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These days, “candlelit dinner” implies romance. In the 1970s it meant the three-day week. It seems hard to believe that Europe has squandered so much of the energy security it built after that period, when France drove a nuclear power revolution, and Norway and Britain drilled in the North Sea. But we are apt to forget the lessons of history until they come round again.
The Middle East oil shock has underlined both Europe’s vulnerability and the importance of moving away from fossil fuels. Whether the UK should heed Donald Trump’s call to “open up the North Sea” is a different matter. But the OECD forecasts that the UK faces the biggest hit to growth in the G20, so the response must be credible. That means not giving your energy secretary a veto, as the prime minister appeared to do this week.
The UK’s “drill versus no drill” debate feels a bit like a bar brawl between two people who are not seeing straight. At the extremes, the pro-drill, pro-frack contingent are of the “let’s keep dancing ‘til the music stops and worry about carbon emissions later” variety. Their opponents adopt a self-defeating pout: “We’re going to be climate leaders, even if we kill our own economy.” The answer must be to harness every bit of energy supply we can — drill more though not every drop. And to restore faith in climate action by tackling some of the rank absurdities in UK energy policy.
The North Sea won’t give us energy independence because the basin is in decline. And drilling won’t lower household bills since gas sells at the world price. Some of the right’s claims on this are simply illiterate. But there are strong arguments for more domestic gas: to slow job losses, shore up tax revenues and reduce the carbon footprint that comes from importing it. Oil and gas will remain important for Britain’s energy mix for many years, not least because gas is the vital bridge in the green transition.
Ed Miliband has long been regarded as the intransigent block to a more carbon-intensive strategy. Some ministers tried to overturn the manifesto pledge to ban more oil and gas licensing; others pushed in the autumn to oust him from his role as energy secretary. But Keir Starmer backs him. He appreciates Miliband’s Whitehall experience and his vision for energy sovereignty, built on low-carbon jobs in old industrial heartlands.
There is much to like about Miliband’s vision, and his ability to deliver. In less than two years he has reversed the ban on onshore wind and announced investment in a slew of new projects, including small nuclear reactors.
He has also been more pragmatic than critics allow. In November the government licensed a limited amount of new drilling, in oil and gasfields with existing licences, adjacent to existing infrastructure. It avoided being clobbered by climate activists by calling these “tiebacks”. It also, I am told, came extremely close to abolishing the 2022 windfall tax, which has deterred investment in the North Sea. A few days before the US invaded Iran, Treasury aides met Miliband’s team to finalise an announcement that never happened. Ministers suddenly found themselves in the same position as Tory counterparts had been after Russia invaded Ukraine: facing calls to help with household energy bills and spying a juicy source of revenue.
Labour in office did not overturn Conservative approval of two huge North Sea oil and gas projects: Equinor’s Rosebank and Shell’s Jackdaw. But the decision landed back on Miliband’s desk last year, after a Scottish court ruled that the previous government had failed to assess the environmental impact of all carbon emissions. The ruling didn’t stop work, but the projects are at risk. Challenged by Tory leader Kemi Badenoch to approve the fields this week, Starmer told her that the decision, which is quasi-judicial, must rest with Miliband. This constitutes not one but two hospital passes.
The eventual decision on Rosebank and Jackdaw may turn on the issue of climate leadership, which Miliband is passionate about. The argument that we won’t inspire others to go for net zero if we end up bankrupting ourselves cuts little ice with his faction, who cite the significant role the UK has played at UN climate conferences in garnering pledges to accelerate away from fossil fuels and our responsibility as a member of the G7. We can’t only care about climate change in the good times.
The problem is partly that net zero has been undermined by the policy’s more outrageous sleights of hand. The giant Drax power station burns imported wood from Canada, funded by taxpayers through “renewable” subsidies. Our national carbon accounting system falsely exaggerates progress, ignoring emissions we offshore to China. Successive governments have driven electricity prices to world highs and made swaths of industry uneconomic but failed to insulate draughty homes.
Any oil shock offers the chance to change the demand picture. Today’s equivalent of Americans swapping their Cadillacs for Fords in 1973 is Greg Jackson of Octopus Energy announcing that he’s seen a 50 per cent rise in solar panel sales since the US invaded Iran. If this government is smart, it will avoid repeating Liz Truss’s disastrously expensive price guarantee, which removed the incentive for richer households to become energy efficient. In announcing a limited support package, chancellor Rachel Reeves seems to be aware of this.
It shouldn’t be controversial to argue that we must back more gas production, face down Green concerns about nuclear and introduce more honest carbon accounting. But that means taking the ideology out of the debate.