Chris O’Shea, the chief executive of British Gas-owning Centrica, tells an eye-popping tale from his early career in the North Sea offshore industry. During a routine underwater inspection in the 1990s, an unexploded bomb from the second world war was discovered close to the pipeline carrying oil ashore from the large Nelson field.
Happily, the danger was dealt with. The point of the story is only that risks to critical pieces of infrastructure can come from unexpected sources. Stuff can happen.
It is something to bear in mind when reading about the “emerging risk to gas supply security”, as detailed in an assessment last week by the National Energy System Operator (Neso). This 50-page report was released on the afternoon of budget day. It was almost as if the government, or its in-house system operator, didn’t want the central finding to make the front pages.
In short, Neso found there is an “emerging” risk of Britain running out of gas if an important piece of kit were to be out of action at a bad moment. It modelled five “pathways” for gas demand out to 2030 and 2035 and tested against a prolonged spell of very cold weather. Here is the key sentence: “In the unlikely event of the loss of the single largest piece of gas infrastructure, gas supply falls short of demand for all pathways in 2030-31.”
What does gas supply falling short of demand mean? Emergency measures would first involve telling factories and power plants to stop using gas. In extreme scenarios, households could be affected as well – there wouldn’t be enough gas for everyone with a gas boiler to heat their homes during cold weather. The latter, you’d think, could be a government-toppling event.
There is no reason to doubt the report’s assessment that the nightmare is “unlikely”. But nor is it hard to imagine how one big risk could materialise. The most critical piece of kit – the 725-mile underwater Langeled pipeline from Norway – may also be the most vulnerable. The threat is not second world war bombs but state-sponsored sabotage.
In security circles, they are currently obsessing over the spate of ships dragging their anchors to damage undersea telecoms cables in the Baltic Sea and elsewhere. And remember that underwater explosions took out the Nord Stream 2 pipeline from Russia to Germany in 2022. Repairing a disabled Langeled would take weeks or months.
As you’d expect, the energy minister Michael Shanks reacted to the Neso report by promising to do “whatever it takes” to ensure secure gas supplies. A problem, though, is none of the report’s suggested “mitigations” sounds quick or cheap.
For all the talk about the UK’s “diverse” supplies of gas, the list is not, actually, very long. In essence, there is: domestic North Sea production; Norwegian pipeline imports; imports of liquefied natural gas (LNG) via ship, mainly from Qatar and the US; gas interconnectors to Belgium and the Netherlands (where the gas can flow in both directions); and storage.
On domestic supplies, the chancellor Rachel Reeves’s decision to maintain the energy profits levy, AKA “the windfall tax”, until 2030 will probably only accelerate the decline of the UK production (never mind that Ed Miliband’s energy department is slightly more relaxed about in-field drilling). Norway may be at the limit of what it can supply to Britain.
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LNG import terminals are expensive and the UK only has three. Expanding interconnector capacity with the continent does not happen overnight. On storage, Centrica isn’t injecting gas this winter into Rough, its big offshore storage facility, because it doesn’t have a financial support deal with government, which currently takes the view that the numbers don’t stack up. O’Shea has said Centrica would invest £2bn in Rough – in return for guaranteed returns. More onshore storage, in salt caverns, could be ordered – but, again, that requires early planning.
But one or more of those options has to be chosen because Shanks’s remarks about “redoubling our efforts to decarbonise” are mostly irrelevant in this context. Even the government’s Clean Power 2030 plan will retain the current 35 gigawatts of gas power generating capacity because it will be needed as a backup in precisely the circumstances Neso modelled – cold and still winter periods when wind and solar aren’t generating.
An “emerging risk” is one that gets bigger the longer it is left unaddressed. So one can welcome the appearance of this first-of-its-kind report. It is useful that the government will have to respond formally. But one can also despair that the facts in the report have been well understood for years and been ignored by successive governments. Now there is non-negligible risk of a serious gas crisis in five years’ time. This was not a report to bury on budget day.
