Is the Dollar in Danger of losing its Reserve Currency Status?

China will be buying Russian natural gas in ever increasing quantities. Both nations will benefit from the trade, but the trade will be ground breaking in one particular way. China will almost certainly pay for the gas not in US dollars, but in Roubles or Yuan. I doubt if either Russia or China will want to buy and sell dollars to trade in natural gas. For economic reasons as these economies become stronger in their own right as well as becoming relatively stronger than the American economy then neither Russia nor China will want to hold too many dollars. Continue reading

South Stream Construction Halted

When the South Stream gas pipeline is finished Russia will through that pipeline be able to supply Europe with 15% of its natural gas needs. The line starts in Russia, will flow under the Black Sea and hit land in Northern Bulgaria, where it will then travel to Serbia, Through Hungary and Slovenia and thence into Italy. Gazprom hopes to own the pipeline and have paid for the construction thus far, but the European Union is uncomfortable with Gazprom owning 100% and seek to restrict its ownership to 50%.  Continue reading

Spot Gas Falls by 30% Since Ukraine Crisis Started

Politics and wars affect the prices of commodities which come from politically unstable regions or regions where there is a threat of war, armed conflict or insurrection. Since the crisis in Ukraine started the price of natural gas on the spot markets has fallen by 30%. I expect that this probably due to expectations about the prospects for shale gas, and perhaps a lower demand caused by warmer than normal European weather. Whatever the reason, I note that the energy companies in the UK have not reacted to the price fall by cutting their prices to consumers.
According to the energy companies, the price of gas that they buy accounts for more than half the energy cost of gas that the consumers pay.

Russia, China and Future Growth

Ten years ago conventional business wisdom was that if you had to make something you moved the production to China and invested (directly or indirectly) in production facilities in China. Today the position has almost reversed. Production in China has been so profitable that Chinese businesses are encouraged and urged to invest their profits in business in the United States, the European Community and other parts of the world. The Chinese economy has transformed from a branch of the western economy to an economic centre in its own right. Continue reading

In The Long Term We Are All Dead

As many people have expected the process of fracking releases much more methane into the atmosphere than official figures credit. A new study published in the Proceedings of the National Academy of Sciences shows how researchers used an aircraft to collect information about atmospheric methane concentrations and measured them. Continue reading

Pop and Pizza for Bobtown’s Fracking Pop

On 11 February this year an explosion occurred in Bobtown Pennsylvania in a shale formation where Chevron was fracking for natural gas. One work is missing presumed dead and the flames caused by the explosion burned for five days. Continue reading

The Process of Lobbying for Fracking

The present discussions about fracking for shale gas shows the processes which occur when private enterprises undertakes tasks that are supposed to benefit the common weal. The same processes occurred when energy was privatised. There are four stages Continue reading

Fracking Disappointments in Poland

In the United States of America and Canada fracking shale for natural gas has proved a profitable enterprise. In some parts of the US the price of natural gas has dropped significantly as a result of gas “fracked” and as a consequence of burning natural gas instead of oil or coal, the USA has emitted less carbon dioxide. This raised hope that fracking would produce the same results in Europe as it did in the USA and one of the best possibilities for fracking was in the shale deposits of Poland. Continue reading

Keeping the Gas On

As I write these words, on the second day of Spring after a long hard cold and wet winter in London, it is now snowing and the snow is settling on the roof tops and on the cars. Spring snow is rare, not quite as scarce as hen’s teeth, but an event to be noted. Continue reading

Manipulating Wholesale Natural Gas Prices

The news that traders in wholesale gas might well have manipulated gas prices fraudulently is being taken seriously enough to be investigated by OFGEM and the Financial Services Authority. The claim was made by a whistle blower, Seth Freedman, and while we should always presume innocence I am not unsurprised by the claim. Continue reading