Skip to content

Dominic Lawson: Why Won’t Huhne Celebrate Our Gas Windfall?

It doesn’t take a degree in economics to realise that if the Government is genuinely concerned about rising energy prices and fuel poverty, it should immediately abandon the fatuous and massively subsidised wind-power experiment and instead dash for gas.

When, during the recessionary 1970s, commercially exploitable oil reserves were discovered in the North Sea, the sense of national relief – exuberance, even – was palpable. Here was not just the possibility of a new British industry, but also the prospect of fuel for businesses and homes delivered from our own backyard rather than that of the King of Saudi Arabia or the Shah of Iran.

The then Energy Secretary, Tony Benn, never missed an opportunity to scoot up north for photo-opportunities wearing a hard hat in the company of beaming geologists and engineers – and who could blame him? Yet the current occupant of that post, Chris Huhne, seems determined not to draw the public’s attention to a very recent discovery of no less significance or potential.

Last month, the exploration company Cuadrilla announced it had discovered a shale gas field potentially containing a scarcely comprehensible 200 trillion cubic feet of the stuff. Not only is this vastly bigger than any of our remaining North Sea reservoirs: it is not even in deep waters. Cuadrilla’s discovery lies beneath and around Blackpool, Lancashire, offering the prospect of cheap, secure energy to homes and businesses for decades to come – and perhaps centuries, since this geological formation is not peculiar to subterranean Blackpool but extends from just south of the Scottish border to Derbyshire, with another shale layer ranging from the East Midlands to the South Coast.

When one considers that male unemployment in Blackpool is around twice the national average, it seems perversely restrained of Chris Huhne not to have sped off to Lancashire, and be pictured in a hard hat, à la Tony Benn, to draw attention to the good news, in the company of the men who have unlocked the wealth beneath our soil.

Mr Huhne is a highly intelligent man, however; and he has a particular reason for this uncharacteristic reticence. He is not just the Energy Secretary, but also the Cabinet minister responsible for Climate Change policy; and the Lancashire gas mega-field comes as a most inconvenient surprise to him in that capacity. Huhne is the Government’s most ardent proponent of switching our energy sources to wind, solar and nuclear power, based on the argument that it is only by using such forms of energy that we will meet our commitments to reducing carbon emissions, in line with the Kyoto accord (not to mention the more stringent reductions enshrined in our own Climate Change Act).

Huhne actually purrs when the price of fossil fuel rises, because it makes the prodigious per kilowatt costs of wind and solar power seem less extortionate and more competitive. He has also argued that our national security rests on developing indigenous sources of energy (such as wind), and that we ought not to be over reliant on gas from Russia and Iran. The shale gas find addresses his security argument with primordial force.

As for carbon emissions, the Oxford University professor Dieter Helm (a specialist in energy and the environment) pointed out last week that: “At the global level, the reason why Kyoto has made so little difference is that coal is the rising fuel. Switching from coal to gas is cheap – and it cuts emissions by almost half… it gets emissions down much faster and cheaper than all those offshore wind farms in the short to medium term.”

Just how much cheaper is most clearly demonstrated by the official figures from the US Energy Department, which recently calculated the cost per megawatt hour for newly installed electricity generating capacity. Conventional gas averaged at 66 cents per megawatt hour, while offshore wind farms came in almost four times more expensive at $2.43 per megawatt hour. The British figures show gas coming in at upwards of 60p a megawatt hour, with offshore wind starting at 150p.

It doesn’t take a degree in economics to realise that if the Government is genuinely concerned about rising energy prices and fuel poverty, it should immediately abandon the fatuous and massively subsidised wind-power experiment and instead dash for gas. I realise that some are genuinely concerned by the so-called “fracking” required to release shale gas, but the Environment Agency has reviewed Cuadrilla’s operations and said it does not consider that they are a risk to the environment – including water resources.

The truth, in any case, is that the Government’s whole carbon-reduction plan based on hugely expensive “renewable” energy is on life-support and will soon have the plug pulled. Chancellor Osborne’s declaration at the Conservative Party Conference that “we will cut our emissions no faster than our fellow countries in Europe” sounded the death knell to the hubristic policy of being “a world leader in climate change”; and last week it emerged that the European Union is finally questioning its own policy of cutting emissions regardless of what the rest of the world does.

A leaked draft of its Energy Roadmap 2050 states that: “If co-ordinated action on climate among the main global players fails to strengthen in the next few years, the question arises how far the EU should continue with an energy-system transition oriented to de-carbonisation.” Since no non- European country has any intention of signing a mandatory carbon reduction treaty, it is clear that the game is up.

That is good for any person or business in this country worried about their fuel bills; and it’s wonderful news for Blackpool, Lancashire.

The Independent, 25 October 2011