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Posts Tagged ‘Electricity’

Lim Tean talks cocks on electricity price rise

In Energy, Infrastructure on 10/01/2020 at 11:17 am

The chief cock of the People’s Voice Party, Mr Lim Tean via his FB post, criticised the recent increase in electricity tariffs by 3.5% despite natural gas prices collapsing. Mr Lim concluded his post by saying that “Singaporeans have every right to demand explanations from the SP group, Temasek, EMA and Mr ‘New Taxes’ Heng!”

He obviously doesn’t have a clue about anything, given that as far back as 2012, I explained the situation. Below is a piece that I’ve had to update because when it was first written, the LNG gas terminal had yet to open.

Unlike the oil market*, the natural gas market, is not a global, nor an efficient one (outside of the US). (I’ll explain this in detail later using S’pore and Qatar as examples).There is only a limited global trade in gas (the S’pore government is trying to encourage such trade building a gas terminal that is now operational), which can be transported in tankers, but mostly gas must move in pipelines over land in Europe and North America, the biggest users of energy. Example: natural gas prices have been rising in Britain this year even as they have been falling in the US.

Supply has soared in the US because of increased production from hydraulic fracturing, but demand in the US cannot change rapidly. Power plants that can burn gas or oil were shifted to gas long ago.

S’pore, as readers, should know gets its supply of gas from gas fields in Indonesia and Malaysia. The energy MNCs who developed these kind of fields did not develop these fields until they were assured that there were assured long-term buyers of the gas (This is still true today). There are a lot of upfront costs and the lead period from the time the fields are being developed to the first shipment of gas to the customer are measured in decades. Example: gas was discovered in Qatar in large quantities in the 1980s. It became a major exporter only in the early to mid-noughties. It took that long to build the facilities to ship the gas to places like Japan and South Korea, taking into account the time to negotiate the contracts.

Then there is the issue of pricing. Until very recently, natural gas contracts were priced off the price of oil because they were often found together, and both were scarce.

When the gas contracts for S’pore were negotiated all those many years, the price of the gas that S’pore pays was priced off the price of oil. Hence one reason of the paradox of us paying higher prices for gas when the price of gas is at a 10-year low. Another reason is that S’pore is locked into long-term contracts.

Now S’poreans are not the only people who got “screwed” by the breakdown between the price of gas and oil. KKR and TPG, giant and successful US private equity investors invested billions of their investors’ funds in TXU. One of the things they were betting on was that gas prices would be priced-off oil prices for the foreeable future. Err even Buffett has lost money buying TXU bonds.

But what about the gas terminal which now accounts for 38% of imported gas, shouldn’t this mean that its gas is cheaper?

Sadly

In Asia, purchased gas imports are typically pegged to oil price changes by pre-determined formulas due to the lack of an established pricing benchmark for gas trade. This nexus between oil and gas prices could weaken though, as more gas is being traded with greater flexibility in the future.

Constructive, nation-building media

And Lim Tean wants to be PM? But then as I wrote

Look at Lim Tean’s record. Still no jobs rally after collecting money in 2017 for rally, and no picture, no sound after collecting money to sue CPF yrs ago: Finally Lim Tean called to account on a “broken promise”. To be fair, he did deliver on defamation video two years late. But it was BS.).

Can he be trusted to do anything but grab the money?

Is there really a better alternative to PAP 4G?

But then

[M]aybe he’s not a money face but has dementia making him forget that he took money from the public.

Lim Tean: talk cock king / Does he have dementia?

 

Achtung cybernuts: Facts about global LNG prices & our gas supplies

In Energy, Infrastructure on 03/07/2018 at 10:56 am

Phillip Ang (Cybernuts go to financial expert who raised money for CPF lawsuit CPF class action: Phillip Ang’s “reply’ to fellow cybernut then no picture, no sound*: like his buddy Lim Tean: A disgraceful chamber of horrors?,)TRELand and TOCLand and allied cyberspace and social media allies are shouting that since S’pore uses natural gas to generate electricity and LNG prices are weak, there’s no need for electricity prices to rise when oil prices rises as per the automatic formula.

What they don’t know or not telling us, if they, do is that most of our natural gas supply is not in form of LNG but in the form of gas from nearby Indon and M’sian fields that come here via pipes (like water). This gas is priced off the oil price because the fields would not have been developed otherwise all those years ago. Why don’t the cybernuts blame PAP for not having foresight to wait for LNG?

In those days, only after long-term contracts priced off oil from users were signed, were fields developed. These contracts are still in place. Why don’t the cybernuts blame PAP for not negotiating shorter contracts or ensuring that the price of gas be priced in a different way?

Until very recently, major gas fields were not developed until long-term contracts priced off oil were in place. This is changing surely but slowly. Whatever, a lot of global LNG are still priced off the price of oil because the contracts were signed a long time ago. Surely but slowly, there’ll come a day when the spot price for LNG sets the price for deals, but don’t hold yr breath.

With enemies like the cybernuts who peddle rubbish analysis eg on water and electricity, the PAP doesn’t need friends.

===================================

*Will Lim Tean & Phillip Ang help out fellow cybernut?

They didn’t

If Minimum Sum increase was “moderated”, why not electricity prices?

In Political governance on 04/07/2012 at 5:08 am
Last Saturday, it was reported that electricity tariffs will decrease by an average 2.5%  for the next three months, beginning July 1: the price of fuel has gone down. Sounds good to me who doesn’t have a wage increase that compensates for the rise in inflation.
 
But the government’s response to a question on the cost-of-inflation increase in the CPF’s Minimum Sum has me wondering if its formulae for various “automatic’ price adjustments of services etc are not that “automatic”.
 
But shume background first. Uncle Leong (TOC used to carry his articles*, but now they only appear on his website) often asked pointed questions about the way electricity tariffs were calculated. The non-answer response of the authorities was to say “it’s the formulae”, and imply that it was a mechanical process: there were no attempts to tweak or adjust the formulae without first letting us know.
 
But we now know that the increase in the Minimum CPF Sum was “adjusted”: the formula used was tweaked (see letter below to ST’s Forum from the Manpower ministry). And worse: if a member of the public had not grumbled publicly about the inflation rate used to calculate it, the tweaking would not be publicbecause I don’t recall reading about the “moderated’ change when the new Minimum Sum was announced.
 
Now this “moderation’ raises the following issues:
 
— What other formulae have been manipulated without our knowledge?
— Will we never be told unless we ask? And if so why the secrecy?
— Waz the point of using formulae when they can be adjusted in secret? To con us?
— If the Minimum Sum amount was “moderated”, why wasn’t the electricity tariffs “moderated’ given that world gas prices have collapsed, while S’pore continues to pay above market prices because of long-term contractual obligations, among other reasons?
 
—————
 
CPF MINIMUM SUM

Increase doesn’t fully reflect total inflation

MR YOUNG Pak Nang inquired about the use of the headline consumer price index inflation rate to adjust the Central Provident Fund Minimum Sum (‘CPF Minimum Sum should reflect ‘true’ inflation’; last Friday).

As he noted, increases in imputed housing rentals on owner-occupied homes and certificate of entitlement prices for private cars contributed to higher-than-normal headline consumer price index inflation last year.

For the majority of retirees, these are not items that would lead to increased cash expenditures.

The Minimum Sum is aimed at providing for CPF members’ basic retirement needs.

The original target, adopted in 2003, was for the Minimum Sum to increase in real terms to $120,000 (in 2003 dollars) by 2013.

Further, besides this real increase, the Minimum Sum has to keep pace with long-term inflation trends.

The Minimum Sum has therefore been increased each year to meet the required real increase and to take into account inflation.

However, this year’s Minimum Sum increase was moderated, and hence did not fully reflect the consumer price index inflation that occurred over the last year.

This year’s increase in Minimum Sum, by $8,000, was one-third less than it would have been if we had followed the usual formula for Minimum Sum adjustments. With the moderated increase, we have stretched out the 2013 target to 2015.

Some of the factors that have led to higher consumer price index inflation in the last year are cyclical, and likely to even out over the long term.

For example, imputed housing rentals on owner-occupied homes have significant short-term impact on the consumer price index, but tend to even out over time.

Over the 15-year period from 1996 to last year, which like most such periods saw the property market fluctuating in both directions, headline consumer price index inflation averaged 1.6 per cent.

This is comparable to the average inflation of 1.5 per cent over the same period if imputed rentals on owner-occupied homes were excluded.

We thank Mr Young for his useful query.

Farah Abdul Rahim (Ms)

Director, Corporate Communications

Ministry of Manpower

*Update after posting: Juz found out via S’pore Surf that TOC carried an article from Uncle Leong dated 2 July. Funny not among the Main Stories.