Now do you believe me?
Back in August, when I last wrote in these pages, I put forward the view that Rishi Sunak, heaven forbid, might just be playing party politics when it comes to energy policy.
At that point, Sunak had just approved 100 new North Sea oil and gas licences, claiming the approvals would “boost domestic gas production” and make energy “cleaner” and “more affordable” for consumers.
Sense – there wasn’t a lot of it.
With the majority of the hydrocarbons in the North Sea belonging to multinational or non-UK state-owned companies and exported to overseas markets, I claimed there just wouldn’t be much gas for the UK to speak of and certainly not enough in total to move the dial on prices set by international markets.
Sunak, I said, was looking to drag energy and net zero to the front lines of the new culture wars, happy to position the Conservative Party as the political wing of fossil fuels rather than make any meaningful effort to reduce energy bills or avert an environmental crisis.
My piece received some pushback, not least from my colleague and friend John Butler, Southbank’s investment director, who wrote an article in the same pages a few days later.
John offered a considered counterpoint that said, effectively, there was little harm – and perhaps much to gain – in at least trying to maximise what we have left out of the North Sea.
Which is all well and good, if Sunak had claimed that’s what he was doing or at least clarified or provided any data to back up claims that new North Sea extraction would, all at once, somehow lower bills, decrease imports and help Britain meet its net zero pledges.
In any case, if that was exhibit A in the case that Sunak wasn’t being entirely ingenuous with government energy policy, we now have exhibit B.
Last week, Sunak blocked proposals to tax meat and flights, to force each house to have seven bins for recycling, and to let strangers into our homes to rip out our boilers. It would be an absolute scandal for anyone caring about climate change, you might think, if any such proposals actually existed.
As Zac Goldsmith, the Tory former climate minister, tweeted:
This is cynical beyond belief.
The PM is pretending to halt frightening proposals that simply do not exist.
He is doing it to turn the environment into a US-style political wedge issue – something the UK has avoided all my political life.
Sunak is chucking the environment into a political fire purely to score points.
It is reprehensible.
More troubling, of course, was Sunak’s announcement that he was pushing back the dates for banning internal combustion engine (ICE) car and gas boiler sales. Here he took red ink to real policy in areas fundamental to reaching our net zero commitments.
But just like his approval for 100 new North Sea oil and gas licences in the summer, these changes won’t make any real difference to the direction of travel.
When it comes to cars, you see, the shift to electric vehicles (EVs) has long passed the point of no return. The cost of owning an EV is now much the same as traditional petrol cars, while the range of EVs has improved to the extent that they’re suitable for almost everyone’s daily needs.
Throw in the convenience of home charging and the fact that public charging infrastructure is keeping pace with the surge in EV sales, then you’ll see why EV ownership now has unstoppable momentum. BMW has already said its plans to build a new generation of electric Mini Coopers in Britain will be unaffected, whatever Sunak declares.
As the influential analyst and adviser Michael Liebreich states, while there might be a few extra ICE cars sold between 2030 and 2035, there won’t be enough of them on the road to really threaten our net zero targets.
Similar can be said for gas boilers, according to Liebreich, who says that it is now dawning on the public that their next boiler will be a heat pump “just as ten years ago it began dawning on them that their next car would be electric”.
This is all a trap for Labour, Liebreich adds. “Oppose Sunak’s Net Zero reset and they become the party of meat taxes, holiday taxes, seven bins and forced boiler removals,” he says.
Sunak’s big climate reset is all about getting re-elected, he notes.
Of course. But perhaps I’m now playing politics too.
You see, right now, to make money in the energy markets, it’s best to put politics and culture wars to one side.
With the energy markets in a state of flux with competing agendas, there are opportunities on the table to profit across the entire energy spectrum, irrespective of whether you’re a green bug or climate change denier.
As an investor, there’s little point cheerleading any particular form of energy over others.
To prove the point, John and I recently sat down to discuss the state of play in the energy markets. Although we have different perspectives on fossil fuels and net zero, we both agree there is potentially lots of money to be made in energy right now, and in short order, from opportunities spanning green to brown.
As I explained in the video, the energy sector – all of it – is coming to the boil.
That’s why the service I launched earlier this year – Strategic Energy Alert – is “energy agnostic”.
Clean energy, dirty energy – money is hitting the market at a shocking scale. In 2023, energy has become the centre of the financial universe.
As my readers of Strategic Energy Alert already know, the service is focused on where the money flow is heading in the energy sector at any particular moment in time. And buying in, ahead of it, gunning to make our readers big profits.
This service doesn’t discuss the pros and cons of fossil fuels… or the virtues or vices of net zero. It’s not about politics or culture wars.
Until next time,
Contributing Editor, Fortune & Freedom