During my absence from blogging yesterday the government approved the Rosebank oilfield.
Let the stress, this does not mean that this oilfield will now progress. It does mean that there will have to be a legal challenge to it progressing. The decision on this oilfield will now have to be tested in the courts against laws already in place in the UK requiring that we achieve our net zero objectives by 2050.
Out front, as usual, when it came to tackling climate abuse was Caroline Lucas:
Unsurprisingly, I agree with my Green New Deal colleague. What she says is right.
Then I listened with care to what politicians, from Tories to Gordon Brown on Sophy Ridge's programme on Sky last night, were saying. The universal message is that we are going to use oil until 2050, and therefore we might as well use our own oil.
This is economic nonsense. The oil that will be produced from Rosebank increases the overall level of supply in world oil markets. Nothing says that it must be used domestically. And what we do know is that producing it will require enormous tax subsidies from the UK. We may not get significant tax benefits as a consequence. So, I wondered, what is the real reason for Rosebank? There has to be one. I did, in fact, find three.
First of all, the actual aim is to increase overall worldwide oil supply, whatever the politicians say. They want to do this to reduce the risk of inflation as a consequence of countries like Russia and Saudi Arabia cooperating to reduce oil supply to force up prices. Net zero is trumped by inflation concerns.
Second, every politician knows that this oil need not end up on UK markets, but they all know that selling oil from the UK will provide support for the value of sterling, about which they are all terrified because they believe that a further collapse in sterling's value will induce more inflation. So, as a result, they want Rosebank as it serves a role as a second anti-inflationary tool.
Third, there is the simple question of power, which is the lust which drives every politician. They believe that if the UK has major oil producing capacity then its International power will be enhanced, and so as a consequence will be their own. If Rosebank does get past the legal challenges, expect politicians to want further exploration west of the Shetlands, where Rosebank is, for precisely this reason.
As far as I can see, these are the real reasons for the Rosebank oilfield. Ignore net zero (because it is clear that the politicians have): short-term political expediency is the criteria that they are using for approving this field.
Bizarrely, if they really understood this issue correctly, they would realise that in practice developing renewable energy in Scotland could develop vastly more economic power than Rosebank can, at significantly lower cost. Doing so would also control inflation risks a lot more effectively. But, they do not think that will bring as much in terms of status for them as politicians, and so they are ignoring it. It really is as basic as that.
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“what is the real reason for Rosebank? ….I did… find three.”
I’d suggest a somewhat speculative 4th: bungs, bribes, brown envelopes to the vile-tory party. Quite possibly channeled by 3rd parties.
It will of course all be under the table. None of the meeja would ask the vile-tory polit-sickos how their party had/will benefit – but the benefit will be there.
It is certain there will be no tax benefits, the rationale is vile-tory-party funding.
Corruption, thy name is tory.
(& for the sake of fairness, I have no reason to doubt that vile-liebore would do exactly the same if in power – it is happening before our very eyes now). There is a way to kill all this. Funding ONLY from party members. Maximum of £1000 per member. Parties that try to dodge this will be abolished. Automatic on-line vote each year for all party officers. Automatic on-line vote every year in all constituencies by party members with respect to their MP (= ostracism), only those who are members for +3 years can vote. This would weaken the dead hand of party bureaucracy & encourage people to join (a political party). Won’t happen. Is it practical? perhaps. Would it shake things up – very definitely. Do we need a prfound shake up – yes.
Maybe
But I stress there is no evidence of it
Cynisism is not proof.
Agreed.
After all is not the very same markets that the Tories believe in that have actually raised the price of oil? By just sending it to the market the government has lost control of it, making their argument over inflation control redundant.
The profiteers will have their day.
But what emerges for me – and it is also implied in your post – that this government is committed to supporting markets – not its citizens. It will support markets because it will help their extractive operations as they exploit the resources at our expense.
And the Tories will keep their donors of course as the taxes they will be allowed not to pay find themselves going into the Tory bank account.
‘Corrupt’ does not even begin to describe it.
I’m also picking up this morning – very early of course – that Laboured/Stymied have rolled back on their plans for private schools?
Afterall, Stymied is a knight of the realm and all he is doing is defending it. More proof if ever it was needed that in this country money rules and it can do what it wants perhaps? Another sign of who really rules Blighty and that your vote does not count for much.
So the self-labelled ‘centrists’ and ‘adults in the room’ in open agreement with the Tory vandals – again. Consensus between these two supposedly opposing factions does appear to be reached with alarming regularity these days; and wheeling out Brown to settle the nerves of the unreformed New Labour pearl-clutchers is sure to work its reassuring magic on them. Jangling a set of keys in front of this lot has a solid track record.
The only national political party putting up any kind of fight against this is (once again) the Greens: I entirely appreciate Richard’s comments in the recent past about the Green’s rather lacking economic policies but as so many have pointed out the continued use of fossil fuels outweighs pretty much every other policy combined. I do hope that when the electorate’s next opportunity to select a government arrives that they bear all this in mind and more of them support the Greens, vain as that hope may prove.
I sincerely hope that the rumour mill speculation of a Novermber 2023 GE turns out to be correct: I have absolutely no faith in the incoming Labour government to alter course (and in the right direction at that) in the slightest but the sooner that they come to power and the electorate realise just how little this unwanted 90s reboot intends to do for them and the planet, the sooner we might achieve some actual progress with voters switching their support away from either of the two main parties. Nothing of course is guaranteed.
What I am not sure about is how big is the Rosebank Field and what is the annual production going to be like?
I believe the answer to both is not very much
300 million barrels is sugnificant
300 million barrels sounds like a lot, but that is just 3 DAYS of global oil consumption.
As pointed out, the oil will, if actually drilled, be sold on the open global market in dollars. Therefore, if we in the UK want it, we will have to pay the going price for it. IMO to have had any positive impact on our own energy security, it would need to be nationalised.
Anyway, the field will face considerable technical challenges which make the cost of accessing the oil relatively expensive. Add in the current taxes of around 75% (although will be 40% by the time any actual oil is produced), and you can see that the business case for actually developing this field requires high global oil prices. High global oil prices can lead to recession, causing the oil price to plummet, which then leads to this field making huge losses.
My theory for why the Norwegian company Equinor wanted the license, is to increase their paper reserves. The reason why the Tories okayed this, IMO, is partly as a sop to the right wing anti-netzero part of the party.
300m-500m barrels, I understand. Single-point estimates are misleading. The price, of course varies; but the current estimate is it will produce until 2050; and for the next 6 years, take $80-$100 per barrel as a starting point, and figure from there. Insignificant? It depends where you are standing.
“The OBR currently forecast tax receipts over the six-year period 2022/23 to 2027/28 will average £8.6 billion, up from an average of £0.8 billion over the six years to 2021/22.” (House of Commons Library, 23 April, 2023). That totals almost £52Bn. There are three separate profit-related taxes on oil and gas production: ring fence corporation tax, supplementary charge, and petroleum revenue tax (PRT); but there is the Energy Profits Levy forecast by the OBR to be £25.9 billion between 2022-23 and 2027-28.
This is not quite as straightforward as it appears, because there are substantial tax-breaks when investing in developments, which of course Big Oil typically exploits to the full. Nevertheless I would submit it is the Conservative Government’s primary intention to use Oil taxes to bail it out, at least as far as possible, from the insuperable financial mess it has made of the economy.
We should remember that Thatcher was out of a job without oil bailing her out; she was essentially sunk, and used North Sea Oil revenues to clean up the mess she was in; at least from a London perspective. Scotland, outside Aberdeen however, calculatedly saw nothing of the benefit (it was London bound); but Scotland received the full, ruinous, destructive economic zeal of Thatcherism to show just what a mess Neoliberal Thatcherism could make, even of a country rich in oil. An oil nation broken and dumped by its own Government.
The Conservatives are doing it again. They have brought thirteen years of austerity, incompetence and economic catastrophe, but Scotland will pay now for it in spades; tear up Scotland’s efforts to lead on renewable energy (the government has not invested in Scotland’s renewables potential), and make off sharply with the loot. Then insult the Scots by telling them they are an economic basket-case, and need London to bail them out. Scotland, of course is never bailed out; and if it was, it would be with its own money.
There is perhaps an even less appealing reason. Oil companies spend millions lobbying politicians for favours. Relatively small sums can do the job. These politicians and oil lobbyists belong to an elite set that includes people like the Mercers, in the US. A global cartel of money and influence. We can be sure that Starmer has been tapped up. His “principled” stand to “honour” Tory policies shows how opponents are also buyable. The UK with gain nothing from Rosebank. We may even lose. Nowhere in the heads of any of this cosy group will there be the slightest concern for the damage to the planet.
The schools policy according to Starmer is now to make them VAT liable alone, it seems. Their charitable status will be untouched, a financial gift to the richest schools for the elites. Once again, a conference policy, is dumped by fiat.
As the comments above indicate, can we assume that Labour is now a centre right party?
They will also pay business rates
Labout gets most of what it wants with a pragmatic compromise
If they would impose other charges in the Taxing Wealth Report 2024 I could live with that
Rathlin Energy defend their plans to extract oil in East Yorkshire on the grounds that it will be transported to a local refinery and sold locally, thus making us locally less dependent on imported oil.
If true then I support it (accepting the nuisance of an endless stream of tankers right past my front door in return for using my car to travel for the next few years as I doubt I will ever be able to afford an electric car).
https://www.hulldailymail.co.uk/news/hull-east-yorkshire-news/more-oil-gas-wells-can-8705856
But I have my doubts about whether it will work out as they project…. Rathlin will only get the plans approved and ready to go, then sell to an operator. At that point the operator will need to assess the financial viablity, and set that against the lifetime of the field bearing in mind the future tidal ingress…
Oil needs stay in the ground. Proposals like these are the industry’s way of slowing things down. Why not invest the costs of development on renewables? There come a tipping point when oil cannot compete with renewables on price. We need to reach that tipping point fast.
Doesn’t all oil have to be sold on the open market at the moment?
I’m looking forward to this low level law breaking.
https://leftfootforward.org/2023/09/exclusive-interview-chris-packham-on-finding-more-creative-methods-of-climate-protest/
It should be mandatory for a car manufacturer selling x units in the market to have a low x cost peoples EV model at x units /year that has x range. At the moment most are selling mostly up market models where there is the most profit.
But a lot, lot more should be spent on local public transport with tram / light rail as the backbone on heavily used routes fed by electric buses/trolleys including lesser used routes. The UK had many local tram systems in the 1920s serving cities and towns.