Energy Crisis? Where exactly?

As I write this, off to the left hand side of my desk is the "estimated" cost of gas & electricity for the next 6 months. My bill has been "estimated" at 114% more costwise not helped of course by the "standing charge of 65p a day" - and that's before I use a single unit of gas or electricity. I guess those shareholders need to be kept happy ehh?

What I'd really like to know is why, if the UK gets just under 5% of oil & gas from the Russian Federation, has the bill shot up so much? I'm sure there are many complicated reasons but to the average bystander in the street one assumes that the energy companies are taking the absolute Micheal. "We've more money than we know what to do with" - Ehh BP?

The much vaunted £200 "loan" that I'll be supposedly getting from the government in October, is going to offset this rise slightly. The phrase band-aid & broken leg comes to mind straight away - i.e. it simply won't cut it or make one jot of a difference. And incredibly, at the recent Commons Select Committee on Energy, the Chancellor said this isn't a "debt" as there's no interest on it and no ones credit rating is affected. That's OK then - I just won't pay it back then Rishi? Ohh wait - it's taken at source. Damn.

The UK used to have some of the best storage facilities on the planet but successive governments decided that adopting a PAYG system for oil & gas was a much better solution. How wrong they were. At one point in the early 2000's we had enough storage facilities in the UK to look after all of the UK oil & gas needs without replenishing for up to 14 months - and even as time went on, this figure only dropped by two months - meaning that the huge price increases we're seeing now could have been easily offset until the "volatility" (as described by the Chancellor of The Exchequer) eased and prices returned to a somewhat "normal" level. Almost all of these storage facilities were decommissioned in the mid 2000s. I'll bet the Energy Secrectary is kicking himself now in his office.

I think everyone agrees that we need to wean ourselves off oil & gas - there is no question about that, but as it stands right now, the alternatives just aren't there in the volume that we need. We have a National Grid that is presently running at just over 97% capacity based on todays consumption levels, let alone what this will be like in the years to come. Green polices are great but they're simply policies - not actual things that we can do right now, this minute. We still need to heat our homes and transport ourselves around the country and indeed the planet.

The recent Spring Statement by the The Chancellor had VAT removed for the installation of solar panels. A paltry 5%. Big deal. At present (and I checked tonight), the average cost of a good solar installation with a good storage system on the average sized house in the UK is going to cost in excess of £13,000. It's a lot of money for a lot of families - and in my opinion is still far too expensive for the average household in the UK trying to juggle all the other bills such as the general day to day cost of living crisis (and it is a crisis!) along with the tax rises (even though the Chancellor said he cut tax?) that most are seeing coming through their pay packets over the coming months. We have inflation running at nearly 7.9% as I write this; and it's forecasted by the OBR to hit 9.2% by October of this year. That's the biggest rise in inflation for over 55 years.

Energy security has been ignored in this country for decades. In the 70s it started with the oil finds in the North Sea and we were all assured at the time that "the UK would have a bonanza with cheap energy for decades to come" - that turned out well didn't it?

There is a crisis - most definately - but not where you might think. There is absolutely no shortage of gas & oil. In fact, it's estimated that even at present levels of consumption, and accounting for a year on year reduction of just 1% in fossil fuel useage, we have up to 450 years of supplies based on the PRESENT fields available and not accounting for new finds, assuming that a transition over to clean energy production in "ongoing" - which it's not. The crisis is with the oil & gas companies who artificially reduce output to drive up prices. OPEC for example: have stated that they're willing to up production but only if a "fixed price" per barrel is agreed beforehand. Essentially it's an energy blackmail crisis.

The UK is in a far better position at the moment than our European neighbours who have heavily relied on The Russian Federation for gas for decades. Up to 40% of gas supplies into Europe comes from Russia. Not good. Not good at all - and again, for decades (literally decades) analysts were warning about the reliance placed upon Europe for Russian gas. And now it's coming back to bite us all. Big time.

The recent heartbreaking scenes we've seen in Ukraine have been a turning point for Europe, and indeed the West in general. And moreover was a huge realisation that no matter what it costs, we need to move away from oil & gas - which has now been "weaponised". We've literally seen prices triple, quadruple and triple again overnight for the cost of energy.

The "per Therm" cost of gas is still at record levels and the cost of oil (Petrol/Diesel/AutoGas) etc has also massively increased. At one point last week, a litre of petrol from my local suppliers topped £1.91 a litre and the Chancellor (with a straight face too I might add) said that "taking 5p off the cost of a litre of petrol is the single biggest tax decrease we've seen on fuel in over 20 years." - How utterly insane is that? 5p. Just let that sink in for moment. The second "crisis" is the governments reliance on tax receipts from fuel. Motorists, homes owners, or indeed anyone that uses any kind of fossil fuel here in the UK have been used as cash cows for decades. If the government were really serious about the "Green Agenda" surely having incentives (other than getting rid of the 5% VAT on solar panel installation) would be a good start. A cut in VAT isn't an incentive. It's a joke. And moreover it's an insult to anyone that is finding things hard just to get by from day to day.

I'm in the enviable position that I work for great company and work with some of the best people you could hope to meet. But I know that others are just about surviving. Any little upset to that delicate balance will see those people literally freeze in their own homes. Just let that sink in for moment. That's in the UK. In 2022. IN THE UK FOR GODS SAKE. I've been lucky enough to have been able to put away some money for "unforeseen circumstances".

However I never thought for second that the "unforeseen circumstances" would be so that I could heat my home and turn the lights on when needed. A fact that seems lost on the powers that be in Westminster.