Graham's Blog Entry Friday 29 February 2008

Published on Fri 29th Feb 2008

Russia's muscle is making itself felt in energy policy. While I was with Austrian prime minister Alfred Gusenbauer in Vienna on Monday discussing the bid by Austrian oil company OMV for its Hungarian counterpart MOL, news came in that Hungary had agreed to Russian proposals for a pipeline called Southstream to bring gas into central Europe. This may put in jeopardy the EU's long-planned Nabucco pipeline due to bring gas from the Caspian Sea to Europe across Turkey. The USA has said it will support Nabucco, as it did the Tbilisi-Baku-Ceyhan oil pipeline, because it will bring gas from Azerbaijan more cheaply than it can be bought from Russia. However, the gas we will need in future years is rapidly being bought by Russia under forward contracts. The urgency of the EU's plans to cut the use of oil and gas, in order to fight climate change, grows apace.

I enjoyed a demonstration last week of one way to cut dependency on oil, when Honda lent me a Honda Civic hybrid car. This car runs both on petrol and batteries and has a stop-start mechanism which turns off the engine when idling (eg at traffic lights) and turns it on again immediately the brake pedal is released. I was mightily impressed with a substantial car which took me over 250 miles for less than twenty five quid's worth of petrol. But it may be in hydrogen that we find another way to cut petrol consumption in road transport; and BMW has offered me a long term test drive in June of a car partly powered by hydrogen. The HyWays project, funded by the EU's research programme, seeks to develop fuel cell technology (with the hydrogen produced from natural gas, biomass and wind power) and to have it on the market before 2020. It was on the agenda of the EU's research ministers earlier this week and will be voted on by Parliament on 10 March.

Not everyone is convinced, however. When the 27 Competitiveness ministers flew in from their national capitals at the start of the week they concluded that though the EU should lead in the fight against climate change it should do so "without harming the competitiveness of the EU economy". Some people just don't get it. Of course it will have an impact on the economy, but the initial negative impact should be more than adequately compensated for by medium and longer term savings and the development of new, exportable technologies. In any case, unemployment has been falling rapidly (down from 8.9% to 8.2% across the EU between 2005 and 2006) as globalisation of the economy has created 6.5 million new jobs in the past two years (European Commission's's annual joint employment report 2008). Where the protectionists have been proven wrong is in their belief that preserving domestic markets for ourselves saves jobs. In fact, using open markets to grow aggregate global demand provides a bigger pie from which even a smaller slice is still an improvement. We need the political courage to explain this to our voters and convince them of it.

Last night I enjoyed - hotfoot from my flight home - the chance to thank Langport and Somerton Rotarians for their role in supporting community projects worldwide. In particular, they help raise a hundred million dollars to eradicate polio in the 4 countries in which it persists: Afghanistan, India, Nigeria and Pakistan.

Today I visit schools in Sherborne and Wiveliscombe and address a constituency supper in Cheltenham. Tomorrow I campaign in a local by-election in Gloucestershire, speak at the Western Counties LD AGM and travel to London for the 25th anniversary dinner of Simon Hughes MP's election to Westminster. I was there on a cold February morning in 1983, walking up and down outside the polling station wearing a sandwich board saying "Simon Hughes - No 9 on the ballot"; for there were in that famous by-election two other candidates called Simon Hughes attempting to stymy the threatening advance of the Liberal-SDP Alliance.