It is sometimes called “suicidal empathy”: a compulsion to damage one’s own wellbeing in pursuit of an ideal or a moral dogma. The UK government’s response to what is being called by the International Energy Agency the “worst energy crisis in history” is perhaps a textbook example.
Rather than compromise its schedule to achieve net zero, Prime Minister Keir Starmer is prepared to accelerate economic decline and impoverish UK voters by refusing, on essentially moral grounds, to develop substantial energy resources in the British sector of the North Sea.
Rather than give the go-ahead to recently discovered oil and gas fields like Rosebank off Shetland and Jackdaw off Aberdeen, as even Starmer’s predecessor Tony Blair has advised, the UK prefers to import oil and gas from abroad at great cost to the UK balance of payments and to domestic consumers.
Yet Britain contributes little more than 1 percent of global greenhouse gas emissions. That is a rounding error in the emissions of the great fossil fuel behemoths, China, India, and the United States. Reducing this further will have a nugatory impact on climate change and is largely performative. Indeed, UK energy policy is actually increasing Britain’s carbon footprint.
This is because the UK is importing millions of tons of liquefied natural gas (LNG) from America and the Middle East at great cost, not just to British industry but to the environment. The emissions from the tankers crossing the Atlantic Ocean contribute thousands of tons of CO2 to the atmosphere. Moreover, American hydrocarbons are mostly produced by hydraulic fracking, a process banned in the UK.
The Labour government seems unable to appreciate the grim irony of an energy-rich country, Britain, choosing not to exploit its own natural resources even though they are greener. Nor does it seem to recognize the contradiction involved in importing much of the UK’s gas from Norway—gas extracted from the very North Sea basin that the UK has elected to abandon.
Norway never stopped exploring and extracting oil and gas, and is even drilling in the Arctic. The state-owned energy company, Equinor, is discovering new commercial oil and gas deposits in the supposedly “depleted” North Sea almost by the month. Yet Norway is also committed to net zero.
A range of specious arguments have been deployed to mask the British government’s irrational approach to energy security. The first is that there is no point in reopening North Sea oil and gas fields because there is nothing there. It is a mature field and has been in decline for over 20 years. Well, Norway has put that argument to bed.
Of course the UK sector is largely depleted and no longer has the extractive potential of the 1970s and 1980s. Nevertheless, according to analysts Wood Mackenzie, there is still up to 14 billion barrels of oil equivalent in the British sector, enough to meet UK demand until 2050.
The second argument, deployed most recently by the Labour Environment Secretary Ed Miliband, is that extracting oil and gas will not bring down the price at the petrol pump or on home heating bills because it is bought and sold on the world market. Britain would still be buying UK hydrocarbons from the same energy companies at the same high prices. This is partially true but irrelevant. All the gas extracted from the North Sea is piped directly to the UK, where it is used. Oil has always been sold on the world market. This doesn’t mean it is valueless or that domestic energy prices cannot be lowered.
The oil and gas extracted from the North Sea by energy companies and sold on the world market is taxed at a marginal rate of 78 percent. This means that it generates billions in revenues for the UK Exchequer, especially when the price is as high as $100 plus per barrel. These revenues can be used to subsidize petrol or gas prices, just as wind energy is subsidized by taxpayers at present.
A variant of this argument is the claim that the UK produces the “wrong kind” of oil and gas, which has to be exported abroad, mostly to Rotterdam, to be processed into fuels and other products. This is one of the most specious arguments of all. The main reason the UK has not been refining North Sea crude is that it has been closing down its oil refineries.
The Grangemouth refinery in Scotland, which closed last year, used to refine crude from the Forties Field in the North Sea and produced some 60 percent of the petrol, diesel, and jet fuel used in Scotland, according to Petroineos. It closed last year and is being converted into a receiving depot for LNG imported from abroad. But the plant is only mothballed and could be brought back on stream were there the political will.
In any case, the destination of the oil and gas extracted from the North Sea is a diversion. In the 1970s, when the UK first discovered vast reserves of North Sea oil, no one said, “let’s just leave it in the ground and import it from the Middle East because we have to buy it at world market prices.” North Sea oil was what saved the UK from the last “greatest” oil shock—the quadrupling of prices after the Yom Kippur War in 1973.
The many billions in revenues generated by the oil were used to transform the UK economy from manufacturing to services. That policy may have been a mistake, but the point is that fossil fuel revenues give governments the ability to make such choices. It could equally have used the money to lower fuel taxation or gas prices. The fossil fuel industry generates as many as 200,000 jobs in the UK. Moreover, the oil extracted contributed to the UK balance of payments, which helped lower interest rates on government debt.
Miliband claims that renewable energy is a cheaper and more reliable source of energy than fossil fuels, as well as being better for the environment. But it clearly is not. According to the Office for National Statistics, British industry has been paying up to four times the cost of electricity compared to firms in the U.S. Renewable energy is in theory cheaper watt for watt than fossil fuel, but in practice it is expensive because of network costs and because it requires gas power plants as backup.
We are told that renewables now produce 60 percent of British electricity generation. This is only because of the contribution of nuclear power and supposedly “renewable” power stations like Drax, which uses wood pellets and is far from emission-free. The system relies on gas when the wind does not blow.
But electricity generation accounts for only around a quarter of the energy used by the UK each year. More than 75 percent of the energy used in domestic heating, transport, manufacturing, construction and pharmaceuticals comes from fossil fuels. This is not going to change any time soon. The UK is sacrificing industrial competitiveness on the altar of net zero—an arbitrary target set by some climate scientists, which takes no account of changing circumstances or the impact on ordinary people.
Oil and gas are strategic resources, as we have just relearned following the closure of the Strait of Hormuz. It is clearly reckless to rely on international sources of energy when supply is vulnerable to such shocks. Security of supply is an essential component of any industrial economy, and only having substantial domestic resources can ensure this.
Miliband is endangering the economic wellbeing of the UK population to no purpose except scoring brownie points at international climate conferences. Destroying the UK’s economy will not save the planet; it will not bring net zero one day earlier. It will only destroy public support for green energy and defeat the very moral purpose. The UK is actually one of the leading countries on the planet as far as emissions reductions are concerned. Britain today emits less than half of the emissions it generated in 1990.
The use of sophistry to deny the obvious—that it is better to use domestic sources of energy than import it from abroad—is similar to the arguments used by many progressives in the gender debate to dispute the reality of binary sex differences. It is reinforced by elite politicians and environmental academics who like to indulge their intellectual vanity by demeaning common sense. George Orwell famously wrote in 1984 that “freedom is the right to say that two and two make four.” The UK government is trying to persuade skeptical voters that, as far as energy is concerned, two and two make five.
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