Yesterday, UK consumers were hit with the news of further increases to their gas and electricity bills, owing to the spiralling price of wholesale gas. About this there is little debate; this isn’t a case of the energy companies exploiting consumers. All around the world there is a voracious appetite for gas, and while the UK has been cushioned from rising prices for some time, the costs are starting to hit home.

For years the UK was an energy rich country, with extensive untapped oil and gas reserves in the North Sea, but since 1999, when production peaked, output has been falling at a steady rate of ten percent a year. Initially this was not too much of a problem. Energy exports had buoyed the UK economy since the 80’s, and the companies who’d reaped the rewards were now global players, who sourced a sizeable chunk of their supply from far afield. And even though the UK began to import gas in larger and larger quantities, fossil fuel derived energy was still relatively cheap and abundant.

The energy policy of the UK government relied on this. When the UK signed up to the Kyoto Protocol it wasn’t gambling with the affordability of domestic supply because the targets set were eminently achievable. The agreement didn’t stimulate a raft of renewable developments, as some people had hoped, but instead it further increased our dependence on gas.

A gas turbine releases less greenhouse gases per unit of energy than any other fossil fuel derived energy source. Additionally, gas fired power stations are relatively compact, cheap, and reliable. There is no need for fleets of trucks ferrying in fuel; it can all be piped in, and surplus kept in storage. In all respects, gas is a very attractive way to generate electricity.

So it comes as no surprise that the UK Government turned to gas in the face of increasing electricity demand. In most respects it was the perfect solution, particularly for politicians who were able to avoid the tough decisions involved with commissioning the next generation of nuclear power stations. But the increasing demand for gas ensured our dependence on imports, and married with the UK’s meagre gas storage capacity, makes the UK much more vulnerable to disruptions of supply.

But it’s only in the last few weeks where gas has become a real political hot house. Creeping energy prices were blamed on globalisation, but some of the blame lies with our own politicians with their short sighted energy policy. Any increase in the price of wholesale gas has the twin effects of increasing the cost to direct consumers of gas, and to consumers of electricity, due to the huge number of gas turbines which feed the grid.

The focus of energy policy has been to wean the western world off oil. But for the UK in particular, moving away from gas and towards nuclear is much more important. If we fail to do so, huge increases in energy bills may become all too familiar.

The UK’s Detrimental Dependence on Gas can be found on Scribd.