Coalition tensions over energy won’t relax with George Osborne’s gas strategy, which he will launch alongside the Autumn Statement tomorrow. The Financial Times reports that the Chancellor’s strategy will approve as many as 30 gas-fired power stations and – in a move that will delight those in his own party – a regulatory regime for shale gas exploitation.
Fraser extolled the virtues of shale gas in his Telegraph column in September, describing it as ‘the greatest single opportunity’ facing the government, with the potential to transform energy supply. But Energy Secretary Ed Davey is less enthusiastic, arguing in May that Tory support for shale gas exploitation – known as fracking – was a means of undermining renewable energy generation. He said:
‘The right wing of the Tory party are trying to make out shale gas is the answer, but I’m afraid the evidence does not bear it out.’
The Energy department has been in battle mode for months now, with Davey fighting not just those in other departments as the Quad struggled to agree on energy policy, but enemies within, too: his spat over wind farms with John Hayes has been well-documented. He did launch his own Energy Bill last week which aims to decarbonise the electricity market, but Osborne is adamant that gas will continue to play an essential part in supplying the UK’s energy needs, hence tomorrow’s strategy. Davey is now in Doha for the UN climate summit, attempting to persuade other countries to cut their carbon emissions, while green campaigners back here cry foul about the effects of Osborne’s strategy. How the two men work together on the regulatory framework for fracking, and for any tax breaks that Osborne is keen to include to promote the shale gas industry, will be Davey’s next test.