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Prepare for energy rationing - by Juliet Samuel for the Telegraph - 07.10.22

The whole of Europe, including the UK has succeeded in snookering itself when it comes to energy, argues Juliet Samuel in last week’s Telegraph. Such is the shortage of supply, blackouts, she says, are a very real possibility.

“The National Grid has warned that households may be cut off for certain periods of the day if the weather turns. Aside from relying on Thor, our fate will be governed by the vagaries of global liquefied natural gas (LNG) prices, gas rationing on the Continent and domestic demand.”

If rationing is imposed, and the author believes it will be, the consequences – politically and economically - are dire:

The only question is how bad it will be. If certain heavy industry is forced to shut down (as it already has across much of the Continent), most regular punters won’t notice, despite the economic damage it wreaks.

But if households are told to switch off their Netflix streams and forced to spend candle-lit evenings talking or reading, by God they will notice that. If, even worse, power supplies dip unexpectedly, causing lethal factory or hospital equipment to turn off and on, the public outcry will make Ms Truss’s current polling numbers look positively Blairite.”

But problems abound in Europe too:

“One of the biggest sources of winter gas in Europe is Germany because of its prodigious storage capacity (we shut down most of our storage in 2017 to save cash – hey ho). Unfortunately, as you might have heard, Germany itself is rather short of gas.

A Deutsche Bank model for German gas stocks has the country running out by this Christmas unless it slashes both exports and domestic demand. Meanwhile, Opec and Russia sent the oil price rocketing this week after churlishly refusing to increase production, despite supply crunches and recession across the world.

With energy costs so high, there is even talk of a totally mad EU plan to cap LNG prices, forcing sellers to accept an artificially suppressed rate for their gas. How exactly that would play out for the UK is unclear. On one hand, it would make the uncapped wholesale price offered in British markets relatively attractive to European gas suppliers and global LNG tankers wondering where to dock.

The gas would start flowing Britain-ward. On the other hand, it may well put off additional tankers from coming up to Europe in vast numbers because they might rather chug off to serve uncapped prices in Asian markets instead.”

As for our own government, the penny does finally appear to have dropped:

“Energy minister Graham Stuart admitted that it was “impossible” to predict if there would be blackouts this winter but did add, comfortingly: “We are not planning to have that.”

And if there are…?

The full article can be read below with a link to the original here:

Article for the Telegraph by Juliet Samuel - Prepare for energy rationing^J whatever delus
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Daily Telegraph

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