The Secretary of State for Energy Security and Net Zero is deeply disappointed. A century after it first commenced operations, the Grangemouth Refinery on the Firth of Forth is now destined to be closed by its owners, Petroineos, with the loss of many well-paid jobs in the southeast of Scotland. This is, apparently, exactly what Ed Miliband didn’t want to happen.  

At this point, anyone familiar with his comments and policies on the energy sector might be forgiven for questioning whether the Secretary of State is aware of what they’ve actually been up to at Grangemouth over the last hundred years; he does know that it’s an oil refinery? Up until now, Mr Miliband has seemed fairly clear that he thinks the oil and gas sector is unambiguously bad and needs to be shut down as soon as possible. 

Most notably, Miliband’s flagship policy of reinstating the ban on licences for new oil and gas production in the North Sea is a very clear signal of the government’s view (one it shared with Boris Johnson’s administration) that the transition away from fossil fuels is going ahead regardless of the progress toward alternative means of generating power. Businesses with large capital investments in the hydrocarbon economy should make their plans accordingly. 

Miliband is one of a small number of characters in the cabinet who was a recognisable political figure before Keir Starmer began his reconstruction of the Labour Party as a supposedly credible political force. As such, he is an important part of the PM’s front bench — and as a result, he has been able to insist on a substantial degree of autonomy over his portfolio. Given the PM’s cautious political instincts, it seems likely that if it were left up to him alone, he would have charted a more practical course on energy policy — and so what we currently have in lieu of that is very much of Miliband’s own design. It’s surprising then that he should be disappointed by a major investor responding to his own clear signals. 

Perhaps Mr Miliband’s disappointment is just a case of crocodile tears and political expediency. After all, Labour now has some constituents to bear in mind in Scotland who will bear the brunt of the economic consequences. Or maybe, we have misinterpreted his real beliefs on the subject. Some of his defenders have claimed that despite his rhetorical zeal, he is in fact a pragmatist who recognises that oil and gas will continue to play an important role for decades to come, as we transition to whatever it is that will replace them. He has only banned ‘new’ oil and gas licences in the North Sea; he hasn’t insisted on closing it down wholesale. Perhaps he was expecting Petroineos merely to have avoided investing in upgrades and maintenance of the Grangemouth refinery, as its supply chain slowly closed itself down.  

I suspect there’s an element of truth to both of these positions. Obviously, no minister can be seen to be celebrating the closure of a major regional employer, although I don’t believe Grangemouth’s closure is in fact at odds with Miliband’s view of a long-term transition away from fossil fuels over a number of years. However, while one might accept that Miliband may be more of a pragmatist that he’s given to letting on, his is a variety of pragmatism that has at its core a complete absence of any kind of strategic plan.

Firstly, let us examine the logic of the ban on new North Sea oil and gas licences. Clearly; this is going to require substituting domestic production with imports, of either refined or crude product (the closure of major refineries will settle that question). Any fossil fuel reserve is likely to become uneconomic to exploit well in advance of it actually running dry — this is especially the case for reserves that are far offshore, in very deep seas, and particularly in areas so hostile and expensive to operate in as the cruel North Sea. So without the ability to switch to new, more profitable locations as production at existing sites becomes more difficult, those areas of the North Sea under British jurisdiction will lose their commercial attraction for producers.

Yet while we have banned new licences, the places we will be importing alternative fuel from will be doing no such thing. Certainly, even under a Democratic president, the United States has shown no inclination of cutting its own production. In fact, barring some unexpected hit to global demand, it is very likely that the economics of the global oil market will tilt the balance to extend the economic lifespan of existing production facilities elsewhere in the world to make up for whatever reduction in total global supply results from the UK’s North Sea fields steadily going offline. So it won’t even reduce the amount of oil and gas sloshing around the world — it will simply alter the UK’s balance of payments and move those jobs abroad.  

The “green” movement, in its current, carbon-fixated incarnation, sustains itself on the impression of inexorable progress and inevitability

Miliband is aware of all this. Whilst one might be duly sceptical about the depth of his technical knowledge, or the quality of the briefing he receives, the above is all pretty basic stuff for someone with his background in economics. However, the banning of licences for new oil and gas production is a huge, symbolic issue for climate change activists; and this is an area of policy that is dominated more than any other by campaigners rather than technicians or wonkish ideologues.  

The “green” movement, in its current, carbon-fixated incarnation, sustains itself on the impression of inexorable progress and inevitability. Policies are trailed years in advance, often seeming completely implausible at first, but slowly attracting supporters; beginning with the most marginal voices in the debate before being adopted by increasingly mainstream figures.  

One result of this time-lag is that policies are adopted long after their initial justifications have been discredited and then forgotten. The ban on new oil and gas licences was first proposed around the time that the “Peak Oil” theory was fashionable in the 1990s and early 2000s; this was the idea that supply for fossil fuels would peak before demand, forcing us to explore alternative energy sources. Thus, countries could put themselves ahead of the curve by phasing out their own dependence on fossil fuels as a matter of policy. With that theory debunked by proven reserves growing continually faster than world demand, the ban on new licences doesn’t make sense other than as a global agreement that all major producers sign up to.  

But the insistence on the inevitability of green policies means that, once a policy idea has been seeded among activists, it takes on a political life of its own independent of the original logic behind it. Campaigners promote it to the sort of mainstream political figures who aren’t terribly interested in technical detail, but who might be looking for the kind of ideas that were thought of as radical a few years earlier, and which might now help them burnish their progressive credentials. Which is why they had so much luck with Boris Johnson.

Thus, climate change politics becomes a giant exercise in social and political positioning. By the time a policy has been adopted by one Tory prime minister and then dumped by one of his even more unpopular successors, someone like Ed Miliband doesn’t need any technical justification for adopting it. In the eyes of the campaigners, Truss and Sunak were guilty of the cardinal sin of climate politics — that of backsliding. No matter how self-defeating a policy may turn out to be, no matter how technically infeasible, the ratchet principle must be maintained.

So long as energy and climate policies can only be seen to move in one direction, their opponents are literally tilting at windmills and will end up on the dustbin of history along with Liz Truss. This is how campaigners are able to maintain the fiction that a country like Britain; by showing “global leadership”, by doing things that are clearly self-destructive, will eventually lead other countries into doing the same despite their clearly taking a very different approach to the risks of climate change and the costs of mitigation. It’s also how we end up with the US Government supporting the UK’s erstwhile moratorium on new oil and gas, whilst simultaneously pressuring Saudi Arabia to pump more oil. 

The same dynamic is visible on other green policies beyond the question of new licences for oil and gas. The deadline for the end of the sale of new internal combustion-powered vehicles remains stuck at 2030 despite almost nobody believing that the UK will be in any position to sustain a sudden shift toward electric cars by that point. The idea of a sufficient number of new charging points being laid out over just six years, or the national grid being able to sustain the sudden increase in the amount of electricity being consumed, is completely implausible even to the most optimistic EV evangelists. Consumers are stubbornly refusing to make the switch. The deadline remaining as it is will now certainly mean that people continue to drive older petrol and diesel vehicles well beyond the point at which they would have otherwise shopped them in, which is bad for carbon emissions. But the remorseless logic of unstoppable green progress means that UK policymakers cannot row back without superhuman political effort. 

Ironically, it’s the EU that has been able to show more flexibility to push this kind of deadline back, as climate policy is forced to share the arena with another utopian political project that insists it can only ever go in the one direction. The institutionalisation of Green parties in the governance structures of the EU and in Germany also gives regulators in Brussels the political authority to make concessions to reality, as well as to powerful industrial and agricultural interests in large member states. 

In both the oil and gas licensing issues and in the electric vehicles deadline, investors and producers are being faced with an impossible dilemma. Do they go along with what the government is actually telling them to do in the form of unambiguous regulations and deadlines; or do they try to interpret what they think the politicians actually mean to avoid “disappointing” them by closing huge swathes of industry?  

We are now coming up against the hard limits of legislation as a form of social positioning. We have had a generation of politicians who conceived of legislation not as the basis of laws to be followed, but as a means of sending a message; as if it were some sort of particularly precisely worded Times editorial. I wrote previously about how children and adolescents are being asked to make sense of intelligent adults saying things about the future that they didn’t really believe to make a point about climate change. But captains of industry are being asked to make multi billion-pound commercial decisions in an atmosphere of complete ambiguity for the same reason. 

… the engineers, directors and fund managers who make the economy go round are forced to work within technological, economic and legal parameters as they actually exist

At the heart of this confusion is the fact that we don’t really understand what we are planning to replace the fossil fuel economy with. Politicians have passed aspirational legislation setting deadlines for existing technology to be phased out, in the hope that the market would figure out the alternatives and the technology in time. These deadlines seemed far enough in the future for the politicians not to worry about implementation, but these are mainly people without any professional experience about the timescales involved in major capital investment planning.  

People who see the world in the way that Boris Johnson and Ed Miliband do might imagine a world in which wind turbines and solar panels replace hydrocarbons over the next few years, and everything else works basically as it does at the moment. But the engineers, directors and fund managers who make the economy go round are forced to work within technological, economic and legal parameters as they actually exist, and if it becomes impossible to continue operations within any one of those, then they will simply be forced to close their operations down, or move them elsewhere.