Submitted by: Felipe Bazon

Natural Gas or just simply gas is a fossil fuel found in oil fields, natural gas fields and also coal beds. Methane is the predominant gas but it also contains significant quantities of ethane, propane, butane, pentane and other gases.

It is approximated that the World’s natural gas reserves have a total of 175,400,000,000,000 cubic meters (estimate from January 2008), but numbers could be higher now that the US announced its gas reserves are 35 percent bigger than previously thought.

The UK is the fourth largest natural gas producer with more than 200 offshore fields, the majority of those fields are found in the Southern sector of the North Sea, but Central and Northern North Sea and the Irish fields also produce great volumes. Recent studies reveal that other reserves could lie in the North East Atlantic, West of Shetland.

The first company to discover natural gas in the North Sea was BP back in 1965, since then a total of 2,000 billion cubic meters of gas have been recovered and used in the UK for industrial and domestic needs.

Accounting for over 40 percent of the country’s total energy needs, natural gas is UK’s primary source of energy, it is used to generate electricity, provide heat and power to homes and industries all over the country.

Experts believe that since 2000, the year it peaked production, UK’s gas production is declining even though there some reserves yet to be explored. If it wasn’t for the harsh winter months the UK would be self sufficient in natural gas, which would then mean we would be self sufficient in energy also.

On average during the spring and summer months the consumption varies between 200 and 250 million cubic meters per day (mcm/d) while the average in winter is 350 mcm/d with the demand climbing to 400 450 mcm/d on very cold winter days, this is when UK’s supplies are supplemented by imports in addition to gas put into storage during the summer.

Oil and gas are often produced or extracted from the same reservoir, this correlation is what ties gas prices and oil prices together. But recently we have seen oil prices drop while gas prices rose which led to an increase in our energy bills.

This happened for two main reasons; firstly, 4 of the 6 biggest gas and electricity firms in the UK are European-owned which raises the question about continental energy companies “picking the pocket” of British consumers. British Gas, which is still UK-owned, was the only company to drop domestic and business gas prices over the past year.

The second reason is a combination of two factors, UK’s reliance on the gas market and the lack of storage capacity which reduces the possibilities of buying and storing gas when it is cheap.

Despite all that, according to the Department for Energy in average domestic and Business Gas Prices in Britain are cheaper than other European countries, however, electricity in Britain is 15 per cent more expensive that the average in Europe.

The average gas bill in the UK has hit 834 after increasing nearly 50 per cent during 2008 while joint bills (gas & electricity) climbed from 912 a year ago to 1,303.

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catalyst-commercial.co.uk/

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