Oil giant bosses warn of 'damaging' changes to drilling laws if governments over-react to Deepwater Horizon spill

Exxon Mobil has warned against quick reactive changes to deepwater drilling laws that damage long-term investment decisions and urged all governments to take time to assess the reasons for the Gulf of Mexico oil spill.

Senior executives of oil major Exxon Mobil Corp also underscored the importance of production from deepwater drilling in meeting global energy demand.

"We need to guard against premature reactive changes to legislation that may not in the longer term be helpful but detrimental to the industry," said Exxon Mobil senior vice-president Andrew Swiger.

"It is too early to speculate on any changes to legislation until the investigation is complete," he told reporters at an industry conference in Kuala Lumpur.

The Obama administration recently put on hold new deepwater exploratory drilling in the US for six months, pending the findings and recommendations of a presidential commission investigating the causes of the explosion in April that sank Transocean's Deepwater Horizon rig leased by BP. The review may lead to new laws on drilling.

Yesterday, President Obama sought to challenge criticism that he has not taken strong enough action. "We have had a lot of trials in the last year and a half," he said during a reception in Washington. "Right now we've got brothers and sisters in the Gulf Coast who are going through an incredibly difficult time. I want to emphasise again that we're going to do everything we can in the weeks, months and years ahead to make things right."

BP said its containment cap had captured 16,600 barrels of oil (697,200 gallons/2.64m litres) between 3 June and 6 June and it expects an increase in the amount of oil and gas collected in the coming days. A second system should soon be in place, enabling BP to siphon the vast majority of oil spewing from the leak about a mile (1.6 km) below the water's surface.

The progress over the weekend came as BP's chief executive Tony Hayward insisted he had no plans of quitting over his handling of the environmental disaster.

Mark Albers, Exxon Mobil senior vice president told Reuters the impact of the moratorium on deepwater drilling in the Gulf would be much longer than the six-month ban proposed by Washington, since it takes time to understand the effect of new regulations and bring the rigs back to work.

"It's important that in the next five years, deepwater will contribute 10m barrels per day of oil. That's equivalent to what Saudi Arabia is producing," Albers said in an interview in Beijing. "It's a very important element of meeting the world's energy demand."

Following the order to idle 33 deepwater rigs, oil firms including Royal Dutch Shell, Exxon Mobil, Chevron and Marathon have begun curbing their operations in the Gulf. Critics argue such meaures will exacerbate the harm to a Gulf Coast economy already losing fishing and tourism business thanks to the spill.

A lengthy deepwater drilling moratorium could also hit future US oil and natural gas output. According to the US Energy Information Administration, US Gulf offshore oil operations produced 1.6m barrels of oil per day in 2009, accounting for eight per cent of US liquid fuel consumption.

The Interior Department has also outlined a series of potentially costly new safety rules and standards that oil companies will have to contend with.

"There will be significant impact to the thousands and thousands of people who work, not only in the industry, but those who support the industry – from catering, to diving to inspections," Albers said.

The Louisiana Mid-Continent Oil and Gas Association estimates the moratorium could sideline up to 7,000 highly paid rig workers and cost four to five times as many support jobs at firms supplying catering, service boat and drilling.

Swiger added that Exxon Mobil has been providing assistance in response to the oil spill in the Gulf. "We stand ready to support efforts to determine how such an incident can be prevented from happening again," he said.

• Deepwater Horizon oil spill
• Oil spills
• Oil
• Pollution
• Energy
• Oil
• Exxon Mobil
• BP
• Oil and gas companies
• US economy
• United States

The blackout-blighted country should be free to accept development help from China, and not rely on US financial aid

From the whitewashed mansions of Clifton, Karachi, to the dusty village shacks in Gujar, Punjab, the two words heard most regularly on the lips of Pakistanis right now? Load-shedding, the political euphemism that is used by everyone – be they state official, liberal intellectual or housemaid – to discuss the country's long, daily blackouts. Power cuts and energy shortage are nothing new for the subcontinent; in six decades of being, Pakistan's infrastructure has never been able to cope with basic rate of growth and demand for energy – let alone been able to provide unlimited, uninterrupted electricity for its people. And yet, the country's current energy crisis is unprecedented: in the last two years it has become nothing short of a national disaster.

Just over a week since I arrived back in London – having spent six days criss-crossing the Punjabi province – and Pakistan is being held hostage to the most punishing heatwave in living memory. Record-breaking temperatures of 53C were recorded across the country last week, the death toll is consequentially rising even faster than the mercury. The heat is brutal, penetrative and unbearable to be caught outside in, but the real killer seems to be Pakistan's energy policy. Or, as it might be more accurately defined, the distinct lack of one.

Up to 12 hours of the day are routinely being endured without electricity across the country. Cities and villages take it in turns to have the lights turned out … to keep them on. Tolerating the current heat without power, without working fans, fridges, air conditioning (for those lucky enough to have afforded installation in the first place) and light, is not just a matter of inconvenience though: heatstroke, food poisoning and dehydration are killing in their hundreds while the death of livestock, paralysis of small and large business and the real threat to livelihoods and families is hurting further. The wealthy will switch on their generators to keep a running supply of power every time the electricity trips; the poor are simply left to swelter and suffer.

Foresight has rarely been a historic strength of Pakistani administrations, the last government failed to add a single megawatt of new power to the national grid under almost a decade of rule. The farcical current regime, led by Asif Ali Zardari, has been forced to scramble for a solution only to land itself between a rock and a nuclear place. An energy programme to tackle the problem long term, facilitated by the actual building of power plants and coal-mining projects (rather than through the financial aid pledged by Obama's administration), has been laid on the table by the Chinese government.

Given that the two countries would be co-operating in a civil nuclear programme to build several new nuclear power plants, the project has been met with the wholesale disapproval of the US government. China has cited the rules under its membership of the Nuclear Suppliers Group (NSG), which make it clear that no nuclear trade can be entered into with a country that has not signed the nuclear non-proliferation treaty. This, despite legislation being passed to enable similar nuclear trade between the US and India. Hypocritical twitchiness from the White House is nothing new. In this case, it does the US little favours in terms of its public perception from the region. Any attempt to block an essential power-generation deal between China and Pakistan will only be viewed with the same bitter contempt the public have for the daily US drone attacks to the country's tribal regions.

Pakistan consumed just 0.39% of the world's total electricity consumption last year, but energy providers such as Pepco (a nationalised company) are still unable to cope and meet the 4,000-5,000 megawatt shortfall in electricity needed to keep powering the country. No new dams have been built or planned for, although almost a third of the country's electricity is generated through hydropower. Meanwhile, the Thar coalfield in Sindh (the second largest province in Pakistan) contains an estimated 175 billion tonnes of deposits. If a Chinese-funded coal-mining power project is to go ahead, this could provide decades of cheap (albeit highly polluting) power. The country also has vast reserves of natural gas. And yet, with 65% of the country's supply delivered by thermal power – mostly generated through costly imported oil – no steps have been taken to switch to natural gas power production.

There is little doubt that Pakistan's ruling elite are to blame for short-sightedness, for being too greedily corrupt to install basic, decent utilities for the country's people. Now that moves could be made to correct this can only be a hopeful sign for the future. The Chinese policy, to offer trade and build projects rather than cash aid, is a sound one that further cements the historic relationship between the two countries. Unless the US has firm plans to propose a similar project, its intervention as a "special ally" is not only unwelcome but entirely unnecessary.

• Pakistan
• Energy
• Nuclear power
• US foreign policy
• China

Ten big-name festivals - including the Big Chill, Reading and Latitude - pledge to cut 10% of their emissions during 2010

The Big Chill, Latitude, Bestival, Reading and Lovebox: some of the coolest places to hang out in Britain this summer are among a host of big-name music festivals joining a campaign to cut carbon emissions.

Starting with the Isle of Wight last weekend, 10 festivals have joined the Guardian-supported 10:10 mission to cut their greenhouse gas emissions by 10% during 2010.

The venues - hosting a wide variety of bands and artists including Jay-Z, Lady Gaga, Elbow, Lily Allen, The Prodigy, Hot Chip, Florence + The Machine, The Flaming Lips, Spandau Ballet and Seasick Steve - have joined up as 10:10 begins a wave of international launches from France to the west coast of the United States.

Each festival has agreed to cut its emissions from power use for lighting, sound systems and stalls, from waste and from water use. Innovations include a solar-powered stage on the Isle of Wight to recycled or compostable cups and cutlery at Latitude, Reading and Leeds, and composting toilets at Bestival. They will be helped by low-carbon music industry specialists Julie's Bicycle.

The announcement follows research by Oxford University which showed that the combined emissions from 500 festivals in the UK was 84,000 tonnes of carbon dioxide in one year - more than the annual emissions of several small island states.

Tom Findlay, one half of electronic music duo Groove Armada and the founder of Lovebox, said the appeal of the 10:10 campaign was that "it makes change feel achievable".

The 10:10 campaign director, Eugenie Harvey, said that festivals helped the campaign reach new groups – particularly younger music fans at events like Reading and Leeds – and helped discard the image that all campaigns to tackle climate change preach denial and dismal living.

"Cutting carbon isn't all about staying at home and giving stuff up," said Harvey. "British summertime's all about getting out there and enjoying it while it lasts. And enjoying it all with 10% less carbon, well, who can argue?"

As the festival season gets underway, 10:10 has announced that four new international campaigns are being launched in France (where events are headed by Earth from Above photographer Yann Arthus-Bertrand), Germany, Portugal and Washington state in the US. This brings the total number of countries to 10: the Netherlands, Norway, Ghana, New Zealand, Ireland and the UK have already joined up.

The London-based campaign group said it is talking to another 17 overseas groups in Australia, Bosnia & Herzegovina, China, Nepal, Nigeria, Serbia and Spain. Other plans include a day of global action on Sunday 10 October - dubbed 10:10:10.

"As soon as we get over the excitement of one country wanting to start their own 10:10 operation, another gets in touch," said Lizzie Gillett, campaign director for 10:10 Global. "It goes to show 10:10 is inspiring people to make a genuine difference through simple changes."

• 10:10 climate change campaign
• Carbon emissions
• Waste
• Energy
• Ethical and green living
• Festivals

Now is the time to establish a new environmental corps, which could hire and train hundreds of thousands of jobless Americans

Not so long ago, the hottest political slogan on the American right was "drill, baby, drill." Gas prices were high, and the GOP, in hoc to the peculiarly virulent know-nothing'ism of Sarah Palin, was courting public support (and big oil money) by arguing that American waters and remote wildlife refuges should be opened to a second oil rush.

Now, of course, with the unfolding Deepwater Horizon catastrophe in the Gulf of Mexico, such rhetoric sounds naive at best, vastly negligent at worst. One indication of just how bad this oil spill is is the fact that serious voices are being raised suggesting the leak be sealed off with a nuclear explosion underneath the sea. Once gung-ho drill babyers, such as California governor Arnold Schwarzenegger, have publicly backed away from their previous positions. And those who haven't backed off, including Palin, are increasingly criticised by pundits and fellow politicians for their intransigence in the face of calamity.

This should, by any rational measure, be a moment of environmental awakening, a 21st century equivalent of, say, John Muir's wilderness philosophising, the publication of Rachel Carson's A Silent Spring, or the Chernobyl disaster. It should be a moment when the world, and America's voters in particular, recoil from laissez-faire models of resource extraction and instead demand greater government regulation, greater public accountability of vast corporations such as BP, greater acknowledgement of the fragility of the ecosystems upon which we all rely.

Amazingly, however, the opposite seems to be occurring. Rightly or wrongly, the government's response is perceived as hapless; and while almost everyone is furious about the environmental damage, and while more people blame BP than the federal government for the disaster, the systemic failings emanating out of DC are being used by anti-government activists to call for a further erosion of federal power; this would, presumably, ultimately further corrode the very regulatory agencies that fell down on the job this time around. It's a perfect example of the cutting off of one's nose to spite one's face approach to politics: as a punishment for their ineffectiveness, neuter regulatory agencies even more.

That said, I do think the federal government, in allowing itself to be perceived as drifting in the face of crisis, bears some of the blame for this incoherent political reaction. For it is missing a powerful educational opportunity and is shying away from a moment ripe for innovative reform.

Here's a suggestion: in the 1930s, with the centre of the country devastated by dust storms, with coastal erosion, and with an underfunded national parks infrastructure, Roosevelt's administration created the Civilian Conservation Corps, blending environmentalism with public works. Huge numbers of young Americans were put to work salvaging endangered local environments, bulking up the country's environmental infrastructure, and building trails, coastal resorts, campgrounds and the like, that, three generations later, still enrich our collective experience.

Today, the Gulf Coast's wetlands and marshes are being inundated with crude oil, and, despite the thousands of volunteers and paid workers engaged in clean-up activities, news reports continue to show evermore damage being inflicted on these beautiful, and ecologically vital, coastal areas. At the same time, around the country state parks are being closed and the services offered in those that remain open pared back, as a result of brutal state budget crises. Flood protection systems in many regions are dilapidated. And large numbers of polluted Superfund sites remain unrepaired and dangerous.

Given the public anger at Big Oil these days, as well as the staggering number of unemployed Americans, the administration would be wise to harness this anger in order to push for a modern-day Civilian Conservation Corps. In a very limited way, the Clinton-era AmeriCorps programme performs this role; but the numbers of people who go through the programme are relatively small and the breadth of its activities is somewhat narrow.

Why not marshal public fury at the Gulf oil disaster to generate funds for a huge new environmental corps, capable of hiring, and training, hundreds of thousands of unemployed Americans? The first few billion dollars could be provided by BP, at the urging of the government, as a downpayment on the epic liability costs the company knows it will have to incur over the coming years. The next few billion could be reaped from imposing increased profit taxes on oil companies – a tax that would have been viewed with great suspicion a couple years ago, but which, today, would likely curry popular support. And the federal government could then agree to something like a matching fund commitment, so that as big oil's tax contributions into the environmental corps increased, so too would those of the federal government.

For an industry desperate to regain a modicum of public support and political credibility, agreeing to pay taxes specifically earmarked to fund an environmental corps would likely be seen as a small price to pay for increased respectability. And for an administration critiqued by many as being out of touch with the pain of poverty and joblessness experienced on a daily basis by tens of millions of Americans, the added cost to the federal budget of such an employment-generating programme would be defrayed by huge long-term dividends.

An Environment Corps would have concrete environmental benefits; would help a significant proportion of the country's unemployed, especially youngsters fresh out of school or college; and, as importantly, would go some way toward re-establishing the notion in Americans' minds that government can, at its best, be a force for public good.

The alternative is too gloomy to countenance; a public, whipped into a frenzy of anger over an environmental cataclysm, responding with a knee-jerk anti-governmentalism that renders it even harder, in the long-run, to rein in Big Oil or to clean up Big Oil's messes when they next occur.

• Deepwater Horizon oil spill
• Oil spills
• BP
• Corporate social responsibility
• Oil
• Oil and gas companies
• Energy
• Energy industry
• Obama administration
• US politics
• US unemployment and employment data
• United States

Supplier of 130m-high turbine pulls out, saying it cannot comply with new health and safety regulations by games' opening

• London Olympics could flunk chance to be green
• Blog: ArcelorMittal's emissions make a monumental joke of Olympic park tower

Plans to build a 130 metre-high wind turbine to provide 5% of the energy needed to run the Olympic park have been scrapped, according to the Olympic Delivery Authority (ODA).

Dubbed the Angel of Leyton, the turbine had been hailed as a green beacon. It was said to be key to the ODA's commitment to deliver 20% of the park's legacy energy needs from renewable sources from 2014 onwards.

The scheme, however, is "no longer feasible", said David Higgins, chief executive of the ODA, which is building the infrastructure for the games.

Higgins said that construction of the turbine became unfeasible after new safety legislation forced substantial design changes under a "challenging" delivery timetable. After the preferred bidder's turbine supplier had pulled out – citing inability to comply with the new regulations in time for the opening of the games – there had been little commercial interest elsewhere.

The turbine, which was to be built in Eton Manor in the north of the Olympic park, was planned as a visible symbol of London 2012's commitment to deliver a sustainable games.

Higgins, an Australian project management fixer, said: "We have a strong track record in sustainability and we remain committed to meeting the challenging renewable energy targets we have set ourselves," he added.

"Our focus is now on researching a number of alternative renewable energy options across the Olympic park site to help contribute to these targets and complement the other state-of-the art new energy infrastructure we are building."

The ODA has 7,500 people working on the Olympic site and is on schedule to complete by mid-2011.

The sustainability watchdog for the 2012 games, the Commission for a Sustainable London 2012 (CSL), said that it backed the decision to scrap the turbine.

Shaun McCarthy, who chairs the watchdog, said the ODA must still meet the agreed carbon emission reduction targets by alternative means.

"The symbolic power of a wind turbine at the park, whilst valuable, does not outweigh the considerations of the optimal use of resources," he said.

Hackney council said that it was proceeding with a plan to erect a second turbine on a nearby site at East Marsh.

It said in a statement: "The decision not to have a turbine on Eton Manor does not affect the viability of the proposal for East Marsh although there will be a reduction in the potential amount of power available overall. East Marsh is a different site to Eton Manor and does not present the issues that have, in part, prompted the ODA's decision."

Hackney's plans are still at an early stage and it is still in talks with potential turbine suppliers. Any scheme would have to be the subject of a planning application.

• Olympic games 2012
• London
• Wind power
• Renewable energy
• Energy

Sharp rise in premiums for oil rigs following Deepwater Horizon spill in Gulf of Mexico

The oil industry has been hit by a sharp rise in insurance premiums for rigs following the Deepwater Horizon disaster.

The news came as BP's credit rating was downgraded by credit ratings agency Fitch today, just hours after its chief executive admitted the company had not been properly prepared to fight the oil spill in the Gulf of Mexico.

The insurance industry, reeling from losses estimated at between $1.4bn and $3.5bn (£2.4bn) caused by the disaster, has been quick to raise its prices. Deepwater Horizon is the largest single oil drilling rig loss since the 1988 Piper Alpha platform explosion in the North Sea, which triggered $3.6bn of insured losses (in 2009 dollars).

In a report on the fallout from Deepwater Horizon published today, credit ratings agency Moody's noted that insured losses would be "significantly" higher if BP, the operator and majority owner of the project, had purchased liability insurance in the commercial market instead of self-insuring its risks through its captive insurer, Jupiter Insurance.

The agency said early reports indicated that insurance premiums for deepwater rigs have jumped by up to 50% since the 22 April explosion, while the cost of insuring rigs operating in shallow waters has climbed by 15-25%.

"With the 2010 hurricane season just around the corner, any additional offshore energy losses in the Gulf of Mexico this year could further bolster pricing for offshore energy exposures," the agency warned. "Likewise, we expect offshore energy liability insurance premiums to trend higher, perhaps meaningfully, as insurers and reinsurers take stock of their losses and reevaluate the complex risks associated with drilling in deep waters."

• Oil
• Deepwater Horizon oil spill
• Energy industry
• Oil and gas companies
• Oil spills
• Energy

Square Mile starts to discuss whether BP will survive the Deepwater Horizon disaster

• Reactors builder won big concessions on key issues
• Rethink on costs is in effect a subsidy, says Greenpeace

The nuclear industry is being offered what campaigners claim is a taxpayer subsidy on the disposal costs of waste from new reactors following a secret lobbying campaign, the Guardian has learned.

The revelation will put further scrutiny on the new government's promise that there will be no subsidy for nuclear power. Liberal Democrat Chris Huhne, the new energy and climate change secretary of state, admitted to the Guardian this week that the government already faces a £4bn funding black hole over existing radioactive waste.

The previous government had planned to charge the industry a high, fixed, disposal levy tied to the amount of nuclear waste it produced. It had also originally told the industry that responsibility for the waste should be transferred to the state only once the waste had been disposed of, at least 110 years from the start of a reactor's operations. Both proposals were deeply unpopular with the industry.

In March, the Labour government published revised proposals that made significant concessions on both issues. Consultation on the plans will conclude this month. A spokesman for the energy department said the consultation was continuing but declined to comment on whether the new government would take a different approach to the previous administration.

Documents released under a freedom of information request reveal the extent of behind-the-scenes lobbying last year in Whitehall by EDF Energy, the French firm that wants to build the first new reactors in the UK for decades. The lobbying focused on the two key proposals which were revised in March.

In one meeting with officials from the energy department in July last year, EDF Energy's presentation concluded that the original proposals were "non-acceptable" [sic]. In another meeting in October, the presentation warned: "At current levels, [the proposed] fixed price model will significantly impact the economics of NNB [nuclear new build] in the UK and could make an investment unattractive." In a letter in July to the department, the company even warned that the cost calculations could "be open to challenge in future on the grounds of prudency".

A spokesman from Greenpeace said: "These documents blow EDF's claim that they won't need any subsidies for new nuclear clean out of the water. They know full well that the economics of nuclear don't stack up and that new reactors will only ever happen if the British taxpayer is forced yet again to carry the atomic can."

In an effort to protect the taxpayer from having to pick up the tab, last year the government proposed charging a very high fixed unit price for waste disposal. But EDF argued it was much too high. The revised proposal would allow operators to set aside a much lower amount for the first 10 years of a reactor's operation.

The original plan had also been for the government to assume title – or responsibility – for the waste once it had been disposed of in a new underground storage facility, which has yet to be built. This transfer – and the transfer of funds by operators to the government to cover the costs – would take place after 110 years of the reactor beginning operation, at the earliest. But EDF said this would involve too long-term an investment risk, as the returns from their waste disposal fund would have to cover the costs when it matured over a century later. The consultation instead proposed the transfer taking place once decommissioning has been completed, after around 60 years.

An energy department spokesman said: "The allegation that outcomes of the consultation have been pre-agreed with industry have no foundation. The coalition has committed that there will be no public subsidy for new nuclear."

• EDF Energy
• Nuclear power
• Nuclear waste
• Utilities
• Energy industry
• Energy

Energy secretary blames predecessors for avoiding tough decisions in 'classic example of short-termism'

Britain is facing a £4bn black hole in unavoidable nuclear decommissioning and waste costs, Chris Huhne, the energy and climate change secretary disclosed tonight.

The decommissioning costs over the next four years revealed by officials to Huhne are so serious that he has already flagged the crisis up to the cabinet.

The revelation places an unexpected burden on his department's £3bn annual budget ahead of difficult spending negotiations this summer. "As you can imagine, this is a fairly existential problem. The costs are such that my department is not so much the department of energy and climate change, as the department of nuclear legacy and bits of other things," Huhne told the Guardian.

The additional costs derive from slowly rising expenditure on nuclear decommissioning, and falling income due to the closure of ageing power plants, Huhne said.

Huhne disclosed that in current financial year the Nuclear Decommissioning Authority's budget is expected to be in balance.From 2011-12, the deficit suddenly rises to £850m, in 2012-13 the gap increases further to £950m and then to £1.1bn in the two subsequent years.

The black hole is equivalent to wiping out one-sixth of the overall cuts in public spending identified by the Treasury with such fanfare last week.

But Huhne insisted: "I do not think it is possible for anyone responsibly to stand aside and say we are not going to deal with it. We just have to, but what we are effectively paying for here is decades of cheap nuclear electricity for which we have suddenly got a massive postdated bill."

The revelation will also hand further ammunition to those who say a new generation of nuclear power stations in Britain will end up being more expensive than the industry claims.

Huhne – a Liberal Democrat and nuclear sceptic – refused to make that argument directly, saying instead it just underlined the need to ensure that any new nuclear stations had watertight agreements that debar all public subsidy. In any case there are growing signs that the nuclear new-build timetable is slipping as costs rise.

Huhne, already in talks with the Treasury about the black hole, said it was very hard to avoid the expenditure: "There are genuine nuclear safety issues here that means it has to be paid for."

If the Treasury refuses to shoulder the full costs, Huhne's department would inevitably have to make cuts with possible implications for energy efficiency and climate change programmes.

Huhne revealed that as soon as he discovered the problem, he travelled to Sellafield nuclear plant in Cumbria and concluded: "There is no way of dealing with this, but by making sure this expenditure goes ahead."

Since the NDA was formed in 2004, the clean-up of legacy nuclear facilities has been paid for with a mix of funds – roughly half in direct government grants and half generated commercially by the NDA – and allocated in three-year cycles.

Huhne said: "My predecessors avoided taking tough decisions when they should have done and the result is that it is much more expensive to deal with than if we had dealt with it in a timely manner back in the 70s and 80s. A lot of it is spent fuel, and was not dealt with at the time. It is a classic example of short-termism. I cannot think of a better example of a failure to take a decision in the short run costing the taxpayer a hell of a lot more in the long run."

The Liberal Democrats oppose new stations, but have said they will abstain in any key Commons votes on the issue so long as their Conservative coalition partners ensure no new station enjoys any overt or hidden public subsidy.

Huhne said: "New build is clearly more efficient, there is less waste, and the decommissioning can and should be designed in, but … we need to make sure all the costs are properly dealt with."

• Tax and spending
• Nuclear power
• Energy
• Chris Huhne
• Liberal-Conservative coalition
• Nuclear waste
• Liberal Democrats
• Conservatives

• Report highlights widespread failings at Europe's biggest atomic site
• Safety watchdog closes one plant and takes legal action against site's operators

The government's safety watchdog is cracking down on Britain's biggest and oldest nuclear complex after a series of radioactive leaks and safety blunders, despite private sector managers receiving multimillion-pound "performance-related" payments from the Nuclear Decommissioning Authority.

The Health and Safety Executive (HSE) has closed down a vital nuclear waste plant at Sellafield in Cumbria, and is taking legal action to force the site's operators to improve their flawed safety procedures.

The HSE has also rejected a £40bn plan for cleaning up Sellafield because of proposed delays in dismantling ageing and potentially hazardous facilities.

The disclosures come at a critical time for the nuclear industry which is trying to convince Chris Huhne, the energy and climate change secretary, it is efficient enough to build a new generation of reactors.

But the crackdown is also embarrassing because Nuclear Management Partners (NMP) – a consortium involving Amec, URS and Areva – is believed to have made "profits" of up to £50m over a 12-month period.

NMP took over control of Sellafield in November 2008 and was given the opportunity to win incentive payments if it improved the efficiency of Europe's biggest atomic site over the first 12 months. A spokesman for Amec confirmed "fees were paid" but said he was unable to give further details.

The decommissioning agency said the private companies had received £16.5m for the first four months of their work but it said figures for the last financial year would be published in July. It said the maximum under the contract could be £50m – in line with £16.5m for four months – and independent industry experts believe NMP won close to that top figure.

The HSE's latest report on Sellafield, posted online, discloses a litany of problems at the crowded site which sprawls over six square miles on the edge of the Lake District and is home to more than a thousand nuclear facilities, some dating back more than 50 years.

One of the main plants for solidifying highly radioactive liquid waste has been shut for safety reasons since 31 March, the report said. The case for continuing to operate the facility safely has been deemed "inadequate" by HSE inspectors.

According to the report, HSE has also taken enforcement action after cooling water needed to prevent highly radioactive waste tanks from overheating leaked twice in 10 months. Sellafield has been ordered to rectify an alleged breach of its safety licence – failing to give staff proper training – by 18 June.

HSE has taken further regulatory action over a leak of radioactively contaminated water from a pipe during nuclear fuel reprocessing operations. Along with another government watchdog, the Environment Agency, it has ordered Sellafield to correct breaches of radiation rules that enabled the leakage to occur.

The HSE report, which covers the first three months of this year, revealed there had been two other leaks in evaporators which process "highly active liquor". Sellafield is also criticised for taking more than 18 months to fix "known defects" with the fire protection systems at the thermal oxide reprocessing plant.

The HSE said the site will fail to meet a deadline of 1 August for clearing radioactive sludge out of old ponds and repackaging it into steel containers. The watchdog also has "concerns" about the management of change on the part of the site still known as Windscale.

In addition, HSE has refused to endorse the latest "lifetime plan" for Sellafield outlining schedules for decommissioning plants over the next 110 years. "It will not be a plan we can accept," its report said, because of worries about the "deferral dates for some facilities".

Sellafield is home to "the world's most dangerous stockpile of high-level liquid waste," according to Marianne Birkby, from the anti-nuclear group, Radiation Free Lakeland. "The evidence shows the industry cannot safely look after its existing wastes."

Sellafield Ltd, the company that runs the site, conceded there were "challenges" due to "ageing facilities and assets". "The new NMP team has been specifically brought in to improve on the historic record and is already delivering significant improvements and results," said a company spokesman. The site has been given £1.5bn this year – its highest level of funding to date – to reduce the hazards.

The spokesman added: "We have a clear focus on hazard and risk reduction on the site and have prioritised our significant resources at those areas that present the most difficult challenges."

The HSE said it will continue to highlight problems at Sellafield. "Our inspectors closely regulate operations on the site and on occasion where required will take enforcement action," said an HSE spokeswoman. "We are satisfied that Sellafield Ltd recognises, and is taking steps to effectively manage the risks and hazards on the site."

• Energy industry
• Amec
• Regulators
• Nuclear power
• Nuclear waste
• Energy

Salford University staff to simulate life in terraced two-up, two-down in effort to make UK's housing stock greener

Energy-efficiency scientists are to study how people live by rebuilding an entire, redbrick Manchester terraced house inside a university laboratory's sealed testing chamber.

The two-up, two-down dwelling is identical to those portrayed in Coronation Street, television's oldest surviving soap, and to more than two million real-life homes.

It will be used for power-saving experiments in simulated climates featuring high winds, snow and Manchester's notorious rain.

The pre-first world war house is to be salvaged from a nearby demolition scheme. It will be dismantled within the next fortnight and rebuilt in the Energy Hub at Salford University.

Gas, water and electricity will be piped in and furniture installed, with staff from 13 academic departments taking turns to play the part of residents.

Life in this "Energy House" will be as busy as in any of the terraces which sprang up across the North of England to house those working in mines and mills, but focused on entirely modern concepts such as carbon-reduction equipment and smart-meter tests.

Psychologists will join engineers in a series of experiments to see if particular wall or carpet colours make people feel warmer and reduce the demand for heat. Home energy use accounts for 30% of the UK's greenhouse gas emissions.

"It's a house from the past, working for the future," said Dr Nigel Mellors, associate dean of science, engineering and technology at Salford and one of the team running a project aimed to last 20 years or more.

"But this one is only the beginning'" he said. "We reckon we'll know everything we need to about how to improve a terrace like this after about three years. Then we'll knock it down and build something different. Perhaps a typical 1960s house, to see how that can be improved."

The project is designed to parallel work on new-build energy-saving homes, recognising that many housebuyers prefer older properties for other reasons.

Dave Ritter, sustainability director at BDP architects, who are also involved with the scheme, said the sheer number of surviving terraces was proof of their appeal.

"They are in many ways an extremely successful design, with a particularly good sense of community and neighbourly links," he said.

"They are on a nice scale and sensibly laid-out inside. But energy-saving was not an issue at the time they were built, and this project is an imaginative and very practical way of putting that right."

Remodelled terraces have already proved a success in the Lancashire Pennine towns of Nelson and Colne and also in Salford, notably at Chimney Pot Park where the developers Urban Splash have "upended" the old model, giving 19th century terraces sleeping quarters downstairs and living rooms on the first floor.

Leeds has found a huge market as starter homes for its 40,000-plus back-to-back terraces, once condemned as slums for having inadequate ventilation but now, with three of their four walls comfortably sandwiched by other homes, praised for saving heat and economical use of space.

Green variations also include some Northern towns' policy of "alternate demolition", where the clearing of every other row of barrack-like terraces has doubled the gardens and open space of those left.

Larger scale demolition of traditional terraces by government housing renewal projects has caused anger in Liverpool, Manchester and Lancashire's former milltowns.

Professor Steve Donnelly from Salford's faculty of science said terraced houses had won their case for reprieve but now needed "ways of being more efficient, as they are going to house people for generations to come. That requires detailed and robust research, which the Energy House will provide".

Tony Juniper, former director of Friends of the Earth, said: "Domestic energy use accounts for a huge proportion of emissions which we have to reduce. The millions of real-life terrace houses like this one are going to play an important part."

John Alker, policy director at the UK Green Building Council, said: "This looks like a great piece of research and it will be particularly interesting to see the results on behaviour, where less has been done to date.

"But let's not forget that there is a hell of lot that we know already – the biggest barrier to low carbon home refurbishment going mainstream has tended to be the upfront cost to consumers, and that is set to be tackled by the Energy Bill in the form of 'Pay As You Save schemes'."

• Energy efficiency
• Green building
• Energy monitoring
• Energy
• Water
• Energy bills
• Consumer affairs
• Housing
• Architecture
• University of Salford
• Coronation Street

The day's main event was the clash of Chris Huhne's abstract nouns with Ed Miliband's attempt to enthuse Labour backbenchers

The day's main event was the debate on energy, featuring Chris Huhne, the Lib Dem cabinet minister, and Ed Miliband, who is running for leadership of the Labour party. Huhne had to demonstrate that he was a loyal member of the Conservative administration. The Tories are all in favour of nuclear power stations, which need to be built lickety-split, as we have few energy supplies left, and within a few years the government will be handing out exercise bikes hooked up to the mains and we will have to pedal frantically if we want to watch Match of the Day – or boil an egg.

The Lib Dems, by contrast, are totally opposed to nuclear power. Without the spirit of goodwill that has created the coalition, this might have been a problem. Instead, they have gone for what I think of as the fox hunting compromise. Fox hunting is now illegal, yet carries on much as before. In that way, everyone is happy, except the foxes. In the same way, the coalition parties are agreed that nuclear power should get an immediate go-ahead. On the other hand, it will have to be financed entirely by private money, with no state aid. This means no nuclear power stations will actually be built. The world will gaze in wonder at this cunning arrangement, and will continue to gaze until the lights go out.

Huhne is a former member of the European parliament, and it shows. He loves the kind of phrase that is constructed out of abstract nouns, selected to make it easy to translate into 20-odd languages. "Preventing habitat degradation"; "exploring new international sources of funding"; "decarbonising our economy" and the sonorous "2001: United Nations Year of Biodiversity". Presumably some young civil servant had the job of putting the speech together at random from a box of cards marked "Energy and Conservation Bingo". Huhne read it out with an air of passionate conviction. Somewhere, you felt, an interpreter was falling asleep.

Miliband had the opposite problem. He needed to enthuse and excite. The message to Labour backbenchers had to be that he was the chap who would maintain a ferocious attack on the coalition, the leader who would never apologise for the last 13 years but restore his party's morale. The difficulty is that most MPs agree on climate change. "The other side are more or less right!" is never going to be a great battle-cry, so he slid over the topic as fast as he could.

His main assault was on the Lib Dems, who have had to support policies they explicitly ran against. "Being a Lib Dem in opposition meant not having to choose … being a Lib Dem in government means not having to choose either!" Huhne interrupted to say that the government couldn't spend money because we were in a worse position than Greece. "Aha!" cried Miliband, "the Greek defence! You don't need to keep your promises, because of something that happened in Greece!" A far away country of which we know quite a lot.

Meaningless, of course, but it won't half cheer up the Labour party.

• House of Commons
• Ed Miliband
• Energy
• Chris Huhne
• Nuclear power
• Liberal Democrats
• Conservatives
• Labour

The Gulf disaster is only unusual for being so near the US. Elsewhere, Big Oil rarely cleans up its mess

Big Oil is holding its breath. BP's shares are in steep decline after the debacle in the Gulf of Mexico. Barack Obama, the American people and the global environmental community are outraged, and now the company stands to lose the rights to drill for oil in the Arctic and other ecologically sensitive places.

The gulf disaster may cost it a few billion dollars, but so what? When annual profits for a company often run to tens of billions, the cost of laying 5,000 miles of booms, or spraying millions of gallons of dispersants and settling 100,000 court cases is not much more than missing a few months' production. It's awkward, but it can easily be passed on.

The oil industry's image is seriously damaged, but it can pay handsomely to greenwash itself, just as it managed after Exxon Valdez, Brent Spar and the Ken Saro-Wiwa public relations disasters. In a few years' time, this episode will probably be forgotten – just another blip in the fortunes of the industry that fuels the world. But the oil companies are nervous now because the spotlight has been turned on their cavalier attitude to pollution and on the sheer incompetence of an industry that is used to calling the shots.

Big Oil's real horror was not the spillage, which was common enough, but because it happened so close to the US. Millions of barrels of oil are spilled, jettisoned or wasted every year without much attention being paid.

If this accident had occurred in a developing country, say off the west coast of Africa or Indonesia, BP could probably have avoided all publicity and escaped starting a clean-up for many months. It would not have had to employ booms or dispersants, and it could have ignored the health effects on people and the damage done to fishing. It might have eventually been taken to court and could have been fined a few million dollars, but it would probably have appealed and delayed a court decision for a decade or more.

Big Oil is usually a poor country's most powerful industry, and is generally allowed to act like a parallel government. In many countries it simply pays off the judges, the community leaders, the lawmakers and the ministers, and it expects environmentalists and local people to be powerless. Mostly it gets away with it.

What the industry dreads more than anything else is being made fully accountable to developing countries for the mess it has made and the oil it has spilt in the forests, creeks, seas and deserts of the world.

There are more than 2,000 major spillage sites in the Niger delta that have never been cleaned up; there are vast areas of the Colombian, Ecuadorian and Peruvian Amazon that have been devastated by spillages, the dumping of toxic materials and blowouts. Rivers and wells in Venezuela, Angola, Chad, Gabon, Equatorial Guinea, Uganda and Sudan have been badly polluted. Occidental, BP, Chevron, Shell and most other oil companies together face hundreds of outstanding lawsuits. Ecuador alone is seeking $30bn from Texaco.

The only reason oil costs $70-$100 a barrel today, and not $200, is because the industry has managed to pass on the real costs of extracting the oil. If the developing world applied the same pressure on the companies as Obama and the US senators are now doing, and if the industry were forced to really clean up the myriad messes it causes, the price would jump and the switch to clean energy would be swift.

If the billions of dollars of annual subsidies and the many tax breaks the industry gets were withdrawn, and the cost of protecting oil companies in developing countries were added, then most of the world's oil would almost certainly be left in the ground.

• Deepwater Horizon oil spill
• Oil
• Oil
• Oil spills
• Energy
• Oil and gas companies
• BP
• Energy industry
• Obama administration

The lesson to learn from the oil spill it is that there must be no new offshore drilling. We must transform our energy system

The BP oil spill in the Gulf of Mexico is an unmitigated disaster. Its full consequences will not be known for decades. What we do know, however, is that BP president, Tony Hayward, was incredibly wrong when he stated that the spill will have "a very, very modest environmental impact". Quite the contrary! In fact, one of the most beautiful and productive coastal regions of the world is being turned into a giant cesspool and, in the midst of a major recession, thousands of workers are going to lose their livelihoods.

It goes without saying that BP must pick up the full costs of the cleanup and the economic damages. BP earned $5.6bn in the first quarter of this year. BP, not the American taxpayer, must pay for the devastation it caused.

Further, we must learn that with any risky technology, whether it is offshore oil drilling or nuclear power, it is not good enough to be 99% safe. One event can have a calamitous and irreversible impact. We need a major investigation to understand how this accident occurred. We must make certain that precautions are put in place so nothing like it ever happens again.

This crisis occurred at a time when the United States was considering opening new areas to offshore oil drilling. If there is a lesson to be learned from this disaster, it is that Congress must end that policy. There must be no new offshore drilling. Not now, not ever.

Offshore drilling simply does not achieve the goals that its advocates claim, and it is not worth the risk. If we are serious about wanting to break our dependence on foreign oil and move to energy independence; if we want to lower the cost of energy; if we want to combat climate change and cut greenhouse gas emissions; if we want to create millions of new jobs – then more offshore drilling is not the way to go.

The simple truth is that we cannot drill our way to energy independence or lower gas prices. The US uses roughly 25% of the world's oil, 7.5bn barrels per year, but we have only 2-3% of the world's proven petroleum reserves. Offshore drilling today provides roughly 1% of the oil we use in the United States.

That is why I have introduced legislation to reinstate a ban on new offshore drilling in the Atlantic and Pacific continental shelves and along Florida's gulf coast and dramatically increase fuel efficiency for vehicles sold in America. Instead of saving three cents a gallon by 2030 by allowing wide open offshore drilling, we can save far more with stronger fuel economy standards. Just by raising our fuel efficiency standards to 35.5 miles per gallon for cars and trucks, as President Obama is doing, we will save consumers the equivalent of $1 per gallon of gas in 2030. If we enacted my legislation, we would reach 55 miles per gallon by 2030. That would save motorists the equivalent of $1.43 a gallon of gas. It also would eliminate the need for 3.9m barrels of oil per day, more than double the amount we now import from Persian Gulf nations such as Saudi Arabia.

We know we can get better fuel economy, because other nations are already doing it. The European Union currently gets 42 miles per gallon and is moving to 65 miles per gallon by 2020. China, Canada, Japan, and South Korea all have stronger fuel economy standards than the United States.

If we take bold action in energy efficiency, public transportation, advanced vehicle technologies, solar, wind, biomass, and geothermal, we can transform our energy system, clean up our environment, and create millions of new jobs in the process. This direction, and not more offshore drilling, is where we have got to go.

• Deepwater Horizon oil spill
• Oil spills
• Energy
• Oil
• Oil and gas companies
• BP
• Energy industry
• Renewable energy
• US politics
• United States
• US domestic policy

• US suspends drilling in Arctic Ocean following Gulf disaster
• 'Top kill' plan's chance of success put at 50-70%
• Untried deep underwater tactic uses heavy mud to stem leak

The Gulf oil spill has surpassed the Exxon Valdez as the worst in US history, according to new estimates released today, although the coastguard and BP said an untested procedure to plug the leak appeared to be working.

A team of scientists, trying to find out how much oil has been flowing since the offshore rig Deepwater Horizon exploded on 20 April, found the rate was more than twice and possibly up to five times as high as previously thought.

Even using the most conservative estimate, that means the leak has grown to nearly 72 million liters, surpassing the size of the 1989 Exxon Valdez disaster, which at about 42 million litres had been the nation's worst spill. Under the highest estimate, nearly 148 million litres may have spilled.

Meanwhile BP engineers hare well advanced on the risky procedure known as a "top kill" to try to cut off the flow by pumping heavy drilling fluid into the well.

If that works, BP will inject cement into the well to seal it. The top kill has been used above ground but has never been tried in deep water. BP estimated its chance of success at 60 to 70 per cent.

Lieutenant commander Tony Russell, an aide to Coast Guard Adm. Thad Allen, said Thursday that the mud was stopping some oil and gas but had a ways to go before it proved successful. The top kill started Wednesday night and it could be several days before officials know if it is working.

"As you inject your mud into it, it is going to stop some hydrocarbons," Russell said. "That doesn't mean it's successful."

BP spokesman Tom Mueller also discounted news reports that the top kill had worked. "We appreciate the optimism, but the top kill operation is continuing through the day today – that hasn't changed," he said. "We don't anticipate being able to say anything definitive on that until later today."

Oil is coating birds and delicate wetlands along the Louisiana coast, and the political fallout from the spill has reached Washington, where the head of the federal agency that oversees offshore drilling resigned today.

Elizabeth Birnbaum , the director of the minerals management service, stepped down hours before a planned White House press conference where President Barack Obama was expected to extend a moratorium on new deepwater oil drilling.

Birnbaum and her agency came under withering criticism from lawmakers of both parties over lax oversight of drilling and cozy ties with industry. An internal Interior Department report released earlier this week found that between 2000 and 2008, agency staff members accepted tickets to sports events, lunches and other gifts from oil and gas companies and used government computers to view pornography. Birnbaum had run the service since July 2009.

After receiving the results of a 30-day safety review from the interior secretary Ken Salazar, Obama also planned to delay controversial lease sales off the coast of Alaska and cancel plans for drilling lease sales in the Western Gulf and off the coast of Virginia, according to a White House aide.

If the top kill fails, BP says it has several backup plans, including sealing the well's blowout preventer with a smaller cap, which would contain the oil. An earlier attempt to cap the blowout preventer failed. BP could also try a "junk shot" – shooting golf balls and other debris into the blowout preventer to clog it up – during the top kill process.

The only permanent solution is drilling a second well, but that will take a couple of months. BP plans to go ahead with that even if the top kill works.

Speaking six hours into the operation, BP's chief operating officer, Doug Suttles, said it appeared to be working and that mud, not oil, was now coming out of the ruptured pipe.

"We're doing everything we can to bring it to closure, and actually we're executing this 'top kill' job as efficiently and effectively as we can," he said.

The company has 50,000 barrels of mud on location, which it described as "far more than necessary, but we want to be prepared for anything".

Last night, Barack Obama described the disaster as "heartbreaking" and expressed hope that the procedure will work.

"If it's successful, and there's no guarantee, it should greatly reduce or eliminate the flow of oil now streaming into the Gulf from the sea floor," the president said .

Obama added: "We will not rest until this well is shut, the environment is repaired and the clean-up is complete."

His statement followed a poll by CBS News yesterday which found 70% disapproval of BP's handling, and 45% unhappy with the Obama administration's response.

Yesterday, Salazar reiterated that BP will be "held accountable" for compensation and government costs.

The oil company may find itself having to answer further questions today, after revelations that just days before the Deepwater Horizon explosion the company had chosen to use the riskier of two types of casing for the leaking well.

The New York Times reported the existence of a BP document, given to the paper by a Congressional investigator, which noted the casing that the company had chosen was described in the document as the "best economic case", despite BP admitting it carried risks beyond the potential gas leaks.

Greg McCormack, director of the Petroleum Extension Service at the University of Texas at Austin, told the newspaper that BP's decision was "without a doubt a riskier way to go", an assessment which the New York Times reported several other engineers had agreed with. A BP spokesman argued that the Deepwater Horizon approach had not been unusual.

Hayward yesterday visited the scene of the environmental disaster in Port Fourchon in southern Louisiana, where he said he was "absolutely gutted" that the crude oil had started to wash ashore.

"As I said, it's clear that the defence of the shoreline, at this point, has not been successful," Hayward said. "I feel devastated by that, absolutely gutted. What I can tell you is that we are here for the long haul. We are going to clean every drop of oil off the shore.

Just days after a top US official suggested that BP faced an "existential crisis", Hayward conceded: "I think this is clearly a major reputational issue for BP."

• Deepwater Horizon oil spill
• Oil
• Oil
• Oil spills
• Oil and gas companies
• Obama administration
• BP
• Louisiana
• United States
• Energy
• Energy industry

Workers evacuated as Norwegian engineers pump cement into offshore well to prevent explosion as Deepwater crisis highlights environmental dangers of drilling

Ninety oil workers have been evacuated from a North Sea rig as engineers fight to control a huge build up of pressure in a well which critics say has the potential to blow-up the platform and cause a major environmental problem.

The Norwegian company Statoil has been pumping cement into an offshore well on the Gullfaks field in an operation similar to the one being attempted today by BP in the Gulf of Mexico.

The equivalent of around 70,000 barrels of oil a day of production from the Gullfaks C, Tordis and Gimle platforms has been shut down and more than 90 staff evacuated from the area, which lies in Norwegian waters.

The country's industry regulator said it was the third well control incident on Gullfaks in the past six months.

Jake Molloy, offshore organiser of the RMT union in Aberdeen, said the case also highlighted the continuing dangers of oil extraction off Britain's coast. He added: "The huge gas bubble under the Gullfaks has the potential to threaten the platform."

However, Statoil said today that the well was being brought under control. "We had a build-up in pressure and the barriers (through the blowout preventer) worked as they should. We are now pumping cement into the well and the pressure is starting to fall," said Kai Neilsen, a spokesman for the oil group in London.

Nelson said the previous incidents on Gullfaks had not been serious but Inger Anda, a spokeswoman for Norway's Petroleum Safety Authority (PSA), said a well "kick", reported in December, was serious. A further incident on 30 April this year – also a gas kick caused by high pressure – was brought under control quickly.

Anda said the authority was having daily meetings with Statoil until the latest problem was resolved.

Gullfaks C started production in 1990. It is one of three large concrete-legged platforms comprising the huge Gullfaks development and stands in water 217 metres deep – much shallower than BP's Deepwater well in the Gulf. The unit taps oil from the Tordis field as well as taking in supplies from the Gimle and Skinfaks satellite fields.

The Bellona green campaign group said it was concerned about lax regulation in the North Sea. It described the Statoil field emergency as "very critical" and highlighted continued risks of offshore oil and gas exploration in the wake of BP's well blowout and environmental disaster off America.

"They have a situation in which there is uncontrolled pressure from the well, one of the barriers is gone and one barrier is left," said Frederic Hauge, head of Bellona, one of the leading environmental groups in Norway.

"Uncontrolled pressure is very serious and has the capability of being a large accident," he said, adding that in the first quarter of 2010, eight incidents took place in the Norwegian oil industry that could have had huge consequences. "That is very serious. Regulatory work in Norway may look nice from outside, but we have a lot of security issues in the Norwegian industry."

• Deepwater Horizon oil spill
• Oil
• Energy
• Energy industry
• Oil
• Oil and gas companies
• Oil spills
• Norway

Engineers for BP hope to learn if an attempt to plug the leaking oil well in the Gulf of Mexico with mud and chemicals will be successful

Energy and climate change secretary "will take pragmatic approach" to new power stations, says EDF's Vincent de Rivaz

EDF Energy will announce today that it has received sufficient reassurances from the energy and climate change secretary, Liberal Democrat Chris Huhne, to continue planning for a new generation of nuclear plants in Britain.

There were fears that the Lib Dems' manifesto commitment to halt the construction of any more nuclear reactors, and recent sceptical signals from Huhne, could derail its £20bn building programme.

But Vincent de Rivaz, the chief executive of EDF in Britain, will tell a conference he is convinced that both sides are committed to the same goal: new reactors without subsidies and at a viable cost.

"What has emerged very quickly from the coalition government is clarity over its commitment to deliver a low carbon future, together with a commitment that new nuclear will play a part in the new administration's plans," de Rivaz will say. "Chris Huhne … has already provided important reassurances that he will take a pragmatic approach to new nuclear power as long as it can be built without subsidy.

"The commitments from the coalition government envisage a proper role for nuclear and have reassured us at EDF, as we contemplate the very serious investment we are proposing to make in nuclear power in the UK," he will add in a speech to the Global Energy Capital Market Conference in London.

EDF says it has been particularly pleased by comments about the introduction of a floor to the carbon price plus a commitment to speed up the planning regime for new energy infrastructure through a clear national policy statement. The company, an arm of the huge, largely state-owned, French utility EDF, insists that it is happy to build new reactors without otherwise relying on any handouts from the Treasury, even for waste or decommissioning.

EDF wants to build four new reactors at Hinkley Point in Somerset and Sizewell in Suffolk that would generate enough power to light 40% of Britain's homes or the equivalent of 13% of all UK electricity, but the final decision on whether to proceed is not due to be taken until 2011.

"We've made it clear to the prime minister and the secretary of state for energy and climate change that EDF Energy will spearhead the nuclear renaissance in the UK without the need for public subsidy. That is important to the government. It is important for us," de Rivaz will say. "We operate in a market where the costs for waste and decommissioning are met by nuclear operators through an independently assessed, ring-fenced fund, a requirement further underpinned in this year's Energy Act … Together with other operators we will continue to make regular payments into those funds, to protect ordinary creditors against any associated prospective costs."

De Rivaz says that latest public opinion polls show growing support for nuclear power even from Lib Dem supporters, who have traditionally been among the most negative towards it. And he will quote from a new report published by Parsons Brinckerhoff Power that suggests power can be generated much more cheaply by nuclear than by competing technologies.

"Their data shows that with typical generation costs in the range of £55-£86 per megawatt hour [MWh], new nuclear is well placed in helping keep low carbon energy affordable in the long term," he will say. "That compares particularly favourably to other low carbon technologies. Offshore wind represents a generating cost of up to £204 per MWh and carbon capture and storage technology up to £154 per MWh."

• EDF Energy
• Nuclear power
• Chris Huhne
• Energy industry
• Liberal-Conservative coalition
• Energy

Householders will be entitled to borrow money from a green investment bank to pay for carbon-reducing measures

The new coalition government promised a raft of green initiatives in yesterday's Queen's speech that will see a radical overhaul of the country's housing stock and loans to allow more households to invest in measures such as solar panels.

Promising a new energy bill in the next parliament, the new government, led by David Cameron, wants to create a green investment bank that would loan individual households the money to invest in carbon-reducing measures, including insulation.

The plan, which builds on the one announced by the outgoing Labour government in its last budget, is called a "pay-as-you-save" approach. The idea is that households borrowing money to make their home greener would repay the loan using money saved through lower energy bills. Labour originally wanted to create a £2bn fund to which households hoping to access money would apply. The private sector was expected to come up with a similar amount.

The new government hasn't said exactly how it will work. In the past, the Tories previously promised £6,500 for each home, and the Lib Dems suggested up to £10,000 could be available. These figures may have to be revised upwards as a typical electricity generating solar scheme costs about £15,000, although these amounts would allow householders to invest in cheaper solar water heaters, or a range of insulation measures.

The new energy bill may also contain measures to:

• Require energy companies to provide more information on energy bills in order to empower consumers and to ensure fair access to energy supplies.

• Regulate the carbon emissions from coal-fired power stations.

• Reform energy markets to deliver security of supply and ensure fair competition.

• Put in place a framework to guide the development of a smart grid that will revolutionise the management of supply and demand for electricity.

• Ensure that North Sea infrastructure is available to all companies to ease the exploitation of smaller and more difficult oil and gas fields.

New energy and climate change secretary, Chris Huhne, said: "The Queen's speech makes clear that energy security and taking real action to tackle climate change aren't add-on extras for this new government, but are vital to our national interest.

"The energy bill is designed to help consumers put a stop to wasting energy in their homes through a green deal while making sure our energy system is fit for the 21st-century."

Paul King, chief executive of the UK Green Building Council, welcomed the focus on improving the energy efficiency of homes and buildings.

"The biggest barrier preventing home owners carrying out low carbon refurbishment is the upfront cost of the measures.

"The 'green deal' will help overcome that problem by leveraging private sector investment – vitally important in this time of public sector spending cuts."

He said legislation was needed to enable every home in the country to benefit from the pay-as-you-save scheme, which is already being piloted. "The legislation is also an opportunity to create a package of additional incentives that will encourage take-up of the green deal – and to bring forward a version of the scheme that will work for non-residential buildings," he said.

Which? chief executive, Peter Vicary-Smith, welcomed the news that the government will also focus on consumers' energy bills. "We're glad the government recognises the need to tackle issues such as security of supply and the lack of competition in the energy market. Plans to improve bills are a step in the right direction but could go further. Including the name of the cheapest available tariff on every bill looks good on paper, but means little unless it's backed up with a guarantee that it will still be the cheapest rate by the time the consumer switches tariffs," he said.

Scott McLean, marketing director of Ownergy, commented: "It is a shame that the funding has closed 10 months before the Renewable Heat Incentive goes live on 1 April 2011 as it was a good incentive to build momentum of installations ahead of that date. However, we always knew this would happen and that there would not be any warning in advance – the same happened to low-carbon building programme grants for renewable electricity installations ahead of the Feed-In Tariffs going live."

• Energy bills
• Energy industry
• Energy
• Consumer affairs
• Queen's speech
• Solar power
• Household bills
• Home improvements

UK government environment departments say £250m of cuts will have to come from conservation and green building schemes

Green organisations were today assessing how hard they would be hit by the £250m of cuts imposed by the coalition government.

The Department for the Environment, Food and Rural Affairs (Defra) will lose £162m, or 5.5% of its budget, and the Department of Energy and Climate Change (Decc), a comparatively minor £85m, or 2.5%. But both departments said today they would not be able to deliver the savings solely by limiting recruitment and making in-house spending and would be forced to cut capital programmes.

Britain's 200,000 farmers and landowners, who receive tens of billions of pounds of European subsidies for owning land and growing food, will escape most of the cuts because European common agricultural policy payments are made directly from Brussels. But conservation and green building efforts may be severely hit by a significant withdrawal of funding for regional development agencies which subsidise many agricultural, environment and renewable energy schemes.

Defra, which oversees planning, recycling, waste and conservation efforts and large watchdog organisations like the Environment Agency and Natural England, said it would have to slash capital programmes "across the board". A spokeswoman said that it could take "weeks" to finalise details. "Nothing has been decided yet," she said.

However, she added that the cuts would include flood defence funding, surveillance of some diseases, and IT programmes for farmers. Many of Defra's "daughter" or "arm's-length" bodies like British Waterways are also expected to be hit hard.

Decc, which spends far less on administration than Defra, is expected to have to cut deeply into home energy-efficiency programmes which could undermine the public take-up of low-carbon technologies. "It will be challenging for Decc as it already has low administrative spend, so we will have to look at some of our programme work," said a spokesman. He added that budget cuts would be made to as yet unallocated funds and no existing programmes would be hit.

The department's three largest delivery bodies, the Nuclear Decommissioning Agency, the Carbon Trust and the Energy Saving Trust, are all expected to see budgets cut by an average of 1% this year.

The Environmental Transformation Fund, which invests in emerging low-carbon technologies, will see its budget for this year cut by 22% to £120m, and the Low-Carbon Building Programme (LCBP), a grant scheme to support the installation of clean energy technologies in homes, will end immediately and will not be extended. LCBP grants for electricity-generating systems such as solar photovoltaics and wind turbines had already been withdrawn following the introduction of feed-in-tariffs that reward homeowners for each unit of clean power they produce. But until the government's announcement on Monday, grants were still available for heat-producing technologies such ground-source heat pumps and solar water heaters. The scheme is now closed to new applicants.

Although the ending of the LCBP is a relatively small cut – the savings will be just £3m – the announcement will most likely mean there will be no support for greener heating systems until at least spring 2011, when Labour's proposed Renewable Heat Incentive scheme is scheduled for launch.

Any cuts that Defra makes come on top of similar swingeing cuts made in 2007-08 and 2008-09 when £200m was slashed from the budgets of British Waterways, nature conservation organisations and other environment initiatives. "We have been cut to the bone already. There's not much left to slash," said one Defra insider today.

Environment groups reacted cautiously to the cuts. Ben Stafford, head of campaigns at the Campaign to Protect Rural England (CPRE) said: "The pledge to cut £600m from quangos looks politically attractive, although we don't at the moment know exactly where these cuts might fall. Ministers must recognise that cuts to public bodies will not always be consequence-free. A number perform important functions in the fields of planning and natural environment protection, and it is important that their departments champion these functions, including the ongoing importance of independent advice to ministers. Swinging the axe too vigorously now could mean greater costs later."

Paul King, the chief executive of the UK Green Building Council, said: "The coalition must be careful that the proposed abolition of Regional Spatial Strategies does not result in missed opportunities to deliver sustainable infrastructure, such as heat, water and waste across local authority borders. Integrated policy to deliver these services can offer carbon and cost savings – which can be missed if we don't have a regional overview."

The RSPB today urged the government to consider the health of the environment when it makes its decisions about where to cut and where to invest.

"We are calling to the government to freeze the costly and environmentally perverse Renewable Transport Fuel Obligation [which drives demand for unsustainable biofuels], protect existing co-financing funding for agri-environment schemes, invest in marine protected areas and end the investment by the nationalised banks in climate polluting activities," said a spokesman.

• Green building
• Recycling
• Conservation
• Renewable energy
• Solar power
• Wind power
• Energy
• Energy efficiency
• Waste
• Feed-in tariffs
• Endangered habitats
• Farming
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• Economic policy
• Liberal-Conservative coalition