January 09, 2009

Gordon Brown solves gas storage crisis

First the facts, from a piece in Investors Chronicle (no link)
The escalation of Russia's gas dispute with Ukraine just as Europe freezes under the lowest temperatures of the winter has once again highlighted the risks of a European energy crisis. Supplies of Russian gas have been cut to many countries in eastern Europe and the Balkans, with Bulgaria, Romania, Greece, Macedonia and Turkey all having their Ukraine-routed Russian gas supplies halted. Supplies to western Europe have also been disrupted, with Germany, France and Italy reporting sharp reductions in flow pressure.

Although Britain has so far not been affected, it is potentially at great risk of disruption. Many western European countries are insulated from supply disruptions by substantial gas stores. France and Germany, for instance, have gas storage capacity of over 20 per cent of their annual consumption. In contrast, the UK, the world's third largest gas market, has a storage capacity of just 4 per cent of annual consumption. This represents around 15 days of normal consumption, although the winter cold snaps could exhaust the stored gas in under five days.

Roland Wessel, chief executive of StarEnergy, highlights two reasons for the UK's comparative lack of storage capacity. Firstly, having enjoyed plentiful North Sea gas for decades, no one foresaw the rapid decline in reserves that will see the UK shift from being a net exporter to an importer of 50 per cent of its gas by 2010 and 80 per cent by 2018. Secondly, obtaining planning consent for gas storage facilities is a tortuous process. StarEnergy has been developing onshore storage since 2000, but has only completed one project due to the time required to obtain consents.

Mr Wessel fears that the UK will face a gas supply shortfall if it doesn't increase its storage capacity. "It's like watching a slow motion train wreck. It might happen this year, it might happen next year, but gas is a depleting resource and there will be a crisis at some stage," he warns.
Never fear, The Sun reports that Gordo has it sorted.
GIANT caves are to be built under the sea to store Britain’s gas.

PM Gordon Brown hopes they will protect us from Russian threats to turn off supply lines.

The 19 caverns 3,300ft under the bed of the Irish Sea off Blackpool will be 650ft high and 280ft wide — each big enough to house the resort’s famous Tower. They will be created by blasting out salt deposits.

With a combined capacity of 15,000 Albert Halls, they will hold 1.5billion cubic metres of gas — enough to keep the country going for five days. Britain currently only has around 15 days worth of gas stored, while France has 122 days.

Energy Secretary Ed Miliband said last night: “North Sea gas has done us proud for years but it’s important that we build more storage capacity for the future.”

Russian PM Vladimir Putin has been blamed for cutting ALL gas supplies through Ukraine.
Now I wonder who pushed that line to them? Peter Oborne would be impressed.

2 comments:

terry bull said...

"Roland Wessel, chief executive of StarEnergy, highlights two reasons for the UK's comparative lack of storage capacity. Firstly, having enjoyed plentiful North Sea gas for decades, no one foresaw the rapid decline in reserves that will see the UK shift from being a net exporter to an importer of 50 per cent of its gas by 2010 and 80 per cent by 2018. Secondly, obtaining planning consent for gas storage facilities is a tortuous process."

Tosh, I remember this debate 30 years ago.

At the time we also gas storage towers all over the Country.

Britain has played for short term profits over long term stategy all this time.

If those in power had cared then this energy rich Country would be laughing.

Mark Wadsworth said...

Terry, I'd hotly disagree that "Britain has played for short term profits".

The gas suppliers would be quite happy to build more gas storage** - it's in their interests to smoothe prices and be able to guarantee supply*, but the Greenies and NIMBYs put a kybosh on it - see comment from Star Energy re planning consents.

* Or else more and more will just switch to electricity. Y'see - market forces would sort this out.

** Why blast new holes? Don't we have coal mines we could use?