Energy: Gas

Lord Ezra Excerpts

Tuesday 29th May 2012 Lords Chamber

Asked By

[Lord Ezra]

To ask Her Majesty’s Government, in the light of their draft energy Bill, what steps they are taking to safeguard gas supplies in the short and medium term.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, eight minutes seems like a long time. The UK enjoys a domestic gas supply and extensive import infrastructure and storage. The Government have given Ofgem new powers to strengthen the commercial incentives for the gas market participants to meet their contractual supply obligations. We have also asked Ofgem to report on the need for further measures to improve gas security.

[Lord Ezra]

My Lords, it seems clear from the draft energy Bill that over the next few years, before new nuclear and fossil fuel plants with carbon capture and storage come into operation, we shall be increasingly dependent on gas supplies, as the Minister stated, particularly imports as our own resources from the North Sea diminish. Does the Minister agree that in those circumstances and in view of the fact that a number of major countries have indicated their intention to reduce their nuclear power generation, which will increase pressure on gas supplies, it is particularly urgent that we take additional measures to safeguard our supplies, given that rather seriously developing situation?

[Lord Marland]

I totally agree, although I am not sure I agree that there is a seriously developing situation. We now have 240 years of gas supply throughout the world, which is extremely encouraging. What is more, that gas supply is very liberally scattered across countries such as Mozambique, which has just discovered gas, and Algeria, which has discovered more shale gas, as has America. I do not hold with the last point made by the expert noble Lord.

However, clearly this is no time for complacency and this may be an opportunity for me to say that we have 150% of LNG capacity in this country above demand. We are increasing the amount of storage by 20%. We still have just under 50% of our own supply. We have had unprecedented demand for our new round of licences. So the situation is not as gloomy as the noble Lord indicated.