Russian gas is the least of our energy problems

There are a lot of reasons to worry about the UK and Russia getting increasingly stroppy with each other, but our lights and radiators going off isn’t one of them. In the grand scheme of things, we basically don’t use any Russian gas: less than 1% of our total energy demand.

The Prime Minister’s promise that the UK is ​“looking to other countries” beyond Russia to meet the UK’s energy demand isn’t going to be particularly tough to meet. After its ridiculed ban on some plastic 25 years into the future, perhaps this is another example of the law that says that the fervency with which the Government announces an environmental policy is inversely proportional to how difficult it will be to meet.

It is true that we’ve upped imports from Russia in recent months: from virtually zero, to a tiny bit. A new liquefied natural gas (LNG) export facility, Yamal, has just opened in Siberia, and has sent us three shipments of LNG so far in 2018. But it’s still small fry, with plenty of alternatives around. Not least from the US, which is also ramping up its LNG capacity; this does present the intriguing question of whether we want to jettison gas imports from a country run by a dangerous and reactionary leader just to replace them with those from another.

Now, Norway: that’s a different matter. Start picking a fight with Norway and our lights could flicker. Nearly 40% of the UK’s gas use comes to us from them via a pipeline, which is cheaper and easier to deal with than LNG. So if you see a sad looking Norwegian in the street, give them a cuddle or there’s a very real chance we could all end up shivering in the cold and dark.

Very few things electrify the commentariat like the dim prospect of ​“the lights going off” (or the heating running out). Politicians are terrified of it. Gobby climate sceptics in particular, historically suspicious of any form of energy that doesn’t involve setting fire to something, invoke it at the merest hint of something changing in how we generate power. Clearly, keeping the lights on matters. But despite the constant assurance from those monitoring the grid that all is fine, there’s still frothy mileage to be had by banging on about how things are not fine. (Things really are fine.)

The Prime Minister’s promise that the UK is ​“looking to other countries” beyond Russia to meet the UK’s energy demand isn’t going to be tough to meet.

If only there was the energy for actually using less gas in the first place. In the aftermath of the financial crisis a major campaign was launched for a ​“Green New Deal”. It would have put hundreds of thousands of people to work on green projects, including a major insulation programme to sort out the UK’s dangerously leaky housing stock. It didn’t happen, despite record low borrowing rates and an economy falling off a cliff. If we had have cracked on with, say, bringing all low-income households to Energy Performance Certificate Band C by 2025, and all other homes by 2035, we could have cut gas imports by a quarter. Oh, and it would have generated over 100,000 jobs. And cut the nation’s energy bill by £8.6 billion. And, in case we forget, slashed carbon emissions. Instead the UK’s already inadequate programme of grant support for home insulation has been steadily dismantled; ​“green crap”, thrown to the wind.

Which leaves us here. Not just worrying unduly about Russia’s gas, but also giving succour to those who would unleash fracking wholesale on the UK. Another red herring: ministers couldn’t do any more than they have to grease the wheels, but people flat out don’t want it, and it’s becoming a less and less politically – and financially – attractive proposition by the minute. Quietly, yet sensibly, the Government is sharply downgrading its prediction of how much fracking we’re likely to get: expect further downward revisions.

It’s worth noting that despite all this, the UK’s gas demand is falling anyway. Homes are becoming more energy efficient, principally down to improvements in the products that we use in them, thanks as much to rules from that pesky Europe as anything closer to home. And most dramatically of all, tumbling gas demand for electricity generation – as renewable energy continues to hack into its business model – is causing big trouble for industries that make turbines.

Meanwhile, climate change. The above mentioned Yamal was a few weeks ago the destination for the world’s first unassisted winter crossing of the Arctic by a tanker. Ice is supposed to make the Arctic impenetrable at this time of year; boats used to have to go around it. But increasingly hefty boats + increasingly slushy ice = a brand new trade route. An Arctic that’s melting because of our use of fossil fuels is now no impediment to shipping fossil fuels quickly across the world. Ironic: yes. Cheery: no. A reason to ramp up our efforts to get off gas – everyone’s gas – as soon as possible: you betcha.

You can hear me talking more about Russian gas in next week’s edition of NEF’s award-winning Weekly Economics Podcast.

Image: Terry Chapman (CC BY-NC-ND 2.0)