Their quixotic approach to public relations continued when Cathy Nelson read out a passionate defence of one of the jailed protestors, her daughter Cressida Gethin, in which she remarked that young Cressie would now be missing her brother’s wedding as she will be in the slammer. In fact, aside from this unfortunate beginning, which we should put down to a mother’s annoyance that one of her children won’t be on show at a major family event, Nelson’s speech was rather good as any parent’s defence of their child’s noble, if misguided, actions should be. Nevertheless, on watching the speech, this viewer’s eyes were drawn to the top of Ms Nelson’s head where a pair of sunglasses perched. 

Whether they were expensive or cheap could not be ascertained but of one thing we can be sure, they were made of plastic. And what is plastic made of? Well, as the lobby group Plastics Europe tells us, plastics are “derived from natural, organic materials such as cellulose, coal, natural gas, salt and, of course, crude oil.” And oil was certainly involved in the fabrication of the microphone and lead that Ms Nelson used to broadcast her speech and probably her watch and necklace and possibly her shirt as well.

The point is not to suggest hypocrisy on the part of Just Stop Oil or the group’s supporters but to demonstrate that the crudeness of their campaign doesn’t help their cause. No-one, not even the most scrupulous hemp-wearing, yurt-dwelling hermit, can avoid oil. While oil is, as we know, mostly used as a fuel, it is everywhere in modern life and not just in sunglasses, smart phones, wind turbines and bottles. Oil is also a crucial ingredient in medicines, including aspirin, fertilisers, paints and other products for which no alternative to oil has yet been found. 

Natural gas is equally crucial for the day-to-day necessities that we all rely on: as an example of just how crucial it is, bread riots in Egypt, and subsequent government-funded subsidies which the government can’t afford, can be traced back to the 2022 jump in natural gas prices which had a massive knock-on effect on fertilizer prices.

So, as even Ed Miliband would agree, oil and gas are here to stay and Just Stop Oil, for whom this column, perhaps surprisingly, has plenty of sympathy, would surely do better to recognise oil’s ubiquity and tackle the world’s addiction to oil from the perspective of demand rather than abolition. They should be tackling how much oil we use, what journeys we are taking, how often we are flying, our efforts at recycling and all the other small steps we can take to reduce our dependence on oil. 

They won’t take this advice but the blunderbuss of Just Stop Oil won’t work. Nuanced, subtle, polite, intelligent campaigning will work and people will be receptive to it. If you want an example of how engaged people can be persuaded, look at how many voters in this month’s UK general election voted tactically right across the UK to the detriment of the Conservative party and the SNP. 

Just Stop Using So Much Oil doesn’t quite have the same snappiness of the current campaign but it surely has a greater chance of success than the present approach and will have the happy result that fewer activists will end up doing bird in His Majesty’s prisons wondering how earth it is that breaking the law on numerous occasions turns out to have more severe consequences than they thought possible.

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Alongside the high moral tone in Miliband’s response to Coutinho’s speech, there was included a phrase that New Labour loved to use back in the late 1990s when he accused Coutinho of having a “brass neck” in criticising his response. No doubt he will, like his New Labour forebears, soon be telling us that he “will take no lessons” from former Conservative ministers given their record in office. The return of these cliches is very much not to be applauded.

To be fair to Miliband, he did try, up to a point, to take a non-partisan approach and even managed to praise some Tories for their work in government but these were Tories whose views he approves of like Chris Skidmore and Lord (Alok) Sharma. He was even forced to agree, despite appearing to say much the opposite, that in offshore wind at least, the UK was in a relatively strong position. But while Miliband may partly acknowledge that he’s building on fairly firm foundations, he wants to do a lot more: a lot more onshore wind – which is largely pointless given the UK’s ability to build more offshore wind power generation that it can ever possibly need – and a lot more solar and, to that end, he has already approved the building of 1.3 GWs of solar farms in his first fortnight in office. In his speech, Miliband pointed out that ground-mounted solar used just 0.1% of land in the UK so far and that Britain lags far behind other countries in roof-top solar.

On these points, Miliband is surely right: solar is cheap, easy to install, easy to connect and, by using ever cheaper battery storage in tandem, can even be used when the sun isn’t shining. But again much of the groundwork has been done. If you drive west out of London on the M4, there are already many acres of solar panels taking up unloved land right next to the motorway and we can expect to see much more of this. Can you be a NIMBY when the panels are being built within five metres of the hard shoulder of a three-lane motorway? I doubt it.

Of course, Miliband reserved his highest self-praise for the establishment of Great British Energy (GBE) which this column has tackled many times before. As he put it, “I am extremely proud that this is the first Bill for decades that will enable us to establish a UK-wide publicly owned energy generation company.” 

The role of government in the energy sector is well-established globally. The vital nature of national grids and the cost and complexity involved means that the state has to be involved to a greater, and it is usually a greater, or lesser extent. But GBE’s mission is more than just being a quango to help others invest. As Miliband said in the House, “It (GBE) will invest in technologies such as nuclear, offshore wind, tidal, hydrogen and carbon capture, and ensure a just transition for our oil and gas communities. GB Energy will also oversee the biggest expansion of community energy in British history through our local power plan.” And yet, such is the cost and complexity of the energy sector that £8.3 billion of taxpayers’ cash won’t get GBE very far in that mission: so either Miliband will need more cash or GBE won’t fulfil its mission. It seems a safe bet that Rachel Reeves, having won one battle with Miliband over money, will win this one too.

Ed Miliband is a great survivor and a canny politician: he must be to have survived his election loss in 2015 and then, through hard work and graft, got himself back into cabinet in a senior job nine years later. His programme is all his own work – he really believes this stuff – and he’s earnest and serious about what he wants to achieve. Miliband is also partisan and pious which means his pleas for cross-party co-operation will mostly flounder but it’s possible his whole project will flounder. For all the excitement around approving solar farms, building onshore wind, doubling offshore wind and creating GBE, there was one four letter word missing from Miliband’s speech without which his whole programme is just a castle in the air. 

That word is grid and until he gets serious about transmitting all this power he wants to generate, Miliband’s plans will go nowhere. 

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The column has looked at the Great British Energy (GBE) policy many times and it’s no better now than it was before: suffice to say that the manifesto provides no clues as to why Ed Miliband is more qualified than anyone else to “shape markets” and “use public investment to crowd in public spending” in the energy sector. We can be certain that Tony Benn would be delighted by the prospect of such heavy-handed intervention. Thank goodness, it’s £8bn over the life of the parliament rather than the £28bn it used to be.

So the surprise is not that the GBE white elephant sails on but that the rest of Labour’s energy policy has become more incoherent: on the one hand, “Labour will maintain a strategic reserve of gas power stations to guarantee security of supply” but on the other hand, it will not issue “new licences to explore new fields because they will not take a penny off bills”. They also want to increase the Tories’ windfall tax and remove “unjustifiably generous investment allowances”. At the same time, Labour says that the “North Sea will be managed in a way that does not jeopardise jobs. And our offshore workers will lead the world in the industries of the future.” To which the only response can possibly be: “Can I have some of whatever you’re smoking?”.

This is not hard to critique: if you think that oil and gas is going to be part of the energy mix for years to come in the UK and you are going to continue using (and likely commissioning) new gas-fired power stations – bearing in mind that, on a dark, cold, windless night in winter, demand for power in the UK can get as high as 45 Giga Watts – why would you do everything you can to decrease investment in your own oil and gas fields by not issuing new licences and removing incentives to invest? 

Once you have successfully decreased investment, which this plan will certainly do, your “brilliant” workforce is no longer going to exist and so cannot take on these new jobs that you want to offer them. The contradictions across the policy are myriad and, again, speaks to a party that is far more doctrinaire than they have let on so far. Starmer and co just don’t trust the private sector and it runs through their energy policy like letters in a stick of rock. For Labour, energy is government business and the private sector can get knotted. We shall just have to hope Sir Humphrey can successfully water down its foolish policy because if he doesn’t, the North Sea will be moribund in just a few short years.

But Labour’s incoherence is also flippant: this perspective that opening new gas fields would not take a penny off bills is a good example. How on earth can that possibly be true? It smacks of a junior copywriter on the Labour team getting carried away with their own rhetoric. If an exploration company made a major find in the North Sea, it is possible that it might bring down the cost of gas (and therefore bills) by increasing European gas supply. It might not be much but the market is currently very tight so new supplies could, in theory, make a difference. Conversely, what we can say for certain is that, in a world where the UK continues to use gas for its baseload power, not having access to your own resources just a few miles of your coastline, will unquestionably put your bills up and make you wholly reliant on those same global gas markets that went haywire after Russia invaded Ukraine.

Labour’s energy policy has lots of good intentions and they have, as this column has said before, successfully identified many of the problems. However, today’s manifesto is poor stuff to the extent that, if you’re currently working in North Sea oil and gas, you should take this free piece of advice: it’s time to get moving on LinkedIn. 

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I was thinking of Lock and Richardson as, by mistake, I watched Richardson appear in a well-made Big Short spoof for the Labour party. The thesis of this very short film is that, well, Rishi Sunak was responsible for the Global Financial Crisis which is a bit of a surprise. Richardson’s script says that the hedge fund where Sunak was working in 2007 (they don’t name it but it was The Children’s Investment Fund Management (TCI) ) invested in “a struggling Dutch Bank called ABN AMRO” on the eve of the Financial Crisis which they “shouldn’t have touched with a bargepole”. Having bought a 2 per cent stake, the hedge fund apparently went around telling everyone that ABN was a terrible investment and should be sold as quickly as possible. Richardson then explains who should come along but RBS who spent billions on ABN, inherited lots of sub-prime mortgages and then went spectacularly bust. So, as the telling goes, Rishi got his money and then went off to California being “one of those bankers who made millions from a deal that helped trigger the financial crash and all at the expense of the British taxpayer.”

I have watched it a few times now and, besides lamenting the fact that a comedian I like has revealed his politics (and I could have guessed he is a Labour supporter, of course, but do we need it confirmed?), I think the Tories could release a video saying that Keir Starmer not only didn’t prosecute Jimmy Saville but also approved of and applauded his crimes and Labour wouldn’t have a leg to stand on.

This video is absurd.

First of all, TCI bought their stake in ABN AMRO because they were activist investors who wanted to break the bank up as a route to getting greater value for shareholders. This was not a struggling bank.

Secondly, they held a 2 per cent stake but the vast majority of shareholders had to agree with them to sell the business.

Nor does is seem likely that 2 per cent shareholder TCI forced RBS CEO Fred Goodwin and his board to make an overvalued bid for ABN.

I also don’t see how the same 2 per cent shareholder forced RBS shareholders to accept the deal. 

Additionally, the financial crisis and the subprime mortgage disaster came out of nowhere – that’s the point of the film that Labour is spoofing: a very small number of people had worked out what was really happening!

What’s more, we don’t even know what Sunak’s role within TCI and this investment was: he would have been a 26-year-old analyst at the time so it’s very unlikely he would have been anywhere near the decision-making on this.

Finally, by attacking Sunak and this investment, Labour is attacking TCI whose founder Sir Chris Hohn has made billions of pounds, most of which he has given away, hence why he has been described as one of the world’s generous philanthropists by Forbes magazine.

As it happens, I was on the very edge of the ABN AMRO deal as a very junior individual in a financial advisory firm. In the first half of 2007, a deal-making frenzy was at its peak and the ABN deal was no exception with Barclays being particularly fortunate that their attempt at a knock-out bid to buy ABN in April 2007 was unsuccessful and was blown out of the water by the RBS-lead consortium that secured the deal.

So we can say, for sure, that the video is rubbish, tosh, a pyramid of piffle but the video also reveals something about Labour: their distaste for financial services is visceral and unfortunate given how the tax base in the UK works. If I were Rachel Reeves, I would be disowning that video as quickly as possible. But there’s also another nagging thought: that the creative cretins within Labour that made this video don’t realise that Sunak and TCI were not running their own money when they invested in ABN. I always get the impression that Labour has so little understanding of the City that they don’t know the difference between personal investment and institutional investment. Anyone with half a brain knows that TCI were running money invested in their funds by pension funds, banks, insurers and others.

It’s perfectly possible – in fact it’s likely – that the Labour party pension scheme will have, in some shape or form, an investment in TCI themselves. Who knows? They may even have benefited from that clever investment in ABN AMRO themselves. 

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Labour’s energy plans aren’t completely awful and their focus within the policy on energy transmission and the national grid is very welcome but their stand-out, read it on the card, pledge to set up Great British Energy (GBE) is, as this column has pointed out before, a truly terrible idea. We don’t need to revisit the policy: it’s Bennite nonsense and won’t work. That’s not to say that there isn’t room for major state intervention in our national power system – there is – it’s just that it is better, quicker and more efficiently done through incentivising investment and state subsidies. But we can also learn quite a lot about Starmer’s Labour and the readiness for power when they talk about how they’re going to fund GBE and it’s not looking good.

Labour says that the setting-up of GBE will be funded by a windfall tax on North Sea oil and gas. This may surprise quite a lot of people as North Sea oil and gas producers are already subject to a windfall tax called the Energy Profits Levy. The Levy was imposed in the dying days of the Johnson administration in May 2022 by one Rishi Sunak when the Tories shot Labour’s fox by nicking this policy wholesale. The whole point of someone shooting your fox is that you need a new fox. This reality, however, appears to have passed Labour by.

Instead, they now talk about funding GBE through an increase in the Energy Profits Levy, something Labour describes as a “proper” windfall tax, which will increase taxes on profits in the North Sea by 3 per cent; from 75 per cent to 78 per cent. In announcing this, they haven’t realised that investment and production in the North Sea has already taken a hit from the Levy and that oil and gas prices, and particularly gas prices, have fallen since (but not because) the tax was announced. As an example, in the first quarter of this year, Shell’s realised gas price from its global operations was down 25 per cent on the previous quarter reflecting what has happened to European gas markets over the past 6 months. So whatever money they were banking on from their 3 per cent rise in the Levy has disappeared.

At the same time, they seem to have no understanding of what is actually happening in the North Sea. Lukanyo Mnyanda of the Financial Times published a long article earlier this month that explained the damage the Levy had done and made the crucial point that, as a declining hydrocarbon basin, oil and gas in the UK North Sea is now produced by a patchwork of smaller companies whose ability to swallow major tax changes is very limited. The FT quoted Chris Lewis of oil minnow Hartshead Resources, who said his company has delayed awarding contracts due to uncertainty about the tax regime: “That has a direct impact on jobs, on supply chain companies in the UK, and on receipts to the exchequer because if you delay our gas production, you delay us paying tax on it.” So, again, the increased Levy is going to pay for what?

The Levy looks even less clever when you discover that production from the North Sea is now 1.2 million barrels a day of oil equivalent (this number includes gas as well as oil), the lowest production since 1977, and is trending lower which also means less tax receipts. Offshore Energies UK (OEUK), the trade association for the UK’s 400 offshore industries and organizations, has more bad news. They estimate that the Levy has driven 90 per cent offshore energy firms to reduce spending in the North Sea, most notably Harbour Energy and Apache, and that a continued lack of investment will lead to production cuts of 80 per cent by 2030. 

So far, so moronic but this desire to tax the North Sea oil and gas industry for want of any better ideas speaks to a wider inconsistency that both parties seem incapable of recognising. Both parties have said that hydrocarbons, including oil and gas from the North Sea, will continue to play a large part in the UK’s energy mix for the foreseeable future; both parties want to make sure the UK is not at the mercy of foreign despots when it comes to hydrocarbon supply; both parties seem intent on taxing the North Sea oil and gas industry out of existence. They’re not the first UK politicians to do this – the industry has been buggered about by Healey, Lawson, Clarke, Brown, Osborne et al for years – but this time it feels different: that the golden (Brent) goose is finally being killed off; we – and Great British Energy –  will miss it when it’s gone. 

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Most pundits expect Rishi Sunak to go to polls in autumn of this year but surely those same pundits would not be surprised if he waited until the latest possible moment – 28 January 2025. This would have the double benefit for Sunak of giving the economy time to recover further (hopefully) and having 2022-25 in brackets after his name in lists of Prime Ministers forever after. If he can hold on until next year, he would join recent Prime Ministers Gordon Brown (2007-10), Theresa May (2016-19) and Boris Johnson (2019-22) as well as luckless predecessors, Spencer Percival (1809-12) and Neville Chamberlain (1937-40), in the three-year club.

So we’re stuck with Sunak for the best part of this year at least, especially as the right of the Tory party is off to the pub or defecting to Labour. To be fair to Sunak, he has shown that, for all his faults, he has plenty of admirable qualities: he is dutiful, diligent, hard-working and intelligent and we should hope that, now he is finally secure in his post, he will use those qualities to lay down a legacy of which he can be proud. Sunak’s recent attempts to ban smoking have shown that he is keen to make a permanent mark so, with this in mind, here are a few things that he could focus on through the rest of this year that could make a real difference in the energy sector.

First, for all my scepticism about nuclear power and in the spirit of Magnus Magnusson (we’ve started so we might as well finish), Sunak could start by trying to cut the Gordian Knot at Hinckley Point C. This should be the sort of project that Sunak would love. Lots of data, lots of spreadsheets, lots of dumb decision-making and cost-boosting alterations ordered by the government along the way. EDF thinks the plant will be operational by 2029 but this might drift to 2031. Sunak could make sure it’s the former.

Second, battery storage technology is going to be the missing link between renewables and the problems of intermittency (and, by the way, it’s this that Elon Musk will be remembered for, not Mars or his destruction of Twitter). The Department of Energy Security & Net Zero has done plenty of work on this but it would be a very good use of Sunak’s time to make sure they are being as imaginative and as forward-thinking as they can be. Do their plans take into account the very latest energy storage technology which is changing and improving week by week?

Third, Sunak could get into the unglamorous world of transmission (and a Starmer government would, alas for Sunak, be all too grateful for this) and accelerate the process of getting the UK’s transmission networks ready for Net Zero by 2035. The Electricity System Operator (ESO) and National Grid are doing plenty here but in November last year, the government replied to the Electricity Networks Commissioner’s report on accelerating electricity transmission network with 87 pages of comprehensive responses. It’s hard to think of a better place for our detail-oriented Prime Minister to throw his weight around and find out how much progress the energy department and its lightweight Secretary of State is making in this vital area. After all, you can generate all the electricity you want but if it can’t be transmitted then it’s useless.  

Fourth, we have increased gas storage in the UK since Russia invaded Ukraine to around 12 days, mostly through Centrica’s storage facility in the North Sea. However, we still aren’t taking our national energy security seriously enough. While our need for gas storage is less vital than other European countries given our ample domestic gas resources, that 12-day gas storage capacity dips to 7.5 days in winter. Could Sunak persuade the energy industry to take this to, say, 25 days? This is an achievement that he would be thanked for in the future.

This time next year, Rishi Sunak will most likely still be the MP for Richmond but he’ll have time once again to turn out for his local cricket team in North Yorkshire as he did while on the backbenches during the fleeting Truss administration. As all cricketers know, those long overs when fielding and trying to catch your captain’s eye can sometimes feel very long indeed and Sunak would hardly be human if his mind didn’t drift over what he did and didn’t achieve in office. If he wants those memories to be happy ones, there’s much he can do in the next six months. 

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Professor Piers Foster, the committee’s chairman said, “Scotland has laudable ambitions to decarbonise, but it isn’t enough to set a target; the government must act”. It is not a surprise that a nationalist government with one overwhelming policy mission struggles to develop and deliver policy in other areas; it is more surprising that they can’t see that performative government – the setting of targets that can never be reached alongside an absence of concrete actions  – harms their drive for independence by making them look so incapable. The reaction from opposition politicians (how the SNP must yearn to be back in the accountability-free world of opposition) and campaigning NGOs in Scotland was predictably brutal. Jamie Livingstone, head of Oxfam Scotland, was quoted in The Times as saying, “The Scottish government’s abandonment of its legal 2030 and annual emissions reduction targets is a reprehensible retreat caused by its recklessly inadequate level of action to date.”

Because of the lack of action, we say can, with confidence, that when Nicola Sturgeon set a target of Net Zero by 2045 because the Westminster government has a target of 2050, she had no sense of what would be required to meet the target. Even if Sturgeon had known, the problem is what is required is close to overwhelming and it is where those opposing Net Zero have half a point: that the global drive to Net Zero will require the greatest intervention and spending by government into everyday life for generations and no government anywhere – let alone the hapless Humza Yousef administration in Scotland – is being honest about what it will take. You only have to look at what Scotland needs to do to meet its 2045 target to realise the scale of the challenge ahead of them. The Climate Change Committee report spells it out: Scotland needs to double the rate at which it is planting trees, provide vehicle chargers three times as quickly and increase the roll out of heat pumps from 6,000 per year to 80,000 per year. Reaction subscribers can judge for themselves how likely they think any of that is either with or without government intervention.

Across the UK, reality around Net Zero is now biting. Labour’s criticisms of McAllan’s screeching U-turn follow Keir Starmer’s own screeching U-turn just a few short weeks ago as he realized that his party’s unworkable plans were sapping his credibility with key voters and providing the Tories with an easy attack line. The Tories themselves reversed their own climate pledges made by the king of performative politics, Boris Johnson, a few weeks before that. These reversals of policy are welcome because they reflect reality and no voter likes to be taken for a fool but the fact that the pledges were so easily made and so easily reversed – this stoush will be forgotten by Monday – also reflects a lack of honesty that infects so many areas of public policy. Let’s stop the boats but never discuss how we rely on imported cheap labour; let’s support Ukraine but reduce our own defence spending; let’s protect our beloved NHS but never ask whether the model works for a population that’s aging rapidly. Net Zero is no different: if governments across the UK believe that there is a climate crisis, that it’s the greatest challenge of our age and that we must be at Net Zero by 2050, then it’s time they fronted up and told us how it will be done and what it will cost because right now we’re living in land of unbuttered parsnips.

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A litre of unleaded petrol is currently weighing in at a substantial 149.5p. It hasn’t passed the 150p mark but it surely will over the coming weekend. Much as I may dislike it, our local petrol station is only reflecting what’s going on in international oil markets with prices hitting $90 per barrel earlier in the week and sitting today at just north of $89 per barrel. That’s high by recent standards where oil has sat – more or less happily – at $80 per barrel. Of course, a bit of a jump up or jump down at some point during the year should be no surprise – it happened in both directions last year – but $90 per barrel is an uncomfortable place to be especially if your day job involves worrying about inflation.

So what’s going on? Bank of America analysts increased their forecasts for oil prices yesterday and now believe that the market will peak at around $95 per barrel this summer – during the US’s driving season – before falling back in the autumn to give an overall average for the year of $86 per barrel for Brent crude. On the positive side, analysts put some of this down to “improving economic growth expectations”; on the negative side, some of the increase is down to “geopolitical turmoil” including attacks by Ukraine on Russian energy infrastructure.

Natasha Kaneva at JP Morgan concurs. Last week, she wrote: “At face value, and assuming no policy, supply or demand response, Russia’s actions [in reducing output] could push Brent oil price to $90 already in April, reach mid-$90 by May and close to $100 by September.” 

That would be bad news for all of us but Kaneva and her team think that is where the action will end: “The lesson from the 2022 energy crisis taught us that there are multiple levers that can quite effectively mitigate the impact of the high prices…Our view remains that given the US dollar strength and high borrowing costs, oil prices substantially above $90 can cause severe disruptions in the global oil demand…in turn resulting in lower prices.”

The elephant in the room is, as ever, OPEC+ and what it decides to do. The answer is that the OPEC grouping will be as pragmatic and as self-interested as ever no matter how paradoxical that might seem. Saudi Arabia remains at the core of the cartel and will remain entirely immune to pressure from the US to increase their output. Joe Biden cares more about US consumers than oil company revenues and has consistently been rebuffed by Mohammed Bin Salman every time he has asked Saudi to raise its output. This impunity was demonstrated in the first quarter of this year when OPEC+ under Saudi and Russian influence moved swiftly to make sure that there was no surplus in global oil markets. Consequently, it’s no surprise that as demand increases towards the middle of the year, the oil market is beginning to fall into deficit and this means that oil prices can only go one way.

The good news is that Saudi Arabia and its OPEC+ partners know that Kaneva and her colleagues are right: push the market too hard with oil prices and you’ll simply destroy demand. We may be in a period of economic recovery but there’s nothing like high commodity prices to kill off fiscal optimism. There’s also no need to be greedy because there’s room for everyone to enjoy themselves in this market. After all, the US Energy Information Administration is predicting punchy increases in global oil demand of 1.4 million barrels of oil per day in both 2024 and 2025 which suggests the fabled Peak Oil is still some way off and closer to 2040 than 2030, in my view.

What does all this mean for Reaction readers? From a high starting point petrol is going to get a little bit dearer over the course of the next few months and, alas, the days of sub-150p petrol in Fulham won’t return anytime soon. 

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She continued: “So if you’re saying that we are going to have this unfeasible target, which no other major economy would have, what you’re ultimately sending out to the world is that we’re willing to pay whatever price you will put to us, which will see costs implode, you also don’t have time for the supply chains here to develop, which means you’ll be reliant on China…So that means that what Labour are putting forward is a “made in China” transition, but I want one that’s made in Britain.”

Aside from the fact that Coutinho doesn’t seem to understand the meaning of the word “implode” (indeed, it would be great if costs within the energy sector did implode), readers may recall that wanting an energy transition made in Britain is very similar to the Labour Party’s policy of magicking up competitively-priced renewable technology in the UK through the creation of an Uber-Quango called Great British Energy. More recently, and as previously covered, the Labour party has now begun the process of growing up when it comes to energy policy and it was hoped that the Conservative party would continue down their current, reality-based path.

Alas, Claire Coutinho, despite her academic (Oxford) and business (Merril Lynch) background, which the Telegraph is careful to point out, does not appear to be a serious person. To claim that Labour party policy would place the UK in geopolitical danger is to ignore the obvious fact that – as she almost points out – this is the case already. 

The UK is a leading player in the international renewable energy market because of our location (readers may have noticed that it’s often quite windy in the Eastern Atlantic) and because of government policies, including vast subsidies, that Coutinho’s party has implemented over the past 14 years. However, we can be absolutely certain, and Coutinho knows this, that the overwhelming majority of wind turbines installed in recent years in UK waters are wholly built in China and the same goes for solar panels. Why? Because as Coutinho herself says above, China is the “one dominant player” in renewable technologies and if you want technologically sound wind turbines and solar panels that are cheap and won’t whack up the cost of your project and thereby energy bills, you’re obliged to head to China. As a good capitalist, Coutinho must know that this is the reality of modern supply chains.   

Furthermore, aside from trying to invent a reason to be paranoid about China in the future rather than right now, Coutinho’s argument is also factually wrong. While she is right to highlight China’s domination of global rare minerals production, she is wrong about battery technology where Tesla (US) and Fluence (EU / US) are perfectly capable of looking after themselves as they battle for market share with China’s Sungrow and Huawei. Even more importantly, the battle within battery storage is less about fabrication but much more about technological advances. If Tesla or Fluence can win that battle and produce better, longer-lasting batteries than their rivals, then they will win. 

Because this is about technology rather than industrial capacity, this could be a productive place for our government to invest rather than trying to take voters for fools. Is it really possible that Coutinho and Conservative Central Office really think that the Great British public are so stupid that they will easily be scared into voting Tory by a difference of policy that amounts to one party having an aspirational Net Zero target of 2030 versus the other party having a Net Zero aspirational target date of 2035?

It’s an election year, so let’s give Coutinho the benefit of the doubt – that she was doing her boss and CCO’s bidding for the sake of a decent Easter weekend headline. But let’s also lament the fact that it’s come to this: a secretary of state making arguments that she knows to be false, and not for the first time, rather than, you know, getting on with the job in the remaining months left to her. 

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Looking at the comments leaked to His Majesty’s Daily Mail, Coutinho will apparently say: “Without gas backing up renewables, we face the genuine prospect of blackouts… There are no easy solutions in energy, only trade-offs… If countries are forced to choose between clean energy and keeping citizens safe and warm, believe me, they’ll choose to keep the lights on. And so, as we continue to move towards clean energy, we must be realistic.” 

Well, we can certainly give one cheer for this rhetoric. Whatever else we might accuse this government of, this is a welcome statement of the bleeding obvious. Even Ed Miliband, Labour’s shadow energy secretary, accepts that there is a role for gas even in a net zero economy and can hardly go in studs up on the government’s change of stance. This is made clear by Labour’s equivocal response to the news, on the one hand, telling the Daily Mail that gas, at least in some form, will be required for decades but, on the other, telling the Financial Times that the government’s position is “desperate nonsense” without saying why this is so. 

Labour’s NGO outriders will be similarly hamstrung both by the fact that they cannot suggest any credible solutions to the intermittency problem of renewable power or that the UK’s position both in renewable power and emissions reduction remains top of the class. Only this week, Carbon Brief announced the surprising news that the UK’s carbon emissions are now the lowest they have been since the reign of Queen Victoria. 

In the same announcement, Carbon Brief said that burning fossil fuels met a record low 33 per cent of the UK’s electricity needs in 2023 while coal-fueled power was both at its lowest ever and remained on track to be switched off later this year. For context, the situation right now (according to iamkate.com) is that, over the past week, renewables have provided around 38 per cent of the UK’s power; natural gas has provided 30 per cent; the rest has come from nuclear (15%), biomass (7%) and imports from France and their nuclear fleet. This has led us to the improbable situation that the UK electricity sector is now responsible for less emissions than farming. 

So far, so good. But as today’s announcement suggests, it’s what’s next that’s the real problem. How much further can this government – and the likely incoming Labour government – go on the journey to net zero if we accept that the last steps are always the hardest and, as Coutinho makes clear, governments and their voters will always prioritise their own needs over anyone else’s. Luckily the answer is easy in the UK’s case: carry on doing exactly what you’re doing right now which is to blend a mixture of clear-eyed pragmatism (today’s announcement) with making the very best of the UK’s natural resources (wind farms everywhere) while waiting for the engineering geniuses to create an effective battery system that can bridge the intermittency of renewables. 

That last piece of the puzzle will be very tricky and it’s not the simple solution that it sounds as anyone who has a combined solar and battery system in their home will tell you. Battery technology has advanced tremendously in recent years (thank you, Elon Musk) and is moving at pace but it still has a very long way to go to become the full solution we want it to be. There’s also what we might call the Conway problem (after Sky News’ Ed Conway who has highlighted this issue) around the use of specific metals within batteries. 

There are other options available to Britain in its attempt to wean itself off of fossil fuels. The most promising is the Moroccan-UK power project which would see 3.6GW of reliable wind and solar energy a day travel from Morocco to the UK via 4000km (2485 miles) of sub-sea cables. But even this amazing and ambitious project – and it really is – cannot provide guaranteed, constant power in the same way that gas and nuclear power stations can. And this, of course, is the conundrum that today’s announcement and Labour’s response recognises: we’re living in a (partly) fossil-fuelled world and that won’t change any time soon. 

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In fact, Germany and other European countries, including the Baltic States, simply paid any price to make sure that they were stocked up for the 2022-23 winter and then went looking globally for international gas supplies. Markets being markets – and sanctions being sanctions – the response to this change in demand was met and led to a collapse in sales for Russian companies. This means a lot less money for Vladimir Putin and a massive rise in sales for US natural gas producers. This has led, with the help of another very mild and very windy European winter, to a glut and a gas price that now sits at 58p per therm. That’s roughly two and a half times lower than the 52-week high and is not so far above the long-term norm pre-Covid of around 50p/therm. There’s no cavalry coming either: incredibly, according to ICE, natural gas in winter 2025-26 is now trading at 75p/therm. Compare that to the 600p/therm wholesale price paid in August 2022. 

All this means that Russian companies can no longer really access European markets (their share has gone from 40 per cent to 8 per cent). They have no leverage now over European gas prices except via state-sponsored sabotage and they will never be able (or allowed) to access European markets in any meaningful sense ever again. No wonder then that The FT reports that the biggest Russian oil and gas company Gazprom has “ceased to be profitable, and that net losses could hit one billion roubles by 2025.” 

Any new markets that Gazprom wants to get into will require massive investment in infrastructure by Gazprom and any increase in sales that results will get nowhere near filling the hole left by Gazprom’s former customers in the West. The reality is that Putin has, through spectacular miscalculation and characteristic arrogance, managed to hand over the Russian gas export market to the US and, believe me, the Americans make plenty of money at 58p a therm, as indeed Russia would have done. I doubt the Americans can believe their luck.

So what can we expect for the rest of the year? The gas price is currently at a three and half year low and in February which is definitely not when you would expect gas prices to be so low. This means the price is likely to be very sensitive to any massive cold weather systems that blow up in the US or Europe so we can expect a shift higher at some point in the next few weeks. There’s also a strong sense that this is a market looking for a bottom which it must hit soon. 

However, the longer-term outlook for this year is much more positive. Putin’s gamble has led to oversupply and the price has reacted accordingly. At the same time, we are heading into spring and summer in the Northern Hemisphere when we would expect natural gas demand to be at its lowest. This means that major energy suppliers will be looking to hedge their production for next winter at bargain basement levels and gas producers will be nervous that mild weather and the supply glut continues perpetually. This means lower bills and lower inflation: Cornwall Insights reported last week that they are expecting the energy price cap to fall in April from £1,928 to £1,635 – a drop of 15 per cent. 

There are vanishingly few reasons to be thankful for Vladimir Putin but lower household energy bills really is one of them. 

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Here’s Gary Smith from the GMB union in The Spectator last year on decarbonising the national grid by 2030: “I don’t even worry about it, it cannot be done. The National Grid can’t get [undersea] cables. There are four suppliers of cables in the globe. They’re all booked out to 2030.”

But commissioning undersea cables is just one reason that decarbonizing the national grid can’t be completed by 2030 and a serious policy unit within the Labour Party would have known that. Indeed, they could simply have looked out the window on a dark and dank winter’s day and asked themselves what they think would likely be the main power source on a day when the wind doesn’t blow and the sun doesn’t shine? 

But they could also have asked themselves why creating a publicly-owned green power was the answer to the problem they were trying to solve. It’s hard to avoid the thought that policy wonks started from the perspective that state-owned-equals-good and then looked at publicly-owned European power companies like EDF in France. Having liked what they saw, they didn’t do even the most basic due diligence as to why those European companies are publicly owned – and the answer, especially in EDF’s case, is not encouraging.

Reading the policy again, it’s still surprising how much of what Labour proposes, and note that they’re still proposing this plan as the way forward for energy in the UK, is based on wishful thinking; a high-cost Field of Dreams type of “if you build it, they will come” approach to a complex problem. They also start from the unhelpful perspective that everything in the UK has gone to the dogs. True in many parts of the public realm for sure but not, as it happens, in the energy sector where the Tories, by accident or design, will leave a legacy that Labour could very easily build on and take the credit for.

It doesn’t help that NGOs loathe the Tories too with Mike Childs from Friends of the Earth telling the FT this morning that the UK “is already lagging behind other countries in the shift to a new low carbon-economy.” No doubt there are some metrics where this might be the case but the uncomfortable truth for many on the left of the political spectrum is that the UK remains a global leader on climate change. 

As Greenpeace points out, the UK will phase out coal power this year versus Germany’s target of 2038. Over the past year, just 35 per cent of power in the UK was generated by fossil fuels. So for Labour, this means continuing the Tories’ approach to wind farms, to solar, to the UK North Sea and to subsidising and carefully selecting those projects that really might make a difference like Tata’s 40 GW battery factor in Somerset. And that subsidy is a good example of where Labour needs to realise, contrary to their interventionist inclinations, that the private sector is where the action already is. Government can, should and does help this most critical of sectors but, as Labour’s dog’s breakfast of a policy shows, it’s best left to the experts.

Starmer has shown throughout his time in office that he can be the grown-up in the room when he chooses to be. He’s done this today by axing this $28bn spending commitment that was clearly making him and Rachel Reeves nervous and nauseous. But his next step should be to junk his party’s entire energy policy and start again from scratch and this time Starmer needs to make sure that it’s done properly. 

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Whether this happy state of affairs will continue into the winter is, as yet, unknown, but the ANC government will be relieved. There’s no better way to ensure that you will be kicked out of office than failing to provide the most basic of services to the electorate and, after all, it’s election season in South Africa with a general election due in the first half of the year. Six months ago, the ANC would have felt very queasy about their chances; now it seems possible – at the very least – that they will hang on to their much-prized majority at the ballot box. It’s a majority that they desperately need too: without it, they will be forced into coalition with either the quasi-communist, Mugabe-inspired Economic Freedom Fighters (EFF), led by the unlovely Julius Malema, or the Democratic Alliance (DA), led by John Steenhuisen, which many ANC voters see as a white man’s party. ANC leaders, especially President Ramaphosa, will know that selecting either party as a partner in a coalition would likely lead to the implosion of the ANC.

So Ramaphosa has reason to thank his Minister for Electricity, Kgosientsho “Sputla” Ramokgopa. Appointed in the middle of last year to grip the load-shedding crisis, Ramokgopa is the driving force behind South Africa’s improved situation. He came into office with precious few executive powers but has performed so well – mostly by identifying where the problems lay and then talking about them openly – that he has recently been granted very significant powers to instruct Eskom, the failing national utility, wherever he thinks they are falling short. And it is Eskom that’s the problem: poor management, spectacular corruption and blatant misconduct has simply eaten out the insides of what was once a high-performing company and led it to insolvency. 

While he has had plenty of success so far, there are other hurdles for Ramokgopa to surmount not least vested interests that will be hard to dislodge: Gwede Mantashe, the powerful Minister for Energy, wants the power system in South Africa to rely on fossil fuels to appease his coal-mining power base while Pravin Gordhan, the equally powerful Minister of Public Enterprises, who is responsible for Eskom, will fight very hard to maintain his influence over the state utility.

Ramokgopa’s success, then, is against the odds. Most people, including me, thought that he would fail when confronted by myriad vested interests within the South African government. The fact that he has succeeded tells us something about his personal qualities but also the depth of the crisis that South Africa faced – the idea that even the most embedded vested interests realised that something had to change. 

But those embedded vested interests haven’t gone away and they haven’t stopped damaging South Africa. Every Capetonian I met last week was keen to stress that Cape Town, and especially its richest suburbs where I was lucky enough to be staying, is a bubble that tells you nothing about the real South Africa where failing infrastructure, deep-rooted dishonesty and horrific criminality are just things that South Africans have to put up with every day. This is why the South Africans I spoke to seemed unsure about the outcome of the upcoming election: all of them agreed that the improvements in electricity supply had helped the ANC’s prospects; all of them agreed that President Ramaphosa is the best of an ordinary bunch; all of them agreed that the ANC desperately needs a taste of what it’s like to sit on the outside looking in. As it stands today, however, it looks as though Sputla Ramokgopa has saved the ANC’s bacon – at least this time around. In 2029, who knows? 

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Even so, President Joe Biden said that he was “very concerned” about the effect [of instability in the Middle East] on oil prices and added, “that’s why we’ve got to stop it.”

It’s no surprise that Biden feels this way. His battle against Donald Trump now rests apparently on persuading people that Bidenomics is a thing, a success and that it is under threat from Trump but Biden will know that a renewed bout of inflation will kill that strategy stone dead. 

However, as things stand today, both Biden and Bailey have nothing to worry about: at the time of writing, Brent is trading at $79/barrel. This is lower than it has been for almost all of the past six months, which included a brief high of $97/barrel at the end of September 2023. The days of $100 oil, which at one point seemed as if they would go on forever, seem far behind us with that level only tested once (in 2022) since the first half of 2014. (In passing, someone will, one day, write a history of the autumn 2014 oil price crash which has had some very profound economic effects most of which have been missed).

So what’s going on? Most importantly, oil markets are about fundamentals. Even if the oil price had spiked due to Middle Eastern unrest, the spike would have unwound itself pretty quickly as the market adjusted. Geopolitically-driven spikes in the oil price are like snow in June: they melt away fast as the fundamentals assert themselves. 

In this case, the fundamentals are clear: there’s usually plenty of spare capacity in the system at this time of year as Americans and Europeans hunker down for the winter – driving season in the US from May to September is a massive drive of global oil demand; global demand is slowing as interest rate hikes finally begin to bite and slow economies down; OPEC and its allies have a very good handle on the demand-supply balance right now. If the action was to switch from the Gulf of Aden to the Persian Gulf, it’s possible that the situation could change but, again, this would be short-term.

As we have seen with European demand for Liquified Natural Gas post-Putin’s invasion of Russia, the market has simply moved to new sources and with no negative effect on the price at all. It’s not right to say that the world is awash with oil but there’s plenty of it to go around right now: after all, for almost all of the past three years, the price has hovered around $80/ barrel and that, it turns out, is a price that suits everyone, including OPEC.

But maybe there’s another factor at play and one that’s staring us in the face. The International Energy Agency has just published its 2023 review and the statistics are extraordinary. The world added 500 GWs of renewable energy capacity in 2023 – the equivalent of over 10 UK National Grids – and is double the capacity that was added in 2022. In 2020, one in 25 cars was electric; this figure is now one in five. More than $1 billion per day is being spent on solar energy while the cost of solar PV modules dropped 50% in 2023, albeit off a high base. 

Carbon Brief noted in their analysis of the IEA’s report that, “Over the six-year period 2023-2028, an additional 3,684GW of renewables is expected to come online under the IEA’s “main” forecast. This is double the current total of renewable capacity installed globally.” No wonder then that the IEA has been talking about peak fossil fuel usage occurring within the next five years; no wonder too – perhaps – that the oil market is just beginning to ponder when the music might stop. 

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There is, however, one caveat: we may see a natural gas glut this year which would push prices down to pre-Covid levels which really would be a massive relief all round and a spectacular demonstration of Vladimir Putin’s strategic ineptitude. Among everything else, he’s managed to gift his share of the world’s LNG market to the US. Somehow I don’t think this is what he intended when he invaded Ukraine. What a putz!

My Mystic Meg credentials have been further burnished by my mid-2023 observations around Keir Starmer’s £28 billion green energy plan which have been proven correct: a policy that was never remotely serious is currently being carefully smashed to pieces as it slams into political and economic reality. And the irony is, of course, that it’s Labour itself that’s doing the smashing as they talk about what the £28 billion actually means and when it might actually be borrowed and spent.

This was utterly inevitable. Removing gas from the UK’s energy mix by 2030 is completely impossible for a number of fundamental reasons; building wind turbines and solar panels in the UK would be commercial suicide; carbon capture and storage technology remains at the starter’s gate. I could go on but the collapse of this policy is concerning for all of us as it speaks to a lack of due diligence and attention to detail that was obvious to anyone in the energy sector. I mean, who on earth are Starmer and Miliband talking to in the sector? There are plenty of Labour-supporting people within the energy industry and vast amounts of policy expertise available to Labour, not least in the unions who have plenty of credible insights both into what’s going on within the industry and what the industry thinks needs to happen yet. Ask the workers, Sir Keir, and you might learn something.

After all, at heart, Labour’s policy goals make sense, although I know plenty who will disagree with me on that. The Labour party has successfully identified the correct destination, but the route they have so far chosen to get there felt as if it was designed by Tony Benn. An interventionist, state-driven, debt-funded exercise which will, fortunately for us, never get off the ground. Something that has been relegated to the “second half of the parliament” is not going to happen in any meaningful sense. As I say in the Giga Watt household: “Yes, children, we will go to Disneyworld on holiday but it’s more likely to be in the second half of this Parliament.” See?

So what will Labour do instead? Well, as discussed, they still have credible and urgent policy goals that they will want to meet but, as they have admitted, have no money to meet those goals. However, some readers will recall that Tony Blair also had no money when he started out in 1997 – remember Ken Clarke’s spending plans that Blair pledged to stick to? – but in his first two years in office he did plenty of things that changed the face of this country, yet they cost very little. 

Starmer may well feel and, frankly, should feel that he can do much of the same: that means fixing restrictive planning laws, implementing consistent taxation across the sector that potential investors can trust, carefully introducing incentives that will drive growth, recognising the massive skills base that we can benefit from and, this may stick in Labour’s craw, building on the inheritance that the current Government is going to gift them both in terms of the progress this country has already made and the policy framework (which I have lauded before) that they have put in place. To corrupt the old Irish saying, on asking for directions on what to do next, they won’t go wrong if they’re happy to start from here. 

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Who knows what solution they might come up with? An unpopular Venezuelan President has forced his opponent to the negotiating table over the result of a referendum he can never enforce: if Maduro wanted to invade Guyana, he would have to do so via Brazil given the impenetrability of the Guyanese jungle so it’s hard to see how this helps Maduro either domestically or internationally. It certainly hasn’t impressed the Americans who were quick to make common cause with Guyana through “joint manoeuvres” in Guyana’s airspace. Of course, that common cause is motivated  – at least in part – by Exxon and Chevron’s ownership of large stakes in Guyana’s offshore oil fields and oil is at the heart of everything that is going on in Guyana right now.

There had long been suspicions that there was oil off this little corner of South America but it was only in 2011 that these suspicions were confirmed when exploration specialists Tullow Oil made an extraordinary discovery in the Zaedyus well off French Guiana. Tullow was a FTSE 100 company at the time and their shares went up 19 per cent on a day when the wider FTSE 100 was off 2 per cent. It was an amazing find and based on the idea that if there was oil offshore West Africa, there should be oil off the coast of South America because the two continents had once been stuck together. Despite this epochal success, Tullow and its partner Shell couldn’t follow up the Zaedyus discovery – and they spent a billion dollars trying to do so – but the idea that there should be oil on these shores had stuck. This is what led Exxon along the coast into Guyana and in 2015 they made the first of their mega-discoveries.

Since then, Exxon has followed up its initial success with a string of further discoveries and in 2020 they began production. The numbers are vast: 11 billion barrels of oil have been found and production will be 1.2 million barrels of oil a day by 2028 and that’s just the start. While there have long been suggestions in the Guyanese press that Exxon is somehow doing Guyana over, this isn’t the case. The contracts are entirely in line with what you’d expect in licences in areas where there has been no history of oil discoveries or production. Exxon took all the risk and they get plenty of the rewards but so does Guyana: by 2030, the Government of Guyana will recoup $10 billion per year in oil revenues. No wonder President Maduro wants a slice of the action; no wonder the US wants to stop him.

It’s hard to underestimate just what a change oil is bringing to Guyana. This is a country of just 800,000 people and most people think that’s an overestimate because so many Guyanese have, until now, headed overseas and to the US, Canada and the UK in particular. And it’s a divided society too with the population evenly split between Afro-Guyanese (descended from the slave population) and Indo-Guyanese (descended from indentured labourers) with a small population of native Guyanese (around 10 per cent) providing something of a balance between the two. 

This is a society in which never the twain shall meet: in the capital, Georgetown, there are very clear areas which are Indo-Guyanese and others which are very clearly Afro-Guyanese. The Guyana cricket team, part of the West Indies, is one of the few areas where both parts of the population come together providing such legends as Lance Gibbs, Sir Clive Lloyd, Rohan Kanhai, Shivnarine Chanderpaul and Alvin Kallicharan. As with many small countries, there’s always prejudice about the neighbours: the local media love nothing more than a gangland or mobster killing and you can be sure that those same mobsters will have connections to Guyana’s fellow West Indians in Trinidad who are regarded as the pinnacles of bad influence.

As for politics, currently the Indo-Guyanese are in the political ascendancy with 43-year-old President Irfaan Ali taking office following a controversial election in 2020 which saw Afro-Guyanese President David Grainger leave office after a protracted electoral dispute. Former President Bharrat Jagdeo (in office from 1999-2011) is one of Ali’s vice-presidents and, while many were concerned given his performance in office, that his influence would be corrupt, indications so far are that the Ali government is genuinely making an effort to build a better future for Guyana through a Norwegian-style National Resource Fund. 

This has much to do with the microscope under which Guyana finds itself. The US, EU and UK all expanded their missions in Guyana after the discovery of oil and are taking a close interest in all matters Guyanese. In 2020, the UK High Commissioner at the time, Greg Quinn, played a leading part in persuading President Grainger that clinging to office was both unjustified and counter-productive: Quinn’s appointment as an OBE was the very least he deserved. This beefed-up presence will be an influence for the good. Quinn and his fellow diplomats were right to intervene – Grainger was making a fool of himself and of Guyana and he knew it. But it’s an influence that Venezuela, with their agreement to work towards a compromise with Guyana, have clearly recognised. Whatever comes out of these talks between the foreign ministers, the geopolitical reality of Guyana’s position will be the only factor that counts. President Maduro of Venezuela may have hoped he can walk right in, but it looks as though he will face serious international opposition.

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The BBC headline has it right: “COP28 deals calls for global transition away from fossil fuels for the first time.” Make no mistake: this is a big move and a big change. Of course, as was made clear to the delegates, fine words butter no parsnips – it’s all down to implementation. But this is a fundamental shift and one that could only have happened at a COP located in a petro-state – perhaps, because they were planning to make such concessions all along?

Who knows if the stoush around the weak language around fossil fuels over the weekend was a set-up (and, to be clear, I think there’s little doubt that it was) that allowed the UAE and the much put-upon COP President, Sultan Al Jaber, to show just how tough they could be in negotiations with the Saudis and their Gulf allies? What matters is the outcome, and the outcome is a very firm foundation that future COPs will build on. It’s not hyperbole to say that this is the biggest step forward that the world has taken at COP since Paris because what many western-based observers fail to realise is how far ahead countries like the UK are, both psychologically and in terms of infrastructure, on the realities of climate change and what’s required over the next 25 years. 

The NGOs and others will bemoan the fact that the phrase “phase out” was not used about fossil fuels. They’ll say that the use of “calls upon” when asking countries to look at their fossil fuel use isn’t enough but they should look at the principle of a loss and damage fund that was agreed at COP27 last year and then look at what’s been achieved and committed to this year. As a result, there can be little doubt that future COPs will agree to phase out fossil fuels, perhaps even as soon as next year. However, the NGOs are right to say that today’s agreement is not perfect and it’s no use pretending that it is. John Silk from the Marshall Islands said: “ I came from my home in the islands to work with you all to solve the greatest challenge of our generation. I came here to build a canoe together for my country…Instead we have built a canoe with a weak and leaky hull, full of holes. Yet, we have to put it into the water because we have no other option.” But, as Silk will know, COPs are all about compromise: there’s no other way to get 200 countries to agree to a single text which means no one will ever be entirely satisfied.

But it’s clear that the petro-states in the Middle East are relaxed about the language around fossil fuels. So why is it that they’ve made concessions that they’re entirely happy to make? You only have to look at what the Saudis are building at Neom, in north-eastern Saudi Arabia, to realise that their plans for a post-oil economy are well underway. At the same time, they know all too well that, as was said somewhere else recently in a totally different context, that the end of the oil industry is “a little cloud no bigger than a man’s hand” today so their days of earning mega-bucks from oil are a very long way from being over. This speaks to a pragmatism that should have been obvious to everyone from the start: why would the UAE – surely with the acquiescence of their neighbours – agree to host a COP, with all the obvious brickbats that would come with it, if they weren’t committed to making a fundamental change and one that would be remembered? 

For all his faults, so expertly teased out over the past weeks by many observers, Sultan Al Jaber will now be honoured as the COP President that got the transition away from fossil fuels agreed for the first time. There are very few observers that would have predicted that when he was appointed but really, they should have done.

Global media, with all their resources, cunning and experience, have gone after Al Jaber and have drawn blood. And they were always going to – the contradiction of his dual role was always too great to allow him to pass through COP28 unscathed. He has also been a victim of what The Sunday Times identified as a new trend at COP – that it’s become the new Davos: a place to make friends, have a good time, enjoy some winter sun and do deals. As a result, we have seen two main criticisms of the COP President – that he has used COP to promote ADNOC and that he doesn’t really believe in the science of climate change.

This has lead to today’s coverage that has seen a thin-skinned Al Jaber angrily refute both allegations and especially the latter. There’s little doubt that some of the criticism of Al Jaber has some fairly ugly prejudice behind it but it’s the sort of prejudice that the Guardian and others excel at. Being a rich and successful Emirati means that generalisations can be made about you and how you must think without fear of anyone suggesting that you might be, I don’t know, a touch racist? Either way, the response this week by Al Jaber has shown that the criticism of him has stung and has forced him into making statements he may not have thought he would have to make. 

He was quoted by the BBC as saying “I have said over and over that the phase down and the phase out of fossil fuel is inevitable… I will say it very precisely. Looking at scenarios in which global warming is limited to 1.5 degrees with no or little overshoot, by 2050, fossil fuel use is greatly reduced, and unabated coal use is completely phased out.” This perspective from Al Jaber is uncompromising and, as, cough, your faithful correspondent predicted, will likely lead to a more radical conclusion to COP than most would have thought possible. 

By using expressions like “phased out”, Al Jaber is placing himself squarely in the EU camp of climate action versus the more “take it slow” Saudi camp and this will matter when it comes to the final negotiations. Brace yourselves, then, for a COP that matters because, no matter what anyone tells you, what is agreed at one COP does flow through to the next. Last year’s loss and damage fund looked like a damp squib but it’s all change this year. Having conceded the principle at COP27, developed economies have now pledged half a trillion dollars to the fund at this COP and it’s only going up. 

So, watch this space – it’s going to get testy and tasty in Dubai over the next ten days and I’m betting on team Al Jaber. They have no choice now: COP28 has to be a success and that means a narrower future for fossil fuels than ever before. 

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If I sound cynical, that’s nothing compared to most people’s expectations of COP28. Holding a COP in one of the world’s most committed producers of oil certainly feels like a provocative move and NGOs globally responded entirely as expected. Back in September, 180 climate activists wrote to Le Monde in unsurprising terms: “we call on public authorities, NGOs, organizations, scientists and business leaders not to support or condone this deceptive event being staged in a country that thrives solely on the extraction of fossil fuels, and whose public roadmap in favour of these energies should give us cause for alarm.” However, there’s a growing, grudging consensus that maybe the activists have got it all wrong and COP28 may be a good deal more profound that was initially forecast. Why?

First, the criticism of Dubai and the wider UAE has stung but it has also worked. The UAE wants and needs this conference to be successful and meaningful. If it’s not, there will be plenty of people lining up saying that it was a joke to hold the conference in Dubai and they’ve been proved right. So there’s plenty of pressure on and within the UAE to deliver. They didn’t appear to help their cause by appointing Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company (ADNOC) since 2016, as President of COP but Mr. Al Jaber has proved a tougher and more progressive leader of COP28 than most were expecting. Even a lengthy profile of him in the Guardian failed to draw much blood with veteran environment correspondent, Fiona Harvey, noting that Al Jaber, “…has an answer for every question, delivered with rapid-fire enthusiasm, thick with detail, facts and figures. He’s constantly in motion, leaping up from the table to the window, to point out his electric car outside; leaning forward over the coffee table, jabbing the air for emphasis.”

Seeing Al Jaber in action, it’s hard not to think that putting the CEO of a major company in charge of COP28 – no matter what the company actually does – might be wiser than Boris Johnson’s decision to appoint Alok Sharma, a doughty plodder from Reading, as the COP supremo when the conference was held in Glasgow two years ago. But Al Jaber has a job on his hands: at COP27, 80 countries pushed for language agreed on coal at COP26 to be expanded to all fossil fuels; you can bet that this will be back on the agenda and, for all his agility and ability, how is the CEO of one of the world’s biggest oil producing companies going to deal with this particular googly?

Second, the Glasgow and the Sharm el-Sheikh COPs were damp squibs so it’s time for a more profound COP. Glasgow was a dud because in late 2021 the UK was about the only country in the world that seemed to want to move on from the pandemic. Remember the guff around Freedom Day in the early summer of 2021? Well, the rest of the world hadn’t got to the point of Johnsonian breezy indifference to Covid that we had by November 2021. Of course, by then, the Johnsonian breezy indifference to Covid regulations that he himself had set had broken in the UK and international press which meant that Johnson’s eye – as so often  – was off the ball. Truthfully though, not much happened and, because of Covid, was never going to. The same was true in Egypt last year where some points of principle around climate finance and coal were conceded but otherwise it was a conference marked by indifferent facilities and a host who wondered why its guests talked so much about human rights.

Third, this profundity will be driven by some high-profile interventions. Our own King Charles III will deliver a keynote speech (and, boy, do those that criticised his views on the environment 20 or 30 years ago look damn silly now) and Pope Francis I will also be in town. But look out for Prime Minister Mia Mottley of Barbados who was the breakout star of COP26. She’s continued to be vocal and loquacious about the need for developed nations to assist less developed nations with cold, hard cash in the battle against climate change. And she has a new partner by her side: the steely President William Ruto of Kenya who hosted the Africa Climate Summit in Nairobi earlier this autumn where he was very clear about what he expects from his Western allies. The principle around climate finance was conceded last year and I wondered at the time if the leaders of developed countries might regret it. You can be sure that Ruto and Mottley will be walking around Expo City Dubai looking for open cheque books and they will be very hard to say no to.

Fourth, you are going to get very tired of hearing about the Global Stock Take (GST) which is the main mechanism through which progress under the Paris Agreement of 2015 is assessed. A UN report on the GST issued in September showed that while lots of good progress had been made since Paris, a lot more needed to be done. It will be the GST that the political leaders will be focusing on as they reflect on just how far off we are from the 1.5 degree warming target. Their discussions will also be assisted by their own experiences: we haven’t finished yet but 2023 has seen climate and weather records being smashed: the hottest New Year in Europe ever; the warmest June, July, August and September ever; the hottest month ever (July); the single heaviest day of rainfall in Beijing since records began and these are just a few lowlights of a long list. But here’s one more: the average high temperature in Dubai in December is a balmy 26 degrees but earlier this year temperatures in Dubai crossed 50 degrees for the first time. Let’s hope, then, that the delegates bear in mind the words of Hillel the Elder, the Babylonian sage who famously said, “And if not now, when?”  

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Israel’s biggest gas field is the Leviathan field and it is well named. It is vast – one of the great discoveries of this century and contains enough natural gas to make Israel self-sufficient for the next 40 years and that’s likely an underestimate. There is an oil and gas aphorism that big fields only get bigger and there is no reason to think that Leviathan will be any different. There are other, smaller fields in Israel’s sector of the Mediterranean but Leviathan is the one that everyone has been talking about since it was discovered in 2010. 

Israel’s gas has also given the country greater weight in the Eastern Mediterranean as it works with Greece and Cyprus, and potentially even Turkey, on getting their gas to international markets especially as an alternative to Russian gas. It is not all sweetness and light. Lebanon claims that the Leviathan field extends into their territorial waters but the fact that the land border, from which territorial waters are defined, has never been agreed between Israel and Lebanon means that any claim would be tough to prove. 

Even better for Israel, as it found Leviathan it was starting the process of switching its power system from dirty coal to cleaner natural gas. Of course, Israel is a tiny country with 9.4 million people squeezed into a very small area so it’s not self-sufficient in anything else. However, if you were going to choose to be self-sufficient in something, natural gas is the one. This means that Israeli governments can, for the foreseeable future, be confident that the lights will go on when their citizens flick the switch. 

The Jordanian and Egyptian governments can have similar confidence but only because of Israeli gas. Israel is both self-sufficient and an exporter of natural gas and their two main export markets are Egypt and Jordan. There are plenty of good reasons, both internal and external, for these two countries not to be drawn into Israel’s war in the Gaza Strip but one of them is this new dependency on Israel’s gas. This is a big change from 2008 when Israel last went into Gaza and, be in no doubt, it is significant leverage and, it is leverage that Israel would unquestionably use. We can be quite certain that this has been made very clear to Cairo and Amman. The gas fields are also located a long way offshore from Gaza and are carefully defended by the Israel Defence Force so Israel – and its buyers – can have confidence that the gas will keep flowing no matter what is happening onshore. 

In 2016, the Mahama government in Ghana lost an election because of “dumsor” or what South Africans know as “load-shedding”, where power from the national grid is managed so that everyone experiences somewhere between 6-10 hours of power cuts every day. Cyril Ramaphosa’s ANC government in South Africa will be forced into coalition after next year’s election for the same reason. In the autumn of 2021, European governments paid over 12 times the long-term average for natural gas to ensure their gas storage was full ahead of the winter. Why? Because they knew, as well as the Jordanian and Egyptian governments know now, that a government that can’t keep the lights on is a government that will be punished by its people. The problem for Jordan and Egypt is that Israel knows it too. 

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