The FT and former BP chief executive, Lord Browne, appear to get
on rather well.
Earlier this year the paper
secured an invitation to have a look around his home, apparently mainly in order to examine
his collection of wild animals.
“I had never seen a man’s eyes brighten so much at the mention of his
elephant collection during a conversation at a cocktail party,” said the
author, “I felt a voyeuristic need to see them for myself.”
“Our economy was built on a legacy of fossil fuels and will not withstand the damage if we withdraw them too quickly - Lord Browne.
And so she did.
In passing the paper reported
that his firm, Riverstone Holdings, has a stake in the shale gas firm
Cuadrilla, currently on the hunt for gas somewhere near Blackpool.
So when Lord Browne wrote an
editorial for the paper on the subject of the UK’s energy policy it was likely
to cause a stir.
Shale
“Our economy”, he wrote “was built on a legacy of fossil fuels
and will not withstand the damage if we withdraw them too quickly”.
Instead, he argued, we should
turn to natural gas - which “can be an important contributor to carbon
reduction” and, with the development of shale, could reduce consumer bills.
(SEE CCC Letter)
As with most things energy
related, much of this is disputed.
Gas is cleaner than coal, but
few, in the UK at least, are now proposing we build new coal plants.
In a recent letter to the
Prime Minister the new chair of the Committee on Climate Change, Lord Deben -
formerly known as John Gummer - warned the government that a reliance on gas was
‘incompatible’ with meeting the government’s binding climate targets.
The claim on bills is also contentious.
The EU is very unlike the US.
As Lord Browne observes, regulations are tighter. Some reserves are also
deeper, water is more scarce and the population more dense.
Indeed it’s so different that the world’s largest energy company,
Exxon, recently returned some of its much sought after shale licenses to the Polish government.
Poyry, Deutsche Bank and even the IEA have all forecast that even large scale shale extraction is
unlikely to stop EU gas prices rising - though forecasts, of course, are often
wrong.
Lord Browne wisely prefaced
his prediction of low prices with the phrase ‘may’.
Davey intervention
In an unusual move the
editorial even prompted a letter from the Liberal Democrat Energy Secretary, Ed Davey
complaining about the “regrettably partial” analysis.
The FT’s original article
described Lord Browne as a former chief executive of BP and “partner” of
Riverstone holdings but failed to elaborate further.
Following the intervention of
the Secretary of State the paper put up a blog post pointing out Browne’s directorships at Cuadrilla
and another gas firm, Fairfield Energy, which explores the North Sea and in
which Riverstone is also invested. The post also highlighted the FT’s own critical
analysis of shale.
It didn’t explain why this
information was not included in the original editorial. Possibly because it was
Lord Browne himself who chose his description, as is common practice. It’s fair
to say his interests are complex.
Riverstone holds shares in
two UK gas companies, but it also holds stakes in two UK renewable firms. One, Velocita
which appears shrouded in
mystery and the other, Sea Jacks, which also works for the oil and gas industry
but mostly puts up wind turbines. In fact, beyond the UK, Riverstone is one of the largest private equity investors
in renewables in the world.
And indeed, Lord Browne is
equally happy to beat the renewable drum when it suits him - as he did during
his post-BP conversion to green energy in 2009, though even then he supported new coal
power generation in the UK as ‘necessary’.
Ultimately everyone will have
an interest. Keen readers will have observed that this news-blog is funded by
an environmental campaigning organisation.
Lord Browne’s views are
probably no less valid because he is a director of a shale gas firm, especially
in a debate where knowledge and interest often go together.
That said, it seems odd it
took the intervention of a government minister to ensure these
interests were clearly declared.
