The recent fire at the Buncefield Oil Depot near Hemel Hempstead on the 12 December 2005, closely followed by the dispute that threatened gas supplies from Russia into the Ukraine showed how vulnerable UK fuel supplies have now become.

The news that the UK already imports a significant and growing percentage of gas from outside the UK came as a surprise to many and served to demonstrate that we are no longer self sufficient with regards to our energy needs. Gas supply was not seen as a major issue during the 1990’s when the UK was self sufficient from North Sea reserves. However, this position has now significantly changed with the UK now being increasingly reliant on
imported gas.

Since 1992 UK gas consumption has risen by 66%, much of which is used to generate electricity. Forecasts predict that this will climb a further 14% between now and 2011.

UK gas supplies in the North and Irish Sea are in decline and we now import gas from Norway and Europe via Interconnector pipelines in addition to also shipping in supplies of liquefied natural gas transported by sea tankers.

It is anticipated that 80% of our gas will be imported by the year 2020.

Interconnectors
Natural gas is supplied through Interconnectors - these are pipelines connecting us to offshore production facilities and other countries’ supply networks.

The European market is competitive and lacks transparency which means that the UK does not know how much gas will be flowing through the Interconnectors on a daily basis - this has inevitably forced UK prices upwards with consumers ultimately footing the bill.

New Interconnectors are under development but will take time to come onstream, gas flow through which will still ultimately be threatened by external non-UK control.

Liquid Natural Gas (LNG)
LGN involves a process where gas is cooled into liquid form, allowing it to be transported safely by ship.

In order to take advantage of LNG, Britain needs to have specialised import terminals and the capacity in the gas pipeline system to bring this gas onshore. Our growing dependence on imported gas means that we need far more import terminals.

As shown below, projects are under development to increase import facilities tenfold from the current 4.4 bcm at the Isle of Grain facility to over 45 bcm by 2010.

Storage
The UK currently has limited gas storage capabilities. If the assumptions made in table 2 below are achieved, then storage

is set to double by 2010, so long as all projects currently planned or underway are delivered to schedule. However, this still leaves a significant shortfall in storage for the period 2008/9.