Over a Barrel?

Who is in control - supply or demand?

BBC Radio 4's Analysis: Over a Barrel?, was broadcast on Thursday, 3 August, 2006 at 20:30 BST.

CPS:LINK HREF="http://news.bbc.co.uk/nol/shared/spl/hi/programmes/analysis/transcripts/03_08_06.txt" STYLE="rightarrow">Read the programme transcript

Time was when Britain seemed peculiarly fortunate in the Western world when it came to energy.

North Sea oil and gas were flowing bountifully to our shores not just keeping the economy moving but also leaving the Treasury flush with cash, even though oil and gas prices fell substantially after 1979. But when the reserves of fuel started to run out, so did the luck.

Now, with world energy prices, conversely, high and still rising, and global demand - especially from fast-growing China and India, as well as the West - showing no sign of abating, it is a good time to be holding reserves of oil and gas - as the Russians, North and West African states and Iran (among others) happily attest.

And it is correspondingly much less comfortable to be dependent - as most European countries are - on energy from countries which have not only been adversaries rather than allies, but have also shown themselves to be unreliable as suppliers - Ukraine's experience with Moscow's gas last winter stands out.

In this week's edition of Analysis, Quentin Peel considers the tightrope consumers and producers are walking in today's much more nuanced production and consumption of energy.

Regardless of what decisions are taken on renewable sources of fuel and civil nuclear power, how are Britain and the rest of the EU going to safeguard their energy position?

Is everything really all right because the producers have to sell their fuels to make money and the richer countries will always be able to pay more than the poorer? Or does a seller's market in fuel - and the state-owned companies control, not that of the multinationals over finite production - mean that regimes from Africa to Asia to Moscow have got us over a barrel of oil and a gas pipeline?

Presenter: Quentin Peel
Producer: Simon Coates
Editor: Nicola Merck