LABOUR’s plan to ban North Sea oil and gas developments provides another example of politicians focusing on the wrong climate change problem in the pursuit of votes as green dogma causes hardship in Europe.

Keir Starmer tried to answer criticism about a lack of policy ideas when Labour unveiled proposals to stop any more North Sea licences being issued in a carefully-orchestrated media offensive last weekend.

With a general election due to be held by late January 2025, Labour moved to cement its poll leadership with a commitment to prioritise renewables. The policy looks designed to help it win the green vote.

Pundits reckon it is at least partly motivated by the desire to help Labour win seats from the SNP in Scotland, in battles that could determine which party holds power at Westminster following the election.

The SNP has worked hard to keep greens onside as it tries to build support for another independence referendum. In the energy strategy released in January following long delays it said there should be a presumption against new oil and gas exploration and signalled opposition to new developments.

The SNP based its unsuccessful independence campaign of 2014 on the claim that the North Sea’s oil and gas reserves could fuel prosperity for Scotland after it left the UK.

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The oil and gas lobby reacted to Labour’s announcement with predictable fury. While North Sea firms have made bumper profits following the rise in commodity prices fuelled by Russia’s war on Ukraine, industry leaders say confidence has plunged following the introduction of the windfall tax last year by the Tory Government.

Trades union leaders also denounced Labour’s move as they underlined the value of the jobs sustained by the oil and gas industry.

Supporters of the industry can claim the force of one of the main arguments in favour of North Sea production gets drowned out amid the noise generated by environmental campaigners. That is that cuts in domestic production will leave the UK more reliant on imports, which will entail increased emissions and may be vulnerable to geopolitical disruption.

The fact is that the UK will need oil and gas for decades, even if renewables generating capacity increases at the kind of rate seen in recent years.

Renewables output is intermittent. It will take years before the UK develops the storage capacity and grid connections required to ensure the power generated by windfarms and the like is available in all parts of the country when it is needed.

After posting a dramatic increase in annual profits last month, SSE noted that renewables generation had been held back by unfavourable weather conditions. The growth in the Perth-based giant’s profits was driven by its thermal power division, which operates gas fired power stations. SSE said this offered the required flexibility to the market and supported security of supply.

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Global demand for gas is expected to remain strong for years.

While the International Energy Agency has forecast a dramatic increase in global renewables power generation this year the watchdog reckons spending on gas power will continue to rise.

All of that means the price of imports is likely to remain high.

Ironically, the need for gas has been recognised by green energy visionary Dale Vince, who has generated controversy with his support for Just Stop Oil and the Labour Party.

Labour came under fire after announcing the plan for the North Sea development ban from critics who highlighted Mr Vince’s connection with Just Stop Oil, whose campaigns have resulted in costly traffic disruption across the UK.

Mr Vince founded the Ecotricity power supply business, which says it began with a mission to replace electricity made by burning fossil fuels with green energy but generates huge revenues from the sale of gas to households. The company appears to practice the kind of offsetting that campaigners say allows oil and gas firms to justify the production activity they condemn.

On its website Ecotricity states: “Currently, about 1% of the gas we supply comes from other green gas mills, and the rest is natural gas. The residual carbon emissions from our fossil fuel gas are offset by investing in carbon reduction schemes around the world to carbon neutralise all the gas we supply.”

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The latest accounts for Ecotricity Limited filed at Companies House show it generated £65m gas sales revenues in the year to April 30 2022, up from £49m in the preceding year.

Total revenues including electricity sales rose to £336m from £240m. The company made £82m profit before admin costs, against £24m last time.

The highest paid director earned £228,000 up from £224,000.

Highlighting tough market conditions in the accounts, Ecotricity noted that it had bolstered debt collection processes. However, it said: “Customer propensity to pay has … been supported through the winter of 2022/23 following the introduction of numerous Government schemes to keep consumer and business power and gas prices lower than wholesale market prices.”

In addition to the support provided by Mr Vince, Just Stop Oil has received significant backing from an organisation funded by a scion of the Getty oil dynasty.

On its website, the group says: “Climate Emergency Fund is Just Sop Oil’s primary funder for recruitment, training and capacity building”. Climate Emergency Fund’s backers include Aileen Getty.

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Critics fear the timing of Labour’s announcement was especially bad as it could spook firms that are planning huge projects such as Rosebank and Cambo off Shetland.

Alternatively, it could make firms move faster. Kistos said last week that it plans to develop gas fields off Shetland noting the value of the investment allowance introduced alongside the windfall tax.

A ban on North Sea projects will make virtue signallers happy but will do nothing to reduce demand for gas. This will require huge reforms, the costs of which must be shared fairly.

In Germany, the coalition government has sparked outrage with a bill championed by the Greens that will effectively ban sale of gas boilers from January 1. Opponents say it will result in huge bills for householders who will be required to fit systems mainly powered by renewables, such as heat pumps.

The measure may actually have boosted demand for boilers as people seek to beat the deadline. Germany’s heating trade association reckons the number of gas boilers sold in the first quarter doubled to 168,000, the FT reported.

The UK Government plans to ban sales of gas boilers by 2035.

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In that context, an observation by the IEA may give those who want faster action pause for thought.

It noted last week: “The potential of renewable heat technologies is still largely untapped, both in buildings and industry. Harnessing their potential would, however, require sustained and comprehensive policy action to improve consumer awareness, reduce high upfront costs … alleviate supply chain challenges, expedite permitting procedures, establish training programmes and support R&D to further improve technologies.”