Energy Security

I beg to move,"That this House acknowledges that the security of the UK's energy supply has become of increasing importance over the last five years; understands that with over eight GW of coal and a further seven GW of nuclear generating capacity coming offline in the next decade the UK faces a potentially serious energy gap by 2016; regrets that with only 2 per cent. of the UK's energy needs coming from renewable sources, the UK is one of the worst performers in Europe; notes that the Government's own Renewables Advisory Board has established that the UK is set to miss its EU renewables target for 2020 even with significant policy changes; further notes that, as an island nation, the UK has major potential as a source of wave and tidal energy; deplores the fact that the Marine Renewables Deployment Fund has not delivered monies to a single project since its creation in 2005; regrets that the Government's latest Energy Bill contains insufficient provisions for feed-in tariffs for microgeneration, the fast roll-out of smart meters or any serious help for the fuel poor; and urgently presses the Government to act now to secure the UK's energy supplies for the future." At the heart of this debate is the need of the entire world to wean itself off its extreme dependency on oil. I say that as a former oil trader and as someone who has been steeped in the industry for more than 20 years. May I therefore declare my interest in the sector, and make reference to my declarations in the register, the annual printed version of which is due to be printed soon? We have called this debate to discuss an issue on which our economic survival depends. The security of our energy supplies, whether for lighting our homes, fuelling our cars or powering our industry should always be one of highest priorities. But now, as we look ahead to the next 10, 20 or 50 years, there are uncertainties and complications that never existed for previous generations, including rapid growth in the demand for energy, and the threat of a drastic climate change caused by burning fossil fuels. So, when we talk about energy security, we must acknowledge that there are three dimensions: supply security, climate security and price security. The need to resolve those three problems has become extremely urgent, and so far, a chronic lack of decision making has seriously compromised our ability to act and to adapt as needed. Our understanding of the issue has dramatically changed over the past 20 years. I remember working with an oil company that used to specialise in supplying heating oil in winter to the fuel poor. Its promotional gizmo comprised a small Perspex cube containing a small quantity of oil, and printed on the outside was its proud slogan, ““Thank you for making the world a warmer place””. I do not know what the company would happily print there today, because the whole world seems to be heating up. The debate takes place against a background of record prices and the inevitability of further increases. Gas prices are trading at 59p today and at 107p for the first quarter of 2009, which will have a massive impact on consumers. It is widely expected that gas prices will increase by as much as 40 per cent. by the winter and that electricity prices will do so by only marginally less. That could increase the numbers in fuel poverty by up to 1 million and cause huge pain to households throughout the country, so it is clear that price security and energy security go hand in hand. We recognise that the United Kingdom has been lucky over the past century. We were at the centre of a western-dominated system of global trade and finance that brought not only huge social and economic benefits, but underpinned our role as a formidable force on the international stage. Through a quirk of geology, we enjoyed the good fortune of having an enormous amount of natural resources at our disposal—first coal, and then oil. That has helped make us prosperous, but it may also have helped make us complacent. Now, the world economy is undergoing a fundamental transformation. Gradually, the centre of gravity is shifting eastwards, and China and India have developed faster than many people could ever have imagined, opening up new trading corridors and creating flows of capital that completely bypass the west. Each extra 1 per cent. of economic growth results in a 1.5 per cent. increase in the demand for energy, creating unprecedented global pressure on energy demand, so we are no longer assured of being at the head of the queue for the vital commodities that sustain our economic growth. Whereas 15 years ago we may have looked to the North sea for our energy requirements, the decline of production from the continental shelf has exposed us more and more to the variables of global markets.