Cost to UK will be huge — yet won’t make us ANY greener
THE cost to British business and consumers of Shell’s decision to pull out of the Cambo oil and gas development off the Shetlands could be enormous. Not only will it contribute to surging energy bills and higher inflation (already forecast to rise at 5 per cent in 2022), it will mean the UK has to import more oil from countries where supplies are insecure.
Royal Dutch Shell may be able to claim the high ground in the battle to become a greener company. But it is engaged in a piece of virtue signalling which is likely to do little to reduce Britain’s or the world’s carbon emissions.
Under UK government-sanctioned plans to exploit the field, Shell had planned to take a 30 per cent stake in the Cambo project. The presence of Shell, as a cornerstone investor, was seen as essential in ensuring that the drillings and development were carried out to the highest safety and carbonemission standards.
The British oil company’s withdrawal comes in the face of the threat of legal action from Greenpeace, a lack of support from Scotland’s First Minister Nicola Sturgeon and pressure from big battalion shareholders who have hardened their stance on climate change.
It is still possible that another explorer will seek to replace Shell in the project. But with the political and environmental hurdles set so high by opponents to the domestic production of fossil fuels, it would take a brave investor to combat the naysayers.
All the evidence from this autumn’s energy crisis, which saw gas and power bills soar amid supply bottlenecks around the world, suggests it is far too soon for Britain to place all its bets on renewable energy.
ALMOST every single British nuclear power plant – and nuclear is currently the energy source for around 20 per cent of our electricity – is close to the end of its life.
This leaves the UK dangerously dependent on the wind blowing, the sun shining – and on imported oil and gas.
As was seen in September and October, these overseas supplies can be hopelessly unreliable. With a global shortage, oil and natural gas tankers heading for the UK were diverted to China and the Pacific because governments there were willing to pay a higher price.
Meanwhile, gas supplies routed through continental Europe by the state-owned Russian firm Gazprom were offloaded before they reached pipelines to Britain.
And in addition, a fire on the interconnector to France hit power supplies. This series of events underlined how important it is for the UK – which is still surrounded by rich oil and gas fields and sits on potentially unlimited sources of gas for fracking – to make use of these energy resources until newer fuel technologies such as green hydrogen, fuel cells and carbon capture can be brought to fruition.
Shell’s departure from the Cambo field will be seen as a huge victory for the green lobby. Paradoxically, it will do nothing to reduce the nation’s carbon footprint. Instead of our own fuel being produced on the country’s doorstep, the oil will instead be transported from Nigeria, the Middle East and other far-off places.
The transport alone will increase the carbon footprint globally. Nothing will have been done to lower the UK’s energy consumption at all and Britain’s balance of payments with the rest of the world will be hurt.