A report from energy consultant Inenco which is slated to be released this week has been generating headlines over the weekend. It is forecasting an energy crunch in the UK that could hit the Olympic Games and turn into a national embarrassment.

Inenco's deputy managing director Michael Abbot said:

"We believe that demand overtakes supply somewhere between 2012 and 2015, creating a serious 'generation gap'."

It warned that, by 2012, the last of the ageing fleet of Magnox nuclear reactors will have closed and a number of older coal-fired stations may also have closed.

Now, these calculations look like a worst-case scenario situation… blackouts like they are currently experiencing in Southern Africa or like the ones they are likely to be experiencing in California are unlikely. However, the report does highlight the energy problems we are facing by generating headlines in the national press for all to see.

The problem with coal has come from the overpaid, interfering meddlers in the EU. The Eurocraps will only allow coal-fired stations to operate for 20,000 hours between 2008 and 2015 – after which they must be decommissioned.

However, because of recent rises in natural gas prices, companies have been running coal plants for longer periods than expected. Therefore, the Eurocraps limit is now expected to be reached sooner than expected. This would mean the power stations are closed down sooner than expected.

The nuclear plans unveiled by Gordon Brown earlier this month will not be ready in time… and the “greens” may try and delay them further.

We should be concerned

The report has been dismissed by some analysts, who say that the UK could build gas-fired power stations relatively quickly, so we should not be concerned.

However, we should be…

The energy policy makers at the Kremlin must be rubbing their hands with glee and jumping up and down singing: “We’ve got all the gas.”

Energy security is one of the key challenges facing this nation and the more we listen to the green and the Eurocraps the more likely we are to be beholden to the Russians for our future energy needs. Great…

Let me remind you of what went on in the Ukraine… A dispute started with state-controlled gas giant Gazprom in 2005 over pricing escalated so that Russia cut off all the gas to Ukraine at the start of January 2006. The gas was only off, but not having energy supplies in winter in Ukraine must not be pleasant – even for a day or two.

On 2 October last year, Gazprom once again threatened to cut off gas supplies to Ukraine; because of an outstanding bill.

On this occasion it didn’t. However, it demonstrates the type of power the Russians can wield – a power that is only going to increase as the energy crunch bites. If you are in that sort of position, you can get away with almost anything, as was recently demonstrated when the spineless coward Blair stopped an investigation into allegations of bribes paid to Prince Bandar of Saudi Arabia by BAe.

It appears the Saudis can do anything because they have oil. In the future, the Russians will be able to behave in anyway they please and get away with it… unless we do something about it now… P.S. If you enjoyed this article then sign up for Smart Commodities UK. It’s dedicated to searching out the investment trends that could provide our biggest profit opportunities for the next decade…

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