We must act now to avoid an emergency this winter
The incoming Prime Minister has to make foreign policy a priority in order to secure our needs
The immediate policy imperative for Britain is to pull out every stop to help Germany and central Europe avert an energy disaster this winter. It is a matter of economic and strategic self-defence.
We endured bread rationing after the Second World War from 1946 to 1948 to prevent a hunger crisis on the Continent. That sacrifice is praised today as far-sighted and enlightened statecraft, one that countered Stalin’s subversion campaign and helped to rebuild Europe on better foundations.
Total energy solidarity over the next six to nine months is necessary to preserve the united front behind Ukraine, and to defeat a hostile axis of revanchist dictatorships.
The UK has subcontracted its gas storage to Germany and the Netherlands. We rely on draw-downs from the Continental reserve to get us through a polar vortex.
The Government seems to be taking these flows for granted, even if Putin cuts off the gas entirely, as he certainly will at the moment of maximum political and psychological leverage.
It is unreasonable to expect European states in distress to share precious inventories when they are under a rationing regime, while the UK is making no serious effort to curtail consumption.
Right now the UK is acting as the EU’S offshore terminal for liquefied natural gas (LNG) from Qatar and the US, and the National Grid has requested emergency permission to raise pipeline pressure, allowing it to boost flows to the Netherlands by 34pc over the late summer months. It is G7 democratic solidarity at its best. It has nothing to do with whether the UK is a member of the EU, and should not be mixed up with Brexit emotions.
The UK has also been sending three gigawatts of electricity to the Continent over the summer. This helps to cover the shortfall in France, where half the nuclear fleet is out of action.
My advice to Liz Truss is to start drawing up a plan immediately before moving into Downing Street, otherwise events will imperil her first six months in office.
It should be a foreign policy plan
– not a technical contingency plan by mid-level officials – and should entail parallel British preparations for what the French now call ‘energy sobriety’.
But it should include a nationwide push to reduce consumption of gas and electricity, preferably by exhortation rather than coercion.
The Government’s fond assumption is that the UK can always obtain supplies of global LNG whatever happens, even if it has to pay a stiff price, but that is not what its own contingency document suggested in 2017. The report, A Review of Gas Security, explored what would happen under a variety of shocks. The details of the text were more disturbing than the bromide conclusions at the top.
Its worst-case scenario entailed a double-shock: the closure of a British LNG terminal at the same time as a sustained and total cut-off in Russian gas to Europe – “an extremely rare event” in their geopolitical assessment.
Such a mix would lead to “high levels of unmet energy”, amounting to 17pc to 23pc of annual demand. It would last through the winter and into April. Cuts would have to be “involuntary”, a euphemism for industrial closures and episodic black-outs. What the report did not do was to combine three external shocks: a Russian cut-off, a global LNG supply crunch, and zero winter flows through the interconnectors. This triple whammy is no longer a remote tail-risk.
China has overtaken Japan to become the world’s top importer of LNG. This has been disguised over recent months by Covid lockdowns and the slump in housing construction. But Beijing is currently stepping up stimulus for infrastructure projects, setting off what is likely to be another of China’s energy-devouring cyclical boomlets.
Long-term contracts are doubleedged for buyers since natural gas will be rendered uncompetitive by renewables before the maturities expire. My suggestion to Liz Truss is to announce that the UK will start taking measures as an explicit act of solidarity with Europe, and that it will take action on the lowest-hanging fruit immediately. We are told that the gas storage cavern at Rough ‘may’ be reopened this winter, boosting our gas reserve from five to fourteen days.
‘May’? It ‘must’ be reopened as a sine qua non of national security.
Why was no request made to EDF to keep the two nuclears at Hinkley B in service for another two years? A delay was among the options presented in the Government’s ‘worst-case’ modelling for a crisis this winter. Where was the debate in this country? Why are electricians and engineers not being mobilised in a state-backed national push to turn down the flow temperatures (different from thermostat) on home gas boilers?
We have known for a year that Vladimir Putin has been weaponising gas, though many refused to see it. We also know that he will use energy leverage this autumn to try to break Europe’s political will and force a settlement on his imperial terms.
There has been lack of grip bordering on insouciance at Cabinet level over the implications for energy supply and the economy. It has been a tale of drift, culminating in the total vacuum and paralysis of the leadership contest.
Everything possible must now be done to uphold the integrity of the pan-european energy system. It is how we secure our own winter needs in an emergency. And it is how a good sovereign neighbour should behave.