At the heart of the free British energy market is a sophisticated trading system used by hundreds of competitors that continually prices gas and electricity, both spot (short term) and forwards (long term). This trading system — actually multiple interlocking platforms, all in different ownership — encourages arbitrage between the gas market and power generation: when gas is relatively cheap, the generators buy it, and vice versa. And, with the development of free markets in Europe, Britain has become the hub of competition for the continent as a whole. When gas is cheap here, the Europeans buy it from us (to the extent that they are allowed to), and when it is expensive here, they sell to us.

Which leads us to security. Big gas producers, specifically Russia, are more interested in security of demand than the faintest Westminster heart is in security of supply. They are terrified that the West will stop buying the stuff from them. And though they would rather that their European customers would continue buying gas at high non-market prices under restrictive contracts, they will have no choice but to accept the consequences of the British-style liberalisation that is fast bearing down on them. 

The existence of the competitive market for gas is the ultimate guarantee of security. Britain is now the hub of a highly flexible competitive network that attracts gas supply, short- and long-term, from across Europe by pipeline, and across the world as Liquid Natural Gas.

Aside from this extraordinary commercial innovation, there are many other reasons to celebrate the role of natural gas in British life. The arrival of North Sea gas in 1965 brought with it central heating and hot water on demand. The British people are cleaner and more comfortable than they have ever been. The offshore gas industry — still thriving, albeit at a lower level-has earned hundreds of billions of pounds for the Exchequer and many more for British firms. The rapid growth of gas-fired power generation in the '90s had the unacknowledged benefit of keeping Britain's carbon-dioxide emissions to the level agreed at Kyoto, the only nation to meet its target.

In the gas trade, the contract year runs from the beginning of October, which gives a good excuse for a round of "gas new year" parties. I suggest a grateful nation should adopt this date and make October 1 Natural Gas Day.