MAGGIE PAGANO: The green lobby must stop their war on fossil fuels

Don’t look now but there are signs that Britain has the semblance of a joined-up energy strategy.

Over the past few days, Business Secretary Kwasi Kwarteng and Jacob Rees-Mogg, the Brexit Minister, have held emergency meetings with oil and gas companies to increase domestic energy production to avoid winter shortages.

In another move, Kwarteng and Rees-Mogg have been in contact with Norway’s energy giant Equinor in a bid to ramp up existing gas supplies.

They are also thought to be discussing ways to speed up the controversial plans by the Norwegian state-controlled company to develop the Rosebank oil and gas field off the coast of the Shetlands.

Equinor believes it can extract 70,000 barrels of oil a day from the Rosebank field –enough to meet 8 per cent of British production needs by the end of the decade.

Why it has taken until now for some of these discussions to take place beggars belief. But better late than never, particularly with regards to the strengthening of ties with Norway, which is a no-brainer.

For decades now, Norway has been the UK’s most important and reliable energy partner, and is probably the one country that can help us the most in the short-term as we look to find a resolution to the rocketing gas prices triggered by Russia’s war on Ukraine.

Norway is already Britain’s biggest supplier of crude oil and gas, providing us with 20billion-to-22billion cubic metres of natural gas a year, which powers more than a quarter of UK’s gas demand, supplying heating for more than 8m homes and businesses.

It is also fair to say that British Gas-owner Centrica has been ahead of the game, securing a deal in June this year with Equinor to supply another 1billion cubic metres per year, and confirmed supplies for the next three winters. That alone will provide gas for about 4.5million more households.

There were other signs that ministers are getting to grips with the scale of the crisis. Nadhim Zahawi, the Chancellor, is in the US with officials and industry leaders discussing partnerships to help build the next generation of nuclear plants, such as the one being planned by Bechtel on Anglesey in North Wales.

It’s also being reported that if – or when – Liz Truss becomes Prime Minister next week, she will speed up plans to grant 130 drilling licences for exploration in the North Sea as part of the longer-term strategy to secure energy security. 

Up to 15billion barrels of oil and gas are said to be locked in the North Sea. The UK uses 1billion barrels of oil a year.

Kwarteng, tipped to be chancellor under Truss, has already started the process of granting new licences in the North Sea to help meet future energy needs.

One of the biggest applications was from Shell for the Jackdaw gas site, which is now tied up in a legal case with Greenpeace.

It is hard to see how the green lobbyists can keep up with their war on fossil fuels when so many households have to choose between heating or eating and small businesses will have to close.

Guessing game

When Nigel Lawson was chancellor, he famously dismissed some of the City’s supposed best brains as ‘teenage scribblers’.

He was referring to the hundreds of analysts and economists whose business it is to forecast, analyse and extrapolate the future from the latest bunch of data.

I would love to know what Lord Lawson thinks of the latest forecast – the one from Goldman Sachs predicting that if high energy prices persist next year, the UK’s inflation could be a rip-roaring 22 per cent. 

The Goldman projection tops the latest shocker from Citi, which predicts a peak of 18.6 per cent, knocking the Bank of England’s own forecast of 13.3 per cent this October, into the grass.

Yet as Lawson knew all too well, it is pretty impossible to get these forecasts right.

The US houses have a terrible record when it comes to predicting what’s going on in the UK underbelly.

Remember when JP Morgan forecast thousands of jobs would be lost from the City because of Brexit? Remember when Oliver Wyman forecast 35,000 jobs would vanish in a massive Brexodus? Exactly.

Smart move

The Atlantic spending spree goes both ways. The UK’s veterinary pharma group Dechra has pulled off a smart deal to buy California’s Med-Pharmex. 

After falling nearly a third this year, Dechra’s shares could be well worth a buy.