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[Doctor Gollum]

OK then, what's your take on it?

[STEMO]

OK then, what's your take on it?

I don't have the in-depth understanding to write a lengthy post on the subject. Neither, I would suggest, do you.

[Doctor Gollum]

I simply posted my take on the answer to Albs' question as I see it.

You don't have to agree with it, and if you have a different take on it that's great. Feel free to share it or not. 

[LC0112G]

We need to use UK oil and gas ,not buy it in 
it's not green to import when we are still burning oil and gas
we may as well use our own .

But it's not 'our own'. It's Shell's, or BP's or ExonMobile's, or whoever extract's it from the ground/sea bed. Once extracted, those companies sell it on the world market at whatever the prevailing world market price is. If you attempted to tell them they could only sell it to the UK market, at below world prices, they'd tell you to eff-orf. And anyway, there isn't enough oil/gas in the North sea to materially affect world oil prices.

The only way the UK could insulate itself from this would be to setup (or nationalise) a state oil/gas company, which being government controlled would 'sell' to the UK market at  price below the market rate. That's proper communist thinking that I doubt even a Corbyn lead Labour party could support.

That being the case, why then do consumers in the USA pay much lower prices than we do ?

Two basic reasons - economy of scale, and taxes.

According to wiki (https://en.wikipedia.org/wiki/File:Gasoline_Diesel_Taxes.webp) US Federal tax is 18.4 c/gal, and state taxes can bump this up to anything up to 86c/gal. The state most people visit (California) its a total of 85c/gal, and some states also have an additional sales tax. If crossing from Nevada(50c/gal) or Arizona(19c/gal) into CA you soon learn to fill up before crossing the border.

Fuel prices in California are approaching $6 a gallon, so the 'tax' content (86c/gal) is roughly 15%. Therefore the pre-tax cost of a gallon of fuel is $5.14 ish

In the UK, fuel duty is 57.95p/gal, and 'sales tax' (VAT) is 20% on top. Total pump price here is about £6.20/US gallon. Of that 57.95p is duty, and £1.03 is VAT, so the underlying pre-tax cost is £4.59 per US gallon. With an exchange rate of roughly 1.32, £4.59 is roughly $6.07.

Given that we in the UK seem to pay a 1:1 exchange rate for most US$ priced stuff, I'm actually quite surprised we pay as little as we do for petrol.

The US does have what they call a strategic oil reserve, and the federal govt can release this onto the domestic market to try and smooth out tempoary fuel price spikes (they call it price gouging). The UK govt doesn't have any significant reserves.

[LC0112G]

OK then, what's your take on it?

I don't have the in-depth understanding to write a lengthy post on the subject. Neither, I would suggest, do you.

The Govt don't 'dig up' oil or gas. What they do is sell exploration licences to big companies like BP, Shell, Exxon etc. There are conditions on the sale of these licenses, but they don't normally include anything like "you can only sell the oil/gas back to us".

So STEMO (oil exploration) PLC could bid for a license, and if you won the bidding war, you could buy an oil platform, park it in the north sea, employ a few hundred workers, and start drilling. Any oil that comes out of the hole you drill is 'yours' to sell to the highest bidder. If no oil comes out then you've wasted billions on licences and costs.

If the govt then decided to retrospectivley modify your licence to say that you can only sell it to them, and at a price below market value, how would STEMO (oil exploration) PLC react? You can't say no - the govt has more guns and bombs than you so can enforce their will. But you'd probably think twice before buying any more exploration licenses - and you'd invest any exploration monies in countries that you trusted wouldn't do the same to you again.

And suppose the area where the oil is were in a region with a vocal minority that wanted independence from the current nation.

[Migv6 le Frog Fan]

That explains vehicle fuel, so what about energy prices ?

[LC0112G]

That explains vehicle fuel, so what about energy prices ?

A significant amount of our energy is generated by burning fossil fuels - because they were so much cheaper than the alternatives (Nuclear, Solar, Wind, Tidal etc). We've drifted away from oil and coal because of pollution, and gas is easier to burn cleanly. You don't 'dig up' electricity - you generate it and gas is a common easy way of generating it.

Therefore, regardless of whether your home is heated by electricity or gas, chances are a large proportion of it actuallly originates from gas. Problem is, we've become reliant on gas from dubious sources, mostly because it's cheap.

Made up numbers, but if you can buy coal from Australia for half the price it costs to dig it up in South Wales then what do you do? If you can buy gas at 5p per therm, whereas renewables cost 20p per therm, and Nuclear costs 50p the therm then what do you do?

Nuclear is the only thing you can rely on - but is the most expensive. Only hindsight is 100% accurate.

[Migv6 le Frog Fan]

 I believe energy prices in the US are much cheaper than here ?
If so, why ? Lots of fracking ?

[Doctor Gollum]

They produce alot of nuclear power and still actively dig up coal.