Gas row hots up as Labour calls Tories scaremongers

Conservatives under fire over claims Britain is close to running short of gas
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The Independent Online

The Conservatives yesterday rounded on the Government's energy security record, saying that "at least 10 years of drift" and a lack of gas storage facilities had caused gas supplies to be cut to businesses during the recent cold weather.

"We are in urgent need of additional storage facilities," said Greg Clark, the shadow Energy Secretary, who last week claimed that Britain had just eight days' worth of gas left in storage as a result of the extra demand placed on the national grid by the big freeze.

Mr Clark argued that during normal weather, the UK had a maximum of 16 days of gas supplies in storage, compared with 120 days in France and 100 days in Germany.

"Ofgem [the energy regulator] needs to decide whether we have enough storage capacity for the purpose of security," he added. "From recent statements, it would appear that it does not."

Responding the Tory criticism, the Secretary of State for Energy, Ed Miliband said the system had worked well throughout the cold snap and that while warnings were issued because of pipeline problems, no household or business had run out of energy.

He also argued that the country's gas was secure thanks to its diversity of supply, pointing out that imports were capable of reaching 125 per cent of capacity as a result of deals with a number of countries. In the past five years, Britain has opened gas pipes connected to Norway and Belgium. Liquefied natural gas plants have also been constructed, allowing imports from the Middle East and Africa.

Energy analysts agreed that while the energy sector had coped well during the bad weather, there had been an over-reliance in recent years on gas produced in the North Sea. They said that more gas storage facilities would lead to cheaper bills for customers.

"There has been unprecedented demand on the energy system and largely there it has coped well with what's been thrown at it," said David Hunter, an analyst at the energy consultancy McKinnon & Clark.

"However, we are in a situation at present where we export cheap gas to continental Europe to be stored during the summer, and then buy it back later at more expensive prices. The fact is that we have nowhere to store what we have extracted."

During the Opposition-sponsored debate, Mr Clark refused to apologise for his comments last week, adding yesterday that there was now just seven days' worth of gas left in storage. A source at one major energy supplier, who refused to be named because of the political debate, said that Mr Clark's warnings were unhelpful.

"The UK has relied on a mixture of gas supplies, and while stored gas supplies ran low, the reality is that the country would never have run out," the source said. "The truth is that even in the worst case, there is still enough gas to supply the UK until the middle of March."

Labour and Liberal Democrat MPs went further, accusing the shadow minister of seeking to scare the public.

Suppliers such as British Gas told nearly 100 corporate clients on so-called "interruptible contracts" that their gas supplies would be cut and they should rely on other energy sources during the worst of the cold weather last week. The move ensured that supplies to householders were not interrupted. Companies were able to switch to coal-fired power, but incoming EU legislation, which will restrict the amount of energy that can be sourced from coal, will increase Britain's reliance on gas.