Three ways to secure our energy - but has the scramble started?

If a week is a long time in politics then five months is so long that the policies that were espoused then as solutions are as odd to us as those that were offered a hundred years ago.

It was only a month ago that our Foreign Secretary, David Miliband made an important speech at the London School of Economics. Mr Miliband is one of these very bright people who went to Oxford where he studied Politics Philosophy and Economics and his subsequent career has been exclusively in politics, as far as I can gather.

He argued in his important speech that there was a “resource crunch” which has led to prices of fuel and food rising tremendously. Certainly the prices of food and fuel have been rising, as have the price of most raw materials and commodities. The term “crunch” is in this context rather meaningless; I prefer the word “shortage” because I think that the rising prices are due to simple supply and demand.

Mr Miliband’s solution to his so called resource crunch is that Europe should lead the world in a low carbon economy by switching to renewables and nuclear energy. This would make Europe less dependent upon undemocratic nations where they have plenty of fuel. He rightly pointed out something that the world risks a scramble for resources with nations pitted against each other for a share of the resources that we all need.

I cannot argue against Mr Miliband’s analysis of a month ago. Indeed he has voiced conclusions that I reached some years ago. He has tagged his comments with fairly meaningless phrases like “a low carbon economy”, as though carbon was in some way responsible by itself for climate change and the woes of the world, rather than people, who act and behave in ways that create carbon dioxide emissions.

As welcome as Mr Miliband’s ideas are, barely a month later events have moved on; his boss, Mr Brown, has been urging the oil companies to produce more oil, in order to drive the oil prices down as though low oil prices will have no effect on oil consumption or carbon dioxide manufacturing. The Chancellor of the Exchequer, Mr Alistair Darling has also been urging the oil companies to produce more oil.

In the North Sea the Government has been trying to pressurise Total to increase the size of a pipeline that Total are going to build, to enable it to serve more fields and more places in the United Kingdom. Total, like any good capitalist can spot a politician panicking has asked for subsidies as the price of increasing the pipeline capacity. Again, presumably this will all have an effect on carbon dioxide manufacturing.

Eventually the government will have to make up for their lack of a viable energy policy or else not only face the political consequences but more importantly have the nation suffer until someone sorts it out.

If you think that I am being unfair to the government let me remind you of the key Government’s strategy for energy security (along with nuclear energy and conserving energy) from the December 2007 White Paper:

 

Make further progress in achieving fully competitive and transparent international markets

This will enable companies to get fair access to the energy resources we need. Effective markets will ensure that the world’s finite resources are used in the most efficient way and ensure that we make the transition to a low carbon economy at least cost.

Now the problem with this strategy is that we do not control and cannot influence international markets. I doubt if other nations will stand back to enable our companies to get “fair access” to energy resources they need. What is “fair access” and who defines need?

Well it seems that the futility of this strategy is now recognised. It will be every nation for itself when it comes to energy; I can see no alternative other than an unhealthy scramble for resources. Mr Miliband warned against this but what else are the government doing by talking to the oil companies and OPEC?

Once we accept that there will inevitably be a scramble for fuel (it has probably already started) there are only three ways that the United Kingdom can have a secure energy supply and in the real world we will have to do all three:-

• Build up fuel stocks. It will be hard to do this having had nearly twenty years of a free market in energy which has encouraged the energy companies in the main to operate a “just in time” policy. The easiest stocks to build up are those for nuclear energy and I guess we have enough stock of uranium to last us a few years. We have enough stock of oil and coal to last a few days and enough of gas to last a few hours.
• Implement more ways of conserving energy; energy conservation has been the one part of energy policy that the government has paid some attention to. It may be that they have implemented incorrectly (by having it implemented through the energy supply companies) but a lot of taxpayers’ money has been spent on it – although much less than taxpayers spend on the BBC. Conserving energy is very important but I doubt just how much energy insulation saves behaviourally; if energy becomes cheaper to an energy consumer by conserving it there is a tendency for the consumer to use more of it.
• Renewables: Mr Miliband was right about renewables. We need to invest heavily in them and in all of them. So far there is just modest investment in wind turbines, with almost no investment worth speaking of in solar thermal or photovoltaics or heat pumps and the like.

However not only is five months in politics enough to make the mind think in historical terms so is three weeks. Three weeks after Mr Miliband’s speech the Government of which he forms part set off on a scramble to secure more oil and revisiting policies to save more energy. So far they have ignored renewables. Renewables, not nuclear or energy conservation forms the basis of long term energy savings, emission savings and a vibrant low carbon economy and they are still sadly ignored.