A tale of two jobs

Given the heavy trailing of the Energy Bill, only the most hard-bitten of cynics would accuse Decc of deliberately timing its final publication to coincide with the Leveson report and the mass distraction of the media. Nevertheless, it was convenient. If nothing else, it meant that barely any news outlets picked up on David Cameron's highly unusual intervention in the workings of Decc. It emerged on Thursday, somewhere between the Energy Bill and Leveson, that the prime minister had blocked the appointment of David Kennedy, chief executive of the Committee on Climate Change, who had been recommended (apparently unanimously) by the appointment panel for the top mandarin job at Decc.

What’s the PM up to? He has declined to give a reason for blackballing Kennedy, but it’s not too hard to guess. Kennedy, who is widely respected on all sides of the political divide, is known to back the target to cut the UK’s emissions by 50 per cent by 2025. He is also in favour of the decarbonisation target. Both are extremely unpopular with gas enthusiast George Osborne and it seems, by extension, with Cameron himself.

Let’s take another look at the Energy Bill in light of this decision. Reading between the lines, the Bill demonstrates significant support for the gas industry. Ed Davey has given express reassurances that gas generation will not be ruled out in future and that shale fracking will not be blocked. On a separate note, the Bill speaks of the government’s willingness to compromise the green agenda in the name of pragmatism with its exemption of energy-intensive industries from the contracts for difference regime.

Meanwhile, the government’s indignant protestations over shale gas are beginning to ring hollow. It moved quickly (too quickly?) to deny reports at the weekend that more than 60 per cent of the countryside is being considered for exploration. As Utility Week went to press, Osborne was expected to announce tax breaks for shale gas in his autumn statement and the establishment of a new Office for Shale Gas (Ofshale).

This comes against a backdrop of global gas supply looking increasingly uncertain. It emerged this week that RWE is looking to pull out of the Nabucco pipeline – a second blow for the scheme, which was scaled back earlier this year. Moreover, the massive Shtokman pipeline has been on ice since the summer. The day might well come when a UK committed to using gas to keep the lights on has no choice but to compensate for falling exports with home-grown shale, at which time having an environmentalist in charge of the civil service at Decc could prove inconvenient.

This looks increasingly like a government that has made up its mind on energy. If it really wants to boost investor certainty, it’s time to brave the political and media fallout, and say so.

While one public service job was being withheld this week, another was being held on to. Regina Finn remains at the helm of Ofwat, despite Pennon chairman Ken Harvey’s remarkable outburst and thinly veiled call for her scalp. But if the shambles over water reform isn’t quickly resolved, her position will look increasingly untenable.

Ellen Bennett

This article first appeared in Utility Week’s print edition of 7th December 2012.

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