Bridging the Divide: A Collaborative Path to Securing the UK’s Energy Future

I find myself in Malaysia, staying at the exquisite Anantara Desaru Coast Resort and Villas Resort on the south east coast of the peninsula. It is a truly remarkable place, where every detail has been carefully considered to ensure the utmost comfort and care for those fortunate enough to visit. It’s Jill' s and my first holiday this year, and we couldn’t be happier with the resort. Over the years, I have had the privilege of staying at a number of luxury resorts, yet this particular location stands out for its stunning surroundings, impeccable amenities, and the serene atmosphere it offers. And it even includes a 'coconut weather' feature—a delightful touch that subtly connects tradition with modern forecasting. Its significance may appear whimsical at first glance, but I shall return to its deeper implications later in the article.

However, what elevates the experience most is the exceptional warmth and professionalism of the people who run the resort. Their dedication to creating an environment of genuine hospitality makes this a truly outstanding destination. It is a place where one can find peace and tranquillity, and where every moment feels thoughtfully curated. A truly wonderful experience in every sense. Thanks to all involved and congrats to Torsten Richter Peter Wagner and the team for creating such a special place.

After two weeks working in Singapore, it’s bittersweet to wake up in such a beautiful setting, only to be confronted by the same repetitive rhetoric on the energy challenges facing the UK. The familiar refrain continues: fossil fuel companies must pay for the climate crisis, windfall taxes on oil and gas will somehow lead us towards a greener future, and renewables alone can save us. It’s the same well-worn tune, with few positive insights, and the solutions offered are all too often impractical and divisive.

Yes, there is merit in leading the way with renewable energy and of course, those at the helm of each energy source will fight for the best outcomes for their shareholders—whether they are in oil, gas, nuclear, tidal, solar, wind or other. But the debate always seems to miss the critical point: there must be balance. Every energy source has trade-offs, and the only viable way forward IMHO is through a collaborative, balanced process—one that places equal weight on the needs of today’s population and those of future generations who will inherit the decisions we make.

Hydrocarbons: It’s Not Just About Energy

When it comes to hydrocarbons, we must recognise that they are about far more than just energy. Hydrocarbons underpin a vast array of products and sectors, from plastics and chemicals to pharmaceuticals and agriculture. The derivatives of oil and gas touch nearly every part of our daily lives. These essential components cannot simply be replaced by renewable energy sources. Solar and wind can generate electricity, but they cannot substitute the fundamental materials that hydrocarbons provide. To pretend otherwise is to ignore the complex reality of global supply chains. Moreover, hydrocarbons play a critical role in the economic development of emerging regions. Some of the world’s poorest countries are on the cusp of a transformative opportunity—an opportunity to exploit their natural resources and pull their people towards a better life by selling a product that remains in demand. These nations have the right to harness their resources IMHO, just as wealthier countries have done for generations. Importantly, they are able to do so because the demand for hydrocarbons is still there. It’s surely better that nations with decades of experience in producing hydrocarbons work with these regions, ensuring that their extraction processes are as environmentally friendly and efficient as possible. What is not helpful is for wealthier nations, after years of doing exactly the same thing, to piously pontificate that these countries are wrong for following the same path. Instead of self-righteous condemnation, we should be fostering collaboration, sharing best practices, and promoting technologies that reduce the environmental impact of hydrocarbon extraction.

The Same Old Story: Windfall Taxes and Capital Flight

Since the introduction of the UK’s Energy Profits Levy in 2022, the rhetoric has been about taxing the so-called “excessive” profits of fossil fuel companies. But as I sit here with a fresh perspective, far from the immediacy of the UK energy debate, it is clear that this approach is overly simplistic and short-sighted. Reading today’s news feed, the reality is stark: banks have slashed loans to North Sea oil and gas groups by up to 50%. According to Norwegian investment bank SpareBank 1 debt available to UK producers through reserve-based lending—a form of asset-backed borrowing—has plummeted. The industry is grinding to a halt, and we’ve seen no new wells drilled in the UK North Sea this year. With capital drying up, projects are being delayed, and the very companies we rely on for our energy security are looking elsewhere for stability and growth, and before we enter an import export debate, consider: it’s important to recognise that whether the UK imports or exports oil, maintaining our own domestic resources is essential.

In a competitive global hydrocarbon market, having secure energy assets strengthens our economic stability and ensures we remain a key player on the global stage. As Robert Fisher chair of Ping Petroleum Limited , observed about UK E&P investment currently, “People who provide capital are very uncertain about whether they are going to get their money back because of changes in policy.”

This uncertainty doesn’t just harm oil companies—it harms the entire economy, and it drives up costs for consumers. The public in general, I believe, realises that the punitive taxation of energy companies directly impacts the price we pay to heat our homes and fuel our vehicles. There is, however, a persistent fragility in our collective consciousness these days when faced with moral politics, often resulting in decisions driven more by emotion than by reasoned judgment.

The Necessity of a Balanced Energy Mix

What the UK needs is a balanced energy strategy, not one built on rhetoric or short-term political gain. There are trade-offs in every energy source. Nuclear provides a stable, reliable baseload but requires significant up-front investment and long-term waste management. Oil and gas are essential for the foreseeable future, especially as bridge fuels, but must be produced more efficiently and responsibly. And of course, renewable energy—offshore wind, solar, and even onshore wind—are crucial in our fight to reduce our overall impact on our environment, but they are intermittent and require backup from other sources to ensure a stable supply.

What is often absent from this debate is the recognition that hydropower could play a pivotal role in the UK’s energy future, particularly in my home country of Scotland. If there is one resource Scotland possesses in abundance, it is water and mountains—ideal conditions for hydropower. Clean, reliable, and perfectly suited to Scotland’s geography, hydropower offers immense potential. Yet, it is frequently overshadowed by more politically fashionable alternatives. This underutilised resource must surely be a larger part of the energy mix if we are truly committed to a sustainable and secure future.

Collaboration, Not Conflict

The ongoing struggle between advocates of hydrocarbons and renewables is counterproductive. This is not, and should never be, an “either/or” debate. It’s not about pitting one energy source against another in a winner-takes-all battle. We need all of them. Oil, gas, nuclear, hydropower, and renewables must work together in a complementary way. Each has strengths and weaknesses, but when combined, they can provide the stability and security that is vital for any modern economy. Yet, achieving this balance cannot be left solely to market forces or political posturing. Government leadership is crucial, but it must be leadership grounded in a long-term vision and free from the biases and ideologies that often cloud all sides of the debate. That vision must take into account the needs of today’s population while also considering the people who will inherit the decisions we make now. A knee-jerk tax on oil companies today might win political points, but it does nothing to secure the energy future of tomorrow. We need strategic foresight—a commitment to managing energy policy not just for the next election cycle, but for the next generation.

The True Cost of Energy

It’s easy to criticise with the benefit of hindsight, but the truth is that energy policy is about making difficult trade-offs. We must all come to terms with the fact that energy comes at a price—there is no such thing as cheap energy. Every source, whether it be wind, solar, gas, nuclear, or hydropower, demands investment, infrastructure, ongoing maintenance, decommissioning and replacement. Economic forces will inevitably shape these costs, as the realities of supply chains, labour, and technological advancements dictate the true price of energy. The belief that renewables alone can meet all our energy needs without significant expense is a dangerous misconception. To suggest that they will reduce costs is a bold claim—one that is easy to make but far harder to substantiate. It may sound appealing and environmentally conscious, but it merely postpones the real challenge. Instead, we would be wiser to face the issue directly, taking responsible action now, rather than deferring it to the future in attempt to be popular and sound environmentally conscious.

But this is where the conversation must evolve. We need to recognise that while renewables are a crucial part of our energy future, they come with their own complexities. The path forward requires a balanced approach—one that acknowledges the challenges and ensures we work together to overcome them. It’s not about choosing one energy source over another, but about integrating them effectively and creating a system that is resilient, reliable, and sustainable.

Equally important is ensuring that all parts of the energy supply chain are supported, from production to infrastructure development. For the energy transition to truly succeed, there must be shared responsibility, balanced risk and shared rewards. We need to foster collaboration and make the entire system—from traditional energy sectors to emerging technologies—attractive for investment. Only by working together can we build an energy future that is both sustainable and prosperous.

Leadership for Today and Tomorrow

What the UK urgently requires is not short-term solutions or political grandstanding, but a vision grounded in objective, collaborative leadership—a leadership that embraces the complexity of the energy system and has the foresight to make decisions for today while safeguarding the future. I've said it many times before, because I believe it to be true: the time has come to move beyond polarising arguments and ideological divisions. We must rise above the distractions of partisan politics and face the reality before us: the energy transition demands unity, pragmatism, and long-term thinking, and I sincerely hope GB Energy and The Scottish Government together with their counterparts in Wales and Northern Ireland, can rise to this challenge.

This is a moment that calls for leaders who can unite all voices—those from the oil and gas sector, renewable energy champions, financiers, and consumers—under a shared purpose: creating a future where energy is affordable, reliable, and sustainable. To achieve this, we must be willing to discard old battle lines and work together with a focus on what truly matters.

Standing next to a weathered coconut sign on the beach—a humorous yet simple reminder of how we often view cause and effect—it reads: “If the coconut is wet, it’s raining. If the coconut is swaying, it’s windy. If the coconut is missing, there’s a hurricane.” It's a light hearted parable, but one with a serious message when we think about the challenges facing the UK energy sector. Let's hope our actions are not the hurricane, and that the oil industry is not merely the coconut reacting to forces beyond its control.

It’s not about pointing fingers or demanding that one group shoulders the entire burden. To me, that’s complete nonsense. The real task ahead is to build an energy system that works for everyone—one that is equitable, resilient, and adaptable to the evolving needs of tomorrow. The challenges we face are immense, but with the right leadership, thoughtful policies, and a balanced mix of energy sources, these obstacles can be overcome.

Only through collaboration—guided by wisdom and driven by a shared sense of responsibility—can we ensure a future that is not only brighter but sustainable for generations to come.

Let’s just hope we’re not the ones making the coconut disappear!

References

1. Mnyanda, Lukanyo. “Banks Slash Loans to UK North Sea Oil Groups as Windfall Tax Hits Industry.” Financial Times, 29 April 2024.

2. SpareBank 1 Markets. “Reserve-Based Lending and Taxation Impact on UK Oil Producers.” SpareBank Research, April 2024.

3. Wood Mackenzie. “Impact of the Energy Profits Levy on UK Oil and Gas Production.” Wood Mackenzie Energy Research, March 2024.

4. Ping Petroleum. “Statement on UK Energy Policy and Taxation.” Ping Petroleum Press Release, February 2024.

5. Norwegian Government. “Stability and Competitiveness in the Energy Sector.” Norwegian Ministry of Petroleum and Energy Report, January 2024.

6. Greenpeace UK. “The Climate Damages Tax: A Path to Justice.” Greenpeace UK Policy Paper, April 2024.7. Hillman, David, et al. “Stamp Out Poverty: The Climate Damages Tax Report.” Stamp Out Poverty Coalition, April 2024.

#ukenergy #oilandgas #renewables #allenergy #cometogether