What They Don't Want You to Know About the Coming Oil Crisis
A spectre is haunting Europe - the spectre of an acute, civilisation-changing energy crisis. The latest wobble over disruptions to gas supplies from Russia is merely the latest in a series of reminders of how dependent our economies are on growing supplies of oil and gas. On Wednesday, Gazprom's deputy chairman was in London reassuring Britain that there would be no risk of disruption to British gas supplies in the fall-out from the ongoing spat between Russia and Ukraine over pricing. The very next day, temperatures in Moscow broke a 50-year record, plunging to minus 30C. Gas normally exported was diverted to the home front. Supplies to the West fell.
In December, Sir Digby Jones, director-general of the CBI, warned that any shortfall in gas could cause disaster for British industry. The problem, he said, was the likelihood - as forecast by the Met Office - of a particularly cold British winter. This would mean more gas burning in homes and power plants than our liberalised energy market - or its infrastructure - might be able to supply. There aren't enough pipelines from the continent to carry the imported gas that we need now that our North Sea production is dropping. Tankers that are supposed to be bringing liquefied natural gas (LNG) to the UK are instead following market forces and going to the US, where gas prices have rocketed even higher than they have here. Meanwhile, not enough gas has been stockpiled, because market forces don't favour that kind of thing in relatively warm years.
We shouldn't panic, insisted energy minister Malcolm Wicks, because British Gas is being very grown up about it, and anyway all this will be sorted out by 2007 when a new pipeline and more LNG plants come on stream. Sceptics pointed out that our gas reserves were down to 11 days, compared with an average of 55 on the Continent. That was before the concerns about Russian supplies. If the thermometers fall in the UK it is still quite possible that UK firms may have to stop using gas for one day a week, or even that the suppliers will also have to introduce rolling power cuts by postcode.
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