Like the rest of us here in Press and Journal country who are customers of Scottish Gas, I am still reeling from the news that my gas bill is to rocket a further 11.2% from next month. In fact I’m very angry indeed … like the rest of you.
However, as I’ve been reminded bit by bit since the bombshell was dropped on Thursday by the company which is part of British Gas which in turn is owned by Centrica the background is complex and there are other organisations whose actions must be taken into account and may be far more to blame.
Gas transportation pipelines in the UK are run by National Grid Transco and network charges vary across the country, with the regulator Ofgem policing the prices set. It is supposed to be all about reflecting the different costs of moving energy around the place …apparently.
There is no such thing as a universal franchise when it comes to transporting gas by pipeline or indeed electricity via the power grid. I suspect too that it will eventually disappear for postal deliveries, now that control and majority ownership of Royal Mail has been peddled off to the private sector. It will end up taking us for a ride like its competitors.
But wouldn’t you think that markets close to the point of North Sea gas supply would benefit from the lowest transportation charges … and not the highest?
Many P&J readers are familiar with the name St Fergus. I am of course talking about the huge gas terminal that resides on the Moray Firth coastline twixt Peterhead and Fraserburgh.
You either have to be in the offshore industry or a bit of an energy anorak … and I confess to the latter … to have any idea of just how strategic St Fergus is and how much of Britain’s gas landfalls just 35 miles from Aberdeen.
It’s about 20%.
UK North Sea and Norwegian gas from a sizeable number of oil and gasfields is conditioned to National Grid Transco specification and then fed into the domestic pipeline network. So enough gas passes Aberdeen’s doorstep every day to fuel the needs of several times the population of Scotland.
A very valuable bonus is that liquids stripped during the processing get sent down another pipeline to Mossmorran for turning into useful stuff. So that too goes past our doorstep.
Roughly, around 400,000 people live in the Scottish northeast; all or almost all located fewer than 40 miles from the terminal.
And yet we get charged through the nose for our gas … ripped off even.
So it seems that Scottish Gas isn’t the baddie in this scandalous situation. It appears to be Transco aided and abetted by Ofgem.
Government has much to answer for too. It should never have allowed the current charging system to develop. But London doesn’t give a fig.
We’ve become conditioned to higher prices because we’re told we’re a long way from the market (the UK is one of the most concentrated in the world by the way), there is an automatic price penalty nailed onto just about everything supplied to us.
But here we are, right on the doorstep of 20% of the gas coming ashore in Britain, yet we still get hammered.
That’s wrong!
