In a footnote to the government's energy prices report the other day, was a link to something rather important: the fossil fuel price assumptions that the government uses. These were published back in September, but it's fair to say they are a long way out of date already.
- The 2014 prices for oil were given as (low, medium, high) $: 90.0 105.0 120.0 while the current price for oil is actually $80 (Brent crude).
- The 2014 prices for gas in pence per therm were: 47.5 55.8 64. Although not quite so bad as oil, these are not looking particularly clever against the current price of 51 pence per therm.
In terms of the future, the view seems to be that there will be a slow but steady increase in fossil fuel prices. This doesn't seem daft compared to, say, the NYMEX gas futures market, but it's certainly interesting to compare the current prices to earlier goverment predictions. Here are the 2012 graphs, to which I have added the current figures:
Having seen just how bad the predictions have been it's interesting to wonder who was behind them and how it was they appear to have missed the advent of the shale gas revolution, which is getting on for ten years old now.
It's also worth considering how fossil fuel prices so much lower than expected has affected the equation regarding how much money all those renewables are allegedly saving us.