Labour’s Net Zero drive is leaving the UK at greater risk of power blackouts because it is ‘squeezing the life’ out of the North Sea oil and gas industry, Sir Jim Ratcliffe has warned.
The billionaire Ineos CEO and part-owner of Manchester United warned that Britain came ‘perilously close’ to losing power in January when light winds prevented wind turbines from being effective.
And he warned this would become a more common problem as domestic gas production falls and infrastructure is decommissioned.
Writing in the Telegraph, Sir Jim said the UK should scrap the Windfall Tax, a levy on oil firms making massive profits thanks to the global high price of energy.
‘Government tax policy on energy is squeezing the life out of our abundant energy reserves in the North Sea,’ he wrote.
‘The UK came perilously close to energy blackouts during this January’s cold snap, when the wind stopped blowing.
‘With one week of gas storage and strained electricity supply, the National Grid was forced to issue emergency market notices.
‘These warnings, and the threat of energy blackouts, will only become more frequent and more serious as domestic gas production falls and critical infrastructure is prematurely decommissioned.’
Ineos owns the Grangemouth refinery in Scotland, which will close later this year with the loss of 400 jobs, through Petroineos – a joint venture with Petro China.
It also owns the Forties Pipeline System, which links North Sea rigs with the mainland.
Ministers are planning to axe the Windfall Tax, but not until 2030.
Earlier this month it launched a consultation on the future of the North Sea energy sector.
The two-month consultation will look at harnessing the North Sea’s existing infrastructure, natural assets and expertise to deploy new technologies, such as hydrogen, carbon capture and storage, and renewables.
Alongside this, the Treasury confirmed that the Energy Profits Levy will end in 2030 and said it will consult separately on a new regime that responds to the potential for future price shocks.
The tax was introduced in 2022 to help fund support for households struggling with rocketing energy bills following Russia’s invasion of Ukraine.
It also stood by its pledge not to issue any licences to explore new fields – a move in line with the science of what is required to limit dangerous global warming.
But in a bid to maintain existing licences, the Government said oil and gas firms will still be able to extend their permits beyond their expiry date or transfer them to other firms.