Are we about to find out the full foolishness of Ed Miliband’s policy of blocking licences for new oil and gas extraction in the North Sea?
While it may come as a surprise to some, until New Year’s Eve Europe was still receiving gas supplies from Russia – not through the Nord Stream 1 pipeline which was sabotaged in 2022, but via an unlikely route through Ukraine. These taps have now been turned off, after an agreement for Russia to supply gas to Europe came to an end. That leaves the continent facing a similar situation, if less acute, to that which it faced in 2022. It must look elsewhere to make up for lost Russian gas.
In 2022, the first year of the war in Ukraine, there was a huge spike in gas prices as Germany and other countries scrambled to secure enough gas to get them through the winter. Terminals to receive liquified natural gas (LNG) from the US and Qatar were hurriedly constructed in the North Sea. This time, Turkey is being looked at as a potential source of gas for central Europe.
While the effect won’t be as drastic this time around, Britain will not be unaffected. We do, after all, sit on the end of a gas grid which until two days ago extended to Russia. In recent days wholesale gas prices in Europe have risen to their highest level since October 2023.
According to the Department for Energy Security and Net Zero, the cutting off of Russian gas supplies via Ukraine ‘highlights the importance of energy independence in order to insulate the UK from volatile global fossil fuel prices. That’s why we’re on a mission to build a clean, secure energy system that reduces reliance on foreign fuels, protects consumers, creates jobs and tackles the climate crisis.’ But that rather misses the point. If your priority is to promote energy security – as the name of Miliband’s department suggests it ought to be – then surely you would be promoting self-reliance on gas as well as building renewable power plants. Miliband now accepts that even in 2030 (and probably long after that) Britain’s electricity grid will be reliant on gas in times of light winds. But the government is currently expediting the decline of Britain’s gas industry by refusing to grant new drilling licenses and enacting excessive ‘windfall’ taxes which have persisted long after the windfalls of 2022.
In a parallel universe where the previous government had faced down the environmentalists and embraced fracking, Britain could by now be self-sufficient in gas, just as it was between 1995 and 2003. This doesn’t seem to wash with Miliband, who has this fantasy that global gas prices are set entirely by dictators, and that therefore it doesn’t matter how much gas we produce in Britain – we would still be at Putin’s mercy. (He might like to explain how America’s unashamed drive for self-sufficiency in oil and gas led to lower energy prices there…)
Regardless of Miliband’s green energy plans and how much sense they make, Britain’s energy supply would be a lot more secure if we were not running down our fossil fuel industries without having enough renewables to make up the gap. Miliband is making us more dependent on dictators, not less.
Comments