One of the policies that an incoming Labour government in Britain will be putting forward is a ban on all new oil and gas licensing in the North Sea.
One of the policies that an incoming Labour government in Britain will be putting forward is a ban on all new oil and gas licensing in the North Sea, a policy that will do nothing of any significance for the climate but will make the U.K.’s economic problems even worse than they already are. Seventy-five percent of Britain’s energy still comes from oil and gas, and half of that comes from the North Sea.
As Jonathan Leake reports in the Daily Telegraph, the idea for this came from Jacinda Ardern, New Zealand’s former prime minister — an inspiration, it seems, for British politicians looking for bad policies. Conservative prime minister Rishi Sunak’s grotesque tobacco-prohibition plans were derived from the same dismal source.
But how did Ardern’s ban on new oil and gas exploration work out?
Leake:
New Zealand resources minister Shane Jones last weekend denounced its own ban as a disaster – and revoked it.
It followed three years of rising energy prices that have left 110,000 households unable to warm their homes, 19pc of households struggling with bills and 40,000 of them having their power cut off due to unpaid bills, according to Consumer NZ.
Since April the situation has further deteriorated: Transpower, the equivalent of [Britain’s] National Grid, warned that the nation was at high risk of blackouts.
New Zealand’s shift to renewables meant it no longer had the generating power to keep the lights on during the cold spells that mark the Antipodean winter, said Transpower, as it begged consumers to cut their electricity consumption.
The threat to New Zealand’s energy security comes despite the fact that geologists have discovered billions of cubic metres of natural gas in the seabeds around the country.
Sean Rush, a leading New Zealand barrister specialising in petroleum licensing law and climate litigation, called the oil and gas ban “economic vandalism at its worst in exchange for virtue signalling at its finest”.
At the time (2018) of the ban, Ardern proclaimed that “the world has moved on from fossil fuels.” The world, for good reason, did not agree. The IEA now forecasts that oil demand will hit an all time high in 2029, before starting a (very) slow decline thereafter, with demand remaining at close to peak levels for the following two decades. Its forecast for gas is similar.
Meanwhile, OPEC is saying that it does not see a peak in oil demand in its long-term forecast, and expects demand to grow to 116 million barrels a day by 2045. It may be biased, but. . . .
Leake:
Offshore Energies UK (OEUK), a trade body, says there are about 280 active oil and gas fields in UK waters – of which 180 are due to shut down by 2030.
Without new ones to replace them, UK gas production is predicted to more than halve by the end of the decade.
Jenny Stanning, director of external affairs at OEUK, says exploration is essential to simply slowing the decline in output.
“The New Zealand experience shows how important it is for countries to carefully manage energy transition and energy security. We will need oil and gas for decades to come so it makes sense to back our own industry rather than ramping up imports from abroad.”
For now there are no indications Britain’s Labour Party will back down on its commitment not to issue new licenses. Climate fundamentalism — and few fundamentalisms are complete without futile and destructive acts of self-harm — is an integral part of Labour’s message, and climate fundamentalists are part of the eco-system from which Labour draws its support and ideas. Leake quotes Tessa Khan, the executive director at Uplift, “an environmental group that campaigns to shut down UK oil and gas production,” as saying that it is “laughable” to blame New Zealand’s energy problems on the ban on new exploration licenses. What, after all, would New Zealanders know about their own energy position?
One of the more grimly entertaining characteristics of British climate policy in recent decades has been the way that it has been wrapped up in a kind of moral imperialism. Sweden claimed for years to be a “moral superpower,” a ridiculous, smug, and self-congratulatory idea that led it to a disastrous immigration policy. The idea that Britain could retain some scraps of imperial glory by leading (and thus supposedly) inspiring the world on climate policy — an idea pushed, surprise, surprise, by the likes of Boris Johnson — still has some sway in the U.K. It is, needless to say, delusional.
Leake:
The UK should prioritise the North Sea as long as it needs oil and gas, believes Brendan Long, an energy analyst with WH Ireland Capital Markets.
“The resources of the UK can be produced with lower emissions than elsewhere in the world – reflecting the engineering acuity of the UK’s energy industry and their willingness to invest in low carbon strategies.”
Labour’s proposed ban could thus lead to higher GHG emissions than would otherwise have been the case. Smart!
Teale quotes John Carnegie, chief executive of Energy Resources Aotearoa, the local industry trade body, as saying that at the time of Ardern’s ban, there were 20 international and five local companies engaged in exploration and production in New Zealand. But “since then, exploration has fallen dramatically. We only have nine remaining investors, seven international and two local. The rest have left.” Ardern presumably would count that as a success. Workers in the sector and New Zealanders hoping for reliable power supplies might take a different view.
Meanwhile, the likelihood of a Labour government in Britain appears to be leading some oil and gas companies to take their investments elsewhere. Some of the country’s labor unions have already expressed disquiet over the party’s intentions. They need to do so, but more loudly.
The Labour Party says, not to worry. It has a plan — of course it has — which is to make the U.K. “a clean energy superpower.”
Yet another delusion.