Gas consumers win battle for transparency
By Stuart Penson
LONDON (Reuters) - Big energy users scored a victory on Wednesday when regulator Ofgem backed proposals to make the gas market more transparent in the wake of record high prices last month.
In a move vehemently opposed by gas firms, Ofgem said the National Grid in October will start publishing more data on supplies from offshore fields and import terminals, lifting the lid on an opaque area of Europe's biggest gas market after consumers demanded action in the face of soaring energy bills.
A faster-than-expected drop in output from ageing North Sea fields has hit gas supplies, driving up wholesale prices and forcing Britain to dash for imported supplies.
Offshore gas producers said they were "extremely disappointed" with Ofgem's decision.
The new measures would involve the release of commercially sensitive information, and could hinder future investment in the North Sea, said the UK Offshore Operators Association (UKOOA).
"We think that those who lobbied for the modification, believing it would secure more competitively priced gas, will be bitterly disappointed," said David Odling, UKOOA's head of gas issues, in a statement.
"It will expose commercial positions when fields run into production difficulties and therefore risks creating even greater price volatility," he said.
The Department of Trade and Industry (DTI) said there were no plans to extend the new measures to the oil market.
"The oil market is more developed, this is about Ofgem refining its regulation of the gas market," said a DTI spokesman.
Ofgem said consumers had called for better information on gas supplies after extreme price volatility this winter.
"Customers, many of whom are amongst the largest UK companies, have told us that their experience this winter shows there is still a need for more information on gas supplies to help them understand and respond to gas price movements on the day," said Ofgem's Chief Executive Alistair Buchanan in a statement.
"Information is the lifeblood of an effective market and better information will help reduce uncertainty," he added.
The new data will cover supplies from the North Sea fields, interconnector pipelines, storage sites and liquefied natural gas (LNG) terminals.
Consumer group energywatch, which originally tabled the proposals on publishing more data, said Ofgem's decision would help big consumers.
"For too long energywatch has had to argue that consumers have been disadvantaged because the gas producers held all the information cards," said energywatch chief executive Allan Asher.