why are energy prices rising in the UK, when their main sources is its own North Sea gas?
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The UK imports most of its gas, so it has to pay producers in other countries.
Things were reasonably stable until last year when Russia started shutting down supplies to mainland Europe. Suddenly, the other European countries were contacting suppliers all around the region and around the world asking for supplies of gas.
There isn’t enough gas to go around, so buyers are simply out bidding other buyers to make sure they get the supply. This is causing the price to rise.
The UK actually has lower gas prices than most of Europe because the UK invested in ports capable of bringing in cryogenic liquified gas by tanker, while many European countries don’t have this often. This means that the UK is able to get access to more supplies via tanker and can therefore get lower prices.
When gas is extracted from the earth, you need somewhere to put it or you need to use it.
The UK North Gas fields are definitely a source of gas for the country, but the gas field is insufficient to meet all of its demand and Britain must therefore import gas from other places, like Norway, to make ends meet.
Many countries without these Gas fields maintain large gas storage facilities. These facilities allow them to buy gas in the winter and use it in the summer. That way, it’s much cheaper and can shield people from the high cost over winter.
A few years ago it looked like gas was plentiful and the shift to renewables was going well. The UK decided to roll back it’s already small storage facilities and it’s now capable of storing less than 1 winter-month of Gas for the country.
This worked fine for some time, until everyone started panicking about gas capacity this year! Now everyone with storage capacity (like Germany) is filling up their tanks, investors are betting the prices will go up and driving it higher, and the UK has no storage to shield it from these large increases in price.
Even if the UK stopped selling it’s North Sea gas to other countries, the lack of storage capacity would mean the UK either needs to “use it or lose it”. In any case, it doesn’t produce enough to support its own needs anyway. Therefore, the UK is fully exposed to the global market price of natural gas.
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The companies that own the oil and gas fields are selling their fuels at market prices. The energy companies are buying at there prices.
Think about it.
Imagine if all whiskey prices across the world doubled because there was a world shortage…..in Scotland whiskey would still double in price as why would companies sell half price whiskey in Scotland when they could get X2 else where
gas price up cuz war. norway give gas to uk, norway needs make money, norway make expensive.
Because energy is a commodity whose price is set by the world market rather than being set locally, regardless or who where the commodity is produced.
Bc gas is a limited resource that we’re running out of?
Basically many commercial goods have what’s called Inelastic demand. This means that no matter what the price is, the total consumption won’t be reduced by much. This is primarily the case for needs, like fuel food water and housing. When companies, whose goal is to acquire money and nothing else, realize that basically any excuse about world events allows them to raise prices without much backlash, they will, shamelessly and without consideration for the people who have needs that are now harder and harder to meet.
Because gas is fungible. Why would the price of North Sea has be lower than the price of Russian gas or any other gas in the world?
The real question is why the whole Western world has similar problems and similar, albeit different, circumstances.
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