UK energy sector paralysed by political uncertainty

While the Net Zero targets are being rolled back all over Europe out of necessity, Rishi Sunak’s government seems unable to take the required decisions to protect the UK consumer and national interest by supporting rather than hindering new fossil fuel projects on and offshore. The Labour Party, of course, is still enjoying the liberty being out of power and maintains its green posturing.

As a consequence of this combination of indecision from the government and irresponsibility from the opposition the essential development of the remaining resources in the North Sea is faltering.

For example, Deltic Energy, the owner of 30% of the Pensacola gas and oil prospect, one of the largest discoveries in recent years, has issued a statement warning the markets that due to the “hostile political environment" they have not yet been unable to secure financial partners to allow them to proceed in the project. Though negotiations continue, there is a risk that they will have to bail out of the development of the field.

The difficulties of one company in a complex joint venture are not, of course, the end of the world, and with luck Pensacola may still proceed with or without Deltic Energy. But this unfortunate situation is clearly indicative of underlying problems in the fossil fuel sector that are entirely the result of mistaken (and cross-party) political intervention in the energy markets.

Rishi Sunak’s government appears to be the prisoner of the environmentalist wing of his own party, and unable to take firm action to shore up the UK’s security of gas and oil supply. It is disappointing that the Labour Party has not stepped forward to address this matter, and instead continues to add to the uncertainty facing investors in the North Sea with opportunistic green gestures. Indeed, given the current geopolitical situation we can only deplore the conduct of both political parties.