David Prosser: Talk of a gas crisis is just hot air

Friday 08 January 2010 01:00

Outlook A return to 1970s-style fuel rationing, or just a straightforward contractual arrangement? You could spin the story of National Grid diverting gas supplies from factories with interruptible contracts either way.

This isn't a question of supply, but distribution. What National Grid did yesterday was put in place plans it has for when its network is operating at full capacity and can no longer keep up with demand, reducing supplies to some customers in order to prioritise the domestic market.

Most of those organisations that have been paying lower charges in return for accepting interruptible contracts will have switched to alternative fuels and always knew, when they signed up for the deals, that this was a possibility.

Still, many of these customers will have thought of it as a theoretical possibility only – the contracts have not been enforced for six or seven years – so yesterday may well have come as a nasty surprise.

Moreover, that Britain has a gas distribution network that cannot cope when demand reaches peak levels – albeit that the current severe weather represents an extreme situation – is hardly something to feel proud about. Businesses, already coping with weather-related stresses of their own, need to be able to feel confident that their energy supplies are secure.

There is an element here of the debate over why Britain's transport system can't cope with snow. Do we want to invest huge sums in upgrading infrastructure so that it is fit for a purpose that is only required once in a blue moon? But given the concern about Britain's energy gap – that our ageing power production plants are not being replaced quickly enough – that there is additional anxiety about transmission is disturbing.

Remember, though, that rationing in the 1970s followed gas shortages. British Gas's insistence that there is plenty of gas available is comforting, particularly in the context of the second gas balancing alert issued yesterday. That followed a technical problem with supplies from Norway – unfortunate timing, but no more than that – but there seems to have been no problem making up the shortfall from alternative sources.

It's very easy to get hysterical about gas supplies when it's snowing outside, but let's be careful not to conflate two separate issues.

The first is that Britain's gas transmission network genuinely is creaking right now, but as of this moment, there is no threat to the domestic market and the cutbacks on supplies to industrial customers are within the agreed parameters of their contracts. Secondly, there really does seem to be no problem with gas supplies. Sure, we could do with better storage facilities, but Britain is not running out of gas.

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