Sunday, September 20, 2009

Coming together

Anyone who thinks our energy supply is about greenery and "carbon footprints" is living on another planet. There are few things more intensely political, more so when we are about to become a net importer of gas which, for the foreseeable future, is to provide the mainstay of our electricity generation.

It is thus more than a little bit interesting to see two apparently disparate issues – the prospect of power cuts in the not too distant future, and the release of the "Lockerbie bomber" – come together, the links assembled by Christopher Booker in the main story for his column.

No reasonable person who has studied the Lockerbie issue, and read the transcript of the trial of Abdelbaset Ali Mohamed Megrahi, can come to any other conclusion other than – at the very least – he was not given a fair trial. More specifically, such are the gaping holes in the case, and the political ramifications behind the investigation, that his guilt must seriously be in question.

That leaves open to speculation as to why the British government should have put itself so much out on a limb to engineer the release of Megrahi, over and above the desire to prevent the case coming to appeal, with the risk of embarrassing disclosures. To that effect, there has been much speculation about trade deals with Libya, and in particular the pursuit of "lucrative oil and gas contracts".

However, as Booker points out, it is the need for gas more than oil which explains why the British government has been so keen to make friends with Libya, going back to Tony Blair's visits to Gaddafi in 2004 and 2007.

The primary concern is that, within six years we face an unprecedented energy crisis, arising from the loss of 40 percent (20 gigawatts) of our generating capacity, through the closure of eight ageing nuclear power stations and nine coal and oil-fired plants under an EU's large combustion plant directive.

The prospect of power cuts arising from capacity shortages – much discussed on this blog – has more recently won rather wider publicity through the dismal distortion by Tory propagandists of an obscure government graph. But, as we had already pointed out, behind the scenes, a "silent revolution" in the energy industry has been taking shape, with a new "dash for gas" to replace missing capacity.

This, Booker tells us, arises entirely from the failure of the government's own energy policy, its delays in getting the nuclear programme started and its insane reliance on wind power. But, as explained by Tony Lodge in his CPS pamphlet, Step off the Gas, there is a huge downside to this new "dash for gas", just as our own North Sea gas is fast running out.

Apart from the fact that using gas for electricity is highly wasteful (losing half its energy value), the government's hope that 70 percent or more of our power can come from gas (80 percent of which will have to be imported) is astonishingly reckless, in two ways.

First, we would be heavily dependent on countries which are politically unreliable, such as Russia or Qatar (which is vulnerable to the closure of the Straits of Hormuz). Second, gas prices are likely to soar, as other countries chase the same supplies, and we would be particularly vulnerable to price hikes through our lack of gas storage facilities.

This threatens to raise electricity prices high enough to plunge millions more households into "fuel poverty", defined as those which spend 10 per cent or more of their income on lighting and heating. (Ofgem calculates that every 10 per cent rise in gas prices pushes another 400,000 homes below this "poverty" line.)

And that is why, in gambling that we can derive 60 percent of our future power from imported gas, the Government has been so keen to cosy up to Libya. It is there that BP has already embarked on a £550 million project to find and develop enough liquefied natural gas (LNG) to give Britain the secure supply needed to keep its lights on.

Such deals, of course, are the stuff of real politics – no one ever said it was anything other than a dirty business. And it may have helped to send Megrahi home, but it won't be enough to save millions more British families from finding it harder than ever to pay their electricity bills. As with everything else, there is always a price to pay. And it is always the "little people" who pay it.