British Gas
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British Gas was formerly the name of the United Kingdom's monopoly gas supplier. "British Gas" is used as a trading name by one or more of the companies detailed below.
In 1997 the then British Gas plc demerged Centrica plc and renamed itself BG plc (later BG Group plc). Ownership of the name was split; in Britain it is used by Centrica, while in the rest of the world it is used by BG Group.
History
1940s For most of the decade, the gas industry in Great Britain was still run in much the same way as it had been for over a hundred years. Gas was manufactured and supplied by a series of private and municipally operated gas companies.
The Gas Act 1948 (11 & 12 Geo.6 c.67) changed that completely, creating a nationalised gas industry throughout England, Scotland and Wales.
Under the Act, which came into effect in May 1949, more than 1000 privately owned and municipal gas companies were vested into twelve area gas boards - each an autonomous body with its own chairman and board structure. The area boards became known simply as "the gas board", a term which some people still use when referring to British Gas.
The Gas Council was also set up to act as a link between the area boards and the Ministry of Fuel and Power, although the Council had no direct powers over the boards. The Gas Council was made up of the 12 area board chairmen and had a chairman of its own. Its first chairman was Sir Edgar Sylvester.
The Area Boards
In this period the British gas industry came to recognise the value of professional management. There were gas industry representatives at every session of the Administraive Staff College at Henley from 1952 and six-week residential courses were organised in collaboration with the School of management and Business Studies at Brooklands Technical College. There were on average 80 trainees every year up to 1967. Courses were open to members of the Society of British Gas Industries (the trade association of gas equipment and appliance manufacturers).
In 1959 the first trial imports of liquefied natural gas arrived in Britain from Louisiana, and in Holland an Esso/Shell survey discovered an enormous natural gas field.
1960s The industry was changing rapidly as technical advances were made. In 1963 the Methane Princess and Methane Progress were brought into service to import liquefied natural gas from Algeria at the rate of 300,000 tons per year. A high pressure pipeline had been constructed to deliver this gas from the Canvey Island terminal as far as Leeds.
Surveys in the North Sea had indicated the enormous potential of tapping undersea reserves of natural gas. In 1966 the decision was taken to convert Britain to natural gas, and a year later the first North Sea gas was brought ashore at Easington terminal. During a ten-year national conversion programme every appliance in the country was converted from town gas to run on natural gas. Visits were made to 13 millions homes and factories and 34 million individual appliances were converted.
1970s The start of the decade saw the opening of a national control centre at Hinckley, Leicester, to manage the operation of the growing high-pressure distribution system.
The Gas Act 1972 (c. 60) paved the way for greater centralisation with the creation of the British Gas Corporation. Taking effect in 1973, the 12 old gas boards became regions, responsible for a particular geographical area. New names were given to reflect their new status. For example, North Eastern Gas Board became NEGAS.
Offshore exploration work continued, and in 1974 gas was discovered in Morecambe Bay. Commercial development of the field was given the go-ahead four years later.
In 1977 the national programme to convert to natural gas was completed.
1980s Privatisation was the key issue during the decade, with the 1982 Oil and Gas (Enterprise) Act giving the Government the power to dispose of British Gas's assets and opening up the corporation's pipelines to third-party suppliers.
The 1986 Gas Act saw the return of the gas industry to the private sector and the company's names changed to British Gas Plc. On 8th December 1986, £9 billion worth of shares were floated on stock markets around the world. When British Gas was privatised in 1986 its shares were promoted with the famous advertising slogan: "If you see Sid, tell him".
With the return of British Gas to the private sector, Ofgas was formed to regulate the industry and protect the interest of customers.
1990s In 1992, competition was opened up for industrial and commercial customers using between 2,500 and 25,000 therms of gas per annum. A range of alternative suppliers entered the market.
The same year, British Gas called a wide-ranging Monopolies and Mergers Commission (MMC) inquiry to balance the needs of customers, shareholders, suppliers and employees. When the MMC published its report in 1993, its proposals were rejected, but the Government decided instead to open domestic gas market to competition by 1996.
In response to this proposal, British Gas carried out a major restructuring to prepare the UK business for the onset of competition. Five business units were formed, each with a specific national responsibility.
- Public Gas Supply, the domestic market (now British Gas Trading).
- Contract Trading (later named Business Gas, for supplies over 2,500 therms per annum).
- Transportation and Storage (later named Transco) responsible for transporting and storage of gas.
- Service and Installation (later named Services).
- Retail (later named Energy Centres).
Gas competition opened up in part of the south west of England on 29th April 1996; 500,000 customers in Devon, Cornwall and part of Somerset could choose alternative gas suppliers. By the end of May 1998 the entire market was opened to competition.
With significant change occurring in the industry, British Gas in 1996 announced plans to demerge its trading businesses, reflecting the need for greater focus within particular areas of the gas business.
Following shareholder approval, British Gas plc was demerged to form two separate companies on 17 February 1997.
- Centrica plc included:
- *British Gas Trading, Services, Energy Centres, Accord Energy and HRL (Morecambe gas field), the gas production business of the North and South Morecambe gas fields were transferred to Centrica plc.
- BG plc included:
- *Transco (British Gas's transportation and storage business), British Gas International, Exploration and Production (excluding North and South Morecambe gas fields), Research & Technology and Properties.
BG Group plc subsequently demerged in 2000 to create two new companies BG Group plc and Lattice Group plc.
Since demerger the range of products offered by British Gas in Great Britain has been extended to include home security, plumbing, and kitchen appliance cover.
In 1998, British Gas started supplying its first electricity customers as the market opened to competition.
2000s In September 2000, British Gas entered another new market with the launch of its telecommunications service.
In June 2001 British Gas extended its electrical servicing business into 80,000 more households across Britain with the acquisition of National Homecare. British Gas Services now provides cover for over four million heating and kitchen appliances.
Northern Ireland activities
In 1992 British Gas purchased Ballylumford power station, one of four in Northern Ireland. A condition of the sale was that the plant must be converted from heavy oil to gas-fired. British Gas formed Premier Transco Ltd. to build a submarine interconnector, the Scotland-Northern Ireland Pipeline (SNIP), a 135km pipe (40.4km under sea) with a diameter of 0.61m. Construction lasted three years (1994-1996) and was completed to time and on budget. Ballylumford converted to natural gas in 1996. To take advantage of this investment a licence was tendered to provide natural gas to Belfast, a tender which British Gas won through its subsidiary Phoenix Natural Gas. British Gas and its successor company gradually reduced its stake in Phoenix.
See also
Sources
Chandler, Dean and Lacey, A. Douglas (1949) The Rise of the Gas Industry in Britain. British Gas Council, London.Scott-Wilson, D. (1972) North Sea Heritage: The story of Britian's Natural Gas. The Gas Council, London.
Cassidy, Richard. (1979) Gas: Natural Energy. Fredrick Muller Ltd London. ISBN 0-584-62056=X.
Peebles, Malcolm W.H. (1980) Evolution of the Gas Industry. The Macmillan Press, London and Basingstoke. ISBN 0-333-27971-9.
Williams, Trevor I. (1981) A History of the British Gas Industry, Oxford University Press. ISBN 0-19-858157-2.
Barry-King, Hugh. (1984) New Flame. How Gas changed the commercial, deomstic and industrail life of Britian between 183 and 1984. Graphmitre Ltd, Tavistock, Devon UK.
Hutchison, Sir Kenneth, (1987) High Speed Gas: An autobiography. Duckworth, London. ISBN 0-7156-2200-5.
External links
- [britishgas.co.uk] - diagram of the demerger with links to demerged company websites
- [House.co.uk] - The official British Gas online home management service site.
- [House.co.uk Bills] - pay and manage your British Gas bill online.
- [House.co.uk DIY] - DIY advice and guides from Britsih Gas.
- [House.co.uk Central Heating] - British Gas central heating systems and advice.
- [House.co.uk Security] - British Gas home security help and advice.
- [National Grid National Gas Archive] - Includes contact details for the archives of British Gas and its predecessors, and a history of gas supply in the UK.
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