The energy debate is stuck in a rut: all politicians seem to be able to talk about is a narrow set of existing technologies — coal, gas and nuclear power stations, supplemented by wind farms and rooftop solar. Each of these technologies has its own lobby, and they fight each other for subsidies. Should we, like Germany, build more coal power stations, or go for a big nuclear programme, embark on another dash for gas, or build lots more wind farms on- and offshore?
In one sense this is not surprising. The abiding feature of the electricity industry over the past century has been its lack of technical progress. Coal power stations are 19th century. The gas combined cycle and nuclear power stations date from the 1940s and 1950s, and there are cables in London dating back to the 19th century too.
But in another sense this is a profound mistake with major economic (and climate) consequences. While the policy-makers look out of the back window, all around them the world is changing. In just the past seven years, fracking and shale oil and gas have transformed the fossil-fuel markets. North America is now moving towards energy independence — first withdrawing from world gas markets and next radically reducing its reliance on Middle Eastern oil. The US is repatriating energy-intensive industries from China, and there are major new petrochemical investments.
The important point is that none of this was foreseen a decade ago. Plenty of -politicians here in Britain and in Europe remain in denial about the radical implications for competitiveness as the US reaps the benefits of its cheap and abundant feedstock. There are even still people who believe in the nonsense of peak oil and gas, while all around the evidence of -fossil-fuel abundance mounts up.
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