This is Money: VIEWPOINT: Why we need to secure our gas supplies

The Government, with commendable urgency, has decided that gas is going to be vital to Britain’s future energy needs, at a time when nuclear and alternative energy sources retreat further into the distance. 

But if gas is going to be fundamental to these new plans to keep the lights on, the Coalition needs to ensure its approach is ‘joined up’ between gas and electricity.

Last week the new Secretary of State for Energy and Climate Change, Edward Davey, announced ministers would provide an update on gas generation in the autumn.

However his intervention came as a surprise to many industry experts as, until now, they may have relied on the view that ‘Britain does not need to worry about gas supplies as there is so much sloshing about in the world’.

However, two stark facts undermine this comforting thesis from last winter alone. Firstly, the National Grid has provided analysis showing that had we had colder winter weather in January and February, then gas supplies would have been extremely tight.

Secondly, as the BBC Today programme succinctly asked last June: ‘If there is so much gas in the world why are gas prices going through the roof?’ 

Some economists provide three cogent reasons for arguing that the global gas market will continue to deliver. 

First, gas shale (unconventional gas) will be ripped out of the earth in enough quantities to meet our demands. Secondly, the Russians together with central Asian countries such as Turkmenistan – the ‘Stans’ – will develop new gas fields and connecting pipelines. And third, new gas finds in the Indian Ocean (off Australia and East Africa) will drive LNG supplies.  MORE