Meltdown

[(poco) Sforzando]

Oh, driving at moderate speeds is impossible. Why? Because everyday I'm about to be run over by a huge truck or SUV while going 5 miles an hour over the speed limit. I really don't care anymore, I'll just let them run over me. It'll be on their conscience the rest of their life, after all.

Whatever. Drive as fast as you like, but then don't turn around and complain that gas is so high.

[BachQ]

Corn, rice surge as global food tensions mount
Tue Apr 22,

By Ayesha Rascoe and Nicole Maestri

WASHINGTON/NEW YORK (Reuters) - With global tensions over food supplies mounting, prices of world staples rice and corn surged on Tuesday amid strong demand and concerns over slow planting of the new U.S. corn crop.

Meanwhile, the Asian Development Bank warned Asian countries against export controls, and the Inter-American Development Bank said the food-versus-fuel debate had changed the way it evaluates financing of biofuel projects that could siphon off staples like corn or soybeans.  Even in the United States, the world's breadbasket, a leading retailer reported signs of growing concern about rising food costs and dwindling supplies.

James Sinegal, chief executive officer of Costco Wholesale Corp (COST.O: Quote, Profile, Research), a U.S. warehouse club selling food to consumers and businesses, told Reuters on Tuesday the retailer had seen a spike in demand for items like rice and flour.

Sinegal said some Costco store managers may have taken "precipitous action," by putting limits on sales of certain items. But he said if the retailer runs out of these items, they are usually back in stock the next day.  "We don't want to create a panic situation," he said.  American bakers also are dealing with tight supplies. Rye flour stocks have been depleted and by June or July there will be no more U.S. rye flour to purchase, said Lee Sanders, senior vice president for government relations and public affairs at the American Bakers Association.

[BachQ]

US regulator fears wave of bank failures
By Daniel Pimlott, Krishna Guha and Joanna Chung in Washington and Ben White in New York
Published: April 22 2008

US bank failures could rise above "historical norms" as a weakening economy puts pressure on badly underwritten loans, particularly in commercial real estate, according to a bank regulator.
In an interview with the Financial Times, John Dugan, who oversees about 1,700 national banks as comptroller of the currency, said the growing problems for lenders follow a period of almost four years in which no institution regulated by his agency had failed.

[BachQ]

Surging oil, disappointing outlooks hit Wall St.
Tue Apr 22, 2008

By Caroline Valetkevitch
NEW YORK (Reuters) - Stocks sank on Tuesday as oil prices neared $120 a barrel and fed worries about inflation and consumer spending, while a series of disappointing profit outlooks made the mood even worse.
Airline stocks .XAL were particularly hard hit, plunging 12.4 percent to a record low, as soaring oil has pushed jet fuel costs to record levels and retailers' shares .RLX dropped 2.2 percent on fears that Americans will curtail shopping to pay for higher gasoline prices.

[BachQ]

Oil must stay high if world to have enough supply
Tue Apr 22, 2008 12:33pm EDT
By Peg Mackey and Alex Lawler

ROME (Reuters) - Energy producers cannot halt a rally that has driven oil to nearly $120 a barrel and the world might have to live with even higher prices if it wants supplies for the future, exporters said on Tuesday.

Three days of talks in Rome between producers and their customers drew broad agreement a weak dollar has pushed oil prices higher and that the cost of extracting more from the ground has soared.

One thing the 60 or so energy ministers and dozens of industry executives struggled to agree was that the price, which hit a record of $119.74 a barrel on Tuesday, was too high.

"The oil market is in a state of fear, if not panic," said Shokri Ghanem, head of Libya's National Oil Corporation, but he also said expensive oil was necessary.

"Prices will have to stay high in the long term to encourage exploration and production."

Producers and consumers alike were worried, but for different reasons. Producers were nervous about falling demand and consumers dreaded economic collapse.

"Oil prices are clearly too high. We are not happy with the prices or the direction they're going in," said Jeffrey Kupfer, acting deputy secretary of energy for the United States, the world's biggest energy consumer.

The International Monetary Fund has predicted the U.S. economy would enter recession this year and some fear high prices could cause global economic damage.

"Definitely it will have some negative impact on economic growth -- that's for sure," said Nobuo Tanaka, executive director of the International Energy Agency, which represents consumer nations.

AGREE ON COST, NOT PRICE

When he arrived in Rome at the weekend, Tanaka said he wanted the International Energy Forum (IEF) to reach agreement the price was too high.

A closing statement said ministers had expressed concern over "the current level of oil prices". An earlier draft had said "the current high level of oil prices".

"The forum noted that oil prices should be at levels that are acceptable to producers and consumers to ensure global economic growth, particularly in developing countries."

Consensus was more forthcoming about the impact of labor shortages in the oil industry and that a rally across the commodities complex has driven up the cost of new production.

"There's definitely cost inflation. On that, there is a certain agreement, but what level is another question, but everybody is saying there's cost inflation. That is one reason for the high price," said Tanaka.

If rising costs are one factor behind higher oil prices, the most topical issue is the weak dollar, which has encouraged investors to flock to some commodities as an inflation hedge.

Iraqi Oil Minister Hussain al-Shahristani said the oil price was not as high as it seemed because it is measured in the U.S. dollar, which has hit record lows against other currencies.

"It's not really so high that it's beyond the capacity of most countries to cope with it," he said.

Producer countries need their revenues, mostly in dollars, to be high enough to finance investment in infrastructure.

Ali al-Naimi, oil minister of leading exporter Saudi Arabia, has repeatedly said the world has enough oil in the near term.

For the future, he said the world's reserves were adequate, but needed investment.

"At its heart, this is not an energy resource issue, it is primarily an investment issue," Naimi said in a speech.

[BachQ]

Surge in oil prices prompts warnings of global recession

By Danny Fortson, Business Correspondent
Wednesday, 23 April 2008


The price of oil has surged to a new record above $119 per barrel. Given the spate of "Record Oil Price!" stories that have filled newspapers in recent months, investors might be inclined to dismiss the latest threshold crossed – if it weren't for the increasingly dire warnings being issued about the havoc that expensive oil may wreak on the global economy.


The latest came yesterday, courtesy of the head of the International Energy Agency, Nobuo Tanaka. The soaring price of oil, he warned, may be what tips the global economy into recession. "I have some concern" about an oil-induced recession, said Mr Tanaka, speaking at the International Energy Forum in Rome. The unprecedented territory into which the price has travelled is having a "negative impact on economic growth", he added.

The inexorable rise of the cost of the black stuff – it closed yesterday at $119.37 in New York – has become a source of growing concern for politicians and economists already worried about the slowing economies of Western Europe and America. In the past five years, it has nearly quintupled; in the past two months, it has surged by nearly a third.

Mr Tanaka's comments came on the heels of a speech in which he delivered a stark message to the world's assembled oil barons.

"The world's energy economy is on an unsustainable pathway. In the short-to-medium term, there is an urgent need for investment to restore an adequate cushion between oil supply and demand," he said. "As shown by the World Energy Outlook [report], unless government policies change, world energy demand will grow by 55 per cent by 2030."

With the credit crunch reverberating further into the real economy, the worry is that the oil price (along with the rocketing prices of other commodities) could push major economies into "stagflation" – no growth coupled with inflation.

Opec, the cartel of oil producing nations that pumps about a third of the world's oil, has tried to deflect calls from big consuming nations such as America and in Western Europe by saying the price run-up can be blamed on traders and speculators. This is partly true. The falling value of the dollar has led investors to look for a hedge against the falling greenback. Commodities in high demand and valued in dollars, have proved an enticing investment. It is this argument that Opec has relied on to keep production steady. Abdullah al-Badri, the cartel's secretary-general, confirmed this week that it has no intention of ramping up production. The most recent run of rising prices was in fact set off by Saudi Arabia cutting its production. It is now the only country that can realistically boost production, as the rest of Opec members are operating at capacity.

"What they are worried about is that demand is going to decline in the coming months and they don't want to flood the market and see the price go south," said Muhammad-Ali Zainy, a senior energy economist at the Centre for Global Energy Studies. According to its research, Saudi Arabia has no incentive to provide relief as the government needs the oil price to remain at at least $70 per barrel in order to meet its own budget requirements. Mr Zainy predicted that the oil price will average about $99 per barrel this year.

The major oil companies, meanwhile, are having to do everything in their power just to replace fields that are running dry, let alone make new discoveries to boost production. Royal Dutch Shell, Europe's biggest oil company, is ploughing $25bn (£12.5bn) into exploration and production annually but expects output to fall over the next several years. An oil-induced recession would of course lead to a relaxation of its price. Given the rising pressure it is putting on consumers, a slowdown could very well happen.

In the UK, for example, the top six energy suppliers all pushed through major increases – about 15 per cent – to gas and electricity prices this year due largely to the rising price of wholesale gas, which is linked to the price of oil. Since nPower kicked off the rate rises in January, wholesale gas prices have jumped by another 45 per cent, while electricity prices have leapt by a quarter.

[BachQ]

Food prices "massacre" of world's poor: Chavez
Wed Apr 23, 2008

CARACAS (Reuters) - Soaring food prices are a "massacre" of the world's poor and are creating a global nutritional crisis, Venezuelan President Hugo Chavez said on Tuesday, calling it a sign that capitalism is in decline.

His comments came only hours after the United Nations' World Food Program called more expensive food a "silent tsunami" that threatens to plunge more than 100 million people on every continent into hunger.
"It is a true massacre what is happening in the world," Chavez said in a televised speech, citing U.N. statistics about deaths caused by hunger and malnourishment.  "The problem is not the production of food ... it is the economic, social and political model of the world. The capitalist model is in crisis."

[BachQ]

April 22, 2008, 1:59 pm
Peak Oil? Saudis Squeeze the Stone Even Harder
Posted by Keith Johnson

As oil reserves get harder and more expensive to suck out of the ground, one big question looms: Is Saudi Arabia facing "practical peak oil" or the real thing?  Saudi Arabian officials made waves last week with an announcement that the kingdom would voluntarily limit future oil production, in order to leave oil wealth "for future generations." Last weekend, Saudi officials said that the world's biggest oil producer won't be diving into new exploration projects after next year, citing sluggish Western demand and the search for alternative fuels to petroleum.  So are the Saudis smartly shepherding their oil resources? Or are they obliquely acknowledging that getting them out of the ground will be increasingly difficult and expensive?

Neil King in the WSJ reports today (sub reqd.) on the challenges facing Saudi Aramco as it launches its last big project before taking an upstream hiatus: The tricky development of the big Khurais field, which could pump more than 1 million barrels of oil per day. The paper says:
Even in Saudi Arabia, home to more than a quarter of the world's known recoverable reserves, the age of cheap and easily pumped oil is over. To tap Khurais, Saudi Arabian Oil Co., known as Aramco, has embarked on the most complex earth- and water-moving project in its history. It is spending up to $15 billion on a vast network of pipes, oil-treatment facilities, deep horizontal wells and water-injection systems that it calls "one of the largest industrial projects being executed in the world today."
With crude oil approaching $120 despite sluggish demand growth in the U.S., the idea of "peak oil"—that the world's oil glass is already half-empty—is increasingly gaining currency. Other once-formidable oil producers like Russia, the U.K., and Mexico are all seeing production decline as fields age. While Aramco has been very good at squeezing the maximum amount of oil out of each reservoir, even the world's biggest oil producer is finding that it's no longer shooting fish in a barrel:
"Khurais and [offshore field] Manifa are the last two giants in Saudi Arabia," says Sadad al-Husseini, a former Aramco vice president for oil exploration. "Sure, we will discover dozens of other smaller fields, but after these, we are chasing after smaller and smaller fish."

Unlike previous mammoth fields, Khurais needs a push while it's still young—in the form of sea-water injection to get wells pumping. And that's tricky business: Aramco seismologists spent years poring over rock formations to build their gameplan.  It's costly, too: The paper reports that Saudi costs for adding new oil production have quadrupled in recent years, from $4,000 for each new barrel per day of capacity to about $16,000 for each additional barrel.  As Western leaders implore OPEC to boost production, and the OPEC producers with the most play coy, the question remains: How much play is really left in the global spigot?

[Florestan]

AFAIC, comrade Chavez can stuff his presidency up his a$$ and f...k off.

[BachQ]

Oil prices are not going to fall much, ever
By Nick Louth
April 22 2008

As the price of oil climbs to $117 a barrel and petrol at the pump reaches 110p a litre, motorists are wondering how long this latest spike is going to last. Is it just another of those temporary jumps in the cost of fuel that we saw in the 1970s and 1980s or is this a new reality which will last for good?
The answer is that it is likely to stay. While market prices may or may not continue shooting into the stratosphere over the next few months, they are certainly incapable of falling back down to the levels of $60-$70 a barrel seen even a year ago.

The reason is that oil supply is increasingly constrained by extraction costs while demand, fanned by the growth of huge emerging economies like China and India, is remorseless. The International Energy Agency forecasts that in 2008, the world will need an extra 1.3 million barrels a day (bpd), but only 800,000 extra bpd will be supplied.

The supply side

I'm not actually talking about oil running out. This isn't directly an argument in favour of the "Peak Oil" theory, the idea that we will in the next few years began an irrevocable fall in oil output.
Peak oil may be true, but is harder to prove. What is happening right now is more to do with the cost of accessing oil and bringing it to market, not whether it's available under the ground.
There are a number of trends working in parallel to constrain supply:
·   The easiest and cheapest to access oil fields are running out
·   New fields are still being discovered, but tend to be smaller and less accessible, and so more expensive than they fields they replace
·   There is a dramatic shortage of drilling rigs, pipeline suppliers, and skilled staff to meet the surge in exploration required. That has raised costs
·   There is a new assertiveness among oil producing nations which has crimped supply, limited the profits and thus discouraged investment in new fields by western oil firms

The easy oil is running out

According to China's academic energy economist Xiaojie Xu, the 14 largest oil fields in the world, which together account for a fifth of global output, are all showing declining production. These old fields, where the cost of producing each extra barrel of oil is just a few dollars, are having to be replaced by new fields more expensive fields.

The cost of developing new fields can be astronomical. A massive new field recently discovered in the South Atlantic off Brazil may contain 8 billion barrels of oil and gas. The bad news is that to reach it means getting rigs aimed at an ocean bed 7,000 feet down, then drilling a further 17,000 feet through sand, rock, and a massive salt layer. That's a total of 4.5 miles.

It's never been done before, and it will cost, big-time. Petrobras, the firm which discovered it, expects to spend $50-$100 billion over the next five years just to get at the oil. It just wouldn't be worthwhile if oil prices went back to the levels seen in 2005.

Political muscle emerges

Then there is politics, of a kind that frequently emerges when oil prices rise. Venezuela, for example, is sitting on billions of barrels of oil in heavy tar sands in its Orinoco fields, not so very far away from energy-hungry Texas. Yet oil majors are reluctant to invest given the uncertain climate surrounding the anti-US government of Hugo Chavez, which has nationalised a number of foreign operations. Instead they are turning to Canada, which also has tar sands, but of a trickier and heavier type. These will cost still more to process.

In Russia, the world's second largest oil producer, a different kind of politics is in operation. In the last two years both Shell and BP have been short-changed on what they considered were legally-binding terms for some of the biggest reserves in the country.

Russian turmoil spooks markets

Russia's own oil firms have been in turmoil too. In-fighting between the government and some of the billionaire oligarchs who controlled the domestic industry has combined with a big jump in taxes to make exploration in Russia a much less enthralling prospect than it was a decade ago.
Investment fund Prosperity Capital has calculated that even at prices of $110 a barrel, production companies in west Siberia, the main oil producing region, are only left with $10 after operating costs, taxes and export duties.

With such slim incentives it is no wonder that Russian oil output is now officially expected to peak this year and decline thereafter. This news last week shocked the market, which had expected further rises in output in coming years, and helped contribute to the recent price surge.

Is $90 now the floor?

In the past, oil producing nations in the OPEC cartel have responded to temporary shortfalls in the oil market by opening the taps to make up the difference. However, faced with what looks like a long-lasting deficit they have decided to be less accommodating. Meeting on Monday in Rome, OPEC blamed speculators for the tight market, while the Venezuelan oil minister Rafael Ramirez predicted that prices "would not fall below $90".

King Abdullah of Saudi Arabia summed up the new conservation attitude, one which perhaps Britain should have followed with North Sea oil, when he said "I keep no secret form you that when there are some new [oil] finds, I said: 'No, leave it in the ground, with grace from God our children need it.'"

Don't look to Iraq either

One of the great hopes was for recovery in production in Iraq, and the opening up of new exploration areas in the west and north of the country. Still, with output already back up to 2.3 million bpd, above the level which preceded the US-led invasion of 2003, the best gains already look in the bag.
So if supply cannot adjust enough, how about demand? Demand though is affected by both price and wealth effects.

The wealth effect

Increasing wealth means that for every British commuter who opts to go green and start using a bicycle instead of his car, 100 or more third world consumers are ditching their bicycles as soon as they can afford a car. In a decade's time, China's car demand is expected to overtake that of the US.

The idea of elasticity

The rising price of oil has made relatively little dent in this demand. The demand for oil is what economists call relatively inelastic in that it takes a big jump in prices to cut demand.
There are obvious reasons for this. Oil is the lifeblood of the global economy. Not only is it largely irreplaceable in transport, but chemicals, plastics, fertilisers, and textiles are made of it. Much of the price of food, heating, cooking and lighting depends upon it.
For decades we have taken cheap oil for granted and public transport has withered so much that many of us now simply have no alternative but to drive. The entire shape of cities, particularly in North America, is predicated on oil so cheap that no services or facilities, not even a newsagent or convenience store, need be within walking distance of the suburbs where most people live. A worst-case new reality wouldn't just mean junking the SUVs but tearing up the newer cities.
There is a positive slant to all this though. While governments dither over climate change and fail to set agreements to reverse carbon emissions, the market place is helping it do its job. Ever-higher fuel costs, especially if sustained over decades, will spur the technology to save fuel, make us choose smaller cars and greener homes, and curb our holiday flights.
For now, though, the price looks like going on up.

[BachQ]

Bush Says US Not in Recession; Dollar Slumps to New Low; Oil Hits New High
By Scott Stearns New Orleans22 April 2008



President Bush says the U.S. economy is not in recession, but there is no doubt it is slowing down with higher food and health care costs depressing retail sales and a growing number of Americans struggling to make their house payments.
Record-high oil and gasoline prices are only making things worse. Speaking to reporters at the close of a summit with the leaders of Canada and Mexico, President Bush again called on Congress to approve a controversial plan that would allow drilling for oil in an Alaskan wildlife refuge.
"No question rising gasoline prices are like a tax on our working people," he said. "What is happening is that we have had an energy policy that neglected hydrocarbons in the United States for a long period of time, and now we are paying the price."

[BachQ]

Dollar weakness spurs oil price rises


23/04/2008

Fears of a worldwide recession are growing as the relentless increase in the price of oil shows no sign of slowing.
Oil prices were within a whisker of $120 a barrel in New York yesterday, reaching a peak of $119.90 before closing at $119.37.  Worries about shortages have dominated the International Energy Forum in Rome where the International Monetary Fund has called on Opec producers to accelerate production plans and Nobuo Tanaka, head of the International Energy Agency warned that soaring oil prices cold push the world economy into recession.

[Florestan]

Will you ever stop, I wonder? 

[karlhenning]

I should think there is room in this world for both canola and olive oil, without chaos or famine.

[BachQ]

Delta reports $6.4B loss in first quarter

ATLANTA (AP) — Delta Air Lines, the nation's third-largest carrier, says its loss widened in the first quarter to a whopping $6.39 billion due to soaring fuel prices and the steep decline in the company's market value.
The results badly missed Wall Street expectations, despite a 12% increase in sales.
The Atlanta-based company said Wednesday the loss is equivalent to $16.15 a share. That compares with a loss of $130 million that Delta reported in the year-ago January-March quarter, when it was still in bankruptcy.
Excluding special items, primarily a $6.1 billion non-cash charge relating to the decline in Delta's market value due to sustained record fuel prices, the airline lost $274 million, or 69 cents a share, in the first quarter

[BachQ]

Oil prices push airlines to shrink, airfares to grow
By Dan Reed and Marilyn Adams, USA TODAY

Record oil prices that hit an all-time peak of $119.90 a barrel on Tuesday are pushing the USA's airlines into crisis mode.  From the biggest national network carriers to the smallest discounters, they're slamming already-slowed growth plans into reverse and talking loudly about raising fares — by a lot.
Delta CEO Richard Anderson told reporters at a Washington briefing Tuesday that oil prices have gotten so high that every fare in the industry needs to go up 15% to 20% just for the carriers to stay even.
Senior executives at United (UAUA), AirTran (AAI) and JetBlue (JBLU) on Tuesday announced large first-quarter losses because of high oil prices. They said their airlines will stop growing or, in United's case, speed the rate at which it is shrinking. All three warned that the cuts will go deeper if oil prices don't fall soon.
That trio joined American (AMR), Continental (CAL), Southwest (LUV) and Delta (DAL), which already had announced plans to shrink or to curtail their growth plans. Northwest has signaled that it, too, plans to cut capacity.
But in light of Tuesday's record oil prices, investors weren't appeased. The Amex Airline index fell 12.35%, and all but two carriers, JetBlue and Southwest, saw their shares lose more than 10% of their value. Shares of United and AirTran were hit especially hard, falling almost 37% and 21%, respectively.

[BachQ]

"The world is effectively in the throes of peak oil. Crude and refined product prices trend upwards while markets become increasingly sensitive to news and rumors.  Bad weather around ports, unrest in a third-world producer country or populist grandstanding by its leader with geopolitical flourishes, a pipeline accident, a closedown for repair, new worries about exchange rates – any of these would be sufficient for the financial media to report that 'crude futures jump on supply concerns.'"

[BachQ]

Soaring energy prices fuelling a domestic crisis across the UK

There may be panic at the petrol pumps, but the increasing price of oil means that gas and electricity bills have also seen inflation-busting rises – and there's worse to come as Gina Davidson discovers.
FOR a while it seemed that the customer had the best of all worlds. The monopolies of British Gas and the national electricity board were smashed, so if you didn't like how much you were forking out for your domestic fuel, then all you had to do was switch.

But now, thanks to the continuing rise in oil prices and the increasing reliance on importing gas, that option isn't quite what it seems any more.

The days of being able to save a bundle on your bills by moving from one utility company to another have gone. As energywatch's director of campaigns Adam Scorer says: "The sad truth is that millions of consumers are switching but their bills still rise. For millions more, switching to a cheaper tariff is either fraught with difficulty or just plain impossible.

"In a high price environment where the average bill exceeds £1000 a year, the least expensive deal on offer does not equal affordable energy. No-one can seriously think that switching, by itself, provides the answer for Britain's besieged energy consumers."

Besieged is the right word. In the last five years gas bills have soared by 108.7 per cent, while electricity prices have risen by 69 per cent. This year alone, gas and electricity prices have risen by 15 per cent.

As a result everyone is feeling the pinch – but those on low incomes and state pensions have been hardest hit. In fact, pensioners' winter fuel payments have been wiped out. A typical pensioner household aged 65 to 74, with gas central heating, has seen gas bills go up by £260 per year, and electricity by £160 per year, while the value of the winter fuel payment per household for those aged 60-79 is just £200, and £300 for those aged over 80.

Meanwhile, a study published this week shows that 6.8 million households are currently in debt to their supplier – with the average amount households owe standing at £114.

Other research, this time by Age Concern, the Child Poverty Action Group and National Energy Action, has shown the number of households in fuel poverty – that's those that have to spend more than ten per cent of their disposable income on power – has soared by 600,000 in recent months to 4.5 million.

This includes the vast majority of single pensioners and lone-parent families entitled to basic state benefits, who now face a choice between heating and eating. It also looks like things are likely to get worse.

Already wholesale gas and electricity prices have risen by a third since the start of February and the problem is made worse by rocketing oil prices, which hit a record £59 a barrel this week.

Unless wholesale prices fall substantially, bills will start rising again by August or September – possibly by as much as 25 per cent for gas, while electricity could go up another ten per cent.

Such a hike would add around £180 to a standard average bill, pushing it towards £1200 a year. Unsurprisingly energywatch has already warned the Government that such a huge increase will "consign another million households to fuel poverty".

The Government has been trying to do something. Along with the big six power companies it announced a £225 million scheme to lift 100,000 households out of fuel poverty over the next three years, involving low tariffs or funding home insulation. But according to Mr Scorer, more needs to be done.

"To give real help to the fuel poor and vulnerable consumers, the Government must mandate suppliers to produce a social tariff for their neediest consumers – one which will be the lowest tariff available and not be available only online.

"Also, energy companies raise more than £320m from prepayment users, around a million of whom are fuel poor. On average a prepayment customer pays £215 more than a direct debit online user and one million fuel poor homes have prepayment meters – this needs to end.

"Furthermore, the Government needs to invest £320m to help cold weather payment groups get the winter fuel payment."

Mark Todd, of energyhelpline.com also believes winter fuel payments should be extended to help cover bills. "There is no doubt that there is an energy crisis looming. The winter fuel allowance that is paid to the elderly should be extended to the poor, because it should be as much about stopping poor kids freezing in their homes as old people."

What the Government can't control though is the fact that North Sea reserves are dwindling. As a result, by 2010, the UK will be importing at least half its gas from countries such as Norway and Russia – which could see the country literally being held to ransom to get the energy it requires.

Sam Laidlaw, chief executive of Centrica, believes the gas that's imported could cost even more. "Seven years from now, we'll be importing at least 75 per cent of the gas we need. To get this gas we have to compete on price terms with European energy suppliers who are buying under contracts directly linked to the price of oil – which has risen by 80 per cent since early 2007. The wholesale gas price has risen sharply in response. The time-lag of pricing mechanisms in Europe means it may be higher in the winter," he says.

"Price volatility is also intense. Current prices for summer 2008 are at unprecedented levels, more than 45 per cent higher than this time last year – and yet despite this, gas has not been flowing into the UK when high prices should have attracted it in."

Indeed, Norwegian gas suppliers have already stated that Britain is a secondary priority for its gas exports compared with mainland Europe – no matter the price the power companies pay.

Anyone got any candles?

[BachQ]

POLL: Confidence Suffers as Gas Prices Soar
Gasoline Prices, Struggling Economy Pushed Confidence Below Symbolic Barrier
Analysis by Madeleine Perez
April 22, 2008 —
Soaring gasoline prices and a struggling economy have pushed consumer confidence below a symbolic barrier, with the ABC News Consumer Comfort Index down to -40 this week on its scale of +100 to -100. It hasn't been this low since July 1993.
Two of the index's three components are grim: Eighty-five percent of Americans say the economy's in bad shape and more than three-quarters, 77 percent, call it a bad time to spend money. Ratings of personal finances, as usual, are better, but not good enough to lift confidence overall.
The CCI has reached -40 or lower only 83 times previously in 1,164 weeks of ongoing polling, all from 1990 to 1993, during the 1990-91 recession and its aftermath. Its record low, -50, was in early 1992. It's dropped from -20 to -40 this year alone, far below its long-term average, -10 in weekly polls since December 1985.
Confidence is buckling under the weight of housing and credit crises and rising retail gas prices: $3.51 a gallon this week, up 12 cents from last, to the highest price on record.
INDEX   Only 15 percent of Americans rate the national economy positively, the fewest since October 1993 and 25 points below the long-term average. Just 23 percent rate the buying climate positively, its lowest since July 1992   down 8 points this year and 15 points off the long-term average, 38 percent.
Personal finances are traditionally the strongest of the three measures: Fifty-two percent rate theirs positively, 5 points below the long-term average.
TREND   The CCI fell in each quarter of 2007, starting the year at -5 and ending at -20. This year that trend has accelerated; the first quarter was the index's worst since 1993. It fell by 14 points in three weeks from Jan. 20 to Feb. 11, gained a little back, then headed down again. It's now far closer to its record low than its all-time high, +38 in January 2000.
GROUPS   The CCI as usual is higher in better-off groups, though the index is negative across the board. It's -6 among higher-income Americans while -74 among the least well-off, -30 among college-educated adults while -53 among high-school dropouts, -39 among whites but -55 among blacks and -33 among men while -46 among women.
Partisan differences remain: The index is -13 among Republicans, but -40 among independents and -53 among Democrats.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY   Fifteen percent of Americans rate the economy as excellent or good, the same as last week. The highest was 80 percent Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES   Fifty-two percent say their own finances are excellent or good; it was 53 percent last week. The best was 70 percent, last reached in January 2000. The worst was 42 percent on March 14, 1993.
BUYING CLIMATE   Twenty-three percent say it's an excellent or good time to buy things; it was 24 percent last week. The best was 57 percent Jan. 16, 2000; the worst, 20 percent in fall 1990.
METHODOLOGY   Interviews for the ABC News Consumer Comfort Index are reported in a four-week rolling average. This week's results are based on telephone interviews among a random national sample of 1,000 adults in the four weeks ending April 20, 2008. The results have a three-point error margin. Field work by ICR-International Communications Research of Media, Pa.
The index is derived by subtracting the negative response to each index question from the positive response to that question. The three resulting numbers are added and divided by three. The index can range from +100 (everyone positive on all three measures) to -100 (all negative on all three measures). The survey began in December 1985.

[BachQ]

"Additional factors influencing oil prices include more evidence of the high cost of new oil production, the recognition that the growing economies of oil producing countries limit the oil they have left over for exporting after domestic use, and finally the growing understanding of peak oil in the popular press. All of these long term oil shortage indications seem to have brought the peak oil concept into respectability among oil traders and would thus seem to be enough to push up the oil price even without a boost from the IEA, which suggested that oil supplies are growing tighter in the short run."