What's in a sweater, or two?
Updated on 17 July 2008
Faisal Islam explains what the gas price rise could mean.
Jake Ulrich is the carbon king. He is what you might call the hydrocarbon version of the Man from Del Monte. His problem: there aren't too many of the world's suppliers of gas and oil that want to say 'yes'.
His job is to part diplomat, part businessman. Ulrich has seen at least two oil-rich presidents in the past week. But it was the US president during the 1970s oil crisis he invoked during an interview with Channel 4 News.
"I do think we will see people change their behaviour, I think people will use less energy and I hate to go back to the Jimmy Carter days in the US, but maybe it's two jumpers instead of one. I think people will change the temperature they keep the house, they'll be more cognoscente of energy waste, they'll buy better appliances," he told me.
In 1977, President Carter famously told Americans to don sweaters and turn their thermostats down (and sported a cardigan sweater himself) to save energy during the oil crisis.
Now Britain is being told the same thing by one of the two leading executives of our biggest energy supply company. Clearly, we are at least partly being buttered up for price hikes. But the rationale is interesting.
Remember the hoo-haa about the Norwegian pipeline which opened last year? Well there's hardly any gas coming through it. What about the great future of tankers brim full of Liquid Natural Gas (LNG)? Well our main terminal at the Isle of Grain has been visited just 74 times in the three years since it opened.
I spoke to Ulrich after getting hold of a Centrica-commissioned report suggesting that domestic gas prices could surge by 70 per cent, and then remain there, if oil prices don't drop.
Prices are about to go up in the coming weeks, probably by more than 30 per cent. Prices will continue to go up, and the message seems to be: 'Don't expect them to come down this time'. Listen up and take notice. Our biggest energy supplier is planning for an era of behavioural change, demand destruction, and two jumpers.
