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Could UK face gas rationing? British gas reserves could run dry in 36 HOURS

Could UK face gas rationing? British gas reserves could run dry in 36 HOURS thumbnail
  • Plunging temperatures forced millions to turn up their heating
  • Shortfall could add more than £200 to family bills, analysts warn
  • Gas stores at their lowest level for three years with snow forecast
  • Government insists gas needs are ‘continuing to be met’
  • Britain relying on pipelines from Norway and shipments of liquefied gas
  • Energy giant SSE was of ‘very real risk’ of lights going out
  • Downing Street spokesman said: ‘It is absolutely clear that supplies are not running out’

Freezing Britain was last night facing the unprecedented prospect of gas rationing.
A combination of bitterly cold weather and pipeline failures has left the energy grid at breaking point.

The country has less than 36 hours of gas reserves remaining and one energy expert warned yesterday that if the cold snap continues, rationing is ‘inevitable’.

If this happens, businesses and power stations will be restricted first, but then householders will be ordered to cut down on the amount of gas they use for heating their homes.

Gas

Britain’s gas stores are dangerously low as unexpectedly low temperatures have forced people to keep their heating on.

The crisis deepened yesterday when a crucial undersea pipeline connecting Britain and Belgium shut down without warning, pushing the price of gas up by 50 per cent to a record high.

Ships bringing desperately needed supplies of liquefied natural gas (LNG) from Qatar are still more than two days away, and could be delayed further because of the bad weather.

The looming national energy crisis also threatens to push up household bills for hard-pressed families.

The Government admitted gas supplies were under pressure, but Downing Street  said David Cameron was ‘confident’ that  they would not run out. But energy analysts warned that with the freezing conditions set to last into next month the consequences were ‘worrying’.

Ann Robinson, analyst for uSwitch, said: ‘If this dreadful weather continues for the next two or three weeks we should be very worried, because if we get into a position where we do run out of gas there is not a lot that can be done in the short term.

Britain's gas reserves could run out in 36 hours ¿ leaving the country dependent on costly foreign imports.Running low: Britain’s gas reserves could run out in 36 hours ¿ leaving the country dependent on costly foreign imports.

‘Rationing would be inevitable, for businesses and domestic users and maybe for gas-powered electricity producers as well, so we might be looking at electricity rationing too.’ She said the Government’s response to the crisis had been ‘very complacent’.

Angelos Anastasiou, from investment bank Liberum Capital, added: ‘There’s a bit from the pipes and there’s LNG but that’s it. There isn’t any more. I would say rationing is a distinct possibility. We’re not there just yet, but it’s a distinct possibility.’

Energy Minister John Hayes said the issue was ‘a priority’ and confirmed he has held ‘discussions with industry and others about gas security’.

Michelle Mitchell, Age UK’s charity director general, highlighted fears for the elderly if the gas shortages become a reality.

She said: ‘This continuing bitter weather is a major threat to the health of older people, and older people need to know their gas supplies are guaranteed. Age UK would like the Government and the industry to offer them some public reassurance this weekend that the UK’s gas will continue to flow.’

The crisis was sparked early yesterday morning when a water pump failed at one of the four underwater pipelines that connect the UK and the Continent. The pipeline from Belgium, which has the capacity to supply around a fifth of the UK’s gas needs, was immediately shut down by operator Interconnector UK. The group said it ‘has a technical issue at its Bacton terminal which stopped gas flow into the UK’.

It began pumping gas at a reduced rate later in the morning, but had to shut operations again completely in the afternoon.

The full flow did not begin until late afternoon, and no one from Interconnector UK was last night able to say how much gas had been lost as a result of the outage.

The other pipelines – two from Norway and one from the Netherlands – were open during the day, although one is due to be shut down at the beginning of April for routine maintenance.

The daily price of gas rocketed to 150p a therm – up from Thursday’s price of 100p. It is the highest level ever seen in the UK gas markets, according to traders.

It came just hours after it emerged that the UK’s domestic gas stores have fallen to a new low after  millions of households turned up their heating. The stores are now more than 90 per cent empty and have less than two days’ worth of gas remaining. They are forecast to be completely empty by early next month.

WHY SUPPLIES ARE ON A KNIFE EDGE

AS well as dwindling North Sea reserves, gas is running low in Britain because of the ‘limited’ size of storage facilities.

This means the UK is in a worse position than other EU countries when families turn up the heating to cope with cold winters.

At full capacity, Britain’s storage infrastructure can stockpile enough gas for up to 20 days.

This compares with more than 100 days in France, 92 days in  Germany and 70 days in Italy. The US protects itself against gas shortages by storing contingencies for up to six months.

The historic lack of storage facilities and a failure to attract investment to build new ones has helped create the current crisis.

One reason for the lack of storage facilities is that the importing of gas, whether from the North Sea or overseas, fluctuates throughout the year.

In the UK, more gas is shipped in during the winter and is effectively dumped straight into the national grid so people can heat their homes. In the summer, demand drops off as householders switch off the heating.

This has been the case since British Gas began exploiting the resource in the 1960s. Consequently the country has never needed huge storage facilities.

On the continent, the supply of gas is ‘flatter’, according to the Oxford Institute for Energy Studies, so bigger stockpiles build up during the summer.

This means countries such as Germany have bigger storage facilities.

Analysts warned that higher gas prices now could push up long-term rates for next winter, adding 15 per cent, or more than £200, to the average family bill.

Apart from the North Sea, Britain’s only other source of gas comes from the volatile Gulf state of Qatar. The next delivery is not due for another two days, it is understood.

Ships can take two and a half weeks from leaving Qatar to arriving in Britain, and can often be delayed further by having to stop off to deliver at other ports.

Energy analyst Peter Atherton said: ‘When you run out of storage, National Grid will need to start reining demand back in.

‘You get cases where ships are told to turn around and go back because Japan is willing to pay more. We can get LNG here, but we will be bidding against the rest of the world. We can get it, but we will have to pay the price.’

National Grid has protocols for gas shortages, designed to stop households being affected immediately. Power stations which run on gas are the first to be rationed.

‘They can do that to keep the lights on because we have coal and oil-run power stations which can be ramped up to meet demand,’ said Mr Atherton.

But next month many of the UK’s coal and oil plants come offline to meet green regulations handed down by the EU, and will not be available as a stop-gap if another shortfall arises next winter.

After the power stations, heavy industry and factories will see gas use sanctioned. Only after that has been tried will other businesses be asked to reduce usage – with households last on the list to face rations.

‘The answer is that we need more storage,’ said Mr Atherton. ‘We need to have enough to get through a winter if something happens to the interconnector pipes. Can we get through the winter on our own supplies? Other European countries can, but we certainly can’t.’

A Department of Energy spokesman said: ‘In the unlikely event of a gas supply emergency, Government and industry have in place well-rehearsed plans to ensure that gas supplies can continue, so that gas consumers would not be cut off.’

Mr Hayes said: ‘Protracted cold weather increases demand, but the UK gas market is functioning well and our gas needs are continuing to be met. Gas storage could never be the whole answer, so to think purely in terms of how many days’ supply is in storage, is unwise. We have relied on a diverse range of sources for many years.’

But Joe Conlan, of the Inenco energy consultancy, said: ‘There is a very real prospect of running out, especially given the colder weather forecast for next week, the long, cold winter and disruptions to supply as a result of a very intensive period of maintenance in Norway.’

He warned there was still a risk customers might be asked to rein in their gas use next week.

His calculations suggest the UK has just one and half day’s gas supply in storage. He said: ‘The next week is critical.’
The Department for Work and Pensions has made £4million in cold weather payments to help vulnerable people pay their bills during March. Not a penny was paid this month last year.

The shortfall is likely to push up the long-term price of gas and could result in household tariffs rising by up to 15 per cent before next winterPrice rise: The shortfall is likely to push up the long-term price of gas and could result in household tariffs rising by up to 15 per cent before next winter

Blackouts.jpg

The looming national energy crisis also threatens to push up household bills for hard-pressed families.

The Government admitted gas supplies were under pressure, but Downing Street  said David Cameron was ‘confident’ that  they would not run out. But energy analysts warned that with the freezing conditions set to last into next month the consequences were ‘worrying’.

Ann Robinson, analyst for uSwitch, said: ‘If this dreadful weather continues for the next two or three weeks we should be very worried, because if we get into a position where we do run out of gas there is not a lot that can be done in the short term.

Britain's gas reserves could run out in 36 hours ¿ leaving the country dependent on costly foreign imports.

Running low: Britain’s gas reserves could run out in 36 hours ¿ leaving the country dependent on costly foreign imports.

‘Rationing would be inevitable, for businesses and domestic users and maybe for gas-powered electricity producers as well, so we might be looking at electricity rationing too.’ She said the Government’s response to the crisis had been ‘very complacent’.

Angelos Anastasiou, from investment bank Liberum Capital, added: ‘There’s a bit from the pipes and there’s LNG but that’s it. There isn’t any more. I would say rationing is a distinct possibility. We’re not there just yet, but it’s a distinct possibility.’

Energy Minister John Hayes said the issue was ‘a priority’ and confirmed he has held ‘discussions with industry and others about gas security’.

Michelle Mitchell, Age UK’s charity director general, highlighted fears for the elderly if the gas shortages become a reality.

She said: ‘This continuing bitter weather is a major threat to the health of older people, and older people need to know their gas supplies are guaranteed. Age UK would like the Government and the industry to offer them some public reassurance this weekend that the UK’s gas will continue to flow.’

The crisis was sparked early yesterday morning when a water pump failed at one of the four underwater pipelines that connect the UK and the Continent. The pipeline from Belgium, which has the capacity to supply around a fifth of the UK’s gas needs, was immediately shut down by operator Interconnector UK. The group said it ‘has a technical issue at its Bacton terminal which stopped gas flow into the UK’.

It began pumping gas at a reduced rate later in the morning, but had to shut operations again completely in the afternoon.

The full flow did not begin until late afternoon, and no one from Interconnector UK was last night able to say how much gas had been lost as a result of the outage.

The other pipelines – two from Norway and one from the Netherlands – were open during the day, although one is due to be shut down at the beginning of April for routine maintenance.

The daily price of gas rocketed to 150p a therm – up from Thursday’s price of 100p. It is the highest level ever seen in the UK gas markets, according to traders.

It came just hours after it emerged that the UK’s domestic gas stores have fallen to a new low after  millions of households turned up their heating. The stores are now more than 90 per cent empty and have less than two days’ worth of gas remaining. They are forecast to be completely empty by early next month.

WHY SUPPLIES ARE ON A KNIFE EDGE

AS well as dwindling North Sea reserves, gas is running low in Britain because of the ‘limited’ size of storage facilities.

This means the UK is in a worse position than other EU countries when families turn up the heating to cope with cold winters.

At full capacity, Britain’s storage infrastructure can stockpile enough gas for up to 20 days.

This compares with more than 100 days in France, 92 days in  Germany and 70 days in Italy. The US protects itself against gas shortages by storing contingencies for up to six months.

The historic lack of storage facilities and a failure to attract investment to build new ones has helped create the current crisis.

One reason for the lack of storage facilities is that the importing of gas, whether from the North Sea or overseas, fluctuates throughout the year.

In the UK, more gas is shipped in during the winter and is effectively dumped straight into the national grid so people can heat their homes. In the summer, demand drops off as householders switch off the heating.

This has been the case since British Gas began exploiting the resource in the 1960s. Consequently the country has never needed huge storage facilities.

On the continent, the supply of gas is ‘flatter’, according to the Oxford Institute for Energy Studies, so bigger stockpiles build up during the summer.

This means countries such as Germany have bigger storage facilities.

Analysts warned that higher gas prices now could push up long-term rates for next winter, adding 15 per cent, or more than £200, to the average family bill.

Apart from the North Sea, Britain’s only other source of gas comes from the volatile Gulf state of Qatar. The next delivery is not due for another two days, it is understood.

Ships can take two and a half weeks from leaving Qatar to arriving in Britain, and can often be delayed further by having to stop off to deliver at other ports.

Energy analyst Peter Atherton said: ‘When you run out of storage, National Grid will need to start reining demand back in.

‘You get cases where ships are told to turn around and go back because Japan is willing to pay more. We can get LNG here, but we will be bidding against the rest of the world. We can get it, but we will have to pay the price.’

National Grid has protocols for gas shortages, designed to stop households being affected immediately. Power stations which run on gas are the first to be rationed.

‘They can do that to keep the lights on because we have coal and oil-run power stations which can be ramped up to meet demand,’ said Mr Atherton.

But next month many of the UK’s coal and oil plants come offline to meet green regulations handed down by the EU, and will not be available as a stop-gap if another shortfall arises next winter.

After the power stations, heavy industry and factories will see gas use sanctioned. Only after that has been tried will other businesses be asked to reduce usage – with households last on the list to face rations.

‘The answer is that we need more storage,’ said Mr Atherton. ‘We need to have enough to get through a winter if something happens to the interconnector pipes. Can we get through the winter on our own supplies? Other European countries can, but we certainly can’t.’

A Department of Energy spokesman said: ‘In the unlikely event of a gas supply emergency, Government and industry have in place well-rehearsed plans to ensure that gas supplies can continue, so that gas consumers would not be cut off.’

Mr Hayes said: ‘Protracted cold weather increases demand, but the UK gas market is functioning well and our gas needs are continuing to be met. Gas storage could never be the whole answer, so to think purely in terms of how many days’ supply is in storage, is unwise. We have relied on a diverse range of sources for many years.’

But Joe Conlan, of the Inenco energy consultancy, said: ‘There is a very real prospect of running out, especially given the colder weather forecast for next week, the long, cold winter and disruptions to supply as a result of a very intensive period of maintenance in Norway.’

He warned there was still a risk customers might be asked to rein in their gas use next week.

His calculations suggest the UK has just one and half day’s gas supply in storage. He said: ‘The next week is critical.’
The Department for Work and Pensions has made £4million in cold weather payments to help vulnerable people pay their bills during March. Not a penny was paid this month last year.

The shortfall is likely to push up the long-term price of gas and could result in household tariffs rising by up to 15 per cent before next winter

Price rise: The shortfall is likely to push up the long-term price of gas and could result in household tariffs rising by up to 15 per cent before next winter

Blackouts.jpg
Read more: http://www.dailymail.co.uk/news/article-2297296/British-gas-reserves-run-dry-36-HOURS-freezing-householders-turn-heating-up.html#ixzz2OPahQcLD
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16 Comments on "Could UK face gas rationing? British gas reserves could run dry in 36 HOURS"

  1. BillT on Sun, 24th Mar 2013 2:18 am 

    Well, after repeating most points at least three times, the article ends on a likely price increase next winter.

    However, much to Econ101 and SOS’ dismay, not one word mentioned fraking. lol.

    A 20 day supply of a necessity seems stupid for a supposedly 1st world country. But then, the British are a bit of the ‘stiff upper lip’ and all.

  2. Beery on Sun, 24th Mar 2013 4:35 am 

    BillT, Britain doesn’t get that cold. This so-called ‘freeze’ that Britain is undergoing means temperatures that dip to just below freezing in the middle of the night. Daytime temperatures are in the high 30s and 40s fahrenheit. Hardly blizzard conditions. It’s not even cold enough for snow to settle for long.

    The idea that gas for heating is a necessity in the UK is nonsense. Even if gas runs out, those Britons who have a couple of wool pullovers will be fine. Britain has a temperate climate – cool summers, mild winters. Britain gets about the same amount of snowfall in winter as Washington DC. Not exactly Siberia.

  3. Beery on Sun, 24th Mar 2013 4:38 am 

    I know, because I lived my first 22 years in Yorkshire and the English Midlands.

  4. Beery on Sun, 24th Mar 2013 5:03 am 

    And let’s remember that this is the Daily Mail, whose readership comprises the conservative upper class and upper-middle classes, many of whom are appalled when they can’t stock their fridges with enough caviar. So I’m sure that for them, a potential gas shortage is a nightmare scenario. If their heating goes off, their pet tropical fish might not make it to next week. Oh the humanity!

  5. BillT on Sun, 24th Mar 2013 6:10 am 

    Beery, thanks for the details. I have never been in England except to change planes in Heathrow. I assumed they had winters like N.E.Us with below zero F. and howling winds…lol. DC weather is cold only to someone from a tropical country.

  6. Arthur on Sun, 24th Mar 2013 11:24 am 

    “the British are a bit of the ‘stiff upper lip’ and all.”

    This saying could get an expected meaning with the developing resource situation.lol

    Seriously, this has (not yet) anything to do with peak oil etc., but with a remarkable low storage capacity making itself felt in extreme weather conditions.

    http://tinyurl.com/cog8ta4

  7. Hugh Culliton on Sun, 24th Mar 2013 1:37 pm 

    While this is an artificial shortage broght on by an incompetently low reserve of NG, it does serve to illustrate some of the potential problems and public/political reactions when a true energy shortage manifests itself in the future. In the post peak oil world, I’m glad my kids will grow up in rural Ontario. A UK without cheap petrochemicals will be a rough place.

  8. Beery on Sun, 24th Mar 2013 3:15 pm 

    Hugh, I’m not sure what you think the British climate is like, but I assure you, Britain is MUCH warmer in winter than Ontario. As I said before, heating homes in winter in Britain is a luxury, not a necessity. I suspect the same cannot be said for anywhere in Ontario.

  9. Beery on Sun, 24th Mar 2013 3:30 pm 

    As you can see from the link:

    http://weseachange.weebly.com/what-is-climate.html

    Britain has a warm temperate climate, fully humid with a warm summer. Ontario has a snowy climate, fully humid with a cool summer.

    In Ottawa the average temperature in January is 21 F/ -6 C. In the UK, the average temperature in January is 37 F/ +3 C.

    Again, the idea that Britons will have it rough in a post- fossil fuel world is nonsense, unless of course the Gulf Stream is altered by global warming.

  10. graham on Sun, 24th Mar 2013 3:41 pm 

    I’m not sure about that las comment Beery, our population density is amongst the highest in the world. That is to me extremely worrying, we couldn’t even feed ourselves during the war with 20 million people, now with 60 million+ take away food imports and this place isn’t somewhere I want to be.

  11. Kenz300 on Sun, 24th Mar 2013 4:46 pm 

    Might be time to diversify their energy sources and types.

    Plenty of energy can be produced locally.

    Wind, solar, wave energy, biofuels and geothermal are all local options.

    Like they say ” Don’t put all your eggs in one basket”.

  12. Beery on Sun, 24th Mar 2013 4:59 pm 

    Graham, the idea that food imports will stop entirely and suddenly when peak oil hits is unrealistic. It’s not going to be like WW2 when the rest of Europe was entirely and suddenly cut off. Changes in population and food distribution will undoubtedly occur, but they will occur over a period of decades.

  13. Judy on Sun, 24th Mar 2013 8:06 pm 

    Beery is right that the UK has a relatively mild wet climate for its latitude, but it is not a climate you can survive in without heating. It has one of the worst records for Excess Winter Deaths in Europe (despite the mild winters). You ideally need 16 degrees C (60F) to survive without heating, but below 14C (57F) you start getting problems with mildew, which is one of the contributors to the excess winter deaths.

    We get some mild wet winters, but at the moment it is cold, currently -1C (30F) in the Midlands, and a bitterly cold easterly wind makes it feel a lot colder. It has been like this for most of this year so far, and it has snowed for the last 3 days which is unusual for March. I work from home spending hours sat at a desk, so there is no way I can manage without heating even with a relatively well insulated house. 58% of the homes in the UK were built before 1964, when there were no standards for insulation and half of those were built before cavity walls were introduced, so they leak heat like sieves. It certainly isn’t that cold, but it is colder than the locals are used to for March.

    That said, this blog about gas shortages isn’t really about heating, or people being cold. There is no way that the gas for domestic heating use will be shut off (They could in theory ask people to try not to waste gas!). It is too dangerous to drop the pressure for domestic supplies (If there are leaks air could get sucked in and cause explosions when started up again), so gas would only be shut off to large industrial sites.

    Gas shortages would result in power cuts, because the large industrial gas consumers are power stations. From memory 60% of the UK electricity comes from gas fired power stations, so although there is a bit of flexibility to bring in the coal power stations, it cannot cover the shortfall of the gas power stations.

    The UK government takes risks on the basis we have a mild wet climate and they don’t prepare for anything else. In addition, 10 years ago all our gas came from British North Sea production so was less of an issue. The chart showing 45% of gas being domestically produced, does not show the true picture. Gas production is fairly even throughout the year, so in summer it covers most of the gas consumed, but in winter, when the demand peaks, our domestic supply is a small contributor and we are at the mercy of imports. Losing a pipeline is significant and as winter should have ended by now our storage is empty. Plus Europe is gripped by the same cold front, so demand in the region is high.

    Planned power cuts are an inconvenience, but not normally life threatening. If it comes to that then the government will have egg on their face, because they will look incompetent and it will affect the economy. I have written about the situation on my blog at http://rationthefuture.blogspot.co.uk/ and also have a link to the presentation by Alistair Buchanan of Ofgem. Hopefully a few blackouts may persuade people to prepare for future shortages.

    Judy

  14. BillT on Mon, 25th Mar 2013 1:09 am 

    Actually, food may be a big problem in the next few years or a decade at most. Few countries are going to be exporting food or energy soon. Look at the droughts and heat in the bread baskets of the world. The Us is scheduled for more drought this year and Australia is still setting new heat records and drought. I’m not sure what Russia’s situation is, but would you want Russia to be YOUR only food AND nat.gas supplier? ^_^

  15. GregT on Mon, 25th Mar 2013 2:10 am 

    Food is going to be a huge problem in the next decade or two at the most, as will be water. It has already begun in many countries around the globe. If your food is being transported from any distance, get ready to experience hunger.

    Now would be a very smart time to position yourself for the future.

  16. rollin on Mon, 25th Mar 2013 11:49 am 

    Sounds like they need to insulate, develop wind power and learn to conserve. I recall reading a British novel where one of the characters (a professional man) looks at his home thermometer and it reads 55F in the house. Apparently in the early 1900’s that was a fine house temperature. No wonder they wore wool. Time to cozy up to the fireplace or hang out in the kitchen to get warm.

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