Gas has been used as a fuel in the UK since the early nineteenth century, when ‘town gas’ produced from coal was used for street lighting, cooking and heating.

The Continental Shelf Act of 1964 enabled petroleum companies to prospect for oil and gas in the North Sea. Substantial oil and gas fields were discovered over the next twenty years, and production of offshore gas began in the late sixties. The act limited what North Sea gas could be used for. It couldn’t be exported and had to be sold to the state - first to state-run gas boards, and then to the British Gas Corporation created by the Gas Act 1972. Gas was reserved for heating and industrial use - generating electricity by burning gas wasn’t permitted.

The North Sea provided an abundance of gas, and domestic and industrial use grew rapidly through the seventies and eighties, alongside the development of a national gas infrastructure network. It wasn’t until 1991 that the government allowed gas to be burnt to produce electricity, but once it did the newly-privatised electricity companies embraced the fuel.

The nineties saw a rapid expansion in the use of gas to produce electricity. The new electricity companies were keen to generate their own electricity, gas power plants were cheap to build and gas was readily available. The boom in gas power became known as the “dash for gas”, and the fuel became the single biggest source of the UK’s energy, replacing coal as the main source of electricity. In 2010 gas provided 42.7 per cent of the UK’s energy, coal just 14.8 per cent.

Most of the big gas fields in the North Sea were discovered by 1985. Gas production from the North Sea peaked in 2000, and began to fall by an average of eight per cent a year. The UK, which had imported almost no gas at the start of the millennium, was by 2004 a net gas importer. In 2011, imports exceeded domestic production for the first time.

The UK may yet see further domestic production of gas from shale, but is unlikely to ever again see such a rapid growth and decline in the use of a single fuel.

[EXTRACT]

9

Use and supply of natural gas (1)

The following provisions of this section shall have effect with respect to the use and supply of any natural gas gotten in pursuance of a licence under the Petroleum (Production) Act 1934 as applied by section 1(3) of this Act, and section 52 of the Gas Act 1948 shall not apply to any such gas. (2)

The holder of the licence shall not without the consent of the Minister of Power use the gas in Great Britain and no person shall without that consent supply the gas to any other person at premises in Great Britain. (3)

The Minister of Power shall not give his consent under this section to the supply of gas at any premises unless satisfied— (a)

that the supply is for industrial purposes and that the Area Board in whose area the premises are situated has been given an opportunity of purchasing the gas at a reasonable price; or (b)

that the supply is for such purposes as are mentioned in subsection (4) of this section;

but shall give his consent under this section to the supply or use of any gas if satisfied that it is for the purposes mentioned in that subsection. (4)

The said purposes are industrial purposes which do not consist of or include the use of the gas as a fuel except in so far as the gas is used to provide heat or other energy required— (a)

for a process in which the gas is used otherwise than as a fuel; or (b)

where such a process is one of a series, for any further process in the same series, not being a process in which a bulk product is converted into manufactured articles; and in determining whether any industrial purposes are as mentioned in this subsection the use of any gas derived, otherwise than as a by-product, from any natural gas shall be treated as the use of that natural gas. (5)

For the purposes of this section gas provided by a company for the use of any subsidiary or holding company thereof, or of any subsidiary of such a holding company shall be deemed to be used by that company. (6)

This section shall not affect the supply of gas by any person otherwise than through pipes or the supply of gas by or to an Area Board. (7)

In this section " Area Board " has the same meaning as in the Gas Act 1948 and " holding company " and " subsidiary " have the same meanings as in the Companies Act 1948. [/ EXTRACT]

http://www.ukerc.ac.uk/publications/the-uk-s-global-gas-challenge.html