SCOxit: Putting English Gas O’an a Peep….

Posted on 14 Mar, 2018. Featured photo:CC BY-SA 3.0, Link

Read on to find out where these figures come from …..

There was a report last week, Perfect Storm for Energy Supplies as UK Runs on Empty about UK gas supplies running low in the Siberian cold snap and snow storms we’ve had. It’s in the Telegraph and has a lot of background detail (though they’ll only let you read it once before asking you to register).  In 2004 North Sea gas production meant that the UK was self-sufficient in gas. Since then our production has fallen and  we are now importing about 60% of our needs. And it’s not going to get any better : the National Grid estimates that we will be importing over 90% by 2040. The Guardian has a good article about this too though they are mostly concerned with the fact that a third of the imports are from Qatar.

Here are the facts.

In 2015, UK  production of natural gas, including natural gas liquids (NGL), was 429 Terawatt Hours (ref: Oil & Gas Stastistics) and in 2016 it had climbed to 463 (ref: UKGov Natural Gas, Ch4). This got me wondering how much if that comes from Scottish waters. I expect you see where I’m going with this!

How much natural gas does Scotland and rUK produce?

Overall, 96% of UK oil & liquid natural gas production comes from Scottish waters, so it’s very tempting to think that, post-SCOxit, the situation for England  will be hugely worse when it comes to them having to import  gas!

But then I remembered that the southern sector of the North Sea mostly has gas fields and this sector will be within English territorial waters. So the proportion of gas production from Scotland compared with rUK is much less, though it’s still more than half:

I’ve also done a bit of researching into other sources for how much gas is produced from the Southern North Sea . It’s all there in the Oil & Gas Authority Offshore Production figures, gas field by gas field, except you need to know which fields are in the south. Fortunately  Wikipedia has a list of North Sea oil and gas fields by sector. So by putting the two sets of info together I’ve got an estimate for gas production coming from English sector of the North Sea. It amounts to around 150 Terawatt Hours in 2017. This is gas from offshore North Sea. There is some onshore gas production and some from Irish Sea sector. That all fits with this 150 tWh estimate being a bit less than the 170 tWh that I calculated from the Oil & Gas Statistics.  

But the main point is that in 2016 we produced 60% of UK’s natural gas and  LNG, liquid natural gas. (Ref: Scottish Government Oil & Gas Statistics)  

How much natural gas does Scotland & rUK consume?

In 2016, UK consumed 891 tWh of natural gas. (Ref: UK Energy Brief, p23) Initially I assumed that 10% of that consumption happens in Scotland, based on us having 8% of the UK population plus a bit because it’s colder up here. But since then I’ve found these stats which show that in terms of gas meters, we only account for  4.5% of UK metered usage. 

However that doesn’t include other ways in which gas is used, the big one being power generation. Now Scotland is fast approaching self-sufficiency in electricity production from renewable sources, ie not from gas fuelled power stations. But let’s be generous and assume that Scotland still takes 8% of total UK gas usage, ie 71tWh. That means rUK consumption is 820 Terawatt Hours. If they produce 170 tWh and assuming that all imported gas, 418tWh,  will go to  rUk then they will still need a further 232 tWH supply to plug the production hole post-SCOxit.

Where do our gas imports come from?

It’s from these countries that we import gas to UK at present:

According to Reuters, Norway won’t be able to plug a post-SCOxit gap (Ref: Reuters, 2012) Another option is to import it from elsewhere in Europe but that in effect means becoming more reliant on  Russian gas.  The easiest option will be for rUK to buy it from Scotland. But can Scotland plug the rUK gas shortfall? No, not all of it.  We’re producing about 260 tWh and using about 71tWh. So we have a surplus of about 189 tWh. In the short -term rUK’s gas imports will look like this. 

OK, so that prompts another question. What’s the wholesale cost of natural gas? And how much income would come to Scotland from exporting 189 tWh of it to England? 

The wholesale gas market in Britain has one price for gas irrespective of where the gas comes from. This is called the National Balancing Point (NBP) price of gas and is usually quoted in price per therm of gas. (Ref: Ofgen)

Current price is around 50p/ therm (Ref: ERC Equipose) so that just needs converting to tWh….. OK, 1 tWh equals 34.1 million Therms. UK therms, of course, just in case you’re worried that I’m using the right units. So Scottish exports of 189 tWh of gas will sell for – Wait for it :

Now this exercise isn’t about me finding a new source of income to the Scottish Exchequer. Tax income from this £3billion is presumably already included in the GERS estimates under Oil & Gas Revenue. What this is about is showing that rUK will be dependent on us for its gas supply. There’s no way they can do without Scottish gas imports. So next time we hear some Unionist telling us that independence will put Scottish trade at risk cos they might just stop trading with us, just wait till they draw breath and say: 

Aye, right!! but whit aboot yon 180 terawatt hours of gas ye need frae us?