This is the second part of a two part series about U.K. natural gas. In the first part of this series, I presented a historical look at natural gas supplies in Europe, with a focus on the United Kingdom’s (U.K.) sources of natural gas supplies.

In this second part, I present the results of simulations of the U.K. natural gas supply and demand situation for the remainder of this heating season. The results of these simulations are quite alarming: it appears that there is a significant chance that the U. K. will run short of natural gas in storage before the end of winter.

If the U. K should run short of natural gas in storage, the U. K. will need to get along with only its on-going sources of natural gas. These are gas pumped from the U. K. continental shelf, pipeline imports, and imported liquefied natural gas (LNG). Recently, these sources have totaled about 300 million cubic meters a day (Mcm/d). Cutting back to this level of consumption may be difficult, since the shortfall is likely to exceed interruptible supplies, especially during cold weather when demand may exceed 450 Mcm/d according to National Grid. There is still considerable uncertainty in precise amounts because demand may vary due to economic conditions and the weather, and supply may vary because of changes in production amounts or imports.

The primary reason for the likely shortfall in natural gas is the continued decline in production from the UK continental shelf. Production has declined in each of the last four years, and is expected to continue to decline in the future. Because of declining U. K. production, increased imports are needed each year. There is no clear path for obtaining increased imports, however. Pipeline imports are expected to remain flat or decline slightly, primarily because Norway's exports this winter seems to be at the maximum level. Liquefied natural gas (LNG) imports to date have been quite small, averaging less than 10 Mcm per day. LNG imports could theoretically ramp up with higher price or long-term contracts, but at this point show no sign of increase.