Monthly Archives: June 2013

When it comes to energy, the UK is a fortunate country. First coal, then oil and gas in the North Sea, and now shale gas. It is still too early to say whether shale gas represents anything close to the wealth creation opportunity which came from the North Sea. But it is becoming clearer that the resources base is huge. The report published this week covered just part of the North and Midlands and came up with a central estimate of 1,300 trillion cubic feet. We have to wait, for reasons which are not completely clear, to see the estimates for the rest of the UK. Read more

Month by month, the consequences of the shale gas revolution in the United States are working their way through the international energy market. There has been much discussion of whether the US will permit shale gas exports in any quantity. But even before that is decided the growth of shale gas production in the US is already having an impact. The reduced need for US gas imports leaves supplies from Trinidad, North Africa and elsewhere to find a new home. That means that gas prices in Europe and Asia will fall. And even more important, shale gas is displacing coal from the US power generation sector. Read more

Businesses which rely on continuing public subsidies or particular formulations of public policy always carry added risk. The reality is that public policy changes. For a brief period there is full-hearted support, often driven by a crisis or a sense of looming danger. But the attention span of electorates and policy makers is short. Something else happens, another crisis looms and a new priority takes precedence.

The news last week that Siemens is to close its solar business is just one of many indications that for the renewables sector times have changed. Read more

Organisations die when they become irrelevant. That is what is happening to the G8 which, for reasons I can’t understand, continues to exclude China. When the G8 was formed in the 70s to bring together the leaders of the world’s main economic powers at a time of crisis and recession, China was tiny in global economic terms and focused on its own internal political struggles. Now it is at the heart of the global economy. Excluding the Chinese in favour of Canada or Italy is insulting. Read more

July promises to be a busy month in Whitehall Place, the home of the UK’s Energy and Climate Change Department. Unfortunately, however, despite the prospect of a flurry of activity it seems as if all key decisions will still be left on hold. Read more

If Samuel Beckett had made Godot a woman he would have called her Angela. That is the joke in Berlin where every policy is on hold and everyone – from the members of the Eurozone to the prospective nominees for the new European Commission – is waiting for Angela. And she in turn is waiting for the results of the election on September 22nd. Then and only then will we know the shape and balance of the next coalition Government. The result is a period of deep uncertainty, not least over energy policy which is frozen by indecision. Read more

The new estimates of shale gas resources published by IGas, one of the energy companies involved in exploration in the UK, complicate still further the decisions facing the Government on energy. Ed Davey, energy secretary, talks about moving to a point at which power supplies will be almost carbon free. But at the same time civil servants across Whitehall, including some from his own Department, have been asked to produce a paper on the competitiveness of UK energy supplies at a time when US costs are falling dramatically. That will be an interesting piece of work and should be published openly. Read more

As the FT reported on Friday, negotiations on the terms for new nuclear have advanced and there is increasing optimism that a deal can be done. The meeting between David Cameron and Francois Hollande in Paris two weeks ago amounted to a declaration of agreement in principle. Just three issues remain to be resolved. Read more