Last week Dieter Helm gave evidence to the House of Lords Economic Affairs Committee as part of their inquiry into shale gas. This was powerful stuff from a very clear-thinking witness and some of his comments were devastating. Here are his thoughts on the impact of US shale on European coal prices:
The immediate price impact [of US shale] to drive down the price of coal in Europe. The coal burn has expanded very substantially in Europe, and since the coal burn has gone up a lot in Britain and the coal price has gone down, you might have expected that electricity prices would be falling in the UK rather than going up.
On the effect of government policies on energy intensive industry:
It is not so much that energy-intensive companies in Europe are leaving Europe; it is just that no investment is being made in energy-intensive activities across the whole of Europe.
On the potential for a worldwide shale gas revoluion
...it is a complete illusion to think that in the medium term [shale gas] is a US phenomenon.
On the government betting the house on rising gas prices
I personally have no particular reason for believing that the gas price is going to go up in the medium term. There are quite good reasons for thinking that it is going to go down. It is abundant in supply, and I think one should be very sceptical about this Government and the last Government embarking on policies that require them to assume that the oil and gas prices are going to go up and then pursuing those policies and not being willing to contemplate the consequence of that not being the case.
And his overall assessment?
...we have a major energy crisis to get through between now and [2018]...[in] the [Energy] Bill at the moment [it] is almost as if the underlying fundamentals of what is happening in our energy market are happening on another planet...It is a very, very slow-motion car crash.
And if he were Secretary of State what would he do about it?
I would probably emigrate as quickly as possible;