European leaders are urgently trying to deal with the Ukraine crisis and the fallout for the wider European economy. If Russian gas supplies, which cover 30-40 per cent of European needs, were to be cut off, the impact would be dramatic. Such a move could reduce German incomes by up to 5 per cent.
To deal with this potential crisis the rest of Europe is working on protocols to share the pain of any Russian gas cut-off and minimise the cost to economies and societies across the continent. However, according to a story in the Financial Times on Wednesday, the UK plans to opt out of such solidarity. If Putin shuts off the gas to Europe, the report claims, the UK plans to follow suit by shutting off its own gas pipelines to other countries.
There are two such pipelines between Britain and continental Europe. The Financial Times reports the first thing the UK will do in the case of a serious shortage of gas will be to raise the drawbridge by shutting the pipelines. If this report is true it would be yet another instance of the UK planning to breach or set aside international law and agreements.
So far plans to legislate to breach the Northern Ireland protocol and to set aside the European Convention on Human Rights already undermine solemn international commitments. But to date the UK has not yet abrogated contracts under British law.
Parties’ general election manifestos struggle to make the figures add up
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
A significant part of the gas flowing into the UK comes from a Norwegian field that is not connected to Norway: the only outlet is through the UK. Currently the Norwegian company sells the gas to Irish and other EU buyers, supplying them through the pipelines in the UK. However, if the UK government closes these onward pipelines the UK would prevent the owner of this gas from supplying its non-UK customers.
Such an action by the UK would increase gas availability to its own consumers, thus enabling lower prices than elsewhere in Europe where supplies would become scarcer. At a time of high UK inflation, there is a clear temptation to do so. However, by weaponising gas supplies to damage the UK’s neighbours, Johnson would be mimicking Putin.
If the UK were to close the three pipelines between Ireland and Scotland this would have profound consequences for us. The UK might choose to continue to supply Northern Ireland’s gas needs. If it did we could potentially benefit to some degree via the North-South gas pipeline.
Another scenario might see the UK exempt the island of Ireland, while blocking supplies to mainland Europe. That could see our relative gas prices fall below those of mainland Europe.
Ireland receives 30 per cent of its gas supplies from Corrib, and the rest come through the UK. If Ireland were to lose the 70 per cent of gas coming via Britain the economic and social consequences would be truly awful. The impact would be on a much greater scale than the threat to Europe of a loss of Russian gas. At most, Europe gets 40 per cent of its gas from Russia — 70 per cent of ours is sourced via the UK.
While a very limited gas supply might enable our electricity system to continue in action, households and companies that use gas would suffer hugely. If household gas supplies went to near zero during winter, there would be serious danger of excess deaths from hypothermia. Loss of gas, on which our food processing industry relies, could force closures.
There is little the Irish Government can do this year to offset the dangers of losing access to gas from the UK, other than rely on goodwill of our nearest neighbours. An important factor is that currently energy is a devolved responsibility under the control of the Scottish and the Northern Ireland governments. The Scottish government might be less trigger-happy than London about cutting supplies from Scotland to Ireland. They might be more minded to ensure the continuing enforcement of commercial contracts written under UK law, which underpin our supply of gas.
Of course, the London government could counter this by taking away these devolved powers from the Scottish government. However, they might be reluctant to open up a new front in the constitutional war with Scotland.
The Northern Ireland Authority for Utility Regulation regulates the pipeline between Northern Ireland and Scotland and, jointly with the Commission for Regulation of Utilities, the North-South pipeline. On our shared island, this agency, and the Northern Ireland Executive, whenever formed, may be more amenable to keeping these vital links open.
