Whenever people ask me about the possibility of us running out of fossil fuels, I usually reply that I’m no expert on oil reservoirs but that there are markets out there that are, and if we were going to run out the price should have been rising rapidly. That probably still true, despite oil prices staying high – according to the FT they have managed to fall to $63.55 a barrel (Brent crude).
More interesting for the UK is the story of our gas prices. Just recently there was a four-fold spike in gas prices (although the spike itself is not much bigger than the brief spike in mid-november); due to a combination of various things: a cold winter, us building an extension, a fire on an important storage platform, and odd problems in importing more from Europe (prices here are significantly higher than there; there is a nice big pipeline under the sea; but the markets are so murky and opaque its near-impossible to find out exactly why they are selling the stuff on the continent instead of making twice the money flogging it to us). This lead to a warning of possible supply interruptions for business customers – apparently large businesses get a somewhat lower gas price, in exchange for a clause in the contract that they are first in line for cuts should they be needed to keep domestic supplies (and therefore votes…) flowing.
All this is down to us running out of North Sea Gas. According to a nice graph in the Grauniad print edition (sadly not in the online one) we are going from supplying 90% of our needs from the North Sea in 2004/5 to about 10% predicted in 2012/13, although that also factors in a near doubling of use by then (actually the graph is a bit confusing so I’d better not over-interpret it). This also includes an increasing percentage of power coming from gas power stations; at some point it might seem a bit silly to be burning large quantities of the stuff for power then having to import it from Russia.