Economic Report 2000 Index

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Meeting the Challenge Gas The UKOOA investment and production survey has elucidated the potential for the UKCS to prolong self sufficiency in gas at a time when the Task Force Vision was increasingly open to challenge and expressions of concern from some quarters within the gas industry. Figure 26 illustrates the aggregate supply potential from the UKOOA survey and compares this potential with the recent demand estimate from Transco. It is possible to draw the conclusion that if all these projects can be developed then the UKCS can remain self sufficient until 2005 or later. Since the projection excludes any contribution from exploration success it is possible that the inclusion of new developments from exploration success towards the end of the period could sustain self sufficiency to 2010, the Vision Target. Figure 27 also confirms that the additional potential available from these new developments would permit an increase in gas production of 20-25% from 2000 to 2003. This is a material change from the picture developed a year ago. Much depends on a sustained recovery in sentiment towards the gas supply industry which has suffered in recent years from regulatory uncertainty. The Government's announcement in November 2000 to remove the Stricter Consents Policy in respect of gas-fired power generation represents an important signal and step towards the restoration of investor confidence.