Haven't had chance to get on here in a while... things have been as mad for me as they have been for you. UK natural gas prices have been following oil ones and are currently varying between about 70 pence/therm and nearly double that, which is something like a doubling or a tripling in little over a month. Electricity prices are consequently up somewhere between 50% and twice what they were last month as well. The big suppliers haven't passed the increases onto consumers yet, but it's really just a big staring-contest - when one of them blinks, all of them will probably follow in short order. (Theoretically an energy supplier who is just using non-carbon fuels doesn't have to pass the price rises on, but you know they will just because they can; probably as much advantage being 5% cheaper than the rest as being 15% cheaper than the rest when you know prices are only rising.)

The environmentalists are supposed to be putting out some more rants tomorrow - you can see one from not so long ago if you like, to the extent of "coal-fired power stations are nasty because they pollute a lot". Now anyone who has a choice will broadly prefer to burn coal (which has gone up in price, but by nothing like as much as gas, let alone oil) because that's where the biggest profit is, and the greenies are up in arms about it. Some enviros protested at a big power station which can burn either coal or gas because they thought it was burning "too much" (read: any) coal and, relatively, too little gas. Ideally they'd want to burn nothing whatsoever except possibly candle-wax, so long as the candles are organically grown. Now oddly enough all the coal-fired power stations are being fired rather hard at the moment and the gas-fired ones are being backed off as far as possible, for obvious reasons, and just as oddly enough the greenies are up in arms about this, saying that the UK generated more CO₂ emissions last month than it ever has done before and blah blah blah Kyoto commitments. Tell it to the Chinese! Isn't the oil crisis affecting them too? Err... ;o)

Didn't I say that I worked at a power station capable of burning coal, oil, gas and everything? Indeed I did. What are we doing about fluctuations in prices? Ah, that would be company confidential information. ;o)

1) It's all manner of wrong to be preached at about the oil crisis by an aeroplane cabin crew. Just sayin'.

2) Normally when I fly into the US I expect to be greeted by a row of hire car facilities (yer Avis, yer Budget and the like) all with neat signs on your desk saying "fill your car with fuel before you bring it back to us otherwise we will fill it for you and charge you $5 per gallon", which is considered masssively punitive. Not any more it's not. Instead we have:

* $300 extra deposit charged, forfeitable if you do not bring the car back fuelled up
* Car delivered with less than 1/8 tank of fuel, be sure to fill it up straight away
* Let us refill the car for you for $20 per gallon
* We will not accept the car less than fully fuelled up and will charge you late fees until you bring it back with gas

3) We hear rumours of a return to national speed limits like in the 1973 oil crisis. Back in 1973 there was a US speed limit set of 55 mph which caused all manner of wailing and woeing, and the UK motorway speed limit dropped from 70 to 50. Dare any government be brave enough to do that again? a href="http://www.brake.org.uk/">These clowns</a>, the "road safety" busybody charity, and these killjoys - who would campaign for a slower country? - must be having a field day.

4) I think we're conclusively proving that all these people who reckoned that we'd all have to turn into post-apocalyptic survivalists and struggle for food and water after Peak Oil are WRONG, though I can hear them adding a "for now" at the end.

5) Talking to my beautiful and brilliant girlfriend, there's a whole different mood in the US as a result in the crisis compared to how it is in the UK. In the UK we just put up with things as part of our national character - in the US, they're really angry, even in a vaguely "something must be done" sense. It's true that the US station fuel prices go up and down by a much higher proportion than the UK ones do, because in the UK, fuel duty (tax) is such a high proportion of the forecourt price. It varies a lot from state to state in the US (I know California is always a good dollar above the Eastern Seaboard) but that's why we don't get doublings and halfings in the UK, just a few pence here and a few pence there.

There is one place in all of Heathrow Airport Terminal 3 to get wireless Internet access without paying for it: the prayer room. I am sat there with my laptop open. I have a browser open with prayers on it which I conspicuously look at from time to time, as well as this browser, but I'm still getting dirty looks. I'm researching prayers on the Internet, OK?

So-o-o-o, my flight has been cancelled. Luckily I have been rebooked onto the next one which is only a couple of hours away. There's a flicker of a rumour of a theory that airlines are starting to cancel not-very-full flights and amalgamate them onto the next not-very-full flights just to save fuel and money - and, of course, the flights are not very full because the compulsory fuel surcharges have got so high now that nobody wants to book flights... well, not nobody, but people are reporting flight numbers are 10%-20% down. People working in aeroplane manufacturer towns are getting really worried as a lot of aeroplane orders might be about to be cancelled. Perhaps in ten years time you won't be able to fly across the Atlantic except by connecting in Dubai, or some other country where the government hands what oil exists to the state airline and nobody else can afford it.

This cancellation lark is a dangerous game for the airlines to play - sure, you can shuffle us cattle class peons around and our grumbling can be easily ignored (it's not as if there's all that long a delay to the next flight, so a few token payments for bread and circuses will keep us quiet) but they have to be very careful that they don't try to get too many people who were due to fly at the pointy end of the plane onto one flight otherwise they'll have to downgrade people and there will be wailing and moaning like you wouldn't believe.

I pray... I pray... I pray for oil, or at least for good news...

Why does nobody ever say that? I can't work it out.

During a smoko today, some of us were reflecting on Amaranth Advisers, a hedge fund that lost US$6 billion in about a week on natural gas futures. It's got us wondering how the hedge funds have been doing out of the oil crisis, because you know someone will have had an interest in the oil price going up, besides people who actually own oil, and the derivatives players may have got a heck of a lot of vega out of the speed of the move, probably more than most of them could have possibly dreamt - or had nightmares about. If everyone has weathered the storm then we might not hear anything, but perhaps in a few months we'll hear one way or the other about who's done well and who's done badly. That's why the markets are down; it's all a zero-sum game, or a very slightly negative sum game, but the people who make gains tend to take them and the people who end up down tend to chase them even though they know they shouldn't. It's human nature. Who knows who owns what shares of which hedge funds, though? Some banks will have made a killing out of it, others will have suffered one. No wonder people are going mile-long on gold, as they always do in times of trouble, perhaps they smell a RUN ON THE BANKS!!! ;o)

Because I'm in a good mood - holiday next week, yippee - I'd better explain, but pay attention because I'll say this only once. All traders consider it good sport to try to convince poor innocent suckers that there's about to be a run on the banks, when there never really is. (Well, almost never.) We do this for two reasons: one, we could do with a giggle; two, we think it'll help our position. It's definitely case one here - nobody's having fun out of this.

Keep this to yourself, but the company I work for have been headhunting - a new boss for our team, actually. We've found our man and I don't want to say too much about him but he's got a reputation as long as your arm and he's white hot. The stunt he pulled, though... we all thought the contract was signed, sealed and delivered, but he threatened to pull out unless they changed it so that he'd get paid in Saudi Arabian Riyals. Same package, according to today's exchange rates, but you know as well as I do that that's not going to last long. He claims that it's because he has lots of family over there and needs to get ready funds for next time he goes to visit but, hey, it's got to be part tax dodge, part currency play. And you know what? Our company want the man so badly that they're going to go well out of their way and set up all sorts of accounting changes just to stop him from leaving before he even starts. Damn, now that's a way for a boss to get the respect of all his subordinates before day one on the job! ;o)

There were a load of elections in the UK recently and here are a few quick thoughts while we're waiting for the results...

Most of the elections held were for local councils. Apparently a lot of voters yapped their flaps about how important the oil crisis and its knock-on effects were to them, but this is exactly the sort of topic that a local council has very little control over. There seems to have been a lot of copycat policies whereby seemingly every party in every council has pledged that they will use official cars far less than before and pledge to cut the council fuel bill down to something absurdly small. A few people are talking about trams and monorails and all sorts of things but they will all take years to come to fruition. Really this is far more of a national and global issue than a local one and just the sort of thing where councils have very little impact beyond the likes of gimmicks like "walking buses" to schools.

However, there were interesting elections in the Scottish assembly and the Welsh assembly, which are the devolved regional assemblies for Scotland and Wales. In Scotland the Scottish National Party have been making lots of noises about pledging a referendum on independence on 2010 if they get control of the assembly, though the last I heard there's only about a quarter of Scots (and less than half of SNP voters) who actually want full independence - mostly they just want a better deal for Scotland. Can't blame 'em, if I were Scottish then I'd vote for 'em. However, that was before the oil crisis. In the 1970s the SNP came to people's attention with a very effective little three-word phrase - "It's Scotland's Oil". They've based their party on that ever since and the notion that an independent Scotland would be able to keep much more of its oil revenue than under the current thinking. Now in this day and age that could be worth a lot more than everyone was planning. Here's an analysis of what the difference would be to Scotland with more oil revenue and less public spending, done when oil cost a lot less than it does now. I don't hold a lot of respect for economists, oddly enough, but I reckon this one is at least more likely to be a fool than a liar. That's about as high praise as economists get from me ;o)

In any case I reckon there's about a zero point zero chance of any Scottish independence referendum happening for real before 2010 as planned, no matter how high the oil prices get.

Before we start, wwo_thomas reckons UK petrol is over a quid a litre. Nationally he's broadly correct but if you know where to look there's still a supermarket around here that sells at 98.9p/l... if you buy £10 of shopping from them! Generally a few stations are trying to keep things at 99.9p/l because it looks pretty, which works out at £0.999/l * 3.7854 l/US gallon * $2.05/£1 = US$7.75 per US gallon here in the UK. Ouch.

All right gang, eyes down and you might learn something ;o) This is all off the top of my head to keep the numbers simple - the specifics might not quite be right but the generalities are. Besides I don't want to give you all my trade secrets, do I?

Power in the UK is traded on the open market. It's created by lots of generators or by importing it from overseas. It's used by, roughly, either big industrial users or power distribution companies who will sell it on to small industrial users and individual consumers like you and me. There are six big power suppliers to consumers in the UK. Each of them own some power stations and will usually make too much electricity or too little electricity. It's up to traders like me to sell or buy to make sure everyone has just the right amount. There are also a few companies which own power stations and just sell the electricity they produce to whoever will buy it, either on the market or through long-term contracts. (Often a bit of both.) Muddying the waters there are investment banks who trade electricity like it's gold or orange juice or pork bellies or anything else they can make a profit on, and there are also brokers who will try to match up buyers and sellers when the market isn't doing so good a job and take their cut from the middle. It's all a zero-sum game, or even a slightly negative sum game.

Anyway, the consumers have a good idea in advance of how much they're going to need and will do deals in advance to get their positions roughly balanced, but predictions never turn out to be quite right and there's a balancing mechanism (don't worry, you're not meant to understand it - I'll explain it some day if we both get bored enough) to make sure that it all matches up, near enough, at the end of the day. You produce too much or you consume too little, you get rewarded a very little bit for it. You produce too little - for instance, when one of your stations stops working - or you consume too much, you get punished a lot for it, but the National Grid gets the electricity it needs from elsewhere. It all balances out and there's enough of a fat profit to be made to keep the system running.

As I said before, in the UK we generate our electricity from, very roughly, 35% coal, 30% gas, 25% nuclear, 8% renewables and 2% oil. Let's consider those one at a time.

The UK hasn't had a power station that burns oil first and foremost running 24/7 in active production for years, since the days of the $10 barrel. Littlebrook, Fawley and Grain still survive but these days they only ever get fired up for a couple of hours at a time and that's if the National Grid are really struggling to meet demand. Over time, likely those stations will get converted to use other fuels, maybe palm oil or the old deforestation diesel. My very rough guess is that they'll each have maybe enough oil in stock for a hundred hours of running at a completely wild guess, and normally on about 90% of days then that oil never gets touched. The oil crunch means that they probably won't be buying in any more and the Grid will have to look elsewhere for last-resort generation. 90%-95% of days, this has no effect. Most of the rest of the time, the Grid won't care much. Very occasionally - one day in a year, in two years, in three years, maybe - this could cause a problem. Probably not, but only probably.

Coal-fired power stations: coal has tended to be the cheapest of the fossil fuels for a while now and that's probably going to become even more the case these days - coal prices go up and down like all the rest but never nearly so much. Of course you need to get the coal to the plants (hello, 1970s strikes) and you need there to be enough coal in the first place. It's also relevant that when you burn coal you create a heck of a lot of pollution.

Nuclear stations: these cost an awful lot to set up, an awful lot to get rid of and - in theory - not so much to run in between. The cost of producing electricity from a nuclear station will hardly change these days, but the market price of electricity is going up up and away and the nuclear plants should get more money for their electricity. (At least, that which they haven't sold years in advance at a fixed price.) Trouble is that Britain's nukes are getting old - some have shut down and others just aren't working so well. Look at British Energy's share price around about last August, f'rex.

Renewables: oh boy. In theory these are the answer. In practice, they aren't, yet. Now they are getting better but they've always been five, ten or fifteen years away from being the answer for about the last fifteen or twenty years. I'm not saying that we shouldn't invest in them because I think we should, a heck of a lot, but they aren't going to be the magic bullet answer this year or next year or probably while I'm in the job.

Wind power makes up the vast majority of renewable energy in the UK today, mostly from lots of tiddly little wind farms. The UK has something like 70,000 MW of power stations up and down the country. When it's not cold enough for people to need to turn on their heating and it's not hot enough for people to need to turn on their aircon then Britain needs about 40,000 megawatts at most during the day and maybe 25,000 MW at least during the night - subtract 5,000 MW at the weekends. During a cold, cold winter, the most Britain will ever need is about 60,000 MW. Last winter wasn't so bad, the highest demand got was somewhere in the middish fifties thousand, maybe the highish fifites. (In short, we've got loads left in the tank.) Bear in mind that a good sized wind turbine produces roughly one of those megawatts, and a great big too-big-for-land put-it-out-at-sea turbine could do two, three or - theoretically with whizzy science - possibly a whole whopping great five. Considering how many people don't like wind turbines (though I think they're pretty) wind ain't really ever going to play that big a part in generation.

The other problem with wind power is that the turbines only produce electricity when the wind blows, not too hard, not too soft and in the right direction. The UK may have the best wind in Europe for generating power but wind turbines only produce something like 27% of their maximum output. 27%! That's even before maintenance. I don't want to say anything confidential but you could easily expect 80% rather than 27% for coal or gas or oil. The other other problem is that wind farms are pricy to build - the 1,000 MW London Array is supposed to cost a billion and a half pounds. Cha-ching, especially as it'll only produce 27% of that 1,000 MW on average.

Solar power? If you'd asked me a couple of days ago I'd have said "ha ha, NO" but I'll upgrade the "ha ha, NO" to merely a "yeah, right", which is better, or at least less bad. See, I thought Muhlhausen was the state of the art: 30 acres big, or about fifteen football pitches, sixty thousand solar panels, US$65 million, ten megawatts. Ten megawatts! I burp with more power than that. As the article says, the only reason it's a going concern is that local law guarantees to pay ten times the going rate for solar-generated electricity. Gee, that's a market that performs well and without manipulation, thank you.

The reason I'm a bit - bit - less dismissive of solar than I was is this fancy bit of malarky. Pretty cool and at least it looks a lot prettier and takes up less footprint, so it might be an option for, say, the Sahara desert where land is effectively free. On the other hand, as the article says, "Is it true that this power is three times more expensive than power from conventional sources? Yes, but prices will fall, as they have with wind power, as the technologies develop. Also, a more realistic comparison is with the cost of generating power from coal or gas only at times of peak demand - then this solar system seems more attractive. " Says it all to me. Looking at the data, the whole project costs €1,200 million, or about eight hundred million quid, and is set to have a whopping 300 MW capacity. That makes wind power look good.

There's also the fact that solar power only works when it's sunny. The 11 MW project that's up and running is set to generate generate 24.3 GWhr per year. Divide 24.3GWhr by 11 MW and you get something like 2200 productive hours per year... that works out at this whole solar array producing electricity for 25% of the time. And I thought wind power's 27% was bad... To be fair, solar power does a pretty good job for water heating and the more you use solar for water heating then the less electricity you need in the first place, but photovoltaic panels are things to research for another couple of years rather than to rush into service now, I reckon.

Tidal power looks interesting, but the numbers aren't pretty. Even at the most optimistic, the Severn Barrage might cost as little as ten billion quid and produce 4.5 GW. The science reckons it ought to be productive for about five hours out of every 12.5 hour tide cycle, so we're talking 40% rather than 27%, but it's hardly great. Well worth lots of research into this, though.

So that's the renewables myth... not busted, but given a heavy dose of reality. I'm not against renewable energy, it's just not there yet. I want to see more of it used and I want there to be lots of money pumped into researching it, but I want people to realise that it's not all that good yet. It won't be good enough this year or next year either.

So, for now, least worst are gas-fired power stations, my specialist subject. Essentially you pump lots of natural gas out of the North Sea and burn it to (eventually) drive round the turbines that generate the electricity. If you're clever then you can do all sorts of useful things with the steam and waste heat in what are considered Combined Heat and Power plants or Closed Cycle Gas Turbines. Gas-fired power stations are great because they don't emit nearly as much as coal plants and you can turn their level of production up or down pretty easily - turn them down, or off, overnight when the prices aren't there and turn them up to maximum when the prices are good.

Gas prices tend to be very variable, more so than any other fuel source, so this tends to determine whether the gas plants are being fired hard or not - if gas is pricy then gas plants will run to meet long-term contracts and that's about it. Gas prices tend to vary with the oil prices on a global basis. Supplies of gas in the North Sea are a bit uncertain in the long term, but not likely to run out this year or next. In any case, a large chunk of natural gas used in the UK comes from the continent - there's long been a pipe that flows into Zeebrugge and gas flows one way or the other depending on which end will pay more for it. Last October there was another pipe opened, Langeled, which has brought loads of gas in from Norway. Result: natural gas prices this year dropped to a fraction (and I don't mean a fraction that works out at more than one) of what they were last year. That's why British gas bills have gone down. To be fair, the gas companies didn't put them up nearly as much as they could (or "should") have done when the prices went up.

This is really interesting because we have a great big international market for natural gas. Loads of the world's natural gas supplies are in nice sensible countries like Russia, Iran and Qatar (and Algeria?) which makes for all sorts of fun - see the Russia-Ukraine gas dispute, for instance. There's also the possibility of shipping natural gas around the world on big tankers as a liquid. More of that some other day.

Part of the reason why the UK uses so much gas for its electricity is that gas stations are small and relatively cheap to build. You saw how much the renewable ones cost up there? Eight hundred million quid will build you 300 MW of solar power that produces output 20% of the time or a two thousand megawatt gas-fired station that shouldn't run too far off full blat full time if the price is right. That's no isolated example - half a billion quid gets you a gigawatt elsewhere. It's not the long-term solution, but it ought to do the trick for the next couple of decades or so, and it's so much better than oil or coal. Plus you don't have nasty nuclear waste to try to fly into the sun, or something...

The gas price in the UK has gone up and down like nobody's business over the last few years - see this graph, for instance, then read this story about the day when people couldn't give natural gas away for free. (Man, that was a weird time. Electricity traded overnight at prices last seen in the 1960s.) Does anyone have a better graph of this? If not then, very roughly, UK natural gas traded at an average of 50p per therm over late 2005 and early 2006, 30p per therm in late 2006 (after Langeled) and 20p per therm in early 2007. If you know where to look, you can see what the oil crunch is doing these days and UK natural gas is back up around 40 pence per therm. Perhaps domestic gas bills aren't going to keep going down any more.

So now there's much less oil around, everyone reckons the natural gas price is going to go up and up. This would dictate that the gas plants would produce less and the coal plants would produce more, but that brings about its own problems. Can you see what they are?

Of course there's a lot more finesse to it than that - all the big players have great big tanks of natural gas that they pump gas into or take gas out of according to whether they think gas prices are going to go up or come down in some sort of quasi-derivative play. Really the great big price spikes in the British gas market came because the biggest gas storage facility broke. (Heh, there was one other time Rough storage had problems, when it got hit by lightning, and the gas price went up to a fiver per therm for a day. Cha-ching!) There is something very similar you can do with electricity on a small-ish scale, to do with pumping water up and down hills. Pump water up a hill while electricity is cheap, let it flow back down and convert the potential energy back into electricity when it's worth big money. Electric Mountain is for real - it was real state-of-the-art eighth-wonder stuff in 1959 and it's standing the test of time brilliantly today. Some day I'll tell you about kettles and solar eclipses.

Crikey, I've gone on and on and on here. In short, that's why the lack of oil means that gas prices are going to go up, electricity prices are going to go up and all sorts of people are going to flap ineffectively about renewable energy. Watch this space; I'll be taking a keen interest in developments because it affects my job. Hopefully I'll have the chance to tell you how it's going to affect your life, just probably not on days when I have to work twelve-hour shifts ;o)

Two weeks before I go on holiday and I can't wait to get away from all this!

Huh - quicker than I expected. (Tip of the hat to nitefoll.) Tomorrow's papers aren't going to be fun.

Downsides of living within eight minutes of where I work: I am a smog monkey at home as well as at work.
Upsides of living within eight minutes of where I work: I can afford both the rent and the petrol costs to get to work. (Who wants to live within eight minutes of a massive industrial complex?)

Theoretically I can cycle to work, just means I'll have to get up about forty minutes early. Like 5:10 am isn't early enough to get up for a twelve-hour day shift as it is.

So some of my friends told me to get on this LiveJournal thing...

I work at a power station somewhere in the south of England. Don't want to say where, but something embarrassing happened to us a few months ago and we got in the news. We take coal, we take oil, we take natural gas, we take all manner of weird petroleum by-products like propane, we take all the raggy dog-end stuff that people don't want, we burn it all ever-so-efficiently and turn it into lots and lots of lovely megawatts of power. I sell the power to whoever wants it. A job's a job, Bob. You won't find any secrets in this journal, they're more than my job's worth - not that I'm senior enough in the company to have any secrets in the first place - but you may well get a few thoughts of mine on things that are in the public record.

So, yeah. The bluddy Daily Hate were banging on about petrol prices again today, what with the litre at record highs of "£1.10". Maybe it's £1.10 in hard-to-reach places like Wales and the Highlands, and also in the centre of London where they try it on, but it's just - just! - 97.9 pence per litre here out in the sticks. Considering the US$ exchange rate is a bit on the screwed side, that works out at a shade under US$8 per gallon. That's per US gallon of course, damn Yanks don't know what a real gallon is ;o)

Natural gas prices took a bit of a jump yesterday. Not as good... er... bad a one as 2005, but when America sneezes, we catch a cold. All sorts of rumours going on about the oil price, apparently. It's a global market; when oil goes up globally, gas goes up globally. In the UK we generate our electricity from roughly 35% coal, 30% gas, 25% nuclear, 8% renewables and 2% oil. (That's a simple version, not taking into account the Interconnectors.) We can expect the oil stations to be out of the money to run any more and maybe some of the gas ones might have to go from running baseload (24/7) to peaks. Hey, doesn't bother us... *evil laugh* The US burn 40% oil (, petrol, naphtha, etc.), 23% coal, 23% gas with the rest being nukes or greens so if oil goes up much then the knock-on effects on their power prices could get ugly. Bad news for, well, everyone who depends on electricity; good news for people who own oil, coal or gas. Banks and pension funds, really. At the end of the day, we're all just shuffling money from one set of banks to another set of banks, and I'm not shuffling nearly enough into my bank.

God, three weeks to go before I get to go and visit my Bonnie who lies over the ocean and I can't wait. Bluddy airline put their fuel surcharge up again - hey, not my fault if they haven't hedged their position properly. Good job I bought my ticket months ago, not sure I'd be able to afford it now. Maybe I ought to go and get a job in the States - either that or Norway, where at least my pension would be safe...