Bishop Hill David Henderson's letter to the FT
Oct 28, 2011 Economics David Henderson sends me this letter. It was sent to the FT in response to an article by Max Hastings, but was not published.
Sir:
Hastings on Energy Policies
Sir Max Hastings (FT, 22 October) is right to describe wind power as 'an expensive and unreliable source of energy', and to note that 'extravagant green policies' are pushing up energy costs in Britain. But his proposed remedies for the situation are not well judged.
As to specific proposals, it is surprising that he should argue that 'turbines should remain part of Britain's energy mix'. Again, he advocates subsidies for new nuclear power stations on no better grounds than that (according to him) they are costly. Most people would think that this, if true, was a reason for not subsidising them. In viewing the future, he takes no account of the possibilities that may have been opened up by the development of shale gas. It is not to be taken for granted that 'every form of power generation becomes inexorably more expensive'.
More broadly, Sir Max harbours twin illusions that the array of past policy failures might have led a historian to recognise as such. Illusion No 1 is that wise energy policies require the timely adoption by governments of far-reaching centralised strategies for 'Britain's energy mix'. Illusion No 2 is that the future is sufficiently well charted for such strategies to be soundly based.
The main current threat, not only to costs and competitiveness but also to energy security, comes from the intertwined energy and climate change policies which successive British governments have embraced.
David Henderson
Bishop Hill
DH emails to say that his letter has been published today.
Reader Comments (3)
David Henderson's letter is written clearly, demonstrating both logic and common sense, neither of which are attributes of present energy policy. I would love to wake up in his world.
Well somebody in the UK is well into shale gas:-
"BG Group signs 'ground-breaking' $8bn gas deal with US"
"BG Group, the UK's third-biggest oil and gas producer, has signed an $8bn (£5bn) deal to ship gas from the US, a landmark step in the country's shift to export its supplies."
"With US gas prices at a low, the move will allow BG to sell into more lucrative markets. Spot prices in Asia are around four times those in the US. "
"The US has not traditionally been an exporter of gas, but new technology has allowed it to access vast reserves trapped in shale rock, swamping its domestic market. Cooling gas into LNG form means it can be shipped far and wide.
In the long term, the exports could help bring down the price of gas around the world."
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8851312/BG-Group-signs-ground-breaking-8bn-gas-deal-with-US.html
Surely the FT has shot itself in the foot in disregarding a letter from such a prominent person.