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A new energy trading route is born, linking Japanese power stations to European gas markets. The Arctic Aurora has loaded a cargo of liquefied natural gas at Statoil's terminal in Hammerfest, Norway, and is now being tracked by Bloomberg in the East Siberian Sea, on a course heading for a power plant near Tokyo. It's an expensive enterprise, using a vessel equipped for ice, but Tepco, the Japanese energy utility buying the gas, desperately needs fuel to fill the power gap left by Japan's nuclear shutdown. For Japan, the Northern Sea Route opens the door to alternative gas suppliers, helping to keep a lid on the frothy price of LNG in Asia.

Dodging ice floes, the Arctic Aurora provides an insight into what is keeping the price of fuel high in a world where there is no shortage of resources. Energy, whether it is in the form of oil, gas or coal is ample in supply, but often expensive to acquire. It is the cost of new technology, the expense of transport or the burden of politics that keeps the price high.

When we talk of new energy frontiers, such as Arctic oil exploration, shale gas in the southeast of England or re-entering the oil fields of Iraq, it is the cost of access – whether technology, infrastructure or politics – that determines the price per barrel. For Japan, the price of securing a marginal extra tonne of LNG has made the investment in chartering special LNG carriers capable of navigating the Arctic worthwhile. The gas is always available, if you are prepared to pay for the journey.

Story continues below advertisement

The escalating cost of getting that extra barrel of oil to a consumer means that we won't see a return to cheap energy, reckons McKinsey, which concluded in a recent study that the commodity supercycle is not over. According to McKinsey, escalating supply-side costs will keep pushing up the price of the marginal barrel of oil, meaning the price of the last available barrel. While we know that additional barrels are there to meet new demand, getting hold of them will require ever more expensive technology and infrastructure. At the same time, environmental and political pressure will add to the cost of access. Sanford Bernstein, the brokerage firm, reckons that the marginal cost of producing an extra barrel of oil worldwide has reached $100 (U.S.) – a figure that is not surprising when one considers the cost of deep-water drilling in the Gulf of Mexico or offshore Brazil.

The new technology of oil extraction is hugely expensive, but even more critical is the cost of access. The evidence is close at hand; stranded oil from sands in Alberta or North Dakota shale may be cheap at local prices but the global price for crude remains stubbornly high, where it is most needed. This is easily seen in the $30- to 40-per-barrel discount of Western Canada Select to the global benchmarks – America's WTI or North Sea Brent. It is the cost of getting the oil to market that really matters – a cost that is actual in terms of building pipelines as well as a less tangible political cost, expressed in the delay in bringing extra oil to market.

This is an old story. At the birth of the oil industry in the late 19th century, prices were both high and volatile. Expressed in current dollar values, the price of oil rocketed between $20 and $100 as resources moved from glut to scarcity. There followed a period of abundance in the first half of the 20th century when access to oil was easy and prices fell, making possible huge industrial expansion in America and Europe. In the 1970s the political turmoil of the Arab-Israeli conflict ended easy access to the oil fields of the Middle East, reminding us again that oil is as much about the cost of access as the cost of exploration.

We are going back to the future. What mattered in the 1880s and what matters now is not finding oil but getting it to customers. Until the 1880s, Rockefeller's Standard dominated the nascent oil market in Europe. However, it was the building of a railroad, financed by the Rothschilds, linking the oil pits in the Caspian to the Black Sea, that brought Nobel's Russian oil into Europe and provoked a price war. It was new tanker ships, designed and built by Marcus Samuel, a dealer in exotic seashells, that created a trade in kerosene from the Black Sea, through the Suez Canal to the Far East.

The Arctic Aurora, like Mr. Samuel's Murex, is opening up a trade route and a potential price arbitrage between Asian and North European gas. It is how markets should function, when we let it happen.

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