I was listening to Kemi Badenoch yesterday, explaining her energy policy in an interview, and I had one of those faintly unsettling moments where everything sounds confident, brisk, and entirely untethered from how the thing actually works.
The pitch is wonderfully simple. Drill more oil and gas, collect the taxes, and use that to bring down bills. If that is not quite enough, trim a bit off welfare and redirect that as well. Cheap energy sorted. One can almost hear the satisfying click as the pieces fall into place.
Except they do not.
What you actually have is a neat little loop. Gas prices spike, household bills follow, and tax receipts from producers rise with them. The government then hands some of that money back to consumers. Round we go. It feels like action, but it never touches the price-setting mechanism. The cost of energy remains exactly where it was determined in the first place.
And the scale matters. UK households spend on the order of £70 to £90 billion a year on energy, depending on prices. North Sea tax revenues, even in strong years, are a fraction of that. You are trying to steady a very large ship with a rather small rudder.
The North Sea element is the bit that sounds most reassuring. We will produce our own energy, keep the money here, take control. It has a pleasingly Churchillian ring to it. The awkward detail is that oil and gas are sold into global markets. The UK produces about 1% of global oil and a bit over 2% of global gas. That does not move prices. We are a price taker. Even Badenoch now concedes this will not directly lower bills, which rather leaves the whole exercise doing something other than what it is being sold as.
And even before you get to that, there is the small matter that the North Sea is not what it was. It is a mature basin, roughly 90% depleted. What is left is harder to extract and more expensive. New projects are marginal and tend to need higher prices to make sense. Which is an odd route to "cheap energy".
Then there is the time horizon. Once you build a platform, you are in for decades. You do not casually switch it off because the economics turn awkward. Add in decommissioning, where the bill is expected to run to roughly £40 to £45 billion in total over time, with billions already being spent each year, and the picture starts to look less like energy independence and more like a long-term financial commitment with a sizeable exit fee.
Now, to be fair, there is nothing remotely controversial about squeezing more out of existing licences. In fact, Labour's government is doing exactly that. The infrastructure is there, the investment is sunk, and it would be perverse not to use it. The curious twist is that once Labour is doing something sensible, it suddenly becomes suspect.
Hovering over all of this is the phrase "net zero", used as a sort of all-purpose villain. The difficulty is that a large slice of the public has been sold a cartoon version of it. Many seem to think it means abolishing fossil fuels entirely and immediately, which it does not. It means balancing emissions with removals over time, and in practice still involves oil and gas during the transition. It is much easier to knock down that misunderstanding than engage with the actual policy.
At which point we arrive at the welfare twist. She said in the interview that welfare would be cut, with the implication that the savings help fund cheaper energy. Which sounds tidy until you look at who pays and who benefits. You take money from those most in need, then spread relief across everyone, including plenty who were never in difficulty to begin with. It is a curious redistribution that starts by tightening the belt of the poorest and ends by loosening the collar of the comfortable.
And all the while, the underlying machinery remains untouched. Gas still sets the electricity price in the UK. Global markets still drive gas prices. When they spike, we all feel it. None of this changes that. It simply moves money around after the damage has been done.
What is striking is not that there is a critique of current policy. There is plenty to criticise. It is that the proposed alternative never quite gets beyond reacting to it. Less net zero, more drilling, fewer subsidies here, more subsidies there. It has the feel of someone determined to steer away from Labour without first checking whether they are still on the same road.
In the end, you are left with a system that depends on high fossil fuel prices to fund relief from high fossil fuel prices, tied to a declining and expensive basin, locked into decades-long commitments, and carrying a decommissioning bill measured in tens of billions. It sounds decisive. It feels robust.
Then the quarterly energy bill lands, and nothing about it has changed.










