Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
The Energy Secretary has warned Labour is moving too quickly. But Tory plans are hardly much better.
Labour and the Conservatives are both doomed if they think they can magic an entirely decarbonised grid into existence over the next few years without imposing huge cost penalties on homes and businesses.
https://www.telegraph.co.uk/news/2024/04/01/net-zero-threatens-our-national-security/
A Canadian example...
https://www.telegraph.co.uk/world-news/2024/03/31/liberal-allies-turn-on-justin-trudeau-over-net-zero-tax/
We don't need to worry if UKCS-oil goes the way of the dodo. They will supply us as much as we want.
https://www.bloomberg.com/news/articles/2024-03-31/american-oil-is-muscling-into-opec-markets-all-over-the-world?srnd=homepage-europe
Evidence continues to mount that British politicians have rushed into an immensely significant policy agenda with little detailed idea of its practical implications. Whilst Rishi Sunak has, during his premiership, taken welcome steps towards loosening some restrictive energy targets by, for instance, delaying the 2030 ban on the sale of new petrol and diesel cars, Labour politicians appear too willing to meet the scale of the decarbonisation challenge by plucking yet more deadlines from thin air with scant prospect of success. Politicians of all stripes will need to be much more honest about the ramifications of their policies – not least the gift they may hand to Xi Jinping’s China.
https://www.telegraph.co.uk/opinion/2024/03/30/a-net-zero-threat-we-can-no-longer-ignore/
Critics of net zero have long worried that the project will have consequences beyond the financial. That while decarbonisation might be a worthy ambition, moving too quickly towards a zero-emissions future would undermine our security and supply.
In a Sunday Telegraph interview today the Energy Security Secretary has drawn attention to the nature of this threat, warning that Labour’s plan to bring forward decarbonisation of the power network to 2030 will leave Britain at China’s mercy. It would be complacent, however, to believe that this is not already a serious risk under the current framework.
China has funnelled vast sums into manufacturing the cheap electric vehicles which politicians consider central to lowering emissions from road transport. It is already the world’s largest producer of copper – a vital substance not just in EVs but the wires that carry electricity and solar panels.
Despite its dominance in green technologies, however, Beijing remains the world’s largest polluter. While the UK is responsible for less than 1 per cent of emissions, China is belching out more carbon than the US and EU combined. Voters would be forgiven for questioning the logic of meeting net zero targets by compromising our self-sufficiency in order to consolidate Beijing’s supremacy.
It is feared that these products may also contain a digital Trojan horse. A single compromised device somewhere in the wider network could be used for cyber attacks. Moreover, the risks of relying on an autocracy for energy were laid bare in 2022, when our security was threatened by Putin’s illegal invasion of Ukraine. One study indicated it had cost UK energy suppliers an additional £1,000 per adult while the Government also spent £23 billion subsidising bills. Would our attitude towards Beijing’s aggression, for instance in the South China Sea, be inhibited in the future were we heavily reliant on them to power our “green” economy? How might it shape our response to China’s growing “soft power”, or instances of state-sponsored cyber espionage such as those uncovered this week? Even setting aside geopolitics it would be unwise for Britain to become dependent on a monopoly supplier, particularly one which is being subsidised in order to gain market dominance. What will happen, sooner or later, is that prices will go up.
Energy Secretary says Opposition’s ‘unfeasible’ 2030 target would leave Britain over-reliant on Chinese-made resources
Ms Coutinho said: “At the moment there is one global dominant player when it comes to things like critical minerals or batteries and that’s China.
“So if you’re saying that we are going to have this unfeasible target, which no other major economy would have, what you’re ultimately sending out to the world is that we’re willing to pay whatever price you will put to us, which will see costs implode, you also don’t have time for the supply chains here to develop, which means you’ll be reliant on China.
So that means that what Labour are putting forward is a ‘made in China’ transition. The costs involved in meeting the target would “mean ... higher taxes for people, hiking up people’s bills, and essentially not being sure that we can keep the lights on”, Ms Coutinho claimed, adding that the plan would mean “send[ing] the money to China”.
She added: “In terms of energy, we’ve just seen a period where continental Europe has had to wean itself off Russian oil and gas, we can’t do that to just then be dependent on China for critical minerals.
“So it’s really important that, as we’re thinking through the energy policy of the next couple of decades, we’re looking at all those components of the supply chain to make sure that we are secure and we’re not overly reliant on one part of the world." She added of Labour: “Their 2030 decarbonisation plans are mad, bad and dangerous. I speak to hundreds of people in industry, and investors. Not a single one of those people has asked us for a 2030 date.
“When I speak to consumers, when I speak to households, not a single person is asking for that date, not even the climate change lobby is asking for that date. They plucked it out of thin air, it’s a complete fantasy.”
But here 's Superman Ed : Ed Miliband, the shadow net zero secretary, said: “Fourteen years of failed Tory energy policy has seen jobs driven overseas, our clean energy infrastructure imported from aboard, and our country left exposed to the worst cost of living crisis in memory. The Tories have had no industrial strategy and no plan – and households and businesses across the country have paid the price.
“Labour is determined to change this.”
https://www.telegraph.co.uk/politics/2024/03/30/claire-coutinho-energy-secretary-labour-net-zero-china/
"It is no secret that the expanding suite of AI technologies are becoming powerful drivers of additional demand for electricity. They are, simply put, enormous energy hogs. This technological revolution seems destined to soon overwhelm and dominate almost every aspect of modern society, but there’s a catch: It is taking place simultaneously with coordinated efforts by national and international governments to prematurely do away with some of the cheapest and most abundant forms of 24/7 power generation."
https://www.energyvoice.com/renewables-energy-transition/grid-retail/550752/ai-will-suck-up-500-more-power-in-uk-in-10-years-grid-ceo-says/
https://www.telegraph.co.uk/news/2024/03/29/evs-electric-cars-ai-tech-renewable-green-energy-power-fail/
In Telegraph : North Sea oil giant demands windfall tax overhaul after £63m hit
EnQuest faced with 113pc tax rate after raid by Jeremy Hunt
North Sea oil company EnQuest is demanding an overhaul of Jeremy Hunt’s windfall tax after claiming it has been hit by an effective rate equal to 113pc of profits.
The company suffered a £25m loss last year after paying taxes of £63m, according to its annual results.
EnQuest was also hit by other corporation taxes, landing it with a total bill of £207m.
A spokesman for Enquest said: “We believe legislative reform is required to restore confidence in the UK oil and gas sector to protect jobs and deliver energy security and decarbonisation.”
The windfall levy was introduced in 2022 when the Russian invasion of Ukraine triggered surging global energy prices, handing massive profits to oil and gas operators. It meant oil and gas operators faced a nominal taxation rate of 75pc.
However, the tax is ring-fenced, meaning it applies only to the profits from oil and gas extraction. It does not take account of the costs companies may incur in other operations – meaning some can face overall taxation rates in excess of 100pc.
Enquest operates platforms around Scotland including Magnus, the most remote in UK waters more than 100 miles north of Shetland.
The company also operates several key pipelines and other subsea assets that carry oil and gas from offshore platforms to onshore processing facilities such as Sullom Voe in Shetland – meaning its assets are strategically vital to the UK’s energy security.
This gives Enquest a crucial role in the UK’s carbon capture and storage plans, in which CO2 would be pumped deep into subsea rocks for permanent storage. The business has been awarded four carbon capture licences by the UK.
Amjad Bseisu, chief executive, said the company delivered strong performance and reduced net debt “against the backdrop of a challenging UK fiscal environment”.
Sullom Voe, he said, was increasingly focusing on low carbon technologies with facilities that will eventually allow it to take CO2 shipments from power stations and factories in Europe and then pump it into subsea rocks for permanent storage.
EnQuest’s report added: “As expected, the windfall levy has impacted access to capital across the sector, with the most significant on EnQuest being the reduced borrowing base within the group’s reserve bank lending facility.
“Clearly, a volatile fiscal regime imposes significant challenges on any business and the extension of the levy to 2029 announced in the spring Budget represented the fourth amendment to UK sector taxation in the last two years.”
EnQuest’s criticism of the windfall tax echoes similar comments from Harbour Energy and other offshore firms.
Last month Linda Cook, Harbour’s chief executive, said a pioneering net zero project was at risk of becoming uneconomic because of the levy.
Setting out the reasoning to hone in on the UK, Ithaca (LON: ITH) chairman Gilad Myerson tells Energy Voice he’s confident that the next party in power, whichever that might be, will arrive “at the right decision” to support domestic oil and gas production.
Myerson said that, given the UK relies on oil and gas for around 80% of its energy – and 50% of its overall need is imported – there’s a decision to be made on whether to produce domestically or not.
“If we import energy, we are reliant on other countries for energy security, we are providing other countries with jobs, we are providing other countries with tax revenues, and we are increasing our own CO2 per barrel.
“With that in mind, the obvious conclusion is that the UK should be looking to generate its own energy, and generate its own oil and gas, rather than import.
“If you look at other countries, OECD and non-OECD, everybody is now doubling down on energy security and local production. The United States, Canada, Australia, Norway, and if you go into the non-OECD, Saudi Arabia, the, the Emirates, Qatar, Brazil, India, China, Russia, all these countries are doubling down on their own production.
“The UK, we believe, will eventually make the right decisions because currently 80% of the UK’s energy is oil and gas, it’s not going to decline as fast as many believe, and therefore we want to be a core producer of energy for the UK.”
North Sea operator EnQuest (LON:ENQ) posted a slight loss in its 2023 full year financial results, reflecting the impact of the UK government’s windfall tax on oil and gas firms.
EnQuest posted a loss after tax of $30.8 million, a slight improvement on the $41.2 million loss it posted in 2022.
EnQuest recorded total revenues of just under $1.5bn, with adjusted earnings before interest, taxes, depreciation and amortisation reaching $825m, below the levels seen last year.
Total production also fell, reaching approximately 43,800 barrels of oil equivalent per day (boepd), compared to around 47,300 boepd last year.
EnQuest said it paid a total of $262.6m in tax, including $77.2m relating to the Energy Profits Levy (EPL) windfall tax, which the company said amounted to an effective tax rate of 113.3%.
In total, EnQuest said the company recorded UK North Sea corporate tax losses of just over $2bn at the end of 2023, “the reduction in the period reflecting utilisation of ring-fence corporation tax losses” against the company’s profits before tax.
As a result, EnQuest said it expects to pay no corporation tax or supplementary charge on UK operational activities “for the foreseeable future”.
EnQuest ‘achieved its targets’
EnQuest chief executive Amjad Bseisu said the company achieved its 2023 targets, delivering “strong operational performance” and reducing net debt “against the backdrop of a challenging UK fiscal environment”.
“We have set the foundations for a pivot to growth during 2024 and continue to perform well against our full year targets, with production to 29 February 2024 averaging around 44,500 Boepd,” Mr Bseisu said. Operationally, Mr Bseisu said EnQuest decommissioning activities saw the company complete 25 plug and abandonment (P&A) wells.
At Bressay, EnQuest said it continues to actively explore further farm-down opportunities and development planning of the asset after a recent farm-out of 15% of the licence to Viaro Energy. In 2024, EnQuest said it also aims to progress the tie-back of the Bressay field’s gas cap to Kraken, displacing diesel that currently powers Kraken operations.
Elsewhere, EnQuest subsidiary Veri Energy is progressing a carbon capture and storage (CCS) shipping solution for isolated emitters in the UK and Europe centred on the group’s Sullom Voe Terminal (SVT) on Shetland.
Mr Beisu said the award of four carbon storage licences during 2023 represented a key milestone for the company’s future ambitions.
“Work is underway to right-size the terminal site and transform its carbon footprint, with delivery of the new stabilisation facility and power generation projects expected to reduce future CO2 emissions at SVT by c.90%,” he said.
Veri is also progressing evaluation of a 50 megawatt green hydrogen project at SVT, with the company receiving £1.74 million in grant funding from the UK government’s Net Zero Hydrogen Fund to support a front-end engineering and design st
"Green lobbyists are making themselves an irrelevance by turning against all fossil fuels in all circumstances. Governments may have nodded along with their demands up until now, by setting net zero targets. But clearly, when ideology collides with reality, governments are not going to sacrifice the well-being of their citizens. The move to build new gas plants is yet one more sign of Europe’s retreat from unrealistic net zero targets."
https://www.telegraph.co.uk/news/2024/03/27/europes-net-zero-retreat-is-gathering-steam/
Hi Monkey, this is the film : https://www.youtube.com/watch?v=A24fWmNA6lM&t=22s
Changes could force operators to build wind farms close to each platform
https://www.telegraph.co.uk/business/2024/03/27/north-sea-oil-rigs-threatened-shutdown-unless-run-green/
Ithaca in talks to create North Sea’s second largest operator
Ithaca Energy, one of the companies behind the Rosebank oil field, is in exclusive talks with Italy’s Eni which will see it hand over up to 39pc of its shares in return for Eni’s assets in the UK.
The deal will create the second largest independent company operating in the UK North Sea, Ithaca said.
“Eni has granted Ithaca Energy exclusivity in respect of the assets, the subject of the potential combination, for a period of four weeks from the date of this announcement,” the business said.
London-listed Ithaca Energy and Norwegian state energy company Equinor were given approval last year to carry out the development of the Rosebank oil field 80 miles off the coast of Shetland, which holds up to 500m barrels of oil.
"Ask people most affected by the “green transition” where their preferences lie, however, and common sense prevails. When given a choice between energy independence or net zero, a recent survey of Scottish voters by pollsters Redfield & Wilton showed 58 per cent prioritising energy security, more than double those wanting net zero.
It is time we accept the same realism as these voters. We cannot burden industries with excessive costs that foreign competitors avoid, whilst expecting them to continue operating in the UK. Nor can we recklessly pursue a transition to EVs by diktat, which ordinary consumers do not want, on the chimera of “green jobs” tomorrow at the expense of real jobs today."
https://www.telegraph.co.uk/politics/2024/01/29/craig-mackinlay-rishi-sunak-net-zero-green-agenda-decline/
No politician from Labour or Conservatives can claim they hadn't been appropriately warned :
https://www.telegraph.co.uk/business/2024/02/13/labour-north-sea-tax-raid-trash-oil-gas-production-industry/