John’s Blog No. 137 – Pensions –Energy

Pensioners are more dependent on energy than the majority of Society; they spend longer in the home, some housebound, get less exercise resulting in poor circulation and are more susceptible to cold. They  therefore use more heating and light, have temperatures higher, with a high energy consumption.

Their energy bills are higher and take a greater part of the income, which is often close to the poverty level. The soaring energy bills have therefore hit them the hardest and yet Offgen and the Government seem unable to control what is a vital part of our economy.

Trading results are just being reported for the recent cold winter and it is claimed that they make no money from supplying energy to the consumer and even suggest they are losing money by doing us the favour of doubling our energy bills. Meanwhile their exploration and generation arms make large profits.

This is the real problem with competition, if you are involved in producing the raw material, converting , distributing and finally delivering it to the consumer, you have a monopoly and can decide which is the best place to make your profits

Of course rising world energy prices are a bonus and a good reason to blame; nothing to do with you, while you charge the higher price and increase profits, salary and bonuses. Prices go steadily up, but fail to respond when oil and gas prices drop, a one way street.

The reason given is that contract prices are committed for many years ahead and are therefore slow to respond, all part of the speculative futures markets and when it is time to bring them down they have of course risen again, making it impossible to do anything.

Of course when the contract is with yourself, or an associated Company, you can agree anything you like on price, regardless of the real cost of the product. It costs no more to extract gas and oil than it did several years ago, in fact Technology has made it cheaper.

In spite of rising World demand, supply has kept pace, reserves are high and new sources, e.g shale gas have improved the situation, which is kept artificially high. We still have good North Sea reserves, in spite of squandering them when prices were low, yet although it belongs to us in the UK, we get no price benefits.

Of course high profits are needed to finance investment, yet we have an impending generation crisis due to old stock not being replaced, so where is the investment? The problem is private investment, which has become too private; the moral high ground has been replaced by greed and short term interests.

There is little long term planning or investment, or even common sense, if your business depends on energy generation, then you need to ensure that the capacity is there to ensure a future. The State shares a major part of the blame, they passed it all over, but not ensured the necessary controls and guidance to make it work.

The large shale gas reserves offer us a way out and of siting generation where it is needed, it can and should be exploited in a considerate and safe manner; the modern technology exists to do so but it needs a good PR job.

Green energy is another area, if it was not so expensive, it would be one big joke. The Chinese  generate more CO2 per second than we save by green energy each year, yet we are crippling ourselves trying to do it, both economically and individually.

Climate change is a World problem, we are putting an insulating blanket of CO2 and methane round the globe, which lets energy in but not out, yet alone our efforts are pitifully small and ineffective. Many are misguided, biomass and wood burning just releases stored CO2, which is best left captured.

We need to clean up our act, use less energy in our daily lives and embrace true green technology; the Severn Barrage could generate 6 to 10% of our energy needs, similar hydro-electric schemes could give more, all run without the doom and gloom merchants consequences.

Electricity is the key, Co2 emissions could be more readily controlled at source giving greener generation, a vacuum freight transport network could be cheaply installed, halving diesel use or more; rail electrification would be a priority must and if we forgot our obsession with speed, electric cars could take off.

Green does not have to be expensive but does require a change of attitude and lifestyle, many solutions are useless, how often do you see wind turbines rotating, they just sit there, with steadily reducing utilisation factors, now below 20%, other methods are just as bad and we pay for them in our energy bills.

We need energy but it should serve us and be free of profiteering and used wisely, it is currently becoming unaffordable to all consumers, returning us to the good old days of unheated houses and darkness. We should fully utilise our energy sources and use our ingenuity to make the dirty ones acceptable and clean.