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London: 2 April 2024
Campaign group Net Zero Watch warned Claire Coutinho against removing renewables subsidies from electricity bills. It was revealed yesterday that the Energy Secretary is looking at plans to move the levies onto gas bills or general taxation.
But Net Zero Watch director Andrew Montford has warned that she can only temporarily hide the true cost of renewable energy:
"It’s a sleight of hand. She is simply trying to hide the subsidies while simultaneously insisting that wind power is the cheapest. It’s yet more socialist market-rigging of a kind that the Callaghan government would have recognised."
And Mr Montford called for the government to make good on its promise to come clean about the cost of decarbonising the country:
Mr Sunak has said the Government needs to come clean on the cost of Net Zero, but we are still waiting for him and his Energy Secretary to tell us the truth about renewables. If they don’t come clean soon, their place in the history books will be as a pair of confidence tricksters.
Thursday’s results day is available as a webcast on enquest.com. AB seems very confident but wasn’t challenged on the plans that incorporate gas from Bressay. It was as though there was a decision not to acknowledge the elephant in the room, development of new fields. Rosebank is moving ahead but what about Cambo? Shell ducked out of Cambo but the Ukraine war has probably affected that decision and there are probably ongoing discussions including the government at a high level.
AB did say that we had received positive indications from NSTA over the gas line which I assumed means Bressay to Kraken. He was talking as though it is a done deal. I don't think you can start exporting gas until you have a FDP that gets NTSA blessing. I think we've been given the nod from Labour.
In fact the damage that EPL is doing to the industry wasn’t mentioned much at all. I think that is a good sign believe it or not because the only people acting sensibly and holding the strongest cards are the remaining O&G producers on the UKCS.
This only relates to the Dumbly post on 30 Mar 8:27
You should have numbered them to make it easier. You did ask for thoughts and I could easily get all 9 wrong. Here are mine.
1. No chance of EPL being tampered with until after the election.
2. We haven’t seen a ‘Labour Manifesto’ and at times the electorate have shorter memories than goldfish.
3. I think Labour will have an absolute majority but it won’t wipe away problems.
4. I think EnQuest are only looking at deals that work with high tax and a hostile government.
5. A fiscal event always possible as common sense and realism returns plus 'events' - Russia could escalate.
6. Tricky one about Bressay. If they announce it won’t proceed then it won’t because governments don’t pay ransoms (they usually act before via back channels). This is a massive game changer for the company and the UK if it happens. The activists really are a spent force because their threats of global collapse haven’t materialised and renewable prices are unaffordable and going higher. Occam’s razor says it will go ahead because of the chains of parsimony that Labour will creatively invent. I do believe Ed is on borrowed time.
7. No idea who the others are and would need government diktat.
8. Tax credits are ‘sanctified’ and would drive business away from the UK if removed.
9. M&A – no idea. We have plenty of wiggle room and possibly more of a before/after election decision. Before means likely to get a Labour blessing; after something to negotiate with as there is a chance Labour are creating a new narrative due to professional industry and economic analysis or more likely due to simple expediency.
From same article:
"RWE, a German energy firm, wants to erect nine turbines each standing 660 feet tall – five times the height of the tallest local church.
RWE’s project newsletter admits that 77pc of local people are opposed to the project but said it still planned to go ahead."
later
"“Last year RenewableUK Cymru commissioned a Welsh poll which showed that people living closest to wind farms are the greatest supporters of wind power. While the majority of Welsh respondents (65pc) said they support onshore wind, with only 9pc opposed, approval ratings rose to 72pc for those who live within five miles of a windfarm.”
My reading is that support is high for (maybe) a potential handout/sweetener to those most affected/closest. There is also the point that it might not be visible to many. I live in the suburbs and can't really see more than 300 yards. I wouldn't accept one that could adversely affect my property value or was viewable from my back garden.
From The Telegraph:
But councillor Gill Davies, 84, who sits as an independent on Nelson council, said the proposed wind farm would be a disaster.
She said: “Renewable energy is a good idea but destroying our landscape to produce it is too high a price.
But councillor Gill Davies, 84, who sits as an independent on Nelson council, said the proposed wind farm would be a disaster.
She said: “Renewable energy is a good idea but destroying our landscape to produce it is too high a price.
“Wales has enough low-carbon energy already. The power from this wind farm will all be going to England, the money will go to the company and we will get nothing. And then the English wonder why we Welsh get stroppy.”
The Welsh were stroppy before renewables (and the Jocks were too).
*Welsh Labour override local Councils in turbine planning. Sign of what's to come in England.
"EnQuest's owners are quick to point out that they have made no money since they invested. Moreover, they say, they have an obligation to make returns for their investors; if they can't do so after seven years, and with no prospect of returns in future, it is entirely rational to pull the plug."
The above was actually a slightly different story. I have cheated slightly by typing in 'EnQuest' when the actual name was 'Thame's".
But does it make the paragraph wrong? The Boat Race (30 March) is a traditional event but the back story was about pollution of the Thames and they did not have the traditional dumping of the cox in the the Thames due to fears of E.coli.
Water really is an existential threat and we run the risk of going backwards. In South Africa they have water rationing. Not because of a shortage of water but the electricity to deliver it. A new tiny band of activists (6 supoporters on funding page) were there conflating energy, water and Gaza https://twitter.com/youth_demand/status/1773758539871277246/photo/1. They actually have as much impact as juvenile graffiti scribblers but casually deface and damage our environment. That won't garner them support. The activist movement is crumbling before our eyes. Thames Water will survive in the same way that bankrupt Councils will. We the public will pay for the political failure to protect oiur infrastructure because the shelf life of expediency has gone. Let's face it. EPL wasn't about the environment. It was about an urgent need for cash to plug a gaping hole in the country's finance.
We are inching ahead.
Steady. Don't hand in your notice yet. These are 2021 prices and you don't get that much. The public pays it per job.
"It is crystal clear that all talk of a “green revolution” is simply a pipedream. These green jobs are only a façade, Potemkin jobs to give politicians and policymakers a good sound bite and make them feel good about themselves. The idea that we can move to “Green Prosperity” by subsidising each job to the tune of over £250K is plainly absurd. If we take any further steps down this “green prosperity” road, we risk bankrupting the nation."
https://davidturver.substack.com/p/astronomical-cost-of-green-jobs?utm_source=substack&publication_id=1285567&post_id=142111848&utm_medium=email&utm_content=share&utm_campaign=email-share&triggerShare=true&isFreemail=true&r=lx6e9&triedRedirect=true
Excellent find Oxygen - I even watched the first half. The importance and "sanctity" of contracts was mentioned time and again. That is the real world and companies are actually entitled to a profit otherwise their is no incentive and it doesn't happen. We have no right to insist that poor countries are forbidden from taking advantage of cheap energy. *Do jso have an annual conference? They're a spent force with every sentence beginning "we demand". They're not elected and most people grow out of these tantrums in childhood. It's all a bit like the playground one-upmanship of "I said it first" and other outrageous claims like "the science is settled". It isn't and never has been. The fight back has begun taking back lost ground.
*I was going through some jso stuff. They attack in London but many are not from London. A lot seem to come from Bristol.
Surely a mistake https://www.stockchallenge.co.uk/ftse.php
Byzantine - typo. The Siamese twins - Bressay/Bentley is the bigger prize. That would trigger a jackpot.
O/T I was out last night and my daughter's partner works for a company that handles PR and media exposure for large companies. One of his accounts was an ESG fund. I had another drink when he told me they'd gone bust (or closed). Slowly people are noticing the ESG model is naked.
Bzantine. I was going to ask what RockRose was going to do with the equipment they purchased. It doesn't actually move and there is just another label on the ownership. Clever but to get past HMRC you have to have a valid plan/project otherwise it wouldn't pass the smell test.
Years back when Bentley was owned by Xcite there was talk of them using gas from Bressay on development. Once Statoil mothballed it the writing was on the wall for Bentley.
The ball is now with Labour imo. They will have an important choice to make once elected. Do they abolish O&G production (both parties have conflated the two so very difficult to seperate) as threatened or accept that the transition is not a simple box ticking virtue sognalling exercise and brings valuable revenue and security to the UK.
I'm optimistic.
From EV today:
Domestic energy production in the UK has reached the lowest level since records began in 1948.
Figures from the UK Government show oil production reached a record low during 2023, while gas production was the second lowest level on record.
Overall production was down 36% on 2010 and 66% on 1999, when UK oil production peaked.
Despite lower energy demand – down 1.6% on 2022 – UK dependency on imports increased to 41.1% in 2023, from 37.3% in 2022.
Electricity imports increased significantly on 2022, while oil and gas still accounts for around 75% of the country’s energy requirements.
Norway and the US were the main sources of energy imports in 2023.
"more hogs means a bigger trough" - I don't think it coincidental that IKEA bid higher than others to get a 49% share of the Norwegian offshore wind farm that was auctioned earlier this month. They, to coin a phrase, "can see which way the wind is blowing". Already the likes of Google et al are creating more emissions than flying or cruising. I somehow can't see juststopoil giving up their smart phones but here's the thing. Wind and solar are intermittent. What will Google and the like do about that? Will they, as in countries that have unreliable electricity, have standby generators? I've been to plenty of foreign places where the hotels and restaurants only have the merest of blinks as the electricity goes off and the generators kick in. Will hospitals make contingency plans for high dependency units? At present there is only ONE energy source that can fill this role and this country is actively taking measures to destroy that industry.
Firstly - yes we are a giant if you use the Labour definition of 'oil giant'. What we here consider 'oil giants' left the UKCS some years ago. These are pivotal times and for once our timing is spot-on. I was watching Peston on ITV last night and Labour were trialling a balloon. Gordon Brown (our longest serving Chancellor) was floating the idea of not paying interest on the statutory reserves that the banks have to lodge with the BoE in line with the ECB and the Swiss Central Bank. The amount was between £3-10 bn per year. This means the banks are next in line for robbing and they'll get less support than we did. On top of that the Water Companies are everybody's climate enemy No. 1 thereby taking the top of the leaderboard away from us. There are also changes in the CO2 emissions league because The Cloud now has a greater carbon footprint than the airline industry (shipping now No.3).
I don't think we should go gently into the transition but burn and rave at the injustice and unfairness of persecution. Rage, rage against the dying of the light because that is where we're heading unless the windfall tax is cancelled [apologies to Dylan Thomas]
I don't know how accurate this is https://neweconomics.org/2023/11/government-could-save-55bn-over-next-five-years-by-limiting-bank-of-englands-interest-payments-to-commercial-banks but I think they're [the banks] in Rachel Reeves sights.
Today. Little reaction because everyone had sodded off early for the Easter break. I think it even confused the algos. Wot, no impairments? They did the usual sell on news and found few buyers. Started buying and found no sellers so they went into sleep mode. The buying will have to wait until next week and hopefully a few raised broker recommendations. The O&G sector is entering a new era. ESG nand climate activism is on a downtrend because although it is true that "repeat a lie often enough and people will believe it" [Joseph Goebbels] eventually it ends when payments fall due - and that is happening NOW (where are you Ed?).
"Machines have not won yet. Machines typically do not fare well in a crisis. They are not good at responding to a new paradigm until the rules of the new paradigm are plugged into them by a human." Paul Marshall (Marshall Wace)
About 72 gigawatts-worth of new gas-fired power stations are planned across the Continent, according to a report from pressure group Beyond Fossil Fuels.
Gas power capacity across the Continent is on track to rise by 27pc under current proposals, despite a promise among G7 nations to decarbonise electricity grids by 2035.
Britain is planning or building more gas-fired power stations than almost any other European country, the analysis found. Source: The Telegraph yesterday
Agree Oxygen "First full year of windfall tax drives EnQuest to loss" is the one that the public will read. Hardly an endorsement of Jeremy and Ed's understanding of energy and the impact of a winfall tax when there is NO windfall. I'm happy with that headline. We live in an age of propaganda so we can do our own form of samizdat here. EV were just following conformist consensus. One day we will return to common sense and profit being a reward for risk.
Scotland is to face a far larger deficit than the rest of the UK amid a slump in oil prices, the Institute for Fiscal Studies (IFS) has warned.
The shortfall between revenues and spending will be around £2,450 greater per person in Scotland than the rest of the UK in 2023-2024, the IFS said.
It comes following a decline in North Sea oil and gas revenues amid falling energy prices, with further decreases expected.
Uncertainty surrounding oil and gas revenues means Scotland’s underlying public finances are far more volatile than those in the rest of the UK, the IFS said.
While Holyrood’s borrowing and revenues are managed through Westminster, this would pose a challenge should it become fiscally autonomous or independent.
David Phillips from the IFS said: “What this really means is that it would be very important to see substantial growth in the onshore economy if the Scottish government did not want to have to make quite substantial increases in tax rates or cuts in public spending.”
The analysis found that Scotland’s deficit will be £23bn in 2023-2024, equivalent to around £4,100 per person. In the rest of the UK, the shortfall between revenues and expenditure is around £1,650 per person.
The IFS highlighted that official forecasts by the Office for Budget Responsibility for North Sea income have been downgraded three times since November 2022, amid falling gas prices.
It comes after oil and gas brought in revenues of £10bn in 2022-23 and are projected to yield a further £5bn in 2023-24, far lower than initial forecasts of £15bn and £20bn respectively.
A combination of higher taxation and more stringent public spending will push down the deficit per person in the rest of the UK throughout the decade, while in Scotland it is barely expected to move, the IFS said.
The shortfall per Scot will have only marginally shrunk to £3,640 by 2028-29, while in the wider UK it is predicted to fall to £560 per person.
It means that the deficit will be £3,100 higher per head in Scotland, equivalent to an £18bn gap.
The IFS said: “Oil and gas revenues would need to amount to around £20bn per year in 2028–29 for Scotland’s net fiscal balance per person to match the UK’s.
“That would be more than four times more than what they are forecast to raise in the financial year that is about to end.”
The IFS and OBR are usually a stick to beat us with?
There has been speculation regarding M&A involving us and Ithaca. The clues from Itaca were there; the most obvious being the step down of the Ithaca CEO in January. Our senses were correct but it wasn't us and Ithaca. We at EnQuest have been shuffling the management around and remain unique with our CEO and his large holding.
Today Ithaca announced their FY results and the ENI tie up.
Is the YE important for a M&A due to the tax consideration or was today with Ithaca purely coincidental?
Might we get a surprise tomorrow with our FY results and/or would ongoing talks prevent the company promising buybacks or dividends?
He certainly does but the most interesting fact is that it is only responsible for 0.01% of the world's carbon dioxide emissions and close to 100% organic farming. Unfortunately its GDP per capita and life expectancy are even lower than Bhutan's.
Sustainable development basically means NO development but that is the direction we're going.