Reports in newspapers this week revealed that Britain’s domestic production of energy has reached a new record low. The news comes from trade group, Offshore Energies U.K. (OEUK), whose analysis, far from unexpected, details the pressures on investment in conventional energy production, such as the windfall tax on oil and gas companies. Since the turn of the century, U.K. production of energy has fallen by two thirds, whereas consumption has fallen by a third. The difference has been met by an increased dependence on imports. Yet neither the report itself, which is at best agnostic about renewables, nor the stories that cover it, seem to have taken seriously the harm that Net Zero and adjacent agendas have done to our industries, businesses and economy – and are set to do worse.
The U.K. ceased being a net energy exporter in 2004, amid a flurry of green policymaking, culminating in the Climate Change Act 2008, and its increased ‘Net Zero’ target adopted in 2019. Over the duration, coal-fired power stations were demolished, but not replaced with equivalent (i.e. reliable) generating capacity, shale gas exploration was abolished before it had even started. Energy investors in the U.K. and across the continent, lured to attractive guaranteed profits by subsidy regimes, and dissuaded from conventional energy by rising costs of capital, lost interest in oil and gas. Despite promises of ‘green jobs’, a ‘green industrial revolution’ and ‘green economic growth’ and lower prices being the constant chorus of energy ministers of all governments and their so-called ‘opposition’ counterparts, domestic energy prices tripled. So if these new data on Britain’s energy production do not prove the expensive and dangerous folly of more than two decades of U.K. climate policy, what could?
It is as if the entire political establishment had at once decided to forget that there exists a relationship between scarcity and price. Yet, the effect of abolishing coal is just that: it creates scarcity. So too, do policies that either restrict the exploration of oil and gas, or increase the cost of capital, create scarcity. Politicians, lobbied by green billionaires’ ersatz ‘civil society’ organisations who pump false claims into the public sphere, then claim that the problem all along was ‘dependence’ on oil and gas. Green energy will lower prices and diminish the power of dictators, who turn energy into a ‘weapon’ that terrorises Europe, they claim. So successful are they in their policymaking that, since 2019, the Government has capped energy prices – a policy they stole from Ed Miliband in 2017, before taking us into Net Zero. If ‘green’ means anything at all, it means acute cognitive dissonance.
At stake, argues the OEUK report, is immense value that could be unleashed from the North Sea. But investment is being held back by policies, “having big impacts on the profitability of U.K. offshore energy”’ worth one trillion pounds of exports and £450 billion domestically “within the next 15 years”. However, though the bulk of that potential lies in oil and gas, the report includes in its analysis, wind power, CCS and hydrogen. Even oil and gas executives, it seems, have swallowed the green Kool-Aid. And that is a missed opportunity to reflect on the failures of the green agenda, as well as a disappointing failure of an industry to properly stick up for itself, and to defend industry in principle.
And it needs defending. The fig leaf that has concealed Britain’s shameful industrial decline, and blinding politicians to reality in recent years has been the notion that green policies have successfully caused GDP growth to ‘decouple’ from fossil fuel use. However, this conceit requires us to believe, in turn, that the 79% increase in GDP that coincided with the halving of emissions over the same period was not driven by funny money, tricksy policies and analytical sleights of hand, and that the deindustrialisation underpinning it has left us better off. Does anybody, other than green energy hustlers, actually feel better off? Who? How?! What better position can we claim to be in, now that we know that we produce less and import more at a higher price? How much of that ‘growth’ is just higher prices?
The embrace of green economics, at the expense of established economic orthodoxy, leads to regressive disdain for industry. It seems not to have bothered many that we are less capable of producing things and sustaining ourselves – an issue which would have once sent a modern government into a tailspin. It is as if using less energy was a ‘good thing’ in itself, not a reflection of rising prices and stagnant (or worse) productivity. As if to make my point for me, following OEUK’s report, the half-truthfully named Department for Energy Security and Net Zero and the obedient press put a different spin on the matter. “The U.K. recorded the highest ever share of electricity generation by renewables last year”, declared the Standard.
As greens rejoice our production of less for more, U.K. energy market regulator, Ofgem, announced its “discussion on the future of the price cap”, which is “so customers remain protected as the energy market evolves to a smarter, more flexible system”. Why would customers need ‘protection’ from a ‘smarter, more flexible system’? It is, of course, doublespeak. The ‘dynamic price cap’ is time-of-day pricing, more honestly known as rationing. And ‘flexibility’ means using prices to force customers to organise their lives around the ‘smarter’ system, rather than the energy market meeting people’s needs. And it is made necessary by the scarcity created by green energy policy and green ideology.
It would be all for the better if regulators, industry associations and, of course, politicians simply admitted that they have made a catastrophic mess of the very industries that were pioneered in this country. Putting green political ambitions before any other practical consideration has made us poorer, and is going to create a problem far worse than climate change.
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