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Vince Cable at UK energy summit - biggest university demand for engineering

Tuesday, August 7, 2012

For 2012 UK university applications, the biggest demand for places is in engineering, said UK government minister Vince Cable, speaking at the August 7th 'British Business Embassy' event on energy

The UK government's analysis of British demand university places in 2012 shows that the biggest demand is actually for engineering places, said Vince Cable, Secretary of State for Business,
Innovation and Skills with the British Government and a past chief economist at Shell.

'People looking at their future careers and deciding that engineering is the best field to be in.'

He was speaking at the August 7th 'British Business Embassy' event on energy, held during the Olympics at Lancaster House in central London.


Mr Cable said that at Shell, he was involved in 'scenario planning,' or trying to work out what would happen in the future. 'I think that's a good place to start,' he said. 'It's a reminder that we're in an industry with a very high level of uncertainty.'

Scenario planning was first done in the mid 1970s. 'After the oil shocks came very high oil prices, and assumption in many quarters that this is going to go on forever. There was a development of theories about the world running out of oil,' he said. 'A lot of people assumed this bonanza will go on forever.'

'Some cautionary voices said think more carefully about this, think about what could happen.'

'[they said] You could end up with low oil prices, which is what, indeed, happened.'

'I think it's useful to start with that cautionary note. We are in a very uncertain world.'

'We all assume probably rightly that the world is driven by rising demand much of it coming from Asia.'

'[but] We've all learned with the big financial shock 2 years ago that nothing is predictable in the world of economic growth. Uncertainties are massive. We can't just assume that will happen although it probably will.'

'If we also think about demand and the relationship to price, a period of high prices gives rise to consumers changing behaviour, switching between products, using energy efficient products, or stopping consuming.'

'Also a very rigorous reaction on the supply side. We've had a period of relatively high prices, and
Brazil is now emerging as a major producer, continental shelf Africa in a similar way, there's been an explosion of gas supply.'

'In the background the big reserves of unconventional oil and gas - Canada, Venezuela. Potentially environmentally problematic but none the less almost inexhaustible in supply.'

Energy policy

'I'm these days speaking from the standpoint of a government minister helping to frame energy policy,' he said.

'It is worth stressing that from the point of view of government we are trying to pursue several objectives at the same time.'

'I often find frustration from business, why doesn't government give us clarity and certainty.'

'We are trying to pursue multiple objectives. We are trying to achieve growth, the maximum value out of our resources - upstream sector but also supply chains.'

'We can have arguments about the rate we discount the future, the stream of profits that goes to industry and the amount that goes to government. Simply to ask how to we maximise the value of the resource leads to quite a few questions.'

'How do we get the British economy growing.'

'Also how do we get prices down for consumers?'

'We have worries about energy security, all countries do - we want to maintain diversity.'

'We have the environmental objectives - clean fuels - and increasingly dominated by carbon production targets - which in the UK's case are legislated for.'

'Balancing that against the other objectives is not straight forward.'

'[But] I hope you're seen a clear commitment to building up the oil and gas sector, alongside a restoration or rebuilding of nuclear power - the prime minister confirmed that yesterday - alongside support for new renewables, particularly offshore.'

'We're trying to get that mix right. I hope the signals are coming through clearly to you.'

The industry is very important to the British government, he said. '450,000 people in this country depend on the oil and gas sector alone. It is about a quarter of the government's corporation tax. These are good reasons for us to take it seriously.'

'We're very well aware of the close interest that's paid in the tax regime in the North Sea. We know there was some concern for the budget in 2011. '

'We hope we've addressed some of these concerns. We have established a fiscal forum so any remaining concerns can be properly addressed through dialogue, different treatment of field allowances for example.'

'The important point is not to come up with a right answer here, but make the point that the government is all ears to carefully made argument from the industry.'

Supply chain

'We have an exceptionally well developed supply chain for oil and gas in the UK,' he said.

'Aberdeen has some of the best companies in the world. But not just in the North East of Scotland, also in Tyneside we're you're getting a revival of rig development.'

'There are gaps in it - part of my job is working with the industry to fill in those gaps.'

'I had a meeting with Charles Hendry, minister at the Department of Energy and Climate Change (DECC) to address these questions.'

'We've established an 'advanced supply chain initiative' to provide a limited amount of financing to co-finance investments in the supply chain,' he said, also noting that this initiative is mainly geared to automotive and aerospace industry.

Advantages of UK

'We are trying to identify those areas where Britain has a really distinct competence,' he said.

'We have companies here with unique abilities with design and management of very complex projects.'

'Complex project management is certainly one of the unique skills or scarce skills that we have here.'

'Another is operating in very difficult physical environments.'

'Another I would stress - I think what you will find in the UK is an almost complete absence of economic nationalism. We are open to foreign investment, we welcome foreign investors here, we're an open economy, we value overseas investors, we are open to private enterprise, we are open to business.'

'We do recognise that in capitalising on those characteristics we do have some serious challenges.
There are skill bottlenecks, we recognise that - there's skill bottlenecks at different levels
We have a shortage of basic craft skills in many areas.

'We are ploughing a lot of resources into apprenticeships - that will feed through into supply of scarce skills.'

'So we are looking at the supply problem and we're trying to address it.'

Carbon Capture

In the question and answer session, Mr Cable was asked about how he thought was the best way to deal with the ‘carbon problem’.

“We see the [solution to the] carbon problem as old renewables (nuclear power) and new renewables -offshore wind and marine,” he said.

“Carbon capture and storage is potentially a way of dealing with it. The Australians are more advanced than anybody. We're trying to pursue it here in relationship to gas. We do realise the potential here.”

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