There are rising concerns that the United Kingdom’s gas security is under threat and that not enough is being done to mitigate the risk. Chris O’Shea, the CEO of Centrica, which owns British Gas, has called the government out for not paying enough attention to a gas report that was released on the same day as the annual budget, suggesting that not enough is being done to ensure the future of the U.K.’s gas supply, which could be devastating to consumers.
A 50-page report from the National Energy System Operator (Neso) was released on the U.K.’s budget day, meaning that it was greatly overshadowed in the media by public spending stories. The report was Neso’s first annual Gas Security of Supply Assessment to analyse the availability, reliability, and deliverability of gas volumes needed to meet a range of future demand scenarios for Great Britain’s National Gas transmission network.
The report states, “assessment shows that gas supply is expected to be sufficient to meet demand under seasonal normal weather conditions.” However, Neso found that there is an “emerging” risk of Britain running out of gas if a specific piece of equipment were to fail at a pivotal moment. It modelled five pathways for gas demand through 2030 and 2035 and tested them against an extended period of very cold weather. The report states, “In the unlikely event of the loss of the single largest piece of gas infrastructure, gas supply falls short of demand for all pathways in 2030-31.”
If this happened, gas companies would need to tell factories and power plants to stop using gas. If the scenario were the most extreme, consumers could be left without gas for heating. The piece of equipment in question is the 725-mile underwater Langeled pipeline from Norway. While a scenario in which this fails is unlikely, the threat of sabotage must be considered. If the pipeline were to be broken, it could take weeks or even months to fix, according to O’Shea.
The U.K.’s energy minister Michael Shanks responded to the report by pledging to do “whatever it takes” to ensure secure gas supplies. However, the report does not offer any quick fix for the issue. As the continued windfall tax threatens to drive down the U.K.’s North Sea gas production, Britain may come to rely more heavily on Norway for its supplies. Meanwhile, LNG import terminals are expensive, and there are only three in the U.K. In addition, expanding interconnector capacity with Norway cannot happen overnight. O’Leary suggests, however, that more investment could be made in developing onshore gas storage, such as salt caverns.
O’Leary says efforts to double down on developing renewable energy capacity may not be enough, as mitigation efforts must take place faster than the anticipated timeframe to complete a comprehensive shift to green. In addition, there is the worry that not enough solar or wind power would be produced in the event of a dark, still winter, leaving little alternative to gas. The CEO says that it is vital the government does not fail to respond to the report, as he says has happened with past governments, saying it is vital the risk is quickly mitigated before something disastrous happens.
At present, around 85 percent of the U.K.’s roughly 30 million homes continue to rely on gas for heating and cooking, meaning that, as much as the government may hope to transition to renewable alternatives, this is likely to take several decades.
Meanwhile, Neso’s Director of Resilience and Emergency Management, Deborah Petterson, stated, “By conducting this analysis, we can identify emerging risks early and, crucially, in time for mitigations to be put in place. Our assessment shows that a combination of measures will likely be required to mitigate those emerging risks, and we will work with government, Ofgem and National Gas Transmission to ensure the timely delivery of the most effective options for consumers.”
However, despite the recent discovery, studies have repeatedly found that new gas drilling will do little to boost energy security. According to the U.K.-based non-profit research and campaign organisation Uplift, “By 2050 the UK will be almost 100% reliant on gas imports, even if new fields are developed and new licences issued.” New drilling is not expected to lower bills or protect workers in the long term. Meanwhile, increased gas production would likely cause the U.K. to miss its climate targets.
So, while ensuring the future of the U.K.’s gas supplies is key to maintaining energy security, it is important that any actions taken to mitigate potential gas shortages are assessed against the broader U.K. energy landscape. While the U.K. may not be prepared to replace its gas supplies with renewable alternatives in the event of a sudden disruption, a temporary reliance on larger gas imports or the use of gas stores could help to alleviate the burden.
By Felicity Bradstock for Oilprice.com
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