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One desperately wishes to give the new Conservative-Liberal Democrat Coalition Government the fairest of winds. The debt crisis demands that it must succeed, and that some compromises must be made to achieve this. But one Cabinet appointment beggars belief, and is a compromise too far and too dangerous for the country.

To Laugh Or To Cry?

The lamentable fact that David Cameron has appointed Chris Huhne, Liberal Democrat MP for Eastleigh, Hampshire, as the Secretary of State for Energy and Climate Change, underscores one’s profoundest fears that our leading politicians have still not grasped, despite all the red flag warnings, the depth and urgency of the UK energy crisis. This, after all, is the man who is avowedly opposed to the development of a new generation of nuclear powers stations, who believes that we can fill our looming energy gap with wave, wind, and waffle, and who is totally uncritical of the ‘global warming’ message.

Worse still, however, is the limp-wristed joint-statement with respect to nuclear power issued by the Prime Minister, Mr. Cameron, and Nick Clegg, his Liberal-Democrat Deputy:

“Liberal Democrats have long opposed any new nuclear construction. Conservatives, by contrast, are committed to allowing the replacement of existing nuclear power stations provided they are subject to the normal planning process for major projects (under a new national planning statement) and provided also that they receive no public subsidy. We have agreed a process that will allow Liberal Democrats to maintain their opposition to nuclear power while permitting the government to bring forward the national planning statement for ratification by Parliament so that new nuclear construction becomes possible [my emphasis]. This process will involve:

-the government completing the drafting of a national planning statement and putting it before Parliament;

-specific agreement that a Liberal Democrat spokesman will speak against the planning statement, but that Liberal Democrat MPs will abstain;

-and clarity that this will not be regarded as an issue of confidence.”

One doesn’t know whether to laugh or to cry, though I think the latter option may be the more appropriate. As Rowena Mason points out in her trenchant Daily Telegraph blog:

“… there remains a sizeable threat that the Liberals could force a time-consuming and costly public inquiry that delays the new build. The idea that Chris Huhne will have to formulate regulatory policy and set out a timetable for nuclear is likely to be a considerable worry. Most destabilising is the fact that policy will probably not be clear for some time [my emphasis], for Mr Huhne is going to have to square his Department’s theoretical support for nuclear with his own views (in a previous speech on energy) that:

‘No private sector investor has built a nuclear power station anywhere in the world without lashings of government subsidy since Three Mile Island and Chernobyl. The World Bank refuses to lend on nuclear projects because of the long history of overruns. Our message is clear, No to nuclear, as it is not a short cut, but a dead end.’”

We Are Out Of Time On Energy Policy

But the whole point is that we, as a country, have long run out of time on energy regeneration, and our energy security is already seriously compromised and under threat.

In The Ultimate Resource II, Julian Simon, Professor of Business Administration at the University of Maryland, described energy as the “master resource”, arguing that, “if the cost of usable energy is low enough, all other important resources can be made plentiful.”

Dieter Helm, Professor of Energy Policy at the University of Oxford, concluded recently that the UK is only six years away from an energy crisis. Indeed, for over twenty years, politicians of all hues have failed drastically to confront our declining energy security, blinded by the flow of North Sea oil and gas.

Under the three post-1997 Labour Governments, the situation was willfully allowed to deteriorate. The turnover in Energy Ministers was criminal, involving eleven in all. Likewise, responsibility for energy policy has been regularly shifted since 1992, from the Department of Energy to the Department of Trade and Industry, then to the Department for Business, Enterprise and Regulatory Reform, and, finally to the Department of Energy and Climate Change, created in 2008, a title which, sadly, David Cameron has allowed to stand. Inexorably, there has been one wishy-washy energy ‘White Paper’ after another, each trying to pick an ‘energy winner’, coupled with dithering over what to do about coal-fired plants and the replacement of ageing nuclear facilities, all debilitated by hand-wringing over the need for ‘renewables’, such as wind, to meet politically-set climate-change targets.

It can only get much worse under Chris Huhne. I can’t believe we have ended up in his hands on this crucial issue.

What Must Be Done, Now

The result of all this has been a near-fatal undermining of future electricity-generating capacity so that we are facing a disastrous energy gap. We used to be able to survive on 65 GW; to meet peak demand safely, this must rise from 70 GW to 90-100 GW by 2020.

There is no further leeway for delay. Unfortunately, as Helm has noted: “Unless reform is quick, the best hope for Britain’s energy supply from a security perspective is that the economy does not recover quickly – a long hard Japanese-style recession would keep demand (and carbon emissions) low. But that’s hardly a sound energy policy.”

Just so. Yet, the real, hard policies required are clear, and unavoidable, even if they might prove compromising for politicians hemmed in with utopian, ‘Through The Looking Glass’, climate-change rhetoric.

If we are to achieve energy security, we will need a comprehensive re-assessment of the energy mix, including the market for gas.

First, we must put in place urgently an effective financial structure and planning regime for driving forward the next generation of nuclear plants, despite Huhne’s appointment.

Secondly, we will have to construct new gas plants and to improve gas storage. Ineos, the chemicals group, has been in talks about the sale of salt caverns in the North East of England for such storage, while approval has been granted for the construction of a £600 million gas storage facility – Gateway Gas Storage – beneath the Irish Sea, through which it is hoped to boost our pitiful capacity by 30 per cent by 2014.

Thirdly, ‘green’ protests and Mr. Huhne notwithstanding, there will have to be new ‘unabated’ coal-fired plants, such as those proposed by E.ON for Kingsnorth, while the life of older coal-fired and oil-fired plants needs to be extended. What has happened, I wonder, to the private talks held between RWE npower, and E.ON, and senior Conservative politicians about the legal position of nine coal- and oil-fired plants due to close by 2015 under EU rules?

Finally, we must re-evaluate plans for ‘renewables’, which are largely in fantasy-land, and which will raise prices for consumers to punishing levels. As Helm again has observed: “The scale of the investment required to plug the energy gap while pursuing renewables is enormous. The cost of building not only power stations, but also new transmission networks and gas storage facilities, fitting smart meters, developing an offshore wind industry and implementing energy efficiency measures will run to tens of billions, possibly more than £100 billion in the next decade”.

You wouldn’t think we were in the throws of a mega-debt crisis, would you?

In addition, we must not forget that, unlike nuclear power, ‘renewables’ are permitted to depend on weighty subsidies. Expensive offshore wind, for example, receives a whopping 20-year subsidy guarantee.

Huhne’s appointment is absolutely extraordinary at the very moment when energy security and food security are the new politics across the world.

This appointment could prove disastrous for Britain. It is surely Cameron’s first major blunder.

Like coal, my anger is unabated. Time for tea, while I can still boil a kettle.

The Clamour of the Times, 13 May 2010