MB: Firstly, when talking about fracking, attention focuses largely on the environmental concerns. Understandable and important. But I think we must also understand the impact of fracking in the US has on the price of coal. Generators in the UK choose coal in preference to gas where carbon and pollution regulations allow. Gas consumption for power generation today is little over half the figure at the peak 2008 to 2010. There is currently more coal used for electricity generation in the UK than gas. Alternative energy is exciting and vital but prices of the various types of energy determine what is supplied. Longer term, LNG (from Australia and the US), LNG tanker availability and a truly more integrated European pipeline system as well as renewables will change this profile, but I don't think many have a clear idea of what's actually occurring today.
ZG: I should say first that while I share many of the concerns surrounding fracking, I don’t believe the issue is entirely black and white. For the short and medium term, gas will inevitably form part of the energy mix, even if we see a massive push for renewables and clean energy. No matter whose model you look at, there seems to be a consensus around that. If that’s the case, the gas therefore has to come from somewhere, and it is likely that British shale gas can make a contribution. But, I do have very serious concerns about the potential local environmental impacts of fracking, particularly in relation to groundwater, and more broadly, I think we would be very unwise to imagine that fracking is going to deliver the kind of price reductions described by some of my colleagues in Parliament. In addition, I don’t think that local concerns about the impact of fracking rig installation on landscape character and visual amenity should be simply ignored, and I have pushed for the Government’s new planning guidance, which gives a greater say to local communities over wind farms, to apply equally to fracking rig installations. I have also backed calls for the development of the best possible regulatory regime.
MB: Secondly, I'd like to know what Mr. Barker's relationship is with Ofgem. Does Ofgem have a strategic remit? Why do we hear so little from Ofgem and how would you and/or Mr. Barker rate Ofgem's performance over the past few years.
ZG: Ofgem work independently from the Government. They are a non-ministerial government department and an independent National Regulatory Authority, recognised by EU Directives. However, the Energy Act, which reached Royal Assent in December, was introduced to improve regulatory certainty, and it ensures that Government and Ofgem are aligned at a strategic level through a Strategy and Policy Statement (SPS).
It’s easy to like Zac Goldsmith. He appears to care deeply about certain issues I tend to agree with him upon, such as the Recall Bill and opposing the expansion of Heathrow. It concerns me, however, that though politicians may speak passionately and articulately about issues, my sense is that there’s as much obfuscation as explication. When Boris Johnson spoke in Kew a few months ago, he responded to a concerned citizen’s objection to the new football stadium in Brentford saying that he would review these concerns, knowing very well that assent for the development had already happened weeks beforehand. For all Zac & Boris’s promises that Heathrow won’t be expanded, I have this sinking feeling that the horse trading has already happened. Call me cynical, but like so many in this city, we’ve earned our scepticism.