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My Question during the Statement on the UK Gas Market
September 20, 2021 36 Comments
My Question to the Secretary of State on the issue of gas storage capacity:
Be interesting to know if you had that discussion with the minister – He clearly needs some help.
With a very cold winter ahead, there is a need for direct action now, and as you stated, Sir JR, that means we must have spare capacity of of proven energy products,
MiC September 20, 2021
You can either make storage of gas a legal requirement of operating a gas supply business, or the State can build its own capacity and sell it to the industry as and when needed.
The first ain’t very neo”liberal” and the second is collectivism.
Take your pick, or put up with the country running out of gas, as it did PPE, lorry drivers, and all the other consequences of leaving everything to the market and to the private sector.
Peter2 September 20, 2021
The market will soon adjust.
Stare socialism never responds fast enough.
NotA# September 20, 2021
@Peter2 and there is the problem, this shower wants everyone to believe only they alone can do anything. So everyone else is inhibited
MiC September 21, 2021
It’s had decades to adjust.
It “adjusted” to increase profits – its entire reason for being – by shutting down storage, which incurred costs to maintain.
Actually supplying gas to the people, and making that secure, are overheads that it would rather not have, so long as it can keep billing them.
Comparable countries on the Mainland have typically ~100TWh of storage. The UK has about 8.
Thank Tory ideology for this.
Peter2 September 21, 2021
There is a price cap in the market.
Until that is removed the market is unable to adjust.
I thought you didn’t want fossil fuels used?
Now you want unlimited gas supplies.
dixie September 21, 2021
How very absolutist of you, you are clearly into long words beginning with D – dirigisme, dictatorship, despotism…
A third way is via contractual SLA.
PS: In case you forget our supplies of PEP were in no way helped by the hijacking of legally contracted shipments by the French authorities.
MiC September 21, 2021
SLAs are within the first way that I mentioned.
And what authority makes sure and certifies that the necessary contingency facilities exist and are in a serviceable state? The industry itself, as evaluated the fire resistance of cladding, for building materials manufacturers for instance?
Heaven forfend, that the public could ever be allowed to employ and to facilitate its own experts and inspectors to protect them, what?
dixie September 21, 2021
No they aren’t. I am suggesting a requirement within a commercial contract which could be met in a number of ways and recourse in the event of failure is straightforward with a move to alternate suppliers. You are demanding a civil legal method specifying one approach which is a job creation scheme for administrators and lawyers where failure is swept under the carpet and/or rewarded with promotion.
MiC September 21, 2021
A contract is private law.
You’re splitting hairs.
Peter2 September 21, 2021
Wrong MiC
It isn’t private law.
A contract can be between public entities and private organisations too.
Contract law applies to two or more parties.
Whoever they are.
dixie September 22, 2021
Nope – you are demanding storage as a specific solution, I am not.
Requirements within contracts can vary between contracts but won’t between civil laws.
At the end you want civil servants to chose, dictate and control how a solution is provided when they aren’t even clear about the problem.
Sakara Gold September 20, 2021
Good question and a reasonable reply – with the bonus of an offer to discuss the matter in person. I noticed that your honourable friends were listening intently to what you had to say. Perhaps you would care to share with us the results of your discussions with SoS Business, Energy and Industrial Strategy Kwarteng in due course?
MiC September 20, 2021
There may well be quite a few constructive voices from the House.
However, I don’t think that there will be any from Tufton Street, which seems to me to be from where the Tories have received most of their policy ideas to date, and why we are in yet another mess.
Mark September 21, 2021
If only. They seem to ignore GWPF studiously.
X-Tory September 20, 2021
I see that Kwarteng refused to actually answer your question. Clearly he has NO intention of increasing storage supply. He did, however, agree to meet you, so perhaps you can ask him about this again, in not such diplomatic language. By failing to increase storage supply Kwarteng is an enemy of the British people.
MiC September 20, 2021
But if he had proposed that before this crisis, in order to avert it, then many like you would have screeched “Statist”, “Marxist”, “Communist” etc.
Wouldn’t you?
Incidentally, I see that “Great British Railways” are going to outsource the supply of most of their workforce to…the private sector, and are not going to ban them from using ZHCs to do so.
So, plenty of cushy, remunerative jobs for the needless ex-public school middle men again – and they will be mainly men – and plenty of grinding insecurity for the guys of both sexes doing the real stuff as ever.
And the traveller can pick up the tab for all that extra expense.
Peter2 September 20, 2021
MiC
Why do you think X Tory (and others) would say those things if the minister had proposed an increase in gas storage?
X-Tory September 21, 2021
Indeed Peter, the idea that I would denounce that which I clearly support is too stupid for words. But that is why I never respond to MiC or Andy: they are vert stupid marxist trolls, who only come here to try to waste our time and annoy us. The best policy is to ignore them.
Governments clearly have a role to play in society, or we would not have courts, police, military forces, etc. And energy policy is also an area where the government must clearly ensure that the public is adequately provided for. It is a matter of national security – the very essence of the state’s responsibility.
dixie September 21, 2021
Quite. It would be interesting to know what SLA is in place with the suppliers, what obligation there is to guarantee minimum levels of supply.
Nig l September 20, 2021
Yes he didn’t answer the salient point, indeed ignored completely the point we have a lot less capacity than France for instance. Why. Well we can guess. He didn’t want to acknowledge the failure of government to plan strategically.
The short term spike is a red herring. As we are so dependent on other nations, we should have more storage as a matter of course.
Classic dispatch box evasion.
Everhopeful September 20, 2021
Gosh…a minister who is prepared to listen!
JR has his ear.
Very good intervention/interjection (?) I thought.
So nice to see MPs back in Parliament without ghastly masks.
DOM September 20, 2021
Higher gas prices are a welcoming sight for any politician who encourages public policy infused by climate change ideology. Higher prices encourage lower consumption thereby saving scarce resources and a more intelligent use of scarce resources. Yes, some will suffer but that’s the price we must pay for voters who continue to elect ghost parties led by the likes of Johnson and Starmer
It seems Mr Redwood and his backbenchers want the proverbial cake and they want to heartily eat it. They support a leader who has embraced a brutal form of politics across all areas of human life but suddenly feel compelled to express concerns when reality rears its ugly head and they feel slightly politically exposed
Again, we need sincere, pragmatic politicians with practical solutions not ideologues or career politicians who think they can keep their head down hoping their hypocrisy won’t be noticed
Jim Whitehead September 21, 2021
+1
dixie September 20, 2021
Excellent question, I heard you raise this along with other sensible concerns and observations on the Mike Graham show this morning.
I am very unimpressed with Mt Kwertang’s reply and the government position it represents.
Are they really concerned with a rash of panic buying or hoarding of gas and electricity?
Are they really so unprepared for any length of disruption at all?
Fedupsoutherner September 20, 2021
Great stuff John. Let’s hope you can convey some common sense with your meeting. You truly are one of our most hard working politicians.
Mike Wilson September 20, 2021
I would love, just once, to hear an MP really criticise his own government. Enough of the politeness. It is time to be frank. ‘We’ve had 11 years in power and it is not good enough that we effectively rely on just-in-time delivery of gas to heat the homes of the people of this country. Instead of wasting enormous sums of money on the white elephant that is HS2 – divert the resources to building more gas storage now. And, why are we so dependent on imports when we still have viable gas fields here? It is time for the government to get a grip and stop expecting things to happen by magic.’
Well, that’s what I would say. They could withdraw the whip. Who cares? You’ve been at it long enough not to have to worry about your career. Give it to them straight!
John September 21, 2021
Can you just kill off the CO2 “Climate Emergency” BS.
There is no real scientific evidene for this.
It is the only political construct.
Why are they not providing the raw data of their claims ?
John September 21, 2021
Off topic, but why we are forced by law, to pay for a “independent” media organisation, which makes up unproven crap about co2 , to destroy the UK with green BS.
After the Electricity Supply Industry was ‘unbundled’ by privatisation, from 1/4/1989 the only entity that can be held responsible for the overall Integrity of Electricity Delivery is the incumbent Government.
The Gas Board clearly recognised that UK Continental Shelf Methane would not last for ever and therefore developed the mechanism to replace it. Which got up to a production scale system but the project was cancelled by the Government in 1992.
Just as I, as ‘registrar’ for the Electricity System Operator, was dealing with the applications for the new CCGT Generators which would increase the Gas Burn by 50% and advance the demise of UKCS Gas. CCGT Dash for Gas followed the 1991 EEC Directive 148 which repealed 1975 404 which had restricted the use of Gas for Power Generation. (Leon Brittan as EEC Competition Commissioner in 91)
Thus we are trying to resurrect the BGL-HiCom Gasifier-Methanator at scale as it can be fed mainly by Biomass and Trash. Producing Low/Negative carbon Methane to fire High efficiency, High Flexibility Distributed Hybrid energy Production. To properly accommodate high penetration of variable renewable generation by ensuring a stable and secure Electricity system. Also dealing with the serious Thermal Energy waste from the use of Condensing Turbine-Alternators.
Future and Fast Actions and Strategy papers linked on my Webspace
Regards, Steve,
Stephen Browning BSc(Hons) MIEEE MIET
Electricity Delivery and Energy Modelling Specialist
Electricity Efficiency http://www.eleceffic.com
Retired,
Ex CEGB and National Grid UK
GB Electricity Operations – Generation, Demand, Fuel and Market modelling
Interviewed on Farage, adviser and expert Clive Moffat pointed out that BEIS attitudes towards gas have been hostile for some years. They think they can phase it out. Noone is going to invest when the government is threatening to close you down.
In more practical consideration, new storage is going to take quite some time to build, whether it is leaching out salt caverns or refurbishing Rough. Centrica’s £1.6bn refurbishment proposal entails a CFD guarantee for the project, and is angled fashionably at hydrogen, where the government seems to be keen to spray money like confetti. Given that Rough was closed originally in stages because it was leaking, I’m not sure that the reservoir is really suited to hydrogen anyway – an issue for reservoir engineers who know the geology. Hydrogen proof wells and pipelines doubtless contribute to the cost. However, you can only store a third as much energy as hydrogen in the same volume used for methane. Converting storage to hydrogen is a way of shrinking it. If you were making hydrogen by SMR you would choose to store the methane feedstock rather than the hydrogen output.
A fundamental problem is that storage must pay for itself via the difference in value of the gas stored and gas redelivered after costs for pumping etc. Storage designed to meet an extreme winter peak when spot prices surge can generate enough margin. But if you want more storage its chances of earning a return diminish.
We have used the production flexibility of the giant stores called North Sea fields as free storage, and supplemented that with ramping up LNG imports. We need a clear understanding of those capabilities in the North Sea, including forward forecasts. The LNG aspect is more difficult to analyse. It will clearly become more important unless we are able to develop shale gas.
Mark September 22, 2021
I read that at its peak, Rough was capable of storing 41TWh of methane. The conversion to hydrogen as planned would reduce that to just 9TWh. It was capable of meeting about 10% of UK demand in a cold spell, and lasting about 2 months from full to empty at maximum drawdown rates.
Will in Hampshire September 21, 2021
I haven’t followed the gas industry closely in recent years but am now intrigued by this price spike. Is there anyone here who could provide a brief summary of Centrica’s reasoning in choosing to close the Rough storage facility, and the government’s reasoning in allowing it?
Mark September 22, 2021
There is an extensive paper on Rough from the Competition and Markets Authority which considered the issues here:
September 20, 2021
Be interesting to know if you had that discussion with the minister – He clearly needs some help.
With a very cold winter ahead, there is a need for direct action now, and as you stated, Sir JR, that means we must have spare capacity of of proven energy products,
September 20, 2021
You can either make storage of gas a legal requirement of operating a gas supply business, or the State can build its own capacity and sell it to the industry as and when needed.
The first ain’t very neo”liberal” and the second is collectivism.
Take your pick, or put up with the country running out of gas, as it did PPE, lorry drivers, and all the other consequences of leaving everything to the market and to the private sector.
September 20, 2021
The market will soon adjust.
Stare socialism never responds fast enough.
September 20, 2021
@Peter2 and there is the problem, this shower wants everyone to believe only they alone can do anything. So everyone else is inhibited
September 21, 2021
It’s had decades to adjust.
It “adjusted” to increase profits – its entire reason for being – by shutting down storage, which incurred costs to maintain.
Actually supplying gas to the people, and making that secure, are overheads that it would rather not have, so long as it can keep billing them.
Comparable countries on the Mainland have typically ~100TWh of storage. The UK has about 8.
Thank Tory ideology for this.
September 21, 2021
There is a price cap in the market.
Until that is removed the market is unable to adjust.
I thought you didn’t want fossil fuels used?
Now you want unlimited gas supplies.
September 21, 2021
How very absolutist of you, you are clearly into long words beginning with D – dirigisme, dictatorship, despotism…
A third way is via contractual SLA.
PS: In case you forget our supplies of PEP were in no way helped by the hijacking of legally contracted shipments by the French authorities.
September 21, 2021
SLAs are within the first way that I mentioned.
And what authority makes sure and certifies that the necessary contingency facilities exist and are in a serviceable state? The industry itself, as evaluated the fire resistance of cladding, for building materials manufacturers for instance?
Heaven forfend, that the public could ever be allowed to employ and to facilitate its own experts and inspectors to protect them, what?
September 21, 2021
No they aren’t. I am suggesting a requirement within a commercial contract which could be met in a number of ways and recourse in the event of failure is straightforward with a move to alternate suppliers. You are demanding a civil legal method specifying one approach which is a job creation scheme for administrators and lawyers where failure is swept under the carpet and/or rewarded with promotion.
September 21, 2021
A contract is private law.
You’re splitting hairs.
September 21, 2021
Wrong MiC
It isn’t private law.
A contract can be between public entities and private organisations too.
Contract law applies to two or more parties.
Whoever they are.
September 22, 2021
Nope – you are demanding storage as a specific solution, I am not.
Requirements within contracts can vary between contracts but won’t between civil laws.
At the end you want civil servants to chose, dictate and control how a solution is provided when they aren’t even clear about the problem.
September 20, 2021
Good question and a reasonable reply – with the bonus of an offer to discuss the matter in person. I noticed that your honourable friends were listening intently to what you had to say. Perhaps you would care to share with us the results of your discussions with SoS Business, Energy and Industrial Strategy Kwarteng in due course?
September 20, 2021
There may well be quite a few constructive voices from the House.
However, I don’t think that there will be any from Tufton Street, which seems to me to be from where the Tories have received most of their policy ideas to date, and why we are in yet another mess.
September 21, 2021
If only. They seem to ignore GWPF studiously.
September 20, 2021
I see that Kwarteng refused to actually answer your question. Clearly he has NO intention of increasing storage supply. He did, however, agree to meet you, so perhaps you can ask him about this again, in not such diplomatic language. By failing to increase storage supply Kwarteng is an enemy of the British people.
September 20, 2021
But if he had proposed that before this crisis, in order to avert it, then many like you would have screeched “Statist”, “Marxist”, “Communist” etc.
Wouldn’t you?
Incidentally, I see that “Great British Railways” are going to outsource the supply of most of their workforce to…the private sector, and are not going to ban them from using ZHCs to do so.
So, plenty of cushy, remunerative jobs for the needless ex-public school middle men again – and they will be mainly men – and plenty of grinding insecurity for the guys of both sexes doing the real stuff as ever.
And the traveller can pick up the tab for all that extra expense.
September 20, 2021
MiC
Why do you think X Tory (and others) would say those things if the minister had proposed an increase in gas storage?
September 21, 2021
Indeed Peter, the idea that I would denounce that which I clearly support is too stupid for words. But that is why I never respond to MiC or Andy: they are vert stupid marxist trolls, who only come here to try to waste our time and annoy us. The best policy is to ignore them.
Governments clearly have a role to play in society, or we would not have courts, police, military forces, etc. And energy policy is also an area where the government must clearly ensure that the public is adequately provided for. It is a matter of national security – the very essence of the state’s responsibility.
September 21, 2021
Quite. It would be interesting to know what SLA is in place with the suppliers, what obligation there is to guarantee minimum levels of supply.
September 20, 2021
Yes he didn’t answer the salient point, indeed ignored completely the point we have a lot less capacity than France for instance. Why. Well we can guess. He didn’t want to acknowledge the failure of government to plan strategically.
The short term spike is a red herring. As we are so dependent on other nations, we should have more storage as a matter of course.
Classic dispatch box evasion.
September 20, 2021
Gosh…a minister who is prepared to listen!
JR has his ear.
Very good intervention/interjection (?) I thought.
So nice to see MPs back in Parliament without ghastly masks.
September 20, 2021
Higher gas prices are a welcoming sight for any politician who encourages public policy infused by climate change ideology. Higher prices encourage lower consumption thereby saving scarce resources and a more intelligent use of scarce resources. Yes, some will suffer but that’s the price we must pay for voters who continue to elect ghost parties led by the likes of Johnson and Starmer
It seems Mr Redwood and his backbenchers want the proverbial cake and they want to heartily eat it. They support a leader who has embraced a brutal form of politics across all areas of human life but suddenly feel compelled to express concerns when reality rears its ugly head and they feel slightly politically exposed
Again, we need sincere, pragmatic politicians with practical solutions not ideologues or career politicians who think they can keep their head down hoping their hypocrisy won’t be noticed
September 21, 2021
+1
September 20, 2021
Excellent question, I heard you raise this along with other sensible concerns and observations on the Mike Graham show this morning.
I am very unimpressed with Mt Kwertang’s reply and the government position it represents.
Are they really concerned with a rash of panic buying or hoarding of gas and electricity?
Are they really so unprepared for any length of disruption at all?
September 20, 2021
Great stuff John. Let’s hope you can convey some common sense with your meeting. You truly are one of our most hard working politicians.
September 20, 2021
I would love, just once, to hear an MP really criticise his own government. Enough of the politeness. It is time to be frank. ‘We’ve had 11 years in power and it is not good enough that we effectively rely on just-in-time delivery of gas to heat the homes of the people of this country. Instead of wasting enormous sums of money on the white elephant that is HS2 – divert the resources to building more gas storage now. And, why are we so dependent on imports when we still have viable gas fields here? It is time for the government to get a grip and stop expecting things to happen by magic.’
Well, that’s what I would say. They could withdraw the whip. Who cares? You’ve been at it long enough not to have to worry about your career. Give it to them straight!
September 21, 2021
Can you just kill off the CO2 “Climate Emergency” BS.
There is no real scientific evidene for this.
It is the only political construct.
Why are they not providing the raw data of their claims ?
September 21, 2021
Off topic, but why we are forced by law, to pay for a “independent” media organisation, which makes up unproven crap about co2 , to destroy the UK with green BS.
September 21, 2021
Good question and Kwarteng professed agreement. It will be useful to learn the outcome of his offer for further discussion with you JR.
September 21, 2021
After the Electricity Supply Industry was ‘unbundled’ by privatisation, from 1/4/1989 the only entity that can be held responsible for the overall Integrity of Electricity Delivery is the incumbent Government.
The Gas Board clearly recognised that UK Continental Shelf Methane would not last for ever and therefore developed the mechanism to replace it. Which got up to a production scale system but the project was cancelled by the Government in 1992.
Just as I, as ‘registrar’ for the Electricity System Operator, was dealing with the applications for the new CCGT Generators which would increase the Gas Burn by 50% and advance the demise of UKCS Gas. CCGT Dash for Gas followed the 1991 EEC Directive 148 which repealed 1975 404 which had restricted the use of Gas for Power Generation. (Leon Brittan as EEC Competition Commissioner in 91)
Thus we are trying to resurrect the BGL-HiCom Gasifier-Methanator at scale as it can be fed mainly by Biomass and Trash. Producing Low/Negative carbon Methane to fire High efficiency, High Flexibility Distributed Hybrid energy Production. To properly accommodate high penetration of variable renewable generation by ensuring a stable and secure Electricity system. Also dealing with the serious Thermal Energy waste from the use of Condensing Turbine-Alternators.
Future and Fast Actions and Strategy papers linked on my Webspace
Regards, Steve,
Stephen Browning BSc(Hons) MIEEE MIET
Electricity Delivery and Energy Modelling Specialist
Electricity Efficiency
http://www.eleceffic.com
Retired,
Ex CEGB and National Grid UK
GB Electricity Operations – Generation, Demand, Fuel and Market modelling
September 21, 2021
P.S
As regards the Gas Wholesale price hikes the Oxford Energy Group Gas Review gives a good overview. As noted by others it looks like we have a bit of a ‘Cold War’.
https://www.oxfordenergy.org/publications/quarterly-gas-review-issue-14/
Also of interest as regards Global Warming, their Critique of the Chinese 14th Five Year Plan
https://www.oxfordenergy.org/wpcms/wp-content/uploads/2021/03/Key-issues-for-Chinas-14th-Five-Year-Plan.pdf
Regards
Steve
September 21, 2021
Interviewed on Farage, adviser and expert Clive Moffat pointed out that BEIS attitudes towards gas have been hostile for some years. They think they can phase it out. Noone is going to invest when the government is threatening to close you down.
In more practical consideration, new storage is going to take quite some time to build, whether it is leaching out salt caverns or refurbishing Rough. Centrica’s £1.6bn refurbishment proposal entails a CFD guarantee for the project, and is angled fashionably at hydrogen, where the government seems to be keen to spray money like confetti. Given that Rough was closed originally in stages because it was leaking, I’m not sure that the reservoir is really suited to hydrogen anyway – an issue for reservoir engineers who know the geology. Hydrogen proof wells and pipelines doubtless contribute to the cost. However, you can only store a third as much energy as hydrogen in the same volume used for methane. Converting storage to hydrogen is a way of shrinking it. If you were making hydrogen by SMR you would choose to store the methane feedstock rather than the hydrogen output.
A fundamental problem is that storage must pay for itself via the difference in value of the gas stored and gas redelivered after costs for pumping etc. Storage designed to meet an extreme winter peak when spot prices surge can generate enough margin. But if you want more storage its chances of earning a return diminish.
We have used the production flexibility of the giant stores called North Sea fields as free storage, and supplemented that with ramping up LNG imports. We need a clear understanding of those capabilities in the North Sea, including forward forecasts. The LNG aspect is more difficult to analyse. It will clearly become more important unless we are able to develop shale gas.
September 22, 2021
I read that at its peak, Rough was capable of storing 41TWh of methane. The conversion to hydrogen as planned would reduce that to just 9TWh. It was capable of meeting about 10% of UK demand in a cold spell, and lasting about 2 months from full to empty at maximum drawdown rates.
September 21, 2021
I haven’t followed the gas industry closely in recent years but am now intrigued by this price spike. Is there anyone here who could provide a brief summary of Centrica’s reasoning in choosing to close the Rough storage facility, and the government’s reasoning in allowing it?
September 22, 2021
There is an extensive paper on Rough from the Competition and Markets Authority which considered the issues here:
https://assets.publishing.service.gov.uk/media/571a2323e5274a201400000f/Rough_gas_storage_undertakings_review_final_report.pdf