Why is Ed Davey still in office?

On Monday, he said: “Shale gas in North America has misled people about the medium to long-term trends in gas prices. People feel that if you go for unconventional gas in the UK that will reduce prices.”

Err, yes, that is the way it works you know. Supply goes up, prices come down.

Are we really happy with the idea that the man planning this vital part of the economy has not read past para 1 of the first page of Econ 101?

2 thoughts on “Why is Ed Davey still in office?”

  1. He’s done an economics MSc – and hence is doubtless fully aware that the Econ 101 model is a snapshot simplification, and a short-term increase in supply is absolutely not guaranteed to lead to a reduction in price.

    I would also guess he’s probably also aware of things like:

    1) the US natural gas spot price has risen 50% in the last six months (it will still be a big deal for US energy supply, and the spot price is still slightly below the 2010 spot price, but neither of those affect your point).

    2) the UK currently relies on large conventional gas fields reaching end-of-life, and even if people frack everywhere plausibly frackable then at best this will make up for the capacity the UK is about to lose.

    So a minister who’s also an economist is set to announce a sensible policy (more shale gas), but signs a sensible note of caution (more shale gas might not lead to gas price falls, because of the other market changes that are ongoing) based on evidence from other countries, and you suggest he’s an idiot who should be sacked?

    *slow handclap*

    Tim adds: And DECC has been saying for some years now that shale won’t lower gas prices. Because it will all be exported. They’re institutionally agin it.

  2. If is such an “economist” let him drop the windpower subsidies. Let him drop the policies that are designed to massively increase UK energy costs to ordinary consumers because of the AGW crap.

    He is eco-dross like the rest of Blulabour. The shale gas policy is a blind. The state want to to get involved with shale so they can ensure it gets messed up.

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