Guest Blog: Brexit in the context of EU natural gas governance

05 May 2016

The UK depends on European partners to obtain gas, and on EU legislation to regulate the gas market. Stefan Bouzarovski, University of Manchester, wonders what effects Brexit might have on the UK’s gas security.

The extent to which the UK’s energy sector would be impacted by a ‘Brexit’ has not featured prominently in debates surrounding the forthcoming EU referendum. This is despite the extensive energy interconnections – in infrastructural and regulatory terms alike – between the UK and continental Europe.

A recently published UKERC-supported study explored the socio-technical implications of natural gas governance in the European gas sector, as part of a wider project on the geopolitical economy of gas security. It revealed growing levels of integration in a number of key infrastructural and regulatory aspects of natural gas operations. In spatial terms, the European gas network does not conform to preconceived territorial and political cleavages, as it extends well beyond the boundaries of the European Union to encompass distant geographical realms for the recovery and transport of hydrocarbon resources. Several large corporations have recently come to play a central role in this hybrid landscape of state authorities, business actors and transnational regulatory bodies.

The UK presently has one of the most liberalized and interconnected gas sectors in Europe. In contrast to the historically one-directional inflows of natural gas from the North Sea and Norway, the resource is now imported and traded via multiple geographic vectors. However, imports from the rest of Europe – both the EU and Norway – constitute more than half of the supply mix, and it is unlikely that their regulation would remain unaffected by a UK departure from the EU (even if Norway is not formally part of the latter). The EU plays a key role in this new energy landscape, as it is the only political body that can tackle the parallel need for regulating the growing power of transnational corporations, on the one hand, and the rising interconnectedness of transnational gas flows, on the other.

Even if no one in the Brexit camp is proposing a physical disengagement from the EU gas network, a UK departure from the EU would knock away UK influence on EU-wide regulatory policy, vital in a transnational market. This might also affect overall confidence of non-EU partners in contracts: recently, Norway expressed concerns that Brexit could impact the functioning of the single market for energy, which it is also a part of. The UK’s limited gas storage capacity is an additional issue in this context – there is little room for error.

Stefan Bouzarovski is Professor of Geography at the University of Manchester.

UKERC will co-host a panel discusion on 25 May on potential implications of the EU referendum for the energy sector, In vs Out: An Energy Perspective. Please book your place here.