Britain’s looming energy crisis

Over the last weeks and months, concerns about energy have become more and more widespread in Britain. Firstly the simmering controversy over “fracking” has become more prominent, with a series of demonstrations pushing this issue into the public eye. Then the pledge of Ed Miliband that the next Labour government will freeze energy prices was met with howls of protest from the coalition parties and threats by the energy companies that “the lights will go out”. In addition, the announcement that Britain will build the first new nuclear power station for decades has been overshadowed by the attempt to close the Grangemouth oil refinery. The question has to be asked: is Britain facing a serious energy crisis?

What is the current energy policy?

For at least the last decade, government policy has had two main aims: to secure new sources of reliable energy to overcome the expected shortfall over the next few years; and to reform energy production and energy markets to reduce the production of carbon dioxide (CO2) - one of the greenhouse gases that is contributing towards climate change.

The current generation of power plants, including both nuclear and fossil fuels, are being decommissioned. These were built in the 1960s and 1970s and will soon be closed. Over the last years and decades, following privatisation of the energy industry, there has been a chronic lack of proper investment and planning of power stations, which will leave Britain with a major shortfall in terms of electricity supplies. As the Financial Times (20th February 2014) reports:

"...Britain braces for a sharp reduction in its power capacity as ageing coal-fired plants and nuclear reactors are decommissioned. Some are even warning the UK could be facing its first wave of blackouts in 40 years...

"Dieter Helm, professor of energy policy at Oxford university, says the capacity squeeze is the result of years of policy mistakes. “There have been 20 years of complacency about security of supply,” he says. “We’ve been living on the legacy of the stuff we built in the 1970s.”"

In the “boom” years of the early 2000s, New Labour policy focused on “market mechanisms” to reduce emissions of carbon dioxide. These were largely ineffective, but represented an attempt to shift energy away from fossil fuels. The Tory govenment, openly being the mouthpiece of big business, has thrown away the green image that it once cultivated and is now focussed on rolling back environmental legislation and reforms. Only weeks ago, David Cameron announced large subsidies for the North Sea oil and gas fields to boost production.

Energy, economics, and politics

In all countries, the issue of energy scarcity and security has led to changing economic and political policies, with the UK being no exception. In the EU, Germany and Spain in particular have tried to push for more use of renewables, as an answer to their lack of access to cheap fossil fuels. The USA has pushed fracking as an answer to national energy security. China also has ramped up renewable energy production (particularly solar panels), as well as expanding its interests in the Middle East.

The political instability in the Middle East from the Arab Revolutions has also contributed to this. We can also expect the political crisis in Ukraine - with the possibility of Russia turning off the gas taps - to have serious implications on energy supply in Europe.

There is therefore an interconnection between politics, economics, and the energy question. For example, in the 1970s, political instability in the Middle East led to an oil crisis, which acted as catalyst to the world economic crisis; this, in turn, led to industrial and political turmoil, including miners' strikes and even power shortages in the UK. Similarly, it was in the 1970s that governments first started to push renewable energy, because they were worried about access to oil. Meanwhile later, in the 1980s, Thatcher sought to move Britain away from coal (and towards gas) largely due to her class war against the unionised and militant coal miners.

Rising fuel bills

At the moment, the most pressing energy issue for many is the cost of electricity and gas. Families pay on average £1,315 annually in energy bills. This would increase by £137 following the recent price increases announced by the major energy providers. Ed Miliband, as part of a more general “cost of living” campaign, correctly has highlighted how the energy companies use their monopoly position to make price increases that are much higher than inflation or the wholesale cost of electricity.

At the most recent Labour Party conference Ed Miliband pledged that a future Labour government would freeze electricity and gas prices until 2017. Considering that the next general election will not take place until 2015, this is an extremely modest policy – a price freeze for just two years. Nevertheless, it struck a chord with the public and almost certainly contributed to the slight (and temporary) increase in support for Labour in the opinion polls.

Despite this, it was met with huge anger from the coalition parties and energy companies. It is well-known that the “Big Six” electricity and gas companies that control 95% of the UK’s energy market operate as oligopolies, using their dominant positions to fix prices. Following the price freeze announcement by Miliband, the majority six big energy companies announced price increases, on average of over 9%.

Fracking

One proposal put forward, which has support from the government and has a high media profile, is hydraulic fracturing – better known as fracking. This controversial source of energy is based on extracting shale gas from deep underground. The only way that shale gas can be extracted is through hydraulics. The process starts off by drilling underground – up to two miles deep – in an area rich in shale gas. Pressurised water, sand and chemicals are then forced down the drilled hole, where the pressure fractures the rock. In doing so, this releases shale gas which is trapped in the rock. The gas is then forced back up to the surface where it can be extracted. This gives us access to vast reserves of gas that were previously inaccessible – opening up a huge new source of fuel. Some energy companies believe that there is more energy obtainable from shale gas in the United States than there is from oil in Saudi Arabia.

Although shale gas extraction was first developed back in the 1940s, it is only in the last few years that it has been exploited in a big way. Across the United States, some farmers and landowners have become millionaires overnight. In some rural areas, this has had a knock-on effect, where it has brought employment to communities that before were in decline.

Whilst a few have benefited, however, many more have suffered. In many parts of the USA – for example in rural Pennsylvania – chemicals have leaked into the groundwater, which contaminates drinking water. Although scientific research is limited, and there have been a lot of cover-ups (some people who have fallen ill have received compensation in exchange for silence) it is clear that fracking has had a big impact on public health. One study found methane contamination was 17 times higher in water sources located within a kilometre of fracking sites. In some areas of the USA, tap water from nearby areas has such a high concentration of natural gas in it that it can be set on fire. In the US, the chemical mix used for fracking is proprietary – meaning that each mining company will have its own “recipe” of chemicals it uses – but will make sure it is a closely guarded secret. Even doctors who are examining patients with illnesses related to fracking contamination are only informed of what chemicals are used on the condition they sign a confidentiality agreement.

Looking at the situation on the other side of the Atlantic, it is not surprising that many people in Britain are nervous at the prospect of fracking being introduced on a large scale. Protests that have been called around the fracking sites have been small, but bitter. The police response has been heavy handed - even Caroline Lucas, the sole Green Party MP, was arrested. It looks almost certain that the government is set on rolling fracking out across the country.

What does the future hold?

In the last few months there have been various dark mutterings about how we will soon see ‘the lights go out’. Although this is largely scaremongering by the capitalist media and energy fat cats to warn the public about the dangers of Ed Miliband's "radicalism", there is a certain amount of truth to it. The looming energy deficit will not go away without investment; either the shortfall is made up, or there will not be enough power. In the unlikely event that Scotland votes for independence, we can expect conflicts over North Sea oil reserves. French energy company EDF announced that it plans to open four new plants in the UK with the decade, however this is unlikely to make up for the shortfall.

We can therefore expect that there will be periodic energy crises (alongside economic, political and environmental crises), which may be partially overcome through renewables, fracking, or other technologies. However, under capitalism, this can only ever happen in a chaotic and anarchic way, reflecting the chaotic and anarchic nature of capitalism itself.

Similarly, there may well be blackouts because of the lack of investment in new energy supplies. And yet big business doesn't want blackouts, because they rely on access to cheap energy for their production. This reflects the contradictions between the needs of individual capitalists - who are only interested in producing and investing for profit - and the needs of capitalism as a whole. The capitalists would all love access to cheap energy; unfortunately none of them are willing to be the one that pays for the investment in energy supplies that is needed in order for this access to become a reality.

We can see the same process happening in education: big business needs educated workers to compete, but capitalism as a whole demands austerity and cuts to the education system. All of this serves to highlight the incredibly parasitic nature of capitalism, which demands privatisation and opening up of public utilities for the sake of making a profit, but which then bleeds these utilities dry under private ownership, before finally throwing the emaciated carcass back having devoured all it can. In this way, capitalism eats away at the very flesh and muscles that it needs in order to survive: a healthy and educated workforce; decent transport and infrastructure; and reliable, cheap sources of energy.

For a socialist energy plan!

The only genuine solution is for nationalisation of the key sectors of the economy, including the big utility and energy companies. However, such public ownership should not imitate the bureaucratic, inefficient and top-down management of state-owned industries in the past. Instead, what is needed is socialist democracy at all levels. Genuinely democratic, elected and recallable planning committees are required to formulate a rational plan regarding energy policy - not just for the next few years, but for the next fifty or one hundred years.

We demand: an opening of the books of the gas and electricity companies to see just how much profits the energy monopolies are making; an end to industry secrets; and a full audit of the available resources and technologies. Only by ensuring decisions are made in public, not behind the closed doors of big business boardrooms, can we ensure that correct decisions are made.

A future socialist state would not rule out controversial technologies such as fracking or nuclear power simply because under capitalism they have not been successful (although we should also point out that Britain is rich in “clean” energy such as tidal power, wind, wave power and others). Marxists do not come down either for or against any technology in the abstract. The key question is not about this-or-that technology, but a class question about the ownership and control of technology, science, industry, and production.

Under capitalism, the never-ending drive for higher profits means that all non-essential costs, often including health and safety or basic training, are under pressure to be minimised or eliminated. Even the very concept of health and safety is demonised as “political correctness gone mad”. Trade unions, which have played an important in workplace safety, are under constant attack. The problem is not the technology itself, but the way in which it is abused and misused within a system of private ownership that cares only about profits.

Only under socialism - with a rational and democratic plan of production, based on society's needs and not profits - can we ensure that corners are not cut, that incidents are never brushed under the carpet, and that a proper and truthful balance sheet is drawn up for the safety and effectiveness of technologies.

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