Ukraine crisis could cause energy firms to go bust and cause cost of gas to more than double

Where does Britain get its gas from now? 

The UK largely sources its gas from fields in the North Sea and Irish sea, which along with other reserves in British waters provide around 50 percent of the country’s supply.

Another significant portion is made up of European imports, with a pipeline across the North Sea from Norway to the UK being by far the largest source – 20 percent – from the continent, with both The Netherlands and Belgium also supplying the UK with some of its gas.

Further afield, another 20 percent comes from Qatar and the wider Middle East. The US also supplies the UK with some Liquefied Natural Gas (LNG).

By contrast, gas imports from Russia make up only around five percent of the UK’s total usage. But Moscow has a grip on Europe’s gas supplies.

What’s happened to our North Sea supplies? 

Production in the North Sea has dwindled because older gas fields have become too expensive to run, and new ones have taken a long time to come on stream.

Last year about 48 per cent of UK gas came from the North Sea, down from 100 per cent in 2004, and this is projected to keep falling.

If the Government does not subsidise investment, then by 2025 domestic gas will only meet around one third of UK demand, making the country even more reliant on global markets.

Wayne Bryan, director of European Gas Research at Refinitiv, said: ‘There are untapped gas fields in the North Sea, but more investment is needed. There are three or four new gas fields starting early next year, but we’ve seen falling investment in the last 18 months.’

What’s happened to fracking? 

The Government halted fracking in England at the end of November 2019 after a series of confrontations between shale gas companies and local communities.

Supporters claim there is enough shale gas in the UK to support the country’s needs for decades.

Fracking has boomed in the US, making the country a powerhouse in global oil and gas production and securing its energy security. The technique, also known as hydraulic fracturing, involves pumping water and sand underground at high pressure to fracture the rock and release trapped oil and gas.

An active fracking site near Blackpool caused several earthquakes up to a magnitude of 2.9, which left houses in the local area shaking.

Opponents of fracking also complain that sites require significant infrastructure and sand and water have to be transported to and fro in large trucks leading to traffic, noise and disruption.

The Government took its decision after a scientific study found there would be ‘unacceptable’ consequences for those living near fracking sites. But it said it could agree to new sites if there was ‘compelling new evidence’ that fracking was safe.

Does the UK have enough gas storage? 

The UK has around 18 times less gas storage than European nations such as Italy, Germany and France, making the country extremely vulnerable to volatile prices.

A focus on renewables and developing better connectivity with neighbours such as Norway, to enable the UK to import gas effectively, meant little new storage has been built.

In fact the Rough storage facility off the Yorkshire coast, which accounted for two-thirds of our gas capacity, was retired in 2017. Experts said politicians believed that there was no need to spend vast sums on new storage plants because prices had been stable between the summer and winter for many years.

What about Shetland’s oil fields?

The UK could look to new oil fields – at the risk of being accused of climate hypocrisy.

The area to the west of the Shetland Islands has been named as ‘the place to be’ by energy experts advising firms on growing Britain’s oil output. Siccar Point Energy, backed by Shell, is preparing to start drilling in the Cambo oil field, situated 75 miles to the west of the Shetlands.

It is thought to contain 800 million barrels of oil, which will be released over the next 25 years.

The boss of SPE, Jonathan Roger, said: ‘The Cambo development supports the country’s energy transition, maintaining secure UK supply.’ His words appear prophetic against this week’s wild swings in gas prices, but more licences to drill oil will enrage environmental campaigners.

It could also be against the law as the Government has created legislation committing the country to a 78 per cent reduction in carbon emissions by 2035, and a 100 per cent reduction by 2050.