Alaska’s decision to host the largest oil and gas lease sale of any US state this year is good news for the oil and gas industry, which has been pressing for more access. And while the resulting exploration and production certainly will be good for the overall economy – creating jobs and boosting activity – it is a pity that it is not against a backdrop of better news on the environmental front.
By this I mean concerted steps by the US government to reduce the use of oil as part of a larger effort to curtail carbon emissions. This issue has long disappeared from the political radar, despite being a key platform on which President Barack Obama was elected.
How strong a hand will Chris Huhne, the UK energy secretary, take into the Cancun talks? Will he be able to persuade foreign ministers and negotiators that the UK is playing its part?
As recently noted by the WWF’s EU climate policy tracker, the UK rates highly for its overall government policy, being the only EU country with a legally binding long-term commitment to reduce greenhouse gas emissions by 80 per cent by 2050.
But the problem is, British MPs are now warning that progress towards those targets is “unacceptably slow”.
Chris Huhne sped from his cabinet meeting this morning to address the European Future Energy Forum to send the message to investors that Britain is open for green business.
But will his warm words for the renewables industry and promises of solid government support mean much in tomorrow’s spending review? Not if a report in today’s Guardian is to be believed.
Green groups are worried that one casualty of the autumn spending review will be the “feed-in tariff” that allows anyone generating alternative energy to sell it back to the grid. It’s not that they believe the coalition would scrap it, given their various commitments to the agenda.
But they fear it could be delayed or watered down by Chris Huhne, Lib Dem energy secretary, under pressure from the Treasury. Ditto the Renewable Heat Incentive (a similar payment for producing alternative heat).
One figure from Friends of the Earth tells me that is is “absurd” for the Treasury to be reviewing the scheme given that it’s financed by public consumers rather than the government.
Chris Huhne, the UK’s energy secretary, said yesterday he was worried about the “financing of big renewable projects, particularly big wind farms”, which could hinder the government’s pledge to make sure 15 per cent of the country’s energy comes from renewable sources by 2020.
He has reason to be worried. At the height of the financial crisis, some of the UK’s biggest wind power projects were hit by a wave of withdrawals from financiers. In May 2008, Shell backed out of the London Array, while later that year, BP said it would focus instead on US wind power. Then, early last year, Iberdrola said it would cut its investment in the UK by 40 per cent.
But Huhne may be being a little disingenuous here. Industry sources tell us the major disincentive from building wind power capacity at the moment is not a lack of private investment, but worries about the government’s commitment to the necessary infrastructure.