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Frigid UK weather lights gas supply fears

Freezing temperatures mean storage tanks have only two days worth of gas supplies left, causing political anxiety.

Last Modified: 28 Mar 2013 08:00
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About one in four UK households faces "fuel poverty" and a record cold snap is making things worse [GALLO/GETTY]

London, UK - British science fiction dramas of the 1970s and '80s often took bleak pleasure in depicting a future world exhausted of fossil fuels in which feral survivors roamed the shattered landscapes of an industrial society in its death throes.

Now Britons, already shivering in the sub-zero temperatures of the coldest March in 50 years, are facing the prospect of an energy blackout for real amid reports the country has just two days of gas supplies left in reserve.

Thousands of homes across northern England, Scotland, Wales and Northern Ireland have already endured power cuts and massive disruption in recent days, as heavy snow brought down electricity cables and blocked roads.

But there could be worse to come. The cold weather has prompted a surge in demand for gas as households have turned up the heat, depleting reserves and prompting fears that storage facilities could be empty within days.

"Britain on brink of running out of gas," said the front page of last Friday's Times newspaper. "Welcome to blackout Britain," offered the Daily Telegraph on Monday, as the head of a Scottish power company warned the UK faced a "capacity crunch" over the next three years.

"There is a very real risk of the lights going out," said Ian Marchant, the chief executive of Scottish and Southern Energy (SSE). 

Market response

If such headlines suggest a country on the brink of burning its furniture to keep warm, the reality is rather more mundane.
Most of the UK's gas requirements are adequately served by domestic fields in the North Sea, and, increasingly, by pipelines from Norway and continental Europe. Reserves should only be needed to cope with excess demand, or in response to a problem with one of the pipelines.


Record UK cold freezes economy

But that was what happened last Friday, when the Interconnector pipeline between Belgium and eastern England was shut down for eight hours because of a technical fault.

The response of the markets was instant, with gas prices surging to 150 pence ($2.26) a therm, more than 50 percent higher than Thursday's closing price, as the United Kingdom looked to make up the shortfall in supply by importing tanker-transported liquified natural gas.

By Monday, two Qatari tankers had docked at British ports, bringing 532,000 cubic metres of gas, or enough to keep the country's radiators warm for a further 12 hours.

With other tankers on the way, gas prices retreated to about 100 pence ($1.50) a therm. Perhaps in an effort to further ease concerns, Centrica, the UK's biggest energy supplier, announced a deal to secure supplies of US shale gas for 20 years from 2018 to meet the needs of nearly two million homes.

But analysts said the crisis had exposed alarming shortcomings in the UK's energy security, with the country becoming increasingly dependent on imported gas as its own reserves dwindle and due to an "energy policy vacuum" at the heart of government.

'Energy policy vacuum' 

Peter Hughes, an energy consultant, said arguments and delays over plans for a new generation of nuclear power stations, continuing issues over the development of reliable renewable energy, and the planned closure of a number of coal-fuelled power stations to meet the UK's carbon reduction targets had left gas as the country's default energy choice.

Whereas new nuclear facilities would take at least a decade to come online, gas-fired power stations could be planned and built in just four years, he said.

"That allows politicians to procrastinate, because there is always a shorter term option to fill the gap. Gas-fired power is becoming more important, though, to be fair, the UK is currently operating in a bit of an energy policy vacuum," Hughes told Al Jazeera.

But the danger of dependency on imported gas was to expose the UK to fluctuations in the global market, especially given the country's inadequate storage facilities, Hughes said.

Gas prices have soared since Japan shut down its nuclear industry in the aftermath of the 2011 Fukushima disaster, prompting spiralling demand for gas in the Far East.

"The basic problem for the UK is that our demand peak is subject to the same seasonal and weather influences as other countries in the northern hemisphere," said Hughes. "There is a tradable market for energy, and these tankers will be pointed at where the price is best."

"There is massive personal suffering that accompanies this. This is a social crisis and we need to solve it."

-  Ed Matthew, energy campaigner

Matthew Osborne, a trader at energy analysts Inenco, said the rise in UK gas prices was simply a consequence of supply-and-demand fluctuations. 

"We are seeing the market working as it should do, sending the right signals and people making rational decisions themselves to use less gas today and burn more tomorrow," Osborne told Al Jazeera. "But we are in for short-term pain and we are likely to see that for the next few winters to come."

But Ed Matthew of Energy Bill Revolution, a campaigning group calling for greater energy efficiency, said many households in the UK were already suffering the consequences of rising energy bills.

At least one in four households in the UK already endures "fuel poverty", defined by the government as spending more than 10 percent of income on heating, according to Energy Bill Revolution. That figure could soon double if gas prices keep rising, Matthew said.

Many families were already effectively rationing their energy use as they faced a stark choice between putting food on the table and heating their homes, he said. Almost 8,000 people are estimated to die each year as a consequence of medical conditions linked to living in cold homes, according to Energy Bill Revolution.

"There is massive personal suffering that accompanies this. This is a social crisis and we need to solve it," Matthew told Al Jazeera. 

"There was this idea that North Sea oil and gas was going to be this great panacea, but the money was never quite big enough to change everything overnight."

- Dominic Sandbrook, historian 

Anxieties 

For the UK, the current dependency on imported gas is also in stark contrast to the boom years of the 1980s, when the country's energy needs were provided for almost entirely by North Sea oil and gas. 

Production in those fields is still considerable; only in 2011 did imported gas exceed home-produced energy, but the flow is predicted to fall sharply in years to come.

And with the British economy yet to recover from the 2008 global crash, some now look enviously to Norway, which invested its windfalls from North Sea oil in a sovereign wealth fund that now finances one of the most lavish welfare systems in the world.

"There was this idea that North Sea oil and gas was going to be this great panacea, but the money was never quite big enough to change everything overnight," Dominic Sandbrook, a historian of post-war British society, told Al Jazeera. "Our appetite for oil was so great it dwarfed anything the North Sea could produce."

Sandbrook sees a perverse nostalgia in the current crisis for the power cuts of the 1970s, when industrial strife and economic misery brought the country to a standstill, and even for World War II when lights were dimmed in an effort to hinder the nightly raids by German bombers.

"There is a deep cultural nostalgia for the Blitz and the blackouts, and huddling together against an external menace. It does seem there is a folk memory of the lights going out," he said.

"It's a reminder of how much people depend on this fossil fuel infrastructure that we completely take for granted. It's one of those anxieties with which we torment ourselves."

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Source:
Al Jazeera
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