ALEX BRUMMER: Complacent. Inept. A gas shortage is a searing indictment of our ministers and mandarins

This week, a friend with a PhD in logistics and a senior role in the energy industry drew my attention to a series of graphs on the website of National Grid — the company responsible for keeping our homes, factories and other commercial buildings supplied with power.

The message from the charts was crystal clear. With the 'Beast from the East' and Storm Emma descending on the British Isles with huge ferocity, demand for energy was soaring and supplies of natural gas, one of the most important fuels for electricity generation in Britain, was running perilously low.

Yesterday, National Grid warned that the country may not have enough gas to meet demand because of the freezing temperatures.

The immediate effect has been that the price of gas on the wholesale market has soared to 190 pence per therm — a 12-year high — compared with just 56p per therm during a relatively mild January.

National Grid warned that the country may not have enough gas to meet demand because of the weather 

National Grid warned that the country may not have enough gas to meet demand because of the weather 

Vulnerable

Those rocketing wholesale prices will quickly translate into sharply higher domestic tariffs. It means that consumers already worried about the cost of keeping their heating on during this worsening cold snap face even higher bills.

The profoundly disturbing fact is that we in Britain are particularly vulnerable to supply problems when demand for gas is high.

Even though 38 per cent of our gas supplies comes from North Sea, we are also highly dependent on gas from other countries, brought to us through a network of pipelines from across the Continent.

And since those other countries have been hit by the same devastating cold air from Siberia, they are having to cope with their own increase in domestic demand — which means we are last in the pipeline for extra supplies.

But what makes our situation so much worse is the shockingly cavalier decision in August last year to permanently shut down Britain's biggest and only significant storage facility for gas at Rough on the Yorkshire coast. The result is that we have no capacity to hold gas reserves for precisely such a crisis as the current one.

The operators of the 32-year-old storage facility, British Gas owner Centrica, said when they closed it that the condition of the Rough facility had deteriorated and restoring it would be uneconomic.

Centrica's boss, the veteran oil industry titan Iain Conn, told me he could not justify pouring in the hundreds of millions of pounds it would cost. He would have to recoup the refurbishment costs by charging more for gas released from storage, but the availability of cheap gas around the world meant that the big energy suppliers would not be willing to pay for it.

You can sort of understand his reasoning on commercial grounds: he is, after all, the chief executive of a major public company who needed to balance the interests of shareholders against those of consumers.

Yet the decision has proved catastrophic in terms of our energy security — which is so vital, in turn, to our economic and national security.

Even though 38 per cent of our gas supplies comes from North Sea, we are also highly dependent on gas from other countries

Even though 38 per cent of our gas supplies comes from North Sea, we are also highly dependent on gas from other countries

With no major storage facility, Britain is now hopelessly vulnerable not only to a terrible weather event like the one we are now experiencing, but also to anything that disrupts one of the vital gas pipelines from the Continent as well as to global events that upset the energy markets, such as war in the Middle East.

Before it was closed down, the facility at Rough accounted for 70 pc of our storage capacity and could provide 10pc of daily peak energy demand for up to three months.

It is unconscionable that the Government has allowed this strategically vital asset to vanish. Centrica, with substantial government support, should have been forced to refurbish Rough and arguably to construct several more state-of-the-art facilities.

In 2015, Holland completed a brand new storage facility with enough capacity to keep the Netherlands supplied with gas for up to 97 days of disrupted production.

Whitehall's complacency over the closure of Rough was — and remains — shameful. In a response that was — even by its own standards — as inept as it was negligent, the Department for Business, Energy and Industrial Strategy declared it was unworried.

It noted that the UK 'has highly diverse and flexible sources of gas supply through domestic production and extensive import capacity protecting our supply and keeping prices down'. It claimed that the Rough closure would make no difference to current gas prices because the market had anticipated its closure.

Every element of that statement has proved to be balderdash. As we have seen this week, prices on the wholesale market have soared because we have no storage facility to speak of, while the 'diverse sources of supply' trumpeted by the energy department have been shown to be an illusion dreamt up by complacent ministers and incompetent civil servants in Whitehall.

Stand-off

When a crisis hits, policy-makers often turn to that favourite cliche, describing the situation as 'a perfect storm' to deflect blame from themselves. They are trying to say it is a once-in-a-generation event.

Yet in the energy market, our recent history is littered with crises, from the miners' strike blackouts of 1972 to those in the Great Storm of 1987 and the stand-off between Russia and Georgia a decade ago, which saw large swathes of Europe and Britain cut off from vital energy supplies.

With the 'Beast from the East' and Storm Emma descending on the British Isles with huge ferocity, demand for energy was soaring and supplies of natural gas was running perilously low

With the 'Beast from the East' and Storm Emma descending on the British Isles with huge ferocity, demand for energy was soaring and supplies of natural gas was running perilously low

As recently as December last year, the closure (because of a hairline crack) of the 235-mile Forties pipeline which links 85 oil and gas fields in the North Sea as well as several Norwegian fields exposed the vulnerability of Britain's energy supplies to unexpected events.

The resulting reduction in gas supplies meant our industries' needs were not met and the closure was responsible for a downward revision in the nation's total output in the final quarter of 2017.

This week, the Beast from the East appears to have affected critical pipelines from Norway, which supplies 42 per cent of our gas. Back-up supplies through Dutch and Belgian pipelines have been held up, too.

Obsession

True, the UK has long-term contracts for the supply of Liquid Natural Gas (LNG) from Qatar, which provides around 4 per cent of our needs, but in spite of heavy investment in new processing plants at the Isle of Grain in Kent, LNG cannot possibly fill the gap during the kind of a weather-induced calamity we are facing.

On top of all this, there is the Government's obsession with clean energy, which in the short term has driven up the demand for gas following the closure of coal-fired power stations. The shortfall we face is a salutary warning of the danger of policymakers rushing pell-mell to wean the nation off carbon fuels long before we have the capacity to produce sufficient energy from sources such as wind farms and nuclear power stations.

The first act of National Grid when the power runs out this week will be to cut back supplies to industry, delivering a huge blow to the nation's output at a cost of tens, if not hundreds of billions of pounds.

It is a shocking indictment of the way successive governments have failed miserably to secure the nation's energy supplies as a result of short-term thinking and neglect.

For those avoidable mistakes, households face soaring bills and many old people — frightened to turn up the heat — will freeze in their homes this winter.

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