Donald Trump has his eyes on Ed Miliband. Keir Starmer’s decision is (Image: Getty)
If we ever needed a reminder of the importance of a secure supply of affordable energy, this is it. There is uproar once again in the Middle East. As the US attacks Iran, the Ayatollahs retaliate by trying to destroy the world energy supply. Their drones have destroyed half of Qatar’s liquefied natural gas exports and oil tankers do not dare to sail through the vital Strait of Hormuz supply route. Such behaviour is causing our energy prices to already skyrocket.
The price of a barrel of Brent crude has increased from $70 last week to $84 today. UK gas prices have more than doubled to 147p per therm. JPMorgan has warned that if the war lasts for more than a few weeks, there will be “catastrophic” losses in energy supplies, which could easily happen. The situation is further proof, if needed, that fossil fuels remain at the heart of the global economy. Any threat to their supplies creates panic.
So what has our Energy Secretary Ed Miliband done?
All new oil and gas exploration in the North Sea was banned. Windfall taxes, the most punitive in the world, impact everything we produce. The result is inevitable. Britain’s drillers are giving up.
While sane, sensible democracies such as Denmark and Norway are progressing with exploration, we are abandoning the fight. At the moment this Labour government is looking somewhat good. donald Trump: There is anger about this.
Read more: ‘The world is on the brink of economic recession – but Britain faces a unique threat.’
Read more: ‘Ed Miliband opened his mouth and utter nonsense came out – said very loudly.’
Yesterday Trump made his position clear. As European wholesale gas prices rose, he urged Sir Keir Starmer to “immediately” restart drilling in the North Sea. When asked what advice he would give the Prime Minister, he fumed: “Open the North Sea immediately. Your energy prices are skyrocketing.”
It’s like holding a loaded gun to Miliband’s head, because he is the one who keeps closing the North Sea. He banned new oil and gas licences and imposed effective marginal tax rates on some companies of more than 100%. That’s a hefty tax rate; even Rachel Reeves hasn’t gone that far. As yet.
As shadow energy secretary Claire Coutinho has pointed out, Miliband is destroying 1,000 jobs a month, wasting £50 billion of investment and making the UK less energy secure. Under Labour, for the first time since 1964, no exploration wells were drilled in British waters last year.
In contrast, Norway, which shares the same basin, drilled 49 exploration wells and made 21 new discoveries. Miliband was already destroying jobs and making Britain poorer and weaker. And before this war, it would create the threat of anarchy.
Miliband argues that climate change is also a threat and that creating our own supplies of wind and solar power will boost the UK’s energy security. I’m not going to debunk those arguments. The more energy we can generate from any source, the better.
But as we move towards a green transition, we still need good old-fashioned fossil fuels. Shutting down our own production does nothing for the planet, as we simply buy oil and gas from elsewhere. This means higher emissions and energy prices and lower profits and tax revenues. This is even more labour economic illiteracy.
Miliband talks about energy security, yet it seems he is content to leave us dependent on dubious Chinese technology. As Coutinho points out, every molecule of North Sea gas we produce goes into British pipes. Oil can be sold in the international market. When the price is $40 a barrel, our drillers make profits. Today, it is more than double that. And the more oil we have, the more jobs, taxes, and revenue we will lose.
This strategy was quite risky when the world was relatively at peace. Now we are in the middle of a horrific shooting war. Miliband must change course or go. Donald Trump has handed Keir Starmer a metaphorical gun. Now he will have to use it.
