OPINION - If Britain wants to avoid energy-driven inflation again, we need to invest in natural gas

Centrica Storage's Rough platform (Centrica)
Centrica Storage's Rough platform (Centrica)

At the House of Commons on Monday evening, as dusk fell, there was little need for a reminder that winter will soon be upon us. Energy, which has never been far from the news bulletins these past two years, will return to the forefront, even more so now that the Israel-Hamas war threatens to spread, endangering fuel supplies.

It was apposite that an event was held to launch a report produced under the auspices of the Henry Jackson Society, called Natural Gas and the Energy Trilemma — Energy Security, Energy Affordability and Energy Sustainability in the United Kingdom.

Its author, Dr Helena Ivanov, said how Russia’s invasion of Ukraine revealed long-standing structural problems in the UK supply system. We need a better national energy policy, pursuing the “trilemma” of security, affordability and sustainability.

Russia's invasion of Ukraine had a huge impact on energy prices (AFP via Getty Images)
Russia's invasion of Ukraine had a huge impact on energy prices (AFP via Getty Images)

Despite not being as dependent on Russia as some of its European peers, the UK was nevertheless heavily impacted by the regional supply shock. According to the Office for National Statistics, the price of electricity in the UK rose by 66.7 per cent and gas by 129.4 per cent in the 12 months to January 2023. Energy bills further ratcheted up inflationary pressures in goods and services and were a core driver behind the cost-of-living crisis.

The report describes how Vladimir Putin’s actions towards import-dependent European states that were occurring even before the Russian attack, “exposed the West’s own fears about their own economic vulnerabilities. Conversely, Western countries that have significantly developed their own domestic gas resources, such as the United States and Australia, have been able to more effectively manage the price rises and the impact on their consumers and local industries”.

Bob Seely MP and the Henry Jackson Society’s Marc Sidwell spoke. The main speaker was Dick Stoneburner.

Stoneburner chairs Tamboran Resources, the publicly listed natural gas company based in Australia. Now in his late sixties, Stoneburner clearly knows how to make money but more importantly knows where to source fuel.

We heard how Stoneburner is on a mission to boost Britain’s stock of LNG and to make it more secure. He wants to reduce our overdependence on Norway and, more to the point, autocratic, volatile, not-always-friendly states like Qatar, guiding us to democratic, more consistently commonly aligned LNG exporters such as the US and Australia.

“Britain should be doing what it can to expedite increased domestic production, importing more and making better use of its underground storage capability,” he says. Currently, the Rough facility in the North Sea, 18 miles off East Yorkshire, can hold up to 54 billion cubic feet of gas. It could store 100 billion cubic feet. “More storage is necessary,” Stoneburner says, “to meet the peaks and troughs of demand that are hugely challenging.”

Britain does not think ahead

Dick Stoneburner

In Australia, Tamboran is developing the vast Beetaloo Basin in the Northern Territory. Covering 28,000 square kilometres, this remote area, 500km southeast of Darwin, is reckoned to hold 500 trillion cubic square feet of gas. Overall, Beetaloo is thought to be capable of meeting Australia’s energy requirements 1,000 times over, which means there is plenty available for export.

Regardless of the distance between Britain and Australia, sending it here, claims Stoneburner, is “entirely affordable”. We should stop, he argues, tying ourselves to unpredictable, despotic regimes and plan for the future. “Britain does not think ahead.”

Producing our own natural gas and importing from Australia and the US helps solve the trilemma — it’s secure, affordable and sustainable. Diversifying away from places such as Qatar, improving our own domestic supply, focusing on gas with a lower CO2 content or which produces zero emissions, and boosting the UK’s gas storage and importing facilities, says Stoneburner, will transform our energy outlook.

In preparing the report, public opinion was surveyed across the UK. People’s views on gas were examined, how informed they are about the current energy system and how they would balance the three components of the energy trilemma. The polling found that British voters strongly support the use of gas, as well as an expanded role for diversifying gas supply within the nation’s energy mix.

In Terrace Dining Room B, overlooking the Thames as darkness descended, Stoneburner’s words most definitely did not constitute hot air. And you cannot always say that about addresses within Parliament.

Chris Blackhurst is a former editor of The Independent