices in the past decade, they remain 85% below global LNG. The difference is because the United States is bottlenecked in terms of its export capability. Last year, the US exported 10 bcf/d of LNG, effectively utilizing all available liquefaction capability. Once LNG exports are maxed out, North America reverts to an isolated market and gas prices decouple from the rest of the world. Any industry that can take advantage of the arbitrage between US and world prices is currently doing so such as LNG, petrochemicals, and nitrogen-based fertilizer production.

Expansions at Cheniere’s Sabine Pass and the start of a new US LNG export terminal, Calcasieu Pass, will push LNG export from 10 bcf/d to nearly 12 bcf/d in 2022 leaving the US as the largest LNG supplier in the world, ahead of Australia and Qatar. This is an incredible milestone, considering that, as recently as the mid-2000s, consensus opinion held that the US would require massive LNG import terminals to meet domestic demand.

All this demand is having an impact on US inventories which now stand 250 bcf below seasonal averages. Although not as dire as Europe, the US remains vulnerable to any bout of cold winter between now and the end of the winter heating season in late March. One interesting observation is that over the past decade, North American autumns have become milder while springs have become colder. If this pattern occurs this year, prices could spike.

On the supply side, the US shales are once again growing. Between January 1st and December 31st, the shales grew by 2.4 bcf/d after having declined by 1 bcf/d over the same period in 2020. While this is certainly an abrupt change, it’s a far cry from the 2017 to 2019 period when US gas supply regularly grew by 10 bcf/d or more each year. Last year’s growth came mostly from Haynesville shale in east Texas and Louisiana which saw dry production grow from 12.5 bcf/d in December 2020 to 14 bcf/d twelve months later. Our models tell us this growth may be harder to achieve this year. Much of last year’s acceleration was caused by drilled but uncompleted wells.

Between December 2020 and 2021, operators increased their drilling activity by 28% from 39 to 50 wells per month. Over the same period, they increased their completion activity by 150% from 23 wells to 58 wells per month. Since 2014, the industry on average has completed 93% of the wells it has drilled and if that ratio holds again in 2022, production growth will likely slow from 1.5 bcf/d from January 1st to December 31st to only 500,000 mmcf/d.

The other main source of growth was the Permian Basin. As we discussed in our oil section, DUC liquidation had a huge impact in 2021. Whereas the industry normally completes 93% of the wells it drills, 2021 saw this jump to 150% — clearly unsustainable. Were the Permian operators to revert to its long-term average, dry gas production would likely stop growing entirely. Also, keep in mind LNG export capacity will increase by 2 bcf/d this year and all that supply will likely be needed to meet international demand. Therefore, if the US shales do grow, albeit at a slower rate, domestic inventories will likely fall from here. If we experience a colder than normal later winter and spring in the US, we could see significant upside price pressure.

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