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Crabb: Meeting the UK energy challenge

Speech to the Welsh Conservative Policy Forum in Cardiff.

"Ladies and gentlemen, I am grateful for this opportunity to address the conference this morning; and on what I believe will be the most important issue facing this country in the coming decades.

We politicians are used to speaking about important subjects; we trade in crises and critical issues every day; but all hyperbole aside, this one, conference, seriously is.

Whatever else future UK Governments (hopefully Conservative Governments) may want to do with the economy, and with hospitals, schools and other public services, unless there are clear and robust plans for maintaining a secure energy supply - and in a way that meets our environmental responsibilities - then I am afraid all our other policy objectives will be hopeless.

Our homes, businesses, public services, transport networks all rely on affordable and stable supplies of energy. And, with a growing economy, demand for energy will only increase.

It is a primary duty of Government to create a market framework which enables a successful energy industry to meet this demand.

Wales and the changing energy mix

It is especially timely to be speaking here in Wales on the subject of energy.

More than any other part of the UK, Wales embodies the changing nature of the UK energy industry.

A century ago 10 million tonnes of coal a year were being exported out of Cardiff Docks at a time when British coal powered the emerging modern world.

Today the world's largest liquefied natural gas import facility is being built in Milford Haven; a huge project which - within a few years - will bring 16 million tonnes of gas annually from Qatar into the UK gas transmission grid.

West Wales will become the UK's premier portal for imported natural gas. But as large as this project is, it represents only one part of the emerging energy mix for this country.

There are, I believe, three key energy questions this country currently faces:

Firstly, with the decline in production of North Sea oil and gas, and the decomissioning of our nuclear power plants, where will the major new sources of energy come from to keep Britain's economy growing in future decades?

Secondly, how reliable and secure will these energy sources be?

Thirdly, how sustainable will these sources be? Will they contribute further to environmental problems and climate change or will they actually be part of a low-carbon solution which minimises the negative impact on the environment?

Three key questions facing this country; and three key questions to which the present Government is failing to provide clear answers.

There is currently a massive failure of national leadership over both energy policy and environmental policy. Tough choices are being put off; and the longer the delays stretch on for, the more urgently the next Conservative Government will have to act to rectify the situation when we return to office.

Before outlining some thoughts about how the next Conservative Government should develop a clear and workable energy policy, let's take a few moments to look at the issue of climate change.

I was at a meeting of local business people in my constituency two weeks ago and we were discussing road transport and its environmental impacts.

One person objected strongly to a few comments I made linking emissions from transport to climate change. There is no proof of climate change, she said, and therefore no real case for a policy of trying to encourage less traffic movements or cleaner fuels.

Let's get this straight:

Climate change - or global warming - is happening; it's real; and we need to wake up to the problem. The consequences for our way of life - and for the lives of the generations who will follow us - could be truly catastrophic.

It is not the purpose of this speech to lecture you about the scale of the challenge we face or the consequences of failure.

But a prime example of how climate change can affect us was the European heatwave of 2003 which resulted in over 15,000 deaths, forest fires and widespread agricultural losses.

Events like this are expected to occur much more often in the future, with temperatures predicted to increase by between 1.4 and 4.8ºC by 2100. The ten warmest years on record have all occurred since 1990.

The evidence of a link between the level of carbon dioxide in the atmosphere and global warming is, I believe, overwhelming. The impacts of climate change are already being observed in a variety of sectors. Ecosystems are already showing the effects. Changes to polar ice and glaciers and rainfall regimes have already occurred.

The Conservative Party cannot afford to position itself as an enemy of environmental progress or sustainability. For too long we have allowed the Left to dominate discussion about the environment. As the natural Party of Industry and Business we have been perceived - wrongly - as hostile to those who would wish this country to act strongly and urgently to protect the environment.

As with the issue of international human rights or social cohesion, this is an emerging policy area that Conservatives need to 'own'. Environmental sustainability should be made 'our' territory.

We have to put the issue of climate change at the very heart of the 21st century Conservative message.

In fact, the previous Conservative Government had a remarkably good track record in this area, led by the excellent work of John Gummer.

But under Labour we have taken actually taken a step backwards in terms of carbon emissions. C02 emissions are higher now than they were in 1997. In contrast, the last Conservative Government managed to reduce these emissions by more than 7% between 1990 and 1997.

The UK currently tops the European league for increases in carbon emissions from electricity and heat production. We risk becoming the "dirty man" of Europe.

As with so many areas of activity, this Government has proved the master at producing nice statements of intent and aspiration; yet it fails crucially to implement a coherent and credible plan of action.

And the same applies to the question of energy supply.

Back at the start of 2003 the Government produced its foundation document outlining the shape of future energy policy. Since this White Paper was published little has been done to fill in the massive gaps which the paper left unaddressed.

The Government has not communicated a clear view of where our required new sources of energy will come from nor provided an assessment of the risks associated with this.

It is no coincidence that some of the most volatile and contested areas of the world lie directly above major energy reserves. With the future emergence of two new economic super-powers in China and India, the global demand for energy will become even more intense, and every major economy in the world is having to assess and re-assess its energy strategy.

Here in the UK, we are shifting away from being a net exporter of energy to being once again a net importer. Production of North Sea Oil peaked in 1999 and has declined by 25% since then.

Over the next 10 or 20 years, we will increasingly come to rely on imported gas from North Africa, the Middle East, Norway and perhaps Russia.

For some, this growing dependence on foreign supplies is a national threat. I am not so gloomy. Most industrialised countries have to rely on a high volume of energy imports. But it is vital that we have a clear energy strategy that promotes a diversity of sources and supply routes, so that we are not too reliant on any one region or energy type. Here again, the Government must show leadership.

One area where the Government is proving highly active, but unfortunately blundering in the wrong direction, is in its promotion of large-scale wind farms.

The Government is desperate to find a workable source of renewable energy to contribute to large-scale electricity production.

Renewable energy is, of course, the holy grail of energy policy: the search of an energy source that is, at the same time, commercially viable, abundant in supply and that produces very little negative environmental impacts. If that were available, there would be no need to worry about security of our oil and gas supplies.

The Government wants 20% of the UK's electricity to be generated from renewables by 2020, roughly equivalent to what the whole of Britain's nuclear industry currently generates.

Very few people expect this target to be met.

The truth is that we are very far away from a situation where renewable energy can play anything more than a small role in meeting UK energy needs.

20% of UK's electricity generation would amount to a huge and unacceptable enormous number of new wind farms desecrating Britain's coastlines and hill tops.

Wind farms are seen as a quick fix for this Government and for the Welsh Assembly Administration. Their entire approach to renewables has been s short-sighted and has been focused overwhelmingly on making wind power the solution.

Large-scale on-shore wind farms in a country as beautiful as Wales are not the answer.

Wind farms are an expensive and inefficient way of generating sustainable energy. That was the conclusion of a recent government report in Germany, the world's leading producer of wind energy. Instead of spending billions on building new wind turbines, said the report, the emphasis should be on making houses more energy efficient. Wind farms prove a costly form of reducing greenhouse gases.

Although, as the technology improves, wind power in future will certainly be part of the UK's energy mix, we need to be far more imaginative if we are going to make renewables a really significant component of UK energy supply.

Wave power, solar, biomass are just three other significant forms of renewables which do not receive anything like the same level of Government support that wind power does.

Finally, it is not possible to have a sensible discussion about energy policy without addressing honestly and transparently the question of nuclear power which currently accounts for about a fifth of the UK's electricity generating capacity.

Yet this is exactly what the Government has been trying to do in recent years. The Energy White Paper had virtually nothing to say on the matter of nuclear power except 'watch this space'. Well, people need to start talking about this very soon. With the phasing-out of the current generation of nuclear power stations, nuclear is forecast to account for only 7% of UK electricity production by 2020.

There are many, many opponents of nuclear power. A significant number of them live in Wales.

I am not one of them, however.

For 40 years nuclear power has been providing us with energy; it is a proven technology which can generate electricity on a very large scale with zero greenhouse gas emissions.

It is also the safest form of energy generation. The safety record of the nuclear industry is outstanding and compares very well indeed to the health and safety records of the coal, oil and gas industries.

Of course, there are huge challenges to be addressed - principally financial, and in terms of planning consents, and of course what to do with nuclear waste.

But the debate needs to happen - and soon. It will take a strong Government to lead this debate.

The ideological opposition on the Labour backbenches means that this debate can only seriously happen under a Conservative Government.

These are big issues that need to be addressed, and no answers.

The Conservative Party, of all parties, is well-placed to tackle these questions.

I believe that free enterprise, capitalism and liberal democracy offer humanity its best chance of overcoming the environmental challenges that face us.

In the same way that we need to protect the framework of values in society that ensures a successful market economy functions - the rule of law, honesty, equitable sharing of rights and responsibilities - so we also need to protect the natural environment which sustains and gives value to our way of life.

Furthermore, as a Party we have to demonstrate that we know how to harness the dynamism of the market to help deliver a successful low-carbon economy.

Energy will continue to be critical to supporting economic growth in the future.

Additional energy will be necessary to maintain and improve the standards of living in both the industrialised and the developing world.

A bold and clear energy policy must be the backbone of the future 'prosperity agenda' that the next Conservative Government will be elected to deliver.

Labour cannot deliver it. Conservatives must."

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