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Sir Keir [25/3/24] said: "So far as oil and gas licenses are concerned, we've been very clear we're not going to revoke or interfere with any existing licenses so they will be a part of the mix for decades to come.
Is he taking the Mickey or badly informed or? At 78% tax, with the EPL investment allowances removed, and expectation the EPL, or worse, will be permanent, who will develop existing licences to production?
(Has a side-deal, maybe involving floating wind farms, been made with Equinor not to change their plans on Rosebank?)
Let’s assume everything in The Movie is correct, or at least far more correct that what is being presented now as settled science, who on earth, individual or organisation, would have the credibility, power/reach/influence, desire and… courage to champion it. I just can’t see it happening. Far more likely people work within the current narrative but try instead to dilute things in terms of actions and time. If, for example, any mainstream UK politician now promoted The Movie my expectation is they would be shot down from all sides as a loon. Perhaps the Trumpkin or Putin?!!
taking back control of our national energy security by… subsidising expensive offshore wind. it’s for their own good to make the people pay more for energy than they need to.
https://www.itv.com/news/wales/2024-03-25/sir-keir-starmer-to-reveal-plans-for-new-public-energy-company-during-wales-trip
shadow welsh secretary jo stevens, the mp for cardiff central, just said on r4 that last week there was an auction for offshore wind which received no bids because the government, short-sightedly, made the offer price to low and labour will correct this.
that’s easy to fix, make the offer price higher or give more subsidies so it costs far more than other energy sources. and that’s before considering the cost to cover for the intermittency aspect.
patriotic economy my ****, communist economy would be more accurate!
“There is a suspicion, or perhaps realisation, that climate change is an invented scare driven by self-interest and snobbery, cynically promoted by a parasitic publicly funded establishment, hungry for ever more money and power. An assault on the freedom and prosperity of the rest of us”
Romaron, the film you posted - https://notalotofpeopleknowthat.wordpress.com/2024/03/21/climate-the-movie/#respond - is excellent. That CO2 is driving temperature increases and there really is a climate crisis is absolutely not settled science. The "War on Climate" cannot be won - nature is just too powerful.
What happens if/when the wo/man-in-the-street finds out they have been hoodwinked, and come to understand that they are the ones paying the most in terms of increase in the cost-of-living, the loss of the things they took pretty much for granted but can no longer afford, and the reduction of their civil liberties? The establishment and the academics are nicely milking them. Russia, India, China are looking on and laughing. Wake up people, and rise up!
Mansardman, something along those lines is brewing. Maybe not as far as you advocate (it was, after all… the Tories who voted NZ targets into law). I anticipate something similar to your suggestion and focusing in on Labour’s guiding North Star of “Clean Energy“ by 2030, “accelerating to Net Zero”, together with their “growth mission”. When to pull the Comms trigger? When Labour have cemented their position beyond a possible retreat alla £28B pledge, and that must be close.
“In Norway, dozens of activists blocked the road entrance to the petroleum refinery in Rafnes, on the country’s south-east coast.”
When journos refer to “dozens”, it is often shorthand for 24-30 or so, even if “dozens” conjures up in the mind a lot more. Since when is 30 odd people meeting up for a common cause newsworthy? If more had turned up elsewhere that place would have been quoted.
The Guardian, ER’s mouthpiece, is free for a reason. OK, they all do similar things, to a greater or lesser degree.
https://amp.theguardian.com/environment/2024/mar/16/climate-activists-across-europe-block-access-to-north-sea-oil-infrastructure
“Oil and gas executives expect slower transition to net zero“
https://www.ft.com/content/96a7fa7c-8039-47b9-b48e-16f740a29124
“The biggest obstacle delaying transition expectations is the tough macroeconomic environment, says Bain. High interest rates and the capital-intensive nature of building clean energy projects are making it difficult for companies to finance projects…”
Labour’s guiding North Star is “Clean Energy“ by 2030 and “accelerating to Net Zero”. To achieve this and their “growth mission” they want to unlock private investment, and their plans to do this, they say, have been drawn up in conjunction with business.
Business will play ball if there is profit to make, whether it’s traditional free-market profit or socialist-subsidised profit. Whichever, the money to fund this “North Star” ambition has to come from somewhere and somehow the people will pay. Let’s see the detail of your plans, Rachel and Ed, and let the people decide if they are willing to accept the consequences.
This “North Star” could become an Albatross neckless as £28B had become. Expect the Conservatives, at the right time, to focus in on this, tear it apart, highlight the trade-offs and consequences, and make it a/the major issue at the General Election.
Modestus, thanks, and you have a gift in making people feel good.
What I propose is I ask IR what is the agreed communications strategy between the industry and the government and wider community. IR has already said they prefer their voice is represented through the industry bodies. I'll therefore also ask whether they believe the specific position and interests of the Independents are being sufficiently represented. Brindex have no requirement to answer a question from me - if they are not fulfilling their role it should be their members who take action.
Comments/suggestions from others welcome as input before I email IR later this afternoon.
What's the story with Brindex? Has it been agreed they stay schtum about the difficulties due to the UK's fiscal policy encountered particularly and specifically by the exact members they represent? Has it been agreed that their voice in representing their members will come from OEUK? Byt... the interests of the Majors and the Independents in this situation are not completely aligned. Is it not time Brindex and/or the Independents piped up? Either an industry-wide communication strategy has been agreed to come from OEUK or Brindex is not fulfilling its role. Any ideas about this? Worth asking IR?
Below from: https://www.brindex.co.uk/index.html
The Association of British Independent Exploration Companies seeks to promote the role played by British independent exploration and production (E&P) companies in maintaining a powerful and effective UK based oil and gas industry.
By increasing awareness of the independents' achievements in developing oil and gas reserves on the UK Continental Shelf (UKCS), at UK onshore locations and overseas, BRINDEX aims to demonstrate our vital contribution to both the industry and the local economy.
BRINDEX seeks to promote the role played by British independent exploration and production (E&P) companies in maintaining a powerful and effective UK based oil and gas industry.
From its inception, BRINDEX has significantly influenced the way in which the UK oil and gas industry has evolved. Key areas have included licensing policy and taxation.
Independent oil and gas exploration and production companies are at the heart of the liberalised global energy market which provides secure and diverse supplies at competitive prices. The independents will continue to play an important role in shaping a cost effective and imaginative approach to UK exploration and development and in securing the participation of the banking sector and the capital markets in its ongoing development.
In a fairly matter of fact way they need to say if this is what the country wants, the desire of the people, then obviously the industry has to accept, but it needs to be understood it will act accordingly and deploy capital and resources elsewhere and outside the UK. Given the enormity of the consequences of this energy policy decision, the industry needs to say they believe they have a responsibility to ensure the people/voters really understand the consequences of what they are voting for. This is pretty much a once in a generation type of decision with enormous consequences, and if voters later say they did not understand and regret their decision (as has happened with… Brexit) it would then be too late to change things.
The Tory’s Windfall Tax together with Labour’s stated policy to remove the associated investment allowances is akin to “cutting off one’s nose to spite one’s face”. Both for the country/people and the political parties. It will result in a spectacular own goal whilst other countries will benefit and global carbon emissions will increase. (Several other countries will be laughing their butts off at the UK. And rubbing their hands.) The people need to be informed and careful both for what they wish for and that they are not being manipulated into seeing the industry as a bogey man to satisfy others’ ideological, attention diverting and power desires. The industry will continue and play its part in the energy transition, just with the UK’s fallacious Windfall Tax with its investment allowances removed the industry’s contribution to transition will… not happen in the UK. The UK’s population will continue to use the industries products but sourced from outside the UK.
Who could be the respected figureheads, above the political, climate change argument, and industry fray, who command respect and who could champion this cause?
A phrase to encapsulate all this would be good too 😊
Verbose semi-rant incoming. Feel free to change channel 😊.
Of course, any ideas most welcome on how to turn from just words on a BB to something which could create action. Worth sending to IR and asking if EnQuest will now be more vociferous or still go via the industry bodies?
Energy is the economy! If economic growth is the main challenge, then getting energy policy is essential.
The Labour party before an election cannot change their position on abolishing the EPL-related investment allowances. It is almost the only string they have left to their tax-revenue raising bow without increasing income tax/NI. The Conservatives will make energy policy a (the?) major differentiator at the election. Just, as the fathers of the Windfall Tax and its… extension, extension, extension, they can hardly claim to be the champions of the sector.
The UK is blessed to have the hydrocarbons it has and the O&G industry is a national treasure. This message needs to be shouted so people willing to hear reason understand this. Instead, the industry is portrayed and treated by many with disdain, like a pariah-industry.
Could it be there is a silent majority who understand “all this”, or who would be willing to understand it, and for whom it is a very important issue?
The O&G industry now has no reason to “hide” or be coy. The industry can’t leave the Tories to fight their battle for them. The industry needs to frame this not as a political issue but a national issue (as per their recommendation to create some sort of energy committee above the parties, as the OBR, CCC). Without overtly aligning to any political party, they need to say Labour has made their position clear and the assumption is Labour will win the election. Therefore, investment from the industry will quickly further slow, and once the allowances are actually removed from the Windfall Tax, where the conditions of a windfall no longer exist, the investments will soon after stop. Ask the question, why would anyone invest in an industry which is being nationalised and closed down through fiscal policy? Make it crystal clear there is no bluffing or threat here, just a question of cause and effect.
The industry, better probably from the Independents on which the NS relies than from the Super Majors, needs to be specific with the investments which will not happen. The consequences need to be spelt out. Name the fields which won’t be developed and put numbers on the decline in GDP/growth/jobs, the increase in carbon emissions, decom brought forward, and the reduction in energy and general security. The fragmenting and disintegration of the supply chains essential to enable a successful energy transition must be made clear. They should provide OBR-style numbers, audited/validated by some reputable company/body, showing what taxation revenue would be if the investments don’t happen. The numbers need to show, perversely, the outcome will be less tax revenue in the medium-
Views on whether for the sector, and EnQuest specifically, it is likely to be better to have a General election sooner or later? This is with the assumption Labour will form the next government. Earlier should mean sooner having a government which has to face reality and maybe then adopt more pragmatic policies. Later means the EPL investment allowances should be in place for longer, and this feels the better option for the industry.
I wonder whether AB is a non-dom. I imagine he is - why would he not be if he could be, and it looks like he has the conditions to be. Naturally, that's his business.
However, I then wonder if AB is a non-dom whether the Conservatives' changes to the non-dom regime could change the way he behaves - could be now be more publicly vociferous and forceful in highlighting the consequences of the EPL, its latest extension, and Labour's plans to remove the investment allowances?
Labour will go into the election with this closing the loopholes “mantra”. It, energy policy in general associated with removing the investment allowances, will be a main differentiator between Lab/Coins. Assuming Labour get a working majority, the question becomes at what point after the election Labour will change their tune, because with this tune investment really won’t be there and without the investment the amount to tax will get less and less and quickly become zero if decom activities are brought forward. And it is not just about tax income, but also… jobs/growth/balance of payments, higher carbon emissions, security (both of supply and security in its wider sense). They, both main parties, surely must know/understand the situation. Starmer has proved agile at 180s, and being in government will cause shifts in the relative power position of Reality-Rachel and Ed-the-ideologue.
Vor, I agree with what you state as being the main/general reason. However, the EPL revenue also helps short-term with the books, and the previous rate increase and deadline extension and the rumoured further date extension is tinkering round the edges and feels more driven by creating the theoretical fiscal headroom to get a tick from the OBR.
Romaron, re the election date, and I've not heard any media today, but if Sunky's biggest and defining promise is to get an illegal bum on a plane seat arriving in Rwanda, then it's best he calls an election soonest and avoid the embarrassment of not delivering on this.