UK Energy Policy: Squaring the Triangle?

Over the last months there has been a lot of debate on the rise in energy prices in the government’s energy policy. With millions throughout the UK affected by an increase in their utility bills, energy policy has become more than ever before a prominent issue. Dan Byles (Conservative Member of Parliament for North Warwickshire) discussed this topic in 1 to 11 Meeting at BN Magazine’s head office in Piccadilly.

Energy Policy in the UK

There seems a general agreement on the need to decarbonize energy policies throughout Europe, but when it comes to defining what ‘decarbonisation’ actually entails as a project. “The Department of Energy currently focuses on three conflicting priorities: keeping the lights on, keeping energy affordable, and decarbonizing”, Mr Byles said. The affordability of energy remains a contentious issue in the United Kingdom, especially in light of rising prices.

Mr Byles’ speech revolved round four specific themes, underlying energy policy within the current political landscape: the overestimated influence of politicians, the so-called ‘Energy Trilemma’, the need to decarbonize, and the debate surrounding shale gas and hydraulic fracturing.

There are many reasons why energy prices have been rising recently, but the most crucial factor is probably the misleading debate taking place around the issue. The ‘dishonesty’ from politicians on how much they are actually able to control and influence the energy sector has fuelled a false myth, according to which politicians can control energy prices through rhetorical argument. For instance, Mr Byles referred to Ed Miliband’s price freeze plan as ‘economically illiterate’ and yet another demonstration of this misleading myth about political control over energy policy. This so-called myth was an underlying theme to his speech, arguing that some of the increases in prices are actually directly resulting from past government policy. “We have got old coal fired power stations, which have long since been paid for in capital expenditure and, when they start to shut down in the next few years, we are going to see another structural uptick in basic energy cost in the UK”, Mr Byles said.

The Energy Riddle

Successively, the speech switched towards another topic: the so-called ‘energy trilemma’ regarding the three conflicting priorities facing the Department of Energy. However, Mr Byles affirmed that – besides maintaining energy affordable, keeping the lights on, and committing to decarbonisation – there is another policy goal at risk: energy investability. Therefore, he pointed out that we currently face a ‘Quadrilemma’ rather than a ‘Trilemma’, where four diverging policy targets. “Investability requires investors to have a degree of consistency and confidence that the UK energy policy is not going to become a political football”, Mr Byles said with reference to his previous point on the increasing ‘politicization’ of this topical issue.

Decarbonisation

Regarding decarbonisation, he affirmed his firm commitment towards achieving this objective in the government’s energy policy. Nevertheless, he did not fail to remind the necessity for a proper plan towards the achievement of this policy goal; since “coal is the real enemy” in terms of environmental impact, it needs to be phased out of the system with a sound plan. Here, the still prominent role of coal stations without immediate replacement was reiterated once again as a credible obstacle to the achievement of such target. “The government cannot just wish a low carbon future in the distance”, Mr Byles said underlining the need for “a credible road map setting out how to get from here to a decarbonized energy in the future”.

Shale Gas

When the floor was opened to questions from the audience, Mr Byles started discussing one of the most contentious topics currently dominating energy policy, which regards shale gas. When asked about the status of developments in this sector, he explained that – while very little movement is predicted in the immediate future – there is potential for shale gas developments to become significant in the long run. Despite the presence of universal support across the main three political parties for shale gas, there are still many unresolved issues regarding the impact on local communities and the potential risks for the environment. Quoting a renowned saying in the nuclear energy sector, Mr Byles said that “an accident somewhere is an accident everywhere”: it only takes one careless developer to incur in an accident and the entire project can be scaled back to ‘square one’. That is not at all surprising, especially considering the amount of mass scrutiny on this issue and the influence of public opinion at a local level. This might also be the reason why – as Mr Byles promptly pointed out – entrepreneurs in this sector often advocate for tight regulation in order to safeguard their investments.

Fracking

A number of related questions successively came up about ‘Induced Hydraulic Fracturing’, which is more commonly known as ‘Fracking’. More specifically, given the various concerns voiced in public opinion about its environmental safety, it was asked whether there is any tangible risk that fracking could damage the environment. Mr Byles replied that any negative environmental impact depends almost entirely on how fracking is carried out because – if performed poorly – it can indeed cause problems to the environment and the United States provide examples of what might happen in this case. Once more it highlighted how, even in this case, it only takes one accident somewhere for the whole project to suffer a damaging setback. At the same time, Mr Byles affirmed that there are various scientific studies arguing that there is no evidence that – when done properly – fracking pollutes underground river or water resources. Where such episodes have occurred, the only blaming factor was always identified as faulty well engineering. Anyway, the Royal Society and Royal Tally of Engineers have been asked by the government to inquire further on whether hydraulic fracturing can be carried out safely.

Specialist Studies and Public Opinion

Eventually, when alleged that despite all assurances there is still sizeable research questioning the viability of hydraulic fracturing, Mr Byles expressed his disagreement on the subject. In response, he mentioned two academic studies from Cornell University and Duke University affirming that there is no direct proof that this process affects underground natural resources when it is carried out safely. With regards to this point, he promptly warned against the politicization of this issue and its consequent effects on public opinion, arguing that this issue is best judged by impartial arbiters such as academic studies; having said that, he added that such studies universally highlight that, when done in a proper manner, fracking does not damage water resources.