AS I SEE IT: TERRY MURDEN asks if the Prime Minister’s new twin-track energy department can unite opposing forces
Record profits are normally something to celebrate. Unless you’re an oil and gas company. BP followed up Shell’s milestone to a chorus of doubters and boo-boys in the anti-oil lobby who continue to resist the arguments of the energy industry that making money is perfectly consistent with, and indeed a pre-requisite to, achieving carbon reduction goals.
While the Greens turn the screw on the SNP to oppose more drilling, Rishi Sunak has made a significant move in his departmental shake-up that will aim to bring the two sides of the argument together.
The new Department for Energy Security and Net Zero, under the care of Grant Shapps, will put the case for underpinning the UK’s short and long-term supplies of oil and gas alongside its carbon reduction ambitions. By dovetailing the two, he will hope the green lobby will begin to see how it can’t win the argument by simply turning off the North Sea taps.
Offshore Energies UK has made the point frequently, arguing that more exploration is not only needed in order to invest in clean technologies, it also provides a guarantee that we retain our own supplies. It’s something that many countries would love to have in their economic armoury.
Now the formidably named North Sea Chapter of the International Association of Drilling Contractors, has waded in with a call for more cooperation between the industry and politicians north and south of the border to accept the basic case that we are not in a position to stop producing oil and gas.
It’s a tough ask. Shell and BP and a host of other North Sea participants are declaring results and their positions on investment just as opinions, if anything, are getting more divergent. The Scottish Government has set itself against further oil and gas development, while the UK government is preparing to license more wells.
The statements from the oil and gas majors suggest that, whether or not there are more windfall taxes, they will do whatever is required to ensure the country’s energy needs are met. As Russ Mould of AJ Bell notes, the more important statement from BP was not about its profits, but how it is nudging up its spending plans on both renewables and oil and gas.
The increase in drilling and exploration work may be an acknowledgement that fossil fuels could be with us for longer than any of us expects, or the green lobby wants, but supply and demand, not political rhetoric, will dictate how we energise our economy and our homes.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business