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A Diverse and Secure Supply of GasThe UK needs a reliable, diverse and secure supply of available energy and fuel. Britain has over many years relied upon natural gas from the UK Continental Shelf. UK Continental Shelf supplies are declining. It is estimated that by 2020, the UK could be importing up to 90% of its gas. At present the UK is importing 10% of its gas.
Why is this growing dependence on fuel so important?
Our security of supply is vulnerable to a number of global energy dynamics, many of which are beyond our influence. World energy demand is forecast to grow up to 50% by 2030. So supplies will be subject to even greater competition. Our increasing dependence on fossil fuel imports from Russia, Central Asia and the Middle East is a major energy challenge.
Delivery of these supplies could be seriously affected by unforeseen geopolitical events. We need to prepare and diversify our supply routes. Britain will be importing more gas in the future. Natural gas is a significant, cost-effective fossil fuel source for domestic use, industry, business and as a means of generating electricity.
This is also against a backdrop of significant hikes in wholesale gas prices since 2005. The current focus is on UK gas import, storage and distribution projects, such as at Milford Haven in Pembrokeshire, South Wales. Billions of pounds are being invested in these liquefied natural gas (LNG) projects.
There is also a new pipeline from Europe which will become a major supply source. However, over reliance on gas through this interconnector means UK gas prices would be vulnerable to higher transport prices and disruption across Europe. UK strategic gas reserves are only about 4% of annual gas consumption. Contrast this with 25% in France and an EU average of 14%. The Canatxx LNG proposal at Amlwch would play a strategic role in UK gas import diversification.
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