Energy Bill [HL]

Debate between Lord Davies of Oldham and Lord Oxburgh

Monday 31st January 2011 Grand Committee

[Lord Oxburgh]

My Lords, I briefly add my support to this amendment. The noble Lord, Lord O’Neill, is right that our dependence on gas will undoubtedly increase over the coming decades; as renewables and other sources of low-carbon energy come in, gas will be very important. It is equally true that the amount of storage that we could get away with when we had the North Sea producing at full rate could be relatively small, but it is also clear that the storage that we have today is inadequate. I will not go into the details, but something like 10 to 20 days’ supply is what we should be thinking of today. This will not happen without regulation of some kind. The supply companies have no incentive to do it, and what both industry and the consumer need is gas, not compensation.

[Lord Davies of Oldham]

My Lords, all that needs to be said about this amendment has been said by informed Members of the Committee. I congratulate the noble Lord, Lord Jenkin, on his amendment, which was supported so strongly by my noble friend Lord O’Neill, who also knows energy issues so well. It reinforces the case.

I am always worried when this issue of days crops up. The noble Lord, Lord Jenkin, indicated that France and Germany are different from the United Kingdom. They have been massively different historically because we have had our own indigenous resources. Our needs for storage are therefore very different from the needs of those and other countries in Europe. When I was charged with responding on energy matters for the previous Government, I always used to shudder when the “Today” programme would say, “The French have 90 days’ security of supply and we have four”. One felt the shudder go round the nation because of a colossal risk that we were all taking with energy. That is not so, and we must not spread alarm, but we must make provision for the future in a significantly changing situation, and we need to adjust to it. As the noble Lords, Lord Jenkin and Lord O’Neill, indicated, we are talking about a significant increase over present storage capacity. However, we are different from those other countries.

There were one or two occasions in the past when the United Kingdom’s position at the end of that supply line cost us and we paid higher prices for gas in some circumstances. One remembers that enormous row with the Germans, who had to go to the European Community over the extent to which German companies seemed rather better at availing themselves of the available gas from Russia than we were. So this is an immensely serious issue, and there is no doubt that storage is the key issue. We have a range of suppliers, but a range of suppliers is no good if we do not have the storage capacity to deal with potential interruptions. There will always be limited supplies as far as gas is concerned, and it is obviously the case that we have issues regarding our own supplies.

I hope the Minister will accept the crucial point made by the noble Lord, Lord Jenkin, in his amendment—that this is in addition to what is in place at the moment. It is an empowerment that we might need. We might not need it, but if we do not, then it will not be utilised. However, it would be remiss of us if we did not guarantee that this power was in this Energy Bill. I therefore hope the Minister, who I know has to wrestle with all sorts of difficulties in responding to even the most constructive of amendments, will appreciate that the Committee expects a positive response.