Stephen Pollard: The Green Lobby Is Destroying Britain’s Economy
Britain is now paying the price of the green lobby persuading governments to rip up decades of energy policy and start again. It is, to be blunt, mad. There is no starker example of the disconnect between the political classes and the rest of us.
Imagine a different future. We are now so used to rising energy prices – they’ve gone up 159 per cent since 2004 – that they have come to seem an inevitable part of life.
That’s certainly what Energy Secretary Ed Davey tells us, saying it’s impossible to “turn back the tide” of rising energy prices.
But instead of unrelenting increases, instead of a collapse in our capacity to generate energy and instead of fears that we will soon be in hock to Russian gas oligarchs, imagine a different story.
Imagine the price of gas falling by two-thirds in less than a decade. Imagine electricity prices crashing by more than a quarter in less than a year. It sounds like a fantasy. Too good to be true.
A little later I shall tell you why it needn’t be. But first let us reflect on Britain’s actual energy policy.
Yesterday Alistair Buchanan, the departing head of energy regulator Ofgem, warned that our energy reserves are “uncomfortably tight”.
If we think the rises in energy prices have been bad enough already then we need to think again. This, he said, is only the start.
As Mr Buchanan put it, the combination of British power plants closing, foreign gas supplies shrinking and demand for energy rising has tipped us perilously close to the edge. He is simply stating the obvious.
Our energy policy is no longer dictated by the need to keep supply plentiful and cheap which for decades was the basis of all planning. Today energy policy is framed with only one factor in mind: satisfying the green lobby.
It is, to be blunt, mad. Next month we are forcing 10 per cent of our energy production plants to close in order to meet environmental targets.
They are in full working order.
No matter. They will be boarded up by order of the state.
There is no starker example of the disconnect between the political classes and the rest of us. For the political classes – all three main parties are as one over this – the only thing that matters is signing treaties on global warming.
They love nothing more than flying off to summits parading their green hearts. Only when they get home does reality strike and we have to start implementing their deals.
Five years ago we lived in a different world. Growth was not just a cherished wish but a reality. For many people climate change was the most pressing problem faced by the world.
And so green treaties seemed prescient – an example, it was proclaimed, of foresight and good stewardship of the planet.
But actions have consequences.
And we are now paying the price of the green lobby persuading governments to rip up decades of energy policy and start again.
Some of the less starry-eyed analysts warned at the time that by 2015 there would be an energy crunch as coal and oil plants were closed to meet EU green energy rules.
Added to that wasteful subsidies for wind power, a minimum price for carbon (due to come into effect on April 1) which would push up prices and the failure to bolster nuclear supplies have all added to the mix. And then came the financial crash.
In the pre-crash world the green obsession might, just, have been manageable if we actually wanted to throw money away on inefficient and unnecessarily expensive energy supplies. But in today’s world it is economic madness.
“Five years ago we lived in a different world. Growth was not just a cherished wish but a reality. For many people climate change was the most pressing problem faced by the world. “
Not one of the coal or oil plants now being closed needs to shut. The only reason they are being tossed aside is because of our green obligations.
Soaring energy costs are the opposite of what the economy needs as it limps from one quarter to another. We need to reduce the price of energy.
And yet governments – this one and the last – have constructed a new energy system calculated to inflate costs.
What is truly enraging about the perfect storm of energy chaos into which we are now plunging headfirst is that none of it is necessary.
The “fantasy” scenario I sketched above is, you see, no fantasy at all. It is the story of energy prices in the US over the past few years. Two huge economies. Two nations with vast energy needs. One – the US – has chosen to meet those needs and put its people first.
Another – the UK – has chosen the opposite path.
Because as well as saddling ourselves with crippling green commitments we have turned our backs on the new technology and method which has brought about such a revolution in the US: fracking.
In America the extraction of shale gas from rocks (fracking) has transformed everything. In one state alone – Pennsylvania – production of natural gas went from zero to more than the North Sea’s entire output in four years.
Gas prices in the US are now just 20 per cent of the equivalent price of oil.
The International Energy Agency forecasts that the US will overtake Russia as the world’s biggest producer of natural gas by 2015 and by 2020 will produce more oil than Saudi Arabia.
Yet in the UK we let the green lobby sneer at fracking and barely even pay lip-service to its possibilities, at the same time as we close down productive power plants and stand back watching while prices go through the stratosphere.
The political classes have treated the rest of us with contempt.
When Ed Davey says the only way for prices to go is up he is talking, quite simply, nonsense. And he is treating the rest of us as idiots.