After freshly taking over from Boris Johnson, new UK prime minister Liz Truss vows to immediately get to work in solving the country’s worsening inflation and energy crisis, as gas shipments from Russia become increasingly uncertain heading into the winter months.
It appears the UK is realizing that Russia may, after all, have the upper hand in dictating Europe’s energy supply, regardless of western-imposed sanctions. According to a source cited by The Telegraph, Truss plans to “revolutionize energy supply” in the UK, so Britons will never have to pay astronomically high utility bills ever again. The new prime minster is expected to announce a plethora of new initiatives on Thursday, that will boost the UK’s domestic production of energy and focus on increasing supply rather than continue with climate-conscious policies that primarily focused on reducing demand.
“We will take action immediately to help people and businesses with bills but also take decisive action to tackle the root cause of these problems so that we are not in this position again,” Truss is expected to announce. As per the Tory’s new pledge, consumers’ annual energy bills will be capped at £2,000 for this winter and the next, instead of the previously-proposed increase to £3,549 come next month, and households will be allowed to keep the £400 discount on energy bills implemented earlier this year. In addition, green levies on energy bills will also be scrapped as per her campaign’s previous promise.
In the meantime, Truss plans to boost Britain’s medium-term energy supply by lifting the 2019 ban on fracking, allowing companies to make permission requests to drill and extract shale gas. In order to incentivize local communities, fracking companies also plan to offer a 25% discount on utility bills in exchange for their endorsement of fracking activities. The prime minister is also expected to endorse oil and gas drilling in the North Sea. “I want to see us using more of our UK energy supply, including more oil and gas from the North sea and nuclear power in Scotland,” she was quoted as saying to an MP member on Wednesday.
With much of Europe teetering on a full-blown energy catastrophe, Truss has made it a priority to focus on solutions involving fossil fuels. However, according to some environment and climate experts, she is going about things the wrong way. UK’s former conservative environment secretary Lord Deben and Committee on Climate Change and the National Infrastructure Commission chair Sir John Armit penned a letter to Truss warning her that boosting gas production will not solve the region’s energy crisis.
“The UK cannot address this crisis solely by increasing its production of natural gas. Greater domestic production of fossil fuels may improve energy security, particularly this winter. But our gas reserves— offshore or from shale— are too small to impact meaningfully the prices faced by UK consumers,” they wrote. Instead, they are advising the prime minister to allocate efforts towards reducing businesses’ and consumers’ demand for energy.
“Energy security and reducing the UK’s exposure to volatile fossil fuel prices requires strong policies that reduce energy waste across the economy and boost domestic production of cheap and secure low-carbon energy,” they advised in their letter, which was seen by the Guardian. “Renewables are the cheapest form of electricity generation. Onshore wind and solar have the potential to be deployed fastest and thus reduce our reliance on natural gas sooner.”
Information for this briefing was found via The Telegraph, The Guardian, and Twitter. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.