Miliband willing to approve North Sea oil to land job as chancellor
Energy Secretary wants to prove he is pragmatist rather than zealot on environmental policy to help his case for being chancellor
DANIEL MARTIN, TONY DIVER
Ed Miliband wants to approve drilling in the North Sea to calm market jitters about his possible appointment as chancellor and prove he is no net zero “zealot”.
The Energy Secretary has privately signalled his willingness to grant consent for drilling at the Jackdaw gas field but cannot publicly confirm the move until a consultation closes next month.
Jackdaw, off the coast of Aberdeen, is one of two licences in the North Sea currently held in legal limbo. The other site, Rosebank, would produce oil to be sold in a global market, but Jackdaw would be able to provide enough fuel to heat 1.4 million British homes this winter.
Miliband is keen to show the markets he would be willing to put Britain’s economic growth ahead of his Net Zero ambitions if he became Chancellor amid reports more wealthy people are planning to flee Britain if he moves into No. 11.
Andy Burnham, who is set to become Prime Minister next Monday, has already said he is “open minded” about North Sea drilling to help combat Britain’s cost-of-living crisis.
An industry source said: “They want to do it. Ed Miliband sees it as a way of showing willing to the City but they are likely to follow the law.
“There is a public consultation that does not end until August 10th and if they announce anything before then they would run the risk of a judicial review. So, privately, they are signalling that they want to do it.”
The Government has faced growing calls from unions, the Tories and Sir Tony Blair, the former Labour Prime Minister, to allow more drilling in the North Sea. The issue dominated the recent by-election battle in Aberdeen South, helping to hand the Tories victory at the poll.
Last month, Sharon Graham, the Unite boss, said that if Burnham appointed Miliband as Chancellor, it would be like putting “a noose around the neck of job creation”.
Miliband, however, has previously spoken out against new drilling, describing proposed drilling at Rosebank as “climate vandalism”.
A source close to the Energy Secretary told the Observer at the weekend he was not a “zealot on the eco issue”, adding: “He’s much more a pragmatist than he’s painted to be and that wouldn’t be difficult to show, given the way he’s being portrayed.”
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ROSS CLARK
I’m a little sceptical of reports that Ed Miliband is prepared to back down and accept new drilling for gas in the Jackdaw field in return for being made chancellor. Last time that Miliband was reported to be on the point of granting permission for new oil and gas licences in the North Sea it turned out not to be true. He dug in his heels, and a hapless Keir Starmer let him do so.
Maybe Miliband’s ambition to be chancellor, and his desire to inflict a deeply left-wing fiscal policy on Britain, really does trump his net-zero zealotry
But maybe Miliband’s ambition to be chancellor, and his desire to inflict a deeply left-wing fiscal policy on Britain, really does trump his net-zero zealotry. Moreover, he has no doubt worked out that he could save face with the net-zero fundamentalists by letting his successor as energy and climate secretary announce the change of policy – once he has gone to the Treasury. Andy Burnham has previously said that he is ‘open-minded’ about new drilling in the North Sea.
Either way, the government is being driven towards new drilling in the North Sea by plain logic. To refuse to exploit the North Sea is not magically going to change the balance of Britain’s energy consumption: three quarters of our overall energy needs are currently met by fossil fuels. All it will achieve is to make us more reliant on imports, not least on the very ‘fossil fuel dictators’ Miliband says he wants to free us from.
It was revealed yesterday that the EU imported nearly ten million tonnes of liquified natural gas from the Yamal field in Siberia in the first half of this year. That is a source which Britain, too, is going to be forced towards as supplies from Qatar – one of the big sources of LNG – dry up as a result of the Iran war. Miliband’s policy of refusing North Sea development is in serious danger of lining Putin’s war chest. That is not to mention the environmental objections of imported LNG, which has a significantly higher carbon footprint as the process of liquification and gasification itself consumes around 10 per cent of the fuel.
Miliband has continued to insist that more North Sea production will not bring down energy bills for UK consumers because the fuel will just be sold on global markets at the internationally-set price. While you might possibly argue that in the case of crude oil, it is simply not true in the case of gas. Thanks to the greater difficultly in transporting gas, wholesale gas prices vary enormously across the regions of the world, depending on the local balance of supply and demand. More North Sea production will certainly have a downwards influence on prices because the transport costs can be reduced. The fuel should be availably quickly, too: the owners of the field claim that it could be producing 6.5 per cent of the UK’s gas needs by the coming winter.
For the moment, it is reported that Miliband is prepared to cede on the Jackdaw field but not the Rosebank field. The former is a gas field, the latter principally oil. While exploitation of Rosebank may not have a big impact on prices at the pumps, it would certainly bring in extra tax revenues.
(UKR)