For quite some time, different countries have been choosing different ways to fail in their energy policy. Thus, under Merkel, “the indispensable European,” Germany opted for the Energiewende, a policy that gave it soaring energy prices, a dangerous dependency on Russia, and didn’t do much, if anything, for the climate.
In Britain, the Tories embarked on a headlong pursuit of reaching net-zero greenhouse-gas emissions without giving much thought about how this goal could be implemented without wrecking the economy. (To be fair, in doing so they were cheered on by most of the British political establishment.) And no, this effort was never going to do much for the climate, either. To combine recklessness, incompetence, and pointlessness in this fashion took quite some doing, but the Conservatives did it.
Germany is now having something of a rethink, although the country still (other than accepting an economic crisis) has no clear way of getting out from under Putin’s thumb for now.
The Brits too have been looking again at where they stand and as, the Spectator’s Ross Clark reports, the U.K.’s new Energy Security Strategy “puts energy security at the heart of the debate over energy and environmental policy, where it always should have been.”
Indeed it should. As it should be here in the U.S.
Clark looks at this new “strategy” and is, shall we say, not entirely convinced, but one point he raises has clear American implications:
Renewed emphasis on the North Sea will be welcome. However, the Energy Security Strategy simultaneously has given a big disincentive for oil and gas companies. Far from relaxing the commitment to reach net zero, today’s document produces a new target: 95 per cent of electricity to come from low-carbon sources by 2030. Previously the target was to make all electricity low-carbon by 2035. Who will want to develop a new gas field if the product will be driven out of use in just eight years’ time?
That’s not a hard question to answer. But the fact that Clark has to ask it is a reminder of how far under May and Johnson the Conservatives have become a party of the center-left, with little obvious understanding of how markets work.
And the U.S. question is related.
If the administration, regulators, Democratic politicians, and investment managers in thrall to ESG (a form of “socially responsible” investing), continue to demonstrate, despite some softer words (sometimes) from the White House, hostility toward the oil and gas sector, how likely is it that the industry will feel confident enough about what lies ahead to make the investments in new production that will be needed to restore American energy independence, deliver affordable energy, and build a bridge to a less carbon-reliant future?
That’s not a hard question to answer either.