When even green energy tycoons are telling him to embrace the North Sea oil and gas industries, Ed Miliband really is beginning to look somewhat isolated.
Dale Vince, founder of Ecotricity and a Labour donor (as well as a former donor to Just Stop Oil, no less), has made an extraordinary intervention today, suggesting that the North Sea be offered the same subsidies as are granted to the operators of wind and solar farms. ‘It’s time for Labour to put its arms around the North Sea,’ he says.
‘Our North Sea is in decline, let’s protect it during the transition and optimise our use of resources that are left.’
Remarkably, that puts him more in line with the Conservative leader, Kemi Badenoch, than it does with the government.
But Vince is not the only one to see the foolishness in the government’s strategy of running down the North Sea prematurely. Earlier this week, Greg Jackson, CEO of energy supplier Octopus, made the case for using UK-produced gas over importing it in the form of liquefied natural gas (LNG), on the grounds that the latter is dirtier. ‘If we’re going to use gas I’ve got no problem in using local stuff,’ he said.
The use of LNG involves more carbon emissions because around 10 per cent of the fuel is consumed in the process of liquefying the product for transport and then regasifying it when it reaches Britain. Moreover, there are greater opportunities for fugitive emissions of methane, which is a more potent greenhouse gas than carbon dioxide.
Vince’s suggestion of subsidising oil and gas is a bit nuts. The North Sea industry would be happy for the government simply to remove the windfall tax – which was imposed in 2022 but which has persisted long after the windfalls that came with the Ukraine invasion are long past – and to start issuing new licences again. Nevertheless, he and Jackson are right that it makes no logical sense – even from the perspective of people who are committed to net zero – to close down the North Sea when Britain is still consuming large quantities of oil and gas.
Miliband seems to accept that fossil fuels are going to play an important part in Britain’s energy mix for decades to come. In July he instructed the National Energy Systems Operator (NESO) to keep on standby 40 gigawatts worth of gas-generating capacity (that is enough to power the whole country for much of the time). Moreover, last year he and Keir Starmer announced a £22 billion investment in carbon capture and storage (CCS). That would be entirely pointless if we were not still going to be burning fossil fuels, because there would be no carbon emissions to capture.
The trouble is that Miliband shows few signs of budging on the North Sea. He is more interested in messaging and making gestures than he is in formulating a reasoned energy policy. Last week, Keir Starmer had the opportunity to remove him from the energy brief and start afresh. It seems, indeed, that he did ask Miliband to be housing minister instead, but Miliband refused to budge and Starmer was too feeble to sack him.
The damage he is doing to UK industry is plain: just this week Jim Ratcliffe withdrew £3 billion of investment from the North Sea and said he would invest in the US instead. But so long as Miliband remains in post, we are doomed to an energy policy that is making Britain poorer. Even the renewable energy lobby can see that.
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