Government Funds Record Oil Profits With Public Money – While Cost Of Living Continues To Rise and Businesses Struggle To Stay Afloat

I’m reading the third article in as many weeks reporting that oil companies have made record profits this year, thanks to G20 governments increasing subsidies by 475% to the fossil fuel industry – essentially funding these profits with our (public) money. How can this be right and why are we not looking at better options than lining the oil giant’s pockets with our hard earned cash?

The Evidence Speaks For Itself

Evidence was published last month by the Office for Budgetary Responsibility (read report here) advising the government of two important findings from their analysis:

It will cost our economy twice as much to remain dependent on fossil fuels than to make a transition to zero carbon energy – therefore bringing long-term benefits to households and businesses in terms of reduced costs

Due to rising energy prices – for the first time it is now confirmed that the cost of generating electricity from renewable energy sources is up to 8x times cheaper than oil / gas alternatives – again offering long term savings to consumers

The Scale Of The Energy Crisis

Gas prices rose by 150% between 2019 and 2022, significantly reducing household income and placing strain on consumers to keep warm as the coming winter approaches. As the UK is the fourth most gas-dependent economy in Europe – the delays of a transition to more sustainable energy sources will have grave consequences. The report goes on to affirm that the UK’s limited investment in to renewables is causing us to fall embarrassingly behind neighbouring countries in Europe, who are proactively adopting more sustainable energy solutions.

So much so that recent data for 2022 shows that Germany and Italy both saw an increased investment of +0.2% of their overall GDP into low carbon technologies, versus a -0.2% investment from the UK government. Yes – you did read that correctly; the UK are going backwards despite the urgency that we face.

The economic case for developing renewable energy has never been more clear. Wind and solar energy are now the cheapest forms of energy we can build – with the potential to bring businesses and households reduced costs and security for the future; this is no longer just about the environmental gains. Businesses and households are being crippled by energy prices, yet the government continues to look after their own vested interests – displaying pure ignorance for what our nation needs.

Why Is The Government Refusing To Listen?

Against the advice of professional bodies and experts, the government is using our money to boost oil company profits, while so many people struggle to pay their bills and keep their businesses afloat. Most people know that oil and gas are over – both are a finite resource; their unpredictable supply chain forcing business and household costs to unmanageable heights; whilst also destroying the planet for future generations.

The G20 countries are responsible for 75% of the world’s global emissions and so a cumulative effort is essential if climate targets are to be met. Whilst subsidies for fossil fuels were reduced between 2015 – 2020, the IMF (International Monetary Fund) have stated that $13 million/minute of public money is now supporting the industry – a huge rise – despite world leaders agreeing to phase out these subsidies at the Cop 26 climate summit in 2021.

What Is The Solution To The Energy Crisis

It is now regularly reported that the ‘UK is missing climate targets on nearly every front due to lost leadership on climate action and lack or urgency from the government‘. Scientists are becoming exasperated by foot dragging on action needed to curb global heating, whilst extreme weather conditions highlight the scale of the climate crisis – including droughts, fires and flooding disasters worldwide.

Two factors raise alarm bells and should be considered by Thirsk & Malton constituents as the cost of energy continues to place pressure on our ability to live an affordable lifestyle:

1. Where should energy security rank on the government’s priorities?

Energy security is reported as one of three TOP fiscal risks to our economy in the latest report from the OBR, published last month. Yet the governments current top 5 priorities don’t currently mention either energy security or climate change – both of which fall together, hand in hand. We simply cannot continue to grow our economy or reduce debt whilst irreparably damaging the world’s fragile ecosystems that enable our survival. Voters want to see a robust net zero strategy, they are realising the importance of this – so why is it still not a priority?

2. Why have the government approved 100 North Sea drilling licenses?

The IEA (International Energy Agency) clearly warned in 2021 that no new developments of fossil fuels could be constructed if world targets to limit global temperature increases to 1.5C were to be achieved. The government however continues to go against this advice and has just committed to issue over 100 new north sea oil and gas drilling licenses, jeopardising our international standing as other countries are working hard to reduce their fossil fuel consumption. With no progress also on reducing fossil fuel subsidies, or investing in carbon-free sources of energy – the government is doing the exact opposite of what is in our people’s interests.

Where Are We Heading?

There are of course endless solutions which would take us in the right direction, most of which are widely recognised by professional and scientific experts – and which are also perfectly viable and logical.

I have asked our MP Kevin Hollinrake – when or if any of these initiatives will be implemented by the government:

Repurpose fossil fuel subsidies so they have a direct and purposeful benefit on people’s lives (not lining energy giants pockets)
Provide targeted welfare payments for those who are struggling most with energy prices/living costs
Urgently upgrade the electricity grid infrastructure
Offer financial support and incentives for rooftop solar installations on homes and businesses
Help households make the transition to low-carbon, home heating solutions
Improve energy efficiency and insulation of more homes through the ‘Energy Company Obligation’ scheme
Impose higher carbon taxes to raise additional funds for investment into the climate strategy
Develop public transport infrastructure and encourage usage
Reduce costs of electric car charging and increase capacity
Effectively approve, legislate and incentivise on solar and wind farm installations – removing red tape
Decarbonise steel production and reduce emissions from other heavy industries
Educate people on how to change their ‘high-carbon’ lifestyles
Curb development of airports, coalmines and oil/gas fields
Raise the specification of all newly constructed buildings to meet climate goals (e.g solar panels/low carbon heating/insulation/energy efficiency measures)

There is currently an exasperation running through the scientific community due the direction of the UK government energy solutions and climate change.