Britain exporting gas cheaper than it is importing it

Ofgem warns of UK energy security being 'undermined'

There are fears that household bills may continue to be inflated because of the fact that Britain is exporting gas that is fetching lower prices abroad and is importing gas from Qatar that is more expensive.

An analysis by the Guardian, conducted jointly with Greenpeace, revealed these figures, which Ofgem, the energy watchdog, believe may be undermining UK energy security because of this distortion in the market. The analysis examined the gas interconnector between the UK and Belgium; a major part of the country’s gas infrastructure, as it has the capacity to carry a fifth of the UK’s gas in winter. However, the report discovered that on over 40% of the days between December 2011 and October 2012, the gas was being exported to the continent despite the wholesale gas price in the UK being higher. Over this period, it is estimated that Britain exported over 15 times more gas than it imported.

Prices may continued to rise if market distortion isn't resolved, warn Ofgem

(Image source - www.offshoreenergytoday.com)

Analysis on monthly government data from Revenue and Customs showed that the UK was importing large amounts of Qatari gas, despite it costing up to 5% more than gas exported to the continent. Ofgem said ‘It is vital that gas on these links flows in line with market signals, to ensure security of supply for customers. However, initial analysis suggests the links are not always being used efficiently. On behalf of consumers, we are looking at all the evidence to establish the facts’. 

This news is the latest in a series of recent reports looking into the ‘dark and murky world’ (as described by Leila Dean of Greenpeace), of the UK’s gas market. In November, there were suggestions that, following the price hikes by the major energy companies, that gas prices were purposely being manipulated.