Catlin's Indian portraits

Catlin's painting of Little Wolf

The National Portrait Gallery's exhibition of George Catlin's American Indian Portraits has come to Birmingham Museum (until 13th October). Well worth a visit, for the social history and the powerful personalities Catlin painted.

The NPG has published a hardback catalogue (£25, but currently available for as little as c. £15 + P&P via Amazon).

How will shale gas impact the UK market?

See The Energy Page for Nick Drew's analysis of how even small amounts of shale gas could make the UK energy market cheaper.

Shale and the Price of Gas

When push comes to shove, people really don't understand markets very well. Perusing the increasingly lively meeja coverage of putative shale gas in the UK, we find people who say shale discoveries will bring down the price of gas, and seemingly even more who say it won't - including, remarkably enough, the shale gas lobby itself. Wishing, I suppose, to be cautious in their claims, some of them say the effect will be minimal.

At a meeting for concerned residents at a potential fracking site in West Sussex, a Cuadrilla representative was asked to comment on whether shale gas could drive down customers' energy bills. “We've done an analysis and it's a very small…at the most it's a very small percentage…basically insignificant,” said Mark Linder, a public relations executive at Bell Pottinger who is also responsible for Cuadrilla's corporate development. (Inde) 

Some PR he is, eh? At least he didn't say prices would go up, though we may be sure that in due course someone will - the whole renewables policy is a massive bet on this. The argument seems to be that under EU trading laws we'll be 'forced' to sell it to the wretched continentals, (read: they'll offer to buy it, and if the price is right we'll sell it !), thus neutralising any tendency to lower UK prices. (Even Peter Lilley seems to be willing to concede this.)

Let's put some perspective on this.

• in 1994 a relatively small gas surplus in the UK brought down the price of (wholesale) gas by 60% in 8 months - and it stayed down for 5 years 

• it went up again when in 1999 the UK became connected for the first time to the gas networks of the continent, where gas prices were higher - set by oil-indexed gas contracts. The quantities of gas being exported from the UK that effected this price-shifting arbitrage were relatively small (indeed, on a net year-round basis, extremely small, as UK gas was exported in summer, but there were imports from the continent in winter) 

• European gas importers still paying oil-indexed prices (to Gazprom, Sonatrach et al) have been seriously hurt as spot prices have once more fallen, based on another relatively small surplus stemming from the 2009 industrial downturn. (In consequence they have forced Gazprom to reduce their prices.) 

• US gas prices have been absolutely trashed by substantial amounts of shale gas, and have stayed low despite warnings for several years that this can't go on. Of course, as yet they are only able to export very small amounts of the net North American surplus (the US is still a net importer, from Canada). 

So: gas prices like other prices, as any fule kno, are frequently set by marginal effects, and move in the predictable direction. Surplus => down, just to be clear ... If there is any economically recoverable shale gas lurking there, its directional impact on price is not in doubt. If and when it is produced in fair amounts (say, equivalent to 10-20% of UK demand - a lot less than some predict will flow) it will have the potential to impact on spot-gas prices not only in the UK but in Europe as a whole.

The absolute effect of this will hinge entirely on the detailed supply-demand dynamics of the time. This being a good few years into the future, we have no idea whatever what those will be. OK ?

PS: The Horizon programme on shale 'n fracking was fairly balanced and well done. It's on again this evening, and here.  


This post first appeared on the Capitalists@Work blog


All original material is copyright of its author. Fair use permitted. Contact via comment. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

New energy sources just kick the can

"Fire ice" is a term to intoxicate the word-lover. The substance is methane hydrate (or clathrate, meaning "caged"): a crystalline structure of water contains the gas molecules deep under the sea, and it's thought there may be a lot of it.

In this week's Spectator "Energy Special" section, Charles Mann spins a candy-floss speculation about its implications "for oil sheiks - and for greens", before admitting that the Japanese exploration may come to nothing, or prove very expensive. For it's one thing to identify an energy source, and another to exploit it in a cost-effective way.

Similarly, Martin Vander Weyer reflects on the dubious prospects for UK shale fracking: maybe 10-15 years of another cheap energy bonanza, maybe nothing.

Of the three articles in that section, Matthew Sinclair's is the most penetrating, because he sees that the more money spent on getting energy, the less there is for the rest of the economy.

Setting aside ecologists' concerns about the climatic effects of the large-scale burning of fossil fuels of any kind - and I think they're legitimate - there is A K Haart's question posed on The Energy Page last month: will we use the opportunity wisely? Otherwise, as he says, quoting Michael Edwardes from 1980, we'd be better off leaving the stuff in the ground.

Britain's Industrial Revolution began in the eighteenth century with coal and water (and the construction of canals and railways); then there was Easy Oil, taking off in the second half of the nineteenth century, and the opening of world markets to the products of Western technology. After that, we came to Harder-to-Get Oil and a globalised economy that has undercut Western labour for thirty years, plus an increasingly detached Western uberclass that blithely imported dividend-sustaining cheap labour and painted its critics as racists. Now we have increasing structural unemployment and pseudo-Green global energy policies that transfer industrial productive capacity to the East, where fossil fuels are ruthlessly exploited to stay ahead of political-economic disaster, like a fox running through the fields with its tail on fire.

It's demand we must manage, not supply. After all the energy efficiencies we can introduce, we shall have to expect less materially per capita - though that is not the same as diminished happiness.

If we run to the agenda of the amoral elite, the solution will be in various appalling forms of population reduction; the alternative is a kind of revolution - peaceful, of course, as those in power have more information and destructive capability than ever.

In the end, all these practical issues will resolve themselves into philosophical, moral and spiritual questions about the Good Life.

All original material is copyright of its author. Fair use permitted. Contact via comment. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

A parade of Polish dragons

See World Voices for the Dragons of Krakow.

Poland: Dragons in Krakow

The day we were due to leave, the sun came out and shone on the thirteenth annual Malopolska Dragons' Parade. Organised by Teatr Groteska, dozens of monsters proceeded from the Wawel fortress down to the packed Rynek Square.

(Photographed by author, 2 June 2013)

This picture combines several local elements. First, there is the traditional dress, indicating the strong ties of language and culture that have  kept the Poles together, despite the fact that since 1795, the country has only been united and independent for a total of 45 years. After the interlude of 1918-1939 came fifty years of totalitarianism in two varieties, so for many of the onlookers the habit of celebration is still fresh. The Central Square has a plaque to commemorate the suicide there of Walenty (Valentine) Badylak, who set himself on fire to protest the suppression of the truth of the Soviet massacre of the Polish elite at Katyn. We were fortunate to have seen the Corpus Christi procession ("never seen so many nuns in one place," said my wife) the Thursday before this parade, and the green-clad Army formed part of the march past - neat and steely serious.

Next is the character seen here riding a dragon. His name is Lajkonik and he has appeared a little early, since he has his own festival a week after Corpus Christi ("konik" is Polish for "horse", though Google translates the whole word as "festivities").  Krakow was attacked by the Mongols in 1241 and it's said that a citizen who had killed a Tatar came back into the city mounted on a horse and clad in his foe's robes. The invaders won, but had to break off their conquest of Poland and return home because the Grand Khan had died, forcing the election of another. They came back twice more before the end of that century, and to this day a warning clarion is blown hourly from the tower of St Mary's Church in the square; the call ends abruptly because the guard was killed mid-note by a Mongol arrow. The current trumpeter is the third generation of his family to perform the ritual, a tradition dating back as least as far as the fourteenth century.

Last is the dragon himself. Legend has it that he dwelt below the Wawel rock on which the castle now stands (commanding a bend in the Vistula). Smok ate girls as his tribute until fooled into swallowing a sulphur-stuffed lamb, which made him so thirsty that he drank from the river until he burst. A forty-year-old, seven-headed sculpture of him stands by the castle, emitting flames every few minutes to the delight of passing children (and now he even belches in response to SMS messages). A huge T-Rex-like carnivorous dinosaur, the remains of which were found 100 miles away near Lublin, has been named Smok Wawelski in his honour.

Whether dragons ever really existed is a question for another article, though my answer to that isn't no. Meanwhile, here are some more images from this year's crop of Smoks:

 

All original material is copyright of its author. Fair use permitted. Contact via comment. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy.

Nick Drew on energy market distortions

See The Energy Page for Nick's piece on why helping little energy companies compete isn't doing them or us any favours.