The miserable truth is that our leaders don’t want us to have cheap energy–Dan Hannan

By Paul Homewood



And an excellent piece by Dan Hannan as well:



No, the energy crisis is not some unforeseeable consequence of the Ukrainian war. It is the result of years of wishful thinking, preening and short-termism. We sit on 300 years’ supply of coal. We have rich pockets of gas trapped in rocks beneath Central Scotland, Yorkshire, Lancashire and Sussex. We have as good a claim as any country to have invented civil nuclear power. Yet, incredibly, we face blackouts and energy rationing.

The calamity into which we are heading this winter represents a failure of policy under successive governments going back decades. The fact that much of Europe is in the same boat – and that poor Germany is barely in the boat at all, but is clinging by its fingertips to the gunwales – is no consolation.

Like their counterparts in other Western countries, our leaders are now scrambling to make up for past errors. More nuclear power-stations are mooted. The ban on shale gas extraction is reviewed. Sudden attention is paid to potential new sources of clean fuel, from hydrogen to fusion. All good stuff. All too late.

You can’t build a nuclear power plant in less than five years. Even fracking takes around ten months to come online – and that assumes that you have first cleared all the planning hurdles. Hydrogen has vast potential, and what Britain is doing with fusion, not least at the Atomic Energy Authority’s facility in Culham, is mind-blowing. We may well be less than two decades away from solving all our energy problems. But none of that will see us through next winter, when average household fuel bills are set to rise to over £4000.

How did we allow ourselves to become so vulnerable? It was hardly as if disruption in global energy markets was unthinkable. Most of the world’s hydrocarbons are buried under countries with nasty governments. For every Alberta, there are a dozen Irans; for every Norway, a dozen Nigerias. There is even a theory, first advanced by Juan Pablo Pérez Alfonzo, the Venezuelan energy minister who founded OPEC, that the very fact of having oil turns a country into a dysfunctional dictatorship.

We have seen wars, blockades and revolutions across petro-dollar economies. We knew that a break in supply was always a possibility. And it was hardly as if Vladimir Putin was disguising the nature of his regime, for heaven’s sake.

No, we are in this mess because, for most of the twenty-first century, we have ignored economic reality in pursuit of theatrical decarbonisation. Actually, no, that understates our foolishness. Decarbonisation will happen eventually, as alternative energy sources become cheaper than fossil fuels. It is proper for governments to seek to speed that process up. But this goes well beyond emitting less CO2. Our intellectual and cultural leaders – TV producers, novelists, bishops, the lot – see fuel consumption itself as a problem. What they want is not green growth, but less growth.

As Amory Lovins, perhaps the most distinguished writer to have been involved in the move away from fossil fuels, put it in 1970:

“If you ask me, it’d be little short of disastrous for us to discover a source of clean, cheap, abundant energy because of what we would do with it.”

The idea that cheaper energy is a positive good – that it reduces poverty and gives people more leisure time – has been almost wholly lost. We have convinced ourselves that if it isn’t hurting, it isn’t working. The reason we slip so easily into talk of banning and rationing is not just that the lockdown has left us readier to be bossed about. It is that we have come to regard the use of power as a sinful indulgence.

But raising the price of energy is not something we can do in isolation. When power becomes more expensive, so does everything else. Fuel is not simply one among many commodities; it is the enabler of exchange, the motor of efficiency, the vector of economic growth.

When did you last hear a politician admit as much? When did you hear any public figure extol cheap energy as an agent of poverty alleviation? When did you hear any historian describe how coal and later oil liberated the mass of humanity from back-breaking drudgery and led to the elimination of slavery? For ten thousand years, the primary source of energy was human muscle-power, and emperors on every continent found ways to harness and exploit their fellows. But why bother with slaves when you can use a barrel of sticky black stuff to do the work of a hundred men – and without needing to be fed or housed?

The reason no one says these things (other than Matt Ridley) is, to be blunt, that it is unfashionable. The high-status view is that we are brutalising Gaia, that politicians are in hoc to Big Oil and that we all ought to learn to get by with less – a view that it is especially easy to take if you spent the lockdown being paid to stay in your garden, and have no desire to go back to commuting.

Extinction Rebellion, Insulate Britain and assorted anti-capitalist frondistes are openly and unashamedly anti-growth. For them, low-cost energy has dragged humanity away from the closed, local economies that they want. As Paul Ehrlich, the father of modern greenery, put it in 1975:

“Giving society cheap, abundant energy at this point would be the moral equivalent of giving an idiot child a machine gun. With cheap, abundant energy, the attempt clearly would be made to pave, develop, industrialise, and exploit every last bit of the planet”.

Tories don’t put it that way, of course, even to themselves. But they are still tugged by the cultural currents of the day. So they find ways to rationalise higher taxes, higher spending and anti-market measures with which they would normally have little truck.

Typically, they do so by playing up the economic opportunities that green technology will supposedly bring. Boris Johnson extols them with such gusto that he seems genuinely to have convinced himself. But it is pure hogwash. If there really were such opportunities, investors would find them without needing the the state to ban some fuel sources and subsidise others.

Green growth is a fallacy for the same reason that, as Frédéric Bastiat showed in 1850, you can’t make a city wealthier by smashing its shop windows. Doing so might immediately generate growth – nominal GDP often rises sharply in the aftermath of a natural disaster – but every penny spent by the shopkeeper on new windows (and by the glazier who now has extra income, and by the people he buys from and so on) is a penny that would have been spent more usefully without the breakages. In the same way, every penny spent on green “investment” is a penny that has been taken out of the productive economy through taxation.

None of this is to argue that governments shouldn’t seek to mitigate climate change. They should. I just wish they would admit that doing so is expensive. Green jobs are a cost, not a benefit. If you banned the use of diggers and had lines of workers with spades instead, you could argue that you had “created” jobs; but you would have made everyone worse off.

Conservatives should approach climate change in neither a masochistic nor a messianic spirit, but calmly, transactionally, hard-headedly. If there is good reason to believe that advances in technology will lead to sharply reduced costs, then let the timetable slip accordingly. If something more urgent comes along then, similarly, make a cool assessment of where your priorities lie. When the coronavirus hit, several fiscal targets were abandoned on grounds that there was a more immediate crisis. The current energy shortfall should prompt a similar reassessment.

Consider this. The transition from relatively dirty coal to relatively clean gas required very little state involvement. The Thatcher government simply withdrew subsidies and allowed the market to do its work. Carbon emissions fell and the air became cleaner.

Since then, though, we have had a much more interventionist approach, with price caps and green levies and subsidies for consumers and grants for producers and bans on new technologies (notably fracking). Result? Prices have risen and supply has fallen – to the point where, like some South American dictatorship, we are about to order our population to get by with less.

Please, ministers, stop trying to help. Stop spending and taxing and printing. Stop fining and subsidising and capping. Stop banning and rationing. Stop setting targets. We have had enough of being helped. We need time to heal.


August 10, 2022 at 06:27AM

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