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Energy companies have burnt up the future

The abandonment of strategic energy planning has left UK consumers facing a massive bill for gas bought at high wholesale prices to cope with demand during the cold snap.

When gas was privatised in 1990, energy supply was handed to the market and everyday forward planning, such as buying gas when it is cheap and storing it for future use, went by the board.

Britain has only enough storage to supply the country with gas for 15 normal days, compared with 99 days in Germany and 122 in France (Feb 2009 figures). And these are not normal days!

As a result, wholesale gas prices in Britain rose to an 11-month high this week, a cost that will be passed on to consumers. Winter bills will already be much higher, as people are forced to turn up the heat in millions of poorly insulated homes across this country.

After privatisation, the gas poured out of the North Sea and was sold into the market at breakneck speed, bringing prices down. The ‘dash for gas’ began, as power stations switched away from coal.

But just to be clear about where we are now, the latest energy generation data shows that as the temperatures dropped, 45% of output was being produced from coal, 37% from gas, 15% from nuclear power — and just 0.2% from wind.

Now North Sea gas is running out, and the supply from other countries looks increasingly fragile. It is unprofitable to open up new North Sea oil and gas fields in the midst of a recession and the energy regulator Ofgem, warns that the UK gas market faces a "cliff edge" in 2015-16 that could cause supplies to run short in the second half of the decade.

Britain’s energy security is threatened as never before. Obsolete coal and nuclear stations will shut over the next 10 years, and there is no replacement lined up.

The recent grant of licenses for offshore wind farms does not mean they will be built. The winning consortia face huge problems: lack of affordable finance, skills shortages and the rising cost of imported turbines as supply fails to keep up with global demand. Government subsidies for wind power are guaranteed only until 2014, and who knows if they will survive the coming bonfire of public spending.

Other initiatives are being explored – for example coal gasification which pumps water and oxygen into under-sea coal seams, and the resulting gas extracted through a well. The claim is that the CO2 would then be sequestered back underground. But there is no evidence that this is safe, and that over time it will not simply leak out, with disastrous consequences.

And the cost of sequestering the CO2 will greatly add to any coal operation – whether burning or gasification – already BP has pulled out of a coal gasification initiative at Peterhead in Scotland. The French company EDF mothballed its plans for a new coal-fired power station at Kingsnorth in Kent because they can’t presently see how to make it profitable.

Not only is the profit-driven capitalist market incapable of delivering a safe and renewable energy supply, that reduces CO2 emissions, it is even incapable of providing more of the same kind of energy supply that we have now. They have burned up the future, and they have no answers.

It would be madness to continue placing our energy future in the hands of that same market. The time has come to remove control of our energy futures from the hands of the energy corporations – and the governments that can’t see beyond them – and place it under democratic control.

Penny Cole
Environment Editor
14 January 2010

Dave says:

Your history of the crisis of gas supply leaves out the most important part. We had enough gas in the north sea to last centuries as a premia fuel, used in domestic applications. Cooking the dinner and heating your water. But John Major taking up the war against the miners which Thatcher had left off, decided to use gas to wipe out coal's market. The Dash Of Gas, was an entirley political device, to replace coal fired generation and the strategic position of the NUM with unnecessary and wasteful gas powered stations. Millions of tonnes of gas have been burned off generating power while fifty large coal mines, and 60,000 miners were thrown on the scrap heap. Gas generation was more costly than coal generated power, unemployed coal miners produced nothing, and are dependant now on benefits, communities rotted. Now the gas has gone and the costs rise still further, there will be a demand..to return to coal ? Not likely, it will be for the building of multiple nuclear power stations, 180 times more expensive and a million times more dangerous in social terms than mines. There is no shortage of fuel resources in Britian, we sit on hundreds of years of untapped coal seams. 60,000 miners and their families sit on the dole, or on benefits in utterly wrecked communities. New Labour would rather build a forest of hugely expensive and environmentally destructive wind turbine estates than fund a relaunch of the coal industry, all for entirely political, class war reasons.

Incidently the notion that co2 pumped into abandoned gas wells could 'leak out' is laughable really. If there was methane in there in the first place, it obviously didnt have any leaks, otherwise there would have been an empty hole. Methane is a worse greenhouse gas than co2, so if there is a geological crack somewhere its better we drain the gas off and have co2 in there anyway. But truth is, they cant really leak, not unless the earth is hit by some huge calamity likely to break a mile of strata to its core, in which case a bit of leaking co2 will be the least of our problems. Truth is many of the greens dont want CCS to work, because they dont like coal mining in particular and industry in general. Dave Douglass NUM

Dylan says:

Most people who have left comments below, seem to be searching for answers beyond the free - market and 2/3 party system. The Venus project developed for 60 years by 94 year old Jacques Fresco, has some answers I think, but certainly not all & worth a look.

The Venus Project presents a bold, new direction for humanity that entails nothing less than the total redesign of our culture. There are many people today who are concerned with the serious problems that face our modern society: unemployment, violent crime, replacement of humans by technology, over-population and a decline in the Earth's ecosystems.

As you will see, The Venus Project is dedicated to confronting all of these problems by actively engaging in the research, development, and application of workable solutions. Through the use of innovative approaches to social awareness, educational incentives, and the consistent application of the best that science and technology can offer directly to the social system, The Venus Project offers a comprehensive plan for social reclamation in which human beings, technology, and nature will be able to coexist in a long-term, sustainable state of dynamic equilibrium.


Bruce says:

Yes, alternatives do exist, not only to current governments but to the interests of the multi nationals and Capitalist globalization. Capitalism needs to make a profit. For a period of time it was progressive and took humanity forward, NOW it no longer does, and in fact holds back society as a whole. This was demonstrated by the debacle at the Copenhagen climate summit where the interests of the majority of the peoples of the world, were squandered by the interests of the political and economic systems, of the east and west. Their all consuming hunger for profit prevailed. Reform and regulation have failed us and along with the "hollowing out of the state" the function of the state is simply transferred to other supra-national bodies, read Unmasking the state. Reforms granted to us, that had to be fought for and were not given are now being clawed back. What is needed now, is the confidence and imagination to go beyond what is, and to fight and plan for what is possible.


Robbie says:

What we have at the moment is the dictatorship of the many by the few - its just that the few have all the money and power. At some stage we do hope that enough people will agree that we need to overthrow the dictatoship of the moneyed, so we have to develop our arguements about the disasters that are happening in the world [and the solutions], and this is just what Penny is trying to do here.


Tim says:

The common theme here seems to be the idea that an alternative exists to current governments that Robbie and Pen and others perceive to be intrinsicly unable to represent the interests of society. What, apart from the unwillingness / apathy of the electorate, is stopping a new political party being formed that represents these views and seeking to persuade the majority of people to vote for it? If it talked sense and was able to show how it would be different, more effective, more responsible and more democratic then isn't the electorate mature and moral enough to choose to vote for it? The alternative must be coercion and the dictatorship of the many by the few "enlightened ones" and that doesn't seem like much of a step forward.


Madeleine says:

Just to say, I think your argument is good, Penny. I just worry that capitalism's excesses :recession; climate change 'natural' disasters, provide self-serving emergencies which they in power claim only they- and corporate capitalism- can correct. The contradictions inherent in capitalism are obvious at the moment, but are people too afraid in the short-term to look up? I don't have answers which is why it is so important that people like you provide some.


Robbie says:

Tim has raised some interesting issues. The market will indeed find solutions. It has to for its very survival. But its "solutions" are to continue making profit no matter what damage they inflict on the planet. Our solutions have to enable the continued use of energy and travel without damaging the eco-system. We will not be able to resolve this until we rid ourselves of corporate dominated government and replace it with a body that represents the interests of ordinary people and the workers who work in these industries.


Tim says:

Penny - Surely "the market" has a motive to solve the problem as well? There is no money to be made in gas once there isn't any. There are signs that companies that rely on diminishing reserves are looking at ways to replace them. Car firms, for example, will still seek to sell cars after there is no petrol (electric ones, it seems certain)- it is just that it is only just beginning to become profitable to do so. Alternative sources of energy will also become more and more profitable as resources decline.

I do agree, however, that the market left totally to it's own devices is amoral and, where it ceases to serve the interests of society, immoral. There needs to be conscious control and intervention, particularly when it comes to basic infrastructure planning. The market will probably solve the problems when it becomes profitable to do so but the wrench of such a change will cause huge hardship if left to market forces alone. (I suspect the reason that Germany and France are more focused in the area of reserves as a result of their experience of WWII. Threats to national survival produce a stronger awareness of the governments responsibility to insure against emergency and to protect it's population against the effects.)

I think the market is an effective servant but a poor master and longer term planning and investment needs to come from governments to set the conditions for the market to work in societies interests. I can't see how "democratic control" - (what you mean by that is not stated but I imagine you mean some form of direct democracy) avoids government. Any kind of democracy would surely have to be exercised in the election of a government of some kind.

You state the weakness of a market left to run without intervention accurately. The alternative must surely be the growing awareness of our situation (which articles like yours promote) and the consequent growing willingness of the electorate to elect governments that will take action to invest in research and to drive the market in a direction that puts alternative energy resources in place before society is driven (at huge cost in terms to individuals) to do it out of absolute necessity. At the end of the day it will depend on whether people can see far enough beyond their own immediate self interest to do that or not.


Peter says:

North Sea gas, which is good for cookers and the home, was originally scheduled to last for 100 years or more. The Tory governments of the 1980s and 1990s, however, first privatised the gas industry and then persudaed their friends who now owned it to be a party to the destruction of the coal industry. They "burned up the future" by switching power stations to burn gas, allowing the closure of nearly all the coal pits, an act of revenge and folly that cost about 750,000 good well-paid jobs--as every miner suported 2 or 3 other jobs. They also closed down all the facilities and plants researching clean cloal technology.


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