Power Struggles
The UK’s Ongoing Energy Crisis
By Harry Phibbs.
Not all countries can be energy-independent. In an open global market, though, that does not stop them from prospering. Hong Kong and Singapore offer high living standards despite producing virtually none of their own energy, or anything much else in the way of natural resources. It wouldn’t make sense for them to produce their own food, either. David Ricardo’s law of comparative advantage applies in a particularly stark form.
It is also true that in a dangerous world, where it is economically viable for countries to be energy producers, there is an important bonus of greater resilience and stability. Even if we see regime change in Iran eventually transpire and a fall in oil prices, we don’t yet know what new challenges are to come. Despite such uncertainties, it still does not make sense to have subsidies to enable home-produced energy on national security grounds. Better value for money for the taxpayer in that respect would be achieved by strengthening defense capacity—for instance, air defense to counter attack from missiles and drones.
Yet what is extraordinary is for a country, such as the United Kingdom, that could profitably meet its own energy needs to be prevented by its own Government from doing so. It could grant licenses for new oil and gas extraction in the North Sea. Instead, this is banned, as part of the futile quest for “net zero.” Even in its own terms, it makes no sense. The Norwegians are drilling in the same basins and are finding billions of barrels of oil—some of which they in turn export to the UK. How does that benefit the environment? At least the miserablist hairshirt efforts to reduce consumption pursued by the eco-warriors have some internal logic. Maintaining consumption but cutting production while buying the stuff elsewhere instead does not.
At least Norway is a friendly country. Even so, on May 19th, the UK decided to waive some Russian oil sanctions, allowing imports of diesel and jet fuel processed in third countries from Russian crude. That is a policy at odds with the professed determination to “stand up to Putin.”
Even if there was a permanent outbreak of peace and harmony in the world tomorrow, the UK Government’s energy policy is an act of economic self-harm of such obvious severity that it borders on insanity. The British are paying three times as much for their energy as Americans. High energy bills have been choking economic growth in the UK for decades. Current policies mean that the gap is widening. The International Monetary Fund projects economic growth in the United States this year to be around three times faster than in the UK.
It is all the more exasperating as Brexit would have allowed the British to ditch the damaging regulations from the European Union on climate change and other matters that have been thwarting our energy production, should we so choose. Instead, we have increased taxes, delays, and restrictions—especially since a Labour Government came in two years ago with the Energy Secretary Ed Miliband, whose hostility to fossil fuels equates to religious zealotry.
One potential bright spot for the British amidst the doom comes with fusion. As Ambrose Evans-Pritchard reports in The Daily Telegraph:
[T]he US company Type One Energy said it planned to build a stellarator fusion reactor on British soil in a consortium with the UK’s Tokamak Energy, which will supply the specialist superconducting magnets that squeeze the plasma to 100 million degrees—the temperature required to fuse hydrogen isotopes and replicate the process of the sun.
Evans-Pritchard adds that “Warrick Matthews, Tokamak Energy’s chief executive, said this 400-megawatt project promised to be the first functioning fusion plant in Europe, aiming to generate power for the grid from 2034.” The UK Atomic Energy Authority has “pioneered the most business-friendly regime for fusion plants in the world” while “the EU has yet to come up with its long-delayed fusion strategy.”
Allowing innovation to flourish has exciting potential. But the British are missing out on a tried and tested method for cheap and abundant energy to be made rapidly available. Of course, that is from shale. For some years it looked as though it would happen—despite the onerous planning delays. Now there is a complete prohibition. Nervousness has been prompted by some thoroughly dishonest scaremongering about causing “earthquakes” as a result of the drilling—which are, in reality, tiny tremors equivalent to the vibration felt in a house if a truck drives past.
A report from the Royal Society and Royal Academy of Engineering states that:
There is an emerging consensus that the magnitude of seismicity induced by hydraulic fracturing would be no greater than 3 ML (felt by few people and resulting in negligible, if any, surface impacts). Recent seismicity induced by hydraulic fracturing in the UK was of magnitude 2.3 ML and 1.5 ML (unlikely to be felt by anyone).
A fracking revolution in the UK would not result in anyone dying in an earthquake any more than it has in the United States. The cheaper energy that could be provided would save British lives—both directly, given the excess winter deaths suffered by the elderly due to hypothermia, and more broadly as the subsequent economic growth would result in longer life expectancy.
Perhaps we will get there one day. Recent polling in the UK shows 41% support for fracking with 30% opposed. (It also showed that 57% back drilling for oil in the North Sea, with only 15% opposed.) Both Reform UK and the Conservative Party wish to end the ban on shale. The Labour Government is unpopular and shows signs of imploding. So there are signs that the voters are coming around—but what a heavy cost there has been in the decades of delay.
Harry Phibbs is the Local Government editor of Conservative Home. He is a contributor to CapX and a former councilor on Hammersmith and Fulham Council in London.