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Philip Johnston: Why Are We Kept In The Dark Over The Energy Lifeline That Is Shale Gas?

The widespread antipathy towards an energy resource that could satisfy British fuel demands for decades is mystifying.

Well, we’ve done it now. We had planned to wait until the clocks went back, but the onset of chilly autumnal nights convinced us (that is, my wife) that the time had come for the annual decision most of us take with a sinking heart: to turn on the central heating for the first time. And as the radiators warmed up on Sunday evening, we could almost feel the money draining out of our bank account.

The cost of gas and electricity has become jaw-droppingly expensive. For millions of people on low or declining incomes, especially the elderly, heating makes up an excessively large chunk of their outgoings. As politicians fall over each other to woo the so-called “squeezed middle”, this has also become a key Westminster battleground. Tomorrow, the Commons will debate energy prices on a Labour motion framed to embarrass the Coalition – a bit of a cheek, given that Ed Miliband was actually the minister in charge of policy until 18 months ago. Yesterday, David Cameron hosted a summit meeting with the bosses of the country’s big six power suppliers in the hope of convincing the rest of us that he shares our pain. But since he had Chris Huhne, the Energy and Climate Change Secretary, alongside him, that message somehow got deflected by a blast of hot air. Indeed, in Mr Huhne’s opinion, British householders are enjoying “relatively good electricity and gas prices”. Well, that’s a relief. Most of us thought we were being royally ripped off, not least by the tax on energy to pay for useless windmills so that Mr Huhne can parade his green credentials around Europe.

It is all very well the Government putting power companies on the spot over soaring prices – but why does it persist with unrealistic renewable-energy targets underpinned by subsidies that benefit no one but a few wealthy landowners? This madcap policy is costing the average small business thousands of pounds a year, hitting the very sector that must grow if the economy is to recover.

Of course, the energy companies have questions to answer, such as why price comparisons are so difficult to make. Everyone is encouraged to shop around for the best deals and if you are prepared to spend hours at it, it is possible to compare tariffs, negotiate discounts for direct debits, fix costs and switch suppliers. Yet when the energy companies then all put up their prices by 15 per cent or so at roughly the same time, you wonder why you bothered.

Before privatisation, it used to be simple: British Gas supplied gas while electricity came from the regional electricity boards. But whereas greater competition should have forced prices down, it is now dominated by half a dozen major players. And the way they are behaving has many of the characteristics of a price-fixing cartel — though, of course, it can’t be because that would be illegal. The fact they each make average profits of about £125 per customer is just a coincidence. Smaller suppliers try to muscle in on the business with a promise of simpler bills and more straightforward service. Believe it or not, we now get our gas and electricity through Marks & Spencer.

So will yesterday’s summit make any difference? Of course it won’t. It was purely presentational. Even if the energy companies can be browbeaten into cutting prices, it will be a temporary reprieve. The big problem this country needs to address is that we don’t produce enough energy and are vulnerable to world price rises and supply shocks, such as war in the Gulf. We have squandered the bounty of North Sea oil, which is now running out, and have little to show for the £200 billion it poured into the national coffers. The nuclear programme is years behind schedule because the Labour government dithered in order to appease the environmental lobby.

In other words, we’ve had it. Or have we? Walking up Whitehall last week, I came across a small group of green protesters standing outside the energy department before a banner that read “Frack Off”. They were demanding an end to any further effort to exploit the massive reserves of shale gas that have been discovered in north-west England close to Blackpool. Executives from the mining company Cuadrilla were inside trying to convince ministers that the hydraulic fracturing process for releasing the gas — known as fracking — would not trigger earthquakes, though a report has confirmed that minor tremors have been detected in trials along the Fylde coast.

Later, I listened to a BBC radio programme on shale gas and that sinking feeling about our energy future suddenly lifted. Here, surely, is the answer. There is enough gas in the Lancashire site alone – some 200 trillion cubic feet – to meet the UK’s fuel needs for decades. A cross-party select committee has urged the Government to get on with licensing this new industry as a matter of urgency – as the Americans have done. The MPs examined many of the safety worries but concluded: “There appears to be nothing inherently dangerous about the process of ‘fracking’ itself and as long as the integrity of the well is maintained shale gas extraction should be safe.”

But there seems to be a conspiracy to keep this from the public. The greens are determined to kill off shale gas because it is not a renewable source. The big energy companies don’t want to know and the Government has so far been lukewarm about the prospect. Mr Huhne never mentioned it yesterday in the interviews he gave, and neither did Ed Miliband. Charles Hendry, the energy minister, recently said: “We do see shale gas as a game-changer in places like the US, but we don’t see the same potential here in the UK at the moment.” Why not?

The Daily Telegraph, 17 October 2011