We await a new “energy supply strategy” from the Government, foreshadowed this week by Boris Johnson in response to the Ukraine crisis. The Prime Minister yesterday said that this would be brought forward within the next few days and he needs to get on with it. A supply crunch is not something theoretical or long-term; it could be upon us soon so the urgency required to forestall it must be evident.
The most pressing requirement is to increase the supply of North Sea oil and gas by expediting the approvals pending for new fields. These are tangled up in red tape and green regulations that have scared away investors. Posturing politicians like Nicola Sturgeon, the SNP leader – who even now appears to be opposed to exploiting the resources that were once intended to underpin an independent Scotland – have not helped.
Among the immediate consequences of this predicament, apparent before the invasion of Ukraine, is a spike in fuel prices which has seen the domestic energy price cap increase by more than 50 per cent. The Government has announced a package of help which will not cover the rise but is welcome. Labour wants to impose a windfall tax on the very oil and gas companies that are needed to exploit the North Sea fields, which shows how little they understand what is going on.
One idea put forward in this newspaper by George Trefgarne is to set up an emergency task force, similar to that which oversaw the Covid vaccine roll-out, to focus on averting a crisis away from the dead hand of Whitehall. This is worth pursuing and should be established forthwith.
Mr Johnson told MPs that his new strategy would include a boost for nuclear power, which has been shamefully neglected by successive governments, Labour and Tory, over the past three decades. This needs to be based on the rapid expansion of small modular reactor technology given the difficulties involved in building traditional power stations at Hinkley and Sizewell. There needs to be an ambitious programme for hydrogen power as well.
For Mr Johnson to be serious, he needs to amend the unrealistic green targets he has hitherto enthusiastically embraced, including the 78 per cent carbon reduction target by 2035. While it is clear the future of energy production is away from hydro-carbons and towards more renewables, this cannot happen by jeopardising our economic future.