There is no written correspondence between the government and the Competition and Markets Authority (CMA) on the decision to close the UK’s biggest gas storage site in 2017, which has since been reopened to tackle the energy crisis.
The revelation that high-level discussions around mothballing the facility were only carried out verbally, comes amid warnings from the National Grid about blackouts over the winter and concern about the country’s energy security following Russia’s invasion of Ukraine.
Centrica - the owner of British Gas - closed the Rough gas storage off the Yorkshire coast in the North Sea five years ago, saying it did not make financial sense to pay for costly repairs. The government did not offer financial support, saying it was “content” to see it close.
The CMA approved the closure after consulting with the Department for Business, Energy and Industrial Strategy (BEIS), which said “in its view, the UK had sufficient security of gas supply even in the absence of Rough”. At the time analysts criticised this, saying it could lead to “volatile” gas prices.
But as gas prices have soared this year, and supply from Russia to Europe has been cut off following the war, Centrica decided to reopen Rough after negotiating a contract with the government.
NationalWorld submitted a Freedom of Information request to the CMA for written correspondence with the government, to explore why it was “content” to see the site mothballed in the first place.
And that revealed that conversations between the CMA and BEIS, regarding the closure of the UK’s biggest gas storage facility, were all conducted verbally rather than in writing.
This means there is no written correspondence for government assurances that the UK “had sufficient security of gas supply even in the absence of Rough”, and that it was “content” to see the storage facility close.
The CMA report, on the decision to approve the closure, stated: “BEIS told us that, in its view, the UK had sufficient security of gas supply even in the absence of Rough. It told us that it was aware that refurbishment of Rough was not economically viable in current market conditions and that, when set against a possible call on public funds in order to make such a refurbishment viable, it was content to see Rough close as a gas storage facility.”
In response to the FoI request, the CMA said: “Following appropriate enquiries, including searches of paper and electronic records, it has been established that there is no written correspondence such as emails or letters … of the CMA’s final decision on the Rough gas storage undertakings.”
The CMA said notes were taken based on verbal conversations with BEIS. NationalWorld has requested copies of those. While a government source said that the closure of Rough was a commercial decision, and not made by BEIS.
Cabinet Office guidance states that “the default method for departments to respond to correspondence should also be via email”.
Labour said this revelation raises questions about the commitment to energy security, and the closure of the Rough gas storage facility in 2017 showed “blatant disregard from this government to protect our energy supply and keep bills down”.
Ed Miliband, the shadow secretary for climate change and net zero, said: “We are facing an energy crisis because of 12 years of Conservative failure on energy security - on renewables, on storage, on insulation and on regulating the market.
“Shutting down the Rough gas storage facility and plummeting the UK into close to zero storage stocks in 2017 shows the blatant disregard from this government to protect our energy supply and keep bills down.
"Whilst the Conservatives protect the big oil and gas companies, Labour stands up for the working people of Britain. Only Labour can give Britain the fresh start it needs.”
The National Grid has said previously that gas storage is a problem for the UK, with energy supplies tight. Centrica said this week that the reopening of the site would allow for “cheaper gas” to be stored and help “reduce or stabilise costs” for households, which have soared in recent months. There is also the hope that Rough, which at just 20% capacity will add about 50% to the amount of gas that the UK can store at one time, will help prevent possible power cuts.
Centrica boss Chris O’Shea said: “I’m delighted that we have managed to return Rough to storage operations for this winter following a substantial investment in engineering modifications. In the short term, we think Rough can help our energy system by storing natural gas when there is a surplus and producing this gas when the country needs it during cold snaps and peak demand.
“Rough is not a silver bullet for energy security, but it is a key part of a range of steps which can be taken to help the UK this winter.”
Across Europe, many storage sites have stored up in recent months to ensure lights can stay on this winter. But in comparison to its allies, the UK has bad storage supply - with only enough saved up for nine days’ use, compared to 89 days in Germany, 103 days in France and 123 days in the Netherlands.
Mr O’Shea said he also sees a longer-term future for the Rough gas storage facility where it could help store hydrogen, a potentially key fuel as industries attempt to decarbonise alongside the UK’s commitment to Net Zero by 2050.
He said: “Our long-term aim remains to turn the Rough field into the world’s biggest methane and hydrogen storage facility, bolstering the UK’s energy security, delivering a net zero electricity system by 2035, decarbonising the UK’s industrial clusters, such as the Humber region by 2040, and helping the UK economy by returning to being a net exporter of energy.”
After the re-opening, Business and Energy Secretary Grant Shapps said: “While Britain already has secure and diverse energy supplies, this new government will leave no stone unturned when it comes to bolstering our energy security.
“The reopening of the Rough gas storage facility ahead of the winter will further strengthen the UK’s energy resilience and make us less susceptible to Putin’s manipulation of global gas supplies.”
Responding to NationalWorld, a CMA spokesperson said: “When Centrica decided to close the Rough gas storage facility, an independent inquiry group at the CMA was required to review the historic undertakings that Centrica had given when it originally acquired the facility as part of its acquisition of Dynegy.
"As set out in the CMA’s public report at the time, BEIS informed us that it felt the UK had sufficient security of gas supply without Rough, and as such it was comfortable with its closure.”
While an Ofgem spokesperson added: “Ofgem’s priority is to protect consumers at this very difficult time. We believe that the additional long term gas storage capacity provided by Rough (a gas storage site) would further enhance Great Britain’s security of energy supply this winter and beyond, providing further reassurance for bill-payers.”