Una nueva forma de aprendizaje: Educación a Distancia

One of the first real problems that Labour had to face in the energy sector was the expiry in 1998 of the coal contracts, which had supported the price and quantity of coal purchased by generators. A new deal needed to be done and Labour, as the traditional and vociferous supporter of coal in opposition, were put on the spot. A white paper was drawn up to address this issue, which committed to further support for the coal industry whilst stating that such measures would be temporary (DTI 1998b). This was a difficult position to take given theoretical commitment to keeping state intervention low, but also given the energy policy aim of keeping energy affordable. This can be taken as an example of the New Labour trying to maintain its newly acquired wide coalition of interests and of trying to maintain the support of all parties (Helm 2003: 302; cf. Watson 2002; Bevir 2005).54

As already suggested, as the early 2000s progressed it became increasingly apparent that oil and gas supplies from the UK Continental Shelf were in quite rapid decline. It was expected that the UK would become an importer of both gas and oil by around the mid-2000s, with imports rising very quickly over time (JESS 2002; Helm 2003). This reasonably significant change to the UK position within the international trade of oil and gas prompted, in part, the formation of a new group called the Joint Energy Security of Supply (JESS). JESS was made up of officials from the DTI and Ofgem and was formed in 2001 (JESS 2002: 3).

Around this time questions started to emerge about the UK’s capacity to import gas in large quantities, partly due to a lack of storage facilities, and about levels of ongoing investment in energy infrastructure (JESS 2002: 4; Interview 13; RAE 2002: various; cf. Rutland 2007: 921). The Royal Academy of Engineering (RAE) issued a report suggesting that change was needed in order to facilitate substantial investments:

The Government should reassess the limitations of the market and market mechanisms as the basis for planning and funding new capacity that would lead rather than lag the needs of network users (RAE 2002: 5)

Rutledge’s analysis of UK energy policy at this time suggests that New Labour, and the DTI, ignored this advice (Rutledge 2007: 921). Certainly specific JESS responses to

54  _{For  commentary  on  Labour’s  continuing  understanding  of  the  ‘importance’  of  appealing  to  the  middle}  

growing perceptions of the need for more investment were based around the need to further reduce “barriers or distortions” to market investment (JESS 2002: 4).

The international context was also changing, although New Labour remained remarkably complacent about these changes until well into the mid 2000s (PIU 2002; DTI 2003). Venezuela, under Hugo Chavez, rejoined OPEC in 1999 and OPEC were committing themselves, again, to genuine production constraint supported by non- OPEC producers such as Mexico, Norway, Oman and Russia (Rutledge 2007: 908). By the end of 1999 oil prices had doubled, albeit from an all time low at the start of the year. In 2001 the Venezuelan National Assembly had passed a new Hydrocarbon Law effectively re-nationalising Petroleos de Venezuela S.A. (PdVSA).

Concerns about prices, capacity, and levels of excess stocks available, were highlighted at the time of the ‘mini’ energy crisis during the cold winter of 2000. In scenes not untypical of historical moments when energy had become subject to raised levels of public interest, protests had flared up about rising petrol prices which, in September 2000, were the highest they had been for ten years. Fuel protesters started to picket refineries, described by Tony Blair as the ‘Achilles heel’ of the UK fuel industry, and real fears that supplies would be affected started to mount (Blair 2010: 292). The pickets, combined with the shock of high prices after such a prolonged period of falling prices, caused a rush to petrol stations and considerable pressure on surplus stocks (Helm 2003: 390).

It is briefly worth noting how Prime Minister Blair claims to have responded, politically, to the pickets in that it signals a clear contradiction with prevailing ideas about energy governance and markets. Blair was highly aware of public fears about supplies and harboured genuine concerns that petrol would not be able to flow properly from refineries to petrol stations, which generally require re-stocking every 48 hours.55 In his words “…(w)ithout the refining plants, no blood flows to the arteries…” (Blair 2010: 292). His response was to “…stamp his political authority all over the situation…” with the help of the army and police. His proposal to the police was that

55_{Blair  thought  that  the  Winter  fuel  protests  of  2000  resulted  in  a  strong  dip  in  Labour’s  performance  in}   the  polls  which,  just  ahead  of  the  general  election  in  May  2001,  was  seriously  bad  news  (Blair  2010:   297).  

drivers should be instructed to cross picket lines with the help of the police, or be ‘sacked’. In addition, if necessary, the army would be drafted in to drive lorries and deal with any violence from protesters (Blair 2010: 296). The treatment of the perceived threat to the UK’s ‘lifeblood’, i.e. supplies of energy, marks a strong contrast with the idea of energy as replaceable commodity, and to faith in the ability of markets to supply. It suggests the continued existence at this time of the more old fashioned notion that threats to energy supplies can be viewed as a national security issue which requires the state, or in this case Prime Minister, to take ultimate responsibility. This, in turn, raises questions about the degree to which the PEPP was perceived as such a successful model because of low energy prices, rather than because it was a particularly appropriate system for energy governance.

This was, in addition, interpreted by some as an early warning to Ofgem and the DTI where assumptions were being made both about lower prices being a direct outcome of liberalisation and about this being an ongoing condition (Helm 2003: 390). Depletion policy under the PEPP was now also beginning to open up to debate, especially given rising prices and the UK’s changing import-export position. It was observed that privatisation, and private sector companies’ tendency towards shareholder returns, had encouraged “…producers to produce and sell as much gas as possible as fast as possible…” (Stern 2004: 1968; see also Kemp & Stephen 2007; Interview 13). Connections started to be highlighted between competition, liberalisation and an energy sector driven by cost reduction and the risks of local shortages to consumers through a lack of additional stocks being held by private companies (Mitchell 2002: 6).

A couple of higher profile events, the ‘Enron scandal’ and the ‘California electricity crisis’, served to highlight the energy sector on a wider basis, beyond those institutions, and their advisors, directly involved in energy governance (Helm 2005). California in particular raised questions about security of supply (PIU 2002: 7). As California’s electricity sector had been liberalised in 1996, largely following the ‘UK model’, so when the blackouts of 2000 hit concerns were raised about the UK model (PIU 2002: 15; Helm 2003: 387). Further critiques, although not particularly high profile, followed of privatisation and liberalisation in energy – particularly marking electricity out as an area where such models do not function well (Borenstein 2002; Timney 2004). These critiques could be seen as important given the degree to which the market model was being encouraged via various IGOs in the developing world.

The ‘Enron scandal’, however, was less referenced in energy circles, despite the interest shown from academics and other analysts interested the corporate and financial systems and market manipulation (see Friedrichs 2004; Widmaier 2005; Watson 2008). Gross accounting malpractices, amongst other illegal dealings, were uncovered towards the end of 2001 and Enron plunged from its position as the largest international energy trader, and significant political lobbyist (Rutledge 2007: 903), to filing for bankruptcy by December 2001 (Hogan 2003: x). Enron, primary amongst the ‘Mega Btu- Marketers’, was seen as a primary enabler of the marketisation of energy. Certainly its management had claimed that it was “leading the fight for competition” and that it was capable of allowing customers and suppliers to strike whatever bargains they found mutually advantageous (Stelzer 2002 in Rutledge 2007: 903). Its demise, in such shocking circumstances, was widely covered, and its business practices condemned (Eichenwald 2002; Smith and Emshwiller 2003; McLean and Elkind 2003).

This scandal, however, raised more questions in political circles about white-collar crime (Friedrichs 2004), and the popular prosecution of individuals, than it did lasting investigation into systems of energy regulation or into pro-market energy trade and governance.56 It was barely mentioned in UK energy policy documents except to comment that Enron’s collapse, as the largest energy trader, had impacted on the supply of electricity to the market (JESS 2002: 5; PIU 2002: 77).