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(continued)

Declining North Sea gas production means greater vulnerability. We depend on a single pipeline to Norway’s gas fields — easily blown up — for a third of our gas supplies, and on liquefied natural gas (LNG) in tankers for the rest. This is not making us greener: most of our supplies come from the United States, whose LNG is three to four times more “carbon intensive” than North Sea gas.

Our lack of storage makes us especially vulnerable to volatile gas prices. The historical security that North Sea gas provided means that we’ve never bothered much with storage. We have about 12 days’ worth; France and the Netherlands have two to three months.

Electricity imports supply the final element of vulnerability. We import 10 to 20 per cent of our electricity from France, Denmark, Norway and other European countries through interconnectors. They could easily be snipped by an unfriendly power.

The present government is not solely responsible for the uncomfortable position we find ourselves in. It is the consequence of many policies, some of which date back decades. But this government’s commitment to reaching net zero in power generation by 2030 is taking us faster in a direction that will make us more vulnerable to shocks, not less.

The route to greater security is pretty obvious. We need to tax North Sea oil and gas less, and end the moratorium on new exploration. We need to invest in new storage facilities. North Sea gas will not last for ever, so we need to revive nuclear power for our long-term baseload. This bit, at least, the government has got right, though it will have to find the courage to fight its green wing to make it happen.

Miliband celebrates Britain’s “climate leadership”. If the government’s policies were indeed leading the world to clean-energy nirvana, then higher domestic costs would be a price worth paying. But Britain is responsible for less than 1 per cent of global greenhouse gas emissions and the men in charge of the world’s biggest emitters, Donald Trump and Xi Jinping, are not trotting along behind Miliband. The rest of the world regards Britain not as an example to follow but as a warning of what happens to a country that pays too much attention to environmental concerns and too little to its economy.

Net zero obsession is pointless when omissions are minimal and we import energy at great cost

https://www.thetimes.com/comment/columnists/article/miliband-climate-leader-claim-gas-k9c323vq8

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It would be reassuring to think that the government’s commitment to clean power generation was indeed making us more secure as a country. Unfortunately, though, it is making us more vulnerable.

Miliband often points out, correctly, that the cost of wind and solar power has fallen dramatically in recent years, and by some calculations is cheaper to generate than any other sort. If we lived in the middle of the Sahara, or were permanently windswept, we’d be laughing. But on an island over which the skies often darken and where calm days are as frequent as windy ones, renewable energy is intermittent, so we need power from a more reliable source.

A big fleet of nuclear power stations would be handy — it’s not just cheese that the French get right — but we have allowed our nuclear industry to go into decline. So, for the moment, the reliable power we can always switch on, our baseload, comes from gas.

That’s expensive, for two reasons. One is that we need, in effect, two transmission systems — one for renewable sources and one for gas-fired power plants. The other is that gas-fired power plants are most efficient if they’re running all the time. If you turn them on and off, which is what happens when they fill in the gaps for renewables, gas power becomes costly. That (and the green surcharges) explain why we have among the highest household electricity bills in the world, and the highest industrial electricity prices among the members of the International Energy Agency.

Energy-intensive industries have therefore been shrinking at a much faster rate than manufacturing as a whole, while services have boomed. The output of metals — essential to the defence industry — fell by nearly half in the three years to 2024. The steel industry has basically gone. The output of petrochemicals, which includes fertiliser and is thus essential to food production, is down by a third over that period. This is hardly a route to security.

Our vulnerability to international energy markets, meanwhile, has been increasing. Once upon a time, almost all of our gas came from the North Sea and companies producing the stuff were required to pipe it on to our shores and sell it to British Gas. Privatisation brought that comfortable arrangement to an end. North Sea gas production has been declining for years and these days it supplies only about a third of Britain’s needs. A combination of a moratorium on new exploration licences and the energy profits levy, which pushes the tax on companies’ profits up to 78 per cent, means that, in ten years’ time, production is expected to be about a quarter of its current level.

Why should ordinary workers fund a party that doesn’t seem to care about their jobs?

https://www.telegraph.co.uk/news/2026/03/12/labours-union-breakup-was-a-long-time-coming/

For Keir Starmer, it’s just one existential crisis after another.

Fresh from some unappetising revelations about his judgment in appointing Peter Mandelson as US ambassador, today’s crisis is more prosaic and predictable: one of the biggest trade unions in the country and Labour’s biggest donor historically has announced it will cut its contributions by a mammoth £580,000, or 40 per cent.

And just in case that wasn’t bad enough for a Labour Party that is already struggling financially, Unite’s general secretary has announced a consultation with her members to decide whether they want to remain a Labour affiliate at all.

..................................

Unite has three main grievances against Labour at the moment. The Birmingham refuse collectors’ strike, now into its second year, the Government’s abandonment and defenestration of the North Sea oil and gas industry on the altar of the “green revolution” and net zero, and a more general sense that this Government is not properly representing working people.

The criticism of the Government’s North Sea policies in particular should worry Starmer since they are being pursued with religious fervour by his Net Zero Secretary, Ed Miliband, whom Starmer is reported to have tried to sack or move at the last reshuffle, only to be thwarted when Miliband refused to move and Starmer discovered he had less political clout that most prime ministers.

This area of policy is of concern to other big unions too. Last year Gary Smith, general secretary of the GMB Union, warned that Miliband’s net-zero transition will be “measured in redundancies” among oil and gas workers. Graham joined in the attack, demanding Miliband’s sacking for endangering North Sea jobs.

The key point being, why should ordinary workers and trade union members vote to continue to have their pay packets diminished in order to fund a party that seems not to care about their jobs?

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(continued)

Every barrel and every cubic metre we choose not to produce at home will simply be imported from somewhere else – often from countries with weaker environmental standards and far greater geopolitical risk.

The Government now faces a clear choice. Projects such as Jackdaw and Rosebank could provide secure domestic supply for decades. Approving them would send a signal that Britain is serious about energy security. Opening up new licences, to explore our nation’s remaining critical resources, is now a matter of national security.

Refusing them would send the opposite message: that the UK would rather depend on imports than develop its own resources.

At a time of rising global instability, that would be an extraordinary decision.

Just across the maritime border, Norway is discovering new reserves and strengthening its energy future. Britain, meanwhile, is doing the opposite.

Last year, for the first time since the 1960s, not a single new exploratory oil or gas well was drilled in the British sector of the North Sea. Ed Miliband refuses to issue new licences. The UK is punishing the very companies investing in the North Sea with the windfall tax, or energy profits levy, pushing the tax burden close to 80pc, which is one of the highest anywhere in the world.

Unsurprisingly, investment is fleeing. If Britain is serious about energy security and jobs, the windfall tax must be scrapped and replaced with a stable, price-triggered system that encourages companies to invest here rather than somewhere else.

Net zero ambitions are good goals but should sit firmly in second place. The UK should maximise energy extraction from the North Sea alongside nuclear new builds and additional wind turbines. These are not mutually exclusive as the US has shown. We must not let ideology obscure common sense and jeopardise national security.

Energy security must come before rigid net zero targets and the same applies to the rest of Europe.

If ever there was a time to talk about energy security then surely it is now. We are just over a week into the Iran war and we are already seeing massive impacts on our energy prices and on our energy security.

In a week when Brent crude breached the $100 per barrel mark, with UK gas prices more than doubling, we find we only have two days of strategic gas stocks available to the country.

We need a rapid reassessment of our priorities. Nothing is more important for national security than energy independence.

Without reliable energy in a conflict situation, running hospitals, transportation, manufacturing and essentials such as heating and lighting are jeopardised. Our strategic defence capability is totally undermined just when we need it most. Without a reliable supply of energy, the country is crippled.

The world is becoming increasingly turbulent. Multiple conflicts are occurring across the globe with a major escalation happening right now in the Middle East. There are no signs that these conflagrations will abate or that humans will suddenly become a peaceful species. Recent history demonstrates that these conflicts have an immediate and dramatically affect on our energy security, as shown by the Ukraine war and the current Middle East crisis.

Energy prices in the UK and Europe have skyrocketed since the start of the Iran war. This kills industry and manufacturing and our competitiveness. Our dependency on foreign energy suppliers only increases. They have us where they want us – over a barrel, if you’ll excuse the pun.

By contrast, energy prices in the US have largely stayed stable because they are energy independent. Their economy will not get hammered by sky-high energy prices.

This has not happened accidentally but through a deliberate, long-term policy of prioritising energy independence in America.

They encouraged the development of new oil fields in the US gulf while simultaneously encouraging onshore development of oil and gas from shale. This has not been at the expense of investment in renewables which has continued apace alongside oil and gas investment, further adding to US energy independence. It is abundantly clear to me that our prime strategy should be to establish energy independence.

The disruption in the Strait of Hormuz should be a wake-up call for Britain.

Our energy system has a glaring weakness. We simply do not store or produce enough gas. Countries such as Germany and France hold months of reserves. The UK holds a fraction of that. When global supply is disrupted, Britain is exposed first and hardest. Prices surge and households pick up the bill.

But storage is only part of the problem. The bigger issue is that Britain is choosing to import energy rather than produce it. UK oil and gas production is forecast to collapse from 74 million tonnes in 2022 to just 33 million tonnes by 2030. That is not because the resources have disappeared. It is because investment is being driven away.

(continued)

Rachel Reeves, the Chancellor, told MPs on Wednesday that “nothing is off the table” when it comes to supporting households and businesses on energy costs. However, the Chancellor signalled she favoured keeping the windfall tax on oil and gas.

Ms Reeves told MPs on the Treasury select committee: “If prices remain at an elevated level, revenue would come in but of course that revenue would be needed to help with people’s bills.”

Official forecasts indicate the energy profits levy, as the windfall tax is officially known, will raise £2.5bn for the Government this year, falling to £1.7bn next year and £0.9bn the year after if oil prices drop as predicted before the war in Iran.

Sir Jim’s Ineos chemicals conglomerate operates several plants across the UK including a petrochemical plant at Grangemouth in Scotland and the Forties pipeline system that links 80 North Sea oil and gas fields to the shore. It also controls Manchester United football club.

His intervention comes as a drilling ship heads for the UK to start extracting oil and gas from the controversial Rosebank field off the coast of the Shetland Islands.

The Petrojarl Rosebank left dry dock in Dubai before the Iran conflict. Mr Miliband has yet to approve the Rosebank field, which he described as “climate vandalism” in opposition. A decision is said to be imminent.

The Rosebank field is the largest undeveloped oil and gas field in British waters. It is estimated to contain around 300 million barrels of oil.

Jackdaw, 150 miles east of Aberdeen, could provide enough gas to heat 1.4 million UK homes, developer Shell has said.

Ineos boss urges Energy Secretary to reverse his decision to block North Sea gas development

https://www.telegraph.co.uk/business/2026/03/12/iran-war-wake-up-call-miliband-jim-ratcliffe/

The Iran crisis is a wake-up call for Ed Miliband that should prompt him to rethink his approach to the North Sea, Sir Jim Ratcliffe has said.

Writing in The Telegraph, the Ineos boss called on the Energy Secretary to approve two new gas developments – the Rosebank and Jackdaw fields – and allow further exploration. “Nothing is more important for national security than energy independence,” he wrote, calling for an end to Labour’s North Sea drilling ban and windfall taxes. “We need a rapid reassessment of our priorities.

“Without reliable energy in a conflict situation, running hospitals, transportation, manufacturing and basic essentials like heating and lighting are jeopardised.

“Our strategic defence capability is totally undermined just when we need it most. Without a reliable supply of energy, the country is crippled.”

The Ineos boss’s intervention comes amid pressure on the Government to do more to support the country as war in the Middle East sends oil and gas prices higher. The price of petrol has already risen at its fastest pace since the 2022 invasion of Ukraine and analysts say the price cap on household bills could jump by hundreds of pounds in the summer.

Sir Jim said Britain should rely more heavily on oil and gas supplies drawn from its own waters to ensure energy security.

He wrote: “The disruption in the Strait of Hormuz should be a wake-up call ... Britain is choosing to import energy rather than produce it.

“UK oil and gas production is forecast to collapse from 74 million tonnes in 2022 to just 33 million tonnes by 2030. That is not because the resources have disappeared. It is because investment is being driven away.”

The industrialist is one of a growing number of senior UK business and industry leaders calling on Sir Keir Starmer and Mr Miliband to change course.

Greg Jackson, the founder and chief executive of Octopus, urged the Government last week to “use what’s available from the North Sea”.

Offshore Energies UK, the trade body for the UK oil and gas industry, has stepped up its campaign to replace the windfall tax. It says the 78pc flat rate total tax imposed on UK oil and gas profits is driving companies away and destroying 1,000 jobs a month.

Sir Jim also called for more investment in the UK’s gas storage capacity, a cause long advocated by British Gas-owner Centrica. The Telegraph revealed last week that Britain had as little as two days of gas stored.

(continued)

Flows may resume fairly if the conflict ends with a ceasefire agreed by all sides but the risk calculations will be different going forward. It is far from clear that if the US achieves its stated objectives of degrading Iran’s ballistic missile and drone programmes and militarily weakening the Islamic Revolutionary Guards Corps, the Middle East will be more stable than before the war. This is particularly the case if the Iranian regime remains in power but feels threatened on all sides, or if a power vacuum emerges in Tehran.

This scenario has major repercussions for Asian buyers of Gulf energy. The conflict is clearly showing that the region, which is also home to all of oil’s spare capacity, remains vulnerable. China, India, Japan and South Korea together receive almost 70 per cent of Middle Eastern crude flows through the Strait of Hormuz, meeting nearly half their combined crude requirements via this route. The imperative for Asian powers to safeguard their energy lifelines is therefore becoming ever more urgent.

This is especially important for China. Beijing has taken various steps to reduce these risks, including diversifying its imports with a goal to import no more than 20 per cent of total oil imports from any one source, as well as building up substantial domestic oil stockpiles.

But the limits of this strategy are tested when almost 50 per cent of Chinese crude imports originate from the Middle East. In the meantime, China’s leadership has urged local refineries to halt exports of gasoline, diesel and jet fuel. We understand the Indian government is also asking state-owned refiners to prioritise domestic product supplies, similar to the approach taken by Thailand.

Security of supply will be forced back to the top of the agenda for governments in the new world order, much as it was after Russia invaded Ukraine in 2022. That will continue to reshape oil markets for a long time to come.

Even if the Iran war ends quickly, governments will need to prioritise security of supply

https://www.ft.com/content/b33b5ff1-7a92-4d0f-a4e7-dfa70d17e739

After the wild swings in oil markets since the start of the Iran war, US President Donald Trump’s suggestion that the conflict will end soon has reignited hopes of more normal conditions in the not-too-distant future.

That seems far-fetched. We are in the midst of one of the biggest supply disruptions in the history of the energy market — an event the industry has feared for 40 years. And yet, now that it is here, no one seems prepared.

Even after accounting for diversions by Saudi Arabia and the United Arab Emirates, the flow of oil through the Strait of Hormuz has been reduced by at least 10mn barrels a day, according to our estimates. That’s nearly 2.5 times more than the Russian crude exports that were assessed to be at risk during the initial stages of the Ukraine war before Russian supply was directed to China and India instead of Europe. The flow of oil products and liquefied petroleum gas through the Strait of Hormuz has also been reduced by 5mn b/d and liquefied natural gas stuck at nearly the equivalent of nearly 85mn tonnes per annum, almost 20 per cent of global supply.

Oil price volatility has skyrocketed. On Monday, the Brent crude benchmark swung around in a $35 range, rising to nearly $120 per barrel on fears the Strait would remain closed for a while and then falling on assumptions that the war would end imminently based on Trump’s comments. Yet the G7 continues to discuss releases from strategic petroleum reserves and Asian economies are implementing energy conservation policies. If the impact of the war was truly going to be brief, why would such emergency policy actions be needed?

The market is right to fixate on the signals from the US and other governments. Ultimately, with every day that the Strait of Hormuz is effectively shut, the volume of energy lost climbs higher and higher. Volatility will remain elevated and we see crude prices continuing to rally until the point demand is curtailed given the volume of rising production cuts, which are north of 7mn b/d.

Indeed, even if large releases from emergency oil stockpiles manage to quell price increases in the near term, they would not fully make up for the more than 10mb/d of lost flow, meaning the market will keep testing the resolve of the US administration. Finite stocks can rarely replace lost flows unless it is clear when the supply disruption will end, especially when the losses are of this magnitude. There is also no equivalent strategic gas stockpile to buffer large disruptions.

The biggest question for us is what the new normal will look like, whenever it comes. Clearly, it won’t look like the old status quo. Indeed, it may be wrong to assume that now that Iran has carried out its longstanding threat to disrupt the Strait of Hormuz, the status quo ante for regional trade will be easy to restore.

(continued)

Reforming the windfall tax, on the other hand, raises the possibility of a sustainable increase in domestic production. While the extra North Sea barrels won’t come soon enough for the current energy crisis, it would leave the UK in better shape when the next one arrives.

There is little doubt that the windfall tax has hit investment in the North Sea

https://www.ft.com/content/d5093203-a1f3-4756-96c7-173668735647

The UK’s windfall tax on North Sea oil and gas producers looked unfair when energy prices were low. With oil nudging $100 per barrel and European natural gas prices almost double what they were a week ago, the case for cutting or scrapping the Energy Profits Levy has only got stronger.

There is little doubt that the tax, which sees the government creaming off an extra 38 per cent of profit unless oil falls below $76.12 per barrel and gas below £20 per megawatt hour, has hit investment in the North Sea. Even without it, producers face a 40 per cent profit tax. And they have been squealing, loudly. Harbour Energy has put £2bn of capital projects on hold. Production from the area has been declining, so government revenue has undershot targets.

The oil and gas industry believes that this can be reversed. Watering down the windfall tax, so it only kicks in when oil prices are above $90 a barrel and gas prices above £30 per megawatt hour and only applies to revenue exceeding these thresholds, would unlock £50bn of investments in 111 projects in the basin, says industry association Offshore Energies UK.

Assuming it costs $25 of investment in drilling and facilities to suck up one barrel, in simple terms, that sort of investment would yield a quantity equivalent to 550,000 barrels a day over a decade. That would be sufficient to halt production declines in the basin, according to Stifel analysts, bringing UK North Sea oil and gas production back up above 1mn barrels a day in the 2030s.

This would be well worth doing. The UK consumes roughly 1.4mn barrels of oil a day, and natural gas equivalent to about 1.1mn barrels per day, so a revitalised North Sea could provide energy for some 40 per cent of the country’s needs. It is true, of course, that demand for fossil fuels is set to decline as the country gets further down its decarbonisation pathway. But, looking at natural gas at least, National Energy System Operator still estimates that we will be using between 63 and 93 per cent of 2024 volumes by 2035.

More domestic production wouldn’t shield UK consumers from higher energy bills. The country is interconnected with its neighbours and would see domestic prices rise to international levels. But higher profit in one area of the economy, and the accompanying jobs and taxes, would at least partly cushion the pain.

One might think that if prices get high enough, oil producers should want to drill anyway, windfall taxes or not. That’s true. But they would have to rise a lot, and stay high: investment decisions are taken on long-term price scenarios, and it is still too soon to know how long the US war on Iran will last.

WTI even trading few cents HIGHER than Brent. US drivers will be ecstatic about Don Trump's adventures in the Middle East.

Rachel Reeves has the opportunity to make a cost of living argument against Ed Miliband's green energy agenda

https://www.thetimes.com/business/economics/article/rationing-north-sea-oil-gas-phcbrnsch

OR https://archive.md/6Ialx

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While the energy secretary, Ed Miliband, makes the loosely coherent argument that UK production of oil and gas does not change the international prices of these commodities, it certainly does impact the UK’s balance of payments and the value of the pound. Increased revenues would act as a stabilising function for the UK currency when global commodity prices rise, bearing down on imported inflation, interest rates, and supporting the cost of living.

It remains a mystery to me why the Treasury — aware of the insecuronomics of this approach — is not making this a cost of living argument. Just because the UK’s energy production doesn’t impact prices doesn’t mean it wouldn’t impact UK economic conditions. A charitable interpretation is that Miliband is being partial in his analysis.

It also speaks to successive governments being ignorant of the impact on UK living standards from rationing of important inputs into the UK economy. Constrained energy production, as well as rationing of land for development, and capital for investment, all represent an economy that has not made growth its number one mission. This matters in the minds of investors when they consider the attractiveness of owning UK debt. The UK under successive governments has used the peace dividend since the end of the Cold War to build a ration pack economy. The chancellor has the opportunity to make the argument — from a centre-left position — for an end to rationing. A more affordable cost of living for UK citizens depends on it.

"The bit that scares me about Trump’s current crusade is that neither the president, nor Secretary of State Marco Rubio, nor Defense Secretary Pete Hegseth, knows anything about the Middle East and its peoples, except what Israel’s Benjamin Netanyahu chooses to tell them. The White House, National Security Council and State Department have been systematically purged of the experts who have studied the region for decades."

VERY interesting article by Max Hastings : https://archive.md/Vg7R8#selection-1601.0-1601.424

Depleted oil reserve leaves US exposed as Iran war pushes up prices

Donald Trump has not fulfilled a vow to refill the Strategic Petroleum Reserve that was drained by Joe Biden

https://www.ft.com/content/d546fd5b-4a0c-4b90-8bee-9e85b75458ed

Donald Trump’s decision not to refill the Strategic Petroleum Reserve drained by his predecessor Joe Biden has left consumers exposed to an oil price shock following US and Israeli attacks on Iran, analysts have warned.

The reserve, created in 1974 following the Arab oil embargo, was left well below its capacity after Biden opened the taps to contain crude prices following Russia’s full-scale invasion of Ukraine.

Trump has since failed to fulfil the vow he made in his inauguration speech last year to “refill our reserves right up to the top again”.

The outcome has left the US short of firepower to quell a new surge in petrol prices triggered by Trump’s war in Iran and Tehran’s retaliatory strikes on energy assets in the Gulf, which have hurt supplies.

“The problem now is that if we see a prolonged period of supply constrictions,” said Hugh Daigle, professor of petroleum engineering at the University of Texas at Austin.

The Trump administration had missed the opportunity to refill the reserve last year when oil was cheaper, he said. The closure of the Strait of Hormuz, a chokepoint for a fifth of global supply, would make it harder to replenish the SPR.

“That’ll lead to higher prices, which would make it financially more difficult to refill the reserve.”

The reserve currently contains 415mn barrels of oil, or about 20 days of total US consumption — well below its 714mn-barrel capacity. Drawing down too much of the oil too quickly could damage the salt caverns holding it, say experts. It would cost more than $20bn to refill, according to the US Department of Energy.

Funding shortages and maintenance delays at the underground facilities in Texas and Louisiana have also hindered replenishment. Biden released 180mn barrels starting in 2021 as petrol prices rose towards record highs in 2022. ........

The Trump administration told the FT this week it would not tap the SPR to contain any price jump. It is working on alternative price plans, including providing US Navy escorts and insurance to tankers threatened by Iran in the Gulf.

Bloomberg reported on Thursday that the administration could also consider the trading of oil futures to contain prices — although details were scant.

Experts have cast doubt on the escort and insurance plan for tankers and said Trump could yet tap the diminished SPR in desperation.

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US and Canadian oilers are barely moving up either as one would expect with this oil price rise.

Former British diplomat Greg Quinn provides a scathing review of this week's financial updates.

https://www.energyvoice.com/insights/energy-opinion/593514/this-government-doesnt-like-oil-workers/

This Government doesn’t like anyone who works in oil and gas and no longer pretends to think anything different...........

An earlier end to the windfall tax than 2030 is a positive, but I must say that comments about how geopolitical events might well have delayed any end to it are baffling. Indeed, they suggest the chancellor might see increased oil and gas prices as a way of getting more revenue from the industry.

Such comments belie the facts as laid out by industry, trade bodies, and the unions.

These make clear that Treasury revenue from taxation is actually falling as investment flees a country which is clearly antagonistic to it. A 78% tax on nothing is nothing.

There is no logic to this position beyond a dinner table ideological dogma from those in London and the south-east. The same anti-worker rhetoric is seen in the Labour Party’s approach to oil and gas as Margaret Thatcher showed to coal workers in the 1980s.

The founders of Labour must be spinning in their graves. What would they think of this current batch of leaders pushing forward with a policy of deindustrialisation of a major segment of the economy, which employs some 200,000 people across the country and supports countless more jobs?

Yes, I’ve read the press statements from the Department of Energy Security and Net Zero, which talk about renewables and the transition.

But those jobs aren’t in place now and won’t be for years. So, we are destroying an industry now for the possibility of jam tomorrow (albeit cheap superstore own-brand jam as opposed to Dundee’s finest …).

This approach also makes no sense from the perspective of energy security and energy resilience. We are going to get hammered as a result of the war in the Middle East. The folly of our dependence on gas from the region has been laid bare.

And yes, no one sensible is saying we can supply all of our needs from the North Sea. But every barrel of oil equivalent that we do means one less to be imported. As I say, this ideological dogma is destroying an industry and a workforce as well as Margaret Thatcher did in the 1980s.

Who would have thought that from a Labour Government?................................

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So what to do? Logic and facts appear to mean nothing.

Maybe it is time for the unions to make clear their displeasure in a way that will lead to them being listened to – by reducing funding to a party which clearly no longer cares about workers – unless they are in the ‘right’ industries.

And then we have the May elections. I trust Anas Sarwar isn’t expecting many votes in the north-east of Scotland.

Londoner7 on the HBR-board exactly describes how i am thinking about Reeves' "EPL-maneuver" :

"The OBR’s fiscal outlook on Tuesday forecast that oil and gas prices would fall next year below the threshold for removing the tax before its planned end date in 2030. I suspect that on the basis of this forecast Reeve's planned to announce on Tuesday that the EPL would end in 2027. The Middle East war and the impact on prices may have put paid to that outcome - the ESIM may not be triggered.

I see no change to the government's position - the EPL will stay in place until 2030 unless the ESIM is triggered. The discussion on Wednesday was political theater in an attempt to remove the North Sea debate from May's Hollyrood's elections, and to urge the energy companies to push forward projects to save British jobs. She's hoping for the benefit of investment to the UK economy without making any political investment to removing the EPL.

The North Sea executives will listen, making cooing sounds, but ultimately go back to their boardrooms and make the decisions right for their stakeholders. If or when the government moves on the EPL/ESIM, then North Sea investment will follow if the infrastructure still allows.

The operators will be alive to short term fast payback opportunities, even under the EPL, but the longer term projects will avoid reliance on infrastructure, particularly oil pipelines, rather using FSPOs, and the use of gas infrastructure will be centred on other supporting long duration fields feeding the pipe."

(continued)

In the event that the windfall tax does come to an end, it will be replaced by the oil and gas price mechanism (OGPM).

When it is brought in, the OGPM will institute a 40% headline tax rate on oil and gas company revenues, with an additional 35% set to be brought in when commodity prices spike. Two thresholds are defined in the OGPM, one for oil and one for gas. For the financial year 2026-27, these will be $90 per barrel of oil and 90p per therm for gas.

Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said his organisation “welcome” engagement with government on a policy it has long stood against.

He argued “the EPL must come to an end now” as he pointed to findings from Offshore Energies UK that state £50 million of investment could be unlocked if the North Sea tax regime is overhauled.

“There has never been a more important, more urgent moment to back the North Sea and invest in domestic production,” Borthwick added.

“It is now incumbent upon the chancellor to create the fiscal and regulatory environment which would allow these companies to invest.

“The energy profits levy has left the UK exporting jobs and importing oil and gas from volatile regions.

“Moving to the Oil and Gas Price Mechanism can change that trajectory, but it’s up to the UK Government to act now.”

SO WE DEFINITELY ARE NOT OUT OF THE WOODS YET.

Wednesday saw the chancellor Rachel Reeves meet with oil and gas industry leaders to discuss current geopolitical uncertainty and its impact on UK energy.

Following the meeting little update was given as to how the government will shift policy to support the UK’s energy production.

Rahter, Reeves and Co. opted to big up findings from the Office of Budget Responsibility (OBR), which indicated the energy profits levy (EPL), also known as the windfall tax, could end by September 2027, if oil prices remain on forecast. However, Panmure Liberum director and oil and gas research analyst Ashley Kelty was not convinced by the OBR’s sums, as he argued the body has a “poor track record” of “forecasting both commodity prices and tax take” from the North Sea.

It was said that Reeves had wanted to remove the windfall tax in this week’s Spring Statement, but decided against the decision in light of conflict breaking out in one of the world’s largest hydrocarbon frontiers. This excuse left Kelty “disappointed” as he pointed out that “the ability to end it on hand”.

Instead, the government is hoping to see the energy security investment mechanism (ESIM) kick in, a policy introduced under former Tory chancellor, Jeremy Hunt. This mechanism would kick in if commodity prices drop below a level set by the government for six consecutive months and would see an end to the windfall tax. The ESIM thresholds for the financial year to the end of March 2027 are set at $78.65 per barrel of oil and £0.61 per therm of natural gas.

Kelty said: “We have a major issue with this idea as it is clearly based on two false premises –in that the ESIM could actually be triggered – when it was designed in such a way that it is nigh on impossible to meet the necessary conditions – and that the OBR forecasts will be anything other than wrong.”

At the time of the ESIM’s introduction in 2023, industry commentators had hit out at the policy, claiming that it would “never kick in”, a belief that Kelty still shares. “We believe the Government is hoping that the ESIM will be triggered and that this will save them from having to make the tough decision to end the EPL early with the negative optics that would have with their own backbenchers,” Kelty added.

He further slammed the government for having “no appetite to make tough choices to support the energy sector”.

Ahead of Tuesday’s Spring Statement, the Panmure Liberum analyst questioned whether Reeves and prime minister Kier Startermer had the “political capital” and “courage” to deliver windfall tax removal.

Last week, he claimed there was “no genuine reason for keeping the EPL in place” and on Thursday suggested that it would remain until its predetermined end date of March 2030.

“This is very disappointing overall, as it looks like the EPL is now in place until 2030,” Kelty concluded

“The oil and gas industry and investors will be deeply disappointed by this continued inaction, and the national self-harm will continue.”