The reliance of the UK on gas supplies from Russia look set to be relaxed once a new pipeline begins to deliver gas from Norway. I have written about Ormen Lange previously, which is the largest gas-field in Europe, and looks set to bring gas to these shores by next month, well ahead of original predictions that it would not begin in earnest until October. Preliminary flows of gas are to begin this week. The Langeled gas pipeline is connected to the gas depot at Easington in the North-east of England, and at 745 miles (1,200 kilometres) in length, is the longest such sub-sea pipeline in the world. It is expected to meet around one fifth of the UK's demand for gas.
North Sea gas, introduced in the early 1970's to replace the older town-gas, which was produced by heating coal in huge retorts, has now peaked and the UK is a net importer of natural gas. Following all peaks in resource production, the supply will thenceforth inexorably dwindle, and by the end of the decade (just a couple of years from now) half the nation's gas will need to be imported, much of it from Russia. There are other supplies of gas being negotiated from Norway and a gigantic gas-terminal has been built at Milford Haven, off the south Welsh coast, to receive liquefied natural gas from Qatar, in the Persian Gulf, also to the tune of one fifth of the nation's current total consumption of gas.
The owner of British Gas, Centrica, which are also the operator of the Easington terminal, has signed a £5 billion contract with Statol, the Norwegian energy group, to supply its customers with gas. The National Grid and the UK government are lobbying Statol in connection with a second gas pipeline whose destination is a matter for competition between nations, i.e. the UK, Germany, Belgium and The Netherlands. This is due to open in 2012 to carry gas from the Troll field and could double exports from Norway to the UK (i.e. provide 40% of the total amount of gas used, in conjunction with the Langeled pipeline). Statol will make its decision next month as to who will get it.
Centrica is calling loudly for a much greater investment in the UK's energy infrastructure, and two years ago, before the first stage of the Langeled pipeline, and another one from the Netherlands were built, Britain had the highest gas-prices in all Europe with detrimental consequences for the competitiveness of businesses here. Since then, the price of gas in the UK has roughly halved and the Langeled line supplies coming on-stream next month will buffer the costs of the resource and keep them stable in the short term.
Analysts warn that the coming cold-season will force a test of how the new gas infrastructure operates as a unit in this post-North Sea bounty era. The head of the energy markets EIC, Craig Lowry, said: "There is a big question mark over how much gas will be delivered on any specific day. No one has seen how all these sources of imports interact with each other. It could lead to volatile wholesale gas prices. It's a situation that the UK has never faced before."
True, we used to make all our gas from coal, and we also made most of our electricity from coal. Then the North Sea gas arrived, effectively putting coal out of business, since we could burn that instead to produce electricity as well as using it as the new "gas". This also had the "advantage" from the government's point of view that the militant miners unions could be crushed and the pits closed. The "miners" after all, brought down the Edward Heath administration in the mid-1970's, and Margaret Thatcher was determined this would not happen to her government. UK carbon emissions fell too, since less CO2 is produced when gas is burned per unit of energy than is the case from coal. Now the North Sea gas is in decline, we are relying increasingly on imports of natural gas, using more coal (including re-opening some mines, long closed, in Yorkshire and in South Wales) and ramping-up the use of nuclear power, with a new generation of reactors planned both to replace those due for decommissioning and to expand provision of nuclear energy overall.
The energy mix is changing in the UK, and the gas issue is just one link in the energy chain - the first to be forged, of many.
"Russian dependence eased as UK receives gas early from Norway", by Tim Webb: http://news.independent.co.uk/business/news/article2896102.ece