UK energy decline continues - DECC Energy Trends Sep 2012

DECC has just published their latest quarterly Energy Trends, and surprise surprise, the UK's energy production is continuing to plummet. The headline figure is that total indigenous energy production has fallen by 10.1%, but this includes nuclear power, which isn't really indigenous as we have to buy uranium for reactors from other countries. So excluding nuclear, the drop is actually 11.4% compared to a year ago.

Here's the breakdown of the overall changes in production from Q2 2011 to Q2 2012:

• Coal: down 2.9%
• Oil: down 12.2%
• Gas: down 12.9%
• Nuclear: down 3.3%
• Renewables: up 6.5%

While it's pleasing to see renewables up 6.5%, we should bear in mind the relative quantities of energy we're talking about... So here's the amounts produced in Q2 2012 in Mtoe (million tonnes of oil equivalent):

• Coal: 3.8 Mtoe
• Oil: 12.9 Mtoe
• Gas: 10.2 Mtoe
• Nuclear: 4.2 Mtoe
• Renewables: 0.43 Mtoe

Still a very long way to go to get off fossil fuels then...

The Energy Trends table 1.3a (page 11) conveniently tells us the total energy import dependency of the UK as well. Here's the results for Q2 over the past 3 years:

• Q2 2010: 26.0% imports
• Q2 2011: 31.8% imports
• Q2 2012: 42.1% imports

Anyone else spot a trend here? 42.1% is a new record level of dependency on imports, and if the trends keep going the same way as in previous years, we'll set some new record imports in the next two quarters as well.

Here's a few graphs from the report for the key energy sources:

 Oil import/export/production

Gas import/export/production

Coal imports/production

 

Fuel used to generate electricity

 Renewable sources of energy

So, with ever lower energy production, and the changes to gas storage I mentioned in my previous post, we may be in for interesting times if this winter is a cold one...

Mike

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UK gas storage and winter 2012/13

It's a bit early yet to start thinking in earnest yet about the UK's gas supply for this coming winter, though if some of the concerns about melting Arctic ice causing cold European winters prove correct, we may have problems.

However, there is one little snippet of information that came out this summer from national Grid about the closing of two of the three short range gas storage sites. These facilities stored gas in liquefied form (LNG), and could rapidly reinject it into the national grid in periods of high demand. The couldn't do it for long, perhaps just a few days, but it would usually be enough to save us from serious problems.

Here's what National Grid said:

Closure of Partington and Glenmavis LNG Storage Facilities

27 June 2012

Following the LNG Storage Strategic Review in 2010, Commercial Storage Services have not been offered from our sites at Partington in Manchester and Glenmavis near Glasgow since early 2011.

Our LNG stocks were withdrawn from Partington in March 2011, following which a
decommissioning process has been undertaken and the site was formally closed on 31
March this year. A demolition contract has been awarded to Masterton Ltd who will demolish the tanks and remove all the other equipment on site over the next six to twelve months.

In the absence of any contracts to fund ongoing LNG storage services from Glenmavis, the decision has been taken to close the facility and the remaining LNG stocks were withdrawn in May. The decommissioning process has now commenced and when this has been completed the LNG storage facility will formally be closed.

These decisions do not affect the provision of services from our remaining LNG storage facility at Avonmouth near Bristol.

The net result is that back in Sep 2010 we could inject 389.8GWh of gas a day from short range storage into the grid, and now the figure is only 143GWh/day. For comparison, this is equivalent to 22mcm/day of storage supply going offline, or about 5% of peak UK winter gas demand. This wasn't a problem last winter, as it didn't get too cold. But this winter the supplies from the North Sea will be lower (as they are every year), so if it gets cold for very long, we may have problems...

Mike

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Saudi Arabia burning more of its own crude oil

Following up on an earlier post about falling Saudi oil exports, there's some recent news illustrating the problem:

Saudi Arabia burned record monthly volumes of oil in June and July, official government figures show, contrary to the top crude producer's plan to temper its summer oil burning spree this year with more gas.

The report notes that from 2004 to 2010, Saudi domestic consumption of crude oil for power generation increased by 240%!!! Much of this goes to run air conditioning and desalination - both of which are important facilities when you live in a desert... This leaves ever smaller amounts remaining to be exported, so the only way Saudi can balance its budget is with prices steadily rising. But as that's happening anyway, they don't need to do anything on this front...

Full news article is here.

Mike

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Saudi Arabia to stop exporting oil by 2030?

Interesting story in the Telegraph today, commenting on a report released by Citigroup on the Saudi petrochemical industry. The main issue is that domestic energy demand is rising fast in Saudi, so more and more of their oil production is being used at home, providing power for air conditioning, desalination, etc.

The report says Saudi could be an oil importer after 2030 - but this is of course not going to happen, as if they stop exporting oil they won't have any money, so importing is out of the question. That does leave me wondering what will happen as exports dwindle, as unless prices keep rising (and the world economy may simply not support that beyond a certain point), then Saudi won't have enough money to keep the country running - and we've seen what's happened in other Arab countries in recent years...

None of this is really news of course - the Export Land Model described the situation years ago - but it's interesting to see the same conclusion coming out of Citigroup!

The quote at the end of the article sums it up for me:

Jeremy Leggett, the head of the UK Taskforce on Peak Oil and Energy Security, says Britain is sleepwalking into a potential disaster by failing to prepare fully for a global supply crunch. The refusal to listen to warning signals is comparable to the complacency in the build-up to the financial crisis, he argues, but with graver implications for the British economy.

Mike

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