Reflect The Contortions

Harry Wilkinson writes:

The Government’s decision to approve the Jackdaw gas field is undoubtedly the right one. It strengthens our energy security and will support many skilled workers in Aberdeen whose livelihoods depend on the North Sea. So accustomed have we become to vital industries being destroyed by green ideology, that even this barest of minimums is truly worth celebrating.

The project, beset by legal challenges, can finally enter production, bringing much-needed domestic gas into our energy system. Jackdaw is expected to supply around 6 per cent of British gas production at its peak and contribute an estimated £2.9 billion to the economy; driving local investment in the Northeast of Scotland and protecting established supply chains.

The importance to our energy security is greater than many recognise. On Thursday, it was revealed that Britain’s energy regulator Ofgem was making emergency plans to secure additional supplies of pipeline gas from Europe this winter. We are facing “negative supply margin”, meaning that a one-in-twenty-year cold day could lead to a supply shortfall. Such an event has never happened before, but has become more likely as our domestic gas supplies from the North Sea have fallen. In a worst-case scenario, it could mean factories having to shut down and homes being disconnected from the gas grid.

Beyond its economic and strategic benefits, Jackdaw’s approval could mark an even more significant turning point. In defending it, the Prime Minister has been making an argument that we sceptics of Net Zero have been making for many years. Namely, that it makes no sense at to import hydrocarbons from abroad rather than use our own. Not for the environment, and certainly not for the economy. Labour had spent much of the last decade, lest we forget, preaching the importance of keeping it in the ground.

We should take nothing for granted. It is important to understand what has and has not changed. Labour has not formally abandoned its policy of refusing new oil and gas exploration licences. Jackdaw is an existing licensed field, approved under the previous Conservative Government, whose subsequent legal difficulties prevented it from progressing.

The decision is therefore consistent with Labour’s existing policy. Yet it could be so much more than that: there is the potential here for the Government to embrace a newfound energy realism, a pragmatism that can help the country move on from the miserabilism of Net Zero.

For too long, so-called environmentalists have become erroneously fixated with the supply side of the emissions equation, insisting that oil companies simply extract oil for the hell of it and that people will pay them just to burn it. Possibly whilst doing an evil laugh. Were they to move on from these gross simplifications, they could embrace a far more productive approach to decarbonisation that recognises that if there are cheaper and better alternatives to fossil fuels, people will use them.

We are being asked to believe that, on the one hand, these projects will not bring down international fossil fuel prices but, on the other, that they will somehow stimulate greater international demand for fossil fuels. It doesn’t add up.

The legal troubles that the Jackdaw project has faced reflect the contortions of the modern environmental movement. Even though we have legislation that governs our emissions — the Climate Change Act — the legal challenge to Jackdaw was brought under Environmental Impact Assessment regulations. It was decided that their environmental impact assessment ought to have considered what are known as “Scope 3” emissions; that is to say, downstream emissions from burning the fossil fuels themselves, either here in Britain or overseas.

Beyond the Climate Change Act, which explicitly only covers territorial emissions, it is entirely discretionary what this “consideration” entails. Years and millions of pounds on legal fees have been wasted, only to let ministerial whim once again dictate the fate of many livelihoods. This is not the rules-based system espoused by sincere liberals. It is a corrupt system that allows powerful green vested interests to destroy industries they don’t like.

Which is why it was so encouraging to hear the Conservatives’ pledge at their conference to withdraw Britain from the Aarhus Convention; the treaty makes it incredibly easy to bring judicial reviews against infrastructure and energy projects, by capping costs to claimants. Leaving it will help protect future planning applications from such needless and expensive delays.

The Labour government, having accepted the argument for domestic oil and gas extraction, and having a younger voting base tired of economic stagnation, are in a prime position to embrace the abundance mindset that will be so important to our country’s future success. If only they have the courage of conviction to see off the extremist Net Zero advocates in their midst.

This won’t be easy. Net Zero has become akin to state ideology in modern Britain and it remains on the statute book. The next test will be making a decision on the larger Rosebank oil play. Here the mood music is not so encouraging, and there is a significant risk that the Government will argue that as an oil-producing field it is not as critical to our energy security as a gas field and block its approval.

But I remain optimistic for the future. A recent opinion poll showed that a majority of even left-wing voters now back issuing new licenses for oil and gas developments in the North Sea. Among the country at large, this is supported by a margin of 52% to 24%. The Government’s policies will have to reflect this new political reality.

Although Nick Tyrone cautions:

After years of being held up by legal challenges, the Jackdaw gas field, which sits about 150 miles east of Aberdeen in the North Sea, is to be reopened for exploration and production. This is undoubtedly good news – yet it also represents a half-measure by Andy Burnham’s Labour government.

Rosebank, a site which sits a few hundred miles northwest of Jackdaw, is the bigger prize for the UK economy. Ideally, the government would have allowed production at both sites, but if they had to pick one, Rosebank would have been the superior choice. Why the government looks set to reject Rosebank tells us a lot about UK energy policy and where it looks to be headed.

Some basics on Rosebank. It is estimated that it can produce around 69,000 barrels of oil a day at peak production, although exploration could reveal more than this in time. The total reserves of the site are estimated at 500 million barrels of oil, which is an amount that would supply the UK’s needs on its own for a year and a half.

Rosebank could also produce about 44 million cubic feet of gas a day. This is a small amount in terms of overall British consumption, but every little bit of gas helps. This is because the UK has become terrible at domestically producing natural gas and then storing it. We import around 68 per cent of the gas we use, which is a shocking amount given how much of our own gas we could be producing. UK energy policy should be absolutely focussed on reducing how much energy we import – instead, it is all about Net Zero, at least for this government and the Tory governments that preceded it.

Again, opening Jackdaw is good news. The site can produce about 200 million cubic feet of gas a day, which is around 2.5 per cent of UK demand. That doesn’t sound like a lot, but again, any uptick in domestic energy production is a good thing at this point. Yet opening Jackdaw and not Rosebank makes very little sense given that production at both sites would so obviously be beneficial to Britain, both in economic terms and energy security.

What, then, are the arguments against opening both sites up? I will run through the main ones now – and debunk them.

The chief argument made by environmentalists is that producing any oil and gas whatsoever in Britain is bad because it will make it extremely difficult for us to meet our climate targets – a 68 per cent reduction in carbon emissions by 2030 compared to 1990 levels, and entirely Net Zero by 2050. Putting aside an argument on whether Net Zero is a good thing to aim for or not, this argument does not even make sense on its own terms.

The UK does very well globally in the Net Zero race. Why? Because we don’t produce nearly enough of our own energy. We import it. Which means that we are simply allowing carbon production to take place elsewhere, while the UK gets to virtue-signal about being a low-carbon emitter. But climate change is a global problem. Cutting CO2 emissions down in Britain so that China or elsewhere can produce a whole lot more on our behalf makes no sense at all in environmental terms. Yet that is what we are doing.

The other classic argument is the one that says there is no point in exporting more energy from Britain because it would not provide an economic benefit. Oh dear, this is the one I really detest, mostly because the thinking is so lazy.

For a start, energy production in Britain at the level of Jackdaw and Rosebank would provide an instant boon to the UK economy in two ways.

One, it would create jobs, possibly thousands of them, which I assume doesn’t need explaining in terms of economic benefit. The other is in the form of tax receipts. Even if energy companies export most of what they produce at Scottish sites, they will be taxed in the UK for it. The headline rate is 78 per cent, so we are talking about a potentially huge amount of money that the Treasury could have that it does not currently have.

The arguments for opening as many sites in the North Sea for energy exploration and production as are financially viable are obvious and common sense. The arguments against them are half-arsed, logically incoherent and bathed in ideological dogma.

One of the most important issues for the United Kingdom over the next decade will be energy security. We are way, way behind the curve on this now. Our neighbours in Norway do every aspect of energy better than we do, from the production of oil and gas to developing renewable energy sources. You would think getting the left to look at Norway for answers would not be that difficult to do, given that it’s a successful Nordic social democracy. But when it comes to energy, even that is a bridge too far.

Britain needs to sort this problem out. Opening Jackdaw is a start, but a modest one. We need to produce more of our own energy. Without it, we’ll become poorer and more vulnerable, while having no impact on climate change.

Beginning with the full exploitation of the Rosebank and Jackdaw fields, let us harness the sovereign power of the State, to deliver an all-of-the-above energy policy based around civil nuclear power and this country’s vast reserves of coal. Around those twin poles of nuclear power and of clean coal technology, let there be oil, gas, lithium, wind, solar, tidal, and everything else, bathing this country in heat and light. This is why we have a State. There is always climate change, and any approach to it must protect and extend secure employment with civilised wages and working conditions, encourage economic development around the world, uphold the right of the working class and of people of colour to have children, hold down and as far as practicable reduce the fuel prices that always hit the poor hardest, and refuse to restrict travel opportunities or a full diet to the rich. We must be unequivocal about regretting the defeat of the miners in 1985. Is Kemi Badenoch? Is Nigel Farage? Is Ed Davey? Is Zack Polanski?

We sent our manufacturing to India and China, yet we have the gall to criticise their carbon emissions. And we expect to depend for energy on the Sun, the wind and the tides, precisely because it is beyond our power to stop them from doing what they do and we just have to live with it, yet we also expect to be able to stop climate change rather than finding ways of living with that. China manufactures most of the  world’s solar panels, which should be on buildings rather than on farmland and which we need to start making here, but let there be solar, wind and tidal energy in the mix. The base of that mix is nuclear and coal. The coal without which there can be no steel, and thus no wind turbines or tidal turbines, just as there could be no rigs, pipelines, or power stations. Britain stands on one thousand years’ worth of coal, and was the world leader in clean coal technology until the Miners’ Strike. Again, do not vote for anyone who will not say that the miners were right. Does Andrew Rosindell, whose constituency office is called Margaret Thatcher House, say that? Does Robert Jenrick, who gave his daughter the middle name Thatcher? Not Margaret. Thatcher.

Fracking? There is no problem with any energy source in principle, but none of that shale gas has turned up yet, and if it is anywhere, then it is in heavily populated areas that could do without the earthquakes, the poisoned water, and all the rest of it. Any economic arrangement is a political choice, not a law of physics, and the “free” market cannot deal with climate change while defending and expanding our achievements. That is precisely why it is being promoted. But instead, we need the State, albeit a vastly more participatory and democratic State than has often existed. The energy sources to be preferred are those which provided high-wage, high-skilled, high-status jobs.

The standing charges on gas and electricity are 50 times the cost of maintaining the networks, and although they are supposed to protect the suppliers from going bankrupt, not only have they repeatedly failed to do so, but they have never come down when those suppliers have been eye-wateringly profitable. Thanks to the all-of-the-above energy policy, just abolish them. And thanks to the all-of-the-above energy policy, let there be an all-of-the-above transport policy based around public transport free at the point of use, including publicly owned railways running on the electricity that public ownership would also supply to charging points in every neighbourhood and village. Astonishingly, and yet not, the fewest charging points for electric vehicles are in the coalfield areas. Also, never forget that, when we can catch them, buses carry far more passengers than trains do, but those passengers tend not to be politicians or the “opinion-forming” sort of journalists. And so on. Let a thousand flowers bloom. In a garden well-tended and well-watered as an expression of democratic sovereignty.