In recent months there has been a good deal of discussion about the future role of gas in the UK’s energy system. The debate has been prompted by numerous government policy statements and reports, worries about the imminent closure of coal-fired power stations and the need to import expensive liquefied natural gas (LNG), and by the growing controversy surrounding the prospect of shale gas.
Professor of Global Energy at Warwick Business School, Mike Bradshaw debates in the HHIC Journal whether this activity has created any greater certainty about the future role of gas in the UK.
Bradshaw believes that for the moment supplies from Norway are seen as secure and could even increase in the near future to maximise the infrastructure that has been put in place, however, there in uncertainty into the 2020s as the fields supplying the UK pipelines decline, production moves further north and Norway prioritises Continental European markets.
He said:
“The hope is that by then the UK will have access to indigenous shale gas production. But the scale and pace of UK shale gas development is itself far from certain and it would be imprudent to assume that it will compensate for declining conventional domestic gas production. Equally, domestic biogas can help to sustain indigenous production, but the reality is that the UK’s gas import dependence will continue to increase through the remainder of this decade and will remain high thereafter.
The key uncertainty is the level of future gas demand and so the absolute amount of gas the UK industry will need to source from external markets. Whatever the volumes, UK policy makers and the suppliers and consumers of natural gas now need to pay far more attention to developments in the European gas market and the global LNG market than they have in the past.
“The reality is that certainty about future gas demand in the UK will remain elusive. This is because it is dependent on the wider success or failure of the government’s energy strategy. All of the current indications are that key elements of that strategy will be delivered late and some possibly not at all.
Thus, we will have need of more gas for longer and we should now be planning for that eventuality, rather than assuming that it will always be available as the default position. The physical availability of gas will probably not be the issue, the price that consumers have to secure that gas may well be.”
