Gas (Supply and Demand)

Part of the debate – in the House of Commons at 3:51 pm on 14th March 2006.

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Photo of Alan Johnson Alan Johnson Secretary of State for Trade and Industry 3:51 pm, 14th March 2006

I agree that the current situation shows that the gas balancing system works. I disagree with the hon. Gentleman's comments about our presidency. The major issue is still that, with prices yesterday running at their highest level ever, we were not getting the gas through the interconnector that we should have been getting. Some of that was caused by the strike in France, but the primary cause was that in the European Union, principle has not been put into practice. During our presidency—as we have explained on many occasions, most recently in the debate in this Chamber in January—my hon. Friend the Minister for Energy was instrumental in convincing the commissioner and the European Union to open not just one but three lines of inquiry, one of which will result in anti-trust cases against certain EU member states within a matter of weeks. That is just on the basis of the interim report from Commissioner Kroes. My hon. Friend the Minister for Energy is at the Energy Council in Brussels even as we speak, seeking to ensure that we maintain that momentum. I agree that we have not changed the situation in Europe overnight, nor did we change it during the six months of our presidency, but we have put in place measures that will lead to liberalisation across Europe.

As for our storage capacity being puny, 300 million cu m a day is coming into this country from the North sea, which is 75 per cent. of our supply. Rough has the capacity to introduce 10 per cent. of our daily demand in winter and, because total capacity is 3,340 million cu m and we can bring it in at a rate of 43 million cu m a day, we have 77 days of supply in Rough. There was an explosion at the Rough facility, which is close to my constituency, and I agree that there has been a combination of events, but we are not in an emergency. Our market has benefited UK consumers, both industrial and domestic, for many years. The worst thing the Government could do would be to step into the market with our size 16 hobnail boots. That happened in Canada and the Canadians have regretted it ever since.