Energy Markets

Lord Reid of Cardowan Excerpts

Monday 9th March 2026 Lords Chamber

[Lord Whitehead (Lab)]

The noble Lord talked about the CBAM and ammonia production in one and a half breaths. On the question of the CBAM, it is a very important part of the low-carbon economy in terms of making sure that there is not carbon seepage from our economy elsewhere and that the low-carbon industry that is being developed is not undermined by rogue dumping and various other things in this state from elsewhere. The CBAM is certainly an important part of the green transition, not an impediment to it.

As far as ammonia is concerned, I am sure the noble Lord knows that there are ways to produce it for the UK market other than relying on gas for it. Certainly, low-carbon ammonia can be quite a substantial chemical for the future. That is, of course, not something that will happen overnight but, clearly, as the noble Lord said, we have no ammonia production in this country on a high-carbon basis, so perhaps we should encourage it on a much lower-carbon basis.

[Lord Reid of Cardowan (Lab)]

My Lords, in the context of media reports over the weekend, can the Minister tell us the most recent assessment that has been made of the adequacy of the UK’s current gas storage capacity to meet demand in the event of a prolonged supply disruption and the absence of an imminent return to a negotiated settlement, which all of us would of course like to see but none of us really expects in the near future? What confidence does the Minister have in that assessment? Finally, can he tell us what recent discussions have taken place with operators of the Rough gas storage facility on its future capacity and role in the UK’s energy security strategy?

[Lord Whitehead (Lab)]

I thank my noble friend for that question, because he alluded to one of the key points about the future of gas storage—the Rough field—and what will happen with that in the future. He will know that there were suggestions that the Rough field should be used for hydrogen storage. That is now not happening, and the Rough field is available for quite a large expansion in overall gas storage.

Having said that, we do not have enormous amounts of gas storage. On the other hand, we do have access to very secure forms of gas, albeit traded on the international markets, with the pipeline interconnectors that we have, the Norwegian gas supply that is freely available to us and, as I mentioned, with the development of LPG terminals in this country, we have the ability to land large amounts of LPG and to store it as well.

My assessment of gas security would be that, although we do not have a huge amount of gas storage, we have, collectively, a pretty secure gas security arrangement. I just drop in the point that we are producing increasing amounts of biogas in the UK, which is beginning to come to a few percentage parts of the gas supply overall. Again, that is a homegrown, secure way of doing it. That I think means that, although we will have a future management issue of declining gas in the system—and there is much less gas going into the system now than a few years ago—we nevertheless have a pretty secure gas arrangement in the UK.