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Huhne’s Green Obsession Threatening Energy Security

ENERGY costs could soar because a key supplier is threatening to stop selling gas to the UK if the Government continues chasing renewable sources.

The Norwegian company Statoil currently provides around a quarter of our gas from the North Sea.

But Energy Secretary Chris Huhne’s pledge to make Britain Europe’s fastest-growing renewable energy producer could persuade the firm that there are more profitable markets outside the UK.

Statoil has said that if the conditions of sale are not attractive here it will sell its gas elsewhere.

Rune Bjornson, the firm’s executive vice-president for natural gas, warned: “We will continue to develop new production in the North Sea, but the question is which market it finds its way into.

“There are other places we can export the gas to apart from the UK.

“We have the gas you need if you want it.”

The threat has placed Mr Huhne under intense pressure. He is currently at odds with Chancellor George Osborne who said recently said that Britain would not cut its carbon emissions any faster than the rest of Europe.

Mr Osborne also blamed soaring energy prices on renewable subsidies amid growing concern at the cost of green policies. Statoil has already said that the in-fighting between politicians over the green agenda has paralysed the energy industry.

If the company sells elsewhere it could have huge consequences for Britain.

We already import more than 50 per cent of the gas we use. And with production in the British part of the North Sea decreasing, imports may have to increase.

Of all Britain’s gas suppliers, Norway is the most stable. If we lose the Norwegian supplies it could put the country at the mercy of producers in more volatile countries like Qatar, North Africa, Russia and Norway.

Statoil sells about half the gas it supplies to Britain through long-term contracts with companies such as Centrica and Scottish and Southern Energy.

These will expire in four years and the company is threatening not to renew them. “The UK is one of the most challenging markets at the moment when it comes to reading the future energy policy,” said Mr Bjornson.

“We are getting different signals from different parts of government – we don’t know which opinion will prevail. This introduces uncertainty for investors.”

The Government has set a target of reducing carbon emissions by 50 per cent by 2025 against 1990 levels – more than twice the EU’s target for 2020.

Matthew Sinclair, director of the TaxPayers’ Alliance, who has written about the cost of climate change policy, said: “The reality is that we are going to become a lot more dependent on gas.

“We will not be able to power Britain using off shore wind. At some point we will have to get real.

“In the fantasy land the Government inhabits we won’t need fossil fuels. That delusion will undermine investment we need to secure affordable, reliable energy.”

At this week’s RenewableUK conference, Mr Huhne attacked “climate sceptics” and said the UK would become the largest market in Europe for offshore wind.

Daily Express, 28 October 2011