Greg Clark says Government complacent on gas storage

The House of Commons had Energy and Climate Change questions yesterday. Shadow Secretary of State Greg Clark was very concerned about Britain's gas reserves:

"On 20 February this year—two weeks ago—Britain hit a new low, with just four days-worth of gas in storage in the reserve. Does the Minister consider that an acceptable margin for safety?

Mr. O'Brien: It is not about how many days worth of gas there are. The amount of gas in storage at a given point cannot meaningfully be assessed in terms of days. Stored gas is not used on its own to meet UK demand in any way. The North sea gas reserves put the UK in a position unlike that of other countries. Yes, we need gas storage, and we will need to increase the amount of storage as our imports increase, but we still have a substantial amount of gas coming from the North sea. That means that we do not need quite the amount of storage capacity that other countries do, although we will need to improve gas storage capacity in future as North sea gas depletes, and imports rise.

Greg Clark: That is a remarkably complacent answer, because every country in the world is content to denote their storage in days—apart from Britain, apparently. For the second time in only four winters, we almost ran out of gas, and almost did not have sufficient gas to meet demand. According to a written answer that the Minister gave me only this morning, only the depressed state of the economy, due to the recession, saved us from running out. Even the official regulator thinks that we do not have enough storage. In the Energy and Climate Change Committee, my hon. Friend the Member for Bromsgrove (Miss Kirkbride) asked the regulator whether he thought that enough storage was being planned, and he said:

“I am not happy to talk about this...we were hoping”—

that storage would have doubled in the past five years—

“and we have barely moved.”

Given that record, do we have to hope that this Government run out of time before Britain runs out of gas?

Mr. O'Brien: That is a stunning statement the week after Centrica announced a £1.2 billion proposal to create the second-biggest gas storage facility at the old gas field in Baird in the North sea. We hope that that will come on stream from 2013. There are 17 other projects, too. That is one of the main areas for us, and the Government are setting out their priority of bringing gas storage on board. Let me be clear. The hon. Gentleman’s claims that we were suddenly about to run out of gas take no account of the fact that the Norwegian gas fields were pumping vast amounts of imports into the country. We were therefore able to manage successfully and capably the issues that arose as a result of the recent cold snap and the Russia-Ukraine dispute."

Other Conservative members asked interesting questions too.

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Stephen Crabb calls for clear Government message on gas storage

Preseli Pembrokeshire MP Stephen Crabb secured a Westminster Hall debate for Tuesday, on the subject of gas storage in the UK. Herewith some highlights from his speech:

"I am grateful to have secured this short but timely debate on the adequacy of UK gas storage. We are experiencing another winter of tight gas supply with supplies being drawn down heavily in the face of a colder than normal winter, and European supply disruptions caused by the dispute between Russia and Ukraine. Rather perversely, it is only because of a sharp drop in industrial demand, due to the recession, that the UK has avoided severe difficulties in meeting peak gas demand this year.

...

By 2010, gas imports could be meeting up to one third or more of the UK’s total annual gas demand, perhaps rising to around 80 per cent. by 2020. That represents a huge change from our position just five years ago when we were a net exporter of gas. I do not share the populist panic about imported energy, and I do not believe that energy independence is achievable or even a necessary or desirable goal in an age when international energy markets are increasingly interlinked. There is an unquestionable economic loss to the UK as our domestic oil and gas production declines and that is significant, but I shall not lose sleep about energy security and energy imports as long as we have a diversity of reliable suppliers with proven long-term reserves alongside as strong a domestic component as possible with diversity of infrastructure for the import, transmission and distribution of energy, including a measure of spare capacity and, crucially, an adequate stock of stored energy to serve as a buffer against supply disruptions.

The UK has significant stored capacity of oil and gas. We have around 80 days’ consumption of oil and petroleum products in stock and around 90 days’ consumption of coal. There is no common stocking obligation on those types of fuel, but it is interesting that there is around three months of coverage for both. Britain’s natural gas storage capacity is around 4.3 billion cu m, which represents no more than 15 days’ supply.

...

The UK needs more storage capacity, and the Government must provide a clearer message on how much new capacity is needed, where it will come from, when it will be delivered, and what can be done to mitigate the effects if it does not come on stream in a timely way."

John Bowis opposes EU ban on incandescent light bulbs

John Bowis, who speaks on health and the environment for the Conservatives in the European Parliament, has put out a press release about incandescent light bulbs. A European Commission committee has proposed phasing out such bulbs by 2012, and now the Council of Ministers and European Parliament will consider the matter.

The Migraine Action Association has warned that an energy-saving bulb's flicker rate can trigger attacks. There are also concerns because the energy-saving bulbs (which use 80 per cent less electricity for the same amount of light) contain mercury.

Mr Bowis comments:

"Energy-saving light bulbs are clearly good for the environment and we welcome the Commission's move to reduce the use of incandescent bulbs.

However, the Commission and the British Government must be careful not to cause pain and disability in the process.

There are a number of conditions, including epilepsy, lupus, migraine, and autism, which can be adversely affected by fluorescent lighting.

We must make sure that, at the very least, incandescent bulbs continue to be readily available and that no total ban is contemplated before adequate alternatives have been researched and brought into production. This is one of those occasions where we must strike the right balance between the environment and health."

It is perhaps a bit prissy to point out that we should always strike such a balance. But it seems fair to say that the case for insisting on energy-saving bulbs has not yet been made. Why not leave it up to the individual for now?

Personally I like rooms to be as light as possible. It has a massive impact on my mood, and the reality is that I consider this a priority. Consequently I buy normal bulbs. But what do readers think - can an energy-saving bulb really shine as brightly - whilst saving me money, protecting the environment and not affecting my health?

Tom Greeves

Conservative MEPS pleased with deal on car emissions

Conservatives in the European Parliament have indicated their pleasure with a deal MEPs struck with the Council of Ministers on CO2 emissions from cars.

Legislation that will go before the European Parliament this month will now require carmakers to reduce emissions to 130g per KM between 2012 and 2015. The original proposal was that it should be by 2012. There will also be a long-term target of 95g by 2020.

There will be a clause for "niche manufacturers" like Jaguar-Land Rover, who will have to reduce their emissions by more than an average manufacturer, "but not by the crippling levels that would have been foreseen", according to the press release from Martin Callanan. There will be an exemption for LTI, who make the London black taxi cab.

Mr Callanan further commented:

"The deal we have struck represents the best of both worlds. We have shown that we can encourage car manufacturers to go green by including incentives for investment in clean technology, but without driving them out of business.

We have recognised that manufacturers cannot develop new cars and technologies overnight, particularly given the huge trials they face during the downturn.

It was particularly important that we put in place special conditions for Jaguar-Land Rover and Black cabs. These companies will still have to do more than most, but because of their niche model ranges, this law would have caused them severe problems.

We will now ask all sides to agree to this deal."

Greg Clark asks why gas and electricity are so expensive

Energy and Climate Change Secretary Ed Miliband and his Shadow Greg Clark enjoyed another outing yesterday, for oral questions. However, it was with a junior minister, Mike O'Brien, that Dr Clark clashed most notably:

"Greg Clark (Tunbridge Wells) (Con): Why do gas and electricity cost more in Britain than on the continent?

Mr. O'Brien: All the way through the early part of this decade, we have had much lower gas prices than most of the continent, because the market was able to operate very effectively to ensure that prices fell. Europe operates using a different system. It operates long-term and often not very transparent deals, particularly in the business sector. Deals that can last for some years are signed, holding down some of those prices. When our market falls and we get the benefits, Europe does not. When the market starts to rise and our prices rise, it takes some time before Europe renegotiates some of its long-term contracts. We are pressing, with the EU Commission, to get more transparency into some of those deals and to get a more effective market operating in Europe. We want to ensure that we all get the benefit of a more successful and competitive market, because we all want to pay the lowest price that we reasonably can.

Greg Clark: Mr. Speaker, did you know that the Minister’s new Department has 900 policy advisers? Do you think that he might have done better with that, given that level of advice? One of the reasons why British customers suffer price spikes is that, due to the absence of a serious energy policy over the past 10 years, we have only 14 days worth of gas storage compared with 99 days worth in Germany and 122 days worth in France. A further reason is the structure of the market. Four weeks ago—not three, as the Minister said—the Secretary of State stood at that Dispatch Box and said that he had given the big six energy companies four weeks to take urgent action or else he would do so. A month later, there has been no change and no action—he has fallen at the first fence. Will the Minister act to stop prepayment meters being used to make the poor subsidise the well-off?

Mr. O'Brien: Well, the hon. Gentleman knows very well that Ofgem has undertaken a consultation and has said that the energy companies must respond by December. In case he has missed it—I know that he is not that well informed —[Interruption.] He starts running down the officials who advise us, but they cannot respond to him; if he wants to start having a go at people, we can all play games like that.

On prepayment meters, the energy companies have been given until December, and Ofgem has said that it wants a response and action. We have said that we are prepared to legislate if the energy companies do not respond on prepayment meters. It certainly is the case that we have ensured that our energy market is able to operate more effectively than those in Europe. In recent years, we have been able to keep our average energy prices lower, and we now need to ensure that we have greater transparency in the broader EU market."

Beginning with a short, broadbrush question and following up with a detailed supplementary is a good tactic. And Dr Clark is also to be commended for raising an issue other than climate change. Wherever we stand on the issue, we can hopefully agree that there is more to his brief than that one subject. Energy costs are hugely important to people at the best of times - in these times they have taken on a new urgency.