Policy

Saudi Arabia's newly appointed King Salman meets with US President Barack Obama

Saudi Arabia's newly appointed King Salman meets with US President Barack Obama  © SAUL LOEB/AFP/Getty Images

Having talked vaguely for many years about the possibility of developing nuclear power as an alternative source of energy, it seems that Saudi Arabia under its new leadership may finally be taking steps towards what would be one of the world’s largest nuclear building programmes over the next decade. Read more

News has diminished value if it comes from far away. Just as terrorism gets more coverage if it occurs in Paris, much of the analysis of the consequences of falling oil prices has focused on the US shale industry and the North Sea. But spare a thought for some of the other losers, starting with Nigeria where the fall will not only further damage a fragile state but will pose risks which could affect all of us before too long.

It would be good to be able to be optimistic about Nigeria — a country which in the past has been listed as one of the possible economic powerhouses of the 21st century. Remember MINT (Mexico, Indonesia, Nigeria and Turkey), the successor grouping to the BRICS (Brazil, Russia, India, China and South Africa)? Great acronyms invented by the always imaginative Jim O’Neill, but in both cases the groupings look a little shaky and performance is well short of promise. Nowhere more so than in Nigeria, which provides a sharp reminder that even if Opec is broken, oil is still vulnerable to political upheaval. Read more

View inside the Hunterston B nuclear power station

Inside the Hunterston B nuclear power station in Scotland  © Jeff J Mitchell/Getty Images

2015 will be a crucial year for the nuclear industry across the world. Japan is expected to start bringing its nuclear reactors back on stream — four years after the Fukushima disaster. Elsewhere, a dozen different countries are considering whether or not to commit to new plants, with the decisions further complicated by the fall in the price of competing fuels such as coal and natural gas. Much depends on what happens in the UK, where the progress of proposed new developments will signal whether nuclear can be competitive as a long term source of energy. Read more

BP oil platform in the North Sea  © Reuters

After 40 years of production that far exceeded original expectations, the North Sea oil and gas industry is in serious jeopardy. At the beginning of the year, there was a degree of optimism following Sir Ian Wood’s report and the establishment of a new, more interventionist regulator considered capable of driving a further wave of activity. But with the fall in oil prices over the past four months, the mood has changed dramatically. Read more

A solar thermal research facility  © Michael Hall/ Getty Images

Given the seriousness of the messages contained in last week’s report from the International Panel on Climate Change, one might expect some sense of urgency around the search for solutions. Regrettably, that is not the case. Governments and campaigners especially in Europe seem rigidly focused on pursuing the holy grail of a global deal, under which the world’s major economies would move together in a synchronised process of decarbonisation. The futility of that approach is evidenced by the fact that Europe itself has been unable to set an effective carbon price and has done almost nothing to advance the technology of carbon capture and storage (CCS), which is one of the few ways in which emissions could be managed. Read more

A postwar power cut; London 1947 (Photo by Reg Birkett/Keystone/Hulton Archive/Getty Images)

A power cut in London in 1947 © Reg Birkett/Keystone/Hulton Archive/Getty Images

Developed industrial economies should not be at risk of power blackouts in any but the most extreme and exceptional circumstances. The ability to anticipate demand and to put in place spare capacity may not be available to the poorest economies of sub Saharan Africa but it is certainly available in the UK. The risks of a tightening balance of capacity and demand have been obvious and widely discussed for at least the past three years. To have reached the point where National Grid are having to issue warnings and to tell some consumers that they will have to agree contracts which allow the supplies they need to be interrupted because of potential shortages of supply is shameful. Read more

  © Christophe Lehenaff / Getty Images

How far will the French government go in selling off some of its extensive portfolio of assets? In its last budget, the government said it would sell up to €4bn in shareholdings to raise money to pay down debt, or to invest in other companies. This could foreseeably include selling off parts of the government’s stakes in energy companies such as GDF Suez and EDF. But more may be necessary.

The ongoing conflict with the European Union over France’s persistent deficit, which according to the finance minister Michel Sapin cannot now be closed before 2017, is damaging France’s reputation as well as the all important relationship with Berlin. Some action is needed to buy German acceptance of a new timetable. Selling assets in itself would not solve the problem but could reduce debt levels and produce much needed revenue. As a concept, however, privatisation is still considered toxic in France. The terms of any sale will have to reflect these political constraints.

Any Brit commenting on France has to be careful after the childish abuse from Andy Street, the managing director (for the moment) of retailer John Lewis. France has its problems, as any Frenchman will tell you, but it is not “finished” or a country where “nothing works and nobody cares”. Mr Street should visit the thriving areas of the South West. He should remember that France, supposedly so hostile to globalisation, has 31 companies in the latest Fortune 500 listing against 28 each from Germany and the ultra-global UK. I hope that the Franco British Council, the Colloque and the other institutions that have laboured for years to build good relations with France are evidence that Mr Street speaks for no-one but himself. Read more

8th June 1939:  Babies in a row of cots brought out for some sun by their nurses at the Duchess of York's Hospital for Babies at Burnage, Manchester.  (Photo by Fox Photos/Getty Images)

  © Fox Photos/Getty Images

A new academic study, the results of which were published last month in the magazine Science, suggests that previous population projections have been understated. Rather than plateauing at 9bn the global population could rise during the current century to 11bn or more. How can the world manage such numbers?

The focus of attention – in politics, markets and companies – is so concentrated on the short term that long-term challenges are easily lost from sight. Tomorrow’s problems are left to tomorrow’s leaders. However understandable when individuals are working under the pressure of 24/7 news cycles and quarterly reporting standards, the result is that some of the most profound challenges are being neglected. Population growth is perhaps the most fundamental challenge of all because its consequences are so widespread.

The issue has been raised again by the publication of a new research paper from the University of Washington. Professor Adrian Rafferty and his colleagues argue that for a variety of reasons (including the success of the fight against Aids and the failure of attempts to spread knowledge on contraception), the global population could now be 2bn or more higher in 2100 than previously anticipated – that is within the lifetime of many of the children alive today. Read more

A sign pointing to Whitehall (Peter Macdiarmid/Getty)

  © Getty

Applications close this week for the newly created post of chief executive of the UK civil service. The general reaction to the advertisement of the vacancy has been muted, to put it mildly, with a much repeated view that the job is un-doable.

The role is certainly not an easy one – think of it as Yes Minister with knives – but the conventional wisdom is too negative.

Whitehall badly needs reform and this could be a good way to drive forward the changes which have been so elusive over the past few years. But if they really want change and a modern, professionalised civil service, ministers will have to adapt as well. Read more

William Hague (L) and Nato Secretary General Anders Fogh Rasmussen unveil the logo of the Nato Wales' summit (JOHN THYS/AFP/Getty Images)

The unveiling of the Nato Wales' summit logo (AFP/Getty)

In ten days time Nato’s leaders will gather in Wales for their bi-annual summit. There is certainly plenty to discuss at Celtic Manor – Ukraine, Iraq, Afghanistan and of course the continued inadequacy of defence spending which is leaving the military in many countries unable to fulfill all their stated commitments.

But tucked away in one bland paragraph of the draft communiqué now being circulated is a brief reference to energy security. Let’s hope there is substance behind the words.

Energy policy remains strictly a matter for national governments but the risks arise from the fact that many countries are dependent on imports for large proportions of their daily supplies. Forty years ago the risk came from the growth of oil imports and a reliance on Opec suppliers. Now the risk is an interruption of natural gas supplies. Gas has become progressively more important as a source for electricity production and for heating. The US and Canada are well supplied thanks to the development of shale gas, but Europe is not. Indigenous production in the UK and Dutch sectors of the North Sea has fallen sharply and Europe has slipped into a position where 70 per cent of its daily imports of gas come from RussiaRead more

China's Jiang Jemin, the CEO of CNPC and Tony Hayward of BP smile after signing a major oil deal with Iraq in 2009 (AHMAD AL-RUBAYE/AFP/Getty Images)

Happier days: China's Jiang Jemin, the chief executive of China National Petroleum Corporation, and BP's Tony Hayward, signing a major oil deal with Iraq in 2009 (AFP/Getty Images)

One of the ironies of the current chaotic situation in the Middle East is that a country that could arguably be at risk of losing the most is standing aside.

While the US and some European powers agonise over whether – and how – they should intervene to prevent the disintegration of Iraq, China is absent. But China needs Iraqi oil in growing volumes. The country’s import dependence for crude and products now stands at 8m barrels a day and is rising. According to the latest International Energy Agency estimates, Chinese imports could be well over 11mbd by 2030. That is on modest assumptions about economic growth and generous assumptions about gains in efficiency and substitution out of oil, in sectors where a switch is possible. The figure could be higher if China cannot increase its own production.

The only country in the world likely to be able to provide such an increase in production is Iraq, and it is no accident that China is heavily invested in the development of fields such as Rumaila and West Qurna outside Basra in the South. On the Iraqi government’s own figures, China is the largest foreign investor in the country’s oil sector. As US oil consumption and import requirements decline, energy security has become a Chinese issue. Read more

Last week I wrote about the forthcoming independence referendum in Kurdistan. To move from events there to what is happening in Scotland is a surreal experience. In Erbil the vote will be a deadly serious matter which could create a new country for a nation which as they say has no friends but the mountains having been a victim of international betrayal and cynicism for centuries. There is no knowing whether the Kurdish referendum will end in triumph or tragedy. In Edinburgh what should be an equally serious debate about breaking the relationship with the rest of the UK is now close to a farce. Read more

Getty Images

Why are renewables moving so slowly? Of course the output of renewable energy is growing in absolute terms and in terms of market share in most countries in the world. But the growth starts from a very low base. On the International Energy Agency’s latest numbers, renewables provide just 13 per cent of total global energy needs at the moment, and will provide only 18 per cent by 2035. If traditional biomass is excluded the figures are 7 per cent and 14 per cent.

The problem is cost. Electricity produced from offshore wind and solar costs somewhere between 50 and 100 per cent more per MW/hr than power from natural gas and, with some variations, will continue to do so for the next decade unless one makes the assumption that gas prices are going to increase. Onshore wind is cheaper and in the US in particular is the closest of all the renewables to being competitive without subsidies. Read more

Storms ahead? Photo by Getty

Spare a thought on this bright summer’s day for two men struggling to reconcile truth and political reality.

Oliver Letwin, Cabinet Office Minister in the UK government and Jo Johnson MP, head of the No 10 policy unit, have the task of writing the first draft of the Tory Party’s manifesto for the election next May. The manifesto will have to include something on energy policy.

Both Mr Johnson and Mr Letwin are decent men who can generally be relied upon to speak and act honestly and honourably. That is where their problems begin. On energy policy how can they tell the truth about a policy which by common consent – among business, academics and the serious NGOs – is a costly failure? Read more

France has a new energy policy. Although some saw the statement presented for debate in the National Assembly ten days ago as simply political rhetoric designed to draw green support behind the Government, beyond the fine words and long term aspirations some of the tough immediate steps being taken suggest that the shift could be more serious. If so the statement will mark the beginning of a gradual but inexorable run down of the French nuclear business. Read more

Premier Li Keqiang of China is due in the UK this week. Despite all the challenges and potential disagreements there is scope for much closer cooperation around joint work on big issues. Energy should be at the heart of the discussion. Read more

By common agreement the situation in Iraq is dangerous and deteriorating. By similar common agreement there is no appetite for international intervention to do anything about it. Neither the US or Europe or anyone else will be sending forces into the besieged cities Mosul or Kirkuk. After more than a decade of unsuccessful wars in Iraq and Afghanistan, there is no public or political support for engagement anywhere – not in Syria, Libya or now in northern Iraq. Though totally understandable, I think this is profoundly wrong and very dangerous. Read more

A 220-page document entitled “Commission Staff Working Document: In-depth study of European Energy Security” is hardly designed to be a best-seller. Few outside Brussels will read the European Commission paper in full, which is a pity because it is an excellent piece of work. It also provides the basis for a series of proposals contained in an accompanying document, which if accepted and carried through could create a common energy policy for the EU comparable in scale, scope and cost to the Common Agricultural PolicyRead more

The decline of North Sea oil and gas production continues. The trend is now a problem not just for the Scottish Nationalists but also for the UK Treasury and the 450,000 people who work in North Sea related businesses. The deplorable thing is that the decline is unnecessary and could be halted. Read more

Image Getty Images

Many revolutions fail. They run out of ammunition or leaders or popular support. We hear a lot about the revolutions which succeed. History is written by the winners. But we hear much less about the failures – the promises of change which don’t materialise. Read more