The energy policy – if it deserves the name – of those supporting a UK exit from the European Union is a microcosm of the broader arguments for voting to leave. Allegedly harmful regulations would be scrapped. British influence would be maintained in splendid isolation. And the disruption that would follow an exit can be shrugged off.
“Leaving the EU would, as far as energy is concerned, give the UK the chance to opt out of a relationship where the disadvantages overwhelmingly outweigh the advantages,” claims Business for Britain, a pro-Brexit lobby. But there is no opting out from the thicket of pipelines, electricity cables and investments that link Britain to its EU neighbours.
So most of Business for Britain’s energy chapter is devoted to showing that Britain could keep the same regulations and international memberships outside the EU as it has today: upheaval for the sake of continuity.
Claims that EU energy regulations will cost households an extra £149 (Dh780) per year by 2020 ignore the benefits: savings on energy bills, lower fuel prices, sharp falls in the cost of renewable energy, the UK’s own environmental policies, and the contribution to achieving last year’s Paris climate change agreement.
Rather than being straitjacketed into regulations from Brussels, the UK has been a leader more than a follower of European energy policy. It championed the privatisation and deregulation of electricity and gas in the 1990s, introduced legally-binding climate targets and an emissions trading scheme from 2003, and now backs state payments for low-carbon electricity, and closing down coal power by 2025.
The EU leaves member states to make their own choices on energy production: Germany is allowed to phase out nuclear power, although France relies on it almost exclusively; the French can ban shale gas while the British promote it.
Many Brexit proponents are climate change deniers: the former chancellor Nigel Lawson, the former environment minister Owen Paterson and the columnist James Delingpole. Brexit for them offers a chance to escape from the UK’s environmental commitments – although these are enshrined in national law and find strong support from the public.
Business for Britain mentions “the continuing threat that energy supplies from Russia could be cut off”, without drawing the obvious conclusion. While the European Union has considerably improved energy security by funding new import projects and interconnections, Mr Putin’s Russia, the continent’s key gas supplier, would be greatly emboldened by a weakened EU. Of course, like their kindred spirit Donald Trump across the Atlantic, Boris Johnson and Nigel Farage, two leaders of the “exit” camp, are apologists for, even admirers of, the Russian strongman.
Turkey is a key route for oil and gas from the Caspian, Middle East and in future the eastern Mediterranean to reach the EU, via the “fourth corridor”, which avoids Russia. Mr Gove and Mr Johnson have not endeared a post-European UK to the Turks by stirring up unfounded fears over immigration and an EU entry which is not remotely in prospect.
For Gulf investors, the stability of the British economy and the consistency of its climate and energy policies are very important. Qatar supplies more than 90 per cent of the UK’s liquefied natural gas. Abu Dhabi’s clean energy vehicle, Masdar, has invested billions of dollars in British offshore wind power, while Taqa operates several oil and gasfields and pipelines.
Even more seriously, a UK exit, followed most probably by a recession and further economic damage across Europe, would hit energy demand. A weaker sterling and euro would mean a stronger dollar and therefore lower world oil prices – but higher UK prices in pounds.
A Britain more committed to the EU should be an even stronger voice for a market-friendly energy policy that guarantees prosperity, a clean environment and continental security. Energy companies, consumers, environmentalists and investors have a lot to look forward to if British voters make the positive choice on June 23.
Robin Mills is the chief executive of Qamar Energy and author of The Myth of the Oil Crisis.
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