It clearly is but to avoid the derail, if you wish to reply I moved this conversation here.

We will be chasing the same supplies.

No we won't.

If you want I can explain why, but I'd suggest not pushing that line without some specific back up for that assertion because it is not true.

That's up to you but it seem highly implausible and just about every source I read is taking rationing seriosuly

https://www.ft.com/content/8ba41cec-...a-0bb2e1dec712

I have limited access but quote the FT as it's hard to dismiss as pure drivel (although i expetc it will be) Could quote from almost anywhere if you prefer.

More generally I suspect you ar making the usual mistake of thinking international markets will operate as normal if there's a serious global crises. They wont.

"Taking rationing seriously" does not equate to "we will run out".

We are not competing for the same supplies. Germany, Italy do not compete for North Sea supplies. There are bottlenecks moving gas west to east. Germany lacks LNG import capacity. Rough coming back online soon should help, although I'm sure it'll encounter some technical issues.

People say gas is a global market, but it isn't, and there are specific regional characteristics. Geography is really important, something that Brexity types never really accepted.

Spain, Belgium, France should be fine, because, like the UK, they have LNG terminals. Ther Germans do not, or not enough to resolve their issues. There is a bit of a west-east split going on.

Europe-wide you need to reduce consumption to lessen the impact on the continent and not overheat the price, which is something the government need to pay attention to. It will be very hard to fill continental storage without Russian gas at current demand levels next summer and next winter could be very ugly.

If you get a very cold winter or disruption to supplies, then life may be tough.

Source: I work in this industry.

okay I dont mean we will literally have none left. The risk is rationing (organised or disorganised) because there isn't enough supply to meet the demand. One way to handle this is the market but if you cap the price then you're liable to hit rationing.

I get you physcically have to transport gas and oil etc so it's not all equal but much new focus will be on bottlenecks and contracts. Insufficient energy is a very different world to it being expensive.

I'm not really sure what you are trying to say chez, so I'm not going to take this any further.

Ok

Let's hope for a benign few years so we never find out.

Yes, this was the logical extension of my argument. I have no idea whether we will run out, but other countries might, and we should help them.

I certainly think we should consider taxing use above X. Having a 100% tax on household energy use above the £2500 energy cap would either make people think seriously about rationing their energy use and/or raise money for people who need it.

It should indeed be a collective effort, although if I were in Europe and had watched the Germans fire their economy with cheap gas from Russia for decades and then be looking for socialisation when the flows stopped I'd be looking to extract something for that in return, because between them and Italy, they've ****ed a continent here.

There are lots of things that the government should be considering here. The one thing about price is that the cap reduces the incentive to reduce demand. This situation is really, really serious, and we should basically be on a war footing here. The less everyone uses, the less everyone gets screwed.

Exactly. We might be okay this winter, but we have no idea how many winters this crisis will last.

I would like to think I'm conscious enough not to waste energy, but I don't think we can just assume most households will follow suit and should be doing everything we can to encourage people to conserve energy where they can.

and yeah, I can't believe the Germans (read Merkel) was so ****ing stupid to become dependent on Putin for their energy. But here we are, and we do need a collective effort to get through the crisis.

This is likely to be a several year problem without some very significant changes that look unlikely.

I agree on the wasting energy thing. The point really needs to be rammed home. We've had years of very cheap energy.

In fairness to them, gas never stopped flowing really, even during the Cold War. However continuing with NS2 after Crimea was unforgivable and gave Putin a signal to do what the **** he wanted as long as we get gas. So he did.

It is worth remembering how much Russian money our ruling party accepted, that we have the son of a KGB agent in the Lords and that we have a lot of question marks on what exactly has gone on here in recent years.

Everyone needs to review their relationships. Supposedly the Austrian secret service is so compromised by the Russians that the rest of the EU won't share information with them.

Hoopie do you think Germany's energy policy makes sense through the lens of my own personal conspiracy theory.

This hypothesis is that Germany is obviously desperate for a world war given how long its been since they started the last one.

However this time they really want to be the goodies.

Germany is seeking the Goody Krieg.

This makes Trump, Brexit, Boris and Putin make perfect sense, all the result of Germany's long con to start WW3 as the goodies.

Perhaps their energy policy has been constructed in such a way as to give them a legitimate reason to invade Russia, when inevitably Putin kicked off.

Occam's razor imo.

lol

Do you think they'll invite us to participate? To exclude us due to Brexit would seem churlish and neglect the long-held traditions of these things.

Well I assume they want a rematch of WW2 but this time Germany = the goodies.

They got close to uniting Trump, Putin and Boris but missed their window imo.

In with one Liz, out with the other

Our own dependence on Russian gas has hitherto been about 5 per cent, so it's not a matter of availability but market price. The market price has rocketed mainly because of Germany's quite insane dependence on Russian gas for more than 50 per cent of its needs.

It may be something to do with war guilt and the long hangover from Brandt's Ostpolitik, if your memory goes back that far. The essential institutional madness of the Bundesrepublik was hidden for a long time after the war by apparent economic success and attractive export products, but it was always there.

It's not quite that simple. UK gas is basically 50% North Sea, 35% Norway, 15% LNG. The absence of Russian gas throughout Europe means that molecules that are less geographically constrained are competed over to replace Russian gas.

The market is so tight that any adverse event (cold winter, anything that means LNG can't move, gas field issue, whatever else) puts that under further stress.

It is often overlooked that that prices were already up massively from historic norms during the year running up to COVID due to various factors (I'll detail them if anyone wants). This left European storage a lot less full than was ideal, and IMO it was this that Putin likely saw as an opportunity to roll through Ukraine (having already tried and failed to bring it under his control twice before via puppet governments), because he probably bet on the Europeans not wanting to jeapordise gas supply when it was already heavily restricted.

The gist here is that the UK is, at this point, better placed that Germany and some of the others. However if this winter is very cold (and the chances are against it), or it is cold and this combines with other factors, we may be in a position where we need to think about shutting down industrials or otherwise curtailing demand.

Actually genuinely curious. I imagine I could guess most of them but there will be quite a few I didn't factor in.

Also really interested to hear you opinion on Truss's package yesterday?

Personally I think it's a disgrace but kind of what I expected and I thought Starmer put up one of his best performances at the dispatch box even though it may all be in vain.

Broadly it is as follows:
If you cast your mind back to two winters ago (I'm broadly talking about the period December 2020 - April 2021), Europe had a long, cold winter. I was WFH due to lockdown, and most days from Christmas Eve onwards were basically cold, cloudy and still. April was also unseasonably cold. When you add all these factors up, not only did you have higher than expected gas burn (WFH/lockdown played its part, as people were running their heating more when they were normally at work). Also, European gas storage normally injects April to September, when demand is lower, and withdraws October to March, when demand is higher - but the cold April meant storage was being drawn down on, not replenished.

The result was that storage was more depleted than usual and hadn't refilled as much as normal (c. 78% full vs 90% plus, which doesn't sound like a lot, but it is). Russian gas flows were also lower than normal (these were believed to be for genuine technical reasons, looking back it may not be so) and there has been a lot of supply curtailments (e.g some from Norway) due to technical issues.

There was also lower than average wind throughout Europe, so renewables were generating less than you would like. Asia was also locking up a lot of LNG - demand had rebounded, supply there has been tight and governments have pursued pro-LNG policy.

Re Truss's policy - it's a really blunt instrument. I'm not really a fan. Basically to reduce the pain, you either need to increase supply, or reduce demand. You can't really increase supply in the short-term, so you need to reduce demand. The Germans have worked this out already. As a bit of low-hanging fruit, someone needs to produce a ten point poster to go out everywhere and tell people how they can do this - I'm not sure what they might be, but can you turn your thermostat down, can you put it on later or turn it off earlier, can you run your washing machine and dishwasher later in the day or whatever.

People hate things, like this, but personally I'd be giving money to each household. Lots more for those on means tested benefits, much less for those that aren't. This means that (a) those at the bottom get more than those at the top (b) you cap the cost of the scheme to the government (c) more importantly, you give people a serious incentive to reduce their energy demand, but you also give them the money to keep using if that's what they need to do.

The fracking thing is nonsense, it is simply crap that gives a semi to men in their sixties that are Conservative Party members, it'll make no difference to anything.

We all became conditioned to living in a world where energy was cheap, and that's unlikely to be the case for the next 5 years plus. This is a matter of national/global importance, and it feels like the government backstop makes people think the issue has gone away, when it hasn't. Truss should be addressing the nation here, she can sell it as use less energy to support Ukraine or whatever.

In general, I'd be careful of believing too much of what you read on this stuff. Anyone on Twitter purporting to be a self-taught expert is likely not to be. I read an article on the BBC that was simply wrong on a key point.

People talk about "global gas markets". Electricity and gas are hard things to store, which is what makes them subject to wild price fluctuations. There are lots of local/regional factors that make the market partly global and partly not.

Thanks man that was a really good reply to both my queries.

Also thanks for the below I had a really good chuckle at it.

Thanks for some excellent posts, Hoopie1.

Thanks gents, I've nearly reached 25,000 posts so it's good to finally have produced one of some use. It really proves the whole monkeys and typewriters thing.

Hoopie1, you're a brick!

Yep, great post

Regarding your first point, I've seen all kinds of research showing people have their thermostat set to crazy numbers, e.g.,

Five million UK households set thermostats higher than Lanzarote

I have mine at 19-20 degrees in winter, and in my view this is more than sufficient if you can be bothered to put a sweater on when it gets chilly.

I also agree with your second point about giving money to people - just don't cap prices and give every household an extra grand or use the benefits system.

Regarding Truss appearing on TV, I also thought this, but I wonder if the government have considered this and rejected the idea as we saw how people stripped supermarkets down like locusts when Boris announced the first lockdown. They would surely do the same if Truss appeared on TV, and that's the last thing we need right now.

Might be giving the government too much credit here, but it is a possibility.