The flame flickers

Britain's gas pipeline operator says dwindling supplies from offshore fields could lead to a winter energy crisis

Lattice Group, the monopoly gas pipeline operator, has issued a stark warning to the Government that Britain could face a severe shortage of gas in three years. In a report sent to the Department of Trade and Industry and seen by The Independent on Sunday, Lattice says that Britain is too dependent on gas imports and that the situation needs to be "addressed as a matter of urgency".

As the owner of Transco, which operates 275,000km of gas pipes, Lattice says that if there were a "prolonged and severe winter", demand for gas would outstrip supply, leading to sudden increases in wholesale gas prices. It goes further by claiming that excessive demand could force parts of the gas system to be shut down on safety grounds. "The social and economic costs of this would be high," Lattice says.

Britain relies on natural gas from offshore fields. But these supplies have peaked and, barring a major discovery, Lattice estimates that by 2010 Britain will need to increase imports by a third. However, there are concerns that Continental pipeline infrastructure and gas storage facilities need upgrading to meet the demand.

The warning is contained in Lattice's formal response to a DTI consultation exercise being carried out by the energy minister Brian Wilson into Britain's future energy needs. The consultation is expected to lead to the publication of an energy White Paper before the end of the year.

Last week the DTI Joint Energy Security of Supply Working Group also said that delays in securing investment in gas infrastructure could lead to a strain on the system from 2004-2005.

But the Government will have been comforted by two deals announced last week. ExxonMobil has said it plans to ship liquefied natural gas to Britain from the Middle East by 2006, while Centrica announced a deal to pipe gas from the Netherlands by 2005.

Nevertheless, Lattice believes the Government should develop new public policies to define future levels of gas supply. The company also argues that there is a "pressing need" for other European countries to make arrangements for gas storage and piping.