Well, you knew that he wasn’t going to tell it straight, don’t you?
However, there is a little snag with the prime minister’s logic. We have so many pipelines connecting us to the continent that if the price were lower here, some gas trader would buy in Britain and export it. Soon the prices would be virtually the same. For exactly this reason, energy prices were no lower than Germany’s even when we were self-sufficient.
Yes, isn’t that excellent? 500 million people gain access to cheaper energy because we frack here in Britain.
And that is the result of those Poyry reports. Yes, we’re tied into the European gas market. That means an increase in supply from ourselves leads to lower prices right across the EU market. As does any increase in production elsewhere lead to a reduction in the prices we pay.
So much so that the net result of any one EU country going hell for leather for fracking is not that prices halve. No, it’s that prices don’t double, as DECC currently predicts they will. And yes, it is only necessary for one to do so for this result to occur: that’s very clear from those same Poyry reports.
There is a final devastating flaw in Cameron’s argument. Imagine that we are once again afloat on a jet-black sea of fossil fuels: our energy prices may not be lower, but our balance of payments will benefit enormously from lower oil and gas imports; as a result, sterling is likely to become a more attractive currency to buy – a “petro-currency”.
Then we would suffer from what used to be called the Dutch disease. The currency would strengthen, hitting trading businesses. In the 80s, offshoring began in earnest when we sharply increased oil and gas output. In other words, if the prime minister’s fantasy actually happened, the consequences would be the exact opposite of what he supposes.
And that, I’m afraid, is really pretty pathetic. For that’s exactly what happens with any successful export industry. Doesn’t matter whether it’s natural gas or cars or diversity advisers you’re exporting. Run a substantial trade surplus and your currency will rise.
But th3en we knew that Chris Huhne wasn’t going to give it to use straight, didn’t we?