Economies of shale

The weather conditions of the past week could not have been better conceived to show up the inadequacies of Britain’s — and the rest of Europe’s — energy policy. A vast anticyclone extending from Siberia to eastern England has brought snow as far south as Rome and temperatures of minus 40˚C to Eastern Europe. With North Sea gas production in sharp decline, never has Europe’s position on the end of a long gas pipeline originating in Russia been so exposed.

As that country’s demand for energy has spiked, so the quantity of gas which it is prepared to export to the rest of Europe — also gagging for extra energy — has slumped. The wholesale price of gas has soared by more than a third in a week. Were electricity companies not still able to substitute some gas-generating capacity with coal-fired power — from plants due to be closed in 2016 to meet carbon-reduction targets — we could well find ourselves struggling to keep the lights on.