Gas watchdog 'complacent'

13 April 2012

BRITAIN is in danger of severe gas shortages over the next few winters disrupting households and major industrial users and sending the price of gas soaring, a major Parliamentary report has warned.

The report by the House of Lords Committee on the European Union also accuses the British Government and the industry regulator Ofgem of complacency over the issue.

Speaking at the publication of Gas: Liberalised Markets and Security of Supply, committee chairman Lord Woolmer said: 'The committee is uneasy about and questions the UK gas market's ability to cover severe peak demand over the next two to three winters.'

Urging the Government to investigate Britain's capacity to cope with gas demand spikes as the country moves to become a net importer of gas, the committee decried the country's lack of gas storage facilities and warned of the potential for 'a national emergency' if Britain's existing gas terminals in Scotland and Norfolk were put out of action, for example, by a terrorist attack.

'While the Minister for Energy, Stephen Timms, tried to reassure the committee, we remain unconvinced,' said Woolmer, a Labour peer.

'Ofgem believes supplies are adequate except in extreme conditions. It is the extreme conditions we worry about.'

Ofgem is playing down the fears. A source at the regulator said: 'Forecasts released last month show that we have enough gas to ensure supplies to domestic customers would not be affected even if we met Siberian winter conditions.'

Ofgem is currently in the middle of a full-blown investigation into price-fixing in the industry.

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