THE UK’s gas supplies will not run out, the government has insisted, as the cost of importing gas reached a record high.
Ministers moved to reassure the public after reports said reserves were down to just two days’ consumption and energy firms and environmental groups expressed concerns. Gas stocks at the UK’s largest storage facility are at less than 10 per cent of capacity.
The problem saw wholesale gas prices for Britain surge to a record high yesterday, after a main gas import pipeline shut down unexpectedly, exposing the country’s vulnerability to foreign supplies.
Gas prices for within-day delivery spiked at 150p per therm early in the day, more than 50 per cent above Thursday’s close, after the pipeline from Belgium that facilitates gas imports from Europe shut down.
But Prime Minister David Cameron was said to be “confident” the UK’s gas needs were being met, despite increased demand due to the cold snap, and would continue to be met.
A Downing Street spokesman said: “The absolute key thing on this is that supplies are not running out. The gas market is how we source our supplies and that market continues to function well. The Prime Minister’s key concern is that gas supplies continue. It is absolutely clear that supplies are not running out.”
A Department of Energy and Climate Change spokeswoman said: “Protracted cold weather increases demand, but the UK gas market is responsive and our gas needs are continuing to be met. Gas storage would never be the sole source of gas meeting our needs, so it is misleading to talk purely about how many days’ supply is in storage.”
But Andrew Horstead, risk analyst at energy and carbon specialist Utilyx, said a long-term strategy was needed. “The UK is becoming increasingly reliant on imported gas and the reality is that, every day this situation is allowed to continue, we risk the potential of rising bills without having the certainty that the energy will be there for us,” he said.
“A more diverse generation mix is the long-term solution, but, until then, the reality is that we need gas to heat our homes.
“We need a solution to the gas crisis. The Chancellor’s hope for shale gas announced in the Budget this week is neither proven for the UK nor is it a short-term solution to the current shortages we are seeing.
“It illustrates once again that the UK is crossing its fingers that everything will turn out for the best and this week’s supply crisis is a stark reminder of how risky this approach is.”
The problems with Britain’s gas supply stem from its second-tier status with its major suppliers, Norway and Qatar.
Both countries earn more by selling to other customers, leaving Britain to rely on whatever leftovers remain.
The squeeze comes, as it has this month, when cold weather spurs higher demand from continental European customers for Norway’s gas, while high Asian demand draws Qatari tankers eastward.