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Benedict Brogan: Britain’s Energy Crisis Is Likely To Become The Dominant Election Issue

Benedict Brogan, The Daily Telegraph

Which party can you trust to keep the lights on in 2015? For the moment, none of them.

Next month the Government will produce a map of the best places in Britain to drill for shale gas. A lot of politicians – Conservatives in particular – will hate it. The latest data will confirm what is already well known: that the country’s vast onshore reserves are buried not just in the “desolate North” so unfortunately described by George Osborne’s father-in-law, but under vast tracts of southern Tory shires, in Sussex and elsewhere.

Exploiting the wealth beneath our feet will involve some unpopular decisions and headaches for those MPs whose constituencies are being eyed up by the oil prospectors. Ministers expect it to cause mayhem in the Coalition, and particularly on the Tory benches. The Chancellor fancies shale production as the successor to North Sea oil, a pipeline pouring ready cash into the Treasury.

The new map will be a guide to Mr Osborne’s own Treasure Island, except with more than one X marking the spot. Some forecasts say Britain could be sitting on as much shale as China or the United States. Even if only a fraction is recoverable, it would mean energy self-sufficiency beyond our lifetimes. It is hardly surprising therefore that the Government – or at least its Tory wing – is anxious to share the proceeds of shale before any has been pumped. Already there’s talk of a “bonanza” that will pay for tax cuts elsewhere. At this rate of spending-before-drilling, it risks going down as the great phantom boom of the 21st century.

Fracking – the engineering process by which shale is extracted – has become one of the great “if only”s of austerity. Its proponents say that if only fracking could go ahead on a mass scale, Britain would find its economy rejuvenated on the back of vast quantities of cheap and plentiful energy. Just look at the US, where the discovery of shale and the development of fracking have brought unexpected new wealth and an energy revolution. The old assumptions of geopolitics have been turned on their heads as the US discovers that it no longer needs to rely on the vagaries of the Middle East to power its economy. Energy self-sufficiency is going to the superpower’s head.

Inspired by the transatlantic model, Conservatives understandably hope to reproduce some of that magic here. And why not? The gas is there in incalculable quantities, the technology is developed, and our stricter regulatory regime should reassure the environmental doubters. Despite the best efforts of its opponents to talk up the danger of earthquakes and exploding taps, the science points conclusively the other way. The process of fracking itself is unobtrusive. Residents of Wytch Farm in Dorset, for example, where it has been happening for years, are barely aware of what’s going on beyond their hedges. Areas of the North currently struggling to find a role in the post-industrial age would be given a new lease of life. It would be tempting to conclude that we are just a ministerial pen-stroke away from the answer to all our problems.

And that’s precisely the difficulty with shale and fracking: it’s jam tomorrow, not today. It has so far generated plenty of excitement, but no power. Meanwhile, the virility contest within the Coalition over its merits distracts us from the far more pressing issue of Britain’s imminent energy crisis. We are on course to lose significant chunks of our generating capacity through the retirement of ageing nuclear plants and the closure of gas and coal stations that no longer satisfy stringent new European emission rules.

Not that long ago, the minister in charge admitted that within four years, the country could struggle to meet the daily demand for energy, and that regular power outages could once again become an everyday feature of British life. After that, the situation would only get worse. The minister was Ed Miliband, who at the time was secretary of state for energy and climate change. His role in shaping British energy policy is often overlooked. By 2017 – halfway through the next parliament, when he stands a decent chance of being Prime Minister – whoever is in charge will have to explain how British politicians allowed the country to go dark, and why we have been left at the mercy of foreign suppliers.

Actually, things have got worse. The National Grid yesterday announced that its reserve supply of domestically produced electricity had dropped to troubling levels, and that only the availability of power from the Continent would prevent blackouts. Long before we might hope to begin banking the shale windfall, the lights will go out.

Look beyond the fracking dispute and the wider problem becomes clear. The energy market has been confused by the uncertainty of successive governments. Does Britain back nuclear or not? Do we want more gas-fired plants or not? Do we believe in renewables as a major part of the overall energy mix or not? Are we fracking or not? Have we given up on North Sea exploration and exploitation or not? Are we prepared to subsidise the investment needed for our energy infrastructure or not? The answers to all these questions have varied widely under both Labour and the Coalition. As a result, investment has withered, and a First World country that has ambitions of being a model economy for the post-crisis age cannot be certain that it will be able to provide its businesses and citizens with the power they need. It seems unimaginable, but companies must now anticipate the possibility of power rationing.

A fortnight ago, Mr Miliband electrified (sorry) the conference season by offering to freeze fuel prices for 20 months if Labour returns to power. His big idea was designed to guarantee voters a concrete measure against rising prices. It was a populist lunge that allowed his critics to accuse him of returning to the worst days of Seventies Labour statism. The perils of trying to impose a limited fix on the market are obvious, but then so is the appeal of sticking it to the energy firms. The politics continue to reverberate as the Tories try to answer the Labour leader with a populist lunge of their own. Whatever they say in public to deplore Mr Miliband’s reliance on the politics of gimmickry, Downing Street and the Treasury are now hard at work cooking up cost-of-living wheezes of their own.

This is why Britain’s energy crisis is likely to become the dominant issue of the general election. Tory ambitions to unleash the untapped potential in the economy come up against Lib Dem intransigence on the environment. The green taxes dreamed up by Mr Miliband when he was a minister have been gold-plated by the Lib Dems, who, through Ed Davey, control the Department for Energy and Climate Change.

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