The Conservative government in the UK has slashed support for renewables and is going all-out for shale gas and nuclear power. This is setting them on a collision course with devolved administrations in the UK, Scotland most of all, warn Peter Strachan and Alex Russell of Robert Gordon University in Aberdeen and Geraint Ellis of Queen’s University in Belfast. It won’t go over too well at the Paris climate summit either.
Prime Minister David Cameron and Chancellor George Osborne have made it clear that they wish to build a new fleet of nuclear power stations and further to exploit the gas reserves locked up in the UK’s shale deposits. The Conservative government at Westminster are now undertaking an economic ‘charm’ offensive to convince the general public and other stakeholders that both nuclear power and on-land shale gas extraction are good for the economy of the UK, and that any associated risks are manageable through planning and regulation.
The devolved administrations of the UK, however, are taking a far more precautionary approach (and in fact in some cases, have no say on nuclear power). Northern Ireland has recently adopted what amounts to a planning ban on fracking for shale gas, there is a fracking moratorium in Wales, and in Scotland a fracking moratorium has now been extended to include the controversial technique known as underground coal gasification (UCG).
Belief in a nuclear and shale gas boom appears to run deep within Conservative Party ideology, reflecting its free market tendencies
It is against this backdrop, that we reflect on the Conservative government’s energy position and analyse the implications of UK energy policy, with a particular emphasis on Scotland.
Economy and ideology
With mixed public opinion for new nuclear build and a palpable drop in public support for on-land shale gas extraction, it appears unwise for the Conservative government and particularly their Secretary of State of Energy and Climate Change, Amber Rudd, not to reflect a little deeper on some of the implications of its current crusade for nuclear power and fracking. The current approach suggests to us that the Conservative government is more fixated on generating new tax take (and profits for large energy companies) than ensuring that public concerns, and society’s long-term welfare, are fully addressed.
Belief in a nuclear and shale gas boom appears to run deep within Conservative Party ideology, reflecting its free market tendencies: it is being promoted by the Prime Minister, Chancellor, Ministers with responsibility for Energy (such as Andrea Leadsom) and by Scottish Conservative MSPs (such as Murdo Fraser Convenor of Hoylrood’s Economy, Energy and Tourism Committee). Combined with those with major economic interests, the Conservative government’s energy policy appears to rest predominantly on the claims of the economic benefits that nuclear power and fracking will generate, including new tax take, job creation and reduced heating and lighting bills for consumers.
Setting aside for now wider concerns, are such economic claims credible when it comes to shale gas?
The UK now appears to have lost its hard won status as a leading international player on energy and climate change issues
Although the economic benefits of shale seem to glitter, we don’t think it is actually, made of gold. Indeed, the UK lacks basic on-land fracking gas infrastructure and a skilled supply chain, while some of the companies involved are not based in the UK and so are likely to channel profits to overseas investors.
Furthermore, in the current climate of falling oil prices, rock bottom gas prices, and a European gas market that is unlikely to be sympathetic to British shale gas, the very logic of rushing into fracking appears as unstable as a shale bed after it has been fracked. These are serious risks to the economics of onshore extraction, which are compounded when combined with the wider concerns over fracking activity.
Even if on-land shale gas extraction eventually proves economically feasible in the UK, the benefits accrued by the few people who will share the spoils must be balanced against the need to protect land, the use and contamination (from for example ‘flowback’) of valuable water resources, broader health concerns, as well as the visual impact of multiple gas pads, never mind the potential for land tremors. It is crucially important that the UK learns from the environmental, safety and health concerns that are now being more fully reported, as well as the permitting and regulatory failings that have become apparent in the US dash for shale gas.
There are also major concerns that the opening up of such major fossil fuel reserves is incompatible with greenhouse gas emission targets of the UK and its component parts, including Scotland. With the fast approaching UN climate change conference in Paris, Conservative government shale intentions will surely prove to be an awkward conversation for Amber Rudd, particularly as this follows the early closure of the Renewables Obligation (RO) scheme, the slashing of solar power support, and other recent decisions, all of which Al Gore, the former vice president of the United States recently considered to be somewhat puzzling.
Further, the removal of renewable sources of electricity from the climate change levy exemption is already having a devastating impact on energy infrastructure investment in the UK (for example Drax has pulled out of a £1 billion Carbon Capture project), and there are increasing concerns that without a further big push the UK may not now meet their UK-EU 2020 renewable energy targets, with potential knock-on consequences from EU fines.
To conclude this part of the discussion, the UK now appears to have lost its hard won status as a leading international player on energy and climate change issues.
Implications for UK Energy Policy on Scotland
Scotland is an energy rich country, the UK’s energy bank, with abundant offshore oil and gas, and renewable energy resources such as onshore wind and hydro, and with significant potential for offshore wind, wave and tidal power.
During the past decade Scotland has led the renewable energy revolution in the UK. But over the period of a few months, Holyrood now finds itself in a position whereby its world class and highly successful energy policy appears to lie in tatters.
We suspect that UK energy policy as currently constituted may well have a devastating impact on the electoral fortunes of the Scottish Conservative and Unionist Party, and potentially even the Union itself
At a time when Scotland was fast moving towards its 2020 100 per cent renewable energy target; this now looks unachievable in the current energy framework set by the Conservative government’s retreat from renewables. If this continues, we imagine that Holyrood may well have to make the tough decision to publicly declare the abandonment of their renewable and world leading climate change targets, blame London for it, and highlight how it could be different if Scotland had autonomy on these issues.
In terms of shale gas extraction the Scottish government in announcing its fracking moratorium back in January 2015 and only this month widening this to include underground coal gasification (UCG) has made clear it wishes to take a more cautious and evidence based approach, compared to the dash for shale gas pursued by their counterparts at Westminster. In addition, the SNP have been long opposed to new nuclear build in Scotland and has pledged to block any future proposals using their extensive planning powers, so this is another strand of contention between Edinburgh and London.
Another factor but beyond the scope of the current article, is the UK transmission charging regime, which appears to discriminate against electricity generation in Scotland. Existing transmission charging arrangements have for example contributed to the decision by Scottish Power to close its Longannet coal power station.
In summary, Conservative government priorities around on-land shale gas extraction and new nuclear build, combined with existing transmission charging arrangements, are fracturing Holyrood’s relationship with Westminster. And at a time when political debate continues to focus on the question whether Scotland should be an independent country.
Debates over Chinese investment in the UK nuclear industry over recent weeks have further highlighted the credibility issues behind the Conservative government’s energy priorities. Whilst fixated on the need to deliver a new £25 billion nuclear power project at Hinkley Point C, the UK nuclear landscape in recent years has witnessed significant political and policy support in the form of market restructuring. Even so, we only slowly inch towards delivering the project, while the outcome of the legal challenge from Austria, has the potential to further embarrass the free-market credentials of the Chancellor.
When it comes to on-land shale gas extraction the Conservative government must also move beyond only considering economic opportunities and more fully consider the wider implications, or, opposition will spiral and the shale industry will become dogged down with local planning dispute after dispute. This is already being exacerbated by Amber Rudd threatening to intervene to ensure that centrally imposed timescales for planning decisions are adhered to, which will become a major challenge if councils try to assimilate the thousands of public objections usually prompted by energy and other development proposals.
These issues jar the greatest in Scotland, which has based a large part of its future on a thriving (sustainable and low carbon) energy economy, which is now being choked by the approach being pursued by the Conservative government at Westminster.
We would strongly recommend that the Conservatives take more stock of their energy intentions, and consider further the implications of their energy policies on its relationship with Scotland and the other devolved administrations.
It is already clear that in Scotland nuclear power, fracking for shale gas and transmission charging are going to feature heavily in the lead-in to next year’s Holyrood election. We suspect that UK energy policy as currently constituted may well have a devastating impact on the electoral fortunes of the Scottish Conservative and Unionist Party, and potentially even the Union itself. Of course, time will tell.
Peter Strachan and Alex Russell are professors at Robert Gordon University in Aberdeen and Geraint Ellis is professor at Queen’s University in Belfast.
This article was first published on Oilvoice.com and is republished here with permission.