Several important challenges now face the UK gas industry. A fundamental issue is the beginning of a long-term decline in production by the UK's own offshore oil and gas sector. Older reserves are being depleted and newer discoveries are smaller and more expensive to develop. The UK is now a net importer of gas, and by 2020 up to 90% of the nation's gas may be imported — much of it from Russia, Central Asia, the Middle East and Africa. Political disputes with certain exporters and acts of violence in some areas will have the potential to disrupt gas supplies to the UK. Global warming is also becoming an international issue and, as a major fossil-fuel industry producing carbon emissions, the gas industry can expect competition from other electricity-generation technologies, such as renewable energy and nuclear power. Since 2003, gas prices have risen steeply and, due to their link with international oil prices, they are unlikely to fall to pre-2003 levels.
The future will see a further decline in UK gas production and a further increase in imports. Companies will continue to develop the infrastructure to accept more imported gas. Carbon emissions and global warming will become more urgent topics, and energy companies will be involved in helping customers to save energy. There is likely to be further consolidation in the gas industry, possibly with additional involvement by overseas companies.
