Earlier this month Boris Johnson’s government published a new “British energy security strategy” in terms of which “a licensing round for new North Sea oil and gas projects” will take place later this year.
The announcement has provoked outrage from militant pressure groups such as “Extinction Rebellion”, which attacked a statement by the finance minister that “UK sources of oil and gas have a critical role” in reducing the country’s reliance on foreign fossil fuels. Activists have also been blocking traffic intersections and disrupting deliveries to petrol stations. Among their demands is that the government “makes a meaningful statement that they are going to stop all new consents and licences for new fossil fuels”.
Some greens take the view that the solution for energy shortfalls is to restrict demand rather than increase supply.
The business, energy, and industrial strategy secretary, Kwasi Kwarteng, spoke of “maximizing North Sea production”, while various oil and gas companies said the strategy would breathe new life into the North Sea.
The Wall Street Journal (WSJ), however, was not impressed. The new licences for oil and gas drilling in the North Sea would be subject to checks for “climate compatibility”. Moreover, of course, Prime Minister Johnson’s government was still promising to “phase out most fossil-fuel consumption”.
The British announcement comes as the European Union is busy with proposals to re-brand both natural gas and nuclear power as climate friendly, while ever-so-green Germany will build two natural gas terminals to enable it in several years’ time to import such gas from countries other than Russia. Greece intends to speed up gas exploration to reduce its dependence on Russian gas.
In addition, Joe Biden, despite his hostility to fossil fuels, wants to make oil companies pay extra fees on leases on unused wells in an attempt to oblige them to boost oil production. Following a court order, he will also open a bit more federal land for leasing to oil and gas firms to augment oil production.
Mr Johnson has not of course abandoned his commitment to the ideology of net zero carbon emissions by 2050. His government trumpets its “bold new commitments to supercharge clean energy and accelerate deployment which could see 95% of Great Britain’s electricity set to be low carbon by 2030”.
His strategy calls for major increases in offshore wind turbines, although opportunities for more onshore turbines are seen as “limited” to the number of local communities willing to support them.
Solar capacity will grow by up to five times by 2035. Low-carbon hydrogen production will be doubled by 2030.
There will also be a “significant acceleration of nuclear” power, something previously indicated. Described in the energy security document as “safe, clean, and reliable”, nuclear power is seen as providing for around 25% of projected electricity demand by 2050. “Great British Nuclear” will be established with a view to delivering up to eight new reactors, equivalent to one a year instead of the present one every decade.
“Subject to technology readiness from industry, small modular reactors will form a key part of the nuclear project pipeline.”
The tripling of nuclear capacity – from eight gigawatts today to 24 by 2050 – is the only really significant and sound part of the Johnson government’s new “energy security strategy”.
The promise to license more domestic oil and gas production is potentially important, in that it recognises the vital role that fossil fuels have to play in providing energy security.
It is also a repudiation – although limited and heavily qualified – of the influence of green lobbyists and others who propagate the view that fossil fuels are destroying the planet. The latest report of the Intergovernmental Panel on Climate Change, issued earlier this month, thus declares that most existing fossil-fuel projects should be wound down: if the Paris goal of keeping global warming to 1.5% above pre-industrial averages is to be met, oil use must drop by 60% by 2050 and gas use by 45%.
How much new investment in oil and gas will actually take place as new licences are granted is open to question, however. The energy security document supports the production of oil and gas “in the nearer term”. They are important, not in their own right, but as part of the “transition” to energy security. Referring to the target of obtaining 95% of electricity from low-carbon sources by 2030, The Spectator accordingly asks, “Who will want to develop a new gas field if it will be driven out of use in eight years’ time?”
How long will the “transition” actually take? Even assuming that the ambitious nuclear targets can be met on time, offshore wind and solar energy are unlikely to provide the “energy security” at which Mr Johnson’s government is aiming. Many private investors may be reluctant to embark upon new investments in oil and gas in the North Sea if these are seen by Whitehall as only short-term concessions.
Others – the smart money? – may bank upon the assumption that the more Britain depends on renewables the less energy security it will have, giving oil and gas a longer future than the British plan envisages. Green lobbyists have indeed long been worried that if more oil and gas are permitted even only for “transitional” purposes it will in practice give them a longer lease of life.
Missing from the British energy security plan is any promise to relax the ban on hydraulic fracking of shale gas that was imposed in 2019. Three dozen Tory MPs, several former minsters, and a former head of MI6 have been among those calling for a reversal of the ban on fracking to enable Britain to strengthen its energy security.
According to the Daily Mail, Mr Johnson himself is reported to believe that the West should be given a temporary “climate change pass” to enable it to increase its production of gas to rob Vladimir Putin of the energy leverage he has over Europe. Derrick Wyatt, an Oxford law professor emeritus, says the British government is in the process of rebranding its net-zero policy as a quest for energy independence from Mr Putin’s Russia. This might be a good marketing ploy, but the British energy crisis dates back to long before Mr Putin sent his army into Ukraine.
Perhaps the most significant development is that Nigel Farage, who led the way on Brexit, recently announced that he would launch a political movement to campaign for a referendum on the government’s plan to achieve net zero by 2050.