Multinational companies and government ideologues are playing a cynical game over energy supplies. Are we the poor saps in the middle?
The most cynical game of poker is being played with energy supplies to the 60+ million people of Britain, all their related workplaces, civic institutions and infrastructure. The players are the multi-national energy companies, the ideologues of the Coalition, with the people of Britain the saps in the middle.
Didcot combined coal and oil power station – closed in March this year as a result of a European Union directive.
Disinformation spews forth daily in inaccurate, false and misleading press releases from all the companies involved. One day we are advised that the demand for gas has seen an 18 per cent increase on the previous period last year due to the extended winter. The next day we are told that there are only three weeks reserves of gas available. The day after that, Centrica, privatised offspring of British Gas, announces a £10 billion, 20-year deal with US gas partners to provide gas to 1.8 million homes.
You have to go to the small print to read that the gas will not be provided until 2018. The aside is that this gas will be delivered to the existing moribund mothballed power stations and storage facilities on the Isle of Grain in Kent. This means that Boris Johnson’s white elephant scheme of building the replacement to Heathrow Airport in the Estuary and Isle of Grain has no chance. Centrica’s clout outweighs the Mayor of London.
SSE Ltd, once South Scotland Electricity in the days of one unified nationalised electricity industry, has announced that power cuts are inevitable as the generating gap – between the power stations we have and the demand for power – is now so close that anything can trip power cuts and blackouts. Interestingly, Ofgem, the Office of Gas and Electricity Markets, the supposedly independent regulator of the generating companies, has issued a similar supporting statement. The regulator’s funding will be reduced in the next round of government cutbacks
What is really going on is poker of the highest stakes. The “free” market is determined to maximise profits from the right to fuel, which in certain quarters has been defined as a “human right” by ensuring that government, i.e. the taxpayers, funds the utilities infrastructure to the tune of anything up to £200 billion. In between a conscious deliberate anarchy is created across energy supply to confuse, frighten and overwhelm people with a sense of fatalism and doom and gloom.
Centrica, after deciding that provision of gas supplies is its core business, hence the 20-year deal with US gas suppliers, decides to withdraw its investment in the Hinckley Point nuclear power station renewal project. They use the argument that building the station will take ten years and not five years and they cannot tie up investors’ funds in such a lengthy project. No nuclear station has ever been built in five years. This is a fiction and diversion to justify investor greed elsewhere. And where is that investor greed? £500 million redistributed to Centrica gas shareholders now and investment in established US gas production – investment that is without risk, without delay and produces bonanza profits now.
The cynicism of Centrica is clear in its pious statements about holding gas prices as low as possible. A 6 per cent rise in November 2012 obviously has no bearing on the 7 per cent overall profit increase for 2012, giving a global figure of £2.93 billion! A figure deemed not a bonanza. Similarly Centrica withdraws its £200 million investment in the Race Bank offshore (North Sea) wind farm project on the basis that the government should stump up the £2 billion investment required. Again, what this is really about putting money into investors’ pockets as a short-term fix while the long-term gamble is the government will buckle in the face of power cuts.
If only gas and nuclear provision were the only energy sources in dire straits! UK Coal, which provides 5 per cent of Britain’s coal for generation, is effectively bankrupt after the fire at the Daw Mills pit. Discussions about going into voluntary liquidation have now been overtaken by the government proposing to re-nationalise the pits of UK Coal.
If nationalisation was good for RBS and Lloyds then it’s good for UK Coal. So much for the dreams of those who believe that nationalisation under capitalism is the solution to all problems – especially when this government is ideologically committed to the “free market”, no state intervention, no subsidies to industry.
The proposed re-nationalisation under the Coal Authority is another high card being played to avoid even more crippling demands on the Pension Protection Fund, which would cost the government more than the £500 million black hole in the miners’ pension funds.
The financial restructuring of UK Coal in 2012 separated the vastly profitable property assets that UK Coal inherited from British Coal from the two deep mines and the six open cast mines. It was property versus mining, and now mining is in further crisis with over 10,000 miners’ pensions at risk. So the government bails them out and lets the property speculators run amok.
Meanwhile, a £1 billion contract has been awarded to Peterhead and Drax Power stations to develop a carbon capture and storage programme to deal with carbon emissions from these two coal-fired power stations. The carbon will be stored at Shell North Sea oil and gas sites which have been exhausted over the past 50 years. Shell will move from pumping fuel from the North Sea to storing carbon waste and will be paid very handsomely for it.
Think the unthinkable
What the government has done by accident is to reinforce the idea that the technology to deal with carbon emissions from coal works and therefore the possibility to mine coal in Britain is real, if the political will is there. Britain’s energy shortfall crisis will force the thinking of the unthinkable. If they can renationalise pits to bail out their property developer mates they can rebuild the coal industry.
The poker game being played will result either in the government funding the infrastructure investment required or in an ever-declining oligarchy of utility and energy companies strengthening their grip over provision of energy while hiking up profit margins. If the “right to fuel” is a human right, then the right to take away from the exploiters their abuse of fuel and energy provision follows logically.
Workers have to define a new energy strategy for Britain without competition or waste, balancing generation mix and supply between gas, nuclear, coal and other feasible energy sources.
We need to harness the vast profit margins for reinvestment, resulting in a reduction in fuel costs to domestic and industrial users, reduction in duplication of parasitic employment and parasitic investors – how many chief executives and coupon clippers do we need?
It is beyond belief that Britain, which leads the world in the export of power generators worth over £1.29 billion – taking a fifth of the world market for electrical generation – should be facing power cuts and blackouts at home. ■