Fracking

ILW

Fracking in the USA has reduced gas prices by loads, yet we are told that even if we did manage to produce similar per capita volumes here it would not affect prices as it would just go to the wholesale markets and we would have to compete for it.

Does the USA not also buy from the same international markets?

michaels

No - shipping LPG requires huge investment and still isn't that efficient due to the volumes involved. The US natural gas was so unexpected that the only US terminals were built for importing the stuff with no compression facilities and the wrong places (close to demand rather than supply). No doubt facilities are gradually getting built. Compare this to the UK with all our expensive import interconnections that can equally be used for export.

ILW

So if we banned the export of fracked gas, we could greatly reduce our energy prices?

Or am I missing something?

wotsthat

ILW wrote: »

So if we banned the export of fracked gas, we could greatly reduce our energy prices?

Or am I missing something?

We don't have any storage facilities let alone export facilities. Export is therefore 'banned' already.

Wouldn't we consume the local supply in preference to imported supply anyway?

ILW

wotsthat wrote: »

We don't have any storage facilities let alone export facilities. Export is therefore 'banned' already.

Wouldn't we consume the local supply in preference to imported supply anyway?

So why are the government saying it would not reduce prices as they would be tied into the wholesale prices?

TruckerT

Is it true that fracked gas produces less carbon etc? I saw a headline recently which seemed to make that implication, but I haven't been able to follow it up.

TruckerT

ILW

TruckerT wrote: »

Is it true that fracked gas produces less carbon etc? I saw a headline recently which seemed to make that implication, but I haven't been able to follow it up.

TruckerT

I couldn't care less, just want it cheaper.

wotsthat

ILW wrote: »

So why are the government saying it would not reduce prices as they would be tied into the wholesale prices?

Don't know. If it's no cheaper than wholesale we may as well use up other countries cheap raw materials before fracking - the gas won't go anywhere in the meantime.

Is that really what the government said?

ILW

wotsthat wrote: »

Don't know. If it's no cheaper than wholesale we may as well use up other countries cheap raw materials before fracking - the gas won't go anywhere in the meantime.

Is that really what the government said?

The US stuff is much cheaper than wholesale.

grizzly1911

wotsthat wrote: »

Don't know. If it's no cheaper than wholesale we may as well use up other countries cheap raw materials before fracking - the gas won't go anywhere in the meantime.

Is that really what the government said?

I believe so it would go into the European "grid" via the inetrconnect pipe network.

The fracking companies would need to recover their costs (as yet unknown) and provide a return on capital. Under European rules they woud offer it into the market and take the highest price. I am sure the various producers will throttle the supply to maintain prices. Why would a supplier want to sell cheaply?

No doubt the exchequer will cream off some dosh in the process.


Th USA is more of a "closed", insular market.

ging84

ILW wrote: »

So if we banned the export of fracked gas, we could greatly reduce our energy prices?

Or am I missing something?

you are missing that it wouldn't get fracked because no one would invest, or at-least not anywhere near as much as they would if they weren't going to be force to sell it in UK.