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North Sea oil

The madness at the heart of our energy policy

A rig off the coast of Aberdeen. Simon Dawson/Bloomberg/Getty

A few weeks ago, everyone was appalled to learn that Russia had been sending spy vessels around the North Sea in a possible precursor to sabotage. But Moscow “needn’t bother”, says Juliet Samuel in The Times – our own government is systematically strangling our oil and gas industry all by itself. Its recent windfall taxes, coupled with Labour’s pledge to stop all “new investment” in fossil fuels, have sent the industry into a tailspin. “Nine in 10 capital projects in the North Sea are now on hold.” Activity in new fields is at a 40-year low. Big energy firms are telling their shareholders they’re shifting their focus towards “more stable political environments, like West Africa”.

There might be an argument for destroying one of our “prime economic assets” – and an employer of 150,000 people – if it were good for the planet. In fact, the reverse is true. Two thirds of Britain’s energy still comes from fossil fuels, much of which we get from the North Sea. So if UK production falls, we just have to buy more European gas – meaning Europe will “burn more coal and import more carbon-intensive gas by ship”. In private, ministers admit that it’s a mess; they know they could limit the damage with a couple of easy tweaks. The problem is politics: anything seen as helping out the evil oil firms is a no-no. It’s a disgrace. Our government is “knowingly engaged in an act of economic vandalism”, all for the sake of “short-term political gain”.